Goodwill and Intangible Assets

3 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

7. Goodwill and Intangible Assets

Goodwill and indefinite lived trademarks are not amortized but are 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 three reporting units as of June 30, 2023 and March 31, 2023. The Duff-Norton reporting unit (which designs, manufactures and sources mechanical and electromechanical actuators and rotary unions) had goodwill of $9,699,000 at June 30, 2023 and March 31, 2023. The Rest of Products reporting unit (representing the hoist, chain, forgings, digital power, motion control, manufacturing, and distribution businesses) had goodwill of $308,075,000 and $306,988,000 at June 30, 2023 and March 31, 2023, respectively. The Precision Conveyance reporting unit (which represents high-precision conveying systems) had goodwill of $414,179,000 and $327,942,000 at June 30, 2023 and March 31, 2023, respectively. The goodwill associated with the fiscal 2024 acquisition of montratec, as described in Note 2, is included in the Precision Conveyance reporting unit.

Refer to the 2023 10-K for information regarding our annual goodwill and indefinite lived trademark 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 three months ended June 30, 2023.

A summary of changes in goodwill during the three months ended June 30, 2023 is as follows (in thousands):


Balance at April 1, 2023	$	644,629
Acquisition of montratec (Refer to Note 2)	85,357
Currency translation	1,967
Balance at June 30, 2023	731,953

Goodwill is recognized net of accumulated impairment losses of $113,174,000 as of June 30, 2023 and March 31, 2023, respectively.

Identifiable intangible assets acquired in a business combination are amortized over their estimated useful lives. Identifiable intangible assets are summarized as follows (in thousands):


	June 30, 2023						March 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Trademark	$	22,466	$	(6,707)	$	15,759	$	19,478	$	(6,315)	$	13,163
Indefinite lived trademark	46,456		—		46,456		46,338		—		46,338
Customer relationships	357,315		(93,806)		263,509		322,658		(88,685)		233,973
Acquired technology	112,673		(29,601)		83,072		96,291		(27,945)		68,346
Other	3,694		(2,949)		745		3,585		(2,868)		717
Total	$	542,604	$	(133,063)	$	409,541	$	488,350	$	(125,813)	$	362,537

The Company’s intangible assets that are considered to have finite lives are amortized. The weighted-average amortization periods are 13 years for trademarks, 17 years for customer relationships, 15 years for acquired technology, 5 years for other, and 16 years in total. Trademarks with a carrying value of $46,456,000 as of June 30, 2023 have an indefinite useful life and are therefore not being amortized.

Total amortization expense was $6,877,000 and $6,535,000 for the three months ended June 30, 2023 and 2022, respectively. The increase in amortization expense is the result of the montratec acquisition and related intangible assets acquired. Based on the current amount of identifiable intangible assets and current exchange rates, the estimated annual amortization expense for each of the succeeding five years is expected to be approximately $30,000,000.