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GOODWILL & INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2023

11. GOODWILL & INTANGIBLE ASSETS

The carrying amount of goodwill at March 31, 2023 and December 31, 2022 was $113.6 million and $113.0 million respectively, and has been recorded in connection with the Company’s acquisitions. The goodwill activity is as follows (in thousands):


	March 31,		December 31,
	2023		2022
Balance, beginning of year	$	112,955	$	639,301
Foreign currency translation adjustment		616		(26,940)
Measurement period adjustments		—		(606)
Goodwill impairment		—		(498,800)
Balance, end of period	$	113,571	$	112,955

No impairment of goodwill has been recorded for the three months ended March 31, 2023 and 2022.

The measurement period adjustments of $0.6 million during 2022, represent the final measurement period adjustments related to the acquisition of May Dental Lab, Inc. in October 2021 and the acquisition of the ExOne Company in November 2021.

Due to sustained declines in the Company’s stock price and the stock prices of comparable companies, we performed interim quantitative assessments as of June 30, 2022 and December 31, 2022, utilizing a combination of the income and market approaches. The results of the quantitative analysis performed indicated that the carrying value of the reporting unit exceeded the fair value. As such, $498.8 million of goodwill impairment charges was recorded during the year ended December 31, 2022.

The Company estimated the fair value using a weighted average of the income and market approaches. Specifically, the discounted cash flow method was used under the income approach and the guideline public company and guideline merged and acquired company methods were used under the market approach. The significant assumptions used under the income approach include management’s forecasts of future revenues and EBITDA margins used to calculate projected future cash flows, discount rates, and the terminal growth rate. The terminal value is based on an exit revenue multiple which requires significant assumptions regarding the selections of appropriate multiples that consider relevant market trading data. The Company bases its estimates and assumptions on its knowledge of the additive manufacturing industry, recent performance, expectations of future performance and other assumptions the Company believes to be reasonable. The significant assumptions used under the market approach include the control premium and selection of comparable companies and comparable transactions. Comparable companies and transactions are chosen based on factors including industry classification, geographic region, product offerings, earnings growth, and profitability.

Intangible assets consisted of the following (in thousands):


		March 31, 2023						December 31, 2022
	Weighted Average	Gross				Net		Gross				Net
	Remaining Useful	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Lives (in years)	Amount		Amortization		Amount		Amount		Amortization		Amount
Acquired technology	8.3	$	196,996	$	44,502	$	152,494	$	196,367	$	36,919	$	159,448
Trade name	10.1		12,464		2,789		9,675		12,459		2,374		10,085
Customer relationships	9.6		68,199		20,270		47,929		67,915		17,663		50,252
Capitalized software	0.2		518		500		18		518		473		45
Total intangible assets		$	278,177	$	68,060	$	210,117	$	277,259	$	57,429	$	219,830

During the three months ended March 31, 2023 and 2022, the Company recognized the following amortization expense (in thousands):


	Statement of	Three Months Ended March 31,
Category	Operations Line Item	2023		2022
Acquired technology	Cost of Sales	$	6,927	$	5,990
Acquired technology	Research and Development		553		443
Trade name	General and Administrative		415		422
Customer relationships	Sales and Marketing		2,520		2,902
Capitalized software	Research and Development		27		27
		$	10,442	$	9,784

The Company expects to recognize the following amortization expense (in thousands):


	Amortization Expense
2023	$	31,339
2024		41,873
2025		39,370
2026		29,324
2027		21,083
2028 and after		47,128
Total intangible amortization	$	210,117