Acquisition Of PC Werth

12 Months Ended

Dec. 31, 2015

Acquisition Of PC Werth [Abstract]

Acquisition Of PC Werth

4. ACQUISTION OF PC WERTH

On November 3, 2015, the Company acquired the assets of PC Werth Ltd, a leading supplier of hearing healthcare products and equipment to the United Kingdom’s National Health Service (NHS). Under the terms of the agreement, the Company paid PC Werth Ltd a total of $197 in cash assumed payables of $393.

The Company accounted for the transaction as a business combination in the fourth quarter of 2015.   In accordance with ASC 805, the purchase price is being allocated based on estimates of the fair value of assets acquired and liabilities assumed.

The purchase price was allocated as follows:

Inventory	$	155
Property, Plant and Equipment		39
Intellectual Property		39
Goodwill		357
Payables		(393)
	$	197

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired.  The establishment of goodwill was primarily due to the expected revenue growth that is attributable to increased market penetration from future customers.

The Company has recognized additional revenue of $414 and net earnings (losses) of approximately ($265) relating to the sales of the hearing devices and accessories from November 2015 through December 31, 2015.  Unaudited proforma revenues were approximately $73,900 and $73,500 for the years ended December 31, 2015 and 2014, respectively assuming the acquisition occurred on January 1, 2014.  Unaudited proforma earnings and basic and diluted earnings per share did not differ materially from actual results reported.

Acquisition costs of $143 were primarily incurred and recorded during the year ended December 31, 2015 and are included in other expenses, net in the consolidated statements of operations. We consider the majority of the acquisition costs to be of the non-operating, miscellaneous nature, as they were incurred as part of a non-operating activity, a business acquisition.