10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTER ENDED MARCH 31, 2014

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-51579

NCI, Inc.

(Exact name of registrant as specified in its charter)

Delaware	20-3211574
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11730 Plaza America Drive Reston, Virginia	20190-4764
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (703) 707-6900

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller Reporting Company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  Yes    x  No

As of April 25, 2014, there were 8,253,332 shares outstanding of the registrant’s Class A common stock. In addition, there are 4,700,000 shares outstanding of the registrant’s Class B common stock, which are convertible on a one-for-one basis into shares of Class A common stock.

NCI, INC.

		PAGE
PART I:	FINANCIAL INFORMATION		1
Item 1.	Condensed Consolidated Financial Statements		1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		8
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		13
Item 4.	Controls and Procedures		13
PART II:	OTHER INFORMATION		14
Item 1.	Legal Proceedings		14
Item 1A.	Risk Factors		14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		14
Item 3.	Defaults Upon Senior Securities		14
Item 4.	Mine Safety Disclosures		14
Item 5.	Other Information		14
Item 6.	Exhibits		14
	Signatures		16

PART 1

FINANCIAL INFORMATION

Item 1. Financial Statements

NCI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in thousands, except per share data)

	Three months ended March 31,
	2014		2013
Revenue	$	89,084	$	91,541
Operating expenses:
Cost of revenue		78,003		80,477
General and administrative expenses		7,399		5,861
Depreciation and amortization		1,449		1,618
Total operating expenses		86,851		87,956
Operating income		2,233		3,585
Interest expense, net		126		251
Income before income taxes		2,107		3,334
Provision for income taxes		866		1,359
Net income	$	1,241	$	1,975
Earnings per common and common equivalent share:
Basic:
Weighted average shares outstanding		13,104		12,812
Net income per share	$	0.09	$	0.15
Diluted:
Weighted average shares outstanding		13,727		12,812
Net income per share	$	0.09	$	0.15

The accompanying notes are an integral

part of these consolidated financial statements

1

NCI, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except par value)

	As of March 31, 2014			As of December 31, 2013
Assets:
Current assets:
Cash and cash equivalents	$	191		$	50
Accounts receivable, net		67,129			63,991
Deferred tax assets, net		3,213			3,217
Prepaid expenses and other current assets		4,867			2,941
Total current assets		75,400			70,199
Property and equipment, net		9,507			9,752
Other assets		1,991			2,113
Deferred tax assets, net		39,951			39,990
Intangible assets, net		4,935			5,340
Total assets	$	131,784		$	127,394
Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable	$	20,865		$	17,371
Accrued salaries and benefits		14,725			16,645
Deferred revenue		2,463			2,594
Other accrued expenses		4,879			4,578
Total current liabilities		42,932			41,188
Long-term debt		—			1,000
Other long-term liabilities		3,725			3,399
Total liabilities		46,657			45,587
Stockholders’ equity:
Class A common stock, $0.019 par value—37,500 shares authorized; 9,170 shares issued and 8,253 shares outstanding as of March 31, 2014, and 9,142 shares issued and 8,226 shares outstanding as of December 31, 2013		174			174
Class B common stock, $0.019 par value—12,500 shares authorized; 4,700 shares issued and outstanding as of March 31, 2014 and December 31, 2013		89			89
Additional paid-in capital		72,984			70,905
Treasury stock at cost—917 shares of Class A common stock as of March 31, 2014 and December 31, 2013		(8,331	)		(8,331	)
Retained earnings		20,211			18,970
Total stockholders’ equity		85,127			81,807
Total liabilities and stockholders’ equity	$	131,784			127,394

The accompanying notes are an integral

part of these consolidated financial statements

2

NCI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

	Three months ended March 31,
	2014			2013
Cash flows from operating activities:
Net income	$	1,241		$	1,975
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		1,449			1,618
Share-based payments		1,943			298
Deferred income taxes		43			(6	)
Changes in operating assets and liabilities:
Accounts receivable, net		(3,138	)		(17,404	)
Prepaid expenses and other assets		(1,805	)		3,215
Accounts payable		3,494			1,567
Accrued expenses and other liabilities		(2,129	)		475
Net cash provided by (used in) operating activities		1,098			(8,262	)
Cash flows from investing activities:
Purchases of property and equipment		(93	)		(140	)
Net cash used in investing activities		(93	)		(140	)
Cash flows from financing activities:
Borrowings under credit facility		29,559			28,558
Repayments on credit facility		(30,559	)		(20,058	)
Proceeds from exercise of stock options		163			—
Shares repurchased for tax withholdings on vesting of restricted shares		(27	)		—
Net cash (used in) provided by financing activities		(864	)		8,500
Net change in cash and cash equivalents		141			98
Cash and cash equivalents, beginning of period		50			763
Cash and cash equivalents, end of period	$	191		$	861
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	106		$	195
Income taxes	$	843		$	131
Non-cash investing and finance activities during the period for:
Leasehold improvements acquired under tenant improvement funds		706			—

The accompanying notes are an integral

part of these consolidated financial statements

3

NCI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of NCI, Inc. and its subsidiaries (“NCI” or “the Company”) have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments necessary to fairly present the Company’s financial position as of March 31, 2014 and its results of operations and cash flows for the three months ended March 31, 2014 and 2013, which consists of normal and recurring adjustments. The information disclosed in the notes to the financial statements for these periods is unaudited. The current period’s results of operations are not necessarily indicative of results that may be achieved for any future period. All numbers in tables are presented in thousands except per share numbers. For further information, refer to the financial statements and footnotes included in NCI’s Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the SEC.

2. Business Overview

NCI provides IT and professional services and solutions by leveraging its eight core service offerings: cloud computing and IT infrastructure optimization; enterprise information management and advanced analytics; cybersecurity and information assurance; IT service management; engineering and logistics support; software and systems development/integration; health IT and medical support; and modeling, simulation, and training. The Company provides these services to U.S. Defense, Intelligence, and Federal Civilian agencies. The majority of the Company’s revenue was derived from contracts with the U.S. Federal Government, directly as a prime contractor or as a subcontractor. For the quarter ended March 31, 2014 and 2013, the Company generated approximately 78% and 76% of revenues, respectively, from the Department of Defense, including agencies within the intelligence community, and approximately 22% and 24% of revenues, respectively, from federal civilian agencies. The Company’s PEO Soldier contract is the Company’s largest revenue-generating contract and accounted for approximately 11% and 14% of our revenues for the quarters ended March 31, 2014 and 2013, respectively. The Company’s PEO Soldier contract is a cost-plus contract consisting of a one year base period and two one year option periods, commencing in September 2012. The Company primarily conducts business throughout the United States. We report operating results and financial data as one reportable segment.

3. Earnings Per Share

Basic earnings per share exclude dilution and are computed by dividing net income by the weighted average number of common shares outstanding for the period, including contingently issuable shares that could share in our income if options containing a market condition that was met during the quarter were exercised. Diluted earnings per share reflect potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Diluted earnings per share include the incremental effect of stock options calculated using the treasury stock method, and contingently issuable shares that could share in our income if options containing a market condition that was met during the quarter were exercised. Shares that are anti-dilutive are not included in the computation of diluted earnings per share. For the three months ended March 31, 2014 and 2013, approximately 21,000 and 793,000 shares, respectively, were not included in the computation of diluted earnings per share, because to do so would have been anti-dilutive. The following details the computation of basic and diluted earnings per common share (Class A and Class B) for the three months ended March 31, 2014 and 2013.

