Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | MASTECH DIGITAL, INC. | |
Entity Central Index Key | 0001437226 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity File Number | 001-34099 | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 26-2753540 | |
Entity Address, Address Line One | 1305 Cherrington Parkway | |
Entity Address, Address Line Two | Building 210 | |
Entity Address, Address Line Three | Suite 400 | |
Entity Address, City or Town | Moon Township | |
Entity Address, Postal Zip Code | 15108 | |
Entity Address, State or Province | PA | |
City Area Code | 412 | |
Local Phone Number | 787-2100 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | MHH | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 11,431,052 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 49,775 | $ 50,425 |
Cost of revenues | 36,971 | 37,706 |
Gross profit | 12,804 | 12,719 |
Selling, general and administrative expense | 10,935 | 10,243 |
Income from operations | 1,869 | 2,476 |
Interest income (expense), net | (195) | (279) |
Other income (expense), net | (37) | 53 |
Income before income taxes | 1,637 | 2,250 |
Income tax expense | 443 | 381 |
Net income | $ 1,194 | $ 1,869 |
Earnings Per Share: | ||
Basic | $ 0.10 | $ 0.17 |
Diluted | $ 0.10 | $ 0.16 |
Weighted average common shares outstanding: | ||
Basic | 11,415 | 11,127 |
Diluted | 11,997 | 11,675 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Net income | $ 1,194 | $ 1,869 |
Other comprehensive income (loss): | ||
Net unrealized gain (loss) on interest-rate swap contracts | 35 | (94) |
Foreign currency translation adjustments | (19) | (267) |
Total pretax net unrealized gain (loss) | 16 | (361) |
Income tax expense (benefit) | 9 | (25) |
Total other comprehensive gain (loss), net of taxes | 7 | (336) |
Total comprehensive income | $ 1,201 | $ 1,533 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 7,242 | $ 7,677 |
Accounts receivable, net of allowance for uncollectible accounts of $426 in 2021 and $413 in 2020 | 23,425 | 22,036 |
Unbilled receivables | 12,781 | 10,098 |
Prepaid and other current assets | 1,238 | 1,346 |
Total current assets | 44,686 | 41,157 |
Equipment, enterprise software, and leasehold improvements, at cost: | ||
Equipment | 2,055 | 1,931 |
Enterprise software | 2,730 | 2,730 |
Leasehold improvements | 563 | 563 |
Total equipment, enterprise software, and leasehold improvements | 5,348 | 5,224 |
Less – accumulated depreciation and amortization | (3,453) | (3,253) |
Net equipment, enterprise software, and leasehold improvements | 1,895 | 1,971 |
Operating lease right-of-use assets | 3,199 | 3,286 |
Deferred income taxes | 804 | 796 |
Non-current deposits | 459 | 396 |
Goodwill, net of impairment | 32,510 | 32,510 |
Intangible assets, net of amortization | 21,137 | 21,930 |
Total assets | 104,690 | 102,046 |
Current liabilities: | ||
Current portion of long-term debt | 4,400 | 4,400 |
Accounts payable | 3,915 | 2,589 |
Accrued payroll and related costs | 12,882 | 12,374 |
Current portion of operating lease liability | 1,056 | 1,079 |
Other accrued liabilities | 1,166 | 1,051 |
Deferred revenue | 405 | 478 |
Total current liabilities | 23,824 | 21,971 |
Long-term liabilities: | ||
Long-term debt, less current portion, net | 11,795 | 12,875 |
Contingent consideration liability | 2,882 | 2,882 |
Long-term operating lease liability, less current portion | 2,273 | 2,325 |
Long-term accrued income taxes | 165 | 165 |
Long-term payroll tax liabilities | 2,295 | 2,295 |
Total liabilities | 43,234 | 42,513 |
Commitments and contingent liabilities (Note 6) | ||
Shareholders' equity: | ||
Preferred Stock, no par value; 20,000,000 shares authorized; none outstanding | ||
Common Stock, par value $.01; 250,000,000 shares authorized and 13,076,972 shares issued as of March 31, 2021 and 13,039,893 shares issued as of December 31, 2020 | 130 | 130 |
Additional paid-in-capital | 26,231 | 25,509 |
Retained earnings | 39,814 | 38,620 |
Accumulated other comprehensive income (loss) | (532) | (539) |
Treasury stock, at cost; 1,646,420 shares as of March 31, 2021 and as of December 31, 2020 | (4,187) | (4,187) |
Total shareholders' equity | 61,456 | 59,533 |
Total liabilities and shareholders' equity | $ 104,690 | $ 102,046 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for uncollectible accounts | $ 426 | $ 413 |
Preferred Stock, par value | $ 0 | $ 0 |
Preferred Stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred Stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 13,076,972 | 13,039,893 |
Treasury stock, shares | 1,646,420 | 1,646,420 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (loss) [Member] |
Beginning Balances at Dec. 31, 2019 | $ 46,280 | $ 127 | $ 21,939 | $ 28,759 | $ (4,187) | $ (358) |
Net income | 1,869 | 1,869 | ||||
Other comprehensive gain (loss), net of taxes | (336) | (336) | ||||
Stock-based compensation expense | 456 | 456 | ||||
Stock options exercised | 556 | 1 | 555 | |||
Ending Balances at Mar. 31, 2020 | 48,825 | 128 | 22,950 | 30,628 | (4,187) | (694) |
Beginning Balances at Dec. 31, 2020 | 59,533 | 130 | 25,509 | 38,620 | (4,187) | (539) |
Net income | 1,194 | 1,194 | ||||
Other comprehensive gain (loss), net of taxes | 7 | 7 | ||||
Stock-based compensation expense | 621 | 621 | ||||
Stock options exercised | 101 | 101 | ||||
Ending Balances at Mar. 31, 2021 | $ 61,456 | $ 130 | $ 26,231 | $ 39,814 | $ (4,187) | $ (532) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
OPERATING ACTIVITIES: | ||
Net income | $ 1,194 | $ 1,869 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 997 | 873 |
Interest amortization of deferred financing costs | 20 | 26 |
Stock-based compensation expense | 621 | 456 |
Deferred income taxes, net | (8) | (182) |
Operating lease assets and liabilities, net | 12 | (37) |
Loss on disposition of fixed assets | 2 | |
Working capital items: | ||
Accounts receivable and unbilled receivables | (4,072) | (1,244) |
Prepaid and other current assets | 108 | 492 |
Accounts payable | 1,326 | (587) |
Accrued payroll and related costs | 508 | 1,554 |
Other accrued liabilities | 141 | (276) |
Deferred revenue | (73) | (151) |
Net cash flows provided by operating activities | 774 | 2,795 |
INVESTING ACTIVITIES: | ||
Recovery of (payment for) non-current deposits | (63) | 17 |
Capital expenditures | (128) | (119) |
Net cash flows (used in) investing activities | (191) | (102) |
FINANCING ACTIVITIES: | ||
(Repayments) borrowings on revolving credit facility, net | (2,244) | |
(Repayments) on term loan facility | (1,100) | (1,144) |
Proceeds from exercise of stock options | 101 | 556 |
Net cash flows (used in) financing activities | (999) | (2,832) |
Effect of exchange rate changes on cash and cash equivalents | (19) | (267) |
Net change in cash and cash equivalents | (435) | (406) |
Cash and cash equivalents, beginning of period | 7,677 | 2,981 |
Cash and cash equivalents, end of period | $ 7,242 | $ 2,575 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation: Basis of Presentation References in this Quarterly Report on Form 10-Q Description of Business We are a provider of Digital Transformation IT Services to mostly large and medium-sized Our portfolio of offerings includes data management and analytics services; digital learning services; and IT staffing services. Reflective of our 2017 acquisition of the services division of Canada-based InfoTrellis, Inc., we have added specialized capabilities in delivering data and analytics services to our customers globally. This business offers project-based consulting services in the areas of data management, data engineering and data science, with such services delivered using on-site Our IT staffing business combines technical expertise with business process experience to deliver a broad range of staffing services in digital and mainstream technologies. Our digital technologies include data management, analytics, cloud, mobility, social and artificial intelligence. We work with businesses and institutions with significant IT spending and recurring staffing service needs. We also support smaller organizations with their “project focused” temporary IT staffing requirements. The COVID-19 roll-out Accounting Principles The accompanying Financial Statements have been prepared by management in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting principally of normal recurring adjustments, considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and the accompanying notes. Actual results could differ from these estimates. These Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2020, included in our Annual Report on Form 10-K Principles of Consolidation The Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. Critical Accounting Policies Please refer to Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K Segment Reporting The Company has two reportable segments, in accordance with Accounting Standards Committee (“ASC”) Topic 280 “Disclosures About Segments of an Enterprise and Related Information”: Data and Analytics Services and IT Staffing Services. