XML 44 R33.htm IDEA: XBRL DOCUMENT v3.8.0.1
Business Combinations (Tables)
9 Months Ended
Sep. 30, 2017
Business Combinations [Abstract]  
Schedule of Business Combinations

As part of our ongoing strategy to increase market share in certain markets, we completed seven business combinations during the nine months ended September 30, 2017 and six business combinations during the nine months ended September 30, 2016 in which we acquired 100% of the voting equity interests in each. The largest of these acquisitions were Alpha, Columbia Shelving & Mirror Inc. and Charleston Shelving & Mirror, Inc. (collectively, “Columbia”) and All In Insulation, LLC d/b/a Astro Insulation (collectively, “Astro”). The remaining acquisitions were individually insignificant but material in the aggregate, as follows (in thousands):

 

                                 Fair Value      Total      Three months ended
September 30, 2017
    Nine months ended
September 30, 2017
 

2017 Acquisitions

   Date      Acquisition
Type
     Cash Paid      Seller
Obligations
     of Common
Stock Issued
     Purchase
Price
     Revenue      Net (Loss)
Income
    Revenue      Net Income
(Loss)
 

Alpha(1)

     1/5/2017        Share      $ 103,810      $ 2,002      $ 10,859      $ 116,671      $ 29,334      $ (271   $ 87,830      $ 190  

Columbia

     6/26/2017        Asset        8,768        225        —          8,993        3,026        73       3,241        80  

Astro

     9/18/2017        Asset        8,851        490        —          9,341        264        46       264        46  

Other

     Various        Asset        9,812        1,042        —          10,854        6,499        84       11,671        366  
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

         $ 131,241      $ 3,759      $ 10,859      $ 145,859      $ 39,123      $ (68   $ 103,006      $ 682  
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

(1) The cash paid included $21.7 million in contingent consideration to satisfy purchase price adjustments related to cash and net working capital requirements, earnout consideration based on Alpha’s change in EBITDA from 2015 and a customary holdback. We issued 282,577 shares of our common stock with a fair value of $10.9 million.

 

       Three months ended
September 30, 2016
    Nine months ended
September 30, 2016
 

2016 Acquisitions

   Date      Acquisition
Type
     Cash Paid      Seller
Obligations
     Total
Purchase
Price
     Revenue      Net Income
(Loss)
    Revenue      Net Income
(Loss)
 

Alpine Insulation Co., Inc.

     4/12/2016        Asset      $ 21,151      $ 1,560      $ 22,711      $ 7,957      $ 806     $ 14,734      $ 1,238  

Other

     Various        Asset        15,276        1,289        16,565        5,519        (200     12,283        (664
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

         $ 36,427      $ 2,849      $ 39,276      $ 13,476      $ 606     $ 27,017      $ 574  
        

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

Summary of Estimated Fair Value of Assets Acquired and Liabilities Assumed

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions, as well as total purchase prices and cash paid, approximated the following as of September 30, 2017 and 2016 and may be adjusted during the valuation period since acquisition (in thousands):

 

     2017     2016  
     Alpha     Columbia     Astro     Other     Total     Alpine     Other     Total  

Estimated fair values:

                

Cash

   $ 247     $ —       $ —       $ —       $ 247     $ —       $ —       $ —    

Accounts receivable

     30,361       990       924       2,137       34,412       3,959       2,080       6,039  

Inventories

     1,851       704       296       1,014       3,865       700       888       1,588  

Other current assets

     4,827       8       36       8       4,879       —         12       12  

Property and equipment

     1,528       659       640       1,144       3,971       656       1,188       1,844  

Intangibles

     57,100       4,760       4,966       5,939       72,765       12,800       8,492       21,292  

Goodwill

     38,679       2,211       2,808       2,361       46,059       6,642       5,270       11,912  

Other non-current assets

     150       31       —         191       372       —         94       94  

Accounts payable and other current liabilities

     (18,072     (370     (329     (1,940     (20,711     (2,046     (1,459     (3,505
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fair value of assets acquired and purchase price

     116,671       8,993       9,341       10,854       145,859       22,711       16,565       39,276  

Less fair value of common stock issued

     10,859       —         —         —         10,859       —         —         —    

Less seller obligations

     2,002       225       490       1,042       3,759       1,560       1,289       2,849  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash paid

   $ 103,810     $ 8,768     $ 8,851     $ 9,812     $ 131,241     $ 21,151     $ 15,276     $ 36,427  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Estimates of Acquired Intangible Assets

Estimates of acquired intangible assets related to the acquisitions are as follows for the nine months ended September 30 (dollars in thousands):

 

     2017      2016  

Acquired intangibles assets

   Estimated
Fair Value
     Weighted
Average
Estimated
Useful
Life (yrs.)
     Estimated
Fair Value
     Weighted
Average
Estimated
Useful
Life (yrs.)
 

Customer relationships

   $ 37,533        8      $ 12,862        9  

Trademarks and trade names

     19,403        15        6,116        15  

Non-competition agreements

     2,429        5        2,315        5  

Backlog

     13,400        1.5        —          —    
Pro Forma Results of Operations

The unaudited pro forma information for the combined results of the Company has been prepared as if the 2017 acquisitions had taken place on January 1, 2016 and the 2016 acquisitions had taken place on January 1, 2015. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transactions actually taken place on January 1, 2016 and 2015, respectively, and the unaudited pro forma information does not purport to be indicative of future financial operating results. See Note 12, Business Combinations, to our audited financial statements in Item 8 of Part II of our 2016 Form 10-K for additional information on 2016 acquisitions included in the table below (in thousands, except per share data):

 

     Pro forma for the three months
ended September 30,
     Pro forma for the nine months
ended September 30,
 
     2017      2016      2017      2016  

Net revenue

   $ 297,820      $ 272,010      $ 853,897      $ 771,313  

Net income

     11,836        12,328        31,544        32,117  

Basic net income per share

     0.37        0.39        1.00        1.02  

Diluted net income per share

     0.37        0.39        0.99        1.02