HELIOS TECHNOLOGIES, INC. Goodwill & Intangibles Disclosure
8. GOODWILL AND INTANGIBLE ASSETS
Goodwill
A summary of changes in goodwill by segment for the years ended January 3, 2026 and December 28, 2024 is as follows:
|
|
Hydraulics |
|
|
Electronics |
|
|
Total |
|
|||
Balance at December 30, 2023 |
|
$ |
302.1 |
|
|
$ |
211.9 |
|
|
$ |
514.0 |
|
Currency translation |
|
|
(15.0 |
) |
|
|
(0.1 |
) |
|
|
(15.1 |
) |
Balance at December 28, 2024 |
|
$ |
287.1 |
|
|
$ |
211.8 |
|
|
$ |
498.9 |
|
Currency translation |
|
|
30.6 |
|
|
|
0.1 |
|
|
|
30.7 |
|
Goodwill written off related to sale of business |
|
|
(5.6 |
) |
|
|
— |
|
|
|
(5.6 |
) |
Goodwill Impairment losses |
|
|
— |
|
|
|
(25.9 |
) |
|
|
(25.9 |
) |
Balance at January 3, 2026 |
|
$ |
312.1 |
|
|
$ |
186.0 |
|
|
$ |
498.1 |
|
Accumulated Impairments (A) |
|
|
31.9 |
|
|
|
25.9 |
|
|
|
57.8 |
|
(A) In the third quarter of 2025 a $25.9 impairment was recorded in Electronics. There were no impairments recorded in 2024 or 2023.
The Company tests goodwill for impairment at the reporting unit level, (i) as of the third quarter period end date, and (ii) between annual tests whenever events or circumstances indicate the carrying value of a reporting unit may exceed its fair value.
In the second quarter of 2025, the Company announced a leadership change in the Electronics segment from Lee Wichlacz to Billy Aldridge. Under the new leadership in the third of 2025, the Company evaluated the strategy and financial projections related to i3 Product Development ("i3PD"), a custom engineering services firm we acquired in May of 2023 that is part of our Electronics segment. That evaluation led to a reduction in the i3PD projected profit contributions to the Company over the short and mid-term due to de-emphasizing i3PD sales that do not align with the Company's core business. We performed a test for goodwill impairment as of the third quarter period end date and concluded goodwill was impaired.
The fair value of the i3PD reporting unit was determined based on an income approach methodology. A market approach methodology was evaluated but not used as the Company determined information for companies comparable to i3PD was not readily available. The income approach utilized a discounted cash flow analysis, which estimates the present value of the projected free cash flows to be generated by the reporting unit. Principal assumptions used in the analysis included the Company's estimates of future revenue and terminal growth rates, margin assumptions and discount rates. While assumptions utilized are subject to a high degree of judgment and complexity, the Company made every effort to estimate future cash flows as accurately as possible, given the high degree of economic uncertainty that existed. The Company concluded that the estimated fair value of the i3PD reporting unit was less than its carrying value, and as a result, recorded a non-cash, non-tax-deductible goodwill impairment charge of $25.9. This represents the full amount of goodwill for the i3PD reporting unit.
The Company performed the annual test of goodwill impairment on its other reporting units and concluded that it was more likely than not that their fair value exceeded their carrying value.
Acquired Intangibles Assets
At January 3, 2026 and December 28, 2024, intangible assets consisted of the following:
|
|
January 3, 2026 |
|
|
December 28, 2024 |
|
||||||||||||||||||
|
|
Gross Carrying |
|
|
Accumulated |
|
|
Net Carrying |
|
|
Gross Carrying |
|
|
Accumulated |
|
|
Net Carrying |
|
||||||
Definite-lived intangibles: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trade names and brands |
|
$ |
95.8 |
|
|
$ |
(34.5 |
) |
|
$ |
61.3 |
|
|
$ |
94.1 |
|
|
$ |
(28.6 |
) |
|
$ |
65.5 |
|
Non-compete agreements |
|
|
2.1 |
|
|
|
(2.1 |
) |
|
|
— |
|
|
|
2.0 |
|
|
|
(1.6 |
) |
|
|
0.4 |
|
Technology |
|
|
54.7 |
|
|
|
(36.8 |
) |
|
|
17.9 |
|
|
|
53.4 |
|
|
|
(31.3 |
) |
|
|
22.1 |
|
Supply agreement |
|
|
21.0 |
|
|
|
(19.1 |
) |
|
|
1.9 |
|
|
|
21.0 |
|
|
|
(17.0 |
) |
|
|
4.0 |
|
Customer relationships |
|
|
400.3 |
|
|
|
(111.5 |
) |
|
|
288.8 |
|
|
|
380.1 |
|
|
|
(89.6 |
) |
|
|
290.5 |
|
Workforce |
|
|
6.1 |
|
|
|
(6.1 |
) |
|
|
(0.0 |
) |
|
|
6.2 |
|
|
|
(4.7 |
) |
|
|
1.5 |
|
|
|
$ |
580.0 |
|
|
$ |
(210.1 |
) |
|
$ |
369.9 |
|
|
$ |
556.8 |
|
|
$ |
(172.8 |
) |
|
$ |
384.0 |
|
Amortization expense on acquired intangibles assets for the 2025, 2024 and 2023 fiscal years was approximately $31.7, $31.5 and $32.9, respectively, reflected in amortization of intangible assets in the Consolidated Statements of Operations. Additionally, $0.3 of acquired amortization expense for the 2025 fiscal year was reflected in cost of sales in the Consolidated Statement of Operations. Future estimated total amortization expense is presented below.
Year: |
|
|
|
|
2026 |
|
$ |
30.5 |
|
2027 |
|
|
27.4 |
|
2028 |
|
|
27.1 |
|
2029 |
|
|
25.3 |
|
2030 |
|
|
24.5 |
|
Thereafter |
|
|
235.1 |
|
Total |
|
$ |
369.9 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 3, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 2, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Mar 1, 2016 | |
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.