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 2. Revenue from Contracts with Customers The Company recognizes revenue on time-and-material Time-and-material out-of-pocket Out-of-pocket The Company recognizes revenue on fixed price contracts over time as services are rendered and uses a cost-based input method to measure progress. Determining a measure of progress requires management to make judgments that affect the timing of revenue recognized. Under the cost-based input method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. The Company has determined that the cost-based input method provides a faithful depiction of the transfer of goods or services to the customer. Estimated losses are recognized immediately in the period in which current estimates indicate a loss. We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which may be refundable. The Company’s time-and-material In certain situations related to client direct hire assignments, where the Company’s fee is contingent upon the hired resources continued employment with the client, revenue is not fully recognized until such employment conditions are satisfied. We do not sell, lease or otherwise market computer software or hardware, and essentially 100% of our revenue is derived from the sale of data and analytics, IT staffing and digital transformation services. We expense sales commissions in the same period in which revenues are realized. These costs are recorded within sales and marketing expenses. Each contract the Company enters into is assessed to determine the promised services to be performed and includes identification of the performance obligations required by the contract. In substantially all of our contracts, we have identified a single performance obligation for each contract either because the promised services are distinct or the promised services are highly interrelated and interdependent and therefore represent a combined single performance obligation. Our Data and Analytics Services segment provides specialized capabilities in delivering data management and analytics services to customers globally. This business offers project-based consulting services in the areas of Master Data Management, Enterprise Data Integration, Data Engineering and Analytics, which can be delivered using onsite and offshore resources. Our IT Staffing Services segment combines technical expertise with business process experience to deliver a broad range of services in digital and mainstream technologies. Our digital technology stack includes data management and analytics, cloud, mobility, social and automation. Our mainstream technologies include business intelligence / data warehousing; web services; enterprise resource planning & customer resource management; and e-Business The following table depicts the disaggregation of our revenues by contract type and operating segment: Three Months Ended March 31, 2021 2020 (Amounts in thousands) Data and Analytics Services Segment Time-and-material $ 5,854 $ 4,127 Fixed-price Contracts 2,940 3,233 Subtotal Data and Analytics Services $ 8,794 $ 7,360 IT Staffing Services Segment Time-and-material $ 40,981 $ 43,065 Fixed-price Contracts — — Subtotal IT Staffing Services $ 40,981 $ 43,065 Total Revenues $ 49,775 $ 50,425 For the three months ended March 31, 2021, the Company had one client (CGI = 15%) that exceeded 10% of total revenues. For the three months ended March 31, 2020, the Company had the same one client (CGI = 12.7%) that exceeded 10% of total revenues. The Company’s top ten clients represented approximately 47% and 46% of total revenues for the three months ended March 31, 2021 and 2020, respectively. The following table presents our revenue from external customers disaggregated by geography, based on the work location of our customers: Three Months Ended March 31, 2021 2020 (Amounts in thousands) United States $ 47,942 $ 49,350 Canada 1,264 861 India and other 569 214 Total $ 49,775 $ 50,425 |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Business Combinations | 3. Business Combinations On October 1, 2020, Mastech Digital, Inc., through its wholly-owned subsidiary Mastech Digital Data, Inc., acquired all of the outstanding shares of AmberLeaf Partners, Inc. (“AmberLeaf”). Under the terms of the Share Purchase Agreement executed in connection with the AmberLeaf acquisition (the “Purchase Agreement”), the Company paid at the closing of the acquisition approximately $9.7 million in cash. The Purchase Agreement also requires the Company to pay to the former shareholders of AmberLeaf up to $4.5 million in deferred cash payments, which payments are contingent upon the AmberLeaf business achieving specific revenue growth and EBITDA margin targets. The amount of these deferred cash payments, if any, is based upon the revenue growth and EBITDA margins of the AmberLeaf business for the 12-month 12-month To fund the acquisition, on October 1, 2020 the Company entered into a Third Amendment (the “Third Amendment”) to its Credit Agreement, as amended and dated April 20, 2018. The Third Amendment amends the Credit Agreement by, among other things, (1) increasing the aggregate commitment amount of the revolving credit facility to $30 million (an increase of $7.5 million); (2) providing for the Term Loan facility in the aggregate amount of $17.5 million (an increase of $10 million); (3) providing for an increase in the total commitment amount to the facility in an aggregate amount not to exceed $15 million, upon the satisfaction of certain conditions; and (4) amending the financial covenant in the Credit Agreement related to the Company’s Fixed Charge Coverage Ratio (as defined in the Credit Agreement) by increasing the minimum permitted Fixed Charge Coverage Ratio for each of the fiscal quarters ending on or after September 30, 2020. The acquisition was accounted for using the acquisition method of accounting. The acquisition method of accounting requires that the assets acquired and liabilities assumed be measured at their fair value as of the closing date. The following table summarizes the fair value of consideration for the acquired business on the October 1, 2020 closing date: (in thousands) Amounts Cash purchase price at closing $ 9,664 Working capital adjustments — Estimated payout of contingent consideration (1) 2,882 Total Fair Value of Consideration $ 12,546 (1) Based on a valuation conducted by an independent third party, the fair value of contingent consideration at the closing date was determined to be $2,882,000. The cash purchase price at closing was paid with funds obtained from the following sources: (in thousands) Amounts Cash balances on hand $ — Increase in term loan debt facility 10,000 Revolving line of credit (336 ) Cash Paid at Closing $ 9,664 The allocation of the purchase price was based on estimates of the fair value of assets acquired and liabilities assumed as of October 1, 2020, as set forth below. The excess purchase price over the fair values of the net tangible assets and identifiable intangible assets was recorded as goodwill, which includes value associated with the assembled workforce. Goodwill is expected to be largely deductible for tax purposes. The valuation of net assets acquired is as follows: (in thousands) Amounts Cash on hand $ 319 Working capital assets, net of liabilities 1,153 Identifiable intangible assets: Client relationships 2,970 Covenant not-to-compete 440 Trade name 490 Technology 770 Total identifiable intangible assets 4,670 Goodwill 6,404 Net Assets Acquired $ 12,546 The fair value of identifiable intangible assets has been estimated using the income approach through a discounted cash flow analysis. Specifically, the Company used the income approach through an excess earnings analysis to determine the fair value of client relationships. The value applied to the covenant not-to-compete The Company incurred $650,000 of transaction expenses related to the acquisition in 2020 inclusive of the write-off Included in the Condensed Statement of Operations for the three months ended March 31, 2021 are revenues of $1.9 million and a net loss of approximately $0.1 million applicable to the AmberLeaf operations acquired on October 1, 2020. The following reflects the Company’s unaudited pro forma results had the results of AmberLeaf been included for all periods presented: Three Months Ended March 31, 2021 Actual 2020 Pro Forma (Amounts in thousands, except per share data) Revenue $ 49,775 $ 53,634 Net income $ 1,194 $ 2,337 Earnings per share—diluted $ . 10 $ . 20 The information above does not reflect all of the operating efficiencies or inefficiencies that may have resulted from the AmberLeaf acquisition in those periods prior to the acquisition. Therefore, the unaudited pro forma information above is not necessarily indicative of results that would have been achieved had the business been combined during all periods presented. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, net | 4. Goodwill and Other Intangible Assets, net Goodwill related to our June 15, 2015 acquisition of Hudson Global Resources Management’s U.S. IT staffing business (“Hudson IT”) totaled $8.4 million. Goodwill related to our July 13, 2017 acquisition of the services division of InfoTrellis totaled $27.4 million. Goodwill related to our October 1, 2020 acquisition of AmberLeaf totaled $6.4 million. The Company is amortizing the identifiable intangible assets on a straight-line basis over estimated average lives ranging from 3 to 12 years. Identifiable intangible assets were comprised of the following as of March 31, 2021 and December 31, 2020: As of March 31, 2021 (Amounts in thousands) Amortization Gross Carrying Accumulative Net Carrying IT Staffing Services: Client relationships 12 $ 7,999 $ 3,861 $ 4,138 Covenant-not-to-compete 5 319 319 — Trade name 3 249 249 — Data and Analytics Services: Client relationships 12 19,641 5,274 14,367 Covenant-not-to-compete 5 1,201 608 593 Trade name 5 1,711 956 755 Technology 7 1,979 695 1,284 Total Intangible Assets $ 33,099 $ 11,962 $ 21,137 As of December 31, 2020 (Amounts in thousands) Amortization Gross Carrying Accumulative Net Carrying IT Staffing Services: Client relationships 12 $ 7,999 $ 3,694 $ 4,305 Covenant-not-to-compete 5 319 319 — Trade name 3 249 249 — Data and Analytics Services: Client relationships 12 19,641 4,866 14,775 Covenant-not-to-compete 5 1,201 548 653 Trade name 5 1,711 869 842 Technology 7 1,979 624 1,355 Total Intangible Assets $ 33,099 $ 11,169 $ 21,930 Amortization expense for the three months ended March 31, 2021 and 2020 totaled $793,000 and $673,000, respectively and is included in selling, general and administrative expenses in the Condensed Consolidated Statement of Operations. The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2021 through 2025 is as follows: Years Ended December 31, 2021 2022 2023 2024 2025 (Amounts in thousands) Amortization expense $ 3,168 $ 2,987 $ 2,772 $ 2,693 $ 2,553 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | 5. Leases The Company rents certain office facilities and equipment under noncancelable operating leases. As of March 31, 2021, approximately 82,000 square feet of office space is utilized for our sales and recruiting offices, delivery centers, and corporate headquarters. All of our leases are classified as operating leases. The average initial lease term is four years. Several leases have an option to renew, at our sole discretion, for an additional term. Our present lease terms range from less than one year to 5.3 years with an average of 2.1 years. Leases with an initial term of twelve months or less are not recorded on the balance sheet. The following table summarizes the balance sheet classification of the lease assets and related lease liabilities: March 31, 2021 December 31, 2020 ( in thousands) Assets: Long-term operating lease right-of-use $ 3,199 $ 3,286 Liabilities: Short-term operating lease liability $ 1,056 $ 1,079 Long-term operating lease liability 2,273 2,325 Total liabilities $ 3,329 $ 3,404 Future minimum rental payments for office facilities and equipment under the Company’s noncancelable operating leases are as follows: Amount as of (in thousands) 2021 (For remainder of year) $ 888 2022 1,187 2023 1,139 2024 339 2025 52 Thereafter 30 Total 3,635 Less: Imputed interest (306 ) Present value of operating lease liabilities $ 3,329 The weighted average discount rate used to calculate the present value of future lease payments was 5.2%. We recognize rent expense for these leases on a straight-line basis over the lease term. Rental expense for the three months ended March 31, 2021 and 2020 totaled $0.4 million and $0.4 million, respectively. Total cash paid for lease liabilities for the three months ended March 31, 2021 and 2020 totaled $0.4 million and $0.4 million, respectively. New leases entered into during the three months ended March 31, 2021 and 2020 totaled $0.3 million and $0.2 million, respectively. On April 1, 2021, the Company entered into a three year operating lease for 35,356 square feet of office space in Chennai, India. This lease replaces the Company’s existing 19,120 square foot lease. Lease payments over the three year period will approximate $1.4 million in the aggregate. The lease is renewable for two additional three-year terms with a 15% increase in rent. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies In the ordinary course of our business, the Company is involved in a number of lawsuits and administrative proceedings. While uncertainties are inherent in the final outcome of these matters, the Company’s management believes, after consultation with legal counsel, that the disposition of these proceedings should not have a material adverse effect on our financial position, results of operations or cash flows. |
Employee Benefit Plan
Employee Benefit Plan | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | 7. Employee Benefit Plan The Company provides an Employee Retirement Savings Plan (the “Retirement Plan”) under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), that covers substantially all U.S. based salaried and W-2 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 8. Stock-Based Compensation In 2008, the Company adopted a Stock Incentive Plan (the “Plan”) which, as amended, provides that up to 4,900,000 shares of the Company’s Common Stock shall be allocated for issuance to directors, officers and key personnel. Grants under the Plan can be made in the form of stock options, stock appreciation rights, performance shares or stock awards. During the three months ended March 31, 2021, the Company granted restricted share units of 11,955 and 270,000 stock option grants at an average strike price of $17.65. During the three months ended March 31, 2020, the Company granted 11,475 restricted share units and 800,000 stock options at a strike price of $15.49 under the Plan. As of March 31, 2021 there were 339,000 shares available for grants under the Plan. Stock-based compensation expense for the three months ended March 31, 2021 and 2020 was $621,000 and $456,000, respectively, and is included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. During the three months ended March 31, 2021 and 2020, the Company issued 29,739 and 141,066 shares, respectively, related to the vesting of restricted shares and the exercising of stock options. In October 2018, the Board of Directors of the Company approved the Mastech Digital, Inc. 2019 Employee Stock Purchase Plan (the “Stock Purchase Plan”). The Stock Purchase Plan is intended to meet the requirements of Section 423 of the Code and was approved by the Company’s shareholders to be qualified. On May 15, 2019, the Company’s shareholders approved the Stock Purchase Plan. Under the Stock Purchase Plan, 600,000 shares of Common Stock (subject to adjustment upon certain changes in the Company’s capitalization) are available for purchase by eligible employees who become participants in the Stock Purchase Plan. The purchase price per share is 85% of the lesser of (i) the fair market value per share of Common Stock on the first day of the offering period, or (ii) the fair market value per share of Common Stock on the last day of the offering period. The Company’s eligible full-time employees are able to contribute up to 15% of their base compensation into the employee stock purchase plan, subject to an annual limit of $25,000 per person. Employees are able to purchase Company common stock at a 15 six-month six-month During the three months ended March 31, 2021 and 2020, there were no shares issued under the Stock Purchase Plan. At March 31, 2021, there were 539,041 shares available for purchases under the Plan. |
Credit Facility
Credit Facility | 3 Months Ended |
Mar. 31, 2021 | |
Text Block [Abstract] | |
Credit Facility | 9. Credit Facility On July 13, 2017, the Company entered into a Credit Agreement (the “Credit Agreement”) with PNC Bank, as administrative agent, swing loan lender and issuing lender, PNC Capital Markets LLC, as sole lead arranger and sole book-runner, and certain financial institution parties thereto as lenders (the “Lenders”). The Credit Agreement, as amended, provides for a total aggregate commitment of $47.5 million, consisting of (i) a revolving credit facility (the “Revolver”) in an aggregate principal amount not to exceed $30 million (subject to increase by up to an additional $15 million upon satisfaction of certain conditions) and; (ii) a $17.5 million term loan facility (the “Term Loan), as more fully described in Exhibit 10.1 to the Company’s Form 8-Ks 8-K/A The Revolver expires in October 2023 and includes swing loan and letter of credit sub-limits Amounts borrowed under the Term Loan are required to be repaid in consecutive quarterly installments through and including the maturity date of October 1, 2023. The principal amount of each quarterly installment payable on the Term Loan equals $1.1 million through and including the maturity date, with the maturity date payment equal to the outstanding amount of the loan on that date. Borrowings under the revolver and the term loan, at the Company’s election, bear interest at either (a) the higher of PNC’s prime rate or the federal funds rate plus 0.50%, plus an applicable margin determined based upon the Company’s senior leverage ratio or (b) an adjusted London Interbank Offered Rate (“LIBOR”), with a floor of 0.50%, plus an applicable margin determined based upon the Company’s senior leverage ratio. The applicable margin on the base rate is between 0.50% and 1.25% on revolver borrowings and between 1.75% and 2.50% on term loans. The applicable margin on the adjusted LIBOR is between 1.50% and 2.25% on revolver borrowings and between 2.75% and 3.50% on term loans. A 20 to 30-basis The Company pledged substantially all of its assets in support of the Credit Agreement. The credit agreement contains standard financial covenants, including, but not limited to, covenants related to the Company’s senior leverage ratio and fixed charge ratio (as defined under the credit agreement) and limitations on liens, indebtedness, guarantees, contingent liabilities, loans and