Goodwill and Intangible Assets

6 Months Ended

Jun. 27, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

As discussed in Note 14, Reportable Segments, the Company's chief operating decision maker ("CODM"), re-evaluated the structure of the Company's internal organization as a result of the 2019 acquisition of QSI, which resulted in certain changes to the Company's operating and reportable segments. Effective the beginning of fiscal year 2020, the goodwill of QSI was reallocated from the Company's INF reportable segment to the Company's new GEO reportable segment. The changes in the carrying value by reportable segment for the six months ended June 27, 2020 were as follows:



	Six Months Ended
	December 28, 2019		Adjustments			June 27, 2020
INF	$	231,255	$	(144,408	)	$	86,847
BTS	77,961		449			78,410
GEO	—		177,913			177,913
Total	$	309,216	$	33,954		$	343,170

Goodwill of approximately $5,712 from acquisitions during the six months ended June 29, 2019 is expected to be deductible for income tax purposes. During the six months ended June 27, 2020, the Company recorded purchase price allocation adjustments of $32,553, $527, $420, and $30 that increased goodwill for the acquisitions of QSI, WHP, The Sextant Group, and Alta, respectively, and a working capital adjustment of $424 for QSI which was recorded as an increase to goodwill and the purchase price paid for the acquisition. The $32,553 increase to goodwill related to the QSI acquisition included a decrease to the fair value of the trade name of $54,313, which was partially offset by increases to the fair value of customer relationships, customer backlog, and property and equipment of $6,543, $801, and $2,520, respectively, and a decrease to deferred tax liabilities of $11,896.

Intangible Assets

Intangible assets, net, as of June 27, 2020 and December 28, 2019 consist of the following:



	June 27, 2020							December 28, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Amount		Gross Carrying Amount		Accumulated Amortization			Net Amount
Finite-lived intangible assets:
Customer relationships⁽¹⁾	$	182,631	$	(37,865	)	$	144,766	$	176,088	$	(29,198	)	$	146,890
Trade name⁽²⁾	14,486		(10,446		)	4,040		10,253		(8,593		)	1,660
Customer backlog⁽³⁾	24,999		(16,442		)	8,557		24,198		(12,435		)	11,763
Non-compete⁽⁴⁾	9,369		(6,077		)	3,292		9,369		(5,105		)	4,264
Developed technology⁽⁵⁾	32,944		(2,473		)	30,471		32,944		$	(106	)	$	32,838
Total finite-lived intangible assets	264,429		(73,303		)	191,126		252,851		(55,436		)	197,415
Indefinite-lived intangible assets:
QSI trade name	—		—			—		58,546		—			58,546
Total indefinite-lived intangible assets	—		—			—		58,546		—			58,546
Total intangible assets	$	264,429	$	(73,303	)	$	191,126	$	311,397	$	(55,436	)	$	255,961

⁽¹⁾Amortized on a straight-line basis over estimated lives (1 to 12 years)

⁽²⁾Amortized on a straight-line basis over their estimated lives (1 to 3 years)

⁽³⁾Amortized on a straight-line basis over their estimated lives (1 to 5 years)

⁽⁴⁾Amortized on a straight-line basis over their contractual lives (2 to 5 years)

⁽⁵⁾Amortized on a straight-line basis over their estimated lives (5 to 7 years)

During the six months ended June 27, 2020, the Company adjusted the QSI purchase price allocation reported at December 28, 2019 to account for updates to assumptions and estimates related to the fair value of the trade name, customer relationships, and customer backlog. As a result, the Company determined the QSI trade name is a finite-lived asset that will be amortized over a two-year period and the fair value was decreased by $54,313. Additionally, the fair value of customer relationships and customer backlog increased $6,543 and $801, respectively. These changes resulted in a corresponding adjustment to deferred tax liabilities of $11,896. If the adjustments had been recognized as of the acquisition date the Company would have recognized incremental amortization expense of $790 during the three months ended March 28, 2020. Amortization expense was $9,512 and $17,851 for the three and six months ended June 27, 2020, respectively, and $5,083 and $10,083 for the three and six months ended June 29, 2019, respectively.