Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets

v2.4.0.6
Intangible Assets
3 Months Ended
Jun. 30, 2012
Intangible Assets  
Intangible Assets

7.  Intangible Assets

 

Intangible assets consisted of the following (in thousands):

 

 

 

June 30, 2012

 

 

 

Weighted
Average
Amortization
Period

 

Intangible
Assets,
Gross

 

Accumulated
Amortization

 

Intangible
Assets, Net

 

Manufacturing license

 

17 years

 

$

3,700

 

$

3,450

 

$

250

 

Technology

 

10 years

 

2,240

 

541

 

1,699

 

Parts and service customer relationships

 

5 years

 

1,080

 

522

 

558

 

TA100 customer relationships

 

2 years

 

617

 

617

 

 

Backlog

 

Various

 

490

 

317

 

173

 

Trade name

 

1.2 years

 

69

 

69

 

 

Total

 

 

 

$

8,196

 

$

5,516

 

$

2,680

 

 

The Company recorded amortization expense of $0.1 million and $0.2 million for the first quarter of Fiscal 2013 and Fiscal 2012, respectively. Intangible assets consisted of the following (in thousands):

 

 

 

March 31, 2012

 

 

 

Weighted
Average
Amortization
Period

 

Intangible
Assets,
Gross

 

Accumulated
Amortization

 

Intangible
Assets, Net

 

Manufacturing license

 

17 years

 

$

3,700

 

$

3,437

 

$

263

 

Technology

 

10 years

 

2,240

 

485

 

1,755

 

Parts and service customer relationships

 

5 years

 

1,080

 

468

 

612

 

TA100 customer relationships

 

2 years

 

617

 

617

 

 

Backlog

 

Various

 

490

 

309

 

181

 

Trade name

 

1.2 years

 

69

 

69

 

 

Total

 

 

 

$

8,196

 

$

5,385

 

$

2,811

 

 

Expected future amortization expense of intangible assets as of June 30, 2012 is as follows:

 

 

 

Amortization
Expense

 

 

 

(In thousands)

 

2013 (remainder of fiscal year)

 

$

539

 

2014

 

489

 

2015

 

453

 

2016

 

273

 

2017

 

273

 

Thereafter

 

653

 

Total expected future amortization

 

$

2,680

 

 

The manufacturing license provides the Company with the ability to manufacture recuperator cores previously purchased from Solar Turbines Incorporated (“Solar”). The Company is required to pay a per-unit royalty fee over a seventeen-year period for cores manufactured and sold by the Company using the technology. Royalties of approximately $16,000 and $18,600 were earned by Solar for the first quarter of Fiscal 2013 and 2012, respectively. Earned royalties of approximately $16,000 and $17,500 were unpaid as of June 30, 2012 and March 31, 2012, respectively, and are included in accounts payable and accrued expenses in the accompanying balance sheets.

 

On February 1, 2010, the Company acquired the 100 kW (“TA100”) microturbine product line from Calnetix Power Solutions, Inc. (“CPS”) to expand the Company’s microturbine product line and to gain relationships with distributors to supply the Company’s products. The acquired intangible assets include technology, parts and service customer relationships, TA100 customer relationships, backlog and trade name. These intangible assets have estimated useful lives between one and ten years. The fair value assigned to identifiable intangible assets acquired has been determined primarily by using the income approach. Purchased identifiable intangible assets, except for backlog, are amortized on a straight-line basis over their respective useful lives and classified as a component of cost of goods sold or selling, general and administrative expenses based on the function of the underlying asset. Backlog is amortized on a per unit basis as the backlog units are sold and presented as a component of cost of goods sold.