XML 26 R13.htm IDEA: XBRL DOCUMENT

Note 6 - Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2023

NOTE 6 - Goodwill and Intangible Assets:

Goodwill

Beginning in the second quarter of 2022, the Company realigned its reportable segments to Branded Products, Healthcare Apparel and Contact Centers. Refer to Note 17 for further information on the Company’s reportable segments. As a result of this re-segmentation, and in accordance with ASC 350, the Company performed a quantitative goodwill impairment test.

During the third quarter of 2022, the Company determined that a triggering event occurred in relation to the depressed market price of the Company’s common stock and corresponding significant decline in the Company’s market capitalization. As a result, the Company performed a quantitative goodwill impairment test.

The fair value of goodwill in each impairment test was determined using a combination of an income approach, which estimates fair value based upon projections of future revenues, expenses, and cash flows discounted to their respective present values, and a market approach. The valuation methodology and underlying financial information included in the Company’s determination of fair value required significant judgments by management. The principal assumptions used in the Company’s discounted cash flow analysis consisted of (a) long-term projections of financial performance and (b) the weighted-average cost of capital of market participants, adjusted for the risk attributable to the Company and the industry in which it operates. Under the market approach, the principal assumption included an estimate of a control premium.

Based on the goodwill impairment analysis performed, the Company determined that the estimated fair values of the previous Uniforms and Related Products segment and current Branded Products segment were lower than their carrying value primarily as the result of current market conditions, decline in expected cash flows and/or decrease in the Company’s stock price. Consequently, the Company recorded a non-cash goodwill impairment charge of $45.9 million during the year ended December 31, 2022.

The following table presents the carrying amounts of goodwill attributable to each of the Company’s reportable segments (dollars in thousands):

	Branded Products			Healthcare Apparel			Total
As of January 1, 2022:
Gross goodwill	$	19,111		$	20,323		$	39,434
Accumulated impairment losses		-			-			-
Net goodwill	$	19,111		$	-		$	39,434

Additions	$	6,463		$	-		$	6,463
Impairment charge		(25,595	)		(20,323	)		(45,918	)
Foreign currency translation		21			-			21
Net goodwill, December 31, 2022	$	-		$	-		$	-

As of December 31, 2022:
Gross goodwill	$	25,595		$	20,323		$	45,918
Accumulated impairment losses		(25,595	)		(20,323	)		(45,918	)
Net goodwill	$	-		$	-		$	-

Intangible Assets

In conjunction with the Company’s realignment of its reportable segments during the second quarter of 2022, the Company began an effort to centralize certain branding and go-to-market strategies under the BAMKO brand and determined that it would no longer use certain trade names associated with branded products. The Company’s rebranding efforts resulted in a $5.6 million impairment of indefinite-lived trade names related to its Branded Products segment during the year ended December 31, 2022. The carrying amounts of indefinite-lived trade names are summarized as follows (dollars in thousands):

Indefinite-lived Intangible Assets	Segment	Carrying Amount, December 31, 2021		Impairment Charges			Carrying Amount, December 31, 2022		Carrying Amount, December 31, 2023
Trade names:
HPI	Branded Products	$	4,700	$	-		$	4,700	$	4,700
BAMKO	Branded Products		8,900		-			8,900		8,900
Public Identity	Branded Products		470		(470	)		-		-
Tangerine	Branded Products		3,200		(3,200	)		-		-
Gifts By Design	Branded Products		1,170		(1,170	)		-		-
Sutter’s Mill	Branded Products		741		(741	)		-		-
CID Resources(1)	Healthcare Apparel		14,160		-			14,160		14,160
Total		$	33,341	$	(5,581	)	$	27,760	$	27,760

(1)	Includes trade names and trademarks associated with CID Resources, Wink™ and Zoey and Chloe.

Intangible assets as of December 31, 2023 and December 31, 2022 are summarized as follows (dollars in thousands):

			December 31, 2023					December 31, 2022
Item	Weighted Average Life (In years)		Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Definite-lived intangible assets:
Customer relationships (7-15 year life)		11.7	$	50,198	$	(27,417	)	$	50,198	$	(23,330	)
Non-compete agreements (3-7 year life)		5.4		1,712		(1,507	)		1,712		(1,367	)
Trademarks		10.0		414		(118	)		379		(72	)
Trade names		2.0		710		(592	)		710		(237	)
Total			$	53,034	$	(29,634	)	$	52,999	$	(25,006	)

Indefinite-lived intangible assets:
Trade names			$	27,760				$	27,760

Total intangible assets			$	80,794	$	(29,634	)	$	80,759	$	(25,006	)

Amortization expense for intangible assets for the years ended December 31, 2023 and 2022 was $4.6 million and $5.1 million, respectively.

Estimated future intangible amortization expense is as follows (in thousands):

2024	$	3,719
2025		3,069
2026		3,061
2027		3,020
2028		2,671
Thereafter		7,860
Total	$	23,400