ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Georgia | 58-2213805 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
600 Galleria Parkway | 30339-5986 | |
Suite 100 | (Zip Code) | |
Atlanta, Georgia | ||
(Address of principal executive offices) |
¨ Large accelerated filer | ý | Accelerated filer | ||
¨ Non-accelerated filer (Do not check if a smaller reporting company) | ¨ | Smaller reporting company | ||
¨ | Emerging growth company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ |
Page No. | |
Part I. Financial Information | |
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2018 and 2017 | |
Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2018 and 2017 | |
Part II. Other Information | |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Revenue, net | $ | 36,721 | $ | 33,569 | ||||
Operating expenses: | ||||||||
Cost of revenue | 24,797 | 23,026 | ||||||
Selling, general and administrative expenses | 11,264 | 10,535 | ||||||
Depreciation of property and equipment | 1,223 | 1,220 | ||||||
Amortization of intangible assets | 788 | 722 | ||||||
Total operating expenses | 38,072 | 35,503 | ||||||
Operating loss from continuing operations | (1,351 | ) | (1,934 | ) | ||||
Foreign currency transaction gains on short-term intercompany balances | (220 | ) | (552 | ) | ||||
Interest expense, net | 398 | 37 | ||||||
Other loss (income) | 12 | (199 | ) | |||||
Loss from continuing operations before income tax | (1,541 | ) | (1,220 | ) | ||||
Income tax expense | 787 | 627 | ||||||
Net loss from continuing operations | $ | (2,328 | ) | $ | (1,847 | ) | ||
Discontinued operations: | ||||||||
Loss from discontinued operations | $ | (333 | ) | $ | (336 | ) | ||
Other loss | — | — | ||||||
Income tax expense (benefit) | — | — | ||||||
Net loss from discontinued operations | $ | (333 | ) | $ | (336 | ) | ||
Net loss | $ | (2,661 | ) | $ | (2,183 | ) | ||
Basic loss per common share (Note 2): | ||||||||
Basic loss from continuing operations | $ | (0.10 | ) | $ | (0.08 | ) | ||
Basic loss from discontinued operations | (0.01 | ) | (0.02 | ) | ||||
Total basic loss per common share | $ | (0.11 | ) | $ | (0.10 | ) | ||
Diluted loss per common share (Note 2): | ||||||||
Diluted loss from continuing operations | $ | (0.10 | ) | $ | (0.08 | ) | ||
Diluted loss from discontinued operations | (0.01 | ) | (0.02 | ) | ||||
Total diluted loss per common share | $ | (0.11 | ) | $ | (0.10 | ) | ||
Weighted-average common shares outstanding (Note 2): | ||||||||
Basic | 22,573 | 21,945 | ||||||
Diluted | 22,573 | 21,945 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Net loss | $ | (2,661 | ) | $ | (2,183 | ) | ||
Foreign currency translation adjustments | 275 | 275 | ||||||
Comprehensive loss | $ | (2,386 | ) | $ | (1,908 | ) |
March 31, 2018 | December 31, 2017 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 14,948 | $ | 18,823 | ||||
Restricted cash | 112 | 51 | ||||||
Receivables: | ||||||||
Contract receivables, less allowances of $1,261 in 2018 and $1,499 in 2017: | ||||||||
Billed | 30,102 | 36,058 | ||||||
Unbilled | 2,477 | 2,709 | ||||||
32,579 | 38,767 | |||||||
Employee advances and miscellaneous receivables, less allowances of $314 in 2018 and $292 in 2017 | 1,748 | 1,665 | ||||||
Total receivables | 34,327 | 40,432 | ||||||
Prepaid expenses and other current assets | 4,163 | 4,608 | ||||||
Total current assets | 53,550 | 63,914 | ||||||
Property and equipment | 76,377 | 73,566 | ||||||
Less accumulated depreciation and amortization | (57,553 | ) | (56,088 | ) | ||||
Property and equipment, net | 18,824 | 17,478 | ||||||
Goodwill | 17,691 | 17,648 | ||||||
Intangible assets, less accumulated amortization of $41,553 in 2018 and $40,461 in 2017 | 17,785 | 18,478 | ||||||
Unbilled receivables | 1,170 | 894 | ||||||
Deferred income taxes | 1,322 | 1,538 | ||||||
Other assets | 276 | 268 | ||||||
Total assets | $ | 110,618 | $ | 120,218 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 7,028 | $ | 8,548 | ||||
Accrued payroll and related expenses | 9,067 | 13,078 | ||||||
Refund liabilities | 8,032 | 7,864 | ||||||
Deferred revenue | 1,741 | 1,431 | ||||||
Current portion of debt (Note 5) | 48 | 48 | ||||||
Current portion of long-term incentive compensation liability | 914 | 5,116 | ||||||
Business acquisition obligations (Note 9) | 3,843 | 3,759 | ||||||
Total current liabilities | 30,673 | 39,844 | ||||||
Long-term debt (Note 5) | 13,534 | 13,526 | ||||||
Noncurrent business acquisition obligations (Note 9) | 5,263 | 5,135 | ||||||
Refund liabilities | 923 | 957 | ||||||
Other long-term liabilities | 424 | 442 | ||||||
Total liabilities | 50,817 | 59,904 | ||||||
Commitments and contingencies (Note 7) | ||||||||
Shareholders’ equity (Note 2): | ||||||||
Common stock, no par value; $.01 stated value per share. Authorized 50,000,000 shares; 23,094,617 shares issued and outstanding at March 31, 2018 and 22,419,417 shares issued and outstanding at December 31, 2017 | 231 | 224 | ||||||
Additional paid-in capital | 581,898 | 580,032 | ||||||
Accumulated deficit | (522,710 | ) | (520,049 | ) | ||||
Accumulated other comprehensive income | 382 | 107 | ||||||
Total shareholders’ equity | 59,801 | 60,314 | ||||||
Total liabilities and shareholders' equity | $ | 110,618 | $ | 120,218 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (2,661 | ) | $ | (2,183 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 2,011 | 1,944 | ||||||
Amortization of deferred loan costs | 8 | — | ||||||
Noncash interest expense | 278 | — | ||||||
Stock-based compensation expense | 1,945 | 1,566 | ||||||
Foreign currency transaction gains on short-term intercompany balances | (220 | ) | (552 | ) | ||||
Deferred income taxes | 169 | — | ||||||
Changes in operating assets and liabilities, net of business acquisitions: | ||||||||
Restricted cash | (61 | ) | (55 | ) | ||||
Billed receivables | 5,944 | 1,029 | ||||||
Unbilled receivables | (44 | ) | 1,008 | |||||
Prepaid expenses and other current assets | 369 | 306 | ||||||
Other assets | 16 | 395 | ||||||
Accounts payable and accrued expenses | (1,645 | ) | (1,036 | ) | ||||
Accrued payroll and related expenses | (4,060 | ) | (3,119 | ) | ||||
Refund liabilities | 144 | (241 | ) | |||||
Deferred revenue | 300 | 91 | ||||||
Long-term incentive compensation payout | (5,380 | ) | — | |||||
Other long-term liabilities | (82 | ) | (2,494 | ) | ||||
Net cash used in operating activities | (2,969 | ) | (3,341 | ) | ||||
Cash flows from investing activities: | ||||||||
Business acquisition, net of cash acquired | 19 | (10,140 | ) | |||||
Purchases of property and equipment, net of disposal proceeds | (2,520 | ) | (1,500 | ) | ||||
Net cash used in investing activities | (2,501 | ) | (11,640 | ) | ||||
Cash flows from financing activities: | ||||||||
Repayments of long-term debt | (1,500 | ) | — | |||||
Proceeds from term loan | 1,500 | 10,000 | ||||||
Restricted stock repurchased from employees for withholding taxes | (1,088 | ) | — | |||||
Proceeds from option exercises | 2,260 | 382 | ||||||
Net cash provided by financing activities | 1,172 | 10,382 | ||||||
Effect of exchange rates on cash and cash equivalents | 423 | 411 | ||||||
Net decrease in cash and cash equivalents | (3,875 | ) | (4,188 | ) | ||||
Cash and cash equivalents at beginning of period | 18,823 | 15,723 | ||||||
Cash and cash equivalents at end of period | $ | 14,948 | $ | 11,535 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid during the period for interest | $ | 141 | $ | 33 | ||||
Cash paid during the period for income taxes, net of refunds received | $ | 529 | $ | 891 |
Three Months Ended March 31, | ||||||||
Basic loss per common share: | 2018 | 2017 | ||||||
Numerator: | ||||||||
Net loss from continuing operations | $ | (2,328 | ) | $ | (1,847 | ) | ||
Net loss from discontinued operations | $ | (333 | ) | $ | (336 | ) | ||
Denominator: | ||||||||
Weighted-average common shares outstanding | 22,573 | 21,945 | ||||||
Basic loss per common share from continuing operations | $ | (0.10 | ) | $ | (0.08 | ) | ||
Basic loss per common share from discontinued operations | $ | (0.01 | ) | $ | (0.02 | ) | ||
Total basic loss per common share | $ | (0.11 | ) | $ | (0.10 | ) |
Results of Discontinued Operations | Three Months Ended March 31, | ||||||
(in thousands) | 2018 | 2017 | |||||
Revenue, net | $ | — | $ | — | |||
Cost of sales | 329 | 334 | |||||
Selling, general and administrative expense | 3 | — | |||||
Depreciation and amortization | 1 | 2 | |||||
Loss from discontinued operations before income taxes | $ | (333 | ) | $ | (336 | ) | |
Income tax expense | — | — | |||||
Net loss from discontinued operations | $ | (333 | ) | $ | (336 | ) |
Recovery Audit Services – Americas | Recovery Audit Services – Europe/Asia- Pacific | Adjacent Services | Corporate Support | Total | ||||||||||||||||
