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Intangible Assets, Net and Goodwill | 12 Months Ended
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Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets Disclosure [Text Block] |
NOTE 6 — INTANGIBLE ASSETS, NET AND GOODWILL
INTANGIBLE ASSETS, NET Intangible assets, net consisted of the following:
|  | December 31,
(in thousands) |  | 2022 |  | 2021 |  |
Intangible assets with definite lives: |  |  |  |  |  |
Patents and purchased technology |  | $ | 14,198 |  |  | $ | 14,198 |  |  |
Customer relationships |  | 23,000 |  |  | 23,000 |  |  |
Gross carrying amount |  | 37,198 |  |  | 37,198 |  |  |
Accumulated amortization: |  |  |  |  |  |
Patents and purchased technology |  | (14,198) |  |  | (14,198) |  |  |
Customer relationships |  | (20,663) |  |  | (19,013) |  |  |
Accumulated amortization |  | (34,861) |  |  | (33,211) |  |  |
Net carrying amount |  | 2,337 |  |  | 3,987 |  |  |
Intangible assets with indefinite lives |  | 79,221 |  |  | 97,921 |  |  |
Intangible assets, net |  | $ | 81,558 |  |  | $ | 101,908 |  |  |
Amortization expense for intangible assets subject to amortization was $1.7 million, $1.7 million and $2.5 million for the years ended December 31, 2022, 2021 and 2020 respectively. For the year ended December 31, 2022, an im pairment charge of $18.7 million was recorded for the impairment of prAna's trademar k and trade name (collectively, "trademark"), which is an indefinite-lived intangible asset recorded in the U.S. segment. The impairment of the prAna trademark was determined as part of the annual impairment test. The decline in estimated fair value from the fourth quarter 2021 impairment test reflects a decline in forecasted revenue, a lower estimated royalty rate, and a slightly higher discount rate. For the year ended December 31, 2021, there were no impairments recorded for intangible assets with indefinite lives. For the year ended December 31, 2020, an impairment charge of $17.5 million was recorded for the impairment of prAna's trademark. The impairment of the prAna trademark was determined as part of the annual impairment test. The decline in estim ated fair value from the fourth quarter 2020 impairment test compared to the fourth quarter 2019 impairment test reflected a lower estimated royalty rate and a decline in forecasted revenues. The Company estimated fair value using a relief from royalty method under the income approach. Cash flow projections were developed in part from the Company's annual planning process. The discount rate was the equity component of the estimated weighted average cost of capital of the reporting unit from a market-participant perspective. The following table presents the remaining estimated annual amortization expense of intangible assets with definite lives for the years 2023 through 2027:
(in thousands) |
2023 | 1,650 |
2024 | 687 |
2025 | — |
2026 | — |
2027 | — |
GOODWILL The following table sets forth the changes in Goodwill.:
(in thousands) |  |
Balance as of December 31, 2020 |  |  |  |
Gross |  | $ | 73,208 |  |  |
Accumulated impairment loss |  | (4,614) |  |  |
Carrying value |  | 68,594 |  |  |
Balance as of December 31, 2021 |  |  |  |
Gross |  | 73,208 |  |  |
Accumulated impairment loss |  | (4,614) |  |  |
Carrying value |  | 68,594 |  |  |
Impairment losses during the year |  | (16,900) |  |  |
Balance as of December 31, 2022 |  |  |  |
Gross |  | 73,208 |  |  |
Accumulated impairment loss |  | (21,514) |  |  |
Carrying value |  | $ | 51,694 |  |  |
Substantially all of the Company's goodwill is recorded in the U.S. segment. For the y ear ended December 31, 2022, an impairment charge of $16.9 million was recorded. The impairment of goodwill attributable to the prAna business was determined as part of the annual impairment test. The Company estimated the fair value of the prAna reporting unit using a combination of discounted cash flow analysis and market-based valuation methods. Key assumptions used in the discounted cash flow models are cash flow projections and the discount rate. Cash flow projections are developed in part from our annual planning process. The discount rate is the estimated weighted-average costs of capital of the reporting unit from a market-participant perspective. The market-based valuation methods to estimate fair value of the reporting units utilized market multiples for guideline public companies. The decline in estimated fair value from the fourth-quarter 2021 impairment test reflects lower assumed revenue and operating income levels, while the weighted-average cost of capital used in the discounted cash flow model remained relatively unchanged. The Company determined that goodwill was not impaired for the years ended December 31, 2021 and 2020.

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