Goodwill and Other Intangible Assets

6 Months Ended

Dec. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Note 6.

Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill were as follows ($000):

	Six Months Ended December 31, 2017
	II-VI Laser		II-VI		II-VI Performance
	Solutions		Photonics		Products		Total
Balance-beginning of period	$	84,180	$	113,272	$	52,890	$	250,342
Goodwill acquired		19,670		-		-		19,670
Goodwill adjustment for prior year acquisition - IPI		-		396		-		396
Foreign currency translation		691		1,110		-		1,801
Balance-end of period	$	104,541	$	114,778	$	52,890	$	272,209

The gross carrying amount and accumulated amortization of the Company’s intangible assets other than goodwill as of December 31, 2017 and June 30, 2017 were as follows ($000):

	December 31, 2017							June 30, 2017
	Gross					Net		Gross					Net
	Carrying		Accumulated			Book		Carrying		Accumulated			Book
	Amount		Amortization			Value		Amount		Amortization			Value
Technology and Patents	$	66,947	$	(30,490	)	$	36,457	$	65,438	$	(27,313	)	$	38,125
Trademarks		15,923		(1,406	)		14,517		15,806		(1,340	)		14,466
Customer Lists		127,844		(46,521	)		81,323		123,058		(41,740	)		81,318
Other		1,577		(1,546	)		31		1,571		(1,523	)		48
Total	$	212,291	$	(79,963	)	$	132,328	$	205,873	$	(71,916	)	$	133,957

Amortization expense recorded on the Company’s intangible assets was $3.8 million and $7.4 million for the three and six months ended December 31, 2017, respectively, and was $3.2 million and $6.4 million for the three and six months ended December 31, 2016, respectively.

In conjunction with the acquisition of II-VI Compound Semiconductors Ltd., the Company recorded $0.4 million attributed to the value of technology and patents and $3.6 million of customer lists. The intangibles were recorded based on the Company’s preliminary purchase price allocation utilizing either a discounted cash flow or relief from royalty method to derive the fair value. The valuation is expected to be finalized within one year from the date of acquisition.

Technology and patents are being amortized over a range of 60 to 240 months, with a weighted average remaining life of approximately 95 months. Customer lists are being amortized over a range of approximately 120 to 240 months with a weighted average remaining life of approximately 144 months. The gross carrying amount of trademarks includes $14.1 million of acquired trade names with indefinite lives that are not amortized but tested annually for impairment or more frequently if a triggering event occurs. Included in the gross carrying amount and accumulated amortization of the Company’s intangible assets is the effect of foreign currency translation on that portion of the intangible assets relating to the Company’s German, U.K. and Chinese subsidiaries.

At December 31, 2017, the estimated amortization expense for the existing intangible assets for each of the five succeeding fiscal years is as follows ($000):

Fiscal Year Ending June 30,	Amount
Remaining 2018	$	7,000
2019		14,000
2020		13,000
2021		12,300
2022		10,900

- 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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