Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 28, 2018 | Apr. 30, 2018 | Aug. 31, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | CalAmp Corp. | ||
Entity Central Index Key | 730,255 | ||
Entity Filer Category | Accelerated Filer | ||
Trading Symbol | CAMP | ||
Current Fiscal Year End Date | --02-28 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Feb. 28, 2018 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 641,269,400 | ||
Entity Common Stock, Shares Outstanding | 35,760,481 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 132,603 | $ 93,706 |
Short-term marketable securities | 23,400 | 6,722 |
Accounts receivable, net | 71,580 | 67,403 |
Inventories | 36,302 | 29,279 |
Prepaid expenses and other current assets | 12,000 | 9,595 |
Total current assets | 275,885 | 206,705 |
Property and equipment, net | 21,262 | 21,162 |
Deferred income tax assets | 31,581 | 27,504 |
Goodwill | 72,980 | 72,980 |
Other intangible assets, net | 52,456 | 67,223 |
Other assets | 18,829 | 12,565 |
Total assets | 472,993 | 408,139 |
Current liabilities: | ||
Accounts payable | 35,478 | 30,266 |
Accrued payroll and employee benefits | 10,606 | 7,955 |
Deferred revenue | 17,757 | 14,662 |
Other current liabilities | 31,688 | 24,958 |
Total current liabilities | 95,529 | 77,841 |
1.625% convertible senior unsecured notes | 154,299 | 146,827 |
Other non-current liabilities | 24,249 | 20,229 |
Total liabilities | 274,077 | 244,897 |
Commitments and contingencies (see Note 17 and 18) | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value; 3,000 shares authorized; no shares issued or outstanding | ||
Common stock, $.01 par value; 80,000 shares authorized; 35,718 and 35,330 shares issued and outstanding at February 28, 2018 and 2017, respectively | 357 | 353 |
Additional paid-in capital | 218,217 | 211,187 |
Accumulated deficit | (19,459) | (47,757) |
Accumulated other comprehensive loss | (199) | (541) |
Total stockholders' equity | 198,916 | 163,242 |
Total Liabilities and Stockholders' Equity | $ 472,993 | $ 408,139 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Feb. 28, 2018 | Feb. 28, 2017 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 35,718,000 | 35,330,000 |
Common stock, shares outstanding | 35,718,000 | 35,330,000 |
Convertible Senior Notes [Member] | ||
Interest rate (as a percent) | 1.625% | 1.625% |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Revenues: | |||
Products | $ 301,700 | $ 291,685 | $ 237,981 |
Application subscriptions and other services | 64,212 | 59,417 | 42,738 |
Total revenues | 365,912 | 351,102 | 280,719 |
Cost of revenues: | |||
Products | 181,889 | 178,012 | 158,689 |
Application subscriptions and other services | 33,133 | 29,738 | 19,071 |
Total cost of revenues | 215,022 | 207,750 | 177,760 |
Gross profit | 150,890 | 143,352 | 102,959 |
Operating expenses: | |||
Research and development | 25,761 | 22,005 | 19,803 |
Selling and marketing | 50,096 | 49,044 | 23,380 |
General and administrative | 52,089 | 57,119 | 25,065 |
Intangible asset amortization | 14,989 | 15,061 | 6,626 |
Total operating expenses | 142,935 | 143,229 | 74,874 |
Operating income | 7,955 | 123 | 28,085 |
Non-operating income (expense): | |||
Investment income | 2,256 | 1,691 | 1,871 |
Interest expense | (10,280) | (9,896) | (7,595) |
Gain on legal settlement (see Note 18) | 28,333 | ||
Other income (expense), net | 445 | (101) | (20) |
Total non-operating income (expense) | 20,754 | (8,306) | (5,744) |
Income (loss) before income taxes and equity in net loss of affiliate | 28,709 | (8,183) | 22,341 |
Income tax benefit (provision) | (10,681) | 1,563 | (4,572) |
Income (loss) before equity in net loss of affiliate | 18,028 | (6,620) | 17,769 |
Equity in net loss of affiliate | (1,411) | (1,284) | (829) |
Net income (loss) | $ 16,617 | $ (7,904) | $ 16,940 |
Earnings (loss) per share: | |||
Basic | $ 0.47 | $ (0.22) | $ 0.46 |
Diluted | $ 0.46 | $ (0.22) | $ 0.46 |
Shares used in computing earnings (loss) per share: | |||
Basic | 35,250 | 35,917 | 36,448 |
Diluted | 36,139 | 35,917 | 36,950 |
Comprehensive income (loss): | |||
Net income (loss) | $ 16,617 | $ (7,904) | $ 16,940 |
Other comprehensive loss: | |||
Foreign currency translation adjustments | (122) | (280) | (161) |
Unrealized income (loss) on available-for-sale securities, net of tax | 464 | (35) | |
Total comprehensive income (loss) | $ 16,959 | $ (8,219) | $ 16,779 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] |
Balances at Feb. 28, 2015 | $ 151,385 | $ 362 | $ 207,881 | $ (56,793) | $ (65) |
Balances (in shares) at Feb. 28, 2015 | 36,225 | ||||
Net income (loss) | 16,940 | 16,940 | |||
Stock-based compensation expense | 5,854 | 5,854 | |||
Equity component of convertible senior notes, net of tax | 20,104 | 20,104 | |||
Purchase of note hedges, net of tax | (19,324) | (19,324) | |||
Sale of warrants to note hedge counterparties | 15,991 | 15,991 | |||
Foreign currency translation adjustments | (161) | ||||
Issuance of shares for restricted stock awards | $ 1 | (1) | |||
Issuance of shares for restricted stock awards (in shares) | 115 | ||||
Shares issued on net share settlement of equity awards | (2,625) | $ 1 | (2,626) | ||
Shares issued on net share settlement of equity awards (in shares) | 99 | ||||
Exercise of stock options | $ 1,283 | $ 3 | 1,280 | ||
Exercise of stock options (in shares) | 228 | 228 | |||
Other comprehensive income (loss), net of tax | $ (161) | (161) | |||
Balances at Feb. 29, 2016 | 189,447 | $ 367 | 229,159 | (39,853) | (226) |
Balances (in shares) at Feb. 29, 2016 | 36,667 | ||||
Net income (loss) | (7,904) | (7,904) | |||
Stock-based compensation expense | 7,833 | 7,833 | |||
Foreign currency translation adjustments | (280) | ||||
Issuance of shares for restricted stock awards | $ 1 | (1) | |||
Issuance of shares for restricted stock awards (in shares) | 149 | ||||
Shares issued on net share settlement of equity awards | (1,780) | $ 2 | (1,782) | ||
Shares issued on net share settlement of equity awards (in shares) | 150 | ||||
Exercise of stock options | $ 961 | $ 1 | 960 | ||
Exercise of stock options (in shares) | 125 | 125 | |||
Repurchase of common stock | $ (25,000) | $ (18) | (24,982) | ||
Repurchase of common stock (in shares) | (1,761) | ||||
Other comprehensive income (loss), net of tax | (315) | (315) | |||
Balances at Feb. 28, 2017 | 163,242 | $ 353 | 211,187 | (47,757) | (541) |
Balances (in shares) at Feb. 28, 2017 | 35,330 | ||||
Net income (loss) | 16,617 | 16,617 | |||
Cumulative adjustment uponadoption of ASU 2016-09(Note 1) | 11,681 | 11,681 | |||
Stock-based compensation expense | 9,298 | 9,298 | |||
Foreign currency translation adjustments | (122) | ||||
Issuance of shares for restricted stock awards | $ 1 | (1) | |||
Issuance of shares for restricted stock awards (in shares) | 107 | ||||
Shares issued on net share settlement of equity awards | (2,594) | $ 2 | (2,596) | ||
Shares issued on net share settlement of equity awards (in shares) | 141 | ||||
Exercise of stock options | $ 330 | $ 1 | 329 | ||
Exercise of stock options (in shares) | 140 | 140 | |||
Other comprehensive income (loss), net of tax | $ 342 | 342 | |||
Balances at Feb. 28, 2018 | $ 198,916 | $ 357 | $ 218,217 | $ (19,459) | $ (199) |
Balances (in shares) at Feb. 28, 2018 | 35,718 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 16,617 | $ (7,904) | $ 16,940 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation expense | 7,968 | 8,408 | 3,582 |
Intangible assets amortization expense | 14,989 | 15,061 | 6,626 |
Stock-based compensation expense | 9,298 | 7,833 | 5,854 |
Amortization of convertible debt issue costs and discount | 7,472 | 7,027 | 5,201 |
Tax benefits on vested and exercised equity awards | 937 | ||
Deferred tax assets, net | 6,372 | (2,735) | 4,122 |
Unrealized foreign currency transaction gains | (524) | ||
Gain on investment in LoJack common stock | (1,416) | ||
Equity in net loss of affiliate | 1,411 | 1,284 | 829 |
Impairment of internal use software | 1,364 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (6,447) | 3,090 | (1,515) |
Inventories | (6,516) | 221 | 1,935 |
Prepaid expenses and other assets | (4,607) | (178) | (280) |
Accounts payable | 5,068 | (4,623) | 926 |
Accrued liabilities | 7,804 | (5,171) | 5,972 |
Deferred revenue | 7,044 | 2,151 | (1,310) |
Other | 8 | (32) | (66) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 66,894 | 25,796 | 47,400 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Proceeds from maturities and sale of marketable securities | 22,382 | 114,426 | 71,991 |
Purchases of marketable securities | (38,077) | (32,430) | (150,532) |
Capital expenditures | (8,339) | (7,962) | (4,317) |
Acquisition of LoJack, net of cash acquired | (116,982) | (4,050) | |
Equity investment in and advances to affiliate | (2,281) | (2,636) | (2,156) |
Acquisition of CrashBoxx | (1,500) | ||
Other | (136) | (2) | (110) |
NET CASH USED IN INVESTING ACTIVITIES | (26,451) | (45,586) | (90,674) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Taxes paid related to net share settlement of vested equity awards | (2,594) | (1,780) | (2,625) |
Proceeds from exercise of stock options | 330 | 961 | 1,283 |
Proceeds from issuance of convertible notes | 172,500 | ||
Payment of debt issuance costs | (5,291) | ||
Purchase of convertible note hedges | (31,343) | ||
Proceeds from issuance of warrants | 15,991 | ||
Payment of acquisition-related note and contingent consideration | (2,037) | ||
Repurchases of common stock | (25,000) | ||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (2,264) | (25,819) | 148,478 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 718 | (73) | |
Net change in cash and cash equivalents | 38,897 | (45,682) | 105,204 |
Cash and cash equivalents at beginning of year | 93,706 | 139,388 | 34,184 |
Cash and cash equivalents at end of year | $ 132,603 | $ 93,706 | $ 139,388 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Feb. 28, 2018 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business CalAmp Corp. (referred to herein as “CalAmp”, “the Company”, “we”, “our”, or “us”) is a telematics pioneer leading transformation in a global connected economy. We help reinvent businesses and improve lives around the globe with technology solutions that streamline complex Internet of Things (“IoT”) deployments through wireless connectivity solutions and derived data intelligence. Our software applications, scalable cloud services, and intelligent devices collect and assess business-critical data anywhere in the world from industrial machines, commercial and passenger vehicles, their passengers and contents. We are a global organization that is headquartered in Irvine, California. Historically, our business activities were organized into two reportable segments – Wireless DataCom and Satellite. Our products in the Satellite business were sold to one principal customer – EchoStar, an affiliate of Dish Network. In April 2016, EchoStar notified us that it would terminate its supply arrangement with us due to consolidation of its supplier base. Effective August 31, 2016, we ceased operations of the Satellite business and through the first quarter of fiscal 2018 operated under one reportable segment: Wireless DataCom. In the quarter ended August 31, 2017, in order to streamline our operations, global sales organization and product line development resources, we realigned our operations and we now operate under two reportable segments: Telematics Systems and Software & Subscription Services. In March 2016, we acquired all of the outstanding common stock of LoJack Corporation (“LoJack”), a global leader in products and services for tracking and recovering stolen cars, trucks and other valuable mobile assets. LoJack provides us with access to a U.S. auto dealer channel as well as an established international licensee network. See Note 2 for a description of this acquisition. Principles of Consolidation Our consolidated financial statements include the accounts of CalAmp Corp. (a Delaware corporation) and all of our wholly-owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the allowance for doubtful accounts; estimate for the lower of cost or market for excess and obsolete inventory; product warranties; deferred income tax asset valuation allowances; intangible assets and other long-lived assets; intellectual property and accrued royalties; stock-based compensation; other contingencies and revenue recognition. The current economic environment, and supplier and customer concentrations also increase the degree of uncertainty inherent in these estimates and assumptions. Fiscal Year Our fiscal year ends on the last day in February of each year. In these consolidated financial statements, the fiscal year end for all years is shown as February 28 for clarity of presentation. The actual period end date for fiscal 2016 was February 29, 2016. Revenue Recognition We recognize revenue from product sales when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collection of the sales price is reasonably assured. For product sales that are not bundled with an application service or for which we have no continuing service obligations, the revenue recognition criteria are generally met at the time product is shipped or installed. For product shipments made on the basis of “FOB Destination” terms, revenue is recorded when the shipment reaches the customer. Customers generally do not have a right of return except for defective products returned during the warranty period. We record estimated commitments related to customer incentive programs as reductions of revenues. In addition to product sales, we provide Software-as-a-Service (“SaaS”) and Platform-as-a-Service (“PaaS”) subscriptions for our fleet management, vehicle finance and certain other verticals through which customers are provided with the ability to wirelessly communicate with monitoring devices installed in vehicles and other mobile or remote assets via software applications hosted by us. We also enter into arrangements which combine various hardware devices as well as installation and notification services that are provided over a stipulated service period. These arrangements represent multiple element arrangements under ASC 605 Subtopic 25 entitled Revenue Recognition: Multiple-Element Arrangements In the United States, we also sell certain LoJack Stolen Vehicle Recovery (”SVR”) products with early warning products and services in transactions which constitute a multiple element arrangement under ASC 605. The combined product and service arrangement includes hardware devices, installation services and an ongoing early warning automated notification service, which is provided over the period of vehicle ownership. In the transactions, the product hardware and installation service components of each sale are considered to have met the delivery requirements and have standalone value to provide for revenue recognition upon installation; however, revenues from the ongoing notification service are deferred and recognized over an estimated life of new vehicle ownership. Revenues for the early warning notification services and extended product warranties are presented combined within Products revenues in our statement of comprehensive income (loss). In Italy, we generally sell the combined LoJack SVR product in connection with an initial vehicle monitoring service contract which we generally require at the time the consumer purchases the product. Revenue for the service arrangement is recognized over the life of the contract or subscription service period. These contracts are offered with terms ranging from 8 to 96 months and are generally payable in full upon activation of the related SVR unit or renewal of the previous contract. The product revenues for these customer arrangements are presented combined within Application subscriptions and other services in our statement of comprehensive income (loss) as the products and services are customarily part of one customer contractual arrangement. Cash and Cash Equivalents We consider all highly liquid investments with maturities at date of purchase of three months or less to be cash equivalents. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable debt securities and trade accounts receivables. Cash and cash equivalents as well as investments are maintained with several financial institutions. Deposits held with banks may exceed the federally insured limits. These deposits are maintained with reputable financial institutions and are redeemable upon demand. We have not experienced any losses in such accounts. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consists of amounts due to us from sales arrangements executed in our normal business activities and are recorded at invoiced amounts. We present the aggregate accounts receivable balance net of an allowance for doubtful accounts. We mitigate a portion of our receivables credit risk through credit insurance. Generally, collateral and other security is not obtained for outstanding accounts receivable. Credit losses, if any, are recognized based on management’s evaluation of historical collection experience, customer-specific financial conditions as well as an evaluation of current industry trends and general economic conditions. Past due balances are assessed by management on a monthly basis and balances are written off when the customer’s financial condition no longer warrants pursuit of collection. Although we expect to collect amounts due, actual collections may differ from estimated amounts. Inventories Inventories are stated at the lower of cost (using the first-in, first-out method) or market (net realizable value). Inventories are reviewed for excess quantities and obsolescence based upon demand forecasts for a specific time horizon. We record a charge to cost of revenues for the amount required to reduce the carrying value of inventory to estimated net realizable value. Property and equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the respective estimated useful lives of the assets ranging from two to seven years. Leasehold improvements are amortized using the straight-line method over the lesser of the lease term or the estimated useful life of the assets. Maintenance and repairs are expensed as incurred. We capitalize certain costs incurred in connection with developing or obtaining internal-use software and software embedded in our products. These costs are recorded as property and equipment in our consolidated balance sheets and are amortized over useful lives ranging from three to seven years. Business Combinations The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair value at the date of acquisition. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and labilities assumed, such excess is allocated to goodwill. We determine the estimated fair values after review and consideration of relevant information, including discounted cash flows, quoted market prices and other estimates made by management. We may refine the preliminary purchase price allocation, as necessary, during the measurement period of up to one year after the acquisition closing date as we obtain more information as to facts and circumstances existing at the acquisition date impacting the asset valuations and liabilities assumed. Goodwill acquired in business combinations is assigned to the reporting unit expected to benefit from the combination as of the acquisition date. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred. Goodwill and Other Intangible Assets Goodwill is recorded as the difference between the aggregate consideration paid in a business combination and the fair value of the acquired net tangible and intangible assets. Goodwill is not amortized but rather tested for impairment on an annual or interim basis as deemed necessary. Our acquired identifiable intangible assets from business combinations consist principally of developed technology, customer lists, dealer relationships and tradenames. Our acquired intangible assets with definite lives are amortized from the date of acquisition over periods ranging from two to ten years using a method that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used or, if that pattern cannot be reliability determined, using a straight-line amortization method. Impairment of Goodwill and Other Long-Lived Assets We evaluate goodwill for impairment on an annual basis in the fourth quarter, or on an interim basis, if we believe indicators of impairment exist. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we conduct a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair value of the reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, we perform the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the reporting unit’s goodwill with the carrying value of the goodwill. The amount by which the carrying value of the goodwill exceeds its implied fair value will be recognized as an impairment loss. In fiscal 2017, we performed a qualitative assessment and concluded that the fair value of our reporting unit is more than its carrying amount. In fiscal 2018, we conducted a quantitative goodwill impairment test and did not identify an impairment indicator as part of our quantitative step 1 analysis. Long-lived assets to be held and used, including identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If the assets are impaired, the impairment recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for similar investment of like risk. Fair Value Measurements Our cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short term maturities of these items. Our marketable securities are measured at fair value on a recurring basis. The framework for measuring fair value and related disclosure requirements about fair value measurements are provided in ASC 820, Fair Value Measurements Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Research and Development Costs Research and development costs are expensed as incurred. In certain cases, costs are incurred to purchase materials and equipment for future use in research and development efforts. In such cases, these costs are capitalized and expensed as consumed. Product Warranty All products have a one- or two-year limited warranty against manufacturing defects and workmanship. We estimate the future costs relating to product returns subject to our warranty and record a reserve upon shipment of our products. We periodically adjust our estimates for actual warranty claims, historical claims experience as well as the impact of known product operational issues. Patent Litigation and Other Contingencies We accrue for patent litigation and other contingencies whenever we determine that an unfavorable outcome is probable and a liability is reasonably estimable. The amount of the accrual is estimated based a review of each claim, including the type and facts of the claim and our assessment of the merits of the claim. These accruals are reviewed at least on a quarterly basis and are adjusted to reflect the impact of recent negotiations, settlements, court rulings, advice from legal counsel and other events pertaining to the case. Such accruals, if any, are recorded as general and administrative expense in our consolidated statements of comprehensive income (loss). Although we take considerable measures to mitigate our exposure in these matters, litigation is unpredictable; however, we believe that we have valid defenses with respect to pending legal matters against us as well as adequate provisions for probable and estimable losses. Income Taxes We use the asset and liability method when accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for future tax consequences attributable to difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Changes in recognition or measurement are reflected in the period in which the change in judgement occurs. Valuation allowances are provided against tax assets when it is determined that it is more likely than not that the assets will not be realized. In assessing valuation allowances, we review historical and future expected operating results and other factors, including cumulative earnings experience, expectations of future taxable income by jurisdiction and the carryforward periods available for reporting purposes. Foreign Currency Translation We translate the assets and liabilities of our non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation included in Accumulated Other Comprehensive Income (Loss) during the period. The aggregate foreign currency transaction exchange rate losses included in determining income (loss) before income taxes were $0.5 million, $0.1 million $27.0 thousand in fiscal years 2018, 2017 and 2016, respectively. Stock-Based Compensation Our stock-based compensation expense resulting from grants of employee stock options, restricted stock and restricted stock units is recognized in the consolidated financial statements based on the respective grant date fair values of the awards. We generally estimate stock option grant date fair value using the Black-Scholes-Merton option pricing model and recognize the expense over a requisite service (vesting) period using the straight-line method. The measurement of stock-based compensation is based on several criteria such as the type of equity award, the valuation model used and associated input factors including the expected term of the award, stock price volatility, risk free interest rate and forfeiture rate. Certain of these inputs are subjective and are determined based in part on management's judgment. Other Comprehensive Income (Loss) Other comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss) (“OCI”). OCI refers to revenue, expenses and gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity and excluded from net income (loss). Our OCI consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency and unrealized gains and losses on marketable equity securities classified as available-for-sale. Recently Issued Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2016-09 , Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09 xcess tax benefits recognized on stock-based compensation expense are classified as an operating activity in our consolidated statements of cash flows. Upon adoption of this standard, we also elected to account for forfeitures as they occur, rather than estimating expected forfeitures over the course of a vesting period. In May 2017, the FASB issued Accounting Standards Update 2017-09, Compensation – Stock Compensation: Scope of Modification Accounting Compensation – Stock Compensation In January 2017, the FASB issued Accounting Standards Update 2017-04, Simplifying the Test for Goodwill Impairment After the adoption of this standard on a prospective basis, we will follow a one-step model for goodwill impairment In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases In January 2016, the FASB issued Accounting Standards Update 2016-01, In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers We plan to adopt this standard using the modified retrospective method with an immaterial adjustment to accumulative deficit for the cumulative effect of adoption. Our assessment process has consisted of reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to our revenue contracts. We have reviewed individual customer contracts and purchase orders related to these revenues streams as well as identified appropriate changes to our business processes, systems and controls to support the revenue recognition and disclosure requirements under the new standard. We believe that the new standard and related revenue recognition policies will not result in a material change to our consolidated financial statements, but will require additional disclosures in our financial statements as to the nature, amount and timing of revenue and cash flows arising from contracts with customers. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Feb. 28, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 2 – ACQUISITIONS Effective March 15, 2016, we acquired all of the outstanding common stock of LoJack. The total purchase price was $131.7 million, which was funded from our cash on hand and included $5.5 million fair value of the 850,100 shares of LoJack common stock which we purchased in the open market prior to executing a definitive acquisition agreement with LoJack. The following is the final purchase price allocation (in thousands): Purchase price $ 131,735 Less cash acquired, net of debt assumed (9,303 ) Net cash paid 122,432 Fair value of net assets acquired: Current assets other than cash $ 41,214 Property and equipment 11,910 Developed technology 8,200 Tradename 35,500 Customer lists 4,650 Dealer relationships 16,850 Other non-current assets 4,208 Deferred tax liability (5,466 ) Current liabilities (37,647 ) Deferred revenue, non-current (10,883 ) Other non-current liabilities (2,576 ) Total fair value of net assets acquired 65,960 Goodwill $ 56,472 We paid a premium (i.e., goodwill) over the fair value of the net tangible and identified intangible assets acquired as we believe LoJack’s highly recognizable brand, proprietary stolen vehicle recovery technology, unique relationships with U.S. law enforcement agencies and strong relationships with auto dealers, heavy equipment providers and global licensees aligns with our strategic focus to create a global telematics market leader well-positioned to drive the broad adoption of connected vehicle telematics technologies and applications to consumers worldwide. The combined enterprise offers customers access to integrated, turnkey offerings that enable a multitude of high value applications encompassing vehicle security and enhanced driver safety. Furthermore, the combined technology offerings provide global customers with connected vehicle applications to help ensure that retail auto dealers remain competitive and relevant in rapidly evolving markets. The goodwill arising from the acquisition is not deductible for income tax purposes. As of March 15, 2016, the fair value of the acquired receivables was $21.2 million, comprised of a gross contractual amount of $22.3 million net of receivables of $1.1 million not expected to be collected. Additionally, the fair value of inventories acquired included a purchase accounting fair value step-up of $4.5 million. In fiscal 2017, we recognized $4.3 million of this markup as a component of cost of revenues. In August 2016, we received an independent appraisal of property and equipment, which resulted in a purchase accounting fair value step-up of $2.5 million. In fiscal 2017, we recognized $0.7 million of this markup as a component of cost of revenues and operating expenses that reflects the extent to which the property and equipment subject to step-up were depreciated. In connection with the acquisition, we assumed liabilities related to LoJack’s quality assurance programs, warranty claims and contract obligations which are included in accrued expenses and other current liabilities presented above. Revenues of LoJack included in the consolidated statements of operations for fiscal 2017 were $117.5 million. Post-acquisition earnings on a standalone basis are impracticable to determine, because immediately following the acquisition we began to integrate LoJack into our existing operations. The following is unaudited pro forma consolidated financial information presented as if the acquisition had occurred on March 1, 2015 (in thousands except per share amounts): Pro Forma Year Ended February 28, 2017 2016 Revenues $ 356,357 $ 408,464 Net income $ 1,132 $ 5,069 Earnings per share: Basic $ 0.03 $ 0.14 Diluted $ 0.03 $ 0.14 Shares used in computing earnings per share: Basic 35,917 36,448 Diluted 36,397 36,950 The following adjustments were included in the unaudited pro forma financial information (in thousands): Pro Forma Year Ended February 28, 2017 2016 LoJack standalone net income: From March 1 to March 14, 2016 $ 973 $ - For the year ended December 31, 2015 - 3,197 Increase (decrease) in revenue for fair valuation of deferred revenue 1,807 (1,807 ) (Increase) decrease in costs and expenses: Amortization of inventory step-up 4,339 (4,339 ) Amortization of intangible assets and depreciation of property, equipment and improvements acquired (309 ) (7,402 ) Acquisition and integration expenses 4,513 (4,168 ) Net increase (decrease) in pretax income (loss) 11,323 (14,519 ) Income tax effects (2,287 ) 2,648 Change in net income (loss) 9,036 (11,871 ) Net income (loss) as reported (7,904 ) 16,940 Pro forma net income $ 1,132 $ 5,069 The pro forma consolidated financial information is not necessarily indicative of what our actual results of operations would have been had the acquisition been included in our historical consolidated financial statements for each of the fiscal years ended February 28, 2017 and 2016. In addition, the pro forma consolidated financial information does not attempt to project the future results of operations of the combined company. |
Schedule of Adjustments | The following adjustments were included in the unaudited pro forma financial information (in thousands): Pro Forma Year Ended February 28, 2017 2016 LoJack standalone net income: From March 1 to March 14, 2016 $ 973 $ - For the year ended December 31, 2015 - 3,197 Increase (decrease) in revenue for fair valuation of deferred revenue 1,807 (1,807 ) (Increase) decrease in costs and expenses: Amortization of inventory step-up 4,339 (4,339 ) Amortization of intangible assets and depreciation of property, equipment and improvements acquired (309 ) (7,402 ) Acquisition and integration expenses 4,513 (4,168 ) Net increase (decrease) in pretax income (loss) 11,323 (14,519 ) Income tax effects (2,287 ) 2,648 Change in net income (loss) 9,036 (11,871 ) Net income (loss) as reported (7,904 ) 16,940 Pro forma net income $ 1,132 $ 5,069 |
CONCENTRATION OF CUSTOMERS AND
CONCENTRATION OF CUSTOMERS AND SUPPLIERS | 12 Months Ended |
Feb. 28, 2018 | |
Risks And Uncertainties [Abstract] | |
CONCENTRATION OF CUSTOMERS AND SUPPLIERS | NOTE 3 – CONCENTRATION OF CUSTOMERS AND SUPPLIERS Significant Customers We sell telematics products to large global enterprises in the industrial equipment, telecommunications and automotive market verticals. Some of these customers accounted for more than 10% of our revenue or accounts receivable as follows: Year Ended February 28, 2018 2017 2016 Net sales: Customer A 12.4 % 8.1 % 9.5 % Customer C - 4.3 % 13.9 % Year Ended February 28, 2018 2017 2016 Accounts receivable: Customer A 14.9 % 11.7 % 14.5 % Customer B 13.0 % 4.8 % 2.3 % Customer B represents certain of our customers, which are considered affiliates under common control and collectively represent more than 10% of our accounts receivable at February 28, 2018. Through our history and presently we have dealt with separate purchasing departments for the individual customers and have at all times sold different products to each of them. Customer C was our principal customer in our Satellite business, which ceased operations during fiscal 2017. Significant Suppliers We purchase a significant amount of our product inventory from certain manufacturers or suppliers including components, assemblies and electronic manufacturing parts. The inventory is purchased under standard supply agreements that outline the terms of the product delivery. The title and risk of loss of the product passes to us upon shipment from the manufacturers’ plant or warehouse. Some of these manufacturers accounted for more than 10% of our purchases and accounts payable as follows: Year Ended February 28, 2018 2017 2016 Inventory purchases: Supplier A 32.6 % 34.4 % 55.6 % Supplier B 15.8 % 13.8 % 16.4 % Supplier C 9.2 % 11.4 % - Year Ended February 28, 2018 2017 2016 Accounts Payable: Supplier A 40.5 % 33.2 % 56.7 % Supplier B 16.2 % 17.5 % 14.9 % We are currently reliant upon these suppliers for products. Although we believe that we can obtain products from other sources, the loss of a significant supplier could have a material impact on our financial condition and results of operations as the products that are being purchased may not be available on the same terms from another supplier. |
CASH, CASH EQUIVALENTS AND INVE
CASH, CASH EQUIVALENTS AND INVESTMENTS | 12 Months Ended |
Feb. 28, 2018 | |
Cash And Cash Equivalents [Abstract] | |
CASH, CASH EQUIVALENTS AND INVESTMENTS | NOTE 4 – CASH, CASH EQUIVALENTS AND INVESTMENTS The following tables summarize our financial instrument assets (in thousands): As of February 28, 2018 Balance Sheet Classification of Fair Value Unrealized Cash and Short-Term Adjusted Gains Fair Cash Marketable Other Cost (Losses) Value Equivalents Securities Assets Cash $ 51,529 $ - $ 51,529 $ 51,529 $ - $ - Level 1: Money market funds 9,034 - 9,034 9,034 - - Mutual funds (1) 4,920 721 5,641 - - 5,641 International equities 2,175 643 2,818 - 2,509 309 Level 2: Repurchase agreements 57,500 - 57,500 57,500 - - Corporate bonds 35,444 (13 ) 35,431 14,540 20,891 - Total $ 160,602 $ 1,351 $ 161,953 $ 132,603 $ 23,400 $ 5,950 As of February 28, 2017 Balance Sheet Classification of Fair Value Unrealized Cash and Short-Term Adjusted Gains Fair Cash Marketable Other Cost (Losses) Value Equivalents Securities Assets Cash $ 39,322 $ - $ 39,322 $ 39,322 $ - $ - Level 1: Money market funds 3,406 - 3,406 3,406 - - Mutual funds (1) 5,429 372 5,801 - - 5,801 International equities 296 (54 ) 242 - - 242 Level 2: Repurchase agreements 24,000 - 24,000 24,000 - - Corporate bonds 33,708 (8 ) 33,700 26,978 6,722 - Total $ 106,161 $ 310 $ 106,471 $ 93,706 $ 6,722 $ 6,043 (1) Amounts represent various equities, bond and money market mutual funds held in a “Rabbi Trust” and are restricted for payment obligations to non-qualified deferred compensation plan participants. See Note 9 for discussion of deferred compensation plan. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Feb. 28, 2018 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 5 – ACCOUNTS RECEIVABLE Accounts receivable consist of the following (in thousands): February 28, 2018 2017 Accounts receivable $ 72,766 $ 68,365 Allowance for doubtful accounts (1,186 ) (962 ) $ 71,580 $ 67,403 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Feb. 28, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 6 – INVENTORIES Inventories consist of the following (in thousands): February 28, 2018 2017 Raw materials $ 18,629 $ 15,822 Work in process 567 294 Finished goods 17,106 13,163 $ 36,302 $ 29,279 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Feb. 28, 2018 | |
Property Plant And Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 7 – PROPERTY AND EQUIPMENT Property and equipment consist of the following (in thousands): February 28, 2018 2017 Leasehold improvements $ 3,157 $ 3,484 LoJack system components and law enforcement tracking units 20,558 22,412 Plant equipment and tooling 16,842 20,420 Office equipment, computers and furniture 14,206 14,123 Software 31,427 28,225 86,190 88,664 Less accumulated depreciation and amortization (69,585 ) (70,388 ) 16,605 18,276 Fixed assets not yet in service 4,657 2,886 $ 21,262 $ 21,162 Depreciation expense was $8.0 million, $8.4 million, and $3.6 million in fiscal years ended February 28, 2018, 2017 and 2016, respectively. Fixed assets not yet in service consist primarily of capitalized internal-use software and certain tooling and other equipment that have not been placed into service. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Feb. 28, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 8 – GOODWILL AND OTHER INTANGIBLE ASSETS Changes in goodwill are as follows (in thousands): Year Ended February 28, 2018 2017 Balance at beginning of period $ 72,980 $ 16,508 Acquisition of LoJack - 56,472 Balance at end of period $ 72,980 $ 72,980 Other intangible assets are comprised as follows (in thousands): Gross Accumulated Amortization Net Amortization Feb. 28, Feb. 28, Feb. 28, Feb. 28, Feb. 28, Feb. 28, Period 2017 Additions 2018 2017 Expense 2018 2018 2017 Supply contract 5 years $ 2,220 $ - $ 2,220 $ 2,112 $ 108 $ 2,220 $ - $ 108 Developed technology 2-7 years 22,280 - 22,280 10,323 3,965 14,288 7,992 11,957 Tradenames 7-10 years 37,643 86 37,729 5,226 3,861 9,087 28,642 32,417 Customer lists 4-7 years 22,950 - 22,950 15,018 4,605 19,623 3,327 7,932 Dealer relationships 7 years 16,850 - 16,850 2,308 2,406 4,714 12,136 14,542 Covenants not to compete 5 years 170 - 170 162 8 170 - 8 Patents 5 years 347 136 483 88 36 124 359 259 $ 102,460 $ 222 $ 102,682 $ 35,237 $ 14,989 $ 50,226 $ 52,456 $ 67,223 Amortization expense of intangible assets was $15.0 million, $15.1 million and $6.6 million in fiscal years ended February 28, 2018, 2017 and 2016, respectively. Estimated future amortization expense as of February 28, 2018 is as follows (in thousands): 2019 $ 11,700 2020 9,693 2021 7,870 2022 6,236 2023 6,016 Thereafter 10,941 $ 52,456 |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Feb. 28, 2018 | |
Other Assets Noncurrent Disclosure [Abstract] | |
OTHER ASSETS | NOTE 9 – OTHER ASSETS Other assets consist of the following (in thousands): February 28, 2018 2017 Deferred compensation plan assets $ 5,641 $ 5,801 Investment in international licensees 2,349 2,282 Equity investment in and loan to ThinxNet GmbH 2,674 - Equity investment in and loan to Smart Driver Club 3,814 2,402 Other 4,351 2,080 $ 18,829 $ 12,565 We have a non-qualified deferred compensation plan in which certain members of management and all non-employee directors are eligible to participate. Participants may defer a portion of their compensation until retirement or another date specified by them in accordance with the plan. We are funding the plan obligations through cash deposits to a Rabbi Trust that are invested in various equity, bond and money market mutual funds in generally the same proportion as investment elections made by the participants. The deferred compensation plan liability is included in Other Non-Current Liabilities in the accompanying consolidated balance sheets. Our investment in international licensees at February 28, 2018 consists principally of a 12.5% equity interest in a Mexican licensee of $1.7 million, as well as other smaller interests in Benelux and French licensees. Generally, the investments in international licensees are accounted for using the cost method of accounting and carried at cost as we do not exercise significant influence over these investees. We have received dividends from our investment in the Mexican licensee in the amount $0.3 million and $0.2 million for fiscal year ended February 28, 2018 and 2017, respectively. No dividends were received in fiscal 2016. In September 2015, we invested £1,400,000 or approximately $2.2 million for a 49% minority ownership interest in Smart Driver Club Limited (“Smart Driver Club”), a technology and insurance startup company located in the United Kingdom. This investment is accounted for under the equity method since we have significant influence over the investee. To date we have made loans aggregating £3,700,000, of which £1,700,000 was made in fiscal 2018 to Smart Driver Club bearing interest at an annual interest rate of 8%, with all principal and all unpaid interest due in 2021. The foreign currency translation adjustment for this equity investment and loans amounted to $0.6 million as of February 28, 2018 and is included as a component of Accumulated Other Comprehensive Loss in the consolidated balance sheet as of that date. Our equity in the net loss of Smart Driver Club amounted to $1.4 million, $1.3 million and $0.8 million in fiscal years ended February 28, 2018, 2017 and 2016, respectively. To date, our equity in the aggregate net losses of Smart Driver Club is approximately $3.5 million. Effective August 24, 2017, we acquired an ownership interest valued at $1.4 million in ThinxNet GmbH, a company headquartered in Munich, Germany (“ThinxNet”). ThinxNet is an early stage company focused on commercializing cloud-based mobile device and applications in the automotive sector throughout Europe. This represents a cost basis investment as we cannot exercise significant influence over the investee. Contemporaneously, we executed an unsecured convertible note receivable for $1.27 million with an interest rate of 6%, which has a fixed term of 12 months, after which the loan can be converted into equity in ThinxNet or a loan due on demand at our option. The equity investment and note receivable were consideration we received in exchange for our outstanding accounts receivable from ThinxNet. No gain or loss was recorded on this exchange. The assets received in this exchange are included in Other Assets in the consolidated balance sheet as of February 28, 2018. |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 12 Months Ended |
