GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Mar. 29, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

5. GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the three months ended March 29, 2020 by segment are as follows:

(thousands)	Manufacturing		Distribution		Total
Balance - December 31, 2019	$	268,402	$	50,947	$	319,349
Acquisitions	5,787		—		5,787
Adjustments to preliminary purchase price allocations	780		—		780
Balance - March 29, 2020	$	274,969	$	50,947	$	325,916

Intangible assets, net consist of the following as of March 29, 2020 and December 31, 2019:

(thousands)	March 29, 2020			Weighted Average Useful Life (in years)	December 31, 2019			Weighted Average Useful Life (in years)
Customer relationships	$	365,693		10.1	$	357,513		10.1
Non-compete agreements	16,262			5.0	16,202			5.0
Patents	16,495			14.6	16,495			14.6
Trademarks	89,504			Indefinite	88,524			Indefinite
	487,954				478,734
Less: accumulated amortization	(131,321		)		(121,720		)
Intangible assets, net	$	356,633			$	357,014

Changes in the carrying value of intangible assets for the three months ended March 29, 2020 by segment are as follows:

(thousands)	Manufacturing			Distribution			Total
Balance - December 31, 2019	$	282,123		$	74,891		$	357,014
Acquisitions	9,220			—			9,220
Amortization	(7,833		)	(1,768		)	(9,601		)
Adjustments to preliminary purchase price allocations	—			—			—
Balance - March 29, 2020	$	283,510		$	73,123		$	356,633

Valuation of Goodwill and Indefinite-Lived Intangibles

We test goodwill and indefinite-lived intangible assets (trademarks) for impairment on an annual basis (as of September 30, 2019 for our most recent annual tests) and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. Our 2019 tests indicated that there was no impairment, as fair value exceeded carrying values, and we concluded that none of our reporting units or trademarks were at risk of failing the impairment test.

Despite the excess fair value identified in our 2019 impairment tests, we assessed during the quarter ended March 29, 2020 whether the impact of the COVID-19 pandemic on overall macroeconomic conditions and the global equity markets, which negatively affected the Company’s market capitalization, indicated that at March 29, 2020 it was more likely than not that our goodwill and trademarks were impaired. We evaluated amongst other factors (1) the results of our 2019 impairment tests; (2) our market capitalization at March 29, 2020 in relation to the carrying amount of shareholders’ equity at March 29, 2020 and to fair values determined during our 2019 impairment tests; (3) the results of our operations during the quarter ended March 29, 2020 in relation to our projections; and (4) our analysis of the impact on the fair values determined during our 2019 impairment tests using more recent projections and discount rates that account for various risks and uncertainties, including the duration and extent of impact to our business, related to the COVID-19 pandemic.

Based on the results of our assessment, we determined it was more likely than not that our goodwill and trademarks were not impaired as of March 29, 2020. However, we are unable to predict how long the COVID-19-related conditions will persist, what additional measures may be introduced by governments or private parties, or what effect any such additional measures may have on demand for our products or those of our customers in each of our end markets. As such, we may be required to perform quantitative impairment tests in future periods preceding our annual impairment test date, and the outcome of such tests could result in an impairment of our goodwill or our trademarks.