Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | GSE SYSTEMS INC | |
Entity Central Index Key | 0000944480 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 20,007,469 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Address, State or Province | MD |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 8,606 | $ 12,123 |
Contract receivables, net | 16,566 | 21,077 |
Prepaid expenses and other current assets | 1,836 | 1,800 |
Total current assets | 27,008 | 35,000 |
Equipment, software, and leasehold improvements | 5,627 | 5,293 |
Accumulated depreciation | (4,525) | (4,228) |
Equipment, software, and leasehold improvements, net | 1,102 | 1,065 |
Software development costs, net | 648 | 615 |
Goodwill | 16,709 | 13,170 |
Intangible assets, net | 7,960 | 6,080 |
Deferred tax assets | 6,635 | 5,461 |
Operating lease - right of use assets, net | 3,720 | 0 |
Other assets | 77 | 49 |
Total assets | 63,859 | 61,440 |
Current liabilities: | ||
Current portion of long-term debt, net of debt issuance costs and original issue discount | 4,778 | 1,902 |
Accounts payable | 1,174 | 1,307 |
Accrued expenses | 1,820 | 2,646 |
Accrued compensation | 2,904 | 3,649 |
Billings in excess of revenue earned | 3,870 | 10,609 |
Accrued warranty | 1,185 | 981 |
Income taxes payable | 1,368 | 1,176 |
Other current liabilities | 1,078 | 60 |
Total current liabilities | 18,177 | 22,330 |
Long-term debt, less current portion, net of debt issuance costs and original issue discount | 14,968 | 6,610 |
Operating lease liabilities | 3,121 | 0 |
Other liabilities | 1,070 | 1,371 |
Total liabilities | 37,336 | 30,311 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock $0.01 par value, 2,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock $0.01 par value; 60,000,000 shares authorized, 21,788,525 shares issued, 20,189,614 shares outstanding as of September 30, 2019; 60,000,000 shares authorized, 21,485,445 shares issued, 19,886,534 shares outstanding as of December 31, 2018 | 218 | 214 |
Additional paid-in capital | 79,138 | 78,118 |
Accumulated deficit | (48,050) | (42,569) |
Accumulated other comprehensive loss | (1,784) | (1,635) |
Treasury stock at cost, 1,598,911 shares on September 30, 2019 and December 31, 2018 | (2,999) | (2,999) |
Total stockholders' equity | 26,523 | 31,129 |
Total liabilities and stockholders' equity | $ 63,859 | $ 61,440 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
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) | 60,000,000 | 60,000,000 |
Common stock, shares issued (in shares) | 21,788,525 | 21,485,445 |
Common stock, shares outstanding (in shares) | 20,189,614 | 19,886,534 |
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 | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||||
Revenue | $ 20,031 | $ 21,801 | $ 65,683 | $ 69,394 |
Cost of revenue | 15,358 | 16,380 | 50,407 | 52,735 |
Gross profit | 4,673 | 5,421 | 15,276 | 16,659 |
Operating expenses: | ||||
Selling, general and administrative | 3,465 | 4,366 | 12,231 | 13,686 |
Research and development | 130 | 247 | 526 | 765 |
Restructuring charges | 740 | 70 | 742 | 1,177 |
Loss on impairment | 0 | 0 | 5,464 | 0 |
Depreciation | 107 | 132 | 300 | 411 |
Amortization of definite-lived intangible assets | 494 | 632 | 1,550 | 1,094 |
Total operating expenses | 4,936 | 5,447 | 20,813 | 17,133 |
Operating loss | (263) | (26) | (5,537) | (474) |
Interest (expense), net | (288) | (114) | (812) | (153) |
Loss on derivative instruments, net | (61) | (59) | (69) | (306) |
Other income (expense), net | 59 | (5) | 62 | 24 |
Loss before income taxes | (553) | (204) | (6,356) | (909) |
Provision (benefit) for income taxes | 568 | 314 | (874) | 124 |
Net loss | $ (1,121) | $ (518) | $ (5,482) | $ (1,033) |
Basic loss per common share (in dollars per share) | $ (0.06) | $ (0.03) | $ (0.27) | $ (0.05) |
Diluted loss per common share (in dollars per share) | $ (0.06) | $ (0.03) | $ (0.27) | $ (0.05) |
Weighted average shares outstanding - Basic (in shares) | 20,007,469 | 19,786,888 | 20,021,829 | 19,620,207 |
Weighted average shares outstanding - Diluted (in shares) | 20,007,469 | 19,786,888 | 20,021,829 | 19,620,207 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME [Abstract] | ||||
Net loss | $ (1,121) | $ (518) | $ (5,482) | $ (1,033) |
Cumulative translation adjustment | (89) | (31) | (149) | (258) |
Comprehensive loss | $ (1,210) | $ (549) | $ (5,631) | $ (1,291) |
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 |
Balance at Dec. 31, 2017 | $ 210 | $ 76,802 | $ (42,870) | $ (1,471) | $ (2,999) | $ 29,672 |
Balance (in shares) at Dec. 31, 2017 | 21,024,395 | (1,598,911) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 1,370 | 1,370 | ||||
Common stock issued for options exercised (in shares) | 213,763 | |||||
Common stock issued for options exercised | $ 2 | 37 | 39 | |||
Common stock issued for RSUs vested (in shares) | 193,856 | |||||
Common stock issued for RSUs vested | $ 2 | (2) | 0 | |||
Shares withheld to pay taxes | (331) | (331) | ||||
Foreign currency translation adjustment | (258) | (258) | ||||
Net income (loss) | (1,033) | (1,033) | ||||
Balance at Sep. 30, 2018 | $ 214 | 77,876 | (43,248) | (1,729) | $ (2,999) | 30,114 |
Balance (in shares) at Sep. 30, 2018 | 21,432,014 | (1,598,911) | ||||
Balance at Jun. 30, 2018 | $ 213 | 77,611 | (42,730) | (1,698) | $ (2,999) | 30,397 |
Balance (in shares) at Jun. 30, 2018 | 21,310,806 | (1,598,911) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 402 | 402 | ||||
Common stock issued for options exercised (in shares) | 84,250 | |||||
Common stock issued for options exercised | $ 0 | (56) | (56) | |||
Common stock issued for RSUs vested (in shares) | 36,958 | |||||
Common stock issued for RSUs vested | $ 1 | 0 | 1 | |||
Shares withheld to pay taxes | (81) | (81) | ||||
Foreign currency translation adjustment | (31) | (31) | ||||
Net income (loss) | (518) | (518) | ||||
Balance at Sep. 30, 2018 | $ 214 | 77,876 | (43,248) | (1,729) | $ (2,999) | 30,114 |
Balance (in shares) at Sep. 30, 2018 | 21,432,014 | (1,598,911) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of adopting ASC 606 | 655 | 655 | ||||
Balance at Dec. 31, 2018 | $ 214 | 78,118 | (42,569) | (1,635) | $ (2,999) | 31,129 |
Balance (in shares) at Dec. 31, 2018 | 21,485,445 | (1,598,911) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 1,238 | 1,238 | ||||
Common stock issued for options exercised (in shares) | 9,011 | |||||
Common stock issued for options exercised | $ 1 | 89 | 90 | |||
Common stock issued for RSUs vested (in shares) | 294,000 | |||||
Common stock issued for RSUs vested | $ 3 | (3) | 0 | |||
Shares withheld to pay taxes | (304) | (304) | ||||
Foreign currency translation adjustment | (149) | (149) | ||||
Net income (loss) | (5,482) | (5,482) | ||||
Balance at Sep. 30, 2019 | $ 218 | 79,138 | (48,050) | (1,784) | $ (2,999) | 26,523 |
Balance (in shares) at Sep. 30, 2019 | 21,788,525 | (1,598,911) | ||||
Balance at Jun. 30, 2019 | $ 217 | 79,028 | (46,930) | (1,695) | $ (2,999) | 27,622 |
Balance (in shares) at Jun. 30, 2019 | 21,698,635 | (1,598,911) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 169 | 169 | ||||
Common stock issued for options exercised (in shares) | 0 | |||||
Common stock issued for options exercised | $ 0 | 15 | 15 | |||
Common stock issued for RSUs vested (in shares) | 89,890 | |||||
Common stock issued for RSUs vested | $ 1 | (1) | 0 | |||
Shares withheld to pay taxes | (73) | (73) | ||||
Foreign currency translation adjustment | (89) | (89) | ||||
Net income (loss) | (1,121) | (1,121) | ||||
Balance at Sep. 30, 2019 | $ 218 | $ 79,138 | $ (48,050) | $ (1,784) | $ (2,999) | $ 26,523 |
Balance (in shares) at Sep. 30, 2019 | 21,788,525 | (1,598,911) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (5,482) | $ (1,033) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Loss on impairment | 5,464 | 0 |
Depreciation | 300 | 411 |
Amortization of definite-lived intangible assets | 1,550 | 1,094 |
Amortization of capitalized software development costs | 293 | 353 |
Change in fair value of contingent consideration | (1,200) | 0 |
Stock-based compensation expense | 1,150 | 1,535 |
Bad debt expense | 48 | 146 |
Loss on derivative instruments, net | 69 | 306 |
Deferred income taxes | (1,276) | 74 |
Gain on sale of equipment, software, and leasehold improvements | (7) | 0 |
Changes in assets and liabilities: | ||
Contract receivables, net | 7,314 | (3,165) |
Prepaid expenses and other assets | 438 | 948 |
Accounts payable, accrued compensation, and accrued expenses | (2,400) | (965) |
Billings in excess of revenue earned | (6,777) | (5,800) |
Accrued warranty | 102 | (256) |
Other liabilities | 82 | (8) |
Cash used in operating activities | (332) | (6,360) |
Cash flows from investing activities: | ||
Proceeds from sale of equipment, software and leasehold improvements | 8 | 0 |
Purchase of equipment, software and leasehold improvements | (127) | (510) |
Capitalized software development costs | (326) | (325) |
Acquisition of True North Consulting, net of cash acquired | 0 | (9,635) |
Acquisition of DP Engineering, net of cash acquired | (13,521) | 0 |
Cash used in investing activities | (13,966) | (10,470) |
Cash flows from financing activities: | ||
Proceeds from issuance of long-term debt | 14,263 | 10,154 |
Repayment of long-term debt | (3,029) | (1,164) |
Proceeds from issuance of common stock | 90 | 39 |
Contingent consideration payments to former owners of Hyperspring, LLC | 0 | (1,701) |
Shares withheld to pay taxes | (304) | (331) |
Cash provided by financing activities | 11,020 | 6,997 |
Effect of exchange rate changes on cash | (239) | (398) |
Net decrease in cash, cash equivalents, and restricted cash | (3,517) | (10,231) |
Cash, cash equivalents, and restricted cash, beginning balance | 12,123 | 20,071 |
Cash, cash equivalents, and restricted cash, ending balance | $ 8,606 | $ 9,840 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of Presentation GSE Systems, Inc. is a leading provider of professional and technical engineering, staffing services, and simulation software to clients in the power and process industries. References in this report to “GSE,” the “Company,” “we” and “our” are to GSE Systems and its subsidiaries, collectively. The consolidated interim financial statements included herein have been prepared by GSE 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 accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The accompanying balance sheet data for the year ended December 31, 2018 was derived from our audited financial statements, but it does not include all disclosures required by U.S. GAAP. 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, 2018, filed with the Securities and Exchange Commission on March 27, 2019. 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, product warranties, valuation of goodwill and intangible assets acquired including the determination of fair value in impairment tests, valuation of long-lived assets to be disposed of, valuation of contingent consideration issued in business acquisitions, valuation of stock-based compensation awards, and the recoverability of deferred tax assets. Actual results could differ from these estimates and those differences could be material. Going Concern Consideration The Company is currently in compliance with its debt covenants; however, it is probable, based on our forecasts, that we will not be in compliance with these covenants at future measurement dates in the following twelve-month period. We do have the ability to cure one of the two financial covenants, the leverage ratio, by paying down an amount of debt necessary to meet the leverage ratio and we are considering taking this action. Regarding the fixed charge coverage ratio, we anticipate reducing fixed charges, namely excess real estate at the DP Engineering office and other space to be made idle. We will be working with Citizens Bank, National Association (the Bank) to obtain a modification of our covenant requirements that would, based on our projections, provide forecasted compliance with the covenants. If at such future time a covenant violation were to occur and if we are unable to agree to amended financial covenant measures with the Bank before such time or obtain a waiver in the event of subsequent non-compliance, the Company would likely not be able to repay the entirety of the outstanding debt in the event the Bank were to call the debt, thus leading to substantial doubt about the Company’s ability to continue as a going concern until such amendments or waivers are in place. Based on our cash flow projection, we believe our funds from operations and availability of cash provide us with sufficient funds to cure one of the forecasted violations if we choose to; have sufficient cash to fund our on-going operations and make our scheduled debt repayments in the normal course of business. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements Accounting pronouncements recently adopted In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") No. 2016-02, Leases (Topic 842), The Company adopted the new standard using the modified retrospective approach effective on January 1, 2019. The Company's adoption included lease codification improvements that were issued by the FASB through June 2019. The FASB made available several practical expedients in adopting the new lease accounting guidance. The Company elected the package of practical expedients permitted under the transition guidance within the amended guidance, which among other things, allowed registrants to carry forward historical lease classification. The Company elected the practical expedient that allows the combination of both lease and non-lease components as a single component and account for it as a lease for all classes of underlying assets. The Company elected not to apply the new guidance to short term leases with an initial term of twelve months or less. The Company recognizes those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. The Company elected to use a single discount rate for a portfolio of leases with reasonably similar characteristics. The most significant impact was the recognition of ROU assets and related lease liabilities for operating leases on the consolidated balance sheets. The Company recognized ROU assets and related lease liabilities of $2.7 million and $3.0 million respectively, related to operating lease commitments, as of January 1, 2019. The operating lease ROU asset represents the lease liability, plus any lease payments made at or before the commencement date, less any lease incentives received. The new guidance did not have a material impact on the Company's cash flows or results of operations. See Note 16 of the consolidated financial statements. Accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment |
Basic and Diluted (Loss) Income
Basic and Diluted (Loss) Income per Common Share | 9 Months Ended |
Sep. 30, 2019 | |
Basic and Diluted (Loss) Income per Common Share [Abstract] | |
Basic and Diluted (Loss) Income per Common Share | 3. Basic and Diluted (Loss) Income per Common Share Basic (loss) income per share is computed by dividing net (loss) income by weighted average number of outstanding shares of common stock outstanding for the period. Diluted net (loss) income per share adjusts the weighted average shares outstanding for the potential dilution that could occur if outstanding vested stock options were exercised and restricted stock units ("RSU") were vested, unless the impact of potential dilutive common shares outstanding are anti-dilutive. Since we experienced a net loss in each period presented, basic and diluted net loss per share are the same. The diluted loss per share, in each period present, excludes the impact of potentially dilutive securities since they would have an anti-dilutive effect. 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 Nine months ended September 30, September 30, 2019 2018 2019 2018 Numerator: Net loss $ (1,121 ) $ (518 ) $ (5,482 ) $ (1,033 ) Denominator: Weighted-average shares outstanding for basic loss per share 20,007,469 19,786,888 20,021,829 19,620,207 Effect of dilutive securities: Stock options and restricted stock units - - - - Adjusted weighted-average shares outstanding and assumed conversions for diluted loss per share 20,007,469 19,786,888 20,021,829 19,620,207 Shares related to dilutive securities excluded because inclusion would be anti-dilutive 578,676 713,024 397,131 645,714 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Acquisitions [Abstract] | |
