NOTE

–

ACQUISITION

February 21, 2017,

the Company acquired all the capital stock of Atlas Lighting Products, Inc. (Atlas), a Burlington North Carolina manufacturer of high-quality LED lighting products sold into the electrical distribution market. The purchase price of

$97.5

million included a cash payment of

$96.9

million and

200,000

five

year warrants valued at

$0.6

million. The Company funded the acquisition with a combination of cash on hand and

$66

million from a new

$100

million revolving line of credit (See Note

The Company has accounted for this transaction as a business combination. Under business combination accounting, the allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed as of

February 21, 2017

is as follows:

(amounts in thousands)	February 21, 2017 (Initially Reported)			Measurement Period Adjustments			February 21, 2017 (As Adjusted)
Cash and Cash Equivalents	$	1,815		$			$	1,815
Accounts Receivable		7,202						7,202
Inventories		8,490						8,490
Property, Plant, and Equipment		3,631			(85	)		3,546
Other Assets		248						248
Intangible Assets		34,319						34,319
Liabilities Assumed		(6,106	)		(77	)		(6,183	)
Identifiable net assets acquired		49,599			(162	)		49,437
Goodwill		47,868			162			48,030
Net Purchase Consideration	$	97,467		$	--		$	97,467

Goodwill recorded from the acquisition of Atlas is attributable to the impact of the positive cash flow from Atlas in addition to the expected synergies from the business combination. The goodwill resulting from the acquisition is deductible for tax purposes. The intangible assets include amounts recognized for the fair value of the trade name, customer relationships, and technology-related assets. The fair value of the intangible assets was determined based upon a combination of the market and income (discounted cash flow) approach. The following table present the details of the identified intangible assets acquired at the date of acquisition (in thousands):

	Estimated		Estimate Useful
	Fair Value		Life (Years)
Tradename	$	2,198	20
Technology asset		4,838	10
Customer relationship		27,283	15
Total	$	34,319

The fair market value write-up of the inventory totaled

$228,000,

and the fair market value write-up of the property, plant, and equipment totaled

$526,000.

Transaction costs related to the acquisition totaled

$1.48

million in fiscal

2017

and are recorded as an operating expense.

Atlas’s post-acquisition results of operations for the period from

February 21, 2017

through

June 30, 2017

are included in the Company’s Consolidated Statements of Operations. Since the acquisition date, net sales of Atlas for the period from

February 21, 2017

through

June 30, 2017

were

$17.8

million and operating income was

$1.8

million. The operating results of Atlas are included in the Lighting Segment.

Pro Forma Impact of the Acquisition of Atlas Lighting Products, Inc.

(unaudited)

The following table represents pro forma results of operations and gives effect to the acquisition of Atlas as if the transaction had occurred on

July 1, 2015.

The unaudited pro forma results of operations have been prepared for comparative purposes only and are

not

necessarily indicative of what would have occurred had the business combination been completed at the beginning of the period or the results that

may

occur in the future. Furthermore, the pro forma financial information does

not

reflect the impact of any synergies or operating efficiencies resulting from the acquisition of Atlas

(In thousands, unaudited)	Twelve Months Ended June 30
	2017		2016
Net Sales	$	366,541	$	381,650

Gross Profit	$	95,038	$	105,592

Operating Income	$	6,857	$	18,010

The unaudited pro forma financial information for the

twelve

months ended

June 30, 2017

and

June 30, 2016

is prepared using the acquisition method of accounting and has been adjusted to effect to the pro forma events that are: (

) directly attributable to the acquisition; (

) factually supportable; and (

) expected to have a continuing impact on the combined results. The pro forma operating income of

$6.9

million excludes acquisition-related expenses of

$1.61

million.