Note I - Goodwill and Other Intangibles

9 Months Ended

Mar. 25, 2016

Goodwill and Intangible Assets Disclosure [Text Block]

I.	Goodwill and Other Intangibles

The Company tests goodwill for impairment annually and whenever events or circumstances make it more likely than not that an impairment may have occurred. The

Company monitors for potential interim triggering events on an ongoing basis. Such potential triggering events include unfavorable operating results and macroeconomic trends, and a market capitalization of the company below its book value.

The fair value of reporting units is primarily driven by projected growth rates and operating results under the income approach. If declining actual operating results or future operating results become indicative that the fair value of the Company’s reporting units has declined below their carrying values, an interim goodwill impairment test may need to be performed and may result in a non-cash goodwill impairment charge. The Company’s market capitalization can also be affected by changes in industry or market conditions, changes in results of operations and changes in forecasts or market expectations related to future results. If the Company’s market capitalization remains below the Company’s carrying value for a sustained period of time or if such a decline becomes indicative that the fair value of the Company’s reporting units has declined to below their carrying values, an interim goodwill impairment test may need to be performed and may result in a non-cash goodwill impairment charge. A non-cash goodwill impairment charge would have the effect of decreasing the Company’s earnings or increasing the Company’s losses in the period in which the impairment charge is taken.

The Company concluded that its lower market capitalization, as well as the downward trends noted in the Company’s operating results, during the first three quarters of fiscal 2016, was not indicative that the fair value of the Company’s reporting units had more likely than not declined to below their carrying values at March 25, 2016. The Company performs its required annual goodwill impairment test during the fourth quarter.

The changes in the carrying amount of goodwill, all of which is allocated to the manufacturing segment, for the three quarters ended March 25, 2016 were as follows:

	Gross Carrying Amount			Accumulated Impairment			Net Book Value

Balance at June 30, 2015	$	16,459		$	(3,670	)	$	12,789
Sale of business		(25	)		-			(25	)
Translation adjustment		(86	)		-			(86	)

Balance at March 25, 2016	$	16,348		$	(3,670	)	$	12,678

The gross carrying amount and accumulated amortization of the Company’s intangible assets that have definite useful lives and are subject to amortization as of March 25, 2016 and June 30, 2015 were as follows:

	March 25, 2016
	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment			Net Book Value

Licensing agreements	$	3,015	$	(2,550	)	$	-		$	465
Non-compete agreements		2,128		(2,045	)		(83	)		-
Trade name		1,645		(255	)		-			1,390
Other		6,543		(5,286	)		(1,194	)		63

	$	13,331	$	(10,136	)	$	(1,277	)	$	1,918

	June 30, 2015
	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment			Net Book Value

Licensing agreements	$	3,015	$	(2,505	)	$	-		$	510
Non-compete agreements		2,128		(2,045	)		(83	)		-
Trade name		1,653		(194	)		-			1,459
Other		6,476		(5,278	)		(1,194	)		4

	$	13,272	$	(10,022	)	$	(1,277	)	$	1,973

The weighted average remaining useful life of the intangible assets included in the table above is approximately 14 years.

Intangible amortization expense was $40 and $56 for the quarters ended March 25, 2016, and March 27, 2015, respectively. Intangible amortization expense was $114 and $177 for the three quarters ended March 25, 2016, and March 27, 2015, respectively. Estimated intangible amortization expense for the remainder of fiscal 2016 and each of the next

five fiscal years is as follows:

Fiscal Year
2016	$	41
2017		163
2018		163
2019		154
2020		141
2021		141

The gross carrying amount of the Company’s intangible assets that have indefinite lives and are not subject to amortization as of March 25, 2016 and June 30, 2015 was $201 and $213, respectively. These assets are comprised of acquired trade names.

- 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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