Business Combination

9 Months Ended

Sep. 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. 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 which consist of trade names, customer relationships, covenant not-to-compete and goodwill. In addition, the Company assumed approximately $1.3 million in accounts payables and accrued expenses. During the three and nine months ended September 30, 2014, the Company incurred approximately $20,000 and $100,000, respectively, 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
Customer Relationships		5,430
Trade Name		3,410
Covenant Not-to-Compete		70
Goodwill		1,340
Total assets	$	15,071

Liabilities
Accounts Payable	$	1,019
Accrued Expense		252
Total liabilities	$	1,271

Net sales for the three and nine months ended September 30, 2014 attributable to First Aid Only were approximately $4.4 million and $6.2 million, respectively. Net income for the three and nine months ended September 30, 2014 attributable to First Aid Only was not material to the Company’s financial statements for the period.

Assuming First Aid Only was acquired on January 1, 2014, unaudited proforma combined net sales for the nine months ended September 30, 2014 for the Company would have been approximately $89.6 million. Unaudited proforma combined net income for the nine months ended September 30, 2014 for the Company would have been approximately $4.3 million.

Assuming First Aid Only was acquired on January 1, 2013, unaudited proforma combined net sales for the three and nine months ended September 30, 2013, for the Company would have been approximately $27.2 million and $81.2 million, respectively. Unaudited proforma combined net income for the three and nine months ended September 30, 2013 for the Company would have been approximately $1.3 million and $4.1 million, respectively.