QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Page |
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PART 1 |
3 | |||||||
Item 1. |
3 | |||||||
(a) |
3 | |||||||
(b) |
4 | |||||||
(c) |
5 | |||||||
(d) |
6 | |||||||
(e) |
7 | |||||||
(f) |
8 | |||||||
Item 2. |
19 | |||||||
Item 3. |
26 | |||||||
Item 4. |
26 | |||||||
PART II |
27 | |||||||
Item 1. |
27 | |||||||
Item 1A. |
27 | |||||||
Item 2. |
27 | |||||||
Item 6. |
28 | |||||||
29 |
ITEM 1. |
FINANCIAL STATEMENTS |
Three Months Ended June 30, |
Six Months Ended June 30, |
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2022 |
2021 |
2022 |
2021 |
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Revenues |
$ | $ | $ | $ | ||||||||||||
Cost of revenues |
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Gross profit |
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Selling, general and administrative expenses: |
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Operating expenses |
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Revaluation of contingent consideration liability |
( |
) | ( |
) | ||||||||||||
Total selling, general and administrative expenses |
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Income from operations |
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Interest income (expense), net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income (expense), net |
( |
) | ||||||||||||||
Income before income taxes |
||||||||||||||||
Income tax expense |
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Net income |
$ | $ | $ | $ | ||||||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | $ | $ | $ | ||||||||||||
Diluted |
$ | $ | $ | $ | ||||||||||||
Weighted average common shares outstanding: |
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Basic |
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Diluted |
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Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Net income |
$ | $ | $ | $ | ||||||||||||
Other comprehensive income (loss): |
||||||||||||||||
Net unrealized gain on interest-rate swap contracts |
||||||||||||||||
Foreign currency translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total pretax net unrealized (loss) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Income tax expense |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other comprehensive (loss), net of taxes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive income |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
June 30, 2022 |
December 31, 2021 |
|||||||
ASSETS |
||||||||
Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, net of allowance for uncollectible accounts of $ |
||||||||
Unbilled receivables |
||||||||
Prepaid and other current assets |
||||||||
Total current assets |
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Equipment, enterprise software, and leasehold improvements, at cost: |
||||||||
Equipment |
||||||||
Enterprise software |
||||||||
Leasehold improvements |
||||||||
Less – accumulated depreciation and amortization |
( |
) | ( |
) | ||||
Net equipment, enterprise software, and leasehold improvements |
||||||||
Operating lease right-of-use |
||||||||
Non-current deposits |
||||||||
Goodwill, net of impairment |
||||||||
Intangible assets, net of amortization |
||||||||
Total assets |
$ | $ | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Current portion of long-term debt |
$ | $ | ||||||
Accounts payable |
||||||||
Accrued payroll and related costs |
||||||||
Current portion of operating lease liability |
||||||||
Other accrued liabilities |
||||||||
Deferred revenue |
||||||||
Total current liabilities |
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Long-term liabilities: |
||||||||
Long-term debt, less current portion, net |
||||||||
Long-term operating lease liability, less current portion |
||||||||
Long-term accrued income taxes |
||||||||
Deferred income taxes |
||||||||
Total liabilities |
||||||||
Commitments and contingent liabilities (Note 6) |
||||||||
Shareholders’ equity: |
||||||||
Preferred Stock, |
||||||||
Common Stock, par value $ |
||||||||
Additional paid-in-capital |
||||||||
Retained earnings |
||||||||
Accumulated other comprehensive income (loss) |
( |
) | ( |
) | ||||
Treasury stock, at cost; |
( |
) | ( |
) | ||||
Total shareholders’ equity |
||||||||
Total liabilities and shareholders’ equity |
$ | $ | ||||||
Common Stock |
Additional Paid-in Capital |
Accumulated Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Income (Loss) |
