Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets

v3.3.1.900
Goodwill and Intangible Assets
6 Months Ended
Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
GOODWILL AND INTANGIBLE ASSETS
On July 1, 2005, all of the outstanding common stock of A-Mark was acquired by Spectrum PMI, Inc. Spectrum PMI was a holding company whose outstanding common stock was owned 80% by SGI, and 20% by Auctentia, S.L. In September 2012, SGI purchased from Auctentia its 20% interest in Spectrum PMI. On September 30, 2013, Spectrum PMI was merged with and into SGI, as a result of which all of the outstanding shares of A‑Mark were then owned directly by SGI.
In connection with the acquisition of A-Mark by Spectrum PMI on July 1, 2005, the accounts of the Company were adjusted using the push down basis of accounting to recognize the allocation of the consideration paid to the respective net assets acquired. In accordance with the push down basis of accounting, the Company's net assets were adjusted to their fair values as of the date of the acquisition based upon an independent appraisal, which resulted in goodwill of $4.9 million and identifiable purchased intangible assets of $8.4 million. Goodwill represents the excess of the purchase price and related costs over the value assigned to intangible assets of businesses acquired and accounted for under the purchase method.
The carrying value of other purchased intangibles as of December 31, 2015 and June 30, 2015 is as described below:
dollar amounts in thousands
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
June 30, 2015

Estimated Useful Lives (Years)
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Book Value
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Book Value
Existing customer relationships
5 - 15
 
5,747

 
(4,023
)
 
1,724

 
5,747

 
(3,832
)
 
1,915

Non-compete and other
4
 
2,000

 
(2,000
)
 

 
2,000

 
(2,000
)
 

Employment agreement
3
 
195

 
(195
)
 

 
195

 
(195
)
 

Purchased intangibles subject to amortization
 
 
7,942

 
(6,218
)
 
1,724

 
7,942

 
(6,027
)
 
1,915

Trade-name
Indefinite
 
$
454

 
$

 
$
454

 
$
454

 
$

 
$
454

 
 
 
$
8,396

 
$
(6,218
)
 
$
2,178

 
$
8,396

 
$
(6,027
)
 
$
2,369


The Company's other purchased intangible assets are subject to amortization except for trade-names, which have an indefinite life. Intangible assets subject to amortization are amortized using the straight-line method over their useful lives, which are estimated to be three to fifteen years. Amortization expense related to the Company's intangible assets for the three months ended December 31, 2015 and 2014 was $95,000 and $96,000, respectively. Amortization expense related to the Company's intangible assets for the six months ended December 31, 2015 and 2014 was $191,000 and $192,000, respectively.
Estimated amortization expense on an annual basis for the succeeding five years is as follows (in thousands):
Fiscal year ending June 30,
 
Amount
Fiscal 2016 (6 months remaining)
 
$
194

2017
 
385

2018
 
385

2019
 
385

2020
 
375

Thereafter
 

Total
 
$
1,724