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Acquisitions (Notes)
 9 Months Ended
Mar. 31, 2014
Business Combinations [Abstract]  
Acquisitions
Note 2 – Acquisitions
Purchase of Kvaerner North American Construction
Effective as of December 21, 2013, the Company acquired 100% of the stock and voting rights of Kvaerner North American Construction Ltd. and substantially all of the assets of Kvaerner North American Construction Inc,. together referenced as "KNAC". The businesses are now known as Matrix North American Construction Ltd. and Matrix North American Construction, Inc., together referenced as "Matrix NAC". Matrix NAC is a premier provider of maintenance and capital construction services to power generation, integrated iron and steel, and industrial process facilities. The acquisition significantly expands the Company's presence in the Electrical Infrastructure and Industrial Segments, and to a lesser extent, the Oil Gas and Chemical segment.
The Company purchased KNAC for $88.1 million. The acquisition was funded through a combination of cash-on-hand and borrowings under our senior revolving credit facility. The purchase price was allocated to the major categories of assets and liabilities based on their estimated fair value at the acquisition date. The following table summarizes the preliminary purchase price allocation (in thousands):
Current assets
$
84,404

Property, plant and equipment
11,377

Goodwill
36,176

Other intangible assets
24,009

Total assets acquired
155,966

Current liabilities
66,790

Deferred income taxes
423

Noncontrolling interest of consolidated joint venture
700

Net assets acquired
88,053

Cash acquired
36,655

Net purchase price
$
51,398


Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and intangible assets. This acquisition generated $36.2 million of goodwill, of which $28.5 million is tax deductible.
The equity in consolidated joint venture represents the acquired equity in KVPB Power Partners. KV Power Partners was subsequently renamed to MXPB Power Partners (the "Joint Venture"). The Joint Venture was formed by Kvaerner North American Construction Inc. and an engineering firm to engineer and construct a combined cycle power plant in Dover, Delaware. The Company now holds a 65% voting and economic interest in the Joint Venture. The total acquired equity of the Joint Venture was $2.0 million of which the Company's portion is approximately $1.3 million and the other party owns a non-controlling interest of $0.7 million. At March 31, 2014, the noncontrolling interest holder's share of the equity of the Joint Venture totaled $1.1 million.
For the nine months ended March 31, 2014 Matrix NAC revenues of $69.4 million and operating income of $0.4 million are included in the Company's results. For the three months ended March 31, 2014 Martrix NAC revenues of $64.0 million and operating income of $0.4 million are included in the Company's results. In addition, the Company incurred approximately $2.0 million of expenses related to the acquisition in the second quarter of fiscal 2014; therefore, such expenses are included in our results as selling, general and administrative costs for the nine months ended March 31, 2014.
The unaudited financial information in the table below summarizes the combined results of operations of Matrix Service Company and Matrix NAC for the three and nine months ended March 31, 2014 and March 31, 2013, on a pro forma basis, as though the companies had been combined as of July 1, 2012. The pro forma earnings for the three months ended March 31, 2013 were adjusted to include amortization expense of $1.0 million and depreciation expense of $0.6 million. The pro forma earnings for the nine months ended March 31, 2014 and 2013 were adjusted to include incremental intangible amortization expense of $2.1 million and $3.1 million, respectively and depreciation expenses of $1.2 million and $1.7 million, respectively. Additionally, $0.6 million of income from a one-time KNAC tax settlement and $2.0 million of acquisition-related expenses were removed from the nine month period ending March 31, 2014. The $2.0 million of acquisition-related expenses were included in the nine month period ending March 31, 2013 as if the acquisition occurred at July 1, 2012. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at July 1, 2012 nor should it be taken as indicative of our future consolidated results of operations.
 
Three Months Ended
 
Nine Months Ended
 
March 31,
2014
 
March 31,
2013
 
March 31,
2014
 
March 31,
2013
 
(In thousands, except per share data)
Revenues
n/a (1)
 
$
268,711

 
$
1,053,348

 
$
807,288

Net income attributable to Matrix Service Company
n/a (1)
 
$
7,911

 
$
31,230

 
$
17,192

Basic earnings per common share
n/a (1)
 
$
0.30

 
$
1.19

 
$
0.66

Diluted earnings per common share
n/a (1)
 
$
0.30

 
$
1.16

 
$
0.65


(1)    These amounts are presented in the unaudited Condensed Consolidated Statement of Income for the quarter ended March 31, 2014
Purchase of Pelichem Industrial Cleaning Services, LLC
On December 31, 2012, the Company acquired substantially all of the assets of Pelichem Industrial Cleaning Services, LLC (“Pelichem”). Pelichem is an industrial cleaning company based in Reserve, Louisiana that performs hydroblasting, vacuum services, chemical cleaning and industrial services. Pelichem's operating results are included in the Oil Gas & Chemical Segment.
The previously issued March 31, 2013 financial statements contained certain provisional amounts that were recorded on the preliminary information that was available at the time they were issued. The provisional amounts have been retroactively adjusted in the March 31, 2013 financial statements contained in this Quarterly Report on Form 10-Q. As a result, certain reclassification adjustments to the nine months ended March 31, 2013 Condensed Consolidated Statement of Cash Flows were recorded.
The purchase price was allocated to the major categories of assets and liabilities based on their estimated fair value at the acquisition date. The following table summarizes the final purchase price allocation:
Current assets
$
1,112

Property, plant and equipment
4,299

Tax deductible goodwill
2,247

Other intangible assets
1,853

Total assets acquired
9,511

Current liabilities
117

Net assets acquired
$
9,394


The operating data related to this acquisition was not material. The acquisition was funded with cash on hand.