investments, distributions, leases, asset sales, stock repurchases and mergers and acquisitions. As of March 31, 2021, the Company was in compliance with all provisions under the facility. In connection with securing the commitments under the Credit Agreement and the April 20, 2018 and October 1, 2020 amendments to the Credit Agreement, the Company paid a commitment fee and incurred deferred financing costs totaling $752,000, which were capitalized and are being amortized as interest expense over the life of the facility. Deferred financing costs of $205,000 and $225,000 (net of amortization) as of March 31, 2021 and December 31, 2020, respectively, are presented as reductions in long-term debt in the Company’s Condensed Consolidated Balance Sheets. As of March 31, 2021 and December 31, 2020, the Company had no outstanding borrowings under the Revolver and unused borrowing capacity available was approximately $25.0 million and $22.0 million, respectively. The Company’s outstanding borrowings under the term loan were $16.4 million and $17.5 million at March 31, 2021 and December 31, 2020, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The components of income before income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three months ended March 31, 2021 and, 2020: Three Months Ended 2021 2020 (Amounts in thousands) Income before income taxes: Domestic $ 1,881 $ 2,325 Foreign (244 ) (75 ) Income before income taxes $ 1,637 $ 2,250 The Company has foreign subsidiaries which generate revenues from foreign clients. Additionally, the Company has foreign subsidiaries which provide services to its U.S. operations. Accordingly, the Company allocates a portion of its income to these subsidiaries based on a “transfer pricing” model and reports such income as foreign in the above table. The provision for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three months ended March 31, 2021 and 2020: Three Months Ended 2021 2020 (Amounts in thousands) Current provision: Federal $ 358 $ 328 State 93 100 Foreign 10 110 Total current provision 461 538 Deferred provision (benefit): Federal (6 ) (104 ) State (2 ) (30 ) Foreign (42 ) (82 ) Total deferred provision (benefit) (50 ) (216 ) Change in valuation allowance 32 59 Total provision for income taxes $ 443 $ 381 The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision for income taxes for the three months ended March 31, 2021 and 2020 were as follows (amounts in thousands): Three Months Ended Three Months Ended Income taxes computed at the federal statutory rate $ 344 21.0 % $ 473 21.0 % State income taxes, net of federal tax benefit 104 6.3 136 6.0 Excess tax benefits from stock options/restricted shares (67 ) (4.1 ) (343 ) (15.2 ) Difference in tax rate on foreign earnings/other 30 1.9 56 2.5 Change in valuation allowance 32 2.0 59 2.6 $ 443 27.1 % $ 381 16.9 % We evaluate deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. GAAP accounting guidance requires us to assess whether valuation allowances should be established against deferred tax assets based on all available evidence, both positive and negative using a “more likely than not” standard. Our assessment considers, among other things, the nature of cumulative losses; forecast of future profitability; the duration of statutory carry-forward periods and tax planning alternatives. At March 31, 2021, our valuation allowance was comprised of balances within locations of Singapore and the United Kingdom. The valuation allowance balances at these locations totaled $211,000 and $179,000 as of March 31, 2021 and December 31, 2020, respectively, and reflect net operating losses which may not be realizable in the future. The Company is currently in the initial stages of an audit by the IRS of our 2018 tax return. Additionally, we have been notified by Revenue Canada that they will be conducting an audit of our Canadian subsidiary for the years 2018 and 2019 in the coming months. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 11. Derivative Instruments and Hedging Activities Interest Rate Risk Management Concurrent with the Company’s July 13, 2017 borrowings under its new credit facility, the Company entered into a 44–month interest-rate swap to convert the debt’s variable interest rate to a fixed rate of interest. Under the swap contracts, which matured on April 1, 2021, the Company paid interest at a fixed rate of 1.99% and received interest at a variable rate equal to the daily U.S. LIBOR on an initial notional amount of $15.0 million. Notional amounts were $7.5 million and $8.1 million at March 31, 2021 and December 31, 2020, respectively. These swap contracts have been designated as cash flow hedging instruments and qualified as effective hedges at inception under ASC Topic 815, “Derivatives and Hedging”. These contracts are recognized on the balance sheet at fair value. The effective portion of the changes in fair value on these instruments is recorded in other comprehensive income (loss) and is reclassified into the Consolidated Statements of Operations as interest expense in the same period in which the underlying hedge transaction affects earnings. Changes in the fair value of interest-rate swap contracts deemed ineffective are recognized in the Consolidated Statements of Operations as interest expense. The fair value of the interest-rate swap contracts at March 31, 2021 and December 31, 2020 was $0 and a liability of $35,000, respectively, and is reflected in the Consolidated Balance Sheets as other current liabilities. The effect of derivative instruments on the Condensed Consolidated Statements of Operations and Comprehensive Income are as follows (in thousands): Derivatives in ASC Topic 815 Cash Flow Hedging Relationships Amount of Location of Amount of Location of Amount of (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion/Amounts excluded from effectiveness testing) For the Three Months Ended March 31, 2021: Interest-Rate Swap Contract $ 35 Interest Expense $ 34 Interest Expense $ — Derivatives in ASC Topic 815 Cash Flow Hedging Relationships Amount of Location of Amount of Location of Amount of (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion/Amounts excluded from effectiveness testing) For the Three Months Ended March 31, 2020: Interest-Rate Swap Contract $ (94 ) Interest Expense $ (8 ) Interest Expense $ — Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets (in thousands): March 31, 2021 December 31, 2020 Derivative Instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest-Rate Swap Contracts Other Current Liabilities $ — Other Current Liabilities $ 35 The estimated amount of pretax (loss) as of March 31, 2021 that is expected to be reclassified from other comprehensive income into earnings within the next 12 months is $0. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 12. Fair Value Measurements The Company has adopted the provisions of ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), related to certain financial and nonfinancial assets and liabilities. ASC 820 establishes the authoritative definition of fair value; sets out a framework for measuring fair value; and expands the required disclosures about fair value measurements. The valuation techniques required by ASC 820 are based on observable and unobservable inputs using the following three-tier hierarchy: • Level 1—Inputs are observable quoted prices (unadjusted) in active markets for identical assets and liabilities. • Level 2—Inputs are observable, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are directly or indirectly observable in the marketplace. • Level 3—Inputs are unobservable that are supported by little or no market activity. At March 31, 2021 and December 31, 2020, the Company carried the following financial assets (liabilities) at fair value measured on a recurring basis (in thousands): Fair Value as of March 31, 2021 (Amounts in thousands) Level 1 Level 2 Level 3 Total Interest-Rate Swap Contracts $ — $ — $ — $ — Contingent consideration liabilities $ — $ — $ (2,882 ) $ (2,882 ) Fair Value as of December 31, 2020 (Amounts in thousands) Level 1 Level 2 Level 3 Total Interest-Rate Swap Contracts $ — $ (35 ) $ — $ (35 ) Contingent consideration liabilities $ — $ — $ (2,882 ) $ (2,882 ) The fair value of interest-rate swap contracts are based on quoted prices for similar instruments from a commercial bank, and therefore, the fair value measurement is considered to be within Level 2. The fair value of the contingent consideration liability was estimated by utilizing a probability weighted simulation model to determine the fair value of contingent consideration, and therefore, the fair value measurement is considered to be within Level 3. In 2020, the Company incurred a $2.9 million contingent consideration liability related to the AmberLeaf acquisition. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Shareholders' Equity | 13. Shareholders’ Equity The Company purchases shares to satisfy employee tax obligations related to its Stock Incentive Plan. During the three months ended March 31, 2021 and 2020, no purchases were made to satisfy employee tax obligations related to the vesting of restricted stock. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 14. Earnings Per Share The computation of basic earnings per share is based on the Company’s net income divided by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options were exercised. The dilutive effect of stock options was calculated using the treasury stock method. For the three months ended March 31, 2021, there were 150,000 anti-dilutive stock options excluded from the computation of diluted earnings per share. For the three months ended March 31, 2020, there were 440,000 anti-dilutive stock options excluded from the computation of diluted earnings per share. |
