ACQUISITIONS | ACQUISITIONS General The Company completed a total of 17 acquisitions involving 25 com panies in the three years ended December 31, 2017 , 2016 and 2015 as discussed below. Each of the acquisitions was funded through borrowings under the Company’s credit facility in existence at the time of acquisition. Assets acquired and liabilities assumed in the individual acquisitions were recorded on the Company’s consolidated statements of financial position at their estimated fair values as of the respective dates of acquisition. In general, the acquisitions described below provided the opportunity for the Company to either establish a new presence in a particular market and/or expand its product offerings in an existing market and increase its market share and per unit content. For each acquisition, the excess of the purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which represents the value of leveraging the Company’s existing purchasing, manufacturing, sales, and systems resources with the organizational talent and expertise of the acquired companies’ respective management teams to maximize efficiencies, revenue impact, market share growth, and net income. The goodwill recognized is expected to be deductible for income tax purposes for each of the 2015, 2016 and 2017 acquisitions with the exception of the 2017 acquisition of Leisure Product Enterprises, LLC, which is expected to be partially deductible for income tax purposes, and the 2016 acquisition of BH Electronics, Inc. Intangible asset values were estimated using income based valuation methodologies. See Note 7 for information regarding the amortization periods assigned to finite-lived intangible assets. For the years ended December 31, 2017 , 2016 and 2015 , revenue of approximately $109.7 million , $92.3 million and $101.1 million , respectively, was included in the Company’s consolidated statements of income pertaining to the businesses acquired in each such year. For the years ended December 31, 2017 , 2016 and 2015 , operating income of approximately $13.1 million , $10.3 million and $11.8 million , respectively, was included in the Company’s consolidated statements of income pertaining to the businesses acquired in each such year. Acquisition-related costs in the aggregate associated with the businesses acquired in 2017 , 2016 and 2015 were immaterial. 2018 Acquisitions Metal Moulding Corporation (“MMC” ) In February 2018, the Company completed the acquisition of the business and certain assets of Madison, Tennessee-based MMC, a manufacturer of custom metal fabricated products, primarily for the marine market, including hinges, arm rests, brackets, panels and trim, as well as plastic products including boxes, inlay tables, steps, and related components, for a net purchase price of approximately $20 million . Aluminum Metals Company, LLC (“AMC” ) In February 2018, the Company completed the acquisition of the business and certain assets of Elkhart, Indiana-based AMC, a manufacturer and distributor of aluminum products including coil, fabricated sheets and extrusions, in addition to roofing products, primarily for the RV, industrial, and marine markets, for a net purchase price of approximately $16.5 million . In general, the 2018 acquisitions provide the opportunity for the Company to either establish a new presence in a particular market and/or expand its product offerings in an existing market and increase its market share and per unit content. Both the MMC and AMC acquisitions were funded under the Company's 2015 Credit Facility. The Company is in the process of allocating the purchase consideration to the fair value of the assets acquired and expects to provide a summary of each in its Report on Form 10-Q for the first quarter ended April 1, 2018. The results of operations for both acquisitions will be included in the Company's condensed consolidated financial statements from the respective dates of acquisition and in the Manufacturing segment. 2017 Acquisitions Medallion Plastics, Inc. (“Medallion”) In March 2017, the Company acquired the business and certain assets of Elkhart, Indiana-based Medallion, a designer, engineer and manufacturer of custom thermoformed products and components which include dash and trim panels and fender skirts for the RV market, and complete interior packages, bumper covers, hoods, and trims for the automotive, specialty transportation and other industrial markets, for a net purchase price of $9.9 million . The results of operations for Medallion are included in the Company’s consolidated financial statements and the Manufacturing operating segment from the date of acquisition. The purchase price allocation and all required purchase accounting adjustments were finalized in the fourth quarter of 2017, with no material changes from previously reported estimated amounts. Leisure Product Enterprises, LLC (“LPE”) In April 2017, the Company acquired 100% of the membership interests of LPE for a net purchase price of approximately $73.3 million , subject to a final working capital adjustment. LPE is comprised of three complementary manufacturing companies primarily serving the marine and industrial markets: Marine Electrical Products, located in Lebanon, Missouri, supplies marine original equipment manufacturers (“OEMs”) with fully-assembled boat dash and helm assemblies, including electrical wire harnesses as well as custom parts and assemblies for the industrial, commercial, and off-road vehicle markets; Florida Marine