Document and Entity Information
Document and Entity Information - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Apr. 25, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Mar. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | Q1 | ||
Entity Registrant Name | PERFICIENT INC | ||
Trading Symbol | 0 | ||
Entity Central Index Key | 1,085,869 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 35,057,705 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 5,484 | $ 6,307 |
Accounts receivable, net | 108,358 | 112,194 |
Prepaid expenses | 4,845 | 4,470 |
Other current assets | 4,444 | 6,237 |
Total current assets | 123,131 | 129,208 |
Property and equipment, net | 6,981 | 7,145 |
Goodwill | 305,142 | 305,238 |
Intangible assets, net | 47,271 | 51,066 |
Other non-current assets | 6,196 | 6,403 |
Total assets | 488,721 | 499,060 |
Current liabilities: | ||
Accounts payable | 11,146 | 23,196 |
Other current liabilities | 34,050 | 38,077 |
Total current liabilities | 45,196 | 61,273 |
Long-term debt | 56,000 | 55,000 |
Other non-current liabilities | 17,836 | 16,436 |
Total liabilities | 119,032 | 132,709 |
Stockholders' equity: | ||
Common stock (par value $.001 per share; 100,000,000 shares authorized; 47,729,655 shares issued and 33,374,011 shares outstanding as of March 31, 2018; 47,370,945 shares issued and 33,249,665 shares outstanding as of December 31, 2017) | 48 | 47 |
Additional paid-in capital | 407,707 | 403,906 |
Accumulated other comprehensive loss | (1,920) | (1,822) |
Treasury stock, at cost (14,355,644 shares as of March 31, 2018; 14,121,280 shares as of December 31, 2017) | (169,165) | (163,871) |
Retained earnings | 133,019 | 128,091 |
Total stockholders' equity | 369,689 | 366,351 |
Total liabilities and stockholders' equity | $ 488,721 | $ 499,060 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Condensed Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 47,729,655 | 47,370,945 |
Common stock, shares outstanding (in shares) | 33,374,011 | 33,249,665 |
Treasury stock, shares (in shares) | 14,355,644 | 14,121,280 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Revenues | $ 120,942 | $ 111,019 |
Cost of revenues (exclusive of depreciation and amortization, shown separately below) | ||
Cost of services | 79,227 | 68,979 |
Software and hardware costs | 0 | 5,965 |
Total cost of revenues | 79,227 | 74,944 |
Selling, general and administrative | 28,740 | 25,684 |
Depreciation | 1,034 | 1,259 |
Amortization | 3,883 | 3,625 |
Acquisition costs | 298 | 490 |
Adjustment to fair value of contingent consideration for purchase of business | 969 | 158 |
Income from operations | 6,791 | 4,859 |
Net interest expense | 374 | 347 |
Net other (income) expense | (2) | (18) |
Income before income taxes | 6,419 | 4,530 |
Provision for income taxes | 1,491 | 1,821 |
Net income | $ 4,928 | $ 2,709 |
Basic net income per share (in dollars per share) | $ 0.15 | $ 0.08 |
Diluted net income per share (in dollars per share) | $ 0.15 | $ 0.08 |
Shares used in computing basic net income per share (in shares) | 32,752 | 33,383 |
Shares used in computing diluted net income per share (in shares) | 33,790 | 34,294 |
Services [Member] | ||
Revenues | ||
Revenues | $ 120,196 | $ 104,021 |
Software and Hardware [Member] | ||
Revenues | ||
Revenues | $ 746 | $ 6,998 |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||
Net income | $ 4,928 | $ 2,709 |
Other comprehensive income (loss), net of reclassification adjustments: | ||
Foreign currency translation adjustment | (98) | 316 |
Comprehensive income | $ 4,830 | $ 3,025 |
Unaudited Condensed Consolidat6
Unaudited Condensed Consolidated Statement of Stockholders' Equity - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2017 | $ 47 | $ 403,906 | $ (1,822) | $ (163,871) | $ 128,091 | $ 366,351 |
Balance (in shares) at Dec. 31, 2017 | 33,250,000 | 33,249,665 | ||||
Proceeds from the sales of stock through the Employee Stock Purchase Plan | 39 | $ 39 | ||||
Proceeds from the sales of stock through the Employee Stock Purchase Plan (in shares) | 2,000 | |||||
Stock compensation related to restricted stock vesting and retirement savings plan contributions | $ 1 | 3,762 | 3,763 | |||
Stock compensation related to restricted stock vesting and retirement savings plan contributions (in shares) | 356,000 | |||||
Purchases of treasury stock and buyback of shares for taxes | (4,991) | (4,991) | ||||
Purchases of treasury stock and buyback of shares for taxes (in shares) | (220,000) | |||||
Surrender of stock in conjunction with net working capital settlement | (303) | (303) | ||||
Surrender of stock in conjunction with net working capital settlement, shares | (14,000) | |||||
Net income | 4,928 | 4,928 | ||||
Foreign currency translation adjustment | (98) | (98) | ||||
Balance at Mar. 31, 2018 | $ 48 | $ 407,707 | $ (1,920) | $ (169,165) | $ 133,019 | $ 369,689 |
Balance (in shares) at Mar. 31, 2018 | 33,374,000 | 33,374,011 |
Unaudited Condensed Consolidat7
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
OPERATING ACTIVITIES | ||
Net income | $ 4,928 | $ 2,709 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation | 1,034 | 1,259 |
Amortization | 3,883 | 3,625 |
Deferred income taxes | 950 | 1,502 |
Non-cash stock compensation and retirement savings plan contributions | 3,763 | 3,589 |
Adjustment to fair value of contingent consideration for purchase of business | 969 | 158 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 6,691 | 16,660 |
Other assets | 1,326 | (1,441) |
Accounts payable | (12,050) | (8,432) |
Other liabilities | (7,354) | (6,175) |
Net cash provided by operating activities | 4,140 | 13,454 |
INVESTING ACTIVITIES | ||
Purchase of property and equipment | (873) | (461) |
Capitalization of internally developed software costs | (86) | (362) |
Purchase of business, net of cash acquired | 0 | (7,144) |
Net cash used in investing activities | (959) | (7,967) |
FINANCING ACTIVITIES | ||
Proceeds from line of credit | 57,500 | 66,000 |
Payments on line of credit | (56,500) | (59,500) |
Payment of contingent consideration for purchase of business | 0 | (978) |
Proceeds from the sale of stock through the Employee Stock Purchase Plan | 39 | 47 |
Purchases of treasury stock | (2,130) | (8,122) |
Remittance of taxes withheld as part of a net share settlement of restricted stock vesting | (2,861) | (2,295) |
Net cash used in financing activities | (3,952) | (4,848) |
Effect of exchange rate on cash and cash equivalents | (52) | 135 |
Change in cash and cash equivalents | (823) | 774 |
Cash and cash equivalents at beginning of period | 6,307 | 10,113 |
Cash and cash equivalents at end of period | 5,484 | 10,887 |
Supplemental disclosures: | ||
Cash paid for income taxes | 678 | 237 |
Cash paid for interest | 293 | 235 |
Non-cash activity: | ||
Stock issued for purchase of business (including settlement of contingent consideration) | 0 | 2,286 |
Stock surrendered by sellers in conjunction with net working capital settlement | $ 303 | $ 0 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Description of Business and Principles of Consolidation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements of Perficient, Inc. and its subsidiaries (collectively, the "Company") have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and are presented in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC") applicable to interim financial information. Accordingly, certain note disclosures have been condensed or omitted. In the opinion of management, the interim unaudited condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the periods presented. These financial statements should be read in conjunction with the Company's consolidated financial statements and notes thereto filed with the SEC in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. Operating results for the three months ended March 31, 2018 may not be indicative of the results for the full fiscal year ending December 31, 2018. Certain prior period financial statement amounts have been reclassified to conform to current period presentation. This reclassification relates to reimbursable expenses, which have been combined with services revenues and cost of services within revenues and cost of revenues in the Unaudited Condensed Consolidated Statements of Operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates 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 and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates, and such differences could be material to the financial statements. Except for the accounting policies related to revenue recognition that were updated as a result of the adoption of the Financial Accounting Standards Board (the "FASB") issued Revenue from Contracts with Customers Revenue 3. Recent Accounting Pronouncements |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification ("ASC") Topic 606) Principal versus Agent Considerations Identifying Performance Obligations and Licensing Narrow-Scope Improvements and Practical Expedients Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers Impacts of ASC Topic 606 Adoption on Current Period Results Revenue Impacts of ASC Topic 606 Adoption on Current Period Results The impacts of ASC Topic 606 adoption on the Unaudited Condensed Consolidated Balance Sheet as of March 31, 2018 are as follows (in thousands): As Reported ASC Topic 606 Impact Without ASC Topic 606 Adoption Accounts receivable, net $ 108,358 $ (1,379) $ 106,979 Total assets 488,721 (1,379) 487,342 Other current liabilities 34,050 (1,379) 32,671 Total liabilities 119,032 (1,379) 117,653 The impacts of ASC Topic 606 adoption on the Unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2018 are as follows (in thousands): As Reported (Net Presentation) ASC Topic 606 Impact Without ASC Topic 606 Adoption (Gross Presentation) Revenues Services $ 120,196 $ — $ 120,196 Software and hardware 746 6,520 7,266 Total revenues 120,942 6,520 127,462 Cost of revenues Cost of services 79,227 — 79,227 Software and hardware costs — 6,520 6,520 Total cost of revenues 79,227 6,520 85,747 Income from operations 6,791 — 6,791 Net income 4,928 — 4,928 In February 2016, the FASB issued ASU No. 2016-02, Leases Leases, Leases Commitments and Contingencies |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue [Abstract] | |
