Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
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Statement Of Financial Position [Abstract] | ||
Accounts Receivable, Allowance for Credit Loss | $ 4.8 | $ 4.8 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 39,779,000 | 39,614,000 |
Treasury stock, shares | 142,000 | 135,000 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
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Mar. 31, 2021 |
Mar. 31, 2020 |
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Income Statement [Abstract] | ||
Revenues | $ 457,886 | $ 411,166 |
Operating expenses: | ||
Direct salaries and related costs | 299,477 | 266,945 |
General and administrative | 109,627 | 103,247 |
Depreciation, net | 13,115 | 12,461 |
Amortization of intangibles | 2,987 | 4,119 |
Impairment of long-lived assets | 1,150 | |
Total operating expenses | 426,356 | 386,772 |
Income from operations | 31,530 | 24,394 |
Other income (expense): | ||
Interest income | 98 | 263 |
Interest (expense) | (423) | (720) |
Other income (expense), net | (322) | (4,793) |
Total other income (expense), net | (647) | (5,250) |
Income before income taxes | 30,883 | 19,144 |
Income taxes | 5,905 | 5,226 |
Net income | $ 24,978 | $ 13,918 |
Net income per common share: | ||
Basic | $ 0.63 | $ 0.34 |
Diluted | $ 0.63 | $ 0.34 |
Weighted average common shares outstanding: | ||
Basic | 39,641 | 41,132 |
Diluted | 39,956 | 41,334 |
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2021 |
Mar. 31, 2020 |
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Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 24,978 | $ 13,918 |
Other comprehensive income (loss), net of taxes: | ||
Foreign currency translation adjustments | (4,463) | (21,350) |
Unrealized gain (loss) on cash flow hedging instruments, net of taxes | 991 | (1,342) |
Unrealized actuarial gain (loss) related to pension liability, net of taxes | (7) | (17) |
Unrealized gain (loss) on postretirement obligation, net of taxes | (22) | |
Other comprehensive income (loss), net of taxes | (3,479) | (22,731) |
Comprehensive income (loss) | $ 21,499 | $ (8,813) |
Overview and Basis of Presentation |
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Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Overview and Basis of Presentation |
Note 1. Overview and Basis of Presentation Business — Sykes Enterprises, Incorporated and consolidated subsidiaries (“SYKES” or the “Company”) is a leading full lifecycle provider of global customer experience management services, multichannel demand generation and digital transformation. The Company provides differentiated full lifecycle customer experience management solutions and services primarily to Global 2000 companies and their end customers principally in the financial services, technology, communications, transportation & leisure and healthcare industries. The Company’s differentiated full lifecycle services platform effectively engages customers at every touchpoint within the customer journey, including digital media and acquisition, sales expertise, customer service, technical support and retention, many of which can be optimized through a suite of digital transformation capabilities under its SYKES Digital Services (“SDS”) group, which spans robotic process automation (“RPA”), self-service, insight analytics and digital learning. In addition to digital transformation, the Company also provides artificial intelligence (“AI”) solutions that can be embedded and leveraged across its lifecycle offerings. Utilizing SYKES’ integrated onshore/offshore global delivery model, the Company provides its services through multiple communication channels including phone, e-mail, social media, text messaging, chat and digital self-service. The Company also provides various enterprise support services in the United States that include services for its clients’ internal support operations, from technical staffing services to outsourced corporate help desk services. In Europe, SYKES also provides fulfillment services, which include order processing, payment processing, inventory control, product delivery and product returns handling. Additionally, through the Company’s acquisition of RPA provider Symphony Ventures Ltd (“Symphony”) coupled with its investment in AI through XSell Technologies, Inc. (“XSell”), the Company also provides a suite of solutions such as consulting, implementation, hosting and managed services that optimizes its differentiated full lifecycle management services platform. The Company has operations in two reportable segments entitled (1) the Americas, in which the client base is primarily companies in the United States that are using the Company’s services to support their customer management needs, which includes the United States, Canada, Latin America, Australia and the Asia Pacific Rim; and (2) EMEA, which includes Europe, the Middle East and Africa.
Coronavirus On March 11, 2020, the World Health Organization characterized the novel coronavirus (“COVID-19”) a pandemic. The global nature, rapid spread and continually evolving response by governments throughout the world to combat the spread has had a negative impact on the global economy. Certain of the Company’s customer experience management centers have been impacted by local government actions restricting facility access or are operating at lower capacity utilization levels to achieve social distancing. The Company is committed to the health and safety of its workforce and ensuring business continuity for the brands it serves. In response, the Company has shifted as many employees as possible to a work-at-home model. As of the middle of April 2021, approximately 70% of agents assigned to the Company’s brick-and-mortar facilities have temporarily transitioned to a work-at-home model, 25% are working in centers and 5% of the Company’s agents are idle primarily due to the lack of technical infrastructure to work from home. The Company’s operations in the Philippines, El Salvador and Mexico have been most impacted by the governmental restrictions. The Company continues to closely monitor the prevalence of COVID-19 and the vaccination rates in the communities where its centers are located as well as guidance from public health authorities, federal and local agencies and municipalities. The Company will work with employees and clients to transition agents back to its centers based on that guidance, but risk further disruption to the business as a result of COVID-19 and government-imposed restrictions. Over time, the Company anticipates a permanent transition to a work-at-home or hybrid model for a portion of its workforce. Exit of Leased Space The Company continues to reevaluate its real estate footprint in connection with the transition of a portion of its workforce to a permanent remote working environment in both the Americas and EMEA. Since April 2020, the Company has decided to terminate, sublease or abandon leases prior to the end of their lease terms at certain of its sites as approximately 3,500 seats transitioned from brick and mortar to at home agents. As such, the Company recorded cumulative impairments of right-of-use (“ROU”) assets of $13.4 million and impairments of property and equipment of $7.2 million related to these actions since the initiation of its reevaluation in April 2020, of which $0.7 million of ROU assets and $0.1 million of property and equipment impairments were recorded during the three months ended March 31, 2021. See Note 4, Fair Value, in the accompanying “Notes to Condensed Consolidated Financial Statements” for further information.
Taylor Media Corp. Acquisition On December 31, 2020, through its wholly-owned subsidiary, Clear Link Technologies, LLC, the Company completed the acquisition of Taylor Media Corp. (“TMC”), a personal finance digital media company and owner of The Penny Hoarder. Of the total initial purchase price of $104.9 million, $87.2 million was paid upon closing using $63.0 million of additional borrowings under our credit agreement as well as cash on hand. Of the remaining $17.7 million of the purchase price, $0.2 million was used to repay outstanding debt and $17.5 million of the purchase price was deferred and is payable on December 31, 2027, the seventh anniversary of the closing. In the event TMC’s previous owner remains employed by the Company or one of its subsidiaries on December 31, 2022, the second anniversary of the closing, the deferred payment will be accelerated and due at that time. The deferred purchase price was included in “Other long-term liabilities” in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020.
The Company accounted for the TMC acquisition in accordance with ASC 805, Business Combinations (“ASC 805”), whereby the purchase price paid was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the closing date. Certain amounts are provisional and are subject to change, including the tax analysis of the assets acquired and liabilities assumed, and goodwill. The Company expects to complete this analysis by June 30, 2021 and any resulting adjustments will be recorded in accordance with ASC 805. The initial purchase price allocation resulted in $2.2 million of cash, $6.7 million of accounts receivable, $87.9 million of intangible assets, primarily domain names, content library and customer relationships, $4.2 million of other assets, $9.0 million of goodwill and $5.1 million of liabilities.
The Company has reflected TMC’s assets and liabilities in its consolidated balance sheet as of December 31, 2020 and the results of TMC’s operations have been reflected in its consolidated financial statements in the Americas segment since January 1, 2021.
Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for any future quarters or the year ending December 31, 2021. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission (“SEC”) on February 26, 2021.
Principles of Consolidation — The condensed consolidated financial statements include the accounts of SYKES and its wholly-owned subsidiaries and controlled majority-owned subsidiaries. Investments in less than majority-owned subsidiaries in which the Company does not have a controlling interest, but does have significant influence, are accounted for as equity method investments. All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates — The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Due to the novel coronavirus (“COVID-19”) pandemic, there has been uncertainty and disruption in the global economy and financial markets. Other than where noted, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date and time of issuance of the condensed consolidated financial statements. These estimates may change, as new events occur, and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.
