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GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended
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Feb. 29, 2012
GOODWILL AND INTANGIBLE ASSETS |
GOODWILL AND INTANGIBLE ASSETS |
NOTE 4 — GOODWILL AND INTANGIBLE ASSETS We do not record amortization expense on goodwill or other intangible assets that have indefinite useful lives. Amortization expense is recorded for intangible assets with definite useful lives. We perform an annual impairment review of goodwill and other intangible assets during the first quarter of each fiscal year. We also perform interim testing, if necessary, as required by GAAP. Any asset deemed to be impaired is written down to its fair value. The Company’s traditional impairment test methodology uses primarily estimated future discounted cash flow models (“DCF Models”). The DCF Models use a number of assumptions including expected future cash flows from the assets, volatility, risk free rate, and the expected life of the assets, the determination of which require significant judgments from management. In determining the assumptions to be used, the Company considers the existing rates on Treasury Bills, yield spreads on assets with comparable expected lives, historical volatility of the Company’s common stock and that of comparable companies and general economic and industry trends, among other considerations. When stock market conditions warrant, the Company will expand its traditional impairment test methodology to give weight to other methods that provide additional observable market information in order to better reflect the current risk level being incorporated into market prices and in order to corroborate the fair values of each of the Company’s reporting units. Management will use these additional methods in conjunction with its DCF Models in the event that the total market capitalization of its stock drops below its consolidated stockholders’ equity balance for a sustained period of time. Considerable management judgment is necessary in reaching a conclusion regarding the reasonableness of fair value estimates, evaluating the most likely impact of a range of possible external conditions, considering the resulting operating changes and their impact on estimated future cash flows, determining the appropriate discount factors to use, and selecting and weighting appropriate comparable market level inputs. Annual Impairment Testing in the First Quarter of Fiscal 2012 - The Company performed its annual evaluation of goodwill and indefinite-lived intangible assets for impairment during the first quarter of fiscal 2012. As a result of its testing, the Company concluded no impairment charges were required as the estimated fair value of the indefinite-lived trademarks and licenses, reporting unit net assets and the Company’s estimated enterprise value exceeded their respective carrying values as of the date of the evaluation. Impairments in the Fourth Quarter of Fiscal 201 1 - In the Housewares segment, as a result of continued net sales revenue declines associated with rechargeable lighting products, management performed a reassessment of the category’s long-term earnings prospects and decided to exit the category. As a result, the Company wrote down the carrying value of the associated inventory, and wrote off all related trademark and patent costs. The various adjustments were recorded as a non-cash impairment charge of $0.75 million ($0.70 million after tax). In the Personal Care segment, based upon continued net sales revenue declines and the future market growth prospects for certain professional product trademarks, the Company performed interim impairment testing using a revised outlook for the brands. As a result of its testing, the Company recorded a non-cash impairment charge of $0.91 million ($0.89 million after tax). The charge was related to trademarks, which were written down to fair value, determined on the basis of future discounted cash flows using the relief from royalty valuation method. Annual Impairment Testing in the First Quarter of Fiscal 2011 - The Company performed its annual evaluation of goodwill and indefinite-lived intangible assets for impairment during the first quarter of fiscal 2011. As a result of its