Goodwill and Intangible Assets

12 Months Ended

Sep. 30, 2023

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, 2023, we assessed qualitative and quantitative 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, 2023. There was no impairment charge during the fiscal year ended September 30, 2022. Accumulated goodwill impairment losses of $41.3 million were recorded prior to 2021 associated with the U.S. Pawn ($10.0 million) and Latin America Pawn ($31.3 million) segments because 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.

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, 2021	$	244,471	$	41,287	$	285,758
Acquisitions	1,032		—		1,032
Measurement period adjustments	—		(678)		(678)
Effect of foreign currency translation changes	—		716		716
Balances as of September 30, 2022	$	245,503	$	41,325	$	286,828
Acquisitions	10,439		—		10,439
Effect of foreign currency translation changes	—		5,105		5,105
Balances as of September 30, 2023	$	255,942	$	46,430	$	302,372

During the first quarter of fiscal 2023, we acquired nine pawn stores located in Houston, Texas and one luxury pawn store in Las Vegas, Nevada for total cash consideration of $13.0 million, inclusive of all ancillary arrangements, of which $9.5 million was recorded as goodwill. During the fourth quarter of fiscal 2023, we acquired one pawn store located in Nashville, Tennessee and one store in San Antonio, Texas for total cash consideration of $1.9 million, inclusive of all ancillary arrangements, of which $0.9 million was recorded as goodwill. These acquisitions expand our position in these strategic markets, and the luxury pawn transaction expands our offerings by providing a dedicated and targeted focus on higher-end products. These acquisitions were immaterial, individually and in the aggregate, and we have therefore omitted or aggregated certain disclosures.

As of September 30, 2023, we assessed qualitative and quantitative factors and determined that it was not more-likely-than-not that the fair values of our indefinite-lived intangible assets were less than their carrying values. Based on our assessment as of September 30, 2023, no impairment charges were recorded related to intangible assets or long-lived asset groups.

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

	September 30,
(in thousands)	2023		2022
Non-amortizing intangible assets:
Trade names	$	19,793	$	18,591
Pawn licenses	9,535		9,535
	$	29,328	$	28,126
Amortizing intangible assets:
Internally developed software	$	89,488	$	79,146
Accumulated amortization	(60,628)		(50,600)
	$	28,860	$	28,546
Other	$	2,346	$	2,344
Accumulated amortization	(2,318)		(2,197)
	$	28	$	147
Intangible assets, net	$	58,216	$	56,819

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 $10.0 million, $11.7 million and $11.3 million for fiscal 2023, 2022 and 2021, respectively.

A charge of $2.4 million was recorded during fiscal 2022 to ”General and administrative” expenses in our Consolidated Statements of Operations related to an asset write-down associated with an information technology software infrastructure migration.

As of September 30, 2023, our estimate of future amortization expense for definite-lived intangible assets is as follows (in thousands):

2024	$	8,297
2025	4,931
2026	2,976
2027	1,947
2028	1,378
Thereafter	9,359
	$	28,888

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