Quarterly report pursuant to Section 13 or 15(d)

Acquisitions (Tables)

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Acquisitions (Tables)
 9 Months Ended
Jun. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Schedule of Purchase Price Allocation of Purchase of Acquired Identifiable Assets, Liabilities Assumed and Goodwill The table below outlines the purchase price allocation of the purchase for Midwest Grinding to the acquired identifiable assets and liabilities assumed as of June 30, 2024 (in $000’s):
Total purchase price $ 1,000 
Accounts payable 1 
Total consideration 1,001 
Accounts receivable 152 
Other current assets 71 
Property and equipment 738 
Intangible Assets
Customer relationships $ 16 
Trade names 15 
Non-compete agreement 9 
Intangible assets 40 
Total assets acquired 1,001 
Total goodwill $ — 
The fair value of the purchase price components was approximately $14.1 million, as detailed below (in $000's):
Purchase price $ 11,758 
Fair value of contingent consideration 2,000 
Holdback 300 
Net purchase price $ 14,058 
The table below outlines the purchase price allocation, as revised, for the purchase of Central Steel to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):
Total purchase price $ 14,058 
Accounts payable 464 
Accrued liabilities 969 
   Total liabilities assumed 1,433 
Total purchase price plus liabilities assumed 15,491 
Cash 184 
Accounts receivable 2,418 
Inventory 2,425 
Property and equipment 5,034 
Intangible assets
Trade names 400 
Customer relationships 900 
Non-compete 825 
Subtotal intangible assets 2,125 
Other assets 476 
   Total assets acquired 12,662 
    Total goodwill $ 2,829 
The fair value of the purchase price components was $1.4 million, as detailed below (in $000's):
Cash $ 1,034 
Additional consideration 89 
Holdback 300 
Purchase price $ 1,423 
The table below outlines the purchase price allocation of the purchase for CRO to the acquired identifiable assets, liabilities assumed and goodwill as of June 30, 2024 (in $000’s):
Total purchase price $ 1,423 
Accounts payable 770 
Accrued liabilities 1,298 
Total liabilities assumed 2,068 
Total consideration 3,491 
Accounts receivable 259 
Inventory 1,406 
Property and equipment 261 
Intangible assets 1,190 
Other assets 286 
Total assets acquired 3,402 
Total goodwill $ 89 
The fair value of the purchase price components outlined above was approximately $2.0 million, as detailed below (in $000's):
Cash $ 500 
Deferred consideration 1,200 
Earnout 301 
Purchase price $ 2,001 
The table below outlines the purchase price allocation of the purchase for Johnson to the acquired identifiable assets and liabilities assumed as of June 30, 2024 (in $000’s):
Total purchase price $ 2,001 
Accounts payable 1,017 
Accrued liabilities 1,141 
Total liabilities assumed 2,158 
Total consideration 4,159 
Accounts receivable 1,252 
Inventory 1,127 
Property and equipment 157 
Intangible assets
Customer relationships $ 1,301 
Non-compete agreement 306 
Subtotal intangible assets 1,607 
Other assets 16 
Total assets acquired 4,159 
Total goodwill $ — 
The fair value of the purchase price components outlined above was $26.8 million due to fair value adjustments for the contingent consideration, cash acquired, and working capital adjustments, as detailed below (in $000’s):
Purchase price $ 25,000 
Fair value of earnout 2,675 
Cash from balance sheet 1,602 
Working capital adjustment (2,500)
Net purchase price $ 26,777 
The table below outlines the purchase price allocation of the purchase for PMW to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):
Net purchase price $ 26,777 
Accounts payable 10,788 
Accrued liabilities 4,995 
Total liabilities assumed 15,783 
Total consideration 42,560 
Cash 1,602 
Accounts receivable 12,613 
Inventory 6,266 
Property and equipment 13,616 
Intangible assets 3,600 
Other assets 849 
Total assets acquired 38,546 
Total goodwill $ 4,014 
The table below outlines the purchase price allocation, as revised, of the purchase for Flooring Liquidators to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):
Purchase price $ 78,700 
Accounts payable 5,189 
Accrued liabilities 10,700 
Debt 60 
Total liabilities assumed 15,949 
Total consideration 94,649 
Cash 9,131 
Accounts receivable 4,824 
Inventory 19,402 
Property and equipment 4,643 
Intangible assets
Trade names $ 13,275 
Customer relationships 7,700 
Non-compete agreements 1,625 
Other 49 
Subtotal intangible assets 22,649 
Other 2,581 
Total assets acquired 63,230 
Total goodwill $ 31,419 
Schedule of Asset Acquisition
The table below outlines the purchase price allocation of the purchase for Cal Coast to the acquired identifiable assets (in $000’s):
Property and equipment $ 35 
Intangible assets
Customer relationships 785 
Trade name 425 
Non-compete agreement 55 
Total intangible assets 1,265 
Total assets acquired $ 1,300 
Schedule of Disposal Groups, Including Discontinued Operations
On May 24, 2024, CRO entered into an asset purchase agreement with the original seller of Johnson under which the original seller agreed to purchase certain assets and assume certain obligations acquired by CRO under the original asset
purchase agreement. Consequently, CRO recorded a loss on deconsolidation of Johnson’s assets and liabilities of approximately $301,000, as detailed in the table below (in $000's):
Accounts payable and accrued liabilities $ 475 
Earnout 307 
Seller note 1,230 
Lease liabilities 2,703 
Total deconsolidation of liabilities 4,715 
Inventory 613 
Property and equipment 206 
ROU assets 2,692 
Intangible assets
Customer relationships 1,224 
Non-compete agreement 281 
Subtotal intangible assets 1,505 
Total deconsolidation of assets 5,016 
Total loss on deconsolidation $ (301)
Schedule of Business Acquisitions, by Acquisition
The fair value of the purchase price components outlined above was $78.7 million due to fair value adjustments for the Note, and restricted stock, as detailed below (in $000's).
Purchase price $ 83,800 
Fair value adjustment, sellers note (3,300)
Fair value adjustment, restricted stock (1,800)
Net purchase price $ 78,700 
Schedule of Proforma Information for the Company
The table below presents selected proforma information for the Company for the three and nine-month periods ended June 30, 2023, assuming that the acquisition had occurred on October 1, 2022 (the beginning of the Company’s 2023 fiscal year), pursuant to ASC 805-10-50 (in $000's). This proforma information does not purport to represent what the actual results of operations of the Company would have been had the acquisition occurred on that date, nor does it purport to predict the results of operations for future periods.
As Reported Adjustments Proforma
Live Unaudited Three Months Ended June 30, 2023 Flooring Liquidators Unaudited Three Months Ended June 30, 2023
Adjustments(1)
Live for the Three Months Ended June 30, 2023
Net revenue $ 91,516  $ 4,222  $ 95,738 
Net income $ 1,060  $ (2,188) $ (300) $ (1,428)
Earnings per basic common share $ 0.33  $ (0.45)
Earnings per basic diluted share $ 0.33  $ (0.45)
As Reported Adjustments Proforma
Live Unaudited Nine Months Ended June 30, 2023 Flooring Liquidators Unaudited Nine Months Ended June 30, 2023
Adjustments(1)
Live for the Nine Months Ended June 30, 2023
Net revenue $ 251,624  $ 37,702  $ 289,326 
Net income $ 4,462  $ (1,033) $ (2,226) $ 1,203 
Earnings per basic common share $ 1.43  $ 0.39 
Earnings per basic diluted share $ 1.42  $ 0.38 
(1) Adjustments are related to adjustments made for the following:
•Amortization expense of definite-lived intangible assets has been adjusted based on the preliminary fair value at the acquisition date.
•Interest expense has been adjusted to include proforma interest expense that would have been incurred as a result of the acquisition financing obtained by the Company.
•Elimination of revenue and costs of revenue associated with sales between Flooring Liquidators and the Company prior to acquisition.