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Goodwill and Other Intangible Assets
 12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets
15. Goodwill and Other Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. Goodwill and intangible assets with indefinite useful lives are not amortized, however, these assets are tested for impairment at least annually at the reporting unit level, using either a qualitative or quantitative approach. Impairment is the condition that exists when the carrying amount of a reporting unit, including goodwill, exceeds its fair value.
In the second quarter of 2024, management applied the quantitative assessment approach in performing its annual evaluation of goodwill and indefinite-lived trademark intangibles for the Company's Machine Clothing reporting unit and Engineered Composites reporting unit. 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 each reporting unit. Management performed the quantitative assessments and concluded that each reporting unit’s fair value continued to significantly exceed its carrying value. Accordingly, no impairment charges were recorded.
In the third and fourth quarters of 2024, the Company revised its estimates and assumptions used in certain program estimates at completion of its AEC reporting unit. As a result of the changes in estimates, 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 by approximately 20% from previous quarters; and fair value continues to exceed the carrying value by more than 25%.
In the fourth quarter of 2024, the Company wrote-off the remaining Finite-lived intangible assets balance at our Rochdale, UK location due to restructuring actions being taken to cease operations at the manufacturing facility. This decision resulted in a non-cash write-off of intangibles for $0.3 million, which is presented as other changes in the table below for intangible assets and goodwill in 2024.
On August 31, 2023, the Company acquired all the outstanding shares of Heimbach. The preliminary fair values of the identifiable intangible assets obtained totaled $14.9 million and consisted of the Heimbach trade name and developed technology. The fair value of the trade name was $6.0 million and is considered an indefinite-lived asset because of
Heimbach's rich brand heritage and customer service to the paper machine clothing industry. The fair value of the developed technology was $8.9 million and includes intellectual property-related technologies as well as know-how developed by Heimbach; and is being amortized over its economic period of benefit, which is 9 years. See Note 24, Business Combination, of the Notes to the Consolidated Financial Statements of our 2023 Annual Report on Form 10-K, for additional information.
We amortize certain patents, trademarks and names, customer contracts, relationships and technology assets that have finite-lives. The changes in intangible assets and goodwill from December 31, 2022 to December 31, 2024, were as follows:
(in thousands, except for years)
Amortization life in years
Balance at December 31, 2023
Other Changes
Amortization
Currency Translation
Balance at December 31, 2024
Finite-lived intangible assets:
AEC Trademarks and trade names
6-15
$22 $— $(11)$— $11 
AEC Technology
10-15
3,426 — (569)(177)2,680 
AEC Intellectual property
15
911 — (83)— 828 
AEC Customer relationships
8-15
25,485 — (3,480)(113)21,892 
Heimbach Developed technology
9
8,732 (289)(953)(486)7,004 
Total Finite-Lived intangible assets, net$38,576 $(289)$(5,096)$(776)$32,415 
Indefinite-lived intangible assets:
Heimbach Trade name
$6,070 $— $— $(358)$5,712 
MC Goodwill
66,873 — — (2,885)63,988 
AEC Goodwill
113,308 — — (1,035)112,273 
Total Indefinite-lived intangible assets
$186,251 $— $— $(4,278)$181,973 
(in thousands, except for years)
Amortization life in yearsBalance at December 31,
2022
Acquisition
AmortizationCurrency
Translation		Balance at December 31,
2023
Finite-lived intangible assets:
AEC Trademarks and trade names
6-15
$34 $— $(12)$— $22 
AEC Technology
10-15
3,884 — (567)109 3,426 
AEC Intellectual property
15
994 — (83)— 911 
AEC Customer relationships
8-15
28,899 — (3,480)66 25,485 
Heimbach Developed technology
9
— 8,918 (310)124 8,732 
Total Finite-Lived intangible assets, net$33,811 $8,918 $(4,452)$299 $38,576 
Indefinite-lived intangible assets:
Heimbach Trade name
$— $5,982 $— $88 $6,070 
MC Goodwill
65,441 — — 1,432 66,873 
AEC Goodwill
112,776 — — 532 113,308 
Total Indefinite-lived intangible assets
$178,217 $5,982 $— $2,052 $186,251 
As of December 31, 2024, the gross carrying amount and accumulated amortization of Finite-lived intangible assets was $86.1 million and $53.7 million, respectively.
Amortization expense related to Finite-lived intangible assets was reported in the Consolidated Statement of Income as follows: $1.1 million in Cost of goods sold and $4.2 million in Selling, general and administrative expenses in 2024; $0.4 million in Cost of goods sold and $4.1 million in Selling, general and administrative expenses in 2023; and $0.8 million in Cost of goods sold and $4.0 million in Selling, general and administrative expenses in 2022.
Estimated amortization expense of intangibles for the years ending December 31, 2025 through 2029, is as follows:
Year
Annual amortization
(in thousands)
2025$5,000 
20265,000 
20275,000 
20284,900 
20294,900