Goodwill and Other Intangible Assets

12 Months Ended

Jun. 30, 2014

(4)

Goodwill and Other Intangible Assets

Goodwill

At June 30, 2014, the Company had goodwill of $169.2 million recorded as a result of the acquisition of Crescendo Bioscience, Inc. (“Crescendo”) on February 28, 2014 (see Note 12) and Rules-Based Medicine, Inc. (“Myriad RBM”) on May 31, 2011. The Company assessed goodwill for impairment in accordance with the appropriate guidance (see Note 1(g)) and recorded no impairment of goodwill for the period ended June 30, 2014. The following summarizes changes to the goodwill balance for the years ended June 30, 2014 and 2013:


	Year Ended June 30,
(In thousands)	2014		2013
Balance at beginning of period	$	56,850	$	56,850
Current period acquisitions		112,331		—

Balance at end of period	$	169,181	$	56,850

Intangible Assets

Intangible assets primarily consist of amortizable assets of purchased licenses and technologies, developed technology, a laboratory database, trademarks, and customer relationships as well as non-amortizable intangible assets of in-process technologies, research and development. Certain of these intangible assets were recorded as part of the Company’s purchase of Crescendo on February 28, 2014 (see Note 12) and Myriad RBM on May 31, 2011. The Company’s developed technology and database acquired in conjunction with the purchase of Crescendo have estimated remaining useful lives of 18 years. Trademarks acquired in conjunction with the purchase of Myriad RBM have an estimated remaining useful life of approximately 14 years and customer relationships have an estimated remaining useful life of approximately 7 years. The estimated useful life of acquired in-process research and development was also evaluated in conjunction with the annual impairment analysis of intangible assets and the classification of the acquired in-process research and development as an indefinite lived asset was deemed appropriate as the related research and development was not yet complete nor had it been abandoned.

In December 2012, the Company notified the licensor of the Company’s OnDose product of the Company’s intent to terminate the license agreement, and as a result, recorded an impairment charge of approximately $1.5 million associated with the purchased license agreement. The fair value was estimated for the license agreement using the undiscounted future cash flows method, under which the Company determined that the fair value was less than the carrying value. The impairment is included in research and development in the condensed consolidated statement of comprehensive income and is part of the molecular diagnostic segment. The following summarizes the amounts reported as intangible assets:


(In thousands)	Gross Carrying Amount		Accumulated Amortization			Net
at June 30, 2014
Purchased licenses and technologies	$	201,100	$	(6,597	)	$	194,503
Customer relationships		4,650		(1,441	)		3,209
Trademarks		3,000		(200	)		2,800

Total amortized intangible assets		208,750		(8,238	)		200,512

In-process research and development		4,800		—			4,800

Total unamortized intangible assets		4,800		—			4,800

Total intangible assets	$	213,550	$	(8,238	)	$	205,312


(In thousands)	Gross Carrying Amount		Accumulated Amortization			Net
at June 30, 2013
Purchased licenses and technologies	$	4,500	$	(2,644	)	$	1,856
Customer relationships		4,650		(976	)		3,674
Trademarks		3,000		—			3,000

Total amortized intangible assets		12,150		(3,620	)		8,530

In-process research and development		4,800		—			4,800

Total unamortized intangible assets		4,800		—			4,800

Total intangible assets	$	16,950	$	(3,620	)	$	13,330

As of June 30, 2014 the weighted average remaining amortization period for purchased licenses and technologies, trademarks, and customer relationships is approximately 17 years.

The Company recorded amortization during the respective periods for these intangible assets as follows:


	Years Ended June 30,
(In thousands)	2014		2013		2012
Amortization on intangible assets	$	4,633	$	895	$	1,100

Future estimated amortization expense as of June 30, 2014 for the five succeeding fiscal years is as follows:


(In thousands)
Fiscal year ending:
2015	$	11,900
2016		11,900
2017		11,900
2018		11,881
2019		11,587

	$	59,168

- 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.

+ References+ Details