Revenue | 4. Revenue The Company's revenues consist of services and software and hardware sales. Revenues are recognized when control of these services or goods are transferred to clients, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or goods. For a description of the Company's revenue recognition policy prior to January 1, 2018 under Software – Revenue Recognition, Revenue Recognition – Multiple-Element Arrangements Revenue Recognition Summary of Significant Accounting Policies, The following discussion relates to the Company's revenue recognition policy, effective January 1, 2018, under ASC Topic 606. Services Revenues Services revenues are primarily comprised of professional services that include developing, implementing, automating and extending business processes, technology infrastructure, and software applications. The Company's professional services span multiple industries, platforms and solutions; however, the Company has remained relatively diversified and does not believe that it has significant revenue concentration within any single industry, platform or solution. Professional services revenues are recognized over time as services are rendered. Most projects are performed on a time and materials basis, while a portion of revenues is derived from projects performed on a fixed fee or fixed fee percent complete basis. For time and material contracts, revenues are generally recognized and invoiced by multiplying the number of hours expended in the performance of the contract by the billing rates established in the contract. For fixed fee contracts, revenues are generally recognized and invoiced by multiplying the fixed rate per time period established in the contract by the number of time periods elapsed. For fixed fee percent complete contracts, revenues are generally recognized using an input method based on the ratio of hours expended to total estimated hours, and the client is invoiced according to the agreed-upon schedule detailing the amount and timing of payments in the contract. Clients are typically billed monthly for services provided during that month, but can be billed on a more or less frequent basis as determined by the contract. If the time is worked and approved at the end of a fiscal period and the invoice has not yet been sent to the client, the amount is recorded as revenue once the Company verifies all other revenue recognition criteria have been met, and the amount is classified as a receivable as the right to consideration is unconditional at that point. Amounts invoiced and collected in excess of revenues recognized are contract liabilities, which are classified as deferred revenues in the Unaudited Condensed Consolidated Balance Sheet. The term between invoicing and payment due date is not significant. Contracts for professional services provide for a general right, to the client or the Company, to cancel or terminate the contract within a given period of time (generally tice is required). The client is responsible for any time and expenses incurred up to the date of cancellation or termination of the contract. Certain contracts may include volume discounts or holdbacks, which are accounted for as variable consideration under ASC Topic 606, but are not typically significant. The Company estimates variable consideration based on historical experience and forecasted sales and includes the variable consideration in the transaction price. Other services revenues are comprised of hosting fees, partner referral fees, maintenance agreements, training and internally developed software-as-a-service ("SaaS") sales. Revenues from hosting fees, maintenance agreements, training and internally developed SaaS sales are generally recognized over time using a time-based measure of progress as services are rendered. Partner referral fees are recorded at a point in time upon meeting specified requirements set by each partner to earn the respective fee. On many professional service projects, the Company is also reimbursed for out-of-pocket expenses including travel and other project-related expenses. These reimbursements are included as a component of the transaction price of the respective professional services contract and are invoiced as the expenses are incurred. The Company structures its professional services arrangements to recover the cost of reimbursable expenses without a markup. Software and Hardware Revenues Software and hardware revenues are comprised of third-party software and hardware resales, in which the Company is considered the agent, and sales of internally developed software, in which the Company is considered the principal. Third-party software and hardware revenues are recognized and invoiced when the Company fulfils its obligation to arrange the sale, which occurs when the purchase order with the vendor is executed and the customer has access to the software or the hardware has been shipped to the customer. Internally developed software revenues are recognized and invoiced when control is transferred to the customer, which occurs when the software has been made available to the customer and the license term has commenced. Revenues from third-party software and hardware sales are recorded on a net basis, while revenues from internally developed software sales are recorded on a gross basis. There are no significant cancellation or termination-type provisions for the Company's software and hardware sales, and the term between invoicing and payment due date is not significant. Arrangements with Multiple Performance Obligations Arrangements with clients may contain multiple promises such as delivery of software, hardware, professional services or post-contract support services. These promises are accounted for as separate performance obligations if they are distinct. For arrangements with clients that contain multiple performance obligations, the transaction price is allocated to the separate performance obligations based on estimated relative standalone selling price, which is estimated by the expected cost plus a margin approach, taking into consideration market conditions and competitive factors. Contract Costs In accordance with the terms of the Company's sales commission plan, commissions are not earned until the related revenue is recognized. Therefore, sales commissions are expensed as they are incurred. Certain sales incentives are accrued based on achievement of specified bookings goals. For these incentives, the Company applies the practical expedient that allows the Company to expense the incentives as incurred, since the amortization period would have been one year or less. Deferred Revenue During the three months ended March 31, 2018, $2.8 million was recognized in revenue that was included in the deferred revenue balance at the beginning of the period. The changes in deferred revenue for the three months ended March 31, 2018 are as follows (in thousands): Balance at December 31, 2017 $ 3,278 Impact of ASC Topic 606 adoption (offset to Accounts Receivable) 2,806 Opening balance at January 1, 2018 6,084 Deferral of revenue 3,328 Recognition of deferred revenue (4,124) Other (398) Balance as of March 31, 2018 $ 4,890 Transaction Price Allocated to Remaining Performance Obligations Disaggregation of Revenue The following table presents revenue disaggregated by revenue source and pattern of revenue recognition (in thousands): Three Months Ended March 31, 2018 Over Time Point In Time Total Revenues Time and materials contracts $ 82,149 $ - $ 82,149 Fixed fee percent complete contracts 9,112 - 9,112 Fixed fee contracts 21,222 - 21,222 Reimbursable expenses 3,030 - 3,030 Total professional services fees 115,513 - 115,513 Other services revenue* 3,865 818 4,683 Total services 119,378 818 120,196 Software and hardware - 746 746 Total revenues $ 119,378 $ 1,564 $ 120,942 * Other services revenue primarily consists of hosting fees, maintenance, training, internally developed SaaS and partner referral fees. The following table presents revenue disaggregated by geographic area, as determined by the billing address of customers (in thousands): Three Months Ended March 31, 2018 United States $ 117,529 Canada 1,371 Other countries 2,042 Total revenues $ 120,942 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 5. Stock-Based Compensation The fair value of restricted stock awards is based on the value of the Company's common stock on the date of the grant. Stock-based compensation is accounted for in accordance with ASC Topic 718, Compensation – Stock Compensation Improvements to Employee Share-Based Payment Accounting Stock Award Plans The Company's Second Amended and Restated Perficient, Inc. 2012 Long Term Incentive Plan (as amended, the "Incentive Plan") allows for the granting of various types of stock awards, not to exceed a total of 7.0 million shares, to eligible individuals. The Compensation Committee of the Board of Directors administers the Incentive Plan and determines the terms of all stock awards made under the Incentive Plan. As of March 31, 2018, there were 2.6 million shares of Common Stock available for issuance under the Incentive Plan. Stock-based compensation cost recognized was approximately $3.9 million for the three months ended March 31, 2018 and $3.7 million for the three months ended March 31, 2017, which included $0.7 million and $0.6 million, respectively, of expense for retirement savings plan contributions. The associated current and future income tax benefits recognized wer . Restricted stock activity for the three months ended March 31, 2018 was as follows (shares in thousands): Shares Weighted-Average Grant Date Fair Value Restricted stock awards outstanding at December 31, 2017 1,436 $ 18.12 Awards granted 360 22.02 Awards vested (323) 19.30 Awards forfeited (35) 17.37 Restricted stock awards outstanding at March 31, 2018 1,438 $ 18.83 |
Net Income per Share
Net Income per Share | 3 Months Ended |
Mar. 31, 2018 | |
Net Income per Share [Abstract] | |
Net Income per Share | 6. Net Income per Share The following table presents the calculation of basic and diluted net income per share (in thousands, except per share information): Three Months Ended March 31, 2018 2017 Net income $ 4,928 $ 2,709 Basic: Weighted-average shares of common stock outstanding 32,752 33,383 Shares used in computing basic net income per share 32,752 33,383 Effect of dilutive securities: Restricted stock subject to vesting 491 402 Shares issuable for acquisition consideration (1) 547 509 Shares used in computing diluted net income per share 33,790 34,294 Basic net income per share $ 0.15 $ 0.08 Diluted net income per share $ 0.15 $ 0.08 Anti-dilutive restricted stock not included in the calculation of diluted net income per share 120 122 (1) For the three months ended March 31, 2018, this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm Systems, Inc. ("BioPharm"); (ii) the Asset Purchase Agreement with Zeon Solutions Incorporated and certain related entities (collectively, "Zeon"); (iii) the Asset Purchase Agreement with RAS & Associates, LLC ("RAS"); and (iv) the Asset Purchase Agreement with Clarity Consulting, Inc. and Truth Labs, LLC (together, "Clarity"), as part of the consideration. For the three months ended March 31, 2017, this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm; (ii) the Asset Purchase Agreement with Zeon; (iii) the Asset Purchase Agreement with The Pup Group, Inc. d/b/a Enlighten ("Enlighten"); and (iv) the Asset Purchase Agreement with RAS, as part of the consideration. Prior to 2018, the Company's Board of Directors authorized the repurchase of up to $135.0 million of Company common stock. On February 20, 2018, the Board of Directors authorized the expansion of the stock repurchase program by authorizing the repurchase of up to an additional $25.0 million of Company common stock for a total repurchase program of $160.0 million and extended the expiration date of the program from December 31, 2018 to December 31, 2019. The program could be suspended or discontinued at any time, based on market, economic, or business conditions. The timing and amount of repurchase transactions