Goodwill and Intangible Assets

9 Months Ended

Jun. 27, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

The following table summarizes the changes in the carrying value of goodwill by reportable segment:


	GSG		CIG		Total
	(in thousands)
Balance at September 27, 2020	$	516,315	$	477,183	$	993,498
Acquisition activity	14,891		3,675		18,566

Translation	10,099		29,633		39,732
Balance at June 27, 2021	$	541,305	$	510,491	$	1,051,796

Our goodwill balances reflect foreign currency translation adjustments related to our foreign subsidiaries with functional currencies that are different than our reporting currency. These amounts are presented net of reductions from historical impairment adjustments. The gross amounts of goodwill for GSG were $559.0 million and $534.0 million at June 27, 2021 and September 27, 2020, respectively, excluding accumulated impairment of $17.7 million for each period. The gross amounts of goodwill for CIG were $632.0 million and $598.7 million at June 27, 2021 and September 27, 2020, respectively, excluding accumulated impairment of $121.5 million for each period.

We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our most recent annual review at June 29, 2020 (i.e. the first day of our fourth quarter in fiscal 2020) indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill. All of our reporting units had estimated fair values that exceeded their carrying values by more than 80%, with the exception of our former Asia/Pacific ("ASP") reporting unit, which was in our CIG reportable segment. Our former ASP reporting unit had an estimated fair value that exceeded its carrying value by less than 20%.

We also regularly evaluate whether events and circumstances have occurred that may indicate a potential change in the recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, such as a deterioration in general economic conditions; an increase in the competitive environment; a change in management, key personnel, strategy or customers; negative or declining cash flows; or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. Although we believe that our estimates of fair value for these reporting units are reasonable, if financial performance for these reporting units falls significantly below our expectations or market prices for similar business decline, the goodwill for these reporting units could become impaired.

On September 2, 2020, Australia announced that it had fallen into economic recession, defined as two consecutive quarters of negative growth, for the first time since 1991 including 7% negative growth in the quarter ending June 30, 2020. This prompted a strategic review of our former ASP reporting unit. As a result of the economic recession in Australia, our revenue growth and profit margin forecasts for our former ASP reporting unit declined from the previous forecast used for our annual goodwill impairment review as of June 29, 2020. We also performed an interim goodwill impairment review of our former ASP reporting unit in September 2020 and recorded a $15.8 million goodwill impairment charge. As a result of the impairment charge, the estimated fair value of our former ASP reporting unit equaled its carrying value of $144.9 million, including $95.5 million of goodwill, at September 27, 2020. On September 28, 2020 (the first day of our fiscal 2021), we merged our former ASP reporting unit into our Client Account Management reporting unit.

The following table presents the gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in “Intangible assets, net” on the consolidated balance sheets:


	June 27, 2021					September 27, 2020
	Weighted- Average Remaining Life (in Years)	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
	($ in thousands)
Client relations	2.5	$	48,444	$	(42,587)	$	60,775	$	(53,392)
Backlog	0.7	32,292		(30,027)		37,682		(32,761)
Trade names	1.6	7,162		(6,124)		7,964		(6,325)
Total		$	87,898	$	(78,738)	$	106,421	$	(92,478)

Amortization expense for the three and nine months ended June 27, 2021 was $2.2 million and $7.8 million, respectively, compared to $2.6 million and $9.0 million for the prior-year periods. Estimated amortization expense for the remainder of fiscal 2021 and succeeding years is as follows:


	Amount
	(in thousands)
2021	$	2,093
2022	4,072
2023	2,138
2024	754
2025	103
Total	$	9,160