Note 3 - Goodwill and Purchased Intangible Assets

12 Months Ended

Dec. 28, 2019

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

3.

     Goodwill and Purchased Intangible Assets

Changes in the carrying value of our goodwill during the years ended

December 28, 2019,

and

December 29, 2018,

were as follows (

in thousands

):

	Semiconductor Test & Inspection			PCB Test			Total Goodwill
Balance December 30, 2017	$	65,613		$	-		$	65,613
Additions		157,661			21,602			179,263
Impact of currency exchange		(2,466	)		(283	)		(2,749	)
Balance December 29, 2018		220,808			21,319			242,127
Adjustments		2,117			(983	)		1,134
Impairments (1)		(715	)		-			(715	)
Impact of currency exchange		(3,435	)		(442	)		(3,877	)
Balance December 28, 2019	$	218,775		$	19,894		$	238,669

( 1 ) Impairment of goodwill associated with our FSG segment that is presented as discontinued operations. This amount was not pushed down in the consolidated financial statements and was included within the balance of our Semiconductor Test & Inspection segment.

Purchased intangible assets, subject to amortization, are as follows

(in thousands)

:

	December 28, 2019						December 29, 2018
					Remaining
	Gross Carrying		Accumulated		Useful Life		Gross Carrying		Accumulated
	Amount		Amortization		(years)		Amount		Amortization
Developed technology	$	227,619	$	49,805		6.6	$	214,266	$	21,197
Customer relationships		72,251		14,824		9.3		73,104		7,378
Trade names		22,612		3,892		9.5		22,701		1,807
Backlog		6,328		6,328		-		6,372		4,696
Favorable leases*		-		-		-		1,100		62
Covenant not-to-compete		322		96		7.0		314		63
	$	329,132	$	74,945			$	317,857	$	35,203

* Favorable leases were reclassified to operating lease right of use assets on December 30, 2018 as a result of our adoption of ASU 2016 - 2.

The table above excludes

$20.8

 million and

$36.3

 million of in-process technology in

2019

and

2018,

respectively, which has an indefinite life and is subject to impairment or future amortization as developed technology when the projects are completed. During the current year

$15.3

 million of in-process technology was completed and transferred to developed technology and began being amortized. Changes in the carrying values of purchased intangible assets presented above are a result of the impact of fluctuation in currency exchange rates.

Amortization expense related to purchased intangible assets was approximately

$39.6

 million in

2019,

$17.2

 million in

2018

and

$4.2

 million in

2017.

The increases in amortization expense is the result of amortization of purchased intangible assets acquired from Xcerra. As of

December 28, 2019,

we expect amortization expense in future periods to be as follows:

2020

-

$38.4

 million;

2021

-

$34.8

 million;

2022

-

$34.8

 million;

2023

-

$34.8

 million

2024

-

$34.8

 million; and thereafter

$76.8

 million.