Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
Entity Listings [Line Items] | ||
Entity Registrant Name | Thermon Group Holdings, Inc. | |
Entity Central Index Key | 1,489,096 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 32,595,336 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 28,481 | $ 33,879 |
Investments | 0 | 1,022 |
Accounts receivable, net of allowance for doubtful accounts of $1,430 and $1,231 as of September 30, 2018 and March 31, 2018, respectively | 82,538 | 94,411 |
Inventories, net | 74,255 | 63,829 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 21,902 | 16,114 |
Prepaid expenses and other current assets | 9,978 | 9,054 |
Income tax receivable | 3,401 | 1,885 |
Total current assets | 220,555 | 220,194 |
Property, plant and equipment, net | 74,427 | 74,485 |
Goodwill | 209,349 | 210,566 |
Intangible assets, net | 139,187 | 151,434 |
Deferred income taxes | 3,042 | 3,425 |
Other long term assets | 3,718 | 2,373 |
Total assets | 650,278 | 662,477 |
Current liabilities: | ||
Accounts payable | 23,643 | 22,995 |
Accrued liabilities | 17,315 | 22,810 |
Current portion of long term debt | 2,500 | 2,500 |
Borrowings under revolving credit facility | 8,497 | 0 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 7,947 | 8,143 |
Income taxes payable | 1,034 | 5,952 |
Total current liabilities | 60,936 | 62,400 |
Long-term debt, net of current maturities and deferred debt issuance costs and debt discounts of $7,263 and $7,967 as of September 30, 2018 and March 31, 2018, respectively | 210,987 | 214,533 |
Deferred income taxes | 31,694 | 34,252 |
Other noncurrent liabilities | 9,521 | 10,439 |
Total liabilities | 313,138 | 321,624 |
Equity | ||
Common stock: $.001 par value; 150,000,000 authorized; 32,591,409 and 32,492,339 shares issued and outstanding at September 30, 2018 and March 31, 2018, respectively | 33 | 32 |
Preferred stock: $.001 par value; 10,000,000 authorized; no shares issued and outstanding | 0 | 0 |
Additional paid in capital | 217,691 | 222,622 |
Accumulated other comprehensive loss | (41,602) | (36,541) |
Retained earnings | 155,081 | 148,812 |
Total Thermon Group Holdings, Inc. shareholders' equity | 331,203 | 334,925 |
Non-controlling interests | 5,937 | 5,928 |
Total equity | 337,140 | 340,853 |
Total liabilities and equity | $ 650,278 | $ 662,477 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 31, 2018 |
Debt issuance costs, net | $ 7,263 | $ 7,967 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 32,591,409 | 32,492,339 |
Common stock, shares outstanding | 32,591,409 | 32,492,339 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury Stock, Shares | 0 | 0 |
Thermon Holding Corp. | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 1,430 | $ 1,231 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 90,154 | $ 61,631 | $ 179,056 | $ 113,367 |
Cost of sales | 49,795 | 30,671 | 98,968 | 58,593 |
Gross profit | 40,359 | 30,960 | 80,088 | 54,774 |
Operating expenses: | ||||
Marketing, general and administrative and engineering | 26,191 | 20,521 | 51,903 | 39,838 |
Amortization of intangible assets | 5,496 | 3,022 | 11,273 | 5,961 |
Income from operations | 8,672 | 7,417 | 16,912 | 8,975 |
Other income/(expenses): | ||||
Interest income | 48 | 239 | 123 | 392 |
Interest expense | (3,985) | (787) | (7,588) | (1,589) |
Other expense | 346 | (103) | 228 | (71) |
Income before provision for income taxes | 5,081 | 6,766 | 9,675 | 7,707 |
Income tax expense | 1,756 | 1,688 | 2,972 | 1,915 |
Net income | 3,325 | 5,078 | 6,703 | 5,792 |
Income attributable to non-controlling interests | 98 | 300 | 434 | 535 |
Net income available to Thermon Group Holdings, Inc. | 3,227 | 4,778 | 6,269 | 5,257 |
Comprehensive income (loss): | ||||
Net income available to Thermon Group Holdings, Inc. | 3,227 | 4,778 | 6,269 | 5,257 |
Foreign currency translation adjustment | 3,206 | 7,563 | (5,061) | 13,281 |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax, Portion Attributable to Parent | 0 | 9 | ||
Derivative valuation, net of tax | 0 | 7 | ||
Comprehensive income | $ 6,433 | $ 12,350 | $ 1,208 | $ 18,545 |
Net Income per common share: | ||||
Basic (in dollars per share) | $ 0.10 | $ 0.15 | $ 0.19 | $ 0.16 |
Diluted (in dollars per share) | $ 0.10 | $ 0.15 | $ 0.19 | $ 0.16 |
Weighted-average shares used in computing net income per common share: | ||||
Basic (in shares) | 32,571,432 | 32,408,143 | 32,536,499 | 32,412,819 |
Diluted (in shares) | 33,102,803 | 32,789,521 | 32,970,494 | 32,717,375 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities | ||
Net income | $ 6,703 | $ 5,792 |
Adjustment to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 15,826 | 9,544 |
Amortization of deferred debt issuance costs | 734 | 174 |
Amortization of inventory step-up | 172 | 0 |
Stock compensation expense | 2,089 | 1,732 |
Deferred income taxes | (2,010) | (1,195) |
Long term cross currency swap | (634) | 0 |
Remeasurement loss on intercompany balances | 1,800 | 122 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 9,463 | 9,433 |
Inventories | (11,862) | (8,418) |
Contract assets | (6,301) | (5,783) |
Other current and noncurrent assets | (4,928) | (2,950) |
Accounts payable | 252 | 3,733 |
Accrued liabilities and noncurrent liabilities | (4,915) | 539 |
Income taxes payable and receivable | (4,273) | 171 |
Net cash provided by operating activities | 2,116 | 12,894 |
Investing activities | ||
Purchases of property, plant and equipment | (5,702) | (4,887) |
Sale of rental equipment at net book value | 522 | 169 |
Proceeds from sale of property, plant and equipment | 23 | 8 |
Purchases of investments | 0 | (8,283) |
Proceeds from the sale of investments | 958 | 49,310 |
Net cash provided by (used in) investing activities | (4,199) | 36,317 |
Financing activities | ||
Proceeds from revolving credit facility | 22,009 | 4,000 |
Payments on long term debt and revolving credit facility | (17,790) | (14,125) |
Purchase of shares from non-controlling interests | (5,665) | 0 |
Proceeds from exercise of stock options | 233 | 106 |
Repurchase of employee stock units on vesting | (559) | (463) |
Payments on lease financing | (122) | (125) |
Net cash used in financing activities | (1,894) | (10,607) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,459) | 2,283 |
Cash and cash equivalents at end of period | 28,481 | |
Cash, cash equivalents and restricted cash at beginning of period | 36,327 | 44,293 |
Cash, cash equivalents and restricted cash at end of period | 30,891 | 85,180 |
Change in cash, cash equivalents and restricted cash | $ (5,436) | $ 40,887 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policy Information | 6 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Accounting Policy Information | Basis of Presentation and Accounting Policy Information Thermon Group Holdings, Inc. and its direct and indirect subsidiaries are referred to collectively as “we,” “our,” or the “Company” herein. We are a provider of highly engineered industrial process heating solutions for process industries. Our core thermal solutions product - also referred to as heat tracing - provides an external heat source to pipes, vessels and instruments for the purposes of freeze protection, temperature and flow maintenance, environmental monitoring, and surface snow and ice melting. As a manufacturer, we provide a suite of products (heating units, heating cables, tubing bundles and control systems) and services (design optimization, engineering, installation and maintenance services) required to deliver comprehensive solutions to complex projects. On October 30, 2017, we, through a wholly-owned subsidiary, consummated the acquisition of 100% of the equity interests of CCI Thermal Technologies Inc., which was amalgamated with such subsidiary immediately after the closing of the acquisition to form Thermon Heating Systems, Inc. ("THS"), an indirect, wholly-owned subsidiary of the Company. THS is engaged in industrial process heating, focused on the development and production of advanced heating and filtration solutions for industrial and hazardous area applications. In addition to our thermal solution offerings, we offer temporary power products that are designed to provide a safe and efficient means of supplying temporary electrical power distribution and lighting at energy infrastructure facilities for new construction and during maintenance and turnaround projects at operating facilities. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended March 31, 2018 . In our opinion, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring items) considered necessary to present fairly our financial position at September 30, 2018 and March 31, 2018 , and the results of our operations for the three and six months ended September 30, 2018 and 2017 . Use of Estimates Generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. While our management has based their assumptions and estimates on the facts and circumstances existing at September 30, 2018 , actual results could differ from those estimates and affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities and the corresponding revenues and expenses as of the date of the financial statements. The operating results for the three and six months ended September 30, 2018 are not necessarily indicative of the results that may be achieved for the fiscal year ending March 31, 2019 . Recent Accounting Pronouncements Revenue Recognition - In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09 "Revenue from Contracts with Customers" (Topic 606), which amends the existing revenue recognition requirements and guidance. The core principle of the new standard is to recognize revenue that reflects the consideration the Company expects to receive for goods or services when or as the promised goods or services are transferred to customers. Topic 606 requires more judgment than current guidance, as management will now be required to: (i) identify each performance obligation in contracts with customers, (ii) estimate any variable consideration included in the transaction price and (iii) allocate the transaction price to each performance obligation. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company adopted the amended guidance using the modified retrospective method as of April 1, 2018. Please refer to Note 13 "Revenue from Contracts with Customers" for further discussion, including the impact the adoption had on our condensed consolidated financial statements. Financial Instruments- In January 2016, the FASB issued Accounting Standards Update 2016-01 “Financial Instruments-Overall” (Subtopic 825-10), which amends the guidance on the classification and measurement of financial instruments. The amendment requires all equity investments to be measured at fair value with changes in the fair value recognized through earnings. The amendment also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the credit risk when an entity has elected the fair value option. The guidance eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Early adoption is permitted for certain provisions of the accounting standards update. Upon adoption of the standard, an entity will be required to make a cumulative-effect adjustment to retained earnings as of the beginning of such reporting period. We adopted this standard effective April 1, 2018 and it did not have a material impact on our consolidated financial statements. Leases - In February 2016, the FASB issued Accounting Standards Update 2016-02 “Leases” (Topic 842), which provides guidance on the recognition, measurement, presentation and disclosure on leases. Under the standard, substantially all leases will be reported on the balance sheet as right-of-use assets and lease liabilities. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted. We have begun to evaluate the impact of this amended guidance on our financial position, results of operations, disclosures and internal controls but have not yet finalized our determination regarding the expected financial impact of this amended guidance. While we are unable to quantify the impact at this time, we expect the primary impact to our consolidated financial position upon adoption will be the recognition, on a discounted basis, of our minimum commitments under non-cancelable operating leases on our consolidated balance sheets resulting in the recording of right-of-use assets and lease obligations. We intend to complete a comprehensive internal review of all lease obligations by the end of the third quarter of the fiscal year ending March 31, 2019. We plan to adopt Topic 842 in the first quarter of the fiscal year ending March 31, 2020. Statement of Cash Flows - In November 2016, the FASB issued Accounting Standards Update 2016-18, "Restricted Cash" ("Topic 230"), which clarifies how entities should present restricted cash and restricted cash equivalents in the statement of cash flows and requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. Topic 230 became effective for public companies during interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. The Company adopted Topic 230 during the current fiscal year, which resulted in an updated presentation of our statement of cash flows and enhanced disclosures. The following table provides a reconciliation of cash, cash equivalents, restricted cash included in prepaid expenses and other current assets and restricted cash included in other long term assets reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. September 30, 2018 2017 Cash and cash equivalents $ 28,481 $ 83,378 Restricted cash included in prepaid expenses and other current assets 1,759 1,324 Restricted cash included in other long term assets 651 478 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 30,891 $ 85,180 Amounts shown in restricted cash included in prepaid expenses and other current assets and other long term assets represent those required to be set aside by a contractual agreement, which contain cash deposits pledged as collateral on performance bonds and letters of credit. Amounts shown in restricted cash in other long term assets represent such agreements that require a commitment term longer than one year. Financial Instruments- In June 2016, the FASB issued Accounting Standards Update 2016-13 “Financial Instruments-Credit Losses” (Topic 326), which amends the guidance on the impairment of financial instruments. The standard adds an impairment model, referred to as current expected credit loss, which is based on expected losses rather than incurred losses. The standard applies to most debt instruments, trade receivables, lease receivables, reinsurance receivables, financial guarantees and loan commitments. Under the guidance, companies are required to disclose credit quality indicators disaggregated by year of origination for a five-year period. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. We do not anticipate this will have a material impact to our consolidated financial statements. Statement of Cash Flows- In August 2016, the FASB issued Accounting Standards Update 2016-15 “Statement of Cash Flows” (Topic 230), which amends Topic 230 of the accounting standards codification (ASC) to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. The standard addresses eight types of cash flows, some of which we believe could or will impact our financial statements upon adoption, including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, and proceeds from the settlement of insurance claims. Under the guidance, cash payments for debt prepayment or extinguishment costs must be classified as cash outflows from financing activities. Contingent consideration payments that were not made soon after a business combination must be separated and classified in operating and financing activities. Cash payments up to the amount of the contingent consideration liability recognized as of the acquisition dates, including any measurement-period adjustments, should be classified in financing activities, while any excess cash payments should be classified in operating activities. Cash proceeds from the settlement of insurance claims should be classified on the basis of the nature of the loss. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted for all entities. Entities must apply the guidance retrospectively to all periods presented but may be applied prospectively if retrospective application would be impracticable. We adopted this standard prospectively effective April 1, 2018 and it did not have a material impact on our consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair Value . We measure fair value based on authoritative accounting guidance, which defines fair value, establishes a framework for measuring fair value and expands on required disclosures regarding fair value measurements. Inputs are referred to as assumptions that market participants would use in pricing the asset or liability. The uses of inputs in the valuation process are categorized into a three-level fair value hierarchy. • Level 1 — uses quoted prices in active markets for identical assets or liabilities we have the ability to access. • Level 2 — uses observable inputs other than quoted prices in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3 — uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Financial assets and liabilities with carrying amounts approximating fair value include cash, trade accounts receivable, accounts payable, accrued expenses and other current liabilities. The carrying amount of these financial assets and liabilities approximates fair value because of their short maturities. At September 30, 2018 and March 31, 2018 , no assets or liabilities were valued using Level 3 criteria. Information about our short-term debt and long-term debt that is not measured at fair value is as follows: September 30, 2018 March 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Valuation Technique Financial Liabilities Outstanding principal amount of senior secured credit facility $ 220,750 $ 220,750 $ 225,000 $ 225,000 Level 2 - Market Approach Outstanding borrowings from revolving line of credit $ 8,497 $ 8,497 $ — $ — Level 2 - Market Approach At September 30, 2018 and March 31, 2018 , the fair value of our variable rate term loan approximates its carrying value as we pay interest based on the current market rate. As the quoted price is only available for similar financial assets, the Company concluded the pricing is indirectly observable through dealers and has been classified as Level 2. Cross Currency Swap The Company has entered into a long term cross currency swap to hedge the currency rate fluctuations related to a $89,539 intercompany receivable from our wholly-owned Canadian subsidiary, Thermon Canada Inc., maturing on October 30, 2022. Periodic principal payments are to be settled twice annually with interest payments settled quarterly through the cross currency derivative contract. We do not designate the cross currency swap as a cash flow hedge under ASC 815. At September 30, 2018 , we recorded $897 of unrealized mark-to-market loss on the cross-currency swap which is reported as "Other non-current liabilities", in the condensed consolidated balance sheet. The mark-to-market valuation has been determined by actual quoted prices (Level 2). For the six months ended September 30, 2018 , the gain on the long-term cross currency swap derivative contract was offset by unrealized losses on the intercompany note of $385 for a net gain of $249 . Trade Related Foreign Currency Forward Contracts We transact business in various foreign currencies and have established a program that primarily utilizes foreign currency forward contracts to offset the risk associated with the effects of certain foreign currency exposures. Under this program, increases or decreases in our foreign currency exposures are offset by gains or losses on the forward contracts to mitigate foreign currency transaction gains or losses. These foreign currency exposures arise from intercompany transactions as well as third party accounts receivable or payable that are denominated in foreign currencies. Our forward contracts generally have terms of 30 days. We do not use forward contracts for trading purposes or designate these forward contracts as hedging instruments pursuant to ASC 815. We adjust the carrying amount of all contracts to their fair value at the end of each reporting period and unrealized gains and losses are included in our results of operations for that period. These gains and losses are designed to offset gains and losses resulting from settlement of receivables or payables by our foreign operations which are settled in currency other than the local transactional currency. The fair value is determined by quoted prices from active foreign currency markets (Level 2). The condensed consolidated balance sheets reflect unrealized gains within accounts receivable, net and unrealized losses within accrued liabilities. Our ultimate realized gain or loss with respect to currency fluctuations will depend on the currency exchange rates and other factors in effect as the contracts mature. As of September 30, 2018 and March 31, 2018 , the notional amounts of forward contracts were as follows: Notional amount of foreign currency forward contracts by currency September 30, 2018 March 31, 2018 Russian Ruble $ 1,159 $ 2,416 Euro — 750 Canadian Dollar 4,000 4,000 South Korean Won 1,500 10,500 Mexican Peso — 200 Australian Dollar 650 850 Total notional amounts $ 7,309 $ 18,716 The following table represents the fair value of our foreign currency forward contracts: September 30, 2018 March 31, 2018 Fair Value Fair Value Assets Liabilities Assets Liabilities Foreign currency forward contracts $ 53 $ 12 $ 229 $ 25 Foreign currency gains or losses related to our forward contracts in the accompanying condensed consolidated statements of operations and comprehensive income were gains of $70 and losses of $85 in the three months ended September 30, 2018 and 2017 , respectively, and losses of $25 and $132 for the six months ended September 30, 2018 and 2017, respectively. Gains and losses from our forward contracts were offset by transaction gains or losses incurred with the settlement of transactions denominated in foreign currencies. For the three months ended September 30, 2018 and 2017 , our net foreign currency transactions were gains of $339 and losses of $135 , respectively, and gains of $263 and losses of $115 for the six months ended September 30, 2018 and 2017, respectively. |
Acquisitions
Acquisitions | 6 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions THS acquisition On October 30, 2017, we, through a wholly-owned subsidiary, acquired 100% of the equity interests of CCI Thermal Technologies Inc. and certain related real estate assets for $262,415 CAD (approximately $204,596 USD at the exchange rate as of October 30, 2017) in cash (such purchase price inclusive of final working capital adjustments). Such subsidiary and CCI Thermal Technologies Inc. amalgamated immediately after the closing of the acquisition to form Thermon Heating Systems, Inc. ("THS"), an indirect, wholly-owned subsidiary of the Company. THS is engaged in industrial process heating, focused on the development and production of advanced heating and filtration solutions for industrial and hazardous area applications and is headquartered in Edmonton, Alberta, Canada. THS markets its products through several diverse brands known for high quality, safety and reliability, and serves clients in the energy, petrochemical, electrical distribution, power, transit and industrial end markets globally. We believe we will be able to leverage our existing global sales force to further expand the reach of THS's product offerings. We recognized $85,637 of goodwill in connection with the THS acquisition. As of September 30, 2018, the Company has determined there are no adjustments to the amounts below. The following table details the purchase price of the THS acquisition: Consideration to or on behalf of sellers $ 204,596 Fair value of total consideration transferred 204,596 The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed: Assets acquired: Cash $ 1,534 Accounts receivable 14,351 Inventories 20,085 Other current assets 1,181 Property, plant and equipment 29,464 Identifiable intangible assets 79,002 Goodwill 85,637 Total assets 231,254 Liabilities assumed: Current liabilities 6,832 Other non-current liabilities 500 Non-current deferred tax liability 19,326 Total liabilities 26,658 Total consideration $ 204,596 In total, $4,093 of transaction costs were incurred related to the THS acquisition, all of which were incurred prior to the six months ended September 30, 2018 . During the six months ended September 30, 2018 , we finalized the working capital adjustment related to the THS acquisition, and accordingly, recorded an adjustment to goodwill in the amount of $481 and recorded other minor adjustments to current liabilities. Our provisional estimate of identifiable intangible assets at September 30, 2018 that were related to the THS acquisition, inclusive of currency translation adjustments for the period, consisted of the following: Amortization period Gross Carrying Amount at September 30, 2018 Accumulated Amortization Net Carrying Amount at September 30, 2018 Gross Carrying Amount at March 31, 2018 Accumulated Amortization Net Carrying Amount at March 31, 2018 Products 10 Years $ 64,356 $ 5,899 $ 58,457 $ 64,611 $ 2,692 $ 61,919 Customer relationships 17 Years 11,111 599 10,512 11,155 273 10,882 Backlog 1 Year 3,217 2,949 268 3,230 1,346 1,884 Total $ 78,684 $ 9,447 $ 69,237 $ 78,996 $ 4,311 $ 74,685 The weighted average useful life of acquired finite lived intangible assets related to THS acquisition is 10.6 years . |
Net Income per Common Share
Net Income per Common Share | 6 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income per Common Share | Net Income per Common Share Basic net income per common share is computed by dividing net income available to Thermon Group Holdings, Inc. by the weighted average number of common shares outstanding during each period. Diluted net income per common share is computed by dividing net income available to Thermon Group Holdings, Inc. by the weighted average number of common shares and common share equivalents outstanding (if dilutive) during each period. The number of common share equivalents, which includes options and both restricted and performance stock units, is computed using the treasury stock method. With regard to the performance stock units, we assumed that the associated performance targets will be met at the target level of performance for purposes of calculating diluted net income per common share. The reconciliations of the denominators used to calculate basic and diluted net income per common share for the three and six months ended September 30, 2018 and 2017 , respectively, are as follows: Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Six Months Ended September 30, 2018 Six Months Ended September 30, 2017 Basic net income per common share Net income available to Thermon Group Holdings, Inc. $ 3,227 $ 4,778 $ 6,269 $ 5,257 Weighted-average common shares outstanding 32,571,432 32,408,143 32,536,499 32,412,819 Basic net income per common share $ 0.10 $ 0.15 $ 0.19 $ 0.16 Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Six Months Ended September 30, 2018 Six Months Ended September 30, 2017 Diluted net income per common share Net income available to Thermon Group Holdings, Inc. $ 3,227 $ 4,778 $ 6,269 $ 5,257 Weighted-average common shares outstanding 32,571,432 32,408,143 32,536,499 32,412,819 Common share equivalents: Stock options 219,205 192,179 218,521 197,734 Restricted and performance stock units 312,166 189,199 215,474 106,822 Weighted average shares outstanding – dilutive (1) 33,102,803 32,789,521 32,970,494 32,717,375 Diluted net income per common share $ 0.10 $ 0.15 $ 0.19 $ 0.16 (1) For the three and six months ended September 30, 2017 , 52,252 and 47,999 equity awards, respectively, were not included in the calculation of diluted net income per common share, as they would have had an anti-dilutive effect. |
Inventories
Inventories | 6 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: September 30, March 31, Raw materials $ 36,975 $ 31,516 Work in process 6,960 7,186 Finished goods 32,484 27,204 76,419 65,906 Valuation reserves (2,164 ) (2,077 ) Inventories, net $ 74,255 $ 63,829 |
Goodwill
Goodwill | 6 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The carrying amount of goodwill by operating segment as of September 30, 2018 is as follows: United States and Latin America Canada Europe, Middle East and Africa Asia-Pacific Total Balance as of March 31, 2018 $ 52,016 $ 128,767 $ 21,159 $ 8,624 $ 210,566 Adjustments to purchase price allocation — 481 — — 481 Foreign currency translation impact — (464 ) (1,234 ) — (1,698 ) Balance as of September 30, 2018 $ 52,016 $ 128,784 $ 19,925 $ 8,624 $ 209,349 Goodwill is tested for impairment on an annual basis and between annual tests if indicators of potential impairment exist. We perform a qualitative analysis to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If required, we also perform a quantitative analysis using the income approach, based on discounted future cash flows, which are derived from internal forecasts and economic expectations, and the market approach based on market multiples of guideline public companies. The most significant inputs in the Company's quantitative goodwill impairment tests are projected financial information, the weighted average cost of capital and market multiples for similar transactions. Our annual impairment test is performed during the fourth quarter of our fiscal year. No triggering events were identified during the period ended September 30, 2018 which indicated the fair value of any of our reporting units was less than its carrying amount. Our total intangible assets consisted of the following: Gross Carrying Amount at September 30, 2018 Accumulated Amortization Net Carrying Amount at September 30, 2018 Gross Carrying Amount at March 31, 2018 Accumulated Amortization Net Carrying Amount at March 31, 2018 Products $ 64,356 $ 5,899 $ 58,457 $ 64,611 $ 2,719 $ 61,892 Trademarks 45,490 921 44,569 46,156 832 45,324 Developed technology 10,012 4,291 5,721 10,160 4,106 6,054 Customer relationships 112,469 82,749 29,720 113,378 77,646 35,732 Certifications 452 — 452 458 — 458 Other 5,849 5,581 268 5,863 3,889 1,974 Total $ 238,628 $ 99,441 $ 139,187 $ 240,626 $ 89,192 $ 151,434 |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued current liabilities consisted of the following: September 30, March 31, Accrued employee compensation and related expenses $ 11,951 $ 16,449 Accrued interest 1,104 1,154 Customer prepayment 320 519 Warranty reserve 300 300 Professional fees 1,695 1,854 Sales tax payable 999 1,546 Other 946 988 Total accrued current liabilities $ 17,315 $ 22,810 |
Short-Term Revolving Credit Fac
Short-Term Revolving Credit Facilities | 6 Months Ended |
Sep. 30, 2018 | |
Short-term Debt [Abstract] | |
Short-Term Revolving Credit Facilities | Short-Term Revolving Credit Facilities Under the Company’s senior secured revolving credit facility described below in Note 9, “Long-Term Debt,” the Company had $8,497 in outstanding borrowings at September 30, 2018 . There were no outstanding borrowings at March 31, 2018 . |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: September 30, March 31, Variable Rate Term Loan, due October 2024, net of deferred debt issuance costs and debt discounts of $7,263 and $7,967 as of September 30, 2018 and March 31, 2018, respectively. $ 213,487 $ 217,033 Less current portion (2,500 ) (2,500 ) Total long-term debt $ 210,987 $ 214,533 Senior Secured Credit Facility On October 30, 2017, the Company, as a credit party and a guarantor, Thermon Holding Corp. (the “US Borrower”) and Thermon Canada Inc. (the “Canadian Borrower” and together with the US Borrower, the “Borrowers”), as borrowers, entered into a credit agreement with several banks and other financial institutions or entities from time to time (the “Lenders”) and JPMorgan Chase Bank, N.A. as administrative agent (the "Agent"), that provides for a $250,000 seven-year term loan B facility made available to the US Borrower and a $60,000 five -year senior secured revolving credit facility made available to the US Borrower and the Canadian Borrower, which we refer to collectively as our “credit facility”. The proceeds of the term loan B were used to (1) pay in full $70,875 principal and interest on a previously issued term loan due April 2019; (2) repay $6,000 in unpaid principal and interest on the US Borrower's revolving line of credit; (3) to fund approximately $201,900 CAD of the purchase price of the THS acquisition and certain related real estate assets for approximately $164,900 ; and (4) pay certain transaction fees and expenses in connection with the THS acquisition and the credit facility. Interest rates and fees. The US Borrower will have the option to pay interest on the term loan B at a base rate, plus an applicable margin, or at a rate based on LIBOR, (subject to a floor of 1.00% ), plus an applicable margin. The applicable margin for base rate loans is 275 basis points and the applicable margin for LIBOR loans is 375 basis points. The US Borrower may borrow revolving loans in US dollars and the Canadian Borrower may also borrow revolving loans in Canadian dollars. Borrowings under the revolving credit facility (a) made in US dollars will bear interest at a rate equal to a base rate, plus an applicable margin of 225 basis points or at a rate based on LIBOR, plus an applicable margin of 325 basis points and (b) made in Canadian dollars will bear interest at a rate equal to a Canadian base rate, plus an applicable margin of 225 basis points or at a rate based on Canadian Dollar Offered Rate, plus an applicable margin of 325 basis points; provided that, following the completion of the fiscal quarter ending March 31, 2018, the applicable margins in each case will be determined based on a leverage-based performance grid, as set forth in the credit agreement. In addition to paying interest on outstanding principal under the revolving credit facility, the US Borrower is required to pay a commitment fee in respect of unutilized revolving commitments of 0.50% per annum based on a leverage-based performance grid. Maturity and repayment. The revolving credit facility terminates on October 28, 2022. The scheduled maturity date of the term loan facility is October 30, 2024. Commencing on April 1, 2018, the term loan began amortizing in equal quarterly installments of 0.25% of the $250,000 term loan, with the payment of the balance at maturity. The US Borrower will be able to voluntarily prepay the principal of the term loan without penalty or premium (subject to breakage fees) at any time in whole or in part after April 30, 2018. The US Borrower is required to repay the term loan with certain asset sale and insurance proceeds, certain debt proceeds and, commencing for the fiscal year ending March 31, 2019, 50% of excess cash flow (reducing to 25% if the Company’s leverage ratio is less than 4.0 to 1.0 but greater than or equal to 3.5 to 1.0 and 0% if the Company’s leverage ratio is less than 3.5 to 1.0 ). Commencing April 1, 2018, the Company will be required to make quarterly principal payments of the term loan of $625 through July 31, 2024. The remaining balance will be due at maturity of the term loan facility on October 30, 2024. Accordion. The credit facility allows for incremental term loans and incremental revolving commitments in an amount not to exceed $30,000 and an unlimited additional amount that would not cause the consolidated secured leverage ratio to exceed 4.0 to 1.0 (or, if less, the maximum consolidated leverage ratio permitted by the revolving credit facility on such date). At September 30, 2018 , we had $8,497 in outstanding borrowings under our revolving credit facility. The interest rate on outstanding revolving credit facility borrowings on September 30, 2018 was 4.74% . As of September 30, 2018 , we had $46,587 of available borrowing capacity under our revolving credit facility after taking into account the borrowing base, outstanding borrowings and letters of credit outstanding. The variable rate term loan bears interest at the LIBOR rate plus an applicable margin dictated by our leverage ratio (as described above). Guarantees; security. The term loan is guaranteed by the Company and all of the Company's current and future wholly-owned domestic material subsidiaries (the “US Subsidiary Guarantors”), subject to certain exceptions. Obligations of the US Borrower under the revolving credit facility are guaranteed by the Company and the US Subsidiary Guarantors. The obligations of the Canadian Borrower under the revolving credit facility are guaranteed by the Company, the US Borrower, the US Subsidiary Guarantors and each of the wholly owned Canadian material subsidiaries of the Canadian Borrower, subject to certain exceptions. The term loan and the obligations of the US Borrower under the revolving credit facility are secured by a first lien on all of the Company’s assets and the assets of the US Subsidiary Guarantors, including 100% of the capital stock of the US Subsidiary Guarantors and 65% of the capital stock of the first tier material foreign subsidiaries of the Company, the US Borrower and the US Subsidiary Guarantors, subject to certain exceptions. The obligations of the Canadian Borrower under the revolving credit facility are secured by a first lien on all of the Company's assets, the US Subsidiary Guarantors' assets, the Canadian Borrower’s assets and the assets of the material Canadian subsidiaries of the Canadian Borrower, including 100% of the capital stock of the Canadian Borrower’s material Canadian subsidiaries. Financial covenants. The term loan is not subject to any financial covenants. The revolving credit facility requires the Company, on a consolidated basis, to maintain certain financial covenant ratios. The Company must maintain a consolidated leverage ratio on the last day of the following periods: 5.5 : 1.0 for December 31, 2017 through September 30, 2018; 5.0 : 1.0 for December 31, 2018 through September 30, 2019; 4.5 : 1.0 for December 31, 2019 through September 30, 2020; and 3.75 : 1.0 for December 31, 2020 and each fiscal quarter thereafter. In addition, on the last day of any period of four fiscal quarters, the Company must maintain a consolidated fixed charge coverage ratio of not less than 1.25 : 1.0 . As of September 30, 2018 , we were in compliance with all financial covenants of the credit facility. Restrictive covenants. The credit agreement governing our facility contains various restrictive covenants that, among other things, restrict or limit our ability to (subject to certain negotiated exceptions): incur additional indebtedness; grant liens; make fundamental changes; sell assets; make restricted payments; enter into sales and leasebacks; make investments; prepay certain indebtedness; enter into transactions with affiliates; and enter into restrictive agreements. |
Related-Party Transactions
Related-Party Transactions | 6 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions In connection with the Sumac Fabrication Co. Ltd. ("Sumac") transaction, one of the former Sumac principals (the "Minority Shareholder") retained 25% of the equity interest of the Sumac business unit. This individual is employed by the Company and serves as the general manager of the Sumac business unit. During fiscal 2017, this individual, together with the two other former principals of Sumac, who are not employed by the Company, were paid $5,805 in the aggregate in full satisfaction of the Company's obligations under the $5,905 non-interest bearing performance-based note issued in connection with the Sumac transaction. On April 2, 2018, the Minority Shareholder of our Sumac business unit provided the Company notice that he was exercising his option to sell one-half ( 12.5% ) of his remaining equity interest to the Company, and such sale was completed and effective as of July 20, 2018. The terms of the April 2015 Sumac purchase agreement prescribed a valuation formula for such a sale based on Sumac's financial results for the twelve months ending March 31, 2018. During the six months ended September 30, 2018, the Company paid $5,665 to purchase the 12.5% non-controlling interest. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies At September 30, 2018 , the Company had in place letter of credit guarantees and performance bonds securing performance obligations of the Company. These arrangements totaled approximately $27,463 . Of this amount, $2,410 is secured by cash deposits at the Company’s financial institutions and an additional $4,915 represents a reduction of the available amount of the Company's short-term and long-term revolving lines of credit. Our Indian subsidiary also has $5,004 in customs bonds outstanding to secure the Company's customs and duties obligations in India. We are involved in various legal and administrative proceedings that arise from time to time in the ordinary course of doing business. Some of these proceedings may result in fines, penalties or judgments being assessed against us, which may adversely affect our financial results. In addition, from time to time, we are involved in various disputes, which may or may not be settled prior to legal proceedings being instituted and which may result in losses in excess of accrued liabilities, if any, relating to such unresolved disputes. Expenses related to litigation and other such proceedings or disputes reduce operating income. As of September 30, 2018 , management believes that adequate reserves have been established for any probable and reasonably estimable losses. We do not believe that the outcome of any of these proceedings or disputes would have a significant adverse effect on our financial position, long-term results of operations, or cash flows. It is possible, however, that charges related to these matters could be significant to our results of operations or cash flows in any one accounting period. The Company has no outstanding legal matters outside of matters arising in the ordinary course of business. We can give no assurances we will prevail in any of these matters. |
