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Acquisitions | 9 Months Ended
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Nov. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisitions | Acquisitions On November 4, 2024, we completed the acquisition of UW Solutions for $241.8 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 Large-Scale Optical Segment. The total purchase consideration was $233.1 million in cash, net of a preliminary net working capital adjustment of $1.8 million and cash acquired of $8.7 million. The acquisition was funded with cash on hand and borrowings under our existing credit agreement. During the third quarter of fiscal 2025, we incurred pre-tax acquisition-related expenses of $5.9 million associated with the UW Solutions acquisition. We incurred $0.4 million for inventory step-up expense which was included in costs of sales as well as $3.7 million of transaction costs, $0.9 million of integration costs, and $0.8 million of amortization of acquired backlog, which was 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 $106.3 million. The goodwill recognized is attributable primarily to expected synergies by integrating UW Solutions into our Large-Scale Optical Segment and by creating a scalable growth platform in the specialty coatings and materials market. The 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 tradenames and are amortizing over a 15-year expected life. We assigned $3.2 million to contract backlog and are amortizing over a 4-month expected life. We assigned $47.4 million to customer relationships 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 developed technology and are amortizing over a 7.5-year expected life. The following table presents the preliminary estimated fair values of assets acquired and liabilities assumed at the acquisition date:
(In thousands) |  |
Assets: |  |
Cash and cash equivalents |  | $ | 8,703 |
Receivables, net |  | 12,673 |
Inventories, net |  | 19,805 |
Other current assets |  | 1,335 |
Property, plant, and equipment |  | 27,701 |
Operating lease right-of-use assets |  | 14,268 |
Intangible assets |  | 79,420 |
Goodwill |  | 106,264 |
Other non-current assets |  | 166 |
Total Assets |  | $ | 270,335 |
Liabilities: |  |
Accounts payable |  | 5,032 |
Accrued compensation and benefits |  | 6,767 |
Operating lease liabilities |  | 1,447 |
Other current liabilities |  | 1,287 |
Non-current operating lease liabilities |  | 14,030 |
Total Liabilities |  | $ | 28,563 |
Net assets recorded |  | $ | 241,772 |
The impact of the acquisition of UW Solutions on our consolidated results of operations for the three and nine-month periods ended on November 30, 2024 was $8.8 million of net sales and $4.2 million net loss, respectively. The net sales and net loss represent approximately four weeks of operating results, transaction and integration-related costs, interest and the net tax effect. 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) |  | Three Months Ended |  | Nine Months Ended
| November 30, 2024 |  | November 25, 2023 |  | November 30, 2024 |  | November 25, 2023
Net sales |  | $ | 359,904 |  |  | $ | 368,243 |  |  | $ | 1,077,941 |  |  | $ | 1,131,489 |
Net earnings |  | 25,364 |  |  | 26,951 |  |  | 84,804 |  |  | 71,890 |
Earnings per share: |  |  |  |  |  |  |  |
Basic |  | 1.16 |  | 1.24 |  | 3.89 |  | 3.28
Diluted |  | 1.16 |  | 1.22 |  | 3.86 |  | 3.25
Nonrecurring charges of $3.7 million of transaction costs, $0.9 million of integration costs, $0.8 million of amortization of acquired backlog, and $0.4 million of inventory step-up expense incurred in the third quarter of fiscal 2025 are reflected as if those charges were incurred in the first quarter of 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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