will be determined by management based on its evaluation of market conditions, share price, and other factors. Since the program's inception on August 11, 2008, the Company has repurchased approximately $137.1 million (12.5 million shares) of outstanding common stock through March 31, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies From time to time the Company is involved in legal proceedings, claims and litigation related to employee claims, contractual disputes and taxes in the ordinary course of business. Although the Company cannot predict the outcome of such matters, currently the Company has no reason to believe the disposition of any current matter could reasonably be expected to have a material adverse impact on the Company's financial position, results of operations or the ability to carry on any of its business activities. In June 2016, the Company entered into an agreement to purchase software licenses for internal use payable over a two-year period. As a result, the Company has recorded $0.8 million in "Other current liabilities" in the Condensed Consolidated Balance Sheet as of March 31, 2018 (unaudited). Certain of the Company's operating leases contain predetermined fixed escalations of minimum rentals during the original lease terms. For these leases, the Company recognizes the related rental expense on a straight-line basis over the life of the lease and records the difference between the amounts charged to operations and amounts paid as accrued rent expense. The Company leases office space and certain equipment under various operating lease agreements. The Company has the option to extend the term of certain lease agreements. Future minimum commitments under these lease agreements as of March 31, 2018 were as follows Operating Leases 2018 remaining $ 5,013 2019 6,650 2020 6,202 2021 4,728 2022 2,910 Thereafter 3,160 Total minimum lease payments $ 28,663 Rent expense for the three months ended March 31, 2018 and 2017 was $2.0 million and $1.9 million, respectively. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Components [Abstract] | |
Balance Sheet Components | 8. Balance Sheet Components March 31, 2018 (unaudited) December 31, 2017 (in thousands) Accounts receivable: Accounts receivable $ 65,393 $ 82,603 Unbilled revenues 44,389 30,863 Allowance for doubtful accounts (1,424) (1,272) Total $ 108,358 $ 112,194 Property and equipment: Computer hardware (useful life of 3 years) $ 13,268 $ 13,110 Furniture and fixtures (useful life of 5 years) 4,092 3,772 Leasehold improvements (useful life of 5 years) 3,038 2,836 Software (useful life of 1 to 7 years) 5,161 5,159 Less: Accumulated depreciation (18,578) (17,732) Total $ 6,981 $ 7,145 Other current liabilities: Accrued variable compensation $ 9,299 $ 16,842 Deferred revenue 4,890 3,278 Payroll related costs 3,035 2,971 Accrued subcontractor fees 450 469 Accrued medical claims expense 2,020 2,133 Professional fees 964 357 Estimated fair value of contingent consideration liability (1) 9,118 8,148 Other current liabilities 4,274 3,879 Total $ 34,050 $ 38,077 Other non-current liabilities: Deferred compensation liability $ 4,667 $ 4,409 Deferred income taxes 8,310 7,360 Other non-current liabilities 4,859 4,667 Total $ 17,836 $ 16,436 (1) As of March 31, 2018 and December 31, 2017, represents the fair value estimate of additional earnings-based contingent consideration that may be realized by Clarity twelve months after the acquisition. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | 9. Business Combinations 2017 Acquisitions Acquisition of RAS On January 3, 2017, the Company acquired substantially all of the assets of RAS through a wholly-owned subsidiary of the Company, pursuant to the terms of an Asset Purchase Agreement. The acquisition of RAS expands the Company's expertise in management consulting offerings with additional strategy, operations and business process optimization. The Company's total allocable purchase price consideration was $10.4 million. The purchase price was comprised of $7.1 million in cash paid and $2.1 million in Company common stock issued at closing reduced by $0.6 million as a result of a net working capital adjustment settled in Company common stock surrendered by RAS in 2017. The purchase price also included $1.8 million representing the initial fair value estimate of additional revenue and earnings-based contingent consideration, which may be realized by the seller twelve months after the closing date of the acquisition with a maximum cash payout of $3.8 million. As of March 31, 2018, the Company's best estimate of the fair value of the contingent consideration is zero. The Company incurred approximately $0.5 million in transaction costs, which were expensed when incurred. The Company allocated the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 0.9 Acquired intangible assets 5.1 Liabilities assumed (1.0) Goodwill 5.4 Total purchase price $ 10.4 The amount of goodwill expected to be deductible for tax purposes, excluding contingent consideration, is $3.7 million. Acquisition of Clarity On June 22, 2017, the Company acquired substantially all of the assets of Clarity, pursuant to the terms of an Asset Purchase Agreement. The acquisition of Clarity builds the Company's Microsoft offerings and qualifications and increases the Company's presence in the North Central region and, specifically, the Chicago market. The Company's total allocable purchase price consideration was $41.7 million. The purchase price was comprised of $30.7 million in cash paid and $7.3 million in Company common stock issued at closing reduced by $0.4 million as a result of the net working capital adjustment settled in Company common stock surrendered by Clarity in February 2018. The purchase price also included $4.1 million representing the initial fair value estimate of additional revenue and earnings-based contingent consideration, which may be realized by the seller twelve months after the closing date of the acquisition with a maximum cash payout of $9.2 million. As of March 31, 2018, the Company's best estimate of the fair value of the contingent consideration is $9.0 million, of which $8.1 million was recorded in "Other current liabilities" within the Consolidated Balance Sheet as of December 31, 2017. As a result, the Company recorded a pre-tax adjustment in "Adjustment to fair value of contingent consideration" on the Unaudited Condensed Consolidated Statement of Operations of $0.9 million during the three months ended March 31, 2018. The Company incurred approximately $0.9 million in transaction costs, which were expensed when incurred. As part of the consideration transferred for the acquisition of Clarity, the Company issued common stock to owners of Clarity who are continuing with the Company with restrictions that limit the ability to sell the common stock and that lapse over a certain period, or over an accelerated period upon meeting specified employment milestones. As such, an estimated $0.9 million of the common stock value was attributed to future compensation and recorded as an asset within "Other current assets" and "Other non-current assets" in the Unaudited Condensed Consolidated Balance Sheet as of March 31, 2018, to be amortized over the requisite service period. The Company allocated the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 6.0 Acquired intangible assets 15.0 Liabilities assumed (3.6) Goodwill 24.3 Total purchase price $ 41.7 The amount of goodwill expected to be deductible for tax purposes, excluding contingent consideration, is $22.1 million. The following table presents details of the intangible assets acquired during the year ended December 31, 2017 (dollars in millions): Weighted Average Useful Life Estimated Useful Life Aggregate Acquisitions Customer relationships 6 years 6 years $ 16.8 Customer backlog 1 year 3 months - 1 year 1.9 Non-compete agreements 5 years 2 - 5 years 0.7 Trade name 1 year 1 year 0.1 Internally developed software 4 years 4 years 0.6 Total acquired intangible assets $ 20.1 Pro-forma Results of Operations The following presents the unaudited pro-forma combined results of operations of the Company with the 2017 acquisitions for the three months ended March 31, 2018 and 2017, after giving effect to certain pro-forma adjustments and assuming the 2017 acquisitions were acquired as of the beginning of 2016. These unaudited pro-forma results are presented in compliance with the adoption of ASU No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations are not necessarily indicative of the actual consolidated results of operations had the acquisitions actually occurred on January 1, 2016 or of future results of operations of the consolidated entities (in thousands except per share data): Three Months Ended March 31, 2018 2017 Revenues $ 120,942 $ 118,663 Net income $ 5,982 $ 3,864 Basic net income per share $ 0.18 $ 0.11 Diluted net income per share $ 0.18 $ 0.11 Shares used in computing basic net income per share 33,087 33,720 Shares used in computing diluted net income per share 33,784 34,601 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 10. Goodwill and Intangible Assets Goodwill represents the excess purchase price over the fair value of net assets acquired, or net liabilities assumed, in a business combination. In accordance with ASC Topic 350, Intangibles – Goodwill and Other Other intangible assets include customer relationships, non-compete arrangements, trade names, customer backlog, and internally developed software, which are being amortized over the assets' estimated useful lives using the straight-line method. Estimated useful lives range from less than one year to ten years. Amortization of customer relationships, non-compete arrangements, trade names, customer backlog, and internally developed software is considered an operating expense and is included in "Amortization" in the accompanying Unaudited Condensed Consolidated Statements of Operations. The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances that might result in a lack of recoverability or revised useful life. Goodwill The changes in the carrying amount of goodwill for the three months ended March 31, 2018 are as follows (in thousands): Balance at December 31, 2017 $ 305,238 Effect of foreign currency translation adjustments (96) Balance at March 31, 2018 $ 305,142 Intangible Assets with Definite Lives The following table presents a summary of the Company's intangible assets that are subject to amortization (in thousands): March 31, 2018 December 31, 2017 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Customer relationships $ 71,976 $ (31,729) $ 40,247 $ 75,407 $ (32,307) $ 43,100 Non-compete agreements 1,556 (788) 768 1,556 (707) 849 Customer backlog 1,650 (1,279) 371 1,650 (866) 784 Trade name 100 (77) 23 100 (53) 47 Internally developed software 11,235 (5,373) 5,862 11,325 (5,039) 6,286 Total $ 86,517 $ (39,246) $ 47,271 $ 90,038 $ (38,972) $ 51,066 The estimated useful lives of identifiable intangible assets are as follows: Customer relationships 5 – 10 years Non-compete agreements 2 – 5 years Customer backlog 1 year Trade name 1 year Internally developed software 2 – 7 years Estimated annual amortization expense for the next five years ended December 31 and thereafter is as follows 2018 remaining $ 10,301 2019 $ 12,322 2020 $ 9,242 2021 $ 7,109 2022 $ 5,764 Thereafter $ 2,533 |
