3.ACQUISITIONS

On January 30, 2015, we acquired the wholesale business and production assets of Landshire, Inc. (“Landshire”), a manufacturer and marketer of sandwich products, and on April 24, 2015, we acquired the business and production assets of Better Bakery, LLC (“Better Bakery”), a producer of high quality, premium stuffed sandwiches and other licensed products. The acquisitions bring a new set of premium products to our portfolio that complement and increase our existing product offerings, and also provide us with additional capacity for increased sandwich and bakery production. The seller of Landshire entered into an agreement with us for an ongoing supply of product whereby the seller can earn additional acquisition consideration upon meeting certain volume thresholds.

The consideration for the acquisition of Better Bakery was satisfied with cash. The consideration for the acquisition of Landshire was satisfied with cash and earn out payments to be paid over a period of three years based on volume performance. We expect to make all additional consideration payments included in the acquisition agreement and therefore, have valued the liability as the net present value of the payment stream. The following provides a summary of the purchase consideration for each acquisition:

			Better
	Landshire		Bakery
Cash	$	41,552	$	30,931
Other accrued liabilities	19,293		—

Purchase price	$	60,845	$	30,931

In connection with these acquisitions, we performed valuations of the acquired assets and assumed liabilities. Intangible assets identified in the valuation included customer relationships, trade name and trademarks, and non-competition agreements. Certain fair values were derived using Level 3 inputs, as defined by the FASB’s Accounting Standard Codification (“ASC”) 820, “Fair Value Measurements” including the use of pricing models, discounted cash flow methodologies, and similar techniques. The fair value of certain instruments required significant management judgment and/or estimations. Unobservable inputs were developed based on the best information available, which in some instances included our own data.

The acquisitions were recorded in accordance with ASC 805, “Business Combinations”. The net purchase prices were allocated to assets acquired and liabilities assumed based on estimated fair values as of the date of the acquisitions and were as follows:

	Landshire			Better Bakery
Current assets	$	4,763		$	5,704
Property, plant and equipment	12,037			2,115
Other intangibles:
Customer relationships (15-year estimated useful life)	20,800			10,400
Landmark trade names and trademarks (19-year weighted average lives)	8,600			—
Better Bakery trade names and trademarks (17-year weighted average lives)	—			9,600
Non-compete agreements (useful lives of 3 and 4 years respectively)	700			400
Goodwill	14,506			9,940
Assumed liabilities	(561		)	(7,228		)

Net assets acquired	$	60,845		$	30,931

The assumed liability for Better Bakery of $7,228, that is included in the table above, relates primarily to an onerous broker contract, the amount of which was determined by reference to prevailing market brokerage rates applicable to our business along with projected future sales under the contract. The goodwill arising from the acquisitions is deductible for tax purposes and consists largely of the synergies and economies of scale expected from combining and integrating the acquired businesses into our business, as well as the assembled workforce. Other expense, net for 2nd Quarter 2015 and the fiscal year to date period ended July 4, 2015 include $59 and $420, respectively of acquisition-related legal and professional fees for Landshire. For Better Bakery, such amounts were $44 and $250, respectively.

Presented below are pro forma results for 2nd Quarter 2015 and the year to date period ended July 4, 2015 as if the acquisitions had occurred prior to January 4, 2015:

	Fiscal Quarter		Year to date
	Ended July 4, 2015
Net sales	$	393,189	$	826,116
Net income	$	3,052	$	17,092
Earnings per share - basic	$	0.04	$	0.21
Earnings per share - diluted	$	0.04	$	0.21

For both 2nd Quarter 2015 and the year to date period ended July 4, 2015, our consolidated net sales and net income includes $2,297 and $293, respectively, for Better Bakery from the acquisition date of April 24, 2015 to July 4, 2015. For the year to date period ended July 4, 2015, our consolidated net sales and net income includes $18,799 and $3,503, respectively, for Landshire from the acquisition date of January 30, 2015 to July 4, 2015.