FADV » Topics » We may not be able to realize the entire book value of goodwill from acquisitions.

These excerpts taken from the FADV 10-K filed Feb 26, 2009.

We may not be able to realize the entire book value of goodwill from acquisitions.

As of December 31, 2008, we have approximately $731.4 million of goodwill. We have implemented the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” which requires that existing goodwill not be amortized, but instead be assessed annually for impairment or sooner if circumstances indicate a possible impairment. We monitor for impairment of goodwill on past and future acquisitions. In the event that the book value of goodwill is impaired, any such impairment would be charged to earnings in the period of impairment. The Company’s annual evaluation in 2008 resulted in an impairment loss of $19.7 million ($19.5 million net of tax) in the Data Services segment based primarily upon diminished earnings and cash flow expectations for the lead generation reporting unit and lower residual valuation multiples existing in the present market conditions. The lead generation reporting unit is 70% owned by First Advantage and 30% owned by First American; therefore, the Company recorded a reduction of minority interest expense of $5.7 million related to the impairment loss. See Note 5—Goodwill and Intangible Assets for additional information regarding the impairment loss. Due to significant volatility in the current markets, the Company’s operations may be negatively impacted in the future to the extent that exposure to impairment losses may be increased. There can be no assurances that future impairment of goodwill under SFAS No. 142 will not have a material adverse effect on our business, financial condition or results of operations. The goodwill valuation is performed by management.

We may not be able to realize the entire book value of goodwill from acquisitions.

As of December 31, 2008, we have approximately $731.4 million of goodwill. We have implemented the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” which requires that existing goodwill not be amortized, but instead be assessed annually for impairment or sooner if circumstances indicate a possible impairment. We monitor for impairment of goodwill on past and future acquisitions. In the event that the book value of goodwill is impaired, any such impairment would be charged to earnings in the period of impairment. The Company’s annual evaluation in 2008 resulted in an impairment loss of $19.7 million ($19.5 million net of tax) in the Data Services segment based primarily upon diminished earnings and cash flow expectations for the lead generation reporting unit and lower residual valuation multiples existing in the present market conditions. The lead generation reporting unit is 70% owned by First Advantage and 30% owned by First American; therefore, the Company recorded a reduction of minority interest expense of $5.7 million related to the impairment loss. See Note 5—Goodwill and Intangible Assets for additional information regarding the impairment loss. Due to significant volatility in the current markets, the Company’s operations may be negatively impacted in the future to the extent that exposure to impairment losses may be increased. There can be no assurances that future impairment of goodwill under SFAS No. 142 will not have a material adverse effect on our business, financial condition or results of operations. The goodwill valuation is performed by management.

We may
not be able to realize the entire book value of goodwill from acquisitions.

As of December 31, 2008, we have approximately $731.4
million of goodwill. We have implemented the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” which requires that existing goodwill not be amortized, but
instead be assessed annually for impairment or sooner if circumstances indicate a possible impairment. We monitor for impairment of goodwill on past and future acquisitions. In the event that the book value of goodwill is impaired, any such
impairment would be charged to earnings in the period of impairment. The Company’s annual evaluation in 2008 resulted in an impairment loss of $19.7 million ($19.5 million net of tax) in the Data Services segment based primarily upon diminished
earnings and cash flow expectations for the lead generation reporting unit and lower residual valuation multiples existing in the present market conditions. The lead generation reporting unit is 70% owned by First Advantage and 30% owned by First
American; therefore, the Company recorded a reduction of minority interest expense of $5.7 million related to the impairment loss. See Note 5—Goodwill and Intangible Assets for additional information regarding the impairment loss. Due to
significant volatility in the current markets, the Company’s operations may be negatively impacted in the future to the extent that exposure to impairment losses may be increased. There can be no assurances that future impairment of goodwill
under SFAS No. 142 will not have a material adverse effect on our business, financial condition or results of operations. The goodwill valuation is performed by management.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%">We currently do not plan to pay dividends; however, as a controlled company we cannot assure that such a dividend will not be paid.

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">We intend to retain future earnings, if any, which may be generated from operations to help finance the growth and development of our business. However,
First American has voting power to exercise a controlling influence on whether or not to declare the payment of a dividend in the future.

SIZE="2">Our business depends on technology that may become obsolete.

