Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 31, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Current Fiscal Year End Date | --12-31 | |
Document Transition Report | false | |
Entity Registrant Name | GSE Systems, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 001-14785 | |
Entity Tax Identification Number | 52-1868008 | |
Entity Address, Address Line One | 6940 Columbia Gateway Dr. | |
Entity Address, Address Line Two | Suite 470 | |
Entity Address, City or Town | Columbia | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 21046 | |
City Area Code | 410 | |
Local Phone Number | 970-7800 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 20,900,225 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000944480 | |
Title of 12(b) Security | Common Stock, $.01 Par Value | |
Trading Symbol | GVP | |
Security Exchange Name | NASDAQ |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 4,043 | $ 6,702 |
Contract receivables, net | 12,529 | 10,494 |
Prepaid expenses and other current assets | 4,781 | 1,554 |
Total current assets | 21,353 | 18,750 |
Equipment, software and leasehold improvements, net | 792 | 616 |
Software development costs, net | 575 | 630 |
Goodwill | 13,339 | 13,339 |
Intangible assets, net | 3,305 | 4,234 |
Operating lease right-of-use assets, net | 1,161 | 1,562 |
Other assets | 58 | 59 |
Total assets | 40,583 | 39,190 |
Current liabilities: | ||
Line of credit | 2,067 | 3,006 |
PPP Loan, current portion | 0 | 5,034 |
Accounts payable | 1,210 | 570 |
Accrued expenses | 1,306 | 1,297 |
Accrued compensation | 2,214 | 1,505 |
Billings in excess of revenue earned | 4,461 | 5,285 |
Accrued warranty | 560 | 665 |
Income taxes payable | 1,597 | 1,621 |
Other current liabilities | 1,202 | 2,498 |
Total current liabilities | 14,617 | 21,481 |
PPP Loan, noncurrent portion | 0 | 5,034 |
Operating lease liabilities noncurrent | 1,036 | 1,831 |
Other noncurrent liabilities | 256 | 339 |
Total liabilities | 15,909 | 28,685 |
Commitments and contingencies (Note 16) | ||
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, 22,499,136 and 22,192,569 shares issued, 20,900,225 and 20,593,658 shares outstanding, respectively | 225 | 222 |
Additional paid-in capital | 80,280 | 79,687 |
Accumulated deficit | (52,727) | (65,191) |
Accumulated other comprehensive loss | (105) | (1,214) |
Treasury stock at cost, 1,598,911 shares | (2,999) | (2,999) |
Total stockholders' equity | 24,674 | 10,505 |
Total liabilities and stockholders' equity | $ 40,583 | $ 39,190 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
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) | 22,499,136 | 22,192,569 |
Common stock, shares outstanding (in shares) | 20,900,225 | 20,593,658 |
Treasury stock at cost (in shares) | 1,598,911 | 1,598,911 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||||
Revenue | $ 14,686 | $ 12,922 | $ 41,312 | $ 44,967 |
Cost of revenue | 11,503 | 9,603 | 32,512 | 33,971 |
Gross profit | 3,183 | 3,319 | 8,800 | 10,996 |
Operating expenses: | ||||
Selling, general and administrative | 3,265 | 2,878 | 10,521 | 12,548 |
Research and development | 149 | 137 | 460 | 526 |
Restructuring charges | (10) | 185 | 798 | 195 |
Loss on impairment | 3 | 0 | 3 | 4,302 |
Depreciation | 69 | 76 | 216 | 254 |
Amortization of intangible assets | 286 | 414 | 929 | 1,528 |
Total operating expenses | 3,762 | 3,690 | 12,927 | 19,353 |
Operating loss | (579) | (371) | (4,127) | (8,357) |
Interest expense, net | (32) | (128) | (135) | (556) |
Gain on derivative instruments, net | 0 | 31 | 0 | 35 |
Other income, net | 12,215 | (77) | 16,853 | (24) |
Income (loss) before income taxes | 11,604 | (545) | 12,591 | (8,902) |
Provision for income taxes | 166 | 116 | 127 | 166 |
Net income (loss) | $ 11,438 | $ (661) | $ 12,464 | $ (9,068) |
Net income (loss) per common share - basic (in dollars per share) | $ 0.55 | $ (0.03) | $ 0.60 | $ (0.44) |
Net income (loss) per common share - diluted (in dollars per share) | $ 0.55 | $ (0.03) | $ 0.60 | $ (0.44) |
Weighted average shares outstanding used to compute net income (loss) per share - basic (in shares) | 20,863,479 | 20,563,452 | 20,714,068 | 20,438,571 |
Weighted average shares outstanding used to compute net income (loss) per share - diluted (in shares) | 20,863,479 | 20,563,452 | 20,714,068 | 20,438,571 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract] | ||||
Net income (loss) | $ 11,438 | $ (661) | $ 12,464 | $ (9,068) |
Cumulative translation adjustment | (23) | 84 | 1,109 | 104 |
Comprehensive income (loss) | $ 11,415 | $ (577) | $ 13,573 | $ (8,964) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ 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, 2019 | $ 218 | $ 79,400 | $ (54,654) | $ (1,846) | $ (2,999) | $ 20,119 |
Balance (in shares) at Dec. 31, 2019 | 21,839 | (1,599) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | $ 0 | 357 | 0 | 0 | $ 0 | 357 |
Common stock issued for RSUs vested (in shares) | 381 | |||||
Common stock issued for RSUs vested | $ 4 | (4) | 0 | 0 | 0 | 0 |
Shares withheld to pay taxes | 0 | (77) | 0 | 0 | 0 | (77) |
Foreign currency translation adjustment | 0 | 0 | 0 | 104 | 0 | 104 |
Net income (loss) | 0 | 0 | (9,068) | 0 | (9,068) | |
Balance at Sep. 30, 2020 | $ 222 | 79,676 | (63,722) | (1,742) | $ (2,999) | 11,435 |
Balance (in shares) at Sep. 30, 2020 | 22,220 | (1,599) | ||||
Balance at Jun. 30, 2020 | $ 221 | 79,676 | (63,061) | (1,826) | $ (2,999) | 12,011 |
Balance (in shares) at Jun. 30, 2020 | 22,150 | (1,599) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | $ 0 | 33 | 0 | 0 | $ 0 | 33 |
Common stock issued for RSUs vested (in shares) | 70 | |||||
Common stock issued for RSUs vested | $ 1 | (1) | 0 | 0 | 0 | 0 |
Shares withheld to pay taxes | 0 | (32) | 0 | 0 | 0 | (32) |
Foreign currency translation adjustment | 0 | 0 | 0 | 84 | 0 | 84 |
Net income (loss) | 0 | 0 | (661) | 0 | 0 | (661) |
Balance at Sep. 30, 2020 | $ 222 | 79,676 | (63,722) | (1,742) | $ (2,999) | 11,435 |
Balance (in shares) at Sep. 30, 2020 | 22,220 | (1,599) | ||||
Balance at Dec. 31, 2020 | $ 222 | 79,687 | (65,191) | (1,214) | $ (2,999) | 10,505 |
Balance (in shares) at Dec. 31, 2020 | 22,193 | (1,599) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | $ 0 | 784 | 0 | 0 | $ 0 | 784 |
Common stock issued for RSUs vested (in shares) | 306 | |||||
Common stock issued for RSUs vested | $ 3 | (3) | 0 | 0 | 0 | 0 |
Shares withheld to pay taxes | 0 | (188) | 0 | 0 | 0 | (188) |
Foreign currency translation adjustment | 0 | 0 | 0 | 1,109 | 0 | 1,109 |
Net income (loss) | 0 | 0 | 12,464 | 0 | 0 | 12,464 |
Balance at Sep. 30, 2021 | $ 225 | 80,280 | (52,727) | (105) | $ (2,999) | 24,674 |
Balance (in shares) at Sep. 30, 2021 | 22,499 | (1,599) | ||||
Balance at Jun. 30, 2021 | $ 225 | 80,024 | (64,165) | (82) | $ (2,999) | 13,003 |
Balance (in shares) at Jun. 30, 2021 | 22,461 | (1,599) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | $ 0 | 283 | 0 | 0 | $ 0 | 283 |
Common stock issued for RSUs vested (in shares) | 38 | |||||
Common stock issued for RSUs vested | $ 0 | 0 | 0 | 0 | 0 | 0 |
Shares withheld to pay taxes | 0 | (27) | 0 | 0 | 0 | (27) |
Foreign currency translation adjustment | 0 | 0 | 0 | (23) | 0 | (23) |
Net income (loss) | 0 | 0 | 11,438 | 0 | 0 | 11,438 |
Balance at Sep. 30, 2021 | $ 225 | $ 80,280 | $ (52,727) | $ (105) | $ (2,999) | $ 24,674 |
Balance (in shares) at Sep. 30, 2021 | 22,499 | (1,599) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 12,464 | $ (9,068) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Loss on impairment | 3 | 4,302 |
Depreciation | 216 | 254 |
Amortization of intangible assets | 929 | 1,528 |
Amortization of capitalized software development costs | 281 | 248 |
Amortization of deferred financing costs | 8 | 155 |
Gain on PPP loan forgiveness | (10,127) | 0 |
Stock-based compensation expense | 784 | 357 |
Bad debt (recovery) expense | (133) | 103 |
Gain on derivative instruments, net | 0 | (35) |
Deferred income taxes | 0 | 57 |
Gain on sale of equipment | 0 | (5) |
Changes in assets and liabilities: | ||
Contract receivables, net | (1,888) | 6,114 |
Prepaid expenses and other assets | (5,356) | 983 |
Accounts payable, accrued compensation and accrued expenses | 1,409 | (1,536) |
Billings in excess of revenue earned | (831) | (1,195) |
Accrued warranty | (192) | (285) |
Other liabilities | 2,147 | (332) |
Net cash (used in) provided by operating activities | (286) | 1,645 |
Cash flows from investing activities: | ||
Capital expenditures | (392) | (4) |
Proceeds from sale of equipment | 0 | 11 |
Capitalized software development costs | (226) | (250) |
Net cash used in investing activities | (618) | (243) |
Cash flows from financing activities: | ||
Proceeds from line of credit | 800 | 4,200 |
Repayment of line of credit | (1,739) | (694) |
Repayment of insurance premium | (609) | 0 |
Repayment of long-term debt | 0 | (18,480) |
Proceeds from Paycheck Protection Program Loan | 0 | 10,000 |
Interest rate swap | 0 | (209) |
Shares withheld to pay taxes | (188) | (77) |
Deferred financing costs | 0 | (80) |
Net cash used in financing activities | (1,736) | (5,340) |
Effect of exchange rate changes on cash | (19) | (93) |
Net decrease in cash and cash equivalents | (2,659) | (4,031) |
Cash, cash equivalents at beginning of the period | 6,702 | 11,691 |
Cash and cash equivalents at the end of the period | $ 4,043 | $ 7,660 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 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” or “we” or “our” or “the Company” are to GSE Systems, Inc. and our subsidiaries, collectively. The consolidated interim financial statements included herein have been prepared by GSE and are unaudited. In the opinion of our 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. All intercompany accounts and transactions have been eliminated in consolidation. 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 8 of Regulation S-X. The accompanying balance sheet data for the year ended December 31, 2020 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 our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the U.S. Securities and Exchange Commission on April 13, 2021. 