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GOODWILL AND OTHER INTANGIBLE ASSETS
12 Months Ended
Feb. 28, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 8 – GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in goodwill are as follows (in thousands):

 

 

Software & Subscription Services

 

 

Telematics
Products

 

 

Total

 

Balance as of February 28, 2022

$

55,256

 

 

$

39,180

 

 

$

94,436

 

Re-allocation

 

22,991

 

 

 

(22,991

)

 

$

-

 

Effect of exchange rate change on goodwill

 

(222

)

 

 

-

 

 

 

(222

)

Balance as of February 28, 2023

$

78,025

 

 

$

16,189

 

 

$

94,214

 

 

As further described in Note 1, Description of Business and Summary of Significant Accounting Policies, we began entering into subscription arrangements with customers who historically purchased MRM telematics products from us, which has resulted in growth in Software & Subscription Services revenues and a corresponding decline in Telematics Products revenues as we have transitioned most of the MRM telematics business to long-term subscription contracts. This transition was substantially completed in the fourth quarter of Fiscal 2023. As a result of this customer transition between reporting units, in the fourth quarter of Fiscal 2023, a portion of the goodwill previously associated with our Telematics Products reporting unit was re-allocated amongst the reporting units impacted by this customer transition.

Other intangible assets are comprised as follows (in thousands, except years):

 

 

 

Gross (2)

 

Accumulated Amortization (2)

 

Net

 

 

Useful
Life

Feb. 28,
2022

 

Additions &
Adjustments,
net (1)

 

Feb. 28,
2023

 

Feb. 28,
2022

 

Amortization Expense

 

Feb. 28,
2023

 

Feb. 28,
2022

 

Feb. 28,
2023

 

Developed technology

4-6 years

$

26,958

 

 

(63

)

$

26,895

 

$

25,470

 

 

1,265

 

$

26,735

 

$

1,488

 

$

160

 

Tradenames

10 years

 

30,192

 

 

(146

)

 

30,046

 

 

20,571

 

 

2,133

 

 

22,704

 

 

9,621

 

 

7,342

 

Customer relationships

10-15 years

 

35,404

 

 

209

 

 

35,613

 

 

14,883

 

 

1,930

 

 

16,813

 

 

20,521

 

 

18,800

 

Patents

5 years

 

589

 

 

-

 

 

589

 

 

254

 

 

4

 

 

258

 

 

335

 

 

331

 

 

 

$

93,143

 

$

0

 

$

93,143

 

$

61,178

 

$

5,332

 

$

66,510

 

$

31,965

 

$

26,633

 

 

(1) Amounts also include any net changes in intangible asset balances for the periods presented that resulted from foreign currency translation.

(2) This table excludes the gross value of fully amortized intangible assets totaling $38.9 million and $23.0 million at February 28, 2023 and February 28, 2022, respectively.

Intangible assets with finite lives are amortized on a straight-line basis over the expected period to be benefited by future cash flows. We monitor and assess these assets for impairment on a periodic basis. Our assessment includes various new product lines and services, which leverage the existing intangible assets as well as consideration of historical and projected revenues and cash flows. In Fiscal 2021, we determined that the prolonged secular decline in legacy LoJack US SVR products revenue coupled with the slower than anticipated market penetration of our telematics solutions in the U.S. automotive dealership channel represented determinate indications of impairment. As a result, we performed an assessment of the carrying amount of the related intangible assets supporting these products including the LoJack tradename and dealer and customer relationships. Our assessment of the future cash flows generated by these assets concluded that an impairment loss was present. For the fiscal year ended February 28, 2021, we recorded an impairment loss aggregating $1.5 million, which was attributable to $1.0 million of US Dealer relationships and $0.5 million of developed technology. These impairment losses are included within net loss from discontinued operations for fiscal years ended February 28, 2021.

Amortization expense of intangible assets from continuing operations was $5.3 million, $5.4 million and $4.8 million in fiscal years ended February 28, 2023, 2022 and 2021, respectively.

Estimated future amortization expense as of February 28, 2023 is as follows (in thousands):

 

2024

$

4,527

 

2025

 

4,412

 

2026

 

4,133

 

2027

 

2,513

 

2028

 

2,266

 

Thereafter

 

8,782

 

 

$

26,633