XML 19 R8.htm IDEA: XBRL DOCUMENT
v3.5.0.2

Business Acquisition | 9 Months Ended
--- | ---
Sep. 30, 2016
Business Combinations [Abstract] |
Business Acquisition | 2. Business Acquisition On April 8, 2016, the Company acquired the outstanding shares of Harris Corporation’s composite aerostructures business for cash of $187 million, plus the assumption of certain liabilities. The Company funded the cash payable at closing by utilizing proceeds from a $550 million, unsecured credit facility agreement that was completed April 8, 2016 (see Note 14). The acquired entity has been renamed Albany Aerostructures Composites LLC (“AAC”), and is part of the Albany Engineered Composites (“AEC”) segment. The following table summarizes the provisional allocation of the purchase price of AAC to the fair value of the assets and liabilities acquired:
(in thousands) | April 8, 2016
Assets acquired |  |  |
Accounts receivable |  | $15,688 |
Inventories |  | 17,715 |
Prepaid expenses and other current assets |  | 402 |
Property, plant and equipment |  | 81,701 |
Intangibles |  | 59,360 |
Goodwill |  | 67,034 |
Total assets acquired |  | $241,900 |
Liabilities assumed |  |  |
Accounts payable |  | $8,745 |
Accrued liabilities |  | 2,364 |
Capital lease obligation |  | 16,927 |
Deferred income taxes |  | 25,318 |
Other noncurrent liabilities |  | 1,546 |
Total liabilities assumed |  | $54,900 |
Net assets acquired |  | $187,000 |
The Company is continuing to perform procedures to verify the value of assets and liabilities acquired, and the useful lives of amortizable assets. Accordingly, adjustments to the values in the above table may be required in future periods. Goodwill of $67.0 million reflects that the acquisition broadens and deepens AEC’s products, experience and manufacturing capabilities, and significantly increases opportunities for future growth. The goodwill is non-deductible for tax purposes. The seller has provided representations, warranties and indemnities customary for acquisition transactions, including indemnities for certain customer claims identified before closing. As of September 30, 2016, Accounts receivable includes $3.2 million which is expected to be recovered from the seller under the terms of the indemnity arrangement. In the course of performing its ongoing opening balance sheet procedures during the third quarter of 2016, management identified certain adjustments to the provisional value of assets and liabilities acquired reported in the Form 10-Q for the period ended June 30, 2016. The Consolidated Statement of Income for the third quarter of 2016 includes the cumulative effect of adjusting the provisional amounts, as illustrated in the table below:
(in thousands) |  | Increase / (decrease) to provisional amount |  | Additional expense / (income) in third quarter |  | Expense / (income) recognized in third quarter which relates to second quarter |  | Line item in the Statement of income affected
Assets: |  |  |  |  |  |  |  |  |  |  |
Accounts receivable, net |  | ($576 | ) |  | $ - |  |  | $ - |  |  |
Inventories, net |  | (12,024 | ) |  | (2,291 | ) |  | (1,282 | ) |  | Cost of goods sold
Property, plant and equipment, net |  | (4,101 | ) |  | 1,096 |  |  | 548 |  |  | Cost of goods sold
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Obligation under capital lease |  | (6,888 | ) |  | (325 | ) |  | (115 | ) |  | Interest expense
Deferred income tax liabilities |  | 25,318 |  |  | - |  |  | - |  |  |
Other noncurrent liabilities |  | 577 |  |  | 18 |  |  | 8 |  |  | Interest expense
Net increase to goodwill |  | $35,708 |  |  |  |  |  |  |  |  |
Net increase to income before income taxes |  |  |  |  | $(1,502 | ) |  | $(841 | ) |  |
The following table presents operational results of AAC that are included in the Consolidated Statements of Income:
(in thousands, except per share amounts) |  | Three months ended September 30, 2016 |  | April 8 to September 30, 2016
Net sales |  | $20,354 |  |  | $45,990 |
Operating income/(loss) |  | (1,460 | ) |  | 249 |
Income/(loss) before income taxes |  | (1,642 | ) |  | (377 | )
Net loss attributable to the Company |  | (985 | ) |  | (226 | )
Loss per share: |  |  |  |  |  |
Basic |  | ($0.03 | ) |  | ($0.01 | )
Diluted |  | ($0.03 | ) |  | ($0.01 | )
The Consolidated Statements of Income reflect operational activity of AAC for only the period subsequent to the closing, which affects comparability of results. The following table shows total Company pro forma statements of operations for the three- and nine-month periods ended September 30, 2016 and 2015, as if the acquisition had occurred on January 1, 2015. This pro forma information does not purport to represent what the Company’s actual results would have been if the acquisitions had occurred as of the date indicated, or what such results would be for any future periods.
|  | Unaudited - Pro forma
|  | Three months ended September 30, |  | Nine months ended September 30,
(in thousands, except per share amounts) |  | 2016 |  | 2015 |  | 2016 |  | 2015
Combined Net sales |  | $191,272 |  |  | $198,193 |  |  | $588,978 |  |  | $591,181 |
Combined Income before income taxes |  | $20,897 |  |  | $23,552 |  |  | $59,812 |  |  | $42,909 |
Pro forma increase/(decrease) to income before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Acquisition expenses |  | - |  |  | - |  |  | 5,367 |  |  | - |
Interest expense related to purchase price |  | - |  |  | (1,283 | ) |  | (1,382 | ) |  | (3,850 | )
Purchase accounting adjustments: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization on property, plant and equipment, and intangible assets |  | 548 |  |  | (1,821 | ) |  | (1,919 | ) |  | (4,367 | )
Valuation of contract inventories |  | (1,282 | ) |  | 970 |  |  | 1,109 |  |  | 2,939 |
Interest expense on asset retirement obligation |  | 8 |  |  | (8 | ) |  | (8 | ) |  | (25 | )
Interest expense on capital lease obligation |  | (115 | ) |  | 115 |  |  | 339 |  |  | 346 |
Pro forma Income before income taxes |  | 20,056 |  |  | 21,525 |  |  | 63,318 |  |  | 37,952 |
Pro forma Net Income attributable to the Company |  | $12,461 |  |  | $8,432 |  |  | $40,506 |  |  | $18,417

X
- 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=65885119&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=65885119&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=65885119&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=65885119&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=73530397&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 7 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1524-128463 Reference 9: 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 10: 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=73530397&loc=d3e4922-128472 Reference 11: 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=73530397&loc=d3e4934-128472 Reference 12: 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=73530397&loc=d3e4926-128472 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=73530397&loc=SL65897772-128472 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=65885119&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
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration