Goodwill, Intangible Assets and Impairment Charges

12 Months Ended

Dec. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill, Intangible Assets and Impairment Charges

6. Goodwill, Intangible Assets and Impairment Charges

Goodwill

The following table summarizes changes in goodwill during the year ended December 31, 2017 (in thousands):

	December 31, 2017
Balance at beginning of year	$	108,128
Goodwill acquired from Laser Quantum acquisition		31,168
Goodwill acquired from ThingMagic acquisition		9,929
Goodwill acquired from WOM acquisition		55,632
Effect of foreign exchange rate changes		6,131
Balance at end of year	$	210,988

Goodwill acquired from the Laser Quantum acquisition is reflected in the Photonics segment. Goodwill acquired from the WOM and ThingMagic acquisitions is reflected in the Vision segment. Goodwill by reportable segment as of December 31, 2017 is as follows (in thousands):

	Reportable Segment
	Photonics			Vision			Precision Motion			Total
Goodwill	$	170,818		$	157,436		$	33,963		$	362,217
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	68,357		$	125,714		$	16,917		$	210,988

Goodwill by reportable segment as of December 31, 2016 is as follows (in thousands):

	Reportable Segment
	Photonics			Vision			Precision Motion			Total
Goodwill	$	136,278		$	89,116		$	33,963		$	259,357
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	33,817		$	57,394		$	16,917		$	108,128

Intangible Assets

Intangible assets as of December 31, 2017 and 2016, respectively, are summarized as follows (dollar amounts in thousands):

	December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Amortizable intangible assets:
Patents and acquired technologies	$	130,890	$	(77,295	)	$	53,595		10.2
Customer relationships		131,809		(52,015	)		79,794		12.3
Customer backlog		2,524		(2,284	)		240		0.8
Non-compete covenant		2,514		(1,956	)		558		0.9
Trademarks and trade names		15,708		(7,874	)		7,834		9.7
Amortizable intangible assets		283,445		(141,424	)		142,021		11.3
Non-amortizable intangible assets:
Trade names		13,027		—			13,027
Total	$	296,472	$	(141,424	)	$	155,048

	December 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Amortizable intangible assets:
Patents and acquired technologies	$	84,742	$	(67,902	)	$	16,840		7.6
Customer relationships		69,554		(42,934	)		26,620		12.9
Customer backlog		622		(540	)		82		0.9
Non-compete covenant		2,514		(1,419	)		1,095		2.0
Trademarks and trade names		10,709		(6,630	)		4,079		8.3
Amortizable intangible assets		168,141		(119,425	)		48,716		10.2
Non-amortizable intangible assets:
Trade names		13,027		—			13,027
Total	$	181,168	$	(119,425	)	$	61,743

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 acquired 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 is as follows (in thousands):

	Year Ended December 31,
	2017		2016		2015
Amortization expense – cost of revenue	$	8,824	$	4,164	$	4,712
Amortization expense – operating expenses		12,096		8,251		7,611
Total amortization expense	$	20,920	$	12,415	$	12,323

Estimated future amortization expense for each of the five succeeding years and thereafter is as follows (in thousands):

Year Ending December 31,	Cost of Revenue		Operating Expenses		Total
2018	$	9,742	$	14,584	$	24,326
2019		8,877		13,511		22,388
2020		7,980		11,051		19,031
2021		7,088		10,238		17,326
2022		5,682		8,586		14,268
Thereafter		14,226		30,456		44,682
Total	$	53,595	$	88,426	$	142,021

Impairment Charges

The Company performed the most recent annual goodwill and indefinite-lived intangible asset impairment test as of the beginning of the second quarter of 2017 using a Step 0 assessment, noting no impairment. The Company’s assessment included reviewing factors such as financial performance, macroeconomic conditions, industry and market considerations, and the fair value of each reporting unit at the last valuation date, which exceeded the carrying value by at least 20%.

The Company did not have any goodwill or indefinite-lived intangible asset impairment charges during 2017, 2016 or 2015.

- 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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