Cover Page
Cover Page - shares | 9 Months Ended | |
Dec. 31, 2019 | Feb. 10, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-2661 | |
Entity Registrant Name | CSS INDUSTRIES, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-1920657 | |
Entity Address, Address Line One | 450 Plymouth Road | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Plymouth Meeting | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19462 | |
City Area Code | 610 | |
Local Phone Number | 729-3959 | |
Title of 12(b) Security | Common Stock, $.10 par value | |
Trading Symbol | CSS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 8,880,297 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000020629 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 112,932 | $ 133,231 | $ 266,443 | $ 310,259 |
Cost of sales | 82,945 | 99,768 | 199,631 | 240,468 |
Gross profit | 29,987 | 33,463 | 66,812 | 69,791 |
Selling, general and administrative expenses | 21,654 | 28,718 | 65,140 | 85,995 |
Restructuring expenses | 604 | 1,050 | 3,399 | 3,177 |
Impairment of goodwill | 0 | 0 | 0 | 1,390 |
Operating income (loss) | 7,729 | 3,695 | (1,727) | (20,771) |
Interest expense (income), net | 798 | 784 | 2,447 | 1,480 |
Other expense (income), net | (649) | (154) | (1,725) | (437) |
Income (loss) before income taxes | 7,580 | 3,065 | (2,449) | (21,814) |
Income tax expense | 339 | 9,835 | 1,076 | 8,342 |
Net income (loss) | $ 7,241 | $ (6,770) | $ (3,525) | $ (30,156) |
Net income (loss) per common share, basic (in dollars per share) | $ 0.82 | $ (0.77) | $ (0.40) | $ (3.35) |
Net income (loss) per common share, diluted (in dollars per share) | $ 0.81 | $ (0.77) | $ (0.40) | $ (3.35) |
Weighted average basic shares outstanding (in shares) | 8,880 | 8,845 | 8,865 | 9,007 |
Weighted average diluted shares outstanding (in shares) | 8,902 | 8,845 | 8,865 | 9,007 |
Net income (loss) | $ 7,241 | $ (6,770) | $ (3,525) | $ (30,156) |
Currency translation adjustments: | ||||
Currency translation adjustments | 449 | (183) | (70) | (1,149) |
Total currency translation gain (loss) | 449 | (183) | (70) | (1,149) |
Pension and postretirement benefits: | ||||
Net income arising from pension and postretirement benefits, net of tax $9 for the three- and nine months ended December 31, 2019 | 28 | 0 | 28 | 0 |
Interest rate swap agreement: | ||||
Fair value adjustment, net of tax $(185) for the three months, and $(87) for the nine months ended December 31, 2018 | 0 | (585) | 0 | (109) |
Other comprehensive income (loss), net: | 477 | (768) | (42) | (1,258) |
Comprehensive income (loss) | $ 7,718 | $ (7,538) | $ (3,567) | $ (31,414) |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||||
Tax portion of fair value adjustment | $ (185) | $ (87) | ||
Fair value adjustment, tax | $ 9 | $ 9 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | |||
Cash and cash equivalents | $ 12,346,000 | $ 17,100,000 | $ 18,917,000 |
Accounts receivable, net of allowances of $231, $2,198 and $1,757 | 85,111,000 | 53,835,000 | 119,600,000 |
Inventories | 86,990,000 | 96,231,000 | 94,902,000 |
Asset held for sale | 0 | 131,000 | 2,514,000 |
Prepaid expenses and other current assets | 9,905,000 | 12,568,000 | 12,445,000 |
Total current assets | 194,352,000 | 179,865,000 | 248,378,000 |
Property, plant and equipment, net | 48,771,000 | 50,920,000 | 49,407,000 |
Operating lease right-of-use assets | 44,702,000 | 0 | 0 |
Intangible assets, net | 35,025,000 | 40,285,000 | 55,200,000 |
Other assets | 15,571,000 | 14,525,000 | 10,288,000 |
Total assets | 338,421,000 | 285,595,000 | 363,273,000 |
Current liabilities: | |||
Short-term borrowings | 38,805,000 | 26,139,000 | 58,695,000 |
Current portion of long-term debt | 11,000 | 316,000 | 305,000 |
Accounts payable | 28,509,000 | 27,916,000 | 36,658,000 |
Accrued payroll and other compensation | 5,518,000 | 6,962,000 | 8,513,000 |
Accrued customer programs | 12,809,000 | 12,101,000 | 16,501,000 |
Accrued income taxes | 620,000 | 0 | 0 |
Accrued other expenses | 14,333,000 | 14,468,000 | 19,404,000 |
Current portion of operating lease liabilities | 7,207,000 | 0 | 0 |
Total current liabilities | 107,812,000 | 87,902,000 | 140,076,000 |
Long-term debt, net of current portion | 4,000 | 13,000 | 16,000 |
Deferred income taxes | 610,000 | 619,000 | 1,189,000 |
Operating lease liabilities | 37,692,000 | 0 | 0 |
Other long-term obligations | 5,316,000 | 7,130,000 | 7,800,000 |
Total liabilities | 151,434,000 | 95,664,000 | 149,081,000 |
Commitments and contingencies (Note 8) | |||
Stockholders' equity: | |||
Preferred stock, Class 2, $0.01 par, 1,000,000 shares authorized, no shares issued | 0 | 0 | 0 |
Common stock, $0.10 par, 25,000,000 shares authorized, 14,703,084 shares issued at December 31, 2019, March 31, 2019 and December 31, 2018 | 1,470,000 | 1,470,000 | 1,470,000 |
Additional paid-in capital | 61,590,000 | 60,921,000 | 60,571,000 |
Retained earnings | 272,318,000 | 277,613,000 | 302,845,000 |
Accumulated other comprehensive income (loss), net of tax | 423,000 | 465,000 | (95,000) |
Common stock in treasury, 5,822,790 shares at December 31, 2019, 5,865,846 shares at March 31, 2019 and 5,867,184 shares at December 31, 2018, at cost | (148,814,000) | (150,538,000) | (150,599,000) |
Total stockholders' equity | 186,987,000 | 189,931,000 | 214,192,000 |
Total liabilities and stockholders' equity | $ 338,421,000 | $ 285,595,000 | $ 363,273,000 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | |||
Allowances for accounts receivable | $ 231 | $ 2,198 | $ 3,098 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 25,000,000 | 25,000,000 | 25,000,000 |
Common stock, shares issued | 14,703,084 | 14,703,084 | 14,703,084 |
Treasury stock, shares | 5,822,790 | 5,865,846 | 5,867,184 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (3,525) | $ (30,156) |
Adjustments to reconcile net income (loss) to net cash used for operating activities: | ||
Depreciation and amortization | 9,863 | 10,264 |
Amortization of operating lease right-of-use assets | 7,518 | 0 |
Amortization of inventory step-up | 284 | 9,830 |
Amortization of financing transaction costs | 421 | 85 |
Write-off of deferred financing transaction costs | 344 | 0 |
Accretion of asset retirement obligation | 97 | 95 |
Accretion of contingent earn-out consideration | 26 | 44 |
Change in valuation of contingent earn-out consideration | (1,392) | 0 |
Impairment of property, plant and equipment | 0 | 1,398 |
Impairment of goodwill | 0 | 1,390 |
Provision for accounts receivable allowances | 2,470 | 4,386 |
Deferred tax (benefit) provision | (11) | 10,050 |
Share-based compensation expense | 669 | 1,694 |
Loss (gain) on sale or disposal of assets | (553) | 4 |
Changes in assets and liabilities, net of effects of purchase of a business: | ||
Accounts receivable | (33,768) | (60,718) |
Inventories | 8,984 | (2,222) |
Prepaid expenses and other assets | 2,929 | (615) |
Accounts payable | 2,216 | 15,865 |
Lease liabilities | (6,013) | 0 |
Accrued expenses and long-term obligations | 855 | 4,093 |
Net cash used for operating activities | (8,586) | (34,513) |
Cash flows from investing activities: | ||
Final payment of purchase price for a business previously acquired | 0 | (2,500) |
Purchase of a business | 0 | (2,500) |
Purchase of property, plant and equipment | (6,966) | (7,757) |
Purchase of company owned life insurance policy | 0 | (750) |
Proceeds from sale of fixed assets | 1,025 | 0 |
Net cash used for investing activities | (5,941) | (13,507) |
Cash flows from financing activities: | ||
Borrowings on credit facility | 172,919 | 33,695 |
Payments on credit facility | (160,253) | (15,000) |
Payments on long-term debt | (314) | (136) |
Dividends paid | 0 | (5,401) |
Purchase of treasury stock | 0 | (4,372) |
Payment of financing transaction costs | (2,425) | (425) |
Tax effect on stock awards | (46) | 0 |
Net cash provided by financing activities | 9,881 | 8,361 |
Effect of exchange rate changes on cash | (108) | 16 |
Net decrease in cash and cash equivalents | (4,754) | (39,643) |
Cash and cash equivalents at beginning of period | 17,100 | 58,560 |
Cash and cash equivalents at end of period | $ 12,346 | $ 18,917 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Common Stock in Treasury |
Beginning balance, shares at Mar. 31, 2018 | 14,703,084 | 5,583,338 | ||||
Beginning balance at Mar. 31, 2018 | $ 253,695 | $ 1,470 | $ 58,877 | $ 339,088 | $ 1,163 | $ (146,903) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 471 | 471 | ||||
Other comprehensive income (loss) | (455) | (455) | ||||
Net income (loss) | (18,476) | (18,476) | ||||
Cash dividends ($.20 per common share) | (1,827) | (1,827) | ||||
Ending balance, shares at Jun. 30, 2018 | 14,703,084 | 5,583,338 | ||||
Ending balance at Jun. 30, 2018 | 233,408 | $ 1,470 | 59,348 | 318,785 | 708 | $ (146,903) |
Beginning balance, shares at Mar. 31, 2018 | 14,703,084 | 5,583,338 | ||||
Beginning balance at Mar. 31, 2018 | 253,695 | $ 1,470 | 58,877 | 339,088 | 1,163 | $ (146,903) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ (30,156) | |||||
Purchase of treasury shares, shares | (303,166) | |||||
Purchase of treasury shares | $ (4,372) | |||||
Ending balance, shares at Dec. 31, 2018 | 14,703,084 | 5,867,184 | ||||
Ending balance at Dec. 31, 2018 | 214,192 | $ 1,470 | 60,571 | 302,845 | (95) | $ (150,599) |
Beginning balance, shares at Jun. 30, 2018 | 14,703,084 | 5,583,338 | ||||
Beginning balance at Jun. 30, 2018 | 233,408 | $ 1,470 | 59,348 | 318,785 | 708 | $ (146,903) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 586 | 586 | ||||
Issuance of common stock under equity plan, shares | 19,320 | |||||
Issuance of common stock under equity plan | 0 | (676) | $ 676 | |||
Other comprehensive income (loss) | (35) | (35) | ||||
Net income (loss) | (4,910) | (4,910) | ||||
Cash dividends ($.20 per common share) | (1,812) | (1,812) | ||||
Purchase of treasury shares, shares | (249,908) | |||||
Purchase of treasury shares | (3,628) | $ (3,628) | ||||
Ending balance, shares at Sep. 30, 2018 | 14,703,084 | 5,813,926 | ||||
Ending balance at Sep. 30, 2018 | 223,609 | $ 1,470 | 59,934 | 311,387 | 673 | $ (149,855) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 637 | 637 | ||||
Other comprehensive income (loss) | (768) | (768) | ||||
Net income (loss) | (6,770) | (6,770) | ||||
Cash dividends ($.20 per common share) | (1,772) | (1,772) | ||||
Purchase of treasury shares, shares | (53,258) | |||||
Purchase of treasury shares | (744) | $ (744) | ||||
Ending balance, shares at Dec. 31, 2018 | 14,703,084 | 5,867,184 | ||||
Ending balance at Dec. 31, 2018 | 214,192 | $ 1,470 | 60,571 | 302,845 | (95) | $ (150,599) |
Beginning balance, shares at Mar. 31, 2019 | 14,703,084 | 5,865,846 | ||||
Beginning balance at Mar. 31, 2019 | 189,931 | $ 1,470 | 60,921 | 277,613 | 465 | $ (150,538) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 73 | 73 | ||||
Issuance of common stock under equity plan, shares | 15,611 | |||||
Issuance of common stock under equity plan | (42) | (782) | $ 740 | |||
Other comprehensive income (loss) | (215) | (215) | ||||
Net income (loss) | (14,248) | (14,248) | ||||
Ending balance, shares at Jun. 30, 2019 | 14,703,084 | 5,850,235 | ||||
Ending balance at Jun. 30, 2019 | 175,499 | $ 1,470 | 60,994 | 262,583 | 250 | $ (149,798) |
Beginning balance, shares at Mar. 31, 2019 | 14,703,084 | 5,865,846 | ||||
Beginning balance at Mar. 31, 2019 | 189,931 | $ 1,470 | 60,921 | 277,613 | 465 | $ (150,538) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ (3,525) | |||||
Purchase of treasury shares, shares | 0 | |||||
Ending balance, shares at Dec. 31, 2019 | 14,703,084 | 5,822,790 | ||||
Ending balance at Dec. 31, 2019 | $ 186,987 | $ 1,470 | 61,590 | 272,318 | 423 | $ (148,814) |
Beginning balance, shares at Jun. 30, 2019 | 14,703,084 | 5,850,235 | ||||
Beginning balance at Jun. 30, 2019 | 175,499 | $ 1,470 | 60,994 | 262,583 | 250 | $ (149,798) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 191 | 191 | ||||
Issuance of common stock under equity plan, shares | 26,210 | |||||
Issuance of common stock under equity plan | 0 | (918) | $ 918 | |||
Other comprehensive income (loss) | (304) | (304) | ||||
Net income (loss) | 3,482 | 3,482 | ||||
Ending balance, shares at Sep. 30, 2019 | 14,703,084 | 5,824,025 | ||||
Ending balance at Sep. 30, 2019 | 178,868 | $ 1,470 | 61,185 | 265,147 | (54) | $ (148,880) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation expense | 405 | 405 | ||||
Issuance of common stock under equity plan, shares | 1,235 | |||||
Issuance of common stock under equity plan | (4) | (70) | $ 66 | |||
Other comprehensive income (loss) | 477 | 477 | ||||
Net income (loss) | 7,241 | 7,241 | ||||
Ending balance, shares at Dec. 31, 2019 | 14,703,084 | 5,822,790 | ||||
Ending balance at Dec. 31, 2019 | $ 186,987 | $ 1,470 | $ 61,590 | $ 272,318 | $ 423 | $ (148,814) |
CONSOLIDATED STATEMENT OF STO_2
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends (in dollars per share) | $ 0.20 | $ 0.20 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation CSS Industries, Inc. (collectively with its subsidiaries, “CSS” or the “Company”) has prepared the consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission. The Company has condensed or omitted certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States pursuant to such rules and regulations. In the opinion of management, the statements include all adjustments (which include normal recurring adjustments) required for a fair presentation of financial position, results of operations and cash flows for the interim periods presented. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2019. The results of operations for the interim periods are not necessarily indicative of the results for the full year. The Company’s fiscal year ends on March 31. References to a particular fiscal year refer to the fiscal year ending in March of that year. For example, “fiscal 2020” refers to the fiscal year ending March 31, 2020. Liquidity and Going Concern The Company is currently in compliance with its debt covenants under its ABL Credit Facility discussed in Note 7; however, it is probable, based on our forecasts, that the Company will not be in compliance with these covenants at certain future measurement dates in the following twelve-month period. In connection with the transactions contemplated by the Merger Agreement discussed in Note 13, the Company expects that its obligations to the lenders under the ABL Credit Facility described in Note 7 will be discharged at the time the merger contemplated by the Merger Agreement is consummated. However, there can be no assurance that the transactions contemplated by the Merger Agreement will be consummated on the contemplated timeline or at all. If a debt covenant violation under the ABL Credit Facility were to occur prior to the consummation of the transactions contemplated by the Merger Agreement and if the Company was unable to agree to amended financial covenant measures with its lenders before such time or obtain a waiver in the event of subsequent non-compliance, the Company would not be able to repay the entirety of the outstanding debt in the event the lenders were to call the debt, thus leading to substantial doubt about the Company’s ability to continue as a going concern until such amendments or waivers are in place. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. Principles of Consolidation The consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. Nature of Business CSS is a creative consumer products company, focused on the craft, gift and seasonal categories. For these design-driven categories, the Company engages in the creative development, manufacture, procurement, distribution and sale of our products with an omni-channel approach focused primarily on mass market retailers. Craft The craft category includes sewing patterns, ribbons and trims, buttons, knitting needles, needle arts and kids' crafts. These products are sold to mass market, specialty, and online retailers, and are generally ordered on a replenishment basis throughout the year. Gift The gift category includes products designed to celebrate certain life events or special occasions, such as weddings, birthdays, anniversaries, graduations, or the birth of a child. Products include ribbons and bows, floral accessories, infant products, journals, gift card holders, all occasion boxed greeting cards, memory books, scrapbooks, stationery, and other items that commemorate life's celebrations. Products in this category are primarily sold into mass, specialty, and online retailers, floral and packaging wholesalers and distributors, and are generally ordered on a replenishment basis throughout the year. Seasonal The seasonal category includes holiday gift packaging items such as ribbon, bows, greeting cards, bags, tags and gift card holders, in addition to specific holiday-themed decorations, accessories, and activities, such as Easter egg dyes and novelties and Valentine's Day classroom exchange cards. These products are sold to mass market retailers, and production forecasts for these products are generally known well in advance of shipment. CSS’ product breadth provides its retail customers the opportunity to use a single vendor for much of their craft, gift and seasonal product requirements. A substantial portion of CSS’ products are manufactured and packaged in the United States and warehoused and distributed from facilities in the United States, the United Kingdom and Australia, with the remainder sourced from foreign suppliers, primarily in Asia. The Company also has a manufacturing facility in India that produces certain craft products, including trims, braids and tassels, and also has a distribution facility in India. The Company’s products are sold to its customers by national and regional account sales managers, sales representatives, product specialists and by a network of independent manufacturers’ representatives. CSS maintains purchasing offices in Hong Kong and China to administer Asian sourcing opportunities. Foreign Currency Translation and Transactions The Company's foreign subsidiaries generally use the local currency as the functional currency. The Company translates all assets and liabilities at period end exchange rates and all income and expense accounts at average rates during the period. Translation adjustments are recorded in accumulated other comprehensive income (loss) in stockholders’ equity. Gains and losses on foreign currency transactions (denominated in currencies other than the local currency) are not material and are included in other expense (income), net in the consolidated statements of operations and comprehensive income (loss). Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Judgments and assessments of uncertainties are required in applying the Company’s accounting policies in many areas. Such estimates pertain to revenue recognition, the valuation of inventory and accounts receivable, the assessment of the recoverability of other intangible and long-lived assets and resolution of litigation and other proceedings. Actual results could differ from these estimates. Inventories The Company records inventory when title is transferred, which occurs upon receipt or prior to receipt dependent on supplier shipping terms. The Company adjusts unsaleable and slow-moving inventory to its estimated net realizable value. Substantially all of the Company’s inventories are stated at the lower of first-in, first-out (FIFO) cost or net realizable value. The remaining portion of the inventory is valued at the lower of last-in, first-out (LIFO) cost or net realizable value. Inventories consisted of the following (in thousands): December 31, 2019 March 31, 2019 December 31, 2018 Raw material $ 12,868 $ 14,246 $ 14,837 Work-in-process 15,628 16,816 10,581 Finished goods 58,494 65,169 69,484 $ 86,990 $ 96,231 $ 94,902 In connection with the acquisitions of substantially all of the net assets and business of The McCall Pattern Company on December 13, 2016, Simplicity Creative Group ("Simplicity") on November 3, 2017 and Fitlosophy, Inc. ("Fitlosophy") on June 1, 2018, the Company recorded a step-up to fair value of the inventory acquired of $21,773,000, $10,214,000, and $312,000, respectively, at the date of each such acquisition. This was a result of the acquired inventory being marked up to an estimated net selling price in purchase accounting and is recognized through cost of sales as the inventory is sold. The amount of step-up to fair value of the acquired inventory remaining as of December 31, 2019, March 31, 2019 and December 31, 2018 was $0, $284,000 and $1,135,000, respectively. Asset Held for Sale The Company has no asset held for sale as of December 31, 2019. Asset held for sale of $131,000 as of March 31, 2019 represented a distribution facility in Danville, Pennsylvania, which the Company sold on October 29, 2019 for $750,000. On the closing date, the Company received cash proceeds of $708,000 after closing costs. The Company also incurred additional legal costs of approximately $24,000 to sell the facility. Asset held for sale of $2,514,000 as of December 31, 2018, which represented a distribution facility in Havant, England, was sold in the fourth quarter of fiscal 2019. Property, Plant and Equipment Property, plant and equipment are stated at cost and include the following (in thousands): December 31, 2019 March 31, 2019 December 31, 2018 Land $ 5,738 $ 5,738 $ 5,888 Buildings, leasehold interests and improvements 40,214 40,893 42,854 Machinery, equipment and other 119,946 113,946 110,524 165,898 160,577 159,266 Less - Accumulated depreciation and amortization (117,127) (109,657) (109,859) Net property, plant and equipment $ 48,771 $ 50,920 $ 49,407 Depreciation expense was $2,586,000 and $2,249,000 for the quarters ended December 31, 2019 and 2018, respectively, and was $7,469,000 and $6,403,000 for the nine months ended December 31, 2019 and 2018, respectively. Leases Effective April 1, 2019, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 842 - Leases ("ASC 842") using the modified retrospective transition approach. See Note 5 for more information. The Company determines if an arrangement is a lease at the inception of a contract. Operating lease right-of-use (“ROU”) assets are included in operating lease right-of-use assets on the consolidated balance sheets. The current and long-term components of operating lease liabilities are included in the current portion of operating lease liabilities and operating lease liabilities, respectively, on the consolidated balance sheets. Finance leases are not material to the Company’s consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available on the adoption date for existing leases and as of the commencement date for new leases in determining the present value of future payments. The operating lease ROU assets are subsequently measured throughout the lease term at the carrying amount of the lease liability, adjusted for any prepaid or accrued rent payments, lease incentives and initial direct costs incurred. Certain leases may include options to extend or terminate the lease. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company elected the package of transition practical expedients related to lease identification, lease classification, and initial direct costs. In addition, the Company made the following accounting policy elections for all asset classes: (1) the Company will not separate lease and non-lease components by class of underlying asset, (2) the Company will apply the short-term lease exemption by class of underlying asset, and, (3) the Company will apply the portfolio approach to the development of its discount rates for the leases to be recorded in accordance with ASC 842. The Company has chosen not to elect the hindsight practical expedient for its transition to ASC 842. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. Long-Lived Assets including Other Intangible Assets and Property, Plant and Equipment The Company performs an annual impairment test of the carrying amount of indefinite-lived intangible assets in the fourth quarter of its fiscal year. Additionally, the Company would perform its impairment testing at an interim date if events or circumstances indicate that intangibles might be impaired. Other indefinite lived intangible assets consist of tradenames which are required to be tested annually for impairment. An entity has the option to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. To perform a qualitative assessment, an entity must identify and evaluate changes in economic, industry and entity-specific events and circumstances that could affect the significant inputs used to determine the fair value of an indefinite-lived intangible asset. If the result of the qualitative analysis indicates it is more likely than not that an indefinite-lived intangible asset is impaired, a more detailed fair value calculation will need to be performed which is used to identify potential impairments and to measure the amount of impairment losses to be recognized, if any. The fair value of the Company’s tradenames is calculated using a “relief from royalty payments” methodology. This approach involves first estimating reasonable royalty rates for each trademark and then applying these royalty rates to a net sales stream and discounting the resulting cash flows to determine the fair value. The royalty rate is estimated using both a market and income approach. The market approach relies on the existence of identifiable transactions in the marketplace involving the licensing of tradenames similar to those owned by the Company. The income approach uses a projected pretax profitability rate relevant to the licensed income stream. The Company believes the use of multiple valuation techniques results in a more accurate indicator of the fair value of each tradename. This fair value is then compared with the carrying value of each tradename to determine if impairment exists. Long-lived assets (including property, plant and equipment), except for indefinite lived intangible assets, are reviewed for impairment when events or circumstances indicate the carrying value of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset group to future net cash flows estimated by the Company to be generated by such assets. If such asset group is considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of are recorded at the lower of their carrying value or estimated net realizable value. There were no triggering events identified during the nine months ended December 31, 2019 that required interim impairment testing for long-lived assets. The Company recorded an impairment of property, plant and equipment of $1,398,000 in the nine months ended December 31, 2018 related to a restructuring plan to combine its operations in the United Kingdom. See Note 3 for further discussion of this restructuring and Note 6 for further information on other intangible assets. Revenue Recognition Revenue from the sale of the Company's products is recognized when control of the promised goods is transferred to customers, in the amount that reflects the consideration the Company expects to be entitled to receive from its customers in exchange for those goods. The Company's revenue is recognized using the five-step model identified in ASC 606, "Revenue from Contracts with Customers." These steps are: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue as the performance obligations are satisfied. The Company's contracts with customers generally include one performance obligation under the revenue recognition standard. For most product sales, the performance obligation is the delivery of a specified product, and is satisfied at the point in time when control of the product has transferred to the customer, which takes place when title and risk of loss transfer in accordance with the applicable shipping terms, typically either at shipping point or at delivery to a specified destination. The Company has certain limited products, primarily sewing patterns, that are sold on consignment at mass market retailers. The Company recognizes revenue on these products as they are sold to end consumers as recorded at point-of-sale terminals, which is the point in time when control of the product is transferred to the customer. Revenue is recognized based on the consideration specified in a contract with the customer, and is measured as the amount of consideration to which the Company expects to be entitled to receive in exchange for transferring the goods. When applicable, the transaction price includes estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. Variable consideration consists of revenues that are subject to reductions to the transaction price for customer programs, which may include special pricing arrangements for specific customers, volume incentives and other promotions. The Company has significant historical experience with customer programs and estimates the expected consideration considering historical trends. The related reserves are included in accrued customer programs in the consolidated balance sheets. The Company adjusts its estimate of variable consideration at least quarterly or when facts and circumstances used in the estimation process may change. In limited cases, the Company may provide the right to return product to certain customers. The Company also records estimated reductions to revenue, based primarily on known claims, for customer returns and chargebacks that may arise as a result of shipping errors, product damaged in transit or for other reasons that become known subsequent to recognizing the revenue. These provisions are recorded in the period that the related sale is recognized and are reflected as a reduction from gross sales. The related reserves are included in accrued customer programs in the December 31, 2019 consolidated balance sheet and in accounts receivable, net of allowances in the March 31, 2019 and December31, 2018 consolidated balance sheets. If the amount of actual customer returns and chargebacks were to increase or decrease from the estimated amount, revisions to the estimated reserve would be recorded. The Company treats shipping and handling activities that occur until the customer has obtained control of a good as an activity to fulfill the promise to transfer the product. Costs related to shipping of product are recorded as incurred and classified in cost of sales in the consolidated statements of operations and comprehensive income (loss). Payment terms with customers vary by customer, but generally range from 30 to 90 days. Certain seasonal revenues have extended payment terms in accordance with general industry practice. Since the term between invoicing and expected payment is less than one year, the Company does not adjust the transaction price for the effects of a financing component. Sales commissions are earned and recognized as expense as the related revenue is recognized at a point in time. These costs are recorded in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). Taxes collected from customers are excluded from revenue and credited directly to obligations to the appropriate governmental agencies. The Company operates as a single reporting segment, engaged in the creative development, manufacture, procurement, distribution, and sale of craft, gift and seasonal products, primarily to mass market retailers in the United States. The following represents our net sales disaggregated by product category (in thousands): Three Months Ended December 31, Nine Months Ended December 31, 2019 2018 2019 2018 Craft $ 38,692 $ 39,764 109,352 117,524 Gift 25,170 29,543 68,629 84,197 Seasonal 49,070 63,924 88,462 108,538 Total $ 112,932 $ 133,231 $ 266,443 $ 310,259 Net Income (Loss) Per Common Share Due to the Company's net losses for the nine months ended December 31, 2019 and the three- and nine months ended December 31, 2018, potentially dilutive securities of 576,000 shares, 513,000 shares and 503,000 shares, respectively, consisting of outstanding stock options and unearned time-based restricted stock units, were excluded from the diluted net loss per common share calculation due to their antidilutive effect. The Company excluded 259,000 shares, consisting of outstanding stock options, from the diluted net income per common share calculation for the three months ended December 31, 2019 due to their antidilutive effect. Market-based and performance-based restricted stock units are considered contingently issuable shares for diluted income per common share purposes and the dilutive impact, if any, is not included in the weighted-average shares until the market or performance conditions are met even when the Company is profitable for the respective period. Components of Accumulated Other Comprehensive Income (Loss), Net Three Months Ended December 31, Nine Months Ended December 31, 2019 2018 2019 2018 Accumulated effect of currency translation adjustment: Balance at beginning of period $ (507) $ 22 $ 12 $ 988 Currency translation adjustment during period 449 (183) (70) (1,149) Balance at end of period $ (58) $ (161) $ (58) $ (161) Accumulated effect of pension and postretirement benefits: Balance at beginning of period $ 453 $ 259 $ 453 $ 259 Pension and postretirement benefits during period 28 — 28 — Balance at end of period $ 481 $ 259 $ 481 $ 259 Accumulated effect of interest rate swap agreement: Balance at beginning of period $ — $ 392 $ — $ (84) Fair value adjustment — (585) — (109) Balance at end of period $ — $ (193) $ — $ (193) |
Acquisitions
