Acquisitions, Goodwill And Other Intangible Assets | 12 Months Ended |
Dec. 31, 2013 |
Acquisitions, Goodwill And Other Intangible Assets [Abstract] | ' |
Acquisitions, Goodwill And Other Intangible Assets | ' |
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3. ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS |
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Acquisition in 2014 |
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Innovative Design Solutions, Inc. |
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On February 27, 2014, the Company acquired Innovative Design Solutions, Inc. ("IDS"), a designer, developer and manufacturer of electronic systems encompassing a wide variety of RV applications. IDS also manufactures electronic systems for automotive, medical and industrial applications. IDS had annual sales of approximately $19 million in 2013, of which $13 million were to the Company. The purchase price was $36.0 million, of which $34.2 million was paid at closing, with the balance to be paid out annually over the subsequent three years, plus contingent consideration based on future sales. |
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Acquisitions in 2013 |
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Fortress Technologies, LLC |
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On December 13, 2013, the Company acquired the business and certain assets of Fortress Technologies, LLC ("Fortress"). Fortress is a manufacturer of specialized RV chassis. The acquired business had annualized sales of approximately $3 million. The results of the acquired business have been included in the Company's RV Segment and in the Consolidated Statements of Income since the acquisition date. |
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The acquisition of this business was recorded on the acquisition date as follows (in thousands): |
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Cash consideration | $ | 3,299 | | | | | | | | |
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Working capital, net | $ | (111 | ) | | | | | | | |
Net tangible assets | | 3,410 | | | | | | | | |
Total fair value of net assets acquired | $ | 3,299 | | | | | | | | |
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Midstates Tool & Die and Engineering, Inc. |
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On June 24, 2013, the Company acquired the business and certain assets of Midstates Tool & Die and Engineering, Inc. ("Midstates"). Midstates is a manufacturer of tools and dies, as well as automation equipment. The acquired business had annualized sales of approximately $2 million. The results of the acquired business have been included in the Company's RV Segment and in the Consolidated Statements of Income since the acquisition date. |
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The acquisition of this business was recorded on the acquisition date as follows (in thousands): |
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Cash consideration | $ | 1,451 | | | | | | | | |
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Working capital, net | $ | 20 | | | | | | | | |
Non-compete agreement | | 40 | | | | | | | | |
Net tangible assets | | 1,023 | | | | | | | | |
Total fair value of net assets acquired | $ | 1,083 | | | | | | | | |
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Goodwill (tax deductible) | $ | 368 | | | | | | | | |
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The consideration given was greater than the fair value of assets acquired, resulting in goodwill, because the Company anticipates the automation capabilities of the acquired business will help to improve its operating efficiencies. |
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Acquisition in 2012 |
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RV Entry Door Operation |
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On February 21, 2012, the Company acquired the business and certain assets of the United States RV entry door operation of Euramax International, Inc. The acquired business had annualized sales of approximately $6 million. The purchase price was $1.7 million, of which $1.2 million was paid at closing, with the balance to be paid over the next three years. The results of the acquired business have been included in the Company's RV Segment and in the Consolidated Statements of Income since the acquisition date. |
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The acquisition of this business was recorded on the acquisition date as follows (in thousands): |
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Cash consideration | $ | 1,164 | | | | | | | | |
Present value of future payments | | 482 | | | | | | | | |
Total fair value of consideration given | $ | 1,646 | | | | | | | | |
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Customer relationships | $ | 270 | | | | | | | | |
Other identifiable intangible assets | | 40 | | | | | | | | |
Net tangible assets | | 785 | | | | | | | | |
Total fair value of net assets acquired | $ | 1,095 | | | | | | | | |
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Goodwill (tax deductible) | $ | 551 | | | | | | | | |
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The customer relationships are being amortized over their estimated useful life of 7 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates leveraging its existing manufacturing capacity and purchasing power to reduce costs in this product line. |
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Acquisitions in 2011 |
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The five acquisitions completed in 2011 added approximately $40 million in net sales for 2011 subsequent to their respective acquisition dates. Assuming that each of the acquisitions completed in 2011 had been completed at the beginning of 2011, net sales for 2011 would have been $55 million higher. |
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M&M Fabricators |
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On December 1, 2011, the Company acquired the business and certain assets of M&M Fabricators. M&M had annualized sales of approximately $3 million, comprised of chassis modification primarily for producers of transit buses, specialized commercial vehicles, and Class A and Class C motorhome RVs. The purchase price was $1.0 million paid at closing, plus contingent consideration based on future sales of this operation. The results of the acquired business have been included in the Company's RV Segment and in the Consolidated Statements of Income since the acquisition date. |
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The acquisition of this business was recorded on the acquisition date as follows (in thousands): |
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Cash consideration | $ | 961 | | | | | | | | |
Contingent consideration | | 450 | | | | | | | | |
Total fair value of consideration given | $ | 1,411 | | | | | | | | |
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Customer relationships | $ | 330 | | | | | | | | |
Net tangible assets | | 820 | | | | | | | | |
Total fair value of net assets acquired | $ | 1,150 | | | | | | | | |
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Goodwill (tax deductible) | $ | 261 | | | | | | | | |
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The consideration given was greater than the fair value of the assets acquired, resulting in goodwill, because the Company anticipates leveraging its existing experience and purchasing power with respect to these product lines. |
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Starquest Products, LLC |
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On August 29, 2011, the Company acquired the business and assets of Starquest Products, LLC and its affiliated company. Starquest had annual sales of approximately $22 million, comprised primarily of windows for truck caps, which are fiberglass enclosures that fit over the bed of pick-up trucks, painted to automotive standards and designed to exact truck bed specifications. Starquest also manufactures windows and doors for horse trailers and certain types of buses. The purchase price was $22.6 million paid at closing, plus contingent consideration based on future sales of certain products. The results of the acquired business have been included in the Company's RV Segment and in the Consolidated Statements of Income since the acquisition date. |
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The acquisition of this business was recorded on the acquisition date as follows (in thousands): |
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Cash consideration | $ | 22,600 | | | | | | | | |
Contingent consideration | | 40 | | | | | | | | |
Total fair value of consideration given | $ | 22,640 | | | | | | | | |
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Customer relationships | $ | 12,540 | | | | | | | | |
Other identifiable intangible assets | | 1,884 | | | | | | | | |
Net tangible assets | | 2,871 | | | | | | | | |
Total fair value of net assets acquired | $ | 17,295 | | | | | | | | |
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Goodwill (tax deductible) | $ | 5,345 | | | | | | | | |
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The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration given was greater than the fair value of the assets acquired, resulting in goodwill, because the Company anticipates leveraging its existing experience and purchasing power with respect to these product lines. |
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EA Technologies, LLC |
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On August 22, 2011, the Company acquired from EA Technologies, LLC the business and certain assets of the towable RV chassis and slide-out mechanism operation previously owned by Dexter Chassis Group. The acquired business had annual sales of more than $40 million. The purchase price was $13.5 million paid at closing. The results of the acquired business have been included in the Company's RV Segment and in the Consolidated Statements of Income since the acquisition date. |
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The acquisition of this business was recorded on the acquisition date as follows (in thousands): |
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Cash consideration | $ | 13,500 | | | | | | | | |
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Customer relationships | $ | 6,960 | | | | | | | | |
Net tangible assets | | 2,339 | | | | | | | | |
Total fair value of net assets acquired | $ | 9,299 | | | | | | | | |
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Goodwill (tax deductible) | $ | 4,201 | | | | | | | | |
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The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. |
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The consideration given was greater than the fair value of the assets acquired, resulting in goodwill, because the Company anticipates leveraging its existing experience and manufacturing capacity with respect to these product lines. |
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M-Tec Corporation |
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On July 19, 2011, the Company acquired certain assets and business of M-Tec Corporation. The acquired business had annual sales of approximately $12 million comprised primarily of components for RVs, mobile office units and manufactured homes. The purchase price was $6.0 million paid at closing, plus contingent consideration based on future sales of existing products. The results of the acquired business have been included in either the Company's RV or MH Segments, as appropriate, and in the Consolidated Statements of Income since the acquisition date. |
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The acquisition of this business was recorded on the acquisition date as follows (in thousands): |
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Cash consideration | $ | 5,990 | | | | | | | | |
Contingent consideration | | 450 | | | | | | | | |
Total fair value of consideration given | $ | 6,440 | | | | | | | | |
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Customer relationships | $ | 2,310 | | | | | | | | |
Other identifiable intangible assets | | 315 | | | | | | | | |
Net tangible assets | | 1,723 | | | | | | | | |
Total fair value of net assets acquired | $ | 4,348 | | | | | | | | |
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Goodwill (tax deductible) | $ | 2,092 | | | | | | | | |
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The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration given was greater than the fair value of the assets acquired, resulting in goodwill, because the Company anticipates leveraging its existing manufacturing expertise and purchasing power with respect to these product lines. |
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Home-Style Industries |