Tanks, located in Henderson, North Carolina, supplies aluminum fuel and holding tanks for marine and industrial customers; and Marine Concepts/Design Concepts, with facilities located in Sarasota, Florida and Cape Coral, Florida, designs, engineers and manufactures CNC plugs, open and closed composite molds, and CNC molds for fiberglass boat manufacturers. The results of operations for LPE are included in the Company's consolidated financial statements and the Manufacturing operating segment from the date of acquisition. The preliminary purchase price allocation is subject to final review and approval, and thus all required purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its fair value estimates. Indiana Technologies, Inc. d/b/a Wire Design (“Wire Design”) In July 2017, the Company acquired the business and certain assets of Elkhart, Indiana-based Wire Design, a manufacturer of wire harnesses for the RV, marine and industrial markets, for a net purchase price of $10.8 million . The results of operations for Wire Design are included in the Company's consolidated financial statements and the Manufacturing operating segment from the date of acquisition. The preliminary purchase price allocation is subject to final review and approval, and thus all required purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its fair value estimates. Baymont, Inc. (“Baymont”) In September 2017, the Company acquired the business and certain assets of Baymont, a manufacturer and supplier of fiberglass showers, tubs, and tile systems for the MH and industrial markets, for a net initial purchase price of $3.3 million plus contingent consideration based on future performance. The Company has recorded a preliminary fair value estimate of the contingent consideration of $5.1 million , which is included in the line item "Other long-term liabilities" on the consolidated statement of financial position as of December 31, 2017. As required, the liability for this contingent consideration will be measured quarterly at fair value and the Company could record adjustments in future periods. Baymont has operating facilities located in Golden, Mississippi and Belmont, Mississippi. The results of operations for Baymont are included in the Company’s consolidated financial statements and the Manufacturing operating segment from the date of acquisition. The preliminary purchase price allocation is subject to final review and approval, and thus all required purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its fair value estimates. Indiana Transport, Inc. (“Indiana Transport”) In November 2017, the Company acquired the business and certain assets of Elkhart, Indiana-based Indiana Transport, a transportation and logistics service provider primarily to OEMs and dealers in the RV market, for a net purchase price of $59.3 million . The results of operations for Indiana Transport are included in the Company’s consolidated financial statements and the Distribution operating segment from the date of acquisition. The preliminary purchase price allocation is subject to final review and approval, and thus all required purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its fair value estimates. LMI, Inc. and Related Companies (collectively, “LMI”) In November 2017, the Company acquired LMI, a designer, fabricator, and installer of specialty glass, mirror, bath and closet building products to residential housing and commercial high-rise builders, general contractors, retailers, and RV manufacturers in the U.S., for a net purchase price of $79.5 million . LMI is headquartered in Ontario, California and operates six manufacturing and distribution centers in California and Nevada and an additional manufacturing facility in China. The results of operations for LMI are included in the Company’s consolidated financial statements and the Manufacturing operating segment from the date of acquisition. The preliminary purchase price allocation is subject to final review and approval, and thus all required purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its fair value estimates. Nickell Moulding Company, Inc. (“Nickell”) In December 2017, the Company acquired the business and certain assets of Elkhart, Indiana-based Nickell, a manufacturer of hardwood and wrapped mouldings and trim, custom wood frames, and door components for the RV, retail and hospitality, MH, and other markets, for a net purchase price of $12.3 million . The results of operations for Nickell are included in the Company's consolidated financial statements and the Manufacturing operating segment from the date of acquisition. The preliminary purchase price allocation is subject to final review and approval, and thus all required purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its fair value estimates. 2016 Acquisitions Parkland Plastics, Inc. (“Parkland”) In February 2016, the Company acquired 100% of the outstanding capital stock of Middlebury, Indiana-based Parkland, a fully integrated designer and manufacturer of innovative polymer-based products including wall panels, lay-in ceiling panels, coated and rolled floors, protective moulding, and adhesives and accessories, used in a wide range of applications primarily in the RV, architectural and industrial markets, for a net purchase price of $25.2 million . The results of operations for Parkland are included in the Company’s consolidated financial statements and the Manufacturing operating segment from the date of acquisition. The Progressive Group (“Progressive”) In March 2016, the Company acquired the business and certain assets of Progressive, a distributor and manufacturer's representative for major name brand electronics to small, mid-size and large retailers, distributors, and custom installers, primarily serving the auto and home electronics, retail, custom integration and commercial channels, for a net purchase price of $10.9 million . Progressive has six distribution facilities located in Arizona, Colorado, Indiana, Michigan and Utah. The results of operations for Progressive are included in the Company’s consolidated financial statements and the Distribution operating segment from the date of acquisition. Cana Holdings, Inc. (“Cana”) In May 2016, the Company acquired the business and certain assets of Cana, a custom cabinetry manufacturer, primarily serving the MH industry and the residential, hospitality and institutional markets, for a net purchase price of $16.5 million . Cana has operating facilities located in Elkhart, Indiana and Americus, Georgia. The results of operations for Cana are included in the Company’s consolidated financial statements and the Manufacturing operating segment from the date of acquisition. Mishawaka Sheet Metal, LLC (“MSM”) In June 2016, the Company acquired the business and certain assets of Elkhart, Indiana-based MSM, a fabricator of a wide variety of aluminum and steel products primarily serving the RV and industrial markets, for a net purchase price of $14.0 million . The results of operations for MSM are included in the Company’s consolidated financial statements and the Manufacturing operating segment from the date of acquisition. Vacuplast, LLC d/b/a L.S. Manufacturing, Inc. (“LS Mfg.”) In July 2016, the Company acquired the business and certain assets of Elkhart, Indiana-based LS Mfg., a manufacturer of a wide variety of thermoformed plastic parts and components, primarily serving the RV industry, as well as certain industrial markets, for a net purchase price of $11.2 million . The results of operations for LS Mfg. are included in the Company’s consolidated financial statements and the Manufacturing operating segment from the date of acquisition. The purchase price allocation and all required purchase accounting adjustments were finalized in the first quarter of 2017, and resulted in changes from previously reported estimated amounts as of December 31, 2016 that include a $0.6 million increase to intangible assets with a corresponding decrease of $0.6 million to goodwill. There was no material impact to the consolidated statement of income related to these changes in 2017. BH Electronics, Inc. (“BHE”) In July 2016, the Company acquired 100% of the outstanding capital stock of BHE, a major designer, engineer and manufacturer of custom thermoformed dash panel assemblies, center consoles and trim panels, complete electrical systems, and related components and parts, primarily for recreational boat manufacturers in the U.S., for a net purchase price of $35.0 million . BHE has operating facilities located in Tennessee and Georgia. The results of operations for BHE are included in the Company’s consolidated financial statements and the Manufacturing operating segment from the date of acquisition. The purchase price allocation and all required purchase accounting adjustments were finalized in the third quarter of 2017, and resulted in changes from previously reported estimated amounts as of December 31, 2016 that include a $1.1 million and $2.3 million increase to property, plant and equipment and to intangible assets, respectively, with a corresponding decrease of $2.1 million to goodwill and a $1.3 million increase to the deferred tax liability. There was no material impact to the consolidated statement of income related to these changes in 2017. Sigma Wire International, LLC / KRA International, LLC (together “Sigma/KRA”) In December 2016, the Company acquired the business and certain assets of Sigma, headquartered in Elkhart, Indiana, and KRA, headquartered in Mishawaka, Indiana. Sigma is a manufacturer of a wide range of PVC insulated wire and cable products primarily for the RV and marine markets. KRA, which operates primarily in the RV and industrial markets, is a manufacturer of wire harnesses and associated assemblies for RVs, commercial vehicles, lawn care equipment, marine products, the defense industry, and automotive aftermarket products. The Company acquired Sigma/KRA for a net purchase price of $26.1 million . The results of operations for Sigma/KRA are included in the Company’s consolidated financial statements and the Manufacturing operating segment from the date of acquisition. The purchase price allocation and all required purchase accounting adjustments were finalized in the fourth quarter of 2017, and resulted in changes from previously reported estimated amounts as of December 31, 2016 that include a $1.6 million increase to goodwill with a corresponding decrease of $1.3 million to intangible assets and a $0.2 million increase to accounts payable and accrued liabilities. There was no material impact to the consolidated statement of income related to these changes in 2017. 