XML 36 R24.htm IDEA: XBRL DOCUMENT
v3.22.1

Note 17 - Acquisition of Businesses | 12 Months Ended
--- | ---
Dec. 31, 2021
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | NOTE 17 – Acquisition of Businesses: Gifts By Design, Inc. On January 29, 2021, the Company, through BAMKO, acquired substantially all of the assets of Gifts By Design, Inc. (“Gifts by Design”) of Seattle, Washington. Gifts by Design is a promotional products and branded merchandise agency that is well-established as a developer and supplier of corporate awards, incentives, and recognition programs for some of the world’s biggest brands. The purchase price for the acquisition consisted of $6.0 million in cash at closing. Assets Acquired and Liabilities Assumed The total purchase price was allocated to the tangible and intangible assets and liabilities of Gifts by Design based on their estimated fair values as of the acquisition date. 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 Gifts by Design based on their estimated fair values as of the effective date of the transaction (in thousands):
Accounts receivable |  | $ | 251 |
Prepaid expenses and other current assets |  |  | 196 |
Property, plant and equipment |  |  | 60 |
Intangible assets, net |  |  | 3,673 |
Goodwill |  |  | 2,417 |
Total assets |  | $ | 6,597 |
Accounts payable |  |  | 199 |
Other current liabilities |  |  | 372 |
Total liabilities |  | $ | 571 |
The Company recorded $3.7 million in identifiable intangibles at fair value, consisting of $2.5 million in acquired customer relationships and $1.2 million for the brand name. The intangible assets associated with the customer relationships are being amortized for seven years. The brand 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 $0.3 million during the year ended December 31, 2021. The difference between the fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed was recorded as goodwill, which is primarily attributed to the assembled workforce and expanded market opportunities. Sutter’s Mill Specialties, Inc. On December 2, 2021, the Company, principally through BAMKO, acquired substantially all of the assets of Sutter’s Mill Specialties, Inc. (“Sutter’s Mill”) of Tempe, Arizona. Sutter’s Mill is a vertically integrated manufacturer of high quality, decorated promotional products. Sutter’s Mill has the capability to print on demand and create customized promotional programs and products for customers of any size. The purchase price of the acquisition consisted of the following: (a) approximately $10.4 million in cash at closing, subject to a working capital adjustment, (b) the issuance of 45,620 restricted shares of Superior’s common stock that vest ratably over a three-year period, and (c) potential future payments of approximately $4.5 million in additional contingent consideration for calendar years 2022 through 2024 based on the results of the acquired business. Fair Value of Consideration Transferred A summary of the purchase price is as follows (in thousands):
Cash consideration at closing |  | $ | 10,408 |
Restricted shares of Superior common stock issued |  |  | 869 |
Contingent consideration |  |  | 2,520 |
Total Consideration |  | $ | 13,797 |
Assets Acquired and Liabilities Assumed The table below presents the allocation of the total fair value of consideration transferred, as shown above, to the acquired tangible and intangible assets and liabilities of Sutter’s Mill based on their estimated fair values as of the effective date of the transaction. The assets and liabilities of Sutter’s Mill shown below are based on our preliminary estimates of their acquisition date fair values. Our final fair value determination may be different than those shown below. The following is our preliminary assignment of the aggregate consideration (in thousands):
Accounts receivable |  | $ | 4,701 |
Inventories |  |  | 9,149 |
Prepaid expenses and other current assets |  |  | 135 |
Property, plant and equipment |  |  | 1,043 |
Operating lease right-of-use assets |  |  | 648 |
Intangible assets, net |  |  | 2,031 |
Goodwill |  |  | 894 |
Other assets |  |  | 41 |
Total assets |  | $ | 18,642 |
Accounts payable |  |  | 3,209 |
Other current liabilities |  |  | 389 |
Long-term debt |  |  | 758 |
Long-term operating lease liabilities |  |  | 489 |
Total liabilities |  | $ | 4,845 |
The Company recorded $2.0 million in identifiable intangibles at fair value, consisting of $1.2 million in acquired customer relationships, $0.1 million for a non-compete agreement and $0.7 million for the Sutter's Mill Specialties trade name. The intangible assets associated with the customer relationships are being amortized for seven years 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 difference between the fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed was recorded as goodwill, which is primarily attributed to the assembled workforce and expanded market opportunities. The acquisition of Sutter’s Mill was treated as an asset purchase for income tax purpose, and therefore, the resulting goodwill from this acquisition was deductible for U.S. income tax purposes.

X
- 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 http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration