Willdan Group, Inc. Goodwill & Intangibles Disclosure
6. GOODWILL AND OTHER INTANGIBLE ASSETS
The Company’s goodwill primarily relates to the Energy segment and the historical acquisitions within this segment which includes the fiscal year 2025 acquisition of Alternative Power Generation, as well as the fiscal year 2024 acquisition of substantially all of the assets of Enica. The remaining goodwill relates to the Engineering and Consulting reporting segment and the historical acquisitions within this segment which includes the fiscal year 2025 acquisition of Compass Municipal Advisors and Alpha.
The changes in the carrying value of goodwill by reporting unit were as follows:
December 27, | Additional | Additions / | January 2, | |||||||||
| 2024 | | Purchase Cost | | Adjustments | | 2026 | |||||
(in thousands) | ||||||||||||
Reporting Unit: | ||||||||||||
Energy | $ | 139,222 | $ | 31,613 | $ | — | $ | 170,835 | ||||
Engineering and Consulting | 1,769 | 6,926 | — | 8,695 | ||||||||
$ | 140,991 | $ | 38,539 | $ | — | $ | 179,530 | |||||
December 29, | Additional | Additions / | December 27, | |||||||||
| 2023 | | Purchase Cost | | Adjustments | | 2024 | |||||
(in thousands) | ||||||||||||
Reporting Unit: | ||||||||||||
Energy | $ | 129,375 | $ | 9,847 | $ | — | $ | 139,222 | ||||
Engineering and Consulting | 1,769 | — | — | 1,769 | ||||||||
$ | 131,144 | $ | 9,847 | $ | — | $ | 140,991 | |||||
The Company tests its goodwill at least annually for possible impairment. The Company completes its annual testing of goodwill as of the last day of the first month of its fourth fiscal quarter each year to determine whether there is impairment. In addition to the Company’s annual test, it regularly evaluates whether events and circumstances have occurred that may indicate a potential impairment of goodwill.
No impairment was recorded in any year during the three-year period ended January 2, 2026.
The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives, included in other intangible assets, net in the accompanying consolidated balance sheets, were as follows:
January 2, 2026 | December 27, 2024 | |||||||||||||||||
Gross | Accumulated | Gross | Accumulated | Amortization | ||||||||||||||
| Amount | | Amortization | | Amount | | Amortization | | Period | |||||||||
(in thousands) | (in years) | |||||||||||||||||
Finite: | ||||||||||||||||||
Backlog | $ | 11,600 | $ | 9,853 | $ | 8,882 | $ | 8,350 | 1.0 | |||||||||
Tradename | 17,773 | 14,285 | 16,123 | 13,196 |
| 2.5 | - | 6.0 | ||||||||||
Non-compete agreements | 1,835 | 1,535 | 1,613 | 1,488 | 4.0 | - | 5.0 | |||||||||||
Developed technology | 15,810 | 15,810 | 15,810 | 15,286 | 8.0 | |||||||||||||
Customer relationships | 73,400 | 43,414 | 62,041 | 36,735 | 5.0 | - | 12.0 | |||||||||||
Total intangible assets | $ | 120,418 | $ | 84,897 | $ | 104,469 | $ | 75,055 | ||||||||||
At the time of acquisition, the Company estimates the fair value of the acquired identifiable intangible assets based upon the facts and circumstances related to the particular intangible asset. Inherent in such estimates are judgments and estimates of future revenue, profitability, cash flows and appropriate discount rates for any present value calculations. The Company preliminarily estimates the value of the acquired identifiable intangible assets and then finalizes the estimated fair values during the purchase allocation period, which does not extend beyond 12 months from the date of acquisition.
The Company’s amortization expense for acquired identifiable intangible assets with finite useful lives was $9.8 million, $7.2 million, and $10.1 million for the fiscal years 2025, 2024 and 2023, respectively.
Estimated amortization expense for acquired identifiable intangible assets for fiscal year 2026 and the succeeding years is as follows:
Future Intangible Asset | |||
Amortization expense | |||
(in thousands) | |||
Fiscal year: | |||
2026 | $ | 9,584 | |
2027 |
| 7,562 | |
2028 |
| 6,577 | |
2029 | 2,849 | ||
2030 | 1,868 | ||
Thereafter | 7,081 | ||
$ | 35,521 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Feb 27, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 8, 2024 | |
| 2022 | Mar 10, 2023 | |
| 2021 | Mar 17, 2021 | |
| 2019 | Mar 6, 2020 | |
| 2018 | Mar 8, 2019 | |
| 2017 | Mar 9, 2018 | |
| 2016 | Mar 16, 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.