Goodwill And Other Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill And Other Intangible Assets [Abstract]

8. Goodwill and Other Intangible Assets

Details and activity in the Company’s goodwill by segment are as follows:




	Performance
	Colors and		Color
	Glass		Solutions		Total
	(Dollars in thousands)
Goodwill, net at December 31, 2017	$	114,934	$	42,535	$	157,469
Acquisitions ⁽¹⁾		8,530		8,857		17,387
Foreign currency adjustments		(1,056)		(847)		(1,903)
Goodwill, net at December 31, 2018	$	122,408	$	50,545	$	172,953
Foreign currency adjustments		(506)		(238)		(744)
Goodwill, net at December 31, 2019	$	121,902	$	50,307	$	172,209

(1)During 2018, the Company recorded: 1) goodwill related to the UWiZ and Diegel acquisitions within the Color Solutions segment and 2) goodwill related to the MRA acquisition and a purchase price adjustment within the measurement period for goodwill related to the Dip-Tech acquisition within the Performance Colors and Glass segment.

Refer to Note 5 for additional details on the acquisitions mentioned above.


	December 31,		December 31,
	2019		2018
	(Dollars in thousands)
Goodwill, gross	$	230,676	$	231,420
Accumulated impairment losses		(58,467)		(58,467)
Goodwill, net	$	172,209	$	172,953

During the fourth quarter of 2019 and 2018, we performed our annual goodwill impairment testing. The test entailed comparing the fair value of our reporting units to their carrying value as of the measurement date of October 31, 2019 and October 31, 2018, respectively. We performed step 1 of the annual impairment test as defined in ASC Topic 350, Intangibles - Goodwill and Other. We estimate fair values of the reporting units using the average of both the income approach and the market approach, which we believe provides a reasonable estimate of the reporting units’ fair values, unless facts and circumstances exist that indicate more representative fair values. The income approach uses projected cash flows attributable to the reporting units and allocates certain corporate expenses to the reporting units. We use historical results, trends and our projections of market growth, internal sales efforts and anticipated cost structure assumptions to estimate future cash flows. Using a risk-adjusted, weighted-average cost of capital, we discount the cash flow projections to the measurement date. As a result of the 2019 assessment, there were no impairment indicators.

The significant assumptions and ranges of assumptions we used in our impairment analyses of goodwill follow:



Significant Assumptions	2019		2018
Weighted-average cost of capital	11.5% - 12.0	%	13.0% - 14.75	%
Residual growth rate	3.0	%	3.0	%

During our 2018 and 2017 assessments, the result of the goodwill impairment test was that there were no indicators of impairment. The Company is not aware of any events or circumstances that occurred between the annual assessment date and December 31, 2019, which would require further testing of goodwill for impairment.

During 2019, the assets pertaining to our Tile Coatings business were classified as held-for-sale and the goodwill was immaterial at December 31, 2019. At December 31, 2018, $43.5 million of goodwill, net was classified as Non-current assets held-for-sale. Refer to Note 4 for additional information on our Tile Coatings business classified as held-for-sale. During 2019, the Company recorded goodwill impairment charges of $42.5 million within our Tile Coatings business, which is included in Net income from discontinued operations, net of taxes. The fair value of the assets within the Tile Coatings business was valued below its carrying value, resulting in a $33.5 million goodwill impairment charge in the fourth quarter. There were additional $5.9 million and $3.1 million of goodwill impairment charges in the second and third quarter of 2019, respectively, which was a result of the finalization of purchase accounting of the Quimicer, FMU, and Gardenia acquisitions.

Amortizable intangible assets at December 31 consisted of the following:


	Estimated
	Economic Life	2019		2018
		(Dollars in thousands)
Gross amortizable intangible assets:
Patents	10 - 16 years	$	5,434	$	5,462
Land rights	20 - 40 years		2,979		3,015
Technology/know-how and other	1- 30 years		122,088		112,734
Customer relationships	10 - 20 years		66,454		68,184
Total gross amortizable intangible assets			196,955		189,395
Accumulated amortization:
Patents			(5,413)		(5,441)
Land rights			(1,452)		(1,389)
Technology/know-how and other			(60,121)		(42,337)
Customer relationships			(14,831)		(11,078)
Total accumulated amortization			(81,817)		(60,245)
Amortizable intangible assets, net		$	115,138	$	129,150

We amortize amortizable intangible assets on a straight-line basis over the estimated useful lives of the assets. Amortization expense related to amortizable intangible assets was $13.0 million for 2019, $12.6 million for 2018, and $10.1 million for 2017. Amortization expense for amortizable intangible assets is expected to be approximately $12.4 million for 2020, $11.2 million for 2021, $11.0 million for 2022, $10.8 million for 2023, and $10.8 million for 2024.

Indefinite-lived intangible assets at December 31 consisted of the following:



		2019		2018
	(Dollars in thousands)
Indefinite-lived intangibles assets:
Trade names and trademarks	$	12,682	$	12,813