Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | Information Services Group Inc. | |
Entity Central Index Key | 0001371489 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 47,382,917 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 10,410 | $ 18,636 |
Accounts receivable and contract assets, net of allowance of $593 and $401, respectively | 82,572 | 75,934 |
Prepaid expenses and other current assets | 3,582 | 3,620 |
Total current assets | 96,564 | 98,190 |
Restricted cash | 89 | 89 |
Furniture, fixtures and equipment, net | 6,229 | 6,636 |
Right-of-use assets | 7,588 | |
Goodwill | 85,374 | 85,389 |
Intangible assets, net | 18,612 | 20,622 |
Deferred tax assets | 2,109 | 2,944 |
Other assets | 820 | 861 |
Total assets | 217,385 | 214,731 |
Current liabilities | ||
Accounts payable | 8,156 | 8,453 |
Current maturities of long-term debt | 9,625 | 8,250 |
Contract liabilities | 3,576 | 6,187 |
Accrued expenses and other current liabilities | 18,256 | 17,759 |
Total current liabilities | 39,613 | 40,649 |
Long-term debt, net of current maturities | 86,024 | 89,212 |
Deferred tax liabilities | 1,612 | 1,790 |
Lease liabilities | 6,054 | |
Other liabilities | 3,022 | 4,493 |
Total liabilities | 136,325 | 136,144 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value; 10,000 shares authorized; none issued | ||
Common stock, $0.001 par value, 100,000 shares authorized; 48,063 shares issued and 47,220 outstanding at June 30, 2019 and 45,477 shares issued and 45,430 outstanding at December 31, 2018 | 48 | 45 |
Additional paid-in capital | 241,983 | 235,998 |
Treasury stock (843 and 47 common shares, respectively, at cost) | (3,179) | (203) |
Accumulated other comprehensive loss | (7,210) | (7,155) |
Accumulated deficit | (150,582) | (150,098) |
Total stockholders' equity | 81,060 | 78,587 |
Total liabilities and stockholders’ equity | $ 217,385 | $ 214,731 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivables and contract assets, allowances | $ 593 | $ 401 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 48,063 | 45,477 |
Common stock, shares outstanding | 47,220 | 45,430 |
Treasury stock, shares | 843 | 47 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Revenues | $ 67,328 | $ 71,026 | $ 132,119 | $ 139,903 |
Operating expenses | ||||
Direct costs and expenses for advisors | 38,146 | 40,153 | 78,911 | 83,137 |
Selling, general and administrative | 24,223 | 24,680 | 47,235 | 46,908 |
Depreciation and amortization | 1,675 | 1,993 | 3,359 | 3,895 |
Operating income | 3,284 | 4,200 | 2,614 | 5,963 |
Interest income | 89 | 3 | 92 | 110 |
Interest expense | (1,602) | (1,728) | (3,165) | (3,465) |
Foreign currency transaction (loss) gain | (18) | 49 | (35) | 25 |
Income (loss) before taxes | 1,753 | 2,524 | (494) | 2,633 |
Income tax provision (benefit) | 1,339 | 162 | (10) | 107 |
Net income (loss) | $ 414 | $ 2,362 | $ (484) | $ 2,526 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 46,880 | 44,655 | 46,344 | 44,180 |
Diluted (in shares) | 47,401 | 46,086 | 46,344 | 45,973 |
Earnings (loss) per share: | ||||
Basic (in dollars per share) | $ 0.01 | $ 0.05 | $ (0.01) | $ 0.06 |
Diluted (in dollars per share) | $ 0.01 | $ 0.05 | $ (0.01) | $ 0.05 |
Comprehensive income (loss): | ||||
Net income (loss) | $ 414 | $ 2,362 | $ (484) | $ 2,526 |
Foreign currency translation, net of tax (expense) benefit of $(36), $465, $14 and $311, respectively. | 104 | (1,496) | (55) | (1,004) |
Comprehensive income (loss): | $ 518 | $ 866 | $ (539) | $ 1,522 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Foreign currency translation, tax benefit (expense) | $ (36) | $ 465 | $ 14 | $ 311 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In-Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balance at Dec. 31, 2017 | $ 44 | $ 230,134 | $ (3,161) | $ (5,666) | $ (157,814) | $ 63,537 |
Balance (in shares) at Dec. 31, 2017 | 44,490 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 2,526 | 2,526 | ||||
Other comprehensive loss | (1,004) | (1,004) | ||||
Treasury shares repurchased | (2,532) | (2,532) | ||||
Proceeds from issuance of ESPP | (7) | 449 | 442 | |||
Issuance of treasury shares for RSU vested | (4,064) | 4,064 | ||||
Issuance of common stock for contingent earn-out | 1,200 | 1,200 | ||||
Issuance of common stock for contingent earn-out (in shares) | 290 | |||||
Issuance of common stock for RSU vested | $ 1 | (1) | ||||
Issuance of common stock for RSU vested (in shares) | 413 | |||||
Stock based compensation | 4,646 | 4,646 | ||||
Balance at Jun. 30, 2018 | $ 45 | 231,908 | (1,180) | (6,670) | (153,248) | 70,855 |
Balance (in shares) at Jun. 30, 2018 | 45,193 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Impact of change in accounting policy | 2,040 | 2,040 | ||||
Balance at Dec. 31, 2018 | $ 45 | 235,998 | (203) | (7,155) | (150,098) | $ 78,587 |
Balance (in shares) at Dec. 31, 2018 | 45,477 | 45,477 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (484) | $ (484) | ||||
Other comprehensive loss | (55) | (55) | ||||
Treasury shares repurchased | (2,976) | (2,976) | ||||
Proceeds from issuance of ESPP | 429 | 429 | ||||
Proceeds from issuance of ESPP (in shares) | 122 | |||||
Issuance of common stock for contingent earn-out | $ 1 | 864 | 865 | |||
Issuance of common stock for contingent earn-out (in shares) | 243 | |||||
Issuance of common stock for RSU vested | $ 2 | (2) | ||||
Issuance of common stock for RSU vested (in shares) | 2,221 | |||||
Stock based compensation | 4,694 | 4,694 | ||||
Balance at Jun. 30, 2019 | $ 48 | $ 241,983 | $ (3,179) | $ (7,210) | $ (150,582) | $ 81,060 |
Balance (in shares) at Jun. 30, 2019 | 48,063 | 48,063 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities | ||
Net (loss) income | $ (484) | $ 2,526 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation expense | 1,352 | 1,357 |
Amortization of intangible assets | 2,007 | 2,538 |
Deferred tax expense (benefit) from stock issuances | 115 | (152) |
Amortization of deferred financing costs | 312 | 394 |
Stock-based compensation | 4,694 | 4,646 |
Provisions for accounts receivable | 313 | 452 |
Deferred tax provision | 675 | 106 |
Loss on disposal of fixed assets | 4 | 28 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable and contract assets | (6,970) | (2,180) |
Prepaid expense and other assets | 1,067 | (434) |
Accounts payable | (617) | (182) |
Contract liabilities | (2,611) | (1,859) |
Accrued expenses | 725 | (91) |
Net cash provided by operating activities | 582 | 7,149 |
Cash flows from investing activities | ||
Purchase of furniture, fixtures and equipment | (674) | (3,357) |
Net cash used in investing activities | (674) | (3,357) |
