Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company, as defined in Rule 12b-2 of the Exchange Act.:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of each class of the issuer's common stock outstanding as of the latest practicable date.

August 31,
2019

February 28,
2019

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$
39,294

$
58,236

Accounts receivable, net

68,371

73,391

Inventory, net

114,568

102,379

Receivables from vendors

366

1,009

Prepaid expenses and other current assets

9,605

10,449

Income tax receivable

1,239

921

Total current assets

233,443

246,385

Investment securities

2,518

2,858

Equity investment

21,688

21,885

Property, plant and equipment, net

59,864

60,493

Operating lease, right of use asset

2,301

—

Goodwill

54,785

54,785

Intangible assets, net

115,769

119,449

Deferred income tax assets

78

79

Other assets

1,937

2,877

Total assets

$
492,383

$
508,811

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$
33,844

$
31,143

Accrued expenses and other current liabilities

36,352

39,129

Income taxes payable

1,099

1,349

Accrued sales incentives

10,948

13,574

Current portion of long-term debt

6,665

10,021

Total current liabilities

88,908

95,216

Long-term debt, net of debt issuance costs

5,958

5,776

Finance lease liabilities, less current portion

974

516

Operating lease liabilities, less current portion

1,762

—

Deferred compensation

2,517

2,605

Deferred income tax liabilities

4,015

5,284

Other tax liabilities

1,128

1,332

Other long-term liabilities

2,481

2,981

Total liabilities

107,743

113,710

Commitments and contingencies (see Note 24)

Redeemable equity (see Note 7)

1,770

—

Stockholders' equity:

Preferred stock:

No shares issued or outstanding (see Note 20)

—

—

Common stock:

Class A, $.01 par value, 60,000,000 shares authorized, 24,306,194 and 24,106,194 shares issued and 21,929,788 and 21,938,100 shares outstanding at August 31, 2019 and February 28, 2019, respectively

244

242

Class B Convertible, $.01 par value, 10,000,000 shares authorized, 2,260,954 shares issued and outstanding at both August 31, 2019 and February 28, 2019

22

22

Paid-in capital

298,289

296,946

Retained earnings

141,470

148,582

Accumulated other comprehensive loss

(18,231
)

(16,944
)

421,794

428,848

Less: Treasury stock, at cost, 2,376,406 and 2,168,094 shares of Class A Common Stock at August 31, 2019 and February 28, 2019, respectively

(22,159
)

(21,176
)
Less: Redeemable equity

(1,770
)

—

Total VOXX International Corporation stockholders' equity

397,865

407,672

Non-controlling interest

(14,995
)

(12,571
)
Total stockholders' equity

382,870

395,101

~~Total liabilities, redeemable equity, and stockholders' equity~~

~~492,383~~

~~508,811~~

	November 30, 2019			February 28, 2019
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	32,156		$	58,236
Accounts receivable, net		93,356			73,391
Inventory, net		111,089			102,379
Receivables from vendors		218			1,009
Prepaid expenses and other current assets		10,623			10,449
Income tax receivable		578			921
Total current assets		248,020			246,385
Investment securities		2,554			2,858
Equity investment		21,389			21,885
Property, plant and equipment, net		51,350			60,493
Operating lease, right of use asset		2,773			—
Goodwill		54,785			54,785
Intangible assets, net		114,006			119,449
Deferred income tax assets		78			79
Other assets		1,695			2,877
Total assets	$	496,650		$	508,811
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	34,445		$	31,143
Accrued expenses and other current liabilities		37,158			39,129
Income taxes payable		2,072			1,349
Accrued sales incentives		16,667			13,574
Current portion of long-term debt		1,165			10,021
Total current liabilities		91,507			95,216
Long-term debt, net of debt issuance costs		6,019			5,776
Finance lease liabilities, less current portion		855			516
Operating lease liabilities, less current portion		2,127			—
Deferred compensation		2,554			2,605
Deferred income tax liabilities		4,921			5,284
Other tax liabilities		1,125			1,332
Other long-term liabilities		2,401			2,981
Total liabilities		111,509			113,710
Commitments and contingencies (see Note 24)
Redeemable equity (see Note 7)		2,124			—
Stockholders' equity:
Preferred stock:
No shares issued or outstanding (see Note 20)		—			—
Common stock:
Class A, $.01 par value, 60,000,000 shares authorized, 24,306,194 and 24,106,194 shares issued and 21,711,335 and 21,938,100 shares outstanding at November 30, 2019 and February 28, 2019, respectively		244			242
Class B Convertible, $.01 par value, 10,000,000 shares authorized, 2,260,954 shares issued and outstanding at both November 30, 2019 and February 28, 2019		22			22
Paid-in capital		298,760			296,946
Retained earnings		143,934			148,582
Accumulated other comprehensive loss		(18,511	)		(16,944	)
		424,449			428,848
Less: Treasury stock, at cost, 2,594,859 and 2,168,094 shares of Class A Common Stock at November 30, 2019 and February 28, 2019, respectively		(23,216	)		(21,176	)
Less: Redeemable equity		(2,124	)		—
Total VOXX International Corporation stockholders' equity		399,109			407,672
Non-controlling interest		(16,092	)		(12,571	)
Total stockholders' equity		383,017			395,101
Total liabilities, redeemable equity, and stockholders' equity	$	496,650		$	508,811

Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income~~

	Three months ended August 31,							Six months ended August 31,						Three months ended November 30,						Nine months ended November 30,
	2019			2018				2019			2018			2019			2018			2019			2018
Net sales	$	90,246		$	108,867			$	183,700		$	209,722		$	110,112		$	129,637		$	293,812		$	339,359
Cost of sales		66,477			77,804				133,922			150,982			78,648			90,714			212,570			241,696
Gross profit		23,769			31,063				49,778			58,740			31,464			38,923			81,242			97,663
Operating expenses:
Selling		8,701			9,604				18,582			20,298			9,580			10,363			28,162			30,661
General and administrative		17,782			17,038				35,207			33,150			16,689			16,482			51,896			49,632
Engineering and technical support		5,035			6,070				10,842			11,981			5,059			6,368			15,901			18,349
Intangible asset impairment charges (see Note 10)		—			9,814				—			9,814			—			—			—			9,814
Total operating expenses		31,518			42,526				64,631			75,243			31,328			33,213			95,959			108,456
Operating loss		(7,749	)		(11,463	)			(14,853	)		(16,503	)
Operating income (loss)															136			5,710			(14,717	)		(10,793	)
Other income (expense):
Interest and bank charges		(887	)		(1,117	)			(1,884	)		(2,217	)		(751	)		(1,174	)		(2,635	)		(3,391	)
Equity in income of equity investee		1,265			1,637				2,705			3,451			967			1,695			3,672			5,146
Gain on sale of real property (see Note 19)															4,057			—			4,057			—
Investment gain (see Note 3)		775			—				775			—			—			—			775			—
Impairment of Venezuela investment properties (see Note 18)		—			(3,473	)			—			(3,473	)		—			—			—			(3,473	)
Other, net		547			252				2,191			913			(322	)		260			1,869			1,173
Total other income (expense), net		1,700			(2,701	)			3,787			(1,326	)		3,951			781			7,738			(545	)
Loss before income taxes		(6,049	)		(14,164	)	��		(11,066	)		(17,829	)
Income (loss) before income taxes															4,087			6,491			(6,979	)		(11,338	)
Income tax expense (benefit)		1,115			8,338				(1,530	)		7,225			2,720			(4,078	)		1,190			3,147
Net loss		(7,164	)		(22,502	)			(9,536	)		(25,054	)
Net income (loss)															1,367			10,569			(8,169	)		(14,485	)
Less: net loss attributable to non-controlling interest		(1,200	)		(1,699	)			(2,424	)		(3,312	)		(1,097	)		(1,642	)		(3,521	)		(4,954	)
Net loss attributable to VOXX International Corporation	$	(5,964	)	$	(20,803	)		$	(7,112	)	$	(21,742	)
Net income (loss) attributable to VOXX International Corporation														$	2,464		$	12,211		$	(4,648	)	$	(9,531	)
Other comprehensive (loss) income:
Foreign currency translation adjustments		(215	)		(50	)			(1,026	)		(2,070	)		(295	)		(1,263	)		(1,321	)		(3,333	)
Derivatives designated for hedging		(177	)		50				(284	)		492			13			50			(271	)		542
Pension plan adjustments		9			1				23			37			2			20			25			57
Unrealized holding gain on available-for-sale investment securities, net of tax		—			—				—			24			—			—			—			24
Other comprehensive (loss) income, net of tax		(383	)		1				(1,287	)		(1,517	)		(280	)		(1,193	)		(1,567	)		(2,710	)
Comprehensive loss attributable to VOXX International Corporation	$	(6,347	)	$	(20,802	)		$	(8,399	)	$	(23,259	)
Loss per share - basic: Attributable to VOXX International Corporation	$	(0.24	)	$	(0.85	)		$	(0.29	)	$	(0.89	)
Loss per share - diluted: Attributable to VOXX International Corporation	$	(0.24	)	$	(0.85	)		$	(0.29	)	$	(0.89	)
Comprehensive income (loss) attributable to VOXX International Corporation														$	2,184		$	11,018		$	(6,215	)	$	(12,241	)
Income (loss) per share - basic: Attributable to VOXX International Corporation														$	0.10		$	0.50		$	(0.19	)	$	(0.39	)
Income (loss) per share - diluted: Attributable to VOXX International Corporation														$	0.10		$	0.50		$	(0.19	)	$	(0.39	)
Weighted-average common shares outstanding (basic)		24,481,477			24,355,791				24,457,482			24,355,791			24,418,313			24,355,791			24,458,926			24,355,791
Weighted-average common shares outstanding (diluted)		24,481,477			24,355,791				24,457,482			24,355,791			24,625,410			24,628,836			24,458,926			24,355,791

	Class A and Class B Common Stock			Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Non- controlling Interests			Treasury Stock			Redeemable Equity			Total Stock- holders' Equity			Class A and Class B Common Stock			Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Non- controlling Interests			Treasury Stock			Redeemable Equity			Total Stock- holders' Equity
Balances at February 28, 2019	$	264		$	296,946	$	148,582		$	(16,944	)	$	(12,571	)	$	(21,176	)	$	-		$	395,101		$	264		$	296,946	$	148,582		$	(16,944	)	$	(12,571	)	$	(21,176	)	$	-		$	395,101
Net loss		—			—		(1,148	)		—			(1,224	)		—			—			(2,372	)		—			—		(1,148	)		—			(1,224	)		—			—			(2,372	)
Other comprehensive loss, net of tax		—			—		—			(904	)		—			—			—			(904	)		—			—		—			(904	)		—			—			—			(904	)
Stock-based compensation expense		—			159		—			—			—			—			—			159			—			159		—			—			—			—			—			159
Balances at May 31, 2019		264			297,105		147,434			(17,848	)		(13,795	)		(21,176	)		-			391,984			264			297,105		147,434			(17,848	)		(13,795	)		(21,176	)		-			391,984
Net loss		—			—		(5,964	)		—			(1,200	)		—			—			(7,164	)		—			—		(5,964	)		—			(1,200	)		—			—			(7,164	)
Other comprehensive loss, net of tax		—			—		—			(383	)		—			—			—			(383	)		—			—		—			(383	)		—			—			—			(383	)
Stock-based compensation expense		2			1,184		—			—			—			—			(1,025	)		161			2			1,184		—			—			—			—			(1,025	)		161
Reclassifications of stockholders' equity to redeemable equity (see Note 7)		—			—		—			—			—			—			(745	)		(745	)		—			—		—			—			—			—			(745	)		(745	)
Repurchase of 208,312 shares of common stock		—			—		—			—			—			(983	)		—			(983	)		—			—		—			—			—			(983	)		—			(983	)
Balances at August 31, 2019	$	266		$	298,289	$	141,470		$	(18,231	)	$	(14,995	)	$	(22,159	)	$	(1,770	)	$	382,870			266			298,289		141,470			(18,231	)		(14,995	)		(22,159	)		(1,770	)		382,870
Net income (loss)																									—			—		2,464			—			(1,097	)		—			—			1,367
Other comprehensive loss, net of tax																									—			—		—			(280	)		—			—			—			(280	)
Stock-based compensation expense																									—			471		—			—			—			—			(354	)		117
Repurchase of 218,453 shares of common stock																									—			—		—			—			—			(1,057	)		—			(1,057	)
Balances at November 30, 2019																								$	266		$	298,760	$	143,934		$	(18,511	)	$	(16,092	)	$	(23,216	)	$	(2,124	)	$	383,017

Balances at February 28, 2018	$	278		$	296,395	$	194,673		$	(14,222	)	$	(5,830	)	$	(21,176	)	$	-		$	450,118		$	278		$	296,395	$	194,673		$	(14,222	)	$	(5,830	)	$	(21,176	)	$	-		$	450,118
Net loss		—			—		(939	)		—			(1,613	)		—			—			(2,552	)		—			—		(939	)		—			(1,613	)		—			—			(2,552	)
Other comprehensive loss, net of tax		—			—		—			(1,518	)		—			—			—			(1,518	)		—			—		—			(1,518	)		—			—			—			(1,518	)
Adjustment to common stock		(14	)		—		—			—			—			—			—			(14	)		(14	)		—		—			—			—			—			—			(14	)
Stock-based compensation expense		—			107		—			—			—			—			—			107			—			107		—			—			—			—			—			107
Balances at May 31, 2018		264			296,502		193,734			(15,740	)		(7,443	)		(21,176	)		-			446,141			264			296,502		193,734			(15,740	)		(7,443	)		(21,176	)		-			446,141
Net loss		—			—		(20,803	)		—			(1,699	)		—			—			(22,502	)		—			—		(20,803	)		—			(1,699	)		—			—			(22,502	)
Other comprehensive loss, net of tax		—			—		—			1			—			—			—			1			—			—		—			1			—			—			—			1
Adjustment to common stock		—			—		—			—			—			—			—			—
Stock-based compensation expense		—			127		—			—			—			—			—			127			—			127		—			—			—			—			—			127
Balances at August 31, 2018	$	264		$	296,629	$	172,931		$	(15,739	)	$	(9,142	)	$	(21,176	)	$	-		$	423,767			264			296,629		172,931			(15,739	)		(9,142	)		(21,176	)		-			423,767
Net income (loss)																									—			—		12,211			—			(1,642	)		—			—			10,569
Other comprehensive loss, net of tax																									—			—		—			(1,193	)		—			—			—			(1,193	)
Stock-based compensation expense																									—			159		—			—			—			—			—			159
Balances at November 30, 2018																								$	264		$	296,788	$	185,142		$	(16,932	)	$	(10,784	)	$	(21,176	)	$	-		$	433,302

	Six months ended August 31,						Nine months ended November 30,
	2019			2018			2019			2018
Cash flows from operating activities:
Net loss	$	(9,536	)	$	(25,054	)	$	(8,169	)	$	(14,485	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		6,587			5,925			9,897			8,811
Amortization of debt discount		411			411			617			616
Intangible asset impairment charge		—			9,814			—			9,814
Bad debt expense		104			103			303			372
(Gain) loss on forward contracts		(213	)		218			(347	)		132
Equity in income of equity investees		(2,705	)		(3,451	)		(3,672	)		(5,146	)
Distribution of income from equity investees		2,903			3,263			4,169			4,899
Deferred income tax (benefit) expense		(1,276	)		6,080			(338	)		2,606
Non-cash compensation adjustment		(88	)		(383	)		(51	)		(840	)
Stock based compensation expense		1,345			234			1,816			393
Impairment of Venezuela investment properties		—			3,473			—			3,473
Loss on sale of property, plant and equipment		18			13
(Gain) loss on sale of property, plant and equipment								(3,788	)		15
Changes in operating assets and liabilities:
Accounts receivable		4,386			9,285			(20,880	)		(5,709	)
Inventory		(12,791	)		(7,644	)		(9,353	)		(2,648	)
Receivables from vendors		641			136			790			24
Prepaid expenses and other		1,213			699			528			4,549
Investment securities-trading		340			508			304			903
Accounts payable, accrued expenses, accrued sales incentives and other liabilities		(3,475	)		(2,225	)		3,379			4,159
Income taxes payable		(738	)		(1,225	)		908			(1,833	)
Net cash (used in) provided by operating activities		(12,874	)		180			(23,887	)		10,105
Cash flows used in investing activities:
Purchases of property, plant and equipment		(1,332	)		(685	)		(2,192	)		(4,084	)
Proceeds from sale of property, plant and equipment		26			51			11,951			47
Issuance of notes receivable		—			(3,164	)		—			(4,931	)
Net cash used in investing activities		(1,306	)		(3,798	)
Net cash provided by (used in) investing activities								9,759			(8,968	)
Cash flows used in financing activities:
Principal payments on finance lease obligation		(310	)		(190	)		(477	)		(295	)
Repayment of bank obligations		(3,356	)		(1,490	)		(9,046	)		(1,870	)
Borrowings on bank obligations		—			1,487			—			1,974
Purchase of treasury stock		(983	)		—			(2,040	)		—
Net cash used in financing activities		(4,649	)		(193	)		(11,563	)		(191	)
Effect of exchange rate changes on cash		(113	)		(3,738	)		(389	)		(3,968	)
Net decrease in cash and cash equivalents		(18,942	)		(7,549	)		(26,080	)		(3,022	)
Cash and cash equivalents at beginning of period		58,236			51,740			58,236			51,740
Cash and cash equivalents at end of period	$	39,294		$	44,191		$	32,156		$	48,718

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 consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America. 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, 2019.

Effective March 1, 2019, the Company revised its reportable segments to better reflect the way the Company now manages its business. To reflect management's revised perspective, the Company now classifies its operations in the following three reportable segments: Automotive Electronics, Consumer Electronics, and Biometrics. Prior year segment amounts have been reclassified to conform to the current presentation. See Note 22 for the Company's segment reporting disclosures.

Basic net income (loss) ~~income~~ per common share, net of non-controlling interest, is based upon the weighted-average common shares outstanding during the period. Diluted net income (loss) ~~income~~ per common share, net of non-controlling interest, 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 are no reconciling items which impact the numerator of basic and diluted net income (loss) ~~income~~ per common share. A reconciliation between the denominator of basic and diluted net income (loss) ~~income~~ per common share is as follows:

	Three months ended August 31,				Six months ended August 31,				Three months ended November 30,				Nine months ended November 30,
	2019		2018		2019		2018		2019		2018		2019		2018
Weighted-average common shares outstanding (basic)		24,481,477		24,355,791		24,457,482		24,355,791		24,418,313		24,355,791		24,458,926		24,355,791
Effect of dilutive securities:
Restricted stock		—		—		—		—		207,097		273,045		—		—
Weighted-average common shares and potential common shares outstanding (diluted)		24,481,477		24,355,791		24,457,482		24,355,791		24,625,410		24,628,836		24,458,926		24,355,791

Restricted stock and stock grants totaling ~~657,015~~43,374 and ~~615,267~~0 for the three months ended ~~August 31,~~November 30, 2019 and 2018, respectively, and ~~642,280~~672,531 and ~~527,283~~531,375 for the ~~six~~nine months ended ~~August 31,~~November 30, 2019 and 2018, respectively, were not included in the net income (loss) ~~income~~ per diluted share calculation because the ~~exercise~~grant price of the restricted stock and stock grants 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.

As of ~~August 31,~~November 30, 2019, and February 28, 2019, the Company had the following investments:

	August 31, 2019		November 30, 2019
	Fair Value		Fair Value
Investment Securities
Marketable Equity Securities
Mutual funds	$	2,518	$	2,554
Total Marketable Equity Securities		2,518		2,554
Total Investment Securities	$	2,518	$	2,554

On March 1, 2018, the Company adopted ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"), the impact of which resulted in a cumulative effect adjustment of $24, which was recorded in ~~other~~Other income (expense) in the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income~~ for the ~~six~~nine months ended ~~August 31,~~November 30, 2018, rather than in retained earnings, as it was not considered material to the Company's consolidated financial statements for the period.

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.

In July 2017, the Company sold its investment in RxNetworks, a non-controlled corporation, consisting of shares of the investee’s preferred stock. Voxx recognized a gain of $1,416 during Fiscal 2018 for the sale of this investment. A portion of the cash proceeds for the sale was subject to a hold-back provision, which was not included in the calculation of the gain recognized in Fiscal 2018, as it was considered a gain contingency. During the second quarter of Fiscal 2020, the hold-back provision expired, and the Company received the remaining proceeds from the sale in August 2019. The Company recorded an investment gain of $775 for the ~~three and six~~nine months ended ~~August 31,~~November 30, 2019 for these proceeds received.

The Company applies the authoritative guidance on “Fair Value Measurements," which among other things, requires enhanced disclosures about investments 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 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.

At November 30, 2019 and February 28, 2019, the Company did not have any assets or liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

The following table presents financial assets measured at fair value on a recurring basis at ~~August 31,~~November 30, 2019:

				Fair Value Measurements at Reporting Date Using								Fair Value Measurements at Reporting Date Using
	Total			Level 1		Level 2			Total			Level 1		Level 2
Cash and cash equivalents:
Cash and money market funds	$	39,294		$	39,294	$	—		$	32,156		$	32,156	$	—
Derivatives:
Designated for hedging	$	(162	)	$	—	$	(162	)	$	(200	)	$	—	$	(200	)
Investment securities:
Mutual funds	$	2,518		$	2,518	$	—		$	2,554		$	2,554	$	—
Total investment securities	$	2,518		$	2,518	$	—		$	2,554		$	2,554	$	—

The following table presents financial assets and liabilities measured at fair value on a recurring basis at February 28, 2019:

At ~~August 31,~~November 30, 2019, the carrying amount of the Company's accounts receivable, short-term debt, accounts payable, accrued expenses, bank obligations and long-term debt approximates fair value because of (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.

The Company's derivative instruments include forward foreign currency contracts utilized to hedge a portion of its foreign currency inventory purchases. The 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). The duration of open forward foreign currency contracts ranges from 1 month - 63 months and are classified in the balance sheet according to their terms. The Company also has an interest rate swap agreement as of ~~August 31,~~November 30, 2019 that hedges interest rate exposure related to the ~~forecasted~~ 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 interest rate swap agreements 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.

The following table discloses the fair value as of ~~August 31,~~November 30, 2019 and February 28, 2019 of derivative instruments:

	Derivative Assets and Liabilities							Derivative Assets and Liabilities
		Fair Value							Fair Value
	Account	August 31, 2019			February 28, 2019			Account	November 30, 2019			February 28, 2019
Designated derivative instruments
Foreign currency contracts	Prepaid expenses and other current assets	$	261		$	172		Prepaid expenses and other current assets	$	144		$	172
Interest rate swap agreements	Other long-term liabilities		(423	)		(84	)	Other long-term liabilities		(344	)		(84	)
Total derivatives		$	(162	)	$	88			$	(200	)	$	88

It is the Company's policy 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. On March 1, 2019, the Company adopted ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities, which eliminated the requirement to separately measure and report hedge ineffectiveness. For derivative instruments that are designated and qualify as a cash flow hedge, the entire change in fair value of the hedging instrument included in the assessment of the hedge ineffectiveness is recorded to other comprehensive income (“OCI”). When the amounts recorded in OCI are reclassified to earnings, they are presented in the same income statement line item as the effect of the hedged item. The adoption of ASU No. 2017-12 did not have a material impact on the Company’s consolidated financial statements.

During Fiscal 2019, the Company entered into forward foreign currency contracts, which have a current outstanding notional value of ~~$4,800~~$2,400 and are designated as cash flow hedges at ~~August 31,~~November 30, 2019. The current outstanding notional value of the Company's interest rate swap at ~~August 31,~~November 30, 2019 is ~~$7,883.~~$7,738. For cash flow hedges, the gain or loss is reported as a component of Other comprehensive (loss) income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The net (loss) income recognized in Other comprehensive (loss) income for foreign currency contracts is expected to be recognized in Cost of sales within the next ~~nine~~six months. 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 (loss) income and subsequently reclassified into Interest and bank charges in the period in which the hedged transaction affects earnings. As of ~~August 31,~~November 30, 2019, no foreign currency contracts or interest rate swaps originally designated for hedge accounting were de-designated or terminated.

Activity related to cash flow hedges recorded during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 and 2018 was as follows:

	Three months ended							Six months ended							Three months ended						Nine months ended
	August 31, 2019							August 31, 2019							November 30, 2019						November 30, 2019
	Pretax Gain (Loss) Recognized in Other Comprehensive Income			Pretax Gain Reclassified from Accumulated Other Comprehensive Income		Gain (Loss) for Ineffectiveness		Pretax Gain (Loss) Recognized in Other Comprehensive Income			Pretax Gain Reclassified from Accumulated Other Comprehensive Income		Gain (Loss) for Ineffectiveness		Pretax Gain (Loss) Recognized in Other Comprehensive Income		Pretax Gain Reclassified from Accumulated Other Comprehensive Income		Gain (Loss) for Ineffectiveness		Pretax Gain (Loss) Recognized in Other Comprehensive Income			Pretax Gain Reclassified from Accumulated Other Comprehensive Income		Gain (Loss) for Ineffectiveness
Cash flow hedges
Foreign currency contracts	$	98		$	109	$	—	$	316		$	228	$	—	$	41	$	134	$	—	$	357		$	362	$	—
Interest rate swaps		(167	)		—		—		(339	)		—		—		79		—		—		(260	)		—		—

	Three months ended							Six months ended							Three months ended						Nine months ended
	August 31, 2018							August 31, 2018							November 30, 2018						November 30, 2018
	Pretax Gain Recognized in Other Comprehensive Income		Pretax Gain Reclassified from Accumulated Other Comprehensive Income		Loss for Ineffectiveness in Other Income (a)			Pretax Gain Recognized in Other Comprehensive Income		Pretax Loss Reclassified from Accumulated Other Comprehensive Income			Gain for Ineffectiveness in Other Income (a)		Pretax Gain Recognized in Other Comprehensive Income		Pretax Gain Reclassified from Accumulated Other Comprehensive Income		Loss for Ineffectiveness in Other Income (a)		Pretax Gain Recognized in Other Comprehensive Income		Pretax Loss Reclassified from Accumulated Other Comprehensive Income			Gain for Ineffectiveness in Other Income (a)
Cash flow hedges
Foreign currency contracts	$	56	$	21	$	(8	)	$	422	$	(214	)	$	25	$	116	$	80	$	20	$	538	$	(134	)	$	45
Interest rate swaps		27		—		—			38		—			—		28		—		—		66		—			—

The Company’s accumulated other comprehensive (loss) income consists of the following:

	Foreign Currency Translation Losses			Pension plan adjustments, net of tax			Derivatives designated in a hedging relationship, net of tax			Total			Foreign Currency Translation Losses			Pension plan adjustments, net of tax			Derivatives designated in a hedging relationship, net of tax			Total
Balance at February 28, 2019	$	(16,222	)	$	(798	)	$	76		$	(16,944	)	$	(16,222	)	$	(798	)	$	76		$	(16,944	)
Other comprehensive (loss) income before reclassifications		(1,026	)		23			(126	)		(1,129	)		(1,321	)		25			(20	)		(1,316	)
Reclassified from accumulated other comprehensive loss		—			—			(158	)		(158	)		—			—			(251	)		(251	)
Net current-period other comprehensive loss		(1,026	)		23			(284	)		(1,287	)
Balance at August 31, 2019	$	(17,248	)	$	(775	)	$	(208	)	$	(18,231	)
Net current-period other comprehensive (loss) income														(1,321	)		25			(271	)		(1,567	)
Balance at November 30, 2019													$	(17,543	)	$	(773	)	$	(195	)	$	(18,511	)

During the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, the Company recorded tax expense related to derivatives designated in a hedging relationship of ~~$(4)~~$(29) and ~~$28,~~$(2), respectively, and pension plan adjustments of $0 in both periods.

The other comprehensive (loss) income before reclassification of ~~$(1,026)~~$(1,321) includes the remeasurement of intercompany transactions of a long-term investment nature of ~~$(123)~~$(293) with certain subsidiaries whose functional currency is not the U.S. dollar, and ~~$(903)~~$(1,028) 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.

The following is supplemental information relating to the Unaudited Consolidated Statements of Cash Flows:

	Six months ended August 31,				Nine months ended November 30,
	2019		2018		2019		2018
Non-cash investing and financing activities:
Capital expenditures funded by long-term obligations	$	—	$	360	$	—	$	360
Issuance of redeemable equity		1,025		-		1,379		-
Reclassification of stockholders' equity to redeemable equity		745		-		745		-
Cash paid during the period:
Interest (excluding bank charges)	$	554	$	764	$	726	$	1,322
Income taxes (net of refunds)		410		2,305		565		2,290

The Company has various stock-based compensation plans, which are more fully described in Note 1 of the Company’s Form 10-K for the fiscal year ended February 28, 2019.

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 has a Supplemental Executive Retirement Plan (SERP), which was established in Fiscal 2014. Shares are granted based on certain performance criteria and vest on the later of three years from the date of grant, or the grantee reaching the age of 65 years. The shares will also vest upon termination of the grantee's employment by the Company without cause, provided that the grantee, at the time of termination, has been employed by the Company for at least 10 years, or as a result of the sale of all of the issued and outstanding stock, or all, or substantially all, of the assets of the subsidiary of which the grantee serves as CEO and/or President. When vested shares are issued to the grantee, the awards will be settled in shares or in cash, at the Company's sole option. The grantee cannot transfer the rights to receive shares before the restricted shares vest. There are no market conditions inherent in the award, only an employee performance requirement, and the service requirement that the respective employee continues employment with the Company through the vesting date. During July 2019, the Company granted ~~71,352~~571,352 shares of restricted stock under the SERP. The Company expenses the cost of the restricted stock awards on a straight-line basis over the requisite service period of each employee. For these purposes, the fair market value of the restricted stock is determined based on the mean of the high and low price of the Company's common stock on the grant dates. The fair market value of the restricted stock granted in July 2019 was ~~$4.65.~~$4.52.

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 ~~received~~agreed to receive certain stock-based compensation as discussed below:

All ~~the~~ 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 the shares 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 sheet at grant-date fair value. Shares previously held by Mr. Lavelle under the SERP and those 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 SERP and the initial stock grant and additional stock grants under the Employment Agreement for the ~~six~~nine months ended ~~August 31,~~November 30, 2019:

	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
Unvested share balance at February 28, 2019		470,807	$	5.49		470,807	$	5.49
Granted		571,352		4.52		571,352		4.52
Vested		277,696		3.99		327,007		4.38
Forfeited		—		—		—		—
Unvested share balance at August 31, 2019		764,463	$	5.30
Unvested share balance at November 30, 2019						715,152	$	5.22

At ~~August 31,~~November 30, 2019, there were ~~234,433~~283,744 shares of vested and unissued shares under the Company’s SERP with a weighted average fair value of ~~$7.55.~~$7.37.

During the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, the Company recorded ~~$1,186~~$471 and ~~$1,345,~~$1,816, respectively, in total stock-based compensation related to the SERP, and to the initial stock grant, additional stock grants, and MSU’s under the Employment Agreement. As of ~~August 31,~~November 30, 2019, there was approximately ~~$3,410~~$2,940 of unrecognized stock-based compensation expense related to unvested restricted stock awards.

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 ~~six~~nine months ended ~~August 31,~~November 30, 2019, net of discounts, were ~~$14,404~~$14,062 and ~~$36,987,~~$50,897, respectively, compared to ~~$24,945~~$35,047 and ~~$47,924,~~$82,971, respectively, for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2018. During the second quarter of Fiscal 2020, the Company suspended its domestic supply chain financing activities as it has determined it has sufficient cash on hand for operations and does not require additional ~~financing as of August 31, 2019.~~financing. The Company has the option to resume its activity under the existing arrangements at any time.

Expenditures for research and development are charged to expense as incurred. Such expenditures amounted to ~~$1,899~~$1,672 and ~~$3,762~~$5,434 for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, compared to ~~$2,202~~$2,309 and ~~$4,560~~$6,869 for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2018, net of customer reimbursements, and are included within Engineering and technical support expenses on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income.~~.

Automotive Electronics:	Amount			Amount
Beginning balance at March 1, 2019	$	8,252		$	8,252
Activity during the period		—			—
Balance at August 31, 2019	$	8,252
Gross carrying amount at May 31, 2019	$	8,252
Balance at November 30, 2019				$	8,252
Gross carrying amount at November 30, 2019				$	8,252
Accumulated impairment charge		—			—
Net carrying amount at August 31, 2019	$	8,252
Net carrying amount at November 30, 2019				$	8,252
Consumer Electronics:
Beginning balance at March 1, 2019	$	46,533		$	46,533
Activity during the period		—			—
Balance at August 31, 2019	$	46,533
Gross carrying amount at August 31, 2019	$	78,696
Balance at November 30, 2019				$	46,533
Gross carrying amount at November 30, 2019				$	78,696
Accumulated impairment charge		(32,163	)		(32,163	)
Net carrying amount at August 31, 2019	$	46,533
Net carrying amount at November 30, 2019				$	46,533
Total Goodwill, net	$	54,785		$	54,785

~~Note:~~ The Company's Biometrics segment did not carry a goodwill balance at ~~August 31,~~November 30, 2019 or February 28, 2019.

At ~~August 31,~~November 30, 2019, intangible assets consisted of the following:

	Gross Carrying Value		Accumulated Amortization		Total Net Book Value		Gross Carrying Value		Accumulated Amortization		Total Net Book Value
Finite-lived intangible assets:
Customer relationships	$	49,541	$	31,240	$	18,301	$	49,524	$	32,058	$	17,466
Trademarks/Tradenames		485		423		62		485		428		57
Developed technology		31,290		10,883		20,407		31,290		11,564		19,726
Patents		5,374		3,295		2,079		5,373		3,495		1,878
License		1,400		1,400		—		1,400		1,400		—
Contract		2,141		2,025		116		2,141		2,054		87
Total finite-lived intangible assets	$	90,231	$	49,266		40,965	$	90,213	$	50,999		39,214
Indefinite-lived intangible assets
Trademarks						74,804						74,792
Total net intangible assets					$	115,769
Total intangible assets, net											$	114,006

	Gross Carrying Value		Accumulated Amortization		Total Net Book Value		Gross Carrying Value		Accumulated Amortization		Total Net Book Value
Finite-lived intangible assets:
Customer relationships	$	49,743	$	29,746	$	19,997	$	49,743	$	29,746	$	19,997
Trademarks/Tradenames		485		413		72		485		413		72
Developed technology		31,290		9,523		21,767		31,290		9,523		21,767
Patents		5,390		2,907		2,483		5,390		2,907		2,483
License		1,400		1,400		—		1,400		1,400		—
Contract		2,141		1,966		175		2,141		1,966		175
Total finite-lived intangible assets	$	90,449	$	45,955		44,494	$	90,449	$	45,955		44,494
Indefinite-lived intangible assets
Trademarks						74,955						74,955
Total net intangible assets					$	119,449
Total intangible assets, net											$	119,449

During the second quarter of Fiscal 2019, the Company re-evaluated its projections for several brands in its former Consumer Accessory and Automotive segments based on lower than anticipated results due to lower product load-ins, increased competition for certain product lines, a streamlining of SKU’s, and its marketing strategy for one of its brands. Accordingly, these were considered indicators of impairment requiring the Company to test the related indefinite-lived ~~tradenames~~trademarks for impairment. The Company tested these indefinite-lived intangible assets as of August 31, 2018 and as a result of its analysis, it was determined that several of the Company's former Consumer Accessory trademarks and one Automotive trademark were impaired at August 31, 2018. The Company recorded an impairment charge of $9,814 for the ~~three and six~~nine months ended ~~August 31,~~November 30, 2018, with $9,654 related to the former Consumer Accessories segment and $160 related to the Automotive segment. There can be no assurances that the estimates and assumptions used for purposes of triggering events reviews or impairment testing will prove to be accurate predictions of the future. Reduced demand for our existing product offerings, reductions of product placement at our customers, less than anticipated results, lack of acceptance of our new products, elimination of additional SKU’s, the inability to successfully develop our brands, or unfavorable changes in assumptions used in the discounted cash flow model such as discount rates, royalty rates, or projected long-term growth rates could result in additional impairment charges in the future.

The Company recorded amortization expense of $1,748 and ~~$3,496~~$5,243 for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, respectively, and ~~$1,581~~$1,582 and ~~$3,163~~$4,745 for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2018, respectively. The estimated aggregate amortization expense for all amortizable intangibles for ~~August 31~~November 30 of each of the succeeding years is as follows:

Year	Amount		Amount
2020	$	6,837	$	6,766
2021		6,618		6,599
2022		6,137		5,910
2023		5,510		5,449
2024		5,382		5,358

As of ~~August 31,~~November 30, 2019 and February 28, 2019, 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.

	August 31, 2019		February 28, 2019		November 30, 2019		February 28, 2019
Current assets	$	46,707	$	45,135	$	48,585	$	45,135
Non-current assets		5,817		6,124		5,509		6,124
Liabilities		9,148		7,489		11,316		7,489
Members' equity		43,376		43,770		42,778		43,770

	Six months ended August 31,				Nine months ended November 30,
	2019		2018		2019		2018
Net sales	$	50,281	$	50,560	$	75,962	$	76,753
Gross profit		15,542		16,509		23,345		24,753
Operating income		5,227		6,806		7,083		10,148
Net income		5,410		6,902		7,344		10,292

The Company's share of income from ASA was ~~$1,265~~$967 and ~~$2,705~~$3,672 for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, and ~~$1,637~~$1,695 and ~~$3,451~~$5,146 for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2018. The decrease in ASA’s operating and net income for the three and nine months ended November 30, 2019 compared to the prior year period is primarily a result of the impact of tariffs, an increase in warranty costs, as well as due to certain product recall expenses incurred in the current year that were not present in the prior year.

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. The authoritative guidance for accounting for income taxes allows use of the year-to-date effective tax rate (the “discrete method”) when a reliable estimate of the estimated annual effective tax rate cannot be made. During the interim period ended August 31, 2019, the Company determined the use of the discrete method for U.S. operations is more appropriate than the annual effective tax rate method due to sensitivity to small changes to projected pre-tax earnings, which resulted in significant variations in the customary relationship between income tax expense and pretax income. As such, the Company has estimated a foreign effective tax rate and applied that to its foreign year to date results and has discretely calculated the U.S. tax provision (benefit) based on pre-tax results through the ~~six~~three and nine months ended ~~August 31, 2019. The change in estimate is reflected in the tax provision (benefit) for the three and six months ended August 31,~~November 30, 2019.

For the three months ended ~~August 31,~~November 30, 2019, the Company recorded an income tax provision of ~~$1,115,~~$2,720, which includes a discrete income tax ~~benefit~~provision of ~~$1,400.~~$1,035. The Company recorded a discrete tax ~~benefits~~provision of ~~$1,204 and $196~~$1,153 in connection with excluding the U.S. tax jurisdiction from the estimated annual effective tax rate and a discrete income tax benefit of $118 primarily related to the reversal of uncertain tax provision liabilities as result of the lapse of the applicable statute of limitations, ~~respectively.~~the remeasurement of deferred tax assets and liabilities for enacted state law changes, offset by an income tax provision related to the finalization of federal and state tax filings during the quarter ended November 30, 2019. For the three months ended ~~August 31,~~November 30, 2018, the Company recorded an income tax ~~provision~~benefit of ~~$8,338,~~$4,078, which includes a discrete income tax benefit of ~~$226,~~$57, related primarily to the reversal of ~~uncertain~~unrecognized tax ~~provision liabilities,~~benefits resulting from a lapse of the applicable statute of limitations, offset by aan income tax provision related to the ~~accrual~~finalization of ~~interest for unrecognized~~our federal, state and foreign tax ~~benefits and the impact of remeasurement of state deferred taxes based on law changes enacted~~filings during the ~~quarter.~~quarter ended November 30, 2018.

The effective tax rates for the three months ended ~~August 31,~~November 30, 2019 and 2018 were an income tax provision of ~~18.4%~~66.6% on a pre-tax ~~loss~~income of ~~$6,049~~$4,087 and an income tax ~~provision~~benefit of ~~58.9%~~62.8% on a pre-tax ~~loss~~income of ~~$14,164,~~$6,491, respectively. The effective tax rate for the three months ended ~~August 31,~~November 30, 2019 differs from the U.S. statutory rate of 21% primarily due to the calculation of the U.S. tax provision on a discrete basis, the U.S. taxation of foreign earnings, nondeductible permanent differences, non-controlling interest related to EyeLock LLC, an increase in the valuation allowance, ~~primarily for capital assets,~~ state and local income taxes, and income taxed in foreign jurisdictions at varying tax rates. The effective tax rate for the three months ended ~~August 31,~~November 30, 2018 differed from the statutory rate of 21% primarily due to the non-controlling interest related to EyeLock LLC, state and local income taxes, nondeductible permanent differences, and income taxed in foreign jurisdictions at varying tax rates. In addition, the valuation allowance increased for tax credits and loss jurisdictions for which a limited tax benefit can be recognized.

For the six months ended August 31, 2019, the Company recorded an income tax benefit of $1,530, which includes a discrete income tax benefit of $1,380. The Company recorded discrete tax benefits of $1,204 and $176 in connection with excluding the U.S. tax jurisdiction from the estimated annual effective tax rate and the reversal of uncertain tax provision liabilities as result of lapse of the applicable statute of limitations, respectively. For the six months ended August 31, 2018, the Company recorded an income tax provision of $7,225, which includes a discrete income tax benefit of $199, primarily related to the reversal of uncertain tax provision liabilities, offset by a provision related to the accrual of interest for unrecognized tax benefits and the remeasurement of state deferred taxes based on law changes enacted during the period.

The effective tax rates for the six months ended August 31, 2019 and 2018 were an income tax benefit of 13.8% on a pre-tax loss of $11,066 and an income tax provision of 40.5% on a pre-tax loss of $17,829, respectively. The effective tax rate for the six months ended August 31, 2019 differs from the U.S. statutory rate of 21% primarily due to the calculation of the U.S. tax provision on a discrete basis, nondeductible permanent differences, non-controlling interest related to EyeLock LLC, an increase in the valuation allowance primarily for capital assets, state and local income

For the nine months ended November 30, 2019, the Company recorded an income tax provision of $1,190, which includes a discrete income tax benefit of $345. The Company recorded a discrete tax benefit of $50 in connection with excluding the U.S. tax jurisdiction from the estimated annual effective tax rate and a discrete income tax benefit of $295 primarily related to the reversal of uncertain tax provision liabilities as result of lapse of the applicable statute of limitations, the remeasurement of deferred tax assets and liabilities for enacted state law changes, offset by an income tax provision related to the finalization of federal and state tax filings during the quarter ended November 30, 2019. For the nine months ended November 30, 2018, the Company recorded an income tax provision of $3,147, which includes a discrete income tax benefit of $256, primarily related to the reversal of unrecognized tax benefits resulting from a lapse in the applicable statute of limitations, offset by an income tax provision related to the finalization of our federal, state and foreign tax filings during the quarter ended November 30, 2018.

The effective tax rates for the nine months ended November 30, 2019 and 2018 were an income tax provision of 17.1% on a pre-tax loss of $6,979 and an income tax provision of 27.8% on a pre-tax loss of $11,338, respectively. The effective tax rate for the nine months ended November 30, 2019 differs from the U.S. statutory rate of 21% primarily due to the calculation of the U.S. tax provision on a discrete basis, the U.S. taxation of foreign earnings, nondeductible permanent differences, non-controlling interest related to EyeLock LLC, an increase in the valuation allowance, state and local income taxes, and income taxed in foreign jurisdictions at varying tax rates. The effective tax rate for the ~~six~~nine months ended ~~August 31,~~November 30, 2018 differed from the statutory rate of 21% primarily due to the non-controlling interest related to EyeLock LLC, state and local income taxes, nondeductible permanent differences, and income taxed in foreign jurisdictions at varying tax rates.

At ~~August 31,~~November 30, 2019, the Company had an uncertain tax position liability of ~~$1,128,~~$1,125, including interest and penalties. The unrecognized tax benefits include amounts related to various U.S. federal, state and local, and foreign tax issues.

	August 31, 2019		February 28, 2019		November 30, 2019		February 28, 2019
Raw materials	$	29,056	$	27,518	$	26,837	$	27,518
Work in process		2,620		2,622		2,731		2,622
Finished goods		82,892		72,239		81,521		72,239
Inventory, net	$	114,568	$	102,379	$	111,089	$	102,379

The following table provides a summary of the activity with respect to product warranties and product repair costs. Liabilities for product warranties and product repair costs are included within ~~accrued~~Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

	Three months ended August 31,						Six months ended August 31,						Three months ended November 30,						Nine months ended November 30,
	2019			2018			2019			2018			2019			2018			2019			2018
Opening balance	$	4,151		$	4,925		$	4,469		$	6,233		$	4,062		$	4,855		$	4,469		$	6,233
Liabilities for warranties accrued during the period		1,147			1,366			2,434			2,866			1,445			1,729			3,879			4,595
Balances transferred (a)		—			—			—			(832	)		—			—			—			(832	)
Warranties paid during the period		(1,236	)		(1,436	)		(2,841	)		(3,412	)
Warranties settled during the period														(1,076	)		(1,699	)		(3,917	)		(5,111	)
Ending balance	$	4,062		$	4,855		$	4,062		$	4,855		$	4,431		$	4,885		$	4,431		$	4,885

During the year ended February 28, 2019, the Company realigned certain businesses within the organization to lower and contain overhead costs, as well as conducted an aggressive SKU rationalization program to streamline certain product offerings, which resulted in total restructuring expenses of $4,588 for the year ended February 28, 2019, consisting primarily of employee severance. $3,883 of these restructuring charges were not yet settled as of February 28, 2019 and were included in Accrued expenses and other current liabilities. During the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, an additional ~~$497~~$666 and ~~$1,440,~~$2,106, respectively, of the accrual was settled and no additional restructuring expenses were incurred. At ~~August 31,~~November 30, 2019, the remaining restructuring accrual in Accrued expenses and other current liabilities is ~~$2,443.~~

	August 31, 2019		February 28, 2019		November 30, 2019		February 28, 2019
Debt
Domestic credit facility (a)	$	—	$	—	$	—	$	—
Florida mortgage (b)		7,883		8,112		7,738		8,112
Euro asset-based lending obligation (c)		3,922		6,699
Schwaiger mortgage (d)		130		235
Voxx Germany mortgage (e)		2,114		2,588
Euro asset-based lending obligation - VOXX Germany (c)						—		5,972
Euro asset-based lending obligation - Magnat (d)						609		727
Schwaiger mortgage (e)						57		235
Voxx Germany mortgage (f)						—		2,588
Total debt		14,049		17,634		8,404		17,634
Less: current portion of long-term debt		6,665		10,021		1,165		10,021
Long-term debt		7,384		7,613		7,239		7,613
Less: debt issuance costs		1,426		1,837		1,220		1,837
Total long-term debt, net of debt issuance costs	$	5,958	$	5,776	$	6,019	$	5,776

The Company has a senior secured credit facility (the "Credit Facility") that provides for a revolving credit facility with committed availability of up to $140,000, which may be increased, at the option of the Company, up to a maximum of $175,000, and a term loan in the amount of $15,000. The Credit Facility also includes a $15,000 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 entire outstanding balance of the term loan, which is not renewable, was repaid in Fiscal 2018. As of ~~August 31,~~November 30, 2019, there was no balance outstanding under the revolving credit facility. The availability under the revolving credit line of the Credit Facility was ~~$91,935~~$102,454 as of ~~August 31,~~November 30, 2019.

All amounts outstanding under the Credit Facility will mature and become due on April 26, 2021; however, it is subject to acceleration upon the occurrence of an Event of Default (as defined in the Credit 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.

Generally, the Company may designate specific borrowings under the Credit Facility as either Base Rate Loans or LIBOR Rate Loans, except that swingline loans may only be designated as Base Rate Loans. Loans designated as LIBOR Rate Loans bear interest at a rate equal to the then applicable LIBOR rate plus a range of 1.75 - 2.25%. Loans designated as Base Rate loans bear interest at a rate equal to the applicable margin for Base Rate Loans of 0.75 - 1.25% as defined in the agreement. As of ~~August 31,~~November 30, 2019, the weighted average interest rate on the facility was ~~6.00%~~5.50%.

