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Note 7 - Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2024

Goodwill and Intangible Assets Disclosure [Text Block]

7.	*Goodwill and Intangible Assets*:

The Company’s intangible assets were recorded in connection with its acquisitions of Metal Works in 2024, CTB and Metal-Fab in 2023, Shaw Stainless & Alloy, Inc. in 2021, Action Stainless & Alloys, Inc. 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, 2024 and December 31, 2023, 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, 2022		1,065		9,431		-		10,496
Acquisitions		33,194		-		8,401		41,595
Impairments		-		-		-		-
Balance as of December 31, 2023	$	34,259	$	9,431	$	8,401	$	52,091
Acquisitions		31,727		-		-		31,727
Impairments		-		-		-		-
Balance as of December 31, 2024	$	65,986	$	9,431	$	8,401	$	83,818

Intangible assets, net, consisted of the following as of December 31, 2024 and 2023, respectively:

	*As of Balance at December 31, 2024*
(in thousands)	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net

Customer relationships - subject to amortization	$	84,459	$	(18,513	)	$	65,946
Covenant not to compete - subject to amortization		3,229		(1,110	)		2,119
Technology and know-how - subject to amortization		8,900		(922	)		7,978
Trade name - not subject to amortization		42,068		-			42,068
	$	138,656	$	(20,545	)	$	118,111

	*As of December 31, 2023*
(in thousands)	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net

Customer relationships - subject to amortization	$	62,559	$	(15,084	)	$	47,475
Covenant not to compete - subject to amortization		2,339		(679	)		1,660
Technology and know-how - subject to amortization		7,000		(382	)		6,618
Trade name - not subject to amortization		36,868		-			36,868
	$	108,766	$	(16,145	)	$	92,621

The useful life of the customer relationships was determined to be ten to 26 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 two to five years. The useful life of the technology and know-how was determined to be 10 to 15 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 2024, a qualitative test was performed for goodwill and the other indefinitely lived intangible assets and no indication of impairment was identified. During 2023, a quantitative 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 $6.1 million per year for the next year, $5.6 million for the next year, $5.1 million for the next year, $4.8 million for the next year, $4.7 million for the next year and then $3.9 million per year thereafter.