Goodwill and Other Intangible Assets

3 Months Ended

Sep. 27, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

As of September 27, 2013, the Company had $30,977 of goodwill, and the Company does not believe there were any events or changes in circumstances since the last goodwill assessment on April 26, 2013 that would indicate the fair value of goodwill was more-likely-than-not reduced to below its carrying value. Accordingly, goodwill was not tested for impairment during the current fiscal quarter.

On July 22, 2013, the Company acquired all of the outstanding stock of Utility Support Systems, Inc. (“USS”), headquartered in Douglasville, Georgia. USS provides professional engineering services primarily supporting the power/utility market. The initial purchase price of approximately $5,027 consisted of cash of $2,500 payable at closing, a second cash payment of $1,803 payable on the one-year anniversary of the closing date subject to withholding for various contractual issues, and 34 shares of the Company's common stock valued at $295 on the closing date. The selling shareholders are also entitled to contingent cash consideration through an earn-out provision based on net service revenue performance of the acquired firm over the twelve month period following closing. The Company estimated the fair value of the contingent earn-out liability to be $504 based on the projections and probabilities of reaching the performance goals through July 2014. Goodwill of $2,180, none of which is expected to be tax deductible, and other intangible assets of $2,056 were recorded as a result of this acquisition. The goodwill is primarily attributable to the synergies and ancillary growth opportunities expected to arise after the acquisition. The estimated fair values of assets and liabilities of the USS acquisition have been recorded in the Energy operating segment and are included in the unaudited balance sheet based on a preliminary allocation of the purchase price. These allocations will be finalized as soon as the remaining information becomes available and working capital adjustments are completed, which will be within one year from the acquisition date. The impact of this acquisition was not material to the Company's condensed consolidated balance sheets and results of operations.

The changes in the carrying amount of goodwill for the three months ended September 27, 2013 by operating segment are as follows:



	Gross									Gross
	Balance,		Accumulated			Balance,				Balance,		Accumulated			Balance,
	July 1,		Impairment			July 1,		Additions /		September 27,		Impairment			September 27,
Operating Segment	2013		Losses			2013		Adjustments		2013		Losses			2013
Energy	$	24,954	$	(14,506	)	$	10,448	$	2,180	$	27,134	$	(14,506	)	$	12,628
Environmental	36,214		(17,865		)	18,349		$	—	36,214		(17,865		)	18,349
Infrastructure	7,224		(7,224		)	—		$	—	7,224		(7,224		)	—
	$	68,392	$	(39,595	)	$	28,797	$	2,180	$	70,572	$	(39,595	)	$	30,977

Other Intangible Assets

Identifiable intangible assets as of September 27, 2013 and June 30, 2013 are included in other assets on the condensed consolidated balance sheets and were comprised of:



	September 27, 2013							June 30, 2013
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
Identifiable intangible assets	Amount		Amortization			Amount		Amount		Amortization			Amount
With determinable lives:
Customer relationships	$	11,373	$	(2,326	)	$	9,047	$	9,349	$	(1,711	)	$	7,638
Contract backlog	31		(10		)	21		259		(194		)	65
	11,404		(2,336		)	9,068		9,608		(1,905		)	7,703
With indefinite lives:
Engineering licenses	426		—			426		426		—			426
	$	11,830	$	(2,336	)	$	9,494	$	10,034	$	(1,905	)	$	8,129

Identifiable intangible assets with determinable lives are being amortized over a weighted-average period of approximately 6 years. The weighted-average periods of amortization by intangible asset class is approximately 7 years for client relationship assets and 6 months for contract backlog. The amortization of intangible assets for the three months ended September 27, 2013 and September 28, 2012 was $691 and $230, respectively.

Estimated amortization expense of intangible assets for the remainder of fiscal year 2014 and succeeding fiscal years is as follows:



Fiscal Year		Amount
2014		$	2,054
2015		2,331
2016		1,843
2017		1,429
2018		993
2019 and thereafter		418
	Total	$	9,068

On an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired, the fair value of the indefinite-lived intangible assets is evaluated by the Company to determine if an impairment charge is required. There were no events or changes in circumstances that would indicate the fair value of intangible assets was reduced to below its carrying value during the three months ended September 27, 2013, and therefore intangible assets were not tested for impairment.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References+ Details