Goodwill and Intangible Assets

6 Months Ended

Dec. 31, 2017

4. Goodwill and Intangible Assets

The changes in the carrying value of goodwill for the six month period ended December 31, 2017 were as follows (in thousands):

	Security		Healthcare		Optoelectronics and Manufacturing		Consolidated
Balance as of June 30, 2017	$	155,083	$	40,129	$	46,917	$	242,129
Goodwill acquired or adjusted during the period	42,893		—		50		42,943
Foreign currency translation adjustment	148		107		553		808

Balance as of December 31, 2017	$	198,124	$	40,236	$	47,520	$	285,880

Intangible assets consisted of the following (in thousands):

		June 30, 2017							December 31, 2017
	Weighted	Gross							Gross
	Average	Carrying		Accumulated			Intangibles		Carrying		Accumulated			Intangibles
	Lives	Value		Amortization			Net		Value		Amortization			Net
Amortizable assets:
Software development costs	9 years	$	26,753	$	(6,291	)	$	20,462	$	27,102	$	(7,674	)	$	19,428
Patents	20 years	8,386		(1,676		)	6,710		8,590		(1,518		)	7,072
Developed technology	10 years	37,446		(5,530		)	31,916		49,010		(7,431		)	41,579
Customer relationships/backlog	7 years	38,289		(7,667		)	30,622		54,554		(11,675		)	42,879

Total amortizable assets		110,874		(21,164		)	89,710		139,256		(28,298		)	110,958
Non-amortizable assets:
Trademarks and trade names		25,540		—			25,540		24,546		—			24,546
IPR&D		3,200		—			3,200		3,600		—			3,600

Total intangible assets		$	139,614	$	(21,164	)	$	118,450	$	167,402	$	(28,298	)	$	139,104

Amortization expense related to intangible assets was $3.4 million and $4.5 million for the three month periods ended December 31, 2016 and 2017, respectively. For the six months ended December 31, 2016 and 2017, amortization expense was $5.5 million and $8.7 million, respectively. At December 31, 2017, the estimated future amortization expense was as follows (in thousands):

2018 (remaining 6 months)	$	9,784
2019	19,577
2020	17,302
2021	16,756
2022	12,823
2023	11,745
2024 and thereafter, including assets that have not yet begun to be amortized	22,971

Total	$	110,958

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 2024 and thereafter in the table above. For the three months ended December 31, 2016 and 2017, we capitalized software development costs in the amount of $0.6 million and $0.2 million, respectively. For the six-month periods ended December 31, 2016 and 2017, we capitalized software development costs in the amount of $2.0 million and $0.3 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.

+ References + Details