Goodwill And Other Intangible Assets

12 Months Ended

Dec. 28, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

We had intangible assets with a net book value of $64.9 million, and $78.2 million as of December 28, 2014 and December 29, 2013, respectively.

The following table reflects the components of intangible assets as of December 28, 2014 and December 29, 2013:



		December 28, 2014				December 29, 2013
(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	$	79,110	$	58,873	$	83,063	$	56,798
Trade names	1 to 30	27,172		18,031		30,256		19,346
Patents, license agreements	3 to 14	58,060		52,448		61,820		54,225
Internal-use software	3 to 7	24,034		14,758		24,039		12,358
Other	2 to 6	7,029		6,867		7,132		6,793
Total amortized finite-lived intangible assets		195,405		150,977		206,310		149,520

Indefinite-lived intangible assets:
Trade names		20,512		—		21,376		—
Total identifiable intangible assets		$	215,917	$	150,977	$	227,686	$	149,520

We recorded $12.0 million, $11.8 million, and $14.3 million of amortization expense for 2014, 2013, and 2012, respectively.

In December 2014, as a result of our annual impairment test of our indefinite-lived trade names, we recorded a $0.9 million impairment charge to the value of the OAT trade name. The impairment charge was recorded in asset impairment expense in the Merchandise Availability Solutions segment on the Consolidated Statement of Operations. The impairment is due to minimal anticipated growth in our legacy OAT Asset Tracking business, as our Merchandising Visibility focus shifts towards end-to-end retail inventory visibility solutions.

In the fourth quarter of 2013, through the budgeting process, working capital prioritization activities, and other strategic direction reviews, it was determined that our European ERP system implementation was no longer a strategic priority for 2014 through 2016. Therefore, during the fourth quarter of 2013, we recorded an impairment of $4.7 million recorded in internal-use software related to this portion of the ERP system implementation. The impairment charge was recorded in asset impairment expense on the Consolidated Statement of Operations. We plan to implement our South China ALS ERP system by the end of 2016.

In December 2013, as a result of our annual impairment test of our indefinite-lived trade names, we recorded a $0.1 million impairment charge to the remaining value of the SIDEP trade name. The impairment charges were recorded in asset impairment expense in the Merchandise Availability 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)
2015	$	11,350
2016	$	11,015
2017	$	10,604
2018	$	9,530
2019	$	3,665

Historically, we have reported our results of operations in three segments: Shrink Management Solutions (SMS), Apparel Labeling Solutions (ALS), and Retail Merchandising Solutions (RMS). During the third quarter of 2013, we adjusted the product allocation between our SMS and ALS segments, renamed the SMS segment Merchandise Availability Solutions (MAS) and began reporting our segments as: Merchandise Availability Solutions, Apparel Labeling Solutions, and Retail Merchandising Solutions.

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



(amounts in thousands)	Merchandise Availability Solutions			Apparel Labeling Solutions		Retail Merchandising Solutions			Total
Balance as of December 30, 2012	$	159,031		$	—	$	23,710		$	182,741
Segment reallocation	(2,116		)	2,116		—			—
Translation adjustments	2,242			—		881			3,123
Balance as of December 29, 2013	$	159,157		$	2,116	$	24,591		$	185,864
Translation adjustments	(9,511		)	—		(2,784		)	(12,295		)
Balance as of December 28, 2014	$	149,646		$	2,116	$	21,807		$	173,569

The following table reflects the components of goodwill as of December 28, 2014 and December 29, 2013:



	December 28, 2014						December 29, 2013
(amounts in thousands)	Gross Amount		Accumulated Impairment Losses		Goodwill, Net		Gross Amount		Accumulated Impairment Losses		Goodwill, net
Merchandise Availability Solutions	$	192,303	$	42,657	$	149,646	$	207,589	$	48,432	$	159,157
Apparel Labeling Solutions	84,407		82,291		2,116		86,764		84,648		2,116
Retail Merchandising Solutions	124,127		102,320		21,807		138,098		113,507		24,591
Total goodwill	$	400,837	$	227,268	$	173,569	$	432,451	$	246,587	$	185,864

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 2014 and 2013 annual assessments did not result in an impairment charge.

As of the date of our fiscal 2014 annual impairment test, the total estimated fair values for the reporting units in all of our segments substantially exceeded their total carrying values. 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. While there is an overall significant percentage excess in comparing the discounted cash flow value to the overall book value of each reporting unit, the amount by which the Retail Merchandising Solutions Europe and International Americas reporting unit fair value exceeds its carrying value is approximately $7 million. 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 Merchandise Availability Solutions, Apparel Labeling Solutions, and Retail Merchandising Solutions segments could trigger future impairment in those segments.

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.

- 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.

+ References+ Details