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Goodwill and Other Intangible Assets | 12 Months Ended
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Jan. 01, 2022
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | Note 4 – Goodwill and Other Intangible Assets The Company has three reporting units; however, no goodwill exists within the Retail or Military reporting units. The carrying amount of goodwill recorded within the Food Distribution reporting unit was $181.0 million as of January 1, 2022 and January 2, 2021. The Company reviews goodwill and other intangible assets for impairment annually, during the fourth quarter of each year, and more frequently if circumstances indicate the possibility of impairment. Testing goodwill and other intangible assets for impairment requires management to make significant estimates about the Company’s future performance, cash flows, and other assumptions that can be affected by potential changes in economic, industry or market conditions, business operations, competition, or the Company’s stock price and market capitalization. During the Company’s 2021 annual impairment review, projected cash flows were discounted based on a weighted average cost of capital (“WACC”) of 9.0%. This WACC was developed from adjusted market based and company specific factors, current interest rates, equity risk premiums, and other market-based expectations regarding expected investment returns. The development of the WACC requires estimates of an equity rate of return and a debt rate of return, which are specific to the industry in which the Food Distribution reporting unit operates. The Company concluded that the fair value of the Food Distribution reporting unit was substantially in excess of its carrying value in the annual review. The following table reflects the components of amortized intangible assets, included in “Intangible assets, net” on the consolidated balance sheets:
|  |  | January 1, 2022 |  |  | January 2, 2021 |
|  |  | Gross |  |  |  |  |  |  |  | Gross |  |  |  |  |  |
|  |  | Carrying |  |  | Accumulated |  |  | Carrying |  |  | Accumulated |
(In thousands) |  |  | Amount |  |  | Amortization |  |  | Amount |  |  | Amortization |
Non-compete agreements |  |  |  | $ |  | 4,287 |  |  | $ |  | 2,792 |  |  | $ |  | 4,287 |  |  | $ |  | 2,075 |
Pharmacy customer prescription lists |  |  |  |  |  | 4,233 |  |  |  |  | 2,095 |  |  |  |  | 4,233 |  |  |  |  | 1,521 |
Customer relationships |  |  |  |  |  | 57,937 |  |  |  |  | 18,822 |  |  |  |  | 57,937 |  |  |  |  | 15,160 |
Trade names |  |  |  |  |  | 1,068 |  |  |  |  | 987 |  |  |  |  | 1,068 |  |  |  |  | 837 |
Franchise fees |  |  |  |  |  | 1,110 |  |  |  |  | 605 |  |  |  |  | 1,081 |  |  |  |  | 497 |
Total |  |  |  | $ |  | 68,635 |  |  | $ |  | 25,301 |  |  | $ |  | 68,606 |  |  | $ |  | 20,090 |
The weighted average amortization periods for amortizable intangible assets as of January 1, 2022 are as follows:
Non-compete agreements |  |  |  |  |  |  |  |  |  |  |  |  |  | 6.1 years
Pharmacy customer prescription lists |  |  |  |  |  |  |  |  |  |  |  |  |  | 8.0 years
Customer relationships |  |  |  |  |  |  |  |  |  |  |  |  |  | 16.4 years
Trade names |  |  |  |  |  |  |  |  |  |  |  |  |  | 5.0 years
Franchise fees |  |  |  |  |  |  |  |  |  |  |  |  |  | 10.0 years
Amortization expense for intangible assets was $5.2 million, $5.7 million and $5.8 million for 2021, 2020 and 2019, respectively. Estimated amortization expense for each of the five succeeding fiscal years is as follows:
(In thousands) | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |  |  | 2026 |
Amortization expense | $ |  | 4,915 |  |  | $ |  | 4,810 |  |  | $ |  | 4,559 |  |  | $ |  | 4,162 |  |  | $ |  | 3,647 |
The Company has indefinite-lived intangible assets that are not amortized, consisting primarily of indefinite-lived trade names and liquor licenses. During the third quarter of 2020, the Company made the decision to abandon a tradename within the Food Distribution segment to better integrate with the Company’s overall transportation operations, resulting in a $7.0 million impairment of the associated indefinite-lived tradename asset. During the fourth quarter of 2020, the Company recognized an impairment charge of $1.7 million, related to a tradename based on a change in the assumptions supporting fair value. Changes in the carrying amount of indefinite-lived intangible assets were as follows:
(In thousands) | Indefinite-lived Intangible Assets |
Balance at December 28, 2019 | $ |  | 76,256 |
Impairment (Note 5) |  |  | (8,630 | )
Balance at January 2, 2021 and January 1, 2022 | $ |  | 67,626 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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