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Goodwill and Other Intangible Assets | 12 Months Ended
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Apr. 27, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | Note 7. Goodwill and Other Intangible Assets Goodwill A summary of the changes in goodwill by reportable segment is as follows:
(in millions) |  | Automotive |  |  | Industrial |  |  | Total |
Balance as of May 1, 2021 |  | $ | 106.7 |  |  | $ | 128.9 |  |  | $ | 235.6 |
Foreign currency translation |  |  | (0.8 | ) |  |  | (1.8 | ) |  |  | (2.6 | )
Balance as of April 30, 2022 |  |  | 105.9 |  |  |  | 127.1 |  |  |  | 233.0 |
Acquisition (Note 3) |  |  | — |  |  |  | 69.6 |  |  |  | 69.6 |
Foreign currency translation |  |  | 0.3 |  |  |  | (1.0 | ) |  |  | (0.7 | )
Balance as of April 29, 2023 |  |  | 106.2 |  |  |  | 195.7 |  |  |  | 301.9 |
Purchase accounting adjustments (Note 3) |  |  | — |  |  |  | (24.3 | ) |  |  | (24.3 | )
Impairment |  |  | (105.9 | ) |  |  | — |  |  |  | (105.9 | )
Foreign currency translation |  |  | (0.3 | ) |  |  | (1.5 | ) |  |  | (1.8 | )
Balance as of April 27, 2024 |  | $ | — |  |  | $ | 169.9 |  |  | $ | 169.9 |
A summary of goodwill by reporting unit is as follows:
(in millions) |  | April 27, 2024 |  |  | April 29, 2023 |
Grakon Industrial |  | $ | 124.4 |  |  | $ | 124.5 |
North American Automotive |  |  | — |  |  |  | 99.8 |
Nordic Lights |  |  | 43.9 |  |  |  | 69.6 |
European Automotive |  |  | — |  |  |  | 6.4 |
Other |  |  | 1.6 |  |  |  | 1.6 |
Total |  | $ | 169.9 |  |  | $ | 301.9 |
October 28, 2023 interim goodwill impairment assessment During the three months ended October 28, 2023, the Company identified an impairment triggering event associated with a sustained decrease in the Company’s publicly quoted share price, market capitalization and lower than expected operating results. These factors suggested that the fair value of one or more of the Company’s reporting units may have fallen below their carrying amounts, and accordingly the Company performed a quantitative assessment. The reporting units that were quantitatively assessed were North American Automotive (“NAA”) and European Automotive (“EA”). For the quantitative assessment, the Company engaged a third-party valuation specialist to assist management. The fair value of the NAA and EA reporting units were estimated using a combination of the income approach and market approach, weighted accordingly for specific circumstances of the reporting unit. The income approach uses a discounted cash flow method and the market approach uses appropriate valuation multiples observed for the reporting unit’s guidelines public companies. The determination of discounted cash flows are based on management’s estimates of revenue growth rates and earnings before interest, taxes, depreciation and amortization (“EBITDA”) margin, taking into consideration business and market conditions for the countries and markets in which the reporting unit operates. The Company calculates the discount rate based on a market-participant, risk-adjusted weighted average cost of capital, which considers industry specific rates of return on debt and equity capital for a target industry capital structure, adjusted for risks associated with business size, geography and other factors specific to the reporting unit. Long-range forecasting involves uncertainty which increases with each successive period. Revenue growth rates and EBITDA margin, especially in the outer years, involve a greater degree of uncertainty. Further, a change in the discount rate, as a result of a change in economic conditions or otherwise, could result in the carrying values of the reporting units exceeding their respective fair values. Based upon the results of the quantitative impairment test, the Company determined the carrying value of the NAA and EA reporting units each exceeded their fair value at October 28, 2023. As a result, the Company recognized a non-cash goodwill impairment charge of $56.5 million ($50.4 million for NAA and $6.1 million for EA) in the three months ended October 28, 2023, which was determined as the excess carrying value over fair value of the respective reporting unit up to the carrying value of the goodwill