Note 6 - Goodwill and Intangible Assets

12 Months Ended

Mar. 31, 2014

Disclosure Text Block [Abstract]

Intangible Assets Disclosure [Text Block]

Note 6 Goodwill and Intangible Assets

Goodwill

     The Company performs an impairment test of goodwill annually, or when events or a change in circumstances indicate that the carrying value might exceed the current fair value. The goodwill as of March 31, 2014 was created in the SCC acquisition and was re-evaluated as of March 31, 2014 based upon the Company’s planned divestiture of the Distribution business. Certain factors may result in the need to perform an impairment test other than annually, including significant underperformance of the Company's business relative to expected operating results, significant adverse economic and industry trends, and a decision to divest an individual business within a reporting unit.

If the fair value of the reporting unit is determined, based on qualitative factors, to be more likely than not less than the carrying amount of the reporting unit, then the Company is required to perform the goodwill impairment test. Goodwill impairment is determined using a two-step process.

• The first step is to identify if a potential impairment exists by comparing the fair value of the business with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered to have a potential impairment and the second step of the process is not necessary. However, if the carrying amount of a reporting unit exceeds its fair value, the second step is performed to determine if goodwill is impaired and to measure the amount of impairment loss to recognize, if any.

• The second step, if necessary, compares the implied fair value of goodwill with the carrying amount of goodwill. If the implied fair value of goodwill exceeds the carrying amount, then goodwill is not considered impaired. However, if the carrying amount of goodwill exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess.

The Company estimates the fair value using various valuation techniques, with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires the Company to make various assumptions about sales, operating margins, growth rates and discount rates. Assumptions about discount rates are based on a weighted-average cost of capital derived from observable market inputs and comparable company data. Assumptions about sales, operating margins, and growth rates are based on management’s forecasts, business plans, economic projections, anticipated future cash flows and marketplace data. Assumptions are also made for varying perpetual growth rates for periods beyond the long-term business plan period. Based on management’s qualitative assessment, the Company concluded that no potential impairment existed during year ended March 31, 2014.

Intangible Asset Summary

Identifiable intangible assets, with zero residual value, are being amortized (except for the trademarks which have an indefinite life) over useful lives of five years for developed technology, eight to fourteen years for customer relationships, three years for customer list and seven years for the domain name and are valued as follows (in thousands):

	As of March 31, 2014							As of March 31, 2013
	Gross carrying		Accumulated			Net		Gross carrying		Accumulated			Net
	amount		amortization					amount		amortization
Developed technology	$	4,170	$	(1,483	)	$	2,687	$	4,170	$	(370	)	$	3,800
Customer relationships		14,490		(1,485	)		13,005		14,490		(307	)		14,183
Domain name		135		(19	)		116		135		-			135
Internal-use software		244		(46	)		198		13		(1	)		12
Trademarks (not amortized)		3,590		-			3,590		3,590		-			3,590
	$	22,629	$	(3,033	)	$	19,596	$	22,398	$	(678	)	$	21,720

Aggregate amortization expense for the years ended March 31, 2014, 2013 and 2012 was $2.4 million, $0.7 million and zero, respectively. The following is a schedule of estimated future amortization expense (in thousands):

2015	$	3,459
2016		3,948
2017		3,149
2018		2,146
2019		1,501
Thereafter		1,803
Total	$	16,006

Debt issuance costs

Debt issuance costs are included in “Other Assets” and are amortized over the life of the related debt. Debt issuance costs consisted of the following (in thousands):

	March 31, 2014			March 31, 2013
Debt issuance costs	$	2,771		$	2,736
Less: accumulated amortization		(1,848	)		(1,525	)
Debt issuance costs, net	$	923		$	1,211

Amortization expense was $323,000, $199,000 and $482,000 for the years ended March 31, 2014, 2013 and 2012, respectively and was included in interest expense. During fiscal 2014 and 2013, the Company incurred $35,000 and $762,000, respectively of debt issuance costs related to amendments to the Company’s Credit Facility.