Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Nov. 30, 2022 | Jan. 06, 2023 | |
Document Information [Line Items] | ||
Entity Registrant Name | VOXX International Corporation | |
Title of 12(b) Security | Class A Common Stock $.01 par value | |
Entity Trading Symbol | VOXX | |
Security Exchange Name | NASDAQ | |
Entity Central Index Key | 0000807707 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --02-28 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Nov. 30, 2022 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Address, State or Province | FL | |
Entity File Number | 0-28839 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-1964841 | |
Entity Address, Address Line One | 2351 J Lawson Blvd | |
Entity Address, City or Town | Orlando | |
Entity Address, Postal Zip Code | 32824 | |
City Area Code | 800 | |
Local Phone Number | 645-7750 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Class A Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 21,360,266 | |
Class B Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 2,260,954 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Nov. 30, 2022 | Feb. 28, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 8,477 | $ 27,788 |
Accounts receivable, net | 91,882 | 105,625 |
Inventory | 192,996 | 174,922 |
Receivables from vendors | 138 | 363 |
Prepaid expenses and other current assets | 20,397 | 21,340 |
Income tax receivable | 7,943 | 734 |
Total current assets | 321,833 | 330,772 |
Investment securities | 1,167 | 1,231 |
Equity investment | 22,444 | 21,348 |
Property, plant and equipment, net | 47,903 | 49,794 |
Operating lease, right of use asset | 3,905 | 4,464 |
Goodwill | 72,375 | 74,320 |
Intangible assets, net | 92,993 | 101,450 |
Deferred income tax assets | 38 | 40 |
Other assets | 3,748 | 3,245 |
Total assets | 566,406 | 586,664 |
Current liabilities: | ||
Accounts payable | 48,734 | 76,665 |
Accrued expenses and other current liabilities | 44,486 | 54,659 |
Income taxes payable | 2,080 | 2,714 |
Accrued sales incentives | 25,466 | 23,755 |
Interim arbitration award payable (see Note 23) | 42,403 | 39,444 |
Contract liabilities, current | 3,796 | 4,373 |
Current portion of long-term debt | 500 | 2,406 |
Total current liabilities | 167,465 | 204,016 |
Long-term debt, net of debt issuance costs | 45,860 | 9,786 |
Finance lease liabilities, less current portion | 94 | 78 |
Operating lease liabilities, less current portion | 2,735 | 3,298 |
Deferred compensation | 1,167 | 1,231 |
Contingent consideration, less current portion (see Note 2) | 5,209 | 5,750 |
Deferred income tax liabilities | 5,228 | 5,300 |
Other tax liabilities | 929 | 1,083 |
Prepaid ownership interest in EyeLock LLC due to GalvanEyes LLC (see Note 20) | 6,068 | 2,451 |
Other long-term liabilities | 3,144 | 3,508 |
Total liabilities | 237,899 | 236,501 |
Commitments and contingencies (see Note 23) | ||
Redeemable equity (see Note 8) | 3,996 | 3,550 |
Redeemable non-controlling interest (see Note 2) | (932) | 511 |
Stockholders' equity: | ||
Preferred stock: | ||
Paid-in capital | 296,456 | 300,453 |
Retained earnings | 117,251 | 126,573 |
Accumulated other comprehensive loss | (19,851) | (17,503) |
Less: Treasury stock, at cost, 2,862,218 shares of Class A Common Stock at both November 30, 2022 and February 28, 2022 | (27,913) | (25,138) |
Less: Redeemable equity | (3,996) | (3,550) |
Total VOXX International Corporation stockholders' equity | 362,215 | 381,102 |
Non-controlling interest | (36,772) | (35,000) |
Total stockholders' equity | 325,443 | 346,102 |
Total liabilities, redeemable equity, redeemable non-controlling interest, and stockholders' equity | 566,406 | 586,664 |
Common Class A [Member] | ||
Stockholders' equity: | ||
Common stock | 246 | 245 |
Common Class B [Member] | ||
Stockholders' equity: | ||
Common stock | $ 22 | $ 22 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Nov. 30, 2022 | Feb. 28, 2022 |
Preferred stock, shares issued | 0 | 0 |
Treasury stock, shares | 3,140,179 | 2,862,218 |
Common Class A [Member] | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 24,538,184 | 24,476,847 |
Common stock, shares outstanding | 21,398,005 | 21,614,629 |
Treasury stock, shares | 3,140,179 | 2,862,218 |
Common Class B [Member] | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 2,260,954 | 2,260,954 |
Common stock, shares outstanding | 2,260,954 | 2,260,954 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Income Statement [Abstract] | ||||
Net sales | $ 143,055 | $ 191,871 | $ 397,492 | $ 472,040 |
Cost of sales | 105,918 | 140,167 | 297,859 | 346,455 |
Gross profit | 37,137 | 51,704 | 99,633 | 125,585 |
Operating expenses: | ||||
Selling | 11,413 | 13,864 | 35,563 | 37,169 |
General and administrative | 16,223 | 20,049 | 54,435 | 56,609 |
Engineering and technical support | 7,171 | 9,706 | 23,844 | 23,824 |
Acquisition costs | 287 | 136 | 3,279 | |
Total operating expenses | 34,807 | 43,906 | 113,978 | 120,881 |
Operating income (loss) | 2,330 | 7,798 | (14,345) | 4,704 |
Other (expense) income: | ||||
Interest and bank charges | (1,460) | (730) | (3,101) | (1,840) |
Equity in income of equity investee | 2,022 | 2,206 | 5,373 | 6,964 |
Interim arbitration award (see Note 23) | (986) | (39,444) | (2,958) | (39,444) |
Other, net | 460 | (143) | (3,169) | 675 |
Total other income (expense), net | 36 | (38,111) | (3,855) | (33,645) |
Income (loss) before income taxes | 2,366 | (30,313) | (18,200) | (28,941) |
Income tax benefit | (3,988) | (641) | (5,788) | (374) |
Net income (loss) | 6,354 | (29,672) | (12,412) | (28,567) |
Less: net loss attributable to non-controlling interest | (1,067) | (1,551) | (3,090) | (3,473) |
Net income (loss) attributable to VOXX International Corporation and Subsidiaries | 7,421 | (28,121) | (9,322) | (25,094) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 957 | (1,835) | (2,665) | (2,797) |
Derivatives designated for hedging | 78 | 184 | 264 | 466 |
Pension plan adjustments | (19) | 36 | 53 | 59 |
Other comprehensive income (loss), net of tax | 1,016 | (1,615) | (2,348) | (2,272) |
Comprehensive income (loss) attributable to VOXX International Corporation and Subsidiaries | $ 8,437 | $ (29,736) | $ (11,670) | $ (27,366) |
Income (loss) per share - basic: Attributable to VOXX International Corporation and Subsidiaries | $ 0.30 | $ (1.16) | $ (0.38) | $ (1.03) |
Income (loss) per share - diluted: Attributable to VOXX International Corporation and Subsidiaries | $ 0.30 | $ (1.16) | $ (0.38) | $ (1.03) |
Weighted-average common shares outstanding (basic) | 24,389,375 | 24,289,909 | 24,408,541 | 24,279,084 |
Weighted-average common shares outstanding (diluted) | 24,621,359 | 24,289,909 | 24,408,541 | 24,279,084 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Non-controlling Interests [Member] | Treasury Stock [Member] | Redeemable Equity [Member] Preferred Stock [Member] |
Stockholders equity, beginning of period at Feb. 28, 2021 | $ 376,069 | $ 267 | $ 300,402 | $ 148,906 | $ (14,977) | $ (31,351) | $ (23,918) | $ (3,260) |
Net income (loss) | 1,797 | 2,716 | (919) | |||||
Other comprehensive income (loss), net of tax | 492 | 492 | ||||||
Net settlement of shares of Class A common stock upon vesting of stock awards, net of withholding taxes | (856) | (856) | ||||||
Stock-based compensation expense | 270 | 236 | 34 | |||||
Stockholders equity, end of period at May. 31, 2021 | 377,772 | 267 | 299,782 | 151,622 | (14,485) | (32,270) | (23,918) | (3,226) |
Stockholders equity, beginning of period at Feb. 28, 2021 | 376,069 | 267 | 300,402 | 148,906 | (14,977) | (31,351) | (23,918) | (3,260) |
Other comprehensive income (loss), net of tax | (2,272) | |||||||
Reclassification of stockholders' equity to redeemable equity | 0 | |||||||
Stockholders equity, end of period at Nov. 30, 2021 | 344,329 | 267 | 300,240 | 123,812 | (17,249) | (34,155) | (25,138) | (3,448) |
Stockholders equity, beginning of period at May. 31, 2021 | 377,772 | 267 | 299,782 | 151,622 | (14,485) | (32,270) | (23,918) | (3,226) |
Net income (loss) | (692) | 311 | (1,003) | |||||
Other comprehensive income (loss), net of tax | (1,149) | (1,149) | ||||||
Repurchase of shares of Class A Common Stock | (1,220) | (1,220) | ||||||
Stock-based compensation expense | 118 | 237 | (119) | |||||
Stockholders equity, end of period at Aug. 31, 2021 | 374,829 | 267 | 300,019 | 151,933 | (15,634) | (33,273) | (25,138) | (3,345) |
Net income (loss) | (29,003) | (28,121) | (882) | |||||
Other comprehensive income (loss), net of tax | (1,615) | (1,615) | ||||||
Stock-based compensation expense | 118 | 221 | (103) | |||||
Stockholders equity, end of period at Nov. 30, 2021 | 344,329 | 267 | 300,240 | 123,812 | (17,249) | (34,155) | (25,138) | (3,448) |
Stockholders equity, beginning of period at Feb. 28, 2022 | 346,102 | 267 | 300,453 | 126,573 | (17,503) | (35,000) | (25,138) | (3,550) |
Net income (loss) | (7,234) | (6,527) | (707) | |||||
Other comprehensive income (loss), net of tax | (1,375) | (1,375) | ||||||
Cash settlement of market stock units upon vesting of 80% of award | (4,000) | (4,000) | ||||||
Net settlement of shares of Class A common stock upon vesting of stock awards, net of withholding taxes | (403) | 1 | (404) | |||||
Reclassification of stockholders' equity to redeemable equity | (33) | (33) | ||||||
Stock-based compensation expense | 259 | 126 | 133 | |||||
Stockholders equity, end of period at May. 31, 2022 | 333,316 | 268 | 296,175 | 120,046 | (18,878) | (35,707) | (25,138) | (3,450) |
Stockholders equity, beginning of period at Feb. 28, 2022 | 346,102 | 267 | 300,453 | 126,573 | (17,503) | (35,000) | (25,138) | (3,550) |
Other comprehensive income (loss), net of tax | (2,348) | (2,348) | ||||||
Repurchase of shares of Class A Common Stock | (2,775) | |||||||
Reclassification of stockholders' equity to redeemable equity | (531) | |||||||
Stockholders equity, end of period at Nov. 30, 2022 | 325,443 | 268 | 296,456 | 117,251 | (19,851) | (36,772) | (27,913) | (3,996) |
Stockholders equity, beginning of period at May. 31, 2022 | 333,316 | 268 | 296,175 | 120,046 | (18,878) | (35,707) | (25,138) | (3,450) |
Net income (loss) | (10,799) | (10,216) | (583) | |||||
Other comprehensive income (loss), net of tax | (1,989) | (1,989) | ||||||
Stock-based compensation expense | (197) | 136 | (333) | |||||
Stockholders equity, end of period at Aug. 31, 2022 | 320,331 | 268 | 296,311 | 109,830 | (20,867) | (36,290) | (25,138) | (3,783) |
Net income (loss) | 6,939 | 7,421 | (482) | |||||
Other comprehensive income (loss), net of tax | 1,016 | 1,016 | ||||||
Repurchase of shares of Class A Common Stock | (2,775) | (2,775) | ||||||
Stock-based compensation expense | (68) | 145 | (213) | |||||
Stockholders equity, end of period at Nov. 30, 2022 | $ 325,443 | $ 268 | $ 296,456 | $ 117,251 | $ (19,851) | $ (36,772) | $ (27,913) | $ (3,996) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) (Unaudited) - shares | 3 Months Ended | |||
Nov. 30, 2022 | May 31, 2022 | Aug. 31, 2021 | May 31, 2021 | |
Percentage of cash settlement of market stock units upon vesting of award | 80% | |||
Repurchase of shares of common stock | 277,961 | |||
Common Stock [Member] | ||||
Repurchase of shares of common stock | 277,961 | |||
Common Class A [Member] | ||||
Shares issued upon vesting of stock awards | 61,337 | 60,693 | ||
Repurchase of shares of common stock | 113,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (12,412) | $ (28,567) |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Depreciation and amortization | 9,924 | 8,978 |
Amortization of debt discount | 190 | 208 |
Bad debt (recovery) expense | (125) | 201 |
Reduction in the carrying amount of the right of use asset | 1,132 | 1,007 |
Gain (loss) on forward contracts | (60) | 232 |
Equity in income of equity investees | (5,373) | (6,964) |
Distribution of income from equity investees | 4,277 | 7,603 |
Deferred income tax expense (benefit) | 1 | (578) |
Non-cash compensation adjustment | (63) | (337) |
Stock based compensation expense | 407 | 694 |
Loss on disposal of property, plant, and equipment | 11 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 11,851 | (27,372) |
Inventory | (20,609) | (36,344) |
Receivables from vendors | 222 | (122) |
Prepaid expenses and other | 312 | (2,486) |
Investment securities-trading | 64 | 337 |
Accounts payable, accrued expenses, accrued sales incentives, contract liabilities, and other liabilities | (30,213) | 73,903 |
Income taxes payable | (7,837) | (401) |
Net cash used in operating activities | (48,301) | (10,008) |
Cash flows from investing activities: | ||
Purchases of property, plant, and equipment | (2,933) | (3,046) |
Purchase of acquired business | 0 | (30,406) |
Proceeds from sale of property, plant, and equipment | 1 | 0 |
Net cash used in investing activities | (2,932) | (33,452) |
Cash flows from financing activities: | ||
Principal payments on finance lease obligation | (217) | (323) |
Repayment of bank obligations | (125,987) | (375) |
Borrowings on bank obligations | 160,853 | 1,656 |
Deferred financing costs | 0 | (667) |
Settlement of market stock unit awards | (4,000) | 0 |
Withholding taxes paid on net issuance of stock award | (404) | (857) |
Purchase of treasury stock | (2,775) | (1,220) |
Proceeds from the issuance of subsidiary shares to non-controlling interest | 0 | 2,069 |
Proceeds from the issuance of long-term debt to non-controlling interest | 0 | 4,877 |
Net cash provided by financing activities | 27,470 | 5,160 |
Effect of exchange rate changes on cash | 4,452 | 58 |
Net decrease in cash and cash equivalents | (19,311) | (38,242) |
Cash and cash equivalents at beginning of period | 27,788 | 59,404 |
Cash and cash equivalents at end of period | $ 8,477 | $ 21,162 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Nov. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | (1) Basis of Presentation The accompanying unaudited interim consolidated financial statements of VOXX International Corporation and Subsidiaries ("Voxx" or the "Company") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission as defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 270 for interim financial information, and in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and include all adjustments (consisting of normal recurring adjustments), which, in the opinion of management, are necessary to present fairly the consolidated financial position, results of operations, changes in stockholders’ equity, and cash flows for all periods presented. The results of operations are not necessarily indicative of the results to be expected for the full fiscal year or any interim period. These unaudited consolidated financial statements do not include all disclosures associated with audited consolidated financial statements prepared in accordance with GAAP. Accordingly, these statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto contained in the Company's Form 10-K for the fiscal year ended February 28, 2022. Certain amounts in the prior year have been reclassified to conform to the current year presentation. We operate in three reportable segments: Automotive Electronics, Consumer Electronics, and Biometrics. See Note 21 for the Company's segment reporting disclosures. |
Acquisitions
Acquisitions | 9 Months Ended |
Nov. 30, 2022 | |
Acquisitions And Dispositions [Abstract] | |
Acquisitions | (2) Acquisitions Onkyo On April 29, 2021, the Company’s subsidiary, Premium Audio Company LLC (“PAC”), signed a Letter of Intent to acquire certain assets of the home audio/video business of Onkyo Home Entertainment Corporation (“OHEC”), along with Sharp Corporation (“Sharp”) as PAC’s partner. On May 26, 2021, PAC and Sharp signed an asset purchase agreement (“APA”) to jointly acquire certain assets of the home audio/video business of OHEC through a joint venture entity. The APA was approved by OHEC’s shareholders at its ordinary general meeting of shareholders on June 25, 2021 and on June 28, 2021, the Company announced that PAC had entered into a joint venture with Sharp in order to execute the transaction. PAC owns 77.2 % of the joint venture and has an 85.1 % voting interest and Sharp owns 22.8 % of the joint venture and has a 14.9 % voting interest. On September 8, 2021, the newly formed joint venture, Onkyo Technology KK ("Onkyo"), completed the transaction to acquire certain assets of the home audio/video business of OHEC. The acquired assets consisted of intangible assets. The joint venture agreement between PAC and Sharp also contains a put/call arrangement, whereby Sharp has the right to put its interest in the joint venture back to Voxx and Voxx has the right to call Sharp’s ownership interest in the joint venture at any time after the approval of Onkyo’s annual financial statements for the year ending February 28, 2025 at a purchase price based on a formula as defined in the joint venture agreement. The following summarizes the allocation of the purchase price based upon the fair value of the assets acquired at the date of acquisition: September 8, 2021 Measurement September 8, 2021 Purchase price: Cash paid $ 21,989 - 21,989 Assignment of notes and interest receivable 8,417 - 8,417 Fair value of contingent consideration 6,710 1,119 7,829 Total transaction consideration $ 37,116 1,119 38,235 Allocation: Intangible assets $ 26,929 ( 7,905 ) 19,024 Goodwill 10,187 9,024 19,211 Total assets acquired $ 37,116 1,119 38,235 During Fiscal 2022 and during the three and nine months ended November 30, 2022, the Company recorded a cumulative net measurement period adjustment that increased goodwill by $ 9,024 . The measurement period adjustment would have resulted in a decrease in amortization expense related to the tradenames and technology in the third quarter of Fiscal 2022 and was not significant. The Company made the measurement period adjustment to reflect facts and circumstances that existed as of the acquisition date and did not result from intervening events subsequent to such date. The assets acquired include trade names, technology, and goodwill. The amounts assigned to goodwill and intangible assets for the acquisition are as follows: September 8, 2021 (as adjusted) Amortization Period (Years) Goodwill $ 19,211 N/A Tradenames 12,468 10 Technology 6,556 5 $ 38,235 The fair values of the intangible assets and contingent consideration were determined with the assistance of a third-party valuation expert. Goodwill was determined as the excess of the purchase price over the fair value of the assets acquired, including identifiable intangible assets, and represents workforce and expected cash flow generation for the Onkyo business that does not qualify for separate recognition as intangible assets. Contingent consideration is payable to OHEC based upon the calculation of 2 % of the total price of certain future product purchases, as defined in the APA, by PAC. Such payments will be made to OHEC in perpetuity. The fair value of the contingent consideration was determined using an income approach, by estimating potential payments based on projections of future inventory purchases multiplied by the 2 % payment and discounting them back to their present values using a weighted average cost of capital. A second discount rate was applied to account for the Company’s credit risk to arrive at the present value of the payments. As there is no set term and the payments will be made in perpetuity, a one-stage Gordon Growth Model was used to account for expected payments made beyond the last year of projections. The Company has consolidated the financial results of Onkyo since the acquisition date for financial reporting purposes. The non-controlling interest has been classified as redeemable non-controlling interest outside of equity on the accompanying Consolidated Balance Sheets as the exercise of the put option is not within the Company’s control. The carrying value of the redeemable non-controlling interest of Onkyo cannot be less than the redemption amount, which is the amount Sharp will settle the put option for if exercised. Adjustments to reconcile the carrying value to the redemption amount are recorded immediately to retained earnings. No adjustment was made to the carrying amount of the redeemable non-controlling interest at November 30, 2022, as the carrying amount was in excess of the redemption amount. The following table provides the rollforward of the redeemable non-controlling interest for the nine months ended November 30, 2022: Redeemable Non-controlling Interest Balance at February 28, 2022 $ 511 Net loss attributable to non-controlling interest ( 1,318 ) Comprehensive loss attributable to non-controlling interest ( 86 ) Foreign currency translation ( 39 ) Balance at November 30, 2022 $ ( 932 ) The purpose of this acquisition was to expand the Company’s market share and product offerings within the premium audio industry. The joint venture owns the Onkyo and Integra brands and has the licensing rights to the Pioneer brands. It will market and sell a variety of products under the Onkyo, Integra, and Pioneer brands. Onkyo’s results of operations are included in the consolidated financial statements of Voxx in our Consumer Electronics segment from September 8, 2021, and represents approximately 2.1 % and 2.0 % of the Company’s net sales for the three and nine months ended November 30, 2022, respectively. Prior to the acquisition, PAC operated under a distribution agreement with OHEC through its 11 Trading Company ("11TC") subsidiary, selling Onkyo and Pioneer products to Voxx customers. No additional customer contracts were acquired in conjunction with the acquisition and 11TC continues to sell these products to the same pre-acquisition customer base. Historical financial statements for Onkyo prior to the acquisition were not available and it is impracticable for the Company to determine the impact the acquisition would have had on the Company’s revenue or net (loss) income had it been included in the consolidated results of the Company for the three and nine months ended November 30, 2021 . |
Net (Loss) Income Per Common Sh
Net (Loss) Income Per Common Share | 9 Months Ended |
Nov. 30, 2022 | |
Net Income Per Common Share [Abstract] | |
