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Acquisitions, Goodwill And Other Intangible Assets | 12 Months Ended
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Dec. 31, 2018
Acquisitions, Goodwill And Other Intangible Assets [Abstract] |
Acquisitions, Goodwill and Other Intangible Assets | ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS Acquisitions in 2018 Smoker Craft Furniture In November 2018, the Company acquired the business and certain assets of the furniture manufacturing operation of Smoker Craft Inc., (“Smoker Craft”), a leading pontoon, aluminum fishing, and fiberglass boat manufacturer located in New Paris, Indiana. The purchase price was $28.1 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the 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 | $ | 28,091
Customer relationship and other identifiable intangible assets | $ | 18,540
Net tangible assets | 1,357
Total fair value of net assets acquired | $ | 19,897
Goodwill (tax deductible) | $ | 8,194
The customer relationship 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. ST.LA. S.r.l. In June 2018, the Company acquired 100 percent of the equity interests of ST.LA. S.r.l., (“STLA”), a manufacturer of bed lifts and other RV components for the European caravan market, headquartered in Pontedera, Italy. The purchase price was $14.8 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 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 | $ | 14,845
Customer relationships and other identifiable intangible assets | $ | 7,000
Net tangible assets | 296
Total fair value of net assets acquired | $ | 7,296
Goodwill (not tax deductible) | $ | 7,549
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. 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 purchase price was $51.5 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Consolidated Statements of Income since the acquisition date. The allocation of the purchase price was as follows (in thousands):
Cash consideration | $ | 51,460
Customer relationships and other identifiable intangible assets | $ | 21,500
Net tangible assets | 11,990
Total fair value of net assets acquired | $ | 33,490
Goodwill (tax deductible) | $ | 17,970
The customer relationships intangible asset is being amortized over its estimated useful life of 13 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 purchase price was $90.4 million, net of cash acquired, paid at closing. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Consolidated Statements of Income since the acquisition date. The allocation of the purchase price was as follows (in thousands):
Cash consideration, net of cash acquired | $ | 90,396
Customer relationships | $ | 10,900
Trade name | 7,600
Other identifiable intangible assets | 4,200
Net tangible assets | 45,342
Total fair value of net assets acquired | $ | 68,042
Goodwill (tax deductible) | $ | 22,354
The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The trade name intangible asset was determined to have an indefinite life and is not amortized, but will be evaluated annually for impairment. 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 in 2017 Metallarte S.r.l. In June 2017, the Company acquired 100 percent of the equity interests of Metallarte S.r.l., (“Metallarte”), a manufacturer of entry and compartment doors for the European caravan market located near Siena, Italy, and its subsidiary, RV Doors, S.r.l., a manufacturer of driver-side doors located near Venice, Italy. The purchase price was $14.1 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 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 | $ | 13,501
Contingent consideration | 2,366
Total fair value of consideration given | $ | 15,867
Customer relationships | $ | 7,311
Other identifiable intangible assets | 1,942
Net other liabilities | (327)
Total fair value of net assets acquired | $ | 8,926
Goodwill (not tax deductible) | $ | 6,941
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. Lexington In May 2017, the Company acquired the business and certain assets of Lexington LLC, (“Lexington”), a manufacturer of high quality seating solutions for the marine, RV, transportation, medical and office furniture industries located in Elkhart, Indiana. The purchase price was $40.1 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the 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 | $ | 40,062
Customer relationships | $ | 16,900
Other identifiable intangible assets | 1,820
Net tangible assets | 4,928
Total fair value of net assets acquired | $ | 23,648
Goodwill (tax deductible) | $ | 16,414
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. SessaKlein S.p.A. In February 2017, the Company acquired 100 percent of the outstanding shares of SessaKlein S.p.A., (“SessaKlein”), a manufacturer of highly engineered side window systems for both high speed and commuter trains, located near Varese, Italy. The purchase price was $6.5 million paid at closing, net of cash acquired, 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 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
Acquisitions in 2016 Camping Connection In November 2016, the Company acquired the service centers and related business of Camping Connection, Inc., an RV repair and service provider located in Myrtle Beach, South Carolina and Kissimmee, Florida. The purchase price was $2.0 million paid at closing. Atwood Seating and Chassis Components In November 2016, the Company acquired the business, manufacturing facility and certain assets of the seating and chassis components business of Atwood Mobile Products, LLC, (“Atwood”), a subsidiary of Dometic Group, located in Elkhart, Indiana. The purchase price was $12.5 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the 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 | $ | 12,463
Customer relationships | $ | 1,500
Net other assets | 10,915
Total fair value of net assets acquired | $ | 12,415
