Document and Entity Information
Document and Entity Information Document - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 03, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | CTG | |
Entity Registrant Name | COMPUTER TASK GROUP, INCORPORATED | |
Entity Central Index Key | 0000023111 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity File Number | 1-9410 | |
Entity Tax Identification Number | 16-0912632 | |
Entity Address, Address Line One | 300 Corporate Parkway | |
Entity Address, Address Line Two | Suite 214N | |
Entity Address, City or Town | Amherst | |
Entity Address, State or Province | NY | |
Entity Incorporation, State or Country Code | NY | |
Entity Address, Postal Zip Code | 14226 | |
City Area Code | 716 | |
Local Phone Number | 882-8000 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 16,044,815 | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 74,588 | $ 82,759 | $ 152,790 | $ 172,176 |
Cost of services | 53,593 | 63,009 | 111,660 | 131,831 |
Gross profit | 20,995 | 19,750 | 41,130 | 40,345 |
Selling, general and administrative expenses | 20,710 | 16,577 | 40,138 | 33,973 |
Operating income | 285 | 3,173 | 992 | 6,372 |
Interest and other income | 72 | 99 | 200 | 190 |
Interest and other expense | 436 | 484 | 794 | 832 |
Income (loss) before income taxes | (79) | 2,788 | 398 | 5,730 |
Provision for income taxes | 51 | 748 | 213 | 1,450 |
Net income (loss) | $ (130) | $ 2,040 | $ 185 | $ 4,280 |
Net income (loss) per share: | ||||
Basic | $ (0.01) | $ 0.14 | $ 0.01 | $ 0.30 |
Diluted | $ (0.01) | $ 0.13 | $ 0.01 | $ 0.28 |
Weighted average shares outstanding: | ||||
Basic | 14,832 | 14,419 | 14,768 | 14,309 |
Diluted | 14,832 | 15,122 | 15,399 | 15,050 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (130) | $ 2,040 | $ 185 | $ 4,280 |
Foreign currency translation adjustment | 110 | (3,238) | 1,054 | (4,567) |
Change in pension, net of taxes of $24 and $45 in the 2023 and 2022 second quarters, respectively, and $40 and $78 in the first two quarters of 2023 and 2022, respectively | 60 | 580 | 104 | 911 |
Other comprehensive income (loss) | 170 | (2,658) | 1,158 | (3,656) |
Comprehensive income (loss) | $ 40 | $ (618) | $ 1,343 | $ 624 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Taxes attributable to change in pension loss | $ 24 | $ 45 | $ 40 | $ 78 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 19,137 | $ 25,140 |
Accounts receivable, net of allowances of $406 and $397 in 2023 and 2022, respectively | 70,457 | 70,979 |
Prepaid and other current assets | 4,992 | 3,769 |
Total current assets | 94,586 | 99,888 |
Property, equipment and capitalized software, net | 5,725 | 5,061 |
Operating lease right-of-use assets | 19,398 | 18,506 |
Deferred income taxes | 3,815 | 2,886 |
Acquired intangibles, net | 12,210 | 12,943 |
Goodwill | 36,245 | 35,998 |
Cash surrender value of life insurance, net | 4,202 | 4,120 |
Other assets | 2,320 | 2,101 |
Investments | 155 | 116 |
Total assets | 178,656 | 181,619 |
Current Liabilities: | ||
Accounts payable | 14,389 | 14,254 |
Accrued compensation | 14,859 | 19,016 |
Advance billings on contracts | 4,030 | 5,480 |
Short-term operating lease liabilities | 5,584 | 5,905 |
Other current liabilities | 7,864 | 7,066 |
Income taxes payable | 68 | 212 |
Total current liabilities | 46,794 | 51,933 |
Deferred compensation benefits | 6,796 | 6,424 |
Long-term operating lease liabilities | 13,686 | 12,466 |
Deferred income taxes | 1,365 | 1,482 |
Other long-term liabilities | 2,262 | 3,335 |
Total liabilities | 70,903 | 75,640 |
Shareholders’ Equity: | ||
Common stock, par value $0.01 per share, 150,000,000 shares authorized; 27,017,824 shares issued in 2023 and 2022 | 270 | 270 |
Capital in excess of par value | 107,250 | 109,868 |
Retained earnings | 114,836 | 114,651 |
Less: Treasury stock of 10,973,009 and 11,274,171 shares at cost, in 2023 and 2022, respectively | (100,455) | (103,504) |
Accumulated other comprehensive loss | (14,148) | (15,306) |
Total shareholders’ equity | 107,753 | 105,979 |
Total liabilities and shareholders’ equity | $ 178,656 | $ 181,619 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 406 | $ 397 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 27,017,824 | 27,017,824 |
Treasury stock, shares | 10,973,009 | 11,274,171 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jul. 01, 2022 | |
Cash flow from operating activities: | ||
Net income | $ 185 | $ 4,280 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 1,755 | 1,400 |
Equity-based compensation expense | 867 | 1,176 |
Deferred income taxes | (1,090) | 155 |
Deferred compensation benefits | 528 | (97) |
Loss on the sale of property and equipment | 9 | |
Changes in assets and liabilities that provide (use) cash, excluding the effects of acquisitions: | ||
Accounts receivable | 1,303 | 4,256 |
Prepaid and other current assets | (1,201) | (423) |
Other long-term assets | (216) | (22) |
Cash surrender value of life insurance | 241 | 429 |
Accounts payable | (447) | (7,203) |
Accrued compensation | (4,473) | (3,023) |
Income taxes payable / receivable | (147) | 442 |
Advance billings on contracts | (1,529) | 455 |
Other current liabilities | 683 | 1,005 |
Other long-term liabilities | (1,073) | 4 |
Net cash provided by (used in) operating activities | (4,605) | 2,834 |
Cash flow from investing activities: | ||
Cash paid for acquisitions, net of cash acquired | (82) | |
Additions to property and equipment | (908) | (280) |
Additions to capitalized software | (637) | |
Proceeds from sale of property & equipment | 2 | 9 |
Premiums paid for life insurance | (323) | (450) |
Net cash used in investing activities | (1,784) | (721) |
Cash flow from financing activities: | ||
Proceeds from long-term debt | 16,924 | |
Proceeds from stock option plan exercises | 84 | 215 |
Taxes remitted for shares withheld from equity-based compensation transactions | (628) | (1,229) |
Payments on long-term debt | (16,924) | |
Proceeds from Employee Stock Purchase Plan | 108 | 84 |
Change in cash overdraft, net | 444 | 223 |
Net cash provided by (used in) financing activities | 8 | (707) |
Effect of exchange rates on cash and cash equivalents | 378 | (1,511) |
Net decrease in cash and cash equivalents | (6,003) | (105) |
Cash and cash equivalents at beginning of year | 25,140 | 35,584 |
Cash and cash equivalents at end of quarter | $ 19,137 | $ 35,479 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (loss) |
Balance at Dec. 31, 2021 | $ 94,437 | $ 270 | $ 110,330 | $ 108,042 | $ (107,265) | $ (16,940) |
Balance, shares at Dec. 31, 2021 | 27,018,000 | 11,668,000 | ||||
Employee Stock Purchase Plan share issuance | 84 | (3) | $ 87 | |||
Employee Stock Purchase Plan share issuance, shares | (9,000) | |||||
Stock Option Plan share issuance, net | 215 | (233) | $ 448 | |||
Stock Option Plan share issuance, net, shares | (49,000) | |||||
Restricted Stock Plan share issuance/forfeiture | (1,229) | (2,380) | $ 1,151 | |||
Restricted Stock Plan share issuance/forfeiture, shares | (111,000) | |||||
Equity-based compensation | 1,176 | 1,176 | ||||
Net income (loss) | 4,280 | 4,280 | ||||
Foreign currency adjustment | (4,567) | (4,567) | ||||
Pension loss adjustment, net of tax | 911 | 911 | ||||
Balance at Jul. 01, 2022 | 95,307 | $ 270 | 108,890 | 112,322 | $ (105,579) | (20,596) |
Balance, shares at Jul. 01, 2022 | 27,018,000 | 11,499,000 | ||||
Balance at Apr. 01, 2022 | 95,408 | $ 270 | 109,422 | 110,282 | $ (106,628) | (17,938) |
Balance, shares at Apr. 01, 2022 | 27,018,000 | 11,599,000 | ||||
Employee Stock Purchase Plan share issuance | 47 | (1) | $ 48 | |||
Employee Stock Purchase Plan share issuance, shares | (5,000) | |||||
Stock Option Plan share issuance, net | 125 | (139) | $ 264 | |||
Stock Option Plan share issuance, net, shares | (29,000) | |||||
Restricted Stock Plan share issuance/forfeiture | (258) | (995) | $ 737 | |||
Restricted Stock Plan share issuance/forfeiture, shares | (66,000) | |||||
Equity-based compensation | 603 | 603 | ||||
Net income (loss) | 2,040 | 2,040 | ||||
Foreign currency adjustment | (3,238) | (3,238) | ||||
Pension loss adjustment, net of tax | 580 | 580 | ||||
Balance at Jul. 01, 2022 | 95,307 | $ 270 | 108,890 | 112,322 | $ (105,579) | (20,596) |
Balance, shares at Jul. 01, 2022 | 27,018,000 | 11,499,000 | ||||
Balance at Dec. 31, 2022 | $ 105,979 | $ 270 | 109,868 | 114,651 | $ (103,504) | (15,306) |
Balance, shares at Dec. 31, 2022 | 27,017,824 | 27,018,000 | 11,274,000 | |||
Employee Stock Purchase Plan share issuance | $ 108 | (30) | $ 138 | |||
Employee Stock Purchase Plan share issuance, shares | (15,000) | |||||
Stock Option Plan share issuance, net | 84 | (204) | $ 288 | |||
Stock Option Plan share issuance, net, shares | (24,000) | |||||
Restricted Stock Plan share issuance/forfeiture | (628) | (3,251) | $ 2,623 | |||
Restricted Stock Plan share issuance/forfeiture, shares | (262,000) | |||||
Equity-based compensation | 867 | 867 | ||||
Net income (loss) | 185 | 185 | ||||
Foreign currency adjustment | 1,054 | 1,054 | ||||
Pension loss adjustment, net of tax | 104 | 104 | ||||
Balance at Jun. 30, 2023 | $ 107,753 | $ 270 | 107,250 | 114,836 | $ (100,455) | (14,148) |
Balance, shares at Jun. 30, 2023 | 27,017,824 | 27,018,000 | 10,973,000 | |||
Balance at Mar. 31, 2023 | $ 107,304 | $ 270 | 108,240 | 114,966 | $ (101,854) | (14,318) |
Balance, shares at Mar. 31, 2023 | 27,018,000 | 11,112,000 | ||||
Employee Stock Purchase Plan share issuance | 52 | (17) | $ 69 | |||
Employee Stock Purchase Plan share issuance, shares | (8,000) | |||||
Stock Option Plan share issuance, net | 16 | (87) | $ 103 | |||
Stock Option Plan share issuance, net, shares | (6,000) | |||||
Restricted Stock Plan share issuance/forfeiture | (181) | (1,408) | $ 1,227 | |||
Restricted Stock Plan share issuance/forfeiture, shares | (125,000) | |||||
Equity-based compensation | 522 | 522 | ||||
Net income (loss) | (130) | (130) | ||||
Foreign currency adjustment | 110 | 110 | ||||
Pension loss adjustment, net of tax | 60 | 60 | ||||
Balance at Jun. 30, 2023 | $ 107,753 | $ 270 | $ 107,250 | $ 114,836 | $ (100,455) | $ (14,148) |
Balance, shares at Jun. 30, 2023 | 27,017,824 | 27,018,000 | 10,973,000 |
Financial Statements
Financial Statements | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Statements | 1. Financial Statements The condensed consolidated financial statements included herein reflect, in the opinion of the management of Computer Task Group, Incorporated (“CTG” or “the Company”), all normal recurring adjustments necessary to present fairly the condensed consolidated financial position, results of operations, comprehensive income (loss), cash flows, and shareholders’ equity for the periods presented. Certain prior period amounts were reclassified to conform to the current year’s presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's latest Annual Report on Form 10‑K filed with the SEC. The Company's fiscal year-end is December 31. During the year, the quarters generally consist of a 13-week fiscal period where the last day of each of the first three quarters is a Friday. The 2023 second quarter began on April 1, 2023 and ended on June 30, 2023. The 2022 second quarter began on April 2, 2022 and ended on July 1, 2022 . There were 64 billable days in both the 2023 and 2022 second quarters, and 128 and 129 billable days in the 2023 and 2022 year-to-date periods, respectively. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation These condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to the SEC rules and regulations. There are no unconsolidated entities, or off-balance sheet arrangements other than certain guarantees supporting office leases and the performance under government contracts in the Company's European operations. All intercompany accounts have been eliminated. The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires the Company's management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes, which could be impacted by existing market conditions and factors, including among others lingering effects of the COVID-19 pandemic, current macroeconomic conditions such as inflation, and the unpredictability and severity of a civil unrest or outbreak of war or hostilities. Such estimates primarily relate to the recognition of revenue, leased assets and liabilities, the purchase accounting for acquisitions and the valuation of goodwill, the valuation allowance for deferred tax assets, actuarial assumptions including discount rates and expected return on assets, as applicable, for the Company’s defined benefit plans, the valuation of stock options and restricted stock for recording equity-based compensation expense, the allowance for credit losses, investment valuation, legal matters, other contingencies, and estimates of progress toward completion and direct profit or loss on contracts, as applicable. Management believes that the information and disclosures provided herein are adequate to present fairly the condensed consolidated financial position, results of operations, comprehensive income (loss), cash flows, and shareholders’ equity of the Company. Subsequent Event On August 9, 2023, subsequent to the end of the fiscal second quarter on June 30, 2023, the Company and the IT solutions provider Cegeka Groep nv (“Cegeka”), a company headquartered in Hasselt, Belgium, entered into a transaction for Cegeka to purchase all of the outstanding shares of CTG for $ 10.50 per share in cash, which represents an implied equity value for the Company of approximately $ 170 million. The closing of the transaction will be subject to customary conditions, including the expiration or termination of certain regulatory periods and the tender of shares representing at least two-thirds of CTG’s outstanding common stock in a tender offer, as required by the merger approval requirements under applicable New York law. The transaction is expected to close later in 2023. Upon the successful completion of the tender offer, Cegeka’s acquisition subsidiary will be merged into CTG, and any remaining shares of common stock of CTG will be cancelled and converted into the right to receive the same $ 10.50 per share in cash. After closing, CTG will become a privately held company and shares of CTG common stock will no longer be listed on any public market. The Company operates in three segments within its business, North America IT Solutions and Services, Europe IT Solutions and Services, and Non-Strategic Technology Services. The Company provides information and technology-related services to its clients. CTG provides these services to all of the markets that it serves. The services provided typically encompass the IT business solution life cycle, including phases for planning, developing, implementing, managing, and ultimately maintaining the IT solution. These services ensure that the Company's clients utilize the right information technology to meet their business needs, maximize their IT systems’ value, and operate efficiently and effectively. A typical client is an organization with large, complex technology, information, and data processing requirements. The segment revenue for the quarter and two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Quarter Ended: Year-over-Year (amounts in thousands) June 30, 2023 July 1, 2022 Change North America IT Solutions and Services 34.8 % $ 25,997 24.6 % $ 20,339 27.8 % Europe IT Solutions and Services 51.5 % 38,393 44.9 % 37,160 3.3 % Non-Strategic Technology Services 13.7 % 10,198 30.5 % 25,260 ( 59.6 )% Total 100.0 % $ 74,588 100.0 % $ 82,759 ( 9.9 )% For the Two Quarters Ended: Year-over-Year (amounts in thousands) June 30, 2023 July 1, 2022 Change North America IT Solutions and Services 32.2 % $ 49,193 23.7 % $ 40,773 20.7 % Europe IT Solutions and Services 51.4 % 78,486 46.2 % 79,638 ( 1.4 )% Non-Strategic Technology Services 16.4 % 25,111 30.1 % 51,765 ( 51.5 )% Total 100.0 % $ 152,790 100.0 % $ 172,176 ( 11.3 )% The Company focuses a significant portion of its services through five vertical market focus areas: healthcare (which includes services provided to healthcare providers, health insurers (payers), and life sciences companies), financial services, technology service providers, manufacturing, and energy. The Company focuses on these five vertical areas as it believes that these areas are either higher growth markets than the general IT services market and the general economy, or are areas that provide greater potential for the Company’s growth due to the size of the vertical market. The remainder of CTG’s revenue is derived from general markets. The Company’s revenue by vertical market as a percentage of total revenue for the quarter and two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Quarter Ended For the Two Quarters Ended June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Healthcare 23.4 % 17.6 % 20.9 % 17.5 % Financial services 16.7 % 15.3 % 17.1 % 15.8 % Technology service providers 14.8 % 24.2 % 15.5 % 23.9 % Manufacturing 13.7 % 15.2 % 15.1 % 14.5 % Energy 6.5 % 6.6 % 6.4 % 5.9 % General markets 24.9 % 21.1 % 25.0 % 22.4 % Total 100.0 % 100.0 % 100.0 % 100.0 % Revenue Recognition The Company recognizes revenue when control of the promised good or service is transferred to clients, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. For time-and-material contracts, revenue is recognized as hours are incurred and costs are expended. For contracts with progress billing schedules (i.e. progress billing), primarily monthly, revenue is recognized as services are rendered to the client. Revenue for fixed-price contracts is recognized over time using an input-based approach. Revenue recognition over time best portrays the Company’s performance in transferring control of the goods or services to the client. On most fixed price contracts, revenue recognition is supported through contractual clauses that require the client to pay for work performed to