PURCHASED INTANGIBLE ASSETS

9 Months Ended

Oct. 31, 2017

NOTE 7 — PURCHASED INTANGIBLE ASSETS

At October 31, 2017, the goodwill balances included in the condensed consolidated balance sheets related to the acquisitions of GPS, TRC and APC were $18.5 million, $14.4 million and $2.0 million, respectively. TRC’s management recently completed a reforecasting of its future financial results which provides essential data for the required annual goodwill assessment of TRC as of November 1, 2017. The new forecast presents a less favorable outlook for TRC, which represents the Company’s Industrial Fabrication and Field Services reportable business segment, than in the past. With this new information and using preliminary valuation analyses, including discounted net after tax cash flow estimates, management determined that the goodwill associated with this business may be impaired. Based on this currently available data, management estimates that the amount of possible loss ranges from an immaterial amount to $5.5 million, with the estimated federal income tax rate representing the most significant variable affecting the range. Depending on the completion of the goodwill assessment including the resolution of this uncertainty, the Company may be required to record an impairment loss related to the goodwill of TRC in the fourth quarter of the current year up to an amount of $5.5 million. However, the completion of the full valuation of the business of TRC could materially change this outcome. Last year, APC recorded a goodwill impairment loss during the nine months ended October 31, 2016 of approximately $2.0 million.

The other purchased intangible assets consisted of the following elements as of October 31, 2017 and January 31, 2017.

		October 31, 2017						January 31,
	Estimated Useful Life	Gross Amount		Accumulated Amortization		Net Amount		2017 (net amount)
Trade names -
GPS/TRC	15 years	$	8,142	$	3,221	$	4,921	$	5,328
SMC	indefinite	181		—		181		181
Process certifications -
TRC	7 years	1,897		520		1,377		1,581
Customer relationships -
TRC/APC	4-10 years	1,346		423		923		1,072
Other intangibles	various	46		43		3		19

Totals		$	11,612	$	4,207	$	7,405	$	8,181