Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

The following table sets forth the gross carrying value, accumulated amortization and net values of intangible assets and goodwill as of September 30, 2024 and December 31, 2023:


	September 30, 2024
(in thousands)	Amortization life in years	Gross carrying amount		Accumulated amortization		Net carrying amount

Finite-lived assets:
AEC Trademarks and trade names	6-15	$	208	$	(194)	$	14
AEC Technology	10-15	6,226		(3,201)		3,025
AEC Intellectual property	15	1,250		(402)		848
AEC Customer relationships	8-15	69,395		(46,500)		22,895
Heimbach Developed technology	9	9,166		(1,090)		8,076
Total Finite-lived intangible assets		$	86,245	$	(51,387)	$	34,858

Indefinite-lived intangible assets:
Heimbach Trade name		$	6,138	$	—	$	6,138
MC Goodwill		67,407		—		67,407
AEC Goodwill		113,505		—		113,505
Total Indefinite-lived intangible assets:		$	187,050	$	—	$	187,050


	December 31, 2023
(in thousands)	Amortization life in years	Gross carrying amount		Accumulated amortization		Net carrying amount

Finite-lived assets:
AEC Trademarks and trade names	6-15	$	208	$	(186)	$	22
AEC Technology	10-15	6,161		(2,735)		3,426
AEC Intellectual property	15	1,250		(339)		911
AEC Customer relationships	8-15	69,360		(43,875)		25,485
Heimbach Developed technology	9	9,042		(310)		8,732
Total Finite-lived assets		$	86,021	$	(47,445)	$	38,576

Indefinite-lived intangible assets:
Heimbach Trade name		$	6,070	$	—	$	6,070
MC Goodwill		66,873		—		66,873
AEC Goodwill		113,308		—		113,308
Total Indefinite-lived intangible assets:		$	186,251	$	—	$	186,251

The changes in intangible assets, net and goodwill from December 31, 2023 to September 30, 2024, were as follows:


(in thousands)	December 31, 2023		Other Changes		Amortization		Currency Translation		September 30, 2024
Finite-lived intangible assets:
AEC Trademarks and trade names	$	22	$	—	$	(8)	$	—	$	14
AEC Technology	3,426		—		(428)		27		3,025
AEC Intellectual property	911		—		(63)		—		848
AEC Customer relationships	25,485		—		(2,611)		21		22,895
Heimbach Developed technology	8,732		—		(767)		111		8,076
Total Finite-lived intangible assets	$	38,576	$	—	$	(3,877)	$	159	$	34,858

Indefinite-lived intangible assets:
Heimbach Trade name	$	6,070	$	—	$	—	$	68	$	6,138
MC Goodwill	66,873		—		—		534		67,407
AEC Goodwill	113,308		—		—		197		113,505
Total Indefinite-lived assets:	$	186,251	$	—	$	—	$	799	$	187,050

In the second quarter of 2024, management performed the quantitative assessment approach in conducting its annual evaluation of goodwill and indefinite-lived trademark intangibles and concluded that no impairment provision was required. Our goodwill has been allocated to and is tested for impairment at a level referred to as the reporting unit, which management determined to be the business segment level. As part of the quantitative assessment, management used the income and market approach to determine fair value by considering projected cash flows and market multiples for the Machine Clothing reporting unit and the AEC reporting unit. Management performed the quantitative assessments and concluded that each reporting unit’s fair value continued to significantly exceed its carrying value. In addition, there were no amounts at risk due to the estimated spread between the fair and carrying values. Accordingly, no impairment charges were recorded.

In the third quarter, the Company revised its estimates and assumptions used in certain program estimates at completion of its AEC reporting unit. As a result, on October 3, 2024, the Company reported a preliminary update to its full year outlook to reflect revised revenue and profitability expectations for the AEC segment. As a result of the change in estimates of certain program revenues and profits, we performed a qualitative assessment of the AEC reporting unit’s goodwill for impairment and concluded that goodwill was not impaired. The excess of the fair value of the AEC reporting unit over its carrying value reduced approximately 26% from previous quarters; and fair value continues to exceed the carrying value by more than 20%.