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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 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 September 30, 2023
	Average	Gross
	Amortization	Carrying		Accumulated		Net
(In thousands)	Period	Amount		Amortization		Amount
Definite-lived intangible assets:
Patents	12 years	$	990	$	232	$	758
Defensive intangible assets	1 year		1,125		883		242
Customer accounts	—		125		125		—
Customer relationships	11 years		31,000		4,915		26,085
Developed technology	9 years		13,000		2,436		10,564
Subtotal			46,240		8,591		37,649
Unamortized intangible assets:
Tradenames			9,500		—		9,500
Patents pending			479		—		479
Total intangible assets		$	56,219	$	8,591	$	47,628


	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 $0.9 million and $1.0 million for the three months ended September 30, 2023 and 2022, respectively, and $2.9 million for each of the nine months ended September 30, 2023 and 2022. Future amortization expenses are expected as follows:


(In thousands)
2023 (October 1 - December 31)	$	948
2024		3,792
2025		3,703
2026		3,637
2027		3,629
Thereafter		21,940
Total	$	37,649

In the third quarter of 2023, 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.