Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | ||
Sep. 30, 2014 | Oct. 21, 2014 | Oct. 21, 2014 | |
Class A Common Stock | Class B Common Stock | ||
Document Type | '10-Q | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 30-Sep-14 | ' | ' |
Document Fiscal Year Focus | '2015 | ' | ' |
Document Fiscal Period Focus | 'Q2 | ' | ' |
Entity Registrant Name | 'WESTELL TECHNOLOGIES INC | ' | ' |
Entity Central Index Key | '0001002135 | ' | ' |
Current Fiscal Year End Date | '--03-31 | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 46,249,064 | 13,937,151 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 | |
In Thousands, unless otherwise specified | |||
Current assets: | ' | ' | |
Cash and cash equivalents | $27,920 | $35,793 | |
Short-term investments | 20,370 | 15,584 | |
Accounts receivable (net of allowance of $33 and $40 at September 30, 2014, and March 31, 2014, respectively) | 11,925 | 15,831 | [1] |
Inventories | 22,263 | 24,056 | [1] |
Prepaid expenses and other current assets | 2,046 | 1,952 | [1] |
Deferred income taxes | 899 | 899 | |
Assets available-for-sale | 1,044 | 1,044 | |
Total current assets | 86,467 | 95,159 | [1] |
Property and equipment, gross | 18,801 | 17,902 | [1] |
Less accumulated depreciation and amortization | -16,204 | -16,001 | |
Property and equipment, net | 2,597 | 1,901 | [1] |
Goodwill | 20,783 | 31,338 | [1] |
Intangible assets, net | 29,023 | 32,319 | [1] |
Other non-current assets | 313 | 393 | |
Total assets | 139,183 | 161,110 | [1] |
Current liabilities: | ' | ' | |
Accounts payable | 6,598 | 7,067 | [1] |
Accrued expenses | 3,378 | 3,418 | |
Accrued compensation | 1,382 | 4,395 | |
Contingent consideration | 1,151 | 2,067 | |
Deferred revenue | 920 | 1,774 | |
Total current liabilities | 13,429 | 18,721 | [1] |
Deferred revenue non-current | 999 | 787 | |
Deferred income tax liability | 1,045 | 1,072 | |
Contingent consideration non-current | 622 | 574 | |
Other non-current liabilities | 546 | 528 | |
Total liabilities | 16,641 | 21,682 | [1] |
Commitments and contingencies (Note 11) | ' | ' | |
Stockholdersb equity: | ' | ' | |
Preferred stock, par $0.01, Authorized - 1,000,000 shares. Issued and outstanding - none | 0 | 0 | |
Additional paid-in capital | 411,440 | 410,176 | |
Treasury stock at cost b 17,346,855 and 17,130,965 shares at September 30, 2014, and March 31, 2014, respectively | -34,892 | -34,206 | |
Cumulative translation adjustment | 608 | 608 | |
Accumulated deficit | -255,215 | -237,748 | [1] |
Total stockholdersb equity | 122,542 | 139,428 | [1] |
Total liabilities and stockholdersb equity | 139,183 | 161,110 | [1] |
Class A Common Stock | ' | ' | |
Stockholdersb equity: | ' | ' | |
Common stock, value | 462 | 459 | |
Class B Common Stock | ' | ' | |
Stockholdersb equity: | ' | ' | |
Common stock, value | $139 | $139 | |
[1] | Certain amounts have been adjusted to reflect measurement period adjustments related to the CSI acquisition. |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Accounts receivable, allowance | $33 | $40 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock, shares | 17,346,855 | 17,130,965 |
Class A Common Stock | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 109,000,000 | 109,000,000 |
Common stock, shares outstanding | 46,249,064 | 45,852,740 |
Class B Common Stock | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 13,937,151 | 13,937,151 |
Common stock, shares outstanding | 13,937,151 | 13,937,151 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Income Statement [Abstract] | ' | ' | ' | ' | ||||
Revenue | $23,646 | $29,960 | $51,471 | $52,416 | ||||
Cost of revenue | 15,581 | 17,938 | [1] | 33,722 | 31,977 | [1] | ||
Gross profit | 8,065 | 12,022 | [1] | 17,749 | 20,439 | [1] | ||
Operating expenses: | ' | ' | ' | ' | ||||
Sales and marketing | 2,924 | 3,485 | [1] | 6,345 | 6,544 | [1] | ||
Research and development | 4,300 | 2,619 | 8,775 | 5,318 | ||||
General and administrative | 3,280 | 3,226 | 6,334 | 6,798 | ||||
Intangible amortization | 1,710 | 1,229 | 3,295 | 2,851 | ||||
Restructuring | -2 | 169 | 55 | 235 | ||||
Goodwill impairment | 10,555 | ' | 10,555 | ' | ||||
Total operating expenses | 22,767 | 10,728 | [1] | 35,359 | 21,746 | [1] | ||
Operating income (loss) | -14,702 | 1,294 | -17,610 | -1,307 | ||||
Other income (expense), net | -16 | 98 | 45 | -32 | ||||
Income (loss) before income taxes and discontinued operations | -14,718 | 1,392 | -17,565 | -1,339 | ||||
Income tax benefit (expense) | 69 | -68 | 98 | -87 | ||||
Net income (loss) from continuing operations | -14,649 | 1,324 | -17,467 | -1,426 | ||||
Discontinued Operations: | ' | ' | ' | ' | ||||
Income (loss) from discontinued operations, net of tax benefit | ' | 4 | ' | -10 | ||||
Net income (loss) (2) | ($14,649) | [2] | $1,328 | [2] | ($17,467) | [2] | ($1,436) | [2] |
Basic net loss per share: | ' | ' | ' | ' | ||||
Basic net loss from continuing operations | ($0.24) | $0.02 | ($0.29) | ($0.02) | ||||
Basic net loss from discontinued operations | $0 | $0 | $0 | $0 | ||||
Basic net loss per share | ($0.24) | $0.02 | ($0.29) | ($0.02) | ||||
Diluted net loss per share: | ' | ' | ' | ' | ||||
Diluted net loss from continuing operations | ($0.24) | $0.02 | ($0.29) | ($0.02) | ||||
Diluted net loss from discontinued operations | $0 | $0 | $0 | $0 | ||||
Diluted net loss per share | ($0.24) | $0.02 | ($0.29) | ($0.02) | ||||
Weighted-average number of common shares outstanding: | ' | ' | ' | ' | ||||
Basic | 59,924 | 58,681 | 59,819 | 58,601 | ||||
Effect of dilutive securities: restricted stock, restricted stock units, performance stock units and stock options(3) | 0 | [3] | 1,059 | [3] | 0 | [3] | 0 | [3] |
Diluted | 59,924 | 59,740 | 59,819 | 58,601 | ||||
[1] | Certain amounts have been reclassified to reflect a change in accounting principle. See Note 1. | |||||||
[2] | Net loss and comprehensive loss are the same for the periods reported. | |||||||
[3] | The Company had 0.7 million shares represented by options for the three months ended September 30, 2013, which were not included in the computation of average dilutive shares outstanding because there were anti-dilutive. In periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation. |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Operations Condensed Consolidated Statements of Operations Parenthetical (Unaudited) | 3 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Income Statement [Abstract] | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.7 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 6 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | ||
Cash flows from operating activities: | ' | ' | ||
Net loss | ($17,467) | [1] | ($1,436) | [1] |
Reconciliation of net loss to net cash used in operating activities: | ' | ' | ||
Depreciation and amortization | 3,755 | 3,148 | ||
Goodwill impairment | 10,555 | ' | ||
Stock-based compensation | 1,114 | 740 | ||
Loss on sale of fixed assets | ' | 3 | ||
Restructuring | 55 | 235 | ||
Deferred taxes | -28 | ' | ||
Exchange rate loss | 4 | 61 | ||
Changes in assets and liabilities: | ' | ' | ||
Accounts receivable | 3,890 | -10,455 | ||
Inventories | 1,793 | -402 | ||
Prepaid expenses and other current assets | -93 | 340 | ||
Other assets | 79 | 121 | ||
Deferred revenue | -642 | -1,179 | ||
Accounts payable and accrued expenses | -216 | 3,117 | ||
Accrued compensation | -3,013 | 1,380 | ||
Net cash used in operating activities | -214 | -4,327 | ||
Cash flows from investing activities: | ' | ' | ||
Maturities of held-to-maturity short-term debt securities | 11,647 | 19,231 | ||
Maturities of other short-term investments | 983 | 3,189 | ||
Purchases of held-to-maturity short-term debt securities | -12,541 | -9,408 | ||
Purchases of other short-term investments | -4,875 | -983 | ||
Purchases of property and equipment | -1,155 | -234 | ||
Acquisitions, net of cash acquired | -304 | -28,945 | ||
Changes in restricted cash | ' | 2,040 | ||
Net cash used in investing activities | -6,245 | -15,110 | ||
Cash flows from financing activities: | ' | ' | ||
Purchases of treasury stock | -688 | -297 | ||
Proceeds from stock options exercised | 155 | 269 | ||
Payment of contingent consideration | -879 | ' | ||
Net cash used in financing activities | -1,412 | -28 | ||
Loss of exchange rate changes on cash | -2 | -17 | ||
Net decrease in cash and cash equivalents | -7,873 | -19,482 | ||
Cash and cash equivalents, beginning of period | 35,793 | 88,233 | ||
Cash and cash equivalents, end of period | $27,920 | $68,751 | ||
[1] | Net loss and comprehensive loss are the same for the periods reported. |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||||||||||||||||||
Basis of Presentation | ' | ||||||||||||||||||||||||
Basis of Presentation | |||||||||||||||||||||||||
Description of Business | |||||||||||||||||||||||||
Westell Technologies, Inc. (the Company) is a holding company. Its wholly-owned subsidiary, Westell, Inc., designs and distributes telecommunications products which are sold primarily to major telephone companies. Noran Tel, Inc. is a wholly-owned subsidiary of Westell, Inc. Noran Tel's operations focus on power distribution product development and sales of Company products in Canada. On April 1, 2013, Westell, Inc. acquired 100% of the outstanding shares of Kentrox, Inc. (Kentrox). Kentrox designed and distributed intelligent site management solutions that provided comprehensive monitoring, management and control of any site. On March 1, 2014, Westell, Inc. acquired 100% of the outstanding shares of Cellular Specialties, Inc. (CSI). CSI designs and develops in-building wireless solutions including distributed antenna systems (DAS) products and small cell connectivity equipment. The assets and liabilities acquired and the results of operations relating to CSI are included in the Company's Condensed Consolidated Financial Statements from the date of acquisition. | |||||||||||||||||||||||||
Basis of Presentation and Reporting | |||||||||||||||||||||||||
The accompanying Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. The Condensed Consolidated Financial Statements have been prepared using generally accepted accounting principles (GAAP) in the United States for interim financial reporting, and consistent with the instructions of Form 10-Q and Article 10 of Regulation S-X, and accordingly they do not include all of the information and footnotes required in the annual consolidated financial statements and accompanying footnotes. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2014. All intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||||||||||||||
In the opinion of management, the unaudited interim financial statements included herein reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s condensed consolidated financial position and the results of operations, comprehensive income (loss) and cash flows at September 30, 2014, and for all periods presented. The results of operations for the periods presented are not necessarily indicative of the results that may be expected for fiscal year 2015. | |||||||||||||||||||||||||
Use of Estimates | |||||||||||||||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and that affect revenue and expenses during the periods reported. Estimates are used when accounting for the allowance for uncollectible accounts receivable, net realizable value of inventory, product warranty accrued, relative selling prices, stock-based compensation, goodwill and intangible assets fair value, depreciation, income taxes, and contingencies, among other things. Actual results could differ from those estimates. | |||||||||||||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||||||||||
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue From Contracts With Customers, that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The ASU is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. The ASU becomes effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period; early adoption is not permitted. The Company is currently assessing the impact that this standard will have on its Consolidated Financial Statements. | |||||||||||||||||||||||||
Update to Significant Accounting Policies | |||||||||||||||||||||||||
A complete description of the Company’s significant accounting policies is discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2014. There have been no material changes in our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended March 31, 2014, except as set forth below. | |||||||||||||||||||||||||
Voluntary Change in Accounting Principle | |||||||||||||||||||||||||
