Audiovox 2009 Annual Report Download - page 87

Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements
February 28, 2009
(Dollars in thousands, except share and per share data)
The following summarizes the final allocation of the total purchase price to the estimated fair value of the assets acquired and
liabilities assumed at the date of acquisition:
Assets acquired:
Inventory $ 31,664
Prepaid expenses and other current assets 2,312
Tradename 51,099
Total assets acquired $ 85,075
Liabilities assumed:
Accounts payable $ 17,489
Accrued expenses and other liabilities 2,870
Total liabilities acquired $ 20,359
Cash paid (includes cash paid plus estimated contingent fee) $ 64,716
The allocation of the purchase price to assets acquired and liabilities assumed was based upon a valuation study performed by
management and is final. Trademarks and other intangible assets includes $2,200 of amortizable customer relationships with
an estimated life of 11 years.
Oehlbach
On March 1, 2007, Audiovox German Holdings GmbH completed the stock acquisition of Oehlbach Kabel GmbH
(“Oehlbach”), a European market leader in the accessories field for $8,134, including acquisition costs of $200 and an
estimated contingent payment of approximately $1,322.
The contingent payment may be due by the Company if certain earnings targets are generated by Oehlbach for a period of
three years after the acquisition date (March 1, 2010). The earnings target calculation requires that if the accumulated
Oehlbach operating income, including or excluding certain items exceeds 3,290 Euros over the cumulative three year period,
the Company is liable to pay the excess of the operating income amount (as defined in the purchase agreement) over 3,290
Euros but not to exceed 1,000 Euros. The contingent payment was recorded in connection with the final purchase price
allocation (increase to intangible assets and other long-term liabilities) as the estimated fair value of the net assets acquired
exceeded the total purchase price. As the estimated fair value of the net assets acquired exceeded the total purchase price,
after recording the maximum contingent payment, the Company reduced the estimated fair value of the non-financial assets
acquired on a prorata basis to the adjusted purchase price of $8,134.
The results of operations of this acquisition have been included in the consolidated financial statements from the date of
acquisition. The purpose of this acquisition was to expand the Company’s accessory product lines to European Markets.
The following summarizes the final allocation of the total purchase price to the estimated fair value of the assets acquired and
liabilities assumed at the date of acquisition:
Assets acquired:
Cash $ 200
Accounts receivable, net 2,215
Inventory 1,939
Prepaid expenses and other current assets 60
Property, plant and equipment, net 327
Trademark and other intangible assets 11,661
Total assets acquired $ 16,402
Liabilities assumed:
Accounts payable $ 601
Accrued expenses and other liabilities 2,383
Income taxes payable 891
Long-term debt 807
Deferred tax liability 3,586
Total liabilities assumed $ 8,268
Total purchase price (includes cash paid plus contingent payment) $ 8,134
Source: AUDIOVOX CORP, 10-K, May 14, 2009 Powered by Morningstar® Document Research℠