10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to          

COMMISSION FILE NUMBER: 0-12182

CALAMP CORP.

(Exact name of Registrant as specified in its Charter)

Delaware	95-3647070
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
15635 Alton Parkway, Suite 250
Irvine, California	92618
(Address of principal executive offices)	(Zip Code)

(949) 600-5600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of Each Exchange On Which Registered
Common stock, $0.01 per share	CAMP	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No ☒

The number of shares outstanding of the registrant’s common stock as of September 22, 2020 was 35,019,923.

CALAMP CORP.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED AUGUST 31, 2020

TABLE OF CONTENTS

		Page Number
	PART I – FINANCIAL INFORMATION
ITEM 1.	Financial statements	3
	Condensed consolidated balance sheets (unaudited) as of August 31, 2020 and February 29, 2020	3
	Condensed consolidated statements of comprehensive loss (unaudited) for the three and six months ended August 31, 2020 and 2019	4
	Condensed consolidated statements of cash flows (unaudited) for the six months ended August 31, 2020 and 2019	5
	Condensed consolidated statements of stockholders’ equity (unaudited) for the three and six months ended August 31, 2020 and 2019	6
	Notes to unaudited condensed consolidated financial statements	7
ITEM 2.	Management’s discussion and analysis of financial condition and results of operations	24
ITEM 3.	Quantitative and qualitative disclosures about market risk	33
ITEM 4.	Controls and procedures	33
PART II – OTHER INFORMATION
ITEM 1.	Legal proceedings	34
ITEM 1A.	Risk factors	34
ITEM 2.	Unregistered sales of securities and use of proceeds	35
ITEM 6.	Exhibits	36

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CALAMP CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

(Unaudited)

	August 31,			February 29,
Assets	2020			2020
Current assets:
Cash and cash equivalents	$	107,145		$	107,404
Accounts receivable, net		68,387			72,273
Inventories		31,495			36,778
Prepaid expenses and other current assets		24,274			21,411
Total current assets		231,301			237,866
Property and equipment, net		53,640			55,878
Operating lease right-of-use assets		23,428			20,626
Deferred income tax assets		4,565			4,437
Goodwill		102,162			106,335
Other intangible assets, net		41,404			45,895
Other assets		25,032			24,768
	$	481,532		$	495,805
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	5,184		$	33,119
Accounts payable		31,214			28,450
Accrued payroll and employee benefits		10,599			9,049
Deferred revenue		35,001			34,704
Other current liabilities		21,019			16,153
Total current liabilities		103,017			121,475
Long-term debt, net of current portion		199,282			177,088
Operating lease liabilities		25,225			24,279
Other non-current liabilities		35,030			35,044
Total liabilities		362,554			357,886
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 3,000 shares authorized; no shares issued or outstanding		—			—
Common stock, $.01 par value; 80,000 shares authorized; 35,017 and 34,322 shares    issued and outstanding at August 31, 2020 and February 29, 2020, respectively		350			343
Additional paid-in capital		226,368			220,482
Accumulated deficit		(105,565	)		(81,531	)
Accumulated other comprehensive loss		(2,175	)		(1,375	)
Total stockholders' equity		118,978			137,919
	$	481,532		$	495,805

See accompanying notes to condensed consolidated financial statements.

3

CALAMP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Six Months Ended
	August 31,						August 31,
	2020			2019			2020			2019
Revenues:
Products	$	50,943		$	64,174		$	104,049		$	129,937
Application subscriptions and other services		32,594			29,062			59,703			52,369
Total revenues		83,537			93,236			163,752			182,306
Cost of revenues:
Products		36,792			38,283			72,788			78,089
Application subscriptions and other services		15,935			17,283			29,101			31,136
Total cost of revenues		52,727			55,566			101,889			109,225
Gross profit		30,810			37,670			61,863			73,081
Operating expenses:
Research and development		6,989			7,924			13,313			14,810
Selling and marketing		13,493			15,868			26,379			30,515
General and administrative		13,899			12,893			27,568			30,377
Intangible asset amortization		1,844			3,318			3,736			6,358
Restructuring		551			2,272			2,459			2,272
Impairment loss		286			—			4,575			—
Total operating expenses		37,062			42,275			78,030			84,332
Operating loss		(6,252	)		(4,605	)		(16,167	)		(11,251	)
Non-operating income (expense):
Investment income		680			1,256			698			3,337
Interest expense		(3,857	)		(5,555	)		(7,934	)		(11,011	)
Other income (expense)		217			193			9			(206	)
Total non-operating expense		(2,960	)		(4,106	)		(7,227	)		(7,880	)
Loss before income taxes and impairment loss in investment of affiliate		(9,212	)		(8,711	)		(23,394	)		(19,131	)
Income tax benefit (provision)		(266	)		1,342			(506	)		3,599
Loss before impairment loss in investment of affiliate		(9,478	)		(7,369	)		(23,900	)		(15,532	)
Impairment loss in investment of affiliate		—			—			—			(530	)
Net loss	$	(9,478	)	$	(7,369	)	$	(23,900	)	$	(16,062	)
Loss per share:
Basic	$	(0.28	)	$	(0.22	)	$	(0.70	)	$	(0.48	)
Diluted	$	(0.28	)	$	(0.22	)	$	(0.70	)	$	(0.48	)
Shares used in computing loss per share:
Basic		34,256			33,568			34,140			33,475
Diluted		34,256			33,568			34,140			33,475
Comprehensive income (loss):
Net loss	$	(9,478	)	$	(7,369	)	$	(23,900	)	$	(16,062	)
Other comprehensive income (loss):
Foreign currency translation adjustments		935			(1,018	)		(800	)		(1,287	)
Total comprehensive loss	$	(8,543	)	$	(8,387	)	$	(24,700	)	$	(17,349	)

See accompanying notes to condensed consolidated financial statements.

4

CALAMP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended
	August 31,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(23,900	)	$	(16,062	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation expense		9,983			9,036
Intangible asset amortization expense		3,736			6,358
Stock-based compensation expense		6,469			5,726
Amortization of discount and debt issuance costs		5,219			7,606
Impairment loss of goodwill and intangible assets		4,309			—
Impairment of operating lease right-of-use (ROU) assets and other long-lived assets		266			1,210
Noncash operating lease cost		2,588			3,100
Revenue assigned to factors		(3,349	)		(3,109	)
Deferred tax assets, net		(105	)		(3,437	)
Other		301			986
Changes in operating assets and liabilities:
Accounts receivable		3,723			5,763
Inventories		5,209			(11,429	)
Prepaid expenses and other assets		(3,204	)		(273	)
Accounts payable		1,929			(4,155	)
Accrued liabilities		6,779			(2,072	)
Deferred revenue		(2,378	)		2,012
Operating lease liabilities		(3,454	)		(1,640	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		14,121			(380	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of marketable securities		6,264			27,340
Purchases of marketable securities		(6,264	)		(17,617	)
Capital expenditures		(7,563	)		(10,720	)
Acquisitions, net of cash acquired		—			(60,634	)
Other		—			(527	)
NET CASH USED IN INVESTING ACTIVITIES		(7,563	)		(62,158	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Paycheck Protection Program Loan		10,000			—
Repayment of Paycheck Protection Program Loan		(10,000	)		—
Proceeds from revolving credit facility		20,000			—
Repayment of 2020 Convertible Notes		(27,599	)		—
Payments of issuance cost on the revolving credit facility		(56	)		—
Taxes paid related to net share settlement of vested equity awards		(1,485	)		(1,729	)
Proceeds from exercise of stock options and contributions to employee stock purchase plan		909			995
NET CASH USED IN FINANCING ACTIVITIES		(8,231	)		(734	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		1,414			456
Net change in cash and cash equivalents		(259	)		(62,816	)
Cash and cash equivalents at beginning of period		107,404			256,500
Cash and cash equivalents at end of period	$	107,145		$	193,684

See accompanying notes to condensed consolidated financial statements.

5

CALAMP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

	Three Months Ended						Six Months Ended
	August 31,						August 31,
	2020			2019			2020			2019
Total stockholders' equity, beginning balances	$	125,194		$	199,112		$	137,919		$	205,653
Common stock and additional paid-in capital:
Beginning balances		224,391			210,962			220,825			208,541
Stock-based compensation expense		2,846			3,183			6,469			5,726
Shares issued on net share settlement of equity awards		(1,405	)		(1,510	)		(1,485	)		(1,729	)
Exercise of stock options and contributions to ESPP		886			898			909			995
Ending balances		226,718			213,533			226,718			213,533
Accumulated deficit:
Beginning balances		(96,087	)		(10,920	)		(81,531	)		(2,227	)
Cumulative effect of adoption of ASC 326		—			—			(134	)		—
Net loss		(9,478	)		(7,369	)		(23,900	)		(16,062	)
Ending balances		(105,565	)		(18,289	)		(105,565	)		(18,289	)
Accumulated other comprehensive income:
Beginning balances		(3,110	)		(930	)		(1,375	)		(661	)
Foreign currency translation adjustment		935			(1,018	)		(800	)		(1,287	)
Ending balances		(2,175	)		(1,948	)		(2,175	)		(1,948	)
Total stockholders' equity, ending balances	$	118,978		$	193,296		$	118,978		$	193,296
See accompanying notes to condensed consolidated financial statements.

6

CALAMP CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED AUGUST 31, 2020 AND 2019

NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

CalAmp Corp. (referred to herein as “CalAmp”, “the Company”, “we”, “our”, or “us”) is a global technology solutions pioneer leading transformation to a mobile connected economy. We help reinvent businesses and improve lives around the globe with technology solutions that streamline complex mobile Internet of Things (“IoT”) deployments through wireless connectivity solutions and derived data intelligence. Our software applications, scalable cloud services, and intelligent devices collect and assess business-critical data anywhere in the world from industrial machines, commercial and passenger vehicles, their drivers and contents. We are a global organization that is headquartered in Irvine, California.

Historically, we had two reportable segments, Software & Subscription Services and Telematics Systems. During the first quarter of fiscal 2021, our President and Chief Executive Officer (the “CEO”), who is our current Chief Operating Decision Maker (“CODM”), realigned our operational structure into three reportable segments: Software & Subscriptions Services, Telematics Products and LoJack U.S. SVR Products. We have recast certain prior period amounts to conform to the way our CODM regularly reviews segment performance. 

In March 2020, the World Health Organization declared the spread of COVID-19 as a pandemic. The full impact of the COVID-19 outbreak remains uncertain as of the time of this report given the diversity of rules and regulations in the U.S. and other countries in which we operate. The pandemic has resulted in travel restrictions, prohibitions of non-essential activities, disruption and shutdown of businesses and greater uncertainty in global financial markets. During the three months ended August 31, 2020, there was an increase in the number of installations as U.S. auto dealerships and school districts reopened from government-imposed pandemic shutdowns, which resulted in a sequential increase in our revenue since first quarter of fiscal 2021. The effect of the outbreak may continue to impact our operating results depending on the severity of the pandemic and the actions taken or to be taken by governments and private businesses in relation to its containment. We cannot predict the extent to which the COVID-19 outbreak will negatively impact our business or operating results at this time.

We have considered all known and reasonably available information that existed as of August 31, 2020, in making accounting judgments, estimates and disclosures. We are monitoring the potential effects of the health care related and economic conditions of COVID-19 in assessing certain matters including (but not limited to) supply chain disruptions, decreases in customer demand for our products and services, potential longer-term effects on our customer and distribution channels particularly in the U.S. and relevant end markets as well as other developments. If the impact results in longer-term closures of businesses and economic recessionary conditions, we may recognize additional material asset impairments, charges for uncollectible accounts receivable in future periods and incur additional restructuring charges.

Certain notes and other information included in the audited financial statements in our Annual Report on Form 10-K for the fiscal year ended February 29, 2020 are condensed in or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with our 2020 Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission (“SEC”) on May 5, 2020.

In the opinion of our management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary to present fairly our financial position at August 31, 2020 and our results of operations for the three and six months ended August 31, 2020 and 2019. The results of operations for such periods are not necessarily indicative of results to be expected for the full fiscal year ending February 28, 2021.

All intercompany transactions and accounts have been eliminated in consolidation.

Revenue Recognition

We recognize revenue as follows:

Products. We recognize revenue from product and accessories sales upon transfer of control of promised products to customers in an amount that reflects the transaction price, which is generally the stand-alone selling prices of the promised goods. For product shipments made on the basis of “FOB Destination” terms, revenue is recorded when the products reach the customer. Customers generally do not have a right of return except for defective products returned during the warranty period. We record estimated commitments related to customer incentive programs as reductions of revenues.

Software-as-a-Service (“SaaS”). We recognize our SaaS revenues and related cost of revenues in our Application subscriptions and other service revenues and cost of revenues on SaaS arrangements that combine various hardware devices over a stipulated service period.

7

Our integrated SaaS-based solutions for our fleet management, vehicle finance (which we are exiting) and certain other verticals provide customers with the ability to wirelessly communicate with monitoring devices installed in vehicles and other mobile or remote assets through our software applications. The transaction price for a typical SaaS arrangement includes the price for the customized device, installation and application subscriptions. We have applied our judgment in determining that these integrated arrangements typically represent single performance obligations satisfied over time.

Accordingly, we defer the recognition of revenue for the customized devices that only function with our applications and are sold only on an integrated basis with our proprietary applicable subscriptions. Such customized devices and the application services are not sold separately. In such circumstances, the associated device related costs are recorded as deferred costs on the balance sheet. Generally, these service arrangements do not provide the customer with the right to take possession of the software supporting the subscription service at any time. Revenues from subscription services are recognized ratably on a straight-line basis over the term of the subscription. The deferred revenue and deferred cost amounts are amortized to application subscriptions and other services revenue and cost of revenues, respectively, on a straight-line basis over the estimated average in-service lives of these devices, which are three years in the vehicle finance and four to five years in the fleet management verticals. In certain fleet management contracts, we provide devices as part of the subscription contracts but we retain control of such devices. Under such arrangements, the cost of the devices is capitalized as property and equipment and depreciated over the estimated useful life of three to five years. The related subscription revenues of these arrangements are recognized as services are rendered. Our deferred revenue under ASC 606 also includes prepayments from our customers for various subscription services but does not include future subscription fees associated with customers’ unexercised contract renewal rights.

In certain customer arrangements, we sell devices and monitoring services separately to customers and sell similar devices on a stand-alone basis to licensees. Accordingly, we recognize revenues for the sales of the devices upon transfer of control to the customer and recognize revenue for the related monitoring services over the service period. The allocation of the transaction price is based on relative estimated stand-alone selling prices for the devices and the monitoring services.

Professional Services. We also provide various professional services to customers. These include project management, engineering services and installation services, which are typically distinct from other performance obligations and are recognized as the related services are performed. For certain professional service contracts, we recognize revenue over time based on the proportion of total costs incurred to-date over the estimated cost of the contract, which is an input method.

Sales taxes. We have elected to record revenue net of taxes collected from customers that are remitted to governmental authorities, with the collected taxes recorded within the caption Other current liabilities until remitted to the relevant government authority.

Contract Balances. Timing of revenue recognition may differ from the timing on our invoicing to customers. Contract liabilities are comprised of billings to or payments received from our customers in advance of performance under the contract. We refer to these contract liabilities as “Deferred Revenues” in the accompanying condensed consolidated financial statements. During fiscal quarter ended August 31, 2020, we recognized $23.8 million in revenue from the deferred revenue balance of $62.2 million as of February 29, 2020. Certain incremental costs of obtaining a contract with a customer consist of sales commissions, which are recognized on a straight-line basis over the life of the corresponding contracts. Prepaid commissions totaled $4.1 million as of August 31, 2020, of which $2.2 million was classified as non-current.

We disaggregate revenue from contracts with customers into reportable segments, geography, type of goods and services and timing of revenue recognition. See Note 15 for our revenue by segment and geography. The disaggregation of revenue by type of goods and services and by timing of revenue recognition, which reflect the immaterial corrections as discussed below, was as follows (in thousands):

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Revenue by type of goods and services:
Telematics devices and accessories	$	50,943	$	64,174	$	104,049	$	129,937
Rental income and other services		5,976		5,750		8,413		10,180
Recurring application subscriptions		26,618		23,312		51,290		42,189
Total	$	83,537	$	93,236	$	163,752	$	182,306

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Revenue by timing of revenue recognition:
Revenue recognized at a point in time	$	56,647	$	68,921	$	111,874	$	138,205
Revenue recognized over time		26,890		24,315		51,878		44,101
Total	$	83,537	$	93,236	$	163,752	$	182,306

8

Telematics devices and accessories presented in the table above include devices sold in customer arrangements that include both the device and monitoring services. Recurring application subscriptions revenues include the amortization for customized devices functional only with application subscriptions.

Remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue on our condensed consolidated balance sheets and unbilled amounts that will be recognized as revenue in future periods. As of August 31, 2020 and February 29, 2020, we have estimated remaining performance obligations for contractually committed revenues of $129.8 million and $134.5 million, respectively. As of August 31, 2020, we expect to recognize approximately 25% in fiscal 2021 and 39% in fiscal 2022. As of February 29, 2020, we expected to recognize approximately 44% in fiscal 2021 and 26% in fiscal 2022. We have utilized the practical expedient exception within ASC 606 and exclude contracts that have original durations of less than one year from the aforementioned remaining performance obligation disclosure.

Revision of Previously Issued Condensed Consolidated Financial Statements. Subsequent to the issuance of the consolidated financial statements for the year ended February 29, 2020, we concluded that the presentation of revenues and cost of revenues should be adjusted to present product and service revenues and the related cost of revenues for each separately in accordance with SEC Regulation S-X, Rule 5-03(b). Additionally, certain historical information in the notes to the condensed consolidated financial statements have been revised to reflect the impact of these corrections. We have determined that the correction of these classification errors is not material to the previously issued consolidated financial statements. The following table summarizes the impact of the immaterial adjustments.

	Three Months Ended August 31, 2019							Six Months Ended August 31, 2019
	As Reported		Adjustment			As Corrected		As Reported		Adjustment			As Corrected
Revenues:
Products	$	62,031	$	2,143		$	64,174	$	125,590	$	4,347		$	129,937
Application subscriptions and other services		31,205		(2,143	)		29,062		56,716		(4,347	)		52,369
Total revenues	$	93,236	$	-		$	93,236	$	182,306	$	-		$	182,306
Cost of revenues:
Products	$	37,721	$	562		$	38,283	$	76,269	$	1,820		$	78,089
Application subscriptions and other services		17,845		(562	)		17,283		32,956		(1,820	)		31,136
Total cost of revenues	$	55,566	$	-		$	55,566	$	109,225	$	-		$	109,225

	Three Months Ended August 31, 2019							Six Months Ended August 31, 2019
	As Reported		Adjustment			As Corrected		As Reported		Adjustment			As Corrected
Revenue by type of goods and services:
Telematics devices and accessories	$	65,891	$	(1,717	)	$	64,174	$	134,059	$	(4,122	)	$	129,937
Rental income and other services		2,036		3,714			5,750		3,983		6,197			10,180
Recurring application subscriptions		25,309		(1,997	)		23,312		44,264		(2,075	)		42,189
Total	$	93,236	$	-		$	93,236	$	182,306	$	-		$	182,306
Revenue by timing of revenue recognition:
Revenue recognized at a point in time	$	65,891	$	3,030		$	68,921	$	134,059	$	4,146		$	138,205
Revenue recognized over time		27,345		(3,030	)		24,315		48,247		(4,146	)		44,101
Total	$	93,236	$	-		$	93,236	$	182,306	$	-		$	182,306

Cash and Cash Equivalents

We consider all highly liquid investments with maturities at date of purchase of three months or less to be cash equivalents.

9

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable consists of amounts due to us from sales arrangements executed in our normal business activities and are recorded at invoiced amounts. Our payment terms generally range between 30 to 60 days and we do not offer financing options. We present the aggregate accounts receivable balance net of an allowance for doubtful accounts. Generally, collateral and other security is not obtained for outstanding accounts receivable. Credit losses, if any, are recognized based on management’s evaluation of historical collection experience, customer-specific financial conditions as well as an evaluation of current industry trends and general economic conditions. Past due balances are assessed by management on a periodic basis and balances are written off when the customer’s financial condition no longer warrants pursuit of collection. Although we expect to collect amounts due, actual collections may differ from estimated amounts.

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. Except for the increase in expected credit losses, we are not aware of any specific event or circumstances that would require an update to our estimates or assumptions or a revision of the carrying value of our assets or liabilities as of the date of this Quarterly Report on Form 10-Q. These estimates and assumptions may change as new events occur and additional information is obtained. As a result, actual results could differ materially from these estimates and assumptions.

We analyzed the credit risk associated with our accounts receivables and lease receivables. Our historical loss rates have not shown any significant differences between customer industries or geographies, and, upon adoption of ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”), we grouped all accounts receivables and lease receivables into a single portfolio. As disclosed in Note 15, Segment Information and Geographic Data, we do not have significant international geographic concentrations of revenue, and, as a result, we do not have significant concentrations of accounts receivables or lease receivables in any single geography outside of the United States. As a result of our adoption of ASU 2016-13 effective March 1, 2020, we recognized the cumulative effect of initially applying the guidance as a $0.1 million addition to our allowance for doubtful accounts with an offsetting adjustment to accumulated deficit.

The allowance for doubtful accounts totaled $3.7 million and $3.1 million as of August 31, 2020 and February 29, 2020, respectively.

Goodwill and Other Long-Lived Assets

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. We test goodwill for impairment in accordance with the provisions of ASC 350, Intangibles – Goodwill and Other, (“ASC 350”). Goodwill is tested for impairment at least annually at the reporting unit level or whenever events or changes in circumstances indicate that goodwill might be impaired. ASC 350 provides that an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if an entity concludes otherwise, then it is required to perform an impairment test.

In accordance with Accounting Standards Update 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which we adopted in the fourth quarter of fiscal 2020, the impairment test involves comparing the estimated fair value of a reporting unit with its carrying value, including goodwill. If the estimated fair value exceeds carrying value, goodwill is considered not to be impaired. If, however, the fair value of the reporting unit is less than carrying value, then an impairment loss is recognized in an amount equal to the amount that the carrying value of the reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

Long-lived assets to be held and used, including identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets or asset group to future undiscounted net cash flows expected to be generated by the lowest level of asset group. If the assets or asset group are impaired, the impairment recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for similar investment of like risk. In the fourth quarter of fiscal 2020, we determined that the prolonged secular decline in revenues from our legacy LoJack U.S. SVR products coupled with the slower than anticipated market penetration of our telematics solutions in the U.S. automotive dealership channel represented determinate indications of impairment. These factors were further exacerbated by the immediate unfavorable impact that the COVID-19 pandemic has had on the automotive end markets over the past four months. We recorded an impairment loss of $19.1 million during the fourth quarter of fiscal 2020 related to certain intangible assets and other long-lived assets. As the COVID-19 pandemic continued to impact the market and our business operations during the first quarter of fiscal 2021, we reevaluated the recoverability of the carrying amount of long-lived assets, including goodwill. Based upon our assessment of economic conditions, our expectations of future business conditions and trends, our projected revenues, earnings, and cash flows, we determined that goodwill utilized in our LoJack U.S. SVR reporting unit was impaired and recorded an impairment loss of $3.9 million for goodwill and $0.4 million for dealer relationships as of May 31, 2020. For the fiscal quarter ended August 31, 2020, we continued our assessment of these conditions and concluded no further impairment was required. Any deterioration in future operating cash flows of this reporting unit may result in further impairment of goodwill and other long-lived assets, including intangible assets.

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We estimate the fair value of goodwill and other long-lived assets including dealership relationships based on discounted cash flow techniques (Level 3 determination of fair value). Significant inputs to the valuation model include:

• estimated future cash flows;

• growth assumptions for future revenues as well as future gross margin rates, expense rates, capital expenditures and other estimates; and

• rate used to discount our estimated future cash flow projections to their present value (or estimated fair value) based on our estimated weighted average cost of capital.

Fair Value Measurements

We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in our financial statements. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly manner in an arm’s-length transaction between market participants at the measurement date. Fair value is estimated by using the following hierarchy:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

Convertible Senior Notes and Capped Call Transactions

We account for our convertible senior notes as separate liability and equity components. We determine the carrying amount of the liability component based on the fair value of a similar debt instrument excluding the embedded conversion option at the issuance date. The carrying amount of the equity component representing the conversion option is calculated by deducting the carrying value of the liability component from the principal amount of the notes as a whole. This difference represents a debt discount that is amortized to interest expense over the term of the notes using the effective interest rate method. The equity component of the notes is included in stockholders’ equity and is not remeasured as long as it continues to meet the conditions for equity classification. We allocate transaction costs related to the issuance of the notes to the liability and equity components using the same proportions as the initial carrying value of the notes. Transaction costs attributable to the liability component are being amortized to interest expense using the effective interest method over the respective term of the notes, and transaction costs attributable to the equity components are netted with the equity component of the note in stockholders’ equity. We account for the cost of the capped calls as a reduction to additional paid-in capital.

Patent Litigation and Other Contingencies

We accrue for patent litigation and other contingencies whenever we determine that an unfavorable outcome is probable and a liability is reasonably estimable. The amount of the accrual is estimated based on a review of each claim, including the type and facts of the claim and our assessment of the merits of the claim. These accruals are reviewed at least on a quarterly basis and are adjusted to reflect the impact of recent negotiations, settlements, court rulings, advice from legal counsel and other events pertaining to the case. Such accruals, if any, are recorded as general and administrative expense in our condensed consolidated statements of comprehensive loss. Although we take considerable measures to mitigate our exposure in these matters, litigation is unpredictable; however, we believe that we have valid defenses with respect to pending legal matters against us as well as adequate provisions for probable and estimable losses. All costs for legal services are expensed as incurred.

Foreign Currency Translation

We translate the assets and liabilities of our non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation included in accumulated other comprehensive income (loss) during the period. The aggregate foreign currency transaction exchange rate gain (losses) included in determining income (loss) before income taxes was $0.9 million and $(0.8) million for the three and six months ended August 31, 2020, respectively. The aggregate foreign currency transaction exchange rate losses included in determining income (loss) before income taxes was $1.0 million and $1.3 million for the three and six months ended August 31, 2019, respectively.

Other Comprehensive Income (Loss)

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Other comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss) (“OCI”). OCI refers to revenue, expenses and gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity and excluded from net income (loss). Our OCI consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-13, Financial Instruments - Credit Losses, or ASC 326. The new standard amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology. We adopted the new allowance for credit losses accounting standard on March 1, 2020 by means of recognizing the cumulative effect of initially applying the guidance as a $0.1 million addition to our allowance for doubtful accounts with an offsetting adjustment to accumulated deficit. See Accounts Receivable and Allowance for Doubtful Accounts above.

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs incurred to develop or obtain internal-use software. We adopted this standard prospectively effective March 1, 2020. As a result of the adoption, we recorded certain costs, particularly those incurred during the application development phase, related to the implementation of cloud computing arrangements in prepaid expenses which historically had been recorded in property and equipment. Capitalized costs related to cloud computing arrangements for the six months ended August 31, 2020, which are included in prepaid expenses and other current assets on our condensed consolidated balance sheets, were not material.

NOTE 2 – CASH, CASH EQUIVALENTS AND INVESTMENTS

The following tables summarize our financial instrument assets (in thousands):

	As of August 31, 2020
							Balance Sheet Classification
							of Fair Value
			Unrealized				Cash and
	Adjusted		Gains		Fair		Cash		Other
	Cost		(Losses)		Value		Equivalents		Assets
Cash	$	31,357	$	—	$	31,357	$	31,357	$	—
Level 1:
Money market funds		75,788		—		75,788		75,788		—
Mutual funds (1)		2,140		191		2,331		—		2,331
Total	$	109,285	$	191	$	109,476	$	107,145	$	2,331

	As of February 29, 2020
							Balance Sheet Classification
							of Fair Value
			Unrealized				Cash and
	Adjusted		Gains		Fair		Cash		Other
	Cost		(Losses)		Value		Equivalents		Assets
Cash	$	31,895	$	—	$	31,895	$	31,895	$	—
Level 1:
Money market funds		5,508		—		5,508		5,508		—
Mutual funds (1)		3,926		26		3,952		—		3,952
Level 2:
Repurchase agreements		60,000		—		60,000		60,000		—
Corporate bonds		10,001		—		10,001		10,001		—
Total	$	111,330	$	26	$	111,356	$	107,404	$	3,952

(1) Amounts represent various equities, bond and money market mutual funds that are held in an irrevocable “Rabbi Trust” for payment obligations to non-qualified deferred compensation plan participants. In addition to the mutual funds above, our “Rabbi Trust” also included Corporate-Owned Life Insurance (COLI) starting in fiscal 2020. As of August 31, 2020, the cash surrender value of COLI was $4.2 million. 

