v3.26.1
Contingencies
3 Months Ended
Mar. 31, 2026
Commitments and Contingencies Disclosure [Abstract]  
Contingencies Contingencies
The Company is periodically involved in legal proceedings, legal actions and claims arising in the normal course of business, including proceedings relating to, for example, product liability, intellectual property, safety and health, employment, regulatory, and other matters. Such matters are subject to many uncertainties and outcomes are not predictable. The Company does not believe, however, that at the current time any of these matters constitute material pending legal proceedings that will have a material adverse effect on the financial position or future results of operations or cash flows of the Company.
On April 1, 2025, the Company completed its acquisition of VOXX (see Note 16). In connection with the acquisition, VOXX as acquired, maintained responsibility for certain legal matters and royalty audits. These matters include legal proceedings in which VOXX was named a defendant prior to the acquisition date, as well as unasserted claims and other legal matters for which the underlying events or circumstances existed as of the acquisition date and for which a liability was required to be recognized under ASC 805, Business Combinations ("ASC 805"). As part of the purchase price allocation, pursuant to applicable guidance, the Company recorded provisional liabilities for these matters based on estimates of their fair values as of the acquisition date. The Company continues to monitor the status of any of the matters that remain unresolved. Any adjustments recognized after the measurement period, as a result of additional information becoming available or the resolution of these matters, will be reflected in earnings in the period in which the adjustment is identified.
On February 20, 2026, the U.S. Supreme Court struck down certain tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"). Following the Supreme Court’s decision, the U.S. administration announced a new 10% global tariff under Section 122 of the Trade Act of 1974, subject to certain exceptions. The impact of these decisions on the Company remains uncertain, including the potential for refunds of IEEPA tariffs previously paid, changes in tariff levels, and/or new tariffs. The ultimate availability, timing, and amount of any potential refunds of IEEPA tariffs remains highly uncertain and is subject to further legal, regulatory, and administrative developments. Consistent with applicable GAAP, the Company has not recognized any receivable and corresponding offset to expense or asset as of March 31, 2026 related to potential refunds of IEEPA tariffs since any realization of any such recovery is dependent on uncertain future events and the Company is unable to conclude that recovery is both probable and reasonably estimable as of March 31, 2026. The Company continues to monitor and evaluate these developments and assess their potential impact on the Company’s business, financial condition, and results of operations. The Company is pursuing refunds as it determines appropriate.