Annual report pursuant to Section 13 and 15(d)

Intangible Assets

v3.3.1.900
Intangible Assets
12 Months Ended
Jan. 02, 2016
Intangible Assets [Abstract]  
Intangible Assets

NOTE F – INTANGIBLE ASSETS

 

The Company performed its annual goodwill impairment test during the third quarter of 2015. The Company performed a qualitative assessment of each reporting unit and determined that is was not more-likely-than-not that the fair value of any reporting unit was less than its carrying amount. As a result, the two-step goodwill impairment test was not required and no impairments of goodwill were recognized in 2015.

 

The Company also performed its annual indefinite-lived intangible asset impairment test during the third quarter of 2015. The Company performed a qualitative assessment of the indefinite-lived intangible assets and determined that is was not more-likely-than-not that the fair value of any indefinite-lived intangible asset was less than the carrying amount. As a result, the quantitative impairment test was not required and no impairments of indefinite-lived intangible assets were recognized in 2015.

 

The changes in the carrying amount of goodwill are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 3,

 

January 2,

 

 

 

2015

 

2016

 

 

 

 

 

 

 

Balance at beginning of year:

 

 

 

 

 

Gross goodwill

 

$             18,243

 

$             17,941

 

Accumulated impairment losses

 

 -

 

 -

 

Net goodwill as of beginning of year

 

18,243 

 

17,941 

 

 

 

 

 

 

 

Goodwill acquired during the year

 

 -

 

 -

 

Impairment loss

 

 -

 

 -

 

Currency translation adjustment

 

(302)

 

(509)

 

 

 

 

 

 

 

Balance as of end of year

 

 

 

 

 

Gross goodwill

 

17,941 

 

17,432 

 

Accumulated impairment losses

 

 -

 

 -

 

Net goodwill as of end of year

 

$             17,941

 

$             17,432

 

 

 

 

 

 

 

 

Historically, the indefinite-lived intangible assets included the BabyCare direct sales license and BabyCare product formulas.  The Company evaluates the remaining useful life of the indefinite-lived intangible assets each reporting period to determine whether events and circumstances continue to support an indefinite useful life.  During the third quarter of 2015, a process was initiated in China to approve additional USANA products, which will limit the life of certain of the acquired BabyCare product formulas.  As a result, the product formulas intangible asset was determined to no longer have an indefinite life.  Accordingly, the Company began amortization of the product formulas intangible asset on a straight-line basis over its estimated remaining useful life of 8 years.  Upon determining that the product formulas intangible asset no longer has an indefinite life, it was tested for impairment and no impairment was noted.

NOTE F – INTANGIBLE ASSETS – CONTINUED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of  January 3, 2015

 

 

 

 

 

 

 

 

 

 

Weighted-average

 

 

Gross carrying

 

Accumulated

 

Net carrying

 

amortization

 

 

amount

 

amortization

 

amount

 

period (years)

 

 

 

 

 

 

 

 

 

Amortized intangible assets

 

 

 

 

 

 

 

 

Trade name and trademarks

 

$              4,274

 

$            (1,898)

 

$              2,376

 

10

 

 

 

 

 

 

 

 

 

Indefinite-lived intangible assets

 

 

 

 

 

 

 

 

Product formulas

 

9,425 

 

 

 

9,425 

 

 

Direct sales license

 

29,151 

 

 

 

29,151 

 

 

 

 

 

 

 

 

 

 

 

 

 

38,576 

 

 

 

38,576 

 

 

 

 

 

 

 

 

 

 

 

 

 

$            42,850

 

 

 

$            40,952

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of  January 2, 2016

 

 

 

 

 

 

 

 

 

 

 

Weighted-average

 

 

 

Gross carrying

 

Accumulated

 

Net carrying

 

amortization

 

 

 

amount

 

amortization

 

amount

 

period (years)

 

 

 

 

 

 

 

 

 

 

 

Amortized intangible assets

 

 

 

 

 

 

 

 

 

Trade name and trademarks

 

$                                          4,086

 

$                  (2,205)

 

$             1,881

 

10

 

Product formulas

 

9,010 

 

(489)

 

8,521 

 

8

 

 

 

 

 

 

 

 

 

 

 

Indefinite-lived intangible assets

 

 

 

 

 

 

 

 

 

Direct sales license

 

27,867 

 

 

 

27,867 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$                                        40,963

 

 

 

$           38,269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Amortization Expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

1,535 

 

 

 

 

 

 

 

2017

 

1,535 

 

 

 

 

 

 

 

2018

 

1,535 

 

 

 

 

 

 

 

2019

 

1,535 

 

 

 

 

 

 

 

2020

 

1,378 

 

 

 

 

 

 

 

Thereafter

 

2,884 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$                                        10,402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregate amortization of intangible assets for the years ended 2013, 2014, and 2015 was $897,  $431, and $900, respectively.