Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | MEDP | ||
Entity Registrant Name | Medpace Holdings, Inc. | ||
Entity Central Index Key | 0001668397 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Interactive Data Current | Yes | ||
Entity File Number | 001-37856 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 32-0434904 | ||
Entity Address, Address Line One | 5375 Medpace Way | ||
Entity Address, City or Town | Cincinnati | ||
Entity Address, State or Province | OH | ||
Entity Address, Postal Zip Code | 45227 | ||
City Area Code | 513 | ||
Local Phone Number | 579-9911 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Title of 12(b) Security | Common Stock $0.01 par value | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 36,092,497 | ||
Entity Public Float | $ 1.8 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 131,920 | $ 23,275 |
Restricted cash | 0 | 7 |
Accounts receivable and unbilled, net (includes $1.9 million and $3.8 million with related parties at December 31, 2019 and 2018, respectively) | 155,662 | 133,449 |
Prepaid expenses and other current assets | 29,446 | 21,383 |
Total current assets | 317,028 | 178,114 |
Property and equipment, net | 47,292 | 52,255 |
Operating lease right-of-use assets | 52,152 | 0 |
Goodwill | 662,396 | 660,981 |
Intangible assets, net | 54,350 | 69,179 |
Deferred income taxes | 376 | 713 |
Other assets | 9,477 | 6,691 |
Total assets | 1,143,071 | 967,933 |
Current liabilities: | ||
Accounts payable (includes $0.2 million and $0.3 million with related parties at December 31, 2019 and 2018, respectively) | 22,404 | 16,737 |
Accrued expenses | 109,252 | 87,493 |
Advanced billings (includes $3.0 million and $0.4 million with related parties at December 31, 2019 and 2018, respectively) | 192,359 | 147,935 |
Other current liabilities | 18,987 | 4,861 |
Total current liabilities | 343,002 | 257,026 |
Long-term debt, net, less current portion | 0 | 79,721 |
Operating lease liabilities | 45,212 | 0 |
Deemed landlord liability, less current portion | 0 | 24,484 |
Deferred income tax liability | 12,849 | 439 |
Other long-term liabilities | 15,725 | 16,560 |
Total liabilities | 416,788 | 378,230 |
Commitments and contingencies (see Note 12) | ||
Shareholders’ equity: | ||
Preferred stock - $0.01 par-value; 5,000,000 shares authorized; no shares issued and outstanding at December 31, 2019 and 2018, respectively | 0 | 0 |
Common stock - $0.01 par-value; 250,000,000 shares authorized at December 31, 2019 and 2018, respectively; 36,065,278 and 35,665,910 shares issued and outstanding at December 31, 2019 and 2018, respectively | 360 | 356 |
Treasury stock - 200,000 shares at December 31, 2019 and 2018, respectively | (6,030) | (6,030) |
Additional paid-in capital | 666,585 | 639,381 |
Retained earnings (accumulated deficit) | 68,109 | (41,487) |
Accumulated other comprehensive loss | (2,741) | (2,517) |
Total shareholders’ equity | 726,283 | 589,703 |
Total liabilities and shareholders’ equity | $ 1,143,071 | $ 967,933 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, unbilled services with related parties | $ 1.9 | $ 3.8 |
Accounts payable includes related parties | 0.2 | 0.3 |
Advanced billings with related parties | $ 3 | $ 0.4 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 |
Preferred stock shares issued | 0 | 0 |
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 | 36,065,278 | 35,665,910 |
Common stock shares outstanding | 36,065,278 | 35,665,910 |
Treasury stock shares | 200,000 | 200,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | |||
Total revenue | $ 860,969 | $ 704,589 | $ 436,152 |
Operating expenses: | |||
Direct service costs, excluding depreciation and amortization | 321,006 | 252,284 | 211,773 |
Reimbursed out-of-pocket expenses | 294,266 | 236,775 | 49,690 |
Total direct costs | 615,272 | 489,059 | 261,463 |
Selling, general and administrative | 95,245 | 75,681 | 63,357 |
Depreciation | 8,360 | 9,240 | 8,574 |
Amortization | 14,829 | 29,561 | 37,900 |
Total operating expenses | 733,706 | 603,541 | 371,294 |
Income from operations | 127,263 | 101,048 | 64,858 |
Other expense, net: | |||
Miscellaneous (expense) income, net | (863) | 1,060 | (354) |
Interest expense, net | (1,568) | (8,157) | (7,559) |
Total other expense, net | (2,431) | (7,097) | (7,913) |
Income before income taxes | 124,832 | 93,951 | 56,945 |
Income tax provision | 24,389 | 20,766 | 17,823 |
Net income | $ 100,443 | $ 73,185 | $ 39,122 |
Net income per share attributable to common shareholders: | |||
Basic | $ 2.79 | $ 2.05 | $ 1 |
Diluted | $ 2.67 | $ 1.97 | $ 0.98 |
Weighted average common shares outstanding: | |||
Basic | 35,881 | 35,547 | 39,056 |
Diluted | 37,576 | 36,912 | 39,839 |
Revenue Net | |||
Revenue: | |||
Total revenue | $ 860,969 | $ 704,589 | $ 0 |
Direct Service Revenue | |||
Revenue: | |||
Total revenue | 0 | 0 | 386,462 |
Reimbursed Out of Pocket Revenue | |||
Revenue: | |||
Total revenue | $ 0 | $ 0 | $ 49,690 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Direct Service Revenue | |
Revenue with related parties | $ 11.1 |
Reimbursed Out of Pocket Revenue | |
Revenue with related parties | $ 1.5 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income | $ 100,443 | $ 73,185 | $ 39,122 |
Other comprehensive (loss) income | |||
Foreign currency translation adjustments, net of taxes | (224) | (1,783) | 3,008 |
Comprehensive income | $ 100,219 | $ 71,402 | $ 42,130 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Impact to Retained Earnings from adoption | ASU 2016-09 | $ 440 | $ (440) | ||||
Balance | $ 610,710 | $ 407 | 624,069 | (10,024) | $ (3,742) | |
Balance at Dec. 31, 2016 | 610,710 | 407 | 623,629 | (9,584) | (3,742) | |
Net income | 39,122 | 39,122 | ||||
Foreign currency translation | 3,008 | 3,008 | ||||
Stock-based compensation expense | 4,463 | 4,463 | ||||
Stock options exercised | 1,812 | 1 | 1,811 | |||
Repurchases of common stock | (149,551) | (51) | (149,500) | |||
Treasury stock purchases | (6,032) | (2) | $ (6,030) | |||
Tax effect of initial public offering related costs | (2) | (2) | ||||
Balance at Dec. 31, 2017 | 503,530 | 355 | (6,030) | 630,341 | (120,402) | (734) |
Impact to Retained Earnings from adoption | ASU 2014-09 | 5,730 | 5,730 | ||||
Balance | 509,260 | 355 | (6,030) | 630,341 | (114,672) | (734) |
Net income | 73,185 | 73,185 | ||||
Foreign currency translation | (1,783) | (1,783) | ||||
Stock-based compensation expense | 6,499 | 6,499 | ||||
Stock options exercised | 2,542 | 1 | 2,541 | |||
Balance at Dec. 31, 2018 | 589,703 | 356 | (6,030) | 639,381 | (41,487) | (2,517) |
Impact to Retained Earnings from adoption | ASU 2016-02 | 9,153 | 9,153 | ||||
Balance | 598,856 | 356 | (6,030) | 639,381 | (32,334) | (2,517) |
Net income | 100,443 | 100,443 | ||||
Foreign currency translation | (224) | (224) | ||||
Stock-based compensation expense | 20,741 | 20,741 | ||||
Stock options exercised | 6,467 | 4 | 6,463 | |||
Balance at Dec. 31, 2019 | $ 726,283 | $ 360 | $ (6,030) | $ 666,585 | $ 68,109 | $ (2,741) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 100,443 | $ 73,185 | $ 39,122 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 8,360 | 9,240 | 8,574 |
Amortization | 14,829 | 29,561 | 37,900 |
Stock-based compensation expense | 20,741 | 6,499 | 4,463 |
Amortization of debt issuance costs and discount | 954 | 615 | 662 |
Noncash lease expense | 9,949 | 0 | 0 |
Deferred income tax provision | 10,050 | 3,942 | 3,237 |
Amortization and adjustment of deferred credit | (801) | (7,712) | (8,781) |
Other | 1,754 | 1,653 | (673) |
Changes in assets and liabilities: | |||
Accounts receivable and unbilled, net | (21,256) | (27,047) | (2,898) |
Prepaid expenses and other current assets | (7,381) | (1,241) | (3,533) |
Accounts payable | 4,730 | 1,342 | 4,816 |
Accrued expenses | 21,824 | 29,029 | (1,313) |
Pre-funded study costs | 0 | 0 | 5,292 |
Advanced billings | 44,584 | 35,593 | 7,735 |
Lease liabilities | (9,034) | 0 | 0 |
Other assets and liabilities, net | 2,121 | 1,925 | 2,782 |
Net cash provided by operating activities | 201,867 | 156,584 | 97,385 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Property and equipment expenditures | (17,912) | (16,024) | (11,724) |
Acquisition of intangibles | 0 | 0 | (569) |
Other | (1,232) | (949) | 56 |
Net cash used in investing activities | (19,144) | (16,973) | (12,237) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from stock option exercises | 6,520 | 2,489 | 1,812 |
Repurchases of common stock | 0 | 0 | (155,583) |
Payment of debt | (80,438) | (72,188) | (12,375) |
Proceeds from revolving loan | 0 | 0 | 100,000 |
Payments on revolving loan | 0 | (70,000) | (30,000) |
Payment of deemed landlord liability | 0 | (1,881) | (1,682) |
Net cash used in financing activities | (73,918) | (141,580) | (97,828) |
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (167) | (1,241) | 1,765 |
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 108,638 | (3,210) | (10,915) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period | 23,282 | 26,492 | 37,407 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period | 131,920 | 23,282 | 26,492 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION— | |||
Cash paid during the period for income taxes | 13,235 | 23,311 | 17,180 |
Cash paid during the period for interest | 1,489 | 7,589 | 6,888 |
Acquisition of property and equipment—non-cash | $ 2,529 | $ 1,551 | $ 678 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESENTATION Description of Business Medpace Holdings, Inc. together with its subsidiaries, (“Medpace” or the “Company”), a Delaware corporation, is a global provider of clinical research-based drug and medical device development services. The Company partners with pharmaceutical, biotechnology, and medical device companies in the development and execution of clinical trials. The Company’s drug development services focus on full service Phase I-IV clinical development services and include development plan design, coordinated central laboratory, project management, regulatory affairs, clinical monitoring, data management and analysis, pharmacovigilance new drug application submissions, and post-marketing clinical support. The Company also provides bio-analytical laboratory services, clinical human pharmacology, imaging services, and electrocardiography reading support for clinical trials. The Company’s operations are principally based in North America, Europe, and Asia. Share Repurchases In November 2017, approved an agreement to repurchase 2,000,000 shares of the Company’s common stock from Cinven in connection with the Secondary Offering (as described below) for aggregate consideration of approximately $60.3 million, representing a purchase price of $30.16 per share. In August 2017, the Disinterested Directors of the Company approved a stock repurchase agreement with Medpace Limited Partnership, a Guernsey limited partnership (the “Limited Partnership” acting through its general partner, Medpace GP Limited, a Guernsey company, the “General Partner” and, the Limited Partnership acting through the General Partner, “Cinven”), pursuant to which the Company repurchased 2,000,000 shares of the Company’s common stock from Cinven for aggregate consideration of approximately $60.5 million, representing a purchase price of $30.27 per share. The Company funded the repurchase with cash on hand and $40.0 million in borrowings under our Prior Senior Secured Revolving Credit Facility. In April 2017, the Board of the Company authorized a share repurchase program with an authorized repurchase level of $50.0 million. The share repurchase program was cancelled in the fourth quarter of 2017. Repurchases under the repurchase program took place in the open market or negotiated transactions, at the discretion of the Company’s management. During the year ended December 31, 2017, the Company repurchased 1,342,786 shares of its outstanding common stock for $34.7 million under this share repurchase program. The Company has elected to constructively retire all repurchased shares with all amounts paid in excess of Common stock par value reflected within Accumulated deficit in the Company’s consolidated balance sheets, except for 200,000 shares, which are reflected within treasury stock in the Company’s consolidated balance sheets. In the first quarter of 2018, the Board of the Company authorized a share repurchase program with an authorized repurchase level of $50.0 million. There have been no share repurchases under this program. Secondary Offerings During the year ended December 31, 2018, Cinven sold a total of 16,399,997 shares of the Company’s common stock as part of multiple secondary offerings. The Company incurred professional fees in connection with the secondary offerings of $0.7 million during the year ended December 31, 2018. The fees are included within operating expenses in the accompanying consolidated statement of operations. As of August 27, 2018, Cinven does not beneficially own any shares of the Company’s outstanding common stock. The Company did not sell any shares in or receive any proceeds from the secondary offerings. During the year ended December 31, 2017, Cinven sold a total of 4,600,000 shares of the Company’s common stock as part of a secondary offering. The Company incurred professional fees in connection with the secondary offering of $0.4 million during year ended December 31, 2017. The fees are included within operating expenses in the accompanying consolidated statement of operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and include the accounts and operations of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Significant items that are subject to management estimates and assumptions include revenue, net, allowances for doubtful accounts, acquisition purchase price allocations, long-lived asset impairment and useful lives, exit liabilities, stock-based compensation, uncertain income tax positions and contingencies. Reportable Segments The Company emphasizes its full service outsourcing model, providing services focused on the development, management and execution of clinical trials. As part of this full service approach, the Company utilizes centralized systems, customer interface technology, support functions and processes that cross service offerings and align resources to deliver efficient clinical trial services. Given the full service approach, the chief executive officer, who is the chief operating decision maker (“CODM”) assesses the allocation of resources based on key metrics including revenue, backlog, and net awards by service offering and consolidated profitability and consolidated cash flows. Based on the Company’s full service model, internal management and reporting structure, and key metrics used by the CODM to make resource allocation decisions, management has determined that the Company’s operations consist of a single operating segment. Therefore, results of operations are presented as a single reportable segment. Foreign Currencies Assets and liabilities recorded in foreign currencies on foreign subsidiary financial statements are translated at the exchange rate on the balance sheet date, while equity accounts are translated at historical exchange rates. Revenue and expenses are recorded at average rates of exchange during the year. Translation adjustments are recorded to Accumulated other comprehensive loss in the consolidated statements of shareholders’ equity and consolidated statements of comprehensive income. Separately, net realized gains and losses on foreign currency transactions are included in Miscellaneous (expense) income, net, on the consolidated statements of operations. Foreign currency transactions resulted in a net (loss)/gain of ($0.6) million, $0.4 million, and ($1.0) million during the years ended December 31, 2019, 2018, and 2017, respectively. Revenue Recognition The Company generally enters into contracts with customers to provide services ranging in duration from a few months to several years. The contract terms generally provide for payments based on a fixed fee or unit-of-service arrangement. The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers, which the Company adopted on January 1, 2018 using the modified retrospective implementation method. Revenue on contracts is recognized when or as the Company satisfies the contract performance obligations, at the amount that reflects the Company’s cumulative progress toward delivery of the performance obligation. This progress assessment is applied to the amount of consideration to which the Company expects to be paid for delivery of the performance obligation. The Company’s performance obligations are generally satisfied over time and related revenue is recognized as services are provided to meet these obligations. Contract Assumptions An arrangement is accounted for as a contract within the scope of ASC 606 when the Company and its customers approve the contract, are committed to perform their respective obligations, each party can identify its rights regarding the goods or services to be transferred, commercial substance is present, and it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. For the Company’s services to meet this criteria, contracts generally need to be written, pending regulatory hurdles required to commence work must be cleared, the study protocol must be completed, the customer must have adequate funding or reasonable path to funding to execute the contracted portion of the study, and the study must be actively moving forward. Once these criteria have been met, it is deemed that the Company and its customers are committed to perform their respective obligations. Depending on the timing of when these criteria are met, revenue recognition may vary significantly on a period over period basis. Accounting for contracts performed over a period of time involves the use of various assumptions to estimate total contract revenue and costs. The Company estimates expected costs to complete a contract and recognizes contracted revenue over the life of the contract as those costs are incurred. Cost estimates are based on a detailed project budget and are developed based on many variables, including, but not limited to, the scope of the work, the complexity of the study, the participating geographic locations and the Company’s historical experience. To assist with the estimation of costs expected at completion over the life of a project, regular contract reviews are performed in which performance to date is compared to the most current estimate to complete assumptions. The reviews include an assessment of costs incurred to date compared to expectations based on budget assumptions and other circumstances specific to the project. The total estimated costs necessary to complete is updated and any revisions to the existing cost estimate results in cumulative adjustments to the amount of revenue recognized in the period in which the revisions are identified. In the case of cost estimates related to activities legally contracted as reimbursable in nature, including but not limited to investigator fee activity, these estimates also influence the Company’s assumed contract value and assumed remaining performance obligations. Because of the uncertainties inherent in estimating the costs necessary to fulfill contractual obligations, it is possible that estimates may change in the near term, resulting in a material change in revenue reported. Contracts generally provide for pricing modifications upon scope of work changes. The Company recognizes revenue, at an amount to which it expects to be entitled, related to work performed in connection with scope changes when the underlying services are performed and a binding contractual commitment has been established with the customer. If the Company’s customers do not agree to contract changes upon changes in the Company’s scope of work, the Company could be exposed to cost overruns and reduced contract profitability. Costs are not deferred in anticipation of contracts being awarded or amendments being finalized, but are expensed as incurred. Most contracts are terminable by the customer, either immediately or according to advance notice terms specified within the contracts. These contracts require payment of fees for services rendered through the date of termination and may require payment for subsequent services necessary to conclude the study or close out the contract. Final settlement amounts are agreed to with the customer based on remaining work to be performed. These amounts are included in revenue when the Company believes the amount can be estimated reliably and its realization is probable. In evaluating the probability of recognition, the Company considers the contractual basis for the settlement amount and the objective evidence available to support the amount. Certain contracts contain volume rebate arrangements with our customers that provide for rebates if certain specified spending thresholds are met. These obligations are considered as a reduction in revenue when it appears probable that the arrangement thresholds will be met, which can be at contract inception. Total revenue is presented net of rebates of $6.2 million, $1.2 million and $0.2 million in the consolidated statements of operations during the years ended December 31, 2019, 2018 and 2017, respectively. The Company occasionally enter s into incentive fee arrangements with customers that provide for additional compensation if certain defined contractual milestones or performance thresholds are met. These additional fees are included in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee and when achievement of the incentive milestone is deemed probable. These estimates are based on anticipated performance, the Company’s best judg ment at the time or ultimately, upon achievement of the threshold or milestone. The Company records revenue net of any tax assessments by governmental authorities that are imposed and concurrent with specific revenue generating transactions. Performance Obligations Substantially all of the Company’s contracts consist of a single performance obligation, as the promise to transfer the individual services described in the contracts are not separately identifiable from other promises in the contracts, and therefore not distinct. Revenue recognition is determined by assessing the progress of performance completed or delivered to date compared to total services to be delivered under the terms of the arrangement. The measures utilized to assess progress on the satisfaction of performance are specific to the performance obligation identified in the contract. For the majority of the Company’s contract performance obligations, it utilizes the input method of cost to cost to measure progress, as the Company has determined that it is the most consistent measure of progress among contract tasks and represents the most faithful depiction of the transfer of services over the contract life. Under this method, the Company determines cost incurred to date for the services it provides compared to the total estimated costs at completion. For certain other contractual performance obligations, the Company has determined that an output method is the best measure of progress. These relate to certain unitized contracts, and the Company recognizes revenue in the period in which the unit is delivered compared to total contracted units. On December 31, 2019 and 2018, the Company had approximately $1.4 billion and $1.1 billion of performance obligations remaining to be performed for active projects. Concentration of Credit Risk Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents and accounts receivable. The cash and cash equivalent balances are held and maintained with financial institutions with reputable credit ratings and, consequently, the Company believes that such funds are subject to minimal credit risk. The Company generally does not require collateral or other securities to support customer receivables. In the years ended December 31, 2019, 2018 and 2017, credit losses have been immaterial and within management’s expectations. At December 31, 2019 and 2018, there were no customers accounting for more than 10% of the Company’s accounts receivable. Costs and Expenses The Company incurs costs associated with service delivery including direct labor and related employee benefits, laboratory supplies, and other expenses. These costs are recorded in Direct service costs, excluding depreciation and amortization as a component of Total direct costs in the accompanying consolidated statements of operations. In addition, the Company incurs expenses on behalf of its customers for various project expenditures including, but not limited to, investigator site payments, travel, meetings, printing, and shipping and handling fees that are reimbursed by its customers at cost. These costs are included in Reimbursable out-of-pocket expenses as a component of Total direct costs in the accompanying consolidated statements of operations. Total direct costs are expensed as incurred and are not deferred in anticipation of contracts being awarded or finalization of changes in scope. Selling, general and administrative includes administrative payroll and related employee benefits, sales and marketing expenses, administrative travel, and other expenses not directly related to service delivery. Rent, utilities, supplies, and software license expenses are allocated between Total direct costs, and Selling, general and administrative based on the estimated contribution among service delivery and support function efforts on a percentage basis. Depreciation and amortization is reported separately in the accompanying consolidated statements of operations. Costs of sales and marketing activities not subject to recovery pursuant to customer contracts, such as feasibility assessments and negotiation of contracts, are expensed as incurred and recorded as a component of Selling, general and administrative in the accompanying consolidated statements of operations. Advertising expenses are recorded as a component of Selling, general and administrative expenses in the accompanying consolidated statements of operations. Total advertising expenses of $0.7 million, $0.8 million and $0.6 million Prior to the adoption of Accounting Standard Update No. 2014-09 ‘‘Revenue from Contracts with Customers”, fees paid to investigators and other disbursements in which the Company acts as an agent on behalf of the customer were recorded net in the consolidated statements of operations with no impact on the Company’s revenue or expenses. Funds received in advance of study expenditures were recorded as Pre-funded study cost liabilities on the consolidated balance sheets. Any pre-funded amounts remaining at the conclusion of a study were returned to the client. Pre-funded study cost disbursements of $138.7 million Income Taxes The Company’s consolidated U.S. federal income tax return is comprised of its U.S. subsidiaries and one of its foreign branches located in Korea. All foreign subsidiaries of the Company file tax returns in their local jurisdictions. The Company provides for income taxes on all transactions that have been recognized in the consolidated financial statements in accordance with accounting guidance governing income tax accounting. Accordingly, the impact of changes in income tax laws on deferred tax assets and deferred tax liabilities are recognized in net earnings in the period during which such changes are enacted. The Company records deferred tax assets and liabilities based on temporary differences between the financial statement bases and tax bases of assets and liabilities. Deferred tax assets are recorded for tax benefit carryforwards using tax rates anticipated to be in effect in the year in which the temporary differences are expected to reverse. If it does not appear more likely than not that the full value of a deferred tax asset will be realized, the Company records a valuation allowance against the deferred tax asset, with an offsetting charge to the Company’s income tax provision or benefit. The value of the Company’s deferred tax assets is estimated based on, among other things, the Company’s ability to generate a sufficient level of future taxable income. In estimating future taxable income, the Company has considered both positive and negative evidence, such as historical and forecasted results of operations, and has considered the implementation of prudent and feasible tax planning strategies. The Company’s current accounting position is that unremitted foreign earnings are indefinitely reinvested. Therefore, the Company has not recorded deferred foreign withholding taxes on the unremitted foreign earnings. Refer to Note 11 for further information regarding this assertion. The Company follows accounting guidance related to accounting for uncertainty in income taxes which requires significant judgment in determining what constitutes an individual tax position as well as assessing the possible outcome of each tax position. Changes in judgments as to recognition or measurement of tax positions can materially affect the estimate of the effective tax rate, and, consequently, the Company’s consolidated financial results. The Company considers many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. In addition, the calculation of tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions. The Company determines its liability for uncertain tax positions globally. If the payment of these amounts ultimately proves to be unnecessary, the reversal of liabilities would result in tax benefits being recognized in the period when it is determined the liabilities are no longer necessary. If the calculation of the liability related to uncertain tax positions proves to be more or less than the ultimate assessment, a tax expense or tax benefit would result. Interest and penalties associated with uncertain tax positions are recognized as components of the Company’s Income tax provision. Research and Development Credits