SeaChange International, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

3 Months Ended

Apr. 30, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

5.	Goodwill and Intangible Assets

Goodwill

Goodwill represents the difference between the purchase price and the estimated fair value of identifiable assets acquired and liabilities assumed. We are required to perform impairment tests related to our goodwill annually, which we perform during the third quarter of each fiscal year, or when we identify certain triggering events or circumstances that would more likely than not reduce the estimated fair value of the goodwill of the Company below its carrying amount. At April 30, 2018 and January 31, 2018, we had goodwill of $25.2 million and $25.6 million, respectively. The following table represents the changes in the carrying amount of goodwill for the three months ended April 30, 2018 (amounts in thousands):

Balance as of January 31, 2017:
Goodwill, gross	$	62,566
Accumulated impairment losses		(39,279	)
Goodwill, net		23,287
Cumulative translation adjustment		2,292
Balance as of January 31, 2018:
Goodwill, gross		64,858
Accumulated impairment losses		(39,279	)
Goodwill, net		25,579
Cumulative translation adjustment		(414	)
Balance as of April 30, 2018:
Goodwill, gross		64,444
Accumulated impairment losses		(39,279	)
Goodwill, net	$	25,165

There were no indicators of impairment during the first quarter of fiscal 2018. Therefore, no impairment test was required.

Intangible Assets

Intangible assets, net, consisted of the following at April 30, 2018 and January 31, 2018:

			As of April 30, 2018							As of January 31, 2018
	Weighted average remaining life (Years)		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
	(Amounts in thousands)
Finite-life intangible assets:
Customer contracts		1.7	$	30,489	$	(29,698	)	$	791	$	30,818	$	(29,836	)	$	982
Non-compete agreements		0.3		2,594		(2,591	)		3		2,639		(2,635	)		4
Completed technology		1.8		11,308		(11,096	)		212		11,479		(11,203	)		276
Trademarks, patents and other		2.3		7,177		(7,142	)		35		7,189		(7,148	)		41
Total finite-life intangible assets		1.8	$	51,568	$	(50,527	)	$	1,041	$	52,125	$	(50,822	)	$	1,303

Amortization expense for intangible assets was $0.4 million and $0.6 million for the three months ended April 30, 2018 and 2017, respectively.

As of April 30, 2018, the estimated future amortization expense for our finite-life intangible assets is as follows (amounts in thousands):

	Estimated
	Amortization
Fiscal Year Ended January 31,	Expense
2019 (for the remaining nine months)	$	700
2020		337
2021		4
2022		—
2023		—
2024 and thereafter		—
Total	$	1,041

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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