Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets, net

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Goodwill and Intangible Assets, net
12 Months Ended
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, net
Goodwill and Intangible Assets, net
The goodwill and intangible assets were acquired as part of the acquisition of MEC and CEE acquisitions referred to in Note 1, Organization.
The Company performs its annual impairment test of goodwill on October 1 of each fiscal year or whenever events or circumstances change or occur that would indicate that goodwill might be impaired. The Company has determined that it has one reporting unit.
As of October 1, 2017, the Company performed step one of the impairment test. As of October 1, 2017, the Company concluded that the fair value of the Company exceeded its carrying value.
The Company also performed the step one test for potential impairment as of December 31, 2017. As of December 31, 2017, total stockholders’ equity exceeded the Company’s market capitalization. The estimated fair value of the Company was estimated using a combination of the market capitalization, a market approach and an income approach, giving 50% weighting to the market capitalization and 25% weighting to each other method. Under the market approach, the Company utilizes publicly traded comparable company information to determine revenue multiples that are used to value the Company. Under the income approach, the Company determines fair value based on estimated future cash flows of the Company discounted by an estimated weighted average cost of capital, reflecting the overall level of inherent risk of the Company and the rate of return a market participant would expect to earn. The forecast and related assumptions were derived from the most recent annual financial forecast for which the planning process commenced in the fourth quarter of 2017. Based on the fair value analysis as of December 31, 2017, the Company had an estimated fair value which exceeded its carrying value by approximately 4%. Therefore, no impairment of goodwill has been recorded for the year ended December 31, 2017.
Intangible assets, net as of December 31, 2017 consist of the following (in thousands, except weighted average remaining life):
 
 
Cost
 
Accumulated
amortization
 
Carrying
value
 
Weighted
average
remaining life
(in years)
Customer relationships
 
$
14,660

 
$
(6,017
)
 
$
8,643

 
5.5
Developed technology
 
6,820

 
(3,963
)
 
2,857

 
2.2
Trade names
 
6,990

 
(4,196
)
 
2,794

 
4.0
Total
 
$
28,470

 
$
(14,176
)
 
$
14,294

 
 
Intangible assets, net as of December 31, 2016 consist of the following (in thousands, except weighted average remaining life):
 
 
Cost
 
Accumulated
amortization
 
Carrying
value
 
Weighted
average
remaining life
(in years)
Customer relationships
 
$
14,660

 
$
(4,317
)
 
$
10,343

 
6.4
Developed technology
 
6,820

 
(2,600
)
 
4,220

 
3.1
Trade names
 
6,990

 
(3,054
)
 
3,936

 
4.6
Total
 
$
28,470

 
$
(9,971
)
 
$
18,499

 
 

The Company recorded amortization of intangible assets expense of $4.2 million, $4.2 million and $3.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. As of December 31, 2017, expected amortization of intangible assets for each of the five succeeding fiscal years and thereafter is as follows (in thousands):
2018
$
4,205

2019
3,335

2020
2,143

2021
1,750

2022
1,743

Thereafter
1,118

Total
$
14,294