Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2020 | Jul. 28, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-37454 | |
Entity Registrant Name | CSW INDUSTRIALS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-2266942 | |
Entity Address, Address Line One | 5420 Lyndon B. Johnson Freeway, Suite 500 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75240 | |
City Area Code | 214 | |
Local Phone Number | 884-3777 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | CSWI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,716,216 | |
Entity Central Index Key | 0001624794 | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||
Revenues, net | $ 90,964 | $ 102,333 |
Cost of revenues | (48,212) | (55,098) |
Gross profit | 42,752 | 47,235 |
Selling, general and administrative expenses | (26,499) | (26,914) |
Operating income | 16,253 | 20,321 |
Interest expense, net | (318) | (501) |
Other expense, net | (307) | (87) |
Income before income taxes | 15,628 | 19,733 |
Provision for income taxes | (3,668) | (4,389) |
Income from continuing operations | 11,960 | 15,344 |
Loss from discontinued operations, net of tax | 0 | (140) |
Net income | $ 11,960 | $ 15,204 |
Basic earnings (loss) per common share: | ||
Continuing operations (USD per share) | $ 0.81 | $ 1.02 |
Discontinued operations (USD per share) | 0 | (0.01) |
Net income (USD per share) | 0.81 | 1.01 |
Diluted earnings (loss) per common share: | ||
Continuing operations (USD per share) | 0.81 | 1.01 |
Discontinued operations (USD per share) | 0 | (0.01) |
Net income (USD per share) | $ 0.81 | $ 1 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 11,960 | $ 15,204 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 1,338 | 258 |
Cash flow hedging activity, net of taxes of $15 and $79, respectively | (55) | (297) |
Pension and other postretirement effects, net of taxes of $1 and $1, respectively | (4) | (4) |
Other comprehensive income (loss) | 1,279 | (43) |
Comprehensive income | $ 13,239 | $ 15,161 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Cash flow hedging activity, taxes | $ 15 | $ 79 |
Pension and other postretirement effects, taxes | $ 1 | $ 1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 19,687 | $ 18,338 |
Accounts receivable, net of allowance for expected credit losses of $894 and $1,170, respectively | 71,490 | 74,880 |
Inventories, net | 59,441 | 53,753 |
Prepaid expenses and other current assets | 2,816 | 3,074 |
Total current assets | 153,434 | 150,045 |
Property, plant and equipment, net of accumulated depreciation of $73,325 and $71,355, respectively | 57,124 | 57,178 |
Goodwill | 92,080 | 91,686 |
Intangible assets, net | 44,777 | 46,185 |
Other assets | 23,942 | 24,151 |
Total assets | 371,357 | 369,245 |
Current liabilities: | ||
Accounts payable | 23,288 | 21,978 |
Accrued and other current liabilities | 30,104 | 36,607 |
Current portion of long-term debt | 561 | 561 |
Total current liabilities | 53,953 | 59,146 |
Long-term debt | 10,197 | 10,337 |
Retirement benefits payable | 1,868 | 1,879 |
Other long-term liabilities | 21,329 | 21,142 |
Total liabilities | 87,347 | 92,504 |
Equity: | ||
Common shares, $0.01 par value, Shares authorized - 50,000, Shares issued - 16,117 and 16,055, respectively | 160 | 159 |
Preferred shares, $0.01 par value, Shares authorized (10,000) and issued (0) | 0 | 0 |
Additional paid-in capital | 50,182 | 48,327 |
Treasury shares, at cost (1,398 and 1,311 shares, respectively) | (81,207) | (75,377) |
Retained earnings | 325,042 | 315,078 |
Accumulated other comprehensive loss | (10,167) | (11,446) |
Total equity | 284,010 | 276,741 |
Total liabilities and equity | $ 371,357 | $ 369,245 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for expected credit losses | $ 894 | $ 1,170 |
Property, plant and equipment, accumulated depreciation | $ 73,325 | $ 71,355 |
Common shares, par value (USD per share) | $ 0.01 | $ 0.01 |
Common shares, authorized (shares) | 50,000,000 | 50,000,000 |
Common shares, issued (shares) | 16,117,000 | 16,055,000 |
Preferred shares, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred shares, authorized (shares) | 10,000,000 | 10,000,000 |
Preferred shares, issued (shares) | 0 | 0 |
Treasury shares, at cost (shares) | 1,398,000 | 1,311,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Adoption of ASC 842 Leases | Common Stock | Treasury Shares | Additional Paid-In Capital | Retained Earnings | Retained EarningsAdoption of ASC 842 Leases | Accumulated Other Comprehensive Loss |
Balance at beginning of period at Mar. 31, 2019 | $ 263,686 | $ (400) | $ 158 | $ (49,964) | $ 46,633 | $ 277,588 | $ (400) | $ (10,729) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation | 1,213 | 1,213 | ||||||
Stock activity under stock plans | (792) | 1 | (793) | |||||
Net income | 15,204 | 15,204 | ||||||
Dividends declared | (2,041) | (2,041) | ||||||
Other comprehensive income (loss), net of tax | (43) | (43) | ||||||
Balance at end of period at Jun. 30, 2019 | 276,827 | 159 | (50,757) | 47,846 | 290,351 | (10,772) | ||
Balance at beginning of period at Mar. 31, 2019 | $ 263,686 | $ (400) | 158 | (49,964) | 46,633 | 277,588 | $ (400) | (10,729) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | |||||||
Balance at end of period at Mar. 31, 2020 | $ 276,741 | 159 | (75,377) | 48,327 | 315,078 | (11,446) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation | 1,328 | 1,328 | ||||||
Stock activity under stock plans | (1,670) | 1 | (1,670) | (1) | ||||
Repurchase of common shares | (7,291) | (7,291) | ||||||
Reissuance of treasury shares | 3,647 | 3,131 | 516 | |||||
Net income | 11,960 | 11,960 | ||||||
Dividends declared | (1,984) | 12 | (1,996) | |||||
Other comprehensive income (loss), net of tax | 1,279 | 1,279 | ||||||
Balance at end of period at Jun. 30, 2020 | $ 284,010 | $ 160 | $ (81,207) | $ 50,182 | $ 325,042 | $ (10,167) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 11,960 | $ 15,204 |
Less: Loss from discontinued operations | 0 | (140) |
Income from continuing operations | 11,960 | 15,344 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 1,877 | 2,319 |
Amortization of intangible and other assets | 1,711 | 1,760 |
Provision for inventory reserves | 854 | 194 |
Provision for doubtful accounts | 312 | 274 |
Share-based and other executive compensation | 1,328 | 1,213 |
Net pension benefit | 40 | (97) |
Net deferred taxes | 422 | (95) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,315 | (4,799) |
Inventories | (6,458) | (2,159) |
Prepaid expenses and other current assets | 471 | 4,627 |
Other assets | (149) | 37 |
Accounts payable and other current liabilities | (1,515) | (8,936) |
Retirement benefits payable and other liabilities | (22) | (17) |
Net cash provided by operating activities, continuing operations | 14,146 | 9,665 |
Net cash used in operating activities, discontinued operations | 0 | (255) |
Net cash provided by operating activities | 14,146 | 9,410 |
Cash flows from investing activities: | ||
Capital expenditures | (1,837) | (2,226) |
Cash paid for acquisitions | (11,500) | |
Net cash used in investing activities, continuing operations | (1,837) | (13,726) |
Net cash provided by investing activities, discontinued operations | 0 | 0 |
Net cash used in investing activities | (1,837) | (13,726) |
Cash flows from financing activities: | ||
Borrowings on line of credit | 10,000 | 7,500 |
Repayments of line of credit and term loan | (10,140) | (17,140) |
Purchase of treasury shares | (9,346) | (793) |
Dividends | (1,985) | (2,028) |
Net cash used in financing activities | (11,471) | (12,461) |
Effect of exchange rate changes on cash and equivalents | 511 | 354 |
Net change in cash and cash equivalents | 1,349 | (16,423) |
Cash and cash equivalents, beginning of period | 18,338 | 26,651 |
Cash and cash equivalents, end of period | $ 19,687 | $ 10,228 |
ORGANIZATION AND OPERATIONS AND
ORGANIZATION AND OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES | 3 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES | ORGANIZATION AND OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES CSW Industrials, Inc. (“CSWI,” “we,” “our” or “us”) is a diversified industrial growth company with well-established, scalable platforms and domain expertise across two business segments: Industrial Products and Specialty Chemicals. Our broad portfolio of leading products provides performance optimizing and life safety solutions to our customers. Our products include mechanical products for heating, ventilation, air conditioning and refrigeration (“HVAC/R”), building products and high-performance specialty lubricants and sealants. Drawing on our innovative and proven technologies, we seek to deliver solutions primarily to our professional end-use customers that place a premium on superior performance and reliability. Our diverse product portfolio includes more than 100 highly respected industrial brands including RectorSeal No. 5®, KOPR-KOTE®, Kats Coatings®, Safe-T-Switch®, Air Sentry®, Deacon®, Leak Freeze® and Greco® . Our products are well-known in the specific industries we serve and have a reputation for high quality and reliability. Markets that we serve include HVAC/R, architecturally-specified building products, plumbing, energy, rail, mining and general industrial markets. In March 2020, the World Health Organization declared the outbreak of a novel coronavirus ("COVID-19") a pandemic. COVID-19 continues to spread throughout the world and has led certain countries or jurisdictions within them to restrict travel, social gatherings and certain types of business activity deemed to be "non-essential," which has created a recessionary environment in the U.S. and around the globe and has led to a decline in demand in many end markets, including