Note 8 - Goodwill and Other Intangible Assets

12 Months Ended

Nov. 28, 2020

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

8. Goodwill and Other Intangible Assets

Goodwill and other intangible assets consisted of the following:

	November 28, 2020
	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net
Intangibles subject to amortization:
Customer relationships	$	3,550	$	(1,346	)	$	2,204
Technology - customized applications		834		(695	)		139
Total intangible assets subject to amortization	$	4,384	$	(2,041	)		2,343
Intangibles not subject to amortization:
Trade names							9,338
Goodwill							12,146
Total goodwill and other intangible assets						$	23,827

	November 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net
Intangibles subject to amortization:
Customer relationships	$	3,550	$	(1,088	)	$	2,462
Technology - customized applications		834		(575	)		259
Total intangible assets subject to amortization	$	4,384	$	(1,663	)		2,721
Intangibles not subject to amortization:
Trade names							9,338
Goodwill							14,117
Total goodwill and other intangible assets						$	26,176

Due to the impact of the COVID-19 pandemic, we performed an interim impairment assessment of our remaining goodwill as of May 30, 2020, then end of our second fiscal quarter. As a result of this test, we concluded that the carrying value of our wood reporting unit exceeded its fair value by an amount in excess of the goodwill previously allocated to the reporting unit. Therefore, we recognized a goodwill impairment charge of $1,971 for year ended November 28, 2020. Our annual goodwill impairment test, conducted as of the beginning of our fourth fiscal quarter, resulted in no additional impairment.

The determination of the fair value of our reporting units is based on a combination of a market approach, that considers benchmark company market multiples, and an income approach, that utilizes discounted cash flows for each reporting unit and other Level 3 inputs as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosure (see Note 4). Under the income approach, we determine fair value based on the present value of the most recent cash flow projections for each reporting unit as of the date of the analysis and calculate a terminal value utilizing a terminal growth rate. The significant assumptions under this approach include, among others: income projections, which are dependent on future sales, new product introductions, customer behavior, competitor pricing, operating expenses, the discount rate, and the terminal growth rate. The cash flows used to determine fair value are dependent on a number of significant management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based upon our historical experience. Our estimates are subject to change given the inherent uncertainty in predicting future results. Additionally, the discount rate and the terminal growth rate are based on our judgment of the rates that would be utilized by a hypothetical market participant. As part of the goodwill impairment testing, we also consider our market capitalization in assessing the reasonableness of the combined fair values estimated for our reporting units.

Changes in the carrying amounts of goodwill by reportable segment were as follows:

	Wholesale			Retail			Logistics		Total
Balance as of November 24, 2018	$	9,188		$	1,926		$	4,929	$	16,043
Goodwill impairment		-			(1,926	)		-		(1,926	)
Balance as of November 30, 2019		9,188			-			4,929		14,117
Goodwill impairment		(1,971	)		-			-		(1,971	)
Balance as of November 28, 2020	$	7,217		$	-		$	4,929	$	12,146

Accumulated impairment losses at November 28, 2020 and November 30, 2019 were $3,897 and $1,926, respectively. There were no accumulated impairment losses on goodwill as of November 24, 2018.

The weighted average useful lives of our finite-lived intangible assets and remaining amortization periods as of November 28, 2020 are as follows:

	Useful Life in Years		Remaining Amortization Period in Years
Customer relationships		14		9
Technology - customized applications		7		1

Amortization expense associated with intangible assets during fiscal 2020, 2019 and 2018 was $379, $379 and $374, respectively and is included in selling, general and administrative expense in our consolidated statement of operations. All expense arising from the amortization of intangible assets is associated with our logistical services segment except for $57, $57 and $51 in fiscal 2020, 2019 and 2018, respectively, associated with our wholesale segment arising from Lane Venture (Note 3). Estimated future amortization expense for intangible assets that exist at November 28, 2020 is as follows:

Fiscal 2021	$	378
Fiscal 2022		279
Fiscal 2023		259
Fiscal 2024		259
Fiscal 2025		259
Thereafter		909
Total	$	2,343