Goodwill and Intangibles

9 Months Ended

Sep. 30, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

11.

GOODWILL AND INTANGIBLES

The following tables summarize the changes in the Company’s intangible assets as of December 31, 2021 and September 30, 2022 (in thousands):


	December 31, 2020		For the year ended December 31, 2021					December 31, 2021
	Gross Carrying Amount		Additions		Impairments			Net Book Value
Goodwill	$	47,318	$	72,623	$	—		$	119,941
-

	December 31, 2021		Nine Months Ended September 30, 2022					September 30, 2022
	Gross Carrying Amount		Additions		Impairments (1)			Net Book Value
Goodwill	$	119,941	$	—	$	(119,941	)	$	—

(1)

The Company evaluated current economic conditions during the third quarter of 2022, including the impact of the Federal Reserve further increasing the risk-free interest rate, as well as the inflationary pressure on product and labor costs and operational impacts attributable to continued global supply chain disruptions. The Company believes that these conditions were factors in our market capitalization falling below the book value of net assets as of September 30, 2022. Accordingly, the Company concluded a triggering event had occurred and performed interim goodwill impairment analyses determining that our goodwill was fully impaired as of September 30, 2022. As a result, the Company recorded a goodwill impairment charge of approximately $90.9 million in the three months ended September 30, 2022. The Company also had a triggering event during the three months ended March 31, 2022 and recorded an impairment charge of $29.0 million. For the nine months ended September 30, 2022, total goodwill impairment was approximately $119.9 million.

The following tables summarize the changes in the Company’s intangible assets as of December 31, 2021 and September 30, 2022 (in thousands):


	December 31, 2020		For the year ended December 31, 2021								December 31, 2021
	Gross Carrying Amount		Additions		Impairments			Accumulated Amortization			Net Book Value
Trademarks	$	31,810	$	34,100	$	—		$	(6,332	)	$	59,578
Non-competition agreement		111		—		—			(54	)		57
Transition services agreement		23		—		—			(23	)		—
Customer relations		—		5,700		—			(380	)		5,320
Other		—		700		—			(700	)		—
Total intangibles	$	31,944	$	40,500	$	—		$	(7,489	)	$	64,955

	December 31, 2021		Nine Months Ended September 30, 2022								September 30, 2022
	Gross Carrying Amount		Additions		Impairments (1)			Accumulated Amortization			Net Book Value
Trademarks	$	65,910	$	—	$	(3,087	)	$	(11,450	)	$	51,373
Non-competition agreement		111		—		(31	)		(80	)		—
Transition services agreement		23		—		—			(23	)		—
Customer relations		5,700		—		—			(808	)		4,892
Other		700		—		—			(700	)		—
Total intangibles	$	72,444	$	—	$	(3,118	)	$	(13,061	)	$	56,265

(1) Certain asset groups experienced a significant decrease in sales and contribution margin through September 30, 2022. This was considered an interim triggering event for the three months ended September 30, 2022. Based on the analysis of comparing the undiscounted cash flow to the carrying value of the asset group, one group tested indicated that the assets may not be recoverable. For this asset group, the Company compared the fair value to the carrying amount of the asset group and recorded an intangible impairment charge of $3.1 million in the three months ended September 30, 2022.

The following table sets forth the estimated aggregate amortization of the Company’s intangible assets for the next five years and thereafter (amounts in thousands):


Remainder of 2022	$	1,701
2023		6,802
2024		6,781
2025		6,740
2026		6,740
Thereafter		27,501
Total	$	56,265