Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Jun. 07, 2018 | Sep. 30, 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 Public Float | $ 553,613,587 | ||
Entity Common Stock, Shares Outstanding | 18,893,102 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Mar. 31, 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 13,049,000 | $ 9,029,000 |
Short-term investments | 2,828,000 | 2,140,000 |
Accounts receivable - net | 15,738,000 | 26,017,000 |
Inventory - net | 76,275,000 | 67,516,000 |
Inventory unreturned | 7,508,000 | 7,581,000 |
Income tax receivable | 7,796,000 | 1,709,000 |
Prepaid expenses and other current assets | 11,491,000 | 8,139,000 |
Total current assets | 134,685,000 | 122,131,000 |
Plant and equipment - net | 28,322,000 | 18,437,000 |
Long-term core inventory - net | 301,656,000 | 262,922,000 |
Long-term core inventory deposits | 5,569,000 | 5,569,000 |
Long-term deferred income taxes | 10,556,000 | 13,546,000 |
Goodwill | 2,551,000 | 2,551,000 |
Intangible assets - net | 3,766,000 | 3,993,000 |
Other assets | 7,392,000 | 6,990,000 |
TOTAL ASSETS | 494,497,000 | 436,139,000 |
Current liabilities: | ||
Accounts payable | 73,273,000 | 85,960,000 |
Accrued liabilities | 11,799,000 | 10,077,000 |
Customer finished goods returns accrual | 17,805,000 | 17,667,000 |
Accrued core payment | 16,536,000 | 11,714,000 |
Revolving loan | 54,000,000 | 11,000,000 |
Other current liabilities | 4,471,000 | 3,300,000 |
Current portion of term loan | 3,068,000 | 3,064,000 |
Total current liabilities | 180,952,000 | 142,782,000 |
Term loan, less current portion | 13,913,000 | 16,935,000 |
Long-term accrued core payment | 18,473,000 | 12,349,000 |
Long-term deferred income taxes | 226,000 | 180,000 |
Other liabilities | 5,957,000 | 15,212,000 |
Total liabilities | 219,521,000 | 187,458,000 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock | 0 | 0 |
Common stock; par value $.01 per share, 50,000,000 shares authorized; 18,893,102 and 18,648,854 shares issued and outstanding at March 31, 2018 and 2017, respectively | 189,000 | 186,000 |
Additional paid-in capital | 213,609,000 | 205,646,000 |
Retained earnings | 66,606,000 | 50,290,000 |
Accumulated other comprehensive loss | (5,428,000) | (7,441,000) |
Total shareholders' equity | 274,976,000 | 248,681,000 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 494,497,000 | 436,139,000 |
Series A Junior Participating Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | 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) | 18,893,102 | 18,648,854 |
Common stock, outstanding (in shares) | 18,893,102 | 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 Inco
Consolidated Statements of Income - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Consolidated Statements of Income [Abstract] | |||||||||||
Net sales | $ 121,108,000 | $ 100,127,000 | $ 111,774,000 | $ 95,063,000 | $ 114,410,000 | $ 112,595,000 | $ 108,836,000 | $ 85,412,000 | $ 428,072,000 | $ 421,253,000 | $ 368,970,000 |
Cost of goods sold | 90,780,000 | 77,583,000 | 84,612,000 | 69,224,000 | 82,783,000 | 80,225,000 | 78,178,000 | 65,021,000 | 322,199,000 | 306,207,000 | 268,046,000 |
Gross profit | 30,328,000 | 22,544,000 | 27,162,000 | 25,839,000 | 31,627,000 | 32,370,000 | 30,658,000 | 20,391,000 | 105,873,000 | 115,046,000 | 100,924,000 |
Operating expenses: | |||||||||||
General and administrative | 8,810,000 | 11,915,000 | 8,615,000 | 6,187,000 | 9,678,000 | 7,952,000 | 9,869,000 | 3,625,000 | 35,527,000 | 31,124,000 | 49,665,000 |
Sales and marketing | 4,131,000 | 4,048,000 | 3,457,000 | 3,394,000 | 3,551,000 | 3,234,000 | 2,707,000 | 2,634,000 | 15,030,000 | 12,126,000 | 9,965,000 |
Research and development | 1,772,000 | 1,678,000 | 1,240,000 | 1,002,000 | 1,011,000 | 1,039,000 | 905,000 | 869,000 | 5,692,000 | 3,824,000 | 3,008,000 |
Total operating expenses | 14,713,000 | 17,641,000 | 13,312,000 | 10,583,000 | 14,240,000 | 12,225,000 | 13,481,000 | 7,128,000 | 56,249,000 | 47,074,000 | 62,638,000 |
Operating income | 15,615,000 | 4,903,000 | 13,850,000 | 15,256,000 | 17,387,000 | 20,145,000 | 17,177,000 | 13,263,000 | 49,624,000 | 67,972,000 | 38,286,000 |
Interest expense, net | 4,656,000 | 3,953,000 | 3,522,000 | 3,314,000 | 3,729,000 | 3,357,000 | 3,189,000 | 2,819,000 | 15,445,000 | 13,094,000 | 16,244,000 |
Income before income tax expense | 10,959,000 | 950,000 | 10,328,000 | 11,942,000 | 13,658,000 | 16,788,000 | 13,988,000 | 10,444,000 | 34,179,000 | 54,878,000 | 22,042,000 |
Income tax expense | 1,764,000 | 7,756,000 | 4,027,000 | 4,316,000 | 3,846,000 | 5,678,000 | 4,845,000 | 2,936,000 | 17,863,000 | 17,305,000 | 11,479,000 |
Net income (loss) | $ 9,195,000 | $ (6,806,000) | $ 6,301,000 | $ 7,626,000 | $ 9,812,000 | $ 11,110,000 | $ 9,143,000 | $ 7,508,000 | $ 16,316,000 | $ 37,573,000 | $ 10,563,000 |
Basic net income per share (in dollars per share) | $ 0.48 | $ (0.36) | $ 0.34 | $ 0.41 | $ 0.53 | $ 0.59 | $ 0.49 | $ 0.40 | $ 0.87 | $ 2.02 | $ 0.58 |
Diluted net income per share (in dollars per share) | $ 0.47 | $ (0.36) | $ 0.33 | $ 0.39 | $ 0.50 | $ 0.57 | $ 0.47 | $ 0.39 | $ 0.84 | $ 1.93 | $ 0.55 |
Weighted average number of shares outstanding: | |||||||||||
Basic (in shares) | 18,854,993 | 18,608,812 | 18,233,163 | ||||||||
Diluted (in shares) | 19,514,775 | 19,418,706 | 19,066,093 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Consolidated Statements of Comprehensive Income [Abstract] | |||
Net income | $ 16,316,000 | $ 37,573,000 | $ 10,563,000 |
Other comprehensive income (loss), net of tax: | |||
Unrealized gain (loss) on short-term investments (net of tax of $118,000, $111,000, and $(8,000), respectively) | 218,000 | 196,000 | (13,000) |
Foreign currency translation gain (loss) | 1,795,000 | (2,785,000) | (2,321,000) |
Total other comprehensive income (loss), net of tax | 2,013,000 | (2,589,000) | (2,334,000) |
Comprehensive income | $ 18,329,000 | $ 34,984,000 | $ 8,229,000 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Other comprehensive income (loss), net of tax: | |||
Unrealized gain (loss) on short-term investments, tax | $ 118,000 | $ 111,000 | $ (8,000) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital Common Stock [Member] | Retained Earnings (Accumulated Deficit) [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Beginning balance at Mar. 31, 2015 | $ 180,000 | $ 191,279,000 | $ 1,262,000 | $ (2,518,000) | $ 190,203,000 |
Balance (in shares) at Mar. 31, 2015 | 17,974,598 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Compensation recognized under employee stock plans | $ 0 | 2,584,000 | 0 | 0 | 2,584,000 |
Exercise of stock options | $ 5,000 | 5,387,000 | 0 | 0 | 5,392,000 |
Exercise of stock options (in shares) | 510,637 | ||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | $ 0 | (913,000) | 0 | 0 | (913,000) |
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes (in shares) | 46,516 | ||||
Tax benefit from employee stock options exercised | $ 0 | 5,313,000 | 0 | 0 | 5,313,000 |
Unrealized gain (loss) on investments, net of tax | 0 | 0 | 0 | (13,000) | (13,000) |
Foreign currency translation | 0 | 0 | 0 | (2,321,000) | (2,321,000) |
Net income | 0 | 0 | 10,563,000 | 0 | 10,563,000 |
Ending balance (As Previously Reported [Member]) at Mar. 31, 2016 | $ 185,000 | 203,650,000 | 11,825,000 | (4,852,000) | 210,808,000 |
Ending balance at Mar. 31, 2016 | (4,852,000) | ||||
Balance (in shares) (As Previously Reported [Member]) at Mar. 31, 2016 | 18,531,751 | ||||
Balance (in shares) at Mar. 31, 2016 | 18,531,751 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative-effect adjustment | Adjustment [Member] | ASU 2016-09 [Member] | $ 0 | 0 | 892,000 | 0 | 892,000 |
Balance April 1, 2016 | ASU 2016-09 [Member] | 185,000 | 203,650,000 | 12,717,000 | (4,852,000) | 211,700,000 |
Compensation recognized under employee stock plans | 0 | 3,383,000 | 0 | 0 | 3,383,000 |
Exercise of stock options | $ 1,000 | 1,661,000 | 0 | 0 | 1,662,000 |
Exercise of stock options (in shares) | 133,731 | ||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | $ 1,000 | (1,059,000) | 0 | 0 | (1,058,000) |
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes (in shares) | 53,031 | ||||
Repurchase and cancellation of treasury stock, including fees | $ (1,000) | (1,989,000) | 0 | 0 | (1,990,000) |
Repurchase and cancellation of treasury stock, including fees (in shares) | (69,659) | ||||
Unrealized gain (loss) on investments, net of tax | $ 0 | 0 | 0 | 196,000 | 196,000 |
Foreign currency translation | 0 | 0 | 0 | (2,785,000) | (2,785,000) |
Net income | 0 | 0 | 37,573,000 | 0 | 37,573,000 |
Ending balance at Mar. 31, 2017 | $ 186,000 | 205,646,000 | 50,290,000 | (7,441,000) | $ 248,681,000 |
Balance (in shares) at Mar. 31, 2017 | 18,648,854 | 18,648,854 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Compensation recognized under employee stock plans | $ 0 | 3,766,000 | 0 | 0 | $ 3,766,000 |
Exercise of stock options | $ 1,000 | 480,000 | 0 | 0 | 481,000 |
Exercise of stock options (in shares) | 55,351 | ||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | $ 1,000 | (597,000) | 0 | 0 | (596,000) |
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes (in shares) | 47,508 | ||||
Repurchase and cancellation of treasury stock, including fees | $ (4,000) | (9,247,000) | 0 | 0 | (9,251,000) |
Repurchase and cancellation of treasury stock, including fees (in shares) | (374,740) | ||||
Exercise of warrant for shares of common stock | $ 5,000 | 13,561,000 | 0 | 0 | 13,566,000 |
Exercise of warrant for shares of common stock (in shares) | 516,129 | ||||
Unrealized gain (loss) on investments, net of tax | $ 0 | 0 | 0 | 218,000 | 218,000 |
Foreign currency translation | 0 | 0 | 0 | 1,795,000 | 1,795,000 |
Net income | 0 | 0 | 16,316,000 | 0 | 16,316,000 |
Ending balance at Mar. 31, 2018 | $ 189,000 | $ 213,609,000 | $ 66,606,000 | $ (5,428,000) | $ 274,976,000 |
Balance (in shares) at Mar. 31, 2018 | 18,893,102 | 18,893,102 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 16,316,000 | $ 37,573,000 | $ 10,563,000 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Depreciation | 3,798,000 | 3,101,000 | 2,315,000 |
Amortization of intangible assets | 710,000 | 613,000 | 621,000 |
Amortization of debt issuance costs | 1,060,000 | 716,000 | 790,000 |
Write-off of debt issuance costs | 0 | 0 | 5,108,000 |
Amortization of interest on accrued core payment | 670,000 | 704,000 | 736,000 |
(Gain) loss due to the change in the fair value of the warrant liability | (2,313,000) | (3,764,000) | 5,137,000 |
Gain due to the change in the fair value of the contingent consideration | 0 | (16,000) | (990,000) |
Net provision for inventory reserves | 8,491,000 | 3,864,000 | 4,518,000 |
Net provision for (recovery of) customer payment discrepancies | 998,000 | 718,000 | (299,000) |
Net provision for doubtful accounts | 21,000 | 3,000 | 4,404,000 |
Deferred income taxes | 3,055,000 | 6,510,000 | (3,781,000) |
Share-based compensation expense | 3,766,000 | 3,383,000 | 2,584,000 |
Loss on disposal of plant and equipment | 161,000 | 13,000 | 7,000 |
Change in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | 10,854,000 | (18,145,000) | 4,647,000 |
Inventory | (6,847,000) | (10,058,000) | 3,054,000 |
Inventory unreturned | 73,000 | 2,939,000 | (2,687,000) |
Income tax receivable | (6,081,000) | (1,686,000) | 3,981,000 |
Prepaid expenses and other current assets | (2,507,000) | (2,647,000) | (1,216,000) |
Other assets | (384,000) | (3,339,000) | (477,000) |
Accounts payable and accrued liabilities | (11,621,000) | 12,446,000 | 6,620,000 |
Customer finished goods returns accrual | 138,000 | (8,709,000) | 6,698,000 |
Long-term core inventory | (45,839,000) | (24,964,000) | (53,408,000) |
Long-term core inventory deposits | 0 | 0 | 26,002,000 |
Accrued core payment | 10,276,000 | (3,180,000) | (11,266,000) |
Other liabilities | 1,261,000 | (1,344,000) | 1,673,000 |
Net cash (used in) provided by operating activities | (13,944,000) | (5,269,000) | 15,334,000 |
Cash flows from investing activities: | |||
Purchase of plant and equipment | (9,933,000) | (4,929,000) | (3,747,000) |
Purchase of business | (4,993,000) | (705,000) | (2,701,000) |
Additions to short term investments | (352,000) | (49,000) | (1,134,000) |
Net cash used in investing activities | (15,278,000) | (5,683,000) | (7,582,000) |
Cash flows from financing activities: | |||
Borrowings under revolving loan | 84,000,000 | 65,001,000 | 29,000,000 |
Repayments under revolving loan | (41,000,000) | (61,001,000) | (22,000,000) |
Borrowings under term loan | 0 | 0 | 25,000,000 |
Repayments of term loan | (3,125,000) | (3,125,000) | (86,063,000) |
Payments for debt issuance costs | (462,000) | (433,000) | (2,337,000) |
Payments on capital lease obligations | (905,000) | (591,000) | (374,000) |
Payment of contingent consideration | 0 | (314,000) | 0 |
Exercise of stock options | 481,000 | 1,662,000 | 5,392,000 |
Excess tax benefits from stock-based compensation | 0 | 0 | 5,313,000 |
Cash used to net share settle equity awards | (596,000) | (1,058,000) | (913,000) |
Repurchase of common stock, including fees | (9,251,000) | (1,990,000) | 0 |
Exercise of warrant | 4,000,000 | 0 | 0 |
Net cash provided by (used in) financing activities | 33,142,000 | (1,849,000) | (46,982,000) |
Effect of exchange rate changes on cash and cash equivalents | 100,000 | (67,000) | (103,000) |
Net increase (decrease) in cash and cash equivalents | 4,020,000 | (12,868,000) | (39,333,000) |
Cash and cash equivalents - Beginning of period | 9,029,000 | 21,897,000 | 61,230,000 |
Cash and cash equivalents - End of period | 13,049,000 | 9,029,000 | 21,897,000 |
Cash paid during the period for: | |||
Interest, net | 13,623,000 | 11,674,000 | 9,812,000 |
Income taxes, net of refunds | 19,657,000 | 12,378,000 | 3,762,000 |
Non-cash investing and financing activities: | |||
Property acquired under capital lease | 3,478,000 | 802,000 | 2,454,000 |
Contingent consideration | $ 0 | $ 0 | $ 1,320,000 |
Company Background and Organiza
Company Background and Organization | 12 Months Ended |
Mar. 31, 2018 | |
Company Background and Organization [Abstract] | |
Company Background and Organization | 1. Company Background and Organization Overview Motorcar Parts of America, Inc. and its subsidiaries (the “Company”, or “MPA”) is a leading manufacturer, remanufacturer, and distributor of aftermarket automotive and light truck applications. The Company also, to a lesser extent, is a manufacturer, remanufacturer, and distributor of heavy duty truck and industrial and agricultural application 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 for alternators, starters, belt-start generators (stop start and hybrid technology), and electric power trains for electric vehicles 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies New Accounting Pronouncements Not Yet Adopted Revenue Recognition In May 2014, the Financial Accounting Standard Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, codified in Accounting Standards Codification (“ASC”) 606, “Revenue Recognition - Revenue from Contracts with Customers” (“ASC 606”), which amends the guidance in the former ASC 605, “Revenue Recognition”. ASC 606 as initially issued was effective for annual periods beginning after December 15, 2016, and interim periods within that reporting period for a public entity. 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 adjustment as of the date of initial adoption. 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 entity. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company will adopt the new standard on April 1, 2018 and has elected to utilize the full retrospective transition method. 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 that 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 of the new standard, the Company has made changes to its business processes, systems, and controls. A project team was formed and evaluated and guided the implementation process. The Company performed a preliminary assessment, which included the identification of the key contractual terms in its primary revenue streams and the comparison of historical accounting policies and practices to the requirements of the new standard by revenue stream. The preliminary assessment resulted in the identification of potential accounting differences that will arise from the application of the new standard. The implementation team completed its contract review phase of the project during the third quarter, which included identifying the population of contracts and completing an analysis of the potential accounting impacts of the new standard on individual contracts. During the fourth quarter, the implementation team identified the changes to business processes, systems, and controls to support recognition, presentation, and disclosure under the new standard and will implement these changes during the first quarter of fiscal 2019 as described in the subsequent paragraphs. The Company’s primary revenue stream is derived from the sale of remanufactured products to its customers pursuant to long-term customer contracts. The Company will continue to recognize revenue at a point in time as it satisfies its performance obligation of transferring control of the product to the customer. The Company recognizes revenues net of anticipated returns, marketing allowances, volume discounts, and other forms of variable consideration more fully described below. The Company also reviewed customer options to acquire additional goods or services and has preliminarily determined no material rights exist within its contracts. The Company does not currently anticipate that the adoption of ASU 2014-09 will have a material impact on previously reported revenue amounts. See discussion regarding Remanufactured Cores below. The Company currently anticipates that the adoption of ASU 2014-09 will primarily impact reclassifications to certain balance sheet accounts to conform to the presentation and disclosure requirements of ASC 606. For example, the Company currently accounts for Remanufactured Cores anticipated to be returned as long-term core inventory and the refund liability as a contra-account receivable account as illustrated in Note 6. Under ASC 606, the Company currently anticipates it will reclassify this asset to a contractual asset and recognize a contractual liability for amounts expected to be refunded to customers. The Company also analyzed specific contractual provisions related to sales contracts that include Remanufactured Cores. The Company recognizes revenue for sales of cores not expected to be replaced by a similar Used Core sent back under the core exchange program only upon meeting certain criteria as noted under the caption “Revenue Recognition” below. The adoption of ASU 2014-09 may result in an acceleration of revenue recognition, as it requires the Company to estimate the amount of cores not expected to be returned upon the initial recognition of revenue for contracts that include Remanufactured Cores. As the Company has elected the full retrospective method of adoption, the impact to each reporting period will be measured as the net impact of (i) the acceleration of revenue into a prior period versus what was previously recorded in that period and (ii) the acceleration of revenue into that period previously recognized in a later period (the change in the estimated volume of returns in the comparable recast periods). In order to properly determine the transaction price related to its sales contracts, the Company has also analyzed its various forms of consideration paid to its vendors including up-front payments for future contracts. Based on the analysis completed through the year ended March 31, 2018, the Company currently does not anticipate a change to its legacy accounting practices as a result of the adoption of ASU 2014-09 to account for up-front payments to its vendors. Under current accounting practices, if the Company expects to generate future revenues associated with an up-front payment, then an asset is recognized and amortized over the appropriate period of time as a reduction of revenue. If the Company does not expect to generate additional revenue then the up-front payment is recognized in the consolidated statements of income when payment occurs as a reduction of revenue. ASU 2014-09 also codified the guidance on other assets and deferred costs relating to contracts with customers with the addition of ASC 340-40. This guidance relates to the accounting for costs of an entity to obtain and fulfill a contract to provide goods or services to the customer. Under the new guidance, an entity shall recognize as an asset the incremental costs of obtaining a contract with a customer if the entity expects to recover those costs. In the Company’s review of the various costs to obtain contracts with its customers, it has preliminarily determined that currently no significant costs are incurred that meet the capitalization criteria. The Company’s primary cost to fulfill contracts, other than inventory related costs, relates to shipping and handling activities, which continue to be expensed as incurred consistent with historical accounting practices. The new guidance provides several practical expedients, 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. As noted above, the Company has preliminarily concluded that it does not have any such costs that qualify for capitalization but will apply the practical expedient to the extent that such costs incurred in prospective periods qualify. 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 that 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. Financial Instruments In January 2016, the FASB issued guidance that amends the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company expects to apply the amendments in the new guidance by means of a cumulative-effect adjustment to the opening balance of retained earnings at the beginning of the first quarter of fiscal 2019. The adoption of the new guidance is not expected to have a material impact on the Company’s 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. A reporting entity should apply the amendment prospectively 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 adoption of this guidance in the first quarter of fiscal 2019 is not expected to have any material impact on the Company’s 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. