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

9 Months Ended

Oct. 31, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

6. Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill for the nine months ended October 31, 2013 were as follows:


	Goodwill
	(Amounts in thousands)
Balance at January 31, 2013	$	45,103
Cumulative translation adjustment		340

Balance at October 31, 2013	$	45,443

The Company accounts for goodwill and other indefinite-lived intangible assets in accordance with the authoritative guidance, which requires that goodwill and other indefinite-lived intangible assets are not amortized, but are subject to an annual impairment test, which we perform annually as of August 1^st. There was no impairment of goodwill or other indefinite-lived intangible assets as a result of the annual impairment test analysis completed during the third quarter of fiscal 2014. For further information on our annual impairment test of goodwill and other indefinite-lived intangible assets for fiscal 2014, see “Critical Accounting Policies and Significant Judgment and Estimates – Goodwill and Other Indefinite-Lived Intangible Assets,” in Part I, Item 2 of this Form 10-Q.

We are also required to perform impairment tests on goodwill and other indefinite-lived intangible assets if an indicator of impairment, or triggering event, occurs. We concluded that there were no triggering events during the three and nine months ended October 31, 2013.

Intangible Assets

Intangible assets consist of the following:


	Weighted average remaining	As of October 31, 2013							As of January 31, 2013
	life (Years)	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
		(Amounts in thousands)
Finite-lived intangible assets:
Customer contracts	6.1	$	32,749	$	(21,611	)	$	11,138	$	32,568	$	(18,756	)	$	13,812
Non-compete agreements	0.3		2,796		(2,621	)		175		2,769		(2,375	)		394
Completed technology	5.1		11,543		(8,938	)		2,605		11,448		(8,437	)		3,011
Trademarks and other	0.1		1,131		(1,114	)		17		1,726		(1,629	)		97

Total finite-lived intangible assets		$	48,219	$	(34,284	)	$	13,935	$	48,511	$	(31,197	)	$	17,314

Indefinite-lived intangible assets:
Trade names	Indefinite	$	200	$	—		$	200	$	200	$	—		$	200

Total indefinite-lived intangible assets			200		—			200		200		—			200

Total intangible assets		$	48,419	$	(34,284	)	$	14,135	$	48,711	$	(31,197	)	$	17,514

As of October 31, 2013, the estimated future amortization expense for our finite-lived intangible assets for the remainder of fiscal year 2014, the four succeeding fiscal years and thereafter is as follows (amounts in thousands):


Fiscal Year Ended January 31,
2014 (for the remaining three months)	$	1,243
2015		4,222
2016		3,441
2017		2,379
2018		1,713
2019 and thereafter		937

Total	$	13,935

- 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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