Net (Loss) Income Per Common Share | (3) Net (Loss) Income Per Common Share Basic net income (loss) per common share attributable to VOXX International Corporation is calculated by dividing net income attributable to Voxx, adjusted to reflect changes in the redemption value of redeemable non-controlling interest, by the weighted-average common shares outstanding during the period. The diluted net income (loss) per common share computation reflects the potential dilution that would occur if common stock equivalent securities or other contracts to issue common stock were exercised or converted into common stock. There was no redemption value adjustment of the redeemable non-controlling interest for the three and nine months ended November 30, 2022. A reconciliation between the denominator of basic and diluted net income (loss) per common share is as follows: Three months ended Nine months ended 2022 2021 2022 2021 Weighted-average common shares outstanding (basic) 24,389,375 24,289,909 24,408,541 24,279,084 Effect of dilutive securities: Restricted stock units and market stock units 231,984 — — — Weighted-average common shares and potential common shares outstanding (diluted) 24,621,359 24,289,909 24,408,541 24,279,084 Restricted stock units and market stock units of 9,306 and 650,325 for the three months ended November 30, 2022 and 2021, respectively, and 379,113 and 695,589 for the nine months ended November 30, 2022 and 2021, respectively, were not included in the net income (loss) per diluted share calculation because the grant price of the restricted stock units and market stock units was greater than the average market price of the Company’s common stock during these periods, or the inclusion of these components would have been anti-dilutive. |
Investment Securities
Investment Securities | 9 Months Ended |
Nov. 30, 2022 | |
Investment Securities [Abstract] | |
Investment Securities | (4) Investment Securities As of November 30, 2022, and February 28, 2022, the Company had the following investments: November 30, 2022 Fair Value Investment Securities Marketable Equity Securities Mutual funds $ 1,167 Total Marketable Equity Securities 1,167 Total Investment Securities $ 1,167 February 28, 2022 Fair Value Investment Securities Marketable Equity Securities Mutual funds $ 1,231 Total Marketable Securities 1,231 Total Investment Securities $ 1,231 Equity Securities Mutual Funds The Company’s mutual funds are held in connection with its deferred compensation plan. Changes in the carrying value of these securities are offset by changes in the corresponding deferred compensation liability. |
Fair Value Measurements and Der
Fair Value Measurements and Derivatives | 9 Months Ended |
Nov. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Derivatives | (5) Fair Value Measurements and Derivatives The Company applies the authoritative guidance on “Fair Value Measurements," which, among other things, requires enhanced disclosures about assets and liabilities that are measured and reported at fair value. This guidance establishes a hierarchal disclosure framework that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices, or for which fair value can be measured from actively quoted prices, generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following categories: Level 1 - Quoted market prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 inputs that are either directly or indirectly observable. Level 3 - Unobservable inputs developed using the Company's estimates and assumptions, which reflect those that market participants would use. The following table presents financial assets and liabilities measured at fair value on a recurring basis at November 30, 2022: Fair Value Measurements at Total Level 1 Level 2 Level 3 Assets: Cash and money market funds $ 8,477 $ 8,477 $ - $ - Mutual funds 1,167 1,167 - - Derivatives designated for hedging 162 - 162 - Liabilities: Contingent consideration $ 5,818 $ - $ - $ 5,818 The following table presents financial assets and liabilities measured at fair value on a recurring basis at February 28, 2022: Fair Value Measurements at Total Level 1 Level 2 Level 3 Assets Cash and money market funds $ 27,788 $ 27,788 $ - $ - Mutual funds 1,231 1,231 - - Liabilities: Derivatives designated for hedging $ 188 - 188 - Contingent consideration 6,435 - - 6,435 At November 30, 2022, the carrying value of the Company's accounts receivable, short-term debt, accounts payable, accrued expenses, bank obligations, and long-term debt approximates fair value because of either (i) the short-term nature of the financial instrument; (ii) the interest rate on the financial instrument being reset every quarter to reflect current market rates; or (iii) the stated or implicit interest rate approximates the current market rates or are not materially different from market rates. Contingent consideration is related to the Company’s Onkyo acquisition (see Note 2). The estimated fair value of the contingent consideration is classified within Level 3 and was determined using an income approach. Under this method, potential future purchases applicable to the contingent consideration were determined using internal estimates for growth. The potential future purchases applicable to the contingent consideration were multiplied by the appropriate percentage of payments due to OHEC, and the resulting contingent consideration amounts were adjusted for risk at the appropriate discount rate. The value of the contingent consideration was further discounted to reflect the credit risk of the Company. Changes in either the revenue growth rate assumptions or the discount rate could result in a material change to the amount of contingent consideration accrued and such changes will be recorded in the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss). The following table provides a rollforward of the Company's contingent consideration balance for the nine months ended November 30, 2022: Balance at February 28, 2022 $ 6,435 Payments made to OHEC ( 606 ) Fair value adjustment 50 Purchase price allocation adjustment 1,051 Foreign currency translation ( 1,112 ) Balance at November 30, 2022 $ 5,818 Derivative Instruments The Company’s derivative instruments include an interest rate swap agreement and have also included forward foreign currency contracts in prior periods. The Company’s interest rate swap agreement hedges interest rate exposure related to the outstanding balance of its Florida Mortgage, with monthly payments due through March 2026. The swap agreement locks the interest rate on the debt at 3.48 % (inclusive of credit spread) through the maturity date of the loan. Interest rate swap agreements qualifying for hedge accounting are designated as cash flow hedges and valued based on a comparison of the change in fair value of the actual swap contracts designated as the hedging instruments and the change in fair value of a hypothetical swap contract (Level 2). We calculate the fair value of our interest rate swap agreement quarterly based on the quoted market price for the same or similar financial instruments. Interest rate swaps are classified in the balance sheet as either assets or liabilities based on the fair value of the instruments at the end of the period. When entered into, forward foreign currency contracts are utilized to hedge a portion of the Company’s foreign currency inventory purchases. Forward foreign currency derivatives qualifying for hedge accounting are designated as cash flow hedges and valued using observable forward rates for the same or similar instruments (Level 2). As of November 30, 2022, there are no open forward foreign currency contracts. Financial Statement Classification The following table discloses the fair value as of November 30, 2022 and February 28, 2022 of the Company’s derivative instruments: Derivative Assets and Liabilities Fair Value Account November 30, 2022 February 28, 2022 Designated derivative instruments Interest rate swap agreements Other assets 162 — Other long-term liabilities — ( 188 ) Total derivatives $ 162 $ ( 188 ) Cash Flow Hedges The Company's policy is to enter into derivative instrument contracts with terms that coincide with the underlying exposure being hedged. As such, the Company’s derivative instruments are expected to be highly effective. For derivative instruments that are designated and qualify as cash flow hedges, the entire change in fair value of the hedging instrument included in the assessment of the hedge ineffectiveness is recorded to Other comprehensive income (loss). When the amounts recorded in Other comprehensive income (loss) are reclassified to earnings, they are presented in the same income statement line item as the effect of the hedged item. During Fiscal 2022 and through the third quarter of Fiscal 2023, the Company did not enter into any new forward foreign currency contracts. All forward foreign currency contracts entered into during Fiscal 2021 settled as of February 28, 2022 and had been designated as cash flow hedges. The current outstanding notional value of the Company's interest rate swap at November 30, 2022 is $ 6,240 . For cash flow hedges, the gain or loss is reported as a component of Other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The net income recognized in Other comprehensive income (loss) for foreign currency contracts settled in the fourth quarter of Fiscal 2022 were recognized in Cost of sales during the nine months ended November 30, 2022. No amounts were excluded from the assessment of hedge effectiveness during the respective periods. The gain or loss on the Company’s interest rate swap is recorded in Other comprehensive income (loss) and subsequently reclassified into Interest and bank charges in the period in which the hedged transaction affects earnings. As of November 30, 2022 , no interest rate swaps originally designated for hedge accounting were de-designated or terminated. Activity related to cash flow hedges recorded during the three and nine months ended November 30, 2022 and 2021 was as follows: Three months ended Nine months ended November 30, 2022 November 30, 2022 Pretax Gain Pretax Loss Pretax Gain Pretax Gain Cash flow hedges Foreign currency contracts $ — $ — $ — $ 63 Interest rate swaps 78 — 350 — Three months ended Nine months ended November 30, 2021 November 30, 2021 Pretax (Loss) Gain Pretax Loss Pretax (Loss) Gain Pretax Loss Cash flow hedges Foreign currency contracts $ 89 $ ( 30 ) $ 233 $ ( 235 ) Interest rate swaps 104 — 141 — |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Nov. 30, 2022 | |
Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Loss | (6) Accumulated Other Comprehensive Loss The Company’s accumulated other comprehensive loss consists of the following: Foreign Pension plan Derivatives Total Balance at February 28, 2022 $ ( 16,691 ) $ ( 711 ) $ ( 101 ) $ ( 17,503 ) Other comprehensive (loss) income before reclassifications ( 2,665 ) 53 307 ( 2,305 ) Reclassified from accumulated other comprehensive loss — — ( 43 ) ( 43 ) Net current-period other comprehensive (loss) income ( 2,665 ) 53 264 ( 2,348 ) Balance at November 30, 2022 $ ( 19,356 ) $ ( 658 ) $ 163 $ ( 19,851 ) During the three and nine months ended November 30, 2022, the Company recorded other comprehensive (loss) income, net of the associated tax impact, of $ 0 and $ 19 , respectively, related to derivatives designated in a hedging relationship, and $ 0 in both periods related to pension plan adjustments. The other comprehensive (loss) income before reclassification related to foreign currency translation losses of $ ( 2,665 ) includes the remeasurement of intercompany transactions of a long-term investment nature of $ 1,648 with certain subsidiaries whose functional currency is not the U.S. dollar, and $( 4,313 ) from translating the financial statements of the Company's non-U.S. dollar functional currency subsidiaries into our reporting currency, which is the U.S. dollar. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Nov. 30, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | (7) Supplemental Cash Flow Information The following is supplemental information relating to the Unaudited Consolidated Statements of Cash Flows: Nine months ended 2022 2021 Non-cash investing and financing activities: Recording of redeemable equity $ ( 85 ) $ 188 Reclassification of stockholders' equity to redeemable equity 531 - Gross issuance of shares 1 1 Change in goodwill due to measurement period adjustments, net 1,051 ( 1,353 ) Additional goodwill from the recognition of the fair value of non-controlling interest in connection with business acquisition - 8,463 Contingent purchase price consideration in connection with business acquisition - 6,710 Right of use assets obtained in exchange for operating lease obligations 899 419 Right of use assets obtained in exchange for finance lease obligations 251 - Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,076 $ 1,018 Operating cash flows from finance leases 3 9 Finance cash flows from finance leases 217 323 Cash paid during the period: Interest (excluding bank charges) $ 1,646 $ 492 Income taxes (net of refunds) 2,061 625 |
Accounting for Stock-Based Comp
Accounting for Stock-Based Compensation | 9 Months Ended |
Nov. 30, 2022 | |
Accounting For Stock Based Compensation [Abstract] | |
Accounting for Stock-Based Compensation | (8) Accounting for Stock-Based Compensation The Company has various stock-based compensation plans, which are more fully described in Note 1 of the Notes to the Consolidated Financial Statements contained in the Company’s Form 10-K for the fiscal year ended February 28, 2022. Restricted stock awards are granted pursuant to the Company's 2012 Equity Incentive Plan (the "2012 Plan"). A restricted stock award is an award of common stock that is subject to certain restrictions during a specified period. Restricted stock awards are independent of option grants and are subject to forfeiture if employment terminates for a reason other than death, disability, or retirement prior to the release of the restrictions. The Company's Omnibus Equity Incentive Plan was established in 2014 (the "2014 Plan"). Pursuant to the 2014 Plan, Restricted Stock Units ("RSUs") may be awarded by the Company to any individual who is employed by, provides services to, or serves as a director of the Company or its affiliates. RSUs vest on the later of three years from the date of grant, or the grantee reaching the age of 65 years. The RSU awards will also vest upon the sale of all of the Company's issued and outstanding stock, the sale of all, or substantially all, of the assets of a subsidiary of which the grantee serves as CEO and/or President, or the termination of the grantee's employment without cause, provided that the grantee, at the time of termination, has been employed for at least 10 years. When vested, RSU awards may be settled in shares of Class A Common Stock or in cash, at the Company's sole option. There are no market conditions inherent in an RSU award, only the employee performance requirement for performance awards, and the service requirement that the respective employee continues employment with the Company through the vesting date. In July 2022, the Company granted 46,556 RSU awards to employees under the 2014 Plan. The Company expenses the cost of RSU awards on a straight-line basis over the requisite service period of each grantee. For these purposes, the fair market value of each RSU is determined based on the mean of the high and low price of the Company's common stock on the grant date. The fair market value of each RSU granted in July 2022 was $ 8.28 . Grant of Shares to Chief Executive Officer On July 8, 2019, the Board of Directors approved a five-year Employment Agreement (the “Employment Agreement”), effective March 1, 2019, by and between the Company and Patrick M. Lavelle, the Company’s President and Chief Executive Officer. Under the terms of the Employment Agreement, in addition to a $ 1,000 annual salary and a cash bonus based on the Company’s Adjusted EBITDA, Mr. Lavelle was granted the right to receive certain stock-based compensation as discussed below: - An initial stock grant of 200,000 fully vested shares of Class A Common Stock issued in July 2019 under the 2012 Plan. - Additional stock grants of 100,000 shares of Class A Common Stock to be issued on each of March 1, 2020, March 1, 2021, and March 1, 2022. Compensation expense of $ 40 and $ 118 was recognized for the three and nine months ended November 30, 2021 , respectively, based upon the grant date fair value of $ 4.15 per share using the graded vesting attribution method. For the three and nine months ended November 30, 2022 , there was no remaining compensation expense recognized related to these awards. On March 1, 2020, 100,000 of these stock grants vested, resulting in 100,000 shares of the Company’s Class A Common Stock being issued to Mr. Lavelle. On March 1, 2021, an additional 100,000 of these stock grants vested, resulting in 60,653 shares of Class A Common Stock being issued to Mr. Lavelle and 39,347 shares being withheld for taxes. On March 1, 2022, the final 100,000 of these stock grants vested, resulting in 61,337 shares of Class A Common Stock being issued to Mr. Lavelle and 38,663 shares being withheld for taxes. - Grant of market stock units (“MSU’s”) up to a maximum value of $ 5,000 , based upon the achievement of a 90-calendar day average stock price of no less than $ 5.49 over the performance period ending on the third and fifth anniversary of the effective date of the Employment Agreement. The value of the MSU award increases based upon predetermined targeted 90-calendar day average stock prices with a maximum of $ 5,000 if the 90-calendar day average high stock price equals or exceeds $ 15.00 . The total number of shares to be issued related to the MSU's based upon achievement of the maximum award value of $ 5,000 , and if issued at $ 15.00 per share, is estimated at 333,333 shares. The award may be settled in shares or in cash upon mutual agreement between the Company and Mr. Lavelle. Actual results may differ based upon when the high average stock price is achieved and settled. We recognized stock-based compensation expense of $ 23 and $ 69 during the three and nine months ended November 30, 2022, respectively, and $ 60 and $ 182 during the three and nine months ended November 30, 2021 , respectively, related to these MSU’s using the graded vesting attribution method over the performance period. On March 1, 2022, 80 % of this MSU award vested and was settled in cash, resulting in a payment made to Mr. Lavelle in the amount of $ 4,000 during the nine months ended November 30, 2022. As of November 30, 2022 , 20 % of the MSU’s remain outstanding. All stock grants under the Employment Agreement are subject to a hold requirement as specified in the Employment Agreement. The Employment Agreement gave Mr. Lavelle, in certain limited change of control situations, the right to require the Company to purchase shares issued in connection with the Employment Agreement, shares personally acquired by Mr. Lavelle, and shares issued to him under other incentive compensation arrangements. Accordingly, the stock awards issued in connection with the Employment Agreement are presented as redeemable equity on the Consolidated Balance Sheets at grant-date fair value. RSUs previously held by Mr. Lavelle under the 2014 Plan and shares personally purchased by Mr. Lavelle have been reclassified from permanent equity to redeemable equity. As the contingent events that would allow Mr. Lavelle to redeem the shares are not probable at this time, remeasurement of the amounts in redeemable equity have not been recorded. The Employment Agreement contains certain restrictive and non-solicitation covenants. The following table presents a summary of the activity related to the additional stock grants under the Employment Agreement, and RSU grants under the 2014 Plan for the nine months ended November 30, 2022: Number Weighted Unvested award balance at February 28, 2022 354,360 $ 6.30 Granted 46,556 8.28 Vested ( 25,296 ) 4.65 Vested and settled ( 100,000 ) 4.15 Unvested award balance at November 30, 2022 275,620 $ 7.57 At November 30, 2022, there were 501,505 vested and unsettled RSU awards under the Company’s 2014 Plan with a weighted average fair value of $ 6.79 . During the three and nine months ended November 30, 2022 and 2021, the Company recorded $ 145 and $ 407 , respectively, and $ 221 and $ 694 , respectively, in total stock-based compensation related to the 2014 Plan, as well as additional stock grants and MSU’s under the Employment Agreement. As of November 30, 2022, there was approximately $ 1,200 of unrecognized stock-based compensation expense related to unvested RSU awards and MSU’s. |
Supply Chain Financing
Supply Chain Financing | 9 Months Ended |
Nov. 30, 2022 | |
Supply Chain Financing [Abstract] | |
Supply Chain Financing | (9) Supply Chain Financing The Company has supply chain financing agreements and factoring agreements that were entered into for the purpose of accelerating receivable collection and better managing cash flow. The balances under the agreements are sold without recourse and are accounted for as sales of accounts receivable. Total receivable balances sold for the three and nine months ended November 30, 2022, net of discounts, were $ 27,350 and $ 69,270 , respectively, compared to $ 20,681 and $ 62,136 for the three and nine months ended November 30, 2021, respectively. Balances sold under existing supply chain finance and factoring agreements increased during the three and nine months ended November 30, 2022 as compared to the prior year, as two of the Company's German subsidiaries sold receivable balances during Fiscal 2023, while only one subsidiary participated during the three and nine months ended November 30, 2021 . |
Research and Development
Research and Development | 9 Months Ended |
Nov. 30, 2022 | |
Research and Development [Abstract] | |
