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Note 3 - Business Combination | 6 Months Ended
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Apr. 03, 2021
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 was 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 final 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. 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. 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 six-month periods ended March 28, 2020 are as follows:
|  | March 28, 2020 |
(In thousands) |  | Three Months Ended |  |  | Six Months Ended |
Net sales |  | $ | 121,290 |  |  | $ | 224,931 |
Earnings before income taxes |  |  | 4,591 |  |  |  | 4,285 |
Net earnings |  |  | 2,353 |  |  |  | 2,136 |
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 six-month periods ended April 3, 2021 and March 28, 2020:
(In thousands) |  | Employee |  |  | Equipment |  |  | Facility |  |  | Asset |  |  |  |  |
|  | Separation Costs |  |  | Relocation Costs |  |  | Closure Costs |  |  | Impairments |  |  | Total |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liability as of October 3, 2020 |  | $ | - |  |  | $ | 20 |  |  | $ | 151 |  |  | $ | - |  |  | $ | 171 |
Restructuring charges |  |  | 13 |  |  |  | 88 |  |  |  | 552 |  |  |  | 4 |  |  |  | 657 |
Cash payments |  |  | (13 | ) |  |  | (95 | ) |  |  | (669 | ) |  |  | - |  |  |  | (777 | )
Non-cash charges |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (4 | ) |  |  | (4 | )
Liability as of January 2, 2021 |  |  | - |  |  |  | 13 |  |  |  | 34 |  |  |  | - |  |  |  | 47 |
Restructuring charges |  |  | - |  |  |  | 286 |  |  |  | 259 |  |  |  | - |  |  |  | 545 |
Cash payments |  |  | - |  |  |  | (299 | ) |  |  | (266 | ) |  |  | - |  |  |  | (565 | )
Non-cash charges |  |  | - |  |  |  |  |  |  |  |  |  |  |  | - |  |  |  | - |
Liability as of April 3, 2021 |  | $ | - |  |  | $ | - |  |  | $ | 27 |  |  | $ | - |  |  | $ | 27 |
2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring charges |  | $ | 129 |  |  | $ | - |  |  | $ | 20 |  |  | $ | - |  |  | $ | 149 |
Cash payments |  |  | (4 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (4 | )
Liability as of March 28, 2020 |  | $ | 125 |  |  | $ | - |  |  | $ | 20 |  |  | $ | - |  |  | $ | 145 |
As of April 3, 2021 and October 3, 2020, we recorded a liability of $27,000 and $171,000, respectively, for restructuring liabilities in accrued expenses on our consolidated balance sheets. We currently expect to incur approximately $300,000 of additional restructuring charges for equipment relocation and facility closure costs.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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