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Motorcar Parts of America, Inc. and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated. Reclassification of Prior Period Balances The income tax receivable has been reclassified from prepaid and other current assets in the consolidated balance sheet at March 31, 2017 to conform to the consolidated balance sheet presentation at March 31, 2018. In addition, the income tax receivable has been reclassified from prepaid and other current assets in the consolidated statements of cash flows for the years ended March 31, 2017 and 2016 to conform to the consolidated statement of cash flow presentation for the year ended March 31, 2018. Segment Reporting Pursuant to the guidance provided under the FASB ASC for segment reporting, the Company has identified its chief executive officer as 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. has determined through this review process that it has one reportable segment for purposes of recording and reporting its financial results. Cash and Cash Equivalents Cash primarily consists of cash on hand and bank deposits. Cash equivalents consist of money market funds. Accounts Receivable The allowance for doubtful accounts is developed based upon several factors including customer credit quality, historical write-off experience and any known specific issues or disputes which exist as of the balance sheet date. Accounts receivable are written off only when all collection attempts have failed. The Company does not require collateral for accounts receivable. The Company has receivable discount programs that have been established with certain major customers and their respective banks. Under these programs, the Company has the option to sell those customers’ receivables to those banks at a discount to be agreed upon at the time the receivables are sold. Once the customer chooses which outstanding invoices are going to be made available for discounting, the Company can accept or decline the bundle of invoices provided. The receivable discount programs are non-recourse, and funds cannot be reclaimed by the customer or its bank after the related invoices have been discounted. Inventory Non-core Inventory Non-core inventory is comprised of (i) non-core raw materials, (ii) the non-core value of work in process, (iii) the non-core value of remanufactured finished goods, and (iv) purchased finished goods. Used Cores, the Used Core value of work in process and the Remanufactured Core portion of finished goods are classified as long-term core inventory as described below under the caption “Long-term Core Inventory.” Used Cores are a source of raw materials used in the manufacturing of the Company’s products. Non-core inventory is stated at the lower of cost or net realizable value. The cost of non-core remanufactured inventory approximates average historical purchase prices paid for raw materials, and is based upon the direct costs of material and an allocation of labor and variable and fixed overhead costs. The cost of purchased finished goods inventory approximates average historical purchase prices paid, and an allocation of fixed overhead costs. The cost of non-core inventory is evaluated at least quarterly during the fiscal year and adjusted as necessary to reflect current lower of cost or net realizable value levels. These adjustments are determined for individual items of inventory within each of the three classifications of non-core inventory as follows: • Non-core raw materials are recorded at average cost, which is based on the actual purchase price of raw materials on hand. The average cost is updated quarterly. This average cost is used in the inventory costing process and is the basis for allocation of materials to finished goods during the production process. • Non-core work in process is in various stages of production and is valued at the average cost of materials issued to open work orders. Historically, non-core work in process inventory has not been material compared to the total non-core inventory balance. • The cost of remanufactured finished goods includes the average cost of non-core raw materials and allocations of labor and variable and fixed overhead costs. The allocations of labor and variable and fixed overhead costs are determined based on the average actual use of the production facilities over the prior twelve months which approximates normal capacity. This method prevents the distortion in allocated labor and overhead costs that would occur during short periods of abnormally low or high production. In addition, the Company excludes certain unallocated overhead such as severance costs, duplicative facility overhead costs, start-up costs, training, and spoilage from the calculation and expenses these unallocated overhead as period costs. The Company records an allowance for potentially excess and obsolete inventory based upon recent sales history, the quantity of inventory on-hand, and a forecast of potential use of the inventory. The Company periodically reviews inventory to identify excess quantities and part numbers that are experiencing a reduction in demand. Any part numbers with quantities identified during this process are reserved for at rates based upon management’s judgment, historical rates, and consideration of possible scrap and liquidation values which may be as high as 100% of cost if no liquidation market exists for the part. The Company had recorded reserves of $6,682,000 and $4,125,000 for excess and obsolete inventory at March 31, 2018 and 2017, respectively. The quantity thresholds and reserve rates are subjective and are based on management’s judgment and knowledge of current and projected industry demand. The reserve estimates may, therefore, be revised if there are changes in the overall market for the Company’s products or market changes that in management’s judgment, impact its ability to sell or liquidate potentially excess or obsolete inventory. The Company records vendor discounts as a reduction of inventories that are recognized as a reduction to cost of sales as the inventories are sold. Inventory Unreturned Inventory unreturned represents the Company’s estimate, based on historical data and prospective information provided directly by the customer, of finished goods shipped to customers that the Company expects to be returned, under its general right of return policy, after the balance sheet date. Because all cores are classified separately as long-term assets, the inventory unreturned balance includes only the added unit value of a finished good. The return rate is calculated based on expected returns within the normal operating cycle of one year. As such, the related amounts are classified in current assets. Inventory unreturned is valued in the same manner as the Company’s finished goods inventory. Long-term Core Inventory Long-term core inventory consists of: • Used Cores purchased from core brokers and held in inventory at the Company’s facilities, • Used Cores returned by the Company’s customers and held in inventory at the Company’s facilities, • Used Cores returned by end-users to customers but not yet returned to the Company are classified as Remanufactured Cores until they are physically received by the Company, • Remanufactured Cores held in finished goods inventory at the Company’s facilities; and • Remanufactured Cores held at customer locations as a part of the finished goods sold to the customer. For these Remanufactured Cores, the Company expects the finished good containing the Remanufactured Core to be returned under the Company’s general right of return policy or a similar Used Core to be returned to the Company by the customer, in each case, for credit. Long-term core inventory is recorded at average historical purchase prices determined based on actual purchases of inventory on hand. The cost and net realizable value of Used Cores for which sufficient recent purchases have occurred are deemed the same as the purchase price for purchases that are made in arm’s length transactions. Long-term core inventory recorded at average historical purchase prices is primarily made up of Used Cores for newer products related to more recent automobile models or products for which there is a less liquid market. The Company purchases these Used Cores from core brokers to supplement the yield from returned cores and the under return by consumers. Used Cores obtained in core broker transactions are valued based on average purchase price. The average purchase price of Used Cores for more recent automobile models is retained as the cost for these Used Cores in subsequent periods even as the source of these Used Cores shifts to the core exchange program. Long-term core inventory is recorded at the lower of cost or net realizable value. In the absence of sufficient recent purchases the Company uses the net selling price its customers have agreed to pay for Used Cores that are not returned to the Company under the Company’s core exchange program to assess whether Used Core cost exceeds Used Core net realizable value The Company classifies all of its core inventories as long-term assets. The determination of the long-term classification is based on its view that the value of the cores is not consumed or realized in cash during the Company’s normal operating cycle, which is one year for most of the cores recorded in inventory. According to guidance provided under the FASB ASC, current assets are defined as “assets or resources commonly identified as those which are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business.” The Company does not believe that the economic value of core inventories, which the Company classifies as long-term, is consumed because the credits issued upon the return of Used Cores offset the amounts invoiced when the Remanufactured Cores included in finished goods were sold. The Company does not expect the economic value of core inventories to be consumed, and thus the Company does not expect to realize cash, until its relationship with a customer ends, a possibility that the Company considers remote based on existing long-term customer agreements and historical experience. However, historically for certain finished goods sold, the Company’s customer will not send the Company a Used Core to obtain the credit the Company offers under its core exchange program. Therefore, based on the Company’s historical estimate, the Company derecognizes the core value for these finished goods as the Company believes the economic value has been consumed and the Company has realized cash. For these reasons, the Company concluded that it is more appropriate to classify core inventory as long-term assets. Long-term Core Inventory Deposit The long-term core inventory deposit represents the cost of Remanufactured Cores the Company has purchased from customers, which are held by the customers and remain on the customers’ premises. The costs of these Remanufactured Cores were established at the time of the transaction based on the then current cost, determined as noted under the caption “Long-term Core Inventory”. The selling value of these Remanufactured Cores was established based on agreed upon amounts with these customers. The Company expects to realize the selling value and the related cost of these Remanufactured Cores should its relationship with a customer end, a possibility that the Company considers remote based on existing long-term customer agreements and historical experience. Customer Finished Goods Returns Accrual The customer finished goods returns accrual represents the Company’s estimate of its exposure to customer returns, including warranty returns, under its general right of return policy to allow customers to return items that their end user customers have returned to them and from time to time, stock adjustment returns when the customers’ inventory of certain product lines exceeds the anticipated sales to end-user customers. The customer finished goods returns accrual represents the non-core sales value of the estimated returns and is classified as a current liability due to the expectation that these returns will occur within the normal operating cycle of one year. Accrued Core Payment The accrued core payment represents the full Remanufactured Core sales price of Remanufactured Cores the Company has purchased from its customers, generally in connection with new business, which are held by these customers and remain on their premises. At the same time, the Company records the long-term core inventory for the Remanufactured Cores purchased at its cost, determined as noted under the caption “Long-term Core Inventory”. The difference between the full Remanufactured Core sales price of Remanufactured Cores and its related cost is treated as sales allowance reducing revenue when the purchases are made. The Company expects to realize the selling value and the related cost of these Remanufactured Cores should its relationship with a customer end, a possibility that the Company considers remote based on existing long-term customer agreements and historical experience. The repayments for these Remanufactured Core inventory purchases are made through the issuance of credits against that customer’s receivables either on a one-time basis or over an agreed-upon period. The accrued core payment is recorded as a current and noncurrent liability in the consolidated balance sheets based on whether repayments will occur within the normal operating cycle of one year. Income Taxes The Company accounts for income taxes using the liability method, which measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The resulting asset or liability is adjusted to reflect changes in the tax laws as they occur. A valuation allowance is provided to reduce deferred tax assets when it is more likely than not that a portion of the deferred tax asset will not be realized. The primary components of the Company’s income tax provision are (i) the current liability or refund due for federal, state and foreign income taxes and (ii) the change in the amount of the net deferred income tax asset, including the effect of any change in the valuation allowance. In December 2017, new tax legislation was enacted in the United States (Tax Reform Act) which resulted in significant changes to income tax expense. As a result of the Tax Reform Act, the Company re-measured certain deferred tax assets and liabilities based on the newly enacted federal rate of 21%. Accordingly, the federal net deferred tax assets were written down to account for the change. These tax changes represent provisional amounts based on the Company’s current interpretation of the Tax Reform Act and may change as it receives additional clarification and implementation guidance. The Company will continue to analyze the effects of the Tax Reform Act on its financial statements and operations. Any additional impacts from the enactment of the Tax Reform Act will be recorded as they are identified during the measurement period as provided for in accordance with Staff Accounting Bulletin No. 118. Realization of deferred tax assets is dependent upon the Company’s ability to generate sufficient future taxable income. Significant judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against the Company’s net deferred tax assets. The Company makes these estimates and judgments about its future taxable income that are based on assumptions that are consistent with the Company’s future plans. A valuation allowance is established when the Company believes it is not more likely than not all or some of a deferred tax assets will be realized. In evaluating the Company’s ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence. Deferred tax assets arising primarily as a result of net operating loss carry-forwards and research and development credits in connection with the Company’s July 2017 acquisition have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Should the actual amount differ from the Company’s estimates, the amount of the valuation allowance could be impacted. Plant and Equipment Plant and equipment are stated at cost, less accumulated depreciation. The cost of additions and improvements are capitalized, while maintenance and repairs are charged to expense when incurred. Depreciation is provided on a straight-line basis in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives. Machinery and equipment are depreciated over a range from five to ten years. Office equipment and fixtures are depreciated over a range from three to ten years. Leasehold improvements are depreciated over the lives of the respective leases or the service lives of the leasehold improvements, whichever is shorter. Depreciation of assets recorded under capital leases is included in depreciation expense. Intangible Assets The Company’s intangible assets other than goodwill are finite–lived and amortized on a straight-line basis over their respective useful lives. Finite-lived intangible assets are analyzed for impairment when and if indicators of impairment exist. At March 31, 2018, the Company’s intangible assets were $3,766,000 and there were no indicators of impairment. Goodwill The Company evaluates goodwill for impairment at least annually during the fourth quarter of each fiscal year or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The Company has concluded that there is one reporting unit and therefore, tests goodwill for impairment at the entity level. In testing for goodwill impairment, the Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company’s qualitative assessment indicates that goodwill impairment is more likely than not, a two-step impairment test is performed. The Company tests goodwill for impairment under the two-step impairment test by first comparing the carrying value of net assets to the fair value of the reporting unit. If the fair value of the reporting unit exceeds the carrying value, goodwill is not considered impaired and no further testing is required. If the carrying value of the reporting unit exceeds the fair value, goodwill is potentially impaired and the second step of the impairment test must be performed. In the second step, the Company would compare the implied fair value of the goodwill to its carrying value to determine the amount of the impairment loss, if any. The Company completed the required annual testing of goodwill for impairment during the fourth quarter of the year ended March 31, 2018, and determined through the qualitative assessment that its goodwill of $2,551,000 is not impaired. Debt Issuance Costs Debt issuance costs include fees and costs incurred to obtain financing. These fees and costs are amortized using the straight-line method, which approximates the effective interes |
Acquisition
Acquisition | 12 Months Ended |
Mar. 31, 2018 | |
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 diagnostic equipment for alternators, starters, belt-start generators (stop start and hybrid technology), and electric power-trains for electric vehicles. The Company allocated the final purchase consideration to acquire D&V to finite-lived intangible assets of $308,000 for developed technology with an estimated useful life of 3 years and $185,000 for trademarks with an estimated useful life of 2 years, $3,379,000 for inventory, and other net assets of $1,121,000. 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 | 12 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets Goodwill The following summarizes the change in the Company’s goodwill: Years Ended March 31, 2018 2017 Balance at beginning of period $ 2,551,000 $ 2,053,000 Goodwill acquired - 498,000 Translation adjustment - - Impairment - - Balance at end of period $ 2,551,000 $ 2,551,000 Intangible Assets The following is a summary of acquired intangible assets subject to amortization at March 31: 2018 2017 Weighted Average Amortization Period Gross Carrying Value Accumulated Amortization Gross Carrying Value Accumulated Amortization Intangible assets subject to amortization Trademarks 9 years $ 885,000 $ 316,000 $ 705,000 $ 191,000 Customer relationships 13 years 5,900,000 2,937,000 5,900,000 2,421,000 Developed technology 3 years 301,000 67,000 - - Total $ 7,086,000 $ 3,320,000 $ 6,605,000 $ 2,612,000 The Company did not retire any fully amortized intangible assets during the year ended March 31, 2018. The Company retired $33,000 of fully amortized intangible assets during the year ended March 31, 2017. Amortization expense for acquired intangible assets is as follows: Years Ended March 31, 2018 2017 2016 Amortization expense $ 710,000 $ 613,000 $ 621,000 The estimated future amortization expense for acquired intangible assets subject to amortization is as follows: Year Ending March 31, 2019 $ 771,000 2020 711,000 2021 613,000 2022 580,000 2023 580,000 Thereafter 511,000 Total $ 3,766,000 |
Short-Term Investments
Short-Term Investments | 12 Months Ended |
Mar. 31, 2018 | |
Short-Term Investments [Abstract] | |
Short-Term Investments | 5. Short-Term Investments The short-term investments contain the assets of the Company’s deferred compensation plan. The plan’s assets consist primarily of mutual funds and are classified as available for sale. The Company did not redeem any short-term investments for the payment of deferred compensation liabilities during the years ended March 31, 2018 and 2017. At March 31, 2018 and 2017, the fair market value of the short-term investments was $2,828,000 and $2,140,000, and the deferred compensation liability to plan participants was $2,828,000 and $2,140,000, respectively. |
Accounts Receivable - Net
Accounts Receivable - Net | 12 Months Ended |
Mar. 31, 2018 | |
Accounts Receivable - Net [Abstract] | |
Accounts Receivable - Net | 6. Accounts Receivable Net Included in accounts receivable — net are significant offset accounts related to customer allowances (see Note 15), 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 (see Note 2) and potential bad debts. Due to the forward looking nature and the different aging periods of certain estimated offset accounts, they 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 at March 31: 2018 2017 Accounts receivable — trade $ 83,700,000 $ 76,902,000 Allowance for bad debts (4,142,000 ) (4,140,000 ) Customer allowances earned (11,370,000 ) (7,880,000 ) Customer payment discrepancies (1,110,000 ) (751,000 ) Customer returns RGA issued (15,274,000 ) (12,710,000 ) Customer core returns accruals (36,066,000 ) (25,404,000 ) Less: total accounts receivable offset accounts (67,962,000 ) (50,885,000 ) Total accounts receivable — net $ 15,738,000 $ 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 March 31, 2018 and 2017, the Company’s total warranty return accrual was $16,646,000 and $14,286,000, respectively, of which $7,204,000 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 $9,442,000 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 change in the Company’s warranty return accrual: Years Ended March 31, 2018 2017 2016 Balance at beginning of period $ 14,286,000 $ 10,845,000 $ 10,904,000 Charged to expense 105,156,000 99,673,000 80,099,000 Amounts processed (102,796,000 ) (96,232,000 ) (80,158,000 ) Balance at end of period $ 16,646,000 $ 14,286,000 $ 10,845,000 |
