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Goodwill and Intangible Assets
12 Months Ended
Jun. 30, 2012
Goodwill and Intangible Assets [Abstract]  
GOODWILL AND INTANGIBLE ASSETS
8.  

GOODWILL AND INTANGIBLE ASSETS

 

SunLink has goodwill related to its Healthmont and Carmichael acquisitions. We have intangible assets related to these acquisitions, as well. We also have intangible assets related to two Healthcare Facilities Segment clinic purchases.

 

Goodwill consists of the following:

 

                 
    June 30,  
    2012     2011  

Specialty Pharamcy Segment

  $ 461     $ 461  

Healthcare Facilities Segment

    0       931  
   

 

 

   

 

 

 
    $ 461     $ 1,392  
   

 

 

   

 

 

 

 

Intangible assets consist of the following, net of amortization:

 

                 
    June 30,
2012
    June 30,
2011
 

Healthcare Facilities Segment

               

Certificates of Need

  $ 80     $ 80  

Noncompetition Agreements

    83       83  
   

 

 

   

 

 

 
      163       163  

Accumulated Amortization

    (106     (91
   

 

 

   

 

 

 
      57       72  
   

 

 

   

 

 

 

Specialty Pharmacy Segment

               

Trade Name

    2,000       2,000  

Customer Relationships

    1,089       1,089  

Medicare License

    769       769  
   

 

 

   

 

 

 
      3,858       3,858  

Accumulated Amortization

    (595     (453
   

 

 

   

 

 

 
      3,263       3,405  
   

 

 

   

 

 

 

Total

  $ 3,320     $ 3,477  
   

 

 

   

 

 

 

 

The trade name intangible asset under the Specialty Pharmacy Segment is a non-amortizing intangible asset.

 

Amortization expense was $157, $612, and $787, for the fiscal years ended June 30, 2012, 2011 and 2010, respectively.

 

Annual amortization of amortizing intangibles for the next five years and thereafter is as follows:

 

         

2013

  $ 145  

2014

    145  

2015

    145  

2016

    145  

2017

    145  

2018 and thereafter

    595  
   

 

 

 

Total

  $ 1,320  
   

 

 

 

 

Impairment analysis—For the purposes of these analyses, our estimates of fair value are based on a combination of the income approach, which estimates the fair value based on future discounted cash flows, and the market approach, which estimates the fair value of based on comparable market prices. Estimates of fair value for reporting units fall under Level 3 of the fair value hierarchy. Estimates of future discounted cash flows are based on assumptions and projections we believe to be currently reasonable and supportable. These assumptions take into account revenue and expense growth rates, patient volumes, changes in payor mix, and changes in legislation and other payor payment patterns.

 

During the third quarter of fiscal 2012, the Company performed an interim impairment testing of the goodwill and certain intangible assets of its subsidiaries as March 31, 2012. The Company concluded that the carrying value of the subsidiary exceeded its fair value, and as a result, recognized a goodwill impairment charge of $931 for its Healthmont, LLC subsidiary, part of the Healthcare Facilities Segment, during the year ended June 30, 2012.

 

During the fourth quarter of fiscal 2011, we completed our annual impairment testing of goodwill and certain intangible assets. The analysis resulted in a goodwill impairment charge of $6,048 related to the Specialty Pharmacy Segment for fiscal 2011. Additionally, the Company recognized a $3,400 impairment charge to trade name and a $3,899 impairment charge to customer relationships for the fiscal year ended June 30, 2011 for the Specialty Pharmacy Segment. The decline in fair value of our Specialty Pharmacy Segment below its book value was is primarily the result of lower than expected revenue and customer growth relative to the assumptions made at the acquisition date.

 

The following table summarized goodwill and intangible asset impairment charges for the fiscal year ended June 30, 2011:

 

         
    June 30,  
    2011  

Specialty Pharmacy Segment

       

Goodwill

  $ 6,048  

Intangible assets

       

Trade Name

    3,400  

Customer Relationships

    3,899  
   

 

 

 

Total

  $ 13,347