	Three months ended March 31,
	2014		2013
	(in thousands, except per share data)
Net Income	$	1,241	$	1,975
Weighted average number of basic shares outstanding during the period		13,104		12,812
Effect of dilutive potential common shares		623		—
Weighted average number of diluted shares outstanding during the period		13,727		12,812
Basic earnings per share	$	0.09	$	0.15
Diluted earnings per share	$	0.09	$	0.15

4

NCI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4. Accounts Receivable

Accounts receivable consist of billed and unbilled amounts at the end of each period:

	As of
	March 31, 2014		December 31, 2013
Billed receivables	$	32,346	$	31,398
Unbilled receivables:
Amounts billable at end of period		26,905		19,215
Other		8,666		14,166
Total unbilled receivables		35,571		33,381
Total accounts receivable		67,917		64,779
Less: Allowance for doubtful accounts		788		788
Total accounts receivable, net	$	67,129	$	63,991

Other unbilled receivables primarily consist of amounts that will be billed upon milestone completions and other accrued amounts that cannot be billed as of the end of the period. All unbilled receivables are expected to be billed and collected within the next twelve months.

5. Property and Equipment

The following table details property and equipment at the end of each period:

	As of
	March 31, 2014		December 31, 2013
Property and equipment
Furniture and equipment	$	23,147	$	23,054
Leasehold improvements		9,194		8,488
Real property		549		549
		32,890		32,091
Less: Accumulated depreciation and amortization		23,383		22,339
Property and equipment, net	$	9,507	$	9,752

Depreciation expense for the three months ended March 31, 2014 and 2013 was $1.0 million and $1.1 million, respectively.

6. Intangible Assets

The following table details intangible assets at the end of each period:

	As of
	March 31, 2014		December 31, 2013
Contract and customer relationships	$	20,987	$	20,987
Less: Accumulated amortization		16,052		15,647
Intangible assets, net	$	4,935	$	5,340

5

NCI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

6. Intangible Assets – continued

Amortization expense of intangible assets for the quarters ended March 31, 2014 and 2013 was $0.4 million and $0.5 million, respectively.

7. Share-Based Payments

During the first three months of 2014, the Company granted zero stock options and had 30,000 stock options exercised. As of March 31, 2014, there were approximately 1,748,000 stock options outstanding.

During the first three months of 2014, the Company granted zero shares of restricted stock, and 6,250 restricted shares vested, with 2,269 shares cancelled to cover individual tax liabilities. As of March 31, 2014, there were approximately 77,500 shares of restricted stock outstanding.

During the first three months of 2014, approximately 737,000 of the options granted in June of 2013 vested on an accelerated vesting schedule, as the stock price reached two discrete acceleration milestones of a continuous 30-day average stock price of $8.00 and $10.00 per share, respectively. This added approximately $1.1 million and $0.4 million in additional stock compensation costs to general and administrative expenses and cost of revenue, respectively.

The following table summarizes stock compensation for the three months ended March 31, 2014 and 2013:

	For the Three Months Ended March 31,
	2014		2013
	(in thousands)
Cost of revenue	$	476	$	57
General and administrative		1,468		240
	$	1,944	$	297

As of March 31, 2014, there was approximately $1.9 million of total unrecognized compensation cost related to unvested stock compensation arrangements. This cost is expected to be fully amortized over the next three years, with approximately $1.0 million, $0.9 million, and $0.1 million amortized during the remainder of 2014, and the full year of 2015, and part of 2016, respectively. The cost of stock compensation is included in the Company’s Consolidated Statements of Income and expensed over the service period of the options.

8. Debt

The Company’s senior credit facility, as amended in December 2010, December 2012, and subsequently amended in December 2013, consists of a revolving line of credit with a borrowing capacity of up to an $80.0 million principal amount and a $45.0 million accordion feature allowing us to increase our borrowing capacity to up to a $125.0 million principal amount, subject to obtaining commitments for the incremental capacity from existing or new lenders. The outstanding borrowings are collateralized by a security interest in substantially all the Company’s assets. The lenders also require a direct assignment of all contracts at the lenders’ discretion. The outstanding balance under the credit facility accrues interest based on one-month LIBOR plus an applicable margin, ranging from 210 to 310 basis points, based on the ratio of our outstanding senior funded debt to Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) as defined in the credit facility agreement. The credit facility expires on January 31, 2017.

The credit facility contains various restrictive covenants that, among other things, restrict the Company’s ability to: incur or guarantee additional debt; make certain distributions, investments and other restricted payments, including limits on cash dividends on the Company’s outstanding common stock or equivalent equity interests; enter into transactions with certain affiliates; create or permit certain liens; and consolidate, merge, or sell assets. In addition, the credit facility contains certain financial covenants that require the Company to: maintain a minimum tangible

6

NCI, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8. Debt – continued

net worth; maintain a minimum fixed charge coverage ratio and a minimum funded debt to earnings ratio; and limit capital expenditures below certain thresholds. As of March 31, 2014 and December 31, 2013, the Company was in compliance with all of its loan covenants.

The credit facility allows the Company to use borrowings thereunder of up to $17.5 million to repurchase shares of Class A common stock. No stock repurchases took place in the three months ended March 31, 2014. At March 31, 2014, $16.7 million was remaining under the Board of Directors’ authorization for shares repurchases.

During the first quarter of 2014, NCI had a weighted average outstanding loan balance of $3.8 million which accrued interest at a weighted average borrowing rate of 2.3%. During the first quarter of 2013, NCI had a weighted average outstanding loan balance of $21.2 million which accrued interest at a weighted average borrowing rate of 2.7%.

As of March 31, 2014, the outstanding balance under the credit facility was zero and interest accrued at a rate of LIBOR plus 210 basis points, or 2.3%. As of December 31, 2013, the outstanding balance under the credit facility was $1.0 million and interest accrued at a rate of one-month LIBOR plus 210 basis points, or 2.3%.

9. Restructuring Charge

During December 2011, management committed to, implemented, and completed a restructuring plan. The restructuring was done to reduce costs through downsizing our physical locations.

The activity and balance of the restructuring liability accounts for the quarter ended March 31, 2014 are as follows:

	Lease and Facilities Exit Costs
Balance as of January 1, 2013	$	1,573
Cash payments		(645	)
Balance as of December 31, 2013		928
Cash payments		(133	)
Balance as of March 31, 2014	$	795
Amounts contained in balance sheet as of March 31, 2014
Other accrued expenses		384
Other long-term liabilities		411
Total	$	795

The accrued amounts related to the lease and facilities exit costs will be reduced over the respective lease terms, the longest of which extends through 2017.

10. Related Party Transactions

The Company purchased services under a subcontract from Renegade Technology Systems, Inc. (formerly Net Commerce Corporation), which is a Government contractor wholly-owned by Rajiv Narang, the son of Charles K. Narang, the Chairman and Chief Executive Officer of the Company. For the three months ended March 31, 2014 and 2013, the expense incurred under this agreement was approximately $354,000 and $241,000 respectively. As of March 31, 2014 and December 31, 2013, approximate outstanding amounts due to Renegade Technology Systems, Inc. were $73,000 and $157,000, respectively.

