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ACQUISITIONS | 12 Months Ended
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Dec. 31, 2019
Business Combinations [Abstract] |
ACQUISITIONS | ACQUISITIONS Filament 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. In the first two months of 2019, the Company decreased goodwill by approximately $1.0 million due to certain opening balance sheet fair value adjustments, primarily related to deferred taxes. The purchase price, as adjusted, has been determined to be as follows (in thousands):
Cash | $ | 217,511 |
Share consideration | 76,905 |
Total purchase price | $ | 294,416 |
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 |
The acquisition is being accounted for as a business combination using the acquisition method of accounting in accordance with FASB ASC Topic 805, Business Combinations (“ASC Topic 805”), which established a new basis of accounting for all identifiable assets acquired and liabilities assumed at fair value. ASC Topic 805 allows the acquiring company to adjust preliminary amounts recognized at the acquisition date to their subsequently determined final fair values during a measurement period, generally up to one year from the date of the acquisition. The goodwill and other intangible assets are included in the U.S. segment. Customer relationships and certain trade names, which are included in intangible assets, net, are amortized on a straight-line basis over their estimated useful lives (see Note G– Goodwill and Intangible Assets). Goodwill results from such factors as an assembled workforce. The total amount of goodwill is not expected to be deductible for tax purposes. The year ended December 31, 2018 includes the operations of Filament for the period from March 2, 2018, the date of the acquisition of Filament, to December 31, 2018. The consolidated statement of operations for the year ended December 31, 2018, includes $128.8 million of net sales contributed by Filament. Included in Selling, general and administrative expenses for the year ended December 31, 2018 is a $1.8 million credit to reflect the change in fair value of a contingent consideration obligation acquired by the Company in connection with its acquisition of Filament. Unaudited Pro forma Results The following unaudited pro forma financial information presents the results of the Company as if the acquisition of Filament had occurred on January 1, 2017. 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.
|  | Year ended December 31, |  |  |  |  |
|  |  | 2018 |  | 2017 |  |
|  | (In thousands, except per share data) |  |  |  |  |
Net sales |  |  | $ | 730,353 |  |  | $ | 747,549 |  |  |
Income before income taxes and equity in earnings |  |  | 2,439 |  |  | 14,151 |  |  |
Net (loss) income |  |  | (267) |  |  | 5,794 |  |  |
Basic and diluted (loss) income per common share |  |  | $ | (0.01) |  |  | $ | 0.28 |  |  |
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 consolidated operating results of the combined company. Fitz and Floyd On August 31, 2017, the Company acquired the Fitz and Floyd business, including the trade names and related working capital, from Fitz and Floyd Enterprises, LLC (“Fitz”) for cash in the amount of $9.1 million. The purchase price was funded by borrowings under the Company’s revolving credit facility. The assets and operating results of the Fitz and Floyd business are reflected in the Company’s consolidated financial statements in accordance with ASC Topic 805 commencing from the date of the acquisition of Fitz. The consolidated statement of operations for the year ended December 31, 2017 includes $7.7 million of net sales attributable to the Fitz and Floyd brands. The purchase price was allocated based on the Company’s estimate of the fair values of the assets acquired and liabilities assumed, as follows (in thousands):
Accounts receivable |  | $ | 3,115 |
Inventory |  | 5,424 |
Other assets |  | 458 |
Other liabilities |  | (2,056) |
Goodwill and other intangibles |  | 2,131 |
Total allocated value |  |  | $ | 9,072 |
On the basis of estimated fair values, the excess of the purchase price over the net assets acquired of $2.1 million has been allocated as follows: $1.7 million for customer relationships and trade names and $0.4 million for goodwill. The goodwill recognized results from such factors as an assembled workforce and the value of other synergies expected from combining operations with the Company. All the goodwill and other intangibles are included in the U.S. segment. Customer relationships and trade names are amortized on a straight-line basis over their estimated useful lives (see Note G- Goodwill and Intangible Assets).

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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