Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 27, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-7234 | |
Entity Registrant Name | GP STRATEGIES CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 52-0845774 | |
Entity Address, Address Line One | 70 Corporate Center | |
Entity Address, Address Line Two | 11000 Broken Land Parkway, Suite 200, | |
Entity Address, City or Town | Columbia | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 21044 | |
City Area Code | (443) | |
Local Phone Number | 367-9600 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | GPX | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 17,161,874 | |
Entity Central Index Key | 0000070415 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash | $ 13,206 | $ 8,159 |
Accounts and other receivables, less allowance for credit losses of $2,319 in 2020 and $1,132 in 2019 | 91,169 | 131,852 |
Unbilled revenue | 39,256 | 57,229 |
Prepaid expenses and other current assets | 21,690 | 19,115 |
Assets held for sale | 25,128 | 0 |
Total current assets | 190,449 | 216,355 |
Property, plant and equipment | 23,579 | 23,746 |
Accumulated depreciation | (18,646) | (17,943) |
Property, plant and equipment, net | 4,933 | 5,803 |
Operating lease right-of-use assets | 22,637 | 27,251 |
Goodwill | 154,118 | 171,563 |
Intangible assets, net | 6,125 | 16,344 |
Other assets | 11,023 | 11,586 |
Total assets | 389,285 | 448,902 |
Liabilities and Stockholders’ Equity | ||
Accounts payable and accrued expenses | 73,227 | 92,332 |
Deferred revenue | 21,669 | 23,234 |
Current portion of operating lease liabilities | 6,073 | 7,871 |
Liabilities held for sale | 2,898 | 0 |
Total current liabilities | 103,867 | 123,437 |
Long-term debt | 43,750 | 82,870 |
Long-term portion of operating lease liabilities | 19,325 | 22,159 |
Other noncurrent liabilities | 13,353 | 10,522 |
Total liabilities | 180,295 | 238,988 |
Stockholders’ equity: | ||
Common stock, par value $0.01 per share | 173 | 172 |
Additional paid-in capital | 102,339 | 102,319 |
Retained earnings | 129,849 | 131,228 |
Treasury stock at cost | (778) | (4,070) |
Accumulated other comprehensive loss | (22,593) | (19,735) |
Total stockholders’ equity | 208,990 | 209,914 |
Total Liabilities and Stockholders' Equity | 389,285 | 448,902 |
Allowance for Doubtful Accounts Receivable, Current | $ 2,319 | $ 1,132 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts and other receivables, allowance for doubtful accounts (in dollars) | $ 2,319 | $ 1,132 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 115,594 | $ 139,005 | $ 350,019 | $ 427,891 |
Cost of revenue | 94,929 | 117,338 | 295,843 | 361,987 |
Gross profit | 20,665 | 21,667 | 54,176 | 65,904 |
General and administrative expenses | 17,642 | 15,240 | 49,106 | 46,769 |
Sales and marketing expenses | 1,685 | 1,830 | 5,381 | 5,725 |
Restructuring charges | 0 | 104 | 855 | 1,405 |
Gain on change in fair value of contingent consideration, net | 0 | 0 | 0 | 677 |
Gain on sale of business | 0 | 0 | 1,064 | 0 |
Operating income (loss) | 1,338 | 4,493 | (102) | 12,682 |
Interest expense | 440 | 1,575 | 2,025 | 4,852 |
Other income (expense) | 196 | 184 | (493) | 272 |
Income (loss) before income tax expense (benefit) | 1,094 | 3,102 | (2,620) | 8,102 |
Income tax expense (benefit) | 573 | 961 | (1,241) | 2,408 |
Net income (loss) | $ 521 | $ 2,141 | $ (1,379) | $ 5,694 |
Basic weighted average shares outstanding (in shares) | 17,094 | 16,901 | 17,082 | 16,773 |
Diluted weighted average shares outstanding (in shares) | 17,507 | 16,939 | 17,252 | 16,807 |
Per common share data: | ||||
Basic earnings per share (in dollars per share) | $ 0.03 | $ 0.13 | $ (0.08) | $ 0.34 |
Diluted earnings per share (in dollars per share) | $ 0.03 | $ 0.13 | $ (0.08) | $ 0.34 |
Remaining performance obligations | $ 286,400 | $ 286,400 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 521 | $ 2,141 | $ (1,379) | $ 5,694 |
Foreign currency translation adjustments | 2,823 | (3,451) | (2,858) | (2,118) |
Comprehensive income (loss) | $ 3,344 | $ (1,310) | $ (4,237) | $ 3,576 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders Equity Statement - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings | Treasury Stock [Member] | AOCI Attributable to Parent [Member] |
Beginning balance at Dec. 31, 2018 | $ 186,569 | $ 172 | $ 105,850 | $ 116,039 | $ (13,802) | $ (21,690) |
Net Income (Loss) Available to Common Stockholders, Basic | 5,694 | |||||
Net income (loss) | 5,694 | |||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | (2,118) | (2,118) | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (2,118) | |||||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | 1,739 | |||||
Stock Granted, Value, Share-based Compensation, Net of Forfeitures | 1,739 | |||||
Adjustments To Additional Paid In Capital Share Based Compensation Employer Contributions To Retirement Plan | 2,200 | (1,546) | 3,746 | |||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | 959 | (3,052) | 4,011 | |||
Ending balance at Sep. 30, 2019 | 195,043 | 172 | 102,991 | 121,733 | (6,045) | (23,808) |
Beginning balance at Jun. 30, 2019 | 193,764 | 172 | 104,187 | 119,592 | (9,830) | (20,357) |
Net Income (Loss) Available to Common Stockholders, Basic | 2,141 | |||||
Net income (loss) | 2,141 | |||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | (3,451) | (3,451) | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (3,451) | |||||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | 783 | |||||
Stock Granted, Value, Share-based Compensation, Net of Forfeitures | 783 | |||||
Adjustments To Additional Paid In Capital Share Based Compensation Employer Contributions To Retirement Plan | 737 | (585) | 1,322 | |||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | 1,069 | (1,394) | 2,463 | |||
Ending balance at Sep. 30, 2019 | 195,043 | 172 | 102,991 | 121,733 | (6,045) | (23,808) |
Beginning balance at Dec. 31, 2019 | 209,914 | 172 | 102,319 | 131,228 | (4,070) | (19,735) |
Net Income (Loss) Available to Common Stockholders, Basic | (1,379) | |||||
Net income (loss) | (1,379) | |||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | (2,858) | (2,858) | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (2,858) | |||||
Treasury Stock, Value, Acquired, Cost Method | (1,833) | (1,833) | ||||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | 3,805 | |||||
Stock Granted, Value, Share-based Compensation, Net of Forfeitures | 3,805 | |||||
Adjustments To Additional Paid In Capital Share Based Compensation Employer Contributions To Retirement Plan | 2,326 | 1 | (1,309) | 3,634 | ||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | (985) | (2,476) | 1,491 | |||
Ending balance at Sep. 30, 2020 | 208,990 | 173 | 102,339 | 129,849 | (778) | (22,593) |
Beginning balance at Jun. 30, 2020 | 202,741 | 172 | 100,023 | 129,328 | (1,366) | (25,416) |
Net Income (Loss) Available to Common Stockholders, Basic | 521 | |||||
Net income (loss) | 521 | |||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | 2,823 | 2,823 | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 2,823 | |||||
Treasury Stock, Value, Acquired, Cost Method | (7) | (7) | ||||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | 2,592 | |||||
Stock Granted, Value, Share-based Compensation, Net of Forfeitures | 2,592 | |||||
Adjustments To Additional Paid In Capital Share Based Compensation Employer Contributions To Retirement Plan | 747 | 1 | 264 | 482 | ||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | (427) | (540) | 113 | |||
Ending balance at Sep. 30, 2020 | $ 208,990 | $ 173 | $ 102,339 | $ 129,849 | $ (778) | $ (22,593) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (1,379) | $ 5,694 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Gain on change in fair value of contingent consideration, net | 0 | (677) |
Gain on sale of business | (1,064) | 0 |
Depreciation and amortization | 6,204 | 6,992 |
Deferred income taxes | (1,639) | (258) |
Non-cash compensation expense | 6,131 | 3,939 |
Changes in other operating items: | ||
Accounts and other receivables | 36,092 | (10,997) |
Unbilled revenue | 18,050 | 19,296 |
Prepaid expenses and other current assets | (5,591) | (6,628) |
Accounts payable, accrued expenses and net change in operating leases | (8,897) | (12,188) |
Deferred revenue | (180) | (1,840) |
Other | (2,358) | 1,218 |
Net cash provided by operating activities | 45,369 | 4,551 |
Cash flows from investing activities: | ||
Additions to property, plant and equipment | (1,284) | (1,905) |
Acquisitions, net of cash acquired | 0 | 850 |
Proceeds from sale of business | 3,328 | 0 |
Capitalized software development costs and other | (45) | (2,261) |
Net cash provided by (used in) investing activities | 1,999 | (3,316) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 109,165 | 120,350 |
Repayment of long-term debt | (148,285) | (123,700) |
Change in negative cash book balance | (3,213) | (1,329) |
Repurchases of common stock in the open market | 1,833 | 0 |
Other financing activities | (364) | (421) |
Net cash used in financing activities | (44,530) | (5,100) |
Effect of exchange rate changes on cash and cash equivalents | 2,209 | (1,813) |
Net increase (decrease) in cash | 5,047 | (5,678) |
Cash at beginning of period | 8,159 | 13,417 |
Cash at end of period | 13,206 | 7,739 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for interest | 1,902 | 4,681 |
