Goodwill and Intangible Assets

9 Months Ended

Oct. 26, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The Company’s goodwill balance was $332.4 million and $312.0 million as of October 26, 2024 and January 27, 2024, respectively. Changes in the carrying amount of goodwill consisted of the following (dollars in thousands):


	Goodwill		Accumulated Impairment Losses		Total
Balance as of January 27, 2024	$	561,022	$	(249,031)	$	311,991
Goodwill adjustment from fiscal 2024 acquisition	(244)		—		(244)
Goodwill from fiscal 2025 acquisitions	20,627		—		20,627
Balance as of October 26, 2024	$	581,405	$	(249,031)	$	332,374

The Company’s goodwill resides in multiple reporting units and primarily consists of expected synergies, together with the expansion of our geographic presence and strengthening of our customer base from acquisitions. Goodwill and other indefinite-lived intangible assets are assessed annually, or more frequently if events occur that would indicate a potential reduction in the fair value of a reporting unit below its carrying value. The profitability of individual reporting units may suffer periodically due to downturns in customer demand, increased costs of providing services, and the level of overall economic activity. Our customers may reduce capital expenditures and defer or cancel pending projects due to changes in technology, a slowing or uncertain economy, merger or acquisition activity, a decision to allocate resources to other areas of their business, or other reasons. The profitability of reporting units may also suffer if actual costs of providing services exceed the costs anticipated when the Company enters into contracts. Additionally, adverse conditions in the economy and future volatility in the equity and credit markets could impact the valuation of our reporting units. The cyclical nature of our business, the high level of competition existing within our industry, and the concentration of our revenues from a limited number of customers may also cause results to vary. These factors may affect individual reporting units disproportionately, relative to the Company as a whole. As a result, the performance of one or more of the reporting units could decline, resulting in an impairment of goodwill or intangible assets.

During the third quarter of fiscal 2025, we acquired certain assets and assumed certain liabilities of a telecommunications construction contractor for a cash purchase price of $150.7 million. The purchase price was allocated based on the fair value of the assets acquired and the liabilities assumed on the date of acquisition. The excess purchase price over the estimated fair value of the net assets acquired was recognized as goodwill and totaled $12.0 million, which is deductible for tax purposes. See Note 5, Acquisitions, for more information regarding the acquisition.

During the second quarter of fiscal 2025, the Company acquired a telecommunications construction contractor for $24.5 million ($20.4 million purchase price plus cash acquired of $4.1 million). The purchase price was allocated based on the fair value of the assets acquired and the liabilities assumed on the date of acquisition. The excess purchase price over the estimated fair value of the net assets acquired was recognized as goodwill and totaled $5.4 million, which is deductible for tax purposes. See Note 5, Acquisitions, for more information regarding the acquisition.

During the first quarter of fiscal 2025, the Company acquired a telecommunications construction contractor for $16.0 million ($12.8 million purchase price, plus cash acquired of $3.2 million). The purchase price was allocated based on the fair value of the assets acquired and the liabilities assumed on the date of acquisition. The excess purchase price over the estimated fair value of the net assets acquired was recognized as goodwill and totaled $3.2 million, which is deductible for tax purposes. See Note 5, Acquisitions, for more information regarding the acquisition.

The Company performs its annual goodwill assessment as of the first day of the fourth fiscal quarter of each fiscal year. As a result of the Company’s fiscal 2024 period assessment, the Company determined that the fair values of each of the reporting units and the indefinite-lived intangible asset were in excess of their carrying values and no impairment had occurred. As of October 26, 2024, we believe the carrying amounts of goodwill and the indefinite-lived intangible asset are recoverable for all of our reporting units.

Intangible Assets

Our intangible assets consisted of the following (dollars in thousands):


	October 26, 2024							January 27, 2024
	Weighted Average Remaining Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization		Intangible Assets, Net		Gross Carrying Amount		Accumulated Amortization		Intangible Assets, Net
Customer relationships	9.9	$	451,117	$	262,250	$	188,867	$	338,117	$	245,512	$	92,605
Trade names, finite	8.6	14,080		9,146		4,934		13,050		8,723		4,327
Trade name, indefinite	Indefinite	4,700		—		4,700		4,700		—		4,700
Contract backlog	1.8	37,630		8,507		29,123		11,600		4,335		7,265
Non-compete agreements	3.0	75		30		45		75		18		57
		$	507,602	$	279,933	$	227,669	$	367,542	$	258,588	$	108,954

Amortization of our customer relationship intangibles and our contract backlog intangibles are recognized on an accelerated basis as a function of the expected economic benefit. Amortization of our other finite-lived intangibles is recognized on a straight-line basis over the estimated useful life. Amortization expense for finite-lived intangible assets was $9.6 million and $6.0 million for the three months ended October 26, 2024 and October 28, 2023, respectively and $21.3 million and $13.0 million for the nine months ended October 26, 2024 and October 28, 2023.

As of October 26, 2024, total amortization expense for existing finite-lived intangible assets for the next five fiscal years and thereafter is as follows (dollars in thousands):


	Amount
Remainder of 2025	$	9,888
2026	47,749
2027	38,069
2028	26,301
2029	19,160
2030	18,687
Thereafter	63,115
Total	$	222,969

As of October 26, 2024, we believe that the carrying amounts of our intangible assets are recoverable. However, if adverse events were to occur or circumstances were to change indicating that the carrying amount of such assets may not be fully recoverable, the assets would be reviewed for impairment and the assets could be impaired.