Research and development credits are available to the Company under tax laws in certain jurisdictions, based on qualifying research and development spend as defined under those tax laws. Certain tax jurisdictions provide refundable credits that are not wholly dependent on the Company’s income tax status or income tax position. In these circumstances the benefit of the credits is recorded as a reduction of operating expense. When they are wholly dependent upon the Company’s income tax position, research and development credits are recognized as a reduction of income tax expense. Stock-Based Compensation The Company has stock-based employee compensation plans for which it incurs compensation expense. Equity Awards In connection with the Company's initial public offering (IPO), the Board approved the formation of the 2016 Incentive Award Plan (the “2016 Plan”), which replaced our 2014 Equity Incentive Plan (the “2014 Plan”). The 2016 Plan provides for long-term equity incentive compensation for key employees, officers and non-employee directors. A variety of discretionary awards (collectively, the “Awards”) for employees and non-employee directors are authorized under the 2016 Plan, including vested common shares, stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), or other cash based or stock dividend equivalent awards. The vesting of such awards may be conditioned upon either a specified period of time or the attainment of specific performance goals as determined by the administrator of the 2016 Plan. The option price and term are also subject to determination by the administrator with respect to each grant. Option prices are generally expected to be set at the market price of our common stock at the date of grant and option terms are not expected to exceed ten years. All outstanding Awards under the 2016 Plan are equity classified awards. The Company created the 2014 Plan, providing for the future issuance of vested shares, stock options, RSAs and RSUs in Medpace Holdings, Inc.’s common stock (the “2014 Plan Awards”). The 2014 Plan Awards were subject to either equity or liability-classification pursuant to the terms of the participant’s award agreement and the 2014 Plan based on accounting guidance which governs such transactions. All outstanding Awards under the 2014 Plan are equity classified awards. Stock-based compensation expense for both the 2016 Plan and 2014 Plan is calculated using the fair value method on the grant date. The Company expenses stock-based compensation using a graded vesting schedule. Stock-based compensation expense is allocated between Total direct costs, and Selling, general and administrative in the consolidated statements of operations based on the underlying classification and scope of work for the employees receiving the Awards. Net Income Per Share Basic and diluted earnings or loss per share (“EPS”) are computed using the two-class method, which is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. The Company’s RSAs are considered participating securities because they are legally issued at the date of grant and holders are entitled to receive non-forfeitable dividends during the vesting term. The computation of diluted EPS includes additional common shares, such as unvested RSUs and stock options with exercise prices less than the average market price of the Company’s common stock during the period (“in-the-money options”), which would be considered outstanding under the treasury stock method. The treasury stock method assumes that additional shares would have to be issued in cases where the exercise price of stock options is less than the value of the common stock being acquired because the cash proceeds received from the stock option holder would not be sufficient to acquire that same number of shares. The Company does not compute diluted EPS in cases where the inclusion of such additional shares would be anti-dilutive in effect. The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2019, 2018 and 2017 (in thousands, except for earnings per share): Year Ended December 31, 2019 2018 2017 Weighted-average shares: Common shares outstanding 35,881 35,547 39,056 RSAs 100 142 90 Total weighted-average shares 35,981 35,689 39,146 Earnings per common share—Basic Net income $ 100,443 $ 73,185 $ 39,122 Less: Undistributed earnings allocated to RSAs 279 291 90 Net income available to common shareholders—Basic $ 100,164 $ 72,894 $ 39,032 Net income per common share—Basic $ 2.79 $ 2.05 $ 1.00 Basic weighted-average common shares outstanding 35,881 35,547 39,056 Effect of diluted shares 1,695 1,365 783 Diluted weighted-average shares outstanding 37,576 36,912 39,839 Net income per common share—Diluted $ 2.67 $ 1.97 $ 0.98 For the years ended December 31, 2019, 2018 and 2017, the computation of diluted EPS excludes the effect of (in thousands) 248, 121 and 63 stock options, respectively, due to each respective period’s average fair value of the Company’s common stock not exceeding the exercise prices. Fair Value Measurements The Company follows accounting guidance related to fair value measurements that defines fair value, establishes a framework for measuring fair value, and establishes a hierarchy for inputs used in measuring fair value. This hierarchy maximizes the use of “observable” inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy specifies three levels based on the inputs, as follows: Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities. Level 2: Valuations based on directly observable inputs or unobservable inputs corroborated by market data. Level 3: Valuations based on unobservable inputs supported by little or no market activity representing management’s determination of assumptions of how market participants would price the assets or liabilities. The fair value of financial instruments such as cash and cash equivalents, accounts receivable and unbilled, net, accounts payable, accrued expenses, and advanced billings approximate their carrying amounts due to their short term maturities. The Company does not have any recurring fair value measurements as of December 31, 2019. There were no transfers between Level 1, Level 2, or Level 3 during the years ended December 31, 2019, 2018 and 2017. Cash and Cash Equivalents, including Restricted Cash Cash and cash equivalents, including restricted cash, are invested in demand deposits and money market funds, all of which have an original maturity of three months or less. Restricted cash consists of customer funds received in advance and subject to specific restrictions, as well as amounts placed in escrow for contingent payments resulting from acquisitions or other contractual arrangements. Accounts Receivable and Unbilled, Net Accounts receivable represent amounts due from the Company’s customers who are concentrated primarily in the pharmaceutical, biotechnology, and medical device industries. Unbilled services represent revenue recognized to date that is currently not billable to the customer pursuant to contractual terms. In general, amounts become billable upon the achievement of negotiated contractual events or in accordance with predetermined payment schedules. Amounts classified to unbilled services are those billable to customers within one year from the respective balance sheet date. The Company grants credit terms to its customers prior to signing a service contract and monitors the creditworthiness of its customers on an ongoing basis. The Company maintains an allowance for doubtful accounts based on specific identification of accounts receivable that are at risk of not being collected. Uncollectible accounts receivable are written off only after all reasonable collection efforts have been exhausted. Moreover, in some cases the Company requires advance payment from its customers for a portion of the study contract price upon the signing of a service contract. These advance payments are deferred and recognized as revenue as services are performed. Inventory Inventory, which consists primarily of laboratory supplies, is valued at the lower of cost or market. Inventory is stated at purchased cost using the first-in, first out (FIFO) cost method. The inventory balance is included in Prepaid expenses and other current assets in the consolidated balance sheets. Property and Equipment Property and equipment is recorded at cost. Depreciation is provided on the straight-line method at rates adequate to allocate the cost of the applicable assets over their estimated useful lives, which is three to five years for computer hardware, software, phone, and medical imaging equipment, five to seven years for furniture and fixtures and other equipment, and thirty to forty years for buildings. The Company capitalizes costs of computer software developed for internal use and amortizes these costs on a straight-line basis over the estimated useful life, not to exceed three years. Leasehold improvements and deemed assets from landlord building construction are capitalized and amortized on a straight-line basis over the shorter of the estimated useful life of the improvement or the associated remaining lease term. Repairs and maintenance are expensed as incurred. Leases The Company enters into contracts to lease facilities and equipment to be used in its operations. At contract inception, the Company determines whether a contract contains a lease within the scope of Accounting Standard Codification Topic 842, Leases (“ASC 842”), and determines the appropriate classification of the lease as either operating or finance. Contracts containing operating leases are recorded on the consolidated balance sheets within Operating lease right-of-use (“ROU”) assets, Other current liabilities, and Operating lease liabilities. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term as of the lease commencement date. In addition, operating ROU assets also include lease payments made and exclude lease incentives and initial direct costs incurred. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term within Total direct costs and Selling, general, and administrative expenses. Variable lease costs are primarily related to adjustments for inflation, common area maintenance and property tax and are recognized within Total direct costs and Selling, general and administrative expenses. Contracts containing finance leases are recognized initially in the same manner as Operating l ease ROU assets and liabilities; however , they are recorded on the consolidated balance sheets within Property and equipment, net, Other current liabilities, and Other long-term liabilities. Finance lease assets are subsequently amortized on a straight line basis over the lease term within Depreciation expense, while the lease liability is accreted within Interest expense, net utilizing the discount rate determined at lease commencement and reduced by periodic lease payments over the lease term. Currently, the Company does not have any finance leases. The discount rate utilized in determining the present value of future payments for both operating and finance leases, unless implicit in the lease contract, is determined based on the Company’s collateralized incremental borrowing rate based on the information available at lease commencement. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option as determined at lease commencement. Many of our lease agreements have both lease and non-lease components, which the Company has elected to treat as a single lease component for recognition purposes. The Company may enter into short-term leases (leases with a lease term of less than one year), which it has elected not to capitalize as assets and liabilities on the consolidated balance sheets, but instead recognizes lease payments within Total direct costs and Selling, general, and administrative expenses on a straight line basis over the lease term. Goodwill and Intangible Assets Goodwill Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations. The carrying value of goodwill is reviewed at least annually for impairment, or as indicators of potential impairment are identified, at the reporting unit level. The reporting units are Phase I-IV clinical research services and Laboratories as of December 31, 2019. The Company performs its annual impairment tests during the fourth quarter each year, comparing the fair value of each of our reporting units with its carrying amount, inclusive of goodwill. A goodwill impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. Fair value is estimated using a combination of the income approach, a discounted cash flow analysis, and the market approach, utilizing the guideline company method. There was no indication of impairment related to goodwill based on the fourth quarter 2019 assessment. Intangible Assets The Company has an indefinite lived intangible asset related to its trade name. The carrying value of the trade name asset is reviewed at least annually for impairment, or as indicators of potential impairment are identified. The Company performs its annual impairment test in the fourth quarter each year in conjunction with its annual assessment of goodwill. The assessment consists of comparing the carrying value of the indefinite lived intangible asset to its estimated fair value, utilizing the relief from royalty method, an income approach valuation. There was no indication of impairment related to the trade name asset based on the fourth quarter 2019 assessment. Finite-lived intangible assets consist mainly of the value assigned to customer relationships and developed technologies. Finite-lived intangible assets are amortized straight-line or using an accelerated method over their estimated useful lives, which range in term from five to fifteen years. Impairment of Long-Lived Assets Long-lived assets, primarily property and equipment and finite-lived intangible assets, are reviewed for impairment and the reasonableness of the estimated useful lives whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable or that a change in useful life may be appropriate. Recoverability for long-lived assets is determined by comparing the forecasted undiscounted cash flows of the operation to which the assets relate to the carrying amount of the assets. If the undiscounted cas |
Contract Assets and Contract Li
Contract Assets and Contract Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Contract Assets and Contract Liabilities | 3. CONTRACT ASSETS AND CONTRACT LIABILITIES Contract assets and liabilities are reflected in the Company’s consolidated balance sheets within the accounts reflected below. Contract Assets Accounts receivable represent amounts due from the Company’s customers who are concentrated primarily in the pharmaceutical, biotechnology, and medical device industries. Unbilled represents revenue recognized to date that has not been billed or is not yet contractually billable to the customer. In general, amounts become billable upon the achievement of negotiated contractual events, in accordance with predetermined payment schedules or when a reimbursable expense has been incurred. Amounts classified to unbilled are those billable to customers within one year from the respective balance sheet date. Accounts receivable and unbilled, net consisted of the following (in thousands): As of December 31, December 31, 2019 2018 Accounts receivable $ 127,877 $ 85,120 Unbilled receivables 28,368 49,361 Less: allowance for doubtful accounts (583 ) (1,032 ) Total accounts receivable and unbilled, net $ 155,662 $ 133,449 Unbilled receivables decreased to $28.4 million at December 31, 2019 from $49.4 million at December 31, 2018. Contract Liabilities Advanced billings represents cash received from customers, or billed amounts per an agreed upon payment schedule, in advance of services being performed or revenue being recognized. Advanced billings consisted of the following (in thousands): As of December 31, December 31, 2019 2018 Advanced billings $ 192,359 $ 147,935 Advanced billings increased to $192.4 million at December 31, 2019, from $147.9 million at December 31, 2018. A rollforward of allowance for doubtful account activity is as follows: Year Ended December 31, 2019 2018 2017 Allowance for doubtful accounts - beginning balance $ (1,032 ) $ (673 ) $ (3,222 ) Current year provision (263 ) (791 ) (250 ) Write-offs, recoveries and the effects of foreign currency exchange 712 432 2,799 Allowance for doubtful accounts - ending balance $ (583 ) $ (1,032 ) $ (673 ) |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | 4. PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following at December 31 (in thousands): 2019 2018 Land $ 1,577 $ 1,240 Equipment 20,225 15,437 Furniture, fixtures, and leasehold improvements 24,624 20,892 Computer hardware, software, and phone equipment 15,958 11,566 Buildings 13,272 8,145 Deemed assets from landlord building construction - 22,752 Construction-in-progress 3,265 5,334 Property and equipment at cost 78,921 85,366 Less: Accumulated depreciation (31,629 ) (33,111 ) Property and equipment, net $ 47,292 $ 52,255 Depreciation expense was $8.4 million, $9.2 million and $8.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. In 2011, Medpace, Inc. entered into two multi-year lease agreements governing the future occupancy of additional office space in Cincinnati, Ohio. The Company assumed occupancy of both spaces during 2012 and began making lease payments at that time. The leases expire in 2027 and the Company has one 10-year option to extend the term of the leases. As of December 31, 2018, in accordance with the accounting guidance related to leases under ASC 840, the Company was deemed in substance to be the owner of the properties during the construction phase. The accounting guidance required that a lessee be considered the owner of a real estate project during the construction period if a related party of the lessee is an owner of the real estate. Given that a related party of Medpace made an equity investment in the lessor, Medpace was considered the owner of the property for accounting purposes during the buildings’ construction. Accordingly, the Company reflected the building and related liabilities as Deemed assets from landlord building construction (“Deemed Assets”) and Deemed landlord liabilities, respectively in the consolidated balance sheets. The Deemed Assets were being fully depreciated, on a straight line basis, over the 15-year term of the lease. As of December 31, 2019, in accordance with the accounting guidance related to leases under ASC 842, these leases have been classified as operating leases and the deemed assets have been removed. See Note 2 in the Notes to Consolidated Financial Statements for a description of the ASC 842 adoption entries. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 5. GOODWILL AND INTANGIBLE ASSETS Goodwill Total assets carried on the balance sheet and not remeasured to fair value on a recurring basis, identified as Level 3 measurements, as of December 31, 2019 are $694.0 million, comprised of $662.4 million of goodwill and Intangible Assets, Net Intangible assets, net consisted of the following at December 31 (in thousands): 2019 2018 Intangible assets: Finite-lived intangible assets: Carrying amount: Customer relationships $ 145,051 $ 145,051 Developed technologies 54,475 54,475 Other 3,074 3,074 Total finite-lived intangible assets 202,600 202,600 Accumulated amortization: Customer relationships (122,426 ) (110,636 ) Developed technologies (54,475 ) (51,751 ) Other (2,995 ) (2,680 ) Total accumulated amortization (179,896 ) (165,067 ) Total finite-lived intangible assets, net 22,704 37,533 Trade name (indefinite-lived) 31,646 31,646 Total intangible assets, net $ 54,350 $ 69,179 As of December 31, 2019, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands): Amortization 2020 $ 7,876 2021 5,114 2022 3,353 2023 2,199 2024 1,443 Later years 2,719 $ 22,704 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Payables And Accruals [Abstract] | |
Accrued Expenses | 6. ACCRUED EXPENSES Accrued expenses consisted of the following at December 31 (in thousands): 2019 2018 Employee compensation and benefits $ 34,119 $ 31,344 Project related reimbursable expenses 68,696 51,109 Other 6,437 5,040 Total accrued expenses $ 109,252 $ 87,493 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 7. DEBT Debt consisted of the following at December 31 (in thousands): 2019 2018 Term loan $ - $ 80,438 Less unamortized discount - (282 ) Less unamortized term loan debt issuance costs - (435 ) Long-term debt, net, less current portion $ - $ 79,721 2019 Credit Agreement On September 30, 2019 (the “Closing Date”), the Company obtained a new unsecured credit facility in an aggregate principal amount up to $50.0 million (the “Credit Facility”) through its wholly owned subsidiaries, Medpace, Inc., as borrower (the “Borrower”), and Medpace IntermediateCo, Inc., as guarantor (the “Guarantor”). On the Closing Date, the Borrower and lender entered into a Loan Agreement (the “Loan Agreement”) providing for the Credit Facility, and the Guarantor executed a Guaranty Agreement providing for its guarantee of the payment and performance of the obligations under the Loan Agreement. The Loan Agreement provides that outstanding balances under the Credit Facility will bear interest at a rate of LIBOR plus 100 basis points (1.00%). The Loan Agreement also provides that the Credit Facility will expire in 364 days from the Closing Date. The Loan Agreement contains other customary loan terms, representations As of December 31, 2019, there were no outstanding borrowings under the Credit Facility and $0.2 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility. The Loan Agreement replaced the Company’s senior secured credit agreement dated as of December 8, 2016 (the “Prior Senior Secured Credit Agreement”), which was terminated on September 30, 2019 (the “Termination Date”). As of September 30, 2019, no amounts were drawn under the Prior Senior Secured Credit Agreement and no fees or penalties were incurred as a result of the termination, other than the payment of accrued commitment fees of $0.1 million through the Termination Date. In addition, on the Termination Date, the Company recorded unamortized loan issuance fees of $0.7 million, consisting of $0.5 million in Selling, general and administrative and $0.2 million of interest expense, during the third quarter of 2019, representing unamortized loan origination fees and loan discounts, respectively, associated with the Prior Senior Secured Credit Agreement. 2016 Credit Agreement On December 8, 2016, Medpace IntermediateCo, Inc., as borrower, and Medpace Acquisition, Inc., a wholly-owned subsidiary of Medpace Holdings, Inc., as parent guarantor (the “Parent Guarantor”), entered into the Prior Senior Secured Credit Agreement consisting of a $165.0 million term loan (the “Prior Senior Secured Term Loan Facility”) The Prior Senior Secured Credit Facilities provided for, at the Company’s option, interest at the Eurocurrency rate or Base rate for the Prior Senior Secured Term Loan Facility and the Prior Senior Secured Revolving Credit Facility borrowings. The Company, at its discretion, could choose interest periods of one, two, three or six months, which determines the interest rate to be applied. Interest on Eurocurrency loans was payable at the end of the selected Eurocurrency term and interest on Base rate loans were payable quarterly in conjunction with any required principal payments. Borrowings under the Prior Senior Secured Credit Facilities bore interest at a rate equal to, at our option, either (i) the adjusted Eurocurrency rate based on LIBOR for U.S. dollar deposits for loans denominated in dollars, EURIBOR for Euro deposits for loans denominated in Euros and the offer rate for any other currencies for loans denominated in such other currencies for the relevant interest period plus an applicable margin from 1.25% to 2.25% based on the total net leverage ratio from less than 1.50:1.00 to greater than 3.75:1:00, or (ii) an alternative base rate (determined by reference to the highest of (a) the prime commercial lending rate of the administrative agent, as established from time to time, (b) the Federal Funds Rate plus 0.50% and (c) the one-month adjusted Eurocurrency rate for loans in U.S. dollars plus 1.00%) plus an applicable margin from 0.25% to 1.25% based on the total net leverage ratio from less than 1.50:1.00 to greater than 3.75:1:00. The applicable margin as of December 31, 2018 was 1.25% for eurocurrency loans and 0.25% for base rate loans. The Company was able to voluntarily prepay outstanding loans under the Prior Senior Secured Credit Facilities without premium or penalty. As of December 31, 2018, the interest rate applicable on the term loan was the Eurocurrency interest rate of 3.77%. In addition, the Company was required to pay to the lenders a commitment fee on a quarterly basis at an annual rate of 0.375% of the unused borrowings under the Prior Senior Secured Revolving Credit Facility for the first full fiscal quarter after the closing date, and thereafter 0.50% if the total net leverage ratio is greater than or equal to 3.00:1.00, or 0.375% if the total net leverage ratio is less than 3.00:1.00. At December 31, 2018 the Company had no outstanding borrowings under the Prior Senior Secured Revolving Credit Facility, resulting in $149.8 million in undrawn capacity available under the Prior Senior Secured Revolving Credit Facility. As of December 31, 2018, the interest rate applicable on the Prior Senior Secured Revolving Credit Facility was the Eurocurrency interest rate of 3.77%. In addition, the Company had $0.2 million in letters of credit outstanding, which were secured by the Prior Senior Secured Revolving Credit Facility at December 31, 2018. The original issue discount of $0.5 million related to the issuance of the Prior Senior Secured Term Loan Facility was recorded as a reduction of the underlying debt issuances within Long-term debt, net, less current portion and was being amortized over the life of the debt using the effective-interest method. The unamortized portion of the discount related to the Prior Senior Secured Term Loan Facility was $0.3 million as of December 31, 2018. Per the terms of the Prior Senior Secured Credit Term Loan Facility, principal was scheduled to be paid quarterly on the last business day of March, June, September and December of each year, beginning March 2017. Origination fees of $0.8 million related to the Prior Senior Secured Term Loan Facility were recorded as a reduction of the underlying debt issuances in Long-term debt, net. These fees were being amortized over the life of the debt using the effective-interest method. The unamortized portion of the origination fees related to the Prior Senior Secured Term Loan Facility was $0.4 million at December 31, 2018. In the second quarter of 2019, the Company paid off its remaining outstanding obligations against its Prior Senior Secured Term Loan Facility. Upon satisfaction of the outstanding obligations of the Prior Senior Secured Term Loan Facility, the Company recorded unamortized term loan issuance fees of $0.3 million to Selling, general and administrative expenses and the unamortized discount of $0.2 million to Interest expense, net. Origination fees of $1.6 million related to the Prior Senior Secured Revolving Credit Facility were originally capitalized as a component of Other assets. These fees were being amortized over the life of the debt using the effective-interest method. The unamortized portion of the origination fees related to the Prior Senior Secured Revolving Credit Facility were $0.9 million at December 31, 2018. The Prior Senior Secured Credit Facilities were guaranteed by the Parent Guarantor and its material, direct or indirect wholly owned domestic subsidiaries, with certain exceptions, including where providing such guarantees is not permitted by law, regulation or contract or would result in adverse tax consequences. The Prior Senior Secured Credit Facilities were subject to customary covenants relating to financial ratios and restrictions on certain types of transactions, including restricting the Company's ability to incur additional indebtedness, acquire and dispose of assets, make investments, pay dividends, or engage in mergers and acquisitions. The Company was required to maintain a ratio of consolidated funded indebtedness minus unrestricted cash and cash equivalents (in the aggregate not to exceed $50 million and to include not more than $25 million of foreign unrestricted cash and cash equivalents) to consolidated EBITDA for the most recent four fiscal quarter period not to exceed 4.00:1.00; provided that the Company shall be permitted to increase the ratio to 4.50:1.00 in connection with any permitted acquisition or any other acquisition consented to by the Administrative Agent and the Required Lenders (as defined in the Prior Senior Secured Credit Agreement) with total cash consideration in excess of $25 million. Such increase shall be applicable for the fiscal quarter in which such acquisition is consummated and the three consecutive test periods thereafter. The Company was also required to maintain a ratio of consolidated EBITDA to consolidated interest expense, in each case for the most recent four fiscal quarter period, of not less than 3.00:1.00. The Company was in compliance with all financial covenants as of December 31, 2018. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 8 The Company enters into leases for real estate and equipment. Real estate leases are for our corporate office space and laboratories around the world. Real estate leases have remaining lease terms of less than one year one year The components of lease expense were as follows (in thousands): Year Ended December 31, 2019 Operating lease cost $ 13,151 Variable lease cost 2,813 Supplemental cash flow information related to the leases was as follows (in thousands): Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9,773 Right-of-use assets obtained in exchange for lease obligations: Operating leases 10,294 Supplemental balance sheet information related to the leases was as follows (in thousands): As of December 31, 2019 Operating lease right-of-use assets $ 52,152 Other current liabilities $ 10,977 Operating lease liabilities 45,212 Total operating lease liabilities $ 56,189 Weighted Average Remaining Lease Term (years) Operating leases 6.3 Weighted Average Discount Rate Operating leases 6.0 % Lease payments due related to lease liabilities as of December 31, 2019 were as follows (in thousands): Related Party Non-Related Parties Total Operating Leases Operating Leases Operating Leases 2020 $ 5,600 $ 7,644 $ 13,244 2021 5,600 7,435 13,035 2022 5,267 4,664 9,931 2023 3,613 3,916 7,529 2024 3,613 2,875 6,488 Later years 9,665 8,644 18,309 Total lease payments 33,358 35,178 68,536 Less: imputed interest (6,162 ) (6,185 ) (12,347 ) Total $ 27,196 $ 28,993 $ 56,189 As of December 31, 2019, we have several additional leases with contractual obligations, which have not yet commenced, with future payments of $133.0 million. This includes a lease related to a corporate office under construction in Cincinnati, Ohio, which has not yet commenced, with future payments of $124.0 million. This lease will commence in fiscal year 2020 with an initial lease term of 20 years and a renewal option for two 10-year terms at prevailing market rates. Comparative period disclosures under ASC 840: Rental expense under operating leases totaled $9.2 million and $7.9 million for the years ended December 31, 2018 and 2017, respectively, and is allocated between Total direct costs, and Selling, general and administrative in the consolidated statements of operations. Future minimum rental payments for lease obligations with initial terms in excess of one year as of December 31, 2018 are as follows (in thousands): Non-Related Total Related Party Parties Operating Operating Operating Leases Leases Leases 2019 $ 1,987 $ 6,186 $ 8,173 2020 6,843 6,617 13,460 2021 6,964 5,873 12,837 2022 6,757 3,694 10,451 2023 5,229 3,257 8,486 Thereafter 103,870 5,752 109,622 Total minimum lease payments $ 131,650 $ 31,379 $ 163,029 Minimum annual payments required in conjunction with the Deemed landlord liabilities as of December 31, 2018 are as follows (in thousands): Related Party Total Minimum Lease Less: Principal Payments Interest Amounts Due 2019 $ 3,918 $ 1,818 $ 2,100 2020 3,988 1,662 2,326 2021 4,039 1,490 2,549 2022 4,092 1,301 2,791 2023 4,145 1,095 3,050 Thereafter 15,697 1,929 13,768 Total $ 35,879 $ 9,295 $ 26,584 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | 9. SHAREHOLDERS’ EQUITY Stock-Based Compensation 2016 Incentive Award Plan On August 11, 2016 in connection with the Company's IPO, the Board approved the formation of the 2016 Incentive Award Plan (the “2016 Plan”), which replaced our 2014 Equity Incentive Plan (the “2014 Plan”). The 2016 Plan provides for long-term equity incentive compensation for key employees, officers and non-employee directors. A variety of discretionary awards (collectively, the “Awards”) for employees and non-employee directors are authorized under the 2016 Plan, including vested shares, stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), or other cash based or stock dividend equivalent awards, which are all equity-classified instruments under the 2016 Plan. The number of shares registered and available for grant under the 2016 Plan is 6,000,000. The vesting of such awards may be conditioned upon either a specified period of time or the attainment of specific performance goals as determined by the administrator of the 2016 Plan. The option price and term are also subject to determination by the administrator with respect to each grant. Option prices are generally expected to be set at the market price of the Company’s common stock at the date of grant and option terms are not expected to exceed ten years. The Company granted 816,286 awards to employees under the 2016 Incentive Award Plan during the year ended December 31, 2019, consisting of 10,000 stock option awards and 227,610 restricted stock units (“RSU”) vesting after four years, 5,000 stock option awards vesting after one year, 551,676 fully-vested stock option awards and 22,000 stock option awards with vesting in twelve equal monthly installments beginning on March 31, 2019. The Company granted an additional 41,853 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the year ended December 31, 2019. These awards will vest on the earlier of (a) the day immediately preceding the date of the first annual meeting following the date of grant and (b) the first anniversary of the date of grant, subject to the non-employee director continuing in service through the applicable vesting date. T he Company granted 850,700 awards to employees under the 2016 Plan during the year ended December 31, 2018, consisting of 550,500 stock option awards and 300,200 restricted stock units (“RSU”), all vesting after four years. The Company granted an additional 33,801 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the year ended December 31, 2018. These awards will vest on the earlier of (a) the day immediately preceding the date of the first annual meeting following the date of grant and (b) the first anniversary of the date of grant, subject to the non-employee director continuing in service through the applicable vesting date. The Company granted 968,550 awards to employees under the 2016 Plan during the year ended December 31, 2017, consisting of 797,550 stock option awards, 118,000 restricted stock awards (“RSA”) and 38,000 restricted stock units (“RSU”), all vesting after four years. The Company granted 15,000 stock option awards, vesting equally on the second, third and fourth anniversary of the grant date over four years. Additionally, the Company granted 41,346 stock option awards, vesting over one year, to non-employee directors under the 2016 Incentive Award Plan, during the year ended December 31, 2017. The 2016 Plan expires in 2026, except for awards then outstanding, and is administered by the Board. All Awards granted at the IPO or thereafter were or will be issued under the 2016 Plan. The company satisfies stock option exercises and vested stock awards with newly issued shares. Shares available for future stock compensation grants totaled 3.2 million and 3.8 million at December 31, 2019 and 2018. 2014 Equity Incentive Plan The 2014 Plan for employees and directors provided the issuance of vested shares, stock options, RSAs and RSUs in Medpace Holdings, Inc.’s common stock. The awards were granted to key employees as additional compensation for services rendered and as a means of retention over the vesting period, typically three to four years. RSAs awarded under the 2014 Plan were subject to automatic forfeiture upon departure until vested and entitle the shareholder to all rights of common stock ownership except that they may not be sold, transferred, pledged or otherwise disposed of during the restriction period, except as noted in the following paragraph. The 2014 Plan allowed for the issuance of non-qualified stock options to employees, officers, and directors under this plan (collectively, “the Participants”). Under the 2014 Plan, options could be granted with an exercise price equal to or greater than the fair value of common stock at the grant date as determined by the Board of Directors. The stock options, if unexercised, expired seven years from the date of grant. In the third quarter of 2019, Medpace Investors, LLC (“MPI”), a related party to the Company, filed a Tender Offer Statement (“Tender Offer”) offering to purchase, for cash, vested stock options of employee holders of options outstanding from the 2014 Incentive Award Plan. The Tender Offer resulted in the tender and purchase of 229,431 vested options from employee holders of options by MPI. Under generally accepted accounting guidance governing such transactions, because the Tender offer by an economic interest holder in the Company, this transaction is accounted for as a settlement of vested options and a reissuance of options at fair value as of the transaction date. Expense related to the reissuance of options to MPI is included as stock-based compensation expense of $5.1 million within Selling, general and administrative expenses during the year ended December 31, 2019. Equity Awards Valuation Assumptions The Company determines the fair value of stock options using the Black-Scholes-Merten option pricing model (the “BSM Model”). The BSM Model is primarily affected by the fair value of the Company’s common stock (see restricted share valuation discussion below), the expected holding period for the option, expected stock price volatility over the term of the awards, the risk-free interest rate, and expected dividends. The following table sets forth the key weighted-average assumptions used in the BSM Model to calculate the fair value of options: Year Ended December 31, 2019 2018 2017 Expected holding period - years 2.6 5.4 5.4 Expected volatility 26.3% 27.0% 28.0% Risk-free interest rate 2.0% 2.8% 2.0% Expected dividend yield 0.0% 0.0% 0.0% The assumptions used in the table above reflect grant date inputs to arrive at the grant date fair values for stock options subject to equity-classified stock compensation accounting. The expected holding period represents the period of time the grants are expected to be outstanding. The Company uses the simplified method, as prescribed by accounting guidance governing such awards, to calculate the expected holding period for options granted to employees as we do not have sufficient historical evidence data to provide a reasonable basis upon which to estimate the expected holding period. For options valued by the Company for the years ended December 31, 2019, 2018 and 2017, the expected holding period is based on an average between the midpoint of the vesting date and the expiration date of the options. The Company estimates expected volatility primarily by using the historical volatility of a publicly traded peer group that operates in the clinical research and development industry. The Company does not have adequate history to calculate its own historical or implied volatility and believes the Company’s expected volatility will approximate the historical experience of the peer group. The risk-free interest rate is based on the yield on U.S. Treasury obligations with remaining durations equal to the expected holding period of the options. The expected dividend yield is assumed to be zero based on recent and anticipated dividend activity. Subsequent to the IPO, the fair value of common stock is based upon the market price of the Company’s common stock on the date of grant as listed on the NASDAQ. Due to the absence of an active market for the Company’s common stock prior to the IPO, the Company determined the fair value of restricted shares by obtaining an independent valuation of the fair value of the Company’s equity, applying a discount for lack of marketability, and then calculating the implied share price. The fair value of the Company was estimated primarily using an income approach which is based on assumptions and estimates made by management and, secondarily, using other market-related factors in current industry trends as well as observed transaction values. In determining the estimated future cash flows used in the income approach, the Company developed and applied certain estimates and judgments, including current and projected future levels of income based on management’s plans, business trends, prospects and market and economic conditions, including market-participant considerations. Significant assumptions utilized in the income approach were based on company specific information and projections, which were not observable in the market and are thus considered Level 3 measurements by authoritative guidance. The discount for lack of marketability (the “Marketability Discount”) was applied to reflect what a market participant would consider in relation to the post-vesting restrictions imposed regarding the inability to sell, transfer, or pledge the shares during the restriction period. The Marketability Discount was estimated by using the BSM Model to calculate the cost of a theoretical put option to hedge the fluctuation in value of the investment between the valuation date and an anticipated liquidity date. The following table summarizes the grant date fair values of stock options and restricted shares issued during the period as well as the allocation of stock-based compensation expense to Total direct costs, and Selling, general and administrative reported in the consolidated statements of operations: Year Ended December 31, 2019 2018 2017 Weighted average, grant date fair value Stock options $ 14.06 $ 11.51 $ 8.54 Restricted shares (RSAs and RSUs) $ 60.53 $ 49.38 $ 31.90 Stock-based compensation expense allocated to: Total direct costs $ 6,999 $ 4,132 $ 2,128 Selling, general, and administrative 13,742 2,367 2,335 Total stock-based compensation expense $ 20,741 $ 6,499 $ 4,463 Award Activity The following table sets forth the Company’s stock option activity: Year Ended December 31, 2019 2018 2017 Weighted Weighted Weighted Options Exercise Price Options Exercise Price Options Exercise Price Outstanding - beginning of Period 2,945,040 $ 24.18 2,782,868 $ 20.73 2,350,166 $ 17.57 Granted 859,960 $ 54.97 584,301 $ 37.72 853,896 $ 28.67 Exercised (399,368 ) $ 16.19 (169,771 ) $ 14.98 (116,787 ) $ 15.52 Forfeited/Expired (375,561 ) $ 19.91 (252,358 ) $ 23.69 (304,407 ) $ 20.55 Outstanding - end of period 3,030,071 $ 34.50 2,945,040 $ 24.18 2,782,868 $ 20.73 Exercisable - end of period 1,435,088 $ 38.62 1,096,116 $ 16.01 917,592 $ 15.40 The following table sets forth the Company’s Restricted Share activity: Year Ended December 31, 2019 2018 2017 Shares/Units Shares/Units Shares/Units Outstanding and unvested - beginning of period 421,200 183,629 59,258 Granted 227,610 300,200 156,000 Vested - (29,629 ) (29,629 ) Forfeited (79,040 ) (33,000 ) (2,000 ) Outstanding and unvested - end of period 569,770 421,200 183,629 Cumulative vested shares - end of period 1,913,916 1,913,916 1,884,287 The following table summarizes information about stock options expected to vest, stock options exercisable, and unvested restricted share awards expected to vest at December 31, 2019: Weighted Average Weighted Average Exercise Stock Restricted Remaining Price Options Shares Life (Years) December 31, 2019 Number of stock options expected to vest $ 34.50 3,030,071 - 4.0 Number of Restricted Shares expected to vest - 569,770 Total expected to vest - December 31, 2019 3,030,071 569,770 Total stock options exercisable - December 31, 2019 $ 38.62 1,435,088 3.6 Unrecognized compensation cost - December 31, 2019 (in thousands) $ 5,884 $ 19,697 Weighted average years over which unrecognized compensation cost will be recognized 1.9 2.9 The following table sets forth the aggregate intrinsic value of stock options exercised, the fair values of awards vested, and share based liabilities settled during the respective periods (in thousands): Year Ended December 31, 2019 2018 2017 Total intrinsic value of stock options exercised $ 19,807 $ 5,326 $ 1,619 Total grant-date fair value of stock options vested $ 12,117 $ 1,417 $ 1,317 Total grant-date fair value of restricted shares vested $ - $ 447 $ 447 Total settlement date fair value of restricted shares vested $ - $ 1,568 $ 1,074 The actual tax benefits recognized related to stock-based compensation totaled $5.5 million, $1.0 million and $0.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Compensation Related Costs [Abstract] | |
Employee Benefit Plans | 10. EMPLOYEE BENEFIT PLANS The Company provides a 401(k) plan that covers substantially all U.S. employees. Participants can elect to contribute up to 50% of their eligible earnings on a pre-tax basis, subject to Internal Revenue Service annual limitations. The U.S.-based plan offers a year-end employer matching contribution, requiring the participant to be an employee at year-end to qualify for the match. Participants with one year or more of service are eligible for the matching contribution. Participants fully vest in the employer contributions after three years of service. The employer contribution represents a percentage of a participant’s eligible compensation. The Company’s 401(k) Plan costs were $3.1 million, $2.7 million and $2.3 million during the years ended December 31, 2019, 2018 and 2017, respectively, and were allocated between Total direct costs, and Selling, general and administrative in the consolidated statements of operations. The Company has various defined contribution arrangements for eligible employees of non-U.S. entities. These defined contribution arrangements provide employees with retirement savings and life insurance benefits. The Company incurred expenses related to these arrangements of $1.2 million, $1.0 million and $0.9 million in the years ended December 31, 2019, 2018 and 2017, respectively, and were allocated between Total direct costs, and Selling, general and administrative in the consolidated statements of operations. The Company is also required to pay certain minimum statutory post-employment benefits. The Company recognizes a liability and the associated expense for these benefits when it is probable that employees are entitled to the benefit. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. INCOME TAXES US Tax Reform The “Tax Cuts and Jobs Act” (TCJA) was enacted on December 22, 2017 and it significantly reforms the Internal Revenue Code of 1986, as amended. The TCJA, among other things, includes a reduction in the U.S. federal tax rate from 35% to 21%, allows for the expensing of capital expenditures, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, creates new taxes on certain foreign sourced earnings and puts into effect the migration from a “worldwide” system of taxation to a territorial system. The Company recognized the income tax effects of the “Tax Cuts and Jobs Act” (TCJA) in its audited consolidated financial statements on our 2017 Annual Report on Form 10-K in accordance with Staff Accounting Bulletin No. 118, which provides Securities and Exchange Commission staff guidance for the application of ASC Topic 740, Income Taxes, in the reporting period in which the TCJA was signed into law. The guidance also provides for a measurement period of up to one year from the enactment date for the Company to complete the accounting for the U.S. tax law changes. As such, the Company’s 2017 financial results reflected the provisional estimate of the income tax effects of the TCJA. The Company completed its analysis of the TCJA in 2018 and adjusted the 2017 provisional estimates to the final amounts. A summary of the provisional and final amounts is included below: • Transition tax on unrepatriated foreign earnings: The Company originally estimated a transition tax expense of $0.6 million and the final transition tax liability is $0.7 million. The adjustment unfavorably impacted the effective tax rate by approximately 0.1%. • Reduction of U.S. Federal Corporate Tax Rate: The Company originally estimated a provisional tax benefit of $3.4 million related to the revaluation of deferred tax assets and liabilities. The deferred tax assets/liabilities as of December 31, 2017 were adjusted to match the balances per the 2017 U.S. corporate income tax return. The revised deferred balance was then adjusted from a 35% tax rate to a 21% tax rate. This resulted in a final tax benefit of approximately $3.6 million. The adjustment favorably impacted the effective tax rate by approximately 0.2%. • Indefinite reinvestment assertion: Prior to the passage of the TCJA, the Company asserted that all of the undistributed foreign earnings of its foreign subsidiaries were considered indefinitely reinvested and accordingly, no deferred taxes were provided. Beginning in 2018, the TCJA provides a 100% deduction for dividends received from 10-percent owned foreign corporations by U.S. corporate shareholders, subject to a one-year • Global intangible low taxed income (GILTI): The TCJA creates a new requirement that certain income (i.e., GILTI) earned by foreign subsidiaries must be included currently in the gross income of the U.S. shareholder. The Company has made an accounting policy election to treat GILTI taxes as a current period expense. The Company files income tax returns for U.S. federal and various U.S. states, as well as various foreign jurisdictions. The liabilities for unrecognized tax benefits are carried in Other long-term liabilities on the consolidated balance sheets because the payment of cash is not anticipated within one year of the balance sheet date. The components of income before income taxes consisted of the following (in thousands): Year Ended December 31, 2019 2018 2017 Domestic $ 117,326 $ 88,014 $ 52,986 Foreign jurisdictions 7,506 5,937 3,959 Income before income taxes $ 124,832 $ 93,951 $ 56,945 Income tax provision consisted of the following (in thousands): Current Deferred Total Year ended December 31, 2019 U.S. Federal $ 10,577 $ 8,922 $ 19,499 U.S. state and local 1,761 987 2,748 Foreign jurisdictions 2,023 119 2,142 $ 14,361 $ 10,028 $ 24,389 Year ended December 31, 2018 U.S. Federal $ 13,372 $ 4,172 $ 17,544 U.S. state and local 1,912 (116 ) 1,796 Foreign jurisdictions 1,408 18 1,426 $ 16,692 $ 4,074 $ 20,766 Year ended December 31, 2017 U.S. Federal $ 10,953 $ 3,466 $ 14,419 U.S. state and local 2,032 51 2,083 Foreign jurisdictions 1,576 (255 ) 1,321 $ 14,561 $ 3,262 $ 17,823 The difference between the statutory rate for federal income tax and the effective income tax rate was as follows (in thousands): Year Ended December 31, 2019 2018 2017 Income tax expense calculated at the federal statutory rate $ 26,215 21.0 % $ 19,730 21.0 % $ 19,931 35.0 % Effect of: State and local taxes, net of federal benefit 2,021 1.6 1,978 2.1 1,606 2.8 Tax on foreign earnings, net of tax credits and deductions 593 0.4 172 0.2 (69 ) (0.1 ) Tax reform adjustment - - (195 ) (0.2 ) (3,418 ) (6.0 ) Write off of Deferred Tax Assets - - 509 0.6 - - Deferred credit (802 ) (0.6 ) (802 ) (0.9 ) (1,053 ) (1.9 ) Permanent items: Stock-based awards (3,011 ) (2.4 ) (651 ) (0.7 ) (179 ) (0.3 ) Tax reform - - 126 0.1 574 1.0 Deduction for FDII (2,283 ) (1.8 ) - - - - Other 964 0.8 687 0.7 483 0.9 State/Local tax credits (793 ) (0.6 ) (1,253 ) (1.3 ) (1,187 ) (2.1 ) Foreign tax credits - - (727 ) (0.8 ) - - Change in liability for uncertain tax positions 1,325 1.0 1,102 1.2 1,141 2.0 Other 160 0.1 90 0.1 (6 ) (0.0 ) $ 24,389 19.5 % $ 20,766 22.1 % $ 17,823 31.3 % Components of the Company’s net deferred tax asset (liability) included in the consolidated balance sheets consisted of the following at December 31 (in thousands): 2019 2018 Deferred tax assets: Accrued liabilities $ 12,229 $ 18,670 Depreciation and amortization 1,121 872 Foreign operating loss carryforward 447 248 U.S. state and local tax credits and carryforward 184 223 Other 96 41 Valuation allowance (755 ) (169 ) Total deferred tax assets 13,322 19,885 Deferred tax liabilities: Depreciation and amortization (21,787 ) (18,803 ) Prepaid expenses (808 ) (550 ) Advanced billings (3,147 ) - Other (53 ) (258 ) Total deferred tax liabilities (25,795 ) (19,611 ) Net deferred tax asset $ (12,473 ) $ 274 U.S. state and local tax credits noted above will expire in 2024 if not utilized. The Company has foreign operating loss carryforwards for which a deferred tax asset of $0.4 million has been established. The Company has a valuation allowance of $0.4 million against this deferred tax asset based upon its assessment that it is more likely than not that this amount will not be realized. The ultimate realization of this tax benefit is dependent upon the generation of sufficient operating income in the respective tax jurisdictions. Approximately 28% of the foreign net operating loss carryforwards can be utilized over an indefinite period whereas the remainder will expire at various times from 2020 to 2029 if not utilized. In May 2017, the Company acquired Nephrogenex which included deferred tax assets of $22.2 million, consisting of tax effected net operating losses in the amount of $13.5 million, tax effected capitalized research and development expenses of $8.5 million and tax effected federal tax credits of $0.2 million, and deferred tax liabilities of $0.1 million. In 2018, the Company disposed of approximately $7.4 million in deferred tax assets and reduced the deferred credit by approximately $6.9 million (net increase in tax expense of approximately $0.5 million) as a result of an IRC Section 382 ownership shift that occurred as a result of Cinven’s sales of the Company’s securities. The ownership shift resulted in a limitation in the ability to utilize the acquired tax attributes and resulted in the described asset write-off and reduction of the deferred credit. Annual activity related to the Company’s valuation allowance is as follows (in thousands): Year Ended December 31, 2019 2018 2017 Beginning Balance $ 169 $ 2,394 $ 987 Additions charged to expense 375 - - Additions due to asset acquisition 265 - 2,033 Reductions from utilization, reassessments and expirations (54 ) (2,225 ) 3 Remeasurement due to effect of tax reform - - (629 ) Ending Balance $ 755 $ 169 $ 2,394 A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2019 2018 2017 Beginning Balance $ 8,525 $ 6,890 $ 5,698 Increases in tax positions for prior years - - 5 Decreases in tax positions for prior years (888 ) (579 ) - Increases in tax positions for current year 2,081 2,214 1,187 Lapse in statute of limitations - - - Ending Balance $ 9,718 $ 8,525 $ 6,890 Interest and penalties associated with uncertain tax positions are recognized as components of Income tax provision in the consolidated statements of operations. There was no material change to tax-related interest and penalties during the years ended December 31, 2019, 2018 and 2017. As of December 31, 2019 and 2018, respectively, the Company has a liability for interest and penalties of $1.4 million and $1.0 million that is associated with related tax liabilities of $8.2 million and $7.2 million for uncertain tax positions. The Company operates in various foreign, state and local jurisdictions. The number of tax years for which the statute of limitations remains open for foreign, state and local jurisdictions varies by jurisdiction and is approximately four years (2015 through 2019). For federal tax purposes, the Company’s open tax years are 2016 through 2019. |
Commitments, Contingencies, and
Commitments, Contingencies, and Guarantees | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments, Contingencies, and Guarantees | 12. COMMITMENTS, CONTINGENCIES, AND GUARANTEES Legal Proceedings Medpace periodically becomes involved in various claims and lawsuits that are incidental to its business. Management believes, after consultation with counsel, that no matters currently pending would, in the event of an adverse outcome, have a material impact on the Company’s consolidated balance sheets, statements of operations, or cash flows for the years ended December 31, 2019, 2018 and 2017. Purchase Commitments The Company has several minimum purchase commitments for project related supplies totaling $11.9 million as of December 31, 2019. In return for the commitment, Medpace receives preferential pricing. The commitments expire at various times through 2026. |
Miscellaneous (Expense) Income,
Miscellaneous (Expense) Income, Net | 12 Months Ended |
Dec. 31, 2019 | |
Other Income And Expenses [Abstract] | |
