Annual report pursuant to Section 13 and 15(d)

Intangible Assets and Goodwill

v3.7.0.1
Intangible Assets and Goodwill
12 Months Ended
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
Intangible Assets
The Company’s amortizable intangible assets consisted of the following (in thousands):
 
December 31, 2016
 
Customer Relationships
 
Developed Technology
 
Trademarks / Trade-Names
 
Covenants Not to Compete
 
Total
Original cost
$
4,759

 
$
7,917

 
$
2,178

 
$
31

 
$
14,885

Accumulated amortization
(1,577
)
 
(4,509
)
 
(658
)
 
(31
)
 
(6,775
)
Net identifiable intangible assets
$
3,182

 
$
3,408

 
$
1,520

 
$

 
$
8,110

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 year ended December 31, 2016 consisted of the following (in thousands):
 
Year Ended 
 December 31, 2016
Balance, beginning of period
$
11,032

Amortization expense
(2,142
)
Currency translation
(780
)
Balance, end of period
$
8,110


Amortization expense of intangible assets consisted of the following (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Amortization expense associated with the developed technology included in cost of revenues
$
1,251

 
$
1,268

 
$
650

Amortization expense associated with other acquired intangible assets included in operating expenses
891

 
798

 
652

Total amortization expense
$
2,142

 
$
2,066

 
$
1,302


The Company estimates that amortization expense associated with intangible assets will be as follows (in thousands):
Year Ending December 31,
 
2017
$
2,059

2018
1,861

2019
1,188

2020
922

2021
722

Thereafter
1,358

Total
$
8,110


Goodwill
On October 3, 2014, the Company completed the acquisition of Kulu Valley, Ltd., subsequently renamed Qumu Ltd, and recognized $8.8 million of goodwill and $6.7 million of intangible assets. The goodwill balance of $6.7 million at December 31, 2016 reflects the impact of foreign currency exchange rate fluctuations since the acquisition date. The gross carrying amount of goodwill related to the 2011 acquisition of Qumu, Inc. of $22.2 million was fully impaired in 2012.
As of December 31, 2016, the Company’s market capitalization, without a control premium, was greater than its book value and, as a result, the Company concluded there was no goodwill impairment. Declines in the Company’s market capitalization or a downturn in its future financial performance and/or future outlook 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.