Business Segments and Geographi
Business Segments and Geographic Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Business Segments and Geographic Information | 15. Business Segments and Geographic Information Our reporting segments are: 1) Data and Analytics Services; and 2) IT Staffing Services. The Data and Analytics Services segment was acquired through the July 13, 2017 acquisition of the services division of Canada-based InfoTrellis, Inc. This segment is a project-based consulting services business with specialized capabilities in data management and analytics. The business is marketed as Mastech InfoTrellis and utilizes a dedicated sales team with deep subject matter expertise. Mastech InfoTrellis has offices in Atlanta, Toronto, London, Dublin and Singapore, and a global delivery center in Chennai, India. Project-based delivery reflects a combination of on-site The IT Staffing Services segment offers staffing services in digital and mainstream technologies and uses digital methods to enhance organizational learning. These services are marketed using a common sales force and delivered via our domestic and global recruitment centers. While the vast majority of our assignments are based on time and materials, we do have the capabilities to deliver our digital transformation services on a fixed price basis. Three Months Ended 2021 2020 (Amounts in thousands) Revenues: Data and Analytics Services $ 8,794 $ 7,360 IT Staffing Services 40,981 43,065 Total revenues $ 49,775 $ 50,425 Gross Margin %: Data and Analytics Services 45.7 % 47.1 % IT Staffing Services 21.4 % 21.5 % Total gross margin % 25.7 % 25.2 % Segment operating income: Data and Analytics Services $ 394 $ 909 IT Staffing Services 2,268 2,240 Subtotal 2,662 3,149 Amortization of acquired intangible assets (793 ) (673 ) Interest expenses and other, net (232 ) (226 ) Income before income taxes $ 1,637 $ 2,250 Below is a reconciliation of segment total assets to consolidated total assets: March 31, December 31, (Amounts in thousands) Total assets: Data and Analytics Services $ 54,810 $ 55,792 IT Staffing Services 49,880 46,254 Total assets $ 104,690 $ 102,046 Below is geographic information related to our revenues from external customers: Three Months Ended 2021 2020 (Amounts in thousands) United States $ 47,942 $ 49,350 Canada 1,264 861 India and Other 569 214 Total revenues $ 49,775 $ 50,425 |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Standards | 16. Recently Issued Accounting Standards In December 2019, the FASB issued ASU 2019-12, In March 2020, the FASB issued ASU 2020-04, A variety of proposed or otherwise potential accounting standards are currently under consideration by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, management has not yet determined the effect, if any that the implementation of such proposed standards would have on the Company’s consolidated financial statements. |
Description of Business and B_2
Description of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation References in this Quarterly Report on Form 10-Q |
Description of Business | Description of Business We are a provider of Digital Transformation IT Services to mostly large and medium-sized Our portfolio of offerings includes data management and analytics services; digital learning services; and IT staffing services. Reflective of our 2017 acquisition of the services division of Canada-based InfoTrellis, Inc., we have added specialized capabilities in delivering data and analytics services to our customers globally. This business offers project-based consulting services in the areas of data management, data engineering and data science, with such services delivered using on-site Our IT staffing business combines technical expertise with business process experience to deliver a broad range of staffing services in digital and mainstream technologies. Our digital technologies include data management, analytics, cloud, mobility, social and artificial intelligence. We work with businesses and institutions with significant IT spending and recurring staffing service needs. We also support smaller organizations with their “project focused” temporary IT staffing requirements. The COVID-19 roll-out |
Accounting Principles | Accounting Principles The accompanying Financial Statements have been prepared by management in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting principally of normal recurring adjustments, considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and the accompanying notes. Actual results could differ from these estimates. These Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2020, included in our Annual Report on Form 10-K |
Principles of Consolidation | Principles of Consolidation The Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. |
Critical Accounting Policies | Critical Accounting Policies Please refer to Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K |
Segment Reporting | Segment Reporting The Company has two reportable segments, in accordance with Accounting Standards Committee (“ASC”) Topic 280 “Disclosures About Segments of an Enterprise and Related Information”: Data and Analytics Services and IT Staffing Services. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Summary of Disaggregation of Our Revenues by Contract Type and Operating Segment | The following table depicts the disaggregation of our revenues by contract type and operating segment: Three Months Ended March 31, 2021 2020 (Amounts in thousands) Data and Analytics Services Segment Time-and-material $ 5,854 $ 4,127 Fixed-price Contracts 2,940 3,233 Subtotal Data and Analytics Services $ 8,794 $ 7,360 IT Staffing Services Segment Time-and-material $ 40,981 $ 43,065 Fixed-price Contracts — — Subtotal IT Staffing Services $ 40,981 $ 43,065 Total Revenues $ 49,775 $ 50,425 |
Summary of Revenue from External Customers | The following table presents our revenue from external customers disaggregated by geography, based on the work location of our customers: Three Months Ended March 31, 2021 2020 (Amounts in thousands) United States $ 47,942 $ 49,350 Canada 1,264 861 India and other 569 214 Total $ 49,775 $ 50,425 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Summary of Fair Value of Consideration for Acquired Business | The following table summarizes the fair value of consideration for the acquired business on the October 1, 2020 closing date: (in thousands) Amounts Cash purchase price at closing $ 9,664 Working capital adjustments — Estimated payout of contingent consideration (1) 2,882 Total Fair Value of Consideration $ 12,546 (1) Based on a valuation conducted by an independent third party, the fair value of contingent consideration at the closing date was determined to be $2,882,000. |
Schedule of Sources of Funds in Business Acquisition | The cash purchase price at closing was paid with funds obtained from the following sources: (in thousands) Amounts Cash balances on hand $ — Increase in term loan debt facility 10,000 Revolving line of credit (336 ) Cash Paid at Closing $ 9,664 |
Schedule of Fair Value of Net Assets Acquired | The valuation of net assets acquired is as follows: (in thousands) Amounts Cash on hand $ 319 Working capital assets, net of liabilities 1,153 Identifiable intangible assets: Client relationships 2,970 Covenant not-to-compete 440 Trade name 490 Technology 770 Total identifiable intangible assets 4,670 Goodwill 6,404 Net Assets Acquired $ 12,546 |
Summary of Unaudited Pro Forma Results | The following reflects the Company’s unaudited pro forma results had the results of AmberLeaf been included for all periods presented: Three Months Ended March 31, 2021 Actual 2020 Pro Forma (Amounts in thousands, except per share data) Revenue $ 49,775 $ 53,634 Net income $ 1,194 $ 2,337 Earnings per share—diluted $ . 10 $ . 20 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of Identifiable Intangible assets | Identifiable intangible assets were comprised of the following as of March 31, 2021 and December 31, 2020: As of March 31, 2021 (Amounts in thousands) Amortization Gross Carrying Accumulative Net Carrying IT Staffing Services: Client relationships 12 $ 7,999 $ 3,861 $ 4,138 Covenant-not-to-compete 5 319 319 — Trade name 3 249 249 — Data and Analytics Services: Client relationships 12 19,641 5,274 14,367 Covenant-not-to-compete 5 1,201 608 593 Trade name 5 1,711 956 755 Technology 7 1,979 695 1,284 Total Intangible Assets $ 33,099 $ 11,962 $ 21,137 As of December 31, 2020 (Amounts in thousands) Amortization Gross Carrying Accumulative Net Carrying IT Staffing Services: Client relationships 12 $ 7,999 $ 3,694 $ 4,305 Covenant-not-to-compete 5 319 319 — Trade name 3 249 249 — Data and Analytics Services: Client relationships 12 19,641 4,866 14,775 Covenant-not-to-compete 5 1,201 548 653 Trade name 5 1,711 869 842 Technology 7 1,979 624 1,355 Total Intangible Assets $ 33,099 $ 11,169 $ 21,930 |
