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Note 5 - Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Text Block]

5.	*Goodwill and Intangible Assets:*

The Company’s intangible assets were recorded in connection with its acquisitions that occurred between 2011 and 2021. 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 was determined to be between 10 and 15 years, based primarily on the consistent and predictable revenue source associated with the existing customer base, the present value of which extends through the 10- and 15-year amortization periods. The useful life of the non-compete agreements was determined to be the length of the non-compete agreements, which range from one to five years. The useful life of the trade names was 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 their useful life. The Company will continue to evaluate the useful life assigned to its amortizable customer relationships and noncompete agreements in future periods.

Goodwill, by reportable unit, was as follows as of June 30, 2022 and December 31, 2021, respectively. The goodwill is deductible for tax purposes.

(in thousands)	Specialty Metals Flat Products		Carbon Flat Products		Tubular and Pipe Products		Total
Balance as of December 31, 2021	$	9,431	$	1,065	$	-	$	10,496
Acquisitions		-		-		-		-
Impairments		-		-		-		-
Balance as of June 30, 2022	$	9,431	$	1,065	$	-	$	10,496

Intangible assets consisted of the following as of June 30, 2022 and December 31, 2021, respectively:

	As of June 30, 2022
(in thousands)	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net
Customer relationships - subject to amortization	$	22,559	$	(11,326	)	$	11,233
Covenant not to compete - subject to amortization		509		(266	)		243
Trade name - not subject to amortization		21,368		-			21,368
	$	44,436	$	(11,592	)	$	32,844

	As of December 31, 2021
(in thousands)	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net
Customer relationships - subject to amortization	$	22,559	$	(10,552	)	$	12,007
Covenant not to compete - subject to amortization		509		(231	)		278
Trade name - not subject to amortization		21,368		-			21,368
	$	44,436	$	(10,783	)	$	33,653

The Company estimates that amortization expense for its intangible assets subject to amortization will be approximately $1.6 million per year for the next three years, $1.2 million the following year and then $0.7 million for the next year after.