Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2025

Note 5. Goodwill and Intangible Assets

Goodwill

In the third quarter of fiscal 2021, we completed the AffloVest Acquisition. The purchase price of the AffloVest product line exceeded the net acquisition-date estimated fair value amounts of the identifiable assets acquired and the liabilities assumed by $31.1 million, which was assigned to goodwill.

Intangible Assets

Our patents and other intangible assets are summarized as follows:


	Weighted-	At June 30, 2025
	Average	Gross
	Amortization	Carrying		Accumulated		Net
(In thousands)	Period	Amount		Amortization		Amount
Definite-lived intangible assets:
Patents	11 years	$	1,065	$	315	$	750
Defensive intangible assets	—		1,125		1,125		—
Customer accounts	—		125		125		—
Customer relationships	9 years		31,000		9,088		21,912
Developed technology	7 years		13,000		4,504		8,496
Subtotal			46,315		15,157		31,158
Unamortized intangible assets:
Tradenames			9,500		—		9,500
Patents pending			246		—		246
Total intangible assets		$	56,061	$	15,157	$	40,904


	Weighted-	At December 31, 2024
	Average	Gross
	Amortization	Carrying		Accumulated		Net
(In thousands)	Period	Amount		Amortization		Amount
Definite-lived intangible assets:
Patents	12 years	$	1,148	$	333	$	815
Defensive intangible assets	< 1 year		1,125		1,065		60
Customer accounts	—		125		125		—
Customer relationships	10 years		31,000		7,896		23,104
Developed technology	8 years		13,000		3,913		9,087
Subtotal			46,398		13,332		33,066
Unamortized intangible assets:
Tradenames			9,500		—		9,500
Patents pending			223		—		223
Total intangible assets		$	56,121	$	13,332	$	42,789

Amortization expense was $0.9 million and $1.0 million for the three months ended June 30, 2025 and 2024, respectively, and $1.9 million for each of the six months ended June 30, 2025 and 2024, of which $0.3 million in each of the three months ended June 30, 2025 and 2024, and $0.6 million in each of the six months ended June 30, 2025 and 2024, was recorded in cost of sales revenue. Future amortization expenses are expected as follows:


(In thousands)
2025 (July 1 - December 31)	$	1,825
2026		3,646
2027		3,638
2028		3,637
2029		3,632
Thereafter		14,780
Total	$	31,158

In the third quarter of 2024, we performed our annual goodwill impairment test utilizing both the qualitative and quantitative approach described in FASB ASU No. 2021-03, “Intangibles—Goodwill and Other (Topic 350) – Accounting Alternative for Evaluating Triggering Events.” Based on the testing using the qualitative approach, it was determined that it was not more likely than not that the fair value of the reporting unit was less than the carrying value. As a result, it was not deemed necessary to proceed to the quantitative test and no impairment was recognized.