NORDSON CORPNDSN
NORDSON CORP Goodwill & Intangibles Disclosure
Note 6 — Goodwill and intangible assets
We account for goodwill and other intangible assets in accordance with the provisions of ASC 350 and account for business combinations using the acquisition method of accounting and accordingly, the assets and liabilities of the entities acquired are recorded at their estimated fair values at the acquisition date. Goodwill is the excess of purchase price over the fair value of tangible and identifiable intangible net assets acquired in various business combinations. Goodwill is not amortized but is subject to annual impairment testing. Our annual impairment testing is performed as of August 1. Testing is done more frequently if an event occurs or circumstances change that would indicate the fair value of a reporting unit is less than the carrying amount of those assets. We assess the fair value of reporting units on an annual basis using a quantitative analysis that uses a combination of the Income Approach and the guideline public company method of the Market Approach, and compare the result against the reporting unit’s carrying value of net assets. The implied fair value of our reporting units is determined based on significant unobservable inputs, as discussed below; accordingly, these inputs fall within Level 3 of the fair value hierarchy. The Income Approach uses assumptions for revenue growth, operating margin and working capital turnover that are based on management’s strategic plans tempered by performance trends and reasonable expectations about those trends. Terminal value calculations employ a published formula known as the Gordon Growth Model Method that essentially captures the present value of perpetual cash flows beyond the last projected period assuming a constant Weighted Average Cost of Capital ("WACC") methodology and growth rate. For each reporting unit, a sensitivity analysis is performed to vary the discount and terminal growth rates in order to provide a range of reasonableness for detecting impairment. Discount rates are developed using a WACC methodology. The WACC represents the blended average required rate of return for equity and debt capital based on observed market return data and company specific risk factors.
In the application of the guideline public company method, fair value is determined using transactional evidence for similar publicly traded equity. The comparable company guideline group is determined based on relative similarities to each reporting unit since exact correlations are not available. An indication of fair value for each reporting unit is based on the placement of each reporting unit within a range of multiples determined for its comparable guideline company group. Valuation multiples are derived by dividing latest twelve-month performance for revenues and Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") into total invested capital, which is the sum of traded equity plus interest bearing debt less cash. These multiples are applied against the revenue and EBITDA of each reporting unit. While the implied indications of fair value using the guideline public company method yield meaningful results, the discounted cash flow method of the Income Approach includes management’s thoughtful projections and insights as to what the reporting units will accomplish in the near future. Accordingly, the reasonable, implied fair value of each reporting unit is a blend based on the consideration of both the Income and Market approaches.
An impairment charge is recorded for the amount by which the carrying value of the reporting unit exceeds the fair value of the reporting unit, as calculated in the quantitative analysis described above. Based on our annual impairment tests in 2025, 2024 and 2023, the fair value of each reporting unit exceeded its carrying value, and accordingly, we did not record any goodwill impairment charges in 2025, 2024 or 2023.
Our reporting units are the same as our reportable operating segments, Industrial Precision Solutions ("IPS"), Medical and Fluid Solutions ("MFS"), and the Advanced Technology Solutions ("ATS") segments. Changes in the carrying amount of goodwill during 2025 by operating segment:
| Industrial Precision Solutions | Medical and Fluid Solutions | Advanced Technology Systems | Total | ||||||||||||||||||||
| Balance at October 31, 2024 | $ | 1,207,631 | $ | 1,669,748 | $ | 403,440 | $ | 3,280,819 | |||||||||||||||
Acquisitions (1) | — | (14,130) | — | (14,130) | |||||||||||||||||||
Other (2) | — | (10,565) | — | (10,565) | |||||||||||||||||||
Division Transfer (3) | (29,010) | — | 29,010 | — | |||||||||||||||||||
| Currency effect | 31,745 | 2,415 | 14,401 | 48,561 | |||||||||||||||||||
| Balance at October 31, 2025 | $ | 1,210,366 | $ | 1,647,468 | $ | 446,851 | $ | 3,304,685 | |||||||||||||||
(1) Measurement period adjustments related to the acquisition of Atrion. See Note 3 to the Consolidated Financial Statements for additional details.
(2) Allocation of goodwill related to the sale of select product lines in the medical contract manufacturing business.
