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Goodwill and Intangibles | 12 Months Ended
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Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND INTANGIBLES | GOODWILL AND INTANGIBLES The changes in the carrying amount of goodwill for both the Service Center Based Distribution segment and the Fluid Power & Flow Control segment for the years ended June 30, 2020 and 2019 are as follows:
| Service Center Based Distribution |  |  | Fluid Power & Flow Control |  |  | Total |
Balance at July 1, 2018 | $ | 203,084 |  |  | $ | 443,559 |  |  | $ | 646,643 |
Goodwill acquired during the year | 9,943 |  |  | 4,798 |  |  | 14,741 |
Other, primarily currency translation | 607 |  |  | — |  |  | 607 |
Balance at June 30, 2019 | 213,634 |  |  | 448,357 |  |  | 661,991 |
Goodwill adjusted/acquired during the year | (3,393 | ) |  | 14,667 |  |  | 11,274 |
Impairment | — |  |  | (131,000 | ) |  | (131,000 | )
Other, primarily currency translation | (1,671 | ) |  | — |  |  | (1,671 | )
Balance at June 30, 2020 | $ | 208,570 |  |  | $ | 332,024 |  |  | $ | 540,594 |
During the first quarter of fiscal 2020, the Company recorded an adjustment to the preliminary estimated fair value of intangible assets related to the MilRoc/Woodward acquisition. The fair values of the customer relationships, trade name, and other intangible assets were increased by $1,524, $1,809, and $60, respectively, with a corresponding total decrease to goodwill of $3,393. The changes to the preliminary estimated fair values resulted in an increase to amortization expense of $303 during the year ended June 30, 2020, which is recorded in selling, distribution, and administrative expense on the statements of consolidated income. During the second quarter of fiscal 2020, the Company recorded an adjustment to the preliminary estimated fair value of intangible assets related to the Olympus acquisition. The trade name and other intangible assets were increased by $4,260 and $980, respectively, with a corresponding decrease to the customer relationship intangible asset of $5,504 and an increase to goodwill of $264. The changes to the preliminary estimated fair values resulted in a decrease to amortization expense of $24 during the year ended June 30, 2020, which is recorded in selling, distribution, and administrative expense on the statements of consolidated income. The Company has eight (8) reporting units for which an annual goodwill impairment assessment was performed as of January 1, 2020. The Company concluded that seven (7) of the reporting units’ fair values exceeded their carrying amounts by at least 10% as of January 1, 2020. Specifically, the Canada reporting unit's fair value exceeded its carrying value by 12%, and the Mexico reporting unit's fair value exceeded its carrying value by 14%. The Canada and Mexico reporting units have goodwill balances of $27,186 and $5,185, respectively, as of June 30, 2020. The carrying value of the final reporting unit, which is comprised of the FCX operations, exceeded the fair value, resulting in goodwill impairment of $131,000. The non-cash impairment charge is the result of the overall decline in the industrial economy, specifically slower demand in FCX's end markets. This has led to reduced spending by customers and reduced revenue expectations. The remaining goodwill for the FCX reporting unit as of June 30, 2020 is $309,012. Because the carrying value of the FCX reporting unit approximated fair value of the reporting unit after the impairment was recorded, a future decline in the estimated cash flows could result in an additional impairment loss. A future decline in the estimated cash flows could result from a significant or extended decline in various end markets. The fair values of the reporting units in accordance with the goodwill impairment test were determined using the income and market approaches. The income approach employs the discounted cash flow method reflecting projected cash flows expected to be generated by market participants and then adjusted for time value of money factors, and requires management to make significant estimates and assumptions related to forecasts of future revenues, earnings before interest, taxes, depreciation, and amortization (EBITDA), and discount rates. The market approach utilizes an analysis of comparable publicly traded companies and requires management to make significant estimates and assumptions related to the forecasts of future revenues, EBITDA, and multiples that are applied to management’s forecasted revenues and EBITDA estimates. The techniques used in the Company's impairment test have incorporated a number of assumptions that the Company believes to be reasonable and to reflect known market conditions at the measurement date. Assumptions in estimating future cash flows are subject to a degree