Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

Intangible assets are comprised of the following (in thousands):



	December 31, 2017							December 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
Indefinite-lived intangible assets:
Goodwill	$	—	$	—		$	—	$	3,020	$	—		$	3,020
Trademarks	394		—			394		394		—			394
Total	394		—			394		3,414		—			3,414
Finite-lived intangible assets:
Customer relationships	2,097		$	(902	)	1,195		2,097		$	(586	)	1,511
Purchased backlog	1,290		(1,290		)	—		1,290		(1,078		)	212
Total	3,387		(2,192		)	1,195		3,387		(1,664		)	1,723
Total intangible assets	$	3,781	$	(2,192	)	$	1,589	$	6,801	$	(1,664	)	$	5,137

The following table summarizes the activity for Goodwill (in thousands):



	Goodwill
Balance at December 31, 2015	$	1,733
Subtract – KBS goodwill impairment recorded at June 30, 2016 (included in earnings)	(1,733		)
Add - acquisition of EBGL	3,020
Balance at December 31, 2016	3,020
Subtract - EBGL goodwill impairment recorded at June 30, 2017 (included in earnings)	(3,020		)
Balance at December 31, 2017	$	—

The Company performs an annual assessment of goodwill during the second quarter. Since the acquisition of EBGL in 2016, EBGL’s operating results have lagged behind management’s expectations. Rising lumber costs and other factors have resulted in lower-than-expected gross profit margins and net losses. We completed our annual goodwill impairment assessment as of June 30, 2017 and determined that the carrying value of the EBGL goodwill exceeded the estimated fair value by $3.0 million at that date. Accordingly, a goodwill impairment charge of approximately $3.0 million was recorded in the quarter ended June 30, 2017.

We completed a goodwill impairment assessment as of September 30, 2016 and determined that the carrying value of the KBS goodwill exceeded the fair value by $1.7 million at that date. Since the acquisition of KBS in 2014, KBS’s operating results had lagged behind management’s expectations. Despite the implementation of its strategic plans for change at KBS, which had begun to materialize in KBS’s overall operating results, KBS continued to underperform our projected levels of net revenue and net income. Accordingly, we recorded a goodwill impairment charge of approximately $1.7 million in 2016.

Amortization expense amounted to approximately $0.5 million and $0.3 million in 2017 and 2016, respectively. Estimated amortization of purchased intangible assets is as follows over the next five years (in thousands):



2018	$	316
2019	315
2020	315
2021	164
2022	85
Thereafter	—
Total	$	1,195

- 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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