GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

The Company’s intangible assets, all of which are included in the U.S. and International segments, consist of the following (in thousands):


	Year Ended December 31,
	2019														2018
	Gross		Impairment		Accumulated Amortization		Net		Gross		Impairment		Accumulated Amortization		Net
Goodwill	$	92,361	$	(42,990)	$	—	$	49,371	$	93,895	$	(2,205)	$	—	$	91,690
Indefinite -lived intangible assets:
Trade names	58,216		—		—		58,216		58,216		—		—		58,216
Finite -lived intangible assets:
Licenses	15,847				(10,287)		5,560		15,847				(9,825)		6,022
Trade names	43,986				(17,337)		26,649		43,689				(13,965)		29,724
Customer relationships	176,602				(40,605)		135,997		175,482				(27,538)		147,944
Other	6,546				(1,868)		4,678		6,510				(1,259)		5,251
Total	$	393,558	$	(42,990)	$	(70,097)	$	280,471	$	393,639	$	(2,205)	$	(52,587)	$	338,847

A summary of the activities related to the Company’s intangible assets for the years ended December 31, 2019, 2018 and 2017 consists of the following (in thousands):


	Intangible Assets		Goodwill		Total Intangible Assets and Goodwill
Goodwill and Intangible Assets, December 31, 2016	$	75,018	$	14,201	$	89,219
Acquisition of goodwill	—		434		434
Acquisition of trade names	1,134		—		1,134
Acquisition of customer relationships	563		—		563
Foreign currency translation adjustment	2,823		1,137		3,960
Amortization	(6,831)		—		(6,831)
Goodwill and Intangible Assets, December 31, 2017	72,707		15,772		88,479
Acquisition of goodwill	—		78,795		78,795
Acquisition of trade names	61,500		—		61,500
Acquisition of customer relationships	124,430		—		124,430
Acquisition of other intangible assets	5,367		—		5,367
Foreign currency translation adjustment	(1,524)		(672)		(2,196)
Amortization	(15,323)		—		(15,323)
Impairment of goodwill	—		(2,205)		(2,205)
Goodwill and Intangible Assets, December 31, 2018	247,157		91,690		338,847
Purchase price adjustment	—		972		972



Foreign currency translation adjustment	786		(301)		485
Amortization	(16,843)		—		(16,843)
Impairment of goodwill	—		(42,990)		(42,990)
Goodwill and Intangible Assets, December 31, 2019	$	231,100	$	49,371	$	280,471

The weighted-average amortization periods for the Company’s finite-lived intangible assets as of December 31, 2019 are as follows:


			Years
Trade names			15
Licenses			33
Customer relationships			14
Other			10

Estimated amortization expense for each of the five succeeding fiscal years is as follows (in thousands):


Year ending December 31,
2020	$	16,380
2021	15,657
2022	15,657
2023	15,533
2024	15,005

Amortization expense for the years ended December 31, 2019, 2018 and 2017 was $16.8 million, $15.3 million and $6.8 million, respectively.

Goodwill impairment test

The Company reviews goodwill and other intangibles that have indefinite lives for impairment annually as of October 1st or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values. Impairment testing is based upon the best information available including estimates of fair value which incorporate assumptions marketplace participants would use in making their estimates of fair value. The significant assumptions used under the income approach, or discounted cash flow method, are projected net sales, projected earnings before interest, tax, depreciation and amortization (“EBITDA”), terminal growth rates, and the cost of capital. Projected net sales, projected EBITDA and terminal growth rates were determined to be significant assumptions because they are three primary drivers of the projected cash flows in the discounted cash flow fair value model. Cost of capital was also determined to be a significant assumption as it is the discount rate used to calculate the current fair value of those projected cash flows.

Although the Company believes the assumptions and estimates made are reasonable and appropriate, different assumptions and estimates could materially impact its reported financial results. In addition, sustained declines in the Company's stock price and related market capitalization could impact key assumptions in the overall estimated fair values of its reporting units and could result in non-cash impairment charges that could be material to the Company's consolidated balance sheet or results of operations. Should the carrying value of a reporting unit be in excess of the estimated fair value of that reporting unit, an impairment charge will be recorded to reduce the reporting unit to fair value. The Company also evaluates qualitative factors to determine whether or not its indefinite lived intangibles have been impaired and then performs quantitative tests if required. These tests can include the relief from royalty model or other valuation models.

