METHODE ELECTRONICS INC Goodwill & Intangibles Disclosure
Note 7. Goodwill and Other Intangible Assets
Goodwill
A summary of the changes in goodwill by reportable segment is as follows:
(in millions) |
|
Automotive |
|
|
Industrial |
|
|
Total |
|
|||
Balance as of April 29, 2023 |
|
$ |
106.2 |
|
|
$ |
195.7 |
|
|
$ |
301.9 |
|
Acquisition |
|
|
— |
|
|
|
(24.3 |
) |
|
|
(24.3 |
) |
Impairment |
|
|
(105.9 |
) |
|
|
— |
|
|
|
(105.9 |
) |
Foreign currency translation |
|
|
(0.3 |
) |
|
|
(1.5 |
) |
|
|
(1.8 |
) |
Gross balance |
|
|
105.9 |
|
|
|
169.9 |
|
|
|
275.8 |
|
Accumulated impairment |
|
|
(105.9 |
) |
|
|
— |
|
|
|
(105.9 |
) |
Balance as of April 27, 2024 |
|
|
— |
|
|
|
169.9 |
|
|
|
169.9 |
|
Foreign currency translation |
|
|
— |
|
|
|
2.8 |
|
|
|
2.8 |
|
Gross balance |
|
|
105.9 |
|
|
|
172.7 |
|
|
|
278.6 |
|
Accumulated impairment |
|
|
(105.9 |
) |
|
|
— |
|
|
|
(105.9 |
) |
Balance as of May 3, 2025 |
|
|
— |
|
|
|
172.7 |
|
|
|
172.7 |
|
Foreign currency translation |
|
|
— |
|
|
|
2.2 |
|
|
|
2.2 |
|
Gross balance |
|
|
105.9 |
|
|
|
174.9 |
|
|
|
280.8 |
|
Accumulated impairment |
|
|
(105.9 |
) |
|
|
— |
|
|
|
(105.9 |
) |
Balance as of May 2, 2026 |
|
$ |
— |
|
|
$ |
174.9 |
|
|
$ |
174.9 |
|
A summary of goodwill by reporting unit is as follows:
(in millions) |
|
May 2, 2026 |
|
|
May 3, 2025 |
|
||
Grakon Industrial |
|
$ |
125.1 |
|
|
$ |
124.7 |
|
Nordic Lights |
|
|
48.2 |
|
|
|
46.4 |
|
Other |
|
|
1.6 |
|
|
|
1.6 |
|
Total |
|
$ |
174.9 |
|
|
$ |
172.7 |
|
Fiscal 2026 Impairment Assessment
At the beginning of the fourth quarter of fiscal 2026, the annual goodwill impairment assessment was completed. Based upon the results of the analyses, the estimated fair value of all reporting units with goodwill exceeded their carrying values. Refer to Note 8, “Derivative Financial Instruments and Fair Value” for further discussion of the valuation methodologies and related inputs, which are Company-specific, as observable inputs are not available (level 3).
Fiscal 2025 Impairment Assessment
At the beginning of the fourth quarter of fiscal 2025, the annual goodwill impairment assessment was completed. Based upon the results of the quantitative impairment test, the Company determined that the fair value exceeded its carrying value for both Grakon Industrial and Nordic Lights. However, the fair value of the Nordic Lights reporting unit exceeded its carrying value by less than 10%. For the Nordic Lights reporting unit, if all other assumptions are held constant, a hypothetical increase of more than 100 basis points in the discount rate could have resulted in a partial goodwill impairment.
Fiscal 2024 Impairment Assessment
October 28, 2023 interim goodwill impairment assessment
During the three months ended October 28, 2023, the Company identified an impairment triggering event associated with a sustained decrease in the Company’s publicly quoted share price, market capitalization, and lower than expected operating results. These factors suggested that the fair value of one or more of the Company’s reporting units may have fallen below their carrying amounts, and accordingly the Company performed a quantitative assessment. The reporting units that were quantitatively assessed were North American Automotive (“NAA”) and European Automotive (“EA”).
Based upon the results of the quantitative impairment test, the Company determined the carrying value of the NAA and EA reporting units each exceeded their fair value at October 28, 2023. As a result, the Company recognized a non-cash goodwill impairment charge of $56.5 million ($50.4 million for NAA and $6.1 million for EA) in the three months ended October 28, 2023, which was determined as the excess carrying value over fair value of the respective reporting unit up to the carrying value of the goodwill immediately prior to the impairment.
