Note 3: Acquisitions

On April 1, 2019, the Company completed the acquisition of certain assets of Cubic, Inc. for a cash purchase price of $2,356, net of $213 cash acquired. Transaction costs related to the purchase were a component of other production, distribution and operating costs in the Consolidated Statements of Operations and totaled $92, of which $86 and $6 were incurred in the years ended December 31, 2019 and 2018, respectively.

The new entity Cubic Creative, Inc. (“Cubic Creative”) is located in Tulsa, Oklahoma and has approximately 25 employees. This acquisition adds creative strategy services, which complement service offerings currently available to A. H. Belo clients. The expected benefit from providing these additional services was attributed to goodwill, all of which is expected to be deductible for tax purposes. See Note 6 – Goodwill and Intangible Assets for information on the goodwill impairment test conducted in the third quarter of 2019.

The table below sets forth the finalized allocation of the purchase price.



		Estimated Fair Value
Working capital, net of acquired cash	$	228
Property, plant and equipment		25
Other intangible assets - customer relationships		510
Goodwill		1,593
Total	$	2,356

Operating results of the business acquired have been included in the Consolidated Statements of Operations from the acquisition date forward. Operating results for the year ended December 31, 2019, included Cubic Creative operating revenue of $2,464 and pretax income of $1,885. Pro forma results of the Company, assuming the acquisition had occurred at the beginning of each period presented, would not be materially different from the results reported. The fair value of the assets acquired would be classified as Level III assets (unobservable inputs) in the fair value hierarchy.