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ACQUISITION | 12 Months Ended
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Mar. 31, 2021
Business Combinations [Abstract] |
ACQUISITION | (B) ACQUISITIONS Kosmos Acquisition On March 6, 2020, we completed the previously announced acquisition (the Kosmos Acquisition) of the assets of Kosmos Cement Company (Kosmos) (a joint venture between CEMEX S.A.B. de C.V. and Buzzi Unicem S.p.A.). The assets acquired in the Kosmos Acquisition were (i) a cement plant located in Louisville, Kentucky, (ii) a limestone quarry located in Battletown, Kentucky, (iii) cement distribution terminals located in Indianapolis, Indiana; Cincinnati, Ohio; Pittsburgh, Pennsylvania; Charleston, West Virginia; Ceredo, West Virginia; Mt. Vernon, Indiana; and Lexington, Kentucky, and (iv) certain other properties and assets used by Kosmos in connection with the foregoing (collectively, the Kosmos Business). Purchase Price: The purchase price of the Kosmos Acquisition was approximately $668.9 million. We funded the payment of the Kosmos Acquisition primarily through a Term Loan with the remainder paid using cash on hand. See Footnote (G) for a description of the loan terms. Recording of Assets Acquired and Liabilities Assumed: The transaction was accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The Company engaged a third party to perform appraisal valuation services to support the Company’s preliminary estimate of the fair value of certain assets acquired in the Kosmos Acquisition. The preparation of the valuation of the assets acquired and liabilities assumed in the Kosmos Acquisition requires the use of significant assumptions and estimates. Critical estimates with respect to the valuation of property, plant, and equipment include, but are not limited to, replacement cost, condition, and estimated remaining useful lives of property and equipment. Critical estimates related to intangible and other assets include future expected cash flows, including projected revenues and expenses, customer attrition, and applicable discount rates. These estimates are based on assumptions that we believe to be reasonable. However, actual results may differ from these estimates. The following table summarizes the allocation of the purchase price to assets acquired and liabilities assumed as of December 31, 2020, when the allocation was determined to be final:
|  | (dollars in thousands) |
Inventories |  | $ | 28,568 |
Property, Plant, and Equipment |  |  | 476,698 |
Intangible Assets |  |  | 38,300 |
Lease Right-of-Use Assets |  |  | 4,478 |
Lease Obligations |  |  | (4,478 | )
Long-term Liabilities |  |  | (3,756 | )
Total Net Assets |  |  | 539,810 |
Goodwill |  |  | 129,127 |
Total Estimated Purchase Price |  | $ | 668,937 |
During the quarter ended June 30, 2020, we completed the valuation of inventories, intangible assets, lease right-of-use assets, and lease obligations, and during the quarter ended December 31, 2020, we finalized the valuation of our asset retirement obligation. These final values, which are disclosed in the above table, resulted in minor changes from the amounts disclosed in our fiscal 2020 Form 10-K. Goodwill represents the excess purchase price over the fair values of assets acquired and liabilities assumed. The Goodwill was generated by the availability of co-product sales and the opportunity associated with the expansion of our Cement business to the eastern region of the United States. All of the Goodwill generated by the transaction will be deductible for income tax purposes. The following table is a summary of the fair value estimates of the identifiable intangible assets (dollars in thousands) and their weighted-average useful lives:
|  | Weighted Average Life |  |  | Estimated Fair Value |
Permits |  |  | 20 |  |  |  | 1,500 |
Customer Relationships |  |  | 15 |  |  |  | 35,300 |
Trade Name and Technology |  |  | 10 |  |  |  | 1,500 |
Total Intangible Assets |  |  |  |  |  | $ | 38,300 |
Actual and pro forma impact of Kosmos Acquisition: The following table presents the net sales and operating loss related to the Kosmos Acquisition that has been included in our Consolidated Statement of Earnings from March 6, 2020 through March 31, 2020 and for the fiscal year ended March 31, 2021:
|  | For the Years Ended March 31, |
|  | 2020 |  |  | 2021 |
|  | (dollars in thousands) |
Revenue |  | $ | 7,880 |  |  | $ | 175,511 |
Operating Earnings (Loss) |  | $ | (6,756 | ) |  | $ | 34,084 |
Operating Loss shown above for fiscal 2020 was affected by approximately $1.8 million related to depreciation and amortization and $1.7 million related to the recording of acquired inventory at fair value. Operating Earnings for fiscal 2021 was affected by approximately $21.7 million related to depreciation and amortization, and $3.7 million related to the recording of the acquired inventory at fair value. The unaudited pro forma results presented below include the effects of the Kosmos Acquisition as if it had been consummated as of April 1, 2018. The pro forma results include estimates for depreciation from the fair value adjustments to acquired Property and Equipment, amortization for acquired Intangible Assets, the Inventory step-up to fair value, and interest expense associated with debt used to fund the Kosmos Acquisition. To better reflect the combined operating results, material nonrecurring charges directly related to the Kosmos Acquisition of approximately $5.6 million have been excluded from pro forma net income. Additionally, we excluded a tax benefit of approximately $31.7 million that would not have been available to us had the acquisition occurred on April 1, 2018. See Footnote (J) for more information on the tax benefit.
|  | For the Year Ended March 31, |
|  | 2020 |  |  | 2019 |
|  | Unaudited |
|  | (dollars in thousands) |
Revenue |  | $ | 1,558,342 |  |  | $ | 1,471,350 |
Net Earnings |  | $ | 50,189 |  |  | $ | 66,377 |
Earnings Per Share – basic |  | $ | 1.19 |  |  | $ | 1.42 |
Earnings Per Share - diluted |  | $ | 1.19 |  |  | $ | 1.41 |
The pro forma results do not include any anticipated synergies or other expected benefits of the Kosmos Acquisition. Accordingly, the unaudited pro forma results are not necessarily indicative of either future results of operations or results that might have been achieved had the Kosmos Acquisition been consummated as of April 1, 2018. ConAgg Acquisition On August 2, 2019, we acquired the assets of a readymix concrete and aggregates business (the ConAgg Acquisition). The purchase price of the ConAgg Acquisition was approximately $30.4 million. The purchase price and expenses incurred in connection with the ConAgg Acquisition were funded through operating cash flows and borrowings under our Revolving Credit Facility. Operations related to the ConAgg Acquisition are included in our segment reporting for the Concrete and Aggregates business from August 2, 2019 through March 31, 2020, and for fiscal 2021. The purchase price for the ConAgg Acquisition was allocated as follows:
|  | As of August 2, 2019 |
|  | (dollars in thousands) |
Accounts Receivable |  | $ | 6,302 |
Inventories |  |  | 1,921 |
Property, Plant, and Equipment |  |  | 22,620 |
Intangible Assets |  |  | 1,320 |
Lease Right-of-Use Assets |  |  | 3,263 |
Other Assets |  |  | 10 |
Lease Obligations |  |  | (3,263 | )
Accounts Payable and Accrued Expenses |  |  | (3,388 | )
Total Net Assets |  |  | 28,785 |
Goodwill |  |  | 1,639 |
Total Estimated Purchase Price |  | $ | 30,424 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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