Goodwill And Other Intangible Assets

12 Months Ended

Dec. 27, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

We had intangible assets with a net book value of $47.8 million, and $64.9 million as of December 27, 2015 and December 28, 2014, respectively.

The following table reflects the components of intangible assets as of December 27, 2015 and December 28, 2014:



		December 27, 2015				December 28, 2014
(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	$	75,649	$	61,095	$	79,110	$	58,873
Trade names	1 to 30	24,598		16,937		27,172		18,031
Patents, license agreements	3 to 14	55,053		51,422		58,060		52,448
Internal-use software	3 to 7	24,489		17,348		24,034		14,758
Other	2 to 6	6,968		6,896		7,029		6,867
Total amortized finite-lived intangible assets		186,757		153,698		195,405		150,977

Indefinite-lived intangible assets:
Trade names		14,718		—		20,512		—
Total identifiable intangible assets		$	201,475	$	153,698	$	215,917	$	150,977

We recorded $10.9 million, $12.0 million, and $11.8 million of amortization expense for 2015, 2014, and 2013, respectively.

In December 2015, as a result of our annual impairment test of our indefinite-lived trade names, we recorded a $5.8 million impairment charge to the value of the Alpha trade name. The impairment charge was recorded in the Merchandise Availability Solutions segment and in asset impairment expense on the Consolidated Statement of Operations. The impairment is due to minimal anticipated growth in our Alpha business due to lower than expected growth in our customer base and increasing competitive pressures.

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.

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 MAS segment on the Consolidated Statement of Operations.

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



(amounts in thousands)
2016	$	10,507
2017	$	9,416
2018	$	3,517
2019	$	2,498
2020	$	1,730

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 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
Translation adjustments	(7,233		)	—		(2,226		)	(9,459		)
Balance as of December 27, 2015	$	142,413		$	2,116	$	19,581		$	164,110

The following table reflects the components of goodwill as of December 27, 2015 and December 28, 2014:



	December 27, 2015						December 28, 2014
(amounts in thousands)	Gross Amount		Accumulated Impairment Losses		Goodwill, Net		Gross Amount		Accumulated Impairment Losses		Goodwill, net
Merchandise Availability Solutions	$	175,602	$	33,189	$	142,413	$	192,303	$	42,657	$	149,646
Apparel Labeling Solutions	82,747		80,631		2,116		84,407		82,291		2,116
Retail Merchandising Solutions	110,977		91,396		19,581		124,127		102,320		21,807
Total goodwill	$	369,326	$	205,216	$	164,110	$	400,837	$	227,268	$	173,569

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 2015, 2014, and 2013 annual assessments did not result in an impairment charge.

As of the date of our fiscal 2015 annual impairment test, the estimated fair values for each of the reporting units in our segments exceeded their carrying values. The fair values in each of our regional reporting units in our MAS segment, as well as our RMS Asia-Pacific reporting unit, substantially exceeded their respective carrying values. However, the fair values of our RMS Europe and International Americas reporting unit (RMS Europe) and ALS reporting unit exceeded their respective carrying values by a smaller margin. The goodwill associated with these reporting units are $19.5 million and $2.1 million, respectively. The discount rates used in determining the fair value of the RMS Europe and ALS reporting units were 14.1% and 13.6%, respectively. Although our analysis regarding the fair values of the reporting units 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 goodwill impairment losses. Specifically, an unanticipated deterioration in revenues and gross margins generated by our MAS, ALS and RMS segments could trigger future impairment in those segments. The risk is greater for the RMS Europe reporting unit and ALS reporting unit in particular, because of the smaller amount of excess in comparing the discounted cash flow value to the overall carrying values of these reporting units.

- 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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