Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2017 | Nov. 02, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MOTORCAR PARTS AMERICA INC | |
Entity Central Index Key | 918,251 | |
Current Fiscal Year End Date | --03-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 19,069,594 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2017 | Mar. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 15,090,000 | $ 9,029,000 |
Short-term investments | 2,568,000 | 2,140,000 |
Accounts receivable - net | 12,393,000 | 26,017,000 |
Inventory - net | 88,902,000 | 67,516,000 |
Inventory unreturned | 7,704,000 | 7,581,000 |
Prepaid expenses and other current assets | 17,178,000 | 9,848,000 |
Total current assets | 143,835,000 | 122,131,000 |
Plant and equipment - net | 19,868,000 | 18,437,000 |
Long-term core inventory - net | 265,564,000 | 262,922,000 |
Long-term core inventory deposits | 5,569,000 | 5,569,000 |
Long-term deferred income taxes | 14,079,000 | 13,546,000 |
Goodwill | 2,551,000 | 2,551,000 |
Intangible assets - net | 4,191,000 | 3,993,000 |
Other assets | 5,807,000 | 6,990,000 |
TOTAL ASSETS | 461,464,000 | 436,139,000 |
Current liabilities: | ||
Accounts payable | 85,028,000 | 85,960,000 |
Accrued liabilities | 9,061,000 | 10,077,000 |
Customer finished goods returns accrual | 13,421,000 | 17,667,000 |
Accrued core payment | 11,360,000 | 11,714,000 |
Revolving loan | 36,000,000 | 11,000,000 |
Other current liabilities | 3,565,000 | 3,300,000 |
Current portion of term loan | 3,060,000 | 3,064,000 |
Total current liabilities | 161,495,000 | 142,782,000 |
Term loan, less current portion | 15,401,000 | 16,935,000 |
Long-term accrued core payment | 6,808,000 | 12,349,000 |
Long-term deferred income taxes | 205,000 | 180,000 |
Other liabilities | 3,459,000 | 15,212,000 |
Total liabilities | 187,368,000 | 187,458,000 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock | 0 | 0 |
Common stock; par value $.01 per share, 50,000,000 shares authorized; 19,062,869 and 18,648,854 shares issued and outstanding at September 30, 2017 and March 31, 2017, respectively | 191,000 | 186,000 |
Additional paid-in capital | 216,176,000 | 205,646,000 |
Retained earnings | 64,217,000 | 50,290,000 |
Accumulated other comprehensive loss | (6,488,000) | (7,441,000) |
Total shareholders' equity | 274,096,000 | 248,681,000 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 461,464,000 | 436,139,000 |
Series A Junior Participating Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock | $ 0 | $ 0 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2017 | Mar. 31, 2017 |
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, issued (in shares) | 19,062,869 | 18,648,854 |
Common stock, outstanding (in shares) | 19,062,869 | 18,648,854 |
Series A Junior Participating Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 20,000 | 20,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Consolidated Statements of Operations (Unaudited) [Abstract] | ||||
Net sales | $ 111,774,000 | $ 108,836,000 | $ 206,837,000 | $ 194,248,000 |
Cost of goods sold | 84,612,000 | 78,178,000 | 153,836,000 | 143,199,000 |
Gross profit | 27,162,000 | 30,658,000 | 53,001,000 | 51,049,000 |
Operating expenses: | ||||
General and administrative | 8,615,000 | 9,869,000 | 14,802,000 | 13,494,000 |
Sales and marketing | 3,457,000 | 2,707,000 | 6,851,000 | 5,341,000 |
Research and development | 1,240,000 | 905,000 | 2,242,000 | 1,774,000 |
Total operating expenses | 13,312,000 | 13,481,000 | 23,895,000 | 20,609,000 |
Operating income | 13,850,000 | 17,177,000 | 29,106,000 | 30,440,000 |
Interest expense, net | 3,522,000 | 3,189,000 | 6,836,000 | 6,008,000 |
Income before income tax expense | 10,328,000 | 13,988,000 | 22,270,000 | 24,432,000 |
Income tax expense | 4,027,000 | 4,845,000 | 8,343,000 | 7,781,000 |
Net income | $ 6,301,000 | $ 9,143,000 | $ 13,927,000 | $ 16,651,000 |
Basic net income per share (in dollars per share) | $ 0.34 | $ 0.49 | $ 0.75 | $ 0.90 |
Diluted net income per share (in dollars per share) | $ 0.33 | $ 0.47 | $ 0.72 | $ 0.86 |
Weighted average number of shares outstanding: | ||||
Basic (in shares) | 18,718,709 | 18,641,324 | 18,687,179 | 18,544,118 |
Diluted (in shares) | 19,356,809 | 19,429,390 | 19,371,144 | 19,384,668 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Consolidated Statements of Comprehensive Income (Unaudited) [Abstract] | ||||
Net income | $ 6,301,000 | $ 9,143,000 | $ 13,927,000 | $ 16,651,000 |
Other comprehensive income (loss), net of tax: | ||||
Unrealized gain on short-term investments (net of tax of $40,000, $44,000, $78,000, and $59,000) | 60,000 | 66,000 | 116,000 | 88,000 |
Foreign currency translation gain (loss) | 608,000 | (807,000) | 837,000 | (1,342,000) |
Total other comprehensive gain (loss), net of tax | 668,000 | (741,000) | 953,000 | (1,254,000) |
Comprehensive income | $ 6,969,000 | $ 8,402,000 | $ 14,880,000 | $ 15,397,000 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other comprehensive income (loss), net of tax: | ||||
Unrealized gain on short-term investments, tax | $ 40,000 | $ 44,000 | $ 78,000 | $ 59,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 13,927,000 | $ 16,651,000 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation | 1,828,000 | 1,480,000 |
Amortization of intangible assets | 325,000 | 290,000 |
Amortization of debt issuance costs | 426,000 | 355,000 |
Amortization of interest on accrued core payments | 269,000 | 370,000 |
Gain due to change in fair value of the warrant liability | (2,313,000) | (4,765,000) |
Gain due to change in fair value of the contingent consideration | 0 | (16,000) |
Net provision for inventory reserves | 3,258,000 | 1,020,000 |
Net provision for customer payment discrepancies | 604,000 | 7,000 |
Net recovery of doubtful accounts | (2,000) | (12,000) |
Deferred income taxes | (433,000) | (1,167,000) |
Share-based compensation expense | 1,744,000 | 1,737,000 |
Loss on disposal of plant and equipment | 7,000 | 1,000 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable | 14,683,000 | (7,493,000) |
Inventory | (18,718,000) | (14,305,000) |
Inventory unreturned | (123,000) | 292,000 |
Prepaid expenses and other current assets | (6,093,000) | (1,936,000) |
Other assets | 1,198,000 | (4,549,000) |
Accounts payable and accrued liabilities | (3,465,000) | 288,000 |
Customer finished goods returns accrual | (4,246,000) | (6,615,000) |
Long-term core inventory | (5,155,000) | (10,643,000) |
Accrued core payments | (6,164,000) | 2,261,000 |
Other liabilities | 295,000 | 4,433,000 |
Net cash used in operating activities | (8,148,000) | (22,316,000) |
Cash flows from investing activities: | ||
Purchase of plant and equipment | (2,460,000) | (2,594,000) |
Purchase of business, net of cash acquired | (4,974,000) | (600,000) |
Change in short-term investments | (226,000) | (270,000) |
Net cash used in investing activities | (7,660,000) | (3,464,000) |
Cash flows from financing activities: | ||
Borrowings under revolving loan | 52,000,000 | 24,000,000 |
Repayments of revolving loan | (27,000,000) | (12,000,000) |
Repayments of term loan | (1,563,000) | (1,563,000) |
Payments for debt issuance costs | (443,000) | (444,000) |
Payments on capital lease obligations | (392,000) | (221,000) |
Payment of contingent consideration | 0 | (314,000) |
Exercise of stock options | 295,000 | 1,047,000 |
Cash used to net share settle equity awards | (594,000) | (1,057,000) |
Settlement of warrant | 4,000,000 | 0 |
Repurchase of common stock, including fees | (4,476,000) | 0 |
Net cash provided by financing activities | 21,827,000 | 9,448,000 |
Effect of exchange rate changes on cash and cash equivalents | 42,000 | (113,000) |
Net increase (decrease) in cash and cash equivalents | 6,061,000 | (16,445,000) |
Cash and cash equivalents - Beginning of period | 9,029,000 | 21,897,000 |
Cash and cash equivalents - End of period | 15,090,000 | 5,452,000 |
Cash paid during the period for: | ||
Interest, net | 6,121,000 | 5,224,000 |
Income taxes, net of refunds | 11,672,000 | 5,063,000 |
Non-cash investing and financing activities: | ||
Plant and equipment acquired under capital lease | $ 498,000 | $ 312,000 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Sep. 30, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2018. This report should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2017, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on June 14, 2017, as amended by the Form 10-K/A filed with the SEC on July 31, 2017. The accompanying consolidated financial statements have been prepared on a consistent basis with, and there have been no material changes to, except as noted below, the accounting policies described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements that are presented in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017. |
Company Background and Organiza
Company Background and Organization | 6 Months Ended |
Sep. 30, 2017 | |
Company Background and Organization [Abstract] | |
Company Background and Organization | 1. Company Background and Organization Motorcar Parts of America, Inc. and its subsidiaries (the “Company”, or “MPA”) is a leading manufacturer, remanufacturer, and distributor of aftermarket automotive parts. These replacement parts are sold for use on vehicles after initial vehicle purchase. These automotive parts are sold to automotive retail chain stores and warehouse distributors throughout North America and to major automobile manufacturers for both their aftermarket programs and warranty replacement programs (“OES”). The Company’s products include systems for alternators and starters, electric vehicle power-train and battery technology The Company obtains used automotive parts, commonly known as Used Cores, primarily from its customers under the Company’s core exchange program. It also purchases Used Cores from vendors (core brokers). The customers grant credit to the consumer when the used part is returned to them, and the Company in turn provides a credit to the customers upon return to the Company. These Used Cores are an essential material needed for the remanufacturing operations. The Company has remanufacturing, warehousing and shipping/receiving operations for automotive parts in North America and Asia. In addition, the Company utilizes various third party warehouse distribution centers in North America. Pursuant to the guidance provided under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), for segment reporting, the Company has identified its chief executive officer as its chief operating decision maker (“CODM”), has reviewed the documents used by the CODM, and understands how such documents are used by the CODM to make financial and operating decisions. The Company has determined through this review process that it has one reportable segment for purposes of recording and reporting its financial |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Sep. 30, 2017 | |
New Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements | 2. New Accounting Pronouncements New Accounting Pronouncements Not Yet Adopted Revenue Recognition In May 2014, the FASB issued guidance codified in ASC 606, “Revenue Recognition - Revenue from Contracts with Customers” (“ASC 606”), which amends the guidance in the former ASC 605, “Revenue Recognition”. ASC 606 is effective for annual periods beginning after December 15, 2016, and interim periods within that reporting period for a public company. The Company may elect either a full retrospective transition method, which requires the restatement of all periods presented, or a modified retrospective transition method, which requires a cumulative effect recognized as of the date of initial application to be used in transition. In August 2015, the FASB delayed the effective date by one year to annual periods beginning after December 15, 2017, and interim periods within that reporting period for a public company. Accordingly, the updated standard is effective for the Company as of April 1, 2018 and the Company does not plan to early adopt. The Company is currently in the process of determining whether it will utilize the full or modified retrospective method of adoption allowed by the new standard and the impact on its consolidated financial statements and footnote disclosures. The determination of utilizing the full retrospective or modified retrospective method of adoption will be driven by the changes required by ASC 606 and the Company’s ability to recast past financial statements based upon those requirements. The Company will continue to provide enhanced disclosures as it continues its assessment. ASC 606 establishes the requirements for recognizing revenue from contracts with customers. The standard requires entities to apportion consideration from contracts to performance obligations on a relative standalone selling price basis, based on a five-step model. Under the new standard, revenue is recognized when a customer obtains control of a promised good or service and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for the good or service. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Due to the impact the new standard may have on the Company’s business processes, systems, and controls, a project team has been formed to evaluate and guide the implementation process. The Company has performed a preliminary assessment, which has included the identification of the key revenue streams and the comparison of historical accounting policies and practices to the requirements of the new standard by revenue stream. The assessment has resulted in the identification of potential accounting differences that may arise from the application of the new standard. The implementation team has also made substantial progress in the contract review phase of the project which includes identifying the population of contracts for a deeper analysis of the potential accounting impacts due to the new standard for individual contracts. During the second quarter, the team continued to identify changes to business processes, systems and controls to support recognition, presentation and disclosure under the new standard. A detailed implementation plan for the second half of fiscal 2018 has been developed and includes tasks around data gathering, identification of the new journal entries, training, design of new processes and controls as well as testing of the controls. The Company anticipates that the adoption of ASU 2014-09 will primarily impact the timing of revenue recognition for nominally priced Remanufactured Cores not expected to be replaced by a similar Used Core sent back under the core exchange program and will result in an acceleration of revenue recognition in addition to some changes to revenue related disclosures and financial statement presentation. Conversely, the Company does not expect there to be a significant effect, other than classification, upon the balance sheet for anticipated returned cores. The Company currently accounts for fully priced Remanufactured Cores anticipated to be returned as long term core inventory. Under ASC 606, the Company will reclassify this asset to a contractual asset and recognize a contractual liability for amounts expected to be refunded to customers. For certain contracts, the Company offers customer incentives that may be considered a material right to the customer under ASC 606. These incentives may result in the Company having multiple performance obligations in an agreement and may delay the timing of revenues. In addition, certain payments made to customers in connection with future contracts may be deferred and amortized over future periods. While the Company has made substantial progress in identifying the likely impacts of the new standard, it has not yet determined a range of the potential quantitative impact. ASC 606 provides several practical expedients, for which the Company anticipates adopting. The first of these practical expedients allows a company to expense incremental costs of obtaining a contract as incurred if the amortization period would have been one year or less. Similarly, the Company plans to adopt guidance which allows for the effects of a significant financing component to be ignored if a company expects that the period between the transfer of the goods and services to the customer and payment will be one year or less. Finally, the Company plans to adopt guidance which allows a company to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations. The Company continues to evaluate the impact ASC 606, related amendments and interpretive guidance will have on its consolidated financial statements. Financial Instruments In January 2016, the FASB issued guidance that addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. A reporting entity should apply the new guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of the provisions of this guidance to its consolidated financial statements. Leases In February 2016, the FASB issued new guidance that requires balance sheet recognition of a right-of-use asset and lease liability by lessees for operating leases. The new guidance also requires new disclosures providing additional qualitative and quantitative information about the amounts recorded in the financial statements. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new guidance requires a modified retrospective approach with optional practical expedients. The Company will adopt this guidance in the first quarter of fiscal 2020. The Company is currently evaluating the impact the provisions of this guidance will have on its consolidated financial statements, but expects that it will result in a significant increase to its long-term assets and liabilities on the consolidated balance sheets. Business Combinations In January 2017, the FASB issued guidance which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. . The Company is currently evaluating the impact the provisions of this guidance will have on its consolidated financial statements. Goodwill Impairment In January 2017, the FASB issued guidance which simplifies the test for goodwill impairment. This standard eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption permitted. This guidance must be applied on a prospective basis. Modifications to Share-Based Payment Awards In May 2017, the FASB issued guidance to provide clarity and reduce (i) the diversity in practice and (ii) the cost and complexity when applying the accounting guidance for equity-based compensation to a change to the terms or conditions of a share-based payment award. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 with early adoption permitted. This guidance should be applied prospectively to an award modified on or after that adoption date. The Company is currently evaluating the impact the provisions of this guidance will have on its consolidated financial statements. Derivatives and Hedging In August 2017, the FASB issued guidance to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in this update also make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years; the guidance allows for early adoption in any interim period after issuance of the update. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. |
Acquisition
Acquisition | 6 Months Ended |
Sep. 30, 2017 | |
Acquisition [Abstract] | |
Acquisition | 3. Acquisition Pursuant to a share repurchase agreement dated July 18, 2017, the Company completed the acquisition of all the equity interests of D&V Electronics Ltd. (“D&V”) based in Ontario, Canada, a privately held developer and manufacturer of leading edge diagnostics systems for alternators and starters, electric vehicle power-train and battery technology. The Company allocated the initial purchase consideration to acquire D&V to finite-lived intangible assets of $323,000 for developed technology with an estimated useful life of 3 years and $197,000 for trademarks with an estimated useful life of 2 years, $3,383,000 for inventory, and other net assets of $1,071,000. The assets and results of operations of D&V were not significant to the Company’s consolidated financial position or results of operations, and thus pro forma information is not presented. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets Goodwill The following summarizes the changes in the Company’s goodwill: Six Months Ended September 30, 2017 2016 Balance at beginning of period $ 2,551,000 $ 2,053,000 Goodwill acquired - 423,000 Translation adjustment - - Impairment - - Balance at end of period $ 2,551,000 $ 2,476,000 Intangible Assets The following is a summary of acquired intangible assets subject to amortization: September 30, 2017 March 31, 2017 Weighted Average Amortization Period Gross Carrying Value Accumulated Amortization Gross Carrying Value Accumulated Amortization Intangible assets subject to amortization Trademarks 9 years $ 903,000 $ 240,000 $ 705,000 $ 191,000 Customer relationships 13 years 5,900,000 2,679,000 5,900,000 2,421,000 Developed technology 3 years 325,000 18,000 - - Total $ 7,128,000 $ 2,937,000 $ 6,605,000 $ 2,612,000 Amortization expense for acquired intangible assets is as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 Amortization expense $ 180,000 $ 145,000 $ 325,000 $ 290,000 The estimated future amortization expense for acquired intangible assets subject to amortization is as follows: Year Ending March 31, 2018 - remaining six months $ 394,000 2019 787,000 2020 721,000 2021 616,000 2022 580,000 Thereafter 1,093,000 Total $ 4,191,000 |
Accounts Receivable - Net
Accounts Receivable - Net | 6 Months Ended |
Sep. 30, 2017 | |
Accounts Receivable - Net [Abstract] | |
Accounts Receivable - Net | 5. Accounts Receivable — Net Included in accounts receivable — net are significant offset accounts related to customer allowances earned, customer payment discrepancies, returned goods authorizations (“RGA”) issued for in-transit unit returns, estimated future credits to be provided for Used Cores returned by the customers and potential bad debts. Due to the forward looking nature and the different aging periods of certain estimated offset accounts, the offset accounts may not, at any point in time, directly relate to the balances in the accounts receivable-trade account. Accounts receivable — net is comprised of the following: September 30, 2017 March 31, 2017 Accounts receivable — trade $ 80,510,000 $ 76,902,000 Allowance for bad debts (4,142,000 ) (4,140,000 ) Customer allowances earned (11,558,000 ) (7,880,000 ) Customer payment discrepancies (944,000 ) (751,000 ) Customer returns RGA issued (17,882,000 ) (12,710,000 ) Customer core returns accruals (33,591,000 ) (25,404,000 ) Less: total accounts receivable offset accounts (68,117,000 ) (50,885,000 ) Total accounts receivable — net $ 12,393,000 $ 26,017,000 Warranty Returns The Company allows its customers to return goods that their customers have returned to them, whether or not the returned item is defective (“warranty returns”). The Company accrues an estimate of its exposure to warranty returns based on a historical analysis of the level of this type of return as a percentage of total unit sales. Amounts charged to expense for these warranty returns are considered in arriving at the Company’s net sales. At September 30, 2017 and March 31, 2017, the Company’s total warranty return accrual was $14,799,000 and $14,286,000, respectively, of which $7,674,000 and $5,303,000, respectively, was included in the customer returns RGA issued balance in the above table for expected credits to be issued against accounts receivable and $7,125,000 and $8,983,000, respectively, was included in the customer finished goods returns accrual in the consolidated balance sheets for estimated future warranty returns. The following summarizes the changes in the Company’s warranty return accrual: Three Months Ended September 30, Six Months Ended September 30, 2017 2016 2017 2016 Balance at beginning of period $ 12,849,000 $ 11,559,000 $ 14,286,000 $ 10,845,000 Charged to expense/additions 29,359,000 28,179,000 51,565,000 50,873,000 Amounts processed (27,409,000 ) (26,031,000 ) (51,052,000 ) (48,011,000 ) Balance at end of period $ 14,799,000 $ 13,707,000 $ 14,799,000 $ 13,707,000 |
Inventory
Inventory | 6 Months Ended |
Sep. 30, 2017 | |
Inventory [Abstract] | |
Inventory | 6. Inventory Inventory is comprised of the following: September 30, 2017 March 31, 2017 Non-core inventory Raw materials $ 28,335,000 $ 21,515,000 Work-in-process 1,751,000 641,000 Finished goods 62,393,000 48,337,000 92,479,000 70,493,000 Less allowance for excess and obsolete inventory (3,577,000 ) (2,977,000 ) Total $ 88,902,000 $ 67,516,000 Inventory unreturned $ 7,704,000 $ 7,581,000 Long-term core inventory Used cores held at the Company’s facilities $ 40,150,000 $ 38,713,000 Used cores expected to be returned by customers 16,533,000 11,752,000 Remanufactured cores held in finished goods 34,688,000 27,667,000 Remanufactured cores held at customers’ locations (1) 176,479,000 185,938,000 267,850,000 264,070,000 Less allowance for excess and obsolete inventory (2,286,000 ) (1,148,000 ) Total $ 265,564,000 $ 262,922,000 Long-term core inventory deposits $ 5,569,000 $ 5,569,000 (1) Remanufactured cores held at customers’ locations represent the core portion of the Company’s customers’ finished goods at the Company’s customers’ locations. |
Significant Customer and Other
Significant Customer and Other Information | 6 Months Ended |
Sep. 30, 2017 | |
Significant Customer and Other Information [Abstract] | |
Significant Customer and Other Information | 7. Significant Customer and Other Information Significant Customer Concentrations The Company’s largest customers accounted for the following total percentage of net sales: Three Months Ended September 30, Six Months Ended September 30, Sales 2017 2016 2017 2016 Customer A 48 % 45 % 44 % 48 % Customer B 25 % 21 % 25 % 18 % Customer C 14 % 19 % 15 % 19 % Customer D 3 % 4 % 5 % 4 % The Company’s largest customers accounted for the following total percentage of accounts receivable—trade: Accounts receivable - trade September 30, 2017 March 31, 2017 Customer A 31 % 33 % Customer B 15 % 18 % Customer C 17 % 12 % Customer D 17 % 16 % Geographic and Product Information The Company’s products are predominantly sold in the U.S. and accounted for the following total percentage of net sales: Three Months Ended September 30, Six Months Ended September 30, 2017 2016 2017 2016 Rotating electrical products 76 % 80 % 77 % 76 % Wheel hub products 18 % 20 % 18 % 21 % Brake master cylinders products 3 % 3 % 3 % 4 % Other products 3 % (3 )% 2 % (1 )% 100 % 100 % 100 % 100 % Significant Supplier Concentrations The Company had no suppliers that accounted for more than 10% of inventory purchases for the three and six months ended September 30, 2017 and 2016. |
Debt
Debt | 6 Months Ended |
Sep. 30, 2017 | |
Debt [Abstract] | |
Debt | 8. Debt The Company has the following credit agreements. Credit Facility The Company is party to a $145,000,000 senior secured financing, as amended, (the “Credit Facility”) with the lenders party thereto, and PNC Bank, National Association, as administrative agent, consisting of (i) a $120,000,000 revolving loan facility, subject to borrowing base restrictions and a $15,000,000 sublimit for letters of credit (the “Revolving Facility”) and (ii) a $25,000,000 term loan facility (the “Term Loans”). The loans under the Credit Facility mature on June 3, 2020. In connection with the Credit Facility, the lenders were granted a security interest in substantially all of the assets of the Company. The Credit Facility permits the payment of up to $10,000,000 of dividends per calendar year, subject to a minimum availability threshold and pro forma compliance with financial covenants. This amount was increased to $15,000,000 under the April 2017 amendment to the Credit Facility. In April 2017, the Company entered into a consent and fourth amendment to the Credit Facility (the “Fourth Amendment”) which, among other things, (i) increased the borrowing base limit with respect to inventory located in Mexico, (ii) amended the definition and calculation of consolidated EBITDA to raise the limitation on the add-back for non-capitalized transaction expenses related to the expansion of operations in Mexico, (iii) increased the annual limit on permitted stock repurchases and dividends, and (iv) modifies certain other baskets (including increasing certain baskets for permitted acquisitions) and thresholds to, among other things, further accommodate the expansion of operations in Mexico. In July 2017, the Company entered into a fifth amendment to the Credit Facility (the “Fifth Amendment”) which, among other things, amended the definition of permitted acquisitions, permitted indebtedness, and pledge agreements. The Term Loans require quarterly principal payments of $781,250. The Credit Facility bears interest at rates equal to either LIBOR plus a margin of 2.50%, 2.75% or 3.00% or a reference rate plus a margin of 1.50%, 1.75% or 2.00%, in each case depending on the senior leverage ratio as of the applicable measurement date. There is also a facility fee of 0.25% to 0.375%, depending on the senior leverage ratio as of the applicable measurement date. The interest rate on the Company’s Term Loans and Revolving Facility was 3.74% and 3.96%, respectively, at September 30, 2017 and 3.29% and 3.55%, respectively, at March 31, 2017. The Credit Facility, among other things, requires the Company to maintain certain financial covenants including a maximum senior leverage ratio and a minimum fixed charge coverage ratio. The Company was in compliance with all financial covenants as of September 30, 2017. In addition to other covenants, the Credit Facility places limits on the Company’s ability to incur liens, incur additional indebtedness, make loans and investments, engage in mergers and acquisitions, engage in asset sales, redeem or repurchase capital stock, alter the business conducted by the Company and its subsidiaries, transact with affiliates, prepay, redeem or purchase subordinated debt, and amend or otherwise alter debt agreements. The following summarizes information about the Company’s Term Loans at: September 30, 2017 March 31, 2017 Principal amount of term loan $ 18,750,000 $ 20,312,000 Unamortized financing fees (289,000 ) (313,000 ) Net carrying amount of term loan 18,461,000 19,999,000 Less current portion of term loan (3,060,000 ) (3,064,000 ) Long-term portion of term loan $ 15,401,000 $ 16,935,000 Future repayments of the Company’s Term Loans are as follows: Year Ending March 31, 2018 - remaining six months 1,562,000 2019 3,125,000 2020 3,125,000 2021 10,938,000 Total payments $ 18,750,000 The Company had $36,000,000 and $11,000,000 outstanding under the Revolving Facility at September 30, 2017 and March 31, 2017, respectively. In addition, $260,000 was reserved for standby letters of credit for workers’ compensation insurance and $600,000 for commercial letters of credit at September 30, 2017. At September 30, 2017, $83,140,000, subject to certain adjustments, was available under the Revolving Facility. WX Agreement In August 2012, the Company entered into a Revolving Credit/Strategic Cooperation Agreement (the “WX Agreement”) with Wanxiang America Corporation (the “Supplier”) and the discontinued subsidiaries. In connection with the WX Agreement, the Company issued a warrant (the “Supplier Warrant”) to the Supplier to purchase up to 516,129 shares of the Company’s common stock for an exercise price of $7.75 per share exercisable at any time after August 22, 2014 and on or prior to September 30, 2017. On September 8, 2017, the Supplier exercised the Supplier Warrant in full and paid the Company $4,000,000. As a result of the exercise, the Supplier Warrant is no longer outstanding. The fair value of the Supplier Warrant on the exercise date was $9,566,000 using level 3 inputs and the Monte Carlo simulation model. The following assumptions were used to calculate the fair value of the Supplier Warrant: dividend yield of 0%, expected volatility of 26.4%, risk-free interest rate of 0.96%, subsequent financing probability of 0%, and an expected life of 0.06 years. The Company recorded a non-cash reclassification of the Supplier Warrant’s fair value to shareholders’ equity on the exercise date, with no further adjustments to the fair value of the Supplier Warrant being required. The fair value of the Supplier Warrant was $11,879,000 at March 31, 2017 and was included in other liabilities in the consolidated balance sheet. During the three months ended September 30, 2017 and 2016, a gain of $1,020,000 and a loss of $824,000, respectively, were recorded in general and administrative expenses due to the change in the fair value of this warrant liability. During the six months ended September 30, 2017 and 2016, a gain of $2,313,000 and $4,765,000, respectively, were recorded in general and administrative expenses due to the change in the fair value of this warrant liability. |
Accounts Receivable Discount Pr
Accounts Receivable Discount Programs | 6 Months Ended |
Sep. 30, 2017 | |
Accounts Receivable Discount Programs [Abstract] | |
Accounts Receivable Discount Programs | 9. Accounts Receivable Discount Programs The Company uses receivable discount programs with certain customers and their respective banks. Under these programs, the Company may sell those customers’ receivables to those banks at a discount to be agreed upon at the time the receivables are sold. These discount arrangements allow the Company to accelerate receipt of payment on customers’ receivables. The following is a summary of the Company’s accounts receivable discount programs: Six Months Ended September 30, 2017 2016 Receivables discounted $ 175,209,000 $ 167,670,000 Weighted average days 341 341 Annualized weighted average discount rate 3.1 % 2.8 % Amount of discount as interest expense $ 5,090,000 $ 4,408,000 |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Sep. 30, 2017 | |
