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Intangible Assets
12 Months Ended
Jun. 30, 2020
Goodwill And Intangible Assets Disclosure [Abstract]  
Intangible Assets

7.Intangible Assets

Our other intangible assets as of June 30, 2020 and 2019 are as follows (in thousands):

 

 

 

June 30, 2020

 

 

June 30, 2019

 

 

 

Gross

 

 

 

 

 

 

 

 

 

 

Net

 

 

Gross

 

 

 

 

 

 

 

 

 

 

Net

 

 

 

Carrying

 

 

Impairments

 

 

Accumulated

 

 

Carrying

 

 

Carrying

 

 

Impairments

 

 

Accumulated

 

 

Carrying

 

 

 

Amount

 

 

 

 

 

 

Amortization

 

 

Amount

 

 

Amount

 

 

 

 

 

 

Amortization

 

 

Amount

 

Customer/Distributor Relationships

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

3,249

 

 

$

(589

)

 

$

(2,660

)

 

$

-

 

Trade Name

 

 

1,674

 

 

 

(558

)

 

 

(1,116

)

 

 

-

 

 

 

2,523

 

 

 

(795

)

 

 

(1,067

)

 

 

661

 

Software

 

 

2,104

 

 

 

-

 

 

 

(1,004

)

 

 

1,100

 

 

 

1,902

 

 

 

-

 

 

 

(747

)

 

 

1,155

 

Total

 

$

3,778

 

 

$

(558

)

 

$

(2,120

)

 

$

1,100

 

 

$

7,674

 

 

$

(1,384

)

 

$

(4,474

)

 

$

1,816

 

 

 

In the third quarter of fiscal 2020, the Company determined there was a triggering event caused by the economic impacts of the COVID-19 pandemic and related restrictions. As a result, the Company assessed whether the carrying amounts of its long-lived assets in the CMM reporting unit (the asset group) may not be recoverable and therefore may be impaired. To assess the recoverability, the undiscounted cash flows of the asset group were analyzed over a range of potential remaining useful lives. The result was that the asset group carrying value exceeded the sum of the undiscounted cash flows. After a fair value analysis, it was determined the trade name was not recoverable and was impaired. As a result, the Company recorded a non-cash impairment loss of $0.5 million in the third quarter of fiscal 2020, which is not deductible for income tax purposes.

 

In the fourth quarter of fiscal 2019, due to impairment indicators, we assessed whether the carrying amounts of our long-lived assets in the CMM reporting unit (asset group) may not be recoverable and therefore may be impaired.  To assess the recoverability, the undiscounted cash flows of the asset group were analyzed over a range of potential remaining useful lives.  The result was that the asset group carrying value exceeded the sum of the undiscounted cash flows. After a fair value analysis, we determined our trade name and customer relationships were not recoverable and were impaired.  As a result, we recorded a non-cash definite-lived asset impairment loss of $0.6 million and $0.8 million, respectively, for the Customer/Distributor Relationship and Trade Name intangible assets, which is recorded in “Severance, impairment and other charges” on our Consolidated Statement of Operations.  We also reviewed the remaining useful life of our Trade Name and determined that no significant change was necessary

The impairments were determined by comparing the fair value of each of the intangible assets to their respective carrying value.  The fair value of the trade name was determined using the relief from royalty method and the fair value of the customer relationships were determined using the income approach.

 

Amortization expense for the fiscal years ended June 30, 2020 and 2019 was $343,000 and $956,000, respectively.

The estimated amortization of the remaining intangible assets by year is as follows (in thousands):

 

Years Ending June 30,

 

Amount

 

2021

 

 

278

 

2022

 

 

316

 

2023

 

 

281

 

2024

 

 

225

 

 

 

$

1,100

 

Collectively, the weighted average amortization period of intangible assets subject to amortization is approximately 4.0 years.  Software is amortized based on forecasted utilization over the economic life of the software program.