7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding our business, financial condition, results of operations, and prospects. There are statements made herein, which may not address historical facts and, therefore, could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. The factors that could cause actual results to differ materially from those anticipated include, but are not limited to, the following:

• Our dependence on our contracts with U.S. Federal Government agencies, particularly within the U.S. Department of Defense, for the majority our revenue; a change in funding of our contracts due to bid protests; changes in U.S. Federal Government spending priorities; changes in contract type, particularly changes from cost-plus fee or time-and-material type contracts to firm fixed-price type contracts

• A reduction in the overall U.S. Defense budget, volatility in spending authorizations for Defense and Intelligence-related programs by the U.S. Federal Government or a shift in spending to programs in areas where we do not currently provide services

• Delays in the U.S. Federal Government appropriations process, or budgetary cuts resulting from Congressional committee recommendations or automatic sequestration under the Budget Control Act of 2011; U.S. Federal Governmental shutdowns (such as the shutdown that occurred during the U.S. Federal Government’s 1996 and 2013 fiscal years); and other potential delays in the U.S. Federal Government appropriations process

• Changes in U.S. Federal Government programs or requirements, including the increased use of small business providers

• Failure to achieve contract awards in connection with recompetes for present business and/or competition for new business

• U.S. Federal Government agencies more frequently awarding contracts on a technically acceptable/lowest cost basis in order to reduce expenditures

• Adverse results of U.S. Federal Government audits of our government contracts

• Competitive factors, such as pricing pressures and competition to hire and retain employees (particularly those with security clearances)

• Failure to identify and successfully integrate future acquired companies or businesses into our operations or to realize any accretive or synergistic effects from such acquisitions, or effectively integrate acquisitions appropriate to the achievement of our strategic plans

• Economic conditions in the United States, including conditions that result from terrorist activities or war

• Material changes in policies, laws, or regulations applicable to our businesses, particularly legislation affecting (i) U.S. Federal Government contracts for services, (ii) outsourcing of activities that have been performed by the U.S. Federal Government, (iii) U.S. Federal Government contracts containing organizational conflict of interest clauses, (iv) delays related to agency specific funding freezes, and (v) competition for task orders under Government Wide Acquisition Contracts, agency-specific Indefinite Delivery/Indefinite Quantity contracts and/or schedule contracts with the General Services Administration

• U.S. Federal Government’s “insourcing” of previously contracted support services and the realignment of funds to non-defense related programs

• Our ability to achieve the objectives of near-term or long-range business plans, particularly revenue growth, and the ability to realize future deferred tax assets benefits

• Risk of contract non-performance or termination

Some of these important factors are outlined under Item 1A. Risk Factors and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC, and from time to time in other filings with the SEC, such as our Forms 8-K and 10-Q. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee our future results, level of activity, or performance. We undertake no obligation to update publicly or revise any forward-looking statements. You should not place undue reliance on any forward-looking statements.

In this document, unless the context indicates otherwise, the terms “Company,” “NCI,” “we,” “us,” and “our” refer to NCI, Inc., a Delaware corporation, and, where appropriate, its subsidiaries.

8

OVERVIEW

We are a provider of information technology (IT) and professional engineering services and solutions to U.S. Federal Government Agencies. Our technology and industry expertise enables us to provide a wide spectrum of services and solutions that assist our customers in achieving their program goals. We deliver these complex services and solutions by leveraging our skills across eight core competencies:

• Cloud Computing and IT infrastructure optimization

• Enterprise information management and advanced analytics

• Cybersecurity and information assurance

• IT service management

• Engineering and logistics support

• Software and systems development/intergration

• Health IT and medical support

• Modeling, simulation, and training

Our team of highly skilled professionals is committed to service excellence and delivers innovative, cost-effective enterprise services and solutions on time and within budget. We are focused on reshaping the way services and solutions are delivered to our customers in order to proactively understand and meet their mission needs and enable them to rapidly adapt to dynamic environments. Headquartered in Reston, Virginia, NCI currently operates in more than 100 locations around the globe. We report operating results and financial data as one reportable segment. We are a trusted partner when and where you need us most.

Key Financial Metrics

Prime Contractor Revenue

The following table shows our revenue derived from contracts on which we serve as a prime contractor.

	Three months ended March 31,
	2014			2013
Revenue derived from prime contracts		93	%		90	%

Customer Group Revenue

The following table shows our revenue from the client groups listed as a percentage of total revenue for the period shown.

	Three months ended March 31,
	2014			2013
Department of Defense and intelligence agencies		78	%		76	%
U.S. Federal civilian agencies		22	%		24	%

Contract Type Revenue

Our services and solutions are provided under three types of contracts: time-and-materials; cost-plus fee; and firm fixed-price. Our contract mix varies from year to year due to numerous factors including our business strategies and U.S. Federal Government procurement objectives.

9

The following table shows our revenue from each of these types of contracts as a percentage of our total revenue for the periods shown.

	Three months ended March 31,
	2014			2013
Time-and-materials		14	%		21	%
Cost-plus fee		54	%		51	%
Firm fixed-price		32	%		28	%

The amount of risk and potential reward varies under each type of contract. Under time-and-materials contracts, we are paid a fixed hourly rate by labor category. To the extent that our actual labor costs vary significantly from the negotiated hourly rates, we may generate more or less than the targeted amount of profit. We are typically reimbursed for other contract direct costs and expenses at our cost, and typically receive no fee on those costs. For cost-plus fee contracts, there is limited financial risk, because we are reimbursed all our allowable costs, therefore the profit margins tend to be lower on cost-plus fee contracts. Under firm fixed-price contracts, we perform specific tasks or provide specified goods for a predetermined price. Compared to time-and-materials and cost-plus fee contracts, firm fixed-price service contracts generally offer higher profit margin opportunities but involve greater financial risk because we would bear the impact of potential cost overruns in return for the full benefit of any cost savings.

Contract Backlog

As of	Funded backlog		Total backlog
	(in millions)
March 31, 2014	$	159	$	440
December 31, 2013		195		488

We define backlog as our estimate of the remaining future revenue from existing signed contracts over the remaining base contract performance period and from the option periods of those contracts that we believe have a more likely than not probability of being exercised. Our backlog does not include any estimate of future potential delivery orders that might be awarded under our GWAC, agency-specific IDIQ, or other multiple-award contract vehicles. We define funded backlog as the portion of backlog for which funding currently is appropriated and obligated to us under a contract or other authorization for payment signed by an authorized purchasing agency, less the amount of revenue we have previously recognized. Our funded backlog does not represent the full potential value of our contracts, as Congress often appropriates funds for a particular program or agency on a quarterly or yearly basis, even though the contract may provide for the provision of services over a number of years. We define unfunded backlog , not included above, as the total backlog less the funded backlog. Unfunded backlog includes values for contract options that have been priced but not yet funded. Additional information on how we determine backlog is included in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC.

10

Results of Operations

Three Months Ended March 31, 2014 Compared to Three Months Ended March 31, 2013

The following table sets forth certain items from our consolidated statements of income and expresses each item in dollars and as a percentage of revenue for the periods indicated:

	Three months ended March 31,
	2014		2013		2014			2013
	(in thousands)				(as a percentage of revenue)
Revenue	$	89,084	$	91,541		100.0	%		100.0	%
Operating expenses:
Cost of revenue		78,003		80,477		87.6			87.9
General and administrative expenses		7,399		5,861		8.2			6.4
Depreciation and amortization		1,449		1,618		1.7			1.8
Total operating expenses		86,851		87,956		97.5			96.1
Operating income		2,233		3,585		2.5			3.9
Interest expense, net		126		251		0.1			0.3
Income before income taxes		2,107		3,334		2.4			3.6
Provision for income taxes		866		1,359		1.0			1.4
Net income	$	1,241	$	1,975		1.4	%		2.2	%

Revenue

For the three months ended March 31, 2014, revenue decreased by 2.7%, or $2.5 million, over the same period a year ago. The decrease was primarily due to approximately $2.3 million of lower revenue attributable to services provided on our PEO Soldier contract.

