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GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended
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Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and Related Annual Impairment Assessments As of December 31, 2022, goodwill allocated to the Transportation Solutions (“TS”) and Parts & Services (“P&S”) segments was approximately $120.5 million and $67.9 million, respectively. For the 2022 annual goodwill impairment test conducted as of October 1 st, 2022, the Company chose to evaluate qualitative factors to determine if it was more likely than not that the fair value of the TS and P&S reporting units were less than their respective carrying amounts. In accordance with the relevant accounting guidance, in order to perform the qualitative assessment, 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 most recent quantitative fair value analysis for each reporting unit (which was conducted in connection with the Company’s segment realignment beginning in September 2021 as further described below). Based on the analysis of the factors and considerations described above, the Company concluded that it was more likely than not that the fair value of each reporting unit continued to be greater than the respective carrying value. Therefore, no impairment charges were recorded and a quantitative analysis was not performed. 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 below, 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). Based on the analysis of the factors and considerations described above, the Company concluded that it was more likely than not that the fair value of each reporting unit was greater than the respective carrying value. Therefore, no impairment charges were recorded and an additional quantitative analysis was not performed. In connection with the Company’s segment realignment beginning in September 2021 described in greater detail below, as well as the Company’s annual goodwill impairment test conducted during the fourth quarter of 2020, the Company performed a quantitative assessment for each reporting unit utilizing a combination of the income and market approaches, the results of which were weighted evenly. No impairment was indicated in either annual test as the fair value of each reporting unit exceeded its respective carrying value. 2021 Segment Realignment As further described in Note 20, beginning in September 2021 the Company realigned its operating and reportable segments. Based on these changes, the Company established two operating and reportable segments: Transportation Solutions (“TS”) and Parts & Services (“P&S”). These operating and reportable segments were also 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. 2021 Goodwill Allocation for Extract Technology® As further described in Note 21, 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. 2020 Goodwill Allocation for Beall® As further described in Note 21, 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. 2020 Interim Goodwill Impairment Test 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 were based on Level 3 fair value measurements, are included in Impairment and other, net in the Consolidated Statements of Operations. Goodwill Rollforward For the years ended December 31, 2022, 2021, and 2020, the changes in the carrying amounts of goodwill were as follows (in thousands):
| Transportation Solutions |  | Parts & Services |  |  |  | Total
Balance at December 31, 2020 |  |  |  |  |  |  |
Goodwill | $ | 188,775 |  |  | $ | 119,185 |  |  |  |  | $ | 307,960 |
Accumulated impairment losses | (68,257) |  |  | (40,143) |  |  |  |  | (108,400) |
Net balance at 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 at 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 |
Effects of foreign currency | (5) |  |  | (4) |  |  |  |  | (9) |
Balance as of December 31, 2022 |  |  |  |  |  |  |
Goodwill | 188,759 |  |  | 108,075 |  |  |  |  | 296,834 |
Accumulated impairment losses | (68,257) |  |  | (40,143) |  |  |  |  | (108,400) |
Net balance as of December 31, 2022 | $ | 120,502 |  |  | $ | 67,932 |  |  |  |  | $ | 188,434 |
Intangible Assets Intangible asset amortization expense was $15.2 million, $22.9 million, and $22.0 million for 2022, 2021, and 2020, respectively. Annual intangible asset amortization expense for the next 5 fiscal years is estimated to be $12.8 million in 2023; $12.0 million in 2024; $11.2 million in 2025; $10.7 million in 2026; and $10.2 million in 2027. As further described throughout our Annual Report on Form 10-K for the year ended December 31, 2021, 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 uses certain trade names or brand names, and predominantly uses 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 operating segment and $2.7 million to the P&S operating 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. 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, 2022, 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
Customer relationships | 13 years |  | $ | 270,016 |  |  | $ | (172,086) |  |  | $ | 97,930 |
Technology | 12 years |  | 11,708 |  |  | (10,407) |  |  | 1,301 |
Total |  |  | $ | 281,724 |  |  | $ | (182,493) |  |  | $ | 99,231 |
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 |

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