Annual report pursuant to Section 13 and 15(d)

Goodwill And Intangible Assets

v3.22.4
Goodwill And Intangible Assets
12 Months Ended
Dec. 31, 2022
Goodwill And Intangible Assets [Abstract]  
Goodwill And Intangible Assets NOTE 5. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table summarizes the changes in goodwill by segment:

Outdoor

Precision Sport

Adventure

Total

Goodwill

$

29,507

$

26,715

$

-

$

56,222

Accumulated goodwill impairment losses

(29,507)

-

-

(29,507)

Balance at December 31, 2020

-

26,715

-

26,715

Increase due to acquisitions of Rhino-Rack and MAXTRAX

-

-

92,805

92,805

Impact of foreign currency exchange rates

-

-

(1,430)

(1,430)

Balance at December 31, 2021

-

26,715

91,375

118,090

Decrease due to impairment

-

-

(52,071)

(52,071)

Acquisition adjustment

-

-

741

741

Impact of foreign currency exchange rates

-

-

(3,767)

(3,767)

Balance at December 31, 2022

$

-

$

26,715

$

36,278

$

62,993

Due to a weakening global economy, driven by higher inflation and interest rates, and other factors affecting the market for our Adventure reporting unit products, we experienced significant declining revenue and profitability in our Adventure reporting unit and a decline in stock price during the year ended December 31, 2022. Revenues continued to decline unexpectedly during the three months ended December 31, 2022, due to a lack of product demand in what is typically the highest selling season for the product in Australia, in addition to a continued increase in interest rates. As a result, we reduced our sales forecasts for 2023 and beyond in our Adventure reporting unit. As part of our annual impairment test as of December 31, 2022, we performed a quantitative assessment using income-based and market-based approaches. As a result of this assessment, the carrying value of our Adventure reporting unit exceeded the related estimated fair value, thus an impairment of goodwill of $52,071 was recorded.

Indefinite-Lived Intangible Assets 

 

The following table summarizes the changes in indefinite-lived intangible assets:

Balance at December 31, 2021

$

128,271

Decrease due to impairment of Rhino-Rack trademark

(40,240)

Impact of foreign currency exchange rates

(5,130)

Balance at December 31, 2022

$

82,901

As part of our annual impairment test as of December 31, 2022, we performed a quantitative assessment using the relief-from-royalty method. As described above, we reduced our sales forecasts for 2023 and beyond in our Adventure reporting unit. As a result of this assessment, the carrying value of the Rhino-Rack trademark recorded within our Adventure reporting unit exceeded the estimated related fair value, thus an impairment of the Rhino-Rack trademark of $40,240 was recorded.

If we do not achieve the results reflected in the forecasts utilized in our impairment assessments, or if there are changes to market assumptions, all of which require significant estimates and assumptions, our valuation of the reporting unit, including related indefinite-lived intangible assets, could be adversely affected, and we may be required to impair an additional portion or all of the related goodwill, indefinite-lived intangibles, and other long-lived assets which could adversely affect our operating results in the period of impairment.

Trademarks classified as indefinite-lived intangible assets by brand as of December 31, 2022 and 2021, were as follows:

December 31, 2022

December 31, 2021

Black Diamond

$

19,600

$

19,600

PIEPS

2,986

3,166

Sierra

18,900

18,900

Barnes

5,600

5,600

Rhino-Rack

25,744

70,278

MAXTRAX

10,071

10,727

$

82,901

$

128,271

Other Intangible Assets, net

The following table summarizes the changes in gross other intangible assets:

Gross balance at December 31, 2021

$

104,681

Impact of foreign currency exchange rates

(3,792)

Gross balance at December 31, 2022

$

100,889

Other intangible assets, net of amortization as of December 31, 2022 and 2021, were as follows: 

December 31, 2022

Gross

Accumulated Amortization

Net

Weighted Average Useful Life

Intangibles subject to amortization

Customer relationships

$

77,370

$

(34,653)

$

42,717

13.8 years

Product technologies

21,309

(9,207)

12,102

10.2 years

Tradename / trademark

1,263

(827)

436

9.4 years

Core technologies

947

(947)

-

10.0 years

$

100,889

$

(45,634)

$

55,255

13.0 years

December 31, 2021

Gross

Accumulated Amortization

Net

Weighted Average Useful Life

Customer relationships

$

80,078

$

(23,804)

$

56,274

13.8 years

Product technologies

22,393

(5,557)

16,836

10.2 years

Tradename / trademark

1,263

(690)

573

9.4 years

Core technologies

947

(947)

-

10.0 years

$

104,681

$

(30,998)

$

73,683

12.9 years

Amortization expense for the years ended December 31, 2022, 2021, and 2020, was $15,326, $9,834, and $4,070, respectively. Future amortization expense for other intangible assets as of December 31, 2022 is as follows:  

Years Ending December 31,

Amortization Expense

2023

$

12,798

2024

10,770

2025

8,715

2026

6,689

2027

4,884

Thereafter

11,399

$

55,255