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Acquisitions | 9 Months Ended
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Nov. 30, 2023
Business Combinations [Abstract] |
Acquisitions | 6. 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, with certain limited exceptions permitted under US GAAP. 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 in the period incurred. Acquisition of Eagle Graphics and Diamond Graphics On October 11, 2023, the Company acquired the assets and business of Eagle Graphics, Inc., which is based in Annville, Pennsylvania, and Diamond Graphics, Inc. ("Eagle"), which is based in Bensalem, Pennsylvania, for approximately $8.0 million in cash. The Company performed a preliminary allocation of the total estimated consideration and recorded the underlying assets acquired (including certain identified intangible assets) and liabilities assumed based on the estimated fair values prepared by management using the information available as of the acquisition date. This allocation is preliminary and subject to change, which may be material. All goodwill of $0.2 million recognized as a part of this acquisition is deductible for tax purposes. The Company also recorded intangible assets with definite lives of approximately $0.8 million in connection with the transaction, which are also deductible for tax purposes. The following table summarizes the Company's preliminary purchase price allocation for Eagle as of the acquisition date (in thousands):
Accounts receivable |  | $841
Inventories |  | 917
Other assets |  | 15
Property, plant and equipment |  | 5,304
Goodwill and intangibles |  | 942
Accounts payable and accrued liabilities |  | (41)
Acquisition price |  | $7,978
Acquisition of UMC Print On June 2, 2023, the Company acquired the assets and business of UMC Print ("UMC"), which is based in Overland Park, Kansas, for approximately $7.7 million in cash plus the assumption of trade payables of approximately $0.8 million. The Company performed a preliminary allocation of the total estimated consideration and recorded the underlying assets acquired (including certain identified intangible assets) and liabilities assumed based on the estimated fair values prepared by management using the information available as of the acquisition date. This allocation is preliminary and subject to change, which may be material. All goodwill of $0.2 million recognized as a part of this acquisition is deductible for tax purposes. The Company also recorded intangible assets with definite lives of approximately $2.7 million in connection with the transaction, which are also deductible for tax purposes. The following table summarizes the Company's preliminary purchase price allocation for UMC as of the acquisition date (in thousands):
Cash |  | $758
Accounts receivable |  | 1,839
Inventories |  | 553
Property, plant and equipment |  | 2,356
Goodwill and intangibles |  | 2,970
Accounts payable and accrued liabilities |  | (789)
Acquisition price |  | $7,687
Acquisition of Stylecraft Printing On May 23, 2023, the Company acquired the real estate and operations of Stylecraft Printing Company ("Stylecraft"), which is based in Canton, Michigan, for $5.0 million plus the assumption of trade payables. The Company performed a preliminary allocation of the total estimated consideration and recorded the underlying assets acquired (including certain identified intangible assets) and liabilities assumed based on their estimated fair values using the information available as of the acquisition date. This allocation is preliminary and subject to change, which may be material. All goodwill of $0.2 million recognized as a part of this acquisition is deductible for tax purposes. The Company also recorded intangible assets with definite lives of approximately $0.3 million in connection with the transaction, which are also deductible for tax purposes. The following table summarizes the Company's purchase price allocation for Stylecraft as of the acquisition date (in thousands):
Accounts receivable |  | $554
Inventories |  | 849
Right-of-use asset |  | 28
Property, plant and equipment |  | 3,161
Goodwill and intangibles |  | 476
Operating lease liability |  | (12)
Accounts payable and accrued liabilities |  | (28)
Acquisition price |  | $5,028
Acquisition of School Photo Marketing On November 30, 2022, the Company acquired the assets and business from School Photo Marketing ("SPM"), which is based in Morganville, New Jersey, for $8.8 million (with additional potential earn-out consideration of up to $1,000,000 over a four-year period upon the attainment of specified financial benchmarks) plus the assumption of trade payables, subject to certain adjustments. At November 30, 2023 and February 28, 2023, the contingent earn-out liability amounted to $0.8 million and zero, respectively. The seller shall receive fifty percent (50%) of Purchaser's annual earnings from the business, before interest and taxes in excess of $1.4 million. Goodwill of $3.1 million recognized as a part of this acquisition is deductible for tax purposes. The Company also recorded intangible assets with definite lives of approximately $5.1 million in connection with the transaction, which are also deductible for tax purposes. The acquisition of SPM brings printing, yearbook publishing and marketing related services to over 1,400 school and sports photographers servicing schools around the country. The following table summarizes the Company's purchase price allocation for SPM as of the acquisition date (in thousands):
Accounts receivable |  | $1,403
Inventories |  | 516
Other assets |  | 84
Right-of-use asset |  | 487
Property, plant and equipment |  | 250
Goodwill and intangibles |  | 8,262
Operating lease liability |  | (487)
Accounts payable and accrued liabilities |  | (1,748)
Acquisition price |  | $8,767
The results of operations for SPM, Stylecraft, UMC and Eagle 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 each acquisition had occurred as of the beginning of the comparable prior period (that is, March 1, 2022). The following 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).
|  | Three months ended |  |  | Nine months ended |
|  | November 30, 2023 |  |  | November 30, 2022 |  |  | November 30, 2023 |  |  | November 30, 2022 |
Pro forma net sales |  | $ | 105,233 |  |  | $ | 120,446 |  |  | $ | 333,036 |  |  | $ | 360,101 |
Pro forma net earnings |  |  | 9,975 |  |  |  | 12,275 |  |  |  | 33,847 |  |  |  | 38,974 |
Pro forma earnings per share - diluted |  | $ | 0.38 |  |  | $ | 0.47 |  |  | $ | 1.30 |  |  | $ | 1.51 |
The pro forma results are not necessarily indicative of what would have occurred if the acquisitions had been in effect for the full duration of the comparative periods presented.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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