Acquisition of Destiny Homes

12 Months Ended

Mar. 28, 2020

On August 2, 2019, the Company purchased certain manufactured housing assets and assumed certain liabilities of Destiny Homes, which operates one manufacturing facility located in Moultrie, Georgia and produces and distributes manufactured and modular homes through a network of independent retailers in the Southeastern United States, further expanding the Company's reach. The transaction was accounted for as business combination and the results of operations have been included in the accompanying consolidated financial statements since the date of acquisition.

The acquisition-date fair value of the total consideration was $16.5 million, which is subject to future adjustments. The Company did not incur debt in connection with the purchase or subsequent operations.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands). Certain estimated values are not yet finalized and are subject to change, which could be significant. The allocation of the purchase price is still preliminary and will be finalized upon completion of the analysis of the fair values of Destiny Home's assets and specified liabilities. The Company will finalize the amounts recognized as we obtain the information necessary to complete the analysis. We expect to finalize these amounts as soon as possible but no later than one year from the acquisition date.



	August 2, 2019
Accounts receivable	$	659
Inventories	5,582
Property, plant and equipment, net	5,244
Other current assets	3,014
Intangible assets ⁽¹⁾	5,940
Total identifiable assets acquired	20,439
Accounts payable and accrued expenses and other liabilities	(6,141		)
Net identifiable assets acquired	14,298
Goodwill	2,170
Net assets acquired	$	16,468

(1) Includes $1.7 million assigned to trademarks and trade names, which are considered indefinite lived intangible assets and are not subject to amortization and $4.2 million assigned to a customer-related intangible subject to a useful life of 10 years amortized on a straight-line basis.

Since the acquisition date, Destiny Homes contributed net revenue of $30.1 million and increased consolidated Net income on the Company's Consolidated Statements of Comprehensive Income for the fiscal year ended March 28, 2020 by $843,000. Net income from the Destiny Homes acquisition included required purchase accounting adjustments whereby home product inventory is recorded at fair value upon acquisition. This had the effect of eliminating profits from the related home sales after the acquisition date.

Pro Forma Impact of Acquisition. The following table presents supplemental pro forma information as if the acquisition of Destiny Homes had occurred on April 2, 2017 (in thousands, except per share data):



	Year Ended
	March 28, 2020		March 30, 2019
Net revenue	$	1,073,008	$	1,010,559
Net income	75,621		73,219
Diluted net income per share	8.16		7.90