Miscellaneous (Expense) Income, Net | 13. MISCELLANEOUS (EXPENSE) INCOME, NET Miscellaneous (expense) income, net consisted of the following (in thousands): Year Ended December 31, 2019 2018 2017 Net (loss) gain on foreign-currency transactions $ (581 ) $ 386 $ (1,004 ) Other (expense) income (282 ) 674 650 Miscellaneous (expense) income, net $ (863 ) $ 1,060 $ (354 ) |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. RELATED PARTY TRANSACTIONS Employee Loans The Company periodically extends short term loans or advances to employees, typically upon commencement of employment. Total receivables as a result of these employee advances of $0.2 million Management Fees In conjunction with the IPO, the Advisory Services Agreement with Cinven Capital Management (V) General Partner Limited (“Cinven”) expired. Subsequent to the IPO, the Company paid fees for director services provided by Cinven employees that were members of the Company’s Board of Directors and any related committees. The director fees were paid directly to Cinven in accordance with the Company’s non-employee director compensation policy. During the third quarter of 2018, Cinven sold its remaining shares of the Company’s common stock and all three members of the Company’s Board affiliated with Cinven subsequently resigned. During the years ended December 31, 2018 and 2017, the Company incurred director fees of Service Agreements Coherus BioSciences, Inc. (“Coherus”) and MX II Associates, LLC (“MXII”) The chief executive officer of the Company was a member of Coherus BioSciences, Inc.’s (“Coherus”) board of directors until his resignation in the first quarter of 2018. Coherus is no longer considered a related party as of the first quarter of 2018. During 2011 a related party of the Company in which the Company’s chief executive officer is the managing member, MXII, made an investment in Coherus. In early 2012 the Company made a $2.5 million investment in Coherus. Concurrent with the initial investment, MXII secured the exclusive rights for Medpace to perform Phase I through Phase III clinical trial work for certain Coherus’ “bio-similar” drug compounds executed through a MSA. During the year ended December 31, 2017, the Company recognized service revenue of $8.0 million from Coherus in the Company’s consolidated statements of operations. In addition, the company recognized Reimbursed out-of-pocket revenue and Reimbursed out-of-pocket expenses with Coherus in the consolidated statements of operations of $ 1.3 million during the year ended December 31, 201 7 . Xenon Pharmaceuticals, Inc. (“Xenon”) Certain executives and employees of the Company, including the chief executive officer, have held equity investments in Xenon, a clinical-stage biopharmaceutical company. In addition, a Medpace employee was a director of Xenon until May 2015. During the second quarter of 2017, the chief executive officer sold his entire equity position held in Xenon. Xenon is no longer considered to be a related party subsequent to this sale. During July 2015 the Company and Xenon entered into an amended MSA agreement for the Company to provide clinical trial related services. The Company recognized service revenue from Xenon of $0.6 million during the six months ended June 30, 2017 in the Company’s consolidated statements of operations. In addition, the Company recognized Reimbursed out-of-pocket revenue and Reimbursed out-of-pocket expenses with Xenon in the consolidated statements of operations of $0.1 million during the six months ended June 30, 2017. Cymabay Therapeutics, Inc. (“Cymabay”) Cymabay is a clinical-stage biopharmaceutical company developing therapies to treat metabolic diseases with high unmet medical need, including serious rare and orphan disorders. A Medpace employee was a member Cymabay’s board of directors from the first quarter of 2016 until his resignation in the first quarter of 2020. The Company and Cymabay entered into a MSA dated October 21, 2016. Subsequently, the Company and Cymabay have entered into several task orders for the Company to perform clinical trial related services. The Company recognized total revenue from Cymabay of $13.2 million and $10.8 million during the years ended December 31, 2019 and 2018 in the Company’s consolidated statements of operations. The Company recognized service revenue from Cymabay of $0.6 million during the year ended December 31, 2017 in the Company’s consolidated statements of operations. As of December 31, 2019 and 2018, respectively, the Company had Advanced billings from Cymabay of $1.6 million and less than $0.1 million recorded in the consolidated balance sheets. LIB Therapeutics LLC and subsidiaries (“LIB”) Certain executives and employees of the Company, including the chief executive officer, are members of LIB’s board of managers and/or have equity investments in LIB. The Company entered into a MSA dated November 24, 2015 with LIB, a company that engages in research, development, marketing and commercialization of pharmaceutical drugs. Subsequently, the Company and LIB have entered into several task orders for the Company to perform clinical trial related services. The Company recognized total revenue from LIB of $2.0 million and $3.7 million during the years ended December 31, 2019 and 2018 in the Company’s consolidated statement of operations. The Company recognized service revenue from LIB of $1.4 million during the year ended December 31, 2017 in the Company’s consolidated statements of operations. As of December 31, 2019 and 2018, the Company had, from LIB, Advanced billings of $0.5 million and $0.3 million in the consolidated balance sheets, respectively. In addition, the Company had Accounts receivable and unbilled, net from LIB of $0.3 million and $1.0 million in the consolidated balance sheets at December 31, 2019 and 2018, respectively. CinRX Pharma and subsidiaries (“CinRx”) Certain executives and employees of the Company, including the chief executive officer, are members of CinRx’s board of managers and/or have equity investments in CinRx, a biotech company. The Company and CinRx have entered into several task orders for the Company to perform clinical trial related services. During the years ended December 31, 2019 and 2018, the Company recognized total revenue from CinRx of $3.7 million and $0.5 million in the Company’s consolidated statements of operations. During the year ended December 31, 2017, the Company recognized service revenue from CinRx of $0.4 million in the Company’s consolidated statements of operations. As of December 31, 2019 and 2018, the Company had Advanced billings from CinRx of $0.9 million and $0.1 million in the consolidated balance sheets, respectively. As of December 31, 2019 and 2018 the Company had Accounts receivable and unbilled, net from CinRx of $0.2 million and $0.4 million in the consolidated balance sheets. The Summit, a Dolce Hotel (“The Summit”) The Summit Hotel, located on the Medpace campus, is owned by the chief executive officer, and managed by an unrelated hospitality management entity. Medpace incurs travel lodging and meeting expenses at The Summit. During the years ended December 31, 2019 and 2018, Medpace incurred expenses of $0.6 million and $0.4 million at The Summit. Medpace Investors, LLC (“MPI”) MPI is a noncontrolling shareholder and related party of Medpace Holdings, Inc. MPI is owned and managed by employees of the Company. The chief executive officer of Medpace is also the manager and majority unit holder of MPI. The Company acted as a paying agent for MPI with taxing authorities principally in instances when employee tax payments or remittance of withholdings related to equity compensation are required. Refer to Note 9 of the Notes to Consolidated Financial Statements for details of the Tender Offer transaction. Purchase of Real Estate Properties In December 2016, the Company entered into a purchase agreement for four parcels of real estate property that are closely situated to the Medpace campus in Cincinnati, Ohio, from AT Redevelopment Company, LLC, which is wholly-owned by the Company’s chief executive officer. The purchase price of the real estate property was $0.4 million as determined by an independent third party broker's opinion of value. The transaction closed on January 11, 2017. Leased Real Estate Headquarters Lease The Company has entered into operating leases for its corporate headquarters and a storage space facility with an entity that is wholly owned by the Company’s chief executive officer. The Company has evaluated its relationship with the related party and concluded that the related party is not a variable interest entity because the Company has no direct ownership interest or relationship other than the leases. The lease for headquarters is for an initial term of twelve years through November 2022 with a renewal option for one 10-year term at prevailing market rates. The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the properties. Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index. U nder ASC 842, operating lease cost recognized In 2018, Medpace, Inc. entered into a multi-year lease agreement governing future occupancy of additional office space in Cincinnati, Ohio. The lease expires in 2040 and the Company has two 10-year options to extend the term of the lease. ASC 842 – Operating Leases The Company entered into two multi-year lease agreements governing the occupancy of space of two buildings in Cincinnati, Ohio with an entity that is wholly owned by the Company’s chief executive officer and certain members of his immediate family. The Company assumed occupancy in 2012 and the leases expire in 2027 with the Company having one 10-year option to extend the lease term. The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property. Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index. Under ASC 842, the Company has determined that the leases are operating leases. Operating lease cost recognized for the year ended December 31, 2019 is $ 3.6 million. The lease cost was allocated between Total direct costs and Selling, general and administrative in the consolidated statements of operations. The Operating lease right-of-use assets at December 31, 2019 were $ 21.9 million in the consolidated balance sheets. The current and long-term portions of the lease liabilities at December 31, 2019 were $ 2.3 million and $ 19.7 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the consolidated balance sheets. ASC 840 - Deemed Assets and Deemed Landlord Liabilities In accordance with the accounting guidance related to leases, the Company was deemed in substance to be the owner of the property during the construction phase and at completion. Accordingly, the Company reflected the buildings and related liabilities as deemed assets from landlord building construction in Property and equipment, net, Other current liabilities, and Deemed landlord liabilities, respectively, on the consolidated balance sheets. The deemed assets were being fully depreciated, on a straight line basis, over the 15-year term of the lease. Deemed landlord liabilities are recorded at their net present value when the Company enters into qualifying leases and are reduced as the Company makes periodic lease payments on the properties. Accretion expense was being recorded over the term of the lease as a component of Interest expense, net in the Company’s consolidated statements of operations. The Company paid $ 3.8 million Travel Services The Company incurs expenses for travel services for company executives provided by a private aviation charter company that is owned by the chief executive officer and the executive vice president of operations of the Company (“private aviation charter”). The Company may contract directly with the private aviation charter for the use of its aircraft or indirectly through a third party aircraft management and jet charter company (the “Aircraft Management Company”). The travel services provided are primarily for business purposes, with certain personal travel paid for as part of the executives’ compensation arrangements. The Aircraft Management Company also makes the private aviation charter aircraft available to third parties. The Company incurred travel expenses of $1.2 million, $1.3 million and $1.1 million during the years ended December 31, 2019, 2018 and 2017, respectively. These travel expenses are recorded in Selling, general and administrative in the Company’s consolidated statements of operations. As of December 31, 2019 and 2018, the Company had Accounts payable due to Aircraft Management Company of less than $0.1 million and $0.2 million in the consolidated balance sheets, respectively. |
Cash Flow Statement - Supplemen
Cash Flow Statement - Supplemental Information | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Cash Flow Statement - Supplemental Information | 15. CASH FLOW STATEMENT – SUPPLEMENTAL INFORMATION During the year ended December 31, 2017, the Company engaged in the following significant non-cash investing and financing activities: • Acquired net assets totaling $0.7 million consisting of net Deferred tax assets of $21.1 million, offset by net Deferred tax liabilities of $0.1 million and deferred credits within Other long term liabilities of $20.3 million in exchange for Accounts receivable and unbilled, net of $0.6 million and Other assets of $0.1 million. |
Entity Wide Disclosures
Entity Wide Disclosures | 12 Months Ended |
Dec. 31, 2019 | |
Entity Wide Disclosures [Abstract] | |
Entity Wide Disclosures | 16. ENTITY WIDE DISCLOSURES Operations By Geographic Location The Company conducts operations in North America, Europe, Africa, Asia-Pacific and Latin America through wholly-owned subsidiaries and representative sales offices. The Company attributes revenue to geographical locations based upon the location of the contracting entity. For the years ended December 31, 2019 and 2018, total revenue attributable to the U.S. represented approximately 95% and 97%, respectively, of total consolidated total revenue. The following table summarizes property and equipment, net by geographic region and is further broken down to show countries which account for 10% or more of total as of December 31, if any (in thousands): 2019 2018 Property and equipment, net: United States $ 25,603 $ 38,609 Europe Belgium 10,045 6,014 Other 5,728 5,500 Total Europe 15,773 11,514 Asia-Pacific 5,671 1,930 Other 245 202 Total property and equipment, net $ 47,292 $ 52,255 Revenue by Category The following table disaggregates the Company’s revenue by major source (in thousands): Years Ended December 31, 2019 2018 Therapeutic Area Oncology $ 256,766 $ 189,056 Other 222,514 163,983 Metabolic 138,650 124,837 Cardiology 91,258 95,213 AVAI 86,390 77,271 Central Nervous System 65,391 54,229 Total revenue $ 860,969 $ 704,589 In the current year and for all periods presented, the revenue associated with medical device projects, previously a separate therapeutic area, has been included in the respective therapeutic area that best aligns with the therapeutic focus of the medical device project and represents how management evaluates disaggregated revenue in its internal reporting. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | 17. QUARTERLY FINANCIAL DATA (unaudited) The following table summarizes the Company's unaudited quarterly results of operations (in thousands, except per share data): 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Revenue, net $ 200,741 $ 214,104 $ 216,238 $ 229,886 Total direct costs 145,703 150,312 152,070 167,187 Income from operations 25,895 35,259 29,991 36,118 Net income 19,198 27,455 23,977 29,813 Net income per share attributable to common shareholders - Basic $ 0.54 $ 0.76 $ 0.67 $ 0.82 Net income per share attributable to common shareholders - Diluted $ 0.51 $ 0.73 $ 0.63 $ 0.78 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Revenue, net $ 163,077 $ 170,144 $ 179,253 $ 192,115 Total direct costs 117,254 116,676 123,996 131,133 Income from operations 20,119 23,345 26,918 30,666 Net income 14,551 16,568 19,305 22,761 Net income per share attributable to common shareholders - Basic $ 0.41 $ 0.46 $ 0.54 $ 0.64 Net income per share attributable to common shareholders - Diluted $ 0.40 $ 0.45 $ 0.52 $ 0.61 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Share Repurchases | Share Repurchases In November 2017, approved an agreement to repurchase 2,000,000 shares of the Company’s common stock from Cinven in connection with the Secondary Offering (as described below) for aggregate consideration of approximately $60.3 million, representing a purchase price of $30.16 per share. In August 2017, the Disinterested Directors of the Company approved a stock repurchase agreement with Medpace Limited Partnership, a Guernsey limited partnership (the “Limited Partnership” acting through its general partner, Medpace GP Limited, a Guernsey company, the “General Partner” and, the Limited Partnership acting through the General Partner, “Cinven”), pursuant to which the Company repurchased 2,000,000 shares of the Company’s common stock from Cinven for aggregate consideration of approximately $60.5 million, representing a purchase price of $30.27 per share. The Company funded the repurchase with cash on hand and $40.0 million in borrowings under our Prior Senior Secured Revolving Credit Facility. In April 2017, the Board of the Company authorized a share repurchase program with an authorized repurchase level of $50.0 million. The share repurchase program was cancelled in the fourth quarter of 2017. Repurchases under the repurchase program took place in the open market or negotiated transactions, at the discretion of the Company’s management. During the year ended December 31, 2017, the Company repurchased 1,342,786 shares of its outstanding common stock for $34.7 million under this share repurchase program. The Company has elected to constructively retire all repurchased shares with all amounts paid in excess of Common stock par value reflected within Accumulated deficit in the Company’s consolidated balance sheets, except for 200,000 shares, which are reflected within treasury stock in the Company’s consolidated balance sheets. In the first quarter of 2018, the Board of the Company authorized a share repurchase program with an authorized repurchase level of $50.0 million. There have been no share repurchases under this program. |
Secondary Offerings | Secondary Offerings During the year ended December 31, 2018, Cinven sold a total of 16,399,997 shares of the Company’s common stock as part of multiple secondary offerings. The Company incurred professional fees in connection with the secondary offerings of $0.7 million during the year ended December 31, 2018. The fees are included within operating expenses in the accompanying consolidated statement of operations. As of August 27, 2018, Cinven does not beneficially own any shares of the Company’s outstanding common stock. The Company did not sell any shares in or receive any proceeds from the secondary offerings. During the year ended December 31, 2017, Cinven sold a total of 4,600,000 shares of the Company’s common stock as part of a secondary offering. The Company incurred professional fees in connection with the secondary offering of $0.4 million during year ended December 31, 2017. The fees are included within operating expenses in the accompanying consolidated statement of operations. |
Principles of Consolidation and Presentation | Principles of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and include the accounts and operations of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Significant items that are subject to management estimates and assumptions include revenue, net, allowances for doubtful accounts, acquisition purchase price allocations, long-lived asset impairment and useful lives, exit liabilities, stock-based compensation, uncertain income tax positions and contingencies. |
Reportable Segments | Reportable Segments The Company emphasizes its full service outsourcing model, providing services focused on the development, management and execution of clinical trials. As part of this full service approach, the Company utilizes centralized systems, customer interface technology, support functions and processes that cross service offerings and align resources to deliver efficient clinical trial services. Given the full service approach, the chief executive officer, who is the chief operating decision maker (“CODM”) assesses the allocation of resources based on key metrics including revenue, backlog, and net awards by service offering and consolidated profitability and consolidated cash flows. Based on the Company’s full service model, internal management and reporting structure, and key metrics used by the CODM to make resource allocation decisions, management has determined that the Company’s operations consist of a single operating segment. Therefore, results of operations are presented as a single reportable segment. |
Foreign Currencies | Foreign Currencies Assets and liabilities recorded in foreign currencies on foreign subsidiary financial statements are translated at the exchange rate on the balance sheet date, while equity accounts are translated at historical exchange rates. Revenue and expenses are recorded at average rates of exchange during the year. Translation adjustments are recorded to Accumulated other comprehensive loss in the consolidated statements of shareholders’ equity and consolidated statements of comprehensive income. Separately, net realized gains and losses on foreign currency transactions are included in Miscellaneous (expense) income, net, on the consolidated statements of operations. Foreign currency transactions resulted in a net (loss)/gain of ($0.6) million, $0.4 million, and ($1.0) million during the years ended December 31, 2019, 2018, and 2017, respectively. |
Revenue Recognition | Revenue Recognition The Company generally enters into contracts with customers to provide services ranging in duration from a few months to several years. The contract terms generally provide for payments based on a fixed fee or unit-of-service arrangement. The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers, which the Company adopted on January 1, 2018 using the modified retrospective implementation method. Revenue on contracts is recognized when or as the Company satisfies the contract performance obligations, at the amount that reflects the Company’s cumulative progress toward delivery of the performance obligation. This progress assessment is applied to the amount of consideration to which the Company expects to be paid for delivery of the performance obligation. The Company’s performance obligations are generally satisfied over time and related revenue is recognized as services are provided to meet these obligations. Contract Assumptions An arrangement is accounted for as a contract within the scope of ASC 606 when the Company and its customers approve the contract, are committed to perform their respective obligations, each party can identify its rights regarding the goods or services to be transferred, commercial substance is present, and it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. For the Company’s services to meet this criteria, contracts generally need to be written, pending regulatory hurdles required to commence work must be cleared, the study protocol must be completed, the customer must have adequate funding or reasonable path to funding to execute the contracted portion of the study, and the study must be actively moving forward. Once these criteria have been met, it is deemed that the Company and its customers are committed to perform their respective obligations. Depending on the timing of when these criteria are met, revenue recognition may vary significantly on a period over period basis. Accounting for contracts performed over a period of time involves the use of various assumptions to estimate total contract revenue and costs. The Company estimates expected costs to complete a contract and recognizes contracted revenue over the life of the contract as those costs are incurred. Cost estimates are based on a detailed project budget and are developed based on many variables, including, but not limited to, the scope of the work, the complexity of the study, the participating geographic locations and the Company’s historical experience. To assist with the estimation of costs expected at completion over the life of a project, regular contract reviews are performed in which performance to date is compared to the most current estimate to complete assumptions. The reviews include an assessment of costs incurred to date compared to expectations based on budget assumptions and other circumstances specific to the project. The total estimated costs necessary to complete is updated and any revisions to the existing cost estimate results in cumulative adjustments to the amount of revenue recognized in the period in which the revisions are identified. In the case of cost estimates related to activities legally contracted as reimbursable in nature, including but not limited to investigator fee activity, these estimates also influence the Company’s assumed contract value and assumed remaining performance obligations. Because of the uncertainties inherent in estimating the costs necessary to fulfill contractual obligations, it is possible that estimates may change in the near term, resulting in a material change in revenue reported. Contracts generally provide for pricing modifications upon scope of work changes. The Company recognizes revenue, at an amount to which it expects to be entitled, related to work performed in connection with scope changes when the underlying services are performed and a binding contractual commitment has been established with the customer. If the Company’s customers do not agree to contract changes upon changes in the Company’s scope of work, the Company could be exposed to cost overruns and reduced contract profitability. Costs are not deferred in anticipation of contracts being awarded or amendments being finalized, but are expensed as incurred. Most contracts are terminable by the customer, either immediately or according to advance notice terms specified within the contracts. These contracts require payment of fees for services rendered through the date of termination and may require payment for subsequent services necessary to conclude the study or close out the contract. Final settlement amounts are agreed to with the customer based on remaining work to be performed. These amounts are included in revenue when the Company believes the amount can be estimated reliably and its realization is probable. In evaluating the probability of recognition, the Company considers the contractual basis for the settlement amount and the objective evidence available to support the amount. Certain contracts contain volume rebate arrangements with our customers that provide for rebates if certain specified spending thresholds are met. These obligations are considered as a reduction in revenue when it appears probable that the arrangement thresholds will be met, which can be at contract inception. Total revenue is presented net of rebates of $6.2 million, $1.2 million and $0.2 million in the consolidated statements of operations during the years ended December 31, 2019, 2018 and 2017, respectively. The Company occasionally enter s into incentive fee arrangements with customers that provide for additional compensation if certain defined contractual milestones or performance thresholds are met. These additional fees are included in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee and when achievement of the incentive milestone is deemed probable. These estimates are based on anticipated performance, the Company’s best judg ment at the time or ultimately, upon achievement of the threshold or milestone. The Company records revenue net of any tax assessments by governmental authorities that are imposed and concurrent with specific revenue generating transactions. Performance Obligations Substantially all of the Company’s contracts consist of a single performance obligation, as the promise to transfer the individual services described in the contracts are not separately identifiable from other promises in the contracts, and therefore not distinct. Revenue recognition is determined by assessing the progress of performance completed or delivered to date compared to total services to be delivered under the terms of the arrangement. The measures utilized to assess progress on the satisfaction of performance are specific to the performance obligation identified in the contract. For the majority of the Company’s contract performance obligations, it utilizes the input method of cost to cost to measure progress, as the Company has determined that it is the most consistent measure of progress among contract tasks and represents the most faithful depiction of the transfer of services over the contract life. Under this method, the Company determines cost incurred to date for the services it provides compared to the total estimated costs at completion. For certain other contractual performance obligations, the Company has determined that an output method is the best measure of progress. These relate to certain unitized contracts, and the Company recognizes revenue in the period in which the unit is delivered compared to total contracted units. On December 31, 2019 and 2018, the Company had approximately $1.4 billion and $1.1 billion of performance obligations remaining to be performed for active projects. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents and accounts receivable. The cash and cash equivalent balances are held and maintained with financial institutions with reputable credit ratings and, consequently, the Company believes that such funds are subject to minimal credit risk. The Company generally does not require collateral or other securities to support customer receivables. In the years ended December 31, 2019, 2018 and 2017, credit losses have been immaterial and within management’s expectations. At December 31, 2019 and 2018, there were no customers accounting for more than 10% of the Company’s accounts receivable. |
Costs and Expenses | Costs and Expenses The Company incurs costs associated with service delivery including direct labor and related employee benefits, laboratory supplies, and other expenses. These costs are recorded in Direct service costs, excluding depreciation and amortization as a component of Total direct costs in the accompanying consolidated statements of operations. In addition, the Company incurs expenses on behalf of its customers for various project expenditures including, but not limited to, investigator site payments, travel, meetings, printing, and shipping and handling fees that are reimbursed by its customers at cost. These costs are included in Reimbursable out-of-pocket expenses as a component of Total direct costs in the accompanying consolidated statements of operations. Total direct costs are expensed as incurred and are not deferred in anticipation of contracts being awarded or finalization of changes in scope. Selling, general and administrative includes administrative payroll and related employee benefits, sales and marketing expenses, administrative travel, and other expenses not directly related to service delivery. Rent, utilities, supplies, and software license expenses are allocated between Total direct costs, and Selling, general and administrative based on the estimated contribution among service delivery and support function efforts on a percentage basis. Depreciation and amortization is reported separately in the accompanying consolidated statements of operations. Costs of sales and marketing activities not subject to recovery pursuant to customer contracts, such as feasibility assessments and negotiation of contracts, are expensed as incurred and recorded as a component of Selling, general and administrative in the accompanying consolidated statements of operations. Advertising expenses are recorded as a component of Selling, general and administrative expenses in the accompanying consolidated statements of operations. Total advertising expenses of $0.7 million, $0.8 million and $0.6 million Prior to the adoption of Accounting Standard Update No. 2014-09 ‘‘Revenue from Contracts with Customers”, fees paid to investigators and other disbursements in which the Company acts as an agent on behalf of the customer were recorded net in the consolidated statements of operations with no impact on the Company’s revenue or expenses. Funds received in advance of study expenditures were recorded as Pre-funded study cost liabilities on the consolidated balance sheets. Any pre-funded amounts remaining at the conclusion of a study were returned to the client. Pre-funded study cost disbursements of $138.7 million |