Three Months Ended March 31, 2018 | ||||||||||||||||||||
Revenue, net | $ | 25,958 | $ | 10,027 | $ | 736 | $ | — | $ | 36,721 | ||||||||||
Net loss from continuing operations | (2,328 | ) | ||||||||||||||||||
Income tax expense | 787 | |||||||||||||||||||
Interest expense, net | 398 | |||||||||||||||||||
EBIT | $ | 5,725 | $ | 1,548 | $ | (1,721 | ) | $ | (6,695 | ) | $ | (1,143 | ) | |||||||
Depreciation of property and equipment | 897 | 142 | 184 | — | 1,223 | |||||||||||||||
Amortization of intangible assets | 337 | 61 | 390 | — | 788 | |||||||||||||||
EBITDA | $ | 6,959 | $ | 1,751 | $ | (1,147 | ) | $ | (6,695 | ) | $ | 868 | ||||||||
Other loss (income) | — | 49 | — | (37 | ) | 12 | ||||||||||||||
Foreign currency transaction losses (gains) on short-term intercompany balances | 57 | (229 | ) | (9 | ) | (39 | ) | (220 | ) | |||||||||||
Transformation severance and related expenses | 63 | 543 | 68 | — | 674 | |||||||||||||||
Stock-based compensation | — | — | — | 1,945 | 1,945 | |||||||||||||||
Adjusted EBITDA | $ | 7,079 | $ | 2,114 | $ | (1,088 | ) | $ | (4,826 | ) | $ | 3,279 |
Recovery Audit Services – Americas | Recovery Audit Services – Europe/Asia- Pacific | Adjacent Services | Corporate Support | Total | ||||||||||||||||
Three Months Ended March 31, 2017 | ||||||||||||||||||||
Revenue, net | $ | 24,383 | $ | 7,831 | $ | 1,355 | $ | — | $ | 33,569 | ||||||||||
Net loss from continuing operations | (1,847 | ) | ||||||||||||||||||
Income tax expense | 627 | |||||||||||||||||||
Interest expense, net | 37 | |||||||||||||||||||
EBIT | $ | 5,986 | $ | 410 | $ | (1,740 | ) | $ | (5,839 | ) | $ | (1,183 | ) | |||||||
Depreciation of property and equipment | 910 | 140 | 170 | — | 1,220 | |||||||||||||||
Amortization of intangible assets | 329 | — | 393 | — | 722 | |||||||||||||||
EBITDA | $ | 7,225 | $ | 550 | $ | (1,177 | ) | $ | (5,839 | ) | $ | 759 | ||||||||
Other income | — | — | (199 | ) | — | (199 | ) | |||||||||||||
Foreign currency transaction gains on short-term intercompany balances | (163 | ) | (252 | ) | (3 | ) | (134 | ) | (552 | ) | ||||||||||
Transformation severance and related expenses | 76 | 138 | — | 369 | 583 | |||||||||||||||
Stock-based compensation | — | — | — | 1,566 | 1,566 | |||||||||||||||
Adjusted EBITDA | $ | 7,138 | $ | 436 | $ | (1,379 | ) | $ | (4,038 | ) | $ | 2,157 |
As of March 31, | As of December 31, | ||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||
Gross | DFC (1) | Net | Gross | DFC(1) | Net | ||||||||||||||||||
Revolving Facility | $ | 13,600 | $ | (116 | ) | $ | 13,484 | $ | 13,600 | $ | (131 | ) | $ | 13,469 | |||||||||
Capital lease obligations | 98 | — | 98 | 105 | — | 105 | |||||||||||||||||
Total debt | 13,698 | (116 | ) | 13,582 | 13,705 | (131 | ) | 13,574 | |||||||||||||||
Less: Current portion of long-term debt | 48 | — | 48 | 48 | — | 48 | |||||||||||||||||
Long-term debt, excluding current portion | $ | 13,650 | $ | (116 | ) | $ | 13,534 | $ | 13,657 | $ | (131 | ) | $ | 13,526 |
(1) | DFC refers to deferred financing costs related to the Company's long-term debt. |
Pricing Level | Leverage Ratio | Applicable Margin for LIBOR Index Rate Loans | Applicable Margin for Base Rate Loans | Applicable Percentage for Commitment Fee |
I | Less than 1.25:1.00 | 2.25% per annum | 1.25% per annum | 0.250% per annum |
II | Greater than or equal to 1.25:1.00 but less than 1.75:1.00 | 2.50% per annum | 1.50% per annum | 0.375% per annum |
III | Greater than or equal to 1.75:1.00 | 2.75% per annum | 1.75% per annum | 0.375% per annum |
Year Ended December 31 | ||||
2018 | $ | 37 | ||
2019 | 13,649 | |||
2020 | 12 | |||
Total | $ | 13,698 |
Accounts receivable, net | $ | 1,641 | ||
Commissions receivable | 48 | |||
Prepaid expenses | 109 | |||
Other current assets, net | 6 | |||
Intangible assets | 10,923 | |||
Goodwill | 3,534 | |||
Fixed assets, net | 323 | |||
Accounts payable | (125 | ) | ||
Accrued commissions | (537 | ) | ||
Total consideration paid | $ | 15,922 | ||
Contingent consideration | (5,954 | ) | ||
Total cash paid | $ | 9,968 |
Fair Value | Remaining useful life | |||||
Customer relationships | $ | 9,556 | 14 years | |||
Non-compete | 1,232 | 4 years | ||||
Trademarks | 135 | 4 years | ||||
$ | 10,923 |
Three Months Ended | ||||||||
March 31, 2018 | March 31, 2017 | |||||||
Revenue | $ | 3,947 | $ | 1,467 | ||||
Net income from continuing operations | $ | 558 | $ | 776 |
March 31, 2017 | ||||
Revenue (pro forma) | $ | 34,408 | ||
Net loss income from continuing operations (pro forma) | $ | (2,522 | ) |
• | Diverse client base - our clients include a diverse mix of discounters, grocery, pharmacy, department and other stores that tend to be impacted to varying degrees by general economic fluctuations, and even in opposite directions from each other depending on their position in the market and their market segment; |
• | Motivation - when our clients experience a downturn, they frequently are more motivated to use our services to recover prior overpayments to make up for relatively weaker financial performance in their own business operations; |
• | Nature of claims - the relationship between the dollar amount of recovery audit claims identified and client purchases is non-linear. Claim volumes are generally impacted by purchase volumes, but a number of other factors may have an even more significant impact on claim volumes, including new items being purchased, changes in discount, rebate, marketing allowance and similar programs offered by vendors and changes in a client’s or a vendor’s information processing systems; and |
• | Timing - the client purchase data on which we perform our recovery audit services is historical data that typically reflects transactions between our clients and their vendors that took place 3 to 15 months prior to the data being provided to us for audit. As a result, we generally experience a delayed impact from economic changes that varies by client and the impact may be positive or negative depending on the individual clients’ circumstances. |
• | We already have the clients' spend data - we serve a large and impressive list of very large, multinational companies in our core recovery audit business, which requires access to and processing of these clients' detailed S2P data on a daily, weekly or at least periodic basis; |
• | We know the clients' spend data and underlying processes - the work we do in recovery audit requires that we fully understand our clients’ systems, buying practices, receiving and payment procedures, as well as their suppliers’ contracting, performance and billing practices; |
• | We take a different perspective in analyzing the clients' spend data - we look horizontally across our clients' processes and organizational structures versus vertically, which is how most companies are organized and enterprise resource planning systems are designed; and |
• | Our contingent fee recovery audit value proposition minimizes our clients' cost of entry and truly aligns us with our clients. |
Three Months Ended March 31, | ||||||
2018 | 2017 | |||||
Revenue, net | 100.0 | % | 100.0 | % | ||
Operating expenses: | ||||||
Cost of revenue | 67.5 | 68.6 | ||||
Selling, general and administrative expenses | 30.7 | 31.4 | ||||
Depreciation of property and equipment | 3.3 | 3.6 | ||||
Amortization of intangible assets | 2.1 | 2.2 | ||||
Total operating expenses | 103.6 | 105.8 | ||||
Operating loss from continuing operations | (3.6 | ) | (5.8 | ) | ||
Foreign currency transaction gains on short-term intercompany balances | (0.6 | ) | (1.6 | ) | ||
Interest expense, net | 1.1 | 0.1 | ||||
Other loss (income) | — | (0.6 | ) | |||
Loss from continuing operations before income tax | (4.1 | ) | (3.7 | ) | ||
Income tax expense | 2.1 | 1.9 | ||||
Net loss from continuing operations | (6.2 | )% | (5.6 | )% |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Recovery Audit Services – Americas | $ | 25,958 | $ | 24,383 | ||||
Recovery Audit Services – Europe/Asia-Pacific | 10,027 | 7,831 | ||||||
Adjacent Services | 736 | 1,355 | ||||||
Total | $ | 36,721 | $ | 33,569 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Recovery Audit Services – Americas | $ | 16,151 | $ | 15,278 | ||||
Recovery Audit Services – Europe/Asia-Pacific | 7,085 | 6,186 | ||||||
Adjacent Services | 1,561 | 1,562 | ||||||
Total | $ | 24,797 | $ | 23,026 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Recovery Audit Services – Americas | $ | 2,791 | $ | 2,043 | ||||
Recovery Audit Services – Europe/Asia-Pacific | 1,371 | 1,347 | ||||||
Adjacent Services | 331 | 1,171 | ||||||
Subtotal for reportable segments | 4,493 | 4,561 | ||||||
Corporate Support | 6,771 | 5,974 | ||||||
Total | $ | 11,264 | $ | 10,535 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Recovery Audit Services – Americas | $ | 897 | $ | 910 | ||||
