Goodwill

12 Months Ended

Dec. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

The Company tests goodwill for impairment annually on October 1, or more frequently should circumstances change or events occur that would more likely than not reduce the fair value of a reporting unit below its carrying value between annual impairment tests.

Beginning January 1, 2024, Astec Digital, which was previously included in the Corporate and Other category, has been moved to the Infrastructure Solutions segment. As a result of this change in segment composition, the goodwill related to Astec Digital was allocated to another reporting unit within the Infrastructure Solutions segment.

During the second quarter of 2024, the Company identified that indicators of goodwill impairment were present due to current macroeconomic conditions, including declines in the Company's publicly quoted share price and increased interest rates, as well as lower than expected operating results. These factors indicated that one or more of the Company's reporting units may have fallen below their carrying amounts. Management elected to perform a qualitative assessment on all reporting units, and the Company concluded that a further quantitative analysis was required for the Materials Solutions reporting unit.

The Company determined the fair value of the Materials Solutions reporting unit using an equally weighted combination of the discounted cash flow method, a form of the income approach, and the guideline public company method, a form of the market approach. The significant assumptions used under the discounted cash flow method are projected net sales, projected earnings before interest, tax, depreciation and amortization ("EBITDA"), terminal growth rates and the cost of capital. Projected net sales, projected EBITDA and terminal growth rates were determined to be significant assumptions because they are primary drivers of the projected cash flows in the discounted cash flow fair value model. Cost of capital was also determined to be a significant assumption as it is the discount rate used to calculate the current fair value of those projected cash flows. The Company calculates the discount rate based on a market-participant, risk-adjusted weighted average cost of capital, which considers industry specific rates of return on debt and equity capital for a target industry capital structure, adjusted for risks associated with business size, geography and other factors specific to the reporting unit. A change in the discount rate, as a result of a change in economic conditions or otherwise, could result in the carrying value of the reporting unit exceeding its fair value. For the guideline public company method, significant assumptions relate to the selection of appropriate guideline companies and related valuation multiples used in the market analysis.

Based on the quantitative impairment test, the Company determined that the carrying value of the Materials Solutions reporting unit exceeded its fair value as of June 30, 2024. As a result, the Company recognized a pretax non-cash goodwill impairment charge of $20.2 million in "Goodwill impairment" in the Consolidated Statements of Operations to fully impair the goodwill allocated to the Materials Solutions reporting unit.

After the change to the segment composition and the impairment of the Materials Solutions reporting unit noted above, the Company's goodwill is allocated to two remaining reporting units. Management elected to perform a subsequent qualitative assessment for the October 1, 2024 annual impairment analysis, which indicated no additional impairment at its remaining reporting units. This review included the Company's evaluation of relevant events and circumstances in totality that affect the fair value of the reporting units. These events and circumstances include, but are not limited to, macroeconomic conditions, industry and competitive environment conditions, overall financial performance, business specific events and market considerations. The majority of the Company's goodwill was generated on a legacy basis and as a result have fair values that sufficiently exceed their underlying carrying values.

Management performed a qualitative and a quantitative assessment for the annual tests of goodwill impairment performed on October 1, 2023 and 2022, respectively, and concluded that there was no impairment of goodwill.

Prior periods have been revised to reflect the segment composition change for comparability. The changes in the carrying amount of goodwill and accumulated impairment losses by reporting segment during the years ended December 31, 2024 and 2023 are as follows:


(in millions)	Infrastructure Solutions		Materials Solutions		Total
Balance, December 31, 2022:
Goodwill	$	47.6	$	31.6	$	79.2
Accumulated impairment losses	(21.8)		(12.2)		(34.0)
Net	$	25.8	$	19.4	$	45.2
2023 Activity:
Foreign currency translation	$	0.4	$	0.7	$	1.1


Total 2023 activity	$	0.4	$	0.7	$	1.1
Balance, December 31, 2023:
Goodwill	$	48.0	$	32.3	$	80.3
Accumulated impairment	(21.8)		(12.2)		(34.0)
Net	$	26.2	$	20.1	$	46.3
2024 Activity:
Foreign currency translation	$	(1.2)	$	0.1	$	(1.1)

Impairment	—		(20.2)		(20.2)
Total 2024 activity	$	(1.2)	$	(20.1)	$	(21.3)
Balance, December 31, 2024:
Goodwill	$	46.8	$	32.2	$	79.0
Accumulated impairment	(21.8)		(32.2)		(54.0)
Net	$	25.0	$	—	$	25.0