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Note 2 - Acquisitions and Dispositions | 12 Months Ended
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Mar. 31, 2014
Disclosure Text Block Supplement [Abstract] |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | Note 2. Acquisitions and Dispositions Acquisitions For the year ended March 31, 2014, our acquisitions of businesses (net of cash acquired) totaled $22,758,000, which consisted primarily of the following material acquisitions: Amega Scientific On November 6, 2013, we completed a business combination (the “Amega Acquisition”) whereby we acquired substantially all of the assets and certain liabilities of Amega Scientific Corporation’s (“Amega”) business which provides continuous monitoring systems to regulated industries. The asset acquisition agreement (the “Amega Agreement”) includes provisions for both contingent consideration based on the cumulative three year revenues of our Continuous Monitoring Division and for a holdback payment (subject to a post-closing adjustment), payable to the seller no later than November 6, 2014 less any losses incurred by the buyer, as defined. Under the terms of the Amega Agreement, we are required to pay contingent consideration if the cumulative revenues for our Continuous Monitoring Division for the three years subsequent to the acquisition meet certain levels. The potential consideration payable ranges from $0 to $10,000,000 and is based upon a sliding scale of three-year cumulative revenues between $31,625,000 and $43,500,000. Based upon both historical and projected growth rates, we recorded $500,000 of contingent consideration payable which represents our best estimate of the amount that will ultimately be paid. Any changes to the contingent consideration ultimately paid will result in additional income or expense in our consolidated statements of income. We will continue to monitor the results of our Continuous Monitoring Division and we will adjust the contingent liability on a go forward basis, based on then current information. The contingent consideration is payable in the third quarter of our year ending March 31, 2017. We expect to achieve savings and generate growth as we integrate the Amega operations and sales and marketing functions. These factors, among others, contributed to a purchase price in excess of the estimated fair value of the net identifiable assets acquired and, as a result, we recorded goodwill in connection with this transaction. The goodwill is expected to be deductible for tax purposes and it was assigned to our Continuous Monitoring segment. The Amega Acquisition constituted the acquisition of a business and was recognized at fair value. We determined the estimated fair values using discounted cash flow analyses and estimates made by management. The following reflects our allocation of the consideration, subject to customary purchase price adjustments in accordance with the Amega Agreement (in thousands):
Cash consideration |  | $ | 11,268 |
Holdback payment liability |  |  | 1,000 |
Contingent consideration liability |  |  | 500 |
Aggregate consideration |  | $ | 12,768 |
The purchase price was allocated as follows: |  |  |  |
Accounts receivable, net |  | $ | 663 |
Inventories, net |  |  | 410 |
Prepaid expenses and other |  |  | 11 |
Property, plant and equipment, net |  |  | 115 |
Intangibles, net |  |  | 5,838 |
Goodwill |  |  | 6,827 |
Accrued salaries and payroll taxes |  |  | (53 | )
Unearned revenues |  |  | (1,043 | )
Total purchase price allocation |  | $ | 12,768 |
The accompanying consolidated statements of income include the results of the Amega Acquisition from the acquisition date of Nov 6, 2013. The pro forma effects of the acquisition on the results of operations as if the acquisition had been completed on April 1, 2013 and 2012, are as follows (in thousands, except per share data):
|  | Year Ended March 31, |
|  | 2014 |  |  | 2013 |
Revenues |  | $ | 56,451 |  |  | $ | 50,372 |
Net income |  |  | 10,002 |  |  |  | 9,508 |
Net income per common share: |  |  |  |  |  |  |  |
Basic |  | $ | 2.90 |  |  | $ | 2.83 |
Diluted |  |  | 2.77 |  |  |  | 2.65 |
Tempsys On November 6, 2013, we completed a business combination (the “TempSys Acquisition”) whereby we acquired all of the common stock of TempSys, Inc. (“TempSys”), a company in the business of providing continuous monitoring systems to regulated industries, for $9,826,000 (subject to a post-closing adjustment). We expect to achieve savings and generate growth as we integrate the TempSys operations and sales and marketing functions. These factors, among others, contributed to a purchase price in excess of the estimated fair value of the net identifiable assets acquired and, as a result, we recorded goodwill in connection with this transaction. The goodwill is not expected to be deductible for tax purposes and it was assigned to our Continuous Monitoring segment. The TempSys Acquisition constituted the acquisition of a business and was recognized at fair value. We determined the estimated fair values using discounted cash flow analyses and estimates made by management. The following reflects our allocation of the consideration, subject to customary purchase price adjustments in accordance with the TempSys Agreement (in thousands):
