10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

FOR THE QUARTER ENDED SEPTEMBER 30, 2016

☐ 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.    ☒  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).    ☒  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	☐

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

As of October 28, 2016, there were 9,034,823 shares outstanding of the registrant’s Class A common stock and 4,500,000 shares outstanding of the registrant’s Class B common stock. Shares of the registrants Class B common stock are convertible on a one-for-one basis into shares of the registrants Class A common stock.

NCI, INC.

		PAGE
PART I: UNAUDITED FINANCIAL INFORMATION			1
Item 1.	Condensed Consolidated Financial Statements		1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		16
Item 4.	Controls and Procedures		16
PART II: OTHER INFORMATION
Item 1.	Legal Proceedings		17
Item 1A.	Risk Factors		17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		17
Item 3.	Defaults Upon Senior Securities		17
Item 4.	Mine Safety Disclosures		17
Item 5.	Other Information		17
Item 6.	Exhibits		18
	Signatures		19

PART 1

FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

NCI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in thousands, except per share data)

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Revenue	$	79,753	$	82,310	$	245,308	$	249,077
Operating expenses:
Cost of revenue		66,305		68,677		204,213		207,832
General and administrative expenses		6,434		6,445		19,375		19,941
Depreciation and amortization		1,737		1,794		5,213		5,774
Acquisition and integration related expenses		—		6		—		428
Total operating expenses		74,476		76,922		228,801		233,975
Operating income		5,277		5,388		16,507		15,102
Interest expense, net		134		204		477		662
Income before income taxes		5,143		5,184		16,030		14,440
Provision for income taxes		1,882		2,013		6,206		5,818
Net income	$	3,261	$	3,171	$	9,824	$	8,622
Earnings per common and common equivalent share:
Basic:
Weighted average shares outstanding		13,201		13,029		13,180		13,004
Net income per share	$	0.25	$	0.24	$	0.75	$	0.66
Diluted:
Weighted average shares outstanding		13,857		13,697		13,863		13,659
Net income per share	$	0.24	$	0.23	$	0.71	$	0.63
Cash dividend declared and paid per share	$	—	$	—	$	0.15	$	0.12

The accompanying notes are an integral

part of these condensed consolidated financial statements

1

NCI, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except par value)

	As of September 30, 2016			As of December 31, 2015
Assets:
Current assets:
Cash and cash equivalents	$	244		$	233
Accounts receivable, net		53,332			60,044
Prepaid expenses and other current assets		3,979			3,447
Total current assets		57,555			63,724
Property and equipment, net		6,338			6,698
Other assets		1,525			1,548
Deferred tax assets, net		38,066			38,789
Intangible assets, net		16,498			19,231
Goodwill		33,878			33,878
Total assets	$	153,860		$	163,868
Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable		11,226			19,693
Accrued salaries and benefits		17,613			18,977
Deferred revenue		2,312			2,217
Other accrued expenses		4,563			3,843
Total current liabilities		35,714			44,730
Long-term debt		—			10,000
Other long-term liabilities		2,622			2,578
Total liabilities		38,336			57,308
Stockholders’ equity:
Class A common stock, $0.019 par value—37,500 shares authorized; 9,952 shares issued and 9,035 shares outstanding as of September 30, 2016, and 9,843 shares issued and 8,961 shares outstanding as of December 31, 2015		189			187
Class B common stock, $0.019 par value—12,500 shares authorized; 4,500 shares issued and outstanding as of September 30, 2016 and December 31, 2015		86			86
Additional paid-in capital		77,727			76,569
Treasury stock at cost—917 shares of Class A common stock as of September 30, 2016 and December 31, 2015		(8,331	)		(8,331	)
Retained earnings		45,853			38,049
Total stockholders’ equity		115,524			106,560
Total liabilities and stockholders’ equity	$	153,860		$	163,868

The accompanying notes are an integral

part of these condensed consolidated financial statements

2

NCI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

	Nine months ended September 30,
	2016			2015
Cash flows from operating activities:
Net income	$	9,824		$	8,622
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,213			5,774
Share-based compensation		769			1,036
Deferred income taxes		723			228
Changes in operating assets and liabilities:
Accounts receivable, net		6,712			5,421
Prepaid expenses and other assets		(509	)		3,893
Accounts payable		(8,467	)		(1,387	)
Accrued expenses and other liabilities		(504	)		(1,105	)
Net cash provided by operating activities		13,761			22,482
Cash flows from investing activities:
Purchases of property and equipment		(2,121	)		(1,537	)
Cash paid for acquisition, net of cash acquired		—			(56,657	)
Net cash used in investing activities		(2,121	)		(58,194	)
Cash flows from financing activities:
Borrowings under credit facility		126,303			146,395
Repayments on credit facility		(136,303	)		(135,099	)
Proceeds from exercise of stock options		391			235
Repurchase of stock awards		—			(53	)
Dividends paid		(2,020	)		(1,561	)
Net cash (used in) provided by financing activities		(11,629	)		9,917
Net change in cash and cash equivalents		11			(25,795	)
Cash and cash equivalents, beginning of period		233			25,819
Cash and cash equivalents, end of period	$	244		$	24
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	372		$	588
Income taxes	$	4,670		$	2,871

The accompanying notes are an integral

part of these condensed 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 (collectively “NCI” or the “Company”) have been prepared in accordance with generally accepted accounting principles in the U. S. (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U. S. Securities and Exchange Commission (the “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 condensed consolidated financial statements reflect all adjustments necessary to fairly present the Company’s financial position as of September 30, 2016 and its results of operations for the three and nine months ended September 30, 2016 and 2015, and cash flows for the nine months ended September 30, 2016 and 2015, 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, 2015, as filed with the SEC.

Recently Issued Accounting Pronouncements

On November 20, 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes. To simplify the presentation of deferred income taxes, the amendments in this ASU require that deferred tax assets and liabilities be classified as non-current in a classified balance sheet. As permitted, the Company elected to early adopt this ASU using the retrospective approach, effective with its Form 10-Q filing for March 31, 2016. As a result of adopting this ASU, current net deferred taxes of $4.0 million were reclassified to net non-current deferred taxes as of December 31, 2015. The adoption of ASU 2015-17 had no impact on the Company’s consolidated statements of income or cash flows for the year ended December 31, 2015 or the condensed consolidated statements of income or cash flows for the three and nine month periods ended September 30, 2016.

In February 2016, the FASB issued ASU 2016-02, which requires the recognition of right-to-use assets and lease liabilities arising from capital leases and operating leases in the statement of comprehensive income and the statement of financial position, respectively. The Company will adopt the standard effective January 1, 2019. The Company has not yet completed its evaluation of the impact that the standard may have on its consolidated balance sheet. The actual impact will depend on the Company’s lease portfolio at the time of adoption.

In March 2016, the FASB issued ASU 2016-08, which clarifies the implementation guidance with respect to principal versus agent considerations under the new revenue recognition standard, ASU 2014-09, Revenue from Contracts with Customers. In April 2016, the FASB issued ASU 2016-10, which clarifies the implementation guidance with respect to identifying promised goods or services from a principal and agent perspective under ASU 2014-09. The Company will adopt the standard effective January 1, 2018 and is continuing to evaluate the full effect that ASU 2014-09 and related subsequent updates will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, which simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees’ maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. The Company is evaluating the full effect that ASU 2016-09 will have on its consolidated financial statements and will adopt the standard effective January 1, 2017, but at this time believe it will not have a material effect on its consolidated financial statements when it is adopted by the Company in 2017.

In August 2016, the FASB issued ASU 2016-15, which provides updated guidance on eight specific cash flow issues and how they should be presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. The eight specific cash flow issues addressed are being evaluated by the Company as to the likelihood of those cash flow transactions occurring and potential corresponding effect on the Company’s statement of cash flows. The Company will adopt the standard effective January 1, 2018.

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2. Business Overview

NCI is a leading provider of enterprise solutions and services to U.S. defense, intelligence, health care and civilian government agencies. The Company has the expertise and proven track record to solve its customers’ most important and complex mission challenges through technology and innovation. The Company’s team of highly skilled professionals focuses on delivering cost-effective solutions and services in the areas of agile software application and systems development/integration; cybersecurity and information assurance; engineering and logistics support; enterprise information management and advanced analytics; cloud computing and IT infrastructure optimization; health IT and medical support; IT service management; and modeling, simulation and training. Headquartered in Reston, Virginia, the Company has approximately 2,000 employees operating at more than 100 locations worldwide. The majority of the Company’s revenue is derived from contracts with the U.S. Federal Government, directly as a prime contractor or as a subcontractor. NCI primarily conducts business throughout the U. S. The Company reports operating results and financial data as one reportable segment.

