Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Note 5.

Intangible Assets and Goodwill

Identifiable intangible assets as of December 31, 2015, consist of the following (in thousands):

	Successor
	December 31, 2015
	Estimated			Accumulated
	Life	Cost		Amortization		Net

Customer relationships	8 years	$	26,380	$	698	$	25,682
Trade name	15 years		13,460		154		13,306
		$	39,840	$	852	$	38,988

Identifiable intangible assets as of December 31, 2014, consist of the following (in thousands):

	Predecessor
	December 31, 2014
	Estimated			Accumulated		Accumulated
	Life	Cost		Amortization		Impairment		Net

Customer relationships	1 - 10 years	$	6,500	$	1,689	$	1,811	$	3,000
Trade name	1 year		100		100		-		-
		$	6,600	$	1,789	$	1,811	$	3,000

Amortization expense amounted to $0.85 million and $0.71 million for the periods from November 24, 2015 through December 31, 2015 and January 1, 2015 through November 23, 2015, respectively, and $0.63 million and $1.63 million for the years ended December 31, 2014 and 2013, respectively.

Estimated amortization of the intangible assets for subsequent years is as follows (in thousands):

Year Ending December 31,

2016	$	7,003
2017		6,535
2018		5,600
2019		5,110
2020		4,537
Thereafter		10,203
	$	38,988

The Company’s goodwill balance by reporting unit, consists of the following as of December 31 (in thousands):

	DSTI		Seamast		Access		Total

Balance, December 31, 2013, Predecessor	$	2,098	$	1,898	$	5,820	$	9,816
Impairment loss		(1,658)		-		(3,459)		(5,117)
Balance, December 31, 2014, Predecessor		440		1,898		2,361		4,699
Impairment loss		-		-		(2,064)		(2,064)
Balance, November 23, 2015, Predecessor		440		1,898		297		2,635
Elimination of predecessor goodwill		(440)		(1,898)		(297)		(2,635)
Acquisition of business		-		-		-		113,589
Balance, December 31, 2015, Successor	$	-	$	-	$	-	$	113,589

During the Predecessor periods, the Company had completed three acquisitions resulting in goodwill: DSTI, Seamast, and Access Systems. Subsequent to the Business Combination, the Company determined that there was one reporting unit and determined the carrying value of the reporting unit was equal to its fair value on the Closing Date. For the period from January 1, 2015 through November 23, 2015, the Company recorded an impairment loss on Access Systems’ goodwill of $2.06 million. For the years ended December 31, 2014 and 2013, the Company recorded an impairment loss on Access Systems’ goodwill of $3.46 million and $1.66 million, respectively, and an impairment loss on DSTI’s goodwill of $1.66 million for the year ended December 31, 2014. The Company also recorded an impairment loss on the Access Systems customer relationships of $0.91 million during the period from January 1, 2015 through November 23, 2015 and $1.81 million for the year ended December 31, 2014, primarily due to declining profits on contracts. The primary methods used to measure the impairment losses for DSTI and Access Systems were the income method and the market approach. The unobservable inputs used were based on Company-specific information and included estimates of revenue, profit margins and discount rates. The Company used the two-step approach in measuring the impairment loss. In the second step, the implied value of the goodwill is estimated at the fair value of the reporting unit less the fair value of all other tangible and identifiable intangible assets of the reporting unit. If the carrying amount of the goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in the amount equal to that excess, not to exceed the carrying amount of the goodwill. For the reporting period ending December 31, 2015, following an assessment of revenue, profit, and cash flow projections and the relevant discount rates the Company did not record any impairment charges for the Successor period from November 24, 2015 through December 31, 2015.

- 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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