Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Aug. 06, 2021 | Dec. 31, 2020 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jun. 30, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 1-2299 | ||
Entity Registrant Name | APPLIED INDUSTRIAL TECHNOLOGIES, INC. | ||
Entity Incorporation, State or Country Code | OH | ||
Entity Tax Identification Number | 34-0117420 | ||
Entity Address, Address Line One | 1 Applied Plaza | ||
Entity Address, City or Town | Cleveland | ||
Entity Address, State or Province | OH | ||
Entity Address, Postal Zip Code | 44115 | ||
City Area Code | 216 | ||
Local Phone Number | 426-4000 | ||
Title of 12(b) Security | Common Stock, without par value | ||
Trading Symbol | AIT | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,993,384 | ||
Entity Common Stock, Shares Outstanding (actual number) | 38,515,334 | ||
Entity Central Index Key | 0000109563 | ||
Current Fiscal Year End Date | --06-30 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESThe Company is a party to various pending judicial and administrative proceedings. Based on circumstances currently known, the Company does not expect that the ultimate resolution of any of these matters will have, either individually or in the aggregate, a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. |
Statements of Consolidated Inco
Statements of Consolidated Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | |||
Net sales | $ 3,235,919 | $ 3,245,652 | $ 3,472,739 |
Cost of sales | 2,300,395 | 2,307,916 | 2,465,116 |
Gross profit | 935,524 | 937,736 | 1,007,623 |
Selling, distribution and administrative expense, including depreciation | 680,542 | 717,747 | 742,241 |
Impairment expense | 49,528 | 131,000 | 31,594 |
Operating income | 205,454 | 88,989 | 233,788 |
Interest expense | 30,807 | 37,264 | 40,788 |
Interest income | (215) | (729) | (600) |
Other income, net | (2,200) | (2,782) | (881) |
Income before income taxes | 177,062 | 55,236 | 194,481 |
Income tax expense | 32,305 | 31,194 | 50,488 |
Net income | $ 144,757 | $ 24,042 | $ 143,993 |
Net income per share — basic | $ 3.73 | $ 0.62 | $ 3.72 |
Net income per share — diluted | $ 3.68 | $ 0.62 | $ 3.68 |
Statements of Consolidated Comp
Statements of Consolidated Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income per the statements of consolidated income | $ 144,757 | $ 24,042 | $ 143,993 |
Other comprehensive income (loss), before tax: | |||
Foreign currency translation adjustments | 24,352 | (18,499) | 2,021 |
Post-employment benefits: | |||
Actuarial gain (loss) on re-measurement | 903 | (2,192) | (372) |
Reclassification of actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs | 270 | (66) | (306) |
Cumulative effect of adopting accounting standard | 0 | 0 | (50) |
Unrealized gain (loss) on cash flow hedge | 3,250 | (16,615) | (14,446) |
Reclassification of interest from cash flow hedge into interest expense | 11,553 | 4,638 | 244 |
Total other comprehensive income (loss), before tax | 40,328 | (32,734) | (12,909) |
Income tax expense (benefit) related to items of other comprehensive loss | 3,990 | (3,190) | (3,246) |
Other comprehensive income (loss), net of tax | 36,338 | (29,544) | (9,663) |
Comprehensive income (loss) | $ 181,095 | $ (5,502) | $ 134,330 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Current assets | ||
Cash and cash equivalents | $ 257,745 | $ 268,551 |
Accounts receivable, net | 516,322 | 449,998 |
Inventories | 362,547 | 389,150 |
Other current assets | 59,961 | 52,070 |
Total current assets | 1,196,575 | 1,159,769 |
Property — at cost | ||
Land | 14,399 | 14,339 |
Buildings | 107,142 | 104,396 |
Equipment, including computers and software | 198,374 | 195,220 |
Total property — at cost | 319,915 | 313,955 |
Less accumulated depreciation | 204,326 | 192,054 |
Property — net | 115,589 | 121,901 |
Operating lease assets, net | 87,111 | 90,636 |
Identifiable intangibles, net | 279,628 | 343,215 |
Goodwill | 560,077 | 540,594 |
Other assets | 32,827 | 27,436 |
Total Assets | 2,271,807 | 2,283,551 |
Current liabilities | ||
Accounts payable | 208,162 | 186,270 |
Current portion of long-term debt | 43,525 | 78,646 |
Compensation and related benefits | 77,657 | 61,887 |
Other current liabilities | 98,356 | 99,280 |
Total current liabilities | 427,700 | 426,083 |
Long-term debt | 784,855 | 855,143 |
Other liabilities | 126,706 | 158,783 |
Total Liabilities | 1,339,261 | 1,440,009 |
Shareholders’ Equity | ||
Preferred stock — no par value; 2,500 shares authorized; none issued or outstanding | $ 0 | 0 |
Preferred Stock, Shares Authorized | 2,500 | |
Common stock — no par value; 80,000 shares authorized; 54,213 shares issued; 38,516 and 38,710 shares outstanding, respectively | $ 10,000 | $ 10,000 |
Common Stock, Shares authorized | 80,000 | |
Common Stock, Shares, Issued | 54,213 | |
Common Stock, Shares, Outstanding | 38,516 | 38,710 |
Additional paid-in capital | $ 177,014 | $ 176,492 |
Retained earnings | 1,294,413 | 1,200,570 |
Treasury shares - at cost (15,697 and 15,503 shares, respectively) | $ (455,789) | $ (414,090) |
Treasury Stock, Shares | 15,697 | 15,503 |
Accumulated other comprehensive loss | $ (93,092) | $ (129,430) |
Total Shareholders’ Equity | 932,546 | 843,542 |
Total Liabilities and Shareholders’ Equity | $ 2,271,807 | $ 2,283,551 |
Statements of Consolidated Cash
Statements of Consolidated Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Net income | $ 144,757 | $ 24,042 | $ 143,993 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Impairment expense | 49,528 | 131,000 | 31,594 |
Depreciation and amortization of property | 20,780 | 21,196 | 20,236 |
Amortization of intangibles | 34,365 | 41,553 | 41,883 |
Amortization of stock appreciation rights and options | 2,526 | 2,954 | 2,437 |
Deferred income taxes | (31,080) | (13,292) | 2,368 |
Provision for losses on accounts receivable | 6,540 | 14,055 | 4,058 |
Unrealized foreign exchange transaction losses (gains) | 1,814 | (1,357) | 238 |
Other share-based compensation expense | 6,454 | 4,000 | 4,474 |
Gain on sale of property | (368) | (1,157) | (459) |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | (59,119) | 74,437 | 8,465 |
Inventories | 41,318 | 57,028 | (16,590) |
Other operating assets | (5,262) | (5,268) | (7,738) |
Accounts payable | 10,919 | (53,856) | (29,788) |
Other operating liabilities | 18,525 | 1,379 | (24,570) |
Cash provided by Operating Activities | 241,697 | 296,714 | 180,601 |
Cash Flows from Investing Activities | |||
Capital expenditures | (15,852) | (20,115) | (18,970) |
Proceeds from property sales | 1,152 | 1,948 | 1,003 |
Cash paid for acquisition of businesses, net of cash acquired | (30,230) | (37,237) | (37,526) |
Other | 0 | 0 | 391 |
Cash used in Investing Activities | (44,930) | (55,404) | (55,102) |
Cash Flows from Financing Activities | |||
Net repayments under revolving credit facility | 0 | 0 | (19,500) |
Borrowings under long-term debt facilities | 26,000 | 25,000 | 175,000 |
Long-term debt repayments | (131,883) | (49,553) | (161,738) |
Interest rate swap settlement payments | (3,737) | 0 | 0 |
Payment of debt issuance costs | (399) | (95) | (775) |
Purchases of treasury shares | (40,089) | 0 | (11,158) |
Dividends paid | (50,664) | (48,873) | (47,266) |
Acquisition holdback payments | (2,345) | (2,440) | (2,610) |
Exercise of stock appreciation rights and options | 163 | 330 | 0 |
Taxes paid for shares withheld | (10,083) | (2,607) | (3,492) |
Cash used in Financing Activities | (213,037) | (78,238) | (71,539) |
Effect of exchange rate changes on cash | 5,464 | (2,740) | 109 |
(Decrease) increase in cash and cash equivalents | (10,806) | 160,332 | 54,069 |
Cash and cash equivalents at beginning of year | 268,551 | 108,219 | 54,150 |
Cash and Cash Equivalents at End of Year | 257,745 | 268,551 | 108,219 |
Cash paid during the year for: | |||
Income taxes | 64,394 | 41,162 | 54,294 |
Interest | $ 27,492 | $ 36,648 | $ 40,142 |
Statements of Consolidated Shar
Statements of Consolidated Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Stock Options and Stock Appreciation Rights [ Member] | Common Stock | Additional Paid-in Capital | Additional Paid-in CapitalStock Options and Stock Appreciation Rights [ Member] | Additional Paid-in CapitalPerformance Shares [Member] | Additional Paid-in CapitalRestricted Stock Units (RSUs) [Member] | Retained Earnings | Treasury Shares-at Cost | Treasury Shares-at CostStock Options and Stock Appreciation Rights [ Member] | Treasury Shares-at CostPerformance Shares [Member] | Treasury Shares-at CostRestricted Stock Units (RSUs) [Member] | Accumulated Other Comprehensive Income (Loss) | Parent [Member] | Parent [Member]Stock Options and Stock Appreciation Rights [ Member] | Parent [Member]Performance Shares [Member] | Parent [Member]Restricted Stock Units (RSUs) [Member] |
Beginning balance, shares at Jun. 30, 2018 | 38,703 | ||||||||||||||||
Beginning balance at Jun. 30, 2018 | $ 10,000 | $ 169,383 | $ 1,129,678 | $ (403,875) | $ (90,223) | $ 814,963 | |||||||||||
Net income | $ 143,993 | 143,993 | |||||||||||||||
Other comprehensive income (loss) | $ (9,663) | (9,663) | (9,663) | ||||||||||||||
Cumulative effect of adopting accounting standards | 3,056 | 3,056 | |||||||||||||||
Cash dividends per share | $ 1.22 | ||||||||||||||||
Cash dividends - $1.22, $1.26, and $1.30 per share for 2019, 2020, and 2021 respectively | (47,621) | (47,621) | |||||||||||||||
Purchases of common stock for treasury, shares | (192) | ||||||||||||||||
Purchases of common stock for treasury | (11,158) | (11,158) | |||||||||||||||
Treasury shares issued for: | |||||||||||||||||
Exercise of stock appreciation rights and options, shares | 30 | ||||||||||||||||
Performance share awards, shares | 18 | ||||||||||||||||
Additional Paid in Capital, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units | $ (1,069) | $ (844) | $ (1,057) | ||||||||||||||
Exercise of stock appreciation rights and options and Performance share awards | $ (59) | $ (301) | |||||||||||||||
Restricted stock units, shares | 23 | ||||||||||||||||
Restricted stock units | $ (120) | ||||||||||||||||
Total Shareholders' Equity, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units | $ (1,128) | $ (1,145) | $ (1,177) | ||||||||||||||
Compensation expense | 4,474 | 2,437 | 4,474 | 2,437 | |||||||||||||
Other, shares | 15 | ||||||||||||||||
Other | (393) | 42 | 354 | 3 | |||||||||||||
Ending balance, shares at Jun. 30, 2019 | 38,597 | ||||||||||||||||
Ending balance at Jun. 30, 2019 | $ 10,000 | 172,931 | 1,229,148 | (415,159) | (99,886) | 897,034 | |||||||||||
Net income | $ 24,042 | 24,042 | |||||||||||||||
Other comprehensive income (loss) | $ (29,544) | (29,544) | (29,544) | ||||||||||||||
Cumulative effect of adopting accounting standards | (3,275) | (3,275) | |||||||||||||||
Cash dividends per share | $ 1.26 | ||||||||||||||||
Cash dividends - $1.22, $1.26, and $1.30 per share for 2019, 2020, and 2021 respectively | (49,305) | (49,305) | |||||||||||||||
Treasury shares issued for: | |||||||||||||||||
Exercise of stock appreciation rights and options, shares | 43 | ||||||||||||||||
Performance share awards, shares | 36 | ||||||||||||||||
Additional Paid in Capital, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units | (730) | (1,540) | (671) | ||||||||||||||
Exercise of stock appreciation rights and options and Performance share awards | 71 | 362 | |||||||||||||||
Restricted stock units, shares | 17 | ||||||||||||||||
Restricted stock units | 213 | ||||||||||||||||
Total Shareholders' Equity, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units | (659) | (1,178) | (458) | ||||||||||||||
Compensation expense | 4,000 | 2,954 | 4,000 | 2,954 | |||||||||||||
Other, shares | 17 | ||||||||||||||||
Other | (452) | (40) | 423 | (69) | |||||||||||||
Ending balance, shares at Jun. 30, 2020 | 38,710 | 38,710 | |||||||||||||||
Ending balance at Jun. 30, 2020 | $ 843,542 | $ 10,000 | 176,492 | 1,200,570 | (414,090) | (129,430) | 843,542 | ||||||||||
Net income | 144,757 | 144,757 | |||||||||||||||
Other comprehensive income (loss) | $ 36,338 | 36,338 | 36,338 | ||||||||||||||
Cash dividends per share | $ 1.30 | ||||||||||||||||
Cash dividends - $1.22, $1.26, and $1.30 per share for 2019, 2020, and 2021 respectively | (50,992) | (50,992) | |||||||||||||||
Purchases of common stock for treasury, shares | (400) | ||||||||||||||||
Purchases of common stock for treasury | (40,089) | (40,089) | |||||||||||||||
Treasury shares issued for: | |||||||||||||||||
Exercise of stock appreciation rights and options, shares | 527 | 152 | |||||||||||||||
Performance share awards, shares | 22 | ||||||||||||||||
Additional Paid in Capital, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units | (6,379) | $ (985) | $ (740) | ||||||||||||||
Exercise of stock appreciation rights and options and Performance share awards | $ (2,009) | $ (20) | |||||||||||||||
Restricted stock units, shares | 19 | ||||||||||||||||
Restricted stock units | $ 95 | ||||||||||||||||
Total Shareholders' Equity, Exercise of stock appreciation rights and options, Performance share awards, Restricted stock units | (8,388) | $ (1,005) | $ (645) | ||||||||||||||
Compensation expense | 6,454 | $ 2,526 | 6,454 | $ 2,526 | |||||||||||||
Other, shares | 13 | ||||||||||||||||
Other | (354) | 78 | 324 | 48 | |||||||||||||
Ending balance, shares at Jun. 30, 2021 | 38,516 | 38,516 | |||||||||||||||
Ending balance at Jun. 30, 2021 | $ 932,546 | $ 10,000 | $ 177,014 | $ 1,294,413 | $ (455,789) | $ (93,092) | $ 932,546 |
Business and Accounting Policie
Business and Accounting Policies | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Business Description and Accounting Policies | BUSINESS AND ACCOUNTING POLICIES Business Applied Industrial Technologies, Inc. and subsidiaries (the “Company” or “Applied”) is a leading value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies. Our leading brands, specialized services, and comprehensive knowledge serve MRO (Maintenance, Repair & Operations) and OEM (Original Equipment Manufacturer) end users in virtually all industrial markets through our multi-channel capabilities that provide choice, convenience, and expertise. Although the Company does not generally manufacture the products it sells, it does assemble and repair certain products and systems. Consolidation The consolidated financial statements include the accounts of Applied Industrial Technologies, Inc. and its subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Foreign Currency The financial statements of the Company’s Canadian, Mexican, Australian and New Zealand subsidiaries are measured using local currencies as their functional currencies. Assets and liabilities are translated into U.S. dollars at current exchange rates, while income and expenses are translated at average exchange rates. Translation gains and losses are reported in other comprehensive loss in the statements of consolidated comprehensive income. Gains and losses resulting from transactions denominated in foreign currencies are included in the statements of consolidated income as a component of other income, net. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. Actual results may differ from the estimates and assumptions used in preparing the consolidated financial statements. Cash and Cash Equivalents The Company considers all short-term, highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are carried at cost, which approximates fair value. Marketable Securities The primary marketable security investments of the Company include money market and mutual funds held in a rabbi trust for a non-qualified deferred compensation plan. These are included in other assets in the consolidated balance sheets, are classified as trading securities, and are reported at fair value based on quoted market prices. Changes in the fair value of the investments during the period are recorded in other income, net in the statements of consolidated income. Concentration of Credit Risk The Company has a broad customer base representing many diverse industries across North America, Australia, New Zealand, and Singapore. As such, the Company does not believe that a significant concentration of credit risk exists in its accounts receivable. The Company’s cash and cash equivalents consist of deposits with commercial banks and regulated non-bank subsidiaries. While the Company monitors the creditworthiness of these institutions, a crisis in the financial systems could limit access to funds and/or result in the loss of principal. The terms of these deposits and investments provide that all monies are available to the Company upon demand. Accounts Receivable Accounts receivable are stated at their estimated net realizable value and consist of amounts billed or billable and currently due from customers. The Company maintains an allowance for doubtful accounts, which reflects management’s best estimate of probable losses based on an analysis of customer accounts, known troubled accounts, historical experience with write-offs, and other currently available evidence. Allowances for Doubtful Accounts The Company evaluates the collectibility of trade accounts receivable based on a combination of factors. Initially, the Company estimates an allowance for doubtful accounts as a percentage of net sales based on historical bad debt experience. This initial estimate is adjusted based on recent trends of customers and industries estimated to be greater credit risks, trends within the entire customer pool, and changes in the overall aging of accounts receivable. Accounts are written off against the allowance when it becomes evident collection will not occur. While the Company has a large customer base that is geographically dispersed, a general economic downturn in any of the industry segments in which the Company operates could result in higher than expected defaults, and therefore, the need to revise estimates for bad debts. The allowance for doubtful accounts was $16,455 and $13,661 at June 30, 2021 and June 30, 2020, respectively. Inventories Inventories are valued at average cost, using the last-in, first-out (LIFO) method for U.S. inventories and the average cost method for foreign inventories. The Company adopted the link chain dollar value LIFO method of accounting for U.S. inventories in fiscal 1974. At June 30, 2021, approximately 19.8% of the Company’s domestic inventory dollars relate to LIFO layers added in the 1970s. The Company maintains five LIFO pools based on the following product groupings: bearings, power transmission products, rubber products, fluid power products and other products. LIFO layers and/or liquidations are determined consistently year-to-year. The Company evaluates the recoverability of its slow moving and inactive inventories at least quarterly. The Company estimates the recoverable cost of such inventory by product type while considering factors such as its age, historic and current demand trends, the physical condition of the inventory, as well as assumptions regarding future demand. The Company’s ability to recover its cost for slow moving or obsolete inventory can be affected by such factors as general market conditions, future customer demand, and relationships with suppliers. Historically, the Company’s inventories have demonstrated long shelf lives, are not highly susceptible to obsolescence, and, in certain instances, can be eligible for return under supplier return programs. Supplier Purchasing Programs The Company enters into agreements with certain suppliers providing inventory purchase incentives. The Company’s inventory purchase incentive arrangements are unique to each supplier and are generally annual programs ending at either the Company’s fiscal year end or the supplier’s year end; however, program length and ending dates can vary. Incentives are received in the form of cash or credits against purchases upon attainment of specified purchase volumes and are received either monthly, quarterly or annually. The incentives are generally a specified percentage of the Company’s net purchases based upon achieving specific purchasing volume levels. These percentages can increase or decrease based on changes in the volume of purchases. The Company accrues for the receipt of these inventory purchase incentives based upon cumulative purchases of inventory. The percentage level utilized is based upon the estimated total volume of purchases expected during the life of the program. Supplier programs are analyzed each quarter to determine the appropriateness of the amount of purchase incentives accrued. Upon program completion, differences between estimates and actual incentives subsequently received have not been material. Benefits under these supplier purchasing programs are recognized under the Company’s inventory accounting methods as a reduction of cost of sales when the inventories representing these purchases are recorded as cost of sales. Accrued incentives expected to be settled as a credit against future purchases are reported on the consolidated balance sheets as an offset to amounts due to the related supplier. Property and Related Depreciation and Amortization Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets and is included in selling, distribution and administrative expense