Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The carrying amounts of goodwill, by operating segment, for the years ended December 31, 2025 and 2024 were as follows:


	(In thousands)
	Electronic Systems		Structural Systems		Consolidated Ducommun
Gross goodwill	$	199,157	$	127,165	$	326,322
Accumulated goodwill impairment	(81,722)		—		(81,722)


Balance at December 31, 2024	117,435		127,165		244,600



Balance at December 31, 2025	$	117,435	$	127,165	$	244,600

We perform our annual goodwill impairment test as of the first day of the fourth fiscal quarter. If certain factors occur, including significant under performance of our business relative to expected operating results, significant adverse economic and industry trends, significant decline in our market capitalization for an extended period of time relative to net book value, a decision to divest individual businesses within a reporting unit, or a decision to group individual businesses differently, we may be required to perform an interim impairment test prior to the fourth quarter.

We may use either a qualitative or quantitative approach when testing a reporting unit’s goodwill for impairment. The qualitative approach for potential impairment analysis is performed by evaluating a number of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit was less than its carrying amount. If the qualitative assessment indicates that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, we perform a quantitative assessment.

The quantitative approach for potential impairment analysis is performed by comparing the fair value of a reporting unit to its carrying value, including goodwill. Fair value is estimated by management using a combination of the income approach (which is based on a discounted cash flow model) and market approach. Management’s cash flow projections include significant judgments and assumptions, including the amount and timing of expected cash flows, long-term growth rates, and discount rates. The cash flows used in the discounted cash flow model are based on our best estimate of future revenues, gross margins, and adjusted after-tax earnings. If any of these assumptions are incorrect, it will impact the estimated fair value of a reporting unit. The market approach also requires management judgment in selecting comparable companies, business acquisitions and the transaction values observed and its related control premiums.

Our most recent step one goodwill impairment test for our Electronic Systems and Structural Systems reporting units was as of the first day of the fourth fiscal quarter of 2024 where the fair values of both reporting units exceeded their respective carrying values. No material adverse factors/changes have occurred since the fourth quarter of 2024 other than the Guaymas fire

litigation and related subrogation claims settlements, which we do not expect such settlements associated with the Guaymas fire to affect our ongoing operations. See Note 15. Thus, for our annual goodwill impairment test of our Electronic Systems and Structural Systems reporting units as of the first day of the fourth fiscal quarter of 2025, we used a qualitative assessment and determined it was not more likely than not that the fair value of each reporting unit was less than their respective carrying amount. Thus, the respective goodwill amounts were not deemed impaired.

Other Intangible Assets

Other intangible assets are related to acquisitions and recorded at fair value at the time of the acquisition. Other intangible assets with finite lives are generally amortized on the straight-line method over periods ranging from 2 to 23 years. Intangible assets are as follows:


		(In thousands)
		December 31, 2025						December 31, 2024
	Wtd. Avg Life (Yrs)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Finite-lived assets
Customer relationships	17	$	261,300	$	171,420	$	89,880	$	261,300	$	156,921	$	104,379
Trade names and trademarks	16	10,400		3,616		6,784		10,400		2,937		7,463
Contract renewal	14	1,845		1,845		—		1,845		1,845		—
Technology	23	36,000		4,525		31,475		36,000		2,951		33,049
Backlog	2	600		600		—		600		600		—
Total finite-lived assets		310,145		182,006		128,139		310,145		165,254		144,891

Indefinite-lived assets
Trade names and trademarks		4,700		—		4,700		4,700		—		4,700
Total		$	314,845	$	182,006	$	132,839	$	314,845	$	165,254	$	149,591

The carrying amount of other intangible assets by operating segment as of December 31, 2025 and 2024 was as follows:


	(In thousands)
	December 31, 2025						December 31, 2024
	Gross		Accumulated Amortization		Net Carrying Value		Gross		Accumulated Amortization		Net Carrying Value
Other intangible assets
Electronic Systems	$	164,545	$	127,342	$	37,203	$	164,545	$	118,054	$	46,491
Structural Systems	150,300		54,664		95,636		150,300		47,200		103,100
Total	$	314,845	$	182,006	$	132,839	$	314,845	$	165,254	$	149,591

Amortization expense of other intangible assets was $16.8 million, $16.8 million and $16.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. Future amortization expense by operating segment is expected to be as follows:


	(In thousands)
	Electronic Systems		Structural Systems		Consolidated Ducommun
2026	$	9,288	$	7,440	$	16,728
2027	9,288		7,437		16,725
2028	9,288		6,892		16,180
2029	5,276		6,627		11,903
2030	1,493		6,627		8,120
Thereafter	2,570		55,913		58,483
	$	37,203	$	90,936	$	128,139