Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Goodwill and Intangible Assets

v3.19.2
Note 8 - Goodwill and Intangible Assets
9 Months Ended
Jul. 31, 2019
Notes to Financial Statements  
Goodwill and Intangible Assets Disclosure [Text Block]
Note
8.
Goodwill and Intangible Assets
 
The Company recognized goodwill and certain intangible assets in connection with business combinations (see Note
4
- Business Combinations). The following table summarizes the composition of intangible assets at
July 31, 2019
for the Successor and at
October 31, 2018
for the Predecessor:
 
   
Successor
   
Predecessor
 
   
July 31,
   
October 31,
 
   
2019
   
2018
 
   
Gross
   
 
 
 
 
 
 
 
 
Net
   
Gross
   
 
 
 
 
Net
 
   
Carrying
   
Accumulated
   
 
 
 
 
Carrying
   
Carrying
   
Accumulated
   
Carrying
 
(in thousands)
 
Value
   
Amortization
   
CTA
   
Amount
   
Value
   
Amortization
   
Amount
 
Customer relationship
  $
191,918
    $
(21,871
)   $
144
    $
170,191
    $
47,641
    $
(23,093
)   $
24,548
 
Trade name
   
5,133
     
(352
)    
17
     
4,798
     
15,412
     
(3,540
)    
11,872
 
Trade name (indefinite life)
   
55,500
     
-
     
-
     
55,500
     
-
     
-
     
-
 
Non-compete agreements
   
200
     
(12
)    
-
     
188
     
495
     
(486
)    
9
 
Balance at period end   $
252,751
    $
(22,235
)   $
161
    $
230,677
    $
63,548
    $
(27,119
)   $
36,429
 
 
Amortization expense for the Successor for the
three
-month period ended
July 31, 2019
and the period from
December 6, 2018
to
July 31, 2019
was
$10.4
million and
$22.2
million, respectively. Amortization expense for the Predecessor from
November 1, 2018
to
December 5, 2018
and for the
three
and
nine
-month periods ended
July 31, 2018
was
$0.7
million,
$1.9
million, and
$5.7
million, respectively. The estimated aggregate amortization expense for intangible assets over the next
five
fiscal years ending
October 31
and thereafter is as follows:
 
(in thousands)
 
 
 
 
2019 (excluding the period from December 6, 2018 to July 31, 2019)
  $
9,907
 
2020
   
33,312
 
2021
   
27,233
 
2022
   
21,852
 
2023
   
17,283
 
Thereafter
   
65,590
 
Total   $
175,177
 
 
The changes in the carrying value of goodwill by reportable segment for the quarter ended
July 31, 2019
are as follows:
 
(in thousands)
 
U.S. Concrete Pumping
   
U.K. Concrete Pumping
   
Eco-Pan
   
Corporate
   
Total
 
Balance at April 30, 2019
  $
165,919
    $
22,804
    $
46,258
    $
2,459
    $
237,440
 
Measurement-period adjustments
   
(1,887
)    
18,158
     
2,875
     
-
     
16,687
 
Prior period adjustment of sales tax accrual    
(3,400
)    
-
     
-
     
-
     
(3,400
)
Acquired goodwill
   
27,733
     
-
     
-
     
(2,459
)    
27,733
 
Foreign currency translation
   
-
     
(1,409
)    
-
     
-
     
(1,409
)
Balance at July 31, 2019
  $
188,365
    $
39,553
    $
49,133
    $
-
    $
277,051
 
 
As discussed in Note
4
– Business Combinations, the Company recorded an out of period adjustment related to the reduction of sales tax accrual of
$3.4
million that resulted in changes to goodwill and liabilities assumed in the transaction. The impact of the adjustment was
not
considered material to previously issued financial statements. A significant decline in the Company's price per share as of
July 31, 2019
triggered a step
one
goodwill impairment analysis for the quarter ended
July 31, 2019.
The results of this test indicated that
no
impairment was required.