Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2014

7. Goodwill and Other Intangible Assets

The Company acquired goodwill and certain identifiable intangible assets as part of the acquisitions in August 2013, October 2012, August 2012 and January 2011 and the going private transaction in July 2004.

The changes in the carrying amount of goodwill for the three months ended March 31, 2014 were as follows:

Balance at December 31, 2013	$	65,280
Foreign currency translation		(548	)
Balance at March 31, 2014	$	64,732

As the functional currency of the Company’s Canadian subsidiary, where certain of the Company’s goodwill is recorded, is its local currency, there are related foreign currency translation adjustments. The foreign currency is translated into U.S. dollars using the exchange rate in effect at period end, with any adjustment included in other comprehensive (loss) income.

A summary of intangible assets at March 31, 2014 and December 31, 2013 follows:

	March 31, 2014
	Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Acquired technology		7.0 years	$	19,749	$	(10,471	)	$	9,278
Customer relationships		12.1 years		26,993		(9,781	)		17,212
Covenant not to compete		4.2 years		381		(133	)		248
Acquired trademarks		4.5 years		1,104		(310	)		794
Trademarks		indefinite		430		—			430
Total			$	48,657	$	(20,695	)	$	27,962

	December 31, 2013
	Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Acquired technology		7.0 years	$	19,889	$	(10,070	)	$	9,819
Customer relationships		12.1 years		27,117		(9,013	)		18,104
Covenant not to compete		4.2 years		382		(112	)		270
Acquired trademarks		4.5 years		1,113		(246	)		867
Trademarks		indefinite		430		—			430
Total			$	48,931	$	(19,441	)	$	29,490

As the functional currency of the Company’s Canadian subsidiary, where certain intangible assets are recorded, is its local currency, there are related foreign currency translation adjustments. The foreign currency is translated into U.S. dollars using the exchange rate in effect at period end, with any adjustment included in other comprehensive (loss) income.

Amortization expense of intangible assets was $1,317 and $779 for the three months ended March 31, 2014 and 2013, respectively, of which $520 and $325 is recorded in cost of revenues in the accompanying consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2014 and 2013, respectively.

The Company estimates the following amortization expense related to its intangible assets for the years ended December 31:

2014 (remaining nine months)	$	3,802
2015		4,633
2016		4,211
2017		3,756
2018		3,147
Thereafter		7,983
	$	27,532

- 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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