Subsequent Events — Subsequent events or transactions have been evaluated through the date and time of issuance of the condensed consolidated financial statements. There were no material subsequent events that required recognition or disclosure in the accompanying condensed consolidated financial statements.
Cash, Cash Equivalents and Restricted Cash — Cash and cash equivalents consist of cash and highly liquid short-term investments, primarily held in non-interest-bearing investments which have original maturities of less than 90 days. Restricted cash includes cash whereby the Company’s ability to use the funds at any time is contractually limited or is generally designated for specific purposes arising out of certain contractual or other obligations.
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets that sum to the amounts reported in the Condensed Consolidated Statements of Cash Flows (in thousands):
Allowance for Doubtful Accounts — The Company recorded a $0.2 million and $0.6 million increase to the allowance for credit losses related to its short-term trade receivables primarily as a result of deterioration in certain clients’ credit ratings reflecting current and expected economic conditions during the three months ended March 31, 2021 and 2020, respectively, and wrote off $0.1 million and $0.3 million of the allowance for credit losses related to certain short-term trade receivables deemed to be uncollectible during the three months ended March 31, 2021 and 2020, respectively. The Company recorded a $0.1 million increase to the allowance for credit losses related to its long-term trade receivables during the three months ended March 31, 2021 (none in 2020).
Customer-Acquisition Advertising Costs — The Company’s advertising costs are expensed as incurred. Total advertising costs included in “Direct salaries and related costs” in the accompanying Condensed Consolidated Statements of Operations were as follows (in thousands):
New Accounting Standards Not Yet Adopted
Reference Rate Reform
In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Compensation – Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides companies with optional guidance, including expedients and exceptions for applying generally accepted accounting principles to contracts and other transactions affected by reference rate reform, such as the London Interbank Offered Rate (“LIBOR”). These amendments are effective for all entities as of March 12, 2020 and an entity may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact of the transition from LIBOR to alternative reference interest rates but does not expect a material impact on its financial position, results of operations or cash flows.
New Accounting Standards Recently Adopted
Income Taxes
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes (“ASU 2019-12”). These amendments simplify the accounting for income taxes by eliminating certain exceptions and also clarifying and amending certain aspects of existing guidance. These amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Most of the amendments are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. Early adoption was permitted, including adoption in any interim period for which financial statements had not yet been issued. The Company’s adoption of ASU 2019-12 on January 1, 2021 did not have a material impact on its financial position, results of operations, cash flows or disclosures.
Significant Accounting Policies
There have been no new or material changes to the significant accounting policies disclosed in Note 1, Overview and Summary of Significant Accounting Policies, in the “Notes to the Consolidated Financial Statements” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. |
Revenues |
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Revenues |
Note 2. Revenues Revenues from Contracts with Customers Revenues for customer experience management solutions and services are recognized over time using output methods such as a per minute, per hour, per call, per transaction or per time and materials basis. RPA services revenues are primarily recognized over time using output methods such as per time and materials basis. Revenues from fulfillment services are recognized upon shipment to the customer and satisfaction of all obligations. Revenues from enterprise support services are recognized over time using output methods such as number of positions filled. Disaggregated Revenues The Company disaggregates its revenues from contracts with customers by service type and delivery location (see Note 14, Segments and Geographic Information), for each of its reportable segments, as the Company believes it best depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by economic factors. The following table represents revenues from contracts with customers disaggregated by service type and by the reportable segment for each category for the periods indicated (in thousands):
Trade Accounts Receivable
The Company’s noncurrent trade accounts receivable result from contracts with customers that include renewal provisions and contracts with customers under multi-year arrangements. The Company’s trade accounts receivable, net, consisted of the following (in thousands):
(1) Included in “Receivables, net” in the accompanying Condensed Consolidated Balance Sheets. (2) Included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets.
Deferred Revenue and Customer Liabilities Deferred revenue and customer liabilities consisted of the following (in thousands):
The Company expects to recognize the majority of its deferred revenue as of March 31, 2021 over the next 180 days. Revenues of $2.8 million and $2.7 million were recognized during the three months ended March 31, 2021 and 2020, respectively, from amounts included in deferred revenue at December 31, 2020 and 2019, respectively. The Company expects to recognize the majority of the customer arrangements with termination rights into revenue as the Company has not historically experienced a high rate of contract terminations. Estimated refund liabilities are generally resolved within 180 days, once it is determined whether the requisite service levels and client requirements were achieved to settle the contingency. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases |
Note 3. Leases
The Company leases facilities for its corporate headquarters, many of its customer experience management centers, several regional support offices and data centers. These leases are classified as operating leases in accordance with ASC 842, Leases, and are included in “Operating lease right-of-use assets,” “Operating lease liabilities” and “Long-term operating lease liabilities” in the accompanying Condensed Consolidated Balance Sheet as of March 31, 2021. The Company has no finance leases. Lease costs, net of sublease income, of $15.6 million and $16.0 million for the three months ended March 31, 2021 and 2020, respectively, were primarily included in “General and administrative” costs in the accompanying Condensed Consolidated Statements of Operations. Additional supplemental information related to leases was as follows:
Maturities of operating lease liabilities as of March 31, 2021 were as follows (in thousands):
Exit of Leased Space The Company continues to reevaluate its real estate footprint in connection with a transition of a portion of its workforce to a permanent remote working environment in both the Americas and EMEA. Since April 2020, the Company decided to terminate, sublease or abandon leases prior to the end of their lease terms at certain of its sites and recorded impairments of ROU assets as a result. See Note 4, Fair Value, for further information. |
Fair Value |
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Fair Value |
Note 4. Fair Value
ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value and establishes a framework for measuring fair value. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Additionally, ASC 820 requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for how these assets and liabilities must be grouped, based on significant levels of observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These two types of inputs have created the following fair value hierarchy:
Determination of Fair Value — The Company generally uses quoted market prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access to determine fair value and classifies such items in Level 1. Fair values determined by Level 2 inputs utilize inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted market prices in active markets for similar assets or liabilities, and inputs other than quoted market prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.
If quoted market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters, such as interest rates, currency exchange rates, etc. Assets or liabilities valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.
The following describes the valuation methodologies used by the Company to measure assets and liabilities at fair value on a recurring basis, including an indication of the level in the fair value hierarchy in which each asset or liability is generally classified, if applicable.
Cash, Short-Term and Other Investments and Accounts Payable — The carrying values for cash, short-term and other investments and accounts payable approximate their fair values.
Long-Term Debt — The carrying value of long-term debt approximates its estimated fair value as the debt bears interest based on variable market rates, as outlined in the debt agreement.
Foreign Currency Contracts — The Company enters into foreign currency forward contracts and options over the counter and values such contracts, including premiums paid on options, at fair value using quoted market prices of comparable instruments or, if none are available, on pricing models or formulas using current market and model assumptions, including adjustments for credit risk. The key inputs include forward or option foreign currency exchange rates and interest rates. These items are classified in Level 2 of the fair value hierarchy.
Investments Held in Rabbi Trust — The investment assets of the rabbi trust are valued using quoted market prices in active markets, which are classified in Level 1 of the fair value hierarchy. For additional information about the deferred compensation plan, refer to Note 7, Investments Held in Rabbi Trust.
The Company's assets and liabilities measured at fair value on a recurring basis subject to the requirements of ASC 820 consisted of the following (in thousands):
(1) See Note 6, Financial Derivatives, for the classification in the accompanying Condensed Consolidated Balance Sheets. (2) Included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets. See Note 7, Investments Held in Rabbi Trust. Non-Recurring Fair Value
Certain assets are not required to be measured at fair value on a recurring basis and are reported at their carrying values, including goodwill, other intangible assets, other long-lived assets, ROU assets and equity method investments. The carrying value of these assets is evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable (and at least annually for goodwill and indefinite-lived intangible assets), and if applicable, written down to fair value.
The following table summarizes the total impairment losses in the accompanying Condensed Consolidated Statements of Operations related to nonrecurring fair value measurements of certain assets (none in 2020) (in thousands):
The Company continues to reevaluate its real estate footprint in connection with a shift of a portion of its workforce to a permanent remote working environment in both the Americas and EMEA and transitioned approximately 3,500 seats from brick and mortar to at home agents since April 2020. The Company decided to terminate, sublease or abandon leases prior to the end of their lease terms at certain of its sites and recorded impairment losses during the three months ended March 31, 2021 related to the exit of leased facilities and the leasehold improvements, equipment, furniture and fixtures located in these sites which were not recoverable. As the fair value of the ROU assets was less than the carrying value, the Company recognized an impairment of ROU assets, reducing the carrying value of the ROU assets to an estimated fair value of $0.4 million. The fair value of the ROU assets where the Company intends to sublease was estimated using Level 2 inputs such as market comparables to estimate future cash flows expected from sublease income over the remaining lease terms. Further changes in the estimated amount or timing of cash flows from sublease arrangements could result in additional impairment charges. The impairment of property and equipment reduced the carrying amount of the applicable assets to their fair value of $0.
The Company also recorded an impairment charge of $0.3 million during the three months ended March 31, 2021 related to software that was no longer being utilized. The impairment of the software reduced the carrying value of the applicable asset to its fair value of $0. |
Goodwill and Intangible Assets |
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Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets |
Note 5. Goodwill and Intangible Assets Intangible Assets The following table presents the Company’s purchased intangible assets as of March 31, 2021 (in thousands):
The following table presents the Company’s purchased intangible assets as of December 31, 2020 (in thousands):
The Company’s estimated future amortization expense for the succeeding years relating to the purchased intangible assets resulting from acquisitions completed prior to March 31, 2021 is as follows (in thousands):
Goodwill Changes in goodwill for the three months ended March 31, 2021 consisted of the following (in thousands):
Changes in goodwill for the year ended December 31, 2020 consisted of the following (in thousands):
(1) The three months ended March 31, 2021 includes the impact of adjustments to acquired goodwill upon refinements of the purchase price allocation of TMC’s assets acquired and liabilities assumed. The year ended December 31, 2020 includes the goodwill recorded related to the TMC acquisition. (2) The year ended December 31, 2020 includes the impairment of a portion of the Symphony reporting unit’s goodwill.
The Company performs its annual goodwill impairment test during the third quarter, or more frequently if indicators of impairment exist. For the annual goodwill impairment test, the Company elected to forgo the option to first assess qualitative factors and performed its annual quantitative goodwill impairment test as of July 31, 2020. Under ASC 350, Intangibles – Goodwill and Other, the carrying value of assets is calculated at the reporting unit level. The quantitative assessment of goodwill includes comparing a reporting unit’s calculated fair value to its carrying value. The calculation of fair value requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the projected long-term growth rate and determination of the Company’s weighted average cost of capital (“WACC”), which are classified as Level 3 inputs. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. If the fair value of the reporting unit is less than its carrying value, goodwill is considered impaired and an impairment loss is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The process of evaluating the fair value of the reporting units is highly subjective and requires significant judgment and estimates as the reporting units operate in a number of markets and geographical regions. The Company considered the income and market approaches to determine its best estimates of fair value, which incorporated the following significant assumptions:
As of July 31, 2020, the Company had eight reporting units, seven of which had goodwill. The Company concluded that goodwill was not impaired for six of its seven of its reporting units with goodwill, based on generally accepted valuation techniques and the significant assumptions outlined above. The fair values of three of the seven reporting units were substantially in excess of their carrying value. As part of this analysis, the Company considered the ongoing deterioration in general economic and market conditions due to the pandemic and its impact on each of the Company’s reporting units’ performance. The Clearlink, Latin America and Qelp reporting units’ fair value exceeded their respective carrying values, although the fair value cushion was not substantial. The Clearlink, Latin America and Qelp reporting units are at risk of future impairment if projected operating results are not met or other inputs into the fair value measurement model change. The Symphony reporting unit’s carrying value exceeded its fair value as of the July 31, 2020 annual impairment analysis, which resulted in a non-cash goodwill impairment of $21.8 million. Symphony’s on-site consulting model has been negatively impacted by travel and shelter-in-place restrictions imposed by governments, as well as the shift by businesses to work from home in an attempt to reduce the spread of COVID-19. These restrictions have continued longer than initially anticipated and have resulted in further declines in the cash flow projections at Symphony for 2020 as well as the Company’s projections for 2021 at the time of the annual impairment test. There is significant uncertainty regarding the length of time these restrictions will remain in place. An additional impairment charge may arise in the future if Symphony’s operations experience a protracted delay in the resumption of its operations or a significant shift in client demand results from the economic downturn. As of March 31, 2021, the Company believes there was no impairment related to Symphony’s remaining $19.3 million of goodwill as no triggering events were identified during the three months ended March 31, 2021. As of March 31, 2021, the Company believes there were no indicators of impairment related to Clearlink’s $83.4 million of goodwill (which includes goodwill from the TMC acquisition), Latin America’s $18.2 million of goodwill and Qelp’s $10.2 million of goodwill. It is possible that future changes in circumstances, including a more prolonged and/or severe pandemic, or future changes in the variable associated with the judgments, assumptions and estimates used in assessing the fair value of the reporting units, could require the Company to record additional non-cash impairment charges. |
Financial Derivatives |
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Derivative Instruments And Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Derivatives |
Note 6. Financial Derivatives Cash Flow Hedges — The Company has derivative assets and liabilities relating to outstanding forward contracts and options, designated as cash flow hedges, as defined under ASC 815, Derivatives and Hedging (“ASC 815”), consisting of Philippine Peso, Costa Rican Colon, Hungarian Forint and Romanian Leu contracts. These foreign currency contracts are entered into to hedge the exposure to variability in the cash flows of a specific asset or liability, or of a forecasted transaction that is attributable to changes in exchange rates. The deferred gains (losses) and related taxes on the Company’s cash flow hedges recorded in “Accumulated other comprehensive income (loss)” (“AOCI”) in the accompanying Condensed Consolidated Balance Sheets were as follows (in thousands):
Deferred gains (losses) and other future reclassifications from AOCI will fluctuate with movements in the underlying market price of the forward contracts and options as well as the related settlement of forecasted transactions. Non-Designated Hedges Foreign Currency Contracts — The Company also periodically enters into foreign currency hedge contracts that are not designated as hedges as defined under ASC 815. The purpose of these derivative instruments is to protect the Company’s interests against adverse foreign currency moves relating primarily to intercompany receivables and payables, and other assets and liabilities that are denominated in currencies other than the Company’s subsidiaries’ functional currencies. The Company had the following outstanding foreign currency forward contracts and options (in thousands):
Master netting agreements exist with each respective counterparty to reduce credit risk by permitting net settlement of derivative positions. In the event of default by the Company or one of its counterparties, these agreements include a set-off clause that provides the non-defaulting party the right to net settle all derivative transactions, regardless of the currency and settlement date. The maximum amount of loss due to credit risk that, based on gross fair value, the Company would incur if parties to the derivative transactions that make up the concentration failed to perform according to the terms of the contracts was $0.9 million and $0.3 million as of March 31, 2021 and December 31, 2020, respectively. After consideration of these netting arrangements and offsetting positions by counterparty, the total net settlement amount as it relates to these positions are asset positions of $0.8 million and $0.3 million as of March 31, 2021 and December 31, 2020, respectively, and liability positions of $1.3 million and $2.4 as of March 31, 2021 and December 31, 2020, respectively. Although legally enforceable master netting arrangements exist between the Company and each counterparty, the Company has elected to present the derivative assets and derivative liabilities on a gross basis in the accompanying Condensed Consolidated Balance Sheets. Additionally, the Company is not required to pledge, nor is it entitled to receive, cash collateral related to these derivative transactions. The following tables present the fair value of the Company’s derivative instruments included in the accompanying Condensed Consolidated Balance Sheets (in thousands):
The following table presents the effect of the Company’s derivative instruments included in the accompanying condensed consolidated financial statements (in thousands):
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Investments Held in Rabbi Trust |
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments Debt And Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments Held in Rabbi Trust |
Note 7. Investments Held in Rabbi Trust
The Company’s investments held in rabbi trust, classified as trading securities and included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets, at fair value, consist of the following (in thousands):
The mutual funds held in rabbi trust were 75% equity-based and 25% debt-based as of March 31, 2021. Net investment gains (losses) included in “Other income (expense), net” in the accompanying Condensed Consolidated Statements of Operations consists of the following (in thousands):
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Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) |
Note 8. Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) consist of the following (in thousands):
The following table summarizes the amounts reclassified to net income from accumulated other comprehensive income (loss) and the associated line item in the accompanying Condensed Consolidated Statements of Operations (in thousands):
(1) See Note 6, Financial Derivatives, for further information. (2) See Note 12, Defined Benefit Pension Plan and Postretirement Benefits, for further information. (3) No related tax (provision) benefit. The Company has accrued income taxes on earnings which it plans to repatriate to the U.S. Any remaining earnings as well as other outside basis differences associated with the Company’s investments in its foreign subsidiaries are considered to be indefinitely reinvested and no provision for income taxes on those earnings or translation adjustments has been provided. See Note 9, Income Taxes, for further information. |
Income Taxes |
3 Months Ended | ||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||
Income Taxes |
Note 9. Income Taxes The Company’s effective tax rates were as follows:
The decrease in the effective tax rate for the three months ended March 31, 2021 as compared to 2020 was primarily due to $1.2 million in discrete tax benefits relating to Philippines tax law changes and stock compensation recognized during the three months ended March 31, 2021. The decrease was also affected by shifts in earnings among the various jurisdictions in which the Company operates. Several additional factors, none of which were individually material, also impacted the rate. The difference between the Company’s effective tax rate as compared to the U.S. statutory federal tax rate of 21.0% was primarily due to the tax impact of permanent differences, state income and foreign withholding taxes, partially offset by the recognition of net tax benefits resulting from foreign tax rate differentials, income earned in certain tax holiday jurisdictions and tax credits.