Line of Credit
Line of Credit | 3 Months Ended |
Mar. 31, 2018 | |
Line of Credit [Abstract] | |
Line of Credit | 11. Line of Credit On June 9, 2017, the Company entered into a he Credit Agreement provides for revolving credit borrowings up to a maximum principal amount of $125.0 million, subject to a commitment increase of $75.0 million. The Credit Agreement also allows for the issuance of letters of credit in the aggregate amount of up to $10.0 million at any one time; outstanding letters of credit reduce the credit available for revolving credit borrowings. As of March 31, 2018, the Company had one outstanding letter of credit for $0.3 million. Substantially all of the Company's assets are pledged to secure the credit facility. Borrowings under the Credit Agreement bear interest at the Company's option of the prime rate (4.75% on March 31, 2018) plus a margin ranging from 0.00% to 0.50% or one-month LIBOR (1.88% on March 31, 2018) plus a margin ranging from to 1.75%. The Company incurs an annual commitment fee of 0.15% to 0.20% on the unused portion of the line of credit. The additional margin amount and annual commitment fee are dependent on the level of outstanding borrowings. As of March 31, 2018, the Company had $68.7 million of unused borrowing capacity. The Company is required to comply with various financial covenants under the Credit Agreement. Specifically, the Company is required to maintain a ratio of earnings before interest, taxes, depreciation, and amortization ("EBITDA") plus stock compensation to interest expense for the previous four consecutive fiscal quarters of not less than 3.00 to 1.00 and a ratio of indebtedness to EBITDA plus stock compensation ("Leverage Ratio") of not more than 3.00 to 1.00. Additionally, the Credit Agreement currently restricts the payment of dividends that would result in a pro-forma Leverage Ratio of more than 2.00 to 1.00. At March 31, 2018, the Company was in compliance with all covenants under the Credit Agreement. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 12. Income Taxes The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Internal Revenue Service (the "IRS") has completed examinations of the Company's U.S. income tax returns or the statute of limitations has passed on returns for the years through 2010. The Company's 2011 through 2015 U.S. income tax returns are currently under examination by the IRS. The IRS has sought to disallow research credits in the total amount of $2.5 million on the Company's 2011, 2012 and 2013 U.S. income tax returns. The Company has exhausted all administrative appeals and formal mediation and has filed suit to resolve this dispute. The Company is awaiting a court date to be set by the U.S. Tax Court. The Company believes the research credits taken are appropriate and intends to vigorously defend its position. An amount of adjustment, if any, and the timing of such adjustment are not reasonably possible to estimate at this time. The total amount of research credits taken or expected to be taken in the Company's income tax returns for 2011 through March 31, 2018 is $9.1 million. Under the provisions of the ASC Subtopic 740-10-25, Income Taxes - Recognition The Company's effective tax rate was 23.2% for the three months ended March 31, 2018 compared to 40.2% for the three months ended March 31, 2017. The decrease in the effective rate is primarily due to the passage of the Tax Cuts and Jobs Act of 2017 (the "2017 Tax Act"). As of March 31, 2018, the Company's net non-current deferred tax liability was $8.3 million. Deferred tax liabilities relate to goodwill, intangibles, fixed asset depreciation, and prepaid expenses. Net non-current deferred tax liabilities are recorded in "Other non-current liabilities" on the Condensed Consolidated Balance Sheet as of March 31, 2018 (unaudited) and December 31, 2017. In general, it is the Company's practice and intention to reinvest the earnings of the Company's foreign subsidiaries in those operations. However, during the second quarter of 2017, the Company determined that as a result of changes in the business and macroeconomic environment, the foreign earnings of the Company's Chinese subsidiary were no longer permanently reinvested, and the Company repatriated $4.8 million in June 2017 and an additional $4.8 million in July 2017. A provision for the expected current and deferred taxes on repatriation of these earnings was recorded in the amount of $2.5 million during the second quarter of 2017. Approximately $1.6 million of this provision was reversed during the fourth quarter of 2017 due to the adoption of the 2017 Tax Act. Management intends to continue to permanently reinvest all other remaining current and prior earnings in its other foreign subsidiaries. Excluding China, foreign unremitted earnings of entities not included in the United States tax return have been included in the consolidated financial statements without giving effect to the United States taxes that may be payable on distribution to the United States because it is not anticipated such earnings will be remitted to the United States. Under current applicable tax laws, if the Company elects to remit some or all of the funds it has designated as indefinitely reinvested outside the United States, the amount remitted would be subject to non-U.S. withholding taxes. As of March 31, 2018, the aggregate unremitted earnings of the Company's foreign subsidiaries for which a deferred income tax liability has not been recorded was approximately $3.4 million, and the unrecognized deferred tax liability on unremitted earnings was approximately $0.2 million. U.S. Tax Reform On December 22, 2017, the U.S. government enacted the 2017 Tax Act. The 2017 Tax Act significantly revised the future ongoing U.S. corporate income tax by, among other things, lowering U.S. corporate income tax rates and implementing a territorial tax system. The SEC has issued rules that would allow for a measurement period of up to one year after the enactment date of the 2017 Tax Act to finalize the recording of the related tax impacts. Based on a continued analysis of the estimates and further guidance on the application of the law, it is anticipated that additional revisions may occur throughout the allowable measurement period. However, there have been no changes in estimates or additional guidance during the current quarter which would change the Company's assessment of the tax impacts recorded as of the prior year end. The Company currently anticipates finalizing and recording any resulting adjustments within a year of the enactment date. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments [Abstract] | |
Financial Instruments | 13. Financial Instruments In the normal course of business, the Company uses derivative financial instruments to manage foreign currency exchange rate risk. Currency exposure is monitored and managed by the Company as part of its risk management program which seeks to reduce the potentially adverse effects that market volatility could have on operating results. The Company's derivative financial instruments consist of non-deliverable foreign currency forward contracts. Derivative financial instruments are neither held nor issued by the Company for trading purposes. Derivatives Not Designated as Hedging Instruments Both the gain or loss on the derivatives not designated as hedging instruments and the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. Realized gains or losses and changes in the estimated fair value of foreign currency forward contracts that have not been designated as hedges were immaterial during each of the three months ended March 31, 2018 and 2017. Gains and losses on these contracts are recorded in net other expense (income) and net interest expense in the Unaudited Condensed Consolidated Statements of Operations and are offset by losses and gains on the related hedged items. The fair value of the Company's derivative instruments outstanding as of March 31, 2018 was immaterial. The notional amounts of the Company's derivative instruments outstanding were as follows (in thousands): March 31, 2018 December 31, 2017 Derivatives not designated as hedges Foreign exchange contracts $ 3,160 $ 3,979 Total derivatives not designated as hedges $ 3,160 $ 3,979 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events Acquisition of Southport Services Group On April 2, 2018, the Company acquired substantially all of the assets of Southport Services Group, LLC, a Virginia limited liability company ("Southport"), pursuant to the terms of an Asset Purchase Agreement. The Asset Purchase Agreement provided for approximately $11.3 million of cash to be paid at closing, subject to a net working capital adjustment, approximately 153,000 shares of Company common stock to be issued at closing and a maximum potential payout for additional revenue and earnings-based contingent consideration of $6.6 million, which may be realized by Southport twelve months after the closing date of the acquisition. The acquisition of Southport expands the Company's expertise in business intelligence and data warehousing services. Goodwill and intangible assets are expected to be recorded on the Consolidated Balance Sheet from the acquisition of Southport. As of May 1, 2018, the initial accounting for the business combination has not been completed, including the measurement of certain intangible assets and goodwill. Acquisition costs for the three months ended March 31, 2018 were $0.3 million. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates 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 and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates, and such differences could be material to the financial statements. Except for the accounting policies related to revenue recognition that were updated as a result of the adoption of the Financial Accounting Standards Board (the "FASB") issued Revenue from Contracts with Customers Revenue 3. Recent Accounting Pronouncements |
Revenue Recognition | 4. Revenue The Company's revenues consist of services and software and hardware sales. Revenues are recognized when control of these services or goods are transferred to clients, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or goods. For a description of the Company's revenue recognition policy prior to January 1, 2018 under Software – Revenue Recognition, Revenue Recognition – Multiple-Element Arrangements Revenue Recognition Summary of Significant Accounting Policies, |
Revenue (Policies)
Revenue (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue [Abstract] | |
