GOODWILL & INTANGIBLE ASSETS
|3 Months Ended|
Mar. 31, 2023
|GOODWILL & INTANGIBLE ASSETS|
|GOODWILL & INTANGIBLE ASSETS||
11. GOODWILL & INTANGIBLE ASSETS
The carrying amount of goodwill at March 31, 2023 and December 31, 2022 was $113.6 million and $113.0 million respectively, and has been recorded in connection with the Company’s acquisitions. The goodwill activity is as follows (in thousands):
No impairment of goodwill has been recorded for the three months ended March 31, 2023 and 2022.
The measurement period adjustments of $0.6 million during 2022, represent the final measurement period adjustments related to the acquisition of May Dental Lab, Inc. in October 2021 and the acquisition of the ExOne Company in November 2021.
Due to sustained declines in the Company’s stock price and the stock prices of comparable companies, we performed interim quantitative assessments as of June 30, 2022 and December 31, 2022, utilizing a combination of the income and market approaches. The results of the quantitative analysis performed indicated that the carrying value of the reporting unit exceeded the fair value. As such, $498.8 million of goodwill impairment charges was recorded during the year ended December 31, 2022.
The Company estimated the fair value using a weighted average of the income and market approaches. Specifically, the discounted cash flow method was used under the income approach and the guideline public company and guideline merged and acquired company methods were used under the market approach. The significant assumptions used under the income approach include management’s forecasts of future revenues and EBITDA margins used to calculate projected future cash flows, discount rates, and the terminal growth rate. The terminal value is based on an exit revenue multiple which requires significant assumptions regarding the selections of appropriate multiples that consider relevant market trading data. The Company bases its estimates and assumptions on its knowledge of the additive manufacturing industry, recent performance, expectations of future performance and other assumptions the Company believes to be reasonable. The significant assumptions used under the market approach include the control premium and selection of comparable companies and comparable transactions. Comparable companies and transactions are chosen based on factors including industry classification, geographic region, product offerings, earnings growth, and profitability.
Intangible assets consisted of the following (in thousands):
During the three months ended March 31, 2023 and 2022, the Company recognized the following amortization expense (in thousands):
The Company expects to recognize the following amortization expense (in thousands):
The entire disclosure for goodwill and intangible assets.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef