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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 Intangible Assets (As Restated) Goodwill As a result of acquisitions of various businesses, the Company has significant intangible assets on its balance sheet that include goodwill and indefinite-lived intangibles. The Company’s goodwill and indefinite-lived intangibles are tested and reviewed for impairment annually as of March 31st or more frequently if facts and circumstances warrant by comparing the fair value of each reporting unit to its carrying value. Each of the Company’s businesses represent a reporting unit. A reconciliation of the change in the carrying value of goodwill by segment for the years ended December 31, 2024, 2023 and 2022 are as follows (in thousands):
|  | Balance at January 1, 2024 |  | Acquisitions/Measurement Period Adjustments (1) |  | Goodwill Impairment |  | Balance at December 31, 2024
|  | As Restated |  |  |  |  |  | As Restated
5.11 |  | $ | 92,966 |  |  | $ | — |  |  | $ | — |  |  | $ | 92,966 |
BOA |  | 254,153 |  |  | — |  |  | — |  |  | 254,153 |
Lugano |  | — |  |  | — |  |  | — |  |  | — |
PrimaLoft |  | 232,536 |  |  | — |  |  | — |  |  | 232,536 |
The Honey Pot Co. |  | — |  |  | 107,039 |  |  | — |  |  | 107,039 |
Velocity Outdoor |  | 8,182 |  |  | — |  |  | (8,182) |  |  | — |
Altor Solutions |  | 91,129 |  |  | 23,490 |  |  | — |  |  | 114,619 |
Arnold |  | 39,267 |  |  | — |  |  | — |  |  | 39,267 |
Sterno |  | 55,336 |  |  | — |  |  | — |  |  | 55,336 |
Corporate |  | — |  |  | — |  |  | — |  |  | — |
Total |  | $ | 773,569 |  |  | $ | 130,529 |  |  | $ | (8,182) |  |  | $ | 895,916 |
(1) Acquisition of businesses during the year ended December 31, 2024 includes the acquisition of The Honey Pot Co. by the Company, and an add-on acquisition at Altor.
|  | Balance at January 1, 2023 |  | Acquisitions/Measurement Period Adjustments |  | Goodwill Impairment |  | Balance at December 31, 2023
|  | As Restated |  |  |  |  |  | As Restated
5.11 |  | $ | 92,966 |  |  | $ | — |  |  | $ | — |  |  | $ | 92,966 |
BOA |  | 254,153 |  |  | — |  |  | — |  |  | 254,153 |
Lugano |  | — |  |  | — |  |  | — |  |  | — |
PrimaLoft |  | 291,150 |  |  | (804) |  |  | (57,810) |  |  | 232,536 |
Velocity Outdoor |  | 39,773 |  |  | — |  |  | (31,591) |  |  | 8,182 |
Altor Solutions |  | 91,129 |  |  | — |  |  | — |  |  | 91,129 |
Arnold |  | 39,267 |  |  | — |  |  | — |  |  | 39,267 |
Sterno |  | 55,336 |  |  | — |  |  | — |  |  | 55,336 |
Total |  | $ | 863,774 |  |  | $ | (804) |  |  | $ | (89,401) |  |  | $ | 773,569 |
|  | Balance at January 1, 2022 |  | Acquisitions/Measurement Period Adjustments (1) |  | Goodwill Impairment |  | Balance at December 31, 2022
|  | As Restated |  |  |  | As Restated |  | As Restated
5.11 |  | $ | 92,966 |  |  | $ | — |  |  | $ | — |  |  | $ | 92,966 |
BOA |  | 254,153 |  |  | — |  |  | — |  |  | 254,153 |
Lugano |  | 23,328 |  |  | 2,879 |  |  | (26,207) |  |  | — |
PrimaLoft |  | — |  |  | 291,150 |  |  | — |  |  | 291,150 |
Velocity Outdoor |  | 30,079 |  |  | 9,694 |  |  | — |  |  | 39,773 |
Altor Solutions |  | 90,843 |  |  | 286 |  |  | — |  |  | 91,129 |
Arnold |  | 39,267 |  |  | — |  |  | — |  |  | 39,267 |
Sterno |  | 55,336 |  |  | — |  |  | — |  |  | 55,336 |
Total |  | $ | 585,972 |  |  | $ | 304,009 |  |  | $ | (26,207) |  |  | $ | 863,774 |
(1) Acquisition of businesses during the year ended December 31, 2022 includes the acquisition of PrimaLoft by the Company, and an add-on acquisition at Velocity. Approximately $227.9 million of goodwill is deductible for income tax purposes at December 31, 2024. Annual Impairment Testing The Company uses a qualitative approach to test goodwill and indefinite lived intangible assets for impairment by first assessing qualitative factors to determine whether it is more-likely than-not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform quantitative goodwill impairment testing. 2024 Annual Impairment Testing For the Company's annual impairment testing at March 31, 2024, the Company performed a qualitative assessment of our reporting units. The results of the qualitative analysis indicated that it was more-likely-than-not that the fair value of each of our reporting units except Velocity exceeded their carrying value. Based on our analysis, the Company determined that the Velocity operating segment required quantitative testing because we could not conclude that the fair value of this reporting unit significantly exceeded the carrying value based on qualitative factors alone. The Company performed a quantitative test of Velocity and the results of the testing indicated that the fair value of Velocity did not exceed the carrying value, resulting in goodwill impairment expense of $8.2 million as of March 31, 2024. 