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Note 17 - Acquisition | 12 Months Ended
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Jun. 30, 2018
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | NOTE 1 7 – ACQUISITION On February 21, 2017, the Company acquired all the capital stock of Atlas Lighting Products, Inc. (Atlas), a Burlington North Carolina manufacturer of high-quality LED lighting products sold into the electrical distribution market. The purchase price of $97.5 million included a cash payment of $96.9 million and 200,000 five year warrants valued at $0.6 million. The Company funded the acquisition with a combination of cash on hand and $66 million from a new $100 million revolving line of credit (See Note 7 ). The Company has accounted for this transaction as a business combination. Under business combination accounting, the allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed as of February 21, 2017 is as follows:
(amounts in thousands) |  | February 21, 2017 (Initially Reported) |  |  | Measurement Period Adjustments |  |  | February 21, 2017 (As Adjusted) |
Cash and Cash Equivalents |  | $ | 1,815 |  |  | $ |  |  |  | $ | 1,815 |
Accounts Receivable |  |  | 7,202 |  |  |  |  |  |  |  | 7,202 |
Inventories |  |  | 8,490 |  |  |  |  |  |  |  | 8,490 |
Property, Plant, and Equipment |  |  | 3,631 |  |  |  | (85 | ) |  |  | 3,546 |
Other Assets |  |  | 248 |  |  |  |  |  |  |  | 248 |
Intangible Assets |  |  | 34,319 |  |  |  |  |  |  |  | 34,319 |
Liabilities Assumed |  |  | (6,106 | ) |  |  | (77 | ) |  |  | (6,183 | )
Identifiable net assets acquired |  |  | 49,599 |  |  |  | (162 | ) |  |  | 49,437 |
Goodwill |  |  | 47,868 |  |  |  | 162 |  |  |  | 48,030 |
Net Purchase Consideration |  | $ | 97,467 |  |  | $ | -- |  |  | $ | 97,467 |
Goodwill recorded from the acquisition of Atlas is attributable to the impact of the positive cash flow from Atlas in addition to the expected synergies from the business combination. The goodwill resulting from the acquisition is deductible for tax purposes. The intangible assets include amounts recognized for the fair value of the trade name, customer relationships, and technology-related assets. The fair value of the intangible assets was determined based upon a combination of the market and income (discounted cash flow) approach. The following table present the details of the identified intangible assets acquired at the date of acquisition (in thousands):
|  | Estimated |  |  | Estimate Useful |
|  | Fair Value |  |  | Life (Years) |
Tradename |  | $ | 2,198 |  |  | 20 |
Technology asset |  |  | 4,838 |  |  | 10 |
Customer relationship |  |  | 27,283 |  |  | 15 |
Total |  | $ | 34,319 |  |  |  |
The fair market value write-up of the inventory totaled $228,000, and the fair market value write-up of the property, plant, and equipment totaled $526,000. Transaction costs related to the acquisition totaled $1.48 million in fiscal 2017 and are recorded as an operating expense. Atlas’s post-acquisition results of operations for the period from February 21, 2017 through June 30, 2017 are included in the Company’s Consolidated Statements of Operations. Since the acquisition date, net sales of Atlas for the period from February 21, 2017 through June 30, 2017 were $17.8 million and operating income was $1.8 million. The operating results of Atlas are included in the Lighting Segment. Pro Forma Impact of the Acquisition of Atlas Lighting Products, Inc. (unaudited) The following table represents pro forma results of operations and gives effect to the acquisition of Atlas as if the transaction had occurred on July 1, 2015. The unaudited pro forma results of operations have been prepared for comparative purposes only and are not necessarily indicative of what would have occurred had the business combination been completed at the beginning of the period or the results that may occur in the future. Furthermore, the pro forma financial information does not reflect the impact of any synergies or operating efficiencies resulting from the acquisition of Atlas .
(In thousands, unaudited) |  | Twelve Months Ended June 30 |
|  | 2017 |  |  | 2016 |
Net Sales |  | $ | 366,541 |  |  | $ | 381,650 |
Gross Profit |  | $ | 95,038 |  |  | $ | 105,592 |
Operating Income |  | $ | 6,857 |  |  | $ | 18,010 |
The unaudited pro forma financial information for the twelve months ended June 30, 2017 and June 30, 2016 is prepared using the acquisition method of accounting and has been adjusted to effect to the pro forma events that are: ( 1 ) directly attributable to the acquisition; ( 2 ) factually supportable; and ( 3 ) expected to have a continuing impact on the combined results. The pro forma operating income of $6.9 million excludes acquisition-related expenses of $1.61 million.

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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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