date, including cost plus a reasonable profit margin, for goods or services that have no alternative use to the Company. On certain contracts, revenue recognition is supported through contractual clauses that indicate the client controls the asset, or work in process, as the Company creates or enhances the asset. On a given project, actual salary and indirect labor costs incurred are measured and compared with the total estimate of costs of such items at the completion of the project. Revenue is recognized based upon the percentage-of-completion calculation of total incurred costs to total estimated costs. The Company infrequently works on fixed-price projects that include significant amounts of material or other non-labor related costs that could distort the percent complete within a percentage-of-completion calculation. The Company’s estimate of the total labor costs it expects to incur over the term of the contract is based on the nature of the project and the Company's experience on similar projects, and includes management judgments and estimates that affect the amount of revenue recognized on fixed-price contracts in any accounting period. Losses on fixed-price projects are recorded when identified. The Company’s revenue from contracts accounted for under time-and-material, progress billing and percentage-of-completion methods as a percentage of consolidated revenue for the quarter and two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Quarter Ended For the Two Quarters Ended June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Time-and-material 74.5 % 77.7 % 76.6 % 77.6 % Progress billing 18.6 % 17.7 % 16.9 % 18.1 % Percentage-of-completion 6.9 % 4.6 % 6.5 % 4.3 % Total 100.0 % 100.0 % 100.0 % 100.0 % The Company recorded revenue in the quarter and two quarters ended June 30, 2023 and July 1, 2022 as follows: For the Quarter Ended: June 30, 2023 July 1, 2022 Year-over-Year (amounts in thousands) North America 48.2 % $ 35,970 54.4 % $ 45,042 ( 20.1 )% Europe 51.8 % 38,618 45.6 % 37,717 2.4 % Total 100.0 % $ 74,588 100.0 % $ 82,759 ( 9.9 )% For the Two Quarters Ended: June 30, 2023 July 1, 2022 Year-over-Year (amounts in thousands) North America 48.3 % $ 73,829 53.0 % $ 91,304 ( 19.1 )% Europe 51.7 % 78,961 47.0 % 80,872 ( 2.4 )% Total 100.0 % $ 152,790 100.0 % $ 172,176 ( 11.3 )% Significant Judgments With the exception of cost estimates on certain fixed-price projects, there are no other significant judgments used to determine the timing of the satisfaction of performance obligations or determining the transaction price and amounts allocated to performance obligations. The Company allocates the transaction price based on standalone selling prices for contracts with clients that include more than one performance obligation. We determine standalone selling price based on the expected cost of the good or service plus margin approach. Certain clients may qualify for discounts and rebates, which the Company accounts for as variable consideration. We estimate variable consideration and reduce revenue recognized based on the amount we expect to provide to clients. Contract Balances For time-and-material and progress billing contracts, the timing of the Company’s satisfaction of its performance obligations is consistent with the timing of payment. For these contracts, the Company has the right to payment in the amount that corresponds directly with the value of the Company’s performance to date. The Company uses the right to invoice practical expedient that allows the Company to recognize revenue in the amount for which it has the right to invoice for time-and-material and progress billing contracts. Bill schedules for fixed-price contracts are generally consistent with the Company’s performance in transferring control of the goods or services to the client. There are no significant financing components in the Company's contracts with clients. Advance billings represent contract liabilities for cash payments received in advance of the Company's performance. Unbilled receivables are reported within “accounts receivable” on the consolidated balance sheets. Accounts receivable and contract liability balances fluctuate based on the timing of the client’s billing schedule and the Company’s period-end date. There are no significant costs to obtain or fulfill contracts with clients. Transaction Price Allocated to Remaining Performance Obligations As of June 30, 2023 , the aggregate transaction price allocated to unsatisfied or partially unsatisfied performance obligations for fixed-price contracts was approximately $ 6.8 million. Approximately $ 6.6 million of the transaction price allocated to unsatisfied or partially unsatisfied performance obligations is expected to be earned in 2023 , and approximately $ 0.2 million of the transaction price allocated to unsatisfied or partially unsatisfied performance obligations is expected to be earned in 2024 and beyond . The Company uses the right to invoice practical expedient for time-and-material and progress billing contracts, therefore, no disclosure is required for unsatisfied performance obligations for contracts in which the Company recognized revenue at the amount to which it has the right to invoice for services performed. Taxes Collected from Clients The Company records taxes collected from its clients for remittance to governmental authorities, primarily in its international locations, on a net basis in the condensed consolidated financial statements. Fair Value Fair value is defined as the exchange price that would be received for an asset or paid for a liability in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants. The Company utilizes a fair value hierarchy for its assets and liabilities, as applicable, based upon three levels of input, which are: Level 1—quoted prices in active markets for identical assets or liabilities (observable) Level 2—inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in inactive markets, or other inputs that are observable or can be supported by observable market data for essentially the full term of the asset or liability (observable) Level 3—unobservable inputs that are supported by little or no market activity, but are significant to determining the fair value of the asset or liability (unobservable) At June 30, 2023 and December 31, 2022, the carrying amounts of the Company’s cash of $ 19.1 million and $ 25.1 million, respectively, approximated fair value. As described in Note 3 of the condensed consolidated financial statements, the Company acquired 100 % of the equity of Eleviant in the 2022 third quarter. Level 3 inputs were used to estimate the fair values of the assets acquired and liabilities assumed. The valuation techniques used to assign fair values to intangible assets included the relief-from-royalty and excess earnings methods. The Company has recorded a contingent consideration liability related to the earn-out provision of which a portion will be payable in each period subject to the achievement by Eleviant of revenue and gross profit targets for fiscal 2022, 2023 and 2024. There is no payout if the achievements are below the target threshold. However, in subsequent years, if the preceding year’s targets were not met, an earn-out can be earned for both years if the combined total for gross profit or revenue for the two years exceeds the combined two-year targets. During the 2023 second quarter, the Company paid approximately $ 0.9 million related to the earn-out based on the achievement by Eleviant of the revenue and gross profit targets for fiscal 2022. The fair value of the contingent consideration as of June 30, 2023 was $ 3.1 million. Life Insurance Policies The Company has purchased life insurance on the lives of a number of former employees who are plan participants in the non-qualified defined benefit Executive Supplemental Benefit Plan. In total, there are policies currently on 16 individuals, whose average age is 80 years old. Those policies have generated cash surrender value and the Company has taken loans against the policies. At June 30, 2023 , the insurance policies that have been borrowed against have a gross cash surrender value of $ 30.1 million, outstanding loans and interest totaling $ 26.8 million, and a net cash surrender value of $ 3.3 million. At December 31, 2022, these insurance policies had a gross cash surrender value of $ 29.5 million, outstanding loans and interest totaling $ 26.0 million, and a net cash surrender value of $ 3.5 million. The net cash surrender values are included on the condensed consolidated balance sheets in “Cash surrender value of life insurance, net” under non-current assets. At June 30, 2023 and December 31, 2022, the total death benefit for the remaining policies was approximately $ 37.8 million and $ 37.0 million, respectively. Currently, upon the death of all of the remaining plan participants, the Company would expect to receive approximately $ 10.8 million after the payment of obligations, and, under current tax regulations, record a non-taxable gain of approximately $ 7.5 million. Cash and Cash Equivalents, and Cash Overdrafts For purposes of the statement of cash flows, cash and cash equivalents are defined as cash on hand, demand deposits, and short-term, highly liquid investments with a maturity of three months or less. The Company does not fund its bank accounts for the checks it has written until the checks are presented to the bank for payment. In the event the Company has no available cash at the bank for which it writes its checks, the "change in cash overdraft, net" line item on the condensed consolidated statement of cash flows would be present, and represent the increase or decrease in outstanding checks for a given period. The cash in the Company’s U.S. banks is insured by the Federal Deposit Insurance Corporation up to the insurable limit of $ 250,000 . As of June 30, 2023 and December 31, 2022, the Company has multiple accounts that carry balances in excess of this insurable limit. The Company’s cash in its foreign bank accounts is not insured. Accounts Receivable Factoring As part of its working capital management, the Company has a factoring agreement to sell certain trade accounts receivables associated with its largest client on a non-recourse basis to a third-party financial institution. The Company accounts for these transactions as sales of receivables and presents cash proceeds as cash provided by operating activities in the condensed consolidated statements of cash flows. There were $ 2.0 million and zero trade accounts receivable sold under the factoring agreement during the quarters ended June 30, 2023 and July 1, 2022 , respectively. Total trade accounts receivable sold under the factoring agreement were approximately $ 12.4 million and $ 4.5 million in the year-to-date periods ended June 30, 2023 and July 1, 2022, respectively. Fees for the factoring arrangement were recorded in cost of services and were less than $ 0.1 million and $ 0.1 million in the quarter and year-to-date period ended June 30, 2023 , respectively, and were zero and less than $ 0.1 million in the quarter and year-to-date period ended July 1, 2022 , respectively. Property, Equipment and Capitalized Software Costs Property, equipment and capitalized software at June 30, 2023 and December 31, 2022 were recorded as follows: (amounts in thousands) June 30, 2023 December 31, 2022 Property, equipment and capitalized software $ 16,243 $ 15,086 Accumulated depreciation and amortization ( 10,518 ) ( 10,025 ) Property, equipment and capitalized software, net $ 5,725 $ 5,061 Depreciation expense for the Company totaled $ 0.5 million and $ 0.4 million in the quarters ended June 30, 2023 and July 1, 2022, respectively, and $ 0.9 million in both of the year-to-date periods ended June 30, 2023, and July 1, 2022. The Company capitalizes software projects developed for commercial use. The change in the Company’s capitalized software cost balance during the quarter and two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Capitalized software, beginning balance $ 1,508 $ 1,573 $ 1,484 $ 1,607 Additions 714 — 714 — Foreign currency translation 26 ( 89 ) 50 ( 123 ) Capitalized software $ 2,248 $ 1,484 $ 2,248 $ 1,484 Capitalized software amortization periods range from three to five years , and are evaluated periodically for propriety. Amortization expense and accumulated amortization for these projects for the quarter and two quarters ended June 30, 2023 and July 1, 2022 are as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Accumulated amortization, beginning balance $ 1,315 $ 1,050 $ 1,232 $ 978 Amortization expense 126 34 209 106 Accumulated amortization $ 1,441 $ 1,084 $ 1,441 $ 1,084 During the quarter and two quarters ended June 30, 2023 and July 1, 2022, the Company's change in work-in-progress costs related to software projects being developed was as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Capitalized software, work-in-progress, beginning balance $ 714 $ — $ 473 $ — Additions 396 — 637 — Placed into service ( 714 ) — ( 714 ) — Capitalized software, work-in-progress, ending balance $ 396 $ — $ 396 $ — Guarantees The Company has a number of guarantees in place in its European operations that support office leases and performance under government contracts. These guarantees totaled approximately $ 1.4 million and $ 3.0 million at June 30, 2023 and December 31, 2022, respectively, and have expiration dates ranging from July 2023 through October 2034 . Goodwill The goodwill recorded on the Company's condensed consolidated balance sheet at June 30, 2023 relates to previous acquisitions, including Eleviant in 2022. In accordance with current accounting guidance for “Intangibles - Goodwill and Other,” the Company performs goodwill impairment testing at least annually (in the Company’s fourth quarter), unless indicators of impairment exist in interim periods. There were no impairment indicators noted in the quarter and two quarters ended June 30, 2023 and July 1, 2022. The changes in the carrying amount of goodwill for the two quarters ended June 30, 2023 are as follows: (amounts in thousands) Balance at December 31, 2022 $ 35,998 Working capital adjustment - acquisitions ( 82 ) Foreign currency translation 329 Balance at June 30, 2023 $ 36,245 The Company's goodwill by segment at June 30, 2023 and December 31, 2022 was as follows: (amounts in thousands) June 30, 2023 December 31, 2022 North America IT Solutions and Services $ 18,700 $ 18,753 Europe IT Solutions and Services 17,545 17,245 Total goodwill $ 36,245 $ 35,998 Acquired Intangible Assets Acquired intangible assets at June 30, 2023 consist of the following: (amounts in thousands) Estimated Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Amount Trademarks 2 years $ 1,532 $ ( 1,404 ) $ ( 128 ) $ — Technology 10 years 1,141 ( 234 ) ( 13 ) 894 Customer relationships 7 - 13 years 17,196 ( 4,886 ) ( 994 ) 11,316 Total $ 19,869 $ ( 6,524 ) $ ( 1,135 ) $ 12,210 Acquired intangible assets at December 31, 2022 consist of the following: (amounts in thousands) Estimated Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Amount Trademarks 2 years $ 1,532 $ ( 1,380 ) $ ( 152 ) $ — Technology 10 years 1,141 ( 161 ) ( 23 ) 957 Customer relationships 7 - 13 years 17,196 ( 4,053 ) ( 1,157 ) 11,986 Total $ 19,869 $ ( 5,594 ) $ ( 1,332 ) $ 12,943 Estimated amortization expense for the remainder of 2023, the five succeeding years, and thereafter is as follows: Year Annual Amortization (amounts in thousands) 2023 (remaining) $ 854 2024 1,709 2025 1,709 2026 1,709 2027 1,300 2028 1,218 Thereafter 3,711 Total $ 12,210 Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The objective of this ASU is to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU are elective and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Then in December 2022, the FASB issued ASU No. 2022-06 “Deferral of the Sunset Date of Topic 848” which amends and extends the sunset date to December 31, 2024. The Company has not elected any of the practical expedients or scope exceptions to date related to this standard. We will continue to review our contracts and arrangements that will be affected by a discontinued reference rate during the transition period. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2023 | |
Business Combinations [Abstract] | |
Acquisitions | 3. Acquisitions Eleviant Technologies, Inc. ("Eleviant") On September 29, 2022, the Company acquired 100 % of the equity of Eleviant for approximately $ 19.0 million, including $ 17.4 million of cash on hand. In addition to the cash payment, Eleviant owners and executives were issued 173,802 shares of common stock valued at $ 1.2 million, and 200,000 stock options from the 2020 Equity Award Plan at the date of acquisition, valued at $ 0.4 million. The U.S.-based Eleviant is a provider of digital transformation services and solutions, and is headquartered in Dallas, TX, with operations in Chennai and Coimbatore, India. Eleviant’s offerings support the new ways enterprises work, communicate, and scale today and focus on cloud, application modernization, mobile, artificial intelligence (AI), machine learning (ML), and robotic process automization (RPA). Eleviant’s services are supported by a portfolio of solutions, including PeopleOne, a Digital Workplace platform for employee engagement, communication, and collaboration; vChat, a chatbot builder platform; and vBots, an RPA builder platform. The acquisition is expected to aid CTG in accelerating the growth of digital solutions sales to clients in the Americas and Europe and create new points of entry with proven technology services and solutions. An earn-out of $ 5.0 million can be earned, a portion of which will be payable in each period subject to the achievement of revenue and gross profit targets for fiscal 2022, 2023 and 2024. Additionally, for each $ 10,000 of gross profit or revenue achieved above the targets, an additional $ 2,000 can be earned, with no maximum limit. There is no payout if the achievement is below the target threshold. However, in subsequent years, if the preceding year’s targets were not met, an earn-out can be earned for both years if the combined total for gross profit or revenue for the two years exceeds the combined two-year targets. The fair value as of the September 29, 2022 acquisition date was $ 4.0 million. The fair value of the remaining contingent consideration liability was determined to be approximately $ 3.1 million as of June 30, 2023. Approximately $ 1.6 million and $ 1.5 million of the remaining contingent consideration liabilities is recorded in "Other current liabilities" and "Other long-term liabilities", respectively, on the consolidated balance sheet as of June 30, 2023. The Company made a payment of $ 0.9 million related to the earn-out based upon achievement by Eleviant of revenue and gross profit targets for the 2022 fiscal year in the 2023 second quarter. The acquisition fair value of the consideration for the acquisition of Eleviant consisted of the following as of September 29, 2022: (amounts in thousands) Cash consideration $ 17,382 Share issuance 1,178 Stock option issuance - 3 month vest 166 Stock option issuance - 12 month vest 225 Working capital adjustment ( 82 ) Fair value of contingent consideration 4,000 Fair value of purchase consideration $ 22,869 The following table summarizes the preliminary allocation of the aggregate purchase price consideration to the fair value of the assets acquired and liabilities assumed as of September 29, 2022: (amounts in thousands) Assets Acquired: Cash $ 755 Accounts receivable 1,605 Prepaids and other current assets 178 Property and equipment, net 437 Taxes receivable 48 Acquired intangibles 7,250 Goodwill 17,357 Total assets acquired $ 27,630 Liabilities Assumed: Accounts payable $ 492 Short-term debt 601 Accrued compensation 355 Other current liabilities 205 Long-term debt 982 Deferred compensation benefits 324 Deferred tax liability 1,802 Total liabilities assumed $ 4,761 Net assets acquired $ 22,869 The Company allocated value to current assets and liabilities based on book values at September 29, 2022, which approximates fair value. The excess consideration was recorded as goodwill, which is not deductible for income tax purposes, and is driven by Eleviant providing a high level of digital IT solutions and offshore delivery capabilities. The intangible assets acquired in this acquisition consisted of the following: (amounts in thousands) Fair Value Estimated Useful Life Technology $ 550 10 years Customer relationships 6,700 10 years Fair value of purchase consideration $ 7,250 The Company incurred acquisition-related expenses related to retention bonuses and amortization of intangible assets of approximately $ 0.3 million and $ 0.7 million in the quarter and year-to-date period ended June 30, 2023, respectively, which were recorded as a component of selling, general, and administrative expenses in the consolidated statements of income. The accounting for this acquisition was updated in the first quarter of 2023, including a working capital adjustment of $ 0.1 million, but the preliminary purchase accounting for intangible assets has not yet been finalized as of June 30, 2023. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | 4. Net Income (Loss) Per Share Basic and diluted earnings per share (EPS) for the quarter and two quarters ended June 30, 2023 and July 1, 2022 were as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands, except per-share data) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Weighted-average number of shares outstanding 14,832 14,419 14,768 14,309 Common stock equivalents from incremental shares — 703 631 741 Number of shares on which diluted earnings 14,832 15,122 15,399 15,050 Net income (loss) $ ( 130 ) $ 2,040 $ 185 $ 4,280 Net income (loss) per share Basic $ ( 0.01 ) $ 0.14 $ 0.01 $ 0.30 Diluted $ ( 0.01 ) $ 0.13 $ 0.01 $ 0.28 Weighted-average shares represent the average number of issued shares less treasury shares, and for the basic EPS calculations, unvested restricted stock. For the quarter ended June 30, 2023, the diluted share amount reported is equal to the basic per share amount as the Company was in a net loss position and as a result, any dilution from incremental shares under equity-based compensation plans would be considered anti-dilutive. If the Company had net income, and assuming dilution, certain options representing 1.0 million and 0.6 million shares of common stock were outstanding at June 30, 2023 and July 1, 2022 , respectively, but would not have been or were not included in the computation of diluted earnings per share as their effect on the computation would have been anti-dilutive. |
Lease Commitments
Lease Commitments | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Lease Commitments | 5. Lease Commitments The Company records a right-of-use asset and liability for substantially all leases for which it is a lessee, in accordance with Topic 842 “Leases.” The Company is obligated under a number of long-term operating leases for office space and office equipment, and for automobiles leased in Europe. Most leases contain both lease components (fixed payments for rent) and non-lease components (common-area maintenance and other services). The Company has elected the practical expedient to separate lease and non-lease components for its office leases and has elected to group lease and non-lease components for its vehicle leases. Some leases contain renewal options with escalation clauses commensurate with local market fluctuations, however, generally limiting an annual increase to no more than 5.0 % of the existing lease payment. The exercise of lease renewal options is at the Company’s sole discretion. The Company has excluded renewal options in the measurement of right-of-use assets and lease liabilities if they are not reasonably certain of exercise. Operating leases are included in the right-of-use lease assets, short-term lease liabilities, and long-term lease liabilities on the condensed consolidated balance sheets. The Company measures the operating lease liabilities at lease commencement date based on the present value of remaining lease payments using the rate implicit in the lease when readily determinable, or the Company’s secured incremental borrowing rate. The Company has made an accounting policy election not to recognize a lease liability or right-of-use asset for leases with a lease term of twelve months or less and does not include an option to purchase the underlying asset. The Company recognizes lease expense on a straight-line basis over the lease term and variable lease expense in the period incurred. Variable lease cost consists primarily of common-area maintenance, insurance, and taxes, which are paid based on actual costs incurred by the lessor. Lease costs for the quarter and two quarters ended June 30, 2023 and July 1, 2022 were as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Operating lease costs $ 1,835 $ 1,625 $ 3,650 $ 3,447 Variable lease costs 108 84 212 173 Short-term lease costs 135 111 259 212 Maturities for the Company’s lease liabilities for all operating leases as of June 30, 2023 are as follows: Total Year Operating Leases (amounts in thousands) 2023 (remaining) $ 3,235 2024 5,129 2025 3,888 2026 2,727 2027 1,545 2028 & thereafter 3,843 Total undiscounted operating lease payments 20,367 Less: Interest ( 1,097 ) Total present value of operating lease liabilities $ 19,270 Operating lease payments exclude $ 1.3 million of legally binding lease payments for leases signed, but not yet commenced. The weighted average remaining lease terms and discount rates for all operating leases as of June 30, 2023 and July 1, 2022 were as follows: June 30, 2023 July 1, 2022 Weighted average remaining lease term (years) 5.39 5.79 Weighted average remaining discount rate 2.39 % 2.34 % Supplemental cash flow information related to the Company’s operating leases for the 2023 year-to-date period is as follows: (amounts in thousands) June 30, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow from operating leases $ 3,650 Right-of-use assets obtained in exchange for new operating lease liabilities 2,127 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt The Company has an asset-based lending revolving credit agreement (“Credit Agreement”), which has a five-year term that expires in May 2026 . Under this Credit Agreement, the Company can borrow up to $ 50.0 million depending on collateral availability. The Credit Agreement is collateralized by the Company’s accounts receivable in the United States, Belgium, and Luxembourg. The London Interbank Offered Rate (“LIBOR”), the interest rate benchmark used as a reference rate on our Credit Agreement, began being phased out at the beginning of calendar year 2022, with the one-month LIBOR scheduled to cease immediately after June 30, 2023. A reference rate based on the Secured Overnight Financing Rate (“SOFR”), and other alternative benchmark rates, are replacing LIBOR. The Company can borrow under the agreement at either rate at its discretion. Interest rates range from 1.5 % to 2.0 % over SOFR or EURIBOR loans, and 0.5 % to 1.0 % over base rate (prime rate) loans. At both June 30, 2023 and December 31, 2022, there were zero outstanding under the Credit Agreement. The Company borrows or repays its debts as needed based upon its working capital obligations, including the timing of the U.S. bi-weekly payroll. The maximum amounts outstanding under the Credit Agreement in the 2023 and 2022 second quarters were $ 3.6 million and zero , respectively, while borrowing during those quarters averaged $ 0.6 million and zero . The weighted average interest rate for the 2023 second quarter borrowings was 8.5 %. Under the Credit Agreement, the Company is required to meet one financial covenant in order to maintain borrowings under its revolving credit line, pay dividends, and make acquisitions. The covenant is measured quarterly, and at June 30, 2023 represented a fixed charge coverage ratio, where for the trailing twelve months the consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) adjusted for, amongst other items, equity-based compensation and severance expenses, must be greater than 1.0 times the consolidated interest expense paid in cash and any scheduled principal payments. The fixed charge coverage ratio is only tested if availability, subject to a maximum of the commitment of $ 50.0 million, on the measurement date is less than the greater of 12.5 % of the total loan availability or $ 5.0 million. Actual borrowings by CTG under the Credit Agreement are subject to a borrowing base, which is a formula based on certain eligible receivables and reserves for each country included in the Credit Agreement (the United States, Belgium, and Luxembourg). Receivable balances from our largest client, IBM, have been removed from the Credit Agreement as collateral, as the Company had entered into a factoring arrangement for those receivables. Total availability as of June 30, 2023 was approximately $ 40.1 million. The Company’s compliance with its financial covenant was not required to be tested at June 30, 2023 as the availability under the Credit Agreement was in excess of 12.5 % of the total loan availability. The Company was also in compliance with its applicable covenants at July 1, 2022. Eleviant has a revolving credit facility totaling $ 1.3 million. The Company did no t have any amount outstanding under this line as of June 30, 2023. The interest rate on borrowings when made is 8.75 %. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | 7. Accumulated Other Comprehensive Loss The components that make up accumulated other comprehensive loss on the condensed consolidated balance sheets at June 30, 2023 and December 31, 2022 are as follows: (amounts in thousands) June 30, 2023 December 31, 2022 Foreign currency translation adjustment $ ( 9,939 ) $ ( 10,993 ) Pension loss, net of tax of $ 715 in 2023 and $ 755 in 2022 ( 4,209 ) ( 4,313 ) Accumulated other comprehensive loss $ ( 14,148 ) $ ( 15,306 ) During the 2023 and 2022 second quarter and year-to-date periods, actuarial losses were amortized to expense as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Amortization of actuarial losses $ 107 $ 125 $ 213 $ 255 Income tax ( 24 ) ( 21 ) ( 48 ) ( 42 ) Net of tax $ 83 $ 104 $ 165 $ 213 The amortization of both prior service cost and actuarial losses, with the exception of the actuarial gains related to the post retirement benefit plan, are included in determining net periodic pension cost. See Note 9, "Deferred Compensation and Other Benefits" for additional information. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes The Company’s effective tax rate (“ETR”) is calculated quarterly based upon current assumptions relating to the full year’s estimated operating results and various tax-related items. The 2023 second quarter and year-to-date ETR was ( 64.6 )% and 53.5 %, respectively, and the 2022 second quarter and year-to-date ETR was 26.8 % and 25.3 %, respectively. The ETR was higher in the 2023 second quarter and year-to-date periods as compared with the corresponding 2022 periods primarily due to the increased losses of the Company's foreign subsidiaries for which no tax benefit can be recorded due to valuation allowances. The Company has not recorded a U.S. deferred tax liability for the excess book basis over the tax basis of its investments in foreign subsidiaries as these amounts continue to be indefinitely reinvested in foreign operations. |
Deferred Compensation and Other
Deferred Compensation and Other Benefits | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Deferred Compensation and Other Benefits | 9. Deferred Compensation and Other Benefits The Company maintains a non-qualified defined benefit Executive Supplemental Benefit Plan (“ESBP”) that provides certain former key executives with deferred compensation benefits, based on years of service and base compensation, payable during retirement. The ESBP was amended as of November 30, 1994, to freeze benefits for the participants in the plan at that time. The Company also retained certain potential obligations related to a contributory defined-benefit plan for its previous employees located in the Netherlands (“NDBP”) when the Company disposed of its subsidiary, CTG Nederland, B.V. Benefits paid are a function of a percentage of career average pay. The NDBP was curtailed for additional contributions in January 2003. The Company maintains a fully funded pension plan related to CTG Belgium and CTG Health Solutions (Belgium) employees (“BDBP”). The BDBP has active employees and the Company expects to make future contributions. The Company maintains an unfunded pension plan related to the current Soft Company employees (“FDBP”). The Company does not anticipate making contributions to the FDBP. No benefit payments were made in 2022 and no ne are expected to be paid in 2023. The Company maintains an unfunded pension plan related to the current StarDust employees (“SDBP”). The Company does not anticipate making contributions to the SDBP. No benefit payments were made in 2022 and no ne are expected to be paid in 2023. On September 29, 2022, the Company acquired Eleviant and now maintains an unfunded defined-benefit gratuity plan related to the current Eleviant employees (“IDBP”). The Company does not anticipate making contributions to the IDBP. No benefit payments were made in 2022 and none are expected to be paid in 2023. Net periodic pension cost for the quarter and two quarters ended June 30, 2023 and July 1, 2022 for the plans is as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Service cost $ 113 $ 104 $ 191 $ 213 Interest cost 252 84 487 173 Expected return on assets ( 169 ) ( 162 ) ( 336 ) ( 332 ) Amortization of actuarial loss 106 126 212 257 Net periodic pension cost $ 302 $ 152 $ 554 $ 311 The ESBP is deemed to be unfunded as the Company has not specifically identified assets to be used to discharge the deferred compensation benefit liabilities. The Company has purchased insurance on the lives of certain plan participants in amounts deemed to be sufficient to reimburse the Company for the costs associated with the plan for those participants (see Note 2 for “Life Insurance Policies”). The Company does not anticipate contributing to the plan other than for benefit payments as required in 2023 and future years. In the 2023 second quarter and year-to-date period, the Company made benefit payments totaling $ 0.1 million and $ 0.2 million, respectively, and expects to make payments in 2023 totaling approximately $ 0.5 million. The Company made benefit payments totaling approximately $ 0.2 million and $ 0.3 million in the 2022 second quarter and year-to-date period, respectively. As the NDBP was curtailed for additional contributions in January 2003, no contributions were made in 2022 and none are expected to be made in 2023. The assets for the NDBP are held by Aegon, a financial services firm located in the Netherlands. The Company maintains a contract with Aegon to insure future benefit payments of the NDBP; however, due to certain terms of the agreement and potential obligations to the Company, the NDBP has not been settled. The benefit payments to be made in 2023 are expected to be paid by Aegon from plan assets. The assets for the plan are included in a general portfolio of government bonds, a portion of which is allocated to the NDBP based upon the estimated pension liability associated with the plan. The fair market value of the plan’s assets equals the contractual value of the NDBP at any point in time. The fair value of the assets is determined using a Level 3 methodology (see Note 2 for “Fair Value”). In 2023, the plan investments have a targeted minimum return to the Company