Cash flows from financing activities | ||
Proceeds from debt | 3,500 | |
Principal payments on borrowings | (5,625) | (6,511) |
Proceeds from issuance of employee stock purchase plan shares | 429 | 442 |
Payment of contingent consideration | (865) | (1,200) |
Payments related to tax withholding for stock-based compensation | (2,571) | (2,396) |
Equity securities repurchased | (2,976) | (2,532) |
Net cash used in financing activities | (8,108) | (12,197) |
Effect of exchange rate changes on cash | (26) | (577) |
Net decrease in cash, cash equivalents, and restricted cash | (8,226) | (8,982) |
Cash, cash equivalents, and restricted cash, beginning of period | 18,725 | 28,514 |
Cash, cash equivalents, and restricted cash, end of period | $ 10,499 | 19,532 |
Non-cash investing and financing activities: | ||
Issuance of treasury stock for vested restricted stock awards | $ 4,064 |
DESCRIPTION OF ORGANIZATION AND
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 6 Months Ended |
Jun. 30, 2019 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Information Services Group, Inc. (the “Company” or “ISG”) was founded in 2006 with the strategic vision to become a high-growth, leading provider of information-based advisory services. The Company specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; technology strategy and operations design; change management; market intelligence and technology research and analysis. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 2—BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are considered necessary for a fair statement of the financial position of the Company as of June 30, 2019, the results of operations for the three and six months ended June 30, 2019 and 2018 and the cash flows for the six months ended June 30, 2019 and 2018. The condensed consolidated balance sheet as of December 31, 2018 has been derived from the Company’s audited consolidated financial statements. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. Certain information and disclosures normally included in the notes to annual financial statements prepared in accordance with GAAP have been omitted from these interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended December 31, 2018, which are included in the Company’s 2018 Annual Report on Form 10-K filed with the SEC. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results may differ from those estimates. Additionally, ISG has to determine the nature and timing of the satisfaction of performance obligations, the standalone selling price (“SSP”) of certain performance obligations, among other judgments associated with revenue recognition. Numerous internal and external factors can affect estimates. Estimates are also used for (but not limited to): allowance for doubtful accounts; useful lives of furniture, fixtures and equipment and definite-lived intangible assets; depreciation expense; fair value assumptions in analyzing goodwill and other long-lived assets for impairment; income taxes and deferred tax asset valuation; and the valuation of stock-based compensation. Restricted Cash Restricted cash consists of cash and cash equivalents which the Company has committed for rent deposits. Fair Value The carrying value of the Company’s cash and cash equivalents, restricted cash, receivables, accounts payable, other current liabilities, and accrued interest approximated their fair values at June 30, 2019 and December 31, 2018 due to the short-term nature of these accounts. Fair value measurements were applied with respect to our nonfinancial assets and liabilities measured on a nonrecurring basis, which would consist of measurements primarily to contingent consideration in a business combination. Fair value is the price that would be received upon a sale of an asset or paid upon a transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). Market participants can use market data or assumptions in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable. The use of unobservable inputs is intended to allow for fair value determinations in situations where there is little, if any, market activity for the asset or liability at the measurement date. Under the fair-value hierarchy: · Level 1 measurements include unadjusted quoted market prices for identical assets or liabilities in an active market; · Level 2 measurements include quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets; and · Level 3 measurements include those that are unobservable and of a highly subjective measure. The following tables summarize assets and liabilities measured at fair value on a recurring basis at the dates indicated: Basis of Fair Value Measurements June 30, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 17 $ — $ — $ 17 Total $ 17 $ — $ — $ 17 Liabilities: Contingent consideration (1) $ — $ — $ — $ — Total $ — $ — $ — $ — Basis of Fair Value Measurements December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 315 $ — $ — $ 315 Total $ 315 $ — $ — $ 315 Liabilities: Contingent consideration (1) $ — $ — $ 1,703 $ 1,703 Total $ — $ — $ 1,703 $ 1,703 (1) Contingent consideration is included in “Accrued expenses and other current liabilities.” The fair value measurement of this contingent consideration is classified within Level 3 of the fair value hierarchy and reflects the Company’s own assumptions in measuring fair values using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and industry trends. This amount was estimated through a valuation model that incorporated probability-weighted assumptions related to the achievement of these milestones and the likelihood of the Company making payments. These cash outflow projections have then been discounted using a rate ranging from 14.5% to 28.5%. The following table represents the change in the contingent consideration liability during the six months ended June 30, 2019 and 2018: Six Months Ended June 30, 2019 2018 Beginning Balance $ 1,703 $ 3,698 Payment of contingent consideration (1,730) (2,401) Accretion of contingent consideration 30 1,074 Unrealized (loss) gain related to currency translation (3) 3 Ending Balance $ — $ 2,374 The Company’s financial instruments include outstanding borrowings of $97.0 million at June 30, 2019 and $99.1 million at December 31, 2018, which are carried at amortized cost. The fair value of debt is classified within Level 3 of the fair value hierarchy. The fair value of the Company's outstanding borrowings is approximately $96.8 million and $98.9 million at June 30, 2019 and December 31, 2018, respectively. The fair values of debt have been estimated using a discounted cash flow analysis based on the Company's incremental borrowing rate for similar borrowing arrangements. The incremental borrowing rate used to discount future cash flows ranged from 5.57% to 5.65%. The Company also considered recent transactions of peer group companies for similar instruments with comparable terms and maturities as well as an analysis of current market conditions. Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued an update that modifies the disclosure requirements for fair value measurements by removing, modifying or adding disclosures. The guidance is effective for fiscal year beginning after December 15, 2019 and early adoption is permitted. Certain disclosures in the update are applied retrospectively, while others are applied prospectively. The Company is currently evaluating the potential impact of adopting this guidance on its financial statements. In September 2018, the FASB issued new guidance which requires a customer in a cloud computing arrangement to determine which implementation costs to capitalize as assets or expense as incurred. Under the new guidance, capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods, and early adoption is permitted. The Company is currently evaluating the potential impact of adopting this guidance on its financial statements. In November 2018, the FASB issued guidance to clarify that certain transactions between parties to collaborative arrangements should be accounted for in accordance with FASB revenue guidance when the counterparty is a customer. This guidance also prohibits the presentation of collaborative arrangements as revenues from contracts with customers if the counterparty is not a customer. This guidance, which is required to be applied retrospectively and is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, is not expected to have an impact on the Company’s consolidated financial statement. In June 2016, the FASB issued new guidance on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable, and available-for-sale debt securities. The new guidance replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. This update is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018, including interim periods within those annual periods. At its July 17th meeting, the FASB voted to propose a deferral of the effective date of this guidance to smaller reporting companies to fiscal years beginning after December 15, 2022. The FASB expects to issue the final amendments by December 31, 2019. The Company is currently evaluating the potential impact of adopting this guidance on its financial statements. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2019 | |
REVENUE | |
REVENUE | NOTE 4—REVENUE The majority of our revenue is derived from contracts that can span from a few months to several years. We enter into contracts that can include various combinations of services and products, which, depending on contract type, are sometimes capable of being distinct. If services are determined to be distinct, they are accounted for as separate performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual services is not separately identifiable from other promises in the contracts and, therefore, not distinct. For contracts with multiple performance obligations, including our managed service implementation and software and implementation contract types, the Company allocates the transaction price to each performance obligation using our best estimate of the standalone selling price, or SSP, of each distinct good or service in the contract. As of June 30, 2019, the Company had $86.7 million of remaining performance obligations, the majority of which are expected to be satisfied within the next year. We used practical expedients permitted by the standard when applicable. These practical expedients included: · applying the new guidance only to contracts that are not completed as of January 1, 2018; · expensing the incremental costs to obtain a contract as incurred when the expected amortization period is one year or less; and · presenting all revenue net of any related sales tax. Our contracts may include promises to transfer multiple services and products to a client. Determining whether services and products are considered distinct performance obligations that should be accounted for separately versus together may require judgment. Estimates were required to determine the SSP for each distinct performance obligation identified within our managed service implementation contracts, software and implementation contracts, and research and subscription contracts. Contract Balances The timing of revenue recognition, billings, and cash collections results in billed accounts receivables, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities). Our clients are billed based on the type of arrangement. A portion of our services is billed monthly based on hourly or daily rates. There are also client engagements in which we bill a fixed amount for our services. This may be one single amount covering the whole engagement or several amounts for various phases, functions, or milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the consolidated balance sheet at the end of each reporting period. See the table below for a breakdown of contract assets and contract liabilities. June 30, December 31, 2019 2018 Contract assets $ 38,665 $ 22,878 Contract liabilities $ 3,576 $ 6,187 Revenue recognized for the three months ended June 30, 2019 that was included in the contract liability balance at April 1, 2019 was $2.5 million and represented primarily revenue from our research and subscription contracts. Revenue recognized for the six months ended June 30, 2019 that was included in the contract liability balance at January 1, 2019 was $5.7 million and represented primarily revenue from our research and subscription contracts. Disaggregation of Revenue The following table presents our revenue disaggregated by geographic area for the three and six months ended June 30, 2019 and 2018. Three Months Ended Six Months Ended June 30, June 30, Geographic area 2019 2018 2019 2018 Americas $ 40,256 $ 40,831 $ 78,485 $ 82,507 Europe 22,800 24,047 45,004 45,801 Asia Pacific 4,272 6,148 8,630 11,595 $ 67,328 $ 71,026 $ 132,119 $ 139,903 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2019 | |
LEASES | |
LEASES | NOTE 5—LEASES In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “Leases” (Topic 842) (“ASC 842”). ASC 842 requires companies to recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. We adopted ASC 842 using the effective date of January 1, 2019 as the date of our initial application of the standard. Consequently, financial information for the comparative periods will not be updated. The Company determines if a contract is, or contains, a lease at contract inception. The Company elected the package of practical expedients for leases that commenced prior to January 1, 2019 and will not reassess: (i) whether any expired or existing contracts are or contain leases; (ii) lease classification for any expired or existing leases; and (iii) initial direct costs capitalization for any existing leases. The Company elected upon adoption, including the use of hindsight in assessing factors that impact determination of the lease term, such as the likelihood that any renewal or purchase options are exercised. The Company elected to make an accounting policy election to keep leases with an initial term of 12 months or less off the balance sheet. The Company also elected not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. The Company will recognize those lease payments in the consolidated statements of income on a straight-line basis over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental bowing rate based on the information available at the commencement date in determining the present value of the lease payments. The Company leases its office space and office equipment under long-term operating lease agreements which expire at various dates through August 2026, some of which include options to extend the leases for up to 3 years, and some of which included options to terminate the leases within 1 year. Under the operating leases, the Company pays certain operating expenses relating to the office equipment and leased property. The components of lease expense were as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2019 Lease cost Operating lease cost $ 1,012 $ 1,801 Finance lease cost: Amortization of right-of-use assets 4 4 Interest on lease liabilities 1 1 Short-term lease cost 9 11 Variable lease cost 41 120 Sublease income (61) (122) Total lease cost $ 1,006 $ 1,815 Supplemental cash flow information related to leases was as follows Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 3 $ 3 Operating cash flows from operating leases $ 796 $ 1,809 Financing cash flows from finance leases $ 1 $ 1 Supplemental balance sheet information related to leases was as follows: (In thousands, except lease term and discount rate) June 30, 2019 Operating leases Operating lease right-of-use assets $ 7,525 Current operating lease liabilities (1) $ 3,116 Non-current operating lease liabilities 6,015 Total operating lease liabilities $ 9,131 Finance leases Finance lease right-of-use assets $ 63 Current finance lease liabilities (1) $ 24 Non-current finance lease liabilities 39 Total finance lease liabilities $ 63 Weighted average remaining lease term (in years) Operating leases 4.4 Finance leases 2.8 Weighted average discount rate Operating leases Finance leases (1) Current lease liabilities are included in “Accrued expenses and other current liabilities.” Maturities of lease liabilities were as follows: Operating Finance Leases Leases Year Ending December 31, 2019 (excluding the six months ended June 30, 2019) $ 1,704 $ 13 2020 3,048 25 2021 2,071 25 2022 1,343 8 2023 938 — Thereafter 1,778 — Total lease payments 10,882 71 Less imputed interest (1,751) (8) Total $ 9,131 $ 63 The minimum rental commitments under non-cancelable operating leases under ASC 840 as disclosed in our 2018 Annual Report, with initial or remaining terms of one year or more consist of the following at December 31, 2018: Operating Leases 2019 $ 3,034 2020 2,654 2021 1,808 2022 1,218 2023 925 Thereafter 1,795 Total minimum lease payments $ 11,434 |
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2019 | |
NET INCOME PER COMMON SHARE | |
NET INCOME PER COMMON SHARE | NOTE 6—NET INCOME PER COMMON SHARE Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would share in the net income of the Company. For the three and six months ended June 30, 2019, 1.2 million and 6.0 million restricted shares have not been considered in the diluted earnings per share calculation, as the effect would be anti-dilutive, respectively. The following tables set forth the computation of basic and diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Basic: Net income (loss) $ 414 $ 2,362 $ (484) $ 2,526 Weighted average common shares 46,880 44,655 46,344 44,180 Earnings (loss) per share $ 0.01 $ 0.05 $ (0.01) $ 0.06 Diluted: Net income (loss) $ 414 $ 2,362 $ (484) $ 2,526 Basic weighted average common shares 46,880 44,655 46,344 44,180 Potential common shares 521 1,431 — 1,793 Diluted weighted average common shares 47,401 46,086 46,344 45,973 Diluted earnings (loss) per share $ 0.01 $ 0.05 $ (0.01) $ 0.05 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
INCOME TAXES | |
INCOME TAXES | NOTE 7—INCOME TAXES The Company’s effective tax rate for the three and six months ended June 30, 2019 was 76.4% and 2.0% based on pretax income of $1.8 million and pretax loss of $(0.5) million, respectively. The Company’s effective tax rate for the quarter was impacted by foreign rate differentials and the Company's inability to fully utilize foreign tax credits in the U.S. The effective tax rate was 6.4% and 4.1% for the three and six months ended June 30, 2018, respectively. The difference was primarily due to the impact of earnings and losses in certain foreign jurisdiction. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 8—COMMITMENTS AND CONTINGENCIES The Company is subject to contingencies which arise through the ordinary course of business. All material liabilities of which management were aware are properly reflected in the financial statements at June 30, 2019 and December 31, 2018. Experton Contingent Consideration The Company paid the remaining $0.3 million in the second quarter of 2019 related to 2018 performance, of which 50% was paid with shares of ISG common stock. TracePoint Contingent Consideration The Company paid the remaining $1.5 million in the second quarter of 2019 related to 2018 performance, of which 50% was paid with shares of ISG common stock. |
SEGMENT AND GEOGRAPHICAL INFORM
SEGMENT AND GEOGRAPHICAL INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
SEGMENT AND GEOGRAPHICAL INFORMATION | |
