Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Goodwill and Intangible Assets

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Note 6 - Goodwill and Intangible Assets
9 Months Ended
Jan. 01, 2017
Notes to Financial Statements  
Goodwill and Intangible Assets Disclosure [Text Block]
NOTE
6.
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 when 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
single operating segment and
one
chief operating decision maker, our Chief Executive Officer (“CEO”), we assess goodwill for impairment at the enterprise level.
 
As of
July
3,
2016,
we performed a goodwill impairment analysis and concluded that that the goodwill remaining in the portion of the reporting unit to be retained was not impaired.
 
Intangible Assets
 
Our purchased intangible assets for continued operations as of the dates indicated below were as follows (in thousands):
 
 
 
January 1, 2017
 
 
March 27, 2016
 
 
 
Carrying Amount
 
 
Accumulated Amortization
 
 
Net
Carrying Amount
 
 
Weighted Average Life
 
 
Carrying Amount
 
 
Accumulated Amortization
 
 
Net
Carrying Amount
 
 
Weighted Average Life
 
Amortized intangible assets:
                                                               
Existing technology
  $
53,878
    $
(45,292
)   $
8,586
     
3.9
    $
53,878
    $
(43,502
)   $
10,376
     
4.6
 
Customer relationships
   
5,225
     
(4,209
)    
1,016
     
3.0
     
5,225
     
(3,890
)    
1,335
     
3.6
 
Distributor relationships
   
1,264
     
(1,264
)    
-
     
-
     
1,264
     
(1,261
)    
3
     
-
 
Patents/Core technology
   
3,459
     
(3,459
)    
-
     
-
     
3,459
     
(3,459
)    
-
     
-
 
Trade names
   
210
     
(210
)    
-
     
-
     
210
     
(189
)    
21
     
-
 
Total
  $
64,036
    $
(54,434
)   $
9,602
     
 
    $
64,036
    $
(52,301
)   $
11,735
     
 
 
 
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. Customer relationships are amortized over
five
to
seven
years. Distributor relationships are amortized over
seven
years. Patents/core technology is amortized over
six
years. Trade names are amortized over
three
to
six
years. 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 business circumstances indicate that the carrying amount of the assets (or asset group)
may
not be fully recoverable. Whenever events or changes in circumstances suggest that the carrying amount of long-lived assets
may
not be recoverable, we estimate the future cash flows expected to be generated by the assets (or asset group) from its use or eventual disposition. If the sum of the expected future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets which is derived using a discounted cash flow model. Significant management judgment is required in the grouping of long-lived assets and forecasts of future operating results that are used in the discounted cash flow method of valuation. If our actual results or the plans and estimates used in future impairment analyses are lower than the original estimates used to assess the recoverability of these assets, we could incur additional impairment charges.
 
During the
three
and
nine
months ended
January
1,
2017
and
December
27,
2015,
there were no indicators or events that required us to perform an intangible assets impairment review for intangibles from our continuing operations. 
 
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
 
 
 
January 1,
 
 
December 27,
 
 
January 1,
 
 
December 27,
 
 
 
2017
 
 
2015
 
 
2017
 
 
2015
 
Amortization expense
  $
705
    $
723
    $
2,133
    $
2,238
 
 
 The total future amortization expenses for our purchased intangible assets are summarized below (in thousands):
 
Amortization Expense (by fiscal year)
 
2017 (3 months remaining)
  $
705
 
2018
   
2,802
 
2019
   
2,488
 
2020
   
1,989
 
2021
   
1,325
 
2022 and thereafter
   
293
 
Total future amortization
  $
9,602