Cash paid during the period for income taxes | $ 4,490 | $ 2,148 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation GP Strategies Corporation is a global performance improvement solutions provider of training, digital learning solutions, management consulting and engineering services. References in this report to “GP Strategies,” the “Company,” “we” and “our” are to GP Strategies Corporation and its subsidiaries, collectively. The accompanying condensed consolidated balance sheet as of September 30, 2020, the condensed consolidated statements of operations, comprehensive income (loss) and stockholders' equity for the three and nine months ended September 30, 2020 and 2019, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019 have not been audited, but have been prepared in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2019, as presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. In the opinion of management, this interim information includes all material adjustments, which are of a normal and recurring nature, necessary for a fair presentation. The results for the 2020 interim period are not necessarily indicative of results to be expected for the entire year. Effective July 1, 2020, we began managing our business under a new organizational structure on a regional basis through our three geographic markets, North America, Europe Middle East Africa ("EMEA") and Emerging Markets (Latin America and Asia Pacific countries). These became our reportable segments in the third quarter of 2020. Prior to this change, our reportable segments consisted of two global practices, Workforce Excellence and Business Transformation Services, which focused on providing similar and/or complementary products and services across our diverse customer base within target markets. Effective July 1, 2020, all U.S. employees in salaried benefited position changed from a paid time off policy ("PTO") to a flexible time off policy. Under the new policy, U.S. exempt employees no longer accrue PTO but instead are given the opportunity to take as much time off as each individual deems consistent with his or her duties, their manager's and the Company's obligations to its customers. As a result, all paid time off earned but not used as of July 1, 2020 was reversed. The condensed consolidated financial statements include the operations of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated. Certain prior year amounts have been reclassified to conform with the current year presentation. Use of Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP requires us to employ estimates and make assumptions that affect the reported amounts of certain assets and liabilities, the revenues and expenses reported for the periods covered by the accompanying consolidated financial statements, and certain amounts disclosed in these Notes to the condensed consolidated financial statements. Although such estimates and assumptions are based on management’s most recent assessment of the underlying facts and circumstances utilizing the most current information available and past experience including considerations for potential impacts of the coronavirus ("COVID-19") pandemic, actual results could differ significantly from those estimates and assumptions. Our estimates, judgments, and assumptions are evaluated periodically and adjusted accordingly. Please refer to Note 1- Significant Accounting Policies of the Notes to Consolidated Financial Statements included in our 2019 Form 10-K for a discussion of other significant estimates and assumptions affecting our consolidated financial statements. |
Recent Accounting Standards
Recent Accounting Standards | 9 Months Ended |
Sep. 30, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Standards | Recent Accounting Standards Recently Adopted Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC 326), which requires companies to record an allowance for expected credit losses over the contractual term of financial assets, including short-term trade receivables and contract assets, and expands disclosure requirements for credit quality of financial assets. We adopted the standard on January 1, 2020 and began recognizing an allowance for credit losses based on the estimated lifetime expected credit loss related to our financial assets, which primarily includes accounts receivable and unbilled revenue. The adoption of Topic 326 did not have a material impact on our consolidated results of operations or financial condition. During the nine months ended September 30, 2020, we incorporated the forecasted impact of future economic conditions into our allowance for credit losses measurement process including the expected adverse impact of COVID-19 on the global economy. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements for fair value measurements. The guidance promotes a framework to help improve the effectiveness of disclosures in the notes and is effective for annual and interim periods beginning after December 15, 2019, although early adoption is permitted. We adopted the standard on January 1, 2020. The new standard did not impact our consolidated results of operations or financial condition. Accounting Standards Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes . The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general tax accounting principles and simplifying other specific tax scenarios. The new standard is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We are currently assessing the impact that adopting this guidance will have on our consolidated financial statements. For a discussion of other accounting standards that have been issued by the FASB but are not yet effective, refer to the Recent Accounting Standards section in our Annual Report on Form 10-K for the year ended December 31, 2019. These standards are not expected to have a material impact on our results of operations, financial condition or cash flows. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Significant Accounting Policy We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC Topic 606). Revenue is measured based on the consideration specified in a contract with a customer. Most of our contracts with customers contain transaction prices with fixed consideration, however, some contracts may contain variable consideration in the form of discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties and other similar items. When a contract includes variable consideration, we evaluate the estimate of variable consideration to determine whether the estimate needs to be constrained; therefore, we include the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. This can result in recognition of revenue over time as we perform services or at a point in time when the deliverable is transferred to the customer, depending on an evaluation of the criteria for over time recognition in ASC Topic 606. Further details regarding our revenue recognition for various revenue streams are discussed below. Nature of goods and services Over 90% of our revenue is derived from services provided to our customers for training, consulting, technical, engineering and other services. Less than 10% of our revenue is derived from various other offerings including custom magazine publications and assembly of glovebox portfolios for automotive manufacturers, licenses of software and other intellectual property, and software as a service arrangements. Our primary contract vehicles are time-and-materials, fixed price (including fixed-fee per transaction) and cost-reimbursable contracts. Each contract has different terms based on the scope, deliverables and complexity of the engagement, requiring us to make judgments and estimates about recognizing revenue. Under time-and-materials and cost-reimbursable contracts, the contractual billing schedules are based on the specified level of resources we are obligated to provide. Revenue under these contract types are recognized over time as services are performed as the client simultaneously receives and consumes the benefits provided by our performance throughout the engagement. The time and materials incurred for the period is the measure of performance and, therefore, revenue is recognized in that amount. For fixed price contracts which typically involve a discrete project, such as development of training content and materials, design of training processes, software implementation, or engineering projects, the contractual billing schedules are not necessarily based on the specified level of resources we are obligated to provide. These discrete projects generally do not contain milestones or other measures of performance. The majority of our fixed price contracts meet the criteria in ASC Topic 606 for over time revenue recognition. For these contracts, revenue is recognized using a percentage-of-completion method based on the relationship of costs incurred to total estimated costs expected to be incurred over the term of the contract. We believe this methodology is a reasonable measure of proportional performance since performance primarily involves personnel costs and services provided to the customer throughout the course of the projects through regular communications of progress toward completion and other project deliverables. In addition, the customer is required to pay us for the proportionate amount of our fees in the event of contract termination. A small portion of our fixed price contracts do not meet the criteria in ASC Topic 606 for over time revenue recognition. For these projects, we defer revenue recognition until the performance obligation is satisfied, which is generally when the final deliverable is provided to the client. The direct costs related to these projects are capitalized and then recognized as cost of revenue when the performance obligation is satisfied. For fixed price contracts, when total direct cost estimates exceed revenues, the estimated losses are recognized immediately. The use of the percentage-of-completion method requires significant