Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Sep. 30, 2013 | Nov. 05, 2013 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Trading Symbol | 'GCOM | ' |
Entity Registrant Name | 'GLOBECOMM SYSTEMS INC. | ' |
Entity Central Index Key | '0001031028 | ' |
Current Fiscal Year End Date | '--06-30 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 23,914,772 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $90,986 | $87,286 |
Accounts receivable, net | 49,701 | 58,426 |
Inventories | 20,858 | 17,076 |
Prepaid expenses and other current assets | 5,577 | 4,056 |
Deferred income taxes | 4,254 | 4,309 |
Total current assets | 171,376 | 171,153 |
Fixed assets, net | 50,089 | 50,367 |
Goodwill | 72,474 | 68,818 |
Intangibles, net | 17,169 | 16,576 |
Other assets | 1,517 | 1,327 |
Total assets | 312,625 | 308,241 |
Current liabilities: | ' | ' |
Accounts payable | 21,328 | 21,943 |
Deferred revenues | 6,367 | 4,269 |
Accrued payroll and related fringe benefits | 4,477 | 3,264 |
Other accrued expenses | 7,181 | 7,243 |
Current portion of long-term debt | 6,100 | 6,100 |
Total current liabilities | 45,453 | 42,819 |
Other liabilities | 111 | 111 |
Long term debt | 6,950 | 8,475 |
Deferred income taxes | 12,383 | 12,383 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Series A Junior Participating, shares authorized, issued and outstanding: none at September 30, 2013 and June 30, 2013 | ' | ' |
Common stock, $.001 par value, 50,000,000 shares authorized, shares issued: 24,375,973 at September 30, 2013 and 24,182,935 at June 30, 2013 | 24 | 24 |
Additional paid-in capital | 217,037 | 214,735 |
Retained earnings | 33,599 | 33,444 |
Treasury stock, at cost, 465,351 shares at September 30, 2013 and June 30, 2013 | -2,781 | -2,781 |
Accumulated other comprehensive loss | -151 | -969 |
Total stockholders' equity | 247,728 | 244,453 |
Total liabilities and stockholders' equity | $312,625 | $308,241 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
Statement Of Financial Position [Abstract] | ' | ' |
Series A Junior Participating, shares authorized | ' | ' |
Series A Junior Participating, issued | ' | ' |
Series A Junior Participating, outstanding | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock shares, authorized | 50,000,000 | 50,000,000 |
Common stock shares, issued | 24,375,973 | 24,182,935 |
Treasury stock, shares | 465,351 | 465,351 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Income Statement [Abstract] | ' | ' |
Revenues from services | $44,920 | $47,172 |
Revenues from infrastructure solutions | 12,342 | 33,991 |
Total revenues | 57,262 | 81,163 |
Costs and operating expenses: | ' | ' |
Costs from services | 31,378 | 32,004 |
Costs from infrastructure solutions | 10,838 | 32,072 |
Selling and marketing | 4,453 | 4,288 |
Research and development | 1,012 | 953 |
General and administrative | 9,351 | 7,695 |
Total costs and operating expenses | 57,032 | 77,012 |
Income from operations | 230 | 4,151 |
Interest income | 96 | 85 |
Interest expense | -77 | -114 |
Income before income taxes | 249 | 4,122 |
Provision for income taxes | 94 | 1,446 |
Net income | $155 | $2,676 |
Basic net income per common share | $0.01 | $0.12 |
Diluted net income per common share | $0.01 | $0.12 |
Weighted-average shares used in the calculation of basic net income per common share | 23,199 | 22,425 |
Weighted-average shares used in the calculation of diluted net income per common share | 23,589 | 22,859 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Statement Of Income And Comprehensive Income [Abstract] | ' | ' |
Net income | $155,000 | $2,676,000 |
Other comprehensive income, net of tax: | ' | ' |
Foreign currency translation | 818,000 | 394,000 |
Comprehensive income | $973,000 | $3,070,000 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Stockholders' Equity (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive (Loss) Income [Member] | Treasury Stock [Member] |
In Thousands | ||||||
Beginning balance at Jun. 30, 2013 | $244,453 | $24 | $214,735 | $33,444 | ($969) | ($2,781) |
Beginning balance, Shares at Jun. 30, 2013 | ' | 24,183 | ' | ' | ' | 465 |
Proceeds from exercise of stock options | 415 | ' | 415 | ' | ' | ' |
Proceeds from exercise of stock options, Shares | ' | 91 | ' | ' | ' | ' |
Proceeds from exercise of warrants | 1,055 | ' | 1,055 | ' | ' | ' |
Proceeds from exercise of warrants, Shares | ' | 105 | ' | ' | ' | ' |
Stock compensation expense | 832 | ' | 832 | ' | ' | ' |
Grant (cancellation) of restricted shares | ' | -3 | ' | ' | ' | ' |
Net income | 155 | ' | ' | 155 | ' | ' |
Foreign currency translation | 818 | ' | ' | ' | 818 | ' |
Ending balance at Sep. 30, 2013 | $247,728 | $24 | $217,037 | $33,599 | ($151) | ($2,781) |
Ending balance, Shares at Sep. 30, 2013 | ' | 24,376 | ' | ' | ' | 465 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Operating Activities: | ' | ' |
Net income | $155 | $2,676 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 3,225 | 2,973 |
Provision for doubtful accounts | 89 | -20 |
Deferred income taxes | 55 | 1,408 |
Stock compensation expense | 832 | 869 |
Changes in operating assets and liabilities (net of impact of acquisition): | ' | ' |
Accounts receivable | 8,468 | -112 |
Inventories | -3,777 | -756 |
Prepaid expenses and other current assets | -1,486 | -184 |
Other assets | -166 | 9 |
Accounts payable | -721 | 8 |
Deferred revenues | 1,800 | 1,376 |
Accrued payroll and related fringe benefits | 1,205 | -1,261 |
Other accrued expenses | -62 | -198 |
Other liabilities | ' | -66 |
Net cash provided by operating activities | 9,617 | 6,722 |
Investing Activities: | ' | ' |
Purchases of fixed assets | -2,090 | -2,821 |
Acquisition of business | -3,793 | ' |
Cash payments for earn-out | ' | -4,700 |
Net cash used in investing activities | -5,883 | -7,521 |
Financing Activities: | ' | ' |
Proceeds from exercise of stock options | 415 | 116 |
Proceeds from exercise of warrants | 1,055 | ' |
Repayments of debt | -1,525 | -1,525 |
Net cash used in financing activities | -55 | -1,409 |
Effect of foreign currency translation on cash and cash equivalents | 21 | 21 |
Net increase (decrease) in cash and cash equivalents | 3,700 | -2,187 |
Cash and cash equivalents at beginning of period | 87,286 | 72,196 |
Cash and cash equivalents at end of period | 90,986 | 70,009 |
Supplemental Disclosure of Cash Flow Information | ' | ' |
Cash paid for interest | 78 | 117 |
Cash paid for income taxes | $87 | $49 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
1. Basis of Presentation | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all material adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results for such periods have been included. The consolidated balance sheet at June 30, 2013 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The results of operations for the three months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2014, or for any future period. | |
The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the fiscal year ended June 30, 2013 and the accompanying notes thereto contained in the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 13, 2013. | |
Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its direct and indirect wholly-owned subsidiaries, Globecomm Network Services Corporation (“GNSC”), Globecomm Services Maryland LLC (“GSM”), Cachendo LLC (“Cachendo”), Telaurus Communications LLC (“Telaurus”), Melat Networks Inc. (“Melat”), Evolution Communications Group Limited B.V.I. (“Evocomm”), Globecomm Europe B.V. (“Globecomm Europe”; the merger of the entities formerly known as Carrier to Carrier Telecom B.V. “C2C” and B.V. Mach 6 “Mach 6”), Globecomm Systems SA Proprietary Ltd (“Globecomm SA”) and ComSource Inc. (“ComSource”) (collectively, the "Company"). All significant intercompany balances and transactions have been eliminated in consolidation. | |
Accounting Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | |
Revenue Recognition | |
The Company recognizes revenue for its production-type contracts that are sold separately as standard satellite ground segment systems when persuasive evidence of an arrangement exists, the selling price is fixed or determinable, collectability is reasonably assured, delivery has occurred and the contractual performance specifications have been met. The Company’s standard satellite ground segment systems produced in connection with these contracts are typically short-term (less than twelve months in term) and manufactured using a standard modular production process. Such systems require less engineering, drafting and design efforts than the Company’s long-term complex production-type projects. Revenue is recognized on the Company’s standard satellite ground segment systems upon shipment and acceptance of factory performance testing which is when title transfers to the customer. The amount of revenues recorded on each standard production-type contract is reduced by the customer’s contractual holdback amount, which typically requires 10% to 30% of the contract value to be retained by the customer until installation and final acceptance is complete. The customer generally becomes obligated to pay 70% to 90% of the contract value upon shipment and acceptance of factory performance testing. Installation is not deemed to be essential to the functionality of the system since installation does not require significant changes to the features or capabilities of the equipment, does not require complex software integration and interfacing and the Company has not experienced any difficulties installing such equipment. In addition, the customer or other third party vendors can install the equipment. The estimated value of the installation services is determined by management, which is typically less than the customer’s contractual holdback percentage. If the holdback is less than the estimated value of installation, the Company will defer recognition of revenues, determined on a contract-by-contract basis equal to the estimated value of the installation services. Payments received in advance by customers are deferred until shipment and are presented as deferred revenues in the accompanying consolidated balance sheets. | |
The Company recognizes revenue using the percentage-of-completion method of accounting upon the achievement of certain contractual milestones for its non-standard, complex production-type contracts for the production of satellite ground segment systems and equipment that are generally integrated into the customer’s satellite ground segment network. The equipment and systems produced in connection with these contracts are typically long-term (in excess of twelve months in term) and require significant customer-specific engineering, drafting and design effort in order to effectively integrate all of the customizable earth station equipment into the customer’s ground segment network. These contracts generally have larger contract values, greater economic risks and substantive specific contractual performance requirements due to the engineering and design complexity of such systems and related equipment. Progress payments received in advance by customers are netted against the inventory balances in the accompanying consolidated balance sheets. | |
Revenues from services consist of the managed networks, application services, professional services and lifecycle support service lines. Service revenues are recognized ratably over the period in which services are provided. Payments received in advance of services are deferred until the period such services are provided and are presented as deferred revenues in the accompanying consolidated balance sheets. | |
The Company enters into multiple-element arrangements with its customers including hardware, engineering solutions, professional services and maintenance services. For arrangements involving multiple deliverables, the Company evaluates and separates each deliverable to determine whether it represents a separate unit of accounting based on whether the delivered item has value to the customer on a stand-alone basis. Consideration is allocated to each deliverable based on the item’s relative selling price. The Company uses a hierarchy to determine the selling price to be used to allocate revenue to each deliverable as follows: (i) vendor-specific objective evidence of the selling price; (ii) third party evidence of selling price; and (iii) best estimate of selling price. | |
Costs from Services | |
Costs from services consist primarily of satellite space segment charges, fiber connectivity fees, voice termination costs and network operations expenses. Satellite space segment charges consist of the costs associated with obtaining satellite bandwidth (the measure of capacity) used in the transmission of services to and from the satellites leased from operators. Network operations expenses consist primarily of costs associated with the operation of the Network Operation Centers, on a 24 hour a day, seven-day a week basis, including personnel and related costs and depreciation. | |
Costs from Infrastructure Solutions | |
Costs from infrastructure solutions consist primarily of the costs of purchased materials (including shipping and handling costs), direct labor and related overhead expenses, project-related travel and living costs and subcontractor salaries. | |
Research and Development | |
Research and development expenditures are expensed as incurred. | |
Inventories | |
Inventories, which consist primarily of work-in-progress from costs incurred in connection with specific customer contracts, are stated at the lower of cost (using the first-in, first-out method of accounting) or market value. Progress payments received under long-term contracts are netted against inventories. | |
Cash Equivalents | |
The Company defines highly liquid financial instruments with a maturity, at the purchase date, of three months or less as cash equivalents. | |
Fixed Assets | |
Fixed assets are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized and repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from three to twenty-five years. Amortization of leasehold improvements and leased equipment is calculated using the straight-line method over the shorter of the lease term or estimated useful life of the asset. | |
Stock-Based Compensation | |
Stock compensation expense was approximately $832,000 and $869,000 for the three months ended September 30, 2013 and 2012, respectively. As of September 30, 2013, there was approximately $4,433,000 of unrecognized compensation cost related to non-vested restricted shares and restricted share units. The cost is expected to be recognized over a weighted-average period of 1.8 years. As of September 30, 2013, there was approximately $54,000 of unrecognized compensation cost related to non-vested outstanding stock options. The cost is expected to be recognized over a weighted-average period of 1.4 years. | |
Goodwill | |
Goodwill represents the excess of the purchase price of businesses over the fair value of the identifiable net assets acquired. Goodwill is tested for impairment at least annually. The impairment test for goodwill uses a two-step approach, which is performed at the reporting unit level. Step one compares the fair value of the reporting unit (calculated using a discounted cash flow method) to its carrying value. If the carrying value exceeds the fair value, there is a potential impairment and step two must be performed. Step two compares the carrying value of the reporting unit’s goodwill to its implied fair value (i.e., fair value of the reporting unit less the fair value of the unit’s assets and liabilities, including identifiable intangible assets). If the carrying value of goodwill exceeds its implied fair value, the excess is required to be recorded as an impairment charge. The Company performs the goodwill impairment test annually in the fourth quarter. There have been no events in the three months ended September 30, 2013 that would indicate that goodwill was impaired. | |
All of the Company’s goodwill has been allocated to the Company’s Services reportable segment. During the three-month period ended September 30, 2013, goodwill increased by $3,656,000 of which $3,248,000 relates to the acquisition of certain assets and liabilities of WorldCell Inc (see Note 9) and $408,000 relates to foreign currency translation adjustments. | |
Long-Lived Assets | |
For other than goodwill, when impairment indicators are present, the Company reviews the carrying value of its assets in determining the ultimate recoverability of their unamortized values using future undiscounted cash flows expected to be generated by the assets. If such assets are considered impaired, the impairment recognized is measured by the amount by which the carrying amount of the asset exceeds the future discounted cash flows. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less cost to sell. No indicators of impairment were noted that would require an impairment assessment on the long-lived assets at September 30, 2013. | |
The Company evaluates the periods of amortization in determining whether later events and circumstances warrant revised estimates of useful lives. If estimates are changed, the unamortized cost will be allocated to the increased or decreased number of remaining periods in the revised lives. | |
Comprehensive Income | |
Comprehensive income for the three months ended September 30, 2013 and 2012 of approximately $973,000 and $3,070,000, respectively, includes an unrealized foreign currency translation gain of approximately $818,000 and $394,000, respectively. | |
Income Taxes | |
Deferred Tax Assets | |
Consistent with the provisions of ASC Topic No. 740, Income Taxes, the Company regularly estimates the ability to recover deferred income taxes, reports such deferred tax assets at the amount that is determined to be more-likely-than-not recoverable, and estimates income taxes in each of the taxing jurisdictions in which the Company operates. This process involves estimating current tax expense together with assessing any temporary differences resulting from the different treatment of certain items, such as the timing for recognizing revenue and expenses for tax and accounting purposes. These differences may result in deferred tax assets and liabilities, which are included in the consolidated balance sheets. The Company is required to assess the likelihood that the deferred tax assets, which include net operating loss carry forwards and temporary differences that are expected to be deductible in future years, will be recoverable from future taxable income or other tax planning strategies. If recovery is not likely, a valuation allowance must be provided based on estimates of future taxable income in the various taxing jurisdictions, and the amount of deferred taxes that are ultimately realizable. The provision for current and deferred taxes involves evaluations and judgments of uncertainties in the interpretation of complex tax regulations. This evaluation considers several factors, including an estimate of the likelihood of generating sufficient taxable income in future periods, the effect of temporary differences, the expected reversal of deferred tax liabilities, and available tax planning strategies. | |
Uncertainty in Tax Positions | |
The Company recognizes in its financial statements the benefits of tax return positions if that tax position is more likely than not to be sustained on audit based on its technical merits. At September 30, 2013, the Company had a liability for unrecognized tax benefits of approximately $1,621,000, which, if recognized in the future, would favorably impact the Company’s effective tax rate. On a quarterly basis, the Company evaluates its tax positions and revises its estimates accordingly. The Company believes that none of these tax positions will be resolved within the next twelve months. The Company records both accrued interest and penalties related to income tax matters, if any, in the provision for income taxes in the accompanying consolidated statements of operations. As of September 30, 2013, the Company had not accrued any amounts for the potential payment of penalties and interest. | |
The Company is subject to taxation in the U.S. and various state and foreign taxing jurisdictions. The Company’s federal tax returns for the 2010 through 2013 tax years remain subject to examination. The Company files returns in numerous state jurisdictions with varying statutes of limitation. | |
Product Warranties | |
The Company offers warranties on its contracts, the specific terms and conditions of which vary depending upon the contract and work performed. Generally, a basic limited warranty, including parts and labor, is provided to customers for one year. The Company can recoup certain of these costs through product warranties it holds with its original equipment manufacturers, which typically are one year in term. Historically, warranty expense has been minimal, however, management periodically assesses the need for any additional warranty reserve. | |
Recent Accounting Pronouncements | |
In July 2012, the FASB issued guidance that allows an entity the option to first assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. An entity no longer will be required to perform the quantitative impairment test of indefinite-lived intangible assets if, after it assesses that the totality of events and circumstances, the entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this guidance did not have any impact on our consolidated financial condition or results of operations. | |
In February 2013, the FASB issued guidance which requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. This guidance is effective for periods beginning after December 15, 2012. The adoption of this guidance did not have a material impact on our consolidated financial condition or results of operations. |
Merger
Merger | 3 Months Ended |
Sep. 30, 2013 | |
Business Combinations [Abstract] | ' |
Merger | ' |
2. Merger | |
On August 25, 2013, the Company, entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) with Wasserstein Cosmos Co-Invest, L.P., a Delaware limited partnership (“Parent”), and Cosmos Acquisition Corp., an indirect wholly owned subsidiary of Parent (“Merger Subsidiary”). Parent and Merger Subsidiary are affiliates of Wasserstein & Co., LP. Pursuant to the terms of the Merger Agreement, and subject to the conditions thereof, Merger Subsidiary will merge with and into Globecomm, and Globecomm will become an indirect wholly owned subsidiary of Parent (the “Merger”). The Merger Agreement was unanimously approved by Globecomm’s board of directors. At the effective time and as a result of the Merger, each outstanding share of Globecomm common stock, other than shares owned by Globecomm, Parent or any subsidiary of either Parent or Globecomm and shares with respect to which appraisal rights are properly exercised and not withdrawn, will be converted into the right to receive $14.15, in cash, without interest. | |
Consummation of the Merger is subject to certain conditions, including (i) the adoption of the Merger Agreement by the Company’s stockholders, at a special meeting of the stockholders to be held on November 22, 2013, (ii) the absence of any law or order prohibiting the closing, (iii) the expiration or termination of any applicable waiting period under the HSR Act (which has taken place prior to the date of this report) and any International Traffic in Arms Regulations requirements and any National Industrial Security Program Operating Manual requirements having been met, (iv) to the extent necessary, receipt of approval from the Committee on Foreign Investment in the United States (or notification from CFIUS that it has determined that it does not have jurisdiction over the transactions contemplated by the Merger Agreement or has determined not to conduct a full investigation), (v) the receipt of certain FCC consents and the completion of certain actions relating to certain of the FCC licenses, (vi) the satisfaction of a financial test by the Company, (vii) the absence of any Material Adverse Effect (as defined in the Merger Agreement) with respect to the Company, (viii) the absence of certain events relating to Company’s financial statements, (ix) the absence of any debarment of the Company from contracting with the federal government of the United States, and (x) other customary closing conditions. |
Basic_and_Diluted_Net_Income_P
Basic and Diluted Net Income Per Common Share | 3 Months Ended |
Sep. 30, 2013 | |
Earnings Per Share [Abstract] | ' |
Basic and Diluted Net Income Per Common Share | ' |
3. Basic and Diluted Net Income Per Common Share | |
Basic net income per common share is computed by dividing the net income for the period by the weighted-average number of common shares outstanding for the period. For diluted net income per common share, the weighted average shares include the incremental common shares issuable upon the exercise of stock options and warrants and unvested restricted shares and restricted stock units (using the treasury stock method). The incremental common shares for stock options, warrants and unvested restricted shares and restricted stock units are excluded from the calculation of diluted net income per share, if their effect is anti-dilutive. Diluted net income per share for the three months ended September 30, 2013 and 2012 excludes the effect of approximately 12,000 and 534,000 stock options and unvested restricted shares and restricted stock units in the calculation of the incremental common shares, respectively, as their effect would have been anti-dilutive. |
Inventories
Inventories | 3 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
4. Inventories | |||||||||
Inventories consist of the following: | |||||||||
September 30, | June 30, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
(In thousands) | |||||||||
