Note 11 - Intangible Assets

12 Months Ended

Feb. 01, 2014

Disclosure Text Block [Abstract]

Intangible Assets Disclosure [Text Block]

11.          Intangible assets

The table below presents the balances of our intangible assets (in thousands):

	February 1, 2014			February 2, 2013
Acquired intangible assets	$	76,321		$	76,321
Purchased IP		25,807			23,450
Total		102,128			99,771
Accumulated amortization		(72,348	)		(63,198	)
Intangible assets, net	$	29,780		$	36,573

Impairment of intangible assets

Acquired intangible assets represent intangible assets acquired through business combinations. Purchased intellectual property (“Purchased IP”) represents intangible assets acquired through direct purchases of licensed technology from vendors which is incorporated into our products.

Purchased IP – not yet deployed relates to Purchased IP from third parties for our products that are currently in development. We begin amortizing such intellectual property upon the earlier of the beginning of the term of the license agreement, as appropriate, or at the time we begin shipment of the associated products into which such intellectual property is incorporated.

We test long-lived assets, including purchased intangible assets (other than goodwill and in-process research and development) for impairment whenever events or changes in circumstances, such as a change in technology, indicate that the carrying value of these assets may not be recoverable.

During fiscal 2014, we continued to restructure our operations to further align our operating expenses with our business, industry and revenue outlooks. In connection with our continued restructuring plan, we performed an impairment review of our intangible assets by comparing undiscounted expected future cash flows with the carrying values of the underlying assets. The results of this review indicated certain purchased IP licenses incorporated into discontinued products were impaired; as a result, we recorded an impairment charge for purchased IP of $0.3 million.  In addition, we recorded an impairment charge for certain software, equipment and leasehold improvements associated with such discontinued products of $0.6 million.  We recorded the impairment of $1.0 million related to products in development in operating expenses in the accompanying consolidated statements of operations in fiscal 2014.

During fiscal 2013, due to continued reductions in our profitability, negative cash flows from operations and our restructuring measures adopted in fiscal 2013, we performed an impairment review of our intangible assets.  In performing this review, we developed a forecast of the undiscounted cash flow expected to be generated by each intangible asset group and compared the result to the carrying value. The results of this review indicated certain purchased IP licenses incorporated into discontinued products and products in development were impaired; as a result, we recorded an impairment charge for purchased IP of $8.2 million.  In addition, we recorded an impairment charge for certain software, equipment and leasehold improvements and prepaid licenses associated with such discontinued products of $2.6 million and $0.4 million, respectively.  We recorded the impairment of $4.6 million related to developed products in cost of revenue and the impairment of $6.6 million related to products in development in operating expenses in the accompanying consolidated statements of operations in fiscal 2013.

During the third quarter of fiscal 2012, we performed an impairment review and concluded that the carrying value of our goodwill and acquired IP R&D was fully impaired, which resulted in an impairment charge of $45.1 million and $11.1 million, respectively, in fiscal 2012.  Subsequent to January 28, 2012, we have not capitalized any goodwill or IP R&D.  Additionally, we performed an impairment review of our intangible assets, other than goodwill and IP R&D, and concluded that two of our intangible asset groups, consisting primarily of certain developed technology and customer relationship intangibles related to our CopperGate acquisition, were not fully recoverable, resulting in an impairment charge of $55.1 million in fiscal 2012.

Intangible assets, subject to amortization, were as follows (in thousands, except for years): 

	February 1, 2014
	Gross Value		Impairment			Accumulated Amortization and Effect of Currency Translation			Net Value		Weighted Average Remaining Amortization Period (Years)
Acquired intangible assets:
Developed technology	$	76,639	$	(24,614	)	$	(40,334	)	$	11,691		2.9
Customer relationships		50,704		(30,486	)		(17,048	)		3,170		2.7
Trademarks		2,678		-			(2,102	)		576		4.9
Non-compete agreements		1,400		-			(1,400	)		-
Purchased IP - amortizing		21,569		(5,516	)		(11,464	)		4,589		1.5
Total amortizing		152,990		(60,616	)		(72,348	)		20,026		2.6
Purchased IP - not yet deployed		12,770		(3,016	)		-			9,754
Total intangibles	$	165,760	$	(63,632	)	$	(72,348	)	$	29,780

	February 2, 2013
	Gross Value		Impairment			Accumulated Amortization and Effect of Currency Translation			Net Value		Weighted Average Remaining Amortization Period (Years)
Acquired intangible assets:
Developed technology	$	76,639	$	(24,614	)	$	(34,567	)	$	17,458		3.6
Customer relationships		50,704		(30,486	)		(15,782	)		4,436		3.6
Trademarks		2,678		-			(1,983	)		695		5.9
Non-compete agreements		1,400		-			(1,400	)		-
Purchased IP - amortizing		21,370		(5,516	)		(7,970	)		7,884		2.4
Total amortizing		152,791		(60,616	)		(61,702	)		30,473		3.4
Purchased IP - not yet deployed		8,778		(2,678	)		-			6,100
Total intangibles	$	161,569	$	(63,294	)	$	(61,702	)	$	36,573

Purchased IP – not yet deployed relates to Purchased IP from third parties for our products that are currently in development. We begin amortizing such intellectual property upon the earlier of the beginning of the term of the license agreement, as appropriate, or at the time we begin shipment of the associated products into which such intellectual property is incorporated. As of February 1, 2014, we had $9.8 million of Purchased IP, which we have not yet begun to amortize.

Amortization expense related to intangible assets was $10.6 million, $11.6 million and $18.8 million for fiscal 2014, 2013 and 2012, respectively.  The following table presents the amortization of intangible assets in the accompanying consolidated statements of operations (in thousands):

	Fiscal Years Ended
	February 1, 2014		February 2, 2013		January 28, 2012
Cost of revenue	$	9,105		9,473		9,562
Operating expenses		1,542		2,124		9,206
Total intangible amortization expense	$	10,647		11,597		18,768

As of February 1, 2014, we expect the amortization expense in future periods to be as follows (in thousands):

Fiscal years	Purchased IP-Amortizing		Developed Technology		Trademarks		Customer Relationships		Total
2015	$	3,135	$	4,282	$	118	$	1,265	$	8,800
2016		1,390		3,957		118		1,109		6,574
2017		41		2,957		118		796		3,912
2018		23		495		118		-		636
2019		-		-		104		-		104
Total	$	4,589	$	11,691	$	576	$	3,170	$	20,026