judgment relative to estimating total contract costs, including assumptions relative to the length of time to complete the project, the nature and complexity of the work to be performed, and anticipated changes in estimated salaries and other costs. Estimates of total contract costs are continuously monitored during the term of the contract, and recorded revenues and costs are subject to revision as the contract progresses. When revisions in estimated contract revenues and costs are determined, such adjustments are recorded in the period in which they are first identified. Adjustments to our fixed price contracts in the aggregate resulted in a net decrease to revenue of $0.4 million for the three months ended September 30, 2020 and a net increase to revenue of $0.4 million for the three months ended September 30, 2019. It also resulted in a net decrease to revenue of $0.9 million and a net increase to revenue of $1.3 million for the nine months ended September 30, 2020 and 2019 respectively. For certain fixed-fee per transaction contracts, such as delivering training courses or conducting workshops, revenue is recognized during the period in which services are delivered in accordance with the pricing outlined in the contracts. For certain fixed-fee per transaction and fixed price contracts in which the output of the arrangement is measurable, such as for the shipping of publications and print materials, revenue is recognized at the point in time at which control is transferred which is upon delivery. Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue-producing transaction, that we collect from a customer, are excluded from revenue. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. As of September 30, 2020, we had $286.4 million of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 85 percent of our remaining performance obligations as revenue within the next twelve months. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled revenue (contract assets), and deferred revenue (contract liabilities) on the condensed consolidated balance sheet. Amounts charged to our clients become billable according to the contract terms, which usually consider the passage of time, achievement of milestones or completion of the project. When billings occur after the work has been performed, such unbilled amounts will generally be billed and collected within 60 to 120 days but typically no longer than over the next twelve months. When we advance bill clients prior to the work being performed, generally, such amounts will be earned and recognized in revenue within the next twelve months. These assets and liabilities are reported on the condensed consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. Changes in the contract asset and liability balances during the nine-month period ended September 30, 2020 were not materially impacted by any other factors. We recognized revenue of $1.9 million and $1.5 million for the three months ended September 30, 2020 and 2019, respectively, and $13.3 million and $17.2 million for the nine months ended September 30, 2020 and 2019, respectively, that was included in the contract liability balance at the beginning of the year and primarily represented revenue from services performed during the current period for which we received advance payment from clients in a prior period. Disaggregation of Revenue See Note 14 (Business Segments) to these Condensed Consolidated Financial Statements for our disaggregated revenues. |
Significant Customers & Concent
Significant Customers & Concentration of Credit Risk | 9 Months Ended |
Sep. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Significant Customers & Concentration of Credit Risk | Significant Customers & Concentration of Credit Risk We have a market concentration of revenue in both the automotive sector and financial & insurance sector. Revenue from the automotive sector accounted for approximately 24% and 28% of our consolidated revenue for the nine months ended September 30, 2020 and 2019, respectively. In addition, we have a concentration of revenue from a single automotive customer, which accounted for approximately 13% of our consolidated revenue for the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, accounts receivable from a single automotive customer totaled $12.0 million, or 13%, of our consolidated accounts receivable balance. Revenue from the financial & insurance sector accounted for approximately 16% and 17% of our consolidated revenue for the nine months ended September 30, 2020 and 2019, respectively. In addition, we have a concentration of revenue from a single financial services customer, which accounted for approximately 9% and 11% of our consolidated revenue for the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, billed and unbilled accounts receivable from a single financial services customer totaled $8.1 million, or 6%, of our consolidated accounts receivable and unbilled revenue balances. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Our dilutive common stock equivalent shares consist of restricted stock units computed under the treasury stock method, using the average market price during the period. Performance-based restricted stock unit awards are included in the computation of diluted shares based on the probable outcome of the underlying performance conditions being achieved. The following table presents instruments which were not dilutive and were excluded from the computation of diluted EPS in each period, as well as the dilutive common stock equivalent shares which were included in the computation of diluted EPS: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Non-dilutive instruments 33 30 67 87 Dilutive common stock equivalents 413 38 170 34 |
Divestiture
Divestiture | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | Divestiture Sale of IC Axon Division Effective October 1, 2020, we sold our IC Axon Division pursuant to a Stock Purchase Agreement with CM Canada Acquisitions, Inc., a wholly-owned subsidiary of ClinicalMind, LLC. The upfront cash purchase price was $28.0 million, of which $1.5 million was placed in escrow for 12 months, subject to an adjustment based on the working capital of the IC Axon Division as of October 1, 2020. In addition, up to $2.0 million may be paid to us if IC Axon achieves certain revenue objectives for the year ending December 31, 2020. As of September 30, 2020, the IC Axon Division's assets and liabilities were classified as held for sale. The assets held for sale were primarily $14.2 million of goodwill, $7.0 million of intangibles, and $2.8 million of account receivables. The liabilities held for sale were primarily $1.9 million of deferred taxes. The IC Axon Division was part of the North America segment. Sale of Alternative Fuels Division |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Goodwill We are required to assess goodwill for impairment annually, or more frequently if circumstances indicate an impairment may have occurred. We perform the annual impairment assessment for each of our reporting units as of October 1st of each year. The Company concluded that the recent segment reorganization indicated that a triggering event occurred during the third quarter of 2020. A reporting unit is an operating segment, or one level below an operating segment, as defined by U.S. GAAP. As a result of our reorganization, we have six reporting units for purposes of goodwill impairment testing. Our North America operating segment is comprised of three reporting units based on our primary solution sets. The remaining three reporting units are our EMEA, Latin America and Asia Pacific operating segments. We considered our current projections, our share price in relation to the share price when the quantitative assessment was performed as of September 30, 2020 and the margin by which the fair values of the reporting units exceeded their carrying values. We concluded that each of our reporting units had excess fair values greater than their respective carrying values and that there was no indication of impairment. The Technical Performance Solutions and Latin America reporting units had fair values that exceeded their carrying value by less than 5% and 15%, respectively, as of the September 30, 2020 testing date. If the Technical Performance Solutions or Latin America reporting units fail to meet their financial projections, or if other adverse market conditions occur (such as a sustained material decrease in our stock price) which would lower the fair value of the business, we could incur material goodwill and other intangible asset impairment charges in the future. We will continue to test for impairment on an annual basis or on an interim basis if events and circumstances indicate a possible impairment. We determined the fair value of our reporting units using both an income approach and a market approach, and weighed both approaches to determine the fair value of each reporting unit. Under the income approach, we performed a discounted cash flow analysis which incorporated management’s cash flow projections over a five-year period and a terminal value was calculated by applying a capitalization rate to terminal year projections based on an estimated long-term growth rate. The five-year projected cash flows and calculated terminal value were discounted using a weighted average cost of capital (“WACC”) which takes into account the costs of debt and equity. The cost of equity is based on the risk-free interest rate, equity risk premium, industry and size equity premiums and any additional market equity risk premiums as deemed appropriate for each reporting unit. To arrive at a fair value for each reporting unit, the terminal value was discounted by the WACC and added to the present value of the estimated cash flows over the discrete five-year period. There are a number of other variables which impact the projected cash flows, such as expected revenue growth and profitability levels, working capital requirements, capital expenditures and related depreciation and amortization. Under the market approach, we performed a comparable public company analysis and applied revenue and earnings multiples from the identified set of companies to the reporting unit’s actual and forecasted financial performance to determine the fair value of each reporting unit. We evaluated the reasonableness of the fair value calculations of our reporting units by reconciling the total of the fair values of all of our reporting units to our total market capitalization, and adjusting for an appropriate control premium. In addition, we made certain judgments in allocating shared assets and liabilities to determine the carrying values for each of our reporting units. Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and determination of appropriate market comparables. A significant assumption in our goodwill impairment test as of September 30, 2020 was an estimate of how long and the extent to which we expect COVID-19 to impact our revenues and gross margins. If the pandemic last longer than we assumed or has an adverse impact for a longer period than assumed in our projections, we could incur material goodwill impairment charges in the future. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates. In addition, we make certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of our reporting units. The timing and frequency of our goodwill impairment tests are based on an ongoing assessment of events and circumstances that would indicate a possible impairment. We will continue to monitor our goodwill and intangible assets for impairment and conduct formal tests when impairment indicators are present. Changes in the carrying amount of goodwill by reportable business segment for the nine months ended September 30, 2020 were as follows (in thousands): North America EMEA Emerging Markets Total Balance as of December 31, 2019 $ 131,047 $ 29,853 $ 10,663 $ 171,563 Assets held for sale (9,249) (3,333) (1,648) (14,230) Divestiture (2,594) — — (2,594) Foreign currency translation (361) (152) (108) (621) Balance as of September 30, 2020 $ 118,843 $ 26,368 $ 8,907 $ 154,118 Intangible Assets Subject to Amortization Intangible assets with finite lives are subject to amortization over their estimated useful lives. The primary assets included in this category and their respective balances were as follows (in thousands): Gross Carrying Amount Accumulated Amortization Net Carrying Amount September 30, 2020 Customer relationships $ 19,272 $ (7,011) $ 12,261 Customer relationships - Assets held for sale (10,198) 3,197 (7,001) Intellectual property and other 3,334 (2,469) 865 $ 12,408 $ (6,283) $ 6,125 December 31, 2019 Customer relationships $ 22,348 $ (7,473) $ 14,875 Intellectual property and other 3,915 (2,446) 1,469 $ 26,263 $ (9,919) $ 16,344 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We recognize compensation expense for stock-based compensation awards issued to employees on a straight-line basis over the requisite service period. Compensation cost is based on the fair value of awards as of the grant date. The following table summarizes the pre-tax stock-based compensation expense included in reported net income (in thousands): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Restricted stock units 2,059 243 2,588 968 Board of Directors and other stock grants 533 540 1,217 771 Total stock-based compensation expense $ 2,592 $ 783 $ 3,805 $ 1,739 Pursuant to our 2011 Stock Incentive Plan, we may grant awards of non-qualified stock options, incentive stock options, restricted stock, stock units, performance shares, performance units and other incentives payable in cash or in shares of our |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt On November 30, 2018, we entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and a syndicate of lenders (the “Credit Agreement”), replacing the prior Credit Agreement with Wells Fargo dated December 21, 2016, as amended on April 28, 2018 and June 29, 2018 (the "Original Credit Agreement"). The Credit Agreement provides for a revolving credit facility, which expires on November 29, 2023, and consists of: a revolving loan facility with a borrowing limit of $200 million, including a $20 million sublimit for foreign borrowings; an accordion feature allowing the Company to request increases in commitments to the credit facility by up to an additional $100 million; a $20 million letter of credit sublimit; and a swingline loan credit sublimit of $20 million. The obligations under the Credit Agreement are guaranteed by certain of the Company's subsidiaries (the "Guarantors"). As collateral security under the Credit Agreement and the guarantees thereof, the Company and the Guarantors have granted to the administrative agent, for the benefit of the lenders, a lien on, and first priority security interest in substantially all of their tangible and intangible assets. The proceeds of the Credit Agreement were used, in part, to repay in full all outstanding borrowings under the Original Credit Agreement, and additional proceeds of the revolving credit facility are expected to be used for working capital and other general corporate purposes of the Company and its subsidiaries, including the issuance of letters of credit and Permitted Acquisitions, as defined. Borrowings under the Credit Agreement may be in the form of Base Rate loans or Euro-Rate loans, at the option of the borrowers, and bear interest at the Base Rate plus 0.25% to 1.25% or the Daily Adjusted London Inter-bank Offered Rate ("LIBOR") plus 1.25% to 2.25% respectively. Base Rate loans will bear interest at a fluctuating per annum Base Rate equal to the highest of (i) the Overnight Bank Funding Rate, plus 0.5%, (ii) the Prime Rate, and (iii) the Daily Adjusted LIBOR, plus 100 basis points (1.0%); plus an Applicable Margin. Determination of the Applicable Margin is based on a pricing grid that is generally dependent upon the Company's Leverage Ratio (as defined) as of the end of the fiscal quarter for which consolidated financial statements have been most recently delivered. We may prepay the revolving loan, in whole or in part, at any time without premium or penalty, subject to certain conditions. The Credit Agreement contains customary representations, warranties and affirmative covenants. The Credit Agreement also contains customary negative covenants, subject to negotiated exceptions, including but not limited to: (i) liens, (ii) investments, (iii) indebtedness, (iv) significant corporate changes, including mergers and acquisitions, (v) dispositions, (vi) restricted payments, including stock dividends, and (vii) certain other restrictive agreements. The Credit Agreement also requires the Company to maintain compliance with the following financial covenants; (i) a maximum leverage ratio, and (ii) a minimum interest expense coverage ratio. On May 7, 2020, we entered into an amendment to the Credit Agreement that increases the maximum leverage ratio we are required to maintain from 3.0 to 1.0 to 3.75 to 1.0 for the fiscal quarters ending June 30, 2020, September 30, 2020 and December 31, 2020, and 3.00 to 1.0 for fiscal quarters ending March 31, 2021 and thereafter, and a minimum interest expense coverage ratio of 3.0 to 1.0. The leverage ratio is computed by dividing our Funded Debt by our Consolidated EBITDA, as those terms are defined in the Credit Agreement, for the trailing four fiscal quarters, and the interest coverage ratio is computed by dividing our Consolidated EBITDA by our Consolidated Interest Expense for the trailing four fiscal quarters. As of September 30, 2020, our leverage ratio was 1.7 to 1.0 and our interest expense coverage ratio was 7.9 to 1.0, each of which was in compliance with the Credit Agreement. In addition, the amendment to the Credit Agreement reduced the borrowing limit under the credit facility from $200 million to $140 million. As of September 30, 2020, there were $43.8 million of borrowings outstanding and $51.2 million of available borrowings under the revolving loan facility based on our leverage ratio. For the nine months ended September 30, 2020 and 2019, the weighted average interest rate on our borrowings was 2.9% and 4.7%, respectively. As of September 30, 2020, the fair value of our borrowings under the Credit Agreement |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax (benefit) expense was $(1.2) million, or an effective income tax rate of 47.4%, for the nine months ended September 30, 2020 compared to $2.4 million, or an effective income tax rate of 29.7%, for the nine months ended September 30, 2019. The change in tax rate was primarily due to changes in the jurisdictional mix of earnings and the tax effects of a decrease in pre-tax earnings. Income tax expense for the interim quarterly periods is based on an estimated annual effective tax rate which includes the U.S. federal, state and local, and non-U.S. statutory rates, permanent differences, and other items that may have an impact on income tax expense. On March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") to provide certain relief as a result of the COVID-19 pandemic. The CARES Act, among other things, includes various income and payroll tax provisions, as well as provisions relating to net operating loss carryback periods, alternative minimum tax credit refunds, and modification to the net interest deduction limits. Tax payment deferrals provided for under the Cares Act resulted in liabilities for deferred payroll tax payments and other deferred tax payments under other government relief programs in different regions of the world where we operate, totaled $10.0 million as of September 30, 2020, of which approximately $4.4 million is included in accounts payable and accrued expenses and $5.6 million is in other noncurrent liabilities. We continue to monitor any effects that may result from the CARES Act. An uncertain tax position taken or expected to be taken in a tax return is recognized in the financial statements when it is more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Interest and penalties related to income taxes are accounted for as income tax expense. As of September 30, 2020, we had no uncertain tax positions reflected on our condensed consolidated balance sheet. The Company files income tax returns in U.S. federal, state and local jurisdictions, and various non-U.S. jurisdictions, and is subject to audit by tax authorities in those jurisdictions. Tax years 2016 through 2019 remain open to examination by these tax jurisdictions, and earlier years remain open to examination in certain of these jurisdictions which have longer statutes of limitations. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Stock Repurchase ProgramWe have a share repurchase program under which we may repurchase shares of our common stock from time to time in the open market, subject to prevailing business and market conditions and other factors. During the nine months ended September 30, 2020 we repurchased approximately 255,000 shares of our common stock in the open market for a total cost of approximately $1.8 million. During the nine months ended September 30, 2019 we did not repurchase shares of our common stock in the open market. As of September 30, 2020, there was approximately $1.9 million available for future repurchases under the buyback program. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During the second quarter of 2020, we initiated restructuring and transition activities to improve operational efficiency, reduce costs and better position the Company to drive future revenue growth. Restructuring charges were not recorded for the three months ended September 30, 2020. We recorded severance expense of $0.9 million for the nine months ended September 30, 2020 which is included in restructuring charges on the condensed consolidated statements of operations and which is expected to be paid by the end of 2020. The total remaining liability under these restructuring activities was $0.1 million as of September 30, 2020, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheet. We expect these restructuring activities to be completed by December 31, 2020. In addition to these restructuring charges, we also incurred $6.7 million and $9.2 million of severance expense during the three months and nine months ended September 30, 2020 respectively, relating to cost scaling measures due to the impact of COVID-19 which are included in cost of revenue, general & administrative expenses and sales and marketing expenses on our condensed consolidated statements of operations. The severance expense for the three and nine months ending September 30, 2020 includes $1.7 million stock compensation expense related to severance. |
Lease
Lease | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases We determine at its inception whether an arrangement that provides us control over the use of an asset is a lease. We recognize at lease commencement a right-of-use ("ROU") asset and lease liability based on the present value of the future lease payments over the lease term. We have elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. Certain of our leases include options to extend the term of the lease or to terminate the lease prior to the end of the initial term. When it is reasonably certain that we will exercise the option, we include the impact of the option in the lease term for purposes of determining total future lease payments. As most of our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate on the commencement date to calculate the present value of future payments. Some of our leases include future rent escalations that are based on the Consumer Price Index or other similar indices. These future rent escalations are not included in the calculation of the ROU asset and lease liability because they cannot be forecasted at the lease inception date. These are considered variable lease payments and are expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any lease pre-payments and initial direct costs of obtaining the lease, such as commissions. In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. For our real estate leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability. For all other types of leases, non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred. We have operating leases for office facilities, vehicles and computer and office equipment. We do not have any material finance leases. Lease expense is included in Cost of Revenue and General & Administrative Expenses on the condensed consolidated statements of operations, and is recorded net of immaterial sublease income. The components of lease expense were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating lease cost $ 1,737 $ 1,948 $ 6,421 $ 6,819 Short-term lease cost 477 580 937 1,140 Total lease costs $ 2,214 $ 2,528 $ 7,358 $ 7,959 Supplemental information related to leases was as follows (dollars in thousands): September 30, 2020 December 31, 2019 Operating lease right-of-use assets $ 22,637 $ 27,251 Current portion of operating lease liabilities $ 6,073 $ 7,871 Non-current portion of operating lease liabilities 19,325 22,159 Total operating lease liabilities $ 25,398 $ 30,030 Cash paid for amounts included in the measurement of operating lease liabilities $ 7,049 $ 10,137 Right-of-use assets obtained in exchange for operating lease liabilities $ 3,693 $ 4,353 Weighted-average remaining lease term for operating leases 5.5 years 5.5 years Weighted-average discount rate for operating leases 4.7 % 4.7 % The following is a reconciliation of future undiscounted cash flows to the operating lease liabilities on our condensed consolidated balance sheet as of September 30, 2020 (in thousands): Year ended December 31, 2020 (excluding the nine months ended September 30, 2020) $ 1,553 2021 6,671 2022 5,422 2023 4,469 2024 4,100 Thereafter 6,833 Total future lease payments 29,048 Less: imputed interest (3,650) Present value of future lease payments 25,398 Less: current portion of lease liabilities (6,073) Long-term lease liabilities $ 19,325 |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments Effective July 1, 2020, we began managing our business under a new organizational structure on a regional basis through our three geographic markets, North America, EMEA and Emerging Markets. These became our reportable segments in the third quarter of 2020. Prior to this change, our reportable segments consisted of two global practices, Workforce Excellence and Business Transformation Services, which focused on providing similar and/or complementary products and services across our diverse customer base within target markets. The reorganization was done to achieve the following: • Unlock the potential of organic growth to achieve better business results for our clients and the Company. • Simplify the matrix and empower rapid local decision making in service of our clients. • Leverage global practice systems, processes, and intellectual property while enabling regional authority to better align and deliver to local client needs. • Enable efficient use of our corporate infrastructure with regional resources. Across our regional operating structure, the Company provides Workforce Transformation Services categorized into three primary solution sets: • Organizational Performance Solutions ("OPS") - focus is on managed learning services, digital learning strategies and content development, business consulting, and leadership development solutions • Technical Performance Solutions ("TPS") - focus is on engineering and technical services, enterprise technology adoption and Human Capital Management ("HCM") implementation services. • Automotive Performance Solutions ("APS") - provides sales enablement solutions, including custom product sales training and other customer loyalty and marketing related services. We have also identified four focus industries to deliver these services which include Automotive, Financial Services, Defense and Aerospace and Technology. We do not allocate the following items to the segments: general & administrative expenses, sales & marketing expenses, restructuring charges, gain on change in fair value of contingent consideration, gain on sale of business, interest expense, other income (expense), and income tax expense (benefit). The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income tax expense (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenue: North America $ 77,436 $ 92,302 $ 237,654 $ 292,122 EMEA 25,437 29,577 78,647 91,373 Emerging Markets 12,721 17,126 33,718 44,396 $ 115,594 $ 139,005 $ 350,019 $ 427,891 Gross profit: North America $ 15,335 $ 15,461 $ 42,405 $ 49,240 EMEA 2,845 3,046 7,530 10,282 Emerging Markets 2,485 3,160 4,241 6,382 Total gross profit 20,665 21,667 54,176 65,904 General and administrative expenses 17,642 15,240 49,106 46,769 Sales and marketing expenses 1,685 1,830 5,381 5,725 Restructuring charges — 104 855 1,405 Gain on change in fair value of contingent consideration, net — — — 677 Gain on sale of business — — 1,064 — Operating income (loss) 1,338 