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NOTE 3 - INVENTORIES

Inventories consist of the following (in thousands):

	August 31,		February 29,
	2020		2020
Raw materials	$	14,082	$	18,118
Finished goods		17,413		18,660
	$	31,495	$	36,778

NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS

Other intangible assets consist of the following (in thousands):

		Gross										Accumulated Amortization						Net
	Useful Life	Feb. 29, 2020		Additions & Adjustments, net (1)			Impair- ment			Aug. 31, 2020		Feb. 29, 2020		Expense		Aug. 31, 2020		Feb. 29, 2020		Aug. 31, 2020
Developed technology	2-7 years	$	27,363		56			—		$	27,419	$	21,437	$	1,511	$	22,948	$	5,926	$	4,471
Tradenames	10 years		30,093		81			—			30,174		16,303		1,059		17,362		13,790		12,812
Customer lists	4-7 years		25,304		—			—			25,304		22,903		48		22,951		2,401		2,353
Dealer and customer relationships	7-12 years		34,139		(527	)		(365	)		33,247		10,753		1,098		11,851		23,386		21,396
Patents	5 years		589		—			—			589		197		20		217		392		372
		$	117,488	$	(390	)	$	(365	)	$	116,733	$	71,593	$	3,736	$	75,329	$	45,895	$	41,404

(1) Amounts also include any net changes in intangible asset balances for the periods presented that resulted from foreign currency translations.

Intangible assets with finite lives are amortized on a straight-line basis over the expected period to be benefited by future cash flows. We monitor and assess these assets for impairment on a periodic basis. Our assessment includes various new product lines and services, which leverage the existing intangible assets as well as consideration of historical and projected revenues and cash flows. In the first quarter of fiscal 2021, we determined that the prolonged secular decline in legacy LoJack U.S. SVR products revenue coupled with the slower than anticipated market penetration of our telematics solutions in the U.S. automotive dealership channel represented determinate indications of impairment. As a result, we performed an assessment of the carrying amount of the related intangible assets supporting these products. Our assessment of the future cash flows generated by these assets concluded that an impairment loss was present. We recorded an impairment loss of $0.4 million for U.S. dealer relationships during the first quarter of fiscal 2021. For the three months ended August 31, 2020, we continued our assessment of these conditions and concluded no further impairment was required.

Estimated future amortization expense as of August 31, 2020 is as follows (in thousands):

2021 (remainder)	$	3,895
2022		5,830
2023		5,610
2024		4,498
2025		4,374
Thereafter		17,197
	$	41,404

Changes in goodwill are as follows (in thousands):

	Software & Subscription Services			Telematics Products		LoJack U.S. SVR Products			Total
Balance as of February 29, 2020	$	55,132		$	39,180	$	12,023		$	106,335
Impairment loss		—			—		(3,924	)		(3,924	)
Effect of exchange rate change on goodwill		(249	)		—		—			(249	)
Balance as of August 31, 2020	$	54,883		$	39,180	$	8,099		$	102,162

There was no impairment of goodwill as of February 29, 2020. As the COVID-19 pandemic continues to impact the market and our business operations during the first quarter of fiscal 2021, we reevaluated the recoverability of the carrying amount of long-lived assets,

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including goodwill. Based upon our assessment of economic conditions, our expectations of future business conditions and trends, our projected revenues, earnings, and cash flows, we determined that goodwill utilized in our LoJack U.S. SVR reporting unit was impaired and recorded an impairment loss of $3.9 million as of May 31, 2020. For the three months ended August 31, 2020, we continued our assessment of these conditions and concluded no further impairment was required. Any deterioration in future operating cash flows of this reporting unit may result in further impairment of goodwill and other long-lived assets, including intangible assets

NOTE 5 – OTHER ASSETS

Other assets consist of the following (in thousands):

	August 31,		February 29,
	2020		2020
Deferred cost	$	6,114	$	7,818
Deferred compensation plan assets		6,494		6,041
Lease receivables, non-current		7,830		5,992
Prepaid commissions		2,191		2,318
Other		2,403		2,599
	$	25,032	$	24,768

We have a non-qualified deferred compensation plan in which certain members of management and all non-employee directors are eligible to participate. Participants may defer a portion of their compensation until retirement or another date specified by them in accordance with the plan. We are funding the plan obligations through cash deposits to a Rabbi Trust that are invested in various equities, bond, money market mutual funds and COLI in generally the same proportion as investment elections made by the participants. The deferred compensation plan liability is included in other non-current liabilities in the accompanying consolidated balance sheets.

NOTE 6 – FINANCING ARRANGEMENTS

The following table provides a summary of our debt as of August 31, 2020 and February 29, 2020 (in thousands):

	Maturity	Effective			August 31,			February 29,
	Date	Interest Rate			2020			2020
2020 Convertible Notes, 1.625% fixed rate	May 15, 2020		6.20	%	$	-		$	27,599
2025 Convertible Notes, 2.00% fixed rate	August 1, 2025		7.56	%		230,000			230,000
Revolving Credit Facility	March 30, 2022		3.50	%		20,000			-
Due to factors	2020 - 2024		4.70	%		12,627			14,371
Total term debt						262,627			271,970
Unamortized discount and issuance costs						(58,161	)		(61,763	)
Less: Current portion of long-term term debt						(5,184	)		(33,119	)
Long-term debt, net of current portion					$	199,282		$	177,088

The effective interest rates for the convertible notes include the interest on the notes and amortization of the discount. As of August 31, 2020 and February 29, 2020, the fair value of the 2025 Convertible Notes was $191 million and $197 million, respectively, based on Level 2 inputs.

2025 Convertible Notes

In July 2018, we issued debt of $230.0 million aggregate principal amount of convertible senior unsecured notes due in 2025 (“2025 Convertible Notes”). These notes require semi-annual interest payments at a rate of 2.00% until maturity, conversion, redemption or repurchase, which will be no later than August 1, 2025. We may redeem the notes at our option at any time on or after August 6, 2022 at a cash redemption price equal to the principal amount plus accrued interest, but only if the last reported sale price per share of our stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice. The 2025 Convertible Notes are convertible into cash, shares of our common stock or a combination of both, at our election, based on an initial conversion price of $30.7450. Holders may convert their 2025 Convertible Notes at their option upon the occurrence of certain events, as defined in the 2025 Indenture. Approximately $51.9 million, net of tax, was allocated to additional paid-in capital upon issuance of these notes.

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In July 2018, in connection with the 2025 Convertible Notes, we entered into capped call transactions with certain option counterparties who were initial purchasers of the 2025 Convertible Notes. The capped call transactions are expected to reduce the potential dilution of earnings per share upon conversion of the 2025 Convertible Notes. Under the capped call transactions, we purchased options relating to 7.48 million shares of common stock underlying the notes, with a strike price equal to the conversion price of the notes and with a cap price equal to $41.3875. We paid $21.2 million for the note hedges and as a result, approximately $15.9 million, net of tax, was recorded as a reduction to additional paid-in capital within stockholders’ equity.

2020 Convertible Notes

On May 15, 2020, we repaid the remaining principal balance of $27.6 million of the 1.625% convertible senior unsecured notes issued in May 2015.

Revolving Credit Facility

On March 30, 2018, we entered into a revolving credit facility with JP Morgan Chase Bank, N.A. that provides for borrowings up to $50.0 million. This revolving credit facility was extended on March 27, 2020 with a new maturity date of March 30, 2022. At our election, the borrowings under this revolving credit facility bear interest at (a) for base rate loans, a base rate based on the highest of (i) 0%, (ii) the rate of interest publicly announced by JP Morgan Chase Bank, N.A. (the “Agent”) as its prime rate in effect at its principal office in New York City, (iii) the overnight bank funding rate as determined by the Federal Reserve Bank of New York plus 0.50% and (iv) the LIBOR-based rate for a one-month interest period on such day plus 1%; or (b) for Eurodollar loans, the higher of (x) 1.00% and (y) the LIBOR-based rate for one, three or six months (as selected by the Company) for Eurodollar deposits. An applicable margin is added based on the Company’s senior leverage ratio, ranging from 1.50% to 2.00% for base rate loans, and from 2.50% to 3.00% for Eurodollar loans. We will also pay a commitment fee based on our senior leverage ratio ranging from 0.40% to 0.50%, payable quarterly in arrears, on the average daily unused amount of the Credit Facility. Amounts owing under the credit agreement and related credit documents are guaranteed by the Company and certain of its subsidiaries. We have also granted security interests in substantially all of our respective assets to secure these obligations. The net proceeds available under the revolving credit facility can be used for repayment of existing debt, working capital and general corporate purposes. There were $20.0 million in borrowings outstanding under this revolving credit facility at August 31, 2020.

The revolving credit facility contains certain negative and affirmative covenants including financial covenants that require us to maintain a minimum level of earnings before interest, income taxes, depreciation, amortization and other non-cash charges (Adjusted EBITDA) to interest ratio, a minimum senior indebtedness ratio and a total indebtedness coverage ratio, all measured on a quarterly basis. As of August 31, 2020, we were in compliance with our covenants under the revolving credit facility.

Synovia Revenue Assignments

In conjunction with the acquisition of Synovia on April 12, 2019, we assumed the rights and obligations under certain revenue assignment arrangements with several financial institutions (the “Factors”). Pursuant to the terms of the arrangements, Synovia sold to the Factors rights to all future revenues of certain subscription contracts on a non-recourse basis for credit approved accounts.

These arrangements with the Factors met the criteria in ASC 470-10-25, Sales of Future Revenues or Various Other Measures of Income, which relates to cash received from an investor in exchange for a specified percentage or amount of revenue or other measure of income of a particular product line, business segment, trademark, patent, or contractual right for a defined period. Under this guidance, the arrangement qualified as a debt instrument for accounting purposes due to Synovia’s significant continuing involvement in the generation of cash flows due to the Factors. Further, under ASC 805, Business Combination, we recorded the amounts due to the Factors as a debt obligation at fair value in the opening balance sheet. The fair value of this debt of $19.7 million was determined using a pre-tax cost of debt of 4.7% at the time of our acquisition of Synovia. The discount of $1.5 million is being amortized under the interest method. During the three months ended August 31, 2020 and 2019, we recognized $0.1 million and $0.2 million of interest expense related to this debt, respectively. During both the six months ended August 31, 2020 and 2019, we recognized $0.3 million of interest expense related to this debt. The revenues recognized from this arrangement of $3.3 million and $3.1 million were considered a non-cash activity in our condensed consolidated statements of cash flows for the six months ended August 31, 2020 and 2019, respectively.

NOTE 7 – RESTRUCTURING CHARGES

Beginning in fiscal 2019, we commenced a plan to capture certain synergies and cost savings related to streamlining our global operations and sales organization, as well as rationalize certain leased properties that are not fully occupied. Our plan is aligned with our strategy to integrate the global sales organization and further outsource manufacturing functions in order to drive operational efficiency, increase supplier geographic diversity, and reduce operating expenses. To date, total restructuring charges were $14.9 million, comprised of $9.1 million in severance and employee related costs, and $5.8 million for vacant office and manufacturing facility space. Restructuring charges related to vacant office and manufacturing facility space were due primarily to the vacancy in Canton, Massachusetts of $3.3 million, which was sub-leased starting in May 2020. The anticipated rent payments for the ceased-use leased facilities will be made through December 2025. Substantially all charges related to severance and employee costs were under the Telematics Products and LoJack U.S. SVR Products reportable segments. As a result of the adoption of ASC 842, effective March 1, 2019, the balance of the restructuring liability related to certain facility leases has been reclassified as a reduction of the Operating lease right-of-use assets in our condensed consolidated balance sheet.

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For the three and six months ended August 31, 2020, total restructuring charges were $0.6 million and $2.5 million, respectively. Total restructuring charges incurred to date in fiscal 2021 were comprised of $2.3 million in severance and employee related costs, which included $0.9 million stock-based compensation, and $0.2 million for vacant facilities. The restructuring liabilities related to personnel were included in Accrued payroll and employee benefits in our condensed consolidated balance sheets as of August 31, 2020 and February 29, 2020.

The following table summarizes the charges resulting from the implementation of the restructuring plan (in thousands):

	Three months ended August 31, 2020						Three months ended August 31, 2019
	Personnel		Facilities		Total		Personnel		Facilities		Total
Cost of revenue	$	397	$	71	$	468	$	349	$	1,210	$	1,559
Selling and marketing		-		-		-		447		-		447
General and administrative		83		-		83		266		-		266
Total	$	480	$	71	$	551	$	1,062	$	1,210	$	2,272

	Six months ended August 31, 2020						Six months ended August 31, 2019
	Personnel		Facilities		Total		Personnel		Facilities		Total
Cost of revenue	$	273	$	174	$	447	$	349	$	1,210	$	1,559
Selling and marketing		30		-		30		447		-		447
General and administrative		1,982		-		1,982		266		-		266
Total	$	2,285	$	174	$	2,459	$	1,062	$	1,210	$	2,272

The following table summarizes the activity resulting from the implementation of the restructuring plan within other current and non-current liabilities (in thousands):

	Personnel			Facilities			Total
Restructuring liabilities as of February 29, 2020	$	2,383		$	359		$	2,742
Charges		2,285			174			2,459
Payments		(1,848	)		(448	)		(2,296	)
Restructuring liabilities as of August 31, 2020	$	2,820		$	85		$	2,905

NOTE 8 – LEASES

We have various non-cancelable operating leases for our offices in California, Texas, Massachusetts, Indiana, Minnesota and Virginia in the United States, and Italy, Mexico and the United Kingdom. We also have various non-cancelable operating leases for towers and vehicles throughout the United States, Italy and Mexico. These leases expire at various times through 2028. Certain lease agreements contain renewal options, rent abatement, and escalation clauses that are factored into our determination of lease payments when appropriate.

During the second quarter of fiscal 2021, we sublet one of our office facilities in Texas and vacated the facility entirely. As a result, we recorded an impairment of our operating lease right-of-use assets and other property and equipment of $0.2 million and $0.1 million, respectively. These impairment losses are included within the total Impairment loss shown in the operating expenses in our condensed consolidated statements of comprehensive loss.

The table below presents lease-related assets and liabilities recorded on the condensed consolidated balance sheet (in thousands):

	Classification	August 31, 2020
Assets
Operating lease right-of-use assets	Operating lease right-of-use assets	$	23,428
Liabilities
Operating lease liabilities (current)	Other current liabilities	$	6,201
Operating lease liabilities (noncurrent)	Operating lease liabilities		25,225
Total lease liabilities		$	31,426

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Lease Costs

The following lease costs were included in our condensed consolidated statements of comprehensive loss as follows (in thousands):

	For the Three Months Ended August 31,				For the Six Months Ended August 31,
	2020		2019		2020		2019
Operating lease cost	$	1,837	$	1,972	$	3,426	$	3,973
Short-term lease cost		82		252		163		564
Variable lease cost		114		43		228		73
Total lease cost	$	2,033	$	2,267	$	3,817	$	4,610

Supplemental Information

The table below presents supplemental information related to operating leases during the six months ended August 31, 2020 (in thousands, except weighted-average information):

Cash paid for amounts included in the measurement of operating lease liabilities	$	3,605
Right-of-use assets obtained in exchange for new operating lease liabilities	$	5,425
Weighted average remaining lease term	6.48
Weighted average discount rate		5.17	%

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of August 31, 2020 (in thousands):

Remainder of 2021	$	4,348
2022		7,106
2023		6,588
2024		4,891
2025		3,113
Thereafter		10,057
Total minimum lease payments		36,103
Less imputed interest		(4,677	)
Present value of future minimum lease payments		31,426
Less current obligations under leases		(6,201	)
Long-term lease obligations	$	25,225

NOTE 9 - INCOME TAXES

We use the assets and liabilities method when accounting for income taxes. Under this method, deferred income tax asset and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We evaluate our estimated annual effective tax rate (“ETR”) on a quarterly basis based on current and forecasted operating results. The relationship between our income tax provision or benefit and our pretax book income or loss can vary significantly from period to period considering, among other factors, the overall level of pretax book income or loss and changes in the blend of jurisdictional income or loss that is taxed at different rates and changes in valuation allowances. The income tax expense of $0.3 million and $0.5 million for the three and six months ended August 31, 2020, respectively, was primarily attributable to one of our foreign subsidiaries. The income tax benefit associated with the pre-tax loss for the quarter ended August 31, 2020, which was primarily from the U.S. jurisdiction, was offset by a full valuation allowance.

NOTE 10 - EARNINGS PER SHARE

Basic earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income for the period by the weighted average

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number of common shares outstanding during the period plus the dilutive effect of outstanding stock options and restricted stock-based awards using the treasury stock method.

The calculation of the basic and diluted loss per share of common stock is as follows (in thousands, except per share value):

	Three Months Ended						Six Months Ended
	August 31,						August 31,
	2020			2019			2020			2019
Net loss	$	(9,478	)	$	(7,369	)	$	(23,900	)	$	(16,062	)
Basic and diluted weighted average number of common shares outstanding		34,256			33,568			34,140			33,475
Loss per share:
Basic	$	(0.28	)	$	(0.22	)	$	(0.70	)	$	(0.48	)
Diluted	$	(0.28	)	$	(0.22	)	$	(0.70	)	$	(0.48	)

All outstanding options and restricted stock units for the three and six months ended August 31, 2020 and 2019 were excluded from the computation of diluted earnings per share because we reported a net loss for each of these periods and the effect of inclusion would be antidilutive.

We have the option to pay cash, issue shares of common stock or any combination thereof for the aggregate amount due upon conversion of the 2025 Convertible Notes. It is our intent to settle the principal amount of these notes with cash, and therefore, we use the treasury stock method for calculating any potential dilutive effect of the conversion option on diluted earnings (loss) per share. From the time of the issuance of the notes, the average market price of our common stock has been less than the initial conversion price of the notes, and consequently no shares have been included in diluted earnings per share for the conversion value of the notes.

NOTE 11 – STOCKHOLDERS’ EQUITY

Stock-based compensation expense is included in the following captions of the condensed consolidated statements of comprehensive loss (in thousands):

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Cost of revenues	$	203	$	162	$	378	$	337
Research and development		723		633		1,369		1,046
Selling and marketing		760		982		1,265		1,651
General and administrative		1,160		1,406		2,582		2,692
Restructuring		-		-		875		-
	$	2,846	$	3,183	$	6,469	$	5,726

Changes in our outstanding stock options during the six months ended August 31, 2020 were as follows (options in thousands):

	Number of Options			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
Outstanding at February 29, 2020		1,071		$	14.65		6.2
Granted		—			—
Exercised		(70	)		4.03
Forfeited or expired		(152	)		17.52
Outstanding at August 31, 2020		849		$	15.02		6.0	$	309
Exercisable at August 31, 2020		578		$	14.37		5.1	$	309

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Changes in our outstanding restricted stock shares, performance stock units (“PSUs”) and restricted stock units (“RSUs”) during the six months ended August 31, 2020 were as follows (restricted shares, PSUs and RSUs in thousands):

	Number of Restricted Shares, PSUs and RSUs			Weighted Average Grant Date Fair Value		Shares Retained to Cover Statutory Minimum Withholding Taxes
Outstanding at February 29, 2020		2,215		$	14.47
Granted		1,778			7.86
Vested		(611	)		14.97		199
Forfeited		(152	)		13.46
Outstanding at August 31, 2020		3,230		$	10.78

As of August 31, 2020, there was $29.5 million of total unrecognized stock-based compensation cost related to outstanding nonvested equity awards that is expected to be recognized as an expense over a weighted-average remaining vesting period of 3.7 years.

NOTE 12 - CONCENTRATION OF RISK

Significant Customers

We sell telematics products and services to large global enterprises in the industrial equipment, transportation and automotive market verticals. One customer in the heavy equipment industry accounted for 16% and 15% of our consolidated revenue for the three and six months ended August 31, 2020, respectively, and 10% and 12% of our consolidated revenue for the three and six months ended August 31, 2019, respectively. The same customer accounted for 16% and 19% of our consolidated accounts receivable at August 31, 2020 and February 29, 2020, respectively.

Significant Suppliers

We purchase a significant amount of our inventory from certain manufacturers or suppliers including components, assemblies and electronic manufacturing parts. These suppliers are located in Asia, including China. The inventory is purchased under standard supply agreements that outline the terms of the product delivery. The title and risk of loss of the product generally pass to us upon shipment from the manufacturers’ plant or warehouse. For the three and six months ended August 31, 2020, four of our suppliers accounted for approximately 54% and 58% of our total inventory purchases, respectively. For the three and six months ended August 31, 2019, three of our suppliers accounted for approximately 51% and 48% of total inventory purchases, respectively. As identified below, some of these manufacturers accounted for more than 10% of our accounts payable as follows (rounded):

	August 31,			February 29,
	2020			2020
Accounts payable:
Supplier A		14	%		11	%
Supplier B		9	%		11	%

We are currently reliant upon these suppliers for products. Although we believe that we can obtain products from other sources, the loss of a significant supplier could have a material impact on our financial condition and results of operations as the products that are being purchased may not be available on similar terms from another supplier.

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NOTE 13 - PRODUCT WARRANTIES

All products have a one- or two-year limited warranty against manufacturing defects and workmanship. We estimate the future costs relating to product returns subject to our warranty and record a reserve upon shipment of our products. We periodically adjust our estimate for actual warranty claims and historical claims experience as well as the impact of known product operational issues. During the three months ended August 31, 2020, we recorded $1.4 million in the resolution of a product performance matter with a customer. The warranty reserve is included in Other Current Liabilities in the condensed consolidated balance sheets. Activity in the accrued warranty costs liability is as follows (in thousands):

	Six Months Ended
	August 31,
	2020			2019
Balance at beginning of period	$	987		$	1,399
Charged to costs and expenses		1,995			1,100
Deductions		(518	)		(700	)
Balance at end of period	$	2,464		$	1,799

NOTE 14 – OTHER FINANCIAL INFORMATION

Supplemental Balance Sheet Information

Other current liabilities consist of the following (in thousands):

	August 31,		February 29,
	2020		2020
Operating lease liabilities	$	6,201	$	4,662
Taxes payable		2,476		2,266
Warranty reserves		2,464		987
Customer deposit		2,331		1,377
Litigation reserve		2,200		1,500
Interest payable		365		481
Other (1)		4,982		4,880
	$	21,019	$	16,153

(1) Amount represents accruals for various operating expense such as professional fees, vendor incentives and other estimates that are expected to be paid within the next 12 months

Other non-current liabilities consist of the following (in thousands):

	August 31,		February 29,
	2020		2020
Deferred revenue	$	25,104	$	27,452
Deferred compensation plan liability		6,542		5,919
Other		3,384		1,673
	$	35,030	$	35,044

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Supplemental Statement of Comprehensive Loss Information

Interest expense consists of the following (in thousands):

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Interest expense on 2020 Convertible Notes:
Stated interest at 1.625% per annum	$	-	$	498	$	93	$	996
Amortization of discount and issue costs		-		1,495		289		2,951
		-		1,993		382		3,947
Interest expense on 2025 Convertible Notes:
Stated interest at 2.00% per annum		1,150		1,150		2,313		2,326
Amortization of discount and issue costs		2,329		2,160		4,640		4,328
		3,479		3,310		6,953		6,654
Other interest expense		378		252		599		410
Total interest expense	$	3,857	$	5,555	$	7,934	$	11,011

Supplemental Cash Flow Information

“Net cash provided by operating activities” includes cash payments for interest expense and income taxes as follows (in thousands):

	Six Months Ended
	August 31,
	2020		2019
Cash payments for interest and income taxes:
Interest expense paid	$	2,780	$	3,358
Income tax paid, net of refunds	$	447	$	466

NOTE 15 - SEGMENT INFORMATION AND GEOGRAPHIC DATA

Prior to the fourth quarter of fiscal 2020, our two reportable segments, Software & Subscription Services and Telematics Systems, also represented our two reporting units for goodwill impairment testing. During the fourth quarter of fiscal 2020, our former CODM changed our reporting structure, resulting in four reporting units with two reporting units under each of our reportable segments. During the first quarter of fiscal 2021, our President and Chief Executive Officer, who is our current CODM, realigned our operational structure into three reportable segments: Software & Subscriptions Services, Telematics Products and LoJack U.S. SVR Products. We have recast certain prior period amounts to conform to the way our CODM regularly reviews segment performance.

Our 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. Software & Subscription Services segment revenues include SaaS, professional services, devices sold with monitoring services, accessories, and amortization of deferred revenue 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, as well as third-party software and service solutions worldwide and are critical for applications demanding secure, reliable and business-critical communications. Telematics Product segment revenues consist primarily of stand-alone product sales.

Our LoJack U.S. SVR Product segment represents the portfolio of security and protection products and services for tracking and recovering cars, trucks and other valuable mobile assets. LoJack U.S. SVR Product segment revenues consist primarily of stand-alone product sales.

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Segment information is as follows (in thousands):

	Three Months Ended August 31, 2020															Three Months Ended August 31, 2019
	Reportable Segments															Reportable Segments
	Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total			Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total
Revenues	$	33,696		$	40,732		$	9,109					$	83,537		$	31,205		$	48,934		$	13,097					$	93,236
Gross profit	$	16,502		$	10,961		$	3,347					$	30,810		$	13,360		$	18,184		$	6,126					$	37,670
Gross margin		49	%		27	%		37	%					37	%		43	%		37	%		47	%					40	%
Adjusted EBITDA	$	7,573		$	(1,476	)	$	227		$	(921	)	$	5,403		$	3,947		$	5,341		$	2,173		$	(814	)	$	10,647

	Six Months Ended August 31, 2020															Six Months Ended August 31, 2019
	Operating Segments															Operating Segments
	Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total			Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total
Revenues	$	61,725		$	86,271		$	15,756					$	163,752		$	56,716		$	100,132		$	25,458					$	182,306
Gross profit	$	30,317		$	26,081		$	5,465					$	61,863		$	23,760		$	38,228		$	11,093					$	73,081
Gross margin		49	%		30	%		35	%					38	%		42	%		38	%		44	%					40	%
Adjusted EBITDA	$	13,927		$	1,647		$	(1,346	)	$	(2,318	)	$	11,910		$	6,321		$	13,204		$	1,303		$	(2,612	)	$	18,216

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 reportable 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,
	2020			2019			2020			2019
Net loss	$	(9,478	)	$	(7,369	)	$	(23,900	)	$	(16,062	)
Investment income		(680	)		(1,256	)		(698	)		(3,337	)
Interest expense		3,857			5,555			7,934			11,011
Income tax provision (benefit)		266			(1,342	)		506			(3,599	)
Depreciation		5,073			5,191			9,983			9,036
Amortization of intangible assets		1,844			3,318			3,736			6,358
Stock-based compensation		2,846			3,183			5,594			5,726
Impairment loss		286			—			4,575			—
Restructuring charges		551			2,272			2,459			2,272
Non-recurring legal expenses		170			777			963			4,584
Acquisition and integration related expenses		—			46			—			1,190
Other		668			272			758			1,037
Adjusted EBITDA	$	5,403		$	10,647		$	11,910		$	18,216

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.

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

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
United States	$	58,945	$	68,684	$	110,495	$	131,806
Europe, Middle East and Africa		15,537		13,298		31,443		26,724
South America		5,687		5,447		11,729		10,975
Asia and Pacific Rim		1,704		1,940		4,043		4,349
All other		1,664		3,867		6,042		8,452
	$	83,537	$	93,236	$	163,752	$	182,306

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, 2020 and 2019.

NOTE 16 – LEGAL PROCEEDINGS

Omega patent infringement claim

On May 5, 2020, we filed our Form 10-K for the fiscal year ended February 29, 2020 which disclosed the current status of the Omega patent infringement claim. In summary, on March 20, 2020, the U.S. District Court for the Middle District of Florida (the “Trial Court”) denied our motion for judgement as a matter of law (“JMOL”), a new trial, and remittitur of damages. Also, on March 20, 2020, the Trial Court denied Omega’s motion for a new trial on willfulness. On April 1, 2020, the Trial Court denied Omega’s motion to enhance the royalty rate beyond the jury’s award of $5 per unit and motion to conduct post-trial discovery on CalAmp’s other OBD-II compliant LMUs. On April 3, 2020, the Trial Court denied Omega’s final motion regarding infringement of the VPODs. On April 30, 2020, we filed a notice of appeal at the Federal Circuit. Also on April 30, 2020, Omega filed notices of cross-appeal at the Federal Circuit.

We also initiated ex parte reexamination proceedings filed in the U.S. Patent and Trademark Office seeking to invalidate a number of Omega’s patents involved in the litigation. Those proceedings currently remain pending. We continue to believe that our products do not infringe on any of Omega’s patents.

In connection with this claim, we have accrued our best estimate of the probable liability based on reasonable royalty rates for similar technologies.

Other matters

In addition to the foregoing matters, from time to time as a normal consequence of doing business, various claims and litigation may be asserted or commenced against us. In particular, we may receive claims concerning contract performance or claims that our products or services infringe the intellectual property of third parties which are in the ordinary course of business. While the outcome of any such claims or litigation cannot be predicted with certainty, management does not believe that the outcome of such matters existing at the present time would have a material adverse effect on our condensed consolidated results of operations, financial condition or cash flows.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues, costs and expenses during the reporting periods. Actual results could differ materially from these estimates. The critical accounting policies listed below involve our more significant accounting judgments and estimates that are used in the preparation of the consolidated financial statements. These policies are described in greater detail in Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) under Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended February 29, 2020, as filed with the U.S. Securities and Exchange Commission on May 5, 2020, and include the following areas:

• Revenue recognition;

• Allowance for doubtful accounts;

• Inventory write-downs;

• Goodwill and long-lived assets;

• Patent litigation and other contingencies; and

• Deferred income tax assets and uncertain tax positions.

RESULTS OF OPERATIONS

OUR COMPANY

We are a telematics pioneer leading transformation in a mobile connected economy. We help reinvent businesses and improve lives around the globe with technology solutions that streamline complex Internet of Things (“IoT”) developments through wireless connectivity solutions and derived data intelligence. Our software applications, scalable cloud services, and intelligent devices collect and assess business-critical data from mobile assets and their contents. Historically, we had two reportable segments, Software & Subscription Services and Telematics Systems. During the first quarter of fiscal 2021, our President and Chief Executive Officer, who is our current Chief Operating Decision Maker (“CODM”), realigned our operational structure into three reportable segments: Software & Subscriptions Services, Telematics Products and LoJack U.S. SVR Products. Our organizational structure is based on a number of factors that our CEO, as the CODM, uses to evaluate and operate the business, which include, but are not limited to, customer base, homogeneity of products, and technology within these three segments. A description of the reportable business segments is provided below.

SOFTWARE & SUBSCRIPTION SERVICES

Our 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 Application Programming Interfaces (“APIs”) to deliver full-featured mobile IoT solutions to a wide range of customers and markets. Our scalable proprietary applications and other subscription services enable rapid and cost-effective development of high-value solutions for customers all around the globe.

TELEMATICS PRODUCTS

Our Telematics Products segment offers a series of advanced telematics products for the broader connected vehicle marketplace, which enable customers to optimize their operations by collecting, monitoring and effectively reporting business-critical information and desired intelligence from high-value remote and mobile assets. Our telematics products include asset tracking units, mobile telematics devices, mobile gateways, and routers. These wireless networking devices underpin a wide range of solutions, and are ideal for applications demanding secure, reliable and business-critical communications.

LOJACK U.S. SVR PRODUCTS

Our LoJack U.S. SVR Products segment offers a series of security and protection products and services for tracking and recovering vehicles. Our Stolen Vehicle Recovery (SVR) solution is the only one directly integrated with law enforcement that has a 90%+ recovery rate and over $1 billion worth of recoveries in the U.S. alone.

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Adjusted EBITDA

In addition to our U.S. GAAP results, we present Adjusted EBITDA as a supplemental non-GAAP measure of our performance. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that excludes or includes amounts to be different than the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the statements of comprehensive loss, balance sheets or statements of cash flows. We define Adjusted EBITDA as Earnings Before Investment Income, Interest Expenses, Taxes, Depreciation, Amortization, stock-based compensation, acquisition and integration expenses, non-cash costs and expenses arising from purchase accounting adjustments, litigation provision, gain from legal settlement and certain other adjustments. Our CEO, as the CODM, uses Adjusted EBITDA to evaluate and monitor segment performance. We believe this non-GAAP financial information provides additional insight into our ongoing performance and have therefore chosen to provide this information to investors for a more consistent basis of comparison to help investors evaluate our results of ongoing operations and enable more meaningful period-to-period comparisons. Pursuant to the rule and regulations of the SEC regarding the use of non-GAAP financial measures, we have provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure. See Note 15 to the accompanying condensed consolidated financial statements for additional information related to Adjusted EBITDA by reportable segments and reconciliation to net loss.

Recent Developments

In December 2019, a strain of coronavirus entitled COVID-19 emerged in China and spread to other countries including to the United States. In March 2020, the World Health Organization declared COVID-19 to be a public health pandemic of international concern, which has resulted in travel restrictions and in some cases, prohibitions of non-essential activities, disruption and shutdown of businesses and greater uncertainty in global financial markets.

In the United States and other geographies in which we and our customers, partners and service providers operate, the health concerns as well as political or governmental developments in response to COVID-19 could result in economic, social or labor instability or prolonged contractions in certain end markets which could slow the sales process, result in customers not purchasing or renewing on contracts or failing to make payments. These events could have a material adverse effect on the business and results of operations and financial condition.

Our business and operating results depend on telematics product sales, device installations and related subscription-based services. The outbreak has limited our ability to install devices in the six months ended August 31, 2020. During the three months ended August 31, 2020, there was an increase in the number of installations as U.S. auto dealerships and school districts reopened from government-imposed pandemic shutdowns, which resulted in a sequential increase in our revenue since first quarter of fiscal 2021. The effect of the outbreak may continue to impact our operating results depending on the severity of the pandemic and the actions taken or to be taken by governments and private businesses in relation to its containment.

We have adopted several measures in response to the COVID-19 outbreak, including instructing employees to work from home, implementing certain cost and cash flow control measures to address potential declines in billings and cash collections from customers, shifting the manner in which we engage with customers and restricting non-critical business travel by our employees. As a result of the work and travel restrictions, substantially all of our sales and installation services activities are being conducted or managed remotely.

OPERATING RESULTS

Three months ended August 31, 2020 compared to three months ended August 31, 2019:

Revenue by Segment

	Three Months Ended August 31,
	2020					2019
(In thousands)	$		% of Revenue			$		% of Revenue			$ Change			% Change
Segment
Software & Subscription Services	$	33,696		40.3	%	$	31,205		33.5	%	$	2,491			8.0	%
Telematics Products		40,732		48.8	%		48,934		52.5	%		(8,202	)		(16.8	%)
LoJack U.S. SVR Products		9,109		10.9	%		13,097		14.0	%		(3,988	)		(30.4	%)
Total	$	83,537		100.0	%	$	93,236		100.0	%	$	(9,699	)		(10.4	%)

Software & Subscription Services revenue increased by $2.5 million or 8.0% for the three months ended August 31, 2020 compared to the same period last year. The increase was primarily due to revenue growth in our government, municipalities and K-12 school bus end markets as well as our international recovery services especially in Italy and the United Kingdom. The growth was partially offset by a decrease in revenue due to unfavorable foreign currency exchange rates for Mexican peso as a result of COVID-19 pandemic.  

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Telematics Products revenue decreased by $8.2 million or 16.8% for the three months ended August 31, 2020 compared to the same period last year. The decrease was attributable to reduced sale volume due to a decline in customer demand for our small-to-medium sized customers adversely impacted by the uncertain market conditions prompted by the COVID-19 outbreak in the U.S. since February 2020. The decline was partially offset by an increase in OEM/Network products revenue as we accelerate the migration to LTE products with one of our largest customers. We expect this overall decline in Telematics Products to be temporary and to be offset by increased customer demands in the later part of fiscal 2021 as the 3G network sunset becomes more imminent and the effects of COVID-19 pandemic diminishes.

LoJack U.S. SVR Products revenue decreased by $4.0 million or 30.4% for the three months ended August 31, 2020 compared to the same period last year. The decrease was due to a decline in customer demand attributed to the COVID-19 outbreak in the U.S. since February 2020 as well as a technology transition from proprietary radio frequency technology to GPS-based telematics solutions.

Gross Profit by Segment

	Three Months Ended August 31,
	2020					2019
(In thousands)	$		% of Revenue			$		% of Revenue			$ Change			% Change
Segment
Software & Subscription Services	$	16,502		49.0	%	$	13,360		42.8	%	$	3,142			23.5	%
Telematics Products		10,961		26.9	%		18,184		37.2	%		(7,223	)		(39.7	%)
LoJack U.S. SVR Products		3,347		36.7	%		6,126		46.8	%		(2,779	)		(45.4	%)
Gross profit	$	30,810		36.9	%	$	37,670		40.4	%	$	(6,860	)		(18.2	%)

Consolidated gross profit decreased by $6.9 million or 18.2% for the three months ended August 31, 2020 compared to the same period last year. Consolidated gross margin decreased by 350 basis for the three months ended August 31, 2020 compared to the same period last year. The decline in consolidated gross profit and gross margin was due to lower revenue from our Telematics and LoJack U.S. SVR Products as a result of the COVID-19 pandemic as well as a $1.4 million one-time charge related to the resolution of a product performance matter with a customer. The decline in gross margin was partially offset by continued growth in Software & Subscription Services as described above.

Cost of revenues above excludes the restructuring related costs, which is shown separately in the operating expenses in our condensed consolidated statements of comprehensive loss.

Operating Expenses

	Three Months Ended August 31,
	2020					2019
(In thousands)	$		% of Revenue			$		% of Revenue			$ Change			% Change
Research and development	$	6,989		8.4	%	$	7,924		8.5	%	$	(935	)		(11.8	%)
Selling and marketing		13,493		16.2	%		15,868		17.0	%		(2,375	)		(15.0	%)
General and administrative		13,899		16.6	%		12,893		13.8	%		1,006			7.8	%
Intangible asset amortization		1,844		2.2	%		3,318		3.6	%		(1,474	)		(44.4	%)
Restructuring		551		0.7	%		2,272		2.4	%		(1,721	)		(75.7	%)
Impairment loss		286		0.3	%		—		0.0	%		286			100.0	%
Total	$	37,062		44.4	%	$	42,275		45.3	%	$	(5,213	)		(12.3	%)

Consolidated research and development expense decreased by $0.9 million or 11.8% for the three months ended August 31, 2020 compared to the same period last year as we implemented certain cost containment measures in connection with the COVID-19 outbreak. We will continue to invest in research and development of new products and technologies to be sold through the U.S. and international sales channels as market conditions improve.

Consolidated selling and marketing expense decreased by $2.4 million or 15.0% for the three months ended August 31, 2020 compared to the same period last year. The decrease was primarily driven by lower tradeshow and related travel and advertising expenses due to the COVID-19 pandemic, lower personnel costs due to reduced headcount resulting from the restructuring activities from the prior year coupled with lower sales commissions due to the decline in sales volume as described above. We will invest in additional headcount in sales and marketing as we gain greater visibility into customer demand as the effects of the COVID-19 pandemic diminishes.

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Consolidated general and administrative expenses increased by $1.0 million or 7.8% for the three months ended August 31, 2020 compared to the same period last year. The increase was primarily driven by higher personnel related expenses and higher depreciation and amortization expense resulting from us commencing additional operations on our new Enterprise Resource Planning (“ERP”) system.

Amortization of intangibles decreased by $1.5 million or 44.4% for the three months ended August 31, 2020 compared to the same period last year due to reduced amortization as a result of the intangible assets impairment loss recorded in fiscal 2020 and first quarter in fiscal 2021.

As described in Note 7 to the accompanying condensed consolidated financial statements, during fiscal 2019, we commenced a plan to capture certain synergies and cost savings related to streamlining our global operations and sales organization as well as rationalize certain leased properties that are vacant. We incurred additional charges of $0.6 million for this initiative during the three months ended August 31, 2020, which was primarily personnel related. Restructuring costs are shown separately in the operating expenses in our condensed consolidated statements of comprehensive loss.

During the second quarter of fiscal 2021, we sublet one of our office facilities in Texas and vacated the facility entirely. As a result, we recorded an impairment of our operating lease right-of-use assets and other property and equipment of $0.2 million and $0.1 million, respectively. These impairment losses are included within the Impairment loss shown in the operating expenses in our condensed consolidated statements of comprehensive loss.

Non-operating Income (Expense)

Investment income decreased by $0.6 million to $0.7 million for the three months ended August 31, 2020 from $1.3 million for the three months ended August 31, 2019. The decrease was primarily driven by decreased investments in various cash equivalent as a result of the repayment of our 2020 Convertible Notes in the first quarter of the current fiscal year and a decline in interest rate impacted by the COVID-19 pandemic.

Interest expense decreased by $1.7 million to $3.9 million for the three months ended August 31, 2020 from $5.6 million for the three months ended August 31, 2019 as we fully repaid the 2020 Convertible Notes in first quarter of the current fiscal year.

Other non-operating income remained consistent year-over-year.

Overall Profitability Measures

Net Income (Loss):

GAAP-basis net loss in the three months ended August 31, 2020 was $9.5 million as compared to a net loss of $7.4 million in the three months ended August 31, 2019. The $2.1 million increase in the net loss is due to higher operating loss as described above.

Adjusted EBITDA:

	Three Months Ended August 31,
(In thousands)	2020			2019			$ Change			% Change
Segment
Software & Subscription Services	$	7,573		$	3,947		$	3,626			91.9	%
Telematics Products		(1,476	)		5,341			(6,817	)		(127.6	%)
LoJack U.S. SVR Products		227			2,173			(1,946	)		(89.6	%)
Corporate Expenses		(921	)		(814	)		(107	)		13.1	%
Total Adjusted EBITDA	$	5,403		$	10,647		$	(5,244	)		(49.3	%)

Adjusted EBITDA for Software & Subscription Services increased by $3.6 million compared to the same period last year primarily due to higher gross profit described above. Adjusted EBITDA for Telematics Products and LoJack U.S. SVR Products in the three months ended August 31, 2020 decreased by $6.8 million and $1.9 million compared to the same period last year, respectively. The declines in both segments were primarily due to a decline in revenue resulting from decreased sales volume partially offset by operating expense savings as we implemented certain cost containment measures in connection with the COVID-19 pandemic as described above. Adjusted EBITDA for Corporate Expenses remained consistent year-over-year.

See Note 15 for information related to Adjusted EBITDA by reportable segments and a reconciliation to GAAP-basis net income (loss).

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Income Tax Provision

We evaluate our estimated annual effective tax rate (“ETR”) on a quarterly basis based on current and forecasted operating results. The relationship between our income tax provision or benefit and our pretax book income or loss can vary significantly from period to period considering, among other factors, the overall level of pretax book income or loss and changes in the blend of jurisdictional income or loss that is taxed at different rates and changes in valuation allowances. Consequently, our ETR may fluctuate significantly period to period and may make quarterly comparisons less than meaningful.

An income tax expense of $0.3 million was recorded for the three months ended August 31, 2020, compared to an income tax benefit of $1.3 million in the same period last year. The $1.6 million increase in tax expense for the three months ended August 31, 2020, compared with the same period in 2019, was primarily driven by a pre-tax loss in the current period which did not result in an income tax benefit due to the recording of a valuation allowance against net deferred tax assets.

Six months ended August 31, 2020 compared to six months ended August 31, 2019:

Revenue by Segment

	Six Months Ended August 31,
	2020					2019
(In thousands)	$		% of Revenue			$		% of Revenue			$ Change			% Change
Segment
Software & Subscription Services	$	61,725		37.7	%	$	56,716		31.1	%	$	5,009			8.8	%
Telematics Products		86,271		52.7	%		100,132		54.9	%		(13,861	)		(13.8	%)
LoJack U.S. SVR Products		15,756		9.6	%		25,458		14.0	%		(9,702	)		(38.1	%)
Total	$	163,752		100.0	%	$	182,306		100.0	%	$	(18,554	)		(10.2	%)

Software & Subscription Services revenue increased by $5.0 million or 8.8% for the six months ended August 31, 2020 compared to the same period last year. The increase was primarily due to revenue growth in fleet management, government, municipalities and K-12 school bus end markets as well as our international recovery services especially in Mexico and the United Kingdom. The growth was offset by a decrease in revenue due to decline in device installation for businesses such as Italy as a result of COVID-19 pandemic.  

Telematics Products revenue decreased by $13.9 million or 13.8% for the six months ended August 31, 2020 compared to the same period last year. The decrease was attributable to reduced sale volume due to a decline in customer demand for our small-to-medium sized customers adversely impacted by the uncertain market conditions prompted by the COVID-19 outbreak in the U.S. since February 2020. The decline was partially offset by an increase in OEM/Network products revenue as we accelerate the migration to LTE products with one of our largest customers. We expect this overall decline in Telematics Products to be temporary and to be offset by increased customer demands in the later part of fiscal 2021 as the 3G network sunset becomes more imminent and the effects of COVID-19 pandemic diminishes.

LoJack U.S. SVR Products revenue decreased by $9.7 million or 38.1% for the six months ended August 31, 2020 compared to the same period last year. The decrease was due to a decline in customer demand attributed to the COVID-19 outbreak in the U.S. since February 2020 as well as a technology transition from proprietary radio frequency technology to GPS-based telematics solutions.

Gross Profit by Segment

	Six Months Ended August 31,
	2020					2019
(In thousands)	$		% of Revenue			$		% of Revenue			$ Change			% Change
Segment
Software & Subscription Services	$	30,317		49.1	%	$	23,760		41.9	%	$	6,557			27.6	%
Telematics Products		26,081		30.2	%		38,228		38.2	%		(12,147	)		(31.8	%)
LoJack U.S. SVR Products		5,465		34.7	%		11,093		43.6	%		(5,628	)		(50.7	%)
Gross profit	$	61,863		37.8	%	$	73,081		40.1	%	$	(11,218	)		(15.4	%)

Consolidated gross profit decreased by $11.2 million or 15.4% for the six months ended August 31, 2020 compared to the same period last year. Consolidated gross margin decreased by 230 basis for the six months ended August 31, 2020 compared to the same period last year. The decline in consolidated gross profit and gross margin was due to lower revenue in our Telematics and LoJack U.S. SVR Products as a result of the COVID-19 pandemic as well as a $1.4 million one-time charge related to the resolution of a product performance matter with a customer. The decline in gross margin was partially offset by continued growth in Software & Subscription Services as described above.

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Cost of revenues above excludes the restructuring related costs, which is shown separately in the operating expenses in our condensed consolidated statements of comprehensive loss.

Operating Expenses

	Six Months Ended August 31,
	2020					2019
(In thousands)	$		% of Revenue			$		% of Revenue			$ Change			% Change
Research and development	$	13,313		8.1	%	$	14,810		8.1	%	$	(1,497	)		(10.1	%)
Selling and marketing		26,379		16.1	%		30,515		16.7	%		(4,136	)		(13.6	%)
General and administrative		27,568		16.8	%		30,377		16.7	%		(2,809	)		(9.2	%)
Intangible asset amortization		3,736		2.3	%		6,358		3.5	%		(2,622	)		(41.2	%)
Restructuring		2,459		1.5	%		2,272		1.2	%		187			8.2	%
Impairment loss		4,575		2.8	%		-		0.0	%		4,575			100.0	%
Total	$	78,030		47.6	%	$	84,332		46.2	%	$	(6,302	)		(7.5	%)

Consolidated research and development expense decreased by $1.5 million or 10.1% for the six months ended August 31, 2020 compared to the same period last year as we implemented certain cost containment measures in connection with the COVID-19 outbreak. We will continue to invest in research and development of new products and technologies to be sold through the U.S. and international sales channels as market conditions improve.

Consolidated selling and marketing expense decreased by $4.1 million or 13.6% for the six months ended August 31, 2020 compared to the same period last year. The decrease was primarily driven by lower tradeshow and related travel and advertising expenses due to the COVID-19 pandemic coupled with lower sales commissions due to the decline in sales volume as described above. We will invest in additional headcounts in sales and marketing as we gain greater visibility into customer demand as the effects of the COVID-19 pandemic diminish.

Consolidated general and administrative expenses decreased by $2.8 million or 9.2% for the six months ended August 31, 2020 compared to the same period last year. The decrease was primarily driven by lower professional fees related to certain non-recurring legal matters and acquisitions in fiscal 2020 and reduced expenses as we further integrate the acquired businesses.

As described in Note 7 to the accompanying condensed consolidated financial statements, during fiscal 2019, we commenced a plan to capture certain synergies and cost savings related to streamlining our global operations and sales organization as well as rationalize certain leased properties that are vacant. We incurred additional charges of $2.5 million for this initiative during the six months ended August 31, 2020, which was primarily personnel related. Restructuring costs are shown separately in the operating expenses in our condensed consolidated statements of comprehensive loss.

Amortization of intangibles decreased by $2.6 million or 41.2% for the six months ended August 31, 2020 compared to the same period last year due to reduced amortization as a result of the intangible assets impairment loss recorded in fiscal 2020 and first quarter of fiscal 2021.

In February 2020, we determined that the prolonged secular decline in revenues from our legacy LoJack US SVR Products coupled with the slower than anticipated market penetration of our telematics solutions in the U.S. automotive dealership channel represented determinate indications of impairment. These factors were further exacerbated by the immediate unfavorable impact that the COVID-19 pandemic has had on the automotive end markets over the past seven months. As a result, we updated our assessment of the carrying amount of goodwill and long-lived assets supporting these products. The total impairment loss we recorded for the six months ended August 31, 2020 was $4.5 million, which was primarily attributable to partial write-offs of intangible assets for LoJack U.S. dealer relationships and goodwill (see Notes 1 and 4 in the accompanying financial statements). Any deterioration in future operating cash flows of this reporting unit may result in further impairment of goodwill and other long-lived assets, including intangible assets.

During the second quarter of fiscal 2021, we sublet one of our office facilities in Texas and vacated the facility entirely. As a result, we recorded an impairment of our operating lease right-of-use assets and other property and equipment of $0.2 million and $0.1 million, respectively. These impairment losses are included within the Impairment loss shown in the operating expenses in our condensed consolidated statements of comprehensive loss.

Non-operating Income (Expense)

Investment income decreased by $2.6 million to $0.7 million for the six months ended August 31, 2020 from $3.3 million for the six months ended August 31, 2019. During the six months ended August 31, 2019, we received dividend income from LoJack Mexico and a gain resulting from fair value adjustment of our previously held interest in LoJack Mexico, which did not reoccur in the current fiscal year.

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Interest expense decreased to $7.9 million for the six months ended August 31, 2020 from $11.0 million for the six months ended August 31, 2019 primarily as the 2020 Convertible Notes matured in May 2020.

Other non-operating income for the six months ended August 31, 2020 was $9 thousand, increased from a loss of $0.2 million for the comparable period of the prior year due to a favorable shift in foreign currency exchange rates.

Overall Profitability Measures

Net Income (Loss):

GAAP-basis net loss in the six months ended August 31, 2020 was $23.9 million as compared to a net loss of $16.1 million in the six months ended August 31, 2019. The $7.8 million increase in the net loss is due to the impairment loss of $4.5 million and $11.2 million decrease in gross profit during the quarter and partially offset by lower operating expenses as described above.

Adjusted EBITDA:

	Six Months Ended August 31,
(In thousands)	2020			2019			$ Change			% Change
Segment
Software & Subscription Services	$	13,927		$	6,321		$	7,606			120.3	%
Telematics Products		1,647			13,204			(11,557	)		(87.5	%)
LoJack U.S. SVR Products		(1,346	)		1,303			(2,649	)		(203.3	%)
Corporate Expenses		(2,318	)		(2,612	)		294			(11.3	%)
Total Adjusted EBITDA	$	11,910		$	18,216		$	(6,306	)		(34.6	%)

Adjusted EBITDA for Software & Subscription Services increased by $7.6 million compared to the same period last year primarily due to higher gross profit and lower operating expenses as we further integrate the acquired businesses. Adjusted EBITDA for Telematics Products and LoJack U.S. SVR Products in the six months ended August 31, 2020 decreased by $11.6 million and $2.6 million compared to the same period last year, respectively. The declines in both segments were primarily due to a decline in revenue resulting from decreased sales volume partially offset by operating expense savings as we implemented certain cost containment measures in connection with the COVID-19 pandemic as described above. Adjusted EBITDA for Corporate Expenses decreased due to lower legal expenses.

See Note 15 for information related to Adjusted EBITDA by reportable segments and a reconciliation to GAAP-basis net income (loss).

Income Tax Provision

We evaluate our estimated annual effective tax rate (“ETR”) on a quarterly basis based on current and forecasted operating results. The relationship between our income tax provision or benefit and our pretax book income or loss can vary significantly from period to period considering, among other factors, the overall level of pretax book income or loss and changes in the blend of jurisdictional income or loss that is taxed at different rates and changes in valuation allowances. Consequently, our ETR may fluctuate significantly period to period and may make quarterly comparisons less than meaningful.

An income tax expense of $0.5 million was recorded for the six months ended August 31, 2020, compared to an income tax benefit of $3.6 million in the same period last year. The $4.1 million increase in tax expense for the six months ended August 31, 2020, compared with the same period in 2019, was primarily driven by a pre-tax loss in the current period which did not result in an income tax benefit due to the recording of a valuation allowance against net deferred tax assets.

LIQUIDITY AND CAPITAL RESOURCES

Consistent with fiscal 2020, our primary recurring cash needs have been for working capital purposes and capital expenditures. We have historically funded our principal business activities through cash flows generated from operations. As we continue to grow our customer base and increase our revenues, there will be a need for working capital in the future. Our immediate sources of liquidity are cash and cash equivalents, and our revolving credit facility. As of August 31, 2020, we have $107.1 million of cash and cash equivalents and $30 million available under our revolving credit facility. Additionally, we expect to continue to finance our operations with cash on hand and cash generated from operations.

On March 30, 2018, we entered into a revolving credit facility with JPMorgan Chase Bank, N.A. that provided for borrowings of up to $50 million. On March 27, 2020, we entered into an amendment of the revolving credit facility to extend the term to March 30, 2022. Borrowings under this revolving credit facility bear interest at either a Prime or LIBOR-based variable rate as selected by us on a periodic basis. This revolving credit facility contains financial covenants that require us to maintain a minimum level of earnings before interest, income taxes, depreciation, amortization and other noncash charges (EBITDA) and minimum debt coverage ratios. In May 2020, we borrowed $20 million under the revolving credit facility.

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We are a defendant in various legal proceedings, including the Omega patent infringement claim, involving intellectual property claims and contract disputes in which the final resolutions have not been determined at this time. In connection with these matters, we may be required to enter into license agreements or other settlement arrangements that require us to make significant payments in the future. While it is not feasible to predict with certainty the outcome of these legal proceedings, based on currently available information, we believe that the ultimate resolution of these matters would not have a material adverse effect on our condensed consolidated results of operations, financial condition and cash flows.

See Note 16, Legal Proceedings, of the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on legal proceedings.

Cash flows from operating activities

Cash flows from operating activities consist of net income (loss) adjusted for certain non-cash items, including depreciation, intangible asset amortization, stock-based compensation expense, amortization of discount and debt issue costs, deferred income taxes, amortization of certain revenue assignment arrangements and the effect of changes in components of working capital.

Our cash flow from operating activities are attributable to our net income (loss) as well as how well we manage our working capital, which is dictated by the volume of products we purchase from our manufacturers or suppliers and then sell to our customers along with the payment and collection terms that we negotiate with them.

We purchase a majority of our products from significant suppliers located in Asia, that generally provide us 60-day payment terms for products purchased. We are currently reliant upon these suppliers for products. Although we believe that we can obtain products from other sources, the loss of a significant supplier could have a material impact on our financial condition and results of operations as the products that are being purchased may not be available on similar terms from another supplier.

Our significant customers are located in the United States and certain foreign countries. We believe that our relationships with our key customers are very good and that these customers are in good financial condition. We generally grant credit to our customers based on their financial viability and our historical collection experience with them. We typically require payment from them within 30 to 60 days of our invoice date with a few exceptions that extend the credit terms up to 90 days.

For the six months ended August 31, 2020, net cash provided by operating activities was $14.1 million and net loss was $23.9 million. Our non-cash expenses, comprised principally of depreciation, intangible asset amortization, stock-based compensation expense, amortization of debt discount and issue costs, and deferred income taxes totaled $32.5 million. These non-cash expenses are partially offset by non-cash revenues of $3.3 million related to the Synovia revenue assignment arrangements. Changes in operating assets and liabilities generated a $8.6 million cash inflow, primarily driven by changes in working capital including an increase in accounts payable and accrued liabilities, decrease in inventories and partially offset by decrease in deferred revenue.  

For the six months ended August 31, 2019, net cash used in operating activities was $0.4 million and net loss was $16.1 million. Our non-cash expenses, comprised principally of depreciation, intangible asset amortization, stock-based compensation expense, amortization of debt discount and issue costs, and deferred income taxes totaled $30.6 million. These non-cash expenses were partially offset by non-cash revenues of $3.1 million related to the Synovia revenue assignment arrangements. Changes in operating assets and liabilities, net of the effects of our acquisitions, resulted in a $11.8 million cash outflow, primarily driven by changes in working capital including a decrease in inventory, and decrease in accounts payable, but partially offset by a decrease in accounts receivable.

Cash flow from investing activities

For the six months ended August 31, 2020 and 2019, our net cash used in investing activities was $7.6 million and $62.2 million, respectively. In each of these periods, our primary investing activities consisted of the purchase and sale of marketable securities in accordance with our corporate investment policy as well as capital expenditures. During the six months ended August 31, 2019, we also acquired Synovia and LoJack Mexico for $48.9 million and $12.7 million, net of cash acquired, respectively.

We expect that we will make additional capital expenditures in the future, including the devices that we lease to customers on the Synovia subscription agreements in order to support the future growth of our business.

Cash flow from financing activities

For the six months ended August 31, 2020 and 2019, our net cash used in financing activities was $8.2 million and $0.7 million, respectively. In each of these periods, we have payments for taxes related to the net share settlement of vested equity awards and the proceeds from the exercise of stock options and contributions to our employee stock purchase plan. During the six months ended August 31, 2020, we repaid our 2020 Convertible Notes of $27.6 million and borrowed $20.0 million from our revolving credit facility.

We continue to monitor the impact of COVID-19 on our operating results and liquidity as the pandemic has had an unfavorable impact on our financial condition and results of operations and we believe the pandemic may continue to have an unfavorable impact going forward. We have implemented certain cost containment and cash flow control measures especially in areas such as personnel, travel and other discretionary spend. As of August 31, 2020, we had cash and cash equivalents of $107.1 million and $30 million available under our existing

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revolving credit facility. Accordingly, we believe that our existing cash and cash equivalents, funds anticipated to be generated from our operations and available borrowing on our revolving credit facility will be sufficient to meet our working capital needs for at least the next 12 months.      

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of the U.S. Securities and Exchange Commission Regulation S-K.

Contractual Cash Obligations

During the second quarter of fiscal 2021, there were no significant changes to our estimates of future payments under our fixed contractual obligations and commitments as presented in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for our fiscal year ended February 29, 2020 as filed with the SEC on May 5, 2020.

