Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | GSE SYSTEMS INC | |
Entity Central Index Key | 944,480 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 19,636,973 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 11,763 | $ 19,111 |
Restricted cash | 647 | 960 |
Contract receivables, net | 18,757 | 13,997 |
Prepaid expenses and other current assets | 2,680 | 2,795 |
Total current assets | 33,847 | 36,863 |
Equipment, software, and leasehold improvements | 5,102 | 4,782 |
Accumulated depreciation | (3,828) | (3,719) |
Equipment, software, and leasehold improvements, net | 1,274 | 1,063 |
Software development costs, net | 677 | 690 |
Goodwill | 8,431 | 8,431 |
Intangible assets, net | 2,456 | 2,604 |
Deferred tax assets | 6,336 | 7,167 |
Other assets | 37 | 37 |
Total assets | 53,058 | 56,855 |
Current liabilities: | ||
Accounts payable | 557 | 1,251 |
Accrued expenses | 3,523 | 2,276 |
Accrued compensation | 2,975 | 2,866 |
Billings in excess of revenue earned | 12,592 | 14,543 |
Accrued warranty | 1,186 | 1,433 |
Current contingent consideration | 0 | 1,701 |
Other current liabilities | 1,410 | 1,182 |
Total current liabilities | 22,243 | 25,252 |
Other liabilities | 1,453 | 1,931 |
Total liabilities | 23,696 | 27,183 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock $.01 par value, 2,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock $0.01 par value, 30,000,000 shares authorized, 21,215,884 and 21,024,395 shares issued and 19,616,973 and 19,425,484 shares outstanding in 2018 and 2017 | 212 | 210 |
Additional paid-in capital | 77,376 | 76,802 |
Accumulated deficit | (43,711) | (42,870) |
Accumulated other comprehensive loss | (1,516) | (1,471) |
Treasury stock at cost, 1,598,911 shares | (2,999) | (2,999) |
Total stockholders' equity | 29,362 | 29,672 |
Total liabilities and stockholders' equity | $ 53,058 | $ 56,855 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 21,215,884 | 21,024,395 |
Common stock, shares outstanding (in shares) | 19,616,973 | 19,425,484 |
Treasury stock (in shares) | 1,598,911 | 1,598,911 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||
Revenue | $ 22,895 | $ 16,342 |
Cost of revenue | 17,997 | 12,220 |
Gross profit | 4,898 | 4,122 |
Operating expenses: | ||
Selling, general and administrative | 4,527 | 3,592 |
Research and development | 329 | 402 |
Restructuring charges | 917 | 45 |
Depreciation | 103 | 76 |
Amortization of definite-lived intangible assets | 150 | 64 |
Total operating expenses | 6,026 | 4,179 |
Operating loss | (1,128) | (57) |
Interest income, net | 22 | 27 |
Loss on derivative instruments, net | (156) | (160) |
Other income (expense), net | 25 | (3) |
Loss before income taxes | (1,237) | (193) |
(Benefit) provision for income taxes | 259 | 73 |
Net loss | $ (1,496) | $ (266) |
Basic loss per common share | $ (0.08) | $ (0.01) |
Diluted loss per common share | $ (0.08) | $ (0.01) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
Net loss | $ (1,496) | $ (266) |
Foreign currency translation adjustment | (45) | 93 |
Comprehensive loss | $ (1,541) | $ (173) |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Total |
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 655 | $ 655 | ||||
Balance (Scenario, Previously Reported [Member]) at Dec. 31, 2017 | (42,870) | 29,672 | ||||
Balance at Dec. 31, 2017 | $ 210 | $ 76,802 | $ (1,471) | $ (2,999) | $ 29,672 | |
Balance (in shares) at Dec. 31, 2017 | 21,024,395 | (1,598,911) | 19,425,484 | |||
Stock-based compensation expense | 595 | $ 595 | ||||
Common stock issued for options exercised (in shares) | 109,513 | |||||
Common stock issued for options exercised | $ 1 | 56 | 57 | |||
Common stock issued for RSUs vested (in shares) | 81,976 | |||||
Common stock issued for RSUs vested | $ 1 | (1) | 0 | |||
Vested RSU shares withheld to pay taxes | (76) | (76) | ||||
Foreign currency translation adjustment | (45) | (45) | ||||
Net income | (1,496) | (1,496) | ||||
Balance at Mar. 31, 2018 | $ 212 | $ 77,376 | $ (43,711) | $ (1,516) | $ (2,999) | $ 29,362 |
Balance (in shares) at Mar. 31, 2018 | 21,215,884 | (1,598,911) | 19,616,973 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (1,496) | $ (266) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation | 103 | 76 |
Amortization of definite-lived intangible assets | 150 | 64 |
Amortization of capitalized software development costs | 118 | 117 |
Change in fair value of contingent consideration, net | 0 | 254 |
Stock-based compensation expense | 627 | 596 |
Loss on derivative instruments, net | 156 | 160 |
Deferred income taxes | (90) | 0 |
Changes in assets and liabilities: | ||
Contract receivables | (4,683) | 4,937 |
Prepaid expenses and other assets | (12) | (523) |
Accounts payable, accrued compensation and accrued expenses | 647 | (1,184) |
Billings in excess of revenue earned | (1,127) | (3,279) |
Accrued warranty | (75) | 67 |
Other liabilities | 154 | 325 |
Cash (used in) provided by operating activities | (5,528) | 1,090 |
Cash flows from investing activities: | ||
Capital expenditures | (318) | (44) |
Capitalized software development costs | (105) | (29) |
Cash used in investing activities | (423) | (73) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock on the exercise of stock options | 57 | 62 |
Payments on contingent consideration | (1,701) | (597) |
RSUs withheld to pay taxes | (76) | (672) |
Cash used in financing activities | (1,720) | (1,207) |
Effect of exchange rate changes on cash | 10 | 68 |
Net (decrease) increase in cash and cash equivalents | (7,661) | (122) |
Cash and cash equivalents | 11,763 | 21,625 |
Restricted cash | 647 | 1,140 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | $ 12,410 | $ 22,765 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of Presentation The consolidated interim financial statements included herein have been prepared by GSE Systems, Inc. (the Company, GSE, we, us, or our) and are unaudited. In the opinion of the Company's management, all adjustments and reclassifications of a normal and recurring nature necessary to present fairly the financial position, results of operations and cash flows for the periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) have been condensed or omitted. The results of operations for interim periods are not necessarily an indication of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on March 16, 2018. The Company has two reportable segments as follows: ● Performance Improvement Solutions (approximately 43% of revenue) Our Performance Improvement Solutions segment primarily encompasses our technical engineering and power plant high-fidelity simulation solutions and interactive computer based tutorials/simulation focused on the process industry. This segment includes various simulation products, engineering services, and operation training systems delivered across the industries we serve: primarily nuclear and fossil fuel power generation, as well as the process industries. Our simulation solutions include the following: (1) simulation software and services, including operator training systems, for the nuclear power industry, (2) simulation software and services, including operator training systems, for the fossil power industry, and (3) simulation software and services for the process industries used to teach fundamental industry processes and control systems to newly hired employees and for ongoing workforce development and training. GSE and its predecessors have been providing these services since 1976. ● Nuclear Industry Training and Consulting (approximately 57% of revenue) Nuclear Industry Training and Consulting provides highly specialized and skilled nuclear operations instructors, procedure writers, technical engineers, and other consultants to the nuclear power industry. These employees work at our clients' facilities under client direction. Examples of these highly skilled positions are senior reactor operations instructors, procedure writers, project managers, work management specialists, planners and training material developers. This business is managed through the Hyperspring and Absolute subsidiaries. The business model, management focus, margins and other factors clearly separate this business line from the rest of the Company's product and service portfolio. GSE and its predecessors have been providing these services since 1997. Financial information about the two business segments is provided in Note 18 of the accompanying condensed consolidated financial statements. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as reported amounts of revenues and expenses during the reporting period. The Company's most significant estimates relate to revenue recognition on contracts with customers, allowance for doubtful accounts, Revenue recognition The Company derives its revenue through three broad revenue streams: 1) System Design and Build (SDB), 2) Software, and 3) Training and Consulting services. We recognize revenue from SDB and software contracts mainly through the Performance Improvement Solutions segment and the training and consulting service contracts through both the Performance Improvement Solutions segment and Nuclear Industry Training and Consulting segment. The SDB contracts are typically fixed-price and consist of initial design, engineering, assembly and installation of training simulators which include hardware, software, labor, and post contract support (PCS) on the software. We generally have two main performance obligations for an SDB contract: the training simulator build and PCS. The training simulator build performance obligation generally includes hardware, software, and labor. The transaction price under the SDB contracts is allocated to each performance obligation based on its standalone selling price. We recognize the training simulator build revenue over the construction and installation period using the cost-to-cost input method as our performance creates or enhances assets with no alternative use to the Company, and we have an enforceable right to payment for performance completed to date. Cost-to-cost input method best measures the progress toward complete satisfaction of the performance obligation. PCS revenue is recognized ratably over the service period, as PCS is deemed as a stand-ready obligation. In applying the cost-to-cost input method, we use the actual costs incurred to date relative to the total estimated costs to measure the work progress toward the completion of the performance obligation and recognize revenue accordingly. Estimated contract costs are reviewed and revised periodically as the work progresses, and the cumulative effect of any change in estimates is recognized in the period in which the change is identified. Estimated losses are recognized in the period such losses are identified. Uncertainties inherent in the performance of contracts include labor availability and productivity, material costs, change order scope and