XML 26 R12.htm IDEA: XBRL DOCUMENT
v3.10.0.1

ACQUISITION OF SUPREME INDUSTRIES, INC. | 12 Months Ended
--- | ---
Dec. 31, 2018
Business Combinations [Abstract] |
ACQUISITION OF SUPREME INDUSTRIES, INC. | ACQUISITION OF SUPREME INDUSTRIES, INC. On September 27, 2017, the Company completed the acquisition of Supreme Industries, Inc. (“Supreme”) following a cash tender offer by the Company for all outstanding shares of Supreme’s Class A and Class B common stock for $21 per share for an aggregate consideration paid of $360.4 million. The Company financed the Supreme acquisition and related fees and expenses using the proceeds of the Company’s $325 million offering in aggregate principal amount of 5.50% senior unsecured notes due 2025 (as described in further detail in Note 10) and available cash and cash equivalents. Supreme is one of the nation’s leading manufacturers of specialized commercial vehicles, including cutaway and dry-freight van bodies, refrigerated units, and stake bodies. Supreme has manufacturing facilities in Goshen and Ligonier, Indiana; Jonestown, Pennsylvania; Cleburne, Texas; Griffin, Georgia; and Moreno Valley, California. Supreme is part of our Final Mile Products segment created by the Company in the fourth quarter of 2017. This acquisition allows the Company to accelerate our growth and greatly expand our presence in the final mile space, with increased distribution paths and greater customer reach, and supports the Company’s objective to transform it into a more diversified industrial manufacturer. The Company incurred various costs related to the Supreme acquisition including fees paid to an investment banker for acquisition services and the related bridge financing commitment as well as professional fees for diligence, legal and accounting totaling $0.1 million and $9.6 million for the twelve month periods ending December 31, 2018 and 2017, respectively. These costs have been recorded as Acquisition Expenses in the Consolidated Statements of Operations. The aggregate purchase price of $360.4 million was allocated to the opening balance sheet of Supreme at September 27, 2017, the date of acquisition, as follows (in thousands):
| Acquisition Date
Cash | $ | 36,878 |
Accounts receivable | 25,196 |
Inventories | 33,471 |
Prepaid expense and other | 23,916 |
Property, plant, and equipment | 59,891 |
Intangible assets | 161,200 |
Goodwill | 167,714 |
Other assets | 127 |
Total assets acquired | 508,393 |
Current portion of long-term debt | 7,167 |
Accounts payable | 10,546 |
Other accrued liabilities | 55,518 |
Deferred income taxes | 71,880 |
Long-term liabilities | 2,918 |
Total liabilities assumed | 148,029 |
Net assets acquired | $ | 360,364 |
Acquisition, net of cash acquired | $ | 323,486 |
Intangible assets of $161.2 million were recorded as a result of the acquisition and consist of the following (in thousands):
| Amount |  | Useful Life
Tradename | $ | 20,000 |  |  | 20 years
Customer relationships | 139,000 |  |  | 15 years
Backlog | 2,200 |  |  | Less than 1 year
| $ | 161,200 |  |  |
Goodwill of $167.7 million was recorded as a result of the acquisition. The amount recorded as goodwill for the Supreme acquisition is not deductible for tax purposes. Goodwill, calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized, is comprised of operational synergies that are expected to be realized in both the short and long-term and the opportunity to enter new market sectors with higher margin potential, which will enable us to deliver greater value to our customers and shareholders. During 2018, the Company made certain adjustments to its purchase price allocation to adjust tax obligations, inventory, accrued liabilities, and accounts receivable, which resulted in a $1.5 million decrease in goodwill. Unaudited Pro forma Results The results of Supreme are included in the Consolidated Statements of Operations from the date of acquisition, including $347.3 million and $67.1 million in net sales for the years ended December 31, 2018 and 2017, respectively, and net income of $13.3 million and a net loss of $1.6 million for the year ended December 31, 2018 and 2017, respectively. The following unaudited pro forma information is shown below as if the acquisition of Supreme had been completed as of the beginning of the earliest period presented (in thousands):
| Year Ended December 31,
| 2017 |  | 2016
Sales | $ | 1,998,043 |  |  | $ | 2,139,404 |
Net income | $ | 117,786 |  |  | $ | 124,323 |
The information presented above is for informational purposes only and is not necessarily indicative of the actual results that would have occurred had the acquisition been consummated at the beginning of the respective periods, nor is it necessarily indicative of future operating results of the combined companies under the ownership and management of the Company.

X
- 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
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration