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Goodwill and Intangible Assets
3 Months Ended
Apr. 02, 2021
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 2020 and noted no impairment.  

The following table summarizes changes in goodwill during the three months ended April 2, 2021 (in thousands):

 

Balance at beginning of the period

$

285,980

 

Effect of foreign exchange rate changes

 

(4,366

)

Balance at end of the period

$

281,614

 

Goodwill by reportable segment as of April 2, 2021 was as follows (in thousands):

 

 

Reportable Segment

 

 

 

 

 

 

Photonics

 

 

Vision

 

 

Precision

Motion

 

 

Total

 

Goodwill

$

216,908

 

 

$

162,634

 

 

$

53,301

 

 

$

432,843

 

Accumulated impairment of goodwill

 

(102,461

)

 

 

(31,722

)

 

 

(17,046

)

 

 

(151,229

)

Total

$

114,447

 

 

$

130,912

 

 

$

36,255

 

 

$

281,614

 

Goodwill by reportable segment as of December 31, 2020 was as follows (in thousands):

 

 

Reportable Segment

 

 

 

 

 

 

Photonics

 

 

Vision

 

 

Precision

Motion

 

 

Total

 

Goodwill

$

218,517

 

 

$

165,195

 

 

$

53,497

 

 

$

437,209

 

Accumulated impairment of goodwill

 

(102,461

)

 

 

(31,722

)

 

 

(17,046

)

 

 

(151,229

)

Total

$

116,056

 

 

$

133,473

 

 

$

36,451

 

 

$

285,980

 

 

Intangible Assets

Intangible assets as of April 2, 2021 and December 31, 2020, respectively, are summarized as follows (in thousands):

 

 

April 2, 2021

 

 

December 31, 2020

 

 

Gross Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net Carrying

Amount

 

 

Gross Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net Carrying

Amount

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patents and developed technologies

$

162,773

 

 

$

(112,979

)

 

$

49,794

 

 

$

164,430

 

 

$

(110,572

)

 

$

53,858

 

Customer relationships

 

165,528

 

 

 

(95,722

)

 

 

69,806

 

 

 

167,429

 

 

 

(92,892

)

 

 

74,537

 

Trademarks and trade names

 

18,239

 

 

 

(11,512

)

 

 

6,727

 

 

 

18,367

 

 

 

(11,268

)

 

 

7,099

 

Amortizable intangible assets

 

346,540

 

 

 

(220,213

)

 

 

126,327

 

 

 

350,226

 

 

 

(214,732

)

 

 

135,494

 

Non-amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade names

 

13,027

 

 

 

 

 

 

13,027

 

 

 

13,027

 

 

 

 

 

 

13,027

 

Totals

$

359,567

 

 

$

(220,213

)

 

$

139,354

 

 

$

363,253

 

 

$

(214,732

)

 

$

148,521

 

 

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

 

 

April 2,

 

 

April 3,

 

 

2021

 

 

2020

 

Amortization expense – cost of revenue

$

2,977

 

 

$

2,734

 

Amortization expense – operating expenses

 

3,575

 

 

 

3,445

 

Total amortization expense

$

6,552

 

 

$

6,179

 

Estimated amortization expense for each of the five succeeding years and thereafter as of April 2, 2021 was as follows (in thousands):

Year Ending December 31,

 

Cost of Revenue

 

 

Operating

Expenses

 

 

Total

 

2021 (remainder of year)

 

$

8,809

 

 

$

10,602

 

 

$

19,411

 

2022

 

 

10,065

 

 

 

13,282

 

 

 

23,347

 

2023

 

 

8,848

 

 

 

11,547

 

 

 

20,395

 

2024

 

 

6,613

 

 

 

9,540

 

 

 

16,153

 

2025

 

 

5,175

 

 

 

7,934

 

 

 

13,109

 

Thereafter

 

 

10,284

 

 

 

23,628

 

 

 

33,912

 

Total

 

$

49,794

 

 

$

76,533

 

 

$

126,327