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Note 3 - Business Combinations | 12 Months Ended
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Dec. 31, 2021
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
3. | BUSINESS COMBINATIONS:
Park Environmental Equipment, LLC On October 5, 2021, the Company completed the acquisition of 100% of Park Environmental Equipment, LLC (“ParkUSA”) for a purchase price of approximately $88.4 million in cash, subject to a post-closing adjustment based on changes in net working capital, and is included in the Precast segment for all periods following the acquisition date. ParkUSA is a precast concrete and steel fabrication-based company that develops and manufactures water, wastewater, and environmental solutions. Operations continue with ParkUSA’s previous management and workforce at its three Texas manufacturing facilities located in Houston, Dallas, and San Antonio. The following table summarizes the purchase consideration and preliminary fair values of the assets acquired and liabilities assumed as of October 5, 2021 (in thousands):
Assets |  |  |  |
Cash and cash equivalents |  | $ | 278 |
Trade and other receivables |  |  | 11,034 |
Inventories |  |  | 12,773 |
Prepaid expenses and other |  |  | 293 |
Property and equipment |  |  | 8,076 |
Operating lease right-of-use assets |  |  | 58,301 |
Intangible assets |  |  | 31,000 |
Deferred income taxes |  |  | 347 |
Total assets acquired |  |  | 122,102 |
Liabilities |  |  |  |
Accounts payable |  |  | 2,029 |
Accrued liabilities |  |  | 4,067 |
Operating lease liabilities |  |  | 58,301 |
Total liabilities assumed |  |  | 64,397 |
Goodwill |  |  | 30,699 |
Total purchase consideration |  | $ | 88,404 |
The tangible and intangible assets acquired and liabilities assumed were recognized based on their estimated fair values on the acquisition date, with the excess purchase consideration recorded as goodwill. The asset and liability fair value measurements primarily related to receivables, inventories, identifiable intangible assets, deferred income taxes, accrued liabilities, and goodwill, are preliminary and subject to change as additional information is obtained. The acquisition accounting will be finalized as soon as practicable within the measurement period, but not later than one year following the acquisition date. The following table summarizes the components of the intangible assets acquired and their estimated useful lives:
|  | Estimated Useful Life |  |  | Fair Value |
|  | (In years) |  |  | (In thousands) |
Customer relationships |  |  | 10.0 |  |  | $ | 19,800 |
Trade names and trade marks |  |  | 10.0 |  |  |  | 9,600 |
Patents |  |  | 21.0 |  |  |  | 1,300 |
Backlog |  |  | 0.6 |  |  |  | 300 |
Total intangible assets |  |  | 10.4 |  |  | $ | 31,000 |
Goodwill arose from the acquisition of an assembled workforce, expansion of product offerings, and management’s industry know-how, and is expected to be deductible for tax purposes. The Company incurred transaction costs associated with this acquisition of $3.4 million and $0.2 million during the years ended December 31, 2021 and 2020, respectively. These transaction costs are included in Selling, general, and administrative expense in the Consolidated Statements of Operations. ParkUSA operations contributed net sales of $18.0 million to the Company’s continuing operations for the period from October 5, 2021 to December 31, 2021. It is impracticable to determine the effect on net income as a substantial portion of ParkUSA has been integrated into the Company’s ongoing operations. Geneva Pipe and Precast Company On January 31, 2020, the Company completed the acquisition of 100% of Geneva Pipe and Precast Company (“Geneva”) (fka Geneva Pipe Company, Inc.) for a purchase price of $49.4 million in cash, and is included in the Precast segment for all periods following the acquisition date. Geneva is a concrete pipe and precast concrete products manufacturer based in Utah. This acquisition expanded the Company’s water infrastructure product capabilities by adding additional reinforced concrete pipe capacity and a full line of precast concrete products including storm drains and manholes, catch basins, vaults, and curb inlets as well as innovative lined products that extend the life of concrete pipe and manholes for sewer applications. Operations continue with Geneva’s previous management and workforce at the three Utah manufacturing facilities located in Salt Lake City, Orem, and St. George. The following table summarizes the purchase consideration and fair values of the assets acquired and liabilities assumed as of January 31, 2020 (in thousands):
