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Note 6 - Goodwill and Intangible Assets | 9 Months Ended
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Sep. 30, 2023
Notes to Financial Statements |
Goodwill and Intangible Assets Disclosure [Text Block] |
6. | Goodwill and Intangible Assets:
The Company’s intangible assets were recorded in connection with its acquisitions of Shaw Stainless & Alloy, Inc. (Shaw) in 2021, Action Stainless & Alloys, Inc. (Action Stainless) in 2020 and Berlin Metals, LLC in 2018 for the specialty metals flat products segment and Metal-Fab in 2023 and certain assets related to the manufacturing of the EZ Dumper® hydraulic dump inserts and McCullough Industries in 2019 for the carbon flat products segment. 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 September 30, 2023 and December 31, 2022, respectively. The goodwill is deductible for tax purposes.
|  | Specialty Metals |  |  | Carbon Flat |  |  |  |  |
(in thousands) |  | Flat Products |  |  | Products |  |  | Total |
Balance as of December 31, 2022 |  | $ | 9,431 |  |  | $ | 1,065 |  |  | $ | 10,496 |
Acquisitions |  |  | - |  |  |  | 33,194 |  |  |  | 33,194 |
Impairments |  |  | - |  |  |  | - |  |  |  | - |
Balance as of September 30, 2023 |  | $ | 9,431 |  |  | $ | 34,259 |  |  | $ | 43,690 |
Intangible assets, net, consisted of the following as of September 30, 2023 and December 31, 2022, respectively:
|  | As of September 30, 2023 |
|  | Gross Carrying |  |  | Accumulated |  |  | Intangible Assets, |
(in thousands) |  | Amount |  |  | Amortization |  |  | Net |
Customer relationships - subject to amortization |  | $ | 59,059 |  |  | $ | (14,313 | ) |  | $ | 44,746 |
Covenant not to compete - subject to amortization |  |  | 1,949 |  |  |  | (570 | ) |  |  | 1,379 |
Technology and know-how - subject to amortization |  |  | 5,300 |  |  |  | (265 | ) |  |  | 5,035 |
Trade name - not subject to amortization |  |  | 32,868 |  |  |  | - |  |  |  | 32,868 |
|  | $ | 99,176 |  |  | $ | (15,148 | ) |  | $ | 84,028 |
|  | As of December 31, 2022 |
|  | Gross Carrying |  |  | Accumulated |  |  | Intangible Assets, |
(in thousands) |  | Amount |  |  | Amortization |  |  | 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 |
The Company estimates that amortization expense for its intangible assets subject to amortization will be approximately $3.7 million per year for the next two years, $3.2 million the following year and then $2.7 million and $2.4 million, respectively, for the next two years after.

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