testing, the Company recorded a non-cash impairment charge of $0.50 million ($0.49 million after tax). The charge was related to trademarks in our Personal Care segment that were written down to fair value, determined on the basis of future discounted cash flows using the relief from royalty valuation method. Impairments in the Second Quarter of Fiscal 2010 - During the fiscal quarter ended August 31, 2009, a significant customer decided to discontinue carrying a trademarked line of certain skin care products. Sales to this customer accounted for a substantial portion of the total sales of the trademark, and accordingly, non-cash impairment charges were recorded to write off the remaining $0.90 million ($0.89 million after tax) in carrying value of the associated trademark. Annual Impairment Testing in the First Quarter of Fiscal 2010 - The Company performed its annual evaluation of goodwill and indefinite-lived intangible assets for impairment during the first quarter of fiscal 2010. As a result of its testing, the Company concluded no impairment charges were required as the estimated fair value of the indefinite-lived trademarks and licenses, reporting unit net assets and the Company’s estimated enterprise value exceeded their respective carrying values as of the date of the evaluation. The following tables summarize by operating segment the changes in our goodwill and intangible assets for fiscal years 2012 and 2011: GOODWILL AND INTANGIBLE ASSETS (in thousands)
|  |  |  | Balances at |  |  |  |  |  |  |  | Balances at |
|  | Weighted |  | February 28, 2011 |  | Year Ended February 29, 2012 |  | February 29, 2012 |
|  | Average |  | Gross |  | Cumulative |  |  |  |  |  | Acquisition |  | Gross |  | Cumulative |  |  |  |  |
|  | Life |  | Carrying |  | Goodwill |  |  |  |  |  | and Retirement |  | Carrying |  | Goodwill |  | Accumulated |  | Net Book |
Description / Life |  | (Years) |  | Amount |  | Impairments |  | Additions |  | Impairments |  | Adjustments |  | Amount |  | Impairments |  | Amortization |  | Value |
Personal Care: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  | $ | 81,901 |  | $ | (46,490 | ) | $ | - |  | $ | - |  | $ | (59 | ) | $ | 81,842 |  | $ | (46,490 | ) | $ | - |  | $ | 35,352 |
Trademarks - indefinite |  |  |  | 75,303 |  | - |  | - |  | - |  | - |  | 75,303 |  | - |  | - |  | 75,303 |
Trademarks - finite |  | 16.6 |  | 150 |  | - |  | - |  | - |  | - |  | 150 |  | - |  | (67 | ) | 83 |
Licenses - indefinite |  |  |  | 10,300 |  | - |  | - |  | - |  | - |  | 10,300 |  | - |  | - |  | 10,300 |
Licenses - finite |  | 7.8 |  | 19,564 |  | - |  | - |  | - |  | - |  | 19,564 |  | - |  | (15,967 | ) | 3,597 |
Other Intangibles - finite |  | 6.0 |  | 49,401 |  | - |  | 36 |  | - |  | - |  | 49,437 |  | - |  | (15,012 | ) | 34,425 |
Total Personal Care |  |  |  | 236,619 |  | (46,490 | ) | 36 |  | - |  | (59 | ) | 236,596 |  | (46,490 | ) | (31,046 | ) | 159,060 |
Housewares: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  | 166,131 |  | - |  | - |  | - |  | - |  | 166,131 |  | - |  | - |  | 166,131 |
Trademarks - indefinite |  |  |  | 75,200 |  | - |  | - |  | - |  | - |  | 75,200 |  | - |  | - |  | 75,200 |
Other Intangibles - finite |  | 4.7 |  | 19,320 |  | - |  | 338 |  | - |  | (3,884 | ) | 15,774 |  | - |  | (9,000 | ) | 6,774 |
Total Housewares |  |  |  | 260,651 |  | - |  | 338 |  | - |  | (3,884 | ) | 257,105 |  | - |  | (9,000 | ) | 248,105 |
Healthcare / Home Environment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  | 154,700 |  | - |  | 86,162 |  | - |  | 10,005 |  | 250,867 |  | - |  | - |  | 250,867 |
Trademarks - indefinite |  |  |  | - |  | - |  | 54,000 |  | - |  | - |  | 54,000 |  | - |  | - |  | 54,000 |
Licenses - finite |  | 5.0 |  | - |  | - |  | 14,900 |  | - |  | - |  | 14,900 |  | - |  | (481 | ) | 14,419 |
Other Intangibles - finite |  | 9.6 |  | 91,550 |  | - |  | 23,240 |  | - |  | - |  | 114,790 |  | - |  | (11,741 | ) | 103,049 |
Total Healthcare / Home Environment |  |  |  | 246,250 |  | - |  | 178,302 |  | - |  | 10,005 |  | 434,557 |  | - |  | (12,222 | ) | 422,335 |
Total |  |  |  | $ | 743,520 |  | $ | (46,490 | ) | $ | 178,676 |  | $ | - |  | $ | 6,062 |  | $ | 928,258 |  | $ | (46,490 | ) | $ | (52,268 | ) | $ | 829,500 |
