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Business Acquisitions | 9 Months Ended
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Sep. 30, 2014
Business Combinations [Abstract] |
Business Acquisitions | l 30, 2014 Fuel Tech acquired 100% of the capital stock of Cleveland Roll Forming Environmental Division, Inc. d/b/a PECO (“PECO”), and FGC, Inc. ("FGC"), both Ohio corporations. Pursuant to the stock purchase agreements, PECO and FGC became wholly owned subsidiaries of Fuel Tech. Fuel Tech paid to the sellers total net cash consideration of $8,079, which consists of the agreed upon purchase price of $8,250 plus a working capital adjustment of $391, less cash acquired of $562. The stock purchase agreements contains customary representations, warranties and indemnities. PECO specializes in electrostatic precipitator (ESP) rebuilds, retrofits and associated products and services. FGC specializes in flue gas conditioning to enhance electrostatic precipitator and fabric filter performance in boilers. These acquisitions broaden our APC product portfolio and grants us immediate access into the fast-growing particulate control market, creating opportunities both domestically and abroad. The PECO and FGC acquisitions is being accounted for using the acquisition method of accounting whereby the total purchase price is allocated to tangible and intangible assets and liabilities based on their estimated fair market values on the date of acquisition. These fair value estimates will be based on a third party valuation that is expected to be finalized in the fourth quarter of 2014. The fair value of identifiable intangible assets was measured based upon significant inputs that were not observable in the market, and therefore are classified as Level 3. The key assumptions include: (i) management's projection of future cash flows based upon past experience and future expectations, and (ii) an assumed discount rate of 18.5% for PECO and 33.5% for FGC. The following table summarizes the approximate fair values of the assets acquired and liabilities assumed at the date of acquisition and incorporates the provisional adjustments in our measurements since they were original reported in our Form 10-Q for the period ended June 30, 2014. The approximate fair value of the assets and liabilities assumed, and the related tax balances, are based on preliminary estimates and assumptions. These preliminary estimates and assumptions could change significantly during the purchase price measurement period as we finalize the valuations of these assets and liabilities. Such changes could result in material variances between the Company's future financial results and the amounts presented in the unaudited pro-forma information, including variances in estimated purchase price, fair values recorded, and expenses associated with these items.
|  | As Reported on June 30, 2014 | Provisional Adjustments | Estimated Fair Values September 30, 2014
Current assets |  | $ | 2,365 |  | $ | 92 |  | $ | 2,457 |
Property, plant and equipment |  | 281 |  | (281 | ) | — |
Identifiable intangible assets |  | — |  | 4,126 |  | 4,126 |
Current and long-term liabilities assumed |  | (2,035 | ) | (1,557 | ) | (3,592 | )
Total identifiable net assets acquired |  | 611 |  | 2,380 |  | 2,991 |
Goodwill |  | 7,468 |  | (2,380 | ) | 5,088 |
Total assets acquired |  | $ | 8,079 |  | $ | — |  | $ | 8,079 |
The goodwill recorded in connection with the above acquisition is primarily attributable to the strong cash flow expected from the acquisitions as a result of the synergies with our APC technology segment expected to arise after the Company's acquisition of the businesses. The goodwill and identifiable intangibles are not deductible for tax purposes. The preliminary fair value assigned to finite lived intangible assets as a result of the acquisitions was as follows:
Description |  | Amount | Useful Life (Yrs)
Order backlog |  | $ | 470 |  | 1.0
Trademarks |  | 90 |  | 2.0
Customer relationships |  | 540 |  | 4.0
Developed technology |  | 3,230 |  | 7.0
Revenue in excess of billings |  | 283 |  | 0.5
Assumed deferred revenue obligation |  | (487 | ) | 1.0
Total identifiable assets acquired |  | $ | 4,126 |  | 6.1
The following table summarizes the net sales and earnings after income taxes of PECO and FGC since the acquisition date, April 30, 2014, which is included in the consolidated statements of operations for the three and nine months ended September 30, 2014:
|  | Three Months Ended September 30, 2014 |  | Nine Months Ended September 30, 2014
Revenue |  | $ | 1,052 |  |  | $ | 3,493 |
Net income before taxes |  | 243 |  |  | 837 |
Net income before taxes per Common Share |  |  |  |
Basic |  | $ | 0.01 |  |  | $ | 0.04 |
Diluted |  | $ | 0.01 |  |  | $ | 0.04 |
The following unaudited pro-forma information represents the Company's results of operations as if the acquisition date had occurred on January 1, 2013:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2014 |  | 2013 |  | 2014 |  | 2013
Revenue |  | $ | 21,482 |  |  | $ | 34,727 |  |  | $ | 66,030 |  |  | $ | 91,826 |
Net income / (loss) |  | 712 |  |  | 3,961 |  |  | 194 |  |  | 5,429 |
Net income / (loss) per Common Share |  |  |  |  |  |  |  |
Basic |  | $ | 0.03 |  |  | $ | 0.18 |  |  | $ | 0.01 |  |  | $ | 0.24 |
Diluted |  | $ | 0.03 |  |  | $ | 0.18 |  |  | $ | 0.01 |  |  | $ | 0.24 |
The pro-forma results have been prepared for informational purposes only and include adjustments to eliminate acquisition related expenses, inter-company transactions, amortization of acquired intangible assets with finite lives, and to record the income tax consequences of the pro-forma adjustments. These pro-forma results do not purport to be indicative of the results of operations that would have occurred had the purchases been made as of the beginning of the periods presented or of the results of operations that may occur in the future. Transaction costs incurred for the acquisition date were $59, of which $48 was recognized during the three months ended June 30, 2014, and are included included in general and administrative expenses in the Consolidated Statement of Operations for the three and nine months ended September 30, 2014.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 + Details
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