in the accompanying statements of consolidated income. Buildings, building improvements and leasehold improvements are depreciated over ten three Goodwill and Intangible Assets Goodwill is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized. Goodwill is reviewed for impairment annually as of January 1 or whenever changes in conditions indicate an evaluation should be completed. These conditions could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. The Company utilizes the income and market approaches to determine the fair value of reporting units. Evaluating impairment requires significant judgment by management, including estimated future operating results, estimated future cash flows, the long-term rate of growth of the business, and determination of an appropriate discount rate. While the Company uses available information to prepare the estimates and evaluations, actual results could differ significantly. The Company recognizes acquired identifiable intangible assets such as customer relationships, trade names, vendor relationships, and non-competition agreements apart from goodwill. Customer relationship identifiable intangibles are amortized using the sum-of-the-years-digits method or the expected cash flow method over estimated useful lives consistent with assumptions used in the determination of their value. Amortization of all other finite-lived identifiable intangible assets is computed using the straight-line method over the estimated period of benefit. Amortization of identifiable intangible assets is included in selling, distribution and administrative expense in the accompanying statements of consolidated income. Identifiable intangible assets with finite lives are reviewed for impairment when changes in conditions indicate carrying value may not be recoverable. If circumstances require a finite-lived intangible asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by the asset to the carrying value of the asset. If the carrying value of the finite-lived intangible asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value determined through a discounted cash flow model. Identifiable intangible assets with indefinite lives are reviewed for impairment on an annual basis or whenever changes in conditions indicate an evaluation should be completed. The Company does not currently have any indefinite-lived identifiable intangible assets. Self-Insurance Liabilities The Company maintains business insurance programs with significant self-insured retention covering workers’ compensation, business, automobile, general product liability and other claims. The Company accrues estimated losses including those incurred but not reported using actuarial calculations, models and assumptions based on historical loss experience. The Company also maintains a self-insured health benefits plan which provides medical benefits to U.S. based employees electing coverage under the plan. The Company estimates its reserve for all unpaid medical claims, including those incurred but not reported, based on historical experience, adjusted as necessary based upon management’s reasoned judgment. Revenue Recognition The Company primarily sells purchased products distributed through its network of service centers and recognizes revenue at a point in time when control of the product transfers to the customer, typically upon shipment from an Applied facility or directly from a supplier. For products that ship directly from suppliers to customers, Applied generally acts as the principal in the transaction and recognizes revenue on a gross basis. Revenue recognized over time is not significant. Revenue is measured as the amount of consideration expected to be received in exchange for the products and services provided, net of allowances for product returns, variable consideration, and any taxes collected from customers that will be remitted to governmental authorities. Shipping and handling costs are recognized in net sales when they are billed to the customer. The Company has elected to account for shipping and handling activities as fulfillment costs. There are no significant costs associated with obtaining customer contracts. Payment terms with customers vary by the type and location of the customer and the products or services offered. The Company does not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. The Company’s products are generally sold with a right of return and may include variable consideration in the form of incentives, discounts, credits or rebates. Product returns are estimated based on historical return rates. The returns reserve was $9,772 and $9,883 at June 30, 2021 and June 30, 2020, respectively. The Company estimates and recognizes variable consideration based on historical experience to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to a customer. The Company records variable consideration as an adjustment to the transaction price in the period it is incurred. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Shipping and Handling Costs The Company records freight payments to third parties in cost of sales and internal delivery costs in selling, distribution and administrative expense in the accompanying statements of consolidated income. Internal delivery costs in selling, distribution and administrative expense were approximately $15,970, $19,620 and $24,090 for the fiscal years ended June 30, 2021, 2020 and 2019, respectively. Income Taxes Income taxes are determined based upon income and expenses recorded for financial reporting purposes. Deferred income taxes are recorded for estimated future tax effects of differences between the bases of assets and liabilities for financial reporting and income tax purposes, giving consideration to enacted tax laws. Uncertain tax positions meeting a more-likely-than-not recognition threshold are recognized in accordance with Accounting Standards Codification (ASC) Topic 740 - Income Taxes. The Company recognizes accrued interest and penalties related to unrecognized income tax benefits in the provision for income taxes. Share-Based Compensation Share-based compensation represents the cost related to share-based awards granted to employees under the 2019 Long-Term Performance Plan, the 2015 Long-Term Performance Plan, the 2011 Long-Term Performance Plan, or the 2007 Long-Term Performance Plan. The Company measures share-based compensation cost at the grant date, based on the estimated fair value of the award and recognizes the cost over the requisite service period. Non-qualified stock appreciation rights (SARs) and stock options are granted with an exercise price equal to the closing market price of the Company’s common stock at the date of grant and the fair values are determined using a Black-Scholes option pricing model, which incorporates assumptions regarding the expected volatility, the expected option life, the risk-free interest rate and the expected dividend yield. SARs and stock option awards generally vest over four years of continuous service and have ten-year contractual terms. The fair value of restricted stock awards, restricted stock units (RSUs), and performance shares are based on the closing market price of Company common stock on the grant date. Treasury Shares Shares of common stock repurchased by the Company are recorded at cost as treasury shares and result in a reduction of shareholders’ equity in the consolidated balance sheets. The Company uses the weighted-average cost method for determining the cost of shares reissued. The difference between the cost of the shares and the reissuance price is added to or deducted from additional paid-in capital. Derivatives The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. In accordance with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. Retirement Savings Plan Substantially all U.S. employees participate in the Applied Industrial Technologies, Inc. Retirement Savings Plan. Participants may elect 401(k) contributions of up to 50% of their compensation, subject to Internal Revenue Code maximums. The Company partially matches 401(k) contributions by participants. The Company’s expense for matching of employees’ 401(k) contributions was $3,945, $5,959 and $7,711 during 2021, 2020 and 2019, respectively. Deferred Compensation Plans The Company has deferred compensation plans that enable certain employees of the Company to defer receipt of a portion of their compensation. Assets held in these rabbi trusts consist of investments in money market and mutual funds and Company common stock. Post-employment Benefit Plans The Company provides the following post-employment benefits which, except for the Qualified Defined Benefit Retirement Plan and Key Executive Restoration Plan, are unfunded: Supplemental Executive Retirement Benefits Plan The Company has a non-qualified pension plan to provide supplemental retirement benefits to certain officers. Benefits are payable and determinable at retirement based upon a percentage of the participant’s historical compensation. The Executive Organization and Compensation Committee of the Board of Directors froze participant benefits (credited service and final average earnings) and entry into the Supplemental Executive Retirement Benefits Plan (SERP) effective December 31, 2011. The Company recorded net periodic benefit costs associated with the SERP of $401, $317, and $414 in fiscal 2021 , 2020 , and 2019, respectively. The Company expects to make payments of approximately $800 under the SERP in fiscal 2022 and 2023, and approximately $200 in fiscal 2024. Key Executive Restoration Plan In fiscal 2012, the Company adopted the Key Executive Restoration Plan (KERP), a funded, non-qualified deferred compensation plan, to replace the SERP. The Company recorded $334, $189, and $400 of expense associated with this plan in fiscal 2021 , 2020 , and 2019, respectively. Qualified Defined Benefit Retirement Plan The Company has a qualified defined benefit retirement plan that provides benefits to certain hourly employees at retirement. These employees did not participate in the Retirement Savings Plan. The benefits are based on length of service and date of retirement. The plan accruals were frozen as of April 16, 2018, and employees are permitted to participate in the Retirement Savings Plan, following that date. The Company recorded net periodic cost (benefits) associated with this plan of $46, $(116), and $(34) in fiscal 2021 , 2020 , and 2019, respectively Retiree Health Care Benefits The Company provides health care benefits, through third-party policies, to eligible retired employees who pay a specified monthly premium. Premium payments are based upon current insurance rates for the type of coverage provided and are adjusted annually. Certain monthly health care premium payments are partially subsidized by the Company. Additionally, in conjunction with a fiscal 1998 acquisition, the Company assumed the obligation for a post-retirement medical benefit plan which provides health care benefits to eligible retired employees at no cost to the individual. The Company recorded net periodic benefits associated with these plans of $161, $257, and $418 in fiscal 2021 , 2020 , and 2019, respectively. The Company has determined that the related disclosures under ASC Topic 715 - Compensation, Retirement Benefits, for these post-employment benefit plans are not material to the consolidated financial statements. Leases The Company leases facilities for certain service centers, warehouses, distribution centers and office space. The Company also leases office equipment and vehicles. All leases are classified as operating. The Company’s leases expire at various dates through 2031, with terms ranging from 1 year to 15 years. Many of the Company’s real estate leases contain renewal provisions to extend lease terms up to 5 years. The exercise of renewal options is solely at the Company’s discretion. The Company’s lease agreements do not contain material variable lease payments, residual value guarantees or restrictive covenants. The Company does not recognize right-of-use assets or lease liabilities for short-term leases with initial terms of 12 months or less. Leased vehicles comprise the majority of the Company’s short-term leases. All other leases are recorded on the balance sheet with right-of-use assets representing the right to use the underlying asset for the lease term and lease liabilities representing lease payment obligations. The Company’s leases do not provide implicit rates; therefore the Company uses its incremental borrowing rate as the discount rate for measuring lease liabilities. Non-lease components are accounted for separately from lease components. The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is recorded in selling, distribution and administrative expense on the statements of consolidated income. Recently Adopted Accounting Guidance Accounting for current expected credit losses In June 2016, the FASB issued its final standard on measurement of credit losses on financial instruments. This standard, issued as ASU 2016-13, requires that an entity measure impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. This update is effective for annual and interim financial statement periods beginning after December 15, 2019, with early adoption permitted for financial statement periods beginning after December 15, 2018. In November 2018, April 2019, May 2019, November 2019, and February 2020, the FASB issued ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11 and ASU 2020-02, respectively, which clarify the guidance in ASU 2016-13. The Company adopted the new guidance in the first quarter of fiscal 2021. The adoption of this guidance did not have a material impact on the Company's financial statements or related disclosures. Recently Issued Accounting Guidance In December 2019, the FASB issued its final standard on simplifying the accounting for income taxes. This standard, issued as ASU 2019-12, makes a number of changes meant to add or clarify guidance on accounting for income taxes. This update is effective for annual and interim financial statement periods beginning after December 15, 2020, with early adoption permitted in any interim period for which financial statements have not yet been filed. The Company has determined that this pronouncement will not have a material impact on its financial statements and related disclosures. |
Revenue Recognition Revenue Rec
Revenue Recognition Revenue Recognition | 12 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUE RECOGNITION Disaggregation of Revenues The following tables present the Company's net sales by reportable segment and by geographic areas based on the location of the facility shipping the product for the years ended June 30, 2021, 2020 and 2019. Other countries consist of Mexico, Australia, New Zealand, and Singapore. Year Ended June 30, 2021 Service Center Based Distribution Fluid Power & Flow Control Total Geographic Areas: United States $ 1,768,965 $ 1,013,894 $ 2,782,859 Canada 255,360 — 255,360 Other countries 175,208 22,492 197,700 Total $ 2,199,533 $ 1,036,386 $ 3,235,919 Year Ended June 30, 2020 Service Center Based Distribution Fluid Power & Flow Control Total Geographic Areas: United States $ 1,833,275 $ 986,125 $ 2,819,400 Canada 248,610 — 248,610 Other countries 160,064 17,578 177,642 Total $ 2,241,949 $ 1,003,703 $ 3,245,652 Year Ended June 30, 2019 Service Center Based Distribution Fluid Power & Flow Control Total Geographic Areas: United States $ 2,009,479 $ 1,007,280 $ 3,016,759 Canada 271,305 — 271,305 Other countries 172,121 12,554 184,675 Total $ 2,452,905 $ 1,019,834 $ 3,472,739 The following tables present the Company’s percentage of revenue by reportable segment and major customer industry for the years ended June 30, 2021, 2020, and 2019: Year Ended June 30, 2021 Service Center Based Distribution Fluid Power & Flow Control Total General Industry 35.8 % 40.0 % 37.2 % Industrial Machinery 9.8 % 26.8 % 15.2 % Food 13.5 % 2.9 % 10.1 % Metals 10.5 % 6.8 % 9.3 % Forest Products 10.7 % 2.9 % 8.2 % Chem/Petrochem 3.3 % 13.6 % 6.6 % Cement & Aggregate 7.9 % 1.1 % 5.7 % Transportation 4.6 % 4.8 % 4.7 % Oil & Gas 3.9 % 1.1 % 3.0 % Total 100.0 % 100.0 % 100.0 % Year Ended June 30, 2020 Service Center Based Distribution Fluid Power & Flow Control Total General Industry 35.0 % 41.2 % 36.8 % Industrial Machinery 9.7 % 24.4 % 14.3 % Food 12.2 % 3.1 % 9.4 % Metals 11.1 % 7.2 % 9.9 % Forest Products 9.3 % 3.7 % 7.6 % Chem/Petrochem 3.3 % 13.4 % 6.4 % Cement & Aggregate 7.3 % 1.0 % 5.4 % Transportation 4.6 % 4.4 % 4.5 % Oil & Gas 7.5 % 1.6 % 5.7 % Total 100.0 % 100.0 % 100.0 % Year Ended June 30, 2019 Service Center Based Distribution Fluid Power & Flow Control Total General Industry 33.7 % 43.0 % 36.3 % Industrial Machinery 10.4 % 21.8 % 13.8 % Food 10.6 % 2.7 % 8.3 % Metals 12.6 % 9.4 % 11.6 % Forest Products 8.0 % 3.1 % 6.6 % Chem/Petrochem 3.1 % 13.8 % 6.3 % Cement & Aggregate 6.7 % 1.0 % 5.0 % Transportation 4.8 % 3.1 % 4.3 % Oil & Gas 10.1 % 2.1 % 7.8 % Total 100.0 % 100.0 % 100.0 % The following tables present the Company’s percentage of revenue by reportable segment and product line for the years ended June 30, 2021, 2020, and 2019: Year Ended June 30, 2021 Service Center Based Distribution Fluid Power & Flow Control Total Power Transmission 37.3 % 7.5 % 27.8 % Fluid Power 13.2 % 38.0 % 21.2 % Bearings, Linear & Seals 29.0 % 0.4 % 19.8 % General Maintenance; Hose Products 20.5 % 16.9 % 19.3 % Specialty Flow Control — % 37.2 % 11.9 % Total 100.0 % 100.0 % 100.0 % Year Ended June 30, 2020 Service Center Based Distribution Fluid Power & Flow Control Total Power Transmission 35.4 % 9.5 % 27.4 % Fluid Power 13.4 % 39.0 % 21.3 % Bearings, Linear & Seals 26.6 % 0.3 % 18.5 % General Maintenance; Hose Products 24.6 % 11.7 % 20.6 % Specialty Flow Control — % 39.5 % 12.2 % Total 100.0 % 100.0 % 100.0 % Year Ended June 30, 2019 Service Center Based Distribution Fluid Power & Flow Control Total Power Transmission 33.9 % 1.6 % 24.4 % Fluid Power 13.5 % 39.4 % 21.1 % Bearings, Linear & Seals 27.5 % 0.3 % 19.5 % General Maintenance; Hose Products 25.1 % 5.3 % 19.3 % Specialty Flow Control — % 53.4 % 15.7 % Total 100.0 % 100.0 % 100.0 % |
Business Combinations
Business Combinations | 12 Months Ended |
Jun. 30, 2021 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS The operating results of all acquired entities are included within the consolidated operating results of the Company from the date of each respective acquisition. Fiscal 2021 Acquisitions On December 31, 2020, the Company acquired 100% of the outstanding shares of Gibson Engineering (Gibson), a Norwood, Massachusetts provider of automation products, services, and engineered solutions focused on machine vision, motion control, mobile and collaborative robotic solutions, intelligent sensors, and other related equipment. Gibson is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $15,450, net tangible assets acquired were $1,030, and intangible assets including goodwill were $14,420 based upon preliminary estimated fair values at the acquisition date, which are subject to adjustment. The purchase price includes $1,938 of acquisition holdback payments, which are included in other current liabilities and other liabilities on the consolidated balance sheet as of June 30, 2021, and which will be paid on the first and second anniversaries of the acquisition date with interest at a fixed rate of 1.0% per annum. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements. On October 5, 2020, the Company acquired substantially all of the net assets of Advanced Control Solutions (ACS), which operates four locations in Georgia, Tennessee and Alabama. ACS is a provider of automation products, services, and engineered solutions focused on machine vision equipment and software, mobile and collaborative robotic solutions, intelligent sensors, logic controllers, and other related equipment. ACS is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $17,867, net tangible assets acquired were $1,210, and intangible assets including goodwill were $16,657 based upon estimated fair values at the acquisition date. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements. Fiscal 2020 Acquisitions On August 21, 2019, the Company acquired 100% of the outstanding shares of Olympus Controls (Olympus), a Portland, Oregon automation solutions provider - including design, assembly, integration, and distribution - of motion control, machine vision, and robotic technologies. Olympus is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $36,642, net tangible assets acquired were $9,540, and intangible assets including goodwill was $27,102 based upon estimated fair values at the acquisition date. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements. Fiscal 2019 Acquisitions On March 4, 2019, the Company acquired substantially all of the net assets of MilRoc Distribution (MilRoc) and Woodward Steel (Woodward). MilRoc is an Oklahoma based distributor of oilfield specific products, namely pumps and valves, as well as equipment repair services and industrial parts to the oil & gas industry. Woodward is an Oklahoma based steel supplier to the oil & gas and agriculture industries. MilRoc and Woodward are both included in the Service Center Based Distribution segment. The purchase price for the acquisition was $35,000, net tangible assets acquired were $17,788, and intangible assets including goodwill was $17,212 based upon estimated fair values at the acquisition date. The purchase price includes $4,375 of acquisition holdback payments, of which $1,244 and $1,666 were paid during fiscal 2021 and 2020, respectively. The remaining balance of $1,465 is included in other current liabilities on the consolidated balance sheet as of June 30, 2021, and which will be paid on the third anniversary of the acquisition date with interest at a fixed rate of 2.0% per annum. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements. On November 2, 2018, the Company acquired substantially all of the net assets of Fluid Power Sales, Inc. (FPS), a Baldwinsville, New York based manufacturer and distributor of fluid power components, specializing in the engineering and fabrication of manifolds and power units. FPS is included in the Fluid Power & Flow Control segment. The purchase price for the acquisition was $8,066, net tangible assets acquired were $4,151, and goodwill was $3,915 based upon estimated fair values at the acquisition date. The purchase price included $1,200 of acquisition holdback payments, of which $600 was paid during fiscal years 2021 and 2020. The Company funded this acquisition using available cash. The acquisition price and the results of operations for the acquired entity are not material in relation to the Company's consolidated financial statements. Holdback Liabilities for Acquisitions Acquisition holdback payments of approximately $2,569 and $969 will be made in fiscal 2022 and 2023, respectively. The related liabilities for these payments are recorded in the consolidated balance sheets in other current liabilities for the amounts due in fiscal year 2022 and other liabilities for the amounts due in fiscal year 2023. |