Recovery Audit Services – Europe/Asia-Pacific | 142 | 140 | ||||||
Adjacent Services | 184 | 170 | ||||||
Total | $ | 1,223 | $ | 1,220 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Recovery Audit Services – Americas | $ | 337 | $ | 329 | ||||
Recovery Audit Services – Europe/Asia-Pacific | 61 | — | ||||||
Adjacent Services | 390 | 393 | ||||||
Total | $ | 788 | $ | 722 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Net loss | $ | (2,661 | ) | $ | (2,183 | ) | ||
Income tax expense | 787 | 627 | ||||||
Interest expense, net | 398 | 37 | ||||||
EBIT | (1,476 | ) | (1,519 | ) | ||||
Depreciation of property and equipment | 1,224 | 1,220 | ||||||
Amortization of intangible assets | 788 | 722 | ||||||
EBITDA | 536 | 423 | ||||||
Foreign currency transaction gains on short-term intercompany balances | (220 | ) | (552 | ) | ||||
Transformation severance and related expenses | 674 | 585 | ||||||
Other loss (income) | 12 | (199 | ) | |||||
Stock-based compensation | 1,945 | 1,566 | ||||||
Adjusted EBITDA | $ | 2,947 | $ | 1,823 | ||||
Adjusted EBITDA from continuing operations | $ | 3,279 | $ | 2,157 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Recovery Audit Services – Americas | $ | 7,079 | $ | 7,138 | ||||
Recovery Audit Services – Europe/Asia-Pacific | 2,114 | 436 | ||||||
Adjacent Services | (1,088 | ) | (1,379 | ) | ||||
Subtotal for reportable segments | 8,105 | 6,195 | ||||||
Corporate Support | (4,826 | ) | (4,038 | ) | ||||
Total | $ | 3,279 | $ | 2,157 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Net loss | $ | (2,661 | ) | $ | (2,183 | ) | ||
Adjustments for certain non-cash items | 4,191 | 2,958 | ||||||
1,530 | 775 | |||||||
Changes in operating assets and liabilities | (4,499 | ) | (4,116 | ) | ||||
Net cash used in operating activities | $ | (2,969 | ) | $ | (3,341 | ) |
• | Revenue Recognition. We recognize revenue in accordance with the transfer of promised goods or services to customers that reflects the consideration to which we expect to be entitled in exchange for those goods or services. To adhere to this core principle, we apply the following five steps: (a) identify contract(s) with a customer; (b) identify the performance obligations in a contract; (c) determine the transaction price; (d) allocate the transaction price to the performance obligations in a contract; and (e) recognize revenue when (or as) performance obligations are satisfied. We determine that we have satisfied the performance obligation when our customers obtain control of the goods or services as evidenced by the customer’s ability to direct the use, or the ability to receive substantially all of the remaining economic benefit, of the contract assets. Additionally, for purposes of determining the appropriate timing of recognition, revenue will be recognized over time or at a point in time based on an evaluation of the specific criteria that is to be achieved to meet the performance obligations of each contract. |
2018 | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
(millions of dollars) | ||||||||||||||
January 1 - January 31 | — | $ | — | — | $ | — | ||||||||
February 1 - February 28 | — | $ | — | — | $ | — | ||||||||
March 1 - March 31 | 134,993 | $ | 8.06 | — | $ | — | ||||||||
134,993 | $ | 8.06 | — | $ | 15.5 |
Exhibit Number | Description | ||
3.1 | |||
3.1.1 | |||
3.2 | |||
4.1 | |||
4.2 | See Restated Articles of Incorporation and Bylaws of the Registrant, filed as Exhibits 3.1 and 3.2, respectively. | ||
10.1 | |||
31.1 | |||
31.2 | |||
32.1 | |||
101.INS | XBRL Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
PRGX GLOBAL, INC. | |||
May 9, 2018 | By: | /s/ Ronald E. Stewart | |
Ronald E. Stewart | |||
President, Chief Executive Officer, Director (Principal Executive Officer) | |||
May 9, 2018 | By: | /s/ Peter Limeri | |
Peter Limeri | |||
Chief Financial Officer, Treasurer and Controller (Principal Financial and Accounting Officer) |
May 9, 2018 | By: | /s/ Ronald E. Stewart | ||||
Ronald E. Stewart | ||||||
President, Chief Executive Officer, Director (Principal Executive Officer) |
May 9, 2018 | By: | /s/ Peter Limeri | ||||
Peter Limeri | ||||||
Chief Financial Officer and Treasurer (Principal Financial Officer) |
May 9, 2018 | By: | /s/ Ronald E. Stewart | ||||
Ronald E. Stewart | ||||||
President, Chief Executive Officer, Director (Principal Executive Officer) | ||||||
May 9, 2018 | By: | /s/ Peter Limeri | ||||
Peter Limeri | ||||||
Chief Financial Officer and Treasurer (Principal Financial Officer) |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Apr. 25, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PRGX GLOBAL, INC. | |
Entity Central Index Key | 0001007330 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 23,159,167 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||
Net loss | $ (2,661) | $ (2,183) |
Foreign currency translation adjustments | 275 | 275 |
Comprehensive loss | $ (2,386) | $ (1,908) |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Statement of Financial Position [Abstract] | ||
Allowances for contract receivables | $ 1,261 | $ 1,499 |
Allowances for employee advances and miscellaneous receivables | 314 | 292 |
Accumulated amortization on intangible assets | $ 41,553 | $ 40,461 |
Common stock, par value (usd per share) | ||
Common stock, stated value per share (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (shares) | 23,094,617 | 22,419,417 |
Common stock, shares outstanding (shares) | 23,094,617 | 22,419,417 |
Basis of Presentation |
3 Months Ended |
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Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements (Unaudited) of PRGX Global, Inc. and its wholly owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions for the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Certain reclassifications have been made to the Company's consolidated financial statements for fiscal year 2017 to conform to the fiscal year 2018 presentation. Operating results for the three month period ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. Except as otherwise indicated or unless the context otherwise requires, “PRGX,” “we,” “us,” “our” and the “Company” refer to PRGX Global, Inc. and its subsidiaries. For further information, refer to the Consolidated Financial Statements and the related Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, except for the Company’s revenue recognition policy which has been revised as a result of the implementation of a new standard effective January 1, 2018, and included below: The Company has revised its accounting policy as it relates to the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, and the subsequent amendments and modifications thereto. The revised policy requires the Company to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To adhere to this core principle, the Company applies the following five steps: (a) identify contract(s) with a customer; (b) identify the performance obligations in a contract; (c) determine the transaction price; (d) allocate the transaction price to the performance obligations in a contract; and (e) recognize revenue when (or as) performance obligations are satisfied. The Company determines that the performance obligations have been satisfied when its customers obtain control of the goods or services as evidenced by the customer’s ability to direct the use, or the ability to receive substantially all of the remaining economic benefit, of the contract assets. Additionally, for purposes of determining the appropriate timing of recognition, revenue will be recognized over time or at a point in time based on an evaluation of the specific criteria that is to be achieved to meet the performance obligations of each contract. The determination that the core principle for revenue recognition has been met, and the five steps have been applied appropriately, requires significant judgment. Management considers the application of this judgment to be critical in determining the appropriate amount of revenue to be recognized. The most critical judgments are required in the determination of the transaction price, the identification of the performance obligations within a contract, and the determination as to whether or not and to what extent such performance obligations have been satisfied. A misapplication of this judgment could result in inappropriate recognition of revenue. Revenue is recognized over time, on an invoice basis for the Company's recovery audit contracts, which is approximately 98% of consolidated revenue. The Company has adopted the Invoicing Expedient as provided for in FASB Accounting Standards Codification ("ASC") Topic 606, which allows for the recognition of revenue for an amount that an entity has a right to invoice its customer. It is management’s conclusion that the Company's right to consideration