Logitech 2011 Annual Report Download - page 212

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as amortization expense from acquired intangible assets, share-based compensation expense related to unvested
stock options and restricted stock assumed, depreciation adjustments from alignment of the companies’ policies
related to property, plant and equipment, interest expense related to debt assumed, expense related to retention
bonuses, pre-acquisition transaction costs, and the income tax impact of the pro forma adjustments. The pro forma
financial information presented below (in thousands except per share amounts) is for informational purposes only
and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at
the beginning of the periods presented.
2010 2009
(Unaudited)
Net sales ......................................................... $2,023 $2,282
Net income ....................................................... $ 44 $82
Net income per share — basic ........................................ $ 0.25 $0.46
Net income per share — diluted ....................................... $0.25 $0.45
TV Compass
On November 27, 2009, Logitech acquired certain assets from TV Compass, Inc., a Chicago, Illinois-based
company providing video software and services for the Web and mobile devices. The acquisition has been treated
as an acquisition of a business and has been accounted for using the purchase method of accounting. The total
consideration paid of $10.0 million was allocated based on estimated fair values to $4.2 million of identifiable
intangible assets, with the balance allocated to goodwill. Fair values were determined by Company management
based on information available at the date of acquisition. The intangible assets acquired are amortized on a straight-
line basis over their estimated useful lives of 6 years. The goodwill results from expected incremental revenue from
the use of the acquired technology in enhancing our products. The goodwill is not subject to amortization and is not
expected to be deductible for income tax purposes. In addition, Logitech incurred $0.3 million in transaction costs,
which are included in operating expenses.
SightSpeed
In October 2008, the Company acquired SightSpeed Inc., a privately held company providing high-quality
Internet video communications services. The acquisition of SightSpeed provided Logitech with video calling
technology and a software and services development team that is focused on future video calling initiatives to
enable cross-platform video communications.
Total consideration paid was $30.9 million, which includes $0.8 million in transaction costs. Under the terms
of the purchase agreement, the Company acquired all of the outstanding shares of SightSpeed.
The acquisition has been accounted for using the purchase method of accounting. Accordingly, the total
consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their
estimated fair values as of the acquisition date. Fair values were determined by Company management based
on information available at the date of acquisition. The results of operations of SightSpeed were included in
Logitech’s consolidated financial statements from the date of acquisition, and were not material to the Company’s
reported results.