pricing, software modification and customer acceptance issues. The reliability of these cost estimates is critical to the Company's revenue recognition as a significant change in the estimates can cause the Company's revenue and related margins to change significantly from the amounts estimated in the early stages of the project. The SDB contracts generally on the systems. The base warranty will not be accounted for as a separate performance obligation under the contract because it does not provide the customer with a service in addition to the assurance evaluated on a case by case basis to determine if it provides more than just assurance that the product operates as intended, which requires carve-out as a separate performance obligation. Revenue from the sale of standalone software licenses, which do not require significant modification or customization is recognized upon its delivery to the customer. Delivery is considered to have occurred when the customer receives a copy of the software and is able to use and benefit from the software. A software license sale contract with multiple deliverables typically includes the following elements: license, installation and training services and PCS. The total transaction price of a software license sale contract is typically fixed, and is allocated to the identified performance obligations based on their relative standalone selling prices. Revenue is recognized as the performance obligations are satisfied. Specifically, license revenue is recognized when the software license is delivered to the customer; installation and training revenue is recognized when the installation and training is completed without regard to a detailed evaluation of the point in time criteria due to the short-term nature of the installation and training services (one to two days on average); and PCS revenue is recognized ratably over the service period, as PCS is deemed as a stand-ready obligation. The contracts within the training and consulting services revenue stream are primarily time and materials (T&M) based. Under a typical T&M contract, the Company is compensated based on the number of hours of approved time provided by temporary workers and the bill rates which are fixed per type of work, as well as approved expenses incurred. The customers are billed on a regular basis, such as weekly, biweekly or monthly. In accordance with Accounting Standards Codification (ASC) 606-10-55-18, we elected to apply the "right to invoice" practical expedient, under which we recognize revenue in the amount to which we have the right to invoice. The invoice amount represents the number of hours of approved time worked by each temporary worker multiplied by the bill rate for the type of work, as well as approved expenses incurred. For contracts with multiple performance obligations, we allocate the contract price to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncement and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 is as follows (in thousands): Balance at January 1, 2018 As Reported Adoption of ASC 606 As Adjusted Contract receivables, net $ 13,997 $ (10) $ 13,987 Deferred tax assets 7,167 (241) 6,926 Billings in excess of revenue earned 14,543 (906) 13,637 Accumulated deficit (42,870) 655 (42,215) The impact of adoption on our consolidated statement of operations and balance sheet was as follows (in thousands): Income Statement For the three months ended March 31, 2018 As Reported Balance without adoption of ASC 606 Effect of Change Revenue $ 22,895 $ 22,852 $ 43 Gross profit 4,898 4,855 43 Provision for income taxes 259 231 (28) Net loss (1,496) (1,511) 15 Balance Sheet March 31, 2018 As Reported Balance without adoption of ASC 606 Effect of Change Contract receivables, net $ 18,757 $ 18,874 $ (117) Deferred tax assets 6,336 6,605 (269) Billings in excess of revenue earned 12,592 13,648 (1,056) Accumulated deficit (43,711) (44,381) 670 |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) Per Common Share | 3 Months Ended |
Mar. 31, 2018 | |
Basic and Diluted Earnings (Loss) Per Common Share [Abstract] | |
Basic and Diluted Earnings (Loss) Per Common Share | 3. Basic and Diluted Loss per Common Share Basic loss per share is based on the weighted average number of outstanding common shares for the period. Diluted loss per share adjusts the weighted average shares outstanding for the potential dilution that could occur if outstanding vested stock options were exercised. The number of common shares and common share equivalents used in the determination of basic and diluted loss per share were as follows: (in thousands, except for share amounts) Three months ended March 31, 2018 2017 Numerator: Net loss $ (1,496) $ (266) Denominator: Weighted-average shares outstanding for basic loss per share 19,514,385 19,094,382 Effect of dilutive securities: Stock options and restricted stock units - - Adjusted weighted-average shares outstanding and assumed conversions for diluted loss per share 19,514,385 19,094,382 Shares related to dilutive securities excluded because inclusion would be anti-dilutive 763,200 564,833 |
Acquisition
Acquisition | 3 Months Ended |
Mar. 31, 2018 | |
Acquisition - Absolute [Abstract] | |
Acquisition - Absolute [Text Block] | 4. Acquisition On September 20, 2017, GSE, through its wholly-owned subsidiary GSE Performance Solutions, Inc. (Performance Solutions), acquired 100% of the capital stock of Absolute Consulting, Inc. (Absolute) for $8.8 million pursuant to the Stock Purchase Agreement by and among Performance Solutions and the sellers of Absolute. The purchase price was subject to a customary working capital adjustment resulting in total consideration of $9.5 million. An indemnification escrow of $1.0 million was funded from the cash paid to the sellers and is available to GSE and Performance Solutions to satisfy indemnification claims until September 20, 2019. Absolute is a provider of technical consulting and staffing solutions to the global nuclear power industry. Located in Navarre, Florida, Absolute has established long-term relationships with blue-chip customers primarily in the nuclear power industry. The acquisition of Absolute is expected to strengthen the Company's global leadership in nuclear training and consulting solutions, add new capacities to our technical consulting and staffing solutions offerings and bring highly complementary customers, while deepening relationships with existing clients. The following table summarizes the consideration paid to acquire Absolute and the fair value of the assets acquired and liabilities assumed at the date of the transaction. (in thousands) Total purchase price $ 9,521 Purchase price allocation: Cash $ 455 Contract receivables 5,121 Prepaid expenses and other current assets 68 Property, and equipment, net 184 Intangible assets 2,569 Accounts payable, accrued expenses, and other liabilities (78) Accrued compensation (1,617) Total identifiable net assets 6,702 Goodwill 2,819 Net assets acquired $ 9,521 The goodwill is primarily attributable to the additional capacities to offer broader solutions to new and existing customers and the expected enhanced cost and growth synergies as a result of the acquisition. The total amount of goodwill that is expected to be tax deductible is $2.8 million. All of the $2.8 million of goodwill was assigned to our Nuclear Industry Training and Consulting segment. The fair value of the assets acquired includes gross trade receivables of $5.1 million, which was collected in full after acquisition. GSE did not acquire any other class of receivable as a result of the acquisition of Absolute. The Company identified $2.6 million of other intangible assets, including customer relationships and trademarks/names, with amortization periods of three to 10 years. The following table summarizes the fair value of intangible assets acquired at the date of acquisition and the related weighted average amortization period: Intangible Assets Weighted average amortization period Fair Value (in years) (in thousands) Customer relationships 10 $ 1,856 Trademarks/Names 3 713 Total $ 2,569 |
Restructuring Activities
Restructuring Activities | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | 5. Restructuring Activities On December 27, 2017, the board of GSE Systems, Inc. approved an international restructuring plan to streamline and optimize the Company's global operations. Beginning in December 2017, GSE has been in the process of consolidating its engineering services and R&D activities to Maryland and ceasing an unprofitable non-core business in the U.K. As a result, the Company will be closing its offices in Nyköping, Sweden; Chennai, India; and Stockton-on-Tees, UK. These actions are designed to improve Company productivity by eliminating duplicate employee functions and increasing GSE's focus on its core business, improving efficiency and maintaining the full range of engineering capabilities while reducing costs and organizational complexity. GSE expects to eliminate approximately 40 positions due to these changes, primarily in Europe and India, and will undertake other cost-savings measures. The restructuring plan is expected to be completed in 2018. As a result of these efforts, GSE expects to record a restructuring charge of approximately $1.8 million, primarily related to workforce reductions, contract termination costs and asset write-offs due to the exit activities. As of March 31, 2018, we had recorded a restructuring charge of $1.7 million. The amounts to be transferred from cumulative translation adjustments and included in determining net income for the period, in which the liquidation of these foreign entities are completed, are not included in the estimated total amount of restructuring charge. We expect to record the remaining charges and the translation adjustments by the end of 2018. The following tables summarize the restructuring costs and restructuring liabilities: ( in thousands March 31, 2018 Total Expected Costs Costs Incurred to Date Expected Costs Remaining Employee termination benefits $ 736 $ 729 $ 7 Lease termination costs 555 519 36 Assets write-offs/impairment 222 222 - Other restructuring costs 272 180 92 Total Restructuring costs $ 1,785 $ 1,650 $ 135 The restructuring costs related to our Performance Improvement Solutions segment and are included in the consolidated statement of operations within the "Restructuring charges" line caption. Employee termination benefits Lease termination costs Other Restructuring costs Total Balance as of January 1, 2018 $ 465 $ - $ 33 $ 498 Accruals 264 519 134 917 Payments (406) - (5) (411) Currency translation and other adjustments 1 119 - 120 Balance as of March 31, 2018 $ 324 $ 638 $ 162 $ 1,124 The accrued employee termination benefits were included in "accrued compensation" line, and the accrued lease termination costs and other restructuring costs were included in "accrued expenses" in the consolidated balance sheets. |
Contingent Consideration
Contingent Consideration | 3 Months Ended |
Mar. 31, 2018 | |
Contingent Consideration [Abstract] | |
Contingent Consideration | 6. Contingent Consideration Acquisitions may include contingent consideration payments based on future financial measures of an acquired company. Under ASC 805, Business Combinations As of December 31, 2017, the remaining contingent consideration, related to our acquisition of Hyperspring in 2014 was $1.7 million, all of which was paid in January 2018. There was no contingent liability as of March 31, 2018. |
Contract Receivables
Contract Receivables | 3 Months Ended |
Mar. 31, 2018 | |
Contract Receivables [Abstract] | |
Contract Receivables | 7. Contract Receivables Contract receivables represent the Company's unconditional rights to considerations due from a broad base of both domestic and international customers. All contract receivables are considered to be collectible within twelve months. The components of contract receivables are as follows: (in thousands) March 31, December 31, 2018 2017 Billed receivables $ 10,823 $ 8,154 Unbilled receivables 8,071 5,980 Allowance for doubtful accounts (137) (137) Total contract receivables, net $ 18,757 $ 13,997 During April 2018, the Company invoiced $2.8 million of the unbilled amounts related to the balance at March 31, 2018. As of March 31, 2018 and December 31, 2017, the Company had one customer that accounted for 25.8% and 26.7%, respectively, of its consolidated contract receivables. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2018 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Prepaid Expenses and Other Current Assets | 8. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: (in thousands) March 31, December 31, 2018 2017 Inventory $ 733 $ 755 Income taxes receivable 363 418 Prepaid expenses 628 549 Other current assets 956 1,073 Total prepaid expenses and other current assets $ 2,680 $ 2,795 At March 31, 2018 and December 31, 2017, prepaid expenses and other current assets are comprised primarily of inventory and other current assets. Inventory is being purchased to support the construction of three major nuclear simulation projects related to a significant contract that was executed during the first quarter of 2016. Inventory is recorded at the lower of cost or net realizable value in accordance with ASC 330, Inventory. |
Software Development Costs
Software Development Costs | 3 Months Ended |
Mar. 31, 2018 | |
Software Development Costs [Abstract] | |
Software Development Costs | 9. Software Development Costs, Net Certain computer software development costs are capitalized in the accompanying consolidated balance sheets. Capitalization of computer software development costs begins upon the establishment of technological feasibility. Capitalization ceases and amortization of capitalized costs begins when the software product is commercially available for general release to customers. Amortization of capitalized computer software development costs is included in cost of revenue and is determined using the straight-line method over the remaining estimated economic life of the product, typically three years. On an annual basis, and more frequently as conditions indicate, the Company assesses the recovery of the unamortized software development costs by estimating the net undiscounted cash flows expected to be generated by the sale of the product. If the undiscounted cash flows are not sufficient to recover the unamortized software costs the Company will write-down the carrying amount of such asset to its estimated fair value based on the future discounted cash flows. The excess of any unamortized computer software costs over the related fair value is written down and charged to operations. Software development costs capitalized were approximately $105,000 and $29,000 for the three months ended March 31, 2018 and 2017, respectively. Total amortization expense was approximately $118,000 and $117,000 for the three months ended March 31, 2018 and 2017, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 10. Goodwill and Intangible Assets The Company's intangible assets include amounts recognized in connection with business acquisitions, including customer relationships, trade names, non-compete agreements, and contract backlog. The Company reviews goodwill for impairment annually as of December 31 and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The Company tests goodwill at the reporting unit level. A reporting unit is an operating segment, or one level below an operating segment, as defined by U.S. GAAP. After the acquisition of Hyperspring on November 14, 2014, the Company determined that it had two reporting units, which are the same as our two operating segments: (i) Performance Improvement Solutions; and (ii) Nuclear Industry Training and Consulting (which includes Hyperspring and Absolute). As of March 31, 2018, and December 31, 2017, goodwill of $8.4 million related to the Nuclear Industry Training and Consulting segment. No events or circumstances occurred during the current reporting period that would indicate impairment of such goodwill. Amortization of intangible assets other than goodwill is recognized on a straight-line basis over the estimated useful life of the intangible assets, except for contract backlog and customer relationships which are recognized in proportion to the related projected revenue streams. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. The Company does not have any intangible assets with indefinite useful lives, other than goodwill. There were no indications of impairment of intangible assets during the current reporting period. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | 11. Fair Value of Financial Instruments ASC 820, Fair Value Measurement The levels of the fair value hierarchy established by ASC 820 are: Level 1: inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2: inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. A Level 2 input must be observable for substantially the full term of the asset or liability. Level 3: inputs are unobservable and reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability. At March 31, 2018, and December 31, 2017, the Company considers the recorded value of certain of its financial assets and liabilities, which consist primarily of cash equivalents, accounts receivable and accounts payable, to approximate fair value based upon their short-term nature. For the three months ended March 31, 2018, the Company did not have any transfers between fair value Level 1, Level 2 or Level 3. The Company did not hold any non-financial assets or non-financial liabilities subject to fair value measurements on a recurring basis at March 31, 2018. The following table presents assets and liabilities measured at fair value at March 31, 2018: (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Money market funds $ 2,780 $ - $ - $ 2,780 Foreign exchange contracts - 83 - 83 Total assets $ 2,780 $ 83 $ - $ 2,863 Liability awards - (272) - (272) Total liabilities $ - $ (272) $ - $ (272) Money market funds at both March 31, 2018 and December 31, 2017 are included in cash and cash equivalents in the respective consolidated balance sheets. The following table presents assets and liabilities measured at fair value at December 31, 2017: (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Money market funds $ 3,240 $ - $ - $ 3,240 Foreign exchange contracts - 201 - 201 Total assets $ 3,240 $ 201 $ - $ 3,441 Liability awards - (242) - (242) Contingent consideration - - (1,701) (1,701) Total liabilities $ - $ (242) $ (1,701) $ (1,943) The following table provides a roll-forward of the fair value of the contingent consideration categorized as Level 3 for the three months ended March 31, 2018: (in thousands) Balance, January 1, 2018 $ 1,701 Payments made on contingent liabilities (1,701) Change in fair value - Balance, March 31, 2018 $ - |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments [Abstract] | |
Derivative Instruments | 12. Derivative Instruments The Company utilizes forward foreign currency exchange contracts to manage market risks associated with the fluctuations in foreign currency exchange rates and minimize credit exposure by limiting counterparties to nationally recognized financial institutions. As of March 31, 2018, the Company had foreign exchange contracts outstanding of approximately 162.5 million Japanese Yen and 0.2 million Australian Dollars at fixed rates. The contracts expire on various dates through December 2018. At December 31, 2017, the Company had contracts outstanding of approximately 162.5 million Japanese Yen, 24,000 Euro, and 0.2 million Australian Dollars at fixed rates. The Company has not designated the foreign exchange contracts as hedges and recorded the estimated net fair values of the contracts on the consolidated balance sheets as follows: March 31, December 31, (in thousands) 2018 2017 Asset derivatives Prepaid expenses and other current assets $ 83 $ 201 Net fair value $ 83 $ 201 The changes in the fair value of the foreign exchange contracts are included in loss on derivative instruments, net, in the consolidated statements of operations. The foreign currency denominated contract receivables, billings in excess of revenue earned, and subcontractor accruals that are related to the outstanding foreign exchange contracts are remeasured at the end of each period into the functional currency using the current exchange rate at the end of the period. The gain or loss resulting from such remeasurement is also included in loss on derivative instruments, net, in the consolidated statements of operations. For the three months ended March 31, 2018 and 2017, the Company recognized a net loss on its derivative instruments as outlined below: Three months ended March 31, (in thousands) 2018 2017 Foreign exchange contracts - change in fair value $ (118) $ (86) Remeasurement of related contract receivables, and billings in excess of revenue earned (38) (74) Loss on derivative instruments, net $ (156) $ (160) |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 13. Stock-Based Compensation The Company recognizes stock-based compensation expense for all equity-based awards issued to employees, directors and non-employees that are expected to vest. Stock-based compensation expense is based on the fair value of awards as of the grant date. The Company recognized $595,000 and $614,000 of stock-based compensation expense related to equity awards for the three months ended March 31, 2018 and 2017, respectively, under the fair value method. In addition to the stock-based compensation expense recognized, the Company also recognized $32,000 and $(18,000) of expense related to the change in the fair value of cash-settled restricted stock units (RSUs) during the three months ended March 31, 2018 and 2017, respectively. During the three months ended March 31, 2018, the Company granted 210,092 time-based RSUs to employees with an aggregate fair value of $682,799. During the three months ended March 31, 2017, the Company granted 223,802 time-based RSUs to employees with an aggregate fair value of $783,000. A portion of the time-based RSUs vest quarterly in equal amounts over the course of eight quarters and the remainder vest annually in equal amounts over the course of three years. The fair value of the time-based RSUs is expensed ratably over the requisite service period, which ranges from one to three years. During the three months ended March 31, 2018 and 2017, the Company did not grant performance-based RSUs or stock options. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2018 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | 14. Debt Line of Credit Citizens Bank The Company entered into a three-year, $5.0 million revolving line of credit facility (RLOC) with Citizens Bank on December 29, 2016, to fund general working capital needs. Working capital advances bear interest of one-month LIBOR plus 2.25% per annum and letter of credit fees are 1.25% per annum. The Company is not required to maintain a restricted cash collateral account at Citizens Bank for outstanding letters of credit and working capital advances. The maximum availability under the RLOC is subject to a borrowing base equal to 80% of eligible accounts receivable, and is reduced for any issued and outstanding letters of credit and working capital advances. At March 31, 2018, there were no outstanding borrowings on the RLOC and two letters of credit totaling $0.7 million. The amount available at March 31, 2018, after consideration of the borrowing base, letters of credit and working capital advances was approximately $4.3 million. The credit facility agreement is subject to standard financial covenants and reporting requirements. At March 31, 2018, the Company was in compliance with its financial covenants. BB&T Bank At March 31, 2018, the Company had two letters of credit with BB&T totaling $0.6 million, which have expired and are pending release by the bank and customer. At March 31, 2018 and December 31, 2017, the cash collateral account with BB&T totaled $0.6 million and $1.0 million, respectively. The balances were classified as restricted cash on the consolidated balance sheets. |
Product Warranty
Product Warranty | 3 Months Ended |
Mar. 31, 2018 | |
Product Warranty [Abstract] | |
Product Warranty | 15. Product Warranty The Company accrues for estimated warranty costs at the time the related revenue is recognized based on historical experience and projected claims. The Company's SDB contracts generally provide a one to two-year base warranty on the systems. The portion of the warranty provision expected to be incurred within 12 months is classified as current within accrued warranty and totals $1.2 million, while the remaining $0.7 million is classified as long-term within other liabilities. The activity in the accrued warranty accounts is as follows: (in thousands) Balance, January 1, 2018 $ 1,953 Current period provision 28 Current period claims (103) Currency adjustment 5 Balance at March 31, 2018 $ 1,883 |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue [Abstract] | |
Revenue [Text Block] | 16. Revenue We generate revenue primarily through three broad revenue streams: 1) SDB, 2) Software, and 3) Training and Consulting Services. We recognize revenue from SDB and software contracts mainly through the Performance Improvement Solutions segment and the training and consulting service contracts through both the Performance Improvement Solutions segment and Nuclear Industry Training and Consulting segment. The following table represents a disaggregation of revenue by type of goods or services for the three months ended March 31, 2018 and 2017, along with the reportable segment for each category: ( in thousands Three Months Ended March 31, 2018 2017 (1) Performance Improvement Solutions System Design and Build $ 7,495 $ 7,319 Software 869 456 Training and Consulting Services 1,537 1,895 Nuclear Industry Training and Consulting Training and Consulting Services 12,994 6,672 Total revenue $ 22,895 $ 16,342 (1) SDB contracts are typically fixed-priced, and we receive payments based on a billing schedule as established in our contracts. The transaction price for software contracts is generally fixed. Fees for software are normally due in advance of or shortly after delivery of the software. Fees for PCS are normally paid in advance of the service period. For Training and Consulting Services, the customers are generally billed on a regular basis, such as weekly, biweekly or monthly, for services provided. Contract liability, which we classify as billing in excess of revenue earned, relates to payments received in advance of performance under the contract. Contract liabilities are recognized as revenue as performance obligations are satisfied. The following table reflects the balance of contract liabilities and the revenue recognized in the reporting period that was included in the contract liabilities from contracts with customers: ( in thousands March 31, 2018 December 31, 2017 Billings in excess of revenue earned (BIE) $ 12,592 $ 14,543 Revenue recognized in the period from amounts included in BIE at the beginning of the period $ 5,115 N/A For an SDB contract, we generally have two main performance obligations: the training simulator build and PCS. The training simulator build generally includes hardware, software, and labor. We recognize the training simulator build revenue over the construction and installation period using the cost-to-cost input method. In applying the cost-to-cost input method, we use the actual costs incurred to date relative to the total estimated costs to measure the work progress toward the completion of the performance obligation and recognize revenue accordingly. Estimated contract costs are reviewed and revised periodically as the work progresses, and the cumulative effect of any change in estimates is recognized in the period in which the change is identified. Estimated losses are recognized in the period such losses are identified. Uncertainties inherent in the performance of contracts include labor availability and productivity, material costs, change order scope and pricing, software modification and customer acceptance issues. The reliability of these cost estimates is critical to the Company's revenue recognition as a significant change in the estimates can cause the Company's revenue and related margins to change significantly from the amounts estimated in the early stages of the project. For the three months ended March 31, 2018, the Company did not recognize significant revenue related to performance obligations satisfied in previous periods. As of March 31, 2018, the aggregate amount of transaction price allocated to the remaining performance obligations of SDB and Software contracts is $35.6 million. The Company will recognize the revenue as the performance obligations are satisfied, which is expected to occur over the next 12 months. Training and consulting services contracts are primarily T&M based. Under a typical T&M contract, the Company is compensated based on the number of hours of approved time provided by temporary workers and the bill rates, which are fixed per type of work, as well as approved expenses incurred. As part of our adoption of ASU 2014-09, we have elected to use the optional exemption under ASC 606-10-50-14(b), pursuant to which we have excluded disclosures of transaction prices allocated to remaining performance obligations under such contracts and when we expect to recognize the revenue. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 17. Income Taxes The following table presents the provision for income taxes and the effective tax rates: Three months ended March 31, ($ in thousands) 2018 2017 Provision for income taxes $ 259 $ 73 Effective tax rate (20.9%) (37.8%) The Company's income tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. Tax expense in 2018 is comprised mainly of federal income tax expense, foreign income tax expense, and state taxes. Tax expense in 2017 is comprised mainly of foreign income tax expense, Alternative Minimum Tax, state taxes, and deferred tax expense relating to the tax amortization of goodwill. Our effective tax rate was (20.9%) for the three months ended March 31, 2018. The difference in our effective tax rate and the U.S. statutory federal income tax rate of 21% was primarily due to our China subsidiary which had a taxable income for the three months ended March 31, 2018 and the accruals related to uncertain tax positions for certain foreign tax contingencies. Because of its net operating loss carryforwards, the Company is subject to U.S. federal and state income tax examinations from the year 1997 and forward. The Company is subject to foreign tax examinations by tax authorities for years 2011 forward for Sweden, 2014 forward for China, and 2015 forward for both India and the UK. An uncertain tax position taken or expected to be taken in a tax return is recognized in the consolidated financial statements when it is more likely than not ( i.e. The Company recognizes deferred tax assets to the extent that it is believed that these assets are more likely than not to be realized. The Company has evaluated all positive and negative evidence and determined that it will continue to assess a full valuation allowance on its Swedish and U.K. net deferred assets as of March 31, 2018. The Company has determined that it is more likely than not that it will realize the benefits of its deferred taxes in the U.S, China, and India. The Company recognizes the tax on GILTI as a period cost in the period the tax is incurred. Under this policy, we have not provided deferred taxes related to temporary differences that upon their reversal will affect the amount of income subject to GILTI in the period. The Company has made an entity classification (CTB) election to treat GSE UK as a disregarded entity effective January 1, 2018. Therefore, as of January 1, 2018, GSE UK is treated as a branch of the US for tax purposes. Accordingly, GSE UK's 2018 first quarter activity has been included in the US Company's income tax provision. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Information [Abstract] | |
