Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

NOTE 6 - GOODWILL AND INTANGIBLE ASSETS

The Company had goodwill of $5.3 million and $5.1 million at December 31, 2013 and 2012, respectively, all of which was associated with its electronic devices reporting unit.

The Company performed its annual impairment test for goodwill for the electronic devices reporting unit as of December 31, 2013 and 2012. In performing the valuations, the Company used cash flows that reflected management’s forecasts, an assessment of the current backlog and anticipated orders and discount rates that reflect the risks associated with the current market. The Company considered the results of an income approach in determining the fair value of the reporting unit discounting the projected cash flows at the Company’s weighted average cost of capital to determine the fair value for the electronic devices reporting unit. For the income approach, growth at rates between 3% and 5% per annum was assumed as a result of expected shipments on existing contracts and future opportunities. The projected cash flows were discounted at the Company’s weighted average cost of capital of 15% to determine the fair value for the electronic devices reporting unit.

Based on the results of this testing at December 31, 2013, the fair values of the electronic devices reporting unit exceeded its book values.

The following table reflects changes in the Company’s goodwill balances for continuing operations, for the year ended December 31, 2013 and 2012 (in thousands):

	Electronic Devices
Balance at December 31, 2011		4,970
Foreign currency translation		176
Balance at December 31, 2012	$	5,146
Foreign currency translation		137
Balance at December 31, 2013	$	5,283

Other intangible assets consist primarily of trademarks, trade names and technology acquired. The original cost and accumulated amortization of these intangible assets from continuing operations consisted of the following at December 31 (in thousands):

	2013									2012
	Electronic			Communications						Electronic			Communications
	Devices			Equipment			Total			Devices			Equipment			Total
Intangibles with definite lives:
Technology acquired	$	-		$	1,150		$	1,150		$	-		$	1,150		$	1,150
Customer relationships		-			200			200			-			200			200
Covenant-not-to-compete		200			-			200			200			-			200
Backlog		200			-			200			200			-			200
		400			1,350			1,750			400			1,350			1,750
Accumulated amortization		(400	)		(1,282	)		(1,682	)		(400	)		(1,147	)		(1,547	)
Carrying value		-			68			68			-			203			203
Intangibles with indefinite lives:
Trademarks and trade names		500			-			500			500			-			500
Foreign currency translation		(111	)		-			(111	)		-			-			(119	)
Trademarks and trade names		389			-			389			381			-			381
Total intangible assets, net	$	389		$	68		$	457		$	381		$	203		$	584

In accordance with FASB guidance for accounting for the impairment or disposal of long-lived assets, the Company re-evaluates the carrying value of identifiable intangible and long-lived assets, except for trademarks and trade names, for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. No events or changes in circumstances occurred during 2013 or 2012 that would have required an impairment analysis to be performed.

Assuming no additions, disposals or adjustments are made to the carrying values and/or useful lives of the assets, annual amortization expense on intangible assets with definite lives is estimated to be approximately $68,000 in 2014. This will eliminate the carrying value by June 30, 2014. The Company’s current definite lived intangible assets have an average remaining useful life of approximately 6 months.