GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 28, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

Amortized Intangible Assets

The components of amortized intangible assets at September 28, 2019 and December 29, 2018 were as follows:

	September 28, 2019
	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	$	236,029	$	143,306	13 years
Patents & Proprietary Technology	22,936		5,945		14 years
Other	7,494		6,886		5 years
	$	266,459	$	156,137

	December 29, 2018
	Gross Carrying Amount		Accumulated Amortization		Weighted Average Life
Customer Relationships	$	219,508	$	132,180	13 years
Patents & Proprietary Technology	23,662		4,837		14 years
Other	7,971		6,891		5 years
	$	251,141	$	143,908

Amortization expense for intangible assets for the thirteen and thirty-nine weeks ended September 28, 2019 and September 29, 2018, respectively was as follows:

Thirteen weeks ended				Thirty-nine weeks ended
2019		2018		2019		2018
$	4,484	$	3,721	$	13,506	$	11,176

Estimated annual amortization expense related to finite‑lived intangible assets is as follows:

	Estimated Amortization Expense
2019	$	17,687
2020	17,821
2021	15,523
2022	13,286
2023	11,594

The useful lives assigned to finite‑lived intangible assets included consideration of factors such as the Company’s past and expected experience related to customer retention rates, the remaining legal or contractual life of the underlying arrangement that resulted in the recognition of the intangible asset and the Company’s expected use of the intangible asset.

(5) GOODWILL AND INTANGIBLE ASSETS (Continued)

Non-amortized intangible assets

Intangible assets with indefinite lives are not amortized and consist solely of trade names. The carrying value of trade names at September 28, 2019 and December 29, 2018 are as follows:

	September 28, 2019		December 29, 2018		Year Acquired
Newmark	$	11,111	$	11,111	2004
Webforge	8,587		8,872		2010
Convert Italia S.p.A	8,203		8,580		2018
Valmont SM	7,799		8,155		2014
Ingal EPS/Ingal Civil Products	7,001		7,233		2010
Walpar	3,500		4,300		2018
Shakespeare	4,000		4,000		2014
Other	17,211		16,472
	$	67,412	$	68,723

In its determination of these intangible assets as indefinite‑lived, the Company considered such factors as its expected future use of the intangible asset, legal, regulatory, technological and competitive factors that may impact the useful life or value of the intangible asset and the expected costs to maintain the value of the intangible asset. The Company expects that these intangible assets will maintain their value indefinitely. Accordingly, these assets are not amortized.    

The Company’s trade names were tested for impairment in the third quarter of 2019. The values of each trade name was determined using the relief-from-royalty method. Based on this evaluation, no trade names were determined to be impaired. The Company recorded a charge of $1,425 in the third quarter of 2018 for the offshore and other complex steel structures (Valmont SM) trade name.

Goodwill

The carrying amount of goodwill by segment as of September 28, 2019 and December 29, 2018 was as follows:

	Engineered Support Structures Segment			Utility Support Structures Segment			Coatings Segment			Irrigation Segment		Total
Gross Balance December 29, 2018	$	204,735		$	123,618		$	80,937		$	25,164	$	434,454
Accumulated impairment losses	(18,670		)	(14,355		)	(16,222		)	—		(49,247		)
Balance at December 29, 2018	186,065			109,263			64,715			25,164		385,207
Acquisitions	21,043			7,889			11,715			—		40,647
Foreign currency translation	(2,652		)	(1,758		)	(133		)	368		(4,175		)
Balance at September 28, 2019	$	204,456		$	115,394		$	76,297		$	25,532	$	421,679

(5) GOODWILL AND INTANGIBLE ASSETS (Continued)

The Company’s annual impairment test of goodwill was performed during the third quarter of 2019, using the discounted cash flow method. The estimated fair value of all of our reporting units exceeded their respective carrying value, so no goodwill was impaired. The access systems reporting unit with $43,400 of goodwill, is the reporting unit that did not have a substantial excess of estimated fair value over its carrying value. The model assumes geographic expansion of its architectural product lines which realized recent organic growth in its existing market. If architectural systems sales do not increase, the Company will be required to perform an interim test of goodwill. A hypothetical 1.0% change in the discount rate would increase/decrease the fair value of this reporting unit by approximately $15,000, which approximates the cushion between the estimated fair value and carrying value of this reporting unit. In the third quarter of 2018, the Company recognized a goodwill impairment totaling $14,355, which represented all of the goodwill of the offshore and other complex steel reporting unit.