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Note 4 - Business Combination
 12 Months Ended
Oct. 03, 2015
Notes to Financial Statements  
Business Combination Disclosure [Text Block]
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4
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Business Combination
 
On August 15, 2014, the Company purchased substantially all of the assets associated with the PC strand business of ASW for a final adjusted purchase price of $33.5 million, net of post-closing adjustments of $480,000 (the “ASW Acquisition”).
 
ASW manufactured PC strand at facilities located in Houston, Texas and Newnan, Georgia. The Company acquired, among other assets, the accounts receivable and inventories related to ASW’s PC strand business, the production equipment at its facility in Houston and its production equipment and facility in Newnan. Pursuant to an agreement with ASW, the Company is leasing the Houston facility from ASW with an option to purchase it in the future. In addition, the Company assumed certain of ASW’s accounts payable and accrued liabilities related to its PC strand business.
 
Following is a summary of the Company’s final allocation of the adjusted purchase price to the fair values of the assets acquired and liabilities assumed as of the date of the ASW Acquisition:
 
(In thousands)
 
 
 
 
Assets acquired:
        
Accounts receivable
   $ 7,854  
Inventories
     6,292  
Other current assets
     786  
Property, plant and equipment
     8,638  
Intangibles
     8,530  
Total assets acquired
   $ 32,100  
         
Liabilities assumed:
        
Accounts payable
   $ 3,240  
Accrued expenses
     2,362  
Total liabilities assumed
     5,602  
Net assets acquired
     26,498  
Purchase price
     33,463  
Goodwill
   $ 6,965  
 
In connection with the ASW Acquisition, the Company acquired intangible assets consisting of customer relationships, developed technology and know-how, and a non-competition agreement. The ASW Acquisition was accounted for as a business purchase pursuant to ASC Topic 805, Business Combinations. Acquisition and integration costs are not included as components of consideration transferred, but are recorded as expenses in the period in which such costs are incurred (See Note 5 to the consolidated financial statements).
 
Following the ASW Acquisition, net sales of the ASW facilities in 2014 were approximately $7.3 million. The actual amount of net sales specifically attributable to the ASW Acquisition, however, cannot be quantified due to the actions that were taken by the Company to integrate ASW’s facilities with its existing operations, which involved the reassignment of business across locations. The Company has determined that the presentation of ASW’s earnings for 2014 is impractical due to the integration of ASW’s facilities into the Company following the ASW Acquisition.
 
The following unaudited supplemental pro forma financial information reflects the combined results of operations of the Company had the ASW Acquisition occurred at the beginning of 2013. The pro forma information reflects certain adjustments related to the ASW Acquisition, including adjusted amortization and depreciation expense based on the fair value of the assets acquired, interest expense related to the borrowings on the Company’s revolving credit facility and an appropriate adjustment for the acquisition-related costs in the current year. The pro forma information does not reflect any operating efficiencies or potential cost savings that may result from the ASW Acquisition. Accordingly, this pro forma information is for illustrative purposes and is not intended to represent or be indicative of the actual results of operations of the combined company that may have been achieved had the ASW Acquisition occurred at the beginning of 2013, nor is it intended to represent or be indicative of future results of operations. The pro forma combined results of operations for the comparative prior year periods are as follows:
 
 
 
Years Ended
 
 
 
September 27,
 
 
September 28,
 
(In thousands)
 
2014
 
 
2013
 
Net sales
   $ 469,079     $ 431,553  
Earnings before income taxes
     27,225       20,447  
Net earnings
     18,928       12,406