Loar Holdings Inc. Goodwill & Intangibles Disclosure
15. Goodwill and Intangible Assets
The change in goodwill was as follows (in thousands):
Balance as of January 1, 2023 |
|
$ |
441,992 |
|
Acquisition of DAC |
|
|
17,529 |
|
Acquisition of CAV |
|
|
12,124 |
|
Foreign exchange translation adjustment |
|
|
(757 |
) |
Balance as of December 31, 2023 |
|
|
470,888 |
|
Adjustment of the final purchase price allocation related to DAC |
|
|
(289 |
) |
Adjustment of the final purchase price allocation related to CAV |
|
|
685 |
|
Acquisition of AAI |
|
|
219,753 |
|
Foreign exchange translation adjustment |
|
|
2,500 |
|
Balance as of December 31, 2024 |
|
|
693,537 |
|
Adjustment of the final purchase price allocation related to AAI |
|
|
(452 |
) |
Acquisition of Beadlight |
|
|
17,797 |
|
Acquisition of LMB |
|
|
304,171 |
|
Foreign exchange translation adjustment |
|
|
(6,676 |
) |
Balance as of December 31, 2025 |
|
$ |
1,008,377 |
|
The Company performs an annual impairment test of goodwill on the first day of the fourth quarter of each year. Based on the results of its impairment test, Loar determined that no impairment of goodwill existed at December 31, 2025, 2024, or 2023.
Intangible assets subject to amortization consisted of the following (dollars in thousands):
|
|
As of December 31, 2025 |
|
As of December 31, 2024 |
||||||||||||||||||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Estimated |
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Estimated |
||||||
Customer relationships |
|
$ |
613,780 |
|
|
$ |
(156,806 |
) |
|
$ |
456,974 |
|
|
13 years |
|
$ |
461,224 |
|
|
$ |
(126,369 |
) |
|
$ |
334,855 |
|
|
13 years |
Tradename |
|
|
85,919 |
|
|
|
(18,761 |
) |
|
|
67,158 |
|
|
13 years |
|
|
61,680 |
|
|
|
(14,533 |
) |
|
|
47,147 |
|
|
13 years |
Technology |
|
|
99,419 |
|
|
|
(17,225 |
) |
|
|
82,194 |
|
|
13 years |
|
|
65,337 |
|
|
|
(12,758 |
) |
|
|
52,579 |
|
|
13 years |
Favorable lease |
|
|
116 |
|
|
|
(36 |
) |
|
|
80 |
|
|
8 years |
|
|
104 |
|
|
|
(23 |
) |
|
|
81 |
|
|
9 years |
Total intangible assets |
|
$ |
799,234 |
|
|
$ |
(192,828 |
) |
|
$ |
606,406 |
|
|
|
|
$ |
588,345 |
|
|
$ |
(153,683 |
) |
|
$ |
434,662 |
|
|
|
As disclosed in Note 2, Acquisitions, of the Consolidated Financial Statements, the purchase price of acquired entities is allocated based on the estimated fair value of the tangible and intangible assets acquired, and is subject to adjustment upon finalizing the measure of the fair values, which includes obtaining third-party appraisals of certain assets acquired and liabilities assumed for the LMB acquisition. Material adjustments may occur. The fair value of the tangible and intangible assets acquired will be finalized within the measurement period (not to exceed one year). Intangible assets acquired during the year ended December 31, 2025 are summarized as follows (dollars in thousands):
|
|
Gross Amount |
|
|
Amortization Period |
|
Intangible assets not subject to amortization |
|
|
|
|
|
|
Goodwill |
|
$ |
321,968 |
|
|
|
|
|
|
321,968 |
|
|
|
Intangible assets subject to amortization |
|
|
|
|
|
|
Customer relationships |
|
|
149,491 |
|
|
17 years |
Tradename |
|
|
23,561 |
|
|
14 years |
Technology |
|
|
33,339 |
|
|
15 years |
|
|
|
206,391 |
|
|
|
Total |
|
$ |
528,359 |
|
|
|
The aggregate amortization expense was $38.5 million for the year ended December 31, 2025, of which $4.3 million was charged to cost of sales and $34.2 million was charged to selling, general and administrative expenses. The aggregate amortization expense was $31.5 million for the year ended December 31, 2024, of which $3.2 million was charged to cost of sales and $28.3 million was charged to selling, general and administrative expenses. The aggregate amortization expense was $28.1 million for the year ended December 31, 2023, of which $3.2 million was charged to cost of sales and $24.9 million was charged to selling, general and administrative expenses.
The estimated amortization expense of intangible assets, assuming no increase or decrease in the gross carrying amounts, in each of the five succeeding years is as follows (in thousands):
2026 |
|
$ |
50,667 |
|
2027 |
|
|
50,636 |
|
2028 |
|
|
50,568 |
|
2029 |
|
|
50,568 |
|
2030 |
|
|
47,969 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
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.