Assets |  |  |  |
Cash and cash equivalents |  | $ | 691 |
Trade and other receivables |  |  | 7,089 |
Inventories |  |  | 5,673 |
Prepaid expenses and other |  |  | 356 |
Property and equipment |  |  | 9,096 |
Operating lease right-of-use assets |  |  | 21,684 |
Intangible assets |  |  | 11,165 |
Total assets acquired |  |  | 55,754 |
Liabilities |  |  |  |
Accounts payable |  |  | 1,395 |
Accrued liabilities |  |  | 1,189 |
Operating lease liabilities |  |  | 20,454 |
Deferred income taxes |  |  | 5,343 |
Other long-term liabilities |  |  | 939 |
Total liabilities assumed |  |  | 29,320 |
Goodwill |  |  | 22,985 |
Total purchase consideration |  | $ | 49,419 |
The tangible and intangible assets acquired and liabilities assumed were recognized based on their estimated fair values on the acquisition date, with the excess purchase consideration recorded as goodwill. As a result of additional information obtained during the measurement period about facts and circumstances that existed as of the acquisition date, the Company recorded measurement period adjustments during the three months ended June 30, 2020 which resulted in a $0.1 million balance sheet reclassification between trade and other receivables and inventories. The following table summarizes the components of the intangible assets acquired and their estimated useful lives:
|  | Estimated Useful Life |  |  | Fair Value |
|  | (In years) |  |  | (In thousands) |
Customer relationships |  |  | 11.0 |  |  | $ | 8,031 |
Trade names |  |  | 10.0 |  |  |  | 2,093 |
Backlog |  |  | 0.9 |  |  |  | 1,041 |
Total intangible assets |  |  | 9.9 |  |  | $ | 11,165 |
Goodwill arose from the acquisition of an assembled workforce, expansion of product offerings, and management’s industry know-how. The goodwill was not deductible for tax purposes. The Company incurred transaction costs associated with this acquisition of $2.6 million and $0.6 million during the years ended December 31, 2020 and 2019, respectively. These transaction costs are included in Selling, general, and administrative expense in the Consolidated Statements of Operations. Unaudited Pro Forma Disclosures The following unaudited pro forma summary presents the consolidated results of the Company as if the acquisition of ParkUSA had occurred on January 1, 2020 and the acquisition of Geneva had occurred on January 1, 2019 (in thousands):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Net sales |  | $ | 384,872 |  |  | $ | 356,035 |  |  | $ | 323,741 |
Net income |  |  | 15,780 |  |  |  | 20,540 |  |  |  | 27,163 |
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 acquisitions of ParkUSA and Geneva had occurred on January 1 of the respective year prior to the acquisition. Moreover, this information is not indicative of what the Company’s future operating results will be. The information prior to the acquisition is included based on prior accounting records maintained by ParkUSA and Geneva. The pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of ParkUSA and Geneva 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 of the respective year prior to the acquisition. Adjustments also include an increase of interest expense as if the Company’s debt obtained in connection with the acquisitions of ParkUSA and Geneva had been outstanding since January 1 of the respective year prior to the acquisition. The pro forma results for the year ended December 31, 2020 also include nonrecurring adjustments relating to the recognition of transaction costs incurred and revaluation of inventory acquired. The pro forma results for the year ended December 31, 2021 include nonrecurring adjustments to add back the transaction costs incurred and the expense related to the revaluation of inventory acquired in those periods, since those costs are reflected in the preceding year on a pro forma basis. The provision for income taxes has also been adjusted for all periods, based upon the foregoing adjustments to historical results.

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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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