XML 30 R14.htm IDEA: XBRL DOCUMENT

Note F - Goodwill and Intangible Assets

12 Months Ended

Sep. 28, 2024

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE F – GOODWILL AND INTANGIBLE ASSETS

Our reportable segments are Food Service, Retail Supermarket, and Frozen Beverages.

Intangible Assets

The carrying amount of acquired intangible assets for the reportable segments are as follows:

	September 28, 2024				September 30, 2023
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization

FOOD SERVICE

Indefinite lived intangible assets
Trade names	$	85,424	$	-	$	84,194	$	-

Amortized intangible assets
Trade names		4,024		1,006		-		-
Franchise agreements		8,500		1,913		8,500		1,063
Customer relationships		23,550		12,369		22,900		10,080
Technology		23,110		5,170		23,110		2,879
License and rights		1,690		1,650		1,690		1,565
TOTAL FOOD SERVICE	$	146,298	$	22,108	$	140,394	$	15,587

RETAIL SUPERMARKETS

Indefinite lived intangible assets
Trade names	$	11,938	$	-	$	11,938	$	-

Amortized intangible Assets
Customer relationships		7,700		7,700		7,687		7,256
TOTAL RETAIL SUPERMARKETS	$	19,638	$	7,700	$	19,625	$	7,256


FROZEN BEVERAGES

Indefinite lived intangible assets
Trade names	$	9,315	$	-	$	9,315	$	-
Distribution rights		36,100		-		36,100		-

Amortized intangible assets
Customer relationships		1,439		844		1,439		689
Licenses and rights		1,400		1,282		1,400		1,212
TOTAL FROZEN BEVERAGES	$	48,254	$	2,126	$	48,254	$	1,901

CONSOLIDATED	$	214,190	$	31,934	$	208,273	$	24,744

The gross carrying amount of intangible assets is determined by applying a discounted cash flow model to the future sales and earnings associated with each intangible asset or is set by contract cost. The amortization period used for definite lived intangible assets is set by contract period or by the period over which the bulk of the discounted cash flow is expected to be generated. We currently believe that we will receive the benefit from the use of the trade names and distribution rights classified as indefinite lived intangible assets indefinitely and they are therefore not amortized.

Licenses and rights, customer relationships, franchise agreements, technology, certain trade names, and non-compete agreements are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses.

Amortizing and indefinite lived intangibles are reviewed for impairment as events or changes in circumstances occur indicating that the carrying amount of the asset may not be recoverable. Indefinite lived intangibles are also reviewed annually at year end for impairment. Cash flow and sales analyses are used to assess impairment. The estimates of future cash flows and sales involve considerable management judgment and are based upon assumptions about expected future operating performance which include Level 3 inputs such as annual growth rates and discount rates. Assumptions used in these forecasts are consistent with internal planning. The actual cash flows and sales could differ from management’s estimates due to changes in business conditions, operating performance, economic conditions, competition, and consumer preferences.

In connection with our annual impairment assessment conducted during the fourth quarter of 2023, we determined that the carrying amounts of three trade names exceeded their fair value as of September 30, 2023. As a result, the Company recorded an indefinite lived intangible asset impairment charge of $1.7 million in the fourth quarter of 2023. The intangible asset impairment charge is reflected in Intangible asset impairment charges in the Consolidated Statements of Earnings. The $1.7 million intangible asset impairment charge related to trade names in the Food Service segment. There were no impairment charges recorded in fiscal 2024.

In fiscal year 2024, intangible assets of $5.9 million were added in the food service segment from the acquisition of the Thinsters business. There were no intangible assets acquired in the fiscal year 2023. The acquisition included an indefinite lived Trade name intangible asset with a fair value of $5.3 million, and an amortizing Customer relationship intangible asset with a fair value of $0.7 million. The Customer relationship intangible asset will amortize over a useful life of 10 years.

Aggregate amortization expense of intangible assets for the fiscal years 2024, 2023, and 2022 was $7.2 million, $6.5 million, and $3.5 million, respectively.

Estimated amortization expense for the next five fiscal years is approximately $7.6 million in 2025, $6.6 million in 2026, $4.7 million in 2027, and $4.3 million in 2028 and 2029.

The weighted amortization period of the intangible assets, in total, is 10.0 years. The weighted amortization period by intangible asset class is 10 years for Technology, 10 years for Customer relationships, 20 years for Licenses & rights, 10 years for Franchise agreements, and 2 years for Trade names.

Goodwill

The carrying amounts of goodwill for the reportable segments are as follows:

	Food		Retail		Frozen
	Service		Supermarket		Beverages		Total
	(in thousands)
September 28, 2024	$	124,426	$	4,146	$	56,498	$	185,070

September 30, 2023	$	124,426	$	4,146	$	56,498	$	185,070

The carrying value of goodwill is determined based on the excess of the purchase price of acquisitions over the estimated fair value of tangible and intangible assets. Goodwill is not amortized but is evaluated annually at year end by management for impairment. Our impairment analysis for fiscal years 2024, 2023, and 2022 was based on a combination of the income approach, which estimates the fair value of reporting units based on discounted cash flows, and the market approach, which estimates the fair value of reporting units based on comparable market prices and multiples. Under the income approach the Company used a discounted cash flow which requires Level 3 inputs such as: annual growth rates, discount rates based upon the weighted average cost of capital and terminal values based upon current stock market multiples. There were no impairment charges to goodwill in fiscal years 2024, 2023, or 2022.

No goodwill was acquired in fiscal year 2024. In fiscal year 2023, goodwill of $0.7 million was added in the food service segment from measurement period adjustments related to the prior year acquisition of Dippin’ Dots. In fiscal year 2022, goodwill of $62.6 million was added in the food service segment from the acquisition of Dippin’ Dots in the quarter ended June 25, 2022.