Stock-Based Compensation Expens
Stock-Based Compensation Expense | 6 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense | Stock-Based Compensation Expense Our board of directors has adopted and the shareholders have approved two stock option award plans. The 2010 Thermon Group Holdings, Inc. Restricted Stock and Stock Option Plan (“2010 Plan”) was approved on July 28, 2010. The 2010 Plan authorized the issuance of 2,767,171 stock options or restricted shares (on a post-stock split basis). On April 8, 2011, the board of directors approved the Thermon Group Holdings, Inc. 2011 Long-Term Incentive Plan (“2011 LTIP”). The 2011 LTIP made available 2,893,341 shares of the Company’s common stock that may be awarded to employees, directors or non-employee contractors as compensation in the form of stock options, restricted stock awards or restricted stock units. At September 30, 2018 , there were 344,487 options outstanding. For the three months ended September 30, 2018 and 2017 , stock compensation expense was $1,085 and $947 , respectively, and $2,089 and $1,732 for the six months ended September 30, 2018 and 2017 , respectively. During the six months ended September 30, 2018 , 89,114 restricted stock units were issued to our employees with an aggregate grant date fair value as determined by the closing price of our stock on the respective grant dates of $2,098 . The awards will be expensed on a straight-line basis over the three -year service period. At each anniversary of the restricted stock units' grant date, a proportionate number of stock units will become vested for the employees and the shares will become issued and outstanding. Additionally, during the six months ended September 30, 2018 , we made a one-time grant to our named executive officers of 10,613 restricted stock units which will cliff vest on March 31, 2020. The total grant date fair value, as determined by the closing price of our common stock on the date of grant, was $250 . The expense will be recognized ratably over the vesting period. We maintain a plan to issue our directors awards of fully vested common stock every three months for a total award over a twelve-month period of approximately $420 . During the three and six months ended September 30, 2018 , 5,240 and 10,452 fully vested common shares, respectively, were issued in the aggregate to our directors. The aggregate grant date fair value as determined by the closing price of our common stock on the grant date was $120 and $235 for the three and six months ended September 30, 2018 , respectively. The fair value of the awards is expensed on each grant date. During the six months ended September 30, 2018 , a target amount of 11,533 performance stock units were issued to certain members of our senior management that had a total grant date fair value of $320 . The performance indicator for these performance stock units is based on the market performance of our stock price, from the date of grant through March 31, 2021, relative to the market price performance of a pre-determined peer group of companies. Since the performance indicator is market-based, we used a Monte-Carlo valuation model to calculate the probable outcome of the performance measure to arrive at the fair value. The requisite service period required to earn the awards is through March 31, 2021. We will expense the fair value of the performance stock units over the service period on a straight-line basis whether or not the stock price performance condition is met. At the end of the performance period, the performance stock units will be evaluated with the requisite number of shares being issued. The possible number of shares that could be issued ranges from zero to 23,066 in the aggregate. Shares that are not awarded at the measurement date will be forfeited. In addition to the market-based performance stock units issued to certain members of senior management, we also granted these individuals, during the six months ended September 30, 2018 , a target amount of 46,032 performance stock units based on the Company's Adjusted EBITDA performance over a three -year period ending March 31, 2021. The total grant date fair value, as determined by the closing price of our common stock on the date of the grant, was $1,084 . At each reporting period, we will estimate how many awards senior management may achieve and adjust our stock compensation expense accordingly. At the end of the performance period, the performance stock units will be evaluated with the requisite number of shares issued. The possible number of shares that could be issued under such performance stock units ranges from zero to 92,064 in the aggregate. Shares that are not awarded after the end of the measurement period will be forfeited. Additionally, during the six months ended September 30, 2018 , we made a one-time grant to our named executive officers of a target amount of 10,613 performance stock units based on the adjusted EBITDA contribution of the acquired THS operations for the period beginning on October 30, 2017, the closing date of the THS acquisition, and ending on March 31, 2020. The total grant date fair value, as determined by the closing price of our common stock on the date of grant, was $250 . The expense will be recognized ratably over the vesting period. At the end of the performance period, the performance stock units will be evaluated with the requisite number of shares issued. The possible number of shares that could be issued under such performance stock units ranges from zero to 15,920 in the aggregate. Shares that are not awarded after the end of the performance period will be forfeited. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | Revenue from Contracts with Customers On April 1, 2018, we adopted Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” ("ASC Topic 606") using the modified retrospective method and applying ASC Topic 606 to all revenue contracts with customers which were not completed as of the date of adoption. Results for reporting periods beginning after April 1, 2018 are presented under ASC Topic 606. In accordance with the modified retrospective approach, prior period amounts were not adjusted and are reported under ASC Topic 605, “Revenue Recognition.” As a result of the adoption, the cumulative impact to our retained earnings at April 1, 2018 was immaterial and such impact primarily related to the accounting for certain engineering services revenue related to projects on existing facilities that will now be deferred, until delivery of product, as a fulfillment obligation. Additionally, revenues recognized under ASC Topic 606 in the interim period and YTD period did not materially differ from revenues that would have been recorded under ASC Topic 605. We expect the impact of the adoption of the new standard to continue to be immaterial to revenues and net income on an ongoing basis. For purposes of calculating the cumulative transition adjustment the amended guidance has been applied to all contracts at the initial application date. The core principle of the new standard is to recognize revenue that reflects the consideration the Company expects to receive for goods or services when or as the promised goods or services are transferred to customers. ASC Topic 606 requires more judgment than previous guidance, as management will need to consider the terms of the contract and all relevant facts and circumstances when applying the revenue recognition standard. Management performs the following five steps when applying the revenue recognition standard: (i) identify each contract with customers, (ii) identify each performance obligation in the contracts with customers, (iii) estimate the transaction price (including any variable consideration), (iv) allocate the transaction price to each performance obligation and (v) recognize revenue as each performance obligation is satisfied. Description of product and service offerings and revenue recognition policies We principally provide a (i) suite of products (heating units, heating cables, tubing bundles and control systems) and (ii) services including design optimization, engineering, installation and maintenance services required to deliver comprehensive solutions to complex projects. The performance obligations associated with our products sales are generally recognized at a point in time. Where products and services are provided together under a time and materials contract, the performance obligations are satisfied over time. We also provide fixed-fee turnkey solutions consisting of products and services under which the related performance obligations and are satisfied over time. In addition, we offer temporary power products that are designed to provide a safe and efficient means of supplying temporary electrical power distribution and lighting at energy infrastructure facilities for new construction and during maintenance and turnaround projects at operating facilities. Revenues associated with the rental of the temporary power products have historically been less than 5% of our total revenues are recognized under ASC Topic 840, "Leases". Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to receive in exchange for transferring such goods or providing such services. We account for a contract when a customer provides us with a firm purchase order or other contract that identifies the goods or services to be provided, the payment terms for those services, and when collectability of the consideration due is probable. Generally, our payment terms do not exceed 30 days. Performance obligations A performance obligation is a promise to provide the customer with a good or service. At contract inception, the Company will assess the goods or services promised in the contract with a customer and shall identify as a performance obligation each promise to transfer to the customer either: (i) a good or service (or a bundle of goods or services) or (ii) a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer. For contracts with multiple performance obligations, standalone selling price is generally readily observable. Revenue from products transferred to customers at a point in time is recognized when obligations under the terms of the contract with our customer are satisfied; generally this occurs with the transfer of control upon shipment. Revenue from products transferred to customers at a point in time accounted for approximately 77.2% and 76.5% of our revenue for the three and six months ended September 30, 2018, respectively. Our revenues that are recognized over time include (i) products and services which are billed on a time and materials basis, and (ii) fixed fee contracts for complex turnkey solutions. Revenue from products and services transferred to customers over time accounted for approximately 22.8% and 23.5% of our revenue for the three and six months ended September 30, 2018, respectively. For our time and materials service contracts, we recognize revenues as the products and services are provided over the term of the contract and have determined that the stated rate for installation services and products is representative of the stand-alone selling price for those services and products. Our turnkey projects, or fixed fee projects, offer our customers a comprehensive solution for heat tracing from the initial planning stage through engineering/design, manufacture, installation and final proof-of-performance and acceptance testing. Turnkey services also include project planning, product supply, system integration, commissioning and on-going maintenance. Turnkey solutions, containing multiple deliverables, are customer specific and do not have an alternative use and present an unconditional right to payment, and thus are treated as a single performance obligation with revenues recognized over time as work progresses. For revenue recognized under fixed fee turnkey contracts, we measure the costs incurred that contribute towards the satisfaction of our performance obligation as a percentage of the total estimated cost of production (the “cost-to-cost method”), and we recognize a proportionate amount of contract revenue, as the cost-to-cost method appropriately depicts performance towards satisfaction of the performance obligation. Changes to the original cost estimates may be required during the life of the contract and such estimates are reviewed on a regular basis. Sales and gross profits are adjusted using the cumulative catch-up method for revisions in estimated contract costs. These reviews have not resulted in significant adjustments to our results of operations. At September 30, 2018 , revenues associated with our open performance obligations totaled $149,599 , representing our combined backlog and deferred revenue. Within this amount, approximately $22,166 will be earned as revenue in excess of one year. We expect to recognize the remaining revenues associated with unsatisfied or partially satisfied performance obligations within twelve months. During the three and six months ended September 30, 2018 , we recognized approximately $13,430 and $33,598 of revenues, respectively, associated with partially satisfied performance obligations as of April 1, 2018. Pricing and sales incentives Pricing is established at or prior to the time of sale with our customers and we record sales at the agreed-upon net selling price. Generally, we do not enter into sales contracts with customers that offer sales discounts or incentives. Optional exemptions, practical expedients and policy elections We expense incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. The Company has elected to treat shipping and handling activities as a cost of fulfillment rather than a separate performance obligation. The Company has elected to exclude all sales and other similar taxes from the transaction price. Accordingly, the Company presents all collections from customers for these taxes on a net basis, rather than having to assess whether the Company is acting as an agent or a principal in each taxing