Note 4 - Business Combination

12 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Business Combination Disclosure [Text Block]

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Business Combination

On August 15, 2014, we 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. We acquired, among other assets, the accounts receivable and inventories related to ASW’s PC strand business, the production equipment at its facilities in Houston and Newnan, and its facility in Newnan. We also entered into an agreement with ASW to lease the Houston facility with an option to purchase it in the future. In addition, we assumed certain of ASW’s accounts payable and accrued liabilities related to its PC strand business.

Following is a summary of our 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, we 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. Under the provisions of ASC Topic 805, 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 (See Note 5 to the consolidated financial statements).

Following the ASW Acquisition, net sales of the ASW facilities in 2014 were approximately $7.3 million. The actual amount of net sales specifically attributable to the ASW Acquisition, however, cannot be quantified due to the actions that we took to integrate ASW’s facilities with our existing operations, which involved the reassignment of business across locations. We have determined that the presentation of ASW’s earnings for 2014 is impractical due to the integration of ASW’s facilities with our existing operations following the ASW Acquisition.

The following unaudited supplemental pro forma financial information reflects our combined results of operations had the ASW Acquisition occurred at the beginning of 2013. The pro forma information reflects certain adjustments related to the ASW Acquisition, including adjusted amortization and depreciation expense based on the fair value of the assets acquired, interest expense related to the borrowings on our revolving credit facility and an appropriate adjustment for the acquisition-related costs. The pro forma information does not reflect any operating efficiencies or potential cost savings that may result from the ASW Acquisition. Accordingly, this pro forma information is for illustrative purposes and is not intended to represent or be indicative of the actual results of operations of the combined company that may have been achieved had the ASW Acquisition occurred at the beginning of 2013, nor is it intended to represent or be indicative of future results of operations. The pro forma combined results of operations for the comparative prior year period are as follows:

(In thousands)	Year Ended September 27, 2014
Net sales	$	469,079
Earnings before income taxes		27,225
Net earnings		18,928