Effective April 1, 2014, the Company made a voluntary change in accounting principle to classify shipping and handling costs associated with the distribution of finished product to our customers as cost of revenue (previously recorded in sales and marketing expense). The Company made the voluntary change in principle because it believes the classification of shipping and handling costs in cost of revenue better reflects the cost of producing and distributing products. It also enhances the comparability of the financial statements with many industry peers. As required by U.S. generally accepted accounting principles, the change has been reflected in the Condensed Consolidated Statements of Operations through retrospective application of the change in accounting principle. | |||||||||||||||||||||||||
The following table provides the reconciliation from previously reported financial data as adjusted: | |||||||||||||||||||||||||
Three months ended September 30, 2013 | Six months ended September 30, 2013 | ||||||||||||||||||||||||
(in thousands) | Previously reported | Effect of Accounting Principle Change | Adjusted | Previously reported | Effect of Accounting Principle Change | Adjusted | |||||||||||||||||||
Revenue | $ | 29,960 | $ | — | $ | 29,960 | $ | 52,416 | $ | — | $ | 52,416 | |||||||||||||
Cost of revenue | 17,537 | 401 | 17,938 | 31,217 | 760 | 31,977 | |||||||||||||||||||
Gross profit | $ | 12,423 | $ | (401 | ) | $ | 12,022 | $ | 21,199 | $ | (760 | ) | $ | 20,439 | |||||||||||
Gross margin | 41.5 | % | 40.1 | % | 40.4 | % | 39 | % | |||||||||||||||||
Sales and marketing | $ | 3,886 | $ | (401 | ) | $ | 3,485 | $ | 7,304 | $ | (760 | ) | $ | 6,544 | |||||||||||
The impact of this change in accounting principle was an increase to cost of revenue and a reduction to sales and marketing expense of $401,000 and $760,000 in the three and six months ended September 30, 2013, respectively. Gross profit and gross profit percentage were reduced accordingly. The amount included in cost of sales that would have been included in sales and marketing historically, was $245,000 and $500,000 for the three and six months ended September 30, 2014, respectively. The change had no effect on income from continuing operations, net income, earnings per share, or retained earnings for any period. | |||||||||||||||||||||||||
Reclassifications | |||||||||||||||||||||||||
In addition to the reclassification of shipping and handling costs disclosed above, certain amounts in the Condensed Consolidated Financial Statements for prior periods have been reclassified to reflect measurement period adjustments related to the CSI acquisition (See Note 2). |
Acquisitions
Acquisitions | 6 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Business Combinations [Abstract] | ' | |||||||||||
Business Combination Disclosure [Text Block] | ' | |||||||||||
Acquisition | ||||||||||||
CSI Acquisition | ||||||||||||
On March 1, 2014, the Company's wholly-owned subsidiary, Westell, Inc. acquired 100% of the outstanding shares of CSI for a purchase price of $39.0 million in cash plus a $5.0 million working capital adjustment. CSI is an innovator of in-building wireless connectivity solutions for 3G/4G cellular services, enabling coverage anytime, anywhere. ClearLink, CSI’s high performance, low Passive Intermodulation Distortion (PIM) brand of in-building products are designed for distributed antenna systems and small cells. ClearLink products include Universal DAS interface Trays (UDIT), passive DAS interface units, system components, and antennas. CSI’s portfolio also includes digital repeaters and E911 and location-based enhancement solutions for wireless networks. | ||||||||||||
The Company incurred $39,000 and $0.2 million of related acquisition costs, which were expensed as incurred and reflected in general and administrative costs in the Condensed Consolidated Statement of Operations for the six months ended September 30, 2014, and twelve months ended March 31, 2014, respectively. | ||||||||||||
The results of CSI's operations have been included in the Condensed Consolidated Financial Statements since the date of acquisition and are reported within the In-Building Wireless (IBW) reporting segment (See Note 5). CSI contributed $8.6 million and $17.8 million to revenue and $0.7 million and $0.9 million to operating loss in the three and six months ended September 30, 2014, respectively. Operating loss reflects amortization of intangibles based on the estimated fair value of assets acquired. | ||||||||||||
In accordance with the acquisition method of accounting for business combinations, the Company preliminarily allocated the total purchase consideration transferred to identifiable tangible and intangible assets acquired and liabilities assumed at the acquisition date based on each element’s estimated fair value with the remaining unallocated amounts recorded as goodwill. Certain estimated values are not yet finalized and are subject to change, which could be significant. Specifically, amounts for intangible assets, deferred income taxes, and other items are pending finalization of valuation efforts. Purchased intangibles will be amortized over their respective estimated useful lives. Goodwill represents the expected synergies and other benefits from this acquisition that relates to the Company’s market position, customer relationships and supply chain capabilities. Goodwill recorded on the CSI acquisition is not expected to be amortized or deductible for U.S. federal and state income tax purposes. The goodwill from the CSI acquisition is included in the IBW reporting unit. | ||||||||||||
The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed as of the March 1, 2014, acquisition date: | ||||||||||||
(in thousands) | Preliminary Amounts Recognized as of Acquisition | Measurement Period Adjustments | Adjusted Preliminary Amounts Recognized | |||||||||
Date (1) | ||||||||||||
Cash | $ | 6,513 | $ | — | $ | 6,513 | ||||||
Accounts receivable | 2,920 | (20 | ) | (c) | 2,900 | |||||||
Inventories | 7,625 | (242 | ) | (c) | 7,383 | |||||||
Prepaid expenses and other current assets | 158 | (23 | ) | (c) | 135 | |||||||
Property and equipment | 816 | (45 | ) | (c) | 771 | |||||||
Intangible assets | 16,230 | (57 | ) | (a) | 16,173 | |||||||
Accounts payable, accruals and other liabilities | (2,875 | ) | (37 | ) | (c) | (2,912 | ) | |||||
Income tax payable | (1,175 | ) | — | (1,175 | ) | |||||||
Deferred income tax liability | (6,616 | ) | 87 | (a) | (6,529 | ) | ||||||
Goodwill | 20,142 | 641 | 20,783 | |||||||||
Total Consideration | $ | 43,738 | $ | 304 | (b) | $ | 44,042 | |||||
(1) As previously reported in the Notes to the Consolidated Financial Statements included in our 2014 Form 10-K. | ||||||||||||
(a) Intangible asset fair value adjustment for trade name and related tax effect | ||||||||||||
(b) Payment for final working capital adjustment | ||||||||||||
(c) Other measurement period adjustments mostly related to inventory adjustments | ||||||||||||
Under ASC 805, Business Combinations (ASC 805), the Company is required to recognize adjustments to provisional amounts during the measurement period as they are identified, and to recognize such adjustments retrospectively, as if the accounting for the business combination had been completed at the acquisition date. The March 31, 2014, balance sheet has been adjusted to reflect the measurement period adjustments including the working capital adjustment which was included in accounts payable. | ||||||||||||
The following table summarizes the acquired identified intangible assets, the respective fair value, and estimated useful life at the date of acquisition: | ||||||||||||
(in thousands) | Fair Value | Estimated Life | ||||||||||
Backlog | $ | 90 | 1 month | |||||||||
Customer relationships | 11,410 | 9 years | ||||||||||
Trademark | 303 | 1 year | ||||||||||
Developed technology | 3,860 | 3 years | ||||||||||
Non-compete | 510 | 2 years | ||||||||||
Total intangible assets | $ | 16,173 | ||||||||||
The following unaudited summary information is presented on a consolidated pro forma basis as if the CSI acquisition had occurred on April 1, 2012. The pro forma amounts reflect the accounting effects of the business combination, including the application of the Company's accounting policies, amortization of intangible assets based on the estimated fair value and the impact of other fair value purchase accounting impacts such as inventory valuation step-up. The pro forma results are based on historical information and is not necessarily indicative of the combined results had the acquisition been completed at April 1, 2012, nor are they indicative of future combined results. | ||||||||||||
(in thousands) | Three months ended September 30, 2013 | Six months ended September 30, 2013 | ||||||||||
Consolidated pro forma revenue | $ | 41,992 | $ | 73,366 | ||||||||
Consolidated pro forma operating income | $ | 4,924 | $ | 4,109 | ||||||||
Goodwill_and_Intangibles_Goodw
Goodwill and Intangibles Goodwill and Intangibles | 6 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Text Block] | ' | |||||||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||||||||
The Company had $20.8 million of goodwill in the IBW reporting unit from the acquisition of CSI as of September 30, 2014. The Company has recorded intangible assets, such as goodwill, trademark, developed technology, non-compete agreements, backlog, and customer relationships, and accounts for these in accordance with ASC 350 Intangibles-Goodwill and Other (ASC 350). ASC 350 requires an annual test of goodwill and indefinite-lived assets for impairment, unless circumstances dictate more frequent assessments. | ||||||||||||||||||||
Continued deterioration in macroeconomic conditions, decline in market capitalization, continued operating losses, lower forecasted revenue and cash flows, and the overall decline in the Company’s net sales during the quarter, indicated that it was more likely than not that the fair value of certain reporting units was reduced to below the respective carrying amount. As a result, in connection with the preparation of the financial statements for the quarter ended September 30, 2014, the Company considered these factors as a triggering event and performed an interim evaluation of goodwill using a two-step quantitative assessment. The first step compared the fair value of the reporting units with the carrying value as of September 1, 2014. The IBW reporting unit's fair value was approximately 12% greater than its carrying value. The IBW reporting unit had a goodwill balance of $20.8 million as of September 30, 2014. The CSG reporting unit's fair value was below its carrying value therefore the Company completed the second step of the evaluation, which compares the implied fair value of goodwill with the carrying value of goodwill to determine the amount of the impairment loss. Fair value of the reporting unit was determined using a combination of income and market approaches. Determining the fair value of the reporting unit and the allocation of that fair value to individual assets and liabilities within the reporting unit to determine the implied fair value of the goodwill is judgmental in nature and requires the use of significant estimates and assumptions. These estimates and assumptions include discount rate, terminal growth rate, selection of peer group companies and control premium applied as well as forecasts of revenue growth rates, gross margins, operating margins, and working capital requirements. The allocation requires analysis to determine the fair value of assets and liabilities including, among others, customer relationships, trade names, and property and equipment. Any changes in the judgments, estimates, or assumptions used could produce significantly different results. As a result of that goodwill impairment evaluation, a goodwill impairment charge of $10.6 million was recorded in the quarter ended September 30, 2014. This charge was comprised of 100% of the goodwill for the CSG segment. Persistent negative market conditions and financial results could result in additional goodwill impairment. | ||||||||||||||||||||
The following table is a summary of the goodwill balance for each reporting unit of September 30, 2014: | ||||||||||||||||||||
Kentrox | CSI | CSG | IBW | Total | ||||||||||||||||
Adjusted net goodwill as of March 31, 2014 | $10,555 | $20,783 | $ | — | $ | — | $31,338 | |||||||||||||
First quarter fiscal 2015 change in reporting units | (10,555 | ) | (20,783 | ) | 10,555 | 20,783 | — | |||||||||||||
Impairment charge | — | — | (10,555 | ) | — | (10,555 | ) | |||||||||||||
Net goodwill as of September 30, 2014 | $ | — | $ | — | $ | — | $ | 20,783 | $ | 20,783 | ||||||||||
Intangible assets include customer relationships, trade names, developed technology and other intangibles. Intangible assets with determinable lives are amortized over the estimated useful lives of the assets. These intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying amount over its fair value. | ||||||||||||||||||||
In the second quarter of fiscal 2015 due to the indication of impairment noted above, the Company reviewed finite-lived assets for impairment and found that a product technology asset related to the 2007 acquisition of Noran Tel, Inc. was impaired. An impairment loss of $0.1 million was recorded in the CSG segment reducing that asset to zero. |