NCI’s Program Executive Office Soldier (“PEO Soldier”) contract is the Company’s largest revenue-generating contract and accounted for approximately 16% and 9% of revenue for the three months ended September 30, 2016 and 2015, respectively. PEO Soldier accounted for approximately 16% and 10% of revenue for the nine months ended September 30, 2016 and 2015, respectively. The Company’s PEO Soldier program is a cost-plus fee contract consisting of a base period and four option periods for a total term of five years, which commenced in October 2015. NCI’s Cyber Network Operations and Security Support (“CNOSS”) program, supporting the U.S. Army Network Enterprise Technology Command accounted for approximately 12% and 7% of revenue for the three months ended September 30, 2016 and 2015, respectively. CNOSS accounted for approximately 11% and 6% of revenue for the nine months ended September 30, 2016 and 2015, respectively. This cost-plus-fixed-fee, single-award indefinite delivery indefinite quantity contract consists of a 12-month base period with two one-year option periods and one six-month option period, and commenced in October 2014.

3. Earnings Per Share

Basic earnings per share excludes dilution and are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects 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. Shares that are anti-dilutive are not included in the computation of diluted earnings per share. For the three months ended September 30, 2016 and 2015, approximately 25,000 and 30,000 shares, respectively, were not included in the computation of diluted earnings per share, because to do so would have been anti-dilutive. For the nine months ended September 30, 2016 and 2015, approximately 11,000 and 63,000 shares, respectively, were not included in the computation of diluted earnings per share, because to do so would have been anti-dilutive. The following table details the computation of basic and diluted earnings per common share (Class A and Class B) for the three and nine months ended September 30, 2016 and 2015.

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Net income	$	3,261	$	3,171	$	9,824	$	8,622
Weighted average number of basic shares outstanding during the period		13,201		13,029		13,180		13,004
Dilutive effect of stock options and restricted stock after application of treasury stock method		656		668		683		655
Weighted average number of diluted shares outstanding during the period		13,857		13,697		13,863		13,659
Basic earnings per share	$	0.25	$	0.24	$	0.75	$	0.66
Diluted earnings per share	$	0.24	$	0.23	$	0.71	$	0.63

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4. Accounts Receivable

Accounts receivable consists of billed and unbilled amounts. The following table details accounts receivable at the end of each period:

	As of
	September 30, 2016		December 31, 2015
Billed receivables	$	22,762	$	23,621
Unbilled receivables:
Amounts billable at end of period		26,295		27,185
Other		5,017		9,980
Total unbilled receivables		31,312		37,165
Total accounts receivable		54,074		60,787
Less: Allowance for doubtful accounts		742		742
Total accounts receivable, net	$	53,332	$	60,044

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. Substantially all unbilled receivables are expected to be billed and collected within the next 12 months.

5. Property and Equipment

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

	As of
	September 30, 2016		December 31, 2015
Property and equipment
Furniture and equipment	$	20,949	$	26,573
Leasehold improvements		7,411		9,323
Real property		549		549
		28,909		36,444
Less: Accumulated depreciation and amortization		22,571		29,746
Property and equipment, net	$	6,338	$	6,698

Depreciation and amortization expense for the three months ended September 30, 2016 and 2015 was $0.8 million. Depreciation expense for the nine months ended September 30, 2016 and 2015 was $2.5 million and $2.6 million, respectively.

6. Intangible Assets

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

	As of
	September 30, 2016			December 31, 2015
Contract and customer relationships	$	39,594		$	39,594
Developed software		1,113			1,113
Less: Accumulated amortization		(24,209	)		(21,476	)
Intangible assets, net	$	16,498		$	19,231

Amortization expense of intangible assets for the three months ended September 30, 2016 and 2015 was $0.9 million and $1.0 million, respectively. Amortization expense of intangible assets for the nine months ended September 30, 2016 and 2015 was $2.7 million and $3.2 million, respectively. Intangible assets are primarily amortized on a straight line basis over periods ranging from three to 11 years. Expected amortization expense for the remainder of the fiscal year ending December 31, 2016, and for each of the fiscal years thereafter, is as follows:

6

For the year ending December 31,
2016 (remaining three months)	$	911
2017		3,632
2018		3,149
2019		3,049
2020		3,027
Thereafter		2,730
	$	16,498

7. Share-Based Payments

During the three months ended September 30, 2016, the Company did not grant any stock options, and during the nine months ended September 30, 2016, the Company granted 25,000 stock options to purchase shares of Class A common stock with a weighted-average exercise price of $13.29, which represents the fair market value of the Company’s Class A common stock at the date of grant. During the three months ended September 30, 2016, a total of 35,426 stock options were exercised at a weighted-average exercise price of $6.38. During the nine months ended September 30, 2016, a total of 73,758 stock options were exercised at a weighted-average exercise price of $5.66. As of September 30, 2016, there were 1,499,074 stock options outstanding.

During the three months ended September 30, 2016, no restricted stock was granted and 5,000 shares of restricted stock were cancelled. During the nine months ended September 30, 2016, 25,000 shares of restricted stock were granted and 25,000 shares of restricted stock were cancelled. As of September 30, 2016, there were 315,000 shares of restricted stock outstanding.

The following table summarizes stock compensation expense allocated to cost of revenue and general and administrative costs for the three and nine months ended September 30, 2016 and 2015:

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Cost of revenue	$	47	$	76	$	162	$	199
General and administrative		179		264		607		837
	$	226	$	340	$	769	$	1,036

As of September 30, 2016, there was approximately $3.3 million of total unrecognized compensation cost related to unvested stock compensation arrangements. This cost is expected to be fully amortized over the next five years, with approximately $0.2 million, $0.9 million, $0.9 million, $0.7 million and $0.6 million amortized during the remainder of 2016, and the full years of 2017, 2018, 2019, and 2020, respectively. The cost of stock compensation is included in the Company’s Condensed Consolidated Statements of Income and expensed over the service period of the options.

8. Debt

NCI’s senior credit facility, amended in December 2014, and referred to herein as the “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 the Company to increase its 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 of 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 the one-month London Interbank offered rate or LIBOR, plus an applicable margin, ranging from 210 to 310 basis points, based on the ratio of the Company’s outstanding senior funded debt to Earnings before Interest, Taxes, Depreciation, and Amortization or EBITDA, as defined in the credit facility. The credit facility expires on January 31, 2017. Accordingly all borrowings are classified as current liabilities as they are due and payable within the next 12 months.

The credit facility contains various covenants that limit, among other things, 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 fixed charge coverage ratio, maintain a minimum funded debt to earnings ratio; and limit capital expenditures below certain thresholds. As of September 30, 2016, the Company was in compliance with all of its loan covenants.

7

The credit facility allows the Company to use borrowings thereunder of up to $17.5 million to repurchase outstanding shares of Class A common stock. No stock repurchases took place in the three or nine months ended September 30, 2016. At September 30, 2016, $16.7 million was remaining under the board of directors’ authorization for share repurchases.

During the third quarter of 2016, the Company had a weighted average outstanding loan balance of $6.5 million which accrued interest at a weighted average borrowing rate of 2.5%. During the third quarter of 2015, the Company had a weighted average outstanding loan balance of $18.8 million which accrued interest at a weighted average borrowing rate of 2.3%.

As of September 30, 2016, there was no outstanding balance under the credit facility.

9. Computech Acquisition

On January 1, 2015, the Company completed its purchase of 100% of the outstanding stock of Computech, Inc. (“Computech”), a leader in agile and lean application software development and IT operations and maintenance, for approximately $56.7 million, net of cash acquired. The acquisition has been accounted for under the acquisition method of accounting, which requires the total purchase consideration to be allocated to the assets acquired and liabilities assumed based on estimates of fair value. The excess of the purchase consideration over the amounts assigned to tangible or intangible assets acquired and liabilities assumed was recognized as goodwill.

Allocation of Purchase Price

The Company has completed the valuation of the assets acquired and liabilities assumed of Computech. The fair values assigned to the intangible assets acquired were based on estimates, assumptions, and other information compiled by management, including independent valuations that utilized established valuation techniques. Based on the Company’s valuation, the total consideration of approximately $56.7 million, net of $3.3 million of cash acquired, has been allocated to assets acquired (including identifiable intangible assets and goodwill) and liabilities assumed, as follows:

Accounts receivable and other assets		8,407
Goodwill		33,878
Definite-life intangible assets		19,720
Accrued salary and benefits		(4,112	)
Other accrued expenses		(1,236	)
	$	56,657

The definite life intangibles recognized in the allocation of the Computech purchase price consists of $18.6 million in contracts and customer relationships and $1.1 million in developed software. The fair value of the definite-lived intangible asset for contracts and customer relationships is based on existing customer contracts and anticipated follow-on contracts with existing customers and will be amortized on a straight-line basis over its expected life of seven years. The fair value of the definite-lived intangible asset for developed software will be amortized on a straight-line basis over its expected useful life of three years.

All goodwill and intangible asset amortization related to the acquisition of Computech is expected to be deductible for income tax purposes.