several that we serve. Also, in March 2020, as a result of the weakened demand for crude oil resulting from the COVID-19 pandemic, and magnified by political tensions between several large crude oil-producing countries, there was a substantial decline in crude oil prices magnified by significant volatility that has continued to date. Both factors had a negative impact on our revenues in the fiscal quarter ended June 30, 2020, as compared with the same quarter in fiscal year 2020, and are expected to negatively impact our results in the balance of fiscal year 2021. We expect our results of operations and financial condition to continue to be adversely impacted as compared with the prior year through the duration of the pandemic due to its effects on the economy and demand for our products and services. However, we cannot reasonably estimate the magnitude or length of the adverse impact due to continued uncertainty regarding (1) the duration and severity of the COVID-19 pandemic and (2) the extent of the potential short and long-term impact on our facilities and employees, customer demand and availability of materials through supply channels. Basis of Presentation The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020 (“Quarterly Report”) include all revenues, costs, assets and liabilities directly attributable to CSWI and have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of CSWI’s financial position as of June 30, 2020, and the results of operations for the three month periods ended June 30, 2020 and 2019. All adjustments are of a normal, recurring nature. All significant intercompany balances and transactions have been eliminated in consolidation. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in CSWI’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020 (the “Annual Report”). Accounting Policies We have consistently applied the accounting policies described in our Annual Report in preparing these condensed consolidated financial statements. We have not made any changes in significant accounting policies disclosed in the Annual Report, with the exception of the expected credit loss accounting policy described below as a result of adopting the new expected credit loss standard. Current Expected Credit Losses ("CECL") - We record an allowance for credit losses on trade receivables that, when deducted from the gross trade receivables balance, presents the net amount expected to be collected. We estimate the allowance based on an aging schedule and according to historical losses as determined from our billings and collections history. This may be adjusted after consideration of customer-specific factors such as financial difficulties, liquidity issues or insolvency, as well as both current and forecasted macroeconomic conditions as of the reporting date. We adjust the allowance and recognize credit losses in the income statement each period. Trade receivables are written off against the allowance in the period when the receivable is deemed to be uncollectible. Subsequent recoveries of amounts previously written off are reflected as a reduction to periodic credit losses in the income statement. Our allowance for expected credit losses for short-term receivables as of June 30, 2020 was $0.9 million, compared to $1.2 million as of March 31, 2020. The three months activity included $0.3 million for current period adjustments. Accounting Developments Pronouncements Implemented In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, "Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments." The ASU requires, among other things, the use of a new current expected credit loss model in order to determine an allowance for credit losses with respect to financial assets and instruments held. The CECL model requires that we estimate the lifetime of an expected credit loss for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. On April 1, 2020 we adopted the ASU on a prospective basis to determine our allowance for credit losses in accordance with the requirements of Topic 326, and we modified our accounting policy and processes to facilitate this approach. Our primary exposure to financial assets that are within the scope of CECL are trade receivables. Our adoption of ASU No. 2016-13 effective April 1, 2020 did not have a material impact on our condensed consolidated financial condition and results of operations. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement." The amendments of the ASU modify the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosure requirements for assets and liabilities measured at fair value in the statement of financial position or disclosed in the notes to the financial statements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for the removed disclosures and delayed adoption until fiscal year 2020 permitted for the new disclosures. The removed and modified disclosures were adopted on a retrospective basis and the new disclosures were adopted on a prospective basis. Our adoption of ASU No. 2018-13 effective April 1, 2020 did not impact our disclosures. In August 2018, the FASB issued ASU No. 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The ASU addresses how entities should account for costs associated with implementing a cloud computing arrangement that is considered a service contract. Per the amendments of the ASU, implementation costs incurred in a cloud computing arrangement that is a service contract should be accounted for in the same manner as implementation costs incurred to develop or obtain software for internal use as prescribed by guidance in ASC 350-40. The ASU requires that implementation costs incurred in a cloud computing arrangement be capitalized rather than expensed. Further, the ASU specifies the method for the amortization of costs incurred during implementation, and the manner in which the unamortized portion of these capitalized implementation costs should be evaluated for impairment. The ASU also provides guidance on how to present such implementation costs in the financial statements and also creates additional disclosure requirements. The amendments are effective for fiscal years beginning after December 15, 2019. The amendments in this ASU can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Our adoption of ASU No. 2018-15 effective April 1, 2020 did not have an impact on our condensed consolidated financial condition and results of operations. Pronouncements not yet implemented In August 2018, the FASB issued ASU No. 2018-14, "Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans," which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures and add disclosure requirements identified as relevant. The amendments are effective for fiscal years ending after December 15, 2020 and the amendments should be applied retrospectively to all periods presented. We are currently evaluating the impact of ASU No. 2018-14 and we anticipate that our adoption of this ASU will not have a material impact on our disclosures due to the termination of our U.S. pension plan in the prior year. In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes: Simplifying the Accounting for Income Taxes." The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions and adding some requirements regarding franchise (or similar) tax, step-ups in a business combination, treatment of entities not subject to tax and when to apply enacted changes in tax laws. This ASU is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amendments related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments should be applied on a prospective basis. Early adoption is permitted. Our initial assessment of this ASU indicates it will not have a material impact on our consolidated financial condition and results of operations, but our assessment has not been completed. In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This update provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as interbank offered rates and LIBOR. This ASU includes practical expedients for contract modifications due to reference rate reform. Generally, contract modifications related to reference rate reform may be considered an event that does not require remeasurement or reassessment of a previous accounting determination at the modification date. This ASU is effective immediately; however, it is only available through December 31, 2022. We are currently evaluating the potential impact of this ASU on our consolidated financial position and results of operations. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and. Economic Security ("CARES") Act, which, along with earlier issued Internal Revenue Service ("IRS") guidance, contains numerous provisions that may benefit us, including the deferral of certain taxes. The relevant tax implication impacting us is the correction of a technical issue introduced in the Tax Cuts and Jobs Act to provide for fifteen-year useful life and allow bonus depreciation for qualified improvement property. These changes were included in the fixed asset calculations for the tax year ending March 31, 2020, and we amended the tax return for the year ending March 31, 2019 to include this effect. We continue to assess the effect of the CARES Act and ongoing government guidance related to COVID-19 as it is issued. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Petersen Metals On April 2, 2019, we acquired the assets of Petersen Metals, Inc. (“Petersen”), based near Tampa, Florida, for $11.8 million, of which $11.5 million was paid at closing and funded through our revolving credit facility, and the remaining $0.3 million represented a working capital adjustment paid in July 2019. Petersen is a leading designer, manufacturer and installer of architecturally-specified, engineered metal products and railings, including aluminum and stainless steel railings products for interior and exterior applications. The excess of the purchase price over the fair value of the identifiable assets acquired was $6.1 million allocated to goodwill, which will be deductible for income tax purposes. Goodwill represents the value expected to be obtained from enabling geographic, end market and product diversification and expansion as Petersen is a strategic complement to our existing line of architecturally-specified building products. The allocation of the fair value of the net assets acquired included customer lists of $3.2 million and backlog of $0.4 million, as well as accounts receivable, inventory and equipment of $2.2 million, $0.8 million and $0.7 million, respectively, net of current liabilities of $1.5 million. Customer lists are being amortized over 15 years, backlog is amortized over 1.5 years and goodwill is not being amortized. Petersen activity has been included in our Industrial Products segment since the acquisition date. No pro forma information has been provided due to immateriality. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONSDuring the quarter ended December 31, 2017, we commenced a sale process to divest our Coatings business to allow us to focus resources on our core growth platforms. Our Coatings business manufactured specialized industrial coating products including urethanes, epoxies, acrylics and alkyds. As of December 31, 2017, the Coatings business met the held-for-sale criteria under ASC 360, "Property, Plant and Equipment," and accordingly, we classified and accounted for the assets and liabilities of the Coatings business as held-for-sale in the accompanying condensed consolidated balance sheets, and as discontinued operations, net of tax, in the accompanying condensed consolidated statements of income and cash flows. We completed an initial assessment of the assets and liabilities of the Coatings business and recorded a $46.0 million impairment based on our best estimates as of the date of issuance of financial results for the quarter ended December 31, 2017. No adjustments to previously recorded estimates have been made. On July 31, 2018, we consummated a sale of assets related to our Coatings business to an unrelated third party, the terms of which were not disclosed due to immateriality. During the three months ended September 30, 2018, we received an aggregate of $6.9 million for the sale of assets related to our Coatings business in multiple transactions. This resulted in gains on disposal of $6.9 million due to write-downs of long-lived assets in prior periods. On March 17, 2020, we completed the sale of the last remaining real property owned by the Coatings business to an unrelated third party, the terms of which were not disclosed due to immateriality. The sale resulted in proceeds and a gain on disposal of $1.5 million due to write-downs of long-lived assets in prior periods. The last remaining asset of the Coatings business is a long-term lease that expires in March 2027. We were unable to terminate the lease, but we have sub-let the property for the remainder of the lease term. As such, this lease was moved back into continuing operations, effective March 31, 2020, and the related right-of-use ("ROU") assets and lease liabilities were reported as continuing operations as of March 31, 2020. Summarized selected financial information for the Coatings business for the three months ended June 30, 2020 and 2019 is presented in the following table (in thousands): Three Months Ended June 30, 2020 2019 Revenues, net $ — $ — Loss from discontinued operations before income taxes — (154) Income tax benefit — 14 Loss from discontinued operations, net $ — $ (140) |
INVENTORIES
INVENTORIES | 3 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consist of the following (in thousands): June 30, 2020 March 31, 2020 Raw materials and supplies $ 24,145 $ 20,935 Work in process 7,248 6,076 Finished goods 35,858 33,771 Total inventories 67,251 60,782 Less: LIFO reserve (4,816) (4,816) Less: Obsolescence reserve (2,994) (2,213) Inventories, net $ 59,441 $ 53,753 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The changes in the carrying amount of goodwill for the three months ended June 30, 2020 and March 31, 2020 were as follows (in thousands): Industrial Products Specialty Total Balance at March 31, 2020 $ 60,123 $ 31,563 $ 91,686 Currency translation 394 — 394 Balance at June 30, 2020 $ 60,517 $ 31,563 $ 92,080 The following table provides information about our intangible assets (in thousands, except years): June 30, 2020 March 31, 2020 Wtd Avg Life (Years) Ending Gross Amount Accumulated Amortization Ending Gross Amount Accumulated Amortization Finite-lived intangible assets: Patents 11 $ 9,634 $ (7,136) $ 9,635 $ (6,935) Customer lists and amortized trademarks 12 63,123 (34,360) 62,806 (33,098) Non-compete agreements 5 1,676 (1,635) 1,653 (1,494) Other 8 5,223 (2,795) 5,219 (2,628) $ 79,656 $ (45,926) $ 79,313 $ (44,155) Trade names and trademarks not being amortized: $ 11,047 $ — $ 11,027 $ — Amortization expenses for the three months ended June 30, 2020 and June 30, 2019 were $1.7 million and $1.7 million, respectively. The following table shows the estimated future amortization for intangible assets, as of June 30, 2020, for the remainder of the current fiscal year and the next four fiscal years ending March 31 (in thousands): 2021 $ 4,806 2022 5,525 2023 4,585 2024 3,831 2025 3,108 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Refer to Note 6 to our consolidated financial statements included in our Annual Report for a description of the 2015 Equity and Incentive Compensation Plan (the "2015 Plan"). As of June 30, 2020, 711,942 shares were available for issuance under the 2015 Plan. We recorded share-based compensation expense as follows for the three months ended June 30, 2020 and 2019 (in thousands): Three Months Ended June 30, 2020 2019 Share-based compensation expense $ 1,328 $ 1,213 Related income tax benefit (319) (291) Net share-based compensation expense $ 1,009 $ 922 Stock option activity was as follows: Three Months Ended June 30, 2020 Number of Shares Weighted Average Price Remaining Contractual Life (Years) Aggregate Intrinsic Value (in Millions) Outstanding at April 1, 2020 115,858 $ 25.30 Outstanding at June 30, 2020 115,858 $ 25.30 3.9 $ 5.1 Exercisable at June 30, 2020 115,858 $ 25.30 3.9 $ 5.1 All compensation costs related to stock options were recognized prior to April 1, 2019. No options were granted or vested during the three months ended June 30, 2020 and 2019. Restricted share activity was as follows: Three Months Ended June 30, 2020 Number of Shares Weighted Average Grant Date Fair Value Outstanding at April 1, 2020: 202,466 $ 60.78 Granted 67,580 73.81 Vested (70,861) 49.70 Canceled (8,976) 70.51 Outstanding at June 30, 2020 190,209 $ 64.85 During the restriction period, the holders of restricted shares are entitled to vote and receive dividends. Unvested restricted shares outstanding as of June 30, 2020 and March 31, 2020 included 90,012 and 93,249 shares (at target), respectively, with performance-based vesting provisions, and vesting ranges from 0%-200% based on pre-defined performance targets with market conditions. Performance-based awards accrue dividend equivalents, which are settled upon (and to the extent of) vesting of the underlying award, but do not have the right to vote until vested. Performance-based awards are earned upon the achievement of objective performance targets and are payable in common shares. Compensation expense is calculated based on the fair market value as determined by a Monte Carlo simulation and is recognized over a 36-month cliff vesting period. We granted 26,966 and 31,594 awards with performance-based vesting provisions during the three months ended June 30, 2020 and 2019, respectively, with a vesting range of 0-200%. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Debt consists of the following (in thousands): June 30, 2020 March 31, 2020 Revolving Credit Facility, interest rate of 1.41% and 2.24%, respectively $ — $ — Whitmore Term Loan, interest rate of 2.16% and 2.99%, respectively 10,758 10,898 Total debt 10,758 10,898 Less: Current portion (561) (561) Long-term debt $ 10,197 $ 10,337 Revolving Credit Facility As discussed in Note 8 to our consolidated financial statements included in our Annual Report, we have a five-year, $250.0 million revolving credit facility agreement, with an additional $50.0 million accordion feature, which matures on September 15, 2022 (the “Revolving Credit Facility”). Borrowings under this facility bear interest at a rate of prime plus 0.25% or London Interbank Offered Rate ("LIBOR") plus 1.25%, which may be adjusted based on our leverage ratio. We pay a commitment fee of 0.15% for the unutilized portion of the Revolving Credit Facility. Interest and commitment fees are payable at least quarterly and the outstanding principal balance is due at the maturity date. The Revolving Credit Facility is secured by substantially all of our domestic assets. During the three months ended June 30, 2020, we borrowed $10.0 million and repaid $10.0 million under this facility. As of June 30, 2020 and March 31, 2020, we had no outstanding balance, which resulted in borrowing capacity of $300.0 million, inclusive of the accordion feature. Covenant compliance is tested quarterly, and we were in compliance with all covenants as of June 30, 2020. Whitmore Term Loan As of June 30, 2020, Whitmore Manufacturing (one of our wholly-owned operating subsidiaries) had a secured term loan ("Whitmore Term Loan") outstanding related to a warehouse and corporate office building and the remodel of an existing |
LEASES
LEASES | 3 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
LEASES | LEASES We have operating leases for manufacturing facilities, offices, warehouses, vehicles and certain equipment. Our leases have remaining lease terms of 1 year to 9 years, some of which include escalation clauses and/or options to extend or terminate the leases. We do not currently have any financing lease arrangements. Three Months Ended June 30, (in thousands) 2020 2019 Components of Operating Lease Expenses Operating lease expense (a) $ 845 $ 904 Short-term lease expense 55 — Total operating lease expense $ 900 $ 904 (a) Included in cost of revenues and selling, general and administrative expense (in thousands) June 30, 2020 March 31, 2020 Operating Lease Assets and Liabilities ROU assets, net (b) $ 15,690 $ 16,383 Short-term lease liabilities (c) $ 3,104 $ 3,056 Long-term lease liabilities recorded (c) 14,444 15,179 Total operating lease liabilities $ 17,548 $ 18,235 (b) Included in other assets, net (c) Included in accrued and other current liabilities and other long-term liabilities Three Months Ended June 30, (in thousands) 2020 2019 Supplemental Cash Flow Cash paid for amounts included in the measurement of operating lease liabilities (a) $ 933 $ 873 ROU assets obtained in exchange for new operating lease obligations 59 605 (a) Included in our condensed consolidated statement of cash flows, operating activities in accounts payable and other current liabilities Other Information for Operating Leases Weighted average remaining lease term (in years) 6.01 6.40 Weighted average discount rate (percent) 4.3 % 4.3 % Maturities of operating lease liabilities were as follows: (in thousands) Year Ending March 31, 2021 (excluding the three months ended June 30, 2020) $ 2,832 2022 3,779 2023 3,074 2024 2,828 2025 2,548 Thereafter 4,963 Total lease liabilities 20,024 Less: Imputed interest (2,476) Present value of lease liabilities $ 17,548 |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING | 3 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING | DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING We have an interest rate swap agreement to hedge exposure to floating interest rates on a certain portion of our debt. As of June 30, 2020 and March 31, 2020, we had $10.8 million and $10.9 million, respectively, of notional amount outstanding designated as an interest rate swap with third parties. The interest rate swap is highly effective. At June 30, 2020, the maximum remaining length of the interest rate swap contract was approximately 9.1 years. The fair value of the interest rate swap designated as a hedging instrument is summarized below (in thousands): June 30, 2020 March 31, 2020 Current derivative liabilities $ 290 $ 271 Non-current derivative liabilities 1,542 1,492 The impact of changes in fair value of the interest rate swap is included in Note 12. Current and non-current derivative assets are reported in our condensed consolidated balance sheets in prepaid expenses and other current assets and other assets, respectively. Current and non-current derivative liabilities are reported in our condensed consolidated balance sheets in accrued and other current liabilities and other long-term liabilities, respectively. We are exposed to risk from credit-related losses resulting from nonperformance by counterparties to our financial instruments. We perform credit evaluation of our counterparties and expect all counterparties to meet their obligations. We have not experienced credit losses from our counterparties. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the reconciliation of the numerator and the denominator of basic and diluted earnings per share for the three months ended June 30, 2020 and 2019 (amounts in thousands, except per share data): Three Months Ended 2020 2019 Income from continuing operations $ 11,960 $ 15,344 Loss from discontinued operations — (140) Net income $ 11,960 $ 15,204 Weighted average shares: Common stock 14,603 14,909 Participating securities 104 115 Denominator for basic earnings per common share 14,707 15,024 Potentially dilutive securities 101 169 Denominator for diluted earnings per common share 14,808 15,193 Basic earnings (loss) per common share: Continuing operations $ 0.81 $ 1.02 Discontinued operations — (0.01) Net income $ 0.81 $ 1.01 Diluted earnings (loss) per common share: Continuing operations $ 0.81 $ 1.01 Discontinued operations — (0.01) Net income $ 0.81 $ 1.00 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 3 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Share Repurchase Program On November 7, 2018, we announced that our Board of Directors authorized a program to repurchase up to $75.0 million of our common stock over a two-year period. These shares may be repurchased from time to time in the open market or in privately negotiated transactions. Repurchases will be made from time to time at our discretion, based on ongoing assessments of the capital needs of the business, the market price of our common stock and general market conditions. The program may be limited or terminated at any time at our discretion without notice. We repurchased 115,151 and 0 shares under the program during the three months ended June 30, 2020 and 2019, respectively, for an aggregate amount of $7.3 million and $0, respectively. As of June 30, 2020, a total of 740,137 shares had been repurchased for an aggregate amount of $46.0 million. Dividends In April 2019, we commenced a quarterly dividend program at a quarterly rate of $0.135 per share. Total dividends of $2.0 million and $2.0 million were paid during the three months ended June 30, 2020 and 2019, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTSThe fair value of the interest rate swap contract (as discussed in Note 9) is determined using Level 2 inputs. The carrying value of our debt (discussed in Note 7) approximates fair value as it bears interest at floating rates. The carrying amounts of other financial instruments (i.e., cash and cash equivalents, accounts receivable, net, accounts payable) approximate their fair values at June 30, 2020 and March 31, 2020 due to their short-term nature. |
RETIREMENT PLANS
RETIREMENT PLANS | 3 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS | RETIREMENT PLANS Refer to Note 14 to our consolidated financial statements included in our Annual Report for a description of our retirement and post-retirement benefits. As disclosed in our Annual Report, during the fiscal quarter ended September 30, 2019, we terminated our qualified U.S. pension plan (the "Qualified Plan") and recognized an overall termination charge of $6.5 million recorded in other (expense) income, net for the fiscal year ended March 31, 2020. The following tables set forth the combined net pension benefit recognized in our condensed consolidated financial statements for all plans (in thousands): Three Months Ended 2020 2019 Service cost, benefits earned during the period $ 10 $ 18 Interest cost on projected benefit obligation 36 523 Expected return on assets (24) (653) Amortization of net actuarial loss 18 12 Net pension benefit $ 40 $ (100) The components of net periodic cost for retirement and postretirement benefits, other than service costs, are included in other expense, net in our condensed consolidated statements of income. Employee Stock Ownership Plan ("ESOP") - During the quarters ended June 30, 2020 and 2019, we contributed $3.7 million of treasury shares and $3.2 million of cash, respectively, to our ESOP, based on performance in the prior year. |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIESFrom time to time, we are involved in various claims and legal actions that arise in the ordinary course of business. There are no matters pending that we currently believe have a reasonable possibility of having a material impact to our business, consolidated financial position, results of operations or cash flows. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For the three months ended June 30, 2020, we earned $15.6 million from continuing operations before taxes and provided for income taxes of $3.7 million, resulting in an effective tax rate of 23.5%. The provision for income taxes differed from the statutory rate for the three months ended June 30, 2020 primarily due to state income taxes, tax credits, excess tax deductions related to stock compensation and a change in indefinite reinvestment assertion related to the investment in a foreign subsidiary. For the three months ended June 30, 2019, we earned $19.7 million from continuing operations before taxes and provided for income taxes of $4.4 million, resulting in an effective tax rate of 22.2%. The provision for income taxes differed from the statutory rate for the three months ended June 30, 2019 primarily due to state income taxes, tax credits and excess tax deductions related to stock compensation. We are currently under examination by the state of Illinois for the fiscal years ended March 31, 2018 and 2017. We have not been notified of any potential adjustments. |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
