Thermon Group Holdings, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

12 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

The carrying amount of goodwill for all reporting segments as of March 31, 2019, 2018 and 2017 is as follows:



	United States		Canada			Europe			Asia		Total
Balance as of March 31, 2017	$	52,016	$	43,444		$	18,437		$	8,624	$	122,521
Goodwill acquired	—		85,156			—			—		85,156
Foreign currency translation impact	—		167			2,722			—		2,889
Balance as of March 31, 2018	$	52,016	$	128,767		$	21,159		$	8,624	$	210,566
Allocation of Goodwill	10,709		(10,709		)	—			—		—
Purchase price adjustment	—		481			—			—		481
Foreign currency translation impact	—		(4,157		)	(1,895		)	—		(6,052		)
Balance as of March 31, 2019	$	62,725	$	114,382		$	19,264		$	8,624	$	204,995

Goodwill is tested for impairment on an annual basis and between annual tests if indicators of potential impairment exist. We perform a qualitative analysis to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If required, we also perform a quantitative analysis using the income approach, based on discounted future cash flows, which are derived from internal forecasts and economic expectations, and the market approach based on market multiples of guideline public companies. The most significant inputs in the Company's quantitative goodwill impairment tests are projected financial information, the weighted average cost of capital and market multiples for similar transactions. Our annual impairment test is performed during the fourth quarter of our fiscal year. No triggering events were identified that indicated the fair value of any of our reporting units was less than its carrying amount

during the fiscal year ended March 31, 2019.

Our total intangible assets at March 31, 2019, and 2018 consisted of the following (including THS):



	Gross Carrying Amount at March 31, 2019		Accumulated Amortization		Net Carrying Amount at March 31, 2019		Gross Carrying Amount at March 31, 2018		Accumulated Amortization		Net Carrying Amount at March 31, 2018
Products	$	62,343	$	8,832	$	53,511	$	64,611	$	2,719	$	61,892
Trademarks	44,819		1,052		43,767		46,156		832		45,324
Developed technology	9,854		4,464		5,390		10,160		4,106		6,054
Customer relationships	110,802		87,319		23,483		113,378		77,646		35,732
Certifications	445		—		445		458		—		458
Other	5,742		5,742		—		5,863		3,889		1,974
Total	$	234,005	$	107,409	$	126,596	$	240,626	$	89,192	$	151,434

Trademarks and certifications have indefinite lives with the exception of IPI and Unitemp trademarks, which have gross carrying amounts of $1,820 and $387, respectively, that are subject to amortization. The useful life of the trademarks amortized is estimated at 8 years. Developed technology, customer relationships and other intangible assets have estimated lives of 20 years, 10 years and 6 years, respectively. The weighted average useful life for the group is 10 years. Portions of intangible assets are valued in foreign currencies; accordingly changes in indefinite life intangible assets at March 31, 2019 and 2018 were the result of foreign currency translation adjustments.

The Company recorded amortization expense of $20,771, $16,458, and $11,772 in fiscal 2019, fiscal 2018 and fiscal 2017, respectively for intangible assets. Annual amortization of intangible assets for the next five years and thereafter will approximate the following:



2020	$	17,742
2021	9,388
2022	8,366
2023	8,363
2024	7,674
Thereafter	32,016
Total	$	83,549