|
BUSINESS ACQUISITION (Tables)
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12 Months Ended |
|
Dec. 31, 2012
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| BUSINESS ACQUISITION [Abstract] |
|
| Preliminary purchase price allocation |
The following table summarizes the final purchase price allocation of the fair values of the assets acquired and liabilities assumed as of December 31, 2012:
(Amounts in thousands) |
|
|
|
| |
|
|
|
Current assets |
|
$ |
21,354 |
|
Property, plant and equipment |
|
|
2,135 |
|
Intangible assets |
|
|
4,429 |
|
Goodwill |
|
|
13,016 |
|
Total assets acquired |
|
|
40,934 |
|
Current liabilities |
|
|
(15,803 |
) |
Customer contracts |
|
|
(6,015 |
) |
Non-current liabilities |
|
|
(2,091 |
) |
Total liabilities acquired |
|
|
(23,909 |
) |
Non-controlling interest |
|
|
(370 |
) |
Total consideration |
|
$ |
16,655 |
|
|
| Preliminary components of tangible assets acquired |
The following table summarizes the preliminary components of tangible assets acquired:
| |
|
|
|
Weighted |
| |
|
|
|
Average |
| |
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Preliminary |
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Estimated |
(Amounts in thousands) |
|
Fair Value |
|
Useful Life |
| |
|
|
|
|
Vehicles |
|
$ |
583 |
|
5.0 years |
Lab equipment |
|
|
1,235 |
|
7.0 years |
Office furniture and equipment |
|
|
317 |
|
4.0 years |
Total tangible assets |
|
$ |
2,135 |
|
|
|
| Change in Accounting Estimate [Line Items] |
|
| Recast Balance Sheet |
The following table summarizes the Company's recast and previously reported December 31, 2011 Consolidated Balance Sheets (in thousands):
| |
|
|
Recast
|
|
|
| |
|
|
December 31, 2011 (1)
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|
|
|
December 31, 2011 (2)
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|
|
|
Effect of Change |
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|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net of allowance for doubtful accounts |
|
$ |
19,106 |
|
|
$ |
16,848 |
|
|
$ |
(2,258 |
) |
(3) |
Unbilled receivables - current |
|
$ |
9,871 |
|
|
$ |
9,632 |
|
|
|
(239 |
) |
(3) |
Prepaid and other assets |
|
$ |
4,604 |
|
|
$ |
4,661 |
|
|
|
57 |
|
(9) |
Deferrred tax assets - current |
|
$ |
2,426 |
|
|
$ |
3,853 |
|
|
|
1,427 |
|
(4) |
Goodwill |
|
$ |
27,063 |
|
|
$ |
29,186 |
|
|
|
2,123 |
|
(7) |
Other intangible assets - net |
|
$ |
4,258 |
|
|
$ |
4,517 |
|
|
|
259 |
|
(8) |
Deferred tax asset, net of liabilities |
|
$ |
1,295 |
|
|
$ |
1,435 |
|
|
|
140 |
|
(4) |
Other assets |
|
$ |
1,595 |
|
|
$ |
1,560 |
|
|
|
(35 |
) |
(9) |
Total change |
|
|
|
|
|
|
|
|
|
$ |
1,474 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
13,117 |
|
|
$ |
13,313 |
|
|
$ |
196 |
|
(10) |
Accrued expenses |
|
$ |
9,533 |
|
|
$ |
9,434 |
|
|
|
(99 |
) |
(10) |
Billing in excess of costs and estimated earnings |
|
$ |
3,226 |
|
|
$ |
6,058 |
|
|
|
2,832 |
|
(5) |
Current portionof long-term debt |
|
$ |
3,936 |
|
|
$ |
3,521 |
|
|
|
(415 |
) |
(6) |
Long-term debt, less current portion |
|
$ |
15,007 |
|
|
$ |
14,195 |
|
|
|
(812 |
) |
(6) |
Accumulated deficit |
|
$ |
(9,505 |
) |
|
$ |
(9,733 |
) |
|
|
(228 |
) |
(11) |
Total change |
|
|
|
|
|
|
|
|
|
$ |
1,474 |
|
|
(1) |
As previously presented in the 2011 consolidated financial statement in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011. |
(2) |
As presented in the accompanying consolidated financial statements contained herein within this Form 10-K. |
(3) |
Represents additional allowance for doubtful accounts of approximately $2,213,000 recorded as a result of uncollected receivables from three major customers, reversal of $45,000 in uncollectable accounts receivable and reversal of unbilled receivables related to conditions that existed at the time of our acquisition. |
(4) |
Represents book to tax timing differences resulting from allowance for doubtful accounts and change in fair value of contracts as noted in footnote (3) and (5). |
(5) |
Represents change in fair value of two loss contracts due to change in estimated cost to complete to meet contract terms that existed as of acquisition date. |
(6) |
Resulted from termination on February 13, 2013 of the remaining portion (approximately $1,460,000) of a $2,500,000 Note ("October Note") entered on October 31, 2011. The termination of the October Note resulted from settlement of certain claims made by the Company against TNC primarily from the breach of representation regarding the cost to complete a certain contract that existed at acquisition. A New Note in the amount of $230,000 was issued to TNC in placement of the October Note that was cancelled (see above for further discussion of the October and New Notes). |
(7) |
Reflects additional goodwill recorded since initial acquisition date in finalizing the final purchase price allocation related to acquired assets and liabilities under this business combination. |
(8) |
Reflects change in fair value of acquired contracts based on change in estimated cash flow related to approval of certain request for equitable adjustments submitted prior to acquisition. |
(9) |