Segment Information | 18. Segment Information The Company has two reportable business segments. The Performance Improvement Solutions segment provides simulation, training and engineering products and services delivered across the breadth of industries we serve. Solutions include simulation for both training and engineering applications. Example training applications include turnkey and custom training services, while engineering services include plant design verification and validation. The Company provides these services across all market segments. Contract terms are typically less than two years. The Nuclear Industry Training and Consulting segment provides specialized workforce solutions primarily to the nuclear industry, working at clients' facilities. This business is managed through our Hyperspring and Absolute subsidiaries. The business model, management focus, margins and other factors clearly separate this business line from the rest of the GSE product and service portfolio. 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 loss before income taxes: (in thousands) Three months ended March 31, 2018 2017 Revenue: Performance Improvement Solutions $ 9,901 $ 9,670 Nuclear Industry Training and Consulting 12,994 6,672 $ 22,895 $ 16,342 Operating income: Performance Improvement Solutions $ (790) $ (110) Nuclear Industry Training and Consulting (338) 307 Change in fair value of contingent consideration, net - (254) Operating loss (1,128) (57) Interest income, net 22 27 Loss on derivative instruments, net (156) (160) Other income (expense), net 25 (3) Loss before income taxes $ (1,237) $ (193) Effective January 2018, and due to the acquisition of Absolute, the Performance Improvement Solutions allocated corporate overhead to the Nuclear Industry Training and Consulting segment. For the three months ended March 31, 2018 and 2017, a total of $1.2 million and $0.6 million of corporate overhead, respectively, was allocated to Nuclear Industry Training and Consulting segment. Prior period amounts were reclassified to reflect the change. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 19. Subsequent Events On May 14, 2018, we announced that the Company acquired True North Consulting, LLC (True North) on May 11, 2018, a leading provider of specialty engineering solutions to the nuclear power industry. Founded in 1999 in Montrose, Colorado, True North generated revenue of approximately $11 million for the year ended December 31, 2017, of which over 85% came from the nuclear power industry. True North employs roughly 60 full-time and part-time professionals with expertise in areas such as in-service testing for engineering programs focused on ASME OM code including Appendix J, balance of plant programs, thermal performance, in-service inspection for specialty engineering including ASME Section XI and software solutions. The Company acquired True North for approximately approximately approximately On May 11, 2018, the Company entered into an amended and restated credit agreement with Citizen's Bank, consisting of a five-year $5 million revolving line of credit and a five-year $25 million delayed draw term loan facility to fund acquisitions approved by the Lender. We drew down approximately $10.3 million to fund the acquisition of True North. Interest is based on a LIBOR spread of 200 to 275 basis points, depending on pre-defined leverage thresholds defined in the agreement. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated interim financial statements included herein have been prepared by GSE Systems, Inc. (the Company, GSE, we, us, or our) and are unaudited. In the opinion of the Company's management, all adjustments and reclassifications of a normal and recurring nature necessary to present fairly the financial position, results of operations and cash flows for the periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) have been condensed or omitted. The results of operations for interim periods are not necessarily an indication of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on March 16, 2018. The Company has two reportable segments as follows: ● Performance Improvement Solutions (approximately 43% of revenue) Our Performance Improvement Solutions segment primarily encompasses our technical engineering and power plant high-fidelity simulation solutions and interactive computer based tutorials/simulation focused on the process industry. This segment includes various simulation products, engineering services, and operation training systems delivered across the industries we serve: primarily nuclear and fossil fuel power generation, as well as the process industries. Our simulation solutions include the following: (1) simulation software and services, including operator training systems, for the nuclear power industry, (2) simulation software and services, including operator training systems, for the fossil power industry, and (3) simulation software and services for the process industries used to teach fundamental industry processes and control systems to newly hired employees and for ongoing workforce development and training. GSE and its predecessors have been providing these services since 1976. ● Nuclear Industry Training and Consulting (approximately 57% of revenue) Nuclear Industry Training and Consulting provides highly specialized and skilled nuclear operations instructors, procedure writers, technical engineers, and other consultants to the nuclear power industry. These employees work at our clients' facilities under client direction. Examples of these highly skilled positions are senior reactor operations instructors, procedure writers, project managers, work management specialists, planners and training material developers. This business is managed through the Hyperspring and Absolute subsidiaries. The business model, management focus, margins and other factors clearly separate this business line from the rest of the Company's product and service portfolio. GSE and its predecessors have been providing these services since 1997. Financial information about the two business segments is provided in Note 18 of the accompanying condensed consolidated financial statements. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as reported amounts of revenues and expenses during the reporting period. The Company's most significant estimates relate to revenue recognition on contracts with customers, allowance for doubtful accounts, |
Revenue Recognition | Revenue recognition The Company derives its revenue through three broad revenue streams: 1) System Design and Build (SDB), 2) Software, and 3) Training and Consulting services. We recognize revenue from SDB and software contracts mainly through the Performance Improvement Solutions segment and the training and consulting service contracts through both the Performance Improvement Solutions segment and Nuclear Industry Training and Consulting segment. The SDB contracts are typically fixed-price and consist of initial design, engineering, assembly and installation of training simulators which include hardware, software, labor, and post contract support (PCS) on the software. We generally have two main performance obligations for an SDB contract: the training simulator build and PCS. The training simulator build performance obligation generally includes hardware, software, and labor. The transaction price under the SDB contracts is allocated to each performance obligation based on its standalone selling price. We recognize the training simulator build revenue over the construction and installation period using the cost-to-cost input method as our performance creates or enhances assets with no alternative use to the Company, and we have an enforceable right to payment for performance completed to date. Cost-to-cost input method best measures the progress toward complete satisfaction of the performance obligation. PCS revenue is recognized ratably over the service period, as PCS is deemed as a stand-ready obligation. In applying the cost-to-cost input method, we use the actual costs incurred to date relative to the total estimated costs to measure the work progress toward the completion of the performance obligation and recognize revenue accordingly. Estimated contract costs are reviewed and revised periodically as the work progresses, and the cumulative effect of any change in estimates is recognized in the period in which the change is identified. Estimated losses are recognized in the period such losses are identified. Uncertainties inherent in the performance of contracts include labor availability and productivity, material costs, change order scope and pricing, software modification and customer acceptance issues. The reliability of these cost estimates is critical to the Company's revenue recognition as a significant change in the estimates can cause the Company's revenue and related margins to change significantly from the amounts estimated in the early stages of the project. The SDB contracts generally on the systems. The base warranty will not be accounted for as a separate performance obligation under the contract because it does not provide the customer with a service in addition to the assurance evaluated on a case by case basis to determine if it provides more than just assurance that the product operates as intended, which requires carve-out as a separate performance obligation. Revenue from the sale of standalone software licenses, which do not require significant modification or customization is recognized upon its delivery to the customer. Delivery is considered to have occurred when the customer receives a copy of the software and is able to use and benefit from the software. A software license sale contract with multiple deliverables typically includes the following elements: license, installation and training services and PCS. The total transaction price of a software license sale contract is typically fixed, and is allocated to the identified performance obligations based on their relative standalone selling prices. Revenue is recognized as the performance obligations are satisfied. Specifically, license revenue is recognized when the software license is delivered to the customer; installation and training revenue is recognized when the installation and training is completed without regard to a detailed evaluation of the point in time criteria due to the short-term nature of the installation and training services (one to two days on average); and PCS revenue is recognized ratably over the service period, as PCS is deemed as a stand-ready obligation. The contracts within the training and consulting services revenue stream are primarily time and materials (T&M) based. Under a typical T&M contract, the Company is compensated based on the number of hours of approved time provided by temporary workers and the bill rates which are fixed per type of work, as well as approved expenses incurred. The customers are billed on a regular basis, such as weekly, biweekly or monthly. In accordance with Accounting Standards Codification (ASC) 606-10-55-18, we elected to apply the "right to invoice" practical expedient, under which we recognize revenue in the amount to which we have the right to invoice. The invoice amount represents the number of hours of approved time worked by each temporary worker multiplied by the bill rate for the type of work, as well as approved expenses incurred. For contracts with multiple performance obligations, we allocate the contract price to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers. |
