Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Mar. 31, 2023 | May 30, 2023 | Sep. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Mar. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-31321 | ||
Entity Registrant Name | NAUTILUS, INC. | ||
Entity Incorporation, State or Country Code | WA | ||
Entity Tax Identification Number | 94-3002667 | ||
Entity Address, Address Line One | 17750 S.E. 6th Way | ||
Entity Address, City or Town | Vancouver | ||
Entity Address, State or Province | WA | ||
Entity Address, Postal Zip Code | 98683 | ||
City Area Code | (360) | ||
Local Phone Number | 859-2900 | ||
Title of 12(b) Security | Common Stock, no par value | ||
Trading Symbol | NLS | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Public Float | $ 44,557,559 | ||
Entity Common Stock, Shares Outstanding | 31,986,018 | ||
Entity Central Index Key | 0001078207 | ||
Current Fiscal Year End Date | --03-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Amendment Flag | false | ||
Documents Incorporated by Reference | The registrant has incorporated by reference into Part III of this Form 10-K portions of its Proxy Statement for its 2023 Annual Meeting of Shareholders, which will be filed within 120 days after the end of the fiscal year covered by this Form 10-K. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement shall not be deemed to be filed as part hereof. |
Audit Information
Audit Information | 12 Months Ended |
Mar. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | GRANT THORNTON LLP |
Auditor Location | Bellevue, Washington |
Auditor Firm ID | 248 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Current assets: | ||
Cash | $ 17,362 | $ 12,872 |
Restricted cash | 950 | 1,339 |
Trade receivables, net of allowances | 21,489 | 61,454 |
Inventories | 46,599 | 111,190 |
Prepaids and other current assets | 8,033 | 14,546 |
Other current assets - restricted | 0 | 3,887 |
Income taxes receivable | 1,789 | 1,998 |
Total current assets | 96,222 | 207,286 |
Property, plant and equipment, net | 32,789 | 32,129 |
Operating lease right-of-use assets | 19,078 | 23,620 |
Goodwill | 0 | 24,510 |
Other intangible assets, net | 6,787 | 9,304 |
Deferred income tax assets, non-current | 554 | 8,760 |
Income Taxes Receivable, Noncurrent | 5,673 | 5,673 |
Other assets | 2,429 | 2,763 |
Total assets | 163,532 | 314,045 |
Liabilities and Shareholders' Equity | ||
Trade payables | 29,378 | 53,165 |
Accrued liabilities | 15,575 | 29,386 |
Operating lease liabilities, current portion | 4,427 | 4,494 |
Financing lease liabilities, current portion | 122 | 119 |
Warranty obligations, current portion | 2,564 | 4,968 |
Income taxes payable | 328 | 839 |
Debt payable, current portion, net of unamortized debt issuance costs | 1,642 | 2,243 |
Total current liabilities | 54,036 | 95,214 |
Operating lease liabilities, non-current | 16,380 | 20,926 |
Financing lease liabilities, non-current | 282 | 395 |
Warranty obligations, non-current | 703 | 1,248 |
Income taxes payable, non-current | 2,316 | 4,029 |
Deferred income tax liabilities, non-current | 253 | 0 |
Other long-term liabilities | 1,978 | 1,071 |
Debt payable, non-current, net of unamortized debt issuance costs | 26,284 | 27,113 |
Total liabilities | 102,232 | 149,996 |
Commitments and contingencies (Note 24) | ||
Common stock - no par value, 75,000 shares authorized, 31,845 and 31,268 shares issued and outstanding | 10,084 | 6,483 |
Retained earnings | 52,694 | 158,093 |
Accumulated other comprehensive loss | (1,478) | (527) |
Total shareholders' equity | 61,300 | 164,049 |
Total liabilities and shareholders' equity | $ 163,532 | $ 314,045 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares shares in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Condensed Consolidated Balance Sheet Parenthetical [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 75,000 | 75,000 |
Common stock, shares issued (in shares) | 31,845 | 31,845 |
Common stock, shares outstanding (in shares) | 31,268 | 31,268 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 286,773 | $ 589,534 |
Cost of sales | 234,819 | 441,077 |
Gross profit | 51,954 | 148,457 |
Operating expenses: | ||
Selling and marketing | 51,505 | 99,204 |
General and administrative | 42,474 | 51,783 |
Research and development | 21,822 | 22,786 |
Goodwill and other intangible impairment charge | 26,965 | 0 |
Restructuring Charges | 2,549 | 0 |
Total operating expenses | 145,315 | 173,773 |
Operating loss | (93,361) | (25,316) |
Other income (expense): | ||
Interest income | 9 | 35 |
Interest expense | (3,795) | (1,580) |
Other expense, net | (982) | (1,369) |
Total other expense, net | (4,768) | (2,914) |
Loss from continuing operations before income taxes | (98,129) | (28,230) |
Income tax expense (benefit) | 9,359 | (6,026) |
Loss from continuing operations | (107,488) | (22,204) |
Discontinued operations: | ||
Loss from discontinued operations before income taxes | (47) | (198) |
Income tax (benefit) expense of discontinued operations | (2,136) | 29 |
Income (loss) from discontinued operations | 2,089 | (227) |
Net loss | $ (105,399) | $ (22,431) |
Basic loss income per share | ||
Basic income per share from continuing operations (in dollars per share) | $ (3.40) | $ (0.72) |
Basic income (loss) per share from discontinued operations (in dollars per share) | 0.06 | 0 |
Basic net income per share (in dollars per share) | (3.34) | (0.72) |
Diluted net (loss) income per share | ||
Diluted income per share from continuing operations (in dollars per share) | (3.40) | (0.72) |
Diluted income (loss) per share from discontinued operations (in dollars per share) | 0.06 | 0 |
Diluted net income per share (in dollars per share) | $ (3.34) | $ (0.72) |
Shares used in per share calculations: | ||
Basic (in shares) | 31,585 | 31,029 |
Diluted (in shares) | 31,585 | 31,029 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (105,399) | $ (22,431) |
Other comprehensive (loss) income: | ||
Unrealized loss on marketable securities, net of income tax expense of $— and $13 | 0 | (4) |
Foreign currency translation adjustment, net of income tax expense (benefit) of $(62) and $13 | (951) | (368) |
Other comprehensive (loss) income | (951) | (372) |
Comprehensive (loss) income | $ (106,350) | $ (22,803) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized gain (loss) on marketable securities tax expense (benefit) | $ 0 | $ 13 |
Foreign currency translation tax (benefit) expense | $ (62) | $ 13 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive (Loss) Income |
Beginning balance at Mar. 31, 2021 | $ 182,545 | $ 2,176 | $ 180,524 | $ (155) |
Balance, shares at Mar. 31, 2021 | 30,576 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (22,431) | (22,431) | ||
Unrealized loss on marketable securities, net of income tax expense | (4) | (4) | ||
Foreign currency translation adjustment, including income tax expense (benefit) | (368) | (368) | ||
Stock-based compensation expense | 6,262 | $ 6,262 | ||
Common stock issued under equity compensation plan, net of shares withheld for tax payments, in shares | 646 | |||
Common stock issued under equity compensation plan, net of shares withheld for tax payments | (2,441) | $ (2,441) | ||
Common stock issued under employee stock purchase plan, shares | 46 | |||
Common stock issued under employee stock purchase plan | 486 | $ 486 | ||
Balance, shares at Mar. 31, 2022 | 31,268 | |||
Ending balance at Mar. 31, 2022 | 164,049 | $ 6,483 | 158,093 | (527) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (105,399) | (105,399) | ||
Unrealized loss on marketable securities, net of income tax expense | 0 | 0 | ||
Foreign currency translation adjustment, including income tax expense (benefit) | (951) | (951) | ||
Stock-based compensation expense | 3,885 | $ 3,885 | ||
Common stock issued under equity compensation plan, net of shares withheld for tax payments, in shares | 458 | |||
Common stock issued under equity compensation plan, net of shares withheld for tax payments | (497) | $ (497) | ||
Common stock issued under employee stock purchase plan, shares | 119 | |||
Common stock issued under employee stock purchase plan | 213 | $ 213 | ||
Balance, shares at Mar. 31, 2023 | 31,845 | |||
Ending balance at Mar. 31, 2023 | $ 61,300 | $ 10,084 | $ 52,694 | $ (1,478) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity - Parenthetical - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Unrealized gain (loss) on marketable securities tax expense (benefit) | $ 0 | $ 13 |
Foreign currency translation tax (benefit) expense | $ (62) | $ 13 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Income from continuing operations | $ (107,488) | $ (22,204) |
Income (loss) from discontinued operations | 2,089 | (227) |
Net loss | (105,399) | (22,431) |
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 11,103 | 8,615 |
Provision for allowance for doubtful accounts | 761 | 414 |
Inventory lower-of-cost-or / net realizable value adjustments | 821 | 0 |
Stock-based compensation expense | 3,885 | 6,262 |
(Gain) loss on asset dispositions | (2) | 0 |
Loss on debt extinguishment | 228 | 0 |
Goodwill and other intangible impairment charge | 26,965 | 0 |
Deferred income taxes, net of valuation allowances | 8,958 | (7,827) |
Other | 691 | 586 |
Changes in operating assets and liabilities: | ||
Trade receivables | 39,247 | 26,906 |
Inventories | 64,954 | (41,774) |
Prepaids and other assets | 11,077 | 7,993 |
Income taxes receivable | 221 | (7,672) |
Trade payables | (22,061) | (44,159) |
Liability-classified stock-based compensation expense | 24 | 0 |
Accrued liabilities and other liabilities, including warranty obligations | (22,627) | 6,521 |
Net cash provided by (used in) operating activities | 18,846 | (66,566) |
Cash flows from investing activities: | ||
Proceeds from sales and maturities of available-for-sale securities | 0 | 73,448 |
Acquisition of business, net of cash acquired | 0 | (26,035) |
Purchases of property, plant and equipment and capitalized software development | (12,618) | (13,050) |
Net cash (used in) provided by investing activities | (12,618) | 34,363 |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 88,261 | 65,238 |
Payments on long-term debt | (89,660) | (49,930) |
Payment of debt issuance costs | (2,153) | (577) |
Payments on finance lease liabilities | (119) | (60) |
Proceeds from employee stock purchases | 213 | 486 |
Proceeds from exercise of stock options | 0 | 479 |
Tax payments related to stock award issuances | (497) | (2,920) |
Net cash (used in) provided by financing activities | (3,955) | 12,716 |
Effect of exchange rate changes | (2,059) | (2,195) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 214 | (21,682) |
Cash and restricted cash at beginning of period | 18,098 | 39,780 |
Cash and restricted cash at end of period | 18,312 | 18,098 |
Supplemental disclosure of cash flow information: | ||
Cash paid (received) for income taxes, net | 255 | 13,983 |
Cash paid for interest | 2,886 | 655 |
Capital expenditures incurred but not yet paid | 379 | 1,077 |
Cash | 17,362 | 12,872 |
Restricted cash | 950 | 1,339 |
Other current assets - restricted | 0 | 3,887 |
Total cash, cash equivalents and restricted cash | $ 18,312 | $ 18,098 |
Business Acquisition
Business Acquisition | 12 Months Ended |
Mar. 31, 2023 | |
Business Combinations [Abstract] | |
Business Acquisition | BUSINESS ACQUISITION Fiscal year ended March 31, 2023 There we no acquisitions in the fiscal year ended March 31, 2023. Fiscal year ended March 31, 2022 On September 17, 2021, we acquired VAY AG (“VAY”) for an aggregate purchase of $26.9 million using cash on hand. Headquartered in Zurich, Switzerland, VAY specializes in computer vision and AI technology solutions and has developed software solutions for human motion analysis using any normal RGB (red-green-blue) camera from a device, such as a laptop, smartphone, or tablet. With a mission to democratize professional human motion analysis, VAY enables clients in fitness and health industries to understand and analyze human movement, providing personalized feedback on repetitions and form in real-time. We accounted for the transaction as a business combination. Goodwill recorded at the time of acquisition of $24.5 million represented the excess of the purchase price over the fair value of the net tangible and intangible assets and liabilities assumed and is not deductible for tax purposes. Goodwill recorded in connection with this acquisition was primarily attributable to VAY's intellectual property base, employee workforce and application to future digital technologies. Acquired assets and liabilities assumed were recorded at estimated fair value on the acquisition date. Total acquisition costs for fiscal 2022 were $1.0 million and were expensed in general and administrative costs. Since the acquisition occurred on September 17, 2021, no material amount of net sales or net income related to the VAY business was included in our reported March 31, 2022 financial statements. The sellers of VAY have the opportunity to earn additional contingent consideration subject to the achievement of continued employment over an 18 months month period for a total of twenty software engineers. The contingent consideration arrangement of $3.9 million will be paid to the former owners of VAY upon achievement of these milestones and recognized as compensatory expense over the service period. An escrow account was funded for the contingency consideration and is reported on the Consolidated Balance Sheets as Other current assets - restricted. The fair value of acquired technology, which was determined at the acquisition date, primarily uses the cost approach. Other third party costs were also provided and considered in our analysis, where appropriate. In addition to the costs to reproduce each application, a developer's profit, an opportunity cost and an obsolescence factor were considered. The developer's profit represents the profit margin on a market participate developer's investment in the material, labor and overhead costs necessary to develop the intangible asset. Purchase Price Allocation The purchase price allocation was determined based on the fair values of the assets and liabilities identified as of the acquisition date and may be adjusted, within a period of no more than 12 months from the acquisition date, if the final fair values change as a result of circumstances existing at the acquisition date, and upon receipt of final appraisals and valuations. Such fair value adjustments may arise in respect of property, plant and equipment upon completion of the necessary valuations and physical verifications of such assets. The following table summarizes the preliminary fair values of the net assets acquired and liabilities assumed and measurement period adjustments since September 17, 2021, the acquisition date (in thousands): Preliminary valuation at September 17, 2021 Measurement period adjustments Adjusted valuation at March 31, 2022 Cash $ 230 $ 637 $ 867 Accounts receivable 9 — 9 Prepaid expenses 15 (2) 13 Deferred tax assets 58 1 59 Developed technology (included in property, plant and equipment) 3,000 — 3,000 Identifiable assets acquired 3,312 636 3,948 Accrued liabilities 187 722 909 Unearned revenue 53 3 56 Deferred tax liabilities, non-current 591 — 591 Total liabilities assumed 831 725 1,556 Net identifiable assets acquired 2,481 (89) 2,392 Goodwill 24,508 2 24,510 Total assets acquired $ 26,989 $ (87) $ 26,902 The allocation of the purchase price was based upon valuation information available and estimates and assumptions made as of March 31, 2022. We have verified data and finalizing information including valuation and recording of the assets acquired and liabilities assumed, and the resulting amount of recognized goodwill. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Organization and Business Nautilus, Inc. and subsidiaries (collectively, "Nautilus," the "Company," "we" or "us") was founded in 1986 and incorporated in the State of Washington in 1993. Our headquarters are located in Vancouver, Washington. We empower healthier living through individualized connected fitness experiences to build a healthier world, one person at a time. Our principal business activities include designing, developing, sourcing and marketing high-quality cardio and strength fitness products and related accessories for consumer use, primarily in the U.S., Canada, and Europe. Our products are sold under some of the most-recognized brand names in the fitness industry: Bowflex ® , Schwinn ® , JRNY ® and Nautilus ® . We market our products through two distinct distribution channels, Direct and Retail, which we consider to be separate business segments. Our Direct business offers products directly to consumers through television advertising, catalogs and our websites. Our Retail business offers our products through a network of independent retail companies and specialty retailers with stores and websites located in the U.S. and internationally. We also derive a portion of our revenue from the licensing of our brands and intellectual property. Basis of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and relate to the Company and its subsidiaries, all of which are wholly-owned, directly or indirectly. Intercompany transactions and balances have been eliminated in consolidation. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Unless indicated otherwise, all information regarding our operating results pertain to our continuing operations. Discontinued Operations Results from discontinued operations relate to the disposal of our former Nautilus ® Commercial business, which was completed in April 2011. We reached substantial completion of asset liquidation at December 31, 2012. Although there was no revenue related to our former Commercial business from January 1, 2020 through March 31, 2023, we continued to have product liability and other legal expenses associated with product previously sold into the Commercial channel. Results of operations related to the Commercial business have been presented in the consolidated financial statements as discontinued operations for all periods presented. Use of Management's Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities in the financial statements. Our critical accounting estimates relate to goodwill and other long-term assets. Actual results could differ from our estimates. Concentrations Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents held in bank accounts in excess of federally-insured limits and trade receivables. Trade receivables are generally unsecured and therefore collection is affected by the economic conditions in each of our principal markets. We rely on third-party contract manufacturers in Asia for substantially all of our products and for certain product engineering support. Business operations could be disrupted by natural disasters, difficulties in transporting products from non-U.S. suppliers, as well as political, social or economic instability in the countries where contract manufacturers or their vendors or customers conduct business. While any such contract manufacturing arrangement could be replaced over time, the temporary loss of the services of any primary contract manufacturer could delay product shipments and cause a significant disruption in our operations. In the fiscal year ended March 31 2023 ("fiscal 2023") we had one vendor that accounted for 37% of our trade payables. In the fiscal year ended March 31 2022 ("fiscal 2022") we had three vendors that each individually accounted for more than 11%, but less than 23% of our trade payables. We derive a significant portion of our net sales from a small number of our Retail customers. A loss of business from one or more of these large customers, if not replaced with new business, would negatively affect our operating results and cash flows. In fiscal 2023, we had one customer that accounted for 19% of our net sales. In fiscal 2022, we had two customers that one customer each individually accounted for more than 10%, but less than 18%, of our net sales. In fiscal 2023 and fiscal 2022, we had three customers that each individually accounted for more than 10%, but less than 39%, of our trade receivables. Restricted Cash We are required by our banking partner to maintain a restricted bank account to cover for exposures on corporate credit cards and letters of credits. The use of these funds are restricted until the exposure with the banking partner is closed. Other Current Assets - Restricted Other current assets - restricted represents an escrow account for contingent consideration that was paid to the former owners of VAY AG upon achievement of continued employment over an 18 month period that ended on March 17, 2023. For additional information, refer to Note 2, Business Acquisition . Derivative Securities We enter into foreign exchange forward contracts to offset the earnings impacts of exchange rate fluctuations on certain monetary assets and liabilities. A hypothetical 10% increase in interest rates, or a 10% movement in the currencies underlying our foreign currency derivative positions, would have material impacts on our results of operations, financial position or cash flows. Gains and losses on foreign currency forward contracts are recognized in the Other, net line of our consolidated statements of operations. We do not enter into derivative instruments for any purpose other than to manage our interest rate or foreign currency exposure. That is, we do not engage in interest rate or currency exchange rate speculation using derivative instruments. For additional information, refer to Note 7, Derivatives . Trade Receivables Accounts receivable primarily consists of trade receivables due from our Retail segment customers. We determine an allowance for doubtful accounts based on historical customer experience and other currently available evidence. When a specific account is deemed uncollectible, the account is written off against the allowance. For additional information, refer to Note 8, Trade Receivables . Inventories Inventories are stated at the lower of cost and net realizable value ("NRV"), with cost determined based on the first-in, first-out method. We establish inventory allowances for excess, slow-moving and obsolete inventory based on inventory levels, expected product life and forecasted sales. Inventories are written down to NRV based on historical demand, competitive factors, changes in technology and product lifecycles. For additional information, refer to Note 9, Inventories . Property, Plant and Equipment Property, plant and equipment is stated at cost, net of accumulated depreciation. Improvements or betterments which add new functionality or significantly extend the life of an asset are capitalized. Software costs related to an asset developed for internal use are capitalized after the preliminary project stage, management has committed to the completion of the project and it is probable the project will be complete and used as intended. Expenditures for maintenance and repairs are expensed as incurred. The cost of assets retired, or otherwise disposed of, and the related accumulated depreciation, are removed from the accounts at the time of disposal. Gains and losses resulting from asset sales and dispositions are recognized in the period in which assets are disposed. Depreciation is recognized, using the straight-line method, over the lesser of the estimated useful lives of the assets or, in the case of leasehold improvements, the lease term, including renewal periods if we expect to exercise our renewal options. Depreciation on automobiles, computer software and equipment, machinery and equipment is determined based on estimated useful lives, which generally range from two four five Property, Plant and Equipment . Business Combinations We allocate the purchase price of a business acquisition to the assets acquired and liabilities assumed based upon their estimated fair values at the business combination date. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of identifiable assets, particularly intangibles, and liabilities acquired also requires us to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. Unanticipated events or circumstances may occur that could affect the accuracy of our fair value estimates, and under different assumptions, the resulting valuations could be materially different, which could impact the operating results we report. Goodwill Goodwill consisted of the excess of acquisition consideration over the fair values of net assets acquired in business combinations. It was not amortized, but rather is tested at the reporting unit level at least annually for impairment or more frequently if triggering events or changes in circumstances indicate impairment. Initially, qualitative factors are considered to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, entity-specific events, a sustained decrease in share price, and consideration of the difference between the fair value and carrying amount of a reporting unit as determined in the most recent quantitative assessment. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit's fair value is less than its carrying amount, a quantitative impairment analysis is performed. A quantitative impairment analysis involves estimating the fair value of a reporting unit using widely-accepted valuation methodologies including the income and market approaches, which requires the use of estimates and assumptions. We make significant assumptions and estimates about the extent and timing of future cash flows, discount rates, growth rates and terminal value. The cash flows are estimated over a significant future period of time, which makes those estimates and assumptions subject to an even higher degree of uncertainty. We also use market valuation models and other financial ratios, which require us to make certain assumptions and estimates regarding the applicability of those models to our assets and businesses. These estimates and assumptions include revenue growth rates, discounts rates, and determination of appropriate market comparables. If the fair value of the reporting unit is less than its carrying amount, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the goodwill. In accordance ASC 350 — Intangibles — Goodwill and Other , we performed our goodwill and indefinite-lived trade names impairment valuations annually, on March 31, or sooner if triggering events are identified. While the fair value of our reporting units exceeded their respective carrying values as of March 31, 2022, we observed continued market volatility, including significant declines in our market capitalization during the three month period ended June 30, 2022, which was identified as a triggering event. Our trailing 30-day average market capitalization was approximately $137 million at March 31, 2022 compared to $66 million, the trailing 30-day average, as of June 30, 2022. We performed an interim evaluation and a market capitalization reconciliation during the first quarter of fiscal 2023, which resulted in a non-cash goodwill impairment charge of $24.5 million. In fiscal 2022, our testing resulted in no impairment being recognized. Other Intangible Assets Indefinite-lived intangible assets consist of acquired trademarks, specifically trade names. Indefinite-lived intangible assets are stated at cost and are not amortized; instead, they are tested for impairment at least annually. We assess the value of indefinite-lived assets under either a qualitative or quantitative approach. Under a qualitative approach, we consider various market factors, including applicable key assumptions also used in the quantitative assessment listed below. If we determine that it is more likely than not that an indefinite-lived intangible assets is impaired, the quantitative approach is used to assess the asset fair value and the amount of the impairment. We review our indefinite-lived trademarks for impairment in the fourth quarter of each year or when events or changes in circumstances indicate that the assets may be impaired. The fair value of trademarks is estimated using the relief- from-royalty method to estimate the value of the cost savings and a discounted cash flows method to estimate the value of future income. The sum of these two values for each trademark is the fair value of the trademark. If the carrying amount of trademarks exceeds the estimated fair value, we calculate impairment as the excess of carrying amount over the estimate of fair value. We tested our indefinite-lived trademarks for impairment in the fourth quarter of fiscal 2023 and fiscal 2022 and no impairment was indicated. Definite-lived intangible assets, primarily acquired trade names, customer relationships, patents and patent rights, are stated at cost, net of accumulated amortization, and are evaluated for impairment as discussed below under Impairment of Long-Lived Assets . We recognize amortization expense for our definite-lived intangible assets on a straight-line basis over the estimated useful lives. For further information regarding other intangible assets, see Note 13, Other Intangible Assets . Impairment of Long-Lived Assets Long-lived assets, including property, plant and equipment and definite-lived intangible assets, are evaluated for impairment when events or circumstances indicate the carrying value may be impaired. When such an event or condition occurs, we estimate the future undiscounted cash flows to be derived from the use and eventual disposition of the asset to determine whether a potential impairment exists. If the carrying value exceeds estimated future undiscounted cash flows, we record impairment expense to reduce the carrying value of the asset to its estimated fair value. Based on our evaluation, we determined that our long-lived assets were recoverable, and an impairment charge was not required in fiscal 2023 or fiscal 2022. Equity Investments ASU 2016-01 Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, requires us to measure all equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in earnings. We do not hold any equity investments where we use quoted market prices to determine the fair values. For equity securities without readily determinable fair values, we have elected the measurement alternative under which we measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Revenue Recognition Our Direct and Retail revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For our Direct channel, control is transferred when products are shipped to customers as the entity has fulfilled the promise to transfer the goods. For Retail, control is transferred when contractual shipping terms are performed for the customer, generally upon our delivery to the carrier, in accordance with the terms of a sales contract. Our product sales and shipping revenues are reported net of promotional discounts, returns allowances, contractual rebates, and consideration payable to our customers. We estimate the revenue impact of retail sales incentive programs based on the planned duration of the program and historical experience. If the amount of sales incentives is reasonably estimable, the impact of such incentives is recorded at the later of the time the customer is notified of the sales incentive or the time of the sale. We estimate our liability for product returns based on historical experience, and record the expected customer refund liability as a reduction of revenue, and the expected inventory right of recovery, net of estimated scrap, as a reduction of cost of sales. If actual return costs differ from previous estimates, the amount of the liability and corresponding revenue are adjusted in the period in which such costs occur. We provide standard assurance-type warranties on our products which cover defective materials or nonconforming products, and is included with each product at no additional charge. In addition, we offer service-type/extended warranties for an additional fee to our Direct channel customers and Retail specialty and commercial customers. These warranty contracts provide coverage on labor and parts beyond the standard assurance warranty period. For our product sales, services, and freight and delivery fees, we are the principal in the contract and recognize revenue at a point in time. For our Direct channel extended warranty contracts, we are the agent and recognize revenue on a net basis because our performance obligation is to facilitate the arrangement between our customers and the third-party performance obligor. Sales of our subscriptions are deemed to be one performance obligation and we recognize revenue from these arrangements ratably over the subscription term as the performance obligation is satisfied. Revenue generated from subscriptions is recorded in our Direct segment. We offer free trials of subscriptions, bundled with product offerings (e.g., subscription for premium content). For these types of transactions that involve multiple performance obligations, the transaction price require allocations to the distinct performance obligation, as the free trial provides a material right. The transaction price is then allocated to each performance obligation based on relative standalone selling price. We determine stand-alone selling price based on prices charged to customers. Breakage is factored into the determination of the stand-alone selling price of a free trial. Breakage or activation rate, is defined as a percentage of those that never activate a free-trial offering. Some of our contracts with customers contain multiple performance obligations. For customer contracts that include multiple performance obligations, we account for individual performance obligations if they are distinct. We allocate the transaction price to each performance obligation based on its relative standalone selling price. We generally determine standalone selling price based on prices charged to customers on standalone sales or using expected cost plus margin. Significant judgement, such as breakage or activation rate, is factored into the determination of the stand-alone selling price of a subscription. Breakage or activation rate, is defined as a percentage of those that never activate a free-trial offering. Payment terms for our retail partners depend on the country of sale or agreement with the customer and payment is generally required within 90 days or less of shipment to or receipt by the retail partner. Payment is due at the time of sale for our e-commerce transactions. Deferred net revenue occurs because sales transactions include future update rights and performance obligations, which are subject to a recognition period. This balance increases from period to period by revenue that is deferred from current sales with these types of service obligations and is reduced by the recognition of revenue from prior sales that were deferred. Generally, revenue is recognized as the services are provided. Many Direct business customers finance their purchases through a third-party credit provider, for which we pay a commission or financing fee to the credit provider. Revenue for such transactions is recognized based on the sales price charged to the customer, net of promotional discounts, and the related commission or financing fee is included in selling and marketing expense. Exemptions and Elections We apply the practical expedient as per ASC 606-10-50-14 and do not disclose information related to remaining performance obligations due to their original expected durations are one year or less. We expense sales commissions when incurred because the amortization period would have been less than one year. These costs are recorded in selling and marketing expense. We generally account for our shipping and handling activities as a fulfillment activity, consistent with the timing of revenue recognition; that is, when our customer takes control of the transferred goods. In the event that a customer were to take control of a product prior to shipment, we make an accounting policy election to treat such shipping and handling activities as a fulfillment cost. For additional information, see Note 5, Revenues . Sales Discounts and Returns Allowance Product sales and shipping revenues are reported net of promotional discounts and return allowances. We estimate the revenue impact of retail sales incentive programs based on the planned duration of the program and historical experience. If the amount of sales incentives is reasonably estimable, the impact of such incentives is recorded at the later of the time the customer is notified of the sales incentive or the time of the sale. We estimate our liability for product returns based on historical experience, and record the expected customer refund liability as a reduction of revenue, and the expected inventory right of recovery, net of estimated scrap, as a reduction of cost of sales. If actual return costs differ from previous estimates, the amount of the liability and corresponding revenue are adjusted in the period in which such costs occur. Activity in our sales discounts and returns allowance was as follows (in thousands): Year Ended March 31, 2023 2022 Balance at beginning of period $ 12,179 $ 6,348 Charges to reserve 29,871 49,983 Reductions for sales discounts and returns (33,355) (44,152) Balance at end of period $ 8,695 $ 12,179 Taxes Collected from Customers and Remitted to Governmental Authorities Taxes collected from customers and remitted to governmental authorities are recorded on a net basis and excluded from net sales. Shipping and Handling Fees Shipping and handling fees billed to customers are recorded net of discounts and included in both net sales and cost of sales. We generally account for our shipping and handling activities as a fulfillment activity, consistent with the timing of revenue recognition; that is, when our customer takes control of the transferred goods. Cost of Sales Cost of sales primarily consists of: inventory costs; royalties paid to third parties; employment and occupancy costs of warehouse and distribution facilities, including depreciation of improvements and equipment; transportation expenses; product warranty expenses; distribution information systems expenses; and allocated expenses for shared administrative functions. Product Warranty Obligations Our products carry defined warranties for defects in materials or workmanship which, according to their terms, generally obligate us to pay the costs of supplying and shipping replacement parts to customers and, in certain instances, pay for labor and other costs to service products. Outstanding product warranty periods range from thirty days to, in limited circumstances, the lifetime of certain product components. We record a liability at the time of sale for the estimated costs of fulfilling future warranty claims. If necessary, we adjust the liability for specific warranty-related matters when they become known and are reasonably estimable. Estimated warranty expense is included in cost of sales, based on historical warranty claim experience and available product quality data. Warranty expense is affected by the performance of new products, significant manufacturing or design defects not discovered until after the product is delivered to the customer, product failure rates, and higher or lower than expected repair costs. If warranty expense differs from previous estimates, or if circumstances change such that the assumptions inherent in previous estimates are no longer valid, the amount of product warranty obligations is adjusted accordingly. Litigation and Loss Contingencies From time to time, we may be involved in various claims, lawsuits and other proceedings. These legal proceedings involve uncertainty as to the eventual outcomes and losses which may be realized when one or more future events occur or fail to occur. We record expenses for litigation and loss contingencies as a component of general and administrative expense when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. When a loss contingency is not both probable and estimable, we do not establish an accrued liability. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then we disclose an estimate of the possible loss or range of loss, if such estimate can be made, or disclose that an estimate cannot be made. For additional information, see Note 24, Commitments and Contingencies. Advertising and Promotion We expense our advertising and promotion costs as incurred. Production costs of television advertising commercials are recorded in prepaids and other current assets until the initial broadcast, at which time such costs are expensed. Advertising and promotion costs are included in selling and marketing expenses and totaled $23.2 million and $61.5 million for fiscal 2023 and fiscal 2022, respectively. Prepaid advertising and promotion costs were $0.2 million and $1.6 million for fiscal 2023 and fiscal 2022, respectively. Research and Development Internal research and development costs, which primarily consist of salaries and wages, employee benefits, expenditures for materials, and fees to use licensed technologies, are expensed as incurred. Third-party research and development costs for products under development or being researched, if any, are expensed as the contracted work is performed. Improvements or betterments which add new functionality or significantly extend the life of an asset are capitalized. Software costs related to an asset developed for internal use are capitalized after the preliminary project stage, management has committed to the completion of the project and it is probable the project will be complete and used as intended. Income Taxes We account for income taxes based on the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be in effect when the temporary differences are expected to be included, as income or expense, in the applicable tax return. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the enactment. Valuation allowances are provided against deferred income tax assets if we determine it is more likely than not that such assets will not be realized. Unrecognized Tax Benefits We recognize a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained based on the technical merits of the position upon examination, including resolutions of any related appeals or litigation. We recognize tax-related interest and penalties as a component of income tax expense. Foreign Currency Translation We translate the accounts of our non-U.S. subsidiaries into U.S. dollars as follows: revenues, expenses, gains and losses are translated at weighted-average exchange rates during the year; and assets and liabilities are translated at the exchange rate on the balance sheet date. Translation gains and losses are reported in our Consolidated Balance Sheets as a component of accumulated other comprehensive loss. Gains and losses arising from foreign currency transactions, including transactions between us and our non-U.S. subsidiaries, are recorded as a component of other income (expense) in our Consolidated Statements of Operations. Fair Value of Financial Instruments The carrying values of cash, restricted cash, trade receivables, prepaids and other current assets, trade payables and accrued liabilities approximate fair value due to their short maturities. For additional information on financial instruments recorded at fair value on a recurring basis refer to Note 6, Fair Value Measurements . Stock-Based Compensation We recognize stock-based compensation expense on a straight-line basis over the applicable requisite service period, based on the grant-date fair value of the award. To the extent a stock-based award is subject to performance conditions, the amount of expense recorded in a given period, if any, reflects our assessment of the probability of achieving the performance targets. Fair value of stock options and shares subject to our employee stock purchase plan are estimated using the Black-Scholes valuation model; fair value of performance share unit ("PSU") awards, restricted stock unit ("RSU") awards and restricted stock awards ("RSA") is based on the closing market price on the day preceding the grant. Our accounting treatment of forfeiture expenses reversals is at the forfeiture date and do not estimate future forfeitures prior to their actual occurrence. Shares to be issued upon the exercise of stock options or the requisite service period of stock awards will come from newly issued shares. Income (Loss) Per Share Amounts Basic income per share amounts were computed using the weighted average number of common shares outstanding. Diluted income per share amounts were calculated using the number of basic weighted average shares outstanding increased by dilutive potential common shares related to stock-based awards, as determined by the treasury stock method. If there is a loss from continuing operations, diluted earnings per share is the same as basic earnings per share. Recent Accounting Pronouncements Newly-Adopted Pronouncements ASU 2020-01 In January 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815).” The amendments in ASU 2020-01 clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. ASU 2020-01 is |
Discontinued Operation
Discontinued Operation | 12 Months Ended |
Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | DISCONTINUED OPERATIONS We completed the tax deregistration of a foreign entity that was part of the discontinued operations during fiscal 2023. As a result, the previously unrecognized tax benefit and associated accrued interest and penalty in the amount of $2.1 million was released and recorded as a component of income taxes from discontinued operations during fiscal 2023. There were no further significant activities or changes to our discontinued operations during fiscal 2023. |
Restructuring and Exit Charges
Restructuring and Exit Charges | 12 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Exit Charges | RESTRUCTURING AND EXIT CHARGES In February 2023, we announced and began implementing a restructuring plan that included a reduction in workforce and other exit costs. The following table summarizes restructuring reserve activity (in thousands): Employee Severance and Benefits Third Party Costs Total Accrued liability as of March 31, 2022 $ — $ — $ — Charges / Accruals 1,657 892 2,549 (Payments) (547) (769) (1,316) Accrued liability as of March 31, 2023 $ 1,110 $ 123 $ 1,233 |
Revenues
Revenues | 12 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | REVENUES Our revenues from contracts with customers disaggregated by revenue source, excluding sales-based taxes, were as follows (in thousands): Year Ended March 31, 2023 2022 Product sales $ 264,077 $ 567,914 Extended warranties and services 4,896 7,053 Royalty income 3,371 3,739 Other (1) 14,429 10,828 Net sales $ 286,773 $ 589,534 (1) Other revenue is primarily subscription revenue and freight and delivery. Our revenues disaggregated by geographic region, based on ship-to address, were as follows (in thousands): Year Ended March 31, 2023 2022 United States $ 232,139 $ 460,237 Canada 37,820 74,883 Europe, the Middle East and Africa 4,371 41,026 All other 12,443 13,388 Net sales $ 286,773 $ 589,534 The following table provides information about our liabilities from contracts with customers, primarily customer deposits and deferred revenue for which advance consideration is received prior to the transfer of control or the performance obligation is not satisfied. Revenue is recognized when transfer of control occurs. All customer deposits and deferred revenue received are short-term in nature, recognized over the next twelve months. Significant changes in contract liabilities balances, including revenue recognized in the reporting period that was included in opening contract liabilities, are shown below (in thousands): Year Ended March 31, 2023 2022 Balance at beginning of period $ 6,285 $ 5,551 Cash additions 1,258 4,537 Deferred revenue 7,228 6,875 Revenue recognition (9,696) (10,678) Balance at end of period $ 5,075 $ 6,285 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Factors used in determining the fair value of financial assets and liabilities are summarized into three broad categories: • Level 1 - observable inputs such as quoted prices (unadjusted) in active liquid markets for identical securities as of the reporting date; • Level 2 - other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds and credit risk; or observable market prices in markets with insufficient volume and/or infrequent transactions; and • Level 3 - significant inputs that are generally unobservable inputs for which there is little or no market data available, including our own assumptions in determining fair value. We did not have any assets measured at fair value on a recurring basis as of March 31, 2023 or 2022. Liabilities measured at fair value on a recurring basis were as follows (in thousands): March 31, 2023 Level 1 Level 2 Level 3 Total Liabilities: Derivatives Foreign currency forward contracts $ — $ 141 $ — $ 141 Total liabilities at fair value $ — $ 141 $ — $ 141 March 31, 2022 Level 1 Level 2 Level 3 Total Liabilities: Derivatives Foreign currency forward contracts $ — $ 128 $ — $ 128 Total liabilities at fair value $ — $ 128 $ — $ 128 We did not have any changes to our valuation techniques during any periods presented. The fair value of our foreign currency forward contracts is calculated as the present value of estimated future cash flows using discount factors derived from relevant Level 2 market inputs, including forward curves and volatility levels. The carrying value of our debt approximates its fair value and falls under Level 2 of the fair value hierarchy, as the interest rate is variable and based on current market rates. |
Derivatives
Derivatives | 12 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | DERIVATIVES From time to time, we enter into interest rate swaps to fix a portion of our interest expense, and foreign exchange forward contracts to offset the earnings impacts of exchange rate fluctuations on certain monetary assets and liabilities. We do not enter into derivative instruments for any purpose other than to manage interest rate or foreign currency exposure. That is, we do not engage in interest rate or currency exchange rate speculation using derivative instruments. We may hedge our net recognized foreign currency assets and liabilities with forward foreign exchange contracts to reduce the risk that our earnings and cash flows will be adversely affected by changes in foreign currency exchange rates. These derivative instruments hedge assets and liabilities that are denominated in foreign currencies and are carried at fair value with changes in the fair value recorded as other income. These derivative instruments do not subject us to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the assets and liabilities being hedged. As of March 31, 2023, total outstanding forward foreign exchange contract notional amounts were $18.6 million and had maturities of 63 days or less. The fair value of our derivative instruments was included in our Consolidated Balance Sheets as follows (in thousands): Balance Sheet Classification As of March 31, 2023 2022 Derivative instruments not designated as cash flow hedges: Foreign currency forward contracts Accrued liabilities $ 141 $ 128 The effect of derivative instruments on our Consolidated Statements of Operations was as follows (in thousands): Statement of Operations Classification Year Ended March 31, 2023 2022 Derivative instruments not designated as cash flow hedges: Loss recognized in earnings Other, net $ (24) $ (30) Income tax expense (benefit) Income tax expense (benefit) 6 (7) For additional information related to our derivatives, see Notes 6 and 19 . |
Trade Receivables
Trade Receivables | 12 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Trade Receivables | TRADE RECEIVABLES Trade receivables, net, consisted of the following (in thousands): As of March 31, 2023 2022 Trade receivables $ 22,107 $ 62,052 Allowance for doubtful accounts (618) (598) Trade receivables, net of allowance $ 21,489 $ 61,454 Changes in our allowance for doubtful trade receivables were as follows (in thousands): Year Ended March 31, 2023 2022 Beginning balance $ 598 $ 1,177 Charges to bad debt expense 761 414 Write-offs, net (741) (993) Ending balance $ 618 $ 598 |
Inventories
