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Note 4 - Goodwill and Intangible Assets | 9 Months Ended
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Sep. 30, 2020
Notes to Financial Statements |
Goodwill and Intangible Assets Disclosure [Text Block] |
4. | Goodwill and Intangible Assets
Goodwill Goodwill represents the excess of purchase price over the assigned fair values of the assets and liabilities assumed in conjunction with an acquisition. The changes in the carrying amount of goodwill for the nine months ended September 30, 2020 were as follows (in thousands):
Goodwill, December 31, 2019 |  | $ | - |
Acquisition of Geneva (Note 2) |  |  | 22,985 |
Goodwill, September 30, 2020 |  | $ | 22,985 |
Goodwill is reviewed for impairment annually as of December 31. In testing goodwill for impairment, the Company has the option to perform a qualitative assessment to determine whether the existence of events or circumstances indicate that it is more-likely-than-not (more than 50%) that the fair value of a reporting unit is less than its carrying amount. When performing a qualitative assessment, the Company evaluates factors such as industry and market conditions, cost factors, overall financial performance, and other relevant entity specific events and changes. If the qualitative assessment indicates that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, or if the Company chooses not to perform the qualitative assessment, then a quantitative assessment is performed to determine the reporting unit’s fair value. If the reporting unit’s carrying value exceeds its fair value, then an impairment loss is recognized for the amount of the excess of the carrying amount over the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has occurred which would require interim impairment testing. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and their impact on the Company as well as current market capitalization and forecasts. The Company determined that a triggering event has not occurred which would require an interim impairment test to be performed. Intangible Assets Intangible assets consist of the following (in thousands):
|  | Gross Carrying |  |  | Accumulated |  |  | Intangible |
|  | Amount |  |  | Amortization |  |  | Assets, Net |
As of September 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | $ | 9,409 |  |  | $ | (1,417 | ) |  | $ | 7,992 |
Trade names and trademarks |  |  | 3,225 |  |  |  | (649 | ) |  |  | 2,576 |
Backlog |  |  | 1,041 |  |  |  | (757 | ) |  |  | 284 |
Other |  |  | 327 |  |  |  | (63 | ) |  |  | 264 |
Total |  | $ | 14,002 |  |  | $ | (2,886 | ) |  | $ | 11,116 |
As of December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | $ | 1,378 |  |  | $ | (827 | ) |  | $ | 551 |
Trade names and trademarks |  |  | 1,132 |  |  |  | (452 | ) |  |  | 680 |
Total |  | $ | 2,510 |  |  | $ | (1,279 | ) |  | $ | 1,231 |
During the nine months ended September 30, 2020, intangible assets increased primarily due to the acquisition of Geneva. See Note 2, “Business Combination” for additional information related to this transaction. Intangible assets are amortized using the straight-line method over estimated useful lives ranging from eleven months to 15 years. The estimated amortization expense for each of the next five years and thereafter is as follows (in thousands):
Year ending December 31, |  |  |  |
Remainder of 2020 |  | $ | 599 |
2021 |  |  | 1,262 |
2022 |  |  | 1,262 |
2023 |  |  | 1,171 |
2024 |  |  | 1,015 |
Thereafter |  |  | 5,807 |
Total amortization expense |  | $ | 11,116 |

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