Goodwill and Intangible Assets

3 Months Ended

Oct. 02, 2016

NOTE 6 – Goodwill and Intangible Assets

Goodwill

The following table summarizes the activity in the Company's goodwill account by segment during the three months ended October 2, 2016 (in thousands):




	Precision Components Group		3DMT Group		Flanges and Fittings Group		Consolidated
Balance, June 30, 2016	$	10,285	$	2,804	$	1,712	$	14,801
Sale of subsidiary (1)		(3,374)		—		—		(3,374)
Balance, October 2, 2016	$	6,911	$	2,804	$	1,712	$	11,427

(1)

During the three months ended October 2, 2016, the Company sold its majority interest in Tekna Seal LLC and recorded a reduction of goodwill of $3.4 million, which is included in income from discontinued operations, net of tax on the condensed consolidated statement of operations (see Note 3, Discontinued Operations, for more information).

Intangible Assets

The following table summarizes the Company's intangible assets (in thousands):


	October 2, 2016						June 30, 2016
	Gross						Gross
	Carrying		Accumulated		Net Carrying		Carrying		Accumulated		Net Carrying
Intangible assets:	Amount		Amortization		Amount		Amount		Amortization		Amount
Patents and tradenames	$	3,773	$	(826)	$	2,947	$	3,773	$	(766)	$	3,007
Customer relationships		24,077		(6,623)		17,454		24,077		(6,021)		18,056
Non-compete agreements		3,642		(1,821)		1,821		3,642		(1,639)		2,003
Total	$	31,492	$	(9,270)	$	22,222	$	31,492	$	(8,426)	$	23,066

Intangible assets are being amortized using the straight-line method over estimated useful lives ranging from five to fifteen years. Amortization expense totaled $0.8 million for identifiable intangible assets for the three months ended October 2, 2016 and September 27, 2015. Estimated future amortization expense for the next five years as of October 2, 2016, is as follows (in thousands):


Fiscal Years	Amount
Remainder of 2017	$	2,531
2018		3,375
2019		3,191
2020		2,643
2021		2,643
Thereafter		7,839
Total	$	22,222

There were no impairments of long-lived assets during the three months ended October 2, 2016 and September 27, 2015.

- 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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