10. Dividends

Our board of directors declared and the Company paid the following dividends during the periods presented:

Declaration Date	Dividend Per Share		Record Date		Total Amount		Payment Date
February 10, 2015	$	0.12		February 25, 2015	$	1,561		March 13, 2015
February 8, 2016	$	0.15		February 26, 2016	$	2,020		March 18, 2016

11. Related Party Transactions

The Company purchases services under a subcontract from Renegade Technology Systems, Inc., which is a government contractor wholly-owned by Rajiv Narang, the son of Charles K. Narang, Chairman of the board of directors. For the three months ended September 30, 2016 and 2015, the expense incurred under this agreement was approximately $298,000 and $177,000, respectively. For the nine months ended September 30, 2016 and 2015, the expense incurred under this agreement was approximately $656,000 and $525,000, respectively. As of September 30, 2016 and 2015, outstanding amounts due to Renegade Technology Systems, Inc. under this agreement were $103,150 and $51,137, respectively.

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12. Contingencies

Government Audits

Payments to the Company on U.S. Federal Government contracts are subject to adjustment upon audit by various agencies of the U.S. Federal Government. Audits of costs and the related payments have been performed through 2007 for NCI Information Systems, Inc., the Company’s primary corporate vehicle for government contracting. In the opinion of management, the final determination of costs and related payments for unaudited years will not have a material effect on the Company’s financial position, results of operations, or liquidity.

Litigation

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 liquidity.

13. Subsequent Events

Change in Management

On October 31, 2016, the Company announced that Brian J. Clark, the Company’s President and Chief Executive Officer (“CEO”), has resigned from his employment with the Company and as a member of the Board of Directors of the Company, effective as of October 31, 2016. In connection with his resignation, the Company and Mr. Clark entered into a Separation and Transition Agreement which provides for the payment of certain severance benefits to Mr. Clark including the following: (a) the Company will pay Mr. Clark a total fee of $250,000 for consulting services to be provided through April 30, 2017; (b) the Company will pay Mr. Clark a lump sum cash payment equal to twenty-four months of his annual base salary in the amount of $1,000,000; (c) the Company will pay Mr. Clark a lump sum cash payment equal to his prorated annual bonus for 2016 at the target level of performance in the amount of $420,000; (d) the Company will continue to provide Mr. Clark with health and welfare coverage and executive long-term disability coverage at no additional cost to him for one year; and (e) the Company will repurchase 390,000 stock options held by Mr. Clark that are vested and exercisable as of October 31, 2016 at a purchase price per option equal to the closing sale price of a share of NCI common stock on The Nasdaq Stock Market on October 28, 2016 less the applicable per share exercise price of the options.

The Board has appointed Paul A. Dillahay as the Company’s President and CEO and a member of the Board effective as of October 31, 2016. Mr. Dillahay will initially receive a one-time signing bonus in the amount of $325,000 and will be eligible for an annual cash bonus for the fourth quarter of 2016 equal to $125,000. He will receive an option award of 250,000 shares and a grant of 100,000 shares of restricted stock. The options vest in five equal annual installments beginning on the first anniversary of the grant date. The restricted stock awards vest in accordance with the following schedule: 33 1/3% vest on January 31, 2017; 33 1/3% vest one year from the grant date and 33 1/3% vest two years from the grant date.

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 within the meaning of the Private Securities Litigation Reform Act of 1995. When used anywhere in this Quarterly Report on Form 10-Q, the words “expect”, “believe”, “anticipate”, “estimate”, “intend”, “plan”, and similar expressions are intended to identify forward looking statements. These statements reflect our current views with respect to future events or our future financial or operational performance and involve known and unknown risks, uncertainties and other factors that could cause our actual results or performance to differ materially from those expressed or implied by these forward looking statements. 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 of our revenue; delays performing work under 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 shutdowns 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 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 U.S., 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 (“GWAC”), agency-specific Indefinite Delivery/Indefinite Quantity (“IDIQ”) contracts and/or schedule contracts with the General Services Administration

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• the 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 benefits from future deferred tax assets; and

• 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, 2015, as filed with the SEC, and from time to time in other filings with the SEC, such as our Current Reports on Forms 8-K and Quarterly Reports on Form 10-Q. These forward-looking statements reflect our views and assumptions only as of the date such forward looking statements are made. Except as required by law 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 the “Company,” “NCI,” “we,” “us,” and “our” refer to NCI, Inc., a Delaware corporation, and, where appropriate, its subsidiaries.

OVERVIEW

We are a provider of information technology (“IT”) and professional services and solutions primarily 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 capabilities:

• Cloud Computing and IT Infrastructure Optimization

• Cybersecurity and Information Assurance

• Engineering and Logistics Support

• Enterprise Information Management and Advanced Analytics

• Health IT and Medical Support

• IT Service Management

• Modeling, Training and Simulation

• Agile Software Development and Integration

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, the Company currently operates in more than 100 locations around the globe.

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 September 30,						Nine months ended September 30,
	2016			2015			2016			2015
Revenue derived from prime contracts		92	%		92	%		93	%		92	%

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Customer Group Revenue

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

	Three months ended September 30,						Nine months ended September 30,
	2016			2015			2016			2015
Department of Defense and intelligence agencies		63	%		59	%		63	%		60	%
U.S. Federal civilian agencies		37	%		41	%		37	%		40	%

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.

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 September 30,						Nine months ended September 30,
	2016			2015			2016			2015
Time-and-materials		17	%		23	%		17	%		23	%
Cost-plus fee		63	%		49	%		60	%		48	%
Firm fixed-price		20	%		28	%		23	%		29	%

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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
	September 30, 2016		December 31, 2015
	(in millions)
Funded backlog	$	173	$	147
Total backlog	$	663	$	552

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 are more likely than not to be 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 our unfunded backlog, which is 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, 2015, as filed with the SEC.

Results of Operations

Three Months Ended September 30, 2016 Compared to Three Months Ended September 30, 2015

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 September 30,
	2016		2015		2016			2015
	(in thousands)				(as a percentage of revenue)
Revenue	$	79,753	$	82,310		100.0	%		100.0	%
Operating expenses:
Cost of revenue		66,305		68,677		83.1			83.4
General and administrative expenses		6,434		6,445		8.1			7.8
Depreciation and amortization		1,737		1,794		2.2			2.2
Acquisition and integration related expenses		—		6		—			0.0
Total operating expenses		74,476		76,922		93.4			93.5
Operating income		5,277		5,388		6.6			6.5
Interest expense, net		134		204		0.2			0.2
Income before income taxes		5,143		5,184		6.4			6.3
Provision for income taxes		1,882		2,013		2.3			2.4
Net income	$	3,261	$	3,171		4.1	%		3.9	%

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Revenue

For the three months ended September 30, 2016, revenue decreased by 3.1%, or $2.6 million, over the same period a year ago. The decrease was due mostly to completed contracts, and reductions in staffing and scope of work on certain contracts, partially offset by higher revenues derived under the expanded PEO Soldier program, CNOSS program, and other new contract awards in the past year.

NCI’s PEO Soldier program accounted for $12.7 million, or 16.0% of revenue, in the third quarter of 2016, up $5.4 million from $7.3 million, or 8.8% of revenue, in the third quarter of 2015. NCI’s CNOSS program accounted for $9.9 million, or 12.2% of revenue, in the third quarter of 2016, up $4.5 million from $5.4 million, or 6.6% of revenue, in the third quarter of 2015.

Cost of revenue

Cost of revenue for the three months ended September 30, 2016 was $66.3 million, or 83.1% of revenue, compared to $68.7 million, or 83.4% of revenue, for the three months ended September 30, 2015. The decrease in cost of revenue was primarily the result of lower subcontractor and materials costs, partially offset by higher direct labor and an increase in indirect costs for the period.

General and administrative expenses

General and administrative expenses decreased 0.2%, for the three months ended September 30, 2016, as compared to the same period a year ago. The decrease was primarily due to decreased stock compensation expense.

Depreciation and amortization

Depreciation and amortization expense was approximately $1.7 million and $1.8 million for the three months ended September 30, 2016 and 2015, respectively. The decrease was primarily due to certain fixed assets becoming fully depreciated in the beginning of the third quarter of 2016.

Interest expense, net

Interest expense, net, was $0.1 million and $0.2 million for the quarters ended September 30, 2016 and 2015, respectively. During the third quarter of 2016, we had a weighted average outstanding loan balance of $6.5 million which accrued interest at a weighted average borrowing rate of 2.5%. During the third quarter of 2015, we had a weighted average outstanding loan balance of $18.8 million which accrued interest at a weighted average borrowing rate of 2.3%.