GOODWILL AND INTANGIBLE ASSETS (in thousands)
|  |  |  | Balances at |  |  |  |  |  |  |  | Balances at |
|  | Weighted |  | February 28, 2010 |  | Year Ended February 28, 2011 |  | February 28, 2011 |
|  | Average |  | Gross |  | Cumulative |  |  |  |  |  | Acquisition |  | Gross |  | Cumulative |  |  |  |  |
|  | Life |  | Carrying |  | Goodwill |  |  |  |  |  | and Retirement |  | Carrying |  | Goodwill |  | Accumulated |  | Net Book |
Description / Life |  | (Years) |  | Amount |  | Impairments |  | Additions |  | Impairments |  | Adjustments |  | Amount |  | Impairments |  | Amortization |  | Value |
Personal Care: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  | $ | 66,296 |  | $ | (46,490 | ) | $ | 15,845 |  | $ | - |  | $ | (240 | ) | $ | 81,901 |  | $ | (46,490 | ) | $ | - |  | $ | 35,411 |
Trademarks - indefinite |  |  |  | 53,054 |  | - |  | 23,650 |  | (1,401 | ) | - |  | 75,303 |  | - |  | - |  | 75,303 |
Trademarks - finite |  | 17.6 |  | 338 |  | - |  | - |  | - |  | (188 | ) | 150 |  | - |  | (62 | ) | 88 |
Licenses - indefinite |  |  |  | 10,300 |  | - |  | - |  | - |  | - |  | 10,300 |  | - |  | - |  | 10,300 |
Licenses - finite |  | 8.7 |  | 24,196 |  | - |  | - |  | - |  | (4,632 | ) | 19,564 |  | - |  | (15,450 | ) | 4,114 |
Other Intangibles - finite |  | 6.6 |  | 26,286 |  | - |  | 23,875 |  | - |  | (760 | ) | 49,401 |  | - |  | (9,048 | ) | 40,353 |
Total Personal Care |  |  |  | 180,470 |  | (46,490 | ) | 63,370 |  | (1,401 | ) | (5,820 | ) | 236,619 |  | (46,490 | ) | (24,560 | ) | 165,569 |
Housewares: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  | 166,131 |  | - |  | - |  | - |  | - |  | 166,131 |  | - |  | - |  | 166,131 |
Trademarks - indefinite |  |  |  | 75,554 |  | - |  | - |  | (354 | ) | - |  | 75,200 |  | - |  | - |  | 75,200 |
Other Intangibles - finite |  | 5.6 |  | 20,845 |  | - |  | 364 |  | (214 | ) | (1,675 | ) | 19,320 |  | - |  | (9,893 | ) | 9,427 |
Total Housewares |  |  |  | 262,530 |  | - |  | 364 |  | (568 | ) | (1,675 | ) | 260,651 |  | - |  | (9,893 | ) | 250,758 |
Healthcare / Home Environment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  | - |  | - |  | 154,700 |  | - |  | - |  | 154,700 |  | - |  | - |  | 154,700 |
Other Intangibles - finite |  | 9.5 |  | - |  | - |  | 91,550 |  | - |  | - |  | 91,550 |  | - |  | (1,630 | ) | 89,920 |
Total Healthcare / Home Environment |  |  |  | - |  | - |  | 246,250 |  | - |  | - |  | 246,250 |  | - |  | (1,630 | ) | 244,620 |
Total |  |  |  | $ | 443,000 |  | $ | (46,490 | ) | $ | 309,984 |  | $ | (1,969 | ) | $ | (7,495 | ) | $ | 743,520 |  | $ | (46,490 | ) | $ | (36,083 | ) | $ | 660,947 |
The following table summarizes the amortization expense attributable to intangible assets for the fiscal years 2012, 2011 and 2010, as well as estimated amortization expense for the fiscal years 2013 through 2017:
AMORTIZATION OF INTANGIBLE ASSETS |  |
(in thousands) |  |
Aggregate Amortization Expense |  |
For the fiscal years ended |  |
February 2012 |  | $ | 20,069
February 2011 |  | $ | 9,888
February 2010 |  | $ | 6,128
Estimated Amortization Expense |  |
For the fiscal years ended |  |
February 2013 |  | $ | 22,160
February 2014 |  | $ | 21,593
February 2015 |  | $ | 21,025
February 2016 |  | $ | 20,842
February 2017 |  | $ | 20,499
Many of the license agreements under which we sell or intend to sell products with trademarks owned by other entities require that we pay minimum royalties and make minimum levels of advertising expenditures. For fiscal 2013, minimum royalties due and minimum advertising expenditures under these license agreements total $15.22 and $6.10 million, respectively.

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- 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 Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6905597&loc=d3e13816-109267 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6905858&loc=d3e16265-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 142 -Paragraph 42, 43, 44, 45, 46, 47 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6905858&loc=d3e16373-109275 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6905858&loc=d3e16323-109275 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6905597&loc=d3e13854-109267 + Details
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