Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

7. Goodwill and Intangible Assets

Goodwill

Goodwill is recorded when the consideration for a business combination exceeds the fair value of net tangible and identifiable intangible assets acquired. The Company tests its goodwill balances for impairment annually as of the beginning of the second quarter or more frequently if indicators are present or changes in circumstances suggest that an impairment may exist. The Company performed the most recent annual goodwill and indefinite-lived intangible asset impairment test as of the beginning of the second quarter of 2023 and noted no impairment.

The following table summarizes changes in goodwill during the six months ended June 30, 2023 (in thousands):

Balance at beginning of the period	$	478,897
Effect of foreign exchange rate changes		4,512
Balance at end of the period	$	483,409

Goodwill by reportable segment as of June 30, 2023 was as follows (in thousands):

	Reportable Segment
	Precision Medicine and Manufacturing			Medical Solutions			Robotics and Automation			Total
Goodwill	$	210,725		$	169,428		$	254,485		$	634,638
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	108,264		$	137,706		$	237,439		$	483,409

Goodwill by reportable segment as of December 31, 2022 was as follows (in thousands):

	Reportable Segment
	Precision Medicine and Manufacturing			Medical Solutions			Robotics and Automation			Total
Goodwill	$	208,387		$	167,891		$	253,848		$	630,126
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	105,926		$	136,169		$	236,802		$	478,897

Intangible Assets

Intangible assets as of June 30, 2023 and December 31, 2022, respectively, are summarized as follows (in thousands):

	June 30, 2023							December 31, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortizable intangible assets:
Patents and developed technologies	$	186,494	$	(139,792	)	$	46,702	$	184,589	$	(132,350	)	$	52,239
Customer relationships		224,463		(132,474	)		91,989		222,173		(121,527	)		100,646
Trademarks and trade names		23,565		(14,327	)		9,238		23,311		(13,457	)		9,854
Amortizable intangible assets		434,522		(286,593	)		147,929		430,073		(267,334	)		162,739
Non-amortizable intangible assets:
Trade names		13,027		—			13,027		13,027		—			13,027
Total	$	447,549	$	(286,593	)	$	160,956	$	443,100	$	(267,334	)	$	175,766

All definite-lived intangible assets are amortized either on a straight-line basis or an economic benefit basis over their remaining estimated useful life. Amortization expense for patents and developed technologies is included in cost of revenue in the accompanying consolidated statements of operations. Amortization expense for customer relationships and definite-lived trademarks, trade names and other intangibles is included in operating expenses in the accompanying consolidated statements of operations. Amortization expense was as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,		July 1,		June 30,		July 1,
	2023		2022		2023		2022
Amortization expense – cost of revenue	$	3,046	$	3,336	$	6,068	$	6,757
Amortization expense – operating expenses		5,124		7,173		10,213		14,515
Total amortization expense	$	8,170	$	10,509	$	16,281	$	21,272

As of June 30, 2023, estimated amortization expense for each of the five succeeding years and thereafter was as follows (in thousands):

Year Ending December 31,	Cost of Revenue		Operating Expenses		Total
2023 (remainder of year)	$	6,106	$	10,267	$	16,373
2024		9,918		17,231		27,149
2025		8,397		14,575		22,972
2026		7,013		12,402		19,415
2027		4,251		10,001		14,252
Thereafter		11,017		36,751		47,768
Total	$	46,702	$	101,227	$	147,929