Goodwill and intangible assets

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Note 5 – Goodwill and intangible assets

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in business combinations accounted for under the purchase method of accounting. For the year ended December 31, 2017, the Company performed the annual goodwill impairment assessment using a qualitative approach to determine whether it was more likely than not that the fair value of goodwill was less than its carrying value. In performing the qualitative assessment, the Company identifies and considers the significance of relevant key factors, events, and circumstances that affect the fair value of its goodwill. These factors include external factors such as macroeconomic, industry, and market conditions, as well as entity-specific factors, such as the Company’s actual and planned financial performance. If the results of the qualitative assessment indicate that it is not more likely than not that the fair value of goodwill exceeds its carrying value, additional quantitative impairment testing is performed.

Based on the results of the impairment assessments of goodwill and other intangible assets performed in 2017, the Company concluded that it was more likely than not that the fair value of its goodwill significantly exceeded the carrying value and that there were no impairment indicators related to intangible assets. The Company determined as of September 30, 2018, that the year to date declines in revenue and operating income, along with the decrease in the Company’s stock price during 2018 represented a triggering event which may require a goodwill impairment test. Based on these indicators, the Company quantitatively evaluated its goodwill for impairment as of September 30, 2018 and determined that goodwill was not impaired.

At September 30, 2018 the Company had $47.8 million of goodwill, of which $46.9 million is attributable to the acquisition of ARI on October 10, 2017.

The Company’s other intangible assets consist of the following:

		September 30, 2018						December 31, 2017
(in thousands)	Amortization	Gross						Gross
	Period	Carrying		Accumulated				Carrying		Accumulated
	(in years)	Amount		Amortization		Net		Amount		Amortization		Net
Intangible assets with determinable lives
Patents	5	$	386	$	379	$	7	$	386	$	374	$	12
Covenant Not to Compete	6 - 10		1,270		591		679		1,270		475		795
Customer Relationships	10 - 12		31,660		3,284		28,376		31,660		1,288		30,372
Above Market Leases	13		567		43		524		567		10		557
Trade Name	2		30		30		-		30		30		-
Licenses	10		1,000		392		608		1,000		317		683
Totals identifiable intangible assets		$	34,913	$	4,719	$	30,194	$	34,913	$	2,494	$	32,419

Amortization expense for the nine months ended September 30, 2018 and 2017 was $2.2 million and $0.4 million, respectively. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. No impairment charges were recognized for the period ended September 30, 2018 and for the year ended December 31, 2017.