Note 3 - Business Combination

6 Months Ended

Apr. 02, 2016

Notes to Financial Statements

Business Combination Disclosure [Text Block]

(3) Business Combination

On August 15, 2014, the Company purchased substantially all of the assets associated with the PC strand business of ASW for a final adjusted purchase price of $33.5 million, net of post-closing adjustments of $480,000 (the “ASW Acquisition”).

ASW manufactured PC strand at facilities located in Houston, Texas and Newnan, Georgia. The Company acquired, among other assets, the accounts receivable and inventories related to ASW’s PC strand business, the production equipment at its facility in Houston and its production equipment and facility in Newnan. Pursuant to an agreement with ASW, the Company is leasing the Houston facility from ASW with an option to purchase it in the future. In addition, the Company assumed certain of ASW’s accounts payable and accrued liabilities related to its PC strand business.

Following is a summary of the Company’s final allocation of the adjusted purchase price to the fair values of the assets acquired and liabilities assumed as of the date of the ASW Acquisition:

(In thousands)
Assets acquired:
Accounts receivable	$	7,854
Inventories		6,292
Other current assets		786
Property, plant and equipment		8,638
Intangibles		8,530
Total assets acquired	$	32,100
Liabilities assumed:
Accounts payable	$	3,240
Accrued expenses		2,362
Total liabilities assumed		5,602
Net assets acquired		26,498
Purchase price		33,463
Goodwill	$	6,965

In connection with the ASW Acquisition, the Company acquired intangible assets consisting of customer relationships, developed technology and know-how, and a non-competition agreement. The ASW Acquisition was accounted for as a business purchase pursuant to ASC Topic 805,

Business Combinations

. Acquisition and integration costs are not included as components of consideration transferred, but are recorded as expenses in the period in which such costs are incurred.

Restructuring charges.

Subsequent to the ASW Acquisition, in fiscal 2014, the Company incurred employee separation costs for staffing reductions associated with the acquisition. In February 2015, the Company elected to consolidate its PC strand operations with the March 2015 closure of the Newnan, Georgia facility that had been acquired through the ASW Acquisition.

Following is a summary of the restructuring activities and associated costs that were incurred during the three- and six-month periods ended April 2, 2016 and March 28, 2015:

(In thousands)	Equipment Relocation Costs			Severance and Other Employee Separation Costs			Facility Closure Costs			Gain on Sale of Equipment			Asset Impairment Charges			Total
2016
Liability as of October 3, 2015	$	-		$	735		$	-		$	-		$	-		$	735
Restructuring charges (recoveries)		75			-			30			(180	)		-			(75	)
Cash receipts (payments)		(75	)		(72	)		(30	)		180			-			3
Liability as of January 2, 2016		-			663			-			-			-			663
Restructuring charges		21			-			59			-			20			100
Cash payments		(21	)		(59	)		(39	)		-			-			(119	)
Non-cash charges		-			-			-			-			(20	)		(20	)
Liability as of April 2, 2016	$	-		$	604		$	20		$	-		$	-		$	624
2015
Liability as of September 27, 2014	$	-		$	1,208		$	-		$	-		$	-		$	1,208
Cash payments		-			(53	)		-			-			-			(53	)
Liability as of December 27, 2014		-			1,155			-			-			-			1,155
Restructuring charges		-			75			21			-			237			333
Cash payments		-			(58	)		(4	)		-			-			(62	)
Non-cash charges		-			-			-			-			(237	)		(237	)
Liability as of March 28, 2015	$	-		$	1,172		$	17		$	-		$	-		$	1,189

The Company recorded restructuring liabilities of $0.6 million on its consolidated balance sheet as of April 2, 2016, including $0.5 million in accrued expenses and $0.1 million in other liabilities. As of October 3, 2015 the Company recorded restructuring liabilities of $0.7 million on its consolidated balance sheet, including $0.5 million in accrued expenses and $0.2 million in other liabilities.

The Company does not currently expect to incur any significant restructuring charges during the remainder of fiscal 2016.