Goodwill and Intangible Assets

9 Months Ended

Sep. 27, 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 nine months ended September 27, 2024 (in thousands):


	Amount
Balance at beginning of the period	$	484,507
Goodwill acquired from Motion Solutions acquisition		106,569
Effect of foreign exchange rate changes		3,012
Balance at end of the period	$	594,088

Goodwill by reportable segment as of September 27, 2024 was as follows (in thousands):


	Reportable Segment
	Precision Medicine and Manufacturing			Medical Solutions			Robotics and Automation			Total
Goodwill	$	213,407		$	276,676		$	255,234		$	745,317
Accumulated impairment of goodwill		(102,461	)		(31,722	)		(17,046	)		(151,229	)
Total	$	110,946		$	244,954		$	238,188		$	594,088

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 September 27, 2024 and December 31, 2023, respectively, are summarized as follows (in thousands):


	September 27, 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	$	223,048	$	(158,765	)	$	64,283	$	187,092	$	(146,342	)	$	40,750
Customer relationships		270,286		(158,032	)		112,254		225,183		(142,478	)		82,705
Customer backlog		5,500		(4,125	)		1,375		—		—			—
Trademarks and trade names		23,861		(16,406	)		7,455		23,628		(15,088	)		8,540
Amortizable intangible assets		522,695		(337,328	)		185,367		435,903		(303,908	)		131,995
Non-amortizable intangible assets:
Trade names		13,027		—			13,027		13,027		—			13,027
Total intangible assets	$	535,722	$	(337,328	)	$	198,394	$	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 nine months ended September 27, 2024 and September 29, 2023, respectively, was as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 27,		September 29,		September 27,		September 29,
	2024		2023		2024		2023
Amortization expense – cost of revenue	$	3,708	$	3,051	$	11,086	$	9,119
Amortization expense – operating expenses		6,589		5,131		19,246		15,344
Total amortization expense	$	10,297	$	8,182	$	30,332	$	24,463

As of September 27, 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)	$	3,727	$	6,620	$	10,347
2025		14,425		22,544		36,969
2026		13,533		20,209		33,742
2027		10,669		16,032		26,701
2028		8,917		12,917		21,834
Thereafter		13,012		42,762		55,774
Total	$	64,283	$	121,084	$	185,367