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Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | 4. Goodwill and Other Intangible Assets The changes in the carrying value of goodwill for the years ended December 31, 2023 and 2022, were as follows:
|  | Surfactants Segment |  |  | Polymer Segment |  |  | Specialty Products Segment |  |  | Total |
(In thousands) |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Balance as of January 1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  | $ | 28,137 |  |  | $ | 25,689 |  |  | $ | 71,747 |  |  | $ | 74,482 |  |  | $ | 483 |  |  | $ | 483 |  |  | $ | 100,367 |  |  | $ | 100,654 |
Accumulated impairment loss |  |  | (4,445 | ) |  |  | (3,467 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4,445 | ) |  |  | (3,467 | )
Goodwill, net |  |  | 23,692 |  |  |  | 22,222 |  |  |  | 71,747 |  |  |  | 74,482 |  |  |  | 483 |  |  |  | 483 |  |  |  | 95,922 |  |  |  | 97,187 |
Goodwill acquired (1) |  |  | — |  |  |  | 1,792 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,792 |
Goodwill impairment |  |  | (1,060 | ) |  |  | (978 | ) |  |  | — |  |  |  | — |  |  |  | (483 | ) |  |  | — |  |  |  | (1,543 | ) |  |  | (978 | )
Foreign currency translation |  |  | 1,644 |  |  |  | 656 |  |  |  | 1,419 |  |  |  | (2,735 | ) |  |  | — |  |  |  | — |  |  |  | 3,063 |  |  |  | (2,079 | )
Balance as of December 31 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  | 29,781 |  |  |  | 28,137 |  |  |  | 73,166 |  |  |  | 71,747 |  |  |  | 483 |  |  |  | 483 |  |  |  | 103,430 |  |  |  | 100,367 |
Accumulated impairment loss |  |  | (5,505 | ) |  |  | (4,445 | ) |  |  | — |  |  |  | — |  |  |  | (483 | ) |  |  | — |  |  |  | (5,988 | ) |  |  | (4,445 | )
Goodwill, net |  | $ | 24,276 |  |  | $ | 23,692 |  |  | $ | 73,166 |  |  | $ | 71,747 |  |  | $ | — |  |  | $ | 483 |  |  | $ | 97,442 |  |  | $ | 95,922 |
(1) See Note 20, Acquisitions, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for information regarding the goodwill acquired in a business combination. The Company typically tests its goodwill balances for impairment in the second quarter of each calendar year. Testing is completed more frequently when triggering events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit to which goodwill relates has declined below its carrying value. During the fourth quarter of 2023 the Company concluded that the goodwill related to its Specialty Products segment was impaired. The Specialty Products segment’s impairment resulted from the Company’s decision to exit portion of its Lipid Nutrition business. The Company recorded a non-cash charge of $483,000 in the Consolidated Statements of Income for the year ended December 31, 2023 on the Goodwill and other intangibles impairment line. The impairment charge equaled the entire balance of the Specialty Products operating segment’s goodwill. Also, during the fourth quarter of 2023 the Company concluded that the goodwill related to its Colombia reporting unit was impaired. The Colombia reporting unit is part of the Company’s Surfactant segment. The impairment relating to the Company’s Colombia reporting unit was recognized as a result of the reporting unit’s fair value declining below its carrying value. The Company estimates the fair value of each of its reporting units based on the average of market and income-based computations. During the fourth quarter of 2023 the Company recorded a non-cash charge of $1,060,000 in the Consolidated Statements of Income for the year ended December 31, 2023 on the Goodwill and other intangibles impairment line. The impairment charge equaled the entire balance of goodwill at the Company’s Colombia reporting unit. Goodwill impairments for Surfactants and Specialty Products segments were excluded from Surfactants and Specialty Products segment results. See Note 17, Segment Reporting, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for additional details. At December 31, 2023, the Company conducted additional goodwill testing for its Mexico reporting unit due to a decline in earnings. The decline in earnings was primarily due to a slow down in demand and significant customer and channel inventory destocking. At December 31, 2023, the goodwill related to the Mexico reporting unit was $6,652,000. The Company used both market and income-based methodologies to assess the fair value of its Mexico reporting unit. Both approaches required the Company to make significant