Note 11 - Intangible Assets and Goodwill

9 Months Ended

Jun. 29, 2024

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note 11 Intangible Assets and Goodwill

Our reportable segments are Food Service, Retail Supermarkets and Frozen Beverages.

Intangible Assets

The carrying amounts of acquired intangible assets for the Food Service, Retail Supermarkets and Frozen Beverages segments as of June 29, 2024 and September 30, 2023 are as follows:

	June 29, 2024				September 30, 2023
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
	(in thousands)
FOOD SERVICE
Indefinite lived intangible assets
Trade names	$	85,424	$	-	$	84,194	$	-
Amortized intangible assets
Trade names		4,024		503		-		-
Franchise agreements		8,500		1,700		8,500		1,063
Customer relationships		23,550		11,797		22,900		10,080
Technology		23,110		4,597		23,110		2,879
License and rights		1,690		1,629		1,690		1,565
TOTAL FOOD SERVICE	$	146,298	$	20,226	$	140,394	$	15,587
RETAIL SUPERMARKETS
Indefinite lived intangible assets
Trade names	$	11,938	$	-	$	11,938	$	-
Amortized intangible assets
Customer relationships		7,700	$	7,700		7,687		7,256
TOTAL RETAIL SUPERMARKETS	$	19,638	$	7,700	$	19,625	$	7,256
FROZEN BEVERAGES
Indefinite lived intangible assets
Trade names	$	9,315	$	-	$	9,315	$	-
Distribution rights		36,100		-		36,100		-
Amortized intangible assets
Customer relationships		1,439		797		1,439		689
Licenses and rights		1,400		1,264		1,400		1,212
TOTAL FROZEN BEVERAGES	$	48,254	$	2,061	$	48,254	$	1,901
CONSOLIDATED	$	214,190	$	29,987	$	208,273	$	24,744

Amortizing intangible assets are being amortized by the straight-line method over periods ranging from 2 to 20 years and amortization expense is reflected throughout operating expenses. Aggregate amortization expense of intangible assets for the three months ended June 29, 2024 and June 24, 2023 was $2.0 million and $1.7 million, respectively. Aggregate amortization expense of intangible assets for the nine months ended June 29, 2024 and June 24, 2023 was $5.2 million and $5.1 million, respectively.

Estimated amortization expense for the next five fiscal years is approximately $1.8 million in 2024 (excluding the nine months ended June 29, 2024), $7.6 million in 2025, $6.6 million in 2026, $4.7 million in 2027, and $4.3 million in 2028.

The weighted amortization period of the intangible assets, in total, is 10.0 years. The weighted amortization period by intangible asset class is 10 years for Technology, 10 years for Customer relationships, 20 years for Licenses & rights, 10 years for Franchise agreements and 2 years for Trade names.

On April 8, 2024, the Company acquired the Thinsters cookie business from Hain Celestial Group. Under the Company’s framework for evaluating acquisitions and in accordance with Generally Accepted Accounting Principles, the Company is in process of evaluating whether the transaction will be accounted for as an asset acquisition or a business combination. The acquisition included an indefinite lived Trade name intangible asset with a preliminary fair value of $5.3 million, and an amortizing Customer relationship intangible asset with a preliminary fair value of $0.7 million. The Customer relationship intangible asset will amortize over a useful life of 10 years.

Goodwill

The carrying amounts of goodwill for the Food Service, Retail Supermarket and Frozen Beverage segments are as follows:

	Food		Retail		Frozen
	Service		Supermarket		Beverages		Total
			(in thousands)
June 29, 2024	$	124,426	$	4,146	$	56,498	$	185,070
September 30, 2023	$	124,426	$	4,146	$	56,498	$	185,070