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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2024

Note 8 — Goodwill and Intangible Assets

Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. There were no changes in goodwill balances during the year ended December 31, 2024.

The Company performs its annual goodwill impairment test at the beginning of the fourth quarter each year. As the Company maintains a single goodwill reporting unit, it determines the fair value of its reporting unit based upon the Company’s adjusted market capitalization. The annual test performed at the beginning of the fourth quarter of fiscal 2024, 2023, and 2022 did not result in any potential impairment as the fair value of the reporting unit was determined to exceed the carrying amount of the reporting unit.

The valuation of goodwill will continue to be subject to changes in the Company’s market capitalization and observable market control premiums. This analysis is sensitive to changes in the Company’s stock price and absent other qualitative factors, the Company may be required to record goodwill impairment charges in future periods if the stock price declines and remains depressed for an extended period of time.

The components of purchased intangible assets were as follows:


		December 31, 2024						December 31, 2023
	Average			Accumulated						Accumulated
	Remaining	Gross		Amortization				Gross		Amortization
	Amortization	Carrying		and		Net		Carrying		and		Net
	Period	Amount		Impairment		Amount		Amount		Impairment		Amount

	(in years)	(in thousands)
Technology	1.3	$	355,928	$	354,066	$	1,862	$	355,928	$	321,923	$	34,005
Customer relationships	4.3		146,925		139,955		6,970		146,925		137,649		9,276
Trademarks and tradenames	-		30,910		30,910		—		30,910		30,269		641
Other	-		3,746		3,746		—		3,746		3,723		23
Total	3.7	$	537,509	$	528,677	$	8,832	$	537,509	$	493,564	$	43,945

Other intangible assets primarily consist of patents, licenses, and backlog.

During the fourth quarter of 2024, the Company lowered its projected cash flows for the Epiluvac asset group, which were significantly below the projected cash flows at the time of the acquisition. The reduced projections were based on the Company’s market penetration not meeting expectations associated with the SiC technology. This required the Company to assess the Epiluvac asset group for impairment. As a result of the analysis, which included projected sales and other cash flows that required the use of unobservable inputs, the Company recorded a non-cash impairment charge of $28.1 million related to definite-lived intangible assets during the fourth quarter of 2024. The impairment charge is included in “Asset impairment” in the Consolidated Statement of Operations.

Based on the intangible assets recorded at December 31, 2024, and assuming no subsequent additions to or impairment of the underlying assets, the remaining estimated annual amortization expense, is expected to be as follows:


	Amortization
	(in thousands)
2025	$	3,136
2026		2,134
2027		1,550
2028		1,481
2029		531
Total	$	8,832