Net Income Per Share [Abstract] | |
Net Income Per Share | 10. Net Income Per Share Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share includes the effect, if any, from the potential exercise or conversion of securities, such as stock options and warrants, which would result in the issuance of incremental shares of common stock. The following presents a reconciliation of basic and diluted net income per share: Three Months Ended September 30, Six Months Ended September 30, 2017 2016 2017 2016 Net income $ 6,301,000 $ 9,143,000 $ 13,927,000 $ 16,651,000 Basic shares 18,718,709 18,641,324 18,687,179 18,544,118 Effect of potentially dilutive securities 638,100 788,066 683,965 840,550 Diluted shares 19,356,809 19,429,390 19,371,144 19,384,668 Net income per share: Basic net income per share $ 0.34 $ 0.49 $ 0.75 $ 0.90 Diluted net income per share $ 0.33 $ 0.47 $ 0.72 $ 0.86 The effect of dilutive options excludes (i) 455,339 shares subject to options with exercise prices ranging from $27.40 to $34.17 per share for the three months ended September, 30, 2017, (ii) 291,215 shares subject to options with exercise prices ranging from $28.68 to $34.17 per share for the three months ended September, 30, 2016, (iii) 292,239 shares subject to options with exercise prices ranging from $28.68 to $34.17 per share for the six months ended September 30, 2017, and (iv) 108,815 shares subject to options with exercise prices ranging from $30.91 to $34.17 per share for the six months ended September 30, 2016, which were anti-dilutive. |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | 11. Income Taxes The Company recorded income tax expense for the three months ended September 30, 2017 and 2016 of $4,027,000, or an effective tax rate of 39.0%, and $4,845,000, or an effective tax rate of 34.6%. The Company recorded income tax expenses for the six months ended September 30, 2017 and 2016 of $8,343,000, or an effective tax rate of 37.5%, and $7,781,000, or an effective tax rate of 31.8%, respectively. The Company’s income tax rate for the three months for both periods includes the required adjustments to reflect the appropriate six-month rate for each fiscal year. The income tax rates for the three and six months ended September 30, 2017 were higher than the federal statutory rate primarily due to (i) state income taxes, which were partially offset by the benefit of lower statutory tax rates in foreign taxing jurisdictions and (ii) non-deductible executive compensation under Internal Revenue Code Section 162(m). The income tax rate for the six months ended September 30, 2016 was also positively impacted by excess tax benefits on share-based compensation of $590,000. The Company is not under examination in any jurisdiction and the years ended March 31, 2017, 2016, and 2015 remain subject to examination. The Company believes no significant changes in the unrecognized tax benefits will occur within the next 12 months. |
Financial Risk Management and D
Financial Risk Management and Derivatives | 6 Months Ended |
Sep. 30, 2017 | |
Financial Risk Management and Derivatives [Abstract] | |
Financial Risk Management and Derivatives | 12. Financial Risk Management and Derivatives Purchases and expenses denominated in currencies other than the U.S. dollar, which are primarily related to the Company’s facilities overseas, expose the Company to market risk from material movements in foreign exchange rates between the U.S. dollar and the foreign currencies. The Company’s primary risk exposure is from fluctuations in the value of the Mexican peso and to a lesser extent the Chinese yuan. To mitigate these risks, the Company enters into forward foreign currency exchange contracts to exchange U.S. dollars for these foreign currencies. The extent to which forward foreign currency exchange contracts are used is modified periodically in response to the Company’s estimate of market conditions and the terms and length of anticipated requirements. The Company enters into forward foreign currency exchange contracts in order to reduce the impact of foreign currency fluctuations and not to engage in currency speculation. The use of derivative financial instruments allows the Company to reduce its exposure to the risk that the eventual cash outflow resulting from funding the expenses of the foreign operations will be materially affected by changes in exchange rates between the U.S. dollar and the foreign currencies. The Company does not hold or issue financial instruments for trading purposes. The forward foreign currency exchange contracts are designated for forecasted expenditure requirements to fund foreign operations. The Company had forward foreign currency exchange contracts with a U.S. dollar equivalent notional value of $26,258,000 and $26,880,000 at September 30, 2017 and March 31, 2017, respectively. These contracts generally have a term of one year or less, at rates agreed at the inception of the contracts. The counterparty to this derivative transaction is a major financial institution with investment grade credit rating; however, the Company is exposed to credit risk with this institution. The credit risk is limited to the potential unrealized gains (which offset currency fluctuations adverse to the Company) in any such contract should this counterparty fail to perform as contracted. Any changes in the fair values of forward foreign currency exchange contracts are reflected in current period earnings and accounted for as an increase or offset to general and administrative expenses. The following shows the effect of the Company’s derivative instruments on its consolidated statements of operations: Gain (Loss) Recognized within General and Administrative Expenses Derivatives Not Designated as Three Months Ended Six Months Ended Hedging Instruments 2017 2016 2017 2016 Forward foreign currency exchange contracts $ (330,000 ) $ (507,000 ) $ 722,000 $ (1,186,000 ) The fair value of the forward foreign currency exchange contracts of $1,149,000 and $427,000 is included in prepaid and other current assets in the consolidated balance sheets at September 30, 2017 and March 31, 2017, respectively. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 13. Fair Value Measurements The following summarizes the Company’s financial assets and liabilities measured at fair value, by level within the fair value hierarchy: September 30, 2017 March 31, 2017 Fair Value Measurements Fair Value Measurements Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Assets Short-term investments Mutual funds $ 2,568,000 $ 2,568,000 - - $ 2,140,000 $ 2,140,000 - - Prepaid expenses and other current assets Forward foreign currency exchange contracts 1,149,000 - $ 1,149,000 - 427,000 - $ 427,000 - Liabilities Other current liabilities Deferred compensation 2,568,000 2,568,000 - - 2,140,000 2,140,000 - - Other liabilities Warrant liability - - - - 11,879,000 - - $ 11,879,000 Short-term Investments and Deferred Compensation The Company’s short-term investments, which fund its deferred compensation liabilities, consist of investments in mutual funds. These investments are classified as Level 1 as the shares of these mutual funds trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis. Forward Foreign Currency Exchange Contracts The forward foreign currency exchange contracts are primarily measured based on the foreign currency spot and forward rates quoted by the banks or foreign currency dealers. During the three months ended September 30, 2017 and 2016, a loss of $330,000 and $507,000, respectively, was recorded in general and administrative expenses due to the change in the value of the forward foreign currency exchange contracts. During the six months ended September 30, 2017 and 2016, a gain of $722,000 and a loss of $1,186,000, respectively, were recorded in general and administrative expenses due to the change in the value of the forward foreign currency exchange contracts. Level 3 Fair Value Measurements The following summarizes the activity for Level 3 fair value measurements: Three Months Ended September 30, Six Months Ended September 30, 2017 2016 2017 2016 Supplier Contingent Supplier Contingent Supplier Contingent Supplier Contingent Beginning balance $ 10,586,000 $ - $ 10,054,000 $ 314,000 $ 11,879,000 $ - $ 15,643,000 $ 330,000 Newly issued - - - - - - - - Total (gain) loss included in net income (loss) (1,020,000 ) - 824,000 - (2,313,000 ) - (4,765,000 ) (16,000 ) Exercises/settlements (1) (9,566,000 ) - - (314,000 ) (9,566,000 ) - - (314,000 ) Net transfers in (out) of Level 3 - - - - - - - - Ending balance $ - $ - $ 10,878,000 $ - $ - $ - $ 10,878,000 $ - (1) Represents the fair value of the Supplier Warrant as of the exercise date (see Note 8). During the three and six months ended September 30, 2017, the Company had no significant measurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the short-term nature of these instruments. The carrying amounts of the revolving loan, term loan and other long-term liabilities approximate their fair value based on the variable nature of interest rates and current rates for instruments with similar characteristics. |
Share-based Payments
Share-based Payments | 6 Months Ended |
Sep. 30, 2017 | |
Share-based Payments [Abstract] | |
Share-based Payments | 14. Share-based Payments Stock Options The Company granted options to purchase 163,100 and 184,000 shares of common stock during the six months ended September 30, 2017 and 2016, respectively. The cost associated with stock options is estimated using the Black-Scholes option-pricing model. This model requires the input of subjective assumptions including the expected volatility of the underlying stock and the expected holding period of the option. These subjective assumptions are based on both historical and other information. Changes in the values assumed and used in the model can materially affect the estimate of fair value. The following assumptions were used to derive the weighted average fair value of the stock options granted: Six Months Ended September 30, 2017 2016 Weighted average risk free interest rate 1.90 % 1.38 % Weighted average expected holding period (years) 5.82 5.84 Weighted average expected volatility 47.36 % 47.42 % Weighted average expected dividend yield - - Weighted average fair value of options granted $ 12.69 $ 13.07 The following is a summary of stock option transactions: Number of Weighted Average Outstanding at March 31, 2017 1,036,359 $ 14.92 Granted 163,100 $ 27.40 Exercised (28,951 ) $ 10.15 Forfeited (1,000 ) $ 29.66 Outstanding at September 30, 2017 1,169,508 $ 16.77 At September 30, 2017, options to purchase 324,087 shares of common stock were unvested at the weighted average exercise price of $28.33. At September 30, 2017, there was $3,833,000 of total unrecognized compensation expense related to unvested stock option awards. The compensation expense is expected to be recognized over a weighted average vesting period of approximately 2.1 years. Restricted Stock Units (“RSUs”) During the six months ended September 30, 2017 and 2016, the Company granted 60,000 and 42,876 shares of RSUs, respectively, with an estimated grant date fair value of $1,644,000 and $1,224,000, respectively, which was based on the closing market price on the grant date. The following is a summary of non-vested RSUs: Number of Shares Weighted Average Grant Date Fair Value Non-vested at March 31, 2017 126,277 $ 28.26 Granted 60,000 $ 27.40 Vested (56,909 ) $ 26.89 Forfeited - $ - Non-vested at September 30, 2017 129,368 $ 28.46 At September 30, 2017, there was $3,123,000 of unrecognized compensation expense related to these awards, which will be recognized over the remaining vesting period of approximately 2.1 years. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 15. Accumulated Other Comprehensive Income (Loss) The following summarizes changes in accumulated other comprehensive income (loss): Three Months Ended September 30, 2017 Three Months Ended September 30, 2016 Unrealized Foreign Total Unrealized Foreign Total Balance at beginning of period $ 584,000 $ (7,740,000 ) $ (7,156,000 ) $ 354,000 $ (5,719,000 ) $ (5,365,000 ) Other comprehensive income (loss), net of tax 60,000 608,000 668,000 66,000 (807,000 ) (741,000 ) Amounts reclassified from accumulated other comprehensive loss, net of tax - - - - - - Balance at end of period $ 644,000 $ (7,132,000 ) $ (6,488,000 ) $ 420,000 $ (6,526,000 ) $ (6,106,000 ) Six Months Ended September 30, 2017 Six Months Ended September 30, 2016 Unrealized Foreign Total Unrealized Foreign Total Balance at beginning of period $ 528,000 $ (7,969,000 ) $ (7,441,000 ) $ 332,000 $ (5,184,000 ) $ (4,852,000 ) Other comprehensive income (loss), net of tax 116,000 837,000 953,000 88,000 (1,342,000 ) (1,254,000 ) Amounts reclassified from accumulated other comprehensive loss, net of tax - - - - - - Balance at end of period $ 644,000 $ (7,132,000 ) $ (6,488,000 ) $ 420,000 $ (6,526,000 ) $ (6,106,000 ) |
