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Goodwill and Other Intangible Assets | 12 Months Ended
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May 31, 2025
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | NOTE C — GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill, by reportable segment, for the years ended May 31, 2025 and 2024, are as follows:
|  | CPG |  |  | PCG |  |  | Consumer |  |  | SPG |  |  |  |
(In thousands) |  | Segment |  |  | Segment |  |  | Segment |  |  | Segment |  |  | Total |
Balance as of June 1, 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 |  |  | 333 |  |  |  | 670 |  |  |  | 1,751 |  |  |  | 576 |  |  |  | 3,330 |
Balance as of May 31, 2024 |  |  | 451,467 |  |  |  | 173,816 |  |  |  | 532,978 |  |  |  | 150,650 |  |  |  | 1,308,911 |
Acquisitions |  |  | 28,925 |  |  |  | 46,091 |  |  |  | 229,787 |  |  |  | 1,222 |  |  |  | 306,025 |
Impairments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (11,352 | ) |  |  | (11,352 | )
Translation adjustments & other |  |  | 4,563 |  |  |  | 3,766 |  |  |  | 5,314 |  |  |  | 399 |  |  |  | 14,042 |
Balance as of May 31, 2025 |  | $ | 484,955 |  |  | $ | 223,673 |  |  | $ | 768,079 |  |  | $ | 140,919 |  |  | $ | 1,617,626 |
Total accumulated goodwill impairment losses were $204.4 million at May 31, 2025. Of the accumulated balance, $152.8 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. Conclusion on Annual Goodwill and Indefinite-Lived Intangible Assets Impairment Tests As a result of the annual impairment assessments performed for fiscal 2025, we recorded a goodwill impairment loss of $11.4 million for our Color Group reporting unit in our SPG Segment. The impairment is related to continued softness in OEM markets and underperformance in our growth initiatives associated with this reporting unit. After recording the goodwill impairment charge, no goodwill remained on the Color Group’s balance sheet as of May 31, 2025. As a result of the annual impairment assessments performed for fiscal 2024 and 2023, there were no goodwill impairments. Our annual impairment test of our indefinite-lived intangible assets performed during fiscal 2025 resulted in a $1.7 million impairment charge for an indefinite-lived tradename in our SPG segment. Our annual impairment test of our indefinite-lived intangible assets performed during fiscal 2024 resulted in a $1.0 million impairment charge for an indefinite-lived tradename in our Consumer segment. These impairment losses were classified as SG&A expenses in our Consolidated Statements of Income. Our annual impairment test of our indefinite-lived intangible assets performed during fiscal 2023 did not result in an impairment charge. Changes in the Composition of our Segments and USL Restructuring in the First Quarter of Fiscal 2024 Effective June 1, 2023, in connection with our MAP 2025 operating improvement program, we realigned certain businesses and management structures within our CPG, PCG and SPG segments. As outlined in Note R, “Segment Information,” our CPG APAC and CPG India businesses, formerly of our Sealants reporting unit within our CPG segment, were transferred to our Platform component within our PCG segment. As a result of this change, we designated the Platform component as a separate reporting unit within our PCG segment and $11.4 million of goodwill was reassigned from the CPG segment to the PCG segment using a relative fair value allocation approach. Within our SPG segment, two new reporting units were formed as our former DayGlo and Kirker reporting units were combined into one reporting unit: The Color Group, and our former Wood Finishes, Kop-Coat Protection Products, TCI and Modern Recreational Technologies reporting units were combined into one reporting unit: The Industrial Coatings Group. Additionally, 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 SG&A in our Consolidated Statements of Income and net (gain) on sales of assets and businesses in our Consolidated Statements of Cash Flows. During the first quarter of fiscal 2024, we performed