Income Taxes | Income Taxes The Company’s consolidated U.S. federal income tax return is comprised of its U.S. subsidiaries and one of its foreign branches located in Korea. All foreign subsidiaries of the Company file tax returns in their local jurisdictions. The Company provides for income taxes on all transactions that have been recognized in the consolidated financial statements in accordance with accounting guidance governing income tax accounting. Accordingly, the impact of changes in income tax laws on deferred tax assets and deferred tax liabilities are recognized in net earnings in the period during which such changes are enacted. The Company records deferred tax assets and liabilities based on temporary differences between the financial statement bases and tax bases of assets and liabilities. Deferred tax assets are recorded for tax benefit carryforwards using tax rates anticipated to be in effect in the year in which the temporary differences are expected to reverse. If it does not appear more likely than not that the full value of a deferred tax asset will be realized, the Company records a valuation allowance against the deferred tax asset, with an offsetting charge to the Company’s income tax provision or benefit. The value of the Company’s deferred tax assets is estimated based on, among other things, the Company’s ability to generate a sufficient level of future taxable income. In estimating future taxable income, the Company has considered both positive and negative evidence, such as historical and forecasted results of operations, and has considered the implementation of prudent and feasible tax planning strategies. The Company’s current accounting position is that unremitted foreign earnings are indefinitely reinvested. Therefore, the Company has not recorded deferred foreign withholding taxes on the unremitted foreign earnings. Refer to Note 11 for further information regarding this assertion. The Company follows accounting guidance related to accounting for uncertainty in income taxes which requires significant judgment in determining what constitutes an individual tax position as well as assessing the possible outcome of each tax position. Changes in judgments as to recognition or measurement of tax positions can materially affect the estimate of the effective tax rate, and, consequently, the Company’s consolidated financial results. The Company considers many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. In addition, the calculation of tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions. The Company determines its liability for uncertain tax positions globally. If the payment of these amounts ultimately proves to be unnecessary, the reversal of liabilities would result in tax benefits being recognized in the period when it is determined the liabilities are no longer necessary. If the calculation of the liability related to uncertain tax positions proves to be more or less than the ultimate assessment, a tax expense or tax benefit would result. Interest and penalties associated with uncertain tax positions are recognized as components of the Company’s Income tax provision. |
Research and Development Credits | Research and Development Credits Research and development credits are available to the Company under tax laws in certain jurisdictions, based on qualifying research and development spend as defined under those tax laws. Certain tax jurisdictions provide refundable credits that are not wholly dependent on the Company’s income tax status or income tax position. In these circumstances the benefit of the credits is recorded as a reduction of operating expense. When they are wholly dependent upon the Company’s income tax position, research and development credits are recognized as a reduction of income tax expense. |
Stock-Based Compensation | Stock-Based Compensation The Company has stock-based employee compensation plans for which it incurs compensation expense. Equity Awards In connection with the Company's initial public offering (IPO), the Board approved the formation of the 2016 Incentive Award Plan (the “2016 Plan”), which replaced our 2014 Equity Incentive Plan (the “2014 Plan”). The 2016 Plan provides for long-term equity incentive compensation for key employees, officers and non-employee directors. A variety of discretionary awards (collectively, the “Awards”) for employees and non-employee directors are authorized under the 2016 Plan, including vested common shares, stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), or other cash based or stock dividend equivalent awards. The vesting of such awards may be conditioned upon either a specified period of time or the attainment of specific performance goals as determined by the administrator of the 2016 Plan. The option price and term are also subject to determination by the administrator with respect to each grant. Option prices are generally expected to be set at the market price of our common stock at the date of grant and option terms are not expected to exceed ten years. All outstanding Awards under the 2016 Plan are equity classified awards. The Company created the 2014 Plan, providing for the future issuance of vested shares, stock options, RSAs and RSUs in Medpace Holdings, Inc.’s common stock (the “2014 Plan Awards”). The 2014 Plan Awards were subject to either equity or liability-classification pursuant to the terms of the participant’s award agreement and the 2014 Plan based on accounting guidance which governs such transactions. All outstanding Awards under the 2014 Plan are equity classified awards. Stock-based compensation expense for both the 2016 Plan and 2014 Plan is calculated using the fair value method on the grant date. The Company expenses stock-based compensation using a graded vesting schedule. Stock-based compensation expense is allocated between Total direct costs, and Selling, general and administrative in the consolidated statements of operations based on the underlying classification and scope of work for the employees receiving the Awards. |
Net Income Per Share | Net Income Per Share Basic and diluted earnings or loss per share (“EPS”) are computed using the two-class method, which is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. The Company’s RSAs are considered participating securities because they are legally issued at the date of grant and holders are entitled to receive non-forfeitable dividends during the vesting term. The computation of diluted EPS includes additional common shares, such as unvested RSUs and stock options with exercise prices less than the average market price of the Company’s common stock during the period (“in-the-money options”), which would be considered outstanding under the treasury stock method. The treasury stock method assumes that additional shares would have to be issued in cases where the exercise price of stock options is less than the value of the common stock being acquired because the cash proceeds received from the stock option holder would not be sufficient to acquire that same number of shares. The Company does not compute diluted EPS in cases where the inclusion of such additional shares would be anti-dilutive in effect. The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2019, 2018 and 2017 (in thousands, except for earnings per share): Year Ended December 31, 2019 2018 2017 Weighted-average shares: Common shares outstanding 35,881 35,547 39,056 RSAs 100 142 90 Total weighted-average shares 35,981 35,689 39,146 Earnings per common share—Basic Net income $ 100,443 $ 73,185 $ 39,122 Less: Undistributed earnings allocated to RSAs 279 291 90 Net income available to common shareholders—Basic $ 100,164 $ 72,894 $ 39,032 Net income per common share—Basic $ 2.79 $ 2.05 $ 1.00 Basic weighted-average common shares outstanding 35,881 35,547 39,056 Effect of diluted shares 1,695 1,365 783 Diluted weighted-average shares outstanding 37,576 36,912 39,839 Net income per common share—Diluted $ 2.67 $ 1.97 $ 0.98 For the years ended December 31, 2019, 2018 and 2017, the computation of diluted EPS excludes the effect of (in thousands) 248, 121 and 63 stock options, respectively, due to each respective period’s average fair value of the Company’s common stock not exceeding the exercise prices. |
Fair Value Measurements | Fair Value Measurements The Company follows accounting guidance related to fair value measurements that defines fair value, establishes a framework for measuring fair value, and establishes a hierarchy for inputs used in measuring fair value. This hierarchy maximizes the use of “observable” inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy specifies three levels based on the inputs, as follows: Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities. Level 2: Valuations based on directly observable inputs or unobservable inputs corroborated by market data. Level 3: Valuations based on unobservable inputs supported by little or no market activity representing management’s determination of assumptions of how market participants would price the assets or liabilities. The fair value of financial instruments such as cash and cash equivalents, accounts receivable and unbilled, net, accounts payable, accrued expenses, and advanced billings approximate their carrying amounts due to their short term maturities. The Company does not have any recurring fair value measurements as of December 31, 2019. There were no transfers between Level 1, Level 2, or Level 3 during the years ended December 31, 2019, 2018 and 2017. |
Cash and Cash Equivalents, including Restricted Cash | Cash and Cash Equivalents, including Restricted Cash Cash and cash equivalents, including restricted cash, are invested in demand deposits and money market funds, all of which have an original maturity of three months or less. Restricted cash consists of customer funds received in advance and subject to specific restrictions, as well as amounts placed in escrow for contingent payments resulting from acquisitions or other contractual arrangements. |
Accounts Receivable and Unbilled, Net | Accounts Receivable and Unbilled, Net Accounts receivable represent amounts due from the Company’s customers who are concentrated primarily in the pharmaceutical, biotechnology, and medical device industries. Unbilled services represent revenue recognized to date that is currently not billable to the customer pursuant to contractual terms. In general, amounts become billable upon the achievement of negotiated contractual events or in accordance with predetermined payment schedules. Amounts classified to unbilled services are those billable to customers within one year from the respective balance sheet date. The Company grants credit terms to its customers prior to signing a service contract and monitors the creditworthiness of its customers on an ongoing basis. The Company maintains an allowance for doubtful accounts based on specific identification of accounts receivable that are at risk of not being collected. Uncollectible accounts receivable are written off only after all reasonable collection efforts have been exhausted. Moreover, in some cases the Company requires advance payment from its customers for a portion of the study contract price upon the signing of a service contract. These advance payments are deferred and recognized as revenue as services are performed. |
Inventory | Inventory Inventory, which consists primarily of laboratory supplies, is valued at the lower of cost or market. Inventory is stated at purchased cost using the first-in, first out (FIFO) cost method. The inventory balance is included in Prepaid expenses and other current assets in the consolidated balance sheets. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost. Depreciation is provided on the straight-line method at rates adequate to allocate the cost of the applicable assets over their estimated useful lives, which is three to five years for computer hardware, software, phone, and medical imaging equipment, five to seven years for furniture and fixtures and other equipment, and thirty to forty years for buildings. The Company capitalizes costs of computer software developed for internal use and amortizes these costs on a straight-line basis over the estimated useful life, not to exceed three years. Leasehold improvements and deemed assets from landlord building construction are capitalized and amortized on a straight-line basis over the shorter of the estimated useful life of the improvement or the associated remaining lease term. Repairs and maintenance are expensed as incurred. |
Leases | Leases The Company enters into contracts to lease facilities and equipment to be used in its operations. At contract inception, the Company determines whether a contract contains a lease within the scope of Accounting Standard Codification Topic 842, Leases (“ASC 842”), and determines the appropriate classification of the lease as either operating or finance. Contracts containing operating leases are recorded on the consolidated balance sheets within Operating lease right-of-use (“ROU”) assets, Other current liabilities, and Operating lease liabilities. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term as of the lease commencement date. In addition, operating ROU assets also include lease payments made and exclude lease incentives and initial direct costs incurred. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term within Total direct costs and Selling, general, and administrative expenses. Variable lease costs are primarily related to adjustments for inflation, common area maintenance and property tax and are recognized within Total direct costs and Selling, general and administrative expenses. Contracts containing finance leases are recognized initially in the same manner as Operating l ease ROU assets and liabilities; however , they are recorded on the consolidated balance sheets within Property and equipment, net, Other current liabilities, and Other long-term liabilities. Finance lease assets are subsequently amortized on a straight line basis over the lease term within Depreciation expense, while the lease liability is accreted within Interest expense, net utilizing the discount rate determined at lease commencement and reduced by periodic lease payments over the lease term. Currently, the Company does not have any finance leases. The discount rate utilized in determining the present value of future payments for both operating and finance leases, unless implicit in the lease contract, is determined based on the Company’s collateralized incremental borrowing rate based on the information available at lease commencement. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option as determined at lease commencement. Many of our lease agreements have both lease and non-lease components, which the Company has elected to treat as a single lease component for recognition purposes. The Company may enter into short-term leases (leases with a lease term of less than one year), which it has elected not to capitalize as assets and liabilities on the consolidated balance sheets, but instead recognizes lease payments within Total direct costs and Selling, general, and administrative expenses on a straight line basis over the lease term. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations. The carrying value of goodwill is reviewed at least annually for impairment, or as indicators of potential impairment are identified, at the reporting unit level. The reporting units are Phase I-IV clinical research services and Laboratories as of December 31, 2019. The Company performs its annual impairment tests during the fourth quarter each year, comparing the fair value of each of our reporting units with its carrying amount, inclusive of goodwill. A goodwill impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. Fair value is estimated using a combination of the income approach, a discounted cash flow analysis, and the market approach, utilizing the guideline company method. There was no indication of impairment related to goodwill based on the fourth quarter 2019 assessment. Intangible Assets The Company has an indefinite lived intangible asset related to its trade name. The carrying value of the trade name asset is reviewed at least annually for impairment, or as indicators of potential impairment are identified. The Company performs its annual impairment test in the fourth quarter each year in conjunction with its annual assessment of goodwill. The assessment consists of comparing the carrying value of the indefinite lived intangible asset to its estimated fair value, utilizing the relief from royalty method, an income approach valuation. There was no indication of impairment related to the trade name asset based on the fourth quarter 2019 assessment. Finite-lived intangible assets consist mainly of the value assigned to customer relationships and developed technologies. Finite-lived intangible assets are amortized straight-line or using an accelerated method over their estimated useful lives, which range in term from five to fifteen years. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, primarily property and equipment and finite-lived intangible assets, are reviewed for impairment and the reasonableness of the estimated useful lives whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable or that a change in useful life may be appropriate. Recoverability for long-lived assets is determined by comparing the forecasted undiscounted cash flows of the operation to which the assets relate to the carrying amount of the assets. If the undiscounted cash flows are less than the carrying amount of the assets, then the Company reduces the carrying value of the assets to estimated fair values, which are primarily based upon forecasted discounted cash flows. Fair value of long-lived assets is determined based on a combination of discounted cash flows and market multiples. |
Advanced Billings | Advanced Billings Advanced billings represents cash received from customers, or billed amounts per an agreed upon payment schedule, in advance of services being performed or revenue being recognized. |
Deemed Landlord Liabilities | Deemed Landlord Liabilities Deemed landlord liabilities are recorded at their net present value when the Company enters into qualifying leases and are reduced as the Company makes periodic lease payments on the properties. |
Other Current Liabilities and Other Long-Term Liabilities | Other Current Liabilities and Other Long-Term Liabilities Deferred credit represents tax credits recognized initially in conjunction with the Nephrogenex asset acquisition that will be recognized within Income tax provision in proportion to the realization of the deferred tax assets and federal tax credits prospectively. Asset retirement obligations, to the extent they exist, are recorded at their net present value and accreted to the Company’s estimate of liability at the time the obligation would be required to be satisfied. |
Recently Adopted Accounting Standards and Issued Accounting Pronouncements | Recently Adopted Accounting Standards In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-01, Business Combinations. The standard changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. Under the new guidance, an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set is not a business. If it’s not met, the entity then evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years. The Company, as permitted, early adopted ASU 2017-01 using the prospective method in the second quarter of 2017. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting • Income taxes - Upon adoption of this standard, all excess tax benefits and tax deficiencies (including tax benefits of dividends, if distributed, on share-based payment awards) are recognized as income tax expense or benefit in the statement of operations. The tax effects of exercised or vested awards are treated as discrete items in the reporting period in which they occur. As a result, the Company recognized discrete adjustments to income tax expense for the year ended December 31, 2017 of less than $0.1 million related to excess tax benefits. The Company also recognizes excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. The Company applied the prospective adoption approach for any unrecognized excess tax benefits beginning in 2017, which did not result in any cumulative-effect adjustment upon adoption. Prior periods have not been adjusted • Forfeitures - Prior to adoption, share-based compensation expense was recognized on a straight line basis, net of estimated forfeitures, such that expense was recognized only for share-based awards that were expected to vest. A forfeiture rate was estimated annually and revised, if necessary, in subsequent periods if actual forfeitures differed from initial estimates. Upon adoption, the Company no longer applies a forfeiture rate and instead accounts for forfeitures as they occur. The Company applied the modified retrospective adoption approach beginning in 2017 and booked an immaterial cumulative-effect adjustment to additional paid-in-capital and retained earnings within Shareholders’ Equity. Prior periods have not been adjusted. • Statements of Cash Flows - The Company historically accounted for excess tax benefits on the consolidated statements of cash flows as a financing activity. Upon adoption of this standard, excess tax benefits are classified along with other income tax cash flows as an operating activity. The Company elected to adopt this portion of the standard on a prospective basis beginning in 2017. Prior periods have not been adjusted. • Earnings Per Share - The Company uses the treasury stock method to compute diluted earnings per share, unless the effect would be anti-dilutive. Under this method, the Company is no longer required to estimate the tax rate and apply it to the dilutive share calculation for determining the dilutive earnings per share. The Company utilized the prospective adoption approach and applied this methodology beginning in 2017. Prior periods have not been adjusted. Upon adoption, no other aspects of ASU 2016-09 had an effect on the Company's consolidated financial statements or related footnote disclosures. In May 2014, the FASB issued ASU No. 2014-09 ‘‘Revenue from Contracts with Customers,’’ (“ASC 606”) to clarify the principles of recognizing revenue and create common revenue recognition guidance between US GAAP and International Financial Reporting Standards. The new standard became effective for the Company in the first quarter of 2018. Under ASC 606, the majority of the Company’s contracts will have a single performance obligation that is satisfied over time, with revenue recognized based on overall project progress measured as of the financial statement date. This represents a change in the Company’s previous revenue accounting methodology, Accounting Standards Codification Topic 605, Revenue Recognition The Company elected to utilize the modified retrospective implementation method for its transition to ASC 606 as of January 1, 2018 (the “Implementation Date”). Under this implementation method, the Company recognized the cumulative effect of initially applying the ASC 606 revenue recognition guidance to contracts that were not completed at the Implementation Date. At the Implementation Date, the Company elected to reflect the aggregate effect of all contract modifications that occurred before January 1, 2018 in determining the satisfied and unsatisfied performance obligations and determination of the transaction price. The cumulative effect adjustment was recorded as a reduction to the opening balance of Accumulated deficit in the consolidated balance sheets in the amount of $5.7 million, with offsetting amounts of $23.9 million to Accounts receivable and unbilled, net, $(1.6) million to Deferred income taxes, $35.1 million to Accrued expenses, $(57.4) million to Pre-funded study costs and $38.9 million to Advanced billings, respectively. The amounts recorded to Accounts receivable and unbilled, net, Deferred income taxes, Accrued expenses, Pre-funded study costs, and Advanced billings reflect differences between revenue recognized and billings to customers by project as well as costs incurred but not settled as of the Implementation Date. The above disclosed cumulative effect adjustments have been revised from the amounts previously disclosed in the Company’s interim financial statements filed on Form 10-Q for the quarterly periods ended March 31, 2018, June 30, 2018 and September 30, 2018 to correct certain immaterial misstatements to the opening balance sheet adoption impact of the standard. The effects of these misstatements were immaterial to the Company’s results of operations. In connection with the implementation of ASC 606 on the modified retrospective method, the Company is presenting additional information to assist with the comparability of select line items of the current and prior period year to date reporting in its consolidated balance sheets and consolidated statements of operations. Below the Company has presented the amount by which each financial statement line item is affected in the current reporting period by the application of ASC 606 as compared with the guidance that was in effect before the change Year Ended December 31, 2018 As Reported Adjustments As Revised under ASC 605 Revenue: Revenue, net $ 704,589 $ (704,589 ) $ - Service revenue, net - 478,063 478,063 Reimbursed out-of-pocket revenue - 71,305 71,305 Total revenue 704,589 (155,221 ) 549,368 Operating expenses: Direct service costs, excluding depreciation and amortization 252,284 - 252,284 Reimbursed out-of-pocket expenses 236,775 (165,470 ) 71,305 Total direct costs 489,059 (165,470 ) 323,589 Total operating expenses 603,541 (165,470 ) 438,071 Income from operations 101,048 10,249 111,297 Income before income taxes 93,951 10,249 104,200 Income tax provision 20,766 1,882 22,648 Net income $ 73,185 $ 8,367 $ 81,552 Net income per share attributable to common shareholders: Basic $ 2.05 $ 0.24 $ 2.29 Diluted $ 1.97 $ 0.23 $ 2.20 Weighted average common shares outstanding: Basic 35,547 - 35,547 Diluted 36,912 - 36,912 ASSETS As of December 31, 2018 Current assets: As Reported Adjustments As Revised under ASC 605 Accounts receivable and unbilled, net 133,449 (28,729 ) 104,720 Prepaid expenses and other current assets 21,383 1,147 22,530 Total current assets 178,114 (27,582 ) 150,532 Deferred income taxes 713 (389 ) 324 Total assets $ 967,933 $ (27,971 ) $ 939,962 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accrued expenses 87,493 (51,109 ) 36,384 Pre-funded study costs - 61,156 61,156 Advanced billings 147,935 (41,732 ) 106,203 Other current liabilities 4,861 (590 ) 4,271 Total current liabilities 257,026 (32,275 ) 224,751 Deferred income tax liability 439 2,049 2,488 Other long-term liabilities 16,560 (382 ) 16,178 Total liabilities 378,230 (30,608 ) 347,622 Shareholders’ equity: Accumulated deficit (41,487 ) 2,637 (38,850 ) Total shareholders’ equity 589,703 2,637 592,340 Total liabilities and shareholders’ equity $ 967,933 $ (27,971 ) $ 939,962 CASH FLOWS FROM OPERATING ACTIVITIES: Year Ended December 31, 2018 As Reported Adjustments As Revised under ASC 605 Net income 73,185 8,367 81,552 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income tax provision 3,942 4,002 7,944 Changes in assets and liabilities: Accounts receivable and unbilled, net (27,047 ) 4,842 (22,205 ) Prepaid expenses and other current assets (1,241 ) (1,147 ) (2,388 ) Accrued expenses 29,029 (15,967 ) 13,062 Pre-funded study costs - 3,782 3,782 Advanced billings 35,593 (2,907 ) 32,686 Other assets and liabilities, net 1,925 (972 ) 953 Net cash provided by operating activities 156,584 - 156,584 In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASC 842”). The guidance in ASC 842 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13) (“ASC 840”). The objective of ASC 842 is to increase transparency and comparability among organizations by requiring the recognition of Right-of-use assets (“ROU assets”) and Lease liabilities on the balance sheet. In addition, ASC 842 introduces additional disclosure requirements that are meant to enable users of the financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. ASC 842 became effective for the Company in the first quarter of 2019. ASC 842 allows by policy election, an entity to choose its transition approach. Entities must adopt ASC 842 on a either a modified retrospective basis to each prior reporting period presented or through an optional alternative method referred to as the “Comparatives Under ASC 840 Approach” which allows entities to apply the new requirements to only those leases that exist as of January 1, 2019. The Company has elected to adopt ASC 842 utilizing the Comparatives Under ASC 840 Approach. As such, ASC 842 is applied on a prospective basis as of January 1, 2019 and any cumulative catch up adjustment for differences between ASC 842 and ASC 840 were recorded upon adoption. ASC 842 also allows for the election of certain practical expedients that are meant to ease the burden of transitioning to ASC 842 while still achieving compliance. The Company elected the “package of three” practical expedient allowing the Company to carry forward decisions made and documented under current U.S. GAAP, rather than reassessing all of the Company’s contracts to determine whether they are or contain leases and how they would be classified under ASC 842. The Company has decided not to elect the hindsight practical expedient, which had it been elected, would require the Company to reassess the lease term and assessment of impairment for all of the Company’s leases using the facts and circumstances known up to the adoption date of the standard. ASC 842 had a material impact on our consolidated balance sheets, as all leases currently classified as operating were recognized as ROU assets and lease liabilities upon adoption. In addition, it was determined that two contracts entered into with a related party for two of the Company’s corporate offices that were classified as deemed assets and deemed liabilities under ASC 840 were determined to be operating leases under ASC 842. These deemed assets and liabilities were reclassified on the consolidated balance sheets to ROU assets The impact of the adoption of ASC 842 as of January 1, 2019 is as follows: ASSETS As of January 1, 2019 Adjustments December 31, 2018 Current assets: Prepaid expenses and other current assets 21,013 (370 ) 21,383 Total current assets 177,744 (370 ) 178,114 Property and equipment, net 37,613 (14,642 ) 52,255 Operating lease right-of-use assets 51,854 51,854 - Total assets $ 1,004,775 $ 36,842 $ 967,933 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Other current liabilities 10,951 6,090 4,861 Total current liabilities 263,116 6,090 257,026 Operating lease liabilities 45,294 45,294 - Deemed landlord liability, less current portion - (24,484 ) 24,484 Deferred income tax liability 3,158 2,719 439 Other long-term liabilities 14,630 (1,930 ) 16,560 Total liabilities 405,919 27,689 378,230 Shareholders’ equity: Accumulated deficit (32,334 ) 9,153 (41,487 ) Total shareholders’ equity 598,856 9,153 589,703 Total liabilities and shareholders’ equity $ 1,004,775 $ 36,842 $ 967,933 In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The Company adopted this standard in the first quarter of 2019 and it had no impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles- Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 simplifies how an entity assesses goodwill for impairment by eliminating Step 2 from the goodwill impairment test. As amended, the goodwill impairment test will consist of comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The guidance is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. The Company adopted this standard on a prospective basis in the first quarter of 2019 and it had no impact to the consolidated financial statements. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” intended to provide financial statement users with more decision-useful information about expected credit losses and other commitments to extend credit held by the reporting entity. The standard replaces the incurred loss impairment methodology in current GAAP with one that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The update is effective on January 1, 2020, with early adoption permitted. The Company will adopt this standard in the first quarter of 2020 and expects no material impact to the consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Reconciliation of Denominators and Additional Shares that are Excluded from the Calculation of EPS | The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2019, 2018 and 2017 (in thousands, except for earnings per share): Year Ended December 31, 2019 2018 2017 Weighted-average shares: Common shares outstanding 35,881 35,547 39,056 RSAs 100 142 90 Total weighted-average shares 35,981 35,689 39,146 Earnings per common share—Basic Net income $ 100,443 $ 73,185 $ 39,122 Less: Undistributed earnings allocated to RSAs 279 291 90 Net income available to common shareholders—Basic $ 100,164 $ 72,894 $ 39,032 Net income per common share—Basic $ 2.79 $ 2.05 $ 1.00 Basic weighted-average common shares outstanding 35,881 35,547 39,056 Effect of diluted shares 1,695 1,365 783 Diluted weighted-average shares outstanding 37,576 36,912 39,839 Net income per common share—Diluted $ 2.67 $ 1.97 $ 0.98 |
