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Goodwill and Intangible Assets
 6 Months Ended
Apr. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure [Text Block]
Goodwill:

        In accordance with FASB ASC Topic 350, "Intangibles – Goodwill and Other", goodwill must be reviewed for impairment annually, or more frequently if events and circumstances arise that suggest the asset may be impaired. We conduct our review for goodwill impairment on September 30 of each year. Goodwill impairment testing is performed at the reporting unit level. The fair value is compared to the carrying value including goodwill. If the carrying value exceeds the fair value, then goodwill impairment exists. The impact of COVID-19 developments and uncertainty with respect to the economic effects of the pandemic has introduced significant volatility in the financial markets and is having a widespread adverse effect on the automotive industry, including reductions in consumer demand and OEM automotive production. In response to the COVID-19 pandemic, our key customers temporarily closed nearly all their production facilities in North America, Europe and Asia (our primary markets) over the course of the quarter ended April 30, 2020. As a result, we concluded that an interim test of our goodwill was required. More specifically, the Company concluded that the following events and circumstances, in the aggregate, indicated that it was more likely than not that the carrying value of our North American reporting unit exceeded its fair value: (1) lower forecasted 2020 industry production volumes for North America, including those for our primary North American customers, due to OEM shutdowns to mitigate the spread of COVID-19 and subsequent reduced production levels over the remainder of the year, as compared to our prior production forecasts (including estimates used in our 2019 assessment) and (2) the volatility in financial markets that has lowered median North American automotive market multiples. Based on the
results of our quantitative analysis, we recognized a non-cash goodwill impairment charge equal to the remaining goodwill balance of $21,971 since the carrying value exceeded the fair value of the North American reporting unit by more than the amount of the goodwill balance at April 30, 2020.
        
        We utilized both an income and a market approach, to determine the fair value of the North American reporting unit as part of our goodwill impairment assessment. The income approach is based on projected debt-free cash flow, which is discounted to the present value using discount factors that consider the timing and risk of cash flows. The discount rate used is the weighted average of an estimated cost of equity and of debt (“weighted average cost of capital”). The weighted average cost of capital is adjusted as necessary to reflect risk associated with the business of the North American reporting unit. Financial projections are based on estimated production volumes, product prices and expenses, including raw material cost, wages, energy and other expenses. Other significant assumptions include terminal value cash flow and growth rates, future capital expenditures and changes in future working capital requirements. The market approach is based on the observed share prices of comparable, publicly traded companies. The market approach fair value was determined by multiplying outstanding share capital by the associated market value of the Company’s stock at April 30, 2020. A considerable amount of management judgment and assumptions were required in performing the quantitative impairment test, principally related to determining the fair value of the reporting unit.

        The changes in the carrying amount of goodwill for the nine months ended July 31, 2020 are as follows:
Balance October 31, 2019$22,395 
Impairment(21,971)
Foreign currency translation(424)
Balance July 31, 2020$— 

Intangible Assets:
        
        In accordance with FASB ASC Topic 360, "Property, Plant, and Equipment" (“ASC 360”), we are required to complete impairment testing whenever an event or changes in circumstances indicate the long-lived assets carrying value may not be recoverable. The long-lived assets consist principally of property, plant, equipment, and intangibles. Due to the circumstances surrounding the COVID-19 pandemic and decline in our business it was necessary to test our long-lived assets for impairment as of the interim date of July 31, 2020. In accordance with ASC 360, we tested long-lived assets for impairment at the asset group level for which the lowest level of independent cash flows can be identified. Based on the results of our quantitative analysis, an impairment charge of $4,858 and $104,775 were recorded to intangible assets and property, plant and equipment, respectively as of July 31, 2020.

        The changes in the carrying amount of finite-lived intangible assets for the nine months ended July 31, 2020 are as follows:
Customer RelationshipsDeveloped TechnologyTrade NameTrademarkTotal
Balance October 31, 2019$8,977 $2,979 $1,008 $61 $13,025 
Impairment(3,313)(1,148)(377)(20)(4,858)
Amortization expense(998)(294)(93)(11)(1,396)
Foreign currency translation3 102 — — 105 
Balance July 31, 2020$4,669 $1,639 $538 $30 $6,876 
        Intangible assets are amortized on the straight-line method over their legal or estimated useful lives. The following summarizes the gross carrying value and accumulated amortization for each major class of intangible assets:
July 31, 2020
Weighted Average Useful Life (years)Gross Carrying Value Net of Foreign CurrencyAccumulated AmortizationImpairmentNet
Customer relationships6.2$17,564 $(9,582)$(3,313)$4,669 
Developed technology8.47,236 (4,449)(1,148)1,639 
Trade name7.41,875 (960)(377)538 
Trademark3.0166 (116)(20)30 
$26,841 $(15,107)$(4,858)$6,876 
        Total amortization expense was $514 and $1,538 for the three and nine months ended July 31, 2020, respectively, and $518 and $1,558 for the three and nine months ended July 31, 2019, respectively. A favorable lease asset of $1,458 was acquired as part of the Brabant acquisitions in fiscal year 2018 with a 7-year useful life. Amortization expense for the three and nine months ended July 31, 2020 was $49 and $145, respectively, and is included within the amortization of intangible assets. A net balance of $909 is included within other assets for the favorable lease asset. Amortization expense related to intangible assets and the favorable lease asset is estimated to be as follows: 
Twelve Months Ended July 31,
2021$1,299 
20221,299 
20231,299 
20241,290 
20251,070 
Thereafter1,528 
$7,785