CTS CORP Goodwill & Intangibles Disclosure
NOTE 8 — Goodwill and Other Intangible Assets
Other Intangible Assets
Other intangible assets, net consisted of the following components:
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|
As of December 31, 2025 |
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|
|
|
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Gross |
|
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Accumulated |
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Net |
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Weighted |
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Other intangible assets: |
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|
|
|
|
|
|
|
|
|
|
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||||
Customer lists / relationships |
|
$ |
216,927 |
|
|
$ |
(86,526 |
) |
|
$ |
130,401 |
|
|
|
9.6 |
|
Technology and other intangibles |
|
|
62,167 |
|
|
|
(39,006 |
) |
|
|
23,161 |
|
|
|
6.9 |
|
Other intangible assets, net |
|
$ |
279,094 |
|
|
$ |
(125,532 |
) |
|
$ |
153,562 |
|
|
|
9.2 |
|
Amortization expense for the year ended December 31, 2025 |
|
|
|
|
$ |
16,160 |
|
|
|
|
|
|
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|||
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As of December 31, 2024 |
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Gross |
|
|
Accumulated |
|
|
Net |
|
|||
Other intangible assets: |
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|
|
|
|
|
|
|
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|||
Customer lists / relationships |
|
$ |
210,354 |
|
|
$ |
(72,500 |
) |
|
$ |
137,854 |
|
Technology and other intangibles |
|
|
61,244 |
|
|
|
(35,216 |
) |
|
$ |
26,028 |
|
Other intangible assets, net |
|
$ |
271,598 |
|
|
$ |
(107,716 |
) |
|
$ |
163,882 |
|
Amortization expense for the year ended December 31, 2024 |
|
|
|
|
$ |
13,348 |
|
|
|
|
||
Amortization expense for the year ended December 31, 2023 |
|
|
|
|
$ |
11,024 |
|
|
|
|
||
The changes in the gross carrying amounts of intangible assets were primarily due to foreign exchange impacts.
The estimated amortization expense for the next five years and thereafter is as follows:
|
|
Amortization |
|
|
2026 |
|
$ |
16,147 |
|
2027 |
|
|
16,087 |
|
2028 |
|
|
16,052 |
|
2029 |
|
|
14,884 |
|
2030 |
|
|
14,709 |
|
Thereafter |
|
|
75,683 |
|
Total future amortization expense |
|
$ |
153,562 |
|
Goodwill
Changes in the net carrying amount of goodwill were as follows:
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|
Total |
|
|
Goodwill as of December 31, 2023 |
|
$ |
157,638 |
|
Increase due to acquisitions |
|
|
46,600 |
|
Foreign exchange impact |
|
|
(2,934 |
) |
Goodwill as of December 31, 2024 |
|
$ |
201,304 |
|
Foreign exchange impact |
|
|
6,113 |
|
Increase due to prior period adjustment |
|
$ |
2,194 |
|
Goodwill as of December 31, 2025 |
|
|
209,611 |
|
Refer to Note 3, "Business Acquisitions," for further information on the increase in the net carrying amount of goodwill due to acquisitions. Refer to Note 1, "Summary of Significant Accounting Policies," for further information on the prior period adjustment to Goodwill.
We performed our annual impairment test as of October 1, 2025, our measurement date, and concluded that there was no impairment in any of our reporting units. The fair value estimates used in the goodwill impairment analysis required significant judgment. The Company's fair value estimates for the purposes of determining the goodwill impairment charge are considered Level 3 fair value measurements. The fair value estimates were based on assumptions management believes to be reasonable, but that are inherently uncertain, including estimates of future revenues and operating margins and assumptions about the overall economic climate and the competitive environment for the business.
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.