The Company provides U.S. income taxes on the earnings of foreign subsidiaries unless they are exempted from taxation. No additional income taxes have been provided for any indefinitely reinvested earnings or outside basis differences. Determining the amount of unrecognized deferred tax liability related to any remaining outside basis difference in these entities is not practicable due to the inherent complexity of the multi-jurisdictional tax environment in which the Company operates. The Company is currently under audit in several tax jurisdictions. The Company believes it has adequate reserves related to all matters pertaining to these audits. Should the Company experience unfavorable outcomes from these audits, such outcomes could have a significant impact on its financial condition, results of operations and cash flows. |
Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share |
Note 10. Earnings Per Share Basic earnings per share are based on the weighted average number of common shares outstanding during the periods. Diluted earnings per share includes the weighted average number of common shares outstanding during the respective periods and the further dilutive effect, if any, from stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust using the treasury stock method. The numbers of shares used in the earnings per share computation were as follows (in thousands):
On August 18, 2011, the Company’s Board of Directors (the “Board”) authorized the Company to purchase up to 5.0 million shares of its outstanding common stock (the “2011 Share Repurchase Program”). On March 16, 2016, the Board authorized an increase of 5.0 million shares to the 2011 Share Repurchase Program for a total of 10.0 million shares. A total of 8.3 million shares have been repurchased under the 2011 Share Repurchase Program since inception. The shares are purchased, from time to time, through open market purchases or in negotiated private transactions, and the purchases are based on factors, including but not limited to, the stock price, management discretion and general market conditions. The 2011 Share Repurchase Program has no expiration date. The shares repurchased under the Company’s 2011 Share Repurchase Program were as follows (none in 2021) (in thousands, except per share amounts):
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Commitments and Loss Contingencies |
3 Months Ended |
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Mar. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Loss Contingencies |
Note 11. Commitments and Loss Contingencies Purchase Commitments
The Company enters into various purchase commitment agreements with third-party vendors in the ordinary course of business whereby the Company commits to purchase goods and services used in its normal operations. These agreements generally are not cancelable, range from . periods and may contain fixed or minimum annual commitments. Certain of these agreements allow for renegotiation of the minimum annual commitments
Loss Contingencies Contingencies are recorded in the consolidated financial statements when it is probable that a liability will be incurred and the amount of the loss is reasonably estimable, or otherwise disclosed, in accordance with ASC 450, Contingencies (“ASC 450”). Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. In the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosures related to such matter as appropriate and in compliance with ASC 450. The Company received a state audit assessment and is currently rebutting the position. The Company has determined that the likelihood of a liability is reasonably possible and developed a range of possible loss up to $1.9 million, net of federal benefit, as of March 31, 2021. The Company, from time to time, is involved in legal actions arising in the ordinary course of business. With respect to any such other currently pending matters, management believes that the Company has adequate legal defenses and/or, when possible and appropriate, has provided adequate accruals related to those matters such that the ultimate outcome will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. |
Defined Benefit Pension Plan and Postretirement Benefits |
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation And Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plan and Postretirement Benefits |
Note 12. Defined Benefit Pension Plan and Postretirement Benefits Defined Benefit Pension Plans The following table provides information about the net periodic benefit cost for the Company’s pension plans (in thousands):
(1) Included in "Direct salaries and related costs" and “General and administrative” costs in the accompanying Condensed Consolidated Statements of Operations. (2) Included in "Other income (expense), net" in the accompanying Condensed Consolidated Statements of Operations. Employee Retirement Savings Plans The Company maintains a 401(k) plan covering defined employees who meet established eligibility requirements. The Company’s contributions included in the accompanying Condensed Consolidated Statements of Operations were as follows (in thousands):
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Stock-Based Compensation |
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Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||||||||||||||||||
Stock-Based Compensation |
Note 13. Stock-Based Compensation The following table summarizes the stock-based compensation expense (primarily in the Americas) and income tax benefits related to the stock-based compensation, both plan and non-plan related (in thousands):
(1) Included in "General and administrative" costs in the accompanying Condensed Consolidated Statements of Operations. (2) Included in "Income taxes" in the accompanying Condensed Consolidated Statements of Operations. During the three months ended March 31, 2021, the Company granted 0.3 million performance-based restricted shares/restricted stock units and 0.1 million service-based restricted shares/restricted stock units under the Company’s 2019 Plan, all at a weighted average grant-date fair value of $44.79 per share. |
Segments and Geographic Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments and Geographic Information |
Note 14. Segments and Geographic Information The Company operates within two regions, the Americas and EMEA. Each region represents a reportable segment comprised of aggregated regional operating segments, which portray similar economic characteristics. The Company aligns its business into two segments to effectively manage the business and support the customer care needs of every client and to respond to the demands of the Company’s global customers. The reportable segments consist of (1) the Americas, which includes the United States, Canada, Latin America, Australia and the Asia Pacific Rim, and provides outsourced customer experience management solutions and services (with an emphasis on inbound technical support, digital support and demand generation, and customer service) and technical staffing and (2) EMEA, which includes Europe, the Middle East and Africa, and provides outsourced customer experience management solutions and services (with an emphasis on technical support and customer service) and fulfillment services. The sites within Latin America, Australia and the Asia Pacific Rim are included in the Americas segment given the nature of the business and client profile, which is primarily made up of U.S.-based companies that are using the Company’s services in these locations to support their customer experience management needs. Information about the Company’s reportable segments is as follows (in thousands):
(1) Other items (including corporate and other costs, other income and expense, and income taxes) are included for purposes of reconciling to the Company’s consolidated totals as shown in the tables above for the periods shown. Inter-segment revenues are not material to the Americas and EMEA segment results. The Company’s reportable segments are evaluated regularly by its chief operating decision maker to decide how to allocate resources and assess performance. The chief operating decision maker evaluates performance based upon reportable segment revenue and income (loss) from operations. Because assets by segment are not reported to or used by the Company’s chief operating decision maker to allocate resources, or to assess performance, total assets by segment are not disclosed. The following table represents a disaggregation of revenue from contracts with customers by delivery location and by the reportable segment (in thousands):
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Other Income (Expense) |
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Other Income And Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense) |
Note 15. Other Income (Expense)
Other income (expense), net consists of the following (in thousands):
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Related Party Transactions |
3 Months Ended |
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Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions |
Note 16. Related Party Transactions In January 2008, the Company entered into a lease for a customer experience management center located in Kingstree, South Carolina. The landlord, Kingstree Office One, LLC, is an entity controlled by John H. Sykes, the founder, former Chairman and former Chief Executive Officer of the Company and the father of Charles Sykes, President and Chief Executive Officer of the Company. The lease payments on the 20-year lease were negotiated at or below market rates, and the lease is cancellable at the option of the Company. Upon giving notice in September 2020, the Company paid a lease termination penalty of $0.1 million and the Company vacated the space as of March 31, 2021. The Company paid $0.1 million to the landlord during both the three months ended March 31, 2021 and 2020, under the terms of the lease. |
Overview and Basis of Presentation (Policies) |
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Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business |
Business — Sykes Enterprises, Incorporated and consolidated subsidiaries (“SYKES” or the “Company”) is a leading full lifecycle provider of global customer experience management services, multichannel demand generation and digital transformation. The Company provides differentiated full lifecycle customer experience management solutions and services primarily to Global 2000 companies and their end customers principally in the financial services, technology, communications, transportation & leisure and healthcare industries. The Company’s differentiated full lifecycle services platform effectively engages customers at every touchpoint within the customer journey, including digital media and acquisition, sales expertise, customer service, technical support and retention, many of which can be optimized through a suite of digital transformation capabilities under its SYKES Digital Services (“SDS”) group, which spans robotic process automation (“RPA”), self-service, insight analytics and digital learning. In addition to digital transformation, the Company also provides artificial intelligence (“AI”) solutions that can be embedded and leveraged across its lifecycle offerings. Utilizing SYKES’ integrated onshore/offshore global delivery model, the Company provides its services through multiple communication channels including phone, e-mail, social media, text messaging, chat and digital self-service. The Company also provides various enterprise support services in the United States that include services for its clients’ internal support operations, from technical staffing services to outsourced corporate help desk services. In Europe, SYKES also provides fulfillment services, which include order processing, payment processing, inventory control, product delivery and product returns handling. Additionally, through the Company’s acquisition of RPA provider Symphony Ventures Ltd (“Symphony”) coupled with its investment in AI through XSell Technologies, Inc. (“XSell”), the Company also provides a suite of solutions such as consulting, implementation, hosting and managed services that optimizes its differentiated full lifecycle management services platform. The Company has operations in two reportable segments entitled (1) the Americas, in which the client base is primarily companies in the United States that are using the Company’s services to support their customer management needs, which includes the United States, Canada, Latin America, Australia and the Asia Pacific Rim; and (2) EMEA, which includes Europe, the Middle East and Africa.