2023 Annual Impairment Testing The Company determined that the Velocity reporting unit required additional quantitative testing because we could not conclude that the fair value of the reporting unit exceeded its carrying value based on qualitative factors alone. For the reporting units that were tested only on a qualitative basis for the 2023 annual impairment testing, the results of the qualitative analysis indicated that it was more likely than not that the fair value exceeded the carrying value of these reporting units. The quantitative test of Velocity was performed using an income approach to determine the fair value of the reporting unit. The discount rate used in the income approach was 15% and the results of the quantitative impairment testing indicated that the fair value of the Velocity reporting unit exceeded the carrying value by 21%. 2022 Annual Impairment Testing The results of the qualitative analysis indicated that it was more-likely-than-not that the fair value of each of our reporting units exceeded their carrying value for the 2022 annual impairment testing. Interim Impairment Testing 2023 Interim Impairment Testing PrimaLoft - The Company performed an interim impairment test of goodwill at PrimaLoft as of December 31, 2023. As a result of operating results that were below forecast amounts that were used as the basis for the purchase price allocation performed when PrimaLoft was acquired as well as the failure of certain financial covenants in the intercompany credit agreement as of December 31, 2023, the Company determined that a triggering event had occurred. The Company performed the quantitative impairment test using both an income approach and a market approach. The prospective information used in the income approach considered macroeconomic data, industry and reporting unit specific facts and circumstances and was our best estimate of operational results and cash flows for the PrimaLoft reporting unit as of the date of our impairment testing. The discount rate used in the income approach was 11.3% The results of the quantitative impairment testing indicated that the fair value of the PrimaLoft reporting unit did not exceed its carrying value, resulting in goodwill impairment expense of $57.8 million in the year ended December 31, 2023. Velocity Outdoor - The Company performed interim quantitative impairment testing of goodwill at Velocity at August 31, 2023. As a result of operating results that were below the forecast that we used in the quantitative impairment test of Velocity Outdoor at March 31, 2023, the Company determined that a triggering event had occurred at Velocity in the third quarter of 2023 and performed an interim impairment test as of August 31, 2023. The Company used an income approach for the impairment test, whereby we estimated the fair value of the reporting unit based on the present value of future cash flows. Cash flow projections are based on management's estimate of revenue growth rates and operating margins, and take into consideration industry and market conditions as well as company specific economic factors. The Company used a weighted average cost of capital of 17% in the income approach. The discount rate used was based on the weighted average cost of capital adjusted for the relevant risk associated with business specific characteristics and Velocity's ability to execute on projected cash flows. Based on the results of the impairment test, the fair value of Velocity did not exceed its carrying value. The Company recorded goodwill impairment of $31.6 million during the year ended December 31, 2023. 