This excerpt taken from the CVO 10-K filed Mar 2, 2006.
Acquisitions are accounted for under the purchase method of accounting; accordingly, the assets and liabilities of the acquired businesses have been recorded at estimated fair value at the date acquired with the excess of the purchase price over the estimated fair value recorded as goodwill.
In May 2005, the Company purchased the assets of Digidel, Inc., a provider of pre-press services to commercial printing companies in Philadelphia, Pennsylvania with annual sales of approximately
CENVEO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. Acquisitions (Continued)
$3.0 million. The purchase price was $3.6 million of which $0.7 million was allocated to tangible net assets, $0.3 million to intangible assets and $2.6 million to goodwill. The Company consolidated this operation with its commercial printing plant in Philadelphia.
In July 2004, the Company purchased the stock of Valco Graphics Inc., a commercial printing company in Seattle, Washington with annual sales of approximately $18.0 million. The purchase price was $9.6 million with $5.1 million allocated to tangible net assets and $4.5 million allocated to goodwill. Valco Graphics Inc. was consolidated with the Companys existing commercial printing operation in Seattle, WA.
In August 2004, the Company purchased the assets of WWP Property Management, Inc., a commercial printing company in San Francisco, California with annual sales of approximately $14.0 million. The purchase price was $2.8 million ($1.4 million paid in each of 2004 and 2005) with $2.7 million allocated to tangible net assets and $0.1 million allocated to goodwill. The Company has consolidated this operation with its existing commercial printing operation in San Francisco and is operating the combined entity as Cenveo, San Francisco.
The results of the acquired businesses have been included in the Companys consolidated results from their respective acquisition dates. Pro forma results for 2005 and 2004, assuming the acquisitions had been made at the beginning of the applicable period, have not been presented since they would not be materially different from the Companys reported results.
5. Discontinued Operations
In June 2004, the Company collected $2.0 million of an unsecured note receivable from the sale of its extrusion coating and laminating business segment of American Business Products, Inc. (Jen Coat) in 2000. The unsecured note was fully reserved at the time of the sale. The proceeds, net of tax, were recorded as a gain on disposal of discontinued operations in 2004.
The gain on disposal of discontinued operations recorded for 2003 reflects a change in the tax impact of the disposition of the Companys prime label business (Prime Label), which was sold in May 2002. This gain was partially offset by the accrual of additional expenses related to the sale of Prime Label and the sale of Curtis 1000 which was also sold in 2002.
Gain (loss) on disposal of discontinued operations is as follows for the years ended December 31, (in thousands):