Coronavirus On March 11, 2020, the World Health Organization characterized the novel coronavirus (“COVID-19”) a pandemic. The global nature, rapid spread and continually evolving response by governments throughout the world to combat the spread has had a negative impact on the global economy. Certain of the Company’s customer experience management centers have been impacted by local government actions restricting facility access or are operating at lower capacity utilization levels to achieve social distancing. The Company is committed to the health and safety of its workforce and ensuring business continuity for the brands it serves. In response, the Company has shifted as many employees as possible to a work-at-home model. As of the middle of April 2021, approximately 70% of agents assigned to the Company’s brick-and-mortar facilities have temporarily transitioned to a work-at-home model, 25% are working in centers and 5% of the Company’s agents are idle primarily due to the lack of technical infrastructure to work from home. The Company’s operations in the Philippines, El Salvador and Mexico have been most impacted by the governmental restrictions. The Company continues to closely monitor the prevalence of COVID-19 and the vaccination rates in the communities where its centers are located as well as guidance from public health authorities, federal and local agencies and municipalities. The Company will work with employees and clients to transition agents back to its centers based on that guidance, but risk further disruption to the business as a result of COVID-19 and government-imposed restrictions. Over time, the Company anticipates a permanent transition to a work-at-home or hybrid model for a portion of its workforce. Exit of Leased Space The Company continues to reevaluate its real estate footprint in connection with the transition of a portion of its workforce to a permanent remote working environment in both the Americas and EMEA. Since April 2020, the Company has decided to terminate, sublease or abandon leases prior to the end of their lease terms at certain of its sites as approximately 3,500 seats transitioned from brick and mortar to at home agents. As such, the Company recorded cumulative impairments of right-of-use (“ROU”) assets of $13.4 million and impairments of property and equipment of $7.2 million related to these actions since the initiation of its reevaluation in April 2020, of which $0.7 million of ROU assets and $0.1 million of property and equipment impairments were recorded during the three months ended March 31, 2021. See Note 4, Fair Value, in the accompanying “Notes to Condensed Consolidated Financial Statements” for further information.
Taylor Media Corp. Acquisition On December 31, 2020, through its wholly-owned subsidiary, Clear Link Technologies, LLC, the Company completed the acquisition of Taylor Media Corp. (“TMC”), a personal finance digital media company and owner of The Penny Hoarder. Of the total initial purchase price of $104.9 million, $87.2 million was paid upon closing using $63.0 million of additional borrowings under our credit agreement as well as cash on hand. Of the remaining $17.7 million of the purchase price, $0.2 million was used to repay outstanding debt and $17.5 million of the purchase price was deferred and is payable on December 31, 2027, the seventh anniversary of the closing. In the event TMC’s previous owner remains employed by the Company or one of its subsidiaries on December 31, 2022, the second anniversary of the closing, the deferred payment will be accelerated and due at that time. The deferred purchase price was included in “Other long-term liabilities” in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020.
The Company accounted for the TMC acquisition in accordance with ASC 805, Business Combinations (“ASC 805”), whereby the purchase price paid was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the closing date. Certain amounts are provisional and are subject to change, including the tax analysis of the assets acquired and liabilities assumed, and goodwill. The Company expects to complete this analysis by June 30, 2021 and any resulting adjustments will be recorded in accordance with ASC 805. The initial purchase price allocation resulted in $2.2 million of cash, $6.7 million of accounts receivable, $87.9 million of intangible assets, primarily domain names, content library and customer relationships, $4.2 million of other assets, $9.0 million of goodwill and $5.1 million of liabilities.
The Company has reflected TMC’s assets and liabilities in its consolidated balance sheet as of December 31, 2020 and the results of TMC’s operations have been reflected in its consolidated financial statements in the Americas segment since January 1, 2021.
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Basis of Presentation |
Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for any future quarters or the year ending December 31, 2021. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission (“SEC”) on February 26, 2021. |
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Principles of Consolidation |
Principles of Consolidation — The condensed consolidated financial statements include the accounts of SYKES and its wholly-owned subsidiaries and controlled majority-owned subsidiaries. Investments in less than majority-owned subsidiaries in which the Company does not have a controlling interest, but does have significant influence, are accounted for as equity method investments. All intercompany transactions and balances have been eliminated in consolidation. |
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Use of Estimates |
Use of Estimates — The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Due to the novel coronavirus (“COVID-19”) pandemic, there has been uncertainty and disruption in the global economy and financial markets. Other than where noted, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date and time of issuance of the condensed consolidated financial statements. These estimates may change, as new events occur, and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. |
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Subsequent Events |
Subsequent Events — Subsequent events or transactions have been evaluated through the date and time of issuance of the condensed consolidated financial statements. There were no material subsequent events that required recognition or disclosure in the accompanying condensed consolidated financial statements. |
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Cash, Cash Equivalents and Restricted Cash |
Cash, Cash Equivalents and Restricted Cash — Cash and cash equivalents consist of cash and highly liquid short-term investments, primarily held in non-interest-bearing investments which have original maturities of less than 90 days. Restricted cash includes cash whereby the Company’s ability to use the funds at any time is contractually limited or is generally designated for specific purposes arising out of certain contractual or other obligations.
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets that sum to the amounts reported in the Condensed Consolidated Statements of Cash Flows (in thousands):
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Allowance for Doubtful Accounts |
Allowance for Doubtful Accounts — The Company recorded a $0.2 million and $0.6 million increase to the allowance for credit losses related to its short-term trade receivables primarily as a result of deterioration in certain clients’ credit ratings reflecting current and expected economic conditions during the three months ended March 31, 2021 and 2020, respectively, and wrote off $0.1 million and $0.3 million of the allowance for credit losses related to certain short-term trade receivables deemed to be uncollectible during the three months ended March 31, 2021 and 2020, respectively. The Company recorded a $0.1 million increase to the allowance for credit losses related to its long-term trade receivables during the three months ended March 31, 2021 (none in 2020). |
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Customer-Acquisition Advertising Costs |
Customer-Acquisition Advertising Costs — The Company’s advertising costs are expensed as incurred. Total advertising costs included in “Direct salaries and related costs” in the accompanying Condensed Consolidated Statements of Operations were as follows (in thousands):
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New Accounting Standards Not Yet Adopted |
New Accounting Standards Not Yet Adopted
Reference Rate Reform
In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Compensation – Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides companies with optional guidance, including expedients and exceptions for applying generally accepted accounting principles to contracts and other transactions affected by reference rate reform, such as the London Interbank Offered Rate (“LIBOR”). These amendments are effective for all entities as of March 12, 2020 and an entity may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact of the transition from LIBOR to alternative reference interest rates but does not expect a material impact on its financial position, results of operations or cash flows. |
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New Accounting Standards Recently Adopted |
New Accounting Standards Recently Adopted
Income Taxes
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes (“ASU 2019-12”). These amendments simplify the accounting for income taxes by eliminating certain exceptions and also clarifying and amending certain aspects of existing guidance. These amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Most of the amendments are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. Early adoption was permitted, including adoption in any interim period for which financial statements had not yet been issued. The Company’s adoption of ASU 2019-12 on January 1, 2021 did not have a material impact on its financial position, results of operations, cash flows or disclosures.
