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Goodwill Other Intangible Assets and Other Long Term Assets | 12 Months Ended
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Sep. 30, 2022
Goodwill Intangible Assets And Other Long Term Assets Disclosure [Abstract] |
Goodwill Other Intangible Assets and Other Long Term Assets | 9. GOODWILL, OTHER INTANGIBLE ASSETS, AND OTHER LONG-TERM ASSETS: In August 2022, we expanded our presence in Texas by acquiring Endeavour Marina in Seabrook. In April 2022, through Northrop & Johnson, we acquired Superyacht Management, S.A.R.L., better known as SYM, a superyacht management company based in Golfe-Juan, France. In November 2021, we completed acquisitions for Intrepid Powerboats, a premier manufacturer of powerboats, and Texas MasterCraft, a watersports dealer in Northern Texas, for aggregate consideration of approximately $67.2 million (net of cash acquired of $9.4 million), including estimated contingent consideration of $6.0 million. Tangible assets acquired, net of liabilities assumed and cash acquired, totaled approximately $20.3 million; intangible assets acquired totaled $7.3 million; and total goodwill recognized was approximately $39.6 million. The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisitions. Approximately $10.7 million of goodwill related to the acquisitions, wholly attributable to Texas MasterCraft, is deductible for tax purposes. In July 2021 we purchased Nisswa Marine, Inc. a full-service dealer located in Nisswa, Minnesota. Goodwill and other intangible assets associated with the Nisswa Marine acquisition was approximately $15.3 million. In May 2021, we purchased all of the outstanding equity of KCS International Holdings, Inc., and certain affiliates (“Cruisers Yachts”) for an aggregate purchase price of $62.7 million, subject to certain customary closing and post-closing adjustments, and net working capital adjustments including certain holdbacks. The former owners of Cruisers Yachts are subject to certain customary post-closing covenants and indemnities. The following table summarizes the consideration paid for Cruisers Yachts and the allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.
|  | (Amounts in thousands) |
Consideration: |  |  |
Cash purchase price and net working capital adjustments, net of cash acquired of $5,993 |  | $ | 61,448 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |
Current assets, net of cash acquired of $5,993 |  | $ | 29,869 |
Property and equipment |  |  | 12,126 |
Intangible assets |  |  | 4,602 |
Current liabilities |  |  | (25,283 | )
Total identifiable net assets acquired: |  |  | 21,314 |
Goodwill |  | $ | 40,134 |
Total |  | $ | 61,448 |
The fair value of current assets acquired includes accounts receivable and inventory of approximately $3.1 million and $26.2 million, respectively. The fair value of current liabilities assumed includes short-term borrowings of approximately $11.7 million, accrued expenses of approximately $10.3 million, and accounts payable of approximately $3.0 million. The intangible assets acquired include the trade name and customer relationships. The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition. The majority of the goodwill is expected to be deductible for tax purposes. The customer relationships have a weighted average useful life of approximately 2.0 years. The tradename has an indefinite life. Our results for fiscal 2021 include results from Cruisers Yachts between May 2, 2021 and September 30, 2021. Refer to Note 21 for disclosure of the revenues and income from operations. We have not disclosed the pro forma effect of Cruisers Yachts’ financial information for fiscal 2020 and prior to acquisition on May 2, 2021, because Cruisers Yachts’ historical monthly internal accounting and reporting processes and practices would not provide complete information sufficient for the purposes of this pro forma disclosure. In October 2020, we purchased all of the outstanding equity of Skipper Marine Holdings, Inc., and certain affiliates (“SkipperBud’s”) for an aggregate purchase price of $55.0 million, subject to certain customary closing and post-closing adjustments, and net working capital adjustments including certain holdbacks. In addition, the former equity owners of SkipperBud’s (“Skippers Sellers”), have the opportunity to earn additional consideration as part of an contingent consideration liability subject to the achievement of certain pre-tax earnings levels. The maximum amount of consideration that can be paid under the contingent consideration liability is approximately $9.3 million. The fair value of $8.2 million of the contingent consideration liability arrangement was estimated by a third party valuation expert by applying an income valuation approach. The contingent consideration liability was estimated based on forecasted pre-tax earnings as a base scenario (among other assumptions) subject to a Monte Carlo simulation. The Skippers Sellers are subject to certain customary post-closing covenants and indemnities. The acquisition of SkipperBud’s enhances our sales, brokerage, service and marina/storage presence in the Great Lakes region and West Coast of the Unites States. The following table summarizes the consideration paid for SkipperBud’s and the allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.
