Note O - Goodwill and Intangible Assets

6 Months Ended

Mar. 30, 2024

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note O—Goodwill and Intangible Assets

Components of intangible assets consist of the following (in thousands):

	March 2024							September 2023
	Cost		Accumulated Impairment Losses			Net Value		Cost		Accumulated Impairment Losses			Net Value		Economic Life
Goodwill:
Delta Group	$	18,592	$	(18,592	)	$	-	$	18,592	$	(9,812	)	$	8,780		N/A
Salt Life Group		19,917		-			19,917		19,917		-			19,917		N/A
Total goodwill, net	$	38,509	$	(18,592	)	$	19,917	$	38,509	$	(9,812	)	$	28,697
	March 2024							September 2023
		Cost		Accumulated Amortization			Net Value		Cost		Accumulated Amortization			Net Value
Intangibles:
Tradename/trademarks	$	16,000	$	(5,650	)	$	10,350	$	16,000	$	(5,384	)	$	10,616	20 – 30 yrs
Customer relationships		7,400		(4,323	)		3,077		7,400		(3,953	)		3,447	10 yrs
Technology		10,083		(3,959	)		6,124		10,083		(3,509	)		6574	10 yrs
License agreements		2,100		(1,095	)		1,005		2,100		(1,043	)		1,057	15 – 30 yrs
Non-compete agreements		1,657		(1,657	)		-		1,657		(1,657	)		-	4 – 8.5 yrs
Total intangibles, net	$	37,240	$	(16,684	)	$	20,556	$	37,240	$	(15,546	)	$	21,694

Goodwill represents the acquired goodwill net of the cumulative impairment losses recorded in fiscal years 2024, 2023 and 2011 of $8.8 million, $9.2 million and $0.6 million, respectively.

In the second quarter of fiscal year 2024, the Company recorded a goodwill impairment charge of $8.8 million associated with the DTG2Go reporting unit. This impairment resulted from an interim assessment of DTG2Go goodwill, which we were required to perform in the second quarter of fiscal year 2024 due to the adverse impact of market conditions on our current year profitability and estimated future business results and cash flows, as well as the significant decrease in our market capitalization because of a sustained decline in our common stock price. In order to determine the fair value of the DTG2Go reporting unit, we utilized discounted cash flow methodology to determine the present value of future discounted cash flows. 

Depending on the type of intangible assets, amortization is recorded under cost of goods sold or SG&A expenses. Amortization expense for intangible assets was $0.6 million for both the March 2024 and March 2023 quarters. Amortization expense for intangible assets was $1.1 million and $1.2 million, respectively, for the six months ended March 2024 and March 2023. Amortization expense is estimated to be approximately $2.3 million for the year ending September 2024, approximately $2.2 million for the years ending September 2025 and 2026, approximately $2.0 million for the year ending September 2027, and approximately $1.5 million for the year ending September 2028.