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Acquisitions | 6 Months Ended
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Jun. 30, 2015
Business Combinations [Abstract] |
Acquisitions | ACQUISITIONS On June 9, 2015, the Company acquired all of the outstanding stock of Rough Brothers Manufacturing, Inc. and RBI Solar, Inc., and affiliates, collectively known as "RBI". RBI is among the largest greenhouse manufacturers in North America and has also established itself during the past five years among North America’s fastest-growing providers of photovoltaic solar racking solutions. RBI designs and manufactures greenhouses for commercial, institutional and retail customers as well as designs, engineers, manufactures and installs solar racking systems for utility ground mounts, carports and residential rooftops. The acquisition of RBI will enable the Company to leverage its expertise in structural metals manufacturing and materials sourcing to help meet the fast-growing global demand for solar racking solutions. The results of RBI have been included in the Company’s consolidated financial results since the date of acquisition. As of the filing of this report, the Company continues to reassess its reporting segments. As such, the Company has disclosed in footnote 16 the RBI operating segment separately for the three and six month periods ended June 30, 2015. The aggregate purchase consideration for the acquisition of RBI was approximately $142,690,000 as of June 30, 2015, net of a working capital adjustment and certain other adjustments included in the stock purchase agreement of approximately $8,372,000 which the Company expects to remit during the third quarter of 2015. The purchase price for the acquisition was preliminarily allocated to the assets acquired and liabilities assumed based upon their respective fair values. The excess consideration of $56,975,000, was recorded as goodwill of which $38,626,000 is deductible for tax purposes. Goodwill represents future economic benefits arising from other assets acquired that could not be individually identified including workforce additions, growth opportunities, and increased presence in the building products markets. The allocation of the preliminary purchase consideration to the fair value of the assets acquired and liabilities assumed is as follows as of the date of the acquisition (in thousands):
Working capital | $ | 21,297 |
Property, plant, and equipment | 12,906 |
Acquired intangible assets | 56,392 |
Other assets | 3,214 |
Deferred income taxes | (4,953 | )
Other liabilities | (3,141 | )
Goodwill | 56,975 |
Fair value of purchase consideration | $ | 142,690 |
The Company recorded an indemnification asset and liability of $3.0 million on the opening balance sheet related to the seller’s obligation to fully indemnify the Company for the outcome of potential contingent liabilities related to uncertainty in income taxes in foreign jurisdictions. The liability and related indemnification asset may or may not be realized, and the liability will expire in 2018. The intangible assets acquired in this acquisition consisted of the following (in thousands):
| Fair Value |  | Estimated Useful Life
Trademarks | $ | 13,550 |  |  | Indefinite
Technology | 3,550 |  |  | 7-15 years
Customer relationships | 32,892 |  |  | 11-17 years
Non-compete agreements | 1,300 |  |  | 5 years
Backlog | 5,100 |  |  | 0.5 years
Total | $ | 56,392 |  |  |
The acquisition was financed through cash on hand and borrowings under the Company's revolving credit facility. The Company incurred certain acquisition-related costs composed of legal and consulting fees, and these costs were recognized as a component of selling, general and administrative expenses in the consolidated statement of operations. The Company also recognized acquisition-related costs for the sale of inventory at fair value which was a portion of the purchase price allocation of this acquisition. The acquisition related costs consisted of the following for the three months and six months ended June 30, 2015 (in thousands):
Selling, general and administrative costs | $ | 1,795 |
Cost of sales | 58 |
Total acquisition related costs | $ | 1,853 |
The following unaudited pro forma financial information presents the combined results of operations as if the acquisition of RBI had occurred as of January 1, 2014. The pro forma information includes certain adjustments, including depreciation and amortization expense, interest expense and certain other adjustments, together with related income tax effects. The pro forma amounts may not be indicative of the results that actually would have been achieved had the acquisitions occurred as of January 1, 2014 and are not necessarily indicative of future results of the combined companies (in thousands, except per share data):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2015 |  | 2014 |  | 2015 |  | 2014
