INTANGIBLE ASSETS AND GOODWILL
Intangible assets consisted of the following (in thousands):
| | | | | | | | | | | | | | | | | |
| March 31, 2026 |
| Gross Carrying Amount | | Accumulated Amortization | | Net Book Value |
| Purchased software | $ | 889 | | | $ | (681) | | | $ | 208 | |
| Internally developed software | 5,196 | | (1,574) | | 3,622 | |
| In-place lease and other intangibles | 1,094 | | (557) | | 537 | |
| Customer relationships | 8,446 | | (2,707) | | 5,739 | |
| Patents | 1,139 | | (1,118) | | 21 | |
| Government contracts | 716 | | (195) | | 521 | |
| Tradenames | 1,233 | | (46) | | 1,187 | |
| Other | 1,551 | | (1,168) | | 383 | |
| 20,264 | | (8,046) | | 12,218 | |
| In-process software | 811 | | — | | 811 | |
| Intangible assets, total | $ | 21,075 | | | $ | (8,046) | | | $ | 13,029 | |
| | | | | | | | | | | | | | | | | |
| March 31, 2025 |
| Gross Carrying Amount | | Accumulated Amortization | | Net Book Value |
| Purchased software | $ | 865 | | | $ | (549) | | | $ | 316 | |
| Internally developed software | 3,658 | | (1,111) | | 2,547 | |
| In-place lease and other intangibles | 1,094 | | (460) | | 634 | |
| Customer relationships | 8,012 | | (2,007) | | 6,005 | |
| Patents | 1,139 | | (1,114) | | 25 | |
| Government contracts | — | | — | | — | |
| Tradenames | — | | — | | — | |
| Other | 1,512 | | (1,089) | | 423 | |
| 16,280 | | (6,330) | | 9,950 | |
| In-process software | 70 | | — | | 70 | |
| Intangible assets, total | $ | 16,350 | | | $ | (6,330) | | | $ | 10,020 | |
The increase in customer relationships from March 31, 2025 to March 31, 2026 relates to changes in foreign currency translation adjustments.
Intangible assets obtained through the acquisition of Rex and recognized at acquisition date fair value included government contracts, tradenames, and internally developed software totaling $0.7 million, $1.2 million, and $1.4 million, respectively. The estimated useful lives over which the intangible assets will be amortized are as follows: government contracts (1.0 years), tradenames (7.5 years), and internally developed software (5.0 years). The weighted average amortization period is 5.1 years. Refer to Note 2 for additional information on the acquisition of Rex. Based on the intangible assets recorded at March 31, 2026 and assuming no subsequent additions to, or impairment of the underlying assets, and no changes in foreign currency exchange rates. the remaining estimated annual amortization expense is as follows (in thousands):
| | | | | |
| Amortization |
| 2027 | $ | 2,150 | |
| 2028 | 1,548 |
| 2029 | 1,458 |
| 2030 | 1,450 |
| 2031 | 1,370 |
| Thereafter | 4,242 | |
| $ | 12,218 | |
Amortization expense totaled $1.6 million and $1.2 million for the fiscal years ended March 31, 2026 and 2025.
The carrying amount of goodwill as of March 31, 2026 and March 31, 2025 was $11.8 million and $10.5 million, respectively. The increase from the prior fiscal year end balance is attributable to the Royal acquisition within the overnight air cargo segment (as described in Note 2) of $1.0 million and the $0.3 million change in foreign currency translation adjustments related to the goodwill balance at Shanwick within the digital solutions segment. There was no impairment to goodwill during the twelve months ended March 31, 2026. Goodwill for relevant segments and corporate and other, at original cost, consists of the following (in thousands):
| | | | | | | | | | | |
| March 31, 2026 | | March 31, 2025 |
| Overnight air cargo | $ | 1,113 | | | $ | 76 | |
| Commercial aircraft, engines and parts | 4,227 | | | 4,227 | |
| Digital solutions | 6,478 | | | 6,239 | |
| Total reportable segment goodwill, at cost | 11,818 | | | 10,542 | |
| Corporate and other | 376 | | | 376 | |
| Less accumulated impairment | (376) | | | (376) | |
| Goodwill, net of impairment | $ | 11,818 | | | $ | 10,542 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.