Restructuring_Charge
Restructuring Charge | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Restructuring Charges [Abstract] | ' | |||||||
Restructuring Charge | ' | |||||||
Restructuring Charge | ||||||||
In the first quarter of fiscal year 2014, the Company acquired Kentrox and identified redundant employees who exited the business after a period of time. The Company recognized a restructuring benefit of $2,000 and restructuring expense of $55,000 in the three and six months ended September 30, 2014 and restructuring expense of $169,000 and $235,000 in the three and six months ended September 30, 2013, respectively, for severance for these transitional employees. The total cost of this action was $390,000. As of March 31, 2014, $57,000 was unpaid and accrued on the Condensed Consolidated Balance Sheets within Accrued compensation. | ||||||||
Total restructuring charges and their utilization for the six months ended September 30, 2014, and 2013, are summarized as follows: | ||||||||
Six months ended September 30, 2014 | Six months ended September 30, 2013 | |||||||
(in thousands) | Employee-related | Employee-related | ||||||
Liability at beginning of period | $ | 57 | $ | 6 | ||||
Charged | 55 | 235 | ||||||
Paid | (112 | ) | (146 | ) | ||||
Liability at end of period | $ | — | $ | 95 | ||||
Interim_Segment_Information
Interim Segment Information | 6 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Interim Segment Information | ' | ||||||||||||
Interim Segment Information | |||||||||||||
Westell’s Chief Executive Officer is the chief operating decision maker (CODM). In the first quarter of fiscal 2015, the Company revised its segment reporting structure to realign internal reporting as a result of the full integration of Kentrox into Westell, and the recent CSI acquisition. The CODM continues to define segment profit as gross profit less research and development expenses. In order to provide information that is comparable year to year, fiscal year 2014 segment information has been restated to reflect the new reporting structure. The accounting policies of the segments are the same as those for Westell Technologies, Inc. described in the summary of significant accounting policies. | |||||||||||||
The Company’s two reportable segments are as follows: | |||||||||||||
Communication Solutions Group (CSG) Segment | |||||||||||||
The CSG segment consists of all the intelligent site management, cell site optimization, and outside plant solutions product offerings. CSG segment products and solutions are developed at the Company’s design centers in Dublin, Ohio; Aurora, Illinois; Goleta, California; and Regina, Canada. The CSG operations are managed centrally at the Aurora facility, where products are assembled, tested, packaged, and shipped to customers. | |||||||||||||
In-Building Wireless (IBW) Segment | |||||||||||||
The IBW segment consists of all the in-building wireless solutions products, which include the comprehensive suite of products and solutions acquired with the addition of CSI, as well as the Westell developed DAS interface panels. IBW segment products and solutions are developed at the Company’s design center in Manchester, New Hampshire. IBW operations are managed centrally at our Manchester facility, where products other than the Westell developed DAS panels, are assembled, tested, packaged, and shipped to customers. The Westell developed DAS panels are assembled, tested, packaged, and shipped from Aurora, Illinois. | |||||||||||||
Segment information for the three and six months ended September 30, 2014, and 2013 is set forth below: | |||||||||||||
Three months ended September 30, 2014 | |||||||||||||
(in thousands) | CSG | IBW | Total | ||||||||||
Revenue | $ | 12,525 | $ | 11,121 | $ | 23,646 | |||||||
Cost of revenue | 8,828 | 6,753 | 15,581 | ||||||||||
Gross profit | 3,697 | 4,368 | 8,065 | ||||||||||
Gross margin | 29.5 | % | 39.3 | % | 34.1 | % | |||||||
Research and development | 2,197 | 2,103 | 4,300 | ||||||||||
Segment profit | $ | 1,500 | $ | 2,265 | 3,765 | ||||||||
Operating expenses: | |||||||||||||
Sales and marketing | 2,924 | ||||||||||||
General and administrative | 3,280 | ||||||||||||
Intangible amortization | 1,710 | ||||||||||||
Restructuring | (2 | ) | |||||||||||
Goodwill impairment | 10,555 | ||||||||||||
Operating income (loss) | (14,702 | ) | |||||||||||
Other income (expense), net | (16 | ) | |||||||||||
Income tax benefit (expense) | 69 | ||||||||||||
Net income (loss) from continuing operations | $ | (14,649 | ) | ||||||||||
Three months ended September 30, 2013 | |||||||||||||
(in thousands) | CSG | IBW | Total | ||||||||||
Revenue | $ | 27,920 | $ | 2,040 | $ | 29,960 | |||||||
Cost of revenue | 16,633 | 1,305 | 17,938 | ||||||||||
Gross profit | 11,287 | 735 | 12,022 | ||||||||||
Gross margin | 40.4 | % | 36 | % | 40.1 | % | |||||||
Research and development | 2,438 | 181 | 2,619 | ||||||||||
Segment profit | $ | 8,849 | $ | 554 | 9,403 | ||||||||
Operating expenses: | |||||||||||||
Sales and marketing | 3,485 | ||||||||||||
General and administrative | 3,226 | ||||||||||||
Intangible amortization | 1,229 | ||||||||||||
Restructuring | 169 | ||||||||||||
Operating income (loss) | 1,294 | ||||||||||||
Other income (expense), net | 98 | ||||||||||||
Income tax benefit (expense) | (68 | ) | |||||||||||
Net income (loss) from continuing operations | $ | 1,324 | |||||||||||
Six months ended September 30, 2014 | |||||||||||||
(in thousands) | CSG | IBW | Total | ||||||||||
Revenue | $ | 26,253 | $ | 25,218 | $ | 51,471 | |||||||
Cost of revenue | 18,683 | 15,039 | 33,722 | ||||||||||
Gross profit | 7,570 | 10,179 | 17,749 | ||||||||||
Gross margin | 28.8 | % | 40.4 | % | 34.5 | % | |||||||
Research and development | 4,477 | 4,298 | 8,775 | ||||||||||
Segment profit | $ | 3,093 | $ | 5,881 | 8,974 | ||||||||
Operating expenses: | |||||||||||||
Sales and marketing | 6,345 | ||||||||||||
General and administrative | 6,334 | ||||||||||||
Intangible amortization | 3,295 | ||||||||||||
Restructuring | 55 | ||||||||||||
Goodwill impairment | 10,555 | ||||||||||||
Operating income (loss) | (17,610 | ) | |||||||||||
Other income (expense), net | 45 | ||||||||||||
Income tax benefit (expense) | 98 | ||||||||||||
Net income (loss) from continuing operations | $ | (17,467 | ) | ||||||||||
Six months ended September 30, 2013 | |||||||||||||
(in thousands) | CSG | IBW | Total | ||||||||||
Revenue | $ | 49,349 | $ | 3,067 | $ | 52,416 | |||||||
Cost of revenue | 29,940 | 2,037 | 31,977 | ||||||||||
Gross profit | 19,409 | 1,030 | 20,439 | ||||||||||
Gross margin | 39.3 | % | 33.6 | % | 39 | % | |||||||
Research and development | 4,945 | 373 | 5,318 | ||||||||||
Segment profit | $ | 14,464 | $ | 657 | 15,121 | ||||||||
Operating expenses: | |||||||||||||
Sales and marketing | 6,544 | ||||||||||||
General and administrative | 6,798 | ||||||||||||
Intangible amortization | 2,851 | ||||||||||||
Restructuring | 235 | ||||||||||||
Operating income (loss) | (1,307 | ) | |||||||||||
Other income (expense), net | (32 | ) | |||||||||||
Income tax benefit (expense) | (87 | ) | |||||||||||
Net income (loss) from continuing operations | $ | (1,426 | ) | ||||||||||
Asset information, although available, is not reported to or used by the CODM. |
Inventories
Inventories | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventory, Net [Abstract] | ' | |||||||
Inventories | ' | |||||||
Inventories | ||||||||
Inventories are stated at the lower of first-in, first-out cost or market value. The components of inventories are as follows: | ||||||||
(in thousands) | September 30, 2014 | 31-Mar-14 | ||||||
Raw materials | $ | 11,487 | $ | 11,031 | ||||
Finished goods and sub-assemblies | 10,776 | 13,025 | ||||||
Total inventories | $ | 22,263 | $ | 24,056 | ||||
StockBased_Compensation
Stock-Based Compensation | 6 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Share-based Compensation [Abstract] | ' | |||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||
Stock-Based Compensation | ||||||||||||||||
The following table is a summary of total stock-based compensation resulting from stock options, restricted stock, restricted stock units (RSUs) and performance stock units (PSUs), during the three and six months ended September 30, 2014, and 2013: | ||||||||||||||||
Three months ended September 30, | Six months ended September 30, | |||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Stock-based compensation expense | $ | 560 | $ | 389 | $ | 1,114 | $ | 740 | ||||||||
Income tax expense | — | — | — | — | ||||||||||||
Total stock-based compensation expense after taxes | $ | 560 | $ | 389 | $ | 1,114 | $ | 740 | ||||||||
The stock options, restricted stock awards, and RSUs awarded in the six months ended September 30, 2014, vest in equal annual installments over four years. PSUs earned vest over the performance period, as described below. On September 16, 2014, the Board of Directors modified the vesting provisions on all outstanding non-employee director restricted stock awards to include an accelerated vesting provision triggered upon a termination of service as a director following a failure to be nominated by the Board of Directors for re-election as a director. As a result of that modification, the requisite service period on all unvested restricted stock was shortened to the next expected nomination date in July 2015. As a result of this modification, the Company recorded incremental stock-based compensation expense of $88,000 during the three months ended September 30, 2014. | ||||||||||||||||
Stock Options | ||||||||||||||||
Stock option activity for the six months ended September 30, 2014, is as follows: | ||||||||||||||||
Shares | Weighted-Average | Weighted-Average | Aggregate | |||||||||||||
Exercise Price Per | Remaining | Intrinsic Value (a) (in | ||||||||||||||
Share | Contractual Term | thousands) | ||||||||||||||
(in years) | ||||||||||||||||
Outstanding on March 31, 2014 | 1,835,445 | $ | 2.02 | 3.7 | $ | 3,110 | ||||||||||
Granted | 40,000 | 3.47 | ||||||||||||||
Exercised | (69,200 | ) | 2.24 | |||||||||||||
Forfeited | (172,500 | ) | 2.35 | |||||||||||||
Expired | (177,930 | ) | 2.82 | |||||||||||||
Outstanding on September 30, 2014 | 1,455,815 | $ | 1.91 | 3.4 | $ | 566 | ||||||||||
(a) | The intrinsic value for the stock options is calculated based on the difference between the exercise price of the underlying awards and the average of the high and low Westell Technologies’ stock price as of the reporting date. | |||||||||||||||
The weighted-average fair value of stock options granted during the six months ended September 30, 2014, was $1.27 per share. | ||||||||||||||||
Restricted Stock | ||||||||||||||||
The following table sets forth restricted stock activity for the six months ended September 30, 2014: | ||||||||||||||||
Shares | Weighted-Average | |||||||||||||||
Grant Date Fair | ||||||||||||||||
Value | ||||||||||||||||
Non-vested as of March 31, 2014 | 407,500 | $ | 1.94 | |||||||||||||
Granted | 100,000 | 3.53 | ||||||||||||||
Vested | (332,500 | ) | 1.87 | |||||||||||||
Forfeited | — | — | ||||||||||||||
Non-vested as of September 30, 2014 | 175,000 | $ | 2.99 | |||||||||||||
RSUs | ||||||||||||||||
The following table sets forth the RSU activity for the six months ended September 30, 2014: | ||||||||||||||||
Shares | Weighted-Average | |||||||||||||||
Grant Date Fair | ||||||||||||||||
Value | ||||||||||||||||
Non-vested as of March 31, 2014 | 1,679,000 | $ | 3.09 | |||||||||||||
Granted | 304,500 | 3.45 | ||||||||||||||
Vested | (376,250 | ) | 2.69 | |||||||||||||
Forfeited | (319,000 | ) | 2.74 | |||||||||||||
Non-vested as of September 30, 2014 | 1,288,250 | $ | 3.38 | |||||||||||||
PSUs | ||||||||||||||||
The PSUs vest in annual increments based on the achievement of pre-established Company performance goals and continued employment. The number of PSUs earned, if any, can range from 0% to 200% of the target amount, depending on actual performance for four fiscal years following the grant date. Upon vesting, the PSUs convert into shares of Class A Common Stock on a one-for-one basis. | ||||||||||||||||
The following table sets forth the PSU activity for the six months ended September 30, 2014: | ||||||||||||||||
Shares | Weighted-Average Grant Date Fair Value | |||||||||||||||
Non-vested as of March 31, 2014 | 285,000 | $ | 2.45 | |||||||||||||
Granted, at target | 217,500 | 3.83 | ||||||||||||||
Vested | (66,764 | ) | 2.45 | |||||||||||||
Forfeited | (102,431 | ) | 3.04 | |||||||||||||
Non-vested as of September 30, 2014 | 333,305 | $ | 3.16 | |||||||||||||
Product_Warranties
Product Warranties | 6 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Product Warranties Disclosures [Abstract] | ' | |||||||||||||||
Product Warranties | ' | |||||||||||||||
Product Warranties | ||||||||||||||||