Research and Development | (10) Research and Development Expenditures for research and development are charged to expense as incurred. Such expenditures amounted to $ 1,793 and $ 6,891 for the three and nine months ended November 30, 2022, respectively, compared to $ 3,986 and $ 9,931 for the three and nine months ended November 30, 2021, respectively. All amounts are net of customer reimbursements and are included within Engineering and technical support expenses on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) . |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Nov. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | (11) Goodwill and Intangible Assets The change in goodwill by segment is as follows: Automotive Electronics: Amount Beginning balance at March 1, 2022 $ 10,425 Activity during the period — Balance at November 30, 2022 $ 10,425 Gross carrying value at November 30, 2022 $ 10,425 Accumulated impairment charge — Net carrying value at November 30, 2022 $ 10,425 Consumer Electronics: Beginning balance at March 1, 2022 $ 63,895 Adjustments to goodwill acquired 1,051 Foreign currency adjustments ( 2,996 ) Balance at November 30, 2022 $ 61,950 Gross carrying value at November 30, 2022 $ 93,062 Accumulated impairment charge ( 31,112 ) Net carrying value at November 30, 2022 $ 61,950 Total Goodwill, net $ 72,375 The Company's Biometrics segment did no t carry a goodwill balance at November 30, 2022 or February 28, 2022 . At November 30, 2022, intangible assets consisted of the following: Gross Accumulated Total Net Finite-lived intangible assets: Customer relationships $ 53,626 $ 41,794 $ 11,832 Trademarks/Tradenames 15,409 2,954 12,455 Developed technology 19,331 14,287 5,044 Patents 6,736 5,775 961 License 1,400 1,400 — Contracts 1,556 1,556 — Total finite-lived intangible assets $ 98,058 $ 67,766 30,292 Indefinite-lived intangible assets Trademarks 62,701 Total intangible assets, net $ 92,993 At February 28, 2022, intangible assets consisted of the following: Gross Accumulated Total Net Finite-lived intangible assets: Customer relationships $ 54,138 $ 39,669 $ 14,469 Trademarks/Tradenames 17,466 1,927 15,539 Developed technology 20,413 13,179 7,234 Patents 6,736 5,562 1,174 License 1,400 1,400 — Contracts 1,556 1,556 — Total finite-lived intangible assets $ 101,709 $ 63,293 38,416 Indefinite-lived intangible assets Trademarks 63,034 Total intangible assets, net $ 101,450 The Company recorded amortization expense of $ 1,629 and $ 5,217 for the three and nine months ended November 30, 2022, respectively, compared to $ 2,017 and $ 4,803 for the three and nine months ended November 30, 2021 , respectively. The estimated aggregate amortization expense for all amortizable intangibles for November 30 of each of the succeeding years is as follows: Year Amount 2023 $ 5,865 2024 5,620 2025 5,454 2026 3,770 2027 2,878 |
Equity Investment
Equity Investment | 9 Months Ended |
Nov. 30, 2022 | |
Equity Method Investment, Summarized Financial Information [Abstract] | |
Equity Investment | (12) Equity Investment As of November 30, 2022 and February 28, 2022 , the Company had a 50 % non-controlling ownership interest in ASA Electronics, LLC and Subsidiary (“ASA"), which acts as a distributor of mobile electronics specifically designed for niche markets within the automotive industry, including RV's; buses; and commercial, heavy duty, agricultural, construction, powersport, and marine vehicles. The following presents summary financial information for ASA. Such summary financial information has been provided herein based upon the individual significance of ASA to the consolidated financial information of the Company. November 30, 2022 February 28, 2022 Current assets $ 50,040 $ 46,202 Non-current assets 6,663 7,382 Liabilities 11,815 10,888 Members' equity 44,888 42,696 Nine months ended 2022 2021 Net sales $ 83,050 $ 91,153 Gross profit 19,852 22,976 Operating income 10,738 13,867 Net income 10,746 13,928 The Company's share of income from ASA was $ 2,022 and $ 5,373 for the three and nine months ended November 30, 2022, respectively, compared to $ 2,206 and $ 6,964 for the three and nine months ended November 30, 2021 , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Nov. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (13) Income Taxes The Company’s provision for income taxes consists of federal, foreign, and state taxes necessary to align the Company’s year-to-date tax provision with the annual effective rate that it expects to achieve for the full year. At each interim period, the Company updates its estimate of the annual effective tax rate and records cumulative adjustments, as necessary. For the three months ended November 30, 2022 , the Company recorded an income tax benefit of $ 3,988 , which includes a discrete income tax benefit of $ 141 related primarily to the finalization of the federal and certain state tax return filings. For the three months ended November 30, 2021 , the Company recorded an income tax benefit of $ 641 , which includes a discrete income tax provision of $ 175 related primarily to finalization of the federal and certain state tax return filings. The effective tax rate for the three months ended November 30, 2022 was an income tax benefit of 168.6 % on pre-tax income of $ 2,366 . The effective tax rate for the three months ended November 30, 2022 differs from the U.S. statutory rate of 21 % as a result of a number of factors, including the non-controlling interest related to EyeLock LLC, state and local income taxes, nondeductible permanent differences, income taxed in foreign jurisdictions at varying tax rates, and an increase in the valuation allowance. The effective tax rate for the three months ended November 30, 2021 was an income tax benefit of 2.1 % on a pre-tax loss of $ 30,313 . The effective tax rate for the three months ended November 30, 2021 differed from the statutory rate of 21 % primarily as a result of an increase in the valuation allowance as the Company recorded a limited tax benefit with respect to the Arbitration Settlement as it could not conclude that all of its U.S. deferred tax assets were realizable on a more-likely-than-not basis. For the nine months ended November 30, 2022 , the Company recorded an income tax benefit of $ 5,788 , which includes a discrete income tax benefit of $ 313 related to the reversal of uncertain tax position liabilities as a result of the lapse of the applicable statute of limitations and the finalization of certain tax filings during the quarter ended November 30, 2022, offset with the accrual of interest for unrecognized tax benefits. For the nine months ended November 30, 2021 , the Company recorded an income tax benefit of $ 374 , which includes a discrete income tax provision of $ 31 related to the the finalization of federal and state tax filings during the quarter ended November 30, 2021 and the accrual of interest for unrecognized tax benefits, offset with the reversal of uncertain tax provision liabilities as a result of the lapse of the applicable statute of limitations. The effective tax rate for the nine months ended November 30, 2022 was an income tax benefit of 31.8 % on pre-tax loss of $ 18,200 . The effective tax rate for the nine months ended November 30, 2022 differs from the U.S. statutory rate of 21 % as a result of a number of factors, including the non-controlling interest related to EyeLock LLC, state and local income taxes, nondeductible permanent differences, income taxed in foreign jurisdictions at varying tax rates, and an increase in valuation allowance. The effective tax rate for the nine months ended November 30, 2021 was an income tax benefit of 1.3 % on pre-tax loss of $ 28,941 . The effective tax rate for the nine months ended November 30, 2021 differs from the U.S. statutory rate of 21 % as a result of a number of factors, including the non-controlling interest related to EyeLock LLC, state and local income taxes, nondeductible permanent differences, income taxed in foreign jurisdictions at varying tax rates, and an increase in valuation allowance. At November 30, 2022 , the Company had an uncertain tax position liability of $ 929 , including interest and penalties. The unrecognized tax benefits include amounts related to various U.S. federal, state, and local, and foreign tax issues. |
Inventory
Inventory | 9 Months Ended |
Nov. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | (14) Inventory Inventories by major category are as follows: November 30, February 28, Raw materials $ 24,951 $ 23,904 Work in process 1,120 1,519 Finished goods 166,925 149,499 Inventory $ 192,996 $ 174,922 |
Product Warranties and Product
Product Warranties and Product Repair Costs | 9 Months Ended |
Nov. 30, 2022 | |
Payables And Accruals Warranties [Abstract] | |
Product Warranties and Product Repair Costs | (15) Product Warranties and Product Repair Costs The following table provides a summary of the activity with respect to product warranties and product repair costs. The liability for product warranties is included within Accrued expenses and other current liabilities and the reserve for product repair costs is recorded as a reduction of Inventory on the Consolidated Balance Sheets. Three months ended Nine months ended 2022 2021 2022 2021 Opening balance $ 6,239 $ 4,495 $ 5,622 $ 5,290 Liabilities for warranties accrued during the period 1,732 1,978 5,029 3,215 Liabilities adjusted during acquisition — — — ( 352 ) Warranty claims settled during the period ( 1,286 ) ( 1,016 ) ( 3,966 ) ( 2,696 ) Ending balance $ 6,685 $ 5,457 $ 6,685 $ 5,457 |
Financing Arrangements
Financing Arrangements | 9 Months Ended |
Nov. 30, 2022 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | (16) Financing Arrangements The Company has the following financing arrangements: November 30, February 28, Debt Domestic credit facility (a) $ 37,000 $ — Florida mortgage (b) 6,240 6,614 Euro asset-based lending obligation - VOXX Germany (c) — 1,906 Shareholder loan payable to Sharp (d) 3,977 4,718 Total debt 47,217 13,238 Less: current portion of long-term debt 500 2,406 Long-term debt 46,717 10,832 Less: debt issuance costs 857 1,046 Total long-term debt, net of debt issuance costs $ 45,860 $ 9,786 (a) Domestic Credit Facility The Company has a senior secured credit facility (the "Credit Facility") with Wells Fargo Bank, N.A. ("Wells Fargo") that provides for a revolving credit facility with committed availability of up to $ 140,000 . The Credit Facility also includes a $ 30,000 sublimit for letters of credit and a $ 15,000 sublimit for swingline loans. The availability under the revolving credit line within the Credit Facility is subject to a borrowing base, which is based on eligible accounts receivable, eligible inventory and certain real estate, subject to reserves as determined by the lender, and is also limited by amounts outstanding under the Florida Mortgage (see Note 16(b)). The availability under the revolving credit line of the Credit Facility was $ 91,415 as of November 30, 2022. April 19, 2026 ; however, it is subject to acceleration upon the occurrence of an Event of Default as defined in the Second Amended and Restated Credit Agreement (“the Agreement”). The Company may prepay any amounts outstanding at any time, subject to payment of certain breakage and redeployment costs relating to LIBOR Rate Loans. The commitments under the Credit Facility may be irrevocably reduced at any time, without premium or penalty as set forth in the Agreement. 1.75 – 2.25 % ( 5.70 % at November 30, 2022 ). Loans designated as Base Rate loans bear interest at a rate equal to the applicable margin for Base Rate Loans plus a range of 0.75 - 1.25 % as defined in the Agreement and shall not be lower than 1.75 % ( 7.75 % at November 30, 2022). An amendment to the Credit Facility in April 2021 provided for a Benchmark Replacement that will replace the LIBOR rate for all revolver usage. The Benchmark Replacement is subject to the occurrence of a Benchmark Transition Event, as defined in the Second Amended and Restated Credit Agreement and becomes effective after a five-day transition period following the event. Provided that the Company is in a Compliance Period (the period commencing on that day in which Excess Availability is less than 15 % of the Maximum Revolver Amount and ending on a day in which Excess Availability is equal to or greater than 15% for any consecutive 30-day period thereafter) , the Credit Facility requires compliance with a financial covenant calculated as of the last day of each month, consisting of a Fixed Charge Coverage Ratio. The Credit Facility also contains covenants, subject to defined carveouts, that limit the ability of the loan parties and certain of their subsidiaries which are not loan parties to, among other things: (i) incur additional indebtedness; (ii) incur liens; (iii) merge, consolidate or dispose of a substantial portion of their business; (iv) transfer or dispose of assets; (v) change their name, organizational identification number, state or province of organization or organizational identity; (vi) make any material change in their nature of business; (vii) prepay or otherwise acquire indebtedness; (viii) cause any change of control; (ix) make any restricted junior payment; (x) change their fiscal year or method of accounting; (xi) make advances, loans or investments; (xii) enter into or permit any transaction with an affiliate of any borrower or any of their subsidiaries; (xiii) use proceeds for certain items; (xiv) issue or sell any of their stock; or (xv) consign or sell any of their inventory on certain terms. In addition, if excess availability under the Credit Facility were to fall below certain specified levels, as defined in the Agreement, the lenders would have the right to assume dominion and control over the Company's cash. As of November 30, 2022, the Company was not in a Compliance Period. $ 144 and $ 536 , respectively, compared to $ 208 and $ 531 during the three and nine months ended November 30, 2021, respectively. These charges are included within Interest and bank charges on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss). 667 that will be amortized over the remaining term of the facility. The Company accounted for this amendment to the Credit Facility as a modification of debt. Deferred financing costs are included in Long-term debt on the accompanying Consolidated Balance Sheets as a contra-liability balance and are amortized through Interest and bank charges in the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) over the term of the Credit Facility, which expires on April 19, 2026 . During the three and nine months ended November 30, 2022, the Company amortized $ 55 and $ 166 of these costs, respectively, as compared to $ 55 and $ 185 during the three and nine months ended November 30, 2021, respectively. The net unamortized balance of these deferred financing costs as of November 30, 2022 was $ 756 . (b) Florida Mortgage On July 6, 2015, VOXX HQ LLC, the Company’s wholly owned subsidiary, closed on a $ 9,995 industrial development revenue tax exempt bond under a loan agreement in favor of the Orange County Industrial Development Authority (the “Authority”) to finance the construction of the Company's manufacturing facility and executive offices in Lake Nona, Florida. Wells Fargo Bank, N.A. ("Wells Fargo") was the purchaser of the bond and U.S. Bank National Association is the trustee under an Indenture of Trust with the Authority. Voxx borrowed the proceeds of the bond purchase from the Authority during construction as a revolving loan, which converted to a permanent mortgage upon completion of the facility in January 2016 (the "Florida Mortgage"). The Company makes principal and interest payments to Wells Fargo, which began March 1, 2016 and will continue through March of 2026. The Florida Mortgage bears interest at 70 % of 1-month LIBOR plus 1.54 % ( 5.68 % at November 30, 2022) and is secured by a first mortgage on the property, a collateral assignment of leases and rents and a guaranty by the Company. The financial covenants of the Florida Mortgage are as defined in the Company’s Credit Facility with Wells Fargo dated April 26, 2016 and amended in April 2021. The amendment to the Credit Facility in April 2021 provided for a Benchmark Replacement that will replace the LIBOR rate for all revolver usage. The Benchmark Replacement is subject to the occurrence of a Benchmark Transition Event, as defined in the Second Amended and Restated Credit Agreement and becomes effective after a five-day transition period following the event. 332 as a result of obtaining the Florida Mortgage, which are recorded as deferred financing costs and included in Long-term debt as a contra-liability balance on the accompanying Consolidated Balance Sheets and are being amortized through Interest and bank charges in the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) over the ten-year term of the Florida Mortgage. The Company amortized $ 8 and $ 24 of these costs during both the three and nine months ended November 30, 2022 and 2021, respectively. The net unamortized balance of these deferred financing costs as of November 30, 2022 is $ 101 . 3.48 % under the swap agreement (See Note 5). (c) Euro Asset-Based Lending Obligation – VOXX Germany Foreign bank obligations include a Euro Asset-Based Lending ("ABL") credit facility, which has a credit limit of € 8,000 for the Company's subsidiary, VOXX Germany, which expires on July 31, 2023. The rate of interest for the ABL is the three-month Euribor plus 2.30 % ( 4.27 % at November 30, 2022 ). (d) Shareholder Loan Payable to Sharp In conjunction with the capitalization and funding of the Company’s Onkyo joint venture with its partner Sharp, which was created in order to execute the acquisition of certain assets of the home audio/video business of OHEC on September 8, 2021 (see Note 2), Onkyo entered into a loan agreement with the shareholders of the joint venture, PAC and Sharp. The loan balance outstanding at November 30, 2022 represents the portion of the loan payable to Sharp. The loan balance due to PAC eliminates in consolidation. All amounts outstanding under the loan will mature and become payable ten years from the execution date of the acquisition, which is September 8, 2031. The loan may be prepaid subject to the approval of the board of directors of the joint venture and must be repaid if either the put or call option is exercised in accordance with the joint venture agreement. The rate of interest for the shareholder loan is 2.5 % and the loan is secured by a second priority lien on and secured interest in all assets of Onkyo. |
Other Income (Expense)
Other Income (Expense) | 9 Months Ended |
Nov. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense) | (17) Other Income (Expense) Other income (expense) is comprised of the following: Three months ended Nine months ended 2022 2021 2022 2021 Foreign currency gain (loss), net $ 215 $ ( 382 ) $ ( 3,872 ) $ ( 268 ) Interest income 11 55 20 67 Rental income 230 186 681 547 Miscellaneous 4 ( 2 ) 2 329 Total other, net $ 460 $ ( 143 ) $ ( 3,169 ) $ 675 Foreign currency losses included within Foreign currency gain (loss), net, for the three and nine months ended November 30, 2022 were primarily driven by declines in the Japanese Yen, which impacted the re-measurement of the Company's Onkyo subsidiary intercompany loans and interest payable, which are not of a long-term investment nature. The total foreign currency loss attributable to these re-measurements for the three and nine months ended November 30, 2022 was $ 154 and $ 3,596 , respectively. |
Lease Obligations
Lease Obligations | 9 Months Ended |
Nov. 30, 2022 | |
Leases [Abstract] | |
Lease Obligations | (18) Lease Obligations We account for leases in accordance with ASC 842 “Leases” (“ASC 842”). We determine whether an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration. We have operating leases for office equipment, as well as offices, warehouses, and other facilities used for our operations. We also have finance leases comprised primarily of computer hardware and machinery and equipment. Our leases have remaining lease terms of less than 1 year to 8 years , some of which include renewal options. We consider these renewal options in determining the lease term used to establish our right-of-use assets and lease liabilities when it is determined that it is reasonably certain that the renewal option will be exercised. The Company had no short-term leases during the three and nine months ended November 30, 2022. Refer to Note 7 for supplemental cash flow information related to leases. The components of lease cost for the three and nine months ended November 30, 2022 and 2021 were as follows: Three months ended Nine months ended 2022 2021 2022 2021 Operating lease cost (a) (c) $ 347 $ 324 $ 1,132 $ 1,007 Finance lease cost: Amortization of right of use assets (a) 68 102 214 324 Interest on lease liabilities (b) 1 2 3 9 Total finance lease cost $ 69 $ 104 $ 217 $ 333 (a) Recorded within Selling, General and administrative, Engineering and technical support, and Cost of sales on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) . (b) Recorded within Interest and bank charges on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) . (c) Includes immaterial amounts related to variable rent expense. Supplemental balance sheet information related to leases is as follows: November 30, 2022 February 28, 2022 Operating Leases Operating lease, right of use assets $ 3,905 $ 4,464 Total operating lease right of use assets $ 3,905 $ 4,464 Accrued expenses and other current liabilities $ 1,196 $ 1,255 Operating lease liabilities, less current portion 2,735 3,298 Total operating lease liabilities $ 3,931 $ 4,553 Finance Leases Property, plant, and equipment, gross $ 2,754 $ 2,503 Accumulated depreciation ( 2,422 ) ( 2,208 ) Total finance lease right of use assets $ 332 $ 295 Accrued expenses and other current liabilities $ 242 $ 224 Finance lease liabilities, less current portion 94 78 Total finance lease liabilities $ 336 $ 302 Weighted Average Remaining Lease Term Operating leases 5.1 years 5.5 years Finance leases 2.0 years 1.3 years Weighted Average Discount Rate Operating leases 3.82 % 4.01 % Finance leases 3.51 % 3.87 % Maturities of lease liabilities on November 30 of each of the succeeding years are as follows: Operating Leases Finance Leases 2023 $ 1,301 243 2024 901 94 2025 583 — 2026 392 — 2027 255 — Thereafter 845 — Total lease payments 4,277 337 Less imputed interest 346 1 Total $ 3,931 336 As of November 30, 2022, the Company has not entered into any lease agreements that have not yet commenced. The Company owns and occupies buildings as part of its operations. Certain space within these buildings may, from time to time, be leased to third parties from which the Company earns rental income as lessor. This leased space is recorded within property, plant, and equipment and was not material to the Company's Consolidated Balance Sheets at November 30, 2022 and February 28, 2022. Rental income earned by the Company for the three and nine months ended November 30, 2022 and 2021 was $ 230 and $ 681 , respectively, compared to $ 186 and $ 547 , respectively, and is recorded within Other (expense) income. |