of 4.0 %, which is consistent with historical returns and the 4.0 % return guaranteed to the participants of the plan. The Company, in conjunction with Aegon, intends to maintain the current investment strategy of investing plan assets solely in government bonds throughout 2023. The BDBP is considered fully funded. The Company made contributions of $ 0.2 million and $ 0.1 million in the 2023 and 2022 second quarters, respectively, and $ 0.4 million and $ 0.3 million in the 2023 and 2022 year-to-date periods, respectively. The Company made benefit payments totaling less than $ 0.1 million in both the 2023 and 2022 second quarters, and expects to make payments in 2023 totaling $ 0.1 million. The assets for the BDBP are held by Allianz, a financial services firm located in Belgium. The Company maintains a contract with Allianz to insure future benefit payments of the BDBP. Contributions made by the Company to Allianz are based on employees’ current salaries. The benefit payments to be made in 2023 are expected to be paid by Allianz from plan assets. The assets for the plan are included in the overall portfolio of assets held by Allianz. The fair market value of the plan’s assets equals the contractual value of the BDBP in any given year (which is the mathematical reserve held by Allianz). The fair value of the assets is determined using a Level 3 methodology (see Note 2 “Fair Value”). Allianz does not guarantee a minimum return on the plan investments, whereas Belgian law sets a minimum return to be guaranteed to the participants of the plan. The Company maintains various other defined contribution retirement plans covering employees from Europe and India. Company contributions charged to operations were $ 0.1 million in both the 2023 and 2022 second quarters, and $ 0.2 million in both the year-to-date periods ended June 30, 2023 and July 1, 2022. The change in the fair value of plan assets for the plans for the two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 Fair value of plan assets at beginning of period $ 19,723 $ 19,956 Return on plan assets 336 332 Contributions 704 581 Benefits paid ( 453 ) ( 457 ) Effect of exchange rate changes 349 ( 1,615 ) Fair value of plan assets at end of quarter $ 20,659 $ 18,797 The Company maintains the Key Employee Non-Qualified Deferred Compensation Plan for certain key executives. Company contributions to this plan, if any, are based on annually defined financial performance objectives. The Company made no cash contributions in either the 2023 or 2022 second quarter or year-to-date periods for amounts earned in the previous year. Participants in the plan have the ability to purchase stock units from the Company at current market prices using their available investment balances within the plan. In exchange for the cash received, the Company releases shares out of treasury stock equivalent to the number of share units purchased by the participants. These shares of common stock are not entitled to any voting rights, but will receive dividends in the event any are paid. The shares are being held by the Company, and will be released to the participants as prescribed by their payment elections under the plan. There were no stock units purchased during the 2023 or 2022 second quarter or year-to-date periods. The Company maintains the Non-Employee Director Deferred Compensation Plan for its non-employee directors. The Company made cash contributions of less than $ 0.1 million during both the 2023 and 2022 second quarters, and less than $ 0.1 million during both the 2023 and 2022 year-to-date periods. The remaining contributions deposited in the directors’ accounts in the 2023 and 2022 second quarter and year-to-date periods consisted of equity grants from the 2020 Equity Award Plan. These shares of common stock are not entitled to any voting rights, but will receive dividends in the event any are paid. The shares are being held by the Company, and will be released to the participants as prescribed by their payment elections under the plan. |
Equity-based Compensation
Equity-based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-based Compensation | 10. Equity-based Compensation During the 2023 second quarter and year-to-date period, the Company granted restricted stock totaling 185,368 and 398,390 shares, respectively. During the 2022 second quarter and year-to-date period, the Company granted restricted stock totaling 139,315 and 290,871 shares, respectively. All grants in 2023 and 2022 were funded out of treasury stock. Director Board fees are paid in part with quarterly grants of stock units. Of the total shares granted during the 2023 second quarter and year-to-date period, 15,260 and 29,775 shares represented restricted stock units that were granted to Board members, respectively. The shares vest over the quarter in which they were granted and the Company is expensing these grants as such. Grants of similar units to the Board members totaled 12,200 and 24,535 shares of restricted stock units in the 2022 second quarter and year-to-date period, respectively. Of the shares granted in the 2023 first quarter, 198,507 shares were granted to senior management, of which 132,340 shares included a performance condition. The shares will only vest, in part, to senior management if at least 80 % of a three-year cumulative target for diluted earnings per share is met for the three-year period ended December 31, 2025 . If at least 80% of the three-year EPS target is not met, the grants will expire. Of the shares granted during 2022 first quarter, 139,221 shares were granted to senior management, of which 92,815 shares included a performance condition. The shares will only vest in part, to senior management if at least 80 % of a three-year cumulative target for diluted earnings per share is met for the three-year period ended December 31, 2024 . If at least 80% of the three-year EPS target is not met, the grants will expire. Management continually evaluates the probability of these performance conditions being met. The remaining shares granted in the 2023 and 2022 second quarter and year-to-date periods include shares that vest ratably over a period of three or four years, beginning one year from the date of grant. The restricted shares granted are considered outstanding, can be voted, and are eligible to receive dividends in the event any are paid. However, these shares do not include a non-forfeitable right for the holder to receive dividends and none will be paid in the event the awards do not vest. Accordingly, only vested shares of outstanding restricted stock are included in the basic earnings per share calculation. The shares and share units granted in 2023 and 2022 were from the 2020 Equity Award Plan. A total of 168,136 stock options were granted during the 2023 first quarter on March 17, 2023 from the 2020 Equity Award Plan. The options have a fair value of $ 3.05 per share using the Black-Scholes valuation model. The assumptions used to calculate the fair value include the price on the date of grant of $ 7.75 per option, an expected life of 4.3 years, expected volatility of 43.2 %, an expected dividend yield of zero , and a risk free rate of 3.4 %. The options vest ratably over three years, and are being expensed over that period. A total of 134,790 stock options were granted during the 2022 first quarter on March 18, 2022 from the 2020 Equity Award Plan. The options have a fair value of $ 3.14 per share using the Black-Scholes valuation model. The assumptions used to calculate the fair value include the price on the date of grant of $ 9.12 per option, an expected life of 3.4 years, expected volatility of 44.6 %, an expected dividend yield of zero , and a risk free rate of 2.1 %. The options vest ratably over three years, and are being expensed over that period. |
Treasury Stock
Treasury Stock | 6 Months Ended |
Jun. 30, 2023 | |
Class of Stock Disclosures [Abstract] | |
Treasury Stock | 11. Treasury Stock The Company’s Board of Directors has previously authorized the repurchase of up to $ 30.0 million of the Company’s stock. The Company did no t purchase shares for treasury during the 2023 or 2022 second quarter or year-to-date periods. As of June 30, 2023 and July 1, 2022 , the Company had approximately $ 7.7 million left in its current stock repurchase authorization. The Company issued 208,158 and 452,760 shares during the 2023 second quarter and year-to-date period, respectively, to fulfill the requirements from the grant of restricted shares or units and the exercise of stock options. The Company issued 177,935 and 349,491 shares during the 2022 second quarter and year-to-date period, respectively, to fulfill the requirements from the grant of restricted shares or units and the exercise of stock options |
Significant Clients
Significant Clients | 6 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Significant Clients | 12. Significant Clients In the 2023 second quarter, International Business Machines Corporation (IBM) was the Company’s largest client and accounted for $ 6.6 million or 8.8 % of consolidated revenue compared with $ 15.9 million or 19.2 % of consolidated revenue in the comparable 2022 period. In the 2023 year-to-date period, IBM accounted for $ 14.8 million or 9.7 % of consolidated revenue, compared with $ 32.4 million or 18.8 % of consolidated revenue in the comparable 2022 period. The National Technical Services Agreement with IBM expires on October 27, 2023 . The Company’s accounts receivable from IBM at June 30, 2023 and December 31, 2022 totaled $ 9.2 million and $ 14.0 million, respectively. No other client accounted for 10% or more of the Company's revenue during the 2023 or 2022 second quarter or year-to-date periods. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | 13. Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance. The Company provides information technology and related services to its clients. These services include digital IT solutions and services, and staffing services. With digital IT Solutions and Services, the Company generally takes responsibility for the deliverables and some level of project and staff management, and these services may include high-end advisory or business-related consulting. When providing staffing services, including managed staffing, staff augmentation, and volume staffing, personnel are provided to clients based upon their requirements for specific skills, who then, in turn, take their direction from clients’ managers. The Company’s strategy throughout its operations is to expand the amount of IT solutions and services it provides to its clients as compared with staffing services, and to focus on delivering digital solutions. IT solutions and services provide significant value to the Company's clients, and drive higher bill rates and margins for the Company. Existing solutions include business, technology, and operations solutions that aid the Company's clients in digitally transforming their company, and ultimately meet the needs of its clients. The digital services the Company delivers includes the Internet of Things, Intelligent Automation, Data and Analytics, and Cloud and Automated Testing. The Company's strategy is to focus on providing digital services within its IT Solutions business in both North America and in Europe. As part of this strategy, the Company also determined that there are certain lower margin staffing accounts within its business that are no longer part of the Company’s long-term business plan. The focus includes investing in business development, solutions, delivery, and marketing for IT Solutions. Additionally, the Company is critically evaluating each significant staffing engagement as it comes up for renewal to determine if the Company would continue to provide those services to its clients. These decisions are based on, among other factors, evaluating the work performed, the availability of the resources, the client, the long-term opportunities for the services provided at the client, and the revenue and profit associated with the engagement. Accordingly, the Company reports its operations in three segments within its business: North America IT Solutions and Services, Europe IT Solutions and Services, and Non-Strategic Technology Services. The segments are composed of the following: IT Solutions and Services in North America and Europe IT Solutions and Services include business, technology, and operations solutions that aid the Company's clients in digitally transforming their company, and ultimately meet the needs of its clients. The digital services the Company delivers include the Internet of Things, Intelligent Automation, Data and Analytics, Cloud and Automated Testing. Non-Strategic Technology Services The Company’s Non-Strategic Technology Services address a range of information and technology resource needs, from filling specific talent gaps to managing high-volume staffing programs. The Company recruits, retains, and manages IT talent for its clients, which are primarily large technology service providers and other companies with multiple locations and a significant need for high-volume professional IT resources. This segment consists of the lowest margin services the Company provides to its clients. This segment consists primarily of staffing services in North America, and a minor amount (less than 5 % of revenue in this segment) of such services in Europe. The Company makes decisions related to resource allocation based upon the contribution income of each of its segments. Contribution profit reflects gross profit less any expenses directly related to each respective segment. Those expenses primarily include sales, solutions, delivery, and recruiting expenses. General and administrative expenses are not allocated to the individual segments and primarily include corporate support costs such as finance and accounting, internal IT, human resources, benefits and marketing. The operating results for the Company’s segments for the quarter and two quarters ended June 30, 2023 and July 1, 2022 were as follows: Quarter Ended June 30, 2023 North America IT Europe IT Non-Strategic (amounts in thousands) Solutions & Services Solutions & Services Technology Services Total Revenue $ 25,997 $ 38,393 $ 10,198 Direct costs 15,485 29,150 8,958 Gross profit 10,512 9,243 1,240 Sales, solutions, delivery, and recruiting expenses 4,715 5,288 373 Contribution profit $ 5,797 $ 3,955 $ 867 10,619 General and administrative expenses 10,334 Operating income $ 285 Quarter Ended July 1, 2022 North America IT Europe IT Non-Strategic (amounts in thousands) Solutions & Services Solutions & Services Technology Services Total Revenue $ 20,339 $ 37,160 $ 25,260 Direct costs 13,260 27,578 22,171 Gross profit 7,079 9,582 3,089 Sales, solutions, delivery, and recruiting expenses 3,532 4,855 701 Contribution profit $ 3,547 $ 4,727 $ 2,388 10,662 General and administrative expenses 7,489 Operating income $ 3,173 Two Quarters Ended June 30, 2023 North America IT Europe IT Non-Strategic (amounts in thousands) Solutions & Services Solutions & Services Technology Services Total Revenue $ 49,193 $ 78,486 $ 25,111 Direct costs 29,697 59,919 22,044 Gross profit 19,496 18,567 3,067 Sales, solutions, delivery, and recruiting expenses 9,512 10,340 736 Contribution profit $ 9,984 $ 8,227 $ 2,331 20,542 General and administrative expenses 19,550 Operating income $ 992 Two Quarters Ended July 1, 2022 North America IT Europe IT Non-Strategic (amounts in thousands) Solutions & Services Solutions & Services Technology Services Total Revenue $ 40,773 $ 79,638 $ 51,765 Direct costs 26,832 59,577 45,422 Gross profit 13,941 20,061 6,343 Sales, solutions, delivery, and recruiting expenses 6,663 10,083 1,512 Contribution profit $ 7,278 $ 9,978 $ 4,831 22,087 General and administrative expenses 15,715 Operating income $ 6,372 Depreciation allocated to Europe IT Solutions and Services totaled $ 0.2 million and $ 0.1 million in the quarters ended June 30, 2023 and July 1, 2022 , respectively, and $ 0.3 million in both the 2023 and 2022 year-to-date periods. Depreciation allocated to North America IT Solutions and Services totaled $ 0.2 million and $ 0.1 million in the quarters ended June 30, 2023 and July 1, 2022 , respectively, and $ 0.3 million and $ 0.2 million in the 2023 and 2022 year-to-date periods, respectively. Depreciation allocated to Non-Strategic Technology Services totaled less than $ 0.1 million in both of the quarters ended June 30, 2023 and July 1, 2022 , and less than $ 0.1 million in both the 2023 and 2022 year-to-date periods. The Company has not provided any other expense or asset information for each of its segments as the Company’s CEO, who is the chief operating decision maker, does not use this information in any way to make resource decisions or to manage the segments. The Company does not prepare balance sheet or statement of cash flow information for its segments. The Company's goodwill by segment at June 30, 2023 and December 31, 2022 was as follows: (amounts in thousands) June 30, 2023 December 31, 2022 North America IT Solutions and Services $ 18,700 $ 18,753 Europe IT Solutions and Services 17,545 17,245 Total goodwill $ 36,245 $ 35,998 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation These condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to the SEC rules and regulations. There are no unconsolidated entities, or off-balance sheet arrangements other than certain guarantees supporting office leases and the performance under government contracts in the Company's European operations. All intercompany accounts have been eliminated. The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires the Company's management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes, which could be impacted by existing market conditions and factors, including among others lingering effects of the COVID-19 pandemic, current macroeconomic conditions such as inflation, and the unpredictability and severity of a civil unrest or outbreak of war or hostilities. Such estimates primarily relate to the recognition of revenue, leased assets and liabilities, the purchase accounting for acquisitions and the valuation of goodwill, the valuation allowance for deferred tax assets, actuarial assumptions including discount rates and expected return on assets, as applicable, for the Company’s defined benefit plans, the valuation of stock options and restricted stock for recording equity-based compensation expense, the allowance for credit losses, investment valuation, legal matters, other contingencies, and estimates of progress toward completion and direct profit or loss on contracts, as applicable. Management believes that the information and disclosures provided herein are adequate to present fairly the condensed consolidated financial position, results of operations, comprehensive income (loss), cash flows, and shareholders’ equity of the Company. |
