Acquisition (Tables)

6 Months Ended

Jun. 29, 2019

Summary of Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair values of assets acquired and liabilities assumed and the purchase price for SMH. In the quarter ended June 29, 2019, the Company made certain adjustments to the purchase price allocation based on revised valuation assumptions, including an adjustment of $5,980,000 to increase intangible assets and an adjustment of $443,000 to increase long-term deferred income taxes principally due to the tax impact of the increase in intangible assets, resulting in a $5,511,000 decrease in goodwill initially recorded. The effect of these measurement period adjustments would have resulted in an additional $540,000 in selling, general and administrative expenses and $147,000 in cost of revenues in the accompanying condensed consolidated statement of income in the first three months of 2019 if the adjustments to the provisional amounts were recognized as of the acquisition date. The final purchase accounting and purchase price allocation is substantially complete but remains subject to change as the Company continues to refine its valuation of certain acquired assets and the valuation of acquired intangibles.



(In thousands)	Total
Net Assets Acquired:
Cash, Cash Equivalents, and Restricted Cash	$	2,431
Accounts Receivable	10,268
Inventory	13,061
Other Current Assets	900
Property, Plant, and Equipment	7,522
Other Assets	11,057
Definite-Lived Intangible Assets
Customer relationships	58,300
Product technology	11,000
Other	4,320
Indefinite-Lived Intangible Assets
Tradenames	9,500
Goodwill	80,991
Total assets acquired	209,350

Accounts Payable	3,380
Customer Deposits	2,908
Other Current Liabilities	4,975
Long-Term Lease Liabilities	15,244
Long-Term Deferred Income Taxes	3,557
Total liabilities assumed	30,064
Net assets acquired	$	179,286

Purchase Price:
Cash Paid to Seller Borrowed Under Revolving Credit Facility	$	179,286

Unaudited Supplemental Pro Forma Information

Had the acquisition of SMH been completed as of the beginning of 2018, the Company’s pro forma results of operations for the three- and six-month periods ended June 29, 2019 and June 28, 2018 would have been as follows:



	Three Months Ended				Six Months Ended
(In thousands, except per share amounts)	June 29, 2019		June 30, 2018		June 29, 2019		June 30, 2018
Revenues	$	177,165	$	176,252	$	348,481	$	346,784
Net Income Attributable to Kadant	$	17,236	$	11,119	$	31,348	$	19,594
Earnings per Share Attributable to Kadant:
Basic	$	1.54	$	1.00	$	2.81	$	1.77
Diluted	$	1.51	$	0.98	$	2.75	$	1.73