MGP INGREDIENTS INCMGPI
MGP INGREDIENTS INC Goodwill & Intangibles Disclosure
GOODWILL AND OTHER INTANGIBLE ASSETS
Definite-Lived Intangible Assets. The Company acquired definite-lived intangible assets in connection with various acquisitions of businesses prior to 2025. The distributor relationships have a carrying value of $52,206, net of accumulated amortization of $12,894. The distributor relationships have a useful life of 20 years. The amortization expense for each of the years ended December 31, 2025 and 2024 was $3,255. The weighted average remaining amortization period at December 31, 2025 for definite-lived intangible assets is 16.1 years.
As of December 31, 2025, the expected future amortization expense related to definite-lived intangible assets are as follows:
| 2026 | $ | 3,255 | |||
| 2027 | 3,255 | ||||
| 2028 | 3,255 | ||||
| 2029 | 3,255 | ||||
| 2030 | 3,255 | ||||
| Thereafter | 35,931 | ||||
| Total | $ | 52,206 | |||
Goodwill. Changes in carrying amount of goodwill by business segment were as follows:
| Distilling Solutions | Branded Spirits | Ingredient Solutions | Total | ||||||||||||||||||||
Balance at December 31, 2023(a) | $ | — | $ | 321,544 | $ | — | $ | 321,544 | |||||||||||||||
| — | (73,755) | — | (73,755) | ||||||||||||||||||||
Balance at December 31, 2024 | — | 247,789 | — | 247,789 | |||||||||||||||||||
| — | (132,122) | — | (132,122) | ||||||||||||||||||||
Balance at December 31, 2025 | $ | — | $ | 115,667 | $ | — | $ | 115,667 | |||||||||||||||
(a) There were no accumulated impairment losses recorded at December 31, 2023.
2025 Impairment Analysis. As part of its annual impairment testing, the Company performed a quantitative assessment of Goodwill. The Company engaged a third party valuation specialist to assist in comparing the fair value of the Branded Spirits reporting unit to the respective carrying value. The estimate of fair value of the Company’s reporting unit was calculated using equal weighting of the income approach that utilized the discounted cash flow method and the market approach that utilized the guideline public company method. Estimates in the determination of fair value of the reporting unit through the income approach were based on (i) discount rates based on the reporting unit’s weighted average cost of capital, (ii) future expected cash flows including revenue and operating margin projections, and (iii) long-term growth rates based on inflation forecasts, industry growth, and long-term economic growth potential. The market approach compares enterprise values and historical and projected results of public companies that reflect economic conditions and risks that are similar to the reporting unit to calculate an estimated enterprise value. These assumptions are based on historical trends as well as the projections and assumptions used in the Company’s budget and long-range plans. These assumptions reflect the Company’s estimates of future economic and competitive conditions which can be affected by several factors such as inflation, business valuations in the market, the economy, and market competition. Any changes in these assumptions may
affect the Company’s fair value estimate and the results of an impairment test.
Based on the results of the Company’s 2025 impairment analysis, the Company recorded an impairment charge of $132,122 to adjust the carrying amount of the Branded Spirits reporting unit to fair value. This goodwill impairment is included as a component of operating income in the Consolidated Statements of Income (Loss) for the year ended December 31, 2025 and as a reduction of goodwill in the Consolidated Balance Sheets as of December 31, 2025.
2024 Impairment Analysis. During the fourth quarter 2024, the Company experienced a decrease in stock price and market capitalization as well as experienced the effects of the softening alcohol industry which contributed to declines in current year consolidated results and forecasted outlook. Based on these factors, the Company performed a quantitative assessment of goodwill. The Company engaged a third party valuation specialist to assist in comparing the fair value of the Branded Spirits reporting unit to the respective carrying value. The estimate of fair value of the Company’s reporting unit was calculated using equal weighting of the income approach that utilized the discounted cash flow method and the market approach that utilized the guideline public company method. The estimates and assumptions used in the 2024 impairment analysis are the same as the 2025 impairment analysis.
