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Business Acquisitions and Investments
 6 Months Ended
Jun. 30, 2013
Business Acquisitions and Investments [Abstract]  
Business Acquisitions and Investments
Note 3.Business Acquisitions and Investments

Orange Electronic Equity Investment

In January 2013, we acquired an approximate 25% minority interest in Orange Electronic Co., Ltd. for $6.3 million.  Orange Electronic Co., Ltd. is a manufacturer of tire pressure monitoring system sensors and is located in Taiwan.  Our minority interest in Orange Electronic Co., Ltd. is accounted for using the equity method of accounting.

European OE Business Acquisition

In February 2013, we acquired the original equipment business of Standard Motor Products Holdings Ltd. (“SMP Europe”), our former affiliate in the U.K., for £4.2 million ($6.5 million).  SMP Europe was a distributor of original equipment parts that were primarily manufactured in our Bialystok, Poland manufacturing facility.  We anticipate incremental annual revenues from the acquisition approximating $1 million to $2 million.
 
Intangible assets acquired in the acquisition consisted of $3.8 million of customer relationships that will be amortized on a straight-line basis over the estimated useful life of 10 years and goodwill of $2 million.  Goodwill related to the acquisition was allocated to the Engine Management Segment.  The goodwill reflects business specific knowledge, replacement cost of an assembled workforce, as well as the value of expected synergies.
 
Revenues included in our consolidated statements of operations from the acquired business in the second quarter and six months ended June 30, 2013 were not material.

CompressorWorks Asset Acquisition

In April 2012, we acquired substantially all of the assets of CompressorWorks, Inc. for $38.6 million, which consisted of a purchase price of $37.4 million and a $1.2 million working capital adjustment.  The acquisition was paid for with cash funded by our revolving credit facility.  Prior to the acquisition, CompressorWorks, Inc. had manufacturing and distribution facilities in Dallas, Texas, and distributed a range of temperature control products including new compressors, fan clutches, and other A/C system and engine cooling products.
 
The allocation of purchase price to assets acquired and liabilities assumed is based upon their fair values.  The following table presents the allocation of purchase price to assets acquired and liabilities assumed (in thousands):
 
Purchase price:
  
  
  
$
38,594
 
Assets acquired and liabilities assumed:
   
  
     
Receivables
 
$
9,114
     
Inventory
  
22,736
     
Other current assets
  
60
     
Property, plant and equipment
  
1,427
     
Intangible assets
  
8,870
     
Goodwill
  
9,703
     
Current liabilities
  
(13,316
)
    
Net assets acquired
     
$
38,594
 

Intangible assets acquired of $8.9 million consists of customer relationships of $8 million that will be amortized on a straight-line basis over the estimated useful life of 7 years; trademarks and trade names of $0.5 million that will be amortized on a straight-line basis over the estimated useful life of 3 years; non-compete agreements of $0.2 million that will be amortized on a straight-line basis over the estimated useful life of 3 years; and leaseholds of $0.2 million that will be amortized on a straight-line basis over the estimated useful life of 2.3 years.  Goodwill of $9.7 million was allocated to the Temperature Control Segment and is deductible for income tax purposes.  The goodwill reflects relationships, business specific knowledge and the replacement cost of an assembled workforce associated with personal reputations, as well as the value of expected synergies.

Pro Forma Information (Unaudited)

The following table summarizes certain supplemental pro forma financial information which was prepared as if (i) the acquisition of substantially all of the assets of CompressorWorks, Inc., acquired in April 2012, had occurred as of January 1, 2011 and (ii) the acquisition of the original equipment business of SMP Europe, acquired in February 2013, had occurred as of January 1, 2012.  The unaudited pro forma financial information was prepared for comparative purposes only and does not purport to be indicative of what would have occurred had the acquisitions been made at that time or of results which may occur in the future.
 
Supplemental unaudited pro forma financial information for the acquisitions is as follows (in thousands):
 
 
 
Three Months Ended
June 30, 2013
  
Three Months Ended
June 30, 2012
 
 
 
Reported
  
Pro Forma
  
Reported
  
Pro Forma
 
 
 
  
  
  
 
Net sales
 
$
270,126
  
$
270,126
  
$
268,875
  
$
276,040
 
Net earnings
  
16,043
   
16,074
   
13,404
   
14,517
 

 
 
Six Months Ended
June 30, 2013
  
Six Months Ended
June 30, 2012
 
 
 
Reported
  
Pro Forma
  
Reported
  
Pro Forma
 
 
 
  
  
  
 
Net sales
 
$
500,834
  
$
501,149
  
$
480,586
  
$
501,254
 
Net earnings
  
25,217
   
25,365
   
18,598
   
20,281