Raw materials and component parts | $ | 2,427 | $ | 2,239 | |||||
Work-in-progress | 20,973 | 16,134 | |||||||
23,400 | 18,373 | ||||||||
Less progress payments | 2,542 | 1,297 | |||||||
$ | 20,858 | $ | 17,076 | ||||||
Segment_Information
Segment Information | 3 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Segment Information | ' | ||||||||
5. Segment Information | |||||||||
The Company operates through two business segments. Its services segment, through GNSC, GSM, Cachendo, Telaurus, Melat, Evocomm, Globecomm Europe, Globecomm SA and ComSource provides satellite communication services capabilities. Its infrastructure solutions segment, through Globecomm Systems Inc., provides design, engineering and installation of complex ground segment systems and networks. | |||||||||
The Company's reportable segments are business units that offer different services and products. The reportable segments are each managed separately because they provide distinct services and products. | |||||||||
The following is the Company’s business segment information for the three months ended September 30, 2013 and 2012: | |||||||||
Three Months Ended | |||||||||
September 30, | September 30, | ||||||||
2013 | 2012 | ||||||||
(Unaudited) | |||||||||
(In thousands) | |||||||||
Revenues: | |||||||||
Services | $ | 44,920 | $ | 47,172 | |||||
Infrastructure solutions | 12,342 | 33,991 | |||||||
Total revenues | $ | 57,262 | $ | 81,163 | |||||
Income (loss) from operations: | |||||||||
Services | $ | 4,593 | $ | 6,811 | |||||
Infrastructure solutions | (4,363 | ) | (2,660 | ) | |||||
Interest income | 96 | 85 | |||||||
Interest expense | (77 | ) | (114 | ) | |||||
Income before income taxes | $ | 249 | $ | 4,122 | |||||
Depreciation and amortization: | |||||||||
Services | $ | 2,862 | $ | 2,592 | |||||
Infrastructure solutions | 363 | 381 | |||||||
Total depreciation and amortization | $ | 3,225 | $ | 2,973 | |||||
Expenditures for long-lived assets: | |||||||||
Services | $ | 2,043 | $ | 2,300 | |||||
Infrastructure solutions | 47 | 521 | |||||||
Total expenditures for long-lived assets | $ | 2,090 | $ | 2,821 | |||||
LongTerm_Debt
Long-Term Debt | 3 Months Ended | ||||
Sep. 30, 2013 | |||||
Debt Disclosure [Abstract] | ' | ||||
Long-Term Debt | ' | ||||
6. Long-Term Debt | |||||
Line of Credit | |||||
On July 18, 2011, the Company entered into a secured credit facility with Citibank which expires October 31, 2014. The credit facility is comprised of a $72.5 million line of credit (the “2011 Line”) which includes the following sublimits: (a) $30 million available for standby letters of credit; (b) $10 million available for commercial letters of credit; (c) a line for term loans, each having a term of no more than five years, in the aggregate amount of up to $50 million that can be used for acquisitions; and (d) $15 million available for revolving credit borrowings. The Company is required to pay a commitment fee on the average daily unused portion of the total commitment based on the Company’s consolidated leverage ratio (currently 25 basis points per annum) payable quarterly in arrears. | |||||
At the discretion of the Company, advances under the 2011 Line bear interest at the prime rate or LIBOR plus applicable margin based on the Company’s consolidated leverage ratio and are collateralized by a first priority security interest on all of the personal property of the Company. At September 30, 2013, the applicable margin on the LIBOR rate was 200 basis points. The Company is required to comply with various ongoing financial covenants, including with respect to the Company’s leverage ratio, minimum cash balance, fixed charge coverage ratio and EBITDA minimums, with which the Company was in compliance at September 30, 2013. As of September 30, 2013, in addition to the C2C Acquisition Loan and ComSource Acquisition Loan described below there were standby letters of credit of approximately $6,457,000, which were applied against and reduced the amounts available under the credit facility. | |||||
As of September 30, 2013 debt consisted of the following (in thousands): | |||||
C2C Acquisition Loan | $ | 3,750 | |||
ComSource Acquisition Loan | 9,300 | ||||
Total debt | 13,050 | ||||
Less current portion | 6,100 | ||||
Long term debt | $ | 6,950 | |||
C2C Acquisition Loan | |||||
The purchase of C2C and Evocomm was funded, in part, through a five-year $12,500,000 acquisition term loan (“C2C Acquisition Loan”) provided by Citibank, N.A on March 5, 2010, under the Company’s credit facility. The C2C Acquisition Loan bears interest at the prime rate or LIBOR plus 200 basis points, at the Company’s discretion. The balance is to be paid in equal monthly instalments, excluding interest, of approximately $208,333 beginning on April 1, 2010. The interest rate in effect as of September 30, 2013 was approximately 2.2% per annum. At September 30, 2013, $3,750,000 was outstanding of which $2,500,000 was due within one year. | |||||
ComSource Acquisition Loan | |||||
The purchase of ComSource was funded, in part, through a five-year $18,000,000 acquisition term loan (“ComSource Acquisition Loan”) provided by Citibank, N.A on April 7, 2011. The ComSource Acquisition Loan bears interest at the prime rate or LIBOR plus 200 basis points, at the Company’s discretion. The balance is to be paid in equal monthly instalments, excluding interest, of $300,000 beginning on May 1, 2011. The interest rate in effect as of September 30, 2013 was approximately 2.2% per annum. At September 30, 2013, $9,300,000 was outstanding of which $3,600,000 was due within one year. | |||||
Remaining future minimum payments under these agreements, excluding interest, through maturity are expected to be as follows (in thousands): | |||||
2014 | $ | 4,575 | |||
2015 | 5,475 | ||||
2016 | 3,000 |
Intangibles
Intangibles | 3 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ' | ||||||||||
Intangibles | ' | ||||||||||
7. Intangibles | |||||||||||
Intangibles subject to amortization consisted of the following: | |||||||||||
September 30, | |||||||||||
2013 | June 30, | Est. useful life | |||||||||
(unaudited) | 2013 | ||||||||||
(In thousands) | |||||||||||
Customer relationships | $ | 26,198 | $ | 24,798 | 7-18 years | ||||||
Software | 1,287 | 1,287 | 5 years | ||||||||
Contracts backlog | 2,491 | 2,442 | 6 months-2 years | ||||||||
Covenant not to compete | 126 | 126 | 3-4 years | ||||||||
Trademark | 384 | 382 | 5 years | ||||||||
30,486 | 29,035 | ||||||||||
Less accumulated amortization | 13,317 | 12,459 | |||||||||
Intangibles, net | $ | 17,169 | $ | 16,576 | |||||||
Amortization expense of approximately $759,000 and $728,000 was included in general and administrative expenses in the three months ended September 30, 2013, and 2012, respectively. | |||||||||||
Total remaining amortization expense for the following five fiscal years related to these intangible assets is expected to be as follows (in thousands): | |||||||||||
2014 | $ | 2,238 | |||||||||
2015 | 2,686 | ||||||||||
2016 | 2,337 | ||||||||||
2017 | 2,292 | ||||||||||
2018 | 1,985 |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended |
Sep. 30, 2013 | |
Fair Value Disclosures [Abstract] | ' |
Fair Value Measurements | ' |
8. Fair Value Measurements | |
The Company has categorized our assets and liabilities recorded at fair value based upon the fair value hierarchy. The levels of fair value hierarchy are as follows: | |
Level 1 – Quoted prices in active markets for identical assets or liabilities. | |
Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related asset or liabilities. | |
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities. | |
ASC 820 – Fair Value Measurements and Disclosures requires the use of observable market inputs (quoted market prices) when measuring fair value and requires Level 1 quoted prices to be used to measure fair value whenever possible. | |
The Company’s financial instruments include cash, accounts receivable, accounts payable, and accrued liabilities. Management believes the carrying amount of the aforementioned financial instruments is a reasonable estimate of fair value as of September 30, 2013 and June 30, 2013 due to the short-term maturity of these items. | |
At September 30, 2013, the book value of the Company’s $13,050,000 of debt approximates fair value based upon its variable interest rate. | |
During the three months ended September 30, 2013 and 2012, the Company had no non-recurring fair value measurements of non-financial assets or liabilities subsequent to their initial recognition. |
Acquisition
Acquisition | 3 Months Ended | ||||
Sep. 30, 2013 | |||||
Business Combinations [Abstract] | ' | ||||
