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Acquisitions | 9 Months Ended
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Sep. 30, 2018
Business Combinations [Abstract] |
Acquisitions | Acquisitions 2018 Acquisitions. Boat Holdings, LLC On July 2, 2018, pursuant to the Agreement and Plan of Merger dated May 29, 2018, the Company completed the acquisition of Boat Holdings, LLC, a privately held Delaware limited liability company, headquartered in Elkhart, Indiana which manufactures boats (“Boat Holdings”). The transaction was structured as an acquisition of 100% of the outstanding equity interests in Boat Holdings for aggregate consideration of $806,658,000, net of cash acquired, subject to customary adjustments based on, among other things, the amount of cash, debt and working capital in the business of Boat Holdings at the closing date. A portion of the aggregate consideration equal to $100,000,000 will be paid in the form of a series of deferred annual payments over 12 years following the closing date. The Company funded the purchase price for the acquisition by amending, extending, and up-sizing the Credit Facility and with the proceeds of the issuance of 4.23% Senior Notes, Series 2018, due July 3, 2028, described in Note 5. The consolidated statements of income for both the three and nine months ended September 30, 2018 include $134,321,000 of net sales and $20,253,000 of gross profit related to Boats. The following table summarizes the preliminary fair values assigned to the Boat Holdings net assets acquired and the determination of net assets (in thousands):
Cash and cash equivalents | $ | 16,534 |
Trade receivables | 17,602 |
Inventory | 39,990 |
Other current assets | 3,938 |
Property, plant and equipment | 36,769 |
Customer relationships | 341,080 |
Trademarks / trade names | 210,680 |
Non-compete agreements | 2,630 |
Goodwill | 207,126 |
Accounts payable | (30,017 | )
Other liabilities assumed | (23,140 | )
Total fair value of net assets acquired | 823,192 |
Less cash acquired | (16,534 | )
Total consideration for acquisition, less cash acquired | $ | 806,658 |
On the acquisition date, amortizable intangible assets had a weighted-average useful life of approximately 19 years. The customer relationships were valued based on the Discounted Cash Flow Method and are amortized over 15-20 years, depending on the customer class. The trademarks and trade names were valued on the Relief from Royalty Method and have indefinite remaining useful lives. Goodwill is deductible for tax purposes. The following unaudited pro forma information represents the Company’s results of operations as if the fiscal 2018 acquisition of Boat Holdings had occurred at the beginning of fiscal 2017 (in thousands, except per share data).
| Three months ended September 30, |  | Nine months ended September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
Net sales | $ | 1,651,415 |  |  | $ | 1,593,659 |  |  | $ | 4,802,580 |  |  | $ | 4,410,691 |
Net income | 99,224 |  |  | 81,473 |  |  | 268,660 |  |  | 149,517 |
Basic earnings per share | $ | 1.60 |  |  | $ | 1.30 |  |  | $ | 4.27 |  |  | $ | 2.38 |
Diluted earnings per common share | $ | 1.56 |  |  | $ | 1.28 |  |  | $ | 4.16 |  |  | $ | 2.34 |
The results for the quarter and year-to-date periods ended September 30, 2018 and 2017 have been adjusted to include the pro forma impact of amortization of intangible assets and the depreciation of property, plant, and equipment, based on purchase price allocations; the pro forma impact of additional interest expense relating to the acquisition; the pro forma impact of transaction related costs incurred by the Company directly attributable to the transaction; and the pro forma tax effect of both income before taxes and the pro forma adjustments. These performance results may not be indicative of the actual results that would have occurred under the ownership and management of the Company. The results for the quarter and year-to-date periods ended September 30, 2018 have been adjusted to exclude the impact of approximately $4,849,000 and $8,918,000 of transaction related costs (pre-tax) incurred by the Company that are directly attributable to the transaction. The pro forma financial information has been prepared for comparative purposes only and includes certain adjustments, as noted above. The adjustments are estimates based on currently available information and actual amounts may differ materially from these estimates. They do not reflect the effect of costs or synergies that would have been expected to result from the integration of the Boat Holdings acquisition. 2017 Acquisitions. The Company did not complete any acquisitions in 2017.

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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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