CCA ACQUISITIONS

12 Months Ended

Jun. 27, 2015

Business Combinations [Abstract]

ACQUISITIONS

NOTE C.  CCA ACQUISITION

On March 28, 2014, the Company acquired substantially all of the assets of Combustion Components Associates, Inc. (“CCA”), a leading provider of in-furnace and post-combustion control technologies.  CCA technology is used to improve efficiency and reduce emissions at utility power plants, pulp and paper mills, chemical plants, oil refineries and other industrial facilities.  The purchase price was approximately $9.2 million, including $0.3 million performance-based contingent payments.  The Company funded the purchase of CCA with cash on hand.

The following table summarizes the consideration paid for the CCA acquisition and presents the final allocation of these amounts to the net tangible and identifiable intangible assets based on their estimated fair values as of the acquisition date. This allocation requires the significant use of estimates and is based on the information that was available to management at the time these consolidated financial statements were prepared (in thousands).

Current assets	$	2,444
Property, plant and equipment		325
Identifiable intangible assets		2,760
Goodwill		5,951
Total assets acquired		11,480
Current liabilities		(2,277	)
Net assets acquired	$	9,203

The Company determined the purchase price allocation for the acquisition based on estimates of the fair values of the tangible and intangible assets acquired and liabilities assumed.  The fair value of the receivables acquired was $2.0 million.

Acquired intangible assets of $2.8 million consisted of customer projects currently in backlog, customer relationships, trade names and design guidelines. The amortization period for these intangible assets ranges from 6 months to 10 years.  Amortization expense related to these intangible assets was $0.1 million for each of fiscal 2015 and fiscal 2014.

The acquisition of CCA extends the Company’s ability to deliver a broader portfolio of combustion and air pollution products and services to commercial, industrial and utility power-generation customers both domestically and internationally. The goodwill associated with the acquisition will be deductible for tax purposes.

The following unaudited pro forma information has been provided for illustrative purposes only and is not necessarily indicative of results that would have occurred had the acquisition been in effect for the periods presented, nor are they necessarily indicative of future results.

	(Unaudited)
	(in thousands, except per share amounts)
	Fiscal 2014			Fiscal 2013
Revenue	$	140,250		$	145,992
Net loss		(37,180	)		(1,037	)
Net loss attributable to PMFG, Inc.		(37,248	)		(1,629	)
Basic loss per common share		(1.77	)		(0.08	)
Diluted loss  per common share		(1.77	)		(0.08	)

The pro forma combined results for fiscal 2014 and 2013 have been prepared by adjusting the Company’s historical results to include the acquisition as if it occurred on July 1, 2012. These pro forma combined historical results were then adjusted for an increase in amortization expense due to the incremental intangible assets recorded related to the acquisition. The pro forma results of operations also include adjustments to reflect the impact of $0.7 million of acquisition related costs as of July 1, 2012. The pro forma results do not include any adjustments to eliminate the impact of cost savings or other synergies that may result from the acquisition. As noted above, the pro forma results of operations do not purport to be indicative of the actual results that would have been achieved by the combined company for the periods presented or that may be achieved by the combined company in the future.

The Company recognized approximately $576,000 of acquisition-related costs that were expensed in fiscal 2014. These acquisition costs are included in general and administrative expenses in the Consolidated Statements of Operations for fiscal 2014.