NOTE

– Acquisition of Business

BAMKO

March 8, 2016,

the Company closed on the acquisition of substantially all of the assets of BAMKO, Inc.

The transaction had an effective date of

March 1, 2016.

The purchase price for the asset acquisition consisted of approximately

$15.2

million in cash, net of cash acquired, the issuance of approximately

324,000

restricted shares of Superior’s common stock that vest over a

five

-year period, potential future payments of approximately

$5.5

million in additional contingent consideration through

2021,

and the assumption of certain liabilities of BAMKO, Inc. The transaction also included the acquisition of BAMKO, Inc.’s subsidiaries in Hong Kong, China, Brazil and England as well as an affiliate in India.

The foregoing description of the asset purchase agreement does

not

purport to be complete and is subject to, and qualified in its entirety by, the full text of the agreement, which is filed as an exhibit to the Quarterly Report on Form

-Q filed on

April

28,

2016.

Fair Value of Consideration Transferre

A Summary of the purchase price is as follows (in thousands) :

Cash consideration at closing, net of cash acquire d	$	15,161

Restricted shares of Superior common stock issue d		4,558

Contingent consideratio n		5,205

Total Consideration s	$	24,924

Assets Acquired and Liabilities Assumed

The total purchase price was allocated to the acquired tangible and intangible assets and assumed liabilities of BAMKO

, Inc. based on their estimated fair values as of

March 1, 2016.

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was allocated to goodwill.

The following table presents the

allocation of the total fair value of consideration transferred, as shown above, to the acquired tangible and intangible assets and assumed liabilities of BAMKO based on their fair values as of the effective date of the transaction.

The following is our assignment of the aggregate consideration (in thousands):

Accounts receivabl e	$	4,885

Prepaid expenses and other current asset s		3,200

Inventorie s		236

Property, plant and equipmen t		199

Other Asset s		100

Identifiable intangible asset s		11,360

Goodwil l		6,994

Total asset s	$	26,974

Accounts Payable s		1,314

Other current liabilitie s		736

Total liabilitie s	$	2,050

The Company recorded

$11.4

million

in identifiable intangibles at fair value, consisting of

$2.1

million in acquired customer relationships,

$0.4

million in non-compete agreements from the former owners of BAMKO, Inc., and

$8.9

million for the acquired trade name.

The estimated

fair value for acquisition-related contingent consideration payable is

$5.2

million as of

December 31, 2017.

The Company will continue to evaluate this liability for remeasurement at the end of each reporting period and any change will be recorded in the Company’s consolidated statement of comprehensive income. The carrying amount of the liability

may

fluctuate significantly and actual amounts paid

may

be materially different from the estimated value of the liability.

Goodwill was calculated as the difference between the fair value of the consideration and the values assigned to the assets acquired and liabilities assumed.

The intangible assets associated with the customer relationships will be amortized for

seven

years beginning on

March 1, 2016

and the non-compete agreement will be amortized for

five

years and

ten

months. The trade name is considered an indefinite-life asset and as such will

not

be amortized.

The Company recognized amortization expense on these acquired intangibl

e assets of

$0.4

million for the year ended

December 31, 2017

and

$0.3

million for the year ended

December 31, 2016.

For the year ended

December 31,

201

the Company incurred and expensed transaction related expenses of approximately

$1.1

million. This amount is included in selling and administrative expenses on the consolidated statements of comprehensive income.

On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the years ended

December 31, 2016

and

2015,

net sales would have increased approximately

$6.6

million and

$31.5

million respectively.

Net income would have increased

$1.1

million or

$0.08

per share for the year ended

December 31, 2016,

and decreased by

$0.4

million or

$0.03

per share for the year ended

December 31, 2015.

Pre-tax acquisition related expenses of

$1.1

million have been recorded as though they were incurred as of

January 1, 2014

for this comparison.

Public Identity

August 21, 2017,

BAMKO acquired substantially all of the assets and assumed certain liabilities of PublicIdentity

, Inc. (“Public Identity”) of Los Angeles, CA. Public Identity is a promotional products and branded merchandise agency that provides innovative, high quality merchandise and promotional products to corporate clients and universities across the country.