During the first quarter of 2014, our PEO Soldier contract accounted for 11.4%, or approximately $10.2 million of our revenue. During the first quarter of 2013, our PEO Soldier contract accounted for 13.7%, or $12.5 million, of our revenue.

Cost of revenue

Cost of revenue decreased 3.1%, or $2.5 million, for the three months ended March 31, 2014, as compared to the same period a year ago. This decrease was primarily the result of reduced costs in support of our PEO Soldier contract, offset by $0.4 million in accelerated stock compensation expense. Cost of revenue represented 87.6% of revenue for the quarter ended March 31, 2014, as compared to 87.9% for the quarter ended March 31, 2013. This decrease was primarily the result of improved contract margins.

General and administrative expenses

General and administrative expense increased 26.2%, or $1.5 million, for the three months ended March 31, 2014, as compared to the same period a year ago. The increase was primarily due to $1.1 million in accelerated stock compensation expense, and higher stock compensation costs from the regular vesting of equity awards, offset by reduced salary and facilities costs.

Depreciation and amortization

Depreciation and amortization expense was approximately $1.5 million and $1.6 million for the quarters ended March 31, 2014 and 2013, respectively.

11

Interest expense, net

Net interest expense was $0.1 million and $0.3 million for the quarters ended March 31, 2014 and 2013, respectively. This decrease was primarily due to a lower average loan balance in the quarter ended March 31, 2014. During the first quarter of 2014, we had a weighted average outstanding loan balance of $3.8 million which accrued interest at a weighted average borrowing rate of 2.3%. During the first quarter of 2013, we had a weighted average outstanding loan balance of $21.2 million which accrued interest at a weighted average borrowing rate of 2.7%.

Income taxes

Income tax expense decreased by $0.5 million in the three months ended March 31, 2014, as compared to the three months ended March 31, 2013. This decrease was due to the decrease in operating income, offset by an increase in our effective tax rate. The effective income tax rate for the quarter ended March 31, 2014 was approximately 41.1%, as compared to an effective income tax rate of 40.8% for the quarter ended March 31, 2013. The increase in effective tax rate resulted from changes in the blended state tax rate.

Liquidity and Capital Resources

Our primary liquidity needs are for financing working capital, capital expenditures, stock repurchases, and making selective strategic acquisitions. Historically, we have relied primarily on our cash flow from operations and borrowings under our credit facility to provide the capital for our liquidity needs. As part of our growth strategy, we may pursue acquisitions that could require us to incur additional debt or issue new equity. We expect the combination of our current cash, cash flow from operations, and the available borrowing capacity under our credit facility to continue to meet our normal working capital, capital expenditures and other cash requirements.

During first quarter of 2014, the balance of accounts receivable increased by $3.1 million to $67.1 million at the end of the quarter. Days sales outstanding of accounts receivable (DSO) decreased 6 days to 68 days at March 31, 2014 as compared to 74 days at December 31, 2013. As of March 31, 2014, no amounts were due under the credit facility, as compared to $1.0 million outstanding as of December 31, 2013, reflecting $1.0 million of net repayments during the first quarter of 2014. Net cash provided by operating activities was $1.1 million at March 31, 2014.

Our Board of Directors authorized management to repurchase up to $25.0 million of our Class A common stock pursuant to a stock repurchase program. If shares are repurchased, the shares will be repurchased pursuant to open market purchases, privately negotiated transactions, or block transactions. We have no obligation to repurchase shares under the authorization, and the timing, actual number and value of the shares which are repurchased (and the manner of any such repurchase) will be at the discretion of management and will depend on a number of factors, including the price of our common stock, our Company’s cash needs, borrowing capacity under our credit facility, interest rates, and our financial performance and position. We may suspend or discontinue repurchases at any time.

During 2013 and the quarter ending March 31, 2014, we did not purchase any shares. At March 31, 2014, we had $16.7 million remaining under the Board of Directors’ authorization for share repurchases.

Credit Facility: Our amended and restated senior credit facility consists of a revolving line of credit with a borrowing capacity of up to an $80.0 million principal amount, and a $45.0 million accordion feature allowing us to increase our borrowing capacity to up to a $125.0 million principal amount, subject to obtaining commitments for the incremental capacity from existing or new lenders. The outstanding borrowings are collateralized by a security interest in substantially all the Company’s assets. The lenders also require a direct assignment of all contracts at the lenders’ discretion. The outstanding balance under the credit facility accrues interest based on one-month LIBOR plus an applicable margin, ranging from 210 to 310 basis points, based on the ratio of our outstanding senior funded debt to Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) as defined in the credit facility agreement.

The credit facility allows us to use borrowings thereunder of up to $17.5 million to repurchase shares of our common stock. Funds borrowed under the credit facility may be used to finance possible future acquisitions, for working capital requirements, for stock repurchases, for cash dividends or for general corporate uses.

The loan interest accrual rate is set monthly at one-month LIBOR plus a set amount per the credit facility, amended in December 2013.

The credit facility contains various restrictive covenants that, among other things, restrict our ability to incur or guarantee additional debt; make certain distributions, investments and other restricted payments such as dividends;

12

enter into transactions with certain affiliates; create or permit certain liens; and consolidate, merge, or sell assets. In addition, the credit facility contains certain financial covenants that require us to maintain a minimum tangible net worth; maintain a minimum fixed charge coverage ratio and a minimum funded debt to earnings ratio; and limit capital expenditures below certain thresholds. There are no restrictions on our retained earnings in the credit facility.

As of March 31, 2014, we were in compliance with all of our loan covenants.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements.

Critical Accounting Policies

There have been no significant changes to our Critical Accounting Policies during the first quarter of 2014. Refer to our Critical Accounting Policies section in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk relates to changes in interest rates for borrowings under our credit facility. For the quarter ended March 31, 2014, a change of one percentage point in interest rates would have changed our interest expense or cash flows by less than $0.1 million. This estimate is based on our average balances for the period.

Additionally, we are subject to credit risks associated with our cash, cash equivalents, and accounts receivable. We believe that the concentration of credit risk with respect to cash equivalents is limited due to the high credit quality of these investments. Our investment policy requires that we invest excess cash in high-quality investments, which preserve principal, provide liquidity, and minimize investment risk. We also believe that our credit risk associated with accounts receivable is limited as they are primarily with the U.S. Federal Government or prime contractors working for the U.S. Federal Government.

Item 4. Controls and Procedures

Evaluation of the Effectiveness of Disclosure Controls and Procedures

As of March 31, 2014, under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, we have evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended. Based on this evaluation, our chief executive officer and our chief financial officer have concluded that our disclosure controls and procedures were effective, as of March 31, 2014, such that the information that is required to be disclosed in our reports filed with the SEC (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to management, including our chief executive officer and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

The Company made no change to its internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) identified in connection with the evaluation required by Rule 13a-15(d) under the Exchange Act during the three months ended March 31, 2014 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

13

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

The Company is party to various legal actions, claims, government inquiries, and audits resulting from the normal course of business. The Company believes that the probability is remote that any resulting liability will have a material effect on the Company’s financial position, results of operations, or cash flows.