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. Our most significant estimates relate to revenue recognition on contracts with customers, 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 stock-based compensation awards, and the recoverability of deferred tax assets. Actual results of these and other items not listed could differ from these estimates and those differences could be material. COVID-19 GSE employees began working remotely during the first quarter of 2020 due to the COVID-19 pandemic and will continue to do so when practical and as mandated by local, state and federal directives and regulations. Employees almost entirely work from home within our Performance Improvement Solutions (“Performance”) segment, except when required to be at the client site for essential project work. Our Performance contracts, which are considered an essential service, are permitted to and mostly continue without pause; however, we have experienced certain delays in new business. For our staff augmentation business, we have seen certain contracts for our Workforce Solutions customers paused or delayed as clients reduce their own on-premise workforces to the minimum operating levels in response to the pandemic; as a result, our Workforce Solutions segment has experienced a decline in its billable employee base since the start of the pandemic. Although we cannot fully estimate the length or gravity of the impact of the COVID-19 pandemic to our business at this time, we have experienced delays in commencing new projects and thus our ability to recognize revenue has been delayed for some contracts. Reductions in orders and other negative changes to orders experienced at the beginning of the pandemic have started to reverse in 2021, but not at the level expected as ongoing COVID concerns continue to hinder the pace of recovery. We continue to closely monitor our operating expenses as a result of contract delays and have made adjustments to keep our gross profit at a sustainable level Going Concern In 2020, we had several projects (primarily in our Workforce Solutions business segment) pandemic. We amended our credit facility with Citizens Bank, N.A. (“the Bank”) in based upon expected covenant violations and have been required to curtail term debt in exchange for revised financial covenants. Scheduled term loan repayments and agreed upon curtailment required us to use million in available cash to pay-off our term debt in 2020. We signed a Ninth Amendment and Reaffirmation Agreement (the “ Ninth Amendment”) with the Bank on March 29, 2021 to waive the fixed charge coverage ratio and leverage ratio for the quarters ending March 31 and June 30, 2021, and to adjust the thresholds for future covenants to ease the risk of non-compliance experienced in previous quarters. We have experienced delays in commencing new projects and thus our ability to earn revenue has been delayed for these projects. Reductions in orders and other negative changes to orders experienced at the beginning of the pandemic have started to reverse in 2021, but not at the level expected as ongoing COVID concerns continue to hinder the pace of recovery. This deterioration in the recovery plan has resulted in breaching the Minimum Liquidity ratio subsequent to June 30, 2021 and we project breaching the Leverage and Fixed Charges ratio covenant (See Note 10). Our working capital position on September 30, 2021 was $6.7 million . On August 5, 2021, the Company received approval from Small Business Administration (“SBA”) that the PPP loan including all accrued interest thereon was forgiven . The COVID-19 macroeconomic environment is considered fluid and although recovery is anticipated to steadily occur over the next 12 months, issues that could result from the other COVID variants could cause a further decline in revenue or stress our ability to meet covenant requirements. Jurisdictions where our businesses operate across the country are pushing toward re-opening places of business and government support, through the American Rescue Plan Act of 2021, will continue to support the broader economy. We have recorded of employee retention credits (“ ”) to be refunded from the IRS and recorded an additional $2.2 million of ERCs from unremitted payroll taxes made available under the Coronavirus Aid, Relief and Economic Security Act (the “ ” However, the timing of these elements taking place are not predictable and may not serve to mitigate our situation or improve the Company’s health. Following the Ninth Amendment, our new covenant compliance remains dependent on meeting future projections, which are subject to the variability and unknown speed and extent of post-COVID-19 recovery. On November 12, 2021, due to the violation of Q3 2021 leverage ratio, we signed the Tenth Amendment and Reaffirmation Agreement with an effective date of November 12, 2021 to adjust the thresholds for future covenants to ease the risk of non-compliance (See Note 17) The Company’s management continues to explore raising capital through its access to the public markets or entering into alternative financing arrangements. Furthermore, while recovery has been slower to materialize than expected the Company has experienced an improvement in orders as well as a higher rate of opportunities across business segments. Future negative trends in operating results could be mitigated through various cost cutting measures including adjustments to headcount or compensation, vendor augmentation or delay of investment initiatives in the Company’s corporate office. These actions, which are further supported by positively trending macroeconomic conditions, and the potential of recovery of business and orders may ease the risk of further bank covenant violations. However, when considering the unpredictability of the above, there continues to be substantial doubt the Company will continue as a going concern. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2021 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Note 2 - Recent Accounting Pronouncements Accounting pronouncements recently adopted In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities, Investments – Equity Method and Joint Ventures, and Derivatives and Hedging, which provides clarity for companies that hold equity securities at cost to first update the fair value of an investment, immediately prior to applying the Equity Method of Accounting; or clarity for companies that enter into forward contracts to purchase additional shares of an equity security that would then require the investee to account for the investment via the Equity Method. This ASU is applicable for public companies starting with fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. The Company adopted ASU 2020-01 on January 1, 2021. This standard did not have a significant impact to our consolidated financial statements since the Company does not currently hold any investments at cost. In September 2020, the FASB issued ASU 2020-10, Codification Improvements, which is part of an ongoing attempt to improve the consistency of the codification. Previously the option to disclose information in the footnotes to the financial statements was in one of two sections: Disclosure Section (Section 50) or Other Presentation Matters (Section 45). ASU 2020-10 conforms the disclosure requirements into Section 50 and provides additional information on specific guidance that was previously unclear or not included in the codification. This ASU is applicable for public companies starting with fiscal years beginning after December 15, 2020, with early adoption available for interim and annual financial statements not already filed and using the retrospective approach. however, the FASB does not believe that this should change any of the current reporting or disclosure requirements. The Company adopted ASU 2020-10 on January 1, 2021. The adoption of this standard did not have a material impact to our consolidated financial statements. Accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which introduces new guidance for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, including, but not limited to, trade and other receivables, held-to-maturity debt securities, loans and net investments in leases. The new guidance also modifies the impairment model for available-for-sale debt securities and requires the entities to determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. The standard also indicates that entities may not use the length of time a security has been in an unrealized loss position as a factor in concluding whether a credit loss exists. Early adoption is permitted for all entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. On October 16, 2019, the FASB voted to defer the deadlines for private companies and certain small public companies, including smaller reporting companies, to implement the new accounting standards on credit losses. The new effective date is January 1, 2023. As a smaller reporting company, we have elected to defer adoption in line with new deadlines and are currently evaluating the effects, if any, that the adoption of this guidance will have on our consolidated financial position, results of operations and cash flows. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
Basic and Diluted Loss per Shar
Basic and Diluted Loss per Share | 9 Months Ended |
Sep. 30, 2021 | |
Basic and Diluted Loss per Share [Abstract] | |
Basic and Diluted Loss per Share | Note 3 - Basic and Diluted Loss per Share Basic earnings per share is based on the weighted average number of outstanding common shares for the period. Diluted earnings per share adjusts the weighted average shares outstanding for the potential dilution that could occur if outstanding vested stock options were exercised. Basic and diluted earnings per share are based on the weighted average number of outstanding shares for the period. The number of common shares and common share equivalents used in the determination of basic and diluted loss per common share were as follows: (in thousands, except for share data) Three months ended Nine months ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Numerator: Net income (loss) attributed to common stockholders $ 11,438 $ (661 ) $ 12,464 $ (9,068 ) Denominator: Weighted-average shares outstanding for basic earnings per share 20,863,479 20,563,452 20,714,068 20,438,571 Effect of dilutive securities: Employee RSUs - - - - Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 20,863,479 20,563,452 20,714,068 20,438,571 Shares related to dilutive securities excluded because inclusion would be anti-dilutive 14,229 66,261 77,871 12,172 |
Coronavirus Aid, Relief and Eco
Coronavirus Aid, Relief and Economic Security Act | 9 Months Ended |
Sep. 30, 2021 | |
Coronavirus Aid, Relief and Economic Security Act [Abstract] | |
Coronavirus Aid, Relief and Economic Security Act | Note 4 - Coronavirus Aid, Relief and Economic Security Act Paycheck Protection Program Loan (PPP Loan) On March 27, 2020, the United States enacted the CARES Act. to extend liquidity to small businesses and assist in retaining employees during the COVID-19 pandemic. On April 23, 2020, GSE was approved for and on the next day received a $10 million loan pursuant to a Paycheck Protection Program Note (the “PPP Loan”) from Citizens Bank, N.A. Pursuant to the CARES Act, the PPP Loan was guaranteed by the U.S. Small Business Administration (“SBA”) and eligible for forgiveness under certain circumstances. Repayment of the PPP Loan was scheduled to begin on August 9, 2021. We applied for forgiveness in Q1 of 2021, and, on August 5, 2021, the Company was notified that the PPP loan was forgiven. We recognized other income of $10.1 million related to this forgiveness in the three and nine months ended September 30, 2021. Employee Retention Credits (ERC) Employee $1.0 $1.4 $5.0 $2.2 $2.1 million and $7.2 $0.7 $4.3 million |
Contract Receivables
Contract Receivables | 9 Months Ended |
Sep. 30, 2021 | |
Contract Receivables [Abstract] | |
