Note 2 - Acquisitions

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Business Combination Disclosure [Text Block]

(2)

Acquisitions

On

October

28,

2014,

the Company acquired

Digital Assent, LLC (“Digital Assent”), a company with a healthcare technology platform. The acquisition created a Center of Excellence in Atlanta, Georgia, responsible for developing novel solutions to enhance consumer decision-making in the selection of healthcare providers. The all-cash consideration paid at closing was

$2.6

million.

The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date, and the weighted average life of the long-lived assets.

Amount of Identified Assets Acquired and Liabilities Assumed

(

$ in thousands)

Current Assets	$	36
Property and equipment		16
Customer relationships		382
Technology		1,110
Goodwill		1,124
Other Long Term Assets		23
Total acquired assets		2,691
Current liabilities		(117	)
Net assets acquired	$	2,574

The identifiable intangible assets are being amortized over their estimated useful lives and have a total weighted average amortization period of

7.26

years. The goodwill and identifiable intangible assets are deductible for tax purposes. Goodwill related to the acquisition was primarily attributable to anticipated synergies and other intangibles that do not qualify for separate recognition.  

The consolidated financial statements as of

December

31,

2016

and

2015

and for the years ended

December

31,

2016,

2015,

and

2014

include amounts acquired from, as well as the results of operations of the acquired entity from

October

28,

2014

forward. Results of operations for the year ended

December

31,

2014

include revenue of

$95,000

and an operating loss of

$548,000

attributable to the acquired entity since acquisition. Acquisition-related costs of

$52,000

are included in selling, general and administrative expenses for the year ended

December

31,

2014.

The following unaudited pro forma information for the Company has been prepared as if the acquisition had occurred on

January

1,

201

4.

The information is based on the historical results of the separate companies and

may

not necessarily be indicative of the results that could have been achieved or of results that

may

occur in the future. The pro forma adjustments include the impact of depreciation and amortization of property and equipment and intangible assets acquired, interest expense of debt not assumed in the acquisition and income tax benefits of the acquired entity.

	Year Ended December 31,
	2014
	(In thousands, except per share data)
Revenue	$	99,266
Net income	$	17,642
Basic Earnings per share – Class A	$	0.42
Basic Earnings per share – Class B	$	2.54
Diluted Earnings per share – Class A	$	0.42
Diluted earnings per share – Class B	$	2.50

During

October

2014,

the Company also made

an investment which included an option for a potential acquisition of a partner company that had developed a talent-matching solution to accelerate the formation of high-performing teams.  The cash consideration paid was

$800,000,

of which

$657,000

was allocated to the purchase option and the remaining

$143,000

to a license and work to be performed. The option provided NRC Health with the right to acquire the partner company for

$4.1

million on or before

March

31,

2015.

The option was extended until

June

30,

2015.

The Company did not exercise the option and, accordingly, it expired in

June

2015.

The

$657,000

option was written off in

2015.