Acquisitions

6 Months Ended

Oct. 31, 2023

During the six months ended October 31, 2023, the Company acquired 60 stores through a variety of transactions, pursuant to the terms and conditions of the individual asset purchase agreements. The majority of these acquisitions meet the criteria to be considered business combinations. The purchase price of the stores were determined using a discounted cash flow model on a location by location basis, and was paid in cash upon closing using available cash on hand.

The acquisitions were recorded in the financial statements by allocating the purchase price to the assets acquired, including intangible assets, and liabilities assumed, based on their estimated fair values at the acquisition date as determined by third party appraisals or internal estimates. Fair values were determined using Level 3 inputs, which are unobservable inputs that are not corroborated by market data. The excess of the cost of the acquisition over the net amounts assigned to the fair value of the assets acquired and the liabilities assumed is recorded as goodwill if the acquisition is considered to be a business combination. Goodwill of $4,325 was recognized as the result of the current period acquisitions and is primarily attributable to the location of the stores in relation to our footprint and expected synergies. All of the goodwill associated with these transactions will be deductible for income tax purposes over 15 years.

Acquisition-related transaction costs are recognized as period costs as incurred. The Company incurred total acquisition-related transaction costs of $3,053 for the six months ended October 31, 2023, which are recorded within operating expenses on the condensed consolidated statements of income.

The table below summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. We utilized a third-party valuation specialist to assist in valuing the other assets, leases, and majority of the property and equipment acquired. The valuations are still in process and, as a result amounts related to certain property and equipment, other assets, goodwill, deferred income taxes, and leases is considered provisional and is subject to change.


Assets acquired:
Inventories	$	6,048
Property and equipment	119,713
Deferred income taxes	126
Finance lease right-of-use assets	1,263
Operating lease right-of-use assets	4,548
Other assets	250
Goodwill	4,325
Total assets	136,273
Liabilities assumed:
Accrued expenses and other long-term liabilities	447
Finance lease liabilities	1,893
Operating lease liabilities	4,388
Total liabilities	6,728
Net assets acquired and total consideration paid	$	129,545

Payments for acquisition of businesses, net of cash acquired, on the condensed consolidated statements of cash flows includes payments made for acquisitions that are closing shortly after the quarter-end. These payments are included in other assets, net of amortization on the condensed consolidated balance sheets. Such payments are not included in the total consideration paid in the table above, as those acquisitions have not yet closed as of the end of the quarter.

The Company recognized approximately $14,984 and, $17,568 of revenue related to the acquired locations in the condensed consolidated statements of income for the three and six months ended October 31, 2023, respectively. The amount of net income related to the acquired locations was not material for the three and six months ended October 31, 2023.

Pro Forma Information

The following unaudited pro forma information presents a summary of our consolidated results of operations as if the transactions referenced above occurred at the beginning of the first fiscal year of the periods presented (amounts in thousands, except per share data):


	Three Months Ended October 31,				Six Months Ended October 31,
	2023		2022		2023		2022
Total revenue	$	4,113,565	$	4,046,707	$	8,043,200	$	8,580,418
Net income	159,139		138,353		329,705		290,080
Net income per common share
Basic	$	4.27	$	3.71	$	8.85	$	7.79
Diluted	4.25		3.69		8.80		7.74