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Goodwill and Other Intangible Assets | 9 Months Ended
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Jun. 30, 2014
Goodwill and Other Intangible Assets [Abstract] |
Goodwill and Other Intangible Assets | Note 13. Goodwill and Other Intangible Assets Goodwill related to business combinations is not amortized, but is subject to annual review for impairment. In general, when the carrying value of a reporting unit exceeds its implied fair value, an impairment loss may need to be recognized. For purposes of testing for impairment, the Company uses a discounted cash flow technique. A number of assumptions and estimates are involved in the application of the discounted cash flow model to forecast operating cash flows, including sales volumes and pricing, costs to produce, tax rates, capital spending, working capital changes, and discount rate. The Company estimates future cash flows using volume and pricing assumptions based largely on existing customer relationships and contracts, and operating cost assumptions management believes are reasonable based on historical performance and projected future performance as reflected in its most recent operating plans and projections. The discount rate used in the discounted cash flow analysis was developed with the assistance of valuation experts and management believes it appropriately reflects the risks associated with the Company’s operating cash flows. In order to further validate the reasonableness of the estimated fair values of the reporting units as of the valuation date, a reconciliation of the aggregate fair values of all reporting units to market capitalization was performed using a reasonable control premium. The Company performed its annual impairment review in the second quarter of fiscal 2014 and determined that for all reporting units, except Graphics Imaging, the estimated fair value significantly exceeded carrying value so no adjustments to the carrying value of goodwill were necessary at March 31, 2014. As discussed in the Company’s Annual Report on Form 10-K for the year ended September 30, 2013, recent economic conditions in Europe have unfavorably impacted the operating results of the Graphics Imaging business. For the Graphics Imaging reporting unit, the estimated fair value exceeded its carrying value by less than 10%, resulting in no goodwill impairment for the unit. While the Graphics Imaging reporting unit passed the first step of the impairment test, if its operating profits or another significant assumption were to deteriorate in the future, it could adversely affect the estimated fair value of the reporting unit. Factors that could have a negative impact on the estimated fair value of the Graphics Imaging reporting unit include a further delay in the recovery of the European market, continued pricing pressure, declines in expected volumes, and an increase in discount rates. If the Company is unsuccessful in its plans to recover the profitability of this business, the estimated fair value could decline and lead to a potential goodwill impairment in the future. Trade names with indefinite lives are tested for impairment annually in the second quarter. Matthews performed a quantitative impairment evaluation of its trade names for 2014, and the test indicated the trade names were not impaired. A summary of the carrying amount of goodwill attributable to each segment as well as the changes in such amounts are as follows:
|  | Cemetery |  |  | Funeral Home |  |  |  |  |  | Graphics |  |  | Marking and Fulfillment |  |  | Merchandising |  |  |  |
|  | Products |  |  | Products |  |  | Cremation |  |  | Imaging |  |  | Products |  |  | Solutions |  |  | Consolidated |
Goodwill |  | $ | 99,707 |  |  | $ | 163,208 |  |  | $ | 17,823 |  |  | $ | 193,281 |  |  | $ | 50,646 |  |  | $ | 9,138 |  |  | $ | 533,803 |
Accumulated impairment losses |  |  | (412 | ) |  |  | - |  |  |  | (5,000 | ) |  |  | (3,840 | ) |  |  | - |  |  |  | - |  |  |  | (9,252 | )
Balance at September 30, 2013 |  |  | 99,295 |  |  |  | 163,208 |  |  |  | 12,823 |  |  |  | 189,441 |  |  |  | 50,646 |  |  |  | 9,138 |  |  |  | 524,551 |
Additions during period |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Translation and other adjustments |  |  | 334 |  |  |  | - |  |  |  | 269 |  |  |  | 2,056 |  |  |  | (60 | ) |  |  | - |  |  |  | 2,599 |
Goodwill |  |  | 100,041 |  |  |  | 163,208 |  |  |  | 18,092 |  |  |  | 195,337 |  |  |  | 50,586 |  |  |  | 9,138 |  |  |  | 536,402 |
Accumulated impairment losses |  |  | (412 | ) |  |  | - |  |  |  | (5,000 | ) |  |  | (3,840 | ) |  |  | - |  |  |  | - |  |  |  | (9,252 | )
Balance at June 30, 2014 |  | $ | 99,629 |  |  | $ | 163,208 |  |  | $ | 13,092 |  |  | $ | 191,497 |  |  | $ | 50,586 |  |  | $ | 9,138 |  |  | $ | 527,150 |
The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of June 30, 2014 and September 30, 2013, respectively.
|  | Carrying |  |  | Accumulated |  |  |  |
|  | Amount |  |  | Amortization |  |  | Net |
June 30, 2014: |  |  |  |  |  |  |  |  |
Trade names |  | $ | 23,140 |  |  | $ | - | * |  | $ | 23,140 |
Trade names |  |  | 3,042 |  |  |  | (2,202 | ) |  |  | 840 |
Customer relationships |  |  | 59,184 |  |  |  | (21,763 | ) |  |  | 37,421 |
Copyrights/patents/other |  |  | 10,257 |  |  |  | (9,443 | ) |  |  | 814 |
|  | $ | 95,623 |  |  | $ | (33,408 | ) |  | $ | 62,215 |
September 30, 2013: |  |  |  |  |  |  |  |  |  |  |  |
Trade names |  | $ | 22,878 |  |  | $ | - | * |  | $ | 22,878 |
Trade names |  |  | 3,034 |  |  |  | (2,142 | ) |  |  | 892 |
Customer relationships |  |  | 59,061 |  |  |  | (19,099 | ) |  |  | 39,962 |
Copyrights/patents/other |  |  | 10,116 |  |  |  | (8,746 | ) |  |  | 1,370 |
|  | $ | 95,089 |  |  | $ | (29,987 | ) |  | $ | 65,102 |
* Not subject to amortization |  |  |  |  |  |  |  |  |
The carrying amount of indefinite-lived trade names as of September 30, 2013 included an impairment loss of approximately $1.6 million in the Graphics Imaging segment that was recorded in the second quarter of fiscal 2013. The net change in intangible assets during the nine months ended June 30, 2014 included foreign currency fluctuations during the period and additional amortization. Amortization expense on intangible assets was $830 and $1,169 for the three-month periods ended June 30, 2014 and 2013, respectively. For the nine-month periods ended June 30, 2014 and 2013, amortization expense was $3,170 and $3,048, respectively. Amortization expense is estimated to be $963 for the remainder of 2014, $3,664 in 2015, $3,374 in 2016, $3,181 in 2017 and $3,163 in 2018.

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- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16323-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13816-109267 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13854-109267 + Details
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