Goodwill and Intangible Assets

6 Months Ended

Jul. 01, 2011

5. Goodwill and Intangible Assets

Goodwill

Goodwill is recorded when the consideration for an acquisition exceeds the fair value of net tangible and identifiable intangible assets acquired. There were no changes in the carrying amount of goodwill during the three or six months ended July 1, 2011. Goodwill by reportable segment as of July 1, 2011 and December 31, 2010 is as follows (in thousands):


	Reportable Segment
	Laser Products			Precision Motion and Technologies			Total
Goodwill	$	67,926		$	108,306		$	176,232
Accumulated impairment of goodwill		(54,099	)		(77,555	)		(131,654	)

	$	13,827		$	30,751		$	44,578

Intangible Assets

As of July 1, 2011, intangible assets consisted of the following (in thousands):


	July 1, 2011
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Amortizable intangible assets:
Patents and acquired technology	$	61,580	$	(45,748	)	$	15,832		5.1
Customer relationships		33,215		(15,446	)		17,769		8.0
Customer backlog		2,355		(2,355	)		—		—
Non-compete agreements		4,870		(4,659	)		211		0.2
Trademarks, trade names and other		5,760		(3,330	)		2,430		7.7

Amortizable intangible assets		107,780		(71,538	)		36,242		6.7

Non-amortizable intangible assets:
Trade names		13,027		—			13,027

Totals	$	120,807	$	(71,538	)	$	49,269

As of December 31, 2010, intangible assets consisted of the following (in thousands):


	December 31, 2010
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Amortizable intangible assets:
Patents and acquired technology	$	61,298	$	(43,546	)	$	17,752		5.5
Customer relationships		33,121		(14,183	)		18,938		8.4
Customer backlog		2,355		(2,355	)		—		—
Non-compete agreements		4,870		(4,001	)		869		0.7
Trademarks, trade names and other		5,696		(3,143	)		2,553		8.2

Amortizable intangible assets		107,340		(67,228	)		40,112		6.9

Non-amortizable intangible assets:
Trade names		13,027		—			13,027

Totals	$	120,367	$	(67,228	)	$	53,139

All definite-lived intangible assets are amortized on a straight-line basis over their remaining life. Amortization expense for customer relationships, customer backlog, non-compete agreements and definite-lived trademarks, trade names and other is included in operating expenses in the accompanying consolidated statements of operations and was $1.0 million and $1.1 million for the three months ended July 1, 2011 and July 2, 2010, respectively, and $2.0 million and $2.3 million for the six months ended July 1, 2011 and July 2, 2010, respectively. Amortization expense for the patents and acquired technology is included in cost of goods sold in the accompanying consolidated statements of operations and was $1.0 million for each of the three months ended July 1, 2011 and July 2, 2010, and $2.0 million and $1.9 million, respectively, for the six months ended July 1, 2011 and July 2, 2010.

Estimated amortization expense for each succeeding period after July 1, 2011 is as follows (in thousands):


Year Ending December 31,	Cost of Goods Sold		Operating Expenses		Total
2011 (6 months from July 1, 2011)	$	1,903	$	1,537	$	3,440
2012		3,165		2,652		5,817
2013		3,165		2,652		5,817
2014		3,165		2,565		5,730
2015		2,065		2,395		4,460
Thereafter		2,369		8,609		10,978

Total	$	15,832	$	20,410	$	36,242

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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