Note 8 - Goodwill and Other Intangible Assets

12 Months Ended

Nov. 26, 2022

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

8. Goodwill and Other Intangible Assets

Goodwill and other intangible assets consisted of the following:

	November 26, 2022
	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net
Intangibles subject to amortization:
Customer relationships	$	512	$	(280	)	$	232
Intangibles not subject to amortization:
Trade names							8,723
Goodwill							12,772
Total goodwill and other intangible assets						$	21,727

	November 27, 2021
	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net
Intangibles subject to amortization:
Customer relationships	$	512	$	(223	)	$	289
Intangibles not subject to amortization:
Trade names							6,848
Goodwill							7,217
Total goodwill and other intangible assets						$	14,354

Due to the impact of the COVID-19 pandemic during our 2020 fiscal year, we performed an interim impairment assessment of our remaining goodwill as of May 30, 2020, the end of our second fiscal quarter. As a result of this test, we concluded that the carrying value of our wood reporting unit exceeded its fair value by an amount in excess of the goodwill previously allocated to the reporting unit. Therefore, we recognized a goodwill impairment charge of $1,971 for the year ended November 28, 2020. Our subsequent annual goodwill impairment tests, conducted as of the beginning of our fourth fiscal quarters of 2020, 2021 and 2022, resulted in no additional impairments.

The determination of the fair value of our reporting units is based on a combination of a market approach, that considers benchmark company market multiples, and an income approach, that utilizes discounted cash flows for each reporting unit and other Level 3 inputs as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosure (see Note 4). Under the income approach, we determine fair value based on the present value of the most recent cash flow projections for each reporting unit as of the date of the analysis and calculate a terminal value utilizing a terminal growth rate. The significant assumptions under this approach include, among others: income projections, which are dependent on future sales, new product introductions, customer behavior, competitor pricing, operating expenses, the discount rate, and the terminal growth rate. The cash flows used to determine fair value are dependent on a number of significant management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based upon our historical experience. Our estimates are subject to change given the inherent uncertainty in predicting future results. Additionally, the discount rate and the terminal growth rate are based on our judgment of the rates that would be utilized by a hypothetical market participant. As part of the goodwill impairment testing, we also consider our market capitalization in assessing the reasonableness of the combined fair values estimated for our reporting units.

Changes in the carrying amounts of goodwill by reportable segment were as follows:

	Wholesale		Retail			Total
Balance as of November 28, 2020	$	7,217	$	-		$	7,217
No changes in fiscal 2021		-		-			-
Balance as of November 27, 2021		7,217		-			7,217
Acquisition of Noa Home		-		5,715			5,715
Foreign currency translation adjustment		-		(161	)		(161	)
Balance as of November 26, 2022	$	7,217	$	5,554		$	12,771

Accumulated impairment losses were $3,897 at each of November 26, 2022, November 27, 2021 and November 28, 2020.

The weighted average useful lives of our finite-lived intangible assets and remaining amortization periods as of November 26, 2022 are as follows:

	Useful Life in Years		Remaining Amortization Period in Years
Customer relationships		9		4

Our trade name intangible assets are associated with Noa Home and Lane Venture. Because it is our intention to maintain and grow those brands, they are considered to be indefinite-lived intangible assets. The amortization expense associated with finite-lived intangible assets during fiscal 2022, 2021 and 2020 was $57 each year and is included in selling, general and administrative expense in our consolidated statement of operations. All expense arising from the amortization of intangible assets is associated with our wholesale segment. Estimated future amortization expense for intangible assets that exist at November 26, 2022 is as follows:

Fiscal 2023	$	57
Fiscal 2024		57
Fiscal 2025		57
Fiscal 2026		57
Fiscal 2027		4
Total	$	232