Goodwill and Other Intangible Assets

3 Months Ended

Sep. 30, 2012

Note 6.

Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill are as follows ($000):


	Three Months Ended September 30, 2012
	Infrared Optics		Near-Infrared Optics			Military & Materials		Advanced Products Group		Total

Balance – beginning of period	$	9,612	$	48,496		$	12,326	$	10,314	$	80,748
Foreign currency translation		83		(83	)		—		—		—


Balance – end of period	$	9,695	$	48,413		$	12,326	$	10,314	$	80,748

The Company reviews the recoverability of goodwill at least annually and any time business conditions indicate a potential change in recoverability. The measurement of a potential impairment begins with comparing the current fair value of the Company’s reporting units to the recorded value (including goodwill). The Company uses a discounted cash flow model (“DCF model”) and a market analysis to determine the current fair value of its reporting units. A number of significant assumptions and estimates are involved in estimating the forecasted cash flows used in the DCF model, including markets and market shares, sales volume and pricing, costs to produce, working capital changes and income tax rates. Management considers historical experience and all available information at the time the fair values of the reporting units are estimated. However, actual fair values that could be realized could differ from those used to evaluate the impairment of goodwill.

The gross carrying amount and accumulated amortization of the Company’s intangible assets other than goodwill as of September 30, 2012 and June 30, 2012 was as follows ($000):


	September 30, 2012							June 30, 2012
	Gross Carrying Amount		Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Amortization			Net Book Value

Patents	$	21,854	$	(8,078	)	$	13,776	$	21,856	$	(7,640	)	$	14,216
Trademarks		13,166		(907	)		12,259		13,166		(888	)		12,278
Customer Lists		25,868		(8,933	)		16,935		25,816		(8,296	)		17,520
Other		1,378		(1,378	)		—		1,375		(1,375	)		—

Total	$	62,266	$	(19,296	)	$	42,970	$	62,213	$	(18,199	)	$	44,014

Amortization expense recorded on these intangible assets was $1.1 million and $1.0 million, for the three months ended September 30, 2012 and 2011, respectively. The patents are being amortized over a range of 120 to 240 months with a weighted average remaining life of approximately 121 months. The customer lists are being amortized over approximately 120 months with a weighted average remaining life of approximately 97 months. The gross carrying amount of trademarks includes $11.4 million of acquired trade names resulting from past acquisitions. These trade names have indefinite lives and are not amortized but tested annually for impairment or more frequently if a triggering event occurs. Included in the gross carrying amount and accumulated amortization of the Company’s intangible assets is the effect of foreign currency translation on that portion of the intangible assets relating to the Company’s German subsidiaries, Photop Technologies, Inc. (“Photop”) and AOFR Pty. Ltd. (“AOFR”).

At September 30, 2012, the estimated amortization expense for existing intangible assets for each of the five succeeding fiscal years is as follows ($000):


Year Ending June 30,

Remaining 2013	$	3,163
2014		3,744
2015		3,479
2016		3,411
2017		3,402

- 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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