SEGMENT AND GEOGRAPHICAL INFORMATION | NOTE 9—SEGMENT AND GEOGRAPHICAL INFORMATION The Company operates as one reportable segment consisting primarily of fact-based sourcing advisory services. The Company operates principally in the Americas, Europe and Asia Pacific. Geographical revenue information for the segment is as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Revenues Americas $ 40,256 $ 40,831 $ 78,485 $ 82,507 Europe 22,800 24,047 45,004 45,801 Asia Pacific 4,272 6,148 8,630 11,595 $ 67,328 $ 71,026 $ 132,119 $ 139,903 The segregation of revenues by geographic region is based upon the location of the legal entity performing the services. The Company does not measure or monitor gross profit or operating income by geography or by service line for the purposes of making operating decisions or allocating resources. |
FINANCING ARRANGEMENTS AND LONG
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2019 | |
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | |
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | NOTE 10—FINANCING ARRANGEMENTS AND LONG-TERM DEBT On December 1, 2016, the Company amended and restated its senior secured credit facility to include a $110.0 million term facility and a $30.0 million revolving facility (the “2016 Credit Agreement”). The material terms under the 2016 Credit Agreement are as follows: Each of the term loan facility and revolving credit facility has a maturity date of December 1, 2021 (the “Maturity Date”). The credit facility is secured by all of the equity interests owned by the Company, and its direct and indirect domestic subsidiaries and, subject to agreed exceptions, the Company’s direct and indirect “first-tier” foreign subsidiaries and a perfected first priority security interest in all of the Company’s and its direct and indirect domestic subsidiaries’ tangible and intangible assets. The Company’s direct and indirect existing and future wholly-owned domestic subsidiaries serve as guarantors to the Company’s obligations under the senior secured facility. At the Company’s option, the credit facility bears interest at a rate per annum equal to either (i) the “Base Rate” (which is the highest of (a) the rate publicly announced from time to time by the administrative agent as its “prime rate”, (b) the Federal Funds Rate plus 0.5% per annum and (c) the Eurodollar Rate, plus 1.0%), plus the applicable margin (as defined below) or (ii) Eurodollar Rate (adjusted for maximum reserves) as determined by the Administrative Agent, plus the applicable margin. The applicable margin is adjusted quarterly based upon the Company’s quarterly leverage ratio. The Term Loan is repayable in four consecutive quarterly installments of $1,375,000 each, that commenced March 31, 2017, followed by eight consecutive quarterly installments in the amount of $2,062,500 each, that commenced March 31, 2018, followed by seven consecutive quarterly installments of $2,750,000 each, commencing March 31, 2020 and a final payment of the outstanding principal amount of the Term Loan on the Maturity Date. Mandatory repayments of term loans shall be required from (subject to agreed exceptions) (i) 100% of the proceeds from asset sales by the Company and its subsidiaries, (ii) 100% of the net proceeds from issuances of debt and equity by the Company and its subsidiaries and (iii) 100% of the net proceeds from insurance recovery and condemnation events of the Company and its subsidiaries. The senior secured credit facility contains a number of covenants that, among other things, place restrictions on matters customarily restricted in senior secured credit facilities, including restrictions on indebtedness (including guarantee obligations), liens, fundamental changes, sales or disposition of property or assets, investments (including loans, advances, guarantees and acquisitions), transactions with affiliates, dividends and other payments in respect of capital stock, optional payments and modifications of other material debt instruments, negative pledges and agreements restricting subsidiary distributions and changes in line of business. In addition, the Company is required to comply with a total leverage ratio and fixed charge coverage ratio. · The senior secured credit facility contains customary events of default, including cross-default to other material agreements, judgment default and change of control. On February 10, 2017, as required by the 2016 Credit Agreement, the Company entered into an agreement to cap the interest rate at 4% on the LIBOR component of its borrowings under the term loan facility until December 31, 2019. This interest rate cap was not designated for hedging or speculative purposes. The expense related to this interest rate cap was not material. During the three months ended June 30, 2019, the Company received $3.5 million proceeds from a draw on the revolving credit facility for general corporate purposes. Such amount is not due until the Maturity Date of the Term Loan and is, therefore, included within Long-term debt, net of current maturities, on the condensed consolidated balance sheet as of June 30, 2019. As of June 30, 2019, the total principal outstanding under the term loan facility and revolving credit facility was $91.0 million and $6.0 million, respectively. The effective interest rate for the term loan facility and revolving credit facility as of June 30, 2019 was 5.6% and 5.7%, respectively. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results may differ from those estimates. Additionally, ISG has to determine the nature and timing of the satisfaction of performance obligations, the standalone selling price (“SSP”) of certain performance obligations, among other judgments associated with revenue recognition. Numerous internal and external factors can affect estimates. Estimates are also used for (but not limited to): allowance for doubtful accounts; useful lives of furniture, fixtures and equipment and definite-lived intangible assets; depreciation expense; fair value assumptions in analyzing goodwill and other long-lived assets for impairment; income taxes and deferred tax asset valuation; and the valuation of stock-based compensation. |
Restricted Cash | Restricted Cash Restricted cash consists of cash and cash equivalents which the Company has committed for rent deposits. |
