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Goodwill and Intangible Assets, Net | 12 Months Ended
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Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets Goodwill The annual changes in the carrying amount of goodwill, by segment, as of December 31, 2017 and 2018, were as follows, respectively:
(in thousands) | North America |  | Europe |  | Asia Pacific |  | Total
Balance as of January 1, 2017 |  |  |  |  |  |  |
Goodwill | $ | 96,154 |  |  | $ | 51,031 |  |  | $ | 1,375 |  |  | $ | 148,560 |
Accumulated impairment losses | (10,666 | ) |  | (13,415 | ) |  | — |  |  | (24,081 | )
| 85,488 |  |  | 37,616 |  |  | 1,375 |  |  | 124,479 |
Goodwill acquired | 10,066 |  |  | — |  |  | — |  |  | 10,066 |
Foreign exchange | 198 |  |  | 2,472 |  |  | 114 |  |  | 2,784 |
Reclassifications (1) | 3 |  |  | (192 | ) |  | — |  |  | (189 | )
Balance as of December 31, 2017 |  |  |  |  |  |  | 0 |
Goodwill | 106,421 |  |  | 53,311 |  |  | 1,489 |  |  | 161,221 |
Accumulated impairment losses | (10,666 | ) |  | (13,415 | ) |  | — |  |  | (24,081 | )
| 95,755 |  |  | 39,896 |  |  | 1,489 |  |  | 137,140 |
Goodwill acquired | 913 |  |  | — |  |  | — |  |  | 913 |
Foreign exchange | (233 | ) |  | (738 | ) |  | (145 | ) |  | (1,116 | )
Balance as of December 31, 2018 |  |  |  |  |  |  | 0 |
Goodwill | 107,101 |  |  | 52,573 |  |  | 1,344 |  |  | 161,018 |
Accumulated impairment losses | (10,666 | ) |  | (20,102 | ) |  | — |  |  | (30,768 | )
| $ | 96,435 |  |  | $ | 32,471 |  |  | $ | 1,344 |  |  | $ | 130,250 |
(1) During 2017, $3 thousand and $192 thousand was reclassified to other assets, with a corresponding $189 thousand decrease in goodwill related to the CG Visions and MS Decoupe acquisitions. Goodwill Impairment Testing The Company tests goodwill for impairment at the reporting unit level on an annual basis (in the fourth quarter for the Company). The Company also reviews goodwill for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or disposition or relocation of a significant portion of a reporting unit. The reporting unit level is generally one level below the operating segment, which is at the country level, except for the United States, Australia and S&P Clever reporting units. The Company determined that the United States reporting unit includes four components: Northwest United States, Southwest United States, Northeast United States and Southeast United States (collectively, the “U.S. Components”). The Company aggregates the U.S. Components into a single reporting unit because management concluded that they are economically similar and that the goodwill is recoverable from the U.S. Components working in concert. The U.S. Components are economically similar because of a number of factors, including selling similar products to shared customers and sharing assets and services such as intellectual property, manufacturing assets for certain products, research and development projects, manufacturing processes, management of inventory excesses and shortages and administrative services. These activities are managed centrally at the U.S. Components level and costs are allocated among the four U.S. Components. The Company determined that the Australia reporting unit includes three components: Australia, New Zealand, and United Arab Emirates (collectively, the “AU Components”). The Company aggregates the AU Components into a single reporting unit because management concluded that they are economically similar and that the goodwill is recoverable from the AU Components working in concert. The AU Components are economically similar because of a number of factors, including that New Zealand, and United Arab Emirates operate as extensions of their Australian parent company selling similar products and sharing assets and services such as intellectual property, manufacturing assets for certain products, management of inventory excesses and shortages and administrative services. These activities are managed centrally at the AU Components level and costs are allocated among the AU Components. The Company determined that the S&P Clever reporting unit includes ten components: S&P Switzerland, S&P Poland, S&P Austria, S&P The Netherlands, S&P Portugal, S&P Germany, S&P France, Socom, S&P Nordic and S&P Spain (collectively, the "S&P Components”). The Company aggregates the S&P Components into a single reporting unit because management concluded that they are economically similar and that the goodwill is recoverable from the S&P Components working in concert. The S&P Components are economically similar because of a number of factors, including sharing assets and services such as intellectual property, manufacturing assets for certain products, research and development projects, manufacturing processes, management of inventory excesses and shortages and administrative services. These activities are managed centrally at the S&P Components level and costs are allocated among the S&P Components. The Company may first assess qualitative factors related to the goodwill of the reporting unit to determine whether it is necessary to perform an impairment test. If the Company judges that it is more likely than not that the fair value of the reporting unit is greater than the carrying amount of the reporting unit, including goodwill, no further testing is required. This assessment method was not utilized in our 2018 annual goodwill impairment test. For all reporting units, the Company compares the fair value of the reporting unit to its carrying value. The fair value calculation uses both the income approach (discounted cash flow method) and the market approach, equally weighted. If the Company judges that the carrying value of the net assets assigned to the reporting unit, including goodwill, exceeds the fair value of the reporting unit, the Company would record an impairment charge equal to the difference between the implied fair value of the goodwill and the carrying value, not to exceed the goodwill asset's carrying amount. Determining the fair value of a reporting unit, or an indefinite-lived purchased intangible asset, requires significant estimates and assumptions. These estimates and assumptions include revenue growth rates, operating margins and working capital requirements used to calculate projected future cash flows, risk-adjusted discount rates, selected multiples, control premiums and future economic and market conditions (Level 3 fair value inputs). The Company bases its fair value estimates on assumptions that it believes to be reasonable, but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates. Assumptions about a reporting unit’s operating performance in the first year of the discounted cash flow model used to determine whether or not the goodwill related to that reporting unit is impaired are derived from the Company’s budget. The fair value model considers such factors as macro-economic conditions, revenue and expense forecasts, product line changes, material, labor and overhead costs, tax rates, working capital levels and competitive environment. Future estimates, however derived, are inherently uncertain but the Company believes that this is the most appropriate source on which to base its fair value calculations. The Company uses these parameters only to provide a basis for the determination of whether or not the goodwill related to a reporting unit is impaired. No inference whatsoever should be drawn from these parameters about the Company’s future financial performance and they should not be taken as projections or guidance of any kind. The 2018 annual testing of goodwill for impairment resulted in an impairment charge. The carrying value of the Denmark reporting unit exceeded its fair value in an amount that approximated the carrying value of its goodwill, primarily due to the reporting unit not meeting management's pre-tax operating profit objectives. As a result, the Company impaired all of the Denmark reporting unit’s goodwill, which was $6.7 million at December 31, 2018. The 2017 and 2016 annual testing of goodwill for impairment did not result in impairment charges. Amortizable Intangible Assets Intangible assets from acquired businesses are recognized at their estimated fair values at the date of acquisition and consist of patents, unpatented technology, non-compete agreements, trademarks, customer relationships and other intangible assets. Finite-lived intangibles are amortized to expense over the applicable useful lives, ranging from three to 21 years, based on the nature of the asset and the underlying pattern of economic benefit as reflected by future net cash inflows. The Company performs an impairment test of finite-lived intangibles whenever events or changes in circumstances indicate their carrying value may be impaired. The total gross carrying amount and accumulated amortization of definite-lived intangible assets at December 31, 2018 were $53.2 million and $28.8 million, respectively. The aggregate amount of amortization expense of intangible assets for the years ended December 31, 2018, 2017 and 2016 was $6.2 million, $6.0 million and $6.1 million, respectively. The annual changes in the carrying amounts of patents, unpatented technologies, customer relationships and non-compete agreements and other intangible assets subject to amortization for the years ended December 31, 2018 and 2017 were as follows:
(in thousands) | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Patents |  |
Balance at January 1, 2017 | $ | 1,718 |  |  | $ | (528 | ) |  | $ | 1,190 |
Acquisition | 800 |  |  | — |  |  | $ | 800 |
Amortization | — |  |  | (187 | ) |  | (187 | )
Foreign exchange | 2 |  |  | — |  |  | 2 |
Removal of fully amortized assets | (170 | ) |  | 170 |  |  | — |
Balance at December 31, 2017 | 2,350 |  |  | (545 | ) |  | 1,805 |
Amortization | — |  |  | (107 | ) |  | (107 | )
Removal of fully amortized assets | (241 | ) |  | 241 |  |  | — |
Balance at December 31, 2018 | $ | 2,109 |  |  | $ | (411 | ) |  | $ | 1,698 |
(in thousands) | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Unpatented Technology |  |
Balance at January 1, 2017 | $ | 21,162 |  |  | $ | (9,003 | ) |  | $ | 12,159 |
Amortization | — |  |  | (1,976 | ) |  | (1,976 | )
Foreign exchange | 505 |  |  | — |  |  | 505 |
Balance at December 31, 2017 | 21,667 |  |  | (10,979 | ) |  | 10,688 |
Amortization | — |  |  | (2,557 | ) |  | (2,557 | )
Reclassifications (1) | 277 |  |  | — |  |  | 277 |
Foreign exchange | (90 | ) |  | $ | — |  |  | (90 | )
Removal of fully amortized assets | (1,192 | ) |  | 1,192 |  |  | — |
Balance at December 31, 2018 | $ | 20,662 |  |  | $ | (12,344 | ) |  | $ | 8,318 |
(1) Reclassifications in 2018 of $0.3 million in unpatented technology, with a corresponding reduction in other assets related to Technogrout asset acquisition.
