Segment Reporting

6 Months Ended

Aug. 31, 2019

(22)	Segment Reporting

Effective March 1, 2019, the Company revised its reportable segments as a result of efforts made by management to re-align businesses, streamline operations, and better leverage resources. To reflect management's revised perspective, the Company now classifies its operations in the following three reportable segments: Automotive Electronics, Consumer Electronics, and Biometrics. The Consumer Electronics segment is comprised of the Company's former Consumer Accessories and Premium Audio segments, with the exception of EyeLock LLC. The Biometrics segment consists of the Company's majority owned subsidiary, EyeLock LLC, which was previously included in the Consumer Accessories segment. This new segment has been created in order to provide greater visibility regarding the operational and financial performance of EyeLock LLC and of the Company as a whole. The Company’s Automotive Electronics segment has remained unchanged. The Company operates in these three distinct segments based upon our products and our internal organizational structure. The three operating segments are also the Company's reportable segments. Prior year segment amounts have been reclassified to conform to the current presentation.

Our Automotive Electronics segment designs, manufactures, markets and distributes rear-seat entertainment devices, satellite radio products, automotive security, remote start systems, mobile multimedia devices, aftermarket/OE-styled radios, car link-smartphone telematics applications, collision avoidance systems and location-based services.

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

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

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 for each of the Company's segments is presented below:

	Automotive Electronics		Consumer Electronics			Biometrics			Corporate/ Eliminations			Total
Three Months Ended August 31, 2019
Net sales	$	26,845	$	63,034		$	254		$	113		$	90,246
Equity in income of equity investees		1,265		—			—			—			1,265
Interest expense and bank charges		118		2,469			313			(2,013	)		887
Depreciation and amortization expense		193		1,122			784			1,196			3,295
Income (loss) before income taxes		316		(1,067	)		(3,042	)		(2,256	)		(6,049	)

Three Months Ended August 31, 2018
Net sales	$	40,006	$	68,328		$	184		$	349		$	108,867
Equity in income of equity investees		1,637		—			—			—			1,637
Interest expense and bank charges		239		2,722			982			(2,826	)		1,117
Depreciation and amortization expense		224		1,157			792			790			2,963
Income (loss) before income taxes (a)		1,010		(10,432	)		(4,335	)		(407	)		(14,164	)

Six Months Ended August 31, 2019
Net sales	$	56,487	$	126,687		$	260		$	266		$	183,700
Equity in income of equity investees		2,705		—			—			—			2,705
Interest expense and bank charges		217		4,867			615			(3,815	)		1,884
Depreciation and amortization expense		380		2,263			1,569			2,375			6,587
Income (loss) before income taxes		777		(607	)		(6,022	)		(5,214	)		(11,066	)

Six Months Ended August 31, 2018
Net sales	$	79,652	$	129,232		$	412		$	426		$	209,722
Equity in income of equity investees		3,451		—			—			—			3,451
Interest expense and bank charges		484		5,398			1,887			(5,552	)		2,217
Depreciation and amortization expense		463		2,314			1,584			1,564			5,925
Income (loss) before income taxes (a)		5,524		(12,131	)		(8,458	)		(2,764	)		(17,829	)

(a)

Included in Income (loss) before taxes for the three and six months ended August 31, 2018 are intangible asset impairment charges totaling $9,814 ($9,654 within the Consume Electronics segment and $160 within the Automotive Electronics segment) (see Note 10), as well as the impairment charge of $3,473 related to investment properties in Venezuela within the Automotive Electronics segment (see Note 18).