Note 8 - Long-Lived Assets

12 Months Ended

Dec. 31, 2011

Note 8. Long-Lived Assets

Property and Equipment, Net

The components of property and equipment, net, at December 31, 2011 and 2010 are as follows:

	December 31,
	2011			2010(1)
	(in thousands)

Rigs and workoever equipment	$	11,750		$	-
Leasehold improvements		5,677			-
Other equipment		3,205			-
Vehicles		648			-
Furniture and fixtures		100			-
		21,380			-
Accumulated depreciation		(320	)		-
Property and equipment, net	$	21,060		$	-

(1)	During the nine-month transition period ended December 31, 2010, all property and equipment, net was either sold or reclassified as “Assets held for sale” in the Consolidated Balance Sheet.

Depreciation expense for fiscal 2011 was $0.3 million, with $0.1 million and $0.2 million being included in “Cost of revenues” and “Selling, general and administrative,” respectively, in the Consolidated Statements of Operations. Depreciation expense in the Transition Period and fiscal 2010 was $0.3 million and $1.2 million, respectively, and were both included in “Loss from discontinued operations, net of taxes.” The Company impaired certain of its assets in the Transition Period, resulting in a write-down of $4.1 million, which was also included in “Loss from discontinued operations.”

Intangible Assets, Net

The acquisitions of Baseball Heaven and Rogue included the acquisition of $0.2 million and $5.6 million of identifiable intangible assets, respectively.

The components of intangible assets, net, at December 31, 2011and their amortization details are as follows:

	December 31, 2011
			Accumulated					Amortization	Estimated
	Cost		Amortization			Net		Method	Useful Life
	(in thousands)
Sports-Related:
Customer relationships	$	235	$	(20	)		215	Straight-line	5 years

Oilfield Servicing:
Customer relationships		4,700		(29	)		4,671	Accelerated	10 years
Trade names		900		-			900	Accelerated	5 years
		5,600		(29	)		5,571
	$	5,835	$	(49	)	$	5,786

The components of intangible assets, net, at December 31, 2010and their amortization details are as follows:

	December 31, 2011
			Impairment/
			Accumulated					Amortization	Estimated
	Cost		Amortization			Net		Method	Useful Life
	(in thousands)
Acquisition-related:
Customer relationships(1)	$	3,900	$	(3,900	)	$	-	Straight-line	N/A
Trade names		-		-			-	Straight-line	N/A
Patents, core and existing technologies(2)		18,800		(18,800	)		-	Straight-line	N/A
Backlog		340		(340	)		-	Straight-line	N/A
Total acquisition-related		23,040		(23,040	)		-
Software license		1,755		(1,755	)		-	Straight-line	N/A
	$	24,795	$	(24,795	)	$	-

(1)	Accumulated amortization at December 31, 2010 includes impairment charges of $0.8 million, which is recorded within “Loss from discontinued operations, net of taxes” in the Consolidated Statements of Operations.

(2)	Accumulated amortization at December 31, 2010 includes impairment charges of $5.3 million, which is recorded within “Loss from discontinued operations, net of taxes” in the Consolidated Statements of Operations.

Estimated aggregate future amortization expenses for the next five years for the intangible assets are as follows:

			Oilfield
	Sports-Related		Servicing
	(in thousands)
For the year ended December 31:
2012	$	47	$	1,272
2013		47		948
2014		47		707
2015		47		591
2016		27		471
	$	215	$	3,989

Intangible assets at December 31, 2011 include customer relationship and trade names from the Company’s three acquisitions made during fiscal 2011. Amortization expense for fiscal 2011 was $49,000, with $20,000 and $29,000 being included in “Cost of revenues” and “Selling, marketing and administrative,” respectively, in the Consolidated Statements of Operations. Amortization expense for the Transition Period and fiscal 2010 was $9.9 million and $5.5 million, respectively, and is included in “Loss from discontinued operations, net of taxes” in the Consolidated Statements of Operations.

Impairment Review

In June 2010, the Company made a decision to wind down its Aristos Business and notified its customers that final shipments would occur by the end of September 2010. The Company also planned to put its building up for sale towards the end of the Transition Period. As a result of these actions, the Company evaluated the carrying value of its long-lived assets at July 2, 2010 and determined that the carrying value of such assets may not be fully recoverable. The Company then measured the impairment loss and recognized the amount in which the carrying value exceeded the estimated fair value by recording an impairment charge of $10.2 million in the Transition Period, which is included in “Loss from discontinued operations, net of taxes,” in the Consolidated Statements of Operations. Of the $10.2 million impairment charge, $6.1 million related to the write off of intangible assets and the remaining $4.1 million related to the reduction of the carrying value of its property and equipment, net, to its estimated fair value. The estimated fair value was based on the market approach and considered the perspective of market participants using or exchanging the Company’s long-lived assets. The estimation of the impairment involved assumptions that required judgment by the Company.

Assets Held For Sale

Based on its business dispositions and wind down of its Aristos Business (see Note 5), the Company reclassified its building to “Assets held for sale” as of December 31, 2010, at its estimated fair value, net of selling costs, of $6.0 million. The Company’s carrying value of the building was increased by $0.2 million during the three-month period ended April 1, 2011 due to leasehold improvements that were placed into service during that period. The Company sold the building on June 1, 2011 for a total consideration of $6.5 million less selling expenses of $0.2 million, resulting in a gain of approximately $50,000.