Audiovox 2010 Annual Report Download - page 83

Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements, continued
February 28, 2010
(Dollars in thousands, except share and per share data)
Assets acquired:
Accounts receivable, net $ 3,920
Inventory 4,007
Property, plant and equipment, net 103
Other long-term assets 241
Trademarks and other intangible assets 6,380
Goodwill 11,326
Total assets acquired $ 25,977
Liabilities assumed:
Accounts payable $ 3,689
Accrued expenses and other liabilities 624
Deferred tax liabilities 407
Other liabilities 70
Total liabilities assumed $ 4,790
Total purchase price $ 21,187
The allocation of the purchase price to the assets acquired was based upon a valuation study performed by management and
is final. During 2009, the contingent payment period expired and the required earnings targets were not met. As such, the
Company reversed the liability established and reduced the Trademark and other intangibles on a prorata, prospective basis.
After the adjustment, Trademark and other intangible assets include $346 of amortizable customer relationships with an
estimated life of 5 years.
Incaar
On August 14, 2007, Audiovox German Holdings GmbH completed the acquisition of certain assets and the business of
Incaar Limited (“Incaar”), an OEM business in Europe for $801, including acquisition costs of $51 and an estimated
contingent payment of approximately $400.
The contingent payment may be due by the Company if certain earnings targets are generated by Incaar for a period of
approximately two years after the acquisition date (August 14, 2007). The earnings target calculation requires that if the
accumulated Incaar pre-tax income, including or excluding certain items, exceeds 1,055 Euros over the cumulative two year
period, the Company is liable to pay an additional $400, as defined in the purchase agreement. 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 $801.
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 add the experience, concepts and product development of an OEM
business in Europe.
The following summarizes the final allocation of the total purchase price to the estimated fair value of the assets acquired at
the date of acquisition:
Assets acquired:
Trademark and other intangible assets $ 801
Total purchase price (includes cash paid plus estimated contingent fees) $ 801
The allocation of the purchase price to the assets acquired was based upon a valuation study performed by management and
is final. During 2009, the contingent payment period expired and the required earnings targets were not met. As such, the
Company reversed the liability established and reduced the Trademark and other intangibles on a prorata, prospective basis.
After the adjustment, Trademark and other intangible assets include $346 of amortizable customer relationships with an
estimated life of 5 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
Source: AUDIOVOX CORP, 10-K, May 14, 2010 Powered by Morningstar® Document Research℠