Goodwill And Other Intangible Assets

6 Months Ended

Jun. 30, 2016

Goodwill And Other Intangible Assets [Abstract]

9. Goodwill and Other Intangible Assets

Indefinite Lived Intangible Assets

As of June 30, 2016 and December 31, 2015 the carrying values of the Company’s indefinite lived intangible assets are as follows (in thousands):


	June 30,		December 31,
	2016		2015
Goodwill	$	76,760	$	11,365
Procurement contracts and agreements		2,013		2,013
Trademarks		840		860

Based on its experience with similar agreements, the Company believes that its acquired procurement contracts and agreements have indefinite useful lives, as the Company expects to continue to renew these contracts for the foreseeable future. The Company believes that its trademarks have indefinite useful lives as the Company currently anticipates that these trademarks will contribute to cash flows of the Company indefinitely.

As of June 30, 2016 and December 31, 2015 the value of the Company’s goodwill, all of which is related to its Medical Devices segment, is as follows (in thousands):


	Medical Devices Segment
Balance as of December 31, 2015	$	11,365
Goodwill from On-X acquisition		66,695
Goodwill allocated to sale of HeRO Graft product line		(1,200)
Goodwill allocated to sale of ProCol distribution rights and purchase option		(100)
Balance as of June 30, 2016	$	76,760

Definite Lived Intangible Assets

As of June 30, 2016 and December 31, 2015 the gross carrying values, accumulated amortization, and approximate amortization period of the Company’s definite lived intangible assets are as follows (in thousands):


	Gross Carrying		Accumulated		Amortization
June 30, 2016	Value		Amortization		Period
Acquired technology	$	38,478	$	4,850	11	–	22	Years
Customer lists and relationships		29,140		1,441	13	–	22	Years
Distribution and manufacturing rights and know-how		4,059		1,388	11	–	15	Years
Patents		3,709		2,648			17	Years
Non-compete agreement		381		362			10	Years
Other		1,336		339			3	Years

	Gross Carrying		Accumulated		Amortization
December 31, 2015	Value		Amortization		Period
Acquired technology	$	14,020	$	4,954	11	–	16	Years
Patents		4,081		2,664			17	Years
Distribution and manufacturing rights and know-how		4,059		1,245	11	–	15	Years
Customer lists and relationships		3,370		1,054	13	–	17	Years
Non-compete agreement		381		343			10	Years
Other		1,583		210	3	–	5	Years

The increase in gross carrying value of the Company’s intangible assets as of June 30, 2016 when compared to December 31, 2015 is primarily due to the Company’s acquisitions of On-X and PhotoFix, partially offset by reductions due to the HeRO Sale. See Note 4 for further discussion of the acquisition of On-X, Note 6 for further discussion of the acquisition of PhotoFix, and Note 5 for further discussion of the HeRO Sale.

Amortization Expense

The following is a summary of amortization expense as recorded in general, administrative, and marketing expenses on the Company’s Summary Consolidated Statement of Operations and Comprehensive Income (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Amortization expense	$	1,156	$	502	$	2,118	$	1,017

As of June 30, 2016 scheduled amortization of intangible assets for the next five years is as follows (in thousands):


	Remainder
	of 2016		2017		2018		2019		2020		2021
Amortization expense	$	2,309	$	4,575	$	4,457	$	4,114	$	3,950	$	3,927

- 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.

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