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Note E - Goodwill and Intangible Assets

12 Months Ended

Sep. 27, 2025

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE E – 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 27, 2025				September 28, 2024
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization

FOOD SERVICE

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

Amortized intangible assets
Trade names		2,515		2,515		4,024		1,006
Franchise agreements		8,500		2,763		8,500		1,913
Customer relationships		23,550		14,749		23,550		12,369
Technology		23,110		7,493		23,110		5,170
License and rights		1,690		1,734		1,690		1,650
TOTAL FOOD SERVICE	$	144,789	$	29,254	$	146,298	$	22,108

RETAIL SUPERMARKETS

Indefinite lived intangible assets
Trade names	$	11,181	$	-	$	11,938	$	-

TOTAL RETAIL SUPERMARKETS	$	11,181	$	-	$	11,938	$	-


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		968		1,439		844
Licenses and rights		1,400		1,352		1,400		1,282
TOTAL FROZEN BEVERAGES	$	48,254	$	2,320	$	48,254	$	2,126

CONSOLIDATED	$	204,224	$	31,574	$	206,490	$	24,234

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 10 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.

In connection with our quarterly triggering event analyses conducted during fiscal year 2025, we determined that the carrying amounts of one of our indefinite trade names exceeded its fair value as of September 27, 2025. As a result, the Company recorded an intangible asset impairment charge of $0.8 million in the fourth quarter of fiscal 2025. The intangible asset impairment charge is reflected in Intangible asset impairment charges in the Consolidated Statements of Earnings. The $0.8 million intangible asset impairment charge related to a trade name in the Retail Supermarket segment.

Additionally, we determined that the carrying amount of one of our amortizing trade names exceeded its fair value as of June 28, 2025. As a result, the Company recorded an intangible asset impairment charge of $1.5 million in the third quarter of fiscal 2025. The intangible asset impairment charge is reflected in Intangible asset impairment charges in the Consolidated Statements of Earnings. The $1.5 million intangible asset impairment charge related to trade names in the Food Service segment.

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 years 2025 or 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 2025, 2024, and 2023 was $7.3 million, $7.2 million, and $6.5 million, respectively.

Estimated amortization expense for the next five fiscal years is approximately $5.6 million in 2026, $4.7 million in 2027, $4.3 million in 2028 and 2029, and $4.2 million in 2030.

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, and 10 years for Franchise agreements.

Goodwill

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

	September 27,		September 28,
	2025		2024
	(in thousands)
Food Service	$	124,426	$	124,426
Retail Supermarket		4,146		4,146
Frozen Beverages		56,498		56,498
Total goodwill	$	185,070	$	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 2025, 2024, and 2023 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 2025, 2024, or 2023.

No goodwill was acquired in fiscal year 2025 or 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.