OTHER COMPREHENSIVE INCOME (LOSS) | OTHER COMPREHENSIVE INCOME (LOSS) The following table provides an analysis of the changes in accumulated other comprehensive loss (in thousands): Three Months Ended June 30, 2020 2019 Currency translation adjustments: Balance at beginning of period $ (9,185) $ (6,869) Adjustments for foreign currency translation 1,338 258 Balance at end of period $ (7,847) $ (6,611) Interest rate swaps: Balance at beginning of period $ (1,390) $ (394) Unrealized losses, net of taxes of $14 and $81, respectively (a) (51) (306) Reclassification of losses (income) included in interest expense, net, net of taxes of $1 and $(2), respectively (4) 9 Other comprehensive loss (55) (297) Balance at end of period $ (1,445) $ (691) Defined benefit plans: Balance at beginning of period $ (871) $ (3,466) Amortization of net losses, net of taxes of $1 and $1, respectively (b) (4) (4) Balance at end of period $ (875) $ (3,470) (a) Unrealized gains (losses) are reclassified to earnings as underlying cash interest payments are made. We expect to recognize a loss of $0.3 million, net of deferred taxes, over the next twelve months related to designated cash flow hedges based on their fair values at June 30, 2020. (b) Amortization of actuarial losses out of accumulated comprehensive loss are included in the computation of net periodic pension expense. See Note 13 for additional information. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Refer to Note 19 to our consolidated financial statements included in our Annual Report for a description of our disaggregation of revenues. Disaggregation of revenues reconciled to our reportable segments is as follows (in thousands): Three Months Ended June 30, 2020 Industrial Products Specialty Chemicals Total Build-to-order $ 20,543 $ — $ 20,543 Book-and-ship 40,696 29,725 70,421 Net revenues $ 61,239 $ 29,725 $ 90,964 Three Months Ended June 30, 2019 Industrial Products Specialty Chemicals Total Build-to-order $ 19,201 $ — $ 19,201 Book-and-ship 44,151 38,981 83,132 Net revenues $ 63,352 $ 38,981 $ 102,333 Contract liabilities, which are included in accrued and other current liabilities in our condensed consolidated balance sheets were as follows (in thousands): Balance at April 1, 2020: $ 2,892 Revenue recognized during the period (927) New contracts and revenue added to existing contracts during the period 1,149 Balance at June 30, 2020 $ 3,114 |
SEGMENTS
SEGMENTS | 3 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTS As discussed in Note 20 to our consolidated financial statements in our Annual Report, we conduct our operations through two business segments based on type of product and how we manage the business: Industrial Products and Specialty Chemicals. Three Months Ended June 30, 2020: (in thousands) Industrial Products Specialty Chemicals Subtotal - Reportable Segments Eliminations and Other Total Revenues, net $ 61,239 $ 29,725 $ 90,964 $ — $ 90,964 Operating income 16,307 3,946 20,253 (4,000) 16,253 Three Months Ended June 30, 2019: (in thousands) Industrial Products Specialty Chemicals Subtotal - Reportable Segments Eliminations and Other Total Revenues, net $ 63,352 $ 38,981 $ 102,333 $ — $ 102,333 Operating income 17,042 6,623 23,665 (3,344) 20,321 |
ORGANIZATION AND OPERATIONS A_2
ORGANIZATION AND OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020 (“Quarterly Report”) include all revenues, costs, assets and liabilities directly attributable to CSWI and have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of CSWI’s financial position as of June 30, 2020, and the results of operations for the three month periods ended June 30, 2020 and 2019. All adjustments are of a normal, recurring nature. All significant intercompany balances and transactions have been eliminated in consolidation. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in CSWI’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020 (the “Annual Report”). |
Current Expected Credit Losses (CECL) | Current Expected Credit Losses ("CECL") - We record an allowance for credit losses on trade receivables that, when deducted from the gross trade receivables balance, presents the net amount expected to be collected. We estimate the allowance based on an aging schedule and according to historical losses as determined from our billings and collections history. This may be adjusted after consideration of customer-specific factors such as financial difficulties, liquidity issues or insolvency, as well as both current and forecasted macroeconomic conditions as of the reporting date. We adjust the allowance and recognize credit losses in the income statement each period. Trade receivables are written off against the allowance in the period when the receivable is deemed to be uncollectible. Subsequent recoveries of amounts previously written off are reflected as a reduction to periodic credit losses in the income statement. |
Accounting Developments | Accounting Developments Pronouncements Implemented In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, "Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments." The ASU requires, among other things, the use of a new current expected credit loss model in order to determine an allowance for credit losses with respect to financial assets and instruments held. The CECL model requires that we estimate the lifetime of an expected credit loss for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. On April 1, 2020 we adopted the ASU on a prospective basis to determine our allowance for credit losses in accordance with the requirements of Topic 326, and we modified our accounting policy and processes to facilitate this approach. Our primary exposure to financial assets that are within the scope of CECL are trade receivables. Our adoption of ASU No. 2016-13 effective April 1, 2020 did not have a material impact on our condensed consolidated financial condition and results of operations. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement." The amendments of the ASU modify the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosure requirements for assets and liabilities measured at fair value in the statement of financial position or disclosed in the notes to the financial statements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for the removed disclosures and delayed adoption until fiscal year 2020 permitted for the new disclosures. The removed and modified disclosures were adopted on a retrospective basis and the new disclosures were adopted on a prospective basis. Our adoption of ASU No. 2018-13 effective April 1, 2020 did not impact our disclosures. In August 2018, the FASB issued ASU No. 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The ASU addresses how entities should account for costs associated with implementing a cloud computing arrangement that is considered a service contract. Per the amendments of the ASU, implementation costs incurred in a cloud computing arrangement that is a service contract should be accounted for in the same manner as implementation costs incurred to develop or obtain software for internal use as prescribed by guidance in ASC 350-40. The ASU requires that implementation costs incurred in a cloud computing arrangement be capitalized rather than expensed. Further, the ASU specifies the method for the amortization of costs incurred during implementation, and the manner in which the unamortized portion of these capitalized implementation costs should be evaluated for impairment. The ASU also provides guidance on how to present such implementation costs in the financial statements and also creates additional disclosure requirements. The amendments are effective for fiscal years beginning after December 15, 2019. The amendments in this ASU can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Our adoption of ASU No. 2018-15 effective April 1, 2020 did not have an impact on our condensed consolidated financial condition and results of operations. Pronouncements not yet implemented In August 2018, the FASB issued ASU No. 2018-14, "Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans," which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures and add disclosure requirements identified as relevant. The amendments are effective for fiscal years ending after December 15, 2020 and the amendments should be applied retrospectively to all periods presented. We are currently evaluating the impact of ASU No. 2018-14 and we anticipate that our adoption of this ASU will not have a material impact on our disclosures due to the termination of our U.S. pension plan in the prior year. In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes: Simplifying the Accounting for Income Taxes." The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions and adding some requirements regarding franchise (or similar) tax, step-ups in a business combination, treatment of entities not subject to tax and when to apply enacted changes in tax laws. This ASU is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amendments related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments should be applied on a prospective basis. Early adoption is permitted. Our initial assessment of this ASU indicates it will not have a material impact on our consolidated financial condition and results of operations, but our assessment has not been completed. In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This update provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as interbank offered rates and LIBOR. This ASU includes practical expedients for contract modifications due to reference rate reform. Generally, contract modifications related to reference rate reform may be considered an event that does not require remeasurement or reassessment of a previous accounting determination at the modification date. This ASU is effective immediately; however, it is only available through December 31, 2022. We are currently evaluating the potential impact of this ASU on our consolidated financial position and results of operations. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and. Economic Security ("CARES") Act, which, along with earlier issued Internal Revenue Service ("IRS") guidance, contains numerous provisions that may benefit us, including the deferral of certain taxes. The relevant tax implication impacting us is the correction of a technical issue introduced in the Tax Cuts and Jobs Act to provide for fifteen-year useful life and allow bonus depreciation for qualified improvement property. These changes were included in the fixed asset calculations for the tax year ending March 31, 2020, and we amended the tax return for the year ending March 31, 2019 to include this effect. We continue to assess the effect of the CARES Act and ongoing government guidance related to COVID-19 as it is issued. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | Summarized selected financial information for the Coatings business for the three months ended June 30, 2020 and 2019 is presented in the following table (in thousands): Three Months Ended June 30, 2020 2019 Revenues, net $ — $ — Loss from discontinued operations before income taxes — (154) Income tax benefit — 14 Loss from discontinued operations, net $ — $ (140) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following (in thousands): June 30, 2020 March 31, 2020 Raw materials and supplies $ 24,145 $ 20,935 Work in process 7,248 6,076 Finished goods 35,858 33,771 Total inventories 67,251 60,782 Less: LIFO reserve (4,816) (4,816) Less: Obsolescence reserve (2,994) (2,213) Inventories, net $ 59,441 $ 53,753 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the three months ended June 30, 2020 and March 31, 2020 were as follows (in thousands): Industrial Products Specialty Total Balance at March 31, 2020 $ 60,123 $ 31,563 $ 91,686 Currency translation 394 — 394 Balance at June 30, 2020 $ 60,517 $ 31,563 $ 92,080 |
Schedule of Intangible Assets | The following table provides information about our intangible assets (in thousands, except years): June 30, 2020 March 31, 2020 Wtd Avg Life (Years) Ending Gross Amount Accumulated Amortization Ending Gross Amount Accumulated Amortization Finite-lived intangible assets: Patents 11 $ 9,634 $ (7,136) $ 9,635 $ (6,935) Customer lists and amortized trademarks 12 63,123 (34,360) 62,806 (33,098) Non-compete agreements 5 1,676 (1,635) 1,653 (1,494) Other 8 5,223 (2,795) 5,219 (2,628) $ 79,656 $ (45,926) $ 79,313 $ (44,155) Trade names and trademarks not being amortized: $ 11,047 $ — $ 11,027 $ — |
Schedule of Estimated Future Amortization for Intangible Assets | The following table shows the estimated future amortization for intangible assets, as of June 30, 2020, for the remainder of the current fiscal year and the next four fiscal years ending March 31 (in thousands): 2021 $ 4,806 2022 5,525 2023 4,585 2024 3,831 2025 3,108 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-Based Compensation Expense | We recorded share-based compensation expense as follows for the three months ended June 30, 2020 and 2019 (in thousands): Three Months Ended June 30, 2020 2019 Share-based compensation expense $ 1,328 $ 1,213 Related income tax benefit (319) (291) Net share-based compensation expense $ 1,009 $ 922 |
Schedule of Stock Options Activity | Stock option activity was as follows: Three Months Ended June 30, 2020 Number of Shares Weighted Average Price Remaining Contractual Life (Years) Aggregate Intrinsic Value (in Millions) Outstanding at April 1, 2020 115,858 $ 25.30 Outstanding at June 30, 2020 115,858 $ 25.30 3.9 $ 5.1 Exercisable at June 30, 2020 115,858 $ 25.30 3.9 $ 5.1 |
Schedule of Restricted Share Activity | Restricted share activity was as follows: Three Months Ended June 30, 2020 Number of Shares Weighted Average Grant Date Fair Value Outstanding at April 1, 2020: 202,466 $ 60.78 Granted 67,580 73.81 Vested (70,861) 49.70 Canceled (8,976) 70.51 Outstanding at June 30, 2020 190,209 $ 64.85 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Debt consists of the following (in thousands): June 30, 2020 March 31, 2020 Revolving Credit Facility, interest rate of 1.41% and 2.24%, respectively $ — $ — Whitmore Term Loan, interest rate of 2.16% and 2.99%, respectively 10,758 10,898 Total debt 10,758 10,898 Less: Current portion (561) (561) Long-term debt $ 10,197 $ 10,337 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Components of Operating Lease Expense, Operating Lease Assets and Liabilities, Supplemental Cash Flow, and Other Information | Three Months Ended June 30, (in thousands) 2020 2019 Components of Operating Lease Expenses Operating lease expense (a) $ 845 $ 904 Short-term lease expense 55 — Total operating lease expense $ 900 $ 904 (a) Included in cost of revenues and selling, general and administrative expense (in thousands) June 30, 2020 March 31, 2020 Operating Lease Assets and Liabilities ROU assets, net (b) $ 15,690 $ 16,383 Short-term lease liabilities (c) $ 3,104 $ 3,056 Long-term lease liabilities recorded (c) 14,444 15,179 Total operating lease liabilities $ 17,548 $ 18,235 (b) Included in other assets, net (c) Included in accrued and other current liabilities and other long-term liabilities Three Months Ended June 30, (in thousands) 2020 2019 Supplemental Cash Flow Cash paid for amounts included in the measurement of operating lease liabilities (a) $ 933 $ 873 ROU assets obtained in exchange for new operating lease obligations 59 605 (a) Included in our condensed consolidated statement of cash flows, operating activities in accounts payable and other current liabilities Other Information for Operating Leases Weighted average remaining lease term (in years) 6.01 6.40 Weighted average discount rate (percent) 4.3 % 4.3 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities were as follows: (in thousands) Year Ending March 31, 2021 (excluding the three months ended June 30, 2020) $ 2,832 2022 3,779 2023 3,074 2024 2,828 2025 2,548 Thereafter 4,963 Total lease liabilities 20,024 Less: Imputed interest (2,476) Present value of lease liabilities $ 17,548 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivatives | The fair value of the interest rate swap designated as a hedging instrument is summarized below (in thousands): June 30, 2020 March 31, 2020 Current derivative liabilities $ 290 $ 271 Non-current derivative liabilities 1,542 1,492 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of Earnings Per Share | The following table sets forth the reconciliation of the numerator and the denominator of basic and diluted earnings per share for the three months ended June 30, 2020 and 2019 (amounts in thousands, except per share data): Three Months Ended 2020 2019 Income from continuing operations $ 11,960 $ 15,344 Loss from discontinued operations — (140) Net income $ 11,960 $ 15,204 Weighted average shares: Common stock 14,603 14,909 Participating securities 104 115 Denominator for basic earnings per common share 14,707 15,024 Potentially dilutive securities 101 169 Denominator for diluted earnings per common share 14,808 15,193 Basic earnings (loss) per common share: Continuing operations $ 0.81 $ 1.02 Discontinued operations — (0.01) Net income $ 0.81 $ 1.01 Diluted earnings (loss) per common share: Continuing operations $ 0.81 $ 1.01 Discontinued operations — (0.01) Net income $ 0.81 $ 1.00 |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Net Pension Benefit | The following tables set forth the combined net pension benefit recognized in our condensed consolidated financial statements for all plans (in thousands): Three Months Ended 2020 2019 Service cost, benefits earned during the period $ 10 $ 18 Interest cost on projected benefit obligation 36 523 Expected return on assets (24) (653) Amortization of net actuarial loss 18 12 Net pension benefit $ 40 $ (100) |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Analysis of Changes in Accumulated Other Comprehensive Income (Loss) | The following table provides an analysis of the changes in accumulated other comprehensive loss (in thousands): Three Months Ended June 30, 2020 2019 Currency translation adjustments: Balance at beginning of period $ (9,185) $ (6,869) Adjustments for foreign currency translation 1,338 258 Balance at end of period $ (7,847) $ (6,611) Interest rate swaps: Balance at beginning of period $ (1,390) $ (394) Unrealized losses, net of taxes of $14 and $81, respectively (a) (51) (306) Reclassification of losses (income) included in interest expense, net, net of taxes of $1 and $(2), respectively (4) 9 Other comprehensive loss (55) (297) Balance at end of period $ (1,445) $ (691) Defined benefit plans: Balance at beginning of period $ (871) $ (3,466) Amortization of net losses, net of taxes of $1 and $1, respectively (b) (4) (4) Balance at end of period $ (875) $ (3,470) (a) Unrealized gains (losses) are reclassified to earnings as underlying cash interest payments are made. We expect to recognize a loss of $0.3 million, net of deferred taxes, over the next twelve months related to designated cash flow hedges based on their fair values at June 30, 2020. (b) Amortization of actuarial losses out of accumulated comprehensive loss are included in the computation of net periodic pension expense. See Note 13 for additional information. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregation of revenues reconciled to our reportable segments is as follows (in thousands): Three Months Ended June 30, 2020 Industrial Products Specialty Chemicals Total Build-to-order $ 20,543 $ — $ 20,543 Book-and-ship 40,696 29,725 70,421 Net revenues $ 61,239 $ 29,725 $ 90,964 Three Months Ended June 30, 2019 Industrial Products Specialty Chemicals Total Build-to-order $ 19,201 $ — $ 19,201 Book-and-ship 44,151 38,981 83,132 Net revenues $ 63,352 $ 38,981 $ 102,333 |
Schedule of Contract Liabilities | Contract liabilities, which are included in accrued and other current liabilities in our condensed consolidated balance sheets were as follows (in thousands): Balance at April 1, 2020: $ 2,892 Revenue recognized during the period (927) New contracts and revenue added to existing contracts during the period 1,149 Balance at June 30, 2020 $ 3,114 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segments | Three Months Ended June 30, 2020: (in thousands) Industrial Products Specialty Chemicals Subtotal - Reportable Segments Eliminations and Other Total Revenues, net $ 61,239 $ 29,725 $ 90,964 $ — $ 90,964 Operating income 16,307 3,946 20,253 (4,000) 16,253 Three Months Ended June 30, 2019: (in thousands) Industrial Products Specialty Chemicals Subtotal - Reportable Segments Eliminations and Other Total Revenues, net $ 63,352 $ 38,981 $ 102,333 $ — $ 102,333 Operating income 17,042 6,623 23,665 (3,344) 20,321 |
ORGANIZATION AND OPERATIONS A_3
ORGANIZATION AND OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES - Additional Information (Details) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($)segment | Jun. 30, 2020USD ($)brand | Mar. 31, 2020USD ($) | |
Accounting Policies [Abstract] | ||||
Number of business segments | 2 | 2 | ||
Highly respected industrial brands (more than) | brand | 100 | |||
Allowance for credit losses for short-term receivables | $ 894 | $ 894 | $ 894 | $ 1,170 |
Current period adjustments | $ 300 |
ACQUISITIONS - Additional Infor
ACQUISITIONS - Additional Information (Details) - USD ($) $ in Thousands | Apr. 02, 2019 | Jul. 31, 2019 | Jun. 30, 2019 | Jul. 31, 2019 |
Business Acquisition [Line Items] | ||||
Amount paid at closing and funded through revolving credit facility | $ 11,500 | |||
Petersen Metals | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 11,800 | |||
Amount paid at closing and funded through revolving credit facility | $ 11,500 | |||
Working capital adjustment | $ 300 | |||
Goodwill, acquired during period | 6,100 | |||
Fair value of accounts receivable acquired | 2,200 | |||
Fair value of inventory acquired | 800 | |||
Fair value of equipment acquired | 700 | |||
Fair value of current liabilities assumed | 1,500 | |||
Petersen Metals | Customer Lists | ||||
Business Acquisition [Line Items] | ||||
Fair value of the assets acquired, finite-lived | $ 3,200 | |||
Assets acquired, amortization period | 15 years | |||
Petersen Metals | Backlog | ||||
Business Acquisition [Line Items] | ||||
Fair value of the assets acquired, finite-lived | $ 400 | |||
Assets acquired, amortization period | 1 year 6 months |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) $ in Millions | Mar. 17, 2020 | Sep. 30, 2018 | Dec. 31, 2017 |
Discontinued Operations, Held-for-sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Impairment charge | $ 46 | ||
Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from sale of assets | $ 1.5 | $ 6.9 | |
Gains on disposal due to write-downs of long-lived assets in prior periods | $ 1.5 | $ 6.9 |
DISCONTINUED OPERATIONS - Incom
DISCONTINUED OPERATIONS - Income Statement (Details) - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenues, net | $ 0 | $ 0 |
Loss from discontinued operations before income taxes | 0 | (154) |
Income tax benefit | 0 | 14 |
Loss from discontinued operations, net | $ 0 | $ (140) |
INVENTORIES (Detail)
INVENTORIES (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 24,145 | $ 20,935 |
Work in process | 7,248 | 6,076 |
Finished goods | 35,858 | 33,771 |
Total inventories | 67,251 | 60,782 |
Less: LIFO reserve | (4,816) | (4,816) |
Less: Obsolescence reserve | (2,994) | (2,213) |
Inventories, net | $ 59,441 | $ 53,753 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Goodwill (Detail) $ in Thousands | 3 Months Ended |
Jun. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 91,686 |
Currency translation | 394 |
Balance at end of period | 92,080 |
Industrial Products | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 60,123 |
Currency translation | 394 |
Balance at end of period | 60,517 |
Specialty Chemicals | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 31,563 |
Currency translation | 0 |
Balance at end of period | $ 31,563 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | |
Intangible Assets [Line Items] | ||
Ending Gross Amount | $ 79,656 | $ 79,313 |
Accumulated Amortization | (45,926) | (44,155) |
Trade names and trademarks not being amortized | ||
Intangible Assets [Line Items] | ||
Ending Gross Amount | $ 11,047 | 11,027 |
Patents | ||
Intangible Assets [Line Items] | ||
Wtd Avg Life (Years) | 11 years | |
Ending Gross Amount | $ 9,634 | 9,635 |
Accumulated Amortization | $ (7,136) | (6,935) |
Customer lists and amortized trademarks | ||
Intangible Assets [Line Items] | ||
Wtd Avg Life (Years) | 12 years | |
Ending Gross Amount | $ 63,123 | 62,806 |
Accumulated Amortization | $ (34,360) | (33,098) |
Non-compete agreements | ||
Intangible Assets [Line Items] | ||
Wtd Avg Life (Years) | 5 years | |
Ending Gross Amount | $ 1,676 | 1,653 |
Accumulated Amortization | $ (1,635) | (1,494) |
Other | ||
Intangible Assets [Line Items] | ||
Wtd Avg Life (Years) | 8 years | |
Ending Gross Amount | $ 5,223 | 5,219 |
Accumulated Amortization | $ (2,795) | $ (2,628) |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Future Amortization (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense of intangible assets | $ 1,700 | $ 1,700 |
2021 | 4,806 | |
2022 | 5,525 | |
2023 | 4,585 | |
2024 | 3,831 | |
2025 | $ 3,108 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Detail) | Jun. 30, 2020shares |
2015 Plan | Stock Compensation Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares available for issuance (shares) | 711,942 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Share-Based Compensation (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Share-based compensation expense | $ 1,328 | $ 1,213 |
Related income tax benefit | (319) | (291) |
Net share-based compensation expense | $ 1,009 | $ 922 |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock Option Activity (Detail) - Stock Options $ / shares in Units, $ in Millions | 3 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding at beginning of period (shares) | shares | 115,858 |
Outstanding at end of period (shares) | shares | 115,858 |
Exercisable at end of period (shares) | shares | 115,858 |
Weighted Average Price | |
Outstanding at beginning of period (USD per share) | $ / shares | $ 25.30 |
Outstanding at end of period (USD per share) | $ / shares | 25.30 |
Exercisable at end of period (USD per share) | $ / shares | $ 25.30 |
Outstanding, Remaining Contractual Life | 3 years 10 months 24 days |
Exercisable, Remaining Contractual Life | 3 years 10 months 24 days |
Outstanding, Aggregate Intrinsic Value | $ | $ 5.1 |
Exercisable, Aggregate Intrinsic Value | $ | $ 5.1 |
SHARE-BASED COMPENSATION (Stock
SHARE-BASED COMPENSATION (Stock Option Activity) - Additional Information (Detail) - Stock Options - shares | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted (shares) | 0 | 0 |
Number of shares vested (shares) | 0 | 0 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Share Activity (Detail) - Restricted Shares | 3 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Number of Shares | |
Outstanding at beginning of period (shares) | shares | 202,466 |
Granted (shares) | shares | 67,580 |
Vested (shares) | shares | (70,861) |
Canceled (shares) | shares | (8,976) |
Outstanding at end of period (shares) | shares | 190,209 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (USD per share) | $ / shares | $ 60.78 |
Granted (USD per share) | $ / shares | 73.81 |
Vested (USD per share) | $ / shares | 49.70 |
Canceled (USD per share) | $ / shares | 70.51 |
Outstanding at end of period (USD per share) | $ / shares | $ 64.85 |
SHARE-BASED COMPENSATION (Restr
SHARE-BASED COMPENSATION (Restricted Stock Activity) - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | |
Restricted Stock Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested restricted shares outstanding (shares) | 90,012 | 93,249 | |
Restricted Stock Performance Shares | Cliff Vesting | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 36 months | ||
Restricted shares granted (shares) | 26,966 | 31,594 | |
Restricted Stock Performance Shares | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance-based vesting range | 0.00% | ||
Restricted Stock Performance Shares | Minimum | Cliff Vesting | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance-based vesting range | 0.00% | ||
Restricted Stock Performance Shares | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance-based vesting range | 200.00% | ||
Restricted Stock Performance Shares | Maximum | Cliff Vesting | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance-based vesting range | 200.00% | ||
Restricted Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested restricted shares outstanding (shares) | 190,209 | 202,466 | |
Restricted shares granted (shares) | 67,580 | ||
Unrecognized compensation costs related to unvested restricted shares | $ 7.7 | ||
Weighted average vesting period | 2 years | ||
Fair value of restricted shares granted | $ 2.5 | $ 2.5 | |
Fair value of restricted shares vested | $ 4.2 | $ 2.1 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-Term Debt (Detail) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Debt Instrument [Line Items] | ||
Total debt | $ 10,758,000 | $ 10,898,000 |
Less: Current portion | (561,000) | (561,000) |
Long-term debt | 10,197,000 | 10,337,000 |
Whitmore | Secured Term Loan | ||
Debt Instrument [Line Items] | ||
Whitmore Term Loan, interest rate of 2.16% and 2.99%, respectively | $ 10,758,000 | $ 10,898,000 |
Interest rate | 2.16% | 2.99% |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Revolving Credit Facility, interest rate of 1.41% and 2.24%, respectively | $ 0 | $ 0 |
Interest rate | 1.41% | 2.24% |
LONG-TERM DEBT (Revolving Credi
LONG-TERM DEBT (Revolving Credit Agreement) - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | |||