Acquisitions | 9 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONSOn June 1, 2018, a subsidiary of the Company completed the acquisition of substantially all of the business and net assets of Fitlosophy for $2,500,000 in cash. In addition to the $2,500,000 paid at closing, the Company may pay up to an additional $10,500,000 of contingent earn-out consideration, in cash, if net sales of certain products meet or exceed five different thresholds during the period from the acquisition date through March 31, 2023. If earned, the contingent consideration payments will be paid, generally within 20 days after the end of each rolling twelve-month measurement period (quarterly through March 31, 2023). No such payments of contingent consideration have been earned or paid as of December 31, 2019. At the date of acquisition, the estimated fair value of the contingent earn-out consideration was $1,600,000. The estimated fair value of the contingent earn-out consideration was determined using a Monte Carlo simulation discounted to a present value. See further discussion of subsequent adjustments to the fair value of the contingent earn-out consideration in Note 9. The following table summarizes the purchase price at the date of acquisition (in thousands): Cash $ 2,500 Contingent earn-out consideration 1,600 Purchase price $ 4,100 Fitlosophy is devoted to creating, marketing, and distributing innovative products that inspire people to develop healthy habits by focusing on effective goal-setting through journaling. Products include a complete line of fitness and wellness planning products all sold under the fitlosophy TM , live life fit TM and fitbook TM brands. The acquisition was accounted for using the acquisition method and the excess of cost over the fair market value of the net tangible and identifiable intangible assets acquired of $1,390,000 was recorded as goodwill. See further discussion of subsequent impairment to the goodwill in Note 6. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands): Accounts receivable $ 389 Inventory 452 Other assets 5 Total current assets 846 Intangible assets 2,032 Goodwill 1,390 Total assets acquired 4,268 Current liabilities (168) Net assets acquired $ 4,100 Pro forma results of operations for this acquisition have not been presented as the financial impact to our consolidated results of operations is not material. |
Restructuring Plans
Restructuring Plans | 9 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Plans | RESTRUCTURING PLANS Business Restructuring In the first quarter of fiscal 2019, the Company announced a restructuring plan to combine its operations in the United Kingdom and Australia, respectively. This restructuring was undertaken in order to improve profitability and efficiency through the elimination of (i) redundant back office functions; (ii) certain staffing positions and (iii) excess distribution and warehouse capacity, and was substantially completed in the second quarter of fiscal 2019. Commencing in the second quarter of fiscal 2019, the Company recorded an initial restructuring reserve, subsequent adjustments, and has made cash payments as part of this restructuring plan. Also, in connection with this restructuring plan, the Company recorded an impairment of property, plant and equipment at one of the affected facilities in the United Kingdom of $1,398,000 which is included in restructuring expenses. As of December 31, 2019 and 2018, the remaining liability of $7,000 and $279,000, respectively, was classified in accrued other expenses in the accompanying consolidated balance sheets. Selected information relating to the aforementioned restructuring follows (in thousands): Employee Termination Costs Facility Exit Costs Other Costs Total Restructuring reserve as of March 31, 2019 $ 1 $ 24 $ 14 $ 39 Charges (reversals) to expense (1) (24) 3 (22) Cash paid — — (6) (6) Restructuring reserve as of June 30, 2019 — — 11 11 Cash paid — — (2) (2) Restructuring reserve as of September 30, 2019 — — 9 9 Cash paid — — (2) (2) Restructuring reserve as of December 31, 2019 $ — $ — $ 7 $ 7 Selected information relating to the aforementioned restructuring follows (in thousands): Employee Termination Costs Facility Exit Costs Other Costs Total Initial reserve $ 297 $ 127 $ 133 $ 557 Cash paid — (13) (41) (54) Restructuring reserve as of September 30, 2018 297 114 92 503 Charges to expense 132 152 141 425 Cash paid (400) (74) (175) (649) Restructuring reserve as of December 31, 2018 $ 29 $ 192 $ 58 $ 279 Strategic Business Initiative In the third quarter of fiscal 2019, the Company announced that it engaged an international consulting firm to perform a comprehensive review of its operating structure with the goal of improving the alignment of processes across the business, as the Company continues to integrate recent acquisitions and evaluate its portfolio. Commencing in the third quarter of fiscal 2019, the Company recorded an initial restructuring reserve, subsequent adjustments, and has made cash payments in connection with this initiative. As of December 31, 2019 and 2018, the remaining liability of $123,000 and $797,000, respectively, was classified in accrued other expenses in the accompanying consolidated balance sheets. Selected information relating to the aforementioned restructuring follows (in thousands): Employee Termination Costs Restructuring reserve as of March 31, 2019 $ 634 Cash paid (212) Restructuring reserve as of June 30, 2019 422 Cash paid (196) Charges (reversals) to expense (3) Restructuring reserve as of September 30, 2019 223 Cash paid (100) Restructuring reserve as of December 31, 2019 $ 123 Selected information relating to the aforementioned restructuring follows (in thousands): Employee Termination Costs Initial reserve $ 797 Restructuring reserve as of December 31, 2018 $ 797 Performance Improvement Initiative In the first quarter of fiscal 2020, the Company announced a restructuring plan with the goal of reducing the Company’s cost base to improve business performance, profitability, and cash flow generation. Commencing in the first quarter of fiscal 2020, the Company recorded an initial restructuring reserve, subsequent adjustments, and has made cash payments in connection with this initiative. As of December 31, 2019, the remaining liability of $553,000 was classified in accrued other expenses in the accompanying consolidated balance sheet. Selected information relating to the aforementioned restructuring follows (in thousands): Employee Termination Costs Initial reserve $ 2,076 Cash paid (490) Restructuring reserve as of June 30, 2019 1,586 Cash paid (461) Charges (reversals) to expense (305) Restructuring reserve as of September 30, 2019 820 Cash paid (267) Restructuring reserve as of December 31, 2019 $ 553 Resource Alignment Initiative In the second quarter of fiscal 2020, the Company announced a restructuring plan with the goal of reducing the Company's cost base by improving the alignment of resources with the current operating structure. Commencing in the second quarter of fiscal 2020, the Company recorded an initial restructuring reserve, subsequent adjustments, and has made cash payments in connection with this initiative. As of December 31, 2019, the remaining liability of $502,000 was classified in accrued other expenses in the accompanying consolidated balance sheet. Selected information relating to the aforementioned restructuring follows (in thousands): Employee Termination Costs Initial reserve $ 1,049 Cash paid (20) Restructuring reserve as of September 30, 2019 1,029 Cash paid (308) Charges (reversals) to expense (219) Restructuring reserve as of December 31, 2019 $ 502 Location Consolidation Initiatives |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATIONUnder the terms of the Company’s 2013 Equity Compensation Plan (“2013 Plan”), the Company may grant incentive stock options, non-qualified stock options, stock units, restricted stock grants, stock appreciation rights, stock bonus awards and dividend equivalents to officers and other employees and non-employee directors. Under the 2013 Plan, a committee of the Company's Board of Directors (the "Board") approves grants to officers and other employees, and the Board approves grants to non-employee directors. Grants under the 2013 Plan may be made through July 29, 2023. The term of each grant is at the discretion of the Company, but in no event greater than ten years from the date of grant, and at the date of grant the Company has discretion to determine the date or dates on which granted options become exercisable. Service-based stock options outstanding as of December 31, 2019 become exercisable at the rate of 25% per year commencing one year after the date of grant. Outstanding service-based restricted stock units ("RSUs") granted to employees vest at either: (i) the rate of 50% of the shares underlying the grant on each of the third and fourth anniversaries of the grant date or (ii) the rate of 25% of the shares underlying the grant on each of the first four anniversaries of the grant date. Service-based RSUs granted to directors and outstanding as of December 31, 2019 will vest on July 31, 2020. Market-based and performance-based RSUs outstanding as of December 31, 2019 will vest only if certain market or performance conditions and service requirements have been met, and the dates on which they vest will depend on the period in which such market or performance conditions and service requirements are met, if at all, except that vesting and redemption are accelerated upon a change of control. The Company recognizes grants, cancellations, and forfeitures as they occur. As of December 31, 2019, there were 529,574 shares available for grant under the 2013 Plan. The fair value of each stock option granted under the above plan is estimated on the date of grant using a Black-Scholes option pricing model. There were no stock options granted during the first nine months of fiscal 2020. As of December 31, 2019, there were 259,000 outstanding stock options. The fair value of each performance-based and service-based RSU granted to employees is estimated on the grant date based on the closing price of the Company's common stock reduced by the present value of the expected dividend stream during the vesting period using the risk-free interest rate when applicable. The fair value of each service-based RSU granted to directors, for which dividend equivalents are paid upon vesting of the underlying awards when applicable, is estimated on the day of grant based on the closing price of the Company's common stock. During the nine months ended December 31, 2019 and 2018, the Company granted 352,666 and 201,013 RSUs, respectively, with a weighted average fair value per share of $5.63 and $14.46, respectively. As of December 31, 2019, there were 455,682 outstanding performance-based and service-based RSUs. As of December 31, 2019, there was $276,000 of total unrecognized compensation cost related to non-vested stock option awards granted under the Company’s equity incentive plans which is expected to be recognized over a weighted average period of 1.2 years. As of December 31, 2019, there was $1,847,000 of total unrecognized compensation cost related to non-vested service-based, market-based and performance-based RSUs granted under the Company’s equity incentive plans which is expected to be recognized over a weighted average period of 1.7 years. Compensation cost related to stock options and RSUs recognized in operating results (included in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss)) was $405,000 and $637,000 in the three months ended December 31, 2019 and 2018, respectively, and $669,000 and $1,694,000 in the nine months ended December 31, 2019 and 2018, respectively. |
Leases
Leases | 9 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | LEASES The Company adopted ASC 842 as of April 1, 2019, using the modified retrospective transition approach wherein the Company applied the new lease standard at the adoption date. Accordingly, all periods prior to April 1, 2019 were presented in accordance with the previous ASC Topic 840 - Leases ("ASC 840"), and no retrospective adjustments were made to the comparative periods presented. Adoption of ASC 842 resulted in the recording of operating lease ROU assets of $51,486,000, operating lease liabilities of $50,180,000, a reduction of favorable lease assets of $2,866,000 and a reduction of net deferred rent liabilities of $1,560,000 as of April 1, 2019. Finance leases are not material to the Company and are not impacted by the adoption of ASC 842 as finance lease liabilities and the corresponding assets were already recorded in the consolidated balance sheet under the previous guidance, ASC 840. The adoption did not materially impact the Company’s consolidated statement of operations and comprehensive income (loss) or consolidated statement of cash flows. The Company has operating leases for corporate offices, distribution facilities, manufacturing plants, and certain equipment and vehicles. Leases with an initial term of 12 months or less, which are immaterial to the Company, are not recorded in the consolidated balance sheet. For all asset classes, the Company has elected the practical expedient to account for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. The Company also elected the package of practical expedients permitted within the new standard, which among other things, allows the Company to carry forward historical lease classification. Variable lease payment amounts that cannot be determined at the commencement of the lease, such as increases in lease payments based on changes in index rates or usage, are not recorded in the consolidated balance sheet. ROU assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized on the adoption date for existing leases and on the commencement date for new leases based on the net present value of fixed lease payments over the lease term. The Company’s lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. ROU assets also include any advance lease payments. As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available on the adoption date for existing leases and as of the commencement date for new leases in determining the present value of lease payments. The Company applies the portfolio approach based on the rate of interest that it would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term to the development of its discount rates. The components of lease costs are as follows (in thousands): Three Months Ended Nine Months Ended Lease costs: Operating lease costs $ 2,848 $ 8,601 Variable operating lease costs 79 233 Total $ 2,927 $ 8,834 Supplemental cash flow information is as follows (in thousands): Three Months Ended Nine Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,949 $ 6,013 Total $ 1,949 $ 6,013 Three Months Ended Nine Months Ended Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 629 $ 52,226 Total $ 629 $ 52,226 The aggregate future lease payments for operating leases as of December 31, 2019 is projected to be as follows (in thousands): Remainder of fiscal 2020 $ 9,414 Fiscal 2021 8,410 Fiscal 2022 7,609 Fiscal 2023 6,368 Fiscal 2024 5,981 Thereafter 17,124 Total lease payments 54,906 Less: Interest (10,007) Present value of lease liabilities $ 44,899 The future minimum lease payments associated with all non-cancelable lease obligations under ASC 840 as of March 31, 2019 were as follows (in thousands): Fiscal 2020 $ 10,520 Fiscal 2021 9,360 Fiscal 2022 8,446 Fiscal 2023 7,364 Fiscal 2024 6,200 Thereafter 21,818 Total lease payments $ 63,708 Weighted-average lease terms and discount rates are as follows: December 31, 2019 Weighted-average remaining lease term (years) of operating leases 6.8 Weighted-average discount rate of operating leases 5.8 % |
Goodwill And Other Intangible A