The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. Project 2000 S.r.l. In May 2016, the Company acquired 100 percent of the equity interest of Project 2000 S.r.l., (“Project 2000”), a manufacturer of innovative, space-saving bed lifts and retractable steps, located near Florence, Italy. The purchase price was $18.8 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 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 | $ | 16,618
Contingent consideration | 1,322
Total fair value of consideration given | $ | 17,940
Customer relationships | $ | 9,696
Other identifiable intangible assets | 6,141
Net other liabilities | (3,482)
Total fair value of net assets acquired | $ | 12,355
Goodwill (not tax deductible) | $ | 5,585
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. Flair Interiors In February 2016, the Company acquired the business and certain assets of Flair Interiors, Inc., (“Flair”), a manufacturer of RV furniture located in Goshen, Indiana. The purchase price was $8.1 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the 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 | $ | 8,100
Customer relationships | $ | 3,700
Net other assets | 2,378
Total fair value of net assets acquired | $ | 6,078
Goodwill (tax deductible) | $ | 2,022
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. Highwater Marine Furniture In January 2016, the Company acquired the business and certain assets of the pontoon furniture manufacturing operation of Highwater Marine, LLC, (“Highwater”), a leading manufacturer of pontoon and other recreational boats located in Elkhart, Indiana. The purchase price was $10.0 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the 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 | $ | 10,000
Customer relationship | $ | 8,100
Net tangible assets | 1,307
Total fair value of net assets acquired | $ | 9,407
Goodwill (tax deductible) | $ | 593
The customer relationship 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 leveraging its existing experience and manufacturing capacity with respect to these product lines. Goodwill Changes in the carrying amount of goodwill by reportable segment were as follows:
(In thousands) | OEM Segment |  | Aftermarket Segment |  | Total
Net balance – December 31, 2016 | $ | 74,663 |  | $ | 14,535 |  | $ | 89,198
Acquisitions – 2017 | 29,772 |  | — |  | 29,772
Other | 5,206 |  | 7 |  | 5,213
Net balance – December 31, 2017 | 109,641 |  | 14,542 |  | 124,183
Acquisitions – 2018 | 50,698 |  | 5,369 |  | 56,067
Other | (82) |  | — |  | (82)
Net balance – December 31, 2018 | $ | 160,257 |  | $ | 19,911 |  | $ | 180,168
The Company performed its annual goodwill impairment procedures for all of its reporting units as of November 30, 2018, 2017 and 2016, and concluded no goodwill impairment existed at that time. The Company plans to update its assessment as of November 30, 2019, or sooner if events occur or circumstances change that could more likely than not reduce the fair value of a reporting unit below its carrying value. In conjunction with the Company’s change in reportable segments during the second quarter of 2016, goodwill was reassigned to reporting units using a relative fair value allocation. In addition, the Company completed an assessment of any potential goodwill impairment for all reporting units immediately prior to the reallocation and determined that no impairment existed. The goodwill balance as of each of December 31, 2018, 2017 and 2016 included $50.5 million of accumulated impairment, which occurred prior to December 31, 2016. Any change in the goodwill amounts resulting from foreign currency translations and purchase accounting adjustments are presented as “Other” in the above table. Other Intangible Assets Other intangible assets, by segment, at December 31 were as follows:
(In thousands) | 2018 |  | 2017
OEM Segment | $ | 159,803 |  | $ | 116,648
Aftermarket Segment | 16,539 |  | 13,484
Other intangible assets | $ | 176,342 |  | $ | 130,132
Other intangible assets consisted of the following at December 31, 2018:
(In thousands) | Gross Cost |  | Accumulated Amortization |  | Net Balance |  | Estimated Useful Life in Years |  |
Customer relationships | $ | 191,919 |  | $ | 54,889 |  | $ | 137,030 |  | 6 | to | 16
Patents | 58,787 |  | 40,079 |  | 18,708 |  | 3 | to | 19
Trade names (finite life) | 10,885 |  | 5,507 |  | 5,378 |  | 3 | to | 15
Trade names (indefinite life) | 7,600 |  | — |  | 7,600 |  | Indefinite |  |
Non-compete agreements | 6,919 |  | 4,148 |  | 2,771 |  | 3 | to | 6
Other | 309 |  | 141 |  | 168 |  | 2 | to | 12
Purchased research and development | 4,687 |  | — |  | 4,687 |  | Indefinite |  |
Other intangible assets | $ | 281,106 |  | $ | 104,764 |  | $ | 176,342 |  |  |  |
The Company performed its annual intangible asset and other long-lived asset impairment procedures for all of its reporting units as of November 30, 2018, 2017 and 2016, and concluded no intangible asset and other long-lived asset impairment existed at that time. 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 |  |  |  |
Amortization expense related to other intangible assets was as follows for the years ended December 31:
(In thousands) | 2018 |  | 2017 |  | 2016
Cost of sales | $ | 5,350 |  | $ | 5,631 |  | $ | 5,967
Selling, general and administrative | 15,912 |  | 13,942 |  | 11,791
Amortization expense | $ | 21,262 |  | $ | 19,573 |  | $ | 17,758
Estimated amortization expense for other intangible assets for the next five years is as follows:
(In thousands) | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023
Cost of sales | $ | 4,600 |  | $ | 3,200 |  | $ | 2,300 |  | $ | 1,700 |  | $ | 1,300
Selling, general and administrative | 17,000 |  | 16,000 |  | 15,400 |  | 15,000 |  | 14,300
Amortization expense | $ | 21,600 |  | $ | 19,200 |  | $ | 17,700 |  | $ | 16,700 |  | $ | 15,600

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