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Goodwill and Other Intangible Assets | 12 Months Ended
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Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | 8. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following table shows the changes in the carrying amount of goodwill by reportable segment:
|  | North America |  |  | International |  |  | Total |
Balance as of June 30, 2022(1) |  | $ | 695,715 |  |  | $ | 238,081 |  |  | $ | 933,796 |
Acquisition(2) |  |  | (794 | ) |  |  | — |  |  |  | (794 | )
Divestiture(3) |  |  | (3,054 | ) |  |  | — |  |  |  | (3,054 | )
Translation |  |  | 5,186 |  |  |  | 3,506 |  |  |  | 8,692 |
Balance as of June 30, 2023 |  |  | 697,053 |  |  |  | 241,587 |  |  |  | 938,640 |
Divestiture(4) |  |  | (6,267 | ) |  |  |  |  |  | (6,267 | )
Translation |  |  | (1,318 | ) |  |  | (1,751 | ) |  |  | (3,069 | )
Balance as of June 30, 2024 |  | $ | 689,468 |  |  | $ | 239,836 |  |  | $ | 929,304 |
(1) The total carrying value of goodwill is reflected net of $134,277 of accumulated impairment charges, of which $7,700 is related to the North America reportable segment and $126,577 is related to the International reportable segment. (2) During the fiscal year ended June 30, 2023, the Company finalized purchase accounting related to “That's How We Roll” (“THWR”) resulting in a $794 reduction to goodwill. (3) During the fiscal year ended June 30, 2023, the Company completed the divestiture of Westbrae®, a component of the North America reportable segment. Goodwill of $3,054 was assigned to the divested component on a relative fair value basis. (4) During the fiscal year ended June 30, 2024, the Company completed the divestitures of Thinsters® and Queen Helene®, both were components of the North America reportable segment. Goodwill of $5,732 and $535 was assigned to divested components of Thinsters® and Queen Helene®, respectively, on a relative fair value basis. During the third quarter of fiscal 2024, as a result of the significant decline in the Company’s market capitalization and the same factors triggering the interim impairment tests for the ParmCrisps® and Thinsters® trademarks, certain North America personal care tradenames, and other intangible assets, the Company completed an interim impairment test of all reporting units. For the United Kingdom (“U.K.”), Western Europe, Canada, and Ella's Kitchen UK reporting units, the Company performed a qualitative evaluation to assess factors to determine whether it was more likely than not that the fair value of the reporting units were less than their carrying amounts, including goodwill. The Company concluded that the qualitatively tested reporting units estimated fair values exceeded their carrying amounts. Three of these reporting units (U.K., Western Europe and Canada) were quantitatively tested in fiscal 2023 and as of the last quantitative testing date, their estimated fair values exceeded their respective carrying amounts by more than 17.0%. During the third quarter of fiscal 2024, the Company completed an interim quantitative impairment test of goodwill in the U.S. reporting unit and concluded that the reporting unit’s estimated fair value exceeded its carrying amount. The fair value of the reporting unit was estimated utilizing a blended approach which included an income approach utilizing the Discounted Cash Flows Method and the Guideline Public Company Methodology, a market-based approach. The Company completed this interim quantitative impairment test of goodwill in the U.S. reporting unit and concluded that the reporting unit’s estimated fair value exceeded its carrying amount by 6.2%. The Company also completed its annual goodwill impairment analysis on April 1, 2024 (the first day of the fourth quarter of fiscal 2024) and concluded that no impairment existed at any of its reporting units. At June 30, 2024, the goodwill related to the U.S. reporting unit was at risk of potential impairment if the fair value of this reporting unit, and its associated assets, decrease in value due to the amount and timing of expected future cash flows, decreased customer demand for products, an inability to execute management’s business strategies, or general market conditions, such as economic downturns, and changes in interest rates, including discount rates. Future cash flow estimates are, by their nature, subjective, and actual results may differ materially from the Company’s estimates. If the Company’s ongoing cash flow projections are not met or if market factors utilized in the impairment test deteriorate, including an unfavorable change in the terminal growth rate or the weighted-average cost of capital, the Company may have to record impairment charges in future periods. As of June 30, 2024, goodwill associated with the U.S. reporting unit had a carrying value of $641,053. Other Intangible Assets The following table sets forth balance sheet information for intangible assets, excluding goodwill, subject to amortization and intangible assets not subject to amortization:
|  | Fiscal Year Ended June 30, |
|  | 2024 |  |  | 2023 |
Non-amortized intangible assets: |  |  |  |  |  |
Trademarks and tradenames(1) |  | $ | 195,237 |  |  | $ | 250,860 |
Amortized intangible assets: |  |  |  |  |  |
Other intangibles(2)(3) |  |  | 167,886 |  |  |  | 161,874 |
Less: Accumulated amortization |  |  | (118,324 | ) |  |  | (114,629 | )
Net amortized intangible assets |  | $ | 49,562 |  |  | $ | 47,245 |
Net other intangible assets |  | $ | 244,799 |  |  | $ | 298,105 |
(1) The gross carrying value of trademarks and tradenames is reflected net of $251,551 and $223,981 of accumulated impairment charges as of June 30, 2024 and 2023, respectively. (2) The reduction in carrying value of other intangible assets as of June 30, 2024 reflected a non-cash impairment charge of $17,032 and $45,798 recognized in the fiscal year ended June 30, 2024 and 2023, respectively. (3) During the fiscal year 2024, the useful life for certain North America personal care tradenames (namely, Avalon Organics®, and JASON®), the MaraNatha® trademark, and the trademarks for the plant-based beverage brands: Happy™ and Joya® was changed from indefinite to definite. The carrying value of such intangible assets as of June 30, 2024 was $27,259. During the third quarter of fiscal 2024, the Company recorded a non-cash impairment charge of $10,797 related to the indefinite and definite lived intangible assets associated with Thinsters® in connection with the probable sale of the Thinsters® cookie business. The Company concluded that as of March 31, 2024, there was a high probability that the sale of the Thinsters® business would occur and therefore, a quantitative impairment test was performed. To determine the amount of the impairment, the Company compared the carrying amount of the Thinsters® assets to its estimated fair value (which was the expected selling price less transaction costs). During the third quarter of fiscal 2024, the Company recorded non-cash impairment charges of $12,815 and $8,000 for certain North America personal care tradenames (namely, Alba Botanica®, Avalon Organics®, and JASON®) and the ParmCrisps® trademark, respectively, to reduce the carrying amounts of such intangible assets to their estimated fair values of $13,000 and nil, respectively. The fair value was determined using the relief from royalty method, and impairment charges were recorded within intangibles and long-lived asset impairment on the consolidated statements of operations. The assets are part of the North America reportable segment. As a result of the same factors triggering the interim impairment tests for the ParmCrisps® trademark, the Company completed impairment tests of the ParmCrisps® asset group, which was primarily comprised of amortizable customer relationships, machinery and equipment and operating lease right-of-use assets. The Company determined that the carrying amount of the ParmCrisps® asset group exceeded the estimated fair value. During the fiscal year ended June 30, 2024, the Company recorded non-cash impairment charges of $10,586 to reduce the carrying amount of the ParmCrisps® customer relationships to their estimated fair value which was determined using a discounted cash flow analysis. Impairment charges were recorded within intangibles and long-lived asset impairment on the consolidated statements of operations. The customer relationship intangible asset was part of the North America reportable segment and was fully impaired. In the fourth quarter of fiscal 2024, the Company quantitatively tested another intangible asset. The assessment indicated that the