from its customers corresponds directly to the value provided to customers from its performance to-date, as represented by billable recoveries. A recovery is billable when it is determined that the customer has received the economic benefit from the service (generally through credits taken against existing accounts payable due to, or refund checks received from, the customer’s vendors). The manner in which a claim is recovered by a client often is dictated by industry practice. Many clients establish specific procedural guidelines that must be satisfied prior to submitting claims for client approval, and these guidelines are unique to each client. On occasion, it is possible that a transaction has met the core principle for revenue recognition, but the Company does not recognize revenue until the customary business practices and processes specific to that client have been completed. Historically, there has been a certain amount of recovery audit revenue with respect to which, even though the Company has met the requirements of its revenue recognition policy, its clients’ vendors ultimately have rejected the claims underlying the revenue. In that case, the Company's clients may request a refund or offset of such amount even though the fees may have been previously collected. The Company records any such refunds as a reduction of revenue. The Company provides refund liabilities for these reductions in the economic value previously received by its clients with respect to vendor claims that have been identified and for which revenue has been previously recognized. The Company computes an estimate of its refund liabilities at any given time based on actual historical refund data. Revenue is recognized over time for the Company's subscription services. Implementation services, hosting services, unspecified upgrades, technical and support services, service level guarantees and subscription rights under contracts for subscription services are delivered concurrently and are therefore considered a single performance obligation. Generally, revenue will be recognized ratably over the subscription term as this represents the timing of when those services are transferred to the customer. The subscription term commences when the customer both has access to the software application and can benefit from it (i.e. implementation has been completed). Revenue is recognized at a point in time for certain services provided on a fixed fee basis, and over time for certain services performed on a fee per hour basis or other unit of performance. The revenue recognition method is determined based on the specific criteria that is to be achieved to meet the performance obligations of each transaction within a contract. When a contract includes an option to acquire future goods or services that constitutes a material right to the customer, and those goods or services are similar to the original goods and services provided for in the contract, the Company has adopted the Practical Alternative as prescribed in ASC Topic 606 to estimate the standalone selling price of that option. Billed receivables are stated at the amount expected to be collected and do not bear interest. The Company makes ongoing estimates relating to the collectability of billed receivables and maintains a reserve for estimated losses resulting from the inability of its clients to meet its financial obligations to the Company. This reserve is primarily based on the level of past-due accounts based on the contractual terms of the receivables, the Company's history of write-offs, and its relationships with, and the economic status of, its clients. Unbilled receivables relate to claims for which the Company's customers have received economic value and for which they acknowledge this unbilled receivable has been earned, but has not yet been billed. The Company typically invoices the customer in the subsequent month. The Company records periodic changes in unbilled receivables and refund liabilities as adjustments to revenue. Contract assets will be recorded if a performance obligation is satisfied (and revenue recognized), but PRGX is not entitled to payment until other conditions as specified in the contract are met. Contract liabilities will be recognized if consideration is received and PRGX has not yet transferred the goods or services to the customer. PRGX refers to this as deferred revenue. The Company derives a relatively small portion of revenue on a fee-for-service basis whereby billing is based upon a fixed fee, a fee per hour, or a fee per other unit of service. The Company recognizes revenue for these types of services as the invoices are provided, and when the core principle for revenue recognition has been met. Impact of Recently Issued Accounting Standards A summary of the new accounting standards issued by the FASB and included in the ASC that apply to PRGX is included below: Adopted by the Company in fiscal year 2018 FASB ASC Update No. 2014-09 - In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), as later amended, which resulted in a new accounting standard Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. The new revenue recognition standard requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 has replaced most existing revenue recognition guidance within GAAP. The new standard became effective for the Company on January 1, 2018 and was adopted by the Company on that date. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements utilizing the modified retrospective approach. Accounting Standards Not Yet Adopted FASB ASU No. 2018-03 - In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10), which clarified certain aspects of the previously issued ASU 2016-01 issued in January 2016. This standard updates ASU guidance on the classification and measurement of financial instruments, including significant revisions in accounting related to the classification and measurement of investments in equity securities and presentation of certain fair value changes for financial liabilities when the fair value option is elected. This ASU requires equity securities to be measured at fair value with changes in fair value recognized through net earnings and amends certain disclosure requirements associated with the fair value of financial instruments. In the period of adoption, the Company is required to reclassify the unrealized gains/losses on equity securities within accumulated other comprehensive income (loss) to retained earnings. The amendment will be effective for the Company in the third quarter of 2018. Early adoption is permitted if ASU 2016-01 has been adopted. The Company is currently assessing the impact the adoption of this standard will have on its consolidated financial statements. FASB ASU No. 2016-02 - In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2018-01, Leases (Topic 842), issued in January 2018, provides a practical expedient for land easements. This standard requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. This standard requires lessors to classify leases as either sales-type, finance or operating. A sales-type lease occurs if the lessor transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing lease. If the lessor does not convey risks and rewards or control, an operating lease results. This standard will become effective for the Company in the first quarter of 2019. The Company is currently assessing the impact the adoption of this standard will have on its consolidated financial statements. |
Earnings (Loss) Per Common Share |
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Earnings (Loss) Per Common Share | Loss Per Common Share The following table sets forth the computations of basic and diluted loss per common share for the three months ended March 31, 2018 and 2017 (in thousands, except per share data):
For all periods presented, basic and diluted net loss per share are the same, as any additional common stock equivalents would be anti-dilutive. For the three months ended March 31, 2018, there were 1.1 million of anti-dilutive stock options and 0.4 million of anti-dilutive shares underlying restricted stock units that were excluded from the calculation of weighted average diluted common shares outstanding. For the three months ended March 31, 2017, there were 3.2 million of anti-dilutive stock options and 2.0 million of anti-dilutive shares underlying restricted stock units that were excluded from the calculation of weighted average diluted shares outstanding. The Company repurchased no shares of its common stock under its stock repurchase program during the three months ended March 31, 2018 and 2017. Pursuant to exercises of outstanding stock options, the Company issued 327,072 shares of its common stock having a value of approximately $2.8 million in the three months ended March 31, 2018 and 84,467 shares of its common stock having a value of approximately $0.4 million in the three months ended March 31, 2017. |
