Goodwill and Intangible Assets

3 Months Ended

Apr. 01, 2022

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 2021 and noted no impairment.  

The following table summarizes changes in goodwill during the three months ended April 1, 2022 (in thousands):

Balance at beginning of the period	$	479,500
Effect of foreign exchange rate changes		(3,705	)
Balance at end of the period	$	475,795

Goodwill by reportable segment as of April 1, 2022 was as follows (in thousands):

	Reportable Segment
	Photonics			Vision			Precision Motion			Total
Goodwill	$	212,591		$	159,438		$	254,995		$	627,024
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	110,130		$	127,716		$	237,949		$	475,795

Goodwill by reportable segment as of December 31, 2021 was as follows (in thousands):

	Reportable Segment
	Photonics			Vision			Precision Motion			Total
Goodwill	$	214,564		$	160,675		$	255,490		$	630,729
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	112,103		$	128,953		$	238,444		$	479,500

Intangible Assets

Intangible assets as of April 1, 2022 and December 31, 2021, respectively, are summarized as follows (in thousands):

	April 1, 2022							December 31, 2021
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortizable intangible assets:
Patents and developed technologies	$	188,005	$	(124,548	)	$	63,457	$	189,609	$	(122,130	)	$	67,479
Customer relationships		226,555		(108,581	)		117,974		228,656		(104,386	)		124,270
Customer backlog		6,863		(4,004	)		2,859		6,862		(2,254	)		4,608
Trademarks and trade names		23,770		(12,632	)		11,138		23,976		(12,371	)		11,605
Amortizable intangible assets		445,193		(249,765	)		195,428		449,103		(241,141	)		207,962
Non-amortizable intangible assets:
Trade names		13,027		—			13,027		13,027		—			13,027
Totals	$	458,220	$	(249,765	)	$	208,455	$	462,130	$	(241,141	)	$	220,989

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 1,		April 2,
	2022		2021
Amortization expense – cost of revenue	$	3,423	$	2,977
Amortization expense – operating expenses		7,342		3,575
Total amortization expense	$	10,765	$	6,552

Estimated amortization expense for each of the five succeeding years and thereafter as of April 1, 2022 was as follows (in thousands):

Year Ending December 31,	Cost of Revenue		Operating Expenses		Total
2022 (remainder of year)	$	10,202	$	19,531	$	29,733
2023		12,326		20,731		33,057
2024		10,007		17,400		27,407
2025		8,464		14,719		23,183
2026		7,063		12,528		19,591
Thereafter		15,395		47,062		62,457
Total	$	63,457	$	131,971	$	195,428