Goodwill and Other Intangible Assets

6 Months Ended

Dec. 28, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

The Company uses the acquisition method of accounting for any business acquisitions and recognizes intangible assets separately from goodwill. The acquired assets and assumed liabilities in an acquisition are measured and recognized based on their estimated fair value at the date of acquisition, with goodwill representing the excess of the consideration transferred over the fair value of the identifiable net assets.

During the second quarter of fiscal 2014, we performed the annual initial qualitative assessment of the goodwill and indefinite life intangible assets related to our Baggallini and Foot Petals reporting units. Based on this assessment, there were no impairment indicators present for the goodwill and indefinite life intangible assets related to our Baggallini reporting unit. Based on the qualitative assessment of the goodwill and indefinite life intangible assets related to our Foot Petals reporting unit, we concluded that further testing was required and performed a quantitative assessment of the goodwill and indefinite life intangible assets. Based on the goodwill assessment, the estimated fair value exceeded the estimated carrying value of our Foot Petals reporting unit by 12.5% and no impairment expense was recorded for the first half of fiscal 2014. An annual decrease of 130 basis points in the assumed long-term revenue growth rate for this reporting unit could lead to a step 2 calculation to quantify a potential impairment based on the current forecast model. Further, based on the indefinite life intangible assets analysis, the estimated fair value of the asset exceeded the carrying value of the asset. The book value of the Foot Petals goodwill and indefinite life intangible assets was $5,420 and $3,600, respectively, as of the first half of fiscal 2014.

Other intangible assets included the following:



	December 28, 2013
	Weighted- average amortization period	Gross carrying amount		Accumulated amortization			Net carrying amount
Amortizing intangible assets:
Customer relationships	9.4 years	$	15,738	$	(4,764	)	$	10,974
Trademarks, patents, and fees	5 years	940		(705		)	235
Total intangible assets subject to amortization		$	16,678	$	(5,469	)	$	11,209



	June 29, 2013
	Weighted- average amortization period	Gross carrying amount		Accumulated amortization			Net carrying amount
Amortizing intangible assets:
Customer relationships	9.4 years	$	15,738	$	(3,902	)	$	11,836
Trademarks, patents and fees	5 years	937		(661		)	276
Total intangible assets subject to amortization		$	16,675	$	(4,563	)	$	12,112

The Company recognized aggregate customer relationships and trademarks, patents and fees amortization expense of $453 and $435 in the second quarter of fiscal 2014 and the second quarter of fiscal 2013, respectively. For the first half of fiscal 2014 and the first half of fiscal 2013, the Company recognized aggregate customer relationships and trademarks, patents and fees amortization expense of $906 and $871, respectively. These amortization expenses were reported as part of selling, general and administrative expenses in the accompanying condensed consolidated statements of income.

- 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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