Business Combination

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Business Combination

Note 8 – Business Combination

On June 2, 2014, the Company purchased certain assets of First Aid Only, Inc. (“First Aid Only”), a supplier of Smart Compliance® first aid kits, refills, and safety products that meet regulatory requirements for a broad range of industries. First Aid Only pioneered consultative selling and support of first aid items to large corporate customers, and is recognized as an innovative leader in the safety products industry. The Company purchased inventory, accounts receivable, equipment, patents, trademarks and other intellectual property for approximately $13.8 million using funds borrowed under its revolving credit facility with HSBC. The Company recorded approximately $1.7 million for inventory, $2.5 million for accounts receivables and $0.6 million for equipment and other assets, as well as approximately $10.3 million for intangible assets expected to consist primarily of trade names, customer list and goodwill. Management’s assessment of the valuation of intangible assets is preliminary and finalization of the Company’s purchase accounting assessment may result in changes to the valuation of the identified intangible assets. The Company will finalize the purchase price allocation as soon as practicable within the measurement period in accordance with Accounting Standards Codification Topic 805 “Business Combinations”. In addition, the Company assumed approximately $1.2 million in accounts payables and accrued expenses. During the three and six months ended June 30, 2014, the Company incurred approximately $80,000 of integration and transaction costs associated with the acquisition.

The purchase price was allocated to assets acquired and liabilities assumed as follows (in thousands):

Assets:
Accounts Receivable	$	2,544
Inventory		1,704
Equipment		463
Prepaid expenses		110
Intangible Assets		10,250
Total assets	$	15,071
Liabilities
Accounts Payable	$	1,019
Accrued Expense		252
Total liabilities	$	1,271

Net sales for the three and six months ended June 30, 2014 attributable to First Aid Only were approximately $1.8 million. Net income for the three and six months ended June 30, 2014 attributable to First Aid Only was not material to the Company’s financial statements for those periods.

Assuming First Aid Only was acquired on January 1, 2014, unaudited proforma combined net sales for the three and six months ended June 30, 2014 for the Company would have been approximately $36.7 million and $59.6 million, respectively. Unaudited proforma combined net income for the three and six months ended June 30, 2014 for the Company would have been approximately $2.7 million and $3.1 million, respectively.

Assuming First Aid Only was acquired on January 1, 2013, unaudited proforma combined net sales for the three and six months ended June 30, 2013, for the Company would have been approximately $32.8 million and $54.0 million, respectively. Unaudited proforma combined net income for the three and six months ended June 30, 2013 for the Company would have been approximately $2.4 million and $2.7 million, respectively.