Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Nov. 30, 2023 | Jan. 05, 2024 | |
Cover [Abstract] | ||
Entity Registrant Name | CalAmp Corp. | |
Entity Central Index Key | 0000730255 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | CAMP | |
Current Fiscal Year End Date | --02-28 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Nov. 30, 2023 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2024 | |
Entity File Number | 0-12182 | |
Entity Tax Identification Number | 95-3647070 | |
Entity Address, Address Line One | 15635 Alton Parkway | |
Entity Address, Address Line Two | Suite 250 | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92618 | |
City Area Code | (949) | |
Local Phone Number | 600-5600 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 37,996,457 | |
Entity Incorporation, State or Country Code | DE | |
Security Exchange Name | NASDAQ | |
Title of 12(b) Security | Common stock, $0.01 per share | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 38,169 | $ 41,928 |
Accounts receivable, net | 70,909 | 82,946 |
Inventories | 34,059 | 23,902 |
Prepaid expenses and other current assets | 25,824 | 26,019 |
Total current assets | 168,961 | 174,795 |
Property and equipment, net | 25,724 | 32,832 |
Operating lease right-of-use assets | 10,168 | 12,293 |
Deferred income tax assets | 2,927 | 3,275 |
Goodwill | 20,583 | 94,214 |
Other intangible assets, net | 23,608 | 26,633 |
Other assets | 29,270 | 36,078 |
Total assets | 281,241 | 380,120 |
Current liabilities: | ||
Current portion of long-term debt | 705 | |
Accounts payable | 46,695 | 52,716 |
Accrued payroll and employee benefits | 10,112 | 11,766 |
Deferred revenue | 26,328 | 25,448 |
Other current liabilities | 16,568 | 15,865 |
Total current liabilities | 99,703 | 106,500 |
Long-term debt, net of current portion | 228,148 | 227,416 |
Operating lease liabilities | 9,007 | 12,314 |
Other non-current liabilities | 18,522 | 19,583 |
Total liabilities | 355,380 | 365,813 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Preferred stock, $.01 par value; 3,000 shares authorized; no shares issued or outstanding | ||
Common stock, $.01 par value; 80,000 shares authorized; 37,741 and 37,388 shares issued and outstanding at August 31, 2023 and February 28, 2023, respectively | 379 | 374 |
Additional paid-in capital | 189,747 | 184,672 |
Accumulated deficit | (262,077) | (168,816) |
Accumulated other comprehensive loss | (2,188) | (1,923) |
Total stockholders' equity (deficit) | (74,139) | 14,307 |
Total liabilities and stockholders' equity | $ 281,241 | $ 380,120 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Nov. 30, 2023 | Feb. 28, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 37,886,000 | 37,388,000 |
Common stock, shares outstanding | 37,886,000 | 37,388,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Revenues: | ||||
Revenues | $ 53,625 | $ 78,889 | $ 186,230 | $ 216,443 |
Cost of revenues: | ||||
Cost of revenues | 36,051 | 52,275 | 119,251 | 135,170 |
Gross profit | 17,574 | 26,614 | 66,979 | 81,273 |
Operating expenses: | ||||
Research and development | 4,051 | 5,479 | 14,693 | 19,236 |
Selling and marketing | 8,884 | 12,486 | 29,525 | 36,698 |
General and administrative | 10,114 | 11,172 | 31,482 | 39,864 |
Intangible asset amortization | 1,116 | 1,323 | 3,466 | 3,995 |
Restructuring | 1,718 | 1,718 | ||
Impairment loss | 75,106 | 75,106 | ||
Total operating expenses | 100,989 | 30,460 | 155,990 | 99,793 |
Operating loss | (83,415) | (3,846) | (89,011) | (18,520) |
Non-operating income (expense): | ||||
Investment (loss) income | (124) | 818 | 360 | 646 |
Interest expense | (1,410) | (1,648) | (4,662) | (4,645) |
Other (expense) income, net | (17) | 211 | 577 | (1,238) |
Total non-operating expenses | (1,551) | (619) | (3,725) | (5,237) |
Loss from operations before income taxes | (84,966) | (4,465) | (92,736) | (23,757) |
Income tax provision | (38) | (268) | (525) | (643) |
Net loss | $ (85,004) | $ (4,733) | $ (93,261) | $ (24,400) |
Loss per share: | ||||
Basic | $ (2.27) | $ (0.13) | $ (2.52) | $ (0.68) |
Diluted | $ (2.27) | $ (0.13) | $ (2.52) | $ (0.68) |
Shares used in computing loss per share: | ||||
Basic | 37,427 | 36,357 | 37,023 | 36,027 |
Diluted | 37,427 | 36,357 | 37,023 | 36,027 |
Comprehensive loss: | ||||
Net loss | $ (85,004) | $ (4,733) | $ (93,261) | $ (24,400) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (1,248) | (316) | (265) | (1,957) |
Total comprehensive loss | (86,252) | (5,049) | (93,526) | (26,357) |
Products [Member] | ||||
Revenues: | ||||
Revenues | 31,205 | 53,331 | 114,829 | 138,420 |
Cost of revenues: | ||||
Cost of revenues | 23,216 | 37,672 | 80,026 | 93,705 |
Application Subscriptions and Other Services [Member] | ||||
Revenues: | ||||
Revenues | 22,420 | 25,558 | 71,401 | 78,023 |
Cost of revenues: | ||||
Cost of revenues | $ 12,835 | $ 14,603 | $ 39,225 | $ 41,465 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 30, 2023 | Nov. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (93,261) | $ (24,400) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation expense | 12,632 | 12,108 |
Intangible asset amortization | 3,466 | 3,995 |
Stock-based compensation | 5,469 | 8,186 |
Amortization of debt issuance costs and discount | 825 | 877 |
Impairment loss | 75,106 | |
Noncash operating lease cost | 2,575 | 2,591 |
Revenue assigned to factors | (798) | (2,143) |
Deferred tax assets, net | 480 | 132 |
Other | 381 | 122 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 12,450 | (26,787) |
Inventories | (9,818) | (4,634) |
Prepaid expenses and other assets | 7,600 | (8,878) |
Accounts payable | (6,484) | 20,752 |
Accrued liabilities | (1,712) | 2,802 |
Deferred revenue | 718 | (2,883) |
Operating lease liabilities | (3,636) | (3,681) |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 5,993 | (21,841) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (6,176) | (9,294) |
NET CASH USED IN INVESTING ACTIVITIES | (6,176) | (9,294) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Taxes paid related to net share settlement of vested equity awards | (520) | (1,675) |
Proceeds from exercise of stock options and contributions to employee stock purchase plan | 131 | 502 |
NET CASH USED IN FINANCING ACTIVITIES | (389) | (1,173) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (3,187) | (2,007) |
Net change in cash and cash equivalents | (3,759) | (34,315) |
Cash and cash equivalents at beginning of period | 41,928 | 79,221 |
Cash and cash equivalents at end of period | $ 38,169 | $ 44,906 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands | Total | Common Stock and Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balances at Feb. 28, 2022 | $ 75,402 | $ 242,747 | $ (165,965) | $ (1,380) |
Balances (ASU 2020-06 [Member]) at Feb. 28, 2022 | (67,003) | 29,639 | ||
Stock-based compensation expense | 8,186 | |||
Shares issued on net share settlement of equity awards | (1,675) | |||
Exercise of stock options and contributions to employee stock purchase plan | 502 | |||
Net loss | (24,400) | (24,400) | ||
Foreign currency translation adjustments | (1,957) | |||
Balances at Nov. 30, 2022 | 18,694 | 182,757 | (3,337) | (160,726) |
Balances at Aug. 31, 2022 | 21,820 | 180,834 | (155,993) | (3,021) |
Stock-based compensation expense | 2,030 | |||
Shares issued on net share settlement of equity awards | (107) | |||
Net loss | (4,733) | (4,733) | ||
Foreign currency translation adjustments | (316) | |||
Balances at Nov. 30, 2022 | 18,694 | 182,757 | (3,337) | (160,726) |
Balances at Feb. 28, 2023 | 14,307 | 185,046 | (168,816) | (1,923) |
Stock-based compensation expense | 5,469 | |||
Shares issued on net share settlement of equity awards | (520) | |||
Exercise of stock options and contributions to employee stock purchase plan | 131 | |||
Net loss | (93,261) | (93,261) | ||
Foreign currency translation adjustments | (265) | |||
Balances at Nov. 30, 2023 | (74,139) | 190,126 | (2,188) | (262,077) |
Balances at Aug. 31, 2023 | 10,564 | 188,577 | (177,073) | (940) |
Stock-based compensation expense | 1,567 | |||
Shares issued on net share settlement of equity awards | (18) | |||
Net loss | (85,004) | (85,004) | ||
Foreign currency translation adjustments | (1,248) | |||
Balances at Nov. 30, 2023 | $ (74,139) | $ 190,126 | $ (2,188) | $ (262,077) |
DESCRIPTION OF BUSINESS, BASIS
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Nov. 30, 2023 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business CalAmp Corp. (including its subsidiaries unless the context otherwise requires, “CalAmp”, “the Company”, “we”, “our”, or “us”) is a connected intelligence company that leverages a data-driven solutions ecosystem to help people and organizations improve operational performance. We solve complex problems for customers within the market verticals of transportation and logistics, commercial and government fleets, industrial equipment, and consumer vehicles by providing solutions that track, monitor, and recover their vital assets. The data and insights enabled by CalAmp solutions provide real-time visibility into a user’s vehicles, assets, drivers, and cargo, giving organizations greater understanding and control of their operations. Ultimately, these insights drive operational visibility, safety, efficiency, maintenance, and sustainability for organizations around the world. We are a global organization that is headquartered in Irvine, California. Basis of Presentation In the opinion of our management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary to present fairly our financial position at November 30, 2023 and our results of operations for the three and nine months ended November 30, 2023 and 2022. The results of operations for such periods are not necessarily indicative of results to be expected for the full fiscal year ending February 29, 2024. Certain notes and other information included in the audited financial statements in our Annual Report on Form 10-K for the fiscal year ended February 28, 2023 are condensed in or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with our 2023 Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission (“SEC”) on April 28, 2023. All intercompany transactions and accounts have been eliminated in consolidation. The accompanying condensed consolidated financial statements have been prepared with the assumption that the Company will continue as a going concern. Based on our current and projected level of operations, we believe that our future cash flows from operating activities, our existing cash and cash equivalents and our revolving credit facility will provide adequate funds for ongoing operations and working capital requirements for at least the next 12 months. However, our business is subject to various factors that could materially impact our assumptions leading to the future consumption of our available cash. As a subsequent event, on December 15, 2023, the Company entered into a credit agreement under which it borrowed $ 45 million, bearing an interest rate equal to the secured overnight financing rate plus 6.75 % with a maturity date of December 15, 2027 (the "Term Loan"). Concurrent with the Term Loan, the Company paid off the remaining liabilities under its asset-based revolving credit facility and terminated that arrangement. The Company further concurrently entered into a supplemental indenture granting a first priority interest in substantially all the Company's assets to the holders of the 2025 Convertible Notes. Defaults under the Term Loan and supplemental indenture to the 2025 Convertible Notes constitute default events under each respective indebtedness. See Note 15, Subsequent Events , for additional information. Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We have considered all known and reasonably available information that existed throughout the three and nine months ended November 30, 2023 in making accounting judgments, estimates and disclosures. Revenue Recognition Revenues from subscription services are recognized ratably on a straight-line basis over the term of the subscription, which generally ranges from two to five years . We recognize revenue from telematics product sales upon the transfer of control of promised products to customers in an amount that reflects the transaction price. Customers generally do not have a right of return except for defective products returned during the warranty period. We record estimated commitments related to customer incentive programs as reductions of revenues. From time to time, we provide various professional services to customers. These services include project management, engineering services and installation services, which are often distinct from other performance obligations and are recognized as the related services are performed. For certain professional service contracts, we recognize revenue based on the proportion of total costs incurred to-date over the estimated cost of the contract, which is an input method. In many customer arrangements, subscription services are bundled with the sale or lease of telematics devices within the same contractual arrangement. To determine the performance obligations under these arrangements, we assess the contractual elements and, in particular, whether the telematics products within the arrangement are distinct. This is an area of judgment that includes the consideration of all elements of the arrangement. Significant factors in determining whether telematics devices are distinct are whether such devices are sold separately, as well as the degree of integration and interdependency between the subscription elements of the arrangement and the associated telematics devices. If we conclude that the telematics devices within a customer arrangement are distinct and therefore represent a separate performance obligation, the total expected consideration associated with the contract is allocated between the performance obligations based upon the relative stand-alone selling price associated with each performance obligation. We base stand-alone selling prices on pricing for the same or similar items. For some customer arrangements, we have concluded that the subscription services and associated telematics devices are not distinct performance obligations and thus represent a single combined performance obligation. For certain other customer arrangements under which devices are leased in combination with subscription services, we consider the arrangement to be predominately a subscription service and thus a combined single performance obligation for purposes of revenue recognition. In both of these circumstances, we generally recognize the total expected consideration as revenue over the term of the subscription. In customer arrangements for which the embedded lease is an operating lease, we utilize the practical expedient that allows for the combining of lease and nonlease components. Device related costs associated with arrangements in which title to the device is transferred to the customer under a single combined performance obligation are recorded as deferred costs on the balance sheet and are amortized into cost of revenues over the term of the subscription or the estimated in-service lives of the devices. In contractual arrangements under which we provide devices as part of the subscription contract but we retain control of the devices, the cost of the devices is capitalized as property and equipment and depreciated over the estimated useful life of three to five years . We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer. The timing of revenue recognition may differ from the timing of our invoicing to customers. Contract assets are comprised of unbilled amounts for which we have transferred products or provided services to our customers and are classified as accounts receivable. Contract liabilities (deferred revenues) are comprised of billings or payments received from our customers in advance of performance under the contract. During the three and nine months ended November 30, 2023, we recognized $ 4.4 million and $ 20.5 million , respectively, in revenue from the deferred revenue balance of $ 36.6 million as of February 28, 2023. Incremental costs of obtaining a contract with a customer consist of sales commissions, which are recognized on a straight-line basis over the life of the corresponding contracts. Sales commissions included in prepaid expenses and other current assets and other assets were $ 1.8 million and $ 2.3 million , respectively, as of November 30, 2023. We disaggregate revenue from contracts with customers into reportable segments, geography, type of goods and services and timing of revenue recognition. See Note 13, Segment Information and Geographic Data , for our revenue by segment and geography. The disaggregation of revenue by type of goods and services and by timing of revenue recognition is as follows (in thousands): Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 