Acquisitions | 4. Acquisitions 2019 Acquisition DP Engineering On February 15, 2019, through its wholly-owned subsidiary Performance Solutions, the Company entered into a membership interest purchase agreement with Steven L. Pellerin, Christopher A. Davenport, and DP Engineering (the “DP Engineering Purchase Agreement”), to purchase 100% of the membership interests in DP Engineering for $13.5 million. The purchase price is subject to customary pre- and post-closing working capital adjustments plus an additional earn-out amount not to exceed $5 million, potentially payable in 2020 and 2021 depending on DP Engineering’s satisfaction of certain targets for adjusted earnings before interest, tax, depreciation and amortization ("EBITDA") in calendar years 2019 and 2020, respectively. The acquisition was completed through the drawdown of $14.3 million (including transaction costs) of the term loan. An escrow of approximately $1.7 million was funded at the closing and is available to GSE to satisfy indemnification claims arising within 18 months after the closing. DP Engineering is a provider of value-added technical engineering solutions and consulting services to nuclear power plants with an emphasis on preparation and implementation of design modifications during plant outages, which is in line with our Performance segment. The Company's allocation of the purchase price remains preliminary and the net assets are subject to adjustments within the measurement period, which is not to exceed one year from the acquisition date. Based on preliminary forecasted adjusted EBITDA of DP Engineering for the years 2019 and 2020, as of the acquisition date, the estimated fair value of the total earn-out amount was $1.2 million and was recorded as contingent consideration. Subsequent to the acquisition, it was determined that the conditions related to the contingent consideration would not be met and hence $1.2 million was taken to income in the first quarter of 2019. The following table summarizes the calculation of adjusted purchase price as of the acquisition date (in thousands): Base purchase price per agreement $ 13,500 Pre closing working capital adjustment 155 Fair value of contingent consideration 1,200 Total purchase price $ 14,855 The following table summarizes the consideration paid to acquire DP Engineering and the preliminary fair value of the assets acquired and liabilities assumed at the date of the transaction. Due to the recent completion of the acquisition, the Company recorded the assets acquired and liabilities assumed at their preliminary estimated fair value. As of September 30, 2019, the Company had not finalized the determination of the fair value allocated to various assets and liabilities, including, but not limited to, contract receivables, prepaid expenses and other current assets, intangible assets, accounts payable, accrued expenses, contingent consideration, accrued compensation and the residual amount allocated to goodwill. The following amounts except for cash are all reflected in the consolidated statement of cash flows within the "Acquisition of DP Engineering, net of cash acquired" line caption. ( in thousands Total purchase price $ 14,855 Purchase price allocation: Cash 134 Contract receivables 2,934 Prepaid expenses and other current assets 209 Property, and equipment, net 210 Intangible assets 6,798 Other assets 1,806 Accounts payable and accrued expenses (1,375 ) Other liabilities (1,494 ) Total identifiable net assets 9,222 Goodwill 5,633 Net assets acquired $ 14,855 The fair value of the assets acquired includes gross trade receivables of $2.9 million, of which the Company has collected in full. GSE did not acquire any other class of receivable as a result of the acquisition of DP Engineering. The goodwill is primarily attributable to value-added technical engineering solutions and consulting services to nuclear power plants with an emphasis on preparation and implementation of design modification during plant outages, the workforce of the acquired business and the significant synergies expected to arise after the acquisition of DP Engineering. The total amount of goodwill is expected to be tax deductible. All of the $5.6 million of goodwill was assigned to our Performance segment. As discussed above, the goodwill amount is provisional pending receipt of the final valuations of various assets and liabilities and is subject to adjustments within the measurement period, which is not to exceed one year from the acquisition date. The Company identified other intangible assets of $6.8 million, including customer contracts and relationships, tradename, and non-compete agreements, with amortization periods of five years to fifteen years. Approximately one week following our acquisition of DP Engineering, an adverse event occurred at one of DP Engineering’s major customer's location that affected plant operations. This incident adversely impacted the relationship between DP Engineering and its customer. The Company determined this represented a triggering event requiring an interim assessment for impairment. As a result of the impairment analysis, we recognized the impairment charges of $2.1 million on goodwill and $3.4 million on definite-lived intangible assets related to the acquisition of DP Engineering during the quarter ended March 31, 2019. On August 6, 2019, as a follow on to the Notice of Suspension, the Company received a Notice of Termination from this customer, notifying the Company that they were terminating their Engineer of Choice consulting service agreement with DP Engineering. Please see Note 8 for further analysis on the carrying amount change due to impairment on goodwill and definite-lived intangible assets during the nine months ended September 30, 2019. Additionally, also see Item 2. Management’s Discussion and Analysis for further discussion regarding the termination of Engineer of Choice of DP Engineering’s major customer. 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 15 $ 4,898 Tradename 10 1,172 Non-compete agreements 5 728 Total $ 6,798 DP Engineering contributed revenue of $6.5 million to GSE for the period from February 15, 2019 to September 30, 2019. 2018 Acquisition True North On May 11, 2018, GSE, through its wholly-owned subsidiary Performance Solutions, entered into a membership interest purchase agreement with Donald R. Horn, Jenny C. Horn, and True North Consulting LLC (the "True North Purchase Agreement") to purchase 100% of the membership interests in True North Consulting LLC ("True North") for $9.75 million. The purchase price was subject to customary pre- and post-closing working capital adjustments, resulting in total consideration of $9.9 million. The True North Purchase Agreement contains customary representations, warranties, covenants, and indemnification provisions subject to certain limitations. An escrow of $1.5 million was funded from the cash paid to the sellers True North is a provider of technical engineering solutions to nuclear and fossil fuel power plants with an emphasis on regulatory-driven ASME code programs. Located in Montrose, Colorado, True North is a well-regarded service provider to leading companies in the power industry. The acquisition of True North is expected to broaden our engineering services offering, expand our relationships with several of the largest nuclear energy providers in the United States, and add a highly specialized, complementary talent pool to our employee base. The following table summarizes the consideration paid to acquire True North and the preliminary fair value of the assets acquired and liabilities assumed at the date of the transaction. The Company recorded the assets acquired and liabilities assumed at their preliminary estimated fair value. As of September 30, 2019, the Company had finalized the determination of the fair value allocated to various assets and liabilities, including, but not limited to, contract receivables, prepaid expenses and other current assets, intangible assets, accounts payable, accrued expenses, accrued compensation and the residual amount allocated to goodwill. ( in thousands Total purchase price $ 9,915 Purchase price allocation: Cash 306 Contract receivables 1,870 Prepaid expenses and other current assets 8 Property, and equipment, net 1 Intangible assets 5,088 Accounts payable, accrued expenses (1,744 ) Accrued compensation (353 ) Total identifiable net assets 5,176 Goodwill 4,739 Net assets acquired $ 9,915 The fair value of the assets acquired includes gross trade receivables of $1.9 million, of which the Company has collected in full as of September 30, 2019. GSE did not acquire any other class of receivable as a result of the acquisition of True North. The goodwill is primarily attributable to a broader engineering service offering to new and existing customers, the workforce of the acquired business and the significant synergies expected to arise after the acquisition of True North. The total amount of goodwill is tax deductible. All of the $4.7 million of goodwill was assigned to our Performance segment. The Company identified other intangible assets of $5.1 million, including customer relationships, tradename, non-compete agreements, and alliance agreements, with amortization periods of four years to fifteen years. The fair value of the intangible assets is finalized per final valuations for these assets. 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 15 $ 3,758 Tradename 10 582 Non-compete agreements 4 221 Alliance agreements 5 527 Total $ 5,088 Unaudited Pro Forma Financial Information The unaudited pro forma financial information in the table below summarizes the combined results of operations for GSE, True North and DP Engineering as if the business combinations had occurred on January 1, 2018. Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 ( unaudited and in thousands Revenue $ 20,031 $ 26,932 $ 68,667 $ 89,679 Net loss (919 ) (1,204 ) (5,371 ) (1,509 ) The pro forma financial information for all periods presented has been calculated after applying GSE's accounting policies and has also included pro forma adjustments resulting from these acquisitions, including amortization charges of the intangible assets identified from these acquisitions, interest expenses related to the financing transaction in connection with the acquisition of DP Engineering, and the related tax effects as if aforementioned companies were combined as of January 1, 2018. For the nine months ended September 30, 2019, the Company has incurred $0.6 million of selling, general and administrative costs related to the acquisition of DP Engineering. Due to a triggering event described in Note 8, an impairment test was conducted, which resulted in substantially writing down the estimated fair value of goodwill and some of the definite-lived intangible assets initially recognized upon the acquisition. These expenses are included in general and administrative expense on GSE's consolidated statements of operations and are reflected in pro forma loss for the nine months ended September 30, 2019, in the table above. For the nine months ended September 30, 2018, the Company has incurred $0.5 million of selling, general and administrative costs related to the acquisition of True North. These expenses are included in general and administrative expense on GSE's consolidated statements of operations and are reflected in pro forma loss for the nine months ended September 30, 2018, in the table above. The pro forma financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had been completed on January 1, 2018, nor is it intended to be an indication of future operating results. |
Restructuring Activities
Restructuring Activities | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring Activities [Abstract] | |
Restructuring Activities | 5. Restructuring Activities International Restructuring On December 27, 2017, the board of GSE 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 United Kingdom (UK). As a result, the Company closed 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, 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 eliminated approximately 40 positions since 2017 due to these changes, primarily in Europe and India, and will continue to undertake other cost-savings measures. The international restructuring plan is expected to be completed by the end of 2019. As a result of these efforts, GSE expects to record a total restructuring charge of approximately $2.2 million, primarily related to the international workforce reductions, contract termination costs and asset write-offs due to the exit activities. As of September 30, 2019, we had recorded total restructuring charges of $2.0 million since 2017. We incurred $2,000 of costs during the nine months ended September 30, 2019. We recognized $1.3 million of restructuring cost for the year ended December 31, 2018. In addition to the restructuring costs recognized to date, the Company has an estimated $1.3 million of cumulative translation adjustments that will be charged against net loss and an estimated $1.0 million of tax benefits that will be realized upon liquidation of these foreign entities. GSE expects to recognize the remaining restructuring costs, currency translation adjustments and tax benefits by the end of 2019. For the nine months ended September 30, 2019, we made payments related to our restructuring for employee termination benefits and other legal expenses in the amount of $54,000 that had been previously accrued. DP Engineering Restructuring During the third quarter of 2019, the Company implemented a restructuring plan as a result of the work suspension of DP Engineering's largest customer and subsequent notification on August 6, 2019 that the Engineer of Choice contract was being terminated. Accordingly, the Company took the necessary measures to reduce DP’s workforce by approximately 12 FTE’s and in addition terminated one of its office leases early resulting in one-time costs of $293,000 being paid in the quarter. This reduction in force aligns the workforce to the current level of business going forward. Collectively, for the nine months ended September 30, 2019, the Company recorded restructuring charges of approximately $0.7 million, of which $0.3 million related to DP Engineering severance and lease termination and $0.4 million related to an executive departure related to the suspension of the Company’s acquisition strategy. |
Contingent Consideration
Contingent Consideration | 9 Months Ended |
Sep. 30, 2019 | |
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 In connection with the acquisition of DP Engineering on February 15, 2019, the Company recognized the estimated fair value of contingent consideration for $1.2 million. During the nine months ended September 30, 2019, as a result of the triggering event described in Note 8, an impairment test was conducted on DP Engineering's goodwill and definite-lived intangible assets and the Company determined the $1.2 million of contingent consideration recognized upon acquisition of DP Engineering has reduced to zero since the related earn-out payment is no longer expected to be paid. We have recorded this reduction as an offset to selling, general and administrative expenses in unaudited consolidated statements of operations. There was no contingent liability as of September 30, 2019. |
Contract Receivables
Contract Receivables | 9 Months Ended |
Sep. 30, 2019 | |
