Quarterly report pursuant to Section 13 or 15(d)

Acquired Intangible Assets and Goodwill

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Acquired Intangible Assets and Goodwill
 9 Months Ended
Sep. 28, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Acquired Intangible Assets and Goodwill Acquired Intangible Assets and Goodwill
Intangible assets acquired in a business combination are recognized at fair value and amortized over their estimated useful lives. The carrying amount and accumulated amortization of recognized intangible assets at September 28, 2024 and December 30, 2023, are as follows:

(dollar amounts in millions)
 September 28, 2024 December 30, 2023
Original Useful Life (years)
Weighted-Average Amortization period (years)
Gross Carrying Amount 1
Accumulated Amortization Net Amount Gross Carrying Amount Accumulated Amortization Net Amount
Customer relationships
10-15
 8.9 $ 447.5  $ 176.4  $ 271.1  $ 409.0  $ 154.1  $ 254.9 
Tradenames and trademarks
 Indefinite
Indefinite
 105.0  —  105.0  107.5  —  107.5 
Tradename
 5 4.6 1.7  0.1  1.6  —  —  — 
Software
10-15
 8.4 20.3  8.6  11.7  20.3  7.5  12.8 
Noncompete agreements
3-8
4.4 3.0  0.4  2.6  0.3  0.2  0.1 
$ 577.5  $ 185.5  $ 392.0  $ 537.1  $ 161.8  $ 375.3 
1) Gross carrying amounts as of September 28, 2024 are presented net of the indefinite-lived tradenames and trademarks impairment. Refer to “Impairment of Indefinite-Lived Tradenames and Trademarks” below for further details.
Changes to gross carrying amount of recognized intangible assets due to translation adjustments include a gain of $0.7 and $0.8 for the periods ended September 28, 2024 and December 30, 2023, respectively. The amortization of intangible assets is included in the general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income. Amortization expense was approximately $8.2 and 7.4 for the three month periods ended September 28, 2024 and September 30, 2023, respectively, and $23.7 and $22.3 for the nine month periods ended September 28, 2024 and September 30, 2023, respectively.
Impairment of Indefinite-Lived Tradenames and Trademarks
We account for business acquisitions in accordance with ASC 805, “Business Combinations”. This standard requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed in the transaction and establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Goodwill and Indefinite-Lived Tradenames and Trademarks are recognized as a result of business combinations the company has made. ASC 350, “Intangibles – Goodwill and Other” requires us to perform qualitative assessments to determine whether it is more likely than not that the fair value of an asset exceeds its carrying amount. If a qualitative assessment determines an impairment is more likely than not, the Company is required to perform a quantitative impairment test. Otherwise, no further analysis is required. Alternatively, the Company may elect to proceed directly to the quantitative impairment test. In conducting a qualitative assessment, the Company analyzes actual and projected growth trends for revenue and margin, as well as historical performance versus plan and the results of prior quantitative tests performed. Additionally, the Company assesses factors that may impact its business, including macroeconomic conditions and the related impact, market-related exposures, plans to market for sale all or a portion of the business, competitive changes, new or discontinued product lines, changes in key personnel, and any potential risks to projected financial results.
During the three months ended September 28, 2024, the Company has experienced a revenue decline relative to expectations, historical performance, and strategic plans. This decrease was primarily driven by soft demand resulting from elevated interest rates and broader macroeconomic uncertainties, as well as a decline in stock price. Given these qualitative factors, the Company determined it was more likely than not that the fair value of the acquired assets could be impaired. Consequently, the Company performed a quantitative test of goodwill and indefinite-lived tradenames and trademarks as of September 28, 2024, ahead of the scheduled annual impairment test on September 29, 2024. This test applied a 50/50 weighting to both the discounted cash flow and guideline public company methods.
The quantitative test indicated that the carrying value of the DBCI tradename exceeded its fair value, leading the Company to record a non-cash impairment of $2.8 for the three and nine month periods ended September 28, 2024. The impairment was recorded in the caption “Impairment” in our Condensed Consolidated Statements of Operations and Comprehensive Income. No other impairments were identified in the quantitative test performed.
If assumptions or estimates with respect to future performance vary from what is expected, including those assumptions related to revenue, margins, and economic indicators such as inflation and interest rates, it could result in a decline in fair value that may trigger future impairments.
(dollar amounts in millions)
Tradenames and Trademarks
Balance as of December 30, 2023 $ 107.5 
 Foreign Currency Translation Adjustment 0.3 
 Impairment
 $ (2.8)
Balance as of September 28, 2024 $ 105.0 
Goodwill
The changes in the carrying amounts of goodwill for the period ended September 28, 2024 were as follows:
(dollar amounts in millions)
 Janus North America Janus International Consolidated
Balance as of December 30, 2023 $ 357.0  $ 11.6  $ 368.6 
 Terminal Door Asset Acquisition
 14.7  —  14.7 
 Foreign Currency Translation Adjustment —  0.6  0.6 
Balance as of September 28, 2024 $ 371.7  $ 12.2  $ 383.9