Acquisitions

9 Months Ended

Jul. 03, 2011

Acquisitions

Acquisitions

8. Acquisitions

In October 2010, the Company acquired the assets and assumed certain liabilities of Road Safety International, Inc. ("Road Safety"). The Road Safety product is installed in an ambulance or fire vehicle and provides real-time feedback via audible alerts in situations such as speeding or hard cornering to help the driver avert an accident. The Road Safety product encourages a safer ambulance environment during patient treatment, records vehicle operating data for analysis, and can also be used to help reduce vehicle maintenance costs. The acquisition provides for consideration to be paid in the form of possible annual earn-out payments based on revenues for the next two fiscal years. If both earn-outs are achieved, total consideration (including liabilities assumed) could approximate $550,000. The contingent consideration is recorded in "accrued expenses and other liabilities" and "other long-term liabilities" on the Company's condensed, consolidated balance sheet and no adjustments have been made to this accrual since it was originally recorded. Beginning October 4, 2010, the results of operations of Road Safety are included in the condensed, consolidated income statements of the Company. Proforma information is not provided as this acquisition was immaterial to the Company's financial statements.

Contingent Consideration for Prior Period Acquisitions

The terms of the April 2006 acquisition of the assets of Lifecor, Inc. ("Lifecor") provided for possible annual earn-out payments based upon revenue growth through fiscal 2010. The form of earn-out payments was at the discretion of the Company and could be made in the form of cash, Company stock, or a combination of the two. The earn-out payments for fiscal 2009 and 2010 were calculated as 100% of qualifying revenues earned in the current fiscal year in excess of the greater of the prior fiscal year qualifying revenues or $30 million. For fiscal 2010, approximately $26.3 million was accrued for payment to the former stockholders of Lifecor and was paid in the second quarter of fiscal 2011 in the form of cash. The fiscal 2010 earn-out payment was the final annual earn-out payment for the Lifecor acquisition. For fiscal 2009 and 2008, approximately $12.8 million and $4.5 million, respectively, was paid to Lifecor in the form of cash.

The terms of the March 2004 acquisition of the assets of Infusion Dynamics, Inc. ("Infusion Dynamics") also provided for possible annual earn-out payments based upon revenue growth through fiscal 2011. Because additional consideration is based on the growth of sales, a reasonable estimate of the future payments to be made cannot be determined. Annual earn-out payments to former stockholders of Infusion Dynamics, in the form of cash, were approximately $19,000 for both fiscal 2009 and fiscal 2008. For fiscal 2010, approximately $25,000 was accrued at the end of fiscal 2010 for payment to the former shareholders of Infusion Dynamics and was paid in cash during the first quarter of fiscal 2011.