Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The Company's management performs its goodwill and other indefinite-lived intangible impairment tests annually or when changes in circumstances indicate an impairment event may have occurred by estimating the fair value of each reporting segment compared to its carrying value. The Company is aggregated into five operating segments presented herein (Note 14) based on similar economic characteristics, nature of products and services, nature of production processes, type of customers and distribution methods. Our five operating segments consist of: 1) Gourmet Food Products, 2) Home Décor, 3) Nutritionals and Wellness, 4) Publishing and Printing and 5) Other.

We use a discounted cash flow model and a market approach to calculate the fair value of our operating segments. The models include a number of significant assumptions and estimates regarding future cash flows and these estimates could be materially impacted by adverse changes in market conditions. Goodwill is measured for impairment by comparing the fair value of the reporting unit to its carrying value, including goodwill. If the fair value of the reporting unit is less than the carrying value, a second step is performed to determine the implied fair value of goodwill. If the implied fair value of goodwill is lower than its carrying value, an impairment charge equal to the difference is recorded.

A significant decline in TBT revenue, the only subsidiary included in the 'Other' operating segment, indicated that the carrying amount of this reporting unit may be impaired. The Company tested goodwill for impairment and determined that TBT's goodwill was impaired at June 30, 2015. Impairment charges totaled $192,000 for the three and six month ending June 30, 2015, respectfully. Goodwill for TBT at June 30, 2015 was approximately $190,000, net of accumulated impairment. Accumulated impairment of goodwill since the acquisition in October 2013 is approximately $375,000.

Indefinite-lived assets are measured for impairment by comparing the fair value of the indefinite-lived intangible asset to its carrying value. If the fair value of the indefinite-lived intangible asset is lower than its carrying value, an impairment charge equal to the difference is recorded. We determined that no impairment of indefinite-lived intangible assets should be made in the period.

The following table provides the components of and changes in the carrying amount of Goodwill (in thousands):



	Acquired Goodwill		Accumulated Impairment			Other			Net Carrying Amount
Balance December 31, 2014	$	7,073	$	(2,978	)	$	—		$	4,095
Additions^(a)	1,342		—			3			1,345
Impairment^(b)	—		(192		)	—			(192		)
Other^(c)	—		—			(6		)	(6		)
Balance June 30, 2015	$	8,415	$	(3,170	)	$	(3	)	$	5,242
^(a) Related to our acquisition of Kleeneze (see note 3. Acquisitions, Dispositions and Other Transactions)
^(b) Related to the impairment of Tomboy Tools
^(c) Primarily reflects the impact of foreign exchange

Identifiable Intangible Assets

The following table provides the components of Identifiable intangible assets (in thousands, except amortization period):



	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount as of June 30, 2015		Weighted Average Amortization period (in years)
Indefinite-lived intangible assets:
Trade name and trademarks	$	3,400	$	—		$	3,400	—
Finite-lived intangible assets:
Trade name and trademarks	2,179		(2,175		)	4		0
Other intellectual property	363		(54		)	309		9
	$	5,942	$	(2,229	)	$	3,713	9



	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount as of December 31, 2014		Weighted Average Amortization period (in years)
Indefinite-lived intangible assets:
Trade name and trademarks	$	—	$	—		$	—	—
Finite-lived intangible assets:
Trade name and trademarks	5,579		(2,348		)	3,231		19
Other intellectual property	363		(36		)	327		9
	$	5,942	$	(2,384	)	$	3,558	17

Amortization

Amortization expense related to acquired intangible assets that contribute to our trade names, trademarks and other intellectual property is included in amortization of intangible assets. Amortization expense related to intangible assets is included in depreciation and amortization in the operating expenses. Total amortization expense for intangible assets were $9,000 for the second quarter of 2015 and $51,000 for the second quarter of 2014, and $(152,000) for the first six months of 2015 and $103,000 for the first six months of 2014.

The $(152,000) amortization expenses recorded for the six months ended June 30, 2015, includes a $170,000 amortization credit resulting from amortizing an indefinite-lived asset. The Company corrected this error as a restatement adjustment in the March 31, 2015 Form 10-Q/A. The pro-forma amortization expense for six months ended June 30, 2015 was $18,000, when adjusting for the amortization credit.

As of June 30, 2015, the estimated future amortization expense associated with our intangible assets for each of the five succeeding fiscal years ending December 31 is as follows (in thousands):



	Amortization of Intangible Assets
2015 (remaining six months)	$	18
2016	36
2017	36
2018	36
2019	36
Thereafter	151
Total	$	313

Impairment

- 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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