Note 8 - Acquisition |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combination [Text Block] |
Note 8 – Acquisition
On July 19, 2024 (the “Closing Date”), NoJo acquired substantially all of the assets, and assumed certain specified liabilities, of Baby Boom Consumer Products, Inc. (“Baby Boom”)(the “Acquisition”), for a purchase price of $18.0 million in cash, subject to a working capital adjustment. The Acquisition was funded by the Company using the proceeds of an $8.0 million term loan from CIT and additional borrowings under the Company’s revolving line of credit with CIT.
The Acquisition has been accounted for in accordance with FASB ASC Topic 805, Business Combinations. The identifiable assets acquired were recorded at their estimated fair value, which has been determined based on available information and the use of multiple valuation approaches. The estimated useful lives of the identifiable intangible assets acquired were determined based upon the remaining time that these assets are expected to directly or indirectly contribute to the future cash flow of the Company. On December 23, 2025, the Company received $2.5 million in proceeds from certain claims filed by the Company under a representations and warranties insurance policy purchased in connection with the Acquisition (the “Insurance Proceeds”). The Insurance Proceeds are recorded within other income in the accompanying consolidated statements of operations for the year ended March 29, 2026. The Company considers the measurement period to have ended as of June 25, 2025 and further considers all measurement period adjustments to be final.
The acquisition cost paid on the Closing Date amounted to $16.3 million, which included net working capital adjustment. The following table represents the Company’s allocation of the acquisition cost (in thousands) to the identifiable assets acquired and the liabilities assumed based on their respective estimated fair values as of the Closing Date. The excess of the acquisition cost over the estimated fair value of the identifiable net assets acquired is reflected as goodwill.
Based on the allocation of the acquisition cost, the Company recognized $5.3 million of goodwill as of the Closing Date, the entirety of which was assigned to the reporting unit of the Company that produces and markets infant and toddler bedding and diaper bags. The goodwill recognized primarily consists of synergies expected from combining operations of Baby Boom and the Company and intangible assets acquired that do not qualify for separate recognition. The following table represents adjustments made to the amount of goodwill during the fiscal year ended March 30, 2025 (in thousands):
Goodwill is expected to be deductible for income tax purposes, net of the effects of the adjustments outlined in the table above and the Insurance Proceeds.
The assets acquired in the Acquisition generated net sales of $11.9 million of bedding and diaper bag products for the period from the Closing Date to March 30, 2025. The Company is unable to reasonably estimate Baby Boom earnings from the Closing Date to March 30, 2025 after making every reasonable effort to do so. Amortization expense associated with the acquired amortizable intangible assets was $352 thousand and $234 thousand during the fiscal years ended March 29, 2026 and March 30, 2025, respectively, which is included in marketing and administrative expenses in the accompanying consolidated statements of operations. Amortization is computed using the straight-line method over the estimated useful lives of the assets, which are 15 years for the tradename, 14 years for the licensing relationships and 14 years on a weighted-average basis for the grouping taken together.
The Company has determined, on a pro forma basis, that the combined net sales and the combined net loss of the Company and Baby Boom, giving effect to the Acquisition as if it had been completed on April 3, 2023, would have been $92.3 million and $8.6 million, respectively, (unaudited) for the fiscal year ended March 30, 2025. The combined net income includes adjustments related to the amortization of the amortizable intangible assets acquired and estimates of the interest expense and income tax expense or benefit that would have been incurred, but otherwise do not reflect the costs of any integration activities or benefits that may result from the realization of future cost savings from operating efficiencies, or any revenue, tax or other synergies that may result from the Acquisition.
|