Annual report pursuant to Section 13 and 15(d)

Goodwill and Other Intangible Assets

v3.22.4
Goodwill and Other Intangible Assets
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets
16. Goodwill and Other Intangible Assets:
The changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 is summarized as follows:
Ecoservices Catalyst Technologies Total
Balance as of December 31, 2020 $ 311,892  $ 79,673  $ 391,565 
Goodwill recognized (Note 6)
 14,778  —  14,778 
Foreign exchange impact —  (204) (204)
Balance as of December 31, 2021 326,670  79,469  406,139 
Goodwill adjustments (1)
(81) —  (81)
Foreign exchange impact —  (2,895) (2,895)
Balance as of December 31, 2022 $ 326,589  $ 76,574  $ 403,163 
(1)     During the year ended December 31, 2022, the Company recorded an adjustment of $81 between goodwill and deferred tax liabilities related to the final tax purchase price allocation for the Chem32 acquisition.
The Company completed its annual goodwill impairment assessments as of October 1, 2022 and 2021. For the annual assessments, the Company bypassed the option to perform the qualitative assessment and proceeded directly to performing the quantitative goodwill impairment test for each of its reporting units. The quantitative test identifies both the potential existence of impairment and the amount of impairment loss. For each of the October 1, 2022 and 2021 assessments, the Company identified two reporting units, which align with the Company’s operating segments.
The Company determined the fair value of its reporting units using a split between a market approach and an income, or discounted cash flow, approach. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The Company estimates reporting unit market approach fair value using publicly traded comparable company values and applies the selected market multiples to each reporting unit’s trailing twelve months adjusted EBITDA. The Company estimates reporting unit income-based fair value using the discounted cash flow approach. This approach requires use of significant assumptions about future cash flows and based on management’s assessment of a number of factors. Such factors include reporting unit revenue growth rates from implementation of strategic plans, operating margin growth rates, the perpetual growth rate, and the weighted average cost of capital, as well as the reporting unit’s recent performance and management’s ability to execute on planned future strategic initiatives. Discount rate assumptions are based on an assessment of the risk inherent in those future cash flows.
As of October 1, 2022, the fair values of each of the Company’s reporting units exceeded their respective carrying values and therefore, no goodwill impairment exists for the year ended December 31, 2022.
In addition to the annual goodwill impairment assessment, the Company also performed the annual impairment test over its other indefinite-lived intangible assets as of October 1, 2022 and 2021. The fair values of the Company’s indefinite-lived trade names and trademarks were in excess of their carrying amounts as of the respective testing dates, and as such, there was no further impairment of the Company’s indefinite-lived intangible assets for the years ended December 31, 2022 and 2021.
Gross carrying amounts and accumulated amortization for intangible assets other than goodwill are as follows:
December 31, 2022 December 31, 2021
Gross
Carrying
Amount		 Accumulated
Amortization		 Net
Balance		 Gross
Carrying
Amount		 Accumulated
Amortization		 Net
Balance
Technical know-how $ 54,880  $ (23,822) $ 31,058  $ 55,922  $ (20,648) $ 35,274 
Customer relationships 130,636  (66,669) 63,967  131,248  (57,262) 73,986 
Non-compete agreements 700  (257) 443  700  (117) 583 
Trademarks 7,387  (3,283) 4,104  7,682  (2,902) 4,780 
Trade names 1,600  (293) 1,307  1,600  (133) 1,467 
Total definite-lived intangible assets 195,203  (94,324) 100,879  197,152  (81,062) 116,090 
Indefinite-lived trade names 25,153  —  25,153  25,627  —  25,627 
In-process research and development 3,900  —  3,900  3,900  —  3,900 
Total intangible assets $ 224,256  $ (94,324) $ 129,932  $ 226,679  $ (81,062) $ 145,617 
The Company amortizes technical know-how over periods that range from ten years to twenty years, customer relationships over periods that range from ten years to fifteen years, non-compete agreements over five years, trademarks over fifteen years, and trade names over ten years. In-process research and development intangible assets are considered indefinite-lived until such time as the associated projects are completed, at which time amortization commences on the assets, or abandoned, which results in the impairment of the assets.
Amortization expense related to technical know-how is included in cost of goods sold in the consolidated statements of income and was $3,480, $3,465 and $3,111 for the years ended December 31, 2022, 2021 and 2020, respectively. Amortization expense related to customer relationships, non-compete agreements, trademarks, and tradenames is included in other operating expense, net in the consolidated statements of income and was $10,562, $10,321 and $8,678 for the years ended December 31, 2022, 2021 and 2020, respectively.
Estimated future aggregate amortization expense of intangible assets is as follows:
Year 
Amount 
2023 $ 14,023 
2024 14,023 
2025 14,023 
2026 12,881 
2027 12,346 
Thereafter 33,583 
Total estimated future aggregate amortization expense $ 100,879