Acquisition | ' | ||||
9. Acquisition | |||||
On July 3, 2013, the Company entered into an Asset Purchase Agreement to acquire certain assets and liabilities of WorldCell Inc. (“WorldCell”) as of July 1, 2013 in exchange for a purchase price of $3,793,000 cash and $400,000 of services to be provided by the Company to the former owner. | |||||
The Company has accounted for the acquisition as a purchase under the purchase method of accounting. The assets and liabilities of WorldCell were preliminarily recorded as of the acquisition date at their respective estimated fair values and consolidated with those of the Company. The excess of the purchase price over the net assets acquired was recorded as goodwill of approximately $3,248,000 and intangibles of approximately $1,200,000 and is deductible for income tax purposes over 15 years. The WorldCell goodwill and intangible assets have been included in as part of the Company’s Services reportable segment. | |||||
The WorldCell asset purchase was a strategic acquisition that strengthened the Company’s wireless communications capability in the government vertical. This business and the associated customers and offerings are synergistic with the Company’s existing customer base and extended its offering to other potential customers in this vertical resulting in the recorded goodwill. | |||||
The preliminary purchase price allocation was as follows (in thousands): | |||||
Goodwill | $ | 3,248 | |||
Customer relationships | 1,192 | ||||
Contracts backlog | 8 | ||||
Liabilities | (255 | ) | |||
Total Purchase Price | $ | 4,193 | |||
The Company allocated the purchase price to assets and liabilities based on their estimated fair value at the acquisition date. The Company’s purchase accounting as of September 30, 2013 is preliminary primarily due to the pending final assessment of the valuation of the intangible assets. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its direct and indirect wholly-owned subsidiaries, Globecomm Network Services Corporation (“GNSC”), Globecomm Services Maryland LLC (“GSM”), Cachendo LLC (“Cachendo”), Telaurus Communications LLC (“Telaurus”), Melat Networks Inc. (“Melat”), Evolution Communications Group Limited B.V.I. (“Evocomm”), Globecomm Europe B.V. (“Globecomm Europe”; the merger of the entities formerly known as Carrier to Carrier Telecom B.V. (“C2C”) and B.V. Mach 6 “Mach 6”), Globecomm Systems SA Proprietary Ltd (“Globecomm SA”) and ComSource Inc. (“ComSource”) (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. | |
Accounting Estimates | ' |
Accounting Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | |
Revenue Recognition | ' |
Revenue Recognition | |
The Company recognizes revenue for its production-type contracts that are sold separately as standard satellite ground segment systems when persuasive evidence of an arrangement exists, the selling price is fixed or determinable, collectability is reasonably assured, delivery has occurred and the contractual performance specifications have been met. The Company’s standard satellite ground segment systems produced in connection with these contracts are typically short-term (less than twelve months in term) and manufactured using a standard modular production process. Such systems require less engineering, drafting and design efforts than the Company’s long-term complex production-type projects. Revenue is recognized on the Company’s standard satellite ground segment systems upon shipment and acceptance of factory performance testing which is when title transfers to the customer. The amount of revenues recorded on each standard production-type contract is reduced by the customer’s contractual holdback amount, which typically requires 10% to 30% of the contract value to be retained by the customer until installation and final acceptance is complete. The customer generally becomes obligated to pay 70% to 90% of the contract value upon shipment and acceptance of factory performance testing. Installation is not deemed to be essential to the functionality of the system since installation does not require significant changes to the features or capabilities of the equipment, does not require complex software integration and interfacing and the Company has not experienced any difficulties installing such equipment. In addition, the customer or other third party vendors can install the equipment. The estimated value of the installation services is determined by management, which is typically less than the customer’s contractual holdback percentage. If the holdback is less than the estimated value of installation, the Company will defer recognition of revenues, determined on a contract-by-contract basis equal to the estimated value of the installation services. Payments received in advance by customers are deferred until shipment and are presented as deferred revenues in the accompanying consolidated balance sheets. | |
The Company recognizes revenue using the percentage-of-completion method of accounting upon the achievement of certain contractual milestones for its non-standard, complex production-type contracts for the production of satellite ground segment systems and equipment that are generally integrated into the customer’s satellite ground segment network. The equipment and systems produced in connection with these contracts are typically long-term (in excess of twelve months in term) and require significant customer-specific engineering, drafting and design effort in order to effectively integrate all of the customizable earth station equipment into the customer’s ground segment network. These contracts generally have larger contract values, greater economic risks and substantive specific contractual performance requirements due to the engineering and design complexity of such systems and related equipment. Progress payments received in advance by customers are netted against the inventory balances in the accompanying consolidated balance sheets. | |
Revenues from services consist of the managed networks, application services, professional services and lifecycle support service lines. Service revenues are recognized ratably over the period in which services are provided. Payments received in advance of services are deferred until the period such services are provided and are presented as deferred revenues in the accompanying consolidated balance sheets. | |
The Company enters into multiple-element arrangements with its customers including hardware, engineering solutions, professional services and maintenance services. For arrangements involving multiple deliverables, the Company evaluates and separates each deliverable to determine whether it represents a separate unit of accounting based on whether the delivered item has value to the customer on a stand-alone basis. Consideration is allocated to each deliverable based on the item’s relative selling price. The Company uses a hierarchy to determine the selling price to be used to allocate revenue to each deliverable as follows: (i) vendor-specific objective evidence of the selling price; (ii) third party evidence of selling price; and (iii) best estimate of selling price. | |
Costs from Services | ' |
Costs from Services | |
Costs from services consist primarily of satellite space segment charges, fiber connectivity fees, voice termination costs and network operations expenses. Satellite space segment charges consist of the costs associated with obtaining satellite bandwidth (the measure of capacity) used in the transmission of services to and from the satellites leased from operators. Network operations expenses consist primarily of costs associated with the operation of the Network Operation Centers, on a 24 hour a day, seven-day a week basis, including personnel and related costs and depreciation. | |
Costs from Infrastructure Solutions | ' |
Costs from Infrastructure Solutions | |
Costs from infrastructure solutions consist primarily of the costs of purchased materials (including shipping and handling costs), direct labor and related overhead expenses, project-related travel and living costs and subcontractor salaries. | |
Research and Development | ' |
Research and Development | |
Research and development expenditures are expensed as incurred. | |
Inventories | ' |
Inventories | |
Inventories, which consist primarily of work-in-progress from costs incurred in connection with specific customer contracts, are stated at the lower of cost (using the first-in, first-out method of accounting) or market value. Progress payments received under long-term contracts are netted against inventories. | |
Cash Equivalents | ' |
Cash Equivalents | |
