Goodwill and Intangible Assets

3 Months Ended

Mar. 29, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

8. Goodwill and Intangible Assets

Goodwill

Goodwill is recorded when the consideration paid 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 three months ended March 29, 2024 (in thousands):

Balance at beginning of the period	$	484,507
Goodwill acquired from Motion Solutions acquisition		108,791
Effect of foreign exchange rate changes		(3,442	)
Balance at end of the period	$	589,856

Goodwill by reportable segment as of March 29, 2024 was as follows (in thousands):

	Reportable Segment
	Precision Medicine and Manufacturing			Medical Solutions			Robotics and Automation			Total
Goodwill	$	210,042		$	276,696		$	254,347		$	741,085
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	107,581		$	244,974		$	237,301		$	589,856

Goodwill by reportable segment as of December 31, 2023 was as follows (in thousands):

	Reportable Segment
	Precision Medicine and Manufacturing			Medical Solutions			Robotics and Automation			Total
Goodwill	$	211,380		$	169,738		$	254,618		$	635,736
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	108,919		$	138,016		$	237,572		$	484,507

Intangible Assets

Intangible assets as of March 29, 2024 and December 31, 2023, respectively, are summarized as follows (in thousands):

	March 29, 2024							December 31, 2023
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortizable intangible assets:
Patents and developed technologies	$	220,268	$	(149,119	)	$	71,149	$	187,092	$	(146,342	)	$	40,750
Customer relationships		265,590		(145,937	)		119,653		225,183		(142,478	)		82,705
Customer backlog		4,100		(1,025	)		3,075		—		—			—
Trademarks and trade names		23,501		(15,315	)		8,186		23,628		(15,088	)		8,540
Amortizable intangible assets		513,459		(311,396	)		202,063		435,903		(303,908	)		131,995
Non-amortizable intangible assets:
Trade names		13,027		—			13,027		13,027		—			13,027
Total intangible assets	$	526,486	$	(311,396	)	$	215,090	$	448,930	$	(303,908	)	$	145,022

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
	March 29,		March 31,
	2024		2023
Amortization expense – cost of revenue	$	3,692	$	3,022
Amortization expense – operating expenses		5,750		5,089
Total amortization expense	$	9,442	$	8,111

As of March 29, 2024, 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
2024 (remainder of year)	$	11,054	$	17,213	$	28,267
2025		14,298		21,288		35,586
2026		13,439		19,587		33,026
2027		10,603		15,958		26,561
2028		8,865		13,177		22,042
Thereafter		12,890		43,691		56,581
Total	$	71,149	$	130,914	$	202,063