Share Repurchase Program
Share Repurchase Program | 6 Months Ended |
Sep. 30, 2017 | |
Share Repurchase Program [Abstract] | |
Share Repurchase Program | 16. Share Repurchase Program As of September 30, 2017, the Company’s board of directors had approved a stock repurchase program of up to $15,000,000 of its common stock. As of September 30, 2017, $6,855,000 of the $15,000,000 had been utilized and $8,145,000 remained available to repurchase shares under the authorized share repurchase program. The Company retired the 303,665 shares repurchased under this program through September 30, 2017. The Company’s share repurchase program does not obligate it to acquire any specific number of shares and shares may be repurchased in privately negotiated and/or open market transactions. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Sep. 30, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2018. This report should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2017, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on June 14, 2017, as amended by the Form 10-K/A filed with the SEC on July 31, 2017. The accompanying consolidated financial statements have been prepared on a consistent basis with, and there have been no material changes to, except as noted below, the accounting policies described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements that are presented in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 6 Months Ended |
Sep. 30, 2017 | |
New Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements Not Yet Adopted | New Accounting Pronouncements Not Yet Adopted Revenue Recognition In May 2014, the FASB issued guidance codified in ASC 606, “Revenue Recognition - Revenue from Contracts with Customers” (“ASC 606”), which amends the guidance in the former ASC 605, “Revenue Recognition”. ASC 606 is effective for annual periods beginning after December 15, 2016, and interim periods within that reporting period for a public company. The Company may elect either a full retrospective transition method, which requires the restatement of all periods presented, or a modified retrospective transition method, which requires a cumulative effect recognized as of the date of initial application to be used in transition. In August 2015, the FASB delayed the effective date by one year to annual periods beginning after December 15, 2017, and interim periods within that reporting period for a public company. Accordingly, the updated standard is effective for the Company as of April 1, 2018 and the Company does not plan to early adopt. The Company is currently in the process of determining whether it will utilize the full or modified retrospective method of adoption allowed by the new standard and the impact on its consolidated financial statements and footnote disclosures. The determination of utilizing the full retrospective or modified retrospective method of adoption will be driven by the changes required by ASC 606 and the Company’s ability to recast past financial statements based upon those requirements. The Company will continue to provide enhanced disclosures as it continues its assessment. ASC 606 establishes the requirements for recognizing revenue from contracts with customers. The standard requires entities to apportion consideration from contracts to performance obligations on a relative standalone selling price basis, based on a five-step model. Under the new standard, revenue is recognized when a customer obtains control of a promised good or service and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for the good or service. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Due to the impact the new standard may have on the Company’s business processes, systems, and controls, a project team has been formed to evaluate and guide the implementation process. The Company has performed a preliminary assessment, which has included the identification of the key revenue streams and the comparison of historical accounting policies and practices to the requirements of the new standard by revenue stream. The assessment has resulted in the identification of potential accounting differences that may arise from the application of the new standard. The implementation team has also made substantial progress in the contract review phase of the project which includes identifying the population of contracts for a deeper analysis of the potential accounting impacts due to the new standard for individual contracts. During the second quarter, the team continued to identify changes to business processes, systems and controls to support recognition, presentation and disclosure under the new standard. A detailed implementation plan for the second half of fiscal 2018 has been developed and includes tasks around data gathering, identification of the new journal entries, training, design of new processes and controls as well as testing of the controls. The Company anticipates that the adoption of ASU 2014-09 will primarily impact the timing of revenue recognition for nominally priced Remanufactured Cores not expected to be replaced by a similar Used Core sent back under the core exchange program and will result in an acceleration of revenue recognition in addition to some changes to revenue related disclosures and financial statement presentation. Conversely, the Company does not expect there to be a significant effect, other than classification, upon the balance sheet for anticipated returned cores. The Company currently accounts for fully priced Remanufactured Cores anticipated to be returned as long term core inventory. Under ASC 606, the Company will reclassify this asset to a contractual asset and recognize a contractual liability for amounts expected to be refunded to customers. For certain contracts, the Company offers customer incentives that may be considered a material right to the customer under ASC 606. These incentives may result in the Company having multiple performance obligations in an agreement and may delay the timing of revenues. In addition, certain payments made to customers in connection with future contracts may be deferred and amortized over future periods. While the Company has made substantial progress in identifying the likely impacts of the new standard, it has not yet determined a range of the potential quantitative impact. ASC 606 provides several practical expedients, for which the Company anticipates adopting. The first of these practical expedients allows a company to expense incremental costs of obtaining a contract as incurred if the amortization period would have been one year or less. Similarly, the Company plans to adopt guidance which allows for the effects of a significant financing component to be ignored if a company expects that the period between the transfer of the goods and services to the customer and payment will be one year or less. Finally, the Company plans to adopt guidance which allows a company to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations. The Company continues to evaluate the impact ASC 606, related amendments and interpretive guidance will have on its consolidated financial statements. Financial Instruments In January 2016, the FASB issued guidance that addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. A reporting entity should apply the new guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of the provisions of this guidance to its consolidated financial statements. Leases In February 2016, the FASB issued new guidance that requires balance sheet recognition of a right-of-use asset and lease liability by lessees for operating leases. The new guidance also requires new disclosures providing additional qualitative and quantitative information about the amounts recorded in the financial statements. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new guidance requires a modified retrospective approach with optional practical expedients. The Company will adopt this guidance in the first quarter of fiscal 2020. The Company is currently evaluating the impact the provisions of this guidance will have on its consolidated financial statements, but expects that it will result in a significant increase to its long-term assets and liabilities on the consolidated balance sheets. Business Combinations In January 2017, the FASB issued guidance which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. . The Company is currently evaluating the impact the provisions of this guidance will have on its consolidated financial statements. Goodwill Impairment In January 2017, the FASB issued guidance which simplifies the test for goodwill impairment. This standard eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption permitted. This guidance must be applied on a prospective basis. Modifications to Share-Based Payment Awards In May 2017, the FASB issued guidance to provide clarity and reduce (i) the diversity in practice and (ii) the cost and complexity when applying the accounting guidance for equity-based compensation to a change to the terms or conditions of a share-based payment award. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 with early adoption permitted. This guidance should be applied prospectively to an award modified on or after that adoption date. The Company is currently evaluating the impact the provisions of this guidance will have on its consolidated financial statements. Derivatives and Hedging In August 2017, the FASB issued guidance to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in this update also make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years; the guidance allows for early adoption in any interim period after issuance of the update. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets [Abstract] | |
Summary of change in goodwill | The following summarizes the changes in the Company’s goodwill: Six Months Ended September 30, 2017 2016 Balance at beginning of period $ 2,551,000 $ 2,053,000 Goodwill acquired - 423,000 Translation adjustment - - Impairment - - Balance at end of period $ 2,551,000 $ 2,476,000 |
Intangible assets subject to amortization | The following is a summary of acquired intangible assets subject to amortization: September 30, 2017 March 31, 2017 Weighted Average Amortization Period Gross Carrying Value Accumulated Amortization Gross Carrying Value Accumulated Amortization Intangible assets subject to amortization Trademarks 9 years $ 903,000 $ 240,000 $ 705,000 $ 191,000 Customer relationships 13 years 5,900,000 2,679,000 5,900,000 2,421,000 Developed technology 3 years 325,000 18,000 - - Total $ 7,128,000 $ 2,937,000 $ 6,605,000 $ 2,612,000 |
Amortization expense for acquired intangible assets | Amortization expense for acquired intangible assets is as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 Amortization expense $ 180,000 $ 145,000 $ 325,000 $ 290,000 |
Estimated future amortization expense for intangible assets | The estimated future amortization expense for acquired intangible assets subject to amortization is as follows: Year Ending March 31, 2018 - remaining six months $ 394,000 2019 787,000 2020 721,000 2021 616,000 2022 580,000 Thereafter 1,093,000 Total $ 4,191,000 |
Accounts Receivable - Net (Tabl
Accounts Receivable - Net (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Accounts Receivable - Net [Abstract] | |
Schedule of accounts receivable | Accounts receivable — net is comprised of the following: September 30, 2017 March 31, 2017 Accounts receivable — trade $ 80,510,000 $ 76,902,000 Allowance for bad debts (4,142,000 ) (4,140,000 ) Customer allowances earned (11,558,000 ) (7,880,000 ) Customer payment discrepancies (944,000 ) (751,000 ) Customer returns RGA issued (17,882,000 ) (12,710,000 ) Customer core returns accruals (33,591,000 ) (25,404,000 ) Less: total accounts receivable offset accounts (68,117,000 ) (50,885,000 ) Total accounts receivable — net $ 12,393,000 $ 26,017,000 |
Schedule of change in warranty return accrual | The following summarizes the changes in the Company’s warranty return accrual: Three Months Ended September 30, Six Months Ended September 30, 2017 2016 2017 2016 Balance at beginning of period $ 12,849,000 $ 11,559,000 $ 14,286,000 $ 10,845,000 Charged to expense/additions 29,359,000 28,179,000 51,565,000 50,873,000 Amounts processed (27,409,000 ) (26,031,000 ) (51,052,000 ) (48,011,000 ) Balance at end of period $ 14,799,000 $ 13,707,000 $ 14,799,000 $ 13,707,000 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Inventory [Abstract] | |
Schedule of inventory | Inventory is comprised of the following: September 30, 2017 March 31, 2017 Non-core inventory Raw materials $ 28,335,000 $ 21,515,000 Work-in-process 1,751,000 641,000 Finished goods 62,393,000 48,337,000 92,479,000 70,493,000 Less allowance for excess and obsolete inventory (3,577,000 ) (2,977,000 ) Total $ 88,902,000 $ 67,516,000 Inventory unreturned $ 7,704,000 $ 7,581,000 Long-term core inventory Used cores held at the Company’s facilities $ 40,150,000 $ 38,713,000 Used cores expected to be returned by customers 16,533,000 11,752,000 Remanufactured cores held in finished goods 34,688,000 27,667,000 Remanufactured cores held at customers’ locations (1) 176,479,000 185,938,000 267,850,000 264,070,000 Less allowance for excess and obsolete inventory (2,286,000 ) (1,148,000 ) Total $ 265,564,000 $ 262,922,000 Long-term core inventory deposits $ 5,569,000 $ 5,569,000 (1) Remanufactured cores held at customers’ locations represent the core portion of the Company’s customers’ finished goods at the Company’s customers’ locations. |
Significant Customer and Othe30
Significant Customer and Other Information (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Significant Customer and Other Information [Abstract] | |
Schedule of concentrations of risk | The Company’s largest customers accounted for the following total percentage of net sales: Three Months Ended September 30, Six Months Ended September 30, Sales 2017 2016 2017 2016 Customer A 48 % 45 % 44 % 48 % Customer B 25 % 21 % 25 % 18 % Customer C 14 % 19 % 15 % 19 % Customer D 3 % 4 % 5 % 4 % The Company’s largest customers accounted for the following total percentage of accounts receivable—trade: Accounts receivable - trade September 30, 2017 March 31, 2017 Customer A 31 % 33 % Customer B 15 % 18 % Customer C 17 % 12 % Customer D 17 % 16 % Geographic and Product Information The Company’s products are predominantly sold in the U.S. and accounted for the following total percentage of net sales: Three Months Ended September 30, Six Months Ended September 30, 2017 2016 2017 2016 Rotating electrical products 76 % 80 % 77 % 76 % Wheel hub products 18 % 20 % 18 % 21 % Brake master cylinders products 3 % 3 % 3 % 4 % Other products 3 % (3 )% 2 % (1 )% 100 % 100 % 100 % 100 % |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Debt [Abstract] | |
Summarized information about the term loan | The following summarizes information about the Company’s Term Loans at: September 30, 2017 March 31, 2017 Principal amount of term loan $ 18,750,000 $ 20,312,000 Unamortized financing fees (289,000 ) (313,000 ) Net carrying amount of term loan 18,461,000 19,999,000 Less current portion of term loan (3,060,000 ) (3,064,000 ) Long-term portion of term loan $ 15,401,000 $ 16,935,000 |
Future repayments of the amended term loan, by fiscal year | Future repayments of the Company’s Term Loans are as follows: Year Ending March 31, 2018 - remaining six months 1,562,000 2019 3,125,000 2020 3,125,000 2021 10,938,000 Total payments $ 18,750,000 |
Accounts Receivable Discount 32
Accounts Receivable Discount Programs (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Accounts Receivable Discount Programs [Abstract] | |
Schedule of accounts receivable discount programs | The following is a summary of the Company’s accounts receivable discount programs: Six Months Ended September 30, 2017 2016 Receivables discounted $ 175,209,000 $ 167,670,000 Weighted average days 341 341 Annualized weighted average discount rate 3.1 % 2.8 % Amount of discount as interest expense $ 5,090,000 $ 4,408,000 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Net Income Per Share [Abstract] | |
Schedule of reconciliation of basic and diluted net income per share | The following presents a reconciliation of basic and diluted net income per share: Three Months Ended September 30, Six Months Ended September 30, 2017 2016 2017 2016 Net income $ 6,301,000 $ 9,143,000 $ 13,927,000 $ 16,651,000 Basic shares 18,718,709 18,641,324 18,687,179 18,544,118 Effect of potentially dilutive securities 638,100 788,066 683,965 840,550 Diluted shares 19,356,809 19,429,390 19,371,144 19,384,668 Net income per share: Basic net income per share $ 0.34 $ 0.49 $ 0.75 $ 0.90 Diluted net income per share $ 0.33 $ 0.47 $ 0.72 $ 0.86 |
Financial Risk Management and34
Financial Risk Management and Derivatives (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Financial Risk Management and Derivatives [Abstract] | |
Schedule of derivative instruments on consolidated statements of operations | The following shows the effect of the Company’s derivative instruments on its consolidated statements of operations: Gain (Loss) Recognized within General and Administrative Expenses Derivatives Not Designated as Three Months Ended Six Months Ended Hedging Instruments 2017 2016 2017 2016 Forward foreign currency exchange contracts $ (330,000 ) $ (507,000 ) $ 722,000 $ (1,186,000 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements [Abstract] | |
Financial assets and liabilities measured at fair value recurring basis | The following summarizes the Company’s financial assets and liabilities measured at fair value, by level within the fair value hierarchy: September 30, 2017 March 31, 2017 Fair Value Measurements Fair Value Measurements Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Assets Short-term investments Mutual funds $ 2,568,000 $ 2,568,000 - - $ 2,140,000 $ 2,140,000 - - Prepaid expenses and other current assets Forward foreign currency exchange contracts 1,149,000 - $ 1,149,000 - 427,000 - $ 427,000 - Liabilities Other current liabilities Deferred compensation 2,568,000 2,568,000 - - 2,140,000 2,140,000 - - Other liabilities Warrant liability - - - - 11,879,000 - - $ 11,879,000 |
Change in warrant liability measured at fair value recurring basis using significant unobservable inputs (level 3) | The following summarizes the activity for Level 3 fair value measurements: Three Months Ended September 30, Six Months Ended September 30, 2017 2016 2017 2016 Supplier Contingent Supplier Contingent Supplier Contingent Supplier Contingent Beginning balance $ 10,586,000 $ - $ 10,054,000 $ 314,000 $ 11,879,000 $ - $ 15,643,000 $ 330,000 Newly issued - - - - - - - - Total (gain) loss included in net income (loss) (1,020,000 ) - 824,000 - (2,313,000 ) - (4,765,000 ) (16,000 ) Exercises/settlements (1) (9,566,000 ) - - (314,000 ) (9,566,000 ) - - (314,000 ) Net transfers in (out) of Level 3 - - - - - - - - Ending balance $ - $ - $ 10,878,000 $ - $ - $ - $ 10,878,000 $ - (1) Represents the fair value of the Supplier Warrant as of the exercise date (see Note 8). |
Share-based Payments (Tables)
Share-based Payments (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Share-based Payments [Abstract] | |
Summary of Black-Scholes option pricing model assumptions used to derive weighted average fair value of stock options granted | The following assumptions were used to derive the weighted average fair value of the stock options granted: Six Months Ended September 30, 2017 2016 Weighted average risk free interest rate 1.90 % 1.38 % Weighted average expected holding period (years) 5.82 5.84 Weighted average expected volatility 47.36 % 47.42 % Weighted average expected dividend yield - - Weighted average fair value of options granted $ 12.69 $ 13.07 |
Summary of stock option transactions | The following is a summary of stock option transactions: Number of Weighted Average Outstanding at March 31, 2017 1,036,359 $ 14.92 Granted 163,100 $ 27.40 Exercised (28,951 ) $ 10.15 Forfeited (1,000 ) $ 29.66 Outstanding at September 30, 2017 1,169,508 $ 16.77 |
Schedule of restricted stock units activity | The following is a summary of non-vested RSUs: Number of Shares Weighted Average Grant Date Fair Value Non-vested at March 31, 2017 126,277 $ 28.26 Granted 60,000 $ 27.40 Vested (56,909 ) $ 26.89 Forfeited - $ - Non-vested at September 30, 2017 129,368 $ 28.46 |
Accumulated Other Comprehensi37
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Accumulated other comprehensive income (loss) | The following summarizes changes in accumulated other comprehensive income (loss): Three Months Ended September 30, 2017 Three Months Ended September 30, 2016 Unrealized Foreign Total Unrealized Foreign Total Balance at beginning of period $ 584,000 $ (7,740,000 ) $ (7,156,000 ) $ 354,000 $ (5,719,000 ) $ (5,365,000 ) Other comprehensive income (loss), net of tax 60,000 608,000 668,000 66,000 (807,000 ) (741,000 ) Amounts reclassified from accumulated other comprehensive loss, net of tax - - - - - - Balance at end of period $ 644,000 $ (7,132,000 ) $ (6,488,000 ) $ 420,000 $ (6,526,000 ) $ (6,106,000 ) Six Months Ended September 30, 2017 Six Months Ended September 30, 2016 Unrealized Foreign Total Unrealized Foreign Total Balance at beginning of period $ 528,000 $ (7,969,000 ) $ (7,441,000 ) $ 332,000 $ (5,184,000 ) $ (4,852,000 ) Other comprehensive income (loss), net of tax 116,000 837,000 953,000 88,000 (1,342,000 ) (1,254,000 ) Amounts reclassified from accumulated other comprehensive loss, net of tax - - - - - - Balance at end of period $ 644,000 $ (7,132,000 ) $ (6,488,000 ) $ 420,000 $ (6,526,000 ) $ (6,106,000 ) |
Company Background and Organi38
Company Background and Organization (Details) | 6 Months Ended |
Sep. 30, 2017Segment | |
Company Background and Organization [Abstract] | |
Number of reportable segments | 1 |
Acquisition (Details)
Acquisition (Details) - USD ($) | 6 Months Ended | |
Sep. 30, 2017 | Jul. 18, 2017 | |
Developed Technology [Member] | ||
Business Acquisition [Line Items] | ||
Estimated useful life | 3 years | |
Trademarks [Member] | ||
Business Acquisition [Line Items] | ||
Estimated useful life | 9 years | |
D&V Electronics Ltd [Member] | ||
Business Acquisition [Line Items] | ||
Inventory | $ 3,383,000 | |
Other net assets | 1,071,000 | |
D&V Electronics Ltd [Member] | Developed Technology [Member] | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 323,000 | |
Estimated useful life | 3 years | |
D&V Electronics Ltd [Member] | Trademarks [Member] | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 197,000 | |
Estimated useful life | 2 years |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Goodwill (Details) - USD ($) | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill [Roll Forward] | ||
Balance at beginning of period | $ 2,551,000 | $ 2,053,000 |
Goodwill acquired | 0 | 423,000 |
Translation adjustment | 0 | 0 |
Impairment | 0 | 0 |
Balance at end of period | $ 2,551,000 | $ 2,476,000 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets (Details) - USD ($) | 6 Months Ended | |
Sep. 30, 2017 | Mar. 31, 2017 | |
Intangible assets subject to amortization [Abstract] | ||
Gross Carrying Value | $ 7,128,000 | $ 6,605,000 |
Accumulated Amortization | $ 2,937,000 | 2,612,000 |
Trademarks [Member] | ||
Intangible assets subject to amortization [Abstract] | ||
Weighted Average Amortization Period | 9 years | |
Gross Carrying Value | $ 903,000 | 705,000 |
Accumulated Amortization | $ 240,000 | 191,000 |
Customer Relationships [Member] | ||
Intangible assets subject to amortization [Abstract] | ||
Weighted Average Amortization Period | 13 years | |
Gross Carrying Value | $ 5,900,000 | 5,900,000 |
Accumulated Amortization | $ 2,679,000 | 2,421,000 |
Developed Technology [Member] | ||
Intangible assets subject to amortization [Abstract] | ||
Weighted Average Amortization Period | 3 years | |
Gross Carrying Value | $ 325,000 | 0 |
Accumulated Amortization | $ 18,000 | $ 0 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets, Amortization Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Amortization expense for acquired intangible assets [Abstract] | ||||
Amortization expense | $ 180,000 | $ 145,000 | $ 325,000 | $ 290,000 |
Estimated future amortization expense for intangible assets subject to amortization [Abstract] | ||||
2018 - remaining six months | 394,000 | 394,000 | ||
2,019 | 787,000 | 787,000 | ||
2,020 | 721,000 | 721,000 | ||
2,021 | 616,000 | 616,000 | ||
2,022 | 580,000 | 580,000 | ||
Thereafter | 1,093,000 | 1,093,000 | ||
Total | $ 4,191,000 | $ 4,191,000 |
Accounts Receivable - Net (Deta
Accounts Receivable - Net (Details) - USD ($) | Sep. 30, 2017 | Mar. 31, 2017 |
Accounts Receivable - Net [Abstract] | ||
Accounts receivable - trade | $ 80,510,000 | $ 76,902,000 |
Allowance for bad debts | (4,142,000) | (4,140,000) |
Customer allowances earned | (11,558,000) | (7,880,000) |
Customer payment discrepancies | (944,000) | (751,000) |
Customer returns RGA issued | (17,882,000) | (12,710,000) |
Customer core returns accruals | (33,591,000) | (25,404,000) |
Less: total accounts receivable offset accounts | (68,117,000) | (50,885,000) |
Total accounts receivable - net | $ 12,393,000 | $ 26,017,000 |
Accounts Receivable - Net - War
Accounts Receivable - Net - Warranty Returns (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | |
Warranty Returns [Abstract] | |||||
Warranty accrual included in customer returns RGA issued | $ 7,674,000 | $ 7,674,000 | $ 5,303,000 | ||
Warranty accrual included in customer finished goods returns accrual | 7,125,000 | 7,125,000 | $ 8,983,000 | ||
Change in warranty return accrual [Roll Forward] | |||||
Balance at beginning of period | 12,849,000 | $ 11,559,000 | 14,286,000 | $ 10,845,000 | |
Charged to expense/additions | 29,359,000 | 28,179,000 | 51,565,000 | 50,873,000 | |
Amounts processed | (27,409,000) | (26,031,000) | (51,052,000) | (48,011,000) | |
Balance at end of period | $ 14,799,000 | $ 13,707,000 | $ 14,799,000 | $ 13,707,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Sep. 30, 2017 | Mar. 31, 2017 | |
Non-core inventory [Abstract] | |||
Raw materials | $ 28,335,000 | $ 21,515,000 | |
Work-in-process | 1,751,000 | 641,000 | |
Finished goods | 62,393,000 | 48,337,000 | |
Non-core inventory, gross | 92,479,000 | 70,493,000 | |
Less allowance for excess and obsolete inventory | (3,577,000) | (2,977,000) | |
Total | 88,902,000 | 67,516,000 | |
Inventory unreturned | 7,704,000 | 7,581,000 | |
Long-term core inventory [Abstract] | |||
Used cores held at the Company's facilities | 40,150,000 | 38,713,000 | |
Used cores expected to be returned by customers | 16,533,000 | 11,752,000 | |
Remanufactured cores held in finished goods | 34,688,000 | 27,667,000 | |
Remanufactured cores held at customers' locations | [1] | 176,479,000 | 185,938,000 |
Long-term core inventory - gross | 267,850,000 | 264,070,000 | |
Less allowance for excess and obsolete inventory | (2,286,000) | (1,148,000) | |
Total | 265,564,000 | 262,922,000 | |
Long-term core inventory deposits | $ 5,569,000 | $ 5,569,000 | |
[1] | Remanufactured cores held at customers' locations represent the core portion of the Company's customers' finished goods at the Company's customers' locations. |
Significant Customer and Othe46
Significant Customer and Other Information (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | |
Sales [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 100.00% | 100.00% | 100.00% | 100.00% | |
Sales [Member] | Customer A [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 48.00% | 45.00% | 44.00% | 48.00% | |
Sales [Member] | Customer B [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 25.00% | 21.00% | 25.00% | 18.00% | |
Sales [Member] | Customer C [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 14.00% | 19.00% | 15.00% | 19.00% | |
Sales [Member] | Customer D [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 3.00% | 4.00% | 5.00% | 4.00% | |
Sales [Member] | Rotating Electrical Products [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 76.00% | 80.00% | 77.00% | 76.00% | |
Sales [Member] | Wheel Hub Products [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 18.00% | 20.00% | 18.00% | 21.00% | |
Sales [Member] | Brake Master Cylinders Products [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 3.00% | 3.00% | 3.00% | 4.00% | |
Sales [Member] | Other Products [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 3.00% | (3.00%) | 2.00% | (1.00%) | |
Accounts Receivable - Trade [Member] | Customer A [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 31.00% | 33.00% | |||
Accounts Receivable - Trade [Member] | Customer B [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 15.00% | 18.00% | |||
Accounts Receivable - Trade [Member] | Customer C [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 17.00% | 12.00% | |||
Accounts Receivable - Trade [Member] | Customer D [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 17.00% | 16.00% |
Debt (Details)
Debt (Details) - USD ($) | Sep. 08, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | Apr. 30, 2016 | Aug. 31, 2012 |
Summarized information about the term loan [Abstract] | ||||||||
Less current portion of term loan | $ (3,060,000) | $ (3,060,000) | $ (3,064,000) | |||||
Long-term portion of term loan | 15,401,000 | 15,401,000 | 16,935,000 | |||||
WX Agreement [Abstract] | ||||||||
Settlement of warrant | 4,000,000 | $ 0 | ||||||
Total (gain) loss included in net loss | (2,313,000) | (4,765,000) | ||||||
Credit Facility [Member] | ||||||||
Credit Facility [Abstract] | ||||||||
Maximum borrowing capacity | 145,000,000 | $ 145,000,000 | ||||||
Debt instrument, maturity date | Jun. 3, 2020 | |||||||
Credit Facility [Member] | Minimum [Member] | ||||||||
Credit Facility [Abstract] | ||||||||
Facility fee on total leverage ratio | 0.25% | |||||||
Credit Facility [Member] | Maximum [Member] | ||||||||
Credit Facility [Abstract] | ||||||||
Dividend payments, annual maximum amount permitted | 15,000,000 | $ 10,000,000 | ||||||
Facility fee on total leverage ratio | 0.375% | |||||||
Credit Facility [Member] | LIBOR [Member] | ||||||||
Credit Facility [Abstract] | ||||||||
Reference interest rate under option 1, floor | 2.50% | |||||||
Interest rate over LIBOR rate under option 1 | 2.75% | |||||||
Interest rate above base rate under option 2 | 3.00% | |||||||
Credit Facility [Member] | Reference Rate [Member] | ||||||||
Credit Facility [Abstract] | ||||||||
Reference interest rate under option 1, floor | 1.50% | |||||||
Interest rate over LIBOR rate under option 1 | 1.75% | |||||||
Interest rate above base rate under option 2 | 2.00% | |||||||
Credit Facility [Member] | Term Loans [Member] | ||||||||
Credit Facility [Abstract] | ||||||||
Maximum borrowing capacity | $ 25,000,000 | $ 25,000,000 | ||||||
Quarterly principal payments | $ 781,250 | |||||||
Interest rate at end of period | 3.74% | 3.74% | 3.29% | |||||
Summarized information about the term loan [Abstract] | ||||||||
Principal amount of term loan | $ 18,750,000 | $ 18,750,000 | $ 20,312,000 | |||||
Unamortized financing fees | (289,000) | (289,000) | (313,000) | |||||
Net carrying amount of term loan | 18,461,000 | 18,461,000 | 19,999,000 | |||||
Less current portion of term loan | (3,060,000) | (3,060,000) | (3,064,000) | |||||
Long-term portion of term loan | 15,401,000 | 15,401,000 | 16,935,000 | |||||
Future repayments of the Term Loan, by fiscal year [Abstract] | ||||||||
2018 - remaining six months | 1,562,000 | 1,562,000 | ||||||
2,019 | 3,125,000 | 3,125,000 | ||||||
2,020 | 3,125,000 | 3,125,000 | ||||||
2,021 | 10,938,000 | 10,938,000 | ||||||
Total payments | $ 18,750,000 | $ 18,750,000 | $ 20,312,000 | |||||
Credit Facility [Member] | Revolving Facility [Member] | ||||||||
Credit Facility [Abstract] | ||||||||
Maximum borrowing capacity | $ 120,000,000 | |||||||
Interest rate at end of period | 3.96% | 3.96% | 3.55% | |||||
Future repayments of the Term Loan, by fiscal year [Abstract] | ||||||||
Outstanding balance under revolving loan | $ 36,000,000 | $ 36,000,000 | $ 11,000,000 | |||||
Amount available under revolving facility | 83,140,000 | 83,140,000 | ||||||
Credit Facility [Member] | Revolving Facility [Member] | Letters of Credit [Member] | ||||||||
Credit Facility [Abstract] | ||||||||