4,493 (102) 12,682 Interest expense 440 1,575 2,025 4,852 Other income (expense) 196 184 (493) 272 Income (loss) before income tax expense $ 1,094 $ 3,102 $ (2,620) $ 8,102 Revenue by Category The following series of tables presents our revenue disaggregated by various categories (dollars in thousands). Three Months Ended September 30, North America EMEA Emerging Markets Consolidated 2020 2019 2020 2019 2020 2019 2020 2019 Revenue by type of service: Organizational Performance Solutions $ 30,732 $ 36,235 $ 11,156 $ 12,522 $ 6,453 $ 9,089 $ 48,341 $ 57,846 Technical Performance Solutions 29,894 38,730 14,281 15,342 145 570 44,320 54,642 Automotive Performance Solutions 16,810 17,337 — 1,713 6,123 7,467 22,933 26,517 $ 77,436 $ 92,302 $ 25,437 $ 29,577 $ 12,721 $ 17,126 $ 115,594 $ 139,005 Revenue by industry focus group: Automotive $ 19,437 $ 22,441 $ 1,596 $ 3,712 $ 6,129 $ 8,167 $ 27,162 $ 34,320 Financial Services 8,829 10,418 6,549 6,983 3,863 6,393 19,241 23,794 Defense & Aerospace 18,275 17,667 1,014 2,632 — — 19,289 20,299 Technology 8,315 7,570 901 808 365 57 9,581 8,435 All Other 22,580 34,206 15,377 15,442 2,364 2,509 40,321 52,157 $ 77,436 $ 92,302 $ 25,437 $ 29,577 $ 12,721 $ 17,126 $ 115,594 $ 139,005 Nine Months Ended September 30, North America EMEA Emerging Markets Consolidated 2020 2019 2020 2019 2020 2019 2020 2019 Revenue by type of service: Organizational Performance Solutions $ 93,089 $ 104,662 $ 33,042 $ 41,342 $ 16,308 $ 22,750 $ 142,439 $ 168,754 Technical Performance Solutions 91,495 113,156 45,257 44,559 367 914 137,119 158,629 Automotive Performance Solutions 53,070 74,304 348 5,472 17,043 20,732 70,461 100,508 $ 237,654 $ 292,122 $ 78,647 $ 91,373 $ 33,718 $ 44,396 $ 350,019 $ 427,891 Revenue by industry focus group: Automotive $ 61,610 $ 83,142 $ 5,721 $ 11,986 $ 15,054 $ 22,726 $ 82,385 $ 117,854 Financial Services 28,019 26,543 19,136 25,226 10,243 15,139 57,398 66,908 Defense & Aerospace 56,278 49,939 3,932 7,108 — — 60,210 57,047 Technology 22,622 26,302 2,074 2,652 1,004 130 25,700 29,084 All Other 69,125 106,196 47,784 44,401 7,417 6,401 124,326 156,998 $ 237,654 $ 292,122 $ 78,647 $ 91,373 $ 33,718 $ 44,396 $ 350,019 $ 427,891 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventOn October 8, 2020, the Company entered into an amendment to lease agreement (the “Amendment”) to its lease (the “Lease”) with 70 CC, LLC (the “Landlord”) for office space in Columbia, Maryland for its corporate headquarters. The lease runs through July 31, 2025. Under the Amendment, the Company will pay the Landlord approximately $1.975 million by December 31, 2020 and reduce its leased space by approximately 22,000 square feet and will reduce its rent payments effective January 1, 2021. The total rent payment reduction over the remainder of the lease is approximately $3.5 million. |
Recent Accounting Standards (Po
Recent Accounting Standards (Policy) | 9 Months Ended |
Sep. 30, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC 326), which requires companies to record an allowance for expected credit losses over the contractual term of financial assets, including short-term trade receivables and contract assets, and expands disclosure requirements for credit quality of financial assets. We adopted the standard on January 1, 2020 and began recognizing an allowance for credit losses based on the estimated lifetime expected credit loss related to our financial assets, which primarily includes accounts receivable and unbilled revenue. The adoption of Topic 326 did not have a material impact on our consolidated results of operations or financial condition. During the nine months ended September 30, 2020, we incorporated the forecasted impact of future economic conditions into our allowance for credit losses measurement process including the expected adverse impact of COVID-19 on the global economy. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements for fair value measurements. The guidance promotes a framework to help improve the effectiveness of disclosures in the notes and is effective for annual and interim periods beginning after December 15, 2019, although early adoption is permitted. We adopted the standard on January 1, 2020. The new standard did not impact our consolidated results of operations or financial condition. Accounting Standards Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes . The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general tax accounting principles and simplifying other specific tax scenarios. The new standard is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We are currently assessing the impact that adopting this guidance will have on our consolidated financial statements. For a discussion of other accounting standards that have been issued by the FASB but are not yet effective, refer to the Recent Accounting Standards section in our Annual Report on Form 10-K for the year ended December 31, 2019. These standards are not expected to have a material impact on our results of operations, financial condition or cash flows. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents instruments which were not dilutive and were excluded from the computation of diluted EPS in each period, as well as the dilutive common stock equivalent shares which were included in the computation of diluted EPS: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Non-dilutive instruments 33 30 67 87 Dilutive common stock equivalents 413 38 170 34 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill by reportable business segment for the nine months ended September 30, 2020 were as follows (in thousands): North America EMEA Emerging Markets Total Balance as of December 31, 2019 $ 131,047 $ 29,853 $ 10,663 $ 171,563 Assets held for sale (9,249) (3,333) (1,648) (14,230) Divestiture (2,594) — — (2,594) Foreign currency translation (361) (152) (108) (621) Balance as of September 30, 2020 $ 118,843 $ 26,368 $ 8,907 $ 154,118 |
Schedule of Finite-Lived Intangible Assets | Intangible assets with finite lives are subject to amortization over their estimated useful lives. The primary assets included in this category and their respective balances were as follows (in thousands): Gross Carrying Amount Accumulated Amortization Net Carrying Amount September 30, 2020 Customer relationships $ 19,272 $ (7,011) $ 12,261 Customer relationships - Assets held for sale (10,198) 3,197 (7,001) Intellectual property and other 3,334 (2,469) 865 $ 12,408 $ (6,283) $ 6,125 December 31, 2019 Customer relationships $ 22,348 $ (7,473) $ 14,875 Intellectual property and other 3,915 (2,446) 1,469 $ 26,263 $ (9,919) $ 16,344 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | The following table summarizes the pre-tax stock-based compensation expense included in reported net income (in thousands): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Restricted stock units 2,059 243 2,588 968 Board of Directors and other stock grants 533 540 1,217 771 Total stock-based compensation expense $ 2,592 $ 783 $ 3,805 $ 1,739 |
Lease (Tables)
Lease (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Lease Expenses | Lease expense is included in Cost of Revenue and General & Administrative Expenses on the condensed consolidated statements of operations, and is recorded net of immaterial sublease income. The components of lease expense were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating lease cost $ 1,737 $ 1,948 $ 6,421 $ 6,819 Short-term lease cost 477 580 937 1,140 Total lease costs $ 2,214 $ 2,528 $ 7,358 $ 7,959 |
Schedule of Supplemental Information Related to Leases | Supplemental information related to leases was as follows (dollars in thousands): September 30, 2020 December 31, 2019 Operating lease right-of-use assets $ 22,637 $ 27,251 Current portion of operating lease liabilities $ 6,073 $ 7,871 Non-current portion of operating lease liabilities 19,325 22,159 Total operating lease liabilities $ 25,398 $ 30,030 Cash paid for amounts included in the measurement of operating lease liabilities $ 7,049 $ 10,137 Right-of-use assets obtained in exchange for operating lease liabilities $ 3,693 $ 4,353 Weighted-average remaining lease term for operating leases 5.5 years 5.5 years Weighted-average discount rate for operating leases 4.7 % 4.7 % |
Schedule of Reconciliation of Future Undiscounted Cash Flows to Operating Lease Liabilities After Adoption of 842 | The following is a reconciliation of future undiscounted cash flows to the operating lease liabilities on our condensed consolidated balance sheet as of September 30, 2020 (in thousands): Year ended December 31, 2020 (excluding the nine months ended September 30, 2020) $ 1,553 2021 6,671 2022 5,422 2023 4,469 2024 4,100 Thereafter 6,833 Total future lease payments 29,048 Less: imputed interest (3,650) Present value of future lease payments 25,398 Less: current portion of lease liabilities (6,073) Long-term lease liabilities $ 19,325 |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income tax expense (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenue: North America $ 77,436 $ 92,302 $ 237,654 $ 292,122 EMEA 25,437 29,577 78,647 91,373 Emerging Markets 12,721 17,126 33,718 44,396 $ 115,594 $ 139,005 $ 350,019 $ 427,891 Gross profit: North America $ 15,335 $ 15,461 $ 42,405 $ 49,240 EMEA 2,845 3,046 7,530 10,282 Emerging Markets 2,485 3,160 4,241 6,382 Total gross profit 20,665 21,667 54,176 65,904 General and administrative expenses 17,642 15,240 49,106 46,769 Sales and marketing expenses 1,685 1,830 5,381 5,725 Restructuring charges — 104 855 1,405 Gain on change in fair value of contingent consideration, net — — — 677 Gain on sale of business — — 1,064 — Operating income (loss) 1,338 4,493 (102) 12,682 Interest expense 440 1,575 2,025 4,852 Other income (expense) 196 184 (493) 272 Income (loss) before income tax expense $ 1,094 $ 3,102 $ (2,620) $ 8,102 |
