Dorman Products, Inc.DORM
Dorman Products, Inc. Goodwill & Intangibles Disclosure
Goodwill and Intangible Assets
Goodwill
Goodwill included the following:
| (in thousands) | Light Duty | Heavy Duty | Specialty Vehicle | Consolidated | |||||||||||||||||||
| Balance at December 31, 2023 | $ | 313,704 | $ | 57,876 | $ | 72,309 | $ | 443,889 | |||||||||||||||
| Goodwill acquired | — | — | 1,167 | 1,167 | |||||||||||||||||||
| Foreign currency translation | — | (2,170) | — | (2,170) | |||||||||||||||||||
| Balance at December 31, 2024 | 313,704 | 55,706 | 73,476 | 442,886 | |||||||||||||||||||
| Measurement period adjustment | — | — | 154 | 154 | |||||||||||||||||||
| Foreign currency translation | — | 1,000 | — | 1,000 | |||||||||||||||||||
| Goodwill impairment charge | — | (56,706) | — | (56,706) | |||||||||||||||||||
Balance at December 31, 2025(1) | $ | 313,704 | $ | — | $ | 73,630 | $ | 387,334 | |||||||||||||||
(1) Accumulated impairment losses were $56.7 million as of December 31, 2025, all within the Heavy-Duty segment.
As discussed in Note 1, "Summary of Significant Accounting Policies", to the Consolidated Financial Statements, we perform our annual goodwill impairment analysis in the fourth quarter of each year.
We determined fair values for each of the reporting units using a combination of the income approach and market approach.
Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted using a risk-adjusted rate. We use our internal forecasts to estimate future cash flows and
include an estimate of long-term future growth rates based on our expectation for the long-term outlook for each business. Actual future results may differ materially from those assumed in our forecasts. We derive our discount rates using a capital asset pricing model and analyze published rates for industries relevant to our reporting units to estimate the cost of equity financing. We use discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses and in our internally developed forecasts. Discount rates used in our annual reporting unit valuations for the year ended December 31, 2025, ranged from 11.5% to 14.5%.
Under the market approach, metrics of publicly traded companies of comparable businesses are utilized. The selection of comparable businesses is based on the markets in which the reporting units operate, giving consideration to their risk profiles, size, geography, and diversity of products and services.
Based on the results of our annual impairment test, the fair values of each of our reporting units exceeded their carrying values except for the Heavy Duty reporting unit. Our forecasted future cash flows in the Heavy Duty reporting unit have continued to deteriorate, driven by the continued market pressures that have persisted across the heavy-duty trucking industry domestically. These challenges resulted in downward revisions to our projected earnings and cash flow forecasts within our Heavy Duty business. As a result, we recorded an impairment charge of $56.7 million, representing the balance of goodwill in our Heavy Duty reporting unit as of the measurement date.
Intangible Assets
Intangible assets, subject to amortization, included the following:
| December 31, | ||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||
| Intangible assets subject to amortization | Weighted Average Amortization Period (years) | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Customer relationships | 14.6 | $ | 173,984 | $ | (51,741) | $ | 122,243 | $ | 173,430 | $ | (41,358) | $ | 132,072 | |||||||||||||||||||||||||||||||
| Trade names | 13.2 | 67,690 | (19,119) | 48,571 | 67,690 | (14,999) | 52,691 | |||||||||||||||||||||||||||||||||||||
| Product Portfolio | 12.7 | 107,800 | (23,215) | 84,585 | 107,800 | (16,522) | 91,278 | |||||||||||||||||||||||||||||||||||||
| Technology | 3.0 | 2,167 | (1,567) | 600 | 2,167 | (1,318) | 849 | |||||||||||||||||||||||||||||||||||||
| Patents and Other | 8.8 | 2,475 | (1,395) | 1,080 | 2,350 | (1,027) | 1,323 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 354,116 | $ | (97,037) | $ | 257,079 | $ | 353,437 | $ | (75,224) | $ | 278,213 | ||||||||||||||||||||||||||||||||
Amortization expense associated with intangible assets was $21.7 million, $22.8 million, and $22.1 million in the years ended December 31, 2025, 2024, and 2023, respectively. The estimated future amortization expense for intangible assets as of December 31, 2025, is summarized as follows:
| (in thousands) | |||||
| 2026 | $ | 20,616 | |||
| 2027 | 20,087 | ||||
| 2028 | 19,862 | ||||
| 2029 | 19,775 | ||||
| 2030 | 19,341 | ||||
| Thereafter | 157,398 | ||||
| Total | $ | 257,079 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 22, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
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.