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Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2012
Goodwill and Intangible Assets [Abstract]  
Goodwill and Intangible Assets
7. Goodwill and Intangible Assets

 

                                 
in thousands   2012     2011  
    Goodwill     Tradename     Goodwill     Tradename  

Beginning balance

  $ 14,661     $ 3,218     $ 14,713     $ 3,225  

Acquisition

    4,806       300              

Foreign currency adjustments

    81       8       (52 )     (7 )
   

 

 

   

 

 

   

 

 

   

 

 

 
    $ 19,548     $ 3,526     $ 14,661     $ 3,218  
   

 

 

   

 

 

   

 

 

   

 

 

 

As of December 31, 2012, the Company has an aggregate amount of Goodwill acquired of $36.6 million and an aggregate amount of impairment losses recognized in 2009 of $17.1 million.

In performing its goodwill assessment for 2012, the Company evaluated the following factors that affect future business performance: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, entity-specific events, reporting unit factors and company stock price. As a result of the assessment of these qualitative factors, the Company has concluded that it is more likely than not that the fair values of three of the four reporting units with goodwill as of December 31, 2012 exceed the carrying values of these units. Accordingly, the first and second steps of the goodwill impairment test as described in FASB ASC 350-20-35, which includes estimating the fair values of each reporting unit, are not considered necessary for these three reporting units and no goodwill impairment charges were recorded in 2012.

The analysis of these qualitative factors for the fourth reporting unit led to the conclusion that is was not more likely than not that the fair value for this reporting unit exceeded the carrying value. Accordingly, the first step of the two step goodwill impairment test as described in FASB ASC 350-20-35 was performed. The resultant estimated fair value of the reporting unit exceeded its carrying value by approximately 12% as of December 31, 2012 and no goodwill impairment charges were recorded.

The fair value measurement method used in the Company’s impairment analysis utilizes a number of significant unobservable inputs or Level 3 assumptions. These assumptions include, among others, projections of our future operating results, the implied fair value of these assets using an income approach by preparing a discounted cash flow analysis and other subjective assumptions.

In performing its assessment of indefinite life intangible assets for 2012, the Company evaluated the following factors that affect future business performance: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, entity-specific events, reporting unit factors and company stock price. As a result of the assessment of these qualitative factors, the Company has concluded that it is more likely than not that the fair values of the indefinite life intangible assets at three of the four reporting units as of December 31, 2012 exceed the carrying values at these units. Accordingly, estimating the fair values of these assets, is not considered necessary for these three reporting units and no indefinite life intangible asset impairment charges were recorded in 2012.

The analysis of these qualitative factors for the fourth reporting unit led to the conclusion that is was not more likely than not that the fair value of the indefinite life intangible assets for this reporting unit exceeded the carrying value. Accordingly, the estimation of fair value was performed. The resultant estimated fair value exceeded its carrying value by approximately 19% as of December 31, 2012 and no impairment charge was recorded.

 

The fair value measurement method used in the Company’s impairment analysis utilizes a number of significant unobservable inputs or Level 3 assumptions. These assumptions include, among others, projections of our future operating results, the implied fair value of these assets using an income approach by preparing a discounted cash flow analysis and other subjective assumptions.

Similarly, no goodwill or indefinite life intangible asset charges were recorded in 2011.

 

                                 
    2012     2011  

$ in thousands

Intangible assets—finite life

  Cost     Accum.
Amort.
    Cost     Accum.
Amort
 

Patents

  $ 1,414     $ 1,281     $ 1,414     $ 1,193  

Employment agreements

    170       0       0       0  

Technology

    230       0       0       0  

Customer lists

    2,343       1,593       1,653       1,348  
   

 

 

   

 

 

   

 

 

   

 

 

 
    $ 4,157     $ 2,874     $ 3,067     $ 2,541  
   

 

 

   

 

 

   

 

 

   

 

 

 

Amortization expense of finite life intangible assets was $331,000 and $441,000 for 2012 and 2011, respectively. Amortization over the next five years for finite life intangibles is $371,000 in 2013, $274,000 in 2014, $230,000 in 2015, $171,000 in 2016, and $171,000 in 2017.