GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 25, 2016

Goodwill and Intangible Assets Disclosure [Abstract]



5.	GOODWILL AND INTANGIBLE ASSETS

The Company acquired intangible assets in various acquisitions in 2015 and through the first nine months of 2016 that were determined to be business combinations. The goodwill recognized is expected to be deductible for income tax purposes for each of the 2015 and 2016 acquisitions with the exception of the acquisition of BH Electronics, Inc. See Note 6 for further details. 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 impairment test based on their estimated fair value performed annually in the fourth quarter (or under certain circumstances more frequently as warranted). Goodwill impairment testing is performed at the reporting unit level, one level below the business segment.

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 assesses finite-lived intangible assets for impairment 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 25, 2016 and September 27, 2015 related to goodwill, indefinite-lived intangible assets or finite-lived intangible assets. There have been no material changes to the method of evaluating impairment related to goodwill, indefinite-lived intangible assets or finite-lived intangible assets during the first nine months of 2016.

The Company acquired intangible assets in various acquisitions in the first nine months of 2016 that are shown in the table below on a preliminary basis pending the finalization of all required purchases accounting adjustments. See Note 6 for additional details.



(thousands)	Customer Relationships		Non-Compete Agreements		Trademarks		Total Other Intangible Assets		Goodwill		Total Intangible Assets
Parkland Plastics, Inc.	$	7,500	$	800	$	2,500	$	10,800	$	5,325	$	16,125
The Progressive Group	3,840		410		1,280		5,530		2,951		8,481
Cana Holdings, Inc.	4,592		510		1,531		6,633		3,572		10,205
Mishawaka Sheet Metal, LLC	4,399		489		1,466		6,354		3,421		9,775
L.S. Manufacturing, Inc.	3,982		443		1,327		5,752		3,096		8,848
BH Electronics, Inc.	13,063		1,451		4,354		18,868		13,660		32,528

Goodwill

Changes in the carrying amount of goodwill for the nine months ended September 25, 2016 by segment are as follows:



(thousands)	Manufacturing		Distribution		Total
Balance - December 31, 2015	$	62,285	$	6,321	$	68,606
Acquisitions	29,074		2,951		32,025
Other	169		—		169
Balance - September 25, 2016	$	91,528	$	9,272	$	100,800

Other Intangible Assets

Other intangible assets are comprised of customer relationships, non-compete agreements and trademarks. Customer relationships and non-compete agreements represent finite-lived intangible assets that have been recorded in the Manufacturing and Distribution segments along with related amortization expense. As of September 25, 2016, the other intangible assets balance of $150.8 million is comprised of $37.9 million of trademarks which have an indefinite life, and therefore, no amortization expense has been recorded, and $112.9 million pertaining to customer relationships and non-compete agreements which are being amortized over periods ranging from 2 to 19 years.

For the finite-lived intangible assets attributable to the 2016 acquisitions of Parkland Plastics, Inc., The Progressive Group, Cana Holdings, Inc., Mishawaka Sheet Metal, LLC, Vacuplast, LLC d/b/a L.S. Manufacturing, Inc., and BH Electronics, Inc., the useful life pertaining to non-compete agreements and to customer relationships for all six of these acquisitions was 5 years and 10 years, respectively.

Amortization expense for the Company’s intangible assets in the aggregate was $9.7 million and $6.0 million for the nine months ended September 25, 2016 and September 27, 2015, respectively.

Other intangible assets, net consist of the following as of September 25, 2016 and December 31, 2015:



(thousands)	Sep. 25, 2016			Weighted Average Useful Life (in years)	Dec. 31, 2015			Weighted Average Useful Life (in years)
Customer relationships	$	128,364		10.2	$	91,164		10.4
Non-compete agreements	13,120			3.7	9,012			3.4
Trademarks	37,946			Indefinite	25,487			Indefinite
	179,430				125,663
Less: accumulated amortization	(28,584		)		(18,904		)
Other intangible assets, net	$	150,846			$	106,759

Changes in the carrying value of other intangible assets for the nine months ended September 25, 2016 by segment are as follows:



(thousands)	Manufacturing			Distribution			Total
Balance - December 31, 2015	$	95,359		$	11,400		$	106,759
Acquisitions	48,407			5,530			53,937
Amortization	(7,639		)	(2,041		)	(9,680		)
Other	(170		)	—			(170		)
Balance - September 25, 2016	$	135,957		$	14,889		$	150,846

- 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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