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GOODWILL AND INTANGIBLE ASSETS
 12 Months Ended
Jan. 31, 2025
GOODWILL AND INTANGIBLE ASSETS  
GOODWILL AND INTANGIBLE ASSETS

5. GOODWILL AND INTANGIBLE ASSETS

 

Goodwill as of January 31, 2025 and 2024, and changes in goodwill during the fiscal years then ended, were as follows (in $000s):

 

 

 

USA Operations

 

 

Europe

 

 

Other Foreign

 

 

Total

 

Balance at January 31, 2023

 

$871

 

 

$7,602

 

 

$-

 

 

$8,473

 

Measurement period adjustment

 

 

-

 

 

 

1,447

 

 

 

-

 

 

 

1,447

 

Acquisitions

 

 

-

 

 

 

-

 

 

 

3,749

 

 

 

3,749

 

Impairment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Currency translation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Balance at January 31, 2024

 

$871

 

 

$9,049

 

 

$3,749

 

 

$13,669

 

Measurement period adjustment

 

 

-

 

 

 

-

 

 

 

(691)

 

 

(691)

Acquisitions

 

 

4,956

 

 

 

8,969

 

 

 

-

 

 

 

13,925

 

Impairment

 

 

-

 

 

 

(7,512)

 

 

(3,026)

 

 

(10,538)

Currency translation

 

 

-

 

 

 

(93)

 

 

(32)

 

 

(125)

Balance at January 31, 2025

 

$5,827

 

 

$10,413

 

 

$-

 

 

$16,240

 

 

The Company performed valuations of the Pacific and Eagle reporting units using market value and discounted cash flow methodologies. Pacific’s forecast was impacted by planned investments to improve future profitability, but the profitability has not improved as much as expected. Eagle has variability in their revenue as they primarily sell through tenders which impacted their financial outlook. Given the results of the quantitative assessment, the Company determined that the goodwill of the Pacific reporting unit was impaired and the goodwill of the Eagle reporting unit was partially impaired. As a result, the Company recognized a goodwill impairment charge of $3.0 million representing the entire amount of goodwill related to the Pacific reporting unit in the Other Foreign geographic segment and recognized a goodwill impairment charge of $7.5 million representing 83% of goodwill related to the Eagle reporting unit in the Europe geographic segment for the year ended January 31, 2025.

During FY24, a measurement period adjustment was recorded to recognize deferred tax liabilities of $1.4 million associated with the finite-lived intangibles acquired in the FY23 Eagle acquisition, with a corresponding increase to goodwill.

 

Intangible assets as of January 31, 2025 and 2024, and changes in intangible assets during the fiscal years then ended, were as follows (in $000s):

 

 

 

2025

 

 

2024

 

Balance at beginning of year

 

$6,830

 

 

$6,042

 

Acquisitions

 

 

19,319

 

 

 

1,211

 

Measurement period adjustments

 

 

1,093

 

 

 

-

 

Amortization

 

 

(997)

 

 

(423)

Currency translation

 

 

(742)

 

 

-

 

Balance at end of year

 

$25,503

 

 

$6,830

 

 

 

 

 

 

 

January 31, 2025

 

 

 

 

 

January 31, 2024

 

 

 

 

Intangible Assets (in $000s)

 

Weighted Average Life in Years

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Carrying Amount

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Carrying Amount

 

Customer relationships

 

 

20

 

 

$20,543

 

 

$(1,655)

 

$18,888

 

 

$3,558

 

 

$(267)

 

$3,291

 

Trade names and trademarks

 

 

15

 

 

 

5,079

 

 

 

(568)

 

 

4,511

 

 

 

1,773

 

 

 

(109)

 

 

1,664

 

Technological know-how

 

 

15

 

 

 

2,447

 

 

 

(343)

 

 

2,104

 

 

 

1,989

 

 

 

(114)

 

 

1,875

 

Total

 

 

 

 

 

$28,069

 

 

$(2,566)

 

$25,503

 

 

$7,320

 

 

$(490)

 

$6,830

 

 

Amortization expense was $1.0 million and $0.4 million for the fiscal years ended January 31, 2025 and 2024, respectively. Intangible asset amortization expense over the next five years is expected to be approximately $1.9 million per year.