Inventory
Inventory | 12 Months Ended |
Mar. 31, 2018 | |
Inventory [Abstract] | |
Inventory | 7. Inventory Non-core inventory, inventory unreturned, long-term core inventory, and long-term core inventory deposits are as follows at March 31: 2018 2017 Non-core inventory Raw materials $ 25,805,000 $ 21,515,000 Work in process 635,000 641,000 Finished goods 53,973,000 48,337,000 80,413,000 70,493,000 Less allowance for excess and obsolete inventory (4,138,000 ) (2,977,000 ) Total $ 76,275,000 $ 67,516,000 Inventory unreturned $ 7,508,000 $ 7,581,000 Long-term core inventory Used cores held at the Company's facilities $ 53,278,000 $ 38,713,000 Used cores expected to be returned by customers 12,970,000 11,752,000 Remanufactured cores held in finished goods 34,201,000 27,667,000 Remanufactured cores held at customers' locations (1) 203,751,000 185,938,000 304,200,000 264,070,000 Less allowance for excess and obsolete inventory (2,544,000 ) (1,148,000 ) Total $ 301,656,000 $ 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. |
Plant and Equipment
Plant and Equipment | 12 Months Ended |
Mar. 31, 2018 | |
Plant and Equipment [Abstract] | |
Plant and Equipment | 8. Plant and Equipment The following summarizes plant and equipment, at cost, at March 31: 2018 2017 Machinery and equipment $ 42,976,000 $ 32,589,000 Office equipment and fixtures 11,380,000 11,806,000 Leasehold improvements 7,832,000 7,641,000 62,188,000 52,036,000 Less accumulated depreciation (33,866,000 ) (33,599,000 ) Total $ 28,322,000 $ 18,437,000 Plant and equipment located in the foreign countries where the Company has facilities, net of accumulated depreciation, totaled $14,919,000 and $3,855,000 at March 31, 2018 and 2017, respectively. These assets constitute substantially all the long-lived assets of the Company located outside of the United States. |
Capital Lease Obligations
Capital Lease Obligations | 12 Months Ended |
Mar. 31, 2018 | |
Capital Lease Obligations [Abstract] | |
Capital Lease Obligations | 9. Capital Lease Obligations The Company leases various types of machinery and computer equipment under agreements accounted for as capital leases and included in plant and equipment as follows at March 31: 2018 2017 Cost $ 7,092,000 $ 3,663,000 Less: accumulated depreciation (1,446,000 ) (893,000 ) Total $ 5,646,000 $ 2,770,000 Future minimum lease payments for the capital leases are as follows: Year Ending March 31, 2019 $ 1,627,000 2020 1,474,000 2021 1,045,000 2022 839,000 2023 613,000 Total minimum lease payments 5,598,000 Less amount representing interest (514,000 ) Present value of future minimum lease payments 5,084,000 Less current portion of lease payments (1,388,000 ) Long-term portion of lease payments $ 3,696,000 The current portion of lease payments of $1,388,000 is included in other current liabilities and the long-term portion of lease payments of $3,696,000 is included in other liabilities in the accompanying consolidated balance sheet at March 31, 2018. |
Accrued Core Payment
Accrued Core Payment | 12 Months Ended |
Mar. 31, 2018 | |
Accrued Core Payment [Abstract] | |
Accrued Core Payment | 10. Accrued Core Payment At March 31, 2018 and 2017, the Company recorded $35,009,000 and $24,063,000, respectively, representing the net accrued core payment for the Remanufactured Core inventory purchased from its customers, which are held by these customers and remain on their premises. Future repayments for accrued core payment are as follows: Year Ending March 31, 2019 $ 17,421,000 2020 7,865,000 2021 6,651,000 2022 4,841,000 Total accrued core payment 36,778,000 Less amount representing interest (1,769,000 ) Present value of accrued core payment 35,009,000 Less current portion of accrued core payment (16,536,000 ) Long-term portion of accrued core payment $ 18,473,000 |
Debt
Debt | 12 Months Ended |
Mar. 31, 2018 | |
Debt [Abstract] | |
Debt | 11. 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) modified certain other categories (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 4.42% and 4.52%, respectively, at March 31, 2018 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 March 31, 2018. 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 March 31: 2018 2017 Principal amount of term loan $ 17,188,000 $ 20,312,000 Unamortized financing fees (207,000 ) (313,000 ) Net carrying amount of term loan 16,981,000 19,999,000 Less current portion of term loan (3,068,000 ) (3,064,000 ) Long-term portion of term loan $ 13,913,000 $ 16,935,000 Future repayments of the Company’s Term Loans are as follows: Year Ending March 31, 2019 $ 3,125,000 2020 3,125,000 2021 10,938,000 Total payments $ 17,188,000 The Company had $54,000,000 and $11,000,000 outstanding under the Revolving Facility at March 31, 2018 and 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 March 31, 2018. At March 31, 2018, $65,140,000, 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 years ended March 31, 2018 and 2017, a gain of $2,313,000 and $3,764,000, respectively, was 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 | 12 Months Ended |
Mar. 31, 2018 | |
Accounts Receivable Discount Programs [Abstract] | |
Accounts Receivable Discount Programs | 12. 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: Years Ended March 31, 2018 2017 Receivables discounted $ 357,224,000 $ 352,369,000 Weighted average days 340 342 Weighted average discount rate 3.3 % 2.9 % Amount of discount as interest expense $ 11,182,000 $ 9,724,000 |
Financial Risk Management and D
Financial Risk Management and Derivatives | 12 Months Ended |
Mar. 31, 2018 | |
Financial Risk Management and Derivatives [Abstract] | |
Financial Risk Management and Derivatives | 13. 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 currency. 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. 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 $31,304,000 and $26,880,000 at March 31, 2018 and 2017, respectively. These contracts generally expire in a 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 or better 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 income: Gain (Loss) Recognized within General and Administrative Expenses Derivatives Not Designated as Years Ended March 31, Hedging Instruments 2018 2017 2016 Forward foreign currency exchange contracts $ 752,000 $ 843,000 $ 777,000 The fair value of the forward foreign currency exchange contracts of $1,179,000 and $427,000 are included in prepaid and other current assets in the accompanying consolidated balance sheets at March 31, 2018 and 2017, respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 14. Fair Value Measurements The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company uses a three-tier valuation hierarchy based upon observable and unobservable inputs: • Level 1 — Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 — Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3 — Valuation is based upon unobservable inputs that are significant to the fair value measurement. The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. The following sets forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis according to the valuation techniques the Company used to determine their fair values at: March 31, 2018 March 31, 2017 Fair Value Measurements Using Inputs Considered as Fair Value Measurements Using Inputs Considered as Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Assets Short-term investments Mutual funds $ 2,828,000 $ 2,828,000 - - $ 2,140,000 $ 2,140,000 - - Prepaid expenses and other current assets Forward foreign currency exchange contracts 1,179,000 - $ 1,179,000 - 427,000 - $ 427,000 - Liabilities Other current liabilities Deferred compensation 2,828,000 2,828,000 - - 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 and classified as Level 2. During the years ended March 31, 2018 and 2017, gains of $752,000 and $843,000, respectively, were recorded in general and administrative expenses due to the change in the value of the forward foreign currency exchange contracts subsequent to entering into the contracts. Level 3 Fair Value Measurements The following summarizes the activity for Level 3 fair value measurements: Years Ended March 31, 2018 2017 Supplier Warrant Contingent Consideration Supplier Warrant Contingent Consideration Beginning balance $ 11,879,000 $ - $ 15,643,000 $ 330,000 Newly issued - - - - Total (gain) loss included in net income (2,313,000 ) - (3,764,000 ) (16,000 ) Exercises/settlements (1) (9,566,000 ) - - (314,000 ) Net transfers in (out) of Level 3 - - - - Ending balance $ - $ - $ 11,879,000 $ - (1) Represents the fair value of the Supplier Warrant as of the exercise date (see Note 11). During the year ended March 31, 2018, 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 current rates for instruments with similar characteristics. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies Operating Lease Commitments The Company leases various facilities in North America and Asia under operating leases expiring through December 2032, which includes the 15-year lease for a new 410,000 square foot facility in Tijuana, Mexico. The Company also has short-term contracts of one year or less covering its third party warehouses that provide for contingent payments based on the level of sales that are processed through the third party warehouse. The remaining future minimum rental payments under the above operating leases are as follows: Year Ending March 31, 2019 $ 5,873,000 2020 4,437,000 2021 4,501,000 2022 4,360,000 2023 3,066,000 Thereafter 30,824,000 Total minimum lease payments $ 53,061,000 During the years ended March 31, 2018, 2017 and 2016, the Company incurred total operating lease expenses of $4,362,000, $3,495,000 and $3,263,000, respectively. Commitments to Provide Marketing Allowances under Long-Term Customer Contracts The Company has or is renegotiating long-term agreements with many of its major customers. Under these agreements, which in most cases have initial terms of at least four years, the Company is designated as the exclusive or primary supplier for specified categories of the Company’s products. Because of the very competitive nature of the market and the limited number of customers for these products, the Company’s customers have sought and obtained price concessions, significant marketing allowances, and more favorable delivery and payment terms in consideration for the Company’s designation as a customer’s exclusive or primary supplier. These incentives differ from contract to contract and can include (i) the issuance of a specified amount of credits against receivables in accordance with a schedule set forth in the relevant contract, (ii) support for a particular customer’s research or marketing efforts provided on a scheduled basis, (iii) discounts granted in connection with each individual shipment of product, and (iv) other marketing, research, store expansion or product development support. These contracts typically require that the Company meet ongoing performance standards. The Company’s contracts with major customers expire at various dates through April 2021. While these longer-term agreements strengthen the Company’s customer relationships, the increased demand for the Company’s products often requires that the Company increase its inventories and personnel. Customer demands that the Company purchase their Remanufactured Core inventory also require the use of the Company’s working capital. The marketing and other allowances the Company typically grants its customers in connection with its new or expanded customer relationships adversely impact the near-term revenues, profitability, and associated cash flows from these arrangements. Such allowances include sales incentives and concessions and typically consist of: (i) allowances which may only be applied against future purchases and are recorded as a reduction to revenues in accordance with a schedule set forth in the long-term contract, (ii) allowances related to a single exchange of product that are recorded as a reduction of revenues at the time the related revenues are recorded or when such incentives are offered, and (iii) allowances that are made in connection with the purchase of inventory from a customer. The following summarizes the breakout of allowances discussed above, recorded as a reduction to revenues: Years Ended March 31, 2018 2017 2016 Allowances incurred under long-term customer contracts $ 24,829,000 $ 23,684,000 $ 29,845,000 Allowances related to a single exchange of product 79,813,000 67,262,000 47,451,000 Allowances related to core inventory purchase obligations 2,545,000 5,470,000 2,268,000 Total customer allowances recorded as a reduction of revenues $ 107,187,000 $ 96,416,000 $ 79,564,000 The following presents the Company’s commitments to incur allowances, excluding allowances related to a single exchange of product, which will be recognized as a charge against revenue, and customer Remanufactured Core purchase obligations, which will be recognized in accordance with the terms of the relevant long-term customer contracts: Year Ending March 31, 2019 $ 30,154,000 2020 21,927,000 2021 16,982,000 2022 113,000 Total marketing allowances $ 69,176,000 |
Significant Customer and Other
Significant Customer and Other Information | 12 Months Ended |
Mar. 31, 2018 | |
Significant Customer and Other Information [Abstract] | |
Significant Customer and Other Information | 16. Significant Customer and Other Information Significant Customer Concentrations The Company’s largest customers accounted for the following total percentage of net sales: Years Ended March 31, 2018 2017 2016 Customer A 41 % 44 % 48 % Customer B 24 % 20 % 18 % Customer C 19 % 19 % 21 % Customer D 4 % 4 % 3 % The Company’s largest customers accounted for the following total percentage of accounts receivable — trade at March 31: 2018 2017 Customer A 36 % 33 % Customer B 16 % 18 % Customer C 22 % 12 % Customer D 5 % 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: Years Ended March 31, 2018 2017 2016 Rotating electrical products 78 % 78 % 78 % Wheel hub products 17 % 19 % 20 % Brake master cylinders products 2 % 3 % 2 % Other products 3 % - % - % 100 % 100 % 100 % Significant Supplier Concentrations No suppliers accounted for more than 10% of the Company’s inventory purchases for the years ended March 31, 2018, 2017 and 2016. |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 17. Income Taxes On December 22, 2017, comprehensive tax reform legislation known as the Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act amends the Internal Revenue Code to reduce U.S. tax rates and modify policies, credits and deductions for individuals and businesses. The effects of the Tax Reform Act on the Company are as follows: Remeasurement of Deferred Taxes The Tax Reform Act permanently reduces the U.S. federal corporate income tax rate from 35% to 21%, effective for tax years beginning after 2017. GAAP requires an adjustment to deferred taxes as a result of a change in the corporate tax rate in the period that the change is enacted, with the change recorded to the current year tax provision. Accordingly, the Company has remeasured its deferred tax assets and liabilities at the new tax rate and recorded a one-time noncash tax charge of $4,863,000 to deferred income taxes for the year ended March 31, 2018. This charge is reflected in the Company’s increased effective tax rate for the year. Mandatory Transition Tax In connection with the move by the U.S. to a partial territorial tax system, the Tax Reform Act provides for the exclusion of foreign-sourced dividends received by a U.S. corporation from its foreign-owned corporations beginning in 2018. In addition, the Tax Reform Act imposes a toll charge in 2017 on the deemed repatriation of a U.S. shareholder’s pro-rata share of certain foreign subsidiaries’ post-1986 accumulated earnings. The toll charge assesses an effective tax rate of 15.5% on cash and other liquid assets of U.S.-owned foreign corporations, while subjecting all other property of such corporations to an effective tax rate of 8.0%, and allows for available foreign tax credits to reduce the resulting toll charge. Taxpayers may elect to pay this tax liability over eight years on an interest-free basis. The Company has accrued an estimated toll charge liability of $530,000, reflected in current taxes payable as of March 31, 2018. Executive Compensation The Tax Reform Act maintains the $1,000,000 limitation on deductible compensation to cover employees. However, it eliminates the current exception for performance-based compensation and expands the definition of covered employees to include the chief financial officer. The expansion of executive compensation limitations are effective in 2018. The modifications do not apply to remuneration paid pursuant to a written binding contract in effect on November 2, 2017 if it was not materially modified on or after that date. As a result of the Tax Reform Act, the SEC provided guidance (Staff Accounting Bulletin 118 (“SAB 118”)) that allows public companies to record provisional amounts for those impacts, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment. As of March 31, 2018, the Company has not completed the accounting for the tax effects of the Tax Reform Act. Therefore, the Company has recorded provisional amounts for the effects of the Tax Reform Act, including but not limited to, the following primary impacts of the Tax Reform Act: remeasurement of deferred tax assets and liabilities and the estimated calculation of the one-time mandatory transition tax on undistributed earnings of foreign affiliates. The income tax expense is as follows: Years Ended March 31, 2018 2017 2016 Current tax expense Federal $ 12,153,000 $ 9,451,000 $ 12,400,000 State 1,406,000 318,000 1,995,000 Foreign 1,215,000 1,455,000 803,000 Total current tax expense 14,774,000 11,224,000 15,198,000 Deferred tax expense (benefit) Federal 2,779,000 4,291,000 (2,929,000 ) State 333,000 2,174,000 (757,000 ) Foreign (23,000 ) (384,000 ) (33,000 ) Total deferred tax expense (benefit) 3,089,000 6,081,000 (3,719,000 ) Total income tax expense $ 17,863,000 $ 17,305,000 $ 11,479,000 Deferred income taxes consist of the following at March 31: 2018 2017 Assets Accounts receivable valuation $ 3,915,000 $ 4,697,000 Allowance for customer incentives 2,038,000 2,894,000 Inventory obsolescence reserve 1,666,000 1,608,000 Stock options 1,728,000 1,971,000 Intangibles, net 59,000 339,000 Estimate for returns 1,115,000 3,191,000 Accrued compensation 1,152,000 1,785,000 Net operating losses 1,079,000 834,000 Tax credits 1,363,000 - Other 2,091,000 2,065,000 Total deferred tax assets $ 16,206,000 $ 19,384,000 Liabilities Property and equipment, net (1,025,000 ) (1,605,000 ) Other (3,072,000 ) (4,413,000 ) Total deferred tax liabilities $ (4,097,000 ) $ (6,018,000 ) Less valuation allowance $ (1,779,000 ) $ - Net deferred tax assets $ 10,330,000 $ 13,366,000 Net long-term deferred income tax liability (226,000 ) (180,000 ) Net long-term deferred income tax asset 10,556,000 13,546,000 Total $ 10,330,000 $ 13,366,000 At March 31, 2018, the Company had state net operating loss carryforwards of $932,000. The net operating loss carryforwards expire between fiscal years 2022 and 2036. Realization of deferred tax assets is dependent upon the Company’s ability to generate sufficient future taxable income. Significant judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against the Company’s net deferred tax assets. The Company makes these estimates and judgments about its future taxable income that are based on assumptions that are consistent with the Company’s future plans. A valuation allowance is established when the Company believes it is not more likely than not all or some of a deferred tax assets will be realized. In evaluating the Company’s ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence. Deferred tax assets arising primarily as a result of net operating loss carry-forwards and research and development credits in connection with the Company’s July 2017 acquisition have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Should the actual amount differ from the Company’s estimates, the amount of the valuation allowance could be impacted. For the years ended March 31, 2018, 2017, and 2016, the primary components of the Company’s income tax expense were (i) the impact of the changes as a result of the Tax Reform Act, (ii) foreign income taxed at rates that are different from the federal statutory rate, (iii) non-deductible expenses in connection with the fair value adjustments on the warrants, (iv) impact of the non-deductible executive compensation under Internal Revenue Code Section 162(m), (v) the impact of uncertain tax positions, (vi) the change in the blended state rate, and (vii) the excess tax benefit relating to share-based compensation. The difference between the income tax expense at the federal statutory rate and the Company’s effective tax rate is as follows: Years Ended March 31, 2018 2017 2016 Statutory federal income tax rate 31.5 % 35.0 % 35.0 % State income tax rate, net of federal benefit 3.3 % 2.2 % 4.0 % Excess tax benefit from stock compensation (0.7 )% (1.4 )% - % Foreign income taxed at different rates (2.6 )% (0.7 )% (0.8 )% Warrants (2.1 )% (2.4 )% 8.2 % Non-deductible executive compensation 1.0 % 0.8 % 2.2 % Change in valuation allowance 4.9 % - % - % Effects of mandatory redeemed repatriation 1.6 % - % - % Effects of U.S. tax rate changes 14.2 % - % - % Uncertain Tax Positions 0.6 % (0.2 )% 0.4 % Other income tax 0.6 % (1.8 )% 3.1 % 52.3 % 31.5 % 52.1 % The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions with varying statutes of limitations. At March 31, 2018, 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. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Years Ended March 31, 2018 2017 2016 Balance at beginning of period $ 1,092,000 $ 1,181,000 $ 1,117,000 Additions based on tax positions related to the current year 234,000 141,000 57,000 Additions for tax positions of prior year - 106,000 217,000 Reductions for tax positions of prior year (107,000 ) - (210,000 ) Settlements - (336,000 ) - Balance at end of period $ 1,219,000 $ 1,092,000 $ 1,181,000 At March 31, 2018, 2017 and 2016, there are $1,054,000, $840,000 and $678,000 of unrecognized tax benefits that if recognized would affect the annual effective tax rate. The Company recognizes interest and penalties accrued related to unrecognized tax benefits as part of income tax expense. During the years ended March 31, 2018, 2017, and 2016, the Company recognized approximately $5,000, $51,000, and $34,000 in interest and penalties. The Company had approximately $146,000 and $141,000 for the payment of interest and penalties accrued at March 31, 2018 and 2017, respectively. |