Feb. 28, 2018 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | NOTE 10 – FINANCING ARRANGEMENTS Revolving Credit Facility On March 30, 2018, we entered into a revolving credit facility with J.P. Morgan Chase Bank that provides for borrowings of up to $50 million. This revolving credit facility expires on March 30, 2020. Borrowings under this revolving credit facility bear interest at either a Prime or LIBOR-based variable rate as selected by us on a periodic basis. The revolving credit facility contains certain negative and affirmative covenants including financial covenants that require us to maintain a minimum level of earnings before interest, income taxes, depreciation, amortization and other non-cash charges (EBITDA) to interest ratio and a minimum senior indebtedness ratio as well as a total indebtedness coverage ratio, both measured on a quarterly basis. 1.625% Convertible Senior Unsecured Notes As of February 28, 2018, we had outstanding $172.5 million aggregate principal amount of convertible senior unsecured notes (“Notes”). The Notes are senior unsecured obligations and bear interest at a rate of 1.625% per year payable in cash on May 15 and November 15 of each year. The Notes mature on May 15, 2020 unless converted earlier or repurchased in accordance with their terms. We may not redeem the Notes prior to their stated maturity date and they will be convertible into cash, shares of our common stock or a combination of cash and shares of common stock, at our election, based on an initial conversion rate of 36.2398 shares of common stock per $1,000 principal amount. This ratio is equivalent to an initial conversion price of $27.594 per share of common stock, subject to customary adjustments. Holders may convert their Notes at their option at any time prior to November 15, 2019 upon the occurrence of certain events in the future, as defined in the indenture agreement dated May 6, 2015 (the “Indenture”). During the period from November 15, 2019 to May 13, 2020, holders may convert all or any portion of their Notes regardless of the foregoing conditions. Our intent is to settle the principal amount of the Notes in cash upon conversion. If the conversion value exceeds the principal amount, we would deliver shares of common stock in respect to the remainder of the conversion obligation in excess of the aggregate principal amount (the “conversion spread”). The shares associated with the conversion spread, if any, would be included in the denominator for the computation of diluted earnings per share, with such shares calculated using the average closing price of our common stock during each period. As of February 28, 2018, the conditions allowing holders of the Notes to convert have not been met. The net proceeds from the sale of the Notes were $167.2 million, net of issuance costs of $5.3 million. We used $15.4 million of the proceeds to pay the net cost of purchased convertible note hedges that was partially offset by the proceeds from the separate sale of warrants, as described below. Additionally, we have used the proceeds from the Notes for general corporate purposes including acquisitions or other strategic transactions and working capital. The Indenture contains customary terms and conditions, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Notes, by notice to us and the Trustee, may declare 100% of the principal amount of, and accrued and unpaid interest, if any, on all the Notes then outstanding to be due and payable immediately. Such events of default include, without limitation, the default by us or any of our subsidiaries with respect to indebtedness for borrowed money in excess of $10 million and the entry of judgments for the payment of $10 million or more against us or any of our subsidiaries which are not paid, discharged or stayed within 60 days. If we undergo a fundamental change (as defined in the Indenture), holders of the Notes may require us to repurchase their Notes at a repurchase price of 100% of the principal amount of the Notes, plus any accrued and unpaid interest, if any, to but not including the fundamental change repurchase date. In addition, following certain corporate events that occur prior to maturity, we will increase the conversion rate for a holder who elects to convert our Notes in connection with such a corporate event in certain circumstances. In such event, an aggregate of up to 2.5 million additional shares of common stock could be issued upon conversions in connection with such corporate events, subject to adjustment in the same manner as the conversion rate. Accounting guidance requires that convertible debt that can be settled for cash, such as the Notes, be separated into the liability and equity component at issuance and each be assigned a value. The value assigned to the liability component is the estimated fair value, as of the issuance date, of a similar debt without the conversion feature. The difference between the principal amount of the Notes and the estimated fair value of the liability component, representing the value of the embedded conversion option assigned to the equity component, is recorded as a debt discount on the issuance date. The fair value of the liability component of the Notes in the amount of $138.9 million was determined using a discounted cash flow analysis, in which the projected interest and principal payments were discounted back to the issuance date of the Notes at a market interest rate for nonconvertible debt of 6.2%, which represents a Level 3 fair value measurement. The remaining gross proceeds of the Notes of $33.6 million represents the fair value of the embedded conversion feature that was recorded as an increase in additional paid-in capital within the stockholders’ equity section, with an offsetting debt discount recorded of $33.6 million. The associated deferred tax effect of $16.0 million was recorded as a reduction of additional paid-in capital. The amount recorded in additional paid-in capital is not to be remeasured as long as it continues to meet the conditions for equity classification. The debt discount of $33.6 million is being amortized to interest expense using the effective interest method with an effective interest rate of 6.2% over the period from the issuance date through the contractual maturity date of the Notes of May 15, 2020. In accounting for the issuance costs related to the Notes, we allocated the total amount of such costs incurred to the Note liability and equity components based on their relative fair values. Issuance costs of $4.3 million attributable to the liability component were recorded as a direct deduction from the carrying value of the Notes and are being amortized to expense over the term of the Notes using the effective interest method. Issuance costs of $1.0 million attributable to the equity component were recorded as a charge to additional paid-in capital within stockholders’ equity. Additionally, we recorded a deferred tax asset of $0.4 million related to the equity component of issuance costs because such costs are deductible for tax purposes. Balances attributable to the Notes consist of the following (in thousands): February 28, 2018 2017 Principal $ 172,500 $ 172,500 Less: Unamortized debt discount (16,143 ) (22,770 ) Unamortized debt issuance costs (2,058 ) (2,903 ) Net carrying amount of the Notes $ 154,299 $ 146,827 The Notes are carried at their principal face amount, less unamortized debt discount and issuance costs, and are not carried at fair value at each period end. The approximate fair value of the Notes as of February 28, 2018 was $188 million, which was estimated on the basis of inputs that are observable in the market and which is considered a Level 2 measurement method in the fair value hierarchy. See Note 16 for information related to interest expense on the Notes. Note Hedge and Warrant Arrangements In connection with the Notes, we entered into note hedge transactions relating to 6.25 million shares of common stock with certain counterparties. The note hedges represent call options from the counterparties with respect to $172.5 million aggregate principal amount of the Notes. We paid $31.3 million for the note hedges and as a result approximately $19.3 million, net of deferred tax effects, was recorded as a reduction to additional paid-in capital within stockholders’ equity. The note hedges cover the 6.25 million shares of our common stock that initially underlie the Notes and are intended to reduce the potential dilution to our outstanding common stock and/or reduce the amount of any cash payments we are required to make in excess of the principal amount of any converted Notes upon conversion in the event that the market price per share of our common stock is greater than the strike price of the note hedges, which is initially equal to $27.594. Separately, we entered into warrant transactions with the same counterparties, giving them the right to acquire the same number of shares of common stock that underlie the Notes at a strike price of $39.42 per share which represents a premium of 100% over the last reported sale price of our common stock of $19.71 on April 30, 2015, the date on which the Notes were priced. The warrants will be exercisable in equal installments for a period of 80 trading days beginning on August 15, 2020. We received a total amount of $16.0 million in cash proceeds from the sale and issuance of the warrants. The warrants will have a dilutive effect to the extent that the market price of our common stock exceeds the applicable strike price of the warrants on any expiration date of the warrants. We entered into the note hedges and warrants as separate transactions with the counterparties. The note hedges and warrants are not part of the terms of the Notes and will not affect the holders’ rights under the Notes. In addition, holders of the Notes will not have any rights with respect to the note hedges or the warrants. The values ascribed to the note hedges and warrants were initially recorded to and continue to be classified as additional paid-in capital within stockholders’ equity. We are required to assess whether the note hedges and warrants continue to meet the stockholders’ equity classification requirements for the remaining term of the Notes. If in any future period these derivative instruments fail to satisfy those requirements, they would need to be reclassified out of stockholders’ equity, to either assets or liabilities depending on their nature, and be recorded at fair value with subsequent changes in their fair value reflected in earnings. We elected to integrate the note hedge call options with the Notes for federal income tax purposes pursuant to applicable U.S. Treasury Regulations. Accordingly, the $31.3 million gross cost of the note hedges will be deductible for income tax purposes as original issue discount interest over the term of the Notes. We recorded a deferred tax asset of $12.0 million which represents the tax benefit of these tax deductions with an offsetting entry to additional paid-in capital. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Feb. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 – INCOME TAXES Our income (loss) before income taxes and equity in net loss of affiliate consists of the following (in thousands): Year Ended February 28, 2018 2017 2016 Domestic $ 13,898 $ (11,910 ) $ 22,461 Foreign 14,811 3,727 (120 ) Total income (loss) before income taxes and equity in net loss of affiliate $ 28,709 $ (8,183 ) $ 22,341 The components of income tax benefit (provision) consists of the following (in thousands): Year Ended February 28, 2018 2017 2016 Current: Federal $ (412 ) $ - $ (182 ) State (694 ) (137 ) (208 ) Foreign (2,204 ) (1,035 ) (60 ) Total current (3,310 ) (1,172 ) (450 ) Deferred: Federal (6,156 ) 1,712 (4,331 ) State (1,458 ) 539 209 Foreign 243 484 - Total deferred (7,371 ) 2,735 (4,122 ) Income tax benefit (provision) $ (10,681 ) $ 1,563 $ (4,572 ) The income tax benefit (provision) differs from the amount obtained by applying the statutory rate as follows (in thousands): Year Ended February 28, 2018 2017 2016 Income tax benefit (provision) at U.S. statutory federal rate $ (9,400 ) $ 2,864 $ (7,819 ) State income tax provision, net of federal income tax effect (574 ) 182 (833 ) Foreign taxes 2,923 68 (102 ) Impact of tax reform (8,955 ) - - Valuation allowance reductions (increases) 3,046 (1,391 ) 2,541 Research and development tax credits 1,034 806 1,008 Other, net 1,245 (966 ) 633 Total income tax benefit (provision) $ (10,681 ) $ 1,563 $ (4,572 ) The components of net deferred income tax assets for U.S. income tax purposes are as follows (in thousands): February 28, 2018 2017 Net operating loss carryforwards $ 10,343 $ 23,751 Depreciation, amortization and impairments (11,325 ) (21,959 ) Research and development credits 14,404 12,307 Stock-based compensation 2,376 2,855 Other tax credits 2,015 3,650 Inventory reserve 292 903 Warranty reserve 429 670 Payroll and employee benefit accruals 1,941 3,012 Allowance for doubtful accounts 354 961 Other accrued liabilities 8,794 6,738 Other, net 3,710 1,203 Gross deferred tax assets 33,333 34,091 Valuation allowance (1,752 ) (6,587 ) Net deferred tax assets $ 31,581 $ 27,504 During fiscal 2018, we decreased the valuation allowance against our deferred tax assets by a net $4.8 million. This reduction in our valuation allowance is primarily attributable to (i) a $2.1 million reduction due to expiration of California NOLs, and (ii) a $2.4 million reduction of foreign tax credits that can now be utilized to offset U.S. Federal taxable income arising from the one-time deemed transition tax on foreign earnings and profits (“E&P”) as discussed below under the caption – “The Tax Cut and Jobs Act”. The remaining $1.8 million valuation allowance as of February 28, 2018 relates to state net operating loss carryforwards (“NOLs”), foreign tax credits and capital loss carryforwards that are not projected to be used before their expiration dates. At February 28, 2018, we had NOLs of approximately $35 million and $43 million for federal and state purposes, respectively, expiring at various dates through fiscal 2037. If certain substantial changes in our ownership were to occur, there may be certain annual limitations on the amount of the NOL carryforwards that can be utilized. As of February 28, 2018, we had R&D tax credit carryforwards of $9.1 million and $8.0 million for federal and state income tax purposes, respectively. The federal R&D tax credits expire at various dates through 2037. A substantial portion of the state R&D tax credits have no expiration date. We adopted the updated guidance on stock based compensation. As described further in Note 12, we have tax deductions on exercised stock options and vested restricted stock awards that exceed stock compensation expense amounts recognized for financial reporting purposes. These excess tax deductions amounted to $2.6 million, $0 and $4.5 million in fiscal years 2018, 2017 and 2016, respectively. Under the new guidance, all excess tax benefits and tax deficiencies are recognized in the income statement as they occur. We follow ASC Topic 740, “Income Taxes,” which clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. Management determined based on our evaluation of our income tax positions that we have one uncertain tax position of $1.0 million at February 28, 2018 for which we have not yet recognized an income tax benefit for financial reporting purposes. The $1.0 million of unrecognized tax benefits for uncertain tax positions has remained unchanged during the past three years so there has been not activity in this account in fiscal 2018, 2017 and 2016. We file income tax returns in the U.S. federal jurisdiction, various U.S. states and Puerto Rico, Canada, Ireland, Italy, United Kingdom, the Netherlands, Brazil and New Zealand. Certain income tax returns for the years 2013 through 2016 remain open to examination by U.S. federal and state tax authorities. To the extent allowed by law, the tax authorities may have the right to examine prior periods in which net operating losses or tax credits were generated and carried forward, and to make adjustments up to the net operating loss or tax credit carryforward amount. Our Canadian subsidiaries’ income tax returns for fiscal years 2014 through 2017 remain open to examination by tax authorities in Canada. Most of LoJack’s foreign subsidiaries’ income tax returns for 2013 to present remain open for examination by the tax authorities in the countries in which they are filed. Tax returns in the Netherlands from 2012 to present remain open for examination. In addition to U.S. net operation loss and R&D tax credits, we have deferred tax assets for Italian and Canadian income tax purposes amounting to $7.4 million and $7.6 million, respectively, at February 28, 2018, which relate primarily to net operating losses of $11.9 million and research and development expenditure pool carryforwards of $2.8 million. We have provided a 100% valuation allowance against these deferred tax assets at February 28, 2018 as it is more likely than not that these deferred tax assets will not be realized. The Tax Cuts and Jobs Act The Tax Cuts and Jobs Act (“The Act”) was enacted on December 22, 2017. In addition to other items, the Act (i) reduces the U.S. federal corporate tax rate from 35% to 21%, (ii) requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and (iii) creates new taxes on certain foreign-sourced earnings. At February 28, 2018, we have determined a reasonable provisional estimate on our existing deferred tax balances and the one-time transition tax under the U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 118. Accordingly, we recognized a charge of $6.6 million, which is included as a component of our income tax expense in the fourth quarter of our fiscal year. The charge is principally related to the impact of remeasuring certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. The one-time transition tax is based on our total E&P of foreign CFCs that we were previously excluded from U.S. income taxes. We recorded an amount for our one-time transition tax liability resulting in an increase in income tax expense of $2.4 million. The transition tax is based in part on the amount of those earnings held in cash and other specified assets. A significant portion of the transition tax liability is offset by the utilization of foreign tax credits which were previously subject to a full valuation allowance. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax and any additional outside basis differences inherent in these entities as these amounts continue to be indefinitely reinvested in foreign operations. Any adjustments to these provisional amounts will be reported as a component of income tax expense in the quarter in which it is determined but no later than the fourth quarter of fiscal 2019. We previously considered the earnings in our non-U.S. subsidiaries to be indefinitely reinvested and accordingly, recorded no deferred income taxes. We are currently analyzing our global working capital and cash requirements and the potential tax liabilities attributable to a repatriation, including calculating any excess of the amount for financial reporting over the tax basis in our foreign subsidiaries. We have not yet determined whether we plan to change our prior assertion and repatriate earnings. Accordingly, we have not recorded any deferred taxes attributable to our investments in our foreign subsidiaries. To the extent that we change our prior assertion, we will record the tax effects of any change in our prior assertion in the period that we complete our analysis and are able to make a reasonable estimate, and disclose any unrecognized deferred tax liability for temporary differences related to our foreign investments, if practicable. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Feb. 28, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 12 – STOCKHOLDERS' EQUITY Stock Repurchase In June 2016, our Board of Directors authorized a $25 million stock repurchase program, under which we repurchased 1.8 million of our outstanding common stock shares during fiscal 2017 at an average cost of $14.20 per share. We financed the entire $25 million of stock repurchases with existing cash balances and all of the stock was paid for and retired prior to February 28, 2017. There were no stock repurchases in the fiscal year ended February 28, 2018. Stock-Based Compensation Our Board of Directors adopted the 2004 Incentive Stock Plan (the Plan) effective July 30, 2004, which provides for the granting of qualified and nonqualified stock options, restricted stock, performance stock units (PSUs), restricted stock units (RSUs), phantom stock and bonus stock to employees and directors. The primary purpose of the Plan is to enhance our ability to attract, motivate, and retain the services of qualified employees, officers and directors. Any stock options under the Plan will have a term of not more than 10 years and the vesting of the awards will be at the discretion of the Compensation Committee of the Board of Directors but is not expected to exceed four years. We treat equity awards with multiple vesting tranches as a single award for expense attribution purposes and recognize compensation expense on a straight-line basis over the requisite service period of the entire award. As of February 28, 2018, there were 2,233,762 award units in the 2004 Plan that were available for grant. The following table summarizes our stock option activity (number of options and aggregate intrinsic value in thousands): Number of Options Weighted Average Exercise Price Weighted average remaining contractual life (years) Aggregate intrinsic value Outstanding at February 28, 2015 1,007 $ 5.80 4.6 Granted 82 17.54 Exercised (228 ) 5.62 Forfeited or expired (1 ) 1.80 Outstanding at February 28, 2016 860 6.96 4.7 Granted 227 14.49 Exercised (125 ) 7.67 Forfeited or expired (7 ) 15.70 Outstanding at February 28, 2017 955 $ 8.60 5.5 Granted 165 19.31 Exercised (140 ) 2.36 Forfeited or expired - - Outstanding at February 28, 2018 980 $ 11.29 5.9 $ 11,866 Exercisable at February 28, 2016 688 $ 4.66 4.7 $ 9,374 Exercisable at February 28, 2017 624 $ 5.03 5.5 $ 7,046 Exercisable at February 28, 2018 590 $ 7.54 4.1 $ 9,349 Year ended February 28, 2018 2017 2016 Weighted average grant date fair value of stock options granted during the year $ 10.20 $ 6.69 $ 9.39 We use the Black-Scholes-Merton option pricing model for valuation of stock option awards. Calculating the fair value of stock option awards requires the input of highly complex and subjective assumptions. Other reasonable assumptions could provide differing results. The fair value of stock options at the grant date was determined using the following assumptions: Year Ended February 28, Black-Scholes Valuation Assumptions 2018 2017 2016 Expected life (years) 6 6 6 Expected volatility 46% 48% 56% Risk-free interest rates 2.0% 1.3% 1.8% Expected dividend yield 0% 0% 0% For the years ended February 28, 2018, 2017 and 2016, the expected life of options was determined using historical experience of our stock option grants and forfeiture activities. The expected volatility is based on the historical volatility of our stock price. The risk-free interest rate is based on the implied yield currently available on U.S. Treasury issues with terms which approximate the expected life of the stock options. Changes in our outstanding restricted stock shares, PSUs and RSUs at February 28, 2018, 2017 and 2016 were as follows (shares in thousands): Number of Restricted Shares, PSUs and RSUs Weighted Average Grant Date Fair Value Shares Retained to Cover Statutory Minimum Withholding Taxes Outstanding at February 28, 2015 886 $ 12.90 Granted 517 17.75 Vested (407 ) 9.97 147 Forfeited (43 ) 15.55 Outstanding at February 28, 2016 953 16.66 Granted 766 14.63 Vested (382 ) 15.18 122 Forfeited (98 ) 15.64 Outstanding at February 28, 2017 1,239 $ 15.94 Granted 770 19.55 Vested (399 ) 15.92 133 Forfeited (176 ) 17.34 Outstanding at February 28, 2018 1,434 $ 17.72 Stock-based compensation expense is included in the following captions of the consolidated statements of comprehensive income (loss) (in thousands): Year Ended February 28, 2018 2017 2016 Cost of revenues $ 653 $ 374 $ 229 Research and development 1,471 1,033 781 Selling and marketing 2,314 1,655 1,208 General and administrative 4,860 4,771 3,636 $ 9,298 $ 7,833 $ 5,854 As of February 28, 2018, there was $21.9 million of unrecognized stock-based compensation cost related to non-vested equity awards, which is expected to be recognized over a weighted-average remaining vesting period of 3.1 years. Tax Benefits from Exercise of Stock Options and Vesting of Restricted Stock and RSU Awards The aggregate fair value of stock options exercised and vested restricted stock and RSU awards as of the exercise date or vesting date was $6.9 million, $6.3 million and $9.1 million for fiscal years ended February 28, 2018, 2017 and 2016, respectively. In connection with these equity awards, the excess stock compensation tax deductions were $2.6 million, $0 and $4.5 million for fiscal years ended February 28, 2018, 2017 and 2016, respectively. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Feb. 28, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 13 – EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period plus the dilutive effect of outstanding stock options and restricted stock-based awards using the treasury stock method. The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per share amounts): Year Ended February 28, 2018 2017 2016 Net income (loss) $ 16,617 $ (7,904 ) $ 16,940 Basic weighted average number of common shares outstanding 35,250 35,917 36,448 Effect of stock options and restricted stock units computed on treasury stock method 889 - 502 Diluted weighted average number of common shares outstanding 36,139 35,917 36,950 Earnings (loss) per share: Basic $ 0.47 $ (0.22 ) $ 0.46 Diluted $ 0.46 $ (0.22 ) $ 0.46 All outstanding stock options and restricted stock-based awards in the amount of 1.0 million and 1.2 million, respectively, at February 28, 2017 were excluded from the computation of diluted earnings per share for the year then ended because the effect of inclusion would be antidilutive. Shares subject to anti-dilutive stock options and restricted stock-based awards of 0.2 million for both the fiscal years ended February 28, 2018 and 2016 were excluded from the calculations of diluted earnings per share for the years then ended. We have the option to pay cash, issue shares of common stock or any combination thereof for the aggregate amount due upon conversion of the Notes. Our intent is to settle the principal amount of the Notes in cash upon conversion. As a result, only the shares issuable for the conversion value in excess of the principal amount of the Notes would be included in diluted earnings per share. From the time of the issuance of Notes, the average market price of our common stock has been less than the $27.594 initial conversion price of the Notes, and consequently no shares have been included in diluted earnings per share for the conversion value of the Notes. |
COMPREHENSIVE INCOME (LOSS)
COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Feb. 28, 2018 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
COMPREHENSIVE INCOME (LOSS) | NOTE 14 – COMPREHENSIVE INCOME (LOSS) The following table shows the changes in our accumulated other comprehensive income (loss) for the fiscal years ended February 28, 2018, 2017 and 2016 (in thousands): Cumulative Foreign Currency Translation Unrealized Gains/Losses on Marketable Securities Total Balances at February 29, 2015 $ (65 ) $ - $ (65 ) Other comprehensive loss, net of tax (161 ) - (161 ) Balances at February 29, 2016 (226 ) - (226 ) Other comprehensive loss, net of tax (280 ) (35 ) (315 ) Balances at February 29, 2017 (506 ) (35 ) (541 ) Other comprehensive income (loss), net of tax (122 ) 464 342 Balances at February 28, 2018 $ (628 ) $ 429 $ (199 ) |
EMPLOYEE RETIREMENT PLANS
EMPLOYEE RETIREMENT PLANS | 12 Months Ended |
Feb. 28, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
EMPLOYEE RETIREMENT PLAN | NOTE 15 – EMPLOYEE RETIREMENT PLAN We maintain a 401(k) defined-contribution plan allowing eligible U.S.-based employees to contribute up to an annual maximum amount as set periodically by the Internal Revenue Service. Our matching contributions to the plan are discretionary subject to the authorization of our Board of Directors. The current matching contribution to the plan is equal to 100% of the first 3% of participants’ compensation contribution plus 50% of the next 2% contributed by the participant. We recorded expense for the matching contributions of $2.0 million, $1.3 million and $1.2 million in fiscal years ended February 28, 2018, 2017 and 2016, respectively. |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 12 Months Ended |
Feb. 28, 2018 | |
Other Financial Information [Abstract] | |
OTHER FINANCIAL INFORMATION | NOTE 16 – OTHER FINANCIAL INFORMATION Supplemental Balance Sheet Information Other current liabilities consist of the following (in thousands): February 28, 2018 2017 Warranty reserves $ 5,734 $ 6,518 Litigation accrual 17,559 10,144 Other 8,395 8,296 $ 31,688 $ 24,958 Other non-current liabilities consist of the following (in thousands): February 28, 2018 2017 Deferred compensation plan liability $ 5,642 $ 5,825 Deferred revenue 16,763 12,257 Deferred rent 200 378 Other 1,644 1,769 $ 24,249 $ 20,229 See Note 9 for information related to our non-qualified deferred compensation plan. Supplemental Income Statement Information Interest expense consists of the following (in thousands): Year Ended February 28, 2018 2017 2016 Interest expense on convertible senior unsecured notes: Stated interest at 1.625% per annum $ 2,806 $ 2,803 $ 2,268 Amortization of note discount 6,627 6,232 4,613 Amortization of debt issue costs 845 795 588 Total interest expense on convertible notes 10,278 9,830 7,469 Other interest expense 2 66 126 Total interest expense $ 10,280 $ 9,896 $ 7,595 Supplemental Cash Flow Information “Net cash provided by operating activities” in the consolidated statements of cash flows includes cash payments for interest and income taxes. The following is our supplemental schedule of cash payments for interest and income taxes and non-cash investing and financing activities (in thousands): Year Ended February 28, 2018 2017 2016 Cash payments for interest and income taxes: Interest expense paid $ 2,844 $ 2,852 $ 1,512 Income tax paid $ 3,498 $ 2,259 $ 451 Non-cash investing and financing activities: Equity investment in and loan to ThinxNet GmbH (see Note 9) $ 2,674 $ - $ - Valuation and Qualifying Accounts Following is our schedule of valuation and qualifying accounts for the last three years (in thousands): Balance at beginning of year Charged (credited) to costs and expenses Deductions Other (1) Balance at end of year Allowance for doubtful accounts: Fiscal 2016 673 170 (221 ) - 622 Fiscal 2017 622 541 (201 ) - 962 Fiscal 2018 962 685 (461 ) - 1,186 Warranty reserve: Fiscal 2016 1,819 1,015 (942 ) - 1,892 Fiscal 2017 1,892 1,305 (2,562 ) 5,883 6,518 Fiscal 2018 6,518 1,331 (2,115 ) - 5,734 Deferred tax assets valuation allowance: Fiscal 2016 4,159 - (2,541 ) - 1,618 Fiscal 2017 1,618 1,391 - 3,578 6,587 Fiscal 2018 6,587 - (4,835 ) - 1,752 (1) Represents amount of reserves and valuation allowance assumed in acquisition of LoJack. The warranty reserve is included in the Other Current Liabilities in the consolidated balance sheets. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Feb. 28, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 17 – COMMITMENTS AND CONTINGENCIES Operating Lease Commitments We lease office space, tower infrastructure locations, vehicles, certain manufacturing equipment and office equipment under operating lease arrangements expiring through fiscal 2026. Where operating leases contain escalation clauses, rent abatements, and/or concessions, such as rent holidays and landlord or tenant incentives or allowances, we apply them in the determination of straight-line rent expense over the lease term. Certain operating leases require the payment of real estate taxes or other occupancy costs, which may be subject to escalation. 2019 $ 6,477 2020 4,689 2021 2,556 2022 1,683 2023 1,296 Thereafter 2,272 $ 18,973 Rent expense under operating leases was $6.9 million, $7.0 million and $2.2 million in fiscal years ended February 28, 2018, 2017 and 2016, respectively. Other Commitment and Contingencies See discussion of other commitments and contingencies in Note 18 on Legal Proceedings. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 12 Months Ended |
Feb. 28, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | NOTE 18 – LEGAL PROCEEDINGS Omega patent infringement claim In December 2013, a patent infringement lawsuit was filed against us by Omega Patents, LLC (“Omega”) alleging that certain of our vehicle tracking products infringed on patents owned by them. On February 24, 2016, a jury in the U.S. District Court for the Middle District of Florida awarded Omega damages of $2.975 million, for which we recorded a reserve of $2.9 million in fiscal 2016. Following the trial, Omega brought a motion seeking an injunction and requesting payment of treble damages and attorneys’ fees. On April 5, 2017, the court denied the request for an injunction but awarded treble damages in the aggregate amount of $8.9 million. On April 24, 2017, the court awarded attorneys’ fees, costs, and prejudgment interest in the aggregate amount of $1.2 million and directed the payment of royalties by us for any infringing sales after February 24, 2016 at a royalty rate to be determined. As a result, we accrued $7.2 million in the fourth quarter of fiscal 2017. We filed motions with the court seeking judgment as a matter of law and for a new trial which the court then denied on November 14, 2017. We have filed an appeal in the Court of Appeals for the Federal Circuit which is pending at this time. We also initiated proceedings filed in the U.S. Patent and Trademark Office seeking to invalidate a number of Omega’s patents involved in the litigation. Those proceedings remain pending at this time. We continue to believe that our products do not infringe on any of Omega’s patents. During first quarter in fiscal 2018, we increased our reserve by approximately $6.1 million in relation to this legal matter. As of February 28, 2018, the aggregate accrual for this matter was approximately $17.6 million, which represents our best estimate at this time. While it is not feasible to predict with certainty the outcome of this litigation, its ultimate resolution could be material to our cash flows and results of operations. EVE battery claim On October 27, 2014, LoJack and LoJack Equipment Ireland DAC (“LJEI”), a wholly-owned subsidiary of LoJack, commenced arbitration proceedings against EVE Energy Co., Ltd. (“EVE”) by filing a notice of arbitration with a tribunal (the “Tribunal”) before the Hong Kong International Arbitration Centre (the “HKIAC”). LoJack and LJEI alleged that EVE breached representations and warranties made in supply agreements relating to the quality and performance of battery packs supplied by EVE. On June 2, 2017, we were notified that the Tribunal rendered a decision and awarded damages to us (the “Damage Award”) for EVE’s breach of contract. On June 9, 2017, we entered into a settlement agreement with EVE and its controlling shareholder EVE Holdings Limited to resolve the Damage Award by having EVE Holdings Limited, the parent company of EVE, make payments to us in the aggregate amount of approximately $46 million, which amount is net of attorneys’ fees and insurance subrogation payment (the “Settlement”). As of February 28, 2018, we had received approximately $28 million of the expected $46 million net amount, of which approximately $15 million was received in June 2017 and $13 million was received in November 2017. The Settlement amounts are reported as other non-operating income in our consolidated statement of comprehensive income for the fiscal year ended February 28, 2018. Pursuant to the Settlement, we received an installment payment of $13.3 million in April 2018 and are due to receive an additional installment payment of approximately $5 million in June 2018. Tracker South Africa claim On December 9, 2016, Tracker Connect (Pty) LTD (“Tracker”), an international licensee of LoJack located in South Africa, commenced arbitration proceedings against LoJack Ireland by filing a notice of arbitration with the International Centre for Dispute Resolution. The filing alleges breaches of the license agreement as well as misrepresentations and violation of Massachusetts General Laws chapter 93A. Tracker seeks various relief, including monetary damages and recovery of attorneys’ fees. On March 3, 2017, LoJack Ireland filed its response to Tracker’s notice, denying their allegations and filing counterclaims against Tracker for material breaches of the parties’ license agreement and bad faith conduct. The arbitral tribunal was selected and the arbitration was conducted in March 2018 with closing arguments set for June 25, 2018. While it is not feasible to predict with certainty the outcome of this litigation, its ultimate resolution could be material to our cash flows and results of operations. In addition to the foregoing matters, from time to time as a normal consequence of doing business, various claims and litigation may be asserted or commenced against us. In particular, we may receive claims concerning contract performance or claims that our products or services infringe the intellectual property of third parties which are in the ordinary course of business. While the outcome of any such claims or litigation cannot be predicted with certainty, management does not believe that the outcome of such matters existing at the present time would have a material adverse effect on our consolidated results of operations, financial condition and cash flows. |
SEGMENT AND GEOGRAPHIC DATA
SEGMENT AND GEOGRAPHIC DATA | 12 Months Ended |
Feb. 28, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC DATA | NOTE 19 – SEGMENT AND GEOGRAPHIC DATA Historically, our business activities were organized into two reportable segments – Wireless DataCom and Satellite. Effective August 31, 2016, we ceased operations of the Satellite business and reported thereafter through the first quarter of fiscal 2018 under one reportable segment: Wireless DataCom. In the quarter ended August 31, 2017, we realigned our operations and now operate under two reportable segments: Telematics Systems and Software & Subscription Services. Our organizational structure is based on a number of factors that our CEO, the Chief Operating Decision Maker (“CODM”), uses to evaluate and operate the business, which include customer base, homogeneity of products, and technology. We have recast prior period amounts to conform to the way we internally manage and monitor segment performance. The Telematics Systems segment offers a portfolio of wireless data communications products which includes asset tracking units, mobile telematics devices, fixed and mobile wireless gateways and routers. These wireless networking devices underpin a wide range of our own and third party software and service solutions worldwide and are critical for applications demanding secure, reliable and business-critical communications. The Software & Subscription Services segment offers cloud-based, application enablement and telematics service platforms that facilitate integration of our own applications, as well as those of third parties, through open Applications Programing Interfaces (“APIs”) to deliver full-featured IoT solutions to a wide range of customers and markets. Our scalable proprietary SaaS offerings enable rapid and cost-effective deployment of high-value solutions for customers all around the globe. Information by business segment is as follows (in thousands): Year ended February 28, 2018 Operating Segments Telematics Systems Software & Subscription Services Corporate Expenses Total Revenues $ 302,126 $ 63,786 $ - $ 365,912 Adjusted EBITDA $ 48,943 $ 8,233 $ (4,794 ) $ 52,382 Year ended February 28, 2017 Operating Segments Telematics Systems Software & Subscription Services Satellite Corporate Expenses Total Revenues $ 274,314 $ 61,719 $ 15,069 $ - $ 351,102 Adjusted EBITDA $ 47,432 $ 3,075 $ 2,447 $ (3,586 ) $ 49,368 Year ended February 28, 2016 Operating Segments Telematics Systems Software & Subscription Services Satellite Corporate Expenses Total Revenues $ 205,209 $ 36,178 $ 39,332 $ - $ 280,719 Adjusted EBITDA $ 34,051 $ 9,677 $ 8,573 $ (3,294 ) $ 49,007 Operating Segments Telematics Systems Software & Subscription Services Satellite Total Goodwill As of February 28, 2018 $ 50,899 $ 22,081 $ - $ 72,980 As of February 28, 2017 $ 50,899 $ 22,081 $ - $ 72,980 The amount shown for each period in the “Corporate Expenses” column above consists of expenses that are not allocated to the business segments. These nonallocated corporate expenses include salaries and benefits of certain corporate staff and expenses such as audit fees, investor relations, stock listing fees, director and officer liability insurance, and director fees and expenses. Our CODM evaluates each segment based on Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), and we therefore consider Adjusted EBITDA to be a primary measure of operating performance of our operating segments. We define Adjusted EBITDA as earnings before investment income, interest expense, taxes, depreciation, amortization and stock-based compensation and other adjustments as identified below. The adjustments to our financial results prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) to calculate Adjusted EBITDA are itemized below (in thousands): Year Ended February 28, 2018 2017 2016 Net income (loss) $ 16,617 $ (7,904 ) $ 16,940 Investment income (2,256 ) (1,691 ) (1,871 ) Interest expense 10,280 9,896 7,595 Income tax provision (benefits) 10,681 (1,563 ) 4,572 Depreciation 7,968 8,408 3,582 Amortization of intangible assets 14,989 15,061 6,626 Stock-based compensation 9,298 7,833 5,854 Equity in net loss of affiliate 1,411 1,284 829 Acquisition and integration expenses - 4,513 1,980 Non-cash adjustment to inventory and fixed asset 335 4,339 - Legal expenses for LoJack battery performance issue 3,323 1,948 - Litigation provision 7,415 7,244 2,900 Gain on LoJack battery performance legal Settlement (28,333 ) - - Other 654 - - Adjusted EBITDA $ 52,382 $ 49,368 $ 49,007 It is not practicable for us to report identifiable assets by segment because these businesses share resources, functions and facilities. We do not have significant long-lived assets outside the United States. Revenue by geographic area are as follows (in thousands): Year Ended February 28, 2018 2017 2016 United States $ 265,613 $ 259,974 $ 232,995 Europe, Middle East and Africa 45,830 49,918 19,178 South America 20,699 17,738 9,019 Canada 14,958 8,412 7,752 Asia and Pacific Rim 12,873 8,967 4,524 All other 5,939 6,093 7,251 $ 365,912 $ 351,102 $ 280,719 Revenues by geographic area are based upon the country of billing. The geographic location of distributors and OEM customers may be different from the geographic location of the ultimate end users of the products and services provided by us. No single non-U.S. country accounted for more than 10% of our revenue in fiscal years ended February 28, 2018, 2017 and 2016. |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended |
Feb. 28, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | NOTE 20 – QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The following summarizes certain quarterly statement of operations data for each of the quarters in fiscal years 2018 and 2017 (in thousands, except percentages and per share data). The operating results in any quarter are not necessarily indicative of the results that may be expected for any future period. We derived this data from the unaudited consolidated interim financial statements that, in our opinion, have been prepared on substantially the same basis as the audited financial statements contained elsewhere in this report and include all normal recurring adjustments necessary for a fair presentation of the financial information for the periods presented. These unaudited quarterly results should be read in conjunction with the financial statements and notes thereto included elsewhere in this report. Fiscal 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenues $ 88,081 $ 89,767 $ 93,669 $ 94,395 $ 365,912 Gross profit 37,443 36,838 38,187 38,422 150,890 Gross margin 42.5 % 41.0 % 40.8 % 40.7 % 41.2 % Net income (loss) (2,654 ) 12,232 11,806 (4,767 ) 16,617 Earnings (loss) per diluted share $ (0.08 ) $ 0.34 $ 0.33 $ (0.13 ) $ 0.46 Fiscal 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenues $ 91,147 $ 90,479 $ 83,350 $ 86,126 $ 351,102 Gross profit 34,834 37,614 35,117 35,787 143,352 Gross margin 38.2 % 41.6 % 42.1 % 41.6 % 40.8 % Net income (loss) (2,659 ) 521 (1,527 ) (4,239 ) (7,904 ) Earnings (loss) per diluted share $ (0.07 ) $ 0.01 $ (0.04 ) $ (0.12 ) $ (0.22 ) The net loss in the fiscal 2018 first quarter and fiscal 2017 fourth quarter included a litigation provision of $6.1 million and $7.2 million, respectively. The net income in the fiscal 2018 second quarter and third quarter included a gain from legal settlement of $15.0 million and $13.3 million, respectively. All of these events were described in Note 18 – Legal Proceedings. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Feb. 28, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 21 – SUBSEQUENT EVENT On May 7, 2018, we announced that our Board of Directors has authorized a share repurchase program, under which we may repurchase up to $30 million of our outstanding common stock over the next 12 months. Under the stock repurchase program, we may repurchase shares in the open-market in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The extent to which we repurchase our shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations, as determined by our management team. The repurchase program may be suspended or discontinued at any time. We expect to finance the purchase with existing cash balances. |
DESCRIPTION OF BUSINESS AND S28
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Feb. 28, 2018 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business CalAmp Corp. (referred to herein as “CalAmp”, “the Company”, “we”, “our”, or “us”) is a telematics pioneer leading transformation in a global connected economy. We help reinvent businesses and improve lives around the globe with technology solutions that streamline complex Internet of Things (“IoT”) deployments through wireless connectivity solutions and derived data intelligence. Our software applications, scalable cloud services, and intelligent devices collect and assess business-critical data anywhere in the world from industrial machines, commercial and passenger vehicles, their passengers and contents. We are a global organization that is headquartered in Irvine, California. Historically, our business activities were organized into two reportable segments – Wireless DataCom and Satellite. Our products in the Satellite business were sold to one principal customer – EchoStar, an affiliate of Dish Network. In April 2016, EchoStar notified us that it would terminate its supply arrangement with us due to consolidation of its supplier base. Effective August 31, 2016, we ceased operations of the Satellite business and through the first quarter of fiscal 2018 operated under one reportable segment: Wireless DataCom. In the quarter ended August 31, 2017, in order to streamline our operations, global sales organization and product line development resources, we realigned our operations and we now operate under two reportable segments: Telematics Systems and Software & Subscription Services. In March 2016, we acquired all of the outstanding common stock of LoJack Corporation (“LoJack”), a global leader in products and services for tracking and recovering stolen cars, trucks and other valuable mobile assets. LoJack provides us with access to a U.S. auto dealer channel as well as an established international licensee network. See Note 2 for a description of this acquisition. |
Principles of Consolidation | Principles of Consolidation Our consolidated financial statements include the accounts of CalAmp Corp. (a Delaware corporation) and all of our wholly-owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the allowance for doubtful accounts; estimate for the lower of cost or market for excess and obsolete inventory; product warranties; deferred income tax asset valuation allowances; intangible assets and other long-lived assets; intellectual property and accrued royalties; stock-based compensation; other contingencies and revenue recognition. The current economic environment, and supplier and customer concentrations also increase the degree of uncertainty inherent in these estimates and assumptions. |
Fiscal Year | Fiscal Year Our fiscal year ends on the last day in February of each year. In these consolidated financial statements, the fiscal year end for all years is shown as February 28 for clarity of presentation. The actual period end date for fiscal 2016 was February 29, 2016. |
Revenue Recognition | Revenue Recognition We recognize revenue from product sales when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collection of the sales price is reasonably assured. For product sales that are not bundled with an application service or for which we have no continuing service obligations, the revenue recognition criteria are generally met at the time product is shipped or installed. For product shipments made on the basis of “FOB Destination” terms, revenue is recorded when the shipment reaches the customer. Customers generally do not have a right of return except for defective products returned during the warranty period. We record estimated commitments related to customer incentive programs as reductions of revenues. In addition to product sales, we provide Software-as-a-Service (“SaaS”) and Platform-as-a-Service (“PaaS”) subscriptions for our fleet management, vehicle finance and certain other verticals through which customers are provided with the ability to wirelessly communicate with monitoring devices installed in vehicles and other mobile or remote assets via software applications hosted by us. We also enter into arrangements which combine various hardware devices as well as installation and notification services that are provided over a stipulated service period. These arrangements represent multiple element arrangements under ASC 605 Subtopic 25 entitled Revenue Recognition: Multiple-Element Arrangements In the United States, we also sell certain LoJack Stolen Vehicle Recovery (”SVR”) products with early warning products and services in transactions which constitute a multiple element arrangement under ASC 605. The combined product and service arrangement includes hardware devices, installation services and an ongoing early warning automated notification service, which is provided over the period of vehicle ownership. In the transactions, the product hardware and installation service components of each sale are considered to have met the delivery requirements and have standalone value to provide for revenue recognition upon installation; however, revenues from the ongoing notification service are deferred and recognized over an estimated life of new vehicle ownership. Revenues for the early warning notification services and extended product warranties are presented combined within Products revenues in our statement of comprehensive income (loss). In Italy, we generally sell the combined LoJack SVR product in connection with an initial vehicle monitoring service contract which we generally require at the time the consumer purchases the product. Revenue for the service arrangement is recognized over the life of the contract or subscription service period. These contracts are offered with terms ranging from 8 to 96 months and are generally payable in full upon activation of the related SVR unit or renewal of the previous contract. The product revenues for these customer arrangements are presented combined within Application subscriptions and other services in our statement of comprehensive income (loss) as the products and services are customarily part of one customer contractual arrangement. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with maturities at date of purchase of three months or less to be cash equivalents. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable debt securities and trade accounts receivables. Cash and cash equivalents as well as investments are maintained with several financial institutions. Deposits held with banks may exceed the federally insured limits. These deposits are maintained with reputable financial institutions and are redeemable upon demand. We have not experienced any losses in such accounts. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consists of amounts due to us from sales arrangements executed in our normal business activities and are recorded at invoiced amounts. We present the aggregate accounts receivable balance net of an allowance for doubtful accounts. We mitigate a portion of our receivables credit risk through credit insurance. Generally, collateral and other security is not obtained for outstanding accounts receivable. Credit losses, if any, are recognized based on management’s evaluation of historical collection experience, customer-specific financial conditions as well as an evaluation of current industry trends and general economic conditions. Past due balances are assessed by management on a monthly basis and balances are written off when the customer’s financial condition no longer warrants pursuit of collection. Although we expect to collect amounts due, actual collections may differ from estimated amounts. |
Inventories | Inventories Inventories are stated at the lower of cost (using the first-in, first-out method) or market (net realizable value). Inventories are reviewed for excess quantities and obsolescence based upon demand forecasts for a specific time horizon. We record a charge to cost of revenues for the amount required to reduce the carrying value of inventory to estimated net realizable value. |
Property and Equipment | Property and equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the respective estimated useful lives of the assets ranging from two to seven years. Leasehold improvements are amortized using the straight-line method over the lesser of the lease term or the estimated useful life of the assets. Maintenance and repairs are expensed as incurred. We capitalize certain costs incurred in connection with developing or obtaining internal-use software and software embedded in our products. These costs are recorded as property and equipment in our consolidated balance sheets and are amortized over useful lives ranging from three to seven years. |
Business Combinations | Business Combinations The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair value at the date of acquisition. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and labilities assumed, such excess is allocated to goodwill. We determine the estimated fair values after review and consideration of relevant information, including discounted cash flows, quoted market prices and other estimates made by management. We may refine the preliminary purchase price allocation, as necessary, during the measurement period of up to one year after the acquisition closing date as we obtain more information as to facts and circumstances existing at the acquisition date impacting the asset valuations and liabilities assumed. Goodwill acquired in business combinations is assigned to the reporting unit expected to benefit from the combination as of the acquisition date. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill is recorded as the difference between the aggregate consideration paid in a business combination and the fair value of the acquired net tangible and intangible assets. Goodwill is not amortized but rather tested for impairment on an annual or interim basis as deemed necessary. Our acquired identifiable intangible assets from business combinations consist principally of developed technology, customer lists, dealer relationships and tradenames. Our acquired intangible assets with definite lives are amortized from the date of acquisition over periods ranging from two to ten years using a method that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used or, if that pattern cannot be reliability determined, using a straight-line amortization method. |
Impairment of Goodwill and Other Long-Lived Assets | Impairment of Goodwill and Other Long-Lived Assets We evaluate goodwill for impairment on an annual basis in the fourth quarter, or on an interim basis, if we believe indicators of impairment exist. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we conduct a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair value of the reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, we perform the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the reporting unit’s goodwill with the carrying value of the goodwill. The amount by which the carrying value of the goodwill exceeds its implied fair value will be recognized as an impairment loss. In fiscal 2017, we performed a qualitative assessment and concluded that the fair value of our reporting unit is more than its carrying amount. In fiscal 2018, we conducted a quantitative goodwill impairment test and did not identify an impairment indicator as part of our quantitative step 1 analysis. Long-lived assets to be held and used, including identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If the assets are impaired, the impairment recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for similar investment of like risk. |
Fair Value Measurements | Fair Value Measurements Our cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short term maturities of these items. Our marketable securities are measured at fair value on a recurring basis. The framework for measuring fair value and related disclosure requirements about fair value measurements are provided in ASC 820, Fair Value Measurements Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. In certain cases, costs are incurred to purchase materials and equipment for future use in research and development efforts. In such cases, these costs are capitalized and expensed as consumed. |
Product Warranty | Product Warranty All products have a one- or two-year limited warranty against manufacturing defects and workmanship. We estimate the future costs relating to product returns subject to our warranty and record a reserve upon shipment of our products. We periodically adjust our estimates for actual warranty claims, historical claims experience as well as the impact of known product operational issues. |
Patent Litigation and Other Contingencies | Patent Litigation and Other Contingencies We accrue for patent litigation and other contingencies whenever we determine that an unfavorable outcome is probable and a liability is reasonably estimable. The amount of the accrual is estimated based a review of each claim, including the type and facts of the claim and our assessment of the merits of the claim. These accruals are reviewed at least on a quarterly basis and are adjusted to reflect the impact of recent negotiations, settlements, court rulings, advice from legal counsel and other events pertaining to the case. Such accruals, if any, are recorded as general and administrative expense in our consolidated statements of comprehensive income (loss). Although we take considerable measures to mitigate our exposure in these matters, litigation is unpredictable; however, we believe that we have valid defenses with respect to pending legal matters against us as well as adequate provisions for probable and estimable losses. |
Income Taxes | Income Taxes We use the asset and liability method when accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for future tax consequences attributable to difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Changes in recognition or measurement are reflected in the period in which the change in judgement occurs. Valuation allowances are provided against tax assets when it is determined that it is more likely than not that the assets will not be realized. In assessing valuation allowances, we review historical and future expected operating results and other factors, including cumulative earnings experience, expectations of future taxable income by jurisdiction and the carryforward periods available for reporting purposes. |
Foreign Currency Translation | Foreign Currency Translation We translate the assets and liabilities of our non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation included in Accumulated Other Comprehensive Income (Loss) during the period. The aggregate foreign currency transaction exchange rate losses included in determining income (loss) before income taxes were $0.5 million, $0.1 million $27.0 thousand in fiscal years 2018, 2017 and 2016, respectively. |
Stock-Based Compensation | Stock-Based Compensation Our stock-based compensation expense resulting from grants of employee stock options, restricted stock and restricted stock units is recognized in the consolidated financial statements based on the respective grant date fair values of the awards. We generally estimate stock option grant date fair value using the Black-Scholes-Merton option pricing model and recognize the expense over a requisite service (vesting) period using the straight-line method. The measurement of stock-based compensation is based on several criteria such as the type of equity award, the valuation model used and associated input factors including the expected term of the award, stock price volatility, risk free interest rate and forfeiture rate. Certain of these inputs are subjective and are determined based in part on management's judgment. |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Other comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss) (“OCI”). OCI refers to revenue, expenses and gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity and excluded from net income (loss). Our OCI consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency and unrealized gains and losses on marketable equity securities classified as available-for-sale. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2016-09 , Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09 xcess tax benefits recognized on stock-based compensation expense are classified as an operating activity in our consolidated statements of cash flows. Upon adoption of this standard, we also elected to account for forfeitures as they occur, rather than estimating expected forfeitures over the course of a vesting period. In May 2017, the FASB issued Accounting Standards Update 2017-09, Compensation – Stock Compensation: Scope of Modification Accounting Compensation – Stock Compensation In January 2017, the FASB issued Accounting Standards Update 2017-04, Simplifying the Test for Goodwill Impairment After the adoption of this standard on a prospective basis, we will follow a one-step model for goodwill impairment In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases In January 2016, the FASB issued Accounting Standards Update 2016-01, In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers We plan to adopt this standard using the modified retrospective method with an immaterial adjustment to accumulative deficit for the cumulative effect of adoption. Our assessment process has consisted of reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to our revenue contracts. We have reviewed individual customer contracts and purchase orders related to these revenues streams as well as identified appropriate changes to our business processes, systems and controls to support the revenue recognition and disclosure requirements under the new standard. We believe that the new standard and related revenue recognition policies will not result in a material change to our consolidated financial statements, but will require additional disclosures in our financial statements as to the nature, amount and timing of revenue and cash flows arising from contracts with customers. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Business Combinations [Abstract] | |