Revenue by type of goods and services: Telematics devices and accessories $ 31,217 $ 53,331 $ 114,866 $ 138,420 Rental income and other services $ 4,583 6,307 $ 15,673 17,233 Recurring application subscriptions (1) $ 17,825 19,251 $ 55,691 60,790 Total $ 53,625 $ 78,889 $ 186,230 $ 216,443 Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 Revenue by timing of revenue recognition: Revenue recognized at a point in time $ 33,090 $ 57,337 $ 122,850 $ 149,511 Revenue recognized over time $ 20,535 21,552 63,380 66,932 Total $ 53,625 $ 78,889 $ 186,230 $ 216,443 (1) Recurring application subscriptions includes $ 0.0 million and $ 0.5 million during the three months ended November 30, 2023 and 2022, respectively, and $ 0.0 million and $ 1.9 million during the nine months ended November 30, 2023 and 2022, respectively, attributable to the auto vehicle finance business which has been completely wound down. Telematics devices and accessories revenues presented in the table above include devices sold in customer arrangements that include both device and subscription services. Revenues related to recurring application subscriptions include subscription revenues as well as amortization of deferred revenue for contractual arrangements under which the subscription services and associated telematics devices were determined to be a single combined performance obligation. Remaining performance obligations for Software & Subscription Services represents contracted revenue that has not yet been recognized, which includes deferred revenue on our consolidated balance sheets and unbilled amounts that will be recognized as revenue in future periods. As of November 30, 2023 and February 28, 2023, we have estimated remaining performance obligations for contractually committed revenues of $ 186.0 million and $ 234.5 million respectively. As of November 30, 2023, we expect to recognize approximately 19 % of the revenue under these remaining performance obligations in the remainder of fiscal 2024 and 46 % in fiscal 2025 . As of February 28, 2023, we expected to recognize approximately 49 % of the then remaining performance obligations in fiscal 2024 and 27 % in fiscal 2025 . We exclude contracts that have original durations of less than one year from the aforementioned remaining performance obligation disclosure. Cash and Cash Equivalents We consider all highly liquid investments with maturities at date of purchase of three months or less to be cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consists of amounts due to us from sales arrangements executed in our normal business activities and are recorded at invoiced amounts or in some cases amounts expected to be invoiced. In addition, this balance includes unbilled amounts as discussed within Revenue Recognition above. Our payment terms generally range between 30 to 60 days of our invoice date with a few exceptions that extend the credit terms up to 90 days, and we do not offer financing options. We present the aggregate accounts receivable balance net of an allowance for doubtful accounts. Generally, collateral and other security is not obtained for outstanding accounts receivable. Credit losses, if any, are recognized based on management’s evaluation of historical collection experience, customer-specific financial conditions as well as an evaluation of current industry trends and general economic conditions. Past due balances are assessed by management on a periodic basis and balances are written off when the customer’s financial condition no longer warrants pursuit of collection. Actual collections may differ from estimated amounts. We group all accounts receivables and lease receivables into a single portfolio and analyze the credit risk associated with our accounts receivables and lease receivables. Our historical loss rates have not shown any significant differences between customer industries or geographies. As disclosed in Note 13, Segment Information and Geographic Data , we do not have significant international geographic concentrations of revenue, and, as a result, we do not have significant concentrations of accounts receivables or lease receivables in any single geography outside of the United States. The allowance for doubtful accounts totaled $ 2.8 million and $ 1.8 million as of November 30, 2023 and February 28, 2023 , respectively. Goodwill and Other Long-Lived Assets Goodwill and long-lived assets to be held and used, including identifiable intangible assets, are reviewed for impairment annually in the fourth quarter or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets or reporting unit to the estimated fair value of those assets or reporting unit determined using either an income approach, a market approach, or a combination of both. If the assets are impaired, the impairment recognized is the amount by which the carrying amount exceeds the fair value of the assets. As of November 30, 2023 we identified potential impairment indicators relating to the overall decline in our stock price and the performance of certain business units. Overall, our revenue and gross margin performance continued to deteriorate, and our stock price continued to decline during the three and nine months ended November 30, 2023, declining approximately ( 48 %) from the August 31, 2023 closing price and ( 93 %) from the February 28, 2023 closing price to $ 0.32 as of November 30, 2023, reflecting a market capitalization that was below our November 30, 2023 net book value. As of November 30, 2023, the decline in our stock price and other factors were deemed to be sustained, a nd therefore a triggering event as of November 30, 2023 was deemed to have occurred, requiring impairment assessments of our goodwill and long-lived assets to be held and used. In accordance with the accounting guidance within ASC 350, Intangibles – Goodwill and Other ("ASC 350"), and ASC 360, Property, Plant and Equipment , our long-lived assets to be held and used were initially tested to determine if the related assets were recoverable, which required a comparison of undiscounted cash flows of the asset groups to their carrying value. Our long-lived assets to be held and used include our property and equipment, right-of-use assets, and amortizable intangible assets. Triggering events were identified within specific asset groups within the Software and Subscription Services businesses. The Company identified the cash flows for each asset group over a period of time reflective of the remaining useful life of the primary asset within each asset group, along with the cash flows associated with a hypothetical sale of each asset group at the end of the respective periods. Based on this comparison, the sum of the undiscounted cash flows for each asset group was in excess of the respective asset group’s carrying value, and each asset group was deemed to be recoverable with substantial cushion. No additional consideration of impairment of our long-lived assets to be held and used was required. Subsequently, the Company evaluated the impairment of its goodwill by determining the fair value of the Company’s three reporting units using the assistance of a third-party valuation specialist. In accordance with ASC 350, the impairment of goodwill is determined through a comparison of the fair value of a reporting unit compared to the reporting unit’s carrying value; if the carrying value exceeds the fair value of the reporting unit, the difference is to be recognized as goodwill impairment of the reporting unit until such time that the goodwill balance is $ 0 . The fair value of the reporting units was determined using a combination of the income and market approaches. For each reporting unit, we applied a weighting to the fair value determination under each approach in order to determine the fair value of the respective reporting unit. The income approach for each reporting unit used the discounted cash flow method to determine the fair value, which included the following Level 3 significant inputs: projected financial information, income tax rates, and discount rates. The market approach for each reporting unit reflected a fair value calculated by the product of selected public company multiples, Level 3 inputs, and the reporting unit’s revenue and EBITDA. A weighting for each reporting unit was then applied to the fair value results from each method to estimate the fair value of the respective reporting units. In order to ensure the reasonableness of the individual reporting unit’s fair value, we utilized a reconciliation of the market capitalization of the Company as of November 30, 2023, a Level 1 input, to the sum of the fair value of the reporting units with an implied control premium applied. Based on the comparison of the individual reporting unit’s fair value and the respective reporting unit’s carrying value, the estimated fair value of the Tracking & Monitoring Reporting Unit within the Software and Subscription Services segment and the Telematics Reporting Unit within the Telematics segment was $ 67.3 million and $ 14.3 million respectively, compared to carrying values of $ 126.6 million and $ 33.0 million , respectively, as of November 30, 2023. As such, impairment charges related to the Company’s United States operations within these reporting units were recognized in the condensed consolidated statement of operations during the quarter ended November 30, 2023 of $ 74.4 million , reflecting the sum of the difference between the carrying values and fair values of the Tracking & Monitoring Reporting Unit and Telematics Reporting Unit. Fair Value Measurements We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in our financial statements. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly manner in an arm’s-length transaction between market participants at the measurement date. Fair value is estimated by using the following hierarchy: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Litigation and Other Contingencies We accrue for litigation and other contingencies whenever we determine that an unfavorable outcome is probable and a liability is reasonably estimable. The amount of the accrual is estimated based on a review of each claim, including the type and facts of the claim and our assessment of the merits of the claim. These accruals are reviewed at least on a quarterly basis and are adjusted to reflect the impact of recent negotiations, settlements, court rulings, advice from legal counsel and other events pertaining to the case. Such accruals, if any, are recorded as general and administrative expenses in our condensed consolidated statements of comprehensive loss. Although we take considerable measures to mitigate our exposure in these matters, litigation is unpredictable; however, we believe that we have valid defenses with respect to pending legal matters against us as well as adequate provisions for probable and estimable losses. All costs for legal services are expensed as incurred. Liquidity and Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Management evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern over the next twelve months from the issuance of the accompanying consolidated financial statements. The Company is currently listed on the NASDAQ Global Select Market, LLC (“Nasdaq”), a national securities exchange. The Nasdaq requires companies desiring to list their common stock to meet certain listing criteria including total number of shareholders, minimum stock price, total value of public float, and in some cases total shareholders’ equity and market capitalization. The Company’s failure to meet such applicable listing criteria could prevent the Company from listing its common stock on the Nasdaq. The Company has received a delisting notice from Nasdaq as the Company’s shares are currently trading below the minimum $1 stock price listing requirement. In addition, at the date of issuance of its interim consolidated condensed financial statements, the Company has measured its compliance with the continued listing criteria set forth in Nasdaq listing rules 5450(a) and 5450(b)(1)-(3) with respect to the minimum market value of publicly held shares, minimum market value of listed securities, and minimum stockholders' equity requirements, and concluded that it was not in compliance with the aforementioned listing standards. The Company has not yet received an additional non-compliance notice from Nasdaq. If the Company’s common stock ceases to be listed on any of The NASDAQ Global Market or The NASDAQ Global Select Market (or any of their respective successors), then a “fundamental change” under the 2025 Convertible Notes would occur. If such a fundamental change under the 2025 Convertible Notes were to occur, holders of the Company’s 2025 Convertible Notes may require the Company to repurchase their 2025 Convertible Notes following the fundamental change at a cash repurchase price generally equal to the principal amount of the 2025 Convertible Notes to be repurchased, plus accrued and unpaid interest. As of November 30, 2023, and through the date the financial statements are issued, the Company believes it has sufficient liquidity to be able to operate its business for at least 12 months following the date that the financial statements are issued. However, as of November 30, 2023 the principal amount of the 2025 Convertible notes plus accrued and unpaid interests is in excess of the Company’s available cash resources. Management concluded that the uncertainties associated with the Company’s ability to cure noncompliance with the Nasdaq listing requirements coupled with the repurchase rights of the 2025 Convertible Note holders under a fundamental change scenario represent conditions raising substantial doubt regarding the Company’s ability to continue as a going concern. In response to these conditions, management intends to request a waiver from the holder of the 2025 Convertible Notes to waive the fundamental change provision in the Convertible Notes agreement and concede the right to require the Company to repurchase the Convertible Notes in the event that the Company is delisted from the Nasdaq. However, these plans have not been finalized and are not within the Company’s control, and therefore cannot be deemed probable. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. As a subsequent event, on December 15, 2023, the Company entered into a credit agreement under which it borrowed $ 45 million, bearing an interest rate equal to the secured overnight financing rate plus 6.75 % with a maturity date of December 15, 2027 (the "Term Loan"). Concurrent with the Term Loan, the Company paid off the remaining liabilities under its asset-based revolving credit facility and terminated that arrangement. The Company further concurrently entered into a supplemental indenture granting a first priority interest in substantially all the Company's assets to the holders of the 2025 Convertible Notes. Defaults under the Term Loan and supplemental indenture to the 2025 Convertible Notes constitute default events under each respective indebtedness. Defaults under the Term Loan and supplemental indenture to the 2025 Convertible Notes constitute default events under each respective indebtedness. See Note 15, Subsequent Events , for additional information . Foreign Currency Translation We translate the assets and liabilities of our non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation included in accumulated other comprehensive income (loss) during the period. The aggregate foreign currency transaction exchange rate gain (loss) included in determining income (loss) before income taxes was ($ 0.1 ) million and $ 0.6 million for the three and nine months ended November 30, 2023 , respectively. The aggregate foreign currency transaction exchange rate gain (loss) included in determining income (loss) before income taxes was $ 0.5 million and ($ 0.1 ) million for the three and nine months ended November 30, 2022, respectively. Comprehensive Loss Comprehensive loss consists of two components, net loss and other comprehensive loss (“OCI”). OCI refers to revenue, expenses and gains and losses that under GAAP are recorded as an element of stockholders’ equity and excluded from net loss . Our OCI consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency. Recently Issued Accounting Pronouncements, Not Yet Adopted There are currently no accounting standards that have been issued but not yet adopted that we believe will have a significant impact on our unaudited condensed consolidated financial position, results of operations or cash flows. |
CASH, CASH EQUIVALENTS AND INVE
CASH, CASH EQUIVALENTS AND INVESTMENTS | 9 Months Ended |
Nov. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