Revenue Recognition | The following discussion relates to the Company's revenue recognition policy, effective January 1, 2018, under ASC Topic 606. Services Revenues Services revenues are primarily comprised of professional services that include developing, implementing, automating and extending business processes, technology infrastructure, and software applications. The Company's professional services span multiple industries, platforms and solutions; however, the Company has remained relatively diversified and does not believe that it has significant revenue concentration within any single industry, platform or solution. Professional services revenues are recognized over time as services are rendered. Most projects are performed on a time and materials basis, while a portion of revenues is derived from projects performed on a fixed fee or fixed fee percent complete basis. For time and material contracts, revenues are generally recognized and invoiced by multiplying the number of hours expended in the performance of the contract by the billing rates established in the contract. For fixed fee contracts, revenues are generally recognized and invoiced by multiplying the fixed rate per time period established in the contract by the number of time periods elapsed. For fixed fee percent complete contracts, revenues are generally recognized using an input method based on the ratio of hours expended to total estimated hours, and the client is invoiced according to the agreed-upon schedule detailing the amount and timing of payments in the contract. Clients are typically billed monthly for services provided during that month, but can be billed on a more or less frequent basis as determined by the contract. If the time is worked and approved at the end of a fiscal period and the invoice has not yet been sent to the client, the amount is recorded as revenue once the Company verifies all other revenue recognition criteria have been met, and the amount is classified as a receivable as the right to consideration is unconditional at that point. Amounts invoiced and collected in excess of revenues recognized are contract liabilities, which are classified as deferred revenues in the Unaudited Condensed Consolidated Balance Sheet. The term between invoicing and payment due date is not significant. Contracts for professional services provide for a general right, to the client or the Company, to cancel or terminate the contract within a given period of time (generally tice is required). The client is responsible for any time and expenses incurred up to the date of cancellation or termination of the contract. Certain contracts may include volume discounts or holdbacks, which are accounted for as variable consideration under ASC Topic 606, but are not typically significant. The Company estimates variable consideration based on historical experience and forecasted sales and includes the variable consideration in the transaction price. Other services revenues are comprised of hosting fees, partner referral fees, maintenance agreements, training and internally developed software-as-a-service ("SaaS") sales. Revenues from hosting fees, maintenance agreements, training and internally developed SaaS sales are generally recognized over time using a time-based measure of progress as services are rendered. Partner referral fees are recorded at a point in time upon meeting specified requirements set by each partner to earn the respective fee. On many professional service projects, the Company is also reimbursed for out-of-pocket expenses including travel and other project-related expenses. These reimbursements are included as a component of the transaction price of the respective professional services contract and are invoiced as the expenses are incurred. The Company structures its professional services arrangements to recover the cost of reimbursable expenses without a markup. Software and Hardware Revenues Software and hardware revenues are comprised of third-party software and hardware resales, in which the Company is considered the agent, and sales of internally developed software, in which the Company is considered the principal. Third-party software and hardware revenues are recognized and invoiced when the Company fulfils its obligation to arrange the sale, which occurs when the purchase order with the vendor is executed and the customer has access to the software or the hardware has been shipped to the customer. Internally developed software revenues are recognized and invoiced when control is transferred to the customer, which occurs when the software has been made available to the customer and the license term has commenced. Revenues from third-party software and hardware sales are recorded on a net basis, while revenues from internally developed software sales are recorded on a gross basis. There are no significant cancellation or termination-type provisions for the Company's software and hardware sales, and the term between invoicing and payment due date is not significant. Arrangements with Multiple Performance Obligations Arrangements with clients may contain multiple promises such as delivery of software, hardware, professional services or post-contract support services. These promises are accounted for as separate performance obligations if they are distinct. For arrangements with clients that contain multiple performance obligations, the transaction price is allocated to the separate performance obligations based on estimated relative standalone selling price, which is estimated by the expected cost plus a margin approach, taking into consideration market conditions and competitive factors. Contract Costs In accordance with the terms of the Company's sales commission plan, commissions are not earned until the related revenue is recognized. Therefore, sales commissions are expensed as they are incurred. Certain sales incentives are accrued based on achievement of specified bookings goals. For these incentives, the Company applies the practical expedient that allows the Company to expense the incentives as incurred, since the amortization period would have been one year or less. |
Stock-Based Compensation (Polic
Stock-Based Compensation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | The fair value of restricted stock awards is based on the value of the Company's common stock on the date of the grant. Stock-based compensation is accounted for in accordance with ASC Topic 718, Compensation – Stock Compensation Improvements to Employee Share-Based Payment Accounting |
Commitments and Contingencies (
Commitments and Contingencies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Legal Claims | From time to time the Company is involved in legal proceedings, claims and litigation related to employee claims, contractual disputes and taxes in the ordinary course of business. Although the Company cannot predict the outcome of such matters, currently the Company has no reason to believe the disposition of any current matter could reasonably be expected to have a material adverse impact on the Company's financial position, results of operations or the ability to carry on any of its business activities. |
Operating Leases | Certain of the Company's operating leases contain predetermined fixed escalations of minimum rentals during the original lease terms. For these leases, the Company recognizes the related rental expense on a straight-line basis over the life of the lease and records the difference between the amounts charged to operations and amounts paid as accrued rent expense. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | Goodwill represents the excess purchase price over the fair value of net assets acquired, or net liabilities assumed, in a business combination. In accordance with ASC Topic 350, Intangibles – Goodwill and Other Other intangible assets include customer relationships, non-compete arrangements, trade names, customer backlog, and internally developed software, which are being amortized over the assets' estimated useful lives using the straight-line method. Estimated useful lives range from less than one year to ten years. Amortization of customer relationships, non-compete arrangements, trade names, customer backlog, and internally developed software is considered an operating expense and is included in "Amortization" in the accompanying Unaudited Condensed Consolidated Statements of Operations. The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances that might result in a lack of recoverability or revised useful life. |
Financial Instruments (Policies
Financial Instruments (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments [Abstract] | |
Financial Instruments | Derivatives Not Designated as Hedging Instruments Both the gain or loss on the derivatives not designated as hedging instruments and the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. Realized gains or losses and changes in the estimated fair value of foreign currency forward contracts that have not been designated as hedges were immaterial during each of the three months ended March 31, 2018 and 2017. Gains and losses on these contracts are recorded in net other expense (income) and net interest expense in the Unaudited Condensed Consolidated Statements of Operations and are offset by losses and gains on the related hedged items. The fair value of the Company's derivative instruments outstanding as of March 31, 2018 was immaterial. |
Recent Accounting Pronounceme28
Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Recent Accounting Pronouncements [Abstract] | |
Impacts of ASC Topic 606 Adoption on Current Period Results | The impacts of ASC Topic 606 adoption on the Unaudited Condensed Consolidated Balance Sheet as of March 31, 2018 are as follows (in thousands): As Reported ASC Topic 606 Impact Without ASC Topic 606 Adoption Accounts receivable, net $ 108,358 $ (1,379) $ 106,979 Total assets 488,721 (1,379) 487,342 Other current liabilities 34,050 (1,379) 32,671 Total liabilities 119,032 (1,379) 117,653 The impacts of ASC Topic 606 adoption on the Unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2018 are as follows (in thousands): As Reported (Net Presentation) ASC Topic 606 Impact Without ASC Topic 606 Adoption (Gross Presentation) Revenues Services $ 120,196 $ — $ 120,196 Software and hardware 746 6,520 7,266 Total revenues 120,942 6,520 127,462 Cost of revenues Cost of services 79,227 — 79,227 Software and hardware costs — 6,520 6,520 Total cost of revenues 79,227 6,520 85,747 Income from operations 6,791 — 6,791 Net income 4,928 — 4,928 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue [Abstract] | |
Deferred Revenue | During the three months ended March 31, 2018, $2.8 million was recognized in revenue that was included in the deferred revenue balance at the beginning of the period. The changes in deferred revenue for the three months ended March 31, 2018 are as follows (in thousands): Balance at December 31, 2017 $ 3,278 Impact of ASC Topic 606 adoption (offset to Accounts Receivable) 2,806 Opening balance at January 1, 2018 6,084 Deferral of revenue 3,328 Recognition of deferred revenue (4,124) Other (398) Balance as of March 31, 2018 $ 4,890 |
