GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETSGoodwill was $497,388 and $512,595 as of September 30, 2023 and December 31, 2022, respectively.

The changes in the carrying amount of goodwill for the nine months ended September 30, 2023 were as follows:


	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Communications Segment		Consumer Segment		All Other		Total
Balance as of December 31, 2022	$	162,018	$	51,195	$	1,975	$	23,680	$	193,195	$	75,753	$	4,779	$	512,595

Acquisition of other business	—		—		—		9,443		—		—		2,428		11,871
Goodwill impairment	—		—		—		—		—		(27,500)		—		(27,500)
Other	—		—		—		9		672		3,668		(3,927)		422
Balance as of September 30, 2023	$	162,018	$	51,195	$	1,975	$	33,132	$	193,867	$	51,921	$	3,280	$	497,388

During the nine months ended September 30, 2023, the changes in goodwill included $9 of foreign currency translation amounts, $672 of working capital settlements as described in Note 4, $3,668 related to certain purchase price accounting adjustments, and $(3,927) related to the sale of certain assets.

Intangible assets consisted of the following:


		As of September 30, 2023						As of December 31, 2022
	Useful Life	Gross Carrying Value		Accumulated Amortization		Intangibles Net		Gross Carrying Value		Accumulated Amortization		Intangibles Net
Amortizable assets:
Customer relationships	1.0 to 16 Years	$	267,848	$	(109,635)	$	158,213	$	268,253	$	(87,049)	$	181,204
Domain names	7 years	185		(182)		3		185		(169)		16
Advertising relationships	8 years	100		(91)		9		100		(81)		19
Internally developed software and other intangibles	0.5 to 5 Years	28,330		(18,454)		9,876		28,295		(12,714)		15,581
Trademarks	3 to 10 Years	20,817		(7,553)		13,264		23,309		(6,307)		17,002
Total		317,280		(135,915)		181,365		320,142		(106,320)		213,822

Non-amortizable assets:
Tradenames		152,276		—		152,276		160,276		—		160,276
Total intangible assets		$	469,556	$	(135,915)	$	333,641	$	480,418	$	(106,320)	$	374,098

Amortization expense was $10,228 and $9,390 during the three months ended September 30, 2023 and 2022, respectively, and $30,804 and $23,146 during the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, estimated future amortization expense was $9,139, $33,142, $29,511, $26,384, and $24,018 for the

years ended December 31, 2023 (remaining three months), 2024, 2025, 2026 and 2027, respectively. The estimated future amortization expense after December 31, 2027 was $59,171.

The Company performs impairment tests for goodwill as of December 31 of each year and between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair values of the Company’s reporting units below their carrying values. As a result of the current financial performance of the Company’s Targus subsidiary which is included in the Consumer segment as well as current market conditions that exist in the personal computer market for computers and accessories, the Company updated its long-term forecasts. The Company performed an interim goodwill impairment quantitative assessment as of September 30, 2023, and based on the results of the analysis, the Company recorded a non-cash impairment charge of $35,500 consisting of a goodwill impairment charge of $27,500 and a tradename impairment charge of $8,000, which was recorded in impairment of goodwill and tradenames in the accompanying condensed consolidated statements of operations during the three months ended September 30, 2023. The Company previously recorded an impairment charge in the second quarter of 2023 for a tradename in the Capital markets segment that is no longer used by the Company.

Goodwill and tradename of the Company’s Targus subsidiary was measured at fair value on a nonrecurring basis as of September 30, 2023. The estimated fair value of goodwill was $51,921 and the estimated fair value of tradename was $27,000 as of September 30, 2023. The estimated fair value of the Company’s Targus reporting unit was calculated using a weighted-average of values determined from an income approach and a market approach. The income approach involves estimating the fair value of the reporting unit by discounting its estimated future cash flows using a discount rate that would be consistent with a market participant’s assumption. The market approach bases the fair value measurement on information obtained from observed stock prices of public companies and recent merger and acquisition transaction data of comparable entities. In order to estimate the fair value of goodwill and tradename, management must make certain estimates and assumptions that affect the total fair value of the reporting unit including, among other things, an assessment of market conditions, projected cash flows, discount rates, and growth rates. The inputs for the fair value calculations of the reporting unit included a 3% growth rate to calculate the terminal value, a discount rate of 18%, and with respect to tradenames, a royalty rate of 2%. Management’s estimates of projected cash flows related to the reporting unit include, but are not limited to, future earnings of the reporting unit using revenue growth rates, gross margins, and other cost assumptions consistent with the reporting unit's historical trends, and working capital requirements and future capital expenditures necessary to fund future operations. The assumptions in the fair value measurement reflect the current market environment, industry-specific factors and company-specific factors.