XML 31 R16.htm IDEA: XBRL DOCUMENT
v3.24.1

Goodwill and Intangible Assets | 12 Months Ended
--- | ---
Jan. 28, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The carrying amounts of goodwill by applicable operating segments were as follows:
(in thousands) | Signal Integrity |  | Analog Mixed Signal and Wireless (f.k.a. Advanced Protection and Sensing) |  | IoT Systems |  | IoT Connected Services |  | Unallocated |  | Total
Balance at January 29, 2023 | $ | 274,085 |  |  | $ | 14,639 |  |  | $ | 61,582 |  |  | $ | — |  |  | $ | 931,397 |  |  | $ | 1,281,703 |
Measurement period adjustments | — |  |  | — |  |  | — |  |  | — |  |  | 23,925 |  |  | 23,925 |
Reallocation | (6,880) |  |  | 68,462 |  |  | 593,945 |  |  | 299,795 |  |  | (955,322) |  |  | — |
Cumulative translation adjustment | — |  |  | — |  |  | (2,353) |  |  | (6,427) |  |  | — |  |  | (8,780) |
Impairment | — |  |  | — |  |  | (546,609) |  |  | (209,012) |  |  | — |  |  | (755,621) |
Balance at January 28, 2024 | $ | 267,205 |  |  | $ | 83,101 |  |  | $ | 106,565 |  |  | $ | 84,356 |  |  | $ | — |  |  | $ | 541,227 |
On January 12, 2023, in connection with the Sierra Wireless Acquisition, the Company acquired all of the outstanding equity interests in Sierra Wireless and a preliminary goodwill balance of $931.4 million was recorded for the excess of the consideration transferred over the net assets acquired and represented the expected revenue and cost synergies of the combined company and assembled workforce. During fiscal year 2024, the Company recorded measurement period adjustments that increased goodwill by $23.9 million. See Note 3, Acquisition and Divestiture, for further discussion of the Sierra Wireless Acquisition and impact of the measurement period adjustments. During fiscal year 2023, in conjunction with the Sierra Wireless Acquisition, the Company formed two additional operating segments: the IoT Systems operating segment, which also included the Company's pre-existing wireless business, and the IoT Connected Services operating segment. During fiscal year 2024, as a result of organizational restructuring, the wireless business, which had been previously included in the IoT Systems operating segment, and the software defined video over ethernet ("SDVoE") business, which had previously been included in the Signal Integrity operating segment, were moved into the Analog Mixed Signal and Wireless operating segment, formerly the Advanced Protection and Sensing operating segment, which also includes the proximity sensing, power and protection businesses. See Note 16, Segment Information, for further discussion of the Company's operating segments. During fiscal year 2024, the Company finalized the determination of the reporting units related to the previously-identified operating segments. IoT Systems-Modules and IoT Systems-Routers were identified as reporting units, which aggregate into the IoT Systems operating segment. IoT Connected Services comprises one reporting unit and, accordingly, is both a reporting unit and an operating segment. During fiscal year 2024, the Company also completed an allocation of the goodwill balance resulting from the Sierra Wireless Acquisition to each of these reporting units. The Wireless reporting unit and the Advanced Protection and Sensing reporting unit aggregate into the Analog Mixed Signal and Wireless operating segment. Signal Integrity comprises one reporting unit and, accordingly, is both a reporting unit and an operating segment. As a result of the restructuring of the Company's operating segments during fiscal year 2024, the Company reallocated $61.6 million of goodwill from the IoT Systems operating segment, related to the Wireless reporting unit, and $6.9 million of goodwill from the Signal Integrity operating segment, related to the digital video business, to the Analog Mixed Signal and Wireless operating segment, formerly the Advanced Protection and Sensing operating segment, based on the relative fair values of the businesses in the respective reporting units. Goodwill is not amortized, but is tested for impairment at the reporting unit level using either a qualitative or quantitative assessment on an annual basis during the fourth quarter of each fiscal year, and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Impairment of goodwill is measured at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair market value of the reporting unit. A total of $755.6 million of pre-tax