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Table of Contents
During 2008, the Company recorded $10.7 million of goodwill related to the acquisition of CP Secure. The company also recorded $8.7
million of goodwill, approximately $650,000 in compensation expense, and an approximate $620,000 reduction in taxes payable associated with
a $10 million earn-out payment made in connection with the Company’s 2007 acquisition of Infrant. During 2007, the Company recorded $38.2
million of goodwill related to the acquisition of Infrant.
Intangibles, net, consist of the following:
Amortization expense related to intangibles in 2008, 2007 and 2006 was $4.7 million, $3.3 million, and $125,000, respectively.
In 2008 the Company recorded an impairment charge within cost of revenue in the Consolidated Statements of Operations of $458,000 for
the net carrying value of intangibles acquired during the Company’s 2006 acquisition of Skipjam Corp. Recoverability was assessed in
accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,”
based on undiscounted estimated future net
cash flows, and the impairment charge was based on fair value using discounted cash flows. No such impairment charges were recorded in prior
years.
Estimated amortization expense related to intangibles for each of the next five years and thereafter is as follows (in thousands):
69
December 31,
2007
Cost
December 31,
2007
Net
Additions
Amortization
Expense
Impairment
Charge
December 31,
2008
Net
Weighted
Average
Amortization
Period
(Years)
Core technology
$
6,200
$
4,979
$
900
$
1,488
$
458
$
3,933
1.37
Existing technology
10,800
9,000
1,200
2,700
—
7,500
3.57
Trademarks
2,600
2,311
—
433
—
1,878
2.17
Non
-
compete agreements
100
29
—
29
—
—
—
Total intangible assets
$
19,700
$
16,319
$
2,100
$
4,650
$
458
$
13,311
2.72
December 31,
2006
Cost
December 31,
2006
Net
Additions
Amortization
Expense
December 31,
2007
Net
Weighted
Average
Amortization
Period
(Years)
Core technology
$
1,000
$
896
$
5,200
$
1,117
$
4,979
1.62
Existing technology
—
—
10,800
1,800
9,000
1.67
Trademarks
—
—
2,600
289
2,311
2.67
Non
-
compete agreements
100
79
—
50
29
0.30
Total intangible assets
$
1,100
$
975
$
18,600
$
3,256
$
16,319
1.79
Year Ending December 31,
2009
$
5,013
2010
5,013
2011
2,347
2012
613
2013
325
Thereafter
—
Total expected amortization expense
$
13,311