Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets [Abstract]

GOODWILL AND INTANGIBLE ASSETS

7. GOODWILL AND INTANGIBLE ASSETS:

The changes in the carrying amount of goodwill are as follows:

	Goodwill
	(In Thousands)
Balance at January 1, 2011	$	12,049
Adjustments to goodwill in 2011		-
Balance at December 31, 2011		12,049
Adjustments to goodwill in 2012		-
Balance at December 31, 2012	$	12,049

Cumulative goodwill impairment charges of $54.6 million (related to impairments recognized in 2002 and 2008) are reflected in the ending goodwill balance at December 31, 2012.

As of December 31, 2012, the net carrying amount of intangible assets consists of amounts related to business combination transactions consummated by the Company in 2009 and 2010 and capitalized internally developed software costs.

Other net intangibles amounted to $1.2 million and $2.1 million as of December 31, 2012 and 2011, respectively. Following is a summary of the Company’s identifiable intangible assets that are subject to amortization:

	December 31, 2012
	Gross Carrying Amount		Impairment Charges		Accumulated Amortization		Net Carrying Amount
	(In Thousands)
Identifiable intangibles:
Non-compete agreements	$	3,860	$	-	$	3,434	$	426
Customer relationships		10,378		-		10,065		313
Asset purchase agreement		1,400		-		1,400		-
Trade name and trademark		600		-		554		46
Capitalized product development costs		603		-		194		409
	$	16,841	$	-	$	15,647	$	1,194

	December 31, 2011
	Gross Carrying Amount		Impairment Charges		Accumulated Amortization		Net Carrying Amount
	(In Thousands)
Identifiable intangibles:
Non-compete agreements	$	3,860	$	-	$	3,149	$	711
Customer relationships		10,378		-		9,463		915
Asset purchase agreement		1,400		-		1,400		-
Trade name and trademark		600		-		481		119
Capitalized product development costs		373		-		39		334
	$	16,611	$	-	$	14,532	$	2,079

The intangible assets were identified and valued by the Company. The original estimated useful lives of the acquired identifiable intangible assets are as follows:

Non-compete agreements	4 to 5 years
Customer relationships	4 to 7.5 years
Asset purchase agreement	1.5 years
Trade name and trademark	5 years
Capitalized product development costs	3 years

Intangible assets are amortized assuming no expected residual value over the periods in which the economic benefit of these assets is consumed. The weighted average amortization period for all intangible assets subject to amortization was 2.5 years, 3.0 years and 3.5 years as of December 31, 2012, 2011 and 2010, respectively. Amortization expense related to all intangible assets was $1.1 million, $2.0 million and $3.1 million in 2012, 2011 and 2010, respectively.

Amortization of $156 thousand and $39 thousand related to capitalized software development costs were included within cost of revenue (specifically within software expense) on the consolidated statements of comprehensive income (loss) for the year ended December 31, 2012 and 2011, respectively. There was no amortization associated with capitalized software development costs during the year ended December 31, 2010.

Estimated annual amortization expense for the next five years ending December 31, which encompasses the remaining useful life of the intangible assets, is as follows:

	Amortization Expense
	(In Thousands)
2013	$	738
2014		349
2015		100
2016		5
2017		-