Subsequent Event | Subsequent Event On August 9, 2023, subsequent to the end of the fiscal second quarter on June 30, 2023, the Company and the IT solutions provider Cegeka Groep nv (“Cegeka”), a company headquartered in Hasselt, Belgium, entered into a transaction for Cegeka to purchase all of the outstanding shares of CTG for $ 10.50 per share in cash, which represents an implied equity value for the Company of approximately $ 170 million. The closing of the transaction will be subject to customary conditions, including the expiration or termination of certain regulatory periods and the tender of shares representing at least two-thirds of CTG’s outstanding common stock in a tender offer, as required by the merger approval requirements under applicable New York law. The transaction is expected to close later in 2023. Upon the successful completion of the tender offer, Cegeka’s acquisition subsidiary will be merged into CTG, and any remaining shares of common stock of CTG will be cancelled and converted into the right to receive the same $ 10.50 per share in cash. After closing, CTG will become a privately held company and shares of CTG common stock will no longer be listed on any public market. |
Concentration Risk, Credit Risk | The Company operates in three segments within its business, North America IT Solutions and Services, Europe IT Solutions and Services, and Non-Strategic Technology Services. The Company provides information and technology-related services to its clients. CTG provides these services to all of the markets that it serves. The services provided typically encompass the IT business solution life cycle, including phases for planning, developing, implementing, managing, and ultimately maintaining the IT solution. These services ensure that the Company's clients utilize the right information technology to meet their business needs, maximize their IT systems’ value, and operate efficiently and effectively. A typical client is an organization with large, complex technology, information, and data processing requirements. The segment revenue for the quarter and two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Quarter Ended: Year-over-Year (amounts in thousands) June 30, 2023 July 1, 2022 Change North America IT Solutions and Services 34.8 % $ 25,997 24.6 % $ 20,339 27.8 % Europe IT Solutions and Services 51.5 % 38,393 44.9 % 37,160 3.3 % Non-Strategic Technology Services 13.7 % 10,198 30.5 % 25,260 ( 59.6 )% Total 100.0 % $ 74,588 100.0 % $ 82,759 ( 9.9 )% For the Two Quarters Ended: Year-over-Year (amounts in thousands) June 30, 2023 July 1, 2022 Change North America IT Solutions and Services 32.2 % $ 49,193 23.7 % $ 40,773 20.7 % Europe IT Solutions and Services 51.4 % 78,486 46.2 % 79,638 ( 1.4 )% Non-Strategic Technology Services 16.4 % 25,111 30.1 % 51,765 ( 51.5 )% Total 100.0 % $ 152,790 100.0 % $ 172,176 ( 11.3 )% The Company focuses a significant portion of its services through five vertical market focus areas: healthcare (which includes services provided to healthcare providers, health insurers (payers), and life sciences companies), financial services, technology service providers, manufacturing, and energy. The Company focuses on these five vertical areas as it believes that these areas are either higher growth markets than the general IT services market and the general economy, or are areas that provide greater potential for the Company’s growth due to the size of the vertical market. The remainder of CTG’s revenue is derived from general markets. The Company’s revenue by vertical market as a percentage of total revenue for the quarter and two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Quarter Ended For the Two Quarters Ended June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Healthcare 23.4 % 17.6 % 20.9 % 17.5 % Financial services 16.7 % 15.3 % 17.1 % 15.8 % Technology service providers 14.8 % 24.2 % 15.5 % 23.9 % Manufacturing 13.7 % 15.2 % 15.1 % 14.5 % Energy 6.5 % 6.6 % 6.4 % 5.9 % General markets 24.9 % 21.1 % 25.0 % 22.4 % Total 100.0 % 100.0 % 100.0 % 100.0 % |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when control of the promised good or service is transferred to clients, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. For time-and-material contracts, revenue is recognized as hours are incurred and costs are expended. For contracts with progress billing schedules (i.e. progress billing), primarily monthly, revenue is recognized as services are rendered to the client. Revenue for fixed-price contracts is recognized over time using an input-based approach. Revenue recognition over time best portrays the Company’s performance in transferring control of the goods or services to the client. On most fixed price contracts, revenue recognition is supported through contractual clauses that require the client to pay for work performed to date, including cost plus a reasonable profit margin, for goods or services that have no alternative use to the Company. On certain contracts, revenue recognition is supported through contractual clauses that indicate the client controls the asset, or work in process, as the Company creates or enhances the asset. On a given project, actual salary and indirect labor costs incurred are measured and compared with the total estimate of costs of such items at the completion of the project. Revenue is recognized based upon the percentage-of-completion calculation of total incurred costs to total estimated costs. The Company infrequently works on fixed-price projects that include significant amounts of material or other non-labor related costs that could distort the percent complete within a percentage-of-completion calculation. The Company’s estimate of the total labor costs it expects to incur over the term of the contract is based on the nature of the project and the Company's experience on similar projects, and includes management judgments and estimates that affect the amount of revenue recognized on fixed-price contracts in any accounting period. Losses on fixed-price projects are recorded when identified. The Company’s revenue from contracts accounted for under time-and-material, progress billing and percentage-of-completion methods as a percentage of consolidated revenue for the quarter and two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Quarter Ended For the Two Quarters Ended June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Time-and-material 74.5 % 77.7 % 76.6 % 77.6 % Progress billing 18.6 % 17.7 % 16.9 % 18.1 % Percentage-of-completion 6.9 % 4.6 % 6.5 % 4.3 % Total 100.0 % 100.0 % 100.0 % 100.0 % The Company recorded revenue in the quarter and two quarters ended June 30, 2023 and July 1, 2022 as follows: For the Quarter Ended: June 30, 2023 July 1, 2022 Year-over-Year (amounts in thousands) North America 48.2 % $ 35,970 54.4 % $ 45,042 ( 20.1 )% Europe 51.8 % 38,618 45.6 % 37,717 2.4 % Total 100.0 % $ 74,588 100.0 % $ 82,759 ( 9.9 )% For the Two Quarters Ended: June 30, 2023 July 1, 2022 Year-over-Year (amounts in thousands) North America 48.3 % $ 73,829 53.0 % $ 91,304 ( 19.1 )% Europe 51.7 % 78,961 47.0 % 80,872 ( 2.4 )% Total 100.0 % $ 152,790 100.0 % $ 172,176 ( 11.3 )% |
Significant Judgments | Significant Judgments With the exception of cost estimates on certain fixed-price projects, there are no other significant judgments used to determine the timing of the satisfaction of performance obligations or determining the transaction price and amounts allocated to performance obligations. The Company allocates the transaction price based on standalone selling prices for contracts with clients that include more than one performance obligation. We determine standalone selling price based on the expected cost of the good or service plus margin approach. Certain clients may qualify for discounts and rebates, which the Company accounts for as variable consideration. We estimate variable consideration and reduce revenue recognized based on the amount we expect to provide to clients. |
Contract Balances | Contract Balances For time-and-material and progress billing contracts, the timing of the Company’s satisfaction of its performance obligations is consistent with the timing of payment. For these contracts, the Company has the right to payment in the amount that corresponds directly with the value of the Company’s performance to date. The Company uses the right to invoice practical expedient that allows the Company to recognize revenue in the amount for which it has the right to invoice for time-and-material and progress billing contracts. Bill schedules for fixed-price contracts are generally consistent with the Company’s performance in transferring control of the goods or services to the client. There are no significant financing components in the Company's contracts with clients. Advance billings represent contract liabilities for cash payments received in advance of the Company's performance. Unbilled receivables are reported within “accounts receivable” on the consolidated balance sheets. Accounts receivable and contract liability balances fluctuate based on the timing of the client’s billing schedule and the Company’s period-end date. There are no significant costs to obtain or fulfill contracts with clients. |
Transaction Price Allocated to Remaining Performance Obligations | Transaction Price Allocated to Remaining Performance Obligations As of June 30, 2023 , the aggregate transaction price allocated to unsatisfied or partially unsatisfied performance obligations for fixed-price contracts was approximately $ 6.8 million. Approximately $ 6.6 million of the transaction price allocated to unsatisfied or partially unsatisfied performance obligations is expected to be earned in 2023 , and approximately $ 0.2 million of the transaction price allocated to unsatisfied or partially unsatisfied performance obligations is expected to be earned in 2024 and beyond . The Company uses the right to invoice practical expedient for time-and-material and progress billing contracts, therefore, no disclosure is required for unsatisfied performance obligations for contracts in which the Company recognized revenue at the amount to which it has the right to invoice for services performed. |
Taxes Collected from Clients | Taxes Collected from Clients The Company records taxes collected from its clients for remittance to governmental authorities, primarily in its international locations, on a net basis in the condensed consolidated financial statements. |
Fair Value | Fair Value Fair value is defined as the exchange price that would be received for an asset or paid for a liability in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants. The Company utilizes a fair value hierarchy for its assets and liabilities, as applicable, based upon three levels of input, which are: Level 1—quoted prices in active markets for identical assets or liabilities (observable) Level 2—inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in inactive markets, or other inputs that are observable or can be supported by observable market data for essentially the full term of the asset or liability (observable) Level 3—unobservable inputs that are supported by little or no market activity, but are significant to determining the fair value of the asset or liability (unobservable) At June 30, 2023 and December 31, 2022, the carrying amounts of the Company’s cash of $ 19.1 million and $ 25.1 million, respectively, approximated fair value. As described in Note 3 of the condensed consolidated financial statements, the Company acquired 100 % of the equity of Eleviant in the 2022 third quarter. Level 3 inputs were used to estimate the fair values of the assets acquired and liabilities assumed. The valuation techniques used to assign fair values to intangible assets included the relief-from-royalty and excess earnings methods. The Company has recorded a contingent consideration liability related to the earn-out provision of which a portion will be payable in each period subject to the achievement by Eleviant of revenue and gross profit targets for fiscal 2022, 2023 and 2024. There is no payout if the achievements are below the target threshold. However, in subsequent years, if the preceding year’s targets were not met, an earn-out can be earned for both years if the combined total for gross profit or revenue for the two years exceeds the combined two-year targets. During the 2023 second quarter, the Company paid approximately $ 0.9 million related to the earn-out based on the achievement by Eleviant of the revenue and gross profit targets for fiscal 2022. The fair value of the contingent consideration as of June 30, 2023 was $ 3.1 million. |
Life Insurance Policies | Life Insurance Policies The Company has purchased life insurance on the lives of a number of former employees who are plan participants in the non-qualified defined benefit Executive Supplemental Benefit Plan. In total, there are policies currently on 16 individuals, whose average age is 80 years old. Those policies have generated cash surrender value and the Company has taken loans against the policies. At June 30, 2023 , the insurance policies that have been borrowed against have a gross cash surrender value of $ 30.1 million, outstanding loans and interest totaling $ 26.8 million, and a net cash surrender value of $ 3.3 million. At December 31, 2022, these insurance policies had a gross cash surrender value of $ 29.5 million, outstanding loans and interest totaling $ 26.0 million, and a net cash surrender value of $ 3.5 million. The net cash surrender values are included on the condensed consolidated balance sheets in “Cash surrender value of life insurance, net” under non-current assets. At June 30, 2023 and December 31, 2022, the total death benefit for the remaining policies was approximately $ 37.8 million and $ 37.0 million, respectively. Currently, upon the death of all of the remaining plan participants, the Company would expect to receive approximately $ 10.8 million after the payment of obligations, and, under current tax regulations, record a non-taxable gain of approximately $ 7.5 million. |
Cash and Cash Equivalents, and Cash Overdrafts | Cash and Cash Equivalents, and Cash Overdrafts For purposes of the statement of cash flows, cash and cash equivalents are defined as cash on hand, demand deposits, and short-term, highly liquid investments with a maturity of three months or less. The Company does not fund its bank accounts for the checks it has written until the checks are presented to the bank for payment. In the event the Company has no available cash at the bank for which it writes its checks, the "change in cash overdraft, net" line item on the condensed consolidated statement of cash flows would be present, and represent the increase or decrease in outstanding checks for a given period. The cash in the Company’s U.S. banks is insured by the Federal Deposit Insurance Corporation up to the insurable limit of $ 250,000 . As of June 30, 2023 and December 31, 2022, the Company has multiple accounts that carry balances in excess of this insurable limit. The Company’s cash in its foreign bank accounts is not insured. |
Accounts Receivable Factoring | Accounts Receivable Factoring As part of its working capital management, the Company has a factoring agreement to sell certain trade accounts receivables associated with its largest client on a non-recourse basis to a third-party financial institution. The Company accounts for these transactions as sales of receivables and presents cash proceeds as cash provided by operating activities in the condensed consolidated statements of cash flows. There were $ 2.0 million and zero trade accounts receivable sold under the factoring agreement during the quarters ended June 30, 2023 and July 1, 2022 , respectively. Total trade accounts receivable sold under the factoring agreement were approximately $ 12.4 million and $ 4.5 million in the year-to-date periods ended June 30, 2023 and July 1, 2022, respectively. Fees for the factoring arrangement were recorded in cost of services and were less than $ 0.1 million and $ 0.1 million in the quarter and year-to-date period ended June 30, 2023 , respectively, and were zero and less than $ 0.1 million in the quarter and year-to-date period ended July 1, 2022 , respectively. |