(3) In the first quarter of 2025, the Measurement and Control Solutions ("MCS") division was transferred from the IPS segment to the ATS segment due to an organizational change and determination that the economic and business characteristics of MCS better aligned with the Company’s ATS segment. This division transfer reflects the transfer of goodwill from IPS to
ATS as a result of this change. In addition, the Company reassessed its reporting units for purposes of annual goodwill impairment testing due to a number of recent developments, including the status of integration activities associated with several significant acquisitions over the last few years and changes in the management of divisions, such as the transfer of MCS to the ATS segment. As a result of this reassessment and in consideration of the Company's management reporting structure, economic characteristics of the divisions and nature of the products and services of those divisions, the Company determined its reporting units should be the same as its operating segments: ATS, IPS and MFS. In accordance with ASC 350, Intangibles - Goodwill and Other, the Company properly assessed for indicators of impairment of goodwill at the time of the reporting unit change, concluding that no impairment existed.
Changes in the carrying amount of goodwill during 2024 by operating segment:
| Industrial Precision Solutions | Medical and Fluid Solutions | Advanced Technology Systems | Total | ||||||||||||||||||||
| Balance at October 31, 2023 | $ | 1,208,996 | $ | 1,173,858 | $ | 401,347 | $ | 2,784,201 | |||||||||||||||
Acquisitions (1) | (9,962) | 494,279 | — | 484,317 | |||||||||||||||||||
| Currency effect | 8,597 | 1,611 | 2,093 | 12,301 | |||||||||||||||||||
| Balance at October 31, 2024 | $ | 1,207,631 | $ | 1,669,748 | $ | 403,440 | $ | 3,280,819 | |||||||||||||||
(1) The IPS decrease reflects ARAG acquisition measurement period adjustments and the MFS increase in goodwill was due to the acquisition of Atrion. See Note 3 to the Consolidated Financial Statements for additional details.
Information regarding intangible assets subject to amortization:
| October 31, 2025 | |||||||||||||||||
| Carrying Amount | Accumulated Amortization | Net Book Value | |||||||||||||||
| Customer relationships | $ | 899,402 | $ | 390,751 | $ | 508,651 | |||||||||||
| Patent/technology costs | 235,255 | 155,865 | 79,390 | ||||||||||||||
| Trade names | 169,127 | 75,581 | 93,546 | ||||||||||||||
| Noncompete agreements | 8,596 | 8,596 | — | ||||||||||||||
| Other | 929 | 929 | — | ||||||||||||||
| Total | $ | 1,313,309 | $ | 631,722 | $ | 681,587 | |||||||||||
| October 31, 2024 | |||||||||||||||||
| Carrying Amount | Accumulated Amortization | Net Book Value | |||||||||||||||
| Customer relationships | $ | 878,071 | $ | 339,756 | $ | 538,315 | |||||||||||
| Patent/technology costs | 232,371 | 134,187 | 98,184 | ||||||||||||||
| Trade names | 167,144 | 62,887 | 104,257 | ||||||||||||||
| Noncompete agreements | 8,502 | 8,412 | 90 | ||||||||||||||
| Other | 500 | 500 | — | ||||||||||||||
| Total | $ | 1,286,588 | $ | 545,742 | $ | 740,846 | |||||||||||
Amortization expense for 2025, 2024 and 2023 was $79,264, $76,972 and $59,719, respectively. See Note 3 for details regarding intangibles recorded due to acquisitions.
Estimated amortization expense for each of the five succeeding years:
| Year | Amounts | |||||||
| 2026 | $ | 77,765 | ||||||
| 2027 | $ | 69,053 | ||||||
| 2028 | $ | 66,061 | ||||||
| 2029 | $ | 60,541 | ||||||
| 2030 | $ | 57,533 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 17, 2025 | Showing above |
| 2024 | Dec 18, 2024 | |
| 2023 | Dec 20, 2023 | |
| 2022 | Dec 19, 2022 | |
| 2021 | Dec 17, 2021 | |
| 2020 | Dec 18, 2020 | |
| 2019 | Dec 13, 2019 | |
| 2018 | Dec 14, 2018 | |
| 2017 | Dec 15, 2017 | |
| 2016 | Dec 15, 2016 | |
| 2015 | Dec 15, 2015 | |
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.