CASH, CASH EQUIVALENTS AND INVESTMENTS | NOTE 2 – CASH, CASH EQUIVALENTS AND INVESTMENTS The following tables summarize our financial instrument assets (in thousands): As of November 30, 2023 Balance Sheet Classification of Fair Value Unrealized Cash and Gains Fair Cash Other Cost (Losses) Value Equivalents Assets Cash $ 38,169 $ — $ 38,169 $ 38,169 $ — Level 1: Money market funds - — - - — Mutual funds (1) 4,828 207 5,035 — 5,035 Total $ 42,997 $ 207 $ 43,204 $ 38,169 $ 5,035 As of February 28, 2023 Balance Sheet Classification of Fair Value Unrealized Cash and Gains Fair Cash Other Cost (Losses) Value Equivalents Assets Cash $ 41,903 $ — $ 41,903 $ 41,903 $ — Level 1: Money market funds 25 — 25 25 — Mutual funds (1) 341 ( 3 ) 338 — 338 Total $ 42,269 $ ( 3 ) $ 42,266 $ 41,928 $ 338 (1) Amounts represent various equities, bond and money market mutual funds that are held in an irrevocable “Rabbi Trust” for payment obligations to non-qualified deferred compensation plan participants. In addition to the mutual funds above, our “Rabbi Trust” also included Corporate-Owned Life Insurance (COLI) starting in fiscal 2020. During the three months ended November 30, 2023 the COLI was closed and the value of the policy was returned to mutual funds. As of November 30, 2023 , there was no cash surrender value of the COLI. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Nov. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3 - INVENTORIES Inventories consist of the following (in thousands): November 30, February 28, 2023 2023 Raw materials $ 7,684 $ 11,920 Finished goods $ 26,375 11,982 $ 34,059 $ 23,902 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Nov. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS Other intangible assets consist of the following (in thousands): Gross (2) Accumulated Amortization (2) Net Useful Life February 28, 2023 Additions & Adjustments, net (1) November 30, 2023 February 28, 2023 Expense November 30, 2023 February 28, 2023 November 30, 2023 Developed technology 4 - 6 years $ 26,895 $ 169 $ 27,064 $ 26,735 $ 329 $ 27,064 $ 160 $ - Tradenames 10 years 30,046 60 30,106 22,704 1,437 24,141 7,342 5,965 Customer relationships 10 - 15 years 35,613 212 35,825 16,813 1,700 18,513 18,800 17,312 Patents 5 years 589 — 589 258 258 331 331 $ 93,143 $ 441 $ 93,584 $ 66,510 $ 3,466 $ 69,976 $ 26,633 $ 23,608 (1) Amounts also include any net changes in intangible asset balances for the periods presented that resulted from foreign currency translations. (2) This table excludes the gross value of fully amortized intangible assets totaling $ 42.8 million and $ 38.9 million at November 30, 2023 and February 28, 2023 , respectively. Intangible assets with finite lives are amortized on a straight-line basis over the expected period to be benefited by future cash flows. We monitor and assess these assets for impairment on a periodic basis. Our assessment includes various new product lines and services, which leverage the existing intangible assets as well as consideration of historical and projected revenues and cash flows. Amortization expense of intangible assets was $ 1.1 million and $ 3.5 million for the three and nine months ended November 30, 2023, respectively. Amortization expense of intangible assets was $ 1.3 million and $ 4.0 million for the three and nine months ended November 30, 2022, respectively. Estimated future amortization expense as of November 30, 2023 is as follows (in thousands): 2024 (remainder) $ 1,124 2025 4,493 2026 4,199 2027 2,579 2028 2,332 Thereafter 8,881 $ 23,608 Changes in goodwill are as follows (in thousands): Software & Subscription Services Telematics Products Total Balance as of February 28, 2023 $ 78,025 $ 16,189 $ 94,214 Impairment loss ( 58,247 ) ( 16,189 ) ( 74,436 ) Effect of exchange rate change on goodwill 805 — 805 Balance as of November 30, 2023 $ 20,583 $ - $ 20,583 See Note 1, Description of Business, Basis of Presentation and Summary of Significant Accounting Policies , for discussion of the goodwill impairment charges recorded during the nine months ended November 30, 2023. |
OTHER ASSETS
OTHER ASSETS | 9 Months Ended |
Nov. 30, 2023 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
OTHER ASSETS | NOTE 5 – OTHER ASSETS Other assets consist of the following (in thousands): November 30, February 28, 2023 2023 Deferred product cost $ 790 $ 842 Deferred compensation plan assets 5,035 6,221 Lease receivables, non-current 18,439 22,006 Prepaid commissions 2,288 4,057 Other 2,718 2,952 $ 29,270 $ 36,078 |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 9 Months Ended |
Nov. 30, 2023 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | NOTE 6 – FINANCING ARRANGEMENTS The following table provides a summary of our debt as of November 30, 2023 and February 28, 2023 (in thousands): Maturity Effective November 30, February 28, Date Interest Rate 2023 2023 2025 Convertible Notes, 2.00 % fixed rate August 1, 2025 2.49 % $ 230,000 $ 230,000 Due to factors under revenue assignments 2020 - 2024 4.70 % 215 1,149 Total term debt 230,215 231,149 Unamortized discount and issuance costs ( 2,067 ) ( 3,028 ) Less: Current portion of long-term term debt - ( 705 ) Long-term debt, net of current portion $ 228,148 $ 227,416 The effective interest rates for the convertible notes include the interest on the notes and amortization of the debt issuance costs. As of November 30, 2023 and February 28, 2023, the fair value of the 2025 Convertible Notes were $ 195 million and $ 201 million , respectively, based on Level 2 inputs. 2025 Convertible Notes In July 2018, we issued debt of $ 230.0 million aggregate principal amount of convertible senior unsecured notes due in 2025 (“2025 Convertible Notes”). These notes require semi-annual interest payments at an annual rate of 2.00 % until maturity, conversion, redemption or repurchase, which will be no later than August 1, 2025 . We may redeem the notes at our option at any time on or after August 6, 2022 at a cash redemption price equal to the principal amount plus accrued interest, but only if the last reported sale price per share of our stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice. The 2025 Convertible Notes are convertible into cash, shares of our common stock or a combination of both, at our election, based on an initial conversion price of $ 30.7450 . Holders may convert their 2025 Convertible Notes at their option upon the occurrence of certain events, as defined in the 2025 Indenture. If our common stock ceases to be listed on any of The NASDAQ Global Market or The NASDAQ Global Select Market (or any of their respective successors), then a “fundamental change” under our 2025 Convertible Notes would occur. If such a fundamental change were to occur, holders of our 2025 Convertible Notes may require us to repurchase their 2025 Convertible Notes following the fundamental change at a cash repurchase price generally equal to the principal amount of the 2025 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any . In July 2018, in connection with the 2025 Convertible Notes, we entered into capped call transactions with certain option counterparties who were initial purchasers of the 2025 Convertible Notes. The capped call transactions are expected to reduce the potential dilution of earnings per share upon conversion of the 2025 Convertible Notes. Under the capped call transactions, we purchased options relating to 7.48 million shares of common stock underlying the notes, with a strike price equal to the conversion price of the notes and with a cap price equal to $ 41.3875 . We paid $ 21.2 million for the note hedges and as a result, approximately $ 15.9 million, net of tax, was recorded as a reduction to additional paid-in capital within stockholders’ equity. As a subsequent event, on December 15, 2023, the Company entered into a credit agreement under which it borrowed $ 45 million, bearing an interest rate equal to the secured overnight financing rate plus 6.75 % with a maturity date of December 15, 2027 (the "Term Loan"). Concurrent with the Term Loan, the Company paid off the remaining liabilities under its asset-based revolving credit facility and terminated that arrangement. The Company further concurrently entered into a supplemental indenture granting a first priority interest in substantially all the Company's assets to the holders of the 2025 Convertible Notes. Defaults under the Term Loan and supplemental indenture to the 2025 Convertible Notes constitute default events under each respective indebtedness. See Note 15, Subsequent Events , for additional information. Revolving Credit Facility On July 13, 2022, we replaced our revolving credit facility with JP Morgan Chase Bank, N.A. and we entered into a new revolving credit facility with PNC Bank, N.A., that provides for an asset-based senior secured revolving credit facility for borrowings up to an aggregate of $ 50.0 million, subject to certain conditions, including borrowing base provisions that limit borrowing capacity to 80 % of eligible accounts receivable and 50 % of eligible inventory. At our election, the borrowings under this revolving credit facility bear interest at either the Bloomberg short-term bank yield rate plus a margin of 2.50 % per annum or an alternate base rate plus a margin of 1.50 % per annum. We also pay an unused line fee ranging from 0.50 % to 0.75 % per annum, based on the level of borrowings, payable quarterly in arrears. Amounts owed under the revolving credit facility are guaranteed by the Company and certain of its subsidiaries. We have also granted security interests in substantially all of our respective assets to secure these obligations. The revolving credit facility will terminate, and all outstanding loans will become due and payable on the earlier of July 13, 2025 and the date that is ninety days prior to the maturity date of our 2025 Convertible notes. The proceeds available under the revolving credit facility could be used for working capital and general corporate purposes, which could include acquisitions. Amounts available for borrowing under the revolving credit facility are reduced by the balance of any outstanding letters of credit. The revolving credit facility contains customary events of default, that upon our default may require us to pay all amounts outstanding and allow PNC Bank to foreclose on collateral. As of November 30, 2023, there were no borrowings outstanding and $ 4.8 million of outstanding letters of credit under this revolving credit facility and total remaining borrowing availability was $ 28.7 million . The revolving credit facility contains certain negative and affirmative covenants, including financial covenants that require us to maintain a fixed charge coverage rate of not less than 1.10 to 1.00 , measured as of the last day of each fiscal quarter if our liquidity position, consisting of specified cash balances plus unused availability on the revolving credit facility, falls below $ 40.0 million on such day. Additionally, the revolving credit facility contains a cash dominion trigger whereby PNC Bank may direct domestic cash balances and receipts to pay down borrowings under the revolving credit facility should our liquidity position, consisting of specified cash balances plus unused availability on the revolving credit facility, fall below $ 25.0 million at the end of any month. As of November 30, 2023, we were in compliance with our covenants under the revolving credit facility. As a subsequent event, on December 15, 2023, the Company entered into a credit agreement under which it borrowed $ 45 million, bearing an interest rate equal to the secured overnight financing rate plus 6.75 % with a maturity date of December 15, 2027 (the "Term Loan"). Concurrent with the Term Loan, the Company paid off the remaining liabilities under its asset-based revolving credit facility and terminated that arrangement. The Company further concurrently entered into a supplemental indenture granting a first priority interest in substantially all the Company's assets to the holders of the 2025 Convertible Notes. Defaults under the Term Loan and supplemental indenture to the 2025 Convertible Notes constitute default events under each respective indebtedness. See Note 15, Subsequent Events , for additional information . |
RESTRUCTURING ACTIVITIES
RESTRUCTURING ACTIVITIES | 9 Months Ended |
Nov. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING ACTIVITIES | NOTE 7 - RESTRUCTURING ACTIVITIES During the third quarter of fiscal 2024, we executed a restructuring plan to reduce future operating expenses and better align resources around our long-term business strategy. The restructuring provided for a reduction of our workforce and the exiting of a leased facility. Under the restructuring plan, we recorded restructuring charges of $ 1.7 million, which included $ 1.4 million related to severance and $ 0.3 million related to the write-off of leasehold improvements due to subleasing a facility. These charges are included in restructuring in the condensed consolidated statements of comprehensive loss for the three and nine month period ended November 30, 2023. The liability related to severance of $ 1.1 million is recorded in accrued payroll and employee benefits as of November 30, 2023. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Nov. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 8 - INCOME TAXES We use the assets and liabilities method when accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We evaluate our estimated annual effective tax rate (“ETR”) on a quarterly basis based on current and forecasted operating results. The relationship between our income tax provision or benefit and our pretax book income or loss can vary significantly from period to period considering, among other factors, the overall level of pretax book income or loss and changes in the blend of jurisdictional income or loss that is taxed at different rates and changes in valuation allowances. The income tax expense of $ 0.0 million and $ 0.5 million for the three and nine months ended November 30, 2023, was primarily attributable to one of our foreign subsidiaries, partially offset by a $ 0.3 million decrease in uncertain tax benefits related to certain foreign net operating loss carryforwards and a $ 0.2 million decrease in valuation allowances against net deferred tax assets. Any income tax benefit associated with the pre-tax loss for the quarter ended November 30, 2023 , resulting primarily from the U.S. jurisdiction, is offset by a full valuation allowance. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Nov. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 9 - EARNINGS PER SHARE Basic earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period plus the dilutive effect of outstanding stock options and restricted stock-based awards using the treasury stock method. The calculation of the basic and diluted loss per share of common stock is as follows (in thousands, except per share value): Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 Net loss $ ( 85,004 ) $ ( 4,733 ) $ ( 93,261 ) $ ( 24,400 ) Basic weighted average number of common shares outstanding 37,427 36,357 37,023 36,027 Effect of stock options and restricted stock units computed on treasury stock method — — — — Diluted weighted average number of common shares outstanding 37,427 36,357 37,023 36,027 Basic net income (loss) per common share: Net loss $ ( 2.27 ) $ ( 0.13 ) $ ( 2.52 ) $ ( 0.68 ) Diluted net income (loss) per common share: Net loss $ ( 2.27 ) $ ( 0.13 ) $ ( 2.52 ) $ ( 0.68 ) All outstanding options and restricted stock units for the three and nine months ended November 30, 2023 and 2022 were excluded from the computation of diluted loss per share because we reported a net loss for each of these periods and the effect of inclusion would be antidilutive. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Nov. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 10 – STOCKHOLDERS’ EQUITY Stock-based compensation expense is included in the following captions of the condensed consolidated statements of comprehensive loss (in thousands): Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 Cost of revenues $ 26 $ 3 $ 91 $ 88 Research and development 257 528 941 1,964 Selling and marketing 460 737 1,607 2,046 General and administrative 824 762 2,830 4,088 $ 1,567 $ 2,030 $ 5,469 $ 8,186 Changes in our outstanding stock options during the nine months ended November 30, 2023 were as follows (options in thousands): Number of Weighted Average Exercise Price Weighted average remaining contractual life (years) Aggregate intrinsic value Outstanding at February 28, 2023 506 $ 16.02 4.0 Granted — — Exercised — — Forfeited or expired ( 506 ) 16.02 Outstanding at November 30, 2023 - $ - $ - Exercisable at November 30, 2023 - $ - $ - Changes in our outstanding restricted stock shares, performance stock units (“PSUs”) and restricted stock units (“RSUs”) during the nine months ended November 30, 2023 were as follows (restricted shares, PSUs and RSUs in thousands): Number of Restricted Weighted Average Grant Date Fair Value Shares Retained to Cover Statutory Minimum Withholding Taxes Outstanding at February 28, 2023 3,506 $ 6.75 Granted 3,109 0.83 Vested ( 1,149 ) 7.16 155 Forfeited ( 1,284 ) 4.50 Outstanding at November 30, 2023 4,182 $ 2.41 As of November 30, 2023, there was $ 6.4 million of total unrecognized stock-based compensation cost related to outstanding nonvested equity awards that is expected to be recognized as an expense over a weighted-average remaining vesting period of 1.8 yea rs. |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 9 Months Ended |