(in thousands) | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Non-Compete Agreements, Trademarks and Other |  |
Balance at January 1, 2017 | $ | 6,727 |  |  | (4,100 | ) |  | 2,627 |
Acquisition | 9,260 |  |  | — |  |  | 9,260 |
Amortization | — |  |  | (2,495 | ) |  | (2,495 | )
Foreign exchange | 16 |  |  | — |  |  | 16 |
Removal of fully amortized assets | (3,778 | ) |  | 3,778 |  |  | — |
Balance at December 31, 2017 | 12,225 |  |  | (2,817 | ) |  | 9,408 |
Acquisition | 879 |  |  | — |  |  | 879 |
Amortization | — |  |  | (1,757 | ) |  | (1,757 | )
Reclassifications | (24 | ) |  | — |  |  | (24 | )
Removal of fully amortized asset | (855 | ) |  | 855 |  |  | — |
Balance at December 31, 2018 | $ | 12,225 |  |  | $ | (3,719 | ) |  | $ | 8,506 |
(in thousands) | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Customer Relationships |  |
Balance at January 1, 2017 | $ | 21,217 |  |  | (14,945 | ) |  | 6,272 |
Acquisition | 1,091 |  |  | — |  |  | 1,091 |
Amortization | — |  |  | (1,574 | ) |  | (1,574 | )
Reclassifications(1) | 626 |  |  | — |  |  | 626 |
Foreign exchange | 394 |  |  | — |  |  | 394 |
Removal of fully amortized assets | (5,650 | ) |  | 5,650 |  |  | — |
Balance at December 31, 2017 | 17,678 |  |  | (10,869 | ) |  | 6,809 |
Amortization | — |  |  | (1,430 | ) |  | (1,430 | )
Foreign exchange | (115 | ) |  | — |  |  | (115 | )
Balance at December 31, 2018 | $ | 17,563 |  |  | $ | (12,299 | ) |  | $ | 5,264 |
(1) During 2017, $0.6 million was reclassified to customer relationships with a corresponding $0.6 million decrease in other assets related to the MS Decoupe acquisition. At December 31, 2018, estimated future amortization of intangible assets was as follows: (in thousands)
2019 | $ | 5,319 |
2020 | 5,287 |
2021 | 4,807 |
2022 | 2,928 |
2023 | 2,124 |
Thereafter | 3,321 |
| $ | 23,786 |
Indefinite-Lived Intangible Assets As of December 31, 2018, the only indefinite-lived intangible asset, consisting of a trade name, totaled $0.6 million. Definite-lived and indefinite-lived assets, net, by segment as of December 31, 2018 and 2017 were as follows:
| December 31, 2017
| Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
(in thousands) |  |
Total Intangible Assets |  |
North America | $ | 30,775 |  |  | $ | (13,732 | ) |  | $ | 17,043 |
Europe | 23,762 |  |  | (11,479 | ) |  | 12,283 |
Total | $ | 54,537 |  |  | $ | (25,211 | ) |  | $ | 29,326 |
| At December 31, 2018
| Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
(in thousands) |  |
Total Intangible Assets |  |
North America | $ | 30,825 |  |  | $ | (16,002 | ) |  | $ | 14,823 |
Europe | 22,353 |  |  | (12,774 | ) |  | 9,579 |
Total | $ | 53,178 |  |  | $ | (28,776 | ) |  | $ | 24,402 |

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