Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets (Notes)

v2.4.0.8
Goodwill and Intangible Assets (Notes)
12 Months Ended
Mar. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure [Text Block]
Goodwill and Intangible Assets:
Goodwill
In accordance with ASC 350, the Company performs an evaluation of goodwill on an annual basis or more frequently if circumstances indicate a potential impairment. The annual test for impairment is conducted in the fourth quarter of each fiscal year.
In fiscal year 2013, the Company evaluated the performance and goodwill for the combined reporting units consisting of Noran Tel and Westell, which is the same as the Westell segment and determined that the full carrying amount of goodwill of $2.9 million was impaired. In fiscal year 2014, the Company acquired Kentrox on April 1, 2013 and CSI on March 1, 2014 and each are reporting units.
January 1, 2014 Evaluation
The Company performed its annual evaluation of goodwill as of January 1, 2014. The Company assessed whether it was more likely than not that fair value of the Kentrox reporting unit, which made up all of the goodwill on that date, was less than its carrying amount including goodwill by considering the following factors: macroeconomic conditions, industry and market considerations, financial market considerations, key personnel, share price and overall financial performance. Based on these factors, the Company determined no indicators of impairment were present and therefore it was not necessary to perform a two-step goodwill impairment test.
Changes in the carrying amounts of goodwill by reporting units are as follows:
(in thousands)
Kentrox
 
CSI
 
Noran Tel
 
Westell
 
Total
Gross goodwill
$

 
$

 
$
1,890

 
$
9,651

 
$
11,541

Accumulated impairment

 

 
(1,381
)
 
(9,651
)
 
(11,032
)
Currency translation

 

 
292

 

 
292

April 1, 2012 balance, net

 

 
801

 

 
801

Noran Tel relocation

 

 
(798
)
 
798

 

Business acquisition

 

 

 
2,086

 
2,086

Goodwill impairment

 

 

 
(2,884
)
 
(2,884
)
Currency translation

 

 
(3
)
 

 
(3
)
March 31, 2013 balance, net

 

 

 

 

Business acquisitions
10,555

 
20,142

 

 

 
30,697

March 31, 2014 balance, net
$
10,555

 
$
20,142

 
$

 
$

 
$
30,697


Intangible Assets
In fiscal year 2014, the Company determined that the NoranTel trade name would be phased out over a one year period and therefore started to amortize the intangible asset over its remaining useful life. In the fourth quarter of fiscal year 2014, indicators of impairment were present with the declining revenue from legacy products in the Westell segment and the Company performed an evaluation to test intangible assets related to those products for recoverability. The Company concluded that the transmission product technology intangible acquired with the NoranTel acquisition was impaired. A $245,000 charge resulted recorded in intangible amortization expense to reduce the value of the asset to $205,000 which will be amortized over the remaining useful life of two years. The Company determined that indicators of impairment related to the ANTONE and current year Kentrox and CSI acquisitions were not present. During the years ended March 31, 2013 and 2012, no impairment existed with respect to the Company's intangible assets with determinable lives and no significant changes to the remaining useful lives were necessary.
The following table presents details of the Company’s intangibles from historical acquisitions, including the fiscal year 2013 ANTONE acquisition and fiscal year 2014 Kentrox and CSI acquisitions:
 
 
March 31, 2014
 
March 31, 2013
 
 
Gross Carrying Amount
 
Accumulated Amortization and Impairment
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization and Impairment
 
Net Carrying Amount
Backlog
 
1,510

 
(1,510
)
 

 

 

 

Customer relationships
 
24,437

 
(4,437
)
 
20,000

 
4,497

 
(2,618
)
 
1,879

Product technology
 
45,234

 
(35,404
)
 
9,830

 
36,964

 
(34,132
)
 
2,832

Non-compete
 
510

 
(21
)
 
489

 

 

 

Trade name and trademark
 
2,355

 
(318
)
 
2,037

 
375

 
(23
)
 
352

Total finite-lived intangible assets, net
 
74,046

 
(41,690
)
 
32,356

 
41,836

 
(36,773
)
 
5,063


The finite-lived intangibles are being amortized over periods of one month to ten years using either a straight line method or the consumption period based on expected cash flows from the underlying intangible asset. Finite-lived intangible amortization expense from continuing operations was $4.9 million, $0.9 million and $0.5 million in fiscal years 2014, 2013 and 2012. The following is the expected future amortization by fiscal year:
(in thousands)
2015
 
2016
 
2017
 
2018
 
2019
 
thereafter
Intangible amortization expense
$
6,840

 
$
6,123

 
$
5,179

 
$
3,742

 
$
3,513

 
$
6,959