Goodwill and Intangible Assets

6 Months Ended

Dec. 31, 2016

4. Goodwill and Intangible Assets

The changes in the carrying value of goodwill for the six-month period ended December 31, 2016 were as follows (in thousands):

	Security			Healthcare			Optoelectronics and Manufacturing			Consolidated
Balance as of June 30, 2016	$	32,922		$	42,574		$	47,323		$	122,819
Goodwill acquired or adjusted during the period	122,069			—			—			122,069
Foreign currency translation adjustment	(139		)	(525		)	(1,273		)	(1,937		)

Balance as of December 31, 2016	$	154,852		$	42,049		$	46,050		$	242,951

Intangible assets as of June 30, 2016 and December 31, 2016 were as follows (in thousands):

		June 30, 2016						December 31, 2016
	Weighted Average Lives	Gross Carrying Value		Accumulated Amortization		Intangibles Net		Gross Carrying Value		Accumulated Amortization		Intangibles Net
Amortizable assets:
Software development costs	9 years	$	22,091	$	4,120	$	17,971	$	26,080	$	5,046	$	21,034
Patents	20 years	8,111		1,760		6,351		8,076		1,454		6,622
Developed technology	10 years	12,901		3,969		8,932		39,495		4,356		35,139
Customer relationships/backlog	7 years	14,223		4,862		9,361		39,959		5,703		34,256

Total amortizable assets		57,326		14,711		42,615		113,610		16,559		97,051
Non-amortizable assets:
Trademarks and trade names		13,668		—		13,668		26,031		—		26,031
IPR&D		—		—		—		3,200		—		3,200

Total intangible assets		$	70,994	$	14,711	$	56,283	$	142,841	$	16,559	$	126,282

Amortization expense related to intangible assets was $1.1 million and $3.4 million for the three month periods ended December 31, 2015 and 2016, respectively. For the six months ended December 31, 2015 and 2016, amortization expense was $2.1 million and $5.5 million, respectively. At December 31, 2016, the estimated future amortization expense was as follows (in thousands):

Fiscal Years
2017 (remaining 6 months)	$	7,046
2018	14,812
2019	14,682
2020	13,071
2021	10,573
2022	8,070
2023 and thereafter (including assets that have not yet begun to be amortized)	28,797

Total	$	97,051

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 December 31, 2015 and 2016, the Company capitalized software development costs in the amount of $1.0 million and $0.6 million, respectively. For the six-month periods ended December 31, 2015 and 2016, the Company capitalized software development costs in the amount of $1.4 million and $2.0 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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