Quarterly report pursuant to Section 13 or 15(d)

Summary of Significant Accounting Policies (Tables)

v3.5.0.2
Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2016
Changes in Warranty Liability

Changes in the Company’s warranty liability for the six months ended June 30, 2016 are as follows:

 

(in thousands)

   2016  

Warranty liability, January 1

   $ 423   

Provisions for current year sales

     48   

Current period claims

     (67
  

 

 

 

Warranty liability, June 30

   $ 404   
  

 

 

 
Fair Value Remeasurement Based on Significant Inputs Not Observable, Level 3 Measurement

The Company determines the fair value of acquisition liabilities on a recurring basis based on a probability-weighted discounted cash flow analysis and Monte Carlo simulation. The fair value remeasurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in the fair value hierarchy. In each period, the Company reassesses its current estimates of performance relative to the stated targets and adjusts the liability to fair value. Any such adjustments are included as a component of selling, general and administrative expense in the Consolidated Statement of Operations. Changes in the fair value of acquisition liabilities during the six months ended June 30, 2016 were as follows:

 

(in thousands)

   2016  

Fair value, January 1

   $ 8,453   

Fair value of acquisition liabilities paid during the period

     (6,917

Fair value of consideration issued

     4,132   

Change in fair value

     832   
  

 

 

 

Fair value, June 30

     6,500   
  

 

 

 
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

The following table presents quantitative information about Level 3 fair value measurements as of June 30, 2016:

 

(in thousands)

   Fair Value at
June 30, 2016
    

Valuation Technique

   Unobservable Inputs

Earnout liabilities

   $ 5,595       Income approach    Discount rate—19.5%

Stock distribution price floor

     905       Monte Carlo    Volatility—60%
      simulation    Risk free rate—1.2%
         Dividend yield—0%
  

 

 

       

Fair value, June 30, 2016

   $ 6,500         
  

 

 

       
Summary of Changes in Allowance for Doubtful Accounts

The following summarizes the changes in the allowance for doubtful accounts for the six months ended June 30, 2016:

 

(in thousands)

   2016  

Allowance for doubtful accounts, January 1

   $ 1,005   

Additions

     482   

Write-offs

     (425
  

 

 

 

Allowance for doubtful accounts, June 30

   $ 1,062   
  

 

 

 
Estimated Useful Lives of Property and Equipment

The estimated useful lives of property and equipment are as follows:

 

     Estimated useful lives

Machinery and equipment

   3-7 years

Furniture and fixtures

   5-7 years

Computers and software

   3-7 years

Motor vehicles

   5 years

Leasehold improvements

   Lesser of lease term or estimated useful life