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GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended
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Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS | 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 2024. The distributor relationships have a carrying value of $55,461, net of accumulated amortization of $9,639. The distributor relationships have a useful life of 20 years. The amortization expense for the years ended December 31, 2024 and 2023 was $3,255 and $2,761, respectively. The weighted average remaining amortization period at December 31, 2024 for definite-lived intangible assets is 17.1 years. As of December 31, 2024, the expected future amortization expense related to definite-lived intangibles assets are as follows:
2025 | $ | 3,255 |
2026 | 3,255 |
2027 | 3,255 |
2028 | 3,255 |
2029 | 3,255 |
Thereafter | 39,186 |
Total | $ | 55,461 |
Goodwill. The Company records goodwill in connection with various acquisitions of businesses and allocates the goodwill to its respective reporting units. The Company tests goodwill for impairment at least annually, in the fourth quarter or on an interim basis if events and circumstances occur that would indicate it is more likely than not that the fair value of a reporting unit is less than the carrying value. To the extent that the carrying amount exceeds fair value, an impairment of goodwill is recognized and allocated to the reporting units. During the fourth quarter, 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. 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 weighed 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 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 Statement of Income for the year ended December 31, 2024 and as a reduction of goodwill in the Consolidated Balance sheet as of December 31, 2024. Changes in carrying amount of goodwill by business segment were as follows:
| Distilling Solutions |  | Branded Spirits |  | Ingredient Solutions |  | Total
Balance at December 31, 2022(a) | $ | — |  |  | $ | 226,294 |  |  | $ | — |  |  | $ | 226,294 |
Acquisitions | — |  |  | 95,250 |  |  | — |  |  | 95,250 |
Balance at December 31, 2023(a) | — |  |  | 321,544 |  |  | — |  |  | 321,544 |
Impairment | — |  |  | (73,755) |  |  | — |  |  | (73,755) |
Balance at December 31, 2024 | $ | — |  |  | $ | 247,789 |  |  | $ | — |  |  | $ | 247,789 |
(a) There was no accumulated impairment losses recorded at December 31, 2023 and 2022. Indefinite-Lived Intangible Assets. The Company records indefinite-lived intangible assets in connection with various acquisitions of businesses and allocates the indefinite-lived intangible assets to its respective reporting units. During the fourth quarter 2024, in connection with the assessment of the same events and circumstances impacting the Branded Spirit 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 assessment that the estimated fair values for the indefinite-lived intangible assets exceed its carrying value 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 Spirit segment, was $212,990 at both December 31, 2024 and 2023. 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. While the indefinite-lived trade names were not determined to be impaired, if these brands do not perform as projected or if market factors utilized in the impairment analysis deteriorate, including unfavorable changes in the weighted average cost of capital, these changes could materially affect the expected cash flows, and such impacts could potentially result in a material non-cash impairment charge.

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
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