Goodwill and Other Intangible Assets

The Company recorded goodwill in connection with the Ayrshire and Sabre acquisitions resulting primarily from the synergies that resulted from the Company’s acquisitions and the assembled workforce. The goodwill is not amortized for financial accounting purposes.

In accordance with accounting guidance on goodwill and other intangible assets, the Company evaluates goodwill for impairment at the reporting unit level annually, and whenever circumstances occur indicating that goodwill might be impaired. Upon adoption of ASU 2017-04, the Company now recognizes an impairment charge (not to exceed the total amount of goodwill allocated to the reporting unit) for the amount by which the carrying amount of a reporting unit exceeds the reporting unit’s fair value. During the quarter, a few large programs declined in revenue and two new programs were delayed. This decrease in the Company’s total revenue combined with book value continuing to exceed market capitalization caused a “triggering event” in which to perform a quantitative impairment analysis as of March 30, 2019. To estimate the fair value of the Company’s equity, the Company used both a market approach and an income approach, based on a discounted cash flows analysis. As of March 30, 2019, market related factors increased expected required rates of return, which also increased the Company’s discount rate used to project future cash flows. Further, push outs of the Company’s forecasted future cash flows relating to delays in customer orders adversely impacted the Company’s discounted cash flows model. As a result, a lower estimate in the Company’s fair value using these two valuation methods indicated an impairment charge.

During the quarter, the Company also assessed other finite-lived intangible assets including the Company’s customer relationships and favorable lease agreements due to an indicator of possible impairment being present, as discussed above. As a result of the analysis performed, the Company determined that the carrying value of the customer relationships intangible asset was not recoverable and recorded an impairment for the entire carrying amount during the third quarter of fiscal year 2019. The Company’s analysis did not indicate that any of its other long-lived assets were impaired.

During the nine months ended March 30, 2019, a goodwill impairment of $10.0 million and other intangible assets impairment of $2.5 million was recognized. During the nine months ended March 31, 2018, no goodwill impairment was recognized. Goodwill was recorded at $10.0 million as of June 30, 2018.

The components of acquired intangible assets are as follows (in thousands):



	March 30, 2019
	Amortization Period in Years	Gross Carrying Amount		Accumulated Amortization			Impairment Recognized			Net Carrying Amount
Intangible assets:
Customer Relationships	10	4,803		(2,311		)	(2,492		)	—
Favorable Lease Agreements	4 - 7	2,941		(2,208		)	—			733
Total		$	7,744	$	(4,519	)	$	(2,492	)	$	733



	June 30, 2018
	Amortization Period in Years	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets:
Non-Compete Agreements	3 - 5	$	568	$	(568	)	$	—
Customer Relationships	10	4,803		(2,071		)	2,732
Favorable Lease Agreements	4 - 7	2,941		(1,947		)	994
Total		$	8,312	$	(4,586	)	$	3,726

Amortization expense was approximately $76,000 and $266,000 for the three months ended March 30, 2019 and March 31, 2018, respectively. Amortization expense was approximately $502,000 and $808,000 for the nine months ended March 30, 2019 and March 31, 2018, respectively.

Aggregate amortization expense relative to existing intangible assets by fiscal year is currently estimated to be as follows (in thousands):



Fiscal Years Ending	Amount
2019 ⁽¹⁾	76
2020	303
2021	303
2022	51
Total amortization expense	$	733

(1) Represents estimated amortization for the remaining three-month period ending June 29, 2019.