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BUSINESS COMBINATIONS | 6 Months Ended
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Jun. 30, 2023
BUSINESS COMBINATIONS |
BUSINESS COMBINATIONS | 3. BUSINESS COMBINATIONS On May 31, 2023, the Company acquired substantially all of the assets and assumed certain liabilities of Southern Hydraulic Cylinder, Inc., (“SHC”), a Tennessee corporation. SHC manufactures, sells and services hydraulic cylinders and related components. The operations of SHC align with those of the Company, which management believes will bolster its efforts to enhance the stability of the Company’s supply chain. The purchase price totaling approximately $17.8 million was comprised of cash on hand and by drawing on the existing revolving credit facility. The preliminary allocation of the consideration for the net assets acquired from the acquisition of SHC were as follows:
​ | ​ | ​ | ​
Sources of financing | ​ | ​ | ​
Cash | ​ | $ | 17,802
Fair value of consideration transferred | ​ | ​ | 17,802
​ | ​ | ​ | ​
Fair value of assets and liabilities | ​ | ​ | ​
Accounts receivable | ​ | ​ | 2,244
Fixed assets | ​ | ​ | 3,735
Inventory | ​ | ​ | 3,385
Prepaid insurance | ​ | ​ | 93
Total identifiable assets acquired | ​ | ​ | 9,457
​ | ​ | ​ | ​
Assumed liabilities | ​ | ​ | 630
Goodwill | ​ | $ | 8,975
​ The acquired business contributed revenues of $919 and earnings of $33 to the Company for the period from June 1, 2023 to June 30, 2023. Earnings for the period include adjustments made for the elimination of intercompany sales and profits, as well as sales of finished goods recorded at market value as part of the acquisition. The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2022.
​ | ​ | ​ | ​ | ​ | ​
​ | Pro forma for six months ended (unaudited) June 30,
​ | 2023 | ​ | 2022
Revenue | $ | 588,469 | ​ | $ | 423,251
Earnings | $ | 25,742 | ​ | $ | 6,272
​ The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of Southern Hydraulic Cylinder, Inc. The goodwill is not deductible for tax purposes. The fair value of the assets acquired includes trade receivables of $2,244 that are not purchased financial assets with credit deterioration. The Company does not anticipate any markdowns of trade receivables or corresponding credit losses. The initial accounting is incomplete due to the timing of the closing in relation to this quarterly filing. The Company is still evaluating the value of certain assets acquired and will be obtaining a third-party valuation. Any adjustments to the value of assets, such as intangible assets, fixed assets or inventory, will be disclosed in future filings. ​ Transaction costs incurred in the acquisition were not material and were primarily related to legal, accounting and consulting services and were expensed as incurred through June 30, 2023 and are included in Selling, General and Administrative expenses in the condensed consolidated statements of operations. The allocations of the fair value of the acquired business were based on preliminary valuations of the estimated net fair value of the assets acquired and liabilities assumed. The fair value estimates are subject to adjustment during the measurement period (up to one year from the acquisition date). The fair values of the net assets acquired are based on management’s estimates and assumptions, as well as other information compiled by management. During the measurement period, we will adjust preliminary valuations assigned to assets and liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date, if any, that, if known, would have resulted in revised values for these items as of that date. The net working capital adjustment related to the acquisitions are estimated as of the closing date and will be adjusted based on that estimate. Net working capital adjustments, if any, will be recorded in other assets on the condensed consolidated balance sheet. The impact of all changes, if any, that do not qualify as measurement period adjustments are included in current period earnings.

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