The Company’s products carry a limited warranty ranging from one to seven years for the products within the CSG segment and one to five years for products within the IBW segment. The specific terms and conditions of those warranties vary depending upon the customer and the products sold. Factors that enter into the estimate of the Company’s warranty reserve include: the number of units shipped, anticipated rates of warranty claims, and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the reserve as necessary. The current portions of the warranty reserve were $536,000 and $286,000 as of September 30, 2014, and March 31, 2014, respectively, and are presented on the Condensed Consolidated Balance Sheets as Accrued expenses. The non-current portions of the warranty reserve were $130,000 and $42,000 as of September 30, 2014, and March 31, 2014, respectively, and are presented on the Condensed Consolidated Balance Sheets in Other non-current liabilities. | ||||||||||||||||
The following table presents the changes in the Company’s product warranty reserve: | ||||||||||||||||
Three months ended September 30, | Six months ended September 30, | |||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Total product warranty reserve at the beginning of the | $ | 424 | $ | 214 | $ | 328 | $ | 152 | ||||||||
period | ||||||||||||||||
Warranty reserve from business acquisitions | — | — | — | 54 | ||||||||||||
Warranty expense | 288 | 251 | 410 | 270 | ||||||||||||
Utilization | (46 | ) | (140 | ) | (72 | ) | (151 | ) | ||||||||
Total product warranty reserve at the end of the period | $ | 666 | $ | 325 | $ | 666 | $ | 325 | ||||||||
Variable_Interest_Entity_and_G
Variable Interest Entity and Guarantee | 6 Months Ended |
Sep. 30, 2014 | |
Guarantees [Abstract] | ' |
Equity Method Investment [Text Block] | ' |
Variable Interest Entity and Guarantee | |
The Company has a 50% equity ownership in AccessTel Kentrox Australia PTY LTD (AKA). AKA distributes network management solutions provided by the Company and the other 50% owner to one customer. The Company holds equal voting control with the other owner. All actions of AKA are decided at the board level by majority vote. The Company evaluated ASC topic 810, Consolidations, and concluded that AKA is a variable interest entity (VIE). The Company has concluded that it is not the primary beneficiary of AKA and therefore consolidation is not required. As of September 30, 2014, and March 31, 2014, the carrying amount of the Company's investment in AKA was approximately $93,000 and $84,000, respectively, which is presented on the Condensed Consolidated Balance Sheets within Other non-current assets. | |
The Company's revenue from sales to AKA for the three and six months ended September 30, 2014 was $0.9 million and $1.1 million, respectively. The Company's revenue from sales to AKA for the three and six months ended September 30, 2013, was $1.3 million and $2.6 million, respectively. Accounts receivable from AKA was $0.2 million and $0.4 million as of September 30, 2014, and March 31, 2014, respectively. Deferred revenue relating to AKA maintenance contracts was $1.1 million as of September 30, 2014, and $1.0 million as of March 31, 2014. The Company also has an unlimited guarantee for the performance of the other 50% owner in AKA, which primarily provides support and engineering services to the customer. This guarantee was put in place at the request of the AKA customer. The guarantee, which is estimated to have a maximum potential future payment of $0.7 million, will stay in place as long as the contract between AKA and the customer is in place. The Company would have recourse against the other 50% owner in AKA in the event the guarantee is triggered. The Company determined that it could perform on the obligation it guaranteed at a positive rate of return and therefore did not assign value to the guarantee. The Company's exposure to loss as a result of its involvement with AKA, exclusive of lost profits, is limited to the items noted above. |
Income_Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Income Taxes | |
At the end of each interim period, the Company makes its best estimate of the effective tax rate expected to be applicable for the full fiscal year and uses that rate to provide for income taxes on a current year-to-date basis before discrete items. If a reliable estimate cannot be made, the Company may make a reasonable estimate of the annual effective tax rate, including use of the actual effective rate for the year-to-date. The impact of discrete items is recorded in the quarter in which they occur. The Company utilizes the liability method of accounting for income taxes and deferred taxes which are determined based on the differences between the financial statements and tax basis of assets and liabilities given the enacted tax laws. The Company evaluates the need for valuation allowances on the net deferred tax assets under the rules of ASC 740 Income Taxes. In assessing the realizability of the Company's deferred tax assets, the Company considered whether it is more likely than not that some or all of the deferred tax assets will be realized though the generation of future taxable income. In making this determination, the Company assessed all of the evidence available at the time including recent earnings, forecasted income projections and historical performance. In fiscal year 2013, the Company determined that the negative evidence outweighed the objectively verifiable positive evidence and recorded a full valuation allowance against deferred tax assets. The Company will continue to reassess realizability going forward. | |
The Company recorded $69,000 and $98,000 of income tax benefit in the three and six months ended September 30, 2014, using an effective income tax rate of 0.5% and 0.6%, respectively. The Company recorded $68,000 and $87,000 of income tax expense in the three and six months ended September 30, 2013, using an effective rate of 4.9% and (6.5)%, respectively. The effective rate is impacted by states which base tax on gross margin and not pre-tax income. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | |||||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||||||||||||||||||||||
Commitments and Contingencies | ' | |||||||||||||||||||||||||||
Commitments and Contingencies | ||||||||||||||||||||||||||||
Obligations | ||||||||||||||||||||||||||||
Future obligations and commitments, which are comprised of future minimum lease payments, inventory purchase obligations, and contingent consideration decreased $0.8 million in the six months ended September 30, 2014, to $22.9 million, from $23.7 million at March 31, 2014. This decrease included a $0.9 million payment of contingent consideration. | ||||||||||||||||||||||||||||
Purchase obligations consist of inventory that arises in the normal course of business operations. Future obligations and commitments as of September 30, 2014, consisted of the following: | ||||||||||||||||||||||||||||
Payments due within | ||||||||||||||||||||||||||||
(in thousands) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Thereafter | Total | |||||||||||||||||||||
Purchase obligations | $ | 12,613 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 12,613 | ||||||||||||||
Future minimum operating lease | 3,199 | 2,699 | 2,149 | 374 | 116 | — | 8,537 | |||||||||||||||||||||
payments | ||||||||||||||||||||||||||||
Contingent consideration | 1,151 | 622 | — | — | — | — | 1,773 | |||||||||||||||||||||
Future obligations and | $ | 16,963 | $ | 3,321 | $ | 2,149 | $ | 374 | $ | 116 | $ | — | $ | 22,923 | ||||||||||||||
commitments | ||||||||||||||||||||||||||||
Litigation and Contingency Reserves | ||||||||||||||||||||||||||||
The Company and its subsidiaries are involved in various assertions, claims, proceedings and requests for indemnification concerning intellectual property, including patent infringement suits involving technologies that may be incorporated in the Company’s products, which are being handled and defended in the ordinary course of business. These matters are in various stages of investigation and litigation, and they are being vigorously defended. Although the Company does not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial condition or results of operations, litigation is inherently unpredictable. Therefore, judgments could be rendered, or settlements entered, that could adversely affect the Company’s operating results or cash flows in a particular period. The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and it records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable. As of September 30, 2014, and March 31, 2014, the Company has not recorded any contingent liability attributable to existing litigation. | ||||||||||||||||||||||||||||
As of both September 30, 2014, and March 31, 2014, the Company had total contingency reserves of $0.7 million, related to the discontinued operations of ConferencePlus which was sold in fiscal year 2012. The contingency reserves are classified as accrued expenses on the Consolidated Balance Sheets. In fiscal year 2014, the Company paid $1.1 million relating to a ConferencePlus indemnification claim. | ||||||||||||||||||||||||||||
Additionally, the Company has a contingent cash consideration payable related to an acquisition. The contingent consideration becomes payable based upon the profitability of the acquired products for post-closing periods through June 30, 2016, and is offset by working capital adjustments and other indemnification claims. The maximum earn-out that could be paid before offsets is $3.5 million. As of September 30, 2014, and March 31, 2014, the fair value of the contingent consideration liability after offsetting a working capital adjustment and an indemnification claim for warranty obligations was $1.8 million and $2.6 million, respectively (See Note 13). |
Shortterm_Investments
Short-term Investments | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Short-term Investments [Abstract] | ' | |||||||
Short-term Investments | ' | |||||||
Short-term Investments | ||||||||
The following table presents short-term investments as of September 30, 2014, and March 31, 2014: | ||||||||
(in thousands) | September 30, 2014 | March 31, 2014 | ||||||
Certificates of deposit | $ | 5,368 | $ | 1,476 | ||||
Held-to-maturity, pre-refunded municipal bonds | 15,002 | 14,108 | ||||||
Total short-term investments | $ | 20,370 | $ | 15,584 | ||||
The fair value of investments approximates their carrying amounts due to the short-term nature of these financial assets. |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Fair Value Measurements | |||||||||||||||||
Fair value is defined by ASC 820 as the price that would be received upon selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: | |||||||||||||||||
• | Level 1 – Quoted prices in active markets for identical assets and liabilities. | ||||||||||||||||
• | Level 2 – Quoted prices in active markets for similar assets and liabilities, 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 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. | ||||||||||||||||
The Company’s money market funds are measured using Level 1 inputs. The contingent consideration described in Note 11 is measured using Level 3 inputs. | |||||||||||||||||
The following table presents financial assets and non-financial liabilities measured at fair value on a recurring basis and their related valuation inputs as of September 30, 2014: | |||||||||||||||||
(in thousands) | Total Fair Value | Quoted Prices in | Significant Other | Significant | Balance Sheet | ||||||||||||
of Asset or | Active Markets | Observable Inputs | Unobservable | Classification | |||||||||||||
Liability | for Identical Assets | (Level 2) | Inputs | ||||||||||||||
(Level 1) | (Level 3) | ||||||||||||||||
Assets: | |||||||||||||||||
Money market funds | $ | 7,481 | $ | 7,481 | — | — | Cash and cash | ||||||||||
equivalents | |||||||||||||||||
Liabilities: | |||||||||||||||||
Contingent consideration, current | $ | 1,151 | — | — | $ | 1,151 | Contingent | ||||||||||
consideration | |||||||||||||||||
Contingent consideration, non- | $ | 622 | — | — | $ | 622 | Contingent consideration non-current | ||||||||||
current | |||||||||||||||||
The following table presents financial assets and liabilities measured at fair value on a recurring basis and their related valuation inputs as of March 31, 2014: | |||||||||||||||||
(in thousands) | Total Fair Value | Quoted Prices in | Significant Other | Significant | Balance Sheet | ||||||||||||
of Asset or | Active Markets | Observable Inputs | Unobservable | Classification | |||||||||||||
Liability | for Identical Assets | (Level 2) | Inputs | ||||||||||||||
(Level 1) | (Level 3) | ||||||||||||||||
Assets: | |||||||||||||||||
Money market funds | $ | 117 | $ | 117 | — | — | Cash and cash | ||||||||||
equivalents | |||||||||||||||||
Liabilities: | |||||||||||||||||
Contingent consideration, current | $ | 2,067 | — | — | $ | 2,067 | Contingent consideration | ||||||||||
Contingent consideration, non- | $ | 574 | — | — | $ | 574 | Contingent | ||||||||||
current | consideration | ||||||||||||||||