Summary of Impact of Adoption of Accounting Standards | In connection with the implementation of ASC 606 on the modified retrospective method, the Company is presenting additional information to assist with the comparability of select line items of the current and prior period year to date reporting in its consolidated balance sheets and consolidated statements of operations. Below the Company has presented the amount by which each financial statement line item is affected in the current reporting period by the application of ASC 606 as compared with the guidance that was in effect before the change Year Ended December 31, 2018 As Reported Adjustments As Revised under ASC 605 Revenue: Revenue, net $ 704,589 $ (704,589 ) $ - Service revenue, net - 478,063 478,063 Reimbursed out-of-pocket revenue - 71,305 71,305 Total revenue 704,589 (155,221 ) 549,368 Operating expenses: Direct service costs, excluding depreciation and amortization 252,284 - 252,284 Reimbursed out-of-pocket expenses 236,775 (165,470 ) 71,305 Total direct costs 489,059 (165,470 ) 323,589 Total operating expenses 603,541 (165,470 ) 438,071 Income from operations 101,048 10,249 111,297 Income before income taxes 93,951 10,249 104,200 Income tax provision 20,766 1,882 22,648 Net income $ 73,185 $ 8,367 $ 81,552 Net income per share attributable to common shareholders: Basic $ 2.05 $ 0.24 $ 2.29 Diluted $ 1.97 $ 0.23 $ 2.20 Weighted average common shares outstanding: Basic 35,547 - 35,547 Diluted 36,912 - 36,912 ASSETS As of December 31, 2018 Current assets: As Reported Adjustments As Revised under ASC 605 Accounts receivable and unbilled, net 133,449 (28,729 ) 104,720 Prepaid expenses and other current assets 21,383 1,147 22,530 Total current assets 178,114 (27,582 ) 150,532 Deferred income taxes 713 (389 ) 324 Total assets $ 967,933 $ (27,971 ) $ 939,962 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accrued expenses 87,493 (51,109 ) 36,384 Pre-funded study costs - 61,156 61,156 Advanced billings 147,935 (41,732 ) 106,203 Other current liabilities 4,861 (590 ) 4,271 Total current liabilities 257,026 (32,275 ) 224,751 Deferred income tax liability 439 2,049 2,488 Other long-term liabilities 16,560 (382 ) 16,178 Total liabilities 378,230 (30,608 ) 347,622 Shareholders’ equity: Accumulated deficit (41,487 ) 2,637 (38,850 ) Total shareholders’ equity 589,703 2,637 592,340 Total liabilities and shareholders’ equity $ 967,933 $ (27,971 ) $ 939,962 CASH FLOWS FROM OPERATING ACTIVITIES: Year Ended December 31, 2018 As Reported Adjustments As Revised under ASC 605 Net income 73,185 8,367 81,552 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income tax provision 3,942 4,002 7,944 Changes in assets and liabilities: Accounts receivable and unbilled, net (27,047 ) 4,842 (22,205 ) Prepaid expenses and other current assets (1,241 ) (1,147 ) (2,388 ) Accrued expenses 29,029 (15,967 ) 13,062 Pre-funded study costs - 3,782 3,782 Advanced billings 35,593 (2,907 ) 32,686 Other assets and liabilities, net 1,925 (972 ) 953 Net cash provided by operating activities 156,584 - 156,584 |
ASU 2016-02 | |
Summary of Impact of Adoption of Accounting Standards | The impact of the adoption of ASC 842 as of January 1, 2019 is as follows: ASSETS As of January 1, 2019 Adjustments December 31, 2018 Current assets: Prepaid expenses and other current assets 21,013 (370 ) 21,383 Total current assets 177,744 (370 ) 178,114 Property and equipment, net 37,613 (14,642 ) 52,255 Operating lease right-of-use assets 51,854 51,854 - Total assets $ 1,004,775 $ 36,842 $ 967,933 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Other current liabilities 10,951 6,090 4,861 Total current liabilities 263,116 6,090 257,026 Operating lease liabilities 45,294 45,294 - Deemed landlord liability, less current portion - (24,484 ) 24,484 Deferred income tax liability 3,158 2,719 439 Other long-term liabilities 14,630 (1,930 ) 16,560 Total liabilities 405,919 27,689 378,230 Shareholders’ equity: Accumulated deficit (32,334 ) 9,153 (41,487 ) Total shareholders’ equity 598,856 9,153 589,703 Total liabilities and shareholders’ equity $ 1,004,775 $ 36,842 $ 967,933 |
Contract Assets and Contract _2
Contract Assets and Contract Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Company's Contract Asset and Contract Liability | Accounts receivable and unbilled, net consisted of the following (in thousands): As of December 31, December 31, 2019 2018 Accounts receivable $ 127,877 $ 85,120 Unbilled receivables 28,368 49,361 Less: allowance for doubtful accounts (583 ) (1,032 ) Total accounts receivable and unbilled, net $ 155,662 $ 133,449 Advanced billings consisted of the following (in thousands): As of December 31, December 31, 2019 2018 Advanced billings $ 192,359 $ 147,935 |
Schedule of Allowance for Doubtful Account Activity | A rollforward of allowance for doubtful account activity is as follows: Year Ended December 31, 2019 2018 2017 Allowance for doubtful accounts - beginning balance $ (1,032 ) $ (673 ) $ (3,222 ) Current year provision (263 ) (791 ) (250 ) Write-offs, recoveries and the effects of foreign currency exchange 712 432 2,799 Allowance for doubtful accounts - ending balance $ (583 ) $ (1,032 ) $ (673 ) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net consisted of the following at December 31 (in thousands): 2019 2018 Land $ 1,577 $ 1,240 Equipment 20,225 15,437 Furniture, fixtures, and leasehold improvements 24,624 20,892 Computer hardware, software, and phone equipment 15,958 11,566 Buildings 13,272 8,145 Deemed assets from landlord building construction - 22,752 Construction-in-progress 3,265 5,334 Property and equipment at cost 78,921 85,366 Less: Accumulated depreciation (31,629 ) (33,111 ) Property and equipment, net $ 47,292 $ 52,255 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, Net | Intangible assets, net consisted of the following at December 31 (in thousands): 2019 2018 Intangible assets: Finite-lived intangible assets: Carrying amount: Customer relationships $ 145,051 $ 145,051 Developed technologies 54,475 54,475 Other 3,074 3,074 Total finite-lived intangible assets 202,600 202,600 Accumulated amortization: Customer relationships (122,426 ) (110,636 ) Developed technologies (54,475 ) (51,751 ) Other (2,995 ) (2,680 ) Total accumulated amortization (179,896 ) (165,067 ) Total finite-lived intangible assets, net 22,704 37,533 Trade name (indefinite-lived) 31,646 31,646 Total intangible assets, net $ 54,350 $ 69,179 |
Schedule of Estimated Amortization Expense of Intangible Assets | As of December 31, 2019, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands): Amortization 2020 $ 7,876 2021 5,114 2022 3,353 2023 2,199 2024 1,443 Later years 2,719 $ 22,704 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following at December 31 (in thousands): 2019 2018 Employee compensation and benefits $ 34,119 $ 31,344 Project related reimbursable expenses 68,696 51,109 Other 6,437 5,040 Total accrued expenses $ 109,252 $ 87,493 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following at December 31 (in thousands): 2019 2018 Term loan $ - $ 80,438 Less unamortized discount - (282 ) Less unamortized term loan debt issuance costs - (435 ) Long-term debt, net, less current portion $ - $ 79,721 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The components of lease expense were as follows (in thousands): Year Ended December 31, 2019 Operating lease cost $ 13,151 Variable lease cost 2,813 |
Summary of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to the leases was as follows (in thousands): Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9,773 Right-of-use assets obtained in exchange for lease obligations: Operating leases 10,294 |
Summary of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to the leases was as follows (in thousands): As of December 31, 2019 Operating lease right-of-use assets $ 52,152 Other current liabilities $ 10,977 Operating lease liabilities 45,212 Total operating lease liabilities $ 56,189 Weighted Average Remaining Lease Term (years) Operating leases 6.3 Weighted Average Discount Rate Operating leases 6.0 % |
Schedule of Lease Payments Due Related To Lease Liabilities | Lease payments due related to lease liabilities as of December 31, 2019 were as follows (in thousands): Related Party Non-Related Parties Total Operating Leases Operating Leases Operating Leases 2020 $ 5,600 $ 7,644 $ 13,244 2021 5,600 7,435 13,035 2022 5,267 4,664 9,931 2023 3,613 3,916 7,529 2024 3,613 2,875 6,488 Later years 9,665 8,644 18,309 Total lease payments 33,358 35,178 68,536 Less: imputed interest (6,162 ) (6,185 ) (12,347 ) Total $ 27,196 $ 28,993 $ 56,189 |
Schedule of Future Minimum Rental Payments for Lease Obligations under ASC 840 | Future minimum rental payments for lease obligations with initial terms in excess of one year as of December 31, 2018 are as follows (in thousands): Non-Related Total Related Party Parties Operating Operating Operating Leases Leases Leases 2019 $ 1,987 $ 6,186 $ 8,173 2020 6,843 6,617 13,460 2021 6,964 5,873 12,837 2022 6,757 3,694 10,451 2023 5,229 3,257 8,486 Thereafter 103,870 5,752 109,622 Total minimum lease payments $ 131,650 $ 31,379 $ 163,029 |
Schedule of Minimum Annual Payments Required in Conjunction with Landlord Liability under ASC 840 | Minimum annual payments required in conjunction with the Deemed landlord liabilities as of December 31, 2018 are as follows (in thousands): Related Party Total Minimum Lease Less: Principal Payments Interest Amounts Due 2019 $ 3,918 $ 1,818 $ 2,100 2020 3,988 1,662 2,326 2021 4,039 1,490 2,549 2022 4,092 1,301 2,791 2023 4,145 1,095 3,050 Thereafter 15,697 1,929 13,768 Total $ 35,879 $ 9,295 $ 26,584 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Weighted-Average Assumptions Used in BSM Model to Calculate Fair Value of Options | The following table sets forth the key weighted-average assumptions used in the BSM Model to calculate the fair value of options: Year Ended December 31, 2019 2018 2017 Expected holding period - years 2.6 5.4 5.4 Expected volatility 26.3% 27.0% 28.0% Risk-free interest rate 2.0% 2.8% 2.0% Expected dividend yield 0.0% 0.0% 0.0% |
Schedule of Grant Date Fair Value and Stock-based Compensation Expense Allocated | The following table summarizes the grant date fair values of stock options and restricted shares issued during the period as well as the allocation of stock-based compensation expense to Total direct costs, and Selling, general and administrative reported in the consolidated statements of operations: Year Ended December 31, 2019 2018 2017 Weighted average, grant date fair value Stock options $ 14.06 $ 11.51 $ 8.54 Restricted shares (RSAs and RSUs) $ 60.53 $ 49.38 $ 31.90 Stock-based compensation expense allocated to: Total direct costs $ 6,999 $ 4,132 $ 2,128 Selling, general, and administrative 13,742 2,367 2,335 Total stock-based compensation expense $ 20,741 $ 6,499 $ 4,463 |
Schedule of Stock Option Activity | The following table sets forth the Company’s stock option activity: Year Ended December 31, 2019 2018 2017 Weighted Weighted Weighted Options Exercise Price Options Exercise Price Options Exercise Price Outstanding - beginning of Period 2,945,040 $ 24.18 2,782,868 $ 20.73 2,350,166 $ 17.57 Granted 859,960 $ 54.97 584,301 $ 37.72 853,896 $ 28.67 Exercised (399,368 ) $ 16.19 (169,771 ) $ 14.98 (116,787 ) $ 15.52 Forfeited/Expired (375,561 ) $ 19.91 (252,358 ) $ 23.69 (304,407 ) $ 20.55 Outstanding - end of period 3,030,071 $ 34.50 2,945,040 $ 24.18 2,782,868 $ 20.73 Exercisable - end of period 1,435,088 $ 38.62 1,096,116 $ 16.01 917,592 $ 15.40 |
Schedule of Restricted Share Activity | The following table sets forth the Company’s Restricted Share activity: Year Ended December 31, 2019 2018 2017 Shares/Units Shares/Units Shares/Units Outstanding and unvested - beginning of period 421,200 183,629 59,258 Granted 227,610 300,200 156,000 Vested - (29,629 ) (29,629 ) Forfeited (79,040 ) (33,000 ) (2,000 ) Outstanding and unvested - end of period 569,770 421,200 183,629 Cumulative vested shares - end of period 1,913,916 1,913,916 1,884,287 |
Schedule of Stock Options Expected To Vest, Stock Options Exercisable, and Unvested Restricted Share Awards Expected To Vest | The following table summarizes information about stock options expected to vest, stock options exercisable, and unvested restricted share awards expected to vest at December 31, 2019: Weighted Average Weighted Average Exercise Stock Restricted Remaining Price Options Shares Life (Years) December 31, 2019 Number of stock options expected to vest $ 34.50 3,030,071 - 4.0 Number of Restricted Shares expected to vest - 569,770 Total expected to vest - December 31, 2019 3,030,071 569,770 Total stock options exercisable - December 31, 2019 $ 38.62 1,435,088 3.6 Unrecognized compensation cost - December 31, 2019 (in thousands) $ 5,884 $ 19,697 Weighted average years over which unrecognized compensation cost will be recognized 1.9 2.9 |
Schedule of Aggregate Intrinsic Value of Stock Options Exercised, Fair Values of Awards Vested, and Share Based Liabilities Settled | The following table sets forth the aggregate intrinsic value of stock options exercised, the fair values of awards vested, and share based liabilities settled during the respective periods (in thousands): Year Ended December 31, 2019 2018 2017 Total intrinsic value of stock options exercised $ 19,807 $ 5,326 $ 1,619 Total grant-date fair value of stock options vested $ 12,117 $ 1,417 $ 1,317 Total grant-date fair value of restricted shares vested $ - $ 447 $ 447 Total settlement date fair value of restricted shares vested $ - $ 1,568 $ 1,074 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Before Income Taxes | The components of income before income taxes consisted of the following (in thousands): Year Ended December 31, 2019 2018 2017 Domestic $ 117,326 $ 88,014 $ 52,986 Foreign jurisdictions 7,506 5,937 3,959 Income before income taxes $ 124,832 $ 93,951 $ 56,945 |
Schedule of Income Tax Provision | Income tax provision consisted of the following (in thousands): Current Deferred Total Year ended December 31, 2019 U.S. Federal $ 10,577 $ 8,922 $ 19,499 U.S. state and local 1,761 987 2,748 Foreign jurisdictions 2,023 119 2,142 $ 14,361 $ 10,028 $ 24,389 Year ended December 31, 2018 U.S. Federal $ 13,372 $ 4,172 $ 17,544 U.S. state and local 1,912 (116 ) 1,796 Foreign jurisdictions 1,408 18 1,426 $ 16,692 $ 4,074 $ 20,766 Year ended December 31, 2017 U.S. Federal $ 10,953 $ 3,466 $ 14,419 U.S. state and local 2,032 51 2,083 Foreign jurisdictions 1,576 (255 ) 1,321 $ 14,561 $ 3,262 $ 17,823 |
Summary Of Difference Between Statutory Rate for Federal Income Tax and Effective Income Tax Rate | The difference between the statutory rate for federal income tax and the effective income tax rate was as follows (in thousands): Year Ended December 31, 2019 2018 2017 Income tax expense calculated at the federal statutory rate $ 26,215 21.0 % $ 19,730 21.0 % $ 19,931 35.0 % Effect of: State and local taxes, net of federal benefit 2,021 1.6 1,978 2.1 1,606 2.8 Tax on foreign earnings, net of tax credits and deductions 593 0.4 172 0.2 (69 ) (0.1 ) Tax reform adjustment - - (195 ) (0.2 ) (3,418 ) (6.0 ) Write off of Deferred Tax Assets - - 509 0.6 - - Deferred credit (802 ) (0.6 ) (802 ) (0.9 ) (1,053 ) (1.9 ) Permanent items: Stock-based awards (3,011 ) (2.4 ) (651 ) (0.7 ) (179 ) (0.3 ) Tax reform - - 126 0.1 574 1.0 Deduction for FDII (2,283 ) (1.8 ) - - - - Other 964 0.8 687 0.7 483 0.9 State/Local tax credits (793 ) (0.6 ) (1,253 ) (1.3 ) (1,187 ) (2.1 ) Foreign tax credits - - (727 ) (0.8 ) - - Change in liability for uncertain tax positions 1,325 1.0 1,102 1.2 1,141 2.0 Other 160 0.1 90 0.1 (6 ) (0.0 ) $ 24,389 19.5 % $ 20,766 22.1 % $ 17,823 31.3 % |
Schedule of Components of Company's Net Deferred Tax Asset (Liability) | Components of the Company’s net deferred tax asset (liability) included in the consolidated balance sheets consisted of the following at December 31 (in thousands): 2019 2018 Deferred tax assets: Accrued liabilities $ 12,229 $ 18,670 Depreciation and amortization 1,121 872 Foreign operating loss carryforward 447 248 U.S. state and local tax credits and carryforward 184 223 Other 96 41 Valuation allowance (755 ) (169 ) Total deferred tax assets 13,322 19,885 Deferred tax liabilities: Depreciation and amortization (21,787 ) (18,803 ) Prepaid expenses (808 ) (550 ) Advanced billings (3,147 ) - Other (53 ) (258 ) Total deferred tax liabilities (25,795 ) (19,611 ) Net deferred tax asset $ (12,473 ) $ 274 |
Schedule of Annual Activity Related to Valuation Allowance | Annual activity related to the Company’s valuation allowance is as follows (in thousands): Year Ended December 31, 2019 2018 2017 Beginning Balance $ 169 $ 2,394 $ 987 Additions charged to expense 375 - - Additions due to asset acquisition 265 - 2,033 Reductions from utilization, reassessments and expirations (54 ) (2,225 ) 3 Remeasurement due to effect of tax reform - - (629 ) Ending Balance $ 755 $ 169 $ 2,394 |
Schedule of Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2019 2018 2017 Beginning Balance $ 8,525 $ 6,890 $ 5,698 Increases in tax positions for prior years - - 5 Decreases in tax positions for prior years (888 ) (579 ) - Increases in tax positions for current year 2,081 2,214 1,187 Lapse in statute of limitations - - - Ending Balance $ 9,718 $ 8,525 $ 6,890 |
Miscellaneous (Expense) Income
Miscellaneous (Expense) Income , Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income And Expenses [Abstract] | |
Components of Miscellaneous (Expense) Income , Net | Miscellaneous (expense) income, net consisted of the following (in thousands): Year Ended December 31, 2019 2018 2017 Net (loss) gain on foreign-currency transactions $ (581 ) $ 386 $ (1,004 ) Other (expense) income (282 ) 674 650 Miscellaneous (expense) income, net $ (863 ) $ 1,060 $ (354 ) |
Entity Wide Disclosures (Tables
Entity Wide Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Entity Wide Disclosures [Abstract] | |
Summary of Property and Equipment, Net by Geographic Region | The following table summarizes property and equipment, net by geographic region and is further broken down to show countries which account for 10% or more of total as of December 31, if any (in thousands): 2019 2018 Property and equipment, net: United States $ 25,603 $ 38,609 Europe Belgium 10,045 6,014 Other 5,728 5,500 Total Europe 15,773 11,514 Asia-Pacific 5,671 1,930 Other 245 202 Total property and equipment, net $ 47,292 $ 52,255 |
Summary of Revenue by Major Source | The following table disaggregates the Company’s revenue by major source (in thousands): Years Ended December 31, 2019 2018 Therapeutic Area Oncology $ 256,766 $ 189,056 Other 222,514 163,983 Metabolic 138,650 124,837 Cardiology 91,258 95,213 AVAI 86,390 77,271 Central Nervous System 65,391 54,229 Total revenue $ 860,969 $ 704,589 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Unaudited Quarterly Results of Operations | The following table summarizes the Company's unaudited quarterly results of operations (in thousands, except per share data): 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Revenue, net $ 200,741 $ 214,104 $ 216,238 $ 229,886 Total direct costs 145,703 150,312 152,070 167,187 Income from operations 25,895 35,259 29,991 36,118 Net income 19,198 27,455 23,977 29,813 Net income per share attributable to common shareholders - Basic $ 0.54 $ 0.76 $ 0.67 $ 0.82 Net income per share attributable to common shareholders - Diluted $ 0.51 $ 0.73 $ 0.63 $ 0.78 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Revenue, net $ 163,077 $ 170,144 $ 179,253 $ 192,115 Total direct costs 117,254 116,676 123,996 131,133 Income from operations 20,119 23,345 26,918 30,666 Net income 14,551 16,568 19,305 22,761 Net income per share attributable to common shareholders - Basic $ 0.41 $ 0.46 $ 0.54 $ 0.64 Net income per share attributable to common shareholders - Diluted $ 0.40 $ 0.45 $ 0.52 $ 0.61 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Nov. 30, 2017 | Aug. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Apr. 30, 2017 | |
Basis Of Presentation [Line Items] | |||||||
Repurchases of common stock, value | $ 0 | $ 0 | $ 155,583 | ||||
Treasury stock shares | 200,000 | 200,000 | |||||
Share Repurchase Program | |||||||
Basis Of Presentation [Line Items] | |||||||
Repurchases of common stock, value | $ 34,700 | ||||||
Repurchases of outstanding common stock, shares | 1,342,786 | ||||||
Maximum | |||||||
Basis Of Presentation [Line Items] | |||||||
Stock repurchase program, authorized amount | $ 50,000 | $ 50,000 | |||||
Prior Senior Secured Revolving Credit Facility | |||||||
Basis Of Presentation [Line Items] | |||||||
Share repurchases funding through borrowings | $ 40,000 | ||||||
Cinven | |||||||
Basis Of Presentation [Line Items] | |||||||
Repurchases of common stock, value | $ 60,500 | ||||||
Purchase price of repurchased shares | $ 30.27 | ||||||
Repurchases of outstanding common stock, shares | 2,000,000 | ||||||
Secondary Offering | Operating Expenses | |||||||
Basis Of Presentation [Line Items] | |||||||
Professional fees | $ 700 | $ 400 | |||||
Secondary Offering | Prior Senior Secured Revolving Credit Facility | |||||||
Basis Of Presentation [Line Items] | |||||||
Share repurchases funding through borrowings | $ 60,000 | ||||||
Secondary Offering | Cinven | |||||||
Basis Of Presentation [Line Items] | |||||||
Repurchases of outstanding common stock, shares | 2,000,000 | ||||||
Repurchases of common stock, value | $ 60,300 | ||||||
Purchase price of repurchased shares | $ 30.16 | ||||||
Shares issued and sold | 16,399,997 | 4,600,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) shares in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)Customershares | Dec. 31, 2018USD ($)Customershares | Dec. 31, 2017USD ($)shares | Jan. 01, 2018USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Sales rebates | $ 6,200,000 | $ 1,200,000 | $ 200,000 | |
Performance obligations remaining to be performed | $ 1,400,000,000 | $ 1,100,000,000 | ||
Number of customers accounted for more than 10% of accounts receivable | Customer | 0 | 0 | ||
Disbursement of pre-funded study costs | 138,700,000 | |||
Fair value measurements transfers between level 1, level 2, or level 3 | $ 0 | $ 0 | 0 | |
Accumulated deficit | 68,109,000 | (41,487,000) | ||
Accounts receivable and unbilled, net | 155,662,000 | 133,449,000 | ||
Deferred income tax liability | 12,849,000 | 439,000 | ||
Accrued expenses | 109,252,000 | 87,493,000 | ||
Pre-funded study costs | 0 | |||
Advanced billings | $ 192,359,000 | 147,935,000 | ||
ASU 2014-09 | Impact of Adoption of ASC 606 - Adjustments | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Accumulated deficit | 2,637,000 | $ 5,700,000 | ||
Accounts receivable and unbilled, net | (28,729,000) | 23,900,000 | ||
Deferred income tax liability | 2,049,000 | (1,600,000) | ||
Accrued expenses | (51,109,000) | 35,100,000 | ||
Pre-funded study costs | 61,156,000 | (57,400,000) | ||
Advanced billings | $ (41,732,000) | $ 38,900,000 | ||
Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful life of intangible assets | 15 years | |||
Maximum | Accounting Standard Update (“ASU”) No. 2016-09 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Discrete Adjustments to Income Tax Expense Benefit | $ 100,000 | |||
Maximum | Computer Hardware Software Phone and Medical Imaging Equipment | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful life of assets | 5 years | |||
Maximum | Furniture and Fixtures and Other Equipment | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful life of assets | 7 years | |||
Maximum | Buildings | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful life of assets | 40 years | |||
Maximum | Computer Software Developed Costs | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful life of assets | 3 years | |||
Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful life of intangible assets | 5 years | |||
Minimum | Computer Hardware Software Phone and Medical Imaging Equipment | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful life of assets | 3 years | |||
Minimum | Furniture and Fixtures and Other Equipment | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful life of assets | 5 years | |||
Minimum | Buildings | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful life of assets | 30 years | |||
Stock Options | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted EPS | shares | 248 | 121 | 63 | |
Miscellaneous Income (Expense), Net | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Net gain (loss) on foreign currency transactions | $ (600,000) | $ 400,000 | $ (1,000,000) | |
Selling, General and Administrative | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Advertisement expenses | $ 700,000 | $ 800,000 | $ 600,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Reconciliation of Denominators and Additional Shares that are Excluded from the Calculation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted-average shares: | |||||||||||
Basic weighted-average common shares outstanding | 35,881 | 35,547 | 39,056 | ||||||||
Total weighted-average shares | 35,981 | 35,689 | 39,146 | ||||||||
Earnings per common share—Basic | |||||||||||
Net income | $ 29,813 | $ 23,977 | $ 27,455 | $ 19,198 | $ 22,761 | $ 19,305 | $ 16,568 | $ 14,551 | $ 100,443 | $ 73,185 | $ 39,122 |
Net income available to common shareholders—Basic | $ 100,164 | $ 72,894 | $ 39,032 | ||||||||
Net income per common share—Basic | $ 0.82 | $ 0.67 | $ 0.76 | $ 0.54 | $ 0.64 | $ 0.54 | $ 0.46 | $ 0.41 | $ 2.79 | $ 2.05 | $ 1 |
Basic weighted-average common shares outstanding | 35,881 | 35,547 | 39,056 | ||||||||
Effect of diluted shares | 1,695 | 1,365 | 783 | ||||||||
Diluted weighted-average shares outstanding | 37,576 | 36,912 | 39,839 | ||||||||
Net income per common share—Diluted | $ 0.78 | $ 0.63 | $ 0.73 | $ 0.51 | $ 0.61 | $ 0.52 | $ 0.45 | $ 0.40 | $ 2.67 | $ 1.97 | $ 0.98 |
RSAs | |||||||||||
Weighted-average shares: | |||||||||||
Basic weighted-average common shares outstanding | 100 | 142 | 90 | ||||||||
Earnings per common share—Basic | |||||||||||
Less: Undistributed earnings allocated to RSAs | $ 279 | $ 291 | $ 90 | ||||||||
Basic weighted-average common shares outstanding | 100 | 142 | 90 | ||||||||
Common Stock | |||||||||||
Weighted-average shares: | |||||||||||
Basic weighted-average common shares outstanding | 35,881 | 35,547 | 39,056 | ||||||||
Earnings per common share—Basic | |||||||||||
Basic weighted-average common shares outstanding | 35,881 | 35,547 | 39,056 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Impact of Adoption of Accounting Standards (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | Jan. 01, 2018 | Dec. 31, 2016 | |
Revenue: | ||||||||||||||
Total revenue | $ 229,886 | $ 216,238 | $ 214,104 | $ 200,741 | $ 192,115 | $ 179,253 | $ 170,144 | $ 163,077 | $ 860,969 | $ 704,589 | $ 436,152 | |||
Operating expenses: | ||||||||||||||
Direct service costs, excluding depreciation and amortization | 321,006 | 252,284 | 211,773 | |||||||||||
Reimbursed out-of-pocket expenses | 294,266 | 236,775 | 49,690 | |||||||||||
Total direct costs | 167,187 | 152,070 | 150,312 | 145,703 | 131,133 | 123,996 | 116,676 | 117,254 | 615,272 | 489,059 | 261,463 | |||
Total operating expenses | 733,706 | 603,541 | 371,294 | |||||||||||
Income from operations | 36,118 | 29,991 | 35,259 | 25,895 | 30,666 | 26,918 | 23,345 | 20,119 | 127,263 | 101,048 | 64,858 | |||
Income before income taxes | 124,832 | 93,951 | 56,945 | |||||||||||
Income tax provision | 24,389 | 20,766 | 17,823 | |||||||||||
Net income | $ 29,813 | $ 23,977 | $ 27,455 | $ 19,198 | $ 22,761 | $ 19,305 | $ 16,568 | $ 14,551 | $ 100,443 | $ 73,185 | $ 39,122 | |||
Net income per share attributable to common shareholders: | ||||||||||||||
Basic | $ 0.82 | $ 0.67 | $ 0.76 | $ 0.54 | $ 0.64 | $ 0.54 | $ 0.46 | $ 0.41 | $ 2.79 | $ 2.05 | $ 1 | |||
Diluted | $ 0.78 | $ 0.63 | $ 0.73 | $ 0.51 | $ 0.61 | $ 0.52 | $ 0.45 | $ 0.40 | $ 2.67 | $ 1.97 | $ 0.98 | |||
Weighted average common shares outstanding: | ||||||||||||||
Basic | 35,881 | 35,547 | 39,056 | |||||||||||
Diluted | 37,576 | 36,912 | 39,839 | |||||||||||
Current assets: | ||||||||||||||
Accounts receivable and unbilled, net | $ 155,662 | $ 133,449 | $ 155,662 | $ 133,449 | ||||||||||
Prepaid expenses and other current assets | 29,446 | 21,383 | 29,446 | 21,383 | ||||||||||
Total current assets | 317,028 | 178,114 | 317,028 | 178,114 | ||||||||||
Deferred income taxes | 376 | 713 | 376 | 713 | ||||||||||
Property and equipment, net | 47,292 | 52,255 | 47,292 | 52,255 | ||||||||||
Operating lease right-of-use assets | 52,152 | 0 | 52,152 | 0 | ||||||||||
Total assets | 1,143,071 | 967,933 | 1,143,071 | 967,933 | ||||||||||
Current liabilities: | ||||||||||||||
Accrued expenses | 109,252 | 87,493 | 109,252 | 87,493 | ||||||||||
Pre-funded study costs | 0 | 0 | ||||||||||||
Advanced billings | 192,359 | 147,935 | 192,359 | 147,935 | ||||||||||
Other current liabilities | 18,987 | 4,861 | 18,987 | 4,861 | ||||||||||
Total current liabilities | 343,002 | 257,026 | 343,002 | 257,026 | ||||||||||
Operating lease liabilities | 45,212 | 0 | 45,212 | 0 | ||||||||||
Deemed landlord liability, less current portion | 0 | 24,484 | 0 | 24,484 | ||||||||||
Deferred income tax liability | 12,849 | 439 | 12,849 | 439 | ||||||||||
Other long-term liabilities | 15,725 | 16,560 | 15,725 | 16,560 | ||||||||||
Total liabilities | 416,788 | 378,230 | 416,788 | 378,230 | ||||||||||
Shareholders’ equity: | ||||||||||||||
Accumulated deficit | 68,109 | (41,487) | 68,109 | (41,487) | ||||||||||
Total shareholders’ equity | 726,283 | 589,703 | 726,283 | 589,703 | $ 503,530 | $ 610,710 | ||||||||
Total liabilities and shareholders’ equity | $ 1,143,071 | 967,933 | 1,143,071 | 967,933 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||
Net income | 100,443 | 73,185 | 39,122 | |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Deferred income tax provision | 10,050 | 3,942 | 3,237 | |||||||||||
Changes in assets and liabilities: | ||||||||||||||
Accounts receivable and unbilled, net | (21,256) | (27,047) | (2,898) | |||||||||||
Prepaid expenses and other current assets | (7,381) | (1,241) | (3,533) | |||||||||||
Accrued expenses | 21,824 | 29,029 | (1,313) | |||||||||||
Pre-funded study costs | 0 | 0 | 5,292 | |||||||||||
Advanced billings | 44,584 | 35,593 | 7,735 | |||||||||||
Other assets and liabilities, net | 2,121 | 1,925 | 2,782 | |||||||||||
Net cash provided by operating activities | 201,867 | 156,584 | 97,385 | |||||||||||
Revenue Net | ||||||||||||||
Revenue: | ||||||||||||||
Total revenue | 860,969 | 704,589 | 0 | |||||||||||
Direct Service Revenue | ||||||||||||||
Revenue: | ||||||||||||||
Total revenue | 0 | 0 | 386,462 | |||||||||||
Reimbursed Out-of-Pocket Revenue | ||||||||||||||
Revenue: | ||||||||||||||
Total revenue | $ 0 | 0 | $ 49,690 | |||||||||||
ASU 2014-09 | Impact of Adoption of ASC 606 - Adjustments | ||||||||||||||
Revenue: | ||||||||||||||
Total revenue | (155,221) | |||||||||||||
Operating expenses: | ||||||||||||||
Direct service costs, excluding depreciation and amortization | 0 | |||||||||||||
Reimbursed out-of-pocket expenses | (165,470) | |||||||||||||
Total direct costs | (165,470) | |||||||||||||
Total operating expenses | (165,470) | |||||||||||||
Income from operations | 10,249 | |||||||||||||
Income before income taxes | 10,249 | |||||||||||||
Income tax provision | 1,882 | |||||||||||||
Net income | $ 8,367 | |||||||||||||
Net income per share attributable to common shareholders: | ||||||||||||||
Basic | $ 0.24 | |||||||||||||
Diluted | $ 0.23 | |||||||||||||
Weighted average common shares outstanding: | ||||||||||||||
Basic | 0 | |||||||||||||
Diluted | 0 | |||||||||||||
Current assets: | ||||||||||||||
Accounts receivable and unbilled, net | (28,729) | $ (28,729) | $ 23,900 | |||||||||||
Prepaid expenses and other current assets | 1,147 | 1,147 | ||||||||||||
Total current assets | (27,582) | (27,582) | ||||||||||||
Deferred income taxes | (389) | (389) | ||||||||||||
Total assets | (27,971) | (27,971) | ||||||||||||
Current liabilities: | ||||||||||||||
Accrued expenses | (51,109) | (51,109) | 35,100 | |||||||||||
Pre-funded study costs | 61,156 | 61,156 | (57,400) | |||||||||||
Advanced billings | (41,732) | (41,732) | 38,900 | |||||||||||
Other current liabilities | (590) | (590) | ||||||||||||
Total current liabilities | (32,275) | (32,275) | ||||||||||||
Deferred income tax liability | 2,049 | 2,049 | (1,600) | |||||||||||
Other long-term liabilities | (382) | (382) | ||||||||||||
Total liabilities | (30,608) | (30,608) | ||||||||||||
Shareholders’ equity: | ||||||||||||||
Accumulated deficit | 2,637 | 2,637 | $ 5,700 | |||||||||||
Total shareholders’ equity | 2,637 | 2,637 | ||||||||||||
Total liabilities and shareholders’ equity | (27,971) | (27,971) | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||
Net income | 8,367 | |||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Deferred income tax provision | 4,002 | |||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Accounts receivable and unbilled, net | 4,842 | |||||||||||||
Prepaid expenses and other current assets | (1,147) | |||||||||||||
Accrued expenses | (15,967) | |||||||||||||
Pre-funded study costs | 3,782 | |||||||||||||
Advanced billings | (2,907) | |||||||||||||
Other assets and liabilities, net | (972) | |||||||||||||
Net cash provided by operating activities | 0 | |||||||||||||
ASU 2014-09 | Impact of Adoption of ASC 606 - Adjustments | Revenue Net | ||||||||||||||
Revenue: | ||||||||||||||
Total revenue | (704,589) | |||||||||||||
ASU 2014-09 | Impact of Adoption of ASC 606 - Adjustments | Direct Service Revenue | ||||||||||||||
Revenue: | ||||||||||||||
Total revenue | 478,063 | |||||||||||||
ASU 2014-09 | Impact of Adoption of ASC 606 - Adjustments | Reimbursed Out-of-Pocket Revenue | ||||||||||||||
Revenue: | ||||||||||||||
Total revenue | 71,305 | |||||||||||||
ASU 2014-09 | Impact of Adoption of ASC 606 - As Revised under ASC 605 | ||||||||||||||
Revenue: | ||||||||||||||
Total revenue | 549,368 | |||||||||||||
Operating expenses: | ||||||||||||||
Direct service costs, excluding depreciation and amortization | 252,284 | |||||||||||||
Reimbursed out-of-pocket expenses | 71,305 | |||||||||||||
Total direct costs | 323,589 | |||||||||||||
Total operating expenses | 438,071 | |||||||||||||
Income from operations | 111,297 | |||||||||||||
Income before income taxes | 104,200 | |||||||||||||
Income tax provision | 22,648 | |||||||||||||
Net income | $ 81,552 | |||||||||||||
Net income per share attributable to common shareholders: | ||||||||||||||
Basic | $ 2.29 | |||||||||||||
Diluted | $ 2.20 | |||||||||||||
Weighted average common shares outstanding: | ||||||||||||||
Basic | 35,547 | |||||||||||||
Diluted | 36,912 | |||||||||||||
Current assets: | ||||||||||||||
Accounts receivable and unbilled, net | 104,720 | $ 104,720 | ||||||||||||
Prepaid expenses and other current assets | 22,530 | 22,530 | ||||||||||||
Total current assets | 150,532 | 150,532 | ||||||||||||
Deferred income taxes | 324 | 324 | ||||||||||||
Total assets | 939,962 | 939,962 | ||||||||||||
Current liabilities: | ||||||||||||||
Accrued expenses | 36,384 | 36,384 | ||||||||||||
Pre-funded study costs | 61,156 | 61,156 | ||||||||||||
Advanced billings | 106,203 | 106,203 | ||||||||||||
Other current liabilities | 4,271 | 4,271 | ||||||||||||
Total current liabilities | 224,751 | 224,751 | ||||||||||||
Deferred income tax liability | 2,488 | 2,488 | ||||||||||||
Other long-term liabilities | 16,178 | 16,178 | ||||||||||||
Total liabilities | 347,622 | 347,622 | ||||||||||||
Shareholders’ equity: | ||||||||||||||
Accumulated deficit | (38,850) | (38,850) | ||||||||||||
Total shareholders’ equity | 592,340 | 592,340 | ||||||||||||
Total liabilities and shareholders’ equity | $ 939,962 | 939,962 | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||
Net income | 81,552 | |||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Deferred income tax provision | 7,944 | |||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Accounts receivable and unbilled, net | (22,205) | |||||||||||||
Prepaid expenses and other current assets | (2,388) | |||||||||||||
Accrued expenses | 13,062 | |||||||||||||
Pre-funded study costs | 3,782 | |||||||||||||
Advanced billings | 32,686 | |||||||||||||
Other assets and liabilities, net | 953 | |||||||||||||
Net cash provided by operating activities | 156,584 | |||||||||||||
ASU 2014-09 | Impact of Adoption of ASC 606 - As Revised under ASC 605 | Revenue Net | ||||||||||||||
Revenue: | ||||||||||||||
Total revenue | 0 | |||||||||||||
ASU 2014-09 | Impact of Adoption of ASC 606 - As Revised under ASC 605 | Direct Service Revenue | ||||||||||||||
Revenue: | ||||||||||||||
Total revenue | 478,063 | |||||||||||||
ASU 2014-09 | Impact of Adoption of ASC 606 - As Revised under ASC 605 | Reimbursed Out-of-Pocket Revenue | ||||||||||||||
Revenue: | ||||||||||||||
Total revenue | $ 71,305 | |||||||||||||
ASU 2016-02 | ||||||||||||||
Current assets: | ||||||||||||||
Prepaid expenses and other current assets | $ 21,013 | |||||||||||||
Total current assets | 177,744 | |||||||||||||
Property and equipment, net | 37,613 | |||||||||||||
Operating lease right-of-use assets | 51,854 | |||||||||||||
Total assets | 1,004,775 | |||||||||||||
Current liabilities: | ||||||||||||||
Other current liabilities | 10,951 | |||||||||||||
Total current liabilities | 263,116 | |||||||||||||
Operating lease liabilities | 45,294 | |||||||||||||
Deemed landlord liability, less current portion | 0 | |||||||||||||
Deferred income tax liability | 3,158 | |||||||||||||
Other long-term liabilities | 14,630 | |||||||||||||
Total liabilities | 405,919 | |||||||||||||
Shareholders’ equity: | ||||||||||||||
Accumulated deficit | (32,334) | |||||||||||||
Total shareholders’ equity | 598,856 | |||||||||||||
Total liabilities and shareholders’ equity | 1,004,775 | |||||||||||||
ASU 2016-02 | Adjustments | ||||||||||||||
Current assets: | ||||||||||||||
Prepaid expenses and other current assets | (370) | |||||||||||||
Total current assets | (370) | |||||||||||||
Property and equipment, net | (14,642) | |||||||||||||
Operating lease right-of-use assets | 51,854 | |||||||||||||
Total assets | 36,842 | |||||||||||||
Current liabilities: | ||||||||||||||
Other current liabilities | 6,090 | |||||||||||||
Total current liabilities | 6,090 | |||||||||||||
Operating lease liabilities | 45,294 | |||||||||||||
Deemed landlord liability, less current portion | (24,484) | |||||||||||||
Deferred income tax liability | 2,719 | |||||||||||||
Other long-term liabilities | (1,930) | |||||||||||||
Total liabilities | 27,689 | |||||||||||||
Shareholders’ equity: | ||||||||||||||
Accumulated deficit | 9,153 | |||||||||||||
Total shareholders’ equity | 9,153 | |||||||||||||
Total liabilities and shareholders’ equity | $ 36,842 |
Contract Assets and Contract _3
Contract Assets and Contract Liabilities - Summary of Accounts Receivable and Unbilled, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Revenue From Contract With Customer [Abstract] | ||||
Accounts receivable | $ 127,877 | $ 85,120 | ||
Unbilled receivables | 28,368 | 49,361 | ||
Less: allowance for doubtful accounts | (583) | (1,032) | $ (673) | $ (3,222) |
Total accounts receivable and unbilled, net | $ 155,662 | $ 133,449 |
Contract Assets and Contract _4
Contract Assets and Contract Liabilities - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Revenue From Contract With Customer [Abstract] | ||
Unbilled receivables | $ 28,368 | $ 49,361 |
Advanced billings | $ 192,359 | $ 147,935 |
Contract Assets and Contract _5
Contract Assets and Contract Liabilities - Summary of Advanced Bllings (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Revenue From Contract With Customer [Abstract] | ||
Advanced billings | $ 192,359 | $ 147,935 |
Contract Assets and Contract _6
Contract Assets and Contract Liabilities - Schedule of Allowance for Doubtful Account Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue From Contract With Customer [Abstract] | |||
Allowance for doubtful accounts - beginning balance | $ (1,032) | $ (673) | $ (3,222) |
Current year provision | (263) | (791) | (250) |
Write-offs, recoveries and the effects of foreign currency exchange | 712 | 432 | 2,799 |
Allowance for doubtful accounts - ending balance | $ (583) | $ (1,032) | $ (673) |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property Plant and Equipment [Line Items] | ||
Property and equipment at cost | $ 78,921 | $ 85,366 |
Less: Accumulated depreciation | (31,629) | (33,111) |
Property and equipment, net | 47,292 | 52,255 |
Land | ||
Property Plant and Equipment [Line Items] | ||
Property and equipment at cost | 1,577 | 1,240 |
Equipment | ||
Property Plant and Equipment [Line Items] | ||
Property and equipment at cost | 20,225 | 15,437 |
Furniture, fixtures, and leasehold improvements | ||
Property Plant and Equipment [Line Items] | ||
Property and equipment at cost | 24,624 | 20,892 |
Computer hardware, software, and phone equipment | ||
Property Plant and Equipment [Line Items] | ||
Property and equipment at cost | 15,958 | 11,566 |
Buildings | ||
Property Plant and Equipment [Line Items] | ||
Property and equipment at cost | 13,272 | 8,145 |
Deemed assets from landlord building construction | ||
Property Plant and Equipment [Line Items] | ||
Property and equipment at cost | 22,752 | |
Construction-in-Progress | ||
Property Plant and Equipment [Line Items] | ||
Property and equipment at cost | $ 3,265 | $ 5,334 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2011AgreementRenewalOption | |
Property Plant And Equipment [Abstract] | ||||
Depreciation | $ | $ 8,360 | $ 9,240 | $ 8,574 | |
Number of lease agreements | Agreement | 2 | |||
Lease occupancy year | 2012 | |||
Lease expiration year | 2027 | |||
Number of lease renewal, 10-year option | RenewalOption | 1 | |||
Lease term upon renewal | 10 years | |||
Term of lease | 15 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill And Intangible Assets [Line Items] | ||
Fair value assets measured on non-recurring basis | $ 1,143,071 | $ 967,933 |
Goodwill | 662,396 | $ 660,981 |
Accumulated goodwill impairment losses to date | 9,300 | |
Fair Value Measurement Non-Recurring | Level 3 | ||
Goodwill And Intangible Assets [Line Items] | ||
Fair value assets measured on non-recurring basis | 694,000 | |
Goodwill | 662,400 | |
Indefinite-lived intangible assets | $ 31,600 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-lived intangible assets: | ||
Total finite-lived intangible assets | $ 202,600 | $ 202,600 |
Accumulated amortization: | ||
Total accumulated amortization | (179,896) | (165,067) |
Total finite-lived intangible assets, net | 22,704 | 37,533 |
Trade name (indefinite-lived) | 31,646 | 31,646 |
Total intangible assets, net | 54,350 | 69,179 |
Customer Relationships | ||
Finite-lived intangible assets: | ||
Total finite-lived intangible assets | 145,051 | 145,051 |
Accumulated amortization: | ||
Total accumulated amortization | (122,426) | (110,636) |
Developed Technologies | ||
Finite-lived intangible assets: | ||
Total finite-lived intangible assets | 54,475 | 54,475 |
Accumulated amortization: | ||
Total accumulated amortization | (54,475) | (51,751) |
Other | ||
Finite-lived intangible assets: | ||
Total finite-lived intangible assets | 3,074 | 3,074 |
Accumulated amortization: | ||
Total accumulated amortization | $ (2,995) | $ (2,680) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2020 | $ 7,876 | |
2021 | 5,114 | |
2022 | 3,353 | |
2023 | 2,199 | |
2024 | 1,443 | |
Later years | 2,719 | |
Total finite-lived intangible assets, net | $ 22,704 | $ 37,533 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued Liabilities And Other Liabilities [Abstract] | ||
Employee compensation and benefits | $ 34,119 | $ 31,344 |
Project related reimbursable expenses | 68,696 | 51,109 |
Other | 6,437 | 5,040 |
Total accrued expenses | $ 109,252 | $ 87,493 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Less unamortized discount | $ 0 | $ (282) |
Long-term debt, net, less current portion | 0 | 79,721 |
Term loan | ||
Debt Instrument [Line Items] | ||
Debt | 0 | 80,438 |
Less unamortized term loan debt issuance costs | $ 0 | $ (435) |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Sep. 30, 2019 | Dec. 08, 2016 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||||||
Drawn amount | $ 0 | $ 0 | $ 100,000,000 | |||||
Unamortized issue discount | 0 | 282,000 | ||||||
Cash and cash equivalents | 131,920,000 | $ 23,275,000 | ||||||
Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding borrowings | 0 | |||||||
Outstanding letters of credit | 200,000 | |||||||
Maximum | Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, principal amount | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | |||||
Loan Agreement | Prior Senior Secured Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Drawn amount | 0 | |||||||
Unamortized term loan issuance fees | 0 | 0 | ||||||
Accrued commitment fees | $ 100,000 | |||||||
Amortized loan issuance fees | 700,000 | |||||||
Loan Agreement | Selling, General and Administrative Expenses | Prior Senior Secured Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Amortized loan issuance fees | 500,000 | |||||||
Loan Agreement | Interest Expense, Net | Prior Senior Secured Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Amortized loan issuance fees | $ 200,000 | |||||||
Loan Agreement | Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis points | 1.00% | |||||||
Debt instrument, term | 364 days | |||||||
Prior Senior Secured Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Description of variable interest rate basis | Borrowings under the Prior Senior Secured Credit Facilities bore interest at a rate equal to, at our option, either (i) the adjusted Eurocurrency rate based on LIBOR for U.S. dollar deposits for loans denominated in dollars, EURIBOR for Euro deposits for loans denominated in Euros and the offer rate for any other currencies for loans denominated in such other currencies for the relevant interest period plus an applicable margin from 1.25% to 2.25% based on the total net leverage ratio from less than 1.50:1.00 to greater than 3.75:1:00, or (ii) an alternative base rate (determined by reference to the highest of (a) the prime commercial lending rate of the administrative agent, as established from time to time, (b) the Federal Funds Rate plus 0.50% and (c) the one-month adjusted Eurocurrency rate for loans in U.S. dollars plus 1.00%) plus an applicable margin from 0.25% to 1.25% based on the total net leverage ratio from less than 1.50:1.00 to greater than 3.75:1:00. The applicable margin as of December 31, 2018 was 1.25% for eurocurrency loans and 0.25% for base rate loans. | |||||||
Ratio of consolidated funded indebtedness to consolidated EBITDA | 4 | |||||||
Prior Senior Secured Credit Agreement | Eurocurrency Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis points | 1.25% | |||||||
Prior Senior Secured Credit Agreement | Federal Funds Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis points | 0.50% | |||||||
Prior Senior Secured Credit Agreement | One-Month Adjusted Eurocurrency Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis points | 1.00% | |||||||
Prior Senior Secured Credit Agreement | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis points | 0.25% | |||||||
Prior Senior Secured Credit Agreement | Prior Senior Secured Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding borrowings | $ 0 | |||||||
Outstanding letters of credit | $ 200,000 | |||||||
Maximum borrowing capacity | $ 150,000,000 | |||||||
Expiration date | 2021-12 | |||||||
Commitment fee percentage | 0.375% | |||||||
Total net leverage ratio limit to determine commitment fee | 3 | |||||||
Undrawn capacity | $ 149,800,000 | |||||||
Prior Senior Secured Credit Agreement | Prior Senior Secured Revolving Credit Facility | Prior Senior Secured Credit Facilities - Scenario 1 | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee percentage | 0.50% | |||||||
Prior Senior Secured Credit Agreement | Prior Senior Secured Revolving Credit Facility | Prior Senior Secured Credit Facilities - Scenario 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee percentage | 0.375% | |||||||
Prior Senior Secured Credit Agreement | Prior Senior Secured Revolving Credit Facility | Eurocurrency Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate applicable | 3.77% | |||||||
Prior Senior Secured Credit Agreement | Minimum | Eurocurrency Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis points | 1.25% | |||||||
Debt instrument, total net leverage ratio | 3.75 | |||||||
Prior Senior Secured Credit Agreement | Minimum | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis points | 0.25% | |||||||
Debt instrument, total net leverage ratio | 3.75 | |||||||
Prior Senior Secured Credit Agreement | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Ratio of consolidated funded indebtedness to consolidated EBITDA | 4.50 | |||||||
Cash consideration | $ 25,000,000 | |||||||
Ratio of consolidated EBITDA to consolidated interest expense | 3 | |||||||
Prior Senior Secured Credit Agreement | Maximum | Unrestricted | ||||||||
Debt Instrument [Line Items] | ||||||||
Cash and cash equivalents | $ 50,000,000 | |||||||
Prior Senior Secured Credit Agreement | Maximum | Foreign | Unrestricted | ||||||||
Debt Instrument [Line Items] | ||||||||
Cash and cash equivalents | $ 25,000,000 | |||||||
Prior Senior Secured Credit Agreement | Maximum | Eurocurrency Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis points | 2.25% | |||||||
Debt instrument, total net leverage ratio | 1.50 | |||||||
Prior Senior Secured Credit Agreement | Maximum | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis points | 1.25% | |||||||
Debt instrument, total net leverage ratio | 1.50 | |||||||
Prior Senior Secured Credit Agreement | Prior Senior Secured Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Unamortized term loan issuance fees | $ 800,000 | $ 400,000 | ||||||
Maximum borrowing capacity | $ 165,000,000 | |||||||
Debt instrument percentage of face value issued | 99.70% | |||||||
Expiration date | 2021-12 | |||||||
Unamortized issue discount | $ 500,000 | $ 300,000 | ||||||
Prior Senior Secured Credit Agreement | Prior Senior Secured Term Loan Facility | Selling, General and Administrative Expenses | ||||||||
Debt Instrument [Line Items] | ||||||||
Unamortized term loan issuance fees | $ 300,000 | |||||||
Prior Senior Secured Credit Agreement | Prior Senior Secured Term Loan Facility | Interest Expense, Net | ||||||||
Debt Instrument [Line Items] | ||||||||
Amortization of debt discount | $ 200,000 | |||||||
Prior Senior Secured Credit Agreement | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate applicable | 3.77% | |||||||
Prior Senior Secured Credit Agreement | Prior Senior Secured Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Unamortized term loan issuance fees | $ 1,600,000 | $ 900,000 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019USD ($)Option | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2011 | |
Lessee Lease Description [Line Items] | ||||
Lease renewal term, operating lease | 10 years | |||
Lease not yet commenced, future payments | $ 133 | |||
Rent expense under ASC 840 | $ 9.2 | $ 7.9 | ||
Real Estate and Equipment | ||||
Lessee Lease Description [Line Items] | ||||
Lease renewal term, operating lease | 20 years | |||
Description of option to extend the lease | Many of the Company’s leases include options to extend the leases on a month to month basis or for set periods for up to 20 years. | |||
Operating lease, existense of option to extend | true | |||
Description of option to terminate the lease | Many leases also include options to terminate the leases within one year or per other contractual terms. | |||
Lessee, operating lease, existence of option to terminate | true | |||
Real Estate and Equipment | Minimum | ||||
Lessee Lease Description [Line Items] | ||||
Remaining lease term, operating lease | 1 year | |||
Real Estate and Equipment | Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Remaining lease term, operating lease | 20 years | |||
Operating lease, options to terminate lease term | 1 year | |||
Corporate Offices | ||||
Lessee Lease Description [Line Items] | ||||
Initial term of operating lease not yet commenced | 20 years | |||
Lease not yet commenced, option to extend | true | |||
Lease not yet commenced, option to extend description | renewal option for two 10-year terms at prevailing market rates. | |||
Operating lease not yet commenced, renewal term | 10 years | |||
Operating lease not yet commenced, number of renewal option | Option | 2 | |||
Corporate Offices | Cincinnati, Ohio | ||||
Lessee Lease Description [Line Items] | ||||
Lease not yet commenced, future payments | $ 124 |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lease Cost [Abstract] | |
Operating lease cost | $ 13,151 |
Variable lease cost | $ 2,813 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 9,773 |
Right-of-use assets obtained in exchange for lease obligations: | |
Operating leases | $ 10,294 |
Leases - Summary of Supplemen_2
Leases - Summary of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets And Liabilities Lessee [Abstract] | ||
Operating lease right-of-use assets | $ 52,152 | $ 0 |
Other current liabilities | $ 10,977 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | |
Operating lease liabilities | $ 45,212 | $ 0 |
Total operating lease liabilities | $ 56,189 | |
Weighted Average Remaining Lease Term (years) | ||
Operating leases | 6 years 3 months 18 days | |
Weighted Average Discount Rate | ||
Operating leases | 6.00% |
Leases - Schedule of Lease Paym
Leases - Schedule of Lease Payments Due Related To Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Lease Liabilities Payments Due [Line Items] | |
2020 | $ 13,244 |
2021 | 13,035 |
2022 | 9,931 |
2023 | 7,529 |
2024 | 6,488 |
Later years | 18,309 |
Total lease payments | 68,536 |
Less: imputed interest | (12,347) |
Total | 56,189 |
Related Party | |
Operating Lease Liabilities Payments Due [Line Items] | |
2020 | 5,600 |
2021 | 5,600 |
2022 | 5,267 |
2023 | 3,613 |
2024 | 3,613 |
Later years | 9,665 |
Total lease payments | 33,358 |
Less: imputed interest | (6,162) |
Total | 27,196 |
Non-Related Party | |
Operating Lease Liabilities Payments Due [Line Items] | |
2020 | 7,644 |
2021 | 7,435 |
2022 | 4,664 |
2023 | 3,916 |
2024 | 2,875 |
Later years | 8,644 |
Total lease payments | 35,178 |
Less: imputed interest | (6,185) |
Total | $ 28,993 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Rental Payments for Lease Obligations under ASC 840 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leased Assets [Line Items] | |
Operating Leases, 2019 | $ 8,173 |
Operating Leases, 2020 | 13,460 |
Operating Leases, 2021 | 12,837 |
Operating Leases, 2022 | 10,451 |
Operating Leases, 2023 | 8,486 |
Operating Leases, Thereafter | 109,622 |
Operating Leases, Total minimum lease payments | 163,029 |
Related Party | |
Operating Leased Assets [Line Items] | |
Operating Leases, 2019 | 1,987 |
Operating Leases, 2020 | 6,843 |
Operating Leases, 2021 | 6,964 |
Operating Leases, 2022 | 6,757 |
Operating Leases, 2023 | 5,229 |
Operating Leases, Thereafter | 103,870 |
Operating Leases, Total minimum lease payments | 131,650 |
Non-Related Party | |
Operating Leased Assets [Line Items] | |
Operating Leases, 2019 | 6,186 |
Operating Leases, 2020 | 6,617 |
Operating Leases, 2021 | 5,873 |
Operating Leases, 2022 | 3,694 |
Operating Leases, 2023 | 3,257 |
Operating Leases, Thereafter | 5,752 |
Operating Leases, Total minimum lease payments | $ 31,379 |
Leases - Schedule of Minimum An
Leases - Schedule of Minimum Annual Payments Required in Conjunction with Landlord Liability under ASC 840 (Details) - Deemed Landlord Liabilities $ in Thousands | Dec. 31, 2018USD ($) |
Schedule Of Capital Leased Assets [Line Items] | |
Related Party Minimum Lease Payments, 2019 | $ 3,918 |
Related Party Minimum Lease Payments, 2020 | 3,988 |
Related Party Minimum Lease Payments, 2021 | 4,039 |
Related Party Minimum Lease Payments, 2022 | 4,092 |
Related Party Minimum Lease Payments, 2023 | 4,145 |
Related Party Minimum Lease Payments, Thereafter | 15,697 |
Related Party Minimum Lease Payments, Total | 35,879 |
Related Party Minimum Lease Payments, Interest, 2019 | 1,818 |
Related Party Minimum Lease Payments, Interest, 2020 | 1,662 |
Related Party Minimum Lease Payments, Interest, 2021 | 1,490 |
Related Party Minimum Lease Payments, Interest, 2022 | 1,301 |
Related Party Minimum Lease Payments, Interest, 2023 | 1,095 |
Related Party Minimum Lease Payments, Interest, Thereafter | 1,929 |
Related Party Minimum Lease Payments, Interest, Total | 9,295 |
Total Principal Amounts Due, 2019 | 2,100 |
Total Principal Amounts Due, 2020 | 2,326 |
Total Principal Amounts Due, 2021 | 2,549 |
Total Principal Amounts Due, 2022 | 2,791 |
Total Principal Amounts Due, 2023 | 3,050 |
Total Principal Amounts Due, Thereafter | 13,768 |
Total Principal Amounts Due, Total | $ 26,584 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 11, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted | 859,960 | 584,301 | 853,896 | ||
Actual tax benefits recognized related to stock-based compensation | $ 5.5 | $ 1 | $ 0.5 | ||
Vesting Equally on Second, Third and Fourth Anniversary of Grant Date Over Four Years | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted | 15,000 | ||||
2016 Incentive Award Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares registered and available for grant | 6,000,000 | ||||
Shares available for future stock compensation grants | 3,200,000 | 3,800,000 | |||
2016 Incentive Award Plan | Granted to Employees | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Awards granted to employees | 816,286 | 850,700 | 968,550 | ||
2016 Incentive Award Plan | Non-employee Directors | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted | 41,853 | 33,801 | |||
Award vesting description | These awards will vest on the earlier of (a) the day immediately preceding the date of the first annual meeting following the date of grant and (b) the first anniversary of the date of grant, subject to the non-employee director continuing in service through the applicable vesting date. | ||||
2016 Incentive Award Plan | Vesting After Four Years | Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted | 10,000 | 550,500 | 797,550 | ||
Award vesting period | 4 years | 4 years | 4 years | ||
2016 Incentive Award Plan | Vesting After Four Years | Restricted Stock Units (RSU) | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Award vesting period | 4 years | 4 years | 4 years | ||
Shares granted | 227,610 | 300,200 | 38,000 | ||
2016 Incentive Award Plan | Vesting After Four Years | Restricted Stock Awards (RSA) | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Award vesting period | 4 years | ||||
Shares granted | 118,000 | ||||
2016 Incentive Award Plan | Vesting After One Year | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted | 5,000 | ||||
Award vesting period | 1 year | ||||
2016 Incentive Award Plan | Fully-vested Awards | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted | 551,676 | ||||
2016 Incentive Award Plan | Vesting in Twelve Equal Monthly Installments | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted | 22,000 | ||||
2016 Incentive Award Plan | Vesting Over One Year | Non-employee Directors | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options granted | 41,346 | ||||
Award vesting period | 1 year | ||||
2016 Incentive Award Plan | Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation option terms | 10 years | ||||
2014 Equity Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation option terms | 7 years | ||||
2014 Equity Incentive Plan | Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Award vesting period | 4 years | ||||
2014 Equity Incentive Plan | Minimum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
2014 Incentive Award Plan | Stock Options | MPI | Tender Offer | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of vested options purchased by related party | 229,431 | ||||
2014 Incentive Award Plan | Stock Options | MPI | Selling, General and Administrative Expenses | Tender Offer | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 5.1 |
Shareholders' Equity -Schedule
Shareholders' Equity -Schedule of Weighted-Average Assumptions Used in BSM Model to Calculate Fair Value of Options (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions And Methodology [Abstract] | |||
Expected holding period - years | 2 years 7 months 6 days | 5 years 4 months 24 days | 5 years 4 months 24 days |
Expected volatility | 26.30% | 27.00% | 28.00% |
Risk-free interest rate | 2.00% | 2.80% | 2.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Grant Date Fair Value and Stock-based Compensation Expense Allocated (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 20,741 | $ 6,499 | $ 4,463 |
Stock Options | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Weighted average, grant date fair value | $ 14.06 | $ 11.51 | $ 8.54 |
Restricted Shares (RSAs and RSUs) | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Weighted average, grant date fair value | $ 60.53 | $ 49.38 | $ 31.90 |
Total Direct Costs | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 6,999 | $ 4,132 | $ 2,128 |
Selling, General and Administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 13,742 | $ 2,367 | $ 2,335 |
Shareholders' Equity - Schedu_2
Shareholders' Equity - Schedule of Stock Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | |||
Number of Stock Options, Outstanding - beginning of Period | 2,945,040 | 2,782,868 | 2,350,166 |
Number of Stock Options, Granted | 859,960 | 584,301 | 853,896 |
Number of Stock Options, Exercised | (399,368) | (169,771) | (116,787) |
Number of Stock Options, Forfeited/Expired | (375,561) | (252,358) | (304,407) |
Number of Stock Options, Outstanding - end of period | 3,030,071 | 2,945,040 | 2,782,868 |
Number of Stock Options, Exercisable - end of period | 1,435,088 | 1,096,116 | 917,592 |
Weighted Average Exercise Price, Outstanding - beginning of Period | $ 24.18 | $ 20.73 | $ 17.57 |
Weighted Average Exercise Price, Granted | 54.97 | 37.72 | 28.67 |
Weighted Average Exercise Price, Exercised | 16.19 | 14.98 | 15.52 |
Weighted Average Exercise Price, Forfeited/Expired | 19.91 | 23.69 | 20.55 |
Weighted Average Exercise Price, Outstanding - end of period | 34.50 | 24.18 | 20.73 |
Weighted Average Exercise Price, Exercisable - end of period | $ 38.62 | $ 16.01 | $ 15.40 |
Shareholders' Equity - Schedu_3
Shareholders' Equity - Schedule of Restricted Share Activity (Details) - Restricted Shares (RSAs and RSUs) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Outstanding and unvested - beginning of period | 421,200 | 183,629 | 59,258 |
Granted | 227,610 | 300,200 | 156,000 |
Vested | 0 | (29,629) | (29,629) |
Forfeited | (79,040) | (33,000) | (2,000) |
Outstanding and unvested - end of period | 569,770 | 421,200 | 183,629 |
Cumulative vested shares - end of period | 1,913,916 | 1,913,916 | 1,884,287 |
Shareholders' Equity - Schedu_4
Shareholders' Equity - Schedule of Stock Options Expected To Vest, Stock Options Exercisable, and Unvested Restricted Share Awards Expected To Vest (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Weighted Average Exercise Price, Number of stock options expected to vest | $ 34.50 | ||
Weighted Average Exercise Price, Total stock options exercisable - December 31, 2019 | $ 38.62 | $ 16.01 | $ 15.40 |
Number of stock options expected to vest | 3,030,071 | ||
Number of Restricted Shares expected to vest | 569,770 | ||
Weighted Average Remaining Life (Years), Number of stock options expected to vest | 4 years | ||
Weighted Average Remaining Life (Years), Total stock options exercisable - December 31, 2019 | 3 years 7 months 6 days | ||
Stock Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of stock options expected to vest | 3,030,071 | ||
Total stock options exercisable - December 31, 2019 | 1,435,088 | ||
Unrecognized compensation cost - December 31, 2019 | $ 5,884 | ||
Weighted average years over which unrecognized compensation cost will be recognized | 1 year 10 months 24 days | ||
RSAs | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Weighted average years over which unrecognized compensation cost will be recognized | 2 years 10 months 24 days | ||
Number of Restricted Shares expected to vest | 569,770 | ||
Unrecognized compensation cost - December 31, 2018 | $ 19,697 |
Shareholder's Equity - Schedule
Shareholder's Equity - Schedule of Aggregate Intrinsic Value of Stock Options Exercised, Fair Values of Awards Vested, and Share Based Liabilities Settled (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total intrinsic value of stock options exercised | $ 19,807 | $ 5,326 | $ 1,619 |
Total grant-date fair value of stock options vested | 12,117 | 1,417 | 1,317 |
Restricted Shares (RSAs and RSUs) | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total grant-date fair value of restricted shares vested | 0 | 447 | 447 |
Total settlement date fair value of restricted shares vested | $ 0 | $ 1,568 | $ 1,074 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Plan name | 401(k) plan | ||
Maximum annual contribution by employee, percentage of pre-tax earnings | 50.00% | ||
U.S. Employees | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Recognized cost of employee benefit plan | $ 3.1 | $ 2.7 | $ 2.3 |
Minimum period of service required for matching contribution eligibility | 1 year | ||
Minimum required period of service for employer contributions to fully vest | 3 years | ||
Non-U.S. Employees | Defined Contribution Arrangements | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Recognized cost of employee benefit plan | $ 1.2 | $ 1 | $ 0.9 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 1 Months Ended | 12 Months Ended | 24 Months Ended | ||
May 31, 2017USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($) | |
Income Tax Disclosure [Line Items] | |||||
U.S. federal corporate tax rate | 21.00% | 21.00% | 35.00% | ||
Tax Cuts and Jobs Act of 2017, accounting complete true or false | true | true | |||
Transition tax expense | $ 600,000 | ||||
Final transition tax liability | $ 700,000 | $ 700,000 | |||
Percentage of transition tax liability impact on effective tax rate | 0.001 | ||||
Provisional tax benefit | 3,400,000 | ||||
Final tax benefit | $ 0 | $ 195,000 | $ 3,418,000 | 3,600,000 | |
Percentage of tax benefit from adjustment of deferred tax assets and liabilities | 0.00% | 0.20% | 6.00% | ||
Deferred tax liability not recognized from undistributed earnings of foreign subsidiaries | $ 0 | 0 | |||
Deduction for dividends received in tax reform act | 100.00% | ||||
Dividends received from owned foreign corporations by us corporate shareholders | 10.00% | ||||
Foreign corporations shareholders holding period | 1 year | ||||
Amount of undistributed earnings of foreign subsidiaries for which deferred foreign withholding taxes not recorded | $ 21,100,000 | 21,100,000 | |||
Deferred tax assets, foreign operating loss carryforwards | $ 447,000 | 248,000 | 248,000 | ||
Deferred tax assets, valuation allowance | $ 755,000 | 169,000 | 169,000 | ||
Percentage of foreign net operating loss carryforward over indefinite period | 28.00% | ||||
Deferred tax assets | $ 21,100,000 | ||||
Deferred tax liabilities | $ 100,000 | ||||
Liability for interest and penalties | $ 1,400,000 | 1,000,000 | 1,000,000 | ||
Liability for uncertain tax position | $ 8,200,000 | 7,200,000 | $ 7,200,000 | ||
Number of tax years | 4 years | ||||
IRC Section 382 Ownership Shift | |||||
Income Tax Disclosure [Line Items] | |||||
Disposal of deferred tax assets | 7,400,000 | ||||
Reduction in deferred credit | 6,900,000 | ||||
Net increase in tax expense | $ 500,000 | ||||
NephroGenex, Inc. | |||||
Income Tax Disclosure [Line Items] | |||||
Deferred tax assets | $ 22,200,000 | ||||
Tax effected net operating losses | 13,500,000 | ||||
Tax effected capitalized research and development expenses | 8,500,000 | ||||
Tax effected federal tax credits | 200,000 | ||||
Deferred tax liabilities | $ 100,000 | ||||
Minimum | |||||
Income Tax Disclosure [Line Items] | |||||
Foreign net operating loss carryforwards expiration year | 2020 | ||||
Maximum | |||||
Income Tax Disclosure [Line Items] | |||||
Foreign net operating loss carryforwards expiration year | 2029 | ||||
U.S. State and Local | |||||
Income Tax Disclosure [Line Items] | |||||
Tax credits carryforward expiration year | 2024 | ||||
Foreign Tax Authority | |||||
Income Tax Disclosure [Line Items] | |||||
Deferred tax assets, valuation allowance | $ 400,000 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 117,326 | $ 88,014 | $ 52,986 |
Foreign jurisdictions | 7,506 | 5,937 | 3,959 |
Income before income taxes | $ 124,832 | $ 93,951 | $ 56,945 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments [Abstract] | |||
U.S. Federal, Current | $ 10,577 | $ 13,372 | $ 10,953 |
U.S. Federal, Deferred | 8,922 | 4,172 | 3,466 |
U.S. Federal, Total | 19,499 | 17,544 | 14,419 |
U.S. state and local, Current | 1,761 | 1,912 | 2,032 |
U.S. state and local, Deferred | 987 | (116) | 51 |
U.S. state and local, Total | 2,748 | 1,796 | 2,083 |
Foreign jurisdictions, Current | 2,023 | 1,408 | 1,576 |
Foreign jurisdictions, Deferred | 119 | 18 | (255) |
Foreign jurisdictions, Total | 2,142 | 1,426 | 1,321 |
Income tax provision (benefit), Current | 14,361 | 16,692 | 14,561 |
Income tax provision (benefit), Deferred | 10,028 | 4,074 | 3,262 |
Income tax provision (benefit), Total | $ 24,389 | $ 20,766 | $ 17,823 |
Income Taxes - Summary Of Diffe
Income Taxes - Summary Of Difference Between Statutory Rate for Federal Income Tax and Effective Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense calculated at the federal statutory rate | $ 26,215 | $ 19,730 | $ 19,931 | |
State and local taxes, net of federal benefit | 2,021 | 1,978 | 1,606 | |
Tax on foreign earnings, net of tax credits and deductions | 593 | 172 | (69) | |
Tax reform adjustment | 0 | (195) | (3,418) | $ (3,600) |
Write off of Deferred Tax Assets | 0 | 509 | 0 | |
Deferred credit | (802) | (802) | (1,053) | |
Stock-based awards | (3,011) | (651) | (179) | |
Tax reform | 0 | 126 | 574 | |
Deduction for FDII | (2,283) | 0 | 0 | |
Other | 964 | 687 | 483 | |
State/Local tax credits | (793) | (1,253) | (1,187) | |
Foreign tax credits | 0 | (727) | 0 | |
Change in liability for uncertain tax positions | 1,325 | 1,102 | 1,141 | |
Other | 160 | 90 | (6) | |
Income tax provision (benefit), Total | $ 24,389 | $ 20,766 | $ 17,823 | |
Income tax expense calculated at the federal statutory rate | 21.00% | 21.00% | 35.00% | |
State and local taxes, net of federal benefit | 1.60% | 2.10% | 2.80% | |
Tax on foreign earnings, net of tax credits and deductions | 0.40% | 0.20% | (0.10%) | |
Tax reform adjustment | 0.00% | (0.20%) | (6.00%) | |
Write off of Deferred Tax Assets | 0.00% | 0.60% | 0.00% | |
Deferred credit | (0.60%) | (0.90%) | (1.90%) | |
Stock-based awards | (2.40%) | (0.70%) | (0.30%) | |
Tax reform | 0.10% | 1.00% | ||
Deduction for FDII | (1.80%) | 0.00% | 0.00% | |
Other | 0.80% | 0.70% | 0.90% | |
State/Local tax credits | (0.60%) | (1.30%) | (2.10%) | |
Foreign tax credits | 0.00% | (0.80%) | 0.00% | |
Change in liability for uncertain tax positions | 1.00% | 1.20% | 2.00% | |
Other | 0.10% | 0.10% | 0.00% | |
Effective Income Tax Rate Reconciliation, Percent | 19.50% | 22.10% | 31.30% |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components of Company's Net Deferred Tax Asset (Liability) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Accrued liabilities | $ 12,229 | $ 18,670 |
Depreciation and amortization | 1,121 | 872 |
Foreign operating loss carryforward | 447 | 248 |
U.S. state and local tax credits and carryforward | 184 | 223 |
Other | 96 | 41 |
Valuation allowance | (755) | (169) |
Total deferred tax assets | 13,322 | 19,885 |
Deferred tax liabilities: | ||
Depreciation and amortization | (21,787) | (18,803) |
Prepaid expenses | (808) | (550) |
Advanced billings | (3,147) | 0 |
Other | (53) | (258) |
Total deferred tax liabilities | (25,795) | (19,611) |
Net deferred tax liability | $ (12,473) | |
Net deferred tax asset | $ 274 |
Income Taxes - Schedule of Annu
Income Taxes - Schedule of Annual Activity Related to Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Beginning Balance | $ 169 | $ 2,394 | $ 987 |
Additions charged to expense | 375 | 0 | 0 |
Additions due to asset acquisition | 265 | 0 | 2,033 |
Reductions from utilization, reassessments and expirations | (54) | (2,225) | 3 |
Remeasurement due to effect of tax reform | 0 | 0 | (629) |
Ending Balance | $ 755 | $ 169 | $ 2,394 |
Income Taxes - Schedule of Gros
Income Taxes - Schedule of Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 8,525 | $ 6,890 | $ 5,698 |
Increases in tax positions for prior years | 0 | 0 | 5 |
Decreases in tax positions for prior years | (888) | (579) | 0 |
Increases in tax positions for current year | 2,081 | 2,214 | 1,187 |
Lapse in statute of limitations | 0 | 0 | 0 |
Ending Balance | $ 9,718 | $ 8,525 | $ 6,890 |
Commitments, Contingencies, a_2
Commitments, Contingencies, and Guarantees - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Commitments And Contingencies Disclosure [Abstract] | |
Minimum purchase commitments for project related supplies | $ 11.9 |
Minimum purchase commitments, description | The Company has several minimum purchase commitments for project related supplies totaling $11.9 million as of December 31, 2019. In return for the commitment, Medpace receives preferential pricing. The commitments expire at various times through 2026. |
Miscellaneous (Expense) Incom_2
Miscellaneous (Expense) Income, Net - Components of Miscellaneous (Expense) Income, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Income And Expenses [Abstract] | |||
Net (loss) gain on foreign-currency transactions | $ (581) | $ 386 | $ (1,004) |
Other (expense) income | (282) | 674 | 650 |
Miscellaneous (expense) income, net | $ (863) | $ 1,060 | $ (354) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) | Jan. 11, 2017USD ($) | Sep. 30, 2018Director | Jun. 30, 2017USD ($) | Dec. 31, 2019USD ($)AgreementRenewalOptionBuilding | Dec. 31, 2018USD ($)RenewalOption | Dec. 31, 2017USD ($) | Dec. 31, 2011AgreementRenewalOption | Dec. 31, 2016Parcel | Dec. 31, 2012USD ($) |
Related Party Transaction [Line Items] | |||||||||
Accounts receivable and unbilled, net | $ 1,900,000 | $ 3,800,000 | |||||||
Advanced billings | $ 3,000,000 | 400,000 | |||||||
Term of lease | 15 years | ||||||||
Number of lease renewal, 10-year option | RenewalOption | 1 | ||||||||
Lease term upon renewal | 10 years | ||||||||
Operating lease cost recognized | $ 13,151,000 | ||||||||
Lease expense recognized under 840 | 9,200,000 | $ 7,900,000 | |||||||
Operating lease right-of-use assets | 52,152,000 | 0 | |||||||
Current portion of lease liability | 10,977,000 | ||||||||
Long-term portion of lease liabilities | 45,212,000 | 0 | |||||||
Lease expiration year | 2027 | ||||||||
Number of lease agreements | Agreement | 2 | ||||||||
Lease occupancy year | 2012 | ||||||||
Deemed landlord liability, long-term portions, under ASC 840 | 0 | 24,484,000 | |||||||
Accounts payable due to related parties | 200,000 | 300,000 | |||||||
Cinven | |||||||||
Related Party Transaction [Line Items] | |||||||||
Members of board of directors resigned as result of remaining shares of common stock sold | Director | 3 | ||||||||
Travel expenses with related party | 100,000 | ||||||||
Director fees with related party | 100,000 | 100,000 | |||||||
Cinven | Maximum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Travel expenses with related party | 100,000 | ||||||||
Employee Loans | Prepaid Expenses and Other Current Assets and Other Assets | |||||||||
Related Party Transaction [Line Items] | |||||||||
Employee advances receivables | 200,000 | $ 200,000 | |||||||
Service Agreements | Coherus Bio Sciences Inc | |||||||||
Related Party Transaction [Line Items] | |||||||||
Amount of investment | $ 2,500,000 | ||||||||
Service agreement cancellation notice period | 30 days | ||||||||
Revenue with related parties | 8,000,000 | ||||||||
Reimbursed out-of-pocket expenses with related parties | 1,300,000 | ||||||||
Service Agreements | Xenon | |||||||||
Related Party Transaction [Line Items] | |||||||||
Revenue with related parties | $ 600,000 | ||||||||
Reimbursed out-of-pocket revenue with related parties | 100,000 | ||||||||
Reimbursed out-of-pocket expenses with related parties | $ 100,000 | ||||||||
Service Agreements | Cymabay | |||||||||
Related Party Transaction [Line Items] | |||||||||
Revenue with related parties | 600,000 | ||||||||
Accounts receivable and unbilled, net | 1,400,000 | $ 2,500,000 | |||||||
Advanced billings | 1,600,000 | ||||||||
Service Agreements | Cymabay | Revenue Net | |||||||||
Related Party Transaction [Line Items] | |||||||||
Revenue with related parties | 13,200,000 | 10,800,000 | |||||||
Service Agreements | Cymabay | Maximum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Advanced billings | 100,000 | ||||||||
Service Agreements | LIB | |||||||||
Related Party Transaction [Line Items] | |||||||||
Revenue with related parties | 1,400,000 | ||||||||
Accounts receivable and unbilled, net | 300,000 | 1,000,000 | |||||||
Advanced billings | 500,000 | 300,000 | |||||||
Service Agreements | LIB | Revenue Net | |||||||||
Related Party Transaction [Line Items] | |||||||||
Revenue with related parties | 2,000,000 | 3,700,000 | |||||||
Service Agreements | CinRx Pharma and Subsidiaries | |||||||||
Related Party Transaction [Line Items] | |||||||||
Revenue with related parties | 400,000 | ||||||||
Accounts receivable and unbilled, net | 200,000 | 400,000 | |||||||
Advanced billings | 900,000 | 100,000 | |||||||
Service Agreements | CinRx Pharma and Subsidiaries | Revenue Net | |||||||||
Related Party Transaction [Line Items] | |||||||||
Revenue with related parties | 3,700,000 | 500,000 | |||||||
Service Agreements | The Summit | |||||||||
Related Party Transaction [Line Items] | |||||||||
Expenses incurred | $ 600,000 | $ 400,000 | |||||||
Purchase of Real Estate Properties | Chief Executive Officer | |||||||||
Related Party Transaction [Line Items] | |||||||||
Number of parcel in real estate property | Parcel | 4 | ||||||||
Purchase price of real estate property | $ 400,000 | ||||||||
Transaction closed date | Jan. 11, 2017 | ||||||||
Leased Real Estate | |||||||||
Related Party Transaction [Line Items] | |||||||||
Number of lease renewal, 10-year option | RenewalOption | 2 | ||||||||
Lease term upon renewal | 10 years | ||||||||
Lease expiration year | 2040 | ||||||||
Leased Real Estate | Chief Executive Officer | |||||||||
Related Party Transaction [Line Items] | |||||||||
Term of lease | 12 years | ||||||||
Lease expiration period | 2022-11 | ||||||||
Number of lease renewal, 10-year option | RenewalOption | 1 | ||||||||
Lease term upon renewal | 10 years | ||||||||
Lease expense recognized under 840 | $ 2,200,000 | 2,100,000 | |||||||
Leased Real Estate | Chief Executive Officer | Direct Service Costs, Excluding Depreciation and Amortization, and Selling, General and Administrative | |||||||||
Related Party Transaction [Line Items] | |||||||||
Operating lease cost recognized | $ 2,000,000 | ||||||||
Leased Real Estate | Chief Executive Officer And Immediate Family | |||||||||
Related Party Transaction [Line Items] | |||||||||
Term of lease | 15 years | ||||||||
Number of lease renewal, 10-year option | RenewalOption | 1 | ||||||||
Lease term upon renewal | 10 years | ||||||||
Lease expiration year | 2027 | ||||||||
Number of lease agreements | Agreement | 2 | ||||||||
Number of buildings | Building | 2 | ||||||||
Lease occupancy year | 2012 | ||||||||
Related party capital lease payments under ASC 840 | 3,800,000 | 3,800,000 | |||||||
Deemed landlord liability, current, under ASC 840 | 2,100,000 | ||||||||
Deemed landlord liability, long-term portions, under ASC 840 | 24,500,000 | ||||||||
Leased Real Estate | Chief Executive Officer And Immediate Family | Direct Service Costs, Excluding Depreciation and Amortization, and Selling, General and Administrative | |||||||||
Related Party Transaction [Line Items] | |||||||||
Operating lease cost recognized | $ 3,600,000 | ||||||||
Leased Real Estate | Operating Lease Right-of-Use Assets | Chief Executive Officer | |||||||||
Related Party Transaction [Line Items] | |||||||||
Operating lease right-of-use assets | 5,300,000 | ||||||||
Leased Real Estate | Operating Lease Right-of-Use Assets | Chief Executive Officer And Immediate Family | |||||||||
Related Party Transaction [Line Items] | |||||||||
Operating lease right-of-use assets | 21,900,000 | ||||||||
Leased Real Estate | Other Current Liabilities | Chief Executive Officer | |||||||||
Related Party Transaction [Line Items] | |||||||||
Current portion of lease liability | 1,800,000 | ||||||||
Leased Real Estate | Other Current Liabilities | Chief Executive Officer And Immediate Family | |||||||||
Related Party Transaction [Line Items] | |||||||||
Current portion of lease liability | 2,300,000 | ||||||||
Leased Real Estate | Operating Lease Liabilities | Chief Executive Officer | |||||||||
Related Party Transaction [Line Items] | |||||||||
Long-term portion of lease liabilities | 3,500,000 | ||||||||
Leased Real Estate | Operating Lease Liabilities | Chief Executive Officer And Immediate Family | |||||||||
Related Party Transaction [Line Items] | |||||||||
Long-term portion of lease liabilities | 19,700,000 | ||||||||
Leased Real Estate | Property and Equipment, Net | Chief Executive Officer And Immediate Family | Building | |||||||||
Related Party Transaction [Line Items] | |||||||||
Deemed assets, net, under ASC 840 | 14,600,000 | ||||||||
Travel Services | Chief Executive Officer | |||||||||
Related Party Transaction [Line Items] | |||||||||
Travel expenses with related party | 1,200,000 | 1,300,000 | $ 1,100,000 | ||||||
Accounts payable due to related parties | $ 200,000 | ||||||||
Travel Services | Chief Executive Officer | Maximum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Accounts payable due to related parties | $ 100,000 |
Cash Flow Statement - Supplem_2
Cash Flow Statement - Supplemental Information - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Supplemental Cash Flow Information [Abstract] | |
Acquisition of net assets | $ 0.7 |
Deferred tax assets, net | 21.1 |
Deferred tax liabilities, net | 0.1 |
Deferred credits within other long term liabilities | 20.3 |
Accounts receivable and unbilled, net | 0.6 |
Other assets | $ 0.1 |
Entity Wide Disclosures - Addit
Entity Wide Disclosures - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
U.S. | Total Revenue | Geographical Locations | ||
Product And Services Information [Line Items] | ||
Percentage of total revenue to consolidated total revenue | 95.00% | 97.00% |
Entity Wide Disclosures - Summa
Entity Wide Disclosures - Summary of Property and Equipment, Net by Geographic Region (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property and equipment, net: | ||
Property and equipment, net | $ 47,292 | $ 52,255 |
U.S. | ||
Property and equipment, net: | ||
Property and equipment, net | 25,603 | 38,609 |
Europe, Belgium | ||
Property and equipment, net: | ||
Property and equipment, net | 10,045 | 6,014 |
Europe, Other | ||
Property and equipment, net: | ||
Property and equipment, net | 5,728 | 5,500 |
Europe | ||
Property and equipment, net: | ||
Property and equipment, net | 15,773 | 11,514 |
Asia-Pacific | ||
Property and equipment, net: | ||
Property and equipment, net | 5,671 | 1,930 |
Other | ||
Property and equipment, net: | ||
Property and equipment, net | $ 245 | $ 202 |
Entity Wide Disclosures - Sum_2
Entity Wide Disclosures - Summary of Revenue by Major Source (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | |||||||||||
Total revenue | $ 229,886 | $ 216,238 | $ 214,104 | $ 200,741 | $ 192,115 | $ 179,253 | $ 170,144 | $ 163,077 | $ 860,969 | $ 704,589 | $ 436,152 |
Oncology | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Total revenue | 256,766 | 189,056 | |||||||||
Other | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Total revenue | 222,514 | 163,983 | |||||||||
Metabolic | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Total revenue | 138,650 | 124,837 | |||||||||
Cardiology | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Total revenue | 91,258 | 95,213 | |||||||||
AVAI | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Total revenue | 86,390 | 77,271 | |||||||||
Central Nervous System | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Total revenue | 65,391 | 54,229 | |||||||||
Revenue Net | |||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||
Total revenue | $ 860,969 | $ 704,589 | $ 0 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) - Schedule of Unaudited Quarterly Results of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue, net | $ 229,886 | $ 216,238 | $ 214,104 | $ 200,741 | $ 192,115 | $ 179,253 | $ 170,144 | $ 163,077 | $ 860,969 | $ 704,589 | $ 436,152 |
Total direct costs | 167,187 | 152,070 | 150,312 | 145,703 | 131,133 | 123,996 | 116,676 | 117,254 | 615,272 | 489,059 | 261,463 |
Income from operations | 36,118 | 29,991 | 35,259 | 25,895 | 30,666 | 26,918 | 23,345 | 20,119 | 127,263 | 101,048 | 64,858 |
Net income | $ 29,813 | $ 23,977 | $ 27,455 | $ 19,198 | $ 22,761 | $ 19,305 | $ 16,568 | $ 14,551 | $ 100,443 | $ 73,185 | $ 39,122 |
Net income per share attributable to common shareholders - Basic | $ 0.82 | $ 0.67 | $ 0.76 | $ 0.54 | $ 0.64 | $ 0.54 | $ 0.46 | $ 0.41 | $ 2.79 | $ 2.05 | $ 1 |
Net income per share attributable to common shareholders - Diluted | $ 0.78 | $ 0.63 | $ 0.73 | $ 0.51 | $ 0.61 | $ 0.52 | $ 0.45 | $ 0.40 | $ 2.67 | $ 1.97 | $ 0.98 |