Note 4 - Business Acquisitions

3 Months Ended

Apr. 01, 2017

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note

4

– Business Acquisitions

On

February

1,

2016,

the Company acquired Sebesta, Inc. (“Sebesta”), a St. Paul, Minnesota-based mechanical, electrical and plumbing (“MEP”) engineering and energy management company. Primary clients include federal and state governments, power and utility companies, and major educational, healthcare, industrial and commercial property owners throughout the United States. The purchase price of this acquisition was

$14,000

paid from cash on hand. This acquisition expanded the Company’s MEP engineering and energy and allows the Company to offer these services on a broader scale within its existing network. In addition, this acquisition strengthens the Company’s geographic diversification and allows the Company to continue expanding its national footprint.

During the

three

months ended

April

1,

2017,

the Company did not close on any acquisitions. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date for the acquisitions closed during

2016:

	December 31,
	2016
Cash	$	128
Accounts receivable		20,221
Property and equipment		4,301
Prepaid expenses		1,336
Other assets		841
Intangible assets:
Customer relationships		26,188
Trade name		1,922
Customer backlog		3,898
Non-compete		1,259
Favorable (unfavorable) lease		(225	)
Total Assets		59,869
Liabilities		(12,250	)
Deferred tax liabilities		(7,892	)
Net assets acquired		39,727
Consideration paid (Cash, Notes and/or stock)		76,011
Contingent earn-out liability (Cash and stock)		1,417
Total Consideration		77,428
Excess consideration over the amounts assigned to the net assets acquired (Goodwill)	$	37,701

Goodwill was recorded based on the amount by which the purchase price exceeded the fair value of the net assets acquired and the amount is attributable to the reputation of the business acquired, the workforce in place and the synergies to be achieved from these acquisitions. Goodwill acquired of

$0

and

$6,014

during the

three

month ended

April

1,

2017

and

March

31,

2016,

respectively, was assigned to the BES reportable segment. Goodwill of approximately

$0

and

$6,014

from acquisitions during the

three

months ended

April

1,

2017

and

March

31,

2016,

respectively, are expected to be deductible for income tax purposes.  

The consolidated financial statements of the Company for the

three

months ended

April

1,

2017

and

March

31,

2016

include the results of operations from any business acquired. For the

three

months ended

April

1,

2017

and

March

31,

2016,

the results include gross revenues of

$0

and

$5,455,

respectively, and pre-tax income of approximately

$0

and

$431,

respectively. Included in general and administrative expense for the

three

months ended

April

1,

2017

and

March

31,

2016

is

$138

and

$194,

respectively, of acquisition-related costs pertaining to the Company’s acquisition activities.

The following table presents the unaudited, pro forma consolidated results of operations (in thousands, except per share amounts) for the

three

months ended

March

31,

2016

as if the Sebesta acquisition had occurred as of

January

1,

2016.

The pro forma information provided below is compiled from the financial statements of Sebesta and includes pro forma adjustments for amortization expense, reduction in certain expenses and the income tax impact of these adjustments. The pro forma results are not necessarily indicative of (i) the results of operations that would have occurred had the Sebesta operations actually been acquired on

January

1,

2016;

or (ii) future results of operations:

	Three Months Ended
	March 31,
	2016
Gross revenues	$	47,190
Net income	$	2,040
Basic earnings per share	$	0.26
Diluted earnings per share	$	0.25