INTANGIBLE ASSETS AND GOODWILL - Note 4

12 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS AND GOODWILL - Note 4

4. INTANGIBLE ASSETS AND GOODWILL

The carrying value of intangible assets consisted of the following (in thousands):

		March 31, 2018						March 31, 2017
		Gross						Gross
		Carrying		Accumulated		Net Carrying		Carrying		Accumulated		Net Carrying
		Amount		Amortization		Amount		Amount		Amortization		Amount
Technology	$	19,702	$	(10,535)	$	9,167	$	18,685	$	(7,010)	$	11,675
Customer relationships		9,776		(7,366)		2,410		9,419		(6,187)		3,232
Trade names/domains		2,108		(1,727)		381		2,036		-		2,036
In-process research and
development		95		(95)		-		95		-		95
Total acquired identifiable
intangible assets	$	31,681	$	(19,723)	$	11,958	$	30,235	$	(13,197)	$	17,038

At March 31, 2018, annual amortization of definite lived intangible assets, based upon existing intangible assets and current useful lives, is estimated to be the following (in thousands):

		Amount
2019	$	4,002
2020		3,171
2021		2,790
2022		1,766
2023		229
Total	$	11,958

Impairment of Long-Lived Assets and Goodwill

During the third quarter of fiscal year 2018, the Company changed its product and marketing strategy for the use of DXI's technology and re-assessed DXI's profitability outlook. This triggered the requirement that the Company test the recorded goodwill for impairment in accordance with ASC 350-20-35, as amended by ASU 2017-04 (see Footnote 1, Recently Adopted Accounting Pronouncements). First, the Company estimated the fair value of its three reporting units using the market approach. Under the market approach, the Company utilized the market capitalization of its publicly-traded shares and comparable company information to determine revenue multiples which were used to determine the fair value of the reporting unit. Based on this approach, the Company determined that there was an indication of impairment only for its DXI reporting unit, which is within the Company's Europe reporting segment, as the carrying value including goodwill exceeded the estimated fair value. As largely independent cash flows could not be attributed to any assets individually the Company evaluated DXI's assets and liabilities as one asset group. Then the Company estimated the fair value of DXI's asset group using discounted cash flow methods to determine the implied fair value of goodwill. The difference between this implied fair value of the goodwill and its carrying value was recorded as impairment. The outcome of the analysis resulted in a non-cash expense for impairment of property and equipment, intangible assets and goodwill of $0.3 million, $1.2 million and $8.0 million, respectively, which was recorded during the third quarter of fiscal year 2018 as a separate line item in the Company's Consolidated Statements of Operations.

The following table provides a summary of the changes in the carrying amounts of goodwill by reporting segment (in thousands):

		Americas		Europe		Total
Balance at March 31, 2016	$	25,729	$	21,691	$	47,420
Additions due to acquisitions		1,580		-		1,580
Foreign currency translation		-		(2,864)		(2,864)
Balance at March 31, 2017		27,309		18,827		46,136
Impairment loss		-		(8,036)		(8,036)
Foreign currency translation		-		1,954		1,954
Balance at March 31, 2018	$	27,309	$	12,745	$	40,054