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Goodwill and Other Intangible Assets, Net
 12 Months Ended
Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets, Net Goodwill and Other Intangible Assets, Net
 
Goodwill
 
As of June 30, 2020, the Company had five reporting units with goodwill recorded. Goodwill associated with the SAO reporting unit is tested at the SAO segment level and represents approximately 67 percent of total goodwill. All other goodwill is associated with the PEP segment, which includes four reporting units with goodwill recorded. The fair value is estimated using a discounted cash flow technique for the Additive reporting unit. The fair value is estimated using a weighting of discounted cash flows and the use of market multiples valuation techniques for the SAO reporting unit and remaining three PEP segment reporting units.

The Company conducts goodwill impairment testing at least annually as of June 30, or more often if events, changes or circumstances indicate that the carrying amount may not be recoverable. The Company has experienced slower than expected growth in the additive manufacturing industry with the effects being further compounded by the COVID-19 pandemic. Given current market conditions, the speed of growth in the future projections for the Company's Additive reporting unit were lowered. The Company determined the goodwill associated with this reporting unit was impaired and recorded an impairment charge of $34.6 million during the fiscal year ended June 30, 2020.

As of June 30, 2020, the carrying value of the Additive reporting unit was greater than the fair value by approximately 24.1 percent. The goodwill recorded as of June 30, 2020, after the impairment charge, related to the Additive reporting unit was $45.6 million. For purposes of the discounted cash flow analysis for Additive’s fair value, the Company used a weighted average cost of capital of 17 percent and a terminal growth rate assumption of 3 percent. If the fair value of this reporting unit had been hypothetically reduced by 5 percent at June 30, 2020, the Additive reporting unit would have a carrying value in excess of fair value of approximately $5.4 million.

As of June 30, 2020, the fair value of the SAO reporting unit exceeded the carrying value by approximately 4.5 percent. The goodwill recorded related to the SAO reporting unit as of June 30, 2020 was $195.5 million. For purposes of the discounted cash flow analysis for SAO’s fair value, the Company used a weighted average cost of capital of 10.5 percent and a terminal growth rate assumption of 3 percent. If the fair value of this reporting unit had been hypothetically reduced by 5 percent at June 30, 2020, the SAO reporting unit would have a fair value that approximates net book value.

The fair values of the remaining PEP segment reporting units exceeded their carrying values, in each case, by 10 percent or more and the Company has determined there was no goodwill impairment for the other reporting units for the years ended June 30, 2020 and 2019. The Company continuously monitors for events and circumstances that could negatively impact the key assumptions in determining fair value of the reporting units. Given the evolving nature of and uncertainty driven by the COVID-19 pandemic, the Company will continue to evaluate the impact on the reporting units as adverse changes to these assumptions could result in future impairments.

The changes in the carrying amount of goodwill by reportable segment for fiscal years 2020 and 2019 were as follows:
 
($ in millions)
 
June 30, 2018
 
Acquisition
 
June 30, 2019
 
Impairment
 
Other
 
June 30, 2020
Goodwill
 
$
315.9

 
$
57.7

 
$
373.6

 
$
—

 
$
(1.4
)
 
$
372.2

Accumulated impairment losses
 
(47.2
)
 
—

 
(47.2
)
 
(34.6
)
 
—

 
(81.8
)
Total goodwill
 
$
268.7

 
$
57.7

 
$
326.4

 
$
(34.6
)
 
$
(1.4
)
 
$
290.4

 
 
 
 
 
 
 
 
 
 
 
 
 
Specialty Alloys Operations
 
$
195.5

 
$
—

 
$
195.5

 
$
—

 
$
—

 
$
195.5

Performance Engineered Products
 
73.2

 
57.7

 
130.9

 
(34.6
)
 
(1.4
)
 
94.9

Total goodwill
 
$
268.7

 
$
57.7

 
$
326.4

 
$
(34.6
)
 
$
(1.4
)
 
$
290.4


 
Other Intangible Assets, Net
 
 
 
 
 
June 30, 2020
 
June 30, 2019
($ in millions)
 
Useful Life
(in Years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Impairment
 
Net Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net Carrying
Amount
Trademarks and trade names
 
15 - 30
 
$
33.5

 
$
(25.4
)
 
$
(1.5
)
 
6.6

 
$
33.5

 
$
(24.3
)
 
$
9.2

Customer relationships
 
10 - 15
 
76.9

 
(41.2
)
 
(1.2
)
 
34.5

 
76.9

 
(36.0
)
 
40.9

Non-compete agreements
 
5
 
0.2

 
(0.1
)
 
(0.1
)
 
—

 
0.2

 
(0.1
)
 
0.1

Technology
 
15
 
7.3

 
(1.5
)
 
(4.5
)
 
1.3

 
7.3

 
(1.0
)
 
6.3

Patents
 
14 - 20
 
11.4

 
(1.7
)
 
—

 
9.7

 
11.4

 
(0.7
)
 
10.7

Total
 
 
 
$
129.3

 
$
(69.9
)
 
$
(7.3
)
 
$
52.1

 
$
129.3

 
$
(62.1
)
 
$
67.2


 

The Company recorded $8.3 million of amortization expense related to intangible assets during fiscal year 2020, $7.3 million during fiscal year 2019 and $6.8 million during fiscal year 2018. The estimated annual amortization expense related to intangible assets for each of the succeeding five fiscal years is $6.8 million in fiscal years 2021, 2022, 2023, 2024 and 2025.

As a result of targeted cost reduction activities, the Company approved a plan to exit the oil and gas business and closed two powder facilities in the PEP segment. As a result, the Company recorded an impairment charge of $7.3 million related to definite lived intangible assets during fiscal year 2020. There is no remaining carrying value for these assets as of June 30, 2020.