Item 1A. Risk Factors

There have been no significant changes from those discussed in Item 1A. “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item  5. Other Information

None

Item 6. Exhibits

Number	Description
2.1	Stock Purchase Agreement among NCI Information Systems, Inc. (“NCIIS”), a wholly owned subsidiary of NCI, Inc., and stockholders of AdvanceMed Corporation dated as of February 24, 2011 (incorporated herein by reference from Exhibit 2.1 to registrant’s Current Report on Form 8-K, as filed with the Commission on April 4, 2011)
3.1	Amended and Restated Certificate of Incorporation of the Registrant (incorporated herein by reference from Exhibit 3.1 to registrant’s Registration Statement on Form S-1 (File No. 333-127006), as filed with the Commission on October 4, 2005, as amended).
3.2	Bylaws of the Registrant (incorporated herein by reference from Exhibit 3.2 to registrant’s Registration Statement on Form S-1 (File No. 333-127006), as filed with the Commission on July 29, 2005).
4.1	Specimen Class A Common Stock Certificate (incorporated herein by reference from Exhibit 4.1 to registrant’s Registration Statement on Form S-1 (File No. 333-127006), as filed with the Commission on October 20, 2005, as amended).
4.2*	NCI, Inc. Amended and Restated 2005 Performance Incentive Plan (incorporated herein by reference from Appendix A to registrant’s Definitive Proxy Statement on Schedule 14A, as filed with the Commission on April 30, 2009).
4.3*	Form of Amended and Restated 2005 Performance Incentive Plan Notice of Stock Option Grant and Stock Option Agreement (incorporated herein by reference from Exhibit 4.2 to registrant’s Current Report on Form 8-K, as filed with the Commission on June 12, 2009).
4.4*	NCI, Inc. Amended and Restated 2005 Performance Incentive Plan (incorporated herein by reference from Appendix A to registrant’s Proxy Statement on Form DEF 14A, as filed with the Commission on April 30, 2009).
4.5*	Form of Amended and Restated 2005 Performance Incentive Plan Notice of Stock Option Grant and Stock Option Agreement (incorporated herein by reference from Exhibit 4.2 to registrant’s Current Report on Form 8-K, as filed with the Commission on June 12, 2009).
10.1	Amended and Restated Loan and Security Agreement, dated as of December 13, 2010, by and among NCI, Inc., NCI Information Systems Incorporated, Operational Technologies Services, Inc., as Borrowers, the several banks and financial institutions from time to time parties thereto, as Lenders, SunTrust Bank as the Administrative Agent to the Lenders and SunTrust Robinson Humphrey, Inc., as Lead Arranger and Book Manager (incorporated by reference from Exhibit 10.1 to registrant’s Current Report on Form 8-K dated December 13, 2010, and filed with the Commission on December 15, 2010).
10.2*	Executive Change in Control and Severance Agreement, dated March 9, 2012, by and among, NCI, Inc. and Brian J. Clark. (incorporated herein by reference from Exhibit 10.2 to registrant’s Annual Report on Form 10-K (File No. 000-51579), as filed with the Commission on March 12, 2012).
10.3*	Executive Change in Control and Severance Agreement, dated March 9, 2012, by and among, NCI, Inc. and Marco de Vito (incorporated herein by reference from Exhibit 10.3 to registrant’s Annual Report on Form 10-K (File No. 000-51579), as filed with the Commission on March 12, 2012).
10.4*	Executive Change in Control and Severance Agreement, dated March 9, 2012, by and among, NCI, Inc. and Michele R. Cappello (incorporated herein by reference from Exhibit 10.4 to registrant’s Annual Report on Form 10-K (File No. 000-51579), as filed with the Commission on March 12, 2012).
10.5*	Executive Change in Control and Severance Agreement, dated March 9, 2012, by and among, NCI, Inc. and Lucas J. Narel (incorporated herein by reference from Exhibit 10.5 to registrant’s Annual Report on Form 10-K (File No. 000-51579), as filed with the Commission on March 12, 2012).
10.6	Waiver and Amendment to Amended and Restated Loan and Security Agreement, dated as of December 31, 2012, by and among NCI, Inc., and NCI Information Systems Incorporated, as Borrowers, the several banks and financial institutions from time to time parties thereto, as Lenders, SunTrust Bank as the Administrative Agent to the Lenders and SunTrust Robinson Humphrey, Inc., as Lead Arranger and Book Manager (incorporated by reference from Exhibit 10.1 to registrant’s Current Report on Form 8-K dated January 7, 2013, and filed with the Commission on January 8, 2013).

14

10.7	Second Amendment to Amended and Restated Loan and Security Agreement, dated as of December 19, 2013, by and among NCI, Inc., and NCI Information Systems Incorporated, as Borrowers, the several banks and financial institutions from time to time parties thereto, as Lenders, SunTrust Bank as the Administrative Agent to the Lenders and SunTrust Robinson Humphrey, Inc., as Lead Arranger and Book Manager (incorporated by reference from Exhibit 10.1 to registrant’s Current Report on Form 8-K dated December 23, 2013, and filed with the Commission on December 23, 2013).
31.1‡	Certification of the Chief Executive Officer pursuant to rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
31.2‡	Certification of the Chief Financial Officer pursuant to rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
32.1‡	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Extension Schema
101.CAL	XBRL Extension Calculation Linkbase
101.DEF	XBRL Extension Definition Linkbase
101.LAB	XBRL Extension Label Linkbase
101.PRE	XBRL Extension Presentation Linkbase

‡ Included with this filing.

* Management Contract or Compensatory Plan or Arrangement.

15

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

NCI, Inc.

Registrant

Date: April 30, 2014	By:	/s/ LUCAS J. NAREL
		Lucas J. Narel
		Executive Vice President, Chief Financial Officer
		and Treasurer (Principal Financial Officer) (Principal Accounting Officer)

16

EX-31.1

Exhibit 31.1

Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) of the

Securities Exchange Act of 1934, as amended

I, Charles K. Narang, certify that:

1. I have reviewed this report on Form 10-Q of NCI, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared.

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation.

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrants’ fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information.

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 30, 2014	/s/ CHARLES K. NARANG
	Charles K. Narang Chairman and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) of the

Securities Exchange Act of 1934, as amended

I, Lucas J. Narel, certify that:

1. I have reviewed this report on Form 10-Q of NCI, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared.

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation.

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrants’ fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information.

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 30, 2014	/s/ LUCAS J. NAREL
	Lucas J. Narel Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) (Principal Accounting Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the report on Form 10-Q of NCI, Inc. (the “Company”) for the fiscal quarter ended March 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Charles K. Narang, Chairman and Chief Executive Officer, and Lucas J. Narel, Executive Vice President, Chief Financial Officer and Treasurer of the Company certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934.