Fair Value | Fair Value The carrying value of the Company’s cash and cash equivalents, restricted cash, receivables, accounts payable, other current liabilities, and accrued interest approximated their fair values at June 30, 2019 and December 31, 2018 due to the short-term nature of these accounts. Fair value measurements were applied with respect to our nonfinancial assets and liabilities measured on a nonrecurring basis, which would consist of measurements primarily to contingent consideration in a business combination. Fair value is the price that would be received upon a sale of an asset or paid upon a transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). Market participants can use market data or assumptions in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable. The use of unobservable inputs is intended to allow for fair value determinations in situations where there is little, if any, market activity for the asset or liability at the measurement date. Under the fair-value hierarchy: · Level 1 measurements include unadjusted quoted market prices for identical assets or liabilities in an active market; · Level 2 measurements include quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets; and · Level 3 measurements include those that are unobservable and of a highly subjective measure. The following tables summarize assets and liabilities measured at fair value on a recurring basis at the dates indicated: Basis of Fair Value Measurements June 30, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 17 $ — $ — $ 17 Total $ 17 $ — $ — $ 17 Liabilities: Contingent consideration (1) $ — $ — $ — $ — Total $ — $ — $ — $ — Basis of Fair Value Measurements December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 315 $ — $ — $ 315 Total $ 315 $ — $ — $ 315 Liabilities: Contingent consideration (1) $ — $ — $ 1,703 $ 1,703 Total $ — $ — $ 1,703 $ 1,703 (1) Contingent consideration is included in “Accrued expenses and other current liabilities.” The fair value measurement of this contingent consideration is classified within Level 3 of the fair value hierarchy and reflects the Company’s own assumptions in measuring fair values using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and industry trends. This amount was estimated through a valuation model that incorporated probability-weighted assumptions related to the achievement of these milestones and the likelihood of the Company making payments. These cash outflow projections have then been discounted using a rate ranging from 14.5% to 28.5%. The following table represents the change in the contingent consideration liability during the six months ended June 30, 2019 and 2018: Six Months Ended June 30, 2019 2018 Beginning Balance $ 1,703 $ 3,698 Payment of contingent consideration (1,730) (2,401) Accretion of contingent consideration 30 1,074 Unrealized (loss) gain related to currency translation (3) 3 Ending Balance $ — $ 2,374 The Company’s financial instruments include outstanding borrowings of $97.0 million at June 30, 2019 and $99.1 million at December 31, 2018, which are carried at amortized cost. The fair value of debt is classified within Level 3 of the fair value hierarchy. The fair value of the Company's outstanding borrowings is approximately $96.8 million and $98.9 million at June 30, 2019 and December 31, 2018, respectively. The fair values of debt have been estimated using a discounted cash flow analysis based on the Company's incremental borrowing rate for similar borrowing arrangements. The incremental borrowing rate used to discount future cash flows ranged from 5.57% to 5.65%. The Company also considered recent transactions of peer group companies for similar instruments with comparable terms and maturities as well as an analysis of current market conditions. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued an update that modifies the disclosure requirements for fair value measurements by removing, modifying or adding disclosures. The guidance is effective for fiscal year beginning after December 15, 2019 and early adoption is permitted. Certain disclosures in the update are applied retrospectively, while others are applied prospectively. The Company is currently evaluating the potential impact of adopting this guidance on its financial statements. In September 2018, the FASB issued new guidance which requires a customer in a cloud computing arrangement to determine which implementation costs to capitalize as assets or expense as incurred. Under the new guidance, capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods, and early adoption is permitted. The Company is currently evaluating the potential impact of adopting this guidance on its financial statements. In November 2018, the FASB issued guidance to clarify that certain transactions between parties to collaborative arrangements should be accounted for in accordance with FASB revenue guidance when the counterparty is a customer. This guidance also prohibits the presentation of collaborative arrangements as revenues from contracts with customers if the counterparty is not a customer. This guidance, which is required to be applied retrospectively and is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, is not expected to have an impact on the Company’s consolidated financial statement. In June 2016, the FASB issued new guidance on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable, and available-for-sale debt securities. The new guidance replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. This update is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018, including interim periods within those annual periods. At its July 17th meeting, the FASB voted to propose a deferral of the effective date of this guidance to smaller reporting companies to fiscal years beginning after December 15, 2022. The FASB expects to issue the final amendments by December 31, 2019. The Company is currently evaluating the potential impact of adopting this guidance on its financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of assets and liabilities measured at fair value on a recurring basis | Basis of Fair Value Measurements June 30, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 17 $ — $ — $ 17 Total $ 17 $ — $ — $ 17 Liabilities: Contingent consideration (1) $ — $ — $ — $ — Total $ — $ — $ — $ — Basis of Fair Value Measurements December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 315 $ — $ — $ 315 Total $ 315 $ — $ — $ 315 Liabilities: Contingent consideration (1) $ — $ — $ 1,703 $ 1,703 Total $ — $ — $ 1,703 $ 1,703 (1) Contingent consideration is included in “Accrued expenses and other current liabilities.” |
Schedule of change in the contingent consideration liability | Six Months Ended June 30, 2019 2018 Beginning Balance $ 1,703 $ 3,698 Payment of contingent consideration (1,730) (2,401) Accretion of contingent consideration 30 1,074 Unrealized (loss) gain related to currency translation (3) 3 Ending Balance $ — $ 2,374 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
REVENUE | |
Schedule of contract assets and contract liabilities | June 30, December 31, 2019 2018 Contract assets $ 38,665 $ 22,878 Contract liabilities $ 3,576 $ 6,187 |