Goodwill And Other Intangible Assets | 9 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill And Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS During the first quarter of fiscal 2019, the Fitlosophy acquisition was accounted for using the acquisition method and the excess of cost over the fair market value of the net tangible and identifiable intangible assets acquired of $1,390,000 was recorded as goodwill. During the first quarter of fiscal 2019, the Company determined that a triggering event occurred due to the fact that the Company’s total stockholders’ equity was in excess of the Company's market capitalization. Given this circumstance, the Company bypassed the option to assess qualitative factors to determine the existence of impairment and proceeded directly to the quantitative goodwill impairment test. Based on the results of its impairment test, the Company recorded an impairment charge of $1,390,000. As of December 31, 2019, March 31, 2019 and December 31, 2018, the Company had no goodwill. The change in the carrying amount of goodwill during the nine months ended December 31, 2018 is as follows (in thousands): Balance as of March 31, 2018 $ — Acquisition of Fitlosophy 1,390 Impairment charge (1,390) Balance as of December 31, 2018 $ — The gross carrying amount and accumulated amortization of other intangible assets is as follows (in thousands): December 31, 2019 March 31, 2019 December 31, 2018 Gross Accumulated Gross Accumulated Gross Accumulated Tradenames and trademarks $ 15,054 $ — $ 15,054 $ — $ 24,353 $ — Customer relationships 44,037 25,960 44,037 23,942 48,657 22,955 Favorable lease contracts — — 3,882 1,016 3,882 837 Trademarks 2,435 862 2,435 645 2,435 572 Patents 1,466 1,157 1,466 1,059 1,164 1,027 Covenants not to compete 530 518 530 457 530 430 $ 63,522 $ 28,497 $ 67,404 $ 27,119 $ 81,021 $ 25,821 Amortization expense related to intangible assets was $796,000 and $1,294,000 for the quarters ended December 31, 2019 and 2018, respectively, and was $2,394,000 and $3,861,000 for the nine months ended December 31, 2019 and 2018. Based on the current composition of other intangibles, amortization expense for the remainder of fiscal 2020 and each of the succeeding four years is projected to be as follows (in thousands): Remainder of fiscal 2020 $ 790 Fiscal 2021 2,997 Fiscal 2022 2,900 Fiscal 2023 2,604 Fiscal 2024 2,518 |
Short-Term Borrowings And Credi
Short-Term Borrowings And Credit Arrangements | 9 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Short-Term Borrowings And Credit Arrangements | SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS On March 7, 2019, the Company entered into a $125,000,000 asset based senior secured credit facility with three banks (the “ABL Credit Facility”). The Company used the proceeds from borrowings under the ABL Credit Facility to repay in full the Company’s prior credit facility with two banks (the “Prior Credit Facility”), under which the maximum credit available to the Company at any one time (the “Committed Amount”) was $50,000,000 at the time the Prior Credit Facility was repaid and terminated on March 7, 2019. The ABL Credit Facility has a maturity date of March 7, 2024, unless earlier terminated. On May 23, 2019, the Company entered into a Second Amendment (the “Amendment”) to the ABL Credit Facility. The Amendment reduced the maximum amount available under the revolving credit facility from $125,000,000 to $100,000,000. Availability under the Amendment is equal to the lesser of $100,000,000 or a Borrowing Base (as defined in the Amendment), in each case minus (i) revolving loans outstanding and (ii) $15,000,000 until the administrative agent's ("Agent") receipt of a compliance certificate demonstrating compliance with the amended financial covenants. The Amendment requires the Company to not permit the Fixed Charge Coverage Ratio (as defined in the Amendment), as of the end of any calendar month (commencing with the twelve-month period ending March 31, 2020), to be less than 1.00 to 1.00. In addition, commencing with the month ending April 30, 2019 and continuing until the month ending March 31, 2020, the Company is required to have, at the end of each calendar month during such period, EBITDA for the corresponding period (which such period shall be based on a cumulative monthly build-up commencing with the month ending April 30, 2019) then ending of not less than the corresponding amount set forth in the Amendment. The Amendment also limits Capital Expenditures (as defined in the Amendment) for fiscal 2020 to $8,000,000 or less. The $15,000,000 availability block mentioned above was reduced to $10,000,000 for the period beginning August 20, 2019 to September 10, 2019, $11,000,000 for the period beginning September 10, 2019 to September 24, 2019, and $12,500,000 for the period beginning September 24, 2019 to October 4, 2019. On November 13, 2019, the Company and the lenders under the ABL Credit Facility entered into a Limited Consent and Waiver (the “Limited Consent”) which reduced the minimum cumulative EBITDA (as defined in the ABL Credit Facility) levels required to be attained by the Company as of the end of each calendar month for the months of October 2019 through March 2020. The Limited Consent also increased the availability block from $15,000,000 to $20,000,000 from November 13, 2019 until November 30, 2019, and it provides for further increases thereof in increments of $1,000,000 beginning on December 1, 2019 and every two weeks thereafter until the availability block reaches $25,000,000 on February 1, 2020 and remains at that level thereafter unless and until the Company demonstrates compliance as of March 31, 2020 with each of the financial covenants contained in the ABL Credit Facility. Under the Limited Consent, the lenders waived any events of default that may have resulted from the Company’s adoption of the Rights Plan (see Note 11) on November 11, 2019. In connection with the Limited Consent, the Company paid a consent fee of $500,000. See Note 13 for more information on the Additional Limited Consent signed by the Company on February 4, 2020. Permitted Acquisitions (as defined in the ABL Credit Facility) are no longer permitted under the Amendment, and certain Restricted Payments (as defined in the ABL Credit Facility), including dividends previously allowed based upon meeting certain leverage ratio and average Availability (as defined in the ABL Credit Facility) criteria, are no longer allowed. At the Company’s election, loans made under the ABL Credit Facility will bear interest at either: (i) a base rate (“Base Rate”) plus an applicable rate or (ii) an “Adjusted LIBO Rate” (as defined in the ABL Credit Facility) plus an applicable rate, subject to adjustment if an event of default under the ABL Credit Facility has occurred and is continuing. The Base Rate means the highest of (a) the Agent’s “prime rate,” (b) the federal funds effective rate plus 0.50% and (c) the Adjusted LIBO Rate for an interest period of one month plus 1%. During the period prior to March 31, 2020, Adjusted LIBO Rate loans made under the ABL Credit Facility will bear interest at the Adjusted LIBO Rate plus an applicable rate of 2.50%, and Base Rate loans made under the ABL Credit Facility will bear interest at the Base Rate plus an applicable rate of 1.50%. After March 31, 2020, the applicable rate will be adjusted based on the Company’s Fixed Charge Coverage Ratio (as defined in the ABL Credit Facility) as further set forth in the ABL Credit Facility. Additionally, the Company is subject to a commitment fee equal to 0.25% per annum on the average daily unused portion of the revolving commitment, payable monthly to the Agent for the ratable benefit of the lenders. The ABL Credit Facility is secured by a first priority perfected security interest in substantially all of the assets of the Company, including certain real estate, subject to certain exceptions and exclusions as set forth in the ABL Credit Facility and other loan documents, including the Pledge and Security Agreement (the “Pledge Agreement”) entered into by the Company and the Agent contemporaneously with their execution of the ABL Credit Facility. The ABL Credit Facility contains certain affirmative and negative covenants that are binding on the Company, including, but not limited to, restrictions (subject to specified exceptions and qualifications) on the ability of the Company to incur indebtedness, to create liens, to merge or consolidate, to make dispositions, to make restricted payments such as dividends, distributions or equity repurchases, to make investments or undertake acquisitions, to prepay other indebtedness, to enter into certain transactions with affiliates, to enter into sale and leaseback transactions, or to enter into any restrictive agreements. In addition, the ABL Credit Facility requires the Company to abide by certain financial covenants calculated for the Company and its subsidiaries as noted above. The ABL Credit Facility contains customary events of default (which are in some cases subject to certain exceptions, thresholds, notice requirements and grace periods), including, but not limited to, non-payment of principal or interest or other amounts, misrepresentations, failure to perform or observe covenants, cross-defaults with certain other material indebtedness, certain change in control events, voluntary or involuntary bankruptcy proceedings, certain judgments or decrees, failure of the ABL Credit Facility o r other loan documents to be in full force and effect, certain ERISA events and judgments. The ABL Credit Facility also contains certain prepayment provisions, representations, warranties and conditions. As of December 31, 2019, the Company was in compliance with all debt covenants under the ABL Credit Facility. Under the ABL Credit Facility, all collections on account of collateralized accounts receivable are required to be deposited into lock boxes that are subject to the control of the Agent for the ABL Credit Facility (“Agent-Controlled Lock Boxes”). All funds deposited into Agent-Controlled Lock Boxes are swept daily and are required to be applied by the Agent as repayments of amounts owed by the Company under the ABL Credit Facility. Accordingly, the Company has classified its outstanding loan balance under the ABL Credit Facility as a current liability. The outstanding balance under the ABL Credit Facility as of December 31, 2019 and March 31, 2019 was $38,805,000 and $26,139,000, respectively. As of December 31, 2018, there was $58,695,000 outstanding under the Company's Prior Credit Facility classified as a current liability. The Company leases certain equipment under finance leases which are classified in the accompanying consolidated balance sheets as follows (in thousands): December 31, 2019 March 31, 2019 December 31, 2018 Current portion of long-term debt $ 11 $ 143 $ 132 Long-term debt, net of current portion 4 13 16 $ 15 $ 156 $ 148 The Company also finances certain equipment which is classified in the accompanying consolidated balance sheets as follows (in thousands): December 31, 2019 March 31, 2019 December 31, 2018 Current portion of long-term debt $ — $ 173 $ 173 Long-term debt, net of current portion — — — $ — $ 173 $ 173 |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIESCSS and its subsidiaries are involved in ordinary, routine legal proceedings that are not considered by management to be material. In the opinion of Company counsel and management, the ultimate liabilities resulting from such legal proceedings will not materially affect the consolidated financial position of the Company or its results of operations or cash flows. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements The Company historically used certain derivative financial instruments as part of its risk management strategy to reduce interest rate and foreign currency risk. The Company recognized all derivatives on the consolidated balance sheets at fair value based on quotes obtained from financial institutions. As of March 31, 2019, the interest rate swap agreement was discontinued and the fair value of the interest rate swap agreement as of March 31, 2019 of $580,000 was reclassified into earnings with a realized loss included in other expense (income), net in the consolidated statement of operations and comprehensive income (loss). There was no interest rate swap agreement as of December 31, 2019. There were no foreign currency contracts outstanding as of December 31, 2019 and March 31, 2019. The Company maintains a nonqualified Deferred Compensation Plan (the "Deferred Comp Plan") for qualified employees. The Deferred Comp Plan provides eligible key employees with the opportunity to elect to defer up to 50% of their eligible compensation under the Deferred Comp Plan. The Company may make matching or discretionary contributions, at the discretion of the Board. All compensation deferred under the Deferred Comp Plan is held by the Company. The Company maintains separate accounts for each participant to reflect deferred contribution amounts and the related gains or losses on such deferred amounts. A participant’s account is notionally invested in one or more investment funds and the value of the account is determined with respect to such investment allocations. The related liability is recorded as deferred compensation and included in other long-term obligations in the consolidated balance sheets as of December 31, 2019 and March 31, 2019. The Company maintains life insurance policies in connection with the Deferred Comp Plan discussed above. The Company also maintains two life insurance policies in connection with separate deferred compensation arrangements with two former executives. The cash surrender value of the policies is recorded in other long-term assets in the consolidated balance sheets and is based on quotes obtained from insurance companies as of December 31, 2019 and March 31, 2019. In connection with the acquisition of Fitlosophy in fiscal 2019, the Company may pay up to an additional $10,500,000 of contingent earn-out consideration, in cash, if net sales of certain products meet or exceed five different thresholds during the period from the acquisition date through March 31, 2023. The estimated fair value of the contingent earn-out consideration is determined using a Monte Carlo simulation discounted to a present value which is accreted over the earn-out period. The contingent consideration liability is included in accrued other expenses in the consolidated balance sheets as of March 31, 2019. As of September 30, 2019, the estimated fair value of the contingent earn-out consideration was reduced to zero, and it remains unchanged as of December 31, 2019, as the projected sales for the certain products that qualify for the earn-out are less than the required thresholds. Selected information relating to the aforementioned contingent consideration follows (in thousands): Contingent Earn-out Consideration Estimated fair value as of June 1, 2018 $ 1,600 Accretion 64 Remeasurement adjustment (298) Contingent Earn-out Consideration as of March 31, 2019 1,366 Accretion 16 Contingent Earn-out Consideration as of June 30, 2019 1,382 Accretion 10 Remeasurement adjustment (1,392) Contingent Earn-out Consideration as of September 30 and December 31, 2019 $ — To increase consistency and comparability in fair value measurements, the FASB established a fair value hierarchy that prioritizes the inputs to valuation techniques into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial assets and liabilities fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The Company’s recurring assets and liabilities recorded on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows: Level 1 – Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access. Level 2 – Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Examples of Level 2 inputs include quoted prices for identical or similar assets or liabilities in non-active markets and pricing models whose inputs are observable for substantially the full term of the asset or liability. Level 3 – Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. The following table presents the Company’s fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis in its consolidated balance sheets as of December 31, 2019 and March 31, 2019 (in thousands): December 31, 2019 Quoted Prices In Significant Other Significant Assets: Cash surrender value of life insurance policies $ 3,117 $ — $ 3,117 $ — Total assets $ 3,117 $ — $ 3,117 $ — Liabilities: Deferred compensation plan $ 1,315 $ 1,315 $ — $ — Total liabilities $ 1,315 $ 1,315 $ — $ — March 31, 2019 Quoted Prices In Significant Other Significant Assets: Cash surrender value of life insurance policies $ 2,765 $ — $ 2,765 $ — Total assets $ 2,765 $ — $ 2,765 $ — Liabilities: Contingent earn-out consideration $ 1,366 $ — $ — $ 1,366 Interest rate swap agreement 580 — 580 — Deferred compensation plan 1,156 1,156 — — Total liabilities $ 3,102 $ 1,156 $ 580 $ 1,366 Cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reflected at carrying value in the consolidated balance sheets and such amounts are a reasonable estimate of their fair values due to the short-term nature of these instruments. The outstanding balance of the Company’s short-term borrowings and long-term debt approximated its fair value based on the current rates available to the Company for debt of the same maturity and represents Level 2 financial instruments. Nonrecurring Fair Value Measurements The Company’s nonfinancial assets which are measured at fair value on a nonrecurring basis include property, plant and equipment, intangible assets and certain other assets. These assets are not measured at fair value on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence that an impairment may exist. In making the assessment of impairment, recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset group to future net cash flows estimated by the Company to be generated by such assets. If such asset group is considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of are recorded at the lower of their carrying value or estimated net realizable value. As discussed in Note 2, a subsidiary of the Company acquired substantially all of the business and net assets of Fitlosophy on June 1, 2018 and determined that the aggregate fair value of acquired intangible assets, consisting of tradenames, was $2,032,000. The Company estimated the fair value of the aforementioned acquired intangible assets using discounted cash flow techniques which included an estimate of future cash flows discounted to present value with an appropriate risk-adjusted discount rate (Level 3). The Company determined that the aggregate fair value of the acquired inventory in the Fitlosophy acquisition was $452,000, which was estimated as the selling price less costs of disposal (Level 2). The Company estimated the fair value of the Fitlosophy contingent earn-out consideration of $1,600,000 using a Monte Carlo simulation discounted to a present value (Level 3). See above for further discussion on subsequent remeasurement of the contingent earn-out consideration. Indefinite-lived intangibles are subject to impairment testing on an annual basis, or sooner if events or circumstances indicate a condition of impairment may exist. Impairment testing is conducted through valuation methods that are based on assumptions for matters such as interest and discount rates, growth projections and other future business conditions (Level 3). These valuation methods require a significant degree of management judgment concerning the use of internal and external data. In the event these methods indicate that fair value is less than the carrying value, the asset is recorded at fair value as determined by the valuation models. In the first quarter of fiscal 2019, the Company recorded an impairment charge of $1,390,000 due to impairment of goodwill associated with the acquisition of Fitlosophy. See Note 6 for further discussion. |
Income Taxes
Income Taxes | 9 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. Management assesses all available positive and negative evidence to estimate whether sufficient future taxable income will be generated to realize existing deferred tax assets. A significant piece of objective negative evidence evaluated in fiscal 2019 was the cumulative U.S. pretax loss incurred over the then most recent three-year period. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future taxable income. On the basis of that evaluation, as of December 31, 2018, a full valuation allowance was recorded to fully offset the U.S. net deferred tax assets, as they more likely than not will not be realized. Management updated this assessment as of December 31, 2019, and concluded that the full valuation allowance for U.S. net deferred tax assets is still required. The Company recognizes the impact of an uncertain tax position if it is more likely than not that such position will be sustained on audit, based solely on the technical merits of the position. The income tax provision for interim periods is comprised of tax on ordinary income (loss) provided at the most recent estimated annual effective tax rate, adjusted for the tax effect of discrete items. Management estimates the annual effective tax rate quarterly based on the forecasted pretax income (loss) results of its U.S. and non-U.S. jurisdictions. Items unrelated to current fiscal year ordinary income (loss) are recognized entirely in the period identified as a discrete item of tax. These discrete items generally relate to changes in tax laws, adjustments to the actual liability determined upon filing tax returns, and adjustments to previously recorded reserves for uncertain tax positions. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS' EQUITY Stockholder Rights Plan On November 11, 2019, the Company’s Board adopted a short-term stockholder rights plan (the “Rights Plan”) and declared a dividend distribution of one right (a “Right”) for each outstanding share of common stock, with a record date of November 22, 2019. The Rights Plan will expire, without any further action by the Board, on the earlier of November 11, 2020 or the business day immediately following the Company’s next annual meeting of stockholders, absent an extension being approved by the Company’s stockholders. Each Right initially entitles the holder to purchase from the Company one one-thousandth of a share of a newly-designated series of preferred stock, Series D Junior Participating Class 2 Preferred Stock, par value $0.01 per share, of the Company (each, a “Series D Preferred Share”), at an exercise price of $22.00 per one one-thousandth of a Series D Preferred Share, subject to adjustment. Under the Rights Plan, the Rights generally would become exercisable only if a person or group acquires beneficial ownership of 10% or more (or, solely in the case of certain current, ordinary course institutional investors as described in the Rights Plan, 20% or more) of CSS’ common stock in a transaction not approved by the Board. In that situation, each holder of a Right (other than the acquiring person or group, whose Rights will become void and will not be exercisable) will have the right to purchase, upon payment of the exercise price of $22.00 per share, subject to adjustment, and in accordance with the terms of the Rights Plan, a number of shares of CSS common stock having a market value of twice such price. In addition, if CSS is acquired in a merger or other business combination after an acquiring person acquires 10% or more (or, solely in the case of certain current, ordinary course institutional investors as described in the Rights Plan, 20% or more) of CSS’ common stock, each holder of the Right would thereafter have the right to purchase, upon payment of the exercise price and in accordance with the terms of the Rights Plan, a number of shares of common stock of the acquiring person having a market value of twice such price. The acquiring person or group would not be entitled to exercise these Rights. In the Rights Plan, the definition of “beneficial ownership” includes derivative securities. Stockholders who beneficially owned 10% or more of CSS’ outstanding common stock prior to CSS’ first public announcement of the adoption of the Rights Plan on November 11, 2019, will not trigger any penalties under the Rights Plan so long as they do not acquire beneficial ownership of any additional shares of common stock at a time when they still beneficially own 10% or more (or, solely in the case of certain current, ordinary course institutional investors as described in the Rights Plan, 20% or more) of such common stock, subject to certain exceptions as described in the Rights Plan. In connection with the transactions contemplated by the Merger Agreement as described in Note 13, the Board exempted Parent, Merger Sub and TopCo Parent, as well as the Merger Agreement and the transactions contemplated thereby, from the Rights Plan. Treasury Stock Transactions |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Dec. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In August 2018, the FASB issued Accounting Standards Update ("ASU") 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which is designed to improve the effectiveness of disclosures by removing, modifying and adding disclosures related to fair value measurements. The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this standard, but it does not expect that it will have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefits Plans" ("ASU 2018-14"), which is designed to improve the effectiveness of disclosures by removing and adding disclosures related to defined benefit pension or other postretirement plans. ASU 2018-14 is required to be applied on a retrospective basis to all periods presented and is effective for the Company in its fiscal year ending March 31, 2021. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard, but it does not expect that it will have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 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," ("ASU 2018-15"). ASU 2018-15 aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the updated guidance requires an entity to determine the stage of a project that the implementation activity relates to and the nature of the associated costs in order to determine whether those costs should be expensed as incurred or capitalized. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this standard, but it does not expect that it will have a material impact on the Company's consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," which removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. ASU 2019-12 also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The new guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this standard. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this standard, but it does not expect that it will have a material impact on the Company's consolidated financial statements. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Merger Agreement On January 20, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with IG Design Group Americas, Inc., a Georgia corporation (“Parent”), TOM MERGER SUB INC., a Delaware corporation and direct, wholly owned subsidiary of Parent (“Merger Sub”), and IG Design Group Plc, a public limited company incorporated and registered in England and Wales (“TopCo Parent”). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, on January 30, 2020, Merger Sub commenced a tender offer (the “Offer”) to purchase all of the outstanding shares of the Company’s common stock, par value $0.10 per share (“Company Common Stock”), at a price per share equal to $9.40 (the “Offer Price”), net to the seller in cash, without interest and subject to any applicable tax deduction or withholding. The obligation of Merger Sub to purchase shares of Company Common Stock tendered in the Offer is subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, including (i) a minimum of 51% of the shares of Company Common Stock then outstanding being tendered in the Offer, (ii) the accuracy of the Company’s representations and warranties contained in the Merger Agreement, subject to certain specified materiality qualifiers, (iii) the Company’s performance in all material respects of its obligations under the Merger Agreement, (iv) TopCo Parent’s receipt (either directly or indirectly through any of its subsidiaries) of the proceeds of the debt and equity financing or confirmation by the financing sources that the debt and equity financing will be available at the consummation of the Offer (the “Funding Condition”), and (v) each of the other conditions set forth in Exhibit B to the Merger Agreement. The Offer will expire at one minute after 11:59 p.m Eastern Standard Time, on February 28, 2020, which is the date that is 20 business days following the commencement of the Offer, unless extended in accordance with the terms of the Offer and the Merger Agreement and the applicable rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Subject to the provisions of the Merger Agreement and in accordance with Section 251(h) of the Delaware General Corporation Law, immediately following Merger Sub’s acceptance for payment (the “Acceptance Time”) of all shares of Company Common Stock validly tendered pursuant to the Offer (the “Offer Closing”), Merger Sub will merge with and into the Company, with the Company surviving the merger as the surviving corporation (the “Merger”), without a meeting of the stockholders of the Company. The Merger Agreement also contains certain termination provisions for the Company and Parent, including the right of the Company, in certain circumstances, to terminate the Merger Agreement and accept a superior proposal. The Company will be required to pay Parent a cash termination fee equal to $3,000,000 if the Merger Agreement is terminated (i) by Parent because the Board changes its recommendation to stockholders to accept the Offer and tender their shares of Company Common Stock in the Offer, (ii) by the Company to enter into a definitive agreement with respect to a superior proposal, or (iii) (1) (A) by either the Company or Parent because the Acceptance Time has not occurred by 11:59 p.m. New York City time on June 4, 2020 or (B) by Parent because the Company breaches any representation or warranty or fails to perform any covenant or agreement such that the Company’s offer conditions could not be satisfied, (2) an alternative competing transaction was publicly announced or publicly known prior to such termination, and (3) within 12 months after such termination, the Company consummates an alternative competing transaction or enters into an agreement with respect to an alternative competing transaction. TopCo Parent will be required to pay the Company a cash termination fee equal to (i) $4,500,000 if the Merger Agreement is terminated by the Company or Parent due to Merger Sub’s failure to effect the Offer Closing when all of the offer conditions (other than the Funding Condition) have been satisfied, and (ii) $2,250,000 if the Merger Agreement is terminated by the Company because, by the date that is the earlier of (x) 60 business days from the date of the Merger Agreement and (y) 35 business days following the failure to obtain the resolution of its shareholders to disapply all applicable pre-emptive rights in connection with the equity financing at a shareholder meeting held for such purpose, TopCo Parent has failed to confirm in writing that it has available cash in an amount which, together with the debt financing and any available cash of the Company and its subsidiaries as of the closing, is required to pay the Merger Amounts (as defined in the Merger Agreement). On January 31, 2020, the Company filed its Solicitation/Recommendation Statement on Schedule 14D-9 (as amended or supplemented from time to time, the “Schedule 14D-9”) with the United States Securities and Exchange Commission (the “SEC”) in connection with the Merger Agreement. Subsequent to the Company filing the Schedule 14D-9, various complaints have been filed by purported stockholders of the Company. As of February 13, 2020, the Company had received the following complaints: Shiva Stein v. CSS Industries, Inc., et al., Case No. 1:20-cv-00171-RGA, filed February 3, 2020 in the United States District Court for the District of Delaware; Adrienne Halberstam v. CSS Industries, Inc., et al., Case No. 1:20-cv-01075-RA, filed February 7, 2020 in the United States District Court for the Southern District of New York; and Joseph Post v. CSS Industries, Inc., et al., Case No. 1:20-cv-00192-UNA, filed February 10, 2020 in the United States District Court for the District of Delaware. The complaints name as defendants the Company and its current directors. In addition, the Post complaint is a putative class action, and in addition names Parent, TopCo Parent and Merger Sub as defendants. The complaints generally allege that the Schedule 14D-9 omits purportedly material information. Each of the complaints seeks, among other things, to enjoin the consummation of the Offer unless and until the requested information is disclosed or, alternatively, to recover damages if the Offer is consummated without the disclosure of such information. While it is not possible to predict the outcome of litigation matters with certainty, the Company believes that the claims raised in the foregoing complaints are without merit. Additional Limited Consent under ABL Credit Facility On February 4, 2020, the Company and the lenders under the ABL Credit Facility (see Note 7) entered into a Limited Consent (the “Additional Limited Consent”) which temporarily reduces the availability block imposed under the ABL Credit Facility from $25,000,000 to $23,000,000. The Additional Limited Consent permits the Company, in accordance with the terms of the Additional Limited Consent, to exercise two additional reductions of the availability block, each in $1,000,000 increments. In the event that the Company exercises both of the foregoing additional availability block reductions in accordance with the terms of the Additional Limited Consent, the availability block would be temporarily reduced to $21,000,000. The Additional Limited Consent further provides that the availability block will be reinstated to $25,000,000 on the earliest of: (i) the Merger Effective Time (as defined in the Merger Agreement), (ii) the Termination Date (as defined in the Merger Agreement) or (iii) February 28, 2020. In connection with the Additional Limited Consent, there is a consent fee of $100,000 for the first $2,000,000 reduction, and an additional fee of $100,000 will be payable for each of the optional $1,000,000 reductions, but only if and to the extent the Company exercises its option to effectuate those reductions. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation CSS Industries, Inc. (collectively with its subsidiaries, “CSS” or the “Company”) has prepared the consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission. The Company has condensed or omitted certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States pursuant to such rules and regulations. In the opinion of management, the statements include all adjustments (which include normal recurring adjustments) required for a fair presentation of financial position, results of operations and cash flows for the interim periods presented. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2019. The results of operations for the interim periods are not necessarily indicative of the results for the full year. The Company’s fiscal year ends on March 31. References to a particular fiscal year refer to the fiscal year ending in March of that year. For example, “fiscal 2020” refers to the fiscal year ending March 31, 2020. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. |
Nature of Business | Nature of Business CSS is a creative consumer products company, focused on the craft, gift and seasonal categories. For these design-driven categories, the Company engages in the creative development, manufacture, procurement, distribution and sale of our products with an omni-channel approach focused primarily on mass market retailers. Craft The craft category includes sewing patterns, ribbons and trims, buttons, knitting needles, needle arts and kids' crafts. These products are sold to mass market, specialty, and online retailers, and are generally ordered on a replenishment basis throughout the year. Gift The gift category includes products designed to celebrate certain life events or special occasions, such as weddings, birthdays, anniversaries, graduations, or the birth of a child. Products include ribbons and bows, floral accessories, infant products, journals, gift card holders, all occasion boxed greeting cards, memory books, scrapbooks, stationery, and other items that commemorate life's celebrations. Products in this category are primarily sold into mass, specialty, and online retailers, floral and packaging wholesalers and distributors, and are generally ordered on a replenishment basis throughout the year. Seasonal The seasonal category includes holiday gift packaging items such as ribbon, bows, greeting cards, bags, tags and gift card holders, in addition to specific holiday-themed decorations, accessories, and activities, such as Easter egg dyes and novelties and Valentine's Day classroom exchange cards. These products are sold to mass market retailers, and production forecasts for these products are generally known well in advance of shipment. CSS’ product breadth provides its retail customers the opportunity to use a single vendor for much of their craft, gift and seasonal product requirements. A substantial portion of CSS’ products are manufactured and packaged in the United States and warehoused and distributed from facilities in the United States, the United Kingdom and Australia, with the remainder sourced from foreign suppliers, primarily in Asia. The Company also has a manufacturing facility in India that produces certain craft products, including trims, braids and tassels, and also has a distribution facility in India. The Company’s products are sold to its customers by national and regional account sales managers, sales representatives, product specialists and by a network of independent manufacturers’ representatives. CSS maintains purchasing offices in Hong Kong and China to administer Asian sourcing opportunities. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The Company's foreign subsidiaries generally use the local currency as the functional currency. The Company translates all assets and liabilities at period end exchange rates and all income and expense accounts at average rates during the period. Translation adjustments are recorded in accumulated other comprehensive income (loss) in stockholders’ equity. Gains and losses on foreign currency transactions (denominated in currencies other than the local currency) are not material and are included in other expense (income), net in the consolidated statements of operations and comprehensive income (loss). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Judgments and assessments of uncertainties are required in applying the Company’s accounting policies in many areas. Such estimates pertain to revenue recognition, the valuation of inventory and accounts receivable, the assessment of the recoverability of other intangible and long-lived assets and resolution of litigation and other proceedings. Actual results could differ from these estimates. |
Inventories | InventoriesThe Company records inventory when title is transferred, which occurs upon receipt or prior to receipt dependent on supplier shipping terms. The Company adjusts unsaleable and slow-moving inventory to its estimated net realizable value. Substantially all of the Company’s inventories are stated at the lower of first-in, first-out (FIFO) cost or net realizable value. The remaining portion of the inventory is valued at the lower of last-in, first-out (LIFO) cost or net realizable value. |
Leases | Leases Effective April 1, 2019, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 842 - Leases ("ASC 842") using the modified retrospective transition approach. See Note 5 for more information. The Company determines if an arrangement is a lease at the inception of a contract. Operating lease right-of-use (“ROU”) assets are included in operating lease right-of-use assets on the consolidated balance sheets. The current and long-term components of operating lease liabilities are included in the current portion of operating lease liabilities and operating lease liabilities, respectively, on the consolidated balance sheets. Finance leases are not material to the Company’s consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available on the adoption date for existing leases and as of the commencement date for new leases in determining the present value of future payments. The operating lease ROU assets are subsequently measured throughout the lease term at the carrying amount of the lease liability, adjusted for any prepaid or accrued rent payments, lease incentives and initial direct costs incurred. Certain leases may include options to extend or terminate the lease. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company elected the package of transition practical expedients related to lease identification, lease classification, and initial direct costs. In addition, the Company made the following accounting policy elections for all asset classes: (1) the Company will not separate lease and non-lease components by class of underlying asset, (2) the Company will apply the short-term lease exemption by class of underlying asset, and, (3) the Company will apply the portfolio approach to the development of its discount rates for the leases to be recorded in accordance with ASC 842. The Company has chosen not to elect the hindsight practical expedient for its transition to ASC 842. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. |
Long-Lived Assets including Goodwill and Other Intangible Assets | Long-Lived Assets including Other Intangible Assets and Property, Plant and Equipment The Company performs an annual impairment test of the carrying amount of indefinite-lived intangible assets in the fourth quarter of its fiscal year. Additionally, the Company would perform its impairment testing at an interim date if events or circumstances indicate that intangibles might be impaired. Other indefinite lived intangible assets consist of tradenames which are required to be tested annually for impairment. An entity has the option to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. To perform a qualitative assessment, an entity must identify and evaluate changes in economic, industry and entity-specific events and circumstances that could affect the significant inputs used to determine the fair value of an indefinite-lived intangible asset. If the result of the qualitative analysis indicates it is more likely than not that an indefinite-lived intangible asset is impaired, a more detailed fair value calculation will need to be performed which is used to identify potential impairments and to measure the amount of impairment losses to be recognized, if any. The fair value of the Company’s tradenames is calculated using a “relief from royalty payments” methodology. This approach involves first estimating reasonable royalty rates for each trademark and then applying these royalty rates to a net sales stream and discounting the resulting cash flows to determine the fair value. The royalty rate is estimated using both a market and income approach. The market approach relies on the existence of identifiable transactions in the marketplace involving the licensing of tradenames similar to those owned by the Company. The income approach uses a projected pretax profitability rate relevant to the licensed income stream. The Company believes the use of multiple valuation techniques results in a more accurate indicator of the fair value of each tradename. This fair value is then compared with the carrying value of each tradename to determine if impairment exists. Long-lived assets (including property, plant and equipment), except for indefinite lived intangible assets, are reviewed for impairment when events or circumstances indicate the carrying value of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset group to future net cash flows estimated by the Company to be generated by such assets. If such asset group is considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of are recorded at the lower of their carrying value or estimated net realizable value. |
Revenue Recognition | Revenue Recognition Revenue from the sale of the Company's products is recognized when control of the promised goods is transferred to customers, in the amount that reflects the consideration the Company expects to be entitled to receive from its customers in exchange for those goods. The Company's revenue is recognized using the five-step model identified in ASC 606, "Revenue from Contracts with Customers." These steps are: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue as the performance obligations are satisfied. The Company's contracts with customers generally include one performance obligation under the revenue recognition standard. For most product sales, the performance obligation is the delivery of a specified product, and is satisfied at the point in time when control of the product has transferred to the customer, which takes place when title and risk of loss transfer in accordance with the applicable shipping terms, typically either at shipping point or at delivery to a specified destination. The Company has certain limited products, primarily sewing patterns, that are sold on consignment at mass market retailers. The Company recognizes revenue on these products as they are sold to end consumers as recorded at point-of-sale terminals, which is the point in time when control of the product is transferred to the customer. Revenue is recognized based on the consideration specified in a contract with the customer, and is measured as the amount of consideration to which the Company expects to be entitled to receive in exchange for transferring the goods. When applicable, the transaction price includes estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. Variable consideration consists of revenues that are subject to reductions to the transaction price for customer programs, which may include special pricing arrangements for specific customers, volume incentives and other promotions. The Company has significant historical experience with customer programs and estimates the expected consideration considering historical trends. The related reserves are included in accrued customer programs in the consolidated balance sheets. The Company adjusts its estimate of variable consideration at least quarterly or when facts and circumstances used in the estimation process may change. In limited cases, the Company may provide the right to return product to certain customers. The Company also records estimated reductions to revenue, based primarily on known claims, for customer returns and chargebacks that may arise as a result of shipping errors, product damaged in transit or for other reasons that become known subsequent to recognizing the revenue. These provisions are recorded in the period that the related sale is recognized and are reflected as a reduction from gross sales. The related reserves are included in accrued customer programs in the December 31, 2019 consolidated balance sheet and in accounts receivable, net of allowances in the March 31, 2019 and December31, 2018 consolidated balance sheets. If the amount of actual customer returns and chargebacks were to increase or decrease from the estimated amount, revisions to the estimated reserve would be recorded. The Company treats shipping and handling activities that occur until the customer has obtained control of a good as an activity to fulfill the promise to transfer the product. Costs related to shipping of product are recorded as incurred and classified in cost of sales in the consolidated statements of operations and comprehensive income (loss). Payment terms with customers vary by customer, but generally range from 30 to 90 days. Certain seasonal revenues have extended payment terms in accordance with general industry practice. Since the term between invoicing and expected payment is less than one year, the Company does not adjust the transaction price for the effects of a financing component. |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In August 2018, the FASB issued Accounting Standards Update ("ASU") 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which is designed to improve the effectiveness of disclosures by removing, modifying and adding disclosures related to fair value measurements. The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this standard, but it does not expect that it will have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefits Plans" ("ASU 2018-14"), which is designed to improve the effectiveness of disclosures by removing and adding disclosures related to defined benefit pension or other postretirement plans. ASU 2018-14 is required to be applied on a retrospective basis to all periods presented and is effective for the Company in its fiscal year ending March 31, 2021. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard, but it does not expect that it will have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 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," ("ASU 2018-15"). ASU 2018-15 aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the updated guidance requires an entity to determine the stage of a project that the implementation activity relates to and the nature of the associated costs in order to determine whether those costs should be expensed as incurred or capitalized. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this standard, but it does not expect that it will have a material impact on the Company's consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," which removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. ASU 2019-12 also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The new guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this standard. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this standard, but it does not expect that it will have a material impact on the Company's consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Inventories | Inventories consisted of the following (in thousands): December 31, 2019 March 31, 2019 December 31, 2018 Raw material $ 12,868 $ 14,246 $ 14,837 Work-in-process 15,628 16,816 10,581 Finished goods 58,494 65,169 69,484 $ 86,990 $ 96,231 $ 94,902 |
Property, Plant and Equipment | Property, plant and equipment are stated at cost and include the following (in thousands): December 31, 2019 March 31, 2019 December 31, 2018 Land $ 5,738 $ 5,738 $ 5,888 Buildings, leasehold interests and improvements 40,214 40,893 42,854 Machinery, equipment and other 119,946 113,946 110,524 165,898 160,577 159,266 Less - Accumulated depreciation and amortization (117,127) (109,657) (109,859) Net property, plant and equipment $ 48,771 $ 50,920 $ 49,407 |
Schedule of Segment Reporting | The following represents our net sales disaggregated by product category (in thousands): Three Months Ended December 31, Nine Months Ended December 31, 2019 2018 2019 2018 Craft $ 38,692 $ 39,764 109,352 117,524 Gift 25,170 29,543 68,629 84,197 Seasonal 49,070 63,924 88,462 108,538 Total $ 112,932 $ 133,231 $ 266,443 $ 310,259 |
Schedule of Accumulated Other Comprehensive Income (Loss) | Components of Accumulated Other Comprehensive Income (Loss), Net Three Months Ended December 31, Nine Months Ended December 31, 2019 2018 2019 2018 Accumulated effect of currency translation adjustment: Balance at beginning of period $ (507) $ 22 $ 12 $ 988 Currency translation adjustment during period 449 (183) (70) (1,149) Balance at end of period $ (58) $ (161) $ (58) $ (161) Accumulated effect of pension and postretirement benefits: Balance at beginning of period $ 453 $ 259 $ 453 $ 259 Pension and postretirement benefits during period 28 — 28 — Balance at end of period $ 481 $ 259 $ 481 $ 259 Accumulated effect of interest rate swap agreement: Balance at beginning of period $ — $ 392 $ — $ (84) Fair value adjustment — (585) — (109) Balance at end of period $ — $ (193) $ — $ (193) |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | The following table summarizes the purchase price at the date of acquisition (in thousands): Cash $ 2,500 Contingent earn-out consideration 1,600 Purchase price $ 4,100 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands): Accounts receivable $ 389 Inventory 452 Other assets 5 Total current assets 846 Intangible assets 2,032 Goodwill 1,390 Total assets acquired 4,268 Current liabilities (168) Net assets acquired $ 4,100 |
Restructuring Plans (Tables)
Restructuring Plans (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring and related costs | Selected information relating to the aforementioned restructuring follows (in thousands): Employee Termination Costs Facility Exit Costs Other Costs Total Restructuring reserve as of March 31, 2019 $ 1 $ 24 $ 14 $ 39 Charges (reversals) to expense (1) (24) 3 (22) Cash paid — — (6) (6) Restructuring reserve as of June 30, 2019 — — 11 11 Cash paid — — (2) (2) Restructuring reserve as of September 30, 2019 — — 9 9 Cash paid — — (2) (2) Restructuring reserve as of December 31, 2019 $ — $ — $ 7 $ 7 Selected information relating to the aforementioned restructuring follows (in thousands): Employee Termination Costs Facility Exit Costs Other Costs Total Initial reserve $ 297 $ 127 $ 133 $ 557 Cash paid — (13) (41) (54) Restructuring reserve as of September 30, 2018 297 114 92 503 Charges to expense 132 152 141 425 Cash paid (400) (74) (175) (649) Restructuring reserve as of December 31, 2018 $ 29 $ 192 $ 58 $ 279 Selected information relating to the aforementioned restructuring follows (in thousands): Employee Termination Costs Restructuring reserve as of March 31, 2019 $ 634 Cash paid (212) Restructuring reserve as of June 30, 2019 422 Cash paid (196) Charges (reversals) to expense (3) Restructuring reserve as of September 30, 2019 223 Cash paid (100) Restructuring reserve as of December 31, 2019 $ 123 Selected information relating to the aforementioned restructuring follows (in thousands): Employee Termination Costs Initial reserve $ 797 Restructuring reserve as of December 31, 2018 $ 797 Selected information relating to the aforementioned restructuring follows (in thousands): Employee Termination Costs Initial reserve $ 2,076 Cash paid (490) Restructuring reserve as of June 30, 2019 1,586 Cash paid (461) Charges (reversals) to expense (305) Restructuring reserve as of September 30, 2019 820 Cash paid (267) Restructuring reserve as of December 31, 2019 $ 553 Selected information relating to the aforementioned restructuring follows (in thousands): Employee Termination Costs Initial reserve $ 1,049 Cash paid (20) Restructuring reserve as of September 30, 2019 1,029 Cash paid (308) Charges (reversals) to expense (219) Restructuring reserve as of December 31, 2019 $ 502 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease, Cost | The components of lease costs are as follows (in thousands): Three Months Ended Nine Months Ended Lease costs: Operating lease costs $ 2,848 $ 8,601 Variable operating lease costs 79 233 Total $ 2,927 $ 8,834 Supplemental cash flow information is as follows (in thousands): Three Months Ended Nine Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,949 $ 6,013 Total $ 1,949 $ 6,013 Three Months Ended Nine Months Ended Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 629 $ 52,226 Total $ 629 $ 52,226 Weighted-average lease terms and discount rates are as follows: December 31, 2019 Weighted-average remaining lease term (years) of operating leases 6.8 Weighted-average discount rate of operating leases 5.8 % |
Lessee, Operating Lease, Liability, Maturity | The aggregate future lease payments for operating leases as of December 31, 2019 is projected to be as follows (in thousands): Remainder of fiscal 2020 $ 9,414 Fiscal 2021 8,410 Fiscal 2022 7,609 Fiscal 2023 6,368 Fiscal 2024 5,981 Thereafter 17,124 Total lease payments 54,906 Less: Interest (10,007) Present value of lease liabilities $ 44,899 |
Schedule of Future Minimum Rental Payments for Operating Leases | The future minimum lease payments associated with all non-cancelable lease obligations under ASC 840 as of March 31, 2019 were as follows (in thousands): Fiscal 2020 $ 10,520 Fiscal 2021 9,360 Fiscal 2022 8,446 Fiscal 2023 7,364 Fiscal 2024 6,200 Thereafter 21,818 Total lease payments $ 63,708 |
Goodwill And Other Intangible_2
Goodwill And Other Intangible Assets (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in the carrying amount of goodwill during the nine months ended December 31, 2018 is as follows (in thousands): Balance as of March 31, 2018 $ — Acquisition of Fitlosophy 1,390 Impairment charge (1,390) Balance as of December 31, 2018 $ — |
Gross Carrying Amount and Accumulated Amortization of Other Intangible Assets | The gross carrying amount and accumulated amortization of other intangible assets is as follows (in thousands): December 31, 2019 March 31, 2019 December 31, 2018 Gross Accumulated Gross Accumulated Gross Accumulated Tradenames and trademarks $ 15,054 $ — $ 15,054 $ — $ 24,353 $ — Customer relationships 44,037 25,960 44,037 23,942 48,657 22,955 Favorable lease contracts — — 3,882 1,016 3,882 837 Trademarks 2,435 862 2,435 645 2,435 572 Patents 1,466 1,157 1,466 1,059 1,164 1,027 Covenants not to compete 530 518 530 457 530 430 $ 63,522 $ 28,497 $ 67,404 $ 27,119 $ 81,021 $ 25,821 |
Schedule of Future Amortization Expense | Based on the current composition of other intangibles, amortization expense for the remainder of fiscal 2020 and each of the succeeding four years is projected to be as follows (in thousands): Remainder of fiscal 2020 $ 790 Fiscal 2021 2,997 Fiscal 2022 2,900 Fiscal 2023 2,604 Fiscal 2024 2,518 |
Short-Term Borrowings And Cre_2
Short-Term Borrowings And Credit Arrangements (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long term debt | The Company leases certain equipment under finance leases which are classified in the accompanying consolidated balance sheets as follows (in thousands): December 31, 2019 March 31, 2019 December 31, 2018 Current portion of long-term debt $ 11 $ 143 $ 132 Long-term debt, net of current portion 4 13 16 $ 15 $ 156 $ 148 The Company also finances certain equipment which is classified in the accompanying consolidated balance sheets as follows (in thousands): December 31, 2019 March 31, 2019 December 31, 2018 Current portion of long-term debt $ — $ 173 $ 173 Long-term debt, net of current portion — — — $ — $ 173 $ 173 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | Selected information relating to the aforementioned contingent consideration follows (in thousands): Contingent Earn-out Consideration Estimated fair value as of June 1, 2018 $ 1,600 Accretion 64 Remeasurement adjustment (298) Contingent Earn-out Consideration as of March 31, 2019 1,366 Accretion 16 Contingent Earn-out Consideration as of June 30, 2019 1,382 Accretion 10 Remeasurement adjustment (1,392) Contingent Earn-out Consideration as of September 30 and December 31, 2019 $ — |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company’s fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis in its consolidated balance sheets as of December 31, 2019 and March 31, 2019 (in thousands): December 31, 2019 Quoted Prices In Significant Other Significant Assets: Cash surrender value of life insurance policies $ 3,117 $ — $ 3,117 $ — Total assets $ 3,117 $ — $ 3,117 $ — Liabilities: Deferred compensation plan $ 1,315 $ 1,315 $ — $ — Total liabilities $ 1,315 $ 1,315 $ — $ — March 31, 2019 Quoted Prices In Significant Other Significant Assets: Cash surrender value of life insurance policies $ 2,765 $ — $ 2,765 $ — Total assets $ 2,765 $ — $ 2,765 $ — Liabilities: Contingent earn-out consideration $ 1,366 $ — $ — $ 1,366 Interest rate swap agreement 580 — 580 — Deferred compensation plan 1,156 1,156 — — Total liabilities $ 3,102 $ 1,156 $ 580 $ 1,366 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | |||
Raw material | $ 12,868 | $ 14,246 | $ 14,837 |
Work-in-process | 15,628 | 16,816 | 10,581 |
Finished goods | 58,494 | 65,169 | 69,484 |
Inventory, net | $ 86,990 | $ 96,231 | $ 94,902 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) shares in Thousands | Oct. 29, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Jun. 01, 2018 | Nov. 03, 2017 | Dec. 13, 2016 |
Net Investment Income [Line Items] | |||||||||
Remaining amount of inventory acquired | $ 0 | $ 1,135,000 | $ 0 | $ 1,135,000 | $ 284,000 | ||||
Asset held for sale | 0 | 2,514,000 | 0 | 2,514,000 | $ 131,000 | ||||
Consideration for sale of facility | $ 750,000 | ||||||||
Proceeds from sale of fixed assets | 708,000 | 1,025,000 | 0 | ||||||
Legal fees incurred | $ 24,000 | ||||||||
Depreciation expense | $ 2,586,000 | $ 2,249,000 | 7,469,000 | 6,403,000 | |||||
Impairment of property, plant and equipment | $ 0 | $ 1,398,000 | |||||||
Effective antidilutive securities excluded from computation of net income per share (in shares) | 259 | 513 | 576 | 503 | |||||
The McCall Pattern Company | |||||||||
Net Investment Income [Line Items] | |||||||||
Step up to fair value of inventory acquired | $ 21,773,000 | ||||||||
Simplicity Creative Group | |||||||||
Net Investment Income [Line Items] | |||||||||
Step up to fair value of inventory acquired | $ 10,214,000 | ||||||||
Fitlosophy, Inc. | |||||||||
Net Investment Income [Line Items] | |||||||||
Step up to fair value of inventory acquired | $ 312,000 | ||||||||
Minimum | |||||||||
Net Investment Income [Line Items] | |||||||||
Revenue payment terms | 30 days | ||||||||
Maximum | |||||||||
Net Investment Income [Line Items] | |||||||||
Revenue payment terms | 90 days |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 165,898 | $ 160,577 | $ 159,266 |
Less - Accumulated depreciation and amortization | (117,127) | (109,657) | (109,859) |
Net property, plant and equipment | 48,771 | 50,920 | 49,407 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 5,738 | 5,738 | 5,888 |
Buildings, leasehold interests and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 40,214 | 40,893 | 42,854 |
Machinery, equipment and other | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 119,946 | $ 113,946 | $ 110,524 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 112,932 | $ 133,231 | $ 266,443 | $ 310,259 |
Craft | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 38,692 | 39,764 | 109,352 | 117,524 |
Gift | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 25,170 | 29,543 | 68,629 | 84,197 |
Seasonal | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 49,070 | $ 63,924 | $ 88,462 | $ 108,538 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Components of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 178,868 | $ 223,609 | $ 189,931 | $ 253,695 |
OCI, gain (loss) | 477 | (768) | (42) | (1,258) |
Ending balance | 186,987 | 214,192 | 186,987 | 214,192 |
Accumulated effect of currency translation adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (507) | 22 | 12 | 988 |
OCI, gain (loss) | 449 | (183) | (70) | (1,149) |
Ending balance | (58) | (161) | (58) | (161) |
Accumulated effect of pension and postretirement benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 453 | 259 | 453 | 259 |
OCI, gain (loss) | 28 | 0 | 28 | 0 |
Ending balance | 481 | 259 | 481 | 259 |
Accumulated effect of interest rate swap agreement | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 0 | 392 | 0 | (84) |
OCI, gain (loss) | 0 | (585) | 0 | (109) |
Ending balance | $ 0 | $ (193) | $ 0 | $ (193) |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) | Jun. 01, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Business Acquisition [Line Items] | ||||||
Cash | $ 0 | $ 2,500,000 | ||||
Goodwill | 0 | $ 0 | $ 0 | $ 0 | ||
Fitlosophy, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 2,500,000 | |||||
Contingent consideration | 10,500,000 | $ 10,500,000 | ||||
Contingent earn-out consideration | 1,600,000 | |||||
Goodwill | $ 1,390,000 | $ 1,390,000 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquisition (Details) - USD ($) $ in Thousands | Jun. 01, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Cash | $ 0 | $ 2,500 | |
Fitlosophy, Inc. | |||
Business Acquisition [Line Items] | |||
Cash | $ 2,500 | ||
Contingent earn-out consideration | 1,600 | ||
Purchase price | $ 4,100 |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired and Liabilities Assumed (Details) - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 01, 2018 | Mar. 31, 2018 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 0 | $ 0 | $ 0 | $ 0 | ||
Fitlosophy, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Accounts receivable | $ 389,000 | |||||
Inventory | 452,000 | |||||
Other assets | 5,000 | |||||
Total current assets | 846,000 | |||||
Intangible assets | 2,032,000 | |||||
Goodwill | $ 1,390,000 | 1,390,000 | ||||
Total assets acquired | 4,268,000 | |||||
Current liabilities | (168,000) | |||||
Net assets acquired | $ 4,100,000 |
Restructuring Plans - Additiona
Restructuring Plans - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||||||
Impairment of property, plant and equipment | $ 0 | $ 1,398 | |||||
Restructuring reserve | $ 553 | 553 | |||||
United Kingdom and Australia Restructuring Plan | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Impairment of property, plant and equipment | 1,398 | ||||||
Restructuring reserve | 7 | 7 | 279 | $ 9 | $ 11 | $ 39 | $ 503 |
Strategic Business Initiative | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring reserve | 123 | 123 | $ 797 | ||||
Performance Improvement Initiative | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring reserve | 553 | 553 | |||||
Resource Alignment Initiative | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring reserve | 502 | 502 | |||||
Location Consolidation Initiative | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Accelerated amortization | $ 823 | $ 823 |
Restructuring Plans - Restructu
Restructuring Plans - Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||||||
Cash paid | $ (267) | |||||||
Charges (reversals) to expense | 604 | $ 1,050 | $ 3,399 | $ 3,177 | ||||
Restructuring reserve, ending balance | 553 | 553 | ||||||
United Kingdom and Australia Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Initial reserve | $ 557 | |||||||
Cash paid | (2) | $ (2) | $ (6) | (649) | (54) | |||
Restructuring reserve, beginning balance | 9 | 11 | 39 | 503 | $ 39 | 39 | ||
Charges (reversals) to expense | (22) | 425 | ||||||
Restructuring reserve, ending balance | 7 | 9 | 11 | 279 | 9 | 503 | 7 | 279 |
United Kingdom and Australia Restructuring Plan | Employee Termination Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Initial reserve | 297 | |||||||
Cash paid | 0 | 0 | 0 | (400) | 0 | |||
Restructuring reserve, beginning balance | 0 | 0 | 1 | 297 | 1 | 1 | ||
Charges (reversals) to expense | (1) | 132 | ||||||
Restructuring reserve, ending balance | 0 | 0 | 0 | 29 | 0 | 297 | 0 | 29 |
United Kingdom and Australia Restructuring Plan | Facility Exit Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Initial reserve | 127 | |||||||
Cash paid | 0 | 0 | 0 | (74) | (13) | |||
Restructuring reserve, beginning balance | 0 | 0 | 24 | 114 | 24 | 24 | ||
Charges (reversals) to expense | (24) | 152 | ||||||
Restructuring reserve, ending balance | 0 | 0 | 0 | 192 | 0 | 114 | 0 | 192 |
United Kingdom and Australia Restructuring Plan | Other Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Initial reserve | 133 | |||||||
Cash paid | (2) | (2) | (6) | (175) | (41) | |||
Restructuring reserve, beginning balance | 9 | 11 | 14 | 92 | 14 | 14 | ||
Charges (reversals) to expense | 3 | 141 | ||||||
Restructuring reserve, ending balance | 7 | 9 | 11 | 58 | 9 | $ 92 | 7 | 58 |
Strategic Business Initiative | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring reserve, ending balance | 123 | 797 | 123 | 797 | ||||
