Goodwill and Intangible Assets

3 Months Ended

Sep. 30, 2015

3. Goodwill and Intangible Assets

The changes in the carrying value of goodwill for the three month period ended September 30, 2015 are as follows (in thousands):

						Optoelectronics
						and
	Security		Healthcare			Manufacturing
	Division		Division			Division			Consolidated
Balance as of June 30, 2015	$	29,730	$	43,182		$	25,255		$	98,167
Foreign currency translation adjustment	9		(111		)	(250		)	(352		)

Balance as of September 30, 2015	$	29,739	$	43,071		$	25,005		$	97,815

Intangible assets consisted of the following (in thousands):

		June 30, 2015						September 30, 2015
	Weighted	Gross						Gross
	Average	Carrying		Accumulated		Intangibles		Carrying		Accumulated		Intangibles
	Lives	Value		Amortization		Net		Value		Amortization		Net
Amortizable assets:
Software development costs	8 years	$	24,631	$	7,500	$	17,131	$	19,670	$	2,472	$	17,198
Patents	17 years	7,206		994		6,212		7,466		1,056		6,410
Developed technology	11 years	13,397		4,528		8,869		13,636		4,854		8,782
Customer relationships/backlog	7 years	8,619		3,406		5,213		8,557		3,696		4,861

Total amortizable assets		53,853		16,428		37,425		49,329		12,078		37,251
Non-amortizable assets:
Trademarks		12,988		—		12,988		12,964		—		12,964

Total intangible assets		$	66,841	$	16,428	$	50,413	$	62,293	$	12,078	$	50,215

Amortization expense related to intangible assets was $0.8 million and $1.1 million for the three months ended September 30, 2014 and 2015, respectively. At September 30, 2015, the estimated future amortization expense was as follows (in thousands):

2016 (remaining 9 months)	$	4,302
2017	5,136
2018	5,170
2019	5,208
2020	3,907
2021	3,753
2022 and thereafter, including assets that have not yet begun to be amortized	9,775

Total	$	37,251

Software development costs for software products incurred before establishing technological feasibility are charged to operations. Software development costs incurred after establishing technological feasibility are capitalized on a product by product basis until the product is available for general release to customers at which time amortization begins. Annual amortization, charged to cost of goods sold, is the amount computed using the ratio that current revenues for a product bear to the total current and anticipated future revenues for that product. In the event that future revenues are not estimable, such costs are amortized on a straight line basis over the remaining estimated economic life of the product. Amortizable assets that have not yet begun to be amortized are included in thereafter in the table above. For the three months ended September 30, 2014 and 2015, the Company capitalized software development costs in the amount of $0.6 million and $0.4 million, respectively.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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