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Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
Goodwill
The Company tests its goodwill and indefinite-lived intangible asset allocated to its reporting units for impairment annually on October 1, or more frequently if events or circumstances indicate that it is more likely than not that the fair value of its reporting units and indefinite-lived intangible asset are less than their carrying amount. The Company has the option to assess goodwill for possible impairment by performing a qualitative analysis to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. A quantitative assessment is performed if the qualitative assessments results in a more-likely-than-not determination or if a qualitative assessment is not performed.
During the third quarter of 2021, the Company identified impairment indicators in the form of significant declines in the stock price of the Company's common shares and corresponding market capitalization. Management considered these declines as indicators that the fair value of the ODR reporting unit may have been below its carrying amount, and the performance of an interim quantitative goodwill impairment assessment was required. In estimating the fair value of the ODR reporting unit, the Company used a combination of the income approach and the market approach. The Company used the income approach’s discounted cash flow method, which applies significant inputs not observable in the public market (Level 3), including estimates and assumptions related to the use of an appropriate discount rate, future cash flows generated from existing work and new awards, projected operating margins and changes in working capital. The Company used the market approach’s comparable company method. The comparable company method evaluates the value of a company using metrics of other businesses of similar size and industry.
As a result of the interim assessment, the Company determined that the fair value of the ODR reporting unit was greater than its respective carrying value. The impairment assessment concluded significant headroom of $33.3 million, or 169%, for the ODR reporting unit. No impairment to goodwill was recorded as a result of the interim assessment. The Company believes the estimates and assumptions used in estimating its reporting units’ fair values are reasonable and appropriate; however, different assumptions and estimates could materially affect the calculated fair value of the ODR reporting unit and the resulting conclusions on impairment of goodwill, which could materially affect the Company’s results of operations and financial position. Additionally, actual results could differ from these estimates and assumptions may not be realized.
In addition, no impairment losses were identified as a result of our qualitative assessments during the year ended December 31, 2020.
The following table summarizes the carrying amount of goodwill associated with the Company's segments for the years ended December 31, 2021 and 2020.
(in thousands)GCRODRTotal
Goodwill as of January 1, 2020$— $6,129 $6,129 
Goodwill as of December 31, 2020— 6,129 6,129 
Goodwill associated with the Jake Marshall Transaction— 5,241 5,241 
Goodwill as of December 31, 2021$— $11,370 $11,370 
Intangible Assets
The Company reviews intangible assets with definite lives subject to amortization whenever events or changes in circumstances (triggering events) indicate that the carrying amount of an asset may not be recoverable. Intangible assets with definite lives subject to amortization are amortized on a straight-line or accelerated basis with estimated useful lives ranging from 1 to 15 years. Events or circumstances that might require impairment testing include the identification of other impaired assets within a reporting unit, loss of key personnel, the disposition of a significant portion of a reporting unit, a significant decline in stock price, or a significant adverse change in the Company’s business climate or regulations affecting the Company.
During the third quarter of 2021, the Company performed a quantitative impairment test on its indefinite-lived intangible assets due to the triggering events described in the goodwill impairment summary above. The fair value of the Company's trade name was estimated using an income approach, specifically known as the relief-from-royalty method. The relief-from-royalty method is based on the hypothetical royalty stream that would be received if we were to license the trade name and was based on expected revenue. As a result of the interim assessment, the Company determined that the fair value of the Company's
indefinite-lived intangible asset was greater than its respective carrying value. The impairment assessment concluded headroom of $1.0 million, or 10%, for the Company's trade name. The Company did not recognize an impairment charge on its indefinite-lived intangible asset for the years ended December 31, 2021 and 2020.
Definite-lived and indefinite-lived intangible assets consist of the following:
(in thousands)Gross
carrying
amount		Accumulated
amortization		Net intangible
assets, excluding goodwill
December 31, 2021
Amortized intangible assets:
Customer relationships – GCR – Jake Marshall$570 $(6)$564 
Customer relationships – ODR – Jake Marshall3,050 (35)3,015 
Customer relationships – ODR – Limbach4,710 (3,475)1,235 
Favorable leasehold interests(1) – Limbach
190 (82)108 
Backlog – GCR – Jake Marshall260 (14)246 
Backlog – ODR – Jake Marshall680 (36)644 
Trade name – Jake Marshall1,150 (15)1,135 
Total amortized intangible assets10,610 (3,663)6,947 
Unamortized intangible assets:
Trade name – Limbach(2)
9,960 — 9,960 
Total unamortized intangible assets9,960 — 9,960 
Total amortized and unamortized assets, excluding goodwill$20,570 $(3,663)$16,907 
                                                                                                        
(1)    During the first quarter of 2021, the Company reduced the gross carrying amount and accumulated amortization associated with its favorable leasehold interests intangible asset by $0.3 million due to the lease termination of its Western Pennsylvania office associated with the intangible asset.
(2)    The Company has determined that its trade name has an indefinite useful life. The Limbach trade name has been in existence since the Company’s founding in 1901 and therefore is an established brand within the industry.
(in thousands)Gross
carrying
amount		Accumulated
amortization		Net intangible
assets, excluding goodwill
December 31, 2020(1)
Amortized intangible assets:
Customer relationships – ODR – Limbach$4,710 $(3,112)$1,598 
Favorable leasehold interests – Limbach530 (407)123 
Total amortized intangible assets5,240 (3,519)1,721 
Unamortized intangible assets:
Trade name – Limbach9,960 — 9,960 
Total unamortized intangible assets9,960 — 9,960 
Total amortized and unamortized assets, excluding goodwill$15,200 $(3,519)$11,681 
(1) The Backlog - GCR - Limbach intangible asset previously shown at December 31, 2020 has been fully amortized. Accordingly, its gross carrying amount of $4.8 million and corresponding accumulated amortization of $4.8 million have been removed from the table.
Total amortization expense for these amortizable intangible assets was $0.5 million and $0.6 million for the years ended December 31, 2021 and 2020, respectively.
The estimated remaining useful lives of definite-lived intangible assets are as follows:
Intangible AssetAmortization MethodEstimated Remaining Useful
Life (Years)
Customer relationships – GCR – Jake MarshallStraight line7.0
Customer Relationships – ODR – LimbachPattern of economic benefit9.0
Customer Relationships – ODR – Jake MarshallStraight line7.5
Favorable Leasehold Interests – LimbachStraight line7.2
Backlog – GCR – Jake MarshallStraight line1.5
Backlog – ODR – Jake MarshallStraight line1.5
Trade name – Jake MarshallStraight line6.1
Estimated amortization expense is as follows for the years ending December 31:
(in thousands)Estimated Amortization Expense
2022$1,567 
20231,211 
2024867 
2025830 
2026800 
2027 and thereafter1,672 
Total$6,947