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Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2023

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 March 31, 2023
	Average	Gross
	Amortization	Carrying		Accumulated		Net
(In thousands)	Period	Amount		Amortization		Amount
Definite-lived intangible assets:
Patents	12 years	$	903	$	192	$	711
Defensive intangible assets	2 years		1,125		807		318
Customer accounts	< 1 year		125		121		4
Customer relationships	11 years		31,000		3,722		27,278
Developed technology	9 years		13,000		1,845		11,155
Subtotal			46,153		6,687		39,466
Unamortized intangible assets:
Tradenames			9,500		—		9,500
Patents pending			499		—		499
Total intangible assets		$	56,152	$	6,687	$	49,465


	Weighted-	At December 31, 2022
	Average	Gross
	Amortization	Carrying		Accumulated		Net
(In thousands)	Period	Amount		Amortization		Amount
Definite-lived intangible assets:
Patents	12 years	$	897	$	173	$	724
Defensive intangible assets	2 years		1,126		764		362
Customer accounts	< 1 year		125		114		11
Customer relationships	12 years		31,000		3,127		27,873
Developed technology	10 years		13,000		1,550		11,450
Subtotal			46,148		5,728		40,420
Unamortized intangible assets:
Tradenames			9,500		—		9,500
Patents pending			455		—		455
Total intangible assets		$	56,103	$	5,728	$	50,375

Amortization expense was $1.0 million for each of the three months ended March 31, 2023 and 2022. Future amortization expenses are expected as follows:


(In thousands)
2023 (April 1 - December 31)	$	2,849
2024		3,787
2025		3,698
2026		3,633
2027		3,623
Thereafter		21,876
Total	$	39,466

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.