XML 23 R8.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Acquisitions | 12 Months Ended
--- | ---
Apr. 30, 2017
Business Combinations [Abstract] |
Acquisitions | 2. Acquisitions DRP Acquisition On May 5, 2014, we acquired substantially all of the net assets of TTPP for $22.8 million, plus a $1.0 million working capital adjustment, for a total purchase price of $23.8 million, utilizing cash on hand. The DRP Acquisition of TTPP’s custom polymer injection molding capabilities was designed to vertically integrate a key component of our manufacturing operations and provide us with increased flexibility within our supply chain. Pro forma results of operations assuming that this acquisition had occurred on May 1, 2014 are not required because of the immaterial impact on our consolidated financial statements for all periods presented. BTI Acquisition On December 11, 2014, we acquired all of the issued and outstanding stock of BTI for $130.5 million, plus a $3.1 million working capital adjustment, for a total purchase price of $133.6 million, pursuant to a Stock Purchase and Sale Agreement. The BTI Acquisition was financed using a combination of existing cash balances and cash from a $100.0 million draw on our line of credit, which was expanded to $125.0 million as a result of our partial exercise of the accordion feature on that line of credit. Based in Columbia, Missouri, BTI develops, produces, and delivers innovative, high-quality hunting and shooting accessories under several brands. On January 9, 2015, we acquired substantially all of the net assets of Hooyman LLC, a manufacturer of extendable tree saws designed for the hunting and outdoor industry, for $1.9 million utilizing cash on hand. We have relocated its operations to our Columbia, Missouri facility. The aggregate purchase price of these acquisitions, including the working capital adjustments, was $135.5 million. The following table reflects the unaudited pro forma results of operations assuming that the BTI Acquisition had occurred on May 1, 2013 (in thousands, except per share data):
|  | For the Year |
|  | Ended |
|  | April 30, 2015 |
Net sales |  | $ | 582,875 |
Income from continuing operations |  |  | 53,388 |
Net income per share - diluted |  |  | 0.97 |
The unaudited pro forma income from continuing operations for the year ended April 30, 2015 has been adjusted to reflect increased amortization of intangibles as if the BTI Acquisition had occurred on May 1, 2013. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of the actual results that would have been achieved had the BTI Acquisition occurred as of May 1, 2013 or the results that may be achieved in future periods. 2017 Acquisitions In fiscal 2017, we acquired substantially all of the net assets of Taylor Brands, LLC and Ultimate Survival Technologies Inc., as well as all of the issued and outstanding stock of Crimson Trace Corporation for an aggregate purchase price of $211.1 million, net of cash acquired, subject to certain adjustments, utilizing cash on hand. In connection with the purchase of Ultimate Survival Technologies, Inc., up to an additional $2.0 million may be paid over a period of two years, contingent upon the financial performance of the acquired business. The valuation of this contingent liability was established in accordance with ASC 805 — Business Combinations. As of April 30, 2017, the contingent liability was recorded at a fair value of $1.7 million, of which, $900,000 was recorded as a current liability. Taylor Brands, LLC, based in Kingsport, Tennessee, now operating as BTI Tools, LLC, is a designer and distributor of high-quality knives, specialty tools, and accessories and a licensee of our wholly owned subsidiary, Smith & Wesson Corp. Crimson Trace Corporation, based in Wilsonville, Oregon, is a leading provider of laser sight and tactical light products for consumers, law enforcement, security agencies, and military agencies around the globe. Ultimate Survival Technologies, Inc., based in Jacksonville, Florida, now operating as UST, LLC, is a provider of high-quality survival and camping equipment, including LED lights, all-weather fire starter kits, unbreakable signal mirrors, premium outdoor cutting tools, first aid kits, survival kits, and camp kitchen products. We are finalizing the valuations of the assets acquired and liabilities assumed related to the 2017 Acquisitions. Therefore, the fair values set forth herein are subject to further adjustments as we obtain additional information during the respective measurement periods, which will not exceed 12 months from the date of each acquisition. The 2017 Acquisitions will necessitate the use of this measurement period to adequately analyze and assess a number of factors used in establishing the asset and liability fair values as of each acquisition date, including the significant contractual and operational factors underlying the trade name, developed technology, and customer relationship intangible assets and the related tax impacts of any changes made. During the year ended April 30, 2017, we decreased goodwill by $141,000 primarily as a result of inventory valuation adjustments and accounts receivable allowance valuations relating to the Taylor Brands, LLC and Crimson Trace Corporation acquisitions. The following table summarizes the estimated preliminary allocation of the purchase price for the 2017 Acquisitions (in thousands):
|  | 2017 Acquisitions |  |  | Measurement |  |  |  |  |
|  | (As Initially |  |  | Period |  |  | 2017 Acquisitions |
|  | Reported) |  |  | Adjustments |  |  | (As Adjusted) |
Accounts receivable |  | $ | 11,635 |  |  | $ | (145 | ) |  | $ | 11,490 |
Inventories |  |  | 31,269 |  |  |  | 453 |  |  |  | 31,722 |
Income tax receivable |  |  | — |  |  |  | 68 |  |  |  | 68 |
Other current assets |  |  | 430 |  |  |  | (132 | ) |  |  | 298 |
Property, plant, and equipment |  |  | 8,232 |  |  |  | — |  |  |  | 8,232 |
Intangibles |  |  | 97,850 |  |  |  | — |  |  |  | 97,850 |
Goodwill |  |  | 92,801 |  |  |  | (141 | ) |  |  | 92,660 |
Total assets acquired |  |  | 242,217 |  |  |  | 103 |  |  |  | 242,320 |
Accounts payable |  |  | 6,214 |  |  |  | 18 |  |  |  | 6,232 |
Accrued expenses |  |  | 973 |  |  |  | 128 |  |  |  | 1,101 |
Accrued payroll |  |  | 1,500 |  |  |  | (98 | ) |  | 1,402 |
Accrued income taxes |  |  | 6 |  |  |  | (6 | ) |  |  | — |
Accrued warranty |  | 98 |  |  |  | 96 |  |  |  | 194 |
Deferred income taxes |  |  | 20,658 |  |  |  | (35 | ) |  |  | 20,623 |
Total liabilities assumed |  |  | 29,449 |  |  |  | 103 |  |  |  | 29,552 |
|  | $ | 212,768 |  |  | $ | — |  |  | $ | 212,768 |
Included in general and administrative costs are $3.8 million of acquisition-related costs incurred for the 2017 Acquisitions during the year ended April 30, 2017. The 2017 Acquisitions generated $61.1 million of revenue during the year ended April 30, 2017. We amortize intangible assets in proportion to expected yearly revenue generated from the intangibles that we acquire. We amortize order backlog over the estimated life during which the backlog is fulfilled. The following are the identifiable intangible assets acquired (in thousands) in the 2017 Acquisitions and their respective weighted average lives:
|  |  |  |  | Weighted Average |
|  | Amount |  |  |  | Life (In years) |
Developed technology |  | $ | 3,000 |  |  |  |  | 4.1 |
Customer relationships |  |  | 76,600 |  |  |  |  | 5.1 |
Trade names |  |  | 17,000 |  |  |  |  | 4.8 |
Order backlog |  |  | 1,150 |  |  |  |  | 0.3 |
Non-competition agreement |  |  | 100 |  |  |  |  | 3.4 |
|  | $ | 97,850 |  |  |  |  |  |
Additionally, the following table reflects the unaudited pro forma results of operations assuming that the 2017 Acquisitions had occurred on May 1, 2015 (in thousands, except per share data):
|  | For the Year |  |  |  | For the Year |
|  | Ended |  |  |  | Ended |
|  | April 30, 2017 |  |  |  | April 30, 2016 |
Net sales |  | $ | 934,247 |  |  |  | $ | 816,699 |
Income from continuing operations |  |  | 195,295 |  |  |  |  | 151,258 |
Net income per share - diluted |  |  | 2.30 |  |  |  |  | 1.80 |
The unaudited pro forma income from operations for the years ended April 30, 2017 and 2016 has been adjusted to reflect increased cost of goods sold from the fair value step-up in inventory, which is expensed over the first inventory cycle, and the amortization of intangibles and order backlog incurred as if the 2017 Acquisitions had occurred on May 1, 2015. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of the actual results that would have been achieved had the 2017 Acquisitions occurred as of May 1, 2015 or the results that may be achieved in future periods.

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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1497-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1490-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1392-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1486-128463 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4845-128472 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1524-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4922-128472 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4934-128472 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4926-128472 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=73530397&loc=SL65897772-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1383-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 + 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