Defined Contribution Plans
Defined Contribution Plans | 12 Months Ended |
Mar. 31, 2018 | |
Defined Contribution Plans [Abstract] | |
Defined Contribution Plans | 18. Defined Contribution Plans The Company has a 401(k) plan covering all employees who are 21 years of age with at least six months of service. The plan permits eligible employees to make contributions up to certain limitations, with the Company matching 50% of each participating employee’s contribution up to the first 6% of employee compensation. Employees are immediately vested in their voluntary employee contributions and vest in the Company’s matching contributions ratably over five years. The Company’s matching contribution to the 401(k) plan was $389,000, $353,000, and $347,000 for the years ended March 31, 2018, 2017, and 2016, respectively. |
Share-based Payments
Share-based Payments | 12 Months Ended |
Mar. 31, 2018 | |
Share-based Payments [Abstract] | |
Share-based Payments | 19. Share-based Payments At March 31, 2018, there were 342,000 shares of the Company’s common stock reserved for grants to the Company’s non-employee directors under the 2014 Non-Employee Director Incentive Award Plan (the “2014 Plan”). Under the 2014 Plan, (i) 35,659 and 37,383 of restricted stock units were issued and (ii) 236,976 and 263,078 shares of common stock were available for grant under this plan at March 31, 2018 and 2017, respectively. At March 31, 2018, there were 3,950,000 shares of common stock reserved for grant to all employees of the Company under the 2010 Incentive Award Plan (the “2010 Plan”). Under the 2010 Plan, (i) 98,169 and 88,894 shares of restricted stock units were outstanding, (ii) options to purchase 1,046,298 and 898,009 shares of common stock were outstanding, and (iii) 1,573,810 and 688,765 shares of common stock were available for grant at March 31, 2018 and 2017, respectively. In addition, at March 31, 2018 and 2017, options to purchase 97,000 and 128,000 shares of common stock, respectively, were outstanding under the 2004 Non-Employee Director Stock Option Plan. There were no options outstanding to purchase common stock under the 2003 Long-Term Incentive Plan at March 31, 2018 and options to purchase 10,350 shares of common stock were outstanding under this plan at March 31, 2017. No options remain available for grant under these plans. The shares of common stock issued upon exercise of a previously granted stock option are considered new issuances from shares reserved for issuance upon adoption of the various plans. The Company requires that the option holders provide a written notice of exercise to the stock plan administrator and payment for the shares prior to issuance of the shares. Stock Options The following is a summary of stock option activity during the year: Number of Shares Weighted Average Exercise Price Outstanding at March 31, 2016 1,036,359 $ 14.92 Granted 170,890 $ 27.27 Exercised (55,351 ) $ 8.65 Forfeited (8,600 ) $ 28.92 Outstanding at March 31, 2017 1,143,298 $ 16.97 At March 31, 2018, options to purchase 325,274 shares of common stock were unvested at the weighted average exercise price of $28.23. Based on the market value of the Company’s common stock at March 31, 2018, 2017, and 2016, the pre-tax intrinsic value of options exercised was $913,000, $2,477,000, and $14,002,000, respectively. The total fair value of stock options vested during the years ended March 31, 2018, 2017, and 2016 was $1,572,000, $1,290,000, and $905,000, respectively. The following summarizes information about the options outstanding at March 31, 2018: Options Outstanding Options Exercisable Range of Exercise price Shares Weighted Average Exercise Price Weighted Average Remaining Life In Years Aggregate Intrinsic Value Shares Weighted Average Exercise Price Aggregate Intrinsic Value $4.17 to $6.25 49,000 $ 4.87 1.35 49,000 $ 4.87 $6.26 to $7.43 354,534 6.48 4.70 354,534 6.48 $7.44 to $19.94 211,132 9.86 5.23 211,132 9.86 $19.95 to $34.17 528,632 27.96 8.12 203,358 27.54 1,143,298 $ 16.97 6.24 $ 8,555,000 818,024 $ 12.49 $ 8,555,000 The aggregate intrinsic values in the above table represent the pre-tax value of all in-the-money options if all such options had been exercised on March 31, 2018 based on the Company’s closing stock price of $21.43 as of that date. At March 31, 2018, there was $2,795,000 of total unrecognized compensation expense from stock-based compensation granted under the plans, which is related to non-vested shares. The compensation expense is expected to be recognized over a weighted average vesting period of 1.7 years. Restricted Stock Units (“RSUs”) During the years ended March 31, 2018 and 2017, the Company granted 77,854 and 62,637 shares of RSUs, respectively, with an estimated grant date fair value of $2,157,000 and $1,774,000, respectively, which was based on the closing market price on the date of grant. The fair value related to these awards is recognized as compensation expense over the vesting period. These awards generally vest in three equal installments beginning each anniversary from the grant date, subject to continued employment. Upon vesting, these awards may be net share settled to cover the required withholding tax with the remaining amount converted into an equivalent number of shares of common stock. Total shares withheld during the years ended March 31, 2018 and 2017 were 21,361 and 36,586, respectively, and was based on the value of these awards as determined by the Company’s closing stock price on the vesting date. The following is a summary of changes in the status of non-vested RSUs during the year: Number of Shares Weighted Average Grant Date Fair Value Non-vested at March 31, 2017 126,277 $ 28.26 Granted 77,854 $ 27.70 Vested (68,869 ) $ 27.41 Forfeited (1,434 ) $ 28.37 Non-vested at March 31, 2018 133,828 $ 28.37 As of March 31, 2018, there was $2,648,000 of unrecognized compensation expense related to these awards, which will be recognized over the remaining vesting period of approximately 1.9 years. |
Litigation
Litigation | 12 Months Ended |
Mar. 31, 2018 | |
Litigation [Abstract] | |
Litigation | 20. Litigation The Company is subject to various lawsuits and claims. In addition, government agencies and self-regulatory organizations have the ability to conduct periodic examinations of and administrative proceedings regarding the Company’s business. Management does not believe that the outcome of these other matters will have a material adverse effect on its financial position or future results of operations. |
Share Repurchase Program
Share Repurchase Program | 12 Months Ended |
Mar. 31, 2018 | |
Share Repurchase Program [Abstract] | |
Share Repurchase Program | 21. Share Repurchase Program As of March 31, 2018, the Company’s board of directors had approved a stock repurchase program of up to $20,000,000 of its common stock. As of March 31, 2018, $11,630,000 of the $20,000,000 had been utilized and $8,370,000 remained available to repurchase shares under the authorized share repurchase program, subject to the limit in the Company’s credit facility. The Company retired the 511,746 shares repurchased under this program through March 31, 2018. 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. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 22. Accumulated Other Comprehensive Income (Loss) The following summarizes the changes in accumulated other comprehensive income (loss) for the years ended March 31: 2018 2017 Unrealized Gain on Short-Term Investments Foreign Currency Translation Total Unrealized Gain on Short-Term Investments Foreign Currency Translation Total Beginning balance $ 528,000 $ (7,969,000 ) $ (7,441,000 ) $ 332,000 $ (5,184,000 ) $ (4,852,000 ) Other comprehensive income (loss), net of tax 218,000 1,795,000 2,013,000 196,000 (2,785,000 ) (2,589,000 ) Amounts reclassified from other comprehensive income (loss), net of tax - - - - - - Ending balance $ 746,000 $ (6,174,000 ) $ (5,428,000 ) $ 528,000 $ (7,969,000 ) $ (7,441,000 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 23. Subsequent Events Credit Facility On June 5, 2018 the Company entered into an Amended and Restated Credit Facility (the “New Credit Facility”), with the lenders party thereto, and PNC Bank, National Association, as administrative agent, consisting of (i) a $200,000,000 revolving loan facility, subject to borrowing base restrictions, a $20,000,000 sublimit for borrowings by Canadian borrowers, and a $15,000,000 sublimit for letters of credit (the “New Revolving Facility) and (ii) a $30,000,000 term loan facility (the “New Term Loans”). The loans under the New Credit Facility mature on June 5, 2023. In connection with the New Credit Facility, the lenders were granted a security interest in substantially all of the assets of the Company. |
Unaudited Quarterly Financial D
Unaudited Quarterly Financial Data | 12 Months Ended |
Mar. 31, 2018 | |
Unaudited Quarterly Financial Data [Abstract] | |
Unaudited Quarterly Financial Data | 24. Unaudited Quarterly Financial Data The following summarizes selected quarterly financial data for the year ended March 31, 2018 . First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 95,063,000 $ 111,774,000 $ 100,127,000 $ 121,108,000 Cost of goods sold 69,224,000 84,612,000 77,583,000 90,780,000 Gross profit 25,839,000 27,162,000 22,544,000 30,328,000 Operating expenses: General and administrative 6,187,000 8,615,000 11,915,000 8,810,000 Sales and marketing 3,394,000 3,457,000 4,048,000 4,131,000 Research and development 1,002,000 1,240,000 1,678,000 1,772,000 Total operating expenses 10,583,000 13,312,000 17,641,000 14,713,000 Operating income 15,256,000 13,850,000 4,903,000 15,615,000 Other expense: Interest expense, net 3,314,000 3,522,000 3,953,000 4,656,000 Income before income tax expense 11,942,000 10,328,000 950,000 10,959,000 Income tax expense 4,316,000 4,027,000 7,756,000 1,764,000 Net income (loss) $ 7,626,000 $ 6,301,000 $ (6,806,000 ) $ 9,195,000 Basic net income (loss) per share $ 0.41 $ 0.34 $ (0.36 ) $ 0.48 Diluted net income (loss) per share $ 0.39 $ 0.33 $ (0.36 ) $ 0.47 The following summarizes selected quarterly financial data for the year ended March 31, 2017: First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 85,412,000 $ 108,836,000 $ 112,595,000 $ 114,410,000 Cost of goods sold 65,021,000 78,178,000 80,225,000 82,783,000 Gross profit 20,391,000 30,658,000 32,370,000 31,627,000 Operating expenses: General and administrative 3,625,000 9,869,000 7,952,000 9,678,000 Sales and marketing 2,634,000 2,707,000 3,234,000 3,551,000 Research and development 869,000 905,000 1,039,000 1,011,000 Total operating expenses 7,128,000 13,481,000 12,225,000 14,240,000 Operating income 13,263,000 17,177,000 20,145,000 17,387,000 Other expense: Interest expense, net 2,819,000 3,189,000 3,357,000 3,729,000 Income before income tax expense 10,444,000 13,988,000 16,788,000 13,658,000 Income tax expense 2,936,000 4,845,000 5,678,000 3,846,000 Net income $ 7,508,000 $ 9,143,000 $ 11,110,000 $ 9,812,000 Basic net income per share $ 0.40 $ 0.49 $ 0.59 $ 0.53 Diluted net income per share $ 0.39 $ 0.47 $ 0.57 $ 0.50 Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not agree with per share amounts for the year shown elsewhere in the Annual Report on Form 10-K. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Mar. 31, 2018 | |
Schedule II Valuation and Qualifying Accounts [Abstract] | |
Schedule II Valuation and Qualifying Accounts | Schedule II Valuation and Qualifying Accounts Accounts Receivable Allowance for doubtful accounts Years Ended March 31, Description Balance at beginning of period Charge to (recovery of) bad debts expense Acquisition Amounts written off Balance at end of period 2018 Allowance for doubtful accounts $ 4,140,000 $ 21,000 $ - $ 19,000 $ 4,142,000 2017 Allowance for doubtful accounts $ 4,284,000 $ 3,000 $ - $ 147,000 $ 4,140,000 2016 Allowance for doubtful accounts $ 629,000 $ 4,404,000 $ - $ 749,000 $ 4,284,000 Accounts Receivable Allowance for customer-payment discrepancies Years Ended March 31, Description Balance at beginning of period Charge to (recovery of) discrepancies expense Acquisition Amounts Processed Balance at end of period 2018 Allowance for customer-payment discrepancies $ 751,000 $ 998,000 $ - $ 639,000 $ 1,110,000 2017 Allowance for customer-payment discrepancies $ 703,000 $ 718,000 $ - $ 670,000 $ 751,000 2016 Allowance for customer-payment discrepancies $ 852,000 $ (299,000 ) $ - $ (150,000 ) $ 703,000 Inventory Allowance for excess and obsolete inventory Years Ended March 31, Description Balance at beginning of period Provision for excess and obsolete inventory Acquisition Amounts written off Balance at end of period 2018 Allowance for excess and obsolete inventory $ 4,125,000 $ 8,491,000 $ 77,000 (1) $ 6,011,000 $ 6,682,000 2017 Allowance for excess and obsolete inventory $ 3,626,000 $ 3,864,000 $ - $ 3,365,000 $ 4,125,000 2016 Allowance for excess and obsolete inventory $ 2,675,000 $ 4,518,000 $ - $ 3,567,000 $ 3,626,000 (1) Allowance for excess and obsolete inventory established in the opening balance sheet in connection with the Company’s July 2017 acquisition. |
Summary of Significant Accoun34
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
New Accounting Pronouncements Not Yet Adopted | New Accounting Pronouncements Not Yet Adopted Revenue Recognition In May 2014, the Financial Accounting Standard Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, codified in Accounting Standards Codification (“ASC”) 606, “Revenue Recognition - Revenue from Contracts with Customers” (“ASC 606”), which amends the guidance in the former ASC 605, “Revenue Recognition”. ASC 606 as initially issued was effective for annual periods beginning after December 15, 2016, and interim periods within that reporting period for a public entity. 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 adjustment as of the date of initial adoption. 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 entity. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company will adopt the new standard on April 1, 2018 and has elected to utilize the full retrospective transition method. 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 that 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 of the new standard, the Company has made changes to its business processes, systems, and controls. A project team was formed and evaluated and guided the implementation process. The Company performed a preliminary assessment, which included the identification of the key contractual terms in its primary revenue streams and the comparison of historical accounting policies and practices to the requirements of the new standard by revenue stream. The preliminary assessment resulted in the identification of potential accounting differences that will arise from the application of the new standard. The implementation team completed its contract review phase of the project during the third quarter, which included identifying the population of contracts and completing an analysis of the potential accounting impacts of the new standard on individual contracts. During the fourth quarter, the implementation team identified the changes to business processes, systems, and controls to support recognition, presentation, and disclosure under the new standard and will implement these changes during the first quarter of fiscal 2019 as described in the subsequent paragraphs. The Company’s primary revenue stream is derived from the sale of remanufactured products to its customers pursuant to long-term customer contracts. The Company will continue to recognize revenue at a point in time as it satisfies its performance obligation of transferring control of the product to the customer. The Company recognizes revenues net of anticipated returns, marketing allowances, volume discounts, and other forms of variable consideration more fully described below. The Company also reviewed customer options to acquire additional goods or services and has preliminarily determined no material rights exist within its contracts. The Company does not currently anticipate that the adoption of ASU 2014-09 will have a material impact on previously reported revenue amounts. See discussion regarding Remanufactured Cores below. The Company currently anticipates that the adoption of ASU 2014-09 will primarily impact reclassifications to certain balance sheet accounts to conform to the presentation and disclosure requirements of ASC 606. For example, the Company currently accounts for Remanufactured Cores anticipated to be returned as long-term core inventory and the refund liability as a contra-account receivable account as illustrated in Note 6. Under ASC 606, the Company currently anticipates it will reclassify this asset to a contractual asset and recognize a contractual liability for amounts expected to be refunded to customers. The Company also analyzed specific contractual provisions related to sales contracts that include Remanufactured Cores. The Company recognizes revenue for sales of cores not expected to be replaced by a similar Used Core sent back under the core exchange program only upon meeting certain criteria as noted under the caption “Revenue Recognition” below. The adoption of ASU 2014-09 may result in an acceleration of revenue recognition, as it requires the Company to estimate the amount of cores not expected to be returned upon the initial recognition of revenue for contracts that include Remanufactured Cores. As the Company has elected the full retrospective method of adoption, the impact to each reporting period will be measured as the net impact of (i) the acceleration of revenue into a prior period versus what was previously recorded in that period and (ii) the acceleration of revenue into that period previously recognized in a later period (the change in the estimated volume of returns in the comparable recast periods). In order to properly determine the transaction price related to its sales contracts, the Company has also analyzed its various forms of consideration paid to its vendors including up-front payments for future contracts. Based on the analysis completed through the year ended March 31, 2018, the Company currently does not anticipate a change to its legacy accounting practices as a result of the adoption of ASU 2014-09 to account for up-front payments to its vendors. Under current accounting practices, if the Company expects to generate future revenues associated with an up-front payment, then an asset is recognized and amortized over the appropriate period of time as a reduction of revenue. If the Company does not expect to generate additional revenue then the up-front payment is recognized in the consolidated statements of income when payment occurs as a reduction of revenue. ASU 2014-09 also codified the guidance on other assets and deferred costs relating to contracts with customers with the addition of ASC 340-40. This guidance relates to the accounting for costs of an entity to obtain and fulfill a contract to provide goods or services to the customer. Under the new guidance, an entity shall recognize as an asset the incremental costs of obtaining a contract with a customer if the entity expects to recover those costs. In the Company’s review of the various costs to obtain contracts with its customers, it has preliminarily determined that currently no significant costs are incurred that meet the capitalization criteria. The Company’s primary cost to fulfill contracts, other than inventory related costs, relates to shipping and handling activities, which continue to be expensed as incurred consistent with historical accounting practices. The new guidance provides several practical expedients, 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. As noted above, the Company has preliminarily concluded that it does not have any such costs that qualify for capitalization but will apply the practical expedient to the extent that such costs incurred in prospective periods qualify. 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 that 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. Financial Instruments In January 2016, the FASB issued guidance that amends the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company expects to apply the amendments in the new guidance by means of a cumulative-effect adjustment to the opening balance of retained earnings at the beginning of the first quarter of fiscal 2019. The adoption of the new guidance is not expected to have a material impact on the Company’s 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. A reporting entity should apply the amendment prospectively 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 adoption of this guidance in the first quarter of fiscal 2019 is not expected to have any material impact on the Company’s 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. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Motorcar Parts of America, Inc. and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated. |
Reclassification of Prior Period Balances | Reclassification of Prior Period Balances The income tax receivable has been reclassified from prepaid and other current assets in the consolidated balance sheet at March 31, 2017 to conform to the consolidated balance sheet presentation at March 31, 2018. In addition, the income tax receivable has been reclassified from prepaid and other current assets in the consolidated statements of cash flows for the years ended March 31, 2017 and 2016 to conform to the consolidated statement of cash flow presentation for the year ended March 31, 2018. |