Represents tax true-up and write-off of bid deposit that existed as of the acquisition date. |
(10) |
Represents expenses and unrecorded vendor invoices for services rendered prior to acquisition. |
(11) |
Represents change in amortization of fair value of contracts due to change in estimated cost to complete to meet contract terms that existed as of acquisition date and the related tax effect. |
|
| Recast Statement of Operations |
The following table summarizes the Company's recast and previously reported December 31, 2011 Consolidated Statements of Operations (in thousands):
| |
|
|
|
|
Recast |
|
|
|
|
| |
|
For the year ended |
|
|
For the year ended |
|
|
Effect of |
|
| |
|
December 31, 2011 (1)
|
|
|
December 31, 2011 (2)
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|
Change (3)
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| |
|
|
|
|
|
|
|
|
|
Net revenue |
|
$ |
118,610 |
|
|
$ |
118,097 |
|
|
$ |
(513 |
) |
Cost of goods sold |
|
$ |
89,822 |
|
|
$ |
89,677 |
|
|
$ |
(145 |
) |
Gross profit |
|
$ |
28,788 |
|
|
$ |
28,420 |
|
|
$ |
(368 |
) |
Income from continuing operations before income taxes |
|
$ |
10,845 |
|
|
$ |
10,477 |
|
|
$ |
(368 |
) |
Income tax benefit |
|
$ |
(955 |
) |
|
$ |
(1,095 |
) |
|
$ |
140 |
|
Income from continuing operations |
|
$ |
11,800 |
|
|
$ |
11,572 |
|
|
$ |
(228 |
) |
Net income |
|
$ |
14,086 |
|
|
$ |
13,858 |
|
|
$ |
(228 |
) |
Net income attributable to Perma-Fix Environmental |
|
$ |
14,064 |
|
|
$ |
13,836 |
|
|
$ |
(228 |
) |
Services, Inc. common stockholders |
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| |
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Net income per common share attributable to Perma-Fix |
|
|
|
|
|
|
|
|
|
Environmental Services, Inc. stockholders - basic: |
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share attributable to Perma-Fix |
|
|
|
|
|
|
|
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|
Environmental Services, Inc. stockholders - diluted: |
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
- |
|
| |
(1) |
As previously presented in the 2011 consolidated financial statement in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011. |
| |
(2) |
As presented in the accompanying consolidated financial statements contained herein within this Form 10-K. |
| |
(3) |
Represents change in amortization of fair value of contracts due to change in estimated cost to complete to meet contract terms that existed as of acquisition date and the related tax effect. |
|
| Recast Statement of Cash Flows |
The following table summarizes the Company's recast and previously reported December 31, 2011 Consolidated Statements of Cash Flows (in thousands):
| |
|
|
|
|
Recast |
|
|
|
|
| |
|
For the year ended |
|
|
For the year ended |
|
|
Effect of |
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| |
|
December 31, 2011 (1)
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|
|
December 31, 2011 (2)
|
|
|
Change (3)
|
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| |
|
|
|
|
|
|
|
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Net Income |
|
$ |
14,086 |
|
|
$ |
13,858 |
|
|
$ |
(228 |
) |
| |
|
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Adjustment to reconcile net income from continuing operations to cash provided by operations: |
|
|
|
|
|
|
|
|
|
|
|
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Amortization of fair value of customer contracts |
|
$ |
(775 |
) |
|
$ |
(262 |
) |
|
$ |
513 |
|
Depreciation and amortization |
|
$ |
4,961 |
|
|
$ |
4,816 |
|
|
$ |
(145 |
) |
Deferred tax benefit |
|
$ |
(3,090 |
) |
|
$ |
(3,230 |
) |
|
$ |
(140 |
) |
Accounts payable and accrued expenses |
|
$ |
148 |
|
|
$ |
4 |
|
|
$ |
(144 |
) |
| |
(1) |
As previously presented in the 2011 consolidated financial statement in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011. |
| |
(2) |
As presented in the accompanying consolidated financial statements contained herein within this Form 10-K. |
| |
(3) |
Represents change in amortization of fair value of contracts due to change in estimated cost to complete to meet contract terms that existed as of acquisition date and the related tax effect. |
|
| Pro Forma Information |
The following unaudited pro forma financial information presents the combined results of operations of SEC and Perma-Fix as though the acquisition had occurred as of the beginning of the period presented below, which is January 1, 2011. The pro forma financial information does not necessarily represent the results of operations that would have occurred had SEC and Perma-Fix been a single company during the period presented, nor does management believe that the pro forma financial information presented is necessarily representative of future operating results.
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Year Ended |
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December 31, 2011 |
|
(Amount in thousands, except per share data) |
|
(Unaudited) |
|
| |
|
|
|
Revenue |
|
$ |
193,000 |
|
Net income from continuing operations |
|
$ |
4,400 |
|
Net income per share from continuing operations - basic |
|
$ |
.08 |
|
Net income per share from continuing operations - diluted |
|
$ |
.08 |
|
|