Goodwill And Other Intangible Assets

12 Months Ended

Dec. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

We had intangible assets with a net book value of $75.0 million, and $84.6 million as of December 30, 2012 and December 25, 2011, respectively.

The following table reflects the components of intangible assets as of December 30, 2012 and December 25, 2011:



		December 30, 2012				December 25, 2011
(amounts in thousands)	Amortizable Life (years)	Gross Amount		Gross Accumulated Amortization		Gross Amount		Gross Accumulated Amortization
Finite-lived intangible assets:
Customer lists	6 to 20	$	81,895	$	50,215	$	81,348	$	43,945
Trade name	1 to 30	30,414		19,143		30,007		18,237
Patents, license agreements	3 to 14	60,682		50,826		60,249		47,704
Other	2 to 6	7,178		6,546		7,160		5,830
Total amortized finite-lived intangible assets		180,169		126,730		178,764		115,716

Indefinite-lived intangible assets:
Trade name		21,511		—		21,509		—
Total identifiable intangible assets		$	201,680	$	126,730	$	200,273	$	115,716

We recorded $11.3 million, $10.8 million, and $11.2 million of amortization expense for 2012, 2011, and 2010, respectively.

During the second quarter of 2012, we experienced deterioration in revenues, gross margins and operating results in each of our segments as compared to the forecasted amounts in the most recent impairment test. Due to the declines in operating results in our segments, a change in management, and a revised strategic focus, we determined that impairment triggering events had occurred and that an assessment of goodwill was warranted. As a result of interim impairment indicators in the second quarter of 2012, we performed a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the long-lived assets in our Apparel Labeling Solutions reporting unit to their carrying amounts. The undiscounted cash flow analysis resulted in no impairment charge in the quarter ended June 24, 2012. Also, as part of the annual impairment testing, the undiscounted cash flow analysis attributable to the long-lived assets in our European Retail Merchandising Solutions reporting unit resulted in no impairment charge in the quarter ended December 30, 2012. While we currently believe that our projected results will not result in future impairment, a continued deterioration in results could trigger a future impairment.

In December 2011, as a result of our annual impairment test of our indefinite-lived trade names, we recorded a $0.6 million impairment charge to the SIDEP trade name. The impairment charge was recorded in asset impairment expense in the Shrink Management Solutions segment on the Consolidated Statement of Operations.

Estimated amortization expense for each of the five succeeding years is anticipated to be:



(amounts in thousands)
2013	$	8,764
2014	$	8,276
2015	$	8,120
2016	$	7,857
2017	$	6,821

The changes in the carrying amount of goodwill are as follows:



(amounts in thousands)	Shrink Management Solutions			Apparel Labeling Solutions			Retail Merchandising Solutions			Total
Balance as of December 26, 2010	$	165,324		$	3,915		$	62,086		$	231,325
Acquired during the year	$	—		58,008			$	—		58,008
Discontinued operations	(3,782		)	$	—		$	—		(3,782		)
Translation adjustments	269			661			(378		)	552
Balance as of December 25, 2011	$	161,811		$	62,584		$	61,708		$	286,103
Purchase accounting adjustment	$	—		1,624			$	—		1,624
Discontinued operations	$	(3,263	)	$	—		$	—		(3,263		)
Impairment losses	$	—		(64,437		)	$	(38,278	)	(102,715		)
Translation adjustments	483			229			280			992
Balance as of December 30, 2012	$	159,031		$	—		$	23,710		$	182,741

The following table reflects the components of goodwill as of December 30, 2012 and December 25, 2011:



	December 30, 2012						December 25, 2011
(amounts in thousands)	Gross Amount		Accumulated Impairment Losses		Goodwill, Net		Gross Amount		Accumulated Impairment Losses		Goodwill, net
Shrink Management Solutions	$	208,835	$	49,804	$	159,031	$	213,836	$	52,025	$	161,811
Apparel Labeling Solutions	84,059		84,059		—		81,662		19,078		62,584
Retail Merchandising Solutions	133,707		109,997		23,710		130,640		68,932		61,708
Total goodwill	$	426,601	$	243,860	$	182,741	$	426,138	$	140,035	$	286,103

During fiscal 2011 and 2010 we completed acquisitions which impacted goodwill and intangible assets. Refer to Note 2 of the Consolidated Financial Statements for more information on these acquisitions, including any impact of purchase accounting adjustments.