Segment Reporting | Segment Reporting Pursuant to the guidance provided under the FASB ASC for segment reporting, the Company has identified its chief executive officer as 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. has determined through this review process that it has one reportable segment for purposes of recording and reporting its financial results. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash primarily consists of cash on hand and bank deposits. Cash equivalents consist of money market funds. |
Accounts Receivable | Accounts Receivable The allowance for doubtful accounts is developed based upon several factors including customer credit quality, historical write-off experience and any known specific issues or disputes which exist as of the balance sheet date. Accounts receivable are written off only when all collection attempts have failed. The Company does not require collateral for accounts receivable. The Company has receivable discount programs that have been established with certain major customers and their respective banks. Under these programs, the Company has the option to sell those customers’ receivables to those banks at a discount to be agreed upon at the time the receivables are sold. Once the customer chooses which outstanding invoices are going to be made available for discounting, the Company can accept or decline the bundle of invoices provided. The receivable discount programs are non-recourse, and funds cannot be reclaimed by the customer or its bank after the related invoices have been discounted. |
Inventory | Inventory Non-core Inventory Non-core inventory is comprised of (i) non-core raw materials, (ii) the non-core value of work in process, (iii) the non-core value of remanufactured finished goods, and (iv) purchased finished goods. Used Cores, the Used Core value of work in process and the Remanufactured Core portion of finished goods are classified as long-term core inventory as described below under the caption “Long-term Core Inventory.” Used Cores are a source of raw materials used in the manufacturing of the Company’s products. Non-core inventory is stated at the lower of cost or net realizable value. The cost of non-core remanufactured inventory approximates average historical purchase prices paid for raw materials, and is based upon the direct costs of material and an allocation of labor and variable and fixed overhead costs. The cost of purchased finished goods inventory approximates average historical purchase prices paid, and an allocation of fixed overhead costs. The cost of non-core inventory is evaluated at least quarterly during the fiscal year and adjusted as necessary to reflect current lower of cost or net realizable value levels. These adjustments are determined for individual items of inventory within each of the three classifications of non-core inventory as follows: • Non-core raw materials are recorded at average cost, which is based on the actual purchase price of raw materials on hand. The average cost is updated quarterly. This average cost is used in the inventory costing process and is the basis for allocation of materials to finished goods during the production process. • Non-core work in process is in various stages of production and is valued at the average cost of materials issued to open work orders. Historically, non-core work in process inventory has not been material compared to the total non-core inventory balance. • The cost of remanufactured finished goods includes the average cost of non-core raw materials and allocations of labor and variable and fixed overhead costs. The allocations of labor and variable and fixed overhead costs are determined based on the average actual use of the production facilities over the prior twelve months which approximates normal capacity. This method prevents the distortion in allocated labor and overhead costs that would occur during short periods of abnormally low or high production. In addition, the Company excludes certain unallocated overhead such as severance costs, duplicative facility overhead costs, start-up costs, training, and spoilage from the calculation and expenses these unallocated overhead as period costs. The Company records an allowance for potentially excess and obsolete inventory based upon recent sales history, the quantity of inventory on-hand, and a forecast of potential use of the inventory. The Company periodically reviews inventory to identify excess quantities and part numbers that are experiencing a reduction in demand. Any part numbers with quantities identified during this process are reserved for at rates based upon management’s judgment, historical rates, and consideration of possible scrap and liquidation values which may be as high as 100% of cost if no liquidation market exists for the part. The Company had recorded reserves of $6,682,000 and $4,125,000 for excess and obsolete inventory at March 31, 2018 and 2017, respectively. The quantity thresholds and reserve rates are subjective and are based on management’s judgment and knowledge of current and projected industry demand. The reserve estimates may, therefore, be revised if there are changes in the overall market for the Company’s products or market changes that in management’s judgment, impact its ability to sell or liquidate potentially excess or obsolete inventory. The Company records vendor discounts as a reduction of inventories that are recognized as a reduction to cost of sales as the inventories are sold. Inventory Unreturned Inventory unreturned represents the Company’s estimate, based on historical data and prospective information provided directly by the customer, of finished goods shipped to customers that the Company expects to be returned, under its general right of return policy, after the balance sheet date. Because all cores are classified separately as long-term assets, the inventory unreturned balance includes only the added unit value of a finished good. The return rate is calculated based on expected returns within the normal operating cycle of one year. As such, the related amounts are classified in current assets. Inventory unreturned is valued in the same manner as the Company’s finished goods inventory. Long-term Core Inventory Long-term core inventory consists of: • Used Cores purchased from core brokers and held in inventory at the Company’s facilities, • Used Cores returned by the Company’s customers and held in inventory at the Company’s facilities, • Used Cores returned by end-users to customers but not yet returned to the Company are classified as Remanufactured Cores until they are physically received by the Company, • Remanufactured Cores held in finished goods inventory at the Company’s facilities; and • Remanufactured Cores held at customer locations as a part of the finished goods sold to the customer. For these Remanufactured Cores, the Company expects the finished good containing the Remanufactured Core to be returned under the Company’s general right of return policy or a similar Used Core to be returned to the Company by the customer, in each case, for credit. Long-term core inventory is recorded at average historical purchase prices determined based on actual purchases of inventory on hand. The cost and net realizable value of Used Cores for which sufficient recent purchases have occurred are deemed the same as the purchase price for purchases that are made in arm’s length transactions. Long-term core inventory recorded at average historical purchase prices is primarily made up of Used Cores for newer products related to more recent automobile models or products for which there is a less liquid market. The Company purchases these Used Cores from core brokers to supplement the yield from returned cores and the under return by consumers. Used Cores obtained in core broker transactions are valued based on average purchase price. The average purchase price of Used Cores for more recent automobile models is retained as the cost for these Used Cores in subsequent periods even as the source of these Used Cores shifts to the core exchange program. Long-term core inventory is recorded at the lower of cost or net realizable value. In the absence of sufficient recent purchases the Company uses the net selling price its customers have agreed to pay for Used Cores that are not returned to the Company under the Company’s core exchange program to assess whether Used Core cost exceeds Used Core net realizable value The Company classifies all of its core inventories as long-term assets. The determination of the long-term classification is based on its view that the value of the cores is not consumed or realized in cash during the Company’s normal operating cycle, which is one year for most of the cores recorded in inventory. According to guidance provided under the FASB ASC, current assets are defined as “assets or resources commonly identified as those which are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business.” The Company does not believe that the economic value of core inventories, which the Company classifies as long-term, is consumed because the credits issued upon the return of Used Cores offset the amounts invoiced when the Remanufactured Cores included in finished goods were sold. The Company does not expect the economic value of core inventories to be consumed, and thus the Company does not expect to realize cash, until its relationship with a customer ends, a possibility that the Company considers remote based on existing long-term customer agreements and historical experience. However, historically for certain finished goods sold, the Company’s customer will not send the Company a Used Core to obtain the credit the Company offers under its core exchange program. Therefore, based on the Company’s historical estimate, the Company derecognizes the core value for these finished goods as the Company believes the economic value has been consumed and the Company has realized cash. For these reasons, the Company concluded that it is more appropriate to classify core inventory as long-term assets. Long-term Core Inventory Deposit The long-term core inventory deposit represents the cost of Remanufactured Cores the Company has purchased from customers, which are held by the customers and remain on the customers’ premises. The costs of these Remanufactured Cores were established at the time of the transaction based on the then current cost, determined as noted under the caption “Long-term Core Inventory”. The selling value of these Remanufactured Cores was established based on agreed upon amounts with these customers. The Company expects to realize the selling value and the related cost of these Remanufactured Cores should its relationship with a customer end, a possibility that the Company considers remote based on existing long-term customer agreements and historical experience. |
Customer Finished Goods Returns Accrual | Customer Finished Goods Returns Accrual The customer finished goods returns accrual represents the Company’s estimate of its exposure to customer returns, including warranty returns, under its general right of return policy to allow customers to return items that their end user customers have returned to them and from time to time, stock adjustment returns when the customers’ inventory of certain product lines exceeds the anticipated sales to end-user customers. The customer finished goods returns accrual represents the non-core sales value of the estimated returns and is classified as a current liability due to the expectation that these returns will occur within the normal operating cycle of one year. |
Accrued Core Payment | Accrued Core Payment The accrued core payment represents the full Remanufactured Core sales price of Remanufactured Cores the Company has purchased from its customers, generally in connection with new business, which are held by these customers and remain on their premises. At the same time, the Company records the long-term core inventory for the Remanufactured Cores purchased at its cost, determined as noted under the caption “Long-term Core Inventory”. The difference between the full Remanufactured Core sales price of Remanufactured Cores and its related cost is treated as sales allowance reducing revenue when the purchases are made. The Company expects to realize the selling value and the related cost of these Remanufactured Cores should its relationship with a customer end, a possibility that the Company considers remote based on existing long-term customer agreements and historical experience. The repayments for these Remanufactured Core inventory purchases are made through the issuance of credits against that customer’s receivables either on a one-time basis or over an agreed-upon period. The accrued core payment is recorded as a current and noncurrent liability in the consolidated balance sheets based on whether repayments will occur within the normal operating cycle of one year. |
Income Taxes | Income Taxes The Company accounts for income taxes using the liability method, which measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The resulting asset or liability is adjusted to reflect changes in the tax laws as they occur. A valuation allowance is provided to reduce deferred tax assets when it is more likely than not that a portion of the deferred tax asset will not be realized. The primary components of the Company’s income tax provision are (i) the current liability or refund due for federal, state and foreign income taxes and (ii) the change in the amount of the net deferred income tax asset, including the effect of any change in the valuation allowance. In December 2017, new tax legislation was enacted in the United States (Tax Reform Act) which resulted in significant changes to income tax expense. As a result of the Tax Reform Act, the Company re-measured certain deferred tax assets and liabilities based on the newly enacted federal rate of 21%. Accordingly, the federal net deferred tax assets were written down to account for the change. These tax changes represent provisional amounts based on the Company’s current interpretation of the Tax Reform Act and may change as it receives additional clarification and implementation guidance. The Company will continue to analyze the effects of the Tax Reform Act on its financial statements and operations. Any additional impacts from the enactment of the Tax Reform Act will be recorded as they are identified during the measurement period as provided for in accordance with Staff Accounting Bulletin No. 118. Realization of deferred tax assets is dependent upon the Company’s ability to generate sufficient future taxable income. Significant judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against the Company’s net deferred tax assets. The Company makes these estimates and judgments about its future taxable income that are based on assumptions that are consistent with the Company’s future plans. A valuation allowance is established when the Company believes it is not more likely than not all or some of a deferred tax assets will be realized. In evaluating the Company’s ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence. Deferred tax assets arising primarily as a result of net operating loss carry-forwards and research and development credits in connection with the Company’s July 2017 acquisition have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Should the actual amount differ from the Company’s estimates, the amount of the valuation allowance could be impacted. |
Plant and Equipment | Plant and Equipment Plant and equipment are stated at cost, less accumulated depreciation. The cost of additions and improvements are capitalized, while maintenance and repairs are charged to expense when incurred. Depreciation is provided on a straight-line basis in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives. Machinery and equipment are depreciated over a range from five to ten years. Office equipment and fixtures are depreciated over a range from three to ten years. Leasehold improvements are depreciated over the lives of the respective leases or the service lives of the leasehold improvements, whichever is shorter. Depreciation of assets recorded under capital leases is included in depreciation expense. |
Intangible Assets | Intangible Assets The Company’s intangible assets other than goodwill are finite–lived and amortized on a straight-line basis over their respective useful lives. Finite-lived intangible assets are analyzed for impairment when and if indicators of impairment exist. At March 31, 2018, the Company’s intangible assets were $3,766,000 and there were no indicators of impairment. |
Goodwill | Goodwill The Company evaluates goodwill for impairment at least annually during the fourth quarter of each fiscal year or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The Company has concluded that there is one reporting unit and therefore, tests goodwill for impairment at the entity level. In testing for goodwill impairment, the Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company’s qualitative assessment indicates that goodwill impairment is more likely than not, a two-step impairment test is performed. The Company tests goodwill for impairment under the two-step impairment test by first comparing the carrying value of net assets to the fair value of the reporting unit. If the fair value of the reporting unit exceeds the carrying value, goodwill is not considered impaired and no further testing is required. If the carrying value of the reporting unit exceeds the fair value, goodwill is potentially impaired and the second step of the impairment test must be performed. In the second step, the Company would compare the implied fair value of the goodwill to its carrying value to determine the amount of the impairment loss, if any. The Company completed the required annual testing of goodwill for impairment during the fourth quarter of the year ended March 31, 2018, and determined through the qualitative assessment that its goodwill of $2,551,000 is not impaired. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs include fees and costs incurred to obtain financing. These fees and costs are amortized using the straight-line method, which approximates the effective interest rate method, over the terms of the related loans and are included in interest expense in the Company’s consolidated statements of income. |
Foreign Currency Translation | Foreign Currency Translation For financial reporting purposes, the functional currency of the foreign subsidiaries is the local currency. The assets and liabilities of foreign operations for which the local currency is the functional currency are translated into the U.S. dollar at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average exchange rates during the year. The accumulated foreign currency translation adjustment is presented as a component of comprehensive income or loss in the consolidated statements of shareholders’ equity. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when performance by the Company is complete and all of the following criteria have been met: • Persuasive evidence of an arrangement exists, • Delivery has occurred or services have been rendered, • The seller’s price to the buyer is fixed or determinable, and • Collectability is reasonably assured. For products shipped free-on-board (“FOB”) shipping point, revenue is recognized on the date of shipment. For products shipped FOB destination, revenues are recognized on the estimated or actual date of delivery. The Company includes shipping and handling charges in its gross invoice price to customers and classifies the total amount as revenue. All shipping and handling costs are expensed as incurred and included in cost of sales. The price of a finished remanufactured product sold to customers is generally comprised of separately invoiced amounts for the Remanufactured Core included in the product (“Remanufactured Core value”) and for the value added by remanufacturing (“unit value”). Unit value revenue is recorded based on the Company’s price list, net of applicable discounts and allowances. The Company allows customers to return slow moving and other inventory. The Company provides for such returns of inventory by reducing revenue and cost of sales for the unit value of goods sold that are expected to be returned based on a historical return analysis and information obtained from customers about current stock levels as further described under the captions “Customer Finished Goods Returns Accrual” and “Inventory Unreturned”. The Company accounts for revenues and cost of sales on a net-of-core-value basis. The Company has determined that its business practices and contractual arrangements result in a significant portion of the Remanufactured Cores sold being replaced by similar Used Cores sent back for credit by customers under the Company’s core exchange program. Accordingly, the Company excludes the value of Remanufactured Cores from revenue. When the Company ships a product, it recognizes an obligation to accept a similar Used Core sent back under the core exchange program by recording a contra receivable account based upon the Remanufactured Core price agreed upon by the Company and its customer. Upon receipt of a Used Core, the Company grants the customer a credit based on the Remanufactured Core price billed and restores the Used Core to on-hand inventory. When the Company ships a product, it invoices certain customers for the Remanufactured Core portion of the product at full Remanufactured Core sales price. For these Remanufactured Cores, the Company recognizes core revenue based upon an estimate of the rate at which the Company’s customers will pay cash for Remanufactured Cores in lieu of sending back similar Used Cores for credits under the Company’s core exchange program. In addition, the Company recognizes revenue related to Remanufactured Cores originally sold at a nominal price and not expected to be replaced by a similar Used Core under the core exchange program. Unlike the full price Remanufactured Cores, the Company only recognizes revenue from nominally priced Remanufactured Cores not expected to be replaced by a similar Used Core sent back under the core exchange program when the Company believes it has met all of the following criteria: • The Company has a signed agreement with the customer covering the nominally priced Remanufactured Cores not expected to be replaced by a similar Used Core sent back under the core exchange program. This agreement must specify the number of Remanufactured Cores its customer will pay cash for in lieu of sending back a similar Used Core and the basis on which the nominally priced Remanufactured Cores are to be valued (normally the average price per Remanufactured Core stipulated in the agreement). • The contractual date for reconciling the Company’s records and customer’s records of the number of nominally priced Remanufactured Cores not expected to be replaced by a similar Used Core sent back under the core exchange program must be in the current or a prior period. • The reconciliation of the nominally priced Remanufactured Cores must be completed and agreed to by the customer. • The amount must be billed to the customer. |
Marketing Allowances | Marketing Allowances The Company records the cost of all marketing allowances provided to its customers. Such allowances include sales incentives and concessions. Voluntary marketing allowances related to a single exchange of product are recorded as a reduction of revenues at the time the related revenues are recorded or when such incentives are offered. Other marketing allowances, which may only be applied against future purchases, are recorded as a reduction to revenues in accordance with a schedule set forth in the relevant contract. Sales incentive amounts are recorded based on the value of the incentive provided. See Note 15 for a description of all marketing allowances. |
Advertising Costs | Advertising Costs The Company expenses all advertising costs as incurred. Advertising expenses for the years ended March 31, 2018, 2017 and 2016 were $610,000, $525,000 and $474,000, respectively. |
Net Income Per Share | 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. Years Ended March 31, 2018 2017 2016 Net income $ 16,316,000 $ 37,573,000 $ 10,563,000 Basic shares 18,854,993 18,608,812 18,233,163 Effect of dilutive stock options and warrants 659,782 809,894 832,930 Diluted shares 19,514,775 19,418,706 19,066,093 Net income per share: Basic net income per share $ 0.87 $ 2.02 $ 0.58 Diluted net income per share $ 0.84 $ 1.93 $ 0.55 The effect of dilutive options and warrants excludes (i) 448,039 shares subject to options with exercise prices ranging from $27.40 to $34.17 per share for the year ended March 31, 2018, (ii) 293,239 shares subject to options with exercise prices ranging from $28.68 to $34.17 per share for the year ended March 31, 2017, and (iii) 1,100 shares subject to options with an exercise price of $34.17 per share for the year ended March 31, 2016, which were anti-dilutive. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. On an on-going basis, the Company evaluates its estimates, including those related to the carrying amount of plant and equipment; valuation of acquisition-related intangible assets including goodwill, impairment of long-lived assets, valuation and return allowances for receivables, inventories, and deferred income taxes; accrued liabilities, warrant liability, share-based compensation, and litigation and disputes. The Company uses significant estimates in the calculation of sales returns. These estimates are based on the Company’s historical return rates and an evaluation of estimated sales returns from specific customers. The Company uses significant estimates in the calculation of the lower of cost or net realizable value of long-term core inventory. The Company’s calculation of inventory reserves involves significant estimates. The basis for the inventory reserve is a comparison of inventory on hand to historical production usage or sales volumes. The Company uses significant estimates in the calculation of its income tax provision or benefit by using forecasts to estimate whether it will have sufficient future taxable income to realize its deferred tax assets. There can be no assurances that the Company’s taxable income will be sufficient to realize such deferred tax assets. The Company uses significant estimates in the ongoing calculation of potential liabilities from uncertain tax positions that are more likely than not to occur. A change in the assumptions used in the estimates for sales returns, inventory reserves and income taxes could result in a difference in the related amounts recorded in the Company’s consolidated financial statements. |
Financial Instruments | Financial Instruments The carrying amounts of cash, short-term investments, 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 current rates for instruments with similar characteristics. |
Share-Based Payments | Share-Based Payments In accounting for share-based compensation awards, the Company follows the accounting guidance for equity-based compensation, which requires that the Company measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost associated with stock options is estimated using the Black-Scholes option-pricing model. The cost associated with restricted stock units is measured based on the number of shares granted and the closing price of the Company’s common stock on the grant date, subject to continued employment. The cost of equity instruments is recognized in the consolidated statements of income on a straight-line basis over the period during which an employee is required to provide service in exchange for the award. In addition, the Company accounts for forfeitures as they occur. The Black-Scholes option-pricing 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 summarizes the Black-Scholes option-pricing model assumptions used to derive the weighted average fair value of the stock options granted during the periods noted. Years Ended March 31, 2018 2017 2016 Weighted average risk free interest rate 1.92 % 1.39 % 1.73 % Weighted average expected holding period (years) 5.82 5.84 5.76 Weighted average expected volatility 47.28 % 47.42 % 46.84 % Weighted average expected dividend yield - - - Weighted average fair value of options granted $ 12.63 $ 13.09 $ 14.14 |
Credit Risk | Credit Risk The majority of the Company’s sales are to leading automotive aftermarket parts suppliers. Management believes the credit risk with respect to trade accounts receivable is limited due to the Company’s credit evaluation process and the nature of its customers. However, should the Company’s customers experience significant cash flow problems, the Company’s financial position and results of operations could be materially and adversely affected, and the maximum amount of loss that would be incurred would be the outstanding receivable balance, Used Cores expected to be returned by customers, and the value of the Remanufactured Cores held at customers’ locations. |
Deferred Compensation Plan | Deferred Compensation Plan The Company has a deferred compensation plan for certain members of management. The plan allows participants to defer salary and bonuses. The assets of the plan are held in a trust and are subject to the claims of the Company’s general creditors under federal and state laws in the event of insolvency. Consequently, the trust qualifies as a Rabbi trust for income tax purposes. The plan’s assets consist primarily of mutual funds and are classified as available for sale. The investments are recorded at market value, with any unrealized gain or loss recorded as other comprehensive income or loss in shareholders’ equity. Adjustments to the deferred compensation liability are recorded in operating expenses. The Company did not redeem any of its short-term investments for the payment of deferred compensation liabilities during the years ended March 31, 2018 and 2017. The carrying value of plan assets was $2,828,000 and $2,140,000, and deferred compensation liability was $2,828,000 and $2,140,000 at March 31, 2018 and 2017, respectively. During the years ended March 31, 2018, 2017, and 2016, an expense of $118,000, $(14,000) and $409,000, respectively, was recorded for each year related to the deferred compensation plan. |
Comprehensive Income or Loss | Comprehensive Income or Loss Comprehensive income or loss is defined as the change in equity during a period resulting from transactions and other events and circumstances from non-owner sources. The Company’s total comprehensive income or loss consists of net unrealized income or loss from foreign currency translation adjustments and unrealized gains or losses on short-term investments. |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Reconciliation of basic and diluted net income per share | The following presents a reconciliation of basic and diluted net income per share. Years Ended March 31, 2018 2017 2016 Net income $ 16,316,000 $ 37,573,000 $ 10,563,000 Basic shares 18,854,993 18,608,812 18,233,163 Effect of dilutive stock options and warrants 659,782 809,894 832,930 Diluted shares 19,514,775 19,418,706 19,066,093 Net income per share: Basic net income per share $ 0.87 $ 2.02 $ 0.58 Diluted net income per share $ 0.84 $ 1.93 $ 0.55 |
Black-Scholes option pricing model assumptions used to derive weighted average fair value of stock options granted | The following summarizes the Black-Scholes option-pricing model assumptions used to derive the weighted average fair value of the stock options granted during the periods noted. Years Ended March 31, 2018 2017 2016 Weighted average risk free interest rate 1.92 % 1.39 % 1.73 % Weighted average expected holding period (years) 5.82 5.84 5.76 Weighted average expected volatility 47.28 % 47.42 % 46.84 % Weighted average expected dividend yield - - - Weighted average fair value of options granted $ 12.63 $ 13.09 $ 14.14 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets [Abstract] | |
Summary of change in goodwill | The following summarizes the change in the Company’s goodwill: Years Ended March 31, 2018 2017 Balance at beginning of period $ 2,551,000 $ 2,053,000 Goodwill acquired - 498,000 Translation adjustment - - Impairment - - Balance at end of period $ 2,551,000 $ 2,551,000 |
Intangible assets subject to amortization | The following is a summary of acquired intangible assets subject to amortization at March 31: 2018 2017 Weighted Average Amortization Period Gross Carrying Value Accumulated Amortization Gross Carrying Value Accumulated Amortization Intangible assets subject to amortization Trademarks 9 years $ 885,000 $ 316,000 $ 705,000 $ 191,000 Customer relationships 13 years 5,900,000 2,937,000 5,900,000 2,421,000 Developed technology 3 years 301,000 67,000 - - Total $ 7,086,000 $ 3,320,000 $ 6,605,000 $ 2,612,000 |
Amortization expense for acquired intangible assets | Amortization expense for acquired intangible assets is as follows: Years Ended March 31, 2018 2017 2016 Amortization expense $ 710,000 $ 613,000 $ 621,000 |
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, 2019 $ 771,000 2020 711,000 2021 613,000 2022 580,000 2023 580,000 Thereafter 511,000 Total $ 3,766,000 |
Accounts Receivable - Net (Tabl
Accounts Receivable - Net (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Accounts Receivable - Net [Abstract] | |
Schedule of accounts receivable | Accounts receivable — net is comprised of the following at March 31: 2018 2017 Accounts receivable — trade $ 83,700,000 $ 76,902,000 Allowance for bad debts (4,142,000 ) (4,140,000 ) Customer allowances earned (11,370,000 ) (7,880,000 ) Customer payment discrepancies (1,110,000 ) (751,000 ) Customer returns RGA issued (15,274,000 ) (12,710,000 ) Customer core returns accruals (36,066,000 ) (25,404,000 ) Less: total accounts receivable offset accounts (67,962,000 ) (50,885,000 ) Total accounts receivable — net $ 15,738,000 $ 26,017,000 |
Schedule of change in warranty return accrual | The following summarizes the change in the Company’s warranty return accrual: Years Ended March 31, 2018 2017 2016 Balance at beginning of period $ 14,286,000 $ 10,845,000 $ 10,904,000 Charged to expense 105,156,000 99,673,000 80,099,000 Amounts processed (102,796,000 ) (96,232,000 ) (80,158,000 ) Balance at end of period $ 16,646,000 $ 14,286,000 $ 10,845,000 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Inventory [Abstract] | |
Non-core inventory | Non-core inventory, inventory unreturned, long-term core inventory, and long-term core inventory deposits are as follows at March 31: 2018 2017 Non-core inventory Raw materials $ 25,805,000 $ 21,515,000 Work in process 635,000 641,000 Finished goods 53,973,000 48,337,000 80,413,000 70,493,000 Less allowance for excess and obsolete inventory (4,138,000 ) (2,977,000 ) Total $ 76,275,000 $ 67,516,000 Inventory unreturned $ 7,508,000 $ 7,581,000 |
Long-term core inventory | Long-term core inventory Used cores held at the Company's facilities $ 53,278,000 $ 38,713,000 Used cores expected to be returned by customers 12,970,000 11,752,000 Remanufactured cores held in finished goods 34,201,000 27,667,000 Remanufactured cores held at customers' locations (1) 203,751,000 185,938,000 304,200,000 264,070,000 Less allowance for excess and obsolete inventory (2,544,000 ) (1,148,000 ) Total $ 301,656,000 $ 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. |
Plant and Equipment (Tables)
Plant and Equipment (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Plant and Equipment [Abstract] | |
Plant and equipment, at cost | The following summarizes plant and equipment, at cost, at March 31: 2018 2017 Machinery and equipment $ 42,976,000 $ 32,589,000 Office equipment and fixtures 11,380,000 11,806,000 Leasehold improvements 7,832,000 7,641,000 62,188,000 52,036,000 Less accumulated depreciation (33,866,000 ) (33,599,000 ) Total $ 28,322,000 $ 18,437,000 |
Capital Lease Obligations (Tabl
Capital Lease Obligations (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Capital Lease Obligations [Abstract] | |
Machinery and computer equipment under agreements accounted for as capital leases | The Company leases various types of machinery and computer equipment under agreements accounted for as capital leases and included in plant and equipment as follows at March 31: 2018 2017 Cost $ 7,092,000 $ 3,663,000 Less: accumulated depreciation (1,446,000 ) (893,000 ) Total $ 5,646,000 $ 2,770,000 |
Future minimum lease payments for capital leases | Future minimum lease payments for the capital leases are as follows: Year Ending March 31, 2019 $ 1,627,000 2020 1,474,000 2021 1,045,000 2022 839,000 2023 613,000 Total minimum lease payments 5,598,000 Less amount representing interest (514,000 ) Present value of future minimum lease payments 5,084,000 Less current portion of lease payments (1,388,000 ) Long-term portion of lease payments $ 3,696,000 |
Accrued Core Payment (Tables)
Accrued Core Payment (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Accrued Core Payment [Abstract] | |
Schedule of future repayments of accrued core payments | Future repayments for accrued core payment are as follows: Year Ending March 31, 2019 $ 17,421,000 2020 7,865,000 2021 6,651,000 2022 4,841,000 Total accrued core payment 36,778,000 Less amount representing interest (1,769,000 ) Present value of accrued core payment 35,009,000 Less current portion of accrued core payment (16,536,000 ) Long-term portion of accrued core payment $ 18,473,000 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Debt [Abstract] | |
Summarized information about the term loan | The following summarizes information about the Company’s Term Loans at March 31: 2018 2017 Principal amount of term loan $ 17,188,000 $ 20,312,000 Unamortized financing fees (207,000 ) (313,000 ) Net carrying amount of term loan 16,981,000 19,999,000 Less current portion of term loan (3,068,000 ) (3,064,000 ) Long-term portion of term loan $ 13,913,000 $ 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, 2019 $ 3,125,000 2020 3,125,000 2021 10,938,000 Total payments $ 17,188,000 |
Accounts Receivable Discount 43
Accounts Receivable Discount Programs (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Accounts Receivable Discount Programs [Abstract] | |
Schedule of accounts receivable discount programs | The following is a summary of the Company’s accounts receivable discount programs: Years Ended March 31, 2018 2017 Receivables discounted $ 357,224,000 $ 352,369,000 Weighted average days 340 342 Weighted average discount rate 3.3 % 2.9 % Amount of discount as interest expense $ 11,182,000 $ 9,724,000 |
Financial Risk Management and44
Financial Risk Management and Derivatives (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Financial Risk Management and Derivatives [Abstract] | |
Schedule of derivative instruments on consolidated statements of income | The following shows the effect of the Company’s derivative instruments on its consolidated statements of income: Gain (Loss) Recognized within General and Administrative Expenses Derivatives Not Designated as Years Ended March 31, Hedging Instruments 2018 2017 2016 Forward foreign currency exchange contracts $ 752,000 $ 843,000 $ 777,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements [Abstract] | |
Financial assets and liabilities measured at fair value recurring basis | The following sets forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis according to the valuation techniques the Company used to determine their fair values at: March 31, 2018 March 31, 2017 Fair Value Measurements Using Inputs Considered as Fair Value Measurements Using Inputs Considered as Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Assets Short-term investments Mutual funds $ 2,828,000 $ 2,828,000 - - $ 2,140,000 $ 2,140,000 - - Prepaid expenses and other current assets Forward foreign currency exchange contracts 1,179,000 - $ 1,179,000 - 427,000 - $ 427,000 - Liabilities Other current liabilities Deferred compensation 2,828,000 2,828,000 - - 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: Years Ended March 31, 2018 2017 Supplier Warrant Contingent Consideration Supplier Warrant Contingent Consideration Beginning balance $ 11,879,000 $ - $ 15,643,000 $ 330,000 Newly issued - - - - Total (gain) loss included in net income (2,313,000 ) - (3,764,000 ) (16,000 ) Exercises/settlements (1) (9,566,000 ) - - (314,000 ) Net transfers in (out) of Level 3 - - - - Ending balance $ - $ - $ 11,879,000 $ - (1) Represents the fair value of the Supplier Warrant as of the exercise date (see Note 11). |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Remaining future minimum rental payments under operating leases | The remaining future minimum rental payments under the above operating leases are as follows: Year Ending March 31, 2019 $ 5,873,000 2020 4,437,000 2021 4,501,000 2022 4,360,000 2023 3,066,000 Thereafter 30,824,000 Total minimum lease payments $ 53,061,000 |
Breakout of allowances | The following summarizes the breakout of allowances discussed above, recorded as a reduction to revenues: Years Ended March 31, 2018 2017 2016 Allowances incurred under long-term customer contracts $ 24,829,000 $ 23,684,000 $ 29,845,000 Allowances related to a single exchange of product 79,813,000 67,262,000 47,451,000 Allowances related to core inventory purchase obligations 2,545,000 5,470,000 2,268,000 Total customer allowances recorded as a reduction of revenues $ 107,187,000 $ 96,416,000 $ 79,564,000 |
Commitments to incur allowances and customer Remanufactured Core purchase obligations | The following presents the Company’s commitments to incur allowances, excluding allowances related to a single exchange of product, which will be recognized as a charge against revenue, and customer Remanufactured Core purchase obligations, which will be recognized in accordance with the terms of the relevant long-term customer contracts: Year Ending March 31, 2019 $ 30,154,000 2020 21,927,000 2021 16,982,000 2022 113,000 Total marketing allowances $ 69,176,000 |
Significant Customer and Othe47
Significant Customer and Other Information (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
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: Years Ended March 31, 2018 2017 2016 Customer A 41 % 44 % 48 % Customer B 24 % 20 % 18 % Customer C 19 % 19 % 21 % Customer D 4 % 4 % 3 % The Company’s largest customers accounted for the following total percentage of accounts receivable — trade at March 31: 2018 2017 Customer A 36 % 33 % Customer B 16 % 18 % Customer C 22 % 12 % Customer D 5 % 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: Years Ended March 31, 2018 2017 2016 Rotating electrical products 78 % 78 % 78 % Wheel hub products 17 % 19 % 20 % Brake master cylinders products 2 % 3 % 2 % Other products 3 % - % - % 100 % 100 % 100 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Schedule of income tax expense (benefit) | The income tax expense is as follows: Years Ended March 31, 2018 2017 2016 Current tax expense Federal $ 12,153,000 $ 9,451,000 $ 12,400,000 State 1,406,000 318,000 1,995,000 Foreign 1,215,000 1,455,000 803,000 Total current tax expense 14,774,000 11,224,000 15,198,000 Deferred tax expense (benefit) Federal 2,779,000 4,291,000 (2,929,000 ) State 333,000 2,174,000 (757,000 ) Foreign (23,000 ) (384,000 ) (33,000 ) Total deferred tax expense (benefit) 3,089,000 6,081,000 (3,719,000 ) Total income tax expense $ 17,863,000 $ 17,305,000 $ 11,479,000 |
Schedule of deferred income taxes | Deferred income taxes consist of the following at March 31: 2018 2017 Assets Accounts receivable valuation $ 3,915,000 $ 4,697,000 Allowance for customer incentives 2,038,000 2,894,000 Inventory obsolescence reserve 1,666,000 1,608,000 Stock options 1,728,000 1,971,000 Intangibles, net 59,000 339,000 Estimate for returns 1,115,000 3,191,000 Accrued compensation 1,152,000 1,785,000 Net operating losses 1,079,000 834,000 Tax credits 1,363,000 - Other 2,091,000 2,065,000 Total deferred tax assets $ 16,206,000 $ 19,384,000 Liabilities Property and equipment, net (1,025,000 ) (1,605,000 ) Other (3,072,000 ) (4,413,000 ) Total deferred tax liabilities $ (4,097,000 ) $ (6,018,000 ) Less valuation allowance $ (1,779,000 ) $ - Net deferred tax assets $ 10,330,000 $ 13,366,000 Net long-term deferred income tax liability (226,000 ) (180,000 ) Net long-term deferred income tax asset 10,556,000 13,546,000 Total $ 10,330,000 $ 13,366,000 |
Schedule of difference between income tax expense at the federal statutory rate and effective tax rate | The difference between the income tax expense at the federal statutory rate and the Company’s effective tax rate is as follows: Years Ended March 31, 2018 2017 2016 Statutory federal income tax rate 31.5 % 35.0 % 35.0 % State income tax rate, net of federal benefit 3.3 % 2.2 % 4.0 % Excess tax benefit from stock compensation (0.7 )% (1.4 )% - % Foreign income taxed at different rates (2.6 )% (0.7 )% (0.8 )% Warrants (2.1 )% (2.4 )% 8.2 % Non-deductible executive compensation 1.0 % 0.8 % 2.2 % Change in valuation allowance 4.9 % - % - % Effects of mandatory redeemed repatriation 1.6 % - % - % Effects of U.S. tax rate changes 14.2 % - % - % Uncertain Tax Positions 0.6 % (0.2 )% 0.4 % Other income tax 0.6 % (1.8 )% 3.1 % 52.3 % 31.5 % 52.1 % |