Schedule of revenue disaggregated by geographic area | Three Months Ended Six Months Ended June 30, June 30, Geographic area 2019 2018 2019 2018 Americas $ 40,256 $ 40,831 $ 78,485 $ 82,507 Europe 22,800 24,047 45,004 45,801 Asia Pacific 4,272 6,148 8,630 11,595 $ 67,328 $ 71,026 $ 132,119 $ 139,903 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
LEASES | |
Schedule of components of lease expense | Three Months Ended Six Months Ended June 30, June 30, 2019 2019 Lease cost Operating lease cost $ 1,012 $ 1,801 Finance lease cost: Amortization of right-of-use assets 4 4 Interest on lease liabilities 1 1 Short-term lease cost 9 11 Variable lease cost 41 120 Sublease income (61) (122) Total lease cost $ 1,006 $ 1,815 Supplemental cash flow information related to leases was as follows Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 3 $ 3 Operating cash flows from operating leases $ 796 $ 1,809 Financing cash flows from finance leases $ 1 $ 1 |
Schedule of supplemental balance sheet information related to leases | (In thousands, except lease term and discount rate) June 30, 2019 Operating leases Operating lease right-of-use assets $ 7,525 Current operating lease liabilities (1) $ 3,116 Non-current operating lease liabilities 6,015 Total operating lease liabilities $ 9,131 Finance leases Finance lease right-of-use assets $ 63 Current finance lease liabilities (1) $ 24 Non-current finance lease liabilities 39 Total finance lease liabilities $ 63 Weighted average remaining lease term (in years) Operating leases 4.4 Finance leases 2.8 Weighted average discount rate Operating leases Finance leases (1) Current lease liabilities are included in “Accrued expenses and other current liabilities.” |
Schedule of maturities of lease liabilities | Operating Finance Leases Leases Year Ending December 31, 2019 (excluding the six months ended June 30, 2019) $ 1,704 $ 13 2020 3,048 25 2021 2,071 25 2022 1,343 8 2023 938 — Thereafter 1,778 — Total lease payments 10,882 71 Less imputed interest (1,751) (8) Total $ 9,131 $ 63 |
Schedule of maturities of lease liabilities | Operating Finance Leases Leases Year Ending December 31, 2019 (excluding the six months ended June 30, 2019) $ 1,704 $ 13 2020 3,048 25 2021 2,071 25 2022 1,343 8 2023 938 — Thereafter 1,778 — Total lease payments 10,882 71 Less imputed interest (1,751) (8) Total $ 9,131 $ 63 |
Schedule of minimum rental commitments under non-cancelable operating leases under ASC 840 | Operating Leases 2019 $ 3,034 2020 2,654 2021 1,808 2022 1,218 2023 925 Thereafter 1,795 Total minimum lease payments $ 11,434 |
NET INCOME PER COMMON SHARE (Ta
NET INCOME PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
NET INCOME PER COMMON SHARE | |
Schedule of computation of basic and diluted earnings per share | Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Basic: Net income (loss) $ 414 $ 2,362 $ (484) $ 2,526 Weighted average common shares 46,880 44,655 46,344 44,180 Earnings (loss) per share $ 0.01 $ 0.05 $ (0.01) $ 0.06 Diluted: Net income (loss) $ 414 $ 2,362 $ (484) $ 2,526 Basic weighted average common shares 46,880 44,655 46,344 44,180 Potential common shares 521 1,431 — 1,793 Diluted weighted average common shares 47,401 46,086 46,344 45,973 Diluted earnings (loss) per share $ 0.01 $ 0.05 $ (0.01) $ 0.05 |
SEGMENT AND GEOGRAPHICAL INFO_2
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
SEGMENT AND GEOGRAPHICAL INFORMATION | |
Schedule of geographical revenue information for the segment | Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Revenues Americas $ 40,256 $ 40,831 $ 78,485 $ 82,507 Europe 22,800 24,047 45,004 45,801 Asia Pacific 4,272 6,148 8,630 11,595 $ 67,328 $ 71,026 $ 132,119 $ 139,903 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019USD ($)item | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Liabilities: | |||
Contingent consideration | $ 1,703 | $ 3,698 | $ 1,703 |
Change in the contingent consideration liability | |||
Beginning Balance | 1,703 | 3,698 | |
Payment of contingent consideration | (1,730) | (2,401) | |
Accretion of contingent consideration | 30 | 1,074 | |
Unrealized (loss) gain related to currency translation | (3) | 3 | |
Ending Balance | $ 2,374 | ||
Outstanding borrowings | 97,000 | 99,100 | |
Fair value of outstanding borrowing | $ 96,800 | 98,900 | |
Minimum | |||
Change in the contingent consideration liability | |||
Incremental borrowing rate used to discount future cash flows from financial instruments (as a percent) | 5.57% | ||
Maximum | |||
Change in the contingent consideration liability | |||
Incremental borrowing rate used to discount future cash flows from financial instruments (as a percent) | 5.65% | ||
Discount rate | Minimum | |||
Liabilities: | |||
Contingent consideration, measurement input | item | 0.145 | ||
Discount rate | Maximum | |||
Liabilities: | |||
Contingent consideration, measurement input | item | 0.285 | ||
Recurring | |||
Assets: | |||
Cash equivalents | $ 17 | 315 | |
Total | 17 | 315 | |
Liabilities: | |||
Contingent Consideration Classified as Equity, Fair Value Disclosure | 1,703 | ||
Total | 1,703 | ||
Recurring | Fair Value Inputs Level1 [Member] | |||
Assets: | |||
Cash equivalents | 17 | 315 | |
Total | $ 17 | 315 | |
Recurring | Fair Value Inputs Level3 [Member] | |||
Liabilities: | |||
Contingent Consideration Classified as Equity, Fair Value Disclosure | 1,703 | ||
Total | $ 1,703 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
REVENUE | |
Practical expedient incremental costs to obtain a contract | true |
Remaining performance obligations | $ 86.7 |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
REVENUE | |||
Contract assets | $ 38,665 | $ 38,665 | $ 22,878 |
Contract liabilities | 3,576 | 3,576 | $ 6,187 |
Revenue recognized, included in contract liability balance | $ 2,500 | $ 5,700 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | ||||
Revenues | $ 67,328 | $ 71,026 | $ 132,119 | $ 139,903 |
Americas | ||||
Revenue | ||||
Revenues | 40,256 | 40,831 | 78,485 | 82,507 |
Europe | ||||
Revenue | ||||
Revenues | 22,800 | 24,047 | 45,004 | 45,801 |
Asia Pacific | ||||
Revenue | ||||
Revenues | $ 4,272 | $ 6,148 | $ 8,630 | $ 11,595 |
LEASES (Details)
LEASES (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Lessee, Lease, Description [Line Items] | |
Package of practical expedients | true |
Use of hindsight | false |
Options to extend the leases | True |
Options to terminate the leases | true |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Extended term | 3 years |
Term of options to terminate the leases | 1 year |
LEASES (Details) - Components o
LEASES (Details) - Components of lease expense - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Lease cost | ||
Operating lease cost | $ 1,012 | $ 1,801 |
Finance lease cost: | ||
