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GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended
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Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Segment Realignment As further described in Note 19, beginning in September 2021 the Company realigned its operating and reportable segments. Based on these changes, the Company has established two operating and reportable segments: Transportation Solutions (“TS”) and Parts & Services (“P&S”). These operating and reportable segments have also been determined to be the applicable reporting units for purposes of goodwill assignment and evaluation. In accordance with the relevant accounting guidance, the Company performed a quantitative impairment assessment of goodwill immediately prior to and subsequently following the change in segments and reporting units. The quantitative analyses did not result in any impairment charges as the fair value of each reporting unit exceeded the carrying value. In addition, as part of the change in segment structure, the Company reassigned goodwill from the historical Commercial Trailer Products (“CTP”), Diversified Products (“DPG”), and Final Mile Products (“FMP”) reporting units to the TS and P&S reporting units using a relative fair value allocation approach as required by the relevant accounting guidance. Reassigned goodwill balances and related activity are shown in the table below. The goodwill impact related to the divestiture of Beall® during the fourth quarter of 2020 was only allocated and related to the TS segment, and the divestiture of Extract® (as discussed below) during the second quarter of 2021 only related to and was only assigned to the P&S segment. The first quarter of 2020 impairment charges for the historical FMP and Tank Trailers reporting units were allocated on a relative fair value basis as the impairment related to both the TS and P&S segments. The historical CTP reporting unit impairment charge in 2016 related only to the P&S segment and was assigned accordingly. The effects of foreign currency were allocated on a relative fair value basis as these effects relate to both segments. Goodwill and Related Impairment Assessments As of December 31, 2021, goodwill allocated to the TS and P&S segments was approximately $120.5 million and $67.9 million, respectively. Because of the recency and lack of changes with respect to market conditions and data assumptions used in the quantitative assessment performed in connection with the segment realignment discussed above, during the fourth quarter of 2021 the Company completed its annual goodwill impairment test using a qualitative assessment. As part of the qualitative analysis, the Company considered many factors including, but not limited to, general economic conditions, industry and market conditions, financial performance and key business drivers, long-term operating plans, and potential changes to significant assumptions used in the fair value analysis for each reporting unit (performed in connection with the segment realignment). During the fourth quarters of 2020 and 2019, the Company completed its annual goodwill impairment test using the quantitative assessment. Except for the impairment charges during the first quarter of 2020, based on all assessments performed in each of the last three years the Company believed it was more likely than not that the fair value of its reporting units were greater than their carrying amount and no additional impairment of goodwill was recognized. As further described in Note 20, during the second quarter of 2021, the Company sold its Extract Technology® (“Extract”) business that manufactured stainless steel isolators and downflow booths, as well as custom-fabricated equipment, including workstations and drum booths for the pharmaceutical, fine chemical, biotech, and nuclear end markets. Prior to the divestiture, Extract was an operating unit within the historical DPG reporting unit. In accordance with the relevant accounting guidance, as part of the sale the Company allocated $11.1 million of goodwill based upon the relative fair value of the Extract operating unit compared to the historical DPG reporting unit as a whole. This goodwill was included in the carrying value of the disposed assets and the resulting net gain recognized in connection with the sale. Prior to and subsequent to the divestiture, the Company performed an impairment assessment for the historical DPG reporting unit and concluded the fair value of the reporting unit continued to exceed the carrying value. In addition, as further described in Note 20, during the fourth quarter of 2020 the Company sold its Beall® brand of tank trailers and associated assets. Prior to the divestiture Beall® was an operating unit within the Tank Trailers reporting unit. In accordance with the relevant accounting guidance, as part of the sale the Company allocated $4.7 million of goodwill based upon the relative fair value of the Beall® operating unit compared to the Tank Trailers reporting unit as a whole. This goodwill was included in the carrying value of the disposed assets and the resulting loss recognized in connection with the sale. Subsequent to the divestiture, the Company performed an impairment assessment