Note 6 - Acquisitions

3 Months Ended

Mar. 30, 2013

Business Combination Disclosure [Text Block]

6.     Acquisitions

The Company has acquired numerous companies throughout its history and those acquisitions have generally included significant future contingent consideration.

Future Contingent Payments

As of March 30, 2013, the Company had two active acquisition agreements whereby additional contingent consideration may be earned: 1) the Company acquired certain assets of Project Solutions Group, Inc. (“PSG”) in 2009; and 2) effective July 1, 2012 the Company acquired certain assets of BGA, LLC (“BGA”) as more fully described below. The Company estimates future contingent payments for both acquisitions as follows:

Period Ending
December 28, 2013	$	228
January 3, 2015		253
January 2, 2016		269
December 31, 2016		307
Estimated future contingent consideration payments	$	1,057

Actual future contingent payments may materially differ from the estimates above. In the case of future payments to PSG, the Company believes that it is highly unlikely that any future payments will be made and therefore did not include any contingent payments in the above table. Future contingent payments to be made to BGA are capped at a maximum of $3.0 million cumulatively. The Company estimates future contingent consideration in payments based on forecasted performance and recorded the net preset value of those expected payments as of March 30, 2013. The measurement is based on significant inputs that are not observable in the market, which “Fair Value Measurements and Disclosures” (ASU Topic 820-10-35) refers to as Level 3 inputs.

During the thirteen week period ended March 30, 2013, the Company reduced its liability for contingent consideration by $92, which relates to its expectation for the PSG acquisition.  The reduction is reflected in other income.  The Company paid no consideration during the thirteen week period ended March 30, 2013 or the comparable prior year period.

BGA, LLC

Effective July 1, 2012, the Company purchased the operating assets of BGA. BGA provides comprehensive multidiscipline engineering solutions across numerous industry sectors including Power Generation (both Nuclear and Fossil), Energy Delivery, Energy Management, Architecture, Commercial Building and Manufacturing.  The Company believes that the BGA assembled workforce consists of highly trained and experienced engineers that will greatly assist RCM in executing future growth in revenues.  The business acquired in the BGA acquisition will operate as part of the Company’s Engineering segment.  The BGA purchase consideration consisted of the following:

Cash	$	1,292
Lease in excess of market, net present value		469
Contingent consideration, net present value		930
Total consideration	$	2,691

The acquisition has been accounted for under the purchase method of accounting. The total estimated purchase price has been allocated as follows:

Fixed assets	$	28
Restricted covenants		70
Customer relationships		180
Deferred tax asset		187
Goodwill		2,226
Total consideration	$	2,691

Fixed assets acquired were recorded at approximate market value. The value of restricted covenants and customer relationships were recorded based on the valuation of a third party firm. The primary item that generated goodwill was the acquisition of a highly skilled and trained assembled workforce of engineers that the Company anticipates may allow it to win contract awards from its current and future customer base that the Company would not otherwise win.

Pro Forma Results of Operations

The following (unaudited) results of operations have been prepared assuming the BGA acquisition had occurred as of the beginning of the thirteen week period ended March 31, 2012. Those results are not necessarily indicative of results of future operations or of results that would have occurred had the acquisition occurred as of the beginning of the periods presented.

	Proforma Results for the Thirteen Week Period Ended
	March 31, 2012
Revenues	$	39,314
Operating income	$	1,838
Diluted earnings per share	$	0.08