Recent Accounting Pronounceme28
Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncement and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 is as follows (in thousands): Balance at January 1, 2018 As Reported Adoption of ASC 606 As Adjusted Contract receivables, net $ 13,997 $ (10) $ 13,987 Deferred tax assets 7,167 (241) 6,926 Billings in excess of revenue earned 14,543 (906) 13,637 Accumulated deficit (42,870) 655 (42,215) The impact of adoption on our consolidated statement of operations and balance sheet was as follows (in thousands): Income Statement For the three months ended March 31, 2018 As Reported Balance without adoption of ASC 606 Effect of Change Revenue $ 22,895 $ 22,852 $ 43 Gross profit 4,898 4,855 43 Provision for income taxes 259 231 (28) Net loss (1,496) (1,511) 15 Balance Sheet March 31, 2018 As Reported Balance without adoption of ASC 606 Effect of Change Contract receivables, net $ 18,757 $ 18,874 $ (117) Deferred tax assets 6,336 6,605 (269) Billings in excess of revenue earned 12,592 13,648 (1,056) Accumulated deficit (43,711) (44,381) 670 |
Basic and Diluted Earnings (L29
Basic and Diluted Earnings (Loss) Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Basic and Diluted Earnings (Loss) Per Common Share [Abstract] | |
Number of Common Shares and Common Share Equivalents Used in the Determination of Basic and Diluted Income (Loss) per Share | The number of common shares and common share equivalents used in the determination of basic and diluted loss per share were as follows: (in thousands, except for share amounts) Three months ended March 31, 2018 2017 Numerator: Net loss $ (1,496) $ (266) Denominator: Weighted-average shares outstanding for basic loss per share 19,514,385 19,094,382 Effect of dilutive securities: Stock options and restricted stock units - - Adjusted weighted-average shares outstanding and assumed conversions for diluted loss per share 19,514,385 19,094,382 Shares related to dilutive securities excluded because inclusion would be anti-dilutive 763,200 564,833 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Acquisition - Absolute [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the consideration paid to acquire Absolute and the fair value of the assets acquired and liabilities assumed at the date of the transaction. (in thousands) Total purchase price $ 9,521 Purchase price allocation: Cash $ 455 Contract receivables 5,121 Prepaid expenses and other current assets 68 Property, and equipment, net 184 Intangible assets 2,569 Accounts payable, accrued expenses, and other liabilities (78) Accrued compensation (1,617) Total identifiable net assets 6,702 Goodwill 2,819 Net assets acquired $ 9,521 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The Company identified $2.6 million of other intangible assets, including customer relationships and trademarks/names, with amortization periods of three to 10 years. The following table summarizes the fair value of intangible assets acquired at the date of acquisition and the related weighted average amortization period: Intangible Assets Weighted average amortization period Fair Value (in years) (in thousands) Customer relationships 10 $ 1,856 Trademarks/Names 3 713 Total $ 2,569 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring Activities [Abstract] | |
Restructuring and Related Costs [Table Text Block] | The following tables summarize the restructuring costs and restructuring liabilities: ( in thousands March 31, 2018 Total Expected Costs Costs Incurred to Date Expected Costs Remaining Employee termination benefits $ 736 $ 729 $ 7 Lease termination costs 555 519 36 Assets write-offs/impairment 222 222 - Other restructuring costs 272 180 92 Total Restructuring costs $ 1,785 $ 1,650 $ 135 The restructuring costs related to our Performance Improvement Solutions segment and are included in the consolidated statement of operations within the "Restructuring charges" line caption. |
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | Employee termination benefits Lease termination costs Other Restructuring costs Total Balance as of January 1, 2018 $ 465 $ - $ 33 $ 498 Accruals 264 519 134 917 Payments (406) - (5) (411) Currency translation and other adjustments 1 119 - 120 Balance as of March 31, 2018 $ 324 $ 638 $ 162 $ 1,124 The accrued employee termination benefits were included in "accrued compensation" line, and the accrued lease termination costs and other restructuring costs were included in "accrued expenses" in the consolidated balance sheets. |
Contract Receivables (Tables)
Contract Receivables (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Contract Receivables [Abstract] | |
Components of Contract Receivables | The components of contract receivables are as follows: (in thousands) March 31, December 31, 2018 2017 Billed receivables $ 10,823 $ 8,154 Unbilled receivables 8,071 5,980 Allowance for doubtful accounts (137) (137) Total contract receivables, net $ 18,757 $ 13,997 |
Prepaid Expenses and Other Cu33
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following: (in thousands) March 31, December 31, 2018 2017 Inventory $ 733 $ 755 Income taxes receivable 363 418 Prepaid expenses 628 549 Other current assets 956 1,073 Total prepaid expenses and other current assets $ 2,680 $ 2,795 |
Fair Value of Financial Instr34
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value of Financial Instruments [Abstract] | |
Assets and Liabilities Measured at Fair Value | The following table presents assets and liabilities measured at fair value at March 31, 2018: (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Money market funds $ 2,780 $ - $ - $ 2,780 Foreign exchange contracts - 83 - 83 Total assets $ 2,780 $ 83 $ - $ 2,863 Liability awards - (272) - (272) Total liabilities $ - $ (272) $ - $ (272) Money market funds at both March 31, 2018 and December 31, 2017 are included in cash and cash equivalents in the respective consolidated balance sheets. The following table presents assets and liabilities measured at fair value at December 31, 2017: (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Money market funds $ 3,240 $ - $ - $ 3,240 Foreign exchange contracts - 201 - 201 Total assets $ 3,240 $ 201 $ - $ 3,441 Liability awards - (242) - (242) Contingent consideration - - (1,701) (1,701) Total liabilities $ - $ (242) $ (1,701) $ (1,943) |
Rollforward of Fair Value of Contingent Consideration as Level 3 | The following table provides a roll-forward of the fair value of the contingent consideration categorized as Level 3 for the three months ended March 31, 2018: (in thousands) Balance, January 1, 2018 $ 1,701 Payments made on contingent liabilities (1,701) Change in fair value - Balance, March 31, 2018 $ - |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments [Abstract] | |
Estimated Fair Value of the Contracts in the Consolidated Balance Sheets | The Company has not designated the foreign exchange contracts as hedges and recorded the estimated net fair values of the contracts on the consolidated balance sheets as follows: March 31, December 31, (in thousands) 2018 2017 Asset derivatives Prepaid expenses and other current assets $ 83 $ 201 Net fair value $ 83 $ 201 |
Net (Loss) Gain on Derivative Instruments | For the three months ended March 31, 2018 and 2017, the Company recognized a net loss on its derivative instruments as outlined below: Three months ended March 31, (in thousands) 2018 2017 Foreign exchange contracts - change in fair value $ (118) $ (86) Remeasurement of related contract receivables, and billings in excess of revenue earned (38) (74) Loss on derivative instruments, net $ (156) $ (160) |
Product Warranty (Tables)
Product Warranty (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Product Warranty [Abstract] | |
Activities in the Product Warranty Accounts | The Company accrues for estimated warranty costs at the time the related revenue is recognized based on historical experience and projected claims. The Company's SDB contracts generally provide a one to two-year base warranty on the systems. The portion of the warranty provision expected to be incurred within 12 months is classified as current within accrued warranty and totals $1.2 million, while the remaining $0.7 million is classified as long-term within other liabilities. The activity in the accrued warranty accounts is as follows: (in thousands) Balance, January 1, 2018 $ 1,953 Current period provision 28 Current period claims (103) Currency adjustment 5 Balance at March 31, 2018 $ 1,883 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table represents a disaggregation of revenue by type of goods or services for the three months ended March 31, 2018 and 2017, along with the reportable segment for each category: ( in thousands Three Months Ended March 31, 2018 2017 (1) Performance Improvement Solutions System Design and Build $ 7,495 $ 7,319 Software 869 456 Training and Consulting Services 1,537 1,895 Nuclear Industry Training and Consulting Training and Consulting Services 12,994 6,672 Total revenue $ 22,895 $ 16,342 (1) |
Contract with Customer, Asset and Liability [Table Text Block] | SDB contracts are typically fixed-priced, and we receive payments based on a billing schedule as established in our contracts. The transaction price for software contracts is generally fixed. Fees for software are normally due in advance of or shortly after delivery of the software. Fees for PCS are normally paid in advance of the service period. For Training and Consulting Services, the customers are generally billed on a regular basis, such as weekly, biweekly or monthly, for services provided. Contract liability, which we classify as billing in excess of revenue earned, relates to payments received in advance of performance under the contract. Contract liabilities are recognized as revenue as performance obligations are satisfied. The following table reflects the balance of contract liabilities and the revenue recognized in the reporting period that was included in the contract liabilities from contracts with customers: ( in thousands March 31, 2018 December 31, 2017 Billings in excess of revenue earned (BIE) $ 12,592 $ 14,543 Revenue recognized in the period from amounts included in BIE at the beginning of the period $ 5,115 N/A For an SDB contract, we generally have two main performance obligations: the training simulator build and PCS. The training simulator build generally includes hardware, software, and labor. We recognize the training simulator build revenue over the construction and installation period using the cost-to-cost input method. In applying the cost-to-cost input method, we use the actual costs incurred to date relative to the total estimated costs to measure the work progress toward the completion of the performance obligation and recognize revenue accordingly. Estimated contract costs are reviewed and revised periodically as the work progresses, and the cumulative effect of any change in estimates is recognized in the period in which the change is identified. Estimated losses are recognized in the period such losses are identified. Uncertainties inherent in the performance of contracts include labor availability and productivity, material costs, change order scope and pricing, software modification and customer acceptance issues. The reliability of these cost estimates is critical to the Company's revenue recognition as a significant change in the estimates can cause the Company's revenue and related margins to change significantly from the amounts estimated in the early stages of the project. For the three months ended March 31, 2018, the Company did not recognize significant revenue related to performance obligations satisfied in previous periods. |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Schedule of Income Taxes | The following table presents the provision for income taxes and the effective tax rates: Three months ended March 31, ($ in thousands) 2018 2017 Provision for income taxes $ 259 $ 73 Effective tax rate (20.9%) (37.8%) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Information [Abstract] | |