Contract Receivables | Note 5 - Contract Receivables Contract receivables represent our unconditional rights to consideration due from our domestic and international customers. We expect to collect all contract receivables within the next twelve months. The components of contract receivables were as follows: (in thousands) September 30, 2021 December 31, 2020 Billed receivables $ 4,521 $ 5,694 Unbilled receivables 8,221 5,160 Allowance for doubtful accounts (213 ) (360 ) Total contract receivables, net $ 12,529 $ 10,494 Management reviews collectability of receivables periodically and records an allowance for doubtful accounts to reduce the Company’s receivables to their net realizable value when management determines it is probable that we will not be able to collect all amounts due from customers. 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, 2021 and 2020, we recorded bad debt (recovery) expense of $(133) thousand and $103 thousand, respectively. During the month of October 2021, of the unbilled receivable as of September 30, 2021. As of September 30, 2021, we had one customer that accounted for 10% of our consolidated contract receivables. As of December 31, 2020, we had no customer that accounted for over 10% of our consolidated contract receivables. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | Note 6 - Goodwill and Intangible Assets During the three months ended March 31, 2020, we recognized an impairment charge of $4.3 million of certain intangible assets as a result of the valuation analysis performed. The need for the valuation analysis was triggered by the macroeconomic impact of the COVID-19 pandemic on our operations. This analysis did not indicate impairment of goodwill. Our Step 1 goodwill impairment analysis includes the use of a discounted cash flow model that requires management to make assumptions regarding estimates of growth rates used to forecast revenue, operating margin and terminal value as well as determining the appropriate risk-adjusted discount rates and other factors that impact fair value determinations. The Company monitors operating results and events and circumstances that may indicate potential impairment of intangible assets. The Company performs an annual intangible assets impairment analysis at the year end, which includes the use of undiscounted cash flow and discounted cash flow models that requires management to make assumptions regarding estimates of growth rates used to forecast revenue, operating margin and terminal value as well as determining the appropriate risk adjusted discount rates and other factors that impact fair value determinations. The current assessment has no indication of impairment. Management concluded that there were no triggering events that occurred during the three and nine months ended September 30, 2021. The following table shows the gross carrying amount and accumulated amortization of definite-lived intangible assets: (in thousands) As of September 30, 2021 Gross Carrying Amount Accumulated Amortization Net Amortized intangible assets: Customer relationships $ 8,628 $ (6,219 ) $ 2,409 Trade names 1,689 (1,086 ) 603 Developed technology 471 (471 ) - Non-contractual customer relationships 433 (433 ) - Noncompete agreement 527 (405 ) 122 Alliance agreement 527 (356 ) 171 Others 167 (167 ) - Total $ 12,442 $ (9,137 ) $ 3,305 (in thousands) As of December 31, 2020 Gross Carrying Amount Accumulated Amortization Impact of Impairment Net Amortized intangible assets: Customer relationships $ 11,730 $ (5,504 ) $ (3,102 ) $ 3,124 Trade names 2,467 (1,020 ) (778 ) 669 Developed technology 471 (471 ) - - Non-contractual customer relationships 433 (433 ) - - Noncompete agreement 949 (336 ) (422 ) 191 Alliance agreement 527 (277 ) - 250 Others 167 (167 ) - - Total $ 16,744 $ (8,208 ) $ (4,302 ) $ 4,234 Amortization expense related to definite-lived intangible assets totaled $0.3 million and $0.4 million for the three months ended September 30, 2021 and 2020, respectively, and $0.9 million and $1.5 million for the nine months ended September 30, 2021 and 2020, 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: 2021 remainder $ 285 2022 910 2023 640 2024 435 2025 335 Thereafter 700 Total $ 3,305 |
Equipment, Software and Leaseho
Equipment, Software and Leasehold Improvements | 9 Months Ended |
Sep. 30, 2021 | |
Equipment, Software and Leasehold Improvements [Abstract] | |
Equipment, Software and Leasehold Improvements | Note 7 - Equipment, Software and Leasehold Improvements Equipment, software and leasehold improvements, net consist of the following: (in thousands) September 30, 2021 December 31, 2020 Computer and equipment $ 2,246 $ 2,229 Software 2,059 1,695 Leasehold improvements 659 660 Furniture and fixtures 839 848 5,803 5,432 Accumulated depreciation (5,011 ) (4,816 ) Equipment, software and leasehold improvements, net $ 792 $ 616 Depreciation expense was $216 thousand and $254 thousand for the nine months ended September 30, 2021 and 2020, respectively. Capitalization of internal-use software cost of $50 thousand and $365 thousand were recorded in software for the three and nine months ended September 30, 2021. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 8 - Fair Value of Financial Instruments ASC 820, Fair Value Measurement The levels of the fair value hierarchy established by ASC 820 are: Level 1: inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2: inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. A Level 2 input must be observable for substantially the full term of the asset or liability. Level 3: inputs are unobservable and reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. As of September 30, 2021 and December 31, 2020, we considered the recorded value of certain of our financial assets and liabilities, which consist primarily of cash and cash equivalents, contract receivable and accounts payable, to approximate fair value based upon their short-term nature. For the nine months ended September 30, 2021, we did not have any transfers into or out of Level 3. The following table presents assets measured at fair value at September 30, 2021: (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 $ 15 $ - $ - $ 15 Total assets 15 - - 15 The following table presents assets and liabilities measured at fair value at December 31, 2020: (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 $ 435 $ - $ - $ 435 Total assets $ 435 $ - $ - $ 435 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 9 - Stock-Based Compensation We recognize compensation expense for all equity-based compensation awards issued to employees and directors that are expected to vest. Stock compensation is calculated based upon the fair value of awards as of the grant date. During the three months ended , 2021 and 2020 , we recognized $0.3 million in stock-based compensation expense and $33 thousand of stock-based compensation expense related to equity awards, respectively. We recognized $0.8 million and $0.4 million of stock-based compensation expense related to equity awards for the months ended , 2021 and 2020 , respectively, under the fair value method. In addition to the equity-based compensation expense recognized, the Company recognized stock-based compensation related to the change in the fair value of cash-settled restricted stock units (RSUs) $0 and $6 thousand for the nine months ended September 30, 2021 and 2020, respectively. There was no change in the fair value of cash settled RSUs for the three months ended September 30, 2021 and 2020. During the three and nine months ended , 2021 , we granted approximately 20,000 and 824,661 time-based RSUs with an aggregate fair value of approximately $30 thousand and $1.4 million , respectively. During the three and months ended , 2020 , we granted approximately and 170,000 time-based RSUs with an aggregate fair value of $0.1 million and $0.2 million , respectively. A portion of the time-based RSUs vest quarterly in equal amounts over the course of quarters, and the remainder vest annually in equal amounts over the course of one to three years . GSE’s 1995 long-term incentive program (“LTIP”) provides for the issuance of performance-vesting and time-vesting restricted stock units to certain executives and employees. Vesting of the performance-vesting restricted stock units (“PRSU”) 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 Company’s 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 the three and months ended , 2021 , we did not grant any performance-based RSUs to employees. During the three months ended , 2020 , we did not grant any performance-based RSUs to employees and during the months ended , 2020 , we granted approximately 512,000 performance-based RSUs to key employees with an aggregate fair-value of $0.6 million . These awards vest over based upon achieving certain financial metrics achieved during fiscal 2022 for revenue and Adjusted EBITDA. The Company did not grant any stock options for three and months ended , 2021 and 2020 . |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt [Abstract] | |
Debt | Note 10 - Debt On December 29, 2016, we entered a 3-year $5.0 million revolving line of credit facility (“RLOC”) with the Citizens Bank, N.A. (the “Bank”) to fund general working capital needs and acquisitions. On May 11, 2018, we entered into the Amended and Restated Credit and Security Agreement (the “Credit Agreement” or the “Credit Facility”) to (a) expand the RLOC to include a letter of credit sub-facility and not be subject to a borrowing base and (b) to add a $25 million term loan facility, available to finance permitted acquisitions over the following 18 months. The credit facility was subject to certain financial covenants and reporting requirements and was scheduled to mature on May 11, 2023 and accrue interest at the USD LIBOR, plus a margin that varies depending on our overall leverage ratio. The RLOC had required monthly payments of only interest, with principal due at maturity, while our term loan draws required monthly payments of principal and interest based on an amortization schedule. Our obligations under the Credit Agreement are guaranteed by our wholly owned subsidiaries, now Hyperspring, Absolute, True North, DP Engineering and by any future material domestic subsidiaries (collectively, the "Guarantors"). We subsequently amended and ratified the Credit Agreement a number of times. More recently, during 2020, the COVID-19 pandemic impacted our operations and our projected ability to comply with certain financial covenants. As such, we amended the credit facility at various dates in 2020 to revise our fixed charge ratio and leverage ratio requirements as well as our Adjusted EBITDA requirement. In exchange for relaxed covenants or waivers of covenants for certain periods, we were required by the Bank to curtail our term debt. During 2020, we repaid approximately $18.5 million of term debt and we were required to meet certain liquidity covenants, which are tested bi-weekly. Due to a projected violation of the leverage ratio at the end of the first quarter, we signed the Ninth Amendment and Reaffirmation Agreement with an effective date of March 29, 2021. Pursuant to the Ninth Amendment and Reaffirmation Agreement, the Bank waived the fixed charge coverage ratio and leverage ratio for the quarters ending March 31 and June 30, 2021, and we agreed, for each quarter thereafter, that the fixed charge coverage ratio shall not be less than 1.10 to 1.00. In addition, we agreed to not exceed a maximum leverage ratio starting on September 30, 2021 as follows: (i) 3.25 to 1.00 for the period ending September 30, 2021; (ii) 3.00 to 1.00 for the period ending on December 31, 2021, (iii) 2.75 to 1.00 for the period ending March 31, 2022; (iv) 2.50 to 1.00 for the period ending June 30, 2022 and (v) 2.00 to 1.00 for the periods ending September 30, 2022 and each December 31st, March 31st, June 30th and September 30th