Schedule of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Years Ended March 31, 2018 2017 2016 Balance at beginning of period $ 1,092,000 $ 1,181,000 $ 1,117,000 Additions based on tax positions related to the current year 234,000 141,000 57,000 Additions for tax positions of prior year - 106,000 217,000 Reductions for tax positions of prior year (107,000 ) - (210,000 ) Settlements - (336,000 ) - Balance at end of period $ 1,219,000 $ 1,092,000 $ 1,181,000 |
Share-based Payments (Tables)
Share-based Payments (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Share-based Payments [Abstract] | |
Summary of stock option activity | The following is a summary of stock option activity during the year: Number of Shares Weighted Average Exercise Price Outstanding at March 31, 2016 1,036,359 $ 14.92 Granted 170,890 $ 27.27 Exercised (55,351 ) $ 8.65 Forfeited (8,600 ) $ 28.92 Outstanding at March 31, 2017 1,143,298 $ 16.97 |
Summary of options outstanding | The following summarizes information about the options outstanding at March 31, 2018: Options Outstanding Options Exercisable Range of Exercise price Shares Weighted Average Exercise Price Weighted Average Remaining Life In Years Aggregate Intrinsic Value Shares Weighted Average Exercise Price Aggregate Intrinsic Value $4.17 to $6.25 49,000 $ 4.87 1.35 49,000 $ 4.87 $6.26 to $7.43 354,534 6.48 4.70 354,534 6.48 $7.44 to $19.94 211,132 9.86 5.23 211,132 9.86 $19.95 to $34.17 528,632 27.96 8.12 203,358 27.54 1,143,298 $ 16.97 6.24 $ 8,555,000 818,024 $ 12.49 $ 8,555,000 |
Summary of changes in the status of non-vested restricted stock units | The following is a summary of changes in the status of non-vested RSUs during the year: Number of Shares Weighted Average Grant Date Fair Value Non-vested at March 31, 2017 126,277 $ 28.26 Granted 77,854 $ 27.70 Vested (68,869 ) $ 27.41 Forfeited (1,434 ) $ 28.37 Non-vested at March 31, 2018 133,828 $ 28.37 |
Accumulated Other Comprehensi50
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Accumulated other comprehensive income (loss) | The following summarizes the changes in accumulated other comprehensive income (loss) for the years ended March 31: 2018 2017 Unrealized Gain on Short-Term Investments Foreign Currency Translation Total Unrealized Gain on Short-Term Investments Foreign Currency Translation Total Beginning balance $ 528,000 $ (7,969,000 ) $ (7,441,000 ) $ 332,000 $ (5,184,000 ) $ (4,852,000 ) Other comprehensive income (loss), net of tax 218,000 1,795,000 2,013,000 196,000 (2,785,000 ) (2,589,000 ) Amounts reclassified from other comprehensive income (loss), net of tax - - - - - - Ending balance $ 746,000 $ (6,174,000 ) $ (5,428,000 ) $ 528,000 $ (7,969,000 ) $ (7,441,000 ) |
Unaudited Quarterly Financial51
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Unaudited Quarterly Financial Data [Abstract] | |
Schedule of quarterly financial information | The following summarizes selected quarterly financial data for the year ended March 31, 2018 . First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 95,063,000 $ 111,774,000 $ 100,127,000 $ 121,108,000 Cost of goods sold 69,224,000 84,612,000 77,583,000 90,780,000 Gross profit 25,839,000 27,162,000 22,544,000 30,328,000 Operating expenses: General and administrative 6,187,000 8,615,000 11,915,000 8,810,000 Sales and marketing 3,394,000 3,457,000 4,048,000 4,131,000 Research and development 1,002,000 1,240,000 1,678,000 1,772,000 Total operating expenses 10,583,000 13,312,000 17,641,000 14,713,000 Operating income 15,256,000 13,850,000 4,903,000 15,615,000 Other expense: Interest expense, net 3,314,000 3,522,000 3,953,000 4,656,000 Income before income tax expense 11,942,000 10,328,000 950,000 10,959,000 Income tax expense 4,316,000 4,027,000 7,756,000 1,764,000 Net income (loss) $ 7,626,000 $ 6,301,000 $ (6,806,000 ) $ 9,195,000 Basic net income (loss) per share $ 0.41 $ 0.34 $ (0.36 ) $ 0.48 Diluted net income (loss) per share $ 0.39 $ 0.33 $ (0.36 ) $ 0.47 The following summarizes selected quarterly financial data for the year ended March 31, 2017: First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 85,412,000 $ 108,836,000 $ 112,595,000 $ 114,410,000 Cost of goods sold 65,021,000 78,178,000 80,225,000 82,783,000 Gross profit 20,391,000 30,658,000 32,370,000 31,627,000 Operating expenses: General and administrative 3,625,000 9,869,000 7,952,000 9,678,000 Sales and marketing 2,634,000 2,707,000 3,234,000 3,551,000 Research and development 869,000 905,000 1,039,000 1,011,000 Total operating expenses 7,128,000 13,481,000 12,225,000 14,240,000 Operating income 13,263,000 17,177,000 20,145,000 17,387,000 Other expense: Interest expense, net 2,819,000 3,189,000 3,357,000 3,729,000 Income before income tax expense 10,444,000 13,988,000 16,788,000 13,658,000 Income tax expense 2,936,000 4,845,000 5,678,000 3,846,000 Net income $ 7,508,000 $ 9,143,000 $ 11,110,000 $ 9,812,000 Basic net income per share $ 0.40 $ 0.49 $ 0.59 $ 0.53 Diluted net income per share $ 0.39 $ 0.47 $ 0.57 $ 0.50 |
Summary of Significant Accoun52
Summary of Significant Accounting Policies, Revenue Recognition and Segment Reporting (Details) $ in Millions | 12 Months Ended | ||
Mar. 31, 2018USD ($)Segment | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | Segment | 1 | ||
ASU 2014-09 [Member] | Maximum [Member] | |||
Revenue Recognition [Abstract] | |||
Increase (decrease) in anticipated revenue | $ | $ (0.4) | $ (0.9) | $ 2 |
Summary of Significant Accoun53
Summary of Significant Accounting Policies, Inventory (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Inventory [Abstract] | ||
Prior period over which allocations of labor and variable and fixed overhead costs are determined based on average actual use of production facilities | 12 months | |
Reserve for excess and obsolete inventory | $ 6,682,000 | $ 4,125,000 |
Period of normal operating cycle | 1 year | |
Maximum [Member] | ||
Inventory [Abstract] | ||
Percentage of inventory reserve to cost if no liquidation market exists for part | 100.00% |
Summary of Significant Accoun54
Summary of Significant Accounting Policies, Income Taxes (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Taxes [Abstract] | |||||
Federal corporate tax rate | 21.00% | 35.00% | 31.50% | 35.00% | 35.00% |
Summary of Significant Accoun55
Summary of Significant Accounting Policies, Plant and Equipment (Details) | 12 Months Ended |
Mar. 31, 2018 | |
Machinery and Equipment [Member] | Minimum [Member] | |
Plant and Equipment [Line Items] | |
Estimated service life | 5 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Plant and Equipment [Line Items] | |
Estimated service life | 10 years |
Office Equipment and Fixtures [Member] | Minimum [Member] | |
Plant and Equipment [Line Items] | |
Estimated service life | 3 years |
Office Equipment and Fixtures [Member] | Maximum [Member] | |
Plant and Equipment [Line Items] | |
Estimated service life | 10 years |
Summary of Significant Accoun56
Summary of Significant Accounting Policies, Intangible Assets and Goodwill (Details) | 12 Months Ended | ||
Mar. 31, 2018USD ($)ReportingUnit | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | |
Goodwill and Intangible Assets [Abstract] | |||
Intangible assets | $ 3,766,000 | $ 3,993,000 | |
Goodwill [Abstract] | |||
Number of reporting units | ReportingUnit | 1 | ||
Amount of goodwill | $ 2,551,000 | $ 2,551,000 | $ 2,053,000 |
Summary of Significant Accoun57
Summary of Significant Accounting Policies, Advertising Costs (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Advertising Costs [Abstract] | |||
Advertising expenses | $ 610,000 | $ 525,000 | $ 474,000 |
Summary of Significant Accoun58
Summary of Significant Accounting Policies, Net Income Per Share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Reconciliation of basic and diluted net income per share [Abstract] | |||||||||||
Net income | $ 9,195,000 | $ (6,806,000) | $ 6,301,000 | $ 7,626,000 | $ 9,812,000 | $ 11,110,000 | $ 9,143,000 | $ 7,508,000 | $ 16,316,000 | $ 37,573,000 | $ 10,563,000 |
Basic shares (in shares) | 18,854,993 | 18,608,812 | 18,233,163 | ||||||||
Effect of dilutive stock options and warrants (in shares) | 659,782 | 809,894 | 832,930 | ||||||||
Diluted shares (in shares) | 19,514,775 | 19,418,706 | 19,066,093 | ||||||||
Net income per share [Abstract] | |||||||||||
Basic net income per share (in dollars per share) | $ 0.48 | $ (0.36) | $ 0.34 | $ 0.41 | $ 0.53 | $ 0.59 | $ 0.49 | $ 0.40 | $ 0.87 | $ 2.02 | $ 0.58 |
Diluted net income per share (in dollars per share) | 0.47 | $ (0.36) | $ 0.33 | $ 0.39 | 0.50 | $ 0.57 | $ 0.47 | $ 0.39 | $ 0.84 | $ 1.93 | $ 0.55 |
Options [Member] | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Antidilutive securities excluded from effect of dilutive options and warrants (in shares) | 448,039 | 293,239 | 1,100 | ||||||||
Exercise price (in dollars per share) | $ 34.17 | ||||||||||
Options [Member] | Minimum [Member] | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Exercise price (in dollars per share) | 27.40 | 28.68 | $ 27.40 | $ 28.68 | |||||||
Options [Member] | Maximum [Member] | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Exercise price (in dollars per share) | $ 34.17 | $ 34.17 | $ 34.17 | $ 34.17 |
Summary of Significant Accoun59
Summary of Significant Accounting Policies, Share-Based Payments (Details) - $ / shares | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Black-Scholes option pricing model assumptions used to derive the weighted average fair value of the stock options granted [Abstract] | |||
Weighted average risk free interest rate | 1.92% | 1.39% | 1.73% |
Weighted average expected holding period | 5 years 9 months 25 days | 5 years 10 months 2 days | 5 years 9 months 4 days |
Weighted average expected volatility | 47.28% | 47.42% | 46.84% |
Weighted average expected dividend yield | 0.00% | 0.00% | 0.00% |
Weighted average fair value of options granted (in dollars per share) | $ 12.63 | $ 13.09 | $ 14.14 |
Summary of Significant Accoun60
Summary of Significant Accounting Policies, Deferred Compensation Plan (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Deferred Compensation Plan [Abstract] | |||
Short-term investments redeemed for the payment of deferred compensation liabilities | $ 0 | $ 0 | |
Carrying value of plan assets | 2,828,000 | 2,140,000 | |
Deferred compensation obligation | 2,828,000 | 2,140,000 | |
Expense related to the deferred compensation plan | $ 118,000 | $ (14,000) | $ 409,000 |
Acquisition (Details)
Acquisition (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2018 | 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 | $ 3,379,000 | |
Other net assets | 1,121,000 | |
D&V Electronics Ltd [Member] | Developed Technology [Member] | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 308,000 | |
Estimated useful life | 3 years | |
D&V Electronics Ltd [Member] | Trademarks [Member] | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 185,000 | |
Estimated useful life | 2 years |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Goodwill (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Change in Goodwill [Roll Forward] | ||
Balance at beginning of period | $ 2,551,000 | $ 2,053,000 |
Goodwill acquired | 0 | 498,000 |
Translation adjustment | 0 | 0 |
Impairment | 0 | 0 |
Balance at end of period | $ 2,551,000 | $ 2,551,000 |
Goodwill and Intangible Asset63
Goodwill and Intangible Assets, Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Intangible assets subject to amortization [Abstract] | ||
Gross Carrying Value | $ 7,086,000 | $ 6,605,000 |
Accumulated Amortization | 3,320,000 | 2,612,000 |
Fully amortized intangible assets, retired | $ 0 | 33,000 |
Trademarks [Member] | ||
Intangible assets subject to amortization [Abstract] | ||
Weighted Average Amortization Period | 9 years | |
Gross Carrying Value | $ 885,000 | 705,000 |
Accumulated Amortization | $ 316,000 | 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 | $ 2,937,000 | 2,421,000 |
Developed Technology [Member] | ||
Intangible assets subject to amortization [Abstract] | ||
Weighted Average Amortization Period | 3 years | |
Gross Carrying Value | $ 301,000 | 0 |
Accumulated Amortization | $ 67,000 | $ 0 |
Goodwill and Intangible Asset64
Goodwill and Intangible Assets, Amortization Expense (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Amortization expense for acquired intangible assets [Abstract] | |||
Amortization expense | $ 710,000 | $ 613,000 | $ 621,000 |
Estimated future amortization expense for intangible assets subject to amortization [Abstract] | |||
2,019 | 771,000 | ||
2,020 | 711,000 | ||
2,021 | 613,000 | ||
2,022 | 580,000 | ||
2,023 | 580,000 | ||
Thereafter | 511,000 | ||
Total | $ 3,766,000 |
Short-Term Investments (Details
Short-Term Investments (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Short-Term Investments [Abstract] | ||
Short-term investments redeemed for the payment of deferred compensation liabilities | $ 0 | $ 0 |
Short-term investments | 2,828,000 | 2,140,000 |
Liability to plan participants | $ 2,828,000 | $ 2,140,000 |
Accounts Receivable - Net (Deta
Accounts Receivable - Net (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Accounts Receivable - Net [Abstract] | ||
Accounts receivable - trade | $ 83,700,000 | $ 76,902,000 |
Allowance for bad debts | (4,142,000) | (4,140,000) |
Customer allowances earned | (11,370,000) | (7,880,000) |
Customer payment discrepancies | (1,110,000) | (751,000) |
Customer returns RGA issued | (15,274,000) | (12,710,000) |
Customer core returns accruals | (36,066,000) | (25,404,000) |
Less: total accounts receivable offset accounts | (67,962,000) | (50,885,000) |
Total accounts receivable - net | $ 15,738,000 | $ 26,017,000 |
Accounts Receivable - Net, Cust
Accounts Receivable - Net, Customer Finished Goods Returns Accrual (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Warranty Returns [Abstract] | |||
Warranty accrual included in customer returns RGA issued | $ 7,204,000 | $ 5,303,000 | |
Warranty return estimate included in customer finished goods returns accrual | 9,442,000 | 8,983,000 | |
Change in warranty return accrual [Roll Forward] | |||
Balance at beginning of period | 14,286,000 | 10,845,000 | $ 10,904,000 |
Charged to expense | 105,156,000 | 99,673,000 | 80,099,000 |
Amounts processed | (102,796,000) | (96,232,000) | (80,158,000) |
Balance at end of period | $ 16,646,000 | $ 14,286,000 | $ 10,845,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 | |
Non-core inventory [Abstract] | |||
Raw materials | $ 25,805,000 | $ 21,515,000 | |
Work-in-process | 635,000 | 641,000 | |
Finished goods | 53,973,000 | 48,337,000 | |
Non-core inventory, gross | 80,413,000 | 70,493,000 | |
Less allowance for excess and obsolete inventory | (4,138,000) | (2,977,000) | |
Total | 76,275,000 | 67,516,000 | |
Inventory unreturned | 7,508,000 | 7,581,000 | |
Long-term core inventory [Abstract] | |||
Used cores held at the Company's facilities | 53,278,000 | 38,713,000 | |
Used cores expected to be returned by customers | 12,970,000 | 11,752,000 | |
Remanufactured cores held in finished goods | 34,201,000 | 27,667,000 | |
Remanufactured cores held at customers' locations | [1] | 203,751,000 | 185,938,000 |
Long-term core inventory - gross | 304,200,000 | 264,070,000 | |
Less allowance for excess and obsolete inventory | (2,544,000) | (1,148,000) | |
Total | 301,656,000 | 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. |
Plant and Equipment (Details)
Plant and Equipment (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 62,188,000 | $ 52,036,000 |
Less accumulated depreciation | (33,866,000) | (33,599,000) |
Total | 28,322,000 | 18,437,000 |
Foreign Countries [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 14,919,000 | 3,855,000 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 42,976,000 | 32,589,000 |
Office Equipment and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 11,380,000 | 11,806,000 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 7,832,000 | $ 7,641,000 |
Capital Lease Obligations (Deta
Capital Lease Obligations (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Machinery and computer equipment under agreements accounted for as capital leases [Abstract] | ||
Cost | $ 7,092,000 | $ 3,663,000 |
Less: accumulated depreciation | (1,446,000) | (893,000) |
Total | 5,646,000 | $ 2,770,000 |
Future minimum lease payments for capital leases [Abstract] | ||
2,019 | 1,627,000 | |
2,020 | 1,474,000 | |
2,021 | 1,045,000 | |
2,022 | 839,000 | |
2,023 | 613,000 | |
Total minimum lease payments | 5,598,000 | |
Less amount representing interest | (514,000) | |
Present value of future minimum lease payments | 5,084,000 | |
Less current portion of lease payments | (1,388,000) | |
Long-term portion of lease payments | $ 3,696,000 |
Accrued Core Payment (Details)
Accrued Core Payment (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Accrued Core Payment [Abstract] | ||
2,019 | $ 17,421,000 | |
2,020 | 7,865,000 | |
2,021 | 6,651,000 | |
2,022 | 4,841,000 | |
Total accrued core payment | 36,778,000 | |
Less amount representing interest | (1,769,000) | |
Present value of accrued core payment | 35,009,000 | $ 24,063,000 |
Less current portion of accrued core payment | (16,536,000) | (11,714,000) |
Long-term portion of accrued core payment | $ 18,473,000 | $ 12,349,000 |
Debt (Details)
Debt (Details) - USD ($) | Sep. 08, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | Aug. 31, 2012 |
Summarized information about the term loan [Abstract] | |||||
Less current portion of term loan | $ (3,068,000) | $ (3,064,000) | |||
Long-term portion of term loan | 13,913,000 | 16,935,000 | |||
WX Agreement [Abstract] | |||||
Settlement of warrant | 4,000,000 | 0 | $ 0 | ||
Total (gain) loss included in net loss | (2,313,000) | $ (3,764,000) | $ 5,137,000 | ||
Letters of Credit [Member] | |||||
Credit Facility [Abstract] | |||||
Maximum borrowing capacity | 15,000,000 | ||||
Standby Letters of Credit [Member] | |||||
Future repayments of the Amended Term Loan, by fiscal year [Abstract] | |||||
Outstanding balance under revolving loan | 260,000 | ||||
Commercial Letter of Credit [Member] | |||||
Future repayments of the Amended Term Loan, by fiscal year [Abstract] | |||||
Outstanding balance under revolving loan | 600,000 | ||||
Term Loans [Member] | |||||
Credit Facility [Abstract] | |||||
Maximum borrowing capacity | 25,000,000 | ||||
Quarterly principal payments | $ 781,250 | ||||
Interest rate at end of period | 4.42% | 3.29% | |||
Summarized information about the term loan [Abstract] | |||||
Principal amount of term loan | $ 17,188,000 | $ 20,312,000 | |||
Unamortized financing fees | (207,000) | (313,000) | |||
Net carrying amount of term loan | 16,981,000 | 19,999,000 | |||
Less current portion of term loan | (3,068,000) | (3,064,000) | |||
Long-term portion of term loan | 13,913,000 | 16,935,000 | |||
Future repayments of the Amended Term Loan, by fiscal year [Abstract] | |||||
2,019 | 3,125,000 | ||||
2,020 | 3,125,000 | ||||
2,021 | 10,938,000 | ||||
Total payments | 17,188,000 | $ 20,312,000 | |||
Revolving Facility [Member] | |||||
Credit Facility [Abstract] | |||||
Maximum borrowing capacity | $ 120,000,000 | ||||
Interest rate at end of period | 4.52% | 3.55% | |||
Future repayments of the Amended Term Loan, by fiscal year [Abstract] | |||||
Outstanding balance under revolving loan | $ 54,000,000 | $ 11,000,000 | |||
Amount available under revolving facility | 65,140,000 | ||||
Credit Facility [Member] | |||||
Credit Facility [Abstract] | |||||
Maximum borrowing capacity | $ 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% | ||||
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% | ||||
Subsequent financing probability | 0.00% | ||||
Expected life | 22 days | ||||
Total (gain) loss included in net loss | $ (2,313,000) | $ (3,764,000) |
Accounts Receivable Discount 73
Accounts Receivable Discount Programs (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accounts Receivable Discount Programs [Abstract] | ||
Receivables discounted | $ 357,224,000 | $ 352,369,000 |
Weighted average days | 340 days | 342 days |
Annualized weighted average discount rate | 3.30% | 2.90% |
Amount of discount as interest expense | $ 11,182,000 | $ 9,724,000 |
Financial Risk Management and74
Financial Risk Management and Derivatives (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Forward foreign currency exchange contracts included in prepaid and other current assets | $ 1,179,000 | $ 427,000 | |
Forward Foreign Currency Exchange Contracts [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Notional amount of foreign currency derivatives | 31,304,000 | 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 | $ 752,000 | $ 843,000 | $ 777,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Forward Foreign Currency Exchange Contracts [Member] | |||
Other liabilities [Abstract] | |||
Net gain on forward foreign currency exchange contracts | $ 752,000 | $ 843,000 | |
Supplier Warrant [Member] | |||
Change in warrant liability measured at fair value recurring basis using significant unobservable inputs (Level 3) [Roll Forward] | |||
Beginning balance | 11,879,000 | 15,643,000 | |
Newly issued | 0 | 0 | |
Total (gain) loss included in net income | (2,313,000) | (3,764,000) | |
Exercises/settlements | [1] | (9,566,000) | 0 |
Net transfers in (out) of Level 3 | 0 | 0 | |
Ending balance | 0 | 11,879,000 | |
Contingent Consideration [Member] | |||
Change in warrant liability measured at fair value recurring basis using significant unobservable inputs (Level 3) [Roll Forward] | |||
Beginning balance | 0 | 330,000 | |
Newly issued | 0 | 0 | |
Total (gain) loss included in net income | 0 | (16,000) | |
Exercises/settlements | 0 | (314,000) | |
Net transfers in (out) of Level 3 | 0 | 0 | |
Ending balance | 0 | 0 | |
Recurring [Member] | |||
Short-Term Investments [Abstract] | |||
Mutual funds | 2,828,000 | 2,140,000 | |
Prepaid Expense and Other Current Assets [Abstract] | |||
Forward foreign currency exchange contracts | 1,179,000 | 427,000 | |
Other current liabilities [Abstract] | |||