Total Shareholders’ Equity |
|||||||||||||||||||
Balances, December 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Other comprehensive (loss), net of taxes |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Stock options exercised |
— | — | — | |||||||||||||||||||||
Balances, March 31, 2022 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Employee common stock purchases |
— | — | — | — | ||||||||||||||||||||
Other comprehensive (loss), net of taxes |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Stock options exercised |
— | — | — | — | ||||||||||||||||||||
Balances, June 30, 2022 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||
Common Stock |
Additional Paid-in Capital |
Accumulated Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Income (Loss) |
Total Shareholders’ Equity |
|||||||||||||||||||
Balances, December 31, 2020 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Other comprehensive gain, net of taxes |
— | — | — | — | ||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Stock options exercised |
— | — | — | — | ||||||||||||||||||||
Balances, March 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Employee common stock purchases |
— | — | — | — | ||||||||||||||||||||
Other comprehensive (loss), net of taxes |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Stock options exercised |
— | — | — | |||||||||||||||||||||
Balances, June 30, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||
Six Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
OPERATING ACTIVITIES: |
||||||||
Net income |
$ | $ | ||||||
Adjustments to reconcile net income to cash provided by (used in) operating activities: |
||||||||
Depreciation and amortization |
||||||||
Interest amortization of deferred financing costs |
||||||||
Stock-based compensation expense |
||||||||
Deferred income taxes, net |
||||||||
Revaluation of contingent consideration liability |
( |
) | ||||||
Operating lease assets and liabilities, net |
( |
) | ||||||
Working capital items: |
||||||||
Accounts receivable and unbilled receivables |
( |
) | ( |
) | ||||
Prepaid and other current assets |
( |
) | ||||||
Accounts payable |
||||||||
Accrued payroll and related costs |
( |
) | ||||||
Other accrued liabilities |
( |
) | ( |
) | ||||
Deferred revenue |
( |
) | ( |
) | ||||
Net cash flows provided by operating activities |
||||||||
INVESTING ACTIVITIES: |
||||||||
Recovery of (payment for) non-current deposits |
( |
) | ||||||
Capital expenditures |
( |
) | ( |
) | ||||
Net cash flows (used in) investing activities |
( |
) | ( |
) | ||||
FINANCING ACTIVITIES: |
||||||||
(Repayments) on term loan facility |
( |
) | ( |
) | ||||
Proceeds from the issuance of common shares |
||||||||
Proceeds from the exercise of stock options |
||||||||
Net cash flows (used in) financing activities |
( |
) | ( |
) | ||||
Effect of exchange rate changes on cash and cash equivalents |
( |
) | ( |
) | ||||
Net change in cash and cash equivalents |
( |
) | ||||||
Cash and cash equivalents, beginning of period |
||||||||
Cash and cash equivalents, end of period |
$ | $ | ||||||
1. |
Description of Business and Basis of Presentation: |
2. |
Revenue from Contracts with Customers |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(Amounts in thousands) |
(Amounts in thousands) |
|||||||||||||||
Data and Analytics Services Segment |
||||||||||||||||
Time-and-material |
$ | $ | $ | $ | ||||||||||||
Fixed-price Contracts |
||||||||||||||||
Subtotal Data and Analytics Services |
$ |
$ |
$ |
$ |
||||||||||||
IT Staffing Services Segment |
||||||||||||||||
Time-and-material |
$ | $ | $ | $ | ||||||||||||
Fixed-price Contracts |
||||||||||||||||
Subtotal IT Staffing Services |
$ |
$ |
$ |
$ |
||||||||||||
Total Revenues |
$ |
$ |
$ |
$ |
||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(Amounts in thousands) |
(Amounts in thousands) |
|||||||||||||||
United States |
$ | $ | $ | $ | ||||||||||||
Canada |
||||||||||||||||
India and Other |
||||||||||||||||
Total revenues |
$ | $ | $ | $ | ||||||||||||
3. |
Goodwill and Other Intangible Assets, net |
As of June 30, 2022 |
||||||||||||||||
(Amounts in thousands) |
Amortization Period (In Years) |
Gross Carrying Value |
Accumulative Amortization |
Net Carrying Value |
||||||||||||
IT Staffing Services: |
||||||||||||||||
Client relationships |
$ | $ | $ | |||||||||||||
Covenant-not-to-compete |
||||||||||||||||
Trade name |
||||||||||||||||
Data and Analytics Services: |
||||||||||||||||
Client relationships |
||||||||||||||||
Covenant-not-to-compete |