We use the information technology to better serve our clients
and reduce costs. This technology likely will change and may become obsolete as new technologies develop. Our future success will depend upon our ability to remain current with the rapid changes in the technologies used in our business, to learn
quickly to use new technologies as they emerge and to develop new technology-based solutions as appropriate. If we are unable to do this, we could be at a competitive disadvantage. Our competitors may gain exclusive access to improved technology,
which also could put us at a competitive disadvantage. If we cannot adapt to these changes, our business, financial condition or results of operations may be materially affected in an adverse manner.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%">Our Class A common stock has minimal liquidity due to its small public float.

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Although as of December 31, 2008 there were approximately 59 million total shares of First Advantage common stock outstanding, approximately 74%
are owned by First American, approximately 6% are owned by Experian and approximately 4% are held of record by FirstMark Capital, LLC (formerly know as Pequot Private Equity Fund II, L.P) (“First Mark”). Currently only approximately 16% of
our issued and outstanding shares are freely transferable without restriction under the Securities Act. Accordingly, only a small number of shares of First Advantage actually trade—between January 1, 2008 and December 31, 2008 the
average daily trading volume of our Class A common stock was approximately 87,000 shares per trading day. Consequently, our stockholders may have difficulty selling shares of our Class A common stock.

STYLE="margin-top:0px;margin-bottom:0px"> 


16








We may
not be able to realize the entire book value of goodwill from acquisitions.

As of December 31, 2008, we have approximately $731.4
million of goodwill. We have implemented the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” which requires that existing goodwill not be amortized, but
instead be assessed annually for impairment or sooner if circumstances indicate a possible impairment. We monitor for impairment of goodwill on past and future acquisitions. In the event that the book value of goodwill is impaired, any such
impairment would be charged to earnings in the period of impairment. The Company’s annual evaluation in 2008 resulted in an impairment loss of $19.7 million ($19.5 million net of tax) in the Data Services segment based primarily upon diminished
earnings and cash flow expectations for the lead generation reporting unit and lower residual valuation multiples existing in the present market conditions. The lead generation reporting unit is 70% owned by First Advantage and 30% owned by First
American; therefore, the Company recorded a reduction of minority interest expense of $5.7 million related to the impairment loss. See Note 5—Goodwill and Intangible Assets for additional information regarding the impairment loss. Due to
significant volatility in the current markets, the Company’s operations may be negatively impacted in the future to the extent that exposure to impairment losses may be increased. There can be no assurances that future impairment of goodwill
under SFAS No. 142 will not have a material adverse effect on our business, financial condition or results of operations. The goodwill valuation is performed by management.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%">We currently do not plan to pay dividends; however, as a controlled company we cannot assure that such a dividend will not be paid.

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">We intend to retain future earnings, if any, which may be generated from operations to help finance the growth and development of our business. However,
First American has voting power to exercise a controlling influence on whether or not to declare the payment of a dividend in the future.

SIZE="2">Our business depends on technology that may become obsolete.

We use the information technology to better serve our clients
and reduce costs. This technology likely will change and may become obsolete as new technologies develop. Our future success will depend upon our ability to remain current with the rapid changes in the technologies used in our business, to learn
quickly to use new technologies as they emerge and to develop new technology-based solutions as appropriate. If we are unable to do this, we could be at a competitive disadvantage. Our competitors may gain exclusive access to improved technology,
which also could put us at a competitive disadvantage. If we cannot adapt to these changes, our business, financial condition or results of operations may be materially affected in an adverse manner.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%">Our Class A common stock has minimal liquidity due to its small public float.

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Although as of December 31, 2008 there were approximately 59 million total shares of First Advantage common stock outstanding, approximately 74%
are owned by First American, approximately 6% are owned by Experian and approximately 4% are held of record by FirstMark Capital, LLC (formerly know as Pequot Private Equity Fund II, L.P) (“First Mark”). Currently only approximately 16% of
our issued and outstanding shares are freely transferable without restriction under the Securities Act. Accordingly, only a small number of shares of First Advantage actually trade—between January 1, 2008 and December 31, 2008 the
average daily trading volume of our Class A common stock was approximately 87,000 shares per trading day. Consequently, our stockholders may have difficulty selling shares of our Class A common stock.

