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Contingent Consideration
9 Months Ended
Sep. 30, 2013
Business Combinations [Abstract]  
Business Combination Disclosure [Text Block]
10.
Contingent Consideration
 
Contingent consideration is comprised of two contingent payments that the Company is obligated to pay the former shareholders of The Combs Company (“Bogs”). The estimate of contingent consideration is formula-driven and is based on Bogs achieving certain levels of gross margin dollars between January 1, 2011 and December 31, 2015. The first contingent consideration payment was due in 2013 and was paid on March 28, 2013. The second payment is due in March 2016. In accordance with ASC 805, Business Combinations (“ASC 805”), the Company remeasures its estimate of the fair value of the contingent payments at each reporting date. The change in fair value is recognized in earnings.
 
The Company’s estimate of the fair value of the contingent payments as recorded in the Consolidated Condensed Balance Sheets (Unaudited) was as follows:
 
 
 
September 30,
 
December 31,
 
 
 
2013
 
2012
 
 
 
(Dollars in thousands)
 
Current portion
 
$
-
 
$
1,270
 
Long-term portion
 
 
5,028
 
 
4,991
 
Total contingent consideration
 
$
5,028
 
$
6,261
 
 
The following table summarizes the activity during 2013 related to the contingent payments as recorded in the accompanying unaudited financial statements (dollars in thousands):
 
Balance as of December 31, 2012
 
$
6,261
 
Payment to the former shareholders of Bogs
 
 
(1,270)
 
Interest expense
 
 
37
 
Balance as of September 30, 2013
 
$
5,028
 
 
The current portion of the contingent consideration was recorded within accrued liabilities in the Consolidated Condensed Balance Sheets (Unaudited). The long-term portion was recorded within other long-term liabilities in the Consolidated Condensed Balance Sheets (Unaudited). The total contingent consideration was assigned to the Company’s wholesale segment.
 
The fair value measurement of the contingent consideration is based on significant inputs not observed in the market and thus represents a level 3 valuation as defined by ASC 820.