||||||||||||||||
Trade name |
||||||||||||||||
Technology |
||||||||||||||||
Total Intangible Assets |
$ |
$ |
$ |
|||||||||||||
As of December 31, 2021 |
||||||||||||||||
(Amounts in thousands) |
Amortization Period (In Years) |
Gross Carrying Value |
Accumulative Amortization |
Net Carrying Value |
||||||||||||
IT Staffing Services: |
||||||||||||||||
Client relationships |
$ | $ | $ | |||||||||||||
Covenant-not-to-compete |
||||||||||||||||
Trade name |
||||||||||||||||
Data and Analytics Services: |
||||||||||||||||
Client relationships |
||||||||||||||||
Covenant-not-to-compete |
||||||||||||||||
Trade name |
||||||||||||||||
Technology |
||||||||||||||||
Total Intangible Assets |
$ |
$ |
$ |
|||||||||||||
Years Ended December 31, |
||||||||||||||||||||
2022 |
2023 |
2024 |
2025 |
2026 |
||||||||||||||||
(Amounts in thousands) |
||||||||||||||||||||
Amortization expense |
$ | |
$ | |
$ | |
$ | |
$ | |
4. |
Leases |
June 30, 2022 |
December 31, 2021 |
|||||||
(in thousands) |
||||||||
Assets: |
||||||||
Long-term operating lease right-of-use |
$ | |
$ | |
||||
Liabilities: |
||||||||
Short-term operating lease liability |
$ | $ | ||||||
Long-term operating lease liability |
||||||||
Total liabilities |
$ | $ | ||||||
Amount as of June 30, 2022 |
||||
(in thousands) |
||||
2022 (For remainder of year) |
$ | |
||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
Total |
||||
Less: Imputed interest |
( |
) | ||
Present value of operating lease liabilities |
$ | |
||
5. |
Payroll Tax Liability |
6. |
Commitments and Contingencies |
7. |
Employee Benefit Plan |
8. |
Stock-Based Compensation |
9. |
Credit Facility |
10. |
Income Taxes |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(Amounts in thousands) |
(Amounts in thousands) |
|||||||||||||||
Income before income taxes: |
||||||||||||||||
Domestic |
$ | $ | $ | $ | ||||||||||||
Foreign |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Income before income taxes |
$ | $ | $ | $ | ||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(Amounts in thousands) |
(Amounts in thousands) |
|||||||||||||||
Current provision (benefit): |
||||||||||||||||
Federal |
$ | $ | $ | $ | ||||||||||||
State |
||||||||||||||||
Foreign |
( |
) | ( |
) | ( |
) | ||||||||||
Total current provision (benefit) |
||||||||||||||||
Deferred provision (benefit): |
||||||||||||||||
Federal |
( |
) | ||||||||||||||
State |
( |
) | ||||||||||||||
Foreign |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Total deferred provision (benefit) |
( |
) | ||||||||||||||
Change in valuation allowance |
||||||||||||||||
Total provision for income taxes |
$ | $ | $ | $ | ||||||||||||
Three Months Ended June 30, 2022 |
Three Months Ended June 30, 2021 |
|||||||||||||||
Income taxes computed at the federal statutory rate |
$ | % | $ | % | ||||||||||||
State income taxes, net of federal tax benefit |
||||||||||||||||
Excess tax benefit from stock options/restricted shares |
||||||||||||||||
Difference in income tax rate on foreign earnings/other |
||||||||||||||||
Change in valuation allowance |
||||||||||||||||
$ | % | $ | % | |||||||||||||
Six Months Ended June 30, 2022 |
Six Months Ended June 30, 2021 |
|||||||||||||||
Income taxes computed at the federal statutory rate |
$ | % | $ | % | ||||||||||||
State income taxes, net of federal tax benefit |
||||||||||||||||
Excess tax benefit from stock options/restricted shares |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Difference in income tax rate on foreign earnings/other |
||||||||||||||||
Change in valuation allowance |
||||||||||||||||
$ | % | $ | % | |||||||||||||
11. |
Derivative Instruments and Hedging Activities |
Derivatives in ASC Topic 815 Cash Flow Hedging Relationships |
Amount of Gain recognized in OCI on Derivatives |
Location of Gain reclassified from Accumulated OCI to Income |
Amount of Gain reclassified from Accumulated OCI to Income |
Location of Gain reclassified in Income on Derivatives |
Amount of Gain recognized in Income on Derivatives | |||||
(Effective Portion) | (Effective Portion) | (Effective Portion) | (Ineffective Portion/Amounts excluded from effectiveness testing) | |||||||
For the Three Months Ended June 30, 2021: |
||||||||||
Interest-Rate Swap Contract |
$ |
Interest Expense | $ |
Interest Expense | $ | |||||
For the Six Months Ended June 30, 2021: |
||||||||||
Interest-Rate Swap Contract |
$ |
Interest Expense | $ |
Interest Expense | $ |
12. |
Fair Value Measurements |
• | Level 1—Inputs are observable quoted prices (unadjusted) in active markets for identical assets and liabilities. |