Disaggregation of Revenue | The following table presents revenue disaggregated by revenue source and pattern of revenue recognition (in thousands): Three Months Ended March 31, 2018 Over Time Point In Time Total Revenues Time and materials contracts $ 82,149 $ - $ 82,149 Fixed fee percent complete contracts 9,112 - 9,112 Fixed fee contracts 21,222 - 21,222 Reimbursable expenses 3,030 - 3,030 Total professional services fees 115,513 - 115,513 Other services revenue* 3,865 818 4,683 Total services 119,378 818 120,196 Software and hardware - 746 746 Total revenues $ 119,378 $ 1,564 $ 120,942 * Other services revenue primarily consists of hosting fees, maintenance, training, internally developed SaaS and partner referral fees. The following table presents revenue disaggregated by geographic area, as determined by the billing address of customers (in thousands): Three Months Ended March 31, 2018 United States $ 117,529 Canada 1,371 Other countries 2,042 Total revenues $ 120,942 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation [Abstract] | |
Restricted Stock Activity | Restricted stock activity for the three months ended March 31, 2018 was as follows (shares in thousands): Shares Weighted-Average Grant Date Fair Value Restricted stock awards outstanding at December 31, 2017 1,436 $ 18.12 Awards granted 360 22.02 Awards vested (323) 19.30 Awards forfeited (35) 17.37 Restricted stock awards outstanding at March 31, 2018 1,438 $ 18.83 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Net Income per Share [Abstract] | |
Basic and Diluted Net Income per Share | The following table presents the calculation of basic and diluted net income per share (in thousands, except per share information): Three Months Ended March 31, 2018 2017 Net income $ 4,928 $ 2,709 Basic: Weighted-average shares of common stock outstanding 32,752 33,383 Shares used in computing basic net income per share 32,752 33,383 Effect of dilutive securities: Restricted stock subject to vesting 491 402 Shares issuable for acquisition consideration (1) 547 509 Shares used in computing diluted net income per share 33,790 34,294 Basic net income per share $ 0.15 $ 0.08 Diluted net income per share $ 0.15 $ 0.08 Anti-dilutive restricted stock not included in the calculation of diluted net income per share 120 122 (1) For the three months ended March 31, 2018, this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm Systems, Inc. ("BioPharm"); (ii) the Asset Purchase Agreement with Zeon Solutions Incorporated and certain related entities (collectively, "Zeon"); (iii) the Asset Purchase Agreement with RAS & Associates, LLC ("RAS"); and (iv) the Asset Purchase Agreement with Clarity Consulting, Inc. and Truth Labs, LLC (together, "Clarity"), as part of the consideration. For the three months ended March 31, 2017, this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm; (ii) the Asset Purchase Agreement with Zeon; (iii) the Asset Purchase Agreement with The Pup Group, Inc. d/b/a Enlighten ("Enlighten"); and (iv) the Asset Purchase Agreement with RAS, as part of the consideration. |
Commitments and Contingencies32
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Future Minimum Commitments Under Operating Lease Agreements | The Company leases office space and certain equipment under various operating lease agreements. The Company has the option to extend the term of certain lease agreements. Future minimum commitments under these lease agreements as of March 31, 2018 were as follows Operating Leases 2018 remaining $ 5,013 2019 6,650 2020 6,202 2021 4,728 2022 2,910 Thereafter 3,160 Total minimum lease payments $ 28,663 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Components [Abstract] | |
Accounts Receivable | March 31, 2018 (unaudited) December 31, 2017 (in thousands) Accounts receivable: Accounts receivable $ 65,393 $ 82,603 Unbilled revenues 44,389 30,863 Allowance for doubtful accounts (1,424) (1,272) Total $ 108,358 $ 112,194 |
Property and Equipment | Property and equipment: Computer hardware (useful life of 3 years) $ 13,268 $ 13,110 Furniture and fixtures (useful life of 5 years) 4,092 3,772 Leasehold improvements (useful life of 5 years) 3,038 2,836 Software (useful life of 1 to 7 years) 5,161 5,159 Less: Accumulated depreciation (18,578) (17,732) Total $ 6,981 $ 7,145 |
Other Current Liabilities | Other current liabilities: Accrued variable compensation $ 9,299 $ 16,842 Deferred revenue 4,890 3,278 Payroll related costs 3,035 2,971 Accrued subcontractor fees 450 469 Accrued medical claims expense 2,020 2,133 Professional fees 964 357 Estimated fair value of contingent consideration liability (1) 9,118 8,148 Other current liabilities 4,274 3,879 Total $ 34,050 $ 38,077 |
Other Non-Current Liabilities | Other non-current liabilities: Deferred compensation liability $ 4,667 $ 4,409 Deferred income taxes 8,310 7,360 Other non-current liabilities 4,859 4,667 Total $ 17,836 $ 16,436 (1) As of March 31, 2018 and December 31, 2017, represents the fair value estimate of additional earnings-based contingent consideration that may be realized by Clarity twelve months after the acquisition. |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Intangible Assets Acquired | The following table presents details of the intangible assets acquired during the year ended December 31, 2017 (dollars in millions): Weighted Average Useful Life Estimated Useful Life Aggregate Acquisitions Customer relationships 6 years 6 years $ 16.8 Customer backlog 1 year 3 months - 1 year 1.9 Non-compete agreements 5 years 2 - 5 years 0.7 Trade name 1 year 1 year 0.1 Internally developed software 4 years 4 years 0.6 Total acquired intangible assets $ 20.1 |
Pro-Forma Results of Operations | These unaudited pro-forma results are presented in compliance with the adoption of ASU No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations are not necessarily indicative of the actual consolidated results of operations had the acquisitions actually occurred on January 1, 2016 or of future results of operations of the consolidated entities (in thousands except per share data): Three Months Ended March 31, 2018 2017 Revenues $ 120,942 $ 118,663 Net income $ 5,982 $ 3,864 Basic net income per share $ 0.18 $ 0.11 Diluted net income per share $ 0.18 $ 0.11 Shares used in computing basic net income per share 33,087 33,720 Shares used in computing diluted net income per share 33,784 34,601 |
RAS [Member] | |
Business Combinations [Abstract] | |
Allocation of Total Purchase Price Consideration | The Company allocated the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 0.9 Acquired intangible assets 5.1 Liabilities assumed (1.0) Goodwill 5.4 Total purchase price $ 10.4 |
Clarity Consultants [Member] | |
Business Combinations [Abstract] | |
Allocation of Total Purchase Price Consideration | The Company allocated the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 6.0 Acquired intangible assets 15.0 Liabilities assumed (3.6) Goodwill 24.3 Total purchase price $ 41.7 |
Goodwill and Intangible Asset35
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill | The changes in the carrying amount of goodwill for the three months ended March 31, 2018 are as follows (in thousands): Balance at December 31, 2017 $ 305,238 Effect of foreign currency translation adjustments (96) Balance at March 31, 2018 $ 305,142 |
Intangible Assets | The following table presents a summary of the Company's intangible assets that are subject to amortization (in thousands): March 31, 2018 December 31, 2017 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Customer relationships $ 71,976 $ (31,729) $ 40,247 $ 75,407 $ (32,307) $ 43,100 Non-compete agreements 1,556 (788) 768 1,556 (707) 849 Customer backlog 1,650 (1,279) 371 1,650 (866) 784 Trade name 100 (77) 23 100 (53) 47 Internally developed software 11,235 (5,373) 5,862 11,325 (5,039) 6,286 Total $ 86,517 $ (39,246) $ 47,271 $ 90,038 $ (38,972) $ 51,066 |
Estimated Useful Lives of Intangible Assets | The estimated useful lives of identifiable intangible assets are as follows: Customer relationships 5 – 10 years Non-compete agreements 2 – 5 years Customer backlog 1 year Trade name 1 year Internally developed software 2 – 7 years |
Estimated Annual Amortization Expense | Estimated annual amortization expense for the next five years ended December 31 and thereafter is as follows 2018 remaining $ 10,301 2019 $ 12,322 2020 $ 9,242 2021 $ 7,109 2022 $ 5,764 Thereafter $ 2,533 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments [Abstract] | |
Notional Amounts of Derivative Instruments Outstanding | The notional amounts of the Company's derivative instruments outstanding were as follows (in thousands): March 31, 2018 December 31, 2017 Derivatives not designated as hedges Foreign exchange contracts $ 3,160 $ 3,979 Total derivatives not designated as hedges $ 3,160 $ 3,979 |
Recent Accounting Pronounceme37
Recent Accounting Pronouncements, Impact on Unaudited Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets [Abstract] | ||
Accounts receivable, net | $ 108,358 | $ 112,194 |
Total assets | 488,721 | 499,060 |
Liabilities [Abstract] | ||
Other current liabilities | 34,050 | 38,077 |
Total liabilities | 119,032 | $ 132,709 |
ASC Topic 606 Impact [Member] | ASU 2014-09 [Member] | ||
Assets [Abstract] | ||
Accounts receivable, net | (1,379) | |
Total assets | (1,379) | |
Liabilities [Abstract] | ||
Other current liabilities | (1,379) | |
Total liabilities | (1,379) | |
Without ASC Topic 606 Adoption [Member] | ASU 2014-09 [Member] | ||
Assets [Abstract] | ||
Accounts receivable, net | 106,979 | |
Total assets | 487,342 | |
Liabilities [Abstract] | ||
Other current liabilities | 32,671 | |
Total liabilities | $ 117,653 |
Recent Accounting Pronounceme38
Recent Accounting Pronouncements, Impact on Unaudited Condensed Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidated Statement of Operations [Abstract] | ||
Revenues | $ 120,942 | $ 111,019 |
Cost of Revenues [Abstract] | ||
Cost of services | 79,227 | 68,979 |
Software and hardware costs | 0 | 5,965 |
Total cost of revenues | 79,227 | 74,944 |
Income from operations | 6,791 | 4,859 |
Net income | 4,928 | 2,709 |
Services [Member] | ||
Condensed Consolidated Statement of Operations [Abstract] | ||
Revenues | 120,196 | 104,021 |
Software and Hardware [Member] | ||
Condensed Consolidated Statement of Operations [Abstract] | ||
Revenues | 746 | $ 6,998 |
ASC Topic 606 Impact [Member] | ASU 2014-09 [Member] | ||
Condensed Consolidated Statement of Operations [Abstract] | ||
Revenues | 6,520 | |
Cost of Revenues [Abstract] | ||
Cost of services | 0 | |
Software and hardware costs | 6,520 | |
Total cost of revenues | 6,520 | |
Income from operations | 0 | |
Net income | 0 | |
ASC Topic 606 Impact [Member] | ASU 2014-09 [Member] | Services [Member] | ||
Condensed Consolidated Statement of Operations [Abstract] | ||
Revenues | 0 | |
ASC Topic 606 Impact [Member] | ASU 2014-09 [Member] | Software and Hardware [Member] | ||
Condensed Consolidated Statement of Operations [Abstract] | ||
Revenues | 6,520 | |
Without ASC Topic 606 Adoption [Member] | ASU 2014-09 [Member] | ||
Condensed Consolidated Statement of Operations [Abstract] | ||
Revenues | 127,462 | |
Cost of Revenues [Abstract] | ||
Cost of services | 79,227 | |
Software and hardware costs | 6,520 | |
Total cost of revenues | 85,747 | |
Income from operations | 6,791 | |
Net income | 4,928 | |
Without ASC Topic 606 Adoption [Member] | ASU 2014-09 [Member] | Services [Member] | ||
Condensed Consolidated Statement of Operations [Abstract] | ||
Revenues | 120,196 | |
Without ASC Topic 606 Adoption [Member] | ASU 2014-09 [Member] | Software and Hardware [Member] | ||
