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Goodwill and Other Intangible Assets | 9 Months Ended
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Feb. 29, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | NOTE 4 - GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill, by reportable segment, for the nine months ended February 29, 2024 and February 28, 2023, are as follows:
|  | CPG |  |  | PCG |  |  | Consumer |  |  | SPG |  |  |  |
(In thousands) |  | Segment |  |  | Segment |  |  | Segment |  |  | Segment |  |  | Total |
Balance as of May 31, 2023 |  | $ | 450,555 |  |  | $ | 161,732 |  |  | $ | 531,227 |  |  | $ | 150,074 |  |  | $ | 1,293,588 |
Acquisitions |  |  | 11,993 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 11,993 |
Transfers |  |  | (11,414 | ) |  |  | 11,414 |  |  |  | - |  |  |  | - |  |  |  | - |
Translation adjustments & other |  |  | 2,244 |  |  |  | 491 |  |  |  | 1,105 |  |  |  | 323 |  |  |  | 4,163 |
Balance as of February 29, 2024 |  | $ | 453,378 |  |  | $ | 173,637 |  |  | $ | 532,332 |  |  | $ | 150,397 |  |  | $ | 1,309,744 |
|  | CPG |  |  | PCG |  |  | Consumer |  |  | SPG |  |  |  |
(In thousands) |  | Segment |  |  | Segment |  |  | Segment |  |  | Segment |  |  | Total |
Balance as of May 31, 2022 |  | $ | 453,651 |  |  | $ | 201,815 |  |  | $ | 515,597 |  |  | $ | 166,805 |  |  | $ | 1,337,868 |
Acquisitions |  |  | 7,306 |  |  |  | 907 |  |  |  | 16,952 |  |  |  | 281 |  |  |  | 25,446 |
Divestitures |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (15,723 | ) |  |  | (15,723 | )
Impairments |  |  | - |  |  |  | (36,745 | ) |  |  | - |  |  |  | - |  |  |  | (36,745 | )
Translation adjustments & other |  |  | (14,452 | ) |  |  | (3,737 | ) |  |  | (3,364 | ) |  |  | (1,222 | ) |  |  | (22,775 | )
Balance as of February 28, 2023 |  | $ | 446,505 |  |  | $ | 162,240 |  |  | $ | 529,185 |  |  | $ | 150,141 |  |  | $ | 1,288,071 |
Total accumulated goodwill impairment losses were $193.0 million a t February 29, 2024 and February 28, 2023. Of the accumulated balance, $141.4 million is included in our SPG segment, $14.9 million is included in our CPG segment, and $36.7 million is included in our PCG segment. There were no impairment losses recorded during fiscal 2024. Changes in the Composition of our Segments in the First Quarter of Fiscal 2024 Effective June 1, 2023, certain Asia Pacific businesses and management structure, formerly of our CPG segment, were transferred to our PCG segment to create operating efficiencies and a more unified go-to-market strategy in Asia Pacific. As a result of this business realignment, $11.4 million of goodwill was reassigned from the CPG segment to the PCG segment using a relative fair value allocation approach. USL Restructuring in the First Quarter of Fiscal 2024 Effective June 1, 2023, certain businesses of our USL reporting unit were transferred to our Fibergrate, Carboline and Stonhard reporting units within our PCG segment. As a result of this change, USL was no longer designated as a separate reporting unit and any remaining goodwill was transferred to the reporting units noted above. Additionally, during the three-month period ended August 31, 2023, we recognized a loss on sale of $4.5 million in connection with the divestiture of Universal Sealants' (USL) Bridgecare services division, which is a contracting business focused on the installation of joints and waterproofing in the U.K. The loss on this sale is included in selling, general and administrative ("SG&A") expenses in our Consolidated Statements of Income and net loss (gain) on sales of assets and businesses in our Consolidated Statements of Cash Flows. Given these USL restructuring actions, we performed an interim impairment assessment of a remaining USL indefinite-lived tradename. Calculating the fair value of the tradename required the use of various estimates and assumptions. We estimated the fair value by applying a relief-from-royalty calculation, which included discounted future cash flows related to projected revenues impacted by this decision. In applying this methodology, we relied on a number of factors, including actual and forecasted revenues and market data. As the carrying amount of the tradename exceeded its fair value, an impairment loss of $3.3 million was recorded for the three months ended August 31, 2023. This impairment loss was classified as restructuring expense within our PCG segment. USL Impairment Charges Recorded in the Third Quarter of Fiscal 2023 For the three and nine months ended February 28, 2023, we recognized $36.7 million of goodwill impairment losses, which was recorded by our PCG segment. As part of our MAP 2025 operational improvement initiative and given the challenged macroeconomic environment, we evaluated certain business restructuring actions, specifically our go to market strategy for operating in Europe. During the third quarter ended February 28, 2023, due to declining profitability and regulatory headwinds, management decided to restructure the USL reporting unit within our PCG segment and correspondingly explored strategic alternatives for our USL infrastructure services business within the U.K., which represented approximately 30% of annual revenues of the reporting unit. Due to this decision, we determined that an interim goodwill impairment assessment was required, as well as an impairment assessment for our other long-lived assets. Accordingly, for the three and nine months ended February 28, 2023, we recorded an impairment loss totali ng $36.7 million for the im pairment of goodwill a nd $2.5 million f or the impairment of an indefinite-lived tradename in our USL reporting unit. We did no t record any impairments for our definite-lived long-lived assets as a result of this assessment. Our goodwill impairment assessment included estimating the fair value of our USL reporting unit and comparing it with its carrying amount at February 28, 2023. Since the carrying amount of the USL reporting unit exceeded its fair value, we recognized an impairment loss. We estimated the fair value of the USL reporting unit using both the income and the market approaches. For the income approach, we estimated the fair value of our USL reporting unit by applying a discounted future cash flow calculation to USL’s projected earnings before interest, taxes, depreciation and amortization (“EBITDA”). In applying this methodology, we relied on a number of factors, including actual and forecasted operating results, future operating margins, and market data. The discounted cash flow used in the goodwill impairment test for USL assumed discrete period revenue growth through fiscal 2027 for the ongoing USL businesses in the U.K. and North America as well as probability-weighted cash flows that were dependent on the methodology utilized in determining strategic alternatives for the U.K. infrastructure services business. In applying the market approach, we used market multiples derived from a set of companies similar to USL. After recording the goodwill imp airment charge of $36.7 million, $1.1 million of goodwill remained on th e USL balance sheets as of February 28, 2023. Calculating the fair value of USL’s indefinite-lived tradenames required the use of various estimates and assumptions. We estimated the fair value of USL’s indefinite-lived tradenames by applying a relief-from-royalty calculation, which included discounted future cash flows related to projected revenues for the USL tradenames impacted by this decision. In applying this methodology, we relied on a number of factors, including actual and forecasted revenues and market data. As the carrying amount of one of the tradenames exceeded its fair value, an impairment loss o f $2.5 million was recorded for the three and nine months ended February 28, 2023. This impairment loss was classified in restructuring expense within our PCG segment. The impairment assessment for our long-lived assets, such as property and equipment and purchased intangibles subject to amortization, involved estimating the fair value of USL’s long-lived assets and comparing it with its carrying amount. Measuring a potential impairment of long-lived assets requires the use of various estimates and assumptions, including the determination of which cash flows are directly related to the assets being evaluated, the respective useful lives over which those cash flows will occur and potential residual values, if any. The results of our testing indicated that the carrying values of these assets were recoverable, as such we did no t record an impairment of our long-lived assets for the three and nine months ended February 28, 2023.

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