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Goodwill and Intangible Assets | 12 Months Ended
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Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company has three reporting units as of March 31, 2024 and March 31, 2023. The Linear Motion Products reporting unit (which designs, manufactures, and sources mechanical and electromechanical actuators and rotary unions) had goodwill of $9,699,000 at March 31, 2024 and 2023, respectively. The Rest of Products reporting unit (representing the hoist, chain, and forgings, digital power control systems, and distribution businesses) had goodwill of $304,760,000 and $306,988,000 at March 31, 2024 and 2023, respectively. The Precision Conveyance reporting unit (which represents high-precision conveying systems) had goodwill of 395,875,000 and $327,942,000 at March 31, 2024 and March 31, 2023. The goodwill associated with the fiscal 2024 acquisition of montratec, as described in Note 3, is included in the Precision Conveyance reporting unit. Fiscal 2024 Annual Goodwill and Intangible Asset Impairment Test When we evaluate the potential for goodwill impairment, we assess a range of qualitative factors including, but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for our products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and overall financial performance. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value or if economic or other business factors indicate that the fair value of our reporting units may have declined since our last quantitative test, we proceed to a quantitative impairment test. To perform the quantitative impairment test, the Company uses the discounted cash flow method to estimate the fair value of the reporting units. The discounted cash flow method incorporates various assumptions, the most significant being projected revenue growth rates, EBITDA margins and cash flows, the terminal growth rate, and the weighted-average cost of capital. The Company projects discounted cash flows based on each reporting unit's current business, expected developments, and operational strategies over a seven-year period. In estimating the terminal growth rates, the Company considers its historical and projected results, as well as the economic environment in which its reporting units operate. The weighted-average cost of capital rates utilized for each reporting unit reflect the Company's assumptions of marketplace participants' cost of capital and risk assumptions, both specific to the reporting unit and overall in the economy. We performed the qualitative assessment as of February 29, 2024 for all three reporting units and determined that the quantitative test was required for the Precision Conveyance reporting unit. Based on results of both the qualitative and quantitative impairment tests for the reporting units, the Company determined the fair value was not less than its carrying value. Please refer to Note 5 for a discussion of the key assumptions used in the quantitative assessment. In accordance with ASC Topic 350-30-35, indefinite-lived intangible assets that are not subject to amortization shall be tested for impairment annually or more frequently if events or circumstances indicate that it is more likely than not that an asset is impaired. Similar to goodwill, we first assess various qualitative factors in the analysis. If, after completing this assessment, it is determined that it is more likely than not that the fair value of an indefinite-lived intangible asset is greater than its carrying value, we conclude that the indefinite-lived intangible asset is not impaired. If, after completing this assessment, it is determined that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying value or if economic or other business factors indicate that the fair value of our indefinite-lived intangible assets may have declined since our last quantitative test, the Company performs a new quantitative test. The methodology used to value trademarks is the relief from royalty method. The recorded book value of these trademarks in excess of the calculated fair value triggers an impairment. The key estimate used in this calculation consists of an overall royalty rate applied to the sales covered by the trademark. After performing a qualitative assessment as of February 29, 2024, we determined that the trademarks were not impaired. A summary of changes in goodwill during the years ended March 31, 2024 and 2023 is as follows:
Balance at April 1, 2022 | $ | 648,849 |
Working capital adjustment for Garvey | $ | 1,616 |
Garvey contingent payment reclassification | $ | (2,000) |
Currency Translation | $ | (3,836) |
Balance at March 31, 2023 | 644,629 |
Acquisition of montratec (Refer to Note 3) | 66,566 |
Currency translation | (861) |
Balance at March 31, 2024 | $ | 710,334 |
Goodwill is recognized net of accumulated impairment losses of $113,174,000 as of both March 31, 2024 and 2023, respectively. Identifiable intangible assets acquired in a business combination are amortized over their estimated useful lives. Identifiable intangible assets at March 31, 2024 are summarized as follows (in thousands):
|  | Gross Carrying Amount |  | Accumulated Amortization |  | Net
Trademark |  | $ | 22,404 |  |  | $ | (7,903) |  |  | $ | 14,501 |
Indefinite-lived trademark |  | 46,254 |  |  | — |  |  | 46,254 |
Customer relationships |  | 355,489 |  |  | (108,688) |  |  | 246,801 |
Acquired technology |  | 112,467 |  |  | (35,152) |  |  | 77,315 |
Other |  | 3,748 |  |  | (2,985) |  |  | 763 |
Balance at March 31, 2024 |  | $ | 540,362 |  |  | $ | (154,728) |  |  | $ | 385,634 |
Identifiable intangible assets at March 31, 2023 were as follows (in thousands):
|  | Gross Carrying Amount |  | Accumulated Amortization |  | Net
Trademark |  | $ | 19,478 |  |  | $ | (6,315) |  |  | $ | 13,163 |
Indefinite-lived trademark |  | 46,338 |  |  | — |  |  | 46,338 |
Customer relationships |  | 322,658 |  |  | (88,685) |  |  | 233,973 |
Acquired technology |  | 96,291 |  |  | (27,945) |  |  | 68,346 |
Other |  | 3,585 |  |  | (2,868) |  |  | 717 |
Balance at March 31, 2023 |  | $ | 488,350 |  |  | $ | (125,813) |  |  | $ | 362,537 |
The Company’s intangible assets that are considered to have finite lives are amortized over the period in which the assets are expected to generate future cash flows. Identifiable intangible assets acquired in a business combination are amortized over their estimated useful lives. 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 book value of $46,254,000 have an indefinite useful life and are therefore not being amortized. Total amortization expense was $29,396,000, $26,001,000, and $25,283,000 for fiscal 2024, 2023, and 2022, respectively. The increase in amortization expense in fiscal 2024 is the result of the montratec acquisition and related intangible assets acquired. Based on the current amount of intangible assets, the estimated amortization expense for each of the succeeding five years is expected to be approximately $30,020,000.

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