Financial and Product Information About Foreign and Domestic Operations

12 Months Ended

Feb. 29, 2024

Segment Reporting [Abstract]

Financial and Product Information About Foreign and Domestic Operations

13)Financial and Product Information About Foreign and Domestic Operations

Segments

The Company classifies its operations in the following three reportable segments: Automotive Electronics, Consumer Electronics, and Biometrics.

Our Automotive Electronics segment designs, manufactures, distributes and markets automotive security, vehicle access, and remote start modules and systems; smart phone telematics applications; mobile multi-media infotainment products and rear-seat entertainment products, including overhead, seat-back, and headrest systems; rear observation and collision avoidance systems/blind spot sensors/automotive sensing and camera systems/driver distraction products; 360 camera applications; distribution of satellite radios, including plug and play models and direct connect models; cruise control systems; private label audio products; heated seats; interior lighting solutions; security and shock sensors; turn signal switches; puddle lamps; box lights; harnesses; Electric Vehicle Sound Systems ("EVSS"); interior lighting systems; and logo lighting modules.

Our Consumer Electronics segment designs, manufactures, distributes and markets premium loudspeakers; architectural speakers; commercial and cinema speakers; outdoor speakers; wireless and Bluetooth speakers; A/V receivers; high performance 2 channel loudspeakers; high performance 2 channel electronics; high performance party speakers; home theater systems; business music systems; streaming music systems; on-ear and in-ear headphones; wired and wireless headphones and ear buds; Bluetooth headphones and ear buds; soundbars; solar powered balcony systems; High-Definition Television ("HDTV") antennas; Wireless Fidelity ("WiFi") antennas; High-Definition Multimedia Interface ("HDMI") accessories; hearing aids and personal sound amplifiers; karaoke products; infant/nursery products; home electronic accessories such as cabling, power cords, and other connectivity products; performance enhancing electronics; T.V. universal remote controls; flat panel TV mounting systems; power supply systems and charging products; electronic equipment cleaning products; set-top boxes; and home and portable stereos.

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 intersegment sales are not material. The segments are allocated interest expense, based upon a pre-determined formula, which utilizes a percentage of each operating segment's intercompany balance, and is offset in Corporate/Eliminations.

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

	Automotive Electronics			Consumer Electronics			Biometrics			Corporate/ Eliminations			Total
Fiscal Year Ended February 29, 2024
Net sales	$	142,341		$	326,618		$	531		$	(579	)	$	468,911
Equity in income of equity investees		4,916			—			—			—			4,916
Interest expense and bank charges		1,884			7,790			1,736			(4,475	)		6,935
Depreciation and amortization expense		3,240			5,868			280			3,056			12,444
Loss before income taxes (a) (b) (c)		(6,008	)		(19,332	)		(5,658	)		(16,379	)		(47,377	)
Fiscal Year Ended February 28, 2023
Net sales	$	174,811		$	357,758		$	1,046		$	399		$	534,014
Equity in income of equity investees		6,969			—			—			—			6,969
Interest expense and bank charges		1,917			8,033			1,720			(7,027	)		4,643
Depreciation and amortization expense		3,245			6,534			287			3,064			13,130
Loss before income taxes (a) (b) (c)		(3,236	)		(1,101	)		(5,816	)		(20,797	)		(30,950	)
Fiscal Year Ended February 28, 2022
Net sales	$	200,594		$	433,925		$	882		$	519		$	635,920
Equity in income of equity investees		7,890			—			—			—			7,890
Interest expense and bank charges		1,510			7,827			1,662			(8,467	)		2,532
Depreciation and amortization expense		3,049			4,957			297			4,095			12,398
Income (loss) before income taxes (a)		8,471			28,645			(9,354	)		(53,601	)		(25,839	)

(a)Included within Income (loss) before income taxes within Corporate/Eliminations for the year ended February 28, 2022 is a charge of $39,444 recorded for an arbitration award unfavorable to the Company (see Note 15). Included within Loss before income taxes on Corporate/Eliminations for the year ended February 28, 2023 are charges of $3,944, representing interest expense, as well as charges for legal fee reimbursements and a settlement for a patent arbitration related to the final arbitration award. Included within Loss before income taxes on Corporate/Eliminations for the year ended February 28, 2024 is a net credit recorded of $763, representing interest expense related to the final arbitration award, offset by the reversal of previous accrued charges as a result of the final settlement of the arbitration award, which was paid during the fourth quarter of Fiscal 2024.

(b)Included within Loss before income taxes within the Consumer Electronics segment for the year ended February 29, 2024 are intangible asset impairment charges totaling $14,214. Included within Loss before income taxes within the Automotive Electronics segment for the year ended February 28, 2023 is a goodwill impairment charge of $7,373 and an intangible asset impairment charge of $1,300 (see Note 1(k)).

(c)Included within Loss before income taxes within Corporate/Eliminations for the years ended February 29, 2024 and February 28, 2023 are foreign currency losses of $2,795 and $3,267, respectively, attributable to the Company's Onkyo subsidiary related to intercompany transactions and financial statement translation adjustments.

Geographic net sales information 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, 2024
Net sales	$	362,749	$	88,563	$	17,599	$	468,911
Long-lived assets		40,693		3,172		1,205		45,070
Fiscal Year Ended February 28, 2023
Net sales	$	421,296	$	79,677	$	33,041	$	534,014
Long-lived assets		41,925		3,164		1,955		47,044
Fiscal Year Ended February 28, 2022
Net sales	$	506,226	$	97,396	$	32,298	$	635,920
Long-lived assets		44,751		3,422		1,621		49,794