Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets and Goodwill

v3.4.0.3
Intangible Assets and Goodwill
3 Months Ended
Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets and Goodwill
Intangible Assets and Goodwill
Changes in the Company’s amortizable intangible assets consisted of the following (in thousands):
 
March 31, 2016
 
Customer Relationships
 
Developed Technology
 
Trademarks / Trade-Names
 
Covenants Not to Compete
 
Total
Original cost
$
5,053

 
$
8,453

 
$
2,188

 
$
36

 
$
15,730

Accumulated amortization
(1,210
)
 
(3,609
)
 
(562
)
 
(19
)
 
(5,400
)
Net identifiable intangible assets
$
3,843

 
$
4,844

 
$
1,626

 
$
17

 
$
10,330

Weighted-average useful lives (years)
10

 
6

 
15

 
2

 
9

 
December 31, 2015
 
Customer Relationships
 
Developed Technology
 
Trademarks / Trade-Names
 
Covenants Not to Compete
 
Total
Original cost
$
5,115

 
$
8,567

 
$
2,190

 
$
38

 
$
15,910

Accumulated amortization
(1,075
)
 
(3,261
)
 
(528
)
 
(14
)
 
(4,878
)
Net identifiable intangible assets
$
4,040

 
$
5,306

 
$
1,662

 
$
24

 
$
11,032

Weighted-average useful lives (years)
10

 
6

 
15

 
2

 
9

Changes to the carrying amount of net amortizable intangible assets for the three months ended March 31, 2016 consisted of the following (in thousands):
 
Three Months Ended 
 March 31,
Balance, beginning of period
$
11,032

Amortization expense
(548
)
Currency translation
(154
)
Balance, end of period
$
10,330

Amortization expense associated with the developed technology included in cost of service revenues was $322,000 and $316,000 for the three months ended March 31, 2016 and 2015, respectively. Amortization expense associated with other acquired intangible assets included in operating expenses as “Amortization of purchased intangibles” was $226,000 and $199,000 for the three months ended March 31, 2016 and 2015, respectively.
Changes to the carrying amount of goodwill for the three months ended March 31, 2016 consisted of the following (in thousands):
 
Three Months Ended 
 March 31,
Balance, beginning of year
$
8,103

Currency translation
(238
)
Balance, end of period
$
7,865


During the three months ended March 31, 2016, the Company’s stock price traded at levels which caused the Company’s enterprise value, excluding any control premium, to approximate its book value, resulting in increased risk of a potential impairment of goodwill. As of March 31, 2016, the Company’s market capitalization, without a control premium, exceeded its book value by approximately 59%. Declines in the Company's market capitalization could require the Company to record goodwill and other impairment charges. While a goodwill impairment charge is a non-cash charge, it would have a negative impact on the Company's results of operations.