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Note 8 - Goodwill and Intangible Assets | 12 Months Ended
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Dec. 31, 2022
Notes to Financial Statements |
Goodwill and Intangible Assets Disclosure [Text Block] |
8. | Goodwill and Intangible Assets:
The Company’s intangible assets were recorded in connection with its acquisitions of Shaw in 2021, Action Stainless in 2020, EZ Dumper® hydraulic dump inserts and McCullough Industries in 2019, Berlin Metals, LLC in 2018 and Chicago Tube and Iron (CTI) in 2011. The intangible assets were evaluated on the premise of highest and best use to a market participant, primarily utilizing the income approach valuation methodology. Goodwill, by reportable unit, was as follows as of December 31, 2022 and December 31, 2021, respectively. The goodwill is deductible for tax purposes.
(in thousands) |  | Carbon Flat Products |  |  | Specialty Metals Flat Products |  |  | Tubular and Pipe Products |  |  | Total |
Balance as of December 31, 2020 |  | $ | 1,065 |  |  | $ | 4,058 |  |  | $ | - |  |  | $ | 5,123 |
Acquisitions |  |  | - |  |  |  | 5,373 |  |  |  | - |  |  |  | 5,373 |
Impairments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Balance as of December 31, 2021 |  |  | 1,065 |  |  |  | 9,431 |  |  |  | - |  |  |  | 10,496 |
Acquisitions |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Impairments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Balance as of December 31, 2022 |  | $ | 1,065 |  |  | $ | 9,431 |  |  | $ | - |  |  | $ | 10,496 |
Intangible assets, net, consisted of the following as of December 31, 2022 and 2021, respectively:
|  | As of December 31, 2022 |
(in thousands) |  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Intangible Assets, Net |
Customer relationships - subject to amortization |  | $ | 22,559 |  |  | $ | (12,100 | ) |  | $ | 10,459 |
Covenant not to compete - subject to amortization |  |  | 509 |  |  |  | (301 | ) |  |  | 208 |
Trade name - not subject to amortization |  |  | 21,368 |  |  |  | - |  |  |  | 21,368 |
|  | $ | 44,436 |  |  | $ | (12,401 | ) |  | $ | 32,035 |
|  | 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 useful life of the customer relationships was determined to be ten to 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 amortization period. 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. During 2022 and 2021, a qualitative test was performed for goodwill and the other indefinitely lived intangible assets and no indication of impairment was identified. 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 for the next year and $0.7 million per year thereafter.

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