Acquisition

9 Months Ended

Sep. 30, 2012

Notes

Acquisition

(5)       Acquisition.  On March 18, 2011, UTMD purchased all of the common shares of Femcare Holdings Ltd (Femcare) of the United Kingdom, and its subsidiaries.  The acquisition was accretive to financial performance in both 3Q and 9M 2011 as well as 3Q and 9M 2012.

A two-year escrow was set aside from the purchase price to back the warranties and representations of the sellers.  No claims against the escrow have been made by UTMD.

Proforma Information

Revenue and net income of the combined entity as though the business combination occurred as of the beginning of the reporting period is:

		Nine months ended September 30, 2012 (as reported)		Nine months ended September 30, 2011
Revenue	$	31,719	$	31,873
Net income		7,910		6,301

Pro forma net income of $6,301 for the nine months ended September 30, 2011 does not include $293 in UTMD legal costs directly attributable to the acquisition, and $1,765 in Femcare expenses for employee shareholder bonuses, loan redemption premium related to termination of ownership, buy-out of warrants, financial advisory fees and an insurance premium for sellers’ liability which are directly attributable to the acquisition.

The March 18, 2011 purchase price was allocated as follows:

Assets Acquired
Accounts receivable	$	2,176
Prepaid expenses		773
Inventory		1,319
Property and equipment		606
Identifiable intangibles
Patents		97
Non-compete agreements		162
Trademarks, trade names		11,559
Customer relationships		11,559
Regulatory approvals & product certifications		15,419
Goodwill		8,249
Total assets acquired		51,919
Liabilities Assumed
Accounts payable		1,107
Accrued expenses		644
Deferred tax liability		9,084
Total liabilities assumed		10,835
Net assets acquired	$	41,084