Acquisition

9 Months Ended

Oct. 01, 2011

Acquisition [Abstract]

Acquisition

Note 2. Acquisition

On June 28, 2011, the Company completed the acquisition of all the outstanding stock of LaBarge, Inc. ("LaBarge"), a publicly-owned company based in St. Louis, Missouri for $325,315,000 (net of cash acquired and excluding acquisition costs). LaBarge is a provider of electronics manufacturing services to aerospace, defense and other diverse markets. LaBarge provides its customers with sophisticated electronic, electromechanical and mechanical products through contract design and manufacturing. The acquisition was funded from internally generated cash, senior unsecured notes and a senior secured term loan. The operating results for this acquisition have been included in the consolidated statements of operations since the date of acquisition. For the three months and nine months ended October 1, 2011, operating expenses included expenses related to the acquisition of LaBarge of $2,682,000 and $15,337,000, respectively, and interest expense included $0 and $831,000, respectively, of write-off of unamortized financing costs, as a result of the Company's debt refinancing related to the acquisition of LaBarge.

The following table presents unaudited pro forma consolidated operating results for the Company for the three months and nine months ended October 1, 2011 and October 2, 2010 as if the LaBarge acquisition had occurred as of January 1, 2010. The Company acquired certain assets of Foam Matrix for $400,000 during the first quarter of 2011. Pro forma results below exclude the acquisition of certain assets of Foam Matrix. Assuming the Form Matrix acquisition had occurred at January 1, 2010, it would not have been materially different from the Company's historical results.

	(In thousands,except per share data)
	Three Months Ended				Nine Months Ended
	October 1, 2011		October 2, 2010		October 1, 2011		October 2, 2010
Net sales	$	185,080	$	184,891	$	556,128	$	549,232
Net income/(loss)	$	961	$	4,747	$	325	$	(2,384	)
Basic earnings/(loss) per share	$	0.09	$	0.45	$	0.03	$	(0.23	)
Diluted earnings/(loss) per share	$	0.09	$	0.45	$	0.03	$	(0.23	)

The consolidated financial statements reflect preliminary estimates of the fair value of the assets acquired and liabilities assumed and the related allocation of the purchase price for LaBarge. The principal estimates of fair value have been determined using expected net present value techniques utilizing a 14% discount rate. Customer relationships are valued assuming an annual attrition rate of 6.5%. For acquisitions completed through October 1, 2011, adjustments to fair value assessments are recorded to goodwill over the purchase price allocation period (not exceeding twelve months). The acquisition of LaBarge was completed on June 28, 2011 and the Company is currently unable to determine if future adjustments, if any, to fair value assessments will have a material effect on the Company's consolidated financial position or results of operations.

The table below summarizes the preliminary purchase price allocation for LaBarge at the date of acquisition.

	(in thousands)
	October 1, 2011
Accounts receivable	$	44,232
Inventories		77,078
Prepaids		1,382
Deferred income taxes		5,821
Other current assets		4,640
Property, plant and equipment		36,794
Excess of cost over net assets acquired		115,224
Intangible-customer relationships		140,300
Intangible-trade name		32,937
Other assets		4,954
		463,362
Current portion of long-term debt		250
Accounts payable		33,073
Accrued liabilities		30,986
Other long-term liabilities		1,132
Deferred income tax liabilities		72,606
		138,047
Cash paid for acquisition	$	325,315