Provided that the Company is in a Compliance Period (the period commencing on that day in which Excess Availability is less than 12.5% of the Maximum Revolver Amount and ending on a day in which Excess Availability is equal to or greater than 12.5% 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 ~~August 31,~~November 30, 2019, the Company was not in a Compliance Period.

The obligations under the loan documents are secured by a general lien on, and security interest in, substantially all of the assets of the borrowers and certain of the guarantors, including accounts receivable, equipment, real estate, general intangibles and inventory. The Company has guaranteed the obligations of the borrowers under the Credit Agreement.

Charges incurred on the unused portion of the Credit Facility during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 totaled ~~$126~~$125 and ~~$252,~~$378, respectively, compared to ~~$125~~$124 and ~~$272~~$396 during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2018, respectively. These charges are included within Interest and bank charges on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income.~~.

The Company has deferred financing costs related to the Credit Facility and a previous amendment and modification of the Credit Facility. These 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) ~~Income~~ over the five-year term of the Credit Facility. During both of the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 and 2018, the Company amortized ~~$197~~$198 and ~~$395~~$593 of these costs, respectively. The net unamortized balance of these deferred financing costs as of ~~August 31,~~November 30, 2019 is ~~$1,224.~~$1,026.

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% ~~(3.71%~~(3.28% at ~~August 31,~~November 30, 2019) 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.

The Company incurred debt financing costs totaling approximately $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) ~~Income~~ over the ten-year term of the Florida Mortgage. The Company amortized $8 and ~~$16~~$24 of these costs during both of the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 and 2018, respectively. The net unamortized balance of these deferred financing costs as of ~~August 31,~~November 30, 2019 is ~~$202.~~$194.

On July 20, 2015, the Company entered into an interest rate swap agreement in order to hedge interest rate exposure related to the Florida Mortgage and pays a fixed rate of 3.48% under the swap agreement (See Note 4).

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, 2020. The rate of interest for the ABL is the three-month Euribor plus 2.3% ~~(1.87%~~(2.30% at ~~August 31,~~November 30, 2019). As of ~~August 31,~~November 30, 2019, ~~the amount~~there is no balance outstanding under this credit facility, as it was repaid using the proceeds received from the sale of Company’s real estate in Pulheim, Germany (see Note 19 and Note 16(f)).

Foreign bank obligations also include an ABL credit facility, for the Company's subsidiary, Magnat, which expires on February 29, 2020. The rate of interest for the ABL is ~~payable on demand, does not exceed~~ the ~~credit limit.~~three-month Euribor plus 2.1% (2.10% at November 30, 2019).

In January 2012, Voxx German Holdings, GmbH purchased a building for the Schwaiger business, entering into a mortgage note payable. The mortgage note bears interest at 3.75% and ~~will be fully~~has subsequently been paid byin full during December 2019.

This balance ~~represents~~represented a mortgage on the land and building housing Voxx Germany's headquarters in Pulheim, Germany, which was entered into in January 2013. The mortgage ~~bears~~bore interest at 2.85%, and was payable in twenty-six quarterly installments, with a final payment due in September 2019. The note was fully paid on September 30, 2019 in conjunction with the sale of the ~~building~~property, a portion of which is being leased by the Company, as it will continue to house the Voxx Germany headquarters at this location (see Note ~~26)~~19).

	Three months ended August 31,					Six months ended August 31,					Three months ended November 30,						Nine months ended November 30,
	2019		2018			2019		2018			2019			2018			2019		2018
Foreign currency gain (loss)	$	130	$	(131	)	$	236	$	204		$	61		$	(41	)	$	297	$	164
Interest income		225		269			615		475			199			312			814		788
Rental income		142		132			284		253			176			133			460		386
Miscellaneous		50		(18	)		1,056		(19	)		(758	)		(144	)		298		(165	)
Total other, net	$	547	$	252		$	2,191	$	913		$	(322	)	$	260		$	1,869	$	1,173

On August 31, 2017, the Company completed its sale of Hirschmann Car Communication GmbH to a subsidiary of TE Connectivity Ltd. The consideration received by the Company was €148,500, or approximately $177,000 based on the exchange rate on the close of business on August 31, 2017 and was subject to adjustment based on the final working capital. Included within miscellaneous for the three and nine months ended November 30, 2019 is a payment of $804 made on November 11, 2019 in settlement of the final working capital calculation.

Included within miscellaneous for the ~~six~~nine months ended ~~August 31,~~November 30, 2019 are the proceeds from a key man life insurance policy in the amount of $1,000 related to a former employee of Klipsch Group, Inc. that Voxx became the beneficiary of in conjunction with the acquisition of Klipsch in Fiscal 2012. At the time of acquisition, the individual was no longer employed by Klipsch and was never an employee of Voxx; however, Voxx has remained the beneficiary of the policy until the individual’s death.

The Company has a subsidiary in Venezuela. Venezuela has experienced significant political and civil unrest, as well as economic instability for several years, and has implemented various foreign currency and price controls. The country has also experienced high rates of inflation over the last several years. The President of Venezuela has the authority to legislate certain areas by decree, which allows the government to nationalize certain industries or expropriate certain companies and property. These factors have had a negative impact on our business and our financial condition. The Company accounts for its Venezuela subsidiary as hyper-inflationary in accordance with the guidelines in ASC 830, "Foreign Currency." A hyper-inflationary economy designation occurs when a country has experienced cumulative inflation of approximately 100 percent or more over a 3-year period. The hyper-inflationary designation requires the local subsidiary in Venezuela to record all transactions as if they were denominated in U.S. dollars. On August 20, 2018, the government devalued the Bolivar Fuerte in an attempt to address continuing hyperinflation, also renaming it the Sovereign Bolivar. As of ~~August 31,~~November 30, 2019, the DICOM rate for the Sovereign Bolivar was approximately ~~20,460~~38,109 bolivars to the U.S. dollar compared to 6186 at ~~August 31,~~November 30, 2018. Total net currency exchange losses for Venezuela of ($1) and ($2) were recorded for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, respectively,

as compared to ($2)1) and ($5)6) for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2018, respectively, and are included in Other income (expense) on the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income.~~.

The Company has certain long-lived assets in Venezuela, which are held for investment purposes. During the second quarter of Fiscal 2019, the Company made an assessment of the recoverability of these properties as a result of the country's continued economic deterioration, which included the significant currency devaluation in August of 2018. The Company estimated the future undiscounted cash flows expected to be received from these properties. The estimate of the future undiscounted cash flows considered the Company’s financial condition and its intent and ability to retain its investments for a period of time sufficient to allow for the recovery of the carrying value. The future undiscounted cash flows did not exceed the net carrying value for the long-lived assets. The estimated fair value of the properties, which also considered the current conditions of the economy in Venezuela, the volatility of the real estate market, and the significant political unrest, resulted in a full non-cash impairment charge of $3,473 for the ~~three and six~~nine months ended ~~August 31,~~November 30, 2018. The non-cash impairment charge is included in Other ~~Income (Expense)~~income (expense) on the Unaudited Consolidated Statements of Operations and Comprehensive (Loss) Income.

On March 1, 2019, ASU No. 2016-02, "Leases (Topic 842)," was adopted by the Company using the modified retrospective approach. The Company adopted the package of practical expedients that allows companies to not reassess historical conclusions related to contracts that contain leases, existing lease classification, and initial direct costs. It did not adopt the hindsight practical expedient. Adoption of the new standard resulted in the recording of additional lease assets and lease liabilities, which totaled $2,227 and $2,243, respectively, on March 1, 2019. The standard did not materially affect the Company's consolidated financial position, results of operations, or cash flows, and did not have an impact on the Company's debt-covenant compliance. The new guidance was applied to all operating and capital leases at the date of initial application. Leases historically referred to as capital leases are now referred to as finance leases under the new guidance.

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. Control of an underlying asset is conveyed if we obtain the rights to direct the use of, and to obtain substantially all of the economic benefit from, the use of the underlying asset. Some of our leases include both lease and non-lease components which are accounted for as a single lease component, as we have elected the practical expedient in ASU 842-10-15-37. Some of our operating lease agreements include variable lease costs, including taxes, common area maintenance or increases in rental costs related to inflation. Such variable payments, other than those dependent upon a market index or rate, are expensed when the obligation for those payments is incurred. Lease expense is recorded in operating expenses in the Consolidated Statement of Operations and Comprehensive (Loss) Income. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with an initial term of 12 months or less which do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise are considered short term leases and are not recorded on the balance sheet. The Company had no short term leases during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019.

Right-of-use assets and lease liabilities are recognized at each lease’s commencement date based on the ~~preset~~present value of its lease payments over its respective lease term. When a borrowing rate is not explicitly available for a lease, our incremental borrowing rate is used based on information available at the lease’s commencement date to determine the present value of its lease payments. Operating lease payments are recognized on a straight-line basis over the lease term.

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 7 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.

~~VOXX International Corporation~~On September 30, 2019, the Company, through its subsidiary Voxx German Holdings GmbH, executed a sale leaseback transaction, selling its real property in Pulheim, Germany to CLM S.A. RL (“the Purchaser”) for €10,920. Net proceeds received from the transaction were approximately $9,500 after transactional costs of $270 and ~~Subsidiaries~~

~~Notes~~repayment of the outstanding mortgage, which was $2,104 on September 30, 2019. The transaction qualified for sale leaseback accounting in accordance with ASC 842. Concurrently with the sale, the Company entered into an operating lease arrangement (“lease”) with the Purchaser for a small portion of the real property to continue to operate the combined Magnat/Klipsch sales office in Germany, with an initial lease term of five years. The Company recognized a gain related to the execution of the sale transaction of $4,057 for the three and nine months ended November 30, 2019, which is recorded in Other income (expense) on the Unaudited Consolidated ~~Financial~~ Statements ~~continued~~of Operations and Comprehensive Income (Loss).

The components of lease cost for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 were as follows:

	Three months ended		Six months ended		Three months ended		Nine months ended
	August 31, 2019		August 31, 2019		November 30, 2019		November 30, 2019
Operating lease cost (a) (c)	$	233	$	459	$	209	$	668
Finance lease cost:
Amortization of right of use assets (a)		117		349		167		516
Interest on lease liabilities (b)		12		24		12		36
Total finance lease cost	$	129	$	373	$	179	$	552

	Six months ended		Nine months ended
	August 31, 2019		November 30, 2019
Non-cash investing and financing activities:
Right of use assets obtained in exchange for operating lease obligations	$	534	$	1,214
Right of use assets obtained in exchange for finance lease obligations		1,024		1,024
Upon the adoption of ASC 842:
Right of use assets recorded in exchange for operating lease obligations	$	2,227	$	2,227
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	434	$	628
Operating cash flows from finance leases	24		36
Finance cash flows from finance leases	310		477

	August 31, 2019			November 30, 2019
Operating Leases
Operating lease, right of use assets	$	2,301		$	2,773
Total operating lease right of use assets	$	2,301		$	2,773
Accrued expenses and other current liabilities	$	560		$	680
Operating lease liabilities, less current portion		1,762			2,127
Total operating lease liabilities	$	2,322		$	2,807
Finance Leases
Property, plant and equipment, gross	$	2,918		$	2,503
Accumulated depreciation		(1,130	)		(1,041	)
Total finance lease right of use assets	$	1,788		$	1,462
Accrued expenses and other current liabilities	$	672		$	647
Finance lease liabilities, less current portion		974			855
Total finance lease liabilities	$	1,646		$	1,502
Weighted Average Remaining Lease Term
Operating leases	4.5 years			4.4 years
Finance leases	3.9 years			3.9 years
Weighted Average Discount Rate
Operating leases		6.24	%		6.08	%
Finance leases		3.87	%		3.87	%

At ~~August 31,~~November 30, 2019, maturities of lease liabilities for each of the succeeding years were as follows:

	Operating Leases		Finance Leases		Operating Leases		Finance Leases
2020	$	684		711	$	829		681
2021		670		525		803		483
2022		547		318		616		274
2023		273		158		400		118
2024		228		—		333		—
Thereafter		271		—		224		—
Total lease payments		2,673		1,712		3,205		1,556
Less imputed interest		351		66		398		54
Total	$	2,322		1,646	$	2,807		1,502

As of ~~August 31,~~November 30, 2019, the Company has not entered into any lease agreements that have not yet commenced.

At February 28, 2019, the Company was obligated under non-cancelable operating leases for equipment, as well as warehouse and office facilities for minimum annual rental payments, for each of the succeeding years, as follows:

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 Sheet at ~~August 31,~~November 30, 2019. Rental income earned by the Company for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 was ~~$142~~$176 and ~~$284,~~$460, respectively, which is recorded within Other income (expense).

			Shares Authorized				Shares Outstanding										Shares Authorized				Shares Outstanding
Security	Par Value		August 31, 2019		February 28, 2019		August 31, 2019		February 28, 2019		Voting Rights per Share		Liquidation Rights		Par Value		November 30, 2019		February 28, 2019		November 30, 2019		February 28, 2019		Voting Rights per Share		Liquidation Rights
Preferred Stock	$	50.00		50,000		50,000		—		—		—	$50 per share		$	50.00		50,000		50,000		—		—		—	$50 per share
Series Preferred Stock	$	0.01		1,500,000		1,500,000		—		—		—		—	$	0.01		1,500,000		1,500,000		—		—		—		—
Class A Common Stock	$	0.01		60,000,000		60,000,000		21,929,788		21,938,100		1	Ratably with Class B		$	0.01		60,000,000		60,000,000		21,711,335		21,938,100		1	Ratably with Class B
Class B Common Stock	$	0.01		10,000,000		10,000,000		2,260,954		2,260,954		10	Ratably with Class A		$	0.01		10,000,000		10,000,000		2,260,954		2,260,954		10	Ratably with Class A
Treasury Stock at cost	at cost			2,376,406		2,168,094	N/A		N/A		N/A				at cost			2,594,859		2,168,094	N/A		N/A		N/A

In April 2019, the Company was authorized by the Board of Directors to increase the number of Class A Common Stock available for repurchase in the open market to 3,000,000. During the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, the Company repurchased ~~208,312~~218,453 and 426,765 shares, respectively, for an aggregate cost of ~~$983.~~$1,057 and $2,040, respectively. At ~~August 31,~~November 30, 2019, the Company's remaining authorized share repurchase for its Class A Common Stock was ~~2,791,688~~2,573,235 shares.

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:

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 21, 2019, this promissory note was amended and restated to allow EyeLock LLC to borrow up to $55,000. Through March 1, 2019, interest on the outstanding principal of the loan accrued at 10%. From March 1, 2019 forward, interest will accrue at 2.5%. The amended and restated promissory note is due on August 31, 2020. 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 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.

