Goodwill and Intangible Assets

The Company’s intangible assets by major asset class subject to amortization as of:



September 30, 2017	Weighted Average Life at September 30,	Original Cost		Accumulated Amortization		Impairment		Currency Translation		Net Book Value
Intangible assets:
Trade name	8 years	$	2,776	$	1,564	$	310	$	19	$	921
Non-compete agreement	5 years	1,600		1,584		—		—		16
Technology asset	5 years	1,869		749		—		50		1,170
Customer relationships	10 years	15,568		8,946		1,979		64		4,707
Total intangible assets		$	21,813	$	12,843	$	2,289	$	133	$	6,814

September 30, 2016
Intangible assets:
Trade name	8 years	$	2,776	$	1,240	$	—	$	9	$	1,545
Non-compete agreement	5 years	1,600		1,547		—		—		53
Technology asset	5 years	1,869		389		—		37		1,517
Customer relationships	10 years	15,568		7,571		—		26		8,023
Total intangible assets		$	21,813	$	10,747	$	—	$	72	$	11,138

The amortization expense on identifiable intangible assets for fiscal 2017 and 2016 was $2,168 and $2,593, respectively.

Amortization expense associated with the identified intangible assets is expected to be as follows:



	Amortization Expense
Fiscal year 2018	$	1,704
Fiscal year 2019	1,539
Fiscal year 2020	1,539
Fiscal year 2021	1,015
Fiscal year 2022	329

Goodwill is not amortized, but is subject to an annual impairment test. The Company tests its goodwill for impairment in the fourth fiscal quarter, and in interim periods if certain events occur indicating that the carrying amount of goodwill may be impaired.

In the third quarter of fiscal 2017, there was a triggering event, which resulted in the Company performing an interim impairment test. Certain qualitative factors, primarily the under-performance relative to projected future operating results for the Alliance reporting unit caused the triggering event. The Company used May 31, 2017, the announcement date of the decision to close Alliance and move its business to its Cleveland reporting unit, as the triggering date to evaluate the carrying values and test for recoverability at the lowest level starting with Alliance's long-lived assets, primarily its machinery and equipment and its identifiable intangible assets. See Note 1, Summary of Significant Accounting Policies - Asset Impairment for further discussion on the long-lived assets impairment test. At the time the announcement was made, it was determined that orders after September 30, 2017 are to be transferred to Cleveland which resulted in the reallocation of $3,493 of goodwill to the Cleveland reporting unit. The Company used the carrying value of the reporting unit, inclusive of the assigned goodwill and to compare to its fair value using the market and income approach to estimate the fair value of this reporting unit. Significant assumptions inherent in the valuation methodologies for goodwill were employed and include, but are not limited to, prospective financial information, growth rates, terminal value and discount rates and required the Company to make certain assumptions and estimates regarding industry economic factors and future profitability of its business. When performing the income and market approach for the reporting unit, SIFCO incorporated the use of projected financial information and a discount rate that was developed using market participant based assumptions. The cash flow projections are based on five-year financial forecasts developed by management that include revenue projections, capital spending trends, and investment in working capital to support anticipated revenue growth. The selected

discount rate considers the risk and nature of the reporting unit's cash flows and ratios of return that market participants would require to invest their capital in our plant.

Although the Company believes its assumptions are reasonable, actual results may vary significantly and may expose the Company to material impairment charges in the future. The methodology for determining fair values was consistent for the periods presented.

Based on this quantitative test performed during the interim test date, it was determined that the fair value (using Level 3 inputs) of this reporting unit exceeded the carrying value. As such there was no goodwill impairment of the Cleveland reporting unit at May 31, 2017.

The Company completed its annual impairment test of goodwill as of July 31, 2017 for the Cleveland and Maniago, Italy ("Maniago") reporting units. Prior year financials included full impairment of goodwill for the Orange, California ("Orange") reporting unit. The Company completed its review using judgment to determine whether to use a qualitative analysis or a quantitative fair value measurement for its goodwill impairment testing. The Company's fair value measurement approach combines the income (discounted cash flow method) and market valuation (market comparable method) techniques for each of the Company’s reporting units that carry goodwill. These valuation techniques use estimates and assumptions including, but not limited to, the determination of appropriate market comparables, projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, and projected future economic and market conditions (Level 3 inputs).

Upon completion of the annual impairment testing for the Maniago reporting unit and the Cleveland reporting unit, it was determined that the fair value of goodwill for the reporting units exceeded the carrying value. As such, no impairment of goodwill existed as of September 30, 2017, compared with $4,164 of goodwill charge related to the Orange reporting unit, which was fully impaired in fiscal 2016. The Orange goodwill impairment was due to not meeting revenue expectations, and in part, to product mix, which resulted in lower margins and related business practices had not come to fruition for cost savings measures undertaken to address increased costs. All of the goodwill was expected to be deductible for tax purposes. Changes in the net carrying amount of goodwill were as follows:



Balance at September 30, 2015	$	16,480
Goodwill adjustment	(589		)
Currency translation	21
Impairment adjustment	$	(4,164	)
Balance at September 30, 2016	$	11,748
Currency translation	422
Balance at September 30, 2017	$	12,170