Provision for income taxes

Provision for income taxes decreased by $0.1 million in the three months ended September 30, 2016, as compared to the three months ended September 30, 2015. The effective income tax rate for the quarters ended September 30, 2016 and 2015 was approximately 36.6% and 38.8%, respectively. The decrease in the effective income tax rate was due to a discrete item in the quarter for the period ended September 30, 2016 related to a corporate tax structure reorganization.

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Nine Months Ended September 30, 2016 Compared to Nine Months Ended September 30, 2015

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:

	Nine months ended September 30,
	2016		2015		2016			2015
	(in thousands)				(as a percentage of revenue)
Revenue	$	245,308	$	249,077		100.0	%		100.0	%
Operating expenses:
Cost of revenue		204,213		207,832		83.2			83.4
General and administrative expenses		19,375		19,941		7.9			8.0
Depreciation and amortization		5,213		5,774		2.2			2.3
Acquisition and integration related expenses		—		428		0.0			0.2
Total operating expenses		228,801		233,975		93.3			93.9
Operating income		16,507		15,102		6.7			6.1
Interest expense, net		477		662		0.2			0.3
Income before income taxes		16,030		14,440		6.5			5.8
Provision for income taxes		6,206		5,818		2.5			2.3
Net income	$	9,824	$	8,622		4.0	%		3.5	%

Revenue

For the nine months ended September 30, 2016, total revenue decreased 1.5%, or $3.8 million from $249.1 million to $245.3 million, as compared to the same period a year ago. The decrease was primarily due to, reductions in scope of work, the expiration of task orders and contracts, and lower materials revenue, partially offset by revenues derived under our PEO Soldier and CNOSS programs and, to a lesser extent, from new awards in the past year.

Cost of revenue

Cost of revenue decreased 1.7% or $3.6 million from $207.8 million to $204.2 million, for the nine months ended September 30, 2016, as compared to the same period a year ago. This decrease was primarily the result of reduced subcontractor, materials, and software costs, partially offset by an increase in direct labor costs. Cost of revenue represented 83.2% of revenue for the nine months ended September 30, 2016, as compared to 83.4% for the nine months ended September 30, 2015. This decrease was primarily the result of the greater contribution of direct labor and more efficient absorption of indirect costs.

General and administrative expenses

General and administrative expenses decreased 2.8%, or $0.6 million, for the nine months ended September 30, 2016, as compared to the same period a year ago. The decrease was primarily due to lower indirect labor costs, more efficient allocation of business development expenses, lower executive compensation costs, and decreased stock compensation expense, partially offset by an increase in external strategic consulting costs.

Depreciation and amortization

Depreciation and amortization expense was approximately $5.2 and $5.8 million for the nine months ended September 30, 2016 and 2015, respectively. The decrease was primarily due to certain intangible assets becoming fully amortized in the third quarter of 2015 and due to certain fixed assets becoming fully depreciated within the nine months ended September 30, 2016.

Interest expense, net

Interest expense, net, was approximately $0.5 million and $0.7 million for the nine months ended September 30, 2016 and 2015, respectively. The decrease was primarily attributed to a lower weighted average loan balance.

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Provision for income taxes

For the nine months ended September 30, 2016, the provision for income taxes increased to $6.2 million from $5.8 million in the same period a year ago, due to increased pretax income on an lower effective tax rate. The effective income tax rate for the nine months ended September 30, 2016 was approximately 38.7% as compared to an effective income tax rate of 40.3% for the nine months ended September 30, 2015. The lower effective income tax rate for the nine months ended September 30, 2016 was the result of a decrease in the blended state income tax rate from our current state revenue allocation, and partially due to a discrete item in the quarter related to a corporate tax structure reorganization.

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 the nine months ended September 30, 2016, the balance of accounts receivable decreased by $6.7 million to $53.3 million at the end of the quarter. Days sales outstanding of accounts receivable (“DSO”) decreased 4 days to 62 days at September 30, 2016 as compared to 66 days at December 31, 2015. The decrease in DSO was mostly attributable to the payment of invoices related to certain contracts where payment had been delayed in prior periods. As of September 30, 2016, no debt was outstanding and due under the credit facility, as compared to $10.0 million outstanding as of December 31, 2015, reflecting $10.0 million of net payments during the first nine months of 2016. Net cash provided by operating activities was $13.8 million at September 30, 2016 and was used to pay down debt and meet working capital requirements.

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 2015 and the three and nine months ended September 30, 2016, we did not repurchase any shares. At September 30, 2016, we had $16.7 million remaining under the board of directors’ authorization for share repurchases.

Credit Facility: Our senior credit facility, amended in December 2014, and referred to herein as the “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 of 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 the one-month London Interbank offered rate or 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 or EBITDA as defined in the credit facility.

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 also 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.

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

We are actively engaged with our bank group regarding our credit facility before the current facility expires in January 2017. We anticipate the new facility will be larger and with similar or better terms and conditions as our current facility. As of September 30, 2016, we were in compliance with all our loan covenants.

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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 third quarter of 2016. Refer to the Critical Accounting Policies section in our Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company’s exposure to market risk relates to changes in interest rates for borrowings under its credit facility. For the quarter ended September 30, 2016, a change of one percentage point in interest rates would have changed the Company’s interest expense or cash flows by less than $0.1 million. This estimate is based on our average balances for the period.

Additionally, the Company is subject to credit risks associated with our cash, cash equivalents, and accounts receivable. The Company believes that the concentration of credit risk with respect to cash equivalents is limited due to the high credit quality of these investments. The Company’s investment policy requires that the Company invest excess cash in high-quality investments, which preserve principal, provide liquidity, and minimize investment risk. The Company also believes that its 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 September 30, 2016, under the supervision and with the participation of NCI’s management, including our Chief Executive Officer and our Chief Financial Officer, the Company had evaluated the effectiveness of its disclosure controls and procedures, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, NCI’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective, as of September 30, 2016, such that the information that is required to be disclosed in NCI’s 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 NCI’s Chief Executive Officer and 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) as a result of the evaluation required by Rule 13a-15(d) under the Exchange Act during the three months ended September 30, 2016 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

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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 currently 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 in our risk factors 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, 2015, as 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.

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Item 6. Exhibits

Number	Description
2.1	Stock Purchase Agreement among NCI Information Systems, Inc. (“NCIIS”), a wholly owned subsidiary of the Registrant, the Sellers named therein, the Phantom Stock Holders named therein and Computech, Inc. dated as of December 24, 2011 (incorporated herein by reference from Exhibit 2.1 to the Registrant’s Current Report on Form 8-K, as filed with the Commission on December 29, 2014)
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 the 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 the 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 September 12, 2009).
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.

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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: November 4, 2016	By:	/s/ LUCAS J. NAREL
		Lucas J. Narel
		Executive Vice President, Chief Financial Officer and Treasurer
		(Principal Financial Officer)
		(Principal Accounting Officer)

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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, Paul A. Dillahay, 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: November 4, 2016	/s/ PAUL A. DILLAHAY
	Paul A. Dillahay
	Chief Executive Officer and President
	(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: November 4, 2016	/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 September 30, 2016, as filed with the Securities and Exchange Commission (the “Report”), each of Paul A. Dillahay, Chief Executive Officer and President, and Lucas J. Narel, Executive Vice President, Chief Financial Officer and Treasurer of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(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 for the periods presented therein.

Date: November 4, 2016	/s/ PAUL A. DILLAHAY
	Paul A. Dillahay
	Chief Executive Officer and President
	(Principal Executive Officer)
Date: November 4, 2016	/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.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 28, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Trading Symbol	NCIT
Entity Registrant Name	NCI, Inc.
Entity Central Index Key	0001334478
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Class A Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		9,034,823
Class B Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		4,500,000

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Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Revenue	$ 79,753	$ 82,310	$ 245,308	$ 249,077
Operating expenses:
Cost of revenue	66,305	68,677	204,213	207,832
General and administrative expenses	6,434	6,445	19,375	19,941
Depreciation and amortization	1,737	1,794	5,213	5,774
Acquisition and integration related expenses		6		428
Total operating expenses	74,476	76,922	228,801	233,975
Operating income	5,277	5,388	16,507	15,102
Interest expense, net	134	204	477	662
Income before income taxes	5,143	5,184	16,030	14,440
Provision for income taxes	1,882	2,013	6,206	5,818
Net income	$ 3,261	$ 3,171	$ 9,824	$ 8,622
Basic:
Weighted average shares outstanding	13,201	13,029	13,180	13,004
Net income per share	$ 0.25	$ 0.24	$ 0.75	$ 0.66
Diluted:
Weighted average shares outstanding	13,857	13,697	13,863	13,659
Net income per share	$ 0.24	$ 0.23	$ 0.71	$ 0.63
Cash dividend declared and paid per share			$ 0.15	$ 0.12

