Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.21.2
Segment Information
9 Months Ended
Oct. 31, 2021
Segment Information  
Segment Information

(18) 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, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker (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 three segments: Skillsoft, SumTotal and GK. 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 net revenue transactions 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. 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 SumTotal business provides a unified, comprehensive and configurable solution that allows organizations to attract, develop and retain the talent. SumTotal’s solution impacts a company’s workforce throughout the entire employee lifecycle and helps companies succeed in an evolving business climate. SumTotal’s primary solutions are Talent Acquisition, Learning Management, Talent Management and Workforce Management.

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 subscription and transactional basis.

The following table presents summary results for each of the businesses for the three months ended October 31, 2021 (Successor), the period from August 28, 2020 to October 31, 2020 (Predecessor (SLH)), and the period from August 1, 2020 to August 27, 2020 (Predecessor (PL)), (in thousands):

Quarter-to Date Results

Fiscal 2022

Fiscal 2021

Successor

Predecessor (SLH)

Predecessor (PL)

Three Months

From

From

Ended

August 28, 2020

August 1, 2020

    

October 31, 2021

to October 31, 2020

  

to August 27, 2020

Skillsoft

 

  

  

  

Revenues

 

$

85,456

$

23,495

$

27,832

Operating expenses

 

90,814

60,969

20,626

Operating (loss) income

 

(5,358)

(37,474)

7,206

SumTotal

 

  

  

  

Revenues

 

31,897

13,478

10,855

Operating expenses

 

26,095

18,295

8,942

Operating income (loss)

 

5,802

(4,817)

1,913

Global Knowledge

 

  

  

  

Revenues

 

53,206

Operating expenses

 

58,005

Operating loss

 

(4,799)

Consolidated

 

  

  

  

Revenues

 

170,559

36,973

38,687

Operating expenses

 

174,914

79,264

29,568

Operating (loss) income

 

(4,355)

(42,291)

9,119

Total non-operating (expense) income

 

(37,431)

3,626

(520)

Interest expense, net

 

(7,510)

(7,919)

(1,287)

Reorganization items, net

 

3,339,837

Benefits from (provision for) income taxes

 

6,441

7,870

(78,254)

Net (loss) income

 

$

(42,855)

$

(38,714)

$

3,268,895

The following table presents summary results for each of the businesses for the period from June 12, 2021 to October 31, 2021 (Successor), February 1, 2021 to June 11, 2021 (Predecessor (SLH)), August 28, 2020 to October 31, 2020 (Predecessor (SLH)), and February 1, 2020 to August 27, 2020 (Predecessor (PL)), (in thousands):

Year-to Date Results

Fiscal 2022

Fiscal 2021

Successor

Predecessor (SLH)

Predecessor (SLH)

Predecessor (PL)

From

From

From

From

June 12, 2021 to

February 1, 2021

August 28, 2020

February 1, 2020

    

October 31, 2021

to June 11, 2021

  

to October 31, 2020

  

to August 27, 2020

Skillsoft

 

  

  

  

  

Revenues

 

$

131,067

$

101,434

$

23,495

$

196,238

Operating expenses

 

151,202

137,882

60,969

398,178

Operating loss

 

(20,135)

(36,448)

(37,474)

(201,940)

SumTotal

 

  

  

  

  

Revenues

 

48,045

38,202

13,478

77,613

Operating expenses

 

40,978

38,377

18,295

205,483

Operating income (loss)

 

7,067

(175)

(4,817)

(127,870)

Global Knowledge

 

  

  

  

  

Revenues

 

82,460

Operating expenses

 

90,260

Operating loss

 

(7,800)

Consolidated

 

  

  

  

  

Revenues

 

261,572

139,636

36,973

273,851

Operating expenses

 

282,440

176,259

79,264

603,661

Operating loss

 

(20,868)

(36,623)

(42,291)

(329,810)

Total non-operating (expense) income

 

(21,001)

471

3,626

1,373

Interest expense, net

 

(17,366)

(16,820)

(7,919)

(168,341)

Reorganization items, net

 

3,329,245

Benefits from (provision for) income taxes

 

4,527

3,708

7,870

(68,455)

Net (loss) income

 

$

(54,708)

$

(49,264)

$

(38,714)

$

2,764,012

SumTotal segment revenue for the three months ended October 31, 2021 and for the period from June 12, 2021 to October 31, 2021 includes content-related revenue of $1.5 million and $2.1 million, respectively, attributable to cross selling for customers that use the SumTotal platform to consume Skillsoft content.

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 October 31, 2021 and January 31, 2021 (in thousands):

Successor

Predecessor (SLH)

    

October 31, 2021

  

  

January 31, 2021

Skillsoft

$

1,511,578

$

1,398,379

SumTotal

214,625

 

147,358

Global Knowledge

362,456

Corporate

Consolidated

$

2,088,659

$

1,545,737

The following table sets forth the Company’s long-lived tangible assets by geographic region as of October 31, 2021 and January 31, 2021 (in thousands):

Successor

Predecessor (SLH)

    

October 31, 2021

  

  

January 31, 2021

United States

$

13,956

$

10,613

Ireland

338

 

609

Rest of world

2,959

2,558

Total

$

17,253

$

13,780