Goodwill and Other Identifiable Intangible Assets

9 Months Ended

Jun. 30, 2011

Goodwill and Other Identifiable Intangible Assets [Abstract]

GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

8. GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

Amortizable identifiable intangible assets were (in thousands):


	June 30, 2011							September 30, 2010
	Gross							Gross
	carrying		Accum.					carrying		Accum.
	amount		amort.			Net		amount		amort.			Net
Purchased and core technology	$	46,610	$	(41,355	)	$	5,255	$	46,484	$	(38,917	)	$	7,567
License agreements		2,840		(2,592	)		248		2,840		(2,537	)		303
Patents and trademarks		10,342		(7,350	)		2,992		9,753		(6,522	)		3,231
Customer maintenance contracts		700		(656	)		44		700		(604	)		96
Customer relationships		17,611		(10,542	)		7,069		17,481		(9,096	)		8,385
Non-compete agreements		1,042		(1,020	)		22		1,039		(770	)		269

Total	$	79,145	$	(63,515	)	$	15,630	$	78,297	$	(58,446	)	$	19,851

Amortization expense was $1.5 million and $1.9 million for the three month periods ended June 30, 2011 and 2010, respectively. Amortization expense was $4.9 million and $5.7 million for the nine months ended June 30, 2011 and 2010, respectively. Amortization expense is recorded on our consolidated statement of operations within cost of sales, amortization of purchased and core technology, which is a component of total cost of sales, and in general and administrative expense.

Estimated amortization expense related to identifiable intangible assets for the remainder of fiscal 2011 and the five succeeding fiscal years is (in thousands):


2011 (three months)	$	1,305
2012		4,626
2013		3,434
2014		2,909
2015		1,909
2016		660

The changes in the carrying amount of goodwill were (in thousands):


	Nine months ended June 30,
	2011		2010
Beginning balance, October 1	$	86,210	$	86,558
Foreign currency translation adjustment		395		(1,368	)

Ending balance, June 30	$	86,605	$	85,190

Goodwill is tested for impairment on an annual basis as of June 30, or more frequently if events or circumstances occur which could indicate impairment. As of the close of business on June 30, 2011, our stock price was $13.00. Based on the common shares outstanding at June 30, 2011 of 25,450,528 our market capitalization was $330.9 million compared to our net asset carrying value of $257.2 million. As the fair value exceeded the carrying value of net assets by a significant percentage, we determined that we were not at a level of risk of failing the step one test for recognition and measurement of an impairment loss.

We have defined the criteria that will result in additional interim goodwill impairment testing. If these criteria are met, we will undertake the analysis to determine whether a goodwill impairment has occurred, which could have a material effect on our consolidated financial position and results of operations. The evaluation of asset impairment requires us to make assumptions about future cash flows and revenues. These assumptions require significant judgment and actual results may differ from assumed or estimated amounts. If these estimates and assumptions change, we may be required to recognize impairment losses in the future.

- 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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