XML 21 R8.htm IDEA: XBRL DOCUMENT
v3.20.2

Note 3 - Business Combination | 9 Months Ended
--- | ---
Jun. 27, 2020
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | (3) Business Combination On March 16, 2020, we purchased substantially all of the assets of STM for an adjusted purchase price of $19.4 million, reflecting certain post-closing adjustments (the “STM Acquisition”), which included a $1.0 million holdback that is payable one year from the acquisition date. STM was a leading manufacturer of prestressed concrete strand (“PC strand”) for concrete construction applications. We acquired, among other assets, STM’s accounts receivable, inventories, production equipment and facility located in Summerville, South Carolina, and assumed certain of its accounts payable and accrued liabilities. The STM Acquisition serves to strengthen our competitive position as we contend with increased low-priced import competition. Following is a summary of our preliminary allocation of the adjusted purchase price to the fair values of the assets acquired and liabilities assumed as of the acquisition date:
In thousands) |  |  |  |
Assets acquired: |  |  |  |
Accounts receivable |  | $ | 3,829 |
Inventories |  |  | 3,172 |
Other current assets |  |  | 178 |
Property, plant and equipment |  |  | 10,919 |
Intangibles |  |  | 970 |
Total assets acquired |  | $ | 19,068 |
Liabilities assumed: |  |  |  |
Accounts payable |  | $ | 852 |
Accrued expenses |  |  | 312 |
Total liabilities assumed |  |  | 1,164 |
Net assets acquired |  |  | 17,904 |
Adjusted purchase price |  |  | 19,356 |
Goodwill |  | $ | 1,452 |
In connection with the STM Acquisition, we acquired certain intangible assets including customer relationships, a trade name and non-competition agreement. As we are in the process of finalizing internal and third-party valuations of tangible and intangible assets and certain liabilities, the provisional estimates of intangible assets, fixed assets, goodwill and certain accrued liabilities are subject to adjustment. We expect to finalize these amounts as soon as practical and no later than one year from the acquisition date. Goodwill associated with the STM Acquisition, which is deductible for tax purposes, consists largely of the synergies we expect to realize through the integration of the acquired assets with our operations. The STM Acquisition was accounted for as a business purchase pursuant to ASC Topic 805, Business Combinations (“ASC 805”). Under the provisions of ASC 805, acquisition and integration costs are recorded as expenses in the period in which such costs are incurred rather than included as components of consideration transferred. Following the STM Acquisition, net sales of the STM facility for the three- and nine-month periods ended June 27, 2020 were approximately $1.8 million and $2.9 million, respectively. The actual net sales specifically attributable to the STM Acquisition, however, cannot be quantified due to our integration efforts which involved the reassignment of business between the former STM facility and our existing PC strand facilities. As a result, we have determined that the presentation of STM’s earnings for the three- and nine-month periods ending June 27, 2020 is impractical due to the integration of STM’s operations following the STM Acquisition. The following unaudited supplemental pro forma financial information reflects our combined results of operations had the STM Acquisition occurred at the beginning of fiscal 2019. The pro forma information reflects certain adjustments related to the STM Acquisition, including adjusted amortization and depreciation expense based on the fair values of the assets acquired. The pro forma information does not reflect any potential operating efficiencies or cost savings that may result from the STM Acquisition. Accordingly, this pro forma information is for illustrative purposes and is not intended to represent the actual results of operations of the combined company that would have been achieved had the STM Acquisition occurred at the beginning of fiscal 2019, nor is it intended to indicate future results of operations. The pro forma combined results of operations for the three- and nine-month periods ending June 27, 2020 and June 29, 2019 are as follows:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | June 27, |  |  | June 29, |  |  | June 27, |  |  | June 29, |
(In thousands) |  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Net sales |  | $ | 121,959 |  |  | $ | 133,538 |  |  | $ | 346,890 |  |  | $ | 357,542 |
Earnings before income taxes |  |  | 8,531 |  |  |  | 2,713 |  |  |  | 12,730 |  |  |  | 3,375 |
Net earnings |  |  | 6,664 |  |  |  | 2,209 |  |  |  | 6,447 |  |  |  | 2,669 |
Restructuring charges. In connection with the STM acquisition, we elected to consolidate our PC strand operations through the closure of the Summerville facility and the redeployment of its equipment to our other three PC strand production facilities located in Gallatin, Tennessee; Houston, Texas; and Sanderson, Florida. Operations at the Summerville facility ceased during the third quarter of fiscal 2020. Following is a summary of the restructuring activity during the three- and nine-month periods ended June 27, 2020:
(In thousands) |  | Employee Separation Costs |  |  | Equipment Relocation Costs |  |  | Facility Closure Costs |  |  | Asset Impairments |  |  | Total |
Restructuring charges |  | $ | 129 |  |  | $ | - |  |  | $ | 20 |  |  | $ | - |  |  | $ | 149 |
Cash payments |  |  | (4 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (4 | )
Liability as of March 28, 2020 |  |  | 125 |  |  |  | - |  |  |  | 20 |  |  |  | - |  |  |  | 145 |
Restructuring charges |  |  | 76 |  |  |  | 16 |  |  |  | 373 |  |  |  | 343 |  |  |  | 808 |
Cash payments |  |  | (124 | ) |  |  | (16 | ) |  |  | (350 | ) |  |  | - |  |  |  | (490 | )
Non-cash charges |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (343 | ) |  |  | (343 | )
Liability as of June 27, 2020 |  | $ | 77 |  |  | $ | - |  |  | $ | 43 |  |  | $ | - |  |  | $ | 120 |
As of June 27, 2020, we recorded a liability of $120,000 for restructuring liabilities in accrued expenses on our consolidated balance sheet. We currently expect to incur approximately $1.4 million of additional restructuring charges for equipment relocation and facility closure costs. Acquisition costs. During the three- and nine-month periods ended June 27, 2020, we recorded $8,000 and $195,000, respectively, of acquisition-related costs associated with the STM Acquisition for accounting, legal and other professional fees.

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration