GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2012

GOODWILL AND INTANGIBLE ASSETS [Abstract]

4.	GOODWILL AND INTANGIBLE ASSETS

Goodwill and other intangible assets are allocated to the Company's reporting units at the date they are initially recorded. Goodwill and indefinite-lived intangible assets are not amortized but are subject to an annual (or under certain circumstances more frequent) impairment test based on their estimated fair value. Goodwill impairment testing is performed at the reporting unit level, one level below the business segment. The Company's Manufacturing segment includes goodwill originating from the acquisitions of Gravure Ink (acquired in the Adorn Holdings, Inc. acquisition), Quality Hardwoods Sales ("Quality Hardwoods"), A.I.A. Countertops, LLC ("AIA"), Performance Graphics, Décor Mfg., LLC ("Décor"), and Creative Wood Designs, Inc. ("Creative Wood"). While Gravure Ink, AIA, Performance Graphics, Décor, and Creative Wood remain reporting units of the Company for which impairment is assessed, Quality Hardwoods is assessed for impairment as part of the Company's hardwood door reporting unit. The Company's Distribution segment includes goodwill originating from the acquisition of Blazon International Group, which remains a reporting unit for which impairment is assessed.

Finite-lived intangible assets that meet certain criteria continue to be amortized over their useful lives and are also subject to an impairment test based on estimated undiscounted cash flows when impairment indicators exist. The Company performs the required impairment test of goodwill in the fourth quarter or more frequently if events or changes in circumstances indicate that the carrying value may exceed the fair value. No impairment was recognized during the third quarter and nine months ended September 30, 2012. There have been no material changes to the methods of evaluating goodwill and intangible asset impairments during the third quarter of 2012. The Company does not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions used to determine impairment in the foreseeable future.

In March 2012, the Company acquired the business and certain assets of Tualatin, Oregon-based Décor. The purchase was determined to be a business combination and the intangible assets recorded as a result of the acquisition included (in thousands): customer relationships - $655; trademarks - $624; non-compete agreements - $384; and goodwill - $1,440. The goodwill recognized is expected to be deductible for income tax purposes. The Décor reporting unit is included in the Manufacturing segment. See Note 5 for further details.

In July 2012, the Company acquired the business and certain assets of Elkhart, Indiana-based Gustafson Lighting ("Gustafson"). The purchase was determined to be a business combination and the intangible assets recorded as a result of the acquisition included (in thousands): customer relationships - $178; trademarks - $143; and non-compete agreement - $16. The Gustafson reporting unit is included in the Distribution segment. See Note 5 for further details.

In September 2012, the Company acquired the business and certain assets of Ligonier, Indiana-based Creative Wood. The purchase was determined to be a business combination and the intangible assets recorded as a result of the acquisition included (in thousands): customer relationships - $207; trademarks - $238; non-compete agreement - $312; and goodwill - $994. The goodwill recognized is expected to be deductible for income tax purposes. The Creative reporting unit is included in the Manufacturing segment. See Note 5 for further details.

Goodwill

Changes in the carrying amount of goodwill for the nine months ended September 30, 2012 by segment are as follows:

(thousands)	Manufacturing		Distribution		Total
Balance – January 1, 2012	$	4,214	$	105	$	4,319
Acquisitions		2,434		-		2,434
Balance – September 30, 2012	$	6,648	$	105	$	6,753

Other Intangible Assets

As of September 30, 2012, the remaining intangible assets balance of $13.3 million is comprised of $3.1 million of trademarks which have an indefinite life, and therefore, no amortization expense has been recorded, and $10.2 million pertaining to customer relationships and non-compete agreements which are being amortized over periods ranging from 1 to 19 years. There was no impairment recognized for indefinite-lived intangible assets during the third quarter and nine months ended September 30, 2012.

Other intangible assets, net consist of the following as of September 30, 2012 and December 31, 2011:

(thousands)		Sept. 30, 2012			Dec. 31, 2011
Trademarks	$	3,094		$	2,089
Customer relationships		11,308			10,268
Non-compete agreements		1,616			904
		16,018			13,261
Less: accumulated amortization		(2,738	)		(1,746	)
Other intangible assets, net	$	13,280		$	11,515

Changes in the carrying value of other intangible assets for the nine months ended September 30, 2012 by segment are as follows:

(thousands)	Manufacturing			Distribution			Total
Balance – January 1, 2012	$	10,583		$	932		$	11,515
Acquisition		2,420			337			2,757
Amortization		(778	)		(214	)		(992	)
Balance – September 30, 2012	$	12,225		$	1,055		$	13,280

- 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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