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Note 5 - Goodwill and Intangible Assets, Net

6 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Text Block]

Note 5 – Goodwill and Intangible Assets, Net

The following table presents goodwill by segment and the related change in the net carrying amount:

	Consumer Floral & Gifts		BloomNet		Gourmet Foods & Gift Baskets		Total
	(in thousands)
Balance at July 2, 2023	$	153,376	$	-	$	-	$	153,376
Measurement period adjustment for Things Remembered Acquisition		201		-		-		201
Balance at December 31, 2023	$	153,577	$	-	$	-	$	153,577

The Company’s other intangible assets consist of the following:

				December 31, 2023						July 2, 2023
	Amortization Period			Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in years)			(in thousands)
Intangible assets with determinable lives
Investment in licenses	14	-	16	$	7,420	$	6,622	$	798	$	7,420	$	6,569	$	851
Customer lists	3	-	10		29,071		23,757		5,314		29,071		21,611		7,460
Other	5	-	14		2,946		2,634		312		2,946		2,604		342
Total intangible assets with determinable lives					39,437		33,013		6,424		39,437		30,784		8,653
Trademarks with indefinite lives					111,473		-		111,473		131,235		-		131,235
Total identifiable intangible assets				$	150,910	$	33,013	$	117,897	$	170,672	$	30,784	$	139,888

Future estimated amortization expense is as follows: remainder of fiscal 2024 - $2.2 million, fiscal 2025 - $1.9 million, fiscal 2026 - $1.3 million, fiscal 2027 - $0.5 million, fiscal 2028 - $0.2 million and thereafter - $0.3 million.

The Company performs its annual assessment of goodwill and indefinite-lived intangible impairment during its fiscal fourth quarter, or more frequently if events occur or circumstances change such that it is more likely than not that an impairment may exist.

During the quarter ended December 31, 2023, as a result of a decline in the actual and projected revenue for the Company’s PersonalizationMall tradename (indefinite-lived intangible asset), as well as a higher discount rate resulting from the higher interest rate environment, the Company determined that an impairment assessment was required. The Company’s impairment test for the indefinite-lived intangible asset encompassed calculating a fair value of the indefinite-lived intangible asset and comparing that result to its carrying value. To determine fair value of the indefinite-lived intangible asset, the Company used an income approach, the relief-from-royalty method. This method assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to obtain the rights to use the comparable asset. Indefinite-lived intangible assets’ fair values require significant judgments in determining both the assets’ estimated cash flows as well as the appropriate discount and royalty rates applied to those cash flows to determine fair value. Based on the impairment assessment performed for the quarter ending December 31, 2023, the Company recorded a non-cash impairment charge of $19.8 million to reduce the recorded carrying value of the PersonalizationMall tradename to its estimated fair value. This impairment charge was recorded in the Company’s Consumer Floral & Gifts reporting unit.

The Company concluded that goodwill and other indefinite-lived intangible assets, excluding its PersonalizationMall tradename, did not require an impairment assessment.