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 ~~August 31,~~November 30, 2019 and February 28, 2019:

	August 31, 2019			February 28, 2019			November 30, 2019			February 28, 2019
Assets	(unaudited)						(unaudited)
Current assets:
Cash and cash equivalents	$	81		$	3		$	—		$	3
Accounts receivable, net		183			363			150			363
Inventory, net		303			(27	)		3,415			(27	)
Receivables from vendors		16			—			5			—
Prepaid expenses and other current assets		242			322			262			322
Total current assets		825			661			3,832			661
Property, plant and equipment, net		90			120			73			120
Intangible assets, net		31,533			33,064			30,768			33,064
Other assets		166			253			116			253
Total assets	$	32,614		$	34,098		$	34,789		$	34,098
Liabilities and Partners' Deficit
Current liabilities:
Accounts payable	$	350		$	1,122		$	3,160		$	1,122
Interest payable to VOXX		9,337			8,729			9,551			8,729
Accrued expenses and other current liabilities		864			1,030			883			1,030
Due to VOXX		49,996			44,937			51,941			44,937
Total current liabilities		60,547			55,818			65,535			55,818
Other long-term liabilities		1,200			1,200			1,200			1,200
Total liabilities		61,747			57,018			66,735			57,018
Commitments and contingencies
Partners' deficit:
Capital		41,416			41,416			41,416			41,416
Retained losses		(70,549	)		(64,336	)		(73,362	)		(64,336	)
Total partners' deficit		(29,133	)		(22,920	)		(31,946	)		(22,920	)
Total liabilities and partners' deficit	$	32,614		$	34,098		$	34,789		$	34,098

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) ~~Income~~ for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, respectively:

	For the three months ended August 31,						For the six months ended August 31,						For the three months ended November 30,						For the nine months ended November 30,
	2019			2018			2019			2018			2019			2018			2019			2018
Net sales	$	253		$	93		$	274		$	216		$	138		$	331		$	412		$	547
Cost of sales		343			26			414			36			178			23			592			59
Gross profit		(90	)		67			(140	)		180			(40	)		308			(180	)		488
Operating expenses:
Selling		161			296			362			624			173			301			535			925
General and administrative		1,157			1,317			2,377			2,543			1,123			1,202			3,500			3,745
Engineering and technical support		1,354			1,828			2,719			3,618			1,232			1,982			3,951			5,600
Total operating expenses		2,672			3,441			5,458			6,785			2,528			3,485			7,986			10,270
Operating loss		(2,762	)		(3,374	)		(5,598	)		(6,605	)		(2,568	)		(3,177	)		(8,166	)		(9,782	)
Other (expense) income:
Interest and bank charges		(315	)		(982	)		(615	)		(1,887	)		(324	)		(1,032	)		(939	)		(2,919	)
Other, net														79			—			79			—
Total other (expense) income, net														(245	)		(1,032	)		(860	)		(2,919	)
Loss before income taxes		(3,077	)		(4,356	)		(6,213	)		(8,492	)		(2,813	)		(4,209	)		(9,026	)		(12,701	)
Income tax expense		—			—			—			—			—			—			—			—
Net loss	$	(3,077	)	$	(4,356	)	$	(6,213	)	$	(8,492	)	$	(2,813	)	$	(4,209	)	$	(9,026	)	$	(12,701	)

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

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

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

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

The accounting principles applied at the consolidated financial statement level are generally the same as those applied at the operating segment level and there are no material intersegment sales. The segments are allocated interest expense, based upon a pre-determined formula, which utilizes a percentage of each operating segment's intercompany balance, which is offset in Corporate/Eliminations.

	Automotive Electronics		Consumer Electronics			Biometrics			Corporate/ Eliminations			Total			Automotive Electronics		Consumer Electronics			Biometrics			Corporate/ Eliminations			Total
Three Months Ended August 31, 2019
Three Months Ended November 30, 2019
Net sales															$	29,985	$	79,914		$	138		$	75		$	110,112
Equity in income of equity investees																967		—			—			—			967
Interest expense and bank charges																137		2,560			326			(2,272	)		751
Depreciation and amortization expense																187		1,093			783			1,247			3,310
Income (loss) before income taxes (a)																92		9,583			(2,813	)		(2,775	)		4,087

Three Months Ended November 30, 2018
Net sales	$	26,845	$	63,034		$	254		$	113		$	90,246		$	45,053	$	83,927		$	400		$	257		$	129,637
Equity in income of equity investees		1,265		—			—			—			1,265			1,695		—			—			—			1,695
Interest expense and bank charges		118		2,469			313			(2,013	)		887			267		2,819			1,033			(2,945	)		1,174
Depreciation and amortization expense		193		1,122			784			1,196			3,295			186		1,137			789			775			2,887
Income (loss) before income taxes		316		(1,067	)		(3,042	)		(2,256	)		(6,049	)		5,596		5,597			(4,201	)		(501	)		6,491

Three Months Ended August 31, 2018
Nine Months Ended November 30, 2019
Net sales	$	40,006	$	68,328		$	184		$	349		$	108,867		$	86,472	$	206,601		$	398		$	341		$	293,812
Equity in income of equity investees		1,637		—			—			—			1,637			3,672		—			—			—			3,672
Interest expense and bank charges		239		2,722			982			(2,826	)		1,117			354		7,427			941			(6,087	)		2,635
Depreciation and amortization expense		224		1,157			792			790			2,963			567		3,356			2,352			3,622			9,897
Income (loss) before income taxes (a)		1,010		(10,432	)		(4,335	)		(407	)		(14,164	)		869		8,976			(8,835	)		(7,989	)		(6,979	)

Six Months Ended August 31, 2019
Nine Months Ended November 30, 2018
Net sales	$	56,487	$	126,687		$	260		$	266		$	183,700		$	124,705	$	213,159		$	812		$	683		$	339,359
Equity in income of equity investees		2,705		—			—			—			2,705			5,146		—			—			—			5,146
Interest expense and bank charges		217		4,867			615			(3,815	)		1,884			752		8,218			2,919			(8,498	)		3,391
Depreciation and amortization expense		380		2,263			1,569			2,375			6,587			649		3,451			2,372			2,339			8,811
Income (loss) before income taxes		777		(607	)		(6,022	)		(5,214	)		(11,066	)

Six Months Ended August 31, 2018
Net sales	$	79,652	$	129,232		$	412		$	426		$	209,722
Equity in income of equity investees		3,451		—			—			—			3,451
Interest expense and bank charges		484		5,398			1,887			(5,552	)		2,217
Depreciation and amortization expense		463		2,314			1,584			1,564			5,925
Income (loss) before income taxes (a)		5,524		(12,131	)		(8,458	)		(2,764	)		(17,829	)
Income (loss) before income taxes (b)																11,121		(6,535	)		(12,658	)		(3,266	)		(11,338	)

On March 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers, and all the related amendments (“ASC Topic 606”), using the modified retrospective method. In addition, we elected to apply certain of the permitted practical expedients within the revenue recognition guidance and make certain accounting policy elections, including those related to significant financing components, sales taxes and shipping and handling activities. Most of the changes resulting from the adoption of ASC Topic 606 on March 1, 2018 were changes in presentation within the Consolidated Balance Sheet. Therefore, while we made adjustments to certain opening balances on our March 1, 2018 Consolidated Balance Sheet, we made no adjustment to opening Retained Earnings. The impact of the adoption of ASC Topic 606 has not had a material effect on our net income; however, adoption did increase the level of disclosures concerning our net sales.

The core principle of ASC Topic 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.

We account for a contract or purchase order when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the product passes to the customer, which is upon shipment, unless otherwise specified within the customer contract or on the purchase order as delivery, and is recognized at the amount that reflects the consideration the Company expects to receive for the products sold, including various forms of discounts. When revenue is recorded, estimates of returns are made and recorded as a reduction of revenue. Contracts with customers are evaluated to determine if there are separate performance obligations related to timing of product shipment that will be satisfied in different accounting periods. When that is the case, revenue is deferred until each performance obligation is met. No performance obligation related amounts were deferred as of November 30, 2019 or November 30, 2018. Within our Automotive Electronics segment, while the majority of the contracts we enter into with Original Equipment Manufacturers (“OEM”) 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.

Certain taxes assessed by governmental authorities on revenue producing transactions, such as value added taxes, are excluded from revenue and recorded on a net basis.

The Company’s primary source of revenue is derived from the manufacture and distribution of consumer electronic, automotive electronic, and biometric products. Our consumer electronics products primarily consist of finished goods sold to retail and consumer customers, consisting of premium audio products and other consumer electronic products. Our automotive electronic products are sold both to OEM and aftermarket customers. Our biometrics products are primarily sold to commercial customers. We recognize revenue for sales to our customers when transfer of control of the related good or service has occurred. All of our revenue was recognized under the point in time approach for the three and nine months ended November 30, 2019. Contract terms with certain of our OEM customers could result in 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.

Our typical payment terms vary based on the customer and the type of goods and services in the contract or purchase order. The period of time between invoicing and when payment is due is not significant. Amounts billed and due from our customers are classified as receivables on the Consolidated Balance Sheets. As our standard payment terms are less than one year, we have elected the practical expedient under ASC paragraph 606-10-32-18 to not assess whether a contract has a significant financing component.

Our customers take delivery of goods, and they are recognized as revenue at the time of transfer of control to the customer, which is usually at the time of shipment, unless otherwise specified in the customer contract or purchase order. This determination is based on applicable shipping terms, as well as the consideration of other indicators, including timing of when the Company has a present right to payment, when physical possession of products is transferred to customers, when the customer has the significant risks and rewards of ownership of the asset, and any provisions in contracts regarding customer acceptance.

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.

We account for a contract or purchase order when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the product passes to the customer, which is upon shipment, unless otherwise specified within the customer contract or on the purchase order as delivery, and is recognized at the amount that reflects the consideration the Company expects to receive for the products sold, including various forms of discounts. When revenue is recorded, estimates of returns are made and recorded as a reduction of revenue. Contracts with customers are evaluated to determine if there are separate performance obligations related to timing of product shipment that will be satisfied in different accounting periods. When that is the case, revenue is deferred until each performance obligation is met. No performance obligation related amounts were deferred as of August 31, 2019 or August 31, 2018. Within our Automotive Electronics segment, while the majority of the contracts we enter into with Original Equipment Manufacturers (“OEM”) 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.

~~Certain taxes assessed by governmental authorities on revenue producing transactions, such as value added taxes, are excluded from revenue and recorded on a net basis.~~

The Company’s primary source of revenue is derived from the manufacture and distribution of consumer electronic, automotive electronic, and biometric products. Our consumer electronics products primarily consist of finished goods sold to retail and consumer customers, consisting of premium audio products and other consumer electronic products. Our automotive electronic products are sold both to OEM and aftermarket customers. ~~Our biometrics products are primarily sold to commercial customers.~~ We recognize revenue for sales to our customers when transfer of control of the related good or service has occurred. All of our revenue was recognized under the point in time approach for the three and six months ended August 31, 2019. Contract terms with certain of our OEM customers could result in 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.

While unit prices are generally fixed, we provide variable consideration for certain of our customers, typically in the form of promotional incentives at the time of sale. We utilize the most likely amount consistently to estimate the effect of uncertainty on the amount of variable consideration to which we would be entitled. The most likely amount method considers the single most likely amount from a range of possible consideration amounts. The most likely amounts are based upon the contractual terms of the incentives and historical experience with each customer. We record estimates for cash discounts, promotional rebates, and other promotional allowances in the period the related revenue is recognized (“Customer Credits”). The provision for Customer Credits is recorded as a reduction from gross sales and reserves for Customer Credits are presented within Accrued sales incentives on the Consolidated Balance Sheets. Actual Customer Credits have not differed materially from estimated amounts for each period presented. Amounts billed to customers for shipping and handling are included in Net sales and costs associated with shipping and handling are included in Cost of sales. We have concluded that our estimates of variable consideration are not constrained according to the definition within the standard. Additionally, the Company applies the practical expedient in ASC paragraph 606-10-25-18B and accounts for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment activity, rather than a separate performance obligation.

Under ASC Topic 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, 2019 and February 28, 2019, the balance of the return asset was $1,300 and $1,962, respectively, and the balance of the refund liability was $3,253 and $4,415, 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 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 has no contract asset or contract liability balances at November 30, 2019 or February 28, 2019.

The Company operates in three reportable segments: Automotive Electronics, Consumer Electronics, and Biometrics. ASC Topic 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, 2019 and 2018:

recognized (“Customer Credits”). The provision for Customer Credits is recorded as a reduction from gross sales and reserves for Customer Credits are presented within Accrued sales incentives on the Consolidated Balance Sheets. Actual Customer Credits have not differed materially from estimated amounts for each period presented. Amounts billed to customers for shipping and handling are included in Net sales and costs associated with shipping and handling are included in Cost of sales. We have concluded that our estimates of variable consideration are not constrained according to the definition within the standard. Additionally, the Company applies the practical expedient in ASC paragraph 606-10-25-18B and accounts for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment activity, rather than a separate performance obligation.

Under ASC Topic 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 (Loss) Income. As of August 31, 2019 and February 28, 2019, the balance of the return asset was $1,121 and $1,962, respectively, and the balance of the refund liability was $2,990 and $4,415, respectively, and are presented within Prepaid expenses and other current assets and Accrued expenses and other current liabilities, respectively, on the Consolidated Balance Sheets.

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, 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 Company does not believe that any of its current outstanding litigation matters will have a material adverse effect on the Company's financial statements, individually, or in the aggregate.

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 June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” and subsequent amendments to the guidance, ASU 2018-19 in November 2018, ASU 2019-04 in April 2019, ASU 2019-05 in May 2019, and ASU 2019-10 and ASU 2019-11 in November 2019. The standard changes how entities will measure credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. The amendment will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2018-19 clarifies that receivables arising from operating leases are accounted for using lease guidance and not as financial instruments. ASU 2019-04 clarifies that equity instruments without readily determinable fair values for which an entity has elected the measurement alternative should be remeasured to fair value as of the date that an observable transaction occurred. ASU 2019-05 provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. ASU 2019-10 delayed the effective date of ASU 2016-13 for smaller reporting companies (as defined by the SEC) and other non-SEC reporting entities to fiscal years beginning after December 15, 2022, including interim periods within those fiscal periods. ASU 2019-11 was issued to provide clarification guidance in the following areas: (i) expected recoveries for purchased financial assets with credit deterioration; (ii) transition relief for troubled debt restructurings; (iii) disclosures related to accrued interest receivables; (iv) financial assets secured by collateral maintenance provisions; and (v) conforming amendment to subtopic 805-20. The amendments should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods therein. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." Under the new guidance, if a reporting unit's carrying value amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard eliminates today's requirement to calculate goodwill impairment using Step 2, which calculates an impairment charge by comparing the implied fair value of goodwill with its carrying amount. The standard does not change the guidance on completing Step 1 of the goodwill impairment test. The amendments in this ASU are effective for annual or any interim goodwill impairments tests in fiscal years beginning after December 15, 2019 and should be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of the new standard on its consolidated financial statements.

requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for public companies for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company does not anticipate that ASU 2018-13 will have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." ASU 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and added additional disclosures. This ASU is effective for public companies for annual reporting periods and interim periods within those annual periods beginning after December 15, 2020. The amendments in ASU 2018-14 must be applied on a retrospective basis. The Company is currently assessing the effect, if any, that ASU 2018-14 will have on its consolidated financial statements.

In October 2018, the FASB issued ASU No. 2018-17, “Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities.” This ASU requires entities to consider indirect interests held through related parties under common control on a proportional basis, rather than as the equivalent of a direct interest in its entirety when determining whether a decision-making fee is a variable interest. The ASU is effective for fiscal years beginning after December 15, 2019 and for interim periods therein, with early adoption permitted. The Company does not anticipate that ASU 2018-17 will have a material impact on its consolidated financial statements.

In November 2018, the FASB issued ASU No. 2018-18, "Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606." The ASU clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer. This ASU is effective for public companies for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company does not anticipate that ASU 2018-18 will have a material impact on its consolidated financial statements.

In July 2019, the FASB issued ASU No. 2019-07, “Codification Updates to SEC Sections - Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization and Miscellaneous Updates (SEC Update).” ASU 2019-07 clarifies or improves the disclosure and presentation requirements of a variety of codification topics by aligning them with the SEC’s regulations, thereby eliminating redundancies and making the codification easier to apply. This ASU is effective upon issuance and did not have a significant impact on the Company’s consolidated financial statements and related disclosures.

In November 2019, the FASB issued ASU No. 2019-08, “Compensation – Stock Compensation (Topic 718).” ASU 2019-08 requires that an entity measure and classify share-based payment awards granted to a customer by applying the guidance in Topic 718. The amount recorded as a reduction of the transaction price is required to be measured on the basis of the grant-date fair value of the share-based payment award in accordance with Topic 718. The amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those years. The Company does not anticipate that this ASU will have a material impact on its consolidated financial statements.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” and subsequent amendments to the guidance, ASU 2018-19 in November 2018, ASU 2019-04 in April 2019, and ASU 2019-05 in May 2019. The standard changes how entities will measure credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. The amendment will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2018-19 clarifies that receivables arising from operating leases are accounted for using lease guidance and not as financial instruments. ASU 2019-04 clarifies that equity instruments without readily determinable fair values for which an entity has elected the measurement alternative should be remeasured to fair value as of the date that an observable transaction occurred. ASU 2019-05 provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. The amendments should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." The ASU modifies the disclosure requirements in Topic 820, Fair Value Measurement, by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for public companies for annual reporting periods and interim periods within

~~those annual periods beginning after December 15, 2019. The Company is currently evaluating the effect, if any, that ASU 2018-13 will have on its consolidated financial statements.~~

In October 2018, the FASB issued ASU No. 2018-17, “Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities.” This ASU requires entities to consider indirect interests held through related parties under common control on a proportional basis, rather than as the equivalent of a direct interest in its entirety when determining whether a decision-making fee is a variable interest. The ASU is effective for fiscal years beginning after December 15, 2019 and for interim periods therein, with early adoption permitted. The Company is currently evaluating the effect, if any, that ASU 2018-17 will have on its consolidated financial statements.

In November 2018, the FASB issued ASU No. 2018-18, "Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606." The ASU clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer. This ASU is effective for public companies for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company is currently evaluating the effect, if any, that ASU 2018-18 will have on its consolidated financial statements.

~~In July 2019~~, ~~the FASB issued ASU No. 2019-07~~, ~~“Codification Updates to SEC Sections - Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33~~-~~10532~~, ~~Disclosure Update and Simplification, and Nos. 33~~-~~10231 and 33~~-~~10442~~, Investment Company Reporting Modernization and Miscellaneous Updates (SEC Update).” ASU 2019-07 clarifies or improves the disclosure and presentation requirements of a variety of codification topics by aligning them with the SEC’s regulations, thereby eliminating redundancies and making the codification easier to apply. This ASU is effective upon issuance and did not have a significant impact on the Company’s consolidated financial statements and related disclosures.

On September 30, 2019, the Company, through its subsidiary Voxx German Holdings GmbH (the “Seller”), completed a transaction to sell its real property in Pulheim, Germany to CLM S.A. RL (“the Purchaser”). Net proceeds received from the transaction were approximately $9,700 after transactional costs and repayment of the outstanding mortgage, which was $2,114 on September 30, 2019. At closing, the Seller entered into a business rent agreement (“lease”) with the Purchaser for a portion of the real property to continue to operate the combined Magnat/Klipsch sales office in Germany.

On September 30, 2019, HF Company (“HF”) notified VOXX International Corporation (the “Company”) that it was rescinding the Stock Purchase Agreement (the “Agreement”) entered into on June 7, 2019 for the Company’s subsidiary, Voxx German Accessories Holdings GmbH (“VGAH”) as a result of the non-fulfillment of certain conditions precedent to closing, including HF Company’s inability to obtain financing for the transaction purchase price. The rescission of the Agreement also caused the rescission of an option with respect to VGAH’s real property in Langenzenn, which had granted HF the right to purchase the property subject to certain contingencies.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain information in this Quarterly Report on Form 10-Q would constitute forward-looking statements, including, but not limited to, information relating to the future performance and financial condition of the Company, the plans and objectives of the Company’s management and the Company’s assumptions regarding such performance and plans that are forward-looking in nature and involve certain risks and uncertainties. Actual results could differ materially from such forward-looking information.

We begin Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") with an overview of the business. This is followed by a discussion of the Critical Accounting Policies and Estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results. In the next section, we discuss our results of operations for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 compared to the three and ~~six~~nine months ended ~~August 31,~~November 30, 2018. Next, we present EBITDA, Adjusted EBITDA and Diluted Adjusted EBITDA per common share attributable to Voxx for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 compared to the three and ~~six~~nine months ended ~~August 31,~~November 30, 2018 in order to provide a useful and appropriate supplemental measure of our performance. We then provide an analysis of changes in our balance sheets and cash flows, and discuss our financial commitments in the sections entitled "Liquidity and Capital Resources." We conclude this MD&A with a discussion of "Related Party Transactions" and "Recent Accounting Pronouncements."

Unless specifically indicated otherwise, all amounts presented in our MD&A below are in thousands, except share and per share data.

VOXX International Corporation ("Voxx," "We," "Our," "Us" or the "Company") is a leading international manufacturer and distributor operating in the Automotive Electronics, Consumer Electronics, and Biometrics industries. The Company has widely diversified interests, with more than 30 global brands that it has acquired and grown throughout the years, achieving a powerful international corporate image and creating a vehicle for each of these respective brands to emerge with its own identity. We conduct our business through sixteen wholly-owned subsidiaries: Audiovox Atlanta Corp., VOXX Electronics Corporation, VOXX Accessories Corp., VOXX German Holdings GmbH ("Voxx Germany"), Audiovox Canada Limited, Voxx Hong Kong Ltd., Audiovox International Corp., Audiovox Mexico, S. de R.L. de C.V. ("Voxx Mexico"), Code Systems, Inc., Oehlbach Kabel GmbH ("Oehlbach"), Schwaiger GmbH ("Schwaiger"), Invision Automotive Systems, Inc. ("Invision"), Klipsch Holding LLC ("Klipsch"), Omega Research and Development, LLC ("Omega"), Voxx Automotive Corp., and Audiovox Websales LLC, as well as a majority owned subsidiary, EyeLock LLC ("EyeLock"). We market our products under the Audiovox® brand name and other brand names and licensed brands, such as 808®, Acoustic Research®, Advent®, Car Link®, Chapman®, Code-Alarm®, Crimestopper™ Discwasher®, Energy®, Heco®, Invision®, Jamo®, Klipsch®, Mac Audio^™, Magnat®, Mirage®, myris®, Oehlbach®, Omega®, Prestige®, Project Nursery®, RCA®, RCA Accessories, Rosen®, Schwaiger®, Terk® and Voxx Automotive, as well as private labels through a large domestic and international distribution network. We also function as an OEM ("Original Equipment Manufacturer") supplier to several customers, as well as market a number of products under exclusive distribution agreements, such as SiriusXM satellite radio products.

We believe our segments may have expanding market opportunities with certain levels of volatility related to domestic and international markets, new car sales, increased competition by manufacturers, private labels, technological advancements, discretionary consumer spending and general economic conditions. Also, all of our products are subject to price fluctuations which could affect the carrying value of inventories and gross margins in the future.

Our objective is to continue to grow our business by acquiring new brands, embracing new technologies, expanding product development and applying this to a continued stream of new products that should increase gross margins and improve operating income. In addition, it is our intention to continue to acquire synergistic companies that would allow us to leverage our overhead, penetrate new markets and expand existing product categories through our business channels. Notwithstanding the above, if the appropriate opportunity arises, the Company will explore the potential divestiture of a product line or business.

There were no acquisitions or dispositions during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019.

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in those financial statements. These judgments can be subjective and complex, and consequently, actual results could differ from those estimates. Our most critical accounting policies and estimates relate to revenue recognition; accrued sales incentives; accounts receivable reserves; inventory valuation; valuation of long-lived assets; valuation and impairment assessment of goodwill, trademarks, and other intangible assets; warranties; stock-based compensation; recoverability of deferred tax assets; and the reserve for uncertain tax positions at the date of the consolidated financial statements. A summary of the Company's critical accounting policies is identified in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company's Form 10-K for the fiscal year ended February 28, 2019. Since February 28, 2019, there have been no changes in our critical accounting policies or changes to the assumptions and estimates related to them, with the exception of the Company’s use of the discrete method of estimating its U.S. tax provision (benefit) beginning in the second quarter of Fiscal 2020 (see Note 12).

As you read this discussion and analysis, refer to the accompanying Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income,~~, which present the results of our operations for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 and 2018.

The following tables set forth, for the periods indicated, certain statements of operations data for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 and 2018.

	August 31,										November 30,
	2019		2018		$ Change			% Change			2019		2018		$ Change			% Change
Three Months Ended
Automotive Electronics	$	26,845	$	40,006	$	(13,161	)		(32.9	)%	$	29,985	$	45,053	$	(15,068	)		(33.4	)%
Consumer Electronics		63,034		68,328		(5,294	)		(7.7	)%		79,914		83,927		(4,013	)		(4.8	)%
Biometrics		254		184		70			38.0	%		138		400		(262	)		(65.5	)%
Corporate		113		349		(236	)		(67.6	)%		75		257		(182	)		(70.8	)%
Total net sales	$	90,246	$	108,867	$	(18,621	)		(17.1	)%	$	110,112	$	129,637	$	(19,525	)		(15.1	)%

Six Months Ended
Nine Months Ended
Automotive Electronics	$	56,487	$	79,652	$	(23,165	)		(29.1	)%	$	86,472	$	124,705	$	(38,233	)		(30.7	)%
Consumer Electronics		126,687		129,232		(2,545	)		(2.0	)%		206,601		213,159		(6,558	)		(3.1	)%
Biometrics		260		412		(152	)		(36.9	)%		398		812		(414	)		(51.0	)%
Corporate		266		426		(160	)		(37.6	)%		341		683		(342	)		(50.1	)%
Total net sales	$	183,700	$	209,722	$	(26,022	)		(12.4	)%	$	293,812	$	339,359	$	(45,547	)		(13.4	)%

Automotive sales represented ~~29.7%~~27.2% and ~~30.7%~~29.4% of the net sales for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, respectively, compared to ~~36.7%~~34.8% and ~~38.0%~~36.7% in the respective prior year periods. Sales in this segment decreased during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 as compared to the prior year due to various factors, including a decline in sales of the Company’s EVO rear seat entertainment product line, which was due in part to launch delays for certain vehicle models, as well as slower sales for certain programs that began in the prior year and the deletion of one planned program, which is attributable to a softening of global automotive industry sales in both periods. The Company’s OEM security and remote start sales also declined during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 as a result of competition, as well as the discontinuation of passive entry programs with one of the Company’s customers. ~~Additionally, sales~~Sales of aftermarket satellite radio and headrest products have declined in the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, as compared to the prior year, as a result of an increase in standard factory equipped vehicles with these options, as well as due to price competition for aftermarket headrest products. Additionally, during the three and nine months ended November 30, 2019, the Company made a non-refundable up-front payment to one of its customers in anticipation of a future OEM program contract, which resulted in a reduction of revenue. Offsetting the sales declines in this segment for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 were increases in sales of certain aftermarket safety and security products as compared to the prior year periods.

Consumer Electronics sales represented ~~69.8%~~72.6% and ~~69.0%~~70.3% of our net sales for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, respectively, compared to ~~62.8%~~64.7% and ~~61.6%~~62.8% in the comparable prior year periods. Sales decreased for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 as compared to the prior year due to several factors. The Company experienced decreases in sales of certain products, such as in the ~~its~~ Project Nursery line, as a result of the elimination of baby video ~~monitors, and~~monitors; in wireless and bluetooth speakers, due a reduction in product placement with one of the Company’s larger customers; and in karaoke products, due to a one time holiday sale to one of the Company’s customers ~~and~~in the ~~timing of purchases by another.~~prior year that did not repeat in the current fiscal year. The Company also continued to see a decline in sales of certain hook-up and power products, as well as headphones and remotes, as a result of changes in customer demand and technology, and due to the Company’s continuing rationalization of SKU’s with the goal of limiting sales of lower margin ~~products.~~products, and a decrease in sales of smart home products as the Company is exiting this category. Within Europe, the Company experienced decreases in sales across all product lines, as well as in the DIY business during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 as a result of a slowdown in the European market. For the three months ended ~~August 31,~~November 30, 2019, there was also a decrease in sales of the Company’s premium home separate speaker products, as a result of prior year load-in sales of two new product lines that launched during the second quarter of Fiscal 2019 that did not repeat in the current year period. Offsetting these decreases, the Company had an increase in sales within both of its premium mobility and premium wireless and bluetooth speaker categories as a result of the launch of new lines of soundbars and wireless earbuds, as well as stronger sales of several existing products. Additional distribution partners for the Company’s premium commercial speaker products have also had a favorable impact on sales for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019. ~~Both reception and karaoke~~Reception product sales were up for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 as a result of expanded SKU offerings with certain customers and stronger market share, and sales of the Company’s activity bands have increased year over year as a result of increased motion program participants, as well as additional product offerings for participants, including the Apple ~~watch.~~watch and Fitbit. For the ~~six~~nine months ended ~~August 31,~~November 30, 2019, the Company’s premium home separate speaker product sales increased as a result of the continued success of its new domestic product lines that launched during the second quarter of Fiscal 2019, as well as due to a new distribution partnership.

Biometrics sales represented ~~0.3% and~~ 0.1% of our net sales for both the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, ~~respectively,~~ compared to 0.3% and 0.2% in ~~both of~~ the ~~comparable~~respective prior year periods. This segment experienced ~~an increase~~a decrease in product sales ~~of its Nano NXT perimeter access product~~ for the three and nine

months ended ~~August 31,~~November 30, 2019 as a result of ~~design improvements made to~~its product mix, as the ~~product. Additionally,~~Company was selling more of its higher dollar Hbox products during the three and nine months ended November 30, 2018. During the three and nine months ended November 30, 2019, the Company began selling its EXT outdoor perimeter access product, ~~during~~as well as an updated version of its Nano NXT perimeter access product, which are both at a lower price point and have not yet achieved the ~~second quarter of Fiscal 2020, which was not available in the~~sales volumes to surpass prior ~~fiscal year. During the first quarter of Fiscal 2020, the segment did not have inventory as~~

~~the NNXT product sold out in the prior fiscal year. This resulted in the overall decrease in~~year sales ~~for the Biometrics segment for the six months ended August 31, 2019 as compared to the prior year.~~dollars.

	August 31,												November 30,
	2019			2018			$ Change			% Change			2019			2018			$ Change			% Change
Three Months Ended
Automotive Electronics	$	5,577		$	10,070		$	(4,493	)		(44.6	)%	$	6,023		$	11,467		$	(5,444	)		(47.5	)%
		20.8	%		25.2	%								20.1	%		25.5	%
Consumer Electronics		18,293			20,540			(2,247	)		(10.9	)%		25,627			26,662			(1,035	)		(3.9	)%
		29.0	%		30.1	%								32.1	%		31.8	%
Biometrics		(57	)		100			(157	)		(157.0	)%		(39	)		322			(361	)		(112.1	)%
		(22.4	)%		54.3	%								(28.3	)%		80.5	%
Corporate		(44	)		353			(397	)		(112.5	)%		(147	)		472			(619	)		(131.1	)%
	$	23,769		$	31,063		$	(7,294	)		(23.5	)%	$	31,464		$	38,923		$	(7,459	)		(19.2	)%
		26.3	%		28.5	%								28.6	%		30.0	%

Six Months Ended
Nine Months Ended
Automotive Electronics	$	12,205		$	20,069		$	(7,864	)		(39.2	)%	$	18,228		$	31,537		$	(13,309	)		(42.2	)%
		21.6	%		25.2	%								21.1	%		25.3	%
Consumer Electronics		37,413			37,992			(579	)		(1.5	)%		63,040			64,654			(1,614	)		(2.5	)%
		29.5	%		29.4	%								30.5	%		30.3	%
Biometrics		52			241			(189	)		(78.4	)%		13			562			(549	)		(97.7	)%
		20.0	%		58.5	%								3.3	%		69.2	%
Corporate		108			438			(330	)		(75.3	)%		(39	)		910			(949	)		(104.3	)%
	$	49,778		$	58,740		$	(8,962	)		(15.3	)%	$	81,242		$	97,663		$	(16,421	)		(16.8	)%
		27.1	%		28.0	%								27.7	%		28.8	%

Gross margin percentages for the Company have decreased ~~220~~140 and 90110 basis points for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 as compared to the three and ~~six~~nine months ended ~~August 31,~~November 30, 2018, respectively.

Gross margin percentages in the Automotive Electronics segment decreased ~~440~~540 and ~~360~~420 basis points for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, as compared to the respective prior year periods. The decrease in margins was driven primarily by the declines in higher margin OEM security, remote start, and rear seat entertainment sales, which also resulted in lower absorption of fixed overhead costs in the current year periods, further decreasing margins for the segment. In addition, there was a decline in aftermarket headrest product sales, which typically generate higher margins for the segment. Margins have also been negatively affected during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 by tariff increases, as certain of the Company’s products are manufactured in China, while production of certain other products were relocated to other countries with higher labor costs. During the three and nine months ended November 30, 2019, the Company also made a non-refundable up-front payment to a customer in anticipation of a future OEM program contract, which negatively impacted margins. As an offset to these margin declines during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, the Automotive Electronics segment experienced declines in satellite radio sales, which contribute lower margins to the group, while increased sales of certain aftermarket security products contributed favorably to margins for the three and ~~six~~nine month periods.

Gross margin percentages in the Consumer Electronics segment ~~decreased 110~~increased 30 and 20 basis points for the three and nine months ended ~~August 31,~~November 30, 2019, ~~and increased 10 basis points for the six months ended August 31, 2019,~~respectively, as compared to the ~~respective~~ prior year periods. Margin increases during the three and nine months ended November 30, 2019 were driven in part by increased sales of the Company’s high margin premium wireless and bluetooth speakers, mobility products, and commercial speakers. For the nine months ended November 30, 2019, margins were also positively impacted by the Company’s premium mobility products as a result of heavy discounts offered on older product in the prior year, such as wired headphones and neckbands, that did not repeat in the current year. Margins have been negatively affected during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 by tariff increases, as certain of the Company’s products are manufactured in China, while production of certain other products were relocated to other countries with higher labor costs. The Company offset some of the effects of these tariff increases, where possible, with price increases. Margin declines were also driven by declining sales of products with typically higher margins, such as hook-up ~~and remotes,~~products, karaoke products, and the Company’s Project Nursery product line, as well by sales declines within the European market and higher

warehousing costs incurred related to the use of a third party for warehousing services in Europe beginning during the first quarter of Fiscal 2020. Margin increases during the three and six months ended August 31, 2019 were driven partially by increased sales of the Company’s high margin premium wireless and bluetooth speakers, mobility products, and commercial speakers, as well as increased sales of the Company’s karaoke products. For the six months ended August 31, 2019, margins were also positively impacted by the Company’s premium home separate speaker products as a result of higher sales, as well as discounts offered on older product in the prior year that did not repeat in the current year.

Gross margin percentages in the Biometrics segment decreased ~~767 and 385 basis points~~ for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, as compared to the ~~respective~~ prior year periods. These decreases were primarily due to the sale of certain ~~fully reserved~~ inventory during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2018 ~~which resulted in the release of inventory~~

~~reserves~~that had been previously written off, and contributed to higher margins in the prior year ~~periods. This was partially offset by~~periods, as well as higher sales of licensing fees in the ~~release of certain inventory reserves during the first quarter of Fiscal 2020,~~prior year, which ~~had a positive impact on the segment’s gross margin~~earned higher margins for the ~~six~~segment. During the three and nine months ended ~~August 31, 2019.~~November 30, 2019, the Company also incurred certain tooling and defective repair costs, as well as provided beta samples to certain customers and prospects at no charge, which negatively impacted margins for the periods.

	August 31,										November 30,
	2019		2018		$ Change			% Change			2019		2018		$ Change			% Change
Three Months Ended
Operating expenses:
Selling	$	8,701	$	9,604	$	(903	)		(9.4	)%	$	9,580	$	10,363	$	(783	)		(7.6	)%
General and administrative		17,782		17,038		744			4.4	%		16,689		16,482		207			1.3	%
Engineering and technical support		5,035		6,070		(1,035	)		(17.1	)%		5,059		6,368		(1,309	)		(20.6	)%
Intangible asset impairment charges		—		9,814		(9,814	)		(100.0	)%
Total operating expenses	$	31,518	$	42,526	$	(11,008	)		(25.9	)%	$	31,328	$	33,213	$	(1,885	)		(5.7	)%

Six Months Ended
Nine Months Ended
Operating expenses:
Selling	$	18,582	$	20,298	$	(1,716	)		(8.5	)%	$	28,162	$	30,661	$	(2,499	)		(8.2	)%
General and administrative		35,207		33,150		2,057			6.2	%		51,896		49,632		2,264			4.6	%
Engineering and technical support		10,842		11,981		(1,139	)		(9.5	)%		15,901		18,349		(2,448	)		(13.3	)%
Intangible asset impairment charges		—		9,814		(9,814	)		(100.0	)%		—		9,814		(9,814	)		(100.0	)%
Total operating expenses	$	64,631	$	75,243	$	(10,612	)		(14.1	)%	$	95,959	$	108,456	$	(12,497	)		(11.5	)%

Total operating expenses have decreased for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 as compared with the respective prior year periods.

Selling expenses decreased for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 due to various factors, including headcount reductions related to Fiscal 2019 restructuring activities, lower commissions as a result of the decline in sales for the three and ~~six~~nine month periods, and lower advertising costs and display amortization expense, as many displays and fixtures are fully amortized or have been removed. These expense decreases were offset by salary increases within selling resulting from transfers of certain employees from general and administrative to selling in conjunction with restructuring activities taking place in Fiscal 2019, as well as additional hires at the Company’s Klipsch, ~~subsidiary.~~Oehlbach and Schwaiger subsidiaries.

General and administrative expenses increased during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019. During the ~~second quarter of Fiscal 2020,~~nine months ended November 30, 2019, the Company granted 200,000 fully vested common shares to the Company’s Chief Executive Officer, as well as granted additional shares which vest on future dates in accordance with his employment agreement signed in July 2019, resulting in an increase in compensation expense of approximately ~~$1,000~~$300 and $1,300 for ~~both~~ the three and ~~six~~nine months ended ~~August 31, 2019.~~November 30, 2019, respectively. Additionally, during the ~~six~~three and nine months ended ~~August 31,~~November 30, 2018, the Company received ~~a reimbursement~~reimbursements of approximately ~~$2,000~~$1,000 and $3,000, respectively, for certain professional fees and disbursements resulting from the favorable outcome of a lawsuit, which did not ~~repeat~~occur during the ~~six~~three and nine months ended ~~August 31,~~November 30, 2019. Disregarding these specific items, general and administrative expenses would have decreased for both the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019. General and administrative expenses were also higher during the three and nine months ended November 30, 2019 due to higher payroll expenses resulting from increased medical claims as compared to the prior year. Offsetting the increases to general and administrative expenses discussed above were decreases in salary expense during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 due to reductions in headcount and the transfer of certain employees to selling in conjunction with Fiscal 2019 restructuring activities, lower executive salaries due to salary and bonus structures under new employment agreements, as well as lower office and equipment rental expenses as a result of cost containment measures.

Engineering and technical support expenses for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 decreased as compared to the prior year periods. For the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, expenses were down primarily due to headcount reduction at certain of the Company’s subsidiaries, decreased research and development spending related to projects that were completed during the current year periods, as well as due to the movement of work related to certain projects utilizing

outside contractors to in-house employees at ~~EyeLock.~~both EyeLock and Invision. These declines were partially offset by an increase in research and development expenses related to the start of new projects and higher certification fees for certain products under development, as well as ~~higher customer reimbursement compared to~~salary and related expenses resulting from new hires at one of the ~~prior periods.~~Company’s subsidiaries.

this evaluation, the Company determined that several of its trademarks were impaired, resulting in a total charge of $9,814 for the ~~three and six~~nine months ended ~~August 31,~~November 30, 2018. Such charges did not recur in the current year ~~periods.~~period. The value of our intangible assets, including goodwill, are dependent upon the timing and extent of demand for our product offerings, acceptance of new products, product placements, competition, future selling prices, general economic conditions and other uncertainties. The ultimate outcome of and changes in the Company’s previous assessment of these uncertainties could trigger a future impairment of our intangible assets.

	August 31,												November 30,
	2019			2018			$ Change			% Change			2019			2018			$ Change			% Change
Three Months Ended
Interest and bank charges	$	(887	)	$	(1,117	)	$	230			20.6	%	$	(751	)	$	(1,174	)	$	423			36.0	%
Equity in income of equity investee		1,265			1,637			(372	)		(22.7	)%		967			1,695			(728	)		(42.9	)%
Gain on sale of real property														4,057			—			4,057			100.0	%
Other, net														(322	)		260			(582	)		(223.8	)%
Total other income (expense)													$	3,951		$	781		$	3,170			405.9	%

Nine Months Ended
Interest and bank charges													$	(2,635	)	$	(3,391	)	$	756			22.3	%
Equity in income of equity investee														3,672			5,146			(1,474	)		(28.6	)%
Gain on sale of real property														4,057			—			4,057			100.0	%
Investment gain		775			—			775			100.0	%		775			—			775			100.0	%
Impairment of Venezuela investment properties		—			(3,473	)		3,473			100.0	%		—			(3,473	)		3,473			100.0	%
Other, net		547			252			295			117.1	%		1,869			1,173			696			59.3	%
Total other income (expense)	$	1,700		$	(2,701	)	$	4,401			162.9	%	$	7,738		$	(545	)	$	8,283			1519.8	%

Six Months Ended
Interest and bank charges	$	(1,884	)	$	(2,217	)	$	333			15.0	%
Equity in income of equity investee		2,705			3,451			(746	)		(21.6	)%
Investment gain		775			—			775			100.0	%
Impairment of Venezuela investment properties		—			(3,473	)		3,473			100.0	%
Other, net		2,191			913			1,278			140.0	%
Total other income (expense)	$	3,787		$	(1,326	)	$	5,113			385.6	%

Interest and bank charges represent interest expense and fees related to the Company's bank obligations, supply chain financing agreements and factoring agreements, interest related to finance leases, amortization of debt issuance costs, and credit card fees. During ~~Fiscal 2019, the Company made an amendment to its Wells Fargo lending agreement in which the fees charged for the unused portion of the line of credit were lowered. Additionally, during~~ the second quarter of Fiscal 2020, the Company suspended its domestic supply chain financing, thus resulting in a reduction of the related fees.

Equity in income of equity investee represents the Company's share of income from its 50% non-controlling ownership interest in ASA Electronics LLC and Subsidiaries ("ASA"). The decrease in income for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 is primarily a result of ~~lower sales in certain markets as compared to the prior year,~~ the impact of tariffs, an increase in warranty costs, as well as due to certain product recall expenses incurred during the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 that were not present in the prior ~~year, and an increase~~year.

On September 30, 2019, the Company, through its subsidiary Voxx German Holdings Gmbh (“the Seller”), sold its real property in ~~warranty~~Pulheim, Germany to CLM S.A. RL (“the Purchaser”) for €10,920. Net proceeds received from the transaction were approximately $9,500 after transactional costs and ~~research~~repayment of the outstanding mortgage. Concurrently with the sale, the Seller entered into an operating lease arrangement (“lease”) with the Purchaser for a small portion of the real property to continue to operate its sales office in Germany. The transaction qualified for sale leaseback accounting in accordance with ASC 842 and ~~development investment.~~the Company recognized a gain on the execution of the sale transaction for the three and nine months ended November 30, 2019.

During Fiscal 2018, the Company sold its investment in RxNetworks, a non-controlled corporation, consisting of shares of the investee’s preferred stock. Voxx recognized a gain during Fiscal 2018 for the sale of this investment; however, a portion of the cash proceeds were subject to a hold-back provision, which was not included in the gain recognized in Fiscal 2018. During the second quarter of Fiscal 2020, the hold-back provision expired, and the Company received the remaining proceeds from the sale, recording an investment gain for the ~~three and six~~nine months ended ~~August 31,~~November 30, 2019.

Other, net includes net foreign currency gains or losses, interest income, rental income, and other miscellaneous income and expense. Other, net decreased for the three months ended November 30, 2019 and increased for the nine months ended November 30, 2019. During the ~~six~~three and nine months ended ~~August 31,~~November 30, 2019, ~~Other, net increased due primarily~~the Company incurred a charge of $804 for a payment made to TE Connectivity Ltd. in final settlement of the working capital calculation related to the Fiscal 2018 sale of Hirschmann Car Communication GmbH. During the nine months ended November 30, 2019, the Company received the proceeds from a key man life insurance policy in the amount of $1,000, related to a former employee of Klipsch Group, Inc. that Voxx became the beneficiary of in conjunction with the acquisition of Klipsch in Fiscal 2012.

customary relationship between income tax expense and pretax income. As such, the Company has estimated a foreign effective tax rate and applied that to its foreign year to date results and has calculated the U.S. tax provision (benefit) based on pre-tax results through the ~~six~~three and nine months ended ~~August 31,~~November 30, 2019. ~~The change in estimate is reflected in the tax provision for the three and six months ended August 31, 2019.~~

The effective tax rates for the ~~six~~nine months ended ~~August 31,~~November 30, 2019 and 2018 were an income tax ~~benefit~~provision of ~~13.8%~~17.1% on a pre-tax loss of ~~$11,066~~$6,979 and an income tax provision of ~~40.5%~~27.8% on a pre-tax loss of ~~$17,829,~~$11,338, respectively. The effective tax rate for the ~~six~~nine months ended ~~August 31,~~November 30, 2019 differs from the U.S. statutory rate of 21% primarily due to the calculation of the U.S. tax provision on a discrete basis, the U.S. taxation of foreign earnings, nondeductible permanent differences, non-controlling interest related to EyeLock LLC, an increase in the valuation allowance, ~~primarily for capital assets,~~ state and local income taxes, and income taxed in foreign jurisdictions at varying tax rates. The effective tax rate for the ~~six~~nine months ended ~~August 31,~~November 30, 2018 differed from the statutory rate of 21% primarily due to the non-controlling interest related to EyeLock LLC, state and local income taxes, nondeductible permanent differences, and income taxed in foreign jurisdictions at varying tax rates.

EBITDA, Adjusted EBITDA and Diluted Adjusted EBITDA per common share are not financial measures recognized by GAAP. EBITDA represents net (loss) income attributable to VOXX International Corporation, computed in accordance with GAAP, before interest expense and bank charges, taxes, and depreciation and amortization. Adjusted EBITDA represents EBITDA adjusted for stock-based compensation expense, ~~investment~~certain settlements, gains, life insurance proceeds, as well tangible and intangible asset impairment charges. Depreciation, amortization, stock-based compensation, and tangible and intangible asset impairment charges are non-cash items. Diluted Adjusted EBITDA per common share represents the Company's diluted earnings per common share based on Adjusted EBITDA.

We present EBITDA, Adjusted EBITDA and Diluted Adjusted EBITDA per common share in this Form 10-Q because we consider them to be useful and appropriate supplemental measures of our performance. Adjusted EBITDA and Diluted Adjusted EBITDA per common share help us to evaluate our performance without the effects of certain GAAP calculations that may not have a direct cash impact on our current operating performance. In addition, the exclusion of certain costs or gains relating to certain events allows for a more meaningful comparison of our results from period-to-period. These non-GAAP measures, as we define them, are not necessarily comparable to similarly entitled measures of other companies and may not be an appropriate measure for performance relative to other companies. EBITDA, Adjusted EBITDA and Diluted Adjusted EBITDA per common share should not be assessed in isolation from, are not intended to represent, and should not be

considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP.

