XML 30 R13.htm IDEA: XBRL DOCUMENT v3.6.0.2
GOODWILL AND OTHER INTANGIBLE ASSETS
12 Months Ended
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS
6.
GOODWILL AND OTHER INTANGIBLE ASSETS
 
At December 31, 2016 and 2015, the gross carrying amount and accumulated amortization of intangible assets, other than goodwill, are as follows:
 
 
 
 
 
December 31,
 
 
 
 
 
Identifiable
 
 
December 31,
 
 
 
 
 
Identifiable
 
 
 
 
 
2016
 
 
 
 
 
Intangible
 
 
2015
 
 
 
 
 
Intangible
 
(in thousands)
 
*Estimated
 
Gross
 
 
 
 
 
Assets, less
 
 
Gross
 
 
 
 
 
Assets, less
 
 
 
Useful
 
Carrying
 
 
Accumulated
 
 
Accumulated
 
 
Carrying
 
 
Accumulated
 
 
Accumulated
 
 
 
Life
 
Amount
 
 
Amortization
 
 
Amortization
 
 
Amount
 
 
Amortization
 
 
Amortization
 
Finite-lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Power and Electro-Mechanical Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trademark and trade name - V-Infinity
 
5 years
 
$
1,095
 
 
$
(986)
 
 
$
109
 
 
$
1,095
 
 
$
(767)
 
 
$
328
 
Trademark and trade name - AMP Group
 
3 years
 
 
27
 
 
 
(14)
 
 
 
13
 
 
 
27
 
 
 
(4)
 
 
 
23
 
Trademark and trade name - CUI Canada
 
3 years
 
 
128
 
 
 
(79)
 
 
 
49
 
 
 
128
 
 
 
(36)
 
 
 
92
 
Technology rights
 
20 years**
 
 
1,291
 
 
 
(410)
 
 
 
881
 
 
 
1,241
 
 
 
(251)
 
 
 
990
 
Computer software
 
3 to 5 years
 
 
926
 
 
 
(807)
 
 
 
119
 
 
 
972
 
 
 
(780)
 
 
 
192
 
Product certifications
 
3 years
 
 
1,059
 
 
 
(479)
 
 
 
580
 
 
 
825
 
 
 
(439)
 
 
 
386
 
Customer relationships - CUI Canada
 
7 years
 
 
267
 
 
 
(70)
 
 
 
197
 
 
 
267
 
 
 
(32)
 
 
 
235
 
Other intangible assets
 
***
 
 
121
 
 
 
(109)
 
 
 
12
 
 
 
121
 
 
 
(92)
 
 
 
29
 
Total Power and Electro-Mechanical
 
 
 
 
4,914
 
 
 
(2,954)
 
 
 
1,960
 
 
 
4,676
 
 
 
(2,401)
 
 
 
2,275
 
Energy Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Order backlog
 
2 years
 
 
2,748
 
 
 
(2,748)
 
 
 
 
 
 
3,298
 
 
 
(3,298)
 
 
 
 
Trade name - Orbital
 
10 years
 
 
1,478
 
 
 
(554)
 
 
 
924
 
 
 
1,773
 
 
 
(488)
 
 
 
1,285
 
Customer list - Orbital
 
10 years
 
 
5,746
 
 
 
(2,155)
 
 
 
3,591
 
 
 
6,895
 
 
 
(1,896)
 
 
 
4,999
 
Technology rights
 
20 years**
 
 
308
 
 
 
(106)
 
 
 
202
 
 
 
370
 
 
 
(90)
 
 
 
280
 
Technology-Based Asset - Know How
 
12 years
 
 
2,328
 
 
 
(727)
 
 
 
1,601
 
 
 
2,793
 
 
 
(640)
 
 
 
2,153
 
Technology-Based Asset - Software
 
10 years
 
 
505
 
 
 
(189)
 
 
 
316
 
 
 
605
 
 
 
(166)
 
 
 
439
 
Computer software
 
3 to 5 years
 
 
301
 
 
 
