Acquisitions

On December 28, 2012, the Company acquired all of the outstanding shares of Precision Dynamics Corporation ("PDC"), a manufacturer of identification products primarily for the healthcare sector headquartered in Valencia, California. PDC is reported within the Company's ID Solutions segment. Financing for this acquisition consisted of $220,000 from the Company's revolving loan agreement with a group of six banks and the balance from cash on hand. The Company has repaid a total of $205,000 of the borrowing, of which $24,000 was repaid during the three months ended October 31, 2013. The outstanding balance under the revolving loan agreement was $15,000 as of October 31, 2013.

The Company acquired PDC to create an anchor position in the healthcare sector, consistent with the Company's mission to identify and protect premises, products and people. PDC's large customer base, strong channels to market, and broad product offering provide a strong foundation to build upon PDC's market position.

The table below details a preliminary allocation of the PDC purchase price:



Fair values:		October 31, 2013
	Cash and cash equivalents	$	12,904
	Accounts receivable — net	21,178
	Total inventories	16,788
	Prepaid expenses and other current assets	4,232
	Goodwill	169,425
	Other intangible assets	109,300
	Other assets	483
	Property, plant and equipment	18,015
	Accounts payable	(9,921		)
	Wages and amounts withheld from employees	(4,234		)
	Taxes, other than income taxes	(600		)
	Accrued income taxes	(57		)
	Other current liabilities	(5,245		)
	Other long-term liabilities	(18,207		)
		314,061
	Less: cash acquired	(12,904		)
Fair value of total consideration		$	301,157

The final purchase price allocation is subject to the conclusion of various state and local tax filing determinations and other contingencies. The final valuation is expected to be completed as soon as is practicable but no later than 12 months after the closing date of the acquisition. The intangible assets consist of a customer relationship of $102,500, which is being amortized over a life of 10 years, and a definite-lived trademark of $6,800, which is being amortized over a life of 3 years. Of the total $169,425 in acquired goodwill, $57,374 is tax deductible, and $51,672of the total $109,300 in intangible assets is tax deductible.

The following table reflects the unaudited pro forma operating results of the Company for the three months ended October 31, 2013 and 2012, which give effect to the acquisition of PDC as if it had occurred at the beginning of fiscal 2012, after adjusting for the amortization of intangible assets, interest expense on acquisition debt, and income tax effects. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations which may occur in the future or that would have occurred had the acquisitions been effected on the date indicated, nor are they necessarily indicative of the Company's future results of operations.



	Three months ended October 31,
	2013		2012
Net sales, as reported	$	305,974	$	270,866
Net sales, pro forma	305,974		312,916
Earnings from continuing operations, as reported	17,423		25,785
Earnings from continuing operations, pro forma	17,423		26,689
Basic earnings from continuing operations per Class A Common Share, as reported	0.33		0.50
Basic earnings from continuing operations per Class A Common Share, pro forma	0.33		0.52
Diluted earnings from continuing operations per Class A Common Share, as reported	0.33		0.50
Diluted earnings from continuing operations per Class A Common Share, pro forma	0.33		0.52

Pro forma results for the three months ended October 31, 2012 were adjusted to include $323 in interest expense on acquisition debt and $554 in income tax benefit, and also includes $3,130 of pretax amortization expense related to intangible assets.