Net sales | $ | 300,005 |  |  | $ | 261,918 |  |  | $ | 540,543 |  |  | $ | 479,711 |
Net income | $ | 8,824 |  |  | $ | 5,181 |  |  | $ | 14,193 |  |  | $ | 5,104 |
Net income per share - Basic | $ | 0.28 |  |  | $ | 0.17 |  |  | $ | 0.45 |  |  | $ | 0.16 |
Net income per share -Diluted | $ | 0.28 |  |  | $ | 0.17 |  |  | $ | 0.45 |  |  | $ | 0.16 |
In September 2013, the Company purchased the assets of a domestic designer and distributor of solar-powered roof and attic ventilation products. The results of this acquisition have been included in the Company’s consolidated financial results since the date of acquisition (included in the Company’s Residential Products segment). The fair value of the aggregate purchase consideration for the assets acquired was $7,454,000. As part of the purchase agreement, the Company is required to pay additional consideration under an earn-out provision, based on the acquired business’s EBITDA (Earnings Before Interest, Taxes Depreciation and Amortization) through the last day of the twenty-fourth month following the closing date of the acquisition. The Company expects to make payments of additional consideration through the end of 2015. The purchase agreement does not provide for a limit of the amount of additional consideration. The Company recorded a payable of $2,322,000 to reflect the fair value of the Company’s obligation at the date of the acquisition. Adjustments to this payable are and will be reflected in the Company’s Statement of Operations. The fair value of the Company’s obligation was $61,000 as of June 30, 2015, which resulted in a $252,000 and a $480,000 gain recorded in SG&A during the three and six months ended June 30, 2015, respectively. The Company also recorded $4,000 and $8,000 to interest expense for this obligation during the three and six months ended June 30, 2015. The purchase price for the acquisition was allocated to the assets acquired and liabilities assumed based upon their respective fair values. The excess consideration was recorded as goodwill and totaled $2,466,000, all of which is deductible for tax purposes. Goodwill represents future economic benefits arising from other assets acquired that could not be individually identified including workforce additions, growth opportunities, and increased presence in the building products markets. The allocation of purchase consideration to the fair value of the assets acquired and liabilities assumed during 2013 were as follows as of the date of the acquisition (in thousands):
Working capital | $ | 2,665 |
Property, plant, and equipment | 153 |
Acquired intangible assets | 2,170 |
Goodwill | 2,466 |
Fair value of purchase consideration | $ | 7,454 |
The intangible assets acquired in this acquisition consisted of the following (in thousands):
| Fair Value |  | Estimated Useful Life
Trademarks | $ | 640 |  |  | Indefinite
Technology | 260 |  |  | 15 years
Customer relationships | 1,130 |  |  | 15 years
Non-compete agreements | 140 |  |  | 5 years
Total | $ | 2,170 |  |  |
The 2013 acquisition was financed through cash on hand. The Company incurred certain acquisition-related costs composed of legal and consulting fees, and these costs were recognized as a component of selling, general and administrative expenses in the consolidated statement of operations. The Company also recognized costs related to the sale of inventory at fair value as a result of allocating the purchase price of this acquisition. All acquisition related costs (including the gain recognized as a result of the calculation of the earn-out obligation at fair value) consisted of the following (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2015 |  | 2014 |  | 2015 |  | 2014
Selling, general and administrative costs | $ | (252 | ) |  | $ | (742 | ) |  | $ | (480 | ) |  | $ | (740 | )
Cost of sales | — |  |  | — |  |  | — |  |  | 206 |
Total acquisition related costs | $ | (252 | ) |  | $ | (742 | ) |  | $ | (480 | ) |  | $ | (534 | )

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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 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4845-128472 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4922-128472 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4934-128472 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4926-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 + Details
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