(2)
 
 
 
299
 
 
 
2
 
 
 
(1)
 
 
 
1
 
Other intangible assets
 
***
 
 
9
 
 
 
(3)
 
 
 
6
 
 
 
11
 
 
 
(1)
 
 
 
10
 
Total Energy Segment
 
 
 
 
13,423
 
 
 
(6,484)
 
 
 
6,939
 
 
 
15,747
 
 
 
(6,580)
 
 
 
9,167
 
Other segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other intangible assets
 
***
 
 
 
 
 
 
 
 
 
 
 
20
 
 
 
(18)
 
 
 
2
 
Indefinite-lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Power and Electro-Mechanical Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade mark and trade name - CUI
 
 
 
 
4,893
 
 
 
 
 
 
4,893
 
 
 
4,893
 
 
 
 
 
 
4,893
 
Customer list - CUI
 
 
 
 
1,857
 
 
 
 
 
 
1,857
 
 
 
1,857
 
 
 
 
 
 
1,857
 
Patents pending - Technology
 
 
 
 
552
 
 
 
 
 
 
552
 
 
 
552
 
 
 
 
 
 
552
 
 
 
 
 
 
7,302
 
 
 
 
 
 
7,302
 
 
 
7,302
 
 
 
 
 
 
7,302
 
Total Identifiable other intangible assets
 
 
 
$
25,639
 
 
$
(9,438)
 
 
$
16,201
 
 
$
27,745
 
 
$
(8,999)
 
 
$
18,746
 
 
* All intangibles are reviewed annually for impairment, or sooner if circumstances change.
** Technology rights are amortized over a 20-year life or the term of the rights agreement.
*** Other intangible assets are amortized over an appropriate useful life, as determined by management in relation to the other intangible asset characteristics.
 
Management reviews the goodwill and other intangible assets for impairment when facts or circumstances suggest. As of December 31, 2016, management has evaluated the finite-lived and indefinite-lived intangible assets and goodwill and believes no impairment exists.
 
Amortization expense from continuing operations for the years ended December 31, 2016, 2015 and 2014 amounted to $1.9 million, $2.4 million, and $3.7 million, respectively. 
 
The following table reflects the carrying amount of goodwill as of December 31, 2016 and 2015, and the 2016 and 2015 activity (in thousands):
 
 
 
Power and
 
 
 
 
 
 
 
 
 
 
 
 
Electro - 
 
 
 
 
 
 
 
 
 
 
 
 
Mechanical
 
 
Energy
 
 
Other
 
 
Total
 
Balance, December 31, 2014
 
$
13,021
 
 
$
8,866
 
 
$
 
 
$
21,887
 
CUI-Canada, Inc. acquisition
 
 
64
 
 
 
 
 
 
 
 
 
64
 
Currency translation adjustments
 
 
(8)
 
 
 
(416)
 
 
 
 
 
 
 
(424)
 
Balance, December 31, 2015
 
 
13,077
 
 
 
8,450
 
 
 
 
 
 
21,527
 
Currency translation adjustments
 
 
6
 
 
 
(1,408)
 
 
 
 
 
 
(1,402)
 
Balance, December 31, 2016
 
$
13,083
 
 
$
7,042
 
 
$
 
 
$
20,125
 
 
Order backlog
As of December 31, 2016, $2.7 million of costs related to Orbital order backlog have been capitalized. Amortization expense of order backlog during 2016 was zero compared to $0.4 million and $1.8 million in 2015 and 2014, respectively. This asset was acquired with the acquisition Orbital in 2013. The order backlog was fully amortized in 2015.
 
