BUSINESS ACQUISITIONS

12 Months Ended

Dec. 31, 2015

BUSINESS ACQUISITIONS [Abstract]

BUSINESS ACQUISITIONS

Note 13. BUSINESS ACQUISITIONS

On February 19, 2014, the Company acquired all of the equity interests of Fort Wayne Holdings, Inc. (“FTW”), the parent company of Fort Wayne Plastics, Inc. (“FWP”), a leading manufacturer of medium- to large- sized molded plastic components, specializing in low pressure, multi-nozzle structural plastic and gas assist solutions, for $11.0 million in cash, less $200,000 in subsequent working capital adjustments. The acquisition of FWP’s premiere manufacturing capabilities and dedication to customer service are highly complementary with the Company. The Company incurred $19,000 in costs related to the acquisition of FWP during the year ended December 31, 2014. These costs included fees for legal, valuation and other fees and are included in Selling, General and Administrative expenses in the Consolidated Statements of Operations.

The recognized amounts of identifiable assets acquired and liabilities assumed, based on their fair values as of February 19, 2014 are set forth below:

Current Assets	$	3,076
Long-term assets		4,349
Intangible assets		4,066
Goodwill		2,556
Total assets acquired		14,047
Deferred tax liabilities		(2,440	)
Other liabilities		(832	)
Total liabilities assumed		(3,272	)
Net assets acquired	$	10,775

Goodwill resulted primarily from expected operational synergies and the recognition of deferred tax liabilities in connection with the acquisition. None of the goodwill recognized is expected to be deductible for income tax purposes.

The accompanying consolidated statements of income for year ended December 31, 2014, do not include any revenues or expenses related to the acquisition prior to the closing date. The following unaudited pro forma consolidated financial information is presented as if the FTW acquisition had occurred at the beginning of the periods presented. In addition, this unaudited pro forma financial information is provided for illustrative purposes only and should not be relied upon as necessarily being indicative of the historical results that would have been obtained if the acquisition had actually occurred during those periods, or the results that may be obtained in the future as a result of the acquisition.

	2014
Net sales	$	101,186
Gross profit		15,171
Net income		2,538
Average common shares outstanding - Basic		7,951
Dilutive effect of convertible preferred stock		18,859
Average common shares outstanding - Diluted		26,810
Earnings per share common stock - Basic	$	0.32
Earnings per share common stock - Diluted	$	0.09

The amount of revenue and earnings of FWP included in our Consolidated Statements of Income subsequent to the Closing Date are as follows:

	February 20, 2014 - December 31, 2014
Net sales	$	13,966
Net income	$	1,843
Basic earnings per share	$	0.23
Diluted earnings per share	$	0.07

On April 7, 2015, CCP, a Delaware limited liability company and a wholly owned subsidiary the Company, completed the acquisition of substantially all of the  assets and business operations related to the plastics shelving and cabinet business of Centrex Plastics, LLC, an Ohio limited liability company (“Centrex”) and T.R. Plastics, LLC, an Ohio limited liability company (“TR Plastics”) for $23.9 million in cash at closing, plus certain post-closing earnout payments of not less than $2.0 million over three years, as described in the Asset Purchase Agreement dated April 7, 2015 (the “Purchase Agreement”) by and between CCP, Centrex, TR Plastics, and Terrence L. Reinhart, the majority member of Centrex and the sole member of TR Plastics. The acquisition of the Tiffin, Ohio manufacturing facility brings a breadth of shelving and storage cabinet solutions to the Katy consumer storage product line which we believe are highly complementary to our current products.

The Company recorded the tangible and intangible assets acquired and liabilities assumed at their estimated fair values as of the date of the acquisition as outlined in the table below (amounts in thousands):

Accounts receivable	$	757
Inventory		1,399
Property and equipment		2,317
Intangible assets		17,789
Goodwill		5,821
Total assets acquired		28,083
Accounts payable		2,162
Accrued expenses		66
Total liabilities assumed		2,228
Net assets acquired	$	25,855

Goodwill resulted from a combination of expected operational synergies and cross-selling opportunities. As the acquisition was an asset acquisition, the related goodwill recognized is deductible for income tax purposes.

The accompanying consolidated statements of income for the years ended December 31, 2015 and 2014 do not include any revenues or expenses related to the acquisition prior to the closing date. The following unaudited pro forma consolidated financial information is presented as if the Tiffin, Ohio acquisition had occurred at the beginning of the periods presented. In addition, this unaudited pro forma financial information is provided for illustrative purposes only and should not be relied upon as necessarily being indicative of the historical results that would have been obtained if the acquisition had actually occurred during those periods, or the results that may be obtained in the future as a result of the acquisition.

	2015			2014
Net Sales	$	120,686		$	126,559
Gross profit		17,369			18,730
Net (loss) income		(6,084	)		1,355
Average common shares outstanding - Basic		7,951			7,951
Dilutive effect of convertible preferred stock		-			18,859
Average common shares outstanding - Diluted		7,951			26,810
Earnings per share common stock - Basic	$	(0.77	)	$	0.17
Earnings per share common stock - Diluted	$	(0.77	)	$	0.05

The amount of revenue and earnings of Tiffin included in our Consolidated Statements of Income subsequent to the Closing Date are as follows:

	April 7, 2015 - December 31, 2015
Net sales	$	18,974
Net income	$	1,051
Earnings per share common stock - Basic	$	0.13
Earnings per share common stock - Diluted	$	0.13

The Company incurred $1.3 million in costs related to the April 7, 2015 acquisition during the year ended December 31, 2015. These costs were included within general and administrative expenses. At the time of the acquisition, the Company also entered into an agreement with Centrex which could result in an earnout payment based on sales of cabinets over the course of a two year time frame with a minimum earnout of $2.0 million and a maximum earnout of $3.0 million. As of December 31, 2015 the company has evaluated the agreement and related sales and has as recorded a liability in its accrued expenses of $0.4 million and $1.6 million in other noncurrent liabilities.