XML 47 R32.htm IDEA: XBRL DOCUMENT v3.7.0.1
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2016
Fair Value Disclosures [Abstract]  
Fair Values of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the fair values of our assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 (in thousands):

 

 

 

 

 

 

Quoted Prices in

 

 

 

 

 

 

Significant Other

 

 

 

 

 

 

Active Markets for

 

 

Significant Other

 

 

Unobservable

 

 

 

 

 

 

Identical Assets

 

 

Observable Inputs

 

 

Inputs

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

$

9,569

 

 

$

9,569

 

 

$

—

 

 

$

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration - Current

$

2,775

 

 

$

—

 

 

$

—

 

 

$

2,775

 

Contingent consideration - Long-term

 

2,381

 

 

 

—

 

 

 

—

 

 

 

2,381

 

 

$

5,156

 

 

$

—

 

 

$

—

 

 

$

5,156

 

The following table summarizes the fair values of our assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 (in thousands):

 

 

 

 

 

 

Quoted Prices in

 

 

 

 

 

 

Significant Other

 

 

 

 

 

 

Active Markets for

 

 

Significant Other

 

 

Unobservable

 

 

 

 

 

 

Identical Assets

 

 

Observable Inputs

 

 

Inputs

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

$

4,657

 

 

$

4,657

 

 

$

—

 

 

$

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration - Long-term

$

3,889

 

 

$

—

 

 

$

—

 

 

$

3,889

 

 
Changes in Fair Value of Level 3 Contingent Consideration

Changes in the fair value of our Level 3 contingent consideration for the years ended December 31, 2016 and 2015 were as follows (in thousands):

 

 

Contingent Consideration

 

Balance at December 31, 2014

$

—

 

Acquisition of Applimotion

 

965

 

Fair value adjustment of Applimotion

 

430

 

Acquisition of Lincoln Laser

 

2,344

 

Acquisition of Skyetek

 

150

 

Balance at December 31, 2015

$

3,889

 

Fair value adjustment of Applimotion

 

2,178

 

Fair value adjustment of Lincoln Laser

 

(911

)

Balance at December 31, 2016

$

5,156

 

 
Quantitative Information Associated with Fair Value Measurement of Company's Level 3 Financial Instrument

The following table provides quantitative information associated with the fair value measurement of the Company’s Level 3 liabilities:

 

 

 

Liability

  

December 31, 2016 Fair Value

(in thousands)

  

Valuation Technique

  

Unobservable Inputs

  

Percentage Applied

Contingent consideration (Applimotion) (1)

  

$3,573

  

Monte Carlo

simulation

  

Historical and projected revenues for fiscal years 2015 to 2017

Revenue volatility

Cost of debt

WACC

 

  

N/A

 

41.3%

3.49%

11.0%

Contingent consideration (Lincoln Laser) (2)

 

$1,433

 

N/A

 

Historical revenues

 

100%

 

 

 

(1)

Based on Applimotion’s fiscal 2015 and 2016 revenue results, the Company will pay $1.2 million contingent consideration in the first quarter of 2017.

 

(2)

The Company will pay $1.4 million as the final Lincoln Laser contingent consideration payment in the first quarter of 2017.