2015 Acquisitions Better Way Partners, LLC d/b/a Better Way Products (“Better Way”) In February 2015, the Company acquired the business and certain assets of Better Way, a manufacturer of fiberglass front and rear caps, marine helms and related fiberglass components primarily used in the RV, marine and transit vehicle markets, for a net purchase price of $40.5 million . Better Way has operating facilities located in New Paris, Bremen and Syracuse, Indiana. The results of operations for Better Way are included in the Company’s consolidated financial statements and the Manufacturing operating segment from the date of acquisition. Structural Composites of Indiana, Inc. (“SCI”) In May 2015, the Company acquired the business and certain assets of Ligonier, Indiana-based SCI, a manufacturer of large, custom molded fiberglass front and rear caps and roofs, primarily used in the RV market, and specialty fiberglass components for the transportation, marine and other industrial markets, for a net purchase price of $20.0 million . The results of operations for SCI are included in the Company’s consolidated financial statements and the Manufacturing operating segment from the date of acquisition. North American Forest Products, Inc. and North American Moulding, LLC (collectively, “North American”) In September 2015, the Company acquired the business and certain assets of Edwardsburg, Michigan-based North American, a manufacturer and distributor, primarily for the RV market, of profile wraps, custom mouldings, laminated panels and moulding products. This acquisition also provided the opportunity for the Company to expand into the softwoods lumber market through North American's operations as a manufacturer and supplier of raw and processed softwoods products, including lumber, panels, trusses, bow trusses, and industrial packaging materials, primarily used in the RV and MH industries. The Company acquired North American for a net purchase price of $79.7 million . The results of operations for North American are included in the Company’s consolidated financial statements and the Manufacturing operating segment from the date of acquisition. The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of the acquisition. The purchase price allocation in each acquisition is final except as noted in the discussion above: (thousands) Trade receivables Inventories Property, plant and equipment Prepaid expenses & other Intangible assets Goodwill Less: Accounts payable and accrued liabilities Less: Deferred tax liability Total net assets acquired 2017 Medallion $ 2,233 $ 2,605 $ 1,713 $ 118 $ 3,100 $ 1,342 $ 1,200 $ — $ 9,911 LPE 5,848 5,162 9,225 337 32,360 40,511 6,358 13,791 73,294 Wire Design 615 437 555 21 5,360 4,282 491 — 10,779 Baymont (1) — 1,205 1,750 — 2,241 3,212 50 — 8,358 Indiana Transport 6,385 — 3,550 1,309 31,390 19,272 2,558 — 59,348 LMI 11,063 9,143 4,000 984 36,110 26,492 8,316 — 79,476 Nickell 1,944 1,159 933 — 6,179 3,243 1,152 — 12,306 Other — 250 2,508 — — 828 124 — 3,462 2017 Totals $ 28,088 $ 19,961 $ 24,234 $ 2,769 $ 116,740 $ 99,182 $ 20,249 $ 13,791 $ 256,934 2016 Parkland $ 2,880 $ 5,280 $ 2,987 $ 86 $ 10,950 $ 5,175 $ 2,180 $ — $ 25,178 Progressive 996 3,074 100 61 6,010 2,980 2,344 — 10,877 Cana 646 1,151 5,840 29 7,065 2,927 1,135 — 16,523 MSM 2,017 1,592 2,521 12 7,855 984 965 — 14,016 LS Mfg. 620 1,382 265 — 6,315 2,772 154 — 11,200 BHE 2,922 3,801 1,794 — 21,140 15,716 1,508 8,865 35,000 Sigma/KRA 2,039 1,820 935 7 13,495 9,533 1,708 — 26,121 2016 Totals $ 12,120 $ 18,100 $ 14,442 $ 195 $ 72,830 $ 40,087 $ 9,994 $ 8,865 $ 138,915 2015 Better Way $ 4,901 $ 1,829 $ 3,907 $ 80 $ 20,030 $ 11,087 $ 1,349 $ — $ 40,485 SCI 1,407 482 750 5 9,535 8,596 734 — 20,041 North American 8,924 19,189 5,959 139 36,185 17,463 8,209 — 79,650 2015 Totals $ 15,232 $ 21,500 $ 10,616 $ 224 $ 65,750 $ 37,146 $ 10,292 $ — $ 140,176 (1) Total net assets acquired for Baymont include the preliminary estimated liability of $5.1 million pertaining to the fair value of the contingent consideration based on future performance. The actual net cash paid for the Baymont acquisition of $3.3 million is included in "Cash Flows from Investing Activities - Business Acquisitions" on the consolidated statement of cash flows for the year ended December 31, 2017. Pro Forma Information (Unaudited) The following pro forma information assumes the Medallion, LPE, Wire Design, Baymont, Indiana Transport, LMI and Nickell acquisitions (which were acquired in 2017) and the Parkland, Progressive, Cana, MSM, LS Mfg., BHE, and Sigma/KRA acquisitions (which were acquired in 2016) occurred as of the beginning of the year immediately preceding each such acquisition. The pro forma information contains the actual operating results of each of the 2017 and 2016 acquisitions, combined with the results prior to their respective acquisition dates, adjusted to reflect the pro forma impact of the acquisitions occurring as of the beginning of the year immediately preceding each such acquisition. The pro forma information includes financing and interest expense charges based on the actual incremental borrowings incurred in connection with each transaction as if it occurred as of the beginning of the year immediately preceding each such acquisition. In addition, the pro forma information includes amortization expense, in the aggregate, related to intangible assets acquired in connection with each transaction of $6.7 million and $13.2 million for the years ended December 31, 2017 and 2016 , respectively. (thousands except per share data) 2017 2016 Revenue $ 1,854,078 $ 1,556,781 Net income 98,394 74,239 Basic net income per common share 4.06 3.30 Diluted net income per common share 3.99 3.24 The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time, nor is it intended to be a projection of future results. |