Inventories
Inventories | 12 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consist of the following: June 30, 2021 2020 U.S. inventories at average cost $ 387,456 $ 431,866 Foreign inventories at average cost 126,945 112,795 514,401 544,661 Less: Excess of average cost over LIFO cost for U.S. inventories 151,854 155,511 Inventories on consolidated balance sheets $ 362,547 $ 389,150 The overall impact of LIFO layer liquidations increased gross profit by $3,895, $1,990, and $112 in fiscal 2021, fiscal 2020, and fiscal 2019, respectively. |
Goodwill and Intangibles
Goodwill and Intangibles | 12 Months Ended |
Jun. 30, 2021 | |
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, 2021 and 2020 are as follows: Service Center Based Distribution Fluid Power & Flow Control Total Balance at July 1, 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 Goodwill acquired during the year — 15,757 15,757 Other, primarily currency translation 3,726 — 3,726 Balance at June 30, 2021 $ 212,296 $ 347,781 $ 560,077 The Company has eight (8) reporting units for which an annual goodwill impairment assessment was performed as of January 1, 2021. The Company concluded that seven (7) of the reporting units’ fair values exceeded their carrying amounts by at least 25% as of January 1, 2021. The fair value of the final reporting unit, which is comprised of the FCX Performance Inc. (FCX) operations, exceeded its carrying value by 14%. The FCX reporting unit has a goodwill balance of $309,012 as of June 30, 2021. The Company had 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 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 was the result of the overall decline in the industrial economy, specifically slower demand in FCX's end markets, which led to reduced spending by customers and reduced revenue expectations. 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; (ii) inability to achieve the sales from our strategic growth initiatives. At June 30, 2021 and 2020, accumulated goodwill impairment losses subsequent to fiscal year 2002 totaled $64,794 related to the Service Center Based Distribution segment and $167,605 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, 2021 Amount Accumulated Net Finite-Lived Intangibles: Customer relationships $ 353,028 $ 143,862 $ 209,166 Trade names 104,780 37,626 67,154 Vendor relationships 11,469 9,859 1,610 Other 2,070 372 1,698 Total Intangibles $ 471,347 $ 191,719 $ 279,628 June 30, 2020 Amount Accumulated Net 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 Amounts include the impact of foreign currency translation. Fully amortized amounts are written off. During fiscal 2021, 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 $ 10,390 20.0 Trade names 3,840 15.0 Other 1,090 5.9 Total Intangibles Acquired $ 15,320 17.7 Identifiable intangible assets with finite lives are reviewed for impairment when changes in conditions indicate carrying value may not be recoverable. The Company has three asset groups that have significant exposure to oil and gas end markets. Due to the prolonged economic downturn in these end markets, the Company determined during the second quarter of fiscal 2021 that certain carrying values may not be recoverable. The Company determined that an impairment existed in two of the three asset groups as the asset groups' carrying values exceeded the sum of the undiscounted cash flows. The fair values of the long-lived assets were then determined using the income approach, and the analyses resulted in the measurement of an intangible asset impairment loss of $45,033, which was recorded during the second quarter of fiscal 2021, as the fair value of the intangible assets was determined to be zero. 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, EBITDA, and discount rates. 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. The analyses of these asset groups also resulted in a fixed asset impairment loss and leased asset impairment loss of $1,983 and $2,512, respectively, which were recorded during the second quarter of fiscal 2021. Sustained significant softness in certain end market concentrations could result in impairment of certain intangible assets in future periods. Amortization of identifiable intangibles totaled $34,365, $41,553 and $41,883 in fiscal 2021, 2020 and 2019, 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, 2021 is estimated to be $31,400 for 2022, $29,500 for 2023, $25,800 for 2024, $23,600 for 2025 and $21,900 for 2026. |
Debt
Debt | 12 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT A summary of long-term debt, including the current portion, follows: June 30, 2021 2020 Term Loan $ 550,250 $ 589,250 Trade receivable securitization facility 188,300 175,000 Series C Notes 40,000 120,000 Series D Notes 25,000 25,000 Series E Notes 25,000 25,000 Other 846 1,026 Total debt $ 829,396 $ 935,276 Less: unamortized debt issuance costs 1,016 1,487 $ 828,380 $ 933,789 Revolving Credit Facility & Term Loan In January 2018, the Company refinanced its existing credit facility and entered into a new five-year credit facility with a group of banks expiring in January 2023. This agreement provides for a $780,000 unsecured term loan and a $250,000 unsecured revolving credit facility. Fees on this facility range from 0.10% to 0.20% per year based upon the Company's leverage ratio at each quarter end. Borrowings under this agreement carry variable interest rates tied to either LIBOR or prime at the Company's discretion. The Company had no amount outstanding under the revolver as of June 30, 2021 and June 30, 2020. Unused lines under this facility, net of outstanding letters of credit of $200 and $1,873, respectively, to secure certain insurance obligations, totaled $249,800 and $248,127 at June 30, 2021 and June 30, 2020, respectively, and were available to fund future acquisitions or other capital and operating requirements. The interest rate on the term loan was 1.88% and 1.94% as of June 30, 2021 and June 30, 2020, respectively. Additionally, the Company had letters of credit outstanding with a separate bank, not associated with the revolving credit agreement, in the amount of $4,540 and $4,475 as of June 30, 2021 and June 30, 2020, respectively, in order to secure certain insurance obligations. Trade Receivable Securitization Facility In August 2018, the Company established a trade receivable securitization facility (the “AR Securitization Facility”) with a termination date of August 31, 2021. On March 26, 2021, the Company amended the AR Securitization Facility to expand the eligible receivables, which increased the maximum availability to $250,000 and increased the drawn fees on the AR Securitization Facility to 0.98% per year. Availability is further subject to changes in the credit ratings of our customers, customer concentration levels or certain characteristics of the accounts receivable being transferred and, therefore, at certain times, we may not be able to fully access the $250,000 of funding available under the AR Securitization Facility. The AR Securitization Facility effectively increases the Company’s borrowing capacity by collateralizing a portion of the amount of the U.S. operations’ trade accounts receivable. The Company uses the proceeds from the AR Securitization Facility as an alternative to other forms of debt, effectively reducing borrowing costs. Borrowings under this facility carry variable interest rates tied to LIBOR. The interest rate on the AR Securitization Facility as of June 30, 2021 and June 30, 2020 was 1.20% and 1.07%, respectively. The termination date of the AR Securitization is now March 26, 2024. Unsecured Shelf Facility At June 30, 2021 and June 30, 2020, the Company had borrowings outstanding under its unsecured shelf facility agreement with Prudential Investment Management of $90,000 and $170,000, respectively. Fees on this facility range from 0.25% to 1.25% per year based on the Company's leverage ratio at each quarter end. The "Series C" notes, which had an original principal amount of $120,000, carry a fixed interest rate of 3.19%. During Fiscal 2021, two principal payments of $40,000 each were made on the "Series C" notes and the remaining balance of $40,000 is due in July 2022. The "Series D" notes have a remaining principal amount of $25,000, carry a fixed interest rate of 3.21%, and are due in October 2023. The "Series E" notes have a principal amount of $25,000, carry a fixed interest rate of 3.08%, and are due in October 2024. Other Long-Term Borrowing In 2014, the Company assumed $2,359 of debt as a part of the headquarters facility acquisition. The 1.50% fixed interest rate note is held by the State of Ohio Development Services Agency, maturing in May 2024. The table below summarizes the aggregate maturities of amounts outstanding under long-term borrowing arrangements for each of the next five years: Fiscal Year Aggregate Maturity 2022 $ 44,118 2023 546,622 2024 213,551 2025 25,105 Covenants The credit facility and the unsecured shelf facility contain restrictive covenants regarding liquidity, net worth, financial ratios, and other covenants. At June 30, 2021, the most restrictive of these covenants required that the Company have net indebtedness less than 3.75 times consolidated income before interest, taxes, depreciation and amortization (as defined). At June 30, 2021, the Company's net indebtedness was less than 2.5 times consolidated income before interest, taxes, depreciation and amortization (as defined). The Company was in compliance with all financial covenants at June 30, 2021. |
Derivatives Derivatives
Derivatives Derivatives | 12 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | DERIVATIVES Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive loss and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Marketable securities measured at fair value at June 30, 2021 and June 30, 2020 totaled $16,844 and $12,259, respectively. The majority of these marketable securities are held in a rabbi trust for a non-qualified deferred compensation plan. The marketable securities are included in other assets on the consolidated balance sheets and their fair values were valued using quoted market prices (Level 1 in the fair value hierarchy). As of June 30, 2021, the carrying value of the Company's fixed interest rate debt outstanding under its unsecured shelf facility agreement with Prudential Investment Management approximates fair value (Level 2 in the fair value hierarchy). The revolving credit facility and the term loan contain variable interest rates and their carrying values approximate fair value (Level 2 in the fair value hierarchy). |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income Before Income Taxes The components of income before income taxes are as follows: Year Ended June 30, 2021 2020 2019 U.S. $ 152,202 $ 36,161 $ 204,462 Foreign 24,860 19,075 (9,981) Income before income taxes $ 177,062 $ 55,236 $ 194,481 Provision The provision (benefit) for income taxes consists of: Year Ended June 30, 2021 2020 2019 Current: Federal $ 46,685 $ 31,149 $ 34,437 State and local 11,035 7,580 7,965 Foreign 5,665 5,757 5,718 Total current 63,385 44,486 48,120 Deferred: Federal (24,168) (8,594) 6,265 State and local (4,740) (3,098) 1,947 Foreign (2,172) (1,600) (5,844) Total deferred (31,080) (13,292) 2,368 Total $ 32,305 $ 31,194 $ 50,488 During the third quarter of fiscal 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted in the U.S. As a result of the CARES Act, the Company recorded a $1,000 tax benefit related to the carryback of a tax net operating loss incurred in a year in which the U.S. federal corporate income tax rate was 21% to a year in which the U.S. federal corporate income tax rate was higher. Effective Tax Rates The following reconciles the U.S. federal statutory income tax rate to the Company’s effective income tax rate: Year Ended June 30, 2021 2020 2019 Statutory income tax rate 21.0 % 21.0 % 21.0 % Effects of: State and local taxes 3.2 6.4 4.4 U.S. federal tax reform/CARES Act NOL carryback — (1.8) (0.3) Goodwill impairment — 31.4 — Stock compensation (2.5) (1.3) (0.5) GILTI/FDII 0.1 3.6 0.7 R & D credit (1.5) (1.2) (0.4) U.S. tax on foreign income, net (0.5) (3.1) 0.5 Impact of foreign operations — 1.6 (0.6) Non-deductibles/Deductible dividend — 0.6 0.4 Interest deduction (1.1) (4.0) (1.2) Valuation allowance 0.1 2.6 2.9 Other, net (0.6) 0.7 (0.9) Effective income tax rate 18.2 % 56.5 % 26.0 % Consolidated Balance Sheets Significant components of the Company’s deferred tax assets and liabilities are as follows: June 30, 2021 2020 Deferred tax assets: Compensation liabilities not currently deductible $ 17,436 $ 17,252 Other expenses and reserves not currently deductible 18,676 15,272 Leases 23,126 24,016 Net operating loss carryforwards 9,262 8,859 Hedging instrument 2,794 6,406 Other 799 757 Total deferred tax assets $ 72,093 $ 72,562 Less: Valuation allowance (8,542) (7,494) Deferred tax assets, net of valuation allowance $ 63,551 $ 65,068 Deferred tax liabilities: Inventories $ (9,215) $ (8,284) Goodwill and intangibles (38,534) (58,506) Leases (22,475) (23,407) Depreciation and differences in property bases (6,214) (13,018) Total deferred tax liabilities (76,438) (103,215) Net deferred tax liabilities $ (12,887) $ (38,147) Net deferred tax liabilities are classified as follows: Other assets $ 6,373 $ 4,749 Other liabilities (19,260) (42,896) Net deferred tax liabilities $ (12,887) $ (38,147) As of June 30, 2021 and 2020, the Company had foreign net operating loss carryforwards of approximately $35,415 and $29,584, respectively, the tax benefit of which is approximately $8,445 and $7,929, respectively. These loss carryforwards will expire at various dates beginning in 2033. Also, as of June 30, 2021 and 2020, the Company had state net operating loss carryforwards, the tax benefit of which is approximately $1,034 and $1,177 respectively, which will expire at various dates beginning in 2027. Valuation allowances are provided against deferred tax assets where it is considered more-likely-than-not that the Company will not realize the benefit of such assets. The remaining net deferred tax asset is the amount management believes is more-likely-than-not of being realized. The realization of these deferred tax assets can be impacted by changes to tax laws, statutory tax rates and future income levels. During the years ended June 30, 2021 and 2020, the Company recorded a valuation allowance of $267 and $2,124, respectively, related to certain deferred tax assets in Canada due to the uncertainty in realizing these net deferred tax assets. The total valuation allowance provided against the deferred tax assets in Canada is $8,498 and $7,450 as of June 30, 2021 and 2020, respectively. As of June 30, 2021, the Company had accumulated undistributed earnings of non-U.S. subsidiaries of approximately $121,463. The vast majority of such earnings have previously been subjected to the one-time transition tax or the Global Intangible Low Taxed Income ("GILTI") inclusion. Therefore, any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of our foreign investments would generally be limited to foreign withholding and state income taxes. In addition, we expect foreign tax credits would be available to either offset or partially reduce the tax cost in the event of a distribution. We intend, however, to indefinitely reinvest these earnings and expect future U.S. cash generation to be sufficient to meet future U.S. cash needs. Unrecognized Income Tax Benefits The Company and its subsidiaries file income tax returns in U.S. federal, various state, local and foreign jurisdictions. The following table sets forth the changes in the amount of unrecognized tax benefits for the years ended June 30, 2021, 2020, and 2019: Year Ended June 30, 2021 2020 2019 Unrecognized Income Tax Benefits at beginning of the year $ 4,955 $ 4,979 $ 3,988 Current year tax positions 285 105 105 Prior year tax positions 620 177 1,151 Expirations of statutes of limitations (630) (306) (265) Unrecognized Income Tax Benefits at end of year $ 5,230 $ 4,955 $ 4,979 The Company recognizes interest and penalties related to uncertain tax positions in the provision for income taxes. During 2021, 2020, and 2019, the Company recognized $144, $256, and $161 of expense, respectively, for interest and penalties related to unrecognized income tax benefits in its statements of consolidated income. The Company had a liability for penalties and interest of $1,238, $1,094, and $838 as of June 30, 2021, 2020, and 2019, respectively. The Company does not anticipate a significant change to the total amount of unrecognized income tax benefits within the next twelve months. Included in the balance of unrecognized income tax benefits at June 30, 2021, 2020, and 2019 are $4,986, $4,708, and $4,701 respectively, of income tax benefits that, if recognized, would affect the effective income tax rate. The Company is subject to U.S. federal income tax examinations for the tax years 2018 through 2021 and to state and local income tax examinations for the tax years 2015 through 2021. In addition, the Company is subject to foreign income tax examinations for the tax years 2014 through 2021. The Company’s unrecognized income tax benefits are included in other liabilities in the consolidated balance sheets since payment of cash is not expected within one year, or as a reduction of a deferred tax asset. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Jun. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY Treasury Shares At June 30, 2021, 128 shares of the Company’s common stock held as treasury shares were restricted as collateral under escrow arrangements relating to change in control and director and officer indemnification agreements. Accumulated Other Comprehensive Loss Changes in the accumulated other comprehensive loss for the years ended June 30, 2021, 2020, and 2019, are comprised of the following amounts, shown net of taxes: Foreign currency translation adjustment Unrealized gain (loss) on securities available for sale Post-employment benefits Cash flow hedge Total accumulated other comprehensive loss Balance at July 1, 2018 $ (87,974) $ 50 $ (2,299) $ — $ (90,223) Other comprehensive income (loss) 1,644 — (327) (10,887) (9,570) Amounts reclassified from accumulated other comprehensive loss — — (226) 183 (43) Cumulative effect of adopting accounting standards — (50) — — (50) Net current-period other comprehensive income (loss) 1,644 (50) (553) (10,704) (9,663) Balance at June 30, 2019 (86,330) — (2,852) (10,704) (99,886) Other comprehensive loss (18,764) — (1,662) (12,572) (32,998) Amounts reclassified from accumulated other comprehensive loss — — (50) 3,504 3,454 Net current-period other comprehensive loss (18,764) — (1,712) (9,068) (29,544) Balance at June 30, 2020 (105,094) — (4,564) (19,772) (129,430) Other comprehensive income 24,256 — 687 2,480 27,423 Amounts reclassified from accumulated other comprehensive loss — — 204 8,711 8,915 Net current-period other comprehensive income 24,256 — 891 11,191 36,338 Balance at June 30, 2021 $ (80,838) $ — $ (3,673) $ (8,581) $ (93,092) Other Comprehensive Loss Details of other comprehensive loss are as follows: Year Ended June 30, 2021 2020 2019 Pre-Tax Amount Tax Expense Net Amount Pre-Tax Amount Tax Expense (Benefit) Net Amount Pre-Tax Amount Tax Expense (Benefit) Net Amount Foreign currency translation adjustments $ 24,352 $ 96 $ 24,256 $ (18,499) $ 265 $ (18,764) $ 2,021 $ 377 $ 1,644 Post-employment benefits: Actuarial gain (loss) on re-measurement 903 216 687 (2,192) (530) (1,662) (372) (45) (327) Reclassification of actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs 270 66 204 (66) (16) (50) (306) (80) (226) Unrealized gain (loss) on cash flow hedge 3,250 770 2,480 (16,615) (4,043) (12,572) (14,446) (3,559) (10,887) Reclassification of interest from cash flow hedge into interest expense 11,553 2,842 8,711 4,638 1,134 3,504 244 61 183 Cumulative effect of adopting accounting standard — — — — — — (50) — (50) Other comprehensive loss $ 40,328 $ 3,990 $ 36,338 $ (32,734) $ (3,190) $ (29,544) $ (12,909) $ (3,246) $ (9,663) Net Income Per Share Basic net income per share is based on the weighted-average number of common shares outstanding. Diluted net income per share includes the dilutive effect of potential common shares outstanding. Under the two-class method of computing net income per share, non-vested share-based payment awards that contain rights to receive non-forfeitable dividends are considered participating securities. The Company’s participating securities include Restricted Stock Units ("RSUs") and restricted stock awards. The Company calculated basic and diluted net income per share under both the treasury stock method and the two-class method. For the years presented there were no material differences in the net income per share amounts calculated using the two methods. Accordingly, the treasury stock method is disclosed below. The following table presents amounts used in computing net income per share and the effect on the weighted-average number of shares of dilutive potential common shares: Year Ended June 30, 2021 2020 2019 Net Income $ 144,757 $ 24,042 $ 143,993 Average Shares Outstanding: Weighted-average common shares outstanding for basic computation 38,758 38,658 38,670 Dilutive effect of potential common shares 538 341 490 Weighted-average common shares outstanding for dilutive computation 39,296 38,999 39,160 Net Income Per Share — Basic $ 3.73 $ 0.62 $ 3.72 Net Income Per Share — Diluted $ 3.68 $ 0.62 $ 3.68 Stock awards relating to 234, 726 and 226 shares of common stock were outstanding at June 30, 2021, 2020 and 2019, respectively, but were not included in the computation of diluted earnings per share for the fiscal years then ended as they were anti-dilutive. |
