Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets and Goodwill

v3.7.0.1
Intangible Assets and Goodwill
3 Months Ended
Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets and Goodwill
Intangible Assets and Goodwill
Intangible Assets
The Company’s amortizable intangible assets consisted of the following (in thousands):
 
March 31, 2017
 
Customer Relationships
 
Developed Technology
 
Trademarks / Trade-Names
 
Covenants Not to Compete
 
Total
Original cost
$
4,774

 
$
7,945

 
$
2,179

 
$
31

 
$
14,929

Accumulated amortization
(1,720
)
 
(4,861
)
 
(694
)
 
(31
)
 
(7,306
)
Net identifiable intangible assets
$
3,054

 
$
3,084

 
$
1,485

 
$

 
$
7,623

Weighted-average useful lives (years)
10

 
6

 
15

 
2

 
9

 
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

Changes to the carrying amount of net amortizable intangible assets for the three months ended March 31, 2017 consisted of the following (in thousands):
 
Three Months Ended 
 March 31, 2017
Balance, beginning of period
$
8,110

Amortization expense
(516
)
Currency translation
29

Balance, end of period
$
7,623


Amortization expense of intangible assets consisted of the following (in thousands):
 
 
Three Months Ended 
 March 31,
 
 
2017
 
2016
Amortization expense associated with the developed technology included in cost of revenues
 
$
293

 
$
322

Amortization expense associated with other acquired intangible assets included in operating expenses
 
223

 
226

Total amortization expense
 
$
516

 
$
548


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 $6.8 million at March 31, 2017 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.
During the three months ended March 31, 2017, 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, 2017, the Company’s market capitalization, without a control premium, exceeded its book value by approximately 68% and the Company determined there were no other triggering events necessitating a goodwill impairment analysis. 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.