Company: CHD
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000950170-25-019801
Chunk: 171

Company: CHURCH & DWIGHT CO INC /DE/
Filing Date: 2025-02-13
Form: 10-K
Item: Item 7
Chunk 171
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 a $15.8 impairment for the remaining carrying value of the customer relationship intangible asset.  The remaining carry value of both the trade name and customer relationship intangible asset at December 31, 2024 is $0.0. 

Our global WATERPIK business has continued to experience a significant decline in customer demand for many of its products, primarily due to lower consumer spending for discretionary products resulting in part from inflation and a growing number of water flosser consumers switching to more value-branded products.  As a result, the WATERPIK business has experienced declining sales and profits resulting in a reduction in expected future cash flows which have eroded a substantial portion of the excess between the fair and carrying value of the trade name.  This indefinite-lived intangible asset may be susceptible to impairment and a continued decline in fair value could trigger a future impairment charge of the WATERPIK trade name.  While management can and has implemented strategies to address the risk, significant changes in operating plans or adverse changes in the future could reduce the underlying cash flows used to estimate fair values and could result in a decline in fair value that could trigger future impairment charges of these assets.  The carrying value of the WATERPIK trade name is $644.7 and fair value represented 135% of the carrying value as of October 1, 2024.  The fair value represented 109% of the carrying value as of October 1, 2023.  The increase in fair value is mainly attributable to a favorable tariff ruling on certain Waterpik products imported from China.  

In the fourth quarter of 2022, we determined that a review of our ability to recover the carrying values of the global FINISHING TOUCH FLAWLESS intangible assets was necessary based on the discontinuance of certain products at a major retailer.  The FINISHING TOUCH FLAWLESS assets consist of the definite-lived trade name, customer relationships and technology assets recorded at acquisition. We evaluated our ability to recover the carrying values of the intangible assets by comparing the carrying amount to the future undiscounted cash flows and determined that the cash flows would not be sufficient to recover the carrying value of the assets.  After determining the estimated fair value of the assets, which included a reduction in cash flows due to the loss of distribution mentioned above along with an expected continued decline in discretionary consumption and higher interest rates, a non-cash impairment charge of $411.0 was recorded in the fourth quarter of 2022. The remaining net book value