Matthews International Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Sep. 30, 2015

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

19.	GOODWILL AND OTHER INTANGIBLE ASSETS:

Changes to goodwill during the years ended September 30, 2015 and 2014, follow.


	SGK Brand Solutions			Memorialization			Industrial			Consolidated

Goodwill	$	204,331		$	280,326		$	50,646		$	535,303
Accumulated impairment losses		(5,752	)		(5,000	)		-			(10,752	)
Balance at September 30, 2013		198,579			272,326			50,646			524,551

Additions during period		312,403			-			288			312,691
Translation and other adjustments		(15,684	)		(2,044	)		(47	)		(17,775	)
Goodwill		501,050			278,282			50,887			830,219
Accumulated impairment losses		(5,752	)		(5,000	)		-			(10,752	)
Balance at September 30, 2014		495,298			273,282			50,887			819,467

Additions during period		250			73,623			2,226			76,099
Translation and other adjustments		(34,653	)		(4,959	)		(226	)		(39,838	)
Goodwill		466,647			346,946			52,887			866,480
Accumulated impairment losses		(5,752	)		(5,000	)		-			(10,752	)
Balance at September 30, 2015	$	460,895		$	341,946		$	52,887		$	855,728

The Company performed its annual impairment review of goodwill in the second quarter of fiscal 2015 and determined that estimated fair value for all reporting units exceeded carrying value, therefore no adjustments to the carrying value of goodwill were necessary.

In fiscal 2015, the addition to Memorialization goodwill primarily reflects the acquisition of Aurora, and the addition to Industrial goodwill primarily reflects the acquisition of a small printing products business. The amount reflected in translation and other adjustments for the SGK Brand Solutions segment includes the impact of purchase price adjustments.

In fiscal 2014, the addition to goodwill primarily reflects the acquisition of Schawk.

In fiscal 2013, the addition to SGK Brand Solutions goodwill primarily reflects the acquisition of Wetzel; the addition to Industrial goodwill reflects the acquisition of Pyramid; the addition to Memorialization goodwill reflects the acquisition of two small manufacturers in Europe, and the effect of an adjustment to the purchase price for a small casket distributor.

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of September 30, 2015 and 2014, respectively.

	Carrying		Accumulated
	Amount		Amortization			Net
September 30, 2015:
Trade names	$	168,467	$	-	*	$	168,467
Trade names		1,815		(1,718	)		97
Customer relationships		296,689		(51,393	)		245,296
Copyrights/patents/other		11,389		(10,249	)		1,140
	$	478,360	$	(63,360	)	$	415,000

September 30, 2014:
Trade names	$	142,529	$	-	*	$	142,529
Trade names		2,854		(2,121	)		733
Customer relationships		258,441		(24,785	)		233,656
Copyrights/patents/other		14,528		(9,584	)		4,944
	$	418,352	$	(36,490	)	$	381,862
*Not subject to amortization

The net change in intangible assets during fiscal 2015 included an increase for the acquisition of Aurora, the impact of foreign currency fluctuations during the period, additional amortization, and trade name write-offs of approximately $4,842 in the SGK Brand Solutions segment, which resulted from the discontinuance of certain legacy trade names in connection with the integration of Schawk. In addition, the Company completed the sale of a majority ownership in its Schawk Digital Solutions business, which was acquired in 2014 as part of the Schawk acquisition. Net proceeds from this transaction totaled approximately $10,400, and the sale primarily resulted in the disposal of working capital and intangible assets, and the recognition of a cost-basis investment in this business. No gain or loss was recognized on the sale. The net change in intangible assets during fiscal 2014 included an increase for the acquisition of Schawk, foreign currency fluctuations during the period and additional amortization.

Amortization expense on intangible assets was $18,800, $7,318, and $4,156 in fiscal 2015, 2014 and 2013, respectively. Fiscal year amortization expense is estimated to be $21,462 in 2016, $20,315 in 2017, $19,020 in 2018, $17,985 in 2019 and $16,866 in 2020.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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