Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill and Other Intangible Assets [Abstract]

Note 8 - Goodwill and Other Intangible Assets

The Company’s intangible assets not subject to amortization consist entirely of goodwill. Under current accounting guidance, the Company’s goodwill is not amortized throughout the period, but is subject to an annual impairment test. The Company performs an impairment test annually, or when events or changes in business circumstances indicate that the carrying value may not be recoverable. The Company performs its annual impairment test as of October 1 each year.

The Company performed the required goodwill impairment tests for 2013 and 2012 as of October 1 of each year. The Company allocated its goodwill on a geographic basis to its operating segments, which were determined to be its reporting units for goodwill impairment testing. Using projections of operating cash flow for each reporting unit, the Company performed a step one assessment of the fair value of each reporting unit as compared to the carrying value of each reporting unit. The step one impairment analysis indicated no potential impairment of the assigned goodwill for either year.

The estimates and assumptions used by the Company to test its goodwill are consistent with the business plans and estimates used to manage operations and to make acquisition and divestiture decisions. The use of different assumptions could impact whether an impairment charge is required and, if so, the amount of such impairment. If the Company fails to achieve estimated volume and pricing targets, experiences unfavorable market conditions or achieves results that differ from its estimates, then revenue and cost forecasts may not be achieved, and the Company may be required to recognize impairment charges. Additionally, future goodwill impairment charges may be necessary if the Company’s market capitalization decreases due to a decline in the trading price of the Company’s common stock.

On July 3, 2013, the Company sold the operating assets, net of certain liabilities, of its large format printing business located in Los Angeles, California. The net assets of the large format printing business were considered to be held for sale as of June 30, 2013 and a portion of the goodwill in the Americas reporting unit was allocated to the business held for sale in the quarter ended June 30, 2013. The amount allocated to the large format printing business was $7,000 and this pretax amount is included in Income (loss) from discontinued operations, net of tax on the Consolidated Statements of Comprehensive Income (Loss) for the year ended December 31, 2013.

The changes in the carrying amount of goodwill by operating segment during the years ended December 31, 2013 and 2012 were as follows:

							Asia
	Americas			Europe			Pacific			Total
Cost:
December 31, 2011	$	198,510		$	40,364		$	10,037		$	248,911
Acquisitions		673			--			--			673
Additional purchase accounting adjustments		4,301			1,368			(430	)		5,239
Foreign currency translation		503			1,293			223			2,019
December 31, 2012		203,987			43,025			9,830			256,842
Goodwill allocated to business sold		(7,000	)		--			--			(7,000	)
Additional purchase accounting adjustments		--			(1,436	)		--			(1,436	)
Foreign currency translation		(1,512	)		1,096			(1,066	)		(1,482	)

December 31, 2013	$	195,475		$	42,685		$	8,764		$	246,924

Accumulated impairment:
December 31, 2011	$	(14,422	)	$	(27,878	)	$	(1,246	)	$	(43,546	)
Foreign currency translation		(118	)		(1,251	)		(24	)		(1,393	)
December 31, 2012		(14,540	)		(29,129	)		(1,270	)		(44,939	)
Foreign currency translation		355			(610	)		183			(72	)

December 31, 2013	$	(14,185	)	$	(29,739	)	$	(1,087	)	$	(45,011	)

Net book value:
December 31, 2011	$	184,088		$	12,486		$	8,791		$	205,365
December 31, 2012	$	189,447		$	13,896		$	8,560		$	211,903
December 31, 2013	$	181,290		$	12,946		$	7,677		$	201,913

The Company’s other intangible assets subject to amortization are as follows:

		December 31, 2013
	Weighted Average Life	Cost		Accumulated Amortization			Net

Customer relationships	13.9 years	$	55,377	$	(31,342	)	$	24,035
Digital images	5.0 years		450		(450	)		--
Developed technologies	3.0 years		712		(712	)		--
Non-compete agreements	3.6 years		827		(790	)		37
Trade names	3.9 years		1,434		(1,010	)		424
Contract acquisition cost	3.0 years		1,220		(1,220	)		--

	13.1 years	$	60,020	$	(35,524	)	$	24,496

		December 31, 2012
	Weighted Average Life	Cost		Accumulated Amortization			Net

Customer relationships	13.7 years	$	57,343	$	(28,562	)	$	28,781
Digital images	5.0 years		450		(450	)		--
Developed technologies	3.0 years		712		(712	)		--
Non-compete agreements	3.6 years		877		(821	)		56
Trade names	3.9 years		1,469		(892	)		577
Contract acquisition cost	3.0 years		1,220		(1,220	)		--
	13.0 years	$	62,071	$	(32,657	)	$	29,414

Other intangible assets were recorded at fair market value as of the dates of the acquisitions based upon independent third party appraisals. The fair values and useful lives assigned to customer relationship assets are based on the period over which these relationships are expected to contribute directly or indirectly to the future cash flows of the Company. The acquired companies typically have had key long-term relationships with Fortune 500 companies lasting 15 years or more. Because of the custom nature of the work that the Company does, it has been its experience that clients are reluctant to change suppliers.

During the year ended December 31, 2013, the Company recorded impairment charges of $502, comprised of a charge of $466 in the Americas operating segment for a customer relationship intangible asset for which future cash flows did not support the carrying value and a charge of $36 for customer relationship and trade name assets in the Asia Pacific operating segment, reflecting the Company’s decision to close the Seoul, Korea office acquired in its 2011 Brandimage acquisition.

During 2012, the Company recorded impairment charges of $2,350 and $1,413, in the Americas and Europe operating segments, respectively, for customer relationship assets for which projected cash flows did not support the carrying values. The impairment charges are included in Impairment of long-lived assets in the Consolidated Statements of Comprehensive Income (Loss). See Note 7 – Impairment of Long-lived Assets for more information.

Amortization expense for continuing operations was $4,089, $5,170 and $5,127 for 2013, 2012 and 2011, respectively. Amortization expense for each of the next five years is expected to be approximately $3,933 for 2014, $3,746 for 2015, $3,696 for 2016, $3,508 for 2017 and $3,434 for 2018.

- 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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