Net PP&E Down? Explanation?

If Net PPE (i.e., PPE less accumulated depreciation) is down it could just mean that the firm is not replacing old assets that are are depreciating. That is, total PPE is stagnant and accumulated depreciation grows. Eventually the company will need to ramp up capex to replace these assets and this will be a very large chunky cash expenditure. If gross PPE (PPE before accumulated depreciation) is down it is more likely the firm has sold assets.

I have run across this a couple of times in my brief financial modeling career. I have hypothesized that it would be attributable to positive synergies while keeping production costs and selling & admin expenses at the same proportion of new sales.

For most modeling purposes, it just simply means that the capitalized capital expenditures didn't match the depreciation. If you wanted to go further into the accounting, you can check if they're just not capitalizing capex (turning their expenditures into assets) and are planning to depreciate the expenses over a period of time.

The other option was is to just simply expense out their capital expenditures on the income statement, might be useful to check the statement of cash flows or income statement to see if this is the case.