Intangible Asset

9 Months Ended

Jun. 30, 2011

Intangible Asset

Intangible Asset

7.  Intangible Asset

The Company recorded an intangible asset as the result of a business combination in fiscal year 2008.  The acquired intangible asset is customer relationships, which is being amortized over the estimated period of economic benefit expected to be received, resulting in a weighted average amortization period of 4.97 years.  The following table presents the intangible asset balances as of June 30, 2011 and September 30, 2010 (in thousands):

	June 30, 2011						September 30, 2010
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Customer relationships	$	11,775	$	6,199	$	5,576	$	11,775	$	5,201	$	6,574

Amortization expense for the three and nine months ended June 30, 2011 was $332,000 and $997,000, respectively. The estimated future amortization expense for the intangible asset as of June 30, 2011 by fiscal year is $332,000 for the remainder of 2011, $1,119,000 for 2012, $868,000 for 2013, $678,000 for 2014, $537,000 for 2015, and $2,042,000 thereafter.

The Company reviews long-lived assets, including definite-lived intangible assets, to determine if any adverse conditions exist that would indicate impairment.  Factors that could lead to an impairment of acquired customer relationships include a worsening in customer attrition rates compared to historical attrition rates, or lower than initially anticipated cash flows associated with customer relationships.  The Company assesses the recoverability of long-lived assets based on the projected undiscounted future cash flows estimated to be generated over the asset’s remaining life.  The amount of impairment, if any, is measured based on the excess of the carrying value over fair value.  Fair value is generally calculated as the present value of estimated future cash flows using a risk-adjusted discount rate, which requires significant management judgment with respect to revenue and expense growth rates, and the selection and use of an appropriate discount rate.  As of June 30, 2011, there were no triggering events that led to the Company performing an impairment review of the intangible asset.