Share - Based Compensation
Share - Based Compensation | 12 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Share-Based Incentive Plans Following approval by the Company's shareholders in October 2019, the 2019 Long-Term Performance Plan (the "2019 Plan") replaced the 2015 Long-Term Performance Plan. The 2019 Plan, which expires in 2024, provides for granting of SARs, stock options, stock awards, cash awards, and such other awards or combination thereof as the Executive Organization and Compensation Committee or, in the case of director awards, the Corporate Governance Committee of the Board of Directors (together referred to as the Committee) may determine to officers, other key employees and members of the Board of Directors. Grants are generally made at regularly scheduled committee meetings. Compensation costs charged to expense under award programs paid (or to be paid) with shares (including SARs, stock options, performance shares, restricted stock, and RSUs) are summarized in the table below: Year Ended June 30, 2021 2020 2019 SARs and options $ 2,526 $ 2,954 $ 2,440 Performance shares 2,494 854 2,082 Restricted stock and RSUs 3,960 3,146 2,391 Total compensation costs under award programs $ 8,980 $ 6,954 $ 6,913 Such amounts are included in selling, distribution and administrative expense in the accompanying statements of consolidated income. The total income tax benefit recognized in the statements of consolidated income for share-based compensation plans was $6,649, $2,189 and $2,709 for fiscal years 2021, 2020 and 2019, respectively. It has been the practice of the Company to issue shares from treasury to satisfy requirements of awards paid with shares. The aggregate unrecognized compensation cost for share-based award programs with the potential to be paid at June 30, 2021 is summarized in the table below: June 30, 2021 Average Expected Period of Expected Recognition (Years) SARs and options $ 2,848 2.1 Performance shares 5,172 1.7 Restricted stock and RSUs 5,352 2.5 Total unrecognized compensation costs under award programs $ 13,372 2.1 Cost of these programs will be recognized as expense over the weighted-average remaining vesting period of 2.1 years. The aggregate number of shares of common stock which may be awarded under the 2019 Plan is 2,250; shares available for future grants at June 30, 2021 were 2,009. Stock Appreciation Rights and Stock Options The weighted-average assumptions used for SARs and stock option grants issued in fiscal 2021, 2020 2021 2020 2019 Expected life, in years 7.0 6.2 6.0 Risk free interest rate 0.5 % 1.6 % 2.8 % Dividend yield 1.9 % 2.3 % 1.8 % Volatility 32.0 % 23.7 % 22.5 % Per share fair value of SARs granted during the year $17.97 $10.12 $16.15 The expected life is based upon historical exercise experience of the officers, other key employees and members of the Board of Directors. The risk free interest rate is based upon U.S. Treasury zero-coupon bonds with remaining terms equal to the expected life of the SARs and stock options. The assumed dividend yield has been estimated based upon the Company’s historical results and expectations for changes in dividends and stock prices. The volatility assumption is calculated based upon historical daily price observations of the Company’s common stock for a period equal to the expected life. SARs are redeemable solely in Company common stock. The exercise price of stock option awards may be settled by the holder with cash or by tendering Company common stock. A summary of SARs and stock options activity is presented below : Shares Weighted-Average Year Ended June 30, 2021 (Shares in thousands) Outstanding, beginning of year 1,620 $ 51.07 Granted 68 69.05 Exercised (527) 43.16 Forfeited (3) 59.18 Outstanding, end of year 1,158 $ 55.70 Exercisable at end of year 728 $ 52.59 Expected to vest at end of year 1,152 $ 55.69 The weighted-average remaining contractual terms for SARs and stock options outstanding, exercisable, and expected to vest at June 30, 2021 were 6.3, 5.4, and 6.3 years, respectively. The aggregate intrinsic values of SARs and stock options outstanding, exercisable, and expected to vest at June 30, 2021 were $40,928 $27,988, and $40,742, respectively. The aggregate intrinsic value of the SARs and stock options exercised during fiscal 2021, 2020, and 2019 was $21,189, $3,460, and $3,363, respectively. The total fair value of shares vested during fiscal 2021, 2020, and 2019 was $2,880, $2,285, and $1,846, respectively. Performance Shares Performance shares are paid in shares of Applied stock at the end of a three-year period provided the Company achieves goals established by the Committee. The number of Applied shares payable will vary depending on the level of the goals achieved. A summary of non-vested performance shares activity at June 30, 2021 is presented below: Shares Weighted-Average Grant-Date Fair Value Year Ended June 30, 2021 (Shares in thousands) Non-vested, beginning of year 56 $ 54.62 Awarded 46 53.53 Vested (37) 51.50 Non-vested, end of year 65 $ 55.64 The Committee set three one-year goals for each of the 2021, 2020, and 2019 grants. Each fiscal year during the three-year term has its own separate goals, tied to the Company’s earnings before interest, tax, depreciation, and amortization (EBITDA) and after-tax return on assets (ROA). Achievement during any particular fiscal year is awarded and “banked” for payout at the end of the three-year term. For the outstanding grants as of June 30, 2021, the maximum number of shares that could be earned in future periods was 97. Restricted Stock and Restricted Stock Units Restricted stock award recipients are entitled to receive dividends on, and have voting rights with respect to their respective shares, but are restricted from selling or transferring the shares prior to vesting. Restricted stock awards vest over periods of one to four years. RSUs are grants valued in shares of Applied stock, but shares are not issued until the grants vest three to five years from the award date, assuming continued employment with Applied. Applied primarily pays dividend equivalents on RSUs on a current basis, however dividend equivalents on RSU grants under the 2019 Plan will be paid upon vesting. A summary of the status of the Company’s non-vested restricted stock and RSUs at June 30, 2021 is presented below: Shares Weighted-Average Grant-Date Fair Value Year Ended June 30, 2021 (Share amounts in thousands) Non-vested, beginning of year 130 $ 59.91 Granted 94 71.28 Forfeitures (2) 70.85 Vested (45) 60.86 Non-vested, end of year 177 $ 65.57 |
Leases
Leases | 12 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Leases of Lessee Disclosure | LEASES The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is recorded in selling, distribution and administrative expense on the statements of consolidated income. Operating lease costs and short-term lease costs were $31,778 and $9,929, respectively, for the year ended June 30, 2021 and $33,152 and $10,581,respectively, for the year ended June 30, 2020. Variable lease costs and sublease income were not material. Information related to operating leases is as follows: June 30, 2021 2020 Operating lease assets, net $ 87,111 $ 90,636 Operating lease liabilities Other current liabilities $ 27,359 $ 27,231 Other liabilities 64,248 67,926 Total operating lease liabilities $ 91,607 $ 95,157 June 30, 2021 2020 Weighted average remaining lease term (years) 5.6 3.6 Weighted average incremental borrowing rate 3.26 % 3.45 % Year Ended June 30, 2021 2020 Cash paid for operating leases $ 33,695 $ 34,642 Right of use assets obtained in exchange for new operating lease liabilities $ 25,556 $ 39,136 The table below summarizes the aggregate maturities of liabilities pertaining to operating leases with terms greater than one year for each of the next five years: Fiscal Year Maturity of Operating Lease Liabilities 2022 $ 29,853 2023 22,982 2024 17,896 2025 10,462 2026 6,547 Thereafter 11,410 Total lease payments 99,150 Less interest 7,543 Present value of lease liabilities $ 91,607 The Company maintains lease agreements for many of the operating facilities of businesses it acquires from previous owners. In many cases, the previous owners of the business acquired become employees of Applied and occupy management positions within those businesses. The payments under lease agreements of this nature totaled $2,100 in 2021, $2,500 in 2020, and $2,400 in 2019. |
Segment Information
Segment Information | 12 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT INFORMATION The Company's reportable segments are: Service Center Based Distribution and Fluid Power & Flow Control. These reportable segments contain the Company's various operating segments which have been aggregated based upon similar economic and operating characteristics. The Service Center Based Distribution segment operates through local service centers and distribution centers with a focus on providing products and services addressing the maintenance and repair of motion control infrastructure and production equipment. Products primarily include industrial bearings, motors, belting, drives, couplings, pumps, linear motion products, hydraulic and pneumatic components, filtration supplies, and hoses, as well as other related supplies for general operational needs of customers’ machinery and equipment. The Fluid Power & Flow Control segment includes our operations that specialize in distributing, engineering, designing, integrating, and repairing hydraulic and pneumatic fluid power technologies, and engineered flow control products and services. This segment also includes our operations that focus on advanced automation solutions including machine vision, robotics, motion control, and smart technologies. The accounting policies of the Company’s reportable segments are generally the same as those described in note 1. Intercompany sales, primarily from the Fluid Power & Flow Control segment to the Service Center Based Distribution segment of $31,615, $29,582, and $28,677, in 2021, 2020, and 2019, respectively, have been eliminated in the following table. Segment Financial Information Service Center Fluid Power & Flow Control Total Year Ended June 30, 2021 Net sales $ 2,199,533 $ 1,036,386 $ 3,235,919 Operating income for reportable segments 225,206 121,782 346,988 Assets used in the business 1,332,720 939,087 2,271,807 Depreciation and amortization of property 17,155 3,625 20,780 Capital expenditures 13,735 2,117 15,852 Year Ended June 30, 2020 Net sales $ 2,241,949 $ 1,003,703 $ 3,245,652 Operating income for reportable segments 211,667 109,847 321,514 Assets used in the business 1,314,011 969,540 2,283,551 Depreciation and amortization of property 17,133 4,063 21,196 Capital expenditures 17,063 3,052 20,115 Year Ended June 30, 2019 Net sales $ 2,452,905 $ 1,019,834 $ 3,472,739 Operating income for reportable segments 254,954 112,117 367,071 Assets used in the business 1,265,093 1,066,604 2,331,697 Depreciation and amortization of property 15,982 4,254 20,236 Capital expenditures 16,475 2,495 18,970 A reconciliation of operating income for reportable segments to the consolidated income before income taxes Year Ended June 30, 2021 2020 2019 Operating income for reportable segments $ 346,988 $ 321,514 $ 367,071 Adjustments for: Intangible amortization — Service Center Based Distribution 5,426 12,385 13,639 Intangible amortization — Fluid Power & Flow Control 28,938 29,168 28,244 Impairment — Service Center Based Distribution 49,528 — 31,594 Goodwill Impairment — Fluid Power & Flow Control — 131,000 — Corporate and other expense, net 57,642 59,972 59,806 Total operating income 205,454 88,989 233,788 Interest expense, net 30,592 36,535 40,188 Other income, net (2,200) (2,782) (881) Income before income taxes $ 177,062 $ 55,236 $ 194,481 Fluctuations in corporate and other expense, net, are due to changes in corporate expenses, as well as in the amounts and levels of certain expenses being allocated to the segments. The expenses being allocated include corporate charges for working capital, logistics support and other items. Geographic Information Long-lived assets are based on physical locations and are comprised of the net book value of property and right of use assets. Information by geographic area is as follows: June 30, 2021 2020 2019 Long-Lived Assets: United States $ 173,335 $ 185,475 $ 112,812 Canada 21,458 20,575 8,871 Other Countries 7,907 6,487 2,619 Total $ 202,700 $ 212,537 $ 124,302 |
Other Income, Net
Other Income, Net | 12 Months Ended |
Jun. 30, 2021 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME, NET | OTHER INCOME, NET Other income, net, consists of the following: Year Ended June 30, 2021 2020 2019 Unrealized gain on assets held in rabbi trust for a non-qualified deferred compensation plan $ (4,048) $ (458) $ (689) Foreign currency transaction losses (gains) 2,091 (2,463) 334 Net other periodic post-employment costs (benefits) 283 (120) (85) Life insurance (income) expense, net (296) 233 (479) Other, net (230) 26 38 Total other income, net $ (2,200) $ (2,782) $ (881) |
Subsequent Events Subsequent Ev
Subsequent Events Subsequent Events | 12 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTSWe have evaluated events and transactions occurring subsequent to June 30, 2021 through the date the financial statements were issued. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Jun. 30, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
VALUATION AND QUALIFYING ACCOUNTS | APPLIED INDUSTRIAL TECHNOLOGIES, INC. & SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED JUNE 30, 2021, 2020, AND 2019 (in thousands) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E DESCRIPTION Balance at Beginning of Period Additions Charged to Cost and Expenses Additions (Deductions) Charged to Other Accounts Deductions from Reserve Balance at End of Period Year Ended June 30, 2021 Reserve deducted from assets to which it applies — Accounts receivable: Allowance for doubtful accounts $ 13,661 $ 6,540 $ — $ 3,746 (B) $ 16,455 Returns reserve 9,883 — (111) (A) — 9,772 $ 23,544 $ 6,540 $ (111) $ 3,746 $ 26,227 Year Ended June 30, 2020 Reserve deducted from assets to which it applies — Accounts receivable: Allowance for doubtful accounts $ 10,498 $ 14,055 $ — $ 10,892 (B) $ 13,661 Returns reserve 7,265 — 2,618 (A) — 9,883 $ 17,763 $ 14,055 $ 2,618 $ 10,892 $ 23,544 Year Ended June 30, 2019 Reserve deducted from assets to which it applies — Accounts receivable: Allowance for doubtful accounts $ 10,964 $ 4,058 $ — $ 4,524 (B) $ 10,498 Returns reserve 2,602 738 3,925 (A) — 7,265 $ 13,566 $ 4,796 $ 3,925 $ 4,524 $ 17,763 (A) Amounts in the years ending June 30, 2021, 2020 and 2019 represent reserves recorded for the return of merchandise by customers. The Company adopted ASC 606 - Revenue from Contracts with Customers effective July 1, 2018 which requires the Company's sales returns reserve to be established at the gross sales value with an asset established for the value of the expected product to be returned. (B) Amounts represent uncollectible accounts charged off. |
Business and Accounting Polic_2
Business and Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Business | Business Applied Industrial Technologies, Inc. and subsidiaries (the “Company” or “Applied”) is a leading value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies. Our leading brands, specialized services, and comprehensive knowledge serve MRO (Maintenance, Repair & Operations) and OEM (Original Equipment Manufacturer) end users in virtually all industrial markets through our multi-channel capabilities that provide choice, convenience, and expertise. Although the Company does not generally manufacture the products it sells, it does assemble and repair certain products and systems. |
Consolidation | ConsolidationThe consolidated financial statements include the accounts of Applied Industrial Technologies, Inc. and its subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. |
Foreign Currency | Foreign Currency The financial statements of the Company’s Canadian, Mexican, Australian and New Zealand subsidiaries are measured using local currencies as their functional currencies. Assets and liabilities are translated into U.S. dollars at current exchange rates, while income and expenses are translated at average exchange rates. Translation gains and losses are reported in other comprehensive loss in the statements of consolidated comprehensive income. Gains and losses resulting from transactions denominated in foreign currencies are included in the statements of consolidated income as a component of other income, net. |
Estimates | Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. Actual results may differ from the estimates and assumptions used in preparing the consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term, highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are carried at cost, which approximates fair value. |
Marketable Securities | Marketable Securities The primary marketable security investments of the Company include money market and mutual funds held in a rabbi trust for a non-qualified deferred compensation plan. These are included in other assets in the consolidated balance sheets, are classified as trading securities, and are reported at fair value based on quoted market prices. Changes in the fair value of the investments during the period are recorded in other income, net in the statements of consolidated income. |
Concentration Risk, Credit Risk, Policy | Concentration of Credit Risk The Company has a broad customer base representing many diverse industries across North America, Australia, New Zealand, and Singapore. As such, the Company does not believe that a significant concentration of credit risk exists in its accounts receivable. The Company’s cash and cash equivalents consist of deposits with commercial banks and regulated non-bank subsidiaries. While the Company monitors the creditworthiness of these institutions, a crisis in the financial systems could limit access to funds and/or result in the loss of principal. The terms of these deposits and investments provide that all monies are available to the Company upon demand. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at their estimated net realizable value and consist of amounts billed or billable and currently due from customers. The Company maintains an allowance for doubtful accounts, which reflects management’s best estimate of probable losses based on an analysis of customer accounts, known troubled accounts, historical experience with write-offs, and other currently available evidence. |
Allowances for Doubtful Accounts | Allowances for Doubtful Accounts The Company evaluates the collectibility of trade accounts receivable based on a combination of factors. Initially, the Company estimates an allowance for doubtful accounts as a percentage of net sales based on historical bad debt |
Inventories | Inventories Inventories are valued at average cost, using the last-in, first-out (LIFO) method for U.S. inventories and the average cost method for foreign inventories. The Company adopted the link chain dollar value LIFO method of accounting for U.S. inventories in fiscal 1974. At June 30, 2021, approximately 19.8% of the Company’s domestic inventory dollars relate to LIFO layers added in the 1970s. The Company maintains five LIFO pools based on the following product groupings: bearings, power transmission products, rubber products, fluid power products and other products. LIFO layers and/or liquidations are determined consistently year-to-year. The Company evaluates the recoverability of its slow moving and inactive inventories at least quarterly. The Company estimates the recoverable cost of such inventory by product type while considering factors such as its age, historic and current demand trends, the physical condition of the inventory, as well as assumptions regarding future demand. The Company’s ability to recover its cost for slow moving or obsolete inventory can be affected by such factors as general market conditions, future customer demand, and relationships with suppliers. Historically, the Company’s inventories have demonstrated long shelf lives, are not highly susceptible to obsolescence, and, in certain instances, can be eligible for return under supplier return programs. |
Supplier Purchasing Programs | Supplier Purchasing Programs The Company enters into agreements with certain suppliers providing inventory purchase incentives. The Company’s inventory purchase incentive arrangements are unique to each supplier and are generally annual programs ending at either the Company’s fiscal year end or the supplier’s year end; however, program length and ending dates can vary. Incentives are received in the form of cash or credits against purchases upon attainment of specified purchase volumes and are received either monthly, quarterly or annually. The incentives are generally a specified percentage of the Company’s net purchases based upon achieving specific purchasing volume levels. These percentages can increase or decrease based on changes in the volume of purchases. The Company accrues for the receipt of these inventory purchase incentives based upon cumulative purchases of inventory. The percentage level utilized is based upon the estimated total volume of purchases expected during the life of the program. Supplier programs are analyzed each quarter to determine the appropriateness of the amount of purchase incentives accrued. Upon program completion, differences between estimates and actual incentives subsequently received have not been material. Benefits under these supplier purchasing programs are recognized under the Company’s inventory accounting methods as a reduction of cost of sales when the inventories representing these purchases are recorded as cost of sales. Accrued incentives expected to be settled as a credit against future purchases are reported on the consolidated balance sheets as an offset to amounts due to the related supplier. |
Property and related Depreciation and Amortization | Property and Related Depreciation and Amortization Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets and is included in selling, distribution and administrative expense in the accompanying statements of consolidated income. Buildings, building improvements and leasehold improvements are depreciated over ten three |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized. Goodwill is reviewed for impairment annually as of January 1 or whenever changes in conditions indicate an evaluation should be completed. These conditions could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. The Company utilizes the income and market approaches to determine the fair value of reporting units. Evaluating impairment requires significant judgment by management, including estimated future operating results, estimated future cash flows, the long-term rate of growth of the business, and determination of an appropriate discount rate. While the Company uses available information to prepare the estimates and evaluations, actual results could differ significantly. |
Self-Insurance Liabilities | Self-Insurance Liabilities The Company maintains business insurance programs with significant self-insured retention covering workers’ compensation, business, automobile, general product liability and other claims. The Company accrues estimated losses including those incurred but not reported using actuarial calculations, models and assumptions based on historical loss experience. The Company also maintains a self-insured health benefits plan which provides medical benefits to U.S. based employees electing coverage under the plan. The Company estimates its reserve for all unpaid medical claims, including those incurred but not reported, based on historical experience, adjusted as necessary based upon management’s reasoned judgment. |
Revenue Recognition | Revenue Recognition The Company primarily sells purchased products distributed through its network of service centers and recognizes revenue at a point in time when control of the product transfers to the customer, typically upon shipment from an Applied facility or directly from a supplier. For products that ship directly from suppliers to customers, Applied generally acts as the principal in the transaction and recognizes revenue on a gross basis. Revenue recognized over time is not significant. Revenue is measured as the amount of consideration expected to be received in exchange for the products and services provided, net of allowances for product returns, variable consideration, and any taxes collected from customers that will be remitted to governmental authorities. Shipping and handling costs are recognized in net sales when they are billed to the customer. The Company has elected to account for shipping and handling activities as fulfillment costs. There are no significant costs associated with obtaining customer contracts. Payment terms with customers vary by the type and location of the customer and the products or services offered. The Company does not adjust the promised amount of consideration for the effects of significant financing components based on the expectation that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Arrangements with customers that include payment terms extending beyond one year are not significant. The Company’s products are generally sold with a right of return and may include variable consideration in the form of incentives, discounts, credits or rebates. Product returns are estimated based on historical return rates. The returns reserve was $9,772 and $9,883 at June 30, 2021 and June 30, 2020, respectively. The Company estimates and recognizes variable consideration based on historical experience to determine the expected amount to which the Company will be entitled in exchange for transferring the promised goods or services to a customer. The Company records variable consideration as an adjustment to the transaction price in the period it is incurred. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. Shipping and Handling Costs The Company records freight payments to third parties in cost of sales and internal delivery costs in selling, distribution and administrative expense in the accompanying statements of consolidated income. Internal delivery costs in selling, distribution and administrative expense were approximately $15,970, $19,620 and $24,090 for the fiscal years ended June 30, 2021, 2020 and 2019, respectively. |
Income Taxes | Income Taxes Income taxes are determined based upon income and expenses recorded for financial reporting purposes. Deferred income taxes are recorded for estimated future tax effects of differences between the bases of assets and liabilities for financial reporting and income tax purposes, giving consideration to enacted tax laws. Uncertain tax positions meeting a more-likely-than-not recognition threshold are recognized in accordance with Accounting Standards Codification (ASC) Topic 740 - Income Taxes. The Company recognizes accrued interest and penalties related to unrecognized income tax benefits in the provision for income taxes. |
Share-Based Compensation | Share-Based Compensation Share-based compensation represents the cost related to share-based awards granted to employees under the 2019 Long-Term Performance Plan, the 2015 Long-Term Performance Plan, the 2011 Long-Term Performance Plan, or the 2007 Long-Term Performance Plan. The Company measures share-based compensation cost at the grant date, based on the estimated fair value of the award and recognizes the cost over the requisite service period. Non-qualified stock appreciation rights (SARs) and stock options are granted with an exercise price equal to the closing market price of the Company’s common stock at the date of grant and the fair values are determined using a Black-Scholes option pricing model, which incorporates assumptions regarding the expected volatility, the expected option life, the risk-free interest rate and the expected dividend yield. SARs and stock option awards generally vest over four years of continuous service and have ten-year contractual terms. The fair value of restricted stock awards, restricted stock units (RSUs), and performance shares are based on the closing market price of Company common stock on the grant date. |
Treasury Shares | Treasury Shares Shares of common stock repurchased by the Company are recorded at cost as treasury shares and result in a reduction of shareholders’ equity in the consolidated balance sheets. The Company uses the weighted-average cost method for determining the cost of shares reissued. The difference between the cost of the shares and the reissuance price is added to or deducted from additional paid-in capital. |
Derivatives | Derivatives The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. In accordance with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. |
Retirement Savings Plan, Deferred Compensation Plans, and Post-employment Benefit Plans | Retirement Savings Plan Substantially all U.S. employees participate in the Applied Industrial Technologies, Inc. Retirement Savings Plan. Participants may elect 401(k) contributions of up to 50% of their compensation, subject to Internal Revenue Code maximums. The Company partially matches 401(k) contributions by participants. The Company’s expense for matching of employees’ 401(k) contributions was $3,945, $5,959 and $7,711 during 2021, 2020 and 2019, respectively. Deferred Compensation Plans The Company has deferred compensation plans that enable certain employees of the Company to defer receipt of a portion of their compensation. Assets held in these rabbi trusts consist of investments in money market and mutual funds and Company common stock. Post-employment Benefit Plans The Company provides the following post-employment benefits which, except for the Qualified Defined Benefit Retirement Plan and Key Executive Restoration Plan, are unfunded: Supplemental Executive Retirement Benefits Plan The Company has a non-qualified pension plan to provide supplemental retirement benefits to certain officers. Benefits are payable and determinable at retirement based upon a percentage of the participant’s historical compensation. The Executive Organization and Compensation Committee of the Board of Directors froze participant benefits (credited service and final average earnings) and entry into the Supplemental Executive Retirement Benefits Plan (SERP) effective December 31, 2011. The Company recorded net periodic benefit costs associated with the SERP of $401, $317, and $414 in fiscal 2021 , 2020 , and 2019, respectively. The Company expects to make payments of approximately $800 under the SERP in fiscal 2022 and 2023, and approximately $200 in fiscal 2024. Key Executive Restoration Plan In fiscal 2012, the Company adopted the Key Executive Restoration Plan (KERP), a funded, non-qualified deferred compensation plan, to replace the SERP. The Company recorded $334, $189, and $400 of expense associated with this plan in fiscal 2021 , 2020 , and 2019, respectively. Qualified Defined Benefit Retirement Plan The Company has a qualified defined benefit retirement plan that provides benefits to certain hourly employees at retirement. These employees did not participate in the Retirement Savings Plan. The benefits are based on length of service and date of retirement. The plan accruals were frozen as of April 16, 2018, and employees are permitted to participate in the Retirement Savings Plan, following that date. The Company recorded net periodic cost (benefits) associated with this plan of $46, $(116), and $(34) in fiscal 2021 , 2020 , and 2019, respectively Retiree Health Care Benefits The Company provides health care benefits, through third-party policies, to eligible retired employees who pay a specified monthly premium. Premium payments are based upon current insurance rates for the type of coverage provided and are adjusted annually. Certain monthly health care premium payments are partially subsidized by the Company. Additionally, in conjunction with a fiscal 1998 acquisition, the Company assumed the obligation for a post-retirement medical benefit plan which provides health care benefits to eligible retired employees at no cost to the individual. The Company recorded net periodic benefits associated with these plans of $161, $257, and $418 in fiscal 2021 , 2020 , and 2019, respectively. The Company has determined that the related disclosures under ASC Topic 715 - Compensation, Retirement Benefits, for these post-employment benefit plans are not material to the consolidated financial statements. |
Leases | Leases The Company leases facilities for certain service centers, warehouses, distribution centers and office space. The Company also leases office equipment and vehicles. All leases are classified as operating. The Company’s leases expire at various dates through 2031, with terms ranging from 1 year to 15 years. Many of the Company’s real estate leases contain renewal provisions to extend lease terms up to 5 years. The exercise of renewal options is solely at the Company’s discretion. The Company’s lease agreements do not contain material variable lease payments, residual value guarantees or restrictive covenants. The Company does not recognize right-of-use assets or lease liabilities for short-term leases with initial terms of 12 months or less. Leased vehicles comprise the majority of the Company’s short-term leases. All other leases are recorded on the balance sheet with right-of-use assets representing the right to use the underlying asset for the lease term and lease liabilities representing lease payment obligations. The Company’s leases do not provide implicit rates; therefore the Company uses its incremental borrowing rate as the discount rate for measuring lease liabilities. Non-lease components are accounted for separately from lease components. The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is recorded in selling, distribution and administrative expense on the statements of consolidated income. |
Recently Adopted Accounting Guidance | Recently Adopted Accounting Guidance Accounting for current expected credit losses In June 2016, the FASB issued its final standard on measurement of credit losses on financial instruments. This standard, issued as ASU 2016-13, requires that an entity measure impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. This update is effective for annual and interim financial statement periods beginning after December 15, 2019, with early adoption permitted for financial statement periods beginning after December 15, 2018. In November 2018, April 2019, May 2019, November 2019, and February 2020, the FASB issued ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11 and ASU 2020-02, respectively, which clarify the guidance in ASU 2016-13. The Company adopted the new guidance in the first quarter of fiscal 2021. The adoption of this guidance did not have a material impact on the Company's financial statements or related disclosures. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance In December 2019, the FASB issued its final standard on simplifying the accounting for income taxes. This standard, issued as ASU 2019-12, makes a number of changes meant to add or clarify guidance on accounting for income taxes. This update is effective for annual and interim financial statement periods beginning after December 15, 2020, with early adoption permitted in any interim period for which financial statements have not yet been filed. The Company has determined that this pronouncement will not have a material impact on its financial statements and related disclosures. |
Revenue Recognition Revenue R_2
Revenue Recognition Revenue Recognition (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from External Customers by Geographic Areas [Table Text Block] | Disaggregation of Revenues The following tables present the Company's net sales by reportable segment and by geographic areas based on the location of the facility shipping the product for the years ended June 30, 2021, 2020 and 2019. Other countries consist of Mexico, Australia, New Zealand, and Singapore. Year Ended June 30, 2021 Service Center Based Distribution Fluid Power & Flow Control Total Geographic Areas: United States $ 1,768,965 $ 1,013,894 $ 2,782,859 Canada 255,360 — 255,360 Other countries 175,208 22,492 197,700 Total $ 2,199,533 $ 1,036,386 $ 3,235,919 Year Ended June 30, 2020 Service Center Based Distribution Fluid Power & Flow Control Total Geographic Areas: United States $ 1,833,275 $ 986,125 $ 2,819,400 Canada 248,610 — 248,610 Other countries 160,064 17,578 177,642 Total $ 2,241,949 $ 1,003,703 $ 3,245,652 Year Ended June 30, 2019 Service Center Based Distribution Fluid Power & Flow Control Total Geographic Areas: United States $ 2,009,479 $ 1,007,280 $ 3,016,759 Canada 271,305 — 271,305 Other countries 172,121 12,554 184,675 Total $ 2,452,905 $ 1,019,834 $ 3,472,739 |
Disaggregation of Revenue [Table Text Block] | The following tables present the Company’s percentage of revenue by reportable segment and major customer industry for the years ended June 30, 2021, 2020, and 2019: Year Ended June 30, 2021 Service Center Based Distribution Fluid Power & Flow Control Total General Industry 35.8 % 40.0 % 37.2 % Industrial Machinery 9.8 % 26.8 % 15.2 % Food 13.5 % 2.9 % 10.1 % Metals 10.5 % 6.8 % 9.3 % Forest Products 10.7 % 2.9 % 8.2 % Chem/Petrochem 3.3 % 13.6 % 6.6 % Cement & Aggregate 7.9 % 1.1 % 5.7 % Transportation 4.6 % 4.8 % 4.7 % Oil & Gas 3.9 % 1.1 % 3.0 % Total 100.0 % 100.0 % 100.0 % Year Ended June 30, 2020 Service Center Based Distribution Fluid Power & Flow Control Total General Industry 35.0 % 41.2 % 36.8 % Industrial Machinery 9.7 % 24.4 % 14.3 % Food 12.2 % 3.1 % 9.4 % Metals 11.1 % 7.2 % 9.9 % Forest Products 9.3 % 3.7 % 7.6 % Chem/Petrochem 3.3 % 13.4 % 6.4 % Cement & Aggregate 7.3 % 1.0 % 5.4 % Transportation 4.6 % 4.4 % 4.5 % Oil & Gas 7.5 % 1.6 % 5.7 % Total 100.0 % 100.0 % 100.0 % Year Ended June 30, 2019 Service Center Based Distribution Fluid Power & Flow Control Total General Industry 33.7 % 43.0 % 36.3 % Industrial Machinery 10.4 % 21.8 % 13.8 % Food 10.6 % 2.7 % 8.3 % Metals 12.6 % 9.4 % 11.6 % Forest Products 8.0 % 3.1 % 6.6 % Chem/Petrochem 3.1 % 13.8 % 6.3 % Cement & Aggregate 6.7 % 1.0 % 5.0 % Transportation 4.8 % 3.1 % 4.3 % Oil & Gas 10.1 % 2.1 % 7.8 % Total 100.0 % 100.0 % 100.0 % The following tables present the Company’s percentage of revenue by reportable segment and product line for the years ended June 30, 2021, 2020, and 2019: Year Ended June 30, 2021 Service Center Based Distribution Fluid Power & Flow Control Total Power Transmission 37.3 % 7.5 % 27.8 % Fluid Power 13.2 % 38.0 % 21.2 % Bearings, Linear & Seals 29.0 % 0.4 % 19.8 % General Maintenance; Hose Products 20.5 % 16.9 % 19.3 % Specialty Flow Control — % 37.2 % 11.9 % Total 100.0 % 100.0 % 100.0 % Year Ended June 30, 2020 Service Center Based Distribution Fluid Power & Flow Control Total Power Transmission 35.4 % 9.5 % 27.4 % Fluid Power 13.4 % 39.0 % 21.3 % Bearings, Linear & Seals 26.6 % 0.3 % 18.5 % General Maintenance; Hose Products 24.6 % 11.7 % 20.6 % Specialty Flow Control — % 39.5 % 12.2 % Total 100.0 % 100.0 % 100.0 % Year Ended June 30, 2019 Service Center Based Distribution Fluid Power & Flow Control Total Power Transmission 33.9 % 1.6 % 24.4 % Fluid Power 13.5 % 39.4 % 21.1 % Bearings, Linear & Seals 27.5 % 0.3 % 19.5 % General Maintenance; Hose Products 25.1 % 5.3 % 19.3 % Specialty Flow Control — % 53.4 % 15.7 % Total 100.0 % 100.0 % 100.0 % |
