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Note 7 - Goodwill and Other Assets | 12 Months Ended
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Dec. 31, 2022
Notes to Financial Statements |
Goodwill and Intangible Assets Disclosure [Text Block] |
7. | GOODWILL AND OTHER ASSETS
AAT's results have been included in the consolidated financial statements since the date of acquisition within our Expedited reportable segment. The Landair trade name has a residual value of $0.5 million. Amortization expense of $4.3 million and $4.0 million for the years ended December 31, 2022 and 2021, respectively, was included in depreciation and amortization in the consolidated statements of operations. A summary of other intangible assets, by reportable segment as of December 31, 2022 and 2021 is as follows:
(in thousands) |  | December 31, 2022 |  |  |  |  |
|  | Gross intangible assets |  |  | Accumulated amortization |  |  | Net intangible assets |  |  | Remaining Life (months) |
Trade name: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dedicated |  | $ | 2,402 |  |  | $ | (2,130 | ) |  | $ | 272 |  |  |  |  |
Managed Freight |  |  | 999 |  |  |  | (885 | ) |  |  | 114 |  |  |  |  |
Warehousing |  |  | 999 |  |  |  | (885 | ) |  |  | 114 |  |  |  |  |
Total trade name |  |  | 4,400 |  |  |  | (3,900 | ) |  |  | 500 |  |  |  | - |
Customer relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dedicated |  |  | 14,072 |  |  |  | (5,277 | ) |  |  | 8,795 |  |  |  |  |
Managed Freight |  |  | 1,692 |  |  |  | (635 | ) |  |  | 1,057 |  |  |  |  |
Warehousing |  |  | 12,436 |  |  |  | (4,663 | ) |  |  | 7,773 |  |  |  |  |
Total customer relationships: |  |  | 28,200 |  |  |  | (10,575 | ) |  |  | 17,625 |  |  |  | 90 |
Credentialing: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expedited |  |  | 32,000 |  |  |  | (1,956 | ) |  |  | 30,044 |  |  |  | 169 |
Total credentialing |  |  | 32,000 |  |  |  | (1,956 | ) |  |  | 30,044 |  |  |  |  |
Total other intangible assets |  | $ | 64,600 |  |  | $ | (16,431 | ) |  | $ | 48,169 |  |  |  | 138 |
(in thousands) |  | December 31, 2021 |  |  |  |  |
|  | Gross intangible assets |  |  | Accumulated amortization |  |  | Net intangible assets |  |  | Remaining Life (months) |
Trade name: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dedicated |  | $ | 2,402 |  |  | $ | (2,130 | ) |  | $ | 272 |  |  |  |  |
Managed Freight |  |  | 999 |  |  |  | (885 | ) |  |  | 114 |  |  |  |  |
Warehousing |  |  | 999 |  |  |  | (885 | ) |  |  | 114 |  |  |  |  |
Total trade name |  |  | 4,400 |  |  |  | (3,900 | ) |  |  | 500 |  |  |  | - |
Customer relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dedicated |  |  | 14,072 |  |  |  | (4,104 | ) |  |  | 9,968 |  |  |  |  |
Managed Freight |  |  | 1,692 |  |  |  | (494 | ) |  |  | 1,198 |  |  |  |  |
Warehousing |  |  | 12,436 |  |  |  | (3,627 | ) |  |  | 8,809 |  |  |  |  |
Total customer relationships |  |  | 28,200 |  |  |  | (8,225 | ) |  |  | 19,975 |  |  |  | 102 |
Total other intangible assets |  | $ | 32,600 |  |  | $ | (12,125 | ) |  | $ | 20,475 |  |  |  |  |
The above finite-lived intangible assets have a weighted average remaining life of 138 months and 102 months as of December 31, 2022 and 2021, respectively. The expected amortization expense of these assets for the next five years is as follows:
|  | (In thousands) |
2023 |  | $ | 4,483 |
2024 |  |  | 4,483 |
2025 |  |  | 4,483 |
2026 |  |  | 4,483 |
2027 |  |  | 4,483 |
Thereafter |  |  | 25,254 |
The assignment of goodwill and intangible assets to our reportable segments was not complete as of December 31, 2022. The carrying amount of goodwill was $58.2 million at December 31, 2022, compared to $42.5 million at December 31, 2021, as a result of the AAT acquisition. A summary of the changes in carrying amount of goodwill by reportable segment is as follows:
(in thousands) |  | December 31, 2021 |  |  |  |  |  |  |  |  |  |  | December 31, 2022 |
|  | Gross/net goodwill |  |  | Acquired goodwill for AAT |  |  | Accumulated impairment loss |  |  | Gross/net goodwill |
Expedited |  | $ | - |  |  | $ | 15,699 |  |  | $ | - |  |  | $ | 15,699 |
Dedicated |  |  | 15,320 |  |  |  | - |  |  |  | - |  |  |  | 15,320 |
Managed Freight |  |  | 5,448 |  |  |  | - |  |  |  | - |  |  |  | 5,448 |
Warehousing |  |  | 21,750 |  |  |  | - |  |  |  | - |  |  |  | 21,750 |
Total goodwill |  | $ | 42,518 |  |  | $ | 15,699 |  |  | $ | - |  |  | $ | 58,217 |
A summary of other assets as of December 31, 2022 and 2021 is as follows:
(in thousands) |  | 2022 |  |  | 2021 |
Investment in TEL |  | $ | 54,727 |  |  | $ | 44,196 |
Other long-term receivables |  |  | 1,260 |  |  |  | 7,329 |
Other assets, net |  |  | 2,856 |  |  |  | 859 |
Total other assets, net |  | $ | 58,843 |  |  | $ | 52,384 |
Other long-term receivables primarily represents amounts related to extended warranties on our revenue equipment on our consolidated balance sheet as of December 31, 2022, as well as amounts recorded as a receivable in other assets and as a corresponding accrual in the long-term portion of insurance and claims accruals on our consolidated balance sheet as of December 31, 2021, for claims above our self-insured retention for which we believe it is reasonably assured that the insurers will provide their portion of such claims. The Company conducted its annual impairment assessments and tests of goodwill for each reporting unit as of October 1, 2022. The first step of the goodwill impairment test is the Company's assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the reporting unit's carrying amount, including goodwill. When performing the qualitative assessment, the Company considers the impact of factors including, but not limited to, macroeconomic and industry conditions, overall financial performance of each reporting unit, litigation and new legislation. If based on the qualitative assessments, the Company believes it more likely than not that the fair value of a reporting unit is less than the reporting unit's carrying amount, or periodically as deemed appropriate by management, the Company will prepare an estimation of the respective reporting unit's fair value utilizing a quantitative approach. If the estimation of fair value indicates that impairment potentially exists, the Company will then measure the amount of the impairment, if any. Goodwill impairment exists when the estimated implied fair value of goodwill is less than its carrying value. Changes in strategy or market conditions could significantly impact these fair value estimates and require adjustments to recorded asset balances. As a result of the most recent goodwill impairment analysis performed ( October 1, 2022), the Company determined that it was not more likely than not that the fair value of a reporting unit is less than the reporting unit's carrying amount. Additionally, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Impairment is recognized on assets classified as held and used when the sum of undiscounted estimated cash flows expected to result from the use of the asset is less than the carrying value. If such measurement indicates a possible impairment, the estimated fair value of the asset is compared to its net book value to measure the impairment charge, if any. No such events were identified as of December 31, 2022.

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