Strategic Business Initiative | Employee Termination Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Initial reserve | 797 | |||||||
Cash paid | (100) | (196) | (212) | |||||
Restructuring reserve, beginning balance | 223 | 422 | 634 | 634 | 634 | |||
Charges (reversals) to expense | (3) | |||||||
Restructuring reserve, ending balance | 123 | 223 | 422 | $ 797 | 223 | 123 | $ 797 | |
Performance Improvement Initiative | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring reserve, ending balance | 553 | 553 | ||||||
Performance Improvement Initiative | Employee Termination Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Cash paid | (461) | (490) | ||||||
Restructuring reserve, beginning balance | 820 | 1,586 | 2,076 | 2,076 | 2,076 | |||
Charges (reversals) to expense | (219) | (305) | ||||||
Restructuring reserve, ending balance | 820 | 1,586 | 820 | |||||
Resource Alignment Initiative | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring reserve, ending balance | 502 | 502 | ||||||
Resource Alignment Initiative | Employee Termination Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Cash paid | (308) | (20) | ||||||
Restructuring reserve, beginning balance | 1,029 | $ 1,049 | 1,049 | 1,049 | ||||
Restructuring reserve, ending balance | $ 502 | $ 1,029 | $ 1,029 | $ 502 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options granted during the period (in shares) | 0 | |||
Selling, General and Administrative Expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost related to stock options and RSUs recognized | $ 405 | $ 637 | $ 669 | $ 1,694 |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options outstanding (in shares) | 259,000 | 259,000 | ||
Total unrecognized compensation cost related to non-vested stock option awards | $ 276 | $ 276 | ||
Equity incentive plan, weighted average recognition period | 1 year 2 months 12 days | |||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSUs granted during the period (in shares) | 352,666 | 201,013 | ||
Weighted average fair value of restricted stock granted (in dollars per share) | $ 5.63 | $ 14.46 | ||
RSUs outstanding (in shares) | 455,682 | 455,682 | ||
Equity incentive plan, weighted average recognition period | 1 year 8 months 12 days | |||
Total unrecognized compensation cost related to non-vested RSUs | $ 1,847 | $ 1,847 | ||
2013 Equity Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of grant | 10 years | |||
Shares available for grant (in shares) | 529,574 | 529,574 | ||
2013 Equity Compensation Plan | Service-Based Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award service period | 1 year | |||
Vesting rate percentage | 25.00% | |||
Third Anniversary | 2013 Equity Compensation Plan | Service-Based RSUs | Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rate percentage | 50.00% | |||
Fourth Anniversary | 2013 Equity Compensation Plan | Service-Based RSUs | Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rate percentage | 50.00% | |||
Vesting beginning of each year | 2013 Equity Compensation Plan | Service-Based RSUs | Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rate percentage | 25.00% |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Apr. 01, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 44,702 | $ 0 | $ 0 | |
Operating lease, liability | $ 44,899 | |||
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 51,486 | |||
Operating lease, liability | 50,180 | |||
Reduction in favorable lease assets | 2,866 | |||
Net deferred rent liabilities | $ 1,560 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Lease costs: | |||
Operating lease costs | $ 2,848 | $ 8,601 | |
Variable operating lease costs | 79 | 233 | |
Total lease costs | 2,927 | 8,834 | |
Operating cash flows for operating leases | 1,949 | 6,013 | $ 0 |
Right-of-use assets obtained in exchange for lease obligations | $ 629 | $ 52,226 | |
Weighted-average remaining lease term (years) of operating leases | 6 years 9 months 18 days | 6 years 9 months 18 days | |
Weighted-average discount rate of operating leases | 5.80% | 5.80% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Remainder of fiscal 2020 | $ 9,414 |
Fiscal 2021 | 8,410 |
Fiscal 2022 | 7,609 |
Fiscal 2023 | 6,368 |
Fiscal 2024 | 5,981 |
Thereafter | 17,124 |
Total lease payments | 54,906 |
Less: Interest | (10,007) |
Present value of lease liabilities | $ 44,899 |
Leases - Maturities of Operat_2
Leases - Maturities of Operating Lease Liabilities Prior To ASC 842 (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Fiscal 2020 | $ 10,520 |
Fiscal 2021 | 9,360 |
Fiscal 2022 | 8,446 |
Fiscal 2023 | 7,364 |
Fiscal 2024 | 6,200 |
Thereafter | 21,818 |
Total lease payments | $ 63,708 |
Goodwill And Other Intangible_3
Goodwill And Other Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 01, 2018 | Mar. 31, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||
Goodwill | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||
Amortization expense related to intangible assets | $ 796,000 | $ 1,294,000 | $ 2,394,000 | $ 3,861,000 | ||||
Fitlosophy, Inc. | ||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||
Goodwill | $ 1,390,000 | $ 1,390,000 |
Goodwill And Other Intangible_4
Goodwill And Other Intangible Assets - Goodwill Rollforward (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||||
Beginning balance | $ 0 | $ 0 | ||
Acquisition of Fitlosophy | 1,390,000 | |||
Impairment charge | $ 0 | $ 0 | 0 | (1,390,000) |
Ending balance | $ 0 | $ 0 | $ 0 | $ 0 |
Goodwill And Other Intangible_5
Goodwill And Other Intangible Assets - Gross Carrying Amount and Accumulated Amortization of Other Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 63,522 | $ 67,404 | $ 81,021 |
Accumulated Amortization | 28,497 | 27,119 | 25,821 |
Tradenames and trademarks | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Gross carrying amount | 15,054 | 15,054 | 24,353 |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 44,037 | 44,037 | 48,657 |
Accumulated Amortization | 25,960 | 23,942 | 22,955 |
Favorable lease contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 0 | 3,882 | 3,882 |
Accumulated Amortization | 0 | 1,016 | 837 |
Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 2,435 | 2,435 | 2,435 |
Accumulated Amortization | 862 | 645 | 572 |
Patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 1,466 | 1,466 | 1,164 |
Accumulated Amortization | 1,157 | 1,059 | 1,027 |
Covenants not to compete | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 530 | 530 | 530 |
Accumulated Amortization | $ 518 | $ 457 | $ 430 |
Goodwill And Other Intangible_6
Goodwill And Other Intangible Assets - Schedule of Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of fiscal 2020 | $ 790 |
Fiscal 2021 | 2,997 |
Fiscal 2022 | 2,900 |
Fiscal 2023 | 2,604 |
Fiscal 2024 | $ 2,518 |
Short-Term Borrowings And Cre_3
Short-Term Borrowings And Credit Arrangements - Additional Information (Details) | Nov. 11, 2019USD ($) | Mar. 07, 2019USD ($)bank | Feb. 01, 2020USD ($) | Mar. 31, 2020 | Feb. 04, 2020USD ($) | Dec. 31, 2019USD ($) | Nov. 30, 2019USD ($) | Oct. 04, 2019USD ($) | Sep. 24, 2019USD ($) | Sep. 10, 2019USD ($) | May 23, 2019USD ($) | Mar. 31, 2019USD ($) | Mar. 06, 2019USD ($)bank | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | ||||||||||||||
Long-term debt, net of current portion | $ 4,000 | $ 13,000 | $ 16,000 | |||||||||||
Capital Lease Obligations | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Current portion of long-term debt | 11,000 | 143,000 | 132,000 | |||||||||||
Long-term debt, net of current portion | 4,000 | 13,000 | 16,000 | |||||||||||
Long term debt | 15,000 | 156,000 | 148,000 | |||||||||||
Financed Computer Equipment | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Current portion of long-term debt | 0 | 173,000 | 173,000 | |||||||||||
Long-term debt, net of current portion | 0 | 0 | 0 | |||||||||||
Long term debt | 0 | 173,000 | 173,000 | |||||||||||
ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Maximum borrowing capacity | $ 125,000,000 | $ 100,000,000 | ||||||||||||
Revolving credit facility agreement with number of banks | bank | 3 | |||||||||||||
Reduction in borrowing capacity | $ 20,000,000 | $ 12,500,000 | $ 11,000,000 | $ 10,000,000 | $ 15,000,000 | |||||||||
Fixed charge coverage ratio | 1 | |||||||||||||
Capital expenditures | $ 8,000,000 | |||||||||||||
Consent fees | $ 500,000 | |||||||||||||
Unused commitment fee percentage | 0.25% | |||||||||||||
ABL Credit Facility | Subsequent Event | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Reduction in borrowing capacity | $ 25,000,000 | $ 23,000,000 | ||||||||||||
Borrowing capacity incremental increase | $ 1,000,000 | |||||||||||||
Revolving Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Borrowings outstanding | $ 38,805,000 | $ 26,139,000 | ||||||||||||
Prior Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Maximum borrowing capacity | $ 50,000,000 | |||||||||||||
Revolving credit facility agreement with number of banks | bank | 2 | |||||||||||||
Borrowings outstanding | $ 58,695,000 | |||||||||||||
Federal Funds Effective Swap Rate | ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Variable rate | 0.50% | |||||||||||||
London Interbank Offered Rate (LIBOR) | ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Variable rate | 1.00% | |||||||||||||
Forecast | London Interbank Offered Rate (LIBOR) | ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Variable rate | 2.50% | |||||||||||||
Forecast | Base Rate | ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Variable rate | 1.50% |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |||||||
Dec. 31, 2019USD ($)executiveInsurancePolicy | Dec. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2019USD ($)executiveInsurancePolicy | Dec. 31, 2018USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jun. 01, 2018USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Foreign currency contract outstanding | $ 0 | $ 0 | $ 0 | ||||||
Impairment of goodwill | 0 | $ 0 | 0 | $ 1,390,000 | |||||
Recurring Fair Value Measurements | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Liability outstanding | $ 1,315,000 | $ 1,315,000 | 3,102,000 | ||||||
Number of life insurance policies | InsurancePolicy | 2 | 2 | |||||||
Number of former executives | executive | 2 | 2 | |||||||
Nonqualified Deferred Compensation Plan | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Percentage of compensation eligible to be deferred | 50.00% | 50.00% | |||||||
Fitlosophy, Inc. | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Contingent consideration | $ 10,500,000 | $ 10,500,000 | $ 10,500,000 | ||||||
Contingent earn-out consideration | 1,600,000 | ||||||||
Intangible assets | 2,032,000 | ||||||||
Inventory | 452,000 | ||||||||
Impairment of goodwill | $ 1,390,000 | ||||||||
Interest Rate Swap | Recurring Fair Value Measurements | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Liability outstanding | 0 | 0 | 580,000 | ||||||
Contingent Earn-Out Consideration | Fitlosophy, Inc. | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Contingent earn-out consideration | $ 0 | $ 0 | $ 0 | $ 1,382,000 | $ 1,366,000 | $ 1,600,000 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 10 Months Ended | ||
Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Accretion | $ 26,000 | $ 44,000 | |||
Remeasurement adjustment | (1,392,000) | $ 0 | |||
Fitlosophy, Inc. | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Contingent Earn-out Consideration, beginning balance | $ 1,600,000 | ||||
Contingent Earn-Out Consideration | Fitlosophy, Inc. | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Contingent Earn-out Consideration, beginning balance | $ 1,382,000 | $ 1,366,000 | 1,366,000 | 1,600,000 | |
Accretion | 10,000 | 16,000 | 64,000 | ||
Remeasurement adjustment | (1,392,000) | (298,000) | |||
Contingent Earn-out Consideration, ending balance | $ 0 | $ 1,382,000 | $ 0 | $ 1,366,000 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring Fair Value Measurements - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 |
Assets: | ||
Total assets | $ 3,117,000 | $ 2,765,000 |
Liabilities: | ||
Total liabilities | 1,315,000 | 3,102,000 |
Contingent earn-out consideration | ||
Liabilities: | ||
Total liabilities | 1,366,000 | |
Interest rate swap agreement | ||
Liabilities: | ||
Total liabilities | 0 | 580,000 |
Deferred compensation plan | ||
Liabilities: | ||
Total liabilities | 1,315,000 | 1,156,000 |
Cash surrender value of life insurance policies | ||
Assets: | ||
Total assets | 3,117,000 | 2,765,000 |
Quoted Prices In Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Total liabilities | 1,315,000 | 1,156,000 |
Quoted Prices In Active Markets for Identical Assets (Level 1) | Contingent earn-out consideration | ||
Liabilities: | ||
Total liabilities | 0 | |
Quoted Prices In Active Markets for Identical Assets (Level 1) | Interest rate swap agreement | ||
Liabilities: | ||
Total liabilities | 0 | |
Quoted Prices In Active Markets for Identical Assets (Level 1) | Deferred compensation plan | ||
Liabilities: | ||
Total liabilities | 1,315,000 | 1,156,000 |
Quoted Prices In Active Markets for Identical Assets (Level 1) | Cash surrender value of life insurance policies | ||
Assets: | ||
Total assets | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets | 3,117,000 | 2,765,000 |
Liabilities: | ||
Total liabilities | 0 | 580,000 |
Significant Other Observable Inputs (Level 2) | Contingent earn-out consideration | ||
Liabilities: | ||
Total liabilities | 0 | |
Significant Other Observable Inputs (Level 2) | Interest rate swap agreement | ||
Liabilities: | ||
Total liabilities | 580,000 | |
Significant Other Observable Inputs (Level 2) | Deferred compensation plan | ||
Liabilities: | ||
Total liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Cash surrender value of life insurance policies | ||
Assets: | ||
Total assets | 3,117,000 | 2,765,000 |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Total liabilities | 0 | 1,366,000 |
Significant Unobservable Inputs (Level 3) | Contingent earn-out consideration | ||
Liabilities: | ||
Total liabilities | 1,366,000 | |
Significant Unobservable Inputs (Level 3) | Interest rate swap agreement | ||
Liabilities: | ||
Total liabilities | 0 | |
Significant Unobservable Inputs (Level 3) | Deferred compensation plan | ||
Liabilities: | ||
Total liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Cash surrender value of life insurance policies | ||
Assets: | ||
Total assets | $ 0 | $ 0 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 11, 2019 | Mar. 31, 2019 | |
Equity [Abstract] | ||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||
Exercise price (in dollars per share) | $ 22 | |||||
Threshold for exercise | 10.00% | |||||
Threshold for exercise feature for certain current investors | 20.00% | |||||
Number of shares repurchased (in shares) | 0 | 303,166 | ||||
Value of shares repurchased | $ 744 | $ 3,628 | $ 4,372 | |||
Number of remaining shares authorized to be repurchased (in shares) | 0 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) | Feb. 04, 2020 | Jan. 20, 2020 | Nov. 11, 2019 | Feb. 01, 2020 | Dec. 31, 2019 | Nov. 30, 2019 | Oct. 04, 2019 | Sep. 24, 2019 | Sep. 10, 2019 | May 23, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | ||||||||||||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | |||||||||
ABL Credit Facility | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Reduction in borrowing capacity | $ 20,000,000 | $ 12,500,000 | $ 11,000,000 | $ 10,000,000 | $ 15,000,000 | |||||||
Consent fees | $ 500,000 | |||||||||||
Subsequent Event | ABL Credit Facility | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Reduction in borrowing capacity | $ 23,000,000 | $ 25,000,000 | ||||||||||
Borrowing capacity, incremental decrease | 1,000,000 | |||||||||||
Borrowing capacity, temporary reduction | 21,000,000 | |||||||||||
Subsequent Event | First Reduction | ABL Credit Facility | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Consent fees | 100,000 | |||||||||||
Borrowing capacity, incremental decrease | 2,000,000 | |||||||||||
Subsequent Event | Subsequent Reductions | ABL Credit Facility | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Consent fees | 100,000 | |||||||||||
Borrowing capacity, incremental decrease | $ 1,000,000 | |||||||||||
Subsequent Event | Discontinued Operations, Disposed of by Sale | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Common stock, par value (in dollars per share) | $ 0.10 | |||||||||||
Cash paid per share (in dollars per share) | $ 9.40 | |||||||||||
Merger agreement, termination fee due to Company failing to perform covenants | $ 3,000,000 | |||||||||||
Merger agreement, termination fee due to Parent's failure to effect offer closing | 4,500,000 | |||||||||||
Merger agreement,termination fee due to Parent's failure to report availability of cash | $ 2,250,000 |