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INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended
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Feb. 02, 2020
Goodwill and Intangible Assets Disclosure [Abstract] |
Intangible Assets Disclosure [Text Block] | NOTE 10 – INTANGIBLE ASSETS AND GOODWILL Our goodwill, some trademarks and trade names have indefinite useful lives and, consequently, are not subject to amortization for financial reporting purposes but are tested for impairment annually or more frequently if events or circumstances indicate that the asset might be impaired. Our non-amortizable intangible assets consist of:
| ■ | Goodwill and trademarks and tradenames related to the Home Meridian and Shenandoah acquisitions; and
| ■ | Trademarks and tradenames related to the acquisitions of Bradington-Young (acquired in 2002), Sam Moore (acquired in 2007) and Home Meridian (acquired in 2016).
We review goodwill annually for impairment or more frequently if events or circumstances indicate that it might be impaired. In accordance with ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, the goodwill impairment test consists of a two-step process, if necessary. However, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test outlined in ASC Topic 350. The more likely than not threshold is defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the impairment test is unnecessary and our goodwill is considered to be unimpaired. However, if based on our qualitative assessment we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we will proceed with performing the quantitative assessment. The quantitative assessment involves estimating the fair value of our goodwill using projected future cash flows that are discounted using a weighted average cost of capital analysis that reflects current market conditions. Management judgment is a significant factor in the goodwill impairment evaluation process. The computations require management to make estimates and assumptions, the most critical of which are the potential future cash flows and an appropriate discount rate. In addition to our qualitative assessment, management performed a quantitative analysis on the Home Meridian reporting unit’s goodwill in the fiscal 2020 fourth quarter. Based on our qualitative assessment and quantitative analysis, we have concluded that our goodwill is not impaired as of February 2, 2020. In conjunction with our evaluation of the cash flows generated by the Home Meridian, Bradington-Young and Sam Moore reporting units, we evaluated the carrying value of trademarks and trade names using the relief from royalty method, which values the trademark/trade name by estimating the savings achieved by ownership of the trademark/trade name when compared to licensing the mark/name from an independent owner. The inputs used in the trademark/trade name analyses are considered Level 3 fair value measurements. Details of our non-amortizable intangible assets are as follows:
|  |  | February 2, |  |  | February 3, |
Non-amortizable Intangible Assets | Segment |  | 2020 |  |  | 2019 |
Goodwill | Home Meridian |  | $ | 23,187 |  |  | $ | 23,187 |
Goodwill | Domestic Upholstery |  |  | 16,871 |  |  |  | 16,871 |
Total Goodwill |  |  | 40,058 |  |  |  | 40,058 |
Trademarks and trade names - Home Meridian | Home Meridian |  |  | 11,400 |  |  |  | 11,400 |
Trademarks and trade names - Bradington-Young | Domestic Upholstery |  |  | 861 |  |  |  | 861 |
Trademarks and trade names - Sam Moore | Domestic Upholstery |  |  | 396 |  |  |  | 396 |
Total Trademarks and trade names |  | $ | 12,657 |  |  | $ | 12,657 |
Total non-amortizable assets |  | $ | 52,715 |  |  | $ | 52,715 |
The following table is a rollforward of goodwill for the 2020 and 2019 fiscal years:
Segment |  | February 2, 2020 |  |  | February 3, 2019 |
Home Meridian |  | $ | 23,187 |  |  | $ | 23,187 |
Domestic Upholstery |  |  | 16,871 |  |  |  | 16,871 |
|  | $ | 40,058 |  |  | $ | 40,058 |
Our amortizable intangible assets are recorded in the Home Meridian and in Domestic Upholstery segments. The carrying amounts and changes therein of those amortizable intangible assets were as follows:
|  | Amortizable Intangible Assets |
|  | Customer |  |  |  |  |  |  |  |  |
|  | Relationships |  |  | Trademarks |  |  | Totals |
Balance at February 3, 2019 |  | $ | 22,320 |  |  | $ | 778 |  |  | $ | 23,098 |
Amortization |  |  | (2,324 | ) |  |  | (60 | ) |  |  | (2,384 | )
Balance at February 2, 2020 |  | $ | 19,996 |  |  | $ | 718 |  |  | $ | 20,714 |
The weighted-average amortization period for all amortizable intangible assets is 9.2 years. The weighted-average amortization period for customer relationships is 9.0 years and is 15.8 years for our trademarks. The estimated amortization expense associated with our amortizable intangible assets is expected to be as follows:
Fiscal Year |  | Amount
2021 |  | 2,384
2022 |  | 2,384
2023 |  | 2,384
2024 |  | 2,384
2025 |  | 2,359
2026 and thereafter |  | 8,819
|  | $ 20,714
Gross intangible assets and total accumulated amortization for each major class of intangible assets is as follows:
|  | February 2, 2020 |  |  | February 3, 2019 |
Goodwill |  | $ | 40,058 |  |  | $ | 40,058 |
Trademarks and tradenames |  |  | 13,435 |  |  |  | 13,495 |
Accumulated amortization |  |  | (60 | ) |  |  | (60 | )
Trademarks and tradenames, net |  |  | 13,375 |  |  |  | 13,435 |
Customer relationships |  |  | 22,320 |  |  |  | 24,644 |
Accumulated amortization |  |  | (2,324 | ) |  |  | (2,324 | )
Customer relationships, net |  |  | 19,996 |  |  |  | 22,320 |
Total Goodwill and other intangible assets, net |  | $ | 73,429 |  |  | $ | 75,813 |

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