Goodwill and Other Identifiable Intangible Assets

12 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Identifiable Intangible Assets

In accordance with ASC 350, Intangibles - Goodwill and Other Intangible Assets, the Company performs its annual goodwill impairment test during the fourth quarter of each fiscal year, or whenever indicators of impairment are present. The reporting units utilized for goodwill impairment tests align directly with our operating segments, Specialty Technology Solutions and Modern Communications & Cloud. The testing includes the determination of each reporting unit's fair value using a discounted cash flows model compared to each reporting unit's carrying value. Key assumptions used in determining fair value include projected growth and operating margin, working capital requirements and discount rates. During fiscal years ended June 30, 2022 and 2021, no impairment charges related to goodwill were recorded. For the fiscal year ended June 30, 2020, the Company's projected growth and operating margins were impacted by the worldwide economic hardships created by COVID-19 and as such recognized a goodwill impairment charge of $119.0 million, which is recorded to the impairment charges line item in the Consolidated Income Statements.

Changes in the carrying amount of goodwill for the years ended June 30, 2022 and 2021, by reportable segment, are set forth in the table below.


	Specialty Technology Solutions		Modern Communications & Cloud		Total
	(in thousands)
Balance at June 30, 2020	$	16,370	$	197,918	$	214,288


Unrealized gain on foreign currency translation	—		4,589		4,589
Balance at June 30, 2021	$	16,370	$	202,507	$	218,877


Unrealized loss on foreign currency translation	—		(4,442)		(4,442)
Balance at June 30, 2022	$	16,370	$	198,065	$	214,435

The following table shows the Company’s identifiable intangible assets as of June 30, 2022 and 2021, respectively.


	June 30, 2022						June 30, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
	(in thousands)
Amortized intangible assets:
Customer relationships	$	137,366	$	79,147	$	58,219	$	139,262	$	68,716	$	70,546
Trade names	19,480		12,469		7,011		19,750		10,102		9,648
Non-compete agreements	2,410		2,396		14		2,410		2,271		139

Supplier partner program	4,085		2,051		2,034		4,085		1,621		2,464
Encryption key library	19,900		12,230		7,670		19,900		9,743		10,157
Developed technology	13,865		4,386		9,479		15,165		3,259		11,906
Total intangibles	$	197,106	$	112,679	$	84,427	$	200,572	$	95,712	$	104,860

During fiscal year 2020, the Company recorded $1.4 million in impairment charges in customer relationships, trade names and non-compete agreements related to the acquisition of Canpango. This charge is included in the impairment charges line item in the Consolidated Income Statements. No impairment charges were recognized in fiscal years ended June 30, 2022 and 2021.

The weighted-average amortization period for all intangible assets was approximately 10 years for the fiscal years ended June 30, 2022, 2021 and 2020. Amortization expense for continuing operations for the years ended June 30, 2022, 2021 and 2020 was $17.9 million, $19.5 million and $20.0 million, respectively, all of which relates to selling, general and administrative costs, not the cost of selling goods, and has been presented as such in the accompanying Consolidated Income Statements.

Estimated future amortization expense is as follows:


	Amortization Expense
	(in thousands)
Year Ended June 30,
2023	$	16,746
2024	16,642
2025	16,642
2026	12,775
2027	6,602
Thereafter	15,020
Total	$	84,427