Contract with Customer, Asset and Liability [Table Text Block] | Contract Assets The Company’s contract assets consist of un-billed amounts resulting from contracts for which revenue is recognized over time using the cost-to-cost method, and for which revenue recognized exceeds the amount billed to the customer. Activity related to contract assets, which are included in other current assets on the consolidated balance sheet, is as follows: June 30, 2021 June 30, 2020 $ Change % Change Contract assets $ 15,178 $ 8,435 $ 6,743 79.9 % The difference between the opening and closing balances of the Company's contract assets primarily results from the timing difference between the Company's performance and when the customer is billed. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Items of Inventories | Inventories consist of the following: June 30, 2021 2020 U.S. inventories at average cost $ 387,456 $ 431,866 Foreign inventories at average cost 126,945 112,795 514,401 544,661 Less: Excess of average cost over LIFO cost for U.S. inventories 151,854 155,511 Inventories on consolidated balance sheets $ 362,547 $ 389,150 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | 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, 2021 and 2020 are as follows: Service Center Based Distribution Fluid Power & Flow Control Total Balance at July 1, 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 Goodwill acquired during the year — 15,757 15,757 Other, primarily currency translation 3,726 — 3,726 Balance at June 30, 2021 $ 212,296 $ 347,781 $ 560,077 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | 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, 2021 Amount Accumulated Net Finite-Lived Intangibles: Customer relationships $ 353,028 $ 143,862 $ 209,166 Trade names 104,780 37,626 67,154 Vendor relationships 11,469 9,859 1,610 Other 2,070 372 1,698 Total Intangibles $ 471,347 $ 191,719 $ 279,628 June 30, 2020 Amount Accumulated Net 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 |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block] | During fiscal 2021, 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 $ 10,390 20.0 Trade names 3,840 15.0 Other 1,090 5.9 Total Intangibles Acquired $ 15,320 17.7 |
Debt Debt (Tables)
Debt Debt (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | A summary of long-term debt, including the current portion, follows: June 30, 2021 2020 Term Loan $ 550,250 $ 589,250 Trade receivable securitization facility 188,300 175,000 Series C Notes 40,000 120,000 Series D Notes 25,000 25,000 Series E Notes 25,000 25,000 Other 846 1,026 Total debt $ 829,396 $ 935,276 Less: unamortized debt issuance costs 1,016 1,487 $ 828,380 $ 933,789 |
Schedule of Maturities of Long-term Debt [Table Text Block] | The table below summarizes the aggregate maturities of amounts outstanding under long-term borrowing arrangements for each of the next five years: Fiscal Year Aggregate Maturity 2022 $ 44,118 2023 546,622 2024 213,551 2025 25,105 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Components of income before income taxes | The components of income before income taxes are as follows: Year Ended June 30, 2021 2020 2019 U.S. $ 152,202 $ 36,161 $ 204,462 Foreign 24,860 19,075 (9,981) Income before income taxes $ 177,062 $ 55,236 $ 194,481 |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The provision (benefit) for income taxes consists of: Year Ended June 30, 2021 2020 2019 Current: Federal $ 46,685 $ 31,149 $ 34,437 State and local 11,035 7,580 7,965 Foreign 5,665 5,757 5,718 Total current 63,385 44,486 48,120 Deferred: Federal (24,168) (8,594) 6,265 State and local (4,740) (3,098) 1,947 Foreign (2,172) (1,600) (5,844) Total deferred (31,080) (13,292) 2,368 Total $ 32,305 $ 31,194 $ 50,488 |
Reconciliations of federal statutory income tax rate and Company's effective income tax rate | The following reconciles the U.S. federal statutory income tax rate to the Company’s effective income tax rate: Year Ended June 30, 2021 2020 2019 Statutory income tax rate 21.0 % 21.0 % 21.0 % Effects of: State and local taxes 3.2 6.4 4.4 U.S. federal tax reform/CARES Act NOL carryback — (1.8) (0.3) Goodwill impairment — 31.4 — Stock compensation (2.5) (1.3) (0.5) GILTI/FDII 0.1 3.6 0.7 R & D credit (1.5) (1.2) (0.4) U.S. tax on foreign income, net (0.5) (3.1) 0.5 Impact of foreign operations — 1.6 (0.6) Non-deductibles/Deductible dividend — 0.6 0.4 Interest deduction (1.1) (4.0) (1.2) Valuation allowance 0.1 2.6 2.9 Other, net (0.6) 0.7 (0.9) Effective income tax rate 18.2 % 56.5 % 26.0 % |
Components of the Company's net deferred tax assets | Significant components of the Company’s deferred tax assets and liabilities are as follows: June 30, 2021 2020 Deferred tax assets: Compensation liabilities not currently deductible $ 17,436 $ 17,252 Other expenses and reserves not currently deductible 18,676 15,272 Leases 23,126 24,016 Net operating loss carryforwards 9,262 8,859 Hedging instrument 2,794 6,406 Other 799 757 Total deferred tax assets $ 72,093 $ 72,562 Less: Valuation allowance (8,542) (7,494) Deferred tax assets, net of valuation allowance $ 63,551 $ 65,068 Deferred tax liabilities: Inventories $ (9,215) $ (8,284) Goodwill and intangibles (38,534) (58,506) Leases (22,475) (23,407) Depreciation and differences in property bases (6,214) (13,018) Total deferred tax liabilities (76,438) (103,215) Net deferred tax liabilities $ (12,887) $ (38,147) Net deferred tax liabilities are classified as follows: Other assets $ 6,373 $ 4,749 Other liabilities (19,260) (42,896) Net deferred tax liabilities $ (12,887) $ (38,147) |
Reconciliation of the Company's total gross unrecognized income tax benefits | The Company and its subsidiaries file income tax returns in U.S. federal, various state, local and foreign jurisdictions. The following table sets forth the changes in the amount of unrecognized tax benefits for the years ended June 30, 2021, 2020, and 2019: Year Ended June 30, 2021 2020 2019 Unrecognized Income Tax Benefits at beginning of the year $ 4,955 $ 4,979 $ 3,988 Current year tax positions 285 105 105 Prior year tax positions 620 177 1,151 Expirations of statutes of limitations (630) (306) (265) Unrecognized Income Tax Benefits at end of year $ 5,230 $ 4,955 $ 4,979 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | Changes in the accumulated other comprehensive loss for the years ended June 30, 2021, 2020, and 2019, are comprised of the following amounts, shown net of taxes: Foreign currency translation adjustment Unrealized gain (loss) on securities available for sale Post-employment benefits Cash flow hedge Total accumulated other comprehensive loss Balance at July 1, 2018 $ (87,974) $ 50 $ (2,299) $ — $ (90,223) Other comprehensive income (loss) 1,644 — (327) (10,887) (9,570) Amounts reclassified from accumulated other comprehensive loss — — (226) 183 (43) Cumulative effect of adopting accounting standards — (50) — — (50) Net current-period other comprehensive income (loss) 1,644 (50) (553) (10,704) (9,663) Balance at June 30, 2019 (86,330) — (2,852) (10,704) (99,886) Other comprehensive loss (18,764) — (1,662) (12,572) (32,998) Amounts reclassified from accumulated other comprehensive loss — — (50) 3,504 3,454 Net current-period other comprehensive loss (18,764) — (1,712) (9,068) (29,544) Balance at June 30, 2020 (105,094) — (4,564) (19,772) (129,430) Other comprehensive income 24,256 — 687 2,480 27,423 Amounts reclassified from accumulated other comprehensive loss — — 204 8,711 8,915 Net current-period other comprehensive income 24,256 — 891 11,191 36,338 Balance at June 30, 2021 $ (80,838) $ — $ (3,673) $ (8,581) $ (93,092) |
Schedule of Comprehensive Income (Loss) | Details of other comprehensive loss are as follows: Year Ended June 30, 2021 2020 2019 Pre-Tax Amount Tax Expense Net Amount Pre-Tax Amount Tax Expense (Benefit) Net Amount Pre-Tax Amount Tax Expense (Benefit) Net Amount Foreign currency translation adjustments $ 24,352 $ 96 $ 24,256 $ (18,499) $ 265 $ (18,764) $ 2,021 $ 377 $ 1,644 Post-employment benefits: Actuarial gain (loss) on re-measurement 903 216 687 (2,192) (530) (1,662) (372) (45) (327) Reclassification of actuarial losses (gains) and prior service cost into other income, net and included in net periodic pension costs 270 66 204 (66) (16) (50) (306) (80) (226) Unrealized gain (loss) on cash flow hedge 3,250 770 2,480 (16,615) (4,043) (12,572) (14,446) (3,559) (10,887) Reclassification of interest from cash flow hedge into interest expense 11,553 2,842 8,711 4,638 1,134 3,504 244 61 183 Cumulative effect of adopting accounting standard — — — — — — (50) — (50) Other comprehensive loss $ 40,328 $ 3,990 $ 36,338 $ (32,734) $ (3,190) $ (29,544) $ (12,909) $ (3,246) $ (9,663) |
Computation of basic and diluted earnings per share | Year Ended June 30, 2021 2020 2019 Net Income $ 144,757 $ 24,042 $ 143,993 Average Shares Outstanding: Weighted-average common shares outstanding for basic computation 38,758 38,658 38,670 Dilutive effect of potential common shares 538 341 490 Weighted-average common shares outstanding for dilutive computation 39,296 38,999 39,160 Net Income Per Share — Basic $ 3.73 $ 0.62 $ 3.72 Net Income Per Share — Diluted $ 3.68 $ 0.62 $ 3.68 |
Share - Based Compensation (Tab
Share - Based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of share based compensation expense | Following approval by the Company's shareholders in October 2019, the 2019 Long-Term Performance Plan (the "2019 Plan") replaced the 2015 Long-Term Performance Plan. The 2019 Plan, which expires in 2024, provides for granting of SARs, stock options, stock awards, cash awards, and such other awards or combination thereof as the Executive Organization and Compensation Committee or, in the case of director awards, the Corporate Governance Committee of the Board of Directors (together referred to as the Committee) may determine to officers, other key employees and members of the Board of Directors. Grants are generally made at regularly scheduled committee meetings. Compensation costs charged to expense under award programs paid (or to be paid) with shares (including SARs, stock options, performance shares, restricted stock, and RSUs) are summarized in the table below: Year Ended June 30, 2021 2020 2019 SARs and options $ 2,526 $ 2,954 $ 2,440 Performance shares 2,494 854 2,082 Restricted stock and RSUs 3,960 3,146 2,391 Total compensation costs under award programs $ 8,980 $ 6,954 $ 6,913 |
Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block] | The aggregate unrecognized compensation cost for share-based award programs with the potential to be paid at June 30, 2021 is summarized in the table below: June 30, 2021 Average Expected Period of Expected Recognition (Years) SARs and options $ 2,848 2.1 Performance shares 5,172 1.7 Restricted stock and RSUs 5,352 2.5 Total unrecognized compensation costs under award programs $ 13,372 2.1 |
Weighted-average assumptions used for SARs and stock option grants issued | The weighted-average assumptions used for SARs and stock option grants issued in fiscal 2021, 2020 2021 2020 2019 Expected life, in years 7.0 6.2 6.0 Risk free interest rate 0.5 % 1.6 % 2.8 % Dividend yield 1.9 % 2.3 % 1.8 % Volatility 32.0 % 23.7 % 22.5 % Per share fair value of SARs granted during the year $17.97 $10.12 $16.15 |
Summary of SARs and stock option activity | A summary of SARs and stock options activity is presented below : Shares Weighted-Average Year Ended June 30, 2021 (Shares in thousands) Outstanding, beginning of year 1,620 $ 51.07 Granted 68 69.05 Exercised (527) 43.16 Forfeited (3) 59.18 Outstanding, end of year 1,158 $ 55.70 Exercisable at end of year 728 $ 52.59 Expected to vest at end of year 1,152 $ 55.69 |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of the performance shares and restricted stock activity | A summary of non-vested performance shares activity at June 30, 2021 is presented below: Shares Weighted-Average Grant-Date Fair Value Year Ended June 30, 2021 (Shares in thousands) Non-vested, beginning of year 56 $ 54.62 Awarded 46 53.53 Vested (37) 51.50 Non-vested, end of year 65 $ 55.64 |
Restricted stock and Restricted Stock units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of the performance shares and restricted stock activity | A summary of the status of the Company’s non-vested restricted stock and RSUs at June 30, 2021 is presented below: Shares Weighted-Average Grant-Date Fair Value Year Ended June 30, 2021 (Share amounts in thousands) Non-vested, beginning of year 130 $ 59.91 Granted 94 71.28 Forfeitures (2) 70.85 Vested (45) 60.86 Non-vested, end of year 177 $ 65.57 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Lessee, Operating Lease, Disclosure [Table Text Block] | Information related to operating leases is as follows: June 30, 2021 2020 Operating lease assets, net $ 87,111 $ 90,636 Operating lease liabilities Other current liabilities $ 27,359 $ 27,231 Other liabilities 64,248 67,926 Total operating lease liabilities $ 91,607 $ 95,157 June 30, 2021 2020 Weighted average remaining lease term (years) 5.6 3.6 Weighted average incremental borrowing rate 3.26 % 3.45 % Year Ended June 30, 2021 2020 Cash paid for operating leases $ 33,695 $ 34,642 Right of use assets obtained in exchange for new operating lease liabilities $ 25,556 $ 39,136 |
Lessee, Operating Lease, Liability, Maturity | The table below summarizes the aggregate maturities of liabilities pertaining to operating leases with terms greater than one year for each of the next five years: Fiscal Year Maturity of Operating Lease Liabilities 2022 $ 29,853 2023 22,982 2024 17,896 2025 10,462 2026 6,547 Thereafter 11,410 Total lease payments 99,150 Less interest 7,543 Present value of lease liabilities $ 91,607 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment financial information | Segment Financial Information Service Center Fluid Power & Flow Control Total Year Ended June 30, 2021 Net sales $ 2,199,533 $ 1,036,386 $ 3,235,919 Operating income for reportable segments 225,206 121,782 346,988 Assets used in the business 1,332,720 939,087 2,271,807 Depreciation and amortization of property 17,155 3,625 20,780 Capital expenditures 13,735 2,117 15,852 Year Ended June 30, 2020 Net sales $ 2,241,949 $ 1,003,703 $ 3,245,652 Operating income for reportable segments 211,667 109,847 321,514 Assets used in the business 1,314,011 969,540 2,283,551 Depreciation and amortization of property 17,133 4,063 21,196 Capital expenditures 17,063 3,052 20,115 Year Ended June 30, 2019 Net sales $ 2,452,905 $ 1,019,834 $ 3,472,739 Operating income for reportable segments 254,954 112,117 367,071 Assets used in the business 1,265,093 1,066,604 2,331,697 Depreciation and amortization of property 15,982 4,254 20,236 Capital expenditures 16,475 2,495 18,970 |
Reconciliation of operating income for reportable segments to the consolidated income before income taxes | A reconciliation of operating income for reportable segments to the consolidated income before income taxes Year Ended June 30, 2021 2020 2019 Operating income for reportable segments $ 346,988 $ 321,514 $ 367,071 Adjustments for: Intangible amortization — Service Center Based Distribution 5,426 12,385 13,639 Intangible amortization — Fluid Power & Flow Control 28,938 29,168 28,244 Impairment — Service Center Based Distribution 49,528 — 31,594 Goodwill Impairment — Fluid Power & Flow Control — 131,000 — Corporate and other expense, net 57,642 59,972 59,806 Total operating income 205,454 88,989 233,788 Interest expense, net 30,592 36,535 40,188 Other income, net (2,200) (2,782) (881) Income before income taxes $ 177,062 $ 55,236 $ 194,481 |
Information by geographic area | June 30, 2021 2020 2019 Long-Lived Assets: United States $ 173,335 $ 185,475 $ 112,812 Canada 21,458 20,575 8,871 Other Countries 7,907 6,487 2,619 Total $ 202,700 $ 212,537 $ 124,302 |
Other Income, Net (Tables)
Other Income, Net (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Other Income and Expenses [Abstract] | |
Other Income, net | Other income, net, consists of the following: Year Ended June 30, 2021 2020 2019 Unrealized gain on assets held in rabbi trust for a non-qualified deferred compensation plan $ (4,048) $ (458) $ (689) Foreign currency transaction losses (gains) 2,091 (2,463) 334 Net other periodic post-employment costs (benefits) 283 (120) (85) Life insurance (income) expense, net (296) 233 (479) Other, net (230) 26 38 Total other income, net $ (2,200) $ (2,782) $ (881) |
Business and Accounting Polic_3
Business and Accounting Policies Textuals (Details) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | |
Allowance for Doubtful Accounts Receivable, Current | $ 16,455 | $ 13,661 | |
Company's domestic inventory relate to LIFO layers | 19.80% | ||
Number of LIFO pools maintained (in pools) | 5 | ||
Revenue Recognition, Sales Returns Reserve | $ 9,772 | 9,883 | |
Shipping and Handling Costs | $ 15,970 | 19,620 | $ 24,090 |
Vesting period of SARs and stock option awards | 4 years | ||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 50.00% | ||
Defined Contribution Plan, Cost | $ 3,945 | 5,959 | 7,711 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | 401 | 317 | 414 |
Defined Benefit Plan, Expected Future Benefit Payment, Next Twelve Months | 800 | ||
Defined Benefit Plan, Expected Future Benefit Payment, Year Three | $ 200 | ||
Lessee, Operating Lease, Renewal Term | 5 years | ||
KERP [Member] | |||
Defined Contribution Plan, Cost | $ 334 | 189 | 400 |
Pension Plan [Member] | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | 46 | (116) | (34) |
Other Postretirement Benefits Plan | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ (161) | $ (257) | $ (418) |
Computer Software, Intangible Asset [Member] | |||
Finite-Lived Intangible Asset, Useful Life | 12 years | ||
Buildings,BuildingsImprovementsandLeaseholdImprovementsMinimumUsefulLife [Member] | |||
Property, Plant and Equipment, Useful Life | 10 years | ||
Buildings,BuildingsImprovementsandLeaseholdImprovements MaximumUsefulLife [Member] | |||
Property, Plant and Equipment, Useful Life | 30 years | ||
PropertyandEquipmentMinimumUsefulLife [Member] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
PropertyandEquipmentMaximumUsefulLife [Member] | |||
Property, Plant and Equipment, Useful Life | 10 years | ||
Minimum [Member] | |||
Lessee, Operating Lease, Term of Contract | 1 year | ||
Maximum [Member] | |||
Lessee, Operating Lease, Term of Contract | 15 years |
Revenue Recognition Revenue R_3
Revenue Recognition Revenue Recognition (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 3,235,919 | $ 3,245,652 | $ 3,472,739 |
UNITED STATES | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 2,782,859 | 2,819,400 | 3,016,759 |
CANADA | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 255,360 | 248,610 | 271,305 |
Other Countries [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 197,700 | 177,642 | 184,675 |
Service Center Based Distribution Segment [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 2,199,533 | 2,241,949 | 2,452,905 |
Service Center Based Distribution Segment [Member] | UNITED STATES | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,768,965 | 1,833,275 | 2,009,479 |
Service Center Based Distribution Segment [Member] | CANADA | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 255,360 | 248,610 | 271,305 |
Service Center Based Distribution Segment [Member] | Other Countries [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 175,208 | 160,064 | 172,121 |
Fluid Power & Flow Control Segment [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,036,386 | 1,003,703 | 1,019,834 |
Fluid Power & Flow Control Segment [Member] | UNITED STATES | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,013,894 | 986,125 | 1,007,280 |
Fluid Power & Flow Control Segment [Member] | CANADA | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 0 | 0 | 0 |
Fluid Power & Flow Control Segment [Member] | Other Countries [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 22,492 | $ 17,578 | $ 12,554 |
Revenue Recognition Revenue R_4
Revenue Recognition Revenue Recognition (Details 2) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
General Industry [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 37.20% | 36.80% | 36.30% |
Industrial Machinery [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 15.20% | 14.30% | 13.80% |
Food [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 10.10% | 9.40% | 8.30% |
Metals [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 9.30% | 9.90% | 11.60% |
Forest Products [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 8.20% | 7.60% | 6.60% |
Chem/Petrochem [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 6.60% | 6.40% | 6.30% |
Cement & Aggregate [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 5.70% | 5.40% | 5.00% |
Transportation [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 4.70% | 4.50% | 4.30% |
Oil & Gas [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 3.00% | 5.70% | 7.80% |
Total | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 100.00% | 100.00% | 100.00% |
Service Center Based Distribution Segment [Member] | General Industry [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 35.80% | 35.00% | 33.70% |
Service Center Based Distribution Segment [Member] | Industrial Machinery [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 9.80% | 9.70% | 10.40% |
Service Center Based Distribution Segment [Member] | Food [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 13.50% | 12.20% | 10.60% |
Service Center Based Distribution Segment [Member] | Metals [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 10.50% | 11.10% | 12.60% |
Service Center Based Distribution Segment [Member] | Forest Products [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 10.70% | 9.30% | 8.00% |
Service Center Based Distribution Segment [Member] | Chem/Petrochem [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 3.30% | 3.30% | 3.10% |
Service Center Based Distribution Segment [Member] | Cement & Aggregate [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 7.90% | 7.30% | 6.70% |
Service Center Based Distribution Segment [Member] | Transportation [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 4.60% | 4.60% | 4.80% |
Service Center Based Distribution Segment [Member] | Oil & Gas [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 3.90% | 7.50% | 10.10% |
Service Center Based Distribution Segment [Member] | Total | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 100.00% | 100.00% | 100.00% |
Fluid Power & Flow Control Segment [Member] | General Industry [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 40.00% | 41.20% | 43.00% |
Fluid Power & Flow Control Segment [Member] | Industrial Machinery [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 26.80% | 24.40% | 21.80% |
Fluid Power & Flow Control Segment [Member] | Food [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 2.90% | 3.10% | 2.70% |
Fluid Power & Flow Control Segment [Member] | Metals [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 6.80% | 7.20% | 9.40% |
Fluid Power & Flow Control Segment [Member] | Forest Products [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 2.90% | 3.70% | 3.10% |
Fluid Power & Flow Control Segment [Member] | Chem/Petrochem [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 13.60% | 13.40% | 13.80% |
Fluid Power & Flow Control Segment [Member] | Cement & Aggregate [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 1.10% | 1.00% | 1.00% |
Fluid Power & Flow Control Segment [Member] | Transportation [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 4.80% | 4.40% | 3.10% |
Fluid Power & Flow Control Segment [Member] | Oil & Gas [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 1.10% | 1.60% | 2.10% |
Fluid Power & Flow Control Segment [Member] | Total | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Customer Industry, Percent | 100.00% | 100.00% | 100.00% |
Revenue Recognition Revenue R_5
Revenue Recognition Revenue Recognition (Details 3) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 100.00% | 100.00% | 100.00% |
Power Transmission [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 27.80% | 27.40% | 24.40% |
Fluid Power [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 21.20% | 21.30% | 21.10% |
Bearings, Linear & Seals [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 19.80% | 18.50% | 19.50% |
General Maintenance; Hose Products [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 19.30% | 20.60% | 19.30% |
Specialty Flow Control [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 11.90% | 12.20% | 15.70% |
Service Center Based Distribution Segment [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 100.00% | 100.00% | 100.00% |
Service Center Based Distribution Segment [Member] | Power Transmission [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 37.30% | 35.40% | 33.90% |
Service Center Based Distribution Segment [Member] | Fluid Power [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 13.20% | 13.40% | 13.50% |
Service Center Based Distribution Segment [Member] | Bearings, Linear & Seals [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 29.00% | 26.60% | 27.50% |
Service Center Based Distribution Segment [Member] | General Maintenance; Hose Products [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 20.50% | 24.60% | 25.10% |
Service Center Based Distribution Segment [Member] | Specialty Flow Control [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 0.00% | 0.00% | 0.00% |
Fluid Power & Flow Control Segment [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 100.00% | 100.00% | 100.00% |
Fluid Power & Flow Control Segment [Member] | Power Transmission [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 7.50% | 9.50% | 1.60% |
Fluid Power & Flow Control Segment [Member] | Fluid Power [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 38.00% | 39.00% | 39.40% |
Fluid Power & Flow Control Segment [Member] | Bearings, Linear & Seals [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 0.40% | 0.30% | 0.30% |
Fluid Power & Flow Control Segment [Member] | General Maintenance; Hose Products [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 16.90% | 11.70% | 5.30% |
Fluid Power & Flow Control Segment [Member] | Specialty Flow Control [Domain] | |||
Disaggregation of Revenue [Line Items] | |||
Disaggregated Revenue by Product Line, Percent | 37.20% | 39.50% | 53.40% |
Revenue Recognition Revenue R_6
Revenue Recognition Revenue Recognition (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 15,178 | $ 8,435 |
Contract Assets Period $ Change | $ 6,743 | |
Contract Assets Period % Change | 79.90% |
Business Combinations Textuals
Business Combinations Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2020 | Aug. 21, 2019 | Mar. 04, 2019 | Nov. 02, 2018 | |
Other Current Liabilities [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Funding from Holdback Payments | $ 2,569 | ||||||
Other Liabilities [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Funding from Holdback Payments | 969 | ||||||
Gibson Engineering | |||||||
Business Acquisition [Line Items] | |||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||||||
Business Combination, Consideration Transferred | 15,450 | ||||||
Net tangible assets acquired | $ 1,030 | ||||||
Intangible Assets, Net (Including Goodwill) | 14,420 | ||||||
Funding from Holdback Payments | $ 1,938 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | ||||||
Advanced Control Solutions | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Consideration Transferred | 17,867 | ||||||
Net tangible assets acquired | 1,210 | ||||||
Intangible Assets, Net (Including Goodwill) | 16,657 | ||||||
Olympus Controls Corp [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||||||
Business Combination, Consideration Transferred | $ 36,642 | ||||||
Net tangible assets acquired | $ 9,540 | ||||||
Intangible Assets, Net (Including Goodwill) | $ 27,102 | ||||||
MilRoc [Member] [Domain] | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Consideration Transferred | 35,000 | ||||||
Net tangible assets acquired | $ 17,788 | ||||||
Intangible Assets, Net (Including Goodwill) | 17,212 | ||||||
Funding from Holdback Payments | $ 1,244 | $ 1,666 | $ 4,375 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | ||||||
MilRoc [Member] [Domain] | Other Current Liabilities [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Funding from Holdback Payments | $ 1,465 | ||||||
Fluid Power Sales [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Consideration Transferred | $ 8,066 | ||||||
Net tangible assets acquired | $ 4,151 | ||||||
Intangible Assets, Net (Including Goodwill) | 3,915 | ||||||
Funding from Holdback Payments | $ 600 | $ 1,200 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Inventory [Line Items] | ||
U.S. inventories at average cost | $ 387,456 | $ 431,866 |
Foreign inventories at average cost | 126,945 | 112,795 |
Inventory, Gross, Total | 514,401 | 544,661 |
Less: Excess of average cost over LIFO cost for U.S. inventories | 151,854 | 155,511 |
Inventories on consolidated balance sheets | $ 362,547 | $ 389,150 |
Inventories Inventories Textual
Inventories Inventories Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |||
Effect of LIFO Inventory Liquidation on Income | $ 3,895 | $ 1,990 | $ 112 |
Goodwill and Intangibles (Detai
Goodwill and Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Changes in the carrying amount of goodwill by reportable segment | |||
Goodwill, beginning balance | $ 540,594 | $ 661,991 | |
Goodwill acquired during the year | 15,757 | 11,274 | |
Other, primarily currency translation | 3,726 | (1,671) | |
Goodwill, ending balance | 560,077 | 540,594 | $ 661,991 |
FCX Performance, Inc [Member] [Member] | |||
Changes in the carrying amount of goodwill by reportable segment | |||
Goodwill, ending balance | 309,012 | ||
Service Center Based Distribution Segment [Member] | |||
Changes in the carrying amount of goodwill by reportable segment | |||
Goodwill, beginning balance | 208,570 | 213,634 | |
Goodwill acquired during the year | 0 | (3,393) | |
Goodwill Impairment | 0 | ||
Other, primarily currency translation | 3,726 | (1,671) | |
Goodwill, ending balance | 212,296 | 208,570 | 213,634 |
Fluid Power & Flow Control Segment [Member] | |||
Changes in the carrying amount of goodwill by reportable segment | |||
Goodwill, beginning balance | 332,024 | 448,357 | |
Goodwill acquired during the year | 15,757 | 14,667 | |
Goodwill Impairment | 0 | (131,000) | 0 |
Other, primarily currency translation | 0 | 0 | |
Goodwill, ending balance | $ 347,781 | 332,024 | $ 448,357 |
Fluid Power & Flow Control Segment [Member] | FCX Performance, Inc [Member] [Member] | |||
Changes in the carrying amount of goodwill by reportable segment | |||
Goodwill Impairment | $ (131,000) |
Goodwill and Intangibles (Det_2
Goodwill and Intangibles (Details 1) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 471,347 | $ 550,877 |
Accumulated Amortization | 191,719 | 207,662 |
Net Book Value | 279,628 | 343,215 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount | 353,028 | 426,017 |
Accumulated Amortization | 143,862 | 162,965 |
Net Book Value | 209,166 | 263,052 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount | 104,780 | 111,453 |
Accumulated Amortization | 37,626 | 34,815 |
Net Book Value | 67,154 | 76,638 |
Vendor Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount | 11,469 | 11,329 |
Accumulated Amortization | 9,859 | 8,934 |
Net Book Value | 1,610 | 2,395 |
Other Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount | 2,070 | 2,078 |
Accumulated Amortization | 372 | 948 |
Net Book Value | $ 1,698 | $ 1,130 |
Goodwill and Intangibles (Det_3
Goodwill and Intangibles (Details 2) $ in Thousands | 12 Months Ended |
Jun. 30, 2021USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 15,320 |
Weighted-Average Life (in years) | 17 years 8 months 12 days |
Customer Relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 10,390 |
Weighted-Average Life (in years) | 20 years |
Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 3,840 |
Weighted-Average Life (in years) | 15 years |
Other Intangible Assets | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 1,090 |
Weighted-Average Life (in years) | 5 years 10 months 24 days |
Goodwill and Intangibles Textua
Goodwill and Intangibles Textuals (Details 3) $ in Thousands | 12 Months Ended | ||||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jan. 01, 2021 | Jan. 01, 2020 | |
Goodwill Textuals | |||||
Number of Reporting Units | 8 | 8 | |||
NumberOfReportingUnitsWithFairValueExceedingCarryingValue | (7) | (7) | |||
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 25.00% | 10.00% | |||
Goodwill | $ 560,077 | $ 540,594 | $ 661,991 | ||
Impairment expense | 45,033 | ||||
Tangible Asset Impairment Charges | 1,983 | ||||
Operating Lease, Impairment Loss | 2,512 | ||||
Amortization of intangibles | 34,365 | 41,553 | 41,883 | ||
Goodwill and Intangibles (Textuals) [Abstract] | |||||
Amortization Expense for For 2022 | 31,400 | ||||
Amortization Expense for For 2023 | 29,500 | ||||
Amortization Expense for For 2024 | 25,800 | ||||
Amortization Expense for For 2025 | 23,600 | ||||
Amortization Expense for For 2026 | 21,900 | ||||
Service Center Based Distribution Segment [Member] | |||||
Goodwill Textuals | |||||
Goodwill | 212,296 | 208,570 | 213,634 | ||
Goodwill Impairment — Fluid Power & Flow Control | 0 | ||||
Accumulated goodwill impairment losses | 64,794 | ||||
Impairment expense | 49,528 | 0 | 31,594 | ||
Amortization of intangibles | 5,426 | 12,385 | 13,639 | ||
Fluid Power Businesses Segment [Member] | |||||
Goodwill Textuals | |||||
Goodwill | 347,781 | 332,024 | 448,357 | ||
Goodwill Impairment — Fluid Power & Flow Control | 0 | 131,000 | 0 | ||
Accumulated goodwill impairment losses | 167,605 | ||||
Amortization of intangibles | 28,938 | 29,168 | $ 28,244 | ||
FCX Performance, Inc [Member] [Member] | |||||
Goodwill Textuals | |||||
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 14.00% | ||||
Goodwill | $ 309,012 | ||||
FCX Performance, Inc [Member] [Member] | Fluid Power Businesses Segment [Member] | |||||
Goodwill Textuals | |||||
Goodwill Impairment — Fluid Power & Flow Control | $ 131,000 | ||||
CANADA | |||||
Goodwill Textuals | |||||
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 12.00% | ||||
MEXICO | |||||
Goodwill Textuals | |||||
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 14.00% |
Debt Debt (Details)
Debt Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Debt Instrument [Line Items] | ||
Total debt | $ 829,396 | $ 935,276 |
Less: unamortized debt issuance costs | 1,016 | 1,487 |
Debt, Long-term and Short-term, Combined Amount | 828,380 | 933,789 |
Long-term Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 550,250 | 589,250 |
Asset-backed Securities, Securitized Loans and Receivables [Member] | ||
Debt Instrument [Line Items] | ||
Trade receivable securitization facility | 188,300 | 175,000 |
Prudential Facility - Series C [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 40,000 | 120,000 |
Prudential Facility - Series D [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 25,000 | 25,000 |
Prudential Facility - Series E | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 25,000 | 25,000 |
State of Ohio Assumed Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 846 | $ 1,026 |
Debt (Details 1)
Debt (Details 1) $ in Thousands | Jun. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 44,118 |
2023 | 546,622 |
2024 | 213,551 |
2025 | $ 25,105 |
Debt Textuals (Details)
Debt Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Debt Instrument [Line Items] | ||
Letters of Credit Outstanding, Amount | $ 4,540 | $ 4,475 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit facility unsecured borrowings amount | 250,000 | |
Letters of Credit Outstanding, Amount | 200 | 1,873 |
Line of Credit Facility, Remaining Borrowing Capacity | $ 249,800 | $ 248,127 |
Revolving Credit Facility [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Fees on credit facility | 0.10% | |
Revolving Credit Facility [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Fees on credit facility | 0.20% | |
Long-term Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 1.88% | 1.94% |
Long-term Debt | $ 550,250 | $ 589,250 |
Debt Instrument, Face Amount | $ 780,000 | |
Asset-backed Securities, Securitized Loans and Receivables [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Percentage Bearing Variable Interest, Percentage Rate | 1.20% | 1.07% |
Debt Instrument, Interest Rate, Stated Percentage | 0.98% | |
Debt Instrument, Face Amount | $ 250,000 | |
Prudential Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 90,000 | $ 170,000 |
Prudential Facility [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 0.25% | |
Prudential Facility [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.25% | |
Prudential Facility - Series C [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 40,000 | 120,000 |
Debt Instrument, Face Amount | $ 120,000 | |
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 3.19% | |
Repayments of Debt | $ 40,000 | |
Prudential Facility - Series D [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 25,000 | 25,000 |
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 3.21% | |
Prudential Facility - Series E | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 25,000 | 25,000 |
Debt Instrument, Face Amount | $ 25,000 | |
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 3.08% | |
State of Ohio Assumed Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 846 | $ 1,026 |
Debt Instrument, Face Amount | $ 2,359 | |
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 1.50% |
Derivatives Derivatives Textual
Derivatives Derivatives Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Derivative, Amount of Hedged Item | $ 420,000 | $ 431,000 | $ 463,000 |
Derivative, Fixed Interest Rate | 1.63% | 2.61% | |
Derivative, Variable Interest Rate | 3.38% | 4.36% | |
Interest Rate Cash Flow Hedge Liability at Fair Value | $ 14,346 | $ 26,179 | |
Reclassification of interest from cash flow hedge into interest expense | $ 11,553 | $ 4,638 | $ 244 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Marketable securities | $ 16,844 | $ 12,259 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Components of income before income taxes | |||
U.S. | $ 152,202 | $ 36,161 | $ 204,462 |
Foreign | 24,860 | 19,075 | (9,981) |
Income before income taxes | $ 177,062 | $ 55,236 | $ 194,481 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Current: | |||
Federal | $ 46,685 | $ 31,149 | $ 34,437 |
State and local | 11,035 | 7,580 | 7,965 |
Foreign | 5,665 | 5,757 | 5,718 |
Total current | 63,385 | 44,486 | 48,120 |
Deferred: | |||
Federal | (24,168) | (8,594) | 6,265 |
State and local | (4,740) | (3,098) | 1,947 |
Foreign | (2,172) | (1,600) | (5,844) |
Total deferred | (31,080) | (13,292) | 2,368 |
Total | $ 32,305 | $ 31,194 | $ 50,488 |
Income Taxes (Details 2)
Income Taxes (Details 2) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Reconciliations of federal statutory income tax rate and Company's effective income tax rate: | |||
Statutory income tax rate | 21.00% | 21.00% | 21.00% |
State and local taxes | 3.20% | 6.40% | 4.40% |
U.S. federal tax reform/CARES Act NOL carryback | 0 | (0.018) | (0.003) |
Goodwill impairment | 0.00% | 31.40% | 0.00% |
Stock compensation | 2.50% | 1.30% | 0.50% |
GILTI/FDII | 0.10% | 3.60% | 0.70% |
R & D credit | (1.50%) | (1.20%) | (0.40%) |
U.S. tax on foreign income, net | 0.50% | 3.10% | 0.50% |
Impact of foreign operations | 0.00% | 1.60% | (0.60%) |
Non-deductibles/Deductible dividend | 0.00% | 0.60% | 0.40% |
Interest deduction | (1.10%) | (4.00%) | (1.20%) |
Valuation allowance | 0.10% | 2.60% | 2.90% |
Other, net | (0.60%) | 0.70% | (0.90%) |
Effective income tax rate | 18.20% | 56.50% | 26.00% |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Deferred tax assets: | ||
Compensation liabilities not currently deductible | $ 17,436 | $ 17,252 |
Other expenses and reserves not currently deductible | 18,676 | 15,272 |
Leases | 23,126 | 24,016 |
Net operating loss carryforwards | 9,262 | 8,859 |
Hedging instrument | 2,794 | 6,406 |
Other | 799 | 757 |
Total deferred tax assets | 72,093 | 72,562 |
Less: Valuation allowance | (8,542) | (7,494) |
Deferred tax assets, net of valuation allowance | 63,551 | 65,068 |
Deferred tax liabilities: | ||
Inventories | (9,215) | (8,284) |
Goodwill and intangibles | (38,534) | (58,506) |
Deferred Tax Liabilities, Leasing Arrangements | (22,475) | (23,407) |
Depreciation and differences in property bases | (6,214) | (13,018) |
Total deferred tax liabilities | (76,438) | (103,215) |
Net deferred tax liabilities | (12,887) | (38,147) |
Net deferred tax liabilities are classified as follows: | ||
Net deferred tax liabilities | (12,887) | (38,147) |
Other Assets | ||
Net deferred tax liabilities are classified as follows: | ||
Other assets | 6,373 | 4,749 |
Other Liabilities [Member] | ||
Net deferred tax liabilities are classified as follows: | ||
Other liabilities | $ 19,260 | $ 42,896 |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Reconciliation of the Company's total gross unrecognized income tax benefits | |||
Unrecognized Income Tax Benefits at beginning of the year | $ 4,955 | $ 4,979 | $ 3,988 |
Current year tax positions | 285 | 105 | 105 |
Prior year tax positions | 620 | 177 | 1,151 |
Expirations of statutes of limitations | (630) | (306) | (265) |
Unrecognized Income Tax Benefits at end of year | $ 5,230 | $ 4,955 | $ 4,979 |
Income Taxes Textuals (Details
Income Taxes Textuals (Details 5) - USD ($) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Other Tax Expense (Benefit) | $ 1,000,000 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 21.00% |
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | $ 35,415,000 | $ 29,584,000 | |
Operating Loss Carryforwards | 8,445,000 | 7,929,000 | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 1,034,000 | 1,177,000 | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 267,000 | 2,124,000 | |
Deferred Tax Assets, Valuation Allowance | 8,542,000 | 7,494,000 | |
Undistributed Earnings Of Foreign Subsidiaries On Which No Provision Has Been Made For Income Taxes | 121,463,000 | ||
Income Tax Examination, Penalties and Interest Expense | 144,000 | 256,000 | $ 161,000 |
Income Tax Examination, Penalties and Interest Accrued | 1,238,000 | 1,094,000 | 838,000 |
Unrecognized income tax benefits that would affect the effective income tax rate | 4,986,000 | 4,708,000 | $ 4,701,000 |
CANADA | |||
Deferred Tax Assets, Valuation Allowance | $ 8,498,000 | $ 7,450,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Beginning Balance | $ (129,430) | ||
Amounts reclassified from accumulated other comprehensive loss, post-employment benefits | 204 | $ (50) | $ (226) |
