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Note 3 - Business Combinations | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
3. | BUSINESS COMB INATIONS:
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 $90.2 million in cash, which 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. This strategic acquisition provides a foothold into the water infrastructure technology market. As the Company employs similar operating capabilities at its existing facilities, it intends to explore strategic opportunities to expand ParkUSA’s value-added products within the organization. The following table summarizes the purchase consideration and fair value 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 |  |  | 32,519 |
Total purchase consideration |  | $ | 90,224 |
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 year ended December 31, 2022 which resulted in a $1.8 million increase in goodwill and purchase consideration related to the settlement of working capital. The measurement period for the ParkUSA acquisition was complete as of September 30, 2022. 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 trademarks |  |  | 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 deductible for tax purposes. The Company incurred transaction costs associated with this acquisition of $0, $0.1 million, and $3.4 million during the years ended December 31, 2023, 2022 and 2021, 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 (in thousands):
|  | Year Ended December 31, 2021 |
Net sales |  | $ | 384,872 |
Net income |  |  | 15,780 |
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 had occurred on January 1 of the 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. The pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of ParkUSA 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 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 had been outstanding since January 1 of the year prior to the acquisition. 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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