We perform an assessment of goodwill by comparing each individual reporting unit’s carrying amount of net assets, including goodwill, to their fair value at least annually during the October month-end close and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The 2011 and 2010, annual assessments did not result in an impairment charge.

During the second quarter of 2012, we experienced deterioration in revenues, gross margins and operating results in each of our segments as compared to the forecasted amounts in the most recent annual impairment test. Due to the declines in operating results in our segments, a change in management, and a revised strategic focus, we determined that impairment triggering events had occurred and that an assessment of goodwill was warranted. This resulted in the Company's assessment that the carrying value of the Apparel Labeling Solutions reporting unit exceeded its fair value. The basis of the fair value was determined by projecting future cash flows using assumptions concerning future operating performance and economic conditions that may differ from actual cash flows. Estimated future cash flows are adjusted by an appropriate discount rate derived from our market capitalization plus a suitable control premium at the date of the evaluation. The financial and credit market volatility directly impacts our fair value measurement through our weighted average cost of capital that we use to determine our discount rate and through our stock price that we use to determine our market capitalization. As a result of our interim impairment test, a $64.4 million non-cash impairment charge was recorded as of June 24, 2012 in our Apparel Labeling Solutions segment. The goodwill impairment expense was due to the decline in estimated future Apparel Labeling Solutions cash flow impacted by our plan to refocus the business, coupled with recent declines in revenue and profitability. The impairment charge of the entire goodwill balance in our Apparel Labeling Solutions segment was recorded in goodwill impairment on the Consolidated Statement of Operations.

There were no additional impairment indicators during the third quarter ended September 23, 2012. Our 2012 annual impairment test resulted in our assessment that the carrying value of the European Retail Merchandising Solutions reporting unit exceeded its fair value. As a result of our annual impairment test, a $38.3 million non-cash goodwill impairment charge was assessed as of October 21, 2012, and recorded in goodwill impairment expense on the Consolidated Statement of Operations in the fourth quarter of 2012 in our Retail Merchandising Solutions segment. The goodwill impairment was due to the decline in estimated future European Retail Merchandising Solutions cash flows impacted by current economic conditions in Europe resulting in decreased customer investments in new stores and refurbishments. Additionally, increased competition and pricing pressures are factors that have negatively impacted this business.

Determining the fair value of a reporting unit is a matter of judgment and involves the use of significant estimates and assumptions. The use of different assumptions would increase or decrease estimated discounted future cash flows and could increase or decrease an impairment charge. If the use of these assets or the projections of future cash flows change in the future, we may be required to record additional impairment charges. An erosion of future business results in any of the business units could create impairment in goodwill or other long-lived assets and require a significant charge in future periods.

As of the date of our fiscal 2012 annual impairment test, the total fair values for the remaining reporting units in all of our segments exceeded their total carrying values by more than 45%. Based on our most recent goodwill impairment assessment of the reporting units of our segments and our understanding of currently projected trends of the business and the economy, we do not believe that there is a significant risk of impairment for these reporting units for a reasonable period of time. Although our analysis regarding the fair values of the goodwill and indefinite lived intangible assets indicates that they exceed their respective carrying values, materially different assumptions regarding the future performance of our businesses or significant declines in our stock price could result in additional goodwill impairment losses. Specifically, an unanticipated deterioration in revenues and gross margins generated by our Shrink Management Solutions and Retail Merchandising Solutions segments could trigger future impairment in those segments.

- 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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