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 244	$ 233
Accounts receivable, net	53,332	60,044
Prepaid expenses and other current assets	3,979	3,447
Total current assets	57,555	63,724
Property and equipment, net	6,338	6,698
Other assets	1,525	1,548
Deferred tax assets, net	38,066	38,789
Intangible assets, net	16,498	19,231
Goodwill	33,878	33,878
Total assets	153,860	163,868
Current liabilities:
Accounts payable	11,226	19,693
Accrued salaries and benefits	17,613	18,977
Deferred revenue	2,312	2,217
Other accrued expenses	4,563	3,843
Total current liabilities	35,714	44,730
Long-term debt		10,000
Other long-term liabilities	2,622	2,578
Total liabilities	38,336	57,308
Stockholders' equity:
Additional paid-in capital	77,727	76,569
Treasury stock at cost-917 shares of Class A common stock as of September 30, 2016 and December 31, 2015	(8,331)	(8,331)
Retained earnings	45,853	38,049
Total stockholders' equity	115,524	106,560
Total liabilities and stockholders' equity	153,860	163,868
Class A Common Stock [Member]
Stockholders' equity:
Common stock	189	187
Class B Common Stock [Member]
Stockholders' equity:
Common stock	$ 86	$ 86

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Class A Common Stock [Member]
Common stock, par value	$ 0.019	$ 0.019
Common stock, shares authorized	37,500,000	37,500,000
Common stock, shares issued	9,952,000	9,843,000
Common stock, shares outstanding	9,035,000	8,961,000
Treasury stock at cost, shares	917,000	917,000
Class B Common Stock [Member]
Common stock, par value	$ 0.019	$ 0.019
Common stock, shares authorized	12,500,000	12,500,000
Common stock, shares issued	4,500,000	4,500,000
Common stock, shares outstanding	4,500,000	4,500,000

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income	$ 9,824	$ 8,622
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,213	5,774
Share-based compensation	769	1,036
Deferred income taxes	723	228
Changes in operating assets and liabilities:
Accounts receivable, net	6,712	5,421
Prepaid expenses and other assets	(509)	3,893
Accounts payable	(8,467)	(1,387)
Accrued expenses and other liabilities	(504)	(1,105)
Net cash provided by operating activities	13,761	22,482
Cash flows from investing activities:
Purchases of property and equipment	(2,121)	(1,537)
Cash paid for acquisition, net of cash acquired		(56,657)
Net cash used in investing activities	(2,121)	(58,194)
Cash flows from financing activities:
Borrowings under credit facility	126,303	146,395
Repayments on credit facility	(136,303)	(135,099)
Proceeds from exercise of stock options	391	235
Repurchase of stock awards		(53)
Dividends paid	(2,020)	(1,561)
Net cash (used in) provided by financing activities	(11,629)	9,917
Net change in cash and cash equivalents	11	(25,795)
Cash and cash equivalents, beginning of period	233	25,819
Cash and cash equivalents, end of period	244	24
Cash paid during the period for:
Interest	372	588
Income taxes	$ 4,670	$ 2,871

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Basis of Presentation

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of NCI, Inc. and its subsidiaries (collectively “NCI” or the “Company”) have been prepared in accordance with generally accepted accounting principles in the U. S. (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U. S. Securities and Exchange Commission (the “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 condensed consolidated financial statements reflect all adjustments necessary to fairly present the Company’s financial position as of September 30, 2016 and its results of operations for the three and nine months ended September 30, 2016 and 2015, and cash flows for the nine months ended September 30, 2016 and 2015, 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, 2015, as filed with the SEC.

Recently Issued Accounting Pronouncements

On November 20, 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes. To simplify the presentation of deferred income taxes, the amendments in this ASU require that deferred tax assets and liabilities be classified as non-current in a classified balance sheet. As permitted, the Company elected to early adopt this ASU using the retrospective approach, effective with its Form 10-Q filing for March 31, 2016. As a result of adopting this ASU, current net deferred taxes of $4.0 million were reclassified to net non-current deferred taxes as of December 31, 2015. The adoption of ASU 2015-17 had no impact on the Company’s consolidated statements of income or cash flows for the year ended December 31, 2015 or the condensed consolidated statements of income or cash flows for the three and nine month periods ended September 30, 2016.

In February 2016, the FASB issued ASU 2016-02, which requires the recognition of right-to-use assets and lease liabilities arising from capital leases and operating leases in the statement of comprehensive income and the statement of financial position, respectively. The Company will adopt the standard effective January 1, 2019. The Company has not yet completed its evaluation of the impact that the standard may have on its consolidated balance sheet. The actual impact will depend on the Company’s lease portfolio at the time of adoption.

In March 2016, the FASB issued ASU 2016-08, which clarifies the implementation guidance with respect to principal versus agent considerations under the new revenue recognition standard, ASU 2014-09, Revenue from Contracts with Customers. In April 2016, the FASB issued ASU 2016-10, which clarifies the implementation guidance with respect to identifying promised goods or services from a principal and agent perspective under ASU 2014-09. The Company will adopt the standard effective January 1, 2018 and is continuing to evaluate the full effect that ASU 2014-09 and related subsequent updates will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, which simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees’ maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. The Company is evaluating the full effect that ASU 2016-09 will have on its consolidated financial statements and will adopt the standard effective January 1, 2017, but at this time believe it will not have a material effect on its consolidated financial statements when it is adopted by the Company in 2017.

In August 2016, the FASB issued ASU 2016-15, which provides updated guidance on eight specific cash flow issues and how they should be presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. The eight specific cash flow issues addressed are being evaluated by the Company as to the likelihood of those cash flow transactions occurring and potential corresponding effect on the Company’s statement of cash flows. The Company will adopt the standard effective January 1, 2018.

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Business Overview

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Overview

2. Business Overview

NCI is a leading provider of enterprise solutions and services to U.S. defense, intelligence, health care and civilian government agencies. The Company has the expertise and proven track record to solve its customers’ most important and complex mission challenges through technology and innovation. The Company’s team of highly skilled professionals focuses on delivering cost-effective solutions and services in the areas of agile software application and systems development/integration; cybersecurity and information assurance; engineering and logistics support; enterprise information management and advanced analytics; cloud computing and IT infrastructure optimization; health IT and medical support; IT service management; and modeling, simulation and training. Headquartered in Reston, Virginia, the Company has approximately 2,000 employees operating at more than 100 locations worldwide. The majority of the Company’s revenue is derived from contracts with the U.S. Federal Government, directly as a prime contractor or as a subcontractor. NCI primarily conducts business throughout the U. S. The Company reports operating results and financial data as one reportable segment.

NCI’s Program Executive Office Soldier (“PEO Soldier”) contract is the Company’s largest revenue-generating contract and accounted for approximately 16% and 9% of revenue for the three months ended September 30, 2016 and 2015, respectively. PEO Soldier accounted for approximately 16% and 10% of revenue for the nine months ended September 30, 2016 and 2015, respectively. The Company’s PEO Soldier program is a cost-plus fee contract consisting of a base period and four option periods for a total term of five years, which commenced in October 2015. NCI’s Cyber Network Operations and Security Support (“CNOSS”) program, supporting the U.S. Army Network Enterprise Technology Command accounted for approximately 12% and 7% of revenue for the three months ended September 30, 2016 and 2015, respectively. CNOSS accounted for approximately 11% and 6% of revenue for the nine months ended September 30, 2016 and 2015, respectively. This cost-plus-fixed-fee, single-award indefinite delivery indefinite quantity contract consists of a 12-month base period with two one-year option periods and one six-month option period, and commenced in October 2014.

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Earnings Per Share

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share

3. Earnings Per Share

Basic earnings per share excludes dilution and are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects 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. Shares that are anti-dilutive are not included in the computation of diluted earnings per share. For the three months ended September 30, 2016 and 2015, approximately 25,000 and 30,000 shares, respectively, were not included in the computation of diluted earnings per share, because to do so would have been anti-dilutive. For the nine months ended September 30, 2016 and 2015, approximately 11,000 and 63,000 shares, respectively, were not included in the computation of diluted earnings per share, because to do so would have been anti-dilutive. The following table details the computation of basic and diluted earnings per common share (Class A and Class B) for the three and nine months ended September 30, 2016 and 2015.

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Net income	$	3,261	$	3,171	$	9,824	$	8,622
Weighted average number of basic shares outstanding during the period		13,201		13,029		13,180		13,004
Dilutive effect of stock options and restricted stock after application of treasury stock method		656		668		683		655
Weighted average number of diluted shares outstanding during the period		13,857		13,697		13,863		13,659
Basic earnings per share	$	0.25	$	0.24	$	0.75	$	0.66
Diluted earnings per share	$	0.24	$	0.23	$	0.71	$	0.63

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Accounts Receivable

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Accounts Receivable

4. Accounts Receivable

Accounts receivable consists of billed and unbilled amounts. The following table details accounts receivable at the end of each period:

	As of
	September 30, 2016		December 31, 2015
Billed receivables	$	22,762	$	23,621
Unbilled receivables:
Amounts billable at end of period		26,295		27,185
Other		5,017		9,980
Total unbilled receivables		31,312		37,165
Total accounts receivable		54,074		60,787
Less: Allowance for doubtful accounts		742		742
Total accounts receivable, net	$	53,332	$	60,044

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. Substantially all unbilled receivables are expected to be billed and collected within the next 12 months.

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Property and Equipment

9 Months Ended

Sep. 30, 2016

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
	September 30, 2016		December 31, 2015
Property and equipment
Furniture and equipment	$	20,949	$	26,573
Leasehold improvements		7,411		9,323
Real property		549		549
		28,909		36,444
Less: Accumulated depreciation and amortization		22,571		29,746
Property and equipment, net	$	6,338	$	6,698

Depreciation and amortization expense for the three months ended September 30, 2016 and 2015 was $0.8 million. Depreciation expense for the nine months ended September 30, 2016 and 2015 was $2.5 million and $2.6 million, respectively.

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Intangible Assets

9 Months Ended

Sep. 30, 2016

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
	September 30, 2016			December 31, 2015
Contract and customer relationships	$	39,594		$	39,594
Developed software		1,113			1,113
Less: Accumulated amortization		(24,209	)		(21,476	)
Intangible assets, net	$	16,498		$	19,231

Amortization expense of intangible assets for the three months ended September 30, 2016 and 2015 was $0.9 million and $1.0 million, respectively. Amortization expense of intangible assets for the nine months ended September 30, 2016 and 2015 was $2.7 million and $3.2 million, respectively. Intangible assets are primarily amortized on a straight line basis over periods ranging from three to 11 years. Expected amortization expense for the remainder of the fiscal year ending December 31, 2016, and for each of the fiscal years thereafter, is as follows:

For the year ending December 31,
2016 (remaining three months)	$	911
2017		3,632
2018		3,149
2019		3,049
2020		3,027
Thereafter		2,730
	$	16,498

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Share-Based Payments

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Payments

7. Share-Based Payments

During the three months ended September 30, 2016, the Company did not grant any stock options, and during the nine months ended September 30, 2016, the Company granted 25,000 stock options to purchase shares of Class A common stock with a weighted-average exercise price of $13.29, which represents the fair market value of the Company’s Class A common stock at the date of grant. During the three months ended September 30, 2016, a total of 35,426 stock options were exercised at a weighted-average exercise price of $6.38. During the nine months ended September 30, 2016, a total of 73,758 stock options were exercised at a weighted-average exercise price of $5.66. As of September 30, 2016, there were 1,499,074 stock options outstanding.

During the three months ended September 30, 2016, no restricted stock was granted and 5,000 shares of restricted stock were cancelled. During the nine months ended September 30, 2016, 25,000 shares of restricted stock were granted and 25,000 shares of restricted stock were cancelled. As of September 30, 2016, there were 315,000 shares of restricted stock outstanding.

The following table summarizes stock compensation expense allocated to cost of revenue and general and administrative costs for the three and nine months ended September 30, 2016 and 2015:

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Cost of revenue	$	47	$	76	$	162	$	199
General and administrative		179		264		607		837
	$	226	$	340	$	769	$	1,036

As of September 30, 2016, there was approximately $3.3 million of total unrecognized compensation cost related to unvested stock compensation arrangements. This cost is expected to be fully amortized over the next five years, with approximately $0.2 million, $0.9 million, $0.9 million, $0.7 million and $0.6 million amortized during the remainder of 2016, and the full years of 2017, 2018, 2019, and 2020, respectively. The cost of stock compensation is included in the Company’s Condensed Consolidated Statements of Income and expensed over the service period of the options.

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Debt

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Debt

8. Debt

NCI’s senior credit facility, amended in December 2014, and referred to herein as the “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 the Company to increase its 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 of 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 the one-month London Interbank offered rate or LIBOR, plus an applicable margin, ranging from 210 to 310 basis points, based on the ratio of the Company’s outstanding senior funded debt to Earnings before Interest, Taxes, Depreciation, and Amortization or EBITDA, as defined in the credit facility. The credit facility expires on January 31, 2017. Accordingly all borrowings are classified as current liabilities as they are due and payable within the next 12 months.

The credit facility contains various covenants that limit, among other things, 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 fixed charge coverage ratio, maintain a minimum funded debt to earnings ratio; and limit capital expenditures below certain thresholds. As of September 30, 2016, 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 outstanding shares of Class A common stock. No stock repurchases took place in the three or nine months ended September 30, 2016. At September 30, 2016, $16.7 million was remaining under the board of directors’ authorization for share repurchases.

During the third quarter of 2016, the Company had a weighted average outstanding loan balance of $6.5 million which accrued interest at a weighted average borrowing rate of 2.5%. During the third quarter of 2015, the Company had a weighted average outstanding loan balance of $18.8 million which accrued interest at a weighted average borrowing rate of 2.3%.

As of September 30, 2016, there was no outstanding balance under the credit facility.

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Computech Acquisition

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Computech Acquisition

9. Computech Acquisition

On January 1, 2015, the Company completed its purchase of 100% of the outstanding stock of Computech, Inc. (“Computech”), a leader in agile and lean application software development and IT operations and maintenance, for approximately $56.7 million, net of cash acquired. The acquisition has been accounted for under the acquisition method of accounting, which requires the total purchase consideration to be allocated to the assets acquired and liabilities assumed based on estimates of fair value. The excess of the purchase consideration over the amounts assigned to tangible or intangible assets acquired and liabilities assumed was recognized as goodwill.

Allocation of Purchase Price

The Company has completed the valuation of the assets acquired and liabilities assumed of Computech. The fair values assigned to the intangible assets acquired were based on estimates, assumptions, and other information compiled by management, including independent valuations that utilized established valuation techniques. Based on the Company’s valuation, the total consideration of approximately $56.7 million, net of $3.3 million of cash acquired, has been allocated to assets acquired (including identifiable intangible assets and goodwill) and liabilities assumed, as follows:

Accounts receivable and other assets		8,407
Goodwill		33,878
Definite-life intangible assets		19,720
Accrued salary and benefits		(4,112	)
Other accrued expenses		(1,236	)
	$	56,657

The definite life intangibles recognized in the allocation of the Computech purchase price consists of $18.6 million in contracts and customer relationships and $1.1 million in developed software. The fair value of the definite-lived intangible asset for contracts and customer relationships is based on existing customer contracts and anticipated follow-on contracts with existing customers and will be amortized on a straight-line basis over its expected life of seven years. The fair value of the definite-lived intangible asset for developed software will be amortized on a straight-line basis over its expected useful life of three years.

All goodwill and intangible asset amortization related to the acquisition of Computech is expected to be deductible for income tax purposes.

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Dividends

9 Months Ended

Sep. 30, 2016

Text Block [Abstract]

Dividends

10. Dividends

Our board of directors declared and the Company paid the following dividends during the periods presented:

Declaration Date	Dividend Per Share		Record Date		Total Amount		Payment Date
February 10, 2015	$	0.12		February 25, 2015	$	1,561		March 13, 2015
February 8, 2016	$	0.15		February 26, 2016	$	2,020		March 18, 2016

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Related Party Transactions

9 Months Ended

Sep. 30, 2016

Related Party Transactions [Abstract]

Related Party Transactions

11. Related Party Transactions

The Company purchases services under a subcontract from Renegade Technology Systems, Inc., which is a government contractor wholly-owned by Rajiv Narang, the son of Charles K. Narang, Chairman of the board of directors. For the three months ended September 30, 2016 and 2015, the expense incurred under this agreement was approximately $298,000 and $177,000, respectively. For the nine months ended September 30, 2016 and 2015, the expense incurred under this agreement was approximately $656,000 and $525,000, respectively. As of September 30, 2016 and 2015, outstanding amounts due to Renegade Technology Systems, Inc. under this agreement were $103,150 and $51,137, respectively.

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Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Contingencies

12. Contingencies

Government Audits

Payments to the Company on U.S. Federal Government contracts are subject to adjustment upon audit by various agencies of the U.S. Federal Government. Audits of costs and the related payments have been performed through 2007 for NCI Information Systems, Inc., the Company’s primary corporate vehicle for government contracting. In the opinion of management, the final determination of costs and related payments for unaudited years will not have a material effect on the Company’s financial position, results of operations, or liquidity.

Litigation

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 liquidity.