Nov. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF RISK | NOTE 11 - CONCENTRATION OF RISK Significant Customers We sell telematics products and services to large global enterprises in the industrial equipment, transportation and automotive market verticals. One customer in the industrial equipment industry accounted for 32 % and 28 % of our consolidated revenue for the three and nine months ended November 30, 2023 , respectively, and 17 % and 16 % of our consolidated revenue for the three and nine months ended November 30, 2022, respectively. The same customer accounted fo r 20 % and 14 % of our consolidated accounts receivable at November 30, 2023 and February 28, 2023, respectively. Significant Suppliers We purchase a significant amount of our inventory from certain manufacturers or suppliers including components, assemblies and electronic manufacturing parts. These suppliers are located in Mexico and Asia. The inventory is purchased under standard supply agreements that outline the terms of the product delivery. The title and risk of loss of the product generally pass to us upon shipment from the manufacturer’s plant or warehouse. Some of these manufacturers accounted for more than 10 % of our purchases and accounts payable as follows (rounded): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Inventory purchases: Supplier A 21 % 15 % 19 % 12 % Supplier B 9 % 23 % 13 % 16 % Supplier C 24 % 14 % 21 % 18 % Supplier D 7 % 13 % 7 % 11 % November 30, February 28, 2023 2023 Accounts payable: Supplier A 17 % 10 % Supplier B 8 % 22 % Supplier C 22 % 12 % Supplier D 13 % 9 % We are currently reliant upon these manufacturers and suppliers for products. Although we believe that we can obtain products from other sources, the loss of a significant manufacturer or supplier could have a material impact on our financial condition and results of operations as the products that are being purchased may not be available on similar terms from another manufacturer or supplier. Additionally, a substantial portion of our products, components and subassemblies are currently procured from foreign suppliers located primarily in Hong Kong, Mainland China, Malaysia, Mexico and other Pacific Rim countries. Any significant shift in U.S. trade policy, or national security policy, toward these countries or a significant downturn in the political, economic or financial condition of these countries could cause disruption of our supply chain or otherwise disrupt operations. |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 9 Months Ended |
Nov. 30, 2023 | |
Other Financial Information [Abstract] | |
OTHER FINANCIAL INFORMATION | NOTE 12 – OTHER FINANCIAL INFORMATION Supplemental Balance Sheet Information Other current liabilities consist of the following (in thousands): November 30, February 28, 2023 2023 Operating lease liabilities $ 4,758 $ 4,884 Warranty reserves 1,352 1,868 Customer deposits 3,962 2,492 Other (1) 6,496 6,621 $ 16,568 $ 15,865 (1) Amount represents accruals for various operating expenses such as professional fees, vendor incentives and other estimates that are expected to be paid within the next 12 months. Other non-current liabilities consist of the following (in thousands): November 30, February 28, 2023 2023 Deferred revenue $ 11,106 $ 11,104 Deferred compensation plan liability 5,167 5,727 Deferred tax liability 3 242 Other 2,246 2,510 $ 18,522 $ 19,583 Supplemental Statement of Comprehensive Loss Information Interest expense consists of the following (in thousands): Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 Interest expense on 2025 Convertible Notes: Stated interest at 2.00 % per annum $ 1,150 1,150 $ 3,476 3,476 Amortization of discount and issue costs 271 264 813 793 1,421 1,414 4,289 4,269 Other interest expense ( 11 ) 234 373 376 Total interest expense $ 1,410 $ 1,648 $ 4,662 $ 4,645 Supplemental Cash Flow Information “ Net cash provided by (used in) operating activities” includes cash payments for interest expense and income taxes, and non-cash investing activities include accrued liabilities for capital expenditures, as follows (in thousands): Nine Months Ended November 30, 2023 2022 Cash payments for interest and income taxes: Interest expense paid $ 2,633 $ 2,505 Income tax paid, net of refunds $ ( 1 ) $ 96 Non-cash investing activities: Accrued liability for capital expenditures $ 96 $ - |
SEGMENT INFORMATION AND GEOGRAP
SEGMENT INFORMATION AND GEOGRAPHIC DATA | 9 Months Ended |
Nov. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION AND GEOGRAPHIC DATA | NOTE 13 - SEGMENT INFORMATION AND GEOGRAPHIC DATA We operate under two reportable segments: Software & Subscription Services and Telematics Products. 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 customer base, homogeneity of products, and technology. Our Software & Subscription Services segment offers telematics devices bundled with cloud-based, application enablement and telematics service platforms that facilitate integration of our own applications, as well as those of third parties, through open Application Programing Interfaces (“APIs”) to deliver full-featured Internet of Things (“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. Software & Subscription Services segment revenues include SaaS, professional services, devices sold with monitoring services and amortization of revenues and costs for customized devices functional only with application subscriptions that are not sold separately. Our Telematics Products segment offers a portfolio of wireless data communications products, which 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. Telematics Products segment revenues consist primarily of distinct product sales. Segment information is as follows (in thousands): Three Months Ended November 30, 2023 Three Months Ended November 30, 2022 Reportable Segments Reportable Segments Software & Subscription Services Telematics Products Corporate Expenses Total Software & Subscription Services Telematics Products Corporate Expenses Total Revenues $ 34,456 $ 19,169 $ 53,625 $ 49,264 $ 29,625 $ 78,889 Gross profit $ 13,778 $ 3,796 $ 17,574 $ 20,880 $ 5,734 $ 26,614 Gross margin 40 % 20 % 33 % 42 % 19 % 34 % Adjusted EBITDA $ 3,139 $ ( 1,271 ) $ ( 837 ) $ 1,031 $ 8,110 $ ( 2,671 ) $ ( 741 ) $ 4,698 Nine Months Ended November 30, 2023 Nine Months Ended November 30, 2022 Reportable Segments Reportable Segments Software & Subscription Services Telematics Products Corporate Expenses Total Software & Subscription Services Telematics Products Corporate Expenses Total Revenues $ 119,766 $ 66,464 $ 186,230 $ 133,332 $ 83,111 $ 216,443 Gross profit $ 51,517 $ 15,462 $ 66,979 $ 59,803 $ 21,470 $ 81,273 Gross margin 43 % 23 % 36 % 45 % 26 % 38 % Adjusted EBITDA $ 17,068 $ ( 1,423 ) $ ( 2,695 ) $ 12,950 $ 18,688 $ ( 4,662 ) $ ( 2,706 ) $ 11,320 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 primarily on revenue and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), and we therefore consider Adjusted EBITDA to be a primary measure of operating performance of our reportable segments. We define Adjusted EBITDA as earnings before investment income, interest expense, taxes, depreciation, amortization, stock-based compensation, impairment loss and other adjustments as identified below. The adjustments to our net income (losses) prepared in accordance with GAAP to calculate Adjusted EBITDA are itemized below (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Net loss $ ( 85,004 ) $ ( 4,733 ) $ ( 93,261 ) $ ( 24,400 ) Investment income (loss) 124 ( 818 ) ( 360 ) ( 646 ) Interest expense 1,410 1,648 4,662 4,645 Income tax provision 38 268 525 643 Depreciation 3,837 3,893 12,632 12,108 Amortization of intangible assets 1,116 1,323 3,466 3,995 Stock-based compensation 1,567 2,030 5,469 8,186 Restructuring charges 1,718 — 1,718 — Non-recurring legal expenses 91 86 280 4,634 Costs (income) incurred in transition of LoJack North America business to acquiror ( 79 ) 232 ( 319 ) 1,217 Impairment loss 75,106 — 75,106 — Other 1,107 769 3,032 938 Adjusted EBITDA $ 1,031 $ 4,698 $ 12,950 $ 11,320 Our CODM does not obtain identifiable assets by segment because our businesses 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 Nine Months Ended November 30, November 30, 2023 2022 2023 2022 United States $ 29,201 $ 50,387 $ 101,187 $ 137,029 EMEA 14,224 14,919 45,073 39,733 LATAM 3,869 9,011 16,219 23,177 APAC 4,821 2,794 18,620 13,603 All other 1,510 1,778 5,131 2,901 $ 53,625 $ 78,889 $ 186,230 $ 216,443 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. Italy was the only single non-U.S. country that accounted for more than 10% of our revenue in the three and nine months ended November 30, 2023 and 2022 . |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 9 Months Ended |
Nov. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | NOTE 14 – LEGAL PROCEEDINGS Omega patent infringement claim The parties commenced a mediation on April 12, 2022, and on May 17, 2022, CalAmp and Omega Patents LLC executed an agreement for a settlement and release and a covenant not to sue under certain patents. On June 1, 2022, we paid $ 4.9 million pursuant to this settlement agreement. The parties filed a Joint Stipulation of Dismissal With Prejudice on June 15, 2022, and on June 16, 2022, the court dismissed the case with prejudice. Philips patent infringement claim On December 17, 2020, Koninklijke Philips N.V. (“Philips”) filed four separate legal actions against us, and several other companies, accusing the companies of infringing Philips’s 3G and 4G wireless standard-essential patents: (1) first, in the U.S. District Court, District of Delaware, Philips v. Quectel Wireless Solutions Co. Ltd. (“Quectel”), CalAmp, Xirgo Technologies, LLC (“Xirgo”), and Laird Connectivity, Inc. (“Laird”), Philips alleges that our location monitoring units infringe certain claims of U.S. Patent No. 7,831,271 (“the ’271 patent”), U.S. Patent No. 8,199,711 (“the ’711 patent”), U.S. Patent No. 7,554,943 (“the ’943 patent”), and U.S. Patent No. 7,944,935 (“the ’935 patent”) (all four patents collectively, the “Patents”); (2) second, in the U.S. District Court, District of Delaware, Philips v. Telit Wireless Solutions, Inc., Telit Communications Plc, (collectively, “Telit”), and CalAmp, Philips alleges that our location monitoring units and certain modules therein infringe certain claims of the Patents; (3) third, in the U.S. District Court, District of Delaware, Philips v. Thales DIS AIS USA LLC (F/K/A Gemalto IoT LLC “Gemalto”) F/K/A Cinterion Wireless Modules NAFTA LLC (“Cinterion”), Thales DIS AIS Deutschland GmbH (F/K/A Gemalto M2M GmbH), Thales USA, Inc., Thales S.A., (collectively, “Thales”), CalAmp, Xirgo, and Laird, Philips alleges that our location monitoring units infringe certain claims of the Patents, and (4) fourth, before The International Trade Commission (“ITC”), Philips v. Quectel, CalAmp, Xirgo, Laird, Thales, Gemalto, Cinterion, and Telit, Philips alleges violations of section 337 of the U.S. Tariff Act based upon our importation into the United States, the sale for importation, and the sale within the United States after importation of certain UMTS (Universal Mobile Telecommunications System) and LTE (Long Term Evolution) cellular communication modules and products containing the same by reason of our location monitoring units that allegedly infringe on certain claims of the Patents. On April 1, 2022, the administrative law judge (“ALJ”) at the ITC issued a Final Initial Determination on the question of violation of section 337 (19 U.S.C. § 1337). The ALJ determined that a violation of section 337 had not occurred with respect to any of the asserted patents. On July 6, 2022, the ITC affirmed the Final Initial Determination of no violation of Section 337 and terminated the investigation and the deadline for any appeal has passed. While the district court case against Thales was recently reopened to set a status conference, the district court cases against Quectel and Telit are currently stayed. Considering the ITC’s determination of no infringement of any of the four patents asserted we believe that we have strong defenses in the Delaware district court cases. Also, we believe we have strong indemnification claims against our communication module suppliers, and are entitled to have our defense costs and any losses resulting from these proceedings paid by those suppliers, who are co-defendants in these proceedings. Currently, it is not feasible to predict with certainty the outcome of the three district court cases, and no specific amount of damages has been identified. Additionally, we believe the ultimate resolution of the proceedings, including indemnification and defense by our module suppliers, will not have a material adverse effect on our consolidated results of operations, financial condition, or cash flows. Other matters In addition to the foregoing matters, from time to time as a normal consequence of doing business, various claims and litigation may be asserted or commenced against us. In particular, we may receive claims concerning contract performance or claims that our products or services infringe the intellectual property of third parties which are in the ordinary course of business. While the outcome of any such claims or litigation cannot be predicted with certainty, management does not believe that the outcome of such matters existing at the present time would have a material adverse effect on our condensed consolidated results of operations, financial condition or cash flows. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Nov. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 15 – SUBSEQUENT EVENTS Term Loan On December 15, 2023, the Company and two of its domestic subsidiaries, CalAmp Wireless Networks Corporation and Synovia Solutions LLC (together with the Company, the “Borrowers”), entered into a Credit Agreement (the “Credit Agreement”) with Lynrock Lake Master Fund LP (“Lynrock” or “Lender”) under which the Borrowers have borrowed $ 45 million. Amounts owing under the Credit Agreement are guaranteed by the Borrowers and certain existing and future subsidiaries of the Company, and will be secured by first priority security interests in substantially all of the assets of the Borrowers and certain other subsidiaries of the Company. Amounts owing under the Credit Agreement bear interest at an annual rate equal to the secured overnight financing rate as defined in the Credit Agreement plus 6.75 %. The Credit Agreement has a maturity date of December 15, 2027 . The proceeds of the Term Loan will be used for general corporate purposes. The Credit Agreement does not contain any financial covenants, but does contain customary affirmative covenants, including financial statement reporting requirements, and customary negative covenants that limit the ability of the Company and its subsidiaries to, among other things, pay dividends, incur debt, create liens and encumbrances, or acquire, merge or consolidate with or into another person or entity. The Credit Agreement also contains customary events of default, such as the failure to pay obligations when due, initiation of bankruptcy or insolvency proceedings, defaults on certain other indebtedness (including the 2025 Convertible Notes), change of control or breach of representations and warranties or covenants. Upon an event of default, the Lender may require the immediate payment of all amounts outstanding and foreclose on collateral. In connection with the Credit Agreement, Lynrock was also granted board observation rights. Supplemental Indenture Lynrock is also the holder of nearly all of the outstanding principal amount of the Company’s 2025 Convertible Notes. In connection with the execution of the Credit Agreement, the Company also entered into a Supplemental Indenture (the “Supplemental Indenture”) to the Indenture, dated June 20, 2018, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee. Pursuant to the Supplemental Indenture, the Company and the Borrowers granted a first priority security interest in substantially all of the assets of the Borrowers and certain other subsidiaries of the Company in favor of the holders of the 2025 Convertible Notes. The 2025 Convertible Notes will rank pari passu, or equal in right of payment, with the Term Loan . Revolving Credit Facility Termination On December 15, 2023, the Company paid off the remaining liabilities under the asset-based senior secured revolving credit facility with PNC Bank and terminated the facility. |
DESCRIPTION OF BUSINESS, BASI_2
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Nov. 30, 2023 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business CalAmp Corp. (including its subsidiaries unless the context otherwise requires, “CalAmp”, “the Company”, “we”, “our”, or “us”) is a connected intelligence company that leverages a data-driven solutions ecosystem to help people and organizations improve operational performance. We solve complex problems for customers within the market verticals of transportation and logistics, commercial and government fleets, industrial equipment, and consumer vehicles by providing solutions that track, monitor, and recover their vital assets. The data and insights enabled by CalAmp solutions provide real-time visibility into a user’s vehicles, assets, drivers, and cargo, giving organizations greater understanding and control of their operations. Ultimately, these insights drive operational visibility, safety, efficiency, maintenance, and sustainability for organizations around the world. We are a global organization that is headquartered in Irvine, California. Basis of Presentation In the opinion of our management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary to present fairly our financial position at November 30, 2023 and our results of operations for the three and nine months ended November 30, 2023 and 2022. The results of operations for such periods are not necessarily indicative of results to be expected for the full fiscal year ending February 29, 2024. Certain notes and other information included in the audited financial statements in our Annual Report on Form 10-K for the fiscal year ended February 28, 2023 are condensed in or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with our 2023 Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission (“SEC”) on April 28, 2023. All intercompany transactions and accounts have been eliminated in consolidation. The accompanying condensed consolidated financial statements have been prepared with the assumption that the Company will continue as a going concern. Based on our current and projected level of operations, we believe that our future cash flows from operating activities, our existing cash and cash equivalents and our revolving credit facility will provide adequate funds for ongoing operations and working capital requirements for at least the next 12 months. However, our business is subject to various factors that could materially impact our assumptions leading to the future consumption of our available cash. As a subsequent event, on December 15, 2023, the Company entered into a credit agreement under which it borrowed $ 45 million, bearing an interest rate equal to the secured overnight financing rate plus 6.75 % with a maturity date of December 15, 2027 (the "Term Loan"). Concurrent with the Term Loan, the Company paid off the remaining liabilities under its asset-based revolving credit facility and terminated that arrangement. The Company further concurrently entered into a supplemental indenture granting a first priority interest in substantially all the Company's assets to the holders of the 2025 Convertible Notes. Defaults under the Term Loan and supplemental indenture to the 2025 Convertible Notes constitute default events under each respective indebtedness. See Note 15, Subsequent Events , for additional information. Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We have considered all known and reasonably available information that existed throughout the three and nine months ended November 30, 2023 in making accounting judgments, estimates and disclosures. |
Revenue Recognition | Revenue Recognition Revenues from subscription services are recognized ratably on a straight-line basis over the term of the subscription, which generally ranges from two to five years . We recognize revenue from telematics product sales upon the transfer of control of promised products to customers in an amount that reflects the transaction price. Customers generally do not have a right of return except for defective products returned during the warranty period. We record estimated commitments related to customer incentive programs as reductions of revenues. From time to time, we provide various professional services to customers. These services include project management, engineering services and installation services, which are often distinct from other performance obligations and are recognized as the related services are performed. For certain professional service contracts, we recognize revenue based on the proportion of total costs incurred to-date over the estimated cost of the contract, which is an input method. In many customer arrangements, subscription services are bundled with the sale or lease of telematics devices within the same contractual arrangement. To determine the performance obligations under these arrangements, we assess the contractual elements and, in particular, whether the telematics products within the arrangement are distinct. This is an area of judgment that includes the consideration of all elements of the arrangement. Significant factors in determining whether telematics devices are distinct are whether such devices are sold separately, as well as the degree of integration and interdependency between the subscription elements of the arrangement and the associated telematics devices. If we conclude that the telematics devices within a customer arrangement are distinct and therefore represent a separate performance obligation, the total expected consideration associated with the contract is allocated between the performance obligations based upon the relative stand-alone selling price associated with each performance obligation. We base stand-alone selling prices on pricing for the same or similar items. For some customer arrangements, we have concluded that the subscription services and associated telematics devices are not distinct performance obligations and thus represent a single combined performance obligation. For certain other customer arrangements under which devices are leased in combination with subscription services, we consider the arrangement to be predominately a subscription service and thus a combined single performance obligation for purposes of revenue recognition. In both of these circumstances, we generally recognize the total expected consideration as revenue over the term of the subscription. In customer arrangements for which the embedded lease is an operating lease, we utilize the practical expedient that allows for the combining of lease and nonlease components. Device related costs associated with arrangements in which title to the device is transferred to the customer under a single combined performance obligation are recorded as deferred costs on the balance sheet and are amortized into cost of revenues over the term of the subscription or the estimated in-service lives of the devices. In contractual arrangements under which we provide devices as part of the subscription contract but we retain control of the devices, the cost of the devices is capitalized as property and equipment and depreciated over the estimated useful life of three to five years . We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer. The timing of revenue recognition may differ from the timing of our invoicing to customers. Contract assets are comprised of unbilled amounts for which we have transferred products or provided services to our customers and are classified as accounts receivable. Contract liabilities (deferred revenues) are comprised of billings or payments received from our customers in advance of performance under the contract. During the three and nine months ended November 30, 2023, we recognized $ 4.4 million and $ 20.5 million , respectively, in revenue from the deferred revenue balance of $ 36.6 million as of February 28, 2023. Incremental costs of obtaining a contract with a customer consist of sales commissions, which are recognized on a straight-line basis over the life of the corresponding contracts. Sales commissions included in prepaid expenses and other current assets and other assets were $ 1.8 million and $ 2.3 million , respectively, as of November 30, 2023. We disaggregate revenue from contracts with customers into reportable segments, geography, type of goods and services and timing of revenue recognition. See Note 13, Segment Information and Geographic Data , for our revenue by segment and geography. The disaggregation of revenue by type of goods and services and by timing of revenue recognition is as follows (in thousands): Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 Revenue by type of goods and services: Telematics devices and accessories $ 31,217 $ 53,331 $ 114,866 $ 138,420 Rental income and other services $ 4,583 6,307 $ 15,673 17,233 Recurring application subscriptions (1) $ 17,825 19,251 $ 55,691 60,790 Total $ 53,625 $ 78,889 $ 186,230 $ 216,443 Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 Revenue by timing of revenue recognition: Revenue recognized at a point in time $ 33,090 $ 57,337 $ 122,850 $ 149,511 Revenue recognized over time $ 20,535 21,552 63,380 66,932 Total $ 53,625 $ 78,889 $ 186,230 $ 216,443 (1) Recurring application subscriptions includes $ 0.0 million and $ 0.5 million during the three months ended November 30, 2023 and 2022, respectively, and $ 0.0 million and $ 1.9 million during the nine months ended November 30, 2023 and 2022, respectively, attributable to the auto vehicle finance business which has been completely wound down. Telematics devices and accessories revenues presented in the table above include devices sold in customer arrangements that include both device and subscription services. Revenues related to recurring application subscriptions include subscription revenues as well as amortization of deferred revenue for contractual arrangements under which the subscription services and associated telematics devices were determined to be a single combined performance obligation. Remaining performance obligations for Software & Subscription Services represents contracted revenue that has not yet been recognized, which includes deferred revenue on our consolidated balance sheets and unbilled amounts that will be recognized as revenue in future periods. As of November 30, 2023 and February 28, 2023, we have estimated remaining performance obligations for contractually committed revenues of $ 186.0 million and $ 234.5 million respectively. As of November 30, 2023, we expect to recognize approximately 19 % of the revenue under these remaining performance obligations in the remainder of fiscal 2024 and 46 % in fiscal 2025 . As of February 28, 2023, we expected to recognize approximately 49 % of the then remaining performance obligations in fiscal 2024 and 27 % in fiscal 2025 . We exclude contracts that have original durations of less than one year from the aforementioned remaining performance obligation disclosure. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with maturities at date of purchase of three months or less to be cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consists of amounts due to us from sales arrangements executed in our normal business activities and are recorded at invoiced amounts or in some cases amounts expected to be invoiced. In addition, this balance includes unbilled amounts as discussed within Revenue Recognition above. Our payment terms generally range between 30 to 60 days of our invoice date with a few exceptions that extend the credit terms up to 90 days, and we do not offer financing options. We present the aggregate accounts receivable balance net of an allowance for doubtful accounts. Generally, collateral and other security is not obtained for outstanding accounts receivable. Credit losses, if any, are recognized based on management’s evaluation of historical collection experience, customer-specific financial conditions as well as an evaluation of current industry trends and general economic conditions. Past due balances are assessed by management on a periodic basis and balances are written off when the customer’s financial condition no longer warrants pursuit of collection. Actual collections may differ from estimated amounts. We group all accounts receivables and lease receivables into a single portfolio and analyze the credit risk associated with our accounts receivables and lease receivables. Our historical loss rates have not shown any significant differences between customer industries or geographies. As disclosed in Note 13, Segment Information and Geographic Data , we do not have significant international geographic concentrations of revenue, and, as a result, we do not have significant concentrations of accounts receivables or lease receivables in any single geography outside of the United States. The allowance for doubtful accounts totaled $ 2.8 million and $ 1.8 million as of November 30, 2023 and February 28, 2023 , respectively. |
Goodwill and Other Long-Lived Assets | Goodwill and Other Long-Lived Assets Goodwill and long-lived assets to be held and used, including identifiable intangible assets, are reviewed for impairment annually in the fourth quarter or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets or reporting unit to the estimated fair value of those assets or reporting unit determined using either an income approach, a market approach, or a combination of both. If the assets are impaired, the impairment recognized is the amount by which the carrying amount exceeds the fair value of the assets. As of November 30, 2023 we identified potential impairment indicators relating to the overall decline in our stock price and the performance of certain business units. Overall, our revenue and gross margin performance continued to deteriorate, and our stock price continued to decline during the three and nine months ended November 30, 2023, declining approximately ( 48 %) from the August 31, 2023 closing price and ( 93 %) from the February 28, 2023 closing price to $ 0.32 as of November 30, 2023, reflecting a market capitalization that was below our November 30, 2023 net book value. As of November 30, 2023, the decline in our stock price and other factors were deemed to be sustained, a nd therefore a triggering event as of November 30, 2023 was deemed to have occurred, requiring impairment assessments of our goodwill and long-lived assets to be held and used. In accordance with the accounting guidance within ASC 350, Intangibles – Goodwill and Other ("ASC 350"), and ASC 360, Property, Plant and Equipment , our long-lived assets to be held and used were initially tested to determine if the related assets were recoverable, which required a comparison of undiscounted cash flows of the asset groups to their carrying value. Our long-lived assets to be held and used include our property and equipment, right-of-use assets, and amortizable intangible assets. Triggering events were identified within specific asset groups within the Software and Subscription Services businesses. The Company identified the cash flows for each asset group over a period of time reflective of the remaining useful life of the primary asset within each asset group, along with the cash flows associated with a hypothetical sale of each asset group at the end of the respective periods. Based on this comparison, the sum of the undiscounted cash flows for each asset group was in excess of the respective asset group’s carrying value, and each asset group was deemed to be recoverable with substantial cushion. No additional consideration of impairment of our long-lived assets to be held and used was required. Subsequently, the Company evaluated the impairment of its goodwill by determining the fair value of the Company’s three reporting units using the assistance of a third-party valuation specialist. In accordance with ASC 350, the impairment of goodwill is determined through a comparison of the fair value of a reporting unit compared to the reporting unit’s carrying value; if the carrying value exceeds the fair value of the reporting unit, the difference is to be recognized as goodwill impairment of the reporting unit until such time that the goodwill balance is $ 0 . The fair value of the reporting units was determined using a combination of the income and market approaches. For each reporting unit, we applied a weighting to the fair value determination under each approach in order to determine the fair value of the respective reporting unit. The income approach for each reporting unit used the discounted cash flow method to determine the fair value, which included the following Level 3 significant inputs: projected financial information, income tax rates, and discount rates. The market approach for each reporting unit reflected a fair value calculated by the product of selected public company multiples, Level 3 inputs, and the reporting unit’s revenue and EBITDA. A weighting for each reporting unit was then applied to the fair value results from each method to estimate the fair value of the respective reporting units. In order to ensure the reasonableness of the individual reporting unit’s fair value, we utilized a reconciliation of the market capitalization of the Company as of November 30, 2023, a Level 1 input, to the sum of the fair value of the reporting units with an implied control premium applied. Based on the comparison of the individual reporting unit’s fair value and the respective reporting unit’s carrying value, the estimated fair value of the Tracking & Monitoring Reporting Unit within the Software and Subscription Services segment and the Telematics Reporting Unit within the Telematics segment was $ 67.3 million and $ 14.3 million respectively, compared to carrying values of $ 126.6 million and $ 33.0 million , respectively, as of November 30, 2023. As such, impairment charges related to the Company’s United States operations within these reporting units were recognized in the condensed consolidated statement of operations during the quarter ended November 30, 2023 of $ 74.4 million , reflecting the sum of the difference between the carrying values and fair values of the Tracking & Monitoring Reporting Unit and Telematics Reporting Unit. |
