INTANGIBLE ASSETS AND GOODWILL

6 Months Ended

Jun. 30, 2023

INTANGIBLE ASSETS AND GOODWILL

INTANGIBLE ASSETS AND GOODWILL

NOTE 5 – INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

Intangible assets consisted of the following at June 30, 2023 and December 31, 2022 (in thousands):

	Useful lives	2023		2022
INTANGIBLE ASSETS
Patents	4-10 years	$	182	$	182
Customer relationships	8-15 years		52,484		52,736
Technology	3-5 years		8,926		8,943
Domain	7 years		14		14
Non-compete	8-15 years		391		391
Tradenames	2-10 years		12,726		12,769
Intangible assets, at cost			74,723		75,035
Accumulated amortization			(24,854)		(22,456)
Intangible assets, net of accumulated amortization		$	49,869	$	52,579

For the three months ended June 30, 2023 and 2022, the Company recorded amortization expense of $2.2 million. For the six months ended June 30, 2023 and 2022, the Company recorded amortization expense of $4.3 million and $4.4 million, respectively. Changes to gross carrying amount of recognized intangible assets due to translation adjustments include approximately $0.3 million reduction as of June 30, 2023 and $3.1 million reduction as of December 31, 2022.

Goodwill

The Company determined that a triggering event had occurred as a result of the Company’s market capitalization that suggested one or more of the reporting units may have fallen below the carrying amounts. In addition, the Company’s change in reporting segments resulted in a change in the composition of the Company’s reporting units. As a result of these changes, the Company determined it has two reporting units for purposes of testing based upon entities that comprise the Americas and EMEA reporting segments. For purposes of impairment testing, the Company allocated goodwill to the reporting units based upon a relative fair value allocation approach and has assigned approximately $22.5 million and $2.9 million of goodwill to the America and EMEA reporting units, respectively. However, the allocation used for purposes of segment information disclosures in Note 16 differs from these values used for impairment testing as the information used by the Chief Operating Decision Maker does not assign goodwill in the same manner.  

As of June 30, 2023, the Company performed an interim goodwill impairment test as a result of the triggering events identified. In analyzing goodwill for potential impairment in the quantitative impairment test, the Company used a combination of the income and market approaches to estimate the fair value. Under the income approach, the Company calculated the fair value based on estimated future discounted cash flows. The assumptions used are based on what the Company believes a hypothetical marketplace participant would use in estimating fair value and include the discount rate, projected average revenue growth and projected long-term growth rates in the determination of terminal values. Under the market approach, the Company estimated the fair value based on market multiples of revenue or earnings before interest, income taxes, depreciation, and amortization for benchmark companies. If the fair value exceeds carrying value, then no further testing is required. However, if the fair value were to be less than carrying value, the Company would then determine the amount of the impairment charge, if any, which would be the amount that the carrying value of the goodwill exceeded its implied value. 

Based on the results of the quantitative interim impairment test, the Company concluded that the reporting unit’s goodwill was not impaired as of June 30, 2023.