Business Acquisitions

12 Months Ended

Dec. 31, 2022

2022 Acquisitions

The Company completed five acquisitions during 2022. The aggregate purchase price of the acquisitions was $14,220, including $5,882 in cash, $1,606 of promissory notes, $433 of the Company's common stock, and potential earn-outs of up to $15,850 payable in cash and common stock, which were recorded at an estimated fair value of $6,299. An option-based model was used to determine the fair value of the earn-outs, which is a generally accepted valuation technique that embodies all significant assumption types. In order to determine the fair values of tangible and intangible assets acquired and liabilities assumed, the Company engaged an independent third-party valuation specialist to assist in the determination of fair values. The final determination of the fair value of assets and liabilities will be completed within the one-year measurement period as required by ASC 805. The 2022 acquisitions will necessitate the use of this measurement period to adequately analyze and assess the factors used in establishing the asset and liability fair values as of the relevant acquisition date, including intangible assets, accounts receivable, certain fixed assets, and the fair value of the earn-outs.

In late 2022, the Company entered into a definitive agreement to acquire the Visual Information Solutions commercial geospatial technology and software business from L3Harris.

2021 Acquisitions

The Company completed eight acquisitions during 2021. The aggregate purchase price of the acquisitions was $100,449, including $69,501 of cash, $19,028 of promissory notes, $6,787 of the Company's common stock, and potential earn-outs of up to $25,700 payable in cash and stock, which were recorded at an estimated fair value of $5,133. An option-based model was used to determine the fair value of the earn-outs, which is a generally accepted valuation technique that embodies all significant assumption types. In order to determine the fair values of tangible and intangible assets acquired and liabilities assumed, the Company engaged an independent third-party valuation specialist to assist in the determination of fair values. The final determination of the fair value of assets and liabilities was completed within the one-year measurement period as required by ASC 805. Purchase price allocation adjustments recorded during 2022 were immaterial.

2020 Acquisitions

The Company completed one acquisition during 2020. The aggregate purchase price was $1,949, including $882 of cash, $500 in promissory note, $312 of the Company's common stock, and $255 in additional contingent payments. In order to determine the fair values of tangible and intangible assets acquired and liabilities assumed the Company performed a fair value assessment.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition dates for acquisitions closed during fiscal years 2022, 2021, and 2020:


	2022		2021		2020
	Total		Total		Total
Cash	$	—	$	1,480	$	—
Billed and unbilled receivables, net	1,807		17,728		1,439
Right-of-use assets	632		2,932		—
Property and equipment	1,510		3,741		28
Prepaid expenses	—		519		33
Other assets	—		13		28
Intangible assets:
Customer relationships	3,612		36,338		237
Trade name	268		2,098		30
Customer backlog	460		3,847		56

Other	281		4,456		5
Total Assets	$	8,570	$	73,152	$	1,856
Liabilities	(5,623)		(13,984)		(345)
Deferred tax liabilities	—		(4,521)		(86)
Net assets acquired	$	2,947	$	54,647	$	1,425

Consideration paid (Cash, notes and/or stock)	$	7,921	$	95,316	$	1,694
Contingent earn-out liability (Cash and stock)	6,299		5,133		255
Total Consideration	$	14,220	$	100,449	$	1,949
Excess consideration over the amounts assigned to the net assets acquired (Goodwill)	$	11,273	$	45,802	$	524

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. See Note 9, Goodwill and Intangible Assets, for further information on fair value adjustments to goodwill and identified intangible assets.

The consolidated financial statements of the Company include the results of operations from any business acquired from their respective dates of acquisition. The following table presents the results of operations of businesses acquired from their respective dates of acquisition for fiscal years 2022, 2021, and 2020.


	2022		2021		2020
Gross revenues	$	5,211	$	29,965	$	851
Income before income taxes	$	985	$	5,167	$	31

General and administrative expense for fiscal years 2022, 2021, and 2020 includes $2,639, $3,274, and $856, 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 fiscal years 2022, 2021, and 2020 as if the 2022 acquisitions had occurred at the beginning of fiscal year 2021 and the 2021 acquisitions had occurred at the beginning of fiscal year 2020. The pro forma information provided below is compiled from the pre-acquisition financial information and includes pro forma adjustments for amortization expense, adjustments to certain expenses, and the income tax impact of these adjustments. These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the

Company would have been if the acquisitions and related financing transactions had occurred on the date assumed, nor are they indicative of future results of operations.


	Fiscal Years Ended
	2022		2021		2020
Gross revenues	$	789,934	$	765,632	$	720,039
Net income	$	50,071	$	49,769	$	22,774
Basic earnings per share	$	3.39	$	3.50	$	1.83
Diluted earnings per share	$	3.28	$	3.38	$	1.78

Adjustments were made to the pro forma results to adjust amortization of intangible assets to reflect fair value of identified assets acquired, to record the effects of promissory notes issued, and to record the income tax effect of these adjustments.