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Acquisition

6 Months Ended

Jun. 30, 2022

Acquisition

Acquisition

3.    Acquisition

On June 7, 2021, the Company acquired substantially all of the operating assets and certain liabilities of Forsake, Inc. (“Forsake”) a distributor of outdoor footwear, under the brand name “Forsake.” The principal assets acquired were inventory, accounts receivable, and intellectual property, including the Forsake brand name. The aggregate purchase price was approximately $2.6 million, plus contingent payments to be paid annually over a period of five years, depending on Forsake achieving certain performance measures. The Company’s estimate of the discounted fair value of the contingent payments was approximately $1.3 million in total. The $2.6 million purchase price was funded with the Company’s available cash. Transaction costs incurred in connection with the acquisition were not material to the Company’s financial statements.

The fair values assigned to the assets acquired and liabilities assumed were:

​

​	​	​	​
Accounts receivable, net		$	143
Inventories	​		619
Prepaid expenses and other current assets	​	​	72
Property, plant and equipment, net	​		17
Goodwill	​		1,205
Trademark	​		1,900
Accrued liabilities	​		(48)
​	​	$	3,908

​

The Company recorded $3.1 million of intangible assets, including $1.2 million of goodwill, which has been allocated to the wholesale and retail segments as of the acquisition date. Goodwill reflects the excess purchase price over the fair value of net assets. All of this goodwill is deductible for tax purposes. The trademark will not be amortized, but instead tested for impairment on an annual basis.

​

The accompanying consolidated condensed financial statements include the results of Forsake from the date of acquisition through June 30, 2022. For the three months ended June 30, 2022, Forsake’s net sales totaled approximately $0.4 million, of which $0.2 million was recognized in the wholesale segment and $0.2 million was recognized in the retail segment. For the six months ended June 30, 2022, Forsake’s net sales totaled approximately $1.1 million, of which $0.6 million was recognized in the wholesale segment and $0.5 million was recognized in the retail segment. Sales for the three and six months ended June 30, 2021 were not material. Pro forma financial information is not presented as the effects of this acquisition are not material to the Company’s results of operations or financial position.

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- 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 https://asc.fasb.org/topic&trid=2303972

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 5
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472

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- References

No definition available.

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