XML 85 R10.htm IDEA: XBRL DOCUMENT v3.2.0.727
Intangible Assets and Goodwill
 12 Months Ended
May. 02, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets and Goodwill
Intangible Assets and Goodwill 
Prior to our annual goodwill impairment testing at the end of fiscal 2015, we had goodwill of $11.8 million for two reporting units in the Interface segment and goodwill of $1.0 million for one reporting unit in the Power Products segment, for a total of $13.0 million.
We performed a qualitative goodwill screening test of goodwill impairment on our Power Systems Group in the Power Products segment and Hetronic in our Interface segment. We considered the qualitative factors and weighed the evidence obtained and we determined that it is more likely than not that the fair value of the two reporting units is greater than the carrying value, and therefore concluded that the assets were not impaired.
We completed "step two" of the goodwill test for our TouchSensor reporting unit which had a fair value less than the carrying value and concluded that goodwill was impaired, and recorded a goodwill impairment charge of $11.1 million in our Interface segment related to these assets. The assumptions used in the valuation of these reporting units were made using management's most recent projections which are considered level 3 inputs in the fair value hierarchy. We continue to monitor the operating results and cash flows of our reporting units on a quarterly basis for signs of possible declines in estimated fair value and goodwill impairment.

Intangible assets subject to amortization are evaluated for impairment if events or changes in circumstances indicate that the carrying value of an asset might be impaired. Due to changes in market conditions in fiscal 2014, management performed an impairment analysis on our Eetrex reporting unit in our Power Products segment and determined that the asset was impaired. The Company recorded an impairment charge of $1.7 million related to these assets.

Prior to our annual goodwill impairment testing at the end of fiscal 2013, we had goodwill of $12.0 million for two reporting units in the Interface segment and goodwill of $5.2 million for two reporting units in the Power Products segment, for a total of $17.2 million. We performed "step one" of the goodwill test on the four reporting units. Based on this test, we determined that the fair value for three of the reporting units exceeded their carrying values by approximately 16% to 75%, and one reporting unit was less than the carrying value of the net assets. We completed "step two" of the goodwill test for our Eetrex reporting unit which had a fair value less than the carrying value and concluded that goodwill was impaired, and recorded a goodwill impairment charge of $4.3 million in our Power Products segment related to these assets. The assumptions used in the valuation of these reporting units were made using management's most recent projections which are considered level 3 inputs in the fair value hierarchy.

The fair value of our trademarks are estimated and compared to the carrying value. We estimate the fair value of the intangible assets using the relief-from-royalty method, which requires assumptions related to projected revenues from our annual operating budgets; assumed royalty rates that could be payable if we did not own the trademarks; and a discount rate which are considered level 3 inputs in the fair value hierarchy. An impairment loss would be recognized if the estimated fair value of the indefinite-lived intangible asset is less than its carrying value. Based on results of our impairment test performed on one reporting unit in the Interface segment as of May 2, 2015 and May 3, 2014, no impairment was determined to exist. The fair values of the trademarks tested exceeded their carrying value by approximately 64% and 117% for fiscal 2015 and 2014, respectively.
  
Goodwill increased $0.8 million in fiscal 2013 related to the purchase of the Hetronic Italy business. See Note 2 for more information.

The following table shows the roll-forward of goodwill.
 
 
Interface
 
Power
Products
 
Total
Balance as of April 28, 2012
$
11.1

 
$
5.3

 
$
16.4

 
 
 
 
 
 
Impairment
—

 
(4.3
)
 
(4.3
)
 Acquisitions
0.8

 
—

 
0.8

Foreign currency translation
—

 
—

 
—

Balance as of April 27, 2013
11.9

 
1.0

 
12.9

 
 
 
 
 
 
Impairment
—

 
—

 
—

Acquisitions
—

 
—

 
—

Foreign currency translation
0.1

 
—

 
0.1

Balance as of May 3, 2014
12.0

 
1.0

 
13.0

 
 
 
 
 
 
Impairment
(11.1
)
 
—

 
(11.1
)
Foreign currency translation
(0.2
)
 
—

 
(0.2
)
Balance as of May 2, 2015
$
0.7

 
$
1.0

 
$
1.7


 
Intangible Assets
 
The following tables present details of our remaining identifiable intangible assets:
 
 
As of May 2, 2015
 
Gross
 
Accumulated
Amortization
 
Net
 
Wtd. Avg. Remaining
Amortization
Periods (Years)
Customer relationships and agreements
$
16.3

 
$
15.0

 
$
1.3

 
8.8
Trade names, patents and technology licenses
25.8

 
15.8

 
10.0

 
3.3
Covenants not to compete
0.1

 
0.1

 
—

 
2.4
Total
$
42.2

 
$
30.9

 
$
11.3

 
 
 
 
As of May 3, 2014
 
Gross
 
Accumulated
Amortization
 
Net
 
Wtd. Avg. Remaining
Amortization
Periods (Years)
Customer relationships and agreements
$
16.6

 
$
14.7

 
$
1.9

 
9.9
Trade names, patents and technology licenses
25.8

 
14.8

 
11.0

 
9.8
Covenants not to compete
0.1

 
—

 
0.1

 
3.4
Total
$
42.5

 
$
29.5

 
$
13.0

 
 

 
The estimated aggregate amortization expense for each of the five succeeding fiscal years is as follows:
 
2016

$
2.4

2017

$
2.3

2018

$
2.2

2019

$
2.1

2020

$
0.2


 
At the end of fiscal 2015 the Company reviewed the estimated useful lives of some of the patents due to current business conditions and shift in strategic direction changed the remaining useful lives of these assets from 12.0 years to 4.0 years.

As of May 2, 2015 and May 3, 2014, the trade names, patents and technology licenses include $1.8 million of trade names that are not subject to amortization.