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Subsequent Events

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

13. Subsequent Events

Change in Management

On October 31, 2016, the Company announced that Brian J. Clark, the Company’s President and Chief Executive Officer (“CEO”), has resigned from his employment with the Company and as a member of the Board of Directors of the Company, effective as of October 31, 2016. In connection with his resignation, the Company and Mr. Clark entered into a Separation and Transition Agreement which provides for the payment of certain severance benefits to Mr. Clark including the following: (a) the Company will pay Mr. Clark a total fee of $250,000 for consulting services to be provided through April 30, 2017; (b) the Company will pay Mr. Clark a lump sum cash payment equal to twenty-four months of his annual base salary in the amount of $1,000,000; (c) the Company will pay Mr. Clark a lump sum cash payment equal to his prorated annual bonus for 2016 at the target level of performance in the amount of $420,000; (d) the Company will continue to provide Mr. Clark with health and welfare coverage and executive long-term disability coverage at no additional cost to him for one year; and (e) the Company will repurchase 390,000 stock options held by Mr. Clark that are vested and exercisable as of October 31, 2016 at a purchase price per option equal to the closing sale price of a share of NCI common stock on The Nasdaq Stock Market on October 28, 2016 less the applicable per share exercise price of the options.

The Board has appointed Paul A. Dillahay as the Company’s President and CEO and a member of the Board effective as of October 31, 2016. Mr. Dillahay will initially receive a one-time signing bonus in the amount of $325,000 and will be eligible for an annual cash bonus for the fourth quarter of 2016 equal to $125,000. He will receive an option award of 250,000 shares and a grant of 100,000 shares of restricted stock. The options vest in five equal annual installments beginning on the first anniversary of the grant date. The restricted stock awards vest in accordance with the following schedule: 33 1/3% vest on January 31, 2017; 33 1/3% vest one year from the grant date and 33 1/3% vest two years from the grant date.

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

On November 20, 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes. To simplify the presentation of deferred income taxes, the amendments in this ASU require that deferred tax assets and liabilities be classified as non-current in a classified balance sheet. As permitted, the Company elected to early adopt this ASU using the retrospective approach, effective with its Form 10-Q filing for March 31, 2016. As a result of adopting this ASU, current net deferred taxes of $4.0 million were reclassified to net non-current deferred taxes as of December 31, 2015. The adoption of ASU 2015-17 had no impact on the Company’s consolidated statements of income or cash flows for the year ended December 31, 2015 or the condensed consolidated statements of income or cash flows for the three and nine month periods ended September 30, 2016.

In February 2016, the FASB issued ASU 2016-02, which requires the recognition of right-to-use assets and lease liabilities arising from capital leases and operating leases in the statement of comprehensive income and the statement of financial position, respectively. The Company will adopt the standard effective January 1, 2019. The Company has not yet completed its evaluation of the impact that the standard may have on its consolidated balance sheet. The actual impact will depend on the Company’s lease portfolio at the time of adoption.

In March 2016, the FASB issued ASU 2016-08, which clarifies the implementation guidance with respect to principal versus agent considerations under the new revenue recognition standard, ASU 2014-09, Revenue from Contracts with Customers. In April 2016, the FASB issued ASU 2016-10, which clarifies the implementation guidance with respect to identifying promised goods or services from a principal and agent perspective under ASU 2014-09. The Company will adopt the standard effective January 1, 2018 and is continuing to evaluate the full effect that ASU 2014-09 and related subsequent updates will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, which simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees’ maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. The Company is evaluating the full effect that ASU 2016-09 will have on its consolidated financial statements and will adopt the standard effective January 1, 2017, but at this time believe it will not have a material effect on its consolidated financial statements when it is adopted by the Company in 2017.

In August 2016, the FASB issued ASU 2016-15, which provides updated guidance on eight specific cash flow issues and how they should be presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. The eight specific cash flow issues addressed are being evaluated by the Company as to the likelihood of those cash flow transactions occurring and potential corresponding effect on the Company’s statement of cash flows. The Company will adopt the standard effective January 1, 2018.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Common Share

The following table details the computation of basic and diluted earnings per common share (Class A and Class B) for the three and nine months ended September 30, 2016 and 2015.

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Net income	$	3,261	$	3,171	$	9,824	$	8,622
Weighted average number of basic shares outstanding during the period		13,201		13,029		13,180		13,004
Dilutive effect of stock options and restricted stock after application of treasury stock method		656		668		683		655
Weighted average number of diluted shares outstanding during the period		13,857		13,697		13,863		13,659
Basic earnings per share	$	0.25	$	0.24	$	0.75	$	0.66
Diluted earnings per share	$	0.24	$	0.23	$	0.71	$	0.63

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Accounts Receivable (Tables)

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Summary of Accounts Receivable

The following table details accounts receivable at the end of each period:

	As of
	September 30, 2016		December 31, 2015
Billed receivables	$	22,762	$	23,621
Unbilled receivables:
Amounts billable at end of period		26,295		27,185
Other		5,017		9,980
Total unbilled receivables		31,312		37,165
Total accounts receivable		54,074		60,787
Less: Allowance for doubtful accounts		742		742
Total accounts receivable, net	$	53,332	$	60,044

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2016

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
	September 30, 2016		December 31, 2015
Property and equipment
Furniture and equipment	$	20,949	$	26,573
Leasehold improvements		7,411		9,323
Real property		549		549
		28,909		36,444
Less: Accumulated depreciation and amortization		22,571		29,746
Property and equipment, net	$	6,338	$	6,698

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Details of Intangible Assets

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

	As of
	September 30, 2016			December 31, 2015
Contract and customer relationships	$	39,594		$	39,594
Developed software		1,113			1,113
Less: Accumulated amortization		(24,209	)		(21,476	)
Intangible assets, net	$	16,498		$	19,231

Expected Amortization Expense

Expected amortization expense for the remainder of the fiscal year ending December 31, 2016, and for each of the fiscal years thereafter, is as follows:

For the year ending December 31,
2016 (remaining three months)	$	911
2017		3,632
2018		3,149
2019		3,049
2020		3,027
Thereafter		2,730
	$	16,498

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Share-Based Payments (Tables)

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Stock Compensation Expense Allocated to Cost of Revenue and General and Administrative Costs

The following table summarizes stock compensation expense allocated to cost of revenue and general and administrative costs for the three and nine months ended September 30, 2016 and 2015:

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Cost of revenue	$	47	$	76	$	162	$	199
General and administrative		179		264		607		837
	$	226	$	340	$	769	$	1,036

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Computech Acquisition (Tables)

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Schedule of Assets Acquired and Liabilities Assumed

Based on the Company’s valuation, the total consideration of approximately $56.7 million, net of $3.3 million of cash acquired, has been allocated to assets acquired (including identifiable intangible assets and goodwill) and liabilities assumed, as follows:

Accounts receivable and other assets		8,407
Goodwill		33,878
Definite-life intangible assets		19,720
Accrued salary and benefits		(4,112	)
Other accrued expenses		(1,236	)
	$	56,657

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Dividends (Tables)

9 Months Ended

Sep. 30, 2016

Text Block [Abstract]

Schedule of Dividends Declared and Paid

Our board of directors declared and the Company paid the following dividends during the periods presented:

Declaration Date	Dividend Per Share		Record Date		Total Amount		Payment Date
February 10, 2015	$	0.12		February 25, 2015	$	1,561		March 13, 2015
February 8, 2016	$	0.15		February 26, 2016	$	2,020		March 18, 2016

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Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Non-current deferred taxes, net	$ 38,066	$ 38,789
Adjustments for New Accounting Pronouncement [Member] | Restatement Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Current deferred taxes, net		(4,000)
Non-current deferred taxes, net		$ 4,000

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Business Overview - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2016 Employee Location	Sep. 30, 2015	Sep. 30, 2016 Employee Location Segment Item	Sep. 30, 2015
Schedule Of Description Of Business [Line Items]
Number of employees, approximate | Employee	2,000		2,000
Number of reportable segment | Segment			1
Cyber Network Operations and Security Support [Member]
Schedule Of Description Of Business [Line Items]
Business contract description			This cost-plus-fixed-fee, single-award indefinite delivery indefinite quantity contract consists of a 12-month base period with two one-year option periods and one six-month option period, and commenced in October 2014.
Program Executive Office Soldier [Member]
Schedule Of Description Of Business [Line Items]
Option contract term			5 years
Number of option period contracts | Item			4
Sales [Member] | Government Contracts Concentration Risk [Member] | Cyber Network Operations and Security Support [Member]
Schedule Of Description Of Business [Line Items]
Concentration risk, percentage	12.00%	7.00%	11.00%	6.00%
Sales [Member] | Government Contracts Concentration Risk [Member] | Program Executive Office Soldier [Member]
Schedule Of Description Of Business [Line Items]
Concentration risk, percentage	16.00%	9.00%	16.00%	10.00%
Minimum [Member]
Schedule Of Description Of Business [Line Items]
Number of locations | Location	100		100

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Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of diluted earnings per share	25,000	30,000	11,000	63,000