FORWARD LOOKING STATEMENTS

Forward looking statements in this Form 10-Q which include, without limitation, statements relating to our plans, strategies, objectives, expectations, intentions, projections and other information regarding future performance, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “may”, “will”, “could”, “plans”, “intends”, “seeks”, “believes”, “anticipates”, “expects”, “estimates”, “judgment”, “goal”, and variations of these words and similar expressions, are intended to identify forward-looking statements. These forward-looking statements reflect our current views with respect to future events and financial performance and are subject to certain risks and uncertainties that are difficult to predict, including, without limitation, product demand, competitive pressures and pricing declines in our markets, the timing of customer approvals of new product designs, intellectual property infringement claims, interruption or failure of our Internet-based systems used to wirelessly configure and communicate with the tracking and monitoring devices that we sell, the phased implementation of our ERP system, the effect of tariffs on exports from China, and other countries, the ongoing effects of the COVID-19 pandemic, and other risks and uncertainties that are set forth in Part I, Item 1A of the Annual Report on Form 10-K for the fiscal year ended February 29, 2020 as filed with the SEC on May 5, 2020. Such risks and uncertainties could cause actual results to differ materially from historical or anticipated results. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Risk

We have international operations, giving rise to exposure to market risks from changes in currency exchange rates. A cumulative foreign currency translation loss of $0.9 million related to our foreign subsidiaries is included in “Accumulated other comprehensive loss” in the Stockholders' Equity section of the condensed consolidated balance sheet at August 31, 2020. The aggregate foreign currency transaction exchange rate income (loss) included in determining loss before income taxes and impairment loss in investment of affiliate were de minimis for six months ended August 31, 2020 and $(0.2) million for the six months ended August 31, 2019, respectively.

As our international operations grow, our risks associated with fluctuation in foreign currency rates will become greater, and we will continue to reassess our approach to managing this risk. In addition, currency fluctuations or a weakening U.S. dollar could increase the costs of our international expansion and operation.

Interest Rate Risk

Our exposure to market rate risk for changes in interest rates relates primarily to our investment portfolio. The primary objective of our investment activities is to preserve principal and liquidity while at the same time maximizing yields without significantly increasing risk. To achieve this objective, we maintain our investment portfolio in a variety of available-for-sale fixed debt securities, including both government and corporate obligations and money market funds. Investments in fixed rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in prevailing interest rates. Due in part to these factors, we may suffer losses in principal if we need the funds prior to maturity and we choose to sell securities that have declined in market value due to changes in interest rates or perceived credit risk related to the securities’ issuers.

As the majority of our investment portfolio has a short-term nature, we do not believe an immediate increase or decrease in interest rate would have a material effect on the fair market value of our portfolio, and therefore, we do not expect our operating results or cash flows to be materially affected by a sudden change in market interest rates.

We do not believe our cash equivalents have significant risk of default or illiquidity. However, we cannot provide absolute assurance that in the future our investments will not be subject to adverse changes in market value. In addition, we maintain significant amounts of cash and cash equivalents at one or more financial institutions that are in excess of federally insured limits. We cannot be assured that we will not experience losses on these deposits.

Loans outstanding under our revolving credit facility bear interest at either euro currency rate plus a margin or the base rate (highest of (i) 0%, (ii) the rate of interest publicly announced by the Agent as its prime rate in effect at its principal office in New York City, (iii) the overnight bank funding rate as determined by the Federal Reserve Bank of New York plus 0.50% and (iv) the LIBOR-based rate for a one-month interest period on such day plus 1%). An applicable margin is added based on the Company’s senior leverage ratio, ranging from 1.50% to 2.00% for base rate loans, and from 2.50% to 3.00% for Eurodollar loans. Changes in interest rate would impact our variable rate borrowings. As of August 31, 2020, outstanding borrowing under our revolving credit facility amounted to $20.0 million which bears interest rate of 2.75%.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our principal executive officer and principal financial officer have concluded, based on their evaluation of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report, that our disclosure controls and procedures are effective to ensure that the information required to be disclosed in reports that are filed or submitted under the Exchange Act is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and that such information is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

Changes in Internal Control Over Financial Reporting

In connection with our initiative to integrate and enhance our global information technology systems and business processes, we initiated the phased implementation of a new ERP system which started in fiscal 2020 and continuing into fiscal 2021. As a result of this implementation, we modified certain existing internal controls over financial reporting as well as implemented new controls and procedures related to the new ERP system. Other than the continued implementation of our ERP system, there were no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d 15(f) under the Exchange Act) that occurred during the second quarter of fiscal 2021 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 16, Legal Proceedings, of the Notes to Unaudited Condensed Consolidated Financial Statements above for information regarding the legal proceedings in which we are involved.

ITEM 1A. RISK FACTORS

The reader is referred to Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended February 29, 2020, as filed with the SEC on May 5, 2020, for a discussion of factors that could materially affect our business, financial condition, results of operations, or future results in addition to the risk factors below:

The Coronavirus (COVID-19) pandemic could have a material adverse impact on our business, results of operations and financial condition.

In December 2019, a novel strain of coronavirus disease (“COVID-19”) was first reported in Wuhan, China. Less than four months later, on March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The outbreak has spread globally, resulting in the implementation of significant governmental measures, including lockdowns, closures, quarantines and travel restrictions, intended to control the spread of the virus. The COVID-19 outbreak has already caused severe global disruptions.

Additionally, we, and other companies, are taking precautions, such as requiring employees to work remotely and imposing travel restrictions. These restrictions, and future prevention and mitigation measures, are likely to have an adverse impact on global economic conditions and consumer confidence and spending, which could materially adversely affect the supply and demand for our products and solutions. Uncertainties regarding the economic impact of COVID-19 is likely to result in sustained market turmoil, which could also negatively impact our business, financial condition and cash flows. For example, as a result of COVID-19, we have experienced lower sales of our LoJack U.S. SVR Products coupled with slower than anticipated market penetration of our telematics solutions in the U.S. automotive dealership channel. Further, this pandemic could negatively affect our ability to sell-through our backlog. Our ability to manage normal commercial relationships with our suppliers, contract manufacturers, and customers may suffer. Our customers could shift purchases to lower-priced or other perceived value offerings during the pandemic-caused economic downturn as a result of various factors, including workforce reductions, reduced access to credit, and changes in federal economic policy. In particular, customers may become more conservative in response to these conditions and seek to reduce their purchases and inventories. Our results of operations depend upon, among other things, our ability to maintain and increase sales volume with our existing customers, our ability to attract new consumers, and the financial condition of our customers. Decreases in demand for our products and solutions without a corresponding decrease in costs would put downward pressure on our margins and would negatively impact our financial results.

Governmental organizations, such as the U.S. Centers for Disease Control and Prevention and state and local governments, have recommended and/or imposed increased community-based interventions, including event cancellations, social distancing measures, and restrictions on gatherings of more than ten people. As discussed, significant government measures, including lockdowns, closures, quarantines and travel restrictions have been implemented and continue to be in effect, and in the future, government authorities may impose similar and/or additional restrictions on people’s movement, public gatherings and businesses. The extent of COVID-19’s effect on our operational and financial performance will depend on future developments, including the duration, spread and intensity of the outbreak, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on our business. However, if the pandemic continues to evolve into a severe worldwide health crisis, the disease could have a material adverse effect on our business, results of operations, financial condition and cash flows and adversely impact the trading price of our common stock.

Repurposing of satellite spectrum by adjacent operators of L-band spectrum for terrestrial services could interfere with our GPS IoT products and services.

In 2011, the U.S. Federal Communications Commission (“FCC”) granted Ligado Networks (then known as Lightsquared) (“Ligado”), a waiver to convert its L-band satellite spectrum to terrestrial use, including a 10 MHz band close to the spectrum that we use for all of our Global Positioning System (“GPS”) products and services. That waiver was subsequently suspended in 2012 due to concerns about potential interference to GPS operations. Ligado sought another waiver in 2015, that it then amended in 2018, to modify its L-band mobile satellite service network with a terrestrial-only proposal designed to address GPS industry-wide concerns. In April 2020, the FCC granted Ligado’s waiver request. We oppose this waiver grant out of concern for the interference that we believe Ligado’s proposed operations would cause to our IoT GPS devices. Ligado’s operations pursuant to the waiver would result in terrestrial use of L-band spectrum and, such operations may interfere with, and harmfully affect, the performance of the Global Navigation Satellite System (“GNSS”) receivers in our IoT GPS devices that operate in the 1559-1610MHz band, which is adjacent to, and within range of, the L-band downlink allocation for GPS operations. Ligado’s L-band terrestrial operations could impact our operations and impose costs on us to retrofit or replace affected GNSS receivers, which could have a material adverse effect on our business, results of operations, and financial condition.

34

We are subject to risks associated with debt financing.

Our revolving credit facility contains, among other things, certain negative and affirmative covenants including financial covenants that require us to maintain a minimum level of earnings before interest, income taxes, depreciation, amortization and other non-cash charges (Adjusted EBITDA) to interest ratio, a minimum senior indebtedness ratio and a total indebtedness coverage ratio, all measured on a quarterly basis. While we have not previously breached and are not currently in breach of these or any other covenants contained in our credit agreement, there can be no guarantee that we will not breach these covenants in the future.

Additionally, our ability to comply with these covenants may be affected by events beyond our control, including the COVID-19 pandemic. A breach of any of these covenants could result in a default under the credit agreement and related credit documents, which could cause all of the outstanding indebtedness under our revolving credit facility to become immediately due and payable. These covenants could also limit our ability to seek capital through the incurrence of new indebtedness or, if we are unable to meet our obligations, require us to repay any outstanding amounts with sources of capital we may otherwise use to fund our business.

ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS

The following table contains information with respect to purchases made by or on behalf of CalAmp or any “affiliated purchaser” (as defined in Rule 10b-18(a) (3) under the Securities Exchange Act of 1934), of our common stock during second quarter ended August 31, 2020:

	Total Number of Shares Purchased (1)		Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that may be Purchased Under the Plans or Programs
June 1 - June 30, 2020		1,161	$	7.81		-	$	-
July 1 - July 31, 2020		32,852	$	7.57		-	$	-
August 1 - August 31, 2020		-	$	-		-	$	-
Total		34,013	$	7.58		-	$	-

(1) The amounts in this column represent shares of our common stock surrendered by employees to the Company, upon vesting of restricted stock, to satisfy tax withholding requirements.

(2) Amounts in this column reflect the weighted average price paid for shares tendered to us in satisfaction of employee tax withholding obligations upon the vesting of restricted stock granted under our stock plan.

35

ITEM 6. EXHIBITS

Exhibit 10.1	Executive Employment Agreement between the Company and Jeffery Gardner, dated July 16, 2020 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K/A dated July 2, 2020).
Exhibit 10.2	Offer Letter, executed on August 21, 2020, by and between the Company and Kirsten Wolberg (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated August 24,2020).
Exhibit 31.1	Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2	Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 .INS	XBRL Instance Document
101 .SCH	XBRL Taxonomy Extension Schema Document
101 .CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101 .LAB	XBRLTaxonomy Extension Label Linkbase Document
101 .PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

36

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CALAMP CORP.
September 24, 2020	/s/ Kurtis Binder
Date	EVP & Chief Financial Officer
	(Principal Financial Officer and Chief Accounting Officer)

37

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) AND RULE 15d-14(a)

OF THE SECURITIES EXCHANGE ACT, AS AMENDED

I, Jeffery Gardner, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CalAmp Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

September 24, 2020	/s/ Jeffery Gardner
Date	Jeffery Gardner
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) AND RULE 15d-14(a)

OF THE SECURITIES EXCHANGE ACT, AS AMENDED

I, Kurtis Binder, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CalAmp Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

September 24, 2020	/s/ Kurtis Binder
Date	Kurtis Binder
	Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CalAmp Corp. (the "Company") on Form 10-Q for the quarter ended August 31, 2020 as filed with the Securities and Exchange Commission (the "Report"), we, Jeffery Gardner, Chief Executive Officer of the Company, and Kurtis Binder, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

(1). The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2). The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jeffery Gardner

Jeffery Gardner

Chief Executive Officer

/s/ Kurtis Binder

Kurtis Binder

Chief Financial Officer

September 24, 2020

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Aug. 31, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS

Other intangible assets consist of the following (in thousands):

		Gross										Accumulated Amortization						Net
	Useful Life	Feb. 29, 2020		Additions & Adjustments, net (1)			Impair- ment			Aug. 31, 2020		Feb. 29, 2020		Expense		Aug. 31, 2020		Feb. 29, 2020		Aug. 31, 2020
Developed technology	2-7 years	$	27,363		56			—		$	27,419	$	21,437	$	1,511	$	22,948	$	5,926	$	4,471
Tradenames	10 years		30,093		81			—			30,174		16,303		1,059		17,362		13,790		12,812
Customer lists	4-7 years		25,304		—			—			25,304		22,903		48		22,951		2,401		2,353
Dealer and customer relationships	7-12 years		34,139		(527	)		(365	)		33,247		10,753		1,098		11,851		23,386		21,396
Patents	5 years		589		—			—			589		197		20		217		392		372
		$	117,488	$	(390	)	$	(365	)	$	116,733	$	71,593	$	3,736	$	75,329	$	45,895	$	41,404

(1) Amounts also include any net changes in intangible asset balances for the periods presented that resulted from foreign currency translations.

Intangible assets with finite lives are amortized on a straight-line basis over the expected period to be benefited by future cash flows. We monitor and assess these assets for impairment on a periodic basis. Our assessment includes various new product lines and services, which leverage the existing intangible assets as well as consideration of historical and projected revenues and cash flows. In the first quarter of fiscal 2021, we determined that the prolonged secular decline in legacy LoJack U.S. SVR products revenue coupled with the slower than anticipated market penetration of our telematics solutions in the U.S. automotive dealership channel represented determinate indications of impairment. As a result, we performed an assessment of the carrying amount of the related intangible assets supporting these products. Our assessment of the future cash flows generated by these assets concluded that an impairment loss was present. We recorded an impairment loss of $0.4 million for U.S. dealer relationships during the first quarter of fiscal 2021. For the three months ended August 31, 2020, we continued our assessment of these conditions and concluded no further impairment was required.

Estimated future amortization expense as of August 31, 2020 is as follows (in thousands):

2021 (remainder)	$	3,895
2022		5,830
2023		5,610
2024		4,498
2025		4,374
Thereafter		17,197
	$	41,404

Changes in goodwill are as follows (in thousands):

	Software & Subscription Services			Telematics Products		LoJack U.S. SVR Products			Total
Balance as of February 29, 2020	$	55,132		$	39,180	$	12,023		$	106,335
Impairment loss		—			—		(3,924	)		(3,924	)
Effect of exchange rate change on goodwill		(249	)		—		—			(249	)
Balance as of August 31, 2020	$	54,883		$	39,180	$	8,099		$	102,162

There was no impairment of goodwill as of February 29, 2020. As the COVID-19 pandemic continues to impact the market and our business operations during the first quarter of fiscal 2021, we reevaluated the recoverability of the carrying amount of long-lived assets,

including goodwill. Based upon our assessment of economic conditions, our expectations of future business conditions and trends, our projected revenues, earnings, and cash flows, we determined that goodwill utilized in our LoJack U.S. SVR reporting unit was impaired and recorded an impairment loss of $3.9 million as of May 31, 2020. For the three months ended August 31, 2020, we continued our assessment of these conditions and concluded no further impairment was required. Any deterioration in future operating cash flows of this reporting unit may result in further impairment of goodwill and other long-lived assets, including intangible assets

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OTHER ASSETS

6 Months Ended

Aug. 31, 2020

Other Assets Noncurrent Disclosure [Abstract]

OTHER ASSETS

NOTE 5 – OTHER ASSETS

Other assets consist of the following (in thousands):

	August 31,		February 29,
	2020		2020
Deferred cost	$	6,114	$	7,818
Deferred compensation plan assets		6,494		6,041
Lease receivables, non-current		7,830		5,992
Prepaid commissions		2,191		2,318
Other		2,403		2,599
	$	25,032	$	24,768

We have a non-qualified deferred compensation plan in which certain members of management and all non-employee directors are eligible to participate. Participants may defer a portion of their compensation until retirement or another date specified by them in accordance with the plan. We are funding the plan obligations through cash deposits to a Rabbi Trust that are invested in various equities, bond, money market mutual funds and COLI in generally the same proportion as investment elections made by the participants. The deferred compensation plan liability is included in other non-current liabilities in the accompanying consolidated balance sheets.

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FINANCING ARRANGEMENTS

6 Months Ended

Aug. 31, 2020

Debt Disclosure [Abstract]

FINANCING ARRANGEMENTS

NOTE 6 – FINANCING ARRANGEMENTS

The following table provides a summary of our debt as of August 31, 2020 and February 29, 2020 (in thousands):

	Maturity	Effective			August 31,			February 29,
	Date	Interest Rate			2020			2020
2020 Convertible Notes, 1.625% fixed rate	May 15, 2020		6.20	%	$	-		$	27,599
2025 Convertible Notes, 2.00% fixed rate	August 1, 2025		7.56	%		230,000			230,000
Revolving Credit Facility	March 30, 2022		3.50	%		20,000			-
Due to factors	2020 - 2024		4.70	%		12,627			14,371
Total term debt						262,627			271,970
Unamortized discount and issuance costs						(58,161	)		(61,763	)
Less: Current portion of long-term term debt						(5,184	)		(33,119	)
Long-term debt, net of current portion					$	199,282		$	177,088

The effective interest rates for the convertible notes include the interest on the notes and amortization of the discount. As of August 31, 2020 and February 29, 2020, the fair value of the 2025 Convertible Notes was $191 million and $197 million, respectively, based on Level 2 inputs.

2025 Convertible Notes

In July 2018, we issued debt of $230.0 million aggregate principal amount of convertible senior unsecured notes due in 2025 (“2025 Convertible Notes”). These notes require semi-annual interest payments at a rate of 2.00% until maturity, conversion, redemption or repurchase, which will be no later than August 1, 2025. We may redeem the notes at our option at any time on or after August 6, 2022 at a cash redemption price equal to the principal amount plus accrued interest, but only if the last reported sale price per share of our stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice. The 2025 Convertible Notes are convertible into cash, shares of our common stock or a combination of both, at our election, based on an initial conversion price of $30.7450. Holders may convert their 2025 Convertible Notes at their option upon the occurrence of certain events, as defined in the 2025 Indenture. Approximately $51.9 million, net of tax, was allocated to additional paid-in capital upon issuance of these notes.

In July 2018, in connection with the 2025 Convertible Notes, we entered into capped call transactions with certain option counterparties who were initial purchasers of the 2025 Convertible Notes. The capped call transactions are expected to reduce the potential dilution of earnings per share upon conversion of the 2025 Convertible Notes. Under the capped call transactions, we purchased options relating to 7.48 million shares of common stock underlying the notes, with a strike price equal to the conversion price of the notes and with a cap price equal to $41.3875. We paid $21.2 million for the note hedges and as a result, approximately $15.9 million, net of tax, was recorded as a reduction to additional paid-in capital within stockholders’ equity.

2020 Convertible Notes

On May 15, 2020, we repaid the remaining principal balance of $27.6 million of the 1.625% convertible senior unsecured notes issued in May 2015.

Revolving Credit Facility

On March 30, 2018, we entered into a revolving credit facility with JP Morgan Chase Bank, N.A. that provides for borrowings up to $50.0 million. This revolving credit facility was extended on March 27, 2020 with a new maturity date of March 30, 2022. At our election, the borrowings under this revolving credit facility bear interest at (a) for base rate loans, a base rate based on the highest of (i) 0%, (ii) the rate of interest publicly announced by JP Morgan Chase Bank, N.A. (the “Agent”) as its prime rate in effect at its principal office in New York City, (iii) the overnight bank funding rate as determined by the Federal Reserve Bank of New York plus 0.50% and (iv) the LIBOR-based rate for a one-month interest period on such day plus 1%; or (b) for Eurodollar loans, the higher of (x) 1.00% and (y) the LIBOR-based rate for one, three or six months (as selected by the Company) for Eurodollar deposits. An applicable margin is added based on the Company’s senior leverage ratio, ranging from 1.50% to 2.00% for base rate loans, and from 2.50% to 3.00% for Eurodollar loans. We will also pay a commitment fee based on our senior leverage ratio ranging from 0.40% to 0.50%, payable quarterly in arrears, on the average daily unused amount of the Credit Facility. Amounts owing under the credit agreement and related credit documents are guaranteed by the Company and certain of its subsidiaries. We have also granted security interests in substantially all of our respective assets to secure these obligations. The net proceeds available under the revolving credit facility can be used for repayment of existing debt, working capital and general corporate purposes. There were $20.0 million in borrowings outstanding under this revolving credit facility at August 31, 2020.

The revolving credit facility contains certain negative and affirmative covenants including financial covenants that require us to maintain a minimum level of earnings before interest, income taxes, depreciation, amortization and other non-cash charges (Adjusted EBITDA) to interest ratio, a minimum senior indebtedness ratio and a total indebtedness coverage ratio, all measured on a quarterly basis. As of August 31, 2020, we were in compliance with our covenants under the revolving credit facility.

Synovia Revenue Assignments

In conjunction with the acquisition of Synovia on April 12, 2019, we assumed the rights and obligations under certain revenue assignment arrangements with several financial institutions (the “Factors”). Pursuant to the terms of the arrangements, Synovia sold to the Factors rights to all future revenues of certain subscription contracts on a non-recourse basis for credit approved accounts.

These arrangements with the Factors met the criteria in ASC 470-10-25, Sales of Future Revenues or Various Other Measures of Income, which relates to cash received from an investor in exchange for a specified percentage or amount of revenue or other measure of income of a particular product line, business segment, trademark, patent, or contractual right for a defined period. Under this guidance, the arrangement qualified as a debt instrument for accounting purposes due to Synovia’s significant continuing involvement in the generation of cash flows due to the Factors. Further, under ASC 805, Business Combination, we recorded the amounts due to the Factors as a debt obligation at fair value in the opening balance sheet. The fair value of this debt of $19.7 million was determined using a pre-tax cost of debt of 4.7% at the time of our acquisition of Synovia. The discount of $1.5 million is being amortized under the interest method. During the three months ended August 31, 2020 and 2019, we recognized $0.1 million and $0.2 million of interest expense related to this debt, respectively. During both the six months ended August 31, 2020 and 2019, we recognized $0.3 million of interest expense related to this debt. The revenues recognized from this arrangement of $3.3 million and $3.1 million were considered a non-cash activity in our condensed consolidated statements of cash flows for the six months ended August 31, 2020 and 2019, respectively.

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RESTRUCTURING CHARGES

6 Months Ended

Aug. 31, 2020

Restructuring And Related Activities [Abstract]

RESTRUCTURING CHARGES

NOTE 7 – RESTRUCTURING CHARGES

Beginning in fiscal 2019, we commenced a plan to capture certain synergies and cost savings related to streamlining our global operations and sales organization, as well as rationalize certain leased properties that are not fully occupied. Our plan is aligned with our strategy to integrate the global sales organization and further outsource manufacturing functions in order to drive operational efficiency, increase supplier geographic diversity, and reduce operating expenses. To date, total restructuring charges were $14.9 million, comprised of $9.1 million in severance and employee related costs, and $5.8 million for vacant office and manufacturing facility space. Restructuring charges related to vacant office and manufacturing facility space were due primarily to the vacancy in Canton, Massachusetts of $3.3 million, which was sub-leased starting in May 2020. The anticipated rent payments for the ceased-use leased facilities will be made through December 2025. Substantially all charges related to severance and employee costs were under the Telematics Products and LoJack U.S. SVR Products reportable segments. As a result of the adoption of ASC 842, effective March 1, 2019, the balance of the restructuring liability related to certain facility leases has been reclassified as a reduction of the Operating lease right-of-use assets in our condensed consolidated balance sheet.

For the three and six months ended August 31, 2020, total restructuring charges were $0.6 million and $2.5 million, respectively. Total restructuring charges incurred to date in fiscal 2021 were comprised of $2.3 million in severance and employee related costs, which included $0.9 million stock-based compensation, and $0.2 million for vacant facilities. The restructuring liabilities related to personnel were included in Accrued payroll and employee benefits in our condensed consolidated balance sheets as of August 31, 2020 and February 29, 2020.

The following table summarizes the charges resulting from the implementation of the restructuring plan (in thousands):

	Three months ended August 31, 2020						Three months ended August 31, 2019
	Personnel		Facilities		Total		Personnel		Facilities		Total
Cost of revenue	$	397	$	71	$	468	$	349	$	1,210	$	1,559
Selling and marketing		-		-		-		447		-		447
General and administrative		83		-		83		266		-		266
Total	$	480	$	71	$	551	$	1,062	$	1,210	$	2,272

	Six months ended August 31, 2020						Six months ended August 31, 2019
	Personnel		Facilities		Total		Personnel		Facilities		Total
Cost of revenue	$	273	$	174	$	447	$	349	$	1,210	$	1,559
Selling and marketing		30		-		30		447		-		447
General and administrative		1,982		-		1,982		266		-		266
Total	$	2,285	$	174	$	2,459	$	1,062	$	1,210	$	2,272

The following table summarizes the activity resulting from the implementation of the restructuring plan within other current and non-current liabilities (in thousands):

	Personnel			Facilities			Total
Restructuring liabilities as of February 29, 2020	$	2,383		$	359		$	2,742
Charges		2,285			174			2,459
Payments		(1,848	)		(448	)		(2,296	)
Restructuring liabilities as of August 31, 2020	$	2,820		$	85		$	2,905

XML

LEASES

6 Months Ended

Aug. 31, 2020

Leases [Abstract]

LEASES

NOTE 8 – LEASES

We have various non-cancelable operating leases for our offices in California, Texas, Massachusetts, Indiana, Minnesota and Virginia in the United States, and Italy, Mexico and the United Kingdom. We also have various non-cancelable operating leases for towers and vehicles throughout the United States, Italy and Mexico. These leases expire at various times through 2028. Certain lease agreements contain renewal options, rent abatement, and escalation clauses that are factored into our determination of lease payments when appropriate.

During the second quarter of fiscal 2021, we sublet one of our office facilities in Texas and vacated the facility entirely. As a result, we recorded an impairment of our operating lease right-of-use assets and other property and equipment of $0.2 million and $0.1 million, respectively. These impairment losses are included within the total Impairment loss shown in the operating expenses in our condensed consolidated statements of comprehensive loss.

The table below presents lease-related assets and liabilities recorded on the condensed consolidated balance sheet (in thousands):

	Classification	August 31, 2020
Assets
Operating lease right-of-use assets	Operating lease right-of-use assets	$	23,428
Liabilities
Operating lease liabilities (current)	Other current liabilities	$	6,201
Operating lease liabilities (noncurrent)	Operating lease liabilities		25,225
Total lease liabilities		$	31,426

Lease Costs

The following lease costs were included in our condensed consolidated statements of comprehensive loss as follows (in thousands):

	For the Three Months Ended August 31,				For the Six Months Ended August 31,
	2020		2019		2020		2019
Operating lease cost	$	1,837	$	1,972	$	3,426	$	3,973
Short-term lease cost		82		252		163		564
Variable lease cost		114		43		228		73
Total lease cost	$	2,033	$	2,267	$	3,817	$	4,610

Supplemental Information

The table below presents supplemental information related to operating leases during the six months ended August 31, 2020 (in thousands, except weighted-average information):

Cash paid for amounts included in the measurement of operating lease liabilities	$	3,605
Right-of-use assets obtained in exchange for new operating lease liabilities	$	5,425
Weighted average remaining lease term	6.48
Weighted average discount rate		5.17	%

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of August 31, 2020 (in thousands):

Remainder of 2021	$	4,348
2022		7,106
2023		6,588
2024		4,891
2025		3,113
Thereafter		10,057
Total minimum lease payments		36,103
Less imputed interest		(4,677	)
Present value of future minimum lease payments		31,426
Less current obligations under leases		(6,201	)
Long-term lease obligations	$	25,225

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INCOME TAXES

6 Months Ended

Aug. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 9 - INCOME TAXES

We use the assets and liabilities method when accounting for income taxes. Under this method, deferred income tax asset and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We evaluate our estimated annual effective tax rate (“ETR”) on a quarterly basis based on current and forecasted operating results. The relationship between our income tax provision or benefit and our pretax book income or loss can vary significantly from period to period considering, among other factors, the overall level of pretax book income or loss and changes in the blend of jurisdictional income or loss that is taxed at different rates and changes in valuation allowances. The income tax expense of $0.3 million and $0.5 million for the three and six months ended August 31, 2020, respectively, was primarily attributable to one of our foreign subsidiaries. The income tax benefit associated with the pre-tax loss for the quarter ended August 31, 2020, which was primarily from the U.S. jurisdiction, was offset by a full valuation allowance.

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EARNINGS PER SHARE

6 Months Ended

Aug. 31, 2020

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 10 - EARNINGS PER SHARE

Basic earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income for the period by the weighted average

number of common shares outstanding during the period plus the dilutive effect of outstanding stock options and restricted stock-based awards using the treasury stock method.

