Acquired Intangible Assets and Goodwill

9 Months Ended

Jul. 31, 2013

Acquired Intangible Assets and Goodwill [Abstract]

11. Acquired Intangible Assets and Goodwill

	July 31, 2013				October 31, 2012
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
Amortizable intangible assets:
Non-compete agreement	$	1,000,000	$	1,000,000	$	1,000,000	$	1,000,000
Customer relationships		2,451,073		1,118,508		2,451,073		1,026,935
Other		564,946		554,363		564,946		541,236
		4,016,019		2,672,871		4,016,019		2,568,171

Unamortizable intangible assets:
Goodwill		1,307,267		76,782		3,964,600		507,278
		1,307,267		76,782		3,964,600		507,278

Total goodwill and other intangibles	$	5,323,286	$	2,749,653	$	7,980,619	$	3,075,449

During the first quarter of 2013 as part of a process of addressing the Company’s debt status with its secured lenders as well as first quarter 2013 performance to budget, the Company performed a comprehensive reassessment of its initial fiscal year 2013 budget. The Company, as part of this process, identified at least one customer in the printing segment from which it anticipated a substantial revenue decline in the second quarter of 2013 and beyond and associated profitability declines in 2013 and beyond. As a result of this process, it was determined that an impairment test between annual impairment tests was warranted for the printing segment as a result of the potential near term challenges facing the Company, anticipated customer specific revenue decreases and softness in the Company’s core West Virginia market. The Company performed Step 1 of the Goodwill impairment test for the printing segment with the assistance of a third party valuation specialist using the income approach and the testing indicated a value less than the carrying value of the segment at January 31, 2013.

As a result of the Step 1 test, the Company determined it was required to proceed to Step 2 of Goodwill Impairment testing for the printing segment in the first quarter of 2013. The Step 2 test results were completed in the second quarter of 2013 with the assistance of a third party valuation specialist and supported the conclusion to record an impairment charge in the first quarter of 2013 of $2.2 million. Subsequent reversal of a previously recognized goodwill impairment loss is prohibited once the measurement of that loss is recognized, in accordance with applicable standards.

Amortization expense for the three and nine months ended July 31, 2013 was $35,000 and $105,000, and for the three and nine months ended July 31, 2012 was $35,000 and $110,000, respectively. Customer relationships are being amortized over a period of 20 years, related to the acquisition of Syscan in 2004. The weighted average remaining life of the Company's amortizable intangible assets was approximately 6 years.

Estimated amortization expense for each of the following years is:

Ending October 31,
2013	$	34,899
2014		128,306
2015		122,098
2016		122,098
2017		122,098
Thereafter		813,649
	$	1,343,148

The changes in the carrying amount of goodwill and other amortizing intangibles for the nine months ended July 31, 2013 were:

Goodwill:

	Printing			Office Products and Furniture		Total

Balance at October 31, 2012						$
Goodwill	$	2,226,837		$	1,230,485		3,457,322
Accumulated impairment losses		-			-		-
	$	2,226,837		$	1,230,485	$	3,457,322

Goodwill acquired nine months ended July 31, 2013	$	-		$	-	$	-
Impairment losses nine months ended July 31, 2013		(2,226,837	)		-		(2,226,837	)

Balance at July 31, 2013
Goodwill		2,226,837			1,230,485		3,457,322
Accumulated impairment losses		(2,226,837	)		-		(2,226,837	)
	$	-		$	1,230,485	$	1,230,485

Amortizing Intangible Assets (net of amortization expense):

	Printing		Office Products and Furniture		Total

Balance at October 31, 2012
Amortizing intangible	$	500,721	$	947,127	$	1,447,848
Accumulated impairment losses		-		-		-
	$	500,721	$	947,127	$	1,447,848

Amortizing intangible acquired nine months ended July 31, 2013	$	-	$	-	$	-
Impairment losses nine months ended July 31, 2013		-		-		-
Amortization expense		43,804		60,896		104,700

Balance at July 31, 2013
Amortizing intangible		456,917		886,231		1,343,148
Accumulated impairment losses		-		-		-
	$	456,917	$	886,231	$	1,343,148

A summary of impairment charges from continuing operations is included in the table below:

		Nine months ended July 31,
		2013		2012

Goodwill	$	2,226,837	$	-
Other intangibles		-		-
	$	2,226,837	$	-

A summary of impairment charges from discontinued operations is included in the table below:

		Nine months ended July 31,
		2013		2012

Goodwill	$	-	$	9,510,933
Other intangibles		-		-
Trademark & masthead		-		-
	$	-	$	9,510,933

- 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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