Acquisition (Notes)

6 Months Ended

Jan. 31, 2025

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Business Combination Disclosure

Acquisitions

On August 1, 2024, the Company acquired all of the outstanding shares of Gravotech. Headquartered in Lyon, France, Gravotech is a leader in the design, manufacture and distribution of innovative solutions for specialized engraving, marking and cutting, offering laser, mechanical engraving, scribing and dot peen capabilities across multiple industries. The acquisition of Gravotech expands the Company’s identification product offerings and research and development capabilities to include specialized direct part marking and engraving expertise. The acquisition was funded through cash on hand and borrowings under the Company’s existing credit agreement. Net sales and net loss attributable to Gravotech from the acquisition date through January 31, 2025 were $56,853 and $8,266, respectively. The net loss attributable to Gravotech is due to a non-recurring increase in cost of goods sold related to the fair value adjustment to inventory upon acquisition and amortization expense for intangible assets.

The preliminary purchase price allocation included goodwill of $69,936 of which $48,586 was assigned to the Americas & Asia segment and $21,350 was assigned to the Europe & Australia segment.

The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed at the date of the acquisition:

Cash and cash equivalents	$	7,469
Accounts receivable, net	23,697
Inventories	21,190
Prepaid expenses and other current assets	549
Property, plant and equipment — net	2,472
Goodwill	69,936
Other intangible assets	64,099
Operating lease assets	6,800
Other assets	1,034
Accounts payable	(17,353)
Accrued compensation and benefits	(9,106)
Taxes, other than income taxes	(6,680)
Accrued income taxes	(1,807)
Other current liabilities	(17,688)
Operating lease liabilities	(6,800)
Other liabilities	(6,729)
Net assets acquired	$	131,083
Less: cash acquired	(7,469)
Fair value of total consideration	$	123,614

The final purchase price allocation is subject to post-closing adjustments pursuant to the terms of the securities sale and purchase agreement, as well as the finalization of certain accounts, primarily intangible assets and deferred tax adjustments. The goodwill for this acquisition is not deductible for tax purposes.

The following table presents the unaudited pro forma operating results for the three and six months ended January 31, 2025 and 2024, reflecting the acquisition of Gravotech as if it had occurred at the beginning of fiscal year 2024. The unaudited pro forma operating results for the three and six months ended January 31, 2025 do not contain any adjustments to the accompanying condensed consolidated financial statements. The unaudited pro forma operating results for the three and six months ended January 31, 2024 include Gravotech’s normal operating results and pro forma adjustments to include cumulative expenses, net of tax, for the non-recurring fair value adjustment to inventory, amortization expense for acquired intangible assets and interest expense on acquisition-related debt. The unaudited pro forma operating results are presented for comparative purposes only and do not necessarily reflect future operating results or those that would have occurred had the acquisition been completed at the beginning of fiscal year 2024.

	Three months ended January 31,				Six months ended January 31,
	2025		2024		2025		2024
Net sales, pro forma	$	356,675	$	352,412	$	733,740	$	713,521
Net income, pro forma	40,334		43,384		87,117		86,918

On October 1, 2024, the Company acquired all of the outstanding shares of AB&R for $15,625, net of cash acquired. Based in Phoenix, Arizona, AB&R provides integrated solutions for asset tracking, inventory management, and workflow optimization using advanced identification and tracking technologies, including barcoding, radio frequency identification (“RFID”) and Internet of Things (“IoT”)-based systems. The acquisition was funded through cash on hand and borrowings under the Company’s existing credit agreement. The Company recorded its preliminary purchase price allocation during the first quarter of fiscal year 2025, based on its estimates of the fair value of the acquired assets and assumed liabilities at that time. The preliminary purchase price allocation included goodwill of $10,877, intangible assets of $4,600, and net tangible assets of $148. The goodwill for this acquisition is assigned to the Americas & Asia segment and is deductible for tax purposes. The final purchase price allocation is subject to post-closing adjustments and the finalization of certain intangible asset valuations and deferred tax adjustments, as well as potential contingent consideration subject to AB&R’s achievement of certain post-acquisition financial targets pursuant to the terms of the membership interest purchase agreement. Acquisition-related expenses of $305 were recognized in selling, general and administrative (“SG&A”) expenses during the six months ended January 31, 2025. The accompanying condensed consolidated financial statements include the results of AB&R from the date of acquisition through January 31, 2025. Pro forma and other financial information are not presented for the AB&R acquisition because its impact on the Company's results of operation and financial position is immaterial.