ACQUISITION

12 Months Ended

Dec. 31, 2012

ACQUISITION [Abstract]

ACQUISITION

NOTE 3—ACQUISITION

On February 2, 2012, Cutera acquired certain assets and liabilities of Iridex's global aesthetics business unit for $5.1 million in cash. This business is engaged in developing, manufacturing, marketing and servicing laser-based medical systems and delivery devices. The business purpose of this transaction was to acquire access to an expanded installed base of customers, add to Cutera's product offerings and acquire a recurring stream of service revenue. This acquisition was considered a business combination for accounting purposes, and as such, in addition to valuing all the assets, the Company recorded goodwill associated with the expected synergies from leveraging the customer relationships and integrating new product offerings into the Company's business.

The fair values of the assets acquired were determined to be $4.8 million of net tangible and intangible assets and $1.3 million of goodwill. The customer relationship intangible assets are being amortized over 5 years on a straight-line basis. Other intangible assets are being amortized over 11 months to 5 years from the date of acquisition on a straight-line basis.

The following table summarizes the fair value as of February 2, 2012 of the net assets acquired (in thousands):

Purchase price paid	$	5,091
Assets (liabilities acquired):
Inventory		1,552
Customer relationship intangible assets		2,510
Other identified intangible assets		780
Goodwill		1,339
Deferred service revenue		(780	)
Accrued warranty liability		(310	)
Total	$	5,091

The identifiable intangible assets and goodwill identified above shall be deductible for income taxes over a useful economic life of 15 years.

The Company acquired the Iridex aesthetics business unit on February 2, 2012. Disclosure of the amounts of revenue and earnings of the assets and liabilities of the acquired Iridex aesthetics business, separately from the Company's, is not practicable because the acquired business was immediately integrated into the Company's operations. Based on Iridex's Form 10-K for the year ended December 2011, the revenue of the aesthetics business unit was reported to be $10.8 million and $11.4 million and the earnings were $469,000 and $1.4 million for the fiscal years ended December 31, 2011 and January 1, 2011, respectively.