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EXCEL - IDEA: XBRL DOCUMENT - ESCALADE INCFinancial_Report.xls
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10-Q - QUARTERLY REPORT - ESCALADE INCv325530_10q.htm
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EX-32.2 - EXHIBIT 32.2 - ESCALADE INCv325530_ex32-2.htm
EX-31.2 - EXHIBIT 31.2 - ESCALADE INCv325530_ex31-2.htm
EX-32.1 - EXHIBIT 32.1 - ESCALADE INCv325530_ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - ESCALADE INCv325530_ex31-1.htm
v2.4.0.6
Acquired Intangible Assets and Goodwill
9 Months Ended
Oct. 06, 2012
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure [Text Block]

Note E – Acquired Intangible Assets and Goodwill

 

All goodwill is allocated to the operating segments of the business. The changes in the carrying amount of goodwill were:

In thousands Sporting
Goods
Information
Security and
Print
Finishing
Total
Goodwill $ 12,017 $ 13,380 $ 25,397
Accumulated impairment losses
Balance at December 26, 2010 12,017 13,380 25,397
Foreign currency translation adjustment 249 249
Balance at October 1, 2011 12,017 13,629 25,646
Foreign currency translation adjustment (361 ) (361 )
Balance at December 31, 2011 12,017 13,268 25,285
Impairment losses (13,187 ) (13,187 )
Foreign currency translation adjustment (81 ) (81 )
Balance at October 6, 2012 12,017 12,017
Goodwill 12,017 13,187 25,204
Accumulated impairment losses (13,187 ) (13,187 )
Balance at October 6, 2012 $ 12,017 $ $ 12,017

 

The Company reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The goodwill impairment test involves a two-step process. In the first step, the Company compares the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value, the Company must perform the second step of the impairment test to measure the amount of impairment loss. In the second step, the reporting unit’s fair value is allocated to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit’s goodwill is less than the carrying value, the difference is recorded as an impairment loss.

 

During the third quarter of fiscal 2012, the Company determined that sufficient indicators of potential impairment existed to require an interim goodwill impairment analysis for the Martin Yale Group reporting unit, which comprises the Information Security and Print Finishing operating segment. These indicators included lower than expected operating profits and cash flows for the first nine months of 2012, coupled with continued economic weakness in the European and Asian markets.

 

Based on this continuing trend, the earnings forecast for the next five years was revised resulting in a goodwill impairment loss of $13.2 million in the quarter. In addition, the Company recorded an intangible asset impairment for this segment related to other intangibles of $0.2 million. Refer to Note I for detailed discussion of the methodology used to estimate fair value of goodwill and intangible assets as of October 6, 2012.

The goodwill impairment loss reduces to zero the carrying value of goodwill recorded as part of various international acquisitions in the Information Security and Print Finishing segment for purchases from 2003 through 2008.