Goodwill and Intangible Assets

9 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

The carrying value of goodwill in the nine months ended March 31, 2018 increased by $25.6 million. This was due to the acquisition of the Boyd Business adding $25.7 million of goodwill as well as the final working capital adjustment made to the West Coast Coffee purchase price allocation which reduced goodwill by $0.1 million. The carrying value of goodwill at March 31, 2018 and June 30, 2017 was $36.6 million and $11.0 million, respectively.

The following is a summary of the Company’s amortized and unamortized intangible assets other than goodwill:



	March 31, 2018					June 30, 2017
(In thousands)	Gross Carrying Amount(1)		Accumulated Amortization(1)			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationships(2)	$	33,003	$	(12,300	)	$	17,353	$	(10,883	)
Non-compete agreements	220		(71		)	220		(38		)
Recipes	930		(188		)	930		(88		)
Trade name/brand name	510		(225		)	510		(84		)
Total amortized intangible assets	$	34,663	$	(12,784	)	$	19,013	$	(11,093	)
Unamortized intangible assets:
Trademarks, trade names and brand name with indefinite lives(3)	$	10,328	$	—		$	10,698	$	—
Total unamortized intangible assets	$	10,328	$	—		$	10,698	$	—
Total intangible assets	$	44,991	$	(12,784	)	$	29,711	$	(11,093	)

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(1) Reflects the preliminary purchase price allocation for the acquisition of the Boyd Business. Subject to change based on numerous factors, including the final estimated fair value of the assets acquired and the liabilities assumed and the amount of the final post-closing net working capital adjustment. Adjustments in the purchase price allocation may require an adjustment of the amounts allocated to goodwill.

(2) At March 31, 2018, reflects the adjustment of $15.0 million in customer relationships to goodwill in connection with the finalization of valuation inputs including growth assumptions, cost projections and discount rates which were used in the fair value calculation of intangible assets acquired in connection with the Boyd Business acquisition, and impairment charges of $0.3 million for customer relationships acquired in connection with the China Mist acquisition.

(3) At March 31, 2018 reflects the adjustment of $0.3 million in trade name/trademark from goodwill in connection with the finalization of valuation inputs including growth assumptions, cost projections and discount rates which were used in the fair value calculation of intangible assets acquired in connection with the Boyd Business acquisition, and impairment charges of $3.5 million for trade name/trademark acquired in connection with the China Mist acquisition.

Aggregate amortization expense for the three months ended March 31, 2018 and 2017 was $0.3 million and $0.1 million, respectively. Aggregate amortization expense for the nine months ended March 31, 2018 and 2017 was $1.7 million and $0.2 million, respectively.

The Company performed its annual test of impairment as of January 31, 2018, to determine the recoverability of the carrying values of goodwill and indefinite-lived intangible assets. The Company also assessed the recoverability of certain finite-lived intangible assets. As a result of these impairment tests, the Company determined that the trade name/trademark and customer relationships intangible assets acquired in connection with the China Mist acquisition were impaired as the carrying value exceeded the estimated fair value. Accordingly, the Company recorded total impairment charges of $3.8 million in the three and nine months ended March 31, 2018.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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