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Goodwill And Intangible Assets
12 Months Ended
Dec. 31, 2011
Goodwill And Intangible Assets [Abstract]  
Goodwill And Intangible Assets

 

 

5.

GOODWILL AND INTANGIBLE ASSETS

Goodwill

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):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,
2010

 

Additions

 

Impairments

 

Foreign
Currency

 

December 31,
2011

 

 

 

 

 

 

 

 

Flow Traffic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Flow Traffic goodwill

 

$

1,050

 

$

 

$

 

$

 

$

1,050

 

Accumulated impairment losses

 

 

 

 

 

 

(1,050

)

 

 

 

(1,050

)

 

 

 

 

 

 

 

Flow Traffic goodwill

 

 

1,050

 

 

 

 

(1,050

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EIS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EIS goodwill

 

 

8,239

 

 

 

 

 

 

 

 

8,239

 

Accumulated impairment losses

 

 

 

 

 

 

(6,867

)

 

 

 

(6,867

)

 

 

 

 

 

 

 

EIS goodwill

 

 

8,239

 

 

 

 

(6,867

)

 

 

 

1,372

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CitySync:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CitySync goodwill

 

 

5,424

 

 

 

 

 

 

92

 

 

5,516

 

Accumulated impairment losses

 

 

 

 

 

 

(3,768

)

 

 

 

(3,768

)

 

 

 

 

 

 

 

CitySync goodwill

 

 

5,424

 

 

 

 

(3,768

)

 

92

 

 

1,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total goodwill

 

$

14,713

 

$

 

 

$

(11,685

)

$

92

 

$

3,120

 

 

 



 



 



 



 



 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,
2009

 

Additions

 

Impairments

 

Foreign
Currency

 

December 31,
2010

 

 

 

 

 

 

 

 

Flow Traffic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Flow Traffic goodwill

 

$

1,050

 

$

 

$

 

$

 

$

1,050

 

Accumulated impairment losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Flow Traffic goodwill

 

 

1,050

 

 

 

 

 

 

 

 

1,050

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EIS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EIS goodwill

 

 

6,574

 

 

1,665

 

 

 

 

 

 

8,239

 

Accumulated impairment losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EIS goodwill

 

 

6,574

 

 

1,665

 

 

 

 

 

 

8,239

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CitySync:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CitySync goodwill

 

 

 

 

5,308

 

 

 

 

116

 

 

5,424

 

Accumulated impairment losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CitySync goodwill

 

 

 

 

5,308

 

 

 

 

116

 

 

5,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total goodwill

 

$

7,624

 

$

6,973

 

$

 

$

116

 

$

14,713

 

 

 



 



 



 



 



 

We apply a fair value based impairment test to the carrying 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 we experienced a significant and sustained decline in its stock price. The decline resulted in our market capitalization falling significantly below the recorded value of its consolidated net assets. As a result, we 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 our initial assessment of impairment of its goodwill (step 1), we determined that the carrying value of each reporting unit exceeded its estimated fair value. Therefore, we performed the second step of the impairment assessment to determine the implied fair value of goodwill. In performing the goodwill assessment, we used current market capitalization, discounted cash flows and other factors as the best evidence of fair value.

We 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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

Gross Carrying
Amount

 

Accumulated
Amortization

 

Net Carrying
Value

 

Weighted
Average
Useful Life
(in Years)

 

 

 

 

 

 

 

Developed technology

 

$

7,352

 

$

(2,570

)

$

4,782

 

 

5.5

 

Trade names

 

 

3,188

 

 

(1,356

)

 

1,832

 

 

3.7

 

Other intangible assets

 

 

1,769

 

 

(495

)

 

1,274

 

 

4.9

 

 

 

 

 

 

 

Total

 

$

12,309

 

$

(4,421

)

$

7,888

 

 

4.9

 

 

 



 



 



 



 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2010

 

 

 

 

 

 

Gross Carrying
Amount

 

Accumulated
Amortization

 

Net Carrying
Value

 

Weighted
Average
Useful Life
(in Years)

 

 

 

 

 

 

 

Developed technology

 

$

7,364

 

$

(1,705

)

$

5,659

 

 

6.5

 

Trade names

 

 

3,193

 

 

(870

)

 

2,323

 

 

4.7

 

Other intangible assets

 

 

1,774

 

 

(243

)

 

1,531

 

 

5.9

 

 

 

 

 

 

 

Total

 

$

12,331

 

$

(2,818

)

$

9,513

 

 

5.9

 

 

 



 



 



 



 

The estimated future amortization expense related to other intangible assets for the next five fiscal years is as follows (dollars in thousands):

 

 

 

 

 

 

 

Amortization
Expense

 

 

2012

 

$

1,561

 

2013

 

 

1,283

 

2014

 

 

1,267

 

2015

 

 

1,234

 

2016

 

 

779

 

Future amortization amounts presented above are estimates. Actual future amortization expense may be different due to future acquisitions, impairments, changes in amortization periods, or other factors.

In connection with the triggering event discussed above, during the third quarter of 2011, we reviewed our long-lived assets and determined that none of the long-lived assets were impaired for its asset groups. The determination was based on reviewing estimated undiscounted cash flows for our 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 us 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.