Kontoor Brands, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

INTANGIBLE ASSETS

INTANGIBLE ASSETS

9 Months Ended

Sep. 28, 2019

Goodwill and Intangible Assets Disclosure [Abstract]



			September 2019						December 2018
(in thousands)	Weighted Average Amortization Period	Amortization Method	Cost		Accumulated Amortization		Net Carrying Amount		Net Carrying Amount
Finite-lived intangible assets:
Trademarks	16 years	Straight-line	$	58,132	$	45,828	$	12,304	$	47,232
Customer relationships	15 years	Accelerated	10,517		9,706		811		1,213
Finite-lived intangible assets, net							13,115		48,445
Indefinite-lived intangible assets:
Trademarks and trade names							4,415		4,614
Intangible assets, net							$	17,530	$	53,059

During the third quarter of fiscal 2019, the Company determined that the exclusive domestic wholesale distribution and licensing agreement of the Rock & Republic^® brand would not be extended. This was considered a triggering event that required management to perform a quantitative impairment analysis of the Rock & Republic^® trademark intangible asset. Based on this analysis, the Company recorded a $32.6 million non-cash impairment charge which was reflected within "non-cash impairment of intangible asset" in the Company's statement of income during the three months ended September 2019. The Company did not incur any impairment charges during fiscal 2018. Refer to Note 14 to the Company's financial statements for additional information on the related fair value measurements.

Amortization expense (excluding impairment charges) was $0.6 million and $2.6 million for the three and nine months ended September 2019. Amortization expense was $1.1 million and $3.2 million for the three and nine months ended September 2018.

Estimated amortization expense for the next five years beginning in fiscal 2019 is $3.0 million (including the nine months ended September 2019), $1.4 million, $1.2 million, $1.1 million and $1.0 million, respectively.