The Company defines highly liquid financial instruments with a maturity, at the purchase date, of three months or less as cash equivalents. | |
Fixed Assets | ' |
Fixed Assets | |
Fixed assets are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized and repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from three to twenty-five years. Amortization of leasehold improvements and leased equipment is calculated using the straight-line method over the shorter of the lease term or estimated useful life of the asset. | |
Stock-Based Compensation | ' |
Stock-Based Compensation | |
Stock compensation expense was approximately $832,000 and $869,000 for the three months ended September 30, 2013 and 2012, respectively. As of September 30, 2013, there was approximately $4,433,000 of unrecognized compensation cost related to non-vested restricted shares and restricted share units. The cost is expected to be recognized over a weighted-average period of 1.8 years. As of September 30, 2013, there was approximately $54,000 of unrecognized compensation cost related to non-vested outstanding stock options. The cost is expected to be recognized over a weighted-average period of 1.4 years. | |
Goodwill and Other Intangible Assets | ' |
Goodwill | |
Goodwill represents the excess of the purchase price of businesses over the fair value of the identifiable net assets acquired. Goodwill is tested for impairment at least annually. The impairment test for goodwill uses a two-step approach, which is performed at the reporting unit level. Step one compares the fair value of the reporting unit (calculated using a discounted cash flow method) to its carrying value. If the carrying value exceeds the fair value, there is a potential impairment and step two must be performed. Step two compares the carrying value of the reporting unit’s goodwill to its implied fair value (i.e., fair value of the reporting unit less the fair value of the unit’s assets and liabilities, including identifiable intangible assets). If the carrying value of goodwill exceeds its implied fair value, the excess is required to be recorded as an impairment charge. The Company performs the goodwill impairment test annually in the fourth quarter. There have been no events in the three months ended September 30, 2013 that would indicate that goodwill was impaired. | |
All of the Company’s goodwill has been allocated to the Company’s Services reportable segment. During the three-month period ended September 30, 2013, goodwill increased by $3,656,000 of which $3,248,000 relates to the acquisition of certain assets and liabilities of WorldCell Inc (see Note 9) and $408,000 relates to foreign currency translation adjustments. | |
Long-Lived Assets | ' |
Long-Lived Assets | |
For other than goodwill, when impairment indicators are present, the Company reviews the carrying value of its assets in determining the ultimate recoverability of their unamortized values using future undiscounted cash flows expected to be generated by the assets. If such assets are considered impaired, the impairment recognized is measured by the amount by which the carrying amount of the asset exceeds the future discounted cash flows. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less cost to sell. No indicators of impairment were noted that would require an impairment assessment on the long-lived assets at September 30, 2013. | |
The Company evaluates the periods of amortization in determining whether later events and circumstances warrant revised estimates of useful lives. If estimates are changed, the unamortized cost will be allocated to the increased or decreased number of remaining periods in the revised lives. | |
Comprehensive Income | ' |
Comprehensive Income | |
Comprehensive income for the three months ended September 30, 2013 and 2012 of approximately $973,000 and $3,070,000, respectively, includes an unrealized foreign currency translation gain of approximately $818,000 and $394,000, respectively. | |
Income Taxes | ' |
Income Taxes | |
Deferred Tax Assets | |
Consistent with the provisions of ASC Topic No. 740, Income Taxes, the Company regularly estimates the ability to recover deferred income taxes, reports such deferred tax assets at the amount that is determined to be more-likely-than-not recoverable, and estimates income taxes in each of the taxing jurisdictions in which the Company operates. This process involves estimating current tax expense together with assessing any temporary differences resulting from the different treatment of certain items, such as the timing for recognizing revenue and expenses for tax and accounting purposes. These differences may result in deferred tax assets and liabilities, which are included in the consolidated balance sheets. The Company is required to assess the likelihood that the deferred tax assets, which include net operating loss carry forwards and temporary differences that are expected to be deductible in future years, will be recoverable from future taxable income or other tax planning strategies. If recovery is not likely, a valuation allowance must be provided based on estimates of future taxable income in the various taxing jurisdictions, and the amount of deferred taxes that are ultimately realizable. The provision for current and deferred taxes involves evaluations and judgments of uncertainties in the interpretation of complex tax regulations. This evaluation considers several factors, including an estimate of the likelihood of generating sufficient taxable income in future periods, the effect of temporary differences, the expected reversal of deferred tax liabilities, and available tax planning strategies. | |
Uncertainty in Tax Positions | |
The Company recognizes in its financial statements the benefits of tax return positions if that tax position is more likely than not to be sustained on audit based on its technical merits. At September 30, 2013, the Company had a liability for unrecognized tax benefits of approximately $1,621,000, which, if recognized in the future, would favorably impact the Company’s effective tax rate. On a quarterly basis, the Company evaluates its tax positions and revises its estimates accordingly. The Company believes that none of these tax positions will be resolved within the next twelve months. The Company records both accrued interest and penalties related to income tax matters, if any, in the provision for income taxes in the accompanying consolidated statements of operations. As of September 30, 2013, the Company had not accrued any amounts for the potential payment of penalties and interest. | |
The Company is subject to taxation in the U.S. and various state and foreign taxing jurisdictions. The Company’s federal tax returns for the 2010 through 2013 tax years remain subject to examination. The Company files returns in numerous state jurisdictions with varying statutes of limitation. | |
Deferred Tax Assets | ' |
Deferred Tax Assets | |
Consistent with the provisions of ASC Topic No. 740, Income Taxes, the Company regularly estimates the ability to recover deferred income taxes, reports such deferred tax assets at the amount that is determined to be more-likely-than-not recoverable, and estimates income taxes in each of the taxing jurisdictions in which the Company operates. This process involves estimating current tax expense together with assessing any temporary differences resulting from the different treatment of certain items, such as the timing for recognizing revenue and expenses for tax and accounting purposes. These differences may result in deferred tax assets and liabilities, which are included in the consolidated balance sheets. The Company is required to assess the likelihood that the deferred tax assets, which include net operating loss carry forwards and temporary differences that are expected to be deductible in future years, will be recoverable from future taxable income or other tax planning strategies. If recovery is not likely, a valuation allowance must be provided based on estimates of future taxable income in the various taxing jurisdictions, and the amount of deferred taxes that are ultimately realizable. The provision for current and deferred taxes involves evaluations and judgments of uncertainties in the interpretation of complex tax regulations. This evaluation considers several factors, including an estimate of the likelihood of generating sufficient taxable income in future periods, the effect of temporary differences, the expected reversal of deferred tax liabilities, and available tax planning strategies. | |
Uncertainty in Tax Positions | ' |
Uncertainty in Tax Positions | |
The Company recognizes in its financial statements the benefits of tax return positions if that tax position is more likely than not to be sustained on audit based on its technical merits. At September 30, 2013, the Company had a liability for unrecognized tax benefits of approximately $1,621,000, which, if recognized in the future, would favorably impact the Company’s effective tax rate. On a quarterly basis, the Company evaluates its tax positions and revises its estimates accordingly. The Company believes that none of these tax positions will be resolved within the next twelve months. The Company records both accrued interest and penalties related to income tax matters, if any, in the provision for income taxes in the accompanying consolidated statements of operations. As of September 30, 2013, the Company had not accrued any amounts for the potential payment of penalties and interest. | |
The Company is subject to taxation in the U.S. and various state and foreign taxing jurisdictions. The Company’s federal tax returns for the 2010 through 2013 tax years remain subject to examination. The Company files returns in numerous state jurisdictions with varying statutes of limitation. | |
Product Warranties | ' |
Product Warranties | |
The Company offers warranties on its contracts, the specific terms and conditions of which vary depending upon the contract and work performed. Generally, a basic limited warranty, including parts and labor, is provided to customers for one year. The Company can recoup certain of these costs through product warranties it holds with its original equipment manufacturers, which typically are one year in term. Historically, warranty expense has been minimal, however, management periodically assesses the need for any additional warranty reserve. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In July 2012, the FASB issued guidance that allows an entity the option to first assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. An entity no longer will be required to perform the quantitative impairment test of indefinite-lived intangible assets if, after it assesses that the totality of events and circumstances, the entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this guidance did not have any impact on our consolidated financial condition or results of operations. | |
In February 2013, the FASB issued guidance which requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. This guidance is effective for periods beginning after December 15, 2012. The adoption of this guidance did not have a material impact on our consolidated financial condition or results of operations. |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventories | ' | ||||||||
Inventories consist of the following: | |||||||||
September 30, | June 30, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
(In thousands) | |||||||||
Raw materials and component parts | $ | 2,427 | $ | 2,239 | |||||
Work-in-progress | 20,973 | 16,134 | |||||||
23,400 | 18,373 | ||||||||
Less progress payments | 2,542 | 1,297 | |||||||
$ | 20,858 | $ | 17,076 | ||||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Business Segment Information | ' | ||||||||
The following is the Company’s business segment information for the three months ended September 30, 2013 and 2012: | |||||||||
Three Months Ended | |||||||||
September 30, | September 30, | ||||||||
2013 | 2012 | ||||||||
(Unaudited) | |||||||||
(In thousands) | |||||||||
Revenues: | |||||||||
Services | $ | 44,920 | $ | 47,172 | |||||
Infrastructure solutions | 12,342 | 33,991 | |||||||
Total revenues | $ | 57,262 | $ | 81,163 | |||||
Income (loss) from operations: | |||||||||
Services | $ | 4,593 | $ | 6,811 | |||||
Infrastructure solutions | (4,363 | ) | (2,660 | ) | |||||
Interest income | 96 | 85 | |||||||
Interest expense | (77 | ) | (114 | ) | |||||
Income before income taxes | $ | 249 | $ | 4,122 | |||||
Depreciation and amortization: | |||||||||
Services | $ | 2,862 | $ | 2,592 | |||||
Infrastructure solutions | 363 | 381 | |||||||
Total depreciation and amortization | $ | 3,225 | $ | 2,973 | |||||
Expenditures for long-lived assets: | |||||||||
Services | $ | 2,043 | $ | 2,300 | |||||
Infrastructure solutions | 47 | 521 | |||||||
Total expenditures for long-lived assets | $ | 2,090 | $ | 2,821 | |||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | ||||
Sep. 30, 2013 | |||||
Debt Disclosure [Abstract] | ' | ||||
Schedule of Long-Term Debt Instruments | ' | ||||
As of September 30, 2013 debt consisted of the following (in thousands): | |||||
C2C Acquisition Loan | $ | 3,750 | |||
ComSource Acquisition Loan | 9,300 | ||||
Total debt | 13,050 | ||||
Less current portion | 6,100 | ||||
Long term debt | $ | 6,950 | |||
Schedule of Maturities of Long-Term Debt | ' | ||||
Remaining future minimum payments under these agreements, excluding interest, through maturity are expected to be as follows (in thousands): | |||||
2014 | $ | 4,575 | |||
2015 | 5,475 | ||||
2016 | 3,000 |
Intangibles_Tables
Intangibles (Tables) | 3 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ' | ||||||||||
Summary of Intangibles Subject to Amortization | ' | ||||||||||
Intangibles subject to amortization consisted of the following: | |||||||||||
September 30, | |||||||||||
2013 | June 30, | Est. useful life | |||||||||
(unaudited) | 2013 | ||||||||||
(In thousands) | |||||||||||
Customer relationships | $ | 26,198 | $ | 24,798 | 7-18 years | ||||||
Software | 1,287 | 1,287 | 5 years | ||||||||
Contracts backlog | 2,491 | 2,442 | 6 months-2 years | ||||||||
Covenant not to compete | 126 | 126 | 3-4 years | ||||||||
Trademark | 384 | 382 | 5 years | ||||||||
30,486 | 29,035 | ||||||||||
Less accumulated amortization | 13,317 | 12,459 | |||||||||
Intangibles, net | $ | 17,169 | $ | 16,576 | |||||||
Amortization Expense for Following Five Fiscal Years Related to Intangible Assets | ' | ||||||||||
Total remaining amortization expense for the following five fiscal years related to these intangible assets is expected to be as follows (in thousands): | |||||||||||
2014 | $ | 2,238 | |||||||||
2015 | 2,686 | ||||||||||
2016 | 2,337 | ||||||||||
2017 | 2,292 | ||||||||||
2018 | 1,985 |
Acquisition_Tables
Acquisition (Tables) | 3 Months Ended | ||||
Sep. 30, 2013 | |||||
Business Combinations [Abstract] | ' | ||||
Preliminary Purchase Price Allocation | ' | ||||
The preliminary purchase price allocation was as follows (in thousands): | |||||
Goodwill | $ | 3,248 | |||
Customer relationships | 1,192 | ||||
Contracts backlog | 8 | ||||
Liabilities | (255 | ) | |||
Total Purchase Price | $ | 4,193 | |||
Basis_of_Presentation_Addition
Basis of Presentation - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' |
Stock compensation expense | $832,000 | $869,000 | ' |
Unrecognized compensation cost related to non-vested outstanding stock options | 4,433,000 | ' | ' |
Unrecognized compensation cost expected to recognized related to non-vested stock-based compensation | '1 year 9 months 18 days | ' | ' |
Unrecognized compensation cost related to non-vested stock-based compensation | 54,000 | ' | ' |
Goodwill increased | 3,656,000 | ' | ' |
Goodwill relates to the acquisition of certain assets and liabilities | 72,474,000 | ' | 68,818,000 |
Goodwill relates to foreign currency translation adjustments | 408,000 | ' | ' |
Comprehensive income | 973,000 | 3,070,000 | ' |
Foreign currency translation | 818,000 | 394,000 | ' |
Unrecognized tax benefits | 1,621,000 | ' | ' |
Product warranty description | 'The Company offers warranties on its contracts, the specific terms and conditions of which vary depending upon the contract and work performed. Generally, a basic limited warranty, including parts and labor, is provided to customers for one year | ' | ' |
WorldCell Inc. [Member] | ' | ' | ' |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' |
Goodwill relates to the acquisition of certain assets and liabilities | $3,248,000 | ' | ' |
Restricted Stock Units (RSUs) [Member] | ' | ' | ' |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' |
Unrecognized compensation cost expected to recognized related to non-vested stock-based compensation | '1 year 4 months 24 days | ' | ' |
Minimum [Member] | ' | ' | ' |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' |
Customer's contractual holdback amount | 10.00% | ' | ' |
Contract value obligated to pay by customer | 70.00% | ' | ' |
Fixed assets estimated useful lives | '3 years | ' | ' |
Maximum [Member] | ' | ' | ' |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' |
Customer's contractual holdback amount | 30.00% | ' | ' |
Contract value obligated to pay by customer | 90.00% | ' | ' |