The purchase price for the acquisition consisted of

$0.8

million in cash, the issuance of approximately

54,000

restricted shares of Superior

’s common stock and future payments of approximately

$0.4

million in additional consideration through

2020.

The majority of the shares issued vest over a

three

-year period. The preliminary estimated fair value of the consideration transferred is approximately

$2.3

million. Based upon our preliminary estimates of their acquisition date fair values, we have assigned approximately

$1.7

million to identifiable intangible assets and approximately

$0.6

million to goodwill. Our final fair value determinations

may

be significantly different.

Tangerine Promotions

November 30, 2017,

BAMKO closed on the acquisition of

substantially all of the assets of Tangerine Promotions, Ltd and Tangerine Promotions West, Inc. (collectively “Tangerine”). The transaction had an effective date of

December 1, 2017.

Tangerine is a promotional products and branded merchandise agency that serves many well-known brands. The company is

one

of the leading providers of Point-of-Purchase (POP) and Point-of-Sale (POS) merchandise in the country. The purchase price for the asset acquisition consisted of approximately

$7.2

million in cash, subject to adjustment, the issuance of approximately

83,000

restricted shares of Superior’s common stock that vests over a

four

-year period, the potential future payments of approximately

$5.5

million in additional contingent consideration through

2021,

and the assumption of certain liabilities.

The foregoing description of the asset purchase agreement does

not

purport to be complete and is subject to, and qualified in its entirety by, the full text of the agreement, whic

h is filed as an exhibit to this Annual Report.

Fair Value of Consideration Transferre

A Summary of the purchase price is as follows (in thousands) :

Cash consideration at closin g	$	7,222

Restricted shares of Superior common stock issue d		1,657

Contingent consideratio n		3,209

Total Consideration s	$	12,088

Assets Acquired and Liabilities Assumed

The total purchase price was allocated to the acquired tangible and intangible assets and assumed liabilities of

Tangerine based on their estimated fair values as of

December 1, 2017.

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was allocated to goodwill.

The following table presents the allocation of the total fair value of consideration transferred, as shown above, to the acquired tangible and intangible assets and assumed liabilities o

f Tangerine based on their estimated fair values as of the effective date of the transaction.

The

assets and liabilities of Tangerine shown below are based on our preliminary estimates of their acquisition date fair values. Our final fair value determinations

may

be significantly different than those shown below.

The following is our

preliminary assignment of the aggregate consideration (in thousands):

Accounts receivabl e	$	5,051

Prepaid expenses and other current asset s		969

Property, plant and equipmen t		131

Identifiable intangible asset s		6,495

Goodwil l		4,169

Total asset s	$	16,815

Accounts Payable s		3,374

Other current liabilitie s		1,353

Total liabilitie s	$	4,727

The Company recorded

$6.5

million in identifiable intangibles at fair value, consisting of

$3.1

million in acquired customer relationships,

$0.2

million in non-compete agreements from the former owners of Tangerine, and

$3.2

million for the acquired trade name.

The estimated fair value for acquisition-related contingent consideration payable is $

3.2

million as of

December 31, 2017.

may

fluctuate significantly and actual amounts paid

may

be materially different from the estimated value of the liability.

Goodwill was calculated as the difference between the fair value of the consideration and the values assigned to the assets acquired and liabilities assumed.

The intangible assets associated with the customer relationships will be amortized for

seven

years beginning on

December 1, 2017

and the non-compete agreement will be amortized for

seven

years. The trade name is considered an indefinite-life asset and as such will

not

be amortized.

The Company recognized amortization expense on these acquired intangible assets of $

0.1

million for the year ended

December 31, 2017.

For the year ended

December 31,

201

the Company incurred and expensed transaction related expenses of approximately

$0.2

million. This amount is included in selling and administrative expenses on the consolidated statements of comprehensive income.

On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the entire year ended

December 31, 2017

and years ended

December 31, 2016

and

2015,

net sales would have increased approximately

$35.1

million,

$43.1

million and

$48.0

million respectively. Net income would have increased

$0.1

million in

2017,

decreased

$2.4

million or

$0.17

per share in

2016,

and increased

$1.9

million or

$0.13

per share in

2015.

Pre-tax acquisition related expenses of

$0.2

million have been recorded as though they were incurred as of

January 1, 2015

for this comparison.