Significant Accounting Policies
There have been no new or material changes to the significant accounting policies disclosed in Note 1, Overview and Summary of Significant Accounting Policies, in the “Notes to the Consolidated Financial Statements” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. |
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Revenue from Contracts with Customers |
Revenues from Contracts with Customers Revenues for customer experience management solutions and services are recognized over time using output methods such as a per minute, per hour, per call, per transaction or per time and materials basis. RPA services revenues are primarily recognized over time using output methods such as per time and materials basis. Revenues from fulfillment services are recognized upon shipment to the customer and satisfaction of all obligations. Revenues from enterprise support services are recognized over time using output methods such as number of positions filled. The Company expects to recognize the majority of its deferred revenue as of March 31, 2021 over the next 180 days. Revenues of $2.8 million and $2.7 million were recognized during the three months ended March 31, 2021 and 2020, respectively, from amounts included in deferred revenue at December 31, 2020 and 2019, respectively. The Company expects to recognize the majority of the customer arrangements with termination rights into revenue as the Company has not historically experienced a high rate of contract terminations. Estimated refund liabilities are generally resolved within 180 days, once it is determined whether the requisite service levels and client requirements were achieved to settle the contingency. |
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Fair Value Measurements |
ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value and establishes a framework for measuring fair value. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Additionally, ASC 820 requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for how these assets and liabilities must be grouped, based on significant levels of observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These two types of inputs have created the following fair value hierarchy:
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Financial Instruments |
Determination of Fair Value — The Company generally uses quoted market prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access to determine fair value and classifies such items in Level 1. Fair values determined by Level 2 inputs utilize inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted market prices in active markets for similar assets or liabilities, and inputs other than quoted market prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.
If quoted market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters, such as interest rates, currency exchange rates, etc. Assets or liabilities valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.
The following describes the valuation methodologies used by the Company to measure assets and liabilities at fair value on a recurring basis, including an indication of the level in the fair value hierarchy in which each asset or liability is generally classified, if applicable.
Cash, Short-Term and Other Investments and Accounts Payable — The carrying values for cash, short-term and other investments and accounts payable approximate their fair values.
Long-Term Debt — The carrying value of long-term debt approximates its estimated fair value as the debt bears interest based on variable market rates, as outlined in the debt agreement.
Foreign Currency Contracts — The Company enters into foreign currency forward contracts and options over the counter and values such contracts, including premiums paid on options, at fair value using quoted market prices of comparable instruments or, if none are available, on pricing models or formulas using current market and model assumptions, including adjustments for credit risk. The key inputs include forward or option foreign currency exchange rates and interest rates. These items are classified in Level 2 of the fair value hierarchy.
Investments Held in Rabbi Trust — The investment assets of the rabbi trust are valued using quoted market prices in active markets, which are classified in Level 1 of the fair value hierarchy. For additional information about the deferred compensation plan, refer to Note 7, Investments Held in Rabbi Trust.
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Foreign Currency and Derivative Instruments |
Cash Flow Hedges — The Company has derivative assets and liabilities relating to outstanding forward contracts and options, designated as cash flow hedges, as defined under ASC 815, Derivatives and Hedging (“ASC 815”), consisting of Philippine Peso, Costa Rican Colon, Hungarian Forint and Romanian Leu contracts. These foreign currency contracts are entered into to hedge the exposure to variability in the cash flows of a specific asset or liability, or of a forecasted transaction that is attributable to changes in exchange rates. |
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Earnings Per Share |
Basic earnings per share are based on the weighted average number of common shares outstanding during the periods. Diluted earnings per share includes the weighted average number of common shares outstanding during the respective periods and the further dilutive effect, if any, from stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust using the treasury stock method. |
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Segments and Geographic Information |
The Company operates within two regions, the Americas and EMEA. Each region represents a reportable segment comprised of aggregated regional operating segments, which portray similar economic characteristics. The Company aligns its business into two segments to effectively manage the business and support the customer care needs of every client and to respond to the demands of the Company’s global customers. |
Overview and Basis of Presentation (Tables) |
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Cash and Cash Equivalents and Restricted Cash |
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets that sum to the amounts reported in the Condensed Consolidated Statements of Cash Flows (in thousands):
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Schedule of Customer-Acquisition Advertising Costs | Total advertising costs included in “Direct salaries and related costs” in the accompanying Condensed Consolidated Statements of Operations were as follows (in thousands):
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Revenues (Tables) |
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue From Contract With Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from Contracts with Customers Disaggregated by Service Type |
The following table represents revenues from contracts with customers disaggregated by service type and by the reportable segment for each category for the periods indicated (in thousands):
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Receivables, Net |
The Company’s noncurrent trade accounts receivable result from contracts with customers that include renewal provisions and contracts with customers under multi-year arrangements. The Company’s trade accounts receivable, net, consisted of the following (in thousands):
(1) Included in “Receivables, net” in the accompanying Condensed Consolidated Balance Sheets. (2) Included in “Deferred charges and other assets” in the accompanying Condensed Consolidated Balance Sheets. |
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Components of Deferred Revenue and Customer Liabilities |
Deferred revenue and customer liabilities consisted of the following (in thousands):
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Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease |
Additional supplemental information related to leases was as follows:
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Schedule of Maturities of Operating Lease Liabilities |
Maturities of operating lease liabilities as of March 31, 2021 were as follows (in thousands):
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Fair Value (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis |
The Company's assets and liabilities measured at fair value on a recurring basis subject to the requirements of ASC 820 consisted of the following (in thousands):
(1) See Note 6, Financial Derivatives, for the classification in the accompanying Condensed Consolidated Balance Sheets. (2) Included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets. See Note 7, Investments Held in Rabbi Trust. |
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Summary of Total Impairment Losses Related to Nonrecurring Fair Value Measurements of Certain Assets |
The following table summarizes the total impairment losses in the accompanying Condensed Consolidated Statements of Operations related to nonrecurring fair value measurements of certain assets (none in 2020) (in thousands):
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Goodwill and Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's Purchased Intangible Assets |
The following table presents the Company’s purchased intangible assets as of March 31, 2021 (in thousands):
The following table presents the Company’s purchased intangible assets as of December 31, 2020 (in thousands):
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Estimated Future Amortization Expense |
The Company’s estimated future amortization expense for the succeeding years relating to the purchased intangible assets resulting from acquisitions completed prior to March 31, 2021 is as follows (in thousands):
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Changes in Goodwill |
Changes in goodwill for the three months ended March 31, 2021 consisted of the following (in thousands):
Changes in goodwill for the year ended December 31, 2020 consisted of the following (in thousands):
(1) The three months ended March 31, 2021 includes the impact of adjustments to acquired goodwill upon refinements of the purchase price allocation of TMC’s assets acquired and liabilities assumed. The year ended December 31, 2020 includes the goodwill recorded related to the TMC acquisition. (2) The year ended December 31, 2020 includes the impairment of a portion of the Symphony reporting unit’s goodwill.