Inventories | 12 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Our inventories consisted of the following (in thousands): As of March 31, 2023 2022 Finished goods $ 42,463 $ 104,988 Parts and components 4,136 6,202 Total inventories $ 46,599 $ 111,190 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following (in thousands): Estimated As of March 31, 2023 2022 Automobiles 5 $ 23 $ 23 Leasehold improvements 4 to 20 3,426 3,150 Computer software and equipment 2 to 7 57,223 44,852 Machinery and equipment 3 to 5 14,953 16,447 Furniture and fixtures 5 to 20 2,034 2,634 Work in progress (1) N/A 4,061 6,678 Total cost 81,720 73,784 Accumulated depreciation (48,931) (41,655) Total property, plant and equipment, net $ 32,789 $ 32,129 (1) Work in progress includes information technology assets and production tooling. Depreciation expense was as follows (in thousands): Year Ended March 31, 2023 2022 Depreciation expense $ 11,042 $ 8,554 |
Leases
Leases | 12 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | LEASES We have several noncancelable operating leases, primarily for office space, that expire at various dates over the next seven years. These leases generally contain renewal options to extend for one lease term of five years. For leases that we are reasonably certain we will exercise the lease renewal options, the options were considered in determining the lease term, and associated potential option payments are included in the lease payments. The payments used in the renewal term were estimated using the percentage rate increase of historical rent payments for each location where the renewal will be exercised. Payments due under the lease contracts include annual fixed payments for office space. Variable payments including payments for our proportionate share of the building’s property taxes, insurance, and common area maintenance are treated as non-lease components and are recognized in the period for which the costs occur. The components of lease cost were as follows (in thousands): Year Ended March 31, 2023 2022 Operating lease expense $ 5,807 $ 5,822 Amortization of right of use assets of finance leases assets 114 57 Interest expense of finance lease liabilities 10 6 Total lease expense $ 5,931 $ 5,885 Other information related to leases was as follows (dollars in thousands): As of March 31, 2023 2022 Supplemental cash flow information related to leases was as follows: Operating leases: Operating lease right-of-use assets $ 19,078 $ 23,620 Operating lease liabilities, non-current $ 16,380 $ 20,926 Operating lease liabilities, current 4,427 4,494 Total operating lease liabilities $ 20,807 $ 25,420 Finance leases: Property, plant and equipment, at cost $ 569 $ 569 Accumulated depreciation (171) (57) Property, plant and equipment, net $ 398 $ 512 Finance lease liabilities, non-current $ 282 $ 395 Finance lease liabilities, current 122 119 Total finance lease liabilities $ 404 $ 514 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flow from operating leases $ 6,226 $ 6,485 Finance cash flows from finance leases 119 60 Additional operating lease information: ROU assets obtained in exchange for operating lease obligations $ 100 $ 10,323 ROU assets obtained in exchange for finance lease obligations — 569 Reductions to ROU assets resulting from reductions to operating lease obligations 1,175 1,358 Increases to ROU assets resulting from remeasurement of lease obligations — — Weighted Average Remaining Lease Term: Operating leases 5.0 years 3.1 years Finance leases 3.5 years 4.5 years Weighted Average Discount Rate: Operating leases 5.05 % 4.65 % Finance leases 2.08 % 2.14 % We determined the discount rate for leases using a portfolio approach to determine an incremental borrowing rate to calculate the right-of-use assets and lease liabilities. Maturities of lease liabilities under non-cancelable leases were as follows (in thousands): As of March 31, 2023 Operating leases Finance leases Year ending: 2024 $ 5,382 $ 120 2025 5,648 120 2026 4,520 120 2027 2,361 59 Thereafter 5,796 — Total undiscounted lease payments 23,707 419 Less imputed interest (2,900) (15) Total lease liabilities $ 20,807 $ 404 |
Goodwill
Goodwill | 12 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | GOODWILL The rollforward of goodwill was as follows (in thousands): Direct Total Balance, March 31, 2021 $ — $ — Business acquisition (Note 2) 24,510 24,510 Balance, March 31, 2022 24,510 24,510 Goodwill impairment (24,510) (24,510) Balance, March 31, 2023 $ — $ — In accordance with ASC 350 — Intangibles — Goodwill and Other, we perform our goodwill and indefinite-lived trade names impairment valuations annually, on March 31, or sooner if triggering events are identified. While the fair value of our reporting units exceeded their respective carrying values as of March 31, 2022, we observed continued market volatility including significant declines in our market capitalization during the three month period ended June 30, 2022, identified as a triggering event. Our trailing 30-day average market capitalization was approximately $137 million at March 31, 2022 compared to $66 million, the trailing 30-day average, as of June 30, 2022. We performed an interim evaluation and a market capitalization reconciliation during the first quarter of fiscal 2023, which resulted in a non-cash goodwill impairment charge of $24.5 million. We assigned assets and liabilities to each reporting unit based on either specific identification or by using judgment for the remaining assets and liabilities that are not specific to a reporting unit. We determined the fair value of our reporting units our ASC 350 analysis using the market approach. In addition, we determined the fair value by adding a control premium observed from recent transactions of comparable companies to determine the reasonableness of that assumption and the fair values of the reporting units estimated in our ASC 350 analysis. Significant unobservable inputs and assumptions inherent in the valuation methodologies from Level 3 inputs were employed and include, but were not limited to, prospective financial information, growth rates, terminal value, royalty rates, discount rates, and comparable multiples from publicly traded companies in our industry. We compared the carrying amount of each reporting unit to its respective fair value. We reconciled the aggregate fair values of the reporting units determined in our ASC 350 analysis (as described above) to the enterprise market capitalization plus a reasonable control premium. This total value was compared to a trailing 30-day average market capitalization of approximately $66 million as of June 30, 2022. The market capitalization was allocated to the reporting units using the respective percentages of annual revenue. As a result, the market capitalization reconciliation analysis identified that the Direct reporting unit's fair value was significantly lower than its carrying value, resulting in a non-cash goodwill impairment charge of $24.5 million. |
Other Intangible Assets
Other Intangible Assets | 12 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | OTHER INTANGIBLE ASSETS Other intangible assets consisted of the following (in thousands): Estimated As of March 31, 2023 2022 Indefinite-lived trademarks (1) N/A $ 6,597 $ 9,052 Patents 7 to 24 1,043 1,043 7,640 10,095 Accumulated amortization - definite-lived intangible assets (853) (791) $ 6,787 $ 9,304 (1) During the first quarter of fiscal 2023, we identified impairment indicators with our indefinite-lived trademarks resulting in a $2.5 million non-cash intangible impairment charge. Amortization expense was as follows (in thousands): Year Ended March 31, 2023 2022 Amortization expense $ 61 $ 61 Future amortization of definite-lived intangible assets is as follows (in thousands): 2024 $ 61 2025 61 2026 47 2027 3 2028 3 Thereafter 15 $ 190 |
Equity Investments
Equity Investments | 12 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Equity Investments | EQUITY INVESTMENTS In 2019, we made strategic equity securities investments to increase our digital capabilities. The accounting guidance related to the classification and measurement of certain equity investments requires us to account for these investments at fair value or to elect to account for these investments under the "practicability exception," which permits measurement of these investments at cost, minus impairments, plus or minus observable changes in price from orderly transactions for the identical or a similar investment of the same issuer for each reporting period. We elected this practicability exception and for the year ended March 31, 2023, we recognized an impairment of $0.7 million as we made a qualitative assessment of the investment after observing impairment indicators upon receipt of the most recent financial statements and third party valuation reports. The fair value was determined by reviewing the financial information and financial performance indicating a significant adverse change in the general market condition the investee operates. We have not recognized any upward adjustments on either an annual or cumulative basis due to observable price changes. The carrying value of our equity securities was included in the following line item in our consolidated balance sheets (in thousands): Measurement Alternative - No Readily Determinable Fair Value As of March 31, 2023 2022 Other assets $ 292 $ 1,000 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Mar. 31, 2023 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consisted of the following (in thousands): As of March 31, 2023 2022 Payroll and related liabilities $ 5,220 $ 10,405 Deferred revenue 5,075 6,285 Reserves (1) 1,200 4,433 Accrued Tariffs 1,167 — Legal settlement (2) 5 4,250 Other 2,908 4,013 Total accrued liabilities $ 15,575 $ 29,386 (1) Reserves primarily consists of inventory, sales return, sales tax and product liability reserves. (2) Legal settlement is a loss contingency accrual related to a legal settlement involving a class action lawsuit related to advertisement of our treadmills. For further information, see Note 24, Commitments and Contingencies. |
Product Warranties
Product Warranties | 12 Months Ended |
Mar. 31, 2023 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | PRODUCT WARRANTIES Changes in our product warranty obligations were as follows (in thousands): Year Ended March 31, 2023 2022 Balance at beginning of period $ 6,216 $ 8,651 Accruals 4,569 5,924 Payments (7,518) (8,359) Balance at end of period $ 3,267 $ 6,216 |
Borrowings
Borrowings | 12 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS SLR Credit Agreement On November 30, 2022, we entered into a Term Loan Credit Agreement (the “SLR Credit Agreement”) with Crystal Financial LLC D/B/A SLR Credit Solutions, a Delaware limited liability company, as administrative agent (“SLR”) and lenders from time to time party thereto (collectively the “Lenders”). Pursuant to the SLR Credit Agreement, the Lenders have agreed, among other things, to make available to us a term loan facility in the aggregate principal amount of up to $30.0 million, subject to a borrowing base (the “SLR Term Loan Facility”), as such amounts may increase or decrease in accordance with the terms of the SLR Credit Agreement. The principal amount of the loan will initially bear interest based on the Adjusted Term SOFR rate plus a margin of 8.25%. From and after the first day of each fiscal month, commencing with the first fiscal month following the receipt by the Agent of the annual audited financial statements of the Loan Parties and their Subsidiaries pursuant to the terms of Section 5.1 and clause (a) of Schedule 5.1 to this Agreement for the fiscal year ending March 31, 2024 (such date referred to herein as the "2024 Financial Statement Delivery Date"), the margin will be either 7.75% or 8.25% based on whether our fixed charge coverage ratio is greater than 1.00 to 1.00 or less than or equal to 1.00 to 1.00, respectively. Borrowings under the SLR Credit Agreement will mature, and all outstanding amounts thereunder will be payable on October 29, 2026, unless the maturity is accelerated subject to the terms set forth in the SLR Credit Agreement or if there is an earlier maturity of the Wells Fargo Credit Agreement (as defined below). The obligations of each Borrower under the SLR Credit Agreement are secured by a lien on substantially all of our assets. The SLR Credit Agreement contains customary affirmative and negative covenants for financings of this type, including, among other terms and conditions, delivery of financial statements, reports and maintenance of corporate existence, availability subject to a calculated borrowing base, as well as limitations and conditions on our ability to: create, incur, assume or be liable for indebtedness; dispose of assets outside the ordinary course; acquire, merge or consolidate with or into another person or entity; create, incur or allow any lien on any of our property; make investments; or pay dividends or make distributions, in each case subject to certain exceptions. The financial covenants set forth in the SLR Credit Agreement initially require us to (a) maintain minimum excess availability of at least the greater of (i) $10.0 million (subject to increase