Goodwill and Intangible Assets

6 Months Ended

Jul. 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 2022 and noted no impairment.  

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

Balance at beginning of the period	$	479,500
Effect of foreign exchange rate changes		(13,089	)
Balance at end of the period	$	466,411

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

	Reportable Segment
	Photonics			Vision			Precision Motion			Total
Goodwill	$	207,646		$	156,223		$	253,771		$	617,640
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	105,185		$	124,501		$	236,725		$	466,411

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 July 1, 2022 and December 31, 2021, respectively, are summarized as follows (in thousands):

	July 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	$	183,807	$	(125,291	)	$	58,516	$	189,609	$	(122,130	)	$	67,479
Customer relationships		221,306		(111,021	)		110,285		228,656		(104,386	)		124,270
Customer backlog		6,831		(5,693	)		1,138		6,862		(2,254	)		4,608
Trademarks and trade names		23,255		(12,722	)		10,533		23,976		(12,371	)		11,605
Amortizable intangible assets		435,199		(254,727	)		180,472		449,103		(241,141	)		207,962
Non-amortizable intangible assets:
Trade names		13,027		—			13,027		13,027		—			13,027
Totals	$	448,226	$	(254,727	)	$	193,499	$	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				Six Months Ended
	July 1,		July 2,		July 1,		July 2,
	2022		2021		2022		2021
Amortization expense – cost of revenue	$	3,336	$	2,982	$	6,757	$	5,959
Amortization expense – operating expenses		7,173		3,586		14,515		7,161
Total amortization expense	$	10,509	$	6,568	$	21,272	$	13,120

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

Year Ending December 31,	Cost of Revenue		Operating Expenses		Total
2022 (remainder of year)	$	6,599	$	11,957	$	18,556
2023		11,976		20,215		32,191
2024		9,737		16,961		26,698
2025		8,265		14,348		22,613
2026		6,916		12,200		19,116
Thereafter		15,023		46,275		61,298
Total	$	58,516	$	121,956	$	180,472