International Reporting Unit

Several impairment indicators for the European kitchenware business were considered by the Company including the continued uncertainties of the macro-environment in Europe as a result of the then ongoing Brexit negotiations. In addition, the Company considered the decline in operating performance for the European kitchenware business, which included slower fulfillment of orders and labor inefficiencies associated with setting up the new warehouse in the U.K. These factors resulted in a decline in the long-term forecast for the European kitchenware business.

During the third quarter of 2019, the Company performed an interim assessment of its European kitchenware business by comparing the fair value of the reporting unit with its carrying value. The Company performed the analysis using a discounted cash flow and market multiple approach. Based upon the analysis performed, the Company recognized a $9.7 million non-cash goodwill impairment charge during the third quarter of 2019. The goodwill impairment charge was the result of a decline in operating performance and

reduced expectations for future cash flows of the European kitchenware business. The fair value of the business was approximately 30.1% below its carrying value as of September 30, 2019.

During the third quarter of 2019 the Company also determined its European kitchenware and tableware reporting units had met the criteria to be combined into one reporting unit based on the guidance of ASC Topic No. 350, Intangibles - Goodwill and Other and ASC Topic No. 280, Segment Reporting.

In 2018, the Company incurred a non-cash goodwill impairment charge of $2.2 million related to the European tableware business due to a decline in operating performance and reduced expectations for future cash flows.

Following the goodwill impairment charges taken in both the third quarter of 2019 and 2018, goodwill associated with the International reporting unit, comprised of the European kitchenware business and tableware business, acquired in 2014 and 2011, respectively, is zero.

U.S. Reporting Unit

The Company performed its annual impairment assessment of its U.S. reporting unit as of October 1, 2019 by comparing the fair value of the reporting unit with its carrying value. The Company performed the analysis using a discounted cash flow and market multiple method. Based upon the analysis performed, the Company recognized a non-cash goodwill impairment charge of $33.2 million, during the three months ended December 31, 2019. The goodwill impairment charge resulted from, among other factors, a sustained decline in the Company's market capitalization observed in the fourth quarter of 2019.The fair value of the U.S, reporting unit was approximately 6.1% below its carrying value.

Management’s projections used to estimate the cash flows included organic net sales growth and net sales growth through new customer channels as well as continued operating efficiencies in future periods. Changes in any of the significant assumptions used in the valuation of the reporting unit could materially affect the expected cash flows, and such impacts could potentially result in a material non-cash impairment charge.

As of December 31, 2019, the Company assessed the carrying value of goodwill and determined, based on qualitative factors, that no further impairment existed for goodwill.

Annual indefinite-lived trade name impairment test

The Company bypassed the optional qualitative impairment analysis for its indefinite-lived trade name assets annual October 1, 2019 impairment test.

The Company values its indefinite-lived trade names using a relief-from-royalty approach, which assumes the value of the trade name is the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the trade name and instead licensed the trade name from another company. As of October 1, 2019, the Company completed the quantitative impairment analysis by comparing the fair value of the indefinite-lived trade names to their respective carrying value. The Company determined that the fair value of all its indefinite-lived trade names were above their respective carrying values with the exception of the Rabbit trade name that was acquired as part of the Filament acquisition on March 2, 2018, and which resulted in a fair value equal to its carrying value as of the October 1, 2019 impairment test date. While the indefinite-lived trade names were not determined to be impaired, the indefinite-lived trade names are at risk of future impairment in the event the trade names do not perform as projected or if market factors utilized in the impairment analysis deteriorate, including an unfavorable change in long-term growth rates or the weighted average cost of capital.

As of December 31, 2019, the Company assessed the carrying value of its indefinite-lived trade names and determined based on qualitative factors, no impairment existed.