The calculation of the basic and diluted loss per share of common stock is as follows (in thousands, except per share value):

	Three Months Ended						Six Months Ended
	August 31,						August 31,
	2020			2019			2020			2019
Net loss	$	(9,478	)	$	(7,369	)	$	(23,900	)	$	(16,062	)
Basic and diluted weighted average number of common shares outstanding		34,256			33,568			34,140			33,475
Loss per share:
Basic	$	(0.28	)	$	(0.22	)	$	(0.70	)	$	(0.48	)
Diluted	$	(0.28	)	$	(0.22	)	$	(0.70	)	$	(0.48	)

All outstanding options and restricted stock units for the three and six months ended August 31, 2020 and 2019 were excluded from the computation of diluted earnings per share because we reported a net loss for each of these periods and the effect of inclusion would be antidilutive.

We have the option to pay cash, issue shares of common stock or any combination thereof for the aggregate amount due upon conversion of the 2025 Convertible Notes. It is our intent to settle the principal amount of these notes with cash, and therefore, we use the treasury stock method for calculating any potential dilutive effect of the conversion option on diluted earnings (loss) per share. From the time of the issuance of the notes, the average market price of our common stock has been less than the initial conversion price of the notes, and consequently no shares have been included in diluted earnings per share for the conversion value of the notes.

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STOCKHOLDERS' EQUITY

6 Months Ended

Aug. 31, 2020

Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 11 – STOCKHOLDERS’ EQUITY

Stock-based compensation expense is included in the following captions of the condensed consolidated statements of comprehensive loss (in thousands):

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Cost of revenues	$	203	$	162	$	378	$	337
Research and development		723		633		1,369		1,046
Selling and marketing		760		982		1,265		1,651
General and administrative		1,160		1,406		2,582		2,692
Restructuring		-		-		875		-
	$	2,846	$	3,183	$	6,469	$	5,726

Changes in our outstanding stock options during the six months ended August 31, 2020 were as follows (options in thousands):

	Number of Options			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
Outstanding at February 29, 2020		1,071		$	14.65		6.2
Granted		—			—
Exercised		(70	)		4.03
Forfeited or expired		(152	)		17.52
Outstanding at August 31, 2020		849		$	15.02		6.0	$	309
Exercisable at August 31, 2020		578		$	14.37		5.1	$	309

Changes in our outstanding restricted stock shares, performance stock units (“PSUs”) and restricted stock units (“RSUs”) during the six months ended August 31, 2020 were as follows (restricted shares, PSUs and RSUs in thousands):

	Number of Restricted Shares, PSUs and RSUs			Weighted Average Grant Date Fair Value		Shares Retained to Cover Statutory Minimum Withholding Taxes
Outstanding at February 29, 2020		2,215		$	14.47
Granted		1,778			7.86
Vested		(611	)		14.97		199
Forfeited		(152	)		13.46
Outstanding at August 31, 2020		3,230		$	10.78

As of August 31, 2020, there was $29.5 million of total unrecognized stock-based compensation cost related to outstanding nonvested equity awards that is expected to be recognized as an expense over a weighted-average remaining vesting period of 3.7 years.

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CONCENTRATION OF RISK

6 Months Ended

Aug. 31, 2020

Risks And Uncertainties [Abstract]

CONCENTRATION OF RISK

NOTE 12 - CONCENTRATION OF RISK

Significant Customers

We sell telematics products and services to large global enterprises in the industrial equipment, transportation and automotive market verticals. One customer in the heavy equipment industry accounted for 16% and 15% of our consolidated revenue for the three and six months ended August 31, 2020, respectively, and 10% and 12% of our consolidated revenue for the three and six months ended August 31, 2019, respectively. The same customer accounted for 16% and 19% of our consolidated accounts receivable at August 31, 2020 and February 29, 2020, respectively.

Significant Suppliers

We purchase a significant amount of our inventory from certain manufacturers or suppliers including components, assemblies and electronic manufacturing parts. These suppliers are located in Asia, including China. The inventory is purchased under standard supply agreements that outline the terms of the product delivery. The title and risk of loss of the product generally pass to us upon shipment from the manufacturers’ plant or warehouse. For the three and six months ended August 31, 2020, four of our suppliers accounted for approximately 54% and 58% of our total inventory purchases, respectively. For the three and six months ended August 31, 2019, three of our suppliers accounted for approximately 51% and 48% of total inventory purchases, respectively. As identified below, some of these manufacturers accounted for more than 10% of our accounts payable as follows (rounded):

	August 31,			February 29,
	2020			2020
Accounts payable:
Supplier A		14	%		11	%
Supplier B		9	%		11	%

We are currently reliant upon these suppliers for products. Although we believe that we can obtain products from other sources, the loss of a significant supplier could have a material impact on our financial condition and results of operations as the products that are being purchased may not be available on similar terms from another supplier.

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PRODUCT WARRANTIES

6 Months Ended

Aug. 31, 2020

Product Warranties Disclosures [Abstract]

PRODUCT WARRANTIES

NOTE 13 - PRODUCT WARRANTIES

All products have a one- or two-year limited warranty against manufacturing defects and workmanship. We estimate the future costs relating to product returns subject to our warranty and record a reserve upon shipment of our products. We periodically adjust our estimate for actual warranty claims and historical claims experience as well as the impact of known product operational issues. During the three months ended August 31, 2020, we recorded $1.4 million in the resolution of a product performance matter with a customer. The warranty reserve is included in Other Current Liabilities in the condensed consolidated balance sheets. Activity in the accrued warranty costs liability is as follows (in thousands):

	Six Months Ended
	August 31,
	2020			2019
Balance at beginning of period	$	987		$	1,399
Charged to costs and expenses		1,995			1,100
Deductions		(518	)		(700	)
Balance at end of period	$	2,464		$	1,799

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Document and Entity Information - shares	6 Months Ended
	Aug. 31, 2020	Sep. 22, 2020
Cover [Abstract]
Entity Registrant Name	CalAmp Corp.
Entity Central Index Key	0000730255
Entity Filer Category	Accelerated Filer
Trading Symbol	CAMP
Current Fiscal Year End Date	--02-28
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Aug. 31, 2020
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021
Entity File Number	0-12182
Entity Tax Identification Number	95-3647070
Entity Address, Address Line One	15635 Alton Parkway
Entity Address, Address Line Two	Suite 250
Entity Address, City or Town	Irvine
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92618
City Area Code	(949)
Local Phone Number	600-5600
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		35,019,923
Entity Incorporation, State or Country Code	DE
Security Exchange Name	NASDAQ
Title of 12(b) Security	Common stock, $0.01 per share
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

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OTHER FINANCIAL INFORMATION

6 Months Ended

Aug. 31, 2020

Other Financial Information [Abstract]

OTHER FINANCIAL INFORMATION

NOTE 14 – OTHER FINANCIAL INFORMATION

Supplemental Balance Sheet Information

Other current liabilities consist of the following (in thousands):

	August 31,		February 29,
	2020		2020
Operating lease liabilities	$	6,201	$	4,662
Taxes payable		2,476		2,266
Warranty reserves		2,464		987
Customer deposit		2,331		1,377
Litigation reserve		2,200		1,500
Interest payable		365		481
Other (1)		4,982		4,880
	$	21,019	$	16,153

(1) Amount represents accruals for various operating expense such as professional fees, vendor incentives and other estimates that are expected to be paid within the next 12 months

Other non-current liabilities consist of the following (in thousands):

	August 31,		February 29,
	2020		2020
Deferred revenue	$	25,104	$	27,452
Deferred compensation plan liability		6,542		5,919
Other		3,384		1,673
	$	35,030	$	35,044

Supplemental Statement of Comprehensive Loss Information

Interest expense consists of the following (in thousands):

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Interest expense on 2020 Convertible Notes:
Stated interest at 1.625% per annum	$	-	$	498	$	93	$	996
Amortization of discount and issue costs		-		1,495		289		2,951
		-		1,993		382		3,947
Interest expense on 2025 Convertible Notes:
Stated interest at 2.00% per annum		1,150		1,150		2,313		2,326
Amortization of discount and issue costs		2,329		2,160		4,640		4,328
		3,479		3,310		6,953		6,654
Other interest expense		378		252		599		410
Total interest expense	$	3,857	$	5,555	$	7,934	$	11,011

Supplemental Cash Flow Information

“Net cash provided by operating activities” includes cash payments for interest expense and income taxes as follows (in thousands):

	Six Months Ended
	August 31,
	2020		2019
Cash payments for interest and income taxes:
Interest expense paid	$	2,780	$	3,358
Income tax paid, net of refunds	$	447	$	466

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SEGMENT INFORMATION AND GEOGRAPHIC DATA

6 Months Ended

Aug. 31, 2020

Segment Reporting [Abstract]

SEGMENT INFORMATION AND GEOGRAPHIC DATA

NOTE 15 - SEGMENT INFORMATION AND GEOGRAPHIC DATA

Prior to the fourth quarter of fiscal 2020, our two reportable segments, Software & Subscription Services and Telematics Systems, also represented our two reporting units for goodwill impairment testing. During the fourth quarter of fiscal 2020, our former CODM changed our reporting structure, resulting in four reporting units with two reporting units under each of our reportable segments. During the first quarter of fiscal 2021, our President and Chief Executive Officer, who is our current CODM, realigned our operational structure into three reportable segments: Software & Subscriptions Services, Telematics Products and LoJack U.S. SVR Products. We have recast certain prior period amounts to conform to the way our CODM regularly reviews segment performance.

Our 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. Software & Subscription Services segment revenues include SaaS, professional services, devices sold with monitoring services, accessories, and amortization of deferred revenue 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, as well as third-party software and service solutions worldwide and are critical for applications demanding secure, reliable and business-critical communications. Telematics Product segment revenues consist primarily of stand-alone product sales.

Our LoJack U.S. SVR Product segment represents the portfolio of security and protection products and services for tracking and recovering cars, trucks and other valuable mobile assets. LoJack U.S. SVR Product segment revenues consist primarily of stand-alone product sales.

Segment information is as follows (in thousands):

	Three Months Ended August 31, 2020															Three Months Ended August 31, 2019
	Reportable Segments															Reportable Segments
	Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total			Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total
Revenues	$	33,696		$	40,732		$	9,109					$	83,537		$	31,205		$	48,934		$	13,097					$	93,236
Gross profit	$	16,502		$	10,961		$	3,347					$	30,810		$	13,360		$	18,184		$	6,126					$	37,670
Gross margin		49	%		27	%		37	%					37	%		43	%		37	%		47	%					40	%
Adjusted EBITDA	$	7,573		$	(1,476	)	$	227		$	(921	)	$	5,403		$	3,947		$	5,341		$	2,173		$	(814	)	$	10,647

	Six Months Ended August 31, 2020															Six Months Ended August 31, 2019
	Operating Segments															Operating Segments
	Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total			Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total
Revenues	$	61,725		$	86,271		$	15,756					$	163,752		$	56,716		$	100,132		$	25,458					$	182,306
Gross profit	$	30,317		$	26,081		$	5,465					$	61,863		$	23,760		$	38,228		$	11,093					$	73,081
Gross margin		49	%		30	%		35	%					38	%		42	%		38	%		44	%					40	%
Adjusted EBITDA	$	13,927		$	1,647		$	(1,346	)	$	(2,318	)	$	11,910		$	6,321		$	13,204		$	1,303		$	(2,612	)	$	18,216

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 reportable 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,
	2020			2019			2020			2019
Net loss	$	(9,478	)	$	(7,369	)	$	(23,900	)	$	(16,062	)
Investment income		(680	)		(1,256	)		(698	)		(3,337	)
Interest expense		3,857			5,555			7,934			11,011
Income tax provision (benefit)		266			(1,342	)		506			(3,599	)
Depreciation		5,073			5,191			9,983			9,036
Amortization of intangible assets		1,844			3,318			3,736			6,358
Stock-based compensation		2,846			3,183			5,594			5,726
Impairment loss		286			—			4,575			—
Restructuring charges		551			2,272			2,459			2,272
Non-recurring legal expenses		170			777			963			4,584
Acquisition and integration related expenses		—			46			—			1,190
Other		668			272			758			1,037
Adjusted EBITDA	$	5,403		$	10,647		$	11,910		$	18,216

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				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
United States	$	58,945	$	68,684	$	110,495	$	131,806
Europe, Middle East and Africa		15,537		13,298		31,443		26,724
South America		5,687		5,447		11,729		10,975
Asia and Pacific Rim		1,704		1,940		4,043		4,349
All other		1,664		3,867		6,042		8,452
	$	83,537	$	93,236	$	163,752	$	182,306

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, 2020 and 2019.

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LEGAL PROCEEDINGS

6 Months Ended

Aug. 31, 2020

Commitments And Contingencies Disclosure [Abstract]

LEGAL PROCEEDINGS

NOTE 16 – LEGAL PROCEEDINGS

Omega patent infringement claim

On May 5, 2020, we filed our Form 10-K for the fiscal year ended February 29, 2020 which disclosed the current status of the Omega patent infringement claim. In summary, on March 20, 2020, the U.S. District Court for the Middle District of Florida (the “Trial Court”) denied our motion for judgement as a matter of law (“JMOL”), a new trial, and remittitur of damages. Also, on March 20, 2020, the Trial Court denied Omega’s motion for a new trial on willfulness. On April 1, 2020, the Trial Court denied Omega’s motion to enhance the royalty rate beyond the jury’s award of $5 per unit and motion to conduct post-trial discovery on CalAmp’s other OBD-II compliant LMUs. On April 3, 2020, the Trial Court denied Omega’s final motion regarding infringement of the VPODs. On April 30, 2020, we filed a notice of appeal at the Federal Circuit. Also on April 30, 2020, Omega filed notices of cross-appeal at the Federal Circuit.

We also initiated ex parte reexamination proceedings filed in the U.S. Patent and Trademark Office seeking to invalidate a number of Omega’s patents involved in the litigation. Those proceedings currently remain pending. We continue to believe that our products do not infringe on any of Omega’s patents.

In connection with this claim, we have accrued our best estimate of the probable liability based on reasonable royalty rates for similar technologies.

Other matters

In addition to the foregoing matters, from time to time as a normal consequence of doing business, various claims and litigation may be asserted or commenced against us. In particular, we may receive claims concerning contract performance or claims that our products or services infringe the intellectual property of third parties which are in the ordinary course of business. While the outcome of any such claims or litigation cannot be predicted with certainty, management does not believe that the outcome of such matters existing at the present time would have a material adverse effect on our condensed consolidated results of operations, financial condition or cash flows.

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Aug. 31, 2020

Accounting Policies [Abstract]

Description of Business

Description of Business

CalAmp Corp. (referred to herein as “CalAmp”, “the Company”, “we”, “our”, or “us”) is a global technology solutions pioneer leading transformation to a mobile connected economy. We help reinvent businesses and improve lives around the globe with technology solutions that streamline complex mobile Internet of Things (“IoT”) deployments through wireless connectivity solutions and derived data intelligence. Our software applications, scalable cloud services, and intelligent devices collect and assess business-critical data anywhere in the world from industrial machines, commercial and passenger vehicles, their drivers and contents. We are a global organization that is headquartered in Irvine, California.

Historically, we had two reportable segments, Software & Subscription Services and Telematics Systems. During the first quarter of fiscal 2021, our President and Chief Executive Officer (the “CEO”), who is our current Chief Operating Decision Maker (“CODM”), realigned our operational structure into three reportable segments: Software & Subscriptions Services, Telematics Products and LoJack U.S. SVR Products. We have recast certain prior period amounts to conform to the way our CODM regularly reviews segment performance. 

In March 2020, the World Health Organization declared the spread of COVID-19 as a pandemic. The full impact of the COVID-19 outbreak remains uncertain as of the time of this report given the diversity of rules and regulations in the U.S. and other countries in which we operate. The pandemic has resulted in travel restrictions, prohibitions of non-essential activities, disruption and shutdown of businesses and greater uncertainty in global financial markets. During the three months ended August 31, 2020, there was an increase in the number of installations as U.S. auto dealerships and school districts reopened from government-imposed pandemic shutdowns, which resulted in a sequential increase in our revenue since first quarter of fiscal 2021. The effect of the outbreak may continue to impact our operating results depending on the severity of the pandemic and the actions taken or to be taken by governments and private businesses in relation to its containment. We cannot predict the extent to which the COVID-19 outbreak will negatively impact our business or operating results at this time.

We have considered all known and reasonably available information that existed as of August 31, 2020, in making accounting judgments, estimates and disclosures. We are monitoring the potential effects of the health care related and economic conditions of COVID-19 in assessing certain matters including (but not limited to) supply chain disruptions, decreases in customer demand for our products and services, potential longer-term effects on our customer and distribution channels particularly in the U.S. and relevant end markets as well as other developments. If the impact results in longer-term closures of businesses and economic recessionary conditions, we may recognize additional material asset impairments, charges for uncollectible accounts receivable in future periods and incur additional restructuring charges.

Certain notes and other information included in the audited financial statements in our Annual Report on Form 10-K for the fiscal year ended February 29, 2020 are condensed in or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with our 2020 Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission (“SEC”) on May 5, 2020.

In the opinion of our management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary to present fairly our financial position at August 31, 2020 and our results of operations for the three and six months ended August 31, 2020 and 2019. The results of operations for such periods are not necessarily indicative of results to be expected for the full fiscal year ending February 28, 2021.

All intercompany transactions and accounts have been eliminated in consolidation.

Revenue Recognition

Revenue Recognition

We recognize revenue as follows:

Products. We recognize revenue from product and accessories sales upon transfer of control of promised products to customers in an amount that reflects the transaction price, which is generally the stand-alone selling prices of the promised goods. For product shipments made on the basis of “FOB Destination” terms, revenue is recorded when the products reach the customer. Customers generally do not have a right of return except for defective products returned during the warranty period. We record estimated commitments related to customer incentive programs as reductions of revenues.

Software-as-a-Service (“SaaS”). We recognize our SaaS revenues and related cost of revenues in our Application subscriptions and other service revenues and cost of revenues on SaaS arrangements that combine various hardware devices over a stipulated service period.

Our integrated SaaS-based solutions for our fleet management, vehicle finance (which we are exiting) and certain other verticals provide customers with the ability to wirelessly communicate with monitoring devices installed in vehicles and other mobile or remote assets through our software applications. The transaction price for a typical SaaS arrangement includes the price for the customized device, installation and application subscriptions. We have applied our judgment in determining that these integrated arrangements typically represent single performance obligations satisfied over time.

Accordingly, we defer the recognition of revenue for the customized devices that only function with our applications and are sold only on an integrated basis with our proprietary applicable subscriptions. Such customized devices and the application services are not sold separately. In such circumstances, the associated device related costs are recorded as deferred costs on the balance sheet. Generally, these service arrangements do not provide the customer with the right to take possession of the software supporting the subscription service at any time. Revenues from subscription services are recognized ratably on a straight-line basis over the term of the subscription. The deferred revenue and deferred cost amounts are amortized to application subscriptions and other services revenue and cost of revenues, respectively, on a straight-line basis over the estimated average in-service lives of these devices, which are three years in the vehicle finance and four to five years in the fleet management verticals. In certain fleet management contracts, we provide devices as part of the subscription contracts but we retain control of such devices. Under such arrangements, the cost of the devices is capitalized as property and equipment and depreciated over the estimated useful life of three to five years. The related subscription revenues of these arrangements are recognized as services are rendered. Our deferred revenue under ASC 606 also includes prepayments from our customers for various subscription services but does not include future subscription fees associated with customers’ unexercised contract renewal rights.

In certain customer arrangements, we sell devices and monitoring services separately to customers and sell similar devices on a stand-alone basis to licensees. Accordingly, we recognize revenues for the sales of the devices upon transfer of control to the customer and recognize revenue for the related monitoring services over the service period. The allocation of the transaction price is based on relative estimated stand-alone selling prices for the devices and the monitoring services.

Professional Services. We also provide various professional services to customers. These include project management, engineering services and installation services, which are typically distinct from other performance obligations and are recognized as the related services are performed. For certain professional service contracts, we recognize revenue over time based on the proportion of total costs incurred to-date over the estimated cost of the contract, which is an input method.

Sales taxes. We have elected to record revenue net of taxes collected from customers that are remitted to governmental authorities, with the collected taxes recorded within the caption Other current liabilities until remitted to the relevant government authority.

Contract Balances. Timing of revenue recognition may differ from the timing on our invoicing to customers. Contract liabilities are comprised of billings to or payments received from our customers in advance of performance under the contract. We refer to these contract liabilities as “Deferred Revenues” in the accompanying condensed consolidated financial statements. During fiscal quarter ended August 31, 2020, we recognized $23.8 million in revenue from the deferred revenue balance of $62.2 million as of February 29, 2020. Certain incremental costs of obtaining a contract with a customer consist of sales commissions, which are recognized on a straight-line basis over the life of the corresponding contracts. Prepaid commissions totaled $4.1 million as of August 31, 2020, of which $2.2 million was classified as non-current.

We disaggregate revenue from contracts with customers into reportable segments, geography, type of goods and services and timing of revenue recognition. See Note 15 for our revenue by segment and geography. The disaggregation of revenue by type of goods and services and by timing of revenue recognition, which reflect the immaterial corrections as discussed below, was as follows (in thousands):

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Revenue by type of goods and services:
Telematics devices and accessories	$	50,943	$	64,174	$	104,049	$	129,937
Rental income and other services		5,976		5,750		8,413		10,180
Recurring application subscriptions		26,618		23,312		51,290		42,189
Total	$	83,537	$	93,236	$	163,752	$	182,306

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Revenue by timing of revenue recognition:
Revenue recognized at a point in time	$	56,647	$	68,921	$	111,874	$	138,205
Revenue recognized over time		26,890		24,315		51,878		44,101
Total	$	83,537	$	93,236	$	163,752	$	182,306

Telematics devices and accessories presented in the table above include devices sold in customer arrangements that include both the device and monitoring services. Recurring application subscriptions revenues include the amortization for customized devices functional only with application subscriptions.

Remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue on our condensed consolidated balance sheets and unbilled amounts that will be recognized as revenue in future periods. As of August 31, 2020 and February 29, 2020, we have estimated remaining performance obligations for contractually committed revenues of $129.8 million and $134.5 million, respectively. As of August 31, 2020, we expect to recognize approximately 25% in fiscal 2021 and 39% in fiscal 2022. As of February 29, 2020, we expected to recognize approximately 44% in fiscal 2021 and 26% in fiscal 2022. We have utilized the practical expedient exception within ASC 606 and exclude contracts that have original durations of less than one year from the aforementioned remaining performance obligation disclosure.

Revision of Previously Issued Condensed Consolidated Financial Statements. Subsequent to the issuance of the consolidated financial statements for the year ended February 29, 2020, we concluded that the presentation of revenues and cost of revenues should be adjusted to present product and service revenues and the related cost of revenues for each separately in accordance with SEC Regulation S-X, Rule 5-03(b). Additionally, certain historical information in the notes to the condensed consolidated financial statements have been revised to reflect the impact of these corrections. We have determined that the correction of these classification errors is not material to the previously issued consolidated financial statements. The following table summarizes the impact of the immaterial adjustments.

	Three Months Ended August 31, 2019							Six Months Ended August 31, 2019
	As Reported		Adjustment			As Corrected		As Reported		Adjustment			As Corrected
Revenues:
Products	$	62,031	$	2,143		$	64,174	$	125,590	$	4,347		$	129,937
Application subscriptions and other services		31,205		(2,143	)		29,062		56,716		(4,347	)		52,369
Total revenues	$	93,236	$	-		$	93,236	$	182,306	$	-		$	182,306
Cost of revenues:
Products	$	37,721	$	562		$	38,283	$	76,269	$	1,820		$	78,089
Application subscriptions and other services		17,845		(562	)		17,283		32,956		(1,820	)		31,136
Total cost of revenues	$	55,566	$	-		$	55,566	$	109,225	$	-		$	109,225

	Three Months Ended August 31, 2019							Six Months Ended August 31, 2019
	As Reported		Adjustment			As Corrected		As Reported		Adjustment			As Corrected
Revenue by type of goods and services:
Telematics devices and accessories	$	65,891	$	(1,717	)	$	64,174	$	134,059	$	(4,122	)	$	129,937
Rental income and other services		2,036		3,714			5,750		3,983		6,197			10,180
Recurring application subscriptions		25,309		(1,997	)		23,312		44,264		(2,075	)		42,189
Total	$	93,236	$	-		$	93,236	$	182,306	$	-		$	182,306
Revenue by timing of revenue recognition:
Revenue recognized at a point in time	$	65,891	$	3,030		$	68,921	$	134,059	$	4,146		$	138,205
Revenue recognized over time		27,345		(3,030	)		24,315		48,247		(4,146	)		44,101
Total	$	93,236	$	-		$	93,236	$	182,306	$	-		$	182,306

Cash and Cash Equivalents

Cash and Cash Equivalents

We consider all highly liquid investments with maturities at date of purchase of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable consists of amounts due to us from sales arrangements executed in our normal business activities and are recorded at invoiced amounts. Our payment terms generally range between 30 to 60 days and we do not offer financing options. We present the aggregate accounts receivable balance net of an allowance for doubtful accounts. Generally, collateral and other security is not obtained for outstanding accounts receivable. Credit losses, if any, are recognized based on management’s evaluation of historical collection experience, customer-specific financial conditions as well as an evaluation of current industry trends and general economic conditions. Past due balances are assessed by management on a periodic basis and balances are written off when the customer’s financial condition no longer warrants pursuit of collection. Although we expect to collect amounts due, actual collections may differ from estimated amounts.

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. Except for the increase in expected credit losses, we are not aware of any specific event or circumstances that would require an update to our estimates or assumptions or a revision of the carrying value of our assets or liabilities as of the date of this Quarterly Report on Form 10-Q. These estimates and assumptions may change as new events occur and additional information is obtained. As a result, actual results could differ materially from these estimates and assumptions.

We analyzed the credit risk associated with our accounts receivables and lease receivables. Our historical loss rates have not shown any significant differences between customer industries or geographies, and, upon adoption of ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”), we grouped all accounts receivables and lease receivables into a single portfolio. As disclosed in Note 15, Segment Information and Geographic Data, we do not have significant international geographic concentrations of revenue, and, as a result, we do not have significant concentrations of accounts receivables or lease receivables in any single geography outside of the United States. As a result of our adoption of ASU 2016-13 effective March 1, 2020, we recognized the cumulative effect of initially applying the guidance as a $0.1 million addition to our allowance for doubtful accounts with an offsetting adjustment to accumulated deficit.

The allowance for doubtful accounts totaled $3.7 million and $3.1 million as of August 31, 2020 and February 29, 2020, respectively.

Goodwill and Other Long-Lived Assets

Goodwill and Other Long-Lived Assets

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. We test goodwill for impairment in accordance with the provisions of ASC 350, Intangibles – Goodwill and Other, (“ASC 350”). Goodwill is tested for impairment at least annually at the reporting unit level or whenever events or changes in circumstances indicate that goodwill might be impaired. ASC 350 provides that an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if an entity concludes otherwise, then it is required to perform an impairment test.

In accordance with Accounting Standards Update 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which we adopted in the fourth quarter of fiscal 2020, the impairment test involves comparing the estimated fair value of a reporting unit with its carrying value, including goodwill. If the estimated fair value exceeds carrying value, goodwill is considered not to be impaired. If, however, the fair value of the reporting unit is less than carrying value, then an impairment loss is recognized in an amount equal to the amount that the carrying value of the reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

Long-lived assets to be held and used, including identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets or asset group to future undiscounted net cash flows expected to be generated by the lowest level of asset group. If the assets or asset group are impaired, the impairment recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for similar investment of like risk. In the fourth quarter of fiscal 2020, we determined that the prolonged secular decline in revenues from our legacy LoJack U.S. SVR products coupled with the slower than anticipated market penetration of our telematics solutions in the U.S. automotive dealership channel represented determinate indications of impairment. These factors were further exacerbated by the immediate unfavorable impact that the COVID-19 pandemic has had on the automotive end markets over the past four months. We recorded an impairment loss of $19.1 million during the fourth quarter of fiscal 2020 related to certain intangible assets and other long-lived assets. As the COVID-19 pandemic continued to impact the market and our business operations during the first quarter of fiscal 2021, we reevaluated the recoverability of the carrying amount of long-lived assets, including goodwill. Based upon our assessment of economic conditions, our expectations of future business conditions and trends, our projected revenues, earnings, and cash flows, we determined that goodwill utilized in our LoJack U.S. SVR reporting unit was impaired and recorded an impairment loss of $3.9 million for goodwill and $0.4 million for dealer relationships as of May 31, 2020. For the fiscal quarter ended August 31, 2020, we continued our assessment of these conditions and concluded no further impairment was required. Any deterioration in future operating cash flows of this reporting unit may result in further impairment of goodwill and other long-lived assets, including intangible assets.

We estimate the fair value of goodwill and other long-lived assets including dealership relationships based on discounted cash flow techniques (Level 3 determination of fair value). Significant inputs to the valuation model include:

• estimated future cash flows;

• growth assumptions for future revenues as well as future gross margin rates, expense rates, capital expenditures and other estimates; and

• rate used to discount our estimated future cash flow projections to their present value (or estimated fair value) based on our estimated weighted average cost of capital.

