LAKELAND INDUSTRIES INC Goodwill & Intangibles Disclosure
5. GOODWILL AND INTANGIBLE ASSETS
Goodwill as of January 31, 2026 and 2025, and changes in goodwill during the fiscal years then ended, were as follows (in $000s):
|
|
U.S. |
|
|
Europe |
|
|
Other |
|
|
Total |
|
||||
Balance at January 31, 2024 |
|
$ |
871 |
|
|
$ |
9,049 |
|
|
$ |
3,749 |
|
|
$ |
13,669 |
|
Measurement period adjustment |
|
|
— |
|
|
|
— |
|
|
|
(691 |
) |
|
|
(691 |
) |
Acquisitions |
|
|
4,956 |
|
|
|
8,969 |
|
|
|
— |
|
|
|
13,925 |
|
Impairment |
|
|
— |
|
|
|
(7,512 |
) |
|
|
(3,026 |
) |
|
|
(10,538 |
) |
Currency translation |
|
|
— |
|
|
|
(93 |
) |
|
|
(32 |
) |
|
|
(125 |
) |
Balance at January 31, 2025 |
|
$ |
5,827 |
|
|
$ |
10,413 |
|
|
$ |
— |
|
|
$ |
16,240 |
|
Measurement period adjustment |
|
|
248 |
|
|
|
(2,340 |
) |
|
|
— |
|
|
|
(2,092 |
) |
Acquisitions |
|
|
2,425 |
|
|
|
— |
|
|
|
— |
|
|
|
2,425 |
|
Impairment |
|
|
— |
|
|
|
(2,604 |
) |
|
|
— |
|
|
|
(2,604 |
) |
Currency translation |
|
|
— |
|
|
|
1,318 |
|
|
|
— |
|
|
|
1,318 |
|
Balance at January 31, 2026 |
|
$ |
8,500 |
|
|
$ |
6,787 |
|
|
$ |
— |
|
|
$ |
15,287 |
|
As of November 1, 2025, the Company's annual goodwill impairment testing date, the Company performed a quantitative assessment to evaluate the goodwill of the LHD reporting unit using market value and discounted cash flow methodologies. The LHD reporting unit’s forecast was affected by variability in revenue, as its business is largely driven by the timing of tender-based sales, as well as higher operating costs. Based on the results of the quantitative assessment, the Company determined that the carrying value of the LHD reporting unit exceeded its fair value and recognized a goodwill impairment charge of $2.6 million representing approximately 45% of the goodwill associated with the LHD reporting unit within the Europe geographic segment. If we are unable to achieve our estimates of future cash flows or there are changes to our significant assumptions, we may recognize additional impairment charges and such charges could be material.
As of November 1, 2024, the Company performed valuations of the Pacific and Eagle reporting units using market value and discounted cash flow methodologies. Pacific’s forecast was impacted by planned investments to improve future profitability, but the profitability has not improved as much as expected. Eagle has variability in their revenue as they primarily sell through tenders which impacted their financial outlook. Given the results of the quantitative assessment, the Company determined that the goodwill of the Pacific reporting unit was impaired and the goodwill of the Eagle reporting unit was partially impaired. As a result, the Company recognized a goodwill impairment charge of $3.0 million representing the entire amount of goodwill related to the Pacific reporting unit in the Other Foreign geographic segment and recognized a goodwill impairment charge of $7.5 million representing 83% of goodwill related to the Eagle reporting unit in the Europe geographic segment. For the years ended January 31, 2026 and January 31, 2025, the Company incurred impairment expense of $2.6 million and $7.5 million, respectively.
Intangible assets as of January 31, 2026 and 2025, and changes in intangible assets during the fiscal years then ended, were as follows (in $000s):
|
|
2026 |
|
|
2025 |
|
||
Balance at beginning of year |
|
$ |
25,503 |
|
|
$ |
6,830 |
|
Acquisitions |
|
|
6,600 |
|
|
|
19,319 |
|
Measurement period adjustments |
|
|
— |
|
|
|
1,093 |
|
Amortization |
|
|
(2,200 |
) |
|
|
(997 |
) |
Currency translation |
|
|
1,821 |
|
|
|
(742 |
) |
Balance at end of year |
|
$ |
31,724 |
|
|
$ |
25,503 |
|
|
|
|
|
|
January 31, 2026 |
|
|
January 31, 2025 |
|
|||||||||||||||||||
Intangible Assets (in |
|
Weighted Average |
|
|
Gross Carrying |
|
|
Accumulated |
|
|
Net Carrying |
|
|
Gross Carrying |
|
|
Accumulated |
|
|
Net Carrying |
|
|||||||
Customer relationships |
|
|
20 |
|
|
$ |
26,983 |
|
|
$ |
(2,385 |
) |
|
$ |
24,598 |
|
|
$ |
20,543 |
|
|
$ |
(1,655 |
) |
|
$ |
18,888 |
|
Trade names and |
|
|
15 |
|
|
|
5,799 |
|
|
|
(905 |
) |
|
|
4,894 |
|
|
|
5,079 |
|
|
|
(568 |
) |
|
|
4,511 |
|
Technological know-how |
|
|
15 |
|
|
|
2,737 |
|
|
|
(505 |
) |
|
|
2,232 |
|
|
|
2,447 |
|
|
|
(343 |
) |
|
|
2,104 |
|
Total |
|
|
|
|
$ |
35,519 |
|
|
$ |
(3,795 |
) |
|
$ |
31,724 |
|
|
$ |
28,069 |
|
|
$ |
(2,566 |
) |
|
$ |
25,503 |
|
|
Amortization expense was $2.2 million and $1.0 million for the fiscal years ended January 31, 2026 and 2025, respectively. Intangible asset amortization expense over the next five years is expected to be approximately $2.5 million per year.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Apr 16, 2026 | Showing above |
| 2025 | Apr 17, 2025 | |
| 2024 | Apr 11, 2024 | |
| 2020 | Apr 15, 2020 | |
| 2019 | Apr 16, 2019 | |
| 2018 | Apr 16, 2018 | |
| 2017 | Apr 26, 2017 | |
| 2016 | Apr 21, 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.