XML 63 R37.htm IDEA: XBRL DOCUMENT v3.21.2
Acquisitions (Narratives) (Details) - USD ($)
 3 Months Ended 6 Months Ended
Apr. 07, 2021
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Mar. 31, 2021
Business Acquisition [Line Items]            
Restructuring, Impairment, and Other Activities Disclosure      
2.    Acquisitions & Disposals
 
Acquisitions

On April 7, 2021, the Company completed its acquisition of Dorner Mfg. Corp. ("Dorner") for $481,012,000. Dorner, headquartered in Hartland, WI, is a leading automation solutions company providing unique, patented technologies in the design, application, manufacturing and integration of high-precision conveying systems. The acquisition of Dorner accelerates the Company’s shift to intelligent motion and serves as a platform to expand capabilities in advanced, higher technology automation solutions. Dorner is a leading supplier to the life sciences, food processing, and consumer packaged goods markets as well as the faster growing industrial automation and e-commerce sectors.

The results of Dorner included in the Company’s consolidated financial statements from the date of acquisition are Net sales and Income from operations of $33,539,000 and $3,161,000, respectively, in the three months ended September 30, 2021 and Net sales and Income from operations of $67,718,000 and $4,324,000, respectively, in the six months ended September 30, 2021. Dorner's Income from operations in the three and six months ended September 30, 2021 includes $218,000 in integration related severance costs, which have been included in General and administrative expenses. Dorner's Income from operations in the six months ended September 30, 2021 includes acquisition related inventory amortization of $2,981,000, which has been included in Cost of products sold.

In addition, the Company incurred acquisition integration and deal expenses in the amount of $414,000 and $8,686,000 in the three and six months ended September 30, 2021, respectively, which are included in General and administrative expenses. The Company also incurred $970,000 in costs related to a transaction bonus that was paid 45 days after the acquisition date to key personnel of which $521,000 has been recorded as part of Cost of products sold, $350,000 has been recorded as part of Selling expenses, $74,000 has been recorded as part of General and administrative expenses, and $25,000 has been recorded as part of Research and development expenses in the six months ended September 30, 2021.

To finance the Dorner acquisition, on April 7, 2021 the Company entered into a $750,000,000 credit facility ("First Lien Facilities") with JPMorgan Chase Bank, N.A. ("JPMorgan Chase Bank"), PNC Capital Markets LLC, and Wells Fargo Securities LLC. The First Lien Facilities consist of a Revolving Facility (the “New Revolving Credit Facility”) in an aggregate amount of $100,000,000 and a $650,000,000 First Lien Term Facility ("Bridge Facility"). Proceeds from the Bridge Facility were used, among other things, to finance the purchase price for the Dorner acquisition, pay related fees, expenses and
transaction costs, and refinance the Company's borrowings under its prior Term Loan and Revolver. See Note 9, Debt, for further details on the Company's new debt agreement and subsequent equity offering.

The purchase price has been preliminarily allocated to the assets acquired and liabilities assumed as of the date of acquisition. The excess consideration of $286,640,000 has been preliminarily recorded as goodwill as of September 30, 2021. During the three months ended September 30, 2021, the Company received cash in the amount of $2,357,000 from the former owner of Dorner as a result of a working capital adjustment, which is the primary reason for the reduction in goodwill and the purchase price from amounts reported as of June 30, 2021. The identifiable intangible assets acquired include customer relationships of $140,000,000, technology of $45,000,000, and trade names of $8,000,000. The weighted average life of the acquired identifiable intangible assets subject to amortization was estimated at 15 years at the time of acquisition. Approximately $8,000,000 of goodwill arising as a result of the acquisition is deductible for tax purposes. The allocation of the purchase price to the assets acquired and liabilities assumed of Dorner is not complete as of September 30, 2021 as the Company is continuing to gather information regarding Dorner's contingent liabilities and intangible assets.

The preliminary assignment of purchase consideration to the assets acquired and liabilities assumed is as follows (in thousands):

Cash$8,058 
Working Capital24,512 
Property, plant, and equipment, net26,104 
Intangible assets193,000 
Other assets658 
Other liabilities(3,734)
Finance lease liabilities(14,582)
Deferred taxes, net(39,644)
Goodwill286,640 
Total$481,012 

See Note 4 for assumptions used in determining the fair values of the intangible assets acquired.

The following unaudited pro forma financial information presents the combined results of operations as if the acquisition of Dorner had occurred as of April 1, 2020. The pro forma information includes certain adjustments, including depreciation and amortization expense, interest expense, and certain other adjustments, together with related income tax effects. The pro forma amounts may not be indicative of the results that actually would have been achieved had the acquisition of Dorner occurred as of April 1, 2020 and are not necessarily indicative of future results of the combined companies (in thousands):

Three months endedSix months ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020
Net sales$223,635 $201,589 $437,099 $363,668 
Net income (loss)18,952 8,286 31,946 (24,780)

Disposals
During the three months ended September 30, 2021, the Company sold its former manufacturing facility in Lisbon, Ohio for $461,000. This resulted in a gain of $375,000 which is included in Cost of products sold on the Condensed Consolidated Statements of Operations.
During fiscal 2021, the Company sold one of its owned manufacturing facilities in China as a result of its plan to consolidate two of its Hangzhou, China manufacturing facilities into one and reorganize its Asia Pacific operations. During the six months ended September 30, 2020, the Company received cash in the amount of 45 million RMB (approximately $6,363,000) from the buyer to purchase the facility which resulted in a gain of $2,638,000, of which $2,189,000 is included in Cost of products sold and $449,000 is included in General and administrative expenses on the Condensed Consolidated Statements of Operations during the three and six months ended September 30, 2020.
    
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination  
The preliminary assignment of purchase consideration to the assets acquired and liabilities assumed is as follows (in thousands):

Cash$8,058 
Working Capital24,512 
Property, plant, and equipment, net26,104 
Intangible assets193,000 
Other assets658 
Other liabilities(3,734)
Finance lease liabilities(14,582)
Deferred taxes, net(39,644)
Goodwill286,640 
Total$481,012 
        
Business Acquisition, Pro Forma Information  
Three months endedSix months ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020
Net sales$223,635 $201,589 $437,099 $363,668 
Net income (loss)18,952 8,286 31,946 (24,780)
        
Gain (Loss) on Disposition of Property Plant Equipment       $ 375,000 $ 2,638,000  
Bridge Loan   $ 650,000,000   650,000,000    
Line of Credit Facility, Maximum Borrowing Capacity   100,000,000   100,000,000    
Payments to Acquire Businesses, Net of Cash Acquired $ 481,012,000          
Business Acquisition, Pro Forma Revenue   223,635,000 $ 201,589,000 437,099,000 363,668,000  
Business Acquisition, Pro Forma Net Income (Loss)   18,952,000 8,286,000 $ 31,946,000 (24,780,000)  
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life 15 years     17 years    
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents $ 8,058,000          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets 24,512,000          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles 193,000,000          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment 26,104,000          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets 658,000          
Business Combination, Recognized Identifiable Asset Acquired and Liability Assumed, Lease Obligation (14,582,000)          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities (39,644,000)          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other $ (3,734,000)          
Deferred Compensation Arrangement with Individual, Compensation Expense       $ 970,000    
Deferred Compensation Arrangement with Individual, Requisite Service Period       45 years    
Revenue from Contract with Customer, Excluding Assessed Tax   223,635,000 157,790,000 $ 437,099,000 296,860,000  
Operating Income (Loss)   23,660,000 15,820,000 34,406,000 17,609,000  
Cost of Goods and Services Sold   142,500,000 $ 101,765,000 281,901,000 196,038,000  
Proceeds from Sales of Assets, Investing Activities   461,000   461,000 5,453,000  
Goodwill   615,329,000   615,329,000   $ 331,176,000
Acquisition Costs, Period Cost   414,000   8,686,000    
Goodwill, Purchase Accounting Adjustments   2,357,000        
Dorner            
Business Acquisition [Line Items]            
Revenue from Contract with Customer, Excluding Assessed Tax   33,539,000   67,718,000    
Operating Income (Loss)   3,161,000   4,324,000    
Cost of Goods and Services Sold       2,981,000    
Business Acquisition, Goodwill, Expected Tax Deductible Amount   8,000,000   8,000,000    
Severance Costs       218,000    
Cost of Goods and Service, Product and Service Benchmark            
Business Acquisition [Line Items]            
Deferred Compensation Arrangement with Individual, Compensation Expense       521,000    
Selling and Marketing Expense [Member]            
Business Acquisition [Line Items]            
Deferred Compensation Arrangement with Individual, Compensation Expense       350,000    
General and Administrative Expense [Member]            
Business Acquisition [Line Items]            
Deferred Compensation Arrangement with Individual, Compensation Expense       74,000    
Research and Development Expense            
Business Acquisition [Line Items]            
Deferred Compensation Arrangement with Individual, Compensation Expense       $ 25,000    
Other            
Business Acquisition [Line Items]            
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life       5 years    
Trade Names            
Business Acquisition [Line Items]            
Indefinite-lived Intangible Assets Acquired   8,000,000        
Technology-Based Intangible Assets [Member]            
Business Acquisition [Line Items]            
Indefinite-lived Intangible Assets Acquired   45,000,000        
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life       16 years    
Customer relationships            
Business Acquisition [Line Items]            
Indefinite-lived Intangible Assets Acquired   $ 140,000,000        
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life       17 years    
Office Building [Member]            
Business Acquisition [Line Items]            
Proceeds from Sale of Buildings         6,363,000  
Office Building [Member] | China, Yuan Renminbi            
Business Acquisition [Line Items]            
Proceeds from Sale of Buildings         45  
Cost of Sales [Member]            
Business Acquisition [Line Items]            
Gain (Loss) on Disposition of Property Plant Equipment         (2,189,000)  
General and Administrative Expense [Member]            
Business Acquisition [Line Items]            
Gain (Loss) on Disposition of Property Plant Equipment         $ (449,000)