Goodwill and Intangible Assets

9 Months Ended

Sep. 29, 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 nine months ended September 29, 2023 (in thousands):

Balance at beginning of the period	$	478,897
Effect of foreign exchange rate changes		(1,255	)
Balance at end of the period	$	477,642

Goodwill by reportable segment as of September 29, 2023 was as follows (in thousands):

	Reportable Segment
	Precision Medicine and Manufacturing			Medical Solutions			Robotics and Automation			Total
Goodwill	$	208,110		$	166,905		$	253,856		$	628,871
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	105,649		$	135,183		$	236,810		$	477,642

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 September 29, 2023 and December 31, 2022, respectively, are summarized as follows (in thousands):

	September 29, 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	$	184,246	$	(141,182	)	$	43,064	$	184,589	$	(132,350	)	$	52,239
Customer relationships		221,706		(135,476	)		86,230		222,173		(121,527	)		100,646
Trademarks and trade names		23,297		(14,522	)		8,775		23,311		(13,457	)		9,854
Amortizable intangible assets		429,249		(291,180	)		138,069		430,073		(267,334	)		162,739
Non-amortizable intangible assets:
Trade names		13,027		—			13,027		13,027		—			13,027
Total intangible assets	$	442,276	$	(291,180	)	$	151,096	$	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				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
Amortization expense – cost of revenue	$	3,051	$	3,247	$	9,119	$	10,004
Amortization expense – operating expenses		5,131		6,472		15,344		20,987
Total amortization expense	$	8,182	$	9,719	$	24,463	$	30,991

As of September 29, 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)	$	3,005	$	5,065	$	8,070
2024		9,771		16,998		26,769
2025		8,289		14,378		22,667
2026		6,933		12,227		19,160
2027		4,197		9,861		14,058
Thereafter		10,869		36,476		47,345
Total	$	43,064	$	95,005	$	138,069