Barnes and Noble 2011 Annual Report Download - page 52

in certain compensation arrangements, termination of
textbook royalties, non-operating expenses not acquired in
the Acquisition, interest expense and income tax expense:
52 weeks ended
May 1, 2010
13 weeks ended
May 2, 2009
Sales $ 6,782,403 $ 1,301,840
Net income (loss)
from continuing
operations attributable to
Barnes & Noble, Inc. $ 53,514 $ (27,730)
Income (loss)
from continuing
operations attributable to
Barnes & Noble, Inc. per
common share
Basic $ 0.93 $ (0.52)
Diluted $ 0.92 $ (0.52)
The unaudited pro forma condensed fi nancial informa-
tion is based on the assumptions and adjustments which
give eff ect to events that are: (i) directly attributable to
the Acquisition; (ii) expected to have a continuing impact
and (iii) factually supportable. The unaudited pro forma
condensed fi nancial information is presented for infor-
mational purposes only and is not necessarily indicative of
the operating results that would have been achieved had the
Acquisition been consummated as of the dates indicated or
of the results that may be obtained in the future.
13. TIKATOK ACQUISITION
On September 24, 2009, the Company acquired the assets
of Tikatok Inc. (Tikatok) for $2,305 in cash. Tikatok is
an online platform where parents and their children
and others can write, illustrate, and publish stories into
hardcover and paperback books. On its website, Tikatok
makes available, among other things, its patent-pending
StorySparks™ system, which helps to walk children
through the process of creating and writing stories and
expands the Company’s reach to additional parents, educa-
tors and librarians. In addition to the closing purchase
price, the Company has made and may make bonus and/or
earn out payments if certain performance targets are met
over the four years following the acquisition.
The Tikatok acquisition was accounted for as a business
purchase pursuant to ASC 805. In accordance with ASC
805-20, the purchase price has been allocated to assets
based on their estimated fair value at the acquisition
date. The following table represents the allocation of the
purchase price to the acquired net assets and resulting
adjustment to goodwill:
Cash Paid $ 2,305
Allocation of purchase price
Current assets $ 46
Trade name 70
Technology 240
Non-current assets 2
Goodwill 1,947
Total assets acquired $ 2,305
Liabilities assumed —
$ 2,305
Acquired intangible assets consisted of the trade name
and technology. The trade name is being amortized on a
straight-line basis over three years. Acquired technology is
being amortized on a straight-line basis over fi ve years. The
goodwill recognized is expected to be deductible for income
tax purposes.
The results of operations for the period subsequent to
the Tikatok acquisition are included in the consolidated
fi nancial statements. The pro forma eff ect assuming the
acquisition of Tikatok at the beginning of the transition
period is not material.
14. ACQUISITION OF FICTIONWISE
On March 4, 2009, the Company acquired Fictionwise,
Inc. (Fictionwise), a leader in the eBook marketplace,
for $15,729 in cash. In addition to the closing purchase
price, the Company has made earn-out payments upon the
achievement of certain performance and technology related
targets. The acquisition provided a core component to the
Company’s overall digital strategy, enabling the launch of
one of the world’s largest eBookstores on July 20, 2009. The
eBookstore on Barnes & Noble.com enables customers to
buy eBooks and read them on a wide range of platforms,
including NOOK™, the Company’s eBook reader, iPhone®
and iPod touch®, BlackBerry®, as well as most laptops or
full-sized desktop computers.
The Fictionwise acquisition was accounted for as a business
purchase pursuant to ASC 805, Business Combinations. In
accordance with ASC 805-20, the purchase price has been
allocated to assets and liabilities based on their estimated
fair value at the acquisition date. The fair value of the con-
tingent consideration at the Fictionwise acquisition date is
included in the purchase price shown below. Changes to the
fair value of the contingent consideration were recorded
in selling and administrative expenses. The following
table represents the allocation of the purchase price to the
acquired net assets and resulting adjustment to goodwill:
50 Barnes & Noble, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued