Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets

v3.24.2.u1
Goodwill and Intangible Assets
 12 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

9. GOODWILL AND INTANGIBLE ASSETS

Goodwill is an intangible asset that arises when a company acquires an existing business or assets (net of assumed liabilities) which comprise a business. In general, the amount of goodwill recorded in an acquisition is calculated as the purchase price of the business minus the fair market value of the tangible assets and the identifiable intangible assets, net of the assumed liabilities. Goodwill and intangibles can also be established by push-down accounting. Below is a summary of the significant transactions that generated our goodwill and intangible assets:

•
In connection with the Company's formation of AMST in August 2016, the Company recorded $2.5 million and $4.3 million of identifiable intangible assets and goodwill, respectively; these values were based upon an independent appraisal and represent their fair values at the acquisition date.
•
In connection with the Company's acquisition of Goldline in August 2017, 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 represent their fair values at the acquisition date.
•
In March 2021, the Company acquired 100% ownership of JMB, in which we previously held a 20.5% equity interest. At the acquisition date we measured the value of identifiable intangible assets and goodwill at $98.0 million and $92.1 million, respectively. These values represent their fair values at the acquisition date.
•
In October 2022, JMB acquired $4.5 million of intangible assets that included: BGASC’s website, domain name, trademarks, logos, customer list, and all intellectual property.
•
In connection with the Company's acquisition of LPM in February 2024, we recorded $10.3 million and $21.0 million of identifiable intangible assets and goodwill, respectively. These values represent their fair values at the acquisition date.
•
In March 2024, JMB acquired $8.5 million of intangible assets that included Gold.com's domain name.
•
In June 2024, we obtained a controlling interest in SGB, at which point SGB became a consolidated subsidiary of the company. We measured the value of identifiable intangible assets and goodwill at $28.8 million and $78.0 million, respectively. These values represent their fair values as of the acquisition date.

Carrying Value

The carrying value of goodwill and other purchased intangibles are described below (dollar amounts in thousands):

 

 

 

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

 

Estimated Useful Lives
(Years)

 

Remaining Weighted-Average Amortization Period
(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

 

4 - 15

 

4.4

 

$

75,568

 

 

$

(52,203

)

 

$

—

 

 

$

23,365

 

 

$

55,768

 

 

$

(46,465

)

 

$

—

 

 

$

9,303

 

Developed technology

 

4

 

3.4

 

 

20,336

 

 

 

(8,933

)

 

 

—

 

 

 

11,403

 

 

 

11,036

 

 

 

(6,077

)

 

 

—

 

 

 

4,959

 

Non-compete and other

 

3 - 5

 

3.3

 

 

2,310

 

 

 

(2,300

)

 

 

—

 

 

 

10

 

 

 

2,310

 

 

 

(2,300

)

 

 

—

 

 

 

10

 

Employment agreement

 

1 - 3

 

0.0

 

 

295

 

 

 

(295

)

 

 

—

 

 

 

—

 

 

 

295

 

 

 

(295

)

 

 

—

 

 

 

—

 

Intangibles subject to amortization

 

 

98,509

 

 

 

(63,731

)

 

 

—

 

 

 

34,778

 

 

 

69,409

 

 

 

(55,137

)

 

 

—

 

 

 

14,272

 

Trade names and trademarks

 

Indefinite

 

Indefinite

 

 

59,660

 

 

 

—

 

 

 

(1,290

)

 

 

58,370

 

 

 

49,648

 

 

 

—

 

 

 

(1,290

)

 

 

48,358

 

Domain name

 

Indefinite

 

Indefinite

 

 

8,515

 

 

 

—

 

 

 

—

 

 

 

8,515

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Identifiable intangible assets

 

$

166,684

 

 

$

(63,731

)

 

$

(1,290

)

 

$

101,663

 

 

$

119,057

 

 

$

(55,137

)

 

$

(1,290

)

 

$

62,630

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

Indefinite

 

Indefinite

 

$

201,301

 

 

$

—

 

 

$

(1,364

)

 

$

199,937

 

 

$

102,307

 

 

$

—

 

 

$

(1,364

)

 

$

100,943

 

The Company's intangible assets are subject to amortization except for trade names, trademarks, and domain names, which have indefinite lives. Amortization expense related to the Company's intangible assets was $8.6 million, $10.3 million, and $25.7 million for the years ended June 30, 2024, 2023, and 2022, respectively. For the presented periods, amortization expense allocable to cost of sales was not significant.

The changes in the carrying amounts of goodwill were as follows (in thousands):

Balance as of June 30, 2023

 

$

100,943

 

Goodwill acquired - LPM

 

 

21,034

 

Goodwill acquired - SGB

 

 

77,960

 

Balance as of June 30, 2024

 

$

199,937

 

Impairment

We recorded a non-recurring impairment charge of $2.7 million (goodwill and indefinite-lived intangible assets) in fiscal 2018 related to Goldline. Other than the impairment charge related to Goldline, we have not recorded any impairment of goodwill or indefinite-lived intangible assets.

Estimated Amortization

Estimated annual amortization expense related to definite-lived intangible assets for the succeeding five years is as follows (in thousands):

 

Fiscal Year Ending June 30,

 

Amount

 

2025

 

 

13,458

 

2026

 

 

7,798

 

2027

 

 

6,059

 

2028

 

 

4,866

 

2029

 

 

734

 

Thereafter

 

 

1,863

 

 

$

34,778