Segment Reporting

9 Months Ended

Nov. 30, 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 November 30, 2019
Net sales	$	29,985	$	79,914		$	138		$	75		$	110,112
Equity in income of equity investees		967		—			—			—			967
Interest expense and bank charges		137		2,560			326			(2,272	)		751
Depreciation and amortization expense		187		1,093			783			1,247			3,310
Income (loss) before income taxes (a)		92		9,583			(2,813	)		(2,775	)		4,087

Three Months Ended November 30, 2018
Net sales	$	45,053	$	83,927		$	400		$	257		$	129,637
Equity in income of equity investees		1,695		—			—			—			1,695
Interest expense and bank charges		267		2,819			1,033			(2,945	)		1,174
Depreciation and amortization expense		186		1,137			789			775			2,887
Income (loss) before income taxes		5,596		5,597			(4,201	)		(501	)		6,491

Nine Months Ended November 30, 2019
Net sales	$	86,472	$	206,601		$	398		$	341		$	293,812
Equity in income of equity investees		3,672		—			—			—			3,672
Interest expense and bank charges		354		7,427			941			(6,087	)		2,635
Depreciation and amortization expense		567		3,356			2,352			3,622			9,897
Income (loss) before income taxes (a)		869		8,976			(8,835	)		(7,989	)		(6,979	)

Nine Months Ended November 30, 2018
Net sales	$	124,705	$	213,159		$	812		$	683		$	339,359
Equity in income of equity investees		5,146		—			—			—			5,146
Interest expense and bank charges		752		8,218			2,919			(8,498	)		3,391
Depreciation and amortization expense		649		3,451			2,372			2,339			8,811
Income (loss) before income taxes (b)		11,121		(6,535	)		(12,658	)		(3,266	)		(11,338	)

(a)

Included in Income (loss) before taxes for the three and nine months ended November 30, 2019 is the gain on the sale of real property in Pulheim, Germany of $4,057.

(b)

Included in Income (loss) before taxes for the nine months ended November 30, 2018 are intangible asset impairment charges totaling $9,814 ($9,654 within the Consumer 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).