a goodwill impairment test for the reporting units affected by the USL restructuring and the changes in the composition of our segments and reporting units using either a qualitative or quantitative assessment. We concluded that the estimated fair values exceeded the carrying values for these reporting units, and accordingly, no indications of impairment were identified as a result of these changes. Furthermore, 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. Changes in the Composition of Reporting Units in the Fourth Quarter of Fiscal 2023 Subsequent to our annual impairment assessment, in the fourth quarter of fiscal 2023 and in connection with our MAP 2025 initiative, the Viapol business within our CPG segment was realigned from our Sealants reporting unit to our Euclid reporting unit. We performed an interim goodwill impairment assessment for both of the impacted reporting units using a quantitative assessment. Based on this assessment, we concluded that the estimated fair values exceeded the carrying values for these reporting units, and accordingly, no goodwill impairment was identified as a result of this realignment. USL Impairment Charges Recorded in the Third Quarter of Fiscal 2023 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, 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 during the third quarter of fiscal 2023. 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 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 the USL balance sheet as of May 31, 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 those 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 during fiscal 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 during fiscal 2023. Other intangible assets consist of the following major classes:
|  |  |  | Gross |  |  |  |  |  | Net Other |
|  | Amortization |  | Carrying |  |  | Accumulated |  |  | Intangible |
(In thousands) |  | Period (In Years) |  | Amount |  |  | Amortization |  |  | Assets |
As of May 31, 2025 |  |  |  |  |  |  |  |  |  |  |
Amortized intangible assets |  |  |  |  |  |  |  |  |  |  |
Formulae |  | 9 to 33 |  | $ | 239,208 |  |  | $ | (207,934 | ) |  | $ | 31,274 |
Customer-related intangibles |  | 5 to 33 |  |  | 724,297 |  |  |  | (339,492 | ) |  |  | 384,805 |
Trademarks/names |  | 5 to 40 |  |  | 33,669 |  |  |  | (24,129 | ) |  |  | 9,540 |
Other |  | 3 to 30 |  |  | 25,079 |  |  |  | (23,498 | ) |  |  | 1,581 |
Total Amortized Intangibles |  |  |  |  | 1,022,253 |  |  |  | (595,053 | ) |  |  | 427,200 |
Indefinite-lived intangible assets |  |  |  |  |  |  |  |  |  |  |
Trademarks/names |  |  |  |  | 353,626 |  |  |  | - |  |  |  | 353,626 |
Total Other Intangible Assets |  |  |  | $ | 1,375,879 |  |  | $ | (595,053 | ) |  | $ | 780,826 |
As of May 31, 2024 |  |  |  |  |  |  |  |  |  |  |
Amortized intangible assets |  |  |  |  |  |  |  |  |  |  |
Formulae |  | 9 to 33 |  | $ | 238,671 |  |  | $ | (200,846 | ) |  | $ | 37,825 |
Customer-related intangibles |  | 5 to 33 |  |  | 508,398 |  |  |  | (302,783 | ) |  |  | 205,615 |
Trademarks/names |  | 5 to 40 |  |  | 35,476 |  |  |  | (24,848 | ) |  |  | 10,628 |
Other |  | 3 to 30 |  |  | 25,060 |  |  |  | (23,200 | ) |  |  | 1,860 |
Total Amortized Intangibles |  |  |  |  | 807,605 |  |  |  | (551,677 | ) |  |  | 255,928 |
Indefinite-lived intangible assets |  |  |  |  |  |  |  |  |  |  |
Trademarks/names |  |  |  |  | 257,044 |  |  |  | - |  |  |  | 257,044 |
Total Other Intangible Assets |  |  |  | $ | 1,064,649 |  |  | $ | (551,677 | ) |  | $ | 512,972 |
The aggregate intangible asset amortization expense for the fiscal years ended May 31, 2025, 2024 and 2023 was $45.5 million, $39.1 million and $43.5 million, respectively. For the next five fiscal years, we estimate annual intangible asset amortization expense related to our existing intangible assets to approximate the following: fiscal 2026 — $42.0 million, fiscal 2027 — $40.4 million, fiscal 2028 — $38.2 million, fiscal 2029 — $36.9 million and fiscal 2030 — $34.7 million.

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