Capital Structure
Capital Structure | 9 Months Ended |
Nov. 30, 2022 | |
Equity [Abstract] | |
Capital Structure | (19) Capital Structure The Company's capital structure is as follows: Shares Authorized Shares Outstanding Security Par November 30, 2022 February 28, 2022 November 30, 2022 February 28, 2022 Voting Liquidation Preferred Stock $ 50.00 50,000 50,000 — — — $ 50 per share Series Preferred Stock $ 0.01 1,500,000 1,500,000 — — — — Class A Common Stock $ 0.01 60,000,000 60,000,000 21,398,005 21,614,629 1 Ratably with Class B Common Stock $ 0.01 10,000,000 10,000,000 2,260,954 2,260,954 10 Ratably with Treasury Stock at cost at cost 3,140,179 2,862,218 N/A N/A N/A During the three and nine months ended November 30, 2022, the Company repurchased 277,961 shares of Class A common stock for an aggregate cost of $ 2,775 . As of November 30, 2022, 2,027,915 shares of the Company’s Class A common stock are authorized to be repurchased in the open market. |
Variable Interest Entity
Variable Interest Entity | 9 Months Ended |
Nov. 30, 2022 | |
Variable Interest Entity [Abstract] | |
Variable Interest Entity | (20) Variable Interest Entity A variable interest entity ("VIE") is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support, or (ii) has equity investors who lack the characteristics of a controlling financial interest. Under ASC 810 – “Consolidation,” an entity that holds a variable interest in a VIE and meets certain requirements would be considered to be the primary beneficiary of the VIE and required to consolidate the VIE in its consolidated financial statements. In order to be considered the primary beneficiary of a VIE, an entity must hold a variable interest in the VIE and have both: • the power to direct the activities that most significantly impact the economic performance of the VIE; and • the right to receive benefits from, or the obligation to absorb losses of, the VIE that could be potentially significant to the VIE. On September 1, 2015, Voxx acquired a majority voting interest in substantially all of the assets and certain specified liabilities of EyeLock, Inc. and EyeLock Corporation, a market leader of iris-based identity authentication solutions, through a newly formed entity, EyeLock LLC. The Company issued EyeLock LLC a promissory note for the purposes of repaying protective advances and funding working capital requirements of the entity. On August 25, 2022, this promissory note was amended and restated to allow EyeLock LLC to borrow up to $ 71,200 . Through March 1, 2019, interest on the outstanding principal of the loan accrued at 10 %. From March 1, 2019 forward, interest accrues at 2.5 %. The amended and restated promissory note is due on September 30, 2023. The outstanding principal balance of this promissory note is convertible at the sole option of Voxx into units of EyeLock LLC. If Voxx chooses not to convert into equity, the outstanding loan principal of the amended and restated promissory note will be repaid at a multiple of 1.50 based on the repayment date. The agreement includes customary events of default and is collateralized by all of the property of EyeLock LLC. We determined that we hold a variable interest in EyeLock LLC as a result of: • our majority voting interest and ownership of substantially all of the assets and certain liabilities of the entity; and • the loan agreement with EyeLock LLC, which has a total outstanding balance of $ 67,599 as of November 30, 2022. We concluded that we became the primary beneficiary of EyeLock LLC on September 1, 2015 in conjunction with the acquisition. This was the first date on which we had the power to direct the activities that most significantly impact the economic performance of the entity because we acquired a majority interest in substantially all of the assets and certain liabilities of EyeLock, Inc. and EyeLock Corporation on this date, as well as obtained a majority voting interest as a result of this transaction. Although we are considered to have control over EyeLock LLC under ASC 810, due to our majority ownership interest, the assets of EyeLock LLC can only be used to satisfy the obligations of EyeLock LLC. As a result of our majority ownership interest in the entity and our primary beneficiary conclusion, we consolidated EyeLock LLC within our consolidated financial statements beginning on September 1, 2015. On April 29, 2021, EyeLock LLC entered into a three-year exclusive distribution agreement (the “Agreement”) with GalvanEyes LLC (“GalvanEyes”), a Florida LLC managed by Beat Kahli, the largest holder of Voxx's Class A Common Shares. The Agreement provides that GalvanEyes will be the exclusive distributor of EyeLock products in the European Union, Switzerland, Puerto Rico, Malaysia, and Singapore, with the exception of any existing customer relationships prior to the Agreement date. GalvanEyes has also been granted exclusive distribution rights in the United States for the residential real estate market and specific U.S. Government agencies, and non-exclusive distribution rights in all other territories and verticals with the Company’s consent. The Agreement also includes a put/call arrangement, whereby GalvanEyes has the right to put the exclusivity back to EyeLock after the initial two-year period for a 20.0 % interest in EyeLock. In turn, EyeLock has the ability to call the exclusivity during the term of the Agreement, based on the occurrence of certain events, which would result in a 20.0 % equity interest given to GalvanEyes. Under the Agreement, in addition to paying for any products purchased, GalvanEyes has agreed to pay EyeLock $ 10,000 in the form of an annual fee, over a two-year period, of up to $ 5,000 per year, with payments on a quarterly basis beginning on September 1, 2021. Any gross profit generated on the sale of EyeLock LLC products by GalvanEyes are deducted from the annual fee. The value of the put/call arrangement was not significant at November 30, 2022 . On November 30, 2022, the Company received a payment in the amount of $ 1,147 for the quarterly installment payment due from GalvanEyes for the three months ended November 30, 2022 . The Company has also recorded a corresponding liability on the accompanying Consolidated Balance Sheets, representing a prepayment made by GalvanEyes of a 20.0 % interest in EyeLock upon exercise of the put option. As of November 30, 2022 and February 28, 2022, the balance of the liability was $ 6,068 and $ 2,451 , respectively. Assets and Liabilities of EyeLock LLC The following table sets forth the carrying values of assets and liabilities of EyeLock LLC that were included on our Consolidated Balance Sheets as of November 30, 2022 and February 28, 2022: November 30, February 28, Assets (unaudited) Current assets: Cash and cash equivalents $ 1,198 $ 25 Accounts receivable, net 379 47 Inventory, net 2,015 2,028 Prepaid expenses and other current assets 67 245 Total current assets 3,659 2,345 Property, plant and equipment, net 12 39 Intangible assets, net 1,854 2,057 Other assets 35 59 Total assets $ 5,560 $ 4,500 Liabilities and Partners' Deficit Current liabilities: Accounts payable $ 854 $ 1,023 Interest payable to VOXX 14,386 13,099 Accrued expenses and other current liabilities 426 766 Due to VOXX 67,599 66,390 Total current liabilities 83,265 81,278 Prepaid ownership interest in EyeLock LLC due to GalvanEyes LLC 6,068 2,451 Other long-term liabilities 1,200 1,200 Total liabilities 90,533 84,929 Commitments and contingencies Partners' deficit: Capital 41,416 41,416 Retained losses ( 126,389 ) ( 121,845 ) Total partners' deficit ( 84,973 ) ( 80,429 ) Total liabilities and partners' deficit $ 5,560 $ 4,500 Revenues and Expenses of EyeLock LLC The following table sets forth the revenues and expenses of EyeLock LLC that were included in our Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended November 30, 2022 and 2021: For the three months For the nine months 2022 2021 2022 2021 Net sales $ 255 $ 355 $ 690 $ 813 Cost of sales 198 240 474 580 Gross profit 57 115 216 233 Operating expenses: Selling 142 167 446 493 General and administrative 374 261 1,158 1,037 Engineering and technical support 344 1,526 1,844 4,654 Total operating expenses 860 1,954 3,448 6,184 Operating loss ( 803 ) ( 1,839 ) ( 3,232 ) ( 5,951 ) Other expense: Interest and bank charges ( 430 ) ( 423 ) ( 1,298 ) ( 1,239 ) Other, net ( 2 ) — ( 14 ) — Total other expense, net ( 432 ) ( 423 ) ( 1,312 ) ( 1,239 ) Loss before income taxes ( 1,235 ) ( 2,262 ) ( 4,544 ) ( 7,190 ) Income tax expense — — — — Net loss $ ( 1,235 ) $ ( 2,262 ) $ ( 4,544 ) $ ( 7,190 ) |
Segment Reporting
Segment Reporting | 9 Months Ended |
Nov. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | (21) Segment Reporting The Company operates in three distinct segments based on our products and our internal organizational structure. The three operating segments, which are also the Company’s reportable segments, are Automotive Electronics, Consumer Electronics, and Biometrics. Our Automotive Electronics segment designs, manufactures, markets and distributes rear-seat entertainment devices, remote start systems, automotive security, vehicle access systems, mobile interface modules, mobile multimedia devices, aftermarket/OE-styled radios, car link-smartphone telematics applications, driver distraction products, collision avoidance systems, automotive power accessories, power lift gates, location-based services, turn signal switches, automotive lighting products, automotive sensing and camera systems, USB ports, cruise control systems, heated seats, and satellite radio products. Our Consumer Electronics segment designs, manufactures, markets and distributes home theater systems, A/V receivers; premium loudspeakers; outdoor speakers; business music systems; streaming music systems; cinema speakers; architectural speakers; wireless and Bluetooth speakers; soundbars; on-ear and in-ear headphones; wired, wireless, and Bluetooth headphones and ear buds; DLNA (Digital Living Network Alliance) compatible devices; T.V. remote controls; karaoke products; personal sound amplifiers; infant/nursery products; as well as A/V connectivity, portable/home charging, reception, and digital consumer products. Our Biometrics segment designs, manufactures, markets, and distributes iris identification and biometric security related products. The accounting principles applied at the consolidated financial statement level are generally the same as those applied at the operating segment level and there are no material intersegment sales. The segments are allocated interest expense, based upon a pre-determined formula, which utilizes a percentage of each operating segment's intercompany balance, which is offset in Corporate/Eliminations. Segment data for each of the Company's segments is presented below: Automotive Consumer Biometrics Corporate/ Total Three Months Ended November 30, 2022 Net sales $ 48,554 $ 94,116 $ 255 $ 130 $ 143,055 Equity in income of equity investees 2,022 — — — 2,022 Interest expense and bank charges 535 2,050 430 ( 1,555 ) 1,460 Depreciation and amortization expense 790 1,497 71 840 3,198 Income (loss) before income taxes (a) (b) 3,124 3,379 ( 1,235 ) ( 2,902 ) 2,366 Three Months Ended November 30, 2021 Net sales $ 61,589 $ 129,733 $ 355 $ 194 $ 191,871 Equity in income of equity investees 2,206 — — — 2,206 Interest expense and bank charges 417 2,076 423 ( 2,186 ) 730 Depreciation and amortization expense 749 1,647 73 937 3,406 Income (loss) before income taxes (b) 4,818 9,998 ( 2,263 ) ( 42,866 ) ( 30,313 ) Nine Months Ended November 30, 2022 Net sales $ 125,357 $ 271,068 $ 690 $ 377 $ 397,492 Equity in income of equity investees 5,373 — — — 5,373 Interest expense and bank charges 1,385 6,035 1,298 ( 5,617 ) 3,101 Depreciation and amortization expense 2,448 5,030 216 2,230 9,924 Income (loss) before income taxes (a) (b) 2,507 ( 649 ) ( 4,544 ) ( 15,514 ) ( 18,200 ) Nine Months Ended November 30, 2021 Net sales $ 150,007 $ 320,805 $ 813 $ 415 $ 472,040 Equity in income of equity investees 6,964 — — — 6,964 Interest expense and bank charges 1,099 5,962 1,239 ( 6,460 ) 1,840 Depreciation and amortization expense 2,287 3,651 224 2,816 8,978 Income (loss) before income taxes (b) 8,974 17,905 ( 7,191 ) ( 48,629 ) ( 28,941 ) (a) Included within Income (loss) before income taxes on Corporate/Eliminations for the three and nine months ended November 30, 2022 are foreign currency losses of $ 154 and $ 3,596 , respectively, attributable to the Company's Onkyo subsidiary related to intercompany transactions and financial statement translation adjustments. (b) Included within Income (loss) before income taxes on Corporate/Eliminations for the three and nine months ended November 30, 2021 is a charge of $ 39,444 recorded for an interim arbitration award unfavorable to the Company (see Note 23). Included within Income (loss) before income taxes on Corporate/Eliminations for the three and nine months ended November 30, 2022 are interest charges of $ 986 and $ 2,598 , respectively, related to the interim arbitration award. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Nov. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | (22) Revenue from Contracts with Customers The Company recognizes revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. We apply the FASB’s guidance on revenue recognition, which requires us to recognize the amount of revenue and consideration that we expect to receive in exchange for goods and services transferred to our customers. To do this, the Company applies the five-step model prescribed by the FASB, which requires us to: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, we satisfy a performance obligation. Within our Automotive Electronics segment, while the majority of the contracts we enter into with Original Equipment Manufacturers (“OEMs”) are long-term supply arrangements, the performance obligations are established by the enforceable contract, which is generally considered to be the purchase order. The purchase orders are of durations less than one year. As such, the Company applies the practical expedient in ASC paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less for which work has not yet been performed. Performance Obligations The Company’s primary source of revenue is derived from the manufacture and distribution of consumer electronic, automotive electronic, and biometric products. Our consumer electronic products are primarily comprised of finished goods sold to retail and commercial customers, consisting of premium audio products and other consumer electronic products. Our automotive electronic products, some of which are manufactured by the Company, are sold both to OEM and aftermarket customers. Our biometric products, primarily consisting of finished goods, are sold to retail and commercial customers. We recognize revenue for sales to our customers when transfer of control of the related good or service has occurred. The majority of our revenue was recognized under the point in time approach for the three and nine months ended November 30, 2022. Certain telematic subscription revenues generated by our Automotive Electronics segment are recognized over time. Contract terms with certain of our OEM customers could result in additional products and services being transferred over time as a result of the customized nature of some of our products, together with contractual provisions in the customer contracts that provide us with an enforceable right to payment for performance completed to date; however, under typical terms, we do not have the right to consideration until the time of shipment from our manufacturing facilities or distribution centers, or until the time of delivery to our customers. If certain contracts in the future provide the Company with this enforceable right of payment, the timing of revenue recognition from products transferred to customers over time may be slightly accelerated compared to our right to consideration at the time of shipment or delivery. Under ASC 606, we are required to present a refund liability and a return asset within the Consolidated Balance Sheets. The changes in the refund liability are reported in Net sales, and the changes in the return asset are reported in Cost of sales in the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss). As of November 30, 2022 and February 28, 2022, the balance of the return asset was $ 2,048 and $ 2,619 , respectively, and the balance of the refund liability was $ 4,264 and $ 5,469 , respectively, and are presented within Prepaid expenses and other current assets and Accrued expenses and other current liabilities, respectively, on the Consolidated Balance Sheets. We warrant our products against certain defects in material and workmanship when used as designed, which primarily range from 30 days to 3 years. We offer limited lifetime warranties on certain products, which limit the customer’s remedy to the repair or replacement of the defective product or part for the designated lifetime of the product, or for the life of the vehicle for the original owner, if it is an automotive product. We do not sell extended warranties. Contract Balances Contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date on contracts with customers. Contract assets are transferred to receivables when the rights become unconditional. Contract liabilities primarily relate to contracts where advance payments or deposits have been received, but performance obligations have not yet been met, and therefore, revenue has not been recognized. The Company had current and non-current contract liability balances totaling $ 4,550 at November 30, 2022 related to telematic subscription services of the Company’s DEI subsidiary. The following table provides a reconciliation of the Company’s contract liabilities as of November 30, 2022: Balance at February 28, 2022 $ 5,412 Subscription payments received 4,723 Revenue recognized ( 5,585 ) Balance at November 30, 2022 $ 4,550 The Company had no contract asset balances at November 30, 2022 or February 28, 2022. Disaggregation of Revenue The Company operates in three reportable segments: Automotive Electronics, Consumer Electronics, and Biometrics. ASC 606 requires further disaggregation of an entity’s revenue. In the following table, the Company's net sales are disaggregated by segment and product type for the three and nine months ended November 30, 2022 and 2021: Three months ended Nine months ended 2022 2021 2022 2021 Automotive Electronics Segment OEM Products $ 19,138 $ 18,536 $ 51,092 $ 49,853 Aftermarket Products 29,416 43,053 74,265 100,154 Total Automotive Segment 48,554 61,589 125,357 150,007 Consumer Electronics Segment Premium Audio Products 73,473 104,877 212,620 252,610 Other Consumer Electronic Products 20,643 24,856 58,448 68,195 Total Consumer Electronics Segment 94,116 129,733 271,068 320,805 Biometrics Segment Biometric Products 255 355 690 813 Total Biometrics Segment 255 355 690 813 Corporate/Eliminations 130 194 377 415 Total Net Sales $ 143,055 $ 191,871 $ 397,492 $ 472,040 |
Contingencies
Contingencies | 9 Months Ended |
Nov. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | (23) Contingencies The Company is currently, and has in the past, been a party to various routine legal proceedings incident to the ordinary course of business. If management determines, based on the underlying facts and circumstances of each matter, that it is probable a loss will result from a litigation contingency and the amount of the loss can be reasonably estimated, the estimated loss is accrued for. The products the Company sells are continually changing as a result of improved technology. As a result, although the Company and its suppliers attempt to avoid infringing known proprietary rights, the Company may be subject to legal proceedings and claims for alleged infringement by patent, trademark, or other intellectual property owners. Any claims relating to the infringement of third-party proprietary rights, even if not meritorious, could result in costly litigation, divert management’s attention and resources, or require the Company to either enter into royalty or license agreements that are not advantageous to the Company, or pay material amounts of damages. In March 2007, the Company entered into a contract with Seaguard Electronics, LLC (“Seaguard”) relating to the Company’s purchase from Seaguard of a stolen vehicle recovery product and back-end services. In August 2018, Seaguard filed a demand for arbitration against the Company with the American Arbitration Association (“AAA”) alleging claims for breach of contract and patent infringement. Seaguard originally sought damages of approximately $ 10,000 and on the seventh day of an eight-day fact witness portion of the arbitration in June 2021, amended its damages demand to $ 40,000 , which was effected by the service of Claimant’s notice dated July 14, 2021. On November 29, 2021, the Arbitrator issued an interim award (the “Interim Award”) with Seaguard prevailing on its breach of contract claim. The Company’s affirmative defenses relating to those claims, however, were denied in their entirety. Seaguard was awarded damages in the amount of $ 39,444 against the Company. On March 3, 2022, the Arbitrator issued a Partial Final Award on Bifurcated Issue in the amount of $ 39,444 , plus $ 798 for its attorneys’ fees and costs. On March 11, 2022, the Arbitrator fixed the schedule of the patent portion of the bifurcated arbitration, with a trial date set for October 16, 2023. The Company has put its suppliers on notice of its indemnification rights with respect to the alleged infringing products. On March 14, 2022, Seaguard filed a Petition in the United States District Court, Central District of California, Western Division, to confirm the Partial Final Award. On April 25, 2022, the Company filed its opposition to Seaguard’s Petition to Confirm and a Counter-Petition to Vacate the Partial Final Award. On May 31, 2022, the Court ordered the matter taken under submission for decision without oral hearing. The court has issued an Order informing the parties that it will rule on the pending Petitions by August 3, 2023. During Fiscal 2022, the Company recorded an accrual for the interim arbitration award in the amount of $ 39,444 . During the three and nine months ended November 30, 2022 , the Company accrued charges of $ 986 and $ 2,958 , respectively, representing interest due on the award when paid, if confirmed and not vacated by the U.S. District Court or an appellate court. At November 30, 2022 and February 28, 2022, the Company had a total accrued balance of $ 42,403 and $ 39,444 , respectively, on the accompanying Consolidated Balance Sheets related to the interim arbitration award. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Nov. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | (24) New Accounting Pronouncements In March 2020 and January 2021, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and ASU No. 2021-01, “Reference Rate Reform: Scope,” respectively. Together, these ASU’s provide optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 provides, among other things, guidance that modifications of contracts within the scope of Topic 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; modifications of contracts within the scope of Topic 842, Leases, should be accounted for as a continuation of the existing contract; and, changes in the critical terms of hedging relationships caused by reference rate reform should not result in the de-designation of the instrument, provided certain criteria are met. ASU 2021-01 clarifies the scope and application of ASU 2020-04 and among other things, permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows. The Company’s exposure to LIBOR rates includes its Credit Facility, as well as its Florida Mortgage and related interest rate swap agreement. These optional expedients and exceptions are effective as of March 12, 2020 through December 31, 2024. Adoption is permitted at any time. The Amended and Restated Credit Agreement provides both the Credit Facility and the Florida Mortgage with a Benchmark Replacement that will replace the LIBOR rate (see Note 16). The Company is currently evaluating the impact this update may have on its consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts With Customers,” which amends the accounting for contract assets acquired and contract liabilities assumed from contracts with customers in business combinations (“acquired contract balances”). The update requires contract assets and contract liabilities from contracts with customers that are acquired in a business combination to be recognized and measured as if the acquirer had originated the original contract. Previously, acquired contract assets and liabilities were measured at fair value. The ASU is effective for fiscal years ending after December 15, 2022. Early adoption is permitted. We do not expect the adoption to have a material impact on our consolidated financial statements. In June 2022, the FASB issued ASU No. 2022-03, "Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions," which clarifies and amends the guidance of measuring the fair value of equity securities subject to contractual restrictions that prohibit the sale of the equity securities. The guidance will be effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years. We do not expect the adoption to have a material impact on our consolidated financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) - Onkyo Home Entertainment Corporation [Member] | 9 Months Ended |
Nov. 30, 2022 | |
Summary of Preliminary Allocation of Purchase Price for Fair Value of Assets Acquired and Liabilities Assumed | The following summarizes the allocation of the purchase price based upon the fair value of the assets acquired at the date of acquisition: September 8, 2021 Measurement September 8, 2021 Purchase price: Cash paid $ 21,989 - 21,989 Assignment of notes and interest receivable 8,417 - 8,417 Fair value of contingent consideration 6,710 1,119 7,829 Total transaction consideration $ 37,116 1,119 38,235 Allocation: Intangible assets $ 26,929 ( 7,905 ) 19,024 Goodwill 10,187 9,024 19,211 Total assets acquired $ 37,116 1,119 38,235 |
Summary of Amounts Assigned to Goodwill and Intangible Assets | The amounts assigned to goodwill and intangible assets for the acquisition are as follows: September 8, 2021 (as adjusted) Amortization Period (Years) Goodwill $ 19,211 N/A Tradenames 12,468 10 Technology 6,556 5 $ 38,235 |
Rollforward of the Redeemable Non-controlling Interest | The following table provides the rollforward of the redeemable non-controlling interest for the nine months ended November 30, 2022: Redeemable Non-controlling Interest Balance at February 28, 2022 $ 511 Net loss attributable to non-controlling interest ( 1,318 ) Comprehensive loss attributable to non-controlling interest ( 86 ) Foreign currency translation ( 39 ) Balance at November 30, 2022 $ ( 932 ) |
Net (Loss) Income Per Common _2
Net (Loss) Income Per Common Share (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Net Income Per Common Share [Abstract] | |
Reconciliation Between Denominator of Basic and Diluted Net Income (Loss) Per Common Share | A reconciliation between the denominator of basic and diluted net income (loss) per common share is as follows: Three months ended Nine months ended 2022 2021 2022 2021 Weighted-average common shares outstanding (basic) 24,389,375 24,289,909 24,408,541 24,279,084 Effect of dilutive securities: Restricted stock units and market stock units 231,984 — — — Weighted-average common shares and potential common shares outstanding (diluted) 24,621,359 24,289,909 24,408,541 24,279,084 |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Investment Securities [Abstract] | |
Summary of Investment Securities | As of November 30, 2022, and February 28, 2022, the Company had the following investments: November 30, 2022 Fair Value Investment Securities Marketable Equity Securities Mutual funds $ 1,167 Total Marketable Equity Securities 1,167 Total Investment Securities $ 1,167 February 28, 2022 Fair Value Investment Securities Marketable Equity Securities Mutual funds $ 1,231 Total Marketable Securities 1,231 Total Investment Securities $ 1,231 |
Fair Value Measurements and D_2
Fair Value Measurements and Derivatives (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured on Recurring Basis | The following table presents financial assets and liabilities measured at fair value on a recurring basis at November 30, 2022: Fair Value Measurements at Total Level 1 Level 2 Level 3 Assets: Cash and money market funds $ 8,477 $ 8,477 $ - $ - Mutual funds 1,167 1,167 - - Derivatives designated for hedging 162 - 162 - Liabilities: Contingent consideration $ 5,818 $ - $ - $ 5,818 The following table presents financial assets and liabilities measured at fair value on a recurring basis at February 28, 2022: Fair Value Measurements at Total Level 1 Level 2 Level 3 Assets Cash and money market funds $ 27,788 $ 27,788 $ - $ - Mutual funds 1,231 1,231 - - Liabilities: Derivatives designated for hedging $ 188 - 188 - Contingent consideration 6,435 - - 6,435 |
Company's Contingent Consideration Balance | The following table provides a rollforward of the Company's contingent consideration balance for the nine months ended November 30, 2022: Balance at February 28, 2022 $ 6,435 Payments made to OHEC ( 606 ) Fair value adjustment 50 Purchase price allocation adjustment 1,051 Foreign currency translation ( 1,112 ) Balance at November 30, 2022 $ 5,818 |
Fair Value, by Balance Sheet Grouping | The following table discloses the fair value as of November 30, 2022 and February 28, 2022 of the Company’s derivative instruments: Derivative Assets and Liabilities Fair Value Account November 30, 2022 February 28, 2022 Designated derivative instruments Interest rate swap agreements Other assets 162 — Other long-term liabilities — ( 188 ) Total derivatives $ 162 $ ( 188 ) |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | Activity related to cash flow hedges recorded during the three and nine months ended November 30, 2022 and 2021 was as follows: Three months ended Nine months ended November 30, 2022 November 30, 2022 Pretax Gain Pretax Loss Pretax Gain Pretax Gain Cash flow hedges Foreign currency contracts $ — $ — $ — $ 63 Interest rate swaps 78 — 350 — Three months ended Nine months ended November 30, 2021 November 30, 2021 Pretax (Loss) Gain Pretax Loss Pretax (Loss) Gain Pretax Loss Cash flow hedges Foreign currency contracts $ 89 $ ( 30 ) $ 233 $ ( 235 ) Interest rate swaps 104 — 141 — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The Company’s accumulated other comprehensive loss consists of the following: Foreign Pension plan Derivatives Total Balance at February 28, 2022 $ ( 16,691 ) $ ( 711 ) $ ( 101 ) $ ( 17,503 ) Other comprehensive (loss) income before reclassifications ( 2,665 ) 53 307 ( 2,305 ) Reclassified from accumulated other comprehensive loss — — ( 43 ) ( 43 ) Net current-period other comprehensive (loss) income ( 2,665 ) 53 264 ( 2,348 ) Balance at November 30, 2022 $ ( 19,356 ) $ ( 658 ) $ 163 $ ( 19,851 ) |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The following is supplemental information relating to the Unaudited Consolidated Statements of Cash Flows: Nine months ended 2022 2021 Non-cash investing and financing activities: Recording of redeemable equity $ ( 85 ) $ 188 Reclassification of stockholders' equity to redeemable equity 531 - Gross issuance of shares 1 1 Change in goodwill due to measurement period adjustments, net 1,051 ( 1,353 ) Additional goodwill from the recognition of the fair value of non-controlling interest in connection with business acquisition - 8,463 Contingent purchase price consideration in connection with business acquisition - 6,710 Right of use assets obtained in exchange for operating lease obligations 899 419 Right of use assets obtained in exchange for finance lease obligations 251 - Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,076 $ 1,018 Operating cash flows from finance leases 3 9 Finance cash flows from finance leases 217 323 Cash paid during the period: Interest (excluding bank charges) $ 1,646 $ 492 Income taxes (net of refunds) 2,061 625 |
Accounting for Stock-Based Co_2
Accounting for Stock-Based Compensation (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Summary of Activity Related to Additional Stock Grants under Employment Agreement and RSU Grants under 2014 Plan | The following table presents a summary of the activity related to the additional stock grants under the Employment Agreement, and RSU grants under the 2014 Plan for the nine months ended November 30, 2022: Number Weighted Unvested award balance at February 28, 2022 354,360 $ 6.30 Granted 46,556 8.28 Vested ( 25,296 ) 4.65 Vested and settled ( 100,000 ) 4.15 Unvested award balance at November 30, 2022 275,620 $ 7.57 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in goodwill by segment is as follows: Automotive Electronics: Amount Beginning balance at March 1, 2022 $ 10,425 Activity during the period — Balance at November 30, 2022 $ 10,425 Gross carrying value at November 30, 2022 $ 10,425 Accumulated impairment charge — Net carrying value at November 30, 2022 $ 10,425 Consumer Electronics: Beginning balance at March 1, 2022 $ 63,895 Adjustments to goodwill acquired 1,051 Foreign currency adjustments ( 2,996 ) Balance at November 30, 2022 $ 61,950 Gross carrying value at November 30, 2022 $ 93,062 Accumulated impairment charge ( 31,112 ) Net carrying value at November 30, 2022 $ 61,950 Total Goodwill, net $ 72,375 The Company's Biometrics segment did no t carry a goodwill balance at November 30, 2022 or February 28, 2022 . |
Schedule of Intangible Assets, Excluding Goodwill | At November 30, 2022, intangible assets consisted of the following: Gross Accumulated Total Net Finite-lived intangible assets: Customer relationships $ 53,626 $ 41,794 $ 11,832 Trademarks/Tradenames 15,409 2,954 12,455 Developed technology 19,331 14,287 5,044 Patents 6,736 5,775 961 License 1,400 1,400 — Contracts 1,556 1,556 — Total finite-lived intangible assets $ 98,058 $ 67,766 30,292 Indefinite-lived intangible assets Trademarks 62,701 Total intangible assets, net $ 92,993 At February 28, 2022, intangible assets consisted of the following: Gross Accumulated Total Net Finite-lived intangible assets: Customer relationships $ 54,138 $ 39,669 $ 14,469 Trademarks/Tradenames 17,466 1,927 15,539 Developed technology 20,413 13,179 7,234 Patents 6,736 5,562 1,174 License 1,400 1,400 — Contracts 1,556 1,556 — Total finite-lived intangible assets $ 101,709 $ 63,293 38,416 Indefinite-lived intangible assets Trademarks 63,034 Total intangible assets, net $ 101,450 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated aggregate amortization expense for all amortizable intangibles for November 30 of each of the succeeding years is as follows: Year Amount 2023 $ 5,865 2024 5,620 2025 5,454 2026 3,770 2027 2,878 |
Equity Investment (Tables)
Equity Investment (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Equity Method Investment, Summarized Financial Information [Abstract] | |
Equity Method Investment, Summarized Financial Information | The following presents summary financial information for ASA. Such summary financial information has been provided herein based upon the individual significance of ASA to the consolidated financial information of the Company. November 30, 2022 February 28, 2022 Current assets $ 50,040 $ 46,202 Non-current assets 6,663 7,382 Liabilities 11,815 10,888 Members' equity 44,888 42,696 Nine months ended 2022 2021 Net sales $ 83,050 $ 91,153 Gross profit 19,852 22,976 Operating income 10,738 13,867 Net income 10,746 13,928 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories by major category are as follows: November 30, February 28, Raw materials $ 24,951 $ 23,904 Work in process 1,120 1,519 Finished goods 166,925 149,499 Inventory $ 192,996 $ 174,922 |
Product Warranties and Produc_2
Product Warranties and Product Repair Costs (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Payables And Accruals Warranties [Abstract] | |
Schedule of Product Warranty Liability | The following table provides a summary of the activity with respect to product warranties and product repair costs. The liability for product warranties is included within Accrued expenses and other current liabilities and the reserve for product repair costs is recorded as a reduction of Inventory on the Consolidated Balance Sheets. Three months ended Nine months ended 2022 2021 2022 2021 Opening balance $ 6,239 $ 4,495 $ 5,622 $ 5,290 Liabilities for warranties accrued during the period 1,732 1,978 5,029 3,215 Liabilities adjusted during acquisition — — — ( 352 ) Warranty claims settled during the period ( 1,286 ) ( 1,016 ) ( 3,966 ) ( 2,696 ) Ending balance $ 6,685 $ 5,457 $ 6,685 $ 5,457 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company has the following financing arrangements: November 30, February 28, Debt Domestic credit facility (a) $ 37,000 $ — Florida mortgage (b) 6,240 6,614 Euro asset-based lending obligation - VOXX Germany (c) — 1,906 Shareholder loan payable to Sharp (d) 3,977 4,718 Total debt 47,217 13,238 Less: current portion of long-term debt 500 2,406 Long-term debt 46,717 10,832 Less: debt issuance costs 857 1,046 Total long-term debt, net of debt issuance costs $ 45,860 $ 9,786 (a) Domestic Credit Facility The Company has a senior secured credit facility (the "Credit Facility") with Wells Fargo Bank, N.A. ("Wells Fargo") that provides for a revolving credit facility with committed availability of up to $ 140,000 . The Credit Facility also includes a $ 30,000 sublimit for letters of credit and a $ 15,000 sublimit for swingline loans. The availability under the revolving credit line within the Credit Facility is subject to a borrowing base, which is based on eligible accounts receivable, eligible inventory and certain real estate, subject to reserves as determined by the lender, and is also limited by amounts outstanding under the Florida Mortgage (see Note 16(b)). The availability under the revolving credit line of the Credit Facility was $ 91,415 as of November 30, 2022. April 19, 2026 ; however, it is subject to acceleration upon the occurrence of an Event of Default as defined in the Second Amended and Restated Credit Agreement (“the Agreement”). The Company may prepay any amounts outstanding at any time, subject to payment of certain breakage and redeployment costs relating to LIBOR Rate Loans. The commitments under the Credit Facility may be irrevocably reduced at any time, without premium or penalty as set forth in the Agreement. 1.75 – 2.25 % ( 5.70 % at November 30, 2022 ). Loans designated as Base Rate loans bear interest at a rate equal to the applicable margin for Base Rate Loans plus a range of 0.75 - 1.25 % as defined in the Agreement and shall not be lower than 1.75 % ( 7.75 % at November 30, 2022). An amendment to the Credit Facility in April 2021 provided for a Benchmark Replacement that will replace the LIBOR rate for all revolver usage. The Benchmark Replacement is subject to the occurrence of a Benchmark Transition Event, as defined in the Second Amended and Restated Credit Agreement and becomes effective after a five-day transition period following the event. Provided that the Company is in a Compliance Period (the period commencing on that day in which Excess Availability is less than 15 % of the Maximum Revolver Amount and ending on a day in which Excess Availability is equal to or greater than 15% for any consecutive 30-day period thereafter) , the Credit Facility requires compliance with a financial covenant calculated as of the last day of each month, consisting of a Fixed Charge Coverage Ratio. The Credit Facility also contains covenants, subject to defined carveouts, that limit the ability of the loan parties and certain of their subsidiaries which are not loan parties to, among other things: (i) incur additional indebtedness; (ii) incur liens; (iii) merge, consolidate or dispose of a substantial portion of their business; (iv) transfer or dispose of assets; (v) change their name, organizational identification number, state or province of organization or organizational identity; (vi) make any material change in their nature of business; (vii) prepay or otherwise acquire indebtedness; (viii) cause any change of control; (ix) make any restricted junior payment; (x) change their fiscal year or method of accounting; (xi) make advances, loans or investments; (xii) enter into or permit any transaction with an affiliate of any borrower or any of their subsidiaries; (xiii) use proceeds for certain items; (xiv) issue or sell any of their stock; or (xv) consign or sell any of their inventory on certain terms. In addition, if excess availability under the Credit Facility were to fall below certain specified levels, as defined in the Agreement, the lenders would have the right to assume dominion and control over the Company's cash. As of November 30, 2022, the Company was not in a Compliance Period. $ 144 and $ 536 , respectively, compared to $ 208 and $ 531 during the three and nine months ended November 30, 2021, respectively. These charges are included within Interest and bank charges on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss). 667 that will be amortized over the remaining term of the facility. The Company accounted for this amendment to the Credit Facility as a modification of debt. Deferred financing costs are included in Long-term debt on the accompanying Consolidated Balance Sheets as a contra-liability balance and are amortized through Interest and bank charges in the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) over the term of the Credit Facility, which expires on April 19, 2026 . During the three and nine months ended November 30, 2022, the Company amortized $ 55 and $ 166 of these costs, respectively, as compared to $ 55 and $ 185 during the three and nine months ended November 30, 2021, respectively. The net unamortized balance of these deferred financing costs as of November 30, 2022 was $ 756 . (b) Florida Mortgage On July 6, 2015, VOXX HQ LLC, the Company’s wholly owned subsidiary, closed on a $ 9,995 industrial development revenue tax exempt bond under a loan agreement in favor of the Orange County Industrial Development Authority (the “Authority”) to finance the construction of the Company's manufacturing facility and executive offices in Lake Nona, Florida. Wells Fargo Bank, N.A. ("Wells Fargo") was the purchaser of the bond and U.S. Bank National Association is the trustee under an Indenture of Trust with the Authority. Voxx borrowed the proceeds of the bond purchase from the Authority during construction as a revolving loan, which converted to a permanent mortgage upon completion of the facility in January 2016 (the "Florida Mortgage"). The Company makes principal and interest payments to Wells Fargo, which began March 1, 2016 and will continue through March of 2026. The Florida Mortgage bears interest at 70 % of 1-month LIBOR plus 1.54 % ( 5.68 % at November 30, 2022) and is secured by a first mortgage on the property, a collateral assignment of leases and rents and a guaranty by the Company. The financial covenants of the Florida Mortgage are as defined in the Company’s Credit Facility with Wells Fargo dated April 26, 2016 and amended in April 2021. The amendment to the Credit Facility in April 2021 provided for a Benchmark Replacement that will replace the LIBOR rate for all revolver usage. The Benchmark Replacement is subject to the occurrence of a Benchmark Transition Event, as defined in the Second Amended and Restated Credit Agreement and becomes effective after a five-day transition period following the event. 332 as a result of obtaining the Florida Mortgage, which are recorded as deferred financing costs and included in Long-term debt as a contra-liability balance on the accompanying Consolidated Balance Sheets and are being amortized through Interest and bank charges in the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) over the ten-year term of the Florida Mortgage. The Company amortized $ 8 and $ 24 of these costs during both the three and nine months ended November 30, 2022 and 2021, respectively. The net unamortized balance of these deferred financing costs as of November 30, 2022 is $ 101 . 3.48 % under the swap agreement (See Note 5). (c) Euro Asset-Based Lending Obligation – VOXX Germany Foreign bank obligations include a Euro Asset-Based Lending ("ABL") credit facility, which has a credit limit of € 8,000 for the Company's subsidiary, VOXX Germany, which expires on July 31, 2023. The rate of interest for the ABL is the three-month Euribor plus 2.30 % ( 4.27 % at November 30, 2022 ). (d) Shareholder Loan Payable to Sharp In conjunction with the capitalization and funding of the Company’s Onkyo joint venture with its partner Sharp, which was created in order to execute the acquisition of certain assets of the home audio/video business of OHEC on September 8, 2021 (see Note 2), Onkyo entered into a loan agreement with the shareholders of the joint venture, PAC and Sharp. The loan balance outstanding at November 30, 2022 represents the portion of the loan payable to Sharp. The loan balance due to PAC eliminates in consolidation. All amounts outstanding under the loan will mature and become payable ten years from the execution date of the acquisition, which is September 8, 2031. The loan may be prepaid subject to the approval of the board of directors of the joint venture and must be repaid if either the put or call option is exercised in accordance with the joint venture agreement. The rate of interest for the shareholder loan is 2.5 % and the loan is secured by a second priority lien on and secured interest in all assets of Onkyo. |
