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Business Combination
 9 Months Ended
Sep. 30, 2016
Business Combinations [Abstract]  
Business Combination

Note 8 – Business Combination

 

On February 1, 2016, the Company acquired the assets of Vogel Capital, Inc., d/b/a Diamond Machining Technology (DMT) for $6.97 million in cash. DMT products are leaders in sharpening tools for knives, scissors, chisels, and other cutting tools. The DMT products use finely dispersed diamonds on the surfaces of sharpeners. The acquired assets include over 50 patents and trademarks.

 

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

 

Assets:     
Accounts Receivable  $1,145 
Inventory   280 
Equipment   262 
Prepaid expenses   176 
Intangible Assets   5,481 
Total assets  $7,344 

 

Liabilities     
Accounts Payable  $192 
Accrued Expense   181 
Total liabilities  $373 

 

Management’s assessment of the valuation of intangible assets is preliminary and finalization of the Company’s purchase price 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”.

 

Net sales for the three months ended September 30, 2016 attributable to DMT products were approximately $1.3 million. Net income for the three months ended September 30, 2016 attributable to DMT products was approximately $200,000.

 

Net sales for the nine months ended September 30, 2016 attributable to DMT products were approximately $3.6 million. Net income for the nine months ended September 30, 2016 attributable to DMT products was approximately $500,000.

 

Assuming DMT was acquired on January 1, 2016, unaudited proforma combined net sales for the nine months ended September 30, 2016 for the Company would have been approximately $98.8 million. Unaudited proforma combined net income for the nine months ended September 30, 2016 for the Company would have been approximately $5.4 million.