Contract Receivables [Abstract] | |
Contract Receivables | 7. Contract Receivables Contract receivables represent the Company's unconditional rights to consideration 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) September 30, December 31, 2019 2018 Billed receivables $ 8,281 $ 15,998 Unbilled receivables 8,754 5,506 Allowance for doubtful accounts (469 ) (427 ) Total contract receivables, net $ 16,566 $ 21,077 Management reviews collectability of receivables periodically and records an allowance for doubtful accounts to reduce our receivables to their net realizable value when it is probable that the Company will not be able to collect all amounts according to the contractual terms of the receivable. The allowance for doubtful accounts is based on historical trends of past due accounts, write-offs, specific identification and review of customer accounts. During the nine months ended September 30, 2019 and 2018, the Company did not record any allowances for doubtful accounts. The minor fluctuation on the balance of allowances for doubtful accounts was due to foreign currency exchange rates. During October 2019, the Company invoiced $6.3 million of the September 30, 2019 unbilled amounts. As of September 30, 2019, the Company had one customer that accounted for 26.3% its consolidated contract receivables. As of December 31, 2018, the Company had one customer that accounted for 16.8% of its consolidated contract receivables. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 8 Goodwill and Intangible Assets Intangible Assets Subject to Amortization 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 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. As discussed in Note 4, we recognized definite-lived intangible assets of $6.8 million upon acquisition of DP Engineering on February 15, 2019, including customer contracts and relationships, trademarks and non-compete agreements, with amortization periods of 5 to 15 years. Amortization of our definite-lived intangible assets is recognized on a straight-line basis over the estimate useful life of the associated assets. Following the February 23, 2019 event occurring at a DP Engineering customer location and subsequent receipt of the Notice of Suspension on February 28, 2019, the Company concluded that DP Engineering's relationship with it's largest customer has been adversely impacted. The DP Engineering customer contracts and relationships were the major component of the definite-lived intangible assets recognized in connection with the acquisition of DP Engineering. Accordingly, the Company determined that a triggering event had occurred requiring an interim assessment of whether a potential impairment of definite-lived intangible asset impairment test was necessary. Therefore, the impairment test of the definite-lived intangible assets recognized upon the acquisition of DP Engineering was also conducted according to ASC 350, Intangibles-Goodwill and other The interim impairment test was based on the present value of revised cash flow projected for five to fifteen years. The result of the impairment test indicated that the current estimated fair value of noted definite-lived intangible assets had declined below their initial estimated fair value. As a result, the Company recognized an impairment charge of $3.4 million at March 31, 2019. The fair value of definite-lived intangible assets recognized upon the acquisition of DP Engineering is still provisional and subject to further measurement period adjustment according to purchase price allocation rules. The impairment charge of $3.4 million on definite-lived intangible assets was recorded within "Loss on impairment" in our consolidated statements of operations. Due to the August 6 th Changes in the gross carrying amount, accumulated amortization, addition and impairment of definite-lived intangible assets from December 31, 2018 through September 30, 2019 were as following: ( in thousands For the Nine Months Ended September 30, 2019 Beginning Gross Accumulated Addition Impairment Net Carrying Amount Amortization Amortized intangible assets: Customer relationships $ 6,833 $ (3,411 ) $ 4,898 $ (3,370 ) $ 4,950 Trade names 1,295 (621 ) 1,172 - 1,846 Developed technology 471 (471 ) - - - Non-contractual customer relationships 433 (433 ) - - - Noncompete agreement 221 (167 ) 728 - 782 Alliance agreement 527 (145 ) - - 382 Others 167 (167 ) - - - Total $ 9,947 $ (5,415 ) $ 6,798 $ (3,370 ) $ 7,960 (in thousands) As of December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Amortized intangible assets Customer relationships $ 6,831 $ (2,375 ) $ 4,456 Trade names 1,295 (318 ) 977 Developed technology 471 (471 ) - Non-contractual customer relationships 433 (433 ) - Noncompete agreements 221 (35 ) 186 Alliance agreement 527 (66 ) 461 Others 167 (167 ) - Total $ 9,945 $ (3,865 ) $ 6,080 Amortization expense related to definite-lived intangible assets totaled $0.5 million and $0.6 million for the three months ended September 30, 2019 and 2018, and $1.6 million and $1.1 million for the nine months ended September 30, 2019, and 2018, respectively. The following table shows the estimated amortization expense of the definite-lived intangible assets for the next five years and thereafter: (in thousands) Years ended December 31: 2019 (remainder) $ 495 2020 1,974 2021 1,471 2022 1,152 2023 868 Thereafter 2,000 Total $ 7,960 Goodwill 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). On February 15, 2019, we acquired DP Engineering (as described in Note 4) and preliminarily recorded goodwill and identified intangible assets as part of the acquisition. On February 23, 2019, an unexpected event occurred at one of DP Engineering's significant customers and all pending work for that customer was suspended pending a root cause analysis on February 28, 2019. While that analysis is now complete, and virtually all of the suspended projects have been restarted, the customer terminated the existing contract on August 6th 2019. The Company determined that the notice of suspension was a triggering event necessitating a goodwill impairment test. On May 10, 2019, the Company determined that a material impairment had occurred, requiring an assessment for impairment to be completed related to $5.6 million of goodwill recorded in the acquisition. The impairment test used an income-based approach with discounted cash flow method, and market-based approach including both guideline public company method and merger and acquisition method. The impairment test results indicated that the current estimated fair value of goodwill recorded from the acquisition of DP Engineering had declined below its initial estimated fair value at the acquisition date. As a result, the Company recognized an impairment charge of $2.1 million to write down the goodwill on DP Engineering. The fair value of goodwill recognized from the acquisition of DP Engineering is still provisional and subject to further measurement period adjustment based upon the preliminary purchase price allocation. The Company determined that the impact of the suspension of obtaining new contracts from that customer resulted in a material downward revision to DP Engineering's revenue and profitability forecasts when compared to the acquisition date valuation. The impairment charge on goodwill was recorded within "Loss on impairment" in our consolidated statements of operations. Due to the August 6 th Changes in the net carrying amount of goodwill from December 31, 2018 through September 30, 2019 were due to the acquisition of DP Engineering, and were comprised of the following items: ( in thousands Performance Improvement Solutions Nuclear Industry Training and Consulting Total Balance, January 1, 2019 $ 4,739 $ 8,431 $ 13,170 Acquisition 5,633 - 5,633 Dispositions - - - Goodwill impairment loss (2,094 ) - (2,094 ) Balance, September 30, 2019 $ 8,278 $ 8,431 $ 16,709 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | 9. 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. The Monte Carlo model was used to calculate the fair value of level 2 instrument liability award. The inputs used are current stock price, expected term, risk-free rate, number of trials, volatility and interest rates. 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. The contingent consideration was based on EBITDA. At September 30, 2019, and December 31, 2018, 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. As of September 30, 2019, the Company had four standby letters of credit totaling $1.2 million which represent performance bonds on four contracts. For the three and nine months ended September 30, 2019, 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 September 30, 2019. The following table presents assets and liabilities measured at fair value at September 30, 2019: (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 $ 375 $ - $ - $ 375 Foreign exchange contracts - 68 - 68 Total assets $ 375 $ 68 $ - $ 443 Liability awards $ - $ (18 ) $ - $ (18 ) Interest rate swap contract - (192 ) - (192 ) Total liabilities $ - $ (210 ) $ - $ (210 ) Money market funds at both September 30, 2019 and December 31, 2018 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, 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 $ 824 $ - $ - $ 824 Foreign exchange contracts - 43 - 43 Total assets $ 824 $ 43 $ - $ 867 Liability awards $ - $ (118 ) $ - $ (118 ) Interest rate swap contract - (103 ) - (103 ) Total liabilities $ - $ (221 ) $ - $ (221 ) The following table provides a roll-forward of the fair value of the contingent consideration categorized as Level 3 for the nine months ended September 30, 2019: (in thousands) Balance, January 1, 2019 $ - Issuance of contingent consideration in connection with acquisitions 1,200 Change in fair value (1,200 ) Balance, September 30, 2019 $ - |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments [Abstract] | |
Derivative Instruments | 10. Derivative Instruments In the normal course of business, our operations are exposed to fluctuations in foreign currency values and interest rate changes. We may seek to control a portion of these risks through a risk management program that includes the use of derivative instruments. Foreign Currency Risk Management 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 September 30, 2019, the Company had one foreign exchange contract outstanding of approximately 1.0 million Euro. The contract is set to expire in March 2020. At December 31, 2018, the Company had contracts outstanding of approximately 3.2 million Euro at fixed rates. Interest Rate Risk Management As discussed in Note 12, the Company entered into a term loan to finance the acquisition of True North in May 2018 and revised on June 28, 2019. The loan bears interest at adjusted one-month LIBOR plus a margin ranging between 2.00% and 2.75% depending on the overall leverage ratio of the Company. As part of our overall risk management policies, in June 2018, the Company entered into a pay-fixed, receive-floating interest rate swap contract with a notional amount of $9.0 million to reduce the impact associated with interest rate fluctuations . The notional value amortizes monthly in equal amounts based on the 5-year principal repayment terms. The terms of the swap require the Company to pay interest on the basis of a fixed rate of 3.02%, and the Company will receive interest on the basis of one-month USD-LIBOR-BBA-Bloomberg. The Company reports all derivatives at fair value. These contracts are recognized as either assets or liabilities, depending upon the derivative’s fair value. The estimated net fair values of the derivative contracts on the consolidated balance sheets are as follows: September 30, December 31, (in thousands) 2019 2018 Prepaid expenses and other current assets Foreign exchange contracts $ 68 $ 43 Total asset derivatives 68 43 Other liabilities Interest rate swaps (192 ) (103 ) Total liability derivatives (192 ) (103 ) Net fair value $ (124 ) $ (60 ) The Company has not designated the derivative contracts as hedges. The changes in the fair value of the derivative contracts are included in gain (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 gain (loss) on derivative instruments, net, in the consolidated statements of operations. For the three and nine months ended September 30, 2019 and 2018, the Company recognized a net (loss) gain on its derivative instruments as outlined below: Three months ended September 30, Nine months ended September 30, (in thousands) 2019 2018 2019 2018 Interest rate swap - change in fair value $ (1 ) $ (28 ) $ (89 ) $ (39 ) Foreign exchange contracts-change in fair value (45 ) (14 ) 25 (178 ) Remeasurement of related contract receivables, billings in excess of revenue earned, and subcontractor accruals (15 ) (17 ) (5 ) (89 ) Loss on derivative instruments, net $ (61 ) $ (59 ) $ (69 ) $ (306 ) |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 11. Stock-Based Compensation The Company recognizes compensation expense for all equity-based compensation awards issued to employees and directors that are expected to vest. Compensation cost is based on the fair value of awards as of the grant date. The Company recognized $0.2 million and $0.4 million of stock-based compensation expense related to equity awards for the three months ended September 30, 2019 and 2018, respectively, and recognized $1.2 million and $1.4 million of stock-based compensation expense related to equity awards for the nine months ended September 30, 2019 and 2018, respectively, under the fair value method. In addition to the equity-based compensation expense recognized, the Company also recognized income of $(55,000) and expense of $105,000 of stock-based compensation related to the change in the fair value of cash-settled restricted stock units (RSUs) during the three months ended September 30, 2019 and 2018, respectively. During the nine months ended September 30, 2019 and 2018, the Company recorded a net reduction of $88,000 and an increase of $165,000 in the fair value of cash-settled RSUs, respectively. During the three and nine months ended September 30, 2019, the Company granted approximately 8,500 and 508,500 time-based RSUs with an aggregate fair value of $0.02 million and $1.4 million, respectively. For the three and nine months ended September 30, 2018, the Company granted approximately 0 and 400,000 time-based RSUs with an aggregate fair value of $0.0 million and $1.3 million, respectively. A portion of the time-based RSUs vest quarterly in equal amounts over the course of eight quarters, a portion vest one year after grant 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 year to three years. The Company's 1995 long-term incentive program ("LTIP") provides for the issuance of performance-vesting and time-vesting restricted stock units to certain executives and other Company employees. Vesting of the performance-vesting restricted stock units (PRSU's) is contingent upon the employee's continued employment and the Company's achievement of certain performance goals during designated performance periods as established by the Compensation Committee of the Board of Directors. We recognize compensation expense, net of estimated forfeitures, for PRSU's on a straight-line basis over the performance period based on the probable outcome of achievement of the financial targets. At the end of each reporting period, we estimate the number of PRSUs that are expected to vest, based on the probability and extent to which the performance goals will be met, and take into account these estimates when calculating the expense for the period. If the number of shares expected to be earned changes during the performance period, we make a cumulative adjustment to compensation expense based on the revised number of shares expected to be earned. During nine months ended September 30, 2019, the Company granted approximately 350,000 performance-based RSUs to employees with an aggregate fair value of $0.9 million. A cumulative adjustment reversing $150,000 of expense recognized in the first half of 2019 was recorded in the three-month period ended September 30, 2019 upon determination that vesting was no longer probable related to the revenue and EBITDA targets. During the three months ended September 30, 2019, the Company did not grant any performance-based RSUs. During the three and nine months ended September 30, 2018, the Company did not grant any performance-based RSUs. The Company did not grant any stock options during the three and nine months ended September 30, 2019 and 2018. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt [Abstract] | |
Debt | 12. Debt The Company entered into a 3-year, $5.0 million revolving line of credit facility ("RLOC") with Citizens Bank National Association (the Bank) on December 29, 2016 to fund general working capital needs and provide funding for acquisitions. On May 11, 2018, GSE entered into an Amended and Restated Credit and Security Agreement (the Credit Agreement) with the Bank, amending and restating the Company's existing Credit and Security Agreement with the Bank, which included a $5.0 million asset-based revolving credit facility between the Company and the Bank, to now include (a) a $5.0 million revolving credit facility not subject to a borrowing base, including a letter of credit sub-facility, and (b) a $25.0 million delayed draw term loan facility available to be drawn upon for up to 18 months and to finance certain permitted acquisitions by the Company. The credit facilities mature in five years and bear interest at one-month LIBOR plus a margin that varies depending on the overall leverage ratio of the Company and its subsidiaries. Revolving loans are interest-only with principal due at maturity, while term loans require monthly payments of principal and interest based on an amortization schedule. The Company's obligations under the Credit Agreement are guaranteed by the Company's wholly owned subsidiaries. The credit facilities are secured by liens on all assets of the Company. Attendant to the Company's acquisition of DP Engineering, the Company and the Bank entered into a Third Amendment and Reaffirmation Agreement and a Fourth Amendment and Reaffirmation Agreement on February 15, 2019 and March 20, 2019, respectively. On June 28, 2019, the Company and the Bank entered into a Fifth Amendment and Reaffirmation Agreement, which changed the fixed charge coverage ratio from 1.25, to four different ratios ranging from 1.05 to 1.25 among different time periods and changed the leverage ratio to: (i) 2.75 to 1.00 for the periods ending on June 30, 2019, September 30, 2019, December 31, 2019 and March 31, 2020; (ii) 2.50 to 1.00 for the periods ending June 30, 2020 and September 30, 2020; (iii) 2.25 to 1.00 for the periods ending December 31 st st th th RLOC We intend to continue using the RLOC for short-term working capital needs and the issuance of letters of credit in connection with business operations. Letter of credit issuance fees range between 1.25% and 2% depending on the Company’s overall leverage ratio, and the Company pays an unused RLOC fee quarterly based on the average daily unused balance. At September 30, 2019, there were no outstanding borrowings under the RLOC and four letters of credit totaling $1.2 million. The amount available at September 30, 2019, after consideration of letters of credit was approximately $3.8 million. Term Loan As discussed in Note 4, we acquired DP Engineering on February 15, 2019 for approximately $13.5 million in cash. The purchase price was subject to customary pre- and post-closing working capital adjustments plus an additional earn-out amount not to exceed $5.0 million potentially payable in 2020 and 2021. We drew down $14.3 million to finance the acquisition of DP Engineering. The loan bears interest at the adjusted LIBOR plus a margin ranging between 2% and 2.75% depending on the overall leverage ratio of the Company and matures in five years. There were no debt issuance costs and loan origination fees associated with the loan related for our acquisition of DP Engineering. As discussed in Note 4, we also acquired True North on May 11, 2018 for approximately $9.75 million in cash. The purchase price was subject to customary pre and post-closing working capital adjustments. We drew down $10.3 million to finance the acquisition of True North, $0.5 million of which was repaid to the Bank on the same day. The loan bears interest at the adjusted one-month LIBOR plus a margin ranging between 2% and 2.75% depending on the overall leverage ratio of the Company and matures in five years. We also incurred $70,000 debt issuance costs and $75,000 loan origination fees related to the Credit Agreement. Debt issuance costs and loan origination fees are reported as a direct deduction from the carrying amount of the loan and are amortized over the term of the loan using the effective interest method. The outstanding long-term debt under the delayed draw term loan facility was as follows: (in thousands) September 30, 2019 December 31, 2018 Long-term debt, net of discount $ 19,746 $ 8,512 Less: current portion of long-term debt (4,778 ) 1,902 Long-term debt, less current portion $ 14,968 $ 6,610 The Credit Agreement contains customary covenants and restrictions typical for a financing of this type that, among other things, require the Company to satisfy certain financial covenants and restrict the Company's ability to incur additional debt, pay dividends and make distributions, make certain investments and acquisitions, repurchase its stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, modify the nature of its business, enter into sale-leaseback transactions, transfer and sell material assets and merge or consolidate. Non-compliance with one or more of the covenants and restrictions after any applicable grace period could result in the obligations under the Credit Agreement becoming immediately due and payable and termination of the credit facilities. In addition to non-compliance with covenants and restrictions, the Credit Agreement also contains other customary events of default. If an event of default under the Credit Agreement occurs and is continuing, then the Bank may declare the obligations under the Credit Agreement to be immediately due and payable and may terminate the credit facilities. At September 30, 2019, the Company was in compliance with its financial covenants. See Note 1 going concern consideration |
Product Warranty
Product Warranty | 9 Months Ended |
Sep. 30, 2019 | |
Product Warranty [Abstract] | |
Product Warranty | 13. 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-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 $0.5 million is classified as long-term within other liabilities. The activity in the accrued warranty accounts is as follows: (in thousands) Balance, January 1, 2019 $ 1,621 Current period provision 185 Current period claims (83 ) Currency adjustment (7 ) Balance at September 30, 2019 $ 1,716 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue [Abstract] | |
Revenue | 14. Revenue We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers Revenue from Contracts with Customers We generate revenue primarily 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 following table represents a disaggregation of revenue by type of goods or services for the three and nine months ended September 30, 2019 and 2018, along with the reportable segment for each category: ( in thousands Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Performance Improvement Solutions segment System Design and Build $ 4,435 $ 5,109 $ 16,472 $ 19,904 Software 786 586 2,170 2,001 Training and Consulting Services 6,196 4,154 17,975 8,709 Nuclear Industry Training and Consulting segment Training and Consulting Services 8,614 11,952 29,066 38,780 Total revenue $ 20,031 $ 21,801 $ 65,683 $ 69,394 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 revenue recognized in the reporting periods that were included in the contract liabilities from contracts with customers: ( in thousands Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Revenue recognized in the period from amounts included in Billings in Excess at the beginning of the period $ 762 $ 1,980 $ 8,615 $ 9,934 For an SDB contract, we generally have two main performance obligations: the training simulator build and post contract support ("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 and nine months ended September 30, 2019, the Company recognized revenue of $0.7 million and $2.4 million related to performance obligations satisfied in previous periods, respectively. As of September 30, 2019, the aggregate amount of transaction price allocated to the remaining performance obligations of SDB, software and fixed-price training and consulting services contracts is $27.4 million. The Company will recognize the revenue as the performance obligations are satisfied, which is expected to occur over the next 12 months. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | 15. Income Taxes The following table presents the provision (benefit) for income taxes and the effective tax rates: (in thousands) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Provision (benefit) for income taxes $ 568 $ 314 $ (874 ) $ 124 Effective tax rate (102.7 )% (153.9 )% 13.8 % (13.6 )% The Company's income tax provision (benefit) for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. Total income tax expense for the nine months ended September 30, 2019 is comprised mainly of the tax impact of the loss on impairment, federal, foreign, and state tax expense. Total income tax expense for the nine months ended September 30, 2018 is comprised mainly of federal, foreign, and state tax expense. Our effective tax rates were (102.7)% and 13.8% for the three and nine months ended September 30, 2019, respectively. For the three months ended September 30, 2019, the difference between our effective tax rate of (102.7)% and the U.S. statutory federal income tax rate of 21% was primarily due to permanent differences, accruals related to uncertain tax positions for certain U.S. and foreign tax contingencies, a change in valuation allowance in our China subsidiary, discrete item adjustments for the U.S. and foreign taxes, the excess book deduction related to stock options and restricted stock units that were exercised or vested during the quarter, and the impact of the loss on impairment. For the nine months ended September 30, 2019, the difference between the effective tax rate of 13.8% and the U.S. statutory federal income tax rate of 21% was primarily due to permanent differences, accruals related to uncertain tax positions for certain foreign tax contingencies, and discrete item adjustments, including the tax impact of the loss on impairment. Because of its net operating loss carryforwards, the Company is subject to U.S. federal and state income tax examinations from the year 2000 and forward. The Company is subject to foreign tax examinations by tax authorities for years 2011 forward for Sweden, 2015 forward for China, 2015 forward for India, and 2016 forward for 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 India, Swedish and U.K. net deferred assets as of September 30, 2019. The Company has determined that it will continue to assess a valuation allowance on its China deferred tax asset related to transfer pricing. 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. Refer to Note 1 – Going Concern Considerations |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 16 . Leases The Company maintains leases of office facilities and equipment. Leases generally have remaining terms of one year to six years, whereas leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheets. The Company recognizes lease expense for minimum lease payments on a straight-line basis over the term of the lease. Certain leases include options to renew or terminate. Renewal options are exercisable per the discretion of the Company and vary based on the nature of each lease, with renewal periods generally ranging from one year to five years. The term of the lease includes renewal periods only if the Company is reasonably certain that it will exercise the renewal option. When determining if a renewal option is reasonably certain of being exercised, the Company considers several factors, including but not limited to, the cost of moving to another location, the cost of disruption to operations, whether the purpose or location of the leased asset is unique and the contractual terms associated with extending the lease. Upon the adoption of the new lease standard ASU 2016-02, on January 1, 2019, the Company elected the package of practical expedients permitted under the transition guidance within the amended guidance, which among other things, allowed registrants to carry forward historical lease classification. Accordingly, all existing leases that were classified as operating leases by the Company historically, were classified as operating leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The operating lease ROU assets represent the lease liability, plus any lease payments made at or before the commencement date, less any lease incentives received. The Company's real estate leases, which are comprised primarily of office spaces, represent a majority of the lease liability. The majority of our lease payments are fixed, although an immaterial portion of payments are variable in nature. Variable lease payments vary based on changes in facts and circumstances related to the use of the ROU and are recorded as incurred. The Company uses an incremental borrowing rate based on rates available at commencement in determining the present value of future payments. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. The Company applies a portfolio approach to effectively account for the operating lease ROU assets and liabilities. Lease contracts are evaluated at inception to determine whether they contain a lease, where the Company obtains the right to control an identified asset. The following table summarizes the classification of operating ROU assets and lease liabilities on the consolidated balance sheets ( in thousands Operating Leases Classification September 30, 2019 Leased Assets Operating lease - right of use assets Long term assets $ 3,720 Lease Liabilities Operating lease liabilities - Current Other current liabilities 1,024 Operating lease liabilities Long term liabilities 3,121 $ 4,146 The Company executed a sublease agreement with a tenant to rent out 3,650 square feet from the lease at its Sykesville office on May 1, 2019. This agreement is in addition to the 3,822 of square feet previously subleased, which was entered into on April 1, 2017. The sublease does not relieve the Company of its primary lease obligation. The lessor agreements are both considered operating leases, maintaining the historical classification of the underlying lease. The Company does not recognize any underlying assets for the subleases as a lessor of operating leases. The net amount received from the sublease is recorded within selling, general and administrative expenses. The table below summarizes the lease income and expenses recorded in the consolidated statements of operations incurred during the three and nine months ended September 30, 2019, ( in thousands Lease Cost Classification Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating lease cost (1) Selling, general and administrative expenses $ 307 $ 852 Short-term leases costs (2) Selling, general and administrative expenses 46 119 Sublease income (3) Selling, general and administrative expenses (43 ) (75 ) Net lease cost $ 310 $ 896 (1) (2) (3) The future minimum lease payments under non-cancellable operating leases are reflected below. This table also reflects the reconciliation of the undiscounted cash flows to the discounted operating lease liabilities as recognized at September 30, 2019 consolidated balance sheets ( in thousands Operating Leases 2019 $ 305 2020 1,199 2021 1,181 2022 1,156 2023 622 After 2023 107 Total lease payments $ 4,570 Less: Interest 424 Present value of lease payments $ 4,146 The Company has calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for our operating leases. As noted in our lease accounting policy, the Company uses the incremental borrowing rate as the lease discount rate. Lease Term and Discount Rate Nine Months Ended September 30, 2019 Weighted-average remaining lease term (years) Operating leases 4.00 Weighted-average discount rate Operating leases 5 % The table below sets out the classification of lease payments in the consolidated statement of cash flows. The right-of-use assets obtained in exchange for operating lease liabilities represent new operating leases obtained through our business combination during the nine months ended September 30, 2019. (in thousands) Other Information Nine Months Ended September 30, 2019 - Operating cash flows used in operating leases $ 893 Cash paid for amounts included in measurement of liabilities 893 Right-of-use assets obtained in exchange for new operating liabilities $ 1,777 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Information [Abstract] | |
Segment Information | 17. Segment Information The Company has two reportable business segments. The Performance 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 engineering services include, but are not limited to, plant design verification and validation, thermal performance evaluation and optimization programs, and engineering programs for plants for ASME code and ASME Section XI. The Company provides these services through GSE, True North and DP Engineering across all market segments. Example training applications include turnkey and custom training services. Contract terms are typically less than two years. The NITC 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. On February 15, 2019, through our wholly-owned subsidiary GSE Performance Solutions, Inc., the Company entered into the DP Engineering Purchase Agreement, to purchase 100% of the membership interests in DP Engineering. DP Engineering is a provider of value-added technical engineering solutions and consulting services to nuclear power plants with an emphasis on preparation and implementation of design modifications during plant outages. For reporting purposes, DP Engineering is included in our Performance segment due to similarities in services provided including engineering solutions and implementation of design modifications to the nuclear power sector. On May 11, 2018, GSE, through our wholly-owned subsidiary GSE Performance Solutions, Inc., entered into the True North Purchase Agreement to purchase 100% of the membership interests in True North. True North is a provider of technical engineering solutions to nuclear and fossil fuel power plants with an emphasis on regulatory-driven ASME code programs. The acquisition of True North is expected to broaden our engineering services offering, expand our relationships with several of the largest nuclear energy providers in the United States, and add a highly specialized, complimentary talent pool to our employee base. For reporting purposes, True North is included in our Performance segment due to similarities in services provided including technical engineering solutions to the nuclear and fossil fuel power sector. Due to the impairment described in Note 8 related to DP Engineering, we recognized charges totaling $5.5 million related to the impairment of certain definite-lived intangible assets and goodwill in our Performance segment. Our primary measure of segment performance as shown in the table below excluded loss on impairment of intangible assets and goodwill, and the change in fair value of contingent consideration, net, which we do not believe are representative of the ongoing operations of the Performance segment. Excluding these discrete items from our segment measure of performance allows for better period over period comparison. The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income taxes. Inter-segment revenue is eliminated in consolidation and is not significant: (in thousands) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Revenue: Performance Improvement Solutions $ 11,417 $ 9,849 $ 36,617 $ 30,614 Nuclear Industry Training and Consulting 8,614 11,952 29,066 38,780 20,031 21,801 65,683 69,394 Operating income (loss): Performance Improvement Solutions 77 494 285 110 Nuclear Industry Training and Consulting (340 ) (520 ) (1,558 ) (584 ) Loss on impairment - - (5,464 ) - Change in fair value of contingent consideration, net - - 1,200 - Operating loss (263 ) (26 ) (5,537 ) (474 ) Interest (expense), net (288 ) (114 ) (812 ) (153 ) Loss on derivative instruments, net (61 ) (59 ) (69 ) (306 ) Other income (expense), net 59 (5 ) 62 24 Loss before income taxes $ (553 ) $ (204 ) $ (6,356 ) $ (909 ) |
Non-consolidated Variable Inter
Non-consolidated Variable Interest Entity | 9 Months Ended |
Sep. 30, 2019 | |
Non-consolidated Variable Interest Entity [Abstract] | |
Non-consolidated Variable Interest Entity | 18. Non-consolidated Variable Interest Entity The Company, through its wholly owned subsidiary DP Engineering, effectively holds a 48% membership interest in DP-NXA Consultants LLC ("DP-NXA"). DP-NXA was established to provide industrial services that include civil, structural, architectural, electrical, fire protection, plumbing, mechanical consulting engineering services to customers. DP-NXA sub-contracts their work to its two owners, NXA Consultants LLC ("NXA"), which owns 52% of the entity, and DP Engineering. DP Engineering and NXA contributed $48 and $52, respectively, for 48% and 52% interest in DP-NXA. DP Engineering recorded the contributed cash as an equity investment. The Company evaluated the nature of DP Engineering's investment in DP-NXA and determined that DP-NXA is a variable interest entity (“VIE”). Since the Company does not have the power to direct activities that most significantly impact DP-NXA, it cannot be DP-NXA’s primary beneficiary. Furthermore, the Company concluded that it did not hold a controlling financial interest in DP-NXA since NXA, the VIE's majority owner, makes all operation and business decisions. The Company accounts for its investment in DP-NXA using the equity method of accounting due to the fact the Company exerts significant influence with its 48% of membership interest, but does not control the financial and operating decisions. The Company's maximum exposure to any losses incurred by DP-NXA is limited to its investment. As of September 30, 2019, the Company has not made any additional contributions to DP-NXA and believes its maximum exposure to any losses incurred by DP-NXA was not material. As of September 30, 2019, the Company does not have existing guarantee with or to DP-NXA, or any third-party work contracted with it. For the three and nine months ended September 30, 2019, the carrying value of the investment in DP-NXA is zero. We do not have any investment income or loss from DP-NXA for the three and nine months ended September 30, 2019. The following table presents the carrying amount and classification of the assets related to the Company’s variable interests in non-consolidated VIE and the maximum exposure to loss at September 30, 2019. ( In thousands September 30, 2019 Assets Cash: Checking account $ 254 Total assets $ 254 Liabilities Credit card and other payables 254 Total liabilities 254 Total net assets $ - Maximum exposure to loss $ - |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 19 Commitments and Contingencies Contingencies On March 29, 2019, a former employee of Absolute Consulting, Inc., filed a putative class action against Absolute and the Company, Joyce v. Absolute Consulting Inc., 1:19 cv 00868 RDB, |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation GSE Systems, Inc. is a leading provider of professional and technical engineering, staffing services, and simulation software to clients in the power and process industries. References in this report to “GSE,” the “Company,” “we” and “our” are to GSE Systems and its subsidiaries, collectively. The consolidated interim financial statements included herein have been prepared by GSE 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 accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The accompanying balance sheet data for the year ended December 31, 2018 was derived from our audited financial statements, but it does not include all disclosures required by U.S. GAAP. 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, 2018, filed with the Securities and Exchange Commission on March 27, 2019. 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, product warranties, valuation of goodwill and intangible assets acquired including the determination of fair value in impairment tests, valuation of long-lived assets to be disposed of, valuation of contingent consideration issued in business acquisitions, valuation of stock-based compensation awards, and the recoverability of deferred tax assets. Actual results could differ from these estimates and those differences could be material. |
Going Concern Consideration | Going Concern Consideration The Company is currently in compliance with its debt covenants; however, it is probable, based on our forecasts, that we will not be in compliance with these covenants at future measurement dates in the following twelve-month period. We do have the ability to cure one of the two financial covenants, the leverage ratio, by paying down an amount of debt necessary to meet the leverage ratio and we are considering taking this action. Regarding the fixed charge coverage ratio, we anticipate reducing fixed charges, namely excess real estate at the DP Engineering office and other space to be made idle. We will be working with Citizens Bank, National Association (the Bank) to obtain a modification of our covenant requirements that would, based on our projections, provide forecasted compliance with the covenants. If at such future time a covenant violation were to occur and if we are unable to agree to amended financial covenant measures with the Bank before such time or obtain a waiver in the event of subsequent non-compliance, the Company would likely not be able to repay the entirety of the outstanding debt in the event the Bank were to call the debt, thus leading to substantial doubt about the Company’s ability to continue as a going concern until such amendments or waivers are in place. Based on our cash flow projection, we believe our funds from operations and availability of cash provide us with sufficient funds to cure one of the forecasted violations if we choose to; have sufficient cash to fund our on-going operations and make our scheduled debt repayments in the normal course of business. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Accounting pronouncements recently adopted In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") No. 2016-02, Leases (Topic 842), The Company adopted the new standard using the modified retrospective approach effective on January 1, 2019. The Company's adoption included lease codification improvements that were issued by the FASB through June 2019. The FASB made available several practical expedients in adopting the new lease accounting guidance. The Company elected the package of practical expedients permitted under the transition guidance within the amended guidance, which among other things, allowed registrants to carry forward historical lease classification. The Company elected the practical expedient that allows the combination of both lease and non-lease components as a single component and account for it as a lease for all classes of underlying assets. The Company elected not to apply the new guidance to short term leases with an initial term of twelve months or less. The Company recognizes those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. The Company elected to use a single discount rate for a portfolio of leases with reasonably similar characteristics. The most significant impact was the recognition of ROU assets and related lease liabilities for operating leases on the consolidated balance sheets. The Company recognized ROU assets and related lease liabilities of $2.7 million and $3.0 million respectively, related to operating lease commitments, as of January 1, 2019. The operating lease ROU asset represents the lease liability, plus any lease payments made at or before the commencement date, less any lease incentives received. The new guidance did not have a material impact on the Company's cash flows or results of operations. See Note 16 of the consolidated financial statements. Accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment |
Basic and Diluted (Loss) Inco_2
Basic and Diluted (Loss) Income per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Basic and Diluted (Loss) Income per Common Share [Abstract] | |
Weighted Average Number of Common Shares and Common Share Equivalents Used in the Determination of Basic and Diluted 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 Nine months ended September 30, September 30, 2019 2018 2019 2018 Numerator: Net loss $ (1,121 ) $ (518 ) $ (5,482 ) $ (1,033 ) Denominator: Weighted-average shares outstanding for basic loss per share 20,007,469 19,786,888 20,021,829 19,620,207 Effect of dilutive securities: Stock options and restricted stock units - - - - Adjusted weighted-average shares outstanding and assumed conversions for diluted loss per share 20,007,469 19,786,888 20,021,829 19,620,207 Shares related to dilutive securities excluded because inclusion would be anti-dilutive 578,676 713,024 397,131 645,714 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Acquisition [Abstract] | |
Business Acquisition, Pro Forma Information | Unaudited Pro Forma Financial Information The unaudited pro forma financial information in the table below summarizes the combined results of operations for GSE, True North and DP Engineering as if the business combinations had occurred on January 1, 2018. Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 ( unaudited and in thousands Revenue $ 20,031 $ 26,932 $ 68,667 $ 89,679 Net loss (919 ) (1,204 ) (5,371 ) (1,509 ) |
DP Engineering Ltd, CO. [Member] | |
Business Acquisition [Abstract] | |
Adjusted Purchase Price Consideration and Fair Value Adjustments | The following table summarizes the calculation of adjusted purchase price as of the acquisition date (in thousands): Base purchase price per agreement $ 13,500 Pre closing working capital adjustment 155 Fair value of contingent consideration 1,200 Total purchase price $ 14,855 |
Consideration Paid For Assets Acquired and Liabilities Assumed | The following table summarizes the consideration paid to acquire DP Engineering and the preliminary fair value of the assets acquired and liabilities assumed at the date of the transaction. Due to the recent completion of the acquisition, the Company recorded the assets acquired and liabilities assumed at their preliminary estimated fair value. As of September 30, 2019, the Company had not finalized the determination of the fair value allocated to various assets and liabilities, including, but not limited to, contract receivables, prepaid expenses and other current assets, intangible assets, accounts payable, accrued expenses, contingent consideration, accrued compensation and the residual amount allocated to goodwill. The following amounts except for cash are all reflected in the consolidated statement of cash flows within the "Acquisition of DP Engineering, net of cash acquired" line caption. ( in thousands Total purchase price $ 14,855 Purchase price allocation: Cash 134 Contract receivables 2,934 Prepaid expenses and other current assets 209 Property, and equipment, net 210 Intangible assets 6,798 Other assets 1,806 Accounts payable and accrued expenses (1,375 ) Other liabilities (1,494 ) Total identifiable net assets 9,222 Goodwill 5,633 Net assets acquired $ 14,855 |
