Note 3 - Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

3. Goodwill and Intangible Assets

ASC

350

requires that goodwill be tested for impairment annually, unless potential interim indicators exist that could result in impairment. Although the Company has only

one

reporting segment, it has historically considered its

three

regions (Alabama, Missouri, and New England) to be reporting units for purposes of goodwill impairment testing. As of

December 31, 2018,

goodwill for Alabama, Missouri, and New England represented

87.2%,

12.8%

and less than

1.0%,

respectively, of total goodwill for the Company. The Company performed its annual goodwill impairment testing as of

October 1, 2018.

The Company used the discounted cash flow (“DCF”) method under the income approach as well as the guideline public company method (“GPCM”) under the market approach to value the reporting units. The Company utilized weightings of

50.0%

for the DCF method and

50.0%

for the GPCM to derive a concluded fair value of total assets for each reporting unit. The Company concluded that

no

impairment was present in any of its reporting units during the impairment review as of

October 1, 2018,

and

2017.

The Company determined that

no

events or circumstances from

October 1, 2018,

through

December 31, 2018,

indicated that a further assessment was necessary.

In

2017,

the Company changed its approach to managing its business from

three

semi-autonomous regions to a functional management approach with leadership for functions spanning the whole Company. In

2018,

the Company implemented a single billing and operations support system covering all customers. Additionally, a chief operating officer position was established and filled during

fourth

quarter

2018

to lead all operations. Therefore, the Company will measure goodwill for impairment as a single reporting unit beginning in

2019.

There was

no

change in the carrying amounts of goodwill for Alabama, Missouri and New England during

2018

or

2017,

with a balance of

$39,199

thousand,

$5,758

thousand and

$19

thousand, respectively, as of both

December 31, 2018,

and

2017.

The Company also found

no

impairment in the other intangible assets and the only change in the carrying amounts for the years ended

December 31, 2018,

and

2017,

is due to the amortization for each current year.

Intangible assets are summarized as follows (in thousands):

	December 31, 2017
	Carrying Value		Accumulated Amortization			Net Book Value
Customer relationships	$	24,025	$	(22,705	)	$	1,320
Contract relationships		19,600		(19,600	)		-
Non-competition		107		(105	)		2
Trade name		23		(17	)		6
Total	$	43,755	$	(42,427	)	$	1,328

	December 31, 2018
	Carrying Value		Accumulated Amortization			Net Book Value
Customer relationships	$	24,025	$	(23,110	)	$	915
Contract relationships		19,600		(19,600	)		-
Non-competition		107		(107	)		-
Trade name		23		(19	)		4
Total	$	43,755	$	(42,836	)	$	919

These intangible assets had a range of

2

to

15

years of useful lives at inception and utilize both the sum-of-the-years’ digits and straight-line methods of amortization, as appropriate. The following tables present historical and expected amortization expense of the existing intangible assets as of

December 31, 2018,

for each of the following periods (in thousands):

Aggregate amortization expense for the years ended

December 31,

2016	$	578
2017	$	458
2018	$	408

Expected amortization expense for the years ending

December 31,

2019	$	389
2020		372
2021		158
2022		-
Total	$	919