WORTHINGTON ENTERPRISES, INC. Goodwill & Intangibles Disclosure
Note D – Goodwill and Other Long-Lived Assets
Goodwill
The following table summarizes the changes in the carrying amount of goodwill during fiscal 2025 and fiscal 2024 by reportable operating segment:
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Total |
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Consumer |
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Building |
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Reportable |
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Products |
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Products |
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Segments |
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Other |
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Total |
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Balance at May 31, 2023 |
$ |
257,320 |
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$ |
65,213 |
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$ |
322,533 |
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$ |
13,645 |
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$ |
336,178 |
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Acquisitions |
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8,327 |
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- |
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8,327 |
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- |
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8,327 |
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Impairment losses |
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- |
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- |
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- |
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(14,210 |
) |
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(14,210 |
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Translation adjustments |
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- |
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735 |
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735 |
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565 |
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1,300 |
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Balance at May 31, 2024 |
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265,647 |
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65,948 |
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331,595 |
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- |
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331,595 |
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Acquisitions and purchase accounting adjustments(1) |
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(237 |
) |
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41,639 |
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41,402 |
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- |
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41,402 |
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Translation adjustments |
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- |
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3,483 |
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3,483 |
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- |
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3,483 |
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Balance at May 31, 2025 |
$ |
265,410 |
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$ |
111,070 |
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$ |
376,480 |
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$ |
- |
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$ |
376,480 |
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Accumulated goodwill impairment charges within Other totaled $212,500 as of May 31, 2025 and May 31, 2024, respectively.
Other Intangible Assets
Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives, which range from 10 to 20 years. The following table summarizes other intangible assets by class as of the end of the prior two fiscal years:
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2025 |
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2024 |
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Accumulated |
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Accumulated |
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Cost |
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Amortization |
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Cost |
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Amortization |
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Indefinite-lived intangible assets: |
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Trademarks |
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$ |
83,981 |
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$ |
- |
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$ |
111,681 |
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$ |
- |
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Total indefinite-lived intangible assets |
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83,981 |
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- |
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111,681 |
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- |
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Definite-lived intangible assets: |
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Trademarks |
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$ |
8,004 |
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$ |
923 |
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$ |
- |
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$ |
- |
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Customer relationships |
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149,188 |
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76,027 |
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169,680 |
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73,257 |
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Non-compete agreements |
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2,708 |
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2,708 |
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2,708 |
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2,615 |
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Technology know-how |
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35,404 |
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9,229 |
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20,244 |
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7,370 |
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Total definite-lived intangible assets |
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195,304 |
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88,887 |
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192,632 |
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83,242 |
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Total intangible assets |
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$ |
279,285 |
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$ |
88,887 |
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$ |
304,313 |
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$ |
83,242 |
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Amortization expense totaled $13,659, $11,787, and $11,877 in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.
Amortization expense for each of the next five fiscal years is estimated to be:
2026 |
$ |
11,764 |
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2027 |
$ |
11,238 |
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2028 |
$ |
10,909 |
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2029 |
$ |
10,909 |
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2030 |
$ |
10,909 |
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Impairment of Goodwill and Long-Lived Assets
The following section provides additional information on material impairment activity for the periods presented.
Fiscal 2025: During the fourth quarter of fiscal 2025, we determined that an impairment indicator was present for the long-lived assets of the GTI business within the Consumer Products operating segment, primarily due to uncertainties resulting from the imposition of tariffs on imported goods. We determined that intangible assets with a combined carrying amount of $59,711 were impaired and wrote them down to their estimated fair value of $9,661 resulting in a pre-tax impairment charge of $50,050. Fair value was based on expected future cash flows using Level 3 inputs under ASC 820. The cash flows are those expected to be generated by market participants, discounted at an appropriate rate for the risks inherent in those cash flow projections, or 14%. Our projections contain uncertainties as they require us to make assumptions about market comparables, future cash flows, and the appropriate discount rates to reflect the risk inherent in the future cash flows and to derive a reasonable enterprise value. The estimated future cash flows reflect our latest assumptions of the financial projections based on the current and anticipated tariff landscape, including estimates of revenue over the foreseeable future and long-term growth rates, and operating margins based on historical trends and future cost containment activities. Goodwill was tested separately at the Consumer Products and Building Products reporting unit level and was not impaired.
Fiscal 2024: On May 29, 2024, we became a noncontrolling equity partner in a new unconsolidated joint venture with Hexagon by selling 51% of the nominal share capital of our former consolidated Sustainable Energy Solutions operating segment in Europe. The book value of the disposal group exceeded its estimated fair market value (determined using Level 2 inputs), which resulted in the recording of a $32,203 impairment charge. Included in the impairment charge was goodwill with a book value of $14,210, which was deemed fully impaired and written off and long-lived assets with a carrying value of $46,215 which were written down to their estimated fair market value of $28,222.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jul 30, 2025 | Showing above |
| 2024 | Jul 30, 2024 | |
| 2023 | Jul 31, 2023 | |
| 2022 | Aug 1, 2022 | |
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.