Goodwill and Intangible Assets

6 Months Ended

Jun. 28, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

8. Goodwill and Intangible Assets

Goodwill

Goodwill is recorded when the consideration paid for a business combination exceeds the fair value of net tangible and identifiable intangible assets acquired. The Company tests its goodwill balances for impairment annually as of the beginning of the second quarter or more frequently if indicators are present or changes in circumstances suggest that an 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 2024 and noted no impairment.

The following table summarizes changes in goodwill during the six months ended June 28, 2024 (in thousands):


Balance at beginning of the period	$	484,507
Goodwill acquired from Motion Solutions acquisition		106,430
Effect of foreign exchange rate changes		(3,909	)
Balance at end of the period	$	587,028

Goodwill by reportable segment as of June 28, 2024 was as follows (in thousands):


	Reportable Segment
	Precision Medicine and Manufacturing			Medical Solutions			Robotics and Automation			Total
Goodwill	$	209,878		$	274,035		$	254,344		$	738,257
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	107,417		$	242,313		$	237,298		$	587,028

Goodwill by reportable segment as of December 31, 2023 was as follows (in thousands):


	Reportable Segment
	Precision Medicine and Manufacturing			Medical Solutions			Robotics and Automation			Total
Goodwill	$	211,380		$	169,738		$	254,618		$	635,736
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	108,919		$	138,016		$	237,572		$	484,507

Intangible Assets

Intangible assets as of June 28, 2024 and December 31, 2023, respectively, are summarized as follows (in thousands):


	June 28, 2024							December 31, 2023
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortizable intangible assets:
Patents and developed technologies	$	220,075	$	(152,662	)	$	67,413	$	187,092	$	(146,342	)	$	40,750
Customer relationships		266,544		(150,671	)		115,873		225,183		(142,478	)		82,705
Customer backlog		5,500		(2,750	)		2,750		—		—			—
Trademarks and trade names		23,491		(15,616	)		7,875		23,628		(15,088	)		8,540
Amortizable intangible assets		515,610		(321,699	)		193,911		435,903		(303,908	)		131,995
Non-amortizable intangible assets:
Trade names		13,027		—			13,027		13,027		—			13,027
Total intangible assets	$	528,637	$	(321,699	)	$	206,938	$	448,930	$	(303,908	)	$	145,022

All definite-lived intangible assets are amortized either on a straight-line basis or an economic benefit basis over their remaining estimated useful life. 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 and definite-lived trademarks, trade names and other intangibles is included in operating expenses in the accompanying consolidated statements of operations. Amortization expense for the three and six months ended June 28, 2024 and June 30, 2023, respectively, was as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 28,		June 30,		June 28,		June 30,
	2024		2023		2024		2023
Amortization expense – cost of revenue	$	3,685	$	3,046	$	7,377	$	6,068
Amortization expense – operating expenses		6,907		5,124		12,657		10,213
Total amortization expense	$	10,592	$	8,170	$	20,034	$	16,281

As of June 28, 2024, estimated amortization expense for each of the five succeeding years and thereafter was as follows (in thousands):


Year Ending December 31,	Cost of Revenue		Operating Expenses		Total
2024 (remainder of year)	$	7,360	$	12,631	$	19,991
2025		14,286		22,372		36,658
2026		13,430		20,069		33,499
2027		10,598		15,936		26,534
2028		8,861		12,853		21,714
Thereafter		12,878		42,637		55,515
Total	$	67,413	$	126,498	$	193,911