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Note 4 - Goodwill and Intangible Assets | 9 Months Ended
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Sep. 30, 2020
Notes to Financial Statements |
Goodwill and Intangible Assets Disclosure [Text Block] |
( 4 ) | GOODWILL AND INTANGIBLE ASSETS
Goodwill and intangible assets on our balance sheets are the result of our acquisitions of Sigma Systems Corp. ("Sigma") in October 2008, Thermonics, Inc. ("Thermonics") in January 2012 and Ambrell in May 2017. All our goodwill and intangible assets are allocated to our Thermal segment. Goodwill Goodwill totaled $13,738 at both September 30, 2020 and December 31, 2019 and was comprised of the following:
Sigma |  | $ | 1,656 |
Thermonics |  |  | 50 |
Ambrell |  |  | 12,032 |
Total |  | $ | 13,738 |
Intangible Assets Changes in the amount of the carrying value of finite-lived intangible assets for the nine months ended September 30, 2020 are as follows:
Balance - January 1, 2020 |  | $ | 6,944 |
Amortization |  |  | (927 | )
Balance September 30, 2020 |  | $ | 6,017 |
The following tables provide further detail about our intangible assets as of September 30, 2020 and December 31, 2019:
|  | September 30, 2020 |
|  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Carrying Amount |
Finite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | $ | 10,480 |  |  | $ | 4,633 |  |  | $ | 5,847 |
Technology |  |  | 600 |  |  |  | 457 |  |  |  | 143 |
Patents |  |  | 590 |  |  |  | 563 |  |  |  | 27 |
Software |  |  | 270 |  |  |  | 270 |  |  |  | - |
Trade name |  |  | 140 |  |  |  | 140 |  |  |  | - |
Total finite-lived intangible assets |  |  | 12,080 |  |  |  | 6,063 |  |  |  | 6,017 |
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Trademarks |  |  | 6,710 |  |  |  | - |  |  |  | 6,710 |
Total intangible assets |  | $ | 18,790 |  |  | $ | 6,063 |  |  | $ | 12,727 |
|  | December 31, 2019 |
|  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Carrying Amount |
Finite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | $ | 10,480 |  |  | $ | 3,805 |  |  | $ | 6,675 |
Technology |  |  | 600 |  |  |  | 380 |  |  |  | 220 |
Patents |  |  | 590 |  |  |  | 541 |  |  |  | 49 |
Software |  |  | 270 |  |  |  | 270 |  |  |  | - |
Trade name |  |  | 140 |  |  |  | 140 |  |  |  | - |
Total finite-lived intangible assets |  |  | 12,080 |  |  |  | 5,136 |  |  |  | 6,944 |
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Trademarks |  |  | 6,710 |  |  |  | - |  |  |  | 6,710 |
Total intangible assets |  | $ | 18,790 |  |  | $ | 5,136 |  |  | $ | 13,654 |
We generally amortize our finite-lived intangible assets over their estimated useful lives on a straight-line basis, unless an alternate amortization method can be reliably determined. Any such alternate amortization method would be based on the pattern in which the economic benefits of the intangible asset are expected to be consumed. None of our intangible assets have any residual value. Total amortization expense for our finite-lived intangible assets was $307 and $927 for the three months and nine months ended September 30, 2020, respectively, and $312 and $944 for the three months and nine months ended September 30, 2019, respectively. The following table sets forth the estimated annual amortization expense for each of the next five years:
2020 (remainder) |  | $ | 307 |
2021 |  | $ | 1,226 |
2022 |  | $ | 1,167 |
2023 |  | $ | 1,067 |
2024 |  | $ | 980 |
Assessment for Impairment of Goodwill and Long-Lived Assets As discussed in Note 2, goodwill is assessed for impairment annually in the fourth quarter on a reporting unit basis, or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. Long-lived assets are assessed for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. As a result of recent market conditions and trends, including the significant ongoing impact of COVID- 19 on the global economy, we performed a qualitative review of facts and circumstances to determine whether it was more likely than not that our goodwill or long-lived assets were impaired and if, as a result, a quantitative impairment assessment was required to be performed as of September 30, 2020. Our review included identifying and weighting the significant factors that have impacted our business operations in recent months, both positively and negatively. We considered the nature of these factors, including whether they were ongoing and related to our core business and markets, or non-recurring and reflected macro-economic or global events that are not directly related to our core business and markets. As a result of our qualitative review, we determined that is was more likely than not that our goodwill and long-lived assets were not impaired and, therefore, no quantitative assessment for impairment was required and, thus not performed, as of September 30, 2020. During the fourth quarter of 2020, we will perform our annual impairment assessment related to our goodwill. As a result of the ongoing uncertainty surrounding the impact of COVID- 19 on our operations, we may perform additional qualitative reviews of goodwill and long-lived assets for impairment at various points in 2021. There can be no assurance that we will be able to continue to conclude that it is more likely than not that our goodwill and long-lived assets are not impaired. We may determine that we need to perform a quantitative assessment for impairment at some point in the future. Such a quantitative assessment could result in a determination that an impairment exists which would result in recording an impairment charge. The amount of any such impairment charge could be material. Any future impairment charge recorded could materially adversely impact our balance sheet and results of operations and could result in our being unable to borrow funds that would otherwise be available under our revolving credit facility discussed in Note 9.

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