Acquisitions, Goodwill And Other Intangible Assets

9 Months Ended

Sep. 30, 2016

Acquisitions, Goodwill And Other Intangible Assets [Abstract]

Goodwill And Other Intangible Assets

ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

Acquisitions During the Nine Months EndedSeptember 30, 2016 and Subsequent

Atwood Seating and Chassis Components

In October 2016, the Company agreed to acquire the business, manufacturing facility and certain assets of the seating and chassis components business of Atwood Mobile Products, LLC (“Atwood”), a subsidiary of Dometic Group. Net sales of the business in 2015 were approximately $30 million. The purchase price is $12.5 million, and will be paid in cash at closing.

Project 2000 S.r.l.

In May 2016, the Company acquired 100 percent of the equity interest of Project 2000 S.r.l. (“Project 2000”), an Italy-based manufacturer of innovative, space-saving bed lifts and retractable steps. Net sales reported by Project 2000 for 2015 were approximately $12 million. The purchase price was $18.8 million paid at closing, plus contingent consideration based on future sales by this operation. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Condensed Consolidated Statements of Income since the acquisition date. The Company is validating account balances and finalizing the valuation for the acquisition. The acquisition of this business was preliminarily recorded on the acquisition date as follows (in thousands):

Cash consideration net of cash acquired	$	16,137
Contingent consideration	1,322
Total fair value of consideration given	$	17,459
Customer relationships	$	6,925
Net other assets	2,533
Total fair value of net assets acquired	$	9,458
Goodwill (not tax deductible)	$	8,001

The customer relationships intangible asset is being amortized over its preliminary estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products.

Flair Interiors

In February 2016, the Company acquired the business and certain assets of Flair Interiors, Inc. (“Flair”), a manufacturer of RV furniture. Net sales reported by Flair for 2015 were approximately $25 million. The purchase price was $8.1 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM 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	$	8,100
Customer relationships	$	3,700
Net other assets	2,378
Total fair value of net assets acquired	$	6,078
Goodwill (tax deductible)	$	2,022

The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products.

Highwater Marine Furniture

In January 2016, the Company acquired the business and certain assets of the pontoon furniture manufacturing operation of Highwater Marine, LLC (“Highwater”), a leading manufacturer of pontoon and other recreational boats located in Elkhart, Indiana. Estimated 2015 net sales of the marine furniture business were approximately $20 million. The purchase price was $10.0 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM 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	$	10,000
Customer relationships	$	8,100
Net tangible assets	1,307
Total fair value of net assets acquired	$	9,407
Goodwill (tax deductible)	$	593

The customer relationships intangible asset is being amortized over its estimated useful life of 15 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.

Acquisitions During the Nine Months EndedSeptember 30, 2015

Signature Seating

In August 2015, the Company acquired the business and certain assets of Roehm Marine, LLC, also known as Signature Seating (“Signature”), a manufacturer of furniture solutions for fresh water boat manufacturers, primarily pontoon boats. Net sales reported by Signature for the twelve months ended June 2015 were approximately $16 million. The purchase price was $16.0 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 OEM Segment and in the 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	$	16,000
Contingent consideration	3,556
Total fair value of consideration given	$	19,556
Customer relationships	$	7,500
Net other assets	4,023
Total fair value of net assets acquired	$	11,523
Goodwill (tax deductible)	$	8,033

The customer relationships intangible asset is being amortized over its estimated useful life of 15 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.

Spectal Industries

In April 2015, the Company acquired the business and certain assets of Industries Spectal, Inc. (“Spectal”), a Canada-based manufacturer of windows and doors primarily for school buses, as well as commercial buses, emergency vehicles, trucks, agricultural equipment and RVs. Net sales reported by Spectal for 2014 were approximately $25 million. The purchase price was $22.3 million paid at closing, plus contingent consideration based on future sales of this operation. The results of the acquired business have been included primarily in the Company’s OEM 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	$	22,335
Contingent consideration	1,211
Total fair value of consideration given	$	23,546
Customer relationships	$	10,100
Net other assets	4,381
Total fair value of net assets acquired	$	14,481
Goodwill (tax deductible)	$	9,065

The customer relationships intangible asset is being amortized over its estimated useful life of 15 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.

