Note 8 - Goodwill and Other Intangible Assets

12 Months Ended

Nov. 30, 2019

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

8. Goodwill and Other Intangible Assets

Goodwill and other intangible assets consisted of the following:

	November 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net
Intangibles subject to amortization:
Customer relationships	$	3,550	$	(1,088	)	$	2,462
Technology - customized applications		834		(575	)		259
Total intangible assets subject to amortization	$	4,384	$	(1,663	)		2,721
Intangibles not subject to amortization:
Trade names							9,338
Goodwill							14,117
Total goodwill and other intangible assets						$	26,176

	November 24, 2018
	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net
Intangibles subject to amortization:
Customer relationships	$	3,550	$	(829	)	$	2,721
Technology - customized applications		834		(456	)		378
Total intangible assets subject to amortization	$	4,384	$	(1,285	)		3,099
Intangibles not subject to amortization:
Trade names							9,338
Goodwill							16,043
Total goodwill and other intangible assets						$	28,480

We performed our annual goodwill impairment test as of September 1, 2019. As a result of this test, we concluded that the carrying value of our retail reporting unit exceeded its fair value by an amount in excess of the goodwill previously allocated to the reporting unit. Therefore, we recognized a goodwill impairment charge of $1,926. The fair values of the other reporting units with material amounts of goodwill substantially exceeded their carrying values as of September 1, 2019.

The determination of the fair value of our reporting units is based on a combination of a market approach, that considers benchmark company market multiples, and an income approach, that utilizes discounted cash flows for each reporting unit and other Level 3 inputs as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosure (see Note 4). Under the income approach, we determine fair value based on the present value of the most recent cash flow projections for each reporting unit as of the date of the analysis and calculate a terminal value utilizing a terminal growth rate. The significant assumptions under this approach include, among others: income projections, which are dependent on future sales, new product introductions, customer behavior, competitor pricing, operating expenses, the discount rate, and the terminal growth rate. The cash flows used to determine fair value are dependent on a number of significant management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based upon our historical experience. Our estimates are subject to change given the inherent uncertainty in predicting future results. Additionally, the discount rate and the terminal growth rate are based on our judgment of the rates that would be utilized by a hypothetical market participant. As part of the goodwill impairment testing, we also consider our market capitalization in assessing the reasonableness of the combined fair values estimated for our reporting units.

Changes in the carrying amounts of goodwill by reportable segment were as follows:

	Wholesale		Retail			Logistics		Total
Balance as of November 25, 2017	$	5,045	$	1,926		$	4,929	$	11,900
Goodwill arising from Lane Venture acquisition (Note 3)		4,143		-			-		4,143
Balance as of November 24, 2018		9,188		1,926			4,929		16,043
Goodwill impairment		-		(1,926	)		-		(1,926	)
Balance as of November 30, 2019	$	9,188	$	-		$	4,929	$	14,117

Accumulated impairment losses at November 30, 2019 were $1,926. There were no accumulated impairment losses on goodwill as of November 24, 2018 or November 25, 2017.

The weighted average useful lives of our finite-lived intangible assets and remaining amortization periods as of November 30, 2019 are as follows:

	Useful Life in Years		Remaining Amortization Period in Years
Customer relationships		14		10
Technology - customized applications		7		2

Amortization expense associated with intangible assets during fiscal 2019, 2018 and 2017 was $379, $374 and $322, respectively and is included in selling, general and administrative expense in our consolidated statement of operations. All expense arising from the amortization of intangible assets is associated with our logistical services segment except for $57 and $51 in fiscal 2019 and 2018, respectively, associated with our wholesale segment arising from Lane Venture (Note 3). Estimated future amortization expense for intangible assets that exist at November 30, 2019 is as follows:

Fiscal 2020	$	379
Fiscal 2021		379
Fiscal 2022		279
Fiscal 2023		259
Fiscal 2024		259
Thereafter		1,166
Total	$	2,721