Goodwill and Intangible Assets

12 Months Ended

May 31, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

As described in Note 2 – Summary of Significant Accounting Policies, the Company performs its annual impairment test for goodwill impairment in the fourth quarter, unless indicators of impairment exist, the Company will perform interim quantitative goodwill impairment analysis more frequently. As a result of impairment indicators related to business performance and decline in share price throughout the fiscal year, the Company performed four interim quantitative goodwill impairment assessments for its reporting units, each of which is also a reporting segment, and recorded an aggregate impairment charge of $194.4 million for fiscal 2025.

During the year ended May 25, 2024, the Company performed an annual goodwill impairment on its reporting units and elected to perform a quantitative goodwill impairment analysis. As a result of the quantitative impairment test performed on February 25, 2024, the Company concluded that there was no goodwill impairment. There were no changes in facts, circumstances or events from February 25, 2024 through May 25, 2024, the end of the fiscal year, that would give rise to modifying the conclusion regarding goodwill impairment assessment or require further testing,

During the year ended May 27, 2023, the Company completed an interim goodwill impairment analysis in the third fiscal quarter for Sitrick, which is included in Other Segments. Many of Sitrick’s target clients were impacted by the

initial closures of U.S. courts during the COVID-19 pandemic and the continued lingering impact on the court system despite the reopening, resulting in less opportunities and a slower revenue conversion typically provided by Sitrick. The Company determined that the carrying value of Sitrick, also a reporting unit, was in excess of its fair value and recorded a non-cash impairment charge of $3.0 million. This impairment reduced the goodwill within the Other Segments to zero as of May 27, 2023.

The Company’s determination of the estimated fair value may be based on the market-based approach, the income-based approach or a combination of both approaches. The market-based approach was based on the guideline public company method, which uses market multiples of revenue and earnings before interest, taxes, depreciation and amortization for a group of comparable public companies. The income-based approach was based on the present value of discounted cash flows of each reporting unit, using the Company’s assumptions regarding revenue growth rates, forecasted gross profit margins, forecasted earnings and free cash flows, terminal period growth rates, and other economic and market trends. Additionally, the present value was based on applying a weighted average cost of capital, which considered long-term interest rates and cost of equity based on the reporting segment’s risk profile. As part of the goodwill impairment test, the Company reconciled the aggregated estimated fair value of the Company's operating segments to the Company’s market capitalization, including consideration of any asymmetry in information, and control premium representing the estimated amount a market participant would pay to obtain a controlling interest in the Company.

Fourth Quarter 2025 Interim Impairment Assessments

During the fourth quarter of fiscal 2025, and subsequent to the Company's annual impairment test date, a decrease in market capitalization and slow business recovery in the Consulting segment triggered a goodwill impairment assessment. Using a combination of income-based and market-based approaches to determine the fair value of its reporting units with associated goodwill, the Company determined that the carrying value of the Consulting segment exceeded its fair value by $58.8 million. In addition to recording this excess as a goodwill impairment charge, the Company also recorded a $10.2 million charge related to the deferred tax impacts from the excess carrying value. The Company therefore recorded an aggregate of $69.0 million in goodwill impairment charges for the Consulting segment.

Third Quarter 2025 Interim Impairment Assessments

During the third quarter of fiscal 2025, slow business recovery in the On-Demand Talent and Consulting segments triggered a goodwill impairment assessment. Using a combination of income-based and market-based approaches to determine the fair value of its reporting units with associated goodwill, the Company determined that the carrying values of On-Demand Talent and Consulting segments exceeded their fair values. As a result, a non-cash goodwill impairment charge of $42.0 million was recorded, comprised of excess in carrying value over fair value of $12.4 million for On-Demand Talent and $24.8 million for Consulting, as well as a $4.8 million related to deferred tax impacts from the charge recorded in the Consulting segment.

Second Quarter 2025 Interim Impairment Assessments

During the second quarter of fiscal 2025, a decrease in market capitalization and slower-than-expected recovery in the On-Demand Talent and Europe and Asia Pacific segments triggered a goodwill impairment assessment. Using a combination of income-based and market-based approaches to determine the fair value of its reporting units with goodwill, the Company determined that the carrying values of On-Demand Talent and Europe and Asia Pacific segments exceeded their fair values. As a result, a non-cash goodwill impairment charge of $79.5 million was recorded, comprised of the excess in carrying value over fair value of $48.4 million for On-Demand Talent and $21.7 million for Europe and Asia Pacific, as well as $9.3 million related to deferred tax impacts from the charges recorded in the On-Demand Talent segment.

First Quarter 2025 Interim Impairment Assessments

During the first quarter of fiscal 2025, concurrent with the change in the Company’s operating segments, which were aligned to the Company’s reporting units and reportable segments, the Company allocated goodwill to each of its reporting units under the new organizational structure on a relative fair value basis. The Company estimated the fair values of the reporting units based on the income-based approach. As a result, a non-cash goodwill impairment charge of $3.9 million was recorded for the excess in carrying value over fair value of the Europe and Asia Pacific segment.

In performing the goodwill impairment assessments, the Company considers the assumptions used in determining the estimated fair values of its reporting units to be reasonable and appropriate. However, the assumptions are complex and

subjective, and additional adverse changes in a key assumption or a combination of key assumptions may significantly affect the Company’s assessment of the fair value and goodwill impairment. These assumptions include, among other things, a failure to meet expected earnings or other financial plans; changes in the discount rate, the terminal growth rate or tax rates; or significant changes in industry or economic trends. If the assumptions noted above adversely change, negative macroeconomic conditions worsen or the Company’s market capitalization decreases for a sustained period of time, the Company may be required to perform an additional impairment analysis that could result in additional impairment charges and materially adversely affect the Company’s financial condition and results of operations.

The following table summarizes the activity in the Company’s goodwill balance. The balance as of May 25, 2024 was recast to reflect the impact of the Company's change in segment reporting and the final fair value allocation of the reporting units that became effective during the first quarter of fiscal 2025 (in thousands):


	On-Demand Talent		Consulting		Europe & Asia Pacific		Outsourced Services		All Other		Total
Balance as of May 27, 2023	$	70,202	$	82,115	$	25,648	$	28,757	$	-	$	206,722
Acquisition (see Note 3)	-		9,637		-		-		-		9,637
Impact of foreign currency exchange rate changes	-		18		202		-		-		220
Balance as of May 25, 2024	$	70,202	$	91,770	$	25,850	$	28,757	$	-	$	216,579
Acquisition (see Note 3)	-		6,855		-		-		-		6,855
Goodwill Impairment	(70,202)		(98,625)		(25,582)		-		-		(194,409)
Impact of foreign currency exchange rate changes	-		-		(268)		-		-		(268)
Balance as of May 31, 2025	$	-	$	-	$	-	$	28,757	$	-	$	28,757

The following table presents details of the Company’s intangible assets, estimated lives and related accumulated amortization (in thousands, except for estimated useful life):


		As of May 31, 2025						As of May 25, 2024
	Estimated Useful Life	Gross		Accumulated Amortization		Net Carrying Amount		Gross		Accumulated Amortization		Net Carrying Amount

Customer contracts and relationships	7 - 12 years	$	39,500	$	(21,160)	$	18,340	$	25,100	$	(16,858)	$	8,242
Computer software	3 - 3.5 years	-		-		-		7,870		(6,539)		1,331
Trade names	1 year	600		(550)		50		-		-		-
Non-Compete Agreements	5 years	720		(132)		588		-		-		-
Total		$	40,820	$	(21,842)	$	18,978	$	32,970	$	(23,397)	$	9,573

The remaining weighted-average useful life of all of the Company’s intangible assets is approximately 4.7 years.

For the year ended May 31, 2025, the Company determined that the computer software component of its intangible assets no longer provides future economic benefit and recorded a $0.4 million charge to write-off the unamortized asset.

The Company recorded amortization expense of $5.9 million, $5.4 million, and $5.0 million for the years ended May 31, 2025, May 25, 2024 and May 27, 2023, respectively. The following table presents future estimated amortization expense based on existing intangible assets held for use (in thousands):


Fiscal Years:
2026	$	3,829
2027	1,859
2028	1,633
2029	1,633
2030 and thereafter	$	10,024
Total	$	18,978

Actual future estimated amortization expense could differ from these estimated amounts as a result of future acquisitions, dispositions, impairments, and other factors or changes.