ACQUISITIONS

During the nine months ended June 30, 2017, the Company made one acquisition of a business. On April 6, 2017, the Company acquired certain operating assets associated with the Zhou Nutrition brand from Branson Books, LLC for $19,730, of which $17,730 was paid in cash at the closing date with the remaining $2,000 to be paid in cash over a two-year period from the closing date. During the nine months ended June 30, 2016, the Company made two acquisitions of businesses. On October 6, 2015, the Company acquired certain operating assets of Dynamic Health Laboratories, Inc. ("Dynamic Health"). On February 18, 2016, the Company acquired certain operating assets of Aubrey Organics, Inc. ("Aubrey Organics"). The aggregate purchase price of these acquisitions was $26,235 in cash.

These acquisitions are in keeping with the Company's business strategy of consolidating the fragmented industry in which it competes. These acquisitions were accounted for using the acquisition method of accounting. Accordingly, the purchase price was assigned to the assets acquired based on their fair values at their respective dates of acquisition. The excess of purchase price over the fair values of the assets acquired was classified as goodwill. The goodwill relates to expected synergies from these acquisitions. The following reflects the preliminary allocation of the purchase price for the fiscal 2017 acquisition and the final allocation of the aggregate purchase prices for the fiscal 2016 acquisitions to the assets acquired:



	Fiscal 2017 Acquisition		Fiscal 2016 Acquisitions
Aggregate assets acquired:
Current assets	$	2,973	$	4,576
Property, plant and equipment	—		6,648
Goodwill	7,657		6,541
Intangible assets	9,100		8,470
	$	19,730	$	26,235

The fiscal 2017 and fiscal 2016 acquired intangible assets totaling $9,100 and $8,470, respectively, related to trademarks, tradenames, customer relationships and a non-compete agreement and are being amortized over periods of four to fifteen years for financial statement purposes. The fiscal 2017 and fiscal 2016 acquired intangible assets are expected to be deductible for tax purposes over fifteen years. Goodwill of $7,657 for fiscal 2017 and $6,541 for fiscal 2016 is not subject to amortization for financial statement purposes and is expected to be deductible for tax purposes over fifteen years.

The Condensed Consolidated Statements of Comprehensive Income and the Condensed Consolidated Statements of Cash Flows presented herein include the activities of these acquired businesses from their respective dates of acquisition. The expected long-term sales and expense synergies of acquired businesses generally are not realized immediately following acquisition, as certain transition and integration matters must be completed.

Since the date of acquisition (April 6, 2017), net sales of $7,306 and gross profit of $4,297 for Zhou Nutrition were included in the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended June 30, 2017. The Company tracks selling, general and administrative expenses on a consolidated basis, not on a brand-by-brand basis. As a result, the disclosure of any results after gross profit is impracticable. The following table provides unaudited pro forma information for the three and nine months ended June 30, 2017 and 2016, as if the acquisition of Zhou Nutrition had been completed on October 1, 2015. The information has been provided for illustrative purposes only and is not necessarily indicative of the actual results that would have been achieved by the Company for the periods presented or that will be achieved in the future. The pro forma information has been adjusted to give effect to items directly attributable to the Zhou Nutrition acquisition. These adjustments include cost of goods sold associated with the write up of inventory to fair value, commission expense associated with growth incentives, amortization expense associated with acquired intangible assets, interest expense associated with borrowings on the Company's revolving credit facility to fund the acquisition and any consequential tax effects.



	Three Months Ended June 30,				Nine Months Ended June 30,
	2017		2016		2017		2016
Net sales	$	65,420	$	62,673	$	194,169	$	180,985
Net income	2,733		4,850		12,143		13,561

This information has not been adjusted to reflect any changes in the operations of the business subsequent to acquisition. Changes in the operations of the acquired business may include, but are not limited to, discontinuation of certain products, integration of systems and personnel, changes in manufacturing processes and potential cost synergies. Due to these changes, future results could be materially different than the pro forma information provided.

Pro forma information was not provided for Dynamic Health for the three and nine months ended June 30, 2016 since the acquisition was completed near the beginning of these periods and the pro forma results are not materially different than actual results. Pro forma information related to the Aubrey Organics acquisition was not material.