Note 5 - Goodwill and Intangible Assets

9 Months Ended

Dec. 29, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 5.    GOODWILL AND INTANGIBLE ASSETS

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. We evaluate goodwill for impairment on an annual basis or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. We conduct our annual impairment analysis in the fourth quarter of each fiscal year. Impairment of goodwill is tested at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit. Estimations and assumptions regarding the number of reporting units, future performances, results of our operations and comparability of our market capitalization and net book value will be used. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and a second step is performed to measure the amount of impairment loss. Because we have one reporting unit, we utilize an entity-wide approach to assess goodwill for impairment. As of December 29, 2013, no events or changes in circumstances suggest that the carrying amount for goodwill may not be recoverable and therefore we did not perform an interim goodwill impairment analysis.

The changes in the carrying amount of goodwill for fiscal years 2014 and 2013 were as follows (in thousands):

	December 29, 2013		March 31, 2013
Beginning balance	$	10,356	$	3,184
Goodwill additions		19,217		7,172
Ending balance	$	29,573	$	10,356

The goodwill additions during the nine months ended December 29, 2013 consist of $19.2 million residual allocation from the Cadeka acquisition purchase price accounting. Goodwill additions during the fiscal year ended March 31, 2013 consisted of $7.2 million residual allocation from the Altior acquisition purchase price accounting.

Intangible Assets

Our purchased intangible assets as of the dates indicated below were as follows (in thousands):

	December29, 2013							March 31, 2013
	Carrying Amount		Accumulated Amortization			Net  Carrying Amount		Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangible assets:
Existing technology	$	58,588	$	(35,647	)	$	22,941	$	42,858	$	(30,668	)	$	12,190
Customer relationships		5,075		(2,539	)		2,536		2,905		(2,079	)		826
Patents/Core technology		3,459		(3,328	)		131		3,459		(3,182	)		277
Distributor relationships		1,264		(1,264	)		—		1,264		(1,219	)		45
Tradenames		210		(35	)		175		—		—			—
Total intangible assets subject to amortization		68,596		(42,813	)		25,783		50,486		(37,148	)		13,338
In-process research and development		2,280		—			2,280		—		—			—
Total	$	70,876	$	(42,813	)	$	28,063	$	50,486	$	(37,148	)	$	13,338

Long-lived assets are amortized on a straight-line basis over their respective estimated useful lives. Existing technology is amortized over two to nine years. Patents/core technology is amortized over five to six years. Distributor relationships are amortized over six years. Customer relationships are amortized over five to seven years. Tradenames are amortized over three years. We expect the amortization of in-process research and development to start in fiscal year 2015. We evaluate the remaining useful life of our long-lived assets that are being amortized each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization. If the estimate of an intangible asset’s remaining useful life is changed, the remaining carrying amount of the long-lived asset is amortized prospectively over the remaining useful life. Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If an indicator of impairment exists, we compare the carrying value of long-lived assets to our projection of future undiscounted cash flows attributable to such assets and, in the event that the carrying value exceeds the future undiscounted cash flows, we record an impairment charge equal to the excess of the carrying value over the asset’s fair value. Although the assumptions used in projecting future revenues and gross margins are consistent with those used in our annual strategic planning process, intangible asset impairment charges might be required in future periods if our assumptions are not achieved.

As December 29, 2013, there were no indicators that required us to perform an intangible assets impairment review.

The aggregate amortization expenses for our purchased intangible assets for the periods indicated below were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	December 29, 2013		December 30, 2012		December 29, 2013		December 30, 2012
Amortization expense	$	1,991	$	994	$	5,665	$	3,155

The total future amortization expenses for our purchased intangible assets are summarized below (in thousands):

Amortization Expense (by fiscal year)
2014 (3 months remaining)	$	1,991
2015		6,039
2016		4,863
2017		3,449
2018		3,255
2019 and thereafter		6,186
Total future amortization	$	25,783