Schedule of Estimated Amortization Expense | The estimated aggregate amortization expense for intangible assets for the years ending December 31, 2021 through 2025 is as follows: Years Ended December 31, 2021 2022 2023 2024 2025 (Amounts in thousands) Amortization expense $ 3,168 $ 2,987 $ 2,772 $ 2,693 $ 2,553 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Summary of Balance Sheet classification of lease assets and related lease liabilities | The following table summarizes the balance sheet classification of the lease assets and related lease liabilities: March 31, 2021 December 31, 2020 ( in thousands) Assets: Long-term operating lease right-of-use $ 3,199 $ 3,286 Liabilities: Short-term operating lease liability $ 1,056 $ 1,079 Long-term operating lease liability 2,273 2,325 Total liabilities $ 3,329 $ 3,404 |
Schedule of Minimum Future Rental Payments | Future minimum rental payments for office facilities and equipment under the Company’s noncancelable operating leases are as follows: Amount as of (in thousands) 2021 (For remainder of year) $ 888 2022 1,187 2023 1,139 2024 339 2025 52 Thereafter 30 Total 3,635 Less: Imputed interest (306 ) Present value of operating lease liabilities $ 3,329 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Income Taxes | The components of income before income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three months ended March 31, 2021 and, 2020: Three Months Ended 2021 2020 (Amounts in thousands) Income before income taxes: Domestic $ 1,881 $ 2,325 Foreign (244 ) (75 ) Income before income taxes $ 1,637 $ 2,250 |
Provision for Income Taxes | The provision for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three months ended March 31, 2021 and 2020: Three Months Ended 2021 2020 (Amounts in thousands) Current provision: Federal $ 358 $ 328 State 93 100 Foreign 10 110 Total current provision 461 538 Deferred provision (benefit): Federal (6 ) (104 ) State (2 ) (30 ) Foreign (42 ) (82 ) Total deferred provision (benefit) (50 ) (216 ) Change in valuation allowance 32 59 Total provision for income taxes $ 443 $ 381 |
Reconciliation of Income Taxes | The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision for income taxes for the three months ended March 31, 2021 and 2020 were as follows (amounts in thousands): Three Months Ended Three Months Ended Income taxes computed at the federal statutory rate $ 344 21.0 % $ 473 21.0 % State income taxes, net of federal tax benefit 104 6.3 136 6.0 Excess tax benefits from stock options/restricted shares (67 ) (4.1 ) (343 ) (15.2 ) Difference in tax rate on foreign earnings/other 30 1.9 56 2.5 Change in valuation allowance 32 2.0 59 2.6 $ 443 27.1 % $ 381 16.9 % |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Effect of Derivative Instruments on Consolidated Statements of Operations and Comprehensive Income | The effect of derivative instruments on the Condensed Consolidated Statements of Operations and Comprehensive Income are as follows (in thousands): Derivatives in ASC Topic 815 Cash Flow Hedging Relationships Amount of Location of Amount of Location of Amount of (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion/Amounts excluded from effectiveness testing) For the Three Months Ended March 31, 2021: Interest-Rate Swap Contract $ 35 Interest Expense $ 34 Interest Expense $ — Derivatives in ASC Topic 815 Cash Flow Hedging Relationships Amount of Location of Amount of Location of Amount of (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion/Amounts excluded from effectiveness testing) For the Three Months Ended March 31, 2020: Interest-Rate Swap Contract $ (94 ) Interest Expense $ (8 ) Interest Expense $ — |
Information on Location and Amounts of Derivative Fair Values in Consolidated Balance Sheets | Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets (in thousands): March 31, 2021 December 31, 2020 Derivative Instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest-Rate Swap Contracts Other Current Liabilities $ — Other Current Liabilities $ 35 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and (Liabilities) at Fair Value Measured on Recurring Basis | At March 31, 2021 and December 31, 2020, the Company carried the following financial assets (liabilities) at fair value measured on a recurring basis (in thousands): Fair Value as of March 31, 2021 (Amounts in thousands) Level 1 Level 2 Level 3 Total Interest-Rate Swap Contracts $ — $ — $ — $ — Contingent consideration liabilities $ — $ — $ (2,882 ) $ (2,882 ) Fair Value as of December 31, 2020 (Amounts in thousands) Level 1 Level 2 Level 3 Total Interest-Rate Swap Contracts $ — $ (35 ) $ — $ (35 ) Contingent consideration liabilities $ — $ — $ (2,882 ) $ (2,882 ) |
Business Segments and Geograp_2
Business Segments and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Summary of Operating Segments | Three Months Ended 2021 2020 (Amounts in thousands) Revenues: Data and Analytics Services $ 8,794 $ 7,360 IT Staffing Services 40,981 43,065 Total revenues $ 49,775 $ 50,425 Gross Margin %: Data and Analytics Services 45.7 % 47.1 % IT Staffing Services 21.4 % 21.5 % Total gross margin % 25.7 % 25.2 % Segment operating income: Data and Analytics Services $ 394 $ 909 IT Staffing Services 2,268 2,240 Subtotal 2,662 3,149 Amortization of acquired intangible assets (793 ) (673 ) Interest expenses and other, net (232 ) (226 ) Income before income taxes $ 1,637 $ 2,250 |
Summary of Assets, Depreciation and Amortization and Capital Expenditures by Segment | Below is a reconciliation of segment total assets to consolidated total assets: March 31, December 31, (Amounts in thousands) Total assets: Data and Analytics Services $ 54,810 $ 55,792 IT Staffing Services 49,880 46,254 Total assets $ 104,690 $ 102,046 |
Summary of Revenue from External Customers and Long-lived Assets | Below is geographic information related to our revenues from external customers: Three Months Ended 2021 2020 (Amounts in thousands) United States $ 47,942 $ 49,350 Canada 1,264 861 India and Other 569 214 Total revenues $ 49,775 $ 50,425 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Detail) - Agreement | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Percentage of billing expense revenues | 2.00% | |
Sales Revenue Net [Member] | Revenue from Rights Concentration Risk [Member] | CGI [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of total revenues | 15.00% | 12.70% |
Number of customers | 1 | 1 |
Top Ten Customers [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue percentage of total revenue | 47.00% | 46.00% |
Data and Analytics Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percent of revenue from services | 100.00% |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Summary of Disaggregation of Our Revenues by Contract Type and Operating Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | $ 49,775 | $ 50,425 |
Data and Analytics Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 8,794 | 7,360 |
Data and Analytics Services [Member] | Time-and-Material Contract [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 5,854 | 4,127 |
Data and Analytics Services [Member] | Fixed-Price Contract [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 2,940 | 3,233 |
IT Staffing Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | 40,981 | 43,065 |
IT Staffing Services [Member] | Time-and-Material Contract [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues by contract type and operating segment | $ 40,981 | $ 43,065 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Summary of Revenue from External Customers (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue from External Customer [Line Items] | ||
Total | $ 49,775 | $ 50,425 |
United States [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | 47,942 | 49,350 |
Canada [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | 1,264 | 861 |
India and Other [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | $ 569 | $ 214 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - USD ($) | Oct. 01, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Increase in Credit Facility | $ 15,000,000 | |||
Revenues | $ 49,775,000 | $ 50,425,000 | ||
Net income (loss) | 1,194,000 | $ 1,869,000 | ||
Revolving Line of Credit [Member] | ||||
Business Acquisition [Line Items] | ||||
Credit agreement provides for total aggregate commitment | 30,000,000 | |||
Term Loan Facility [Member] | ||||
Business Acquisition [Line Items] | ||||
Credit agreement provides for total aggregate commitment | 17,500,000 | |||
Maximum [Member] | Revolving Line of Credit [Member] | ||||
Business Acquisition [Line Items] | ||||
Increase in Credit Facility | 7,500,000 | |||
Maximum [Member] | Term Loan Facility [Member] | ||||
Business Acquisition [Line Items] | ||||
Increase in Credit Facility | $ 10,000,000 | |||
Amber Leaf Partners Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, description | On October 1, 2020, Mastech Digital, Inc., through its wholly-owned subsidiary Mastech Digital Data, Inc., acquired all of the outstanding shares of AmberLeaf Partners, Inc. (“AmberLeaf”). Under the terms of the Share Purchase Agreement executed in connection with the AmberLeaf acquisition (the “Purchase Agreement”) | |||
Cash consideration | $ 9,664,000 | |||
Contingent consideration in deferred cash payments | $ 4,500,000 | |||
Transaction costs related to acquisition | $ 650,000 | |||
Write off of Deferred Finance Costs | $ 185,000 | |||
Revenues | 1,900,000 | |||
Net income (loss) | $ (100,000) |