Fair Value Measurements | Fair Value Measurements We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in our financial statements. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly manner in an arm’s-length transaction between market participants at the measurement date. Fair value is estimated by using the following hierarchy: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Litigation and Other Contingencies | Litigation and Other Contingencies We accrue for litigation and other contingencies whenever we determine that an unfavorable outcome is probable and a liability is reasonably estimable. The amount of the accrual is estimated based on a review of each claim, including the type and facts of the claim and our assessment of the merits of the claim. These accruals are reviewed at least on a quarterly basis and are adjusted to reflect the impact of recent negotiations, settlements, court rulings, advice from legal counsel and other events pertaining to the case. Such accruals, if any, are recorded as general and administrative expenses in our condensed consolidated statements of comprehensive loss. Although we take considerable measures to mitigate our exposure in these matters, litigation is unpredictable; however, we believe that we have valid defenses with respect to pending legal matters against us as well as adequate provisions for probable and estimable losses. All costs for legal services are expensed as incurred. |
Liquidity and Going Concern | Liquidity and Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Management evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern over the next twelve months from the issuance of the accompanying consolidated financial statements. The Company is currently listed on the NASDAQ Global Select Market, LLC (“Nasdaq”), a national securities exchange. The Nasdaq requires companies desiring to list their common stock to meet certain listing criteria including total number of shareholders, minimum stock price, total value of public float, and in some cases total shareholders’ equity and market capitalization. The Company’s failure to meet such applicable listing criteria could prevent the Company from listing its common stock on the Nasdaq. The Company has received a delisting notice from Nasdaq as the Company’s shares are currently trading below the minimum $1 stock price listing requirement. In addition, at the date of issuance of its interim consolidated condensed financial statements, the Company has measured its compliance with the continued listing criteria set forth in Nasdaq listing rules 5450(a) and 5450(b)(1)-(3) with respect to the minimum market value of publicly held shares, minimum market value of listed securities, and minimum stockholders' equity requirements, and concluded that it was not in compliance with the aforementioned listing standards. The Company has not yet received an additional non-compliance notice from Nasdaq. If the Company’s common stock ceases to be listed on any of The NASDAQ Global Market or The NASDAQ Global Select Market (or any of their respective successors), then a “fundamental change” under the 2025 Convertible Notes would occur. If such a fundamental change under the 2025 Convertible Notes were to occur, holders of the Company’s 2025 Convertible Notes may require the Company to repurchase their 2025 Convertible Notes following the fundamental change at a cash repurchase price generally equal to the principal amount of the 2025 Convertible Notes to be repurchased, plus accrued and unpaid interest. As of November 30, 2023, and through the date the financial statements are issued, the Company believes it has sufficient liquidity to be able to operate its business for at least 12 months following the date that the financial statements are issued. However, as of November 30, 2023 the principal amount of the 2025 Convertible notes plus accrued and unpaid interests is in excess of the Company’s available cash resources. Management concluded that the uncertainties associated with the Company’s ability to cure noncompliance with the Nasdaq listing requirements coupled with the repurchase rights of the 2025 Convertible Note holders under a fundamental change scenario represent conditions raising substantial doubt regarding the Company’s ability to continue as a going concern. In response to these conditions, management intends to request a waiver from the holder of the 2025 Convertible Notes to waive the fundamental change provision in the Convertible Notes agreement and concede the right to require the Company to repurchase the Convertible Notes in the event that the Company is delisted from the Nasdaq. However, these plans have not been finalized and are not within the Company’s control, and therefore cannot be deemed probable. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. As a subsequent event, on December 15, 2023, the Company entered into a credit agreement under which it borrowed $ 45 million, bearing an interest rate equal to the secured overnight financing rate plus 6.75 % with a maturity date of December 15, 2027 (the "Term Loan"). Concurrent with the Term Loan, the Company paid off the remaining liabilities under its asset-based revolving credit facility and terminated that arrangement. The Company further concurrently entered into a supplemental indenture granting a first priority interest in substantially all the Company's assets to the holders of the 2025 Convertible Notes. Defaults under the Term Loan and supplemental indenture to the 2025 Convertible Notes constitute default events under each respective indebtedness. Defaults under the Term Loan and supplemental indenture to the 2025 Convertible Notes constitute default events under each respective indebtedness. See Note 15, Subsequent Events , for additional information . |
Foreign Currency Translation | Foreign Currency Translation We translate the assets and liabilities of our non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation included in accumulated other comprehensive income (loss) during the period. The aggregate foreign currency transaction exchange rate gain (loss) included in determining income (loss) before income taxes was ($ 0.1 ) million and $ 0.6 million for the three and nine months ended November 30, 2023 , respectively. The aggregate foreign currency transaction exchange rate gain (loss) included in determining income (loss) before income taxes was $ 0.5 million and ($ 0.1 ) million for the three and nine months ended November 30, 2022, respectively. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of two components, net loss and other comprehensive loss (“OCI”). OCI refers to revenue, expenses and gains and losses that under GAAP are recorded as an element of stockholders’ equity and excluded from net loss . Our OCI consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency. |
Recently Issued Accounting Pronouncements, Not Yet Adopted | Recently Issued Accounting Pronouncements, Not Yet Adopted There are currently no accounting standards that have been issued but not yet adopted that we believe will have a significant impact on our unaudited condensed consolidated financial position, results of operations or cash flows. |
DESCRIPTION OF BUSINESS, BASI_3
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
ASU 2014-09 [Member] | |
Disaggregation of Revenue by Type of Goods and Services and by Timing of Revenue Recognition which Reflect the Immaterial Adjustments | Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 Revenue by type of goods and services: Telematics devices and accessories $ 31,217 $ 53,331 $ 114,866 $ 138,420 Rental income and other services $ 4,583 6,307 $ 15,673 17,233 Recurring application subscriptions (1) $ 17,825 19,251 $ 55,691 60,790 Total $ 53,625 $ 78,889 $ 186,230 $ 216,443 Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 Revenue by timing of revenue recognition: Revenue recognized at a point in time $ 33,090 $ 57,337 $ 122,850 $ 149,511 Revenue recognized over time $ 20,535 21,552 63,380 66,932 Total $ 53,625 $ 78,889 $ 186,230 $ 216,443 (1) Recurring application subscriptions includes $ 0.0 million and $ 0.5 million during the three months ended November 30, 2023 and 2022, respectively, and $ 0.0 million and $ 1.9 million during the nine months ended November 30, 2023 and 2022, respectively, attributable to the auto vehicle finance business which has been completely wound down. |
CASH, CASH EQUIVALENTS AND IN_2
CASH, CASH EQUIVALENTS AND INVESTMENTS (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Marketable Securities | The following tables summarize our financial instrument assets (in thousands): As of November 30, 2023 Balance Sheet Classification of Fair Value Unrealized Cash and Gains Fair Cash Other Cost (Losses) Value Equivalents Assets Cash $ 38,169 $ — $ 38,169 $ 38,169 $ — Level 1: Money market funds - — - - — Mutual funds (1) 4,828 207 5,035 — 5,035 Total $ 42,997 $ 207 $ 43,204 $ 38,169 $ 5,035 As of February 28, 2023 Balance Sheet Classification of Fair Value Unrealized Cash and Gains Fair Cash Other Cost (Losses) Value Equivalents Assets Cash $ 41,903 $ — $ 41,903 $ 41,903 $ — Level 1: Money market funds 25 — 25 25 — Mutual funds (1) 341 ( 3 ) 338 — 338 Total $ 42,269 $ ( 3 ) $ 42,266 $ 41,928 $ 338 (1) Amounts represent various equities, bond and money market mutual funds that are held in an irrevocable “Rabbi Trust” for payment obligations to non-qualified deferred compensation plan participants. In addition to the mutual funds above, our “Rabbi Trust” also included Corporate-Owned Life Insurance (COLI) starting in fiscal 2020. During the three months ended November 30, 2023 the COLI was closed and the value of the policy was returned to mutual funds. As of November 30, 2023 , there was no cash surrender value of the COLI. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following (in thousands): November 30, February 28, 2023 2023 Raw materials $ 7,684 $ 11,920 Finished goods $ 26,375 11,982 $ 34,059 $ 23,902 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | Other intangible assets consist of the following (in thousands): Gross (2) Accumulated Amortization (2) Net Useful Life February 28, 2023 Additions & Adjustments, net (1) November 30, 2023 February 28, 2023 Expense November 30, 2023 February 28, 2023 November 30, 2023 Developed technology 4 - 6 years $ 26,895 $ 169 $ 27,064 $ 26,735 $ 329 $ 27,064 $ 160 $ - Tradenames 10 years 30,046 60 30,106 22,704 1,437 24,141 7,342 5,965 Customer relationships 10 - 15 years 35,613 212 35,825 16,813 1,700 18,513 18,800 17,312 Patents 5 years 589 — 589 258 258 331 331 $ 93,143 $ 441 $ 93,584 $ 66,510 $ 3,466 $ 69,976 $ 26,633 $ 23,608 (1) Amounts also include any net changes in intangible asset balances for the periods presented that resulted from foreign currency translations. (2) This table excludes the gross value of fully amortized intangible assets totaling $ 42.8 million and $ 38.9 million at November 30, 2023 and February 28, 2023 , respectively. |
Schedule of Future Amortization Expense | Estimated future amortization expense as of November 30, 2023 is as follows (in thousands): 2024 (remainder) $ 1,124 2025 4,493 2026 4,199 2027 2,579 2028 2,332 Thereafter 8,881 $ 23,608 |
Schedule of Goodwill | Changes in goodwill are as follows (in thousands): Software & Subscription Services Telematics Products Total Balance as of February 28, 2023 $ 78,025 $ 16,189 $ 94,214 Impairment loss ( 58,247 ) ( 16,189 ) ( 74,436 ) Effect of exchange rate change on goodwill 805 — 805 Balance as of November 30, 2023 $ 20,583 $ - $ 20,583 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consist of the following (in thousands): November 30, February 28, 2023 2023 Deferred product cost $ 790 $ 842 Deferred compensation plan assets 5,035 6,221 Lease receivables, non-current 18,439 22,006 Prepaid commissions 2,288 4,057 Other 2,718 2,952 $ 29,270 $ 36,078 |
FINANCING ARRANGEMENTS (Tables)
FINANCING ARRANGEMENTS (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Debt | The following table provides a summary of our debt as of November 30, 2023 and February 28, 2023 (in thousands): Maturity Effective November 30, February 28, Date Interest Rate 2023 2023 2025 Convertible Notes, 2.00 % fixed rate August 1, 2025 2.49 % $ 230,000 $ 230,000 Due to factors under revenue assignments 2020 - 2024 4.70 % 215 1,149 Total term debt 230,215 231,149 Unamortized discount and issuance costs ( 2,067 ) ( 3,028 ) Less: Current portion of long-term term debt - ( 705 ) Long-term debt, net of current portion $ 228,148 $ 227,416 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | The calculation of the basic and diluted loss per share of common stock is as follows (in thousands, except per share value): Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 Net loss $ ( 85,004 ) $ ( 4,733 ) $ ( 93,261 ) $ ( 24,400 ) Basic weighted average number of common shares outstanding 37,427 36,357 37,023 36,027 Effect of stock options and restricted stock units computed on treasury stock method — — — — Diluted weighted average number of common shares outstanding 37,427 36,357 37,023 36,027 Basic net income (loss) per common share: Net loss $ ( 2.27 ) $ ( 0.13 ) $ ( 2.52 ) $ ( 0.68 ) Diluted net income (loss) per common share: Net loss $ ( 2.27 ) $ ( 0.13 ) $ ( 2.52 ) $ ( 0.68 ) |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Equity [Abstract] | |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense is included in the following captions of the condensed consolidated statements of comprehensive loss (in thousands): Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 Cost of revenues $ 26 $ 3 $ 91 $ 88 Research and development 257 528 941 1,964 Selling and marketing 460 737 1,607 2,046 General and administrative 824 762 2,830 4,088 $ 1,567 $ 2,030 $ 5,469 $ 8,186 |
Summary of Stock Option Activity | Changes in our outstanding stock options during the nine months ended November 30, 2023 were as follows (options in thousands): Number of Weighted Average Exercise Price Weighted average remaining contractual life (years) Aggregate intrinsic value Outstanding at February 28, 2023 506 $ 16.02 4.0 Granted — — Exercised — — Forfeited or expired ( 506 ) 16.02 Outstanding at November 30, 2023 - $ - $ - Exercisable at November 30, 2023 - $ - $ - |
Summary of Restricted Stock Shares (RSU's), and Performance Stock Units (PSU's) Activity | Changes in our outstanding restricted stock shares, performance stock units (“PSUs”) and restricted stock units (“RSUs”) during the nine months ended November 30, 2023 were as follows (restricted shares, PSUs and RSUs in thousands): Number of Restricted Weighted Average Grant Date Fair Value Shares Retained to Cover Statutory Minimum Withholding Taxes Outstanding at February 28, 2023 3,506 $ 6.75 Granted 3,109 0.83 Vested ( 1,149 ) 7.16 155 Forfeited ( 1,284 ) 4.50 Outstanding at November 30, 2023 4,182 $ 2.41 |
CONCENTRATION OF RISK (Tables)