Stock-Based Compensation |
3 Months Ended |
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Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company has two stock-based compensation plans under which outstanding equity awards have been granted, the 2008 Equity Incentive Plan ("2008 EIP") and the 2017 Equity Incentive Compensation Plan ("2017 EICP") (collectively, the "Plans"). Awards granted outside of the Plans are referred to as inducement awards. The Company may grant awards that include stock options (both incentive stock options and nonqualified stock options) and nonvested stock awards (stock appreciation rights, restricted stock, deferred stock, restricted stock units, performance units, performance shares, dividend equivalents, bonus shares, and other stock-based or cash-based awards). Stock options typically vest in equal annual increments over the vesting period, which typically is three years for employees and one year for directors. Nonvested stock awards with time-based vesting typically vest in equal annual increments over the vesting period, which typically is three years for employees and one year for directors. Nonvested stock awards with performance-based vesting criteria vest in accordance with specific performance criteria associated with the awards. The Company granted stock options and nonvested stock awards with an aggregate fair value of approximately $0.8 million and $3.4 million during the three months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, there were approximately 3.1 million shares available for future grant under the 2017 EICP. Stock-based compensation expense for the three months ended March 31, 2018 and 2017 was $1.9 million and $1.6 million, respectively, before income tax benefits, for all the Company's equity awards and is included in Selling, general and administrative expenses in the Company's Consolidated Statement of Operations. As of March 31, 2018, there was $5.7 million of unrecognized stock-based compensation expense related to the Company's equity awards which will be recognized over approximately 2.2 years. In the three months ended March 31, 2018, the Company issued 483,623 shares of common stock and paid $5.4 million in long-term incentive compensation related to the vesting of its performance-based restricted stock awards granted in 2016. |
Operating Segments and Related Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Segments and Related Information | Operating Segments and Related Information The Company conducts its operations through the following three reportable segments: Recovery Audit Services – Americas represents recovery audit services (other than Healthcare Claims Recovery Audit services) provided in the United States of America (“U.S.”), Canada and Latin America. Recovery Audit Services – Europe/Asia-Pacific represents recovery audit services (other than Healthcare Claims Recovery Audit services) provided in Europe, Asia and the Pacific region. Adjacent Services represents data transformation, spend analytics, PRGX OPTIX, SIM services and associated advisory services. Additionally, Corporate Support includes the unallocated portion of corporate selling, general and administrative expenses not specifically attributable to the three reportable segments. During the fourth quarter of 2015, PRGX entered into agreements with third parties to fulfill its Medicare recovery audit contractor ("RAC") program subcontract obligations to audit Medicare payments and provide support for claims appeals and assigned its remaining Medicaid contract to another party. The Company will continue to incur certain expenses while the current Medicare RAC contracts are still in effect. As a result, the Healthcare Claims Recovery Audit services business has been reported as Discontinued Operations in accordance with GAAP. Discontinued operations information for the three months ended March 31, 2018 and 2017 is as follows:
The Company evaluates the performance of its reportable segments based upon revenue and measures of profit or loss referred to as EBITDA and Adjusted EBITDA. The Company defines Adjusted EBITDA as earnings from continuing operations before interest and taxes (“EBIT”), adjusted for depreciation and amortization (“EBITDA”), and then further adjusted for unusual and other significant items that management views as distorting the operating results of the various segments from period to period. Such adjustments include restructuring charges, stock-based compensation, bargain purchase gains, acquisition-related charges and benefits (acquisition transaction costs, acquisition obligations classified as compensation, and fair value adjustments to acquisition-related contingent consideration), tangible and intangible asset impairment charges, certain litigation costs and litigation settlements, certain severance charges and foreign currency transaction gains and losses on short-term intercompany balances viewed by management as individually or collectively significant. The Company does not have any inter-segment revenue. Segment information for the three months ended March 31, 2018 and 2017 (in thousands) is as follows:
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Debt |
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Debt | Debt In May 2016, the Company adopted ASU 2015-03, Interest - Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 changed the presentation of debt issuance costs on the balance sheet by requiring that they be presented as a direct deduction from the related debt liability, rather than represented as a separate asset. As a result, the Company’s deferred financing costs are now reflected in Long-term debt, excluding current portion on the Company’s Consolidated Balance Sheets for all periods presented. Long-term debt as of March 31, 2018 and December 31, 2017 consists of the following (in thousands):
On January 19, 2010, the Company entered into a four-year revolving credit and term loan agreement with SunTrust Bank (“SunTrust”). The SunTrust credit facility initially consisted of a $15.0 million committed revolving credit facility and a $15.0 million term loan. The SunTrust credit facility is guaranteed by PRGX and all of its material domestic subsidiaries and is secured by substantially all of the Company's assets. The SunTrust credit facility has been modified from time to time through various amendments since January 2010. Included in these amendments was the refinancing of the committed credit facility in 2014, and clarification of certain definitions and other terms of the facility in 2016. The refinancing resulted in an extended maturity date of December 23, 2017, as well as a lower interest rate. Pursuant to the December 2014 amendment, the credit facility would bear interest at a rate per annum comprised of a specified index rate based on one-month LIBOR, plus an applicable margin (1.75% per annum). The index rate was determined as of the first business day of each calendar month. PRGX must pay a commitment fee, payable quarterly, on the unused portion of the credit facility. On May 4, 2017, the Company entered into an amendment of the SunTrust credit facility, that, among other things, (i) increased the aggregate principal amount of the committed revolving credit facility from $20.0 million to $35.0 million through December 31, 2018, which will be reduced to $30.0 million thereafter, (ii) extended the maturity date of the credit facility to December 31, 2019, (iii) added customary provisions to reflect European Union “bail-in” directive compliance language, and (iv) modified the financial covenants applicable to the Company during the remaining term of the credit facility by (A) revising the maximum leverage ratio and minimum fixed charge coverage ratio and (B) adding an additional financial covenant requiring the Company to maintain a minimum amount of consolidated adjusted EBITDA. In addition, the applicable margin used to determine the interest rate per annum on outstanding borrowings under the credit facility, and the ongoing commitment fee payable on the unused portion of the revolving credit facility commitment, both of which previously had been fixed percentages per annum, were amended and both now will vary based upon the Company's quarterly leverage ratio calculation under the SunTrust credit facility. The applicable margin per annum on interest accruing on all borrowings under the credit facility outstanding on or after May 4, 2017, and the applicable percentage per annum commitment fee accruing on and after that date, respectively will be determined as follows:
