Goodwill and Other Intangible Assets, Net

12 Months Ended

May 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets, Net

4. Goodwill and Other Intangible Assets, Net

During the first quarter of fiscal 2024, our chief operating decision maker (“CODM”) implemented changes in how he organizes the business, allocates resources, and assesses performance. Specifically, this new structure resulted in the separation of our former Aviation Services segment into three new operating segments: Parts Supply, Repair & Engineering, and Integrated Solutions.

As of May 31, 2023, we had three reporting units, which included two in our former Aviation Services segment (Aviation Supply Chain and MRO) and one comprised of our Expeditionary Services segment. Subsequent to the segment change, each of our operating segments was comprised of a single reporting unit as the former Aviation Supply Chain reporting unit was separated into Parts Supply and Integrated Solutions reporting units. Effective as of the beginning of fiscal 2024, the Aviation Supply Chain goodwill of $115.6 million was re-assigned to the new reporting units based on their relative fair values with $38.9 million assigned to Parts Supply and $76.7 million assigned to Integrated Solutions. We performed qualitative impairment assessments for the impacted reporting units immediately before and after the reassignment and determined no impairment existed.

Changes in the carrying amount of goodwill by segment for fiscal 2024 are as follows:

	Parts		Repair &		Integrated			Expeditionary
	Supply		Engineering		Solutions		Services		Total
Balance as of May 31, 2023	$	38.9	$	41.4	$	76.7	$	18.8	$	175.8
Triumph acquisition		—		375.2		—		—		375.2
Trax acquisition		—		—		3.3		—		3.3
Foreign currency translation adjustments		—		—		0.5		—		0.5
Balance as of May 31, 2024	$	38.9	$	416.6	$	80.5	$	18.8	$	554.8

We utilized the qualitative assessment approach for all reporting units which considers general economic conditions, industry specific performance, changes in reporting unit carrying values, and assumptions used in the most recent fair value calculation. We concluded it was more likely than not that the fair value of each reporting unit exceeded its carrying value at May 31, 2024, and thus no impairment charges were recorded.

Intangible assets, other than goodwill, are comprised of the following:

	May 31, 2024
			Accumulated
	Gross		Amortization		Net
Amortizable intangible assets:
Customer relationships	$	136.2	$	(11.0)	$	125.2
Developed technology		105.3		(2.3)		103.0
		241.5		(13.3)		228.2
Unamortized intangible assets:
Trademarks		7.2		—		7.2
	$	248.7	$	(13.3)	$	235.4

	May 31, 2023
			Accumulated
	Gross		Amortization		Net
Amortizable intangible assets:
Customer relationships	$	40.5	$	(5.8)	$	34.7
Developed technology		22.0		(0.2)		21.8
		62.5		(6.0)		56.5
Unamortized intangible assets:
Trademarks		7.2		—		7.2
	$	69.7	$	(6.0)	$	63.7

Customer relationships are being amortized over 12-20 years and developed technology is being amortized over 20 years. Amortization expense recorded during fiscal 2024, 2023 and 2022 was $7.3 million, $1.3 million, and $1.1 million, respectively. The estimated aggregate amount of amortization expense for intangible assets in each of the next four fiscal years is $16.2 million per year and $15.8 million in fiscal 2029.