thereafter. We were also required to maintain a minimum of $2.5 million in aggregate USA liquidity. As part of the amendment, we agreed, at closing, (i) to make a $0.5 million pay down of RLOC; (ii) RLOC commitment to be reduced to $4.25 million; and (iii) $0.5 million of RLOC will only be available for issuance of Letters of Credit. We also agreed to pay $0.5 million to reduce RLOC to $3.75 million by June 30, 2021 and to $3.5 million by September 30, 2021. Commencing December 31, 2021 and on the last day of each quarter, we will pay $75 thousand to reduce the RLOC. We incurred $25 thousand fees related to this amendment during the year ended December 31, 2020. Following We have experienced delays in commencing new projects and thus our ability to recognize revenue has been delayed for some contracts. Reductions in orders and other negative changes to orders experienced at the beginning of the pandemic have started to reverse in 2021, but not at the level expected as ongoing COVID concerns continue to hinder the pace of recovery. This deterioration in the recovery plan has resulted in breaching the Minimum Liquidity ratio subsequent to both June 30, 2021 and at September 30, 2021 as well as projected breaching of the Leverage and Fixed Charges ratio covenant. On November 12, 2021, due to these covenant violations, we signed the Tenth Amendment and Reaffirmation Agreement with an effective date of November 12, 2021 Revolving Line of Credit (“RLOC”) During the nine months ended September 30, 2021, we paid for $1.7 million and had a draw of $0.8 million on our RLOC. As of September 30, 2021, we had outstanding borrowings of $2.1 million under the RLOC and four letters of credit totaling $1.1 million outstanding to certain of our customers. The total borrowing capacity under RLOC was $3.5 million as of September 30, 2021. After consideration of letters of credit and the $0.5 million reserved for issuance of new letters of credit, there was no amount available for borrowing under the RLOC. We intend to continue using the RLOC for short-term working capital needs when capacity is available and for the issuance of letters of credit in connection with business operations, provided we remain in compliance with our covenants. Letter of credit issuance fees range between 1.25% and 2.00% of the value of the letter of credit, depending on our overall leverage ratio. We pay a fee for unused RLOC quarterly based on the average daily unused balance. |
Product Warranty
Product Warranty | 9 Months Ended |
Sep. 30, 2021 | |
Product Warranty [Abstract] | |
Product Warranty | Note 11 - Product Warranty We accrue for estimated warranty costs at the time the related revenue is recognized and based on historical experience and projected claims. Our System Design and Build contracts generally include a one year base warranty on the systems. The portion of our warranty provision expected to be incurred within 12 months is classified as current within accrued warranty and totals $560 thousand, and the remaining $171 thousand is classified as long-term within other liabilities. The activity in the accrued warranty accounts during the current period is as follows: (in thousands) Balance at January 1, 2021 $ 922 Current period recovery (92 ) Current period claims (100 ) Currency adjustment 1 Balance at September 30, 2021 $ 731 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2021 | |
Revenue [Abstract] | |
Revenue | Note 12 - Revenue We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers. We primarily generate revenue through three distinct revenue streams: (1) System Design and Build (“SDB”), (2) Software and (3) Training and Consulting Services across our Performance and Workforce Solutions segments. We recognize revenue from SDB and software contracts mainly through our Performance segment. We recognize training and consulting service contracts through both segments. The following table represents a disaggregation of revenue by type of goods or services for three and nine months ended September 30, 2021 and 2020, along with the reporting segment for each category: (in thousands) Three months ended Nine months ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Performance Improvement Solutions segment System Design and Build $ 1,623 $ 2,473 $ 4,712 $ 9,535 Over time 1,623 2,473 4,712 9,535 Software and Support 814 942 2,393 2,575 Point in time 52 444 274 1,084 Over time 762 498 2,119 1,491 Training and Consulting Services 4,937 3,842 14,212 13,130 Point in time 42 19 126 48 Over time 4,895 3,823 14,086 13,082 Workforce Solutions Training and Consulting Services 7,312 5,665 19,995 19,727 Point in time 126 - 375 - Over time 7,186 5,665 19,620 19,727 Total revenue $ 14,686 $ 12,922 $ 41,312 $ 44,967 The following table reflects revenue recognized in the reporting periods presented that was included in contract liabilities from contracts with customers as of the beginning of the periods presented: ( in thousands Three months ended Nine months ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Revenue recognized in the period from amounts included in billings in excess of revenue earned at the beginning of the period $ 835 $ 1,520 $ 4,139 $ 6,221 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Taxes [Abstract] | |
Income Taxes | Note 13 - Income Taxes The following table presents the provision for income taxes and our effective tax rates: (in thousands) Three months ended Nine months ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Income (loss) before income taxes $ 11,604 $ (545 ) $ 12,591 $ (8,902 ) Provision for income taxes 166 116 127 166 Effective tax rate 1.4 % (21.3 )% 1.0 % (1.9 )% Our income tax expense for the interim periods presented is determined using an estimate of our annual effective tax rate, adjusted for discrete items arising in that quarter. Total income tax benefit for the nine months ended September 30, 2021 was comprised mainly of foreign and state tax expense. Total income tax expense for the nine months ended September 30, 2020 was comprised mainly of foreign and state tax expense. Our effective income tax rate was 1.4% and 1.0% for the three and nine months ended September 30, 2021, respectively. For the three and nine months ended September 30, 2021, the difference between our income tax expense at an effective tax rate of 1.4% and 1.0% respectively, and the U.S. statutory federal income tax rate of 21% was primarily due to accruals related to uncertain tax positions for certain foreign tax contingencies, a change in tax valuation allowance in our U.S. entity, and discrete item adjustments for U.S. and foreign taxes. For the three months ended September 30, 2020, the difference between our income tax expense at an effective tax rate of (21.3%) and the U.S. statutory federal income tax rate of 21% was primarily due to accruals related to uncertain tax position for certain U.S. and foreign tax contingencies, a change in tax valuation allowance in our U.S. and China subsidiaries and discrete item adjustments for U.S. and foreign taxes. For the nine months ended September 30, 2020, the difference between our income tax expense at an effective tax rate of (1.9%) 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 tax valuation allowance in our U.S. and China subsidiaries, discrete item adjustments for the U.S. and foreign taxes, and the impact of the loss for impairment. Because of our net operating loss carryforwards, we are subject to U.S. federal and state income tax examinations from the year 2000 and forward and are subject to foreign tax examinations by tax authorities for years 2015 and forward. 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., a likelihood of more than 50%) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Interest and penalties related to income taxes are accounted for as income tax expense. The Company has an estimated $0.9 million of tax benefit that will be realized in the fourth quarter of 2021 upon the expiration of the statute of limitations of the tax year in which the uncertain tax position was taken. We recognize deferred tax assets to the extent that it is believed that these assets are more likely than not to be realized. We have evaluated all positive and negative evidence and determined that we will continue to assess a full valuation allowance on our U.S., China, and Slovakia net deferred assets as of September 30, 2021. We have determined that it is not more likely than not that the Company will realize the benefits of its deferred taxes in the U.S. and foreign jurisdictions. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | Note 14 - Leases We have lease agreements with lease and non-lease components, which are accounted for as a single lease. We apply 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 and whether we obtain 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) As of Operating Leases Classification September 30, 2021 December 31, 2020 Leased Assets Operating lease - right of use assets Long term assets $ 1,161 $ 1,562 Lease Liabilities Operating lease liabilities - Current Other current liabilities 1,085 1,138 Operating lease liabilities Long term liabilities 1,036 1,831 $ 2,121 $ 2,969 We executed a sublease agreement with a tenant to sublease 850 square feet from the Sykesville office space on September 13, 2021. This agreement is in addition to the two previous subleases for 3,650 square feet and 3,822 square feet entered into on May 1, 2019 and April 1, 2017, respectively. The addition of the third sublease is for a portion of the space previously abandoned in December 2019. The sublease does not relieve us of our primary lease obligation. The lessor agreements are all considered operating leases, maintaining the historical classification of the underlying lease. We do 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 lease income and expense recorded in the consolidated statements of operations incurred during the three and nine months ended September 30, 2021 and 2020, ( in thousands Three months ended Nine months ended Lease Cost Classification September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Operating lease cost (1) Selling, general and administrative expenses $ 179 $ 207 $ 548 $ 625 Short-term leases costs (2) Selling, general and administrative expenses 15 - 45 1 Sublease income (3) Selling, general and administrative expenses (32 ) (33 ) (96 ) (97 ) Net lease cost $ 162 $ 174 $ 497 $ 529 (1) Includes variable lease costs which are immaterial. (2) Includes leases maturing less than twelve months from the report date. (3) Sublease portfolio consists of three tenants, which sublease parts of our principal executive office located at 1332 Londontown Blvd, Suite 200, Sykesville, MD. The Company is obligated under certain noncancelable operating leases for office facilities and equipment. Future minimum lease payments under noncancelable operating leases as of September 30, 2021 are as follows (in thousands) (in thousands) Gross Future Minimum Lease Payments 2021 remainder $ 291 2022 1,171 2023 638 2024 122 2025 10 Thereafter 3 Total lease payments $ 2,235 Less: Interest 114 Present value of lease payments $ 2,121 We 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, we use the incremental borrowing rate as the lease discount rate. Lease Term and Discount Rate September 30, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 2.02 2.64 Weighted-average discount rate Operating leases 5.00 % 5.00 % The table below sets out the classification of lease payments in the consolidated statement of cash flows. (in thousands) Nine months ended Cash paid for amounts included in measurement of liabilities September 30, 2021 September 30, 2020 Operating cash flows used in operating leases $ 958 $ 1,015 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Information [Abstract] | |
