NOTE

– Acquisition of Business

CID Resources

May 2, 2018,

the Company acquired CID Resources, Inc., a Delaware corporation (“CID”), which manufactures medical uniforms, lab coats, and layers, and sells its products to specialty uniform retailers, ecommerce medical uniform retailers, and other retailers.

The purchase price in the acquisition consisted of the following: (a) approximately

$84.4

million in cash at closing, (b) the issuance of

150,094

shares of the Company’s common stock to an equityholder of CID, and (c)

$2.5

million in cash as a result of the cash and working capital adjustment.

Fair Value of Consideration Transferred

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

Cash consideration at closing	$	84,430
Superior common stock issued		3,763
Cash and working capital adjustment		2,521
Total Considerations	$	90,714

Assets Acquired and Liabilities Assumed

The total purchase price was allocated to the tangible and intangible assets and liabilities of CID based on their estimated fair values as of

May 2, 2018.

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 liabilities of CID based on their estimated fair values as of the effective date of the transaction (in thousands):

Cash	$	1,360
Accounts receivable		9,657
Prepaid expenses and other current assets		1,248
Inventories		28,895
Property, plant and equipment		1,134
Contract assets		2,535
Identifiable intangible assets		41,020
Goodwill		20,323
Total assets	$	106,172
Accounts payables		5,030
Deferred tax liability		9,461
Other current liabilities		967
Total liabilities	$	15,458

The amounts in the table above are reflective of measurement period adjustments made during the

three

and

six

months ended

June 30, 2019,

which mainly included an increase of

2.4

million to goodwill, a decrease of

$1.8

million to inventory and an increase of

$0.6

million to accounts payable. The measurement period adjustments did

not

have a significant impact on the Company’s statement of operations or cash flows. The Company finalized the purchase price allocation of CID during the

second

quarter of

2019.

The Company recorded

$41.0

million in identifiable intangibles at fair value, consisting of

$26.0

million in acquired customer relationships,

$0.8

million for a non-compete agreement and

$14.2

million for the brand name.

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

not

be deductible for tax purposes.

The intangible assets associated with the customer relationships are being amortized for

fifteen

years beginning on

May 2, 2018

and the non-compete agreement is being amortized for

five

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

not

being amortized.

The Company recognized amortization expense on these acquired intangible assets of

$0.5

million and

$0.3

million for the

three

months ended

June 30, 2019

and

2018,

respectively.

The Company recognized amortization expense on these acquired intangible assets of

$1.0

million and

$0.8

million for the

six

months ended

June 30, 2019

and

2018,

respectively.

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

three

months ended

June 30, 2018,

net sales would have increased approximately

$5.1

million. Net income would have increased

$1.3

million in

2018,

$0.80

per share.

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

six

months ended

June 30, 2018,

net sales would have increased approximately

$22.3

million. Net income would have increased

$2.6

million in

2018,

$0.17

per share.

Other Acquisitions of Businesses

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 transaction also included the acquisition of BAMKO, Inc.’s subsidiaries in Hong Kong, China, Brazil and England as well as an affiliate in India. BAMKO is a promotional products, merchandise, and packaging company that serves the world’s most prominent brands. The purchase price included a potential future payment of approximately

$5.5

million in additional contingent consideration through

2021.

The estimated fair value for acquisition-related contingent consideration payable was

$3.2

million as of

June 30, 2019.

The current portion of

$1.2

million shall be paid in the

second

quarter of

2020.

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 statement of comprehensive income.

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 included future payments of approximately

$0.4

million in additional consideration through

2020.

Tangerine Promotions

November 30, 2017,

BAMKO acquired 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 included potential future payments of approximately

$3.2

million in additional contingent consideration through

2021.

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

$2.6

million as of

June 30, 2019.

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 statement of comprehensive income.