EA Technologies

In January 2015, the Company acquired the business and certain assets of EA Technologies, LLC (“EA Technologies”), a manufacturer of custom steel and aluminum parts and provider of electro-deposition (‘e-coat’) and powder coating services for RV, bus, medium-duty truck, automotive, recreational marine, specialty and utility trailer, and military applications. Net sales reported by EA Technologies for 2014 were approximately $17 million. The purchase price was $9.2 million, of which $6.6 million was paid in the fourth quarter of 2014, with the balance paid at closing. The results of the acquired business have been included in the Company’s OEM 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	$	9,248
Identifiable intangible assets	480
Net tangible assets	8,868
Total fair value of net assets acquired	$	9,348
Gain on bargain purchase	$	100

Goodwill

Goodwill by reportable segment was as follows:

(In thousands)	OEM Segment			Aftermarket Segment		Total
Net balance – December 31, 2015	$	79,206		$	4,413	$	83,619
Acquisitions	10,616			—		10,616
Other	(310		)	—		(310		)
Net balance – September 30, 2016	$	89,512		$	4,413	$	93,925

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. In conjunction with the Company’s change in reportable operating segments (see Note 11), goodwill was reassigned to reporting units using a relative fair value allocation. In addition, the Company completed an assessment of any potential goodwill impairment for all reporting units immediately prior to the reallocation and determined that no impairment existed.

Any change in the goodwill amounts resulting from foreign currency translations and purchase accounting adjustments are presented as “Other” in the above table.

Other Intangible Assets

Other intangible assets consisted of the following at September 30, 2016:

(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	106,316	$	30,226	$	76,090	6	to	16
Patents	55,172		32,290		22,882		3	to	19
Tradenames	9,876		5,332		4,544		3	to	15
Non-compete agreements	4,569		3,460		1,109		3	to	6
Other	309		68		241		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	180,929	$	71,376	$	109,553

Other intangible assets consisted of the following at December 31, 2015:

(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	94,560	$	30,514	$	64,046	6	to	16
Patents	54,293		28,255		26,038		3	to	19
Tradenames	8,935		4,751		4,184		3	to	15
Non-compete agreements	4,493		2,800		1,693		3	to	6
Other	594		307		287		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	167,562	$	66,627	$	100,935

Acquisitions

ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

Acquisitions During the Nine Months EndedSeptember 30, 2016 and Subsequent

Atwood Seating and Chassis Components

In October 2016, the Company agreed to acquire the business, manufacturing facility and certain assets of the seating and chassis components business of Atwood Mobile Products, LLC (“Atwood”), a subsidiary of Dometic Group. Net sales of the business in 2015 were approximately $30 million. The purchase price is $12.5 million, and will be paid in cash at closing.

Project 2000 S.r.l.

In May 2016, the Company acquired 100 percent of the equity interest of Project 2000 S.r.l. (“Project 2000”), an Italy-based manufacturer of innovative, space-saving bed lifts and retractable steps. Net sales reported by Project 2000 for 2015 were approximately $12 million. The purchase price was $18.8 million paid at closing, plus contingent consideration based on future sales by this operation. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Condensed Consolidated Statements of Income since the acquisition date. The Company is validating account balances and finalizing the valuation for the acquisition. The acquisition of this business was preliminarily recorded on the acquisition date as follows (in thousands):

Cash consideration net of cash acquired	$	16,137
Contingent consideration	1,322
Total fair value of consideration given	$	17,459
Customer relationships	$	6,925
Net other assets	2,533
Total fair value of net assets acquired	$	9,458
Goodwill (not tax deductible)	$	8,001

The customer relationships intangible asset is being amortized over its preliminary estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products.

Flair Interiors

In February 2016, the Company acquired the business and certain assets of Flair Interiors, Inc. (“Flair”), a manufacturer of RV furniture. Net sales reported by Flair for 2015 were approximately $25 million. The purchase price was $8.1 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM 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	$	8,100
Customer relationships	$	3,700
Net other assets	2,378
Total fair value of net assets acquired	$	6,078
Goodwill (tax deductible)	$	2,022

The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products.