STYLE="margin-top:0px;margin-bottom:0px"> 


16








These excerpts taken from the FADV 10-K filed Feb 28, 2008.

We may not be able to realize the entire book value of goodwill from acquisitions.

As of December 31, 2007, we have approximately $695.7 million of goodwill. We have implemented the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” which requires that existing goodwill not be amortized, but instead be assessed annually for impairment or sooner if circumstances indicate a possible impairment. We will monitor for impairment of goodwill on past and future acquisitions. In the event that the book value of goodwill is impaired, any such impairment would be charged to earnings in the period of impairment. There can be no assurances that future impairment of goodwill under SFAS No. 142 will not have a material adverse effect on our business, financial condition or results of operations. The goodwill valuation is performed by management.

 

15


We may not be able to realize the entire book value of goodwill from acquisitions.

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">As of December 31, 2007, we have approximately $695.7 million of goodwill. We have implemented the provisions of Statement of Financial Accounting
Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” which requires that existing goodwill not be amortized, but instead be assessed annually for impairment or sooner if circumstances indicate a possible
impairment. We will monitor for impairment of goodwill on past and future acquisitions. In the event that the book value of goodwill is impaired, any such impairment would be charged to earnings in the period of impairment. There can be no
assurances that future impairment of goodwill under SFAS No. 142 will not have a material adverse effect on our business, financial condition or results of operations. The goodwill valuation is performed by management.

STYLE="margin-top:0px;margin-bottom:0px"> 


15








This excerpt taken from the FADV 10-K filed Mar 1, 2007.

We may not be able to realize the entire book value of goodwill from acquisitions.

As of December 31, 2006, we have approximately $650.1 million of goodwill. We have implemented the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” which requires that existing goodwill not be amortized, but instead be assessed annually for impairment or sooner if circumstances indicate a possible impairment. We will monitor for impairment of goodwill on past and future acquisitions. In the event that the book value of goodwill is impaired, any such impairment would be charged to earnings in the period of impairment. There can be no assurances that future impairment of goodwill under SFAS No. 142 will not have a material adverse effect on our business, financial condition or results of operations. The goodwill valuation is performed by management.

 

15


This excerpt taken from the FADV 10-K filed Mar 31, 2006.

We may not be able to realize the entire book value of goodwill from acquisitions.

 

As of December 31, 2004, we have approximately $306 million of goodwill. We have implemented the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” which requires that existing goodwill not be amortized, but instead be assessed annually for impairment or sooner if circumstances indicate a possible impairment. We will monitor for impairment of goodwill on past and future acquisitions. In the event that the book value of goodwill is impaired, any such impairment would be charged to earnings in the period of impairment. There can be no assurances that future impairment of goodwill

 

12


under SFAS No. 142 will not have a material adverse effect on our results of operations. The goodwill valuation is performed by an independent third party.

 

This excerpt taken from the FADV 10-K filed Mar 16, 2006.

We may not be able to realize the entire book value of goodwill from acquisitions.

As of December 31, 2005, we have approximately $606 million of goodwill. We have implemented the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” which requires that existing goodwill not be amortized, but instead be assessed annually for impairment or sooner if circumstances indicate a possible impairment. We will monitor for impairment of goodwill on past and future acquisitions. In the event that the book value of goodwill is impaired, any such impairment would be charged to earnings in the period of impairment. There can be no assurances that future impairment of goodwill under SFAS No. 142 will not have a material adverse effect on our business, financial condition or results of operations. The goodwill valuation is performed by management.

This excerpt taken from the FADV 10-K filed Mar 10, 2005.

We may not be able to realize the entire book value of goodwill from acquisitions.

 

As of December 31, 2004, we have approximately $306 million of goodwill. We have implemented the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” which requires that existing goodwill not be amortized, but instead be assessed annually for impairment or sooner if circumstances indicate a possible impairment. We will monitor for impairment of goodwill on past and future acquisitions. In the event that the book value of goodwill is impaired, any such impairment would be charged to earnings in the period of impairment. There can be no assurances that future impairment of goodwill under SFAS No. 142 will not have a material adverse effect on our results of operations. The goodwill valuation is performed by an independent third party.

 

"We may not be able to realize the entire book value of goodwill from acquisitions." elsewhere:

HMS Holdings (HMSY)
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki