Annual report pursuant to Section 13 and 15(d)

Goodwill and Other Intangible Assets

v3.21.1
Goodwill and Other Intangible Assets
 12 Months Ended
Mar. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets
The carrying amount of goodwill for all reporting segments as of March 31, 2021, 2020 and 2019 is as follows:
US-LAM Canada EMEA APAC Total
Balance as of March 31, 2019 $ 62,725  $ 114,382  $ 19,264  $ 8,624  $ 204,995 
Foreign currency translation impact —  (6,643) (374) —  (7,017)
Balance as of March 31, 2020 $ 62,725  $ 107,739  $ 18,890  $ 8,624  $ 197,978 
Foreign currency translation impact —  13,811  1,249  —  15,060 
Balance as of March 31, 2021 $ 62,725  $ 121,550  $ 20,139  $ 8,624  $ 213,038 

    We identified the prolonged economic effects of the COVID-19 pandemic to be an indicator of potential asset impairments in our reporting units. In the fourth quarter of fiscal 2021, we performed our annual goodwill and tangible impairment assessments including our indefinite life trademarks. We analyzed our reporting units utilizing 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 impairment test for indefinite life trademarks utilized a relief from royalty analysis based on the cash flow streams attributable to the Thermon trademark. Based on the goodwill and assets impairment assessment, the estimated fair value of our reporting units exceeded the carrying value. As such, there was no impairment of goodwill, assets or our indefinite life trademarks as of the respective reporting periods. The
most significant inputs in the Company's impairment test are the projected financial information, the weighted average cost of capital and market multiples for similar transactions. If the overall economic conditions, energy market or factors specific to the Company deteriorate further, it could negatively impact the Company's future impairment tests. We will continue to monitor our reporting unit's goodwill and asset valuations and test for potential impairments until the overall market conditions improve.

    Our total intangible assets at March 31, 2021, and 2020 consisted of the following:
Gross Carrying Amount at March 31, 2021 Accumulated Amortization Net Carrying Amount at March 31, 2021 Gross Carrying Amount at March 31, 2020 Accumulated Amortization Net Carrying Amount at March 31, 2020
Products $ 66,250  $ 22,635  $ 43,615  $ 58,722  $ 14,193  $ 44,529 
Trademarks 45,581  1,289  44,292  43,865  1,273  42,592 
Developed technology 10,028  5,486  4,542  9,564  4,758  4,806 
Customer relationships 113,789  102,911  10,878  105,912  93,729  12,183 
Certifications 457  —  457  436  —  436 
Total $ 236,105  $ 132,321  $ 103,784  $ 218,499  $ 113,953  $ 104,546 

Trademarks and certifications have indefinite lives. Developed technology, products, customer relationships and other intangible assets have estimated lives of 20 years, 10 years, 10 years and 6 years, respectively. The weighted average useful life for the group is 12 years. Customer relationships intangibles associated with THS, with a gross carrying amount of $11,438, have a useful life of 17 years. Intangible assets held in non-U.S. entities are valued in foreign currencies; accordingly changes in indefinite life intangible assets, such as certifications, at March 31, 2021 and 2020 were the result of foreign currency translation adjustments. Foreign currency translation adjustments also impacted finite life intangible assets held in non-U.S. entities.

The Company recorded amortization expense of $9,445, $17,773, and $20,771 in fiscal 2021, 2020 and 2019, respectively for intangible assets. Annual amortization of intangible assets for the next five years and thereafter will approximate the following:
2022 $ 8,766 
2023 8,766 
2024 8,118 
2025 7,793 
2026 7,794 
Thereafter 18,329 
Total $ 59,566