Summary of Purchase Price Allocation | The following is the final purchase price allocation (in thousands): Purchase price $ 131,735 Less cash acquired, net of debt assumed (9,303 ) Net cash paid 122,432 Fair value of net assets acquired: Current assets other than cash $ 41,214 Property and equipment 11,910 Developed technology 8,200 Tradename 35,500 Customer lists 4,650 Dealer relationships 16,850 Other non-current assets 4,208 Deferred tax liability (5,466 ) Current liabilities (37,647 ) Deferred revenue, non-current (10,883 ) Other non-current liabilities (2,576 ) Total fair value of net assets acquired 65,960 Goodwill $ 56,472 |
Summary of Pro Forma Information | The following is unaudited pro forma consolidated financial information presented as if the acquisition had occurred on March 1, 2015 (in thousands except per share amounts): Pro Forma Year Ended February 28, 2017 2016 Revenues $ 356,357 $ 408,464 Net income $ 1,132 $ 5,069 Earnings per share: Basic $ 0.03 $ 0.14 Diluted $ 0.03 $ 0.14 Shares used in computing earnings per share: Basic 35,917 36,448 Diluted 36,397 36,950 |
CONCENTRATION OF CUSTOMERS AN30
CONCENTRATION OF CUSTOMERS AND SUPPLIERS (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Risks And Uncertainties [Abstract] | |
Schedule of Significant Customers and Significant Suppliers Concentration Risk Percentage | Some of these customers accounted for more than 10% of our revenue or accounts receivable as follows: Year Ended February 28, 2018 2017 2016 Net sales: Customer A 12.4 % 8.1 % 9.5 % Customer C - 4.3 % 13.9 % Year Ended February 28, 2018 2017 2016 Accounts receivable: Customer A 14.9 % 11.7 % 14.5 % Customer B 13.0 % 4.8 % 2.3 % Some of these manufacturers accounted for more than 10% of our purchases and accounts payable as follows: Year Ended February 28, 2018 2017 2016 Inventory purchases: Supplier A 32.6 % 34.4 % 55.6 % Supplier B 15.8 % 13.8 % 16.4 % Supplier C 9.2 % 11.4 % - Year Ended February 28, 2018 2017 2016 Accounts Payable: Supplier A 40.5 % 33.2 % 56.7 % Supplier B 16.2 % 17.5 % 14.9 % |
CASH, CASH EQUIVALENTS AND IN31
CASH, CASH EQUIVALENTS AND INVESTMENTS (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Cash And Cash Equivalents [Abstract] | |
Schedule of Cash and Marketable Securities | The following tables summarize our financial instrument assets (in thousands): As of February 28, 2018 Balance Sheet Classification of Fair Value Unrealized Cash and Short-Term Adjusted Gains Fair Cash Marketable Other Cost (Losses) Value Equivalents Securities Assets Cash $ 51,529 $ - $ 51,529 $ 51,529 $ - $ - Level 1: Money market funds 9,034 - 9,034 9,034 - - Mutual funds (1) 4,920 721 5,641 - - 5,641 International equities 2,175 643 2,818 - 2,509 309 Level 2: Repurchase agreements 57,500 - 57,500 57,500 - - Corporate bonds 35,444 (13 ) 35,431 14,540 20,891 - Total $ 160,602 $ 1,351 $ 161,953 $ 132,603 $ 23,400 $ 5,950 As of February 28, 2017 Balance Sheet Classification of Fair Value Unrealized Cash and Short-Term Adjusted Gains Fair Cash Marketable Other Cost (Losses) Value Equivalents Securities Assets Cash $ 39,322 $ - $ 39,322 $ 39,322 $ - $ - Level 1: Money market funds 3,406 - 3,406 3,406 - - Mutual funds (1) 5,429 372 5,801 - - 5,801 International equities 296 (54 ) 242 - - 242 Level 2: Repurchase agreements 24,000 - 24,000 24,000 - - Corporate bonds 33,708 (8 ) 33,700 26,978 6,722 - Total $ 106,161 $ 310 $ 106,471 $ 93,706 $ 6,722 $ 6,043 (1) Amounts represent various equities, bond and money market mutual funds held in a “Rabbi Trust” and are restricted for payment obligations to non-qualified deferred compensation plan participants. See Note 9 for discussion of deferred compensation plan. |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consist of the following (in thousands): February 28, 2018 2017 Accounts receivable $ 72,766 $ 68,365 Allowance for doubtful accounts (1,186 ) (962 ) $ 71,580 $ 67,403 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following (in thousands): February 28, 2018 2017 Raw materials $ 18,629 $ 15,822 Work in process 567 294 Finished goods 17,106 13,163 $ 36,302 $ 29,279 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following (in thousands): February 28, 2018 2017 Leasehold improvements $ 3,157 $ 3,484 LoJack system components and law enforcement tracking units 20,558 22,412 Plant equipment and tooling 16,842 20,420 Office equipment, computers and furniture 14,206 14,123 Software 31,427 28,225 86,190 88,664 Less accumulated depreciation and amortization (69,585 ) (70,388 ) 16,605 18,276 Fixed assets not yet in service 4,657 2,886 $ 21,262 $ 21,162 |
GOODWILL AND OTHER INTANGIBLE35
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in goodwill are as follows (in thousands): Year Ended February 28, 2018 2017 Balance at beginning of period $ 72,980 $ 16,508 Acquisition of LoJack - 56,472 Balance at end of period $ 72,980 $ 72,980 |
Schedule of Other Intangible Assets | Other intangible assets are comprised as follows (in thousands): Gross Accumulated Amortization Net Amortization Feb. 28, Feb. 28, Feb. 28, Feb. 28, Feb. 28, Feb. 28, Period 2017 Additions 2018 2017 Expense 2018 2018 2017 Supply contract 5 years $ 2,220 $ - $ 2,220 $ 2,112 $ 108 $ 2,220 $ - $ 108 Developed technology 2-7 years 22,280 - 22,280 10,323 3,965 14,288 7,992 11,957 Tradenames 7-10 years 37,643 86 37,729 5,226 3,861 9,087 28,642 32,417 Customer lists 4-7 years 22,950 - 22,950 15,018 4,605 19,623 3,327 7,932 Dealer relationships 7 years 16,850 - 16,850 2,308 2,406 4,714 12,136 14,542 Covenants not to compete 5 years 170 - 170 162 8 170 - 8 Patents 5 years 347 136 483 88 36 124 359 259 $ 102,460 $ 222 $ 102,682 $ 35,237 $ 14,989 $ 50,226 $ 52,456 $ 67,223 |
Schedule of Future Amortization Expense | Estimated future amortization expense as of February 28, 2018 is as follows (in thousands): 2019 $ 11,700 2020 9,693 2021 7,870 2022 6,236 2023 6,016 Thereafter 10,941 $ 52,456 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Other Assets Noncurrent Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consist of the following (in thousands): February 28, 2018 2017 Deferred compensation plan assets $ 5,641 $ 5,801 Investment in international licensees 2,349 2,282 Equity investment in and loan to ThinxNet GmbH 2,674 - Equity investment in and loan to Smart Driver Club 3,814 2,402 Other 4,351 2,080 $ 18,829 $ 12,565 |
FINANCING ARRANGEMENTS (Tables)
FINANCING ARRANGEMENTS (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Balances Attributable to the Notes | Balances attributable to the Notes consist of the following (in thousands): February 28, 2018 2017 Principal $ 172,500 $ 172,500 Less: Unamortized debt discount (16,143 ) (22,770 ) Unamortized debt issuance costs (2,058 ) (2,903 ) Net carrying amount of the Notes $ 154,299 $ 146,827 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Taxes | Our income (loss) before income taxes and equity in net loss of affiliate consists of the following (in thousands): Year Ended February 28, 2018 2017 2016 Domestic $ 13,898 $ (11,910 ) $ 22,461 Foreign 14,811 3,727 (120 ) Total income (loss) before income taxes and equity in net loss of affiliate $ 28,709 $ (8,183 ) $ 22,341 |
Components of Income Tax Benefit (Provision) | The components of income tax benefit (provision) consists of the following (in thousands): Year Ended February 28, 2018 2017 2016 Current: Federal $ (412 ) $ - $ (182 ) State (694 ) (137 ) (208 ) Foreign (2,204 ) (1,035 ) (60 ) Total current (3,310 ) (1,172 ) (450 ) Deferred: Federal (6,156 ) 1,712 (4,331 ) State (1,458 ) 539 209 Foreign 243 484 - Total deferred (7,371 ) 2,735 (4,122 ) Income tax benefit (provision) $ (10,681 ) $ 1,563 $ (4,572 ) |
Reconciliation of Effective Income Tax Benefit (Provision) | The income tax benefit (provision) differs from the amount obtained by applying the statutory rate as follows (in thousands): Year Ended February 28, 2018 2017 2016 Income tax benefit (provision) at U.S. statutory federal rate $ (9,400 ) $ 2,864 $ (7,819 ) State income tax provision, net of federal income tax effect (574 ) 182 (833 ) Foreign taxes 2,923 68 (102 ) Impact of tax reform (8,955 ) - - Valuation allowance reductions (increases) 3,046 (1,391 ) 2,541 Research and development tax credits 1,034 806 1,008 Other, net 1,245 (966 ) 633 Total income tax benefit (provision) $ (10,681 ) $ 1,563 $ (4,572 ) |
Schedule of Net Deferred Tax Income Assets | The components of net deferred income tax assets for U.S. income tax purposes are as follows (in thousands): February 28, 2018 2017 Net operating loss carryforwards $ 10,343 $ 23,751 Depreciation, amortization and impairments (11,325 ) (21,959 ) Research and development credits 14,404 12,307 Stock-based compensation 2,376 2,855 Other tax credits 2,015 3,650 Inventory reserve 292 903 Warranty reserve 429 670 Payroll and employee benefit accruals 1,941 3,012 Allowance for doubtful accounts 354 961 Other accrued liabilities 8,794 6,738 Other, net 3,710 1,203 Gross deferred tax assets 33,333 34,091 Valuation allowance (1,752 ) (6,587 ) Net deferred tax assets $ 31,581 $ 27,504 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Equity [Abstract] | |
Summary of Stock Option Activity | The following table summarizes our stock option activity (number of options and aggregate intrinsic value in thousands): Number of Options Weighted Average Exercise Price Weighted average remaining contractual life (years) Aggregate intrinsic value Outstanding at February 28, 2015 1,007 $ 5.80 4.6 Granted 82 17.54 Exercised (228 ) 5.62 Forfeited or expired (1 ) 1.80 Outstanding at February 28, 2016 860 6.96 4.7 Granted 227 14.49 Exercised (125 ) 7.67 Forfeited or expired (7 ) 15.70 Outstanding at February 28, 2017 955 $ 8.60 5.5 Granted 165 19.31 Exercised (140 ) 2.36 Forfeited or expired - - Outstanding at February 28, 2018 980 $ 11.29 5.9 $ 11,866 Exercisable at February 28, 2016 688 $ 4.66 4.7 $ 9,374 Exercisable at February 28, 2017 624 $ 5.03 5.5 $ 7,046 Exercisable at February 28, 2018 590 $ 7.54 4.1 $ 9,349 Year ended February 28, 2018 2017 2016 Weighted average grant date fair value of stock options granted during the year $ 10.20 $ 6.69 $ 9.39 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | We use the Black-Scholes-Merton option pricing model for valuation of stock option awards. Calculating the fair value of stock option awards requires the input of highly complex and subjective assumptions. Other reasonable assumptions could provide differing results. The fair value of stock options at the grant date was determined using the following assumptions: Year Ended February 28, Black-Scholes Valuation Assumptions 2018 2017 2016 Expected life (years) 6 6 6 Expected volatility 46% 48% 56% Risk-free interest rates 2.0% 1.3% 1.8% Expected dividend yield 0% 0% 0% |
Summary of Restricted Stock Shares, Performance Stock Units (PSU's) and RSUs Activity | Changes in our outstanding restricted stock shares, PSUs and RSUs at February 28, 2018, 2017 and 2016 were as follows (shares in thousands): Number of Restricted Shares, PSUs and RSUs Weighted Average Grant Date Fair Value Shares Retained to Cover Statutory Minimum Withholding Taxes Outstanding at February 28, 2015 886 $ 12.90 Granted 517 17.75 Vested (407 ) 9.97 147 Forfeited (43 ) 15.55 Outstanding at February 28, 2016 953 16.66 Granted 766 14.63 Vested (382 ) 15.18 122 Forfeited (98 ) 15.64 Outstanding at February 28, 2017 1,239 $ 15.94 Granted 770 19.55 Vested (399 ) 15.92 133 Forfeited (176 ) 17.34 Outstanding at February 28, 2018 1,434 $ 17.72 |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense is included in the following captions of the consolidated statements of comprehensive income (loss) (in thousands): Year Ended February 28, 2018 2017 2016 Cost of revenues $ 653 $ 374 $ 229 Research and development 1,471 1,033 781 Selling and marketing 2,314 1,655 1,208 General and administrative 4,860 4,771 3,636 $ 9,298 $ 7,833 $ 5,854 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per share amounts): Year Ended February 28, 2018 2017 2016 Net income (loss) $ 16,617 $ (7,904 ) $ 16,940 Basic weighted average number of common shares outstanding 35,250 35,917 36,448 Effect of stock options and restricted stock units computed on treasury stock method 889 - 502 Diluted weighted average number of common shares outstanding 36,139 35,917 36,950 Earnings (loss) per share: Basic $ 0.47 $ (0.22 ) $ 0.46 Diluted $ 0.46 $ (0.22 ) $ 0.46 |
COMPREHENSIVE INCOME (LOSS) (Ta
COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Loss | The following table shows the changes in our accumulated other comprehensive income (loss) for the fiscal years ended February 28, 2018, 2017 and 2016 (in thousands): Cumulative Foreign Currency Translation Unrealized Gains/Losses on Marketable Securities Total Balances at February 29, 2015 $ (65 ) $ - $ (65 ) Other comprehensive loss, net of tax (161 ) - (161 ) Balances at February 29, 2016 (226 ) - (226 ) Other comprehensive loss, net of tax (280 ) (35 ) (315 ) Balances at February 29, 2017 (506 ) (35 ) (541 ) Other comprehensive income (loss), net of tax (122 ) 464 342 Balances at February 28, 2018 $ (628 ) $ 429 $ (199 ) |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Other Financial Information [Abstract] | |
Supplemental Balance Sheet Disclosures | Other current liabilities consist of the following (in thousands): February 28, 2018 2017 Warranty reserves $ 5,734 $ 6,518 Litigation accrual 17,559 10,144 Other 8,395 8,296 $ 31,688 $ 24,958 Other non-current liabilities consist of the following (in thousands): February 28, 2018 2017 Deferred compensation plan liability $ 5,642 $ 5,825 Deferred revenue 16,763 12,257 Deferred rent 200 378 Other 1,644 1,769 $ 24,249 $ 20,229 |
Schedule of Interest Expense | Interest expense consists of the following (in thousands): Year Ended February 28, 2018 2017 2016 Interest expense on convertible senior unsecured notes: Stated interest at 1.625% per annum $ 2,806 $ 2,803 $ 2,268 Amortization of note discount 6,627 6,232 4,613 Amortization of debt issue costs 845 795 588 Total interest expense on convertible notes 10,278 9,830 7,469 Other interest expense 2 66 126 Total interest expense $ 10,280 $ 9,896 $ 7,595 |
Schedule of Supplemental Cash Payments for Interest and Income Taxes and Non-cash Investing and Financing Activities | “Net cash provided by operating activities” in the consolidated statements of cash flows includes cash payments for interest and income taxes. The following is our supplemental schedule of cash payments for interest and income taxes and non-cash investing and financing activities (in thousands): Year Ended February 28, 2018 2017 2016 Cash payments for interest and income taxes: Interest expense paid $ 2,844 $ 2,852 $ 1,512 Income tax paid $ 3,498 $ 2,259 $ 451 Non-cash investing and financing activities: Equity investment in and loan to ThinxNet GmbH (see Note 9) $ 2,674 $ - $ - |
Schedule of Valuation and Qualifying Accounts Disclosure | Following is our schedule of valuation and qualifying accounts for the last three years (in thousands): Balance at beginning of year Charged (credited) to costs and expenses Deductions Other (1) Balance at end of year Allowance for doubtful accounts: Fiscal 2016 673 170 (221 ) - 622 Fiscal 2017 622 541 (201 ) - 962 Fiscal 2018 962 685 (461 ) - 1,186 Warranty reserve: Fiscal 2016 1,819 1,015 (942 ) - 1,892 Fiscal 2017 1,892 1,305 (2,562 ) 5,883 6,518 Fiscal 2018 6,518 1,331 (2,115 ) - 5,734 Deferred tax assets valuation allowance: Fiscal 2016 4,159 - (2,541 ) - 1,618 Fiscal 2017 1,618 1,391 - 3,578 6,587 Fiscal 2018 6,587 - (4,835 ) - 1,752 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Future Payments of Operating Lease Commitments | Following is our summary of future payments of operating lease commitments (in thousands): 2019 $ 6,477 2020 4,689 2021 2,556 2022 1,683 2023 1,296 Thereafter 2,272 $ 18,973 |
SEGMENT AND GEOGRAPHIC DATA (Ta
SEGMENT AND GEOGRAPHIC DATA (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Information by business segment is as follows (in thousands): Year ended February 28, 2018 Operating Segments Telematics Systems Software & Subscription Services Corporate Expenses Total Revenues $ 302,126 $ 63,786 $ - $ 365,912 Adjusted EBITDA $ 48,943 $ 8,233 $ (4,794 ) $ 52,382 Year ended February 28, 2017 Operating Segments Telematics Systems Software & Subscription Services Satellite Corporate Expenses Total Revenues $ 274,314 $ 61,719 $ 15,069 $ - $ 351,102 Adjusted EBITDA $ 47,432 $ 3,075 $ 2,447 $ (3,586 ) $ 49,368 Year ended February 28, 2016 Operating Segments Telematics Systems Software & Subscription Services Satellite Corporate Expenses Total Revenues $ 205,209 $ 36,178 $ 39,332 $ - $ 280,719 Adjusted EBITDA $ 34,051 $ 9,677 $ 8,573 $ (3,294 ) $ 49,007 Operating Segments Telematics Systems Software & Subscription Services Satellite Total Goodwill As of February 28, 2018 $ 50,899 $ 22,081 $ - $ 72,980 As of February 28, 2017 $ 50,899 $ 22,081 $ - $ 72,980 |
Summary of Adjusted EBITDA | The adjustments to our financial results prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) to calculate Adjusted EBITDA are itemized below (in thousands): Year Ended February 28, 2018 2017 2016 Net income (loss) $ 16,617 $ (7,904 ) $ 16,940 Investment income (2,256 ) (1,691 ) (1,871 ) Interest expense 10,280 9,896 7,595 Income tax provision (benefits) 10,681 (1,563 ) 4,572 Depreciation 7,968 8,408 3,582 Amortization of intangible assets 14,989 15,061 6,626 Stock-based compensation 9,298 7,833 5,854 Equity in net loss of affiliate 1,411 1,284 829 Acquisition and integration expenses - 4,513 1,980 Non-cash adjustment to inventory and fixed asset 335 4,339 - Legal expenses for LoJack battery performance issue 3,323 1,948 - Litigation provision 7,415 7,244 2,900 Gain on LoJack battery performance legal Settlement (28,333 ) - - Other 654 - - Adjusted EBITDA $ 52,382 $ 49,368 $ 49,007 |
Summary of Revenues by Geographic Area | Revenue by geographic area are as follows (in thousands): Year Ended February 28, 2018 2017 2016 United States $ 265,613 $ 259,974 $ 232,995 Europe, Middle East and Africa 45,830 49,918 19,178 South America 20,699 17,738 9,019 Canada 14,958 8,412 7,752 Asia and Pacific Rim 12,873 8,967 4,524 All other 5,939 6,093 7,251 $ 365,912 $ 351,102 $ 280,719 |
QUARTERLY FINANCIAL INFORMATI45
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Fiscal 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenues $ 88,081 $ 89,767 $ 93,669 $ 94,395 $ 365,912 Gross profit 37,443 36,838 38,187 38,422 150,890 Gross margin 42.5 % 41.0 % 40.8 % 40.7 % 41.2 % Net income (loss) (2,654 ) 12,232 11,806 (4,767 ) 16,617 Earnings (loss) per diluted share $ (0.08 ) $ 0.34 $ 0.33 $ (0.13 ) $ 0.46 Fiscal 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenues $ 91,147 $ 90,479 $ 83,350 $ 86,126 $ 351,102 Gross profit 34,834 37,614 35,117 35,787 143,352 Gross margin 38.2 % 41.6 % 42.1 % 41.6 % 40.8 % Net income (loss) (2,659 ) 521 (1,527 ) (4,239 ) (7,904 ) Earnings (loss) per diluted share $ (0.07 ) $ 0.01 $ (0.04 ) $ (0.12 ) $ (0.22 ) |
DESCRIPTION OF BUSINESS AND S46
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | Aug. 30, 2016Segment | Aug. 31, 2017Segment | May 31, 2017Segment | Feb. 28, 2018USD ($) | Feb. 28, 2017USD ($)Segment | Feb. 29, 2016USD ($) |
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of reportable segments | Segment | 2 | 2 | 1 | 2 | ||
Foreign transaction exchange gains (losses) | $ (500,000) | $ (100,000) | $ (27,000) | |||
Adjustment of tax benefit from exercise of stock options activity | 11,700,000 | |||||
Tax benefits on vested and exercised equity awards | $ 937,000 | |||||
Minimum [Member] | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Deferred revenue minimum contractual subscription or service period | 1 year | |||||
Finite-Lived Intangible Asset, Useful Life | 2 years | |||||
Warranty Term | 1 year | |||||
Minimum [Member] | LoJack Product [Member] | Italy [Member] | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Service contract period | 8 months | |||||
Maximum [Member] | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Deferred revenue minimum contractual subscription or service period | 5 years | |||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||
Warranty Term | 2 years | |||||
