Quarterly report pursuant to Section 13 or 15(d)

Note 2 - Selected Balance Sheet Data

v3.6.0.2
Note 2 - Selected Balance Sheet Data
6 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Supplemental Balance Sheet Disclosures [Text Block]
N
ote
2.
Selected Balance Sheet Data
:
 
Available-For-Sale Investments:
 
The fair value of the Company's available-for-sale investments at
December
31
,
2016
and
June
30,
2016
were
$56.6
million and
$31.6
million, respectively. The increase was caused by the addition of
$5.1
million in corporate bond securities held by Advanced Cell Diagnostics (ACD), and the investment of
$1.3
million of available cash in China into certificates of deposit. The remaining difference is due to a
$17
.7
million change in the fair value of the Company's investment in ChemoCentryx, Inc. (CCXI). The amortized cost basis of the Company's investment in CCXI at
December
31,
2016
and
June
30,
2016
was
$29.5
million.
 
Inventories:
 
Inventories consist of (in thousands):
 
 
 
December 31,
 
 
June 30,
 
 
 
2016
 
 
2016
 
Raw materials
  $
22,201
    $
22,963
 
Finished goods
   
43,888
     
34,139
 
Inventories, net
  $
66,089
    $
57,102
 
 
 
At
December
31,
2016,
the Company had
$66.1
million of inventory compared to
$57.1
million as of
June
30,
2016.
The increase from
June
30
is primarily due to
$9.6
million of additional inventory at ACD which was acquired on
August
1,
2016.
At both
December
31,
2016
and
June
30,
2016,
the Company had approximately
$24
million of excess protein, antibody and chemically-based inventory on hand which was not valued.
 
 
Property and Equipment:
 
Property and equipment consist of (in thousands):
 
 
 
December 31,
 
 
June 30,
 
 
 
2016
 
 
2016
 
                 
Land
  $
6,270
    $
6,270
 
Buildings and improvements
   
157,337
     
157,963
 
Machinery and equipment
   
90,033
     
82,018
 
Property and equipment, cost
   
253,640
     
246,251
 
Accumulated depreciation and amortization
   
(121,688
)
   
(113,889
)
Property and equipment, net
  $
131,952
    $
132,362
 
 
Intangible Assets:
 
Intangible assets consist of (in thousands):         
                          
 
 
December 31,
 
 
June 30,
 
 
 
2016
 
 
2016
 
                 
Developed technology
  $
232,557
    $
120,611
 
Trade names
   
81,554
     
63,706
 
Customer relationships
   
272,082
     
191,118
 
Non-compete agreements
   
3,455
     
3,284
 
Intangible assets
   
589,648
     
378,719
 
Accumulated amortization
   
(96,106
)
   
(75,595
)
Net amortizable intangible asset
   
493,542
     
303,124
 
In process research and development
   
-
     
7,400
 
Intangible assets, net
  $
493,542
    $
310,524
 
 
Changes to the carrying amount of net intangible assets for the
six
months ended
December
31,
2016
consist of (in thousands):
 
Beginning balance
  $
310,524
 
Acquisitions (Note 3)
   
208,869
 
Amortization expense
   
(21,815
)
Currency translation
   
(4,036
)
Ending balance
  $
493,542
 
 
The estimated future amortization expense for intangible assets as of
December
31,
2016
is as follows (in thousands):
 
2017
  $
23,193
 
2018
   
46,255
 
2019
   
45,510
 
2020
   
44,869
 
2021
   
44,528
 
2022
   
42,930
 
Thereafter
   
246,257
 
Total
  $
493,542
 
 
G
oodwill:
 
Changes to the carrying amount of goodwill for the
six
months ended
December
31,
2016
consist of (in thousands):
 
   
Biotechnology
   
Diagnostics
   
Protein Platforms
   
Total
 
Beginning balance
  $
105,181
    $
105,729
    $
219,972
    $
430,882
 
Acquisitions (Note 3)
   
130,587
     
 
     
 
     
130,587
 
Prior year acquisitions (Note 3)
   
 
     
 
     
1,809
     
1,809
 
Currency translation
   
(2,580
)
   
 
     
(2,967
)
   
(5,547
)
Ending balance
  $
233,188
    $
105,729
    $
218,814
    $
557,731
 
 
We evaluate the carrying value of goodwill in the
fourth
quarter of each year and between annual evaluations if events occur or circumstances change that would indicate a possible impairment. The Company used a “step
zero”
qualitative test to assess
two
of its
three
reporting units during the
fourth
quarter for fiscal year
2016.
The estimated fair values of these reporting units using “step
zero”
testing substantially exceeded their respective carrying values. The company elected to utilize a “step
one”
quantitative test for the Protein Platforms reporting unit given that this is a newer reporting unit created primarily through acquisitions. Based on the “step
one”
testing performed, no adjustment to the carrying value of goodwill was necessary. All of the reporting units had substantial headroom as of
June
30,
2016
 
No triggering events were identified during the
six
months ended
December
31,
2016.
There has been no impairment of goodwill since the adoption of Financial Accounting Standards Board (“FASB”) ASC
350
guidance for goodwill and other intangibles on
July
1,
2002
.
 
Other Assets:
 
Other Assets consist of (in thousands):
 
 
 
December 31,
 
 
June 30,
 
 
 
2016
 
 
2016
 
Investments
  $
40,000
    $
-
 
Other
   
2,694
     
1,922
 
    $
42,694
    $
1,922
 
 
At
December
31,
2016,
the Company had
$42.7
million of other assets compared to
$1.9
million as of
June
30,
2016.
The increase from
June
30
is due to a
$40
.0
million investment in Astute Medical, Inc
. during the
second
quarter of fiscal year
2017.
This investment is accounted for under the cost-method as we own less than
20%
of the outstanding stock and we concluded that we do not have significant influence. Under the cost-method, the fair value is not estimated if there are no identified events or changes in circumstances that
may
have a significant adverse effect on the fair value of the investment. No such events or changes in circumstances were identified in the period ended
December
31,
2016.