Other Income (Expense) (Tables)
Other Income (Expense) (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | Other income (expense) is comprised of the following: Three months ended Nine months ended 2022 2021 2022 2021 Foreign currency gain (loss), net $ 215 $ ( 382 ) $ ( 3,872 ) $ ( 268 ) Interest income 11 55 20 67 Rental income 230 186 681 547 Miscellaneous 4 ( 2 ) 2 329 Total other, net $ 460 $ ( 143 ) $ ( 3,169 ) $ 675 |
Lease Obligations (Tables)
Lease Obligations (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Leases [Abstract] | |
Schedule of Components of Lease Cost | The components of lease cost for the three and nine months ended November 30, 2022 and 2021 were as follows: Three months ended Nine months ended 2022 2021 2022 2021 Operating lease cost (a) (c) $ 347 $ 324 $ 1,132 $ 1,007 Finance lease cost: Amortization of right of use assets (a) 68 102 214 324 Interest on lease liabilities (b) 1 2 3 9 Total finance lease cost $ 69 $ 104 $ 217 $ 333 (a) Recorded within Selling, General and administrative, Engineering and technical support, and Cost of sales on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) . (b) Recorded within Interest and bank charges on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) . (c) Includes immaterial amounts related to variable rent expense. |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases is as follows: November 30, 2022 February 28, 2022 Operating Leases Operating lease, right of use assets $ 3,905 $ 4,464 Total operating lease right of use assets $ 3,905 $ 4,464 Accrued expenses and other current liabilities $ 1,196 $ 1,255 Operating lease liabilities, less current portion 2,735 3,298 Total operating lease liabilities $ 3,931 $ 4,553 Finance Leases Property, plant, and equipment, gross $ 2,754 $ 2,503 Accumulated depreciation ( 2,422 ) ( 2,208 ) Total finance lease right of use assets $ 332 $ 295 Accrued expenses and other current liabilities $ 242 $ 224 Finance lease liabilities, less current portion 94 78 Total finance lease liabilities $ 336 $ 302 Weighted Average Remaining Lease Term Operating leases 5.1 years 5.5 years Finance leases 2.0 years 1.3 years Weighted Average Discount Rate Operating leases 3.82 % 4.01 % Finance leases 3.51 % 3.87 % |
Schedule of Maturities of Leases Liabilities | Maturities of lease liabilities on November 30 of each of the succeeding years are as follows: Operating Leases Finance Leases 2023 $ 1,301 243 2024 901 94 2025 583 — 2026 392 — 2027 255 — Thereafter 845 — Total lease payments 4,277 337 Less imputed interest 346 1 Total $ 3,931 336 |
Capital Structure (Tables)
Capital Structure (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Equity [Abstract] | |
Schedule of Capital Units | The Company's capital structure is as follows: Shares Authorized Shares Outstanding Security Par November 30, 2022 February 28, 2022 November 30, 2022 February 28, 2022 Voting Liquidation Preferred Stock $ 50.00 50,000 50,000 — — — $ 50 per share Series Preferred Stock $ 0.01 1,500,000 1,500,000 — — — — Class A Common Stock $ 0.01 60,000,000 60,000,000 21,398,005 21,614,629 1 Ratably with Class B Common Stock $ 0.01 10,000,000 10,000,000 2,260,954 2,260,954 10 Ratably with Treasury Stock at cost at cost 3,140,179 2,862,218 N/A N/A N/A |
Variable Interest Entity (Table
Variable Interest Entity (Tables) - Variable Interest Entity, Primary Beneficiary [Member] | 9 Months Ended |
Nov. 30, 2022 | |
Variable Interest Entity [Line Items] | |
Summary of Carrying Values of Assets and Liabilities Included in Consolidated Balance Sheets | The following table sets forth the carrying values of assets and liabilities of EyeLock LLC that were included on our Consolidated Balance Sheets as of November 30, 2022 and February 28, 2022: November 30, February 28, Assets (unaudited) Current assets: Cash and cash equivalents $ 1,198 $ 25 Accounts receivable, net 379 47 Inventory, net 2,015 2,028 Prepaid expenses and other current assets 67 245 Total current assets 3,659 2,345 Property, plant and equipment, net 12 39 Intangible assets, net 1,854 2,057 Other assets 35 59 Total assets $ 5,560 $ 4,500 Liabilities and Partners' Deficit Current liabilities: Accounts payable $ 854 $ 1,023 Interest payable to VOXX 14,386 13,099 Accrued expenses and other current liabilities 426 766 Due to VOXX 67,599 66,390 Total current liabilities 83,265 81,278 Prepaid ownership interest in EyeLock LLC due to GalvanEyes LLC 6,068 2,451 Other long-term liabilities 1,200 1,200 Total liabilities 90,533 84,929 Commitments and contingencies Partners' deficit: Capital 41,416 41,416 Retained losses ( 126,389 ) ( 121,845 ) Total partners' deficit ( 84,973 ) ( 80,429 ) Total liabilities and partners' deficit $ 5,560 $ 4,500 |
Summary of Revenues and Expenses Included in Consolidated Statements of Operations and Comprehensive Income (Loss) | The following table sets forth the revenues and expenses of EyeLock LLC that were included in our Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended November 30, 2022 and 2021: For the three months For the nine months 2022 2021 2022 2021 Net sales $ 255 $ 355 $ 690 $ 813 Cost of sales 198 240 474 580 Gross profit 57 115 216 233 Operating expenses: Selling 142 167 446 493 General and administrative 374 261 1,158 1,037 Engineering and technical support 344 1,526 1,844 4,654 Total operating expenses 860 1,954 3,448 6,184 Operating loss ( 803 ) ( 1,839 ) ( 3,232 ) ( 5,951 ) Other expense: Interest and bank charges ( 430 ) ( 423 ) ( 1,298 ) ( 1,239 ) Other, net ( 2 ) — ( 14 ) — Total other expense, net ( 432 ) ( 423 ) ( 1,312 ) ( 1,239 ) Loss before income taxes ( 1,235 ) ( 2,262 ) ( 4,544 ) ( 7,190 ) Income tax expense — — — — Net loss $ ( 1,235 ) $ ( 2,262 ) $ ( 4,544 ) $ ( 7,190 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segments | Segment data for each of the Company's segments is presented below: Automotive Consumer Biometrics Corporate/ Total Three Months Ended November 30, 2022 Net sales $ 48,554 $ 94,116 $ 255 $ 130 $ 143,055 Equity in income of equity investees 2,022 — — — 2,022 Interest expense and bank charges 535 2,050 430 ( 1,555 ) 1,460 Depreciation and amortization expense 790 1,497 71 840 3,198 Income (loss) before income taxes (a) (b) 3,124 3,379 ( 1,235 ) ( 2,902 ) 2,366 Three Months Ended November 30, 2021 Net sales $ 61,589 $ 129,733 $ 355 $ 194 $ 191,871 Equity in income of equity investees 2,206 — — — 2,206 Interest expense and bank charges 417 2,076 423 ( 2,186 ) 730 Depreciation and amortization expense 749 1,647 73 937 3,406 Income (loss) before income taxes (b) 4,818 9,998 ( 2,263 ) ( 42,866 ) ( 30,313 ) Nine Months Ended November 30, 2022 Net sales $ 125,357 $ 271,068 $ 690 $ 377 $ 397,492 Equity in income of equity investees 5,373 — — — 5,373 Interest expense and bank charges 1,385 6,035 1,298 ( 5,617 ) 3,101 Depreciation and amortization expense 2,448 5,030 216 2,230 9,924 Income (loss) before income taxes (a) (b) 2,507 ( 649 ) ( 4,544 ) ( 15,514 ) ( 18,200 ) Nine Months Ended November 30, 2021 Net sales $ 150,007 $ 320,805 $ 813 $ 415 $ 472,040 Equity in income of equity investees 6,964 — — — 6,964 Interest expense and bank charges 1,099 5,962 1,239 ( 6,460 ) 1,840 Depreciation and amortization expense 2,287 3,651 224 2,816 8,978 Income (loss) before income taxes (b) 8,974 17,905 ( 7,191 ) ( 48,629 ) ( 28,941 ) (a) Included within Income (loss) before income taxes on Corporate/Eliminations for the three and nine months ended November 30, 2022 are foreign currency losses of $ 154 and $ 3,596 , respectively, attributable to the Company's Onkyo subsidiary related to intercompany transactions and financial statement translation adjustments. (b) Included within Income (loss) before income taxes on Corporate/Eliminations for the three and nine months ended November 30, 2021 is a charge of $ 39,444 recorded for an interim arbitration award unfavorable to the Company (see Note 23). Included within Income (loss) before income taxes on Corporate/Eliminations for the three and nine months ended November 30, 2022 are interest charges of $ 986 and $ 2,598 , respectively, related to the interim arbitration award. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Reconciliation of Contract Liabilities | The following table provides a reconciliation of the Company’s contract liabilities as of November 30, 2022: Balance at February 28, 2022 $ 5,412 Subscription payments received 4,723 Revenue recognized ( 5,585 ) Balance at November 30, 2022 $ 4,550 |
Disaggregation of Revenue | The Company operates in three reportable segments: Automotive Electronics, Consumer Electronics, and Biometrics. ASC 606 requires further disaggregation of an entity’s revenue. In the following table, the Company's net sales are disaggregated by segment and product type for the three and nine months ended November 30, 2022 and 2021: Three months ended Nine months ended 2022 2021 2022 2021 Automotive Electronics Segment OEM Products $ 19,138 $ 18,536 $ 51,092 $ 49,853 Aftermarket Products 29,416 43,053 74,265 100,154 Total Automotive Segment 48,554 61,589 125,357 150,007 Consumer Electronics Segment Premium Audio Products 73,473 104,877 212,620 252,610 Other Consumer Electronic Products 20,643 24,856 58,448 68,195 Total Consumer Electronics Segment 94,116 129,733 271,068 320,805 Biometrics Segment Biometric Products 255 355 690 813 Total Biometrics Segment 255 355 690 813 Corporate/Eliminations 130 194 377 415 Total Net Sales $ 143,055 $ 191,871 $ 397,492 $ 472,040 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) | 9 Months Ended |
Nov. 30, 2022 Segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 08, 2021 | Nov. 30, 2022 | Nov. 30, 2022 | Nov. 30, 2021 | Feb. 28, 2022 | May 26, 2021 | |
Business Acquisition [Line Items] | ||||||
Adjustments to goodwill due to measurement period adjustments, net | $ 1,051 | $ (1,353) | ||||
Onkyo Home Entertainment Corporation [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash purchase price | $ 21,989 | |||||
Percentage of net sales from consolidated net sales | 2.10% | 2% | ||||
Adjustments to goodwill due to measurement period adjustments, net | $ 9,024 | $ 9,024 | $ 9,024 | $ 9,024 | ||
Contingent consideration payable, percentage of total price of certain future products purchases | 2% | |||||
Onkyo Home Entertainment Corporation [Member] | PAC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, percentage of interests acquired | 77.20% | |||||
Voting interest in joint venture | 85.10% | |||||
Onkyo Home Entertainment Corporation [Member] | Sharp Corporation [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, percentage of interests acquired | 22.80% | |||||
Voting interest in joint venture | 14.90% |
Acquisitions - Summary of Alloc
Acquisitions - Summary of Allocation of Purchase Price Based Upon Fair Value of Assets Acquired (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 08, 2021 | Nov. 30, 2022 | Nov. 30, 2022 | Nov. 30, 2021 | Feb. 28, 2022 | |
Business Acquisition [Line Items] | |||||
Goodwill, measurement period adjustments | $ 1,051 | $ (1,353) | |||
Allocation: | |||||
Goodwill | $ 72,375 | 72,375 | $ 74,320 | ||
Onkyo Home Entertainment Corporation [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash paid | $ 21,989 | ||||
Assignment of notes and interest receivable | 8,417 | ||||
Fair value of contingent consideration | 6,710 | ||||
Total transaction consideration | 37,116 | ||||
Intangible assets | 26,929 | ||||
Goodwill | 10,187 | ||||
Total assets acquired | 37,116 | ||||
Fair value of contingent consideration, measurement period adjustments | 1,119 | ||||
Total transaction consideration, measurement period adjustments | 1,119 | ||||
Intangible assets, measurement period adjustments | (7,905) | ||||
Goodwill, measurement period adjustments | 9,024 | $ 9,024 | $ 9,024 | $ 9,024 | |
Total assets acquired, measurement period adjustments | 1,119 | ||||
Purchase price: | |||||
Cash purchase price | 21,989 | ||||
Assignment of notes and interest receivable | 8,417 | ||||
Fair value of contingent consideration | 7,829 | ||||
Total transaction consideration | 38,235 | ||||
Allocation: | |||||
Intangible assets | 19,024 | ||||
Goodwill | 19,211 | ||||
Total assets acquired | $ 38,235 |
Acquisitions - Summary of Amoun
Acquisitions - Summary of Amounts Assigned to Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 08, 2021 | Nov. 30, 2022 | Feb. 28, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 72,375 | $ 74,320 | |
Onkyo Home Entertainment Corporation [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 19,211 | ||
Intangible assets | 38,235 | ||
Goodwill [Member] | Onkyo Home Entertainment Corporation [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | 19,211 | ||
Trademarks [Member] | Onkyo Home Entertainment Corporation [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 12,468 | ||
Intangible assets amortization period | 10 years | ||
Technology [Member] | Onkyo Home Entertainment Corporation [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 6,556 | ||
Intangible assets amortization period | 5 years |
Acquisitions - Rollforward of t
Acquisitions - Rollforward of the Redeemable Non-controlling Interest (Details) $ in Thousands | 9 Months Ended |
Nov. 30, 2022 USD ($) | |
Business Acquisition [Line Items] | |
Balance at February 28, 2022 | $ 511 |
Balance at November 30, 2022 | (932) |
Onkyo Home Entertainment Corporation [Member] | |
Business Acquisition [Line Items] | |
Balance at February 28, 2022 | 511 |
Net loss attributable to non-controlling interest | (1,318) |
Comprehensive loss attributable to non-controlling interest | (86) |
Foreign currency translation | (39) |
Balance at November 30, 2022 | $ (932) |
Net (Loss) Income Per Common _3
Net (Loss) Income Per Common Share - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Net Income Per Common Share [Abstract] | ||||
Redemption value adjustment of redeemable non-controlling interest | $ 0 | $ 0 | ||
Antidilutive securities excluded from computation of earnings per share, amount | 9,306 | 650,325 | 379,113 | 695,589 |
Net (Loss) Income Per Common _4
Net (Loss) Income Per Common Share - Reconciliation Between Denominator of Basic and Diluted Net Income (Loss) Per Common Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Net Income Per Common Share [Abstract] | ||||
Weighted-average common shares outstanding (basic) | 24,389,375 | 24,289,909 | 24,408,541 | 24,279,084 |
Restricted stock units and market stock units | 231,984 | 0 | 0 | 0 |
Weighted-average common shares and potential common shares outstanding (diluted) | 24,621,359 | 24,289,909 | 24,408,541 | 24,279,084 |
Investment Securities - Summary
Investment Securities - Summary of Investment Securities (Details) - USD ($) $ in Thousands | Nov. 30, 2022 | Feb. 28, 2022 |
Gain (Loss) on Securities [Line Items] | ||
Marketable Equity Securities | $ 1,167 | $ 1,231 |
Investments, Fair Value Disclosure | 1,167 | 1,231 |
Mutual Funds [Member] | ||
Gain (Loss) on Securities [Line Items] | ||
Marketable Equity Securities | 1,167 | 1,231 |
Investments, Fair Value Disclosure | $ 1,167 | $ 1,231 |
Fair Value Measurements and D_3
Fair Value Measurements and Derivatives - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |
Nov. 30, 2022 USD ($) Derivative | Nov. 30, 2022 USD ($) Derivative | Jul. 20, 2015 | |
Derivative Instruments Gain Loss [Line Items] | |||
Derivative, Fixed Interest Rate | 3.48% | ||
Foreign currency contracts settled date | Feb. 28, 2022 | ||
Amount excluded from assessment of hedge effectiveness | $ 0 | $ 0 | |
Foreign currency contracts terminated | Derivative | 0 | 0 | |
Interest Rate Swap [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Current outstanding notional value | $ 6,240,000 | $ 6,240,000 |
Fair Value Measurements and D_4
Fair Value Measurements and Derivatives - Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Nov. 30, 2022 | Feb. 28, 2022 |
Assets: | ||
Cash and money market funds | $ 8,477 | $ 27,788 |
Investments, Fair Value Disclosure | 1,167 | 1,231 |
Derivatives designated for hedging | 162 | |
Liabilities: | ||
Derivatives designated for hedging | 188 | |
Contingent consideration | 5,818 | 6,435 |
Mutual Funds [Member] | ||
Assets: | ||
Investments, Fair Value Disclosure | 1,167 | 1,231 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Cash and money market funds | 8,477 | 27,788 |
Liabilities: | ||
Contingent consideration | 0 | |
Fair Value, Inputs, Level 1 [Member] | Mutual Funds [Member] | ||
Assets: | ||
Investments, Fair Value Disclosure | 1,167 | 1,231 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Derivatives designated for hedging | 162 | |
Liabilities: | ||
Derivatives designated for hedging | 188 | |
Contingent consideration | 0 | |
Level 3 [Member] | ||
Liabilities: | ||
Contingent consideration | $ 5,818 | $ 6,435 |
Fair Value Measurements and D_5
Fair Value Measurements and Derivatives - Company's Contingent Consideration Balance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Foreign currency translation | $ 215 | $ (382) | $ (3,872) | $ (268) |
Contingent Consideration | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Beginning Balance | 6,435 | |||
Payments made to OHEC | (606) | |||
Fair value adjustment | 50 | |||
Purchase price allocation adjustment | 1,051 | |||
Foreign currency translation | (1,112) | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance | $ 5,818 | $ 5,818 |
Fair Value Measurements and D_6
Fair Value Measurements and Derivatives - Fair Value, by Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Nov. 30, 2022 | Feb. 28, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Assets and Liabilities | $ 162 | $ (188) |
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other assets | 162 | |
Other long-term liabilities | $ 0 | $ (188) |
Fair Value Measurements and D_7
Fair Value Measurements and Derivatives - Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) (Details) - Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Foreign Exchange Forward [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | $ 0 | $ 89 | $ 0 | $ 233 |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 0 | (30) | 63 | (235) |
Interest Rate Swap [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 78 | $ 104 | 350 | $ 141 |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ 0 | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Nov. 30, 2022 | Aug. 31, 2022 | May 31, 2022 | Nov. 30, 2021 | Aug. 31, 2021 | May 31, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Stockholders equity, beginning of period | $ 320,331 | $ 333,316 | $ 346,102 | $ 374,829 | $ 377,772 | $ 376,069 | $ 346,102 | $ 376,069 |
Other comprehensive income (loss), net of tax | 1,016 | (1,989) | (1,375) | (1,615) | (1,149) | 492 | (2,348) | (2,272) |
Stockholders equity, end of period | 325,443 | 320,331 | 333,316 | 344,329 | 374,829 | 377,772 | 325,443 | 344,329 |
Foreign Currency Translation Losses [Member] | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Stockholders equity, beginning of period | (16,691) | (16,691) | ||||||
Other comprehensive (loss) income before reclassifications | (2,665) | |||||||
Reclassified from accumulated other comprehensive loss | 0 | |||||||
Other comprehensive income (loss), net of tax | (2,665) | |||||||
Stockholders equity, end of period | (19,356) | (19,356) | ||||||
Pension Plan Adjustments, Net of Tax [Member] | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Stockholders equity, beginning of period | (711) | (711) | ||||||
Other comprehensive (loss) income before reclassifications | 53 | |||||||
Reclassified from accumulated other comprehensive loss | 0 | |||||||
Other comprehensive income (loss), net of tax | 53 | |||||||
Stockholders equity, end of period | (658) | (658) | ||||||
Derivatives Designated in a Hedging Relationship, Net of Tax [Member] | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Stockholders equity, beginning of period | (101) | (101) | ||||||
Other comprehensive (loss) income before reclassifications | 307 | |||||||
Reclassified from accumulated other comprehensive loss | (43) | |||||||
Other comprehensive income (loss), net of tax | 264 | |||||||
Stockholders equity, end of period | 163 | 163 | ||||||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Stockholders equity, beginning of period | (20,867) | (18,878) | (17,503) | (15,634) | (14,485) | (14,977) | (17,503) | (14,977) |
Other comprehensive (loss) income before reclassifications | (2,305) | |||||||
Reclassified from accumulated other comprehensive loss | (43) | |||||||
Other comprehensive income (loss), net of tax | 1,016 | (1,989) | (1,375) | (1,615) | (1,149) | 492 | (2,348) | |
Stockholders equity, end of period | $ (19,851) | $ (20,867) | $ (18,878) | $ (17,249) | $ (15,634) | $ (14,485) | $ (19,851) | $ (17,249) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Nov. 30, 2022 | Nov. 30, 2022 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other Comprehensive (Loss) Income, Cash Flow Hedge, Gain (Loss), after Reclassification, Tax | $ 0 | $ 19 |
Other Comprehensive (Loss) Income, Defined Benefit Plan, after Reclassification Adjustment, Tax | $ 0 | 0 |
Foreign Currency Translation Losses [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive (loss) income before reclassifications | (2,665) | |
