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## NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

## 2. Business Combinations 

The Company’s acquisitions have been accounted for using the purchase method of accounting, and according- ly, the operating results of the acquired businesses are included in the Company’s consolidated financial state- ments from the respective acquisition dates. The assets acquired and liabilities assumed were recorded at esti- mated fair value. That portion of the purchase price in excess of the fair market value of the net identifiable assets acquired is recorded as goodwill. 

On July 1, 2002 the Company announced it had entered into a strategic alliance with Case Construction Equipment for the manufacture, marketing and sale of trenchers, horizontal directional drills (“HDD”) and related equipment for the utility constructions market. Under an original equipment manufacturer agreement “(OEM)”, the Company’s Underground Group will produce the current line of of eight Case trenchers, three HDD’s, HDD fluid-mixing systems and downhole tools, and will also dedicate selected models of Trencor trenchers and American Augers HDD’s to be distributed through the Case dealer networks. As part of the agreement, the Company will also have access to Case’s worldwide dealer networks and access to Case’s purchasing power for these product lines through its supply base. As part of the agreement, the Company acquired certain intel- lectual property, tooling and other product-specific manufacturing assets from Case. The Company’s subsidiary Trencor, Inc. will manufacture and sell Case trencher products beginning in early 2003, with the full Case product line integration and related manufacturing operations scheduled for completion by the end of 2003. 

On October 2, 2000, the Company acquired the operating assets and liabilities of Carlson Paving Products Company, Inc. (“Carlson”) for $4,170,000 in cash and 144,162 shares of the Company’s stock valued at approximately $1,577,000. On September 30, 2000, the Company purchased substantially all of the assets and liabilities of Osborn MMD, a Boart Longyear group operation, from Anglo Operations Limited for approxi- mately $3,200,000 in cash. The acquired business is located in South Africa and operates as Osborn Engineered Products SA (Pty) Ltd. 

A summary of the net assets acquired is as follows: 

<img src='content_image/51383.jpg'>

On December 31, 2001, the Company acquired the remaining 50% interest in its joint venture investment, Pavement Technology, Inc., for 10,000 shares of the Company’s stock valued at approximately $143,000. 

## 3. Inventories 

<img src='content_image/51384.jpg'>