Fair Value Measurements

Fair Value Measurements

We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in our financial statements. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly manner in an arm’s-length transaction between market participants at the measurement date. Fair value is estimated by using the following hierarchy:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

Convertible Senior Notes and Capped Call Transactions

Convertible Senior Notes and Capped Call Transactions

We account for our convertible senior notes as separate liability and equity components. We determine the carrying amount of the liability component based on the fair value of a similar debt instrument excluding the embedded conversion option at the issuance date. The carrying amount of the equity component representing the conversion option is calculated by deducting the carrying value of the liability component from the principal amount of the notes as a whole. This difference represents a debt discount that is amortized to interest expense over the term of the notes using the effective interest rate method. The equity component of the notes is included in stockholders’ equity and is not remeasured as long as it continues to meet the conditions for equity classification. We allocate transaction costs related to the issuance of the notes to the liability and equity components using the same proportions as the initial carrying value of the notes. Transaction costs attributable to the liability component are being amortized to interest expense using the effective interest method over the respective term of the notes, and transaction costs attributable to the equity components are netted with the equity component of the note in stockholders’ equity. We account for the cost of the capped calls as a reduction to additional paid-in capital.

Patent Litigation and Other Contingencies

Patent Litigation and Other Contingencies

We accrue for patent litigation and other contingencies whenever we determine that an unfavorable outcome is probable and a liability is reasonably estimable. The amount of the accrual is estimated based on a review of each claim, including the type and facts of the claim and our assessment of the merits of the claim. These accruals are reviewed at least on a quarterly basis and are adjusted to reflect the impact of recent negotiations, settlements, court rulings, advice from legal counsel and other events pertaining to the case. Such accruals, if any, are recorded as general and administrative expense in our condensed consolidated statements of comprehensive loss. Although we take considerable measures to mitigate our exposure in these matters, litigation is unpredictable; however, we believe that we have valid defenses with respect to pending legal matters against us as well as adequate provisions for probable and estimable losses. All costs for legal services are expensed as incurred.

Foreign Currency Translation

Foreign Currency Translation

We translate the assets and liabilities of our non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation included in accumulated other comprehensive income (loss) during the period. The aggregate foreign currency transaction exchange rate gain (losses) included in determining income (loss) before income taxes was $0.9 million and $(0.8) million for the three and six months ended August 31, 2020, respectively. The aggregate foreign currency transaction exchange rate losses included in determining income (loss) before income taxes was $1.0 million and $1.3 million for the three and six months ended August 31, 2019, respectively.

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

Other comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss) (“OCI”). OCI refers to revenue, expenses and gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity and excluded from net income (loss). Our OCI consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-13, Financial Instruments - Credit Losses, or ASC 326. The new standard amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology. We adopted the new allowance for credit losses accounting standard on March 1, 2020 by means of recognizing the cumulative effect of initially applying the guidance as a $0.1 million addition to our allowance for doubtful accounts with an offsetting adjustment to accumulated deficit. See Accounts Receivable and Allowance for Doubtful Accounts above.

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs incurred to develop or obtain internal-use software. We adopted this standard prospectively effective March 1, 2020. As a result of the adoption, we recorded certain costs, particularly those incurred during the application development phase, related to the implementation of cloud computing arrangements in prepaid expenses which historically had been recorded in property and equipment. Capitalized costs related to cloud computing arrangements for the six months ended August 31, 2020, which are included in prepaid expenses and other current assets on our condensed consolidated balance sheets, were not material.

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Aug. 31, 2020

Summary of Impact of Immaterial Adjustments Related to the Presentation of Revenues and Cost of Revenues between Products and Services

Subsequent to the issuance of the consolidated financial statements for the year ended February 29, 2020, we concluded that the presentation of revenues and cost of revenues should be adjusted to present product and service revenues and the related cost of revenues for each separately in accordance with SEC Regulation S-X, Rule 5-03(b). Additionally, certain historical information in the notes to the condensed consolidated financial statements have been revised to reflect the impact of these corrections. We have determined that the correction of these classification errors is not material to the previously issued consolidated financial statements. The following table summarizes the impact of the immaterial adjustments.

	Three Months Ended August 31, 2019							Six Months Ended August 31, 2019
	As Reported		Adjustment			As Corrected		As Reported		Adjustment			As Corrected
Revenues:
Products	$	62,031	$	2,143		$	64,174	$	125,590	$	4,347		$	129,937
Application subscriptions and other services		31,205		(2,143	)		29,062		56,716		(4,347	)		52,369
Total revenues	$	93,236	$	-		$	93,236	$	182,306	$	-		$	182,306
Cost of revenues:
Products	$	37,721	$	562		$	38,283	$	76,269	$	1,820		$	78,089
Application subscriptions and other services		17,845		(562	)		17,283		32,956		(1,820	)		31,136
Total cost of revenues	$	55,566	$	-		$	55,566	$	109,225	$	-		$	109,225

	Three Months Ended August 31, 2019							Six Months Ended August 31, 2019
	As Reported		Adjustment			As Corrected		As Reported		Adjustment			As Corrected
Revenue by type of goods and services:
Telematics devices and accessories	$	65,891	$	(1,717	)	$	64,174	$	134,059	$	(4,122	)	$	129,937
Rental income and other services		2,036		3,714			5,750		3,983		6,197			10,180
Recurring application subscriptions		25,309		(1,997	)		23,312		44,264		(2,075	)		42,189
Total	$	93,236	$	-		$	93,236	$	182,306	$	-		$	182,306
Revenue by timing of revenue recognition:
Revenue recognized at a point in time	$	65,891	$	3,030		$	68,921	$	134,059	$	4,146		$	138,205
Revenue recognized over time		27,345		(3,030	)		24,315		48,247		(4,146	)		44,101
Total	$	93,236	$	-		$	93,236	$	182,306	$	-		$	182,306

ASU 2014-09 [Member]

Summary of Disaggregation of Revenue by Type of Goods and Services and by Timing of Revenue Recognition which Reflect the Immaterial Adjustments

We disaggregate revenue from contracts with customers into reportable segments, geography, type of goods and services and timing of revenue recognition. See Note 15 for our revenue by segment and geography. The disaggregation of revenue by type of goods and services and by timing of revenue recognition, which reflect the immaterial corrections as discussed below, was as follows (in thousands):

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Revenue by type of goods and services:
Telematics devices and accessories	$	50,943	$	64,174	$	104,049	$	129,937
Rental income and other services		5,976		5,750		8,413		10,180
Recurring application subscriptions		26,618		23,312		51,290		42,189
Total	$	83,537	$	93,236	$	163,752	$	182,306

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Revenue by timing of revenue recognition:
Revenue recognized at a point in time	$	56,647	$	68,921	$	111,874	$	138,205
Revenue recognized over time		26,890		24,315		51,878		44,101
Total	$	83,537	$	93,236	$	163,752	$	182,306

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CASH, CASH EQUIVALENTS AND INVESTMENTS (Tables)

6 Months Ended

Aug. 31, 2020

Cash And Cash Equivalents [Abstract]

Schedule of Cash and Marketable Securities

The following tables summarize our financial instrument assets (in thousands):

	As of August 31, 2020
							Balance Sheet Classification
							of Fair Value
			Unrealized				Cash and
	Adjusted		Gains		Fair		Cash		Other
	Cost		(Losses)		Value		Equivalents		Assets
Cash	$	31,357	$	—	$	31,357	$	31,357	$	—
Level 1:
Money market funds		75,788		—		75,788		75,788		—
Mutual funds (1)		2,140		191		2,331		—		2,331
Total	$	109,285	$	191	$	109,476	$	107,145	$	2,331

	As of February 29, 2020
							Balance Sheet Classification
							of Fair Value
			Unrealized				Cash and
	Adjusted		Gains		Fair		Cash		Other
	Cost		(Losses)		Value		Equivalents		Assets
Cash	$	31,895	$	—	$	31,895	$	31,895	$	—
Level 1:
Money market funds		5,508		—		5,508		5,508		—
Mutual funds (1)		3,926		26		3,952		—		3,952
Level 2:
Repurchase agreements		60,000		—		60,000		60,000		—
Corporate bonds		10,001		—		10,001		10,001		—
Total	$	111,330	$	26	$	111,356	$	107,404	$	3,952

(1) Amounts represent various equities, bond and money market mutual funds that are held in an irrevocable “Rabbi Trust” for payment obligations to non-qualified deferred compensation plan participants. In addition to the mutual funds above, our “Rabbi Trust” also included Corporate-Owned Life Insurance (COLI) starting in fiscal 2020. As of August 31, 2020, the cash surrender value of COLI was $4.2 million. 

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INVENTORIES (Tables)

6 Months Ended

Aug. 31, 2020

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consist of the following (in thousands):

	August 31,		February 29,
	2020		2020
Raw materials	$	14,082	$	18,118
Finished goods		17,413		18,660
	$	31,495	$	36,778

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Aug. 31, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Other Intangible Assets

Other intangible assets consist of the following (in thousands):

		Gross										Accumulated Amortization						Net
	Useful Life	Feb. 29, 2020		Additions & Adjustments, net (1)			Impair- ment			Aug. 31, 2020		Feb. 29, 2020		Expense		Aug. 31, 2020		Feb. 29, 2020		Aug. 31, 2020
Developed technology	2-7 years	$	27,363		56			—		$	27,419	$	21,437	$	1,511	$	22,948	$	5,926	$	4,471
Tradenames	10 years		30,093		81			—			30,174		16,303		1,059		17,362		13,790		12,812
Customer lists	4-7 years		25,304		—			—			25,304		22,903		48		22,951		2,401		2,353
Dealer and customer relationships	7-12 years		34,139		(527	)		(365	)		33,247		10,753		1,098		11,851		23,386		21,396
Patents	5 years		589		—			—			589		197		20		217		392		372
		$	117,488	$	(390	)	$	(365	)	$	116,733	$	71,593	$	3,736	$	75,329	$	45,895	$	41,404

(1) Amounts also include any net changes in intangible asset balances for the periods presented that resulted from foreign currency translations.

Schedule of Future Amortization Expense

Estimated future amortization expense as of August 31, 2020 is as follows (in thousands):

2021 (remainder)	$	3,895
2022		5,830
2023		5,610
2024		4,498
2025		4,374
Thereafter		17,197
	$	41,404

Schedule of Goodwill

Changes in goodwill are as follows (in thousands):

	Software & Subscription Services			Telematics Products		LoJack U.S. SVR Products			Total
Balance as of February 29, 2020	$	55,132		$	39,180	$	12,023		$	106,335
Impairment loss		—			—		(3,924	)		(3,924	)
Effect of exchange rate change on goodwill		(249	)		—		—			(249	)
Balance as of August 31, 2020	$	54,883		$	39,180	$	8,099		$	102,162

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OTHER ASSETS (Tables)

6 Months Ended

Aug. 31, 2020

Other Assets Noncurrent Disclosure [Abstract]

Schedule of Other Assets

Other assets consist of the following (in thousands):

	August 31,		February 29,
	2020		2020
Deferred cost	$	6,114	$	7,818
Deferred compensation plan assets		6,494		6,041
Lease receivables, non-current		7,830		5,992
Prepaid commissions		2,191		2,318
Other		2,403		2,599
	$	25,032	$	24,768

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FINANCING ARRANGEMENTS (Tables)

6 Months Ended

Aug. 31, 2020

Debt Disclosure [Abstract]

Summary of Debt

The following table provides a summary of our debt as of August 31, 2020 and February 29, 2020 (in thousands):

	Maturity	Effective			August 31,			February 29,
	Date	Interest Rate			2020			2020
2020 Convertible Notes, 1.625% fixed rate	May 15, 2020		6.20	%	$	-		$	27,599
2025 Convertible Notes, 2.00% fixed rate	August 1, 2025		7.56	%		230,000			230,000
Revolving Credit Facility	March 30, 2022		3.50	%		20,000			-
Due to factors	2020 - 2024		4.70	%		12,627			14,371
Total term debt						262,627			271,970
Unamortized discount and issuance costs						(58,161	)		(61,763	)
Less: Current portion of long-term term debt						(5,184	)		(33,119	)
Long-term debt, net of current portion					$	199,282		$	177,088

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Aug. 31, 2020	Feb. 29, 2020
Current assets:
Cash and cash equivalents	$ 107,145	$ 107,404
Accounts receivable, net	68,387	72,273
Inventories	31,495	36,778
Prepaid expenses and other current assets	24,274	21,411
Total current assets	231,301	237,866
Property and equipment, net	53,640	55,878
Operating lease right-of-use assets	23,428	20,626
Deferred income tax assets	4,565	4,437
Goodwill	102,162	106,335
Other intangible assets, net	41,404	45,895
Other assets	25,032	24,768
Total assets	481,532	495,805
Current liabilities:
Current portion of long-term debt	5,184	33,119
Accounts payable	31,214	28,450
Accrued payroll and employee benefits	10,599	9,049
Deferred revenue	35,001	34,704
Other current liabilities	21,019	16,153
Total current liabilities	103,017	121,475
Long-term debt, net of current portion	199,282	177,088
Operating lease liabilities	25,225	24,279
Other non-current liabilities	35,030	35,044
Total liabilities	362,554	357,886
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 3,000 shares authorized; no shares issued or outstanding
Common stock, $.01 par value; 80,000 shares authorized; 35,017 and 34,322 shares issued and outstanding at August 31, 2020 and February 29, 2020, respectively	350	343
Additional paid-in capital	226,368	220,482
Accumulated deficit	(105,565)	(81,531)
Accumulated other comprehensive loss	(2,175)	(1,375)
Total stockholders' equity	118,978	137,919
Total Liabilities and Stockholders' Equity	$ 481,532	$ 495,805

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RESTRUCTURING CHARGES (Tables)

6 Months Ended

Aug. 31, 2020

Restructuring And Related Activities [Abstract]

Summary of Charges and Activity Resulting from Implementation of Restructuring Plan within Other Current and Non-current Liabilities

The following table summarizes the charges resulting from the implementation of the restructuring plan (in thousands):

	Three months ended August 31, 2020						Three months ended August 31, 2019
	Personnel		Facilities		Total		Personnel		Facilities		Total
Cost of revenue	$	397	$	71	$	468	$	349	$	1,210	$	1,559
Selling and marketing		-		-		-		447		-		447
General and administrative		83		-		83		266		-		266
Total	$	480	$	71	$	551	$	1,062	$	1,210	$	2,272

	Six months ended August 31, 2020						Six months ended August 31, 2019
	Personnel		Facilities		Total		Personnel		Facilities		Total
Cost of revenue	$	273	$	174	$	447	$	349	$	1,210	$	1,559
Selling and marketing		30		-		30		447		-		447
General and administrative		1,982		-		1,982		266		-		266
Total	$	2,285	$	174	$	2,459	$	1,062	$	1,210	$	2,272

The following table summarizes the activity resulting from the implementation of the restructuring plan within other current and non-current liabilities (in thousands):

	Personnel			Facilities			Total
Restructuring liabilities as of February 29, 2020	$	2,383		$	359		$	2,742
Charges		2,285			174			2,459
Payments		(1,848	)		(448	)		(2,296	)
Restructuring liabilities as of August 31, 2020	$	2,820		$	85		$	2,905

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LEASES (Tables)

6 Months Ended

Aug. 31, 2020

Leases [Abstract]

Summary of Lease-related Assets and Liabilities

The table below presents lease-related assets and liabilities recorded on the condensed consolidated balance sheet (in thousands):

	Classification	August 31, 2020
Assets
Operating lease right-of-use assets	Operating lease right-of-use assets	$	23,428
Liabilities
Operating lease liabilities (current)	Other current liabilities	$	6,201
Operating lease liabilities (noncurrent)	Operating lease liabilities		25,225
Total lease liabilities		$	31,426

Summary of Lease Costs Included in Condensed Consolidated Statements of Comprehensive Loss

The following lease costs were included in our condensed consolidated statements of comprehensive loss as follows (in thousands):

	For the Three Months Ended August 31,				For the Six Months Ended August 31,
	2020		2019		2020		2019
Operating lease cost	$	1,837	$	1,972	$	3,426	$	3,973
Short-term lease cost		82		252		163		564
Variable lease cost		114		43		228		73
Total lease cost	$	2,033	$	2,267	$	3,817	$	4,610

Schedule of Supplemental Information Related to Operating Leases

The table below presents supplemental information related to operating leases during the six months ended August 31, 2020 (in thousands, except weighted-average information):

Cash paid for amounts included in the measurement of operating lease liabilities	$	3,605
Right-of-use assets obtained in exchange for new operating lease liabilities	$	5,425
Weighted average remaining lease term	6.48
Weighted average discount rate		5.17	%

Schedule of Reconciles the Undiscounted Cash Flows for Operating Lease Liabilities

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of August 31, 2020 (in thousands):

Remainder of 2021	$	4,348
2022		7,106
2023		6,588
2024		4,891
2025		3,113
Thereafter		10,057
Total minimum lease payments		36,103
Less imputed interest		(4,677	)
Present value of future minimum lease payments		31,426
Less current obligations under leases		(6,201	)
Long-term lease obligations	$	25,225

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EARNINGS PER SHARE (Tables)

6 Months Ended

Aug. 31, 2020

Earnings Per Share [Abstract]

Schedule of Weighted Average Number of Shares

The calculation of the basic and diluted loss per share of common stock is as follows (in thousands, except per share value):

	Three Months Ended						Six Months Ended
	August 31,						August 31,
	2020			2019			2020			2019
Net loss	$	(9,478	)	$	(7,369	)	$	(23,900	)	$	(16,062	)
Basic and diluted weighted average number of common shares outstanding		34,256			33,568			34,140			33,475
Loss per share:
Basic	$	(0.28	)	$	(0.22	)	$	(0.70	)	$	(0.48	)
Diluted	$	(0.28	)	$	(0.22	)	$	(0.70	)	$	(0.48	)

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STOCKHOLDERS' EQUITY (Tables)

6 Months Ended

Aug. 31, 2020

Equity [Abstract]

Schedule of Stock-based Compensation Expense

Stock-based compensation expense is included in the following captions of the condensed consolidated statements of comprehensive loss (in thousands):

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Cost of revenues	$	203	$	162	$	378	$	337
Research and development		723		633		1,369		1,046
Selling and marketing		760		982		1,265		1,651
General and administrative		1,160		1,406		2,582		2,692
Restructuring		-		-		875		-
	$	2,846	$	3,183	$	6,469	$	5,726

Summary of Stock Option Activity

Changes in our outstanding stock options during the six months ended August 31, 2020 were as follows (options in thousands):

	Number of Options			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
Outstanding at February 29, 2020		1,071		$	14.65		6.2
Granted		—			—
Exercised		(70	)		4.03
Forfeited or expired		(152	)		17.52
Outstanding at August 31, 2020		849		$	15.02		6.0	$	309
Exercisable at August 31, 2020		578		$	14.37		5.1	$	309

Summary of Restricted Stock Shares (RSU's), and Performance Stock Units (PSU's) Activity

Changes in our outstanding restricted stock shares, performance stock units (“PSUs”) and restricted stock units (“RSUs”) during the six months ended August 31, 2020 were as follows (restricted shares, PSUs and RSUs in thousands):

	Number of Restricted Shares, PSUs and RSUs			Weighted Average Grant Date Fair Value		Shares Retained to Cover Statutory Minimum Withholding Taxes
Outstanding at February 29, 2020		2,215		$	14.47
Granted		1,778			7.86
Vested		(611	)		14.97		199
Forfeited		(152	)		13.46
Outstanding at August 31, 2020		3,230		$	10.78

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CONCENTRATION OF RISK (Tables)

6 Months Ended

Aug. 31, 2020

Risks And Uncertainties [Abstract]

Schedule of Significant Customers and Significant Suppliers Concentration Risk Percentage

As identified below, some of these manufacturers accounted for more than 10% of our accounts payable as follows (rounded):

	August 31,			February 29,
	2020			2020
Accounts payable:
Supplier A		14	%		11	%
Supplier B		9	%		11	%

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PRODUCT WARRANTIES (Tables)

6 Months Ended

Aug. 31, 2020

Product Warranties Disclosures [Abstract]

Schedule of Product Warranty Liability

Activity in the accrued warranty costs liability is as follows (in thousands):

	Six Months Ended
	August 31,
	2020			2019
Balance at beginning of period	$	987		$	1,399
Charged to costs and expenses		1,995			1,100
Deductions		(518	)		(700	)
Balance at end of period	$	2,464		$	1,799

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OTHER FINANCIAL INFORMATION (Tables)

6 Months Ended

Aug. 31, 2020

Other Financial Information [Abstract]

Schedule of Supplemental Balance Sheet Information

Supplemental Balance Sheet Information

Other current liabilities consist of the following (in thousands):

	August 31,		February 29,
	2020		2020
Operating lease liabilities	$	6,201	$	4,662
Taxes payable		2,476		2,266
Warranty reserves		2,464		987
Customer deposit		2,331		1,377
Litigation reserve		2,200		1,500
Interest payable		365		481
Other (1)		4,982		4,880
	$	21,019	$	16,153

(1) Amount represents accruals for various operating expense such as professional fees, vendor incentives and other estimates that are expected to be paid within the next 12 months

Other non-current liabilities consist of the following (in thousands):

	August 31,		February 29,
	2020		2020
Deferred revenue	$	25,104	$	27,452
Deferred compensation plan liability		6,542		5,919
Other		3,384		1,673
	$	35,030	$	35,044

Schedule of Interest Expense

Supplemental Statement of Comprehensive Loss Information

Interest expense consists of the following (in thousands):

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Interest expense on 2020 Convertible Notes:
Stated interest at 1.625% per annum	$	-	$	498	$	93	$	996
Amortization of discount and issue costs		-		1,495		289		2,951
		-		1,993		382		3,947
Interest expense on 2025 Convertible Notes:
Stated interest at 2.00% per annum		1,150		1,150		2,313		2,326
Amortization of discount and issue costs		2,329		2,160		4,640		4,328
		3,479		3,310		6,953		6,654
Other interest expense		378		252		599		410
Total interest expense	$	3,857	$	5,555	$	7,934	$	11,011

Schedule of Supplemental Cash Flow Information

“Net cash provided by operating activities” includes cash payments for interest expense and income taxes as follows (in thousands):

	Six Months Ended
	August 31,
	2020		2019
Cash payments for interest and income taxes:
Interest expense paid	$	2,780	$	3,358
Income tax paid, net of refunds	$	447	$	466

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SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables)

6 Months Ended

Aug. 31, 2020

Segment Reporting [Abstract]

Summary of Segment Information

Segment information is as follows (in thousands):

	Three Months Ended August 31, 2020															Three Months Ended August 31, 2019
	Reportable Segments															Reportable Segments
	Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total			Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total
Revenues	$	33,696		$	40,732		$	9,109					$	83,537		$	31,205		$	48,934		$	13,097					$	93,236
Gross profit	$	16,502		$	10,961		$	3,347					$	30,810		$	13,360		$	18,184		$	6,126					$	37,670
Gross margin		49	%		27	%		37	%					37	%		43	%		37	%		47	%					40	%
Adjusted EBITDA	$	7,573		$	(1,476	)	$	227		$	(921	)	$	5,403		$	3,947		$	5,341		$	2,173		$	(814	)	$	10,647

	Six Months Ended August 31, 2020															Six Months Ended August 31, 2019
	Operating Segments															Operating Segments
	Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total			Software & Subscription Services			Telematics Products			LoJack U.S. SVR Products			Corporate Expenses			Total
Revenues	$	61,725		$	86,271		$	15,756					$	163,752		$	56,716		$	100,132		$	25,458					$	182,306
Gross profit	$	30,317		$	26,081		$	5,465					$	61,863		$	23,760		$	38,228		$	11,093					$	73,081
Gross margin		49	%		30	%		35	%					38	%		42	%		38	%		44	%					40	%
Adjusted EBITDA	$	13,927		$	1,647		$	(1,346	)	$	(2,318	)	$	11,910		$	6,321		$	13,204		$	1,303		$	(2,612	)	$	18,216

Summary of Adjusted EBITDA

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,
	2020			2019			2020			2019
Net loss	$	(9,478	)	$	(7,369	)	$	(23,900	)	$	(16,062	)
Investment income		(680	)		(1,256	)		(698	)		(3,337	)
Interest expense		3,857			5,555			7,934			11,011
Income tax provision (benefit)		266			(1,342	)		506			(3,599	)
Depreciation		5,073			5,191			9,983			9,036
Amortization of intangible assets		1,844			3,318			3,736			6,358
Stock-based compensation		2,846			3,183			5,594			5,726
Impairment loss		286			—			4,575			—
Restructuring charges		551			2,272			2,459			2,272
Non-recurring legal expenses		170			777			963			4,584
Acquisition and integration related expenses		—			46			—			1,190
Other		668			272			758			1,037
Adjusted EBITDA	$	5,403		$	10,647		$	11,910		$	18,216

Summary of Revenues by Geographic Area

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

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
United States	$	58,945	$	68,684	$	110,495	$	131,806
Europe, Middle East and Africa		15,537		13,298		31,443		26,724
South America		5,687		5,447		11,729		10,975
Asia and Pacific Rim		1,704		1,940		4,043		4,349
All other		1,664		3,867		6,042		8,452
	$	83,537	$	93,236	$	163,752	$	182,306

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Summary of Impact of Immaterial Adjustments Related to the Presentation of Revenues and Cost of Revenues between Products and Services) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019
Revenues:
Revenues	$ 83,537	$ 93,236	$ 163,752	$ 182,306
Cost of revenues:
Cost of revenues	52,727	55,566	101,889	109,225
As Reported [Member]
Revenues:
Revenues		93,236		182,306
Cost of revenues:
Cost of revenues		55,566		109,225
Products [Member]
Revenues:
Revenues	50,943	64,174	104,049	129,937
Cost of revenues:
Cost of revenues	36,792	38,283	72,788	78,089
Products [Member] | As Reported [Member]
Revenues:
Revenues		62,031		125,590
Cost of revenues:
Cost of revenues		37,721		76,269
Products [Member] | Adjustment [Member]
Revenues:
Revenues		2,143		4,347
Cost of revenues:
Cost of revenues		562		1,820
Application Subscriptions and Other Services [Member]
Revenues:
Revenues	32,594	29,062	59,703	52,369
Cost of revenues:
Cost of revenues	15,935	17,283	29,101	31,136
Application Subscriptions and Other Services [Member] | As Reported [Member]
Revenues:
Revenues		31,205		56,716
Cost of revenues:
Cost of revenues		17,845		32,956
Application Subscriptions and Other Services [Member] | Adjustment [Member]
Revenues:
Revenues		(2,143)		(4,347)
Cost of revenues:
Cost of revenues		(562)		(1,820)
Telematics Devices and Accessories [Member]
Revenues:
Revenues	50,943	64,174	104,049	129,937
Telematics Devices and Accessories [Member] | As Reported [Member]
Revenues:
Revenues		65,891		134,059
Telematics Devices and Accessories [Member] | Adjustment [Member]
Revenues:
Revenues		(1,717)		(4,122)
Rental Income and Other Services [Member]
Revenues:
Revenues	5,976	5,750	8,413	10,180
Rental Income and Other Services [Member] | As Reported [Member]
Revenues:
Revenues		2,036		3,983
Rental Income and Other Services [Member] | Adjustment [Member]
Revenues:
Revenues		3,714		6,197
Recurring Application Subscriptions [Member]
Revenues:
Revenues	26,618	23,312	51,290	42,189
Recurring Application Subscriptions [Member] | As Reported [Member]
Revenues:
Revenues		25,309		44,264
Recurring Application Subscriptions [Member] | Adjustment [Member]
Revenues:
Revenues		(1,997)		(2,075)
Revenue Recognized At Point In Time [Member]
Revenues:
Revenues	56,647	68,921	111,874	138,205
Revenue Recognized At Point In Time [Member] | As Reported [Member]
Revenues:
Revenues		65,891		134,059
Revenue Recognized At Point In Time [Member] | Adjustment [Member]
Revenues:
Revenues		3,030		4,146
Revenue Recognized Over Time [Member]
Revenues:
Revenues	$ 26,890	24,315	$ 51,878	44,101
Revenue Recognized Over Time [Member] | As Reported [Member]
Revenues:
Revenues		27,345		48,247
Revenue Recognized Over Time [Member] | Adjustment [Member]
Revenues:
Revenues		$ (3,030)		$ (4,146)

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details)	3 Months Ended				6 Months Ended		9 Months Ended	12 Months Ended
	Aug. 31, 2020 USD ($)	May 31, 2020 USD ($) Segment	Feb. 29, 2020 USD ($)	Aug. 31, 2019 USD ($)	Aug. 31, 2020 USD ($)	Aug. 31, 2019 USD ($)	Nov. 30, 2019 Segment	Feb. 29, 2020 USD ($) Segment	Mar. 01, 2020 USD ($)
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Number of reportable segments | Segment		3					2	2
Revenue recognized					$ 23,800,000
Unearned revenue	$ 35,001,000		$ 34,704,000		35,001,000			$ 34,704,000	$ 62,200,000
Prepaid sales commissions	4,100,000				4,100,000
Contracted not recognized revenue	129,800,000		134,500,000		129,800,000			134,500,000
Allowance for doubtful accounts	3,700,000		3,100,000		3,700,000			3,100,000
Impairment of long-lived assets and right of use assets			$ 19,100,000
Goodwill impairment loss		$ 3,900,000			3,924,000			$ 0
Impairment loss	0				365,000
Foreign transaction exchange gains (losses)	900,000			$ 1,000,000.0	(800,000)	$ 1,300,000
Dealer Relationships [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Impairment loss	0	$ 400,000
ASC 326 [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Addition to allowance for doubtful accounts					100,000
Non-current [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Prepaid sales commissions	$ 2,200,000				$ 2,200,000
Minimum [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Accounts receivable payment period					30 days
Maximum [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Accounts receivable payment period					60 days
Vehicle Finance Vertical [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Deferred revenue contract in-service life					3 years
Fleet Management Vertical [Member] | Minimum [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Deferred revenue contract in-service life					4 years
Fleet Management Vertical [Member] | Maximum [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Deferred revenue contract in-service life					5 years
Software-as-a-Service [Member] | Minimum [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Estimated useful life					3 years
Software-as-a-Service [Member] | Maximum [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Estimated useful life					5 years