Segment Information | Note 15 - Segment Information We have two reportable business segments. The Performance Improvement Solutions segment provides simulation, training and engineering products and services delivered across the breadth of industries we serve. Solutions include simulation for both training and engineering applications. Example 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 across all market segments through our Performance, True North consulting, and DP Engineering subsidiaries. Example trai ning applications include turnkey and custom training services. Contract terms are typically less than two Workforce Solutions segment provides specialized workforce solutions primarily to the nuclear industry, working at clients’ facilities. This business is managed through our Hyperspring and Absolute subsidiaries. The business model, management focus, margins and other factors clearly separate this business line from the rest of the GSE product and service portfolio. The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income taxes. Inter-segment revenue is eliminated in consolidation and is not significant: Three months ended Nine months ended (in thousands) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Revenue: Performance $ 7,375 $ 7,257 $ 21,318 $ 25,240 Workforce Solutions 7,311 5,665 19,994 19,727 Total revenue 14,686 12,922 41,312 44,967 Operating loss Performance (466 ) (74 ) (3,000 ) (2,041 ) Workforce Solutions (110 ) (1,249 ) (1,124 ) (2,105 ) Litigation - 952 - 91 Loss on impairment (3 ) - (3 ) (4,302 ) Operating loss (579 ) (371 ) (4,127 ) (8,357 ) Interest expense, net (32 ) (128 ) (135 ) (556 ) Gain on derivative instruments, net - 31 - 35 Other income, net 12,215 (77 ) 16,853 (24 ) Income (loss) before income taxes $ 11,604 $ (545 ) $ 12,591 $ (8,902 ) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 16 - Commitments and Contingencies Joyce v. Absolute Consulting, Inc. 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., case number 1:19 cv 00868 RDB, in the United States District Court for the District of Maryland. The lawsuit alleged that the plaintiff and certain other employees were not properly compensated for overtime hours worked. The Company was subsequently dismissed from the case, leaving Absolute as the sole defendant. On August 17, 2020, Absolute entered into a Settlement Agreement with the plaintiffs, with a maximum settlement amount of $1.5 million, which required Court approval. On September 8, 2020, the Settlement Agreement between Absolute and the plaintiffs was ratified by the Court, and the case was dismissed, although the parties remain bound by the terms of the settlement agreement. Following Court approval, Absolute made an initial payment toward the settlement amount, including legal fees, of $625 thousand. After the passing of an opt-in notice period expired, the final cost of settling this case, including plaintiff’s attorney fees was approximately $1.4 million. On September 29, 2020, the Company received $1.0 million from a general escrow account, originally set up as part of the Company’s purchase of Absolute during fiscal 2017. The Company presented the loss on Joyce legal settlement and the benefit from the proceeds from the release of escrow from the Absolute transaction in selling, general and administrative expenses, in the amount of $0.5 million for the year ended December 31, 2020. Per ASC 450 Accounting for Contingencies , the Company reviews potential items and areas where a loss contingency could arise. In the opinion of management, we are not a party to any legal proceeding, the outcome of which, in ma nagement’s opinion, individually or in the aggregate, would have a material effect on our consolidated results of operations, financial position or cash flows, other than as noted above. We expense legal defense costs as incurred. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17 - Subsequent Events On November 12, 2021, due to the violation of Q3 2021 leverage ratio, we signed the Tenth Amendment and Reaffirmation Agreement with an effective date of November 12, 2021, with our bank to waive the fixed charge coverage ratio and leverage ratio for the quarters ending September 30 and December 31, 2021, and we agreed, (i) interest on the outstanding principal amount of the RLOC shall accrue at the interest rate in effect for the RLOC from time to time, but the interest due and payable on the RLOC on each Interest Payment Date shall be determined by subtracting seventy-five (75) basis points from the Applicable Margin and (ii) the seventy-five (75) basis points of accrued interest on the RLOC not paid on any Interest Payment Date pursuant to clause (i) above shall be due and payable on the Termination Date or the date of payment in full of the RLOC. RLOC Amount” means (i) $3,500,000 (ii) on each date a payment in the amount of $250,000 is made pursuant to Subsection 2.1.5(d), the RLOC Amount immediately prior to such payment reduced by $250,000 and (iii) on March 31, 2022 and on each June 30, September 30, December 31 and March 31 thereafter, the RLOC Amount immediately prior to each such date reduced by $37,500. In addition, we agreed, by December 31, 2021, we will pay the Bank $250,000 to be applied to the principal amount outstanding under the RLOC. Commencing on March 31, 2022 and on each June 30, September 30, December 31 and March 31 thereafter, we will pay the Bank $75,000 to be applied to the principal amount outstanding under the RLOC. In addition, within the fifth (5th) Business Day after we have received, subsequent to November 1, 2021, Employee Retention Credits in an aggregate amount not less than $500,000, we will pay the Bank $250,000 to be applied to the principal amount outstanding under the RLOC. We are also required to maintain a minimum of $2.25 million in aggregate USA liquidity. We incurred $15 thousand of amendment fee related to this amendment. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Preparation | 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” or “we” or “our” or “the Company” are to GSE Systems, Inc. and our subsidiaries, collectively. The consolidated interim financial statements included herein have been prepared by GSE and are unaudited. In the opinion of our 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. All intercompany accounts and transactions have been eliminated in consolidation. 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 8 of Regulation S-X. The accompanying balance sheet data for the year ended December 31, 2020 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 our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the U.S. Securities and Exchange Commission on April 13, 2021. 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. Our most significant estimates relate to revenue recognition on contracts with customers, 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 stock-based compensation awards, and the recoverability of deferred tax assets. Actual results of these and other items not listed could differ from these estimates and those differences could be material. |
Going Concern | Going Concern In 2020, we had several projects (primarily in our Workforce Solutions business segment) pandemic. We amended our credit facility with Citizens Bank, N.A. (“the Bank”) in based upon expected covenant violations and have been required to curtail term debt in exchange for revised financial covenants. Scheduled term loan repayments and agreed upon curtailment required us to use million in available cash to pay-off our term debt in 2020. We signed a Ninth Amendment and Reaffirmation Agreement (the “ Ninth Amendment”) with the Bank on March 29, 2021 to waive the fixed charge coverage ratio and leverage ratio for the quarters ending March 31 and June 30, 2021, and to adjust the thresholds for future covenants to ease the risk of non-compliance experienced in previous quarters. We have experienced delays in commencing new projects and thus our ability to earn revenue has been delayed for these projects. Reductions in orders and other negative changes to orders experienced at the beginning of the pandemic have started to reverse in 2021, but not at the level expected as ongoing COVID concerns continue to hinder the pace of recovery. This deterioration in the recovery plan has resulted in breaching the Minimum Liquidity ratio subsequent to June 30, 2021 and we project breaching the Leverage and Fixed Charges ratio covenant (See Note 10). Our working capital position on September 30, 2021 was $6.7 million . On August 5, 2021, the Company received approval from Small Business Administration (“SBA”) that the PPP loan including all accrued interest thereon was forgiven . The COVID-19 macroeconomic environment is considered fluid and although recovery is anticipated to steadily occur over the next 12 months, issues that could result from the other COVID variants could cause a further decline in revenue or stress our ability to meet covenant requirements. Jurisdictions where our businesses operate across the country are pushing toward re-opening places of business and government support, through the American Rescue Plan Act of 2021, will continue to support the broader economy. We have recorded of employee retention credits (“ ”) to be refunded from the IRS and recorded an additional $2.2 million of ERCs from unremitted payroll taxes made available under the Coronavirus Aid, Relief and Economic Security Act (the “ ” However, the timing of these elements taking place are not predictable and may not serve to mitigate our situation or improve the Company’s health. Following the Ninth Amendment, our new covenant compliance remains dependent on meeting future projections, which are subject to the variability and unknown speed and extent of post-COVID-19 recovery. On November 12, 2021, due to the violation of Q3 2021 leverage ratio, we signed the Tenth Amendment and Reaffirmation Agreement with an effective date of November 12, 2021 to adjust the thresholds for future covenants to ease the risk of non-compliance (See Note 17) The Company’s management continues to explore raising capital through its access to the public markets or entering into alternative financing arrangements. Furthermore, while recovery has been slower to materialize than expected the Company has experienced an improvement in orders as well as a higher rate of opportunities across business segments. Future negative trends in operating results could be mitigated through various cost cutting measures including adjustments to headcount or compensation, vendor augmentation or delay of investment initiatives in the Company’s corporate office. These actions, which are further supported by positively trending macroeconomic conditions, and the potential of recovery of business and orders may ease the risk of further bank covenant violations. However, when considering the unpredictability of the above, there continues to be substantial doubt the Company will continue as a going concern. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements Adopted and Not Yet Adopted | Accounting pronouncements recently adopted In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities, Investments – Equity Method and Joint Ventures, and Derivatives and Hedging, which provides clarity for companies that hold equity securities at cost to first update the fair value of an investment, immediately prior to applying the Equity Method of Accounting; or clarity for companies that enter into forward contracts to purchase additional shares of an equity security that would then require the investee to account for the investment via the Equity Method. This ASU is applicable for public companies starting with fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. The Company adopted ASU 2020-01 on January 1, 2021. This standard did not have a significant impact to our consolidated financial statements since the Company does not currently hold any investments at cost. In September 2020, the FASB issued ASU 2020-10, Codification Improvements, which is part of an ongoing attempt to improve the consistency of the codification. Previously the option to disclose information in the footnotes to the financial statements was in one of two sections: Disclosure Section (Section 50) or Other Presentation Matters (Section 45). ASU 2020-10 conforms the disclosure requirements into Section 50 and provides additional information on specific guidance that was previously unclear or not included in the codification. This ASU is applicable for public companies starting with fiscal years beginning after December 15, 2020, with early adoption available for interim and annual financial statements not already filed and using the retrospective approach. however, the FASB does not believe that this should change any of the current reporting or disclosure requirements. The Company adopted ASU 2020-10 on January 1, 2021. The adoption of this standard did not have a material impact to our consolidated financial statements. Accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which introduces new guidance for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, including, but not limited to, trade and other receivables, held-to-maturity debt securities, loans and net investments in leases. The new guidance also modifies the impairment model for available-for-sale debt securities and requires the entities to determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. The standard also indicates that entities may not use the length of time a security has been in an unrealized loss position as a factor in concluding whether a credit loss exists. Early adoption is permitted for all entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. On October 16, 2019, the FASB voted to defer the deadlines for private companies and certain small public companies, including smaller reporting companies, to implement the new accounting standards on credit losses. The new effective date is January 1, 2023. As a smaller reporting company, we have elected to defer adoption in line with new deadlines and are currently evaluating the effects, if any, that the adoption of this guidance will have on our consolidated financial position, results of operations and cash flows. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
Basic and Diluted Loss per Sh_2
Basic and Diluted Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Basic and Diluted Loss per Share [Abstract] | |
Earnings (Loss) Per Share, Basic and Diluted | The number of common shares and common share equivalents used in the determination of basic and diluted loss per common share were as follows: (in thousands, except for share data) Three months ended Nine months ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Numerator: Net income (loss) attributed to common stockholders $ 11,438 $ (661 ) $ 12,464 $ (9,068 ) Denominator: Weighted-average shares outstanding for basic earnings per share 20,863,479 20,563,452 20,714,068 20,438,571 Effect of dilutive securities: Employee RSUs - - - - Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 20,863,479 20,563,452 20,714,068 20,438,571 Shares related to dilutive securities excluded because inclusion would be anti-dilutive 14,229 66,261 77,871 12,172 |
Contract Receivables (Tables)
Contract Receivables (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Contract Receivables [Abstract] | |
Contract Receivables | The components of contract receivables were as follows: (in thousands) September 30, 2021 December 31, 2020 Billed receivables $ 4,521 $ 5,694 Unbilled receivables 8,221 5,160 Allowance for doubtful accounts (213 ) (360 ) Total contract receivables, net $ 12,529 $ 10,494 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | The following table shows the gross carrying amount and accumulated amortization of definite-lived intangible assets: (in thousands) As of September 30, 2021 Gross Carrying Amount Accumulated Amortization Net Amortized intangible assets: Customer relationships $ 8,628 $ (6,219 ) $ 2,409 Trade names 1,689 (1,086 ) 603 Developed technology 471 (471 ) - Non-contractual customer relationships 433 (433 ) - Noncompete agreement 527 (405 ) 122 Alliance agreement 527 (356 ) 171 Others 167 (167 ) - Total $ 12,442 $ (9,137 ) $ 3,305 (in thousands) As of December 31, 2020 Gross Carrying Amount Accumulated Amortization Impact of Impairment Net Amortized intangible assets: Customer relationships $ 11,730 $ (5,504 ) $ (3,102 ) $ 3,124 Trade names 2,467 (1,020 ) (778 ) 669 Developed technology 471 (471 ) - - Non-contractual customer relationships 433 (433 ) - - Noncompete agreement 949 (336 ) (422 ) 191 Alliance agreement 527 (277 ) - 250 Others 167 (167 ) - - Total $ 16,744 $ (8,208 ) $ (4,302 ) $ 4,234 |
Finite-Lived Intangible Assets, Future Amortization Expense | Amortization expense related to definite-lived intangible assets totaled $0.3 million and $0.4 million for the three months ended September 30, 2021 and 2020, respectively, and $0.9 million and $1.5 million for the nine months ended September 30, 2021 and 2020, 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: 2021 remainder $ 285 2022 910 2023 640 2024 435 2025 335 Thereafter 700 Total $ 3,305 |
Equipment, Software and Lease_2
Equipment, Software and Leasehold Improvements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equipment, Software and Leasehold Improvements [Abstract] | |
Equipment, Software and Leasehold Improvements | Equipment, software and leasehold improvements, net consist of the following: (in thousands) September 30, 2021 December 31, 2020 Computer and equipment $ 2,246 $ 2,229 Software 2,059 1,695 Leasehold improvements 659 660 Furniture and fixtures 839 848 5,803 5,432 Accumulated depreciation (5,011 ) (4,816 ) Equipment, software and leasehold improvements, net $ 792 $ 616 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value of Financial Instruments [Abstract] | |
Assets and Liabilities Measured at Fair Value | The following table presents assets measured at fair value at September 30, 2021: (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 $ 15 $ - $ - $ 15 Total assets 15 - - 15 The following table presents assets and liabilities measured at fair value at December 31, 2020: (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 $ 435 $ - $ - $ 435 Total assets $ 435 $ - $ - $ 435 |
Product Warranty (Tables)
Product Warranty (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Product Warranty [Abstract] | |
Activities in the Accrued Warranty Accounts | The activity in the accrued warranty accounts during the current period is as follows: (in thousands) Balance at January 1, 2021 $ 922 Current period recovery (92 ) Current period claims (100 ) Currency adjustment 1 Balance at September 30, 2021 $ 731 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue [Abstract] | |
Disaggregation of Revenue | The following table represents a disaggregation of revenue by type of goods or services for three and nine months ended September 30, 2021 and 2020, along with the reporting segment for each category: (in thousands) Three months ended Nine months ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Performance Improvement Solutions segment System Design and Build $ 1,623 $ 2,473 $ 4,712 $ 9,535 Over time 1,623 2,473 4,712 9,535 Software and Support 814 942 2,393 2,575 Point in time 52 444 274 1,084 Over time 762 498 2,119 1,491 Training and Consulting Services 4,937 3,842 14,212 13,130 Point in time 42 19 126 48 Over time 4,895 3,823 14,086 13,082 Workforce Solutions Training and Consulting Services 7,312 5,665 19,995 19,727 Point in time 126 - 375 - Over time 7,186 5,665 19,620 19,727 Total revenue $ 14,686 $ 12,922 $ 41,312 $ 44,967 |
Balance of Contract Liabilities and Revenue Recognized in Reporting Period | The following table reflects revenue recognized in the reporting periods presented that was included in contract liabilities from contracts with customers as of the beginning of the periods presented: ( in thousands Three months ended Nine months ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Revenue recognized in the period from amounts included in billings in excess of revenue earned at the beginning of the period $ 835 $ 1,520 $ 4,139 $ 6,221 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Taxes [Abstract] | |
Provision For Income Taxes | The following table presents the provision for income taxes and our effective tax rates: (in thousands) Three months ended Nine months ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Income (loss) before income taxes $ 11,604 $ (545 ) $ 12,591 $ (8,902 ) Provision for income taxes 166 116 127 166 Effective tax rate 1.4 % (21.3 )% 1.0 % (1.9 )% |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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 and whether we obtain 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) As of Operating Leases Classification September 30, 2021 December 31, 2020 Leased Assets Operating lease - right of use assets Long term assets $ 1,161 $ 1,562 Lease Liabilities Operating lease liabilities - Current Other current liabilities 1,085 1,138 Operating lease liabilities Long term liabilities 1,036 1,831 $ 2,121 $ 2,969 |
Lease Income and Expenses | The table below summarizes lease income and expense recorded in the consolidated statements of operations incurred during the three and nine months ended September 30, 2021 and 2020, ( in thousands Three months ended Nine months ended Lease Cost Classification September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Operating lease cost (1) Selling, general and administrative expenses $ 179 $ 207 $ 548 $ 625 Short-term leases costs (2) Selling, general and administrative expenses 15 - 45 1 Sublease income (3) Selling, general and administrative expenses (32 ) (33 ) (96 ) (97 ) Net lease cost $ 162 $ 174 $ 497 $ 529 (1) Includes variable lease costs which are immaterial. (2) Includes leases maturing less than twelve months from the report date. (3) Sublease portfolio consists of three tenants, which sublease parts of our principal executive office located at 1332 Londontown Blvd, Suite 200, Sykesville, MD. |
Future Minimum Lease Payments | The Company is obligated under certain noncancelable operating leases for office facilities and equipment. Future minimum lease payments under noncancelable operating leases as of September 30, 2021 are as follows (in thousands) (in thousands) Gross Future Minimum Lease Payments 2021 remainder $ 291 2022 1,171 2023 638 2024 122 2025 10 Thereafter 3 Total lease payments $ 2,235 Less: Interest 114 Present value of lease payments $ 2,121 |
Operating Lease Weighted Average Remaining Lease Term And Discount Rate | We 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, we use the incremental borrowing rate as the lease discount rate. Lease Term and Discount Rate September 30, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 2.02 2.64 Weighted-average discount rate Operating leases 5.00 % 5.00 % |
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. (in thousands) Nine months ended Cash paid for amounts included in measurement of liabilities September 30, 2021 September 30, 2020 Operating cash flows used in operating leases $ 958 $ 1,015 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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: Three months ended Nine months ended (in thousands) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Revenue: Performance $ 7,375 $ 7,257 $ 21,318 $ 25,240 Workforce Solutions 7,311 5,665 19,994 19,727 Total revenue 14,686 12,922 41,312 44,967 Operating loss Performance (466 ) (74 ) (3,000 ) (2,041 ) Workforce Solutions (110 ) (1,249 ) (1,124 ) (2,105 ) Litigation - 952 - 91 Loss on impairment (3 ) - (3 ) (4,302 ) Operating loss (579 ) (371 ) (4,127 ) (8,357 ) Interest expense, net (32 ) (128 ) (135 ) (556 ) Gain on derivative instruments, net - 31 - 35 Other income, net 12,215 (77 ) 16,853 (24 ) Income (loss) before income taxes $ 11,604 $ (545 ) $ 12,591 $ (8,902 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Going Concern [Abstract] | |||||
Loan repayment | $ 18,500 | ||||
Working capital position | $ 6,700 | $ 6,700 | |||
Tax benefit recognized | $ 166 | $ 116 | 127 | $ 166 | |
Paycheck Protection Program [Member] | |||||
Going Concern [Abstract] | |||||
Amount recorded from the employee retention credit | 5,000 | ||||
Tax benefit recognized | $ 2,200 |
Basic and Diluted Loss per Sh_3
Basic and Diluted Loss per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator [Abstract] | ||||
Net income (loss) attributed to common stockholders | $ 11,438 | $ (661) | $ 12,464 | $ (9,068) |
Denominator [Abstract] | ||||
Weighted-average shares outstanding for basic earnings per share (in shares) | 20,863,479 | 20,563,452 | 20,714,068 | 20,438,571 |
Effect of dilutive securities [Abstract] | ||||
Employee RSUs (in shares) | 0 | 0 | 0 | 0 |
Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share (in shares) | 20,863,479 | 20,563,452 | 20,714,068 | 20,438,571 |
Shares related to dilutive securities excluded because inclusion would be anti-dilutive (in shares) | 14,229 | 66,261 | 77,871 | 12,172 |
Coronavirus Aid, Relief and E_2
Coronavirus Aid, Relief and Economic Security Act (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Employee Retention Credits [Abstract] | ||||
Tax benefit recognized | $ 166 | $ 116 | $ 127 | $ 166 |
Paycheck Protection Program [Member] | ||||
Debt Instruments [Abstract] | ||||
Other income | 10,100 | 10,100 | ||
Paycheck Protection Program Loan [Abstract] | ||||
Amount received from Paycheck Protection Program | 10,000 | 10,000 | ||
Employee Retention Credits [Abstract] | ||||
Tax benefit recognized | 2,200 | |||
Employee Retention Credits [Member] | ||||
Debt Instruments [Abstract] | ||||
Other income | 2,100 | 7,200 | ||
Employee Retention Credits [Abstract] | ||||
Refund of employee retention credit | 1,000 | 5,000 | ||
Tax benefit recognized | 1,400 | 2,200 | ||
Refund of employee retention credit received | 700 | |||
Refund of employee retention credit receivable | $ 4,300 | $ 4,300 |
Contract Receivables (Details)
Contract Receivables (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Oct. 31, 2021USD ($) | Sep. 30, 2021USD ($)Customer | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Components of contract receivables [Abstract] | ||||
Billed receivables | $ 4,521 | $ 5,694 | ||
Unbilled receivables | 8,221 | 5,160 | ||
Allowance for doubtful accounts | (213) | (360) | ||
Total contract receivables, net | 12,529 | $ 10,494 | ||
Bad debt (recovery) expense | (133) | $ 103 | ||
Unbilled Contract Receivables [Abstract] | ||||
Unbilled contract receivables invoiced | $ (831) | $ (1,195) | ||
Contract Receivable [Member] | ||||
Concentration Risk [Abstract] | ||||
Number of customers accounting for contract receivables | Customer | 1 | |||
Contract Receivable [Member] | Customer Concentration Risk [Member] | Customer [Member] | ||||
Concentration Risk [Abstract] | ||||
Percentage of contract receivables accounted by major customers | 10.00% | |||
Subsequent Event [Member] | ||||
Unbilled Contract Receivables [Abstract] | ||||
Unbilled contract receivables invoiced | $ 2,600 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Goodwill and Intangible Assets [Abstract] | ||||||
Impairment charges | $ 3 | $ 0 | $ 4,300 | $ 3 | $ 4,302 | |
Amortized Intangible Assets [Abstract] | ||||||
Gross carrying amount | 12,442 | 12,442 | $ 16,744 | |||
Accumulated amortization | (9,137) | (9,137) | (8,208) | |||
Impact of Impairment | (4,302) | |||||
Total | 3,305 | 3,305 | 4,234 | |||
Amortization of intangible assets | 286 | $ 414 | 929 | $ 1,528 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||||
2021 remainder | 285 | 285 | ||||
2022 | 910 | 910 | ||||
2023 | 640 | 640 | ||||
2024 | 435 | 435 | ||||
2025 | 335 | 335 | ||||
Thereafter | 700 | 700 | ||||
Total | 3,305 | 3,305 | 4,234 | |||
Customer Relationships [Member] | ||||||
Amortized Intangible Assets [Abstract] | ||||||
Gross carrying amount | 8,628 | 8,628 | 11,730 | |||
Accumulated amortization | (6,219) | (6,219) | (5,504) | |||
Impact of Impairment | (3,102) | |||||
Total | 2,409 | 2,409 | 3,124 | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||||
Total | 2,409 | 2,409 | 3,124 | |||
Trade Names [Member] | ||||||
Amortized Intangible Assets [Abstract] | ||||||
Gross carrying amount | 1,689 | 1,689 | 2,467 | |||
Accumulated amortization | (1,086) | (1,086) | (1,020) | |||
Impact of Impairment | (778) | |||||
Total | 603 | 603 | 669 | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||||
Total | 603 | 603 | 669 | |||
Developed Technology [Member] | ||||||
Amortized Intangible Assets [Abstract] | ||||||
Gross carrying amount | 471 | 471 | 471 | |||
Accumulated amortization | (471) | (471) | (471) | |||
Impact of Impairment | 0 | |||||
Total | 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) | |||
Impact of Impairment | 0 | |||||
Total | 0 | 0 | 0 | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||||
Total | 0 | 0 | 0 | |||
Noncompete Agreement [Member] | ||||||
Amortized Intangible Assets [Abstract] | ||||||
Gross carrying amount | 527 | 527 | 949 | |||
Accumulated amortization | (405) | (405) | (336) | |||
Impact of Impairment | (422) | |||||
Total | 122 | 122 | 191 | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||||
Total | 122 | 122 | 191 | |||
Alliance Agreement [Member] | ||||||
Amortized Intangible Assets [Abstract] | ||||||
Gross carrying amount | 527 | 527 | 527 | |||
Accumulated amortization | (356) | (356) | (277) | |||
Impact of Impairment | 0 | |||||
Total | 171 | 171 | 250 | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||||
Total | 171 | 171 | 250 | |||
Others [Member] | ||||||
Amortized Intangible Assets [Abstract] | ||||||
Gross carrying amount | 167 | 167 | 167 | |||
Accumulated amortization | (167) | (167) | (167) | |||
Impact of Impairment | 0 | |||||
Total | 0 | 0 | 0 | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||||
Total | $ 0 | $ 0 | $ 0 |
Equipment, Software and Lease_3
Equipment, Software and Leasehold Improvements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Equipment, Software and Leasehold Improvements, Net [Abstract] | |||||
Equipment, software and leasehold improvements | $ 5,803 | $ 5,803 | $ 5,432 | ||
Accumulated depreciation | (5,011) | (5,011) | (4,816) | ||
Equipment, software and leasehold improvements, net | 792 | 792 | 616 | ||
Depreciation expense | 69 | $ 76 | 216 | $ 254 | |
Computer and Equipment [Member] | |||||
Equipment, Software and Leasehold Improvements, Net [Abstract] | |||||
Equipment, software and leasehold improvements | 2,246 | 2,246 | 2,229 | ||
Software [Member] | |||||
Equipment, Software and Leasehold Improvements, Net [Abstract] | |||||
Equipment, software and leasehold improvements | 2,059 | 2,059 | 1,695 | ||
Capitalization of internal-use software cost | 50 | 365 | |||
Leasehold Improvements [Member] | |||||
Equipment, Software and Leasehold Improvements, Net [Abstract] | |||||
Equipment, software and leasehold improvements | 659 | 659 | 660 | ||
Furniture and Fixtures [Member] | |||||
Equipment, Software and Leasehold Improvements, Net [Abstract] | |||||
Equipment, software and leasehold improvements | $ 839 | $ 839 | $ 848 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Money market funds | $ 15 | $ 435 |
Total assets | 15 | 435 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Money market funds | 15 | 435 |
Total assets | 15 | 435 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Money market funds | 0 | 0 |
Total assets | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets and Liabilities Measured at Fair Value [Abstract] | ||
Money market funds | 0 | 0 |
Total assets | $ 0 | $ 0 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($)shares | Sep. 30, 2020USD ($)shares | Sep. 30, 2021USD ($)qtrshares | Sep. 30, 2020USD ($)shares | |
Share-based Compensation [Abstract] | ||||
Stock options granted (in shares) | shares | 0 | 0 | 0 | 0 |
Stock Option [Member] | ||||
Share-based Compensation [Abstract] | ||||
Stock-based compensation expense | $ 300 | $ 33 | $ 800 | $ 400 |
Restricted Stock Units [Member] | ||||
Share-based Compensation [Abstract] | ||||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | $ 6 |
Granted time-based RSUs (in shares) | shares | 20,000 | 130,000 | 824,661 | 170,000 |
Aggregate fair value for time-based RSUs | $ 30 | $ 100 | $ 1,400 | $ 200 |
Number of quarters time-based RSU's will vest quarterly | qtr | 8 | |||
Granted performance-based RSUs (in shares) | shares | 0 | 0 | 0 | 512,000 |
Aggregate fair value for performance-based RSUs | $ 600 | |||
Vesting period of performance based RSU's | 3 years | |||
Restricted Stock Units [Member] | Minimum [Member] | ||||
Share-based Compensation [Abstract] | ||||
Period in which time-based RSU's will vest annually in equal amounts | 1 year | |||
Restricted Stock Units [Member] | Maximum [Member] | ||||
Share-based Compensation [Abstract] | ||||
Period in which time-based RSU's will vest annually in equal amounts | 3 years |
Debt (Details)
Debt (Details) $ in Thousands | May 11, 2018USD ($) | Dec. 29, 2016USD ($) | Mar. 29, 2021USD ($) | Sep. 30, 2021USD ($)Letter | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021USD ($) | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) |
Line of Credit Facility [Abstract] | ||||||||||||||||
Repayments of debt | $ 18,500 | |||||||||||||||
Repayment on line of credit | $ 1,739 | $ 694 | ||||||||||||||
Amount drawn on revolving line of credit | 800 | $ 4,200 | ||||||||||||||
