(

) Business Combination

March 16, 2020,

we purchased substantially all of the assets of STM for a purchase price of

$22.5

million, subject to certain post-closing adjustments (the “STM Acquisition”), which included a

$1.0

million holdback that is payable

one

year from the acquisition date.

STM was a leading manufacturer of prestressed concrete strand (“PC strand”) for concrete construction applications. We acquired, among other assets, STM’s accounts receivable, inventories, production equipment and facility located in Summerville, South Carolina, and assumed certain of its accounts payable and accrued liabilities. The STM Acquisition serves to strengthen our competitive position as we contend with increased low-priced import competition.

Following is a summary of our preliminary allocation of the purchase price to the fair values of the assets acquired and liabilities assumed as of the acquisition date:

(In thousands)
Assets acquired:
Accounts receivable	$	3,860
Inventories		3,172
Other current assets		3,291
Property, plant and equipment		11,140
Intangibles		870
Total assets acquired	$	22,333

Liabilities assumed:
Accounts payable	$	852
Accrued expenses		312
Total liabilities assumed		1,164
Net assets acquired		21,169
Purchase price		22,500
Goodwill	$	1,331

In connection with the STM Acquisition, we acquired certain intangible assets including customer relationships, a trade name and non-competition agreement. As we are in the process of finalizing internal and

third

-party valuations of tangible and intangible assets and certain liabilities, the provisional estimates of intangible assets, fixed assets, goodwill and certain accrued liabilities are subject to adjustment. We expect to finalize these amounts as soon as practical and

later than

one

year from the acquisition date. Goodwill associated with the STM Acquisition consists largely of the synergies we expect to realize through the integration of the acquired assets with our operations.

The STM Acquisition was accounted for as a business purchase pursuant to ASC Topic

805,

Business Combinations

(“ASC

805”

). Under the provisions of ASC

805,

acquisition and integration costs are recorded as expenses in the period in which such costs are incurred rather than included as components of consideration transferred.

Following the STM Acquisition, net sales of the STM facility were approximately

$1.1

million for the

three

-month period ended

March 28, 2020.

The actual net sales specifically attributable to the STM Acquisition, however, cannot be quantified due to our integration efforts which involved the reassignment of business between the former STM facility and our existing PC strand facilities. As a result, we have determined that the presentation of STM’s earnings for the

three

- and

six

-month periods ending

March 28, 2020

is impractical due to the integration of STM’s operations following the STM Acquisition.

The following unaudited supplemental pro forma financial information reflects our combined results of operations had the STM Acquisition occurred at the beginning of fiscal

2019.

The pro forma information reflects certain adjustments related to the STM Acquisition, including adjusted amortization and depreciation expense based on the fair values of the assets acquired. The pro forma information does

not

reflect any potential operating efficiencies or cost savings that

may

result from the STM Acquisition. Accordingly, this pro forma information is for illustrative purposes and is

not

intended to represent the actual results of operations of the combined company that would have been achieved had the STM Acquisition occurred at the beginning of fiscal

2019,

nor is it intended to indicate future results of operations. The pro forma combined results of operations for the

three

- and

six

-month periods ending

March 28, 2020

and

March 30, 2019

are as follows:

	Three Months Ended				Six Months Ended
	March 28,		March 30,		March 28,		March 30,
(In thousands)	2020		2019		2020		2019
Net sales	$	121,290	$	120,363	$	224,931	$	224,004
Earnings before income taxes		4,591		906		4,285		662
Net earnings		2,353		677		2,136		460

Restructuring charges.

In connection with the STM acquisition, we elected to consolidate our PC strand operations through the closure of the Summerville facility and the redeployment of its equipment to our other

three

PC strand production facilities located in Gallatin, Tennessee; Houston, Texas; and Sanderson, Florida. We expect that operations at the Summerville facility will cease by the end of the

third

quarter of fiscal

2020.

Following is a summary of the restructuring activity during the

three

- and

six

-month periods ended

March 28, 2020:

	Employee			Facility
	Separation Costs			Closure Costs		Total
(In thousands)
Restructuring charges	$	129		$	20	$	149
Cash payments		(4	)		-		(4	)
Liability as of March 28, 2020	$	125		$	20	$	145

As of

March 28, 2020,

we recorded a liability of

$145,000

for restructuring liabilities in accrued expenses on our consolidated balance sheet. We currently expect to incur approximately

$1.7

million of additional restructuring charges for equipment relocation, employee separation and facility closure costs through fiscal

2020.

Acquisition costs.

During the

three

- and

six

-month periods ended

March 28, 2020,

we recorded

$187,000

of acquisition-related costs associated with the STM Acquisition for accounting, legal and other professional fees.