Acquisitions (Tables)

9 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of Purchase Price Allocation of Purchase of Acquired Identifiable Assets, Liabilities Assumed and Goodwill

The table below outlines the purchase price allocation of the purchase for Midwest Grinding to the acquired identifiable assets and liabilities assumed as of June 30, 2024 (in $000’s):

Total purchase price			$	1,000
Accounts payable			1
Total consideration			1,001
Accounts receivable			152
Other current assets			71
Property and equipment			738
Intangible Assets
Customer relationships	$	16
Trade names	15
Non-compete agreement	9
Intangible assets			40
Total assets acquired			1,001
Total goodwill			$	—

The fair value of the purchase price components was approximately $14.1 million, as detailed below (in $000's):

Purchase price	$	11,758
Fair value of contingent consideration	2,000
Holdback	300
Net purchase price	$	14,058

The table below outlines the purchase price allocation, as revised, for the purchase of Central Steel to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):

Total purchase price		$	14,058
Accounts payable		464
Accrued liabilities		969
Total liabilities assumed		1,433
Total purchase price plus liabilities assumed		15,491
Cash		184
Accounts receivable		2,418
Inventory		2,425
Property and equipment		5,034
Intangible assets
Trade names	400
Customer relationships	900
Non-compete	825
Subtotal intangible assets		2,125
Other assets		476
Total assets acquired		12,662
Total goodwill		$	2,829

The fair value of the purchase price components was $1.4 million, as detailed below (in $000's):

Cash	$	1,034
Additional consideration	89
Holdback	300
Purchase price	$	1,423

The table below outlines the purchase price allocation of the purchase for CRO to the acquired identifiable assets, liabilities assumed and goodwill as of June 30, 2024 (in $000’s):

Total purchase price	$	1,423
Accounts payable	770
Accrued liabilities	1,298
Total liabilities assumed	2,068
Total consideration	3,491
Accounts receivable	259
Inventory	1,406
Property and equipment	261
Intangible assets	1,190
Other assets	286
Total assets acquired	3,402
Total goodwill	$	89

The fair value of the purchase price components outlined above was approximately $2.0 million, as detailed below (in $000's):

Cash	$	500
Deferred consideration	1,200
Earnout	301
Purchase price	$	2,001

The table below outlines the purchase price allocation of the purchase for Johnson to the acquired identifiable assets and liabilities assumed as of June 30, 2024 (in $000’s):

Total purchase price			$	2,001
Accounts payable			1,017
Accrued liabilities			1,141
Total liabilities assumed			2,158
Total consideration			4,159
Accounts receivable			1,252
Inventory			1,127
Property and equipment			157
Intangible assets
Customer relationships	$	1,301
Non-compete agreement	306
Subtotal intangible assets			1,607
Other assets			16
Total assets acquired			4,159
Total goodwill			$	—

The fair value of the purchase price components outlined above was $26.8 million due to fair value adjustments for the contingent consideration, cash acquired, and working capital adjustments, as detailed below (in $000’s):

Purchase price	$	25,000
Fair value of earnout	2,675
Cash from balance sheet	1,602
Working capital adjustment	(2,500)
Net purchase price	$	26,777

The table below outlines the purchase price allocation of the purchase for PMW to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):

Net purchase price	$	26,777
Accounts payable	10,788
Accrued liabilities	4,995
Total liabilities assumed	15,783
Total consideration	42,560
Cash	1,602
Accounts receivable	12,613
Inventory	6,266
Property and equipment	13,616
Intangible assets	3,600
Other assets	849
Total assets acquired	38,546
Total goodwill	$	4,014

The table below outlines the purchase price allocation, as revised, of the purchase for Flooring Liquidators to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):

Purchase price			$	78,700
Accounts payable			5,189
Accrued liabilities			10,700
Debt			60
Total liabilities assumed			15,949
Total consideration			94,649
Cash			9,131
Accounts receivable			4,824
Inventory			19,402
Property and equipment			4,643
Intangible assets
Trade names	$	13,275
Customer relationships	7,700
Non-compete agreements	1,625
Other	49
Subtotal intangible assets			22,649
Other			2,581
Total assets acquired			63,230
Total goodwill			$	31,419

Schedule of Asset Acquisition

The table below outlines the purchase price allocation of the purchase for Cal Coast to the acquired identifiable assets (in $000’s):

Property and equipment	$	35
Intangible assets
Customer relationships	785
Trade name	425
Non-compete agreement	55
Total intangible assets	1,265
Total assets acquired	$	1,300

Schedule of Disposal Groups, Including Discontinued Operations

On May 24, 2024, CRO entered into an asset purchase agreement with the original seller of Johnson under which the original seller agreed to purchase certain assets and assume certain obligations acquired by CRO under the original asset

purchase agreement. Consequently, CRO recorded a loss on deconsolidation of Johnson’s assets and liabilities of approximately $301,000, as detailed in the table below (in $000's):

Accounts payable and accrued liabilities		$	475
Earnout		307
Seller note		1,230
Lease liabilities		2,703
Total deconsolidation of liabilities		4,715
Inventory		613
Property and equipment		206
ROU assets		2,692
Intangible assets
Customer relationships	1,224
Non-compete agreement	281
Subtotal intangible assets		1,505
Total deconsolidation of assets		5,016
Total loss on deconsolidation		$	(301)

Schedule of Business Acquisitions, by Acquisition

The fair value of the purchase price components outlined above was $78.7 million due to fair value adjustments for the Note, and restricted stock, as detailed below (in $000's).

Purchase price	$	83,800
Fair value adjustment, sellers note	(3,300)
Fair value adjustment, restricted stock	(1,800)
Net purchase price	$	78,700

Schedule of Proforma Information for the Company

The table below presents selected proforma information for the Company for the three and nine-month periods ended June 30, 2023, assuming that the acquisition had occurred on October 1, 2022 (the beginning of the Company’s 2023 fiscal year), pursuant to ASC 805-10-50 (in $000's). This proforma information does not purport to represent what the actual results of operations of the Company would have been had the acquisition occurred on that date, nor does it purport to predict the results of operations for future periods.

	As Reported				Adjustments		Proforma
	Live Unaudited Three Months Ended June 30, 2023		Flooring Liquidators Unaudited Three Months Ended June 30, 2023		Adjustments(1)		Live for the Three Months Ended June 30, 2023
Net revenue	$	91,516	$	4,222			$	95,738
Net income	$	1,060	$	(2,188)	$	(300)	$	(1,428)
Earnings per basic common share	$	0.33					$	(0.45)
Earnings per basic diluted share	$	0.33					$	(0.45)

	As Reported				Adjustments		Proforma
	Live Unaudited Nine Months Ended June 30, 2023		Flooring Liquidators Unaudited Nine Months Ended June 30, 2023		Adjustments(1)		Live for the Nine Months Ended June 30, 2023
Net revenue	$	251,624	$	37,702			$	289,326
Net income	$	4,462	$	(1,033)	$	(2,226)	$	1,203
Earnings per basic common share	$	1.43					$	0.39
Earnings per basic diluted share	$	1.42					$	0.38

(1) Adjustments are related to adjustments made for the following:

•Amortization expense of definite-lived intangible assets has been adjusted based on the preliminary fair value at the acquisition date.

•Interest expense has been adjusted to include proforma interest expense that would have been incurred as a result of the acquisition financing obtained by the Company.

•Elimination of revenue and costs of revenue associated with sales between Flooring Liquidators and the Company prior to acquisition.