The purchase price was allocated as follows: |  |  |  |
Cash |  | $ | 57 |
Accounts receivable, net |  |  | 838 |
Inventories, net |  |  | 447 |
Prepaid expenses and other |  |  | 21 |
Property, plant and equipment, net |  |  | 25 |
Deferred income taxes |  |  | 585 |
Intangibles, net |  |  | 6,135 |
Goodwill |  |  | 6,820 |
Accounts payable |  |  | (255 | )
Accrued salaries and payroll taxes |  |  | (2,134 | )
Unearned revenues |  |  | (485 | )
Other accrued expenses |  |  | (135 | )
Deferred income taxes |  |  | (2,093 | )
Total purchase price allocation |  | $ | 9,826 |
The accompanying consolidated statements of income include the results of the Tempsys Acquisition from the acquisition date of Nov 6, 2013. The pro forma effects of the acquisition on the results of operations as if the acquisition had been completed on April 1, 2013 and 2012, are as follows (in thousands, except per share data):
|  | Year Ended March 31, |
|  | 2014 |  |  | 2013 |
Revenues |  | $ | 55,129 |  |  | $ | 49,705 |
Net income |  |  | 9,132 |  |  |  | 8,100 |
Net income per common share: |  |  |  |  |  |  |  |
Basic |  | $ | 2.65 |  |  | $ | 2.41 |
Diluted |  |  | 2.53 |  |  |  | 2.25 |
For the year ended March 31, 2013, our acquisitions of businesses totaled $16,660,000, which consisted primarily of the following acquisition: Bios On May 15, 2012, we completed a business combination (the “Bios Acquisition”) whereby we acquired substantially all of the assets and certain liabilities of Bios International Corporation (“Bios”), a New Jersey corporation. The asset acquisition agreement (the “Bios Agreement”) included a provision for contingent consideration based on revenues growth over a three year earn-out period. Under the terms of the Bios Agreement, we are required to pay contingent consideration if the cumulative revenues related to the acquisition for the three years subsequent to the acquisition exceed $22,127,000. The potential future payment that we could be required to make ranges from $0 to $6,710,000. Based upon historical growth rates, we initially recorded $2,140,000 of contingent consideration payable which represented our best estimate of the amount that would ultimately be paid. Based upon actual results and current run rates, during the year ended March 31, 2014, we revised our estimate of the ultimate contingent liability that would be paid, which resulted in reducing the contingent consideration payable to $1,120,000. This gain of $1,020,000 associated with the decrease in the contingent consideration payable is included in other income (expense), net on the accompanying consolidated statements of income. Any further changes to the contingent consideration ultimately paid will result in additional income or expense in our consolidated statements of income. We will continue to monitor the results associated with the Bios Acquisition and we will adjust the contingent liability on a go forward basis, based on then current information. The contingent consideration is payable in the first quarter of our year ending March 31, 2016. We expected to achieve significant savings and income growth as we integrated the Bios operations and sales and marketing functions. These factors, among others, contributed to a purchase price in excess of the estimated fair value of net identifiable assets acquired and, as a result, we recorded goodwill in connection with this transaction. The goodwill is deductible for tax purposes and it was assigned to our Instruments segment. The Bios Acquisition constituted the acquisition of a business and was recognized at fair value. We determined the estimated fair values using discounted cash flow analyses and estimates made by management. The following reflects our allocation of the consideration, subject to customary purchase price adjustments in accordance with the Bios Agreement (in thousands):
Cash consideration |  | $ | 16,660 |
Contingent purchase price liability |  |  | 2,140 |
Aggregate consideration |  | $ | 18,800 |
The purchase price was allocated as follows: |  |  |  |
Accounts receivable, net |  | $ | 478 |
Inventories, net |  |  | 910 |
Other current assets |  |  | 28 |
Property, plant and equipment |  |  | 63 |
Intangible assets |  |  | 8,200 |
Goodwill |  |  | 9,190 |
Current liabilities |  |  | (69 | )
Total purchase price allocation |  | $ | 18,800 |
The accompanying consolidated statements of income include the results of the Bios Acquisition from the acquisition date of May 15, 2012. The pro forma effects of the acquisition on the results of operations as if the acquisition had been completed on April 1, 2012 and 2011, are as follows (in thousands, except per share data):
|  | Year Ended March 31, |
|  | 2013 |  |  | 2012 |
Revenues |  | $ | 47,216 |  |  | $ | 46,498 |
Net income |  |  | 8,471 |  |  |  | 8,102 |
Net income per common share: |  |  |  |  |  |  |  |
Basic |  | $ | 2.52 |  |  | $ | 2.47 |
Diluted |  |  | 2.36 |  |  |  | 2.34 |
Dispositions On August 12, 2013, we entered into an agreement whereby we sold our NuSonics product line for $661,000. The carrying value of this product line was $193,000 which resulted in a pre-tax gain of $468,000.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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