Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets

v3.10.0.1
Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
As a result of the acquisition of Genoptix in December of 2018, see Note E, we recorded $50.9 million in goodwill. The goodwill recorded for the year ended December 31, 2017 is primarily related to the acquisition of Clarient in 2015.

The following table summarizes the changes in goodwill for the years ended December 31, 2018 and 2017 (in thousands):

For the years ended December 31, 
2018  2017 
Balance, beginning of year  $ 147,019  $ 147,019 
Goodwill acquired during the year  50,873  — 
Balance, December 31, 2018  $ 197,892  $ 147,019 

As a result of the acquisition of Genoptix in December of 2018, see Note E, we recorded $71.8 million in intangible assets comprised of $56.6 million in customer relationships which are being amortized over fifteen years, $0.7 million for the Genoptix trade name which is being amortized over one year, and $14.6 million related to a trade mark with an indefinite life which will be tested annually for impairment.
In August 2017, the Company acquired a customer list from Ascend Genomics (“Ascend”) in exchange for 450,000 shares of restricted stock, see Note P.  We recorded $4.1 million in intangible assets comprised of customer relationships which are being amortized over fifteen years.  As part of this transaction, Ascend signed a non-compete agreement which was also recorded as an intangible asset and is being amortized over 2 years.  
As a result of the acquisition of Clarient in December 2015, we recorded $84.0 million in intangible assets comprised of $81.0 million in customer relationships amortized over a fifteen year period and $3.0 million in trade name which we amortized over a two year period.  
The following table summarizes the allocation of goodwill by segment for the years ended December 31, 2018 and 2017 (in thousands):
Clinical Services  Pharma Services  Clinical Services  Pharma Services 
2018  2018  Total 2018  2017  2017  Total 2017 
Goodwill  $ 178,825  $ 19,067  $ 197,892  $ 127,952  $ 19,067  $ 147,019 
Intangible assets as of December 31, 2018 and 2017 consisted of the following (in thousands): 
 
    December 31, 2018
 
Amortization
Period
Cost
Accumulated
Amortization
Net
Trade Names 12-24 months $ 3,675  $ 3,042  $ 633 
Non-Compete Agreement 24 months 27  18 
Customer Relationships 180 months 141,626  16,798  124,828 
Trade Mark - Indefinite lived —  14,559  —  14,559 
Total $ 159,887  $ 19,858  $ 140,029 
December 31, 2017
Amortization
Period
Cost
Accumulated
Amortization
Net
Trade Name 24 months $ 3,000  $ 3,000  $ — 
Non-Compete Agreement 36 months 26  22 
Customer Relationships 156-180 months 85,068  10,925  74,143 
Total $ 88,094  $ 13,929  $ 74,165 
The Company recorded amortization expense of intangible assets in the consolidated statements of operations as follows (in thousands):
  For the Years Ended December 31,
  2018 2017 2016
Amortization of intangible assets $ 5,928  $ 6,995  $ 7,272 
 
The Company records amortization expense as a general and administrative expense.
The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of December 31, 2018 is as follows (in thousands):
 
Years Ending December 31, As of December 31,
2019 $ 10,110 
2020 9,442 
2021 9,442 
2022 9,442 
2023 9,442 
Thereafter 77,592 
Total $ 125,470