CONCENTRATION OF RISK (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Schedule of Significant Suppliers Concentration Risk Percentage | Some of these manufacturers accounted for more than 10 % of our purchases and accounts payable as follows (rounded): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Inventory purchases: Supplier A 21 % 15 % 19 % 12 % Supplier B 9 % 23 % 13 % 16 % Supplier C 24 % 14 % 21 % 18 % Supplier D 7 % 13 % 7 % 11 % November 30, February 28, 2023 2023 Accounts payable: Supplier A 17 % 10 % Supplier B 8 % 22 % Supplier C 22 % 12 % Supplier D 13 % 9 % |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Other Financial Information [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Supplemental Balance Sheet Information Other current liabilities consist of the following (in thousands): November 30, February 28, 2023 2023 Operating lease liabilities $ 4,758 $ 4,884 Warranty reserves 1,352 1,868 Customer deposits 3,962 2,492 Other (1) 6,496 6,621 $ 16,568 $ 15,865 (1) Amount represents accruals for various operating expenses such as professional fees, vendor incentives and other estimates that are expected to be paid within the next 12 months. Other non-current liabilities consist of the following (in thousands): November 30, February 28, 2023 2023 Deferred revenue $ 11,106 $ 11,104 Deferred compensation plan liability 5,167 5,727 Deferred tax liability 3 242 Other 2,246 2,510 $ 18,522 $ 19,583 |
Schedule of Interest Expense | Supplemental Statement of Comprehensive Loss Information Interest expense consists of the following (in thousands): Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 Interest expense on 2025 Convertible Notes: Stated interest at 2.00 % per annum $ 1,150 1,150 $ 3,476 3,476 Amortization of discount and issue costs 271 264 813 793 1,421 1,414 4,289 4,269 Other interest expense ( 11 ) 234 373 376 Total interest expense $ 1,410 $ 1,648 $ 4,662 $ 4,645 |
Schedule of Supplemental Cash Flow Information | “ Net cash provided by (used in) operating activities” includes cash payments for interest expense and income taxes, and non-cash investing activities include accrued liabilities for capital expenditures, as follows (in thousands): Nine Months Ended November 30, 2023 2022 Cash payments for interest and income taxes: Interest expense paid $ 2,633 $ 2,505 Income tax paid, net of refunds $ ( 1 ) $ 96 Non-cash investing activities: Accrued liability for capital expenditures $ 96 $ - |
SEGMENT INFORMATION AND GEOGR_2
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Segment information is as follows (in thousands): Three Months Ended November 30, 2023 Three Months Ended November 30, 2022 Reportable Segments Reportable Segments Software & Subscription Services Telematics Products Corporate Expenses Total Software & Subscription Services Telematics Products Corporate Expenses Total Revenues $ 34,456 $ 19,169 $ 53,625 $ 49,264 $ 29,625 $ 78,889 Gross profit $ 13,778 $ 3,796 $ 17,574 $ 20,880 $ 5,734 $ 26,614 Gross margin 40 % 20 % 33 % 42 % 19 % 34 % Adjusted EBITDA $ 3,139 $ ( 1,271 ) $ ( 837 ) $ 1,031 $ 8,110 $ ( 2,671 ) $ ( 741 ) $ 4,698 Nine Months Ended November 30, 2023 Nine Months Ended November 30, 2022 Reportable Segments Reportable Segments Software & Subscription Services Telematics Products Corporate Expenses Total Software & Subscription Services Telematics Products Corporate Expenses Total Revenues $ 119,766 $ 66,464 $ 186,230 $ 133,332 $ 83,111 $ 216,443 Gross profit $ 51,517 $ 15,462 $ 66,979 $ 59,803 $ 21,470 $ 81,273 Gross margin 43 % 23 % 36 % 45 % 26 % 38 % Adjusted EBITDA $ 17,068 $ ( 1,423 ) $ ( 2,695 ) $ 12,950 $ 18,688 $ ( 4,662 ) $ ( 2,706 ) $ 11,320 |
Summary of Adjusted EBITDA | The adjustments to our net income (losses) prepared in accordance with GAAP to calculate Adjusted EBITDA are itemized below (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Net loss $ ( 85,004 ) $ ( 4,733 ) $ ( 93,261 ) $ ( 24,400 ) Investment income (loss) 124 ( 818 ) ( 360 ) ( 646 ) Interest expense 1,410 1,648 4,662 4,645 Income tax provision 38 268 525 643 Depreciation 3,837 3,893 12,632 12,108 Amortization of intangible assets 1,116 1,323 3,466 3,995 Stock-based compensation 1,567 2,030 5,469 8,186 Restructuring charges 1,718 — 1,718 — Non-recurring legal expenses 91 86 280 4,634 Costs (income) incurred in transition of LoJack North America business to acquiror ( 79 ) 232 ( 319 ) 1,217 Impairment loss 75,106 — 75,106 — Other 1,107 769 3,032 938 Adjusted EBITDA $ 1,031 $ 4,698 $ 12,950 $ 11,320 |
Summary of Revenues by Geographic Area | Revenues by geographic area are as follows (in thousands): Three Months Ended Nine Months Ended November 30, November 30, 2023 2022 2023 2022 United States $ 29,201 $ 50,387 $ 101,187 $ 137,029 EMEA 14,224 14,919 45,073 39,733 LATAM 3,869 9,011 16,219 23,177 APAC 4,821 2,794 18,620 13,603 All other 1,510 1,778 5,131 2,901 $ 53,625 $ 78,889 $ 186,230 $ 216,443 |
DESCRIPTION OF BUSINESS, BASI_4
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||||
Dec. 15, 2023 USD ($) | Nov. 30, 2023 USD ($) $ / shares | Nov. 30, 2022 USD ($) | Nov. 30, 2023 USD ($) ReportingUnit $ / shares | Nov. 30, 2022 USD ($) | Feb. 28, 2023 USD ($) | |
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||
Revenue recognized | $ 4,400,000 | $ 20,500,000 | ||||
Unearned revenue | $ 36,600,000 | |||||
Contracted not recognized revenue | 186,000,000 | 186,000,000 | 234,500,000 | |||
Allowance for doubtful accounts | $ 2,800,000 | $ 2,800,000 | 1,800,000 | |||
Percentage of decline in stock price | (48.00%) | (93.00%) | ||||
Stock price per share | $ / shares | $ 0.32 | $ 0.32 | ||||
Number of reporting units | ReportingUnit | 3 | |||||
Goodwill | $ 20,583,000 | $ 20,583,000 | $ 94,214,000 | |||
Foreign transaction exchange gain (loss) | 100,000 | $ 500,000 | 600,000 | $ 100,000 | ||
Goodwill impairment charges related to reporting units | 74,400,000 | |||||
ASC 350 [Member] | ||||||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||
Impairment of long-lived assets held and used | 0 | |||||
Goodwill | 0 | 0 | ||||
Software and Subscription Services Segment [Member] | Tracking & Monitoring Reporting Unit [Member] | ||||||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated fair value of reporting unit | 67,300,000 | 67,300,000 | ||||
Estimated carrying value of reporting unit | 126,600,000 | 126,600,000 | ||||
Telematics Segment [Member] | Telematics Reporting Unit [Member] | ||||||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated fair value of reporting unit | 14,300,000 | 14,300,000 | ||||
Estimated carrying value of reporting unit | 33,000,000 | 33,000,000 | ||||
Subsequent Event [Member] | Term Loan [Member] | ||||||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||
Line of credit | $ 45,000,000 | |||||
Maturity date | Dec. 15, 2027 | |||||
Subsequent Event [Member] | Term Loan [Member] | Secured Overnight Financing Rate [Member] | ||||||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||
Variable interest rate | 6.75% | |||||
Prepaid Expenses and Other Current Assets [Member] | ||||||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||
Sales commissions | 1,800,000 | 1,800,000 | ||||
Other Assets [Member] | ||||||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||
Sales commissions | $ 2,300,000 | $ 2,300,000 | ||||
Minimum [Member] | ||||||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||
Subscription services estimated useful life | 2 years | |||||
Accounts receivable payment period | 30 days | |||||
Minimum [Member] | Telematics Products [Member] | ||||||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful life | 3 years | 3 years | ||||
Maximum [Member] | ||||||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||
Subscription services estimated useful life | 5 years | |||||
Accounts receivable payment period | 60 days | |||||
Accounts receivable payment extended period | 90 days | |||||
Maximum [Member] | Telematics Products [Member] | ||||||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful life | 5 years | 5 years |
DESCRIPTION OF BUSINESS, BASI_5
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Disaggregation of Revenue by Type of Goods and Services and by Timing of Revenue Recognition which Reflect the Immaterial Adjustments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | ||
Disaggregation Of Revenue [Line Items] | |||||
Revenues | $ 53,625 | $ 78,889 | $ 186,230 | $ 216,443 | |
Telematics Devices and Accessories [Member] | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenues | 31,217 | 53,331 | 114,866 | 138,420 | |
Rental Income and Other Services [Member] | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenues | 4,583 | 6,307 | 15,673 | 17,233 | |
Recurring Application Subscriptions [Member] | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenues | [1] | 17,825 | 19,251 | 55,691 | 60,790 |
Revenue Recognized At Point In Time [Member] | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenues | 33,090 | 57,337 | 122,850 | 149,511 | |
Revenue Recognized Over Time [Member] | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenues | $ 20,535 | $ 21,552 | $ 63,380 | $ 66,932 | |
[1] Recurring application subscriptions includes $ 0.0 million and $ 0.5 million during the three months ended November 30, 2023 and 2022, respectively, and $ 0.0 million and $ 1.9 million during the nine months ended November 30, 2023 and 2022, respectively, attributable to the auto vehicle finance business which has been completely wound down. |
DESCRIPTION OF BUSINESS, BASI_6
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Disaggregation of Revenue by Type of Goods and Services and by Timing of Revenue Recognition which Reflect the Immaterial Adjustments) (Parenthetical) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | ||
Disaggregation of Revenue [Line Items] | |||||
Revenues | $ 53,625 | $ 78,889 | $ 186,230 | $ 216,443 | |
Recurring Application Subscriptions [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | [1] | 17,825 | 19,251 | 55,691 | 60,790 |
Recurring Application Subscriptions [Member] | Auto Vehicle Finance Business [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | $ 0 | $ 500 | $ 0 | $ 1,900 | |
[1] Recurring application subscriptions includes $ 0.0 million and $ 0.5 million during the three months ended November 30, 2023 and 2022, respectively, and $ 0.0 million and $ 1.9 million during the nine months ended November 30, 2023 and 2022, respectively, attributable to the auto vehicle finance business which has been completely wound down. |
DESCRIPTION OF BUSINESS, BASI_7
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative 1) (Details) | Nov. 30, 2023 | Feb. 28, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-03-01 | ||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Revenue, remaining performance obligation expect to recognize in percentage | 49% | |
Revenue, remaining Performance obligation, expected timing of satisfaction, year | 2024 | |
Revenue, remaining Performance obligation, expected timing of satisfaction, period | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-12-01 | ||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Revenue, remaining performance obligation expect to recognize in percentage | 19% | |
Revenue, remaining Performance obligation, expected timing of satisfaction, year | 2024 | |
Revenue, remaining Performance obligation, expected timing of satisfaction, period | 3 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-03-01 | ||
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Revenue, remaining performance obligation expect to recognize in percentage | 46% | 27% |
Revenue, remaining Performance obligation, expected timing of satisfaction, year | 2025 | 2025 |
Revenue, remaining Performance obligation, expected timing of satisfaction, period | 1 year | 1 year |
CASH, CASH EQUIVALENTS AND IN_3
CASH, CASH EQUIVALENTS AND INVESTMENTS (Details) - USD ($) | Nov. 30, 2023 | Feb. 28, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cost | $ 42,997,000 | $ 42,269,000 | |
Unrealized Gains (Losses) | 207,000 | (3,000) | |
Fair Value | 43,204,000 | 42,266,000 | |
Cash and Cash Equivalents [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 38,169,000 | 41,928,000 | |
Other Assets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 5,035,000 | 338,000 | |
Cash [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cost | 38,169,000 | 41,903,000 | |
Unrealized Gains (Losses) | 0 | ||
Fair Value | 38,169,000 | 41,903,000 | |
Cash [Member] | Cash and Cash Equivalents [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 38,169,000 | 41,903,000 | |
Cash [Member] | Other Assets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | |||
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cost | 0 | 25,000 | |
Unrealized Gains (Losses) | 0 | ||
Fair Value | 26,000 | 25,000 | |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 26,000 | 25,000 | |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | Other Assets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | |||
Mutual Fund [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cost | [1] | 4,828,000 | 341,000 |
Unrealized Gains (Losses) | [1] | 207,000 | (3,000) |
Fair Value | [1] | 5,035,000 | 338,000 |
Mutual Fund [Member] | Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | |||
Mutual Fund [Member] | Fair Value, Inputs, Level 1 [Member] | Other Assets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | [1] | $ 5,035,000 | $ 338,000 |
[1] Amounts represent various equities, bond and money market mutual funds that are held in an irrevocable “Rabbi Trust” for payment obligations to non-qualified deferred compensation plan participants. In addition to the mutual funds above, our “Rabbi Trust” also included Corporate-Owned Life Insurance (COLI) starting in fiscal 2020. During the three months ended November 30, 2023 the COLI was closed and the value of the policy was returned to mutual funds. As of November 30, 2023 , there was no cash surrender value of the COLI. |
CASH, CASH EQUIVALENTS AND IN_4
CASH, CASH EQUIVALENTS AND INVESTMENTS (Parenthetical) (Details) | Nov. 30, 2023 USD ($) |
Cash and Cash Equivalents [Abstract] | |
Cash surrender value of Corporate-Owned Life Insurance (COLI) | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 7,684 | $ 11,920 |
Finished goods | 26,375 | 11,982 |
Inventories | $ 34,059 | $ 23,902 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Other Intangible Assets) (Details) $ in Thousands | 9 Months Ended | |
Nov. 30, 2023 USD ($) | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross, Beginning balance | $ 93,143 | [1] |
Additions & Adjustments, net | (441) | [1],[2] |
Gross, Ending balance | 93,584 | [1] |
Accumulated Amortization, Beginning balance | 66,510 | [1] |
Expense | 3,466 | [1] |
Accumulated Amortization, Ending balance | 69,976 | [1] |
Net beginning | 26,633 | |
Net ending | 23,608 | |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross, Beginning balance | 26,895 | [1] |
Additions & Adjustments, net | (169) | [1],[2] |
Gross, Ending balance | 27,064 | [1] |
Accumulated Amortization, Beginning balance | 26,735 | [1] |
Expense | 329 | [1] |
Accumulated Amortization, Ending balance | 27,064 | [1] |
Net beginning | $ 160 | |
Developed Technology Rights [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 4 years | |
Developed Technology Rights [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 6 years | |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 10 years | |
Gross, Beginning balance | $ 30,046 | [1] |
Additions & Adjustments, net | (60) | [1],[2] |
Gross, Ending balance | 30,106 | [1] |
Accumulated Amortization, Beginning balance | 22,704 | [1] |
Expense | 1,437 | [1] |
Accumulated Amortization, Ending balance | 24,141 | [1] |
Net beginning | 7,342 | |
Net ending | 5,965 | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross, Beginning balance | 35,613 | [1] |
Additions & Adjustments, net | (212) | [1],[2] |
Gross, Ending balance | 35,825 | [1] |
Accumulated Amortization, Beginning balance | 16,813 | [1] |
Expense | 1,700 | [1] |
Accumulated Amortization, Ending balance | 18,513 | [1] |
Net beginning | 18,800 | |
Net ending | $ 17,312 | |
Customer Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 10 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 15 years | |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 5 years | |
Gross, Beginning balance | $ 589 | [1] |
Gross, Ending balance | 589 | [1] |
Accumulated Amortization, Beginning balance | 258 | [1] |
Accumulated Amortization, Ending balance | 258 | [1] |
Net beginning | 331 | |
Net ending | $ 331 | |
[1] This table excludes the gross value of fully amortized intangible assets totaling $ 42.8 million and $ 38.9 million at November 30, 2023 and February 28, 2023 , respectively. Amounts also include any net changes in intangible asset balances for the periods presented that resulted from foreign currency translations. |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Other Intangible Assets) (Parenthetical) (Details) - USD ($) $ in Millions | Nov. 30, 2023 | Feb. 28, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross value of fully amortized intangible assets | $ 42.8 | $ 38.9 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense of intangible assets | $ 1,116 | $ 1,323 | $ 3,466 | $ 3,995 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Future Amortization Expense) (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 |
