GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

9. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is tested at the reporting unit level annually and if necessary, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In 2015, the Company changed its annual testing date from December 31 to October 1. The Company believes this change in the method of applying an accounting principle is preferable, as it will alleviate the resource constraints that historically existed during the fourth quarter. This change in annual testing date does not delay, accelerate, or avoid an impairment charge.

We test goodwill for impairment using a quantitative analysis consisting of a two-step approach. The first step of our quantitative analysis consists of a comparison of the carrying value of our reporting units, including goodwill, to the estimated fair value of our reporting units using a discounted cash flow methodology. If step one results in the carrying value of the reporting unit exceeding the fair value of such reporting unit, we would then proceed to step two which would require us to calculate the amount of impairment loss, if any, that we would record for such reporting unit. 

In 2016, Jefferson recorded an impairment of $110 for its technology-related industry accreditation that was no longer in use during the year.

In 2015, due to relocation of Bemag, the company recorded an impairment charge of $404, consisting of $261 and $143 for customer relationship and technology-related industry accreditations, respectively. During the planning of the relocation of the Bemag production to Reynosa, the following was determined: 1- the product offering would be built to the specifications of the Jefferson technology-related industry accreditations, rendering Bemag’s accreditations impaired; and 2 – the move to Reynosa would have an adverse impact on the customers being serviced by Bemag, due to the increase in shipping time from Reynosa versus the shipping time from Farnham, QC. This increase in shipping time would cause customers to order from competitors. Thus, the customer relationships were viewed as impaired and written off.

Changes in the carrying amount of goodwill by reportable segment during the years ended December 31, 2016 and 2015 are as follows:

	T&D			Critical Power
	Solutions			Solutions		Total
	Segment			Segment		Goodwill
Gross Goodwill:
Balance as of January 1, 2015	$	7,703		$	2,879	$	10,582
Additions due to acquisitions		371			—		371
Adjustments		—			91		91
Balance as of December 31, 2015	$	8,074		$	2,970	$	11,044
Accumulated impairment losses:
Balance as of January 1, 2015	$	(976	)	$	—	$	(976	)
No activity		—			—		—
Balance as of December 31, 2015	$	(976	)	$	—	$	(976	)
Net Goodwill	$	7,098		$	2,970	$	10,068
Gross Goodwill:
Balance as of January 1, 2016	$	8,074		$	2,970	$	11,044
Adjustments		(96	)		—		(96	)
Balance as of December 31, 2016	$	7,978		$	2,970	$	10,948
Accumulated impairment losses:
Balance as of January 1, 2016	$	(976	)	$	—	$	(976	)
No activity		—			—		—
Balance as of December 31, 2016	$	(976	)	$	—	$	(976	)
Net Goodwill	$	7,002		$	2,970	$	9,972

As mentioned in Note 1, goodwill of $0.7 million was transferred from Critical Power to T&D Solutions segment due to restructuring.

Changes in intangible asset balances for the years ended December 31, 2016 and 2015 consisted of the following:

	T&D			Critical Power			Total
	Solutions			Solutions			Intangible
	Segment			Segment			Assets
Balance as of January 1, 2015	$	4,644		$	5,147		$	9,791
Additions due to acquisition		2,386			—			2,386
Amortization		(515	)		(1,304	)		(1,819	)
Impairment charges		(404	)		—			(404	)
Foreign currency translation		2			—			2
Balance as of December 31, 2015	$	6,113		$	3,843		$	9,956
Adjustments		62			—			62
Amortization		(506	)		(1,240	)		(1,746	)
Impairment charges		(110	)		—			(110	)
Foreign currency translation		6			—			6
Balance as of December 31, 2016	$	5,565		$	2,603		$	8,168

The components of intangible assets at December 31, 2016 are summarized below:

	Weighted Average Amortization Years		Gross Carrying Amount		Accumulated Amortization			Impairment Charges			Foreign Currency Translation			Net Book Value
Customer relationships		7	$	7,203	$	(3,564	)	$	—		$	—		$	3,639
Non-compete agreements		6		720		(392	)		—			(6	)		322
Trademarks		(a)		2,139		(251	)		—			(73	)		1,815
Distributor territory license		4		474		(237	)		—			—			237
Internally developed software		7		289		(83	)		—			—			206
Developed technology		10		493		(99	)		—			—			394
Technology-related industry accreditations		Indefinite		1,686		—			(110	)		(21	)		1,555
Total intangible assets			$	13,004	$	(4,626	)	$	(110	)	$	(100	)	$	8,168

(a) Includes $1.8 million of trademarks with an indefinite useful life.

Future scheduled annual straight-line amortization expense over the useful lives of finite life intangible assets is as follows:

Years Ending December 31,	Total
2017	$	1,655
2018		1,578
2019		291
2020		266
2021		265
Thereafter		743
	$	4,798