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Aug. 31, 2020	Feb. 29, 2020
Statement Of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	3,000,000	3,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	35,017,000	34,322,000
Common stock, shares outstanding	35,017,000	34,322,000

XML

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Summary of Disaggregation of Revenue by Type of Goods and Services and by Timing of Revenue Recognition which Reflect the Immaterial Adjustments) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019
Disaggregation Of Revenue [Line Items]
Revenues	$ 83,537	$ 93,236	$ 163,752	$ 182,306
Telematics Devices and Accessories [Member]
Disaggregation Of Revenue [Line Items]
Revenues	50,943	64,174	104,049	129,937
Rental Income and Other Services [Member]
Disaggregation Of Revenue [Line Items]
Revenues	5,976	5,750	8,413	10,180
Recurring Application Subscriptions [Member]
Disaggregation Of Revenue [Line Items]
Revenues	26,618	23,312	51,290	42,189
Revenue Recognized At Point In Time [Member]
Disaggregation Of Revenue [Line Items]
Revenues	56,647	68,921	111,874	138,205
Revenue Recognized Over Time [Member]
Disaggregation Of Revenue [Line Items]
Revenues	$ 26,890	$ 24,315	$ 51,878	$ 44,101

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative 1) (Details)	Aug. 31, 2020	Feb. 29, 2020
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-03-01
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Revenue, remaining performance obligation expect to recognize in percentage		44.00%
Revenue, remaining Performance obligation, expected timing of satisfaction, year		2021
Revenue, remaining Performance obligation, expected timing of satisfaction, period		1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-09-01
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Revenue, remaining performance obligation expect to recognize in percentage	25.00%
Revenue, remaining Performance obligation, expected timing of satisfaction, year	2021
Revenue, remaining Performance obligation, expected timing of satisfaction, period	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-03-01
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Revenue, remaining performance obligation expect to recognize in percentage	39.00%	26.00%
Revenue, remaining Performance obligation, expected timing of satisfaction, year	2022	2022
Revenue, remaining Performance obligation, expected timing of satisfaction, period	1 year	2 years

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CASH, CASH EQUIVALENTS AND INVESTMENTS (Details) - USD ($) $ in Thousands		Aug. 31, 2020	Feb. 29, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Adjusted Cost		$ 109,285	$ 111,330
Unrealized Gains (Losses)		191	26
Fair Value		109,476	111,356
Cash and Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value		107,145	107,404
Other Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value		2,331	3,952
Cash [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Adjusted Cost		31,357	31,895
Unrealized Gains (Losses)
Fair Value		31,357	31,895
Cash [Member] | Cash and Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value		31,357	31,895
Cash [Member] | Other Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Adjusted Cost		75,788	5,508
Unrealized Gains (Losses)
Fair Value		75,788	5,508
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value		75,788	5,508
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | Other Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value
Mutual Fund [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Adjusted Cost	[1]	2,140	3,926
Unrealized Gains (Losses)	[1]	191	26
Fair Value	[1]	2,331	3,952
Mutual Fund [Member] | Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	[1]
Mutual Fund [Member] | Fair Value, Inputs, Level 1 [Member] | Other Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	[1]	$ 2,331	3,952
Repurchase Agreements [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Adjusted Cost			60,000
Unrealized Gains (Losses)
Fair Value			60,000
Repurchase Agreements [Member] | Fair Value, Inputs, Level 2 [Member] | Cash and Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value			60,000
Repurchase Agreements [Member] | Fair Value, Inputs, Level 2 [Member] | Other Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Adjusted Cost			10,001
Unrealized Gains (Losses)
Fair Value			10,001
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Cash and Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value			10,001
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Other Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value

[1] Amounts represent various equities, bond and money market mutual funds that are held in an irrevocable “Rabbi Trust” for payment obligations to non-qualified deferred compensation plan participants. In addition to the mutual funds above, our “Rabbi Trust” also included Corporate-Owned Life Insurance (COLI) starting in fiscal 2020. As of August 31, 2020, the cash surrender value of COLI was $4.2 million. 

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CASH, CASH EQUIVALENTS AND INVESTMENTS (Parenthetical) (Details) $ in Millions	Aug. 31, 2020 USD ($)
Cash And Cash Equivalents [Abstract]
Cash surrender value of Corporate-Owned Life Insurance (COLI)	$ 4.2

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INVENTORIES (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Feb. 29, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 14,082	$ 18,118
Finished goods	17,413	18,660
Inventories	$ 31,495	$ 36,778

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GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Other Intangible Assets) (Details) - USD ($)		3 Months Ended		6 Months Ended
		Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Gross, Beginning balance				$ 117,488,000
Additions & Adjustments, net	[1]			(390,000)
Impairment		$ 0		(365,000)
Gross, Ending balance		116,733,000		116,733,000
Accumulated Amortization, Beginning balance				71,593,000
Expense		1,844,000	$ 3,318,000	3,736,000	$ 6,358,000
Accumulated Amortization, Ending balance		75,329,000		75,329,000
Net beginning				45,895,000
Net ending		41,404,000		41,404,000
Developed Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Gross, Beginning balance				27,363,000
Additions & Adjustments, net	[1]			56,000
Gross, Ending balance		27,419,000		27,419,000
Accumulated Amortization, Beginning balance				21,437,000
Expense				1,511,000
Accumulated Amortization, Ending balance		22,948,000		22,948,000
Net beginning				5,926,000
Net ending		4,471,000		$ 4,471,000
Developed Technology Rights [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization period				2 years
Developed Technology Rights [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization period				7 years
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization period				10 years
Gross, Beginning balance				$ 30,093,000
Additions & Adjustments, net	[1]			81,000
Gross, Ending balance		30,174,000		30,174,000
Accumulated Amortization, Beginning balance				16,303,000
Expense				1,059,000
Accumulated Amortization, Ending balance		17,362,000		17,362,000
Net beginning				13,790,000
Net ending		12,812,000		12,812,000
Customer Lists [Member]
Finite-Lived Intangible Assets [Line Items]
Gross, Beginning balance				25,304,000
Gross, Ending balance		25,304,000		25,304,000
Accumulated Amortization, Beginning balance				22,903,000
Expense				48,000
Accumulated Amortization, Ending balance		22,951,000		22,951,000
Net beginning				2,401,000
Net ending		2,353,000		$ 2,353,000
Customer Lists [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization period				4 years
Customer Lists [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization period				7 years
Dealer and Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross, Beginning balance				$ 34,139,000
Additions & Adjustments, net	[1]			(527,000)
Impairment				(365,000)
Gross, Ending balance		33,247,000		33,247,000
Accumulated Amortization, Beginning balance				10,753,000
Expense				1,098,000
Accumulated Amortization, Ending balance		11,851,000		11,851,000
Net beginning				23,386,000
Net ending		21,396,000		$ 21,396,000
Dealer and Customer Relationships [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization period				7 years
Dealer and Customer Relationships [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization period				12 years
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization period				5 years
Gross, Beginning balance				$ 589,000
Gross, Ending balance		589,000		589,000
Accumulated Amortization, Beginning balance				197,000
Expense				20,000
Accumulated Amortization, Ending balance		217,000		217,000
Net beginning				392,000
Net ending		$ 372,000		$ 372,000

[1] Amounts also include any net changes in intangible asset balances for the periods presented that resulted from foreign currency translations.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended	12 Months Ended
	Aug. 31, 2020	May 31, 2020	Aug. 31, 2020	Feb. 29, 2020
Finite Lived Intangible Assets [Line Items]
Impairment loss	$ 0		$ 365,000
Impairment of goodwill		$ 3,900,000	$ 3,924,000	$ 0
LoJack US SVR [Member]
Finite Lived Intangible Assets [Line Items]
Impairment loss	0	3,900,000
Dealer Relationships [Member]
Finite Lived Intangible Assets [Line Items]
Impairment loss	$ 0	$ 400,000

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GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Future Amortization Expense) (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Feb. 29, 2020
Fiscal Year
2021 (remainder)	$ 3,895
2022	5,830
2023	5,610
2024	4,498
2025	4,374
Thereafter	17,197
Net	$ 41,404	$ 45,895

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GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Goodwill) (Details) - USD ($)	3 Months Ended	6 Months Ended	12 Months Ended
	May 31, 2020	Aug. 31, 2020	Feb. 29, 2020
Goodwill [Line Items]
Balance as of February 29, 2020	$ 106,335,000	$ 106,335,000
Impairment loss	(3,900,000)	(3,924,000)	$ 0
Effect of exchange rate change on goodwill		(249,000)
Balance as of August 31, 2020		102,162,000	106,335,000
Software & Subscription Services [Member]
Goodwill [Line Items]
Balance as of February 29, 2020	55,132,000	55,132,000
Effect of exchange rate change on goodwill		(249,000)
Balance as of August 31, 2020		54,883,000	55,132,000
Telematics Products [Member]
Goodwill [Line Items]
Balance as of February 29, 2020	39,180,000	39,180,000
Balance as of August 31, 2020		39,180,000	39,180,000
LoJack U.S. SVR Products [Member]
Goodwill [Line Items]
Balance as of February 29, 2020	$ 12,023,000	12,023,000
Impairment loss		(3,924,000)
Balance as of August 31, 2020		$ 8,099,000	$ 12,023,000

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OTHER ASSETS (Schedule of Other Assets) (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Feb. 29, 2020
Other Assets Noncurrent Disclosure [Abstract]
Deferred cost	$ 6,114	$ 7,818
Deferred compensation plan assets	6,494	6,041
Lease receivables, non-current	7,830	5,992
Prepaid commissions	2,191	2,318
Other	2,403	2,599
Total	$ 25,032	$ 24,768

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019
Revenues:
Revenues	$ 83,537	$ 93,236	$ 163,752	$ 182,306
Cost of revenues:
Cost of revenues	52,727	55,566	101,889	109,225
Gross profit	30,810	37,670	61,863	73,081
Operating expenses:
Research and development	6,989	7,924	13,313	14,810
Selling and marketing	13,493	15,868	26,379	30,515
General and administrative	13,899	12,893	27,568	30,377
Intangible asset amortization	1,844	3,318	3,736	6,358
Restructuring	551	2,272	2,459	2,272
Impairment loss	286		4,575
Total operating expenses	37,062	42,275	78,030	84,332
Operating loss	(6,252)	(4,605)	(16,167)	(11,251)
Non-operating income (expense):
Investment income	680	1,256	698	3,337
Interest expense	(3,857)	(5,555)	(7,934)	(11,011)
Other income (expense)	217	193	9	(206)
Total non-operating expense	(2,960)	(4,106)	(7,227)	(7,880)
Loss before income taxes and impairment loss in investment of affiliate	(9,212)	(8,711)	(23,394)	(19,131)
Income tax benefit (provision)	(266)	1,342	(506)	3,599
Loss before impairment loss in investment of affiliate	(9,478)	(7,369)	(23,900)	(15,532)
Impairment loss in investment of affiliate				(530)
Net loss	$ (9,478)	$ (7,369)	$ (23,900)	$ (16,062)
Loss per share:
Basic	$ (0.28)	$ (0.22)	$ (0.70)	$ (0.48)
Diluted	$ (0.28)	$ (0.22)	$ (0.70)	$ (0.48)
Shares used in computing loss per share:
Basic	34,256	33,568	34,140	33,475
Diluted	34,256	33,568	34,140	33,475
Comprehensive income (loss):
Net loss	$ (9,478)	$ (7,369)	$ (23,900)	$ (16,062)
Other comprehensive income (loss):
Foreign currency translation adjustments	935	(1,018)	(800)	(1,287)
Total comprehensive loss	(8,543)	(8,387)	(24,700)	(17,349)
Products [Member]
Revenues:
Revenues	50,943	64,174	104,049	129,937
Cost of revenues:
Cost of revenues	36,792	38,283	72,788	78,089
Application Subscriptions and Other Services [Member]
Revenues:
Revenues	32,594	29,062	59,703	52,369
Cost of revenues:
Cost of revenues	$ 15,935	$ 17,283	$ 29,101	$ 31,136

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FINANCING ARRANGEMENTS (Summary of Debt) (Details) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2020	Feb. 29, 2020
Debt Instrument [Line Items]
Total term debt	$ 262,627	$ 271,970
Unamortized discount and issuance costs	(58,161)	(61,763)
Less: Current portion of long-term term debt	(5,184)	(33,119)
Long-term debt, net of current portion	$ 199,282	177,088
2020 Convertible Notes, 1.625% Fixed Rate [Member]
Debt Instrument [Line Items]
Maturity Date	May 15, 2020
Effective Interest Rate	6.20%
Total term debt		27,599
2025 Convertible Notes, 2.00% Fixed Rate [Member]
Debt Instrument [Line Items]
Maturity Date	Aug. 01, 2025
Effective Interest Rate	7.56%
Total term debt	$ 230,000	230,000
Due to Factors [Member]
Debt Instrument [Line Items]
Effective Interest Rate	4.70%
Maturity Date	2020 2021 2022 2023 2024
Total term debt	$ 12,627	$ 14,371
Revolving Credit Facility
Debt Instrument [Line Items]
Maturity Date	Mar. 30, 2022
Effective Interest Rate	3.50%
Total term debt	$ 20,000

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FINANCING ARRANGEMENTS (Summary of Debt) (Parenthetical) (Details)	Aug. 31, 2020	Feb. 29, 2020
2020 Convertible Notes, 1.625% Fixed Rate [Member]
Debt Instrument [Line Items]
Fixed interest rate	1.625%	1.625%
2025 Convertible Notes, 2.00% Fixed Rate [Member]
Debt Instrument [Line Items]
Fixed interest rate	2.00%	2.00%

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FINANCING ARRANGEMENTS (Details)		1 Months Ended	3 Months Ended		6 Months Ended
	Mar. 30, 2018 USD ($)	Jul. 31, 2018 USD ($) $ / shares shares	Aug. 31, 2020 USD ($)	Aug. 31, 2019 USD ($)	Aug. 31, 2020 USD ($)	Aug. 31, 2019 USD ($)	May 15, 2020 USD ($)	Feb. 29, 2020 USD ($)	Apr. 12, 2019 USD ($)
Debt Instrument [Line Items]
Remaining principal amount			$ 262,627,000		$ 262,627,000			$ 271,970,000
Synovia Solutions LLC (“Synovia”) [Member]
Debt Instrument [Line Items]
Fair value of debt									$ 19,700,000
Pre-tax cost of debt percentage									4.70%
Unamortized discount									$ 1,500,000
Interest expense related to debt recognized			100,000	$ 200,000	300,000	$ 300,000
Revenue recognized from arrangements with financial institutions					$ 3,300,000	$ 3,100,000
Revolving Credit Facility
Debt Instrument [Line Items]
Maturity date					Mar. 30, 2022
Remaining principal amount			20,000,000		$ 20,000,000
Maximum borrowing capacity	$ 50,000,000.0
Maturity date	Mar. 30, 2022
Credit facility bear interest					highest of (i) 0%, (ii) the rate of interest publicly announced by JP Morgan Chase Bank, N.A. (the “Agent”) as its prime rate in effect at its principal office in New York City, (iii) the overnight bank funding rate as determined by the Federal Reserve Bank of New York plus 0.50% and (iv) the LIBOR-based rate for a one-month interest period on such day plus 1%; or (b) for Eurodollar loans, the higher of (x) 1.00% and (y) the LIBOR-based rate for one, three or six months (as selected by the Company) for Eurodollar deposits. An applicable margin is added based on the Company’s senior leverage ratio, ranging from 1.50% to 2.00% for base rate loans, and from 2.50% to 3.00% for Eurodollar loans. We will also pay a commitment fee based on our senior leverage ratio ranging from 0.40% to 0.50%, payable quarterly in arrears, on the average daily unused amount of the Credit Facility
Credit facility interest rate					0.00%
Borrowings outstanding			$ 20,000,000.0		$ 20,000,000.0
Revolving Credit Facility | Federal Home Loan Bank Of New York [Member]
Debt Instrument [Line Items]
Variable interest rate					0.50%
Revolving Credit Facility | LIBOR [Member]
Debt Instrument [Line Items]
Variable interest rate					1.00%
Description of variable rate basis					LIBOR-based rate for one, three or six months
Revolving Credit Facility | Eurodollar [Member]
Debt Instrument [Line Items]
Variable interest rate					1.00%
Revolving Credit Facility | Minimum [Member] | Eurodollar [Member]
Debt Instrument [Line Items]
Senior leverage ratio			2.50%		2.50%
Revolving Credit Facility | Minimum [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Senior leverage ratio			1.50%		1.50%
Revolving Credit Facility | Minimum [Member] | Prime Rate [Member]
Debt Instrument [Line Items]
Senior leverage ratio			0.40%		0.40%
Revolving Credit Facility | Maximum [Member] | Eurodollar [Member]
Debt Instrument [Line Items]
Senior leverage ratio			3.00%		3.00%
Revolving Credit Facility | Maximum [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Senior leverage ratio			2.00%		2.00%
Revolving Credit Facility | Maximum [Member] | Prime Rate [Member]
Debt Instrument [Line Items]
Senior leverage ratio			0.50%		0.50%
2025 Convertible Notes [Member]
Debt Instrument [Line Items]
Debt instrument, face amount		$ 230,000,000.0
Maturity date		Aug. 01, 2025
Interest rate (as a percent)		2.00%
Debt instrument, redemption, description					We may redeem the notes at our option at any time on or after August 6, 2022 at a cash redemption price equal to the principal amount plus accrued interest, but only if the last reported sale price per share of our stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice.
Initial conversion price | $ / shares		$ 30.7450
Number of common stock with hedge transactions | shares		7,480,000
Conversion rate of shares of common stock		41.3875
Payments for notes hedges		$ 21,200,000
Purchase of note hedges, net of tax		15,900,000
2025 Convertible Notes [Member] | Additional Paid-in Capital [Member]
Debt Instrument [Line Items]
Notes charge, equity component		$ 51,900,000
2020 Convertible Notes [Member]
Debt Instrument [Line Items]
Interest rate (as a percent)							1.625%
Remaining principal amount							$ 27,600,000
2025 Convertible Notes [Member]
Debt Instrument [Line Items]
Fair value of convertible notes			$ 191,000,000		$ 191,000,000			$ 197,000,000

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RESTRUCTURING CHARGES (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		27 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020
Restructuring Cost And Reserve [Line Items]
Restructuring charges	$ 551	$ 2,272	$ 2,459	$ 2,272	$ 14,900
Severance and employee related costs			2,300		9,100
Restructuring charges			200		5,800
Stock-based compensation			$ 900
Canton, Massachusetts [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring charges					$ 3,300
Sub lease commenced date					May 31, 2020

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RESTRUCTURING CHARGES - Summary of Charges Resulting from Implementation of Restructuring Plan (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		27 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020
Restructuring Cost And Reserve [Line Items]
Restructuring charges	$ 551	$ 2,272	$ 2,459	$ 2,272	$ 14,900
Personnel [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring charges	480	1,062	2,285	1,062
Facilities [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring charges	71	1,210	174	1,210
Cost of Revenue [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring charges	468	1,559	447	1,559
Cost of Revenue [Member] | Personnel [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring charges	397	349	273	349
Cost of Revenue [Member] | Facilities [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring charges	71	1,210	174	1,210
Selling and Marketing [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring charges		447	30	447
Selling and Marketing [Member] | Personnel [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring charges		447	30	447
General and Administrative Expenses [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring charges	83	266	1,982	266
General and Administrative Expenses [Member] | Personnel [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring charges	$ 83	$ 266	$ 1,982	$ 266

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RESTRUCTURING CHARGES - Summary of Activity Resulting from Implementation of Restructuring Plan within Other Current and Non-current Liabilities (Details) $ in Thousands	6 Months Ended
	Aug. 31, 2020 USD ($)
Restructuring Cost And Reserve [Line Items]
Restructuring liabilities, Beginning Balance	$ 2,742
Charges	2,459
Payments	(2,296)
Restructuring liabilities, Ending Balance	2,905
Personnel [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring liabilities, Beginning Balance	2,383
Charges	2,285
Payments	(1,848)
Restructuring liabilities, Ending Balance	2,820
Facilities [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring liabilities, Beginning Balance	359
Charges	174
Payments	(448)
Restructuring liabilities, Ending Balance	$ 85

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Leases (Narrative) (Details) $ in Millions	3 Months Ended
	Aug. 31, 2020 USD ($) Facility
Lessee Lease Description [Line Items]
Number of office sublet | Facility	1
Impairment loss on operating lease	$ 0.2
Other Property and Equipment [Member]
Lessee Lease Description [Line Items]
Impairment loss on operating lease	$ 0.1

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LEASES (Summary of Lease-related Assets and Liabilities) (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Feb. 29, 2020
Schedule Of Lease Assets And Liabilities [Abstract]
Operating lease right-of-use assets	$ 23,428	$ 20,626
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	camp:OperatingLeaseRightOfUseAssetsMember
Operating lease liabilities (current)	$ 6,201	4,662
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:OtherCurrentLiabilitiesMember
Operating lease liabilities	$ 25,225	$ 24,279
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	camp:OperatingLeaseLiabilitiesMember
Total lease liabilities	$ 31,426

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LEASES (Summary of Lease Costs Included in Condensed Consolidated Statements of Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019
Lease Cost [Abstract]
Operating lease cost	$ 1,837	$ 1,972	$ 3,426	$ 3,973
Short-term lease cost	82	252	163	564
Variable lease cost	114	43	228	73
Total lease cost	$ 2,033	$ 2,267	$ 3,817	$ 4,610

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LEASES (Schedule of Supplemental Information Related to Operating Leases) (Details) $ in Thousands	6 Months Ended
	Aug. 31, 2020 USD ($)
Leases [Abstract]
Cash paid for amounts included in the measurement of operating lease liabilities	$ 3,605
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 5,425
Weighted average remaining lease term	6 years 5 months 23 days
Weighted average discount rate	5.17%

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (23,900)	$ (16,062)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation expense	9,983	9,036
Intangible asset amortization	3,736	6,358
Stock-based compensation expense	6,469	5,726
Amortization of discount and debt issuance costs	5,219	7,606
Impairment loss of goodwill and intangible assets	4,309
Impairment of operating lease right-of-use (ROU) assets and other long-lived assets	266	1,210
Noncash operating lease cost	2,588	3,100
Revenue assigned to factors	(3,349)	(3,109)
Deferred tax assets, net	(105)	(3,437)
Other	301	986
Changes in operating assets and liabilities:
Accounts receivable	3,723	5,763
Inventories	5,209	(11,429)
Prepaid expenses and other assets	(3,204)	(273)
Accounts payable	1,929	(4,155)
Accrued liabilities	6,779	(2,072)
Deferred revenue	(2,378)	2,012
Operating lease liabilities	(3,454)	(1,640)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	14,121	(380)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of marketable securities	6,264	27,340
Purchases of marketable securities	(6,264)	(17,617)
Capital expenditures	(7,563)	(10,720)
Acquisitions, net of cash acquired		(60,634)
Other		(527)
NET CASH USED IN INVESTING ACTIVITIES	(7,563)	(62,158)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Paycheck Protection Program Loan	10,000
Repayment of Paycheck Protection Program Loan	(10,000)
Proceeds from revolving credit facility	20,000
Repayment of 2020 Convertible Notes	(27,599)
Payments of issuance cost on the revolving credit facility	(56)
Taxes paid related to net share settlement of vested equity awards	(1,485)	(1,729)
Proceeds from exercise of stock options and contributions to employee stock purchase plan	909	995
NET CASH USED IN FINANCING ACTIVITIES	(8,231)	(734)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	1,414	456
Net change in cash and cash equivalents	(259)	(62,816)
Cash and cash equivalents at beginning of period	107,404	256,500
Cash and cash equivalents at end of period	$ 107,145	$ 193,684

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LEASES (Schedule of Reconciles the Undiscounted Cash Flows for Operating Lease Liabilities) (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Feb. 29, 2020
Operating Lease Liabilities Payments Due [Abstract]
Remainder of 2021	$ 4,348
2022	7,106
2023	6,588
2024	4,891
2025	3,113
Thereafter	10,057
Total minimum lease payments	36,103
Less imputed interest	(4,677)
Total lease liabilities	31,426
Less current obligations under leases	(6,201)	$ (4,662)
Long-term lease obligations	$ 25,225	$ 24,279

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INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 266	$ (1,342)	$ 506	$ (3,599)

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EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019
Earnings Per Share [Abstract]
Net loss	$ (9,478)	$ (7,369)	$ (23,900)	$ (16,062)
Basic and diluted weighted average number of common shares outstanding	34,256	33,568	34,140	33,475
Loss per share:
Basic	$ (0.28)	$ (0.22)	$ (0.70)	$ (0.48)
Diluted	$ (0.28)	$ (0.22)	$ (0.70)	$ (0.48)

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EARNINGS PER SHARE (Narrative) (Details) - shares	3 Months Ended		6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019
Earnings Per Share [Abstract]
Diluted earnings per share for the conversion value of the notes	0	0	0	0

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STOCKHOLDERS' EQUITY (Schedule of Stock-based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 2,846	$ 3,183	$ 6,469	$ 5,726
Cost of Revenues [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	203	162	378	337
Research and Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	723	633	1,369	1,046
Selling and Marketing [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	760	982	1,265	1,651
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 1,160	$ 1,406	2,582	$ 2,692
Restructuring [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense			$ 875

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STOCKHOLDERS' EQUITY (Summary of Stock Option Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		6 Months Ended
	Feb. 29, 2020	Aug. 31, 2020
Number of Options
Outstanding, beginning balance		1,071
Granted
Exercised		(70)
Forfeited or expired		(152)
Outstanding, ending balance	1,071	849
Exercisable		578
Weighted Average Exercise Price
Outstanding, beginning balance		$ 14.65
Granted
Exercised		4.03
Forfeited or expired		17.52
Outstanding, ending balance	$ 14.65	15.02
Exercisable		$ 14.37
Weighted average remaining contractual life, Outstanding	6 years 2 months 12 days	6 years
Weighted average remaining contractual life, Exercisable		5 years 1 month 6 days
Aggregate intrinsic value, Outstanding		$ 309
Aggregate intrinsic value, Exercisable		$ 309

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STOCKHOLDERS' EQUITY (Summary of Restricted Stock Shares and RSUs Activity) (Details) shares in Thousands	6 Months Ended
	Aug. 31, 2020 $ / shares shares
Number of Restricted Shares, PSUs and RSUs
Outstanding, beginning balance	2,215
Granted	1,778
Vested	(611)
Forfeited	(152)
Outstanding, ending balance	3,230
Weighted Average Grant Date Fair Value
Outstanding, beginning balance | $ / shares	$ 14.47
Granted | $ / shares	7.86
Vested | $ / shares	14.97
Forfeited | $ / shares	13.46
Outstanding, ending balance | $ / shares	$ 10.78
Vested, Shares Retained to Cover Statutory Minimum Withholding Taxes	199

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STOCKHOLDERS' EQUITY (Narrative) (Details) $ in Millions	6 Months Ended
	Aug. 31, 2020 USD ($)
Equity [Abstract]
Unrecognized share-based compensation cost	$ 29.5
Unrecognized compensation cost, recognition period	3 years 8 months 12 days

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CONCENTRATION OF RISK (Narrative) (Details) - Supplier	3 Months Ended		6 Months Ended		12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019	Feb. 29, 2020
Customer Concentration Risk [Member] | Major Customer One [Member] | Heavy Equipment Industry [Member] | Revenues [Member]
Concentration Risk [Line Items]
Concentration percentage	16.00%	10.00%	15.00%	12.00%
Customer Concentration Risk [Member] | Major Customer One [Member] | Heavy Equipment Industry [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration percentage			16.00%		19.00%
Supplier Concentration Risk [Member] | Inventory Purchases [Member]
Concentration Risk [Line Items]
Concentration percentage	54.00%	51.00%	58.00%	48.00%
Number of suppliers	4	3	4	3
Supplier Concentration Risk [Member] | Accounts Payable [Member] | Minimum [Member]
Concentration Risk [Line Items]
Concentration percentage			10.00%

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CONCENTRATION OF RISK - Schedule of Significant Customers and Significant Suppliers Concentration Risk Percentage (Details) - Accounts Payable [Member] - Supplier Concentration Risk [Member]	6 Months Ended	12 Months Ended
	Aug. 31, 2020	Feb. 29, 2020
Supplier A [Member]
Concentration Risk [Line Items]
Concentration percentage	14.00%	11.00%
Supplier B [Member]
Concentration Risk [Line Items]
Concentration percentage	9.00%	11.00%