Maximum [Member] | LoJack Product [Member] | Italy [Member] | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Service contract period | 96 months |
DESCRIPTION OF BUSINESS AND S47
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Useful Lives of Assets) (Details) | 12 Months Ended |
Feb. 28, 2017 | |
Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 years |
Minimum [Member] | Software Development [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Maximum [Member] | Software Development [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
ACQUISITIONS (Narrative) (Detai
ACQUISITIONS (Narrative) (Details) - USD ($) $ in Thousands | Mar. 15, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2016 |
Business Acquisition [Line Items] | |||||
Property, equipment and improvements, net | $ 21,262 | $ 21,162 | |||
Cost of revenue | 215,022 | 207,750 | $ 177,760 | ||
LoJack [Member] | |||||
Business Acquisition [Line Items] | |||||
Purchase price | $ 131,700 | ||||
Future earn-out payments | $ 5,500 | ||||
Shares issued for business acquisition | 850,100 | ||||
Net receivables | $ 21,200 | ||||
Gross receivables acquired | 22,300 | ||||
Amounts not expected to be collected | $ 1,100 | ||||
Revenues included in results of operations | 117,500 | ||||
LoJack [Member] | Fair Value Adjustment to Inventory [Member] | |||||
Business Acquisition [Line Items] | |||||
Fair value of inventories acquired | 4,500 | ||||
Inventory acquired | $ 4,300 | ||||
LoJack [Member] | Fair Value Adjustment to Property, Equipment and Improvements [Member] | |||||
Business Acquisition [Line Items] | |||||
Property, equipment and improvements, net | $ 2,500 | ||||
Cost of revenue | $ 700 |
ACQUISITIONS (Summary of Purcha
ACQUISITIONS (Summary of Purchase Price Allocation) (Details) - USD ($) | Mar. 15, 2016 | Feb. 29, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Apr. 17, 2015 |
Business Acquisition [Line Items] | |||||
Net cash paid | $ 1,500,000 | ||||
Fair value of net assets acquired: | |||||
Goodwill | $ 16,508,000 | $ 72,980,000 | $ 72,980,000 | ||
LoJack Corporation [Member] | |||||
Business Acquisition [Line Items] | |||||
Purchase price | $ 131,735,000 | ||||
Less cash acquired, net of debt assumed | (9,303,000) | ||||
Net cash paid | 122,432,000 | ||||
Fair value of net assets acquired: | |||||
Current assets other than cash | 41,214,000 | ||||
Property and equipment | 11,910,000 | ||||
Other non-current assets | 4,208,000 | ||||
Deferred tax liability | (5,466,000) | ||||
Current liabilities | (37,647,000) | ||||
Deferred revenue, non-current | (10,883,000) | ||||
Other non-current liabilities | (2,576,000) | ||||
Total fair value of net assets acquired | 65,960,000 | ||||
Goodwill | 56,472,000 | ||||
LoJack Corporation [Member] | Developed Technology [Member] | |||||
Fair value of net assets acquired: | |||||
Finite-lived intangible assets | 8,200,000 | ||||
LoJack Corporation [Member] | Trade Names [Member] | |||||
Fair value of net assets acquired: | |||||
Finite-lived intangible assets | 35,500,000 | ||||
LoJack Corporation [Member] | Customer Lists [Member] | |||||
Fair value of net assets acquired: | |||||
Finite-lived intangible assets | 4,650,000 | ||||
LoJack Corporation [Member] | Dealer Relationships [Member] | |||||
Fair value of net assets acquired: | |||||
Finite-lived intangible assets | $ 16,850,000 | ||||
CrashBoxx [Member] | |||||
Fair value of net assets acquired: | |||||
Goodwill | $ 930,000 | ||||
CrashBoxx [Member] | Developed Technology [Member] | |||||
Fair value of net assets acquired: | |||||
Finite-lived intangible assets | $ 1,025,000 |
ACQUISITION (Schedules of Pro F
ACQUISITION (Schedules of Pro Forma Information) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Mar. 14, 2016 | Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Dec. 31, 2015 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 |
Business Acquisition [Line Items] | |||||||||||||
Net income (loss) | $ (4,767) | $ 11,806 | $ 12,232 | $ (2,654) | $ (4,239) | $ (1,527) | $ 521 | $ (2,659) | $ 16,617 | $ (7,904) | $ 16,940 | ||
Income tax effects | $ 10,681 | (1,563) | 4,572 | ||||||||||
LoJack [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Revenues | 356,357 | 408,464 | |||||||||||
Net income | $ 1,132 | $ 5,069 | |||||||||||
Basic | $ 0.03 | $ 0.14 | |||||||||||
Diluted | $ 0.03 | $ 0.14 | |||||||||||
Basic | 35,917 | 36,448 | |||||||||||
Diluted | 36,397 | 36,950 | |||||||||||
Net income (loss) | $ 973 | $ 3,197 | |||||||||||
Increase (decrease) in revenue for fair valuation of deferred revenue | $ 1,807 | $ (1,807) | |||||||||||
Amortization of intangible assets and depreciation of property, equipment and improvements acquired | (309) | (7,402) | |||||||||||
Acquisition and integration expenses | 4,513 | (4,168) | |||||||||||
Net increase (decrease) in pretax income (loss) | 11,323 | (14,519) | |||||||||||
Income tax effects | (2,287) | 2,648 | |||||||||||
Change in net income (loss) | 9,036 | (11,871) | |||||||||||
LoJack [Member] | Fair Value Adjustment to Inventory [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Amortization of intangible assets and depreciation of property, equipment and improvements acquired | $ 4,339 | $ (4,339) |
CONCENTRATION OF CUSTOMERS AN51
CONCENTRATION OF CUSTOMERS AND SUPPLIERS - Schedule of Significant Customers and Significant Suppliers Concentration Risk Percentage (Details) | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2016 | |
Net Sales [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 12.40% | 8.10% | 9.50% |
Net Sales [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 4.30% | 13.90% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 14.90% | 11.70% | 14.50% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 13.00% | 4.80% | 2.30% |
Inventory Purchases [Member] | Supplier Concentration Risk [Member] | Supplier A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 32.60% | 34.40% | 55.60% |
Inventory Purchases [Member] | Supplier Concentration Risk [Member] | Supplier B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 15.80% | 13.80% | 16.40% |
Inventory Purchases [Member] | Supplier Concentration Risk [Member] | Supplier C | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 9.20% | 11.40% | |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 40.50% | 33.20% | 56.70% |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 16.20% | 17.50% | 14.90% |
CASH, CASH EQUIVALENTS AND IN52
CASH, CASH EQUIVALENTS AND INVESTMENTS (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Adjusted Cost | $ 160,602 | $ 106,161 | |
Unrealized Gains (Losses) | 1,351 | 310 | |
Fair Value | 161,953 | 106,471 | |
Cash and Cash Equivalents [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 132,603 | 93,706 | |
Short Term Marketable Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 23,400 | 6,722 | |
Other Assets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 5,950 | 6,043 | |
Cash [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Adjusted Cost | 51,529 | 39,322 | |
Fair Value | 51,529 | 39,322 | |
Cash [Member] | Cash and Cash Equivalents [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 51,529 | 39,322 | |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Adjusted Cost | 9,034 | 3,406 | |
Fair Value | 9,034 | 3,406 | |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 9,034 | 3,406 | |
Mutual Fund [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Adjusted Cost | [1] | 4,920 | 5,429 |
Unrealized Gains (Losses) | [1] | 721 | 372 |
Fair Value | [1] | 5,641 | 5,801 |
Mutual Fund [Member] | Fair Value, Inputs, Level 1 [Member] | Other Assets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | [1] | 5,641 | 5,801 |
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Adjusted Cost | 2,175 | 296 | |
Unrealized Gains (Losses) | 643 | (54) | |
Fair Value | 2,818 | 242 | |
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Short Term Marketable Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 2,509 | ||
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Other Assets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 309 | 242 | |
Repurchase Agreements [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Adjusted Cost | 57,500 | 24,000 | |
Fair Value | 57,500 | 24,000 | |
Repurchase Agreements [Member] | Fair Value, Inputs, Level 2 [Member] | Cash and Cash Equivalents [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 57,500 | 24,000 | |
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Adjusted Cost | 35,444 | 33,708 | |
Unrealized Gains (Losses) | (13) | (8) | |
Fair Value | 35,431 | 33,700 | |
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Cash and Cash Equivalents [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 14,540 | 26,978 | |
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Short Term Marketable Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | $ 20,891 | $ 6,722 | |
[1] | Amounts represent various equities, bond and money market mutual funds held in a “Rabbi Trust” and are restricted for payment obligations to non-qualified deferred compensation plan participants. See Note 9 for discussion of deferred compensation plan. |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Receivables [Abstract] | ||
Accounts receivable | $ 72,766 | $ 68,365 |
Allowance for doubtful accounts | (1,186) | (962) |
Accounts receivable, net | $ 71,580 | $ 67,403 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 18,629 | $ 15,822 |
Work in process | 567 | 294 |
Finished goods | 17,106 | 13,163 |
Inventories | $ 36,302 | $ 29,279 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, equipment and improvements, net of accumulated depreciation and amortization | $ 21,262 | $ 21,162 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and improvements, gross | 3,157 | 3,484 |
LoJack system components and law enforcement tracking units [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and improvements, gross | 20,558 | 22,412 |
Plant equipment and tooling [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and improvements, gross | 16,842 | 20,420 |
Office equipment, computers and furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and improvements, gross | 14,206 | 14,123 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and improvements, gross | 31,427 | 28,225 |
Property and Equipment, Excluding Fixed Assets Not Yet In Service [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and improvements, gross | 86,190 | 88,664 |
Less accumulated depreciation and amortization | (69,585) | (70,388) |
Property, equipment and improvements, net of accumulated depreciation and amortization | 16,605 | 18,276 |
Fixed Assets Not Yet in Service [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and improvements, gross | $ 4,657 | $ 2,886 |
PROPERTY AND EQUIPMENT (Narrati
PROPERTY AND EQUIPMENT (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 7,968 | $ 8,408 | $ 3,582 |
GOODWILL AND OTHER INTANGIBLE57
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Feb. 28, 2018 | Feb. 28, 2017 | |
Goodwill [Line Items] | ||
Balance at beginning of period | $ 72,980 | $ 16,508 |
Balance at end of period | 72,980 | 72,980 |
LoJack Corporation [Member] | ||
Goodwill [Line Items] | ||
Goodwill acquired during period | $ 0 | $ 56,472 |
GOODWILL AND OTHER INTANGIBLE58
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Other Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Finite Lived Intangible Assets [Line Items] | |||
Beginning balance | $ 102,460 | ||
Additions | 222 | ||
Ending balance | 102,682 | $ 102,460 | |
Beginning balance | 35,237 | ||
Intangible asset amortization | 14,989 | 15,061 | $ 6,626 |
Ending balance | 50,226 | 35,237 | |
Net ending | $ 52,456 | $ 67,223 | |
Minimum [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization period | 2 years | ||
Maximum [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization period | 10 years | ||
Supply Contract [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization period | 5 years | ||
Beginning balance | $ 2,220 | ||
Additions | 0 | ||
Ending balance | 2,220 | $ 2,220 | |
Beginning balance | 2,112 | ||
Intangible asset amortization | 108 | ||
Ending balance | 2,220 | 2,112 | |
Net ending | 0 | 108 | |
Developed Technology Rights [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Beginning balance | 22,280 | ||
Additions | 0 | ||
Ending balance | 22,280 | 22,280 | |
Beginning balance | 10,323 | ||
Intangible asset amortization | 3,965 | ||
Ending balance | 14,288 | 10,323 | |
Net ending | $ 7,992 | 11,957 | |
Developed Technology Rights [Member] | Minimum [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization period | 2 years | ||
Developed Technology Rights [Member] | Maximum [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization period | 7 years | ||
Trade Names [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Beginning balance | $ 37,643 | ||
Additions | 86 | ||
Ending balance | 37,729 | 37,643 | |
Beginning balance | 5,226 | ||
Intangible asset amortization | 3,861 | ||
Ending balance | 9,087 | 5,226 | |
Net ending | $ 28,642 | 32,417 | |
Trade Names [Member] | Minimum [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization period | 7 years | ||
Trade Names [Member] | Maximum [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization period | 10 years | ||
Customer Lists [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Beginning balance | $ 22,950 | ||
Additions | 0 | ||
Ending balance | 22,950 | 22,950 | |
Beginning balance | 15,018 | ||
Intangible asset amortization | 4,605 | ||
Ending balance | 19,623 | 15,018 | |
Net ending | $ 3,327 | 7,932 | |
Customer Lists [Member] | Minimum [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization period | 4 years | ||
Customer Lists [Member] | Maximum [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization period | 7 years | ||
Dealer Relationships [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization period | 7 years | ||
Beginning balance | $ 16,850 | ||
Additions | 0 | ||
Ending balance | 16,850 | 16,850 | |
Beginning balance | 2,308 | ||
Intangible asset amortization | 2,406 | ||
Ending balance | 4,714 | 2,308 | |
Net ending | $ 12,136 | 14,542 | |
Covenants not to compete [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization period | 5 years | ||
Beginning balance | $ 170 | ||
Additions | 0 | ||
Ending balance | 170 | 170 | |
Beginning balance | 162 | ||
Intangible asset amortization | 8 | ||
Ending balance | 170 | 162 | |
Net ending | $ 0 | 8 | |
Patents [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization period | 5 years | ||
Beginning balance | $ 347 | ||
Additions | 136 | ||
Ending balance | 483 | 347 | |
Beginning balance | 88 | ||
Intangible asset amortization | 36 | ||
Ending balance | 124 | 88 | |
Net ending | $ 359 | $ 259 |
GOODWILL AND OTHER INTANGIBLE59
GOODWILL AND OTHER INTANGIBLE ASSETS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Intangible assets amortization expense | $ 14,989 | $ 15,061 | $ 6,626 |
GOODWILL AND OTHER INTANGIBLE60
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Future Amortization Expense) (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Fiscal Year | ||
2,019 | $ 11,700 | |
2,020 | 9,693 | |
2,021 | 7,870 | |
2,022 | 6,236 | |
2,023 | 6,016 | |
Thereafter | 10,941 | |
Net | $ 52,456 | $ 67,223 |
OTHER ASSETS (Schedule of Other
OTHER ASSETS (Schedule of Other Assets) (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Other Assets Non Current [Line Items] | ||
Deferred compensation plan assets | $ 5,641 | $ 5,801 |
Investment in international licensees | 2,349 | 2,282 |
Other | 4,351 | 2,080 |
Total | 18,829 | 12,565 |
ThinxNet GmbH [Member] | ||
Other Assets Non Current [Line Items] | ||
Equity investment in and loan to equity investee | 2,674 | |
Smart Driver Club Limited [Member] | ||
Other Assets Non Current [Line Items] | ||
Equity investment in and loan to equity investee | $ 3,814 | $ 2,402 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) | 1 Months Ended | 12 Months Ended | 30 Months Ended | ||||||
Aug. 24, 2017USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015GBP (£) | Feb. 28, 2018USD ($) | Feb. 28, 2018GBP (£) | Feb. 28, 2017USD ($) | Feb. 29, 2016USD ($) | Feb. 28, 2018USD ($) | Feb. 28, 2018GBP (£) | |
Schedule of Equity Method Investments [Line Items] | |||||||||
Ownership in cost method investments | $ 2,349,000 | $ 2,282,000 | $ 2,349,000 | ||||||
Investment in equity method investment | 2,281,000 | 2,636,000 | $ 2,156,000 | ||||||
Equity in net loss of affiliate | 1,411,000 | 1,284,000 | 829,000 | ||||||
Foreign currency cumulative translation adjustment | $ (122,000) | (280,000) | (161,000) | ||||||
ThinxNet [Member] | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Ownership in cost method investments | $ 1,400,000 | ||||||||
Unsecured convertible note receivable | $ 1,270,000 | ||||||||
Interest rate on notes receivable | 6.00% | ||||||||
Notes receivables term | 12 months | ||||||||
Mexican licensee [Member] | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Ownership percentage of cost-method investments | 12.50% | 12.50% | 12.50% | ||||||
Ownership in cost method investments | $ 1,700,000 | $ 1,700,000 | |||||||
Dividend Income | $ 300,000 | 200,000 | 0 | ||||||
Smart Driver Club Limited [Member] | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Investment in equity method investment | $ 2,200,000 | ||||||||
Ownership percentage of equity-method investments | 49.00% | 49.00% | 49.00% | ||||||
Equity in net loss of affiliate | $ 1,400,000 | $ 1,300,000 | $ 800,000 | $ 3,500,000 | |||||
Interest rate on advance | 8.00% | 8.00% | |||||||
Foreign currency cumulative translation adjustment | $ 600,000 | ||||||||
Smart Driver Club Limited [Member] | GBP [Member] | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Investment in equity method investment | £ | £ 1,400,000 | £ 1,700,000 | |||||||
Debt instrument, face amount | £ | £ 3,700,000 |
FINANCING ARRANGEMENTS (Revolvi
FINANCING ARRANGEMENTS (Revolving Credit Facility) (Details) - Revolving Credit Facility [Member] - Subsequent Event [Member] | Mar. 30, 2018USD ($) |
Revolving Credit Facility | |
Maximum borrowing capacity | $ 50,000,000 |
Maturity date | Mar. 30, 2020 |
FINANCING ARRANGEMENTS (Long-te
FINANCING ARRANGEMENTS (Long-term Debt) (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Feb. 28, 2018USD ($)$ / sharesshares | Feb. 29, 2016USD ($) | Feb. 28, 2017USD ($) | May 31, 2015USD ($) | |
Debt Instrument [Line Items] | ||||
Issuance costs attributable to the liability component | $ 5,291 | |||
Convertible Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 172,500 | $ 172,500 | ||
Interest rate (as a percent) | 1.625% | 1.625% | 1.625% | |
Maturity date | May 15, 2020 | |||
Conversion rate of shares of common stock | 36.2398 | |||
Conversion price (in dollars per share) | $ / shares | $ 27.594 | |||
Equity component of issuance costs | $ 1,000 | |||
Net proceeds from sale of the Notes | 167,200 | |||
Unamortized issuance costs | 5,300 | |||
Net proceeds used to pay the cost of the convertible note hedge transactions | $ 15,400 | |||
Minimum percentage of aggregate principal by holders | 25.00% | |||
Percentage of repurchase price of the principal amount | 100.00% | |||
Indebtedness for excess money borrowed | $ 10,000 | |||
Indebtedness, entry of judgments for payment | $ 10,000 | |||
Debt Instrument, Covenant Description | The Indenture contains customary terms and conditions, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Notes, by notice to us and the Trustee, may declare 100% of the principal amount of, and accrued and unpaid interest, if any, on all the Notes then outstanding to be due and payable immediately. Such events of default include, without limitation, the default by us or any of our subsidiaries with respect to indebtedness for borrowed money in excess of $10 million and the entry of judgments for the payment of $10 million or more against us or any of our subsidiaries which are not paid, discharged or stayed within 60 days. | |||
Maximum number of shares of common stock that could be issued, following certain corporate events that occur prior to maturity | shares | 2,500,000 | |||
Fair value of the Notes | $ 188,000 | $ 138,900 | ||
Discount rate (as a percent) | 6.20% | |||
Conversion premium | $ 33,600 | |||
Debt discount to be amortized | 16,143 | $ 22,770 | $ 33,600 | |
Deferred tax effect of conversion feature | $ 16,000 | |||
Effective interest rate | 6.20% | |||
Issuance costs attributable to the liability component | $ 4,300 | |||
Deferred tax asset related to notes issuance | $ 400 | |||
Convertible Senior Notes [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, default judgment payment period | 60 days |
FINANCING ARRANGEMENTS (Schedul
FINANCING ARRANGEMENTS (Schedule of Balances Attributable to Notes) (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 | May 31, 2015 |
Liability component: | |||
Net carrying amount of the Notes | $ 154,299 | $ 146,827 | |
Convertible Senior Notes [Member] | |||
Liability component: | |||
Principal | 172,500 | 172,500 | |
Less: Unamortized debt discount | (16,143) | (22,770) | $ (33,600) |
Unamortized debt issuance costs | (2,058) | (2,903) | |
Net carrying amount of the Notes | $ 154,299 | $ 146,827 |
FINANCING ARRANGEMENTS (Note He
FINANCING ARRANGEMENTS (Note Hedge and Warrant Arrangements) (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 30, 2015 | Feb. 28, 2018 | Feb. 29, 2016 | Feb. 28, 2017 |
Debt Instrument [Line Items] | ||||
Purchase of note hedges, net of tax | $ (19,324) | |||
Proceeds from issuance of warrants | $ 15,991 | |||
Warrant [Member] | ||||
Debt Instrument [Line Items] | ||||