Amounts reclassified from accumulated other comprehensive loss, cash flow hedge | 8,711 | 3,504 | 183 |
Net current-period other comprehensive income (loss), Unrealized (loss) gain on securities available for sale | 0 | 0 | |
Net current-period other comprehensive income (loss), Foreign currency translation adjustment | 24,256 | (18,764) | 1,644 |
Net current-period other comprehensive income (loss), Cash flow hedge | 2,480 | (12,572) | (10,887) |
Net current-period other comprehensive income | 36,338 | (29,544) | (9,663) |
Ending Balance | (93,092) | (129,430) | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Amounts reclassified from accumulated other comprehensive loss | 8,915 | 3,454 | (43) |
Amounts reclassified from accumulated other comprehensive loss, post-employment benefits | 204 | (50) | (226) |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | |||
Beginning Balance | (105,094) | (86,330) | (87,974) |
Other comprehensive income (loss), foreign currency translation adjustment, net of tax | 24,256 | (18,764) | 1,644 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 |
Net current-period other comprehensive income (loss), Unrealized (loss) gain on securities available for sale | 0 | ||
Net current-period other comprehensive income (loss), Foreign currency translation adjustment | 24,256 | (18,764) | 1,644 |
Ending Balance | (80,838) | (105,094) | (86,330) |
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | |||
Beginning Balance | 0 | 0 | 50 |
Other comprehensive income (loss), Unrealized (Loss) Gain on securities available for sale, Net of Tax | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 |
Net current-period other comprehensive income (loss), Unrealized (loss) gain on securities available for sale | 0 | 0 | (50) |
Ending Balance | 0 | 0 | 0 |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | |||
Beginning Balance | (4,564) | (2,852) | (2,299) |
Other Comprehensive Income (Loss), Postemployment Benefits | 687 | (1,662) | (327) |
Net current-period other comprehensive income (loss), Unrealized (loss) gain on securities available for sale | 0 | ||
Net current-period other comprehensive income (loss), Post-employment benefits | 891 | (1,712) | (553) |
Ending Balance | (3,673) | (4,564) | (2,852) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | |||
Beginning Balance | (19,772) | (10,704) | 0 |
Other Comprehensive Income (Loss), Cash Flow Hedge | 2,480 | (12,572) | (10,887) |
Amounts reclassified from accumulated other comprehensive loss, cash flow hedge | 8,711 | 3,504 | 183 |
Net current-period other comprehensive income (loss), Unrealized (loss) gain on securities available for sale | 0 | ||
Net current-period other comprehensive income (loss), Cash flow hedge | 11,191 | (9,068) | (10,704) |
Ending Balance | (8,581) | (19,772) | (10,704) |
AOCI Attributable to Parent [Member] | |||
Beginning Balance | (129,430) | (99,886) | (90,223) |
Other Comprehensive Income (Loss), Total Accumulated Other Comprehensive (Loss) Income | 27,423 | (32,998) | (9,570) |
Net current-period other comprehensive income (loss), Unrealized (loss) gain on securities available for sale | (50) | ||
Net current-period other comprehensive income | 36,338 | (29,544) | (9,663) |
Ending Balance | $ (93,092) | $ (129,430) | $ (99,886) |
Shareholders' Equity OCI (Detai
Shareholders' Equity OCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Foreign currency translation adjustment pre-tax amount | $ 24,352 | $ (18,499) | $ 2,021 |
Foreign currency translation adjustment, tax expense (benefit) | 96 | 265 | 377 |
Foreign Currency Translation Adjustment, Net Amount | 24,256 | (18,764) | 1,644 |
Actuarial (loss) gain on remeasurement, pre-tax amount | 903 | (2,192) | (372) |
Actuarial (loss) gain on remeasurement, tax expense (benefit) | 216 | (530) | (45) |
Actuarial (loss) gain on remeasurement, net amount | 687 | (1,662) | (327) |
Reclassification of actuarial losses and prior service cost into other income, net and included in net periodic pension costs, pre-tax amount | 270 | (66) | (306) |
Reclassification of actuarial losses and prior service cost into other income, net and included in net periodic pension costs, tax expense (benefit) | 66 | (16) | (80) |
Reclassification of actuarial losses and prior service cost into other income, net and included in net periodic pension costs, net amount | 204 | (50) | (226) |
Unrealized gain (loss) on cash flow hedge, pre-tax amount | 3,250 | (16,615) | (14,446) |
Unrealized gain (loss) on cash flow hedge, tax expense (benefit) | 770 | (4,043) | (3,559) |
Unrealized gain (loss) on cash flow hedge, net amount | 2,480 | (12,572) | (10,887) |
Reclassification of interest from cash flow hedge into interest expense | 11,553 | 4,638 | 244 |
Reclassification of interest from cash flow hedge into interest expense, tax expense (benefit) | (2,842) | (1,134) | (61) |
Reclassification of interest from cash flow hedge into interest expense, net amount | 8,711 | 3,504 | 183 |
Cumulative effect of adopting accounting standard, pre-tax amount | 0 | 0 | (50) |
Cumulative effect of adopting accounting standard, tax expense (benefit) | 0 | 0 | |
Cumulative effect of adopting accounting standard, net amount | 0 | 0 | |
Other Comprehensive Income (Loss), pre-tax amount | 40,328 | (32,734) | (12,909) |
Other Comprehensive Income (Loss), tax expense (benefit) | 3,990 | (3,190) | (3,246) |
Other comprehensive income (loss) | $ 36,338 | $ (29,544) | (9,663) |
Accounting Standards Update 2016-01 | |||
Cumulative effect of adopting accounting standard, pre-tax amount | (50) | ||
Cumulative effect of adopting accounting standard, tax expense (benefit) | 0 | ||
Cumulative effect of adopting accounting standard, net amount | $ (50) |
Shareholders' Equity Net Income
Shareholders' Equity Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |||
Net income | $ 144,757 | $ 24,042 | $ 143,993 |
Average Shares Outstanding: | |||
Weighted-average common shares outstanding for basic computation | 38,758 | 38,658 | 38,670 |
Dilutive effect of potential common shares | 538 | 341 | 490 |
Weighted-average common shares outstanding for dilutive computation | 39,296 | 38,999 | 39,160 |
Net income per share — basic | $ 3.73 | $ 0.62 | $ 3.72 |
Net income per share — diluted | $ 3.68 | $ 0.62 | $ 3.68 |
Shareholders' Equity Textuals (
Shareholders' Equity Textuals (Details) - shares shares in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |||
Common stock held as treasury shares restricted as (in shares) | 128 | ||
Antidilutive Stock options and appreciation rights relating to the acquisition of shares of common stock not included in the computation of diluted earnings per share (in shares) | 234 | 726 | 226 |
Share - Based Compensation (Det
Share - Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Compensation costs charged to expense under award programs | |||
Total compensation costs under award programs | $ 8,980 | $ 6,954 | $ 6,913 |
Stock Options and Stock Appreciation Rights [ Member] | |||
Compensation costs charged to expense under award programs | |||
Total compensation costs under award programs | 2,526 | 2,954 | 2,440 |
Performance Shares [Member] | |||
Compensation costs charged to expense under award programs | |||
Total compensation costs under award programs | 2,494 | 854 | 2,082 |
Restricted stock and Restricted Stock units [Member] | |||
Compensation costs charged to expense under award programs | |||
Total compensation costs under award programs | $ 3,960 | $ 3,146 | $ 2,391 |
Share - Based Compensation (D_2
Share - Based Compensation (Details 1) $ in Thousands | 12 Months Ended |
Jun. 30, 2021USD ($) | |
Schedule Of Unrecognized Compensation Cost Nonvested Awards Table Text Block [Line Items] | |
Total unrecognized compensation costs under award programs | $ 13,372 |
Expected Period for Recognition | 2 years 1 month 6 days |
Stock Options and Stock Appreciation Rights [ Member] | |
Schedule Of Unrecognized Compensation Cost Nonvested Awards Table Text Block [Line Items] | |
Total unrecognized compensation costs under award programs | $ 2,848 |
Expected Period for Recognition | 2 years 1 month 6 days |
Performance Shares [Member] | |
Schedule Of Unrecognized Compensation Cost Nonvested Awards Table Text Block [Line Items] | |
Total unrecognized compensation costs under award programs | $ 5,172 |
Expected Period for Recognition | 1 year 8 months 12 days |
Restricted stock and Restricted Stock units [Member] | |
Schedule Of Unrecognized Compensation Cost Nonvested Awards Table Text Block [Line Items] | |
Total unrecognized compensation costs under award programs | $ 5,352 |
Expected Period for Recognition | 2 years 6 months |
Share - Based Compensation (D_3
Share - Based Compensation (Details 2) - Stock Options and Stock Appreciation Rights [ Member] - $ / shares | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Weighted-average assumptions used for SARs and stock option grants issued | |||
Expected life, in years | 7 years | 6 years 2 months 12 days | 6 years |
Risk free interest rate | 0.50% | 1.60% | 2.80% |
Dividend yield | 1.90% | 2.30% | 1.80% |
Volatility | 32.00% | 23.70% | 22.50% |
Per share fair value of SAR's and stock options granted during the year | $ 17.97 | $ 10.12 | $ 16.15 |
Share - Based Compensation (D_4
Share - Based Compensation (Details 3) - Stock Options and Stock Appreciation Rights [ Member] shares in Thousands | 12 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding, beginning of year, Shares | shares | 1,620 |
Granted, Shares | shares | 68 |
Exercised, Shares | shares | (527) |
Forfeited, Shares | shares | (3) |
Outstanding, end of year, Shares | shares | 1,158 |
Exercisable at end of year, Shares | shares | 728 |
Expected to Vest at end of year, Shares | shares | 1,152 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding, beginning of year, Weighted-Average Exercise Price | $ / shares | $ 51.07 |
Granted, Weighted-Average Exercise Price | $ / shares | 69.05 |
Exercised, Weighted-Average Exercise Price | $ / shares | 43.16 |
Forfeited, Weighted-Average Exercise Price | $ / shares | 59.18 |
Outstanding, end of year, Weighted-Average Exercise Price | $ / shares | 55.70 |
Exercisable at end of year, Weighted-Average Exercise Price | $ / shares | 52.59 |
Expected to Vest at end of year, Weighted-Average Exercise Price | $ / shares | $ 55.69 |
Share - Based Compensation (D_5
Share - Based Compensation (Details 4) - Performance shares [Member] shares in Thousands | 12 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning Balance, Shares | shares | 56 |
Granted, shares | shares | 46 |
Vested, Shares | shares | (37) |
Ending Balance, Shares | shares | 65 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Beginning Balance, Weighted-Average Grant-Date Fair Value | $ / shares | $ 54.62 |
Granted, Weighted-Average Grant-Date Fair Value | $ / shares | 53.53 |
Vested, Weighted-Average Grant- Date Fair Value | $ / shares | 51.50 |
Ending Balance, Weighted-Average Grant-Date Fair Value | $ / shares | $ 55.64 |
Share - Based Compensation (D_6
Share - Based Compensation (Details 5) - Restricted stock and Restricted Stock units [Member] shares in Thousands | 12 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Beginning Balance, Shares | shares | 130 |
Beginning Balance, Weighted-Average Grant-Date Fair Value | $ / shares | $ 59.91 |
Granted, shares | shares | 94 |
Granted, Weighted-Average Exercise Price | $ / shares | $ 71.28 |
Forfeited, Shares | shares | (2) |
Forfeitures, Weighted-Average Grant-Date Fair Value | $ / shares | $ 70.85 |
Vested, Shares | shares | (45) |
Vested, Weighted-Average Grant- Date Fair Value | $ / shares | $ 60.86 |
Ending Balance, Shares | shares | 177 |
Ending Balance, Weighted-Average Grant-Date Fair Value | $ / shares | $ 65.57 |
Share - Based Compensation Text
Share - Based Compensation Textuals (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 1 month 6 days | ||
Aggregate number of shares of common stock awarded under the 2019 Plan | 2,250 | ||
Shares available for future grants | 2,009 | ||
Stock Compensation Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $ 6,649 | $ 2,189 | $ 2,709 |
Stock Options and Stock Appreciation Rights [ Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 1 month 6 days | ||
Weighted-average remaining contractual terms for SARs/stock options outstanding | 6 years 3 months 18 days | ||
Weighted-average remaining contractual terms for SARs/stock options exercisable | 5 years 4 months 24 days | ||
Weighted-average remaining contractual terms for SARs/stock options expected to vest | 6 years 3 months 18 days | ||
Aggregate intrinsic values of SARs and stock options outstanding | $ 40,928 | ||
Aggregate intrinsic values of SARs/stock options exercisable | 27,988 | ||
Aggregate intrinsic values of SARs/stock options expected to vest | 40,742 | ||
Aggregate intrinsic values of SARs/stock options exercised during period | 21,189 | 3,460 | 3,363 |
Total fair value of shares vested | $ 2,880 | $ 2,285 | $ 1,846 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 8 months 12 days | ||
Shares available for future grants | 97 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating Leased Assets [Line Items] | ||
Operating lease assets, net | $ 87,111 | $ 90,636 |
Total Operating Lease Liabilities | $ 91,607 | $ 95,157 |
Weighted average remaining lease term (years) | 5 years 7 months 6 days | 3 years 7 months 6 days |
Weighted average incremental borrowing rate | 3.26% | 3.45% |
Cash paid for operating leases | $ 33,695 | $ 34,642 |
Right of use assets obtained in exchange for new operating lease liabilities | 25,556 | 39,136 |
Other Current Liabilities [Member] | ||
Operating Leased Assets [Line Items] | ||
Operating Lease, Liability, Current | 27,359 | 27,231 |
Other Liabilities [Member] | ||
Operating Leased Assets [Line Items] | ||
Operating Lease, Liability, Noncurrent | $ 64,248 | $ 67,926 |
Leases (Details 1)
Leases (Details 1) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Lessee, Operating Lease, Liability, Payment, Due | ||
2022 | $ 29,853 | |
2023 | 22,982 | |
2024 | 17,896 | |
2025 | 10,462 | |
2026 | 6,547 | |
Thereafter | 11,410 | |
Total lease payments | 99,150 | |
Less interest | 7,543 | |
Present value of lease liabilities | $ 91,607 | $ 95,157 |
Leases Leases Textuals (Details
Leases Leases Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | |||
Operating Lease, Cost | $ 31,778 | $ 33,152 | |
Short-term Lease, Cost | 9,929 | 10,581 | |
Related Party Transaction, Expenses from Transactions with Related Party | $ 2,100 | $ 2,500 | $ 2,400 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment financial information | |||
Net sales | $ 3,235,919 | $ 3,245,652 | $ 3,472,739 |
Operating income for reportable segments | 205,454 | 88,989 | 233,788 |
Assets used in the business | 2,271,807 | 2,283,551 | 2,331,697 |
Depreciation and amortization of property | 20,780 | 21,196 | 20,236 |
Capital expenditures | 15,852 | 20,115 | 18,970 |
Service Center Based Distribution Segment [Member] | |||
Segment financial information | |||
Net sales | 2,199,533 | 2,241,949 | 2,452,905 |
Operating income for reportable segments | 225,206 | 211,667 | 254,954 |
Assets used in the business | 1,332,720 | 1,314,011 | 1,265,093 |
Depreciation and amortization of property | 17,155 | 17,133 | 15,982 |
Capital expenditures | 13,735 | 17,063 | 16,475 |
Fluid Power & Flow Control Segment [Member] | |||
Segment financial information | |||
Net sales | 1,036,386 | 1,003,703 | 1,019,834 |
Operating income for reportable segments | 121,782 | 109,847 | 112,117 |
Assets used in the business | 939,087 | 969,540 | 1,066,604 |
Depreciation and amortization of property | 3,625 | 4,063 | 4,254 |
Capital expenditures | 2,117 | 3,052 | 2,495 |
Reportable Segments | |||
Segment financial information | |||
Operating income for reportable segments | $ 346,988 | $ 321,514 | $ 367,071 |
Segment Information (Details 1)
Segment Information (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Reconciliation of operating income for reportable segments to the consolidated income before income taxes | |||
Operating income for reportable segments | $ 205,454 | $ 88,989 | $ 233,788 |
Adjustments for: | |||
Intangible amortization | 34,365 | 41,553 | 41,883 |
Impairment - Service Center Based Distribution | 45,033 | ||
Operating income | 205,454 | 88,989 | 233,788 |
Interest expense, net | 30,592 | 36,535 | 40,188 |
Other income, net | (2,200) | (2,782) | (881) |
Income before income taxes | 177,062 | 55,236 | 194,481 |
Reportable Segments | |||
Reconciliation of operating income for reportable segments to the consolidated income before income taxes | |||
Operating income for reportable segments | 346,988 | 321,514 | 367,071 |
Adjustments for: | |||
Operating income | 346,988 | 321,514 | 367,071 |
Service Center Based Distribution Segment [Member] | |||
Reconciliation of operating income for reportable segments to the consolidated income before income taxes | |||
Operating income for reportable segments | 225,206 | 211,667 | 254,954 |
Adjustments for: | |||
Intangible amortization | 5,426 | 12,385 | 13,639 |
Impairment - Service Center Based Distribution | 49,528 | 0 | 31,594 |
Goodwill Impairment — Fluid Power & Flow Control | 0 | ||
Operating income | 225,206 | 211,667 | 254,954 |
Fluid Power & Flow Control Segment [Member] | |||
Reconciliation of operating income for reportable segments to the consolidated income before income taxes | |||
Operating income for reportable segments | 121,782 | 109,847 | 112,117 |
Adjustments for: | |||
Intangible amortization | 28,938 | 29,168 | 28,244 |
Goodwill Impairment — Fluid Power & Flow Control | 0 | 131,000 | 0 |
Operating income | 121,782 | 109,847 | 112,117 |
Fluid Power & Flow Control Segment [Member] | FCX Performance, Inc [Member] [Member] | |||
Adjustments for: | |||
Goodwill Impairment — Fluid Power & Flow Control | 131,000 | ||
Corporate and Other [Member] | |||
Adjustments for: | |||
Corporate and other expense, net | $ 57,642 | $ 59,972 | $ 59,806 |
Segment Information (Details 2)
Segment Information (Details 2) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 |
Revenues From External Customers and Long Lived Assets [Line Items] | |||
Long-Lived Assets | $ 202,700 | $ 212,537 | $ 124,302 |
United States [Member] | |||
Revenues From External Customers and Long Lived Assets [Line Items] | |||
Long-Lived Assets | 173,335 | 185,475 | 112,812 |
Canada [Member] | |||
Revenues From External Customers and Long Lived Assets [Line Items] | |||
Long-Lived Assets | 21,458 | 20,575 | 8,871 |
Other Countries [Member] | |||
Revenues From External Customers and Long Lived Assets [Line Items] | |||
Long-Lived Assets | $ 7,907 | $ 6,487 | $ 2,619 |
Segment Information Textuals (D
Segment Information Textuals (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 3,235,919 | $ 3,245,652 | $ 3,472,739 |
Intersegment Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 31,615 | $ 29,582 | $ 28,677 |
Other Income, Net (Details)
Other Income, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Unrealized gain on assets held in rabbi trust for a non-qualified deferred compensation plan | $ (4,048) | $ (458) | $ (689) |
Foreign currency transaction losses (gains) | 2,091 | (2,463) | 334 |
Net other periodic post-employment costs (benefits) | 283 | (120) | (85) |
Life insurance (income) expense, net | (296) | 233 | (479) |
Other, net | (230) | ||
Other, net | 26 | 38 | |
Total other income, net | $ (2,200) | $ (2,782) | $ (881) |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | ||
SEC Schedule, 12-09, Allowance, Credit Loss [Member] | ||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | $ 23,544 | $ 17,763 | $ 13,566 | |
Additions charged to costs and expenses | 6,540 | 14,055 | 4,796 | |
Additions (Deductions) Charged to Other Accounts | (111) | 2,618 | 3,925 | |
Deductions from reserves | 3,746 | 10,892 | 4,524 | |
Balance at end of period | 26,227 | 23,544 | 17,763 | |
Allowance for Doubtful Account [Member] | ||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | 13,661 | 10,498 | 10,964 | |
Additions charged to costs and expenses | 6,540 | 14,055 | 4,058 | |
Additions (Deductions) Charged to Other Accounts | 0 | 0 | 0 | |
Deductions from reserves | 3,746 | 10,892 | 4,524 | |
Balance at end of period | 16,455 | 13,661 | 10,498 | |
Sales Returns and Allowances [Member] | ||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | 9,883 | 7,265 | 2,602 | |
Additions charged to costs and expenses | 0 | 0 | 738 | |
Additions (Deductions) Charged to Other Accounts | [1] | (111) | 2,618 | 3,925 |
Deductions from reserves | [2] | 0 | 0 | 0 |
Balance at end of period | $ 9,772 | $ 9,883 | $ 7,265 | |
[1] | (A) Amounts in the years ending June 30, 2021, 2020 and 2019 represent reserves recorded for the return of merchandise by customers. The Company adopted ASC 606 - Revenue from Contracts with Customers effective July 1, 2018 which requires the Company's sales returns reserve to be established at the gross sales value with an asset established for the value of the expected product to be returned. (B) Amounts represent uncollectible accounts charged off. | |||
[2] | Amounts represent uncollectible accounts charged off. |