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Business Acquisitions
 6 Months Ended
Jun. 29, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Business Acquisitions Business Acquisitions
2024 Acquisitions
The Company has completed five acquisitions during 2024. The aggregate purchase price for the five acquisitions was $64,300, including $56,427 in cash, $3,534 of the Company's common stock, and potential earn-outs of up to $14,100 payable in cash, which have been recorded at an estimated fair value of $4,339. The cash portions of the purchase prices and other related costs associated with the transactions were partially financed through the Company's amended and restated credit agreement (the "Second A&R Credit Agreement" or "Senior Credit Facility") with Bank of America, N.A. and other lenders party thereto. See Note 10, Notes Payable and Other Obligations, for further detail on the Second A&R Credit Agreement. An option-based model and a probability-weighted approach were used to determine the fair value of the earn-outs, which are generally accepted valuation techniques that embody 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 values of assets and liabilities will be completed within the one-year measurement period as required by ASC 805. The 2024 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, prepaid expenses, deferred tax liabilities, and other certain liabilities.
2023 Acquisitions
On April 6, 2023, the Company acquired all of the outstanding equity interests in the Visual Information Solutions commercial geospatial technology and software business ("VIS") from L3Harris. VIS is a provider of subscription-based software solutions for the analysis and management of software applications and Analytics as a Service (AaaS) solutions. The Company acquired VIS for a cash purchase price of $75,371. The purchase price and other related costs associated with the transaction were financed through the Company's Second A&R Credit Agreement. 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.
On February 22, 2023, the Company acquired all of the outstanding equity interests in Continental Mapping Acquisition Corp. and its subsidiaries, including Axim Geospatial, LLC (collectively "Axim"), a provider of comprehensive geospatial services and solutions addressing critical mission requirements for customers across the defense and intelligence and state and local government sectors. The aggregate purchase price of the acquisition was $139,569, including $119,736 in cash, a $6,333 promissory note, and $13,500 of the Company's common stock. The cash portion of the purchase price and other related costs associated with the transaction were financed through the Company's Second A&R Credit Agreement. 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.
The Company completed five other acquisitions during 2023. The aggregate purchase price for the five acquisitions was $9,477, including $8,000 in cash, $867 of the Company's common stock, and a potential earn-out of up to $640 payable in cash, which has been recorded at an estimated fair value of $610. A probability-weighted approach was used to determine the fair value of the earn-out, which is a generally accepted valuation technique that embodies all significant assumption types. 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 2023 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, and deferred tax liabilities.
The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date for the acquisitions closed during the six months ended June 29, 2024 and the fiscal year ended December 30, 2023:
20242023
TotalVISAximOtherTotal
Cash$2,080 $7,027 $5,419 $1,316 $13,762 
Billed and unbilled receivables, net7,043 5,042 13,937 1,609 20,588 
Right-of-use assets2,583 2,162 1,643 552 4,357 
Property and equipment1,762 118 2,870 38 3,026 
Prepaid expenses1,093 1,503 1,180 17 2,700 
Other assets46 — 156 2 158 
Intangible assets:
Customer relationships28,761 35,626 53,518 2,526 91,670 
Trade name956 3,025 2,266 210 5,501 
Customer backlog4,300 894 3,862 943 5,699 
Developed technology— 4,024 2,185 — 6,209 
Non-compete2,756 26 580 254 860 
Total Assets$51,380 $59,447 $87,616 $7,467 $154,530 
Liabilities(5,995)(16,689)(13,668)(2,297)(32,654)
Deferred tax liabilities(131)(8,728)(12,428)(496)(21,652)
Net assets acquired$45,254 $34,030 $61,520 $4,674 $100,224 
Consideration paid (Cash, Notes and/or stock)$59,961 $75,371 $139,569 $8,867 $223,807 
Contingent earn-out liability (Cash and stock)4,339 — — 610 610 
Total Consideration$64,300 $75,371 $139,569 $9,477 $224,417 
Excess consideration over the amounts assigned to the net assets acquired (Goodwill)$19,046 $41,341 $78,049 $4,803 $124,193 
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 8, Goodwill and Intangible Assets, for further information on fair value adjustments to goodwill and identified intangibles.
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 the three and six months ended June 29, 2024 and July 1, 2023.
Three Months EndedSix Months Ended
June 29, 2024July 1, 2023June 29, 2024July 1, 2023
Gross revenues$10,975 $29,589 $16,613 $37,064 
Income before income taxes$3,572 $4,904 $5,648 $5,631 
General and administrative expenses for the three and six months ended June 29, 2024 and July 1, 2023 include acquisition-related costs pertaining to the Company's acquisition activities. Acquisition-related costs were not material to the Company's consolidated financial statements.
The following table presents the unaudited, pro forma consolidated results of operations (in thousands, except per share amounts) for the three and six months ended June 29, 2024 and July 1, 2023 as if the fiscal 2024 and 2023 acquisitions had occurred at the beginning of fiscal year 2023. The pro forma information provided below is compiled from pre-acquisition financial information and includes pro forma adjustments for amortization expense of intangible assets to reflect the fair value of identified assets acquired, to record the effects of financing from the Company's Senior Credit Facility, to record the effects of promissory notes issued, adjustments to other certain expenses, and to record 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 operations of these acquisitions actually been acquired at the beginning of fiscal year 2023 or (ii) future results of operations:
Three Months EndedSix Months Ended
June 29, 2024July 1, 2023June 29, 2024July 1, 2023
Gross revenues$236,824 $235,354 $456,677 $453,766 
Net income$8,015 $14,818 $9,292 $19,196 
Basic earnings per share$0.52 $0.98 $0.61 $1.28 
Diluted earnings per share$0.51 $0.96 $0.59 $1.24