non-current | |||||||||||||||||
The fair value of the money market funds approximates their carrying amounts due to the short-term nature of these financial assets. | |||||||||||||||||
In connection with an acquisition in the quarter ended June 30, 2012, payment of a portion of the purchase price is contingent upon the profitability of the acquired products for post-closing periods through June 30, 2016, and may be offset by working capital adjustments and other indemnification claims. The Company estimates the fair value of contingent consideration as the present value of the expected payments over the term of the arrangement based on financial forecasts of future profitability of the acquired products, and reaching the forecast. This estimate is subject to ongoing evaluation. The actual cash payment could range from $0.9 million to $2.7 million. | |||||||||||||||||
The fair value measurement of contingent consideration as of September 30, 2014, and March 31, 2014, encompasses the following significant unobservable inputs: | |||||||||||||||||
($ in thousands) | Unobservable Inputs | ||||||||||||||||
30-Sep-14 | 31-Mar-14 | ||||||||||||||||
Estimated earn-out contingent consideration | $ | 3,500 | $ | 3,500 | |||||||||||||
Working capital and other adjustment | (444 | ) | (444 | ) | |||||||||||||
Indemnification related to warranty claims | (303 | ) | (303 | ) | |||||||||||||
Discount rate | 7.4 | % | 7.5 | % | |||||||||||||
Approximate timing of cash flows | 1.4 years | 1.4 years | |||||||||||||||
The following table summarizes contingent consideration activity: | |||||||||||||||||
(in thousands) | |||||||||||||||||
Balance as of March 31, 2014 | $ | 2,641 | |||||||||||||||
Contingent consideration – payments | (879 | ) | |||||||||||||||
Contingent consideration – change in fair value in G&A expense | 11 | ||||||||||||||||
Balance as of September 30, 2014 | $ | 1,773 | |||||||||||||||
Share_Repurchases
Share Repurchases | 6 Months Ended |
Sep. 30, 2014 | |
Payments for Repurchase of Equity [Abstract] | ' |
Share Repurchases | ' |
Share Repurchases | |
In August 2011, the Board of Directors authorized a share repurchase program whereby the Company may repurchase up to an aggregate of $20.0 million of its outstanding Class A Common Stock (the "authorization”). There were no shares repurchased under this authorization during the six months ended September 30, 2014, or September 30, 2013. There was approximately $0.1 million remaining for additional share repurchases under this program as of September 30, 2014. | |
Additionally, in the six months ended September 30, 2014, and 2013, the Company repurchased 215,890 and 147,274 shares of Class A Common Stock, respectively, from certain employees that were surrendered to satisfy the minimum statutory tax withholding obligations on the vesting of restricted stock, RSUs and PSUs. These repurchases are not included in the authorized share repurchase program and had a weighted-average purchase price of $3.19 and $2.02 per share, respectively. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 6 Months Ended | |
Sep. 30, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Condensed consolidated financial statements | ' | |
The accompanying Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. The Condensed Consolidated Financial Statements have been prepared using generally accepted accounting principles (GAAP) in the United States for interim financial reporting, and consistent with the instructions of Form 10-Q and Article 10 of Regulation S-X, and accordingly they do not include all of the information and footnotes required in the annual consolidated financial statements and accompanying footnotes. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2014. All intercompany accounts and transactions have been eliminated in consolidation. | ||
Use of Estimates | ' | |
Use of Estimates | ||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and that affect revenue and expenses during the periods reported. Estimates are used when accounting for the allowance for uncollectible accounts receivable, net realizable value of inventory, product warranty accrued, relative selling prices, stock-based compensation, goodwill and intangible assets fair value, depreciation, income taxes, and contingencies, among other things. Actual results could differ from those estimates. | ||
New Accounting Pronouncements | ' | |
Recently Issued Accounting Pronouncements | ||
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue From Contracts With Customers, that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The ASU is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. The ASU becomes effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period; early adoption is not permitted. The Company is currently assessing the impact that this standard will have on its Consolidated Financial Statements. | ||
Shipping and Handling Cost | ' | |
Effective April 1, 2014, the Company made a voluntary change in accounting principle to classify shipping and handling costs associated with the distribution of finished product to our customers as cost of revenue (previously recorded in sales and marketing expense). The Company made the voluntary change in principle because it believes the classification of shipping and handling costs in cost of revenue better reflects the cost of producing and distributing products. It also enhances the comparability of the financial statements with many industry peers. As required by U.S. generally accepted accounting principles, the change has been reflected in the Condensed Consolidated Statements of Operations through retrospective application of the change in accounting principle. | ||
Inventory | ' | |
Inventories are stated at the lower of first-in, first-out cost or market value. | ||
Fair Value Measurement | ' | |
Fair value is defined by ASC 820 as the price that would be received upon selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: | ||
• | Level 1 – Quoted prices in active markets for identical assets and liabilities. | |
• | Level 2 – Quoted prices in active markets for similar assets and liabilities, 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 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
Basis_of_Presentation_Basis_of
Basis of Presentation Basis of Presentation (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' | ||||||||||||||||||||||||
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | ' | ||||||||||||||||||||||||
The following table provides the reconciliation from previously reported financial data as adjusted: | |||||||||||||||||||||||||
Three months ended September 30, 2013 | Six months ended September 30, 2013 | ||||||||||||||||||||||||
(in thousands) | Previously reported | Effect of Accounting Principle Change | Adjusted | Previously reported | Effect of Accounting Principle Change | Adjusted | |||||||||||||||||||
Revenue | $ | 29,960 | $ | — | $ | 29,960 | $ | 52,416 | $ | — | $ | 52,416 | |||||||||||||
Cost of revenue | 17,537 | 401 | 17,938 | 31,217 | 760 | 31,977 | |||||||||||||||||||
Gross profit | $ | 12,423 | $ | (401 | ) | $ | 12,022 | $ | 21,199 | $ | (760 | ) | $ | 20,439 | |||||||||||
Gross margin | 41.5 | % | 40.1 | % | 40.4 | % | 39 | % | |||||||||||||||||
Sales and marketing | $ | 3,886 | $ | (401 | ) | $ | 3,485 | $ | 7,304 | $ | (760 | ) | $ | 6,544 | |||||||||||
Acquisitions_Tables
Acquisitions (Tables) | 6 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Business Acquisition [Line Items] | ' | |||||||||||
Schedule of Purchase Price Allocation [Table Text Block] | ' | |||||||||||
The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed as of the March 1, 2014, acquisition date: | ||||||||||||
(in thousands) | Preliminary Amounts Recognized as of Acquisition | Measurement Period Adjustments | Adjusted Preliminary Amounts Recognized | |||||||||
Date (1) | ||||||||||||
Cash | $ | 6,513 | $ | — | $ | 6,513 | ||||||
Accounts receivable | 2,920 | (20 | ) | (c) | 2,900 | |||||||
Inventories | 7,625 | (242 | ) | (c) | 7,383 | |||||||
Prepaid expenses and other current assets | 158 | (23 | ) | (c) | 135 | |||||||
Property and equipment | 816 | (45 | ) | (c) | 771 | |||||||
Intangible assets | 16,230 | (57 | ) | (a) | 16,173 | |||||||
Accounts payable, accruals and other liabilities | (2,875 | ) | (37 | ) | (c) | (2,912 | ) | |||||
Income tax payable | (1,175 | ) | — | (1,175 | ) | |||||||
Deferred income tax liability | (6,616 | ) | 87 | (a) | (6,529 | ) | ||||||
Goodwill | 20,142 | 641 | 20,783 | |||||||||
Total Consideration | $ | 43,738 | $ | 304 | (b) | $ | 44,042 | |||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | ' | |||||||||||
The following table summarizes the acquired identified intangible assets, the respective fair value, and estimated useful life at the date of acquisition: | ||||||||||||
(in thousands) | Fair Value | Estimated Life | ||||||||||
Backlog | $ | 90 | 1 month | |||||||||
Customer relationships | 11,410 | 9 years | ||||||||||
Trademark | 303 | 1 year | ||||||||||
Developed technology | 3,860 | 3 years | ||||||||||
Non-compete | 510 | 2 years | ||||||||||
Total intangible assets | $ | 16,173 | ||||||||||
Business Acquisition, Pro Forma Information [Table Text Block] | ' | |||||||||||
The following unaudited summary information is presented on a consolidated pro forma basis as if the CSI acquisition had occurred on April 1, 2012. The pro forma amounts reflect the accounting effects of the business combination, including the application of the Company's accounting policies, amortization of intangible assets based on the estimated fair value and the impact of other fair value purchase accounting impacts such as inventory valuation step-up. The pro forma results are based on historical information and is not necessarily indicative of the combined results had the acquisition been completed at April 1, 2012, nor are they indicative of future combined results. | ||||||||||||
(in thousands) | Three months ended September 30, 2013 | Six months ended September 30, 2013 | ||||||||||
Consolidated pro forma revenue | $ | 41,992 | $ | 73,366 | ||||||||
Consolidated pro forma operating income | $ | 4,924 | $ | 4,109 | ||||||||
Goodwill_and_Intangibles_Goodw1
Goodwill and Intangibles Goodwill and Intangibles (Tables) | 6 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
Goodwill [Line Items] | ' | |||||||||||||||||||
Schedule of Goodwill [Table Text Block] | ' | |||||||||||||||||||
The following table is a summary of the goodwill balance for each reporting unit of September 30, 2014: | ||||||||||||||||||||
Kentrox | CSI | CSG | IBW | Total | ||||||||||||||||
Adjusted net goodwill as of March 31, 2014 | $10,555 | $20,783 | $ | — | $ | — | $31,338 | |||||||||||||
First quarter fiscal 2015 change in reporting units | (10,555 | ) | (20,783 | ) | 10,555 | 20,783 | — | |||||||||||||
Impairment charge | — | — | (10,555 | ) | — | (10,555 | ) | |||||||||||||
Net goodwill as of September 30, 2014 | $ | — | $ | — | $ | — | $ | 20,783 | $ | 20,783 | ||||||||||
Restructuring_Charge_Tables
Restructuring Charge (Tables) | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Restructuring Charges [Abstract] | ' | |||||||
Restructuring charges | ' | |||||||
Total restructuring charges and their utilization for the six months ended September 30, 2014, and 2013, are summarized as follows: | ||||||||
Six months ended September 30, 2014 | Six months ended September 30, 2013 | |||||||
(in thousands) | Employee-related | Employee-related | ||||||
Liability at beginning of period | $ | 57 | $ | 6 | ||||
Charged | 55 | 235 | ||||||
Paid | (112 | ) | (146 | ) | ||||
Liability at end of period | $ | — | $ | 95 | ||||
Interim_Segment_Information_Ta
Interim Segment Information (Tables) | 6 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Segment information | ' | ||||||||||||
Segment information for the three and six months ended September 30, 2014, and 2013 is set forth below: | |||||||||||||
Three months ended September 30, 2014 | |||||||||||||
(in thousands) | CSG | IBW | Total | ||||||||||
Revenue | $ | 12,525 | $ | 11,121 | $ | 23,646 | |||||||
Cost of revenue | 8,828 | 6,753 | 15,581 | ||||||||||
Gross profit | 3,697 | 4,368 | 8,065 | ||||||||||
Gross margin | 29.5 | % | 39.3 | % | 34.1 | % | |||||||
Research and development | 2,197 | 2,103 | 4,300 | ||||||||||
Segment profit | $ | 1,500 | $ | 2,265 | 3,765 | ||||||||
Operating expenses: | |||||||||||||
Sales and marketing | 2,924 | ||||||||||||
General and administrative | 3,280 | ||||||||||||
Intangible amortization | 1,710 | ||||||||||||
Restructuring | (2 | ) | |||||||||||
Goodwill impairment | 10,555 | ||||||||||||
Operating income (loss) | (14,702 | ) | |||||||||||
Other income (expense), net | (16 | ) | |||||||||||
Income tax benefit (expense) | 69 | ||||||||||||
Net income (loss) from continuing operations | $ | (14,649 | ) | ||||||||||
Three months ended September 30, 2013 | |||||||||||||
(in thousands) | CSG | IBW | Total | ||||||||||
