XML 20 R9.htm IDEA: XBRL DOCUMENT
v3.21.2

Acquisition | 6 Months Ended
--- | ---
Jun. 30, 2021
Acquisition [Abstract] |
Acquisition | NOTE 2. ACQUISITIONS Barnes On September 30, 2020, Sierra entered into an Asset Purchase Agreement (the “Barnes Asset Purchase Agreement”) with Remington Outdoor Company, Inc. and certain of its subsidiaries (the “Seller”), pursuant to which Sierra agreed to (i) acquire certain assets of the Seller constituting the Barnes business (“Barnes”), including equipment, inventory, intellectual property (including exclusive use of Barnes’ intellectual property in the all-copper and powdered metallurgy ammunition fields as well as its trademarks) and a leasehold interest in certain real property located in Mona, Utah (collectively, the “Barnes Purchased Assets”) and (ii) assume certain liabilities related to the Barnes Purchased Assets in a transaction to be effected in Seller’s bankruptcy proceeding under Chapter 11 of title 11 of the United States Code, §§ 101 et seq. (the “Bankruptcy Code”) which commenced on July 27, 2020 in the United States Bankruptcy Court for the Northern District of Alabama (the “Bankruptcy Court”). Pursuant to the Barnes Asset Purchase Agreement, the purchase price to be paid for the Barnes Purchased Assets is $30,500 (the “Barnes Purchase Price”). On October 2, 2020, Sierra completed the acquisition of the Barnes Purchased Assets. The acquisition was accounted for as a business combination. The Company believes the acquisition of Barnes is expected to provide the Company with a greater combined global revenue base, increased gross margins, profitability and free cash flows, and access to increased liquidity to further acquire and grow businesses. The following table is a reconciliation to the fair value of the purchase consideration and how the purchase consideration is allocated to assets acquired and liabilities assumed which have been estimated at their fair values. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill is included in the Sierra segment.
| Barnes
| Estimated Fair Value
Total Purchase Consideration | $ | 30,500
Assets Acquired and Liabilities Assumed |  |
Assets |  |
Cash | $ | 2
Inventories |  | 4,535
Prepaid and other current assets |  | 612
Property and equipment |  | 4,036
Other intangible assets |  | 7,500
Indefinite-lived intangible assets |  | 5,600
Goodwill |  | 8,625
Other long-term assets |  | 4,355
Total Assets |  | 35,265
Liabilities |  |
Accounts payable and accrued liabilities |  | 842
Other long-term liabilities |  | 3,923
Total Liabilities |  | 4,765
Net Book Value Acquired | $ | 30,500
The estimated fair value of inventory was recorded at expected sales price less cost to sell plus a reasonable profit margin for selling efforts. In connection with the acquisition, the Company acquired exclusive rights to Barnes’ trademarks, customer relationships, and product technologies. The amounts assigned to each class of intangible asset, other than goodwill acquired, and the related average useful lives are as follows:
|  |  |  | Average
| Gross |  | Useful Life
Intangibles subject to amortization |  |  |  |  |
Customer relationships | $ | 5,700 |  |  | 10.0 years
Product technologies |  | 1,800 |  |  | 10.0 years
Intangibles not subject to amortization |  |  |  |  |
Trademarks |  | 5,600 |  |  | N/A
| $ | 13,100 |  |  | 10.0 years
The goodwill consists largely of the synergies expected from combining operations. The acquisition of Barnes is treated as a purchase of assets for tax purposes. As such, the basis in the assets of Barnes is equal for both book and tax, which results in no initial recognition of deferred tax assets or liabilities. Furthermore, the full amount of goodwill recorded of $8,625 is expected to be deductible for tax purposes. No pre-existing relationships existed between the Company and the Sellers prior to the acquisition. Barnes revenue and operating income were included in the Sierra segment. The following unaudited pro forma results are based on the individual historical results of the Company and Barnes, with adjustments to give effect as if the acquisition and borrowings used to finance the acquisition had occurred on January 1, 2019, after giving effect to certain adjustments including the amortization of intangible assets, depreciation of fixed assets, interest expense and taxes and assumes the purchase price was allocated to the assets purchased and liabilities assumed based on their fair market values at the date of purchase.
| Three Months Ended |  | Six Months Ended
| June 30, 2020 |  | June 30, 2020
Sales | $ | 36,060 |  | $ | 94,024
Net loss | $ | (1,869) |  | $ | (1,515)
Net loss per share - basic | $ | (0.06) |  | $ | (0.05)
Net loss per share - diluted | $ | (0.06) |  | $ | (0.05)
The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have occurred had the transaction been consummated as of January 1, 2019. Furthermore, such pro forma information is not necessarily indicative of future operating results of the combined companies and should not be construed as representative of the operating results of the combined companies for any future dates or periods.

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: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

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