XML 23 R12.htm IDEA: XBRL DOCUMENT
v3.22.4

Goodwill and Intangible Assets | 6 Months Ended
--- | ---
Nov. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill is not amortized, but rather, is tested for impairment annually or more frequently if impairment indicators arise. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. The Company has historically performed its annual goodwill assessment during the third quarter of each fiscal year. During the fourth quarter of fiscal year 2022, the Company changed its annual impairment assessment date from December 31 to April 30 to more closely align the impairment assessment date with the Company's long term planning and forecasting process. The Company's annual testing for impairment of goodwill was completed as of April 30, 2022. Prior to the first quarter of fiscal year 2023, the Company managed its operations as one reporting unit. At the beginning of the first quarter of fiscal year 2023, the Company began to manage its operations as two operating segments and two reporting units, namely Med Tech and Med Device (see Note 11 "Segment and Geographic Information" set forth in the Notes to our consolidated financial statements included in this Quarterly Report on Form 10-Q). As a result of this change, goodwill was required to be allocated to each reporting unit and an interim goodwill impairment assessment was performed at the Company and reporting unit levels. To determine the fair value of the individual reporting units and the entire company as of June 1, 2022, the Company utilized the income approach. The income approach is based on the projected cash flows discounted to their present value using discount rates, that in the Company's judgment, consider the timing and risk of the forecasted cash flows using internally developed forecasts and assumptions. Under the income approach, the discount rate used is the average estimated value of a market participant’s cost of capital and debt, derived using customary market metrics. Other significant assumptions include revenue growth rates, profitability projections, and terminal value growth rates. The market approach was also considered; however, the income approach was chosen as the Company determined it is a better representation of both the Med Tech and Med Device reporting units' projected long-term performance. The fair value of each reporting unit and the Company as a whole was assessed to determine if there was any impairment. The Company compared each reporting unit's fair value to the adjusted carrying value to conclude that there was no impairment for either reporting unit or the Company as a whole. The adjusted carrying value of each reporting unit was used to calculate the Company's book value to compare to its market capitalization at the assessment date. Based on the results of this evaluation, there were no adjustments to goodwill for either reporting unit or the Company as a whole as of August 31, 2022. There were no adjustments to goodwill for the six months ended November 30, 2022 other than foreign currency translation adjustments. Even though the Company determined that there was no goodwill impairment at November 30, 2022, the future occurrence of a potential indicator of impairment, such as a significant adverse change in legal, regulatory, business or economic conditions or a more-likely-than-not expectation that one of the reporting units or a significant portion of either of the reporting units will be sold or disposed of, would require an interim assessment for the reporting units prior to the next required annual assessment as of April 30, 2023. Goodwill for each reporting unit is allocated as follows:
| Six Months Ended Nov 30, 2022
(in thousands) | Med Tech |  | Med Device |  | Total
Balance, June 1, 2022 | $ | 160,529 |  |  | $ | 40,529 |  |  | $ | 201,058 |
Foreign currency translation adjustments | (20) |  |  | — |  |  | (20) |
Balance, August 31, 2022 | $ | 160,509 |  |  | $ | 40,529 |  |  | $ | 201,038 |
Foreign currency translation adjustments | (283) |  |  | — |  |  | (283) |
Balance, November 30, 2022 | $ | 160,226 |  |  | $ | 40,529 |  |  | $ | 200,755 |
There were no adjustments to goodwill for the six months ended November 30, 2022 other than foreign currency translation adjustments. Definite Lived Intangible Assets Intangible assets other than goodwill are amortized over their estimated useful lives on a straight-line basis. Useful lives range from two to eighteen years. The Company periodically reviews, and adjusts, if necessary, the estimated useful lives of its intangible assets and reviews such assets or asset groups for impairment whenever events or changes in circumstances indicate that the carrying value of the assets or asset groups may not be recoverable. If an intangible asset or asset group is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset. Intangible assets consisted of the following:
| Nov 30, 2022
(in thousands) | Gross carrying value |  | Accumulated amortization |  | Net carrying value |  |
Product technologies | $ | 237,863 |  |  | $ | (119,301) |  |  | $ | 118,562 |  |  |
Customer relationships | 60,076 |  |  | (39,972) |  |  | 20,104 |  |  |
Trademarks | 9,950 |  |  | (7,326) |  |  | 2,624 |  |  |
Licenses | 5,377 |  |  | (4,724) |  |  | 653 |  |  |
| $ | 313,266 |  |  | $ | (171,323) |  |  | $ | 141,943 |  |  |
| May 31, 2022
(in thousands) | Gross carrying value |  | Accumulated amortization |  | Net carrying value |  |
Product technologies | $ | 239,467 |  |  | $ | (112,141) |  |  | $ | 127,326 |  |  |
Customer relationships | 60,115 |  |  | (38,003) |  |  | 22,112 |  |  |
Trademarks | 9,950 |  |  | (7,185) |  |  | 2,765 |  |  |
Licenses | 4,837 |  |  | (4,660) |  |  | 177 |  |  |
| $ | 314,369 |  |  | $ | (161,989) |  |  | $ | 152,380 |  |  |
Amortization expense for the three months ended November 30, 2022 and 2021 was $4.8 million and $4.9 million, respectively. Amortization expense for the six months ended November 30, 2022 and 2021 was $9.6 million and $9.7 million, respectively. Expected future amortization expense related to the intangible assets for each of the following fiscal years is as follows:
(in thousands) |
Remainder of 2023 | $ | 9,229 |
2024 | 16,680 |
2025 | 16,662 |
2026 | 16,481 |
2027 | 16,310 |
2028 and thereafter | 66,581 |
| $ | 141,943 |

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration