Note 5 - Goodwill, Intangible Assets and Long Term Assets

9 Months Ended

Sep. 29, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

5.	GOODWILL, INTANGIBLE ASSETS AND LONG TERM ASSETS

a. Goodwill

The following table summarizes the goodwill activity by segment for the three month periods ended September 29, 2013 and September 30, 2012:

	Battery & Energy Products		Communications Systems		Discontinued Operations			Total

Balance at December 31, 2011	$	4,838	$	11,493	$	2,025		$	18,356

Sale of RedBlack Communications		-		-		(2,025	)		(2,025	)
Effect of foreign currency Translations		6		-		-			6

Balance at September 30, 2012		4,844		11,493		-			16,337

Effect of foreign currency Translations		7		-		-			7

Balance at December 31, 2012		4,851		11,493		-			16,344

Effect of foreign currency translations		61		-		-			61

Balance at September 29, 2013	$	4,912	$	11,493	$	-		$	16,405

b. Intangible Assets

The composition of intangible assets was:

	September 29, 2013
	Gross Assets		Accumulated Amortization		Net

Trademarks	$	3,567	$	-	$	3,567
Patents and technology		4,508		3,882		626
Customer relationships		4,027		3,515		512
Distributor relationships		390		350		40
Non-compete agreements		218		218		-

Total intangible assets	$	12,710	$	7,965	$	4,745

	December 31, 2012
	Gross Assets		Accumulated Amortization		Net

Trademarks	$	3,564	$	-	$	3,564
Patents and technology		4,495		3,702		793
Customer relationships		3,998		3,366		632
Distributor relationships		380		330		50
Non-compete agreements		217		217		-

Total intangible assets	$	12,654	$	7,615	$	5,039

Amortization expense for intangible assets was $102 and $301 for the three and nine month periods ended September 29, 2013, respectively, and $122 and $372 for the three and nine month periods ended September 30, 2012, respectively.

The change in the cost value of total intangible assets from December 31, 2012 to September 29, 2013 is a result of the effect of foreign currency translations.

In accordance with the Financial Accounting Standards Board’s (“FASB”) guidance for intangible assets other than goodwill, we do not amortize intangible assets with indefinite lives, but instead measure these assets for impairment at least annually, or when events indicate that impairment may exist. We amortize intangible assets that have definite lives so that the economic benefits of the intangible assets are being utilized over their weighted-average estimated useful life.

The impairment analysis of an indefinite-lived intangible asset consists first of a review of various qualitative factors of the identified indefinite-lived intangible asset to determine whether it is more likely than not that its fair value exceeds its carrying amount. This review includes, but is not limited to, an evaluation of the macroeconomic, industry or market, and cost factors relevant to the intangible asset as well as financial performance and entity or reporting unit events that may affect the value of the intangible asset. If this review leads to the determination that it is more likely than not that the fair value of the indefinite-lived intangible asset is greater than its carrying amount, further impairment testing is not required. However, if this review cannot support a conclusion that it is more likely than not that the fair value of the indefinite-lived intangible asset is greater than its carrying amount, or at our discretion, quantitative impairment steps are performed.

The impairment test for intangible assets with indefinite lives consists of a comparison of the fair value of the intangible assets with their carrying amounts. If the carrying value of the intangible assets exceeds the fair value, an impairment loss shall be recognized in an amount equal to that excess. We determine the fair value of our intangibles assets with indefinite lives (trademarks) through a royalty relief income valuation approach.

Due to the general slowdown in the timing of order processing resulting from the U.S. Government furloughs, shutdown and budget uncertainties, we accelerated our impairment test for our McDowell Communications Systems trademark from October 1, 2013 to September 29, 2013. Based upon the results of that review, we have determined that there is no impairment of the McDowell Communications Systems trademark. We will continue to monitor this trademark closely and will update our testing during the fourth quarter.

c. Long-Term Assets

In the first quarter of this year, we had a sale to a customer of our Communications Systems segment of which $2,031, net of interest, had a payment term of greater than one year. This sale was in order to facilitate this customer’s ability to support a soldier modernization initiative. We expect this receivable to be fully collected within two years. Currently $267 is classified as long-term.

- 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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