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Goodwill And Intangible Assets
9 Months Ended
Sep. 30, 2011
Goodwill And Intangible Assets 
Goodwill And Intangible Assets
6. Goodwill and Intangible Assets

Changes in the carrying amount of goodwill for the nine months ended September 30, 2011, by operating segment, were as follows:

 

     Clinical
Development
Services
        
      Laboratory        
      Services     Total  

Balance as of December 31, 2010

   $ 106,671       $ 184,546      $ 291,217   

Adjustments to goodwill for prior year acquisitions

     —           (825     (825

Translation adjustments

     543         1,979        2,522   
  

 

 

    

 

 

   

 

 

 

Balance as of September 30, 2011

   $ 107,214       $ 185,700      $ 292,914   
  

 

 

    

 

 

   

 

 

 

 

During 2011, the Company recorded a $0.8 million adjustment to goodwill related to X-Chem resulting from information regarding the valuation estimates that became available after the preliminary purchase price allocation was established.

 

The Company reviews goodwill for impairment annually on October 1st, and more frequently if impairment indicators arise. An impairment indicator represents an event or change in circumstances that would more likely than not reduce the fair value of a goodwill reporting unit below its carrying amount. A significant amount of judgment is involved in determining if an indicator of goodwill impairment has occurred. The Company monitors events and changes in circumstances in between annual testing dates to determine if any events or changes in circumstances indicate impairment. In connection with the most recent annual impairment test on October 1, 2010, the Company reviewed goodwill for impairment and the analysis indicated a significant amount of fair value in excess of carrying value for each goodwill reporting unit. However, the fair value of goodwill could be impacted by future adverse changes such as a significant decline in operating results, a sustained decline in the valuation of pharmaceutical and biotechnology company stocks, including the valuation of the Company's own common stock, a significant adverse change in legal factors or in the business climate, a further significant slowdown in the worldwide economy or the pharmaceutical and biotechnology industry, or the sustained failure to meet the performance projections included in the forecasts of future operating results for any of the Company's goodwill reporting units. Any adverse change in these factors could have a significant impact on the recoverability of goodwill, and could have a material impact on the Company's consolidated condensed financial statements. There were no such indicators of impairment during the first nine months of 2011.

The Company's amortized intangible assets were composed of the following as of the dates set forth below:

 

     December 31, 2010      September 30, 2011  
     Carrying
Amount
     Accumulated
Amortization
    Net      Carrying
Amount
     Accumulated
Amortization
    Net  

Customer relationships

   $ 17,658       $ (2,844   $ 14,814       $ 18,013       $ (4,416   $ 13,597   

Non-compete agreements

     2,047         (84     1,963         1,291         (261     1,030   

Trade name

     150         (150     —           140         (140     —     

Backlog

     7,217         (2,770     4,447         7,342         (3,982     3,360   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $ 27,072       $ (5,848   $ 21,224       $ 26,786       $ (8,799   $ 17,987   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

The Company had total non-amortizing intangible assets of $10.2 million as of December 31, 2010 and September 30, 2011. Unamortized intangible assets consist of $8.2 million of in-process research and development and $2.0 million of other intangible asset.

Amortization expense for the three months ended September 30, 2010 and 2011 was $0.9 million and $1.0 million, respectively. Amortization expense for the nine months ended September 30, 2010 and 2011 was $2.8 million and $3.0 million, respectively. As of September 30, 2011, expected amortization expense for each of the next five years is as follows:

 

2011 (remaining three months)

   $ 977   

2012

     3,274   

2013

     3,097   

2014

     2,344   

2015

     1,769