Revolving Credit Facility [Member] | ||||||||||||||||
Line of Credit Facility [Abstract] | ||||||||||||||||
Line of credit facility expiration period | 3 years | |||||||||||||||
Line of credit | $ 5,000 | 3,500 | ||||||||||||||
Repayment on line of credit | 1,700 | |||||||||||||||
Amount drawn on revolving line of credit | 800 | |||||||||||||||
Long-term debt | $ 2,100 | |||||||||||||||
Number of letters of credit | Letter | 4 | |||||||||||||||
Outstanding letter of credit balance | $ 1,100 | |||||||||||||||
Amount available at the reporting date | 0 | |||||||||||||||
Letters of credit reserved for issuance | $ 500 | |||||||||||||||
Revolving Credit Facility [Member] | Minimum [Member] | ||||||||||||||||
Line of Credit Facility [Abstract] | ||||||||||||||||
Percentage of letter of credit fees per annum | 1.25% | |||||||||||||||
Revolving Credit Facility [Member] | Maximum [Member] | ||||||||||||||||
Line of Credit Facility [Abstract] | ||||||||||||||||
Percentage of letter of credit fees per annum | 2.00% | |||||||||||||||
Ninth Amendment and Reaffirmation Agreement [Member] | ||||||||||||||||
Line of Credit Facility [Abstract] | ||||||||||||||||
Fixed charge coverage ratio | 1.10 | 1.10 | ||||||||||||||
Amendment fee amount | $ 25 | |||||||||||||||
Ninth Amendment and Reaffirmation Agreement [Member] | Plan [Member] | ||||||||||||||||
Line of Credit Facility [Abstract] | ||||||||||||||||
Fixed charge coverage ratio | 3.25 | 2 | 2 | 2 | 2 | 2 | 2.50 | 2.75 | 3 | |||||||
Ninth Amendment and Reaffirmation Agreement [Member] | Revolving Credit Facility [Member] | ||||||||||||||||
Line of Credit Facility [Abstract] | ||||||||||||||||
Liquidity | $ 2,500 | |||||||||||||||
Line of credit | $ 3,750 | $ 4,250 | ||||||||||||||
Repayment on line of credit | 500 | |||||||||||||||
Amount available at the reporting date | 500 | |||||||||||||||
Periodic payment | $ 500 | |||||||||||||||
Ninth Amendment and Reaffirmation Agreement [Member] | Revolving Credit Facility [Member] | Plan [Member] | ||||||||||||||||
Line of Credit Facility [Abstract] | ||||||||||||||||
Line of credit | $ 3,500 | |||||||||||||||
Amount available at the reporting date | $ 75 | |||||||||||||||
Term Loan [Member] | ||||||||||||||||
Line of Credit Facility [Abstract] | ||||||||||||||||
Line of credit facility expiration period | 18 months | |||||||||||||||
Line of credit | $ 25,000 | |||||||||||||||
Maturity date | May 11, 2023 |
Product Warranty (Details)
Product Warranty (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Product warranty provision [Abstract] | |
Warranty terms for SDB contracts | 1 year |
Accrued warranty, current | $ 560 |
Accrued warranty, noncurrent | 171 |
Activities in product warranty account [Abstract] | |
Balance at beginning of period | 922 |
Current period recovery | (92) |
Current period claims | (100) |
Currency adjustment | 1 |
Balance at end of period | $ 731 |
Revenue (Details)
Revenue (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)Stream | Sep. 30, 2020USD ($) | |
Disaggregation of Revenue [Abstract] | ||||
Revenue | $ 14,686 | $ 12,922 | $ 41,312 | $ 44,967 |
Number of distinct revenue streams | Stream | 3 | |||
Contract with Customer, Asset and Liability [Abstract] | ||||
Revenue recognized in the period from amounts included in billings in excess of revenue earned at the beginning of the period | 835 | 1,520 | $ 4,139 | 6,221 |
Performance Improvement Solutions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 7,375 | 7,257 | 21,318 | 25,240 |
Performance Improvement Solutions [Member] | System Design and Build [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 1,623 | 2,473 | 4,712 | 9,535 |
Performance Improvement Solutions [Member] | System Design and Build [Member] | Over Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 1,623 | 2,473 | 4,712 | 9,535 |
Performance Improvement Solutions [Member] | Software and Support [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 814 | 942 | 2,393 | 2,575 |
Performance Improvement Solutions [Member] | Software and Support [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 52 | 444 | 274 | 1,084 |
Performance Improvement Solutions [Member] | Software and Support [Member] | Over Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 762 | 498 | 2,119 | 1,491 |
Performance Improvement Solutions [Member] | Training and Consulting [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 4,937 | 3,842 | 14,212 | 13,130 |
Performance Improvement Solutions [Member] | Training and Consulting [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 42 | 19 | 126 | 48 |
Performance Improvement Solutions [Member] | Training and Consulting [Member] | Over Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 4,895 | 3,823 | 14,086 | 13,082 |
Workforce Solutions [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 7,311 | 5,665 | 19,994 | 19,727 |
Workforce Solutions [Member] | Training and Consulting [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 7,312 | 5,665 | 19,995 | 19,727 |
Workforce Solutions [Member] | Training and Consulting [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | 126 | 0 | 375 | 0 |
Workforce Solutions [Member] | Training and Consulting [Member] | Over Time [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenue | $ 7,186 | $ 5,665 | $ 19,620 | $ 19,727 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Taxes [Abstract] | ||||
Income (loss) before income taxes | $ 11,604 | $ (545) | $ 12,591 | $ (8,902) |
Provision for income taxes | $ 166 | $ 116 | $ 127 | $ 166 |
Effective tax rate | 1.40% | (21.30%) | 1.00% | (1.90%) |
Statutory federal income tax rate | 21.00% | 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% | |||
Estimated tax benefits | $ 900 | $ 900 | ||
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 | |||
Foreign [Member] | ||||
Income Tax Examination [Abstract] | ||||
Income tax examination, year under examination | 2015 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)ft²SubleaseTenant | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | ||
Leased Assets [Abstract] | ||||||
Operating lease - right of use assets | $ 1,161 | $ 1,161 | $ 1,562 | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Operating lease - right of use assets | Operating lease - right of use assets | Operating lease - right of use assets | |||
Lease Liabilities [Abstract] | ||||||
Operating lease liabilities - current | $ 1,085 | $ 1,085 | $ 1,138 | |||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities | Other current liabilities | |||
Operating lease liabilities - Noncurrent | $ 1,036 | $ 1,036 | $ 1,831 | |||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Operating lease liabilities - Noncurrent | Operating lease liabilities - Noncurrent | Operating lease liabilities - Noncurrent | |||
Operating lease liability | $ 2,121 | $ 2,121 | $ 2,969 | |||
Sublease Agreement [Abstract] | ||||||
Sublease square feet | ft² | 850 | |||||
Sublease date | Sep. 13, 2021 | |||||
Number of previous subleases | Sublease | 2 | |||||
Number of tenants | Tenant | 3 | |||||
Consolidated Statement of Operations Information [Abstract] | ||||||
Operating lease cost | [1] | 179 | $ 207 | $ 548 | $ 625 | |
Short-term leases costs | [2] | 15 | 0 | 45 | 1 | |
Sublease income | [3] | (32) | (33) | (96) | (97) | |
Net lease cost | 162 | $ 174 | 497 | 529 | ||
Minimum Lease Payments [Abstract] | ||||||
2021 remainder | 291 | 291 | ||||
2022 | 1,171 | 1,171 | ||||
2023 | 638 | 638 | ||||
2024 | 122 | 122 | ||||
2025 | 10 | 10 | ||||
Thereafter | 3 | 3 | ||||
Total lease payments | 2,235 | 2,235 | ||||
Less: Interest | 114 | 114 | ||||
Present value of lease payments | $ 2,121 | $ 2,121 | $ 2,969 | |||
Lease Term and Discount Rate [Abstract] | ||||||
Weighted-average remaining lease term (in years) | 2 years 7 days | 2 years 7 days | 2 years 7 months 20 days | |||
Weighted-average discount rate | 5.00% | 5.00% | 5.00% | |||
Other Information [Abstract] | ||||||
Operating cash flows used in operating leases | $ 958 | $ 1,015 | ||||
First Sublease [Member] | ||||||
Sublease Agreement [Abstract] | ||||||
Previously subleased square feet | ft² | 3,822 | |||||
Previous sublease date | Apr. 1, 2017 | |||||
Second Sublease [Member] | ||||||
Sublease Agreement [Abstract] | ||||||
Previously subleased square feet | ft² | 3,650 | |||||
Previous sublease date | May 1, 2019 | |||||
[1] | Includes variable lease costs which are immaterial. | |||||
[2] | Includes leases maturing less than twelve months from the report date. | |||||
[3] | Sublease portfolio consists of three 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 | 9 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2021USD ($)Segment | Sep. 30, 2020USD ($) | |
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 | $ 14,686 | $ 12,922 | $ 41,312 | $ 44,967 | |
Operating loss | (579) | (371) | (4,127) | (8,357) | |
Litigation | 0 | 952 | 0 | 91 | |
Loss on impairment | (3) | 0 | $ (4,300) | (3) | (4,302) |
Interest expense, net | (32) | (128) | (135) | (556) | |
Gain on derivative instruments, net | 0 | 31 | 0 | 35 | |
Other income, net | 12,215 | (77) | 16,853 | (24) | |
Income (loss) before income taxes | 11,604 | (545) | 12,591 | (8,902) | |
Performance [Member] | |||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||
Revenue | 7,375 | 7,257 | 21,318 | 25,240 | |
Operating loss | (466) | (74) | (3,000) | (2,041) | |
Workforce Solutions [Member] | |||||
Segment Reporting Information, Profit (Loss) [Abstract] | |||||
Revenue | 7,311 | 5,665 | 19,994 | 19,727 | |
Operating loss | $ (110) | $ (1,249) | $ (1,124) | $ (2,105) |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Sep. 08, 2020 | Aug. 17, 2020 | Dec. 31, 2020 | Sep. 29, 2020 |
Loss Contingency, Estimate [Abstract] | ||||
Initial payment on settlement | $ 625 | |||
Settlement expense | $ 1,400 | |||
Escrow balance | $ 1,000 | |||
Provision for loss on legal settlement | $ 500 | |||
Maximum [Member] | ||||
Loss Contingency, Estimate [Abstract] | ||||
Estimated gross settlement | $ 1,500 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Nov. 12, 2021 | Nov. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 29, 2016 |
Line of Credit Facility [Abstract] | |||||||
Repayment on line of credit | $ 1,739,000 | $ 694,000 | |||||
Revolving Credit Facility [Member] | |||||||
Line of Credit Facility [Abstract] | |||||||
Line of credit | 3,500,000 | $ 5,000,000 | |||||
Repayment on line of credit | $ 1,700,000 | ||||||
Tenth Amendment and Reaffirmation Agreement [Member] | Revolving Credit Facility [Member] | Plan [Member] | |||||||
Line of Credit Facility [Abstract] | |||||||
Decrease forgiveness of line of credit future payments | $ 37,500 | ||||||
Periodic payment | $ 75,000 | $ 250,000 | |||||
Tenth Amendment and Reaffirmation Agreement [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member] | |||||||
Line of Credit Facility [Abstract] | |||||||
Basis points | 0.75% | ||||||
Line of credit | $ 3,500,000 | ||||||
Repayment on line of credit | 250,000 | ||||||
Decrease forgiveness of line of credit | $ 250,000 | ||||||
Periodic payment | $ 250,000 | ||||||
Liquidity | 2,250,000 | ||||||
Amendment fee amount | 15,000 | ||||||
Tenth Amendment and Reaffirmation Agreement [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member] | Maximum [Member] | |||||||
Line of Credit Facility [Abstract] | |||||||
Employee retention credits aggregate amount | $ 500,000 |