Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

At December 31, 2023 and January 1, 2023, the Company had $227.2 million of goodwill on its consolidated balance sheet, all of which relates to the HPMC segment.

The Company performs its annual goodwill impairment evaluations in the fourth quarter of each fiscal year. The $227.2 million of goodwill as of December 31, 2023 on the Company’s consolidated balance sheet is comprised of $161.2 million at the Forged Products reporting unit and $66.0 million at the Specialty Materials reporting unit. For the Company’s annual goodwill impairment evaluation in fiscal year 2023, quantitative goodwill assessments were performed for these two HPMC reporting units with goodwill. This quantitative fair value assessment includes discounted cash flow and multiples of cash earnings valuation techniques, plus valuation comparisons to recent public sale transactions of similar businesses, if any, which represents Level 3 unobservable information in the fair value hierarchy. These impairment assessments and valuation methods require the Company to make estimates and assumptions regarding revenue growth, changes in working capital and capital expenditures, selling prices and profitability that drive cash flows, and the weighted average cost of capital. Many of these assumptions are determined by reference to market participants the Company has identified. For example, the weighted average cost of capital used in the discounted cash flow assessment was 12.0% and the long-term growth rates ranged from 3% to 3.5%. In order to validate the reasonableness of the estimated fair values of the reporting units as of the valuation date, a reconciliation of the aggregate fair values of all reporting units to market capitalization was performed using a reasonable control premium. Although the Company believes that the estimates and assumptions used were reasonable, actual results could differ from those estimates and assumptions. The Specialty Materials reporting unit had a fair value that was significantly in excess of carrying value. The Forged Products reporting unit had a fair value that exceeded carrying value by approximately 60% for the fiscal year 2023 annual assessment, which increased compared to the annual evaluation for fiscal year 2022. No impairments were determined to exist from the annual goodwill impairment evaluation for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022.

No indicators of impairment were observed in fiscal years 2023, 2022 and 2021 associated with any of the Company’s long-lived assets. Accumulated goodwill impairment losses as of December 31, 2023, January 1, 2023 and January 2, 2022 were $528.0 million.

Other intangible assets, which are included in Other assets on the accompanying consolidated balance sheets as of December 31, 2023 and January 1, 2023 were as follows:


	December 31, 2023				January 1, 2023
(in millions)	Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization
Technology	$	61.2	$	(38.6)	$	61.2	$	(35.4)
Customer relationships	24.8		(12.6)		24.8		(11.6)
Trademarks	48.8		(32.5)		48.8		(29.3)
Total amortizable intangible assets	$	134.8	$	(83.7)	$	134.8	$	(76.3)

Amortization expense related to intangible assets was approximately $7 million for the fiscal year ended December 31, 2023 and $8 million for each of the fiscal years ended January 1, 2023 and January 2, 2022. For each of the fiscal years 2024 through 2028, annual amortization expense is expected to be approximately $7 million.