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Note 18 - Acquisition of Business | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | NOTE 18 – Acquisition of Business es : BAMKO On March 8, 2016, the Company closed on the acquisition of substantially all of the assets of BAMKO, Inc. The transaction had an effective date of March 1, 2016. The purchase price for the asset acquisition consisted of approximately $15.2 million in cash, net of cash acquired, the issuance of approximately 324,000 restricted shares of Superior’s common stock that vest over a five -year period, potential future payments of approximately $5.5 million in additional contingent consideration through 2021, and the assumption of certain liabilities of BAMKO, Inc. The transaction also included the acquisition of BAMKO, Inc.’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 Transferre d
A Summary of the purchase price is as follows (in thousands) : |  |  |  |
Cash consideration at closing, net of cash acquire d |  | $ | 15,161 |
Restricted shares of Superior common stock issue d |  |  | 4,558 |
Contingent consideratio n |  |  | 5,205 |
Total Consideration s |  | $ | 24,924 |
Assets Acquired and Liabilities Assumed The total purchase price was allocated to the acquired tangible and intangible assets and assumed liabilities of BAMKO , Inc. 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 following 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 (in thousands):
Accounts receivabl e |  | $ | 4,885 |
Prepaid expenses and other current asset s |  |  | 3,200 |
Inventorie s |  |  | 236 |
Property, plant and equipmen t |  |  | 199 |
Other Asset s |  |  | 100 |
Identifiable intangible asset s |  |  | 11,360 |
Goodwil l |  |  | 6,994 |
Total asset s |  | $ | 26,974 |
Accounts Payable s |  |  | 1,314 |
Other current liabilitie s |  |  | 736 |
Total liabilitie s |  | $ | 2,050 |
The Company recorded $11.4 million in identifiable intangibles at fair value, consisting of $2.1 million in acquired customer relationships, $0.4 million in non-compete agreements from the former owners of BAMKO, Inc., and $8.9 million for the acquired trade name. The estimated fair value for acquisition-related contingent consideration payable is $5.2 million as of December 31, 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 difference 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 relationships will be amortized for seven years beginning on March 1, 2016 and the non-compete agreement will be amortized for five years and ten months. The trade name is considered an indefinite-life asset and as such will not be amortized. The Company recognized amortization expense on these acquired intangibl e assets of $0.4 million for the year ended December 31, 2017 and $0.3 million for the year ended December 31, 2016. For the year ended December 31, 201 6, the Company incurred and expensed transaction related expenses of approximately $1.1 million. This amount is included in selling and administrative expenses on the consolidated statements of comprehensive income. On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the years ended December 31, 2016 and 2015, net sales would have increased approximately $6.6 million and $31.5 million respectively. Net income would have increased $1.1 million or $0.08 per share for the year ended December 31, 2016, and decreased by $0.4 million or $0.03 per share for the year ended December 31, 2015. Pre-tax acquisition related expenses of $1.1 million have been recorded as though they were incurred as of January 1, 2014 for this comparison. Public Identity 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 $0.8 million in cash, the issuance of approximately 54,000 restricted shares of Superior ’s common stock and future payments of approximately $0.4 million 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 $2.3 million. Based upon our preliminary estimates of their acquisition date fair values, we have assigned approximately $1.7 million to identifiable intangible assets and approximately $0.6 million to goodwill. Our final fair value determinations may be significantly different. Tangerine Promotions On November 30, 2017, BAMKO closed on the acquisition of substantially all of the assets of Tangerine Promotions, Ltd and Tangerine Promotions West, Inc. (collectively “Tangerine”). The transaction had an effective date of December 1, 2017. Tangerine is a promotional products and branded merchandise agency that serves many well-known brands. The company is one of the leading providers of Point-of-Purchase (POP) and Point-of-Sale (POS) merchandise in the country. The purchase price for the asset acquisition consisted of approximately $7.2 million in cash, subject to adjustment, the issuance of approximately 83,000 restricted shares of Superior’s common stock that vests over a four -year period, the potential future payments of approximately $5.5 million in additional contingent consideration through 2021, and the assumption of certain liabilities. 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, whic h is filed as an exhibit to this Annual Report.
Fair Value of Consideration Transferre d
A Summary of the purchase price is as follows (in thousands) : |  |  |  |
Cash consideration at closin g |  | $ | 7,222 |
Restricted shares of Superior common stock issue d |  |  | 1,657 |
Contingent consideratio n |  |  | 3,209 |
Total Consideration s |  | $ | 12,088 |
Assets Acquired and Liabilities Assumed The total purchase price was allocated to the acquired tangible and intangible assets and assumed liabilities of Tangerine based on their estimated fair values as of December 1, 2017. The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was allocated to goodwill. The following 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 o f Tangerine based on their estimated fair values as of the effective date of the transaction. The assets and liabilities of Tangerine shown below are based on our preliminary estimates of their acquisition date fair values. Our final fair value determinations may be significantly different than those shown below. The following is our preliminary assignment of the aggregate consideration (in thousands):
Accounts receivabl e |  | $ | 5,051 |
Prepaid expenses and other current asset s |  |  | 969 |
Property, plant and equipmen t |  |  | 131 |
Identifiable intangible asset s |  |  | 6,495 |
Goodwil l |  |  | 4,169 |
Total asset s |  | $ | 16,815 |
Accounts Payable s |  |  | 3,374 |
Other current liabilitie s |  |  | 1,353 |
Total liabilitie s |  | $ | 4,727 |
The Company recorded $6.5 million in identifiable intangibles at fair value, consisting of $3.1 million in acquired customer relationships, $0.2 million in non-compete agreements from the former owners of Tangerine, and $3.2 million for the acquired trade name. The estimated fair value for acquisition-related contingent consideration payable is $ 3.2 million as of December 31, 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 difference 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 relationships will be amortized for seven years beginning on December 1, 2017 and the non-compete agreement will be amortized for seven years. The trade name is considered an indefinite-life asset and as such will not be amortized. The Company recognized amortization expense on these acquired intangible assets of $ 0.1 million for the year ended December 31, 2017. For the year ended December 31, 201 7, the Company incurred and expensed transaction related expenses of approximately $0.2 million. This amount is included in selling and administrative expenses on the consolidated statements of comprehensive income. On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the entire year ended December 31, 2017 and years ended December 31, 2016 and 2015, net sales would have increased approximately $35.1 million, $43.1 million and $48.0 million respectively. Net income would have increased $0.1 million in 2017, decreased $2.4 million or $0.17 per share in 2016, and increased $1.9 million or $0.13 per share in 2015. Pre-tax acquisition related expenses of $0.2 million have been recorded as though they were incurred as of January 1, 2015 for this comparison.

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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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