Goodwill and Other Intangible Assets

6 Months Ended

Jul. 03, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The Company tests the goodwill in each of its goodwill reporting units for impairment at least annually, as of the first day of it's fourth quarter, and whenever events or changes in circumstances occur indicating that a possible impairment may have been incurred. Due to updated financial projections, the Company performed a quantitative impairment test for the instrumentation reporting unit during the second quarter of 2021. In estimating the fair value of our instrumentation reporting unit the Company used the income approach.

The results of the quantitative impairment test for the instrumentation reporting unit's goodwill and indefinite-lived trade name indicated an impairment, and in the second quarter of 2021, the Company recognized a non-cash impairment loss of $1.1 million in goodwill and $0.1 million to the indefinite-lived trade name. The impairment was driven mainly by changes in forecasted projections including a slower growth rate in revenues. After considering the impact of the impairment charges, the carrying amount of goodwill and indefinite-lived trade names as of July 3, 2021 was $0.0 million and $0.3 million, respectively.

The change in the carrying amount of goodwill by segment is as follows (in thousands):

	Total		Weighing and Control Systems Segment								Foil Technology Products Segment
			KELK Acquisition		DSI Acquisition		DTS Acquisition		Stress-Tek Acquisition		Pacific Acquisition
Balance at December 31, 2020	$	31,105	$	6,726	$	16,942			$	6,311	$	1,126
Goodwill acquired	15,587						15,587
Impairment charges	(1,126)										(1,126)
Foreign currency translation adjustment	166		180		(14)				—		—
Balance at July 3, 2021	$	45,732	$	6,906	$	16,928	$	15,587	$	6,311	$	—

Intangible assets were as follows (in thousands):

	July 3, 2021		December 31, 2020
Intangible assets subject to amortization
(Definite-lived):
Patents and acquired technology	$	33,069	$	19,804
Customer relationships	34,393		26,061
Trade names	1,697		1,747
Non-competition agreements	11,646		12,259
	80,805		59,871
Accumulated amortization:
Patents and acquired technology	(6,552)		(5,895)
Customer relationships	(14,191)		(13,363)
Trade names	(1,697)		(1,747)
Non-competition agreements	(11,639)		(12,250)
	(34,079)		(33,255)
Net intangible assets subject to amortization	$	46,726	$	26,616
Intangible assets not subject to amortization
(Indefinite-lived):
Trade names	7,748		5,423
	$	54,474	$	32,039

The increase in net intangible assets from December 31, 2020 is due to the acquisition of DTS on June 1, 2021. The Company has preliminarily allocated $21.3 million of the purchase price to definite-lived intangible assets and $2.4 million to indefinite-lived intangible assets.

Amortization expense for the fiscal quarter and six fiscal months ended July 3, 2021 was $0.7 million and $1.4 million, respectively. The DTS intangible assets accounted for $0.1 million of amortization expense for the fiscal quarter and six fiscal months ended July 3, 2021.

Estimated annual amortization expense for the full year of 2021 and each of the next four years, is as follows ( in thousands):

2021	$	3,280
2022	3,871
2023	3,763
2024	3,728
2025	3,728