Note 4 - Acquisition of Royston Group

12 Months Ended

Jun. 30, 2026

Royston [Member]

Notes to Financial Statements

Business Combination [Text Block]

NOTE 4 — ACQUISITION OF ROYSTON GROUP

On February 20, 2026 the Company entered into an agreement and a plan of merger to acquire SRR Holdings, Inc. (Royston) which was completed on March 24, 2026.  Royston is a leading U.S.-based designer and manufacturer of cabinetry and store fixtures, refrigerated and heated cases, and signage for multiple end markets. Royston’s customer base spans across large, attractive end-markets of convenience, grocery and gas stations and other retail.  Royston was acquired for $325.0 million; $320.0 million in cash and $5.0 million in the Company’s common stock, subject to a working capital adjustment. The Company prefunded $13.2 million as an estimate of the cash and working capital acquired which brings the total purchase consideration to $338.2 million. The amount prefunded for cash and working capital will be adjusted in the first quarter of 2027 fiscal year to reflect the actual amounts acquired. The Company incurred acquisition-related costs totaling $9.9 million which are included in the selling and administrative expense line of the consolidated statements of operations. The Company funded the initial purchase consideration totaling $338.2 million with a combination of cash on hand, the $150.0 million revolving line of credit, the $200.0 million five-year term loan, and the $98.1 million of net proceeds from the Company’s February 26, 2026 public common stock offering.

The Company accounted for this transaction as a business combination. The Company has preliminarily allocated the purchase price of $338.2 million, which includes an estimate of customary post-closing purchase price adjustments to the assets acquired and liabilities assumed at estimated fair values, and the excess of the purchase price over the aggregate fair values is recorded as goodwill. This preliminary allocation is subject to the final determination of the purchase price which will be finalized in fiscal 2027, as well as potential revision resulting from the finalization of pre-acquisition tax filings and net working capital adjustments. The Company has finalized the third-party valuations of certain assets including fixed assets and intangible assets. The allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed as of March 24, 2026, is as follows:

				Measurement
	March 24, 2026			period			March 24, 2026
(In thousands)	as reported			adjustments			as adjusted
Cash and cash equivalents	$	1,353		$	-		$	1,353
Accounts receivable		36,990			(514	)		36,476
Inventory		32,400			(2,992	)		29,408
Property, plant and equipment		28,500			464			28,964
Prepaid expenses and other current assets		8,135			-			8,135
Income tax provision refund		1,792			450			2,242
Operating lease right-of-use assets		22,538			-			22,538
Other assets		1,291			-			1,291
Intangible assets		127,000			52,940			179,940
Accounts payable		(16,861	)		-			(16,861	)
Accrued expenses		(18,558	)		66			(18,492	)
Operating lease liabilities		(19,638	)		-			(19,638	)
Deferred tax liability		(10,919	)		(14,386	)		(25,305	)
Identifiable assets		194,023			36,028			230,051
Goodwill		144,176			(36,028	)		108,148
Net purchase consideration	$	338,199		$	-		$	338,199

The gross amount of accounts receivable is $37.2 million.

Goodwill recorded from the acquisition of Royston is attributable to the impact of the positive cash flow from Royston in addition to expected synergies from the business combination. The intangible assets include amounts recognized for the fair value of the trade name, technology assets, and customer relationships. The fair value of the intangible assets was determined based upon the income (discounted cash flow) approach. The following table presents the details of the intangible assets acquired at the date of acquisition:

	Estimated Fair		Estimated Useful
	Value		Life (Years)
(in thousands)
Tradename	$	23,780	Indefinite life
Technology assets		12,160		7
Customer relationships		144,000		20
	$	179,940

Royston’s post-acquisition results of operations for the period from March 24, 2026, through June 30, 2026, are included in the Company’s Condensed Consolidated Statements of Operations. Since the acquisition date, net sales of Royston for the period from March 24, 2026, through June 30, 2026, were $73.5 million and operating income was $2.4 million. The operating results of Royston are included in the Display Solutions Segment.

Pro Forma Impact of the Acquisition of Royston (Unaudited)

The following table represents unaudited pro forma results of operations and gives effect to the acquisition of Royston as if the transaction had occurred on July 1, 2023. The unaudited pro forma results of operations have been prepared for comparative purposes only and are not necessarily indicative of what would have occurred had the business combination been completed at the beginning of the period or the results that may occur in the future. Furthermore, the unaudited pro forma financial information does not reflect the impact of any synergies or operating efficiencies resulting from the acquisition of Royston.

The unaudited pro forma financial information for the twelve months ended June 30, 2026, 2025 and 2024, is prepared using the acquisition method of accounting and has been adjusted to reflect the pro forma events that are: (1) directly attributable to the acquisition; (2) factually supportable; and (3) expected to have a continuing impact on the combined results. The unaudited pro forma operating income for the twelve months ended June 30, 2026 of $48.4 million includes acquisition-related expenses of $21.8 million. 

	Twelve Months Ended
	June 30
(in thousands; unaudited)	2026		2025		2024
Sales	$	872,167	$	844,489	$	750,149
Gross Profit	$	213,437	$	208,906	$	196,006
Operating Income	$	48,424	$	56,590	$	56,344

Note: The pro forma results presented above exclude the pro forma results related to the acquisition of Canada's Best Holding and EMI Industries, LLC. Including the pro forma results of these acquisitions would allow for a meaningful year-over-year comparison.