XML 48 R9.htm IDEA: XBRL DOCUMENT v2.4.0.8
BUSINESS COMBINATIONS - MATTRESS FABRIC SEGMENT
 12 Months Ended
Apr. 27, 2014
Business Combinations [Abstract]  
BUSINESS COMBINATIONS - MATTRESS FABRIC SEGMENT
2. BUSINESS COMBINATIONS – MATTRESS FABRIC SEGMENT

On May 8, 2013, we entered into an asset purchase and consulting agreement with Bodet & Horst GMBH & Co. KG and certain affiliates (“Bodet & Horst”) that provided for, among other things, the purchase of equipment and certain other assets from Bodet & Horst and the restructuring of prior consulting and non-compete agreements pursuant to an earlier asset purchase and consulting agreement with Bodet & Horst dated August 11, 2008. This agreement was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations. We agreed with Bodet & Horst to replace the prior non-compete agreement that prevented us from selling certain mattress fabrics and products to a leading manufacturer, which now allows us to make such sales. In addition, the prior consulting and non-compete agreement, under which Bodet & Horst agreed not to sell most mattress fabrics in North America, was replaced, expanded, and extended pursuant to the new asset purchase and consulting agreement.

The purchase price for the equipment and the other certain assets noted below was $2.6 million in cash.

Direct acquisition costs related to this business combination totaled $83,000.

The following table presents the allocation of the acquisition cost to the assets acquired based on their fair values:
(dollars in thousands)
Fair Value
Equipment (Note 13)
 $ 890
Non-compete agreement (Notes 7 and 13)
 882
Customer relationships (Notes 7 and 13)
 868
$ 2,640
 
The company recorded its non-compete at its fair value based on a discounted cash flow valuation model. The company recorded its customer relationships at its fair value based on a multi-period excess earnings valuation model. This non-compete agreement will be amortized on a straight line basis over the fifteen year life of the agreement. The customer relationships will be amortized on a straight line basis over their useful life of seventeen years. The equipment will be amortized on a straight line basis over its useful life of seven years.

The following unaudited pro forma consolidated results of operations for the years ending April 27, 2014 and April 28, 2013 have been prepared as if the acquisition of Bodet & Horst had occurred on April 30, 2012:
Years ended
(Unaudited)
(dollars in thousands)
April 27, 2014
April 28, 2013
Net Sales
 $ 287,162 $ 278,681
Income from operations
 20,249 21,048
Net income
 17,447 18,208
Net income per share, basic
 1.43 1.49
Net income per share, diluted
 1.41 1.46
 
The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time, nor is it intended to be a projection of future results.