GOODWILL and INTANGIBLE ASSETS

9 Months Ended

Mar. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL and INTANGIBLE ASSETS

NOTE E – GOODWILL and INTANGIBLE ASSETS

Goodwill is recognized as a result of an acquisition when the price paid for the acquired business exceeds the fair value of its identified net assets. Identifiable intangible assets are recognized at their fair value when acquired. Goodwill and intangible assets with indefinite useful lives are not amortized, but instead periodically reviewed for impairment (at a minimum annually, in the fourth quarter of each fiscal year) and whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Examples of such events or changes in circumstances, many of which are subjective in nature, include significant negative industry or economic trends, significant changes in the manner of our use of the acquired assets or our strategy, a significant decrease in the market value of the asset, and a significant change in legal factors or in the business climate that could affect the value of the asset.

The Company performs the qualitative assessment using a “more likely than not” concept first. The determination of the value of such intangible assets requires management to make estimates and assumptions that affect the consolidated financial statements. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is necessary. The Company reviews its carrying value to determine whether an indication of impairment exists. If impairment exists, then the fair value of the goodwill is determined by allocation of the Company’s fair value to its assets and liabilities (including any unrecognized intangible assets). Intangible assets with definite useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment.

The carrying amount of goodwill as of March 30, 2014 and June 30, 2013 was $11.5 million.

The gross carrying amount and accumulated amortization of acquired intangible assets was as follows (in thousands):

	March 30, 2014		June 30, 2013
Patents	$	272	$	272
Tradenames		75		75
Customer Relationships		4,971		4,971
Total Gross Carrying Value		5,318		5,318
Less: Accumulated Amortization		1,075		696
Total Net Carrying Value	$	4,243	$	4,622

Intangible assets are being amortized using the straight-line method over estimated useful lives ranging from 5 to 15 years. Amortization expense for the three months ended March 30, 2014 and March 31, 2013 totaled $127 thousand and $331 thousand, respectively. Amortization expense for the nine months ended March 30, 2014 and March 31, 2013 totaled $379 thousand and $331 thousand, respectively.

Estimated future amortization expense for the next five years as of March 30, 2014 is as follows (in thousands):

Fiscal Years	Amount
2014 (remaining period)	$	127
2015		503
2016		503
2017		503
2018		502