Financial and Product Information About Foreign and Domestic Operations

12 Months Ended

Feb. 29, 2020

Financial and Product Information About Foreign and Domestic Operations

13)	Financial and Product Information About Foreign and Domestic Operations

Segments

Effective March 1, 2019, the Company revised its reportable segments to better reflect the way the Company now manages its business. To reflect management’s revised perspective, the Company now classifies its operations in the following three reportable segments: Automotive Electronics, Consumer Electronics, and Biometrics. Prior year amounts have been reclassified to conform to the current presentation.

Our Automotive Electronics segment designs, manufactures, distributes and markets rear-seat entertainment devices, satellite radio products, automotive security, vehicle access systems, remote start systems, mobile multimedia devices, aftermarket/OE-styled radios, car link-smartphone telematics application, driver distraction products, collision avoidance systems, location-based services, turn signal switches, automotive lighting products, automotive sensing and camera systems, USB ports, cruise control systems, and heated seats.

Our Consumer Electronics segment designs, manufactures, distributes and markets home theater systems, high-end loudspeakers, outdoor speakers, business music systems, cinema speakers, flat panel speakers, wireless and Bluetooth speakers, soundbars, wired and wireless headphones and ear buds, DLNA (Digital Living Network Alliance) compatible devices, remote controls, karaoke products, public safety solutions, infant/nursery products, activity tracking bands, healthcare wearables, smart-home products, security and monitoring products, infant and nursery products, personal sound amplifiers, as well as A/V connectivity, portable/home charging, reception and digital consumer products.

Our Biometrics segment designs, markets and distributes iris identification and biometric security related products.

Each operating segment is individually reviewed and evaluated by our Chief Operating Decision Maker (CODM), who allocates resources and assesses performance of each segment individually. The Company's Chief Executive Officer has been identified as the CODM. The CODM evaluates performance and allocates resources based upon a number of factors, the primary profit measure being income before income taxes of each segment. Certain costs and royalty income are not allocated to the segments and are reported as Corporate/Eliminations. Costs not allocated to the segments include professional fees, public relations costs, acquisition costs and costs associated with executive and corporate management departments, including salaries, benefits, depreciation, rent and insurance.

The segments share many common resources, infrastructures, and assets in the normal course of business. Thus, the Company does not report assets or capital expenditures by segment to the CODM.

The accounting principles applied at the consolidated financial statement level are generally the same as those applied at the operating segment level and there are no material intersegment sales. The segments are allocated interest expense, based upon a pre-determined formula, which utilizes a percentage of each operating segment's intercompany balance, which is offset in Corporate/Eliminations.

Segment data from continuing operations for each of the Company's segments are presented below:

	Automotive Electronics			Consumer Electronics			Biometrics			Corporate/ Eliminations			Total
Fiscal Year Ended February 29, 2020
Net sales	$	114,154		$	279,675		$	461		$	599		$	394,889
Equity in income of equity investees		5,174			—			—			—			5,174
Interest expense and bank charges		436			10,076			1,279			(8,222	)		3,569
Depreciation and amortization expense		878			4,390			3,136			4,874			13,278
(Loss) income before income taxes (a)		(724	)		9,385			(39,241	)		(10,360	)		(40,940	)

Fiscal Year Ended February 28, 2019
Net sales	$	161,647		$	283,144		$	1,098		$	927		$	446,816
Equity in income of equity investees		6,618			—			—			—			6,618
Interest expense and bank charges		868			10,852			4,013			(11,284	)		4,449
Depreciation and amortization expense		1,002			4,419			3,158			3,765			12,344
Income (loss) before income taxes (b)		13,842			(29,348	)		(18,928	)		(24,529	)		(58,963	)

Fiscal Year Ended February 28, 2018
Net sales	$	155,480		$	350,526		$	636		$	450		$	507,092
Equity in income of equity investees		7,178			—			—			—			7,178
Interest expense and bank charges		967			12,223			2,869			(10,050	)		6,009
Depreciation and amortization expense		1,027			4,989			3,166			2,992			12,174
Income (loss) before income taxes		13,922			(3,872	)		(18,832	)		(15,322	)		(24,104	)

(a)

Included within Income (loss) before taxes for the year ended February 29, 2020 are intangible asset impairment charges totaling $30,230 ($2,828 within the Consumer Electronics segment and $27,402 within the Biometrics segment) (see Note 1(k)). Also included within Income (loss) before taxes for the year ended February 29, 2020 is the gain on the sale of real property in Pulheim, Germany of $4,057 within the Consumer Electronics segment (see Note 11).

(b)

Included in income (loss) before income taxes for the year ended February 28, 2019 are intangible asset impairment charges totaling $25,789 ($25,629 within the Consumer Electronics segment and $160 within the Automotive Electronics segment) (see Note 1(k)), an impairment charge of $3,473 related to investment properties in Venezuela within the Automotive Electronics segment (see Note 1(p)), as well as charges of $16,509 within Corporate related to the write-off of uncollectible notes receivable (see Note 1(f)).

No customer accounted for more than 10% of consolidated net sales from continuing operations during the years ended February 29, 2020, February 28, 2019 or February 28, 2018.

Geographic net sales information from continuing operations in the table below is based on the location of the selling entity. Long-lived assets, consisting of fixed assets, are reported below based on the location of the asset.

	United States		Europe		Other		Total
Fiscal Year Ended February 29, 2020
Net sales	$	322,612	$	69,755	$	2,522	$	394,889
Long-lived assets		48,111		3,099		214		51,424

Fiscal Year Ended February 28, 2019
Net sales	$	393,834	$	49,970	$	3,012	$	446,816
Long-lived assets		48,870		11,553		70		60,493

Fiscal Year Ended February 28, 2018
Net sales	$	446,262	$	57,447	$	3,383	$	507,092
Long-lived assets		48,571		12,979		3,709		65,259