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Business Combinations
 9 Months Ended
Sep. 30, 2014
Business Combinations [Abstract]  
Business Combinations

NOTE 11 – BUSINESS COMBINATIONS

As part of our ongoing strategy to increase market share in certain markets, we completed one business combination during the nine months ended September 30, 2013 and two business combinations during the nine months ended September 30, 2014. The entities acquired during the nine months ended September 30, 2014 were individually insignificant to our consolidated financial statements. The goodwill to be recognized in conjunction with these business combinations is attributable to expected synergies. Goodwill resulting from each acquisition is not expected to be deductible for tax purposes.

2013

On March 16, 2013, we acquired 100% of the membership interests of Ace Insulation Contractors, Inc. (“Ace”). The purchase price of Ace consisted of cash of $687 and a seller obligation for $300. We combined Ace with an existing branch upon acquisition and as such, we are unable to differentiate the results of operations between Ace and the existing branch for the three and nine months ended September 30, 2014 and September 30, 2013.

2014

On March 24, 2014, we acquired 100% of the common stock of U.S. Insulation Corp. (“U.S. Insulation”) and on August 11, 2014, we acquired 100% of the common stock of Marv’s Insulation, Inc. (“Marv’s Insulation”). The purchase price of our 2014 acquisitions, in aggregate, consisted of cash of $3,366 and seller obligations of $454. Revenue and net income, in aggregate, of these two entities since their dates of acquisition included in our Condensed Consolidated Statement of Operations for the three months ended September 30, 2014 were $3,990 and $462, respectively. Revenue and net income of these two entities since their dates of acquisition included in our Condensed Consolidated Statement of Operations for the nine months ended September 30, 2014 were $6,936 and $604, respectively.

 

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions approximated the following:

 

     2014     2013  

Cash

    $ 53      $ —     

Accounts receivable

      1,496        213   

Inventory

      262        14   

Other current assets

      123        —     

Property and equipment

      554        263   

Intangibles

      1,561        1,106   

Goodwill

      1,958        —     

Accounts payable and accrued expenses

      (1,727 )      (609 ) 

Deferred tax liability

      (460 )      —     
  

 

 

    

 

 

  

Total purchase price

    $ 3,820      $ 987   
  

 

 

    

 

 

  

Seller obligations

    $ 454      $ 300   

Cash paid

      3,366        687   
  

 

 

    

 

 

  

Total purchase price

    $ 3,820      $ 987   
  

 

 

    

 

 

  

Estimates of acquired intangible assets related to the acquisitions are as follows:

 

     2014      2013  

Acquired intangibles assets

    Estimated
Fair Value		      Weighted
Average
Estimated
Useful
Life (yrs)		      Estimated
Fair Value		      Weighted
Average
Estimated
Useful
Life (yrs)		  

Customer relationships

    $ 1,007         10       $ 826         10   

Trademarks and trade names

      399         15         280         15   

Non-competition agreements

      155         5         0         0   

Pro Forma Information

The unaudited pro forma information has been prepared as if the 2014 acquisitions had taken place on January 1, 2013 and the 2013 acquisition had taken place on January 1, 2012. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transactions actually taken place on January 1, 2013 and 2012, and the unaudited pro forma information does not purport to be indicative of future financial operating results.

 

     Pro forma for the three      Pro forma for the nine  
     months ended September 30,      months ended September 30,  
     2014      2013      2014     2013  

Net revenue

    $ 140,856       $ 118,821       $ 376,725      $ 321,382   

Net income

      5,898         2,851         8,685        3,541   

Net income (loss) attributable to common stockholders

      5,898         1,273         (11,212 )      (1,056 ) 

Net income (loss) per share attributable to common stockholders (basic and diluted)

      0.19         0.06         (0.38 )      (0.05 ) 

Unaudited pro forma net income has been calculated after adjusting the combined results of the Company to reflect additional intangible asset amortization expense of $8 and $40 for the three months ended September 30, 2014 and 2013, respectively, and $66 and $144 for the nine months ended September 30, 2014 and 2013, respectively.