of judgment. The Company makes all efforts to forecast future cash flows as accurately as possible with the information available at the measurement date. The Company evaluates the appropriateness of its assumptions and overall forecasts by comparing projected results of upcoming years with actual results of preceding years. Key assumptions (Level 3 in the fair value hierarchy) relate to pricing trends, inventory costs, customer demand, and revenue growth. A number of benchmarks from independent industry and other economic publications were also used. Changes in future results, assumptions, and estimates after the measurement date may lead to an outcome where additional impairment charges would be required in future periods. Specifically, actual results may vary from the Company’s forecasts and such variations may be material and unfavorable, thereby triggering the need for future impairment tests where the conclusions may differ in reflection of prevailing market conditions. Further, continued adverse market conditions could result in the recognition of additional impairment if the Company determines that the fair values of its reporting units have fallen below their carrying values. Certain events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of the Company’s reporting units may include such items as: (i) a decrease in expected future cash flows, specifically, a decrease in sales volume driven by a prolonged weakness in customer demand or other pressures adversely affecting our long-term sales trends; and (ii) inability to achieve the sales targeted by our strategic growth initiatives. At June 30, 2020 and 2019, accumulated goodwill impairment losses subsequent to fiscal year 2002 totaled $64,794 related to the Service Center Based Distribution segment. At June 30, 2020 and 2019, accumulated goodwill impairment losses subsequent to fiscal year 2002 totaled $167,605 and $36,605, respectively, related to the Fluid Power & Flow Control segment. The Company's identifiable intangible assets resulting from business combinations are amortized over their estimated period of benefit and consist of the following:
June 30, 2020 | Amount |  |  | Accumulated Amortization |  |  | Net Book Value |
Finite-Lived Intangibles: |  |  |  |  |
Customer relationships | $ | 426,017 |  |  | $ | 162,965 |  |  | $ | 263,052 |
Trade names | 111,453 |  |  | 34,815 |  |  | 76,638 |
Vendor relationships | 11,329 |  |  | 8,934 |  |  | 2,395 |
Other | 2,078 |  |  | 948 |  |  | 1,130 |
Total Intangibles | $ | 550,877 |  |  | $ | 207,662 |  |  | $ | 343,215 |
June 30, 2019 | Amount |  |  | Accumulated Amortization |  |  | Net Book Value |
Finite-Lived Intangibles: |  |  |  |  |
Customer relationships | $ | 422,367 |  |  | $ | 135,879 |  |  | $ | 286,488 |
Trade names | 105,946 |  |  | 27,232 |  |  | 78,714 |
Vendor relationships | 11,367 |  |  | 8,156 |  |  | 3,211 |
Other | 2,702 |  |  | 2,249 |  |  | 453 |
Total Intangibles | $ | 542,382 |  |  | $ | 173,516 |  |  | $ | 368,866 |
Amounts include the impact of foreign currency translation. Fully amortized amounts are written off. During fiscal 2020, the Company acquired identifiable intangible assets with an acquisition cost allocation and weighted-average life as follows:
| Acquisition Cost Allocation |  |  | Weighted-Average Life
Customer relationships | $ | 7,160 |  |  | 20.0
Trade names | 4,260 |  |  | 15.0
Other | 980 |  |  | 6.8
Total Intangibles Acquired | $ | 12,400 |  |  | 17.2
Due to a sustained decline in economic conditions in the upstream oil and gas industry in western Canada, management also assessed the long-lived intangible assets related to the Reliance asset group in Canada for impairment during the third quarter of fiscal 2019. The Reliance asset group is located in western Canada and primarily serves customers in the upstream oil and gas industry. The asset group carrying value exceeded the sum of the undiscounted cash flows, indicating impairment. The fair value of the asset group was then determined using the income approach, using Level 3 assumptions in the fair value hierarchy, and the analysis resulted in the measurement of a full impairment loss of $31,594, which was recorded in the third quarter of fiscal 2019. Sustained significant softness in certain end market concentrations could result in impairment of certain intangible assets in future periods. Amortization of identifiable intangibles totaled $41,553, $41,883 and $32,065 in fiscal 2020, 2019 and 2018, respectively, and is included in selling, distribution and administrative expense in the statements of consolidated income. Future amortization expense based on the Company’s identifiable intangible assets as of June 30, 2020 is estimated to be $38,300 for 2021, $36,100 for 2022, $34,000 for 2023, $29,800 for 2024 and $26,300 for 2025.

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