Fiscal Year | ||
2024 (remainder) | $ 1,124 | |
2025 | 4,493 | |
2026 | 4,199 | |
2027 | 2,579 | |
2028 | 2,332 | |
Thereafter | 8,881 | |
Net | $ 23,608 | $ 26,633 |
GOODWILL AND OTHER INTANGIBLE_7
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Goodwill) (Details) $ in Thousands | 9 Months Ended |
Nov. 30, 2023 USD ($) | |
Goodwill [Line Items] | |
Balance as of February 28, 2023 | $ 94,214 |
Impairment loss | (74,436) |
Effect of exchange rate change on goodwill | 805 |
Balance as of May 31, 2023 | 20,583 |
Software & Subscription Services [Member] | |
Goodwill [Line Items] | |
Balance as of February 28, 2023 | 78,025 |
Impairment loss | (58,247) |
Effect of exchange rate change on goodwill | 805 |
Balance as of May 31, 2023 | 20,583 |
Telematics Products [Member] | |
Goodwill [Line Items] | |
Balance as of February 28, 2023 | 16,189 |
Impairment loss | (16,189) |
Balance as of May 31, 2023 | $ 0 |
OTHER ASSETS (Schedule of Other
OTHER ASSETS (Schedule of Other Assets) (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 |
Other Assets, Noncurrent Disclosure [Abstract] | ||
Deferred product cost | $ 790 | $ 842 |
Deferred compensation plan assets | 5,035 | 6,221 |
Lease receivables, non-current | 18,439 | 22,006 |
Prepaid commissions | 2,288 | 4,057 |
Other | 2,718 | 2,952 |
Total | $ 29,270 | $ 36,078 |
FINANCING ARRANGEMENTS (Summary
FINANCING ARRANGEMENTS (Summary of Debt) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 30, 2023 | Feb. 28, 2023 | |
Debt Instrument [Line Items] | ||
Total term debt | $ 230,215 | $ 231,149 |
Unamortized discount and issuance costs | (2,067) | (3,028) |
Less: Current portion of long-term term debt | (705) | |
Long-term debt, net of current portion | $ 228,148 | 227,416 |
2025 Convertible Notes, 2.00% Fixed Rate [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Date | Aug. 01, 2025 | |
Effective Interest Rate | 2.49% | |
Total term debt | $ 230,000 | 230,000 |
Due to Factors Under Revenue Assignment [Member] | ||
Debt Instrument [Line Items] | ||
Effective Interest Rate | 4.70% | |
Maturity Date | 2020 2021 2022 2023 2024 | |
Total term debt | $ 215 | $ 1,149 |
FINANCING ARRANGEMENTS (Summa_2
FINANCING ARRANGEMENTS (Summary of Debt) (Parenthetical) (Details) | Nov. 30, 2023 | Feb. 28, 2023 |
2025 Convertible Notes, 2.00% Fixed Rate [Member] | ||
Debt Instrument [Line Items] | ||
Fixed interest rate | 2% | 2% |
FINANCING ARRANGEMENTS (Details
FINANCING ARRANGEMENTS (Details) | 1 Months Ended | 9 Months Ended | |||
Dec. 15, 2023 USD ($) | Jul. 31, 2018 USD ($) $ / shares shares | Nov. 30, 2023 USD ($) | Feb. 28, 2023 USD ($) | Jul. 13, 2022 USD ($) | |
Term Loan [Member] | Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity date | Dec. 15, 2027 | ||||
Borrowings outstanding | $ 45,000,000 | ||||
Secured Overnight Financing Rate [Member] | Term Loan [Member] | Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Variable interest rate | 6.75% | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 50,000,000 | ||||
Expire date | Jul. 13, 2025 | ||||
Line of credit facility, borrowing capacity, description | On July 13, 2022, we replaced our revolving credit facility with JP Morgan Chase Bank, N.A. and we entered into a new revolving credit facility with PNC Bank, N.A., that provides for an asset-based senior secured revolving credit facility for borrowings up to an aggregate of $50.0 million, subject to certain conditions, including borrowing base provisions that limit borrowing capacity to 80% of eligible accounts receivable and 50% of eligible inventory. | ||||
Borrowings outstanding | $ 0 | ||||
Letters of credit outstanding | 4,800,000 | ||||
Line of credit facility remaining borrowing availability | 28,700,000 | ||||
Unused availability of credit facility amount | 40,000,000 | ||||
Revolving Credit Facility | PNC Bank [Member] | |||||
Debt Instrument [Line Items] | |||||
Unused availability of credit facility amount | $ 25,000,000 | ||||
Revolving Credit Facility | Accounts Receivable [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility borrowing capacity eligible percentage | 80% | ||||
Revolving Credit Facility | Inventory [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility borrowing capacity eligible percentage | 50% | ||||
Revolving Credit Facility | Bloomberg Short-Term Bank Yield Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Variable interest rate | 2.50% | ||||
Revolving Credit Facility | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Variable interest rate | 1.50% | ||||
Revolving Credit Facility | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, Unused fee percentage | 0.50% | ||||
Line of credit, fixed charge coverage rate | 1.10% | ||||
Revolving Credit Facility | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, Unused fee percentage | 0.75% | ||||
Line of credit, fixed charge coverage rate | 1% | ||||
2025 Convertible Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Fair value of convertible notes | $ 195,000,000 | $ 201,000,000 | |||
Debt instrument, face amount | $ 230,000,000 | ||||
Maturity date | Aug. 01, 2025 | ||||
Fixed interest rate | 2% | ||||
Debt instrument, redemption, description | We may redeem the notes at our option at any time on or after August 6, 2022 at a cash redemption price equal to the principal amount plus accrued interest, but only if the last reported sale price per share of our stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice. | ||||
Initial conversion price | $ / shares | $ 30.7450 | ||||
Number of common stock with hedge transactions | shares | 7,480,000 | ||||
Conversion rate of shares of common stock | 41.3875 | ||||
Payments for notes hedges | $ 21,200,000 | ||||
Purchase of note hedges, net of tax | $ 15,900,000 |
RESTRUCTURING ACTIVITIES (Narra
RESTRUCTURING ACTIVITIES (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Nov. 30, 2023 USD ($) | Nov. 30, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 1,718 | $ 1,718 |
Severance costs | 1,400 | |
Write-off of leasehold improvements | 300 | |
Accrued Payroll and Employee Benefits [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Liability related to severance | $ 1,100 | $ 1,100 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 38 | $ 268 | $ 525 | $ 643 |
Decrease in uncertain tax benefits | 300 | |||
Decrease in valuation allowances | $ 200 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (85,004) | $ (4,733) | $ (93,261) | $ (24,400) |
Basic weighted average number of common shares outstanding | 37,427 | 36,357 | 37,023 | 36,027 |
Diluted weighted average number of common shares outstanding | 37,427 | 36,357 | 37,023 | 36,027 |
Basic net income (loss) per common share: | ||||
Net loss | $ (2.27) | $ (0.13) | $ (2.52) | $ (0.68) |
Diluted net income (loss) per common share: | ||||
Net loss | $ (2.27) | $ (0.13) | $ (2.52) | $ (0.68) |
STOCKHOLDERS' EQUITY (Schedule
STOCKHOLDERS' EQUITY (Schedule of Stock-based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 1,567 | $ 2,030 | $ 5,469 | $ 8,186 |
Cost of Revenues [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 26 | 3 | 91 | 88 |
Research and Development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 257 | 528 | 941 | 1,964 |
Selling and Marketing [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 460 | 737 | 1,607 | 2,046 |
General and Administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 824 | $ 762 | $ 2,830 | $ 4,088 |
STOCKHOLDERS' EQUITY (Summary o
STOCKHOLDERS' EQUITY (Summary of Stock Option Activity) (Details) - $ / shares shares in Thousands | 9 Months Ended | |
Feb. 28, 2023 | Nov. 30, 2023 | |
Number of Options | ||
Outstanding, beginning balance | 506 | |
Forfeited or expired | (506) | |
Outstanding, ending balance | 506 | |
Weighted Average Exercise Price | ||
Outstanding, beginning balance | $ 16.02 | |
Forfeited or expired | $ (16.02) | |
Outstanding, ending balance | $ 16.02 | |
Weighted average remaining contractual life, Outstanding | 4 years |
STOCKHOLDERS' EQUITY (Summary_2
STOCKHOLDERS' EQUITY (Summary of Restricted Stock Shares and RSUs Activity) (Details) shares in Thousands | 9 Months Ended |
Nov. 30, 2023 $ / shares shares | |
Number of Restricted Shares, PSUs and RSUs | |
Outstanding, beginning balance | 3,506 |
Granted | 3,109 |
Vested | (1,149) |
Forfeited | (1,284) |
Outstanding, ending balance | 4,182 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance | $ / shares | $ 6.75 |
Granted | $ / shares | 0.83 |
Vested | $ / shares | 7.16 |
Forfeited | $ / shares | 4.5 |
Outstanding, ending balance | $ / shares | $ 2.41 |
Vested, Shares Retained to Cover Statutory Minimum Withholding Taxes | 155 |
STOCKHOLDERS' EQUITY (Narrative
STOCKHOLDERS' EQUITY (Narrative) (Details) $ in Millions | 9 Months Ended |
Nov. 30, 2023 USD ($) | |
Equity [Abstract] | |
Unrecognized share-based compensation cost | $ 6.4 |
Unrecognized compensation cost, recognition period | 1 year 9 months 18 days |
CONCENTRATION OF RISK (Narrativ
CONCENTRATION OF RISK (Narrative) (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | Feb. 28, 2023 | |
Customer Concentration Risk [Member] | Major Customer One [Member] | Revenues [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 32% | 17% | 28% | 16% | |
Customer Concentration Risk [Member] | Major Customer One [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 20% | 14% | |||
Supplier Concentration Risk [Member] | Inventory Purchases [Member] | Minimum [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 10% | ||||
Supplier Concentration Risk [Member] | Accounts Payable [Member] | Minimum [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 10% |
CONCENTRATION OF RISK - Schedul
CONCENTRATION OF RISK - Schedule of Significant Suppliers Concentration Risk Percentage (Details) - Supplier Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | Feb. 28, 2023 | |
Inventory Purchases [Member] | Supplier A [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 21% | 15% | 19% | 12% | |
Inventory Purchases [Member] | Supplier B [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 9% | 23% | 13% | 16% | |
Inventory Purchases [Member] | Supplier C [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 24% | 14% | 21% | 18% | |
Inventory Purchases [Member] | Supplier D [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 7% | 13% | 7% | 11% | |
Accounts Payable [Member] | Supplier A [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 17% | 10% | |||
Accounts Payable [Member] | Supplier B [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 8% | 22% | |||
Accounts Payable [Member] | Supplier C [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 22% | 12% | |||
Accounts Payable [Member] | Supplier D [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 13% | 9% |
OTHER FINANCIAL INFORMATION (Sc
OTHER FINANCIAL INFORMATION (Schedule of Other Current Liabilities) (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 | |
Other Financial Information Schedule Of Other Current Liabilities Details [Abstract] | |||
Operating lease liabilities | $ 4,758 | $ 4,884 | |
Warranty reserves | 1,352 | 1,868 | |
Customer deposits | 3,962 | 2,492 | |
Other | [1] | 6,496 | 6,621 |
Total other current liabilities | $ 16,568 | $ 15,865 | |
[1] (1) Amount represents accruals for various operating expenses such as professional fees, vendor incentives and other estimates that are expected to be paid within the next 12 months. |
OTHER FINANCIAL INFORMATION (_2
OTHER FINANCIAL INFORMATION (Schedule of Other Non-Current Liabilities) (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 |
Other Financial Information [Abstract] | ||
Deferred revenue | $ 11,106 | $ 11,104 |
Deferred compensation plan liability | 5,167 | 5,727 |
Deferred tax liability | 3 | 242 |
Other | 2,246 | 2,510 |
Total other non-current liabilities | $ 18,522 | $ 19,583 |
OTHER FINANCIAL INFORMATION (_3
OTHER FINANCIAL INFORMATION (Schedule of Interest Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Condensed Income Statements, Captions [Line Items] | ||||
Amortization of discount and issue costs | $ 825 | $ 877 | ||
Other interest expense | $ (11) | $ 234 | 373 | 376 |
Total interest expense | 1,410 | 1,648 | 4,662 | 4,645 |
2025 Convertible Notes [Member] | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Stated interest | 1,150 | 1,150 | 3,476 | 3,476 |
Amortization of discount and issue costs | 271 | 264 | 813 | 793 |
Interest expense on convertible notes | $ 1,421 | $ 1,414 | $ 4,289 | $ 4,269 |
OTHER FINANCIAL INFORMATION (_4
OTHER FINANCIAL INFORMATION (Schedule of Interest Expense) (Parenthetical) (Details) | Nov. 30, 2023 | Nov. 30, 2022 |
2025 Convertible Notes [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Interest rate (as a percent) | 2% | 2% |
OTHER FINANCIAL INFORMATION (_5
OTHER FINANCIAL INFORMATION (Schedule of Cash Payments for Interest and Income Taxes) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 30, 2023 | Nov. 30, 2022 | |
Supplemental Cash Flow Information [Abstract] | ||
Interest expense paid | $ 2,633 | $ 2,505 |
Income tax paid, net of refunds | (1) | $ 96 |
Accrued liability for capital expenditures | $ 96 |
SEGMENT INFORMATION AND GEOGR_3
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Narrative) (Details) | 9 Months Ended |
Nov. 30, 2023 Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SEGMENT INFORMATION AND GEOGR_4
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Schedule of Segment Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 53,625 | $ 78,889 | $ 186,230 | $ 216,443 |
Gross profit | $ 17,574 | $ 26,614 | $ 66,979 | $ 81,273 |
Gross margin | 33% | 34% | 36% | 38% |
Adjusted EBITDA | $ 1,031 | $ 4,698 | $ 12,950 | $ 11,320 |
Operating Segments [Member] | Software & Subscription Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 34,456 | 49,264 | 119,766 | 133,332 |
Gross profit | $ 13,778 | $ 20,880 | $ 51,517 | $ 59,803 |
Gross margin | 40% | 42% | 43% | 45% |
Adjusted EBITDA | $ 3,139 | $ 8,110 | $ 17,068 | $ 18,688 |
Operating Segments [Member] | Telematics Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 19,169 | 29,625 | 66,464 | 83,111 |
Gross profit | $ 3,796 | $ 5,734 | $ 15,462 | $ 21,470 |
Gross margin | 20% | 19% | 23% | 26% |
Adjusted EBITDA | $ (1,271) | $ (2,671) | $ (1,423) | $ (4,662) |
Corporate Expenses [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | $ (837) | $ (741) | $ (2,695) | $ (2,706) |
SEGMENT INFORMATION AND GEOGR_5
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Summary of Adjusted EBITDA) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Segment Information Summary Of Adjustments Results Of Ebitda Details [Abstract] | ||||
Net loss | $ (85,004) | $ (4,733) | $ (93,261) | $ (24,400) |
Investment income (loss) | 124 | (818) | (360) | (646) |
Interest expense | 1,410 | 1,648 | 4,662 | 4,645 |
Income tax provision | 38 | 268 | 525 | 643 |
Depreciation | 3,837 | 3,893 | 12,632 | 12,108 |
Amortization expense of intangible assets | 1,116 | 1,323 | 3,466 | 3,995 |
Stock-based compensation | 1,567 | 2,030 | 5,469 | 8,186 |
Restructuring charges | 1,718 | 1,718 | ||
Non-recurring legal expenses | 91 | 86 | 280 | 4,634 |
Costs (income) incurred in transition of LoJack North America business to acquiror | (79) | 232 | (319) | 1,217 |
Impairment loss | 75,106 | 75,106 | ||
Other | 1,107 | 769 | 3,032 | 938 |
Adjusted EBITDA | $ 1,031 | $ 4,698 | $ 12,950 | $ 11,320 |
SEGMENT INFORMATION AND GEOGR_6
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Summary of Revenues by Geographic Area) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 53,625 | $ 78,889 | $ 186,230 | $ 216,443 |
United States [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 29,201 | 50,387 | 101,187 | 137,029 |
EMEA [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 14,224 | 14,919 | 45,073 | 39,733 |
LATAM [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3,869 | 9,011 | 16,219 | 23,177 |
APAC [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 4,821 | 2,794 | 18,620 | 13,603 |
All other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 1,510 | $ 1,778 | $ 5,131 | $ 2,901 |
LEGAL PROCEEDINGS (Legal Procee
LEGAL PROCEEDINGS (Legal Proceedings) (Details) $ in Millions | Jun. 01, 2022 USD ($) | Dec. 17, 2020 Patent Legalaction |
Commitments and Contingencies Disclosure [Abstract] | ||
Litigation settlement payment | $ | $ 4.9 | |
Number of legal actions filed | Legalaction | 4 | |
Number of patents, not infringed | Patent | 4 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - Subsequent Event [Member] - Lynrock Lake Master Fund LP [Member] $ in Millions | Dec. 15, 2023 USD ($) |
Subsequent Event [Line Items] | |
Line of credit | $ 45 |
Maturity date | Dec. 15, 2027 |
Secured Overnight Financing Rate [Member] | |
Subsequent Event [Line Items] | |
Variable interest rate | 6.75% |