Property, Equipment and Capitalized Software Costs | Property, Equipment and Capitalized Software Costs Property, equipment and capitalized software at June 30, 2023 and December 31, 2022 were recorded as follows: (amounts in thousands) June 30, 2023 December 31, 2022 Property, equipment and capitalized software $ 16,243 $ 15,086 Accumulated depreciation and amortization ( 10,518 ) ( 10,025 ) Property, equipment and capitalized software, net $ 5,725 $ 5,061 Depreciation expense for the Company totaled $ 0.5 million and $ 0.4 million in the quarters ended June 30, 2023 and July 1, 2022, respectively, and $ 0.9 million in both of the year-to-date periods ended June 30, 2023, and July 1, 2022. The Company capitalizes software projects developed for commercial use. The change in the Company’s capitalized software cost balance during the quarter and two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Capitalized software, beginning balance $ 1,508 $ 1,573 $ 1,484 $ 1,607 Additions 714 — 714 — Foreign currency translation 26 ( 89 ) 50 ( 123 ) Capitalized software $ 2,248 $ 1,484 $ 2,248 $ 1,484 Capitalized software amortization periods range from three to five years , and are evaluated periodically for propriety. Amortization expense and accumulated amortization for these projects for the quarter and two quarters ended June 30, 2023 and July 1, 2022 are as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Accumulated amortization, beginning balance $ 1,315 $ 1,050 $ 1,232 $ 978 Amortization expense 126 34 209 106 Accumulated amortization $ 1,441 $ 1,084 $ 1,441 $ 1,084 During the quarter and two quarters ended June 30, 2023 and July 1, 2022, the Company's change in work-in-progress costs related to software projects being developed was as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Capitalized software, work-in-progress, beginning balance $ 714 $ — $ 473 $ — Additions 396 — 637 — Placed into service ( 714 ) — ( 714 ) — Capitalized software, work-in-progress, ending balance $ 396 $ — $ 396 $ — |
Guarantees | Guarantees The Company has a number of guarantees in place in its European operations that support office leases and performance under government contracts. These guarantees totaled approximately $ 1.4 million and $ 3.0 million at June 30, 2023 and December 31, 2022, respectively, and have expiration dates ranging from July 2023 through October 2034 . |
Goodwill | Goodwill The goodwill recorded on the Company's condensed consolidated balance sheet at June 30, 2023 relates to previous acquisitions, including Eleviant in 2022. In accordance with current accounting guidance for “Intangibles - Goodwill and Other,” the Company performs goodwill impairment testing at least annually (in the Company’s fourth quarter), unless indicators of impairment exist in interim periods. There were no impairment indicators noted in the quarter and two quarters ended June 30, 2023 and July 1, 2022. The changes in the carrying amount of goodwill for the two quarters ended June 30, 2023 are as follows: (amounts in thousands) Balance at December 31, 2022 $ 35,998 Working capital adjustment - acquisitions ( 82 ) Foreign currency translation 329 Balance at June 30, 2023 $ 36,245 The Company's goodwill by segment at June 30, 2023 and December 31, 2022 was as follows: (amounts in thousands) June 30, 2023 December 31, 2022 North America IT Solutions and Services $ 18,700 $ 18,753 Europe IT Solutions and Services 17,545 17,245 Total goodwill $ 36,245 $ 35,998 |
Acquired Intangible Assets | Acquired Intangible Assets Acquired intangible assets at June 30, 2023 consist of the following: (amounts in thousands) Estimated Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Amount Trademarks 2 years $ 1,532 $ ( 1,404 ) $ ( 128 ) $ — Technology 10 years 1,141 ( 234 ) ( 13 ) 894 Customer relationships 7 - 13 years 17,196 ( 4,886 ) ( 994 ) 11,316 Total $ 19,869 $ ( 6,524 ) $ ( 1,135 ) $ 12,210 Acquired intangible assets at December 31, 2022 consist of the following: (amounts in thousands) Estimated Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Amount Trademarks 2 years $ 1,532 $ ( 1,380 ) $ ( 152 ) $ — Technology 10 years 1,141 ( 161 ) ( 23 ) 957 Customer relationships 7 - 13 years 17,196 ( 4,053 ) ( 1,157 ) 11,986 Total $ 19,869 $ ( 5,594 ) $ ( 1,332 ) $ 12,943 Estimated amortization expense for the remainder of 2023, the five succeeding years, and thereafter is as follows: Year Annual Amortization (amounts in thousands) 2023 (remaining) $ 854 2024 1,709 2025 1,709 2026 1,709 2027 1,300 2028 1,218 Thereafter 3,711 Total $ 12,210 |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The objective of this ASU is to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU are elective and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Then in December 2022, the FASB issued ASU No. 2022-06 “Deferral of the Sunset Date of Topic 848” which amends and extends the sunset date to December 31, 2024. The Company has not elected any of the practical expedients or scope exceptions to date related to this standard. We will continue to review our contracts and arrangements that will be affected by a discontinued reference rate during the transition period. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of IT Solutions and Services and Non-Strategic Technology Services as Percentage of Total Revenue | The segment revenue for the quarter and two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Quarter Ended: Year-over-Year (amounts in thousands) June 30, 2023 July 1, 2022 Change North America IT Solutions and Services 34.8 % $ 25,997 24.6 % $ 20,339 27.8 % Europe IT Solutions and Services 51.5 % 38,393 44.9 % 37,160 3.3 % Non-Strategic Technology Services 13.7 % 10,198 30.5 % 25,260 ( 59.6 )% Total 100.0 % $ 74,588 100.0 % $ 82,759 ( 9.9 )% For the Two Quarters Ended: Year-over-Year (amounts in thousands) June 30, 2023 July 1, 2022 Change North America IT Solutions and Services 32.2 % $ 49,193 23.7 % $ 40,773 20.7 % Europe IT Solutions and Services 51.4 % 78,486 46.2 % 79,638 ( 1.4 )% Non-Strategic Technology Services 16.4 % 25,111 30.1 % 51,765 ( 51.5 )% Total 100.0 % $ 152,790 100.0 % $ 172,176 ( 11.3 )% |
Revenue by Vertical Market as Percentage of Total Revenue | The Company’s revenue by vertical market as a percentage of total revenue for the quarter and two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Quarter Ended For the Two Quarters Ended June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Healthcare 23.4 % 17.6 % 20.9 % 17.5 % Financial services 16.7 % 15.3 % 17.1 % 15.8 % Technology service providers 14.8 % 24.2 % 15.5 % 23.9 % Manufacturing 13.7 % 15.2 % 15.1 % 14.5 % Energy 6.5 % 6.6 % 6.4 % 5.9 % General markets 24.9 % 21.1 % 25.0 % 22.4 % Total 100.0 % 100.0 % 100.0 % 100.0 % |
Revenue by Contract Type | The Company’s revenue from contracts accounted for under time-and-material, progress billing and percentage-of-completion methods as a percentage of consolidated revenue for the quarter and two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Quarter Ended For the Two Quarters Ended June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Time-and-material 74.5 % 77.7 % 76.6 % 77.6 % Progress billing 18.6 % 17.7 % 16.9 % 18.1 % Percentage-of-completion 6.9 % 4.6 % 6.5 % 4.3 % Total 100.0 % 100.0 % 100.0 % 100.0 % |
Schedule of Revenue by Geographic Location | The Company recorded revenue in the quarter and two quarters ended June 30, 2023 and July 1, 2022 as follows: For the Quarter Ended: June 30, 2023 July 1, 2022 Year-over-Year (amounts in thousands) North America 48.2 % $ 35,970 54.4 % $ 45,042 ( 20.1 )% Europe 51.8 % 38,618 45.6 % 37,717 2.4 % Total 100.0 % $ 74,588 100.0 % $ 82,759 ( 9.9 )% For the Two Quarters Ended: June 30, 2023 July 1, 2022 Year-over-Year (amounts in thousands) North America 48.3 % $ 73,829 53.0 % $ 91,304 ( 19.1 )% Europe 51.7 % 78,961 47.0 % 80,872 ( 2.4 )% Total 100.0 % $ 152,790 100.0 % $ 172,176 ( 11.3 )% |
Schedule of Property, Equipment and Capitalized Software | Property, equipment and capitalized software at June 30, 2023 and December 31, 2022 were recorded as follows: (amounts in thousands) June 30, 2023 December 31, 2022 Property, equipment and capitalized software $ 16,243 $ 15,086 Accumulated depreciation and amortization ( 10,518 ) ( 10,025 ) Property, equipment and capitalized software, net $ 5,725 $ 5,061 |
Schedule of Capitalized Software Costs | The Company capitalizes software projects developed for commercial use. The change in the Company’s capitalized software cost balance during the quarter and two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Capitalized software, beginning balance $ 1,508 $ 1,573 $ 1,484 $ 1,607 Additions 714 — 714 — Foreign currency translation 26 ( 89 ) 50 ( 123 ) Capitalized software $ 2,248 $ 1,484 $ 2,248 $ 1,484 Capitalized software amortization periods range from three to five years , and are evaluated periodically for propriety. |
Schedule of Change in Work-in-Progress Cost | During the quarter and two quarters ended June 30, 2023 and July 1, 2022, the Company's change in work-in-progress costs related to software projects being developed was as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Capitalized software, work-in-progress, beginning balance $ 714 $ — $ 473 $ — Additions 396 — 637 — Placed into service ( 714 ) — ( 714 ) — Capitalized software, work-in-progress, ending balance $ 396 $ — $ 396 $ — |
Schedule of Amortization Expense and Accumulated Amortization | Amortization expense and accumulated amortization for these projects for the quarter and two quarters ended June 30, 2023 and July 1, 2022 are as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Accumulated amortization, beginning balance $ 1,315 $ 1,050 $ 1,232 $ 978 Amortization expense 126 34 209 106 Accumulated amortization $ 1,441 $ 1,084 $ 1,441 $ 1,084 |
Summary of Changes in Carrying Amount of Goodwill and Goodwill by Segment | The changes in the carrying amount of goodwill for the two quarters ended June 30, 2023 are as follows: (amounts in thousands) Balance at December 31, 2022 $ 35,998 Working capital adjustment - acquisitions ( 82 ) Foreign currency translation 329 Balance at June 30, 2023 $ 36,245 The Company's goodwill by segment at June 30, 2023 and December 31, 2022 was as follows: (amounts in thousands) June 30, 2023 December 31, 2022 North America IT Solutions and Services $ 18,700 $ 18,753 Europe IT Solutions and Services 17,545 17,245 Total goodwill $ 36,245 $ 35,998 |
Summary of Acquired Intangible Assets | Acquired intangible assets at June 30, 2023 consist of the following: (amounts in thousands) Estimated Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Amount Trademarks 2 years $ 1,532 $ ( 1,404 ) $ ( 128 ) $ — Technology 10 years 1,141 ( 234 ) ( 13 ) 894 Customer relationships 7 - 13 years 17,196 ( 4,886 ) ( 994 ) 11,316 Total $ 19,869 $ ( 6,524 ) $ ( 1,135 ) $ 12,210 Acquired intangible assets at December 31, 2022 consist of the following: (amounts in thousands) Estimated Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Amount Trademarks 2 years $ 1,532 $ ( 1,380 ) $ ( 152 ) $ — Technology 10 years 1,141 ( 161 ) ( 23 ) 957 Customer relationships 7 - 13 years 17,196 ( 4,053 ) ( 1,157 ) 11,986 Total $ 19,869 $ ( 5,594 ) $ ( 1,332 ) $ 12,943 |
Summary of Estimated Amortization Expense | Estimated amortization expense for the remainder of 2023, the five succeeding years, and thereafter is as follows: Year Annual Amortization (amounts in thousands) 2023 (remaining) $ 854 2024 1,709 2025 1,709 2026 1,709 2027 1,300 2028 1,218 Thereafter 3,711 Total $ 12,210 |
Acquisitions (Tables)
Acquisitions (Tables) - Eleviant Technologies, Inc. ("Eleviant") [Member] | 6 Months Ended |
Jun. 30, 2023 | |
Business Acquisition [Line Items] | |
Summary of Acquisition Date Fair Value of Consideration | The acquisition fair value of the consideration for the acquisition of Eleviant consisted of the following as of September 29, 2022: (amounts in thousands) Cash consideration $ 17,382 Share issuance 1,178 Stock option issuance - 3 month vest 166 Stock option issuance - 12 month vest 225 Working capital adjustment ( 82 ) Fair value of contingent consideration 4,000 Fair value of purchase consideration $ 22,869 |
Summary of Allocation of Aggregate Purchase Consideration to Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary allocation of the aggregate purchase price consideration to the fair value of the assets acquired and liabilities assumed as of September 29, 2022: (amounts in thousands) Assets Acquired: Cash $ 755 Accounts receivable 1,605 Prepaids and other current assets 178 Property and equipment, net 437 Taxes receivable 48 Acquired intangibles 7,250 Goodwill 17,357 Total assets acquired $ 27,630 Liabilities Assumed: Accounts payable $ 492 Short-term debt 601 Accrued compensation 355 Other current liabilities 205 Long-term debt 982 Deferred compensation benefits 324 Deferred tax liability 1,802 Total liabilities assumed $ 4,761 Net assets acquired $ 22,869 |
Summary of Intangible Assets Acquired | The intangible assets acquired in this acquisition consisted of the following: (amounts in thousands) Fair Value Estimated Useful Life Technology $ 550 10 years Customer relationships 6,700 10 years Fair value of purchase consideration $ 7,250 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earning Per Share (EPS) | Basic and diluted earnings per share (EPS) for the quarter and two quarters ended June 30, 2023 and July 1, 2022 were as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands, except per-share data) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Weighted-average number of shares outstanding 14,832 14,419 14,768 14,309 Common stock equivalents from incremental shares — 703 631 741 Number of shares on which diluted earnings 14,832 15,122 15,399 15,050 Net income (loss) $ ( 130 ) $ 2,040 $ 185 $ 4,280 Net income (loss) per share Basic $ ( 0.01 ) $ 0.14 $ 0.01 $ 0.30 Diluted $ ( 0.01 ) $ 0.13 $ 0.01 $ 0.28 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Summary of Lease Costs, Weighted Average Remaining Lease Term, Discount Rate and Supplemental Cash Flow Information for All Operating Leases | Lease costs for the quarter and two quarters ended June 30, 2023 and July 1, 2022 were as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Operating lease costs $ 1,835 $ 1,625 $ 3,650 $ 3,447 Variable lease costs 108 84 212 173 Short-term lease costs 135 111 259 212 The weighted average remaining lease terms and discount rates for all operating leases as of June 30, 2023 and July 1, 2022 were as follows: June 30, 2023 July 1, 2022 Weighted average remaining lease term (years) 5.39 5.79 Weighted average remaining discount rate 2.39 % 2.34 % Supplemental cash flow information related to the Company’s operating leases for the 2023 year-to-date period is as follows: (amounts in thousands) June 30, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow from operating leases $ 3,650 Right-of-use assets obtained in exchange for new operating lease liabilities 2,127 |
Summary of Maturities of Lease Liabilities for Operating Liabilities | Maturities for the Company’s lease liabilities for all operating leases as of June 30, 2023 are as follows: Total Year Operating Leases (amounts in thousands) 2023 (remaining) $ 3,235 2024 5,129 2025 3,888 2026 2,727 2027 1,545 2028 & thereafter 3,843 Total undiscounted operating lease payments 20,367 Less: Interest ( 1,097 ) Total present value of operating lease liabilities $ 19,270 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The components that make up accumulated other comprehensive loss on the condensed consolidated balance sheets at June 30, 2023 and December 31, 2022 are as follows: (amounts in thousands) June 30, 2023 December 31, 2022 Foreign currency translation adjustment $ ( 9,939 ) $ ( 10,993 ) Pension loss, net of tax of $ 715 in 2023 and $ 755 in 2022 ( 4,209 ) ( 4,313 ) Accumulated other comprehensive loss $ ( 14,148 ) $ ( 15,306 ) |
Schedule of Actuarial Losses Amortized to Expense | During the 2023 and 2022 second quarter and year-to-date periods, actuarial losses were amortized to expense as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Amortization of actuarial losses $ 107 $ 125 $ 213 $ 255 Income tax ( 24 ) ( 21 ) ( 48 ) ( 42 ) Net of tax $ 83 $ 104 $ 165 $ 213 |
Deferred Compensation and Oth_2
Deferred Compensation and Other Benefits (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Pension Cost | Net periodic pension cost for the quarter and two quarters ended June 30, 2023 and July 1, 2022 for the plans is as follows: For the Quarter Ended For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Service cost $ 113 $ 104 $ 191 $ 213 Interest cost 252 84 487 173 Expected return on assets ( 169 ) ( 162 ) ( 336 ) ( 332 ) Amortization of actuarial loss 106 126 212 257 Net periodic pension cost $ 302 $ 152 $ 554 $ 311 |
Schedule of Change in Fair Value of Plan Assets | The change in the fair value of plan assets for the plans for the two quarters ended June 30, 2023 and July 1, 2022 was as follows: For the Two Quarters Ended (amounts in thousands) June 30, 2023 July 1, 2022 Fair value of plan assets at beginning of period $ 19,723 $ 19,956 Return on plan assets 336 332 Contributions 704 581 Benefits paid ( 453 ) ( 457 ) Effect of exchange rate changes 349 ( 1,615 ) Fair value of plan assets at end of quarter $ 20,659 $ 18,797 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segments | The operating results for the Company’s segments for the quarter and two quarters ended June 30, 2023 and July 1, 2022 were as follows: Quarter Ended June 30, 2023 North America IT Europe IT Non-Strategic (amounts in thousands) Solutions & Services Solutions & Services Technology Services Total Revenue $ 25,997 $ 38,393 $ 10,198 Direct costs 15,485 29,150 8,958 Gross profit 10,512 9,243 1,240 Sales, solutions, delivery, and recruiting expenses 4,715 5,288 373 Contribution profit $ 5,797 $ 3,955 $ 867 10,619 General and administrative expenses 10,334 Operating income $ 285 Quarter Ended July 1, 2022 North America IT Europe IT Non-Strategic (amounts in thousands) Solutions & Services Solutions & Services Technology Services Total Revenue $ 20,339 $ 37,160 $ 25,260 Direct costs 13,260 27,578 22,171 Gross profit 7,079 9,582 3,089 Sales, solutions, delivery, and recruiting expenses 3,532 4,855 701 Contribution profit $ 3,547 $ 4,727 $ 2,388 10,662 General and administrative expenses 7,489 Operating income $ 3,173 Two Quarters Ended June 30, 2023 North America IT Europe IT Non-Strategic (amounts in thousands) Solutions & Services Solutions & Services Technology Services Total Revenue $ 49,193 $ 78,486 $ 25,111 Direct costs 29,697 59,919 22,044 Gross profit 19,496 18,567 3,067 Sales, solutions, delivery, and recruiting expenses 9,512 10,340 736 Contribution profit $ 9,984 $ 8,227 $ 2,331 20,542 General and administrative expenses 19,550 Operating income $ 992 Two Quarters Ended July 1, 2022 North America IT Europe IT Non-Strategic (amounts in thousands) Solutions & Services Solutions & Services Technology Services Total Revenue $ 40,773 $ 79,638 $ 51,765 Direct costs 26,832 59,577 45,422 Gross profit 13,941 20,061 6,343 Sales, solutions, delivery, and recruiting expenses 6,663 10,083 1,512 Contribution profit $ 7,278 $ 9,978 $ 4,831 22,087 General and administrative expenses 15,715 Operating income $ 6,372 |
