Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Purchased Intangible Assets

v3.5.0.2
Goodwill and Purchased Intangible Assets
3 Months Ended
Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND PURCHASED INTANGIBLE ASSETS
NOTE 5 – GOODWILL AND PURCHASED INTANGIBLE ASSETS
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in prior business combinations. The Company has four reporting units: Wafer Inspection, Patterning, Global Service and Support, and Others. The following table presents goodwill balances and movements by reporting unit during the three months ended September 30, 2016:
(In thousands)
 
Wafer Inspection
 
Patterning
 
Others
 
Total
Balance as of June 30, 2016
 
$
281,026

 
$
53,255

 
$
896

 
$
335,177

Goodwill adjustment
 
21

 

 

 
21

Balance as of September 30, 2016
 
$
281,047

 
$
53,255

 
$
896

 
$
335,198


Goodwill is net of accumulated impairment losses of $277.6 million, which were recorded prior to the fiscal year ended June 30, 2014. The changes in the gross goodwill balance during the three months ended September 30, 2016 resulted from foreign currency translation adjustments.
The Company performed a qualitative assessment of the goodwill by reporting unit as of November 30, 2015 during the three months ended December 31, 2015 as part of its annual goodwill impairment assessment and concluded that it was more likely than not that the fair value of each of the reporting units exceeded its carrying amount. As of December 31, 2015, the Company’s assessment indicated that goodwill in the reporting units was not impaired. There have been no significant events or circumstances affecting the valuation of goodwill subsequent to the qualitative assessment performed in the second quarter of the fiscal year ended June 30, 2016. The next annual assessment of goodwill by reporting unit is scheduled to be performed in the second quarter of the fiscal year ending June 30, 2017.
Purchased Intangible Assets
The components of purchased intangible assets as of the dates indicated below were as follows:
(In thousands)
 
 
As of
September 30, 2016
 
As of
June 30, 2016
Category
Range of
Useful Lives
 
Gross
Carrying
Amount
 
Accumulated
Amortization
and
Impairment
 
Net
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
and
Impairment
 
Net
Amount
Existing technology
4-7 years
 
$
141,659

 
$
138,660

 
$
2,999

 
$
141,659

 
$
138,160

 
$
3,499

Trade name/Trademark
4-10 years
 
19,893

 
19,893

 

 
19,893

 
19,743

 
150

Customer relationships
6-7 years
 
54,980

 
54,914

 
66

 
54,980

 
54,298

 
682

Total
 
 
$
216,532

 
$
213,467

 
$
3,065

 
$
216,532

 
$
212,201

 
$
4,331


Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.
For the three months ended September 30, 2016 and 2015, amortization expense for purchased intangible assets was $1.3 million and $3.7 million, respectively. Based on the intangible assets recorded as of September 30, 2016, and assuming no subsequent additions to, or impairment of, the underlying assets, the remaining estimated amortization expense is expected to be as follows:
Fiscal year ending June 30:
Amortization
(In thousands)
2017 (remaining 9 months)
$
1,540

2018
1,525

Total
$
3,065