Maximum borrowing capacity | 15,000,000 | 15,000,000 | ||||||
Credit Facility [Member] | Revolving Facility [Member] | Commercial Letters of Credit [Member] | ||||||||
Future repayments of the Term Loan, by fiscal year [Abstract] | ||||||||
Outstanding balance under revolving loan | 600,000 | 600,000 | ||||||
Credit Facility [Member] | Revolving Facility [Member] | Standby Letters of Credit [Member] | ||||||||
Future repayments of the Term Loan, by fiscal year [Abstract] | ||||||||
Outstanding balance under revolving loan | 260,000 | 260,000 | ||||||
WX Agreement [Member] | Supplier Warrant [Member] | ||||||||
WX Agreement [Abstract] | ||||||||
Number of shares that can be purchased under warrants (in shares) | 516,129 | |||||||
Initial exercise price (in dollars per share) | $ 7.75 | |||||||
Settlement of warrant | $ 4,000,000 | |||||||
Fair value of warrants issued | $ 9,566,000 | $ 11,879,000 | ||||||
Dividend yield | 0.00% | |||||||
Expected volatility | 26.40% | |||||||
Risk free interest rate | 0.96% | |||||||
Probability of future financing | 0.00% | |||||||
Expected life | 22 days | |||||||
Total (gain) loss included in net loss | $ (1,020,000) | $ 824,000 | $ (2,313,000) | $ (4,765,000) |
Accounts Receivable Discount 48
Accounts Receivable Discount Programs (Details) - USD ($) | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Accounts Receivable Discount Programs [Abstract] | ||
Receivables discounted | $ 175,209,000 | $ 167,670,000 |
Weighted average days | 341 days | 341 days |
Annualized weighted average discount rate | 3.10% | 2.80% |
Amount of discount as interest expense | $ 5,090,000 | $ 4,408,000 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net Income Per Share [Abstract] | ||||
Net income | $ 6,301,000 | $ 9,143,000 | $ 13,927,000 | $ 16,651,000 |
Basic shares (in shares) | 18,718,709 | 18,641,324 | 18,687,179 | 18,544,118 |
Effect of potentially dilutive securities (in shares) | 638,100 | 788,066 | 683,965 | 840,550 |
Diluted shares (in shares) | 19,356,809 | 19,429,390 | 19,371,144 | 19,384,668 |
Net income per share [Abstract] | ||||
Basic net income per share (in dollars per share) | $ 0.34 | $ 0.49 | $ 0.75 | $ 0.90 |
Diluted net income per share (in dollars per share) | $ 0.33 | $ 0.47 | $ 0.72 | $ 0.86 |
Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from computation of earnings per share (in shares) | 455,339 | 291,215 | 292,239 | 108,815 |
Exercise price of options, lower range (in dollars per share) | $ 27.40 | $ 28.68 | $ 28.68 | $ 30.91 |
Exercise price of options, upper range (in dollars per share) | $ 34.17 | $ 34.17 | $ 34.17 | $ 34.17 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Taxes [Abstract] | ||||
Income tax expense (benefit) from continuing operations | $ 4,027,000 | $ 4,845,000 | $ 8,343,000 | $ 7,781,000 |
Effective income tax rate | 39.00% | 34.60% | 37.50% | 31.80% |
Gain due to change in fair value of the warrant liability | $ (2,313,000) | $ (4,765,000) | ||
Excess tax benefits on share-based compensation | $ 590,000 |
Financial Risk Management and51
Financial Risk Management and Derivatives (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Forward foreign currency exchange contracts included in prepaid and other current assets | $ 1,149,000 | $ 1,149,000 | $ 427,000 | ||
Forward Foreign Currency Exchange Contracts [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Notional amount of foreign currency derivatives | 26,258,000 | 26,258,000 | $ 26,880,000 | ||
Forward Foreign Currency Exchange Contracts [Member] | General and Administrative Expenses [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Forward foreign currency exchange contracts | $ (330,000) | $ (507,000) | $ 722,000 | $ (1,186,000) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | ||
Forward Foreign Currency Exchange Contracts [Member] | ||||||
Other liabilities [Abstract] | ||||||
Net gain (loss) on forward foreign currency exchange contracts | $ (330,000) | $ (507,000) | $ 722,000 | $ (1,186,000) | ||
Supplier Warrant [Member] | ||||||
Change in warrant liability measured at fair value recurring basis using significant unobservable inputs (Level 3) [Roll Forward] | ||||||
Beginning balance | 10,586,000 | 10,054,000 | 11,879,000 | 15,643,000 | ||
Newly issued | 0 | 0 | 0 | 0 | ||
Total (gain) loss included in net income (loss) | (1,020,000) | 824,000 | (2,313,000) | (4,765,000) | ||
Exercises/settlements | [1] | (9,566,000) | 0 | (9,566,000) | 0 | |
Net transfers in (out) of Level 3 | 0 | 0 | 0 | 0 | ||
Ending balance | 0 | 10,878,000 | 0 | 10,878,000 | ||
Contingent Consideration [Member] | ||||||
Change in warrant liability measured at fair value recurring basis using significant unobservable inputs (Level 3) [Roll Forward] | ||||||
Beginning balance | 0 | 314,000 | 0 | 330,000 | ||
Newly issued | 0 | 0 | 0 | 0 | ||
Total (gain) loss included in net income (loss) | 0 | 0 | 0 | (16,000) | ||
Exercises/settlements | [1] | 0 | (314,000) | 0 | (314,000) | |
Net transfers in (out) of Level 3 | 0 | 0 | 0 | 0 | ||
Ending balance | 0 | $ 0 | 0 | $ 0 | ||
Recurring [Member] | ||||||
Short-term investments [Abstract] | ||||||
Mutual funds | 2,568,000 | 2,568,000 | $ 2,140,000 | |||
Prepaid expenses and other current assets [Abstract] | ||||||
Forward foreign currency exchange contracts | 1,149,000 | 1,149,000 | 427,000 | |||
Other current liabilities [Abstract] | ||||||
Deferred compensation | 2,568,000 | 2,568,000 | 2,140,000 | |||
Other liabilities [Abstract] | ||||||
Warrant liability | 0 | 0 | 11,879,000 | |||
Recurring [Member] | Level 1 [Member] | ||||||
Short-term investments [Abstract] | ||||||
Mutual funds | 2,568,000 | 2,568,000 | 2,140,000 | |||
Prepaid expenses and other current assets [Abstract] | ||||||
Forward foreign currency exchange contracts | 0 | 0 | 0 | |||
Other current liabilities [Abstract] | ||||||
Deferred compensation | 2,568,000 | 2,568,000 | 2,140,000 | |||
Other liabilities [Abstract] | ||||||
Warrant liability | 0 | 0 | 0 | |||
Recurring [Member] | Level 2 [Member] | ||||||
Short-term investments [Abstract] | ||||||
Mutual funds | 0 | 0 | 0 | |||
Prepaid expenses and other current assets [Abstract] | ||||||
Forward foreign currency exchange contracts | 1,149,000 | 1,149,000 | 427,000 | |||
Other current liabilities [Abstract] | ||||||
Deferred compensation | 0 | 0 | 0 | |||
Other liabilities [Abstract] | ||||||
Warrant liability | 0 | 0 | 0 | |||
Recurring [Member] | Level 3 [Member] | ||||||
Short-term investments [Abstract] | ||||||
Mutual funds | 0 | 0 | 0 | |||
Prepaid expenses and other current assets [Abstract] | ||||||
Forward foreign currency exchange contracts | 0 | 0 | 0 | |||
Other current liabilities [Abstract] | ||||||
Deferred compensation | 0 | 0 | 0 | |||
Other liabilities [Abstract] | ||||||
Warrant liability | $ 0 | $ 0 | $ 11,879,000 | |||
[1] | Represents the fair value of the Supplier Warrant as of the exercise date (see Note 8). |
Share-based Payments - Stock Op
Share-based Payments - Stock Options Activity (Details) - Stock Options [Member] - USD ($) | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Summary of Black-Scholes option pricing model assumptions used to derive weighted average fair value of stock options granted [Abstract] | ||
Weighted average risk free interest rate | 1.90% | 1.38% |
Weighted average expected holding period | 5 years 9 months 25 days | 5 years 10 months 2 days |
Weighted average expected volatility | 47.36% | 47.42% |
Weighted average expected dividend yield | 0.00% | 0.00% |
Weighted average fair value of options granted (in dollars per share) | $ 12.69 | $ 13.07 |
Number of Shares [Roll Forward] | ||
Outstanding at beginning of period (in shares) | 1,036,359 | |
Granted (in shares) | 163,100 | 184,000 |
Exercised (in shares) | (28,951) | |
Forfeited (in shares) | (1,000) | |
Outstanding at end of period (in shares) | 1,169,508 | |
Weighted Average Exercise Price [Roll Forward] | ||
Outstanding at beginning of period (in dollars per share) | $ 14.92 | |
Granted (in dollars per share) | 27.40 | |
Exercised (in dollars per share) | 10.15 | |
Forfeited (in dollars per share) | 29.66 | |
Outstanding at end of period (in dollars per share) | $ 16.77 | |
Number of stock options unvested (in shares) | 324,087 | |
Weighted average exercise price of stock options unvested (in dollars per share) | $ 28.33 | |
Total unrecognized compensation expense | $ 3,833,000 | |
Weighted average vesting period over which compensation expense is expected to be recognized | 2 years 1 month 6 days |
Share-based Payments - Restrict
Share-based Payments - Restricted Stock Units (Details) - Restricted Stock [Member] - USD ($) | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Number of Shares [Roll Forward] | ||
Non-vested at beginning of period (in shares) | 126,277 | |
Granted (in shares) | 60,000 | 42,876 |
Vested (in shares) | (56,909) | |
Forfeited (in shares) | 0 | |
Non-vested at end of period (in shares) | 129,368 | |
Weighted Average Grant Date Fair Value [Roll Forward] | ||
Non-vested at beginning of period (in dollars per share) | $ 28.26 | |
Granted (in dollars per share) | 27.40 | |
Vested (in dollars per share) | 26.89 | |
Forfeited (in dollars per share) | 0 | |
Non-vested at end of period (in dollars per share) | $ 28.46 | |
Estimated fair value of awards granted | $ 1,644,000 | $ 1,224,000 |
Total unrecognized compensation expense | $ 3,123,000 | |
Weighted average vesting period over which compensation expense is expected to be recognized | 2 years 1 month 6 days |
Accumulated Other Comprehensi55
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance at beginning of period | $ 248,681,000 | |||
Other comprehensive income (loss), net of tax | $ 668,000 | $ (741,000) | 953,000 | $ (1,254,000) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 0 | 0 | 0 | 0 |
Balance at end of period | 274,096,000 | 274,096,000 | ||
AOCI Attributable to Parent [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance at beginning of period | (7,156,000) | (5,365,000) | (7,441,000) | (4,852,000) |
Balance at end of period | (6,488,000) | (6,106,000) | (6,488,000) | (6,106,000) |
Unrealized Gain (Loss) on Short-Term Investments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance at beginning of period | 584,000 | 354,000 | 528,000 | 332,000 |
Other comprehensive income (loss), net of tax | 60,000 | 66,000 | 116,000 | 88,000 |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 0 | 0 | 0 | 0 |
Balance at end of period | 644,000 | 420,000 | 644,000 | 420,000 |
Foreign Currency Translation [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance at beginning of period | (7,740,000) | (5,719,000) | (7,969,000) | (5,184,000) |
Other comprehensive income (loss), net of tax | 608,000 | (807,000) | 837,000 | (1,342,000) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 0 | 0 | 0 | 0 |
Balance at end of period | $ (7,132,000) | $ (6,526,000) | $ (7,132,000) | $ (6,526,000) |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - Common Stock [Member] | 6 Months Ended |
Sep. 30, 2017USD ($)shares | |
Equity, Class of Treasury Stock [Line Items] | |
Stock repurchase program, approved amount | $ 15,000,000 |
Shares utilized, amount | 6,855,000 |
Shares available for repurchase, amount | $ 8,145,000 |
Shares repurchased and retired (in shares) | shares | 303,665 |