Revenue by Category | The following series of tables presents our revenue disaggregated by various categories (dollars in thousands). Three Months Ended September 30, North America EMEA Emerging Markets Consolidated 2020 2019 2020 2019 2020 2019 2020 2019 Revenue by type of service: Organizational Performance Solutions $ 30,732 $ 36,235 $ 11,156 $ 12,522 $ 6,453 $ 9,089 $ 48,341 $ 57,846 Technical Performance Solutions 29,894 38,730 14,281 15,342 145 570 44,320 54,642 Automotive Performance Solutions 16,810 17,337 — 1,713 6,123 7,467 22,933 26,517 $ 77,436 $ 92,302 $ 25,437 $ 29,577 $ 12,721 $ 17,126 $ 115,594 $ 139,005 Revenue by industry focus group: Automotive $ 19,437 $ 22,441 $ 1,596 $ 3,712 $ 6,129 $ 8,167 $ 27,162 $ 34,320 Financial Services 8,829 10,418 6,549 6,983 3,863 6,393 19,241 23,794 Defense & Aerospace 18,275 17,667 1,014 2,632 — — 19,289 20,299 Technology 8,315 7,570 901 808 365 57 9,581 8,435 All Other 22,580 34,206 15,377 15,442 2,364 2,509 40,321 52,157 $ 77,436 $ 92,302 $ 25,437 $ 29,577 $ 12,721 $ 17,126 $ 115,594 $ 139,005 Nine Months Ended September 30, North America EMEA Emerging Markets Consolidated 2020 2019 2020 2019 2020 2019 2020 2019 Revenue by type of service: Organizational Performance Solutions $ 93,089 $ 104,662 $ 33,042 $ 41,342 $ 16,308 $ 22,750 $ 142,439 $ 168,754 Technical Performance Solutions 91,495 113,156 45,257 44,559 367 914 137,119 158,629 Automotive Performance Solutions 53,070 74,304 348 5,472 17,043 20,732 70,461 100,508 $ 237,654 $ 292,122 $ 78,647 $ 91,373 $ 33,718 $ 44,396 $ 350,019 $ 427,891 Revenue by industry focus group: Automotive $ 61,610 $ 83,142 $ 5,721 $ 11,986 $ 15,054 $ 22,726 $ 82,385 $ 117,854 Financial Services 28,019 26,543 19,136 25,226 10,243 15,139 57,398 66,908 Defense & Aerospace 56,278 49,939 3,932 7,108 — — 60,210 57,047 Technology 22,622 26,302 2,074 2,652 1,004 130 25,700 29,084 All Other 69,125 106,196 47,784 44,401 7,417 6,401 124,326 156,998 $ 237,654 $ 292,122 $ 78,647 $ 91,373 $ 33,718 $ 44,396 $ 350,019 $ 427,891 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | ||||
Percentage of revenues derived from services provided | 90.00% | |||
Percentage of revenues derived from other sources | 10.00% | |||
Net increase to revenue for adjustments to fixed price contracts | $ 400,000 | $ 400,000 | $ 900,000 | $ 1,300,000 |
Remaining performance obligations | 286,400,000 | 286,400,000 | ||
Remaining performance obligation expected to be recognized in next 12 months, percentage | 0.85 | 0.85 | ||
Disaggregation of Revenue [Line Items] | ||||
Remaining performance obligations | 286,400,000 | 286,400,000 | ||
Contract with Customer, Asset, Cumulative Catch-up Adjustment to Revenue, Change in Estimate of Transaction Price | 400,000 | 400,000 | 900,000 | 1,300,000 |
Revenue recognized related to contract liabilities | $ 1,900,000 | $ 1,500,000 | $ 13,300,000 | $ 17,200,000 |
Minimum | ||||
Disaggregation of Revenue [Line Items] | ||||
Bill and collection period | 60 days | |||
Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
Bill and collection period | 120 days |
Significant Customers & Conce_2
Significant Customers & Concentration of Credit Risk (Details Textual) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Concentration Risk [Line Items] | |||
Unbilled accounts receivable | $ 91,169 | $ 131,852 | |
Single Customer | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 13.00% | ||
Unbilled accounts receivable | $ 12,000 | ||
Single Financial Services Customer | |||
Concentration Risk [Line Items] | |||
Unbilled accounts receivable | $ 8,100 | ||
Revenue | Single Customer | Automotive Industry | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 13.00% | 13.00% | |
Revenue | Single Financial Services Customer | Financial & Insurance Industry [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 9.00% | 11.00% | |
Revenue | Automotive Industry | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 24.00% | 28.00% | |
Revenue | Financial & Insurance Industry [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 16.00% | 17.00% | |
Accounts Receivable | Single Financial Services Customer | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 6.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Non-dilutive instruments (shares) | 33 | 30 | 67 | 87 |
Dilutive common stock equivalents (shares) | 413 | 38 | 170 | 34 |
Divestiture - Narrative (Detail
Divestiture - Narrative (Details) - USD ($) $ in Thousands | Jan. 02, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Oct. 01, 2020 | Jan. 01, 2020 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Goodwill disposal | $ 14,230 | |||||
Proceeds from sale of business | 3,328 | $ 0 | ||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | IC Axon | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Purchase price | $ 28,000 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Alternative Fuels Division | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Purchase price | $ 4,800 | |||||
Additional consideration upon achievement of milestone | 500 | |||||
Goodwill disposal | 2,600 | |||||
Proceeds from sale of business | $ 3,500 | $ 1,500 | ||||
Cash payment for settlement of net working capital | $ 200 | |||||
Pre-tax gain on sale of the business | 1,100 | |||||
Selling costs | $ 1,300 | |||||
Net working capital | $ 100 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Subsequent Event | IC Axon | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Escrow deposit | 1,500 | |||||
Additional consideration upon achievement of milestone | 2,000 | |||||
Goodwill disposal | 14,200 | |||||
Assets held for sale, intangible assets | 7,000 | |||||
Assets held for sale, accounts receivable | 2,800 | |||||
Liabilities held for sale, deferred tax | $ 1,900 |
Intangible Assets (Details)
Intangible Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 171,563 |
Divestiture | 2,594 |
Foreign currency translation | (621) |
Ending Balance | 154,118 |
Goodwill disposal | 14,230 |
North America | |
Goodwill [Roll Forward] | |
Beginning Balance | 131,047 |
Divestiture | 2,594 |
Foreign currency translation | (361) |
Ending Balance | 118,843 |
Goodwill disposal | 9,249 |
EMEA | |
Goodwill [Roll Forward] | |
Beginning Balance | 29,853 |
Divestiture | 0 |
Foreign currency translation | (152) |
Ending Balance | 26,368 |
Goodwill disposal | 3,333 |
Emerging Markets | |
Goodwill [Roll Forward] | |
Beginning Balance | 10,663 |
Divestiture | 0 |
Foreign currency translation | (108) |
Ending Balance | 8,907 |
Goodwill disposal | $ 1,648 |
Intangible Assets- Amortization
Intangible Assets- Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 12,408 | $ 26,263 |
Accumulated Amortization | (6,283) | (9,919) |
Net Carrying Amount | 6,125 | 16,344 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 19,272 | 22,348 |
Accumulated Amortization | (7,011) | (7,473) |
Net Carrying Amount | 12,261 | 14,875 |
Customer relationships | Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,198 | |
Accumulated Amortization | (3,197) | |
Net Carrying Amount | 7,001 | |
Intellectual property and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,334 | 3,915 |
Accumulated Amortization | (2,469) | (2,446) |
Net Carrying Amount | $ 865 | $ 1,469 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 2,592 | $ 783 | $ 3,805 | $ 1,739 |
Board of Directors and other stock grants | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 533 | 540 | 1,217 | 771 |
CEO | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,700 | |||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 2,059 | $ 243 | $ 2,588 | $ 968 |
Debt (Details)
Debt (Details) | Nov. 30, 2018USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019 | May 07, 2020USD ($) | Dec. 31, 2019USD ($) |
Short-term Debt [Line Items] | |||||
Long-term debt | $ 43,750,000 | $ 82,870,000 | |||
Debt Issuance Costs, Net | 1,200,000 | ||||
Financing Security Agreement [Member] | Base Rate [Member] | Minimum | |||||
Short-term Debt [Line Items] | |||||
Interest rate spread | 25.00% | ||||
Financing Security Agreement [Member] | Base Rate [Member] | Maximum | |||||
Short-term Debt [Line Items] | |||||
Interest rate spread | 125.00% | ||||
Financing Security Agreement [Member] | LIBOR | |||||
Short-term Debt [Line Items] | |||||
Interest rate spread | 100.00% | ||||
Financing Security Agreement [Member] | LIBOR | Minimum | |||||
Short-term Debt [Line Items] | |||||
Interest rate spread | 125.00% | ||||
Financing Security Agreement [Member] | LIBOR | Maximum | |||||
Short-term Debt [Line Items] | |||||
Interest rate spread | 225.00% | ||||
Financing Security Agreement [Member] | Overnight Bank Funding Rate [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest rate spread | 50.00% | ||||
Revolving Credit Facility [Member] | |||||
Short-term Debt [Line Items] | |||||
Available borrowings | $ 51,200,000 | ||||
Weighted average interest rate | 2.90% | 4.70% | |||
Revolving Credit Facility [Member] | Financing Security Agreement [Member] | Line of Credit [Member] | |||||
Short-term Debt [Line Items] | |||||
Borrowing capacity | $ 200,000,000 | $ 140,000,000 | |||
Leverage ratio | 1.7 | ||||
Minimum interest expense coverage | 7.9 | 3 | |||
Revolving Credit Facility [Member] | Financing Security Agreement [Member] | Line of Credit [Member] | Fiscal Quarters Through March 31, 2020 [Member] | |||||
Short-term Debt [Line Items] | |||||
Leverage ratio | 3 | ||||
Revolving Credit Facility [Member] | Financing Security Agreement [Member] | Line of Credit [Member] | Minimum | Fiscal Quarters Through December 31, 2020 [Member] | |||||