April 27, 2024 goodwill impairment assessment
In March and April 2024, subsequent to the annual goodwill impairment assessment, there was a further decline in the Company’s publicly quoted share price and market capitalization. In addition, operating results for NAA were lower than expected and future cash flow projections were lowered. As a result, the Company determined that a triggering event occurred requiring another quantitative impairment test for NAA as of April 27, 2024. Based upon the results of the quantitative impairment test, the Company determined the carrying value of the NAA reporting unit exceeded its fair value at April 27, 2024. As a result, the Company recognized a non-cash goodwill impairment charge of $49.4 million in the three months ended April 27, 2024, which was determined as the excess carrying value over fair value of the NAA reporting unit up to the carrying value of the goodwill immediately prior to the impairment. As of April 27, 2024, the NAA reporting unit had no remaining goodwill.
Other intangible assets, net
Details of identifiable intangible assets are shown below:
|
|
May 2, 2026 |
|
|||||||||||||
(in millions) |
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Weighted average remaining useful life (years) |
|
||||
Amortized intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Customer relationships and agreements |
|
$ |
315.6 |
|
|
$ |
(120.2 |
) |
|
$ |
195.4 |
|
|
|
13.2 |
|
Trade names, patents and technology licenses |
|
|
77.4 |
|
|
|
(55.7 |
) |
|
|
21.7 |
|
|
|
5.9 |
|
Total amortized intangible assets |
|
|
393.0 |
|
|
|
(175.9 |
) |
|
|
217.1 |
|
|
|
|
|
Unamortized trade name |
|
|
1.8 |
|
|
|
— |
|
|
|
1.8 |
|
|
|
|
|
Total other intangible assets |
|
$ |
394.8 |
|
|
$ |
(175.9 |
) |
|
$ |
218.9 |
|
|
|
|
|
|
|
May 3, 2025 |
|
|||||||||||||
(in millions) |
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Weighted average remaining useful life (years) |
|
||||
Amortized intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Customer relationships and agreements |
|
$ |
311.8 |
|
|
$ |
(102.3 |
) |
|
$ |
209.5 |
|
|
|
14.0 |
|
Trade names, patents and technology licenses |
|
|
76.5 |
|
|
|
(49.4 |
) |
|
|
27.1 |
|
|
|
6.4 |
|
Total amortized intangible assets |
|
|
388.3 |
|
|
|
(151.7 |
) |
|
|
236.6 |
|
|
|
|
|
Unamortized trade name |
|
|
1.8 |
|
|
|
— |
|
|
|
1.8 |
|
|
|
|
|
Total other intangible assets |
|
$ |
390.1 |
|
|
$ |
(151.7 |
) |
|
$ |
238.4 |
|
|
|
|
|
For the annual impairment test performed in the fourth quarter of 2026, the estimated fair value of the indefinite-lived trade name intangible asset exceeded its carrying value.
Based on the current amount of intangible assets subject to amortization, the estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter is as follows:
(in millions) |
|
|
|
|
Fiscal Year: |
|
|
|
|
2027 |
|
$ |
22.4 |
|
2028 |
|
|
20.2 |
|
2029 |
|
|
19.0 |
|
2030 |
|
|
17.9 |
|
2031 |
|
|
17.5 |
|
Thereafter |
|
|
120.1 |
|
Total |
|
$ |
217.1 |
|
Want the next METHODE ELECTRONICS INC goodwill & intangibles disclosure the moment it drops?
Set a Sentinel and we'll alert you the moment METHODE ELECTRONICS INC's next filing hits EDGAR. No credit card, your email never gets sold.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Jun 24, 2026 | Showing above |
| 2025 | Jul 9, 2025 | |
| 2024 | Jul 11, 2024 | |
| 2023 | Jun 27, 2023 | |
| 2022 | Jun 23, 2022 | |
| 2021 | Jun 24, 2021 | |
| 2020 | Jun 30, 2020 | |
| 2019 | Jun 20, 2019 | |
| 2018 | Jun 21, 2018 | |
| 2017 | Jun 22, 2017 | |
| 2016 | Jun 23, 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.