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Acquisitions | 12 Months Ended
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Feb. 28, 2022
Business Combinations [Abstract] |
Acquisitions | (5) Acquisitions The Company applies the acquisition method of accounting for business combinations. Under the acquisition method, the acquiring entity in a business combination recognizes 100% of the assets acquired and liabilities assumed at their acquisition date fair values. Management utilizes valuation techniques appropriate for the asset or liability being measured in determining these fair values. Any excess of the purchase price over amounts allocated to assets acquired, including identifiable intangible assets, and liabilities assumed is recorded as goodwill. Where amounts allocated to assets acquired and liabilities assumed is greater than the purchase price, a bargain purchase gain is recognized. Acquisition-related costs are expensed as incurred. On June 1, 2021, the Company acquired the assets and business from AmeriPrint Corporation ("AmeriPrint"), which is based in Harvard, Illinois, for $3.9 million in cash plus the assumption of trade payables, subject to certain adjustments. Goodwill of $0.5 million recognized as a part of the acquisition is deductible for tax purposes. The Company also recorded intangible assets with definite lives of approximately $1.1 million in connection with the transaction. The acquisition of AmeriPrint which prior to the acquisition generated approximately $6.5 million in sales for its fiscal year ended December 31, 2020, brings added capabilities and expertise to our expanding product offering including barcoding and variable imaging. The following is a summary of the purchase price allocation for AmeriPrint (in thousands):
Accounts receivable |  | $ | 417 |
Inventories |  |  | 732 |
Property, plant & equipment |  |  | 2,000 |
Goodwill and intangibles |  |  | 1,607 |
Accounts payable and accrued liabilities |  |  | (834 | )
|  | $ | 3,922 |
On December 31, 2020, the Company acquired the assets of Infoseal LLC (“Infoseal”), which is based in Roanoke, Virginia, for $19.2 million in cash plus the assumption of trade payables, subject to certain adjustments. Since the acquisition, the Company has incurred approximately $0.3 million of costs (including legal and accounting fees) related to the acquisition. Goodwill of $6.1 million recognized as a part of the acquisition is deductible for tax purposes. The Company also recorded intangible assets with definite lives of approximately $4.3 million in connection with the transaction. The acquisition of Infoseal, which prior to the acquisition generated approximately $19.2 million in sales for its fiscal year ended December 31, 2020, creates additional capabilities within in our pressure seal and tax form products. The following is a summary of the purchase price allocation for Infoseal (in thousands):
Accounts receivable |  | $ | 1,966 |
Inventories |  |  | 1,757 |
Right-of-use asset |  |  | 3,865 |
Property, plant & equipment |  |  | 7,000 |
Goodwill and intangibles |  |  | 9,890 |
Accounts payable and accrued liabilities |  |  | (1,411 | )
Operating lease liability |  |  | (3,865 | )
|  | $ | 19,202 |
On July 15, 2019, the Company acquired all the outstanding stock of The Flesh Company (“Flesh”) for approximately $9.9 million (which includes potential earn-out consideration of up to $500,000) plus the assumption of trade payables, subject to final working capital and certain other adjustments. The earn-out consideration is capped at $500,000 and is payable over the four years following the closing if certain minimum operating income levels are achieved. Since the acquisition, the Company has incurred approximately $0.3 million of costs (including legal and accounting fees) related to the acquisition. The Company recorded intangible assets with definite lives of approximately $1.2 million in connection with the transaction. Flesh, together with its wholly owned subsidiary, Impressions Direct, Inc. (“Impressions Direct”), is a printing company with two locations, with the St. Louis location containing Flesh’s corporate office and the direct mail operations of Impressions Direct, and the Parsons, Kansas location containing Flesh’s main manufacturing facility and warehouse. The acquisition of Flesh expands the Company’s operations with respect to business forms, checks, direct mail services, integrated products and labels. The following is a summary of the purchase price allocation for Flesh (in thousands):
Accounts receivable |  | $ | 2,480 |
Inventories |  |  | 1,343 |
Other assets |  |  | 191 |
Right-of-use asset |  |  | 715 |
Property, plant & equipment |  |  | 7,065 |
Customer lists |  |  | 337 |
Trademarks |  |  | 880 |
Non-compete |  |  | 20 |
Accounts payable and accrued liabilities |  |  | (2,251 | )
Operating lease liability |  |  | (700 | )
Deferred income taxes |  |  | (206 | )
|  | $ | 9,874 |
On March 16, 2019, the Company acquired the assets of Integrated Print & Graphics (“Integrated”), which is based in South Elgin, Illinois, for $8.9 million in cash plus the assumption of trade payables, subject to certain adjustments. Since the acquisition, the Company has incurred approximately $29,000 of costs (including legal and accounting fees) related to the acquisition. Goodwill of $893,000 recognized as a part of the acquisition is deductible for tax purposes. The Company also recorded intangible assets with definite lives of approximately $1.8 million in connection with the transaction. The acquisition of Integrated, which prior to the acquisition generated approximately $20.0 million in sales for its fiscal year ended December 31, 2018, creates additional capabilities within our high color commercial print product line. The following is a summary of the purchase price allocation for Integrated (in thousands):
Accounts receivable |  | $ | 1,971 |
Inventories |  |  | 1,322 |
Other assets |  |  | 72 |
Property, plant & equipment |  |  | 3,828 |
Right-of-use asset |  |  | 2,041 |
Customer lists |  |  | 896 |
Trademarks |  |  | 896 |
Non-compete |  |  | 25 |
Goodwill |  |  | 893 |
Accounts payable and accrued liabilities |  |  | (1,044 | )
Operating lease liability |  |  | (2,041 | )
|  | $ | 8,859 |
The results of operations for Integrated, Flesh, Infoseal and AmeriPrint are included in the Company’s consolidated financial statements from the respective dates of acquisition. The following table sets forth certain operating information on a pro forma basis as though the respective acquisition had occurred as of the beginning of the comparable prior period. The following pro forma information for fiscal year 2022 includes AmeriPrint, fiscal year 2021 includes AmeriPrint and Infoseal, and fiscal year 2020 includes Infoseal, Flesh and Integrated. The pro forma information includes the estimated impact of adjustments such as amortization of intangible assets, depreciation expense and interest expense and related tax effects (in thousands, except per share amounts).
|  | Unaudited |  |  | Unaudited |  |  | Unaudited |
|  | 2022 |  |  | 2021 |  |  | 2020 |
Pro forma net sales |  | $ | 401,682 |  |  | $ | 380,513 |  |  | $ | 470,132 |
Pro forma net earnings |  |  | 28,942 |  |  |  | 24,502 |  |  |  | 38,261 |
Pro forma earnings per share - diluted |  |  | 1.11 |  |  |  | 0.94 |  |  |  | 1.47 |
The pro forma results are not necessarily indicative of what would have occurred if the acquisition had been in effect for the period presented. On October 15, 2021, the Company acquired the assets of a digital operation located in Illinois for $0.4 million in cash plus the assumption of certain accrued liabilities. Management considers this acquisition immaterial.

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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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