non-cash goodwill impairment charges were recorded for fiscal year 2024 in the Statements of Operations as a result of impairment tests performed throughout the fiscal year. During the second quarter of fiscal year 2024, as a result of reduced earnings forecasts associated with the business acquired from Sierra Wireless and current macroeconomic conditions, including an elevated interest rate environment, the Company performed an interim impairment test using a quantitative assessment of the reporting units related to the Sierra Wireless Acquisition (specifically, the IoT Connected Services, IoT Systems–Modules and IoT Systems–Routers reporting units). This interim impairment test resulted in $279.6 million of total pre-tax non-cash goodwill impairment charges recorded during the second quarter of fiscal year 2024, consisting of $69.0 million of goodwill impairment for the IoT Connected Services reporting unit, $109.9 million of goodwill impairment for the IoT Systems–Modules reporting unit and $100.7 million goodwill impairment for the IoT Systems–Routers reporting unit. During the third quarter of fiscal year 2024, the Company recorded an additional $2.3 million of total pre-tax non-cash goodwill impairment charges resulting from the finalization of the measurement period adjustments, consisting of $1.6 million of goodwill impairment for the IoT Connected Services reporting unit, $0.2 million of goodwill impairment for the IoT Systems–Modules reporting unit and $0.5 million of goodwill impairment for the IoT Systems–Routers reporting unit. During the fourth quarter of fiscal year 2024, the Company performed its annual goodwill and intangible asset impairment assessment using a quantitative assessment for all of its reporting units. Due to a further reduction in earnings forecasts associated with the business acquired from Sierra Wireless, the Company recorded an additional $473.8 million of total pre-tax non-cash goodwill impairment charges resulting from a quantitative assessment of the reporting units, consisting of $138.4 million of goodwill impairment for the IoT Connected Services reporting unit, $135.1 million of goodwill impairment for the IoT Systems–Modules reporting unit and $200.3 million of goodwill impairment for the IoT Systems–Routers reporting unit. There was no goodwill impairment at any of the Company's other reporting units. The fair values of these reporting units were determined based on a discounted cash flow model (an income approach) and earnings multiples (a market approach). Significant inputs to the reporting unit fair value measurements included forecasted cash flows, discount rates, terminal growth rates and earnings multiples, which were determined by management estimates and assumptions. The reporting unit fair value measurements are classified as Level 3 in the fair value hierarchy because they involve significant unobservable inputs. In performing the annual goodwill impairment testing during the fourth quarter of fiscal year 2024, the Company also determined that the carrying amounts of our asset groups related to the Sierra Wireless Acquisition may not be recoverable. The Company therefore performed impairment tests on the long-lived assets in each asset group, including definite-lived intangible assets using an undiscounted cash flow analysis, to determine whether the carrying amounts of each asset group related to the Sierra Wireless Acquisition are recoverable. All three asset groups failed the undiscounted cash flow recoverability test and therefore the Company estimated the fair value of the asset group to determine whether any asset impairment was present. The Company’s estimation of the fair value of the long-lived assets included the use of discounted cash flow analyses. Based on these analyses, the Company concluded that the fair values of certain assets were lower than their carrying amounts. During the fourth quarter of fiscal year 2024, the Company recognized intangible impairment charges of $91.8 million for core technologies, $34.8 million for customer relationships and $4.8 million for trade name, reducing the carrying amounts to $28.1 million for core technologies, $4.1 million for customer relationships and $1.5 million for trade name. For fiscal year 2023, prior to and subsequent to the restructuring of the Company's reporting units due to the Sierra Wireless Acquisition, the Company performed a quantitative assessment that demonstrated that the