Foreign Currency Translation Losses [Member] | Intercompany Transactions Of Long Term Investment Nature [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive (loss) income before reclassifications | 1,648 | |
Foreign Currency Translation Losses [Member] | Translating Financial Statements [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive (loss) income before reclassifications | $ (4,313) |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Schedule of Cash Flow, Supplemental Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
May 31, 2022 | Nov. 30, 2022 | Nov. 30, 2021 | |
Supplemental Cash Flow Information [Abstract] | |||
Recording of redeemable equity | $ (85) | $ 188 | |
Reclassification of stockholders' equity to redeemable equity | $ 33 | 531 | 0 |
Gross issuance of shares | 1 | 1 | |
Change in goodwill due to measurement period adjustments, net | 1,051 | (1,353) | |
Additional goodwill from the recognition of the fair value of non-controlling interest in connection with business acquisition | 0 | 8,463 | |
Contingent purchase price consideration in connection with business acquisition | 0 | 6,710 | |
Right of use assets obtained in exchange for operating lease obligations | 899 | 419 | |
Right of use assets obtained in exchange for finance lease obligations | 251 | 0 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | 1,076 | 1,018 | |
Operating cash flows from finance leases | 3 | 9 | |
Finance cash flows from finance leases | 217 | 323 | |
Cash paid during the period: | |||
Interest (excluding bank charges) | 1,646 | 492 | |
Income taxes (net of refunds) | $ 2,061 | $ 625 |
Accounting for Stock-Based Co_3
Accounting for Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Mar. 01, 2022 | Mar. 01, 2021 | Mar. 01, 2020 | Jan. 31, 2020 | Jul. 08, 2019 | Jul. 31, 2022 | Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | Feb. 28, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Stock based compensation expense | $ 407 | $ 694 | |||||||||
Stock grants vested | 100,000 | 100,000 | 100,000 | ||||||||
Shares withheld for taxes | 38,663 | 39,347 | |||||||||
Patrick M. Lavelle [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Annual salary and cash bonus | $ 1,000 | ||||||||||
Stock based compensation expense | $ 23 | $ 60 | 69 | $ 182 | |||||||
Grant of market stock units maximum amount | $ 5,000 | ||||||||||
Maximum average stock price of grant market stock units | $ 5.49 | ||||||||||
Maximum increase amount of market stock units award | $ 5,000 | ||||||||||
Maximum threshold share price increases in value of award | $ 15 | ||||||||||
Estimated Maximum threshold share increases in value of award | 333,333 | ||||||||||
Share-Based compensation arrangement by share based payment award grant of market stock units, vesting percentage | 80% | ||||||||||
Share-based compensation arrangement by share based payment award grant of market stock units vesting amount | $ 4,000 | ||||||||||
Percentage of market stock units, remain outstanding | 20% | ||||||||||
Patrick M. Lavelle [Member] | Common Class A [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Share-based Compensation arrangement by share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value | $ 4.15 | $ 4.15 | |||||||||
Award vesting period | 5 years | ||||||||||
Grant of initial shares under employment agreement | 61,337 | 60,653 | 100,000 | ||||||||
Stock based compensation expense | 0 | $ 40 | $ 0 | $ 118 | |||||||
Patrick M. Lavelle [Member] | Common Class A [Member] | March 1, 2021 [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Additional grant of shares under employment agreement | 100,000 | ||||||||||
Patrick M. Lavelle [Member] | Common Class A [Member] | March 1, 2020 [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Additional grant of shares under employment agreement | 100,000 | ||||||||||
Patrick M. Lavelle [Member] | Common Class A [Member] | March 1, 2022 [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Additional grant of shares under employment agreement | 100,000 | ||||||||||
Restricted Stock [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | 145 | $ 221 | 407 | $ 694 | |||||||
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized | $ 1,200 | $ 1,200 | |||||||||
2014 Plan [Member] | Restricted Stock Units [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Share-based compensation arrangement by share-based payment award, expiration period | 3 years | ||||||||||
Share-based payment award vesting age of employee | 65 years | ||||||||||
Share-based Compensation arrangement by share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value | $ 8.28 | ||||||||||
Stock grants vested | 25,296 | ||||||||||
Vested and unsettled awards, weighted average fair value | $ 4.65 | ||||||||||
2014 Plan [Member] | Restricted Stock Units [Member] | Employees [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Stock issued during period, shares, restricted stock award, gross | 46,556 | ||||||||||
Share-based Compensation arrangement by share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value | $ 8.28 | ||||||||||
2014 Plan [Member] | Restricted Stock Units [Member] | Minimum [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Share-based payment award vesting required service period | 10 years | ||||||||||
2014 Plan [Member] | Unsettled Stock Grants and RSU Awards [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Stock grants vested | 501,505 | ||||||||||
Vested and unsettled awards, weighted average fair value | $ 6.79 | ||||||||||
2012 Equity Incentive Plan [Member] | Patrick M. Lavelle [Member] | Common Class A [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Grant of initial shares under employment agreement | 200,000 |
Accounting for Stock-Based Co_4
Accounting for Stock-Based Compensation - Summary of Activity Related to Additional Stock Grants under Employment Agreement and RSU Grants under 2014 Plan (Details) - $ / shares | 9 Months Ended | |||
Mar. 01, 2022 | Mar. 01, 2021 | Mar. 01, 2020 | Nov. 30, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (100,000) | (100,000) | (100,000) | |
2014 Plan [Member] | Restricted Stock Units [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 354,360 | 354,360 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 46,556 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (25,296) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested and Settled in Period | (100,000) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 275,620 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 6.30 | $ 6.30 | ||
Share-based Compensation arrangement by share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value | 8.28 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | 4.65 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested and Settled Period, Weighted Average Grant Date Fair Value | 4.15 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 7.57 |
Supply Chain Financing - Additi
Supply Chain Financing - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 USD ($) Subsidiary | Nov. 30, 2021 USD ($) Subsidiary | Nov. 30, 2022 USD ($) Subsidiary | Nov. 30, 2021 USD ($) Subsidiary | |
Supply Chain Financing [Abstract] | ||||
Proceeds from sale and collection of receivables | $ | $ 27,350 | $ 20,681 | $ 69,270 | $ 62,136 |
Number of subsidiaries participated in sale of receivable balances | Subsidiary | 2 | 1 | 2 | 1 |
Research and Development - Addi
Research and Development - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Research and Development [Abstract] | ||||
Research and development expense | $ 1,793 | $ 3,986 | $ 6,891 | $ 9,931 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Nov. 30, 2022 USD ($) | |
Goodwill [Line Items] | |
Goodwill | $ 74,320 |
Goodwill | 72,375 |
Automotive Electronics [Member] | |
Goodwill [Line Items] | |
Goodwill | 10,425 |
Activity during the period | 0 |
Goodwill | 10,425 |
Goodwill, Gross | 10,425 |
Goodwill, Impaired, Accumulated Impairment Loss | 0 |
Consumer Electronics [Member] | |
Goodwill [Line Items] | |
Goodwill | 63,895 |
Adjustments to goodwill acquired | 1,051 |
Goodwill, Foreign currency adjustments | (2,996) |
Goodwill | 61,950 |
Goodwill, Gross | 93,062 |
Goodwill, Impaired, Accumulated Impairment Loss | $ (31,112) |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | Feb. 28, 2022 | |
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | $ 72,375,000 | $ 72,375,000 | $ 74,320,000 | ||
Amortization of Intangible Assets | 1,629,000 | $ 2,017,000 | 5,217,000 | $ 4,803,000 | |
Biometrics [Member] | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets, Excluding Goodwill (Details) - USD ($) $ in Thousands | Nov. 30, 2022 | Feb. 28, 2022 |
Goodwill and Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 98,058 | $ 101,709 |
Finite-Lived Intangible Assets, Accumulated Amortization | 67,766 | 63,293 |
Finite-Lived Intangible Assets, Net | 30,292 | 38,416 |
Intangible assets, net | 92,993 | 101,450 |
Trademarks [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 62,701 | 63,034 |
Customer Relationships [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 53,626 | 54,138 |
Finite-Lived Intangible Assets, Accumulated Amortization | 41,794 | 39,669 |
Finite-Lived Intangible Assets, Net | 11,832 | 14,469 |
Trademarks/Tradenames [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 15,409 | 17,466 |
Finite-Lived Intangible Assets, Accumulated Amortization | 2,954 | 1,927 |
Finite-Lived Intangible Assets, Net | 12,455 | 15,539 |
Developed Technology [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 19,331 | 20,413 |
Finite-Lived Intangible Assets, Accumulated Amortization | 14,287 | 13,179 |
Finite-Lived Intangible Assets, Net | 5,044 | 7,234 |
Patents [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 6,736 | 6,736 |
Finite-Lived Intangible Assets, Accumulated Amortization | 5,775 | 5,562 |
Finite-Lived Intangible Assets, Net | 961 | 1,174 |
License [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 1,400 | 1,400 |
Finite-Lived Intangible Assets, Accumulated Amortization | 1,400 | 1,400 |
Finite-Lived Intangible Assets, Net | 0 | 0 |
Contracts [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 1,556 | 1,556 |
Finite-Lived Intangible Assets, Accumulated Amortization | 1,556 | 1,556 |
Finite-Lived Intangible Assets, Net | $ 0 | $ 0 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Thousands | Nov. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 5,865 |
2024 | 5,620 |
2025 | 5,454 |
2026 | 3,770 |
2027 | $ 2,878 |
Equity Investment - Additional
Equity Investment - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | Feb. 28, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||||
Income (loss) from equity method investments | $ 2,022 | $ 2,206 | $ 5,373 | $ 6,964 | |
ASA Electronics, LLC [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investment, ownership percentage | 50% | 50% | 50% |
Equity Investment - Equity Meth
Equity Investment - Equity Method Investment, Summarized Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | Aug. 31, 2022 | May 31, 2022 | Feb. 28, 2022 | Aug. 31, 2021 | May 31, 2021 | Feb. 28, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||||||||||
Equity Method Investment, Summarized Financial Information, Current Assets | $ 321,833 | $ 321,833 | $ 330,772 | |||||||
Equity Method Investment, Summarized Financial Information, Current Liabilities | 167,465 | 167,465 | 204,016 | |||||||
Equity Method Investment Summarized Financial Information, Equity | 325,443 | $ 344,329 | 325,443 | $ 344,329 | $ 320,331 | $ 333,316 | 346,102 | $ 374,829 | $ 377,772 | $ 376,069 |
Equity Method Investment, Summarized Financial Information, Gross Profit (Loss) | 37,137 | 51,704 | 99,633 | 125,585 | ||||||
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | 6,354 | $ (29,672) | (12,412) | (28,567) | ||||||
ASA Electronics, LLC [Member] | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Equity Method Investment, Summarized Financial Information, Current Assets | 50,040 | 50,040 | 46,202 | |||||||
Equity Method Investment, Summarized Financial Information, Noncurrent Assets | 6,663 | 6,663 | 7,382 | |||||||
Equity Method Investment, Summarized Financial Information, Current Liabilities | 11,815 | 11,815 | 10,888 | |||||||
Equity Method Investment Summarized Financial Information, Equity | $ 44,888 | 44,888 | $ 42,696 | |||||||
Equity Method Investment, Summarized Financial Information, Revenue | 83,050 | 91,153 | ||||||||
Equity Method Investment, Summarized Financial Information, Gross Profit (Loss) | 19,852 | 22,976 | ||||||||
Equity Method Investment, Summarized Financial Information, Income (Loss) from Continuing Operations | 10,738 | 13,867 | ||||||||
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | $ 10,746 | $ 13,928 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | Feb. 28, 2022 | |
Income Tax Disclosure [Abstract] | |||||
Income tax benefit | $ (3,988) | $ (641) | $ (5,788) | $ (374) | |
Unrecognized tax benefits, period increase (decrease) | $ 141 | $ 175 | $ 313 | $ 31 | |
Effective income tax rate, continuing operations | (168.60%) | (2.10%) | (31.80%) | (1.30%) | |
Income (loss) from continuing operations before income taxes, noncontrolling interest | $ 2,366 | $ (30,313) | $ (18,200) | $ (28,941) | |
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 21% | 21% | 21% | 21% | |
Liability for uncertainty in income taxes, noncurrent | $ 929 | $ 929 | $ 1,083 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory, Current (Details) - USD ($) $ in Thousands | Nov. 30, 2022 | Feb. 28, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 24,951 | $ 23,904 |
Work in process | 1,120 | 1,519 |
Finished goods | 166,925 | 149,499 |
Inventory | $ 192,996 | $ 174,922 |
Product Warranties and Produc_3
Product Warranties and Product Repair Costs - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Payables And Accruals Warranties [Abstract] | ||||
Opening balance | $ 6,239 | $ 4,495 | $ 5,622 | $ 5,290 |
Liabilities for warranties accrued during the period | 1,732 | 1,978 | 5,029 | 3,215 |
Liabilities adjusted during acquisition | (352) | |||
Warranty claims settled during the period | (1,286) | (1,016) | (3,966) | (2,696) |
Ending balance | $ 6,685 | $ 5,457 | $ 6,685 | $ 5,457 |
Financing Arrangements - Schedu
Financing Arrangements - Schedule of Debt (Details) - USD ($) $ in Thousands | Nov. 30, 2022 | Feb. 28, 2022 | |
Debt, Long-term and Short-term, Combined Amount | $ 47,217 | $ 13,238 | |
Less: current portion of long-term debt | 500 | 2,406 | |
Long-term debt | 46,717 | 10,832 | |
Less: debt issuance costs | 857 | 1,046 | |
Total long-term debt, net of debt issuance costs | 45,860 | 9,786 | |
Mortgages [Member] | |||
Debt, Long-term and Short-term, Combined Amount | [1] | 6,240 | 6,614 |
Less: debt issuance costs | 101 | ||
Revolving Credit Facility [Member] | |||
Debt, Long-term and Short-term, Combined Amount | [2] | 37,000 | |
Audiovox Germany [Member] | Foreign Line of Credit [Member] | |||
Debt, Long-term and Short-term, Combined Amount | [3] | 1,906 | |
Sharp Corporation [Member] | Shareholder Loan Payable [Member] | |||
Debt, Long-term and Short-term, Combined Amount | [4] | $ 3,977 | $ 4,718 |
[1] Florida Mortgage On July 6, 2015, VOXX HQ LLC, the Company’s wholly owned subsidiary, closed on a $ 9,995 industrial development revenue tax exempt bond under a loan agreement in favor of the Orange County Industrial Development Authority (the “Authority”) to finance the construction of the Company's manufacturing facility and executive offices in Lake Nona, Florida. Wells Fargo Bank, N.A. ("Wells Fargo") was the purchaser of the bond and U.S. Bank National Association is the trustee under an Indenture of Trust with the Authority. Voxx borrowed the proceeds of the bond purchase from the Authority during construction as a revolving loan, which converted to a permanent mortgage upon completion of the facility in January 2016 (the "Florida Mortgage"). The Company makes principal and interest payments to Wells Fargo, which began March 1, 2016 and will continue through March of 2026. The Florida Mortgage bears interest at 70 % of 1-month LIBOR plus 1.54 % ( 5.68 % at November 30, 2022) and is secured by a first mortgage on the property, a collateral assignment of leases and rents and a guaranty by the Company. The financial covenants of the Florida Mortgage are as defined in the Company’s Credit Facility with Wells Fargo dated April 26, 2016 and amended in April 2021. The amendment to the Credit Facility in April 2021 provided for a Benchmark Replacement that will replace the LIBOR rate for all revolver usage. The Benchmark Replacement is subject to the occurrence of a Benchmark Transition Event, as defined in the Second Amended and Restated Credit Agreement and becomes effective after a five-day transition period following the event. 332 as a result of obtaining the Florida Mortgage, which are recorded as deferred financing costs and included in Long-term debt as a contra-liability balance on the accompanying Consolidated Balance Sheets and are being amortized through Interest and bank charges in the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) over the ten-year term of the Florida Mortgage. The Company amortized $ 8 and $ 24 of these costs during both the three and nine months ended November 30, 2022 and 2021, respectively. The net unamortized balance of these deferred financing costs as of November 30, 2022 is $ 101 . 3.48 % under the swap agreement (See Note 5). Domestic Credit Facility The Company has a senior secured credit facility (the "Credit Facility") with Wells Fargo Bank, N.A. ("Wells Fargo") that provides for a revolving credit facility with committed availability of up to $ 140,000 . The Credit Facility also includes a $ 30,000 sublimit for letters of credit and a $ 15,000 sublimit for swingline loans. The availability under the revolving credit line within the Credit Facility is subject to a borrowing base, which is based on eligible accounts receivable, eligible inventory and certain real estate, subject to reserves as determined by the lender, and is also limited by amounts outstanding under the Florida Mortgage (see Note 16(b)). The availability under the revolving credit line of the Credit Facility was $ 91,415 as of November 30, 2022. April 19, 2026 ; however, it is subject to acceleration upon the occurrence of an Event of Default as defined in the Second Amended and Restated Credit Agreement (“the Agreement”). The Company may prepay any amounts outstanding at any time, subject to payment of certain breakage and redeployment costs relating to LIBOR Rate Loans. The commitments under the Credit Facility may be irrevocably reduced at any time, without premium or penalty as set forth in the Agreement. 1.75 – 2.25 % ( 5.70 % at November 30, 2022 ). Loans designated as Base Rate loans bear interest at a rate equal to the applicable margin for Base Rate Loans plus a range of 0.75 - 1.25 % as defined in the Agreement and shall not be lower than 1.75 % ( 7.75 % at November 30, 2022). An amendment to the Credit Facility in April 2021 provided for a Benchmark Replacement that will replace the LIBOR rate for all revolver usage. The Benchmark Replacement is subject to the occurrence of a Benchmark Transition Event, as defined in the Second Amended and Restated Credit Agreement and becomes effective after a five-day transition period following the event. Provided that the Company is in a Compliance Period (the period commencing on that day in which Excess Availability is less than 15 % of the Maximum Revolver Amount and ending on a day in which Excess Availability is equal to or greater than 15% for any consecutive 30-day period thereafter) , the Credit Facility requires compliance with a financial covenant calculated as of the last day of each month, consisting of a Fixed Charge Coverage Ratio. The Credit Facility also contains covenants, subject to defined carveouts, that limit the ability of the loan parties and certain of their subsidiaries which are not loan parties to, among other things: (i) incur additional indebtedness; (ii) incur liens; (iii) merge, consolidate or dispose of a substantial portion of their business; (iv) transfer or dispose of assets; (v) change their name, organizational identification number, state or province of organization or organizational identity; (vi) make any material change in their nature of business; (vii) prepay or otherwise acquire indebtedness; (viii) cause any change of control; (ix) make any restricted junior payment; (x) change their fiscal year or method of accounting; (xi) make advances, loans or investments; (xii) enter into or permit any transaction with an affiliate of any borrower or any of their subsidiaries; (xiii) use proceeds for certain items; (xiv) issue or sell any of their stock; or (xv) consign or sell any of their inventory on certain terms. In addition, if excess availability under the Credit Facility were to fall below certain specified levels, as defined in the Agreement, the lenders would have the right to assume dominion and control over the Company's cash. As of November 30, 2022, the Company was not in a Compliance Period. $ 144 and $ 536 , respectively, compared to $ 208 and $ 531 during the three and nine months ended November 30, 2021, respectively. These charges are included within Interest and bank charges on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss). 667 that will be amortized over the remaining term of the facility. The Company accounted for this amendment to the Credit Facility as a modification of debt. Deferred financing costs are included in Long-term debt on the accompanying Consolidated Balance Sheets as a contra-liability balance and are amortized through Interest and bank charges in the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) over the term of the Credit Facility, which expires on April 19, 2026 . During the three and nine months ended November 30, 2022, the Company amortized $ 55 and $ 166 of these costs, respectively, as compared to $ 55 and $ 185 during the three and nine months ended November 30, 2021, respectively. The net unamortized balance of these deferred financing costs as of November 30, 2022 was $ 756 . Euro Asset-Based Lending Obligation – VOXX Germany Foreign bank obligations include a Euro Asset-Based Lending ("ABL") credit facility, which has a credit limit of € 8,000 for the Company's subsidiary, VOXX Germany, which expires on July 31, 2023. The rate of interest for the ABL is the three-month Euribor plus 2.30 % ( 4.27 % at November 30, 2022 ). Shareholder Loan Payable to Sharp In conjunction with the capitalization and funding of the Company’s Onkyo joint venture with its partner Sharp, which was created in order to execute the acquisition of certain assets of the home audio/video business of OHEC on September 8, 2021 (see Note 2), Onkyo entered into a loan agreement with the shareholders of the joint venture, PAC and Sharp. The loan balance outstanding at November 30, 2022 represents the portion of the loan payable to Sharp. The loan balance due to PAC eliminates in consolidation. All amounts outstanding under the loan will mature and become payable ten years from the execution date of the acquisition, which is September 8, 2031. The loan may be prepaid subject to the approval of the board of directors of the joint venture and must be repaid if either the put or call option is exercised in accordance with the joint venture agreement. The rate of interest for the shareholder loan is 2.5 % and the loan is secured by a second priority lien on and secured interest in all assets of Onkyo. |
