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BUSINESS ACQUISITIONS
 3 Months Ended
Jun. 25, 2016
Business Combinations [Abstract]  
BUSINESS ACQUISITIONS

NOTE 5 – BUSINESS ACQUISITIONS

On April 1, 2016, Transcat acquired substantially all of the assets of Excalibur Engineering, Inc. (“Excalibur”), a California-based provider of calibration services, new and used test equipment sales, and equipment rentals.

This transaction aligns with the Company’s acquisition strategy of targeting 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. In addition, Excalibur provides an established equipment rental and used equipment business, which are complimentary offerings to the Company’s traditional Distribution segment sales.

This transaction was accounted for using the acquisition method of accounting. Goodwill, calculated as the excess of the purchase price paid over the fair value of the underlying net assets of the businesses acquired, generally represents expected future economic benefits arising from the reputation of an acquired business, the assembled workforce, expected synergies and other assets acquired that could not be individually identified and separately recognized. Other intangible assets, namely customer bases and covenants not to compete, represent an allocation of a portion of the purchase price to identifiable intangible assets of the acquired businesses. Of the goodwill and other intangible assets relating to the Excalibur acquisition, $2.8 million was allocated to the Service segment and $2.8 million was allocated to the Distribution segment, based on quantitative and qualitative factors. Excluding goodwill, intangible assets are being amortized for financial reporting purposes on an accelerated basis over an estimated useful life of up to 10 years. Amortization of goodwill related to the Excalibur acquisition is expected to be deductible for tax purposes.

The total purchase price paid for the business acquired was approximately $7.6 million, net of cash acquired. The following is a summary of the preliminary purchase price allocation, in the aggregate, to the fair value, based on Level 3 inputs, of assets and liabilities acquired:

       Goodwill $      3,440
       Intangible Assets – Customer Base 1,990
       Intangible Assets – Covenant Not to Compete 100
5,530
       Plus:        Current Assets 1,016
Non-Current Assets 1,651
       Less: Current Liabilities (583 )
Total Purchase Price $ 7,614

During each of the first quarters of fiscal years 2017 and 2016, acquisition costs of less than $0.1 million were recorded as incurred as administrative expenses in the Consolidated Statements of Income.

Certain of the Company’s acquisition agreements have included provisions for contingent consideration and other holdback amounts. The Company accrues for contingent consideration and holdback provisions based on their estimated fair value at the date of acquisition. As of June 25, 2016, $0.8 million of contingent consideration and $2.3 million of other holdback amounts were unpaid and reflected in current liabilities on the Consolidated Balance Sheet. As of March 26, 2016, $0.8 million of contingent consideration and $1.6 million of other holdback amounts were unpaid and reflected in current liabilities on the Consolidated Balance Sheet. Included in the other holdback amounts at June 25, 2016 is $0.7 million related to the acquisition of Excalibur. No contingent consideration or holdback amounts were paid during the first quarter of fiscal year 2017.

The results of the acquired businesses are included in Transcat’s consolidated operating results as of the dates the businesses were acquired. The following unaudited pro forma information presents the Company’s results of operations as if the acquisitions made during fiscal years 2016 and 2017 had occurred at the beginning of the respective fiscal years. The pro forma results do not purport to represent what the Company’s results of operations actually would have been if the transactions had occurred at the beginning of each period presented or what the Company’s operating results will be in future periods.

(Unaudited)
First Quarter Ended
June 25, 2016       June 27, 2015
Total Revenue $ 33,300 $ 35,236
Net Income 834 1,119
Basic Earnings Per Share 0.12 0.16
Diluted Earnings Per Share 0.12 0.16