Goodwill and Other Intangible Assets

6 Months Ended

Jul. 02, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and intangible assets are as follows:

							Initial
	July 2,			January 2,			Useful Life
	2022			2021			(in years)
	(in thousands)
Goodwill	$	372,652		$	364,598		indefinite
Other intangible assets:
Trade names (indefinite-lived)	$	208,441		$	212,141		indefinite
Customer relationships and customer-related assets		286,947			289,047		<1-15
Trade name (amortizable)		22,200			22,200		15
Developed technology		5,900			5,900		6-10
Non-compete agreement		3,338			3,338		2-5
Software license		590			590		2
Less: Accumulated amortization		(152,615	)		(138,691	)
Subtotal		166,360			182,384
Other intangible assets, net	$	374,801		$	394,525
Goodwill at January 1, 2022	$	364,598
Increase in Anlin Acquisition contingent consideration		789
Decrease in Anlin Acquisition trade name		3,700
Decrease in Anlin Acquisition customer relationships		4,300
Increase in Anlin Acquisition customer-related backlog asset		(2,200	)
Final net working capital payment in Anlin Acquisition		786
Estimated contingent consideration in Eco Acquisition		1,500
Net other measurement period changes in Anlin Acquisition		(821	)
Goodwill at July 2, 2022	$	372,652
Trade names (indefinite-lived) at January 1, 2022	$	212,141
Decrease in Anlin Acquisition trade name		(3,700	)
Trade names (indefinite-lived) at July 2, 2022	$	208,441

Estimated amortization of our amortizable intangible assets for future years is as follows:

(in thousands)	Total
Remainder of 2022	$	10,963
2023		20,520
2024		20,474
2025		20,299
2026		16,906
Thereafter		77,198
Total	$	166,360

Amortization expense relating to amortizable intangible assets for the three months ended July 2, 2022 and July 3, 2021, was $5.9 million and $5.1 million, respectively. Amortization expense relating to amortizable intangible assets for the six months ended July 2, 2022 and July 3, 2021, was $13.9 million and $9.9 million, respectively. See Note 6 for discussion of the amortization of the customer-related backlog asset of $2.2 million during the six-month period ended July 2, 2022.

We perform our annual goodwill and indefinite-lived intangible asset impairment testing on the first day of our fiscal fourth quarter of each year, and at interim periods if needed based on occurrence of triggering events. During the six months ended July 2, 2022, we did not identify any events which we believe would trigger the need for tests for impairments of our indefinite-lived intangibles assets. As of July 2, 2022 and January 1, 2022, the carrying value of our Southeast reporting unit goodwill is $228.3 million and $226.8 million, respectively. As of July 2, 2022 and January 1, 2022, the carrying value of our Western reporting unit goodwill is $144.4 million and $137.8 million, respectively. Goodwill of our Southeast reporting unit includes the goodwill relating to Eco. Goodwill of our Western reporting unit includes the goodwill relating to both Anlin and CRi.