GOODWILL AND OTHER INTANGIBLE ASSETS, NET

12 Months Ended

Jul. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

In connection with the application of pushdown accounting, the Company recorded intangible assets for goodwill, customer relationships, and tradenames. A reconciliation of the change in the carrying amount of goodwill by reportable segment is as follows:


	Supply Chain
(in thousands)
Balance at July 31, 2023 (Successor)
Gross goodwill	$	22,785
Accumulated impairments	—
Net goodwill	$	22,785
Balance at July 31, 2024 (Successor)
Gross goodwill	$	22,785
Accumulated impairments	—
Pushdown accounting adjustment	(3,082)
Net goodwill	$	19,703

The Company’s annual impairment test date is June 1st each year. For the fiscal year ended July 31, 2024, the Company utilized a quantitative approach for its single reporting unit. The assessment was based on a combination of income and market approaches to estimate the fair value of the reporting unit, which indicated that the fair value of the reporting unit exceeded its respective carrying value. Significant assumptions used in the discounted cash flow analysis included expected future earnings and cash flows, which are based on management's current expectations, as well as the related risk-adjusted discount rate used to estimate fair value. There were no goodwill impairment charges recorded as a result of this assessment. At July 31, 2024, the goodwill related to the Supply Chain reporting unit is at risk of future impairment if the fair value of this reporting unit, and its associated assets, decrease in value due to the amount and timing of expected future cash flows, decreased customer demand for Supply Chains' services, an inability to execute management’s business strategies, or general market conditions, such as economic downturns, and changes in interest rates, including discount rates. 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 or if market factors utilized in the impairment test deteriorate, including an unfavorable change in the terminal growth rate or the weighted-average cost of capital, the Company may have to record impairment charges in future periods. As of July 31, 2024 the Supply Chain reporting unit had $19.7 million of goodwill and its fair value exceeded its net book value by 12%.

A summary of Other intangible assets, net is as follows:


	Successor
	July 31, 2024						July 31, 2023
	(in thousands)
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	$	25,000	$	4,464	$	20,536	$	25,000	$	911	$	24,089
Trade name	10,500		—		10,500		10,500		—		10,500
Total	$	35,500	$	4,464	$	31,036	$	35,500	$	911	$	34,589

The trade name intangible asset has an indefinite useful life. Customer relationships are amortized on a straight-line basis. Amortization expense related to intangible assets was $3.6 million and $0.9 million for the fiscal years ended July 31, 2024 and 2023, respectively.

For the fiscal year ended July 31, 2024, the Company applied the relief-from-royalty method under the income approach to value the trade name indefinite-lived intangible asset. Significant assumptions used included the amount and timing of projected revenues, growth rates, royalty rates, discount rates, and tax amortization benefit. There were no impairment charges recorded as a result of this assessment. At July 31, 2024, the trade name indefinite-lived intangible asset is at risk of future impairment if the fair value of the trade name decreases in value due to unfavorable changes in the weighted-average cost of capital, revenue growth rates, or royalty rates. As of July 31, 2024 the trade name indefinite-lived intangible asset's fair value exceeded its net book value by 10%.

Based on gross carrying amounts at July 31, 2024, the Company's estimate of amortization expense for each of the five succeeding years and thereafter is as follows:


	Fiscal Year Ending July 31,
	2025		2026		2027		2028		2029		Thereafter
	(In thousands)
Estimated amortization expense	$	3,571	$	3,571	$	3,571	$	3,571	$	3,571	$	2,681