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock and Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income [Member]
Balances at Feb. 28, 2019	$ 205,653	$ 208,541	$ (2,227)	$ (661)
Stock-based compensation expense		5,726
Shares issued on net share settlement of equity awards		(1,729)
Exercise of stock options and contributions to ESPP		995
Net loss	(16,062)		(16,062)
Foreign currency translation adjustment				(1,287)
Balances at Aug. 31, 2019	193,296	213,533	(18,289)	(1,948)
Balances at May. 31, 2019	199,112	210,962	(10,920)	(930)
Stock-based compensation expense		3,183
Shares issued on net share settlement of equity awards		(1,510)
Exercise of stock options and contributions to ESPP		898
Net loss	(7,369)		(7,369)
Foreign currency translation adjustment				(1,018)
Balances at Aug. 31, 2019	193,296	213,533	(18,289)	(1,948)
Balances at Feb. 29, 2020	137,919	220,825	(81,531)	(1,375)
Stock-based compensation expense		6,469
Shares issued on net share settlement of equity awards		(1,485)
Exercise of stock options and contributions to ESPP		909
Net loss	(23,900)		(23,900)
Foreign currency translation adjustment				(800)
Balances at Aug. 31, 2020	118,978	226,718	(105,565)	(2,175)
Balances (ASC 326 [Member]) at Aug. 31, 2020			(134)
Balances at May. 31, 2020	125,194	224,391	(96,087)	(3,110)
Stock-based compensation expense		2,846
Shares issued on net share settlement of equity awards		(1,405)
Exercise of stock options and contributions to ESPP		886
Net loss	(9,478)		(9,478)
Foreign currency translation adjustment				935
Balances at Aug. 31, 2020	$ 118,978	$ 226,718	(105,565)	$ (2,175)
Balances (ASC 326 [Member]) at Aug. 31, 2020			$ (134)

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PRODUCT WARRANTIES (Details) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2020	Feb. 29, 2020
Valuation And Qualifying Accounts Disclosure [Line Items]
Product performance	$ 2,464	$ 987
Warranty Reserves [Member]
Valuation And Qualifying Accounts Disclosure [Line Items]
Product performance	$ 1,400
Minimum [Member]
Valuation And Qualifying Accounts Disclosure [Line Items]
Warranty Term	1 year
Maximum [Member]
Valuation And Qualifying Accounts Disclosure [Line Items]
Warranty Term	2 years

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PRODUCT WARRANTIES - Activity in Accrued Warranty Costs Liability (Details) - Warranty Reserves [Member] - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period	$ 987	$ 1,399
Charged to costs and expenses	1,995	1,100
Deductions	(518)	(700)
Balance at end of period	$ 2,464	$ 1,799

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OTHER FINANCIAL INFORMATION (Schedule of Other Current Liabilities) (Details) - USD ($) $ in Thousands		Aug. 31, 2020	Feb. 29, 2020
Other Financial Information Schedule Of Other Current Liabilities Details [Abstract]
Operating lease liabilities		$ 6,201	$ 4,662
Taxes payable		2,476	2,266
Warranty reserves		2,464	987
Customer deposit		2,331	1,377
Litigation reserve		2,200	1,500
Interest payable		365	481
Other	[1]	4,982	4,880
Total other current liabilities		$ 21,019	$ 16,153

[1] Amount represents accruals for various operating expense such as professional fees, vendor incentives and other estimates that are expected to be paid within the next 12 months

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OTHER FINANCIAL INFORMATION (Schedule of Other Non-Current Liabilities) (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Feb. 29, 2020
Other Financial Information [Abstract]
Deferred revenue	$ 25,104	$ 27,452
Deferred compensation plan liability	6,542	5,919
Other	3,384	1,673
Total other non-current liabilities	$ 35,030	$ 35,044

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OTHER FINANCIAL INFORMATION (Schedule of Interest Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019
Condensed Income Statements, Captions [Line Items]
Amortization of discount and issue costs			$ 5,219	$ 7,606
Other interest expense	$ 378	$ 252	599	410
Total interest expense	3,857	5,555	7,934	11,011
2020 Convertible Notes [Member]
Condensed Income Statements, Captions [Line Items]
Stated interest		498	93	996
Amortization of discount and issue costs		1,495	289	2,951
Interest expense on convertible notes		1,993	382	3,947
2025 Convertible Notes [Member]
Condensed Income Statements, Captions [Line Items]
Stated interest	1,150	1,150	2,313	2,326
Amortization of discount and issue costs	2,329	2,160	4,640	4,328
Interest expense on convertible notes	$ 3,479	$ 3,310	$ 6,953	$ 6,654

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OTHER FINANCIAL INFORMATION (Schedule of Interest Expense) (Parenthetical) (Details)	Aug. 31, 2020	Aug. 31, 2019
2020 Convertible Notes [Member]
Condensed Income Statements, Captions [Line Items]
Interest rate (as a percent)	1.625%	1.625%
2025 Convertible Notes [Member]
Condensed Income Statements, Captions [Line Items]
Interest rate (as a percent)	2.00%	2.00%

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OTHER FINANCIAL INFORMATION (Schedule of Cash Payments for Interest and Income Taxes) (Details) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019
Cash payments for interest and income taxes:
Interest expense paid	$ 2,780	$ 3,358
Income tax paid, net of refunds	$ 447	$ 466

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SEGMENT INFORMATION AND GEOGRAPHIC DATA (Narrative) (Details)	3 Months Ended		9 Months Ended	12 Months Ended
	May 31, 2020 Segment	Feb. 29, 2020 Unit	Nov. 30, 2019 Segment Unit	Feb. 29, 2020 Segment
Segment Reporting [Abstract]
Number of reportable segments | Segment	3		2	2
Number of reporting units		4	2
Number of reporting units under each reportable segments		2

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SEGMENT INFORMATION AND GEOGRAPHIC DATA (Schedule of Segment Information) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019
Segment Reporting Information [Line Items]
Revenues	$ 83,537	$ 93,236	$ 163,752	$ 182,306
Gross profit	$ 30,810	$ 37,670	$ 61,863	$ 73,081
Gross margin	37.00%	40.00%	38.00%	40.00%
Adjusted EBITDA	$ 5,403	$ 10,647	$ 11,910	$ 18,216
Reportable Segments [Member] | Software & Subscription Services [Member]
Segment Reporting Information [Line Items]
Revenues	33,696	31,205	61,725	56,716
Gross profit	$ 16,502	$ 13,360	$ 30,317	$ 23,760
Gross margin	49.00%	43.00%	49.00%	42.00%
Adjusted EBITDA	$ 7,573	$ 3,947	$ 13,927	$ 6,321
Reportable Segments [Member] | Telematics Systems [Member]
Segment Reporting Information [Line Items]
Revenues	40,732	48,934	86,271	100,132
Gross profit	$ 10,961	$ 18,184	$ 26,081	$ 38,228
Gross margin	27.00%	37.00%	30.00%	38.00%
Adjusted EBITDA	$ (1,476)	$ 5,341	$ 1,647	$ 13,204
Reportable Segments [Member] | LoJack U.S. SVR Products [Member]
Segment Reporting Information [Line Items]
Revenues	9,109	13,097	15,756	25,458
Gross profit	$ 3,347	$ 6,126	$ 5,465	$ 11,093
Gross margin	37.00%	47.00%	35.00%	44.00%
Adjusted EBITDA	$ 227	$ 2,173	$ (1,346)	$ 1,303
Reportable Segments [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	$ (921)	$ (814)	$ (2,318)	$ (2,612)

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SEGMENT INFORMATION AND GEOGRAPHIC DATA (Summary of Adjusted EBITDA) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		27 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020
Segment Information Summary Of Adjustments Results Of Ebitda Details [Abstract]
Net loss	$ (9,478)	$ (7,369)	$ (23,900)	$ (16,062)
Investment income	(680)	(1,256)	(698)	(3,337)
Interest expense	3,857	5,555	7,934	11,011
Income tax expense (benefit)	266	(1,342)	506	(3,599)
Depreciation	5,073	5,191	9,983	9,036
Amortization of intangible assets	1,844	3,318	3,736	6,358
Stock-based compensation	2,846	3,183	5,594	5,726
Impairment loss	286		4,575
Restructuring charges	551	2,272	2,459	2,272	$ 14,900
Non-recurring legal expenses	170	777	963	4,584
Acquisition and integration related expenses		(46)		(1,190)
Other	668	272	758	1,037
Adjusted EBITDA	$ 5,403	$ 10,647	$ 11,910	$ 18,216

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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Aug. 31, 2020

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

CalAmp Corp. (referred to herein as “CalAmp”, “the Company”, “we”, “our”, or “us”) is a global technology solutions pioneer leading transformation to a mobile connected economy. We help reinvent businesses and improve lives around the globe with technology solutions that streamline complex mobile Internet of Things (“IoT”) deployments through wireless connectivity solutions and derived data intelligence. Our software applications, scalable cloud services, and intelligent devices collect and assess business-critical data anywhere in the world from industrial machines, commercial and passenger vehicles, their drivers and contents. We are a global organization that is headquartered in Irvine, California.

Historically, we had two reportable segments, Software & Subscription Services and Telematics Systems. During the first quarter of fiscal 2021, our President and Chief Executive Officer (the “CEO”), who is our current Chief Operating Decision Maker (“CODM”), realigned our operational structure into three reportable segments: Software & Subscriptions Services, Telematics Products and LoJack U.S. SVR Products. We have recast certain prior period amounts to conform to the way our CODM regularly reviews segment performance. 

In March 2020, the World Health Organization declared the spread of COVID-19 as a pandemic. The full impact of the COVID-19 outbreak remains uncertain as of the time of this report given the diversity of rules and regulations in the U.S. and other countries in which we operate. The pandemic has resulted in travel restrictions, prohibitions of non-essential activities, disruption and shutdown of businesses and greater uncertainty in global financial markets. During the three months ended August 31, 2020, there was an increase in the number of installations as U.S. auto dealerships and school districts reopened from government-imposed pandemic shutdowns, which resulted in a sequential increase in our revenue since first quarter of fiscal 2021. The effect of the outbreak may continue to impact our operating results depending on the severity of the pandemic and the actions taken or to be taken by governments and private businesses in relation to its containment. We cannot predict the extent to which the COVID-19 outbreak will negatively impact our business or operating results at this time.

We have considered all known and reasonably available information that existed as of August 31, 2020, in making accounting judgments, estimates and disclosures. We are monitoring the potential effects of the health care related and economic conditions of COVID-19 in assessing certain matters including (but not limited to) supply chain disruptions, decreases in customer demand for our products and services, potential longer-term effects on our customer and distribution channels particularly in the U.S. and relevant end markets as well as other developments. If the impact results in longer-term closures of businesses and economic recessionary conditions, we may recognize additional material asset impairments, charges for uncollectible accounts receivable in future periods and incur additional restructuring charges.

Certain notes and other information included in the audited financial statements in our Annual Report on Form 10-K for the fiscal year ended February 29, 2020 are condensed in or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with our 2020 Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission (“SEC”) on May 5, 2020.

In the opinion of our management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary to present fairly our financial position at August 31, 2020 and our results of operations for the three and six months ended August 31, 2020 and 2019. The results of operations for such periods are not necessarily indicative of results to be expected for the full fiscal year ending February 28, 2021.

All intercompany transactions and accounts have been eliminated in consolidation.

Revenue Recognition

We recognize revenue as follows:

Products. We recognize revenue from product and accessories sales upon transfer of control of promised products to customers in an amount that reflects the transaction price, which is generally the stand-alone selling prices of the promised goods. For product shipments made on the basis of “FOB Destination” terms, revenue is recorded when the products reach the customer. Customers generally do not have a right of return except for defective products returned during the warranty period. We record estimated commitments related to customer incentive programs as reductions of revenues.

Software-as-a-Service (“SaaS”). We recognize our SaaS revenues and related cost of revenues in our Application subscriptions and other service revenues and cost of revenues on SaaS arrangements that combine various hardware devices over a stipulated service period.

Our integrated SaaS-based solutions for our fleet management, vehicle finance (which we are exiting) and certain other verticals provide customers with the ability to wirelessly communicate with monitoring devices installed in vehicles and other mobile or remote assets through our software applications. The transaction price for a typical SaaS arrangement includes the price for the customized device, installation and application subscriptions. We have applied our judgment in determining that these integrated arrangements typically represent single performance obligations satisfied over time.

Accordingly, we defer the recognition of revenue for the customized devices that only function with our applications and are sold only on an integrated basis with our proprietary applicable subscriptions. Such customized devices and the application services are not sold separately. In such circumstances, the associated device related costs are recorded as deferred costs on the balance sheet. Generally, these service arrangements do not provide the customer with the right to take possession of the software supporting the subscription service at any time. Revenues from subscription services are recognized ratably on a straight-line basis over the term of the subscription. The deferred revenue and deferred cost amounts are amortized to application subscriptions and other services revenue and cost of revenues, respectively, on a straight-line basis over the estimated average in-service lives of these devices, which are three years in the vehicle finance and four to five years in the fleet management verticals. In certain fleet management contracts, we provide devices as part of the subscription contracts but we retain control of such devices. Under such arrangements, the cost of the devices is capitalized as property and equipment and depreciated over the estimated useful life of three to five years. The related subscription revenues of these arrangements are recognized as services are rendered. Our deferred revenue under ASC 606 also includes prepayments from our customers for various subscription services but does not include future subscription fees associated with customers’ unexercised contract renewal rights.

In certain customer arrangements, we sell devices and monitoring services separately to customers and sell similar devices on a stand-alone basis to licensees. Accordingly, we recognize revenues for the sales of the devices upon transfer of control to the customer and recognize revenue for the related monitoring services over the service period. The allocation of the transaction price is based on relative estimated stand-alone selling prices for the devices and the monitoring services.

Professional Services. We also provide various professional services to customers. These include project management, engineering services and installation services, which are typically distinct from other performance obligations and are recognized as the related services are performed. For certain professional service contracts, we recognize revenue over time based on the proportion of total costs incurred to-date over the estimated cost of the contract, which is an input method.

Sales taxes. We have elected to record revenue net of taxes collected from customers that are remitted to governmental authorities, with the collected taxes recorded within the caption Other current liabilities until remitted to the relevant government authority.

Contract Balances. Timing of revenue recognition may differ from the timing on our invoicing to customers. Contract liabilities are comprised of billings to or payments received from our customers in advance of performance under the contract. We refer to these contract liabilities as “Deferred Revenues” in the accompanying condensed consolidated financial statements. During fiscal quarter ended August 31, 2020, we recognized $23.8 million in revenue from the deferred revenue balance of $62.2 million as of February 29, 2020. Certain incremental costs of obtaining a contract with a customer consist of sales commissions, which are recognized on a straight-line basis over the life of the corresponding contracts. Prepaid commissions totaled $4.1 million as of August 31, 2020, of which $2.2 million was classified as non-current.

We disaggregate revenue from contracts with customers into reportable segments, geography, type of goods and services and timing of revenue recognition. See Note 15 for our revenue by segment and geography. The disaggregation of revenue by type of goods and services and by timing of revenue recognition, which reflect the immaterial corrections as discussed below, was as follows (in thousands):

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Revenue by type of goods and services:
Telematics devices and accessories	$	50,943	$	64,174	$	104,049	$	129,937
Rental income and other services		5,976		5,750		8,413		10,180
Recurring application subscriptions		26,618		23,312		51,290		42,189
Total	$	83,537	$	93,236	$	163,752	$	182,306

	Three Months Ended				Six Months Ended
	August 31,				August 31,
	2020		2019		2020		2019
Revenue by timing of revenue recognition:
Revenue recognized at a point in time	$	56,647	$	68,921	$	111,874	$	138,205
Revenue recognized over time		26,890		24,315		51,878		44,101
Total	$	83,537	$	93,236	$	163,752	$	182,306

Telematics devices and accessories presented in the table above include devices sold in customer arrangements that include both the device and monitoring services. Recurring application subscriptions revenues include the amortization for customized devices functional only with application subscriptions.

Remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue on our condensed consolidated balance sheets and unbilled amounts that will be recognized as revenue in future periods. As of August 31, 2020 and February 29, 2020, we have estimated remaining performance obligations for contractually committed revenues of $129.8 million and $134.5 million, respectively. As of August 31, 2020, we expect to recognize approximately 25% in fiscal 2021 and 39% in fiscal 2022. As of February 29, 2020, we expected to recognize approximately 44% in fiscal 2021 and 26% in fiscal 2022. We have utilized the practical expedient exception within ASC 606 and exclude contracts that have original durations of less than one year from the aforementioned remaining performance obligation disclosure.

Revision of Previously Issued Condensed Consolidated Financial Statements. Subsequent to the issuance of the consolidated financial statements for the year ended February 29, 2020, we concluded that the presentation of revenues and cost of revenues should be adjusted to present product and service revenues and the related cost of revenues for each separately in accordance with SEC Regulation S-X, Rule 5-03(b). Additionally, certain historical information in the notes to the condensed consolidated financial statements have been revised to reflect the impact of these corrections. We have determined that the correction of these classification errors is not material to the previously issued consolidated financial statements. The following table summarizes the impact of the immaterial adjustments.

	Three Months Ended August 31, 2019							Six Months Ended August 31, 2019
	As Reported		Adjustment			As Corrected		As Reported		Adjustment			As Corrected
Revenues:
Products	$	62,031	$	2,143		$	64,174	$	125,590	$	4,347		$	129,937
Application subscriptions and other services		31,205		(2,143	)		29,062		56,716		(4,347	)		52,369
Total revenues	$	93,236	$	-		$	93,236	$	182,306	$	-		$	182,306
Cost of revenues:
Products	$	37,721	$	562		$	38,283	$	76,269	$	1,820		$	78,089
Application subscriptions and other services		17,845		(562	)		17,283		32,956		(1,820	)		31,136
Total cost of revenues	$	55,566	$	-		$	55,566	$	109,225	$	-		$	109,225

	Three Months Ended August 31, 2019							Six Months Ended August 31, 2019
	As Reported		Adjustment			As Corrected		As Reported		Adjustment			As Corrected
Revenue by type of goods and services:
Telematics devices and accessories	$	65,891	$	(1,717	)	$	64,174	$	134,059	$	(4,122	)	$	129,937
Rental income and other services		2,036		3,714			5,750		3,983		6,197			10,180
Recurring application subscriptions		25,309		(1,997	)		23,312		44,264		(2,075	)		42,189
Total	$	93,236	$	-		$	93,236	$	182,306	$	-		$	182,306
Revenue by timing of revenue recognition:
Revenue recognized at a point in time	$	65,891	$	3,030		$	68,921	$	134,059	$	4,146		$	138,205
Revenue recognized over time		27,345		(3,030	)		24,315		48,247		(4,146	)		44,101
Total	$	93,236	$	-		$	93,236	$	182,306	$	-		$	182,306

Cash and Cash Equivalents

We consider all highly liquid investments with maturities at date of purchase of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable consists of amounts due to us from sales arrangements executed in our normal business activities and are recorded at invoiced amounts. Our payment terms generally range between 30 to 60 days and we do not offer financing options. We present the aggregate accounts receivable balance net of an allowance for doubtful accounts. Generally, collateral and other security is not obtained for outstanding accounts receivable. Credit losses, if any, are recognized based on management’s evaluation of historical collection experience, customer-specific financial conditions as well as an evaluation of current industry trends and general economic conditions. Past due balances are assessed by management on a periodic basis and balances are written off when the customer’s financial condition no longer warrants pursuit of collection. Although we expect to collect amounts due, actual collections may differ from estimated amounts.

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. Except for the increase in expected credit losses, we are not aware of any specific event or circumstances that would require an update to our estimates or assumptions or a revision of the carrying value of our assets or liabilities as of the date of this Quarterly Report on Form 10-Q. These estimates and assumptions may change as new events occur and additional information is obtained. As a result, actual results could differ materially from these estimates and assumptions.

We analyzed the credit risk associated with our accounts receivables and lease receivables. Our historical loss rates have not shown any significant differences between customer industries or geographies, and, upon adoption of ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”), we grouped all accounts receivables and lease receivables into a single portfolio. As disclosed in Note 15, Segment Information and Geographic Data, we do not have significant international geographic concentrations of revenue, and, as a result, we do not have significant concentrations of accounts receivables or lease receivables in any single geography outside of the United States. As a result of our adoption of ASU 2016-13 effective March 1, 2020, we recognized the cumulative effect of initially applying the guidance as a $0.1 million addition to our allowance for doubtful accounts with an offsetting adjustment to accumulated deficit.

The allowance for doubtful accounts totaled $3.7 million and $3.1 million as of August 31, 2020 and February 29, 2020, respectively.

Goodwill and Other Long-Lived Assets

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. We test goodwill for impairment in accordance with the provisions of ASC 350, Intangibles – Goodwill and Other, (“ASC 350”). Goodwill is tested for impairment at least annually at the reporting unit level or whenever events or changes in circumstances indicate that goodwill might be impaired. ASC 350 provides that an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if an entity concludes otherwise, then it is required to perform an impairment test.

In accordance with Accounting Standards Update 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which we adopted in the fourth quarter of fiscal 2020, the impairment test involves comparing the estimated fair value of a reporting unit with its carrying value, including goodwill. If the estimated fair value exceeds carrying value, goodwill is considered not to be impaired. If, however, the fair value of the reporting unit is less than carrying value, then an impairment loss is recognized in an amount equal to the amount that the carrying value of the reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

Long-lived assets to be held and used, including identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets or asset group to future undiscounted net cash flows expected to be generated by the lowest level of asset group. If the assets or asset group are impaired, the impairment recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for similar investment of like risk. In the fourth quarter of fiscal 2020, we determined that the prolonged secular decline in revenues from our legacy LoJack U.S. SVR products coupled with the slower than anticipated market penetration of our telematics solutions in the U.S. automotive dealership channel represented determinate indications of impairment. These factors were further exacerbated by the immediate unfavorable impact that the COVID-19 pandemic has had on the automotive end markets over the past four months. We recorded an impairment loss of $19.1 million during the fourth quarter of fiscal 2020 related to certain intangible assets and other long-lived assets. As the COVID-19 pandemic continued to impact the market and our business operations during the first quarter of fiscal 2021, we reevaluated the recoverability of the carrying amount of long-lived assets, including goodwill. Based upon our assessment of economic conditions, our expectations of future business conditions and trends, our projected revenues, earnings, and cash flows, we determined that goodwill utilized in our LoJack U.S. SVR reporting unit was impaired and recorded an impairment loss of $3.9 million for goodwill and $0.4 million for dealer relationships as of May 31, 2020. For the fiscal quarter ended August 31, 2020, we continued our assessment of these conditions and concluded no further impairment was required. Any deterioration in future operating cash flows of this reporting unit may result in further impairment of goodwill and other long-lived assets, including intangible assets.

We estimate the fair value of goodwill and other long-lived assets including dealership relationships based on discounted cash flow techniques (Level 3 determination of fair value). Significant inputs to the valuation model include:

• estimated future cash flows;

• growth assumptions for future revenues as well as future gross margin rates, expense rates, capital expenditures and other estimates; and

• rate used to discount our estimated future cash flow projections to their present value (or estimated fair value) based on our estimated weighted average cost of capital.

Fair Value Measurements

We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in our financial statements. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly manner in an arm’s-length transaction between market participants at the measurement date. Fair value is estimated by using the following hierarchy:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

Convertible Senior Notes and Capped Call Transactions

We account for our convertible senior notes as separate liability and equity components. We determine the carrying amount of the liability component based on the fair value of a similar debt instrument excluding the embedded conversion option at the issuance date. The carrying amount of the equity component representing the conversion option is calculated by deducting the carrying value of the liability component from the principal amount of the notes as a whole. This difference represents a debt discount that is amortized to interest expense over the term of the notes using the effective interest rate method. The equity component of the notes is included in stockholders’ equity and is not remeasured as long as it continues to meet the conditions for equity classification. We allocate transaction costs related to the issuance of the notes to the liability and equity components using the same proportions as the initial carrying value of the notes. Transaction costs attributable to the liability component are being amortized to interest expense using the effective interest method over the respective term of the notes, and transaction costs attributable to the equity components are netted with the equity component of the note in stockholders’ equity. We account for the cost of the capped calls as a reduction to additional paid-in capital.

Patent Litigation and Other Contingencies

We accrue for patent litigation and other contingencies whenever we determine that an unfavorable outcome is probable and a liability is reasonably estimable. The amount of the accrual is estimated based on a review of each claim, including the type and facts of the claim and our assessment of the merits of the claim. These accruals are reviewed at least on a quarterly basis and are adjusted to reflect the impact of recent negotiations, settlements, court rulings, advice from legal counsel and other events pertaining to the case. Such accruals, if any, are recorded as general and administrative expense in our condensed consolidated statements of comprehensive loss. Although we take considerable measures to mitigate our exposure in these matters, litigation is unpredictable; however, we believe that we have valid defenses with respect to pending legal matters against us as well as adequate provisions for probable and estimable losses. All costs for legal services are expensed as incurred.

Foreign Currency Translation

We translate the assets and liabilities of our non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation included in accumulated other comprehensive income (loss) during the period. The aggregate foreign currency transaction exchange rate gain (losses) included in determining income (loss) before income taxes was $0.9 million and $(0.8) million for the three and six months ended August 31, 2020, respectively. The aggregate foreign currency transaction exchange rate losses included in determining income (loss) before income taxes was $1.0 million and $1.3 million for the three and six months ended August 31, 2019, respectively.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss) (“OCI”). OCI refers to revenue, expenses and gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity and excluded from net income (loss). Our OCI consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-13, Financial Instruments - Credit Losses, or ASC 326. The new standard amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology. We adopted the new allowance for credit losses accounting standard on March 1, 2020 by means of recognizing the cumulative effect of initially applying the guidance as a $0.1 million addition to our allowance for doubtful accounts with an offsetting adjustment to accumulated deficit. See Accounts Receivable and Allowance for Doubtful Accounts above.

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs incurred to develop or obtain internal-use software. We adopted this standard prospectively effective March 1, 2020. As a result of the adoption, we recorded certain costs, particularly those incurred during the application development phase, related to the implementation of cloud computing arrangements in prepaid expenses which historically had been recorded in property and equipment. Capitalized costs related to cloud computing arrangements for the six months ended August 31, 2020, which are included in prepaid expenses and other current assets on our condensed consolidated balance sheets, were not material.

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SEGMENT INFORMATION AND GEOGRAPHIC DATA (Summary of Revenues by Geographic Area) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019
Segment Reporting Information [Line Items]
Revenues	$ 83,537	$ 93,236	$ 163,752	$ 182,306
United States [Member]
Segment Reporting Information [Line Items]
Revenues	58,945	68,684	110,495	131,806
Europe, Middle East and Africa [Member]
Segment Reporting Information [Line Items]
Revenues	15,537	13,298	31,443	26,724
South America [Member]
Segment Reporting Information [Line Items]
Revenues	5,687	5,447	11,729	10,975
Asia and Pacific Rim [Member]
Segment Reporting Information [Line Items]
Revenues	1,704	1,940	4,043	4,349
All other [Member]
Segment Reporting Information [Line Items]
Revenues	$ 1,664	$ 3,867	$ 6,042	$ 8,452

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LEGAL PROCEEDINGS (Legal Proceedings) (Details)	Apr. 01, 2020 USD ($)
Second Patent (U.S. Pat. No. 8,032,278) [Member]
Gain Loss On Contingencies [Line Items]
Damages assessed and awarded, per unit	5

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CASH, CASH EQUIVALENTS AND INVESTMENTS

6 Months Ended

Aug. 31, 2020

Cash And Cash Equivalents [Abstract]

CASH, CASH EQUIVALENTS AND INVESTMENTS

NOTE 2 – CASH, CASH EQUIVALENTS AND INVESTMENTS

The following tables summarize our financial instrument assets (in thousands):

	As of August 31, 2020
							Balance Sheet Classification
							of Fair Value
			Unrealized				Cash and
	Adjusted		Gains		Fair		Cash		Other
	Cost		(Losses)		Value		Equivalents		Assets
Cash	$	31,357	$	—	$	31,357	$	31,357	$	—
Level 1:
Money market funds		75,788		—		75,788		75,788		—
Mutual funds (1)		2,140		191		2,331		—		2,331
Total	$	109,285	$	191	$	109,476	$	107,145	$	2,331

	As of February 29, 2020
							Balance Sheet Classification
							of Fair Value
			Unrealized				Cash and
	Adjusted		Gains		Fair		Cash		Other
	Cost		(Losses)		Value		Equivalents		Assets
Cash	$	31,895	$	—	$	31,895	$	31,895	$	—
Level 1:
Money market funds		5,508		—		5,508		5,508		—
Mutual funds (1)		3,926		26		3,952		—		3,952
Level 2:
Repurchase agreements		60,000		—		60,000		60,000		—
Corporate bonds		10,001		—		10,001		10,001		—
Total	$	111,330	$	26	$	111,356	$	107,404	$	3,952

(1) Amounts represent various equities, bond and money market mutual funds that are held in an irrevocable “Rabbi Trust” for payment obligations to non-qualified deferred compensation plan participants. In addition to the mutual funds above, our “Rabbi Trust” also included Corporate-Owned Life Insurance (COLI) starting in fiscal 2020. As of August 31, 2020, the cash surrender value of COLI was $4.2 million. 

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INVENTORIES

6 Months Ended

Aug. 31, 2020

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 3 - INVENTORIES

Inventories consist of the following (in thousands):

	August 31,		February 29,
	2020		2020
Raw materials	$	14,082	$	18,118
Finished goods		17,413		18,660
	$	31,495	$	36,778