SeaChange International, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

12 Months Ended

Jan. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

6. Goodwill and Intangible Assets

At January 31, 2016 and 2015, we had goodwill of $40.2 million and $41.0 million, respectively. The change in the carrying amount of goodwill for the years ended January 31, 2016 and 2015 is as follows (amounts in thousands):


	Goodwill
Balance at January 31, 2014	$	45,150
Cumulative translation adjustment		(4,142	)

Balance at January 31, 2015		41,008
Acquisition of Timeline Labs		15,787
Timeline Labs goodwill impairment		(15,787	)
Cumulative translation adjustment		(833	)

Balance at January 31, 2016	$	40,175

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 an indicator of impairment occurs. During the fourth quarter of fiscal 2016, due to the decision to enter into a restructuring plan relating to the Timeline Labs operations (that may include a winding down of the operations), we impaired $15.8 million of goodwill, which represented all of the goodwill that resulted from the acquisition, due to the short duration of time between our acquisition and the event causing us to impair. As a result of this decision, which we consider a triggering event, we were required to perform an analysis of our goodwill. The results of this analysis determined that there was no further impairment to our goodwill during the fourth quarter of fiscal 2016.

Intangible assets, net, consisted of the following at January 31, 2016 and 2015:


			January 31, 2016							January 31, 2015
	Weighted average remaining life (Years)		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
	(Amounts in thousands)
Finite-lived intangible assets:
Customer contracts		6.0	$	29,956	$	(26,284	)	$	3,672	$	30,397	$	(24,160	)	$	6,237
Non-compete agreements		—		2,365		(2,365	)		—		2,433		(2,433	)		—
Completed technology		5.5		10,075		(9,621	)		454		10,307		(9,230	)		1,077
Trade names, intellectual property and other		—		7,068		(7,068	)		—		7,082		(7,082	)		—

Total finite-lived intangible assets			$	49,464	$	(45,338	)	$	4,126	$	50,219	$	(42,905	)	$	7,314

Amortization expense for intangible assets was $4.8 million, $5.2 million and $4.6 million for fiscal 2016, 2015 and 2014, respectively.

The total amortization expense for each of the next five fiscal years is as follows (amounts in thousands):


For the Fiscal Years Ended January 31,	Estimated Amortization Expense
2017	$	2,107
2018		1,267
2019		631
2020		121
2021		—
2022 and thereafter		—

Total	$	4,126

Actual amortization may differ from estimated amounts in the table above due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions, potential impairment, accelerated amortization, or other events.

- 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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