set forth in the SLR Credit Agreement related to utilization of any incremental term loan facilities thereunder) or (ii) 12.5% of the sum of (x) the line cap under the Wells Fargo Credit Agreement (calculated without giving effect to any term pushdown reserve) plus (y) the lesser of (A) the outstanding principal balance of the loans under the SLR Credit Agreement and (B) the borrowing base under the SLR Credit Agreement (the “Combined Line Cap”). From and after the date on which both the fixed charge coverage ratio for the previous 12-month period is at least 1.00 to 1.00 and availability under the Wells Fargo Credit Agreement is equal to or greater than $20.0 million, we shall no longer be subject to a minimum excess availability covenant but rather would be required to maintain a fixed charge coverage ratio of at least 1.00: tested when availability under the Wells Fargo Credit Agreement is less than the greater of (i) 12.5% of the Combined Line Cap (excluding the effect, if any, of any term pushdown reserve), and (ii) $11.0 million, calculated as of the last day of each fiscal quarter (the “Financial Covenants”). In addition, the SLR Credit Agreement includes customary events of default, including but not limited to, the nonpayment of principal and interest when due thereunder, breaches of representations and warranties, noncompliance with covenants, acts of insolvency and default on indebtedness held by third parties (subject to certain limitations and cure periods). Amendment to Existing WF ABL Revolving Facility On November 30, 2022, we also entered into an Amendment (the “Amendment”) to our existing asset-based revolving loan facility with Wells Fargo Bank, NA (the "WF ABL Revolving Facility") and term loan facility (the "WF Term Loan Facility" and together with the WF ABL Revolving Facility, the "WF Credit Facility"), dated as of January 31, 2020. The Amendment terminated the term loans thereunder in connection with the refinancing described above and permitted the entry into and the lien and guarantees related to the SLR Credit Agreement. The guarantees and liens existing in connection with the Wells Fargo Credit Agreement remained in place upon the closing of the SLR Credit Agreement with respect to the revolving asset-based loans under the Wells Fargo Credit Agreement. The Wells Fargo Credit Agreement was also amended to add Financial Covenants consistent with the SLR Credit Agreement. The principal amount of the loans continue to bear interest based on the base rate or the SOFR rate, plus an applicable margin. The Amendment increased the margin applicable to SOFR loans and letters of credit to a range of 5.00% to 5.50% from a range of 1.75% to 2.25% (based on the maximum revolver amount) and the margin applicable to base rate loans to a range of 4.00% to 4.50% from a range of 0.75% to 1.25% (based on the maximum revolver amount). Borrowings under the Wells Fargo Credit Agreement are scheduled to mature, and all outstanding amounts thereunder will be payable on October 29, 2026, unless the maturity is accelerated subject to the terms set forth in the Wells Fargo Credit Agreement or if there is an earlier maturity of the SLR Credit Agreement. Debt Summary We used the proceeds from the SLR Term Loan Facility to extinguish our existing $9.1 million WF Term Loan Facility, to pay transaction expenses, and for general corporate purposes. In connection with the extinguishment of the WF Fargo Term Loan Facility, we recorded a loss of $0.2 million as a component of Other, net in our Consolidated Statements of Operations. As of March 31, 2023, there was outstanding principal and accrued and unpaid interest totaled , with $30.0 million and $0.0 million under our SLR Term Loan Facility and WF Revolver, respectively. As of March 31, 2023, we were in compliance with the financial covenants of both the SLR Credit Agreement and WF Credit Agreement, and $14.9 million was available for borrowing under WF ABL Revolving Facility. As of March 31, 2023, our interest rate was 12.00% for the WF Revolver and 13.42% for the SLR Term Loan Facility. Payments due by period Total Less than 1 year 1-3 years 3-5 years More than 5 years Debt obligations, including interest $ 42,108 $ 6,087 $ 11,268 $ 24,753 $ — The balance sheet classification of the borrowings under the revolving loan facility has been determined in accordance with ASC 470, Debt . |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income Tax Expense Income (loss) from continuing operations before income taxes was as follows (in thousands): Year Ended March 31, 2023 2022 U.S. $ (101,458) $ (32,904) Non-U.S. 3,329 4,674 (Loss) income from continuing operations before income taxes $ (98,129) $ (28,230) Income tax expense (benefit) from continuing operations was as follows (in thousands): Year Ended March 31, 2023 2022 Current: U.S. federal $ (232) $ 362 U.S. state 124 (5) Non-U.S. 509 1,444 Total current 401 1,801 Deferred: U.S. federal 7,047 (6,881) U.S. state 1,959 (940) Non-U.S. (48) (6) Total deferred 8,958 (7,827) Income tax expense (benefit) $ 9,359 $ (6,026) Following is a reconciliation of the U.S. statutory federal income tax rate with our effective income tax rate for continuing operations: Year Ended March 31, 2023 2022 U.S. statutory income tax rate 21.0 % 21.0 % State tax, net of U.S. federal tax benefit 3.7 3.6 Non-U.S. income taxes — (0.8) Nondeductible operating expenses (1.5) (0.5) Foreign-derived intangible income deduction — — Section 162(m) limitation (0.1) (5.4) Non-deductible foreign employee stock compensation (0.1) (1.2) Non-deductible acquisition related expenses — (1.8) Research and development credit 0.2 2.3 Change in deferred tax measurement rate — 0.2 Change in uncertain tax positions (0.1) (1.0) Excess tax benefit or detriment from stock plans (0.5) 5.4 Change in valuation allowance (25.9) (0.4) Impairment of intangibles (6.2) — Capital losses — — Other — (0.1) Effective income tax rate (9.5) % 21.3 % The income tax expense from continuing operations for the year ended March 31, 2023 was primarily driven by the recording of a U.S. deferred tax asset valuation allowance in the amount of $25.4 million, which also affected the effective tax rate from continuing operations compared to the statutory rate. Deferred Income Taxes Individually significant components of deferred income tax assets and liabilities were as follows (in thousands): As of March 31, 2023 2022 Deferred income tax assets: Accrued liabilities $ 2,773 $ 5,828 Allowance for doubtful accounts 59 89 Inventory valuation 347 222 Capitalized indirect inventory costs 366 1,044 Stock-based compensation expense 715 895 Deferred rent 4,919 6,065 Deferred revenue 1,003 960 Interest expense 1,247 383 Net operating loss carryforward 13,979 2,194 Basis difference on long-lived assets 1,300 1,189 Section 174 capitalization 6,028 — Credit carryforward 667 1,048 Capital losses 25,791 25,744 Other 301 290 Gross deferred income tax assets 59,495 45,951 Valuation allowance (51,902) (26,510) Deferred income tax assets, net of valuation allowance 7,593 19,441 Deferred income tax liabilities: Prepaid advertising (29) (273) Other prepaids (191) (135) Basis difference of long-lived assets (2,631) (4,740) Deferred rent (4,440) (5,532) Other (1) (1) Deferred income tax liabilities (7,292) (10,681) Net deferred income tax assets $ 301 $ 8,760 Our deferred income tax assets and liabilities were recorded on our Consolidated Balance Sheets as follows (in thousands): As of March 31, 2023 2022 Deferred income tax assets, non-current $ 554 $ 8,760 Deferred income tax liabilities, non-current (253) — Net deferred income tax assets (liabilities) $ 301 $ 8,760 Valuation Allowance Under ASC Topic 740, Accounting for Income Taxes, we must periodically evaluate deferred tax assets to determine if it is more-likely-than-not that the future tax benefits will be realized. If the negative evidence outweighs the positive, a valuation allowance must be recognized to reduce the net carrying amount of the deferred tax assets to the amount more-likely-than-not to be realized. Evaluating the need for, and amount of, a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence on a jurisdiction-by-jurisdiction basis. Such judgments require us to interpret existing tax law and other published guidance as applied to our circumstances. As part of this assessment, we consider both positive and negative evidence. The weight given to the potential effect of positive and negative evidence must be commensurate with the extent to which the strength of the evidence can be objectively verified. We generally consider the following, but are not limited to, objectively verified evidence to determine the likelihood of realization of the deferred tax assets: • Our current financial position and our historical results of operations for recent years. We generally consider cumulative pre-tax losses in the three year period ending with the current quarter or a projected three year cumulative loss position within the next 12 months following the current quarter to be significant negative evidence. • A pattern of objectively-measured historical and current financial reporting loss trend is heavily weighted as a source of negative evidence. • Sources of taxable income of the appropriate character. Future realization of deferred tax assets is dependent on projected taxable income of the appropriate character. Future reversals of existing temporary differences are heavily weighted sources of objectively verifiable evidence. Projections of future taxable income exclusive of reversing temporary differences are a source of positive evidence only when the projections are combined with a history of recent profits and current financial trends and can be reasonably estimated. • Carry-back and carry-forward periods available. The carry-back and carry-forward periods permitted under the tax law are objectively verified evidence. • Tax planning strategies. Tax planning strategies can be, depending on their nature, heavily-weighted sources of objectively verifiable positive evidence when the strategies are available and can be reasonably executed. We consider tax planning strategies only if they are feasible and justifiable considering our current operations and our strategic plan. Tax planning strategies, if executed, may accelerate the recovery of a deferred tax asset so the tax benefit of the deferred tax asset can be carried back. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. In the first quarter of fiscal 2023, a significant new piece of objective negative evidence evaluated was the third year of cumulative losses projected within the next twelve months. Such objective evidence limits our ability to consider other subjective evidence, such as our projections for future growth. Based on this evaluation, in the first quarter of fiscal 2023, we concluded that it was no longer more likely than not that the tax benefits from the existing U.S deferred tax assets would be realized. Accordingly, we recorded a valuation allowance in the first quarter of fiscal 2023 against our domestic uncovered net deferred tax assets. We sustain the same position as of March 31, 2023 and, therefore, we continue to recognize a valuation allowance to reduce our U.S deferred tax assets to an anticipated realizable value. We recognized a $25.4 million valuation allowance in fiscal 2023 primarily against our domestic uncovered net deferred tax assets. As of March 31, 2023, we had a valuation allowance against net deferred income tax assets of $51.9 million. Of the valuation allowance, $51.6 million relates to domestic valuation allowance and the remainder of $0.3 million relates to certain foreign intangible assets and net operating loss carry-forwards. Should it be determined in the future that it is more likely than not that our deferred income tax assets will be realized, an appropriate portion of valuation allowance would be released during the period in which such an assessment is made. Income Tax Carryforwards As of March 31, 2023, we had the following income tax carryforwards (in millions): Amount Expires in Net operating loss carryforwards U.S. federal $ 50.6 Indefinite U.S. state $ 47.7 2028 - 2043 U.S. state $ 11.5 Indefinite Capital loss carryforwards U.S federal and state $ 101.3 2025 Income tax credit carryforwards U.S. federal $ 0.4 2043 U.S. state $ 0.4 Indefinite The timing and manner in which we are permitted to utilize our net operating loss carryforwards may be limited by Internal Revenue Code Section 382, Limitation on Net Operating Loss Carry-forwards and Certain Built-in-Losses Following Ownership Change . Unrecognized Tax Benefits Following is a reconciliation of gross unrecognized tax benefits from uncertain tax positions, excluding the impact of penalties and interest (in thousands): Year Ended March 31, 2023 2022 Balance at beginning of period $ 1,782 $ 2,374 Additions for tax positions taken in prior years — 133 Reductions for tax positions taken in prior years (26) — Additions for tax positions related to the current year 59 103 Lapses of statutes of limitations — — Other (108) (828) Balance at end of period $ 1,707 $ 1,782 During fiscal 2023, we completed a tax deregistration of a foreign entity that was part of the discontinued operations. As a result, the previously unrecognized tax benefit and associated accrued interest and penalty in the amount of $2.1 million was released and recorded as a component of income taxes from discontinued operations. As of March 31, 2023, of the $1.7 million of gross unrecognized tax benefits from uncertain tax positions outstanding as of March 31, 2023, $1.6 million would affect our effective tax rate if recognized. We recorded tax-related interest and penalty expense (benefit) of $(1.9) million for 2023 and $0.1 million for 2022. We had a cumulative liability for interest and penalties related to uncertain tax positions as of March 31, 2023 and 2022 of $0.4 million and $2.3 million, respectively. Our U.S. federal income tax returns for 2008 through 2016 are currently open for limited review and for 2017 through 2023 are open for full review by the U.S. Internal Revenue Service. Further Our state income tax returns for 2008 through 2023 are open to review, depending on the respective statute of limitation in each state. Currently, our U.S. corporate income tax returns for 2016 through 2019 are under IRS examination. In addition, we file income tax returns in several non-U.S. jurisdictions with varying statutes of limitation. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated other comprehensive income (loss), net of applicable taxes, reported on our Consolidated Balance Sheets consists of foreign currency translation adjustments. The following table sets forth the changes in accumulated other comprehensive income (loss), net of tax (in thousands) for the periods presented: Foreign Currency Translation Adjustments Accumulated Other Comprehensive (Loss) Income Balance, March 31, 2021 (155) (155) Current period other comprehensive loss before reclassifications (372) (372) Balance, March 31, 2022 (527) (527) Current period other comprehensive loss before reclassifications (951) (951) Balance, March 31, 2023 $ (1,478) $ (1,478) |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION 2015 Long-Term Incentive Plan Our 2015 Long-Term Incentive Plan (the “2015 Plan”) is administered by the Compensation Committee of our Board of Directors and authorizes us to grant various types of stock-based awards including: stock options, stock appreciation rights, RSAs, RSUs, and PSUs. Stock options granted under the 2015 Plan shall not have an exercise price less than the fair market value of our common stock on the date of the grant. The exercise price of a stock option or stock appreciation right may not be reduced without shareholder approval. Stock options generally vest over periods of three Upon adoption, there were approximately 4.8 million shares available for issuance under the 2015 Plan. The number of shares available for issuance upon adoption of the 2015 Plan included new shares approved, plus any shares of common stock which were previously reserved for issuance under our preceding plan that were not subject to grant as of April 28, 2015, or as to which the stock-based compensation award is forfeited on or after April 28, 2015. The number of shares available for issuance is reduced by (i) two shares for each share delivered in settlement of any stock appreciation rights, RSA, RSU or PSU awards, and (ii) one share for each share delivered in settlement of a stock option award. In no event shall more than 1.0 million aggregate shares of common stock subject to stock options, stock appreciation rights, RSA, RSU or PSU awards be granted to any one participant in any one year under the 2015 Plan. 2015 Long-Term Incentive Plan, As Amended On May 1, 2020, our shareholders approved the amendment and restatement of our 2015 Plan (the "Amended 2015 Plan"). Prior to the amendment, there were approximately 4.8 million shares available for issuance under the 2015 Plan, 3.5 million shares originally reserved under the previous Long Term Incentive Plan and 1.3 million shares of common stock authorized under the 2015 Plan. The Amended 2015 Plan added an additional 2.0 million shares to be reserved for issuance. Upon adoption, there were approximately 6.8 million shares available for issuance under the Amended 2015 Plan. The maximum aggregate number of shares of common stock subject to stock options, stock appreciation rights, restricted stock or stock unit awards which may be granted to any one participant in any one year under the Amended 2015 Plan is 1.0 million. The aggregate number of shares available for issuance under the Amended 2015 Plan will be reduced by one and half (1.5) shares for each share delivered in settlement of any stock appreciation rights, restricted stock, restricted stock unit or performance unit award, and one (1) share for each share delivered in settlement of a stock option award. At March 31, 2023, we had 1.2 million shares available for future grant under our Amended 2015 Plan, and a total of 5.0 million shares of our common stock are reserved for future issuance pursuant to awards currently outstanding under the Amended 2015 Plan and our previous plan combined. Stock Option Activity Stock option activity was as follows (shares in thousands): Options Outstanding Weighted- Outstanding at March 31, 2022 471 $ 1.82 Granted 1,400 1.61 Forfeited, canceled or expired (66) 2.43 Outstanding at March 31, 2023 1,805 1.63 Certain information regarding options outstanding at March 31, 2023 was as follows: Options Outstanding Options Exercisable Options Vested and Expected to Vest Number (in thousands) 1,805 470 1,805 Weighted-average exercise price $ 1.63 $ 1.78 $ 1.63 Aggregate intrinsic value (in thousands) $ — $ — $ — Weighted average remaining contractual term (in years) 8.2 4.4 8.2 RSA Activity Compensation expense for RSAs is recognized over the estimated requisite service period. Following is a summary of RSA activity (shares in thousands): RSAs Outstanding Weighted- Outstanding at March 31, 2022 55 $ 15.88 Granted 98 2.10 Vested (26) 16.27 Outstanding at March 31, 2023 127 5.23 RSU Activity Compensation expense for RSUs is recognized over the estimated requisite service period. Following is a summary of RSU activity (shares in thousands): RSUs Outstanding Weighted- Outstanding at March 31, 2022 1,351 $ 8.39 Granted 515 2.10 Forfeited, canceled or expired (284) 7.46 Vested (713) 6.16 Outstanding at March 31, 2023 869 6.80 PSU Activity Performance-based share units (PSU) require achievement of certain performance criteria, which are predefined by the Compensation Committee of the Board of Directors at time of grant. Compensation expense for PSUs is recognized over the estimated requisite service period based on the number of PSUs ultimately expected to vest. In February 2018, we granted PSU awards to certain of our executive officers and management team covering a total of 119,351 shares of our common stock. The fair value of these performance based units use the quoted market value of the Company's stock on the grant date. The PSUs vest based on achievement of goals established for growth in operating income as a percentage of net revenue and return on invested capital over the three year performance period ended December 31, 2020. The number of shares vesting could range from 60% of the PSU awards if minimum thresholds are achieved to a maximum of 150%. The performance criteria was not met and all 119,351 shares were forfeited. In May 2020, we granted PSU awards to certain of our executive officers and management team covering a total of 262,999 shares of our common stock. The fair value of these performance based units was determined using the Monte Carlo valuation model. The PSUs vest based on achievement of the goal that measures our relative total shareholder return against pre-approved peers over a three year performance period ending May 5, 2023. The number of shares that ultimately vest following conclusion of the performance period will be determined based on the level at which the financial goals are achieved. The number of shares vesting can range from 60% of the PSU awards if minimum thresholds are achieved to a maximum of 150%. These awards are expected to vest at 0% achievement. As of March 31, 2023, approximately 164,133 PSU shares remained, net of actual forfeitures to date. In May and September 2021, we granted PSU awards to certain of our executive officers and management team covering a total of 510,404 shares of our common stock. The fair value of these performance based units use the quoted market value of the Company's stock on the grant date. The PSUs vest based on achievement of our goal regarding paid subscribers, cumulative revenue and cumulative adjusted operating income over a three year performance period ending May 14, 2024. The number of shares that ultimately vest following conclusion of the performance period will be determined based on the level at which the financial goals are achieved. The number of shares that vest can range from 30% of the PSU awards if minimum thresholds are achieved to a maximum of 200%. These awards are expected to vest at 0% achievement. As of March 31, 2023, 459,311 PSU shares remained, net of actual forfeitures to date. In February 2022, we granted PSU awards to certain of our management team covering a total of 271,938 shares of our common stock. The fair value of these performance based units was determined using the Monte Carlo valuation model. The PSUs vest based on achievement of the goal of the closing price for our common stock reaching $10 and having a volume weighted average price of at least $10 for 60 consecutive trading days at any time thereafter during the three year period ending February 23, 2025. The number of shares that ultimately vest following conclusion of the performance period will be determined based on the level at which the financial goals are achieved. The number of shares vesting can range from 50% of the PSU awards if minimum thresholds are achieved to a maximum of 100%. These awards are expected to vest at 0% achievement. As of March 31, 2023, 168,566 PSU shares remained, net of actual forfeitures to date. In August 2022, we granted PSU awards to certain of our management team covering a total of 463,200 shares that could be paid out in a combination of cash equivalent shares that will be subject to liability accounting or shares of our common stock. The fair value of these performance based units use the quoted market value of the Company's stock on the grant date. The PSUs vest based on achievement of paid subscribers and net promoter score of the Bowflex brand measured at March 31, 2025. The number of shares that ultimately vest following conclusion of the performance period will be determined based on the level at which the financial goals are achieved. The number of shares vesting can range from 30% of the PSU awards if minimum thresholds are achieved to a maximum of 200%. These awards are expected to vest at 50% achievement. As of March 31, 2023, 377,654 PSU shares remained, net of actual forfeitures to date. Following is a summary of PSU activity (shares in thousands): PSUs Outstanding Weighted- Outstanding at March 31, 2022 982 $ 8.87 Granted and additional goal shares awarded 463 2.10 Forfeited, canceled or expired (276) 6.04 Outstanding at March 31, 2023 1,169 7.02 Stock-Based Compensation Stock-based compensation expense, primarily included in general and administrative expense, was as follows (in thousands): Year Ended March 31, 2023 2022 Stock options $ 190 $ 177 RSAs 213 393 RSUs 3,598 4,053 PSUs (238) 1,432 ESPP 122 207 $ 3,885 $ 6,262 Certain other information regarding our stock-based compensation was as follows (in thousands): Year Ended March 31, 2023 2022 Total intrinsic value of stock options exercised $ — $ 2,273 Fair value of RSUs vested 1,549 8,288 As of March 31, 2023, unrecognized compensation expense for outstanding, but unvested stock-based awards was $5.6 million, which is expected to be recognized over a weighted average period of 1.3 years. Employee Stock Purchase Plan Our Employee Stock Purchase Plan (the “ESPP”) is administered by the Compensation Committee of our Board of Directors and provides eligible employees with an opportunity to purchase shares of our common stock at a discount using payroll deductions. The ESPP authorizes the issuance of up to 0.5 million shares of our common stock, subject to adjustment as provided in the ESPP for stock splits, stock dividends, recapitalizations and other similar events. Pursuant to the ESPP, and subject to certain limitations specified therein, eligible employees may elect to purchase shares of our common stock in one or more of a series of offerings conducted pursuant to the procedures set forth in the ESPP at a purchase price equal to 90% of the lower of the fair market value of the common stock on the first trading day of the offering period or on the last day of the offering period. Offering periods commence on May 15 and November 15 of each year and are six-months in duration. Purchases under the ESPP may be made exclusively through payroll deductions. Persons