Intangible assets, net and goodwill

12 Months Ended

Dec. 30, 2011

Goodwill and Intangible Assets Disclosure [Abstract]

(4) Intangible assets, net and goodwill

We assess long-lived assets, including identifiable intangible assets subject to amortization and property, plant and equipment, for possible impairment whenever events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Factors we consider important that could trigger an impairment review include significant adverse changes in the use of any asset, declines in historical or projected operating performance, reductions in our stock price and other significant negative economic trends.

The annual review of our goodwill and our indefinite-lived intangible assets is performed in our fourth fiscal quarter of each year, or more frequently if indicators of a potential impairment exist, to determine if the carrying amount of these intangible assets are impaired. As of December 30, 2011 and December 31, 2010, we did not have any goodwill on our Consolidated Balance Sheets. Therefore, our annual review of goodwill was no longer necessary beginning in 2010. Prior to 2010, the goodwill impairment review process compared the fair value of each reporting unit, where goodwill resided, with its carrying value. If the net book value of the reporting unit exceeded its fair value, we performed the second step of the impairment test that requires an allocation of the reporting unit's fair value to all of its assets and liabilities in a manner similar to a purchase price allocation, with any residual fair value being allocated to goodwill. An impairment charge was recognized only when the implied fair value of a reporting unit's goodwill was less than its carrying amount.

The income approach was based on estimating future cash flows using various growth assumptions and discounting based on a present value factor. We develop the future net cash flows during our annual budget process, which is completed in our fourth fiscal quarter of each year. However, estimates of future cash flows are updated in conjunction with any goodwill recoverability analysis that is performed independent of our annual review. The growth rates we used were an estimate of the future growth in the industries in which we participate and were adjusted, if necessary, for issues specific to our business and our position in the industry. Our discount rate assumption was based on an estimated cost of capital, which we determine annually based on market participant estimated costs of debt and equity relative to our capital structure. The comparable-companies market approach considers the trading multiples of our peer companies to compute our estimated fair value. The majority of the comparable-companies utilized in our evaluation are included in the Dow Jones U.S. Electrical Components and Equipment Industry Group Index.

As a result of an unexpected decline in the actual and forecasted sales and operating profit of our wireless reporting unit in 2009, we performed step one of the goodwill impairment test in the first quarter of 2010. Our wireless reporting unit did not pass the first step of the impairment test. The second step of the goodwill impairment test resulted in a $14.6 million impairment to Wireless' goodwill. The assumptions used in the impairment test performed at March 26, 2010 were consistent with those used in our 2009 annual impairment review, except for the impact of a new outlook on business related to a major customer of our wireless reporting unit and the overall decline in our wireless reporting unit's forecasted operating results. In addition to the 2010 impairment, we performed step one of the goodwill impairment test during the first quarter of 2009 as a result of the decline in our stock price and decrease in our forecasted operating profit, which our wireless reporting unit failed. The second step of the impairment test resulted in a $71.0 million goodwill impairment at our wireless reporting unit.

The following is a summary of our other intangible assets at December 30, 2011 and December 31, 2010 (in thousands):

	2011			2010
Intangible assets subject to amortization (definite lives):
Customer relationships	$	3,300		$	3,300
Technology		2,000			2,000
Other		--			960
Total		5,300			6,260

Accumulated amortization:
Customer relationships		(2,365	)		(1,897	)
Technology		(2,000	)		(1,178	)
Other		--			(128	)
Total		(4,365	)		(3,203	)

Net intangible assets subject to amortization		935			3,057

Intangible assets not subject to amortization (indefinite lives):
Tradenames		2,600			2,600

Intangible assets, net	$	3,535		$	5,657

Our amortization expense was approximately $1.3 million, $2.3 million and $3.6 million for the years ended December 30, 2011, December 31, 2010, and December 25, 2009, respectively. The decrease in our annual amortization expense was primarily the result of lower definite-lived intangible assets due to the impairment charges recorded in 2010. In addition, at December 30, 2011, we have classified $0.8 million of intangible assets as held for sale in connection with the planned divestiture of two of our manufacturing plants in China. These assets held for sale are included in prepaid and other current assets on the Consolidated Balance Sheets at December 30, 2011.

In 2010, as part of our annual review of indefinite-lived intangible assets, we recorded a $0.3 million impairment to one of our tradenames.

As a result of the decision that was made in the second quarter of 2010 to withdraw from our audio business, we performed a recoverability test on our finite-lived intangible assets, which resulted in a $3.6 million impairment to our technology intangibles. As a result of a significant decline in Wireless' actual and forecasted sales and operating profit during the first quarter of 2010, we performed a recoverability test on a finite-lived customer relationship intangible asset which resulted in a $11.5 million impairment charge.

The weighted average life of our finite intangible assets was approximately 2.0 years at December 30, 2011. Estimated annual amortization expense for each of the next five years is as follows (in thousands):

Year Ending
2012	$	471
2013	$	464

- 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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