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Financial Derivatives (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Gains (Losses) and Related Taxes on Cash Flow Hedges |
The deferred gains (losses) and related taxes on the Company’s cash flow hedges recorded in “Accumulated other comprehensive income (loss)” (“AOCI”) in the accompanying Condensed Consolidated Balance Sheets were as follows (in thousands):
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Outstanding Foreign Currency Forward Contracts and Options |
The Company had the following outstanding foreign currency forward contracts and options (in thousands):
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Derivative Instruments Fair Value |
The following tables present the fair value of the Company’s derivative instruments included in the accompanying Condensed Consolidated Balance Sheets (in thousands):
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Effect of the Company's Derivative Instruments |
The following table presents the effect of the Company’s derivative instruments included in the accompanying condensed consolidated financial statements (in thousands):
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Investments Held in Rabbi Trust (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||
Investments Debt And Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Investments Held in Rabbi Trust, Classified as Trading |
The Company’s investments held in rabbi trust, classified as trading securities and included in “Other current assets” in the accompanying Condensed Consolidated Balance Sheets, at fair value, consist of the following (in thousands):
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Components of Investment Income (Losses), Included in Other Income (Expense), Net in Accompanying Consolidated Statements of Operations |
The mutual funds held in rabbi trust were 75% equity-based and 25% debt-based as of March 31, 2021. Net investment gains (losses) included in “Other income (expense), net” in the accompanying Condensed Consolidated Statements of Operations consists of the following (in thousands):
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Accumulated Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Income (Loss) |
The components of accumulated other comprehensive income (loss) consist of the following (in thousands):
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Amounts Reclassified to Net Income from Accumulated Other Comprehensive Income (Loss) |
The following table summarizes the amounts reclassified to net income from accumulated other comprehensive income (loss) and the associated line item in the accompanying Condensed Consolidated Statements of Operations (in thousands):
(1) See Note 6, Financial Derivatives, for further information. (2) See Note 12, Defined Benefit Pension Plan and Postretirement Benefits, for further information. (3) No related tax (provision) benefit. |
Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||
Summary of Effective Tax Rates |
The Company’s effective tax rates were as follows:
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Earnings Per Share (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares Used in Earnings Per Share Computation |
The numbers of shares used in the earnings per share computation were as follows (in thousands):
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Shares Repurchased |
The shares repurchased under the Company’s 2011 Share Repurchase Program were as follows (none in 2021) (in thousands, except per share amounts):
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Defined Benefit Pension Plan and Postretirement Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||
Compensation And Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Net Periodic Benefit Cost and Other Accumulated Comprehensive Income for Pension Plans |
The following table provides information about the net periodic benefit cost for the Company’s pension plans (in thousands):
(1) Included in "Direct salaries and related costs" and “General and administrative” costs in the accompanying Condensed Consolidated Statements of Operations. (2) Included in "Other income (expense), net" in the accompanying Condensed Consolidated Statements of Operations. |
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Company's Contributions to Employee Retirement Savings Plans | The Company’s contributions included in the accompanying Condensed Consolidated Statements of Operations were as follows (in thousands):
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Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||||||||||||||||||
Stock-Based Compensation Expense, Income Tax Benefits Related to Stock-Based Compensation and Excess Tax Benefits (Provision) Recorded by Company Both Plan and Non-Plan | The following table summarizes the stock-based compensation expense (primarily in the Americas) and income tax benefits related to the stock-based compensation, both plan and non-plan related (in thousands):
(1) Included in "General and administrative" costs in the accompanying Condensed Consolidated Statements of Operations. (2) Included in "Income taxes" in the accompanying Condensed Consolidated Statements of Operations. |
Segments and Geographic Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's Reportable Segments |
Information about the Company’s reportable segments is as follows (in thousands):
(1) Other items (including corporate and other costs, other income and expense, and income taxes) are included for purposes of reconciling to the Company’s consolidated totals as shown in the tables above for the periods shown. Inter-segment revenues are not material to the Americas and EMEA segment results. |
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Operations by Delivery Location |
The following table represents a disaggregation of revenue from contracts with customers by delivery location and by the reportable segment (in thousands):
|
Other Income (Expense) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income And Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense), Net |
Other income (expense), net consists of the following (in thousands):
|
Overview and Basis of Presentation - Summary of Cash and Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | $ 112,763 | $ 103,077 | $ 118,422 | $ 127,246 |
Cash and Cash Equivalents and Restricted Cash | 114,018 | 104,396 | 120,083 | 129,185 |
Other Current Assets [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash included in "Other current assets" | 288 | 355 | 438 | 568 |
Deferred Charges and Other Assets [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash included in "Deferred charges and other assets" | $ 967 | $ 964 | $ 1,223 | $ 1,371 |
Overview and Basis of Presentation - Schedule of Total Advertising Costs Included in Direct Salaries and Related Costs in Condensed Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Direct Salaries and Related Costs [Member] | ||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Customer-acquisition advertising costs | $ 19,565 | $ 10,182 |
Revenues - Summary of Trade Accounts Receivable, Net (Detail) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade accounts receivable, net | $ 422,990 | $ 428,133 |
Receivables, Net [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade accounts receivable, net, current | 393,157 | 398,112 |
Deferred Charges and Other Assets [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade accounts receivable, net, noncurrent | $ 29,833 | $ 30,021 |
Revenues - Components of Deferred Revenue and Customer Liabilities (Detail) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Schedule of Deferred Revenue and Customer Liabilities [Line Items] | ||
Deferred revenue and customer liabilities | $ 25,744 | $ 24,802 |
Deferred Revenue and Customer Liabilities [Member] | ||
Schedule of Deferred Revenue and Customer Liabilities [Line Items] | ||
Deferred revenue | 2,772 | 2,916 |
Customer arrangements with termination rights | 15,326 | 15,771 |
Estimated refund liabilities | $ 7,646 | $ 6,115 |
Revenues - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Revenue From Contract With Customer [Abstract] | ||
Deferred revenue recognized in the period | $ 2.8 | $ 2.7 |
Revenue remaining performance obligation expected timing of satisfaction explanation | The Company expects to recognize the majority of its deferred revenue as of March 31, 2021 over the next 180 days. | |
Estimated refund liabilities timing of resolution explanation | Estimated refund liabilities are generally resolved within 180 days, once it is determined whether the requisite service levels and client requirements were achieved to settle the contingency. |
Leases - Additional Information (Detail) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Lessee Lease Description [Line Items] | ||
Finance lease | $ 0 | |
General and Administrative [Member] | ||
Lessee Lease Description [Line Items] | ||
Lease costs, net | $ 15,600,000 | $ 16,000,000.0 |
Leases - Schedule of Additional Supplemental Information Related to Leases (Detail) |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
Weighted average remaining lease term of operating leases | 4 years 1 month 6 days | 4 years 3 months 18 days |
Weighted average discount rate of operating leases | 3.40% | 3.40% |
Leases - Schedule of Maturities of Operating Lease Liabilities (Detail) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Operating Lease Liabilities Payments Due [Abstract] | ||
2021 (remainder of the year) | $ 45,075 | |
2022 | 48,783 | |
2023 | 32,335 | |
2024 | 22,998 | |
2025 | 14,755 | |
2026 and thereafter | 18,753 | |
Total future lease payments | 182,699 | |
Less: Imputed interest | 13,160 | |
Present value of future lease payments | 169,539 | |
Less: Operating lease liabilities | 53,043 | $ 55,928 |
Long-term operating lease liabilities | $ 116,496 | $ 126,336 |
Fair Value - Additional Information (Detail) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
Seat
| |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value of ROU assets | $ 400 |
Fair value of property and equipment | $ 0 |
Number of seats transitioned to at home | Seat | 3,500 |
