Goodwill and Other Intangible Assets

12 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill by segment are as follows:


	Storage and Terminal Solutions		Utility and Power Infrastructure		Process and Industrial Facilities		Total
	(In thousands)
Net balance at June 30, 2021	$	26,774	$	6,984	$	26,878	$	60,636
Goodwill impairment	(7,208)		(2,659)		(8,445)		(18,312)
Translation adjustment (1)	(121)		(62)		(6)		(189)
Net balance at June 30, 2022	19,445		4,263		18,427		42,135
Goodwill impairment	—		—		(12,316)		(12,316)
Disposal of business(2)	—		—		(627)		(627)
Translation adjustment(1)	(48)		(24)		—		(72)
Net balance at June 30, 2023	19,397		4,239		5,484		29,120
Translation adjustment(1)	(64)		(33)		—		(97)
Net balance at June 30, 2024	$	19,333	$	4,206	$	5,484	$	29,023

(1)The translation adjustments relate to the periodic translation of Canadian Dollar and South Korean Won denominated goodwill recorded as a part of prior acquisitions in Canada and South Korea, in which the local currency was determined to be the functional currency.

(2)We sold our industrial cleaning business during the fourth quarter of fiscal 2023, which resulted in the allocation $0.6 million of goodwill to net assets sold in the transaction. See Note 3 - Property, Plant and Equipment, Industrial Cleaning Disposal, for more information.

Fiscal 2024

We performed our annual goodwill impairment test as of May 31, 2024, which resulted in no impairment. The fiscal 2024 test indicated that two reporting units with a combined total of $16.6 million of goodwill as of June 30, 2024 were at higher risk of future impairment. If our view of project opportunities or gross margins deteriorates, particularly for the higher risk reporting units, then we may be required to record an impairment of goodwill.

The estimated fair value of each reporting unit was derived by utilizing a discounted cash flow analysis and market multiples of projected EBITDA. EBITDA is defined as earnings before interest expense, interest income, taxes, depreciation and amortization, The key assumptions used are described in Note 1 - Summary of Significant Accounting Policies.

Fiscal 2023

In the second quarter of fiscal 2023, we concluded that a goodwill impairment indicator existed for a reporting unit in the Process and Industrial Facilities segment based on a material adverse change in gross profit on a project. Based on the indicated outcome of this project and our near-term outlook for the reporting unit, we performed an interim impairment test for the unit and concluded that its $12.3 million of goodwill was fully impaired. The impairment was recognized in operating income during the three and six months ended December 31, 2022.

Fiscal 2022

In the third quarter of fiscal 2022, we concluded that goodwill impairment indicators existed based on the decline in the price of our stock and operating results that have underperformed our forecasts during the year. Accordingly, we performed an interim impairment test as of March 31, 2022 and concluded that there was $18.3 million of total impairment to goodwill, which was recognized in operating income during the three and nine months ended March 31, 2022 as follows:

•$8.4 million in the Process and Industrial Facilities segment;

•$7.2 million in the Storage and Terminal Solutions segment; and

•$2.7 million in the Utility and Power Infrastructure segment.

Other Intangible Assets

Information on the carrying value of other intangible assets is as follows:


		At June 30, 2024
	Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(Years)	(In thousands)
Intellectual property	10	$	130	$	(109)	$	21
Customer based(1)	9 to 15	11,144		(9,514)		1,630
Total other intangible assets		$	11,274	$	(9,623)	$	1,651

(1)Intangible assets have been adjusted in fiscal 2024 to remove $4.4 million of intangible assets that have been fully amortized.


		At June 30, 2023
	Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(Years)	(In thousands)
Intellectual property	10 to 15	$	2,483	$	(2,371)	$	112
Customer based(1)	6 to 15	13,144		(10,190)		2,954
Total other intangible assets		$	15,627	$	(12,561)	$	3,066

(1)Customer-based intangible assets have been adjusted in fiscal 2023 to remove $4.2 million of intangible assets that have been fully amortized.

Amortization expense totaled $1.4 million, $1.7 million, and $1.8 million in fiscal 2024, 2023, and 2022, respectively.

We estimate that future amortization of other intangible assets will be as follows (in thousands):


For year ending:
June 30, 2025	$	1,096
June 30, 2026	555
Total estimated amortization expense	$	1,651