Schedule of Goodwill by Segment | The Company's goodwill by segment at June 30, 2023 and December 31, 2022 was as follows: (amounts in thousands) June 30, 2023 December 31, 2022 North America IT Solutions and Services $ 18,700 $ 18,753 Europe IT Solutions and Services 17,545 17,245 Total goodwill $ 36,245 $ 35,998 |
Financial Statements - Addition
Financial Statements - Additional Information (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Billable days | 64 days | 64 days | 128 days | 129 days |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Subsequent Event (Details) $ / shares in Units, $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 Segment Market $ / shares | Aug. 09, 2023 USD ($) $ / shares | Dec. 31, 2022 $ / shares | |
Subsequent Event [Line Items] | |||
Common stock, per share in cash | $ 0.01 | $ 0.01 | |
Number of operating segments | Segment | 3 | ||
Number of vertical market focus areas | Market | 5 | ||
Subsequent Event [Member] | Cegeka Groep Nv [Member] | |||
Subsequent Event [Line Items] | |||
Common stock, per share in cash | $ 10.50 | ||
Implied equity value | $ | $ 170 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Segment Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Product Information [Line Items] | ||||
Revenue | $ 74,588 | $ 82,759 | $ 152,790 | $ 172,176 |
Product Concentration Risk [Member] | Sales Revenue, Services, Net [Member] | ||||
Product Information [Line Items] | ||||
Revenue, percent | 100% | 100% | 100% | 100% |
Revenue | $ 74,588 | $ 82,759 | $ 152,790 | $ 172,176 |
Year-over-Year Change | (9.90%) | (11.30%) | ||
Product Concentration Risk [Member] | Sales Revenue, Services, Net [Member] | North America IT Solutions and Services [Member] | ||||
Product Information [Line Items] | ||||
Revenue, percent | 34.80% | 24.60% | 32.20% | 23.70% |
Revenue | $ 25,997 | $ 20,339 | $ 49,193 | $ 40,773 |
Year-over-Year Change | 27.80% | 20.70% | ||
Product Concentration Risk [Member] | Sales Revenue, Services, Net [Member] | Europe IT Solutions and Services [Member] | ||||
Product Information [Line Items] | ||||
Revenue, percent | 51.50% | 44.90% | 51.40% | 46.20% |
Revenue | $ 38,393 | $ 37,160 | $ 78,486 | $ 79,638 |
Year-over-Year Change | 3.30% | (1.40%) | ||
Product Concentration Risk [Member] | Sales Revenue, Services, Net [Member] | Non-Strategic Technology Services [Member] | ||||
Product Information [Line Items] | ||||
Revenue, percent | 13.70% | 30.50% | 16.40% | 30.10% |
Revenue | $ 10,198 | $ 25,260 | $ 25,111 | $ 51,765 |
Year-over-Year Change | (59.60%) | (51.50%) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Revenue by Vertical Market as Percentage of Total Revenue (Details) - Customer Concentration Risk [Member] - Sales Revenue, Services, Net [Member] | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Concentration Risk [Line Items] | ||||
Total revenue | 100% | 100% | 100% | 100% |
Financial Services [Member] | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 16.70% | 15.30% | 17.10% | 15.80% |
Manufacturing [Member] | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 13.70% | 15.20% | 15.10% | 14.50% |
Technology Service Providers [Member] | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 14.80% | 24.20% | 15.50% | 23.90% |
Energy [Member] | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 6.50% | 6.60% | 6.40% | 5.90% |
General Markets [Member] | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 24.90% | 21.10% | 25% | 22.40% |
Healthcare [Member] | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 23.40% | 17.60% | 20.90% | 17.50% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Revenue by Contract Type (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Schedule Of Revenue By Contract Type [Line Items] | ||||
Revenue percent | 100% | 100% | 100% | 100% |
Time-and-material [Member] | ||||
Schedule Of Revenue By Contract Type [Line Items] | ||||
Revenue percent | 74.50% | 77.70% | 76.60% | 77.60% |
Progress Billing [Member] | ||||
Schedule Of Revenue By Contract Type [Line Items] | ||||
Revenue percent | 18.60% | 17.70% | 16.90% | 18.10% |
Percentage-of-completion [Member] | ||||
Schedule Of Revenue By Contract Type [Line Items] | ||||
Revenue percent | 6.90% | 4.60% | 6.50% | 4.30% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Revenue by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Revenues [Line Items] | ||||
Revenue | $ 74,588 | $ 82,759 | $ 152,790 | $ 172,176 |
Sales Revenue, Services, Net [Member] | Geographic Concentration Risk | ||||
Revenues [Line Items] | ||||
Revenue, percent | 100% | 100% | 100% | 100% |
Revenue | $ 74,588 | $ 82,759 | $ 152,790 | $ 172,176 |
Year-over-Year Change | (9.90%) | (11.30%) | ||
North America [Member] | Sales Revenue, Services, Net [Member] | Geographic Concentration Risk | ||||
Revenues [Line Items] | ||||
Revenue, percent | 48.20% | 54.40% | 48.30% | 53% |
Revenue | $ 35,970 | $ 45,042 | $ 73,829 | $ 91,304 |
Year-over-Year Change | (20.10%) | (19.10%) | ||
Europe [Member] | Sales Revenue, Services, Net [Member] | Geographic Concentration Risk | ||||
Revenues [Line Items] | ||||
Revenue, percent | 51.80% | 45.60% | 51.70% | 47% |
Revenue | $ 38,618 | $ 37,717 | $ 78,961 | $ 80,872 |
Year-over-Year Change | 2.40% | (2.40%) |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Transaction Price Allocated to Remaining Performance Obligations (Details 1) $ in Millions | Jun. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-07-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 6.6 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 0.2 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Transaction Price Allocated to Remaining Performance Obligations (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Fixed-price [Member] | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 6.8 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Fair Value (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Sep. 29, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 19,137 | $ 25,140 | ||
Fair value of contingent consideration | $ 3,100 | |||
Eleviant Technologies, Inc. ("Eleviant") [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, percentage acquired | 100% | 100% | ||
Number of period combined target | 2 years | |||
Earn-out contingency liability, basis for amount | The Company has recorded a contingent consideration liability related to the earn-out provision of which a portion will be payable in each period subject to the achievement by Eleviant of revenue and gross profit targets for fiscal 2022, 2023 and 2024. There is no payout if the achievements are below the target threshold. However, in subsequent years, if the preceding year’s targets were not met, an earn-out can be earned for both years if the combined total for gross profit or revenue for the two years exceeds the combined two-year targets. During the 2023 second quarter, the Company paid approximately $0.9 million related to the earn-out based on the achievement by Eleviant of the revenue and gross profit targets for fiscal 2022. The fair value of the contingent consideration as of June 30, 2023 was $3.1 million. | |||
Fair value of contingent consideration | $ 4,000 | |||
Earn-out contingency liability | $ 900 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Life Insurance Policies (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 USD ($) Individual | Dec. 31, 2022 USD ($) | |
Supplementary Information For Corporate Owned Life Insurance [Line Items] | ||
Number of former employees covered under insurance policies | Individual | 16 | |
Average age of former employees covered under insurance policies | 80 years | |
Gross cash surrender values of life insurance | $ 30,100 | $ 29,500 |
Loans on cash surrender value | 26,800 | 26,000 |
Net cash surrender values of life insurance | 4,202 | 4,120 |
Gross death benefit of life insurance contracts | 37,800 | 37,000 |
Life insurance proceeds to be received upon the death of participants | 10,800 | |
Casualty Events [Member] | ||
Supplementary Information For Corporate Owned Life Insurance [Line Items] | ||
Expected non-taxable life insurance gain upon death of participants | 7,500 | |
Non-Qualified Defined Benefit Executive Supplemental Benefit Plan [Member] | ||
Supplementary Information For Corporate Owned Life Insurance [Line Items] | ||
Net cash surrender values of life insurance | $ 3,300 | $ 3,500 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Cash and Cash Equivalents, and Cash Overdrafts (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Maximum [Member] | ||
Cash, FDIC insurable limit | $ 250,000 | $ 250,000 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Accounts Receivable Factoring (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Accounts Notes And Loans Receivable [Line Items] | ||||
Cost of services | $ 53,593,000 | $ 63,009,000 | $ 111,660,000 | $ 131,831,000 |
Trade Accounts Receivable [Member] | ||||
Accounts Notes And Loans Receivable [Line Items] | ||||
Cost of services | 0 | 100,000 | ||
Trade Accounts Receivable [Member] | Maximum [Member] | ||||
Accounts Notes And Loans Receivable [Line Items] | ||||
Cost of services | 100,000 | 100,000 | ||
Trade Accounts Receivable [Member] | Factoring Agreement [Member] | ||||
Accounts Notes And Loans Receivable [Line Items] | ||||
Accounts Receivable, Sold | $ 2,000,000 | $ 0 | $ 12,400,000 | $ 4,500,000 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Schedule of Property, Equipment and Capitalized Software (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, equipment and capitalized software | $ 16,243 | $ 15,086 |
Accumulated depreciation and amortization | (10,518) | (10,025) |
Property, equipment and capitalized software, net | $ 5,725 | $ 5,061 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Schedule of Capitalized Software Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Capitalized Software Cost [Abstract] | ||||
Capitalized software, beginning balance | $ 1,508 | $ 1,573 | $ 1,484 | $ 1,607 |
Additions | 714 | 714 | ||
Foreign currency translation | 26 | (89) | 50 | (123) |
Capitalized software, ending balance | $ 2,248 | $ 1,484 | $ 2,248 | $ 1,484 |
Summary of Significant Accou_17
Summary of Significant Accounting Policies - Property, Equipment and Capitalized Software Costs - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Property Plant And Equipment [Line Items] | ||||
Depreciation | $ 0.5 | $ 0.4 | $ 0.9 | $ 0.9 |
Minimum [Member] | ||||
Property Plant And Equipment [Line Items] | ||||
Property, equipment and capitalized software, useful life | 3 years | |||
Maximum [Member] | ||||
Property Plant And Equipment [Line Items] | ||||
Property, equipment and capitalized software, useful life | 5 years |
Summary of Significant Accou_18
Summary of Significant Accounting Policies - Schedule of Amortization Expense and Accumulated Amortization (Details) - Software Development - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Property Plant And Equipment [Line Items] | ||||
Accumulated amortization, beginning balance | $ 1,315 | $ 1,050 | $ 1,232 | $ 978 |
Amortization expense | 126 | 34 | 209 | 106 |
Accumulated amortization, ending balance | $ 1,441 | $ 1,084 | $ 1,441 | $ 1,084 |
Summary of Significant Accou_19
Summary of Significant Accounting Policies - Schedule Of Change in Work-in-Progress Software Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | |
Capitalized Computer Software, Net [Abstract] | ||
Capitalized software, work-in-progress, beginning balance | $ 714 | $ 473 |
Additions | 396 | 637 |
Placed into service | (714) | (714) |
Capitalized software, work-in-progress, ending balance | $ 396 | $ 396 |
Summary of Significant Accou_20
Summary of Significant Accounting Policies - Guarantees (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Current carrying value of guarantees | $ 1.4 | $ 3 |
Guarantor obligations, term | July 2023 through October 2034 | July 2023 through October 2034 |
Summary of Significant Accou_21
Summary of Significant Accounting Policies - Goodwill (Details) - Indicator | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill impairment indicators | 0 | 0 | 0 | 0 |
Summary of Significant Accou_22
Summary of Significant Accounting Policies - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance at December 31, 2022 | $ 35,998 |
Working capital adjustment - acquisitions | (82) |
Foreign currency translation | 329 |
Balance at June 30, 2023 | $ 36,245 |
Summary of Significant Accou_23
Summary of Significant Accounting Policies - Summary of Goodwill by Segment (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill [Line Items] | ||
Goodwill | $ 36,245 | $ 35,998 |
North America IT Solutions and Services Segment [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 18,700 | 18,753 |
Europe IT Solutions and Services Segment [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 17,545 | $ 17,245 |
Summary of Significant Accou_24
Summary of Significant Accounting Policies - Summary of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Acquired Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 19,869 | $ 19,869 |
Accumulated Amortization | (6,524) | (5,594) |
Foreign Currency Translation | (1,135) | (1,332) |
Net Carrying Amount | $ 12,210 | $ 12,943 |
Trademarks [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Estimated Economic Life | 2 years | 2 years |
Gross Carrying Amount | $ 1,532 | $ 1,532 |
Accumulated Amortization | (1,404) | (1,380) |
Foreign Currency Translation | $ (128) | $ (152) |
Technology [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Estimated Economic Life | 10 years | 10 years |
Gross Carrying Amount | $ 1,141 | $ 1,141 |
Accumulated Amortization | (234) | (161) |
Foreign Currency Translation | (13) | (23) |
Net Carrying Amount | 894 | 957 |
Customer Relationships [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 17,196 | 17,196 |
Accumulated Amortization | (4,886) | (4,053) |
Foreign Currency Translation | (994) | (1,157) |
Net Carrying Amount | $ 11,316 | $ 11,986 |
Customer Relationships [Member] | Minimum [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Estimated Economic Life | 7 years | 7 years |
Customer Relationships [Member] | Maximum [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Estimated Economic Life | 13 years | 13 years |
Summary of Significant Accou_25
Summary of Significant Accounting Policies - Summary of Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 (remaining) | $ 854 | |
2024 | 1,709 | |
2025 | 1,709 | |
2026 | 1,709 | |
2027 | 1,300 | |
2028 | 1,218 | |
Thereafter | 3,711 | |
Total | $ 12,210 | $ 12,943 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 29, 2022 | Jul. 01, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | |||||
Business combination cash on hand | $ (82,000) | ||||
Eleviant Technologies, Inc. ("Eleviant") [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, percentage acquired | 100% | 100% | |||
Payments to acquire business | $ 17,382,000 | ||||
Business combination, acquired equity amount including cash on hand | $ 19,000,000 | ||||
Number of common shares issued | 173,802 | ||||
Business combination common stock value | $ 1,200,000 | ||||
Business combination of gross profit or revenue achieved targets | 10,000 | ||||
Business combination of additional target earned | $ 2,000 | ||||
Number of period combined target | 2 years | ||||
Earn-out contingency liability | $ 5,000,000 | ||||
Earn-out contingency liability, basis for amount | The Company has recorded a contingent consideration liability related to the earn-out provision of which a portion will be payable in each period subject to the achievement by Eleviant of revenue and gross profit targets for fiscal 2022, 2023 and 2024. There is no payout if the achievements are below the target threshold. However, in subsequent years, if the preceding year’s targets were not met, an earn-out can be earned for both years if the combined total for gross profit or revenue for the two years exceeds the combined two-year targets. During the 2023 second quarter, the Company paid approximately $0.9 million related to the earn-out based on the achievement by Eleviant of the revenue and gross profit targets for fiscal 2022. The fair value of the contingent consideration as of June 30, 2023 was $3.1 million. | ||||
Fair value of the remaining contingent consideration liability | $ 3,100,000 | ||||
Fair value of the remaining contingent consideration liability | 4,000,000 | ||||
Earn-out contingency liability | 900,000 | ||||
Working capital adjustment | 82,000 | $ 100,000 | |||
Acquired intangibles | $ 7,250,000 | ||||
Eleviant Technologies, Inc. ("Eleviant") [Member] | Other Current Liabilities | |||||
Business Acquisition [Line Items] | |||||
Fair value of the remaining contingent consideration liability | 1,600,000 | ||||
Eleviant Technologies, Inc. ("Eleviant") [Member] | Other Long-term Liabilities | |||||
Business Acquisition [Line Items] | |||||
Fair value of the remaining contingent consideration liability | 1,500,000 | ||||