Fair Value of Intangible Assets Acquired and Related Weighted Average Amortization Period | 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 15 $ 4,898 Tradename 10 1,172 Non-compete agreements 5 728 Total $ 6,798 DP Engineering contributed revenue of $6.5 million to GSE for the period from February 15, 2019 to September 30, 2019. |
True North Consulting, LLC [Member] | |
Business Acquisition [Abstract] | |
Consideration Paid For Assets Acquired and Liabilities Assumed | The following table summarizes the consideration paid to acquire True North and the preliminary fair value of the assets acquired and liabilities assumed at the date of the transaction. The Company recorded the assets acquired and liabilities assumed at their preliminary estimated fair value. As of September 30, 2019, the Company had finalized the determination of the fair value allocated to various assets and liabilities, including, but not limited to, contract receivables, prepaid expenses and other current assets, intangible assets, accounts payable, accrued expenses, accrued compensation and the residual amount allocated to goodwill. ( in thousands Total purchase price $ 9,915 Purchase price allocation: Cash 306 Contract receivables 1,870 Prepaid expenses and other current assets 8 Property, and equipment, net 1 Intangible assets 5,088 Accounts payable, accrued expenses (1,744 ) Accrued compensation (353 ) Total identifiable net assets 5,176 Goodwill 4,739 Net assets acquired $ 9,915 |
Fair Value of Intangible Assets Acquired and Related Weighted Average Amortization Period | 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 15 $ 3,758 Tradename 10 582 Non-compete agreements 4 221 Alliance agreements 5 527 Total $ 5,088 |
Contract Receivables (Tables)
Contract Receivables (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Contract Receivables [Abstract] | |
Contract Receivables | The components of contract receivables are as follows: (in thousands) September 30, December 31, 2019 2018 Billed receivables $ 8,281 $ 15,998 Unbilled receivables 8,754 5,506 Allowance for doubtful accounts (469 ) (427 ) Total contract receivables, net $ 16,566 $ 21,077 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | Changes in the gross carrying amount, accumulated amortization, addition and impairment of definite-lived intangible assets from December 31, 2018 through September 30, 2019 were as following: ( in thousands For the Nine Months Ended September 30, 2019 Beginning Gross Accumulated Addition Impairment Net Carrying Amount Amortization Amortized intangible assets: Customer relationships $ 6,833 $ (3,411 ) $ 4,898 $ (3,370 ) $ 4,950 Trade names 1,295 (621 ) 1,172 - 1,846 Developed technology 471 (471 ) - - - Non-contractual customer relationships 433 (433 ) - - - Noncompete agreement 221 (167 ) 728 - 782 Alliance agreement 527 (145 ) - - 382 Others 167 (167 ) - - - Total $ 9,947 $ (5,415 ) $ 6,798 $ (3,370 ) $ 7,960 (in thousands) As of December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Amortized intangible assets Customer relationships $ 6,831 $ (2,375 ) $ 4,456 Trade names 1,295 (318 ) 977 Developed technology 471 (471 ) - Non-contractual customer relationships 433 (433 ) - Noncompete agreements 221 (35 ) 186 Alliance agreement 527 (66 ) 461 Others 167 (167 ) - Total $ 9,945 $ (3,865 ) $ 6,080 |
Finite-Lived Intangible Assets, Future Amortization Expense | Amortization expense related to definite-lived intangible assets totaled $0.5 million and $0.6 million for the three months ended September 30, 2019 and 2018, and $1.6 million and $1.1 million for the nine months ended September 30, 2019, and 2018, respectively. The following table shows the estimated amortization expense of the definite-lived intangible assets for the next five years and thereafter: (in thousands) Years ended December 31: 2019 (remainder) $ 495 2020 1,974 2021 1,471 2022 1,152 2023 868 Thereafter 2,000 Total $ 7,960 |
Change in Net Carrying Amount of Goodwill | Changes in the net carrying amount of goodwill from December 31, 2018 through September 30, 2019 were due to the acquisition of DP Engineering, and were comprised of the following items: ( in thousands Performance Improvement Solutions Nuclear Industry Training and Consulting Total Balance, January 1, 2019 $ 4,739 $ 8,431 $ 13,170 Acquisition 5,633 - 5,633 Dispositions - - - Goodwill impairment loss (2,094 ) - (2,094 ) Balance, September 30, 2019 $ 8,278 $ 8,431 $ 16,709 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019: (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 $ 375 $ - $ - $ 375 Foreign exchange contracts - 68 - 68 Total assets $ 375 $ 68 $ - $ 443 Liability awards $ - $ (18 ) $ - $ (18 ) Interest rate swap contract - (192 ) - (192 ) Total liabilities $ - $ (210 ) $ - $ (210 ) Money market funds at both September 30, 2019 and December 31, 2018 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, 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 $ 824 $ - $ - $ 824 Foreign exchange contracts - 43 - 43 Total assets $ 824 $ 43 $ - $ 867 Liability awards $ - $ (118 ) $ - $ (118 ) Interest rate swap contract - (103 ) - (103 ) Total liabilities $ - $ (221 ) $ - $ (221 ) |
Roll-Forward of the Fair Value of the Contingent Consideration | The following table provides a roll-forward of the fair value of the contingent consideration categorized as Level 3 for the nine months ended September 30, 2019: (in thousands) Balance, January 1, 2019 $ - Issuance of contingent consideration in connection with acquisitions 1,200 Change in fair value (1,200 ) Balance, September 30, 2019 $ - |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments [Abstract] | |
Estimated Fair Value of the Contracts in the Consolidated Balance Sheets | The Company reports all derivatives at fair value. These contracts are recognized as either assets or liabilities, depending upon the derivative’s fair value. The estimated net fair values of the derivative contracts on the consolidated balance sheets are as follows: September 30, December 31, (in thousands) 2019 2018 Prepaid expenses and other current assets Foreign exchange contracts $ 68 $ 43 Total asset derivatives 68 43 Other liabilities Interest rate swaps (192 ) (103 ) Total liability derivatives (192 ) (103 ) Net fair value $ (124 ) $ (60 ) |
Net (Loss) Gain on Derivative Instruments | For the three and nine months ended September 30, 2019 and 2018, the Company recognized a net (loss) gain on its derivative instruments as outlined below: Three months ended September 30, Nine months ended September 30, (in thousands) 2019 2018 2019 2018 Interest rate swap - change in fair value $ (1 ) $ (28 ) $ (89 ) $ (39 ) Foreign exchange contracts-change in fair value (45 ) (14 ) 25 (178 ) Remeasurement of related contract receivables, billings in excess of revenue earned, and subcontractor accruals (15 ) (17 ) (5 ) (89 ) Loss on derivative instruments, net $ (61 ) $ (59 ) $ (69 ) $ (306 ) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt [Abstract] | |
Outstanding Long-term Debt | The outstanding long-term debt under the delayed draw term loan facility was as follows: (in thousands) September 30, 2019 December 31, 2018 Long-term debt, net of discount $ 19,746 $ 8,512 Less: current portion of long-term debt (4,778 ) 1,902 Long-term debt, less current portion $ 14,968 $ 6,610 |
Product Warranty (Tables)
Product Warranty (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Product Warranty [Abstract] | |
Activities in the Accrued 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-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 $0.5 million is classified as long-term within other liabilities. The activity in the accrued warranty accounts is as follows: (in thousands) Balance, January 1, 2019 $ 1,621 Current period provision 185 Current period claims (83 ) Currency adjustment (7 ) Balance at September 30, 2019 $ 1,716 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue [Abstract] | |
Disaggregation of Revenue | The following table represents a disaggregation of revenue by type of goods or services for the three and nine months ended September 30, 2019 and 2018, along with the reportable segment for each category: ( in thousands Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Performance Improvement Solutions segment System Design and Build $ 4,435 $ 5,109 $ 16,472 $ 19,904 Software 786 586 2,170 2,001 Training and Consulting Services 6,196 4,154 17,975 8,709 Nuclear Industry Training and Consulting segment Training and Consulting Services 8,614 11,952 29,066 38,780 Total revenue $ 20,031 $ 21,801 $ 65,683 $ 69,394 |
Balance of Contract Liabilities and Revenue Recognized in Reporting Period | The following table reflects the revenue recognized in the reporting periods that were included in the contract liabilities from contracts with customers: ( in thousands Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Revenue recognized in the period from amounts included in Billings in Excess at the beginning of the period $ 762 $ 1,980 $ 8,615 $ 9,934 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes [Abstract] | |
Provision (Benefit) for Income Taxes and Effective Tax Rates | The following table presents the provision (benefit) for income taxes and the effective tax rates: (in thousands) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Provision (benefit) for income taxes $ 568 $ 314 $ (874 ) $ 124 Effective tax rate (102.7 )% (153.9 )% 13.8 % (13.6 )% |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Classification of Operating ROU Assets and Lease Liabilities on the Balance Sheet | Lease contracts are evaluated at inception to determine whether they contain a lease, where the Company obtains the right to control an identified asset. The following table summarizes the classification of operating ROU assets and lease liabilities on the consolidated balance sheets ( in thousands Operating Leases Classification September 30, 2019 Leased Assets Operating lease - right of use assets Long term assets $ 3,720 Lease Liabilities Operating lease liabilities - Current Other current liabilities 1,024 Operating lease liabilities Long term liabilities 3,121 $ 4,146 |
Lease Income and Expenses | The table below summarizes the lease income and expenses recorded in the consolidated statements of operations incurred during the three and nine months ended September 30, 2019, ( in thousands Lease Cost Classification Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating lease cost (1) Selling, general and administrative expenses $ 307 $ 852 Short-term leases costs (2) Selling, general and administrative expenses 46 119 Sublease income (3) Selling, general and administrative expenses (43 ) (75 ) Net lease cost $ 310 $ 896 (1) (2) (3) |
Future Minimum Lease Payments | The future minimum lease payments under non-cancellable operating leases are reflected below. This table also reflects the reconciliation of the undiscounted cash flows to the discounted operating lease liabilities as recognized at September 30, 2019 consolidated balance sheets ( in thousands Operating Leases 2019 $ 305 2020 1,199 2021 1,181 2022 1,156 2023 622 After 2023 107 Total lease payments $ 4,570 Less: Interest 424 Present value of lease payments $ 4,146 |
Operating Lease Weighted Average Remaining Lease Term And Discount Rate | The Company has calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for our operating leases. As noted in our lease accounting policy, the Company uses the incremental borrowing rate as the lease discount rate. Lease Term and Discount Rate Nine Months Ended September 30, 2019 Weighted-average remaining lease term (years) Operating leases 4.00 Weighted-average discount rate Operating leases 5 % |
Classification of Lease Payments in the Statement of Cash Flows | The table below sets out the classification of lease payments in the consolidated statement of cash flows. The right-of-use assets obtained in exchange for operating lease liabilities represent new operating leases obtained through our business combination during the nine months ended September 30, 2019. (in thousands) Other Information Nine Months Ended September 30, 2019 - Operating cash flows used in operating leases $ 893 Cash paid for amounts included in measurement of liabilities 893 Right-of-use assets obtained in exchange for new operating liabilities $ 1,777 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Information [Abstract] | |
Reconciliation of Segment Revenue to Consolidated Revenue and Operating Results to Consolidated Income Before Income Taxes | The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income taxes. Inter-segment revenue is eliminated in consolidation and is not significant: (in thousands) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Revenue: Performance Improvement Solutions $ 11,417 $ 9,849 $ 36,617 $ 30,614 Nuclear Industry Training and Consulting 8,614 11,952 29,066 38,780 20,031 21,801 65,683 69,394 Operating income (loss): Performance Improvement Solutions 77 494 285 110 Nuclear Industry Training and Consulting (340 ) (520 ) (1,558 ) (584 ) Loss on impairment - - (5,464 ) - Change in fair value of contingent consideration, net - - 1,200 - Operating loss (263 ) (26 ) (5,537 ) (474 ) Interest (expense), net (288 ) (114 ) (812 ) (153 ) Loss on derivative instruments, net (61 ) (59 ) (69 ) (306 ) Other income (expense), net 59 (5 ) 62 24 Loss before income taxes $ (553 ) $ (204 ) $ (6,356 ) $ (909 ) |
Non-consolidated Variable Int_2
Non-consolidated Variable Interest Entity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Non-consolidated Variable Interest Entity [Abstract] | |
Carrying Amount and Classification of Assets Related to Variable Interests | The following table presents the carrying amount and classification of the assets related to the Company’s variable interests in non-consolidated VIE and the maximum exposure to loss at September 30, 2019. ( In thousands September 30, 2019 Assets Cash: Checking account $ 254 Total assets $ 254 Liabilities Credit card and other payables 254 Total liabilities 254 Total net assets $ - Maximum exposure to loss $ - |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Pronouncements Recently Adopted [Abstract] | ||
Right of use assets | $ 3,720 | $ 0 |
Operating lease liability | $ 4,146 | |
ASU 2016-02 [Member] | ||
Accounting Pronouncements Recently Adopted [Abstract] | ||
Right of use assets | 2,700 | |
Operating lease liability | $ 3,000 |
Basic and Diluted (Loss) Inco_3
Basic and Diluted (Loss) Income per Common Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator [Abstract] | ||||
Net loss | $ (1,121) | $ (518) | $ (5,482) | $ (1,033) |
Denominator [Abstract] | ||||
Weighted-average shares outstanding for basic loss per share (in shares) | 20,007,469 | 19,786,888 | 20,021,829 | 19,620,207 |
Effect of dilutive securities [Abstract] | ||||
Stock options and restricted stock units (in shares) | 0 | 0 | 0 | 0 |
Adjusted weighted-average shares outstanding and assumed conversions for diluted loss per share (in shares) | 20,007,469 | 19,786,888 | 20,021,829 | 19,620,207 |
Shares related to dilutive securities excluded because inclusion would be anti-dilutive (in shares) | 578,676 | 713,024 | 397,131 | 645,714 |
Acquisitions, Consideration Pai
Acquisitions, Consideration Paid For Acquisition (Details) - USD ($) $ in Thousands | Feb. 15, 2019 | May 11, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Purchase price allocation [Abstract] | ||||||||
Goodwill | $ 16,709 | $ 16,709 | $ 13,170 | |||||
Revenue | 20,031 | $ 21,801 | 65,683 | $ 69,394 | ||||
Net (loss) Income | $ (1,121) | $ (518) | $ (5,482) | (1,033) | ||||
DP Engineering Ltd, CO. [Member] | ||||||||
Business Acquisition [Abstract] | ||||||||
Percentage of ownership interest acquired | 100.00% | |||||||
Business acquisition, name of acquired entity | DP Engineering Ltd, CO. | |||||||
Business acquisition, effective date of acquisition | Feb. 15, 2019 | |||||||
Calculation of Adjusted Purchase Price [Abstract] | ||||||||
Base purchase price per agreement | $ 13,500 | |||||||
Pre closing working capital adjustment | 155 | |||||||
Fair value of contingent consideration | 1,200 | |||||||
Total purchase price | 14,855 | |||||||
Acquisition [Abstract] | ||||||||
Total purchase price | 14,855 | |||||||
Purchase price allocation [Abstract] | ||||||||
Cash | 134 | |||||||
Contract receivables | 2,934 | |||||||
Prepaid expenses and other current assets | 209 | |||||||
Property, and equipment, net | 210 | |||||||
Intangible assets | 6,798 | |||||||
Other assets | 1,806 | |||||||
Accounts payable and accrued expenses | (1,375) | |||||||
Other liabilities | (1,494) | |||||||
Total identifiable net assets | 9,222 | |||||||
Goodwill | 5,633 | |||||||
Net assets acquired | 14,855 | |||||||
Tax deductible goodwill | 5,633 | |||||||
Cash consideration in escrow | 1,687 | |||||||
Proceeds from issuance of debt | 14,263 | |||||||
Earn-out amount | $ 5,000 | |||||||
Period to satisfy indemnification claims | 18 months | |||||||
Selling, general and administrative costs | $ 628 | |||||||
Revenue | $ 6,493 | |||||||
True North Consulting, LLC [Member] | ||||||||
Business Acquisition [Abstract] | ||||||||
Percentage of ownership interest acquired | 100.00% | |||||||
Business acquisition, name of acquired entity | True North Consulting LLC | |||||||
Business acquisition, effective date of acquisition | May 11, 2018 | |||||||
Calculation of Adjusted Purchase Price [Abstract] | ||||||||
Base purchase price per agreement | $ 9,750 | |||||||
Total purchase price | 9,915 | |||||||
Acquisition [Abstract] | ||||||||
Total purchase price | 9,915 | |||||||
Purchase price allocation [Abstract] | ||||||||
Cash | 306 | |||||||
Contract receivables | 1,870 | |||||||
Prepaid expenses and other current assets | 8 | |||||||
Property, and equipment, net | 1 | |||||||
Intangible assets | 5,088 | |||||||
Accounts payable and accrued expenses | (1,744) | |||||||
Accrued compensation | (353) | |||||||
Total identifiable net assets | 5,176 | |||||||
Goodwill | 4,739 | |||||||
Net assets acquired | 9,915 | |||||||
Tax deductible goodwill | 4,739 | |||||||
Cash consideration in escrow | 1,463 | |||||||
Proceeds from issuance of debt | $ 10,300 | |||||||
Period to satisfy indemnification claims | 18 months | |||||||
Selling, general and administrative costs | $ 540 |
Acquisitions, Intangible Assets
Acquisitions, Intangible Assets (Details) - USD ($) $ in Thousands | Feb. 15, 2019 | May 11, 2018 | Mar. 31, 2019 | Sep. 30, 2019 |
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets acquired | $ 6,798 | |||
Goodwill impairment loss | (2,094) | |||
Impairment | (3,370) | |||
DP Engineering Ltd, CO. [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets acquired | $ 6,798 | |||
Goodwill impairment loss | $ (2,100) | |||
Impairment | $ 3,400 | |||
DP Engineering Ltd, CO. [Member] | Minimum [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets, weighted average useful life | 5 years | |||
DP Engineering Ltd, CO. [Member] | Maximum [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets, weighted average useful life | 15 years | |||
True North Consulting, LLC [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets acquired | $ 5,088 | |||
True North Consulting, LLC [Member] | Minimum [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets, weighted average useful life | 4 years | |||
True North Consulting, LLC [Member] | Maximum [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets, weighted average useful life | 15 years | |||
Customer Relationships [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets acquired | 4,898 | |||
Impairment | (3,370) | |||
Customer Relationships [Member] | DP Engineering Ltd, CO. [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets acquired | $ 4,898 | |||
Finite-lived intangible assets, weighted average useful life | 15 years | |||
Customer Relationships [Member] | True North Consulting, LLC [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets acquired | $ 3,758 | |||
Finite-lived intangible assets, weighted average useful life | 15 years | |||
Tradename [Member] | DP Engineering Ltd, CO. [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets acquired | $ 1,172 | |||
Finite-lived intangible assets, weighted average useful life | 10 years | |||
Tradename [Member] | True North Consulting, LLC [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets acquired | $ 582 | |||
Finite-lived intangible assets, weighted average useful life | 10 years | |||
Non-compete Agreements [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets acquired | 728 | |||
Impairment | $ 0 | |||
Non-compete Agreements [Member] | DP Engineering Ltd, CO. [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets acquired | $ 728 | |||
Finite-lived intangible assets, weighted average useful life | 5 years | |||
Non-compete Agreements [Member] | True North Consulting, LLC [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets acquired | $ 221 | |||
Finite-lived intangible assets, weighted average useful life | 4 years | |||
Alliance Agreements [Member] | True North Consulting, LLC [Member] | ||||
Acquired Finite-Lived Intangible Assets [Abstract] | ||||
Finite-lived intangible assets acquired | $ 527 | |||
Finite-lived intangible assets, weighted average useful life | 5 years |
Acquisitions, Pro Forma Financi
Acquisitions, Pro Forma Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Acquisition, Pro Forma Information [Abstract] | ||||
Revenue | $ 20,031 | $ 26,932 | $ 68,667 | $ 89,679 |
Net loss | $ (919) | $ (1,204) | $ (5,371) | $ (1,509) |
Restructuring Activities (Detai
Restructuring Activities (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019USD ($)EngineerOffice | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Position | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Restructuring Costs [Abstract] | |||||
Restructuring and related cost, expected number of positions eliminated | Position | 40 | ||||
Expected restructuring costs | $ 2,200 | $ 2,200 | |||
Restructuring cost, cost incurred to date | $ 2,000 | 2,000 | |||
Restructuring costs | 2 | $ 1,300 | |||
Cumulative translation adjustment | 1,300 | ||||
Tax benefit | 1,000 | ||||
Payments | 54 | ||||
Reduction in workforce | Engineer | 12 | ||||
Number of offices leases terminated | Office | 1 | ||||
Lease termination costs | $ 293 | ||||
Restructuring charges | $ 740 | $ 70 | 742 | $ 1,177 | |
DP Engineering Ltd, Co [Member] | |||||
Restructuring Costs [Abstract] | |||||
Lease termination costs | 300 | ||||
Restructuring charges | $ 400 |
Contingent Consideration (Detai
Contingent Consideration (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Feb. 15, 2019 |
Contingent Consideration [Abstract] | ||
Fair value of contingent consideration | $ 0 | $ 1.2 |
Contingent liability outstanding | $ 0 |
Contract Receivables (Details)
Contract Receivables (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Oct. 31, 2019USD ($) | Sep. 30, 2019USD ($)Customer | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)Customer | |
Contract Receivables [Abstract] | ||||
Maximum term of contract receivables | 12 months | |||
Components of contract receivables [Abstract] | ||||
Billed receivables | $ 8,281 | $ 15,998 | ||
Unbilled receivables | 8,754 | 5,506 | ||
Allowance for doubtful accounts | (469) | (427) | ||
Total contract receivables, net | 16,566 | $ 21,077 | ||
Unbilled Contract Receivables [Abstract] | ||||
Unbilled contract receivables billed during October 2019 | $ (6,777) | $ (5,800) | ||
Subsequent Event [Member] | ||||
Unbilled Contract Receivables [Abstract] | ||||
Unbilled contract receivables billed during October 2019 | $ 6,300 | |||
Contract Receivable [Member] | ||||
Concentration Risk [Abstract] | ||||
Number of customers accounting for contract receivables | Customer | 1 | 1 | ||
Percentage of contract receivables accounted by major customers | 26.30% | 16.80% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) $ in Thousands | Feb. 15, 2019USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Segment | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Goodwill and Intangible Assets [Abstract] | |||||||
Number of reporting units | Segment | 2 | ||||||
Number of operating segments | Segment | 2 | ||||||
Goodwill [Roll Forward] | |||||||
Net book value, beginning balance | $ 13,170 | $ 13,170 | |||||
Acquisition | 5,633 | ||||||
Dispositions | 0 | ||||||
Goodwill impairment loss | (2,094) | ||||||
Net book value, ending balance | $ 16,709 | 16,709 | |||||
Amortized Intangible Assets [Abstract] | |||||||
Gross carrying amount | 9,947 | 9,947 | $ 9,945 | ||||
Accumulated amortization | (5,415) | (5,415) | (3,865) | ||||
Addition | 6,798 | ||||||
Impairment | (3,370) | ||||||
Net | 7,960 | 7,960 | 6,080 | ||||
Amortization of definite-lived intangible assets | 494 | $ 632 | 1,550 | $ 1,094 | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
2019 | 495 | 495 | |||||
2020 | 1,974 | 1,974 | |||||
2021 | 1,471 | 1,471 | |||||
2022 | 1,152 | 1,152 | |||||
2023 | 868 | 868 | |||||
Thereafter | 2,000 | 2,000 | |||||
Total | 7,960 | 7,960 | 6,080 | ||||
Customer Relationships [Member] | |||||||
Amortized Intangible Assets [Abstract] | |||||||
Gross carrying amount | 6,833 | 6,833 | 6,831 | ||||
Accumulated amortization | (3,411) | (3,411) | (2,375) | ||||
Addition | 4,898 | ||||||
Impairment | (3,370) | ||||||
Net | 4,950 | 4,950 | 4,456 | ||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
Total | 4,950 | 4,950 | 4,456 | ||||
Trade Names [Member] | |||||||
Amortized Intangible Assets [Abstract] | |||||||
Gross carrying amount | 1,295 | 1,295 | 1,295 | ||||
Accumulated amortization | (621) | (621) | (318) | ||||
Addition | 1,172 | ||||||
Impairment | 0 | ||||||
Net | 1,846 | 1,846 | 977 | ||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
Total | 1,846 | 1,846 | 977 | ||||
Developed Technology [Member] | |||||||
Amortized Intangible Assets [Abstract] | |||||||
Gross carrying amount | 471 | 471 | 471 | ||||
Accumulated amortization | (471) | (471) | (471) | ||||
Net | 0 | 0 | 0 | ||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
Total | 0 | 0 | 0 | ||||
Non-Controlling Customer Relationships [Member] | |||||||
Amortized Intangible Assets [Abstract] | |||||||
Gross carrying amount | 433 | 433 | 433 | ||||
Accumulated amortization | (433) | (433) | (433) | ||||
Net | 0 | 0 | 0 | ||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
Total | 0 | 0 | 0 | ||||
Noncompete Agreements [Member] | |||||||
Amortized Intangible Assets [Abstract] | |||||||
Gross carrying amount | 221 | 221 | 221 | ||||
Accumulated amortization | (167) | (167) | (35) | ||||
Addition | 728 | ||||||
Impairment | 0 | ||||||
Net | 782 | 782 | 186 | ||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
Total | 782 | 782 | 186 | ||||
Alliance Agreement [Member] | |||||||
Amortized Intangible Assets [Abstract] | |||||||
Gross carrying amount | 527 | 527 | 527 | ||||
Accumulated amortization | (145) | (145) | (66) | ||||
Net | 382 | 382 | 461 | ||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
Total | 382 | 382 | 461 | ||||
Others [Member] | |||||||
Amortized Intangible Assets [Abstract] | |||||||
Gross carrying amount | 167 | 167 | 167 | ||||
Accumulated amortization | (167) | (167) | (167) | ||||
Net | 0 | 0 | 0 | ||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
Total | 0 | 0 | $ 0 | ||||
Performance Improvement Solutions [Member] | |||||||
Goodwill [Roll Forward] | |||||||
Net book value, beginning balance | 4,739 | 4,739 | |||||
Acquisition | 5,633 | ||||||
Dispositions | 0 | ||||||
Goodwill impairment loss | (2,094) | ||||||
Net book value, ending balance | 8,278 | 8,278 | |||||
Nuclear Industry Training and Consulting [Member] | |||||||
Goodwill [Roll Forward] | |||||||
Net book value, beginning balance | 8,431 | 8,431 | |||||
Acquisition | 0 | ||||||
Dispositions | 0 | ||||||
Goodwill impairment loss | 0 | ||||||
Net book value, ending balance | $ 8,431 | $ 8,431 | |||||
DP Engineering Ltd, CO. [Member] | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill impairment loss | (2,100) | ||||||
Net book value, ending balance | $ 5,633 | ||||||
Amortized Intangible Assets [Abstract] | |||||||
Addition | 6,798 | ||||||
Impairment | $ 3,400 | ||||||
DP Engineering Ltd, CO. [Member] | Minimum [Member] | |||||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
Amortization term of intangible assets acquired | 5 years | ||||||
DP Engineering Ltd, CO. [Member] | Maximum [Member] | |||||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
Amortization term of intangible assets acquired | 15 years | ||||||
DP Engineering Ltd, CO. [Member] | Customer Relationships [Member] | |||||||
Amortized Intangible Assets [Abstract] | |||||||
Addition | 4,898 | ||||||
DP Engineering Ltd, CO. [Member] | Noncompete Agreements [Member] | |||||||
Amortized Intangible Assets [Abstract] | |||||||
Addition | $ 728 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019USD ($)LetterContract | Dec. 31, 2018USD ($) | |
Performance Bond [Abstract] | ||
Number of standby letters of credit | Letter | 4 | |
Letter of credit and surety bonds | $ 1,200 | |
Number of contracts | Contract | 4 | |
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Money market funds | $ 375 | $ 824 |
Foreign exchange contracts | 68 | 43 |
Total assets | 443 | 867 |
Liability awards | (18) | (118) |
Interest rate swap contract | (192) | (103) |
Total liabilities | (210) | (221) |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Money market funds | 375 | 824 |
Foreign exchange contracts | 0 | 0 |
Total assets | 375 | 824 |
Liability awards | 0 | 0 |
Interest rate swap contract | 0 | 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 | 68 | 43 |
Total assets | 68 | 43 |
Liability awards | (18) | (118) |
Interest rate swap contract | (192) | (103) |
Total liabilities | (210) | (221) |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Money market funds | 0 | 0 |
Foreign exchange contracts | 0 | 0 |
Total assets | 0 | 0 |
Liability awards | 0 | 0 |
Interest rate swap contract | 0 | 0 |
Total liabilities | 0 | $ 0 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 0 | |
Issuance of contingent consideration in connection with acquisitions | 1,200 | |
Change in fair value | (1,200) | |
Ending balance | $ 0 |
Derivative Instruments, Foreign
Derivative Instruments, Foreign Exchange Contracts (Details) - Foreign Exchange Contracts [Member] € in Millions | 9 Months Ended | |
Sep. 30, 2019EUR (€)Contract | Dec. 31, 2018EUR (€) | |
Derivative [Abstract] | ||
Number of foreign exchange contracts outstanding | Contract | 1 | |
Foreign exchange contract outstanding | € | € 1 | € 3.2 |
Expiration date of contract | Mar. 1, 2020 |
Derivative Instruments, Interes
Derivative Instruments, Interest Rate Risk Management (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Interest Rate Swap [Member] | |
Derivative [Abstract] | |
Notional amount | $ 9 |
Principal repayment term | 5 years |
Fixed interest rate | 3.02% |
Term Loan [Member] | Minimum [Member] | |
Derivative [Abstract] | |
Debt instrument, basis spread on variable rate | 2.00% |
Term Loan [Member] | Maximum [Member] | |
Derivative [Abstract] | |
Debt instrument, basis spread on variable rate | 2.75% |
LIBOR [Member] | |
Derivative [Abstract] | |
Term of variable rate | 1 month |
LIBOR - BBA Bloomberg [Member] | |
Derivative [Abstract] | |
Term of variable rate | 1 month |
Derivative Instruments, Fair Va
Derivative Instruments, Fair Values Derivatives, Balance Sheet Location (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Estimated fair value of the contracts in the consolidated balance sheets [Abstract] | ||
Asset derivatives | $ 68 | $ 43 |
Liability derivatives | (192) | (103) |
Net fair value | (124) | (60) |
Foreign Exchange Contracts [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Estimated fair value of the contracts in the consolidated balance sheets [Abstract] | ||
Asset derivatives | 68 | 43 |