Strike price of underlie convertible notes (in dollars per share) | $ 39.42 | |||
Percentage of premium on sale price of common stock | 100.00% | |||
Share price (in dollars per share) | $ 19.71 | |||
Note Hedge [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of common stock with hedge transactions | 6,250,000 | |||
Debt Instrument, Face Amount | $ 172,500 | |||
Payments for notes hedges | 31,300 | |||
Purchase of note hedges, net of tax | $ 19,300 | |||
Conversion price for the Notes | $ 27.594 | |||
Warrants will be exercisable in equal installments | 80 days | |||
Proceeds from issuance of warrants | $ 16,000 | |||
Issue discount interest deductible for income tax purposes | 31,300 | |||
Deferred tax asset | 12,000 | |||
Convertible Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Face Amount | $ 172,500 | $ 172,500 | ||
Conversion price for the Notes | $ 27.594 |
INCOME TAXES (Income Before Inc
INCOME TAXES (Income Before Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 13,898 | $ (11,910) | $ 22,461 |
Foreign | 14,811 | 3,727 | (120) |
Income (loss) before income taxes and equity in net loss of affiliate | $ 28,709 | $ (8,183) | $ 22,341 |
INCOME TAXES (Components of Inc
INCOME TAXES (Components of Income Tax Benefit (Provision)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Current: | |||
Federal | $ (412) | $ (182) | |
State | (694) | $ (137) | (208) |
Foreign | (2,204) | (1,035) | (60) |
Total current | (3,310) | (1,172) | (450) |
Deferred: | |||
Federal | (6,156) | 1,712 | (4,331) |
State | (1,458) | 539 | 209 |
Foreign | 243 | 484 | |
Total deferred | (7,371) | 2,735 | (4,122) |
Income tax benefit (provision) | $ (10,681) | $ 1,563 | $ (4,572) |
INCOME TAXES (Reconciliation of
INCOME TAXES (Reconciliation of Income Tax Benefit (Provision)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit (provision) at U.S. statutory federal rate | $ (9,400) | $ 2,864 | $ (7,819) |
State income tax provision, net of federal income tax effect | (574) | 182 | (833) |
Foreign taxes | 2,923 | 68 | (102) |
Impact of tax reform | (8,955) | ||
Valuation allowance reductions (increases) | 3,046 | (1,391) | 2,541 |
Research and development tax credits | 1,034 | 806 | 1,008 |
Other, net | 1,245 | (966) | 633 |
Income tax benefit (provision) | $ (10,681) | $ 1,563 | $ (4,572) |
INCOME TAXES (Deferred Tax Asse
INCOME TAXES (Deferred Tax Assets) (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 10,343 | $ 23,751 |
Depreciation, amortization and impairments | (11,325) | (21,959) |
Research and development credits | 14,404 | 12,307 |
Stock-based compensation | 2,376 | 2,855 |
Other tax credits | 2,015 | 3,650 |
Inventory reserve | 292 | 903 |
Warranty reserve | 429 | 670 |
Payroll and employee benefit accruals | 1,941 | 3,012 |
Allowance for doubtful accounts | 354 | 961 |
Other accrued liabilities | 8,794 | 6,738 |
Other, net | 3,710 | 1,203 |
Gross deferred tax assets | 33,333 | 34,091 |
Valuation allowance | (1,752) | (6,587) |
Net deferred tax assets | $ 31,581 | $ 27,504 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2018 | Dec. 31, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Operating Loss Carryforwards [Line Items] | ||||||
Change in valuation allowance | $ 4,800,000 | |||||
Reduction in foreign tax credits | $ 2,400,000 | $ 2,400,000 | 2,400,000 | |||
Change in valuation allowance | (4,800,000) | |||||
Excess tax deductions from share-based payment arrangements | $ 2,600,000 | $ 0 | $ 4,500,000 | |||
Unrecognized tax benefit from uncertain tax position | $ 1,000,000 | |||||
Valuation allowance percentage | 100.00% | 100.00% | 100.00% | |||
Federal corporate tax rate | 21.00% | 35.00% | ||||
Tax Cuts and Jobs Act, Income tax expense | $ 6,600,000 | |||||
One-time transition tax liability, increase in income tax expense | $ 2,400,000 | |||||
Additional income taxes for remaining undistributed foreign earnings | 0 | |||||
Deferred tax liabilities, on undistributed foreign earnings | $ 0 | 0 | 0 | |||
State and Local Jurisdiction [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Change in valuation allowance | (1,800,000) | |||||
Change in valuation allowance | 1,800,000 | |||||
Net operating loss carryforwards | 43,000,000 | 43,000,000 | 43,000,000 | |||
State and Local Jurisdiction [Member] | Research Tax Credit Carryforward [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Tax credit carryforwards | 8,000,000 | 8,000,000 | 8,000,000 | |||
Domestic Tax Authority [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Net operating loss carryforwards | 35,000,000 | 35,000,000 | 35,000,000 | |||
Domestic Tax Authority [Member] | Research Tax Credit Carryforward [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Tax credit carryforwards | 9,100,000 | 9,100,000 | 9,100,000 | |||
California [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Expiration of NOL | 2,100,000 | 2,100,000 | 2,100,000 | |||
Italy [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Foreign deferred tax assets | 7,400,000 | 7,400,000 | 7,400,000 | |||
Canada [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Foreign deferred tax assets | 7,600,000 | 7,600,000 | 7,600,000 | |||
Italy and Canada [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Net operating losses | 11,900 | 11,900 | 11,900 | |||
Research and development carry forwords | $ 2,800 | $ 2,800 | $ 2,800 |
STOCKHOLDERS' EQUITY (Narrative
STOCKHOLDERS' EQUITY (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock repurchase program, authorized amount | $ 25,000,000 | |||
Number of shares repurchased | 1,800 | |||
Average cost per share | $ 14.20 | |||
Stock repurchased and retired | $ 25,000,000 | |||
Stock repurchased | $ 0 | |||
Shares available for grant | 2,233,762 | |||
Unrecognized share-based compensation cost | $ 21,900,000 | |||
Unrecognized compensation cost, recognition period | 3 years 1 month 6 days | |||
Aggregate fair value of stock options exercised and vested restricted stock-based awards | $ 6,900,000 | 6,300,000 | $ 9,100,000 | |
Excess tax deductions from equity awards | $ 2,600,000 | $ 0 | $ 4,500,000 | |
Employee Stock Option [Member] | 2004 Incentive Stock Plan [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration term | 10 years | |||
Vesting period | 4 years |
STOCKHOLDERS' EQUITY (Summary o
STOCKHOLDERS' EQUITY (Summary of Stock Option Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2015 | |
Number of Options | ||||
Outstanding, beginning balance | 955 | 860 | 1,007 | |
Granted | 165 | 227 | 82 | |
Exercised | (140) | (125) | (228) | |
Forfeited or expired | (7) | (1) | ||
Outstanding, ending balance | 980 | 955 | 860 | 1,007 |
Exercisable | 590 | 624 | 688 | |
Weighted Average Exercise Price | ||||
Outstanding, beginning balance | $ 8.60 | $ 6.96 | $ 5.80 | |
Granted | 19.31 | 14.49 | 17.54 | |
Exercised | 2.36 | 7.67 | 5.62 | |
Forfeited or expired | 15.70 | 1.80 | ||
Outstanding, ending balance | 11.29 | 8.60 | 6.96 | $ 5.80 |
Exercisable | $ 7.54 | $ 5.03 | $ 4.66 | |
Weighted average remaining contractual life, Outstanding | 5 years 10 months 24 days | 5 years 6 months | 4 years 8 months 12 days | 4 years 7 months 6 days |
Weighted average remaining contractual life, Exercisable | 4 years 1 month 6 days | 5 years 6 months | 4 years 8 months 12 days | |
Aggregate intrinsic value, Outstanding | $ 11,866 | |||
Aggregate intrinsic value, Exercisable | $ 9,349 | $ 7,046 | $ 9,374 | |
Weighted average grant date fair value of stock options granted during the year | $ 10.20 | $ 6.69 | $ 9.39 |
STOCKHOLDERS' EQUITY (Fair Valu
STOCKHOLDERS' EQUITY (Fair Value Assumptions) (Details) - Employee Stock Option [Member] | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life (years) | 6 years | 6 years | 6 years |
Expected volatility | 46.00% | 48.00% | 56.00% |
Risk-free interest rates | 2.00% | 1.30% | 1.80% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
STOCKHOLDERS' EQUITY (Summary75
STOCKHOLDERS' EQUITY (Summary of Restricted Stock Shares and RSUs Activity) (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Number of Restricted Shares, PSUs and RSUs | |||
Outstanding, beginning balance | 1,239 | 953 | 886 |
Granted | 770 | 766 | 517 |
Vested | (399) | (382) | (407) |
Forfeited | (176) | (98) | (43) |
Outstanding, ending balance | 1,434 | 1,239 | 953 |
Weighted Average Grant Date Fair Value | |||
Outstanding, beginning balance | $ 15.94 | $ 16.66 | $ 12.90 |
Granted | 19.55 | 14.63 | 17.75 |
Vested | 15.92 | 15.18 | 9.97 |
Forfeited | 17.34 | 15.64 | 15.55 |
Outstanding, ending balance | $ 17.72 | $ 15.94 | $ 16.66 |
Vested, Shares Retained to Cover Statutory Minimum Withholding Taxes | 133 | 122 | 147 |
STOCKHOLDERS' EQUITY (Schedule
STOCKHOLDERS' EQUITY (Schedule of Stock-based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 9,298 | $ 7,833 | $ 5,854 |
Cost of revenues [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 653 | 374 | 229 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 1,471 | 1,033 | 781 |
Selling and Marketing [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 2,314 | 1,655 | 1,208 |
General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 4,860 | $ 4,771 | $ 3,636 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Earnings Per Share [Abstract] | |||||||||||
Net income (loss) | $ (4,767) | $ 11,806 | $ 12,232 | $ (2,654) | $ (4,239) | $ (1,527) | $ 521 | $ (2,659) | $ 16,617 | $ (7,904) | $ 16,940 |
Basic weighted average number of common shares outstanding | 35,250 | 35,917 | 36,448 | ||||||||
Effect of stock options and restricted stock units computed on treasury stock method | 889 | 502 | |||||||||
Diluted weighted average number of common shares outstanding | 36,139 | 35,917 | 36,950 | ||||||||
Earnings (loss) per share: | |||||||||||
Basic | $ 0.47 | $ (0.22) | $ 0.46 | ||||||||
Diluted | $ (0.13) | $ 0.33 | $ 0.34 | $ (0.08) | $ (0.12) | $ (0.04) | $ 0.01 | $ (0.07) | $ 0.46 | $ (0.22) | $ 0.46 |
EARNINGS (LOSS) PER SHARE (Narr
EARNINGS (LOSS) PER SHARE (Narrative) (Details) - $ / shares | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Convertible Senior Notes [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Conversion price (in dollars per share) | $ 27.594 | ||
Stock Options [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities | 200,000 | 1,000,000 | 200,000 |
Restricted Stock Units (RSUs) [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities | 200,000 | 1,200,000 | 200,000 |
COMPREHENSIVE INCOME (LOSS) (Sc
COMPREHENSIVE INCOME (LOSS) (Schedule of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balances | $ (541) | $ (226) | $ (65) |
Other comprehensive income (loss), net of tax | 342 | (315) | (161) |
Balances | (199) | (541) | (226) |
Cumulative Foreign Currency Translation [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balances | (506) | (226) | (65) |
Other comprehensive income (loss), net of tax | (122) | (280) | (161) |
Balances | (628) | (506) | (226) |
Unrealized Gains/Losses on Marketable Securities [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balances | (35) | 0 | 0 |
Other comprehensive income (loss), net of tax | 464 | (35) | 0 |
Balances | $ 429 | $ (35) | $ 0 |
EMPLOYEE RETIREMENT PLAN (Detai
EMPLOYEE RETIREMENT PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Expense recorded related to matching contributions | $ 2 | $ 1.3 | $ 1.2 |
Defined Contribution Plan Threshold One [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percent of employee contribution matched by the Company | 100.00% | ||
Percent of employee compensation contributed | 3.00% | ||
Defined Contribution Plan Threshold Two [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percent of employee contribution matched by the Company | 50.00% | ||
Percent of employee compensation contributed | 2.00% |
OTHER FINANCIAL INFORMATION (Sc
OTHER FINANCIAL INFORMATION (Schedule of Other Current Liabilities) (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Other Financial Information Schedule Of Other Current Liabilities Details [Abstract] | ||
Warranty reserves | $ 5,734 | $ 6,518 |
Litigation accrual | 17,559 | 10,144 |
Other | 8,395 | 8,296 |
Total other current liabilities | $ 31,688 | $ 24,958 |
OTHER FINANCIAL INFORMATION (82
OTHER FINANCIAL INFORMATION (Schedule of Other Non-Current Liabilities) (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Feb. 28, 2017 |
Other Financial Information [Abstract] | ||
Deferred compensation plan liability | $ 5,642 | $ 5,825 |
Deferred revenue | 16,763 | 12,257 |
Deferred rent | 200 | 378 |
Other | 1,644 | 1,769 |
Total other non-current liabilities | $ 24,249 | $ 20,229 |
OTHER FINANCIAL INFORMATION (83
OTHER FINANCIAL INFORMATION (Schedule of Interest Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Interest expense on convertible senior unsecured notes: | |||
Stated interest at 1.625% per annum | $ 2,806 | $ 2,803 | $ 2,268 |
Amortization of note discount | 6,627 | 6,232 | 4,613 |
Amortization of debt issue costs | 845 | 795 | 588 |
Total interest expense on convertible notes | 10,278 | 9,830 | 7,469 |
Other interest expense | 2 | 66 | 126 |
Total interest expense | $ 10,280 | $ 9,896 | $ 7,595 |
Convertible Senior Notes [Member] | |||
Interest expense on convertible senior unsecured notes: | |||
Interest rate (as a percent) | 1.625% | 1.625% | 1.625% |
OTHER FINANCIAL INFORMATION (84
OTHER FINANCIAL INFORMATION (Schedule of Supplemental Cash Payments for Interest and Income Taxes and Non-cash Investing and Financing Activities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Cash payments for interest and income taxes: | |||
Interest expense paid | $ 2,844 | $ 2,852 | $ 1,512 |
Income tax paid | 3,498 | $ 2,259 | $ 451 |
Non-cash investing and financing activities: | |||
Equity investment in and loan to ThinxNet GmbH (see Note 9) | $ 2,674 |
OTHER FINANCIAL INFORMATION (85
OTHER FINANCIAL INFORMATION (Schedule of Valuation and Qualifying Accounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | ||
Allowance for Doubtful Accounts [Member] | ||||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||||
Balance at beginning of year | $ 962 | $ 622 | $ 673 | |
Charged (credited) to costs and expenses | 685 | 541 | 170 | |
Deductions | (461) | (201) | (221) | |
Other | [1] | 0 | 0 | 0 |
Balance at end of year | 1,186 | 962 | 622 | |
Warranty Reserves [Member] | ||||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||||
Balance at beginning of year | 6,518 | 1,892 | 1,819 | |
Charged (credited) to costs and expenses | 1,331 | 1,305 | 1,015 | |
Deductions | (2,115) | (2,562) | (942) | |
Other | [1] | 5,883 | ||
Balance at end of year | 5,734 | 6,518 | 1,892 | |
Deferred Tax Assets Valuation Allowance [Member] | ||||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||||
Balance at beginning of year | 6,587 | 1,618 | 4,159 | |
Charged (credited) to costs and expenses | 1,391 | |||
Deductions | (4,835) | (2,541) | ||
Other | [1] | 3,578 | ||
Balance at end of year | $ 1,752 | $ 6,587 | $ 1,618 | |
[1] | Represents amount of reserves and valuation allowance assumed in acquisition of LoJack. |
COMMITMENTS AND CONTINGENCIES86
COMMITMENTS AND CONTINGENCIES (Summary of Future Payments of Operating Lease Commitments) (Details) $ in Thousands | Feb. 28, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,019 | $ 6,477 |
2,020 | 4,689 |
2,021 | 2,556 |
2,022 | 1,683 |
2,023 | 1,296 |
Thereafter | 2,272 |
Future payments of operating lease commitments | $ 18,973 |
COMMITMENTS AND CONTINGENCIES87
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Rent expense | $ 6.9 | $ 7 | $ 2.2 |
LEGAL PROCEEDINGS (Details)
LEGAL PROCEEDINGS (Details) - USD ($) $ in Thousands | Jun. 09, 2017 | Apr. 24, 2017 | Apr. 05, 2017 | Feb. 24, 2016 | Jun. 30, 2018 | Apr. 30, 2018 | Nov. 30, 2017 | Jun. 30, 2017 | May 31, 2018 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2017 | Feb. 29, 2016 | Feb. 28, 2018 |
Loss Contingencies [Line Items] | ||||||||||||||
Damages awarded | $ 1,200 | $ 8,900 | $ 2,975 | |||||||||||
Damages reserve | $ 2,900 | |||||||||||||
Accrued damages amount | $ 2,900 | |||||||||||||
Accrual for litigation | $ 6,100 | $ 7,200 | ||||||||||||
Aggregate accrual in relation to legal matter | $ 17,600 | |||||||||||||
EVE Holdings Limited [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Amount of damages sought by company in litigation matter | $ 46,000 | |||||||||||||
Proceeds from litigation settlement | $ 13,000 | $ 15,000 | $ 28,000 | |||||||||||
LoJack [Member] | Subsequent Event [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Proceeds from litigation settlement | $ 13,300 | |||||||||||||
Scenario, Forecast [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Increased reserve in relation to legal matter | $ 6,100 | |||||||||||||
Scenario, Forecast [Member] | LoJack [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Proceeds from litigation settlement | $ 5,000 |
SEGMENT AND GEOGRAPHIC DATA (Na
SEGMENT AND GEOGRAPHIC DATA (Narrative) (Details) - Segment | Aug. 30, 2016 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 |
Segment Reporting [Abstract] | ||||
Number of reportable segments | 2 | 2 | 1 | 2 |
SEGMENT AND GEOGRAPHIC DATA (Sc
SEGMENT AND GEOGRAPHIC DATA (Schedule of Business Segment Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 94,395 | $ 93,669 | $ 89,767 | $ 88,081 | $ 86,126 | $ 83,350 | $ 90,479 | $ 91,147 | $ 365,912 | $ 351,102 | $ 280,719 |
Adjusted EBITDA | 52,382 | 49,368 | 49,007 | ||||||||
Goodwill | 72,980 | 72,980 | 72,980 | 72,980 | 16,508 | ||||||
Operating Segments [Member] | Telematics Systems [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 302,126 | 274,314 | 205,209 | ||||||||
Adjusted EBITDA | 48,943 | 47,432 | 34,051 | ||||||||
Goodwill | 50,899 | 50,899 | 50,899 | 50,899 | |||||||
Operating Segments [Member] | Software & Subscription Services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 63,786 | 61,719 | 36,178 | ||||||||
Adjusted EBITDA | 8,233 | 3,075 | 9,677 | ||||||||
Goodwill | $ 22,081 | $ 22,081 | 22,081 | 22,081 | |||||||
Operating Segments [Member] | Satellite [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 15,069 | 39,332 | |||||||||
Adjusted EBITDA | 2,447 | 8,573 | |||||||||
Corporate Expenses [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Adjusted EBITDA | $ (4,794) | $ (3,586) | $ (3,294) |
SEGMENT AND GEOGRAPHIC DATA (Su
SEGMENT AND GEOGRAPHIC DATA (Summary of Adjusted EBITDA) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Segment Information Summary Of Adjustments Results Of Ebitda Details [Abstract] | |||||||||||
Net income (loss) | $ (4,767) | $ 11,806 | $ 12,232 | $ (2,654) | $ (4,239) | $ (1,527) | $ 521 | $ (2,659) | $ 16,617 | $ (7,904) | $ 16,940 |
Investment income | (2,256) | (1,691) | (1,871) | ||||||||
Interest expense | 10,280 | 9,896 | 7,595 | ||||||||
Income tax effects | 10,681 | (1,563) | 4,572 | ||||||||
Depreciation expense | 7,968 | 8,408 | 3,582 | ||||||||
Intangible asset amortization | 14,989 | 15,061 | 6,626 | ||||||||
Stock-based compensation expense | 9,298 | 7,833 | 5,854 | ||||||||
Equity in net loss of affiliate | 1,411 | 1,284 | 829 | ||||||||
Acquisition and integration expenses | 4,513 | 1,980 | |||||||||
Non-cash adjustment to inventory and fixed asset | 335 | 4,339 | |||||||||
Legal expenses for LoJack battery performance issue | 3,323 | 1,948 | |||||||||
Litigation provision | 7,415 | 7,244 | 2,900 | ||||||||
Gain on LoJack battery performance legal Settlement | $ (13,300) | $ (15,000) | (28,333) | ||||||||
Other | 654 | ||||||||||
Adjusted EBITDA | $ 52,382 | $ 49,368 | $ 49,007 |
SEGMENT AND GEOGRAPHIC DATA (92
SEGMENT AND GEOGRAPHIC DATA (Summary of Revenues by Geographic Area) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 94,395 | $ 93,669 | $ 89,767 | $ 88,081 | $ 86,126 | $ 83,350 | $ 90,479 | $ 91,147 | $ 365,912 | $ 351,102 | $ 280,719 |
United States [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 265,613 | 259,974 | 232,995 | ||||||||
Europe, Middle East and Africa [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 45,830 | 49,918 | 19,178 | ||||||||
South America [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 20,699 | 17,738 | 9,019 | ||||||||
Canada [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 14,958 | 8,412 | 7,752 | ||||||||
Asia and Pacific Rim [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 12,873 | 8,967 | 4,524 | ||||||||
All other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 5,939 | $ 6,093 | $ 7,251 |
QUARTERLY FINANCIAL INFORMATI93
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 94,395 | $ 93,669 | $ 89,767 | $ 88,081 | $ 86,126 | $ 83,350 | $ 90,479 | $ 91,147 | $ 365,912 | $ 351,102 | $ 280,719 |
Gross profit | $ 38,422 | $ 38,187 | $ 36,838 | $ 37,443 | $ 35,787 | $ 35,117 | $ 37,614 | $ 34,834 | $ 150,890 | $ 143,352 | 102,959 |
Gross margin | 40.70% | 40.80% | 41.00% | 42.50% | 41.60% | 42.10% | 41.60% | 38.20% | 41.20% | 40.80% | |
Net income (loss) | $ (4,767) | $ 11,806 | $ 12,232 | $ (2,654) | $ (4,239) | $ (1,527) | $ 521 | $ (2,659) | $ 16,617 | $ (7,904) | $ 16,940 |
Earnings (loss) per diluted share | $ (0.13) | $ 0.33 | $ 0.34 | $ (0.08) | $ (0.12) | $ (0.04) | $ 0.01 | $ (0.07) | $ 0.46 | $ (0.22) | $ 0.46 |
Accrual for litigation | $ 6,100 | $ 7,200 | |||||||||
Gain from legal settlemen | $ 13,300 | $ 15,000 | $ 28,333 |
SUBSEQUENT EVENT (Narrative) (D
SUBSEQUENT EVENT (Narrative) (Details) - USD ($) | May 07, 2018 | Jun. 30, 2016 |
Subsequent Event [Line Items] | ||
Stock repurchase program, authorized amount | $ 25,000,000 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Stock repurchase program, authorized amount | $ 30,000,000 | |
Share repurchase program period | 12 months |