Short-term Debt [Line Items] | |||||
Leverage ratio | 3 | ||||
Revolving Credit Facility [Member] | Financing Security Agreement [Member] | Line of Credit [Member] | Maximum | Fiscal Quarters Through December 31, 2020 [Member] | |||||
Short-term Debt [Line Items] | |||||
Leverage ratio | 3.75 | ||||
Revolving Credit Facility [Member] | Financing Security Agreement [Member] | Foreign Line of Credit [Member] | |||||
Short-term Debt [Line Items] | |||||
Borrowing capacity | 20,000,000 | ||||
Revolving Credit Facility [Member] | Financing Security Agreement [Member] | Accordion Feature [Member] | |||||
Short-term Debt [Line Items] | |||||
Borrowing capacity | 100,000,000 | ||||
Revolving Credit Facility [Member] | Financing Security Agreement [Member] | Letter of Credit [Member] | |||||
Short-term Debt [Line Items] | |||||
Borrowing capacity | 20,000,000 | ||||
Revolving Credit Facility [Member] | Financing Security Agreement [Member] | Swing Line Loan Credit [Member] | |||||
Short-term Debt [Line Items] | |||||
Borrowing capacity | $ 20,000,000 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Contingency [Line Items] | ||||
Income tax expense | $ 573 | $ 961 | $ (1,241) | $ 2,408 |
Effective income tax percent | 47.40% | 29.70% | ||
Deferred Tax Liability, CARES Act | 10,000 | $ 10,000 | ||
Accounts Payable | ||||
Income Tax Contingency [Line Items] | ||||
Deferred Tax Liability, CARES Act | 4,400 | 4,400 | ||
Accrued Expenses | ||||
Income Tax Contingency [Line Items] | ||||
Deferred Tax Liability, CARES Act | $ 5,600 | $ 5,600 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($)shares | |
Stockholders' Equity Note [Abstract] | |
Stock Repurchased During Period, Shares | shares | 255 |
Stock Repurchased During Period, Value | $ 1,800 |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 1,900 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 0 | $ 104 | $ 855 | $ 1,405 | |
Severance Costs | 6,700 | 9,200 | |||
Accounts Payable and Accrued Liabilities | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Reserve | $ 100 | $ 100 | |||
Employee Severance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 900 |
Lease - Schedule of Lease Expen
Lease - Schedule of Lease Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease cost | $ 1,737 | $ 1,948 | $ 6,421 | $ 6,819 |
Short-term lease cost | 477 | 580 | 937 | 1,140 |
Total lease costs | $ 2,214 | $ 2,528 | $ 7,358 | $ 7,959 |
Lease - Schedule of Supplementa
Lease - Schedule of Supplemental Information Related to Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 22,637 | $ 27,251 |
Current portion of operating lease liabilities | 6,073 | 7,871 |
Non-current portion of operating lease liabilities | 19,325 | 22,159 |
Total operating lease liabilities | 25,398 | 30,030 |
Cash paid for amounts included in the measurement of operating lease liabilities | 7,049,000 | 10,137,000 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 3,693,000 | $ 4,353,000 |
Weighted-average remaining lease term for operating leases | 5 years 6 months | 5 years 6 months |
Weighted-average discount rate for operating leases | 4.70% | 4.70% |
Lease - Schedule of Reconciliat
Lease - Schedule of Reconciliation of Future Undiscounted Cash Flows to Operating Lease Liabilities After Adoption of 842 (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Operating Lease Liabilities, Payments Due [Abstract] | ||
2020 (excluding the nine months ended September 30, 2020) | $ 1,553 | |
2020 | 6,671 | |
2021 | 5,422 | |
2022 | 4,469 | |
2023 | 4,100 | |
Thereafter | 6,833 | |
Total future lease payments | 29,048 | |
Less: imputed interest | (3,650) | |
Total operating lease liabilities | 25,398 | $ 30,030 |
Less: current portion of lease liabilities | (6,073) | (7,871) |
Long-term portion of operating lease liabilities | $ 19,325 | $ 22,159 |
Business Segments (Details)
Business Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable business segments | segment | 3 | |||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 115,594 | $ 139,005 | $ 350,019 | $ 427,891 |
Gross Profit | 20,665 | 21,667 | 54,176 | 65,904 |
General and administrative expenses | 17,642 | 15,240 | 49,106 | 46,769 |
Sales and marketing expenses | 1,685 | 1,830 | 5,381 | 5,725 |
Restructuring charges | 0 | 104 | 855 | 1,405 |
Gain on change in fair value of contingent consideration, net | 0 | 0 | 0 | 677 |
Operating income | 1,338 | 4,493 | (102) | 12,682 |
Other income (expense) | 196 | 184 | (493) | 272 |
Income before income tax expense | 1,094 | 3,102 | (2,620) | 8,102 |
Gain on sale of business | 0 | 0 | $ 1,064 | 0 |
Number of reportable business segments | segment | 3 | |||
Managed Learning Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 48,341 | 57,846 | $ 142,439 | 168,754 |
Engineering and Technical Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 44,320 | 54,642 | 137,119 | 158,629 |
Sales Enablement [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 22,933 | 26,517 | 70,461 | 100,508 |
Manufacturing Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 19,289 | 20,299 | 60,210 | 57,047 |
Energy, Oil and Gas Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 9,581 | 8,435 | 25,700 | 29,084 |
Automotive Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 27,162 | 34,320 | 82,385 | 117,854 |
Financial and Insurance Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 19,241 | 23,794 | 57,398 | 66,908 |
Other Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 40,321 | 52,157 | 124,326 | 156,998 |
North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 77,436 | 92,302 | 237,654 | 292,122 |
Gross Profit | 15,335 | 15,461 | 42,405 | 49,240 |
North America | Managed Learning Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 30,732 | 36,235 | 93,089 | 104,662 |
North America | Engineering and Technical Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 29,894 | 38,730 | 91,495 | 113,156 |
North America | Sales Enablement [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 16,810 | 17,337 | 53,070 | 74,304 |
North America | Manufacturing Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 18,275 | 17,667 | 56,278 | 49,939 |
North America | Energy, Oil and Gas Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 8,315 | 7,570 | 22,622 | 26,302 |
North America | Automotive Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 19,437 | 22,441 | 61,610 | 83,142 |
North America | Financial and Insurance Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 8,829 | 10,418 | 28,019 | 26,543 |
North America | Other Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 22,580 | 34,206 | 69,125 | 106,196 |
EMEA | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 25,437 | 29,577 | 78,647 | 91,373 |
Gross Profit | 2,845 | 3,046 | 7,530 | 10,282 |
EMEA | Managed Learning Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 11,156 | 12,522 | 33,042 | 41,342 |
EMEA | Engineering and Technical Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 14,281 | 15,342 | 45,257 | 44,559 |
EMEA | Sales Enablement [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 1,713 | 348 | 5,472 |
EMEA | Manufacturing Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,014 | 2,632 | 3,932 | 7,108 |
EMEA | Energy, Oil and Gas Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 901 | 808 | 2,074 | 2,652 |
EMEA | Automotive Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,596 | 3,712 | 5,721 | 11,986 |
EMEA | Financial and Insurance Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 6,549 | 6,983 | 19,136 | 25,226 |
EMEA | Other Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 15,377 | 15,442 | 47,784 | 44,401 |
Emerging Markets | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 12,721 | 17,126 | 33,718 | 44,396 |
Gross Profit | 2,485 | 3,160 | 4,241 | 6,382 |
Emerging Markets | Managed Learning Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 6,453 | 9,089 | 16,308 | 22,750 |
Emerging Markets | Engineering and Technical Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 145 | 570 | 367 | 914 |
Emerging Markets | Sales Enablement [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 6,123 | 7,467 | 17,043 | 20,732 |
Emerging Markets | Manufacturing Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Emerging Markets | Energy, Oil and Gas Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 365 | 57 | 1,004 | 130 |
Emerging Markets | Automotive Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 6,129 | 8,167 | 15,054 | 22,726 |
Emerging Markets | Financial and Insurance Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 3,863 | 6,393 | 10,243 | 15,139 |
Emerging Markets | Other Market Sector [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,364 | 2,509 | 7,417 | 6,401 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 115,594 | 139,005 | ||
Revenues | 350,019 | 427,891 | ||
Operating Segments | North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 77,436 | 92,302 | ||
Revenues | 237,654 | 292,122 | ||
Operating Segments | EMEA | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 25,437 | 29,577 | ||
Revenues | 78,647 | 91,373 | ||
Operating Segments | Emerging Markets | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 12,721 | $ 17,126 | ||
Revenues | $ 33,718 | $ 44,396 |
Subsequent Event (Details)
Subsequent Event (Details) ft² in Thousands, $ in Thousands | Oct. 08, 2020USD ($)ft² | Sep. 30, 2020USD ($) |
Subsequent Event [Line Items] | ||
2020 (excluding the nine months ended September 30, 2020) | $ 1,553 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
2020 (excluding the nine months ended September 30, 2020) | $ 1,975 | |
Decrease in space leased | ft² | 22 | |
Rent payment reduction | $ 3,500 |