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Note 6 - Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2023

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.