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Note 3 - Business Combination | 12 Months Ended
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Dec. 31, 2018
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
3 . | BUSINESS COMBINATION :
On July 27, 2018, the Company completed the acquisition of 100% of Ameron Water Transmission Group, LLC (“Ameron”) for a purchase price of $38.1 million in cash. The results of Ameron’s operations have been included in the consolidated financial statements since that date. Ameron was a major supplier of engineered welded steel pressure pipe as well as reinforced concrete pipe. In addition to strengthening the Company’s position in the water transmission pipe market, this acquisition expands the Company's bar-wrapped concrete cylinder pipe capabilities and adds reinforced concrete pipe and T-Lock ® —a proprietary polyvinyl chloride (PVC) lining for concrete pipe sewer applications—to the Company’s product portfolio. In connection with the acquisition, the Company acquired pipe facilities in Tracy, California and San Luis Río Colorado, Mexico, as well as a protective lining facility in Brea, California. The following table summarizes the preliminary purchase consideration and preliminary fair value of the assets acquired and liabilities assumed as of July 27, 2018 (in thousands):
Assets |  |  |  |
Cash and cash equivalents |  | $ | 912 |
Trade and other receivables |  |  | 8,887 |
Contract assets |  |  | 12,018 |
Inventories |  |  | 7,937 |
Prepaid expenses and other |  |  | 3,777 |
Property and equipment |  |  | 34,827 |
Other assets |  |  | 320 |
Total assets acquired |  |  | 68,678 |
Liabilities |  |  |  |
Accounts payable |  |  | 5,520 |
Accrued liabilities |  |  | 1,599 |
Contract liabilities |  |  | 123 |
Deferred income taxes |  |  | 3,221 |
Total liabilities assumed |  |  | 10,463 |
Bargain purchase gain |  |  | (20,080 | )
Total purchase consideration |  | $ | 38,135 |
The asset and liability fair value measurements are preliminary, primarily related to income, deferred, and foreign taxes, and are subject to change as additional information is obtained and certain tax returns are finalized. As a result of additional information obtained about facts and circumstances that existed as of the acquisition date, the Company recorded measurement period adjustments during the fourth quarter of 2018, which resulted in a net decrease of the bargain purchase gain of $1.8 million. The adjustments primarily included reclassifications between balance sheet categories and a $2.0 million reduction in inventories. The purchase price allocation will be finalized as soon as practicable within the measurement period, but not later than one year following the acquisition date. The excess of the aggregate net fair value of assets acquired and liabilities assumed over the fair value of consideration transferred as the purchase price has been recorded as a bargain purchase gain. When it became apparent there was a potential for a bargain purchase gain, management reviewed the Ameron assets acquired and liabilities assumed as well as the assumptions utilized in estimating their fair values. Upon completion of this reassessment, the Company concluded that recording a bargain purchase gain with respect to Ameron was appropriate and required under U.S. GAAP. The Company believes the seller was motivated to complete the transaction as part of an overall repositioning of its business. The Company incurred acquisition-related costs during the year ended December 31, 2018 of $2.6 million. These costs are included in Selling, general, and administrative expense in the Consolidated Statements Operations. Ameron operations contributed net sales of $30.2 million to the Company’s continuing operations for the period from July 27, 2018 to December 31, 2018. It is impracticable to determine the effect on net income as a substantial portion of Ameron has been integrated into the Company’s ongoing operations. The following unaudited pro forma summary presents the consolidated results of the Company as if the acquisition of Ameron had occurred on January 1, 2017 (in thousands):
|  | Year Ended December 31, |
|  | 2018 |  |  | 2017 |
Net sales |  | $ | 200,513 |  |  | $ | 186,377 |
Net loss from continuing operations |  |  | (15,102 | ) |  |  | (10,611 | )
This unaudited pro forma consolidated financial data is included only for the purpose of illustration and does not necessarily indicate what the operating results would have been if the acquisition had occurred on January 1, 2017. Moreover, this information is not indicative of what the Company’s future operating results will be. The information for 2017 and 2018 prior to the acquisition is included based on prior accounting records maintained by Ameron. The pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Ameron to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied on January 1, 2017, and the consequential tax effects. Aside from revising the 2018 net income for the effect of the bargain purchase gain, there were no material, non-recurring adjustments to this unaudited pro forma information.

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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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