Eleviant Technologies, Inc. ("Eleviant") [Member] | Selling, General and Administrative Expenses [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition related expenses related to retention bonuses and amortization of intangible assets | $ 300,000 | $ 700,000 | |||
Eleviant Technologies, Inc. ("Eleviant") [Member] | 2020 Equity Award plan [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of common shares issued | 200,000 | ||||
Business combination common stock value | $ 400,000 |
Acquisitions - Summary of Acqui
Acquisitions - Summary of Acquisition Date Fair Value of Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Sep. 29, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | |
Business Acquisition [Line Items] | |||
Fair value of contingent consideration | $ 3,100 | ||
Eleviant Technologies, Inc. ("Eleviant") [Member] | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 17,382 | ||
Share issuance | 1,178 | ||
Working capital adjustment | (82) | $ (100) | |
Fair value of contingent consideration | 4,000 | ||
Fair value of purchase consideration | 22,869 | ||
Eleviant Technologies, Inc. ("Eleviant") [Member] | 3-month vest | |||
Business Acquisition [Line Items] | |||
Stock option issuance | 166 | ||
Eleviant Technologies, Inc. ("Eleviant") [Member] | 12-month vest | |||
Business Acquisition [Line Items] | |||
Stock option issuance | $ 225 |
Acquisitions - Summary of Aggre
Acquisitions - Summary of Aggregate Purchase Consideration to Fair Values of Assets Acquired & Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 29, 2022 |
Assets Acquired: | |||
Goodwill | $ 36,245 | $ 35,998 | |
Eleviant Technologies, Inc. ("Eleviant") [Member] | |||
Assets Acquired: | |||
Cash | $ 755 | ||
Accounts receivable | 1,605 | ||
Prepaids and other current assets | 178 | ||
Property and equipment, net | 437 | ||
Taxes receivable | 48 | ||
Acquired intangibles | 7,250 | ||
Goodwill | 17,357 | ||
Total assets acquired | 27,630 | ||
Liabilities Assumed: | |||
Accounts payable | 492 | ||
Short-term debt | 601 | ||
Accrued compensation | 355 | ||
Other current liabilities | 205 | ||
Long-term debt | 982 | ||
Deferred compensation benefits | 324 | ||
Deferred tax liability | 1,802 | ||
Total liabilities assumed | 4,761 | ||
Net assets acquired | $ 22,869 |
Acquisitions - Summary of Intan
Acquisitions - Summary of Intangible Assets Acquired (Details) - Eleviant Technologies, Inc. ("Eleviant") [Member] $ in Thousands | Sep. 29, 2022 USD ($) |
Business Acquisition [Line Items] | |
Fair value of purchase consideration | $ 7,250 |
Technology [Member] | |
Business Acquisition [Line Items] | |
Fair value of purchase consideration | $ 550 |
Estimated Economic Life | 10 years |
Customer Relationships [Member] | |
Business Acquisition [Line Items] | |
Fair value of purchase consideration | $ 6,700 |
Estimated Economic Life | 10 years |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Earnings Per Share [Abstract] | ||||
Weighted-average number of shares outstanding during period | 14,832 | 14,419 | 14,768 | 14,309 |
Common stock equivalents from incremental shares under equity-based compensation plans | 703 | 631 | 741 | |
Number of shares on which diluted earnings per share is based | 14,832 | 15,122 | 15,399 | 15,050 |
Net income (loss) | $ (130) | $ 2,040 | $ 185 | $ 4,280 |
Net income (loss) per share, basic | $ (0.01) | $ 0.14 | $ 0.01 | $ 0.30 |
Net income (loss) per share, diluted | $ (0.01) | $ 0.13 | $ 0.01 | $ 0.28 |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Additional Information (Details) - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jul. 01, 2022 | |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in the computation of earnings per share | 1 | 0.6 |
Lease Commitments - Additional
Lease Commitments - Additional Information (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Leases [Abstract] | |
Maximum potential payment increase | 5% |
Legally binding lease payments | $ 1.3 |
Lease Commitments - Summary of
Lease Commitments - Summary of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Leases [Abstract] | ||||
Operating lease costs | $ 1,835 | $ 1,625 | $ 3,650 | $ 3,447 |
Variable lease costs | 108 | 84 | 212 | 173 |
Short-term lease costs | $ 135 | $ 111 | $ 259 | $ 212 |
Lease Commitments - Summary o_2
Lease Commitments - Summary of Maturities of Lease Liabilities for Operating Liabilities (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | |
2023 (remaining) | $ 3,235 |
2024 | 5,129 |
2025 | 3,888 |
2026 | 2,727 |
2027 | 1,545 |
2028 & thereafter | 3,843 |
Total undiscounted operating lease payments | 20,367 |
Less: Interest | (1,097) |
Total present value of operating lease liabilities | $ 19,270 |
Lease Commitments - Summary o_3
Lease Commitments - Summary of Weighted Average Remaining Lease Term, Discount Rate and Supplemental Cash Flow Information for All Operating Leases (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jul. 01, 2022 | |
Lease, Cost [Abstract] | ||
Weighted average remaining lease term (years) | 5 years 4 months 20 days | 5 years 9 months 14 days |
Weighted average remaining discount rate | 2.39% | 2.34% |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash outflow from operating leases | $ 3,650 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 2,127 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | ||||
Long-term debt | $ 0 | $ 0 | $ 0 | |
Maximum amount outstanding | 3,600,000 | $ 0 | ||
Average amount outstanding | $ 600,000 | $ 0 | ||
Weighted-average interest rate | 8.50% | 8.50% | ||
Debt covenants, Maximum leverage ratio | 1% | |||
Debt covenants threshold limit to test fixed charge coverage ratio | $ 5,000,000 | $ 5,000,000 | ||
Total available borrowings | 40,100,000 | $ 40,100,000 | ||
Excess percentage available for total available borrowings | 12.50% | |||
Minimum [Member] | SOFR [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.50% | |||
Minimum [Member] | Adjusted London Interbank Offered Rate L I B O R | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Maximum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Commitment fees | $ 50,000,000 | |||
Fixed Charge Coverage Ratio | 0.125 | |||
Maximum [Member] | SOFR [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2% | |||
Maximum [Member] | Adjusted London Interbank Offered Rate L I B O R | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1% | |||
Credit and Security Agreement [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Revolving credit facility, term | 5 years | |||
Line of Credit Facility, Maximum Borrowing Capacity | 50,000,000 | $ 50,000,000 | ||
Line of credit facility, expiration date | 2026-05 | |||
Line of credit, outstanding amount | 0 | $ 0 | ||
Line of credit, interest rate outstanding | 8.75% | |||
Total available borrowings | $ 1,300,000 | $ 1,300,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Foreign currency translation adjustment | $ (9,939) | $ (10,993) |
Pension loss, net of tax of $739 in 2023 and $755 in 2022 | (4,209) | (4,313) |
Accumulated other comprehensive loss | $ (14,148) | $ (15,306) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Parenthetical) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Tax on pension loss | $ 715 | $ 755 |
Accumulated Other Comprehensi_5
Accumulated Other Comprehensive Loss - Schedule of Actuarial Losses Amortized to Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Postemployment Benefits [Abstract] | ||||
Amortization of actuarial losses | $ 107 | $ 125 | $ 213 | $ 255 |
Income tax | (24) | (21) | (48) | (42) |
Net of tax | $ 83 | $ 104 | $ 165 | $ 213 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2023 | Jul. 01, 2022 | Jul. 01, 2023 | Jul. 01, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | (64.60%) | 26.80% | 53.50% | 25.30% |
Deferred Compensation and Oth_3
Deferred Compensation and Other Benefits - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | Dec. 31, 2022 | |
Deferred Compensation Text Details [Line Items] | |||||
Defined contribution plan, cost | $ 100,000 | $ 100,000 | $ 200,000 | $ 200,000 | |
Employer contributions | 704,000 | 581,000 | |||
FDBP [Member] | |||||
Deferred Compensation Text Details [Line Items] | |||||
Benefit payments | $ 0 | ||||
Estimated future employer contributions, next year | 0 | 0 | |||
SDBP [Member] | |||||
Deferred Compensation Text Details [Line Items] | |||||
Benefit payments | 0 | ||||
Estimated future employer contributions, next year | 0 | 0 | |||
IDBP [Member] | |||||
Deferred Compensation Text Details [Line Items] | |||||
Benefit payments | $ 0 | ||||
Estimated future employer contributions, next year | 0 | 0 | |||
ESBP [Member] | |||||
Deferred Compensation Text Details [Line Items] | |||||
Benefit payments | 100,000 | 200,000 | 200,000 | 300,000 | |
Estimated future employer contributions, next year | 500,000 | $ 500,000 | |||
NDBP [Member] | |||||
Deferred Compensation Text Details [Line Items] | |||||
Targeted minimum return | 4% | ||||
Guaranteed return | 4% | ||||
BDBP [Member] | |||||
Deferred Compensation Text Details [Line Items] | |||||
Estimated future employer contributions, next year | 100,000 | $ 100,000 | |||
Benefit plan, employer contributions | 200,000 | 100,000 | 400,000 | 300,000 | |
BDBP [Member] | Maximum [Member] | |||||
Deferred Compensation Text Details [Line Items] | |||||
Benefit payments | $ 100,000 | $ 100,000 | |||
Key Employee Non Qualified Deferred Compensation Plan [Member] | |||||
Deferred Compensation Text Details [Line Items] | |||||
Employer contributions | $ 0 | $ 0 | |||
Number of stock units purchased | 0 | 0 | 0 | 0 | |
Non Employee Director Deferred Compensation Plan [Member] | Maximum [Member] | |||||
Deferred Compensation Text Details [Line Items] | |||||
Defined contribution plan, cost | $ 100,000 | $ 100,000 | $ 100,000 | $ 100,000 |
Deferred Compensation and Oth_4
Deferred Compensation and Other Benefits - Schedule of Net Periodic Pension Cost (Details) - Deferred Compensation and Other Benefits [Member] - Executive Officer [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 113 | $ 104 | $ 191 | $ 213 |
Interest cost | $ 252 | $ 84 | $ 487 | $ 173 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Expense | Other Nonoperating Expense | Other Nonoperating Expense | Other Nonoperating Expense |
Expected return on assets | $ (169) | $ (162) | $ (336) | $ (332) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Other Income | Interest and Other Income | Interest and Other Income | Interest and Other Income |
Amortization of actuarial loss | $ 106 | $ 126 | $ 212 | $ 257 |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Expense | Other Nonoperating Expense | Other Nonoperating Expense | Other Nonoperating Expense |
Net periodic pension cost | $ 302 | $ 152 | $ 554 | $ 311 |
Deferred Compensation and Oth_5
Deferred Compensation and Other Benefits - Schedule of Change in Fair Value of Plan Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jul. 01, 2022 | |
Reconciliation of Fair Value of Plan Assets | ||
Fair value of plan assets at beginning of period | $ 19,723 | $ 19,956 |
Return on plan assets | 336 | 332 |
Employer contributions | 704 | 581 |
Benefits paid | (453) | (457) |
Effect of exchange rate changes | 349 | (1,615) |
Fair value of plan assets at end of quarter | $ 20,659 | $ 18,797 |
Equity-based Compensation - Add
Equity-based Compensation - Additional Information (Details) - $ / shares | 3 Months Ended | 6 Months Ended | |||||||
Mar. 17, 2023 | Mar. 18, 2022 | Jul. 01, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Jul. 01, 2022 | Apr. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Restricted stock and stock units, granted | 185,368 | 139,315 | 398,390 | 290,871 | |||||
Employee Stock Option [Member] | 2020 Equity Award plan [Member] | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock options granted | 168,136 | 134,790 | |||||||
Stock options granted, fair value | $ 3.05 | $ 3.14 | |||||||
Stock option vest, fair value | $ 7.75 | $ 9.12 | |||||||
Expected term | 4 years 3 months 18 days | 3 years 4 months 24 days | |||||||
Expected volatility | 43.20% | 44.60% | |||||||
Expected dividend yield | 0% | 0% | |||||||
Risk-free rate of return | 3.40% | 2.10% | |||||||
Performance Shares [Member] | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Restricted stock and stock units, granted | 132,340 | 92,815 | |||||||
Percentage of performance conditions need to be met in order for the shares to vest | 80% | 80% | |||||||
Award vesting period expiration date | Dec. 31, 2025 | Dec. 31, 2024 | |||||||
Performance Conditions | Of the shares granted in the 2023 first quarter, 198,507 shares were granted to senior management, of which 132,340 shares included a performance condition. The shares will only vest, in part, to senior management if at least 80% of a three-year cumulative target for diluted earnings per share is met for the three-year period ended December 31, 2025. If at least 80% of the three-year EPS target is not met, the grants will expire. Of the shares granted during 2022 first quarter, 139,221 shares were granted to senior management, of which 92,815 shares included a performance condition. The shares will only vest in part, to senior management if at least 80% of a three-year cumulative target for diluted earnings per share is met for the three-year period ended December 31, 2024. If at least 80% of the three-year EPS target is not met, the grants will expire. Management continually evaluates the probability of these performance conditions being met. | ||||||||
Director Members [Member] | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Restricted stock and stock units, granted | 15,260 | 12,200 | 29,775 | 24,535 | |||||
Vesting period description | The shares vest over the quarter in which they were granted | ||||||||
Senior Management [Member] | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Restricted stock and stock units, granted | 198,507 | 139,221 |
Treasury Stock - Additional Inf
Treasury Stock - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Equity Class Of Treasury Stock [Line Items] | ||||
Treasury stock purchase, shares | 0 | 0 | ||
Shares authorized to repurchase, remaining amount | $ 7,700,000 | $ 7,700,000 | $ 7,700,000 | $ 7,700,000 |
Issued treasury stock, shares | 208,158 | 177,935 | 452,760 | 349,491 |
Maximum [Member] | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Stock repurchase program, authorized amount | $ 30,000,000 | $ 30,000,000 |
Significant Clients - Additiona
Significant Clients - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) Client | Jul. 01, 2022 USD ($) Client | Jun. 30, 2023 USD ($) Client | Jul. 01, 2022 USD ($) Client | Dec. 31, 2022 USD ($) | |
Segment Reporting Information [Line Items] | |||||
Accounts receivable, net | $ 70,457 | $ 70,457 | $ 70,979 | ||
Number of major client | Client | 0 | 0 | 0 | 0 | |
IBM [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 6,600 | $ 15,900 | $ 14,800 | $ 32,400 | |
Services agreement expiration date | Oct. 27, 2023 | ||||
Accounts receivable, net | $ 9,200 | $ 9,200 | $ 14,000 | ||
IBM [Member] | Customer Concentration Risk [Member] | Sales Revenue, Services, Net [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Concentration Risk, Percentage | 8.80% | 19.20% | 9.70% | 18.80% |
Segment Information - Additiona
Segment Information - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jul. 01, 2022 USD ($) | Jun. 30, 2023 USD ($) Segment | Jul. 01, 2022 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | Segment | 3 | |||
Depreciation | $ 0.5 | $ 0.4 | $ 0.9 | $ 0.9 |
Europe IT Solutions and Services Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 0.2 | 0.1 | 0.3 | 0.3 |
North America IT Solutions and Services Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 0.2 | 0.1 | $ 0.3 | 0.2 |
Minimum [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of revenue | 5% | |||
Maximum [Member] | Non Strategic Technology Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Segment Information - Schedule
Segment Information - Schedule of Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jul. 01, 2022 | Jun. 30, 2023 | Jul. 01, 2022 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 74,588 | $ 82,759 | $ 152,790 | $ 172,176 |
Gross profit | 20,995 | 19,750 | 41,130 | 40,345 |
Contribution profit | 10,619 | 10,662 | 20,542 | 22,087 |
General and administrative expenses | 10,334 | 7,489 | 19,550 | 15,715 |
Operating income | 285 | 3,173 | 992 | 6,372 |
North America IT Solutions and Services Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 25,997 | 20,339 | 49,193 | 40,773 |
Direct costs | 15,485 | 13,260 | 29,697 | 26,832 |
Gross profit | 10,512 | 7,079 | 19,496 | 13,941 |
Sales, solutions, delivery, and recruiting expenses | 4,715 | 3,532 | 9,512 | 6,663 |
Contribution profit | 5,797 | 3,547 | 9,984 | 7,278 |
Europe IT Solutions and Services Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 38,393 | 37,160 | 78,486 | 79,638 |
Direct costs | 29,150 | 27,578 | 59,919 | 59,577 |
Gross profit | 9,243 | 9,582 | 18,567 | 20,061 |
Sales, solutions, delivery, and recruiting expenses | 5,288 | 4,855 | 10,340 | 10,083 |
Contribution profit | 3,955 | 4,727 | 8,227 | 9,978 |
Non Strategic Technology Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 10,198 | 25,260 | 25,111 | 51,765 |
Direct costs | 8,958 | 22,171 | 22,044 | 45,422 |
Gross profit | 1,240 | 3,089 | 3,067 | 6,343 |
Sales, solutions, delivery, and recruiting expenses | 373 | 701 | 736 | 1,512 |
Contribution profit | $ 867 | $ 2,388 | $ 2,331 | $ 4,831 |
Segment Information - Schedul_2
Segment Information - Schedule of Goodwill by Segment (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Segment Reporting Information [Line Items] | ||
Goodwill | $ 36,245 | $ 35,998 |
North America IT Solutions and Services Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 18,700 | 18,753 |
Europe IT Solutions and Services Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Goodwill | $ 17,545 | $ 17,245 |