Fixed assets estimated useful lives | '25 years | ' | ' |
Merger_Additional_Information_
Merger - Additional Information (Detail) (Stock Appreciation Rights (SARs) [Member], USD $) | 1 Months Ended |
Aug. 25, 2013 | |
Stock Appreciation Rights (SARs) [Member] | ' |
Business Acquisition, Contingent Consideration [Line Items] | ' |
Converted appraisal rights, cash | $14.15 |
Basic_and_Diluted_Net_Income_P1
Basic and Diluted Net Income Per Common Share - Additional Information (Detail) | 3 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Stock options [Member] | Unvested restricted shares and restricted stock units [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Anti-dilutive effect in calculation of incremental common shares | 12,000 | 534,000 |
Inventories_Schedule_of_Invent
Inventories - Schedule of Inventories (Detail) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Raw materials and component parts | $2,427 | $2,239 |
Work-in-progress | 20,973 | 16,134 |
Inventory, Gross, Total | 23,400 | 18,373 |
Less progress payments | 2,542 | 1,297 |
Inventory, Net | $20,858 | $17,076 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 3 Months Ended |
Sep. 30, 2013 | |
Segment | |
Segment Reporting [Abstract] | ' |
Number of operating segments | 2 |
Segment_Information_Business_S
Segment Information - Business Segment Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues: | ' | ' |
Total revenues | $57,262 | $81,163 |
Income (loss) from operations: | ' | ' |
Income from operations | 230 | 4,151 |
Interest income | 96 | 85 |
Interest expense | -77 | -114 |
Income before income taxes | 249 | 4,122 |
Depreciation and amortization: | ' | ' |
Total depreciation and amortization | 3,225 | 2,973 |
Expenditures for long-lived assets: | ' | ' |
Total expenditures for long-lived assets | 2,090 | 2,821 |
Operating Segments [Member] | Services [Member] | ' | ' |
Revenues: | ' | ' |
Total revenues | 44,920 | 47,172 |
Income (loss) from operations: | ' | ' |
Income from operations | 4,593 | 6,811 |
Depreciation and amortization: | ' | ' |
Total depreciation and amortization | 2,862 | 2,592 |
Expenditures for long-lived assets: | ' | ' |
Total expenditures for long-lived assets | 2,043 | 2,300 |
Operating Segments [Member] | Infrastructure solutions [Member] | ' | ' |
Revenues: | ' | ' |
Total revenues | 12,342 | 33,991 |
Income (loss) from operations: | ' | ' |
Income from operations | -4,363 | -2,660 |
Depreciation and amortization: | ' | ' |
Total depreciation and amortization | 363 | 381 |
Expenditures for long-lived assets: | ' | ' |
Total expenditures for long-lived assets | $47 | $521 |
LongTerm_Debt_Additional_Infor
Long-Term Debt - Additional Information (Detail) (USD $) | 3 Months Ended | 3 Months Ended | 1 Months Ended | |||||||
Sep. 30, 2013 | Mar. 05, 2010 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 07, 2011 | Jul. 18, 2011 | Jul. 18, 2011 | Jul. 18, 2011 | Jul. 18, 2011 | Jul. 18, 2011 | |
C2C Acquisition Loan [Member] | C2C Acquisition Loan [Member] | ComSource Acquisition Loan [Member] | ComSource Acquisition Loan [Member] | 2011 Line [Member] | Line of Credit [Member] | Standby letters of credit [Member] | Commercial letters of credit [Member] | Revolving credit borrowings [Member] | ||
2011 Line [Member] | 2011 Line [Member] | 2011 Line [Member] | 2011 Line [Member] | |||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, maximum borrowing capacity | ' | ' | ' | ' | ' | $50,000,000 | $72,500,000 | $30,000,000 | $10,000,000 | $15,000,000 |
Credit facility was extended and expired | ' | ' | ' | ' | ' | 31-Oct-14 | ' | ' | ' | ' |
Term loans with a term (in years) | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prime rate of Libor | 2.00% | ' | 2.00% | 2.00% | ' | ' | ' | ' | ' | ' |
Letters of credits | 6,457,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of acquisition term loan | ' | ' | '5 years | '5 years | ' | ' | ' | ' | ' | ' |
Amount of acquisition term loan | ' | 12,500,000 | ' | ' | 18,000,000 | ' | ' | ' | ' | ' |
Balance amount of loan paid in equal monthly installments | ' | ' | 208,333 | 300,000 | ' | ' | ' | ' | ' | ' |
Percentage of interest rate on acquisition term loan | ' | ' | 2.20% | 2.20% | ' | ' | ' | ' | ' | ' |
Outstanding loan amount | 13,050,000 | ' | 3,750,000 | 9,300,000 | ' | ' | ' | ' | ' | ' |
Long-term debt due within one year | $4,575,000 | ' | $2,500,000 | $3,600,000 | ' | ' | ' | ' | ' | ' |
LongTerm_Debt_Schedule_of_Long
Long-Term Debt - Schedule of Long-Term Debt Instruments (Detail) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Total debt | $13,050 | ' |
Less current portion | 6,100 | 6,100 |
Long term debt | 6,950 | 8,475 |
C2C Acquisition Loan [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total debt | 3,750 | ' |
ComSource Acquisition Loan [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total debt | $9,300 | ' |
LongTerm_Debt_Schedule_of_Matu
Long-Term Debt - Schedule of Maturities of Long-Term Debt (Detail) (USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Debt Disclosure [Abstract] | ' |
2014 | $4,575 |
2015 | 5,475 |
2016 | $3,000 |
Intangibles_Summary_of_Intangi
Intangibles - Summary of Intangibles Subject to Amortization (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Jun. 30, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible assets, gross | $30,486 | $29,035 |
Less accumulated amortization | 13,317 | 12,459 |
Intangibles, net | 17,169 | 16,576 |
Customer relationships [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible assets, gross | 26,198 | 24,798 |
Customer relationships [Member] | Minimum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible asset, useful life | '7 years | ' |
Customer relationships [Member] | Maximum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible asset, useful life | '18 years | ' |
Software [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible assets, gross | 1,287 | 1,287 |
Finite-lived intangible asset, useful life | '5 years | ' |
Contracts backlog [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible assets, gross | 2,491 | 2,442 |
Contracts backlog [Member] | Minimum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible asset, useful life | '6 months | ' |
Contracts backlog [Member] | Maximum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible asset, useful life | '2 years | ' |
Covenant not to compete [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible assets, gross | 126 | 126 |
Covenant not to compete [Member] | Minimum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible asset, useful life | '3 years | ' |
Covenant not to compete [Member] | Maximum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible asset, useful life | '4 years | ' |
Trademark [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible assets, gross | $384 | $382 |
Finite-lived intangible asset, useful life | '5 years | ' |
Intangibles_Additional_Informa
Intangibles - Additional Information (Detail) (General and administrative expense [Member], USD $) | 3 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
General and administrative expense [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Amortization expense | $759,000 | $728,000 |
Intangibles_Amortization_Expen
Intangibles - Amortization Expense for Following Five Fiscal Years Related to Intangible Assets (Detail) (USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Goodwill And Intangible Assets Disclosure [Abstract] | ' |
2014 | $2,238 |
2015 | 2,686 |
2016 | 2,337 |
2017 | 2,292 |
2018 | $1,985 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Fair Value Disclosures [Abstract] | ' |
Book value of company's debt | $13,050 |
Acquisition_Additional_Informa
Acquisition - Additional Information (Detail) (USD $) | 3 Months Ended | 1 Months Ended | ||
Sep. 30, 2013 | Jun. 30, 2013 | Jul. 31, 2013 | Sep. 30, 2013 | |
WorldCell Inc. [Member] | WorldCell Inc. [Member] | |||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Assets Purchase Agreement date | ' | ' | 3-Jul-13 | ' |
Purchase price, cash | $3,793,000 | ' | $3,793,000 | ' |
Purchase price, services | ' | ' | 400,000 | ' |
Goodwill | 72,474,000 | 68,818,000 | ' | 3,248,000 |
Intangibles | ' | ' | ' | $1,200,000 |
Acquisition_Preliminary_Purcha
Acquisition - Preliminary Purchase Price Allocation (Detail) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Business Acquisition [Line Items] | ' | ' |
Goodwill | $72,474 | $68,818 |
WorldCell Inc. [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Goodwill | 3,248 | ' |
Customer relationships | 1,192 | ' |
Contracts backlog | 8 | ' |
Liabilities | -255 | ' |
Total Purchase Price | $4,193 | ' |