Trademarks and trade name
As of December 31, 2016, $4.9 million of costs related to the CUI trade name (considered indefinite lived and not amortized), $1.1 million of costs related to the V-Infinity brand, $1.5 million related to Orbital trademarks and trade names, $0.1 million related to CUI-Canada trademark and trade name and $27 thousand related to the AMP Group’s Trademark and trade name have been capitalized. Amortization expense of trademarks and trade names during 2016 was approximately $0.4 million compared to $0.4 million and $0.4 million, in 2015 and 2014, respectively. The estimated annual amortization expense related to trademarks and trade names as of December 31, 2016 is expected to be $0.3 million in 2017, $0.2 million in 2018, $0.1 million in 2019, $0.1 million in 2020 $0.1 million in 2021 and $0.2 million thereafter.  
 
Customer lists
As of December 31, 2016, $5.7 million of costs related to the Orbital customer lists, $0.3 million related to CUI-Canada customer lists and $1.9 million related to the CUI customer lists have been capitalized. The CUI customer list is considered to have an indefinite life. Amortization expense of customer lists during 2016, 2015, and 2014 was approximately $0.7 million, $0.7 million, and $0.8 million, respectively. The estimated annual amortization of the amortizable customer lists as of December 31, 2016 is expected to be $0.6 million in 2017, $0.6 million in 2018, $0.6 million in 2019, $0.6 million in 2020 $0.6 million in 2021 and $0.7 million thereafter. 
 
Technology rights
As of December 31, 2016, $1.6 million of costs related to technology rights have been capitalized including $1.0 million related to our CUI-Canada acquisition in March 2015. The CUI-Canada Technology rights are amortized over a 7-year life. The rest of the technology rights are amortized over a 20-year life. Amortization expense of technology rights during 2016 was approximately $0.2 million compared to $0.2 million in 2015 and $68 thousand in 2014. The estimated annual amortization expense related to existing technology rights as of December 31, 2016 is expected to be $0.2 million in 2017, $0.2 million in 2018, $0.2 million in 2019, $0.2 million in 2020 $0.2 million in 2021 and $0.1 million thereafter.
 
Technology-based assets
As of December 31, 2016, $2.3 million of technology-based assets – ‘‘know how’’ have been capitalized. Also at December 31, 2016, $0.5 million of technology-based assets - software have been capitalized. Amortization expense of technology-based assets during 2016, 2015 and 2014 was approximately $0.3 million, $0.3 million and $0.3 million, respectively. These assets were acquired in 2013 with the acquisition of Orbital. The estimated annual amortization expense related to existing technology-based assets as of December 31, 2016 is expected to be $0.2 million in 2017, $0.2 million in 2018, $0.2 million in 2019, $0.2 million in 2020 $0.2 million in 2021 and $0.7 million thereafter.
 
Computer software
As of December 31, 2016, $1.2 million of computer software costs have been capitalized.  Amortization expense of computer software during 2016, 2015 and 2014 was approximately $76 thousand, $69 thousand and $52 thousand, respectively. The estimated annual amortization expense related to current computer software as of December 31, 2016 is expected to be $112 thousand in 2017, $117 thousand in 2018, $101 thousand in 2019, $55 thousand in 2020, and $23 thousand in 2021 and $11 thousand thereafter.
 
Product Certifications
As of December 31, 2016, $1.1 million of product certifications have been capitalized.  Amortization expense of product certifications during 2016, 2015 and 2014 was approximately $0.3 million, $0.2 million and $0.2 million, respectively. The estimated annual amortization expense related to product certifications as of December 31, 2016 is expected to be $0.3 million in 2017, $0.2 million in 2018, and $71 thousand in 2019.
 
Other intangible assets
As of December 31, 2016, $0.7 million of other intangible assets have been capitalized. These assets are amortizing over various estimated useful lives based on their individual characteristics. Of the balance at December 31, 2016, $0.6 million relates to AMT patent pending technology that is considered indefinite lived and not amortized. During 2016, 2015 and 2014, the amortization expense related to other intangible assets was approximately $22 thousand, $22 thousand, and $25 thousand, respectively. The estimated annual amortization expense related to existing other intangible assets as of December 31, 2016 is expected to be  $9 thousand in 2017, $3 thousand in 2018, $3 thousand in 2019, $2 thousand in 2020 and less than $1 thousand in 2021.