Business Acquisition

12 Months Ended

Dec. 31, 2015

Business Acquisition [Abstract]

Business Acquisition

P.   BUSINESS ACQUISITION

On January 24, 2014, AMTEC Corporation, a wholly-owned subsidiary of the Company, purchased substantially all of the assets of Chemring Energetic Devices, Inc.’s business located in Clear Lake, South Dakota, and all of the real property owned by Technical Ordnance Realty, LLC.  The Clear Lake facility is a manufacturer of detonators, booster pellets, release cartridges, lead azide, and other military energetic devices and materials.  Its major customers include U.S. and foreign government agencies, AMTEC Corporation, and other defense contractors.  The acquisition of the Clear Lake facility complements the Defense segment’s existing line of products.  The total consideration transferred was $10,534,000, consisting of $10,000,000 of cash paid at closing, and an additional cash payment of $534,000, which was made during the second quarter of 2014.

The acquisition was accounted for under the acquisition method of accounting with the Company treated as the acquiring entity.  Accordingly, the consideration paid by the Company to complete the acquisition has been recorded to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition. The fair value of the property, plant and equipment was based upon the assessed value of the land, which was determined to approximate fair value, as well as the income approach in determining the fair value of building improvements and equipment.  The carrying values for current assets and liabilities were deemed to approximate their fair values due to the short-term nature of these assets and liabilities.  The following table shows the amounts recorded as of the acquisition date.

	(in thousands)
Receivables	$	1,498
Inventory		4,688
Other current assets		28
Property, plant and equipment		4,800
Total assets acquired		11,014
Less: Current liabilities assumed		480
Net assets acquired	$	10,534

The amount shown above for receivables represents the gross accounts receivable from the sales of goods, net of an allowance for doubtful accounts of $20,000.

The Company’s results of operations for 2014 includes revenue of $13,732,000 and earnings of $1,268,000 from the acquired facility from the date of acquisition through December 31, 2014.  The following pro forma condensed consolidated results of operations has been prepared as if the acquisition had occurred as of January 1, 2013.

	(unaudited)
	(in thousands, except per share data)
	2014		2013
Net sales	$	412,998	$	436,988
Net earnings		26,197		40,996
Net earnings per share (basic and diluted)	$	3.78	$	5.94
Weighted average shares outstanding (basic and diluted)		6,930		6,907

The unaudited pro forma financial information presented above is not intended to represent or be indicative of what would have occurred if the transactions had taken place on the dates presented and is not indicative of what the Company’s actual results of operations would have been had the acquisitions been completed at the beginning of the periods indicated above. The pro forma combined results reflect one-time costs to fully merge and operate the combined organization more efficiently, but do not reflect anticipated synergies expected to result from the combination and should not be relied upon as being indicative of the future results that the Company will experience.