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Acquisitions, Goodwill And Other Intangible Assets

3 Months Ended

Mar. 31, 2018

Acquisitions, Goodwill And Other Intangible Assets [Abstract]

Goodwill And Other Intangible Assets

ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

Acquisitions During the Three Months Ended March 31, 2018

Hehr

In February 2018, the Company acquired substantially all of the business assets of Hehr International Inc. (“Hehr”), a manufacturer of windows and tempered and laminated glass for the RV, transit, specialty vehicle, and other adjacent industries, headquartered in Los Angeles, California. The preliminary purchase price was $50.1 million paid at closing, and is subject to potential post-closing adjustments related to net working capital. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Condensed Consolidated Statements of Income since the acquisition date. The Company is validating account balances and finalizing the valuation for the acquisition. The acquisition of this business was preliminarily recorded on the acquisition date as follows (in thousands):

Cash consideration	$	50,125
Customer relationships and other identifiable intangible assets	$	25,500
Net tangible assets	17,955
Total fair value of net assets acquired	$	43,455
Goodwill (tax deductible)	$	6,670

The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products.

Taylor Made

In January 2018, the Company acquired 100 percent of the equity interests of Taylor Made Group, LLC (“Taylor Made”), a marine supplier to boat builders and the aftermarket, as well as a key supplier to a host of other industrial end markets, headquartered in Gloversville, New York. The preliminary purchase price was $88.4 million, net of cash acquired, paid at closing, and is subject to potential post-closing adjustments related to net working capital. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Condensed Consolidated Statements of Income since the acquisition date. The Company is validating account balances and finalizing the valuation for the acquisition.

The acquisition of this business was preliminarily recorded on the acquisition date as follows (in thousands):

Cash consideration, net of cash acquired	$	88,445
Customer relationships	$	25,000
Other identifiable intangible assets	7,000
Net tangible assets	42,133
Total fair value of net assets acquired	$	74,133
Goodwill (tax deductible)	$	14,312

The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products.

Acquisitions During the Three Months Ended March 31, 2017

Sessa Klein S.p.A.

In February 2017, the Company acquired 100 percent of the outstanding shares of Sessa Klein S.p.A. (“Sessa Klein”), a manufacturer of highly engineered side window systems for both high speed and commuter trains, located near Varese, Italy. The purchase price was $8.5 million paid at closing, plus contingent consideration based on future sales by this operation. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Condensed Consolidated Statements of Income since the acquisition date. The acquisition of this business was recorded on the acquisition date as follows (in thousands):

Cash consideration, net of cash acquired	$	6,502
Contingent consideration	3,838
Total fair value of consideration given	$	10,340
Identifiable intangible assets	$	2,286
Net tangible assets	364
Total fair value of net assets acquired	$	2,650
Goodwill (not tax deductible)	$	7,690

Goodwill

Goodwill by reportable segment was as follows:

(In thousands)	OEM Segment				Aftermarket Segment				Total
Net balance – December 31, 2017	$	109,641			$	14,542			$	124,183
Acquisitions – 2018	17,785				3,197				20,982
Other	2,126				—				2,126
Net balance – March 31, 2018	$	129,552			$	17,739			$	147,291

Goodwill represents the excess of the total consideration given in an acquisition of a business over the fair value of the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but instead is tested at the reporting unit level for impairment annually in November, or more frequently if certain circumstances indicate a possible impairment may exist.

Changes in goodwill resulting from foreign currency translations and purchase accounting adjustments are presented as “Other” in the above table. Sessa Klein accounted for $1.4 million of the change in goodwill for the three months ended March 31, 2018.

Other Intangible Assets

Other intangible assets consisted of the following at March 31, 2018:

(In thousands)	Gross Cost				Accumulated Amortization				Net Balance				Estimated Useful Life in Years
Customer relationships	$	187,229			$	45,393			$	141,836			6	to	16
Patents	59,415				40,130				19,285				3	to	19
Trade names	14,833				5,607				9,226				3	to	15
Non-compete agreements	10,154				4,689				5,465				3	to	6
Other	309				117				192				2	to	12
Purchased research and development	4,687				—				4,687				Indefinite
Other intangible assets	$	276,627			$	95,936			$	180,691

Other intangible assets consisted of the following at March 31, 2017:

(In thousands)	Gross Cost				Accumulated Amortization				Net Balance				Estimated Useful Life in Years
Customer relationships	$	113,513			$	34,704			$	78,809			6	to	16
Patents	57,347				34,850				22,497				3	to	19
Trade names	9,741				4,494				5,247				3	to	15
Non-compete agreements	6,076				3,230				2,846				3	to	6
Other	309				84				225				2	to	12
Purchased research and development	4,687				—				4,687				Indefinite
Other intangible assets	$	191,673			$	77,362			$	114,311

Other intangible assets consisted of the following at December 31, 2017:

(In thousands)	Gross Cost				Accumulated Amortization				Net Balance				Estimated Useful Life in Years
Customer relationships	$	138,687			$	42,276			$	96,411			6	to	16
Patents	57,576				38,764				18,812				3	to	19
Trade names	10,995				5,381				5,614				3	to	15
Non-compete agreements	8,536				4,128				4,408				3	to	6
Other	309				109				200				2	to	12
Purchased research and development	4,687				—				4,687				Indefinite
Other intangible assets	$	220,790			$	90,658			$	130,132

Acquisitions

ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

Acquisitions During the Three Months Ended March 31, 2018

Hehr

In February 2018, the Company acquired substantially all of the business assets of Hehr International Inc. (“Hehr”), a manufacturer of windows and tempered and laminated glass for the RV, transit, specialty vehicle, and other adjacent industries, headquartered in Los Angeles, California. The preliminary purchase price was $50.1 million paid at closing, and is subject to potential post-closing adjustments related to net working capital. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Condensed Consolidated Statements of Income since the acquisition date. The Company is validating account balances and finalizing the valuation for the acquisition. The acquisition of this business was preliminarily recorded on the acquisition date as follows (in thousands):

Cash consideration	$	50,125
Customer relationships and other identifiable intangible assets	$	25,500
Net tangible assets	17,955
Total fair value of net assets acquired	$	43,455
Goodwill (tax deductible)	$	6,670

The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products.

Taylor Made

In January 2018, the Company acquired 100 percent of the equity interests of Taylor Made Group, LLC (“Taylor Made”), a marine supplier to boat builders and the aftermarket, as well as a key supplier to a host of other industrial end markets, headquartered in Gloversville, New York. The preliminary purchase price was $88.4 million, net of cash acquired, paid at closing, and is subject to potential post-closing adjustments related to net working capital. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Condensed Consolidated Statements of Income since the acquisition date. The Company is validating account balances and finalizing the valuation for the acquisition.

The acquisition of this business was preliminarily recorded on the acquisition date as follows (in thousands):

Cash consideration, net of cash acquired	$	88,445
Customer relationships	$	25,000
Other identifiable intangible assets	7,000
Net tangible assets	42,133
Total fair value of net assets acquired	$	74,133
Goodwill (tax deductible)	$	14,312

The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products.

Acquisitions During the Three Months Ended March 31, 2017

Sessa Klein S.p.A.

In February 2017, the Company acquired 100 percent of the outstanding shares of Sessa Klein S.p.A. (“Sessa Klein”), a manufacturer of highly engineered side window systems for both high speed and commuter trains, located near Varese, Italy. The purchase price was $8.5 million paid at closing, plus contingent consideration based on future sales by this operation. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Condensed Consolidated Statements of Income since the acquisition date. The acquisition of this business was recorded on the acquisition date as follows (in thousands):

Cash consideration, net of cash acquired	$	6,502
Contingent consideration	3,838
Total fair value of consideration given	$	10,340
Identifiable intangible assets	$	2,286
Net tangible assets	364
Total fair value of net assets acquired	$	2,650
Goodwill (not tax deductible)	$	7,690

Goodwill

Goodwill by reportable segment was as follows:

(In thousands)	OEM Segment				Aftermarket Segment				Total
Net balance – December 31, 2017	$	109,641			$	14,542			$	124,183
Acquisitions – 2018	17,785				3,197				20,982
Other	2,126				—				2,126
Net balance – March 31, 2018	$	129,552			$	17,739			$	147,291

Goodwill represents the excess of the total consideration given in an acquisition of a business over the fair value of the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but instead is tested at the reporting unit level for impairment annually in November, or more frequently if certain circumstances indicate a possible impairment may exist.

Changes in goodwill resulting from foreign currency translations and purchase accounting adjustments are presented as “Other” in the above table. Sessa Klein accounted for $1.4 million of the change in goodwill for the three months ended March 31, 2018.

Other Intangible Assets

Other intangible assets consisted of the following at March 31, 2018:

(In thousands)	Gross Cost				Accumulated Amortization				Net Balance				Estimated Useful Life in Years
Customer relationships	$	187,229			$	45,393			$	141,836			6	to	16
Patents	59,415				40,130				19,285				3	to	19
Trade names	14,833				5,607				9,226				3	to	15
Non-compete agreements	10,154				4,689				5,465				3	to	6
Other	309				117				192				2	to	12
Purchased research and development	4,687				—				4,687				Indefinite
Other intangible assets	$	276,627			$	95,936			$	180,691

Other intangible assets consisted of the following at March 31, 2017:

(In thousands)	Gross Cost				Accumulated Amortization				Net Balance				Estimated Useful Life in Years
Customer relationships	$	113,513			$	34,704			$	78,809			6	to	16
Patents	57,347				34,850				22,497				3	to	19
Trade names	9,741				4,494				5,247				3	to	15
Non-compete agreements	6,076				3,230				2,846				3	to	6
Other	309				84				225				2	to	12
Purchased research and development	4,687				—				4,687				Indefinite
Other intangible assets	$	191,673			$	77,362			$	114,311

Other intangible assets consisted of the following at December 31, 2017:

(In thousands)	Gross Cost				Accumulated Amortization				Net Balance				Estimated Useful Life in Years
Customer relationships	$	138,687			$	42,276			$	96,411			6	to	16
Patents	57,576				38,764				18,812				3	to	19
Trade names	10,995				5,381				5,614				3	to	15
Non-compete agreements	8,536				4,128				4,408				3	to	6
Other	309				109				200				2	to	12
Purchased research and development	4,687				—				4,687				Indefinite
Other intangible assets	$	220,790			$	90,658			$	130,132

X

- Definition

Acquisitions Goodwill And Other Intangible Assets Abstract

+ References

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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://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-URI http://asc.fasb.org/topic&trid=2303972

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The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-URI http://asc.fasb.org/topic&trid=2144416

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