Adaptec 2001 Annual Report Download - page 69

Download and view the complete annual report

Please find page 69 of the 2001 Adaptec annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 93

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93

69
this chip and has extended development of the Datum technology to a follow-on product. The
general economic slowdown has delayed the introduction of the third generation base stations
into which the Company expects to incorporate this technology, but the Company expects these
products to begin generating revenues in the second quarter of 2002.
Other Intangible Assets
A description of the other intangible assets acquired is set out below:
Internally developed software acquired facilitates the completion of in process research and
development projects and can be utilized in future development projects. The Company was
amortizing the value assigned to internally developed software acquired from Malleable on a
straight-line basis over an estimated useful life of three years. At the acquisition date, Datum
had no developed products.
The acquired assembled workforce was comprised of skilled employees across each of
Malleable and Datum's executive, research and development and general and administrative
groups. The Company was amortizing the value assigned to the assembled workforces on a
straight-line basis over their estimated useful life of three years.
Goodw ill, w hich represents the excess of the purchase price of an investment in an acquired
business over the fair value of the underlying net identifiable assets, was being amortized on a
straight-line basis over its estimated remaining useful life of five years.
In the second quarter of 2001, the Company discontinued development of the technology
acquired in the purchase of Malleable and recorded an impairment charge equal to the
remaining net book value of the related goodw ill, developed technology, and assembled
workforce. See Note 3 “ Restructuring and other costs” .
Due to a decline in current market conditions and a delay in introduction of products to the
market, the Company completed an assessment of the goodw ill and intangibles acquired in the
purchase of Datum and recorded a total impairment charge of $79.3 million, measured as the
amount by which the carrying value of the goodwill and intangibles exceeded the present value
of estimated future cash flow s related to these assets. See Note 3 “ Restructuring and other
costs” .
Pro Forma Information:
The following table presents the unaudited pro forma results of operations for informational
purposes, assuming that the Company had acquired Malleable and Datum at the beginning of
the 1999 fiscal year.