fair value of each of the reporting units was higher than their respective carrying values. For fiscal year 2022, the Company performed a qualitative assessment and concluded that it was more likely than not that the fair value of each of the reporting units exceeded its carrying value. No impairment to goodwill was recorded during fiscal years 2023 or 2022. As a result of the divestiture of the Disposal Group during fiscal year 2023, the Company recorded a reduction to its goodwill of $0.8 million based on the relative fair value of the Disposal Group and the portion of the applicable reporting unit that will be retained. See Note 3, Acquisition and Divestiture, for additional information. Purchased and Other Intangibles The following table sets forth the Company’s finite-lived intangible assets resulting from business acquisitions, which are amortized over their estimated useful lives:
|  |  | January 28, 2024
(in thousands) | Estimated Useful Life |  | Gross Carrying Amount |  | Accumulated Amortization |  | Impairment |  | Net Carrying Amount
Core technologies | 1-8 years |  | $ | 154,985 |  |  | $ | (35,130) |  |  | (91,792) |  |  | $ | 28,063 |
Customer relationships | 1-10 years |  | 52,272 |  |  | (13,391) |  |  | (34,777) |  |  | 4,104 |
Trade name | 2-10 years |  | 9,000 |  |  | (2,700) |  |  | (4,816) |  |  | 1,484 |
Total finite-lived intangible assets |  |  | $ | 216,257 |  |  | $ | (51,221) |  |  | $ | (131,385) |  |  | $ | 33,651 |
|  |  | January 29, 2023
(in thousands) | Estimated Useful Life |  | Gross Carrying Amount |  | Accumulated Amortization |  | Impairment |  | Net Carrying Amount
Core technologies | 1-8 years |  | $ | 175,080 |  |  | $ | (21,156) |  |  | — |  |  | $ | 153,924 |
Customer relationships | 1-10 years |  | 53,000 |  |  | (690) |  |  | — |  |  | 52,310 |
Trade name | 2-10 years |  | 9,000 |  |  | (132) |  |  | — |  |  | 8,868 |
Total finite-lived intangible assets |  |  | $ | 237,080 |  |  | $ | (21,978) |  |  | $ | — |  |  | $ | 215,102 |
Amortization expense of finite-lived intangible assets was as follows:
| Fiscal Year Ended
(in thousands) | January 28, 2024 |  | January 29, 2023 |  | January 30, 2022
Core technologies | $ | 33,716 |  |  | $ | 5,660 |  |  | $ | 4,942 |
Customer relationships | 12,345 |  |  | 690 |  |  | — |
Trade name | 2,568 |  |  | 132 |  |  | — |
Total amortization expense | $ | 48,629 |  |  | $ | 6,482 |  |  | $ | 4,942 |
Amortization expense of finite-lived intangible assets related to core technologies was recorded in "Amortization of acquired technology" within "Total cost of sales" in the Statements of Operations and amortization expense of finite-lived intangible assets related to customer relationships and trade name was recorded in "Intangible amortization" within "Total operating costs and expenses, net" in the Statements of Operations. As of the Acquisition Date, the weighted-average amortization period for the finite-lived intangible assets acquired in the Sierra Wireless Acquisition was 5.3 years, which reflects weighted-average amortization periods of 4.4 years, 7.9 years and 6.2 years for core technologies, customer relationships and trade name, respectively. Future amortization expense of finite-lived intangible assets is expected as follows:
(in thousands) | Core Technologies |  | Customer relationships |  | Trade name |  | Total
Fiscal year 2025 | $ | 9,110 |  |  | $ | 458 |  |  | $ | 426 |  |  | $ | 9,994 |
Fiscal year 2026 | 8,611 |  |  | 458 |  |  | 133 |  |  | 9,202 |
Fiscal year 2027 | 3,719 |  |  | 458 |  |  | 133 |  |  | 4,310 |
Fiscal year 2028 | 3,563 |  |  | 458 |  |  | 133 |  |  | 4,154 |
Fiscal year 2029 | 3,060 |  |  | 383 |  |  | 133 |  |  | 3,576 |
Thereafter | — |  |  | 1,889 |  |  | 526 |  |  | 2,415 |
Total expected amortization expense | $ | 28,063 |  |  | $ | 4,104 |  |  | $ | 1,484 |  |  | $ | 33,651 |
Also in “Other intangible assets, net” in the Balance Sheets, are finite-lived intangible assets under construction to be amortized upon placement in service. The following table sets forth the Company’s finite-lived intangible assets under construction:
(in thousands) |  | Net Carrying Amount
Value at January 29, 2023 |  | $ | — |
Capitalized development costs |  | 1,915 |
Value at January 28, 2024 |  | $ | 1,915 |

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 350 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//350/tableOfContent + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration