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GOODWILL AND INTANGIBLE ASSETS, NET | 12 Months Ended
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Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET The following table displays a rollforward of the carrying amount of goodwill by reportable segment:
| U.S. Consumer |  | Hawthorne |  | Other |  | Total
Goodwill | $ | 245.7 |  |  | $ | 444.8 |  |  | $ | 11.1 |  |  | $ | 701.6 |
Accumulated impairment losses | (1.8) |  |  | (94.6) |  |  | — |  |  | (96.4) |
Balance at September 30, 2021 | 243.9 |  |  | 350.2 |  |  | 11.1 |  |  | 605.2 |
Acquisitions and measurement-period adjustments | — |  |  | 180.8 |  |  | — |  |  | 180.8 |
Foreign currency translation | — |  |  | (8.6) |  |  | (1.0) |  |  | (9.6) |
Impairment | — |  |  | (522.4) |  |  | — |  |  | (522.4) |
Goodwill | $ | 245.7 |  |  | $ | 617.0 |  |  | $ | 10.1 |  |  | $ | 872.8 |
Accumulated impairment losses | (1.8) |  |  | (617.0) |  |  | — |  |  | (618.8) |
Balance at September 30, 2022 | 243.9 |  |  | — |  |  | 10.1 |  |  | 254.0 |
Foreign currency translation | — |  |  | — |  |  | 0.2 |  |  | 0.2 |
Impairment | — |  |  | — |  |  | (10.3) |  |  | (10.3) |
Goodwill | $ | 245.7 |  |  | $ | 617.0 |  |  | $ | 10.3 |  |  | $ | 873.0 |
Accumulated impairment losses | (1.8) |  |  | (617.0) |  |  | (10.3) |  |  | (629.1) |
Balance at September 30, 2023 | $ | 243.9 |  |  | $ | — |  |  | $ | — |  |  | $ | 243.9 |
The following table presents intangible assets, net of accumulated amortization and impairment charges:
| September 30, 2023 |  | September 30, 2022
| Gross Carrying Amount |  | Accumulated Amortization/ Impairment Charges |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization/ Impairment Charges |  | Net Carrying Amount
Finite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |
Trade names | $ | 322.4 |  |  | $ | (260.7) |  |  | $ | 61.7 |  |  | $ | 318.4 |  |  | $ | (174.3) |  |  | $ | 144.1 |
Customer relationships | 251.5 |  |  | (216.1) |  |  | 35.4 |  |  | 251.1 |  |  | (158.4) |  |  | 92.7 |
Technology | 50.1 |  |  | (44.5) |  |  | 5.6 |  |  | 49.1 |  |  | (43.3) |  |  | 5.8 |
Other | 34.9 |  |  | (24.8) |  |  | 10.1 |  |  | 34.7 |  |  | (21.0) |  |  | 13.7 |
Total finite-lived intangible assets, net |  |  |  |  | 112.8 |  |  |  |  |  |  | 256.3 |
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |
Indefinite-lived trade names |  |  |  |  | 168.2 |  |  |  |  |  |  | 168.2 |
Roundup® marketing agreement amendment |  |  |  |  | 155.7 |  |  |  |  |  |  | 155.7 |
Total indefinite-lived intangible assets |  |  |  |  | 323.9 |  |  |  |  |  |  | 323.9 |
Total intangible assets, net |  |  |  |  | $ | 436.7 |  |  |  |  |  |  | $ | 580.2 |
During fiscal 2023, the Company’s Hawthorne segment continued to experience adverse financial results due to decreased sales volume and inflationary cost pressures. The decrease in sales volume is attributable to an oversupply of cannabis, which significantly decreased cannabis wholesale prices and indoor and outdoor cannabis cultivation. The oversupply has been driven by increased licensing activity across the U.S., significant capital investment in the cannabis production marketplace over the past several years, inconsistent enforcement of regulations and the market impacts of the COVID-19 pandemic. As a result, the Company revised its internal forecasts to reflect the longer persistence and more significant impact of the oversupply of cannabis. These changes in circumstances indicated that the carrying amounts of Hawthorne’s long-lived assets, including trade names and customer relationships, may not be recoverable. Accordingly, the Company performed a recoverability test for long-lived assets during the fourth quarter of fiscal 2023. The Company concluded that the carrying value of these long-lived assets exceeded their estimated fair value and recorded non-cash, pre-tax impairment charges of $72.0 related to trade names and $45.7 related to customer relationships during the fourth quarter of fiscal 2023 in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations. The fair values of long-lived assets were determined using income-based approaches, including the relief-from-royalty method for trade names, that include market participant expectations of cash flows that the assets will generate over the remaining useful life discounted to present value using an appropriate discount rate. These fair value estimates utilize significant unobservable inputs and thus represent Level 3 fair value measurements. The Company performed annual goodwill impairment testing as of the first day of its fourth quarter of fiscal 2023. This test resulted in a non-cash, pre-tax goodwill impairment charge of $10.3 related to the Other segment, which was recorded during the fourth quarter of fiscal 2023 in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations. The impairment was driven by revisions to the Company’s internal forecasts in response to decreased sales volume and inflationary cost pressures. The carrying value of goodwill of the Other segment reporting unit, after recognizing the impairment, is zero. The estimated fair value of the Other segment reporting unit was based upon an equal weighting of the income-based and market-based approaches, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows, as well as valuation multiples derived from comparable publicly traded companies that are applied to operating performance of the reporting unit. The fair value estimate utilizes significant unobservable inputs and thus represents a Level 3 fair value measurement. The Company performed a recoverability test for Hawthorne’s long-lived assets during the third quarter of fiscal 2022. The Company concluded that the carrying value of these long-lived assets exceeded their estimated fair value and recorded non-cash, pre-tax impairment charges of $69.0 related to trade names and $41.0 related to customer relationships during the third quarter of fiscal 2022 in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations. After adjusting the carrying values of the finite-lived intangible assets, the Company completed an interim quantitative impairment test for goodwill during the third quarter of fiscal 2022. This quantitative test resulted in a non-cash, pre-tax goodwill impairment charge of $522.4 related to the Hawthorne reporting unit, which was recorded during the third quarter of fiscal 2022 in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations. The carrying value of goodwill of the Hawthorne reporting unit, after recognizing the impairment, is zero. During fiscal 2022, the Company also recorded additional non-cash, pre-tax finite-lived intangible asset impairment charges of $35.3, comprised of $22.5 related to trade names and $12.8 related to customer relationships, during the fourth quarter of fiscal 2022 in the “Impairment, restructuring and other” line in the Consolidated Statements of Operations associated with its decision to discontinue and exit the market for certain Hawthorne lighting products and brands. Total amortization expense was $25.2, $37.1 and $30.9 for fiscal 2023, fiscal 2022 and fiscal 2021, respectively. Amortization expense is estimated to be as follows for the years ending September 30:
2024 | $ | 16.0 |
2025 | 13.3 |
2026 | 12.2 |
2027 | 11.3 |
2028 | 10.3 |

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