Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2012

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

7. Goodwill and Other Intangible Assets

The Company allocates the purchase price paid in a purchase business combination to the assets acquired, including intangible assets and liabilities assumed at their estimated fair values. The excess of purchase price over these fair values is recorded as goodwill. Valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include but are not limited to the projected growth factors; future expected cash flows, discount rates, potential competitive developments and changes in the market.

The Company amortizes its definite — lived intangible assets using an accelerated method that best approximates the proportion of the future cash flows estimated to be generated in each period over the estimated useful life of the applicable asset and evaluated on an annual basis to ensure continued appropriateness.

In accordance with ASC 350, Intangibles-Goodwill and Other, goodwill is not amortized, but instead tested for impairment at least annually. The Company will perform its annual impairment tests as of July 31 of each year.

In accordance with ASC 360, Property, Plant and Equipment, the Company reviews its long-lived assets, including property and equipment and intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset.

Goodwill

The following table represents the balance in goodwill as of March 31, 2012 and December 31, 2011 (in thousands):

	March 31, 2012		December 31, 2011
Goodwill	$	9,415	$	9,415

The value of goodwill is derived from the Company’s acquisition of InSysCo in 2011. There have been no events or changes in circumstances that have occurred since the date of acquisition that would indicate that there has been an impairment of goodwill and therefore no difference between gross and net goodwill balances.

Other Intangible Assets — Customer Relationships

The following tables set forth information for intangible assets subject to amortization (in thousands):

Balance as of January 1, 2012	$	4,076
Amortization of Customer Relationships		(229	)
Balance as of March 31, 2012	$	3,847

The following table summarizes the estimated future amortization expense related to the customer relationships for the remaining nine months of 2012 and years thereafter (in thousands):

2012 (remaining)	$	686
2013		692
2014		584
2015		504
Thereafter		1,381
Total	$	3,847

The weighted average amortization period for the customer relationships is 10.6 years. The Company uses an accelerated amortization method that reflects the pattern in which the economic benefits of the intangible asset is consumed. There have been no impairment charges on long-lived assets for the three months ended March 31, 2012.