Financing Arrangements - Sche_2
Financing Arrangements - Schedule of Debt (Parenthetical) (Details) € in Thousands | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 08, 2021 | Nov. 30, 2022 USD ($) | Nov. 30, 2021 USD ($) | Nov. 30, 2022 USD ($) | Nov. 30, 2021 USD ($) | Feb. 28, 2022 USD ($) | Apr. 30, 2021 USD ($) | Apr. 26, 2016 USD ($) | Jul. 20, 2015 | Jul. 06, 2015 USD ($) | Oct. 23, 2000 EUR (€) | |
Line of credit facility, maturity date | Apr. 19, 2026 | ||||||||||
Percentage of maximum revolver amount | 15% | ||||||||||
Debt instrument compliance description | Provided that the Company is in a Compliance Period (the period commencing on that day in which Excess Availability is less than 15% of the Maximum Revolver Amount and ending on a day in which Excess Availability is equal to or greater than 15% for any consecutive 30-day period thereafter) | ||||||||||
Line of credit facility, commitment fee amount | $ 144,000 | $ 208,000 | $ 536,000 | $ 531,000 | |||||||
Line of credit facility, additional financing fees | $ 667,000 | ||||||||||
Debt issuance costs, net | 857,000 | $ 857,000 | $ 1,046,000 | ||||||||
Industrial revenue bond | $ 9,995,000 | ||||||||||
Mortgage bears interest rate | 70% | ||||||||||
Debt issuance costs, gross | $ 332,000 | $ 332,000 | |||||||||
Derivative, Fixed Interest Rate | 3.48% | ||||||||||
Sharp Corporation [Member] | Shareholder Loan Payable [Member] | Onkyo Home Entertainment Corporation [Member] | |||||||||||
Debt instrument, term | 10 years | ||||||||||
Debt instrument, interest rate | 2.50% | ||||||||||
Mortgages [Member] | |||||||||||
Debt instrument, basis spread on variable rate | 1.54% | ||||||||||
Debt instrument, interest rate at period end | 5.68% | 5.68% | |||||||||
Amortization of deferred financing costs | $ 8,000 | 8,000 | $ 24,000 | 24,000 | |||||||
Debt issuance costs, net | $ 101,000 | $ 101,000 | |||||||||
Debt instrument, term | 10 years | ||||||||||
London Interbank Offered Rate (LIBOR) [Member] | |||||||||||
Debt instrument, interest rate at period end | 5.70% | 5.70% | |||||||||
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | |||||||||||
Debt instrument, basis spread on variable rate | 1.75% | ||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | |||||||||||
Debt instrument, basis spread on variable rate | 2.25% | ||||||||||
Base Rate [Member] | |||||||||||
Debt instrument, interest rate at period end | 7.75% | 7.75% | |||||||||
Base Rate [Member] | Minimum [Member] | |||||||||||
Debt instrument, basis spread on variable rate | 0.75% | ||||||||||
Base Rate [Member] | Maximum [Member] | |||||||||||
Debt instrument, basis spread on variable rate | 1.25% | ||||||||||
Debt instrument, interest rate during period | 1.75% | ||||||||||
Wells Fargo [Member] | |||||||||||
Line of credit facility, remaining borrowing capacity | $ 91,415,000 | $ 91,415,000 | |||||||||
Wells Fargo [Member] | Loans [Member] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 15,000,000 | ||||||||||
Revolving Credit Facility [Member] | |||||||||||
Line of credit facility, maturity date | Apr. 19, 2026 | ||||||||||
Revolving Credit Facility [Member] | Wells Fargo [Member] | |||||||||||
Line of credit facility, current borrowing capacity | 140,000,000 | ||||||||||
Letter of Credit [Member] | Wells Fargo [Member] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 30,000,000 | ||||||||||
Line of Credit [Member] | |||||||||||
Amortization of deferred financing costs | 55,000 | $ 55,000 | $ 166,000 | $ 185,000 | |||||||
Debt issuance costs, net | $ 756,000 | $ 756,000 | |||||||||
Foreign Line of Credit [Member] | Audiovox Germany [Member] | |||||||||||
Line of credit facility, maximum borrowing capacity | € | € 8,000 | ||||||||||
Debt instrument, basis spread on variable rate | 2.30% | ||||||||||
Debt instrument, interest rate at period end | 4.27% | 4.27% |
Other Income (Expense) - Schedu
Other Income (Expense) - Schedule of Other Nonoperating Income (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Other Income and Expenses [Abstract] | ||||
Foreign currency gain (loss) | $ 215 | $ (382) | $ (3,872) | $ (268) |
Interest income | 11 | 55 | 20 | 67 |
Rental income | 230 | 186 | 681 | 547 |
Miscellaneous | 4 | (2) | 2 | 329 |
Total other, net | $ 460 | $ (143) | $ (3,169) | $ 675 |
Other Income (Expense) - Additi
Other Income (Expense) - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Nov. 30, 2022 | Nov. 30, 2022 | |
Other Income and Expenses [Abstract] | ||
Foreign currency loss attributable to re-measurements | $ 154 | $ 3,596 |
Lease Obligations - Additional
Lease Obligations - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Leases [Line Items] | ||||
Short term leases | $ 0 | $ 0 | ||
Other (Expense) Income [Member] | ||||
Leases [Line Items] | ||||
Rental income | $ 230,000 | $ 186,000 | $ 681,000 | $ 547,000 |
Minimum [Member] | ||||
Leases [Line Items] | ||||
Operating and finance leases remaining lease terms | 1 year | |||
Maximum [Member] | ||||
Leases [Line Items] | ||||
Operating and finance leases remaining lease terms | 8 years |
Lease Obligations - Schedule of
Lease Obligations - Schedule of Components of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | ||
Leases [Abstract] | |||||
Operating lease cost | [1],[2] | $ 347 | $ 324 | $ 1,132 | $ 1,007 |
Finance lease cost: | |||||
Amortization of right of use assets | [2] | 68 | 102 | 214 | 324 |
Interest on lease liabilities | [3] | 1 | 2 | 3 | 9 |
Total finance lease cost | $ 69 | $ 104 | $ 217 | $ 333 | |
[1] Includes immaterial amounts related to variable rent expense. Recorded within Selling, General and administrative, Engineering and technical support, and Cost of sales on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) . Recorded within Interest and bank charges on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) . |
Lease Obligations - Schedule _2
Lease Obligations - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Nov. 30, 2022 | Feb. 28, 2022 |
Operating Leases | ||
Operating lease, right of use assets | $ 3,905 | $ 4,464 |
Total operating lease right of use assets | 3,905 | 4,464 |
Accrued expenses and other current liabilities | 1,196 | 1,255 |
Operating lease liabilities, less current portion | 2,735 | 3,298 |
Total operating lease liabilities | 3,931 | 4,553 |
Finance Leases | ||
Property, plant, and equipment, gross | 2,754 | 2,503 |
Accumulated depreciation | (2,422) | (2,208) |
Total finance lease right of use assets | $ 332 | $ 295 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net |
Accrued expenses and other current liabilities | $ 242 | $ 224 |
Finance lease liabilities, less current portion | 94 | 78 |
Total finance lease liabilities | $ 336 | $ 302 |
Weighted Average Remaining Lease Term | ||
Operating leases | 5 years 1 month 6 days | 5 years 6 months |
Finance leases | 2 years | 1 year 3 months 18 days |
Weighted Average Discount Rate | ||
Operating leases | 3.82% | 4.01% |
Finance leases | 3.51% | 3.87% |
Lease Obligations - Schedule _3
Lease Obligations - Schedule of Maturities of Leases Liabilities (Details) - USD ($) $ in Thousands | Nov. 30, 2022 | Feb. 28, 2022 |
Operating Leases | ||
2023 | $ 1,301 | |
2024 | 901 | |
2025 | 583 | |
2026 | 392 | |
2027 | 255 | |
Thereafter | 845 | |
Total lease payments | 4,277 | |
Less imputed interest | 346 | |
Total | 3,931 | $ 4,553 |
Finance Leases | ||
2023 | 243 | |
2024 | 94 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 0 | |
Total lease payments | 337 | |
Less imputed interest | 1 | |
Total | $ 336 | $ 302 |
Capital Structure - Schedule of
Capital Structure - Schedule of Capital Units (Details) - $ / shares | 9 Months Ended | |
Nov. 30, 2022 | Feb. 28, 2022 | |
Capital Unit [Line Items] | ||
Treasury stock, shares | 3,140,179 | 2,862,218 |
Preferred Stock [Member] | ||
Capital Unit [Line Items] | ||
Preferred Stock, Par or Stated Value Per Share | $ 50 | |
Preferred Stock, Shares Authorized | 50,000 | 50,000 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred Stock, Liquidation Preference Per Share | $ 50 | |
Series A Preferred Stock [Member] | ||
Capital Unit [Line Items] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | |
Preferred Stock, Shares Authorized | 1,500,000 | 1,500,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common Class A [Member] | ||
Capital Unit [Line Items] | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 60,000,000 | 60,000,000 |
Treasury stock, shares | 3,140,179 | 2,862,218 |
Common Stock, Shares, Outstanding | 21,398,005 | 21,614,629 |
Common Stock, Voting Rights | 1 | |
Common Class B [Member] | ||
Capital Unit [Line Items] | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Shares, Outstanding | 2,260,954 | 2,260,954 |
Common Stock, Voting Rights | 10 |
Capital Structure (Additional I
Capital Structure (Additional Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Nov. 30, 2022 | Aug. 31, 2021 | Nov. 30, 2022 | |
Equity [Abstract] | |||
Repurchase of shares of common stock | 277,961 | 277,961 | |
Repurchase of shares of Class A Common Stock | $ 2,775 | $ 1,220 | $ 2,775 |
Stock repurchase program, number of shares authorized to be repurchased | 2,027,915 | 2,027,915 |
Variable Interest Entity - Addi
Variable Interest Entity - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Apr. 29, 2021 | Nov. 30, 2022 | Nov. 30, 2022 | Feb. 28, 2019 | Feb. 28, 2022 | |
Variable Interest Entity [Line Items] | |||||
Notes, loans and financing receivable, net, noncurrent | 1.50 | 1.50 | |||
Long-term debt, net of debt issuance costs | $ 45,860,000 | $ 45,860,000 | $ 9,786,000 | ||
Distribution agreement liability amount | 6,068,000 | $ 6,068,000 | $ 2,451,000 | ||
GalvanEyes [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Quarterly installment payment due amount received under distribution agreement | $ 1,147,000 | ||||
GalvanEyes [Member] | Put Arrangement [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Equity interest percentage based on occurrence of certain events | 20% | 20% | 20% | ||
Arrangement after initial period Term | 2 years | ||||
EyeLock [Member] | Exclusive Distribution Agreement [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Distribution agreement term | 3 years | ||||
EyeLock [Member] | Call Arrangement [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Equity interest percentage based on occurrence of certain events | 20% | ||||
EyeLock [Member] | GalvanEyes [Member] | Exclusive Distribution Agreement [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Annual fee receivable under distribution agreement subject to certain closing conditions | $ 10,000,000 | ||||
Annual fee receivable under distribution agreement term | 2 years | ||||
EyeLock [Member] | GalvanEyes [Member] | Maximum [Member] | Exclusive Distribution Agreement [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Quarterly fee receivable under distribution agreement subject to certain closing conditions | $ 5,000,000 | ||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Debt instrument, interest rate during period | 2.50% | 10% | |||
Line of credit facility, maximum borrowing capacity | $ 71,200,000 | $ 71,200,000 | |||
Long-term debt, net of debt issuance costs | $ 67,599,000 | $ 67,599,000 |
Variable Interest Entity - Summ
Variable Interest Entity - Summary of Carrying Values of Assets and Liabilities Included in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Nov. 30, 2022 | Feb. 28, 2022 |
Variable Interest Entity [Line Items] | ||
Cash and cash equivalents | $ 8,477 | $ 27,788 |
Accounts receivable, net | 91,882 | 105,625 |
Prepaid expenses and other current assets | 20,397 | 21,340 |
Total current assets | 321,833 | 330,772 |
Property, plant and equipment, net | 47,903 | 49,794 |
Intangible assets, net | 92,993 | 101,450 |
Other assets | 3,748 | 3,245 |
Total assets | 566,406 | 586,664 |
Current portion of long-term debt | 500 | 2,406 |
Total current liabilities | 167,465 | 204,016 |
Prepaid ownership interest in EyeLock LLC due to GalvanEyes LLC | 6,068 | 2,451 |
Other long-term liabilities | 3,144 | 3,508 |
Total liabilities | 237,899 | 236,501 |
Commitments and contingencies | ||
Retained earnings | 117,251 | 126,573 |
Total liabilities, redeemable equity, redeemable non-controlling interest, and stockholders' equity | 566,406 | 586,664 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Variable Interest Entity [Line Items] | ||
Cash and cash equivalents | 1,198 | 25 |
Accounts receivable, net | 379 | 47 |
Inventory, net | 2,015 | 2,028 |
Prepaid expenses and other current assets | 67 | 245 |
Total current assets | 3,659 | 2,345 |
Property, plant and equipment, net | 12 | 39 |
Intangible assets, net | 1,854 | 2,057 |
Other assets | 35 | 59 |
Total assets | 5,560 | 4,500 |
Accounts payable | 854 | 1,023 |
Interest payable to VOXX | 14,386 | 13,099 |
Accrued expenses and other current liabilities | 426 | 766 |
Current portion of long-term debt | 67,599 | 66,390 |
Total current liabilities | 83,265 | 81,278 |
Prepaid ownership interest in EyeLock LLC due to GalvanEyes LLC | 6,068 | 2,451 |
Other long-term liabilities | 1,200 | 1,200 |
Total liabilities | 90,533 | 84,929 |
Commitments and contingencies | ||
Capital | 41,416 | 41,416 |
Retained earnings | (126,389) | (121,845) |
Total partners' deficit | (84,973) | (80,429) |
Total liabilities, redeemable equity, redeemable non-controlling interest, and stockholders' equity | $ 5,560 | $ 4,500 |
Variable Interest Entity - Su_2
Variable Interest Entity - Summary of Revenues and Expenses Included in Consolidated Statements of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Variable Interest Entity [Line Items] | ||||
Net sales | $ 143,055 | $ 191,871 | $ 397,492 | $ 472,040 |
Cost of sales | 105,918 | 140,167 | 297,859 | 346,455 |
Gross profit | 37,137 | 51,704 | 99,633 | 125,585 |
Selling | 11,413 | 13,864 | 35,563 | 37,169 |
General and administrative | 16,223 | 20,049 | 54,435 | 56,609 |
Engineering and technical support | 7,171 | 9,706 | 23,844 | 23,824 |
Total operating expenses | 34,807 | 43,906 | 113,978 | 120,881 |
Operating income (loss) | 2,330 | 7,798 | (14,345) | 4,704 |
Interest and bank charges | (1,460) | (730) | (3,101) | (1,840) |
Other, net | 460 | (143) | (3,169) | 675 |
Total other income (expense), net | 36 | (38,111) | (3,855) | (33,645) |
Income (loss) before income taxes | 2,366 | (30,313) | (18,200) | (28,941) |
Income tax expense | (3,988) | (641) | (5,788) | (374) |
Net income (loss) | 6,354 | (29,672) | (12,412) | (28,567) |
Variable Interest Entity, Primary Beneficiary [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Net sales | 255 | 355 | 690 | 813 |
Cost of sales | 198 | 240 | 474 | 580 |
Gross profit | 57 | 115 | 216 | 233 |
Selling | 142 | 167 | 446 | 493 |
General and administrative | 374 | 261 | 1,158 | 1,037 |
Engineering and technical support | 344 | 1,526 | 1,844 | 4,654 |
Total operating expenses | 860 | 1,954 | 3,448 | 6,184 |
Operating income (loss) | (803) | (1,839) | (3,232) | (5,951) |
Interest and bank charges | (430) | (423) | (1,298) | (1,239) |
Other, net | (2) | (14) | ||
Total other income (expense), net | (432) | (423) | (1,312) | (1,239) |
Income (loss) before income taxes | (1,235) | (2,262) | (4,544) | (7,190) |
Income tax expense | 0 | 0 | 0 | 0 |
Net income (loss) | $ (1,235) | $ (2,262) | $ (4,544) | $ (7,190) |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 9 Months Ended |
Nov. 30, 2022 Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Number of operating segments | 3 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting Information by Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 143,055 | $ 191,871 | $ 397,492 | $ 472,040 |
Equity in income of equity investees | 2,022 | 2,206 | 5,373 | 6,964 |
Interest expense and bank charges | 1,460 | 730 | 3,101 | 1,840 |
Depreciation and amortization expense | 3,198 | 3,406 | 9,924 | 8,978 |
Income (loss) before income taxes | 2,366 | (30,313) | (18,200) | (28,941) |
Operating Segments [Member] | Automotive Electronics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 48,554 | 61,589 | 125,357 | 150,007 |
Equity in income of equity investees | 2,022 | 2,206 | 5,373 | 6,964 |
Interest expense and bank charges | 535 | 417 | 1,385 | 1,099 |
Depreciation and amortization expense | 790 | 749 | 2,448 | 2,287 |
Income (loss) before income taxes | 3,124 | 4,818 | 2,507 | 8,974 |
Operating Segments [Member] | Consumer Electronics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 94,116 | 129,733 | 271,068 | 320,805 |
Equity in income of equity investees | 0 | 0 | 0 | 0 |
Interest expense and bank charges | 2,050 | 2,076 | 6,035 | 5,962 |
Depreciation and amortization expense | 1,497 | 1,647 | 5,030 | 3,651 |
Income (loss) before income taxes | 3,379 | 9,998 | (649) | 17,905 |
Operating Segments [Member] | Biometrics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 255 | 355 | 690 | 813 |
Equity in income of equity investees | 0 | 0 | 0 | 0 |
Interest expense and bank charges | 430 | 423 | 1,298 | 1,239 |
Depreciation and amortization expense | 71 | 73 | 216 | 224 |
Income (loss) before income taxes | (1,235) | (2,263) | (4,544) | (7,191) |
Corporate, Non-Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 130 | 194 | 377 | 415 |
Equity in income of equity investees | 0 | 0 | 0 | 0 |
Interest expense and bank charges | (1,555) | (2,186) | (5,617) | (6,460) |
Depreciation and amortization expense | 840 | 937 | 2,230 | 2,816 |
Income (loss) before income taxes | $ (2,902) | $ (42,866) | $ (15,514) | $ (48,629) |
Segment Reporting - Schedule _2
Segment Reporting - Schedule of Segment Reporting Information by Segments (Parenthetical) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Foreign currency losses | $ 154 | $ 3,596 | ||
Corporate, Non-Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Foreign currency losses | 154 | 3,596 | ||
Charge for interim arbitration award unfavorable | $ 986 | $ 39,444 | $ 2,598 | $ 39,444 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Details) $ in Thousands | 9 Months Ended | |
Nov. 30, 2022 USD ($) Segment | Feb. 28, 2022 USD ($) | |
Disaggregation Of Revenue [Line Items] | ||
Contract with customer, right to recover product | $ 2,048 | $ 2,619 |
Contract with customer, refund liability | 4,264 | 5,469 |
Contract with customer, liability | $ 4,550 | $ 5,412 |
Number of reportable segments | Segment | 3 | |
Telematic Subscription Services [Member] | Directed LLC and Directed Electronics Canada Inc [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Contract with customer, liability | $ 4,550 | |
Minimum [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Warrant period | 30 days | |
Maximum [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Warrant period | 3 years |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Reconciliation of Contract Liabilities (Details) $ in Thousands | 9 Months Ended |
Nov. 30, 2022 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Balance at February 28, 2022 | $ 5,412 |
Subscription payments received | 4,723 |
Revenue recognized | (5,585) |
Balance at May 31, 2022 | $ 4,550 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Disaggregation Of Revenue [Line Items] | ||||
Net sales | $ 143,055 | $ 191,871 | $ 397,492 | $ 472,040 |
Corporate, Non-Segment [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 130 | 194 | 377 | 415 |
Automotive [Member] | Operating Segments [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 48,554 | 61,589 | 125,357 | 150,007 |
Automotive [Member] | Operating Segments [Member] | OEM Products [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 19,138 | 18,536 | 51,092 | 49,853 |
Automotive [Member] | Operating Segments [Member] | Aftermarket Products [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 29,416 | 43,053 | 74,265 | 100,154 |
Consumer Electronics [Member] | Operating Segments [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 94,116 | 129,733 | 271,068 | 320,805 |
Consumer Electronics [Member] | Operating Segments [Member] | Premium Audio Products [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 73,473 | 104,877 | 212,620 | 252,610 |
Consumer Electronics [Member] | Operating Segments [Member] | Other Consumer Electronic Products [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 20,643 | 24,856 | 58,448 | 68,195 |
Biometrics [Member] | Operating Segments [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 255 | 355 | 690 | 813 |
Biometrics [Member] | Operating Segments [Member] | Biometric Products [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | $ 255 | $ 355 | $ 690 | $ 813 |
Contingencies - Additional Info
Contingencies - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Mar. 03, 2022 | Nov. 29, 2021 | Jul. 14, 2021 | Jun. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2022 | Feb. 28, 2022 | |
Loss Contingencies [Line Items] | |||||||
Loss contingency, damages awarded, value | $ 39,444 | ||||||
Loss contingency, fees and costs | $ 798 | ||||||
Accrued balance related to interim award | $ 42,403 | $ 42,403 | $ 39,444 | ||||
Loss contingency charge accrued | $ 986 | $ 2,958 | |||||
Breach of Contract Claim | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, damages sought, value | $ 40,000 | $ 10,000 | |||||
Loss contingency, damages awarded, value | $ 39,444 |