Goodwill and Intangible Assets

6 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill is not amortized but is tested for impairment at least annually, in accordance with the provisions of ASC Topic 350-20-35-1. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. The fair value of a reporting unit is determined using a discounted cash flow methodology. The Company’s reporting units are determined based upon whether discrete financial information is available and reviewed regularly, whether those units constitute a business, and the extent of economic similarities between those reporting units for purposes of aggregation. The Company’s reporting units identified under ASC Topic 350-20-35-33 are at the component level, or one level below the operating segment level as defined under ASC Topic 280-10-50-10 “Segment Reporting - Disclosure.” The Company has four reporting units as of September 30, 2016 and March 31, 2016. Only two of the four reporting units carried goodwill at September 30, 2016 and March 31, 2016. The Duff-Norton reporting unit (which designs, manufactures and sources mechanical and electromechanical actuators and rotary unions) had goodwill of $9,613,000 and $9,627,000 at September 30, 2016 and March 31, 2016, respectively, and the Rest of Products reporting unit (representing the hoist, chain, forgings, and digital power and motion control businesses) had goodwill of $160,791,000 and $161,089,000 at September 30, 2016 and March 31, 2016, respectively. STB, Magnetek, and Ergomatic have been determined to be a part of the Rest of Products reporting unit.

Refer to the 2016 10-K for information regarding our annual goodwill impairment evaluation. Future impairment indicators, such as declines in forecasted cash flows, may cause impairment charges. Impairment charges could be based on such factors as the Company’s stock price, forecasted cash flows, assumptions used, control premiums or other variables. There were no such indicators during the quarter ended September 30, 2016.

Identifiable intangible assets acquired in a business combination are amortized over their estimated useful lives. A summary of changes in goodwill during the three months ended September 30, 2016 is as follows (in thousands):



Balance at April 1, 2016	$	170,716
Currency translation	(312		)
Balance at September 30, 2016	$	170,404

Goodwill is recognized net of accumulated impairment losses of $107,000,000 as of September 30, 2016 and March 31, 2016, respectively. There were no goodwill impairment losses recorded in the three and six month periods ended September 30, 2016 and 2015.

Identifiable intangible assets are summarized as follows (in thousands):



	September 30, 2016							March 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Trademark	$	5,397	$	(2,561	)	$	2,836	$	5,467	$	(2,431	)	$	3,036
Indefinite lived trademark	28,991		—			28,991		29,006		—			$	29,006
Customer relationships	58,346		(12,446		)	45,900		58,535		(10,688		)	47,847
Acquired technology	43,876		(3,225		)	40,651		43,198		(1,873		)	$	41,325
Other	1,604		(688		)	916		1,481		(566		)	915
Total	$	138,214	$	(18,920	)	$	119,294	$	137,687	$	(15,558	)	$	122,129

The Company’s intangible assets that are considered to have finite lives are amortized. The weighted-average amortization periods are 18 years for trademarks, 17 years for customer relationships, 18 years for acquired technology, 8 years for other, and 17 years in total. Trademarks with a book value of $28,991,000 as of September 30, 2016 have an indefinite useful life and are therefore not being amortized.

Total amortization expense was $1,765,000 and $994,000 for the three month periods ended September 30, 2016 and 2015, respectively. Total amortization expense was $3,515,000 and $1,587,000 for the six month periods ended September 30, 2016 and 2015, respectively. The increases relate to amortization of intangible assets acquired in the Magnetek acquisition. Based on the current amount of identifiable intangible assets, the estimated amortization expense is approximately $7,000,000 annually for fiscal years 2017 through 2021.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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