Goodwill and Other Intangibles

9 Months Ended

May 31, 2022

Goodwill and Other Intangibles

Goodwill and Other Intangibles

Note 7 — Goodwill and Other Intangibles

The changes in the carrying value of goodwill were as follows:

	Adhesives, Sealants and Additives		Industrial Tapes		Corrosion Protection and Waterproofing		Consolidated
Balance at August 31, 2021	$	65,945	$	21,215	$	10,706	$	97,866
Foreign currency translation adjustment		(1,527)		—		(18)		(1,545)
Balance at May 31, 2022	$	64,418	$	21,215	$	10,688	$	96,321

The Company’s goodwill is allocated to each reporting unit based on the nature of the products manufactured by the respective business combinations that originally created the goodwill. The Company has identified a total of three reporting units, corresponding to its three operating segments, that are used to evaluate the possible impairment of goodwill. Assessments of possible impairment of goodwill are made when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable through future operations. Additionally, testing for possible impairment of recorded goodwill and certain intangible asset balances is required annually. The amount and timing of any impairment charges based on these assessments require the estimation of future cash flows and the fair market value of the related assets based on management’s best estimates of certain key factors, including future selling prices and volumes; operating, raw material and energy costs; and various other projected operating and economic factors, including the anticipated future impact of the coronavirus disease 2019 (COVID-19) pandemic. When testing, fair values of the reporting units are established using discounted cash flows. The Company evaluates the possible impairment of goodwill annually during the fourth quarter, and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable.

The Company has adopted ASU No. 2017-04 “Intangibles - Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment.” The Company assesses goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment loss, limited to the amount of goodwill allocated to that reporting unit, is recorded.

Intangible assets subject to amortization consisted of the following as of May 31, 2022 and August 31, 2021:

	Weighted Average		Gross Carrying		Accumulated		Net Carrying
	Amortization Period		Value		Amortization		Value
May 31, 2022
Patents and agreements	14.6	years	$	1,760	$	1,722	$	38
Formulas and technology	7.8	years		10,844		9,989		855
Trade names	5.9	years		8,747		8,435		312
Customer lists and relationships	9.1	years		115,102		79,360		35,742
			$	136,453	$	99,506	$	36,947
August 31, 2021
Patents and agreements	14.6	years	$	1,760	$	1,715	$	45
Formulas and technology	7.9	years		10,987		9,769		1,218
Trade names	5.9	years		8,836		8,285		551
Customer lists and relationships	9.2	years		116,855		71,715		45,140
			$	138,438	$	91,484	$	46,954

Aggregate amortization expense related to intangible assets for the nine months ended May 31, 2022 and 2021 was $9,092 and $9,566 respectively. Estimated amortization expense for the remainder of fiscal year 2022 and for the next five years is as follows:

Years ending August 31,
2022 (remaining 3 months)	$	2,669
2023		8,612
2024		7,405
2025		5,805
2026		5,007
2027		2,460