Deferred compensation | 2,828,000 | 2,140,000 | |
Other liabilities [Abstract] | |||
Warrant liability | 0 | 11,879,000 | |
Recurring [Member] | Level 1 [Member] | |||
Short-Term Investments [Abstract] | |||
Mutual funds | 2,828,000 | 2,140,000 | |
Prepaid Expense and Other Current Assets [Abstract] | |||
Forward foreign currency exchange contracts | 0 | 0 | |
Other current liabilities [Abstract] | |||
Deferred compensation | 2,828,000 | 2,140,000 | |
Other liabilities [Abstract] | |||
Warrant liability | 0 | 0 | |
Recurring [Member] | Level 2 [Member] | |||
Short-Term Investments [Abstract] | |||
Mutual funds | 0 | 0 | |
Prepaid Expense and Other Current Assets [Abstract] | |||
Forward foreign currency exchange contracts | 1,179,000 | 427,000 | |
Other current liabilities [Abstract] | |||
Deferred compensation | 0 | 0 | |
Other liabilities [Abstract] | |||
Warrant liability | 0 | 0 | |
Recurring [Member] | Level 3 [Member] | |||
Short-Term Investments [Abstract] | |||
Mutual funds | 0 | 0 | |
Prepaid Expense and Other Current Assets [Abstract] | |||
Forward foreign currency exchange contracts | 0 | 0 | |
Other current liabilities [Abstract] | |||
Deferred compensation | 0 | 0 | |
Other liabilities [Abstract] | |||
Warrant liability | $ 0 | $ 11,879,000 | |
[1] | Represents the fair value of the Supplier Warrant as of the exercise date (see Note 11). |
Commitments and Contingencies76
Commitments and Contingencies (Details) | 12 Months Ended | ||
Mar. 31, 2018USD ($)ft² | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | |
Remaining future minimum rental payments under operating leases [Abstract] | |||
2,019 | $ 5,873,000 | ||
2,020 | 4,437,000 | ||
2,021 | 4,501,000 | ||
2,022 | 4,360,000 | ||
2,023 | 3,066,000 | ||
Thereafter | 30,824,000 | ||
Total minimum lease payments | 53,061,000 | ||
Total operating lease expenses | $ 4,362,000 | $ 3,495,000 | $ 3,263,000 |
Commitments to Provide Marketing Allowances under Long-Term Customer Contracts [Abstract] | |||
Term of long-term agreements with major customer | 4 years | ||
Breakout of allowances recorded as reduction to revenues [Abstract] | |||
Allowances incurred under long-term customer contracts | $ 24,829,000 | 23,684,000 | 29,845,000 |
Allowances related to a single exchange of product | 79,813,000 | 67,262,000 | 47,451,000 |
Allowances related to core inventory purchase obligations | 2,545,000 | 5,470,000 | 2,268,000 |
Total customer allowances recorded as a reduction of revenues | 107,187,000 | $ 96,416,000 | $ 79,564,000 |
Marketing Allowances and Customer Remanufactured Core Purchase Obligation [Abstract] | |||
2,019 | 30,154,000 | ||
2,020 | 21,927,000 | ||
2,021 | 16,982,000 | ||
2,022 | 113,000 | ||
Total marketing allowances | $ 69,176,000 | ||
New Distribution Center in Mexico [Member] | |||
Operating Lease Commitments [Abstract] | |||
Operating lease term | 15 years | ||
Area of distribution center in Tijuana, Mexico | ft² | 410,000 |
Significant Customer and Othe77
Significant Customer and Other Information (Details) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Sales [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 100.00% | 100.00% | 100.00% |
Sales [Member] | Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 41.00% | 44.00% | 48.00% |
Sales [Member] | Customer B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 24.00% | 20.00% | 18.00% |
Sales [Member] | Customer C [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 19.00% | 19.00% | 21.00% |
Sales [Member] | Customer D [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 4.00% | 4.00% | 3.00% |
Sales [Member] | Rotating Electrical Products [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 78.00% | 78.00% | 78.00% |
Sales [Member] | Wheel Hub Products [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 17.00% | 19.00% | 20.00% |
Sales [Member] | Brake Master Cylinders Products [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 2.00% | 3.00% | 2.00% |
Sales [Member] | Other Products [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 3.00% | 0.00% | 0.00% |
Accounts Receivable - Trade [Member] | Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 36.00% | 33.00% | |
Accounts Receivable - Trade [Member] | Customer B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 16.00% | 18.00% | |
Accounts Receivable - Trade [Member] | Customer C [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 22.00% | 12.00% | |
Accounts Receivable - Trade [Member] | Customer D [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 5.00% | 16.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Taxes [Abstract] | ||||||||||||
One-time non-cash tax charge for deferred income taxes | $ 4,863,000 | |||||||||||
Estimated accrued toll charge liability | $ 530,000 | 530,000 | ||||||||||
Current tax expense [Abstract] | ||||||||||||
Federal | 12,153,000 | $ 9,451,000 | $ 12,400,000 | |||||||||
State | 1,406,000 | 318,000 | 1,995,000 | |||||||||
Foreign | 1,215,000 | 1,455,000 | 803,000 | |||||||||
Total current tax expense | 14,774,000 | 11,224,000 | 15,198,000 | |||||||||
Deferred tax expense (benefit) [Abstract] | ||||||||||||
Federal | 2,779,000 | 4,291,000 | (2,929,000) | |||||||||
State | 333,000 | 2,174,000 | (757,000) | |||||||||
Foreign | (23,000) | (384,000) | (33,000) | |||||||||
Total deferred tax expense (benefit) | 3,089,000 | 6,081,000 | (3,719,000) | |||||||||
Total income tax expense | 1,764,000 | $ 7,756,000 | $ 4,027,000 | $ 4,316,000 | $ 3,846,000 | $ 5,678,000 | $ 4,845,000 | $ 2,936,000 | 17,863,000 | 17,305,000 | $ 11,479,000 | |
Assets [Abstract] | ||||||||||||
Accounts receivable valuation | 3,915,000 | 4,697,000 | 3,915,000 | 4,697,000 | ||||||||
Allowance for customer incentives | 2,038,000 | 2,894,000 | 2,038,000 | 2,894,000 | ||||||||
Inventory obsolescence reserve | 1,666,000 | 1,608,000 | 1,666,000 | 1,608,000 | ||||||||
Stock options | 1,728,000 | 1,971,000 | 1,728,000 | 1,971,000 | ||||||||
Intangibles, net | 59,000 | 339,000 | 59,000 | 339,000 | ||||||||
Estimate for returns | 1,115,000 | 3,191,000 | 1,115,000 | 3,191,000 | ||||||||
Accrued compensation | 1,152,000 | 1,785,000 | 1,152,000 | 1,785,000 | ||||||||
Net operating losses | 1,079,000 | 834,000 | 1,079,000 | 834,000 | ||||||||
Tax credits | 1,363,000 | 0 | 1,363,000 | 0 | ||||||||
Other | 2,091,000 | 2,065,000 | 2,091,000 | 2,065,000 | ||||||||
Total deferred tax assets | 16,206,000 | 19,384,000 | 16,206,000 | 19,384,000 | ||||||||
Liabilities [Abstract] | ||||||||||||
Property and equipment, net | (1,025,000) | (1,605,000) | (1,025,000) | (1,605,000) | ||||||||
Other | (3,072,000) | (4,413,000) | (3,072,000) | (4,413,000) | ||||||||
Total deferred tax liabilities | (4,097,000) | (6,018,000) | (4,097,000) | (6,018,000) | ||||||||
Less valuation allowance | (1,779,000) | 0 | (1,779,000) | 0 | ||||||||
Net deferred tax assets | 10,330,000 | 13,366,000 | 10,330,000 | 13,366,000 | ||||||||
Net long-term deferred income tax liability | (226,000) | (180,000) | (226,000) | (180,000) | ||||||||
Net long-term deferred income tax asset | 10,556,000 | $ 13,546,000 | 10,556,000 | $ 13,546,000 | ||||||||
State net operating loss carryforwards | $ 932,000 | $ 932,000 | ||||||||||
Difference between income tax expense at the federal statutory rate and effective tax rate [Abstract] | ||||||||||||
Statutory federal income tax rate | 21.00% | 35.00% | 31.50% | 35.00% | 35.00% | |||||||
State income tax rate, net of federal benefit | 3.30% | 2.20% | 4.00% | |||||||||
Excess tax benefit from stock compensation | (0.70%) | (1.40%) | 0.00% | |||||||||
Foreign income taxed at different rates | (2.60%) | (0.70%) | (0.80%) | |||||||||
Warrants | (2.10%) | (2.40%) | 8.20% | |||||||||
Non-deductible executive compensation | 1.00% | 0.80% | 2.20% | |||||||||
Change in valuation allowance | 4.90% | 0.00% | 0.00% | |||||||||
Effects of mandatory redeemed repatriation | 1.60% | 0.00% | 0.00% | |||||||||
Effects of U.S. tax rate changes | 14.20% | 0.00% | 0.00% | |||||||||
Uncertain Tax Positions | 0.60% | (0.20%) | 0.40% | |||||||||
Other income tax | 0.60% | (1.80%) | 3.10% | |||||||||
Effective tax rate | 52.30% | 31.50% | 52.10% |
Income Taxes, Unrecognized Tax
Income Taxes, Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Unrecognized tax benefits [Roll Forward] | |||
Balance at beginning of period | $ 1,092,000 | $ 1,181,000 | $ 1,117,000 |
Additions based on tax positions related to the current year | 234,000 | 141,000 | 57,000 |
Additions for tax positions of prior year | 0 | 106,000 | 217,000 |
Reductions for tax positions of prior year | (107,000) | 0 | (210,000) |
Settlements | 0 | (336,000) | 0 |
Balance at end of period | 1,219,000 | 1,092,000 | 1,181,000 |
Unrecognized tax benefits that would impact effective tax rate | 1,054,000 | 840,000 | 678,000 |
Recognized interest and penalties | 5,000 | 51,000 | $ 34,000 |
Interest and penalties accrued | $ 146,000 | $ 141,000 |
Defined Contribution Plans (Det
Defined Contribution Plans (Details) - 401 (K) Plan [Member] - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Minimum age required to participate in defined contribution plan | 21 years | ||
Minimum service period required to participate in defined contribution plan | 6 months | ||
Employer's matching contribution | 50.00% | ||
Employer's maximum contribution specified as percentage of employee compensation | 6.00% | ||
Matching contributions vesting period | 5 years | ||
Matching contribution, amount | $ 389,000 | $ 353,000 | $ 347,000 |
Share-based Payments (Details)
Share-based Payments (Details) - shares | Mar. 31, 2018 | Mar. 31, 2017 |
2003 Long-Term Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Option to purchase common stock, outstanding (in shares) | 0 | 10,350 |
Shares of common stock available for grant (in shares) | 0 | 0 |
2004 Non-Employee Director Stock Option Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Option to purchase common stock, outstanding (in shares) | 97,000 | 128,000 |
Shares of common stock available for grant (in shares) | 0 | 0 |
2010 Incentive Award Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock shares reserved for grants (in shares) | 3,950,000 | |
Option to purchase common stock, outstanding (in shares) | 1,046,298 | 898,009 |
Shares of common stock available for grant (in shares) | 1,573,810 | 688,765 |
2010 Incentive Award Plan [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares issued (in shares) | 98,169 | 88,894 |
2014 Non-Employee Director Incentive Award Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock shares reserved for grants (in shares) | 342,000 | |
Shares of common stock available for grant (in shares) | 236,976 | 263,078 |
2014 Non-Employee Director Incentive Award Plan [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares issued (in shares) | 35,659 | 37,383 |
Share-based Payments, Stock Opt
Share-based Payments, Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, shares (in shares) | 1,143,298 | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 16.97 | ||
Options outstanding, weighted average remaining life | 6 years 2 months 26 days | ||
Options outstanding, aggregate intrinsic value | $ 8,555,000 | ||
Options exercisable, shares (in shares) | 818,024 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 12.49 | ||
Options exercisable, aggregate intrinsic value | $ 8,555,000 | ||
$4.17 to $6.25 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price of options, lower range (in dollars per share) | $ 4.17 | ||
Exercise price of options, upper range (in dollars per share) | $ 6.25 | ||
Options outstanding, shares (in shares) | 49,000 | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 4.87 | ||
Options outstanding, weighted average remaining life | 1 year 4 months 6 days | ||
Options exercisable, shares (in shares) | 49,000 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 4.87 | ||
$6.26 to $7.43 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price of options, lower range (in dollars per share) | 6.26 | ||
Exercise price of options, upper range (in dollars per share) | $ 7.43 | ||
Options outstanding, shares (in shares) | 354,534 | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 6.48 | ||
Options outstanding, weighted average remaining life | 4 years 8 months 12 days | ||
Options exercisable, shares (in shares) | 354,534 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 6.48 | ||
$7.44 to $19.94 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price of options, lower range (in dollars per share) | 7.44 | ||
Exercise price of options, upper range (in dollars per share) | $ 19.94 | ||
Options outstanding, shares (in shares) | 211,132 | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 9.86 | ||
Options outstanding, weighted average remaining life | 5 years 2 months 23 days | ||
Options exercisable, shares (in shares) | 211,132 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 9.86 | ||
$19.95 to $34.17 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price of options, lower range (in dollars per share) | 19.95 | ||
Exercise price of options, upper range (in dollars per share) | $ 34.17 | ||
Options outstanding, shares (in shares) | 528,632 | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 27.96 | ||
Options outstanding, weighted average remaining life | 8 years 1 month 13 days | ||
Options exercisable, shares (in shares) | 203,358 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 27.54 | ||
Stock Options [Member] | |||
Number of Shares [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 1,036,359 | ||
Granted (in shares) | 170,890 | ||
Exercised (in shares) | (55,351) | ||
Forfeited (in shares) | (8,600) | ||
Outstanding at end of period (in shares) | 1,143,298 | 1,036,359 | |
Weighted Average Exercise Price [Roll Forward] | |||
Outstanding at beginning of period (in dollars per share) | $ 14.92 | ||
Granted (in dollars per share) | 27.27 | ||
Exercised (in dollars per share) | 8.65 | ||
Forfeited (in dollars per share) | 28.92 | ||
Outstanding at end of period (in dollars per share) | $ 16.97 | $ 14.92 | |
Number of stock options unvested (in shares) | 325,274 | ||
Weighted average exercise price of stock options unvested (in dollars per share) | $ 28.23 | ||
Pre-tax intrinsic value of options exercised | $ 913,000 | $ 2,477,000 | $ 14,002,000 |
Fair value of vested stock options | $ 1,572,000 | $ 1,290,000 | $ 905,000 |
Closing stock price (in dollars per share) | $ 21.43 | ||
Total unrecognized compensation expense, options | $ 2,795,000 | ||
Weighted average vesting period over which compensation expense is expected to be recognized | 1 year 8 months 12 days |
Share-based Payments, Restricte
Share-based Payments, Restricted Stock Units (Details) - Restricted Stock [Member] | 12 Months Ended | |
Mar. 31, 2018USD ($)Installment$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | |
Number of Shares [Roll Forward] | ||
Non-vested at beginning of period (in shares) | 126,277 | |
Granted (in shares) | 77,854 | 62,637 |
Vested (in shares) | (68,869) | |
Forfeited (in shares) | (1,434) | |
Non-vested at end of period (in shares) | 133,828 | 126,277 |
Weighted Average Grant Date Fair Value [Roll Forward] | ||
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 28.26 | |
Granted (in dollars per share) | $ / shares | 27.70 | |
Vested (in dollars per share) | $ / shares | 27.41 | |
Forfeited (in dollars per share) | $ / shares | 28.37 | |
Non-vested at end of period (in dollars per share) | $ / shares | $ 28.37 | $ 28.26 |
Estimated fair value of awards granted | $ | $ 2,157,000 | $ 1,774,000 |
Number of equal annual installments in which awards vest | Installment | 3 | |
Number of shares withheld (in shares) | 21,361 | 36,586 |
Total unrecognized compensation expense, restricted stock | $ | $ 2,648,000 | |
Weighted average vesting period over which compensation expense is expected to be recognized | 1 year 10 months 24 days |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - Common Stock [Member] | 12 Months Ended |
Mar. 31, 2018USD ($)shares | |
Equity, Class of Treasury Stock [Line Items] | |
Stock repurchase program, approved amount | $ 20,000,000 |
Shares utilized, amount | 11,630,000 |
Shares available for repurchase, amount | $ 8,370,000 |
Shares repurchased and retired (in shares) | shares | 511,746 |
Accumulated Other Comprehensi85
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | $ 248,681,000 | |
Other comprehensive income (loss), net of tax | 2,013,000 | $ (2,589,000) |
Amounts reclassified from other comprehensive income (loss), net of tax | 0 | 0 |
Ending balance | 274,976,000 | 248,681,000 |
AOCI Attributable to Parent [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (7,441,000) | (4,852,000) |
Ending balance | (5,428,000) | (7,441,000) |
Unrealized Gain (Loss) on Short-Term Investments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | 528,000 | 332,000 |
Other comprehensive income (loss), net of tax | 218,000 | 196,000 |
Amounts reclassified from other comprehensive income (loss), net of tax | 0 | 0 |
Ending balance | 746,000 | 528,000 |
Foreign Currency Translation [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (7,969,000) | (5,184,000) |
Other comprehensive income (loss), net of tax | 1,795,000 | (2,785,000) |
Amounts reclassified from other comprehensive income (loss), net of tax | 0 | 0 |
Ending balance | $ (6,174,000) | $ (7,969,000) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2018 | Jun. 05, 2018 | |
Letters of Credit [Member] | ||
Credit Facility [Abstract] | ||
Maximum borrowing capacity | $ 15,000,000 | |
Revolving Facility [Member] | ||
Credit Facility [Abstract] | ||
Maximum borrowing capacity | 120,000,000 | |
Term Loans [Member] | ||
Credit Facility [Abstract] | ||
Maximum borrowing capacity | $ 25,000,000 | |
New Credit Facility [Member] | ||
Credit Facility [Abstract] | ||
Debt instrument, maturity date | Jun. 5, 2023 | |
Subsequent Event [Member] | New Credit Facility [Member] | Revolving Facility [Member] | ||
Credit Facility [Abstract] | ||
Maximum borrowing capacity | $ 200,000,000 | |
Subsequent Event [Member] | New Credit Facility [Member] | Revolving Facility [Member] | Canadian Borrowers [Member] | ||
Credit Facility [Abstract] | ||
Maximum borrowing capacity | 20,000,000 | |
Subsequent Event [Member] | New Credit Facility [Member] | Revolving Facility [Member] | Letters of Credit [Member] | ||
Credit Facility [Abstract] | ||
Maximum borrowing capacity | 15,000,000 | |
Subsequent Event [Member] | New Credit Facility [Member] | Term Loans [Member] | ||
Credit Facility [Abstract] | ||
Maximum borrowing capacity | $ 30,000,000 |
Unaudited Quarterly Financial87
Unaudited Quarterly Financial Data (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Unaudited Quarterly Financial Data [Abstract] | |||||||||||
Net sales | $ 121,108,000 | $ 100,127,000 | $ 111,774,000 | $ 95,063,000 | $ 114,410,000 | $ 112,595,000 | $ 108,836,000 | $ 85,412,000 | $ 428,072,000 | $ 421,253,000 | $ 368,970,000 |
Cost of goods sold | 90,780,000 | 77,583,000 | 84,612,000 | 69,224,000 | 82,783,000 | 80,225,000 | 78,178,000 | 65,021,000 | 322,199,000 | 306,207,000 | 268,046,000 |
Gross profit | 30,328,000 | 22,544,000 | 27,162,000 | 25,839,000 | 31,627,000 | 32,370,000 | 30,658,000 | 20,391,000 | 105,873,000 | 115,046,000 | 100,924,000 |
Operating expenses [Abstract] | |||||||||||
General and administrative | 8,810,000 | 11,915,000 | 8,615,000 | 6,187,000 | 9,678,000 | 7,952,000 | 9,869,000 | 3,625,000 | 35,527,000 | 31,124,000 | 49,665,000 |
Sales and marketing | 4,131,000 | 4,048,000 | 3,457,000 | 3,394,000 | 3,551,000 | 3,234,000 | 2,707,000 | 2,634,000 | 15,030,000 | 12,126,000 | 9,965,000 |
Research and development | 1,772,000 | 1,678,000 | 1,240,000 | 1,002,000 | 1,011,000 | 1,039,000 | 905,000 | 869,000 | 5,692,000 | 3,824,000 | 3,008,000 |
Total operating expenses | 14,713,000 | 17,641,000 | 13,312,000 | 10,583,000 | 14,240,000 | 12,225,000 | 13,481,000 | 7,128,000 | 56,249,000 | 47,074,000 | 62,638,000 |
Operating income | 15,615,000 | 4,903,000 | 13,850,000 | 15,256,000 | 17,387,000 | 20,145,000 | 17,177,000 | 13,263,000 | 49,624,000 | 67,972,000 | 38,286,000 |
Other expense [Abstract] | |||||||||||
Interest expense, net | 4,656,000 | 3,953,000 | 3,522,000 | 3,314,000 | 3,729,000 | 3,357,000 | 3,189,000 | 2,819,000 | 15,445,000 | 13,094,000 | 16,244,000 |
Income before income tax expense | 10,959,000 | 950,000 | 10,328,000 | 11,942,000 | 13,658,000 | 16,788,000 | 13,988,000 | 10,444,000 | 34,179,000 | 54,878,000 | 22,042,000 |
Income tax expense | 1,764,000 | 7,756,000 | 4,027,000 | 4,316,000 | 3,846,000 | 5,678,000 | 4,845,000 | 2,936,000 | 17,863,000 | 17,305,000 | 11,479,000 |
Net income (loss) | $ 9,195,000 | $ (6,806,000) | $ 6,301,000 | $ 7,626,000 | $ 9,812,000 | $ 11,110,000 | $ 9,143,000 | $ 7,508,000 | $ 16,316,000 | $ 37,573,000 | $ 10,563,000 |
Basic net income (loss) per share (in dollars per share) | $ 0.48 | $ (0.36) | $ 0.34 | $ 0.41 | $ 0.53 | $ 0.59 | $ 0.49 | $ 0.40 | $ 0.87 | $ 2.02 | $ 0.58 |
Diluted net income (loss) per share (in dollars per share) | $ 0.47 | $ (0.36) | $ 0.33 | $ 0.39 | $ 0.50 | $ 0.57 | $ 0.47 | $ 0.39 | $ 0.84 | $ 1.93 | $ 0.55 |
Schedule II - Valuation and Q88
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | ||
Accounts Receivable - Allowance for Doubtful Accounts [Member] | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | $ 4,140,000 | $ 4,284,000 | $ 629,000 | |
Charged to cost and expense | 21,000 | 3,000 | 4,404,000 | |
Acquisition | 0 | 0 | 0 | |
Amounts written off | 19,000 | 147,000 | 749,000 | |
Balance at end of period | 4,142,000 | 4,140,000 | 4,284,000 | |
Accounts Receivable - Allowance for Customer-Payment Discrepancies [Member] | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | 751,000 | 703,000 | 852,000 | |
Charged to cost and expense | 998,000 | 718,000 | (299,000) | |
Acquisition | 0 | 0 | 0 | |
Amounts written off | 639,000 | 670,000 | (150,000) | |
Balance at end of period | 1,110,000 | 751,000 | 703,000 | |
Inventory - Allowance for Excess and Obsolete Inventory [Member] | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | 4,125,000 | 3,626,000 | 2,675,000 | |
Charged to cost and expense | 8,491,000 | 3,864,000 | 4,518,000 | |
Acquisition | 77,000 | [1] | 0 | 0 |
Amounts written off | 6,011,000 | 3,365,000 | 3,567,000 | |
Balance at end of period | $ 6,682,000 | $ 4,125,000 | $ 3,626,000 | |
[1] | Allowance for excess and obsolete inventory established in the opening balance sheet in connection with the Company's July 2017 acquisition. |