XML 26 R13.htm IDEA: XBRL DOCUMENT
v3.23.1

Note 6 - Goodwill and Intangible Assets | 12 Months Ended
--- | ---
Dec. 31, 2022
Notes to Financial Statements |
Goodwill Disclosure [Text Block] |
NOTE 6 - Goodwill and Intangible Assets:
Goodwill Beginning in the second quarter of 2022, the Company realigned its reportable segments to Branded Products, Healthcare Apparel and Contact Centers. Refer to Note 17 for further information on the Company’s reportable segments. As a result of this re-segmentation, and in accordance with ASC 350, the Company performed a quantitative goodwill impairment test. During the third quarter of 2022, the Company determined that a triggering event occurred in relation to the depressed market price of the Company's common stock and corresponding significant decline in the Company’s market capitalization. As a result, the Company performed a quantitative goodwill impairment test. The fair value of goodwill in each impairment test was determined using a combination of an income approach, which estimates fair value based upon projections of future revenues, expenses, and cash flows discounted to their respective present values, and a market approach. The valuation methodology and underlying financial information included in the Company’s determination of fair value required significant judgments by management. The principal assumptions used in the Company’s discounted cash flow analysis consisted of (a) long-term projections of financial performance and (b) the weighted-average cost of capital of market participants, adjusted for the risk attributable to the Company and the industry in which it operates. Under the market approach, the principal assumption included an estimate of a control premium. Based on the goodwill impairment analysis performed, the Company determined that the estimated fair values of the previous Uniforms and Related Products segment and current Branded Products segment were lower than their carrying value primarily as the result of current market conditions, decline in expected cash flows and/or decrease in the Company’s stock price. Consequently, the Company recorded a non-cash goodwill impairment charge of $45.9 million during the year ended December 31, 2022. We have reclassified prior period goodwill disclosures to conform to the current period presentation. The following table presents the carrying amounts of goodwill attributable to each of the Company’s reportable segments (dollars in thousands):
|  | Branded Products |  |  | Healthcare Apparel |  |  | Total |
As of January 1, 2021: |  |  |  |  |  |  |  |  |  |  |  |
Gross goodwill |  | $ | 15,793 |  |  | $ | 20,323 |  |  | $ | 36,116 |
Accumulated impairment losses |  |  | - |  |  |  | - |  |  |  | - |
Net goodwill |  | $ | 15,793 |  |  | $ | 20,323 |  |  | $ | 36,116 |
Additions |  | $ | 3,363 |  |  | $ | - |  |  | $ | 3,363 |
Foreign currency translation |  |  | (45 | ) |  |  | - |  |  |  | (45 | )
Net goodwill, December 31, 2021 |  | $ | 19,111 |  |  | $ | 20,323 |  |  | $ | 39,434 |
As of December 31, 2021: |  |  |  |  |  |  |  |  |  |  |  |
Gross goodwill |  | $ | 19,111 |  |  | $ | 20,323 |  |  | $ | 39,434 |
Accumulated impairment losses |  |  | - |  |  |  | - |  |  |  | - |
Net goodwill |  | $ | 19,111 |  |  | $ | 20,323 |  |  | $ | 39,434 |
Additions |  | $ | 6,463 |  |  | $ | - |  |  | $ | 6,463 |
Impairment charge |  |  | (25,595 | ) |  |  | (20,323 | ) |  |  | (45,918 | )
Foreign currency translation |  |  | 21 |  |  |  | - |  |  |  | 21 |
Net goodwill, December 31, 2022 |  | $ | - |  |  | $ | - |  |  | $ | - |
As of December 31, 2022: |  |  |  |  |  |  |  |  |  |  |  |
Gross goodwill |  | $ | 25,595 |  |  | $ | 20,323 |  |  | $ | 45,918 |
Accumulated impairment losses |  |  | (25,595 | ) |  |  | (20,323 | ) |  |  | (45,918 | )
Net goodwill |  | $ | - |  |  | $ | - |  |  | $ | - |
Intangible Assets In conjunction with the Company’s realignment of its reportable segments during the second quarter of 2022, the Company began an effort to centralize certain branding and go-to-market strategies under the BAMKO brand and determined that it would no longer use certain trade names associated with branded products. The Company’s rebranding efforts resulted in a $5.6 million impairment of indefinite-lived trade names related to its Branded Products segment during the year ended December 31, 2022. The carrying amounts of indefinite-lived trade names as of December 31, 2021 and year ended December 31, 2022 are summarized as follows (dollars in thousands):
Indefinite-lived Intangible Assets | Segment |  | Carrying Amount, December 31, 2021 |  |  | Impairment Charges |  |  | Carrying Amount, December 31, 2022 |
Trade names: |  |  |  |  |  |  |  |  |  |  |  |  |
HPI | Branded Products |  | $ | 4,700 |  |  | $ | - |  |  | $ | 4,700 |
BAMKO | Branded Products |  |  | 8,900 |  |  |  | - |  |  |  | 8,900 |
Public Identity | Branded Products |  |  | 470 |  |  |  | (470 | ) |  |  | - |
Tangerine | Branded Products |  |  | 3,200 |  |  |  | (3,200 | ) |  |  | - |
Gifts By Design | Branded Products |  |  | 1,170 |  |  |  | (1,170 | ) |  |  | - |
Sutter’s Mill | Branded Products |  |  | 741 |  |  |  | (741 | ) |  |  | - |
CID Resources | Healthcare Apparel |  | 14,160 |  |  | - |  |  | 14,160 |
Total |  | $ | 33,341 |  |  | $ | (5,581 | ) |  | $ | 27,760 |
Intangible assets as of December 31, 2022 and December 31, 2021 are summarized as follows (dollars in thousands):
|  |  |  |  |  | December 31, 2022 |  |  | December 31, 2021 |
Item |  | Weighted Average Life (In years) |  |  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Gross Carrying Amount |  |  | Accumulated Amortization |
Definite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships (7-15 year life) |  |  | 11.7 |  |  | $ | 50,198 |  |  | $ | (23,330 | ) |  | $ | 45,198 |  |  | $ | (18,772 | )
Non-compete agreements (3-7 year life) |  |  | 5.4 |  |  |  | 1,712 |  |  |  | (1,367 | ) |  |  | 1,536 |  |  |  | (1,121 | )
Trademarks |  |  | 10.0 |  |  |  | 379 |  |  |  | (72 | ) |  |  | 275 |  |  |  | (37 | )
Trade names |  |  | 2.0 |  |  |  | 710 |  |  |  | (237 | ) |  |  | - |  |  |  | - |
Total |  |  |  |  |  | $ | 52,999 |  |  | $ | (25,006 | ) |  | $ | 47,009 |  |  | $ | (19,930 | )
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade names |  |  |  |  |  | $ | 27,760 |  |  |  |  |  |  | $ | 33,341 |  |  |  |  |
Total intangible assets |  |  |  |  |  | $ | 80,759 |  |  | $ | (25,006 | ) |  | $ | 80,350 |  |  | $ | (19,930 | )
Amortization expense for intangible assets for the years ended December 31, 2022 and 2021 was $5.1 million and $4.2 million, respectively. Estimated future intangible amortization expense is as follows (in thousands):
2023 |  | $ | 4,616 |
2024 |  |  | 3,716 |
2025 |  |  | 3,066 |
2026 |  |  | 3,058 |
2027 |  |  | 3,017 |
Thereafter |  |  | 10,520 |
Total |  | $ | 27,993 |

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2144439 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 55 -Paragraph 24 -URI https://asc.fasb.org/extlink&oid=122137925&loc=d3e14258-109268 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13854-109267 + Details
Name: | us-gaap_GoodwillDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration