Goodwill and Other Intangibles

9 Months Ended

May 31, 2023

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, 2022	$	63,272	$	21,215	$	10,673	$	95,160
Acquisition of NuCera Solutions		81,349		—		—		81,349
Foreign currency translation adjustment		1,216		—		11		1,227
Balance at May 31, 2023	$	145,837	$	21,215	$	10,684	$	177,736

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 or more frequently if impairment indicators occur. 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. When testing, fair values of the reporting units are established using discounted cash flows.

The Company has adopted Accounting Standards Update (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, 2023 and August 31, 2022:

	Weighted Average		Gross Carrying		Accumulated		Net Carrying
	Amortization Period		Value		Amortization		Value
May 31, 2023
Patents and agreements	14.6	years	$	1,760	$	1,731	$	29
Formulas and technology	7.9	years		24,223		11,428		12,795
Trade names	6.3	years		14,830		9,207		5,623
Customer lists and relationships	11.0	years		243,847		98,340		145,507
			$	284,660	$	120,706	$	163,954
August 31, 2022
Patents and agreements	14.6	years	$	1,760	$	1,724	$	36
Formulas and technology	7.8	years		10,730		9,961		769
Trade names	5.9	years		8,673		8,407		266
Customer lists and relationships	9.1	years		113,735		81,145		32,590
			$	134,898	$	101,237	$	33,661

Aggregate amortization expense related to intangible assets for the nine months ended May 31, 2023 and 2022 was $18,721 and $9,092, respectively. Estimated amortization expense for the remainder of fiscal year 2023 and for the next five years is as follows:

Years ending August 31,
2023 (remaining 3 months)	4,937
2024	19,649
2025	18,049
2026	17,252
2027	14,704
2028	14,086