NOTE 15 - SEGMENT INFORMATION AND GEOGRAPHIC DATA

Our business activities are organized into two reportable segments – Telematics Systems and Software & Subscription Services. 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, but are not limited to, customer base, homogeneity of products and technology.

The Telematics Systems segment offers a portfolio of wireless data communications products that 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.

The Software & Subscription Services segment offers cloud-based, application enablement and telematics service platforms that facilitate integration of our own applications, as well as those of third parties, through open Applications Programing Interfaces (“APIs”) to deliver full-featured 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.

Segment information for the three and six months ended August 31, 2018 and 2017 is as follows (in thousands):

	Three Months Ended August 31, 2018									Three Months Ended August 31, 2017
	Operating Segments									Operating Segments
	Telematics Systems		Software & Subscription Services		Corporate Expenses			Total		Telematics Systems		Software & Subscription Services		Corporate Expenses			Total
Revenues	$	77,100	$	18,937	$	—		$	96,037	$	74,070	$	15,697	$	—		$	89,767
Adjusted EBITDA	$	11,682	$	3,373	$	(1,366	)	$	13,689	$	11,505	$	2,050	$	(1,254	)	$	12,301

	Six Months Ended August 31, 2018									Six Months Ended August 31, 2017
	Operating Segments									Operating Segments
	Telematics Systems		Software & Subscription Services		Corporate Expenses			Total		Telematics Systems		Software & Subscription Services		Corporate Expenses			Total

Revenues	$	153,452	$	37,473	$	—		$	190,925	$	146,066	$	31,782	$	—		$	177,848
Adjusted EBITDA	$	22,496	$	6,295	$	(2,925	)	$	25,866	$	24,325	$	3,271	$	(2,114	)	$	25,482

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 on earnings before interest, taxes, depreciation, amortization and certain other charges (“Adjusted EBITDA”) and we therefore consider Adjusted EBITDA to be a primary measure of operating performance of our operating segments. The adjustments to our net income (losses) prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) to calculate Adjusted EBITDA are itemized below (in thousands):

	Three Months Ended August 31,							Six Months Ended August 31,
		2018			2017			2018			2017
Net income (loss)		$	(854	)	$	12,232		$	7,657		$	9,579
Investment income			(1,007	)		(396	)		(1,860	)		(729	)
Interest expense			3,767			2,567			6,432			5,085
Income tax provision			(497	)		3,699			1,274			2,619
Depreciation			2,298			1,958			4,341			3,983
Amortization of intangible assets			2,893			3,710			5,641			7,568
Stock-based compensation			2,680			2,227			5,147			4,044
Loss on extinguishment of debt			2,033			—			2,033			—
Equity in net loss of affiliate			530			376			969			713
Restructuring charges			566			—			3,949			—
Legal expenses for LoJack battery performance issue			564			430			2,250			927
Litigation provision			459			411			887			6,486
Gain on LoJack battery performance legal Settlement			—			(15,032	)		(13,333	)		(15,032	)
Other			257			119			479			239
Adjusted EBITDA		$	13,689		$	12,301		$	25,866		$	25,482

It is not practicable for us to report identifiable assets by segment because these business units 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				Six Months Ended
	August 31,				August 31,
	2018		2017		2018		2017
United States	$	70,647	$	65,879	$	141,064	$	129,744
Europe, Middle East and Africa		13,788		11,374		27,132		22,536
South America		1,723		1,986		4,129		5,779
Canada		2,338		4,202		3,702		7,561
Asia and Pacific Rim		3,480		3,320		7,239		6,120
All other		4,061		3,006		7,659		6,108
	$	96,037	$	89,767	$	190,925	$	177,848

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 and six months ended August 31, 2018 and 2017.