Goodwill and Intangible Assets

3 Months Ended

Aug. 30, 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, at which point the Company may perform interim quantitative goodwill impairment analysis. There were no impairment indicators for the three months ended August 30, 2025 and as such, the Company did not perform an interim goodwill impairment analysis in the first quarter of fiscal 2026.

First Quarter 2025 Interim Impairment Assessment

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. 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 a result of the analysis, a non-cash goodwill impairment charge of $3.9 million was recorded for the excess in carrying value over fair value of the Europe & Asia Pacific segment.

In performing the goodwill impairment assessments, the Company considered 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.

There were no changes in the carrying amount of goodwill during the three months ended August 30, 2025 and all goodwill on the Company's Consolidated Balance Sheet is allocated to the Outsourced Services segment.

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 August 30, 2025						As of May 31, 2025
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer contracts and relationships	7 - 12 years	$	39,500	$	(22,267)	$	17,233	$	39,500	$	(21,160)	$	18,340
Trade names	1 year	600		(600)		—		600		(550)		50
Non-Compete Agreements	5 years	720		(168)		552		720		(132)		588
Total		$	40,820	$	(23,035)	$	17,785	$	40,820	$	(21,842)	$	18,978

The Company recorded amortization expense of $1.2 million and $1.5 million for the three months ended August 30, 2025 and August 24, 2024.

The following table presents future estimated amortization expense based on existing intangible assets held for use (in thousands):

Fiscal Years:


2026 (remaining nine months)	$	2,636
2027	1,859
2028	1,633
2029	1,633
2030 and thereafter	10,024
Total	$	17,785

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