XML 60 R27.htm IDEA: XBRL DOCUMENT v2.4.0.8
Subsequent Events (Tables) (AutoUSA [Member])
12 Months Ended
Dec. 31, 2013
AutoUSA [Member]
 
Business Acquisition [Line Items]  
Fair value of consideration transferred
The AutoUSA Acquisition Date fair value of the consideration transferred totaled $11.9 million which consisted of the following:

 
 
(in thousands)
 
 
 
 
Cash
 
$
10,044
 
Convertible subordinated promissory note
  
1,300
 
Warrant to purchase $1.0 million of Company Common Stock
  
510
 
 
 
$
11,854
 

Fair values of assets acquired and liabilities assumed
The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the AutoUSA Acquisition Date.  Because the transaction was completed subsequent to December 31, 2013, we have not yet finalized the fair values of the assets and liabilities assumed in connection with the acquisition.

 
 
(in thousands)
 
 
 
 
Accounts receivable
 
$
2,934
 
Prepaid expenses
  
43
 
Net fixed assets and other long-lived assets
  
431
 
Total tangible assets acquired
  
3,408
 
 
    
Accounts payable
  
2,270
 
Total liabilities assumed
  
2,270
 
 
    
Net identifiable assets acquired
  
1,138
 
 
    
Long-lived intangible assets acquired
  
3,750
 
 
    
Goodwill
  
6,966
 
 
    
Net assets acquired
 
$
11,854
 

Acquired intangible assets
The preliminary fair value of the acquired intangible assets was determined using the below valuation approaches. In estimating the preliminary fair value of the acquired intangible assets, the Company utilized the valuation methodology determined to be most appropriate for the individual intangible asset being valued as described below. The acquired intangible assets include the following:

 
 
 
Valuation Method
 
Estimated
Fair Value
 
Estimated
Useful Life (1)
 
 
 
 
(in thousands)
 
(years)
 
 
 
 
 
 
 
Non-compete agreements
 
Discounted cash flow (2)
 
$90
 
2
Customer relationships
 
Excess of earnings (3)
 
2,660
 
5
Trademark/tradenames
 
Relief from Royalty (4)
 
1,000
 
5
     Total purchased intangible assets
 
 
 
$3,750
 
 
(1)
 
 
 
 
 
(2)
 
 
 
(3)
 
 
 
(4)
Determination of the estimated useful lives of the individual categories of purchased intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from the intangible asset. Amortization of intangible assets with definite lives are recognized over the shorter of the respective lives of the agreement or the period of time the assets are expected to contribute to future cash flows.
 
The non-compete agreement fair values were derived by calculating the difference between the present value of the Company's forecasted cash flows with the agreements in place and without the agreements in place.
 
The excess of earnings method estimates a purchased intangible asset's value based on the present value of the prospective net cash flows (or excess earnings) attributable to it. The value attributed to these intangibles was based on projected net cash inflows from existing contracts or relationships.
 
The relief from royalty method is an earnings approach which assesses the royalty savings an entity realizes since it owns the asset and doesn't have to pay a third party a license fee for it use.

Unaudited pro forma consolidated results of operations

The unaudited pro forma consolidated results of operations, assuming the acquisition had occurred on January 1, 2013 and 2012, respectively, are as follows:

 
 
Twelve Months
Ended
December 31, 2013
Twelve Months
Ended
December 31, 2012
 
 
(in thousands)
(in thousands)
Unaudited pro forma consolidated results:
 
 
 
                                Revenue
 
$95,888
$104,461
Net income
 
$2,722
$39,614