Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in the carrying amount of goodwill as of September 30, 2017, by reportable segment are as follows (in thousands):



	Envelope		Print		Label		Total
Balance as of December 31, 2016	$	21,633	$	42,499	$	109,277	$	173,409
Foreign currency translation	—		196		—		196
Balance as of September 30, 2017	$	21,633	$	42,695	$	109,277	$	173,605

Other intangible assets are as follows (in thousands):



		September 30, 2017										December 31, 2016
	Weighted Average Remaining Amortization Period (Years)	Gross Carrying Amount		Accumulated Impairment Charges			Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Impairment Charges			Accumulated Amortization			Net Carrying Amount
Intangible assets with definite lives:
Customer relationships	6	$	114,374	$	(27,234	)	$	(63,464	)	$	23,676	$	114,287	$	(27,234	)	$	(60,014	)	$	27,039
Trademarks and trade names	20	55,765		(46,493		)	(5,646		)	3,626		55,755		(46,493		)	(5,428		)	3,834
Leasehold interest	16	4,430		—			(912		)	3,518		4,430		—			(743		)	3,687
Patents	8	1,120		—			(842		)	278		1,120		—			(817		)	303
Subtotal	9	175,689		(73,727		)	(70,864		)	31,098		175,592		(73,727		)	(67,002		)	34,863

Intangible assets with indefinite lives:
Trade names		84,900		(7,700		)	—			77,200		84,900		—			—			84,900
Total		$	260,589	$	(81,427	)	$	(70,864	)	$	108,298	$	260,492	$	(73,727	)	$	(67,002	)	$	119,763

Annual amortization expense of intangible assets for the next five years is estimated to be as follows (in thousands):



	Annual Estimated Expense
Remainder of 2017	$	1,280
2018	5,003
2019	4,885
2020	4,885
2021	4,731
2022	4,250
Thereafter	6,064
Total	$	31,098

Asset Impairments

As of September 30, 2017, the Company determined that the year to date declines in net sales and operating income, along with the decrease in the Company’s stock price relative to its fourth quarter 2016 impairment test represented a triggering event, which may require a goodwill impairment test. As of the latest annual goodwill impairment test, the envelope, print and label reporting units’ calculated fair values each exceeded their carrying value by at least 35%. To the extent the net sales and operating income have declined, there may be a negative impact on the future cash flow assumptions which would impact the reporting units’ fair values. The Company will complete its assessment as part of the annual impairment test in the fourth quarter, as the impact on future projected revenues is completed. There were no goodwill impairments recorded in the three and nine months ended September 30, 2017, or October 1, 2016, respectively.

Also during the third quarter, based on the decline in sales, the Company determined that its indefinite lived trade name intangible assets were impaired. During the third quarter of 2017, the Company recognized impairments of $6.2 million and $1.5 million associated with indefinite lived intangible assets in its print and label segments, respectively. Fair value was determined by the Company to be Level 3 under the fair value hierarchy, and was based upon evaluation using a relief from royalty and other discounted cash flow methodologies. There were no intangible asset impairments recorded in the three and nine months ended October 1, 2016.

- 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.

+ References + Details