Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table summarizes the net carrying amount of goodwill by segment at June 30, 2014 and December 31, 2013, respectively:



							Engineering
	Aerostructures						Services				Total
	June 30,			December 31,			June 30,		December 31,		June 30,			December 31,
	2014			2013			2014		2013		2014			2013
Balance at:
Gross Goodwill	$	141,953		$	141,953		$	50,741	$	50,741	$	192,694		$	192,694
Accumulated impairment loss	(79,471		)	(79,471		)	—		—		(79,471		)	(79,471		)
Net Goodwill	$	62,482		$	62,482		$	50,741	$	50,741	$	113,223		$	113,223

The December 2012 acquisition of Valent Aerostructures, LLC ("Valent") accounted for $56,288 of the net goodwill balance at June 30, 2014 and December 31, 2013. A goodwill impairment charge of $73,528 was recorded in the fourth quarter of 2013 related to the Valent acquisition. The fair value for the remaining net goodwill in the Aerostructures segment of $6,194 exceeded its carrying value at December 31, 2013. Net goodwill at June 30, 2014 and December 31, 2013 also included an impairment charge of $5,943, for an acquisition which was fully impaired.

The fair value of the net goodwill in Engineering Services exceeded its carrying value at December 31, 2013.

The carrying value of goodwill is assessed at least annually, during the fourth quarter, unless a triggering event occurs, and an impairment charge is recorded if appropriate. In the quarter and six months ended June 30, 2014, no triggering event occurred that would cause the Company to assess the carrying value of goodwill.

Intangible Assets

Intangible assets primarily consist of trademarks and customer intangibles. The carrying values were as follows:



	June 30, 2014			December 31, 2013
Trademarks	$	778		$	778
Customer intangible assets	68,991			68,991
Other	1,274			1,481
Accumulated amortization	(17,840		)	(15,785		)
Intangible assets, net	$	53,203		$	55,465

Intangibles amortization expense was $1,131 and $1,162 for the three months ended June 30, 2014 and 2013, respectively and $2,262 and $2,323 for the six months ended June 30, 2014 and 2013, respectively. The accumulated amortization balances at June 30, 2014 and December 31, 2013, respectively, were $577 and $475 for trademarks, $16,635 and $14,555 for customer intangible assets, and $628 and $755 for other intangible assets. Valent intangible assets are amortized on the straight-line method as this approximates the pattern of economic benefit of each intangible asset. All other remaining intangible assets are not material.

The Company has experienced a slowdown in the demand for design engineering services over the past few quarters, which is cyclical in nature. This cyclical demand has led to lower than originally expected revenue. In the most recent two quarters, however, this segment has realized significant growth in profitability. If the segment were to experience additional slowdowns in demand, it could lead to a triggering event and potential impairment for intangible assets and goodwill. Further, our Valent acquisition has not achieved the sales and profitability we originally expected due, in substantial part, to delays in customer awards and longer ramp up times on new contracts as they migrate to full production. Although we believe this lower sales growth is temporary, continued lower sales growth could lead to a triggering event and potential additional impairment to intangible assets and goodwill. See Note 7 to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2013 for additional discussion on the goodwill impairment charge recorded in the fourth quarter of 2013.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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