Business Combination, Goodwill and Other Intangible Assets (Tables)

9 Months Ended

May 26, 2018

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The final allocation of the purchase price to assets acquired and liabilities assumed was as follows:



(In thousands)	November 8, 2016
Cash	$	1,748
Accounts receivable	32,834
Inventories	15,300
Prepaid expenses and other assets	3,037
Property, plant and equipment	8,998
Goodwill	243,456
Other intangible assets	253,100
Total assets acquired	558,473

Accounts payable	11,163
Accrued compensation	3,615
Product warranties	12,904
Promotional	3,976
Other	1,496
Deferred tax liabilities	4,811
Total liabilities assumed	37,965
Total purchase price	$	520,508

We acquired 100% of the ownership interests of Grand Design on November 8, 2016 in accordance with the Securities Purchase Agreement for an aggregate purchase price of $520.5 million, which was paid in cash and Winnebago shares as follows:



(In thousands, except shares and per share data)	November 8, 2016
Cash	$	396,442
Winnebago shares: 4,586,555 at $27.05 per share	124,066
Total	$	520,508

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The allocation of the purchase price to the net assets acquired and liabilities assumed resulted in the recognition of intangible assets with fair value on the closing date of November 8, 2016 and amortization accumulated from the closing date through May 26, 2018 as follows:



		May 26, 2018					August 26, 2017
(In thousands)	Weighted Average Life-Years	Cost			Accumulated Amortization		Cost			Accumulated Amortization
Trade name	Indefinite	$	148,000		$	—	$	148,000		$	—
Dealer network	12.0	80,500			10,365		80,500			5,348
Backlog	0.5	18,000			18,000		18,000			18,000
Non-compete agreements	4.0	4,600			1,836		4,600			1,116
Leasehold interest-favorable	8.1	2,000			380		2,000			196
Total		253,100			$	30,581	253,100			$	24,660
Accumulated amortization		(30,581		)			(24,660		)
Net book value of intangible assets		$	222,519				$	228,440

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Remaining estimated aggregate annual amortization expense by fiscal year is as follows:



(In thousands)	Amount
Remainder of 2018	$	1,933
2019	7,733
2020	7,733
2021	7,733
2022	7,106
Thereafter	42,281

Business Acquisition, Pro Forma Information [Table Text Block]

The following table provides net revenues and operating income (which includes amortization expense) from the Grand Design business included in our consolidated results during the nine months ended May 26, 2018 and May 27, 2017 following the November 8, 2016 closing date:



	Nine Months Ended
(In thousands)	May 26, 2018		May 27, 2017
Net revenues	$	719,030	$	366,309
Operating income	91,452		27,083

Unaudited pro forma information is as follows:



	Nine Months Ended
(In thousands, except per share data)	May 26, 2018		May 27, 2017⁽¹⁾
Net revenues	$	1,480,641	$	1,187,849
Net income	72,675		66,009
Income per share - basic	2.30		2.09
Income per share - diluted	2.28		2.08


(1)	Net income and income per share include the increased benefit of $16.3 million, net of tax, associated with the termination of the postretirement health care plan in Fiscal 2017.

The unaudited pro forma data above includes the following significant non-recurring adjustments made to account for certain costs, which would have changed if the acquisition of Grand Design had been completed on August 30, 2015:



	Nine Months Ended
(In thousands)	May 26, 2018			May 27, 2017⁽¹⁾
Amortization of intangibles (1 year or less useful life)	$	(122	)	$	(18,601	)
Increase in amortization of intangibles	—			1,551
Expenses related to business combination (transaction costs)	(50		)	(6,432		)
Interest to reflect new debt structure	—			3,672
Taxes related to the adjustments to the pro forma data and to the income of Grand Design	64			11,513


(1)	Pro forma transaction costs include $0.1 million incurred by Grand Design prior to acquisition.