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Goodwill and Intangible Assets

12 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

8. Goodwill and Intangible Assets

Goodwill represents the excess of net book value over the estimated fair value of net tangible and identifiable intangible assets of a reporting unit. Goodwill is tested for impairment annually or more often if impairment indicators are present at the reporting unit level. The Company elected April 1^st as its annual goodwill impairment assessment date. If the existence of events or circumstances indicates that it is more likely than not that fair values of the reporting units are below their carrying values, the Company performs additional impairment tests during interim periods to evaluate goodwill for impairment.

In accordance with ASC 350, the Company initially assesses qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company determines, based on this assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying value, it performs a quantitative goodwill impairment test by comparing the reporting unit’s fair value with its carrying value. An impairment loss is recognized for the amount by which the reporting unit’s carrying value exceeds its fair value, up to the total amount of goodwill allocated to the reporting unit. No impairment loss is recognized if the fair value of the reporting exceeds its carrying value.

The Company has two operating, two reportable segments, and two reporting units consisting of Life Sciences Products and Life Sciences Services. The Company previously had three reporting units, which included the Life Sciences Products operating segment, which constitutes of a single reporting unit, and two reporting units within the Life Sciences Services operating segment, sample repository solutions and genomic services, which were combined into a single reporting unit within the Life Sciences Services segment following the 2021 impairment test.

The Company completed its annual goodwill impairment test as of April 1, 2022 for its two reporting units. The two reporting units include Life Sciences Products as the only reporting unit within the Life Sciences Products segment, and

Life Sciences Services as the only reporting unit within the Life Sciences Services segment. The Company conducted a qualitative assessment for both the Life Science Products and Life Science Services reporting units and determined that it was more likely than not that the fair value of each reporting unit was greater than its carrying value. Based on the test results, the Company determined that no adjustment to goodwill was necessary. As a result of the analysis, the Company did not perform the quantitative assessment for the reporting units, and did not recognize any impairment losses.

In the fourth quarter of 2022, the Company experienced a decline in our stock price resulting in its market capitalization being less than its carrying value. Therefore, as of September 30, 2022, the Company assessed several events and circumstances that could affect the significant inputs used to determine the fair value of its reporting units, including updates to operating margins and cash flows, and the overall change in the economic climate. The Company considered the decline in the market capitalization being less than the carrying value of its reporting units in its evaluation of goodwill impairment indicators and determined it appropriate to perform a quantitative assessment of both its reporting units as of September 30, 2022. The Company’s valuation was based on the DCF Method. The Company concluded that there was no impairment, as the estimated fair value of the reporting units exceeded their carrying value.

The following table sets forth the changes in the carrying amount of goodwill by reporting unit since September 30, 2020 (in thousands):



	Life Sciences		Life Sciences
	Products		Services		Total
Balance, at September 30, 2020	$	103,278	$	349,899	$	453,177
Acquisitions and currency translation adjustments		6,860		9,319		16,179
Balance, at September 30, 2021		110,138		359,218		469,356
Acquisitions and currency translation adjustments		44,474		(207)		44,267
Balance, at September 30, 2022	$	154,612	$	359,011	$	513,623

During fiscal year 2022, the Company recorded a goodwill increase of $44.3 million primarily related to the acquisitions of Barkey of $57.8 million in the fourth quarter of fiscal year 2022 net with the impact of foreign currency translation adjustments of $13.5 million.

The components of the Company’s identifiable intangible assets as of September 30, 2022 and 2021 are as follows (in thousands):


	September 30, 2022						September 30, 2021
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Amortization		Value		Cost		Amortization		Value
Patents	$	1,225	$	1,106	$	119	$	1,242	$	1,002	$	240
Completed technology		99,525		37,991		61,534		75,527		32,383		43,144
Trademarks and trade names		400		41		359		424		33		391
Non-competition agreements		681		439		242		681		249		432
Customer relationships		246,949		130,802		116,147		253,486		111,159		142,327
Other intangibles		202		202		—		246		246		—
	$	348,982	$	170,581	$	178,401	$	331,606	$	145,072	$	186,534

Amortization expense for intangible assets was $32.3 million, $37.4 million and $35.4 million, respectively, for the fiscal years ended September 30, 2022, 2021 and 2020.

Estimated future amortization expense for the intangible assets as of September 30, 2022 is as follows (in thousands):


2023	$	30,837
2024		28,157
2025		24,071
2026		21,471
2027		16,955
Thereafter		56,910
	$	178,401