Borrowings on line of credit | $ 10,000,000 | $ 7,500,000 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt instrument, term | 5 years | ||
Maximum borrowing capacity | $ 250,000,000 | ||
Commitment fee paid | 0.15% | ||
Borrowings on line of credit | $ 10,000,000 | ||
Line of credit amount repaid | 10,000,000 | ||
Line of credit outstanding amount | 0 | $ 0 | |
Line of credit facility, remaining borrowing capacity | $ 300,000,000 | $ 300,000,000 | |
Revolving Credit Facility | Prime Rate | |||
Debt Instrument [Line Items] | |||
Spread on interest rate | 0.25% | ||
Revolving Credit Facility | LIBOR | |||
Debt Instrument [Line Items] | |||
Spread on interest rate | 1.25% | ||
Revolving Credit Facility, Accordion Feature | |||
Debt Instrument [Line Items] | |||
Additional borrowing capacity with accordion feature | $ 50,000,000 |
LONG-TERM DEBT (Whitmore Term L
LONG-TERM DEBT (Whitmore Term Loan) - Additional Information (Detail) - Whitmore - Secured Term Loan - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||
Debt instrument, periodic principal payment | $ 140,000 | |
Principal amount outstanding under term loan | $ 10,758,000 | $ 10,898,000 |
LIBOR | ||
Debt Instrument [Line Items] | ||
Spread on interest rate | 2.00% |
LEASES - Additional Information
LEASES - Additional Information (Details) | Jun. 30, 2020 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 9 years |
LEASES - Components of Operatin
LEASES - Components of Operating Lease Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 845 | $ 904 |
Short-term lease expense | 55 | 0 |
Total operating lease expense | $ 900 | $ 904 |
LEASES - Operating Lease Assets
LEASES - Operating Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Leases [Abstract] | ||
ROU assets, net | $ 15,690 | $ 16,383 |
Included in other assets, net | us-gaap:OtherAssets | us-gaap:OtherAssets |
Short-term lease liabilities | $ 3,104 | $ 3,056 |
Included in accrued and other current liabilities | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent |
Long-term lease liabilities recorded | $ 14,444 | $ 15,179 |
Included in other long-term liabilities | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent |
Total operating lease liabilities | $ 17,548 | $ 18,235 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 933 | $ 873 |
ROU assets obtained in exchange for new operating lease obligations | $ 59 | $ 605 |
LEASES - Other Information for
LEASES - Other Information for Operating Leases (Details) | Jun. 30, 2020 | Mar. 31, 2020 |
Leases [Abstract] | ||
Weighted average remaining lease term (in years) | 6 years 3 days | 6 years 4 months 24 days |
Weighted average discount rate (percent) | 4.30% | 4.30% |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Leases [Abstract] | ||
Year Ending March 31, 2021 (excluding the three months ended June 30, 2020) | $ 2,832 | |
2022 | 3,779 | |
2023 | 3,074 | |
2024 | 2,828 | |
2025 | 2,548 | |
Thereafter | 4,963 | |
Total lease liabilities | 20,024 | |
Less: Imputed interest | (2,476) | |
Total operating lease liabilities | $ 17,548 | $ 18,235 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING - Additional Information (Detail) - Interest Rate Swap - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | |
Derivative [Line Items] | ||
Notional amount | $ 10.8 | $ 10.9 |
Maximum remaining length of contract | 9 years 1 month 6 days |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING - Fair Value of Derivatives (Detail) - Hedging Instrument - Interest Rate Swap - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Current derivative liabilities | $ 290 | $ 271 |
Non-current derivative liabilities | $ 1,542 | $ 1,492 |
EARNINGS PER SHARE (Detail)
EARNINGS PER SHARE (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||
Income from continuing operations | $ 11,960 | $ 15,344 |
Loss from discontinued operations | 0 | (140) |
Net income | $ 11,960 | $ 15,204 |
Weighted average shares: | ||
Common stock (shares) | 14,603 | 14,909 |
Participating securities (shares) | 104 | 115 |
Denominator for basic earnings per common share (shares) | 14,707 | 15,024 |
Potentially dilutive securities (shares) | 101 | 169 |
Denominator for diluted earnings per common share (shares) | 14,808 | 15,193 |
Basic earnings (loss) per common share: | ||
Continuing operations (USD per share) | $ 0.81 | $ 1.02 |
Discontinued operations (USD per share) | 0 | (0.01) |
Net income (USD per share) | 0.81 | 1.01 |
Diluted earnings (loss) per common share: | ||
Continuing operations (USD per share) | 0.81 | 1.01 |
Discontinued operations (USD per share) | 0 | (0.01) |
Net income (USD per share) | $ 0.81 | $ 1 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) | Jul. 09, 2020 | Nov. 07, 2018 | Apr. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 |
Equity, Class of Treasury Stock [Line Items] | ||||||
Approved quarterly dividend rate (USD per share) | $ 0.135 | |||||
Dividends paid | $ 2,000,000 | $ 2,000,000 | ||||
Subsequent Event | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Dividend declared (USD per share) | $ 0.135 | |||||
2018 Share Repurchase Program | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Share repurchase program authorized amount | $ 75,000,000 | |||||
Share repurchase program term | 2 years | |||||
Shares repurchased (shares) | 115,151 | 0 | 740,137 | |||
Shares repurchased, amount | $ 7,300,000 | $ 0 | $ 46,000,000 |
RETIREMENT PLANS - Additional I
RETIREMENT PLANS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Treasury shares contributed to ESOP | $ 3.7 | ||
Cash contributed to ESOP | $ 3.2 | ||
Pension Plan | U.S. | Qualified Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Overall termination charge | $ 6.5 |
RETIREMENT PLANS (Detail)
RETIREMENT PLANS (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Retirement Benefits [Abstract] | ||
Service cost, benefits earned during the period | $ 10 | $ 18 |
Interest cost on projected benefit obligation | 36 | 523 |
Expected return on assets | (24) | (653) |
Amortization of net actuarial loss | 18 | 12 |
Net pension benefit | $ 40 | $ (100) |
INCOME TAXES (Detail)
INCOME TAXES (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income from continuing operations before income taxes | $ 15,628 | $ 19,733 |
Income taxes | $ 3,668 | $ 4,389 |
Effective tax rate | 23.50% | 22.20% |
OTHER COMPREHENSIVE INCOME (L_3
OTHER COMPREHENSIVE INCOME (LOSS) (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 276,741 | $ 263,686 |
Other comprehensive loss | 1,279 | (43) |
Balance at end of period | 284,010 | 276,827 |
Losses on cash flow hedges expected to be reclassified to earnings within next 12 months | 300 | |
Currency translation adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (9,185) | (6,869) |
Other comprehensive loss | 1,338 | 258 |
Balance at end of period | (7,847) | (6,611) |
Interest rate swaps | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (1,390) | (394) |
Unrealized losses, net of taxes | (51) | (306) |
Reclassification of other comprehensive loss (income), net of taxes | (4) | 9 |
Other comprehensive loss | (55) | (297) |
Balance at end of period | (1,445) | (691) |
Unrealized losses, tax | 14 | 81 |
Reclassification from AOCI, tax | 1 | (2) |
Defined benefit plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (871) | (3,466) |
Reclassification of other comprehensive loss (income), net of taxes | (4) | (4) |
Balance at end of period | (875) | (3,470) |
Reclassification from AOCI, tax | $ 1 | $ 1 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 90,964 | $ 102,333 |
Change in Contract Liabilities [Roll Forward] | ||
Balance at beginning of period | 2,892 | |
Revenue recognized during the period | (927) | |
New contracts and revenue added to existing contracts during the period | 1,149 | |
Balance at end of period | 3,114 | |
Build-to-order | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 20,543 | 19,201 |
Book-and-ship | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 70,421 | 83,132 |
Industrial Products | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 61,239 | 63,352 |
Industrial Products | Build-to-order | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 20,543 | 19,201 |
Industrial Products | Book-and-ship | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 40,696 | 44,151 |
Specialty Chemicals | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 29,725 | 38,981 |
Specialty Chemicals | Build-to-order | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 0 | 0 |
Specialty Chemicals | Book-and-ship | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 29,725 | $ 38,981 |
SEGMENTS (Detail)
SEGMENTS (Detail) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2020segment | Jun. 30, 2020brand | Jun. 30, 2019USD ($) | |
Segment Reporting [Abstract] | ||||
Number of business segments | 2 | 2 | ||
Segment Reporting Information [Line Items] | ||||
Revenues, net | $ 90,964 | $ 102,333 | ||
Operating income | 16,253 | 20,321 | ||
Industrial Products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues, net | 61,239 | 63,352 | ||
Specialty Chemicals | ||||
Segment Reporting Information [Line Items] | ||||
Revenues, net | 29,725 | 38,981 | ||
Reportable Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues, net | 90,964 | 102,333 | ||
Operating income | 20,253 | 23,665 | ||
Reportable Segments | Industrial Products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues, net | 61,239 | 63,352 | ||
Operating income | 16,307 | 17,042 | ||
Reportable Segments | Specialty Chemicals | ||||
Segment Reporting Information [Line Items] | ||||
Revenues, net | 29,725 | 38,981 | ||
Operating income | 3,946 | 6,623 | ||
Eliminations and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues, net | 0 | 0 | ||
Operating income | $ (4,000) | $ (3,344) |