SEGMENT INFORMATION AND GEOGRAPHIC DATA

3 Months Ended

May 31, 2023

Segment Reporting [Abstract]

SEGMENT INFORMATION AND GEOGRAPHIC DATA

NOTE 12 - SEGMENT INFORMATION AND GEOGRAPHIC DATA

We operate under two reportable segments: Software & Subscription Services and Telematics Products. Our organizational structure is based on a number of factors that our CEO, the Chief Operating Decision Maker (“CODM”), uses to evaluate and operate the business, which include customer base, homogeneity of products, and technology.

Our Software & Subscription Services segment offers telematics devices bundled with cloud-based, application enablement and telematics service platforms that facilitate integration of our own applications, as well as those of third parties, through open Application Programing Interfaces (“APIs”) to deliver full-featured Internet of Things (“IoT”) solutions to a wide range of customers and markets. Our scalable proprietary SaaS offerings enable rapid and cost-effective deployment of high-value solutions for customers all around the globe. Software & Subscription Services segment revenues include SaaS, professional services, devices sold with monitoring services and amortization of revenues and costs for customized devices functional only with application subscriptions that are not sold separately.

Our Telematics Products segment offers a portfolio of wireless data communications products, which includes asset tracking units, mobile telematics devices, fixed and mobile wireless gateways and routers. These wireless networking devices underpin a wide range of our own and third party software and service solutions worldwide and are critical for applications demanding secure, reliable and business-critical communications. Telematics Products segment revenues consist primarily of distinct product sales.

Segment information is as follows (in thousands):

	Three Months Ended May 31, 2023												Three Months Ended May 31, 2022
	Reportable Segments												Reportable Segments
	Software & Subscription Services			Telematics Products			Corporate Expenses			Total			Software & Subscription Services			Telematics Products			Corporate Expenses			Total
Revenues	$	44,952		$	25,939					$	70,891		$	39,557		$	25,169					$	64,726
Gross profit	$	20,072		$	6,989					$	27,061		$	18,058		$	7,589					$	25,647
Gross margin		45	%		27	%					38	%		46	%		30	%					40	%
Adjusted EBITDA	$	6,314		$	314		$	(583	)	$	6,045		$	3,955		$	(747	)	$	(1,352	)	$	1,856

The amount shown for each period in the “Corporate Expenses” column above consists of expenses that are not allocated to the business segments. These non-allocated corporate expenses include salaries and benefits of certain corporate staff and expenses such as audit fees, investor relations, stock listing fees, director and officer liability insurance, and director fees and expenses.

Our CODM evaluates each segment based primarily on revenue and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), and we therefore consider Adjusted EBITDA to be a primary measure of operating performance of our reportable segments. We define Adjusted EBITDA as earnings before investment income, interest expense, taxes, depreciation, amortization, stock-based compensation, impairment loss and other adjustments as identified below. The adjustments to our net income (losses) prepared in accordance with GAAP to calculate Adjusted EBITDA are itemized below (in thousands):

	Three Months Ended May 31,
	2023			2022
Net loss	$	(4,032	)	$	(12,173	)
Investment income		(207	)		114
Interest expense		1,678			1,533
Income tax provision		52			249
Depreciation		4,328			4,156
Amortization of intangible assets		1,222			1,342
Stock-based compensation		2,178			2,960
Non-recurring legal expenses		175			3,131
Costs incurred in transition of LoJack North America business to acquiror		36			752
Other		615			(208	)
Adjusted EBITDA	$	6,045		$	1,856

Our CODM does not obtain identifiable assets by segment because our businesses share resources, functions and facilities. We do not have significant long-lived assets outside the United States.

Revenues by geographic area are as follows (in thousands):

	Three Months Ended
	May 31,
	2023		2022
United States	$	39,402	$	40,402
EMEA		17,003		12,539
LATAM		7,098		5,977
APAC		6,156		5,219
All other		1,232		589
	$	70,891	$	64,726

Revenues by geographic area are based upon the country of billing. The geographic location of distributors and OEM customers may be different from the geographic location of the ultimate end users of the products and services provided by us. No single non-U.S. country accounted for more than 10% of our revenue in the three months ended May 31, 2023 and 2022.