Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

At the beginning of 2022, the Company had four reporting units to which goodwill was allocated: steel, on-board weighing, DSI, and DTS.

For the steel and on-board weighing goodwill reporting units, the Company performed the qualitative assessment, which included assessment of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and other entity specific events which could impact the reporting unit. Based on this review, it was determined that the fair value of each of those reporting units was in excess of its carrying value and therefore no quantitative impairment test was required.

For the DSI and DTS goodwill reporting units, the Company performed the quantitative impairment test. In estimating the fair value of our DSI and DTS reporting units the Company used the income approach. The income approach to valuation requires management to make significant estimates and assumptions related to future revenues, profitability, working capital requirements and selection of discount rate and long term growth rate. Changes in these estimates and assumptions could have a significant impact on the fair value of the reporting units.

The Company's required goodwill and indefinite-lived asset annual impairment test is completed as of the first day of the fourth fiscal quarter each year. In 2022, the results of the quantitative impairment test for the DSI reporting unit indicated no impairment, with the fair value exceeding the carrying value by approximately 8% for goodwill and 14% for the indefinite-lived trade name. The results for the quantitative impairment test for the DTS reporting unit indicated no impairment, with the fair value exceeding the carrying value by approximately 36% for goodwill and 34% for the indefinite-lived trade name.

Prior to 2022, the Company also had an instrumentation reporting unit. The Company's analysis in 2021 resulted in an impairment for the instrumentation reporting unit, of $1.1 million in goodwill, which represented the remainder of the goodwill balance, and $0.1 million in indefinite-lived intangible trade name. The Company's analysis in 2020 resulted in the fair value exceeding the carrying value for the instrumentation reporting unit and a non-cash impairment loss of $2.4 million for the instrumentation reporting unit.

The change in the carrying amount of goodwill by segment is as follows (in thousands):

	Total		Measurement Systems								Weighing Solutions
			KELK Acquisition		DSI Acquisition		Pacific Instruments Acquisition		DTS Acquisition		Stress-Tek Acquisition
Balance at January 1, 2021	$	31,105	$	6,726	$	16,942	$	1,126	$	—	$	6,311
Goodwill acquired	15,903		—		—		—		15,903		—
Impairment charges	(1,126)		—		—		(1,126)		—		—
Foreign currency translation adjustment	(52)		(20)		(32)		—		—		—
Balance at December 31, 2021	45,830		6,706		16,910		—		15,903		6,311
Adjustment to goodwill acquired	130		—		—		—		130		—
Foreign currency translation adjustment	(416)		(393)		(23)		—		—		—
Balance at December 31, 2022	$	45,544	$	6,313	$	16,887	$	—	$	16,033	$	6,311

Intangible assets were as follows (in thousands):

	December 31,
	2022		2021
Intangible assets subject to amortization
(Definite-lived):
Patents and acquired technology	$	32,570	$	33,026
Customer relationships	33,226		34,036
Trade names	1,521		1,665
Non-competition agreements	10,133		11,335
	77,450		80,062
Accumulated amortization:
Patents and acquired technology	(9,059)		(7,430)
Customer relationships	(16,209)		(14,918)
Trade names	(1,521)		(1,665)
Non-competition agreements	(10,098)		(11,329)
	(36,887)		(35,342)
Net intangible assets subject to amortization	$	40,563	$	44,720
Intangible assets not subject to amortization
(Indefinite-lived):
Trade names	7,654		7,717
	$	48,217	$	52,437

Certain intangible assets are subject to foreign currency translation.

Amortization expense was $3.9 million, $3.3 million, and $2.4 million, for the years ended December 31, 2022, 2021, and 2020, respectively. Amortization expense in 2022 and 2021 included $1.4 million and $0.8 million related to the DTS acquisition.

Estimated annual amortization expense for each of the next five years is as follows (in thousands):

2023	$	3,729
2024	3,698
2025	3,681
2026	3,681
2027	3,647