Etratech designs, develops, manufactures and sells electronic control modules and control systems to customers across a range of industries, including automotive, recreational vehicles and marine, HVAC systems and medical, amongst others. Each function is part of an integrated, customer-focused process designed to exceed customer expectations for product quality, reliability and cost. Etratech’s global manufacturing footprint will enable us to provide customers with scalable and flexible manufacturing solutions across a variety of application and geographies.

Results of operations for Etratech are included in the Company’s consolidated financial statements beginning November 1, 2017. Etratech contributed $8,398 in product revenues and a net loss of $510 for the year ended December 31, 2017.

The purchase price of $65,009, net of cash acquired of $670, has been allocated to the values of assets acquired and liabilities assumed as of November 1, 2017. An appraisal by an independent third party valuation firm was completed to assist management in determining the fair value of acquired assets and assumed liabilities, including identifiable intangible assets. The fair values of acquired assets and assumed liabilities were determined using the cost approach that relied primarily internal sources of data to make assumptions that are not observable in the market (Level 3 inputs). The purchase price allocation was finalized during the first quarter of 2018. The allocation as of November 1, 2017 was as follows:


Accounts receivable	$	12,654
Inventory		7,014
Prepaid expenses and other assets		535
Property and equipment		6,205
Customer relationships		24,774
Technology		8,588
Goodwill		14,881
Assumed liabilities		(9,642	)

Net assets acquired		65,009
Cash acquired		670

Purchase price	$	65,679

The gross contractual amount due of accounts receivable is $12,654, all of which was subsequently collected.

The unaudited pro forma combined historical results including the amounts of Etratech revenue and earnings that would have been included in the Company’s consolidated statements of income had the acquisition date been January 1, 2017 or January 1, 2016 are as follows:

	Twelve Months Ended December 31,
	2017		2016
Product revenues	$	1,032,273	$	966,355
Net income	$	35,911	$	77,577
Basic earnings per share	$	0.98	$	2.13
Diluted earnings per share	$	0.98	$	2.12

The pro forma information includes adjustments for the effect of the amortization of intangible assets recognized in the acquisition. This pro forma information is not indicative of future operating results.

We recorded goodwill of approximately $14,881 arising from the acquisition. The acquired goodwill represents intangible assets that do not qualify for separate recognition. It is estimated that approximately $8,787 of the goodwill recognized will not be deductible for income tax purposes.

In conjunction with the acquisition, intangible assets of $33,362 were recorded. The Company’s estimate of the fair value of these assets at the time of the acquisition was determined with the assistance of an independent third-party valuation firm. As part of the estimated valuation, an estimated useful life for the assets was determined.

	December 31, 2017
	Gross Value		Accumulated Amortization		Net Value		Useful Life
Customer relationships	$	24,774	$	358	$	24,416	8 -12 yrs
Technology		8,588		277		8,311	5 -6 yrs
Total	$	33,362	$	635	$	32,727

Amortization expense of $635 for the period November 1, 2017 through December 31, 2017 was recorded as follows:

	Three Months Ended December 31, 2017		Twelve Months Ended December 31, 2017
Product revenues	$	358	$	358
Research and development expenses		277		277

2018	$	3,769
2019	$	3,769
2020	$	3,769
2021	$	3,706
2022	$	3,278

Asset category	Useful life	Amount
Leasehold improvements	10 yrs	$	342
Machinery and equipment	4-11 yrs		5,248
Furniture and fittings	4 yrs		230
Motor Vehicles	3 yrs		25
Computer hardware and software	1 yrs		360

		$	6,205