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Goodwill And Intangible Assets
9 Months Ended
Sep. 30, 2011
Goodwill And Intangible Assets [Abstract] 
Goodwill And Intangible Assets

Note C: Goodwill and Intangible Assets

Because the goodwill and intangible assets related to the CitySync acquisition are accounted for in Great Britain Pounds, they are impacted by period-end rates of exchange to United States Dollars and therefore may vary in different reporting periods.

Goodwill consisted of the following reporting units (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

September 30,
2011

 

December 31,
2010

 

Flow Traffic Ltd.

 

$

--

 

$

1,050

 

CitySync

 

 

1,767

 

 

5,424

 

RTMS

 

 

1,372

 

 

8,239

 

  Total goodwill

 

$

3,139

 

$

14,713

 

 

The Company applies a fair value based impairment test to the net book value of goodwill for each reporting unit on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred. In the third quarter of 2011 the Company experienced a significant and sustained decline in its stock price. The decline in stock resulted in the Company's market capitalization falling significantly below the recorded value of its consolidated net assets. As a result, the Company concluded a triggering event had occurred and performed an impairment test of goodwill for each reporting unit as of the end of the third quarter of 2011.

 

Based on the results of the Company's initial assessment of impairment of its goodwill (step 1), it was determined that the carrying value of each reporting unit exceeded its estimated fair value. Therefore, the Company performed a second step of the impairment assessment to determine the implied fair value of goodwill. In performing the goodwill assessment, the Company used current market capitalization, discounted cash flows and other factors as the best evidence of fair value.

 

The Company recorded goodwill impairment charges in the third quarter of 2011 of $1.1 million, $3.7 million, and $6.9 million for the Flow Traffic Ltd., CitySync and RTMS reporting units, respectively.

Intangible assets consisted of the following (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

September 30,
2011

 

December 31,
2010

 

Developed technology (8 year life)

 

$

7,391

 

$

7,364

 

Trade names (5 to 9 year life)

 

 

3,210

 

 

3,193

 

Other intangibles (3 to 8 year life)

 

 

1,787

 

 

1,774

 

Less: Accumulated amortization

 

 

(4,029

)

 

(2,818

)

Total identifiable intangible assets, net

 

$

8,359

 

$

9,513

 

 

We expect to recognize amortization expense for the intangible assets described in the above table in each of our years ending December 31 of $1.7 million in each of 2011 and 2012, and $1.3 million in each of 2013, 2014 and 2015. The weighted average amortization period remaining for intangible assets is 5.3 years.

 

In connection with the triggering event discussed above, during the third quarter of 2011, the Company reviewed its long-lived assets and determined that none of its long-lived assets were impaired for its asset groups. The determination was based on reviewing estimated undiscounted cash flows for the Company's asset groups, which were greater than their carrying values. As required under GAAP, this impairment analysis occurred before the goodwill impairment assessment.

 

The evaluation of the recoverability of long-lived assets requires the Company to make significant estimates and assumptions. These estimates and assumptions primarily include, but are not limited to, the identification of the asset group at the lowest level of independent cash flows and the primary asset of the group; and long-range forecasts of revenue, reflecting management's assessment of general economic and industry conditions, operating income, depreciation and amortization and working capital requirements.