Note

– Goodwill and Other Intangible Assets

The major components of Goodwill and other intangible assets are:

	201 9				201 8
	Historical Cost		Accumulated Amortization		Historical Cost		Accumulated Amortization
Finite-lived intangible assets:
Customer relationships	$	7,832	$	6,301	$	7,833	$	5,514
Technology and drawings		6,749		3,712		6,752		3,417
Other intangibles		2,292		1,151		1,838		1,172
Total finite-lived intangible assets		16,873		11,164		16,423		10,103
Goodwill		27,215		-		27,234		-
Trade names and trademarks		2,072		-		2,631		-
Total	$	46,160	$	11,164	$	46,288	$	10,103

Amortization of intangible assets was

$1.2

million,

$1.2

million and

$1.6

million in

2019,

2018

and

2017,

respectively. Amortization of these intangible assets for

2020

through

2024

is expected to approximate

$0.7

million per year.

Changes in the carrying value of goodwill during the years ended

December

31,

2019

and

2018

are as follows:

	Goodwill
Balance at December 31, 2017		27,551
Acquisitions		-
Impairment		-
Foreign currency		(317	)
Balance at December 31, 2018		27,234
Acquisitions		-
Impairment		-
Foreign currency		(19	)
Balance at December 31, 201 9	$	27,215

For

2019,

the Company used a quantitative analysis for the annual goodwill impairment testing as of

October 1

for its National Pump Company (“National”) reporting unit. The fair value for this reporting unit was estimated using a discounted cash flow model, which considered forecasted cash flows discounted at an estimated weighted-average cost of capital. The forecasted cash flows were based on the Company’s long-term operating plan and a terminal value was used to estimate the cash flows beyond the period covered by the operating plan. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. These analyses require the exercise of significant judgments, including judgments about appropriate discount rates, perpetual growth rates and the timing of expected future cash flows. Sensitivity analyses were performed around these assumptions in order to assess the reasonableness of the assumptions and the resulting estimated fair values.

The result of this goodwill impairment test indicated that

impairment existed at National. The Company’s annual impairment analysis performed as of

October 1, 2019

concluded that National’s fair value exceeded its carrying value by approximately

18%.

A sensitivity analysis was performed for the National reporting unit, assuming a hypothetical

100

basis point decrease in the expected long-term growth rate or a hypothetical

100

basis point increase in the weighted average cost of capital, and both scenarios independently yielded an estimated fair value for the National reporting unit slightly above carrying value. If National fails to experience growth or revises its long-term projections downward, it could be subject to impairment charges in the future. Goodwill relating to the National reporting unit represents

of the Company’s

December 31, 2019

total assets.

For

2019,

for all other reporting units, the Company used a qualitative analysis for goodwill impairment testing as of

October 1.

This qualitative assessment included consideration of current industry and market conditions and circumstances as well as any mitigating factors that would most affect the fair value of the Company and these reporting units. Based on the assessment and consideration of the totality of the facts and circumstances, including the business environment in the

fourth

quarter of

2019,

the Company determined that it was

not

more likely than

not

that the fair value of the Company or these reporting units is less than their respective carrying amounts. As such,

goodwill impairments for these reporting units were recorded for the year ended

December 31, 2019.

During the

third

quarter of

2017,

the decreasing demand for barge pumps for the marine transportation market, driven by low oil prices and overcapacity of inland barges, continued to negatively affect the Bayou City Pump Company (“Bayou”) reporting unit, which led management to reconsider its estimates for future profitability of this reporting unit prior to the

October 1

annual goodwill impairment testing date in

2017.

As such, the Company performed an interim discounted cash flow analysis to test for potential impairment of goodwill pursuant to ASC

350,

“Intangibles – Goodwill and Other.” As a result of this impairment test, the Company concluded that the goodwill was impaired and recorded a non-cash impairment charge of

$0.9

million during the

third

quarter of

2017

which represented the full remaining amount of Bayou’s goodwill. This impairment charge is included in Impairment of goodwill and other intangible assets on the Consolidated Statements of Income.

Other indefinite-lived intangible assets primarily consist of trademarks and trade names. The fair value of these assets is also tested annually for impairment as of

October

or whenever events or changes in circumstances indicate there

may

be a possible permanent loss of value. The fair value of these assets is determined using a royalty relief methodology similar to that employed when the associated assets were acquired, but using updated estimates of future sales, cash flows and profitability. For

2019

and

2018

the fair value of all indefinite lived intangible assets exceeded the respective carrying values.

Finite-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount

may

not

be recovered through future net cash flows generated by the assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future net undiscounted cash flows estimated to be generated by such assets. Based upon our fiscal

2019

and

2018

quantitative and qualitative impairment analyses, except for the risk related to National’s indicated fair value, the Company was

not

aware of any events or changes in circumstances that indicate the carrying value of its finite-lived intangible assets

may

not

be recoverable.