Goodwill and Intangible Assets

12 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

NOTE 8: GOODWILL AND INTANGIBLE ASSETS

We evaluate goodwill for impairment annually on September 30 and upon the occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of goodwill may be impaired.

As of September 30, 2021, we assessed qualitative factors and determined that it was not more-likely-than-not that the fair values of our reporting units were less than their carrying values as of the testing date. As a result of our assessment, no goodwill impairment charge was recorded during the fiscal year ended September 30, 2021.

During the second quarter of fiscal 2020, the decline in our market capitalization indicated a possible impairment in the carrying value of goodwill. We elected to perform a quantitative analysis as of March 31, 2020, using the income approach with discount rates from 11% to 19%. As a result of our quantitative analysis, we determined the fair value of each of our reporting units was below its carrying value, primarily as a result of the impact of the COVID-19 pandemic on typical customer behavior, which led to a significant decline in pawn loan balances, and the mandated closure of stores in our GPMX countries. We recorded a goodwill impairment charge of $41.3 million in the second quarter of fiscal 2020 as “Impairment of goodwill, intangible and other assets” in our Consolidated Statements of Operations. No further indicators of goodwill impairment were noted as of September 30, 2020.

We test indefinite-lived intangible assets for impairment by first assessing qualitative factors to determine whether it is necessary to perform a quantitative impairment test. Based on our assessment of qualitative factors as of September 30, 2021, no impairment charges were recorded related to intangible assets or long-lived asset groups.

In connection with the analysis of goodwill as of March 31, 2020, we determined that the fair values of the trade names associated with acquired entities in our Mexico and GPMX reporting units were also impaired and recorded an impairment charge of $2.9 million and $1.7 million, respectively. Furthermore, we determined the carrying amount of certain long-lived asset groups were not recoverable and recorded an impairment charge of $1.1 million in the second quarter of 2020 related to these asset groups. These impairment charges were recorded as “Impairment of goodwill, intangible and other assets” in our Consolidated Statements of Operations. No additional indicators of impairment of intangible assets or long-lived asset groups were noted as of September 30, 2020.

The following table presents the changes in the carrying value of goodwill by segment:

(in thousands)	U.S. Pawn		Latin America Pawn		Consolidated
Balances as of September 30, 2019	$	251,752	$	48,775	$	300,527
Measurement period adjustments	176		(149)		27
Goodwill impairment *	(10,000)		(31,340)		(41,340)
Effect of foreign currency translation changes	—		(1,632)		(1,632)
Balances as of September 30, 2020	$	241,928	$	15,654	$	257,582
Acquisitions	2,543		26,100		28,643
Effect of foreign currency translation changes	—		(467)		(467)
Balances as of September 30, 2021	$	244,471	$	41,287	$	285,758

*    Represents cumulative goodwill impairment.

The following table presents the balance of each major class of intangible assets:

	September 30,
(in thousands)	2021		2020
Non-amortizing intangible assets:
Trade names	$	23,036	$	19,094
Accumulated impairment losses	(4,598)		(4,598)
	18,438		14,496
Pawn licenses	9,694		9,509
	$	28,132	$	24,005
Amortizing intangible assets:
Internally developed software	$	78,174	$	67,457
Accumulated amortization	(43,710)		(33,646)
Accumulated impairment losses	(2,579)		(2,579)
	$	31,885	$	31,232
Non-compete agreements	$	3,502	$	3,417
Accumulated amortization	(3,502)		(3,394)
	$	—	$	23
Other	$	4,452	$	5,600
Accumulated amortization	(2,365)		(2,222)
	$	2,087	$	3,378
Intangible assets, net	$	62,104	$	58,638

The amortization of most definite-lived intangible assets is recorded as amortization expense and included under “Depreciation and amortization” expense in our Consolidated Statements of Operations. These amounts were $11.3 million, $11.2 million and $7.8 million for fiscal 2021, 2020 and 2019, respectively.

As of September 30, 2021, our estimate of future amortization expense for definite-lived intangible assets is as follows (in thousands):

2022	$	11,301
2023	9,240
2024	7,332
2025	4,211
2026	1,769

As acquisitions and dispositions occur in the future, amortization expense may vary from these estimates.