Goodwill and Other Intangible Assets

The Company performed the first step of the impairment test as of the first day of the fiscal 2018 fourth quarter by calculating the fair value of the reporting units and comparing it against its carrying amount. The Company estimated the fair value of its reporting units by considering both an income approach and a market approach to valuation. The income approach to valuation used the Company’s estimates of the future cash flows of the reporting unit discounted to their net present value applying a discount rate determined using the capital asset pricing model and adjusted for the forecast risk inherent in the Company’s projections of future cash flows. The income approach to valuation is dependent on inputs from management such as expected revenue growth, profitability, capital expenditures and working capital requirements. The market approach to valuation used the market capitalization of public companies similar to the reporting unit to calculate an implied EBITDA multiple. The Company applied that calculated EBITDA multiple to the expected EBITDA of the reporting unit to estimate the fair value of the reporting unit. Both of these approaches to estimating the fair value of the unit use inputs that are considered “Level 3” inputs to the fair value estimate (see Note 15 for a definition of Level 3 valuation inputs within the fair value hierarchy). The Company equally weighted the results of the income approach and the market approach to arrive at the estimated fair value of the reporting units.

After completing the impairment test, the Company determined that the carrying value of the instrumentation reporting unit exceeded the fair value and recorded an impairment charge of $2.5 million. The impairment was primarily from lower margins on the forecasted projections due to product mix related to the Pacific acquisition. The impairment test for the remaining reporting units resulted in the fair value exceeding the carrying value, passing the quantitative impairment test. The Company's analysis in 2017 and 2016 resulted in the fair value exceeding the carrying value for all reporting units.

The determination of the fair value of the reporting unit and the allocation of that value to individual assets and liabilities within the reporting unit requires the Company to make significant estimates and assumptions. These estimates and assumptions include the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industries in which the Company competes, the discount rate, terminal growth rates, and forecasts of revenue, operating income, depreciation and amortization, and capital expenditures.

Due to the inherent uncertainty involved in making these estimates, actual financial results could differ from those estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting unit or the amount of the goodwill impairment charges.

The change in the carrying amount of goodwill by segment is as follows (in thousands):



	Total		Weighing and Control Systems Segment			Foil Technology Products Segment
			KELK Acquisition		Stress-Tek Acquisition	Pacific Instruments
Balance at January 1, 2017	18,717		6,364		6,311	6,042
Foreign currency translation adjustment	464		464		—	—
Balance at December 31, 2017	19,181		6,828		6,311	6,042
Impairment charges	(2,500	)	—		—	(2,500	)
Foreign currency translation adjustment	(540	)	(540	)	—	—
Balance at December 31, 2018	16,141		6,288		6,311	3,542

Intangible assets were as follows (in thousands):



	December 31,
	2018			2017
Intangible assets subject to amortization
(Definite-lived):
Patents and acquired technology	$	9,067		$	9,439
Customer relationships	20,941			21,810
Trade names	1,674			1,693
Non-competition agreements	11,820			12,084
	43,502			45,026
Accumulated amortization:
Patents and acquired technology	(4,103		)	(3,839		)
Customer relationships	(10,399		)	(9,657		)
Trade names	(1,674		)	(1,688		)
Non-competition agreements	(11,748		)	(11,850		)
	(27,924		)	(27,034		)
Net intangible assets subject to amortization	$	15,578		$	17,992

Intangible assets not subject to amortization
(Indefinite-lived):
Trade names	2,078			2,483
	$	17,656		$	20,475

Certain intangible assets are subject to foreign currency translation.

The Company performed an impairment test on the indefinite-lived trade names as of the first day of the fiscal 2018 fourth quarter and determined there was an impairment and recorded an impairment charge of $0.3 million related to the Pacific acquisition. The impairment was primarily from lower margins on the forecasted projections due to product mix. The value of the trade names was determined using an income approach, where the Company estimated the future cash flows associated with the trade names and discounted those cash flows back to their net present value. Due to the decline in cash flows as a result of the lower margins, the Company reduced the royalty rate, under the relief of royalty method, when performing the income approach valuation.

The Company's annual impairment test on the indefinite-lived trade names in 2017 and 2016 resulted in no impairment.

Amortization expense was $1.7 million, $1.9 million, and $1.8 million, for the years ended December 31, 2018, 2017, and 2016, respectively.

Estimated annual amortization expense for each of the next five years is as follows (in thousands):



2019	$	1,530
2020	1,499
2021	1,450
2022	1,449
2023	1,349