Reconciliation of GAAP Net Income Attributable to VOXX International Corporation to EBITDA, Adjusted EBITDA and Diluted Adjusted EBITDA per Common Share

	Three months ended August 31,						Six months ended August 31,						Three months ended November 30,						Nine months ended November 30,
	2019			2018			2019			2018			2019			2018			2019			2018
Net loss attributable to VOXX International Corporation	$	(5,964	)	$	(20,803	)	$	(7,112	)	$	(21,742	)
Net income (loss) attributable to VOXX International Corporation													$	2,464		$	12,211		$	(4,648	)	$	(9,531	)
Adjustments:
Interest expense and bank charges (1)		766			735			1,644			1,482			625			771			2,269			2,252
Depreciation and amortization (1)		2,990			2,652			5,976			5,306			3,005			2,580			8,981			7,886
Income tax expense (benefit)		1,115			8,338			(1,530	)		7,225			2,720			(4,078	)		1,190			3,147
EBITDA		(1,093	)		(9,078	)		(1,022	)		(7,729	)		8,814			11,484			7,792			3,754
Stock-based compensation		1,186			127			1,345			234			471			159			1,816			393
Gain on sale of real property														(4,057	)		—			(4,057	)		—
Settlement of Hirschmann working capital														804			—			804			—
Investment gain		(775	)		—			(775	)		—			—			—			(775	)		—
Life insurance benefit		—			—			(1,000	)		—
Life insurance proceeds														—			—			(1,000	)		—
Intangible asset impairment charges		—			9,814			—			9,814			—			—			—			9,814
Impairment of Venezuela investment properties		—			3,473			—			3,473			—			—			—			3,473
Adjusted EBITDA	$	(682	)	$	4,336		$	(1,452	)	$	5,792		$	6,032		$	11,643		$	4,580		$	17,434
Diluted loss per common share attributable to VOXX International Corporation	$	(0.24	)	$	(0.85	)	$	(0.29	)	$	(0.89	)
Diluted income (loss) per common share attributable to VOXX International Corporation													$	0.10		$	0.50		$	(0.19	)	$	(0.39	)
Diluted Adjusted EBITDA per common share attributable to VOXX International Corporation	$	(0.03	)	$	0.18		$	(0.06	)	$	0.24		$	0.24		$	0.47		$	0.19		$	0.72

As of ~~August 31,~~November 30, 2019, we had working capital of ~~$144,535~~$156,513 which includes cash and cash equivalents of ~~$39,294,~~$32,156, compared with working capital of $151,169 at February 28, 2019, which included cash and cash equivalents of $58,236. We plan to utilize our current cash position as well as collections from accounts receivable, the cash generated from our operations, when applicable, and the income on our investments to fund the current operations of the business. However, we may utilize all or a portion of current capital resources to pursue other business opportunities, including acquisitions, or to further pay down our debt. As of ~~August 31,~~November 30, 2019, we had cash amounts totaling ~~$555~~$5,368 held in foreign bank accounts, none of which would be subject to United States federal income taxes if made available for use in the United States. The Tax Cuts and Jobs Act provides a 100% participation exemption on dividends received from foreign corporations after January 1, 2018 as the United States has moved away from a worldwide tax system and closer to a territorial system for earnings of foreign corporations.

Operating activities used cash of ~~$12,874~~$23,887 for the ~~six~~nine months ended ~~August 31,~~November 30, 2019, due to factors including sales declines and losses incurred by EyeLock LLC, as well as increases in accounts receivable due in part to the suspension of the Company’s domestic supply chain financing arrangements, increases in inventory, and decreases in accrued ~~expenses and sales incentives.~~expenses. These operating cash usages were offset primarily by decreases in ~~accounts receivable and~~ receivables from ~~vendors.~~vendors and increases in accrued sales incentives. For the ~~six~~nine months ended ~~August 31,~~November 30, 2018, operating activities provided cash of ~~$180~~$10,105 primarily due to ~~a decrease in the Company’s~~improved collections on accounts receivable, which were more than offset by expected holiday season sales activity, and ~~an increase~~increases in accrued sales incentives and accounts payable, which ~~was~~were offset by an increase in inventory and a decrease in accrued expenses.

Investing activities ~~used~~provided cash of ~~$1,306~~$9,759 during the ~~six~~nine months ended ~~August 31,~~November 30, 2019 primarily ~~as a result~~due to the proceeds received from the sale of the Company’s real property in Pulheim, Germany, offset by capital expenditures. For the ~~six~~nine months ended ~~August 31,~~November 30, 2018, investing activities used cash of ~~$3,798~~$8,968 primarily as a result of the issuance of notes ~~receivable.~~receivable and capital expenditures.

Financing activities used cash of ~~$4,649~~$11,563 during the ~~six~~nine months ended ~~August 31,~~November 30, 2019 primarily due to the repayment of bank obligations, including the entire outstanding balance of Voxx Germany’s Euro asset-based loan facility, and the repurchase of shares of the Company’s Class A common stock. During the ~~six~~nine months ended ~~August 31,~~November 30, 2018, financing activities used cash of ~~$193~~$191 primarily due to the borrowing of bank obligations, net of repayments.

reserves as determined by the lender, and is also limited by amounts outstanding under the Florida Mortgage (see Note 16(b)). The entire outstanding balance of the term loan, which is not renewable, was repaid in Fiscal 2018. As of ~~August 31,~~November 30, 2019, there was no balance outstanding under the revolving credit facility. The availability under the revolving credit line of the Credit Facility was ~~$91,935~~$102,454 as of ~~August 31,~~November 30, 2019.

Generally, the Company may designate specific borrowings under the Credit Facility as either Base Rate Loans or LIBOR Rate Loans, except that Swingline Loans may only be designated as Base Rate Loans. Loans designated as LIBOR Rate Loans shall bear interest at a rate equal to the then applicable LIBOR rate plus a range of 1.75 - 2.25%. Loans designated as Base Rate loans shall bear interest at a rate equal to the applicable margin for Base Rate Loans of 0.75 - 1.25% as defined in the agreement.

The obligations under the loan documents are secured by a general lien on and security interest in substantially all of the assets of the borrowers and certain of the guarantors, including accounts receivable, equipment, real estate, general intangibles and inventory. The Company has guaranteed the obligations of the borrowers under the Credit Agreement.

The Company has a Euro asset-based loan facility in Germany with a credit limit of €8,000 that expires on July 31, 2020. The Company's subsidiaries Voxx German Holdings GmbH, Oehlbach Kabel GmbH, and Schwaiger GmbH are authorized to borrow funds under this facility for working capital purposes.

The Company also utilizes supply chain financing arrangements and factoring agreements as a component of our financing for working capital, which accelerates receivable collection and helps to better manage cash flow. Under the agreements, the Company has agreed to sell certain of its accounts receivable balances to banking institutions who have agreed to advance amounts equal to the net accounts receivable balances due, less a discount as set forth in the respective agreements (see Note 8). The balances under these agreements are accounted for as sales of accounts receivable, as they are sold without recourse. Cash proceeds from these agreements are reflected as operating activities included in the change in accounts receivable in the Company's Consolidated Statements of Cash Flows. Fees incurred in connection with the agreements are recorded as interest expense by the Company. During the second quarter of Fiscal 2020, the Company suspended its domestic supply chain financing activities.

Certain contractual cash obligations and other commercial commitments will impact our short and long-term liquidity. At ~~August 31,~~November 30, 2019, such obligations and commitments are as follows:

	Amount of Commitment Expiration per Period										Amount of Commitment Expiration per Period
Contractual Cash Obligations	Total		Less than 1 Year		2-3 Years		4-5 Years		After 5 Years		Total		Less than 1 Year		2-3 Years		4-5 Years		After 5 Years
Finance lease obligation (1)	$	1,646	$	672	$	819	$	155	$	—	$	1,502	$	647	$	738	$	117	$	—
Operating leases (1)		2,322		560		1,069		443		250		2,807		680		1,245		671		211
Total contractual cash obligations	$	3,968	$	1,232	$	1,888	$	598	$	250	$	4,309	$	1,327	$	1,983	$	788	$	211
Other Commitments
Bank obligations (2)	$	3,922	$	3,922	$	—	$	—	$	—	$	609	$	609	$	—	$	—	$	—
Stand-by and commercial letters of credit (3)		175		175		—		—		—		68		68		—		—		—
Other (4)		10,127		2,743		1,000		1,000		5,384		7,795		556		1,000		1,000		5,239
Contingent earn-out payments and other (5)		157		—		157		—		—		109		109		—		—		—
Pension obligation (6)		543		—		—		—		543		541		—		—		—		541
Unconditional purchase obligations (7)		58,963		58,963		—		—		—		44,483		44,483		—		—		—
Total other commitments		73,887		65,803		1,157		1,000		5,927		53,605		45,825		1,000		1,000		5,780
Total commitments	$	77,855	$	67,035	$	3,045	$	1,598	$	6,177	$	57,914	$	47,152	$	2,983	$	1,788	$	5,991

We regularly review our cash funding requirements and attempt to meet those requirements through a combination of cash on hand, cash provided by operations, available borrowings under bank lines of credit and possible future public or private debt and/or equity offerings. At times, we evaluate possible acquisitions of, or investments in, businesses that are complementary to ours, which transactions may require the use of cash. We believe that our cash, other liquid assets, operating cash flows, credit arrangements, and access to equity capital markets, taken together, provide adequate resources to fund ongoing operating expenditures, including the intercompany loan funding we provide to our majority owned subsidiary, EyeLock LLC. In the event they do not, we may require additional funds in the future to support our working capital requirements or for other purposes and may seek to raise such additional funds through the sale of public or private equity and/or debt financings as well as from other sources. No assurance can be given that additional financing will be available in the future or that if available, such financing will be obtainable on terms favorable when required.

We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that would be expected to have a material current or future effect upon our financial condition or results of operations.

We are required to adopt certain new accounting pronouncements. See Note 25 to our consolidated financial statements included herein.

Voxx conducts business in various non-U.S. countries, including Germany, Canada, Mexico, China, Denmark, the Netherlands, and France and thus is exposed to market risk for changes in foreign currency exchange rates. As a result, we have exposure to various foreign currency exchange rate fluctuations for revenues generated by our operations outside of the U.S., which can adversely impact our net income and cash flows. For the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, a uniform 10% strengthening of the U.S. dollar relative to the local currency of our foreign operations would have resulted in a decrease in sales of approximately ~~$1,550~~$2,130 and ~~$3,420,~~$5,540, respectively, and net income of approximately ~~$150~~$450 and ~~$260,~~$560, respectively. The effects of foreign currency exchange rates on future results would also be impacted by changes in sales levels or local currency prices.

While the prices we pay for products purchased from our suppliers are principally denominated in United States dollars, price negotiations depend in part on the foreign currency of foreign manufacturers, as well as market, trade and political factors. The Company also has exposure related to transactions in which the currency collected from customers is different from the currency utilized to purchase the product sold in its foreign operations, and U. S. dollar denominated purchases in its foreign subsidiaries. The Company enters forward contracts to hedge certain euro-related transactions. The Company minimizes the risk of nonperformance on the forward contracts by transacting with major financial institutions. During the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, the Company held forward contracts specifically designated for hedging (see Note 4). For the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019, unrealized gains (losses) of ~~$109~~$41 and ~~$228,~~$357, respectively, were recorded in other comprehensive income associated with these contracts. A hypothetical 10% adverse change in the fair value of our forward exchange contracts would result in a negative impact of ~~$26~~$14 on the fair value of our forward exchange contracts at ~~August 31,~~November 30, 2019.

We are also subject to risk from changes in foreign currency exchange rates from the translation of financial statements of our foreign subsidiaries and for long-term intercompany loans with the foreign subsidiaries. These changes result in cumulative translation adjustments, which are included in accumulated other comprehensive (loss) income. At ~~August 31,~~November 30, 2019, we had translation exposure to various foreign currencies with the most significant being the Euro. A hypothetical 10% adverse change in the foreign currency exchange rates would result in a negative impact of ~~$12~~$29 on Other comprehensive (loss) income for the ~~six~~nine months ended ~~August 31,~~November 30, 2019.

The Company continues to monitor the political and economic climate in Venezuela. Venezuela did not have any sales for the three and ~~six~~nine months ended ~~August 31,~~November 30, 2019 and there were minimal cash related assets invested in Venezuela as of ~~August 31,~~November 30, 2019 that would be subject to government foreign exchange controls. The Company has certain long-lived assets in Venezuela, which are held for investment purposes and had a value of $0 as of ~~August 31,~~November 30, 2019.

Our earnings and cash flows are subject to fluctuations due to changes in interest rates on investment of available cash balances in money market funds and investment grade corporate and U.S. government securities. In addition, our bank loans expose us to changes in short-term interest rates since interest rates on the underlying obligations are either variable or fixed. In connection with the Florida Mortgage, we have debt outstanding in the amount of ~~$7,883~~$7,738 at ~~August 31,~~November 30, 2019. Interest on this mortgage is charged at 70% of 1-month LIBOR plus 1.54%. The Company currently has one interest rate swap for the Florida Mortgage with a notional amount of ~~$7,883~~$7,738 at ~~August 31,~~November 30, 2019. This swap locks the interest rate at 3.48% (inclusive of credit spread) on the Florida Mortgage through the mortgage end date of March 2026. The Company also has debt outstanding with variable interest rates on its Euro asset-based lending ~~obligation~~obligations in Germany (see Note 16).

As of ~~August 31,~~November 30, 2019, the total net fair value of the interest rate swap recorded in other liabilities on our Unaudited Consolidated Balance Sheet is ~~$423,~~$344, which represents the amount that would be paid upon unwinding the interest rate swap agreement based on market conditions on that date. Changes in the fair value of this interest rate swap agreement is reflected as an adjustment to other assets or liabilities with an offsetting adjustment to Accumulated other comprehensive (loss) income.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, these disclosure controls and procedures are effective as of ~~August 31,~~November 30, 2019 to provide reasonable assurance that information required to be disclosed by the Company in its filing under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

There were no material changes in our internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the three and ~~six-month~~nine-month period ended ~~August 31,~~November 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

See Note 24 of the Notes to the Unaudited Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q and Note 15 of the Form 10-K for the fiscal year ended February 28, 2019 for information regarding legal proceedings.

There have been no material changes from the risk factors previously disclosed in the Company’s Form 10-K for the fiscal year ended February 28, 2019.

We have an ongoing authorization from our Board of Directors to repurchase shares of the Company's Class A Common Stock. In April 2019, the Company was authorized by the Board of Directors to increase the number of Class A Common Stock available for repurchase to 3,000,000 shares in order for the Company to make repurchases in the open market. As of ~~August 31,~~November 30, 2019, we have repurchased ~~208,312~~426,765 shares for an aggregate cost of ~~$983,~~$2,040, as follows:

Period	Total Number of Shares Purchased (1)		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs		Total Number of Shares Purchased (1)		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
7/16/2019 - 7/31/19		131,350	$	4.70		131,350		2,868,650		131,350	$	4.70		131,350		2,868,650
8/1/2019 - 8/31/19		76,962	$	4.74		76,962		2,791,688		76,962	$	4.74		76,962		2,791,688
10/1/2019 - 10/31/19										104,842	$	4.96		104,842		2,686,846
11/1/2019 - 11/30/19										113,611	$	4.72		113,611		2,573,235
Total other commitments		208,312								426,765

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware (State or other jurisdiction of incorporation or organization)		13-1964841 (IRS Employer Identification No.)
2351 J Lawson Blvd., Orlando, Florida (Address of principal executive offices)		32824 (Zip Code)

(800) 654-7750 (Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol:	Name of Each Exchange on which Registered
Class A Common Stock $.01 par value	VOXX	The Nasdaq Stock Market LLC

		Page
PART I	FINANCIAL INFORMATION

Item 1	FINANCIAL STATEMENTS
	Consolidated Balance Sheets at ~~August 31,~~November 30, 2019 (unaudited) and February 28, 2019	3
	Unaudited Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and ~~Six~~Nine Months Ended ~~August 31,~~November 30, 2019 and 2018	54
	Unaudited Consolidated Statements of Stockholders’ Equity for the Three and Nine~~Six~~ Months Ended ~~August 31,~~November 30, 2019 and 2018	65
	Unaudited Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~August 31,~~November 30, 2019 and 2018	76
	Notes to Unaudited Consolidated Financial Statements	87
Item 2	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3332
Item 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4544
Item 4	CONTROLS AND PROCEDURES	4544

PART II	OTHER INFORMATION

Item 1	LEGAL PROCEEDINGS	4645
Item 1A	RISK FACTORS	4645
Item 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	4645
Item 6	EXHIBITS	4746
SIGNATURES		4847


Exhibit Number		Description

31.1		Certification of Patrick M. Lavelle Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith).

31.2		Certification of Charles M. Stoehr Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith).

32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

101		The following materials from VOXX International Corporation's Quarterly Report on Form 10-Q for the period ended ~~August 31,~~November 30, 2019, formatted in eXtensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii), the Consolidated Statements of Operations and Comprehensive (Loss) Income, (iii) the Consolidated Statements of Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) Notes to the Unaudited Consolidated Financial Statements.

VOXX INTERNATIONAL CORPORATION

~~October 10, 2019~~January 9, 2020

By:		/s/ Patrick M. Lavelle
Patrick M. Lavelle,
President and Chief Executive Officer

By:		/s/ Charles M. Stoehr
Charles M. Stoehr,
Senior Vice President and Chief Financial Officer

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

Class		As of ~~October 9, 2019~~January 8, 2020
Class A Common Stock		~~21,929,788~~21,707,180 Shares
Class B Common Stock		2,260,954 Shares