economic-related assumptions. Based on the Company’s testing, the fair value of the Mexico reporting unit was greater than its carrying value, and as a result, the Company did no t record any impairment charge as of December 31, 2023. The Company performed a sensitivity analysis on certain assumptions used in the valuation of its Mexico reporting unit as the fair value was not significantly in excess of the carrying value. Holding all other assumptions constant, a 100 basis point increase in the discount rate would not result in impairment nor would a 1.5 decrease in the multiple used in the market-based computation result in an impairment. During the second quarter of 2022 the Company completed its annual goodwill impairment testing and concluded that the goodwill related to its Philippines reporting unit was impaired. The Philippines reporting unit is part of the Company’s Surfactant segment. Goodwill impairment was recognized as a result of the reporting unit’s fair value declining below its carrying value. The Company estimates the fair value of each of its reporting units based on the average of market and income-based computations. The impairment relating to the Company’s Philippines reporting unit primarily resulted from lost market share at one major customer combined with higher unit overhead costs. The Company recorded a non-cash charge of $978,000 in the Consolidated Statements of Income for the year ended December 31, 2022. The impairment charge equaled the entire balance of the goodwill at the Company’s Philippines reporting unit. The following table presents the components of other intangible assets, all of which have finite lives, as of December 31, 2023 and 2022. The year-over-year changes in gross carrying values mainly resulted from the effects of foreign currency translation.
|  | Gross Carrying Value |  |  | Accumulated Amortization |
|  | December 31 (3) |  |  | December 31 (3) |
(In thousands) |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Other Intangible Assets: |  |  |  |  |  |  |  |  |  |  |  |
Patents |  | $ | 7,411 |  |  | $ | 7,411 |  |  | $ | 7,063 |  |  | $ | 6,363 |
Non-compete agreements (2) |  |  | 401 |  |  |  | 635 |  |  |  | 401 |  |  |  | 548 |
Trademarks |  |  | 11,662 |  |  |  | 11,384 |  |  |  | 6,705 |  |  |  | 5,346 |
Customer lists/relationships (2) |  |  | 49,157 |  |  |  | 46,972 |  |  |  | 16,257 |  |  |  | 12,491 |
Know-how (1)(2) |  |  | 29,543 |  |  |  | 28,908 |  |  |  | 15,177 |  |  |  | 12,536 |
Total |  | $ | 98,174 |  |  | $ | 95,310 |  |  | $ | 45,603 |  |  | $ | 37,284 |
(1) Know-how includes intellectual property rights covering proprietary information, written formulae, trade secrets or secret processes, inventions and devel opmental products (whether patentable or not), discoveries, improvements, compositions, manufacturing processes, manuals, specifications and technical data. (2) The 2022 balances include intangible assets acquired as part of the Company’s PerformanX acquisition in September 2022. See Note 20, Acquisitions, of the notes to the Company’s consolidated financial statements (included in Item 8 of this Form 10-K) for additional details. (3) The 2022 balances do not include gross carrying value and accumulated amortization amounts for intangibles assets that have been fully amortized in prior years. During the fourth quarter of 2023 the Company concluded that the patents related to its Specialty Products segment were impaired as a result of the Company’s decision to exit portions of its Lipid Nutrition business. The Company does not believe that the carrying value of these patents is recoverable. The Company recorded a non-cash charge of $495,000 in the Consolidated Statements of Income for the year ended December 31, 2023 on the Goodwill and other intangibles impairment line. Aggregate amortization expense for the years ended December 31, 2023, 2022 and 2021, was $7,368,000, $6,835,000, and $7,292,000, respectively. The Company typically recognizes amortization expense within the Cost of Sales line item on the income statement. Estimated amortization expense for identifiable intangibles assets for each of the five succeeding fiscal years is as follows:
(In thousands) |  |  |
For year ended 12/31/24 |  | $ | 7,006 |
For year ended 12/31/25 |  |  | 6,566 |
For year ended 12/31/26 |  |  | 6,354 |
For year ended 12/31/27 |  |  | 6,354 |
For year ended 12/31/28 |  |  | 4,735 |

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