—Acquisitions

Albany-Chicago Company LLC

On December 28, 2012, the Company, through a wholly-owned subsidiary, entered into and consummated the transactions contemplated by a Membership Interest Purchase Agreement, dated December 28, 2012 (the "Purchase Agreement"), among the subsidiary and all of the equity owners of Albany-Chicago Company LLC ("Pleasant Prairie"), a producer of aluminum die cast and machined parts for the motor vehicle industry.

The Company acquired Pleasant Prairie in order to further our investment in light weighting technologies and expand the diversity of our customer base, product offering and geographic footprint. Pleasant Prairie's results of operations are reflected in the Company's condensed consolidated statements of income from the acquisition date.

The aggregate fair value of consideration transferred in connection with the Purchase Agreement was $56,390, including $56,792 ($56,337 net of cash acquired) in cash on the date of acquisition, $381 of working capital adjustments paid during the second quarter to the seller, a reduction in purchase price of $850 as a result of a settlement agreement on asset valuation for tax purposes during the third quarter and a working capital adjustment of $67 paid to the seller during the third quarter. Of this amount, $3,000 in cash was placed into escrow, and will serve as security for any indemnification claims made by the Company under the Purchase Agreement.

The acquisition of Pleasant Prairie has been accounted for using the acquisition method in accordance with the FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The fair values of identifiable intangible assets were based on valuations using the income approach and estimates provided by management. The excess of the purchase price over the estimated fair values of the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. The allocation of the purchase price is based upon a valuation of certain assets acquired and liabilities assumed. The preliminary purchase price allocation was as follows:




Cash and cash equivalents	$	455
Accounts receivable	9,179
Inventory	2,711
Prepaid assets and other	1,851
Property, plant and equipment	28,688
Intangible assets	11,524
Other non-current assets	67
Goodwill	8,354
Accounts payable and other	(6,439		)
Net assets acquired	$	56,390

The purchase price allocation is provisional, pending completion of the valuation of acquired intangible assets, property, plant and equipment, and inventories. The Company is utilizing a third party to assist in the fair value determination of certain components of the purchase price allocation, namely property, plant and equipment and intangible assets. The final valuation may change the allocation of the purchase price, which could affect the fair values assigned to the assets.

The Company believes the amount of goodwill resulting from the purchase price allocation is attributable to the workforce of the acquired business (which is not eligible for separate recognition as an identifiable intangible asset) and the synergies expected after the Company's acquisition of Pleasant Prairie. All of the goodwill was allocated to the Company's Pleasant Prairie subsidiary. The total amount of goodwill expected to be deductible for tax purposes is $20,711 and is estimated to be deductible over approximately 15 years.

Of the $11,524 of acquired intangible assets, $8,906 was assigned to customers that have a useful life of approximately 13 years, $1,877 was assigned to trade names with an estimated useful life of approximately 15 years, and $741 was assigned to non-competition agreements with an estimated useful life of approximately 2 years. The fair values assigned to identifiable intangible assets acquired has been determined primarily by using the income approach, which discounts expected future cash flows to present value using estimates and assumptions determined by management. The amounts assigned to intangible assets were based on management's preliminary estimate of the fair value. The total amount of identifiable intangible assets expected to be deductible for tax purposes is $11,524 and is estimated to be deductible over approximately 15 years.

The amounts of revenue and net income of Pleasant Prairie included in the Company's consolidated statements of income for the three months ended July 31, 2013 and from the acquisition date to the period ending July 31, 2013 are as follows:



Pleasant Prairie Results of Operations	For the three months ended July 31, 2013		From December 28, 2012 - July 31, 2013
Revenue	$	16,817	$	39,526
Net income	$	910	$	1,266

Atlantic Tool & Die - Alabama, Inc.

On December 13, 2012, the Company acquired certain assets of Atlantic Tool & Die - Alabama, Inc. (“Anniston”), a metal stamping, welding and value added assembly company. The Company acquired Anniston in order to expand the diversity of our customer base and the availability of desired assets. The results of operations for Anniston are included in the Company's condensed consolidated financial statements from the date of acquisition. The Company has performed a preliminary allocation of the purchase price and preliminarily assigned a fair value of the identifiable assets acquired less liabilities assumed of $6,347, which allocation was materially equal to the fair value of the purchase price of the business. As a result, the Company recognized no goodwill or bargain gain associated with the acquisition during the first nine months of fiscal 2013. The Company is utilizing a third party to assist in the fair value determination of certain components of the purchase price allocation, namely fixed assets and intangible assets. The final valuation may change the allocation of the purchase price, which could affect the fair values assigned to the assets.

Assets acquired and liabilities assumed in the acquisition were recorded on the Company's condensed consolidated balance sheets at their estimated fair values as of the date of the acquisition. The Company acquired typical working capital items of inventories and other assets, net of certain employee benefit liabilities assumed, of $1,214, and property, plant and equipment of $5,133.

Contech Castings, LLC

On June 11, 2013, a wholly-owned subsidiary of the Company entered into an Asset Purchase Agreement (the “ Contech Agreement”), with Contech Castings, LLC (“Contech”) and its subsidiary Contech Casting Real Estate Holdings, LLC (“Contech Real Estate” and together with Contech, “Contech Sellers”). Contech is engaged in the business of die casting and machining motor vehicle parts and further producing engineered high pressure aluminum die cast and machined parts for the motor vehicle industry, and Contech Real Estate owns the real property used by Contech in its business.

Under the terms of the Agreement, the subsidiary had agreed to acquire the assets of the business located at the purchased facilities (the “Contech Assets”) from the Contech Sellers for $54,400 in cash, subject to adjustment based upon changes in working capital, plus the assumption of certain specified liabilities. The subsidiary had deposited 10% of the purchase price into escrow, which will, subject to a working capital escrow, be credited to the purchase price on the completion of the acquisition of the Contech Assets. The escrow deposit of $5,440 is included as a component of other assets in the condensed consolidated balance sheet. See Note 14 - Subsequent Events.

Pro Forma Consolidated Results

The following supplemental pro forma information presents the financial results for the three months ended July 31, 2013 as if the acquisition of Pleasant Prairie had occurred on November 1, 2012, and for the three months ended July 31, 2012 as if the acquisition had occurred on November 1, 2011. In addition, the following supplemental pro forma information presents the financial results for the nine months ended July 31, 2013 as if the acquisition of Pleasant Prairie had occurred on November 1, 2012, and for the nine months ended July 31, 2012 as if the acquisition had occurred on November 1, 2011. The pro forma results do not include any anticipated cost synergies, costs or other effects of the planned integration of Pleasant Prairie. Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisition been completed on the dates indicated, nor are they indicative of the future operating results of the combined company. In addition, the pro forma information includes amortization expense related to intangible assets acquired of approximately $269 and $242 for the three month periods ended July 31, 2013 and July 31, 2012, respectively, and $850 and $727 for the nine month periods ended July 31, 2013 and July 31, 2012, respectively. Pro forma information related to the Anniston acquisition is not included in the table below as its financial results were not considered to be significant to the Company's operating results for the periods presented.



Pro forma consolidated results	Three Months Ended July 31,				Nine Months Ended July 31,
(in thousands, except for per share data):	2013		2012		2013		2012
Revenue	$	166,059	$	158,407	$	503,838	$	492,866
Net income	$	5,282	$	2,211	$	14,766	$	10,481
Basic earnings per share	$	0.31	$	0.13	$	0.87	$	0.62
Diluted earnings per share	$	0.31	$	0.13	$	0.87	$	0.62