GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Nov. 01, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

Our goodwill balance and changes in the carrying amount of goodwill by operating segment are as follows (in thousands):



	Metal Coil Coating		Metal Components		Engineered Building Systems		Total
Balance as of November 2, 2014 and November 3, 2013	$	—	$	70,026	$	5,200	$	75,226
Additions	—		73,571		9,110		82,681
Impairment	—		—		—		—
Other, net	—		119		—		119
Balance as of November 1, 2015	$	—	$	143,716	$	14,310	$	158,026

On January 16, 2015, we completed the CENTRIA Acquisition. The purchase price is subject to a post-closing adjustment to net working capital as provided in the Interest Purchase Agreement. This transaction resulted in preliminary goodwill of $82.7 million as the transaction was expected to strengthen our position as a fully integrated supplier to the nonresidential building products industry, providing our customers a comprehensive suite of building products. The preliminary goodwill was allocated to the metal components segment and engineered building systems segment based on expected synergies that the Company believes the segments will derive from the acquisition.

On June 22, 2012, we completed the acquisition of Metl-Span LLC (“Metl-Span”), a Texas limited liability company (the "Metl-Span Acquisition”). Effective October 29, 2012, Metl-Span merged with and into NCI Group, Inc., with NCI Group, Inc. being the lone survivor. The purchase price was subject to a post-closing adjustment based on Metl-Span’s cash, working capital, indebtedness, transaction expenses and accrued employee bonuses at closing. As a result, the fair value of certain assets acquired and liabilities assumed were finalized during fiscal 2013, resulting in goodwill of $70.0 million that was recorded in our metal components segment.

In accordance with ASC Topic 350, Intangibles — Goodwill and Other, goodwill is tested for impairment at least annually at the reporting unit level, which is defined as an operating segment or a component of an operating segment that constitutes a business for which financial information is available and is regularly reviewed by management. Management has determined that we have six reporting units for the purpose of allocating goodwill and the subsequent testing of goodwill for impairment. Our metal components segment has four reporting units and our engineered building systems segment has two reporting units for the purpose of allocating goodwill.

At the beginning of the fourth quarter of each fiscal year, we perform an annual impairment assessment of goodwill and indefinite-lived intangible assets. Additionally, we assess goodwill and indefinite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the fair value may be below the carrying value. We completed our annual impairment assessment of goodwill and indefinite-lived intangible assets in the fourth quarter of fiscal 2015 and we elected to apply the qualitative assessment for the goodwill in certain of our reporting units within the metal components segment and the engineered building systems segment as of August 3, 2015. We also applied the qualitative assessment for the indefinite-lived intangible assets within the metal components and engineered building systems segments as of August 3, 2015. Under the qualitative assessment, various events and circumstances (or factors) that would affect the estimated fair value of a reporting unit are identified (similar to impairment indicators above). These factors are then classified by the type of impact they would have on the estimated fair value using positive, neutral, and negative categories based on current business conditions. Additionally, an assessment of the level of impact that a particular factor would have on the estimated fair value is determined using relative weightings. Additionally, the Company considers the results of the most recent two-step quantitative impairment test completed for a reporting unit and compares the weighted average cost of capital (WACC), publicly traded company multiples and observable and recent transaction multiples between the current and prior years for a reporting unit. Based on our assessment of these tests, we do not believe it is more likely than not that the fair value of the reporting units or the indefinite-lived intangible assets are less than their respective carrying amounts.

We performed a quantitative impairment test for certain of our reporting units within the metal components segment and the engineered building systems segment during the fourth quarter of fiscal 2015. We estimate the fair value of a reporting unit using projected discounted cash flows and publicly traded company multiples. To develop the projected cash flows associated with the reporting units, we considered key factors that include assumptions regarding sales volume and prices, capital expenditures, working capital changes and discount rates. We discount the projected cash flows using a long-term, risk-adjusted weighted-average cost of capital, which was based on our estimate of the investment returns that market participants would require for a reporting unit. We consider publicly traded company multiples for companies with operations similar to a reporting unit. Based on our completion of these tests, we determined that the fair values of the reporting units exceeded their carrying values.

The following table represents all our intangible assets activity for the fiscal years ended November 1, 2015 and November 2, 2014 (in thousands):



	Range of Life (Years)			November 1, 2015			November 2, 2014
Amortized intangible assets:
Cost:
Trade names		15		$	29,167		$	15,187
Customer lists and relationships	12	–	20	136,210			30,310
Non-competition agreements	5	–	10	8,132			8,132
Supplier relationships		3		150			150
Backlog		0.75		8,400			—
				$	182,059		$	53,779
Accumulated amortization:
Trade names				$	(6,824	)	$	(5,073	)
Customer lists and relationships				(15,613		)	(9,040		)
Non-competition agreements				(8,132		)	(8,081		)
Supplier relationships				(150		)	(117		)
Backlog				(8,400		)	—
				$	(39,119	)	$	(22,311	)
Net book value				$	142,940		$	31,468
Indefinite-lived intangible assets:
Trade names				$	13,455		$	13,455
Total intangible assets at net book value				$	156,395		$	44,923

The Star and Ceco trade name assets have an indefinite life and are not amortized, but are reviewed annually and tested for impairment. These trade names were determined to have indefinite lives due to the length of time the trade names have been in place, with some having been in place for decades. Our intention is to maintain these trade names indefinitely.

All other intangible assets are amortized on a straight-line basis or a basis consistent with the expected future cash flows over their expected useful lives. As of November 1, 2015 and November 2, 2014, the weighted average amortization period for all our intangible assets was 18.2 years. Amortization expense of intangibles was $16.9 million, $4.1 million and $4.1 million for fiscal 2015, 2014 and 2013, respectively. We expect to recognize amortization expense over the next five fiscal years as follows (in thousands):



2016	$	9,620
2017	9,620
2018	9,620
2019	9,620
2020	9,327

In accordance with ASC Topic 350, Intangibles — Goodwill and Other, we evaluate the remaining useful life of intangible assets on an annual basis. We also review finite-lived intangible assets for impairment when events or changes in circumstances indicate the carrying values may not be recoverable in accordance with ASC Topic 360, Property, Plant and Equipment.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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