On March 21, 2018, the SunTrust credit facility was amended with respect to the calculation of consolidated adjusted EBITDA for financial covenant compliance. The debt covenant calculation was modified to include the cash component of stock-based compensation for 2017. As of March 31, 2018 there was $13.6 million in debt outstanding under the revolving SunTrust credit facility that will be due December 31, 2019. The amount available for additional borrowing under the revolving SunTrust credit facility was $21.4 million as of March 31, 2018. Based on the terms of the credit facility, as amended, the applicable interest rate at March 31, 2018 was approximately 3.91%. As of March 31, 2018 the Company was required to pay a commitment fee of 0.25% per annum, payable quarterly, on the unused portion of the revolving SunTrust credit facility. The SunTrust credit facility includes customary affirmative, negative, and financial covenants binding on the Company, including delivery of financial statements and other reports, maintenance of existence, and transactions with affiliates. The negative covenants limit the ability of the Company, among other things, to incur debt, incur liens, make investments, sell assets or declare or pay dividends on its capital stock. The financial covenants included in the credit facility, among other things, limit the amount of capital expenditures the Company can make, set forth maximum leverage and net funded debt ratios for the Company and a minimum fixed charge coverage ratio, and also require the Company to maintain a minimum amount of consolidated EBITDA. In addition, the credit facility includes customary events of default. The Company was in compliance with the covenants in the SunTrust credit facility as of March 31, 2018. Future Commitments The following is a summary of the combined principal maturities of all long-term debt and principal payments to be made under the Company’s capital lease agreements for each of the fiscal years presented in the table below (in thousands):
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Fair Value of Financial Instruments |
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Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company records cash equivalents at cost, which approximates fair market value. The carrying values for receivables from clients, unbilled receivables, accounts payable, deferred revenue and other accrued liabilities reasonably approximate fair market value due to the nature of the financial instrument and the short-term maturity of these items. The Company records bank debt, if any, as of the period end date based on the effective borrowing rate and repayment terms when originated. The Company had $13.6 million in bank debt outstanding as of each of March 31, 2018 and 2017. The Company believes the carrying value of the bank debt approximates its fair value. The Company considers the factors used in determining the fair value of this debt to be Level 3 inputs (significant unobservable inputs). The Company had $9.1 million of business acquisition obligations as of March 31, 2018, and $4.0 million of business acquisition obligations as of March 31, 2017. The Company's business acquisition obligations represent the estimated fair value of the deferred consideration and projected earn-out payments due as of the end of the reporting period. The Company determines the estimated fair value of business acquisition obligations based on its projections of future revenue and profits or other factors used in the calculation of the ultimate payment(s) to be made. The discount rate that the Company uses to value the liability is based on specific business risk, cost of capital, and other factors. The Company considers these factors to be Level 3 inputs (significant unobservable inputs). The Company states certain assets at fair value on a nonrecurring basis as required by GAAP. Generally, these assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. |
Commitments and Contingencies |
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Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings The Company is party to a variety of legal proceedings arising in the normal course of business. While the results of these proceedings cannot be predicted with certainty, management believes that the final outcome of these proceedings will not have a material adverse effect on the Company's financial position, results of operations or cash flows. |
Income Taxes |
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Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Reported income tax expense in each period primarily results from taxes on the income of foreign subsidiaries. The effective tax rates generally differ from the expected tax rate due primarily to the Company’s deferred tax asset valuation allowance on the domestic earnings and taxes on income of foreign subsidiaries. Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. In addition, the Company is subject to the continuous examination of its income tax returns by the Internal Revenue Service in the U.S. and other tax authorities. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. The Company applies a “more-likely-than-not” recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. PRGX refers to GAAP for guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. In accordance with FASB ASC 740, the Company's policy for recording interest and penalties associated with tax positions is to record such items as a component of income before income taxes. A number of years may elapse before a particular tax position is audited and finally resolved or when a tax assessment is raised. The number of years subject to tax assessments also varies by tax jurisdiction. |
Business Acquisition |
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Business Acquisition | Business Acquisition Cost & Compliance Associates In February 2017, the Company completed the acquisition of substantially all of the assets of Cost & Compliance Associates, LLC and Cost & Compliance Associates Limited (collectively “C&CA”). C&CA was a commercial recovery audit and contract compliance firm with operations in the U.S. and the U.K. This acquisition was a strategic fit with the Company's then existing operations. The Company acquired substantially all of the assets of C&CA for approximately $10.0 million in cash plus potential earnout consideration of up to $8.0 million. The actual payment of the earnout consideration will be based on achieving certain financial targets over a two-year period that commenced on March 1, 2017 and will conclude on February 28, 2019. Management estimated that the fair value of the earnout consideration was approximately $5.9 million at the date of acquisition. During the three months ended March 31, 2018, the Company recognized accretion of $0.3 million on the fair value of the earnout consideration which was included in Interest expense in the Consolidated Statements of Operations, and increased the related contingent consideration liability. As of March 31, 2018, the contingent consideration liability related to the C&CA acquisition was $7.1 million, of which $3.8 million was included in current Business acquisition obligations and $3.3 million was included in Noncurrent business acquisition obligations in the Company's Consolidated Balance Sheets. The Company allocated the aggregate purchase price for C&CA to the net tangible and intangible assets acquired based on their fair values as of February 23, 2017. The Company based the allocation of the purchase price on a valuation for intangible assets and the carrying value for the remaining assets and liabilities, as the carrying value approximates their fair value. The Company recorded the excess of the purchase price over the net tangible and intangible assets as goodwill, which has been allocated and recognized as goodwill within the Company's Recovery Audit Services-Americas and Recovery Audit Services-Europe/Asia-Pacific business segments. The purchase price allocation for C&CA was completed in the first quarter of 2018. During the three months ended March 31, 2018, the Company recorded an immaterial working capital adjustment to the purchase price allocation. The purchase price allocation was as follows (in thousands):
The intangible assets acquired were as follows (in thousands):
The revenue and net income associated with the assets acquired from C&CA for the three months ended March 31, 2018 and 2017 are presented below (in thousands) and included in the Company's Consolidated Statements of Operations. These amounts are not necessarily indicative of the results of operations that C&CA would have realized if it had continued to operate as a stand-alone company during the period presented, primarily due to costs that are now reflected in the Company's unallocated corporate costs and not allocated to C&CA.