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 30, 2014	/s/ CHARLES K. NARANG
	Charles K. Narang Chairman and Chief Executive Officer (Principal Executive Officer)
Date: April 30, 2014	/s/ LUCAS J. NAREL
	Lucas J. Narel Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) (Principal Accounting Officer)

A signed original of the written statement required by Section 906 has been provided to NCI, Inc. and will be retained by NCI, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Debt - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended			12 Months Ended	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014 LIBOR [Member]	Dec. 31, 2013 LIBOR [Member]	Mar. 31, 2014 Minimum [Member] LIBOR [Member]	Mar. 31, 2014 Maximum [Member] LIBOR [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 80.0
Additional borrowing capacity, accordion feature	45.0
Maximum borrowing capacity including accordion feature	125.0
Basis points			2.10%	2.10%	2.10%	3.10%
Description of variable rate basis	One-month LIBOR plus an applicable margin, ranging from 210 to 310 basis points
Credit facility, expiration date	Jan. 31, 2017
Capacity available to repurchase shares	17.5
Repurchase of common stock	0
Remaining authorized repurchase amount	16.7
Weighted average outstanding loan balance	3.8	21.2
Weighted average borrowing rate	2.30%	2.70%
Credit facility, outstanding balance			$ 0	$ 1.0
Interest rate at period end			2.30%	2.30%

XML

Accounts Receivable - Summary of Accounts Receivable (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Receivables [Abstract]
Billed receivables	$ 32,346	$ 31,398
Unbilled receivables:
Amounts billable at end of period	26,905	19,215
Other	8,666	14,166
Total unbilled receivables	35,571	33,381
Total accounts receivable	67,917	64,779
Less: Allowance for doubtful accounts	788	788
Total accounts receivable, net	$ 67,129	$ 63,991

XML

Accounts Receivable

3 Months Ended

Mar. 31, 2014

Receivables [Abstract]

Accounts Receivable

4. Accounts Receivable

Accounts receivable consist of billed and unbilled amounts at the end of each period:

	As of
	March 31, 2014		December 31, 2013
Billed receivables	$	32,346	$	31,398
Unbilled receivables:
Amounts billable at end of period		26,905		19,215
Other		8,666		14,166
Total unbilled receivables		35,571		33,381
Total accounts receivable		67,917		64,779
Less: Allowance for doubtful accounts		788		788
Total accounts receivable, net	$	67,129	$	63,991

Other unbilled receivables primarily consist of amounts that will be billed upon milestone completions and other accrued amounts that cannot be billed as of the end of the period. All unbilled receivables are expected to be billed and collected within the next twelve months.

XML

Intangible Assets - Details of Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 4,935	$ 5,340
Contract and Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	20,987	20,987
Less: Accumulated amortization	16,052	15,647
Intangible assets, net	$ 4,935	$ 5,340

XML

Property and Equipment - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Property Plant And Equipment Useful Life And Values [Abstract]
Depreciation expense	$ 1.0	$ 1.1

XML

Intangible Assets - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization expense of intangible assets	$ 0.4	$ 0.5

XML

Share-Based Payments - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2014 Milestone	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	0
Stock options exercised	30,000
Stock options outstanding	1,748,000
Number of shares cancelled in stock	2,269
Restricted stock outstanding	77,500
Option granted	737,000
Stock discrete acceleration milestones	2
Period of accelerated in milestones	30 days
Additional stock based compensation expense	$ 1,944,000	$ 297,000
Total unrecognized compensation cost related to unvested stock compensation	1,900,000
Amortized unrecognized compensation cost period	3 years
Milestone One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Price of Discrete Acceleration Milestones	$ 8.00
Milestone Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Price of Discrete Acceleration Milestones	$ 10.00
Remainder of 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amortization of cost of unvested stock compensation arrangements	1,000,000
2015 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amortization of cost of unvested stock compensation arrangements	900,000
Part of 2016 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amortization of cost of unvested stock compensation arrangements	100,000
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional stock based compensation expense	1,468,000	240,000
General and Administrative [Member] | Accelerated Vesting [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional stock based compensation expense	1,100,000
Cost of Revenue [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional stock based compensation expense	476,000	57,000
Cost of Revenue [Member] | Accelerated Vesting [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional stock based compensation expense	$ 400,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted	0
Restricted stock vested	6,250

XML

Earnings Per Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

3. Earnings Per Share

Basic earnings per share exclude dilution and are computed by dividing net income by the weighted average number of common shares outstanding for the period, including contingently issuable shares that could share in our income if options containing a market condition that was met during the quarter were exercised. Diluted earnings per share reflect potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Diluted earnings per share include the incremental effect of stock options calculated using the treasury stock method, and contingently issuable shares that could share in our income if options containing a market condition that was met during the quarter were exercised. Shares that are anti-dilutive are not included in the computation of diluted earnings per share. For the three months ended March 31, 2014 and 2013, approximately 21,000 and 793,000 shares, respectively, were not included in the computation of diluted earnings per share, because to do so would have been anti-dilutive. The following details the computation of basic and diluted earnings per common share (Class A and Class B) for the three months ended March 31, 2014 and 2013.

	Three months ended March 31,
	2014		2013
	(in thousands, except per share data)
Net Income	$	1,241	$	1,975
Weighted average number of basic shares outstanding during the period		13,104		12,812
Effect of dilutive potential common shares		623		—
Weighted average number of diluted shares outstanding during the period		13,727		12,812
Basic earnings per share	$	0.09	$	0.15
Diluted earnings per share	$	0.09	$	0.15

XML

Share-Based Payments - Summary of Stock Compensation (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock compensation	$ 1,944	$ 297
Cost of Revenue [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock compensation	476	57
General and Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock compensation	$ 1,468	$ 240

XML

Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Income Statement [Abstract]
Revenue	$ 89,084	$ 91,541
Operating expenses:
Cost of revenue	78,003	80,477
General and administrative expenses	7,399	5,861
Depreciation and amortization	1,449	1,618
Total operating expenses	86,851	87,956
Operating income	2,233	3,585
Interest expense, net	126	251
Income before income taxes	2,107	3,334
Provision for income taxes	866	1,359
Net income	$ 1,241	$ 1,975
Basic:
Weighted average shares outstanding	13,104	12,812
Net income per share	$ 0.09	$ 0.15
Diluted:
Weighted average shares outstanding	13,727	12,812
Net income per share	$ 0.09	$ 0.15

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Basis of Presentation

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of NCI, Inc. and its subsidiaries (“NCI” or “the Company”) have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments necessary to fairly present the Company’s financial position as of March 31, 2014 and its results of operations and cash flows for the three months ended March 31, 2014 and 2013, which consists of normal and recurring adjustments. The information disclosed in the notes to the financial statements for these periods is unaudited. The current period’s results of operations are not necessarily indicative of results that may be achieved for any future period. All numbers in tables are presented in thousands except per share numbers. For further information, refer to the financial statements and footnotes included in NCI’s Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the SEC.