Reconciliation of Revenue and Operating Results to Consolidated Income (Loss) Before Income Tax Expense | 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 loss before income taxes: (in thousands) Three months ended March 31, 2018 2017 Revenue: Performance Improvement Solutions $ 9,901 $ 9,670 Nuclear Industry Training and Consulting 12,994 6,672 $ 22,895 $ 16,342 Operating income: Performance Improvement Solutions $ (790) $ (110) Nuclear Industry Training and Consulting (338) 307 Change in fair value of contingent consideration, net - (254) Operating loss (1,128) (57) Interest income, net 22 27 Loss on derivative instruments, net (156) (160) Other income (expense), net 25 (3) Loss before income taxes $ (1,237) $ (193) Effective January 2018, and due to the acquisition of Absolute, the Performance Improvement Solutions allocated corporate overhead to the Nuclear Industry Training and Consulting segment. For the three months ended March 31, 2018 and 2017, a total of $1.2 million and $0.6 million of corporate overhead, respectively, was allocated to Nuclear Industry Training and Consulting segment. Prior period amounts were reclassified to reflect the change. |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2018Segment | |
Summary of Significant Accounting Policies [Abstract] | |
Number of reportable segment | 2 |
Term of warranty - min | 1 year |
Term of Warranty - max | 2 years |
Revenue [Member] | Performance Improvement Solutions [Member] | |
Revenue by major customers [Abstract] | |
Percentage of revenue contributed by major customers | 43.00% |
Revenue [Member] | Nuclear Industry Training and Consulting [Member] | |
Revenue by major customers [Abstract] | |
Percentage of revenue contributed by major customers | 57.00% |
Recent Accounting Pronounceme41
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Contract receivables, net | $ 18,757 | $ 13,997 | ||
Deferred tax assets | 6,336 | 7,167 | $ 7,167 | |
Billings in excess of revenue earned | 12,592 | 14,543 | ||
Accumulated Deficit | (43,711) | (42,870) | ||
Contracts Revenue | 22,895 | $ 16,342 | ||
Gross Profit | 4,898 | 4,122 | ||
(Benefit) provision for income taxes | 259 | 73 | ||
Net Income (Loss) Attributable to Parent | (1,496) | (266) | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings | 0 | $ 254 | ||
Restatement Adjustment [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Contract receivables, net | 13,987 | |||
Deferred tax assets | 6,926 | |||
Billings in excess of revenue earned | 13,637 | |||
Accumulated Deficit | (42,215) | |||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Contract receivables, net | (117) | (10) | ||
Deferred tax assets | (269) | (241) | ||
Billings in excess of revenue earned | (1,056) | (906) | ||
Accumulated Deficit | 670 | $ 655 | ||
Contracts Revenue | 43 | |||
Gross Profit | 43 | |||
(Benefit) provision for income taxes | (28) | |||
Net Income (Loss) Attributable to Parent | 15 | |||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Contract receivables, net | 18,874 | |||
Deferred tax assets | 6,605 | |||
Billings in excess of revenue earned | 13,648 | |||
Accumulated Deficit | (44,381) | |||
Contracts Revenue | 22,852 | |||
Gross Profit | 4,855 | |||
(Benefit) provision for income taxes | 231 | |||
Net Income (Loss) Attributable to Parent | $ (1,511) |
Basic and Diluted Earnings (L42
Basic and Diluted Earnings (Loss) Per Common Share (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator [Abstract] | ||
Net loss | $ (1,496) | $ (266) |
Denominator [Abstract] | ||
Weighted-average shares outstanding for basic earnings per share (in shares) | 19,514,385 | 19,094,382 |
Effect of dilutive securities [Abstract] | ||
Stock options and restricted stock units (in shares) | 0 | 0 |
Adjusted weighted-average shares outstanding and assumed conversions for diluted income (loss) per share (in shares) | 19,514,385 | 19,094,382 |
Shares related to dilutive securities excluded because inclusion would be anti-dilutive (in shares) | 763,200 | 564,833 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Sep. 20, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Cash consideration before working capital adj | $ 8,750 | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||
Goodwill | $ 8,431 | $ 8,431 | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets Acquired | 2,569 | |||
Customer Relationships [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets Acquired | $ 1,856 | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | |||
Trademarks and Trade Names [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets Acquired | $ 713 | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | |||
Absolute Consulting, Inc. [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage of ownership interest acquired | 100.00% | |||
Business Acquisition, Name of Acquired Entity | Absolute Consulting, Inc. | |||
Business Acquisition, Effective Date of Acquisition | Sep. 20, 2017 | |||
Cash purchase price | $ 9,521 | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||
Cash | 455 | |||
Contract receivables | 5,121 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets | 68 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Equipment | 184 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 2,569 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | (78) | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | (1,617) | |||
Identifiable Net assets acquired | 6,702 | |||
Goodwill | 2,819 | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total | 9,521 | |||
Business Combination, Acquired Receivables [Abstract] | ||||
Business Combination, Acquired Receivable, Fair Value | 5,121 | |||
Business Combination, Acquired Receivables, Gross Contractual Amount | 5,121 | |||
Business Combination, Acquired Receivables, Estimated Uncollectible | 0 | |||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 2,819 | |||
Cash consideration in escrow | $ 1,000 |
Restructuring Activities (Detai
Restructuring Activities (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)Position | Mar. 31, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Expected Number of Positions Eliminated | Position | 40 | |
Restructuring and Related Cost, Expected Cost [Abstract] | ||
Restructuring and Related Cost, Cost Incurred to Date | $ 1,650 | |
Restructuring and Related Cost, Expected Cost Remaining | 135 | |
Restructuring and Related Cost, Expected Cost, Total | 1,785 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning Balance | 498 | |
Restructuring charges | 917 | $ 45 |
Payments for Restructuring | (411) | |
Restructuring Reserve, Foreign Currency Translation Gain (Loss) | 120 | |
Restructuring Reserve, Ending Balance | 1,124 | |
Employee Severance [Member] | ||
Restructuring and Related Cost, Expected Cost [Abstract] | ||
Restructuring and Related Cost, Cost Incurred to Date | 729 | |
Restructuring and Related Cost, Expected Cost Remaining | 7 | |
Restructuring and Related Cost, Expected Cost, Total | 736 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning Balance | 465 | |
Restructuring charges | 264 | |
Payments for Restructuring | (406) | |
Restructuring Reserve, Foreign Currency Translation Gain (Loss) | 1 | |
Restructuring Reserve, Ending Balance | 324 | |
Contract Termination [Member] | ||
Restructuring and Related Cost, Expected Cost [Abstract] | ||
Restructuring and Related Cost, Cost Incurred to Date | 519 | |
Restructuring and Related Cost, Expected Cost Remaining | 36 | |
Restructuring and Related Cost, Expected Cost, Total | 555 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning Balance | 0 | |
Restructuring charges | 519 | |
Payments for Restructuring | 0 | |
Restructuring Reserve, Foreign Currency Translation Gain (Loss) | 119 | |
Restructuring Reserve, Ending Balance | 638 | |
Other Restructuring [Member] | ||
Restructuring and Related Cost, Expected Cost [Abstract] | ||
Restructuring and Related Cost, Cost Incurred to Date | 180 | |
Restructuring and Related Cost, Expected Cost Remaining | 92 | |
Restructuring and Related Cost, Expected Cost, Total | 272 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning Balance | 33 | |
Restructuring charges | 134 | |
Payments for Restructuring | (5) | |
Restructuring Reserve, Foreign Currency Translation Gain (Loss) | 0 | |
Restructuring Reserve, Ending Balance | 162 | |
Assets Write-off [Member] | ||
Restructuring and Related Cost, Expected Cost [Abstract] | ||
Restructuring and Related Cost, Cost Incurred to Date | 222 | |
Restructuring and Related Cost, Expected Cost Remaining | 0 | |
Restructuring and Related Cost, Expected Cost, Total | $ 222 |
Contingent Consideration (Detai
Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Contingent Consideration [Abstract] | |||
Contingent consideration accrued, current | $ 0 | $ 1,701 | |
Payments on contingent consideration | $ (1,701) | $ (597) |
Contract Receivables (Details)
Contract Receivables (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2017USD ($) | Mar. 31, 2018USD ($)Customer | Dec. 31, 2016 | Dec. 31, 2017USD ($)Customer | |
Contract Receivables [Abstract] | ||||
Maximum term of contract receivables | 12 months | |||
Components of contract receivables [Abstract] | ||||
Billed receivables | $ 10,823 | $ 8,154 | ||
Unbilled receivables | 8,071 | 5,980 | ||
Allowance for doubtful accounts | (137) | (137) | ||
Total contract receivables, net | $ 18,757 | $ 13,997 | ||
Unbilled contract receivables billed during Oct 2017 | $ 2,800 | |||
Contract Receivable [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of customers accounting for contract receivables | Customer | 1 | 1 | ||
Percentage of contract receivables accounted by major customers | 25.80% | 26.70% | ||
