ESCALADE INC Goodwill & Intangibles Disclosure
Note 5 — Acquired Intangible Assets and Goodwill
The carrying basis and accumulated amortization of recognized intangible assets, excluding intangible assets which have been fully amortized, are summarized in the following table:
|
2025 |
2024 |
|||||||||||||||
|
In Thousands |
Gross Carrying Amount |
Accumulated Amortization |
Gross Carrying Amount |
Accumulated Amortization |
||||||||||||
|
Patents |
24,715 | 24,608 | 24,715 | 24,533 | ||||||||||||
|
Customer list |
22,017 | 14,776 | 22,017 | 13,122 | ||||||||||||
|
Trade names |
20,535 | 2,438 | 18,636 | 1,875 | ||||||||||||
| 67,267 | 41,822 | 65,368 | 39,530 | |||||||||||||
Amortization expense was $2.3 million and $2.8 million for 2025 and 2024, respectively. At December 31, 2025, the net carrying amount of trade names includes $7.8 million related to indefinite-lived intangible assets which are not amortized but are evaluated for impairment at least annually.
Estimated future amortization expense is summarized in the following table:
|
All Amounts in Thousands |
||||
|
2026 |
$ | 2,313 | ||
|
2027 |
2,227 | |||
|
2028 |
1,576 | |||
|
2029 |
1,469 | |||
|
2030 |
1,284 | |||
|
Thereafter |
8,792 | |||
|
Subtotal |
17,661 | |||
|
Indefinite-lived intangible asset balance |
7,784 | |||
|
Total |
$ | 25,445 |
Consistent with our operating segment conclusion, we have concluded one reporting unit exists and all goodwill and indefinite lived intangibles are allocated to that reporting unit. There were no changes to the carrying amount of goodwill in 2025 or 2024.
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.