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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2022

Note 6. Goodwill and Intangible Assets

Goodwill

In the third quarter of fiscal 2021, we completed the AffloVest Acquisition. The purchase price of the AffloVest product line exceeded the net acquisition-date estimated fair value amounts of the identifiable assets acquired and the liabilities assumed by $31.1 million, which was assigned to goodwill.

Intangible Assets

Our patents and other intangible assets are summarized as follows:


	Weighted-	At September 30, 2022
	Average	Gross
	Amortization	Carrying		Accumulated		Net
(In thousands)	Period	Amount		Amortization		Amount
Definite-lived intangible assets:
Patents	12 years	$	829	$	157	$	672
Defensive intangible assets	3 years		1,125		721		404
Customer accounts	1 year		125		108		17
Customer relationships	12 years		31,000		2,530		28,470
Developed technology	10 years		13,000		1,254		11,746
Subtotal			46,079		4,770		41,309
Unamortized intangible assets:
Tradenames			9,500		—		9,500
Patents pending			499		—		499
Total intangible assets		$	56,078	$	4,770	$	51,308


	Weighted-	At December 31, 2021
	Average	Gross
	Amortization	Carrying		Accumulated		Net
(In thousands)	Period	Amount		Amortization		Amount
Definite-lived intangible assets:
Patents	12 years	$	666	$	109	$	557
Defensive intangible assets	3 years		1,125		592		533
Customer accounts	1 year		125		89		36
Customer relationships	13 years		31,000		742		30,258
Developed technology	11 years		13,000		368		12,632
Subtotal			45,916		1,900		44,016
Unamortized intangible assets:
Tradenames			9,500		—		9,500
Patents pending			565		—		565
Total intangible assets		$	55,981	$	1,900	$	54,081

Amortization expense was $1.0 million and $0.3 million for the three months ended September 30, 2022 and 2021, respectively, and $2.9 million and $0.4 million for the nine months ended September 30, 2022 and 2021, respectively. Future amortization expenses are expected as follows:


(In thousands)
2022 (October 1 - December 31)	$	958
2023		3,801
2024		3,780
2025		3,690
2026		3,626
Thereafter		25,454
Total	$	41,309

In the third quarter of 2022, we performed our annual goodwill impairment test utilizing both the qualitative and quantitative approach described in FASB ASU No. 2021-03, “Intangibles—Goodwill and Other (Topic 350) – Accounting Alternative for Evaluating Triggering Events. Based on the testing using the qualitative approach, it was determined that it was not more likely than not that the fair value of the reporting unit was less than the carrying value. As a result, it was not deemed necessary to proceed to the quantitative test and no impairment was recognized.