jurisdiction. The Company adopted ASC Topic 606 as of April 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. For contracts that were modified before the effective date, the Company utilized the practical expedient to consider the aggregate effect of all modifications when identifying performance obligations and allocating transaction price. Contract Assets and Liabilities Contract assets and liabilities are presented on our condensed consolidated balance sheet. Contract assets consist of unbilled amounts resulting from sales under long-term contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. We typically receive progress payments on sales under long-term contracts as work progresses, although for some contracts, we may be entitled to receive an advance payment. Contract liabilities consist of advanced payments, billings in excess of costs incurred and deferred revenue. The following table provides information about contract assets and contract liabilities from contracts with customers: Contract Assets Contract Liabilities Balance as of April 1, 2018 $ 16,114 $ (8,143 ) Additions 45,364 (17,500 ) Billed amounts transferred to accounts receivable (39,576 ) — Transfer to revenues as earned — 17,696 Total activity $ 5,788 $ 196 Balance as of September 30, 2018 $ 21,902 $ (7,947 ) The $5,788 increase in contract assets from March 31, 2018 to September 30, 2018 was primarily the result of timing of progress payments under long-term contracts. The majority of our contract liabilities at March 31, 2018 were recognized in revenue as of September 30, 2018 . There were no impairment losses recognized on our contract assets for the three and six months ended September 30, 2018 . Disaggregation of Revenue We disaggregate our revenue from contracts with customers by geographic location, revenues recognized at point in time and revenues recognized over time as we believe these best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Disaggregation of revenues from contracts with customers for the three and six months ended September 30, 2018 and 2017 are as follows: Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Revenues recognized at point in time Revenues recognized over time Total Revenues recognized at point in time Revenues recognized over time Total United States and Latin America $ 17,928 $ 14,725 $ 32,653 $ 12,140 $ 9,178 $ 21,318 Canada 28,960 2,007 30,967 14,830 607 15,437 Europe, Middle East and Africa 13,871 1,693 15,564 14,877 2,570 17,447 Asia-Pacific 8,849 2,121 10,970 5,826 1,603 7,429 Total revenues $ 69,608 $ 20,546 $ 90,154 $ 47,673 $ 13,958 $ 61,631 Six Months Ended September, 2018 Six Months Ended September 30, 2017 Revenues recognized at point in time Revenues recognized over time Total Revenues recognized at point in time Revenues recognized over time Total United States and Latin America $ 32,747 $ 31,535 $ 64,282 $ 22,357 $ 22,512 $ 44,869 Canada 55,806 3,789 59,595 26,714 822 27,536 Europe, Middle East and Africa 33,482 2,885 36,367 23,739 4,325 28,064 Asia-Pacific 14,914 3,898 18,812 9,919 2,979 12,898 Total revenues $ 136,949 $ 42,107 $ 179,056 $ 82,729 $ 30,638 $ 113,367 |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the United States enacted significant changes to U.S. tax law following the passage and signing of H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the “Tax Act”) (previously known as “The Tax Cuts and Jobs Act”). The Tax Act included significant changes to existing tax law, including a permanent reduction to the U.S. federal corporate income tax rate from 35% to 21% , a one-time repatriation tax on deferred foreign income (“Transition Tax”), deductions, credits and business-related exclusions. Our global anticipated annual effective income tax rate before discrete events was 30.5% and 24.8% for the six months ended September 30, 2018 and September 30, 2017, respectively. This estimate is based on a forecast of earnings in all of our jurisdictions. The effective income tax rate represents the weighted average of the estimated tax expense over our global income before tax. The increase in effective income tax rate is due, in part, to the impact of the global intangible low taxed income (“GILTI”) tax, which is a component of the Tax Act. The GILTI tax results in additional tax in the United States related to our foreign operations. Within the calculation of our estimated effective tax rate for the year ended March 31, 2018 as well as for the six months ended September 30, 2018, we have used assumptions and estimates that may change as a result of future guidance, interpretation, and rule-making from the Internal Revenue Service, the SEC, and the Financial Accounting Standards Board and/or various other taxing jurisdictions. The estimate for the year ended March 31, 2018 included a Transition Tax of $5,126 that will be paid over eight years. As of September 30, 2018, our final estimate of the Transition Tax remains pending and will be completed before January 15, 2019 with the completion of the U.S. tax return for the year ended March 31, 2018. |
Segment Information
Segment Information | 6 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We operate in four reportable segments based on four geographic countries or regions in which we operate: (i) United States and Latin America ("US-LAM"), (ii) Canada, (iii) Europe, Middle East and Africa ("EMEA") and (iv) Asia-Pacific ("APAC"). Within our four reportable segments, our core products and services are focused on thermal solutions primarily related to the electrical heat tracing industry. Each of our reportable segments serves a similar class of customers, including engineering, procurement and construction companies, international and regional oil and gas companies, commercial sub-contractors, electrical component distributors and direct sales to existing plant or industrial applications. Profitability within our segments is measured by operating income. Profitability can vary in each of our reportable segments based on the competitive environment within the region, the level of corporate overhead, such as the salaries of our senior executives, and the level of research and development and marketing activities in the region, as well as the mix of products and services. Since March 2015, we acquired THS, Unitemp, IPI and Sumac. THS (formerly known as CCI) develops and produces advanced industrial heating and filtration solutions for industrial and hazardous area applications that closely align with Thermon's core business and serves similar end markets in North America. As such, we have elected to report THS's operations through our US-LAM and Canada reportable segments. Both Unitemp and IPI offer thermal solutions and have been included in our EMEA and US-LAM reportable segments, respectively. Sumac provides temporary power products that differ from our core thermal solutions business. As we anticipate that our full year operating results from Sumac will comprise less than 10% of our total sales and operating income, Sumac has been aggregated in our Canada segment. For purposes of this note, revenue is attributed to individual countries or regions on the basis of the physical location and jurisdiction of organization of the subsidiary that invoices the material and services. Total sales to external customers, inter-segment sales, depreciation expense, amortization expense, income from operations, property, plant and equipment, net and total assets for each of our four reportable segments are as follows: Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Six Months Ended September 30, 2018 Six Months Ended Sales to External Customers: United States and Latin America $ 32,653 $ 21,318 $ 64,282 $ 44,869 Canada 30,967 15,437 59,595 27,536 Europe, Middle East and Africa 15,564 17,447 36,367 28,064 Asia-Pacific 10,970 7,429 18,812 12,898 $ 90,154 $ 61,631 $ 179,056 $ 113,367 Inter-Segment Sales: United States and Latin America $ 13,878 $ 14,309 $ 25,807 $ 23,891 Canada 1,163 1,895 2,216 3,359 Europe, Middle East and Africa 858 362 1,963 723 Asia-Pacific 352 174 497 547 $ 16,251 $ 16,740 $ 30,483 $ 28,520 Depreciation Expense: United States and Latin America $ 1,190 $ 1,078 $ 2,310 $ 2,064 Canada 934 635 1,945 1,240 Europe, Middle East and Africa 108 124 217 214 Asia-Pacific 42 32 82 64 $ 2,274 $ 1,869 $ 4,554 $ 3,582 Amortization Expense: United States and Latin America $ 1,460 $ 1,505 $ 2,965 $ 3,010 Canada 3,424 901 7,073 1,741 Europe, Middle East and Africa 346 350 703 679 Asia-Pacific 266 266 532 532 $ 5,496 $ 3,022 $ 11,273 $ 5,962 Income (loss) from operations: United States and Latin America $ 2,849 $ (1,050 ) $ 5,585 $ (2,097 ) Canada 4,410 6,549 7,695 9,997 Europe, Middle East and Africa 1,055 2,378 3,703 2,232 Asia-Pacific 1,773 845 2,669 1,307 Unallocated: Stock compensation (1,085 ) (947 ) (2,089 ) (1,732 ) Public company costs (330 ) (358 ) (651 ) (732 ) $ 8,672 $ 7,417 $ 16,912 $ 8,975 September 30, 2018 March 31, 2018 Property, plant and equipment, net: United States and Latin America $ 38,016 $ 37,112 Canada 32,483 33,076 Europe, Middle East and Africa 3,253 3,567 Asia-Pacific 675 730 $ 74,427 $ 74,485 Total Assets: United States and Latin America $ 207,741 $ 213,099 Canada 315,496 317,635 Europe, Middle East and Africa 85,936 89,379 Asia-Pacific 41,105 42,364 $ 650,278 $ 662,477 |
Basis of Presentation and Acc_2
Basis of Presentation and Accounting Policy Information (Policies) | 6 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates Generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. While our management has based their assumptions and estimates on the facts and circumstances existing at September 30, 2018 , actual results could differ from those estimates and affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities and the corresponding revenues and expenses as of the date of the financial statements. The operating results for the three and six months ended September 30, 2018 are not necessarily indicative of the results that may be achieved for the fiscal year ending March 31, 2019 . |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue Recognition - In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09 "Revenue from Contracts with Customers" (Topic 606), which amends the existing revenue recognition requirements and guidance. The core principle of the new standard is to recognize revenue that reflects the consideration the Company expects to receive for goods or services when or as the promised goods or services are transferred to customers. Topic 606 requires more judgment than current guidance, as management will now be required to: (i) identify each performance obligation in contracts with customers, (ii) estimate any variable consideration included in the transaction price and (iii) allocate the transaction price to each performance obligation. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company adopted the amended guidance using the modified retrospective method as of April 1, 2018. Please refer to Note 13 "Revenue from Contracts with Customers" for further discussion, including the impact the adoption had on our condensed consolidated financial statements. Financial Instruments- In January 2016, the FASB issued Accounting Standards Update 2016-01 “Financial Instruments-Overall” (Subtopic 825-10), which amends the guidance on the classification and measurement of financial instruments. The amendment requires all equity investments to be measured at fair value with changes in the fair value recognized through earnings. The amendment also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the credit risk when an entity has elected the fair value option. The guidance eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Early adoption is permitted for certain provisions of the accounting standards update. Upon adoption of the standard, an entity will be required to make a cumulative-effect adjustment to retained earnings as of the beginning of such reporting period. We adopted this standard effective April 1, 2018 and it did not have a material impact on our consolidated financial statements. Leases - In February 2016, the FASB issued Accounting Standards Update 2016-02 “Leases” (Topic 842), which provides guidance on the recognition, measurement, presentation and disclosure on leases. Under the standard, substantially all leases will be reported on the balance sheet as right-of-use assets and lease liabilities. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted. We have begun to evaluate the impact of this amended guidance on our financial position, results of operations, disclosures and internal controls but have not yet finalized our determination regarding the expected financial impact of this amended guidance. While we are unable to quantify the impact at this time, we expect the primary impact to our consolidated financial position upon adoption will be the recognition, on a discounted basis, of our minimum commitments under non-cancelable operating leases on our consolidated balance sheets resulting in the recording of right-of-use assets and lease obligations. We intend to complete a comprehensive internal review of all lease obligations by the end of the third quarter of the fiscal year ending March 31, 2019. We plan to adopt Topic 842 in the first quarter of the fiscal year ending March 31, 2020. Statement of Cash Flows - In November 2016, the FASB issued Accounting Standards Update 2016-18, "Restricted Cash" ("Topic 230"), which clarifies how entities should present restricted cash and restricted cash equivalents in the statement of cash flows and requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. Topic 230 became effective for public companies during interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. The Company adopted Topic 230 during the current fiscal year, which resulted in an updated presentation of our statement of cash flows and enhanced disclosures. The following table provides a reconciliation of cash, cash equivalents, restricted cash included in prepaid expenses and other current assets and restricted cash included in other long term assets reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. September 30, 2018 2017 Cash and cash equivalents $ 28,481 $ 83,378 Restricted cash included in prepaid expenses and other current assets 1,759 1,324 Restricted cash included in other long term assets 651 478 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 30,891 $ 85,180 Amounts shown in restricted cash included in prepaid expenses and other current assets and other long term assets represent those required to be set aside by a contractual agreement, which contain cash deposits pledged as collateral on performance bonds and letters of credit. Amounts shown in restricted cash in other long term assets represent such agreements that require a commitment term longer than one year. Financial Instruments- In June 2016, the FASB issued Accounting Standards Update 2016-13 “Financial Instruments-Credit Losses” (Topic 326), which amends the guidance on the impairment of financial instruments. The standard adds an impairment model, referred to as current expected credit loss, which is based on expected losses rather than incurred losses. The standard applies to most debt instruments, trade receivables, lease receivables, reinsurance receivables, financial guarantees and loan commitments. Under the guidance, companies are required to disclose credit quality indicators disaggregated by year of origination for a five-year period. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. We do not anticipate this will have a material impact to our consolidated financial statements. Statement of Cash Flows- In August 2016, the FASB issued Accounting Standards Update 2016-15 “Statement of Cash Flows” (Topic 230), which amends Topic 230 of the accounting standards codification (ASC) to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. The standard addresses eight types of cash flows, some of which we believe could or will impact our financial statements upon adoption, including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, and proceeds from the settlement of insurance claims. Under the guidance, cash payments for debt prepayment or extinguishment costs must be classified as cash outflows from financing activities. Contingent consideration payments that were not made soon after a business combination must be separated and classified in operating and financing activities. Cash payments up to the amount of the contingent consideration liability recognized as of the acquisition dates, including any measurement-period adjustments, should be classified in financing activities, while any excess cash payments should be classified in operating activities. Cash proceeds from the settlement of insurance claims should be classified on the basis of the nature of the loss. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted for all entities. Entities must apply the guidance retrospectively to all periods presented but may be applied prospectively if retrospective application would be impracticable. We adopted this standard prospectively effective April 1, 2018 and it did not have a material impact on our consolidated financial statements. |
Basis of Presentation and Acc_3
Basis of Presentation and Accounting Policy Information Table (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, restricted cash included in prepaid expenses and other current assets and restricted cash included in other long term assets reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. September 30, 2018 2017 Cash and cash equivalents $ 28,481 $ 83,378 Restricted cash included in prepaid expenses and other current assets 1,759 1,324 Restricted cash included in other long term assets 651 478 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 30,891 $ 85,180 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of long-term debt that is not measured at fair value | Information about our short-term debt and long-term debt that is not measured at fair value is as follows: September 30, 2018 March 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Valuation Technique Financial Liabilities Outstanding principal amount of senior secured credit facility $ 220,750 $ 220,750 $ 225,000 $ 225,000 Level 2 - Market Approach Outstanding borrowings from revolving line of credit $ 8,497 $ 8,497 $ — $ — Level 2 - Market Approach |
Schedule of notional amounts of forward contracts held in foreign currencies | As of September 30, 2018 and March 31, 2018 , the notional amounts of forward contracts were as follows: Notional amount of foreign currency forward contracts by currency September 30, 2018 March 31, 2018 Russian Ruble $ 1,159 $ 2,416 Euro — 750 Canadian Dollar 4,000 4,000 South Korean Won 1,500 10,500 Mexican Peso — 200 Australian Dollar 650 850 Total notional amounts $ 7,309 $ 18,716 |
Schedule of fair value of foreign currency forward contracts | The following table represents the fair value of our foreign currency forward contracts: September 30, 2018 March 31, 2018 Fair Value Fair Value Assets Liabilities Assets Liabilities Foreign currency forward contracts $ 53 $ 12 $ 229 $ 25 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combination, Purchase Price Information | The following table details the purchase price of the THS acquisition: Consideration to or on behalf of sellers $ 204,596 Fair value of total consideration transferred 204,596 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Assets acquired: Cash $ 1,534 Accounts receivable 14,351 Inventories 20,085 Other current assets 1,181 Property, plant and equipment 29,464 Identifiable intangible assets 79,002 Goodwill 85,637 Total assets 231,254 Liabilities assumed: Current liabilities 6,832 Other non-current liabilities 500 Non-current deferred tax liability 19,326 Total liabilities 26,658 Total consideration $ 204,596 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | Our provisional estimate of identifiable intangible assets at September 30, 2018 that were related to the THS acquisition, inclusive of currency translation adjustments for the period, consisted of the following: Amortization period Gross Carrying Amount at September 30, 2018 Accumulated Amortization Net Carrying Amount at September 30, 2018 Gross Carrying Amount at March 31, 2018 Accumulated Amortization Net Carrying Amount at March 31, 2018 Products 10 Years $ 64,356 $ 5,899 $ 58,457 $ 64,611 $ 2,692 $ 61,919 Customer relationships 17 Years 11,111 599 10,512 11,155 273 10,882 Backlog 1 Year 3,217 2,949 268 3,230 1,346 1,884 Total $ 78,684 $ 9,447 $ 69,237 $ 78,996 $ 4,311 $ 74,685 |
Earnings and Net Income (Loss)
Earnings and Net Income (Loss) per Common Share (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the denominators used to calculate basic EPS and diluted EPS | The reconciliations of the denominators used to calculate basic and diluted net income per common share for the three and six months ended September 30, 2018 and 2017 , respectively, are as follows: Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Six Months Ended September 30, 2018 Six Months Ended September 30, 2017 Basic net income per common share Net income available to Thermon Group Holdings, Inc. $ 3,227 $ 4,778 $ 6,269 $ 5,257 Weighted-average common shares outstanding 32,571,432 32,408,143 32,536,499 32,412,819 Basic net income per common share $ 0.10 $ 0.15 $ 0.19 $ 0.16 Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Six Months Ended September 30, 2018 Six Months Ended September 30, 2017 Diluted net income per common share Net income available to Thermon Group Holdings, Inc. $ 3,227 $ 4,778 $ 6,269 $ 5,257 Weighted-average common shares outstanding 32,571,432 32,408,143 32,536,499 32,412,819 Common share equivalents: Stock options 219,205 192,179 218,521 197,734 Restricted and performance stock units 312,166 189,199 215,474 106,822 Weighted average shares outstanding – dilutive (1) 33,102,803 32,789,521 32,970,494 32,717,375 Diluted net income per common share $ 0.10 $ 0.15 $ 0.19 $ 0.16 (1) |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consisted of the following: September 30, March 31, Raw materials $ 36,975 $ 31,516 Work in process 6,960 7,186 Finished goods 32,484 27,204 76,419 65,906 Valuation reserves (2,164 ) (2,077 ) Inventories, net $ 74,255 $ 63,829 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill | The carrying amount of goodwill by operating segment as of September 30, 2018 is as follows: United States and Latin America Canada Europe, Middle East and Africa Asia-Pacific Total Balance as of March 31, 2018 $ 52,016 $ 128,767 $ 21,159 $ 8,624 $ 210,566 Adjustments to purchase price allocation — 481 — — 481 Foreign currency translation impact — (464 ) (1,234 ) — (1,698 ) Balance as of September 30, 2018 $ 52,016 $ 128,784 $ 19,925 $ 8,624 $ 209,349 |
Schedule of intangible assets | Our total intangible assets consisted of the following: Gross Carrying Amount at September 30, 2018 Accumulated Amortization Net Carrying Amount at September 30, 2018 Gross Carrying Amount at March 31, 2018 Accumulated Amortization Net Carrying Amount at March 31, 2018 Products $ 64,356 $ 5,899 $ 58,457 $ 64,611 $ 2,719 $ 61,892 Trademarks 45,490 921 44,569 46,156 832 45,324 Developed technology 10,012 4,291 5,721 10,160 4,106 6,054 Customer relationships 112,469 82,749 29,720 113,378 77,646 35,732 Certifications 452 — 452 458 — 458 Other 5,849 5,581 268 5,863 3,889 1,974 Total $ 238,628 $ 99,441 $ 139,187 $ 240,626 $ 89,192 $ 151,434 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accrued current liabilities | Accrued current liabilities consisted of the following: September 30, March 31, Accrued employee compensation and related expenses $ 11,951 $ 16,449 Accrued interest 1,104 1,154 Customer prepayment 320 519 Warranty reserve 300 300 Professional fees 1,695 1,854 Sales tax payable 999 1,546 Other 946 988 Total accrued current liabilities $ 17,315 $ 22,810 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following: September 30, March 31, Variable Rate Term Loan, due October 2024, net of deferred debt issuance costs and debt discounts of $7,263 and $7,967 as of September 30, 2018 and March 31, 2018, respectively. $ 213,487 $ 217,033 Less current portion (2,500 ) (2,500 ) Total long-term debt $ 210,987 $ 214,533 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Information about Contract Assets and Contract Liabilities | The following table provides information about contract assets and contract liabilities from contracts with customers: Contract Assets Contract Liabilities Balance as of April 1, 2018 $ 16,114 $ (8,143 ) Additions 45,364 (17,500 ) Billed amounts transferred to accounts receivable (39,576 ) — Transfer to revenues as earned — 17,696 Total activity $ 5,788 $ 196 Balance as of September 30, 2018 $ 21,902 $ (7,947 ) |
Disaggregation of Revenues | Disaggregation of revenues from contracts with customers for the three and six months ended September 30, 2018 and 2017 are as follows: Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Revenues recognized at point in time Revenues recognized over time Total Revenues recognized at point in time Revenues recognized over time Total United States and Latin America $ 17,928 $ 14,725 $ 32,653 $ 12,140 $ 9,178 $ 21,318 Canada 28,960 2,007 30,967 14,830 607 15,437 Europe, Middle East and Africa 13,871 1,693 15,564 14,877 2,570 17,447 Asia-Pacific 8,849 2,121 10,970 5,826 1,603 7,429 Total revenues $ 69,608 $ 20,546 $ 90,154 $ 47,673 $ 13,958 $ 61,631 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Total sales and operating income classified by major geographic area in which the company operates | Total sales to external customers, inter-segment sales, depreciation expense, amortization expense, income from operations, property, plant and equipment, net and total assets for each of our four reportable segments are as follows: Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Six Months Ended September 30, 2018 Six Months Ended Sales to External Customers: United States and Latin America $ 32,653 $ 21,318 $ 64,282 $ 44,869 Canada 30,967 15,437 59,595 27,536 Europe, Middle East and Africa 15,564 17,447 36,367 28,064 Asia-Pacific 10,970 7,429 18,812 12,898 $ 90,154 $ 61,631 $ 179,056 $ 113,367 Inter-Segment Sales: United States and Latin America $ 13,878 $ 14,309 $ 25,807 $ 23,891 Canada 1,163 1,895 2,216 3,359 Europe, Middle East and Africa 858 362 1,963 723 Asia-Pacific 352 174 497 547 $ 16,251 $ 16,740 $ 30,483 $ 28,520 Depreciation Expense: United States and Latin America $ 1,190 $ 1,078 $ 2,310 $ 2,064 Canada 934 635 1,945 1,240 Europe, Middle East and Africa 108 124 217 214 Asia-Pacific 42 32 82 64 $ 2,274 $ 1,869 $ 4,554 $ 3,582 Amortization Expense: United States and Latin America $ 1,460 $ 1,505 $ 2,965 $ 3,010 Canada 3,424 901 7,073 1,741 Europe, Middle East and Africa 346 350 703 679 Asia-Pacific 266 266 532 532 $ 5,496 $ 3,022 $ 11,273 $ 5,962 Income (loss) from operations: United States and Latin America $ 2,849 $ (1,050 ) $ 5,585 $ (2,097 ) Canada 4,410 6,549 7,695 9,997 Europe, Middle East and Africa 1,055 2,378 3,703 2,232 Asia-Pacific 1,773 845 2,669 1,307 Unallocated: Stock compensation (1,085 ) (947 ) (2,089 ) (1,732 ) Public company costs (330 ) (358 ) (651 ) (732 ) $ 8,672 $ 7,417 $ 16,912 $ 8,975 September 30, 2018 March 31, 2018 Property, plant and equipment, net: United States and Latin America $ 38,016 $ 37,112 Canada 32,483 33,076 Europe, Middle East and Africa 3,253 3,567 Asia-Pacific 675 730 $ 74,427 $ 74,485 Total Assets: United States and Latin America $ 207,741 $ 213,099 Canada 315,496 317,635 Europe, Middle East and Africa 85,936 89,379 Asia-Pacific 41,105 42,364 $ 650,278 $ 662,477 |
Basis of Presentation and Acc_4
Basis of Presentation and Accounting Policy Information (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 30,891 | $ 36,327 | $ 85,180 | $ 44,293 | $ 85,180 |
Increase in income taxes receivable | $ 2,000 | ||||
Cash and Cash Equivalents | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | 28,481 | 83,378 | |||
Prepaid Expenses and Other Current Assets | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | 1,759 | 1,324 | |||