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Related Party Transactions - Additional Information (Detail) (Renegade Technology Systems, Inc. [Member], USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Renegade Technology Systems, Inc. [Member]
Related Party Transaction [Line Items]
Purchased services from Net Commerce Corporation	$ 354,000	$ 241,000
Amount due to related party	$ 73,000		$ 157,000

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Business Overview - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2014 Item Segment Services	Mar. 31, 2013
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Number of core service offerings	8
Percentage of revenue from department of defense	78.00%	76.00%
Percentage of revenue from Federal Civilian agencies	22.00%	24.00%
Percentage of revenue from PEO Soldiers Contract	11.00%	14.00%
PEO Soldier base contract term	1 year
PEO Soldier option contract term	1 year
Number of Soldier option contract terms	2
Number of reportable segment	1

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Common Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share [Abstract]
Net Income	$ 1,241	$ 1,975
Weighted average number of basic shares outstanding during the period	13,104	12,812
Effect of dilutive potential common shares	623
Weighted average number of diluted shares outstanding during the period	13,727	12,812
Basic earnings per share	$ 0.09	$ 0.15
Diluted earnings per share	$ 0.09	$ 0.15

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Business Overview

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Business Overview

2. Business Overview

NCI provides IT and professional services and solutions by leveraging its eight core service offerings: cloud computing and IT infrastructure optimization; enterprise information management and advanced analytics; cybersecurity and information assurance; IT service management; engineering and logistics support; software and systems development/integration; health IT and medical support; and modeling, simulation, and training. The Company provides these services to U.S. Defense, Intelligence, and Federal Civilian agencies. The majority of the Company’s revenue was derived from contracts with the U.S. Federal Government, directly as a prime contractor or as a subcontractor. For the quarter ended March 31, 2014 and 2013, the Company generated approximately 78% and 76% of revenues, respectively, from the Department of Defense, including agencies within the intelligence community, and approximately 22% and 24% of revenues, respectively, from federal civilian agencies. The Company’s PEO Soldier contract is the Company’s largest revenue-generating contract and accounted for approximately 11% and 14% of our revenues for the quarters ended March 31, 2014 and 2013, respectively. The Company’s PEO Soldier contract is a cost-plus contract consisting of a one year base period and two one year option periods, commencing in September 2012. The Company primarily conducts business throughout the United States. We report operating results and financial data as one reportable segment.

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 191	$ 50
Accounts receivable, net	67,129	63,991
Deferred tax assets, net	3,213	3,217
Prepaid expenses and other current assets	4,867	2,941
Total current assets	75,400	70,199
Property and equipment, net	9,507	9,752
Other assets	1,991	2,113
Deferred tax assets, net	39,951	39,990
Intangible assets, net	4,935	5,340
Total assets	131,784	127,394
Current liabilities:
Accounts payable	20,865	17,371
Accrued salaries and benefits	14,725	16,645
Deferred revenue	2,463	2,594
Other accrued expenses	4,879	4,578
Total current liabilities	42,932	41,188
Long-term debt		1,000
Other long-term liabilities	3,725	3,399
Total liabilities	46,657	45,587
Stockholders' equity:
Additional paid-in capital	72,984	70,905
Treasury stock at cost-917 shares of Class A common stock as of March 31, 2014 and December 31, 2013	(8,331)	(8,331)
Retained earnings	20,211	18,970
Total stockholders' equity	85,127	81,807
Total liabilities and stockholders' equity	131,784	127,394
Class A Common Stock [Member]
Stockholders' equity:
Common stock	174	174
Class B Common Stock [Member]
Stockholders' equity:
Common stock	$ 89	$ 89

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Accounts Receivable (Tables)

3 Months Ended

Mar. 31, 2014

Receivables [Abstract]

Summary of Accounts Receivable

Accounts receivable consist of billed and unbilled amounts at the end of each period:

	As of
	March 31, 2014		December 31, 2013
Billed receivables	$	32,346	$	31,398
Unbilled receivables:
Amounts billable at end of period		26,905		19,215
Other		8,666		14,166
Total unbilled receivables		35,571		33,381
Total accounts receivable		67,917		64,779
Less: Allowance for doubtful accounts		788		788
Total accounts receivable, net	$	67,129	$	63,991

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Document and Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 25, 2014 Class A Common Stock [Member]	Apr. 25, 2014 Class B Common Stock [Member]
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Entity Registrant Name	NCI, Inc.
Entity Central Index Key	0001334478
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		8,253,332	4,700,000

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Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2014

Property Plant And Equipment [Abstract]

Summary of Property and Equipment

The following table details property and equipment at the end of each period:

	As of
	March 31, 2014		December 31, 2013
Property and equipment
Furniture and equipment	$	23,147	$	23,054
Leasehold improvements		9,194		8,488
Real property		549		549
		32,890		32,091
Less: Accumulated depreciation and amortization		23,383		22,339
Property and equipment, net	$	9,507	$	9,752

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Class A Common Stock [Member]
Common stock, par value	$ 0.019	$ 0.019
Common stock, shares authorized	37,500	37,500
Common stock, shares issued	9,170	9,142
Common stock, shares outstanding	8,253	8,226
Treasury stock at cost, shares	917	917
Class B Common Stock [Member]
Common stock, par value	$ 0.019	$ 0.019
Common stock, shares authorized	12,500	12,500
Common stock, shares issued	4,700	4,700
Common stock, shares outstanding	4,700	4,700

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Share-Based Payments

3 Months Ended

Mar. 31, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share-Based Payments

7. Share-Based Payments

During the first three months of 2014, the Company granted zero stock options and had 30,000 stock options exercised. As of March 31, 2014, there were approximately 1,748,000 stock options outstanding.

During the first three months of 2014, the Company granted zero shares of restricted stock, and 6,250 restricted shares vested, with 2,269 shares cancelled to cover individual tax liabilities. As of March 31, 2014, there were approximately 77,500 shares of restricted stock outstanding.

During the first three months of 2014, approximately 737,000 of the options granted in June of 2013 vested on an accelerated vesting schedule, as the stock price reached two discrete acceleration milestones of a continuous 30-day average stock price of $8.00 and $10.00 per share, respectively. This added approximately $1.1 million and $0.4 million in additional stock compensation costs to general and administrative expenses and cost of revenue, respectively.

The following table summarizes stock compensation for the three months ended March 31, 2014 and 2013:

	For the Three Months Ended March 31,
	2014		2013
	(in thousands)
Cost of revenue	$	476	$	57
General and administrative		1,468		240
	$	1,944	$	297

As of March 31, 2014, there was approximately $1.9 million of total unrecognized compensation cost related to unvested stock compensation arrangements. This cost is expected to be fully amortized over the next three years, with approximately $1.0 million, $0.9 million, and $0.1 million amortized during the remainder of 2014, and the full year of 2015, and part of 2016, respectively. The cost of stock compensation is included in the Company’s Consolidated Statements of Income and expensed over the service period of the options.

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Intangible Assets

3 Months Ended

Mar. 31, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets

6. Intangible Assets

The following table details intangible assets at the end of each period:

	As of
	March 31, 2014		December 31, 2013
Contract and customer relationships	$	20,987	$	20,987
Less: Accumulated amortization		16,052		15,647
Intangible assets, net	$	4,935	$	5,340

Amortization expense of intangible assets for the quarters ended March 31, 2014 and 2013 was $0.4 million and $0.5 million, respectively.

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Earnings Per Share - Additional Information (Detail) (Equity Option [Member])	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Equity Option [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Anti-dilutive securities excluded from computation of diluted earnings per share	21,000	793,000

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Details of Intangible Assets

The following table details intangible assets at the end of each period:

	As of
	March 31, 2014		December 31, 2013
Contract and customer relationships	$	20,987	$	20,987
Less: Accumulated amortization		16,052		15,647
Intangible assets, net	$	4,935	$	5,340

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Related Party Transactions

3 Months Ended

Mar. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions

10. Related Party Transactions

The Company purchased services under a subcontract from Renegade Technology Systems, Inc. (formerly Net Commerce Corporation), which is a Government contractor wholly-owned by Rajiv Narang, the son of Charles K. Narang, the Chairman and Chief Executive Officer of the Company. For the three months ended March 31, 2014 and 2013, the expense incurred under this agreement was approximately $354,000 and $241,000 respectively. As of March 31, 2014 and December 31, 2013, approximate outstanding amounts due to Renegade Technology Systems, Inc. were $73,000 and $157,000, respectively.