|  | (Amounts in thousands) |
Consideration: |  |  |
Cash purchase price and net working capital adjustments, net of cash acquired of $30,615 |  | $ | 50,261 |
Contingent consideration liability |  |  | 8,200 |
Fair value of total consideration transferred |  | $ | 58,461 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |
Current assets, net of cash acquired of $30,615 |  | $ | 50,688 |
Property and equipment |  |  | 4,859 |
Intangible assets |  |  | 1,978 |
Current liabilities |  |  | (55,427 | )
Total identifiable net assets acquired: |  |  | 2,098 |
Goodwill |  | $ | 56,363 |
Total |  | $ | 58,461 |
The fair value of current assets acquired includes accounts receivable and inventory of approximately $5.4 million and $42.3 million, respectively. The fair value of current liabilities assumed includes short-term borrowings of approximately $30.5 million, accrued expenses of approximately $14.6 million, and customer deposits of approximately $7.5 million. We recorded approximately $56.4 million in goodwill and approximately $2.0 million of other identifiable intangibles (trade name and customer relationships) in connection with the SkipperBud’s acquisition. The goodwill represents our enhanced geographic reach and brand infrastructure in the Great Lakes region and West Coast of the Unites States. The majority of the goodwill is expected to be deductible for tax purposes. The intangible assets have a weighted average useful life of approximately 3.3 years. For fiscal 2021, SkipperBud’s revenue was approximately $302.6 million and income before taxes was approximately $31.3 million. We have not disclosed the pro forma effect of SkipperBud’s financial information for fiscal 2020 because it is not practical to obtain for comparative purposes and as such is not presented because SkipperBud’s historical monthly internal accounting and reporting processes and practices would not provide complete information sufficient for the purposes of this pro forma disclosure. In total, goodwill and other intangible assets increased, primarily due to acquisitions, by $116.8 million and $45.3 million, for the fiscal years ended September 30, 2021 and 2022, respectively. These acquisitions have resulted in the recording of goodwill for tax purposes of $110.8 million and $10.5 million, for the fiscal years ended September 30, 2021 and 2022, respectively. Current and previous acquisitions have resulted in the recording of $195.6 million and $235.6 million in goodwill and $5.6 million and $10.9 million in other intangible assets as of September 30, 2021 and 2022, respectively. Effective May 2, 2021, our reportable segments changed as a result of the Company’s acquisition of Cruisers Yachts, which changed management’s reporting structure and operating activities. We now report our operations through two new reportable segments: Retail Operations and Product Manufacturing. As a result, the Company allocated goodwill to its reporting units within the Company’s two reportable segments. The following table sets forth the changes in carrying amount of goodwill by reportable segment for the fiscal years ended September 30, 2021 and 2022:
|  | Retail Operations |  |  | Product Manufacturing |  |  | Total |
|  | (Amounts in thousands) |
Balance as of September 30, 2020 |  | $ | 84,240 |  |  | $ | — |  |  | $ | 84,240 |
Goodwill acquired |  |  | 71,306 |  |  |  | 40,134 |  |  |  | 111,440 |
Foreign currency translation |  |  | (117 | ) |  |  | — |  |  |  | (117 | )
Balance as of September 30, 2021 |  | $ | 155,429 |  |  | $ | 40,134 |  |  | $ | 195,563 |
Goodwill acquired |  |  | 14,035 |  |  |  | 28,900 |  |  |  | 42,935 |
Foreign currency translation |  |  | (2,913 | ) |  |  | — |  |  |  | (2,913 | )
Balance as of September 30, 2022 |  | $ | 166,551 |  |  | $ | 69,034 |  |  | $ | 235,585 |

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