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Acquisitions | 12 Months Ended
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Mar. 01, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisitions | Acquisitions On November 4, 2024, we completed the acquisition of UW Solutions for $240.9 million in cash. UW Solutions is a U.S. based, vertically integrated manufacturer of high-performance coated substrates with a portfolio of well-known brands, including ResinDEK, ChromaLuxe, RDC Coatings, and Unisub, each known as a leader in its specified applications. The UW Solutions business activity is included in our Performance Surfaces Segment. The total purchase consideration was $232.2 million in cash, net of a favorable net working capital adjustment of $0.9 million and cash acquired of $8.7 million. The acquisition was funded with cash on hand and borrowings under our existing credit agreement. During fiscal 2025, we incurred pre-tax acquisition-related expenses of $10.3 million associated with the UW Solutions acquisition. We incurred $1.5 million for inventory step-up expense and $0.2 million of transaction costs which were included in costs of sales as well as $4.2 million of transaction costs, $2.1 million of integration costs, and $2.3 million of amortization of acquired backlog, which were included in SG&A within our consolidated results of operations. We accounted for the acquisition as a purchase of a business and recorded the excess of the purchase price over the estimated fair value of the assets acquired and liabilities assumed as goodwill of $107.8 million. The goodwill recognized is attributable primarily to expected synergies by integrating UW Solutions into our Performance Surfaces Segment and by creating a scalable growth platform in the specialty coatings and materials market. The acquired goodwill is expected to be amortized and deductible for income tax purposes. We have provisionally determined the appropriate fair values of the acquired intangible assets and completed our analysis of the economic lives of the assets acquired. We assigned $21.0 million to a tradename asset and are amortizing it over a 15-year expected life. We assigned $2.3 million to a contract backlog asset and amortized it over a 4-month life. We assigned $47.4 million to a customer relationship asset and are amortizing a portion over a 10-year expected life and the remainder over a 15-year expected life, based on historical customer attrition rates. We assigned $7.8 million to a developed technology asset and are amortizing over a 7.5-year expected life. The following table presents the estimated fair values of assets acquired and liabilities assumed at the acquisition date:
(In thousands) |  |
Assets: |  |
Cash and cash equivalents |  | $ | 8,703 |
Receivables, net |  | 12,427 |
Inventories, net |  | 17,903 |
Other current assets |  | 1,122 |
Property, plant and equipment |  | 26,563 |
Operating lease right-of-use assets |  | 14,189 |
Goodwill |  | 107,826 |
Intangible assets, net |  | 79,679 |
Other non-current assets |  | 166 |
Total Assets |  | $ | 268,578 |
Liabilities: |  |
Accounts payable |  | 5,126 |
Accrued compensation and benefits |  | 6,900 |
Operating lease liabilities |  | 1,259 |
Other current liabilities |  | 1,490 |
Non-current operating lease liabilities |  | 12,930 |
Total Liabilities |  | $ | 27,705 |
Net assets recorded |  | $ | 240,873 |
The impact of the acquisition of UW Solutions on our consolidated results of operations for fiscal 2025 was $32.0 million of net sales and $7.4 million of net loss, respectively. The net sales and net loss represent approximately 17 weeks of operating results. The following supplemental unaudited pro forma information presents our financial results as if the acquisition of UW Solutions had occurred on February 26, 2023. This supplemental pro forma information has been prepared for comparative purposes and would not necessarily indicate what may have occurred if the acquisition had been completed on February 26, 2023, and this information is not intended to be indicative of future results.
(in thousands, except earnings per share data) (Unaudited) |  |  |  |  |  | 2025 |  | 2024 |
Net sales |  |  |  |  |  | $ | 1,423,635 |  |  | $ | 1,513,734 |  |
Net earnings |  |  |  |  |  | 90,978 |  |  | 83,256 |  |
Earnings per share: |  |  |  |  |  |  |  |  |
Basic |  |  |  |  |  | $ | 4.19 |  |  | $ | 3.81 |  |
Diluted |  |  |  |  |  | $ | 4.16 |  |  | $ | 3.77 |  |
Nonrecurring charges of $4.4 million of transaction costs, $2.1 million of integration costs, $2.3 million of amortization of acquired backlog, and $1.5 million of inventory step-up expense incurred in fiscal 2025 are reflected as if those charges were incurred in the first and second quarters of the fiscal 2024 supplemental pro forma earnings. These amounts have been calculated after applying our accounting policies and adjusting the results of UW Solutions to reflect the effect of definite-lived intangible assets recognized as part of the business combination on amortization expense as if the acquisition had occurred on February 26, 2023.

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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/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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