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Debt

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Debt

8. Debt

The Company’s senior credit facility, as amended in December 2010, December 2012, and subsequently amended in December 2013, consists of a revolving line of credit with a borrowing capacity of up to an $80.0 million principal amount and a $45.0 million accordion feature allowing us to increase our borrowing capacity to up to a $125.0 million principal amount, subject to obtaining commitments for the incremental capacity from existing or new lenders. The outstanding borrowings are collateralized by a security interest in substantially all the Company’s assets. The lenders also require a direct assignment of all contracts at the lenders’ discretion. The outstanding balance under the credit facility accrues interest based on one-month LIBOR plus an applicable margin, ranging from 210 to 310 basis points, based on the ratio of our outstanding senior funded debt to Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) as defined in the credit facility agreement. The credit facility expires on January 31, 2017.

The credit facility contains various restrictive covenants that, among other things, restrict the Company’s ability to: incur or guarantee additional debt; make certain distributions, investments and other restricted payments, including limits on cash dividends on the Company’s outstanding common stock or equivalent equity interests; enter into transactions with certain affiliates; create or permit certain liens; and consolidate, merge, or sell assets. In addition, the credit facility contains certain financial covenants that require the Company to: maintain a minimum tangible net worth; maintain a minimum fixed charge coverage ratio and a minimum funded debt to earnings ratio; and limit capital expenditures below certain thresholds. As of March 31, 2014 and December 31, 2013, the Company was in compliance with all of its loan covenants.

The credit facility allows the Company to use borrowings thereunder of up to $17.5 million to repurchase shares of Class A common stock. No stock repurchases took place in the three months ended March 31, 2014. At March 31, 2014, $16.7 million was remaining under the Board of Directors’ authorization for shares repurchases.

During the first quarter of 2014, NCI had a weighted average outstanding loan balance of $3.8 million which accrued interest at a weighted average borrowing rate of 2.3%. During the first quarter of 2013, NCI had a weighted average outstanding loan balance of $21.2 million which accrued interest at a weighted average borrowing rate of 2.7%.

As of March 31, 2014, the outstanding balance under the credit facility was zero and interest accrued at a rate of LIBOR plus 210 basis points, or 2.3%. As of December 31, 2013, the outstanding balance under the credit facility was $1.0 million and interest accrued at a rate of one-month LIBOR plus 210 basis points, or 2.3%.

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Restructuring Charge

3 Months Ended

Mar. 31, 2014

Restructuring And Related Activities [Abstract]

Restructuring Charge

9. Restructuring Charge

During December 2011, management committed to, implemented, and completed a restructuring plan. The restructuring was done to reduce costs through downsizing our physical locations.

The activity and balance of the restructuring liability accounts for the quarter ended March 31, 2014 are as follows:

	Lease and Facilities Exit Costs
Balance as of January 1, 2013	$	1,573
Cash payments		(645	)
Balance as of December 31, 2013		928
Cash payments		(133	)
Balance as of March 31, 2014	$	795
Amounts contained in balance sheet as of March 31, 2014
Other accrued expenses		384
Other long-term liabilities		411
Total	$	795

The accrued amounts related to the lease and facilities exit costs will be reduced over the respective lease terms, the longest of which extends through 2017.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Common Share

 The following details the computation of basic and diluted earnings per common share (Class A and Class B) for the three months ended March 31, 2014 and 2013.

	Three months ended March 31,
	2014		2013
	(in thousands, except per share data)
Net Income	$	1,241	$	1,975
Weighted average number of basic shares outstanding during the period		13,104		12,812
Effect of dilutive potential common shares		623		—
Weighted average number of diluted shares outstanding during the period		13,727		12,812
Basic earnings per share	$	0.09	$	0.15
Diluted earnings per share	$	0.09	$	0.15

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Restructuring Charge - Restructuring Liability Accounts (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
Other accrued expenses	$ 4,879	$ 4,578
Other long-term liabilities	3,725	3,399
Lease and Facilities Exit Costs [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance	928	1,573
Cash payments	(133)	(645)
Ending Balance	795	928
Lease and Facilities Exit Costs [Member] | Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Other accrued expenses	384
Other long-term liabilities	411
Total	$ 795

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Restructuring Charge (Tables)

3 Months Ended

Mar. 31, 2014

Restructuring And Related Activities [Abstract]

Restructuring Liability Accounts

The activity and balance of the restructuring liability accounts for the quarter ended March 31, 2014 are as follows:

	Lease and Facilities Exit Costs
Balance as of January 1, 2013	$	1,573
Cash payments		(645	)
Balance as of December 31, 2013		928
Cash payments		(133	)
Balance as of March 31, 2014	$	795
Amounts contained in balance sheet as of March 31, 2014
Other accrued expenses		384
Other long-term liabilities		411
Total	$	795

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Accounts Receivable - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2014
Receivables [Abstract]
Maximum period in which unbilled receivables are expected to be billed	12 months

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:
Net Income	$ 1,241	$ 1,975
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	1,449	1,618
Share-based payments	1,943	298
Deferred income taxes	43	(6)
Changes in operating assets and liabilities:
Accounts receivable, net	(3,138)	(17,404)
Prepaid expenses and other assets	(1,805)	3,215
Accounts payable	3,494	1,567
Accrued expenses and other liabilities	(2,129)	475
Net cash provided by (used in) operating activities	1,098	(8,262)
Cash flows from investing activities:
Purchases of property and equipment	(93)	(140)
Net cash used in investing activities	(93)	(140)
Cash flows from financing activities:
Borrowings under credit facility	29,559	28,558
Repayments on credit facility	(30,559)	(20,058)
Proceeds from exercise of stock options	163
Shares repurchased for tax withholdings on vesting of restricted shares	(27)
Net cash (used in) provided by financing activities	(864)	8,500
Net change in cash and cash equivalents	141	98
Cash and cash equivalents, beginning of period	50	763
Cash and cash equivalents, end of period	191	861
Supplemental disclosure of cash flow information:
Interest	106	195
Income taxes	843	131
Non-cash investing and finance activities during the period for:
Leasehold improvements acquired under tenant improvement funds	$ 706

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Property and Equipment

3 Months Ended

Mar. 31, 2014

Property Plant And Equipment [Abstract]

Property and Equipment

5. Property and Equipment

The following table details property and equipment at the end of each period:

	As of
	March 31, 2014		December 31, 2013
Property and equipment
Furniture and equipment	$	23,147	$	23,054
Leasehold improvements		9,194		8,488
Real property		549		549
		32,890		32,091
Less: Accumulated depreciation and amortization		23,383		22,339
Property and equipment, net	$	9,507	$	9,752

Depreciation expense for the three months ended March 31, 2014 and 2013 was $1.0 million and $1.1 million, respectively.

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Property and Equipment - Summary of Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 32,890	$ 32,091
Less: Accumulated depreciation and amortization	23,383	22,339
Property and equipment, net	9,507	9,752
Furniture and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	23,147	23,054
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	9,194	8,488
Real Property [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 549	$ 549

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Share-Based Payments (Tables)

3 Months Ended

Mar. 31, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Compensation

The following table summarizes stock compensation for the three months ended March 31, 2014 and 2013:

	For the Three Months Ended March 31,
	2014		2013
	(in thousands)
Cost of revenue	$	476	$	57
General and administrative		1,468		240
	$	1,944	$	297