Goodwill And Intangible Assets

6 Months Ended

Oct. 31, 2011

Goodwill And Intangible Assets [Abstract]

4. Goodwill and Intangible Assets

The following tables present details of the Company's goodwill and intangible assets as of October 31, 2011 and April 30, 2011 (in thousands).

	Gross		Net
	carrying	Accumulated	carrying	Estimated
October 31, 2011	amount	amortization	amount	useful life
Indefinite Lives:
Goodwill	$ 25,161	$ —	$ 25,161	—
Finite Lives:
Customer-related	6,236	(2,678)	3,558	5 to 10 years
Technology-based	4,838	(2,085)	2,753	0.5 to 6 years
Trademarks	5,900	(1,049)	4,851	0.5 to 10 years
Trade name	100	(100)	-	2 years
Non-compete	200	(89)	111	3 to 3.3 years
Total	$ 42,435	$ (6,001)	$ 36,434

	Gross		Net
	carrying	Accumulated	carrying	Estimated
April 30, 2011	amount	amortization	amount	useful life
Indefinite Lives:
Goodwill	$ 25,161	$ —	$ 25,161	—
Finite Lives:
Customer-related	6,236	(2,187)	4,049	5 to 10 years
Technology-based	4,838	(1,777)	3,061	0.5 to 6 years
Trademarks	5,900	(758)	5,142	0.5 to 5 years
Trade name	100	(100)	-	2 years
Non-compete	200	(56)	144	3 to 3.3 years
Total	$ 42,435	$ (4,878)	$ 37,557

Acquired finite-lived intangibles are generally amortized on a straight line basis over their estimated useful life. The useful life of finite-lived intangibles is the period over which the asset is expected to contribute directly or indirectly to future cash flows of the Company. Intangible assets amortization expense for the six months ended October 31, 2011 was $1,123,000. Amortization expense for the six months ended October 31, 2010 was $1,943,000. The estimated future amortization expense related to intangible assets as of October 31, 2011 is as follows (in thousands):

	Fiscal Year Ending April 30,		Amount
	Remainder of 2012		991
	2013		1,934
	2014		1,878
	2015		1,841
	2016		1,425
	Thereafter		3,204
	Total		$ 11,273

The following table summarizes the activity in the Company's goodwill account during the six months ended October 31, 2011 and 2010:

	Six Months Ended
	October 31,
	2011	2010
Balance, beginning of the period	25,161	17,928
Goodwill added through acquisition	-	15,662
Ciphersoft royalty payments	-	26
Balance, end of period	25,161	33,616

Goodwill at October 31, 2011, represents the excess of purchase prices over the sum of the amounts assigned to assets acquired less liabilities assumed. The Company believes these acquisitions will produce the following results:

Increased Market Presence and Opportunities: The addition of the acquired companies should increase the combined company's market presence and opportunities for growth in sales and earnings.

Enhanced Product Mix: The complementary nature of the Company's products with its acquisitions should benefit current customers and provide the combined company with the ability to access new customers.

Operating Efficiencies: The combination of the Company with its acquisitions provides the opportunity for potential economies of scale and cost savings.

The Company believes these primary factors support the amount of goodwill recognized as a result of the purchase price for companies it has acquired. Goodwill is tested for impairment on an annual basis as of April 30, and between annual tests if indicators of potential impairment exist, using a fair-value-based approach.

Pursuant to the accounting guidance for goodwill and other intangible assets, the measurement of impairment of goodwill consists of two steps. In the first step, the fair value of the Company is compared to its carrying value. The Company determined that the asset group to be tested for recoverability is at the business unit level as it was the lowest level at which cash flows were identifiable. The seconds step is to determine the implied fair values of the business units' goodwill, and to compare them to the carrying values of the business units' goodwill. This second step includes valuing all of the tangible and intangible assets and liabilities of the business units as if they had been acquired in a business combination to determine the implied fair values of goodwill. The business units that contain goodwill and intangible assets are Unify, Daegis, AXS-One, and CipherSoft.

- 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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