Acquired Intangible Assets and Goodwill

12 Months Ended

Dec. 29, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Note 5 — Acquired Intangible Assets and Goodwill

The carrying basis and accumulated amortization of recognized intangible assets are summarized in the following table:

	2012				2011
In Thousands	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Patents	$	23,306	$	15,487	$	22,369	$	13,372
Consulting agreements		976		976		976		976
Non-compete agreements		2,347		2,174		2,197		2,121
Customer list		1,989		1,820		1,801		1,710
Trademarks		4,880		122		5,022		122
	$	33,498	$	20,579	$	32,365	$	18,301

Amortization expense was $2.2 million, $1.6 million and $1.3 million for 2012, 2011 and 2010, respectively.

Estimated future amortization expense for each reporting segment is summarized in the following table:

In Thousands	2013		2014		2015		2016		2017		Thereafter
Sporting Goods	$	2,276	$	2,140	$	2,134	$	943	$	180	$	320
Information Security and Print Finishing		18		—		—		—		—		—
	$	2,294	$	2,140	$	2,134	$	943	$	180	$	320

All goodwill is allocated to the operating segments of the business. The changes in the carrying amount of goodwill were:

In Thousands	Sporting Goods		Information Security and Print Finishing			Total
Balance at December 25, 2010	$	12,017	$	13,380		$	25,397
Foreign currency translation adjustment		—		(112	)		(112	)
Balance at December 31, 2011		12,017		13,268			25,285
Impairment losses		—		(13,187	)		(13,187	)
Foreign currency translation adjustment		—		(81	)		(81	)
Balance at December 29, 2012	$	12,017	$	—		$	12,017

The Company reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The goodwill impairment test involves a two-step process. In the first step, the Company compares the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value, the Company must perform the second step of the impairment test to measure the amount of impairment loss. In the second step, the reporting unit’s fair value is allocated to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit’s goodwill is less than the carrying value, the difference is recorded as an impairment loss.

During the third quarter of fiscal 2012, the Company determined that sufficient indicators of potential impairment existed to require an interim goodwill impairment analysis for the Martin Yale Group reporting unit, which comprises the Information Security and Print Finishing operating segment. These indicators included lower than expected operating profits and cash flows for the first nine months of 2012, coupled with continued economic weakness in the European and Asian markets.

Based on this continuing trend, the earnings forecast for the next five years was revised resulting in a goodwill impairment loss of $13.2 million in the quarter. In addition, the Company recorded an intangible asset impairment for this segment related to other intangibles of $0.2 million.

The goodwill impairment loss reduces to zero the carrying value of goodwill recorded as part of various international acquisitions in the Information Security and Print Finishing segment for purchases from 2003 through 2008.