GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jan. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

The Company's goodwill of $257.1 million as of January 31, 2021 relates to the Company's Direct Marketing reporting unit, which is the only reporting unit in the Direct Marketing reportable segment. The Company has not previously recognized any impairment losses for this reporting unit.

Other intangible assets, net, as of January 31, 2021, include trademarks and tradenames, and customer relationships. The trademarks and tradenames intangible assets, which were fully amortized as of January 31, 2021, were being amortized on a straight-line basis and the customer relationship intangible assets are amortized using an accelerated method, which reflects the pattern in which the Company receives the economic benefit of the asset.

The table below presents information for the Company's intangible assets:


		January 31, 2021						July 31, 2020
	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(in years)	(In thousands)
Customer relationships	15	$	192,730	$	69,361	$	123,369	$	192,730	$	60,032	$	132,698
Trademarks and trade names	3	20,520		20,520		—		20,520		17,955		2,565
Total		$	213,250	$	89,881	$	123,369	$	213,250	$	77,987	$	135,263

The table below presents amortization expense recorded by the Company for other intangible assets:


	Three Months Ended January 31,				Six Months Ended January 31,
	2021		2020		2021		2020
	(In thousands)
Customer relationships	$	4,504	$	5,197	$	9,329	$	10,764
Trademarks and trade names	855		1,714		2,565		3,424
Total	$	5,359	$	6,911	$	11,894	$	14,188

In December 2020, a significant customer informed IWCO of its plan to transition the majority of its direct marketing services. This customer represents approximately 7.2% and 8.6% of IWCO's revenue for the six months ended January 31, 2021 and the year ended July 31, 2020, respectively. As a result, the Company performed an interim impairment test of Direct Marketing's goodwill and other long-lived assets as of January 31, 2021, and the Company determined goodwill and other long-lived assets were not impaired. The fair value of the Direct Marketing reporting unit was 6% higher than its carrying value as of January 31, 2021.

The fair value was calculated using a discounted cash flow model (a form of the income approach) using the Company's current projections, which are subject to various risks and uncertainties associated with its forecasted revenue, expenses and cash flows, as well as the duration and expected impact on its business from the COVID-19 pandemic. The Company's significant assumptions in the analysis include, but are not limited to, future cash flow projections, the weighted average cost of capital, the

terminal growth rate and the tax rate. The Company's estimates of future cash flows are based on current economic climates, recent operating results and planned business strategies. These estimates could be negatively affected by changes in regulations, further economic downturns, decreased customer demand for IWCO's services, increased customer attrition or an inability to execute IWCO's business strategies. Future cash flow estimates are, by their nature, subjective, and actual results may differ materially from the Company's estimates. If the Company's ongoing cash flow projections are not met, the Company may have to record impairment charges in future periods.