Crown Crafts, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 7 - Goodwill and Other Intangible Assets

Note 7 - Goodwill and Other Intangible Assets

12 Months Ended

Apr. 01, 2012

Goodwill and Intangible Assets Disclosure [Text Block]

Note 7 – Goodwill and Other Intangible Assets

Goodwill: The Company reported goodwill of $1.1 million at April 1, 2012 and April 3, 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 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. An additional interim impairment test must be performed during the year whenever an event or change in circumstances occurs that suggest 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 Company performed the annual impairment test as of April 4, 2011 and concluded that the fair value of the goodwill of the Company’s reporting units exceeded their carrying values as of that date. The Company determined that an additional interim impairment test was not required.

Other Intangible Assets: Other intangible assets as of April 1, 2012 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 April 1, 2012, their estimated useful life and amortization expense for the fiscal years ended April 1, 2012 and April 3, 2011 are as follows (in thousands):

			Estimated			Amortization Expense
	Carrying		Useful	Accumulated		Fiscal Year Ended
	Amount		Life	Amortization		April 1, 2012		April 3, 2011

Kimberly Grant Acquisition on December 29, 2006:
Tradename	$	466	15 years	$	163	$	31	$	31
Existing designs		36	1 year		36		-		-
Non-compete covenant		98	15 years		34		6		7
Total Kimberly Grant Acquisition		600	14 years *		233		37		38

Springs Baby Products Acquisition on November 5, 2007:
Licenses & existing designs		1,655	2 years		1,655		-		-
Licenses & future designs		1,847	4 years		1,847		269		462
Non-compete covenant		115	4 years		115		17		29
Customer relationships		3,781	10 years		1,670		378		378
Total Springs Baby Acquisition		7,398	7 years *		5,287		664		869

Neat Solutions Acquisition on July 2, 2009:
Trademarks		892	15 years		164		60		59
Designs		33	4 years		23		9		8
Non-compete covenant		241	5 years		132		48		48
Customer relationships		1,302	16 years		223		81		81
Total Neat Solutions Acquisition		2,468	14 years *		542		198		196

Bibsters® Acquistion on May 27, 2010:
Trademarks		629	15 years		77		42		35
Patents		553	10 years		101		55		46
Customer relationships		328	14 years		43		23		20
Total Bibsters® Acquistion		1,510	13 years *		221		120		101
Internally developed intangible assets		293	10 years		14		38		20
Total other intangible assets	$	12,269		$	6,297	$	1,057	$	1,224

* Weighted-Average

The table below sets forth estimated amortization expense for the following fiscal years (in thousands):

	2013		2014		2015		2016		2017
Kimberly Grant Acquisition:
Tradename	$	31	$	31	$	31	$	31	$	31
Non-compete covenant		7		7		7		7		7
Total Kimberly Grant Acquisition		38		38		38		38		38

Springs Baby Products Acquisition:
Customer relationships		378		378		378		378		378
Total Springs Baby Acquisition		378		378		378		378		378

Neat Solutions Acquisition:
Trademarks		60		60		60		60		60
Designs		8		2		-		-		-
Non-compete covenant		48		48		13		-		-
Customer relationships		81		81		81		81		81
Total Neat Solutions Acquisition		197		191		154		141		141

Bibsters® Acquistion:
Trademarks		42		42		42		42		42
Patents		55		55		55		55		55
Customer relationships		23		23		23		23		23
Total Bibsters® Acquistion		120		120		120		120		120
Internally developed intangible assets		29		29		29		29		29
Total other intangible assets	$	762	$	756	$	719	$	706	$	706

- 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.

+ References + Details