Revenue | $ | 27,920 | $ | 2,040 | $ | 29,960 | |||||||
Cost of revenue | 16,633 | 1,305 | 17,938 | ||||||||||
Gross profit | 11,287 | 735 | 12,022 | ||||||||||
Gross margin | 40.4 | % | 36 | % | 40.1 | % | |||||||
Research and development | 2,438 | 181 | 2,619 | ||||||||||
Segment profit | $ | 8,849 | $ | 554 | 9,403 | ||||||||
Operating expenses: | |||||||||||||
Sales and marketing | 3,485 | ||||||||||||
General and administrative | 3,226 | ||||||||||||
Intangible amortization | 1,229 | ||||||||||||
Restructuring | 169 | ||||||||||||
Operating income (loss) | 1,294 | ||||||||||||
Other income (expense), net | 98 | ||||||||||||
Income tax benefit (expense) | (68 | ) | |||||||||||
Net income (loss) from continuing operations | $ | 1,324 | |||||||||||
Six months ended September 30, 2014 | |||||||||||||
(in thousands) | CSG | IBW | Total | ||||||||||
Revenue | $ | 26,253 | $ | 25,218 | $ | 51,471 | |||||||
Cost of revenue | 18,683 | 15,039 | 33,722 | ||||||||||
Gross profit | 7,570 | 10,179 | 17,749 | ||||||||||
Gross margin | 28.8 | % | 40.4 | % | 34.5 | % | |||||||
Research and development | 4,477 | 4,298 | 8,775 | ||||||||||
Segment profit | $ | 3,093 | $ | 5,881 | 8,974 | ||||||||
Operating expenses: | |||||||||||||
Sales and marketing | 6,345 | ||||||||||||
General and administrative | 6,334 | ||||||||||||
Intangible amortization | 3,295 | ||||||||||||
Restructuring | 55 | ||||||||||||
Goodwill impairment | 10,555 | ||||||||||||
Operating income (loss) | (17,610 | ) | |||||||||||
Other income (expense), net | 45 | ||||||||||||
Income tax benefit (expense) | 98 | ||||||||||||
Net income (loss) from continuing operations | $ | (17,467 | ) | ||||||||||
Six months ended September 30, 2013 | |||||||||||||
(in thousands) | CSG | IBW | Total | ||||||||||
Revenue | $ | 49,349 | $ | 3,067 | $ | 52,416 | |||||||
Cost of revenue | 29,940 | 2,037 | 31,977 | ||||||||||
Gross profit | 19,409 | 1,030 | 20,439 | ||||||||||
Gross margin | 39.3 | % | 33.6 | % | 39 | % | |||||||
Research and development | 4,945 | 373 | 5,318 | ||||||||||
Segment profit | $ | 14,464 | $ | 657 | 15,121 | ||||||||
Operating expenses: | |||||||||||||
Sales and marketing | 6,544 | ||||||||||||
General and administrative | 6,798 | ||||||||||||
Intangible amortization | 2,851 | ||||||||||||
Restructuring | 235 | ||||||||||||
Operating income (loss) | (1,307 | ) | |||||||||||
Other income (expense), net | (32 | ) | |||||||||||
Income tax benefit (expense) | (87 | ) | |||||||||||
Net income (loss) from continuing operations | $ | (1,426 | ) | ||||||||||
Inventories_Tables
Inventories (Tables) | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventory, Net [Abstract] | ' | |||||||
Components of inventories | ' | |||||||
Inventories are stated at the lower of first-in, first-out cost or market value. The components of inventories are as follows: | ||||||||
(in thousands) | September 30, 2014 | 31-Mar-14 | ||||||
Raw materials | $ | 11,487 | $ | 11,031 | ||||
Finished goods and sub-assemblies | 10,776 | 13,025 | ||||||
Total inventories | $ | 22,263 | $ | 24,056 | ||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 6 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Share-based Compensation [Abstract] | ' | |||||||||||||||
Stock-based compensation expense | ' | |||||||||||||||
The following table is a summary of total stock-based compensation resulting from stock options, restricted stock, restricted stock units (RSUs) and performance stock units (PSUs), during the three and six months ended September 30, 2014, and 2013: | ||||||||||||||||
Three months ended September 30, | Six months ended September 30, | |||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Stock-based compensation expense | $ | 560 | $ | 389 | $ | 1,114 | $ | 740 | ||||||||
Income tax expense | — | — | — | — | ||||||||||||
Total stock-based compensation expense after taxes | $ | 560 | $ | 389 | $ | 1,114 | $ | 740 | ||||||||
Stock option activity | ' | |||||||||||||||
Stock option activity for the six months ended September 30, 2014, is as follows: | ||||||||||||||||
Shares | Weighted-Average | Weighted-Average | Aggregate | |||||||||||||
Exercise Price Per | Remaining | Intrinsic Value (a) (in | ||||||||||||||
Share | Contractual Term | thousands) | ||||||||||||||
(in years) | ||||||||||||||||
Outstanding on March 31, 2014 | 1,835,445 | $ | 2.02 | 3.7 | $ | 3,110 | ||||||||||
Granted | 40,000 | 3.47 | ||||||||||||||
Exercised | (69,200 | ) | 2.24 | |||||||||||||
Forfeited | (172,500 | ) | 2.35 | |||||||||||||
Expired | (177,930 | ) | 2.82 | |||||||||||||
Outstanding on September 30, 2014 | 1,455,815 | $ | 1.91 | 3.4 | $ | 566 | ||||||||||
(a) | The intrinsic value for the stock options is calculated based on the difference between the exercise price of the underlying awards and the average of the high and low Westell Technologies’ stock price as of the reporting date. | |||||||||||||||
Restricted stock activity | ' | |||||||||||||||
Restricted Stock | ||||||||||||||||
The following table sets forth restricted stock activity for the six months ended September 30, 2014: | ||||||||||||||||
Shares | Weighted-Average | |||||||||||||||
Grant Date Fair | ||||||||||||||||
Value | ||||||||||||||||
Non-vested as of March 31, 2014 | 407,500 | $ | 1.94 | |||||||||||||
Granted | 100,000 | 3.53 | ||||||||||||||
Vested | (332,500 | ) | 1.87 | |||||||||||||
Forfeited | — | — | ||||||||||||||
Non-vested as of September 30, 2014 | 175,000 | $ | 2.99 | |||||||||||||
RSUs | ||||||||||||||||
The following table sets forth the RSU activity for the six months ended September 30, 2014: | ||||||||||||||||
Shares | Weighted-Average | |||||||||||||||
Grant Date Fair | ||||||||||||||||
Value | ||||||||||||||||
Non-vested as of March 31, 2014 | 1,679,000 | $ | 3.09 | |||||||||||||
Granted | 304,500 | 3.45 | ||||||||||||||
Vested | (376,250 | ) | 2.69 | |||||||||||||
Forfeited | (319,000 | ) | 2.74 | |||||||||||||
Non-vested as of September 30, 2014 | 1,288,250 | $ | 3.38 | |||||||||||||
PSUs | ||||||||||||||||
The PSUs vest in annual increments based on the achievement of pre-established Company performance goals and continued employment. The number of PSUs earned, if any, can range from 0% to 200% of the target amount, depending on actual performance for four fiscal years following the grant date. Upon vesting, the PSUs convert into shares of Class A Common Stock on a one-for-one basis. | ||||||||||||||||
The following table sets forth the PSU activity for the six months ended September 30, 2014: | ||||||||||||||||
Shares | Weighted-Average Grant Date Fair Value | |||||||||||||||
Non-vested as of March 31, 2014 | 285,000 | $ | 2.45 | |||||||||||||
Granted, at target | 217,500 | 3.83 | ||||||||||||||
Vested | (66,764 | ) | 2.45 | |||||||||||||
Forfeited | (102,431 | ) | 3.04 | |||||||||||||
Non-vested as of September 30, 2014 | 333,305 | $ | 3.16 | |||||||||||||
Product_Warranties_Tables
Product Warranties (Tables) | 6 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Product Warranties Disclosures [Abstract] | ' | |||||||||||||||
Changes in Company's product warranty reserve | ' | |||||||||||||||
The following table presents the changes in the Company’s product warranty reserve: | ||||||||||||||||
Three months ended September 30, | Six months ended September 30, | |||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Total product warranty reserve at the beginning of the | $ | 424 | $ | 214 | $ | 328 | $ | 152 | ||||||||
period | ||||||||||||||||
Warranty reserve from business acquisitions | — | — | — | 54 | ||||||||||||
Warranty expense | 288 | 251 | 410 | 270 | ||||||||||||
Utilization | (46 | ) | (140 | ) | (72 | ) | (151 | ) | ||||||||
Total product warranty reserve at the end of the period | $ | 666 | $ | 325 | $ | 666 | $ | 325 | ||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 6 Months Ended | |||||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||||||||||||||||||||||
Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block] | ' | |||||||||||||||||||||||||||
Future obligations and commitments as of September 30, 2014, consisted of the following: | ||||||||||||||||||||||||||||
Payments due within | ||||||||||||||||||||||||||||
(in thousands) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Thereafter | Total | |||||||||||||||||||||
Purchase obligations | $ | 12,613 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 12,613 | ||||||||||||||
Future minimum operating lease | 3,199 | 2,699 | 2,149 | 374 | 116 | — | 8,537 | |||||||||||||||||||||
payments | ||||||||||||||||||||||||||||
Contingent consideration | 1,151 | 622 | — | — | — | — | 1,773 | |||||||||||||||||||||
Future obligations and | $ | 16,963 | $ | 3,321 | $ | 2,149 | $ | 374 | $ | 116 | $ | — | $ | 22,923 | ||||||||||||||
commitments | ||||||||||||||||||||||||||||
Shortterm_Investments_Tables
Short-term Investments (Tables) | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Short-term Investments [Abstract] | ' | |||||||
Short-term investments | ' | |||||||
The following table presents short-term investments as of September 30, 2014, and March 31, 2014: | ||||||||
(in thousands) | September 30, 2014 | March 31, 2014 | ||||||
Certificates of deposit | $ | 5,368 | $ | 1,476 | ||||
Held-to-maturity, pre-refunded municipal bonds | 15,002 | 14,108 | ||||||
Total short-term investments | $ | 20,370 | $ | 15,584 | ||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ||||||||||||||||
The following table presents financial assets and non-financial liabilities measured at fair value on a recurring basis and their related valuation inputs as of September 30, 2014: | |||||||||||||||||
(in thousands) | Total Fair Value | Quoted Prices in | Significant Other | Significant | Balance Sheet | ||||||||||||
of Asset or | Active Markets | Observable Inputs | Unobservable | Classification | |||||||||||||
Liability | for Identical Assets | (Level 2) | Inputs | ||||||||||||||
(Level 1) | (Level 3) | ||||||||||||||||
Assets: | |||||||||||||||||
Money market funds | $ | 7,481 | $ | 7,481 | — | — | Cash and cash | ||||||||||
equivalents | |||||||||||||||||
Liabilities: | |||||||||||||||||
Contingent consideration, current | $ | 1,151 | — | — | $ | 1,151 | Contingent | ||||||||||
consideration | |||||||||||||||||
Contingent consideration, non- | $ | 622 | — | — | $ | 622 | Contingent consideration non-current | ||||||||||
current | |||||||||||||||||
The following table presents financial assets and liabilities measured at fair value on a recurring basis and their related valuation inputs as of March 31, 2014: | |||||||||||||||||
(in thousands) | Total Fair Value | Quoted Prices in | Significant Other | Significant | Balance Sheet | ||||||||||||
of Asset or | Active Markets | Observable Inputs | Unobservable | Classification | |||||||||||||
Liability | for Identical Assets | (Level 2) | Inputs | ||||||||||||||
(Level 1) | (Level 3) | ||||||||||||||||
Assets: | |||||||||||||||||
Money market funds | $ | 117 | $ | 117 | — | — | Cash and cash | ||||||||||
equivalents | |||||||||||||||||
Liabilities: | |||||||||||||||||
Contingent consideration, current | $ | 2,067 | — | — | $ | 2,067 | Contingent consideration | ||||||||||
Contingent consideration, non- | $ | 574 | — | — | $ | 574 | Contingent | ||||||||||
current | consideration | ||||||||||||||||
non-current | |||||||||||||||||
Fair value measurement of contingent consideration | ' | ||||||||||||||||
The fair value measurement of contingent consideration as of September 30, 2014, and March 31, 2014, encompasses the following significant unobservable inputs: | |||||||||||||||||
($ in thousands) | Unobservable Inputs | ||||||||||||||||
30-Sep-14 | 31-Mar-14 | ||||||||||||||||
Estimated earn-out contingent consideration | $ | 3,500 | $ | 3,500 | |||||||||||||
Working capital and other adjustment | (444 | ) | (444 | ) | |||||||||||||
Indemnification related to warranty claims | (303 | ) | (303 | ) | |||||||||||||
Discount rate | 7.4 | % | 7.5 | % | |||||||||||||
Approximate timing of cash flows | 1.4 years | 1.4 years | |||||||||||||||
Summarizes contingent consideration activity | ' | ||||||||||||||||
The following table summarizes contingent consideration activity: | |||||||||||||||||
(in thousands) | |||||||||||||||||
Balance as of March 31, 2014 | $ | 2,641 | |||||||||||||||
Contingent consideration – payments | (879 | ) | |||||||||||||||
Contingent consideration – change in fair value in G&A expense | 11 | ||||||||||||||||
Balance as of September 30, 2014 | $ | 1,773 | |||||||||||||||
Basis_of_Presentation_Basis_of1
Basis of Presentation Basis of Presentation (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' | ' | ' | ' | ||
Revenue | $23,646 | $29,960 | $51,471 | $52,416 | ||
Cost of revenue | 15,581 | 17,938 | [1] | 33,722 | 31,977 | [1] |
Gross profit | 8,065 | 12,022 | [1] | 17,749 | 20,439 | [1] |
Gross margin | 34.10% | 40.10% | 34.50% | 39.00% | ||
Sales and marketing | 2,924 | 3,485 | [1] | 6,345 | 6,544 | [1] |
Scenario, Previously Reported [Member] | ' | ' | ' | ' | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' | ' | ' | ' | ||
