Goodwill and Intangible Assets

9 Months Ended

Mar. 31, 2017

4. Goodwill and Intangible Assets

The changes in the carrying value of goodwill for the nine-month period ended March 31, 2017 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	122,478		—			—			122,478
Goodwill reduced as part of a divestiture	—		(2,200		)	—			(2,200		)
Foreign currency translation adjustment	12		(365		)	(1,017		)	(1,370		)

Balance as of March 31, 2017	$	155,412	$	40,009		$	46,306		$	241,727

Intangible assets as of June 30, 2016 and March 31, 2017 were as follows (in thousands):

		June 30, 2016						March 31, 2017
	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	$	26,020	$	5,741	$	20,279
Patents	20 years	8,111		1,760		6,351		8,342		1,548		6,794
Developed technology	10 years	12,901		3,969		8,932		37,446		4,604		32,842
Customer relationships/backlog	7 years	14,223		4,862		9,361		38,690		6,695		31,995

Total amortizable assets		57,326		14,711		42,615		110,498		18,588		91,910
Non-amortizable assets:
Trademarks and trade names		13,668		—		13,668		25,465		—		25,465
IPR&D		—		—		—		3,200		—		3,200

Total intangible assets		$	70,994	$	14,711	$	56,283	$	139,163	$	18,588	$	120,575

Amortization expense related to intangible assets was $1.4 million and $3.6 million for the three month periods ended March 31, 2016 and 2017, respectively. For the nine months ended March 31, 2016 and 2017, amortization expense was $3.4 million and $9.1 million, respectively. At March 31, 2017, the estimated future amortization expense was as follows (in thousands):

Fiscal Years
2017 (remaining 3 months)	$	3,376
2018	14,438
2019	14,270
2020	12,652
2021	10,332
2022	8,409
2023 and thereafter (including assets that have not yet begun to be amortized)	28,433

Total	$	91,910

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 2023 and thereafter in the table above. For the three months ended March 31, 2017, the Company did not capitalize any software development costs; while for the three months ended March 31, 2016, the Company capitalized software development costs in the amount of $0.7 million. For the nine-month periods ended March 31, 2016 and 2017, the Company capitalized software development costs in the amount of $2.1 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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