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Note 5 - Goodwill and Intangible Assets

9 Months Ended

Sep. 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 lives of the customer relationships were 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 lives of the non-compete agreements were determined to be the length of the non-compete agreements, which range from one to five years. The useful lives of the trade names were 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 September 30, 2022 and December 31, 2021, respectively. The goodwill is deductible for tax purposes.

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

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

	As of September 30, 2022
	Gross Carrying		Accumulated			Intangible Assets,
(in thousands)	Amount		Amortization			Net
Customer relationships - subject to amortization	$	22,559	$	(11,713	)	$	10,846
Covenant not to compete - subject to amortization		509		(284	)		225
Trade name - not subject to amortization		21,368		-			21,368
	$	44,436	$	(11,997	)	$	32,439

	As of December 31, 2021
	Gross Carrying		Accumulated			Intangible Assets,
(in thousands)	Amount		Amortization			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.