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Note 3 - Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill

The carrying value of goodwill is allocated to reporting units is as follows:

Reporting Units	*September 30, 2020*		*December 31, 2019*
Americas		64,315		64,315
India		15,180		31,000
Malaysia		47,543		47,543
Saudi Arabia		54,840		54,840
South Africa		1,578		5,910
Argentina		4,991		4,991
Australia		8,186		10,742
Total	$	196,633	$	219,341

We perform a goodwill impairment analysis at least annually (in the fourth quarter of each year) unless indicators of impairment exist in interim periods. The Goodwill was allocated to new reporting units using a relative fair value allocation approach. We performed a quantitative assessment to determine if the fair value of each of our reporting units with goodwill exceeded its carrying value.

The assumptions used in the analysis are based on the Company’s internal budget. The Company projected revenue, operating margins and cash flows for a period of five years and applied a perpetual long-term growth rate using discounted cash flows (DCF) method. These assumptions are reviewed annually as part of management’s budgeting and strategic planning cycles. These estimates may differ from actual results. The values assigned to each of the key assumptions reflect the management’s past experience as their assessment of future trends and are consistent with external/internal sources of information.

During the first quarter of 2020, the Company reviewed the carrying value of goodwill due to the events and circumstances surrounding the COVID-19 pandemic. As a result of the recent global economic disruption and uncertainty due to the COVID-19 pandemic, the Company concluded a triggering event had occurred as of March 31, 2020, and accordingly, performed interim impairment testing on the goodwill balances of its reporting units. As quoted market prices are not available for these reporting units, the calculations of their estimated fair values were based on a discounted cash flow model (income approach).

The results of these interim impairment tests indicated that the estimated fair value of the India, South Africa and Australia reporting unit was less than its carrying value. Consequently, a goodwill impairment charge of $15,820, $4,332 and $2,556 was recorded for the India, South Africa and Australia reporting units, respectively.

As of September 30, 2020, based on the qualitative assessment, we concluded there is no additional impairment of goodwill.

The following table presents the changes in goodwill during the period:

	*Amount*
Opening balance, December 31, 2019	$	219,341
Impairment		(22,708	)
Ending balance, September 30, 2020	$	196,633

Intangible Assets

The following table presents our intangible assets as of September 30, 2020:

	*Gross Intangibles*		*Accumulated Amortization*		*Net Intangibles*		*Weighted Average Amortization Period (years)*
Customer relationships	$	66,220	$	14,882	$	51,338		6.5
Brand		49,500		10,484		39,016		7.1
Trademarks		13,210		1,935		11,275		7.5
Other intangibles		2,130		717		1,413		4.9
	$	131,060	$	28,018	$	103,042

During the first quarter of 2020, the Company reviewed the carrying value of its intangible assets due to the events and circumstances surrounding the COVID-19 pandemic. As a result of the recent global economic disruption and uncertainty due to the COVID-19 pandemic, the Company concluded a triggering event had occurred as of March 31, 2020, and accordingly, performed interim impairment testing on the all intangible assets. Based on the results of our analyses, the estimated fair values of the intangibles exceeded the carrying values.

As of September 30, 2020, based on the qualitative assessment, we concluded there is no additional impairment of the Company's intangible assets.

Expected future amortization of intangible assets as of September 30, 2020 is as follows:

Years Ending December 31,	*Amount*
Remainder of 2020	$	2,587
2021		10,350
2022		10,350
2023		10,306
2024		10,252
Thereafter		59,197