SEGMENT INFORMATION AND GEOGRAPHIC DATA

9 Months Ended

Nov. 30, 2022

Segment Reporting [Abstract]

SEGMENT INFORMATION AND GEOGRAPHIC DATA

NOTE 14 - SEGMENT INFORMATION AND GEOGRAPHIC DATA

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

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

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

Segment information is as follows (in thousands):

	Three Months Ended November 30, 2022												Three Months Ended November 30, 2021
	Reportable Segments												Reportable Segments
	Software & Subscription Services			Telematics Products			Corporate Expenses			Total			Software & Subscription Services			Telematics Products			Corporate Expenses			Total
Revenues	$	49,264		$	29,625					$	78,889		$	36,602		$	32,175					$	68,777
Gross profit	$	20,880		$	5,734					$	26,614		$	18,128		$	9,892					$	28,020
Gross margin		42	%		19	%					34	%		50	%		31	%					41	%
Adjusted EBITDA	$	8,110		$	(2,671	)	$	(741	)	$	4,698		$	6,699		$	(2,808	)	$	(900	)	$	2,991

	Nine Months Ended November 30, 2022												Nine Months Ended November 30, 2021
	Reportable Segments												Reportable Segments
	Software & Subscription Services			Telematics Products			Corporate Expenses			Total			Software & Subscription Services			Telematics Products			Corporate Expenses			Total
Revenues	$	133,332		$	83,111					$	216,443		$	113,079		$	114,383					$	227,462
Gross profit	$	59,803		$	21,470					$	81,273		$	56,282		$	37,555					$	93,837
Gross margin		45	%		26	%					38	%		50	%		33	%					41	%
Adjusted EBITDA	$	18,688		$	(4,662	)	$	(2,706	)	$	11,320		$	22,231		$	446		$	(3,000	)	$	19,677

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

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

	Three Months Ended November 30,						Nine Months Ended November 30,
	2022			2021			2022			2021
Net loss	$	(4,733	)	$	(11,437	)	$	(24,400	)	$	(18,810	)
Less: net (loss) income from discontinued operations		-			(895	)	$	-		$	3,157
Net loss from continuing operations	$	(4,733	)	$	(10,542	)	$	(24,400	)	$	(21,967	)
Investment income		(818	)		(150	)		(646	)		(1,218	)
Interest expense		1,648			3,830			4,645			11,483
Income tax provision		268			205			643			831
Depreciation		3,893			4,581			12,108			13,053
Amortization of intangible assets		1,323			1,386			3,995			4,033
Stock-based compensation		2,030			3,152			8,186			8,561
Non-recurring legal expenses		86			213			4,634			1,332
Costs incurred in transition of LoJack North America business to acquiror		232			69			1,217			1,784
Other		769			247			938			1,785
Adjusted EBITDA	$	4,698		$	2,991		$	11,320		$	19,677

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				Nine Months Ended
	November 30,				November 30,
	2022		2021		2022		2021
United States	$	50,387	$	44,613	$	137,029	$	150,133
EMEA		14,919		12,097		39,733		39,450
LATAM		9,011		5,537		23,177		19,687
APAC		2,794		5,760		13,603		15,534
All other		1,778		770		2,901		2,658
	$	78,889	$	68,777	$	216,443	$	227,462

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 nine months ended November 30, 2022 and 2021.