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Note 12 - Goodwill and Other Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Text Block]

Note 12.

Goodwill and Other Assets

On July 3, 2018, we acquired 100% of the outstanding stock of Landair Holdings, Inc., a Tennessee corporation (“Landair”). Landair is a dedicated and for-hire truckload carrier, as well as a supplier of transportation management, warehousing and logistics inventory management services. Landair’s results have been included in the consolidated financial statements since the date of acquisition. Landair’s trucking operations’ results are reported within our Dedicated reportable segment, while Landair’s logistics operations’ results are reported within our Managed Freight and Warehousing reportable segments.

As a result of management compensation structure changes and a change in the branding strategy of the organization, the Company revised the estimated remaining useful life of the Landair trade name to 15 months as of June 30, 2020. At the end of its useful life, the Landair trade name will have a residual value of $0.5 million. The non-compete agreement with a former Landair executive was terminated during the second quarter of 2020. These changes resulted in additional amortization of none and $1.3 million during the three and nine months ended September 30, 2020, or a $1.0 million, or $0.06 per diluted share, decrease in net income. The remaining useful lives as adjusted are included in the summary of other intangible assets below.

As of September 30, 2020 and December 31, 2019, we had goodwill of $42.5 million.

A summary of other intangible assets as of September 30, 2020 and December 31, 2019 is as follows:

(in thousands)	September 30, 2020
	Gross intangible assets		Accumulated amortization			Net intangible assets		Remaining life (months)
Trade name:
Dedicated	$	2,402	$	(896	)	$	1,506
Managed Freight		999		(373	)		626
Warehousing		999		(373	)		626
Total trade name		4,400		(1,642	)		2,758		12
Non-Compete agreement:
Dedicated		914		(914	)		-
Managed Freight		130		(130	)		-
Warehousing		356		(356	)		-
Total non-compete agreement		1,400		(1,400	)		-		-
Customer relationships:
Dedicated		14,072		(2,638	)		11,434
Managed Freight		1,692		(318	)		1,374
Warehousing		12,436		(2,332	)		10,104
Total customer relationships:		28,200		(5,288	)		22,912		117
Total other intangible assets	$	34,000	$	(8,330	)	$	25,670

(in thousands)	December 31, 2019
	Gross intangible assets		Accumulated amortization			Net intangible assets		Remaining life (months)
Trade name:
Dedicated	$	2,402	$	(240	)	$	2,162
Managed Freight		999		(100	)		899
Warehousing		999		(100	)		899
Total trade name		4,400		(440	)		3,960		162
Non-Compete agreement:
Dedicated		914		(274	)		640
Managed Freight		130		(39	)		91
Warehousing		356		(107	)		249
Total non-compete agreement		1,400		(420	)		980		42
Customer relationships:
Dedicated		14,072		(1,759	)		12,313
Managed Freight		1,692		(213	)		1,479
Warehousing		12,436		(1,554	)		10,883
Total customer relationships:		28,200		(3,525	)		24,675		126
Total other intangible assets	$	34,000	$	(4,385	)	$	29,615

The above intangible assets have a weighted average remaining life of 106 months as of September 30, 2020, compared to 128 months as of December 31, 2019, as a result of the change in estimated useful life as discussed above. The expected amortization of these assets for the remainder of 2020 and the next five successive years is as follows:

	(in thousands)
2020 ⁽¹⁾	$	1,152
2021		4,043
2022		2,350
2023		2,350
2024		2,350
2025		2,350
Thereafter		10,575

⁽¹⁾ Excludes the nine months ended September 30, 2020.