immediately prior to the impairment. January 28, 2024 annual goodwill impairment assessment At the beginning of the fourth quarter of fiscal 2024, the annual goodwill impairment assessment was completed. The Company performed a quantitative assessment for all of its reporting units with remaining goodwill. The Company engaged a third-party valuation specialist to assist management in performing the annual goodwill impairment assessments. The fair value of the reporting units were estimated using a combination of the income approach and market approach, weighted accordingly for the specific circumstances of the reporting unit. Based upon the results of the quantitative impairment test, the Company determined that the fair value exceeded its carrying value for all of its reporting units. However, the fair value of the NAA and Nordic Lights reporting units exceeded its carrying value by less than 10%. For the Nordic Lights reporting unit, if all other assumptions are held constant, a hypothetical increase of more than 50 basis points in the discount rate could have resulted in a partial goodwill impairment. April 27, 2024 goodwill impairment assessment In March and April 2024, subsequent to the annual goodwill impairment assessment, there was a further decline in the Company’s publicly quoted share price and market capitalization. In addition, operating results for NAA were lower than expected and future cash flow projections were lowered. As a result, the Company determined that a triggering event occurred requiring another quantitative impairment test for NAA as of April 27, 2024. Based upon the results of the quantitative impairment test, the Company determined the carrying value of the NAA reporting unit exceeded its fair value at April 27, 2024. As a result, the Company recognized a non-cash goodwill impairment charge of $49.4 million in the three months ended April 27, 2024, which was determined as the excess carrying value over fair value of the NAA reporting unit up to the carrying value of the goodwill immediately prior to the impairment. As of April 27, 2024, the NAA reporting unit has no remaining goodwill. Other intangible assets, net Details of identifiable intangible assets are shown below:
|  | As of April 27, 2024 |
(in millions) |  | Gross |  |  | Accumulated amortization |  |  | Net |  |  | Weighted average remaining useful life (years) |
Amortized intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships and agreements |  | $ | 306.6 |  |  | $ | (84.7 | ) |  | $ | 221.9 |  |  |  | 14.8 |
Trade names, patents and technology licenses |  |  | 75.3 |  |  |  | (42.3 | ) |  |  | 33.0 |  |  |  | 6.9 |
Total amortized intangible assets |  |  | 381.9 |  |  |  | (127.0 | ) |  |  | 254.9 |  |  |  |
Unamortized trade name |  |  | 1.8 |  |  |  | — |  |  |  | 1.8 |  |  |  |
Total other intangible assets |  | $ | 383.7 |  |  | $ | (127.0 | ) |  | $ | 256.7 |  |  |  |
|  | As of April 29, 2023 |
(in millions) |  | Gross |  |  | Accumulated amortization |  |  | Net |  |  | Weighted average remaining useful life (years) |
Amortized intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships and agreements |  | $ | 286.7 |  |  | $ | (68.2 | ) |  | $ | 218.5 |  |  |  | 14.8 |
Trade names, patents and technology licenses |  |  | 71.6 |  |  |  | (35.2 | ) |  |  | 36.4 |  |  |  | 6.0 |
Total amortized intangible assets |  |  | 358.3 |  |  |  | (103.4 | ) |  |  | 254.9 |  |  |  |
Unamortized trade name |  |  | 1.8 |  |  |  | — |  |  |  | 1.8 |  |  |  |
Total other intangible assets |  | $ | 360.1 |  |  | $ | (103.4 | ) |  | $ | 256.7 |  |  |  |
The Company performed an impairment test for its indefinite-lived trade name intangible asset and determined that no impairment existed as of April 27, 2024. Based on the current amount of intangible assets subject to amortization, the estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter is as follows:
(in millions) |  |  |
Fiscal Year: |  |  |
2025 |  | $ | 23.4 |
2026 |  |  | 22.5 |
2027 |  |  | 21.9 |
2028 |  |  | 19.6 |
2029 |  |  | 18.3 |
Thereafter |  |  | 149.2 |
Total |  | $ | 254.9 |

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- 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
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