Supercuts 2007 Annual Report Download - page 89
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Based upon purchase price allocations, the components of the aggregate purchase prices of the acquisitions made during fiscal years 2007,
2006, and 2005 and the allocation of the purchase prices were as follows:
Total Acquisitions, Exclusive of Fiscal Year 2005 Acquisition of Hair Club
(1)
During fiscal year 2004, the Company guaranteed that the stock issued in conjunction with one of its acquisitions would reach a certain
market price by the fourth quarter of fiscal year 2006. The guaranteed stock price was factored into the purchase price at the acquisition
date by recording an increase to additional paid-in-capital for the differential between the stock price at the date of acquisition and the
guaranteed stock price. However, the stock did not reach this price during the agreed upon time frame. Therefore, the Company was
obligated to issue $3.6 million in additional consideration to the sellers during the fourth quarter of fiscal year 2006. The $3.6 million
represents the difference between the guaranteed stock price and the actual stock price on the last day of the agreed upon time frame, and
was recorded as a reduction to additional paid-in capital.
The value and related weighted average amortization periods for the intangibles acquired during fiscal year 2007 business acquisitions, in
total and by major intangible asset class, are as follows:
88
2007
2006
2005
(Dollars in thousands)
Components of aggregate purchase prices:
Cash
$
68,747
$
155,481
$
118,915
Stock
—
—
5,000
Liabilities assumed or payable
558
2,127
781
$
69,305
$
157,608
$
124,696
Allocation of the purchase prices:
Current assets
$
3,876
$
12,516
$
4,507
Property and equipment
10,086
14,422
19,091
Deferred income tax asset
1,200
—
—
Other noncurrent assets
50
4,442
4,314
Goodwill
50,844
127,337
92,315
Identifiable intangible assets
4,464
17,251
9,325
Accounts payable and accrued expenses
(412
)
(17,121
)
(3,962
)
Deferred income tax liability
(436
)
(4,656
)
(894
)
Other noncurrent liabilities
(367
)
(213
)
—
Settlement of contingent purchase price(1)
—
3,630
—
69,305
$
157,608
$
124,696
Purchase Price Allocation
Weighted Average
Period Ended June 30,
Amortization Period
2007
2006
(in years)
Amortized intangible assets:
Trade Names
$
656
$
—
20
Franchise Agreements
1,339
—
40
School
-
related licenses
610
14,426
40
Other
1,859
2,825
15
Total
$
4,464
$
17,251
27