for the Tank Trailers reporting unit and concluded the fair value of the reporting unit continued to exceed the carrying value. The Company did not perform in-line with expectations during the first quarter of 2020, partially as a result of impacts to our business and operations due to the COVID-19 pandemic. In addition, subsequent to December 31, 2019, the Company’s share price and market capitalization declined. As a result, indicators of impairment were identified and the Company performed an interim quantitative assessment as of March 31, 2020, utilizing a combination of the income and market approaches, which were weighted evenly. The results of the quantitative analysis indicated the carrying value of the FMP and Tank Trailers reporting units exceeded their respective fair values and, accordingly, goodwill impairment charges of $95.8 million and $11.0 million, respectively, were recorded during the first quarter of 2020. The goodwill impairment charges, which are based on Level 3 fair value measurements, are included in Impairment and other, net in the Consolidated Statements of Operations. For the years ended December 31, 2021, 2020, and 2019, the changes in the carrying amounts of goodwill were as follows (in thousands):
| Transportation Solutions |  | Parts & Services |  |  |  | Total
Balance at December 31, 2019 |  |  |  |  |  |  |
Goodwill | $ | 193,488 |  |  | $ | 119,201 |  |  |  |  | $ | 312,689 |
Accumulated impairment losses | — |  |  | (1,663) |  |  |  |  | (1,663) |
Net balance at December 31, 2019 | 193,488 |  |  | 117,538 |  |  |  |  | 311,026 |
Goodwill impairments | (68,257) |  |  | (38,480) |  |  |  |  | (106,737) |
Impact of divestiture on goodwill | (4,685) |  |  | — |  |  |  |  | (4,685) |
Effects of foreign currency | (28) |  |  | (16) |  |  |  |  | (44) |
Balance at December 31, 2020 |  |  |  |  |  |  |
Goodwill | 188,775 |  |  | 119,185 |  |  |  |  | 307,960 |
Accumulated impairment losses | (68,257) |  |  | (40,143) |  |  |  |  | (108,400) |
Net balance as of December 31, 2020 | 120,518 |  |  | 79,042 |  |  |  |  | 199,560 |
Impact of divestiture on goodwill | — |  |  | (11,101) |  |  |  |  | (11,101) |
Effects of foreign currency | (11) |  |  | (5) |  |  |  |  | (16) |
Balance as of December 31, 2021 |  |  |  |  |  |  |
Goodwill | 188,764 |  |  | 108,079 |  |  |  |  | 296,843 |
Accumulated impairment losses | (68,257) |  |  | (40,143) |  |  |  |  | (108,400) |
Net balance as of December 31, 2021 | $ | 120,507 |  |  | $ | 67,936 |  |  |  |  | $ | 188,443 |
Intangible Assets As further described throughout this Annual Report on Form 10-K, on January 10, 2022, the Company completed its review and approval of its plan for rebranding as Wabash®. As part of the planning process, the Company assessed its usage of trade names and brand names in connection with the long-term growth strategy as One Wabash. Under the plan as approved, the Company no longer plans to use certain trade names or brand names, and will predominantly use Wabash (or variations thereof) to refer to the Company. The decision resulted in non-cash impairment charges of approximately $28.3 million (of which approximately $25.6 million related to the TS segment and $2.7 million to the P&S segment) during the fourth quarter of 2021 related to trade name and trademark intangible assets due to the significant reduction in the related useful lives of these assets. The impairment charges are included in Impairment and other, net in the Consolidated Statements of Operations. Intangible asset amortization expense was $22.9 million, $22.0 million, and $20.5 million for 2021, 2020, and 2019, respectively. Annual intangible asset amortization expense for the next 5 fiscal years is estimated to be $14.9 million in 2022; $12.5 million in 2023; $12.3 million in 2024; $11.4 million in 2025; and $10.7 million in 2026. Net intangible assets of approximately $1.3 million were written-off during the second quarter of 2021 in connection with the Extract® divestiture. In addition, net intangible assets of approximately $1.1 million were written-off during the fourth quarter of 2020 in connection with the Beall® divestiture. As of December 31, 2021, the balances of intangible assets, other than goodwill, were as follows (in thousands):
| Weighted Average Amortization Period |  | Gross Intangible Assets |  | Accumulated Amortization |  | Net Intangible Assets
Trade names and trademarks | N/A |  | $ | — |  |  | $ | — |  |  | $ | — |
Customer relationships | 13 years |  | 270,016 |  |  | (157,852) |  |  | 112,164 |
Technology | 12 years |  | 11,708 |  |  | (9,431) |  |  | 2,277 |
Total |  |  | $ | 281,724 |  |  | $ | (167,283) |  |  | $ | 114,441 |
As of December 31, 2020, the balances of intangible assets, other than goodwill, were as follows (in thousands):
| Weighted Average Amortization Period |  | Gross Intangible Assets |  | Accumulated Amortization |  | Net Intangible Assets
Trade names and trademarks | 20 years |  | $ | 51,481 |  |  | $ | (19,975) |  |  | $ | 31,506 |
Customer relationships | 13 years |  | 276,973 |  |  | (145,356) |  |  | 131,617 |
Technology | 12 years |  | 12,828 |  |  | (9,064) |  |  | 3,764 |
Total |  |  | $ | 341,282 |  |  | $ | (174,395) |  |  | $ | 166,887 |

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