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Note 2 - Acquisitions | 12 Months Ended
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Dec. 31, 2021
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
2. | Acquisitions
On October 1, 2021, the Company acquired all of the net assets of Shaw, based in Powder Springs, Georgia, for $12.1 million. Shaw is a full-line distributor of stainless steel sheet, pipe, tube, bar and angles. Shaw also manufactures and distributes stainless steel bollards and water treatment systems. The acquisition includes Shaw's stainless-steel distribution and fabrication businesses as well as its architectural and barrier defense businesses. As of the effective date of the acquisition, Shaw’s results are included in the Company’s specialty metals flat products segment. Upon the acquisition, the Company entered into an amendment to its credit facility to include the eligible assets of Shaw. On December 14, 2020, the Company acquired the assets of Action Stainless, based outside of Dallas, Texas, for $19.5 million. Action Stainless is a full line distributor of stainless steel and aluminum plate, sheet, angles, rounds, flat bar, tubing and pipe and offers a wide range of processing capabilities including plasma, laser and waterjet cutting and CNC machining. As of the effective date of the acquisition, Action Stainless results are included in the Company’s specialty metals flat products segment. Upon the acquisition, the Company entered into an amendment to its credit facility to include the eligible assets of Action Stainless. On August 5, 2019, the Company acquired certain assets related to the manufacturing of the EZ Dumper® hydraulic dump inserts for $0.1 million. The dump inserts are sold through a network of more than 100 dealers across the United States and Canada. As of the effective date of the acquisition, EZ Dumper’s results are included in the Company’s carbon flat products segment. On January 2, 2019, the Company acquired substantially all of the net assets of McCullough, based in Kenton, Ohio, for $11.0 million. McCullough was founded in 1965 and manufactures and sells branded self-dumping metal hoppers used in a variety of industrial applications. McCullough’s products are primarily sold through industrial distributors and catalogues. As of the effective date of the acquisition, McCullough’s results are included in the Company’s carbon flat products segment. The acquisitions are not considered significant and thus pro forma information has not been provided. The acquisitions were accounted for as business combinations and the assets and liabilities were valued at fair market value. The table below summarizes the final purchase price allocation of the fair market values of the assets acquired and liabilities assumed.
|  | Shaw |  |  | Action Stainless |  |  | EZ Dumper |  |  | McCullough |
|  | As of |  |  | As of |  |  | As of |  |  | As of |
Details of Acquisition (in thousands) |  | October 1, 2021 |  |  | December 14, 2020 |  |  | August 5, 2019 |  |  | January 2, 2019 |
Assets acquired |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable, net |  | $ | 1,510 |  |  | $ | 3,239 |  |  | $ | - |  |  | $ | 461 |
Inventories |  |  | 3,129 |  |  |  | 3,656 |  |  |  | 43 |  |  |  | 586 |
Property and equipment |  |  | 1,886 |  |  |  | 10,610 |  |  |  | 67 |  |  |  | 4,138 |
Prepaid expenses and other |  |  | 5,986 |  |  |  | 204 |  |  |  | - |  |  |  | - |
Goodwill |  |  | 5,262 |  |  |  | 1,894 |  |  |  | 166 |  |  |  | 898 |
Intangible assets |  |  | 2,750 |  |  |  | 4,410 |  |  |  | 23 |  |  |  | 5,599 |
Total assets acquired |  |  | 20,523 |  |  |  | 24,013 |  |  |  | 299 |  |  |  | 11,682 |
Total liabilities assumed |  |  | (8,418 | ) |  |  | (4,513 | ) |  |  | (166 | ) |  |  | (682 | )
Cash paid |  | $ | 12,105 |  |  | $ | 19,500 |  |  | $ | 133 |  |  | $ | 11,000 |
The purchase price allocations presented above are based upon management’s estimate of the fair value of the acquired assets and assumed liabilities using Level 3 valuation techniques including income, cost and market approaches. The fair value estimates involve the use of estimates and assumptions, including, but not limited to, the timing and amounts of future cash flows, revenue growth rates, discount rates, and royalty rates. The total liabilities assumed for Action Stainless include an immaterial earn-out amount.

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