Condensed Consolidated Statement of Operations [Abstract] | ||
Revenues | $ 7,266 |
Revenue, Services Revenue (Deta
Revenue, Services Revenue (Details) - Services [Member] | 3 Months Ended |
Mar. 31, 2018 | |
Minimum [Member] | |
Revenue [Abstract] | |
Notice period to cancel or terminate contract | 10 days |
Maximum [Member] | |
Revenue [Abstract] | |
Notice period to cancel or terminate contract | 30 days |
Revenue, Deferred Revenue (Deta
Revenue, Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Change in Contract with Customer, Asset and Liability [Abstract] | ||
Balance at beginning of period | $ 3,278 | |
Deferral of revenue | 3,328 | |
Recognition of deferred revenue | (4,124) | |
Contract with Customer, Liability, Other Adjustments | (398) | |
Balance at end of period | 4,890 | |
ASU 2014-09 [Member] | ||
Change in Contract with Customer, Asset and Liability [Abstract] | ||
Balance at beginning of period | 6,084 | |
Impact of ASC Topic 606 Adoption [Member] | ASU 2014-09 [Member] | ||
Change in Contract with Customer, Asset and Liability [Abstract] | ||
Balance at beginning of period | $ 2,806 | |
Deferred revenue recognized in beginning balance | $ 2,800 |
Revenue, Disaggregation of Reve
Revenue, Disaggregation of Revenue by Revenue Source and Pattern of Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue [Abstract] | ||
Revenues | $ 120,942 | $ 111,019 |
Over Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 119,378 | |
Point in Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 1,564 | |
Services [Member] | ||
Revenue [Abstract] | ||
Revenues | 120,196 | 104,021 |
Services [Member] | Over Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 119,378 | |
Services [Member] | Point in Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 818 | |
Professional Services [Member] | ||
Revenue [Abstract] | ||
Revenues | 115,513 | |
Professional Services [Member] | Over Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 115,513 | |
Professional Services [Member] | Point in Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 0 | |
Professional Services [Member] | Time and Materials Contracts [Member] | ||
Revenue [Abstract] | ||
Revenues | 82,149 | |
Professional Services [Member] | Time and Materials Contracts [Member] | Over Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 82,149 | |
Professional Services [Member] | Time and Materials Contracts [Member] | Point in Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 0 | |
Professional Services [Member] | Fixed-price Percent Complete Contract [Member] | ||
Revenue [Abstract] | ||
Revenues | 9,112 | |
Professional Services [Member] | Fixed-price Percent Complete Contract [Member] | Over Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 9,112 | |
Professional Services [Member] | Fixed-price Percent Complete Contract [Member] | Point in Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 0 | |
Professional Services [Member] | Fixed Fee Contracts [Member] | ||
Revenue [Abstract] | ||
Revenues | 21,222 | |
Professional Services [Member] | Fixed Fee Contracts [Member] | Over Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 21,222 | |
Professional Services [Member] | Fixed Fee Contracts [Member] | Point in Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 0 | |
Professional Services [Member] | Reimbursable Expenses [Member] | ||
Revenue [Abstract] | ||
Revenues | 3,030 | |
Professional Services [Member] | Reimbursable Expenses [Member] | Over Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 3,030 | |
Professional Services [Member] | Reimbursable Expenses [Member] | Point in Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 0 | |
Other Services [Member] | ||
Revenue [Abstract] | ||
Revenues | 4,683 | |
Other Services [Member] | Over Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 3,865 | |
Other Services [Member] | Point in Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 818 | |
Software and Hardware [Member] | ||
Revenue [Abstract] | ||
Revenues | 746 | $ 6,998 |
Software and Hardware [Member] | Over Time [Member] | ||
Revenue [Abstract] | ||
Revenues | 0 | |
Software and Hardware [Member] | Point in Time [Member] | ||
Revenue [Abstract] | ||
Revenues | $ 746 |
Revenue, Disaggregation of Re42
Revenue, Disaggregation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue [Abstract] | ||
Revenues | $ 120,942 | $ 111,019 |
United States | ||
Revenue [Abstract] | ||
Revenues | 117,529 | |
Canada | ||
Revenue [Abstract] | ||
Revenues | 1,371 | |
Other Countries [Member] | ||
Revenue [Abstract] | ||
Revenues | $ 2,042 |
Stock-Based Compensation, Stock
Stock-Based Compensation, Stock Award Plans (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock-Based Compensation [Abstract] | ||
Stock-based compensation expense | $ 3.9 | $ 3.7 |
Stock-based compensation expense for retirement savings plan contributions | 0.7 | 0.6 |
Associated current and future income tax benefits recognized | 0.8 | $ 1.2 |
Total unrecognized compensation cost related to non-vested share-based awards | $ 23.6 | |
Unrecognized compensation cost, weighted-average period for recognition | 2 years | |
Requisite service period | 3 years | |
2012 Long Term Incentive Plan [Member] | ||
Stock-Based Compensation [Abstract] | ||
Maximum number of shares authorized under plan (in shares) | 7 | |
Number of shares available for issuance (in shares) | 2.6 |
Stock-Based Compensation, Restr
Stock-Based Compensation, Restricted Stock Activity (Details) - 2012 Long Term Incentive Plan [Member] - Restricted Stock [Member] shares in Thousands | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Shares [Roll Forward] | |
Restricted stock awards outstanding at beginning of period | shares | 1,436 |
Awards granted (in shares) | shares | 360 |
Awards vested (in shares) | shares | (323) |
Awards forfeited (in shares) | shares | (35) |
Restricted stock awards outstanding at end of period | shares | 1,438 |
Weighted-Average Grant Date Fair Value [Abstract] | |
Awards outstanding at beginning of period (in dollars per share) | $ / shares | $ 18.12 |
Awards granted (in dollars per share) | $ / shares | 22.02 |
Awards vested (in dollars per share) | $ / shares | 19.30 |
Awards forfeited (in dollars per share) | $ / shares | 17.37 |
Awards outstanding at end of period (in dollars per share) | $ / shares | $ 18.83 |
Net Income per Share (Details)
Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | ||
Net Income per Share [Abstract] | ||||
Net income | $ 4,928 | $ 2,709 | ||
Basic [Abstract] | ||||
Weighted-average shares of common stock outstanding | 32,752 | 33,383 | ||
Shares used in computing basic net income per share (in shares) | 32,752 | 33,383 | ||
Effect of dilutive securities: | ||||
Restricted stock subject to vesting (in shares) | 491 | 402 | ||
Shares issuable for acquisition consideration (in shares) | [1] | 547 | 509 | |
Shares used in computing diluted net income per share (in shares) | 33,790 | 34,294 | ||
Basic net income per share (in dollars per share) | $ 0.15 | $ 0.08 | ||
Diluted net income per share (in dollars per share) | $ 0.15 | $ 0.08 | ||
Anti-dilutive options and restricted stock not included in the calculation of diluted net income per share (in shares) | 120 | 122 | ||
Stock Repurchase Program [Abstract] | ||||
Authorized amount to be repurchased | $ 160,000 | $ 135,000 | ||
Increase in authorized amount to be repurchased | 25,000 | |||
Cumulative amount repurchased | $ 137,100 | |||
Cumulative number of shares repurchased | 12,500 | |||
[1] | For the three months ended March 31, 2018, this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm Systems, Inc. ("BioPharm"); (ii) the Asset Purchase Agreement with Zeon Solutions Incorporated and certain related entities (collectively, "Zeon").; (iii) the Asset Purchase Agreement with RAS & Associates, LLC ("RAS"); and (iv) the Asset Purchase Agreement with Clarity Consulting, Inc. and Truth Labs, LLC (together, "Clarity"), as part of the consideration. For the three months ended March 31, 2017, this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm; (ii) the Asset Purchase Agreement with Zeon; (iii) the Asset Purchase Agreement with The Pup Group, Inc. d/b/a Enlighten ("Enlighten"); and (iv) the Asset Purchase Agreement with RAS, as part of the consideration. |
Commitments and Contingencies46
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Commitments [Abstract] | ||||
Other current liabilities | $ 34,050 | $ 38,077 | ||
Other non-current liabilities | 17,836 | $ 16,436 | ||
Future Minimum Commitments Under Operating Lease Agreements [Abstract] | ||||
2017 remaining | 5,013 | |||
2,019 | 6,650 | |||
2,020 | 6,202 | |||
2,021 | 4,728 | |||
2,022 | 2,910 | |||
Thereafter | 3,160 | |||
Total minimum lease payments | 28,663 | |||
Rent expense | 2,000 | $ 1,900 | ||
Software Licenses [Member] | ||||
Commitments [Abstract] | ||||
Period to purchase software licenses | 2 years | |||
Other current liabilities | $ 800 |
Balance Sheet Components, Accou
Balance Sheet Components, Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Components [Abstract] | ||
Accounts receivable | $ 65,393 | $ 82,603 |
Unbilled revenues | 44,389 | 30,863 |
Allowance for doubtful accounts | (1,424) | (1,272) |
Total | $ 108,358 | $ 112,194 |
Balance Sheet Components, Prope
Balance Sheet Components, Property and Equipment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Property and Equipment [Abstract] | ||
Less: Accumulated depreciation | $ (18,578) | $ (17,732) |
Total | 6,981 | 7,145 |
Computer Hardware [Member] | ||
Property and Equipment [Abstract] | ||
Property and equipment | $ 13,268 | 13,110 |
Useful life | 3 years | |
Furniture And Fixtures [Member] | ||
Property and Equipment [Abstract] | ||
Property and equipment | $ 4,092 | 3,772 |
Useful life | 5 years | |
Leasehold Improvements [Member] | ||
Property and Equipment [Abstract] | ||
Property and equipment | $ 3,038 | 2,836 |
Useful life | 5 years | |
Software [Member] | ||
Property and Equipment [Abstract] | ||
Property and equipment | $ 5,161 | $ 5,159 |
Minimum [Member] | Software [Member] | ||
Property and Equipment [Abstract] | ||
Useful life | 1 year | |
Maximum [Member] | Software [Member] | ||
Property and Equipment [Abstract] | ||
Useful life | 7 years |
Balance Sheet Components, Other
Balance Sheet Components, Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Balance Sheet Components [Abstract] | |||
Accrued variable compensation | $ 9,299 | $ 16,842 | |
Deferred revenues | 4,890 | 3,278 | |
Payroll related costs | 3,035 | 2,971 | |
Accrued subcontractor fees | 450 | 469 | |
Accrued medical claims expense | 2,020 | 2,133 | |
Professional Fees | 964 | 357 | |
Estimated fair value of contingent consideration liability | [1] | 9,118 | 8,148 |
Other current liabilities | 4,274 | 3,879 | |
Total | $ 34,050 | $ 38,077 | |
[1] | As of March 31, 2018 and December 31, 2017, represents the fair value estimate of additional earnings-based contingent consideration that may be realized by Clarity twelve months after the acquisition. |
Balance Sheet Components, Oth50
Balance Sheet Components, Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Components [Abstract] | ||