• | Level 2—Inputs are observable, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are directly or indirectly observable in the marketplace. |
• | Level 3—Inputs are unobservable that are supported by little or no market activity. |
13. |
Shareholders’ Equity |
14. |
Earnings Per Share |
15. |
Business Segments and Geographic Information |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(Amounts in thousands) |
(Amounts in thousands) |
|||||||||||||||
Revenues: |
||||||||||||||||
Data and Analytics Services |
$ | $ | $ | $ | ||||||||||||
IT Staffing Services |
||||||||||||||||
Total revenues |
$ | $ | $ | $ | ||||||||||||
Gross Margin %: |
||||||||||||||||
Data and Analytics Services |
% | % | % | % | ||||||||||||
IT Staffing Services |
% | % | % | % | ||||||||||||
Total gross margin % |
% | % | % | % | ||||||||||||
Segment operating income: |
||||||||||||||||
Data and Analytics Services |
$ | $ | $ | $ | ||||||||||||
IT Staffing Services |
||||||||||||||||
Subtotal |
||||||||||||||||
Amortization of acquired intangible assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Revaluation of contingent consideration liability |
— | — | ||||||||||||||
Interest expenses and other, net |
( |
) | ( |
) | ||||||||||||
Income before income taxes |
$ | $ | $ | $ | ||||||||||||
June 30, 2022 |
December 31, 2021 |
|||||||
(Amounts in thousands) |
||||||||
Total assets: |
||||||||
Data and Analytics Services |
$ | $ | ||||||
IT Staffing Services |
||||||||
Total assets |
$ | $ | |
|||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(Amounts in thousands) |
(Amounts in thousands) |
|||||||||||||||
United States |
$ | $ | $ | $ | ||||||||||||
Canada |
||||||||||||||||
India and Other |
||||||||||||||||
Total revenues |
$ | $ | $ | $ | ||||||||||||
16. |
Recently Issued Accounting Standards |
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Revenues (Amounts in millions) |
Three Months Ended June 30, 2022 |
Three Months Ended June 30, 2021 |
||||||
Data and Analytics Services |
$ | 11.2 | $ | 9.0 | ||||
IT Staffing Services |
50.9 | 44.7 | ||||||
|
|
|
|
|||||
Total revenues |
$ | 62.1 | $ | 53.7 | ||||
|
|
|
|
Gross Margin |
Three Months Ended June 30, 2022 |
Three Months Ended June 30, 2021 |
||||||
Data and Analytics Services |
43.6 | % | 46.7 | % | ||||
IT Staffing Services |
23.3 | 22.7 | ||||||
|
|
|
|
|||||
Total gross margin |
27.0 | % | 26.7 | % | ||||
|
|
|
|
S,G&A Expenses (Amounts in millions) |
Three Months Ended June 30, 2022 |
Three Months Ended June 30, 2021 |
||||||
Data and Analytics Services Segment |
||||||||
Sales and Marketing |
$ | 1.8 | $ | 1.4 | ||||
Operations |
0.7 | 0.8 | ||||||
Amortization of Acquired Intangible Assets |
0.6 | 0.6 | ||||||
Revaluation of Contingent Consideration |
— | (2.0 | ) | |||||
General & Administrative |
1.6 | 1.3 | ||||||
|
|
|
|
|||||
Subtotal Data and Analytics Services |
$ | 4.7 | $ | 2.1 | ||||
|
|
|
|
S,G&A Expenses (Amounts in millions) |
Three Months Ended June 30, 2022 |
Three Months Ended June 30, 2021 |
||||||
IT Staffing Services Segment |
||||||||
Sales and Marketing |
$ | 2.4 | $ | 1.9 | ||||
Operations |
2.9 | 2.2 | ||||||
Amortization of Acquired Intangible Assets |
0.2 | 0.2 | ||||||
General & Administrative |
3.0 | 2.6 | ||||||
|
|
|
|
|||||
Subtotal IT Staffing Services |
$ | 8.5 | $ | 6.9 | ||||
|
|
|
|
|||||
Total S,G&A Expenses |
$ | 13.2 | $ | 9.0 | ||||
|
|
|
|
• | Sales expense increased by $0.9 million in the 2022 period compared to the corresponding 2021 period. Approximately $0.4 million related to our Data and Analytics Services segment, which reflected additional staff and higher variable compensation. Sales expense in our IT Staffing segment increased by $0.5 million largely due to staff increases and higher variable compensation. |
• | Operations expense increased $0.6 million in the 2022 period compared to the corresponding 2021 period. In our Data and Analytics Services segment operating expense declined by $0.1 million due to lower staff. In our IT Staffing Services segment operating expense increased by $0.7 million related to staff increases and higher variable expenses to support revenue growth. |
• | Amortization of acquired intangible assets was $0.8 million in both the 2022 and 2021 periods. |
• | Revaluation of contingent consideration totaled a credit of $2.0 million in the 2021 period and related to the AmberLeaf acquisition. No contingent consideration existed on the Company’s balance sheet in 2022. |
