INTANGIBLE ASSETS

12 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Disclosure [Text Block]

NOTE 7. INTANGIBLE ASSETS

IEC's intangible assets (other than goodwill) were acquired in connection with purchases of SCB in December 2010 and Albuquerque in December 2009.

Among SCB’s key attributes as an acquisition candidate were the relationships established with a number of military and defense contractors. The anticipated profitability of those relationships was considered by IEC in arriving at an amount to offer for the firm and also became the basis for allocating a portion of the purchase price to a related intangible asset. Based upon several key assumptions and a detailed analysis of value, $5.9 million was allocated to a customer-based intangible. The asset is being amortized over its fifteen-year estimated useful life, using the straight-line method.

IEC also allocated $100 thousand to an intangible asset representing the estimated value of a five-year, non-compete agreement entered into with SCB’s selling shareholders. That intangible is being amortized evenly over its contractual life.

Albuquerque’s building and land were acquired subject to an Industrial Revenue Bond (“IRB”) that exempts the property from real estate taxes for the term of the IRB. The tax abatement was valued at $360 thousand at date of acquisition, and such value is being amortized over the 9.2 year exemption period that remained as of the acquisition date.

Presented in tables below are: intangible assets by category; amortization expense for the periods; and estimated future amortization as of September 30, 2012.

	September 30,			September 30,
Intangible Assets	2012			2011
	(thousands)
Customer relationships	$	5,900		$	5,900
Property tax abatement		360			360
Non-compete agreement		100			100
Total intangibles		6,360			6,360
Accumulated amortization		(849	)		(396	)
Intangible assets, net	$	5,511		$	5,964

	Twelve Months Ended
	September 30,		September 30,
Amortization Expense	2012		2011
	(thousands)
Intangible amortization expense	$	453	$	367

	Estimated
	future
Future Amortization	amortization
	(thousands)
Twelve months ending September 30,
2013	$	452
2014		452
2015		452
2016		437
2017 and thereafter		3,718