Revenue | ' | 29,960 | ' | 52,416 | ||
Cost of revenue | ' | 17,537 | ' | 31,217 | ||
Gross profit | ' | 12,423 | ' | 21,199 | ||
Gross margin | ' | 41.50% | ' | 40.40% | ||
Sales and marketing | ' | 3,886 | ' | 7,304 | ||
Restatement Adjustment [Member] | ' | ' | ' | ' | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ' | ' | ' | ' | ||
Revenue | ' | 0 | ' | 0 | ||
Cost of revenue | ' | 401 | ' | 760 | ||
Gross profit | ' | -401 | ' | -760 | ||
Sales and marketing | ' | ($401) | ' | ($760) | ||
[1] | Certain amounts have been reclassified to reflect a change in accounting principle. See Note 1. |
Basis_of_Presentation_Details_
Basis of Presentation (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Apr. 02, 2013 | Mar. 02, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | |||
Kentrox [Member] | CSI [Member] | Restatement Adjustment [Member] | Restatement Adjustment [Member] | |||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ||
Equity Method Investment, Ownership Percentage | ' | ' | ' | ' | 100.00% | 100.00% | ' | ' | ||
Cost of revenue | $15,581,000 | $17,938,000 | [1] | $33,722,000 | $31,977,000 | [1] | ' | ' | $401,000 | $760,000 |
CostofRevenueAdjustmentUsingPreviousAccountingGuidance | 245,000 | ' | 500,000 | ' | ' | ' | ' | ' | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | $0 | $0 | $0 | $0 | ' | ' | ' | ' | ||
[1] | Certain amounts have been reclassified to reflect a change in accounting principle. See Note 1. |
Basis_of_Presentation_Basis_of2
Basis of Presentation Basis of Presentation Parenthetical (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |||
Business Acquisition [Line Items] | ' | ' | ' | ' | ||
Sales and marketing | $2,924,000 | $3,485,000 | [1] | $6,345,000 | $6,544,000 | [1] |
SalesandMarketingAdjustmentUsingPreviousAccountingGuidance | 245,000 | ' | 500,000 | ' | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Income from Continuing Operations | 0 | 0 | 0 | 0 | ||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | 0 | 0 | 0 | 0 | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Diluted Earnings Per Share | $0 | $0 | $0 | $0 | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | 0 | 0 | 0 | 0 | ||
Restatement Adjustment [Member] | ' | ' | ' | ' | ||
Business Acquisition [Line Items] | ' | ' | ' | ' | ||
Sales and marketing | ' | ($401,000) | ' | ($760,000) | ||
[1] | Certain amounts have been reclassified to reflect a change in accounting principle. See Note 1. |
Acquistions_Details
Acquistions (Details) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Mar. 02, 2014 | Mar. 02, 2014 | Mar. 02, 2014 | Mar. 02, 2014 | ||
In Thousands, unless otherwise specified | IBW [Member] | IBW [Member] | CSI [Member] | CSI [Member] | CSI [Member] | CSI [Member] | ||||
IBW [Member] | Scenario, Previously Reported [Member] | Restatement Adjustment [Member] | ||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ||
BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAcquired | ' | ' | ' | ' | ' | $6,513 | $6,513 | $0 | ||
Business Acquisition, Purchase Price Allocation, Current Assets Trade Accounts Receivable | ' | ' | ' | ' | ' | 2,900 | 2,920 | -20 | [1] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | ' | ' | ' | ' | ' | 7,383 | 7,625 | -242 | [1] | |
BusinessAcquisitionPurchasePriceAllocationCurrentAssetsOtherassets | ' | ' | ' | ' | ' | 135 | 158 | -23 | [1] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | ' | ' | ' | ' | ' | 771 | 816 | -45 | [1] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | ' | ' | ' | ' | 16,173 | 16,173 | 16,230 | -57 | [2] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | ' | ' | ' | ' | ' | -2,912 | -2,875 | -37 | [1] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other | ' | ' | ' | ' | ' | -1,175 | -1,175 | 0 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent | ' | ' | ' | ' | ' | -6,529 | -6,616 | 87 | [2] | |
Goodwill | 20,783 | 31,338 | [3] | 20,783 | 0 | ' | 20,783 | 20,142 | 641 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest | ' | ' | ' | ' | ' | $44,042 | $43,738 | $304 | [4] | |
[1] | Other measurement period adjustments mostly related to inventory adjustments | |||||||||
[2] | Intangible asset fair value adjustment for trade name and related tax effect | |||||||||
[3] | Certain amounts have been adjusted to reflect measurement period adjustments related to the CSI acquisition. | |||||||||
[4] | Payment for final working capital adjustment |
Acquisitions_Details_2
Acquisitions (Details 2) (CSI [Member], USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Mar. 02, 2014 |
Business Acquisition [Line Items] | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | ' | $16,173 |
Order or Production Backlog [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | ' | 90 |
Finite-Lived Intangible Asset, Useful Life | '0 years 1 month | ' |
Customer Relationships [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | ' | 11,410 |
Finite-Lived Intangible Asset, Useful Life | '9 years | ' |
Trademarks [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | ' | 303 |
Finite-Lived Intangible Asset, Useful Life | '1 year | ' |
Technology [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | ' | 3,860 |
Finite-Lived Intangible Asset, Useful Life | '3 years | ' |
Noncompete [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | ' | $510 |
Finite-Lived Intangible Asset, Useful Life | '2 years | ' |
Acquisitions_Details_3
Acquisitions (Details 3) (USD $) | 3 Months Ended | 6 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Business Acquisition [Line Items] | ' | ' |
Consolidated pro forma revenue | $41,992 | $73,366 |
Consolidated pro forma operating loss | $4,924 | $4,109 |
Acquisitions_Details_Textual
Acquisitions (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Mar. 02, 2014 | |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | ' | ' | ' | 100.00% |
Business Acquisition, Cost of Acquired Entity, Cash Paid | ' | $39,000,000 | ' | ' | ' | ' | ' |
Working Capital Adjustment | ' | ' | ' | ' | ' | ' | 5,000,000 |
Business Combination, Acquisition Related Costs | ' | ' | ' | 39,000 | ' | 200,000 | ' |
Revenue | 23,646,000 | ' | 29,960,000 | 51,471,000 | 52,416,000 | ' | ' |
Operating income (loss) | -14,702,000 | ' | 1,294,000 | -17,610,000 | -1,307,000 | ' | ' |
CSI [Member] | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Revenue | 8,600,000 | ' | ' | 17,800,000 | ' | ' | ' |
Operating income (loss) | $700,000 | ' | ' | $900,000 | ' | ' | ' |
Goodwill_and_Intangibles_Goodw2
Goodwill and Intangibles Goodwill and Intangibles (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | |
Goodwill [Line Items] | ' | ' | ' | ' | |
Goodwill impairment | ($10,555) | ' | ($10,555) | ' | |
Goodwill | 20,783 | ' | 20,783 | 31,338 | [1] |
Goodwill, Transfers | ' | 0 | ' | ' | |
Kentrox [Member] | ' | ' | ' | ' | |
Goodwill [Line Items] | ' | ' | ' | ' | |
Goodwill | 0 | ' | 0 | 10,555 | |
Goodwill, Transfers | ' | -10,555 | ' | ' | |
CSI [Member] | ' | ' | ' | ' | |
Goodwill [Line Items] | ' | ' | ' | ' | |
Goodwill | 0 | ' | 0 | 20,783 | |
Goodwill, Transfers | ' | -20,783 | ' | ' | |
CSG [Member] | ' | ' | ' | ' | |
Goodwill [Line Items] | ' | ' | ' | ' | |
Goodwill impairment | -10,555 | ' | ' | ' | |
Goodwill | 0 | ' | 0 | 0 | |
Goodwill, Transfers | ' | 10,555 | ' | ' | |
IBW [Member] | ' | ' | ' | ' | |
Goodwill [Line Items] | ' | ' | ' | ' | |
Goodwill | 20,783 | ' | 20,783 | 0 | |
Goodwill, Transfers | ' | $20,783 | ' | ' | |
[1] | Certain amounts have been adjusted to reflect measurement period adjustments related to the CSI acquisition. |
Goodwill_and_Intangibles_Goodw3
Goodwill and Intangibles Goodwill and Intangibles (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 01, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Mar. 02, 2014 | ||
IBW [Member] | IBW [Member] | IBW [Member] | CSG [Member] | CSG [Member] | CSI [Member] | |||||
IBW [Member] | ||||||||||
Goodwill [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Goodwill | $20,783,000 | $20,783,000 | $31,338,000 | [1] | $20,783,000 | ' | $0 | $0 | $0 | $20,783,000 |
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | ' | ' | ' | ' | 12.00% | ' | ' | ' | ' | |
Goodwill impairment | 10,555,000 | 10,555,000 | ' | ' | ' | ' | 10,555,000 | ' | ' | |
Intangible assets, net | 29,023,000 | 29,023,000 | 32,319,000 | [1] | ' | ' | ' | ' | ' | ' |
Impairment of Intangible Assets (Excluding Goodwill) | ' | ' | ' | ' | ' | ' | $100,000 | ' | ' | |
[1] | Certain amounts have been adjusted to reflect measurement period adjustments related to the CSI acquisition. |
Restructuring_Charge_Details
Restructuring Charge (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Restructuring charges | ' | ' | ' | ' |
Liability at beginning of period | ' | ' | $57 | ' |
Charged | -2 | 169 | 55 | 235 |
Employee Severance [Member] | ' | ' | ' | ' |
Restructuring charges | ' | ' | ' | ' |
Liability at beginning of period | ' | ' | 57 | 6 |
Charged | ' | ' | 55 | 235 |
Paid | ' | ' | -112 | -146 |
Liability at end of period | $0 | $95 | $0 | $95 |
Restructuring_Charge_Details_T
Restructuring Charge (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2014 |
Restructuring Charge (Textual) [Abstract] | ' | ' | ' | ' | ' |
Restructuring | ($2) | $169 | $55 | $235 | ' |
Total Restructuring and Related Cost to date | 390 | ' | 390 | ' | ' |
Unpaid balance of restructuring charges | ' | ' | ' | ' | $57 |
Interim_Segment_Information_De
Interim Segment Information (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Segment information | ' | ' | ' | ' | ||
Revenue | $23,646 | $29,960 | $51,471 | $52,416 | ||
Cost of revenue | 15,581 | 17,938 | [1] | 33,722 | 31,977 | [1] |
Gross profit | 8,065 | 12,022 | [1] | 17,749 | 20,439 | [1] |
Gross margin | 34.10% | 40.10% | 34.50% | 39.00% | ||
Research and development | 4,300 | 2,619 | 8,775 | 5,318 | ||
Segment profit | 3,765 | 9,403 | 8,974 | 15,121 | ||
Operating expenses: | ' | ' | ' | ' | ||
Sales and marketing | 2,924 | 3,485 | [1] | 6,345 | 6,544 | [1] |
General and administrative | 3,280 | 3,226 | 6,334 | 6,798 | ||
Intangible amortization | 1,710 | 1,229 | 3,295 | 2,851 | ||
Restructuring | -2 | 169 | 55 | 235 | ||
Goodwill impairment | 10,555 | ' | 10,555 | ' | ||
Operating income (loss) | -14,702 | 1,294 | -17,610 | -1,307 | ||
Other income (expense), net | -16 | 98 | 45 | -32 | ||
Income tax benefit (expense) | 69 | -68 | 98 | -87 | ||
Net income (loss) from continuing operations | -14,649 | 1,324 | -17,467 | -1,426 | ||
CSG [Member] | ' | ' | ' | ' | ||
Segment information | ' | ' | ' | ' | ||
Revenue | 12,525 | 27,920 | 26,253 | 49,349 | ||
Cost of revenue | 8,828 | 16,633 | 18,683 | 29,940 | ||
Gross profit | 3,697 | 11,287 | 7,570 | 19,409 | ||
Gross margin | 29.50% | 40.40% | 28.80% | 39.30% | ||
Research and development | 2,197 | 2,438 | 4,477 | 4,945 | ||
Segment profit | 1,500 | 8,849 | 3,093 | 14,464 | ||
Operating expenses: | ' | ' | ' | ' | ||
Goodwill impairment | 10,555 | ' | ' | ' | ||
IBW [Member] | ' | ' | ' | ' | ||
Segment information | ' | ' | ' | ' | ||
Revenue | 11,121 | 2,040 | 25,218 | 3,067 | ||
Cost of revenue | 6,753 | 1,305 | 15,039 | 2,037 | ||
Gross profit | 4,368 | 735 | 10,179 | 1,030 | ||
Gross margin | 39.30% | 36.00% | 40.40% | 33.60% | ||
Research and development | 2,103 | 181 | 4,298 | 373 | ||
Segment profit | $2,265 | $554 | $5,881 | $657 | ||
[1] | Certain amounts have been reclassified to reflect a change in accounting principle. See Note 1. |
Interim_Segment_Information_In
Interim Segment Information Interim Segment Information (Details Textual) | 6 Months Ended |
Sep. 30, 2014 | |
segments | |
Segment Reporting [Abstract] | ' |
Number of Reportable Segments | 2 |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 | |
In Thousands, unless otherwise specified | |||
Components of inventories | ' | ' | |
Raw materials | $11,487 | $11,031 | |
Finished goods and sub-assemblies | 10,776 | 13,025 | |
Total inventories | $22,263 | $24,056 | [1] |
[1] | Certain amounts have been adjusted to reflect measurement period adjustments related to the CSI acquisition. |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Stock-based compensation expense | ' | ' | ' | ' |
Stock-based compensation expense | $560 | $389 | $1,114 | $740 |
Income tax expense | 0 | 0 | 0 | 0 |
Total stock-based compensation expense after taxes | $560 | $389 | $1,114 | $740 |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 1) (Employee Stock Option [Member], USD $) | 6 Months Ended | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Mar. 31, 2014 | ||
Employee Stock Option [Member] | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Outstanding on March 31, 2014 | 1,835,445 | ' | ||
Granted | 40,000 | ' | ||
Exercised | -69,200 | ' | ||
Forfeited | -172,500 | ' | ||
Expired | -177,930 | ' | ||
Outstanding on September 30, 2014 | 1,455,815 | 1,835,445 | ||
Weighted-Average Exercise Price Per Share, Outstanding on March 31, 2014 | $2.02 | ' | ||
