NOTE 15 - SEGMENT INFORMATION AND GEOGRAPHIC DATA

Our business activities is organized into two reportable segments –Telematics Systems and Software & Subscription Services. Our organizational structure is based on a number of factors that our CEO, the Chief Operating Decision Maker (“CODM”), uses to evaluate and operate the business, which include, but are not limited to, customer base, homogeneity of products and technology.

The Telematics Systems segment offers a portfolio of wireless data communications products that includes asset tracking units, mobile telematics devices, fixed and mobile wireless gateways, and routers. These wireless networking devices underpin a wide range of our own and third party software and service solutions worldwide and are critical for applications demanding secure, reliable and business-critical communications.

The Software & Subscription Services segment offers cloud-based, application enablement and telematics service platforms that facilitate integration of our own applications, as well as those of third parties, through open Applications Programing Interfaces (“APIs”) to deliver full-featured IoT solutions to a wide range of customers and markets. Our scalable proprietary SaaS offerings enable rapid and cost-effective deployment of high-value solutions for customers all around the globe.

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

	Three Months Ended May 31, 2018									Three Months Ended May 31, 2017
	Operating Segments									Operating Segments
	Telematics Systems		Software & Subscription Services		Corporate Expenses			Total		Telematics Systems		Software & Subscription Services		Corporate Expenses			Total
Revenues	$	76,352	$	18,536	$	—		$	94,888	$	71,996	$	16,085	$	—		$	88,081
Adjusted EBITDA	$	10,814	$	2,922	$	(1,559	)	$	12,177	$	12,820	$	1,221	$	(860	)	$	13,181

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

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

	Three Months Ended May 31,
		2018			2017
Net income (loss)		$	8,511		$	(2,654	)
Investment income			(853	)		(333	)
Interest expense			2,665			2,518
Income tax provision (benefits)			1,771			(1,080	)
Depreciation			2,043			2,025
Amortization of intangible assets			2,748			3,858
Stock-based compensation			2,467			1,817
Equity in net loss of affiliate			439			337
Restructuring charges			3,383			—
Legal expenses for LoJack battery performance issue			1,686			497
Litigation provision			428			6,075
Gain on LoJack battery performance legal Settlement			(13,333	)		—
Other			222			121
Adjusted EBITDA		$	12,177		$	13,181

It is not practicable for us to report identifiable assets by segment because these business units share resources, functions and facilities.

We do not have significant long-lived assets outside the United States.

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

	Three Months Ended
	May 31,
	2018		2017
United States	$	70,417	$	63,865
Europe, Middle East and Africa		13,344		11,162
South America		4,167		3,792
Canada		1,364		3,359
Asia and Pacific Rim		3,759		2,800
All other		1,837		3,103
	$	94,888	$	88,081

Revenues by geographic area are based upon the country of billing. The geographic location of distributors and OEM customers may be different from the geographic location of the ultimate end users of the products and services provided by us. No single non-U.S. country accounted for more than 10% of our revenue in the three months ended May 31, 2018 and 2017.