Note 9 - Acquisitions

12 Months Ended

Mar. 30, 2013

Business Combination Disclosure [Abstract]

Business Combination Disclosure [Text Block]

NOTE 9 – BUSINESS ACQUISITIONS

The Company has engaged in a number of business acquisitions.  During fiscal years 2013 and 2012, Transcat completed the following:

·   On January 25, 2013, the Company, through Transmation (Canada) Inc., acquired 7506155 Canada Inc. and its operating subsidiary, Cal-Matrix Metrology Inc. (collectively “Cal-Matrix”).  Cal-Matrix is a provider of commercial and accredited calibration and coordinate measurement inspection services to customers throughout Canada and has locations in Burlington, Ontario and Montreal, Quebec.

·   On July 16, 2012, the Company, through Anacor Acquisition, acquired substantially all of the assets of Anacor Compliance Services, Inc. (“Anacor”), a nationally recognized provider of specialized analytical, calibration, validation and remediation services to the life science sector.

·   On September 8, 2011, the Company acquired the calibration services division of Newark Corporation (“Newark”), a provider of calibration and repair services to customers located primarily in Arizona, Colorado and Tennessee.

·   On April 5, 2011, the Company acquired substantially all of the assets of CMC Instrument Services, Inc. (“CMC”), a Rochester, New York-based provider of dimensional calibration and repair services.

These transactions align with the Company’s acquisition strategy of targeting service businesses that expand the Company’s geographic reach and leverage its infrastructure while also increasing the depth and breadth of the Company’s service capabilities.

The acquisitions were accounted for using the acquisition method of accounting.  Goodwill represents the excess of the purchase price paid over the fair value of the underlying net assets of the businesses acquired.  Other intangible assets, namely customer base and covenants not to compete, represent an allocation of a portion of the purchase price to identifiable intangible assets of the acquired businesses.  Intangible assets are being amortized for financial reporting purposes on an accelerated basis over the estimated useful life of up to 10 years.  Goodwill and the intangible assets relating to the Anacor, Newark and CMC acquisitions are deductible for tax purposes.  Goodwill and the intangible assets relating to the Cal-Matrix acquisition are not deductible for tax purposes.

The total purchase price paid for the businesses acquired in fiscal year 2013 was approximately $7.0 million.  The following is a summary of the purchase price allocation, in the aggregate, for the businesses acquired in fiscal year 2013:

Goodwill		$	4,234
Intangible Assets – Customer Base			1,493
Intangible Assets – Covenants Not to Compete			569
Deferred Tax Liability			(375	)
			5,921
Plus:	Current Assets		1,184
	Non-Current Assets		331
Less:	Current Liabilities		(407	)
Total Purchase Price		$	7,029

The total purchase price paid for the businesses acquired in fiscal year 2012 was approximately $3.1 million, with $1.7 million and $1.2 million allocated to goodwill and intangible assets, respectively.  Acquisition costs of $0.4 million in fiscal year 2013 and $0.2 million in fiscal year 2012 were recorded as incurred as an administrative expense in the Consolidated Statement of Operations.

The results of operations of the acquired businesses are included in Transcat’s consolidated operating results as of the date the businesses were acquired.  The following unaudited pro forma information presents the Company’s results of operations as if the business acquisitions completed in fiscal year 2013 had occurred at the beginning of each period presented.  The unaudited pro forma information does not include the business acquisitions completed in fiscal year 2012 as the impact of those acquisitions was not considered significant.  The pro forma results do not purport to represent what the Company’s results of operations actually would have been if the transactions set forth had occurred on the date indicated or what the Company’s results of operations will be in future periods.

	(Unaudited)
	FY 2013		FY 2012
Total Revenue	$	115,708	$	115,783
Net Income	$	4,382	$	3,996
Basic Earnings Per Share	$	0.59	$	0.55
Diluted Earnings Per Share	$	0.58	$	0.52

In connection with certain business acquisitions consummated prior to fiscal year 2012, the Company entered into earn out agreements with the former owners of the acquired businesses.  These agreements entitled the former owners to receive earn out payments subject to continued employment and certain post-closing financial targets, as defined in the agreements.  Payments earned and recorded as compensation expense in the Consolidated Statements of Operations totaled $0.1 million in fiscal year 2013 and $0.2 million in fiscal year 2012.  There was no unpaid earn out consideration as of March 30, 2013.

Certain of the Company’s business acquisitions contain holdback provisions, as defined in the respective purchase agreements.  The Company accrues contingent consideration relating to the holdback provisions based on their estimated fair value as of the date of acquisition.  The Company paid less than $0.1 million in contingent consideration in each of the fiscal years 2013 and 2012.  There was no unpaid contingent consideration as of March 30, 2013.