• | General and administrative expense increased by $0.7 million in the 2022 period compared to the corresponding 2021 period. General and administrative expense in our Data and Analytics Services segment increased by $0.3 million due to executive leadership staff increases. In our IT Staffing Services segment, general and administrative expense increased by $0.4 million due to higher compensation expense and increases in travel and facility expenses. |
Revenues (Amounts in millions) |
Six Months Ended June 30, 2022 |
Six Months Ended June 30, 2021 |
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Data and Analytics Services |
$ | 21.4 | $ | 17.7 | ||||
IT Staffing Services |
100.5 | 85.7 | ||||||
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Total revenues |
$ | 121.9 | $ | 103.4 | ||||
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Gross Margin |
Six Months Ended June 30, 2022 |
Six Months Ended June 30, 2021 |
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Data and Analytics Services |
44.3 | % | 46.2 | % | ||||
IT Staffing Services |
23.1 | 22.1 | ||||||
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Total gross margin |
26.8 | % | 26.2 | % | ||||
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S,G&A Expenses (Amounts in millions) |
Six Months Ended June 30, 2022 |
Six Months Ended June 30, 2021 |
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Data and Analytics Services Segment |
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Sales and Marketing |
$ | 3.7 | $ | 3.2 | ||||
Operations |
1.3 | 1.6 | ||||||
Amortization of Acquired Intangible Assets |
1.2 | 1.2 | ||||||
Revaluation of Contingent Consideration |
— | (2.0 | ) | |||||
General & Administrative |
2.7 | 2.3 | ||||||
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Subtotal Data and Analytics Services |
$ | 8.9 | $ | 6.3 | ||||
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S,G&A Expenses (Amounts in millions) |
Six Months Ended June 30, 2022 |
Six Months Ended June 30, 2021 |
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IT Staffing Services Segment |
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Sales and Marketing |
$ | 4.9 | $ | 3.7 | ||||
Operations |
5.7 | 4.2 | ||||||
Amortization of Acquired Intangible Assets |
0.4 | 0.4 | ||||||
General & Administrative |
5.9 | 5.3 | ||||||
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Subtotal IT Staffing Services |
$ | 16.9 | $ | 13.6 | ||||
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Total S,G&A Expenses |
$ | 25.8 | $ | 19.9 | ||||
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• | Sales expense increased by $1.7 million in the 2022 period compared to the corresponding 2021 period. An increase of $0.5 million related to our Data and Analytics Services segment which reflected additional staff and higher variable compensation. Sales expense in our IT Staffing Services segment increased by $1.2 million due to staff increases, higher variable compensation and higher travel expenses. |
• | Operations expense increased by $1.2 million in the 2022 period compared to the corresponding 2021 period. In our Data and Analytics Services segment operations expense decreased $0.3 million due to lower staff. Operations expense in our IT Staffing Services segment increased by $1.5 million largely related to staff increases and higher variable expense to support revenue growth. |
• | Amortization of acquired intangible assets was $1.6 million in both the 2022 and 2021 periods. |
• | Revaluation of contingent consideration totaled a credit of $2.0 million in the 2021 period and related to the AmberLeaf acquisition. No contingent consideration existed on the Company’s balance sheet in 2022. |
• | General and administrative expense increased by $1.0 million in the 2022 period compared to the corresponding 2021 period. General and administrative expense in our Data and Analytics Services segment increased by $0.4 million due to executive leadership staff increases and executive search fees. The increase in our IT Staffing Services segment of $0.6 million was due to higher compensation and increases in travel and facility expenses. |
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. |
CONTROLS AND PROCEDURES |
ITEM 1. |
LEGAL PROCEEDINGS |
ITEM 1A. |
RISK FACTORS |
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 6. |
EXHIBITS |
MASTECH DIGITAL, INC. | ||||
August 15, 2022 |
/s/ VIVEK GUPTA | |||
Vivek Gupta Chief Executive Officer | ||||
/s/ JOHN J. CRONIN, JR. | ||||
John J. Cronin, Jr. | ||||
Chief Financial Officer | ||||
(Principal Financial Officer) |