Goodwill and Intangible Assets

12 Months Ended

Oct. 03, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

The following table summarizes the changes in the carrying value of goodwill:

	GSG		CIG		Total
	(in thousands)
Balance at September 29, 2019	$	441,802	$	483,018	$	924,820
Acquisitions	74,882		5,294		80,176
Impairment	—		(15,800)		(15,800)
Translation and other	(369)		4,671		4,302
Balance at September 27, 2020	516,315		477,183		993,498
Acquisitions	15,112		75,479		90,591
Translation and other	7,006		17,483		24,489
Balance at October 3, 2021	$	538,433	$	570,145	$	1,108,578

Our goodwill was impacted by the final valuations of our acquisitions, and the foreign currency translation related to the goodwill balances of our foreign subsidiaries with functional currencies that are different than our reporting currency. The goodwill additions relate to our fiscal 2021 acquisitions. The purchase price allocations for our fiscal 2021 acquisitions of CRD, IRM, KZN and HLE are preliminary and subject to adjustment based upon the final determinations of the net assets acquired and information to perform the final valuations.

We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our last review at June 28, 2021 (i.e. the first day of our fourth quarter in fiscal 2021), indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill. We had no reporting units that had estimated fair values that exceeded their carrying values by less than 150%.

We also regularly evaluate whether events and circumstances have occurred that may indicate a potential change in the recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, such as a deterioration in general economic conditions; an increase in the competitive environment; a change in management, key personnel, strategy or customers; negative or declining cash flows; or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. Although we believe that our estimates of fair value for these reporting units are reasonable, if financial performance for these reporting units falls significantly below our expectations or market prices for similar business decline, the goodwill for these reporting units could become impaired.

On September 2, 2020, Australia announced that it had fallen into economic recession, defined as two consecutive quarters of negative growth, for the first time since 1991 including 7% negative growth in the quarter ending in June 2020. This prompted a strategic review of our Asia/Pacific ("ASP") reporting unit. As a result of the economic recession in Australia, our revenue growth and profit margin forecasts for the ASP reporting unit declined from the previous forecast used for our annual goodwill impairment review as of June 29, 2020. We also performed an interim goodwill impairment review of our ASP reporting unit in September 2020 and recorded a $15.8 million goodwill impairment charge. The impaired goodwill related to our acquisitions of Coffey International Limited and NDY. As a result of the impairment charge, the estimated fair value of our ASP reporting unit equaled its carrying value of $144.9 million, including $95.5 million of goodwill, at September 27, 2020. On September 28, 2020 (the first day of our fiscal 2021), we merged our former ASP reporting unit into our Client Account Management reporting unit.

During the fourth quarter of fiscal 2019, we performed an interim goodwill impairment review of our Remediation and Field Services ("RFS") reporting unit and recorded a $7.8 million goodwill impairment charge. As a result of the impairment charge, the estimated fair value of the RFS reporting unit equaled its carrying value of $61 million at September 29, 2019, including the remaining $48.8 million of goodwill.

The gross amounts of goodwill for GSG were $556.1 million and $534.0 million at fiscal 2021 and 2020 year-ends, respectively, excluding accumulated impairment of $17.7 million for each period. The gross amounts of goodwill for CIG were $691.6 million and $598.7 million at fiscal 2021 and 2020 year-ends, respectively, excluding accumulated impairment of $121.5 million for each period.

The following table presents the gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in "Intangible assets, net" on the consolidated balance sheets:

	Fiscal Year Ended
	October 3, 2021							September 27, 2020
	Weighted- Average Remaining Life (in years)	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
	($ in thousands)
Client relations	7.3	$	69,455	$	(43,984)	$	25,471	$	60,775	$	(53,392)	$	7,383
Backlog	0.7	34,577		(30,670)		3,907		37,682		(32,761)		4,921
Technology and trade names	3.8	14,939		(6,327)		8,612		7,964		(6,325)		1,639
Total		$	118,971	$	(80,981)	$	37,990	$	106,421	$	(92,478)	$	13,943

Amortization expense for the identifiable intangible assets for fiscal 2021, 2020 and 2019 was $11.5 million, $11.6 million and $11.6 million, respectively. Foreign currency translation adjustments were immaterial for fiscal 2021 and 2020.

Estimated amortization expense for the succeeding five fiscal years and beyond is as follows:

	Amount
	(in thousands)
2022	$	9,664
2023	7,591
2024	4,983
2025	4,348
2026	3,967
Beyond	7,437
Total	$	37,990