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, 2012
Business and Organization/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)

  2012     2011  

Accounts receivable, net:

               

Accounts receivable

  $ 21,636     $ 12,984  

Less: allowance for doubtful accounts

    (474     (440
   

 

 

   

 

 

 
    $ 21,162     $ 12,544  
   

 

 

   

 

 

 

Inventories, net:

               

Finished products

  $ 17,963     $ 11,100  

Work in-process

    688       277  

Raw materials (components)

    4,923       2,287  

Less: inventory reserve

    (1,313     (325
   

 

 

   

 

 

 
    $ 22,261     $ 13,339  
   

 

 

   

 

 

 

Prepaid expenses and other current assets:

               

Prepaid supplies

  $ 443     $ 256  

Other receivables

    886       288  

Prepaid insurance

    301       176  

Taxes recoverable

    1,493       542  

Other

    4,750       917  
   

 

 

   

 

 

 
    $ 7,873     $ 2,179  
   

 

 

   

 

 

 

Property and equipment, net:

               

Machinery and equipment

  $ 7,984     $ 4,850  

Building

    3,457       656  

Land

    2,619       437  

Furniture and fixtures

    1,908       313  

Software

    853       630  

Leasehold improvements

    2,616       309  

Less: accumulated depreciation

    (3,732     (1,837
   

 

 

   

 

 

 
    $ 15,705     $ 5,358  
   

 

 

   

 

 

 

Investment properties, net:

               

Building

  $ 384     $ —    

Land

    450       —    

Less: accumulated depreciation

    (13     —    
   

 

 

   

 

 

 
    $ 821     $ —    
   

 

 

   

 

 

 

Intangible assets, net:

               

Technology

  $ 52,810     $ 47,100  

Customer relationships

    23,088       18,386  

In-process research and development

    11,546       10,000  

Product registrations

    9,637       3,895  

Tradename

    3,746       827  

Covenants not to compete

    8,662       1,560  

Other

    367       297  

Less: accumulated amortization

    (14,072     (5,335
   

 

 

   

 

 

 
    $ 95,784     $ 76,730  
   

 

 

   

 

 

 

Accrued expenses:

               

Income taxes payable

  $ 1,614     $ 484  

Deferred revenue

    1,518       530  

Clinical trials

    50       7  

Customer deposits

    —         255  

Professional fees

    675       632  

Employee benefits

    3,319       907  

Deferred acquisition payments, net of discount

    6,172       —    

Contingent consideration

    5,126       —    

Other

    6,182       2,141  
   

 

 

   

 

 

 
    $ 24,656     $ 4,956  
   

 

 

   

 

 

 

 

                 
    December 31,  

(In thousands)

  2012     2011  

Other long-term liabilities:

               

Contingent consideration – Farmadiet

  $ 532     $ —    

Contingent consideration – OPKO Diagnostics

    11,310       12,745  

Contingent consideration – FineTech

    2,578       4,747  

Contingent consideration – CURNA

    510       510  

Deferred acquisition payments, net of discount

    3,931       —    

Long-term debt

    5,150       —    

Deferred tax liabilities

    9,777       6,863  

Other, including deferred revenue

    380       578  
   

 

 

   

 

 

 
    $ 34,168     $ 25,443  
   

 

 

   

 

 

 

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

 

                                                                         

(In thousands)

  OPKO
Chile(1)
    Exakta
OPKO
    CURNA     OPKO
Diagnostics
    FineTech     Farmadiet     OURLab     SciGen     Weighted
average
amortization
period
 

Technology

  $ —       $  —       $ —       $ 44,400     $ 2,700     $ 5,437     $ 1,370     $ 1,090       9 years  

In-process research and development

    —         —         10,000       —         —         1,459       —         —         Indefinite  

Customer relationships

    3,945       121       —         —         14,200       436       3,860       40       6 years  

Product registrations

    5,829       77       —         —         —         2,930       —         —         9 years  

Covenants not to compete

    —         70       —         —         1,500       187       6,900       —         5 years  

Tradename

    1,032       77       —         —         400       349       1,830       —         4 years  

Other

    —         —         290       —         —         —         70       —         4 years  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

Total identified intangible assets

    10,806       345       10,290       44,400       18,800       10,798       14,030       1,130          

Goodwill

    5,441       21       4,827       17,977       11,623       8,062       29,629       760       Indefinite  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

Total intangible assets acquired

  $ 16,247     $ 366     $ 15,117     $ 62,377     $ 30,423     $ 18,860     $ 43,659     $ 1,890          
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

 

(1) 

Includes intangible assets and goodwill related to ALS acquisition.

All of the intangible assets and goodwill acquired relate to our acquisitions of OPKO Chile, including the intangibles assets and goodwill related to the ALS acquisition, Exakta-OPKO, CURNA, OPKO Diagnostics, FineTech, Farmadiet and OURLab. The pharmaceutical, nutraceutical and veterinary products from ALS and Farmadiet do not require ongoing product renewals. 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., Spain, or Israel.

The change in value of the intangible assets and goodwill are primarily due to the acquisitions of ALS, Farmadiet, and OURLab, as well as the foreign currency fluctuations between the Chilean and Mexican pesos and the Euro against the U.S. dollar at December 31, 2012 and 2011. The purchase price allocation of the assets acquired in the ALS, Farmadiet, and OURLab 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
 

2012

                                       

Allowance for doubtful accounts

  $ (440     (86     86       (34   $ (474
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Inventory reserve

  $ (325     (2,544     1,582       (26   $ (1,313
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tax valuation allowance

  $ (53,255     9,626       —         (15,516   $ (59,145
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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