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 $211,000 of the borrowing, of which $30,000 was repaid during the six months ended January 31, 2014. The outstanding balance under the revolving loan agreement was $9,000 as of January 31, 2014.

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 the final allocation of the PDC purchase price:



Fair values:		January 31, 2014
	Cash and cash equivalents	$	12,904
	Accounts receivable — net	21,178
	Total inventories	16,788
	Prepaid expenses and other current assets	4,233
	Goodwill	168,150
	Other intangible assets	109,300
	Other assets	483
	Property, plant and equipment	18,015
	Accounts payable	(10,060		)
	Wages and amounts withheld from employees	(4,234		)
	Taxes, other than income taxes	(600		)
	Accrued income taxes	(57		)
	Other current liabilities	(5,181		)
	Other long-term liabilities	(16,858		)
		314,061
	Less: cash acquired	(12,904		)
Fair value of total consideration		$	301,157

The final valuation was completed during the three months ended January 31, 2014. 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 $168,150 in acquired goodwill, $57,374 is tax deductible, and $51,672 of 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 six months ended January 31, 2014 and 2013, 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 January 31,					Six months ended January 31,
	2014		2013			2014		2013
Net sales, as reported	$	291,194	$	272,702		$	598,724	$	544,717
Net sales, pro forma	291,194		299,077			598,724		613,142
Earnings (loss) from continuing operations, as reported	10,517		(10,671		)	28,652		15,620
Earnings (loss) from continuing operations, pro forma	10,517		(7,275		)	28,652		19,920
Basic earnings (loss) from continuing operations per Class A Common Share, as reported	$	0.20	$	(0.21	)	$	0.55	$	0.30
Basic earnings (loss) from continuing operations per Class A Common Share, pro forma	$	0.20	$	(0.14	)	$	0.55	$	0.39
Diluted earnings (loss) from continuing operations per Class A Common Share, as reported	$	0.20	$	(0.21	)	$	0.55	$	0.30
Diluted earnings (loss) from continuing operations per Class A Common Share, pro forma	$	0.20	$	(0.14	)	$	0.55	$	0.39

Pro forma results for the three months ended January 31, 2013, were adjusted to exclude $3,600 of acquisition-related expenses and $1,530 of nonrecurring expense related to the fair value adjustment to acquisition-date inventory, and were adjusted to include $320 in interest expense on acquisition debt and $564 of income tax expense. Pro forma results for the six months ended January 31, 2013, were adjusted to exclude $3,600 of acquisition-related expenses and $1,530 of nonrecurring expense related to the fair value adjustment to acquisition-date inventory, and were adjusted to include $529 in interest expense on acquisition debt and $135 in income tax benefit.

Pro forma results for each of the three and six months ended January 31, 2013 include $3,104 and $6,208 of pretax amortization expense related to intangible assets, respectively.