ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

Acquisitions in 2014

Duncan Systems, Inc.

On August 15, 2014, the Company acquired the business and certain assets of Duncan Systems, Inc. ("Duncan Systems"), an aftermarket distributor of replacement motorhome windshields, awnings, and RV, heavy truck and specialty vehicle glass and windows, primarily to fulfill insurance claims. Sales of Duncan Systems for the twelve months ended July 2014 were approximately $26 million. The purchase price was $18.0 million paid at closing, plus contingent consideration based on future sales of this operation. The results of the acquired business have been included in the Company's RV Segment and in the Condensed Consolidated Statements of Income since the acquisition date.

The acquisition of this business was preliminarily recorded on the acquisition date as follows (in thousands):



Cash consideration	$	18,000
Contingent consideration	1,914
Total fair value of consideration given	$	19,914

Customer relationships	$	10,500
Other identifiable intangible assets	1,230
Net tangible assets	4,088
Total fair value of net assets acquired	$	15,818

Goodwill (tax deductible)	$	4,096

The customer relationships intangible asset is being amortized over its estimated useful life of 14 years. The consideration given was greater than the fair value of the assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in market share for the distributed products.

Power Gear and Kwikee Brands

On June 13, 2014, the Company acquired the RV business of Actuant Corporation, which manufactures leveling systems, slideout mechanisms and steps, primarily for motorhome RVs, under the Power Gear and Kwikee brands. Sales of the acquired business for the twelve months ended May 2014 were approximately $28 million, consisting of sales to OEMs and the aftermarket. The purchase price was $35.5 million, paid at closing. The results of the acquired business have been included in the Company's RV Segment and in the Condensed Consolidated Statements of Income since the acquisition date.

The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	35,500

Customer relationships	$	12,300
Patents	5,300
Other identifiable intangible assets	2,130
Net tangible assets	2,227
Total fair value of net assets acquired	$	21,957

Goodwill (tax deductible)	$	13,543

The customer relationships intangible asset is being amortized over its estimated useful life of 14 years and the patents are being amortized over their estimated useful life of 8 years. The consideration given was greater than the fair value of the assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products.

Star Design, LLC

On March 14, 2014, the Company acquired the business and certain assets of Star Design, LLC ("Star Design"). Star Design had annual sales of approximately $10 million in 2013, comprised primarily of thermoformed sheet plastic products for the RV, bus and specialty vehicle industries. The purchase price was $12.2 million paid at closing. The results of the acquired business have been included in the Company's RV Segment and in the Condensed Consolidated Statements of Income since the acquisition date.

The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	12,232

Customer relationships	$	4,400
Other identifiable intangible assets	610
Net tangible assets	2,108
Total fair value of net assets acquired	$	7,118

Goodwill (tax deductible)	$	5,114

The customer relationships intangible asset is being amortized over its estimated useful life of 14 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates leveraging its existing experience and manufacturing capacity with respect to these product lines, and also believes the diversified customer base will further its expansion into adjacent industries.

Innovative Design Solutions, Inc.

On February 27, 2014, the Company acquired Innovative Design Solutions, Inc. (“IDS”), a designer, developer and manufacturer of electronic systems encompassing a wide variety of RV applications. IDS also manufactures electronic systems for automotive, medical and industrial applications. IDS had annual sales of approximately $19 million in 2013, of which $13 million were to the Company. The purchase price was $35.9 million, of which $34.2 million was paid at closing, with the balance to be paid out annually over the subsequent three years, plus contingent consideration based on future sales of this operation. The results of the acquired business have been included in the Company's RV Segment and in the Condensed Consolidated Statements of Income since the acquisition date.

The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	34,175
Present value of future payments	1,739
Contingent consideration	710
Total fair value of consideration given	$	36,624

Patents	$	6,000
Customer relationships	4,000
Other identifiable intangible assets	3,130
Net tangible assets	1,944
Total fair value of net assets acquired	$	15,074

Goodwill (tax deductible)	$	21,550

The patents are being amortized over their estimated useful life of 10 years and the customer relationships intangible asset is being amortized over its estimated useful life of 12 years. The consideration given was greater than the fair value of the assets acquired, resulting in goodwill, because the Company anticipates an increase in the markets for the acquired products, market share growth in both existing and new markets, as well as attainment of synergies.

Acquisitions in 2013

Midstates Tool & Die and Engineering, Inc.

On June 24, 2013, the Company acquired the business and certain assets of Midstates Tool & Die and Engineering, Inc. (“Midstates”). Midstates is a manufacturer of tools and dies, as well as automation equipment. The acquired business had annualized sales of approximately $2 million. The results of the acquired business have been included in the Company's RV Segment and in the Condensed Consolidated Statements of Income since the acquisition date.

The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	1,451

Non-compete agreement	$	40
Net tangible assets	1,043
Total fair value of net assets acquired	$	1,083

Goodwill (tax deductible)	$	368

The consideration given was greater than the fair value of assets acquired, resulting in goodwill, because the Company anticipates the tool and die and automation capabilities of the acquired business will help improve its operating efficiencies.

Sale of Extrusion Assets

In April 2014, the Company entered into a six-year aluminum extrusion supply agreement, and concurrently sold certain aluminum extrusion assets. The Company recorded a pre-tax loss of $2.0 million in the second quarter of 2014 on the sale of the aluminum extrusion-related assets. In connection with the sale, the Company received $0.3 million at closing and a $7.2 million note receivable payable over the next four years, recorded at its present value of $6.4 million on the date of closing. During the second quarter of 2014, the Company received the first installment of $0.8 million under the note. At September 30, 2014, the present value of the remaining amount due under the note receivable was $5.8 million.

Goodwill

Goodwill by reportable segment was as follows:



(In thousands)	RV Segment			MH Segment			Total
Accumulated cost – December 31, 2013	$	62,047		$	10,025		$	72,072
Accumulated impairment – December 31, 2013	(41,276		)	(9,251		)	(50,527		)
Net balance – December 31, 2013	20,771			774			21,545
Acquisitions – 2014	44,658			—			44,658
Net balance – September 30, 2014	$	65,429		$	774		$	66,203

Goodwill represents the excess of the total consideration given in an acquisition of a business over the fair value of the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but instead is tested at the reporting unit level for impairment annually in November, or more frequently if certain circumstances indicate a possible impairment may exist. No impairment tests were required or performed during the nine months ended September 30, 2014.

Other Intangible Assets

Other intangible assets consisted of the following at September 30, 2014:



(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	81,261	$	25,825	$	55,436	6	to	16
Patents	52,167		20,936		31,231		3	to	19
Tradenames	9,473		4,237		5,236		3	to	15
Non-compete agreements	3,948		2,051		1,897		3	to	6
Other	360		72		288		2	to	12
Purchased research and development	6,697		—		6,697		Indefinite
Other intangible assets	$	153,906	$	53,121	$	100,785

Other intangible assets consisted of the following at December 31, 2013:



(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	50,105	$	21,999	$	28,106	6	to	16
Patents	41,651		18,461		23,190		3	to	19
Tradenames	7,959		5,976		1,983		5	to	15
Non-compete agreements	3,866		2,210		1,656		3	to	6
Purchased research and development	4,457		—		4,457		Indefinite
Other intangible assets	$	108,038	$	48,646	$	59,392