Business Combinations - Summary
Business Combinations - Summary of Fair Value of Consideration for Acquired Business (Detail) - Amber Leaf Partners Inc [Member] $ in Thousands | Oct. 01, 2020USD ($) |
Business Acquisition [Line Items] | |
Cash purchase price at closing | $ 9,664 |
Working capital adjustments | |
Estimated payout of contingent consideration | 2,882 |
Total Fair Value of Consideration | $ 12,546 |
Business Combinations - Summa_2
Business Combinations - Summary of Fair Value of Consideration for Acquired Business (Parenthetical) (Detail) $ in Thousands | Oct. 01, 2020USD ($) |
Amber Leaf Partners Inc [Member] | |
Business Acquisition [Line Items] | |
Fair value of contingent consideration | $ 2,882 |
Business Combinations - Summa_3
Business Combinations - Summary of Source of Funds (Detail) $ in Thousands | Oct. 01, 2020USD ($) |
Business Acquisition [Line Items] | |
Increase in term loan debt facility | $ 15,000 |
Amber Leaf Partners Inc [Member] | |
Business Acquisition [Line Items] | |
Cash paid at Closing | 9,664 |
Amber Leaf Partners Inc [Member] | Term Loan Debt Facility [Member] | |
Business Acquisition [Line Items] | |
Increase in term loan debt facility | 10,000 |
Amber Leaf Partners Inc [Member] | Revolving Line of Credit [Member] | |
Business Acquisition [Line Items] | |
Revolving line of credit | $ (336) |
Business Combinations - Schedul
Business Combinations - Schedule of Valuation of Net Assets Acquired (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Oct. 01, 2020 |
Identifiable intangible assets: | |||
Goodwill | $ 32,510 | $ 32,510 | |
Amber Leaf Partners Inc [Member] | |||
Business Acquisition [Line Items] | |||
Cash on hand | $ 319 | ||
Working capital assets, net of liabilities | 1,153 | ||
Identifiable intangible assets: | |||
Identifiable intangible assets | 4,670 | ||
Goodwill | 6,404 | ||
Net Assets Acquired | 12,546 | ||
Amber Leaf Partners Inc [Member] | Client Relationships [Member] | |||
Identifiable intangible assets: | |||
Identifiable intangible assets | 2,970 | ||
Amber Leaf Partners Inc [Member] | Covenant Not-to-Compete [Member] | |||
Identifiable intangible assets: | |||
Identifiable intangible assets | 440 | ||
Amber Leaf Partners Inc [Member] | Trade Name [Member] | |||
Identifiable intangible assets: | |||
Identifiable intangible assets | 490 | ||
Amber Leaf Partners Inc [Member] | Technology [Member] | |||
Identifiable intangible assets: | |||
Identifiable intangible assets | $ 770 |
Business Combinations - Summa_4
Business Combinations - Summary of Unaudited Pro Forma Results (Detail) - Amber Leaf Partners Inc [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Business Acquisition [Line Items] | ||
Revenue | $ 49,775 | $ 53,634 |
Net income | $ 1,194 | $ 2,337 |
Earnings per share-diluted | $ 0.10 | $ 0.20 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, net - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |||||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Oct. 01, 2020 | Jul. 13, 2017 | Jun. 15, 2015 | |
Goodwill and Intangible Assets [Line Items] | ||||||
Goodwill | $ 32,510 | $ 32,510 | ||||
Amortization expense | $ 793 | $ 673 | ||||
Hudson IT [Member] | ||||||
Goodwill and Intangible Assets [Line Items] | ||||||
Goodwill | $ 8,400 | |||||
Info Trellis Inc [Member] | ||||||
Goodwill and Intangible Assets [Line Items] | ||||||
Goodwill | $ 27,400 | |||||
Amber Leaf Partners Inc [Member] | ||||||
Goodwill and Intangible Assets [Line Items] | ||||||
Goodwill | $ 6,404 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Components of Identifiable Intangible assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets, Accumulated Amortization | $ 11,962 | $ 11,169 |
Total Intangible Assets, Gross Carrying Value | 33,099 | 33,099 |
Total Intangible Assets, Net Carrying Value | $ 21,137 | $ 21,930 |
Client Relationships [Member] | IT Staffing Services [Member] | ||
Amortization Period (In Years) | 12 years | 12 years |
Intangible Assets, Gross Carrying Value | $ 7,999 | $ 7,999 |
Intangible Assets, Accumulated Amortization | 3,861 | 3,694 |
Intangible Assets, Net Carrying Value | $ 4,138 | $ 4,305 |
Client Relationships [Member] | Data and Analytics Services [Member] | ||
Amortization Period (In Years) | 12 years | 12 years |
Intangible Assets, Gross Carrying Value | $ 19,641 | $ 19,641 |
Intangible Assets, Accumulated Amortization | 5,274 | 4,866 |
Intangible Assets, Net Carrying Value | $ 14,367 | $ 14,775 |
Covenant Not-to-Compete [Member] | IT Staffing Services [Member] | ||
Amortization Period (In Years) | 5 years | 5 years |
Intangible Assets, Gross Carrying Value | $ 319 | $ 319 |
Intangible Assets, Accumulated Amortization | $ 319 | $ 319 |
Covenant Not-to-Compete [Member] | Data and Analytics Services [Member] | ||
Amortization Period (In Years) | 5 years | 5 years |
Intangible Assets, Gross Carrying Value | $ 1,201 | $ 1,201 |
Intangible Assets, Accumulated Amortization | 608 | 548 |
Intangible Assets, Net Carrying Value | $ 593 | $ 653 |
Trade Name [Member] | IT Staffing Services [Member] | ||
Amortization Period (In Years) | 3 years | 3 years |
Intangible Assets, Gross Carrying Value | $ 249 | $ 249 |
Intangible Assets, Accumulated Amortization | $ 249 | $ 249 |
Trade Name [Member] | Data and Analytics Services [Member] | ||
Amortization Period (In Years) | 5 years | 5 years |
Intangible Assets, Gross Carrying Value | $ 1,711 | $ 1,711 |
Intangible Assets, Accumulated Amortization | 956 | 869 |
Intangible Assets, Net Carrying Value | $ 755 | $ 842 |
Technology [Member] | Data and Analytics Services [Member] | ||
Amortization Period (In Years) | 7 years | 7 years |
Intangible Assets, Gross Carrying Value | $ 1,979 | $ 1,979 |
Intangible Assets, Accumulated Amortization | 695 | 624 |
Intangible Assets, Net Carrying Value | $ 1,284 | $ 1,355 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, net - Schedule of Estimated Amortization Expense (Detail) $ in Thousands | Dec. 31, 2021USD ($) |
Intangible Liability Disclosure [Abstract] | |
Estimated aggregate amortization expense for year ending 2021 | $ 3,168 |
Estimated aggregate amortization expense for year ending 2022 | 2,987 |
Estimated aggregate amortization expense for year ending 2023 | 2,772 |
Estimated aggregate amortization expense for year ending 2024 | 2,693 |
Estimated aggregate amortization expense for year ending 2025 | $ 2,553 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021USD ($)ft² | Mar. 31, 2020USD ($) | Apr. 01, 2021ft² | |
Square feet of office space | ft² | 82,000 | 35,356 | |
Average initial lease term | 4 years | ||
Discount rate | 5.20% | ||
Operating leases, rent expense, net | $ 0.4 | $ 0.4 | |
Total lease payments | 0.4 | 0.4 | |
Lease obligation incurred | 0.3 | $ 0.2 | |
INDIA | |||
Total lease payments | $ 1.4 | ||
Replacement of existing Square feet of Office lease | ft² | 19,120 | ||
Leases renewal term | 3 years | ||
Percertage of increase in lease rent | 15.00% | ||
Minimum [Member] | |||
Lease term range | 1 year | ||
Maximum [Member] | |||
Lease term range | 5 years 3 months 18 days | ||
Weighted Average [Member] | |||
Lease term range | 2 years 1 month 6 days |
Leases - Summary of Balance She
Leases - Summary of Balance Sheet classification of lease asset and related lease liability (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Long-term operating lease right-of-use assets | $ 3,199 | $ 3,286 |
Liabilities: | ||
Short-term operating lease liability | 1,056 | 1,079 |
Long-term operating lease liability | 2,273 | 2,325 |
Total Liabilities | $ 3,329 | $ 3,404 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
2021 (For remainder of year) | $ 888 | |
2022 | 1,187 | |
2023 | 1,139 | |
2024 | 339 | |
2025 | 52 | |
Thereafter | 30 | |
Total | 3,635 | |
Less: Imputed interest | (306) | |
Present value of operating lease liabilities | $ 3,329 | $ 3,404 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Matching contributions | $ 0 | $ 0 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | May 15, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares allocated for issuance to directors, officers and key personnel | 4,900,000 | |||
Number of Options, Granted | 270,000 | 800,000 | ||
Stock-based compensation expense | $ 621,000 | $ 456,000 | ||
Strike price | $ / shares | $ 17.65 | $ 15.49 | ||
Restricted shares granted | 11,955 | 11,475 | ||
Fair value estimation | The fair value of the six-month “look-back” option in the Company’s employee stock purchase plans is estimated by adding the fair value of 15% of one share of stock to 85% of the fair value of an option on one share of stock. | |||
Stock Options And Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 29,739 | 141,066 | ||
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for future grants | 539,041 | 600,000 | ||
Percentage of maximum contribution of salary towards plan | 15.00% | |||
Maximum contribution towards plan | $ 25,000 | |||
Discount on purchase of common stock | 15.00% | |||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 0 | 0 | ||
Stock Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for future grants | 339,000 |
Credit Facility - Additional in
Credit Facility - Additional information (Detail) - USD ($) | Apr. 20, 2018 | Jul. 13, 2017 | Mar. 31, 2021 | Dec. 31, 2020 | Oct. 01, 2020 |
Line of Credit Facility [Line Items] | |||||
Current borrowing capacity under line of credit facility | $ 25,000,000 | $ 22,000,000 | |||