Reorganizations [Abstract] | ||||
Percentage of accounts receivable, unbilled receivables, and billings in excess reserved | 25.80% | 26.70% |
Prepaid Expenses and Other Cu47
Prepaid Expenses and Other Current Assets (Details) $ in Thousands | Mar. 31, 2018USD ($)Project | Dec. 31, 2017USD ($) |
Prepaid Expenses and Other Current Assets [Abstract] | ||
Inventory | $ 733 | $ 755 |
Income tax receivable | 363 | 418 |
Prepaid expenses | 628 | 549 |
Other current assets | 956 | 1,073 |
Total prepaid expenses and other current assets | $ 2,680 | $ 2,795 |
Number of projects | Project | 3 |
Software Development Costs (Det
Software Development Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Software Development Costs [Abstract] | ||
Economic life of product | 3 years | |
Additions | $ 105 | $ 29 |
Capitalized software amortization | $ 118 | $ 117 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | |
Goodwill and Intangible Assets [Abstract] | ||
Number of operating segments | Segment | 2 | |
Goodwill | $ | $ 8,431 | $ 8,431 |
Fair Value of Financial Instr50
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Assets and liabilities measured at fair value [Abstract] | |||
Money market funds | $ 2,780 | $ 3,240 | |
Foreign exchange contracts - Assets | 83 | 201 | |
Total assets | 2,863 | 3,441 | |
Liability awards | (272) | (242) | |
Contingent consideration | (1,701) | ||
Total liabilities | (272) | (1,943) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance, January 1, 2017 | 1,701 | ||
Payments made on contingent liabilities | (1,701) | ||
Change in fair value | 0 | $ (254) | |
Balance, March 31, 2017 | 0 | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Assets and liabilities measured at fair value [Abstract] | |||
Money market funds | 2,780 | 3,240 | |
Foreign exchange contracts - Assets | 0 | 0 | |
Total assets | 2,780 | 3,240 | |
Contingent consideration | 0 | ||
Total liabilities | 0 | 0 | |
Significant Other Observable Inputs (Level 2) [Member] | |||
Assets and liabilities measured at fair value [Abstract] | |||
Money market funds | 0 | 0 | |
Foreign exchange contracts - Assets | 83 | 201 | |
Total assets | 83 | 201 | |
Liability awards | (272) | (242) | |
Contingent consideration | 0 | ||
Total liabilities | (272) | (242) | |
Significant Unobservable Inputs (Level 3) [Member] | |||
Assets and liabilities measured at fair value [Abstract] | |||
Money market funds | 0 | 0 | |
Foreign exchange contracts - Assets | 0 | 0 | |
Total assets | 0 | 0 | |
Contingent consideration | (1,701) | ||
Total liabilities | $ 0 | $ (1,701) |
Derivative Instruments, Foreign
Derivative Instruments, Foreign Exchange Contracts (Details) - Foreign Exchange Contract [Member] ¥ in Millions, $ in Millions | 3 Months Ended | ||||
Mar. 31, 2018JPY (¥) | Mar. 31, 2018AUD ($) | Dec. 31, 2016JPY (¥) | Dec. 31, 2016EUR (€) | Dec. 31, 2016AUD ($) | |
Derivative [Line Items] | |||||
Foreign exchange contract outstanding | ¥ 162.5 | $ 0.2 | ¥ 162.5 | € 24,000 | $ 0.2 |
Expiration date of contract | Dec. 31, 2018 |
Derivative Instruments, Fair Va
Derivative Instruments, Fair Values Derivatives, Balance Sheet Location (Details) - Foreign Exchange Contract [Member] - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Estimated fair value of the contracts in the consolidated balance sheets [Abstract] | ||
Asset derivatives | $ 83 | $ 201 |
Liability derivatives | 272 | 242 |
Net fair value | 355 | 443 |
Prepaid Expenses and Other Current Assets [Member] | ||
Estimated fair value of the contracts in the consolidated balance sheets [Abstract] | ||
Asset derivatives | $ 83 | $ 201 |
Derivative Instruments, Gain (L
Derivative Instruments, Gain (Loss) On Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||
Foreign exchange contracts- change in fair value | $ (118) | $ (86) |
Remeasurement of related contract receivables, billings in excess of revenue earned, and subcontractor accruals | (38) | (74) |
(Loss) gain on derivative instruments, net | $ (156) | $ (160) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($)Quartershares | Mar. 31, 2017USD ($)Quartershares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 595,000 | $ 614,000 |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Requisite service period | 1 year | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Requisite service period | 3 years | |
Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 32,000 | $ (18,000) |
Granted time-based RSUs (in shares) | shares | 210,092 | 223,802 |
Aggregate fair value for time-based RSUs | $ 682,799 | $ 783,000 |
Number of quarters RSU's will vest quarterly | Quarter | 8 | 8 |
Period in which RSU's will vest annually in equal amounts | 3 years | 3 years |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)Letter | May 11, 2018USD ($) | Dec. 31, 2017USD ($) | |
Line of Credit Facility [Line Items] | |||
Principal amount of the line of credit | $ 5 | ||
Citizen's Bank [Member] | |||
Line of Credit Facility [Line Items] | |||
Number of letters of credit | Letter | 2 | ||
Citizen's Bank [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility term | 3 years | ||
Principal amount of the line of credit | $ 5 | ||
Percentage of letter of credit fees per annum | 1.25% | ||
Percentage of borrowing base equal to eligible accounts receivable | 80.00% | ||
Outstanding letter of credit balance | $ 0 | ||
Number of letters of credit | Letter | 2 | ||
Letters of credit, amount outstanding | $ 0.7 | ||
Line of credit facility, remaining borrowing capacity | $ 4.3 | ||
Citizen's Bank [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, basis spread on variable rate | 2.25% | ||
BB&T Bank [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Number of letters of credit | Letter | 2 | ||
Letters of credit, amount outstanding | $ 0.6 | ||
Restricted cash and cash equivalents | $ 0.6 | $ 1 |
Product Warranty (Details)
Product Warranty (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Product warranty provision [Abstract] | |
Warranty terms for SDB contracts - Min | 1 year |
Warranty terms for SDB contracts - Max | 2 years |
Accrued warranty, current | $ 1,186 |
Accrued warranty, noncurrent | 697 |
Activities in product warranty account [Abstract] | |
Balance, January 1, 2017 | 1,953 |
Warranty provision | 28 |
Warranty claims | (103) |
Currency adjustment | 5 |
Balance, March 31, 2017 | $ 1,883 |
Revenue (Details)
Revenue (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 22,895,000 | $ 16,342,000 | |
Revenue, Remaining Performance Obligation | $ 35,570,000 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months | ||
Contract with Customer, Asset and Liability [Abstract] | |||
Contract with Customer, Liability, Current | $ 12,592,000 | $ 14,543,000 | |
Contract with Customer, Liability, Revenue Recognized | 5,115,000 | ||
Contract with Customer, Performance Obligation Satisfied in Previous Period | 0 | ||
Performance Improvement Solutions [Member] | System Design and Build [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 7,495,000 | 7,319,000 | |
Performance Improvement Solutions [Member] | Software [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 869,000 | 456,000 | |
Performance Improvement Solutions [Member] | Training and Consulting Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,537,000 | 1,895,000 | |
Nuclear Industry Training and Consulting [Member] | Training and Consulting Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 12,994,000 | $ 6,672,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Taxes [Abstract] | ||
(Benefit) provision for income taxes | $ 259 | $ 73 |
Effective tax rate | (20.90%) | (37.80%) |
Minimum [Member] | ||
Income Tax Examination [Line Items] | ||
Probability of uncertain tax position to be recognized | 50.00% | |
Percentage of tax position realized upon ultimate settlement | 50.00% | |
Sweden [Member] | Minimum [Member] | ||
Income Tax Examination [Line Items] | ||
Income tax examination, year under examination | 2,011 | |
China [Member] | Minimum [Member] | ||
Income Tax Examination [Line Items] | ||
Income tax examination, year under examination | 2,014 | |
India [Member] | Minimum [Member] | ||
Income Tax Examination [Line Items] | ||
Income tax examination, year under examination | 2,015 | |
UK [Member] | Minimum [Member] | ||
Income Tax Examination [Line Items] | ||
Income tax examination, year under examination | 2,015 | |
Federal [Member] | Minimum [Member] | ||
Income Tax Examination [Line Items] | ||
Income tax examination, year under examination | 1,997 | |
State [Member] | Minimum [Member] | ||
Income Tax Examination [Line Items] | ||
Income tax examination, year under examination | 1,997 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)Segment | Mar. 31, 2017USD ($) | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | ||
Number of reportable business segments | Segment | 2 | |
Corporate charge allocated to Training segment | $ 1,174 | $ 628 |
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Total revenue | 22,895 | 16,342 |
Change in fair value of contingent consideration, net | 0 | (254) |
Operating income (loss) | (1,128) | (57) |
Interest income, net | 22 | 27 |
Loss on derivative instruments, net | (156) | (160) |
Other income (expense), net | 25 | (3) |
Income (loss) before income taxes | (1,237) | (193) |
Performance Improvement Solutions [Member] | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Total revenue | 9,901 | 9,670 |
Operating income (loss) | (790) | (110) |
Nuclear Industry Training and Consulting [Member] | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Total revenue | 12,994 | 6,672 |
Operating income (loss) | $ (338) | $ 307 |
Maximum [Member] | ||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | ||
Contract term | 2 years |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | May 11, 2018USD ($)Employees | Dec. 31, 2017USD ($) |
Subsequent Event [Line Items] | ||
Percentage of revenue from nuclear industry | 85.00% | |
Business Combination, Consideration Transferred, Liabilities Incurred | $ 10.3 | |
Line of Credit Facility, Expiration Period | 5 years | |
Principal amount of the line of credit | $ 5 | |
Long-term Debt, Gross | 25 | |
True North [Member] | ||
Subsequent Event [Line Items] | ||
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period | $ 11 | |
Cash purchase price | 9.8 | |
Cash consideration in escrow | 1.5 | |
Cash Payment to sellers on acquisition date | $ 8.3 | |
Number of employees of the acquiree | Employees | 60 | |
Maximum [Member] | ||
Subsequent Event [Line Items] | ||
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 27500.00% | |
Minimum [Member] | ||
Subsequent Event [Line Items] | ||
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 20000.00% |
Uncategorized Items - gvp-20180
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 22,887,000 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 20,071,000 |