C. Acquisitions

KOR and PDI ACQUISITION

On December 22, 2011, the Company and King Merger Inc., a newly formed, wholly-owned subsidiary of the Company (the "Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with KOR Electronics ("KOR"), and Shareholder Representative Services LLC, as the securityholders' representative. On December 30, 2011, the transaction closed with the Merger Sub being merged with and into KOR with KOR continuing as the surviving company and wholly-owned subsidiary of the Company (the "Merger"). By operation of the Merger, the Company acquired both KOR and its wholly-owned subsidiary, Paragon Dynamics, Inc. ("PDI"). Based in Cypress, California, KOR designs and develops digital radio frequency memory ("DRFM") units for a variety of modern EW applications, as well as radar environment simulation and test systems for defense applications. Based in Aurora, Colorado, PDI provides sophisticated analytic exploitation services and customized multi-intelligence data fusion solutions for the U.S. intelligence community. For segment reporting, KOR is included in the Advanced Computing Solutions ("ACS") business segment and PDI is included in the MFS business segment.

The Company acquired KOR and PDI for a purchase price of $70,000 paid in cash. The Company funded the purchase price with cash on hand. The Company acquired KOR and PDI free of bank debt. The purchase price was subject to post-closing adjustment based on a determination of KOR's closing net working capital.

In accordance with the Merger Agreement, $10,650 of the purchase price was placed into escrow to support the post-closing working capital adjustment and the sellers' indemnification obligations. The escrow is available for indemnification claims through December 30, 2013. No amounts have been released from escrow as of March 31, 2012.

The following table presents the net purchase price for the acquisition of KOR:


	Net Purchase Price
Consideration transferred
Cash paid at closing	$	71,019
Working capital adjustment		370
Less cash, cash equivalents and restricted cash acquired		(1,019	)

Net purchase price	$	70,370

The following table presents the preliminary allocation of the net purchase price for KOR:


	Net Purchase Price Allocation
Estimated fair value of tangible assets acquired and liabilities assumed
Cash, cash equivalents and restricted cash	$	1,019
Accounts receivable and cost in excess of billings		10,493
Other current and non-current assets		4,054
Current liabilities		(4,474	)
Deferred income taxes		(4,600	)

Estimated fair value of net tangible assets acquired		6,492
Estimated fair value of identifiable intangible assets		12,130
Estimated fair value of goodwill		52,767

Estimated fair value of assets acquired	$	71,389
Less cash, cash equivalents and restricted cash acquired		(1,019	)

Net purchase price	$	70,370

The amounts above represent the preliminary fair value estimates as of March 31, 2012 and are subject to subsequent adjustment as the Company obtains additional information during the measurement period and finalizes its fair value estimates. Any subsequent adjustments to these fair value estimates occurring during the measurement period will result in an adjustment to goodwill or income, as applicable. As of March 31, 2012, there have been no material adjustments to the initial fair value estimates.

The goodwill of $52,767 arising from the KOR acquisition largely reflects the potential synergies and expansion of the Company's service offerings across product segments complementary to the Company's existing products. The KOR acquisition provides the Company with additional know-how and expertise related to radio frequency simulation and jamming technology and expansion into technical services for the U.S. intelligence community.

The revenue and operating income of KOR included in the Company's consolidated statements of operations for both the three and nine months ended March 31, 2012 was $10,453 and $1,512, respectively.

Pro Forma Financial Information

The following tables summarize the supplemental statements of operations information on an unaudited pro forma basis as if the KOR acquisition had occurred on July 1, 2010:


	Nine Months Ended March 31,
	2012		2011
Pro forma net revenues	$	204,619	$	194,946
Pro forma net income	$	17,473	$	17,243
Basic pro forma net earnings per share	$	0.59	$	0.72
Diluted pro forma net earnings per share	$	0.58	$	0.69

The pro forma results presented above are for illustrative purposes only for the applicable periods and do not purport to be indicative of the actual results which would have occurred had the transaction been completed as of the beginning of the period, nor are they indicative of results of operations which may occur in the future.

On February 16, 2011, the Company completed a follow-on public stock offering of 5,578 shares of the Company's common stock. As a result, an additional 5,578 and 999 weighted average shares outstanding were included in the calculation of basic and diluted net earnings per shares for the nine months ended March 31, 2012 and 2011, respectively.