ACQUISITION

6 Months Ended

Jun. 30, 2019

NOTE C —ACQUISITION

On December 22, 2017, the Company entered into an agreement providing for the acquisition of Filament by the Company. The acquisition was completed on March 2, 2018. The aggregate consideration for Filament, after taking into account certain adjustments, was $294.4 million, consisting of $217.5 million of cash consideration and 5,593,116 newly issued shares of the Company’s common stock, with a value equal to $76.9 million based on the market value of the Company’s common stock as of March 2, 2018.

The purchase price was allocated based on the Company’s final estimate of the fair value of the assets acquired and liabilities assumed, as follows (in thousands):


Accounts receivable	$	26,224
Inventory		29,044
Other assets		5,620
Other liabilities		(23,018	)
Deferred income tax		(13,881	)
Goodwill and other intangibles		270,427

Total allocated value	$	294,416

Goodwill results from such factors as an assembled workforce. The total amount of goodwill is not expected to be deductible for tax purposes. The goodwill and other intangible assets are primarily included in the U.S. segment. Customer relationships are amortized on a straight-line basis over their estimated useful lives (see Note F – Intangible Assets).

The three and six months ended June 30, 2018 included the operations of Filament for the period from March 2, 2018, the date of acquisition, to June 30, 2018. The condensed consolidated statements of operations for the three months ended June 30, 2018 include $29.3 million of net sales and $0.4 million of net loss from operations contributed by Filament. The condensed consolidated statements of operations for the six months ended June 30, 2018, include $38.6 million of net sales and $1.5 million of net loss from operations contributed by Filament.

Unaudited Pro forma Results

The following table presents the Company’s pro forma consolidated net sales, loss before income taxes and equity in earnings and net loss for the three and six months ended June 30, 2018. The unaudited pro forma results include the historical statements of operations information of the Company and of Filament, giving effect to the Filament acquisition and related financing as if they had occurred at the beginning of the periods presented.


	Three Months Ended			Six Months Ended
	June 30, 2018			June 30, 2018
	(in thousands, except per share data)
Net sales	$	148,651		$	292,631
Loss before income taxes and equity in earnings		(6,694	)		(22,904	)
Net loss		(5,092	)		(17,235	)
Basic and diluted loss per common share		(0.25	)		(0.85	)

The unaudited pro forma results do not include any revenue or cost reductions that may be achieved through the business combination or the impact of non-recurring items directly related to the business combination.

The unaudited pro forma results are not necessarily indicative of the operating results that would have occurred if the Filament acquisition had been completed as of the date for which the pro forma financial information is presented. In addition, the unaudited pro forma results do not purport to project the future condensed consolidated operating results of the combined company.