Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets

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Goodwill and Intangible Assets
3 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets  
Note 6 - Goodwill and Intangible Assets

6. Goodwill and Intangible Assets

 

Goodwill

 

Goodwill assets as of December 31, 2021 and September 30, 2021 consisted of the following:

 

 

 

December 31, 2021

 

 

September 30, 2021

 

Goodwill beginning balance

 

$ 63,443

 

 

$ 63,443

 

Impairment charges

 

 

(2,150 )

 

 

-

 

Goodwill ending balance

 

$ 61,293

 

 

$ 63,443

 

 

The Company recently completed its annual goodwill impairment assessment, as of September 30, 2021, and determined that its goodwill was not impaired. The amount of discount inherent in the Company’s market capitalization as recently reported on the NYSE American exchange when compared with consolidated stockholders’ equity, or net book value, has increased since September 30, 2021; therefore, the Company has performed an interim assessment of its goodwill for impairment as of December 31, 2021. As a result, the Company has recognized an impairment charge of $2,150 during the quarter ended December 31, 2021.  In reaching its most recent conclusion, management performed interim quantitative and qualitative analysis and adjusted the estimated fair values of its Professional Services and Industrial Services reporting units so that they reconcile more precisely with the Company’s market capitalization as of December 31, 2021, plus an assumed control premium. 

Intangible Assets

 

The following tables set forth the costs, accumulated amortization and net book value of the Company’s separately identifiable intangible assets as of December 31, 2021 and September 30, 2021 and estimated future amortization expense.

 

 

 

December 31, 2021

 

 

September 30, 2021

 

 

 

Cost

 

 

Accumulated Amortization

 

 

Net Book Value

 

 

Cost

 

 

Accumulated Amortization

 

 

Net Book Value

 

Customer relationships

 

$ 29,070

 

 

$ 16,503

 

 

$ 12,567

 

 

$ 29,070

 

 

$ 15,844

 

 

$ 13,226

 

Trade names

 

 

8,329

 

 

 

7,156

 

 

 

1,173

 

 

 

8,329

 

 

 

6,801

 

 

 

1,528

 

Total 

 

$ 37,399

 

 

$ 23,659

 

 

$ 13,740

 

 

$ 37,399

 

 

$ 22,645

 

 

$ 14,754

 

 

Estimated Amortization Expense

 

Remaining Fiscal 2022

 

$ 2,454

 

Fiscal 2023

 

 

2,879

 

Fiscal 2024

 

 

2,879

 

Fiscal 2025

 

 

2,741

 

Fiscal 2026

 

 

1,870

 

Thereafter

 

 

917

 

 

 

$ 13,740

 

The trade names are amortized on a straight-line basis over their respective estimated useful lives of between five and ten years. Intangible assets that represent customer relationships are amortized on the basis of estimated future undiscounted cash flows or using the straight-line basis over estimated remaining useful lives of five to ten years.

 

The amortization expense for intangible assets was $1,014 and $1,044 for three-month periods ended December 31, 2021 and 2020, respectively.