Cadre Holdings, Inc. Goodwill & Intangibles Disclosure
| 8. | GOODWILL AND OTHER INTANGIBLE ASSETS |
Goodwill
The following table summarizes the changes in goodwill during the years ended December 31, 2024 and 2023 by reporting segment:
|
| Product |
| Distribution |
| Total | |||
Balance, December 31, 2022 |
| $ | 78,960 | $ | 2,616 | $ | 81,576 | ||
Measurement period adjustments | (393) | — | (393) | ||||||
Foreign currency translation adjustments |
| 484 | — | 484 | |||||
Balance, December 31, 2023 | $ | 79,051 | $ | 2,616 | $ | 81,667 | |||
ICOR acquisition | 18,980 | — | 18,980 | ||||||
Alpha Safety acquisition | 48,554 | — | 48,554 | ||||||
Measurement period adjustments | 201 | — | 201 | ||||||
Foreign currency translation adjustments | (1,245) | — | (1,245) | ||||||
Balance, December 31, 2024 | $ | 145,541 | $ | 2,616 | $ | 148,157 | |||
Impairment of Goodwill
No impairment losses were recorded during the years ended December 31, 2024, 2023 and 2022. Gross goodwill and accumulated impairment losses were $155,742 and $7,585, respectively, as of December 31, 2024 and $89,252 and $7,585, respectively, as of December 31, 2023.
Intangible Assets
Intangible assets such as certain customer relationships and patents on core technologies and product technologies are amortizable over their estimated useful lives. Certain trade names and trademarks which provide exclusive and perpetual rights to manufacture and sell their respective products are deemed indefinite-lived and are therefore not subject to amortization.
Intangible assets consisted of the following as of December 31, 2024 and 2023:
December 31, 2024 | |||||||||||
|
|
|
| Weighted | |||||||
Accumulated | Average | ||||||||||
Gross | Amortization | Net |
| Useful Life | |||||||
Definite lived intangibles: |
|
|
|
|
|
|
|
| |||
Customer relationships | $ | 105,060 |
| $ | (69,118) |
| $ | 35,942 |
| 17 | |
Technology |
| 64,600 |
|
| (15,819) |
|
| 48,781 |
| 13 | |
Tradenames |
| 12,596 |
|
| (6,941) |
|
| 5,655 |
| 9 | |
Non-compete agreements |
| 996 |
|
| (996) |
|
| — |
| - | |
$ | 183,252 |
| $ | (92,874) |
| $ | 90,378 | ||||
Indefinite lived intangibles: |
|
|
|
|
|
|
|
|
|
| |
Tradenames |
| 17,166 |
|
| — |
|
| 17,166 |
| Indefinite | |
Total | $ | 200,418 |
| $ | (92,874) |
| $ | 107,544 |
|
| |
December 31, 2023 | |||||||||||
|
|
|
| Weighted | |||||||
Accumulated | Average | ||||||||||
Gross | Amortization | Net |
| Useful Life | |||||||
Definite lived intangibles: |
|
|
|
|
|
|
|
| |||
Customer relationships | $ | 86,621 | $ | (65,650) |
| $ | 20,971 |
| 11 | ||
Technology |
| 16,111 |
|
| (11,979) |
|
| 4,132 |
| 8 | |
Tradenames |
| 6,622 |
|
| (5,492) |
|
| 1,130 |
| 4 | |
Non-compete agreements |
| 1,003 |
|
| (1,003) |
|
| — |
| - | |
$ | 110,357 |
| $ | (84,124) |
| $ | 26,233 | ||||
Indefinite lived intangibles: |
|
|
|
|
|
|
|
|
|
| |
Tradenames |
| 17,239 |
|
| — |
|
| 17,239 |
| Indefinite | |
Total | $ | 127,596 |
| $ | (84,124) |
| $ | 43,472 |
|
| |
The Company recorded amortization expense of $9,253, $7,794 and $8,800 for the years ended December 31, 2024, 2023 and 2022, respectively, of which $3,962, $465 and $439 was included in cost of goods sold in the consolidated statements of operations and comprehensive income for the respective years.
The estimated amortization expense for definite-lived intangible assets for the next five years and thereafter is as follows:
2025 |
| $ | 8,384 |
2026 |
| 8,096 | |
2027 |
| 7,929 | |
2028 |
| 7,929 | |
2029 |
| 7,835 | |
Thereafter |
| 50,205 | |
Total | $ | 90,378 |
| 9. |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.