XML 22 R9.htm IDEA: XBRL DOCUMENT

Note 2 - Goodwill and Purchased Intangible Assets

12 Months Ended

Dec. 25, 2021

Goodwill and Intangible Assets Disclosure [Text Block]

2.	Goodwill and Purchased Intangible Assets

Changes in the carrying value of our goodwill during the years ended December 25, 2021, and December 26, 2020, were as follows (in thousands):

	Semiconductor Test & Inspection			PCB Test			Total Goodwill
Balance December 28, 2019	$	218,775		$	19,894		$	238,669
Impact of currency exchange		11,949			1,686			13,635
Balance December 26, 2020		230,724			21,580			252,304
Sale of PCB Test Business⁽¹⁾		-			(21,899	)		(21,899	)
Impact of currency exchange		(10,933	)		319			(10,614	)
Balance December 25, 2021	$	219,791		$	-		$	219,791

(1)

On June 24, 2021, we completed the sale of our PCB Test business. See Note 14, “Business Divestitures and Discontinued Operations” for additional information.

Purchased intangible assets, subject to amortization, are as follows (in thousands):

	December 25, 2021						December 26, 2020
					Remaining
	Gross Carrying		Accumulated		Useful Life		Gross Carrying		Accumulated
	Amount		Amortization		(years)		Amount		Amortization
Developed technology	$	229,131	$	104,855		4.5	$	239,250	$	83,246
Customer relationships		65,916		26,189		7.4		74,933		22,751
Trade names		20,877		7,714		7.3		23,756		6,279
Covenant not-to-compete		308		154		5.0		340		136
	$	316,232	$	138,912			$	338,279	$	112,412

The table above excludes $7.8 million of in-process technology in 2020, which has an indefinite life and is subject to impairment or future amortization as developed technology when the projects are completed. During 2021 all remaining 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 and the sale of our PCB Test business.

We evaluate goodwill and other indefinite-lived intangible assets for impairment annually and when an event occurs, or circumstances change that indicate that the carrying value may not be recoverable. We completed our required annual goodwill and indefinite-lived intangible impairment testing as of October 1, 2021, the first day of our fourth quarter and concluded there were no impairments of goodwill within our reporting units or our indefinite-lived intangible assets at that time. Other events and changes in circumstances may also require goodwill and our indefinite-lived intangible assets to be tested for impairment between annual measurement dates.

During the first quarter of 2020, the volatility in Cohu’s stock price, the global economic downturn and business interruptions associated with the COVID-19 pandemic led us to determine that there was a triggering event related to goodwill and our indefinite-lived intangible assets. We performed an interim assessment as of March 28, 2020 and concluded there was no impairment of goodwill within our reporting units. Anticipated delays in customer adoption of certain new products under development as a result of the COVID-19 pandemic, changes to future project roadmaps and an increase in the discount rate used in developing our interim fair value estimate resulted in a $3.9 million impairment to IPR&D as the carrying value exceeded fair value. During the third quarter of 2020, we became aware of additional delays in customer adoption of these new products under development leading us to re-evaluate the fair value of these projects and we determined that the carrying value exceeded the fair value and, as a result, we recorded an additional $7.3 million impairment to IPR&D. For the twelve months ended December 26, 2020 total impairments recorded to IPR&D projects was $11.2 million. As noted above, during the fourth quarter of 2021 we completed and transferred to developed technology our last remaining in-process technology project which was reviewed for impairment as part of this process. Due to a change in forecasted results an impairment charge of $0.1 million was recorded.

Amortization expense related to purchased intangible assets was approximately $35.4 million in 2021, $38.7 million in 2020 and $39.6 million in 2019. As of December 25, 2021, we expect amortization expense in future periods to be as follows: 2022 - $34.8 million; 2023 - $34.8 million; 2024 - $34.8 million; 2025 - $26.1 million 2026 - $19.3 million; and thereafter $27.4 million.