Goodwill and Intangibles

6 Months Ended

Jul. 01, 2011

Note 9. Goodwill and Intangibles

The Company completed its annual impairment testing for goodwill and indefinite-lived intangible assets in the second quarter of 2011, and determined that the carrying value of a certain intangible asset related to its howies^® brand exceeded fair value. Accordingly, the Company recorded a non-cash impairment charge of $736 in its consolidated statement of operations. The impairment charge reduced the trademark of the howies^® brand to its fair value of $540 at July 1, 2011.

The Company completed its annual impairment testing for goodwill and indefinite-lived intangible assets in the second quarter of 2010, and determined that the carrying values of certain goodwill and intangible assets, primarily related to its IPath^® and howies^® brands, exceeded fair value. Accordingly, the Company recorded non-cash impairment charges of $5,395 and $7,854 for goodwill and intangible assets, respectively, in its consolidated statement of operations. The impairment charge reduced the goodwill related to the IPath, North America retail, and Europe retail reporting units to zero. The charge of $7,854 reduced the trademark and other intangible assets of IPath and howies to their respective fair values at July 2, 2010 of $720 and $1,200. See Note 2 to the unaudited condensed consolidated financial statements for additional information.

A summary of goodwill activity by segment follows:


	2011							2010
			Accumulated			Net Book				Accumulated			Net Book
	Gross		Impairment			Value		Gross		Impairment			Value
Balance at January 1:
North America	$	36,876	$	(4,912	)	$	31,964	$	36,876	$	-		$	36,876
Europe		7,477		(483	)		6,994		7,477		-			7,477

Total	$	44,353	$	(5,395	)	$	38,958	$	44,353	$	-		$	44,353

Impairment charges:
North America	$	-	$	-		$	-	$	-	$	(4,912	)	$	(4,912	)
Europe		-		-			-		-		(483	)		(483	)

Total	$	-	$	-		$	-	$	-	$	(5,395	)	$	(5,395	)

Balance at end of quarter:
North America	$	36,876	$	(4,912	)	$	31,964	$	36,876	$	(4,912	)	$	31,964
Europe		7,477		(483	)		6,994		7,477		(483	)		6,994

Total	$	44,353	$	(5,395	)	$	38,958	$	44,353	$	(5,395	)	$	38,958

Intangible assets consist of trademarks and other intangible assets. Other intangible assets consist of customer, patent and non-competition related intangible assets. Intangible assets consist of the following:


	July 1, 2011							December 31, 2010
						Net
			Accumulated			Book				Accumulated			Net Book
	Gross		Amortization			Value		Gross		Amortization			Value
Trademarks (indefinite-lived)	$	31,710	$	-		$	31,710	$	32,402	$	-		$	32,402
Trademarks (finite-lived)		3,731		(2,292	)		1,439		4,064		(2,462	)		1,602
Other intangible assets (finite-lived)		5,729		(5,248	)		481		5,995		(5,160	)		835

Total	$	41,170	$	(7,540	)	$	33,630	$	42,461	$	(7,622	)	$	34,839

- 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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