7. GOODWILL AND INTANGIBLE ASSETS

Goodwill

In Q2 of 2025, the Company announced a leadership change in the Electronics segment from Lee Wichlacz to Billy Aldridge. Under the new leadership in Q3 of 2025, the Company evaluated the strategy and financial projections related to i3 Product Development ("i3PD"), a custom engineering services firm we acquired in May of 2023 that is part of our Electronics segment. That evaluation led to a reduction in the i3PD projected profit contributions to the Company over the short and mid-term due to de-emphasizing i3PD sales that do not align with the Company's core business. We performed a test for goodwill impairment as of the third quarter period end date and concluded goodwill was impaired.

The fair value of the i3PD reporting unit was determined based on an income approach methodology. A market approach methodology was evaluated but not used as the Company determined information for companies comparable to i3PD was not readily available. The income approach utilized a discounted cash flow analysis, which estimates the present value of the projected free cash flows to be generated by the reporting unit. Principal assumptions used in the analysis included the Company's estimates of future revenue and terminal growth rates, margin assumptions and discount rates. While assumptions utilized are subject to a high degree of judgment and complexity, the Company made every effort to estimate future cash flows as accurately as possible, given the high degree of economic uncertainty that existed. The Company concluded that the estimated fair value of the i3PD reporting unit was less than its carrying value, and as a result, recorded a non-cash, non-tax-deductible goodwill impairment charge of $25.9. This represents the full amount of goodwill for the i3PD reporting unit.
 

The Company tests goodwill for impairment at the reporting unit level, (i) as of the third quarter period end date, (ii) on an annual basis and (iii) between annual tests whenever events or circumstances indicate the carrying value of a reporting

unit may exceed its fair value. The Company performed the annual test of goodwill impairment on its other reporting units and concluded that it was more likely than not that their fair value exceeded their carrying value.

Acquired Intangible Assets

Amortization expense on acquired intangible assets for the nine months ended September 27, 2025, and September 28, 2024, was $24.1 and $23.6, respectively, reflected in amortization of intangible assets in the Consolidated Statements of Operations. Additionally, $0.2 and $0.6 of acquired amortization expense for the three and nine months ended September 27, 2025, respectively, was reflected in cost of sales in the Consolidated Statements of Operations. Future estimated total amortization expense is presented below.

In January 2025, the Company began restructuring the Helios Center of Engineering Excellence (“HCEE”). Consistent with the Company's previously announced restructuring plan, during the end of the second quarter 2025, management ceased operations at the San Antonio office and reassigned resources to the operations at our other major facilities across the business, and eliminated certain positions. As a result of this change in the HCEE business operations, the workforce intangible asset associated with the HCEE acquisition was reviewed by management and it was determined that the remaining net book value of the asset should be amortized over a useful life ending during the second quarter of 2025. This resulted in an increase of $0.2 in amortization expense for the nine months ended September 27, 2025 associated with this intangible asset.