Deferred financing costs | 205,000 | 225,000 | |||
Term Loan Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 17,500,000 | ||||
Outstanding borrowings amount | $ 16,400,000 | $ 17,500,000 | |||
Revolving Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 30,000,000 | ||||
Percentage of eligible accounts receivable | 85.00% | ||||
Revolving Line of Credit [Member] | United States [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Percentage of eligible unbilled accounts | 60.00% | ||||
Revolving Line of Credit [Member] | Canada [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 10,000,000 | ||||
Percentage of eligible accounts receivable | 85.00% | ||||
Percentage of eligible unbilled accounts | 60.00% | ||||
Revolving Line of Credit [Member] | Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 5,000,000 | ||||
Revolving Line of Credit [Member] | Swing Loans [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 6,000,000 | ||||
Federal Funds Rate [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
LIBOR Floor Rate [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt Instrument Percentage Adjusted LIBOR Floor Rate | 0.50% | ||||
PNC Bank, N.A. [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 47,500,000 | ||||
Payment of deferred financing costs | $ 752,000 | ||||
PNC Bank, N.A. [Member] | Term Loan Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility maximum borrowing capacity | 17,500,000 | ||||
Credit facility, periodic payment | 1,100,000 | ||||
PNC Bank, N.A. [Member] | Revolving Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility maximum borrowing capacity | 30,000,000 | ||||
Maximum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Revolving credit facility percentage margin over base rate | 1.25% | ||||
Term loan percentage margin over base rate | 2.50% | ||||
Revolving credit facility percentage margin adjusted LIBOR rate | 2.25% | ||||
Term loan percentage margin adjusted LIBOR rate | 3.50% | ||||
Maximum [Member] | PNC Bank, N.A. [Member] | Revolving Line of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility additional borrowing capacity upon certain conditions | $ 15,000,000 | ||||
Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Revolving credit facility percentage margin over base rate | 0.50% | ||||
Term loan percentage margin over base rate | 1.75% | ||||
Revolving credit facility percentage margin adjusted LIBOR rate | 1.50% | ||||
Term loan percentage margin adjusted LIBOR rate | 2.75% |
Income Taxes - Components of In
Income Taxes - Components of Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income before income taxes: | ||
Domestic | $ 1,881 | $ 2,325 |
Foreign | (244) | (75) |
Income before income taxes | $ 1,637 | $ 2,250 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Current provision: | ||
Federal | $ 358 | $ 328 |
State | 93 | 100 |
Foreign | 10 | 110 |
Total current provision | 461 | 538 |
Deferred provision (benefit): | ||
Federal | (6) | (104) |
State | (2) | (30) |
Foreign | (42) | (82) |
Total deferred provision (benefit) | (50) | (216) |
Change in valuation allowance | 32 | 59 |
Total provision for income taxes | $ 443 | $ 381 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income taxes computed at the federal statutory rate, Value | $ 344 | $ 473 |
State income taxes, net of federal tax benefit, Value | 104 | 136 |
Excess tax benefits from stock options/restricted shares | (67) | (343) |
Difference in tax rate on foreign earnings/other | 30 | 56 |
Change in valuation allowance | 32 | 59 |
Total provision for income taxes | $ 443 | $ 381 |
Income taxes computed at the federal statutory rate | 21.00% | 21.00% |
State income taxes, net of federal tax benefit | 6.30% | 6.00% |
Excess tax benefit from stock options/restricted shares | (4.10%) | (15.20%) |
Difference in income tax rate on foreign earnings/other | 1.90% | 2.50% |
Change in valuation allowance[Percent] | 2.00% | 2.60% |
Effective for income tax rate, Total | 27.10% | 16.90% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Liabilities Valuation Allowance | $ 211 | $ 179 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Jul. 13, 2017 | |
Interest Rate Swap Contracts [Member] | |||
Derivative [Line Items] | |||
Liability of fair value of the interest rate swap contracts | $ 35,000 | ||
Interest Rate Swap Contracts [Member] | Other Current Liabilities [Member] | |||
Derivative [Line Items] | |||
Liability of fair value of the interest rate swap contracts | $ 0 | 35,000 | |
Interest Rate Risk Management [Member] | |||
Derivative [Line Items] | |||
Notional amount | 7,500,000 | 8,100,000 | |
Interest Rate Risk Management [Member] | Interest Rate Swap Contracts [Member] | |||
Derivative [Line Items] | |||
Notional amount | $ 15,000,000 | ||
Fixed rate of interest in swap contracts | 1.99% | ||
Interest Rate Risk Management [Member] | Interest Rate Swap Contracts [Member] | Other Current Liabilities [Member] | |||
Derivative [Line Items] | |||
Liability of fair value of the interest rate swap contracts | 0 | $ 35,000 | |
Designated as Hedging Instrument [Member] | Currency Hedge and Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Estimated amount of pretax losses from other comprehensive income (loss) during the next 12-months | $ 0 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Effect of Derivative Instruments on Consolidated Statements of Operations and Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) recognized in OCI on Derivatives | $ 35 | $ (94) |
Interest rate swap contracts [Member] | Cash Flow Hedging Relationships [Member] | Interest Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) recognized in OCI on Derivatives | 35 | (94) |
Amount of Gain / (Loss) reclassified from Accumulated OCI to Income | 34 | (8) |
Amount of Gain / (Loss) recognized in Income on Derivatives | $ 0 | $ 0 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Information on Location and Amounts of Derivative Fair Values in Consolidated Balance Sheets (Detail) - Interest Rate Swap Contracts [Member] - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Derivative Fair Value Liability | $ 35 | |
Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Fair Value Liability | $ 0 | $ 35 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) $ in Millions | Dec. 31, 2020USD ($) |
AmberLeaf [Member] | |
Fair Value Disclosures [Line Items] | |
Fair value of contingent consideration | $ 2.9 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets (Liabilities) at Fair Value Measured on Recurring Basis (Detail) - Interest Rate Swap Contracts [Member] - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial liability | $ (35) | |
Contingent consideration liabilities | $ (2,882) | (2,882) |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial liability | (35) | |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liabilities | $ (2,882) | $ (2,882) |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Equity, Class of Treasury Stock [Line Items] | ||
Shares purchased to satisfy employee tax obligation | 0 | 0 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive securities not included in computation of earnings per share | 150,000 | 440,000 |
Business Segments and Geograp_3
Business Segments and Geographic Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2021Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 2 |
Data and Analytics Services [Member] | |
Segment Reporting Information [Line Items] | |
Business acquisition date | Jul. 13, 2017 |
Business Segments and Geograp_4
Business Segments and Geographic Information - Summary of Operating Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 49,775 | $ 50,425 |
Total gross margin % | 25.70% | 25.20% |
Segment operating income | $ 1,869 | $ 2,476 |
Amortization of acquired intangible assets | (793) | (673) |
Interest expenses and other, net | (232) | (226) |
Income before income taxes | 1,637 | 2,250 |
Data and analytics services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 8,794 | $ 7,360 |
Total gross margin % | 45.70% | 47.10% |
IT staffing services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 40,981 | $ 43,065 |
Total gross margin % | 21.40% | 21.50% |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment operating income | $ 2,662 | $ 3,149 |
Operating Segments [Member] | Data and analytics services [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment operating income | 394 | 909 |
Operating Segments [Member] | IT staffing services [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment operating income | $ 2,268 | $ 2,240 |
Business Segments and Geograp_5
Business Segments and Geographic Information - Summary of Assets by Segment (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 104,690 | $ 102,046 |
Data and analytics services [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 54,810 | 55,792 |
IT Staffing Services [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 49,880 | $ 46,254 |
Business Segments and Geograp_6
Business Segments and Geographic Information - Summary of Revenue from External Customers (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 49,775 | $ 50,425 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 47,942 | 49,350 |
Canada [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,264 | 861 |
India and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 569 | $ 214 |