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Net income	$ 3,261	$ 3,171	$ 9,824	$ 8,622
Weighted average number of basic shares outstanding during the period	13,201	13,029	13,180	13,004
Dilutive effect of stock options and restricted stock after application of treasury stock method	656	668	683	655
Weighted average number of diluted shares outstanding during the period	13,857	13,697	13,863	13,659
Basic earnings per share	$ 0.25	$ 0.24	$ 0.75	$ 0.66
Diluted earnings per share	$ 0.24	$ 0.23	$ 0.71	$ 0.63

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Accounts Receivable - Summary of Accounts Receivable (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Receivables [Abstract]
Billed receivables	$ 22,762	$ 23,621
Unbilled receivables:
Amounts billable at end of period	26,295	27,185
Other	5,017	9,980
Total unbilled receivables	31,312	37,165
Total accounts receivable	54,074	60,787
Less: Allowance for doubtful accounts	742	742
Total accounts receivable, net	$ 53,332	$ 60,044

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Accounts Receivable - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2016
Receivables [Abstract]
Maximum period in which unbilled receivables are expected to be billed	12 months

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Property and Equipment - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 28,909	$ 36,444
Less: Accumulated depreciation and amortization	22,571	29,746
Property and equipment, net	6,338	6,698
Furniture and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	20,949	26,573
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	7,411	9,323
Real Property [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 549	$ 549

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Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 0.8	$ 0.8	$ 2.5	$ 2.6

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Intangible Assets - Details of Intangible Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Less: Accumulated amortization	$ (24,209)	$ (21,476)
Intangible assets, net	16,498	19,231
Contract and Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	39,594	39,594
Developed Software [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 1,113	$ 1,113

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Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets	$ 0.9	$ 1.0	$ 2.7	$ 3.2
Intangible assets method of amortization, description			Intangible assets are primarily amortized on a straight line basis over periods ranging from three to 11 years.
Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets amortized periods			3 years
Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets amortized periods			11 years

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Intangible Assets - Expected Amortization Expense (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
2016 (remaining three months)	$ 911
2017	3,632
2018	3,149
2019	3,049
2020	3,027
Thereafter	2,730
Intangible assets, net	$ 16,498	$ 19,231

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Share-Based Payments - Additional Information (Detail) $ / shares in Units, $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2016 USD ($) $ / shares shares	Sep. 30, 2016 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted | shares	0	25,000
Weighted average exercise price of stock option | $ / shares		$ 13.29
Stock options exercised | shares	35,426	73,758
Weighted average exercise price of stock options exercised | $ / shares	$ 6.38	$ 5.66
Stock options outstanding | shares	1,499,074	1,499,074
Total unrecognized compensation cost related to unvested stock compensation | $	$ 3.3	$ 3.3
Amortization of cost of unvested stock compensation arrangements, 2016 | $		0.2
Amortization of cost of unvested stock compensation arrangements, 2017 | $		0.9
Amortization of cost of unvested stock compensation arrangements, 2018 | $		0.9
Amortization of cost of unvested stock compensation arrangements, 2019 | $		0.7
Amortization of cost of unvested stock compensation arrangements, 2020 | $		$ 0.6
Amortized unrecognized compensation cost period		5 years
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted | shares	0	25,000
Restricted stock outstanding | shares	315,000	315,000
Restricted stock cancelled | shares	5,000	25,000

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Share-Based Payments - Summary of Stock Compensation (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock compensation	$ 226	$ 340	$ 769	$ 1,036
Cost of Revenue [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock compensation	47	76	162	199
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock compensation	$ 179	$ 264	$ 607	$ 837

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Debt - Additional Information (Detail) - Senior Credit Facility [Member] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016
Line of Credit Facility [Line Items]
Additional borrowing capacity, accordion feature	$ 45,000,000		$ 45,000,000
Maximum borrowing capacity including accordion feature	125,000,000		125,000,000
Capacity available to repurchase outstanding shares	17,500,000		17,500,000
Repurchase of common stock	0		0
Remaining authorized repurchase amount	16,700,000		$ 16,700,000
Weighted average outstanding loan balance	$ 6,500,000	$ 18,800,000
Weighted average borrowing rate	2.50%	2.30%	2.50%
Revolving Line of Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 80,000,000		$ 80,000,000
Description of variable rate basis			One-month London Interbank offered rate or LIBOR, plus an applicable margin, ranging from 210 to 310 basis points
Credit facility, expiration date			Jan. 31, 2017
LIBOR [Member]
Line of Credit Facility [Line Items]
Credit facility, outstanding balance	$ 0		$ 0
Minimum [Member] | LIBOR [Member] | Revolving Line of Credit Facility [Member]
Line of Credit Facility [Line Items]
Basis points			2.10%
Maximum [Member] | LIBOR [Member] | Revolving Line of Credit Facility [Member]
Line of Credit Facility [Line Items]
Basis points			3.10%

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Computech Acquisition - Additional Information (Detail) - USD ($) $ in Thousands		9 Months Ended
	Jan. 01, 2015	Sep. 30, 2015
Business Acquisition [Line Items]
Business acquisition net of cash acquired		$ 56,657
Computech, Inc. [Member]
Business Acquisition [Line Items]
Business acquisition stock purchase percentage	100.00%
Business acquisition net of cash acquired	$ 56,700
Business combination estimated consideration	56,700
Business combination cash acquired	3,300
Definite-life intangible assets	19,720
Computech, Inc. [Member] | Customer Relationships [Member]
Business Acquisition [Line Items]
Definite-life intangible assets	$ 18,600
Definite-lived intangible asset useful life	7 years
Computech, Inc. [Member] | Developed Software [Member]
Business Acquisition [Line Items]
Definite-life intangible assets	$ 1,100
Definite-lived intangible asset useful life	3 years

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Computech Acquisition - Schedule of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Jan. 01, 2015
Business Acquisition [Line Items]
Goodwill	$ 33,878	$ 33,878
Computech, Inc. [Member]
Business Acquisition [Line Items]
Accounts receivable and other assets			$ 8,407
Goodwill			33,878
Definite-life intangible assets			19,720
Accrued salary and benefits			(4,112)
Other accrued expenses			(1,236)
Adjusted purchase price			$ 56,657

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Dividends - Schedule of Dividends Declared and Paid (Detail) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Dividend Declared And Paid [Line Items].
Total Amount	$ 2,020	$ 1,561
February 10, 2015 [Member]
Dividend Declared And Paid [Line Items].
Declaration Date	Feb. 10, 2015
Dividend Per Share	$ 0.12
Record Date	Feb. 25, 2015
Total Amount	$ 1,561
Payment Date	Mar. 13, 2015
February 8, 2016 [Member]
Dividend Declared And Paid [Line Items].
Declaration Date	Feb. 08, 2016
Dividend Per Share	$ 0.15
Record Date	Feb. 26, 2016
Total Amount	$ 2,020
Payment Date	Mar. 18, 2016

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Related Party Transactions - Additional Information (Detail) - Renegade Technology Systems, Inc. [Member] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Related Party Transaction [Line Items]
Expense incurred under agreement with Renegade Technology Systems, Inc.	$ 298,000	$ 177,000	$ 656,000	$ 525,000
Amount due to related party	$ 103,150	$ 51,137	$ 103,150	$ 51,137

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Subsequent Events - Additional Information (Detail) - USD ($)		3 Months Ended	9 Months Ended
	Oct. 31, 2016	Sep. 30, 2016	Sep. 30, 2016
Restricted Stock [Member]
Subsequent Event [Line Items]
Number of restricted stock granted		0	25,000
Brian J. Clark [Member] | Consulting Services [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Severance benefits to be paid	$ 250,000
Brian J. Clark [Member] | Lump Sum Cash Payment on Annual Base Salary [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Severance benefits to be paid	1,000,000
Brian J. Clark [Member] | Lump Sum Cash Payment on Annual Bonus for 2016 [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Severance benefits to be paid	$ 420,000
Brian J. Clark [Member] | Stock Options [Member] | Employee Severance [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Stock options to be repurchased	390,000
Mr.Paul A. Dillahay [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Amount of one-time signing bonus	$ 325,000
Annual cash bonus	$ 125,000
Mr.Paul A. Dillahay [Member] | Stock Options [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Number of stock options granted	250,000
Vesting period	5 years
Mr.Paul A. Dillahay [Member] | Restricted Stock [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Number of restricted stock granted	100,000
Mr.Paul A. Dillahay [Member] | Restricted Stock [Member] | Subsequent Event [Member] | Share-based Compensation Award, Tranche One [Member]
Subsequent Event [Line Items]
Vesting percentage	33.33%
Mr.Paul A. Dillahay [Member] | Restricted Stock [Member] | Subsequent Event [Member] | Share-based Compensation Award, Tranche Two [Member]
Subsequent Event [Line Items]
Vesting percentage	33.33%
Mr.Paul A. Dillahay [Member] | Restricted Stock [Member] | Subsequent Event [Member] | Share-based Compensation Award, Tranche Three [Member]
Subsequent Event [Line Items]
Vesting percentage	33.33%