Other Assets | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 651 | $ 478 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Level 2 - Market Approach - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 31, 2018 |
Financial Assets | ||
Certificates of deposits with maturities greater than 90 days, Carrying Value | $ 2,410 | $ 1,022 |
Certificates of deposits with maturities greater than 90 days, Fair Value | 2,410 | 1,022 |
Loans Payable | ||
Financial Liabilities, Long-term debt | ||
Long-term debt, Carrying Value | 220,750 | 225,000 |
Long-term debt, Fair Value | 220,750 | 225,000 |
Revolving credit facility | ||
Financial Liabilities, Long-term debt | ||
Long-term debt, Carrying Value | 8,497 | 0 |
Long-term debt, Fair Value | $ 8,497 | $ 0 |
Fair Value Measurements - Forei
Fair Value Measurements - Foreign Exchange Contracts by Currency (Details) - Foreign Exchange Forward Contracts - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 31, 2018 |
Derivative [Line Items] | ||
Notional amount | $ 7,309 | $ 18,716 |
Russian Ruble | ||
Derivative [Line Items] | ||
Notional amount | 1,159 | 2,416 |
Euro | ||
Derivative [Line Items] | ||
Notional amount | 0 | 750 |
Canada, Dollars | ||
Derivative [Line Items] | ||
Notional amount | 4,000 | 4,000 |
South Korean Won | ||
Derivative [Line Items] | ||
Notional amount | 1,500 | 10,500 |
Mexican Peso | ||
Derivative [Line Items] | ||
Notional amount | 0 | 200 |
Australian Dollar | ||
Derivative [Line Items] | ||
Notional amount | $ 650 | $ 850 |
Fair Value Measurements - For_2
Fair Value Measurements - Foreign Exchange Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Maximum term of forward contracts | 30 days | ||||
Net Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ (339) | $ (135) | $ (263) | $ 0 | |
Foreign Exchange Forward Contracts | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Foreign exchange contract forwards, assets | 53 | 53 | $ 229 | ||
Foreign exchange contract forwards, liabilities | 12 | 12 | $ 25 | ||
Gain (Loss) on Foreign Currency Derivatives Recorded in Earnings, Net | $ (70) | $ (85) | $ 0 | $ 0 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements - Cross Currency Swaps (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |||
Intercompany receivable | $ 89,539,000 | $ 89,539,000 | |
Derivative [Line Items] | |||
Unrealized gain on intercompany note | $ 385,000 | ||
Net gain | 0 | $ 7,000 | |
Cross Currency Swap | |||
Derivative [Line Items] | |||
Loss on long-term derivative contract | (897) | ||
Net gain | $ 249,000 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands | Oct. 30, 2017CAD ($) | Oct. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) |
Business Acquisition [Line Items] | ||||
Weighted average useful life | 10 years 7 months 6 days | |||
Goodwill, working capital adjustment related to acquisition | $ 481 | |||
Thermon Heating Systems Inc. | ||||
Business Acquisition [Line Items] | ||||
Equity interests acquired | 100.00% | 100.00% | ||
Payments to acquire business | $ 262,415 | $ 204,596,000 | 204,596,000 | |
Transaction costs | $ 4,093,000 | 4,093,000 | ||
Operating Segments | ||||
Business Acquisition [Line Items] | ||||
Goodwill, working capital adjustment related to acquisition | 481,000 | |||
Operating Segments | Canada | ||||
Business Acquisition [Line Items] | ||||
Goodwill, working capital adjustment related to acquisition | 481,000 | |||
Operating Segments | Canada | Thermon Heating Systems Inc. | ||||
Business Acquisition [Line Items] | ||||
Goodwill acquired | $ 85,637,000 |
Acquisitions - Purchase Price (
Acquisitions - Purchase Price (Details) - Thermon Heating Systems Inc. $ in Thousands, $ in Thousands | Oct. 30, 2017CAD ($) | Oct. 30, 2017USD ($) | Sep. 30, 2018USD ($) |
Business Acquisition [Line Items] | |||
Consideration to or on behalf of sellers | $ 262,415 | $ 204,596 | $ 204,596 |
Fair value of total consideration transferred | $ 204,596 |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired and Liabilities Assumed (Details) - Thermon Heating Systems Inc. $ in Thousands | Sep. 30, 2018USD ($) |
Business Acquisition [Line Items] | |
Cash | $ 1,534 |
Accounts receivable | 14,351 |
Inventories | 20,085 |
Other current assets | 1,181 |
Property, plant and equipment | 29,464 |
Identifiable intangible assets | 79,002 |
Total assets | 231,254 |
Current liabilities | 6,832 |
Other non-current liabilities | 500 |
Noncurrent deferred tax liability | 19,326 |
Total liabilities | 26,658 |
Total consideration | $ 204,596 |
Acquisitions - Finite-Lived Int
Acquisitions - Finite-Lived Intangible Assets Acquired (Details) - Thermon Heating Systems Inc. - USD ($) $ in Thousands | Oct. 30, 2017 | Sep. 30, 2018 | Mar. 31, 2018 |
Business Acquisition [Line Items] | |||
Gross Carrying Amount | $ 78,684 | $ 78,996 | |
Accumulated Amortization | 9,447 | 4,311 | |
Net Carrying Amount | 69,237 | 74,685 | |
Products | |||
Business Acquisition [Line Items] | |||
Amortization period | 10 years | ||
Gross Carrying Amount | 64,356 | 64,611 | |
Accumulated Amortization | 5,899 | 2,692 | |
Net Carrying Amount | 58,457 | 61,919 | |
Customer relationships | |||
Business Acquisition [Line Items] | |||
Amortization period | 17 years | ||
Gross Carrying Amount | 11,111 | 11,155 | |
Accumulated Amortization | 599 | 273 | |
Net Carrying Amount | 10,512 | 10,882 | |
Backlog | |||
Business Acquisition [Line Items] | |||
Amortization period | 1 year | ||
Gross Carrying Amount | 3,217 | 3,230 | |
Accumulated Amortization | 2,949 | 1,346 | |
Net Carrying Amount | $ 268 | $ 1,884 |
Earnings and Net Income (Loss_2
Earnings and Net Income (Loss) per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic net income (loss) per common share | ||||
Net income | $ 3,227 | $ 4,778 | $ 6,269 | $ 5,257 |
Weighted-average common shares outstanding (in shares) | 32,571,432 | 32,408,143 | 32,536,499 | 32,412,819 |
Basic net income (loss) per common share (in dollars per share) | $ 0.10 | $ 0.15 | $ 0.19 | $ 0.16 |
Diluted net income (loss) per common share | ||||
Net income | $ 3,227 | $ 4,778 | $ 6,269 | $ 5,257 |
Weighted-average common shares outstanding (in shares) | 32,571,432 | 32,408,143 | 32,536,499 | 32,412,819 |
Diluted (in shares) | 33,102,803 | 32,789,521 | 32,970,494 | 32,717,375 |
Diluted net income (loss) per common share (in dollars per share) | $ 0.10 | $ 0.15 | $ 0.19 | $ 0.16 |
Equity Option | ||||
Diluted net income (loss) per common share | ||||
Weighted average number of diluted shares outstanding adjustment (in shares) | 219,205 | 192,179 | 218,521 | 197,734 |
Restricted Stock Units | ||||
Diluted net income (loss) per common share | ||||
Weighted average number of diluted shares outstanding adjustment (in shares) | 312,166 | 189,199 | 215,474 | 106,822 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 36,975 | $ 31,516 |
Work in process | 6,960 | 7,186 |
Finished goods | 32,484 | 27,204 |
Inventories, gross | 76,419 | 65,906 |
Valuation reserves | (2,164) | (2,077) |
Inventories, net | $ 74,255 | $ 63,829 |
Goodwill (Details)
Goodwill (Details) | 6 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill | |
Balance at the beginning of the period | $ 210,566,000 |
Adjustments to purchase price allocation | 481 |
Balance at the end of the period | 209,349,000 |
Operating Segments | |
Goodwill | |
Balance at the beginning of the period | 210,566,000 |
Adjustments to purchase price allocation | 481,000 |
Foreign currency translation impact | (1,698,000) |
Balance at the end of the period | 209,349,000 |
Operating Segments | United States and Latin America | |
Goodwill | |
Balance at the beginning of the period | 52,016,000 |
Adjustments to purchase price allocation | 0 |
Foreign currency translation impact | 0 |
Balance at the end of the period | 52,016,000 |
Operating Segments | Canada | |
Goodwill | |
Balance at the beginning of the period | 128,767,000 |
Adjustments to purchase price allocation | 481,000 |
Foreign currency translation impact | (464,000) |
Balance at the end of the period | 128,784,000 |
Operating Segments | Europe, Middle East and Africa | |
Goodwill | |
Balance at the beginning of the period | 21,159,000 |
Adjustments to purchase price allocation | 0 |
Foreign currency translation impact | (1,234,000) |
Balance at the end of the period | 19,925,000 |
Operating Segments | Asia-Pacific | |
Goodwill | |
Balance at the beginning of the period | 8,624,000 |
Adjustments to purchase price allocation | 0 |
Foreign currency translation impact | 0 |
Balance at the end of the period | $ 8,624,000 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | $ 99,441 | $ 89,192 |
Intangible assets, gross | 238,628 | 240,626 |
Intangible assets, net | 139,187 | 151,434 |
Certifications | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets (excluding goodwill) | 452 | 458 |
Products | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 64,356 | 64,611 |
Finite-lived intangible assets, accumulated amortization | 5,899 | 2,719 |
Finite-lived intangible assets, net carrying amount | 58,457 | 61,892 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 45,490 | 46,156 |
Finite-lived intangible assets, accumulated amortization | 921 | 832 |
Finite-lived intangible assets, net carrying amount | 44,569 | 45,324 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 10,012 | 10,160 |
Finite-lived intangible assets, accumulated amortization | 4,291 | 4,106 |
Finite-lived intangible assets, net carrying amount | 5,721 | 6,054 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 112,469 | 113,378 |
Finite-lived intangible assets, accumulated amortization | 82,749 | 77,646 |
Finite-lived intangible assets, net carrying amount | 29,720 | 35,732 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 5,849 | 5,863 |
Finite-lived intangible assets, accumulated amortization | 5,581 | 3,889 |
Finite-lived intangible assets, net carrying amount | $ 268 | $ 1,974 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued employee compensation and related expenses | $ 11,951 | $ 16,449 |
Employee-related Liabilities, Acquisition Related Expense, Current | 1,104 | 1,154 |
Customer prepayment | 320 | 519 |
Warranty reserve | 300 | 300 |
Professional fees | 1,695 | 1,854 |
Sales tax payable | 999 | 1,546 |
Other | 946 | 988 |
Total accrued current liabilities | $ 17,315 | $ 22,810 |
Short-Term Revolving Lines of C
Short-Term Revolving Lines of Credit (Details) - USD ($) | Sep. 30, 2018 | Mar. 31, 2018 |
Short-Term Revolving Lines of Credit | ||
Outstanding borrowings | $ 8,497,000 | $ 0 |
Netherlands | ||
Short-Term Revolving Lines of Credit | ||
Outstanding borrowings | 0 | |
India | ||
Short-Term Revolving Lines of Credit | ||
Outstanding borrowings | 0 | |
Australia | ||
Short-Term Revolving Lines of Credit | ||
Outstanding borrowings | 0 | |
Revolving credit facility | ||
Short-Term Revolving Lines of Credit | ||
Outstanding borrowings | $ 8,497,000 | $ 0 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Thousands | Dec. 31, 2020 | Oct. 30, 2017CAD ($) | Oct. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018USD ($) | Mar. 31, 2019 | Apr. 01, 2018 | Mar. 31, 2018USD ($) |
Debt Instrument [Line Items] | |||||||||||
Less current portion | $ (2,500,000) | $ (2,500,000) | $ (2,500,000) | ||||||||
Long-term debt, net of current maturities and deferred debt issuance costs and debt discounts of $7,263 and $7,967 as of September 30, 2018 and March 31, 2018, respectively | 210,987,000 | 210,987,000 | 214,533,000 | ||||||||
Debt issuance costs | 7,263,000 | 7,263,000 | 7,967,000 | ||||||||
Debt issuance costs, net | 7,263,000 | 7,263,000 | 7,967,000 | ||||||||
Repayments of long-term debt | 17,790,000 | $ 14,125,000 | |||||||||
Maximum leverage ratio to secure additional borrowing | 4 | 4 | |||||||||
Outstanding borrowings | 8,497,000 | 8,497,000 | 0 | ||||||||
Loans Payable | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, face amount | 5,905,000 | ||||||||||
Revolving credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Outstanding borrowings | $ 8,497,000 | $ 8,497,000 | |||||||||
Interest rate at period end (as a percent) | 4.74% | 4.74% | |||||||||
Capacity available under credit facility | $ 46,587,000 | $ 46,587,000 | |||||||||
Through March 31, 2019 | Loans Payable | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of notes payable | 1,000 | ||||||||||
Revolving credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Outstanding borrowings | 8,497,000 | $ 8,497,000 | 0 | ||||||||
Revolving credit facility | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, face amount | $ 60,000,000 | ||||||||||
Repayments of lines of credit | $ 6,000,000 | ||||||||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 201,900 | ||||||||||
Line of credit facility, commitment fee percentage | 0.50% | 0.50% | |||||||||
Maximum leverage ratio | 5.5 | ||||||||||
Debt covenant, coverage ratio | 1.25 | 1.25 | |||||||||
Revolving credit facility | Base Rate | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.25% | 2.25% | |||||||||
Revolving credit facility | London Interbank Offered Rate (LIBOR) | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.25% | 3.25% | |||||||||
Revolving credit facility | Canadian Base Rate [Member] | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.25% | 2.25% | |||||||||
Revolving credit facility | CDOR | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.25% | 3.25% | |||||||||
Variable Rate Term Loan due October 2024 | Loans Payable | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Variable Rate Term Loans | 213,487,000 | $ 213,487,000 | $ 217,033,000 | ||||||||
Debt issuance costs, net | 9,089,000 | 9,089,000 | |||||||||
Variable Rate Term Loan due April 2019 | Loans Payable | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt issuance costs, net | $ 524,000 | $ 524,000 | |||||||||
Variable Rate Senior Secured Term Loan B | Secured Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, face amount | $ 250,000,000 | ||||||||||
Variable interest rate floor | 1.00% | ||||||||||
Quarterly amortization of debt, percent | 0.25% | ||||||||||
Repayment requirement, percentage of excess cash flow | 50.00% | ||||||||||
Reduced repayment requirement, percentage of excess cash flow | 25.00% | ||||||||||
Additional borrowing capacity | $ 30,000,000 | ||||||||||
Variable Rate Senior Secured Term Loan B | Secured Debt | Subsidiary Stock | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Guarantor obligations, percentage | 100.00% | 100.00% | |||||||||
Variable Rate Senior Secured Term Loan B | Secured Debt | Stock of First Tier Material Foreign Subsidiaries, US Borrower, and US Subsidiary | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Guarantor obligations, percentage | 65.00% | 65.00% | |||||||||
Variable Rate Senior Secured Term Loan B | Base Rate | Secured Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.75% | 2.75% | |||||||||
Variable Rate Senior Secured Term Loan B | London Interbank Offered Rate (LIBOR) | Secured Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.75% | 3.75% | |||||||||
Term Loan A due April 2019 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of long-term debt | $ 70,875,000 | ||||||||||
Thermon Heating Systems Inc. | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt proceeds used as consideration for business acquisition | $ 164,900,000 | ||||||||||
Scenario, Forecast [Member] | Revolving credit facility | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum leverage ratio | 3.75 | 4.5 | 5 | ||||||||
Scenario, Forecast [Member] | Variable Rate Senior Secured Term Loan B | Secured Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Debt Covenant, Maximum Leverage Ratio Requirement For Reduced Repayment | 4 | ||||||||||
Debt Instrument, Debt Covenant, Minimum Leverage Ratio Requirement For Reduced Repayment | 3.5 | ||||||||||
Debt Instrument, Debt Covenant, Minimum Repayment Requirement, Percentage of Excess Cash Flow | 0.00% | ||||||||||
Debt Instrument, Debt Covenant, Maximum Leverage Ratio Requirement For Minimum Repayment | 3.5 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) | Apr. 02, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Apr. 01, 2015 |
Related Party Transaction [Line Items] | ||||
Noncontrolling Interest, ownership by noncontrolling owners (percent) | 12.50% | |||
Payments for Repurchase of Equity | $ 5,665 | |||
SUMAC Former Principal | ||||
Related Party Transaction [Line Items] | ||||
Noncontrolling Interest, ownership by noncontrolling owners (percent) | 25.00% | |||
Non-interest Bearing Performance Based Note | ||||
Related Party Transaction [Line Items] | ||||
Debt Instrument, face amount | $ 5,905,000 | |||
Payments to Related Party | SUMAC Former Principal | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, amounts of transaction | $ 5,805,000 | |||
Sumac Business [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity Method Investment, Ownership Percentage | 12.50% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Totaled arrangements under letter of credit guarantees and performance bonds securing performance obligations | $ 27,463 |
Guarantee obligations secured by cash deposits | 2,410 |
Guarantee obligations represented by a reduction of the available amount of the company's short term and long term revolving lines of credit | 4,915 |
Indian custom bonds outstanding | $ 5,004 |
Stock-Based Compensation Expe_2
Stock-Based Compensation Expense (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 49 Months Ended | |||
Sep. 30, 2018USD ($)shares | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)shares | Jun. 30, 2014plan | Apr. 08, 2011shares | Jul. 28, 2010shares | |
Stock-Based Compensation Expense | ||||||
Number of stock option award plans | plan | 2 | |||||
Options outstanding (in shares) | 344,487 | 344,487 | ||||
Stock compensation expense | $ | $ 1,085 | $ 947 | ||||
Restricted Stock and Stock Option Plan | ||||||
Stock-Based Compensation Expense | ||||||
Maximum number of shares of the company's common stock that may be awarded | 2,767,171 | |||||
2011 Long-term Incentive Plan | ||||||
Stock-Based Compensation Expense | ||||||
Maximum number of shares of the company's common stock that may be awarded | 2,893,341 | |||||
Restricted Stock Units | ||||||
Stock-Based Compensation Expense | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 89,114 | |||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ | $ 2,098 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 3 years | |||||
Common Stock | ||||||
Stock-Based Compensation Expense | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 5,240 | |||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ | $ 120 | |||||
Share-based compensation arrangement by share-based payment award, fair value of shares authorized amount | $ | $ 420 | $ 420 | ||||
Performance Shares | ||||||
Stock-Based Compensation Expense | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 11,533 | |||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ | $ 320 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Fair Value | $ | $ 0 | |||||
Minimum | ||||||
Stock-Based Compensation Expense | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Possible Number of Performance Shares to be Granted | 0 | |||||
Maximum | ||||||
Stock-Based Compensation Expense | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Possible Number of Performance Shares to be Granted | 23,066 | |||||
Management | Performance Shares | ||||||
Stock-Based Compensation Expense | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 46,032 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Fair Value | $ | $ 1,084 | |||||
Management | Minimum | ||||||
Stock-Based Compensation Expense | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Possible Number of Performance Shares to be Granted | 0 | |||||
Management | Maximum | ||||||
Stock-Based Compensation Expense | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Possible Number of Performance Shares to be Granted | 15,920 | |||||
Management | Maximum | Performance Shares | ||||||
Stock-Based Compensation Expense | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Possible Number of Performance Shares to be Granted | 92,064 | |||||
Executive Officer | Performance Shares | ||||||
Stock-Based Compensation Expense | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 10,613 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 90,154 | $ 61,631 | $ 179,056 | $ 113,367 |
Cost of sales | (49,795) | (30,671) | (98,968) | (58,593) |
Increase in contract assets | 5,788 | |||
Revenues recognized at point in time | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 69,608 | 47,673 | $ 136,949 | 82,729 |
Percentage of total revenue | 77.00% | 76.00% | ||
Revenues recognized over time | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 20,546 | $ 13,958 | $ 42,107 | $ 30,638 |
Percentage of total revenue | 23.00% | 24.00% |
Revenue from Contracts with C_4
Revenue from Contracts with Customers Revenue from Contracts with Customers - Contract Assets and Contract Liabilities (Details) $ in Thousands | 6 Months Ended |
Sep. 30, 2018USD ($) | |
Increase (Decrease) In Contract With Customer, Asset [Roll Forward] | |
Additions | $ 45,364 |
Billed amounts transferred to accounts receivable | (39,576) |
Total activity | 5,788 |
Increase (Decrease) In Contract With Customer, Liability [Roll Forward] | |
Balance as of April 1, 2018 | (8,143) |
Additions | (17,500) |
Transfer to revenues as earned | 17,696 |
Total activity | 196 |
Balance as of September 30, 2018 | $ (7,947) |
Revenue from Contracts with C_5
Revenue from Contracts with Customers Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 90,154 | $ 61,631 | $ 179,056 | $ 113,367 |
Revenues recognized at point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 69,608 | 47,673 | 136,949 | 82,729 |
Revenues recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 20,546 | 13,958 | 42,107 | 30,638 |
United States and Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 32,653 | 21,318 | 64,282 | 44,869 |
United States and Latin America | Revenues recognized at point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 17,928 | 12,140 | 32,747 | 22,357 |
United States and Latin America | Revenues recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 14,725 | 9,178 | 31,535 | 22,512 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 30,967 | 15,437 | 59,595 | 27,536 |
Canada | Revenues recognized at point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 28,960 | 14,830 | 55,806 | 26,714 |
Canada | Revenues recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 2,007 | 607 | 3,789 | 822 |
Europe, Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 15,564 | 17,447 | 36,367 | 28,064 |
Europe, Middle East and Africa | Revenues recognized at point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 13,871 | 14,877 | 33,482 | 23,739 |
Europe, Middle East and Africa | Revenues recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,693 | 2,570 | 2,885 | 4,325 |
Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 10,970 | 7,429 | 18,812 | 12,898 |
Asia-Pacific | Revenues recognized at point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 8,849 | 5,826 | 14,914 | 9,919 |
Asia-Pacific | Revenues recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 2,121 | $ 1,603 | $ 3,898 | $ 2,979 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Performance Obligation (Details) | Sep. 30, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 33,598,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 13,430,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 22,166,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 149,599,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Net impact on U.S. deferred tax assets and liabilities (provisional) | $ 6,030 | |||
Effective tax rate before discrete events | 30.50% | 24.80% | ||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Transition Tax For Accumulated Foreign Earnings, Provisional Liability | $ 5 |
Income Taxes - Discrete Items (
Income Taxes - Discrete Items (Details) $ in Thousands | 6 Months Ended |
Sep. 30, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
Transition Tax (provisional) | $ 5,126 |
Net impact on U.S. deferred tax assets and liabilities (provisional) | (6,030) |
Net changes in deferred tax liability associated with anticipated repatriation taxes (provisional) | 1,704 |
Net discrete impacts of the enactment of the Tax Act | $ 800 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)Geographic_Regionsegment | Sep. 30, 2017USD ($) | Mar. 31, 2018USD ($) | |
Sales by geographic area: | |||||
Number of Reportable Segments | segment | 4 | ||||
Number of Operating Segments | Geographic_Region | 4 | ||||
Revenues | $ 90,154 | $ 61,631 | $ 179,056 | $ 113,367 | |
Depreciation | 2,274 | 1,869 | 4,554 | 3,582 | |
Amortization of intangible assets | 5,496 | 3,022 | 11,273 | 5,962 | |
Operating income | |||||
Operating income (loss) | 8,672 | 7,417 | 16,912 | 8,975 | |
Stock compensation expense | 1,085 | 947 | |||
Property, plant and equipment, net | 74,427 | 74,427 | $ 74,485 | ||
Assets | 650,278 | 650,278 | 662,477 | ||
Operating Segments | |||||
Sales by geographic area: | |||||
Revenues | 90,154 | 61,631 | 179,056 | 113,367 | |
Intersegment Eliminations | |||||
Sales by geographic area: | |||||
Revenues | 16,251 | 16,740 | 30,483 | 28,520 | |
Segment Reconciling Items | |||||
Operating income | |||||
Stock compensation expense | (1,085) | (947) | (2,089) | (1,732) | |
Public company costs | (330) | (358) | (651) | (732) | |
United States and Latin America | |||||
Sales by geographic area: | |||||
Depreciation | 1,190 | 1,078 | 2,310 | 2,064 | |
Amortization of intangible assets | 1,460 | 1,505 | 2,965 | 3,010 | |
Operating income | |||||
Operating income (loss) | 2,849 | (1,050) | 5,585 | (2,097) | |
Property, plant and equipment, net | 38,016 | 38,016 | 37,112 | ||
Assets | 207,741 | 207,741 | 213,099 | ||
United States and Latin America | Operating Segments | |||||
Sales by geographic area: | |||||
Revenues | 32,653 | 21,318 | 64,282 | 44,869 | |
United States and Latin America | Intersegment Eliminations | |||||
Sales by geographic area: | |||||
Revenues | 13,878 | 14,309 | 25,807 | 23,891 | |
Canada | |||||
Sales by geographic area: | |||||
Depreciation | 934 | 635 | 1,945 | 1,240 | |
Amortization of intangible assets | 3,424 | 901 | 7,073 | 1,741 | |
Operating income | |||||
Operating income (loss) | 4,410 | 6,549 | 7,695 | 9,997 | |
Property, plant and equipment, net | 32,483 | 32,483 | 33,076 | ||
Assets | 315,496 | 315,496 | 317,635 | ||
Canada | Operating Segments | |||||
Sales by geographic area: | |||||
Revenues | 30,967 | 15,437 | 59,595 | 27,536 | |
Canada | Intersegment Eliminations | |||||
Sales by geographic area: | |||||
Revenues | 1,163 | 1,895 | 2,216 | 3,359 | |
Europe, Middle East and Africa | |||||
Sales by geographic area: | |||||
Depreciation | 108 | 124 | 217 | 214 | |
Amortization of intangible assets | 346 | 350 | 703 | 679 | |
Operating income | |||||
Operating income (loss) | 1,055 | 2,378 | 3,703 | 2,232 | |
Property, plant and equipment, net | 3,253 | 3,253 | 3,567 | ||
Assets | 85,936 | 85,936 | 89,379 | ||
Europe, Middle East and Africa | Operating Segments | |||||
Sales by geographic area: | |||||
Revenues | 15,564 | 17,447 | 36,367 | 28,064 | |
Europe, Middle East and Africa | Intersegment Eliminations | |||||
Sales by geographic area: | |||||
Revenues | 858 | 362 | 1,963 | 723 | |
Asia-Pacific | |||||
Sales by geographic area: | |||||
Depreciation | 42 | 32 | 82 | 64 | |
Amortization of intangible assets | 266 | 266 | 532 | 532 | |
Operating income | |||||
Operating income (loss) | 1,773 | 845 | 2,669 | 1,307 | |
Property, plant and equipment, net | 675 | 675 | 730 | ||
Assets | 41,105 | 41,105 | $ 42,364 | ||
Asia-Pacific | Operating Segments | |||||
Sales by geographic area: | |||||
Revenues | 10,970 | 7,429 | 18,812 | 12,898 | |
Asia-Pacific | Intersegment Eliminations | |||||
Sales by geographic area: | |||||
Revenues | $ 352 | $ 174 | $ 497 | $ 547 | |
Sumac Fabrication Company Limited | |||||
Sales by geographic area: | |||||
Expected sales and operating income as a percentage of total sales and operating income, less than | 10.00% | 10.00% |