Based on the results of the Company’s 2024 impairment analysis, the Company recorded an impairment charge of $73,755 to adjust the carrying amount of the Branded Spirits reporting unit to fair value. This goodwill impairment is included as a component of operating income in the Consolidated Statements of Income (Loss) for the year ended December 31, 2024 and as a reduction of goodwill in the Consolidated Balance Sheets as of December 31, 2024.
Indefinite-Lived Intangible Assets. Changes in carrying amount of trade name indefinite-lived intangible asset by business segment were as follows:
| Distilling Solutions | Branded Spirits | Ingredient Solutions | Total | ||||||||||||||||||||
Balance at December 31, 2023(a) | $ | — | $ | 212,990 | $ | — | $ | 212,990 | |||||||||||||||
Balance at December 31, 2024(a) | — | 212,990 | — | 212,990 | |||||||||||||||||||
| — | (20,500) | — | (20,500) | ||||||||||||||||||||
Balance at December 31, 2025 | $ | — | $ | 192,490 | $ | — | $ | 192,490 | |||||||||||||||
(a) There were no accumulated losses recorded at December 31, 2023 and 2024.
2025 Impairment Analysis. As part of the annual impairment testing, the Company performed a quantitative assessment of trade name indefinite-lived intangible assets. The Company values its indefinite-lived intangible assets under the income approach using a relief-from-royalty method, which assumes the value of the asset is the sum of the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the asset and instead licensed it from another company. When estimating the fair value, the Company made certain assumptions for its future revenue projections, market royalty rates, and discount rates. These assumptions reflect the Company’s estimates of future economic and competitive conditions which consider many factors including macroeconomic conditions, industry growth rates, and competition. Any changes in these assumptions may affect the Company’s fair value estimate and the results of an impairment test. The most sensitive assumption used in the analysis was an 11 percent discount rate.
Based on the results of the Company’s 2025 impairment analysis, the Company recorded an impairment charge of $20,500 to adjust the carrying amount of the trade name indefinite-lived intangible assets to fair value. The impairment is included as a component of operating income in the Consolidated Statements of Income (Loss) for the year ended December 31, 2025 and as a reduction of intangible assets in the Consolidated Balance Sheets as of December 31, 2025. The impairment charge to the trade name indefinite-lived intangible assets were most impacted by declines in the mid and value price tiers within the Branded Spirits segment. As of December 31, 2025, after the impairment was recorded, the fair values of the Company’s indefinite-lived intangible assets were equal to or exceeded the respective carrying values by a range of 0 percent to 30 percent.
2024 Impairment Analysis. During the fourth quarter 2024, in connection with the assessment of the same events and circumstances impacting the Branded Spirits reporting unit, the Company performed a quantitative impairment test of its indefinite-lived assets. The Company values its indefinite-lived intangible assets under the income approach using a relief-from-royalty method, which assumes the value of the asset is the sum of the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the asset and instead licensed it from another company. When estimating the fair value, the Company made certain assumptions for its future revenue projections, market royalty rates, and discount rates. These assumptions reflect the Company’s estimates of future economic and competitive conditions which consider many factors including macroeconomic conditions, industry growth rates, and competition. These factors are subject to change as a result of changing market conditions. The most sensitive assumption used in the analysis was a 10 percent discount rate.
The results of the 2024 assessment were that the estimated fair values for the indefinite-lived intangible assets exceeded its carrying values and no impairment loss was recognized for indefinite-lived intangible assets. The carrying amount of trade name indefinite-lived intangible assets, which relates to the Branded Spirits segment, was $212,990 at December 31, 2024. As of December 31, 2024, the fair value of the Company’s indefinite-lived trade names exceeded the respective carrying values by a range of 10 percent to 20 percent.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 8, 2017 | |
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.