Note 6 - Acquisitions

12 Months Ended

Dec. 30, 2017

Notes to Financial Statements

Business Combination Disclosure [Text Block]

6.

ACQUISITIONS

The

purchase method of accounting in accordance with ASC

805,

Business Combination, was applied for all acquisitions. This requires the cost of an acquisition to be allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition with the excess cost accounted for as goodwill. Goodwill arising from the acquisitions is attributable to expected sales synergies from combining the operations of the acquired business with those of the Company.

Future Contingent Payments

As of

December 30, 2017,

the Company had

six

active acquisition agreements whereby additional contingent consideration

may

be earned by the former shareholders:

1

) effective

July 1, 2012

the Company acquired certain assets of BGA, LLC (“BGA”);

2

) effective

August 1, 2014

the Company acquired all of the stock of Point Comm, Inc. (“PCI”);

3

) effective

July 5, 2015,

the Company acquired certain assets of Substation Design Services, LLC (“SDS”);

4

) effective

December 31, 2016,

the Company acquired certain assets of Allied Health Professionals, LLC (“AHP”);

5

) effective

April 16, 2017

the Company acquired certain assets of R.A.F. Services, Inc. (“RAF”) and

6

) effective

October 1, 2017,

the Company acquired all of the stock of PSR Engineering Solutions

d.o.o. Beograd (Voždovac) (“PSR

”). The Company estimates future contingent payments at

December 30, 2017

as follows:

Fiscal Year	Total
December 29, 2018	$	741
December 28, 2019		625
January 2, 2021		725
Estimated future contingent consideration payments	$	2,091

Estimates of future contingent payments are subject to significant judgment and actual payments

may

materially differ from estimates.

Potential future contingent payments to be made to all active acquisitions are capped at cumulative maximum of

$4.1.

The Company estimates future contingent consideration in payments based on forecasted performance and recorded at the net present value of those expected payments as of

December 30, 2017.

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.

The Company paid $

1.7

million and

$1.0

million in contingent consideration for the

fifty-two

week periods ended

December 30, 2017

and

December 31, 2016,

respectively.

The changes in the liability for contingent consideration from acquisitions for the fi

fty-

two

week periods ended

December 30, 2017

and

December 31, 2016

are as follows:

Balance as of January 2, 2016	$	1,800
Contingent payments made		(993	)
Estimated contingent payments, acquisitions		139
Increase to contingent payment estimates		285
Balance as of December 31, 2016	$	1,231
Contingent payments made		(1,694	)
Estimated contingent payments, acquisitions		1,773
Increase to contingent payment estimates		781
Balance as of December 30, 2017	$	2,091

AHP

Effective

December 31, 2016,

the Company acquired the business operations of AHP. AHP was a Chicago area healthcare staffing company providing physical therapists, occupational therapists and speech language pathologists to hospitals, rehabilitation centers, schools and outpatient programs. The Company expects the AHP acquisition to complement its Chicago area operations which formerly provided primarily nurses to the Chicago Public School system. AHP will add new clients and expand the Company

’s service offerings in the Chicago area. The purchase price for AHP was

$695,

all of which was allocated to goodwill, payable as follows:

1

) cash of

$275

paid in

January 2017;

2

) an unsecured note payable of

$280

to be paid in quarterly installments through

October 2018;

and

3

) maximum contingent consideration of

$140

tied to certain gross profit targets and, if earned, payable in

2018.

RAF

Effective

April 16, 2017,

the Company acquired the business operations of RAF. RAF has been in business since

1991

as a multi-disciplined engineering and consulting and design company headquartered on Long Island. The firm has been providing Engineering, Design, Permitting, Inspection and Construction Management services to the utility, industrial, commercial, and property management industries. RAF specializes in turnkey above ground tank inspection, repair and cleaning services, as well as concrete, steel, masonry, and roofing routine maintenance inspection and design. The purchase price for RAF was

$133,

all of which was allocated to goodwill as follows:

1

) assumed liabilities of

$123;

and

2

) estimated contingent consideration of

$10

was paid in fiscal

2017.

PSR

Effective

October 1, 2017

the Company acquired all of the stock of PSR. PSR was established in Serbia in

2006

and specializes in the design and engineering associated with high voltage substations, design engineering for electrical equipment in power plants,

3D

modeling, commissioning, site supervision and other engineering services for clients in Europe, North America, South America and the Middle East. At the time of acquisition, PSR had a highly trained staff of approximately

30

engineers. PSR has acted as a subcontractor to the Company for over

three

years. The total purchase price of $

3,248

included cash at closing of

$1,000,

estimated contingent consideration of

$1,763

and

$485

due to seller upon realization of net working capital recorded at closing. As part of the working capital recorded at closing, the Company received cash of

$237.

The Company allocated

$58

to fixed assets and the balance to goodwill.