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Note 9 - Acquisition of Business | 9 Months Ended
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Sep. 30, 2017
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | NOTE 9 – Acquisition of Business es : On March 8, 2016 , the Company closed on the acquisition of substantially all of the assets of BAMKO, Inc. (“BAMKO”). The transaction had an effective date of March 1, 2016. BAMKO is a full-service merchandise sourcing and promotional products company based in Los Angeles, CA. With sales offices in the United States and Brazil, as well as support offices in China, Hong Kong, and India, BAMKO serves many of the world’s most successful brands. The purchase price for the asset acquisition consisted of approximately $15,161,000 in cash, net of cash acquired, the issuance of approximately 324,000 restricted shares of Superior’s common stock that vests over a five -year period, the potential future payment of approximately $5,500,000 in additional contingent consideration through 2021, and the assumption of certain liabilities of BAMKO. The transaction also includes the acquisition of BAMKO’s subsidiaries in Hong Kong, China, Brazil and England as well as an affiliate in India. The foregoing description of the asset purchase agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the agreement, which is filed as an exhibit to the Quarterly Report on Form 10 -Q filed on April 28, 2016 . Fair Value of Consideration Transferred
A summary of the purchase price is as follows: |  |  |  |
Cash consideration at closing, net of cash acquired |  | $ | 15,161,000 |
Restricted shares of Superior common stock issued |  |  | 4,558,000 |
Contingent consideration |  |  | 5,205,000 |
Total Consideration |  | $ | 24,924,000 |
Assets Acquired and Liabilities Assumed The total purchase price was allocated to t he acquired tangible and intangible assets and assumed liabilities of BAMKO based on their estimated fair values as of March 1, 2016. The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was allocated to goodwill. The followin g table presents the allocation of the total fair value of consideration transferred, as shown above, to the acquired tangible and intangible assets and assumed liabilities of BAMKO based on their fair values as of the effective date of the transaction. The following is our assignment of the aggregate consideration:
Accounts receivable |  | $ | 4,885,000 |
Prepaid expenses and other current assets |  |  | 3,200,000 |
Inventories |  |  | 236,000 |
Property, plant and equipment |  |  | 199,000 |
Other assets |  |  | 100,000 |
Identifiable intangible assets |  |  | 11,360,000 |
Goodwill |  |  | 6,994,000 |
Total assets |  | $ | 26,974,000 |
Accounts payable |  | $ | 1,314,000 |
Other current liabilities |  |  | 736,000 |
Total liabilities |  | $ | 2,050,000 |
The Company recorded $11,360,000 in identifiable intangibles at fair value, consisting of $2,090,000 in acquired customer relationships, $370,000 in non-compete agreements from the former owners of BAMKO, and $8,900,000 for the acquired trade name. T he estimated fair value for acquisition-related contingent consideration payable was $5,368 ,000 as of September 30, 2017. The Company will continue to evaluate this liability for remeasurement at the end of each reporting period and any change will be recorded in the Company's consolidated statement of comprehensive income. The carrying amount of the liability may fluctuate significantly and actual amounts paid may be materially different from the estimated value of the liability. Goodwill was calculated as the di fference between the fair value of the consideration and the values assigned to the assets acquired and liabilities assumed. The intangible assets associated with the customer relationshi ps are being amortized for seven years beginning on March 1, 2016 and the non-compete agreement is being amortized for five years and ten months. The trade name is considered an indefinite-life asset and as such is not being amortized. The Company recognized amortization expense on these acqui red intangible assets of $ 90,000 for each of the three -month periods ended September 30, 2017 and 2016 and $271,000 and $211,000 for the nine -month periods ended September 30, 2017 and 2016, respectively. For the three and nine -month periods ended September 30 , 2016, the Company incurred and expensed transaction related expenses of approximately $44 ,000 and $1,116 ,000, respectively. These amounts are included in selling and administrative expenses on the consolidated statements of comprehensive income. O n a pro forma basis as if the results of this acquisition had been included in our consolidated results for the entire nine -month period ended September 30, 2016, net sales would have increased approximately $6,587 ,000. Net income for the nine -month period ended September 30, 2016 would have increased approximately $1,021,000 or $0.07 per share. On August 21, 2017, BAMKO acquired substantially all of the assets and assumed certain liabilities of PublicIdentity, Inc. (“ Public Identity”) of Los Angeles, CA. Public Identity is a promotional products and branded merchandise agency that provides innovative, high quality merchandise and promotional products to corporate clients and universities across the country. The purchase price for the acquisition consisted of $766,000 in cash, the issuance of approximately 54,000 restricted shares of Superior’s common stock and future payments of approximately $440,000 in additional consideration through 2020. The majority of the shares issued vest over a three -year period. The preliminary estimated fair value of the consideration transferred is approximately $2,300,000. Based upon our preliminary estimates of their acquisition date fair values, we have assigned approximately $2,000,000 to identifiable intangible assets and approximately $300,000 to goodwill. Our final fair value determinations may be significantly different.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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