Impairment losses | $ 1,150 |
Software [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value of property and equipment | 0 |
Impairment losses | $ 300 |
Goodwill and Intangible Assets - Estimated Future Amortization Expense (Detail) $ in Thousands |
Mar. 31, 2021
USD ($)
|
---|---|
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | |
2021 (remainder of the year) | $ 8,749 |
2022 | 10,414 |
2023 | 8,309 |
2024 | 8,074 |
2025 | 7,961 |
2026 | 6,980 |
2027 and thereafter | $ 17,446 |
Goodwill and Intangible Assets - Changes in Goodwill (Detail) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Goodwill [Line Items] | ||
Beginning Balance, Goodwill Net | $ 299,409 | $ 311,247 |
Acquisition-Related | 176 | |
Goodwill Acquired During the Period | 8,851 | |
Impairment | 0 | (21,792) |
Effect of Foreign Currency | (289) | 1,103 |
Ending Balance, Goodwill Net | 299,296 | 299,409 |
Americas [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance, Goodwill Net | 269,472 | 259,953 |
Acquisition-Related | 176 | |
Goodwill Acquired During the Period | 8,851 | |
Impairment | 0 | |
Effect of Foreign Currency | 151 | 668 |
Ending Balance, Goodwill Net | 269,799 | 269,472 |
EMEA [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance, Goodwill Net | 29,937 | 51,294 |
Acquisition-Related | 0 | |
Impairment | 0 | (21,792) |
Effect of Foreign Currency | (440) | 435 |
Ending Balance, Goodwill Net | $ 29,497 | $ 29,937 |
Financial Derivatives - Deferred Gains (Losses) and Related Taxes on Cash Flow Hedges (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||
Deferred gains (losses) in AOCI | $ (1,212) | $ (2,188) |
Tax on deferred gains (losses) in AOCI | 12 | (3) |
Deferred gains (losses) in AOCI, net of taxes | (1,200) | $ (2,191) |
Deferred gains (losses) expected to be reclassified to "Revenues" from AOCI during the next twelve months | $ (1,031) |
Financial Derivatives - Additional Information (Detail) - USD ($) |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||
Maximum amount of loss due to credit risk | $ 900,000 | $ 300,000 |
Total net settlement amount asset positions | 800,000 | 300,000 |
Total net settlement amount liability positions | $ 1,300,000 | $ 2,400,000 |
Financial Derivatives - Effect of Company's Derivative Instruments (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Revenues | $ 457,886 | $ 411,166 |
Gains (losses) recognized from derivatives | 35 | (246) |
Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Cash Flow Hedges [Member] | Foreign Currency Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) recognized in AOCI: | 208 | (311) |
Revenues [Member] | Derivatives Designated as Hedging Instruments under ASC 815 [Member] | Cash Flow Hedges [Member] | Foreign Currency Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) reclassified from AOCI: | (757) | 926 |
Other Income (Expense), Net [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Foreign Currency Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) recognized from derivatives | $ 35 | $ (246) |
Investments Held in Rabbi Trust - Investments Held in Rabbi Trust, Classified as Trading (Detail) - Mutual Funds [Member] - USD ($) $ in Thousands |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Mutual funds, Cost | $ 11,088 | $ 10,332 |
Other Current Assets [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Mutual funds, Fair Value | $ 18,008 | $ 16,780 |
Investments Held in Rabbi Trust - Additional Information (Detail) |
Mar. 31, 2021 |
---|---|
Equity-Based Securities [Member] | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | |
Mutual funds held in rabbi trust | 75.00% |
Debt-Based Securities [Member] | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | |
Mutual funds held in rabbi trust | 25.00% |
Investments Held in Rabbi Trust - Components of Investment Income (Losses), Included in Other Income (Expense), Net in Accompanying Consolidated Statements of Operations (Detail) - Other Income (Expense), Net [Member] - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Net realized gains (losses) from sale of trading securities | $ 425 | $ 50 |
Dividend and interest income | 32 | 33 |
Net unrealized holding gains (losses) | 68 | (2,140) |
Net investment income (losses) | $ 525 | $ (2,057) |
Income Taxes - Summary of Effective Tax Rates (Detail) |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 19.10% | 27.30% |
Income Taxes - Additional Information (Detail) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
Income Tax [Line Items] | |
Statutory federal income tax rate | 21.00% |
Philippines [Member] | |
Income Tax [Line Items] | |
Discrete income tax benefit | $ 1.2 |
Earnings Per Share - Number of Shares Used in Earnings Per Share Computation (Detail) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Basic: | ||
Weighted average common shares outstanding | 39,641 | 41,132 |
Diluted: | ||
Dilutive effect of stock appreciation rights, restricted stock, restricted stock units and shares held in rabbi trust | 315 | 202 |
Total weighted average diluted shares outstanding | 39,956 | 41,334 |
Anti-dilutive shares excluded from the diluted earnings per share calculation | 25 | 12 |
Earnings Per Share - Additional Information (Detail) - 2011 Share Repurchase Program [Member] - shares |
3 Months Ended | 115 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2021 |
Mar. 16, 2016 |
Aug. 18, 2011 |
|
Equity, Class of Treasury Stock [Line Items] | ||||
Maximum amount of shares authorized for repurchase | 10,000,000.0 | 5,000,000.0 | ||
Total Number of Shares Repurchased | 860,000 | 8,300,000 | ||
Increase in shares authorized for repurchase | 5,000,000.0 |
Earnings Per Share - Shares Repurchased (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 115 Months Ended | |
---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
|
Schedule Of Shares Repurchased [Line Items] | |||
Total Cost of Shares Repurchased | $ 22,909 | $ 22,909 | |
Minimum [Member] | |||
Schedule Of Shares Repurchased [Line Items] | |||
Range of Prices Paid Per Share | $ 23.33 | ||
Maximum [Member] | |||
Schedule Of Shares Repurchased [Line Items] | |||
Range of Prices Paid Per Share | $ 31.91 | ||
2011 Share Repurchase Program [Member] | |||
Schedule Of Shares Repurchased [Line Items] | |||
Total Number of Shares Repurchased | 860 | 8,300 |
Commitments and Loss Contingencies - Additional Information (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
Minimum [Member] | |
Long-term Purchase Commitment [Line Items] | |
Term of agreements with third party vendors | 1 year |
Maximum [Member] | |
Long-term Purchase Commitment [Line Items] | |
Term of agreements with third party vendors | 5 years |
Loss Contingency, net of federal benefit | $ 1,900,000 |
Defined Benefit Pension Plan and Postretirement Benefits - Net Periodic Benefit Cost for Pension Plans (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Defined Benefit Plan Net Periodic Benefit Cost [Abstract] | ||
Service cost | $ 181 | $ 105 |
Interest cost | 61 | 51 |
Recognized actuarial (gains) | (1) | (23) |
Net periodic benefit cost | $ 241 | $ 133 |
Defined Benefit Pension Plan and Postretirement Benefits - Company's Contributions to Employee Retirement Savings Plans (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Compensation And Retirement Disclosure [Abstract] | ||
401(k) plan contributions | $ 851 | $ 780 |
Stock-Based Compensation - Stock-Based Compensation Expense, Income Tax Benefits Related to Stock-Based Compensation and Excess Tax Benefits (Provision) Recorded by Company Both Plan and Non-Plan (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
General and Administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation (expense) | $ (4,751) | $ (1,860) |
Income Taxes [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Income tax benefit | $ 1,140 | $ 446 |
Stock-Based Compensation - Additional Information (Detail) - Equity Incentive Plan [Member] shares in Millions |
3 Months Ended |
---|---|
Mar. 31, 2021
$ / shares
shares
| |
Performance-Based Restricted Shares/Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares granted | shares | 0.3 |
Weighted average grant-date fair value | $ / shares | $ 44.79 |
Employment-Based Restricted Shares/Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares granted | shares | 0.1 |
Weighted average grant-date fair value | $ / shares | $ 44.79 |
Segments and Geographic Information - Additional Information (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2021
Segment
Region
| |
Segment Reporting [Abstract] | |
Number of operating regions | Region | 2 |
Number of reportable segments | Segment | 2 |
Other Income (Expense) - Other Income (Expense), Net (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Other Nonoperating Income Expense [Abstract] | ||
Foreign currency transaction gains (losses) | $ (185) | $ (1,606) |
Gains (losses) on derivative instruments not designated as hedges | 35 | (246) |
Other miscellaneous income (expense) | (697) | (884) |
Other income (expense) | (322) | (4,793) |
Other Income (Expense), Net [Member] | ||
Other Nonoperating Income Expense [Abstract] | ||
Net investment gains (losses) on investments held in rabbi trust | $ 525 | $ (2,057) |
Related Party Transactions - Additional Information (Detail) - John H. Sykes [Member] - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Jan. 31, 2008 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Schedule of Other Related Party Transactions [Line Items] | |||
Duration of lease | 20 years | ||
Lease termination penalty | $ 0.1 | ||
Early termination date | Mar. 31, 2021 | ||
Payment to landlord under the lease terms | $ 0.1 | $ 0.1 | |
Related party transaction, description | In January 2008, the Company entered into a lease for a customer experience management center located in Kingstree, South Carolina. The landlord, Kingstree Office One, LLC, is an entity controlled by John H. Sykes, the founder, former Chairman and former Chief Executive Officer of the Company and the father of Charles Sykes, President and Chief Executive Officer of the Company. The lease payments on the 20-year lease were negotiated at or below market rates, and the lease is cancellable at the option of the Company. |