Business Combinations

6 Months Ended

Jul. 29, 2023

Business Combinations

Business Combinations

7.    Business Combinations: On September 19, 2022, we acquired JW Holdings, LLC and its subsidiaries (collectively “Johnny Was”) (the “Acquisition”). We accounted for this transaction as a business combination, which generally requires that we record the assets acquired and liabilities assumed at fair value as of the acquisition date.

The provisional estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed, including a reconciliation to the total purchase consideration, are as follows (in thousands):

	Provisional Amounts at January 28, 2023		Measurement Period Adjustments		Provisional Amounts at July 29, 2023
Cash and cash equivalents	$	7,296	$	—	$	7,296
Receivables		8,777		—		8,777
Inventories		23,434		—		23,434
Prepaid expenses and other assets		6,353		—		6,353
Property and equipment		21,108		—		21,108
Intangible assets		134,640		—		134,640
Goodwill		96,637		1,403		98,040
Operating lease assets		54,859		—		54,859
Accounts payable, accrued expenses and other liabilities		(34,777)		920		(33,857)
Non-current portion of operating lease liabilities		(47,009)		—		(47,009)
Purchase price	$	271,318	$	2,323	$	273,641

As of July 29, 2023, we considered these amounts to be provisional because we were still in the process of reviewing information to support the valuations of the assets acquired and liabilities assumed. We made measurement-period adjustments, as shown in the table above, that increased the amount of provisional goodwill by $1 million. We expect that goodwill will be deductible for income tax purposes.

Intangible assets allocated in connection with our preliminary purchase price allocation consisted of the following (in thousands):

		Johnny Was
	Useful life	acquisition
Finite lived intangible assets acquired, primarily consisting of customer relationships	8 - 13 years	$	56,740
Trade names and trademarks	Indefinite		77,900
		$	134,640

The following unaudited pro forma information presented below (in thousands, except per share data) shows the results of our operations for the Second Quarter of Fiscal 2022 and First Half of 2022 as if the acquisition of Johnny Was had occurred at the beginning of Fiscal 2021. The information presented below is for illustrative purposes only, is not indicative of results that would have been achieved if the acquisition had occurred as of that date and is not intended to be a projection of future results of operations. The following unaudited pro forma information has been prepared from historical financial statements for Johnny Was and us for the periods presented, including without limitation, purchase accounting adjustments, but excluding any seller specific management/advisory or similar expenses and any synergies or operating cost reductions that may be achieved from the combined operations in the future.

	Second Quarter Fiscal 2022				First Half Fiscal 2022
	Actual		Pro Forma		Actual		Pro Forma
Net sales	$	363,430	$	413,657	$	716,011	$	819,831
Earnings before income taxes	$	75,097	$	80,513	$	150,833	$	162,256
Net earnings	$	56,612	$	60,674	$	114,020	$	122,588
Earnings per share:
Basic	$	3.56	$	3.81	$	7.07	$	7.61
Diluted	$	3.49	$	3.74	$	6.94	$	7.46