Distribution Solutions Group, Inc.DSGR

Distribution Solutions Group, Inc. Goodwill & Intangibles Disclosure

10-KFiled Mar 5, 20262 min read
Note 6 – Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill by segment were as follows:
(in thousands)LawsonTestEquityGexpro ServicesCanada Branch DivisionTotal
Balance at December 31, 2023$155,915 $164,990 $55,743 $23,277 $399,925 
Acquisitions(1)
37,177 (110)1,372 28,942 67,381 
Impact of foreign exchange rates(494)— (773)(3,250)(4,517)
Balance at December 31, 2024192,598 164,880 56,342 48,969 462,789 
Acquisitions(1)
— — 168 849 1,017 
Impact of foreign exchange rates277 — 1,464 2,358 4,099 
Balance at December 31, 2025$192,875 $164,880 $57,974 $52,176 $467,905 
(1)    Refer to Note 3 – Business and Asset Acquisitions for information related to measurement period adjustments.

Intangible Assets

The gross carrying amount and accumulated amortization for definite-lived intangible assets were as follows:
December 31, 2025December 31, 2024
(in thousands)Gross Carrying AmountAccumulated AmortizationNet Carrying ValueGross Carrying AmountAccumulated AmortizationNet Carrying Value
Trade names$141,637 $(60,640)$80,997 $141,654 $(45,386)$96,268 
Customer relationships274,844 (131,341)143,503 272,051 (100,867)171,184 
Other (1)
7,894 (6,339)1,555 8,310 (5,999)2,311 
Total$424,375 $(198,320)$226,055 $422,015 $(152,252)$269,763 
(1)    Other primarily consists of non-compete agreements.

Amortization expense for definite-lived intangible assets is included in Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss) as follows:
Year Ended December 31,
(in thousands)202520242023
Amortization expense for intangible assets$46,485 $47,483 $40,263 

The remaining weighted-average useful lives of intangible assets as of December 31, 2025 was 3.2 years for trade names and 5.0 years for customer relationships.

The estimated aggregate amortization expense for each of the next five years and thereafter are as follows:
(in thousands)Amortization
2026$43,666 
202738,585 
202834,297 
202930,791 
203021,036 
Thereafter57,680 
Total$226,055 

Historical Timeline

Fiscal YearFiled
2025Mar 5, 2026Showing above
2024Mar 6, 2025
2023Mar 7, 2024
2022Mar 14, 2023
2021Feb 24, 2022
2020Feb 26, 2021
2019Feb 27, 2020
2018Mar 4, 2019
2017Feb 22, 2018
2016Feb 23, 2017

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.

Other Available Disclosures

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