Note 23 - Segment Information

12 Months Ended

Jan. 31, 2023

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

(23) Segment Information

ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company’s CODM evaluates results using the operating segment structure as the primary basis for which the allocation of resources and financial results are assessed.

The Company has organized its business into two segments: Skillsoft content and Global Knowledge. All of the Company’s businesses market and sell their offerings globally to businesses of many sizes, government agencies, educational institutions and resellers with a worldwide sales force positioned to offer the combinations that best meet customer needs. The CODM primarily uses revenues and operating income as measures used to evaluate financial results and allocation of resources. The Company allocates certain operating expenses to the reportable segments, including general and administrative costs based on the usage and relative contribution provided to the segments. There are no intercompany revenue transactions reported between the Company’s reportable segments.

The Skillsoft business engages in the sale, marketing and delivery of its content learning solutions, in areas such as Leadership and Business, Technology and Developer and Compliance. This includes technical skill areas assumed in the Codecademy acquisition. In addition, Skillsoft offers Percipio, an intelligent online learning experience platform that delivers an immersive learning experience. It leverages its highly engaging content, curated into nearly 700 learning paths (channels) that are continuously updated to ensure customers always have access to the latest information.

The Global Knowledge business offers training solutions covering information technology and business skills for corporations and their employees. Global Knowledge guides its customers throughout their lifelong technology learning journey by offering relevant and up-to-date skills training through instructor-led (in-person “classroom” or online “virtual”) and self-paced (“on-demand”), vendor certified, and other proprietary offerings. Global Knowledge offers a wide breadth of training topics and delivery modalities (classroom, virtual, on-demand) both on a transactional and subscription basis.

The following table presents summary results for each of the fiscal year ended January 31, 2023 (Successor), the period from June 12, 2021 through January 31, 2022 (Successor), the period from February 1, 2021 through June 11, 2021 (Predecessor (SLH)), the period from August 28, 2020 through January 31, 2021 (Predecessor (SLH)), and the period from February 1, 2020 through August 27, 2020 (Predecessor (PL)), (in thousands):

	Fiscal 2023			Fiscal 2022						Fiscal 2021
	Successor			Successor			Predecessor (SLH)			Predecessor (SLH)			Predecessor (PL)
	From			From			From			From			From
	February 1, 2022 to			June 12, 2021 to			February 1, 2021			August 28, 2020			February 1, 2020
	January 31, 2023			January 31, 2022			to June 11, 2021			January 31, 2021			to August 27, 2020
Skillsoft
Revenues	$	384,378		$	219,257		$	102,494		$	73,250		$	197,672
Operating expenses		1,101,218			257,967			140,484			161,190			401,498
Operating income (loss)		(716,840	)		(38,710	)		(37,990	)		(87,940	)		(203,826	)
Global Knowledge
Revenues		170,746			132,586			—			—			—
Operating expenses		258,025			149,372			—			—			—
Operating income (loss)		(87,279	)		(16,786	)		—			—			—
Consolidated
Revenues		555,124			351,843			102,494			73,250			197,672
Operating expenses		1,359,243			407,339			140,484			161,190			401,498
Operating income (loss)		(804,119	)		(55,496	)		(37,990	)		(87,940	)		(203,826	)
Total non-operating income		4,969			(1,881	)		(167	)		662			1,397
Interest expense, net		(53,493	)		(23,114	)		(16,703	)		(19,853	)		(168,171	)
Fair value adjustment of warrants		23,158			17,441			900			2,900			—
Fair value adjustment of hedge		(1,554	)		—			—			—			—
Reorganization items, net		—			—			—			—			3,361,251
Benefits from (provision for) income
taxes		40,973			4,304			3,521			14,477			(60,693	)
Net income (loss) from continuing operations		(790,066	)		(58,746	)		(50,439	)		(89,754	)		2,929,958
Gain on sale of business		56,619			—			—			—			—
Income (loss) from discontinued operations		8,483			11,940			1,175			(3,968	)		(165,946	)
Net income (loss)	$	(724,964	)	$	(46,806	)	$	(49,264	)	$	(93,722	)	$	2,764,012

Skillsoft segment depreciation for the fiscal year ended January 31, 2023 (Successor), the period from June 12, 2021 through January 31, 2022 (Successor), the period from February 1, 2021 through June 11, 2021 (Predecessor (SLH)), the period from August 28, 2020 through January 31, 2021 (Predecessor (SLH)), and the period from February 1, 2020 through August 27, 2020 (Predecessor (PL)) and the period from February 1, 2020 through August 27, 2020 (Predecessor (PL)), was $3.0 million, $1.8 million, $1.8 million, $2.0 million, and $2.7 million, respectively.

Global Knowledge segment depreciation for the fiscal year ended January 31, 2023 (Successor) and the period from June 12, 2021 through January 31, 2022 (Successor) was $1.8 million and $2.0 million, respectively.

The Company’s segment assets primarily consist of cash and cash equivalents, accounts receivable, prepaid expenses, deferred taxes, property and equipment, goodwill and intangible assets. The following table sets forth the Company’s segment assets as of  January 31, 2023 and January 31, 2022 (in thousands):

	Successor		Successor
	January 31, 2023		January 31, 2022
Skillsoft	$	1,434,920	$	1,648,160
Global Knowledge		207,767		344,902
Assets classified as held for sale		—		228,886
Total assets	$	1,642,687	$	2,221,948

The following table sets forth the Company’s long-lived tangible assets by geographic region as of January 31, 2023 and  January 31, 2022 (in thousands):

	Successor		Successor
	January 31, 2023		January 31, 2022
United States	$	7,117	$	9,482
Rest of world		3,033		1,993
Total long-lived tangible assets	$	10,150	$	11,475