Highwater Marine Furniture

In January 2016, the Company acquired the business and certain assets of the pontoon furniture manufacturing operation of Highwater Marine, LLC (“Highwater”), a leading manufacturer of pontoon and other recreational boats located in Elkhart, Indiana. Estimated 2015 net sales of the marine furniture business were approximately $20 million. The purchase price was $10.0 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM 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	$	10,000
Customer relationships	$	8,100
Net tangible assets	1,307
Total fair value of net assets acquired	$	9,407
Goodwill (tax deductible)	$	593

The customer relationships intangible asset is being amortized over its estimated useful life of 15 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.

Acquisitions During the Nine Months EndedSeptember 30, 2015

Signature Seating

In August 2015, the Company acquired the business and certain assets of Roehm Marine, LLC, also known as Signature Seating (“Signature”), a manufacturer of furniture solutions for fresh water boat manufacturers, primarily pontoon boats. Net sales reported by Signature for the twelve months ended June 2015 were approximately $16 million. The purchase price was $16.0 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 OEM Segment and in the 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	$	16,000
Contingent consideration	3,556
Total fair value of consideration given	$	19,556
Customer relationships	$	7,500
Net other assets	4,023
Total fair value of net assets acquired	$	11,523
Goodwill (tax deductible)	$	8,033

The customer relationships intangible asset is being amortized over its estimated useful life of 15 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.

Spectal Industries

In April 2015, the Company acquired the business and certain assets of Industries Spectal, Inc. (“Spectal”), a Canada-based manufacturer of windows and doors primarily for school buses, as well as commercial buses, emergency vehicles, trucks, agricultural equipment and RVs. Net sales reported by Spectal for 2014 were approximately $25 million. The purchase price was $22.3 million paid at closing, plus contingent consideration based on future sales of this operation. The results of the acquired business have been included primarily in the Company’s OEM 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	$	22,335
Contingent consideration	1,211
Total fair value of consideration given	$	23,546
Customer relationships	$	10,100
Net other assets	4,381
Total fair value of net assets acquired	$	14,481
Goodwill (tax deductible)	$	9,065

The customer relationships intangible asset is being amortized over its estimated useful life of 15 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.

EA Technologies

In January 2015, the Company acquired the business and certain assets of EA Technologies, LLC (“EA Technologies”), a manufacturer of custom steel and aluminum parts and provider of electro-deposition (‘e-coat’) and powder coating services for RV, bus, medium-duty truck, automotive, recreational marine, specialty and utility trailer, and military applications. Net sales reported by EA Technologies for 2014 were approximately $17 million. The purchase price was $9.2 million, of which $6.6 million was paid in the fourth quarter of 2014, with the balance paid at closing. The results of the acquired business have been included in the Company’s OEM 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	$	9,248
Identifiable intangible assets	480
Net tangible assets	8,868
Total fair value of net assets acquired	$	9,348
Gain on bargain purchase	$	100

Goodwill

Goodwill by reportable segment was as follows:

(In thousands)	OEM Segment			Aftermarket Segment		Total
Net balance – December 31, 2015	$	79,206		$	4,413	$	83,619
Acquisitions	10,616			—		10,616
Other	(310		)	—		(310		)
Net balance – September 30, 2016	$	89,512		$	4,413	$	93,925

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. In conjunction with the Company’s change in reportable operating segments (see Note 11), goodwill was reassigned to reporting units using a relative fair value allocation. In addition, the Company completed an assessment of any potential goodwill impairment for all reporting units immediately prior to the reallocation and determined that no impairment existed.

Any change in the goodwill amounts resulting from foreign currency translations and purchase accounting adjustments are presented as “Other” in the above table.

Other Intangible Assets

Other intangible assets consisted of the following at September 30, 2016:

(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	106,316	$	30,226	$	76,090	6	to	16
Patents	55,172		32,290		22,882		3	to	19
Tradenames	9,876		5,332		4,544		3	to	15
Non-compete agreements	4,569		3,460		1,109		3	to	6
Other	309		68		241		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	180,929	$	71,376	$	109,553

Other intangible assets consisted of the following at December 31, 2015:

(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	94,560	$	30,514	$	64,046	6	to	16
Patents	54,293		28,255		26,038		3	to	19
Tradenames	8,935		4,751		4,184		3	to	15
Non-compete agreements	4,493		2,800		1,693		3	to	6
Other	594		307		287		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	167,562	$	66,627	$	100,935