2022 Interim Impairment Testing Lugano - The Company performed an interim impairment test of goodwill at Lugano as of December 31, 2022. The Company has restated the audited consolidated financial statements as of December 31, 2024, 2023 and 2022 and for the years ended December 31, 2024, 2023 and 2022 as well as the interim periods in the years ended December 31, 2024, 2023 and 2022 for the correction of historical financial information related to Lugano. Historical information that had previously been relied on by the Company in preparing projected financial information for the period ending December 31, 2022 proved to be inaccurate, and operating results were below forecast amounts. Therefore the Company determined that a triggering event had occurred. The Company performed the quantitative impairment test using an income approach. The Company considered macroeconomic data, industry and reporting unit specific facts and circumstances and developed the prospective financial information based on our best estimate of operational results and cash flows for the Lugano reporting unit as of the date of our impairment testing. The results of the quantitative impairment testing indicated that the fair value of the Lugano reporting unit did not exceed its carrying value, resulting in goodwill impairment expense of $26.2 million in the year ended December 31, 2022. The following is a summary of the net carrying amount of goodwill at December 31, 2024, 2023 and 2022 (in thousands):
|  | December 31, 2024 |  | December 31, 2023 |  | December 31, 2022
|  | (As Restated) |  | (As Restated) |  | (As Restated)
Goodwill - gross carrying amount |  | $ | 1,311,813 |  |  | $ | 1,181,284 |  |  | $ | 1,182,089 |
Accumulated impairment losses (1) |  | (415,897) |  |  | (407,715) |  |  | (318,315) |
Goodwill - net carrying amount |  | $ | 895,916 |  |  | $ | 773,569 |  |  | $ | 863,774 |
(1) Comprised of accumulated goodwill impairment expens e of $260.6 million at Lugano, $72.7 million at Velocity, $24.9 million at Arnold and $57.8 million at PrimaLoft. Intangible Assets Intangible assets are comprised of the following (in thousands):
|  | December 31, 2024 |  | December 31, 2023 |  | December 31, 2022 |  | Weighted Average Useful Lives
Gross Carrying Amount |  | (As Restated) |  | (As Restated) |  | (As Restated) |  |
Customer relationships |  | $ | 772,361 |  |  | $ | 714,951 |  |  | $ | 716,631 |  |  | 13
Technology and patents |  | 198,865 |  |  | 200,788 |  |  | 199,103 |  |  | 12
Trade names, subject to amortization |  | 453,792 |  |  | 273,084 |  |  | 273,008 |  |  | 18
Non-compete agreements |  | 1,588 |  |  | 1,588 |  |  | 1,588 |  |  | 5
Other contractual intangible assets |  | 210 |  |  | 210 |  |  | 210 |  |  | 0
|  | 1,426,816 |  |  | 1,190,621 |  |  | 1,190,540 |  |  |
Trade names, not subject to amortization |  | 30,810 |  |  | 30,810 |  |  | 30,810 |  |  |
In-process research and development (1) |  | 500 |  |  | 500 |  |  | 500 |  |  |
Total intangibles, gross |  | $ | 1,458,126 |  |  | $ | 1,221,931 |  |  | $ | 1,221,850 |  |  |
Accumulated Amortization |  |  |  |  |  |  |  |
Customer relationships |  | $ | (311,357) |  |  | $ | (269,879) |  |  | $ | (216,875) |  |  |
Technology and patents |  | (78,175) |  |  | (65,043) |  |  | (50,343) |  |  |
Trade names, subject to amortization |  | (83,706) |  |  | (77,423) |  |  | (62,381) |  |  |
Non-compete agreements |  | (1,282) |  |  | (1,032) |  |  | (775) |  |  |
Other contractual intangible assets |  | (210) |  |  | (210) |  |  | (210) |  |  |
|  | $ | (474,730) |  |  | $ | (413,587) |  |  | $ | (330,584) |  |  |
Total intangibles, net |  | $ | 983,396 |  |  | $ | 808,344 |  |  | $ | 891,266 |  |  |
(1) In-process research and development is considered indefinite lived until the underlying technology becomes viable, at which point the intangible asset will be amortized over the expected useful life. Definite-Lived Intangible Asset Impairment Testing 2023 Lugano - The Company tested the definite lived intangible assets at Lugano as of December 31, 2023. The impairment test resulted in impairment of the customer relationship intangible of $1.2 million. The fair value of the customer relationship was determined using a variation of a multi-period excess earnings method and led to a fair value that was less than the carrying value of the asset. 2022 Lugano - The Company tested the definite lived intangible assets at Lugano as of December 31, 2022. The impairment test resulted in impairment of the customer relationship intangible of $2.4 million. The fair value of the customer relationship was determined using a variation of a multi-period excess earnings method and led to a fair value that was less than the carrying value of the asset. The Company’s amortization expense of intangible assets for the years ended December 31, 2024, 2023 and 2022 totaled $94.8 million, $83.6 million and $72.7 million, respectively. Estimated charges to amortization expense of intangible assets over the next five years, is as follows (restated), (in thousands):
2025 | $ | 92,853 |
2026 | $ | 90,662 |
2027 | $ | 81,872 |
2028 | $ | 79,770 |
2029 | $ | 79,649 |

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