GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Jan. 02, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

4. GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the fiscal year ended January 2, 2016 are as follows (in thousands):

	North
	America		EMEA		Total
Balance as of January 3, 2015	$	3,947	$	4,068	$	8,015
Acquisition		–		3,434		3,434
Changes in foreign currency exchange rates		–		(378)		(378)

Balance as of January 2, 2016	$	3,947	$	7,124	$	11,071

The increase in goodwill resulted from the July 2015 acquisition of the Farncombe Entities. The goodwill and intangible assets related to this acquisition are not deductible for foreign tax purposes. This acquisition is discussed further in Note 2, Acquisition.

The Company evaluates goodwill for impairment on an annual basis on the last day of the first fiscal month of the fourth quarter and whenever events or circumstances indicate that these assets may be impaired. The Company performs its impairment testing for goodwill in accordance with FASB ASC 350, “Intangibles-Goodwill and Other.” As of the date of its most recent annual test as of October 31, 2015 management determined that no impairment of goodwill exists.

The following table summarizes the changes in the major classes of intangible assets for the fiscal year ended January 2, 2016. No intangible assets were recorded as of January 3, 2015.

			Non-Compete		Customer
Gross Carrying Amount:	Tradename		Agreements		Relationships		Total
Balance as of January 3, 2015	$	–	$	–	$	–	$	–
Acquisition		90		60		1,110		1,260
Changes in foreign currency exchange rates		(4)		(3)		(55)		(62)

Balance as of January 2, 2016	$	86	$	57	$	1,055	$	1,198

Accumulated Amortization:
Balance as of January 3, 2015	$	–	$	–	$	–	$	–
Changes in foreign currency exchange rates		2		1		3		6
Amortization expense		(73)		(6)		(129)		(208)

Balance as of January 2, 2016	$	(71)	$	(5)	$	(126)	$	(202)

The identifiable intangible assets in the table above resulted from the July 2015 acquisition of the Farncombe Entities and their balances include the effects of foreign currency translation. This acquisition is discussed further in Note 2, Acquisition. Tradename, non-compete agreements and customer relationships carry amortization periods of six months, four and one-half years and three and one-half years, respectively. The amortization periods are based on the period of expected cash flows used to measure the fair value of the intangible assets.

Aggregate amortization expense related to intangible assets was $208,000 for fiscal year 2015. The following table outlines the estimated future amortization expense related to amortizing intangible assets as of January 2, 2016.

	(in thousands)
2016	$	329
2017		314
2018		314
2019		38
2020		1
	$	996

- 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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