carrying value of the trademarks associated with its plant-based beverage brands, Happy™ and Joya®, exceeded its estimated fair value. The fair value was determined using the relief from royalty method, and a non-cash impairment charge of $2,260 was recorded within intangibles and long-lived asset impairment on the consolidated statements of operations. The Happy™ and Joya® intangible assets are part of the International reportable segment and had a remaining aggregate carrying value of $3,761 as of June 30, 2024. During the fourth quarter of fiscal year ended June 30, 2023, the Company recorded non-cash impairment charges of $4,767, $4,691 and $9,150 for Imagine®, Joya®, and Queen Helene® intangible assets, respectively, to reduce the carrying amount of such intangible assets to their estimated fair value. The fair values were determined using the relief from royalty method, and impairment charges were recorded within intangibles and long-lived asset impairment on the consolidated statements of operations. The Imagine® and Queen Helene® intangible assets are part of the North America reportable segment and had a remaining aggregate carrying value of $3,100 as of June 30, 2024. The Joya® intangible assets are part of the International reportable segment and had a remaining aggregate carrying value of $3,761 as of June 30, 2024. During the fiscal year ended June 30, 2023, the Company recorded non-cash impairment charges of $102,000 and $8,500 for the ParmCrisps® and Thinsters® trademarks, respectively, to reduce the carrying amount of such intangible assets to their estimated fair value. The fair values were determined using the relief from royalty method, and impairment charges were recorded within intangibles and long-lived asset impairment on the consolidated statements of operations. The assets are part of the North America reportable segment and were fully impaired as of June 30, 2024. As a result of the same factors triggering the interim impairment tests for the ParmCrisps® and Thinsters® trademarks, the Company completed interim impairment tests of the ParmCrisps® and Thinsters® asset groups, which were primarily comprised of amortizable customer relationships. The Company determined that the carrying amount of the ParmCrisps® asset group’s exceeded its estimated fair value. During the fiscal year ended June 30, 2023, the Company recorded non-cash impairment charges of $45,798 to reduce the carrying amount of the ParmCrisps® customer relationships, the primary asset in the asset group, to their estimated fair value. Impairment charges were recorded within intangibles and long-lived asset impairment on the consolidated statements of operations. The fair value of the Thinsters® asset group exceeded its carrying amount. During the fiscal year ended June 30, 2024, the Company completed the sale of the Thinsters® business as discussed in Note 4, Dispositions. Non-cash impairment charges, recorded within intangibles and long-lived asset impairment on the consolidated statements of operations, for the fiscal years ended June 30, 2024 and June 30, 2023 were as follows:
|  | Fiscal Year Ended June 30, |
|  | 2024 |  |  | 2023 |
Personal care tradenames (Alba Botanica®, Avalon Organics®, and JASON®) |  | $ | 12,815 |  |  | $ | — |
Thinsters® trademark and customer relationships |  |  | 10,797 |  |  |  | 8,500 |
ParmCrisps® customer relationships |  |  | 10,586 |  |  |  | 45,798 |
ParmCrisps® trademark |  |  | 8,000 |  |  |  | 102,000 |
Happy™ and Joya® trademarks |  |  | 2,260 |  |  |  | 4,691 |
Queen Helene® |  |  | — |  |  |  | 9,150 |
Imagine® |  |  | — |  |  |  | 4,767 |
Other |  |  | 144 |  |  |  | — |
|  | $ | 44,602 |  |  | $ | 174,906 |
Amortized intangible assets, which are deemed to have a finite life, primarily consist of customer relationships, trademarks and tradenames and are amortized over their estimated useful lives of 7 to 25 years. The weighted average remaining amortization period of amortized intangible assets is 8.9 years. Expected amortization expense of the next five fiscal years is as follows:
|  | Fiscal Year Ending June 30, |
|  | 2025 |  |  | 2026 |  |  | 2027 |  |  | 2028 |  |  | 2029 |
Estimated amortization expense |  | $ | 7,197 |  |  | $ | 6,205 |  |  | $ | 6,120 |  |  | $ | 5,187 |  |  | $ | 4,747 |

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