Weighted-Average Exercise Price Per Share, Granted | $3.47 | ' | ||
Weighted-Average Exercise Price Per Share, Exercised | $2.24 | ' | ||
Weighted-Average Exercise Price Per Share, Forfeited | $2.35 | ' | ||
Weighted-Average Exercise Price Per Share, Expired | $2.82 | ' | ||
Weighted-Average Exercise Price Per Share, Outstanding on September 30, 2014 | $1.91 | $2.02 | ||
Weighted-Average Remaining Contractual Term (in years), Outstanding on March 31, 2014 | '3 years 4 months 10 days | '3 years 8 months 19 days | ||
Weighted-Average Remaining Contractual Term (in years), Outstanding on September 30, 2014 | '3 years 4 months 10 days | '3 years 8 months 19 days | ||
Aggregate Intrinsic Value, Outstanding on March 31, 2014 | $3,110 | [1] | ' | |
Aggregate Intrinsic Value, Outstanding on September 30, 2014 | $566 | [1] | $3,110 | [1] |
[1] | The intrinsic value for the stock options is calculated based on the difference between the exercise price of the underlying awards and the average of the high and low Westell Technologiesb stock price as of the reporting date. |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 2) (USD $) | 6 Months Ended |
Sep. 30, 2014 | |
Restricted Stock [Member] | ' |
Restricted stock activity | ' |
Non-vested as of March 31, 2014 | 407,500 |
Granted | 100,000 |
Vested | -332,500 |
Forfeited | 0 |
Non-vested as of September 30, 2014 | 175,000 |
Weighted-Average Grant Date Fair Value, Non-vested as of March 31, 2014 | $1.94 |
Weighted-Average Grant Date Fair Value, Granted | $3.53 |
Weighted-Average Grant Date Fair Value, Vested | $1.87 |
Weighted-Average Grant Date Fair Value, Forfeited | $0 |
Weighted-Average Grant Date Fair Value, Non-vested as of September 30, 2014 | $2.99 |
Restricted Stock Units (RSUs) [Member] | ' |
Restricted stock activity | ' |
Non-vested as of March 31, 2014 | 1,679,000 |
Granted | 304,500 |
Vested | -376,250 |
Forfeited | -319,000 |
Non-vested as of September 30, 2014 | 1,288,250 |
Weighted-Average Grant Date Fair Value, Non-vested as of March 31, 2014 | $3.09 |
Weighted-Average Grant Date Fair Value, Granted | $3.45 |
Weighted-Average Grant Date Fair Value, Vested | $2.69 |
Weighted-Average Grant Date Fair Value, Forfeited | $2.74 |
Weighted-Average Grant Date Fair Value, Non-vested as of September 30, 2014 | $3.38 |
Performance Shares [Member] | ' |
Restricted stock activity | ' |
Non-vested as of March 31, 2014 | 285,000 |
Granted | 217,500 |
Vested | -66,764 |
Forfeited | -102,431 |
Non-vested as of September 30, 2014 | 333,305 |
Weighted-Average Grant Date Fair Value, Non-vested as of March 31, 2014 | $2.45 |
Weighted-Average Grant Date Fair Value, Granted | $3.83 |
Weighted-Average Grant Date Fair Value, Vested | $2.45 |
Weighted-Average Grant Date Fair Value, Forfeited | $3.04 |
Weighted-Average Grant Date Fair Value, Non-vested as of September 30, 2014 | $3.16 |
StockBased_Compensation_Detail3
Stock-Based Compensation (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Stock-Based Compensation (Textual) [Abstract] | ' | ' |
Vesting schedule of equal annual installments over four years | ' | '4 years |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | ' | $1.27 |
IncrementalStockbasedCompensationExpenseDuetoModification | $88,000 | ' |
Minimum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Potential PSU attainment range | ' | 0.00% |
Maximum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Potential PSU attainment range | ' | 200.00% |
Product_Warranties_Details
Product Warranties (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Changes in Company's product warranty reserve | ' | ' | ' | ' |
Total product warranty reserve at the beginning of the period | $424 | $214 | $328 | $152 |
Warranty reserve from business acquisitions | ' | ' | ' | 54 |
Warranty expense | 288 | 251 | 410 | 270 |
Utilization | -46 | -140 | -72 | -151 |
Total product warranty reserve at the end of the period | $666 | $325 | $666 | $325 |
Product_Warranties_Details_Tex
Product Warranties (Details Textual) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | CSG [Member] | CSG [Member] | IBW [Member] | IBW [Member] | ||
Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | |||
Product Warranties (Textual) [Abstract] | ' | ' | ' | ' | ' | ' |
Standard Product Warranty Description | ' | ' | 'P1Y | 'P7Y | 'P1Y | 'P5Y |
Current portions of warranty reserve | $536 | $286 | ' | ' | ' | ' |
Non-current portions of the warranty reserve | $130 | $42 | ' | ' | ' | ' |
Variable_Interest_Entity_and_G1
Variable Interest Entity and Guarantee (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Apr. 02, 2013 | |
AKA [Member] | AKA [Member] | AKA [Member] | AKA [Member] | AKA [Member] | AKA [Member] | |||||
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity Method Investment, Ownership Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% |
Equity Method Investments | ' | ' | ' | ' | $93,000 | ' | $93,000 | ' | $84,000 | ' |
Revenue | 23,646,000 | 29,960,000 | 51,471,000 | 52,416,000 | 900,000 | 1,300,000 | 1,100,000 | 2,600,000 | ' | ' |
Accounts Receivable, Net, Current | ' | ' | ' | ' | 200,000 | ' | 200,000 | ' | 400,000 | ' |
Deferred Revenue | ' | ' | ' | ' | 1,100,000 | ' | 1,100,000 | ' | 1,000,000 | ' |
Guarantor Obligations, Maximum Exposure, Undiscounted | ' | ' | ' | ' | $700,000 | ' | $700,000 | ' | ' | ' |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Taxes (Textual) [Abstract] | ' | ' | ' | ' |
Income tax benefit (expense) | $69 | ($68) | $98 | ($87) |
Effective tax rate | 0.50% | 4.90% | 0.60% | -6.50% |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Commitments and Contingencies Disclosure [Abstract] | ' | ' |
Purchase Obligation, Due in Next Twelve Months | $12,613 | ' |
Purchase Obligation | 12,613 | ' |
Future minimum operating lease payments Due, Next Twelve Months | 3,199 | ' |
Future minimum operating lease payments, Due in Two Years | 2,699 | ' |
Future minimum operating lease payments, Due in Three Years | 2,149 | ' |
Future minimum operating lease payments, Due in Four Years | 374 | ' |
Future minimum operating lease payments, Due in Five Years | 116 | ' |
Future minimum operating lease payments Due | 8,537 | ' |
Contingent consideration, Due in Next Twelve Months | 1,151 | ' |
Contingent consideration, Due in Second Year | 622 | ' |
Contingent Consideration | 1,773 | ' |
Future obligations and commitments, Due in Next Twelve Months | 16,963 | ' |
Future obligations and commitments, Due in Second Year | 3,321 | ' |
Future obligations and commitments, Due in Third Year | 2,149 | ' |
Future obligations and commitments, Due in Fourth Year | 374 | ' |
Future obligations and commitments, Due in Fifth Year | 116 | ' |
Future obligations and commitments | $22,923 | $23,700 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) (USD $) | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | |
Arkadin [Member] | ||||
Loss Contingencies [Line Items] | ' | ' | ' | ' |
Increase (decrease) in future obligations and commitments | $800,000 | ' | ' | ' |
Future obligations and commitments | 22,923,000 | ' | 23,700,000 | ' |
Payments for Previous Acquisition | 879,000 | ' | ' | ' |
Total contingent reserves related to intellectual property and indemnification claims | 700,000 | ' | 700,000 | ' |
Escrow Deposit Released | ' | ' | ' | 1,100,000 |
Maximum ANTONE earn-out that could be paid before offsets | 3,500,000 | ' | ' | ' |
Fair value of contingent consideration liability after offset of working capital adjustment and indemnification claim | $1,773,000 | ' | $2,641,000 | ' |
Commitments_and_Contingencies_3
Commitments and Contingencies Commitments and Contingencies Parenthetical (Details) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Millions, unless otherwise specified | ||
Commitments and Contingencies Disclosure [Abstract] | ' | ' |
Loss Contingency Accrual | $0.70 | $0.70 |
Shortterm_Investments_Details
Short-term Investments (Details) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Schedule of Investments [Line Items] | ' | ' |
Certificates of deposit | $5,368 | $1,476 |
Held-to-maturity, pre-refunded municipal bonds | 15,002 | 14,108 |
Total short-term investments | $20,370 | $15,584 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Contingent consideration | $1,151 | $2,067 |
Contingent consideration non-current | 622 | 574 |
Recurring [Member] | Cash and cash equivalents [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Money market funds | 7,481 | 117 |
Recurring [Member] | Accrued Liabilities [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Contingent consideration | 1,151 | 2,067 |
Recurring [Member] | Contingent consideration non-current [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Contingent consideration non-current | 622 | 574 |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Cash and cash equivalents [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Money market funds | 7,481 | 117 |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Accrued Liabilities [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Contingent consideration | ' | ' |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Contingent consideration non-current [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Contingent consideration non-current | ' | ' |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Cash and cash equivalents [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Money market funds | ' | ' |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Accrued Liabilities [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Contingent consideration | ' | ' |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Contingent consideration non-current [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Contingent consideration non-current | ' | ' |
Recurring [Member] | Unobservable Inputs (Level 3) [Member] | Cash and cash equivalents [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Money market funds | ' | ' |
Recurring [Member] | Unobservable Inputs (Level 3) [Member] | Accrued Liabilities [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Contingent consideration | 1,151 | 2,067 |
Recurring [Member] | Unobservable Inputs (Level 3) [Member] | Contingent consideration non-current [Member] | ' | ' |
Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | ' | ' |
Contingent consideration non-current | $622 | $574 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 1) (USD $) | 6 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Mar. 31, 2014 |
Fair value measurement of contingent consideration | ' | ' |
Maximum ANTONE earn-out that could be paid before offsets | $3,500 | ' |
Unobservable Inputs (Level 3) [Member] | ' | ' |
Fair value measurement of contingent consideration | ' | ' |
Maximum ANTONE earn-out that could be paid before offsets | 3,500 | 3,500 |
Working capital and other adjustment | -444 | -444 |
Indemnification related to warranty claims | ($303) | ($303) |
Discount rate | 7.40% | 7.50% |
Approximate timing of cash flows | '1 year 4 months 10 days | '1 year 4 months 10 days |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details 2) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Fair Value Disclosures [Abstract] | ' | ' |
Payments for Previous Acquisition | $879 | ' |
Summarizes contingent consideration activity | ' | ' |
Balance as of March 31, 2014 | 2,641 | ' |
Contingent consideration b payments | -879 | ' |
Contingent consideration b change in fair value in G&A expense | 11 | ' |
Balance as of September 30, 2014 | $1,773 | ' |
Fair_Value_Measurements_Fair_V
Fair Value Measurements Fair Value Measurements (Details Textual) (USD $) | Sep. 30, 2014 |
In Millions, unless otherwise specified | |
Fair Value Disclosures [Abstract] | ' |
BusinessCombinationContingentConsiderationArrangementsRangeNetOfOutcomesValueLow | $0.90 |
BusinessCombinationContingentConsiderationArrangementsNetRangeOfOutcomesValueHigh | $2.70 |
Share_Repurchases_Details_Text
Share Repurchases (Details Textual) (Class A Common Stock, USD $) | 6 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Aug. 31, 2011 |
August 2011 authorization [Member] | ' | ' | ' |
Share Repurchases (Textual) [Abstract] | ' | ' | ' |
Stock Repurchase Program | ' | ' | $20 |
Treasury Stock, Shares, Acquired | 0 | 0 | ' |
Stock Repurchase Program Remaining Authorized Repurchases Amount | $0.10 | ' | ' |
Outside of Publically Announced Repurchase Program [Member] | ' | ' | ' |
Share Repurchases (Textual) [Abstract] | ' | ' | ' |
Treasury Stock, Shares, Acquired | 215,890 | 147,274 | ' |
Treasury stock acquired volume weighted-average price | $3.19 | 2.02 | ' |
Share_Repurchases_Share_Repurc
Share Repurchases Share Repurchases Parenthetical (Details) (August Two Thousand Eleven Authorization [Member], Class A Common Stock) | 6 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
August Two Thousand Eleven Authorization [Member] | Class A Common Stock | ' | ' |
Payments for Repurchase of Equity [Abstract] | ' | ' |
Treasury Stock, Shares, Acquired | 0 | 0 |