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Note 11 - Acquisition of Businesses | 6 Months Ended
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Jun. 30, 2019
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | NOTE 1 1 – Acquisition of Business es : CID Resources On May 2, 2018, the Company acquired CID Resources, Inc., a Delaware corporation (“CID”), which manufactures medical uniforms, lab coats, and layers, and sells its products to specialty uniform retailers, ecommerce medical uniform retailers, and other retailers. The purchase price in the acquisition consisted of the following: (a) approximately $84.4 million in cash at closing, (b) the issuance of 150,094 shares of the Company’s common stock to an equityholder of CID, and (c) $2.5 million in cash as a result of the cash and working capital adjustment. Fair Value of Consideration Transferred
A Summary of the purchase price is as follows (in thousands): |
Cash consideration at closing |  | $ | 84,430 |
Superior common stock issued |  |  | 3,763 |
Cash and working capital adjustment |  |  | 2,521 |
Total Considerations |  | $ | 90,714 |
Assets Acquired and Liabilities Assumed The total purchase price was allocated to the tangible and intangible assets and liabilities of CID based on their estimated fair values as of May 2, 2018. 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 liabilities of CID based on their estimated fair values as of the effective date of the transaction (in thousands):
Cash |  | $ | 1,360 |
Accounts receivable |  |  | 9,657 |
Prepaid expenses and other current assets |  |  | 1,248 |
Inventories |  |  | 28,895 |
Property, plant and equipment |  |  | 1,134 |
Contract assets |  |  | 2,535 |
Identifiable intangible assets |  |  | 41,020 |
Goodwill |  |  | 20,323 |
Total assets |  | $ | 106,172 |
Accounts payables |  |  | 5,030 |
Deferred tax liability |  |  | 9,461 |
Other current liabilities |  |  | 967 |
Total liabilities |  | $ | 15,458 |
The amounts in the table above are reflective of measurement period adjustments made during the three and six months ended June 30, 2019, which mainly included an increase of $ 2.4 million to goodwill, a decrease of $1.8 million to inventory and an increase of $0.6 million to accounts payable. The measurement period adjustments did not have a significant impact on the Company’s statement of operations or cash flows. The Company finalized the purchase price allocation of CID during the second quarter of 2019. The Company recorded $41.0 million in identifiable intangibles at fair value, consisting of $26.0 million in acquired customer relationships, $0.8 million for a non-compete agreement and $14.2 million for the brand name. Goodwill was calculated as the difference between the fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. This goodwill will not be deductible for tax purposes. The intangible assets associated with the customer relationships are being amortized for fifteen years beginning on May 2, 2018 and the non-compete agreement is being amortized for five years. The trade name is considered an indefinite-life asset and as such is not being amortized. The Company recognized amortization expense on these acquired intangible assets of $0.5 million and $0.3 million for the three months ended June 30, 2019 and 2018, respectively. The Company recognized amortization expense on these acquired intangible assets of $1.0 million and $0.8 million for the six months ended June 30, 2019 and 2018, respectively. On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the three months ended June 30, 2018, net sales would have increased approximately $5.1 million. Net income would have increased $1.3 million in 2018, or $0.80 per share. On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the six months ended June 30, 2018, net sales would have increased approximately $22.3 million. Net income would have increased $2.6 million in 2018, or $0.17 per share. Other Acquisitions of Businesses 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 transaction also included the acquisition of BAMKO, Inc.’s subsidiaries in Hong Kong, China, Brazil and England as well as an affiliate in India. BAMKO is a promotional products, merchandise, and packaging company that serves the world’s most prominent brands. The purchase price included a potential future payment of approximately $5.5 million in additional contingent consideration through 2021. The estimated fair value for acquisition-related contingent consideration payable was $3.2 million as of June 30, 2019. The current portion of $1.2 million shall be paid in the second quarter of 2020. 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 statement of comprehensive income. 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 included future payments of approximately $0.4 million in additional consideration through 2020. Tangerine Promotions . On November 30, 2017, BAMKO acquired 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 included potential future payments of approximately $3.2 million in additional contingent consideration through 2021. The estimated fair value for acquisition-related contingent consideration payable is $2.6 million as of June 30, 2019. 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 statement of comprehensive income.

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