INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

Dec. 31, 2011

INTANGIBLE ASSETS AND GOODWILL [Abstract]

INTANGIBLE

ASSETS AND

GOODWILL:

The Company applies ASC 350, Intangibles-Goodwill and Other. ASC 350 requires that goodwill not be amortized but evaluated for impairment. The Company performs its annual impairment test of goodwill at the end of its fiscal year or when impairment indicators are present.

At December 31, 2011 and 2010, the Company's goodwill and intangible assets consist of the following:

	Estimated	Gross								Net
	Useful	Carrying		Accumulated			Accumulated			Carrying
	Life	Value		Amortization			Impairment			Value

Goodwill		$	9,798,000		-			(8,110,000	)	$	1,688,000
Intangible Assets:
Contract relationships	15 Years		2,000,000		(278,000	)		(1,722,000	)		-
Contract backlog	1T-5 Years		1,750,000 -		(1,750,000	)		-			-

Non-compete agreements	3 Years		415,000		(386,000)			(29,000	)		-

		$	4,165,000	$	(2,414,000	)	$	(1,751,000	)	$	-

The Company recognized amortization expense of $ 0 and $98,000 for the years ended December 31, 2011 and 2010, respectively.

During 2011, the methods used to determine the fair value of the Company's TDL reporting unit were an income approach (discounted cash flow analysis based on financial and operating projections) and a market approach (comparison of financial data for publicly traded companies engaged in similar lines of business).

After adopting ASU 2011-08, the Company performed a qualitative assessment on Behlman's goodwill at December 31, 2011. The Company concluded that it was not more likely than not that the fair value of Behlman was less than its carrying amount.

During September 2010, ICS received an award for fewer MK 119's than it received during the prior year. In addition, during the fourth quarter of 2010, we learned that the award for potential new business on the U.S. Navy's new Littoral Combat Ship will be less than expected. Consequently, we determined that future cash flows for ICS were projected to decrease. As a result, we determined the undiscounted future cash flows for certain of our intangible assets were less than their carrying value. Therefore, we recorded an impairment charge for the full remaining carrying value ($129,000) of ICS' intangible assets in the year ended December 31, 2010. Also during the fourth quarter 2010, after completing the annual impairment testing of goodwill pursuant to ASC 350, we concluded an impairment charge of $795,000, representing the remaining carrying value of goodwill, should be taken in connection with the goodwill arising from the acquisition of ICS in 2007.

- 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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