Long Lived Assets

12 Months Ended

Apr. 28, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and other intangible assets: We account for goodwill and intangible assets in accordance with ASC 350, Goodwill and Other Intangible Assets. Under these provisions, goodwill is not amortized but is tested for impairment on at least an annual basis. Impairment testing is required more often than annually if an event or circumstance indicates that an impairment or a decline in value may have occurred. In conducting our impairment testing, we compare the fair value of each of our business units (reporting unit) to the related carrying value. If the fair value of a reporting unit exceeds its carrying value, goodwill is not impaired. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. We conduct our impairment testing as of the first business day of the third fiscal quarter each year.

We utilize an income approach to estimate the fair value of each reporting unit. We selected this method because we believe that it most appropriately measures our income producing assets. We considered using the market approach and cost approach, but concluded they were not appropriate in valuing our reporting units given the lack of relevant and available market comparisons. The income approach is based on the projected cash flows, which are discounted to their present value using discount rates that consider the timing and risk of the forecasted cash flows. We believe that this approach is appropriate because it provides a fair value estimate based upon the reporting units’ expected long-term operating cash performance. This approach also mitigates the impact of the cyclical trends that occur in the industry. Fair value is estimated using internally-developed forecasts and assumptions. The discount rate used is the average estimated value of a market participant’s cost of capital and debt, derived using customary market metrics. Other significant assumptions include terminal value margin rates, future capital expenditures, and changes in future working capital requirements. We also compare and reconcile our overall fair value to our market capitalization. Although there are inherent uncertainties related to the assumptions used and to our application of these assumptions to this analysis, we believe that the income approach provides a reasonable estimate of the fair value of our reporting units. The foregoing assumptions to a large degree were consistent with our long-term performance, with limited exceptions. We believe that our future investments for capital expenditures as a percent of revenue will decline in future years due to our improved utilization resulting from lean initiatives, and we believe that long-term receivables will decrease as we grow. We also have assumed that through this economic downturn, our markets have not contracted for the long term; however, it may be a number of years before they fully recover. These assumptions could deviate materially from actual results.

We performed an analysis of goodwill as of the first business day of our third quarter in fiscal 2012, 2011 and 2010. The results of the analysis indicated that no goodwill impairment existed as of that date with respect to 2012 and 2011. During fiscal 2010, as a result of revisions in our forward-looking 12-month forecast during the month of January 2010 resulting from lower than expected order bookings and increased near-term uncertainty, primarily in our Live Events business unit, the significance of orders being delayed in all business units, and the decline in our stock price, we believed that an additional goodwill impairment test was required as of January 31, 2010. Based on the test at that time, we determined that the goodwill associated with the Schools and Theatres business unit, totaling $685, was fully impaired and that the goodwill associated with our International business unit of $725 was fully impaired. We therefore recognized an impairment loss as a result. The impaired goodwill was related primarily to the acquisition of Hoffend and Sons, which was allocated to all business units, and the purchase of European Timing Systems, which was allocated to the International business unit.

The following table sets forth the change in goodwill during fiscal 2012:



	Live Events			Commercial			Transportation			Total Goodwill
Balance as of April 30, 2011:	$	2,452		$	756		$	176		$	3,384
Foreign currency translation	(17		)	(15		)	(5		)	(37		)
Balance as of April 28, 2012:	$	2,435		$	741		$	171		$	3,347

The following table sets forth the amounts of goodwill and accumulated impairment as of April 28, 2012 and April 30, 2011:



	Live Events		Commercial		Transportation		Schools and Theatres			International			Total
Balance as of April 28, 2012:
Goodwill	$	2,435	$	741	$	171	$	685		$	725		$	4,757
Accumulated impairment losses	—		—		—		(685		)	(725		)	(1,410		)
	$	2,435	$	741	$	171	$	—		$	—		$	3,347
Balance as of April 30, 2011:
Goodwill	$	2,452	$	756	$	176	$	685		$	725		$	4,794
Accumulated impairment losses	—		—		—		(685		)	(725		)	(1,410		)
	$	2,452	$	756	$	176	$	—		$	—		$	3,384

We face a number of risks to our business which can adversely impact cash flows in each of our business units and cause a significant decline in the fair values of each business unit. This decline could lead to an impairment of goodwill in some or all of our business units. Certain events, such as a worsening trend of orders and sales without a corresponding way to preserve future cash flows or a significant decline on our stock price, could cause a further impairment in goodwill.

As required by ASC 350, intangibles with finite lives are amortized. We evaluate indefinite lived assets for impairment annually and whenever events or changes in circumstances indicate their carrying value may not be recoverable. The net value of intangible assets is shown on our consolidated balance sheets. Estimated amortization expense based on intangibles as of April 28, 2012 is $228 for each of the fiscal years 2013 through 2016 and $95 for fiscal 2017.

The following table sets forth the gross carrying amount and accumulated amortization of intangible assets by major intangible class as of April 28, 2012 and April 30, 2011:



	April 28, 2012						April 30, 2011
	Gross Carrying Amount		Accumulated Amortization		Net Value		Gross Carrying Amount		Accumulated Amortization		Net Value
Definite-lived:
Patents	$	2,282	$	1,274	$	1,008	$	2,282	$	1,046	$	1,236
Non-compete agreements	—		—		—		348		331		17
	2,282		1,274		1,008		2,630		1,377		1,253
Indefinite-lived:
Registered trademarks	401		—		401		401		—		401
	$	2,683	$	1,274	$	1,409	$	3,031	$	1,377	$	1,654

Impairment of long-lived assets: We recorded a pretax asset impairment charge of $538, $355 and $861 for the fiscal years ended April 28, 2012, April 30, 2011 and May 1, 2010, respectively for other long-lived assets including property and equipment. The impairment charges related to technology changes in our demonstration equipment and tooling equipment. Impairment charges related to the demonstration equipment are included in selling expense. Impairment charges related to tooling were primarily included in product development.

- 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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