Annual report pursuant to Section 13 and 15(d)

GOODWILL AND INTANGIBLE ASSETS

v3.19.1
GOODWILL AND INTANGIBLE ASSETS
12 Months Ended
Feb. 02, 2019
GOODWILL AND INTANGIBLE ASSETS  
GOODWILL AND INTANGIBLE ASSETS

5. GOODWILL AND INTANGIBLE ASSETS

 

The gross carrying amounts and accumulated amortization of our intangible assets are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

February 2, 2019

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining

 

 

 

 

Accumulated

 

 

 

 

 

Amortization

 

Amortization

 

Gross

 

Amortization/

 

Net

 

 

Period

 

Period

 

Carrying

 

Impairment

 

Carrying

 

 

(in years)

 

(in years)

 

Amount

 

Charges

 

Value

Definite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

16-18

 

14.95

 

$

5,600

 

$

(1,789)

 

$

3,811

Proprietary product designs

 

7

 

3.99

 

 

3,400

 

 

(2,633)

 

 

767

Other intangible assets

 

4-21

 

11.71

 

 

4,229

 

 

(2,794)

 

 

1,435

 

 

 

 

 

 

 

 

 

13,229

 

 

(7,216)

 

 

6,013

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product tradenames

 

 

 

 

 

 

 

 

13,725

 

 

(2,500)

 

 

11,225

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total intangible assets

 

 

 

 

 

 

 

$

26,954

 

$

(9,716)

 

$

17,238

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

February 3, 2018

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining

 

 

 

 

Accumulated

 

 

 

 

 

Amortization

 

Amortization

 

Gross

 

Amortization/

 

Net

 

 

Period

 

Period

 

Carrying

 

Impairment

 

Carrying

 

 

(in years)

 

(in years)

 

Amount

 

Charges

 

Value

Definite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

16-18

 

15.94

 

$

5,600

 

$

(1,278)

 

$

4,322

Proprietary product designs

 

7

 

5.00

 

 

3,400

 

 

(1,750)

 

 

1,650

Other intangible assets

 

2-23

 

10.62

 

 

4,229

 

 

(2,157)

 

 

2,072

 

 

 

 

 

 

 

 

 

13,229

 

 

(5,185)

 

 

8,044

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product tradenames

 

 

 

 

 

 

 

 

13,725

 

 

 

 

 

13,725

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total intangible assets

 

 

 

 

 

 

 

$

26,954

 

$

(5,185)

 

$

21,769

 

In fiscal 2018, fiscal 2017 and fiscal 2016, we recognized amortization expense of $1.6 million, $1.9 million and $2.4 million, respectively, related to definite-lived intangible assets. As of February 2, 2019, the amortization expense related to our definite-lived intangible assets for the next five years will be approximately $0.5 million to $1.0 million each year.

 

On February 2, 2016, we acquired Lamrite West, Inc. and certain of its affiliates and subsidiaries (“Lamrite”) for $151.1 million, net of certain purchase price adjustments. Lamrite operated an international wholesale business under the Darice brand name and 36 arts and crafts retail stores under the Pat Catan’s brand name. In January 2019, we closed all 36 of our Pat Catan’s stores. As a result of the store closures, we recorded a $7.0 million impairment charge related to goodwill and a $3.0 million impairment charge primarily related to product tradenames. These amounts are included in restructure charges in our consolidated statements of comprehensive income.

 

As of February 2, 2019, goodwill totaled $112.1 million, including $94.3 million related to Michaels-U.S. and $17.8 million related to the acquisition of Lamrite on February 2, 2016.