Dispositions

Hirschmann Car Communication GmbH

On August 31, 2017 (the "Closing Date"), the Company completed its sale of Hirschmann Car Communication GmbH and its subsidiaries (collectively, “Hirschmann”) to a subsidiary of TE Connectivity Ltd ("TE"). The consideration received by the Company was €148,500. The purchase price, at the exchange rate as of the close of business on the Closing Date approximated $177,000, and is subject to adjustment based upon the final working capital. VOXX International (Germany) GmbH, the Company's German wholly-owned subsidiary, was the selling entity in this transaction.

The Hirschmann subsidiary group, which was included within the Automotive segment, qualified to be presented as a discontinued operation in accordance with ASC 205-20 beginning in the Company's Fiscal 2018 second quarter ending August 31, 2017. Voxx has not had any continuing involvement in the Hirschmann business subsequent to the Closing Date. Hirschmann and TE are not related parties of the Company subsequent to the deconsolidation of Hirschmann.

In order to hedge the fluctuation in the exchange rate before closing, the Company entered into forward contracts totaling €148,500, which could be settled on dates ranging from August 31, 2017 through September 6, 2017. As the sale of Hirschmann closed on August 31, 2017, the Company settled all of the forward contracts on this date. The forward contracts were not designated for hedging and a total foreign currency loss of $(6,618) was recorded when the contracts were settled, within continuing operations for the nine months ended November 30, 2017.

The following table presents a reconciliation of the major financial lines constituting the results of operations for discontinued operations to the net income from discontinued operations, net of tax, presented separately in the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss):



	Three Months Ended November 30,			Nine Months Ended November 30,
	2017			2017
Net sales	$	—		$	91,824
Cost of sales	—			63,610
Gross profit	—			28,214

Operating expenses:
Selling	—			2,778
General and administrative	12			14,688
Engineering and technical support	—			7,920
Total operating expenses	12			25,386
Operating (loss) income of discontinued operations	(12		)	2,828

Other (expense) income:
Interest and bank charges (a)	—			(279		)
Other, net	7			145
Total other expense (income) of discontinued operations, net	7			(134		)

Gain on sale of discontinued operations before taxes	—			36,118
Total (loss) income from discontinued operations before taxes	(5		)	38,812
Income tax expense on discontinued operations (b)	363			6,470
(Loss) income from discontinued operations, net of taxes	$	(368	)	$	32,342
(Loss) income per share - basic	$	(0.02	)	$	1.34
(Loss) income per share - diluted	$	(0.02	)	$	1.34

(a) Includes an allocation of consolidated interest expense and interest expense directly related to debt assumed by the buyer. The allocation of consolidated interest expense was based upon the ratio of net assets of the discontinued operations to that of the consolidated Company.

(b) The income tax expense on discontinued operations for the three and nine months ended November 30, 2017 was positively impacted by an income tax benefit related to the partial reversal of the Company’s valuation allowance as the Company utilized a significant portion of its tax attributes to offset the U.S. tax gain related to the sale of Hirschmann.

The following table presents supplemental cash flow information of the discontinued operation:



	Nine Months Ended November 30,
	2017
Operating activities:
Depreciation and amortization expense	$	2,939
Stock-based compensation expense	50

Investing activities:
Capital expenditures	$	2,652

Non-cash investing and financing activities:
Capital expenditures funded by long-term obligations	$	1,916