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Note 2 - Acquisition of M.C.Healthcare Products Inc.
 12 Months Ended
Sep. 27, 2014
Notes to Financial Statements  
Business Combination Disclosure [Text Block]
2.
ACQUISITION OF M.C. HEALTHCARE PRODUCTS INC.
 
On December 9, 2011, we acquired, through a new wholly-owned subsidiary, substantially all of the assets of M.C. Healthcare Products Inc. (“Old M.C. Healthcare”) for approximately $9,800,000, including cash of approximately $7,980,000 at the time of closing and approximately $354,000 for the post-closing working capital adjustment, paid in January 2012, plus 100,000 shares of Span-America common stock valued at approximately $1,441,000. M.C. Healthcare manufactures medical bed frames and related products. We funded the acquisition through a combination of cash on hand, proceeds from the sale of securities available for sale and proceeds of approximately $6,500,000 from our revolving credit facility. No cash was acquired. The excess of the consideration transferred over the net tangible and intangible assets was reflected as goodwill of approximately $2,500,000.
 
 
The allocation of the total consideration to the fair value of the assets acquired and liabilities assumed in U.S. dollars as of December 9, 2011 was as follows:
 
Receivables
   $ 1,800,000  
Inventories
     2,210,000  
Intangibles
     3,980,000  
Other current assets
     60,000  
Equipment
     300,000  
Goodwill
     2,530,000  
Liabilities assumed
     (1,070,000 )
Contingent consideration
     (70,000 )
Deferred tax liability
     (50,000 )
    $ 9,690,000  
 
 
The following table shows the net revenues and operating income that M.C. Healthcare contributed for the fiscal years ended 2014, 2013 and 2012. The information for fiscal 2012 includes the period from December 9, 2011, the date of the acquisition, through the fiscal year-end on September 29, 2012. These results are included in the Consolidated Financial Statements.
 
 
 
2014
 
  
2013
    
2012
  
Net revenues
 
$
9,721,000
 
   $ 11,305,000     $ 10,284,000  
Operating income (loss)
 
$
(237,000
)
   $ 245,000     $ 964,000  
 
Pro-forma information is shown below for fiscal year 2012 as if the purchase had occurred at the beginning of the fiscal year on October 2, 2011. See the Form 8-K/A filed on February 24, 2012 for additional information.
 
   
2012
  
Pro-forma net revenues
   $ 78,540,000  
Pro-forma net income
     5,350,000  
Pro-forma net income per diluted share
   $ 1.81