(

)

Acquisition

February 1, 2018

the Company purchased

100%

of the outstanding shares of common stock of Dielectrics Inc. for an aggregate purchase price of

$80

million in cash.

The purchase price was subject to adjustment based upon Dielectrics’ working capital at closing. An additional

$250,000

of consideration is due to be paid by the Company as a result of the final working capital adjustment. A portion of the purchase price is being held in escrow to indemnify the Company against certain claims, losses and liabilities. The Purchase Agreement contains customary representations, warranties and covenants customary for transactions of this type.

Founded in

1954

and based in Chicopee, Massachusetts, Dielectrics is a leader in the design, development, and manufacture of medical devices using thermoplastic materials. They primarily use radio frequency and impulse welding to design and manufacture solutions for the medical industry. In addition to the long-standing customer relationships, they bring to the Company a seasoned management team and a profitable book of business. The Company has leased the Chicopee location from a realty trust owned by the selling shareholder and affiliates. The lease is for

five

years with

two five

-year renewal options.

The following table summarizes the preliminary allocation of consideration paid to the acquisition date fair value of the assets acquired and liabilities assumed based on management’s estimates of fair value. The final purchase price allocation

may

change based on final appraisals, valuations and analysis of the fair value of the acquired assets and assumed liabilities (in thousands):

Consideration Paid:
Cash paid at closing	$	80,000
Working capital adjustment		250
Cash from Dielectrics		(3,272	)
Total consideration	$	76,978

Purchase Price Allocation:
Accounts receivable	$	4,384
Inventory		4,418
Other current assets		122
Property, Plant and Equipment		4,600
Customer list		22,555
Non-compete		462
Trade name and brand		367
Goodwill		44,516
Total identifiable assets	$	81,424
Accounts payable		(1,325	)
Accrued expenses		(946	)
Deferred revenue		(2,175	)
Net Assets acquired	$	76,978

Acquisition costs associated with the transaction were approximately

$1.1

million and were charged to expense in the

three

-month period ended

March 31, 2018.

These costs were primarily for investment banking and legal fees and are reflected on the face of the income statement.

The following table contains an unaudited pro forma condensed consolidated statement of operations for the

three

month periods ended

March 31, 2018

and

2017,

as if the Dielectrics acquisition had occurred at the beginning of each of the respective periods (in thousands):

	Three-month Period Ended March 31,
	2018		2017
	(Unaudited)		(Unaudited)
Sales	$	45,986	$	47,428
Operating Income	$	3,489	$	4,368
Net Income	$	2,375	$	2,681
Earnings per share
Basic	$	0.33	$	0.37
Diluted	$	0.32	$	0.37

The above unaudited pro forma information is presented for illustrative purposes only and

may

not

be indicative of the results of operations that would have actually occurred had the Dielectrics acquisition occurred as presented. In addition, future results

may

vary significantly from the results reflected in such pro forma information.

The amount of revenue and net income of Dielectrics recognized since the acquisition date, which is included in the condensed consolidated statement of income for the period ended

March 31, 2018,

was approximately

$6.0

million and

$1.1

million, respectively.