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Goodwill and Intangible Assets | 9 Months Ended
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Sep. 28, 2018
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | 8. Goodwill and Intangible Assets Goodwill Goodwill is recorded when the consideration for a business combination exceeds the fair value of net tangible and identifiable intangible assets acquired. The Company tests its goodwill balances annually for impairment as of the beginning of the second quarter or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. The Company performed the most recent annual goodwill and indefinite-lived intangible asset impairment test as of the beginning of the second quarter of 2018 and noted no impairment of goodwill. The following table summarizes changes in goodwill during the nine months ended September 28, 2018 (in thousands):
Balance at beginning of the period | $ | 210,988 |
Goodwill acquired from acquisitions |  | 11,862 |
Effect of foreign exchange rate changes |  | (3,078 | )
Balance at end of the period | $ | 219,772 |
Goodwill by reportable segment as of September 28, 2018 was as follows (in thousands):
| Reportable Segment |  |  |  |  |
| Photonics |  |  | Vision |  |  | Precision Motion |  |  | Total |
Goodwill | $ | 169,803 |  |  | $ | 156,129 |  |  | $ | 45,069 |  |  | $ | 371,001 |
Accumulated impairment of goodwill |  | (102,461 | ) |  |  | (31,722 | ) |  |  | (17,046 | ) |  |  | (151,229 | )
Total | $ | 67,342 |  |  | $ | 124,407 |  |  | $ | 28,023 |  |  | $ | 219,772 |
Goodwill by reportable segment as of December 31, 2017 was as follows (in thousands):
| Reportable Segment |  |  |  |  |
| Photonics |  |  | Vision |  |  | Precision Motion |  |  | Total |
Goodwill | $ | 170,818 |  |  | $ | 157,436 |  |  | $ | 33,963 |  |  | $ | 362,217 |
Accumulated impairment of goodwill |  | (102,461 | ) |  |  | (31,722 | ) |  |  | (17,046 | ) |  |  | (151,229 | )
Total | $ | 68,357 |  |  | $ | 125,714 |  |  | $ | 16,917 |  |  | $ | 210,988 |
Intangible Assets Intangible assets as of September 28, 2018 and December 31, 2017, respectively, are summarized as follows (in thousands):
| September 28, 2018 |  |  | December 31, 2017 |
| Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Carrying Amount |  |  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Carrying Amount |
Amortizable intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Patents and developed technologies | $ | 134,144 |  |  | $ | (84,359 | ) |  | $ | 49,785 |  |  | $ | 130,890 |  |  | $ | (77,295 | ) |  | $ | 53,595 |
Customer relationships |  | 140,539 |  |  |  | (61,253 | ) |  |  | 79,286 |  |  |  | 131,809 |  |  |  | (52,015 | ) |  |  | 79,794 |
Customer backlog |  | 1,779 |  |  |  | (761 | ) |  |  | 1,018 |  |  |  | 2,524 |  |  |  | (2,284 | ) |  |  | 240 |
Non-compete covenant |  | 2,514 |  |  |  | (2,358 | ) |  |  | 156 |  |  |  | 2,514 |  |  |  | (1,956 | ) |  |  | 558 |
Trademarks and trade names |  | 16,064 |  |  |  | (8,688 | ) |  |  | 7,376 |  |  |  | 15,708 |  |  |  | (7,874 | ) |  |  | 7,834 |
Amortizable intangible assets |  | 295,040 |  |  |  | (157,419 | ) |  |  | 137,621 |  |  |  | 283,445 |  |  |  | (141,424 | ) |  |  | 142,021 |
Non-amortizable intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade names |  | 13,027 |  |  |  | — |  |  |  | 13,027 |  |  |  | 13,027 |  |  |  | — |  |  |  | 13,027 |
Totals | $ | 308,067 |  |  | $ | (157,419 | ) |  | $ | 150,648 |  |  | $ | 296,472 |  |  | $ | (141,424 | ) |  | $ | 155,048 |
Amortizable intangible assets as of September 28, 2018 include intangible assets of $1.1 million recognized in conjunction with the acquisition of certain customer relationships in September 2018. All definite-lived intangible assets are amortized either on a straight-line basis or an economic benefit basis over their remaining useful lives. Amortization expense for patents and developed technologies is included in cost of revenue in the accompanying consolidated statements of operations. Amortization expense for customer relationships, definite-lived trademarks and trade names, and other intangible assets is included in operating expenses in the accompanying consolidated statements of operations. Amortization expense was as follows (in thousands):
| Three Months Ended |  |  | Nine Months Ended |
| September 28, |  |  | September 29, |  |  | September 28, |  |  | September 29, |
| 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Amortization expense – cost of revenue | $ | 2,492 |  |  | $ | 2,741 |  |  | $ | 7,461 |  |  | $ | 6,078 |
Amortization expense – operating expenses |  | 3,947 |  |  |  | 3,217 |  |  |  | 11,538 |  |  |  | 9,413 |
Total amortization expense | $ | 6,439 |  |  | $ | 5,958 |  |  | $ | 18,999 |  |  | $ | 15,491 |
Estimated amortization expense for each of the five succeeding years and thereafter as of September 28, 2018 was as follows (in thousands):
Year Ending December 31, |  | Cost of Revenue |  |  | Operating Expenses |  |  | Total |
2018 (remainder of year) |  | $ | 2,532 |  |  | $ | 4,068 |  |  | $ | 6,600 |
2019 |  |  | 9,256 |  |  |  | 14,945 |  |  |  | 24,201 |
2020 |  |  | 8,338 |  |  |  | 12,602 |  |  |  | 20,940 |
2021 |  |  | 7,407 |  |  |  | 11,683 |  |  |  | 19,090 |
2022 |  |  | 6,289 |  |  |  | 9,829 |  |  |  | 16,118 |
Thereafter |  |  | 15,963 |  |  |  | 34,709 |  |  |  | 50,672 |
Total |  | $ | 49,785 |  |  | $ | 87,836 |  |  | $ | 137,621 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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