Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

8. Goodwill and Other Intangible Assets

Goodwill

Changes in the carrying amount of goodwill, all of which is within the Company’s industrial segment, were as follows:

Balance as of December 31, 2017	$	45,142
Foreign currency impact	(1,077)
Balance as of December 31, 2018	$	44,065
Acquisitions (1)	2,078
Foreign currency impact	(459)
Balance as of December 31, 2019	$	45,684

(1) Refer to Note 3, “Acquisition” for further discussion on the acquisition completed in the second quarter of 2019.

At December 31, 2019 and December 31, 2018, accumulated goodwill impairment losses from continuing operations were $59.1 million, primarily due to $58.8 million related to the Milsco reporting unit.

Fiscal 2019, 2018 and 2017 Impairment Assessments

The Company performed its annual goodwill impairment tests in the fourth quarters of 2019, 2018 and 2017 and determined that the fair value of the industrial reporting unit, the only reporting unit with a recorded goodwill balance, exceeded the carrying value of the reporting unit by over 15% in each year. In connection with the goodwill impairment test, the Company engaged a third-party valuation firm to assist management with determining the fair value estimate for the reporting unit. The fair value of the reporting unit is determined using a weighted average of an income approach primarily based on the Company’s three year strategic plan, a market approach based on implied valuation multiples of public company peer groups for the reporting unit and a market approach based on recent comparable transactions (when available). Each approach was generally deemed equally relevant in determining reporting unit enterprise value, and as a result, weightings of 35 percent, 30 percent and 35 percent, respectively, were used for each. This fair value determination was categorized as Level 3 in the fair value hierarchy.

In connection with obtaining an independent third-party valuation, management provided certain information and assumptions that were utilized in the fair value calculation. Significant assumptions used in determining reporting unit fair value include forecasted cash flows, revenue growth rates, adjusted EBITDA margins, weighted average cost of capital (discount rate), assumed tax treatment of a future sale of the reporting unit, terminal growth rates, capital expenditures, sales and EBITDA multiples used in the market approach, and the weighting of the income and market approaches. A change in any of these assumptions, individually or in the aggregate, or future financial performance that is below management expectations may result in the carrying value of this reporting unit exceeding its fair value, and goodwill and amortizable intangible assets could be impaired.

Other Intangible Assets

The Company’s other amortizable intangible assets - net consisted of the following:

	December 31, 2019						December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Patents	$	2,075	$	(1,368)	$	707	$	2,038	$	(1,018)	$	1,020
Customer relationships	62,490		(20,205)		42,285		61,075		(15,922)		45,153
Trademarks and other intangibles	32,833		(11,235)		21,598		32,124		(8,597)		23,527
Total amortized other intangible assets	$	97,398	$	(32,808)	$	64,590	$	95,237	$	(25,537)	$	69,700

Other amortizable intangible assets are evaluated for potential impairment whenever events or circumstances indicate that the carrying value may not be recoverable. There were no impairment charges recorded in continuing operations related to tangible or intangible assets during 2019, 2018 and 2017.

The approximate weighted average remaining useful lives of the Company’s intangible assets at December 31, 2019 are as follows: patents - 5.9 years; customer relationships - 9.2 years; and trademarks and other intangibles - 8.8 years.

Amortization of intangible assets from continuing operations was $7.4 million, $6.8 million, and $7.0 million for the years ended December 31, 2019, 2018 and 2017, respectively. The Company anticipates the annual amortization for each of the next five years and in aggregate thereafter to be the following:

2020	$	7,765
2021	7,523
2022	7,350
2023	7,341
2024	6,779
Thereafter	27,832
	$	64,590