Amortization of right-of-use assets | 4 | 4 |
Interest on lease liabilities | 1 | 1 |
Short-term lease cost | 9 | 11 |
Variable lease cost | 41 | 120 |
Sublease income | (61) | (122) |
Total lease cost | 1,006 | 1,815 |
Supplemental cash flow information related to leases was as follows: | ||
Operating cash flows from finance leases | 3 | 3 |
Operating cash flows from operating leases | 796 | 1,809 |
Financing cash flows from finance leases | $ 1 | $ 1 |
LEASES (Details) - Supplemental
LEASES (Details) - Supplemental balance sheet information related to leases $ in Thousands | Jun. 30, 2019USD ($) |
LEASES | |
Operating lease right-of-use assets | $ 7,525 |
Current operating lease liabilities | $ 3,116 |
Current operating lease liabilities, Statement of Financial Position | iii:AccruedExpensesAndOtherCurrentLiabilitiesMember |
Non-current operating lease liabilities | $ 6,015 |
Total operating lease liabilities | 9,131 |
Finance lease right-of-use assets | 63 |
Current finance lease liabilities | 24 |
Non-current finance lease liabilities | 39 |
Total finance lease liabilities | $ 63 |
Weighted average remaining lease term (in years) - Operating leases | 4 years 4 months 24 days |
Weighted average remaining lease term (in years) - Finance leases | 2 years 9 months 18 days |
Weighted average discount rate (as a percentage) - Operating leases | 7.70% |
Weighted average discount rate (as a percentage) - Finance leases | 7.90% |
LEASES (Details) - Maturities o
LEASES (Details) - Maturities of lease liabilities and minimum rental commitments under non-cancelable operating leases under ASC 840 - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Maturities of lease liabilities - Operating Leases | ||
2019 (excluding the six months ended June 30, 2019) | $ 1,704 | |
2020 | 3,048 | |
2021 | 2,071 | |
2022 | 1,343 | |
2023 | 938 | |
Thereafter | 1,778 | |
Total lease payments | 10,882 | |
Less imputed interest | (1,751) | |
Total | 9,131 | |
Maturities of lease liabilities - Finance Leases | ||
2019 (excluding the six months ended June 30, 2019) | 13 | |
2020 | 25 | |
2021 | 25 | |
2022 | 8 | |
Total lease payments | 71 | |
Less imputed interest | (8) | |
Total | $ 63 | |
Minimum rental commitments under non-cancelable operating leases under ASC 840 | ||
2019 | $ 3,034 | |
2020 | 2,654 | |
2021 | 1,808 | |
2022 | 1,218 | |
2023 | 925 | |
Thereafter | 1,795 | |
Total minimum lease payments | $ 11,434 |
NET INCOME PER COMMON SHARE - A
NET INCOME PER COMMON SHARE - Antidilutive Securities (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Restricted shares | ||
Antidilutive securities | ||
Securities considered antidilutive (in shares) | 1.2 | 6 |
NET INCOME PER COMMON SHARE - C
NET INCOME PER COMMON SHARE - Computation of basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Basic: | ||||
Net income (loss) | $ 414 | $ 2,362 | $ (484) | $ 2,526 |
Weighted average common shares | 46,880 | 44,655 | 46,344 | 44,180 |
Earnings (loss) per share | $ 0.01 | $ 0.05 | $ (0.01) | $ 0.06 |
Diluted: | ||||
Net income (loss) | $ 414 | $ 2,362 | $ (484) | $ 2,526 |
Basic weighted average common shares | 46,880 | 44,655 | 46,344 | 44,180 |
Potential common shares | 521 | 1,431 | 1,793 | |
Diluted weighted average common shares | 47,401 | 46,086 | 46,344 | 45,973 |
Diluted earnings (loss) per share | $ 0.01 | $ 0.05 | $ (0.01) | $ 0.05 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
INCOME TAXES | ||||
Effective income tax rates (as a percent) | 76.40% | 6.40% | 2.00% | 4.10% |
Pretax income | $ 1,753 | $ 2,524 | $ (494) | $ 2,633 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Contingent Consideration | |||
Contingent consideration paid | $ 1,730 | $ 2,401 | |
Experton | |||
Contingent Consideration | |||
Contingent consideration paid | $ 300 | ||
Percentage of contingent consideration made in shares of common stock | 50.00% | ||
TracePoint | |||
Contingent Consideration | |||
Contingent consideration paid | $ 1,500 | ||
Percentage of contingent consideration made in shares of common stock | 50.00% |
SEGMENT AND GEOGRAPHICAL INFO_3
SEGMENT AND GEOGRAPHICAL INFORMATION (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) | |
Segment and geographical information | ||||
Number of segments | segment | 1 | |||
Revenues | $ 67,328 | $ 71,026 | $ 132,119 | $ 139,903 |
Americas | ||||
Segment and geographical information | ||||
Revenues | 40,256 | 40,831 | 78,485 | 82,507 |
Europe | ||||
Segment and geographical information | ||||
Revenues | 22,800 | 24,047 | 45,004 | 45,801 |
Asia Pacific | ||||
Segment and geographical information | ||||
Revenues | $ 4,272 | $ 6,148 | $ 8,630 | $ 11,595 |
FINANCING ARRANGEMENTS AND LO_2
FINANCING ARRANGEMENTS AND LONG-TERM DEBT (Details) | Dec. 01, 2016USD ($) | Mar. 31, 2020USD ($)installment | Jun. 30, 2019USD ($) | Mar. 31, 2018USD ($)installment | Mar. 31, 2017USD ($)installment | Jun. 30, 2019USD ($) | Feb. 10, 2017 |
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | |||||||
Proceeds from debt | $ 3,500,000 | ||||||
LIBOR | |||||||
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | |||||||
Cap interest rate | 4.00% | ||||||
Senior secured credit facility | Federal Funds Rate | |||||||
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | |||||||
Applicable margin (as a percent) | 0.50% | ||||||
Senior secured credit facility | Eurodollar Rate | |||||||
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | |||||||
Applicable margin (as a percent) | 1.00% | ||||||
2016 Credit Agreement | |||||||
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | |||||||
Percentage of proceeds from asset sales used for mandatory repayments of the debt | 100.00% | ||||||
Percentage of net proceeds from issuances of debt and equity used for mandatory repayments of the debt | 100.00% | ||||||
Percentage of net proceeds from insurance recovery and condemnation events used for mandatory repayments of the debt | 100.00% | ||||||
2016 Credit Agreement | Term loan facility | |||||||
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | |||||||
Maximum borrowing capacity | $ 110,000,000 | ||||||
Number of quarterly installments | installment | 7 | 8 | 4 | ||||
Periodic repayment | $ 2,750,000 | $ 2,062,500 | $ 1,375,000 | ||||
Total principal outstanding | $ 91,000,000 | $ 91,000,000 | |||||
Effective interest rate | 5.60% | 5.60% | |||||
2016 Credit Agreement | Revolving facility | |||||||
FINANCING ARRANGEMENTS AND LONG-TERM DEBT | |||||||
Maximum borrowing capacity | $ 30,000,000 | ||||||
Proceeds from debt | $ 3,500,000 | ||||||
Total principal outstanding | $ 6,000,000 | $ 6,000,000 | |||||
Effective interest rate | 5.70% | 5.70% |