Acquistion and Plant Consolidation

9 Months Ended

Sep. 30, 2012

Business Combinations [Abstract]

Acquisition and Plant Consolidation

Acquisition and Plant Consolidation

Acquisition of Tenco

On October 19, 2011 the Company announced it had acquired substantially all of the assets and business of Tenco Group Inc. and its subsidiaries, (“Tenco”), effective October 18, 2011, for approximately $5.9 million in cash, plus the assumption of certain specified liabilities and subject to post closing adjustments. Tenco is a Canadian based manufacturer and distributor of snow and ice removal equipment. The purchase includes substantially all of the ongoing business of Tenco, including the Tenco brand name and all related product names and trademarks.

Tenco's principal markets are in Canada and the United States and has operations in both countries. Tenco's Canadian operations had been operating under Receivership Orders from the Quebec Superior Court since July 25, 2011, and the Asset Purchase Agreement was approved by the Court on October 17, 2011.

The acquisition was accounted for as a business combination whereby the Company measured the identifiable assets acquired and liabilities assumed based on the acquisition date fair value. Accordingly, the total purchase price was allocated on a provisional basis to assets acquired and net liabilities assumed in connection with the acquisition based on their estimated fair values as of the completion of the acquisition. These allocations reflected various provisional estimates that were available at the time and were subject to change during the purchase price allocation period as valuations are finalized. All valuations are now final.

The following table summarizes the fair value of assets acquired and liabilities assumed as of the Closing Date. Since the acquisition, net adjustments of $0.9 million were made to the fair value of the assets acquired and liabilities assumed with a corresponding adjustment to the bargain purchase gain. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The Company's judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact its results of operations. The December 31, 2011 financial statement balances and disclosures impacted by these adjustments have been retrospectively adjusted. The adjustments were due to the final valuation of property, plant and equipment, inventory, and other liabilities.

(in thousands)	Initial Valuation			Adjustments		Adjusted Values
Accounts receivable	$	3,182				$	3,182
Inventory	7,375			218		7,593
Prepaid expenses	277					277
Property, plant & equipment	5,277			584		5,861
Other Liabilities	(2,433		)	69		(2,364		)
Net Assets acquired	13,678			871		14,549
Less: Purchase Price	5,933					5,933
Gain on Bargain purchase	$	7,745		$	871	$	8,616

In the third quarter of 2012, Tenco generated approximately $5.0 million of net revenue and less than $0.1 million net income. In the first nine months of 2012, Tenco's net revenue was $20.1 million and net income was $0.4 million.The Company has included the operating results of Tenco in its consolidated financial statements since the Closing Date.

Plant Consolidation

On October 21, 2011 the Company announced that it would close its SMC plant in Sioux Falls, South Dakota and consolidate the operations into the Company's Gibson City, Illinois facility. This transition began in the fourth quarter of 2011 and was completed in the third quarter of 2012. The consolidation resulted in a pre-tax restructuring charge in the fourth quarter of 2011 of approximately $0.7 million. Additionally, the Company has listed the SMC plant for sale and anticipates a gain on the sale of the facility if it occurs. Approximately 77 employees at SMC were affected by the consolidation.