Crown Crafts, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Note 7 - Goodwill, Customer Relationships and Other Intangible Assets

Note 7 - Goodwill, Customer Relationships and Other Intangible Assets

6 Months Ended

Oct. 02, 2011

Goodwill and Intangible Assets Disclosure [Text Block]

Note 7 – Goodwill, Customer Relationships and Other Intangible Assets

Goodwill: The Company reported goodwill of $1.1 million at April 3, 2011 and October 2, 2011. The Company tests the fair value of the goodwill of its reporting units annually as of the first day of the Company’s fiscal year. An additional interim impairment test is performed during the year whenever an event or change in circumstances occurs that suggests that the fair value of the goodwill of either of the reporting units of the Company has more likely than not fallen below its carrying value. The annual or interim impairment test is performed in a two-step approach. The first step is the estimation of the fair value of each reporting unit to ensure that its fair value exceeds its carrying value. If step one indicates that a potential impairment exists, then the second step is performed to measure the amount of an impairment charge, if any. In the second step, these estimated fair values are used as the hypothetical purchase price for the reporting units, and an allocation of such hypothetical purchase price is made to the identifiable tangible and intangible assets and assigned liabilities of the reporting units. The impairment charge is calculated as the amount, if any, by which the carrying value of the goodwill exceeds the implied amount of goodwill that results from this hypothetical purchase price allocation.

The annual impairment test of the fair value of the goodwill of the reporting units of the Company was performed as of April 4, 2011, and the Company concluded that the fair value of the goodwill of the Company’s reporting units exceeded their carrying values as of that date.

Other Intangible Assets: Other intangible assets at October 2, 2011 consisted primarily of the capitalized costs of recent acquisitions, other than tangible assets, goodwill and assumed liabilities. The carrying amount and accumulated amortization of the Company’s other intangible assets as of October 2, 2011, their estimated useful life and amortization expense for the three and six-month periods ended October 2, 2011 and September 26, 2010 are as follows (dollar amounts in thousands):

							Amortization Expense
				Estimated			Three-month Periods Ended				Six-month Periods Ended
		Carrying Amount		Useful Life	Accumulated Amortization		October 2, 2011		September 26, 2010		October 2, 2011		September 26, 2010

Kimberly Grant Acquisition on December 29, 2006:
	Tradename	$	466	15 years	$	148	$	8	$	8	$	16	$	16
	Existing designs		36	1 year		36		-		-		-		-
	Non-compete covenant		98	15 years		31		1		1		3		3
Total Kimberly Grant Acquisition			600	14 years *		215		9		9		19		19

Springs Baby Products Acquisition on November 5, 2007:
	Licenses & existing designs		1,655	2 years		1,655		-		-		-		-
	Licenses & future designs		1,847	4 years		1,808		115		116		230		231
	Non-compete covenant		115	4 years		112		7		8		14		15
	Customer relationships		3,781	10 years		1,482		95		94		190		189
Total Springs Baby Acquisition			7,398	7 years *		5,057		217		218		434		435

Neat Solutions Acquisition on July 2, 2009:
	Trademarks		892	15 years		134		15		14		30		29
	Designs		33	4 years		18		2		3		4		5
	Non-compete covenant		241	5 years		108		12		12		24		24
	Customer relationships		1,302	16 years		183		21		21		41		41
Total Neat Solutions Acquisition			2,468	14 years *		443		50		50		99		99

Bibsters® Acquistion on May 27, 2010:
	Trademarks		629	15 years		56		11		10		21		14
	Patents		553	10 years		74		14		13		28		18
	Customer relationships		328	14 years		32		6		6		12		8
Total Bibsters® Acquistion			1,510	13 years *		162		31		29		61		40
Internally developed intangible assets			133	10 years		30		2		3		4		5
	Total other intangible assets	$	12,109		$	5,907	$	309	$	309	$	617	$	598

* Weighted-Average

- 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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