Annual report pursuant to Section 13 and 15(d)

Composition of Certain Financial Statement Captions

v2.4.0.6
Composition of Certain Financial Statement Captions
12 Months Ended
Dec. 31, 2011
Business and Organization and Composition of Certain Financial Statement Captions [Abstract]  
Composition of Certain Financial Statement Captions

Note 5 Composition of Certain Financial Statement Captions

 

                 
    December 31,  

(in thousands)

  2011     2010  

Accounts receivable, net

               

Accounts receivable

  $ 12,984     $ 12,135  

Less allowance for doubtful accounts

    (440     (279
   

 

 

   

 

 

 
    $ 12,544     $ 11,856  
   

 

 

   

 

 

 

Inventories, net

               

Finished products

  $ 11,100     $ 13,643  

Work in-process

    277       406  

Raw materials (components)

    2,287       2,638  

Less inventory reserve

    (325     (264
   

 

 

   

 

 

 
    $ 13,339     $ 16,423  
   

 

 

   

 

 

 

Prepaid expenses and other current assets

               

Prepaid supplies

  $ 256     $ 37  

Other receivables

    288       666  

Prepaid insurance

    176       116  

Taxes recoverable

    542       1,441  

Other

    917       420  
   

 

 

   

 

 

 
    $ 2,179     $ 2,680  
   

 

 

   

 

 

 

Property and equipment, net

               

Machinery and equipment

  $ 4,850     $ 2,460  

Building

    656       288  

Land

    437       495  

Furniture and fixtures

    313       203  

Software

    630       573  

Leasehold improvements

    309       21  

Less accumulated depreciation

    (1,837     (1,451
   

 

 

   

 

 

 
    $ 5,358     $ 2,589  
   

 

 

   

 

 

 

Intangible assets, net

               

Technology

  $ 47,100     $ —    

Customer relationships

    18,386       4,741  

In-process research and development

    10,000       —    

Product registrations

    3,895       4,227  

Tradename

    827       471  

Covenants not to compete

    1,560       32  

Other

    297       7  

Less accumulated amortization

    (5,335     (2,694
   

 

 

   

 

 

 
    $ 76,730     $ 6,784  
   

 

 

   

 

 

 

Accrued expenses

               

Income taxes payable

  $ 484     $ 422  

Deferred revenue

    530       50  

Clinical trials

    7       801  

Customer deposits

    255       79  

Professional fees

    632       232  

Employee benefits

    907       225  

Other

    2,141       1,561  
   

 

 

   

 

 

 
    $ 4,956     $ 3,370  
   

 

 

   

 

 

 

Other long-term liabilities

               

Contingent consideration – Claros

  $ 12,745     $ —    

Contingent consideration – FineTech

    4,747       —    

Contingent consideration – CURNA

    510       —    

Deferred tax liabilities

    6,863       940  

Other, including deferred revenue

    578       127  
   

 

 

   

 

 

 
    $ 25,443     $ 1,067  
   

 

 

   

 

 

 

 

The following table summarizes the fair values assigned to our major intangible asset classes upon each acquisition:

 

                                                 

(in thousands)

  OPKO
Chile
    Exakta
OPKO
    CURNA     Claros     FineTech     Weighted
average
amortization
period
 

Technology

  $ —       $ —       $ —       $ 44,400     $ 2,700       15 years  

In-process research and development

    —         —         10,000       —         —         Indefinite  

Customer relationships

    3,945       121       —         —         14,200       6 years  

Product registrations

    3,529       77       —         —         —         10 years  

Covenants not to compete

    —         70       —         —         1,500       5 years  

Tradename

    352       77       —         —         400       3 years  

Other

    —         —         290       —         —         5 years  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

Total identified intangible assets

    7,826       345       10,290       44,400       18,800          

Goodwill

    4,983       21       4,827       17,977       11,623       Indefinite  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

Total intangible assets acquired

  $ 12,809     $ 366     $ 15,117     $ 62,377     $ 30,423          
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

All of the intangible assets and goodwill acquired relate to our acquisitions of OPKO Chile, Exakta-OPKO, CURNA, Claros, and FineTech. The weighted average period prior to the next renewal or extension for our acquired product registrations is 1.7 years. We do not anticipate capitalizing the cost of product registration renewals, rather we expect to expense these costs, as incurred. Our goodwill is not tax deductible for income tax purposes in Chile, the U.S. or Israel.

The changes to goodwill for the year ended December 31, 2011 are primarily due to the acquisitions of CURNA, Claros, and FineTech, as well as a $0.3 million increase resulting from foreign exchange translation of the assets and liabilities of OPKO Chile. The purchase price allocation of the assets acquired in the CURNA, Claros, and FineTech acquisitions are subject to change while contingencies that existed on the acquisition dates are resolved.

The following table reflects the changes in the allowance for doubtful accounts, provision for inventory reserve and tax valuation allowance accounts for continuing operations:

 

                                         

(in thousands)

  Beginning
balance
    Charged to
expense
    Written-off     Charged to
other
    Ending
balance
 

2011

                                       

Allowance for doubtful accounts

  $ (279     (257     96       —       $ (440
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Inventory reserve

  $ (264     (607     546       —       $ (325
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tax valuation allowance

  $ (47,341     19,358       —         (25,272   $ (53,255
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

2010

                                       

Allowance for doubtful accounts

  $ —         (279     —         —       $ (279
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Inventory reserve

  $ (140     (274     150       —       $ (264
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tax valuation allowance

  $ (46,836     (505     —         —       $ (47,341