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GOODWILL AND OTHER INTANGIBLE ASSETS
12 Months Ended
Feb. 28, 2022
Goodwill And Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 9 – GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in goodwill are as follows (in thousands):

 

 

Software & Subscription Services

 

 

Telematics

Products

 

 

Total

 

Balance as of February 28, 2021

$

55,437

 

 

$

39,180

 

 

$

94,617

 

Effect of exchange rate change on goodwill

 

(181

)

 

 

-

 

 

 

(181

)

Balance as of February 28, 2022

$

55,256

 

 

$

39,180

 

 

$

94,436

 

 

 

 

As further described in Note 1 Description of Business and Summary of Significant Accounting Policies, we have begun entering into subscription arrangements with customers who have historically purchased MRM telematics products from us, which is expected to result in growth in Software & Subscription Services revenues and a corresponding decline in Telematics Products revenues as we transition the MRM telematics business to long-term subscription contracts. This transition is expected to be completed over the course of Fiscal 2023. As a result of this strategic shift, we anticipate that the goodwill presently associated with our Telematics Products reporting unit will be re-allocated to our other reporting units in Fiscal 2023 at such time that this customer transition is substantially complete.

 

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

 

 

 

 

 

Gross (2)

 

 

Accumulated Amortization (2)

 

 

Net

 

 

 

Useful

Life

 

Feb. 28,

2021

 

 

Additions &

Adjustments,

net (1)

 

 

Feb. 28,

2022

 

 

Feb. 28,

2021

 

 

Amortization Expense

 

 

Feb. 28,

2022

 

 

Feb. 28,

2021

 

 

Feb. 28,

2022

 

Developed technology

 

4-6 years

 

$

26,994

 

 

 

(36

)

 

$

26,958

 

 

$

24,057

 

 

 

1,413

 

 

$

25,470

 

 

$

2,937

 

 

$

1,488

 

Tradenames

 

10 years

 

 

30,257

 

 

 

(65

)

 

 

30,192

 

 

 

18,428

 

 

 

2,143

 

 

 

20,571

 

 

 

11,829

 

 

 

9,621

 

Customer relationships

 

10-15 years

 

 

35,270

 

 

 

134

 

 

 

35,404

 

 

 

12,902

 

 

 

1,981

 

 

 

14,883

 

 

 

22,368

 

 

 

20,521

 

Patents

 

5 years

 

 

589

 

 

 

-

 

 

 

589

 

 

 

235

 

 

 

19

 

 

 

254

 

 

 

354

 

 

 

335

 

 

 

 

 

$

93,110

 

 

$

33

 

 

$

93,143

 

 

$

55,622

 

 

$

5,556

 

 

$

61,178

 

 

$

37,488

 

 

$

31,965

 

 

 

(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 $23.0 million at February 28, 2022 and February 28, 2021.

 

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 both fiscal 2021 and 2020, 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. For the fiscal year ended February 29, 2020, we recorded an impairment loss aggregating $17.7 million, which was attributable to $11.5 million of the LoJack Tradename and $6.2 million of US Dealer relationships. Approximately, $1.5 million and $12.0 million of these impairment losses are included within net loss from discontinued operations for fiscal years ended February 28/29, 2021 and 2020, respectively.

 

Amortization expense of intangible assets from continuing operations was $5.4 million, $4.8 million and $5.9 million in fiscal years ended February 28/29, 2022, 2021 and 2020, respectively.

 

Estimated future amortization expense as of February 28, 2022 is as follows (in thousands):

 

2023

 

$

5,416

 

2024

 

 

4,572

 

2025

 

 

4,457

 

2026

 

 

4,147

 

2027

 

 

2,526

 

Thereafter

 

 

10,847

 

 

 

$

31,965