As required by ASC 805, the following unaudited pro forma Statements of Operations for the three months ended March 31, 2017 give effect to the C&CA acquisition as if it had been completed on January 1, 2016. The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of what the operating results actually would have been during the periods presented had the C&CA acquisition been completed on January 1, 2016. In addition, the unaudited pro forma financial information does not purport to project future operating results. The pro forma revenue and net loss do not reflect: (1) any anticipated synergies (or costs to achieve synergies) or (2) the impact of non-recurring items directly related to the C&CA acquisition. The information presented below is in thousands:
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Basis of Presentation (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Impact of Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards A summary of the new accounting standards issued by the FASB and included in the ASC that apply to PRGX is included below: Adopted by the Company in fiscal year 2018 FASB ASC Update No. 2014-09 - In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), as later amended, which resulted in a new accounting standard Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. The new revenue recognition standard requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 has replaced most existing revenue recognition guidance within GAAP. The new standard became effective for the Company on January 1, 2018 and was adopted by the Company on that date. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements utilizing the modified retrospective approach. Accounting Standards Not Yet Adopted FASB ASU No. 2018-03 - In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10), which clarified certain aspects of the previously issued ASU 2016-01 issued in January 2016. This standard updates ASU guidance on the classification and measurement of financial instruments, including significant revisions in accounting related to the classification and measurement of investments in equity securities and presentation of certain fair value changes for financial liabilities when the fair value option is elected. This ASU requires equity securities to be measured at fair value with changes in fair value recognized through net earnings and amends certain disclosure requirements associated with the fair value of financial instruments. In the period of adoption, the Company is required to reclassify the unrealized gains/losses on equity securities within accumulated other comprehensive income (loss) to retained earnings. The amendment will be effective for the Company in the third quarter of 2018. Early adoption is permitted if ASU 2016-01 has been adopted. The Company is currently assessing the impact the adoption of this standard will have on its consolidated financial statements. FASB ASU No. 2016-02 - In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2018-01, Leases (Topic 842), issued in January 2018, provides a practical expedient for land easements. This standard requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. This standard requires lessors to classify leases as either sales-type, finance or operating. A sales-type lease occurs if the lessor transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing lease. If the lessor does not convey risks and rewards or control, an operating lease results. This standard will become effective for the Company in the first quarter of 2019. The Company is currently assessing the impact the adoption of this standard will have on its consolidated financial statements. |
Revenue Recognition | The Company has revised its accounting policy as it relates to the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, and the subsequent amendments and modifications thereto. The revised policy requires the Company to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To adhere to this core principle, the Company applies the following five steps: (a) identify contract(s) with a customer; (b) identify the performance obligations in a contract; (c) determine the transaction price; (d) allocate the transaction price to the performance obligations in a contract; and (e) recognize revenue when (or as) performance obligations are satisfied. The Company determines that the performance obligations have been satisfied when its customers obtain control of the goods or services as evidenced by the customer’s ability to direct the use, or the ability to receive substantially all of the remaining economic benefit, of the contract assets. Additionally, for purposes of determining the appropriate timing of recognition, revenue will be recognized over time or at a point in time based on an evaluation of the specific criteria that is to be achieved to meet the performance obligations of each contract. The determination that the core principle for revenue recognition has been met, and the five steps have been applied appropriately, requires significant judgment. Management considers the application of this judgment to be critical in determining the appropriate amount of revenue to be recognized. The most critical judgments are required in the determination of the transaction price, the identification of the performance obligations within a contract, and the determination as to whether or not and to what extent such performance obligations have been satisfied. A misapplication of this judgment could result in inappropriate recognition of revenue. Revenue is recognized over time, on an invoice basis for the Company's recovery audit contracts, which is approximately 98% of consolidated revenue. The Company has adopted the Invoicing Expedient as provided for in FASB Accounting Standards Codification ("ASC") Topic 606, which allows for the recognition of revenue for an amount that an entity has a right to invoice its customer. It is management’s conclusion that the Company's right to consideration from its customers corresponds directly to the value provided to customers from its performance to-date, as represented by billable recoveries. A recovery is billable when it is determined that the customer has received the economic benefit from the service (generally through credits taken against existing accounts payable due to, or refund checks received from, the customer’s vendors). The manner in which a claim is recovered by a client often is dictated by industry practice. Many clients establish specific procedural guidelines that must be satisfied prior to submitting claims for client approval, and these guidelines are unique to each client. On occasion, it is possible that a transaction has met the core principle for revenue recognition, but the Company does not recognize revenue until the customary business practices and processes specific to that client have been completed. Historically, there has been a certain amount of recovery audit revenue with respect to which, even though the Company has met the requirements of its revenue recognition policy, its clients’ vendors ultimately have rejected the claims underlying the revenue. In that case, the Company's clients may request a refund or offset of such amount even though the fees may have been previously collected. The Company records any such refunds as a reduction of revenue. The Company provides refund liabilities for these reductions in the economic value previously received by its clients with respect to vendor claims that have been identified and for which revenue has been previously recognized. The Company computes an estimate of its refund liabilities at any given time based on actual historical refund data. Revenue is recognized over time for the Company's subscription services. Implementation services, hosting services, unspecified upgrades, technical and support services, service level guarantees and subscription rights under contracts for subscription services are delivered concurrently and are therefore considered a single performance obligation. Generally, revenue will be recognized ratably over the subscription term as this represents the timing of when those services are transferred to the customer. The subscription term commences when the customer both has access to the software application and can benefit from it (i.e. implementation has been completed). Revenue is recognized at a point in time for certain services provided on a fixed fee basis, and over time for certain services performed on a fee per hour basis or other unit of performance. The revenue recognition method is determined based on the specific criteria that is to be achieved to meet the performance obligations of each transaction within a contract. When a contract includes an option to acquire future goods or services that constitutes a material right to the customer, and those goods or services are similar to the original goods and services provided for in the contract, the Company has adopted the Practical Alternative as prescribed in ASC Topic 606 to estimate the standalone selling price of that option. Billed receivables are stated at the amount expected to be collected and do not bear interest. The Company makes ongoing estimates relating to the collectability of billed receivables and maintains a reserve for estimated losses resulting from the inability of its clients to meet its financial obligations to the Company. This reserve is primarily based on the level of past-due accounts based on the contractual terms of the receivables, the Company's history of write-offs, and its relationships with, and the economic status of, its clients. Unbilled receivables relate to claims for which the Company's customers have received economic value and for which they acknowledge this unbilled receivable has been earned, but has not yet been billed. The Company typically invoices the customer in the subsequent month. The Company records periodic changes in unbilled receivables and refund liabilities as adjustments to revenue. Contract assets will be recorded if a performance obligation is satisfied (and revenue recognized), but PRGX is not entitled to payment until other conditions as specified in the contract are met. Contract liabilities will be recognized if consideration is received and PRGX has not yet transferred the goods or services to the customer. PRGX refers to this as deferred revenue. The Company derives a relatively small portion of revenue on a fee-for-service basis whereby billing is based upon a fixed fee, a fee per hour, or a fee per other unit of service. The Company recognizes revenue for these types of services as the invoices are provided, and when the core principle for revenue recognition has been met. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company records cash equivalents at cost, which approximates fair market value. The carrying values for receivables from clients, unbilled receivables, accounts payable, deferred revenue and other accrued liabilities reasonably approximate fair market value due to the nature of the financial instrument and the short-term maturity of these items. The Company records bank debt, if any, as of the period end date based on the effective borrowing rate and repayment terms when originated. The Company had $13.6 million in bank debt outstanding as of each of March 31, 2018 and 2017. The Company believes the carrying value of the bank debt approximates its fair value. The Company considers the factors used in determining the fair value of this debt to be Level 3 inputs (significant unobservable inputs). The Company had $9.1 million of business acquisition obligations as of March 31, 2018, and $4.0 million of business acquisition obligations as of March 31, 2017. The Company's business acquisition obligations represent the estimated fair value of the deferred consideration and projected earn-out payments due as of the end of the reporting period. The Company determines the estimated fair value of business acquisition obligations based on its projections of future revenue and profits or other factors used in the calculation of the ultimate payment(s) to be made. The discount rate that the Company uses to value the liability is based on specific business risk, cost of capital, and other factors. The Company considers these factors to be Level 3 inputs (significant unobservable inputs). The Company states certain assets at fair value on a nonrecurring basis as required by GAAP. Generally, these assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. |
Income Taxes | Reported income tax expense in each period primarily results from taxes on the income of foreign subsidiaries. The effective tax rates generally differ from the expected tax rate due primarily to the Company’s deferred tax asset valuation allowance on the domestic earnings and taxes on income of foreign subsidiaries. Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. In addition, the Company is subject to the continuous examination of its income tax returns by the Internal Revenue Service in the U.S. and other tax authorities. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. The Company applies a “more-likely-than-not” recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. PRGX refers to GAAP for guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. In accordance with FASB ASC 740, the Company's policy for recording interest and penalties associated with tax positions is to record such items as a component of income before income taxes. A number of years may elapse before a particular tax position is audited and finally resolved or when a tax assessment is raised. The number of years subject to tax assessments also varies by tax jurisdiction. |
Earnings (Loss) Per Common Share (Tables) |
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Computations of basic and diluted earnings (loss) per common share | The following table sets forth the computations of basic and diluted loss per common share for the three months ended March 31, 2018 and 2017 (in thousands, except per share data):
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Operating Segments and Related Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of discontinued operations information | Discontinued operations information for the three months ended March 31, 2018 and 2017 is as follows:
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Segment information | The Company evaluates the performance of its reportable segments based upon revenue and measures of profit or loss referred to as EBITDA and Adjusted EBITDA. The Company defines Adjusted EBITDA as earnings from continuing operations before interest and taxes (“EBIT”), adjusted for depreciation and amortization (“EBITDA”), and then further adjusted for unusual and other significant items that management views as distorting the operating results of the various segments from period to period. Such adjustments include restructuring charges, stock-based compensation, bargain purchase gains, acquisition-related charges and benefits (acquisition transaction costs, acquisition obligations classified as compensation, and fair value adjustments to acquisition-related contingent consideration), tangible and intangible asset impairment charges, certain litigation costs and litigation settlements, certain severance charges and foreign currency transaction gains and losses on short-term intercompany balances viewed by management as individually or collectively significant. The Company does not have any inter-segment revenue. Segment information for the three months ended March 31, 2018 and 2017 (in thousands) is as follows:
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Long-term debt as of March 31, 2018 and December 31, 2017 consists of the following (in thousands):
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Schedule of Line of Credit Facilities | The applicable margin per annum on interest accruing on all borrowings under the credit facility outstanding on or after May 4, 2017, and the applicable percentage per annum commitment fee accruing on and after that date, respectively will be determined as follows:
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Schedule of Future Minimum Lease Payments for Capital Leases | The following is a summary of the combined principal maturities of all long-term debt and principal payments to be made under the Company’s capital lease agreements for each of the fiscal years presented in the table below (in thousands):
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Business Acquisition (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of recognized identified assets acquired and liabilities assumed | The purchase price allocation was as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The intangible assets acquired were as follows (in thousands):
|
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Schedule of Business Acquisitions, by Acquisition | The revenue and net income associated with the assets acquired from C&CA for the three months ended March 31, 2018 and 2017 are presented below (in thousands) and included in the Company's Consolidated Statements of Operations. These amounts are not necessarily indicative of the results of operations that C&CA would have realized if it had continued to operate as a stand-alone company during the period presented, primarily due to costs that are now reflected in the Company's unallocated corporate costs and not allocated to C&CA.
|
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Business acquisition, pro forma information | The pro forma revenue and net loss do not reflect: (1) any anticipated synergies (or costs to achieve synergies) or (2) the impact of non-recurring items directly related to the C&CA acquisition. The information presented below is in thousands:
|
Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Numerator: | ||
Net loss from continuing operations | $ (2,328) | $ (1,847) |
Net loss from discontinued operations | $ (333) | $ (336) |
Denominator: | ||
Weighted-average common shares outstanding (shares) | 22,573 | 21,945 |
Basic loss per common share from continuing operations (in usd per share) | $ (0.10) | $ (0.08) |
Basic loss per common share from discontinued operations (in usd per share) | (0.01) | (0.02) |
Total basic loss per common share (in usd per share) | $ (0.11) | $ (0.10) |
Earnings (Loss) Per Common Share - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share and Other Significant Changes in Shares [Line Items] | ||
Amount of shares repurchased (shares) | 0 | |
Amount of shares issued (shares) | 327,072 | 84,467 |
Amount of shares issued | $ 2.8 | $ 0.4 |
Employee Stock Option [Member] | ||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share and Other Significant Changes in Shares [Line Items] | ||
Weighted average shares outstanding excludes anti-dilutive shares underlying options (shares) | 1,100,000 | 3,200,000 |
Restricted Stock Units (RSUs) [Member] | ||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share and Other Significant Changes in Shares [Line Items] | ||
Weighted average shares outstanding excludes anti-dilutive shares underlying options (shares) | 400,000 | 2,000,000 |
Stock-Based Compensation - Narrative (Details) $ / shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018
USD ($)
compensation_plan
$ / shares
shares
|
Mar. 31, 2017
USD ($)
$ / shares
|
|
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||
Number of stock-based compensation plans | compensation_plan | 2 | |
Shares granted | $ / shares | $ 0.8 | $ 3.4 |
Shares available for grant (in shares) | shares | 3,100,000 | |
Compensation expense | $ 1.9 | $ 1.6 |
Nonvested awards compensation costs not yet recognized | $ 5.7 | |
Nonvested awards, compensation costs not yet recognized, period for recognition | 2 years 2 months 12 days | |
Performance Shares [Member] | ||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||
Compensation, shares issued (in shares) | shares | 483,623 | |
Compensation cost | $ 5.4 |
Operating Segments and Related Information - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2018
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Operating Segments and Related Information - Results of Discontinued Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Segment Reporting [Abstract] | ||
Revenue, net | $ 0 | $ 0 |
Cost of sales | 329 | 334 |
Selling, general and administrative expense | 3 | 0 |
Depreciation and amortization | 1 | 2 |
Loss from discontinued operations before income taxes | (333) | (336) |
Income tax expense | 0 | 0 |
Net loss from discontinued operations | $ (333) | $ (336) |
Debt (Schedule of Debt) (Details) - SunTrust Bank [Member] - USD ($) |
3 Months Ended | ||||
---|---|---|---|---|---|
Jan. 19, 2010 |
Mar. 31, 2018 |
Dec. 31, 2018 |
May 04, 2017 |
May 03, 2017 |
|
Debt Instrument [Line Items] | |||||
Credit facility, term | 4 years | ||||
Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||||
Sun Trust Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 15,000,000.0 | $ 35,000,000.0 | $ 20,000,000.0 | ||
Scenario, Forecast [Member] | Subsequent Event [Member] | Sun Trust Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 30,000,000.0 |
Debt (Future Minimum Liabilities) (Details) $ in Thousands |
Mar. 31, 2018
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2018 | $ 37 |
2019 | 13,649 |
2020 | 12 |
Total | $ 13,698 |
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
Jun. 30, 2016 |
---|---|---|---|
Fair Value of Financial Instruments (Textual) [Abstract] | |||
Business acquisition obligations (Note 9) | $ 3,843 | $ 3,759 | |
Bank Loan Obligations [Member] | |||
Fair Value of Financial Instruments (Textual) [Abstract] | |||
Fair value of long term debt | 13,600 | ||
Business Acquisition Obligations [Member] | |||
Fair Value of Financial Instruments (Textual) [Abstract] | |||
Business acquisition obligations (Note 9) | $ 9,100 | $ 4,000 |
Business Acquisition (Details) - Cost & Compliance Associates [Member] - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Feb. 28, 2017 |
Mar. 31, 2018 |
Feb. 23, 2017 |
|
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | $ 10,000 | ||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 8,000 | ||
Business Combination, Contingent Consideration, Liability | $ 5,900 | $ 7,100 | $ 5,954 |
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | 300 | ||
Other Current Liabilities [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Contingent Consideration, Liability | 3,800 | ||
Other Noncurrent Liabilities [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Contingent Consideration, Liability | $ 3,300 |
Business Acquisition (Fair Value of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands |
1 Months Ended | |||
---|---|---|---|---|
Feb. 28, 2017 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Feb. 23, 2017 |
|
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||
Goodwill | $ 17,691 | $ 17,648 | ||
Cost & Compliance Associates [Member] | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||
Accounts receivable, net | $ 1,641 | |||
Commissions receivable | 48 | |||
Prepaid expenses | 109 | |||
Accrued commissions | 6 | |||
Intangible assets | 10,923 | |||
Goodwill | 3,534 | |||
Fixed assets, net | 323 | |||
Accounts payable | (125) | |||
Accrued commissions | (537) | |||
Total assets | 15,922 | |||
Contingent consideration | $ 5,900 | $ 7,100 | $ 5,954 | |
Total cash paid | $ 9,968 |
Business Acquisition (Summary of Intangible Assets Acquired) (Details) - Cost & Compliance Associates [Member] $ in Thousands |
Feb. 23, 2017
USD ($)
|
---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 10,923 |
Customer Relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 9,556 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 14 years |
Noncompete Agreements [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 1,232 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years |
Trademarks [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 135 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years |
Business Acquisition (Revenues) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Business Acquisition [Line Items] | ||
Net income from continuing operations | $ (2,661) | $ (2,183) |
Cost & Compliance Associates [Member] | ||
Business Acquisition [Line Items] | ||
Revenue | 3,947 | 1,467 |
Net income from continuing operations | $ 558 | $ 776 |
Business Acquisition (Acquisition Revenue and Earnings From Operations Information) (Details) - Cost & Compliance Associates [Member] $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2017
USD ($)
| |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Revenue (pro forma) | $ 34,408 |
Net loss income from continuing operations (pro forma) | $ (2,522) |
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