Interest Rate Swaps [Member] | Other Liabilities [Member] | ||
Estimated fair value of the contracts in the consolidated balance sheets [Abstract] | ||
Liability derivatives | $ (192) | $ (103) |
Derivative Instruments, (Loss)
Derivative Instruments, (Loss) Gain on Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net (Loss) Gain on Derivative Instruments [Abstract] | ||||
Interest rate swap - change in fair value | $ (1) | $ (28) | $ (89) | $ (39) |
Foreign exchange contracts - change in fair value | (45) | (14) | 25 | (178) |
Remeasurement of related contract receivables, billings in excess of revenue earned, and subcontractor accruals | (15) | (17) | (5) | (89) |
Loss on derivative instruments, net | $ (61) | $ (59) | $ (69) | $ (306) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($)shares | Sep. 30, 2019USD ($)qtrshares | Sep. 30, 2018USD ($)shares | |
Share-based Compensation [Abstract] | ||||
Aggregate fair value for performance-based RSUs | $ 0 | |||
Restricted Stock Units [Member] | ||||
Share-based Compensation [Abstract] | ||||
Stock-based compensation expense | $ (55,000) | $ 105,000 | $ (88,000) | $ 165,000 |
Granted performance-based RSUs (in shares) | shares | 0 | 0 | 350,000 | 0 |
Aggregate fair value for performance-based RSUs | $ 900,000 | |||
Granted time-based RSUs (in shares) | shares | 8,500 | 0 | 508,500 | 400,000 |
Aggregate fair value for time-based RSUs | $ 19,514 | $ 0 | $ 1,407,800 | $ 1,300,000 |
Number of quarters time-based RSU's will vest quarterly | qtr | 8 | |||
Period in which time-based RSU's will vest annually in equal amounts | 3 years | |||
Cumulative adjustment | 150,000 | |||
Restricted Stock Units [Member] | Minimum [Member] | ||||
Share-based Compensation [Abstract] | ||||
Requisite service period for time-based RSU's | 1 year | |||
Restricted Stock Units [Member] | Maximum [Member] | ||||
Share-based Compensation [Abstract] | ||||
Requisite service period for time-based RSU's | 3 years | |||
Stock Option [Member] | ||||
Share-based Compensation [Abstract] | ||||
Stock-based compensation expense | $ 170,000 | $ 402,000 | $ 1,238,000 | $ 1,370,000 |
Debt (Details)
Debt (Details) $ in Thousands | Feb. 15, 2019USD ($) | May 11, 2018USD ($) | Sep. 30, 2019USD ($)Letter | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Jun. 28, 2019 | Dec. 31, 2018USD ($) | Dec. 29, 2016USD ($) |
Line of Credit Facility [Abstract] | |||||||||||||||
Leverage ratio | 275.00% | ||||||||||||||
Number of letters of credit | Letter | 4 | ||||||||||||||
Plan [Member] | |||||||||||||||
Line of Credit Facility [Abstract] | |||||||||||||||
Leverage ratio | 275.00% | 225.00% | 225.00% | 225.00% | 225.00% | 250.00% | 250.00% | 275.00% | 275.00% | ||||||
LIBOR [Member] | |||||||||||||||
Term Loan [Abstract] | |||||||||||||||
Term of variable rate | 1 month | ||||||||||||||
Minimum [Member] | |||||||||||||||
Line of Credit Facility [Abstract] | |||||||||||||||
Fixed charge coverage ratio | 105.00% | ||||||||||||||
Maximum [Member] | |||||||||||||||
Line of Credit Facility [Abstract] | |||||||||||||||
Fixed charge coverage ratio | 125.00% | ||||||||||||||
Citizen's Bank [Member] | Revolving Credit Facility [Member] | |||||||||||||||
Line of Credit Facility [Abstract] | |||||||||||||||
Line of credit facility expiration period | 3 years | ||||||||||||||
Principal amount of the line of credit | $ 5,000 | ||||||||||||||
Line of credit facility term | 5 years | ||||||||||||||
Outstanding letter of credit balance | $ 0 | ||||||||||||||
Number of letters of credit | Letter | 4 | ||||||||||||||
Outstanding letter of credit balance | $ 1,200 | ||||||||||||||
Line of credit facility, remaining borrowing capacity | $ 3,800 | ||||||||||||||
Citizen's Bank [Member] | Revolving Credit Facility [Member] | Minimum [Member] | |||||||||||||||
Line of Credit Facility [Abstract] | |||||||||||||||
Percentage of letter of credit fees per annum | 1.25% | ||||||||||||||
Citizen's Bank [Member] | Revolving Credit Facility [Member] | Maximum [Member] | |||||||||||||||
Line of Credit Facility [Abstract] | |||||||||||||||
Percentage of letter of credit fees per annum | 2.00% | ||||||||||||||
Delayed Draw Term Loan [Member] | |||||||||||||||
Long-term Debt, Current and Noncurrent [Abstract] | |||||||||||||||
Long-term debt, net of discount | $ 19,746 | $ 8,512 | |||||||||||||
Less: current portion of long-term debt | (4,778) | (1,902) | |||||||||||||
Long-term debt, less current portion | $ 14,968 | $ 6,610 | |||||||||||||
Delayed Draw Term Loan [Member] | Minimum [Member] | |||||||||||||||
Term Loan [Abstract] | |||||||||||||||
Debt instrument, basis spread on variable rate | 2.00% | ||||||||||||||
Delayed Draw Term Loan [Member] | Maximum [Member] | |||||||||||||||
Term Loan [Abstract] | |||||||||||||||
Debt instrument, basis spread on variable rate | 2.75% | ||||||||||||||
Delayed Draw Term Loan [Member] | Citizen's Bank [Member] | Maximum [Member] | |||||||||||||||
Line of Credit Facility [Abstract] | |||||||||||||||
Line of credit facility expiration period | 18 months | ||||||||||||||
Delayed Draw Term Loan [Member] | Citizen's Bank [Member] | Revolving Credit Facility [Member] | |||||||||||||||
Line of Credit Facility [Abstract] | |||||||||||||||
Principal amount of the line of credit | $ 25,000 | ||||||||||||||
DP Engineering Ltd, CO. [Member] | |||||||||||||||
Term Loan [Abstract] | |||||||||||||||
Cash purchase price | $ 13,500 | ||||||||||||||
Proceeds from issuance of debt | 14,263 | ||||||||||||||
Earn-out amount | $ 5,000 | ||||||||||||||
DP Engineering Ltd, CO. [Member] | Delayed Draw Term Loan [Member] | |||||||||||||||
Line of Credit Facility [Abstract] | |||||||||||||||
Line of credit facility term | 5 years | ||||||||||||||
DP Engineering Ltd, CO. [Member] | Delayed Draw Term Loan [Member] | Minimum [Member] | |||||||||||||||
Term Loan [Abstract] | |||||||||||||||
Debt instrument, basis spread on variable rate | 2.00% | ||||||||||||||
DP Engineering Ltd, CO. [Member] | Delayed Draw Term Loan [Member] | Maximum [Member] | |||||||||||||||
Term Loan [Abstract] | |||||||||||||||
Debt instrument, basis spread on variable rate | 2.75% | ||||||||||||||
True North Consulting, LLC [Member] | |||||||||||||||
Term Loan [Abstract] | |||||||||||||||
Cash purchase price | 9,750 | ||||||||||||||
Proceeds from issuance of debt | 10,300 | ||||||||||||||
True North Consulting, LLC [Member] | Delayed Draw Term Loan [Member] | |||||||||||||||
Line of Credit Facility [Abstract] | |||||||||||||||
Line of credit facility term | 5 years | ||||||||||||||
Term Loan [Abstract] | |||||||||||||||
Proceeds from issuance of debt | 10,300 | ||||||||||||||
Repayments of debt | $ 500 | ||||||||||||||
Debt issuance costs | $ 70 | ||||||||||||||
Loan origination fees | $ 75 | ||||||||||||||
True North Consulting, LLC [Member] | Delayed Draw Term Loan [Member] | LIBOR [Member] | |||||||||||||||
Term Loan [Abstract] | |||||||||||||||
Term of variable rate | 1 month | ||||||||||||||
True North Consulting, LLC [Member] | Delayed Draw Term Loan [Member] | Citizen's Bank [Member] | Minimum [Member] | |||||||||||||||
Term Loan [Abstract] | |||||||||||||||
Debt instrument, basis spread on variable rate | 2.00% | ||||||||||||||
True North Consulting, LLC [Member] | Delayed Draw Term Loan [Member] | Citizen's Bank [Member] | Maximum [Member] | |||||||||||||||
Term Loan [Abstract] | |||||||||||||||
Debt instrument, basis spread on variable rate | 2.75% |
Product Warranty (Details)
Product Warranty (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Product warranty provision [Abstract] | |
Warranty terms for SDB contracts | 1 year |
Accrued warranty, current | $ 1,185 |
Accrued warranty, noncurrent | 531 |
Activities in product warranty account [Abstract] | |
Balance, January 1, 2019 | 1,621 |
Current period provision | 185 |
Current period claims | (83) |
Currency adjustment | (7) |
Balance at September 30, 2019 | $ 1,716 |
Revenue (Details)
Revenue (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($)Obligation | Sep. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($)StreamObligation | Sep. 30, 2018USD ($) | |
Disaggregation of Revenue [Abstract] | |||||
Revenue | $ 20,031 | $ 21,801 | $ 65,683 | $ 69,394 | |
Number of broad revenue streams | Stream | 3 | ||||
Contract with Customer, Asset and Liability [Abstract] | |||||
Revenue recognized in the period from amounts included in Billings in Excess at the beginning of the period | 762 | 1,980 | $ 8,615 | 9,934 | |
Amount of revenue recognized related to performance obligations satisfied in previous periods | $ 696 | $ 2,442 | |||
Revenue, Performance Obligation [Abstract] | |||||
Number of performance obligations | Obligation | 2 | 2 | |||
Remaining performance obligation | $ 27,436 | $ 27,436 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |||||
Revenue, Performance Obligation [Abstract] | |||||
Expected period to recognize revenue as performance obligations are satisfied | 12 months | 12 months | |||
Performance Improvement Solutions [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Revenue | $ 11,417 | 9,849 | $ 36,617 | 30,614 | |
Performance Improvement Solutions [Member] | System Design and Build [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Revenue | 4,435 | 5,109 | 16,472 | 19,904 | |
Performance Improvement Solutions [Member] | Software [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Revenue | 786 | 586 | 2,170 | 2,001 | |
Performance Improvement Solutions [Member] | Training and Consulting Services [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Revenue | 6,196 | 4,154 | 17,975 | 8,709 | |
Nuclear Industry Training and Consulting [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Revenue | 8,614 | 11,952 | 29,066 | 38,780 | |
Nuclear Industry Training and Consulting [Member] | Training and Consulting Services [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Revenue | $ 8,614 | $ 11,952 | $ 29,066 | $ 38,780 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Taxes [Abstract] | ||||
Provision (benefit) for income taxes | $ 568 | $ 314 | $ (874) | $ 124 |
Effective tax rate | (102.70%) | (153.90%) | 13.80% | (13.60%) |
Statutory federal income tax rate | 21.00% | |||
Income Tax Examination [Abstract] | ||||
Probability of uncertain tax position to be recognized | 50.00% | |||
Percentage of tax position realized upon ultimate settlement | 50.00% | |||
Sweden [Member] | ||||
Income Tax Examination [Abstract] | ||||
Income tax examination, year under examination | 2011 | |||
China [Member] | ||||
Income Tax Examination [Abstract] | ||||
Income tax examination, year under examination | 2015 | |||
India [Member] | ||||
Income Tax Examination [Abstract] | ||||
Income tax examination, year under examination | 2015 | |||
UK [Member] | ||||
Income Tax Examination [Abstract] | ||||
Income tax examination, year under examination | 2016 | |||
Federal [Member] | ||||
Income Tax Examination [Abstract] | ||||
Income tax examination, year under examination | 2000 | |||
State [Member] | ||||
Income Tax Examination [Abstract] | ||||
Income tax examination, year under examination | 2000 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($)SquarefeetTenant | Dec. 31, 2018USD ($) | ||
Lessee, Operating Lease, Description [Abstract] | ||||
Sublease square feet | Squarefeet | 3,650 | |||
Sublease date | May 1, 2019 | |||
Previously subleased square feet | Squarefeet | 3,822 | |||
Previous sublease date | Apr. 1, 2017 | |||
Number of tenants | Tenant | 2 | |||
Leased Assets [Abstract] | ||||
Operating lease - right of use assets | $ 3,720 | $ 3,720 | $ 0 | |
Lease Liabilities [Abstract] | ||||
Operating lease liabilities - Current | 1,024 | 1,024 | ||
Operating lease liabilities - Noncurrent | 3,121 | 3,121 | $ 0 | |
Operating lease liability | 4,146 | 4,146 | ||
Consolidated Statement of Operations Information [Abstract] | ||||
Operating lease cost | [1] | 307 | 852 | |
Short-term leases costs | [2] | 46 | 119 | |
Sublease income | [3] | (43) | (75) | |
Net lease cost | 310 | 896 | ||
Minimum Lease Payments [Abstract] | ||||
2019 | 305 | 305 | ||
2020 | 1,199 | 1,199 | ||
2021 | 1,181 | 1,181 | ||
2022 | 1,156 | 1,156 | ||
2023 | 622 | 622 | ||
After 2023 | 107 | 107 | ||
Total lease payments | 4,570 | 4,570 | ||
Less: Interest | 424 | 424 | ||
Operating lease liability | $ 4,146 | $ 4,146 | ||
Lease Term and Discount Rate [Abstract] | ||||
Weighted-average remaining lease term (in years) | 4 years | |||
Weighted-average discount rate | 5.00% | 5.00% | ||
Other Information [Abstract] | ||||
Operating cash flows used in operating leases | $ 893 | |||
Cash paid for amounts included in measurement of liabilities | 893 | |||
Right-of-use assets obtained in exchange for new operating liabilities | $ 1,777 | |||
Minimum [Member] | ||||
Lessee, Operating Lease, Description [Abstract] | ||||
Remaining operating lease terms | 1 year | 1 year | ||
Renewal option period | 1 year | 1 year | ||
Maximum [Member] | ||||
Lessee, Operating Lease, Description [Abstract] | ||||
Remaining operating lease terms | 6 years | 6 years | ||
Renewal option period | 5 years | 5 years | ||
[1] | Includes variable lease costs which are immaterial. | |||
[2] | Include leases maturing less than twelve months from the report date. | |||
[3] | Sublease portfolio consists of 2 tenants, which sublease parts of our principal executive office located at 1332 Londontown Blvd, Suite 200, Sykesville, MD. |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 5 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($)Segment | Sep. 30, 2018USD ($) | Feb. 15, 2019 | May 11, 2018 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||
Number of reportable business segments | Segment | 2 | ||||||
Contract term | 2 years | ||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||
Revenue | $ 20,031 | $ 21,801 | $ 65,683 | $ 69,394 | |||
Operating income (loss) | (263) | (26) | (5,537) | (474) | |||
Loss on impairment | 0 | 0 | (5,464) | 0 | |||
Change in fair value of contingent consideration, net | 0 | 0 | 1,200 | 0 | |||
Interest (expense), net | (288) | (114) | (812) | (153) | |||
Loss on derivative instruments, net | (61) | (59) | (69) | (306) | |||
Other income (expense), net | 59 | (5) | 62 | 24 | |||
Loss before income taxes | (553) | (204) | (6,356) | (909) | |||
Performance Improvement Solutions [Member] | |||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||
Revenue | 11,417 | 9,849 | 36,617 | 30,614 | |||
Operating income (loss) | 77 | 494 | 285 | 110 | |||
Nuclear Industry Training and Consulting [Member] | |||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||
Revenue | 8,614 | 11,952 | 29,066 | 38,780 | |||
Operating income (loss) | $ (340) | $ (520) | $ (1,558) | $ (584) | |||
DP Engineering Ltd, Co [Member] | |||||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||
Percentage of ownership interest acquired | 100.00% | ||||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||||
Revenue | $ 6,493 | ||||||
True North Consulting, LLC [Member] | |||||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||
Percentage of ownership interest acquired | 100.00% |
Non-consolidated Variable Int_3
Non-consolidated Variable Interest Entity (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Cash [Abstract] | ||
Contract receivables, net | $ 16,566 | $ 21,077 |
Total assets | 63,859 | 61,440 |
Liabilities [Abstract] | ||
Total liabilities | 37,336 | $ 30,311 |
Carrying value | $ 0 | |
DP Engineering Ltd, Co [Member] | ||
Variable Interest Entity [Line Items] | ||
Ownership percentage | 48.00% | |
Contribution amount | $ 48 | |
NXA Consultants LLC [Member] | ||
Variable Interest Entity [Line Items] | ||
Ownership percentage | 52.00% | |
Contribution amount | $ 52 | |
Variable Interest Entity, Not Primary Beneficiary [Member] | ||
Cash [Abstract] | ||
Checking account | 254 | |
Total assets | 254 | |
Liabilities [Abstract] | ||
Credit card and other payables | 254 | |
Total liabilities | 254 | |
Total net assets | 0 | |
Maximum exposure to loss | $ 0 |