Deferred compensation liability | $ 4,667 | $ 4,409 |
Deferred income taxes | 8,310 | 7,360 |
Other non-current liabilities | 4,859 | 4,667 |
Total | $ 17,836 | $ 16,436 |
Business Combinations, RAS (Det
Business Combinations, RAS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Business Combinations [Abstract] | ||
Period to realize additional earnings-based contingent consideration | 12 months | |
Allocation of Total Purchase Price Consideration [Abstract] | ||
Goodwill | $ 305,142 | $ 305,238 |
RAS [Member] | ||
Business Combinations [Abstract] | ||
Date of acquisition | Jan. 3, 2017 | |
Cash paid for acquisition | $ 7,100 | |
Common stock issued | 2,100 | |
Net working capital settlement | (600) | |
Initial fair value estimate of additional earnings-based contingent consideration | $ 1,800 | |
Period to realize additional earnings-based contingent consideration | 12 months | |
Maximum potential additional earnings-based contingent consideration | $ 3,800 | |
Current contingent consideration liability | 0 | |
Transaction costs | 500 | |
Allocation of Total Purchase Price Consideration [Abstract] | ||
Acquired tangible assets | 900 | |
Acquired intangible assets | 5,100 | |
Liabilities assumed | (1,000) | |
Goodwill | 5,400 | |
Total purchase price | 10,400 | |
Tax deductible amount of Goodwill | $ 3,700 |
Business Combinations, Clarity
Business Combinations, Clarity (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Business Combinations [Abstract] | |||
Adjustment to fair value of contingent consideration for purchase of business | $ 969 | $ 158 | |
Period to realize additional earnings-based contingent consideration | 12 months | ||
Common stock value attributed to future compensation | $ 900 | ||
Allocation of Total Purchase Price Consideration [Abstract] | |||
Goodwill | 305,142 | $ 305,238 | |
Clarity Consultants [Member] | |||
Business Combinations [Abstract] | |||
Current contingent consideration liability | 9,000 | $ 8,100 | |
Adjustment to fair value of contingent consideration for purchase of business | $ 900 | ||
Date of acquisition | Jun. 22, 2017 | ||
Cash paid for acquisition | $ 30,700 | ||
Common stock issued | 7,300 | ||
Net working capital settlement | (400) | ||
Initial fair value estimate of additional earnings-based contingent consideration | 4,100 | ||
Maximum potential additional earnings-based contingent consideration | 9,200 | ||
Transaction costs | 900 | ||
Allocation of Total Purchase Price Consideration [Abstract] | |||
Acquired tangible assets | 6,000 | ||
Acquired intangible assets | 15,000 | ||
Liabilities assumed | (3,600) | ||
Goodwill | 24,300 | ||
Total purchase price | 41,700 | ||
Tax deductible amount of Goodwill | $ 22,100 |
Business Combinations, Intangib
Business Combinations, Intangible Assets Acquired (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Intangible Assets Acquired [Abstract] | |
Aggregate acquisitions | $ 20.1 |
Customer Relationships [Member] | |
Intangible Assets Acquired [Abstract] | |
Weighted average useful life | 6 years |
Useful life | 6 years |
Aggregate acquisitions | $ 16.8 |
Customer Backlog [Member] | |
Intangible Assets Acquired [Abstract] | |
Weighted average useful life | 1 year |
Aggregate acquisitions | $ 1.9 |
Customer Backlog [Member] | Minimum [Member] | |
Intangible Assets Acquired [Abstract] | |
Useful life | 3 months |
Customer Backlog [Member] | Maximum [Member] | |
Intangible Assets Acquired [Abstract] | |
Useful life | 1 year |
Non-Compete Agreements [Member] | |
Intangible Assets Acquired [Abstract] | |
Weighted average useful life | 5 years |
Aggregate acquisitions | $ 0.7 |
Non-Compete Agreements [Member] | Minimum [Member] | |
Intangible Assets Acquired [Abstract] | |
Useful life | 2 years |
Non-Compete Agreements [Member] | Maximum [Member] | |
Intangible Assets Acquired [Abstract] | |
Useful life | 5 years |
Trade Name [Member] | |
Intangible Assets Acquired [Abstract] | |
Weighted average useful life | 1 year |
Useful life | 1 year |
Aggregate acquisitions | $ 0.1 |
Internally Developed Software [Member] | |
Intangible Assets Acquired [Abstract] | |
Weighted average useful life | 4 years |
Useful life | 4 years |
Aggregate acquisitions | $ 0.6 |
Business Combinations, Pro Form
Business Combinations, Pro Forma Results of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Business Acquisition, Pro Forma Information [Abstract] | ||
Revenues | $ 120,942 | $ 118,663 |
Net income | $ 5,982 | $ 3,864 |
Basic net income per share | $ 0.18 | $ 0.11 |
Diluted net income per share | $ 0.18 | $ 0.11 |
Shares used in computing basic net income per share | 33,087 | 33,720 |
Shares used in computing diluted net income per share | 33,784 | 34,601 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Goodwill) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill and Intangible Assets [Abstract] | |
Balance at beginning of period | $ 305,238 |
Effect of foreign currency translation adjustments | (96) |
Balance at end of period | $ 305,142 |
Goodwill and Intangible Asset56
Goodwill and Intangible Assets, Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Intangible Assets, Net [Abstract] | ||
Gross carrying amounts | $ 86,517 | $ 90,038 |
Accumulated amortization | (39,246) | (38,972) |
Net carrying amounts | 47,271 | 51,066 |
Customer Relationships [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amounts | 71,976 | 75,407 |
Accumulated amortization | (31,729) | (32,307) |
Net carrying amounts | 40,247 | 43,100 |
Non-Compete Agreements [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amounts | 1,556 | 1,556 |
Accumulated amortization | (788) | (707) |
Net carrying amounts | 768 | 849 |
Customer Backlog [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amounts | 1,650 | 1,650 |
Accumulated amortization | (1,279) | (866) |
Net carrying amounts | 371 | 784 |
Trade Name [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amounts | 100 | 100 |
Accumulated amortization | (77) | (53) |
Net carrying amounts | 23 | 47 |
Internally Developed Software [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amounts | 11,235 | 11,325 |
Accumulated amortization | (5,373) | (5,039) |
Net carrying amounts | $ 5,862 | $ 6,286 |
Goodwill and Intangible Asset57
Goodwill and Intangible Assets, Estimated Useful Lives (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Customer Relationships [Member] | Minimum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 5 years |
Customer Relationships [Member] | Maximum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 10 years |
Non-Compete Agreements [Member] | Minimum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 2 years |
Non-Compete Agreements [Member] | Maximum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 5 years |
Customer Backlog [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 1 year |
Trade Name [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 1 year |
Internally Developed Software [Member] | Minimum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 2 years |
Internally Developed Software [Member] | Maximum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives | 7 years |
Goodwill and Intangible Asset58
Goodwill and Intangible Assets, Estimated Amortization Expense (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Estimated Amortization Expense [Abstract] | |
2018 remaining | $ 10,301 |
2,019 | 12,322 |
2,020 | 9,242 |
2,021 | 7,109 |
2,022 | 5,764 |
Thereafter | $ 2,533 |
Line of Credit (Details)
Line of Credit (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Line of Credit [Abstract] | |
Leverage Ratio | 3 |
Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member] | |
Line of Credit [Abstract] | |
Margin interest rate percentage | 1.00% |
Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member] | |
Line of Credit [Abstract] | |
Margin interest rate percentage | 1.75% |
Revolving Credit Facility [Member] | Credit Agreement [Member] | |
Line of Credit [Abstract] | |
Maximum borrowing capacity | $ 125 |
Additional commitment increase | 75 |
Allowable amount of letters of credit for issuance | 10 |
Letters of credit outstanding | $ 0.3 |
Maturity date | Jun. 9, 2022 |
Available borrowing capacity | $ 68.7 |
Ratio of EBITDA plus stock compensation to interest expense for the previous four consecutive fiscal quarters | 3 |
Leverage Ratio needed for payment of dividends | 2 |
Revolving Credit Facility [Member] | Credit Agreement [Member] | Minimum [Member] | |
Line of Credit [Abstract] | |
Annual commitment fee percentage on unused capacity | 0.15% |
Revolving Credit Facility [Member] | Credit Agreement [Member] | Maximum [Member] | |
Line of Credit [Abstract] | |
Annual commitment fee percentage on unused capacity | 0.20% |
Revolving Credit Facility [Member] | Credit Agreement [Member] | Prime Rate [Member] | |
Line of Credit [Abstract] | |
Interest rate at end of period | 4.75% |
Revolving Credit Facility [Member] | Credit Agreement [Member] | Prime Rate [Member] | Minimum [Member] | |
Line of Credit [Abstract] | |
Margin interest rate percentage | 0.00% |
Revolving Credit Facility [Member] | Credit Agreement [Member] | Prime Rate [Member] | Maximum [Member] | |
Line of Credit [Abstract] | |
Margin interest rate percentage | 0.50% |
Revolving Credit Facility [Member] | Credit Agreement [Member] | LIBOR [Member] | |
Line of Credit [Abstract] | |
Term of variable rate | 1 month |
Interest rate at end of period | 1.88% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Jul. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Taxes [Abstract] | ||||||
Reversal of taxes on foreign earnings repatriated due to 2017 Tax Act | $ (1,600) | |||||
Unrecognized tax benefits | 3,100 | |||||
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | $ 300 | |||||
Effective tax rate | 23.20% | 40.20% | ||||
Net non-current deferred tax liability | $ 8,310 | $ 7,360 | ||||
Foreign earnings repatriated | $ 4,800 | $ 4,800 | ||||
Taxes on foreign earnings repatriated | $ 2,500 | |||||
Unremitted earnings of foreign subsidiaries | 3,400 | |||||
Unrecognized deferred tax liability on unremitted earnings of foreign subsidiaries | 200 | |||||
IRS [Member] | Tax Years 2011, 2012 and 2013 [Member] | ||||||
Income Taxes [Abstract] | ||||||
Disallowed research tax credits being litigated | 2,500 | |||||
IRS [Member] | Tax Years 2011 to Date [Member] | ||||||
Income Taxes [Abstract] | ||||||
Research and development credits | $ 9,100 |
Financial Instruments, Notional
Financial Instruments, Notional Amounts (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Notional Amounts [Abstract] | ||
Notional amount | $ 3,160 | $ 3,979 |
Foreign Exchange Contracts [Member] | ||
Notional Amounts [Abstract] | ||
Notional amount | $ 3,160 | $ 3,979 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Apr. 02, 2018 | Mar. 31, 2018 |
Business Combinations [Abstract] | ||
Period to realize additional earnings-based contingent consideration | 12 months | |
Southport Services Group, LLC [Member] | ||
Business Combinations [Abstract] | ||
Date of acquisition | Apr. 2, 2018 | |
Cash paid for acquisition | $ 11.3 | |
Common stock issued | 153,000 | |
Maximum payout of earnings-based contingent consideration | $ 6.6 | |
Transaction costs | $ 0.3 |