4. Acquisitions

On October 3, 2014, the Company acquired the assets of Hoosier Data Forms for $0.2 million in cash plus the assumption of certain trade payables. Management considers this acquisition immaterial and has omitted further discussion.

On June 16, 2014, the Company acquired the assets of Sovereign Business Forms, and its related entities, TRI-C Business Forms, Inc., Falcon Business Forms, Inc., Forms Manufacturers, Inc., Mutual Graphics, Inc., and Curtis Business Forms, Inc. (the “businesses”) for $10.6 million in cash plus the assumption of certain trade liabilities. In addition, if certain financial metrics are met, up to an additional $1.0 million is available to be earned over the next 4 years under an earn-out provision. The cash portion of the purchase price was funded by borrowing under the Company’s line of credit facility. The businesses, which generated approximately $27.1 million in sales during the 2013 calendar year, will continue to operate under their respective brand names. For the three and nine months ended November 30, 2014, the businesses added $6.7 million and $13.0, respectively, in sales and added $0.9 million and $2.0, respectively, in earnings (pre-tax). The acquisition expanded the geographic locations of producing business forms for the Company.

The preliminary allocation of the purchase price was based upon a preliminary valuation and our estimates and assumptions are subject to change within the purchase price allocation period (generally one year from the acquisition date). The primary areas of the purchase price allocation that are not yet finalized relate to the valuation on intangible assets acquired and an earn-out agreement with a former owner. The following is a summary of the preliminary purchase price allocations for Sovereign Business Forms (in thousands):


Accounts receivable	$	2,477
Inventories		1,305
Other assets		653
Property, plant & equipment		3,300
Customer lists		1,550
Trade names		1,403
Goodwill		945
Accounts payable		(1,000	)

	$	10,633

On September 27, 2013, the Company acquired the assets of the Custom Envelope Division (“CED”), part of the Custom Resale Group of Cenveo, Inc., for $47.25 million in cash plus the assumption of certain trade liabilities. The cash portion of the purchase price was funded by borrowing under the Company’s line of credit facility. The CED assets are comprised of the Wisco^® (“Wisco”) brand, which is produced at an owned facility in Tullahoma, TN, and the National Imprint Corporation^® (“National Imprint^®”, “NIC”) brand, which is produced in a leased facility in Claysburg, PA. Wisco produces and folds various types of envelopes, and NIC is an imprinter of envelopes. Both of these products are sold through print distributors and will continue to be operated under the Wisco and NIC brand names at their respective locations. Wisco and NIC had sales in excess of $40 million for the twelve month period ended December 31, 2012. For the three and nine months ended November 30, 2014, the businesses added $10.2 million and $29.8 million, respectively, in sales and added $1.7 million and $4.7 million, respectively, in earnings (pre-tax). The acquisition expanded and strengthened the envelope product line for the Company.

The following is a summary of the purchase price allocations for Wisco and NIC (in thousands):


Accounts receivable	$	3,331
Inventories		2,391
Other assets		581
Property, plant & equipment		4,889
Customer lists		26,400
Trade names		3,600
Goodwill		9,462
Accounts payable and accrued liabilities		(3,404	)

	$	47,250

On September 30, 2013, the Company acquired the assets of the businesses operating under the trade name of Folder Express^® from Wright Printing Company for $14.6 million in cash plus the assumption of certain trade payables. The cash portion of the purchase price was funded by borrowing under the Company’s line of credit facility. The businesses produce folders and specialty folders for music stores and public schools. The businesses had combined sales of approximately $20 million during the twelve month period ended December 31, 2012 and will continue to

operate under the Folder Express and related brand names. For the three and nine months ended November 30, 2014, the businesses added $4.1 million and $13.3 million, respectively, in sales and added $0.3 million and $1.3 million, respectively, in earnings (pre-tax). The acquisition expands the Company’s geographic presence in folder products.

The following is a summary of the purchase price allocations for Folder Express (in thousands):


Accounts receivable	$	1,171
Inventories		2,102
Other assets		196
Property, plant & equipment		1,617
Customer lists		5,920
Trade name		1,520
Goodwill		2,574
Accounts payable and accrued liabilities		(493	)

	$	14,607

The results of operations for Wisco, NIC, Folder Express and Sovereign Business Forms are included in the Company’s consolidated financial statements from the dates of acquisition. The following table represents certain operating information on a pro forma basis as though all operations had been acquired as of March 1, 2012, after the estimated impact of adjustments such as amortization of intangible assets, interest expense, interest income, and related tax effects (in thousands, except per share amounts):


	Three months ended					Nine months ended
	November 30,					November 30,
	2014			2013		2014			2013
Pro forma net sales	$	146,971		$	148,541	$	447,341		$	467,111
Pro forma net earnings (loss)		(71,179	)		10,072		(53,000	)		31,414
Pro forma earnings (loss) per share - diluted		(2.76	)		0.39		(2.04	)		1.20

The pro forma results are not necessarily indicative of what would have occurred if the acquisitions had been in effect for the periods presented.