Business Combination, Goodwill and Other Intangible Assets (Tables)

9 Months Ended

May 27, 2017

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The preliminary allocation of the purchase price to assets acquired and liabilities assumed is as follows:



(in thousands)	November 8, 2016
Cash	$	1,748
Accounts receivable	32,834
Inventories	15,300
Prepaid expenses and other assets	2,593
Property, plant and equipment	8,998
Goodwill	244,164
Other intangible assets	253,100
Total assets acquired	558,737

Accounts payable	11,163
Accrued compensation	3,615
Product warranties	12,904
Promotional	3,976
Other	1,569
Deferred tax liabilities	5,002
Total liabilities assumed	38,229

Total purchase price	$	520,508

We acquired 100% of the ownership interests of Grand Design on November 8, 2016 in accordance with the Securities Purchase Agreement for an aggregate purchase price of $520.5 million, which was paid in cash and Winnebago shares as follows:



(In thousands, except shares)	November 8, 2016
Cash	$	396,442
Winnebago shares: 4,586,555 at $27.05 per share	124,066
Total	$	520,508

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The allocation of the purchase price to the net assets acquired and liabilities assumed resulted in the recognition of intangible assets with fair value on the closing date of November 8, 2016 and amortization accumulated from the closing date through May 27, 2017 as follows:



(in thousands)	Weighted Average Life- Years	Fair Value Amount			Accumulated Amortization
Trade name	Indefinite	$	148,000		$	—
Dealer network	12.0	80,500			3,676
Backlog	0.5	18,000			18,000
Non-compete agreements	4.0	4,600			767
Leasehold interest-favorable	8.1	2,000			135
Total		253,100			$	22,578
Accumulated amortization		(22,578		)
Net book value of intangible assets		$	230,522

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Remaining estimated aggregate annual amortization expense by fiscal year is as follows:



(in thousands)	Amount
Remainder of 2017	$	2,082
2018	7,854
2019	7,733
2020	7,733
2021	7,733
2022	7,106
Thereafter	42,281

Business Acquisition, Pro Forma Information [Table Text Block]

Unaudited pro forma information is as follows:



	Three Months Ended				Nine Months Ended
(In thousands, except per share data)	May 27, 2017		May 28, 2016		May 27, 2017		May 28, 2016
Net revenues	$	476,364	$	402,511	$	1,187,849	$	1,022,249
Net income	24,856		21,064		66,009		29,221
Income per share - basic	0.79		0.67		2.09		0.93
Income per share - diluted	0.78		0.67		2.08		0.92

The unaudited pro forma data above includes the following significant non-recurring adjustments made to account for certain costs which would have changed if the acquisition of Grand Design had been completed on August 30, 2015:



	Three Months Ended					Nine Months Ended
(In thousands)	May 27, 2017			May 28, 2016		May 27, 2017			May 28, 2016
Amortization of intangibles (1 year or less useful life)	$	(8,225	)	$	1,579	$	(18,601	)	$	18,722
Increase in amortization of intangibles	—			1,933		1,551			5,799
Expenses related to business combination (transaction costs) ⁽¹⁾	(450		)	450		(6,432		)	6,753
Interest to reflect new debt structure	—			4,884		3,672			14,779
Taxes related to the adjustments to the pro forma data and to the income of Grand Design	3,210			3,892		11,513			(1,838		)

⁽¹⁾ Pro forma transaction costs include $0.1 million incurred by Grand Design prior to acquisition.

The following table provides net revenues and operating income (which includes amortization expense) from the Grand Design business included in our consolidated results during the nine months ended May 27, 2017 following the November 8, 2016 closing date:



	Nine Months Ended
(in thousands)	May 27, 2017
Net revenues	$	366,309
Operating income	27,083