GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2011

NOTE D — GOODWILL AND INTANGIBLE ASSETS

The Company performed its 2011 annual impairment tests for its indefinite-lived intangible assets as of October 1, 2011. The test involved the assessment of the fair market value of the Company’s indefinite-lived intangible assets based on Level 2 observable inputs, using a discounted cash flow approach, assuming a discount rate of 13%-14% and an annual growth rate of 2%. The result of the assessment of the Company’s indefinite-lived intangibles indicated that their fair values exceeded their carrying amounts.

In December 2010, the Company paid $2.5 million to ARC International SA (“ARC”) for all outstanding consideration due or payable related to its 2008 acquisition of the business and certain assets of Mikasa, Inc. As a result of payment of all final consideration to ARC, the Company adjusted the remaining book value of the acquired Mikasa intangible assets, including the trade name and associated deferred tax liability, to zero and the negative goodwill balance to approximately $2.5 million. Concurrently, the remaining balance of negative goodwill was eliminated resulting in an extraordinary gain in the amount of $2.5 million in 2010.

The Company’s intangible assets, all of which are included in the Wholesale segment, consist of the following (in thousands):


	Year Ended December 31,
	2011							2010
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Goodwill	$	2,673	$	—		$	2,673	$	—	$	—		$	—
Indefinite-lived intangible assets:
Trade names		19,433		—			19,433		19,433		—			19,433
Finite-lived intangible assets:
Licenses		15,847		(6,641	)		9,206		15,847		(6,186	)		9,661
Trade names		6,116		(1,400	)		4,716		2,477		(1,267	)		1,210
Customer relationships		11,166		(681	)		10,485		586		(530	)		56
Patents		584		(160	)		424		584		(126	)		458

Total	$	55,819	$	(8,882	)	$	46,937	$	38,927	$	(8,109	)	$	30,818

A summary of the activities related to the Company’s intangible assets for the year ended December 31, 2011 consists of the following (in thousands):


	Intangible Assets
Goodwill and Intangible Assets, December 31, 2010	$	30,818

Goodwill		2,673
Acquisition of trade names		3,639
Acquisition of customer relationships		10,580
Amortization		(773	)

Goodwill and Intangible Assets, December 31, 2011	$	46,937

The weighted-average amortization periods for the Company’s finite-lived intangible assets as of December 31, 2011 are as follows:


	Years
Trade names		19
Licenses		33
Customer relationships		15
Patents		17

Estimated amortization expense for each of the five succeeding fiscal years is as follows (in thousands):


Year ending December 31
2012	$	1,587
2013		1,587
2014		1,587
2015		1,584
2016		1,580

Amortization expense for the years ended December 31, 2011, 2010 and 2009 was $773,000, $726,000 and $775,000, respectively.

- 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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