GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Apr. 30, 2012

NOTE 5 - GOODWILL AND INTANGIBLE ASSETS

Based on a combination of factors that occurred in the second quarter of fiscal 2011, including the operating results and the transition of the former management team in the Company’s Suisun City reporting unit, management concluded that an interim goodwill impairment triggering event had occurred, and accordingly performed a testing of the carrying value of goodwill for the Suisun City reporting unit. After this testing, management concluded that the carrying value of the Suisun City reporting unit exceeded the fair value of this reporting unit. The implied fair value of the goodwill of the Suisun City reporting unit was calculated by allocating the fair values of substantially all of its individual assets, liabilities and identified intangible assets as if Suisun City had been acquired in a business combination. As a result, the Company recorded a noncash goodwill impairment charge of $6.9 million for Suisun City.

As a result of its annual step one testing for goodwill impairment, the Company determined that, except for the carrying value of Pride, included within the Australia Operations reporting unit, the carrying value of all other reporting units exceeded their respective fair value, thus failing the first step of the goodwill impairment test. Accordingly, the Company performed the second step of the goodwill impairment analysis and determined the estimated fair value of the impaired reporting units’ goodwill using Level 3 measurement as defined in the ASC. The Level 3 measurements were based on significant inputs for each reporting unit not observable in the market. These measurements included a discounted cash flow valuation technique, using an estimated discount rate range of 15.5% to 17.3%, future short and long term revenue growth rates ranging from 0% to 3%, gross margins ranging from 10% to 35%, and selling general and administrative expenses ranging from 5% to 29% of revenue. As a result, the Company recorded estimated noncash goodwill impairment charges of $26,601,509 for the year ended April 30, 2011. The Company completed the second step of the goodwill impairment test in the second fiscal quarter of fiscal 2012, which included calculating an implied fair value of the goodwill of the reporting units, by allocating the fair values of substantially all of its individual assets, liabilities and identified intangible assets, as if the reporting units had been acquired in a business combination. The completion of this second step did not result in an adjustment to the goodwill impairment charge previously recorded in fiscal 2011.

The Company performed its annual step one goodwill impairment test for Pride as of April 30, 2012. Based on its testing, the Company determined that the Pride goodwill was not impaired.

Goodwill through the years ended April 30, 2012 and 2011 consisted of the following:

	Wireless			Specialty			Electrical
	Communication			Construction			Power			Total

Beginning balance, May 1, 2010	$	10,921,998		$	3,339,842		$	20,657,544		$	34,919,384

Goodwill impairment		(10,921,998	)		(3,339,842	)		(19,239,668	)		(33,501,508	)
Foreign currency translation adjustments		-			-			626,980			626,980
Ending balance, April 30, 2011		-			-			2,044,856			2,044,856

Foreign currency translation adjustments		-			-			(114,030	)		(114,030	)

Ending balance, April 30, 2012	$	-		$	-		$	1,930,826		$	1,930,826

Other intangible assets consist of the following at April 30:

	Estimated useful life		April 30,			April 30,
	(years)		2012			2011

Customer list		3-9	$	3,130,403		$	4,638,398
Less accumulated amortization				(2,579,895	)		(2,972,341	)
Less customer list impairments				(168,604	)		(868,777	)
				381,904			797,280

Contract backlog		1-3		1,034,787			1,174,332
Less accumulated amortization				(1,033,839	)		(1,168,441	)
				948			5,891

Totals			$	382,852		$	803,171

At April 30, 2012, the Company determined that the customer lists for the Hartford and Trenton reporting units were impaired due to projected future operating performance. Using a discounted cash flow valuation technique, the Company determined that the carrying value of these customer lists exceeded the fair value. As a result, the Company recorded an impairment charge of $168,604.

At April 30, 2011, the Company determined that the customer lists for certain of the Australia Operations, Portland, Sarasota and Suisun City reporting units were impaired due to projected future operating performance. Using a discounted cash flow valuation technique, the Company determined that the carrying value of these customer lists exceeded the fair value. As a result, the Company recorded an impairment charge of $868,776.

Amortization expense for other intangible assets for the years ended April 30, 2012 and 2011 was approximately $230,000 and $570,000, respectively.

There are no expected residual values related to these intangible assets. Estimated future amortization expense by fiscal year is as follows:

Year ending April 30,

2013	$	132,764
2014		83,048
2015		66,816
2016		66,816
2017		33,408
Total Intangible Assets	$	382,852

The weighted-average amortization period of the intangible assets is 3.8 years.

- 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