Note 7 - Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

7.

    

Goodwill and

Intangible Assets

:

The Company’s intangible assets were recorded in connection with its

2018

acquisition of Berlin Metals and its

2011

acquisition of CTI. The intangible assets were evaluated on the premise of highest and best use to a market participant, primarily utilizing the income approach valuation methodology. The useful life of the customer relationships were determined to be

fifteen

years, based primarily on the consistent and predictable revenue source associated with the existing customer base, the present value of which extends through the

fifteen

-year amortization period. The useful life of the trade names were determined to be indefinite primarily due to their history and reputation in the marketplace, the Company’s expectation that the trade names will continue to be used, and the conclusion that there are currently

no

other factors identified that would limit its useful life. The Company will continue to evaluate the useful life assigned to our amortizable customer relationships in future periods.

Goodwill, by reportable segment, was as follows as of

December 31, 2018

and

2017,

respectively. The goodwill is deductible for tax purposes.

(in thousands)	Carbon Flat Products		Specialty Metals Flat Products		Tubular and Pipe Products		Total
Balance as of December 31, 2017	$	-	$	-	$	-	$	-
Acquisitions		-		2,358		-		2,358
Impairments		-		-		-		-
Balance as of December 31, 2018	$	-	$	2,358	$	-	$	2,358

During

2018

and

2017,

a step

zero

test was performed for the indefinitely lived intangible assets and

no

indication of impairment was present.

Intangible assets, net, consisted of the following as of

December 31, 2018

and

2017,

respectively:

	As of December 31, 2018
(in thousands)	Gross Carrying Amount		Acquisitions		Accumulated Amortization			Intangible Assets, Net
Customer relationships - subject to amortization	$	13,332	$	640	$	(6,698	)	$	7,274
Covenant not to compete - subject to amortization		-		157		(42	)		115
Trade names - not subject to amortization		15,425		2,100		-			17,525
	$	28,757	$	2,897	$	(6,740	)	$	24,914

	As of December 31, 2017
(in thousands)	Gross Carrying Amount		Acquisitions		Accumulated Amortization			Intangible Assets, Net
Customer relationships - subject to amortization	$	13,332	$	-	$	(5,777	)	$	7,555
Trade names - not subject to amortization		15,425		-		-			15,425
	$	28,757	$	-	$	(5,777	)	$	22,980

The Company estimates that amortization expense for its intangible assets subject to amortization will be approximately

$1.0

million per year in each of the next

five

years.