Acquisition of Cronto

9 Months Ended

Sep. 30, 2013

Business Combinations [Abstract]

Acquisition of Cronto

Note 5—Acquisition of Cronto

To further increase our product offerings, on May 20, 2013, we acquired all of the stock of Cronto Limited, a private company organized and existing in the United Kingdom (“Cronto”), for initial consideration of EUR 15,000 ($19,611 at the exchange rate of 1.31 U.S. Dollars per Euro). The purchase price was subject to verification of certain balances resulting in an additional payment of GBP 358 in June 2013 (approximately $555 at an exchange rate of 1.55 U.S. Dollars per British Pound). Both payments were funded by our existing cash balances.

Consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as of the acquisition date as follows:

Cash	$	672
Inventory		486
Other current assets		116
Property and equipment		16
Goodwill		9,223
Intangible assets		13,257
Customer deposits		(624	)
Deferred income tax liabilities		(2,790	)
Other current liabilities		(190	)
	$	20,166

In addition to consideration detailed above, the transaction also includes contingent consideration of €2,000 ($2,620 at the exchange rate of 1.31 U.S. Dollars per Euro) subject to orders for Cronto products to new customers during the twenty-four months ended May 20, 2015 to be recorded as earned. For the three and nine months ended September 30, 2013, no amounts were expensed for contingent consideration.

Acquired identifiable intangible assets totaling $13,257 are being amortized over their respective useful lives ranging from two to five years. Goodwill is attributable to expected increased revenues and reduced costs resulting from synergies of combined operations.

The acquisition is not material to our consolidated balance sheet and results of operations. The consolidated financial statements include the operating results of Cronto from the acquisition date.