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On January 28, 2011, the Company acquired the operating assets and business of Home-Style Industries, Inc., and its affiliated companies. Home-Style had annual sales of approximately $12 million comprised primarily of a full line of upholstered furniture and mattresses primarily for towable RVs, in the Northwest U.S. market. The purchase price was $7.3 million paid at closing, plus contingent consideration based on future sales of existing products in specific geographic regions. The results of the acquired business have been included in the Company's RV Segment and in the Consolidated Statements of Income since the acquisition date. |
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The acquisition of this business was recorded on the acquisition date as follows (in thousands): |
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Cash consideration | $ | 7,250 | | | | | | | | |
Contingent consideration | | 150 | | | | | | | | |
Total fair value of consideration given | $ | 7,400 | | | | | | | | |
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Customer relationships | $ | 3,350 | | | | | | | | |
Other identifiable intangible assets | | 365 | | | | | | | | |
Net tangible assets | | 2,582 | | | | | | | | |
Total fair value of net assets acquired | $ | 6,297 | | | | | | | | |
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Goodwill (tax deductible) | $ | 1,103 | | | | | | | | |
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The customer relationships intangible asset is being amortized over its estimated useful life of 12 years. The consideration given was greater than the fair value of the assets acquired, resulting in goodwill, because the Company anticipates leveraging its existing experience and purchasing power with respect to these product lines. |
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Goodwill |
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Goodwill by reportable segment was as follows: |
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(In thousands) | | RV Segment | | | MH Segment | | | Total | | |
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Accumulated cost | $ | 48,773 | | $ | 9,251 | | $ | 58,024 | | |
Accumulated impairment | | (41,276 | ) | | (9,251 | ) | | (50,527 | ) | |
Net balance – December 31, 2010 | | 7,497 | | | - | | | 7,497 | | |
Acquisitions – 2011 | | 12,228 | | | 774 | | | 13,002 | | |
Net balance – December 31, 2011 | | 19,725 | | | 774 | | | 20,499 | | |
Acquisitions – 2012 | | 678 | | | - | | | 678 | | |
Net balance – December 31, 2012 | | 20,403 | | | 774 | | | 21,177 | | |
Acquisitions – 2013 | | 368 | | | - | | | 368 | | |
Net balance – December 31, 2013 | $ | 20,771 | | $ | 774 | | $ | 21,545 | | |
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Accumulated cost | $ | 62,047 | | $ | 10,025 | | $ | 72,072 | | |
Accumulated impairment | | (41,276 | ) | | (9,251 | ) | | (50,527 | ) | |
Net balance – December 31, 2013 | $ | 20,771 | | $ | 774 | | $ | 21,545 | | |
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The Company performed its annual goodwill impairment procedures for all of its reporting units as of November 30 2013, 2012 and 2011, and concluded no goodwill impairment existed at that time. The Company plans to update its review as of November 30, 2014, or sooner if events occur or circumstances change that could reduce the fair value of a reporting unit below its carrying value. |
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Other Intangible Assets |
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Other intangible assets, by segment, consisted of the following at December 31: |
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(In thousands) | | 2013 | | 2012 | | | | | | |
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RV Segment | $ | 56,954 | $ | 66,191 | | | | | | |
MH Segment | | 2,438 | | 3,027 | | | | | | |
Other intangible assets | $ | 59,392 | $ | 69,218 | | | | | | |
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Other intangible assets consisted of the following at December 31, 2013: |
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| | Gross | | Accumulated | | Net | Estimated Useful | | | |
(In thousands) | | Cost | | Amortization | | Balance | Life in Years | | | |
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Customer relationships | $ | 50,105 | $ | 21,999 | $ | 28,106 | | 6 to 16 | | |
Patents | | 41,651 | | 18,461 | | 23,190 | | 3 to 19 | | |
Tradenames | | 7,959 | | 5,976 | | 1,983 | | 5 to 15 | | |
Non-compete agreements | | 3,866 | | 2,210 | | 1,656 | | 3 to 6 | | |
Purchased research and | | | | | | | | | | |
development | | 4,457 | | - | | 4,457 | Indefinite | | | |
Other intangible assets | $ | 108,038 | $ | 48,646 | $ | 59,392 | | | | |
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Other intangible assets consisted of the following at December 31, 2012: |
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| | Gross | | Accumulated | | Net | Estimated Useful | | | |
(In thousands) | | Cost | | Amortization | | Balance | Life in Years | | | |
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Customer relationships | $ | 50,105 | $ | 17,857 | $ | 32,248 | | 3 to 16 | | |
Patents | | 41,507 | | 14,850 | | 26,657 | | 2 to 19 | | |
Tradenames | | 7,959 | | 4,525 | | 3,434 | | 5 to 15 | | |
Non-compete agreements | | 4,989 | | 2,567 | | 2,422 | | 1 to 7 | | |
Purchased research and | | | | | | | | | | |
development | | 4,457 | | - | | 4,457 | Indefinite | | | |
Other intangible assets | $ | 109,017 | $ | 39,799 | $ | 69,218 | | | | |
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Amortization expense related to other intangible assets was as follows for the years ended December 31: |
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(In thousands) | | 2013 | | 2012 | | 2011 | | | | |
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Cost of sales | $ | 3,610 | $ | 4,492 | $ | 3,393 | | | | |
Selling, general and administrative expenses | | 6,398 | | 6,760 | | 4,958 | | | | |
Amortization expense | $ | 10,008 | $ | 11,252 | $ | 8,351 | | | | |
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Estimated amortization expense for other intangible assets for the next five years is as follows: |
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(In thousands) | | 2014 | | 2015 | | 2016 | | 2017 | | 2018 |
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Cost of sales | $ | 3,890 | $ | 4,028 | $ | 4,175 | $ | 3,816 | $ | 3,081 |
Selling, general and | | | | | | | | | | |
administrative expense | $ | 5,217 | $ | 4,566 | $ | 3,696 | $ | 3,331 | $ | 3,037 |
Amortization expense | $ | 9,107 | $ | 8,594 | $ | 7,871 | $ | 7,147 | $ | 6,118 |
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