Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets

v3.10.0.1
Goodwill and Intangible Assets
3 Months Ended
Sep. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
GOODWILL AND INTANGIBLE ASSETS
In connection with the acquisition of A-Mark by Former Parent on July 1, 2005, the accounts of the Company were adjusted using the push down basis of accounting to recognize the allocation of the consideration paid to the respective net assets acquired. In accordance with the push down basis of accounting, the Company's net assets were adjusted to their fair values as of the date of the acquisition based upon an independent appraisal.
Due to the Company's business combination with AMST that closed on August 31, 2016, the Company recorded an additional $2.5 million and $4.3 million of identifiable intangible assets and goodwill, respectively; these values were based upon an independent appraisal. The Company’s investment in AMST has resulted in synergies between the acquired minting operation and the Company’s established distribution network by providing a more steady and reliable fabricated source of silver during times of market volatility. The Company considers that much of the acquired goodwill relates to the “ready state” of AMST's established minting operation with existing quality processes, procedures and ability to scale production to meet market needs. 
Due to the Company's acquisition of Goldline (see Note 1), the Company recorded $5.0 million and $1.4 million of additional identifiable intangible assets and goodwill, respectively; these values were based upon an independent appraisal and represents their fair values at the acquisition date. The Company’s investment in Goldline created synergies between Goldline's direct marketing operation and the Company’s established distribution network, secured storage and lending operations that is expected to lead to increased product margin spreads, lower distribution and storage costs for Goldline, and a larger customer base for the Company's secured lending operations.
The carrying value of goodwill and other purchased intangibles as of September 30, 2018 and June 30, 2018 is as described below:
dollar amounts in thousands
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2018
 
June 30, 2018

Estimated Useful Lives (Years)
 
Gross Carrying Amount
 
Accumulated Amortization
 
Accumulated Impairment
 
Net Book Value
 
Gross Carrying Amount
 
Accumulated Amortization
 
Accumulated Impairment
 
Net Book Value
Identifiable intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Existing customer relationships
5 - 15
 
8,848

 
(5,694
)
 

 
3,154

 
8,848

 
(5,467
)
 

 
3,381

Non-compete and other
3 - 5
 
2,300

 
(2,072
)
 

 
228

 
2,300

 
(2,056
)
 

 
244

Employment agreement
3
 
295

 
(231
)
 

 
64

 
295

 
(222
)
 

 
73

Intangibles subject to amortization
 
11,443

 
(7,997
)
 

 
3,446

 
11,443

 
(7,745
)
 

 
3,698

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade name
Indefinite
 
$
4,454

 
$

 
$
(1,291
)
 
$
3,163

 
$
4,454

 
$

 
$
(1,291
)
 
$
3,163

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Identifiable intangible assets
 
$
15,897

 
$
(7,997
)
 
$
(1,291
)
 
$
6,609

 
$
15,897

 
$
(7,745
)
 
$
(1,291
)
 
$
6,861

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
Indefinite
 
$
10,245


$

 
$
(1,364
)
 
$
8,881

 
$
10,245

 
$

 
$
(1,364
)
 
$
8,881

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

The Company's intangible assets are subject to amortization except for trade-names, which have an indefinite life. Intangible assets subject to amortization are amortized using the straight-line method over their useful lives, which are estimated to be three to fifteen years. Amortization expense related to the Company's intangible assets for the three months ended September 30, 2018 and 2017 was $252,000 and $157,000, respectively.
Impairment
    The accumulated impairment charge of $2.7 million (goodwill and indefinite-lived intangible assets) was a one-time charge for fiscal 2018. No further impairment of goodwill or intangible assets has occurred for the three months ended September 30, 2018.
Estimated Amortization
Estimated amortization expense on an annual basis for the succeeding five years is as follows (in thousands):
Fiscal Year Ending June 30,
 
Amount
2019 (9 months remaining)
 
$
759

2020
 
1,011

2021
 
599

2022
 
571

2023
 
128

Thereafter
 
378

Total
 
$
3,446