eligible to participate in the ESPP generally include employees who have been employed for at least three months prior to the applicable offering date and who, immediately upon purchasing shares under the ESPP, would own directly or indirectly, an aggregate of less than 5% of the total combined voting power or value of all outstanding shares of our common stock. Compensation expense for the ESPP is recognized over the six-month offering period based on the total estimated participant contributions and number of shares expected to be purchased. ESPP activity was as follows (shares in thousands): Shares Available for Issuance Weighted- Weighted-Average Discount per Share Balance at March 31, 2022 153 Employee shares purchased (119) $ 11.65 $ 1.28 Balance at March 31, 2023 34 Assumptions used in calculating the fair value of stock option grants and employee stock purchases were as follows: Year Ended March 31, 2023 2022 ESPP ESPP Dividend yield —% —% Risk-free interest rate 3.1% —% Expected life (years) N/A N/A Expected volatility 73% 67% Dividend yield is based on our current expectation that no dividend payments will be made in future periods. Risk-free interest rate is the U.S. Treasury zero-coupon rate, as of the grant date, for issues having a term approximately equal to the expected life of the stock option. For the ESPP, it is the U.S. Treasury six-month constant maturities rate, as of the offering date. Expected life is the period of time over which stock options are expected to remain outstanding. We calculate expected term based on the average of the sum of the requisite service periods and the full contractual term. Expected volatility is the percentage amount by which the price of our common stock is expected to fluctuate annually during the estimated expected life for stock options. Expected price volatility is calculated using historical daily closing prices over a period matching the weighted-average expected life for stock options, as management believes such changes are the best indicator of future volatility. For the ESPP, expected volatility is the percentage amount by which the price of our common stock is expected to fluctuate semi-annually during the offering period. |
(Loss) Income Per Share
(Loss) Income Per Share | 12 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
(Loss) Income Per Share | (LOSS) INCOME PER SHARE The weighted average numbers of shares outstanding used to compute (loss) income per share amounts were as follows (in thousands): Year Ended March 31, 2023 2022 Shares used for basic per share calculations 31,585 31,029 Dilutive effect of outstanding options, RSUs, and PSUs — — Shares used for diluted per share calculations 31,585 31,029 The weighted average numbers of shares outstanding listed in the table below were dilutive and are excluded from the computation of diluted per share when there is a loss from continuing operations, as such, the exercise or conversion of any potential shares would increase the number of shares in the denominator and results in a lower income (loss). These shares may be dilutive potential common shares in the future (in thousands): Year Ended March 31, 2023 2022 Stock options 38 463 RSUs 161 885 PSUs 4 — Total potential dilutive shares excluded due to net loss 203 1,348 The weighted average numbers of shares outstanding listed in the table below were anti-dilutive and excluded from the computation of diluted income (loss) per share. In the case of RSUs, this is because unrecognized compensation expense exceeds the current value of the awards (i.e., grant date market value was higher than current average market price). In the case of stock options, this is because the average market price did not exceed the exercise price. These shares may be anti-dilutive potential common shares in the future (in thousands): Year Ended March 31, 2023 2022 Stock options 579 2 RSUs 987 336 Total anti-dilutive shares excluded 1,566 338 |
401(k) Savings Plan
401(k) Savings Plan | 12 Months Ended |
Mar. 31, 2023 | |
Retirement Benefits [Abstract] | |
401(k) Savings Plan | 401(k) SAVINGS PLAN We sponsor a 401(k) savings plan that allows eligible employees to contribute a certain percentage of their salary. Employees are automatically enrolled within the first month of employment and have the ability to opt out. As a safe harbor plan sponsor, we are subject to non-discretionary matching contributions. Currently, we match 100% of the employee's first 1% of eligible pay contributed plus 50% of eligible pay contributed on the next 5%, for a maximum employer matching of 3.5%. Employees with less than one year of employment do not get any vesting employer contribution match. For employees with one Year Ended March 31, 2023 2022 401(k) matching contributions $ 1,152 $ 1,062 |
Segment Information
Segment Information | 12 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT AND ENTERPRISE-WIDE INFORMATION We have two operating segments - Direct and Retail. There were no changes in our operating segments during the year ended March 31, 2023. We evaluate performance using several factors, of which the primary financial measures are net sales and reportable segment contribution. Contribution is the measure of profit or loss, defined as net sales less product costs and directly attributable expenses. Directly attributable expenses include selling and marketing expenses, general and administrative expenses, and research and development expenses that are directly related to segment operations. Segment assets are those directly assigned to an operating segment's operations, primarily accounts receivable, inventories, goodwill and other intangible assets. Unallocated assets primarily include cash and cash equivalents, available-for-sale securities, derivative securities, shared information technology infrastructure, distribution centers, corporate headquarters, prepaids and other current assets, deferred income tax assets and other assets. Capital expenditures directly attributable to the Direct and Retail segments were not significant in any period. Following is summary information by reportable segment (in thousands): Year Ended March 31, 2023 2022 Net Sales: Direct $ 139,289 $ 221,726 Retail 144,113 364,069 Unallocated royalty 3,371 3,739 Consolidated net sales $ 286,773 $ 589,534 Contribution: Direct $ (29,626) $ (15,711) Retail (5,720) 44,831 Unallocated royalty 3,371 3,739 Consolidated contribution $ (31,975) $ 32,859 Reconciliation of consolidated contribution to (loss) income from continuing operations: Consolidated contribution $ (31,975) $ 32,859 Amounts not directly related to segments: Operating expenses (61,386) (58,175) Other expense, net (4,768) (2,914) Income tax (benefit) expense 9,359 (6,026) (Loss) income from continuing operations $ (107,488) $ (22,204) Depreciation and amortization expense: Direct $ 4,691 $ 2,513 Retail 3,994 4,381 Unallocated corporate 2,418 1,721 Total depreciation and amortization expense $ 11,103 $ 8,615 As of March 31, Assets: 2023 2022 Direct $ 50,493 $ 93,554 Retail 58,214 144,683 Unallocated corporate 54,825 75,808 Total assets $ 163,532 $ 314,045 There are no material long-lived assets held outside of the U.S. During the periods presented, the following customers accounted for 10% or more of total net sales as follows: Year Ended March 31, 2023 2022 Amazon.com 19.3% 16.8% Best Buy * 13.6% *Less than 10% of total net sales. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Operating leases We lease property and equipment under non-cancellable operating leases which, in the aggregate, extend through 2029. Many of these leases contain renewal options and provide for rent escalations and payment of real estate taxes, maintenance, insurance and certain other operating expenses of the properties. For additional information related to leases, see Note 11, Leases . Guarantees, Commitments and Off-Balance Sheet Arrangements As of March 31, 2023, we had standby letters of credit of $1.6 million. We have long lead times for inventory purchases and, therefore, must secure factory capacity from our vendors in advance. As of March 31, 2023, we had approximately $12.1 million, compared to $39.8 million as of March 31, 2022, in non-cancelable market-based purchase obligations, primarily for inventory purchases expected to be received within the next twelve months. Purchase obligations can vary from quarter-to-quarter and versus the same period in prior years due to a number of factors, including the number of products that are shipped directly to Retail customer warehouses versus through the Company warehouses. As of March 31, 2023, we had no outstanding letters of credit with any of our vendors. In the ordinary course of business, we enter into agreements that require us to indemnify counterparties against third-party claims. These may include: agreements with vendors and suppliers, under which we may indemnify them against claims arising from use of their products or services; agreements with customers, under which we may indemnify them against claims arising from their use or sale of our products; real estate and equipment leases, under which we may indemnify lessors against third-party claims relating to the use of their property; agreements with licensees or licensors, under which we may indemnify the licensee or licensor against claims arising from their use of our intellectual property or our use of their intellectual property; and agreements with parties to debt arrangements, under which we may indemnify them against claims relating to their participation in the transactions. The nature and terms of these indemnification obligations vary from contract to contract, and generally a maximum obligation is not stated within the agreements. We hold insurance policies that mitigate potential losses arising from certain types of indemnification obligations. Management does not deem these obligations to be significant to our financial position, results of operations or cash flows and, therefore, no related liabilities were recorded as of March 31, 2023. Legal Matters From time to time, in the ordinary course of business, we may be involved in various claims, lawsuits and other proceedings. These legal proceedings involve uncertainty as to the eventual outcomes and losses which may be realized when one or more future events occur or fail to occur. Litigation and jury verdicts are, to some degree, inherently unpredictable, and although we have determined that a loss is not probable in connection with any current legal proceeding except for the noted one below, it is reasonably possible that a loss may be incurred in connection with proceedings to which we are a party. Assessment of whether incurrence of a loss is probable, or a reasonable possibility, in connection with a particular proceeding, and estimation of the loss, or a range of loss, involves complex judgments and numerous uncertainties. Management is unable to estimate a range of reasonably possible losses related to litigation in which the damages sought are indeterminate, or the legal and factual basis for the relevant claims have not been developed with specificity. During the second quarter of fiscal 2022, we recorded a $4.7 million loss contingency related to a legal settlement involving a class action lawsuit related to advertisement of our treadmills. The settlement includes damages, a one-year free membership to JRNY ® , and administrative fees and was included as a component of general and administrative on our Consolidated Statements of Operations. On June 27, 2022, the Court approved the settlement and no appeals were filed. We paid the settlement damages and related administrative fees during the second quarter of fiscal 2023. We regularly monitor our estimated exposure to these contingencies and, as additional information becomes known, may change our estimates accordingly. We evaluate, on a quarterly basis, developments in legal proceedings, investigations or claims that could affect the amount of any accrual, as well as any developments that would make a loss probable or reasonably possible, and whether the amount of a probable or reasonably possible loss is estimable. Among other factors, we evaluate the advice of internal and external counsel, the outcomes from similar litigation, current status of the lawsuits (including settlement initiatives), legislative developments and other factors. Due to the numerous variables associated with these judgments and assumptions, both the precision and reliability of the resulting estimates of the related loss contingencies are subject to substantial uncertainties. As of the date of filing of this Annual Report on Form 10-K, we were not involved in any other material legal proceedings. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Entry into Amended Term Loan Facility On April 25, 2023, the Company entered into an amendment (the “ Term Loan Amendment ”) by and among the Company, certain of its subsidiaries, Crystal Financial LLC (d/b/a SLR Credit Solutions), a Delaware limited liability company, as administrative agent (“ SLR ”) and the lenders party thereto, which amended the Company’s existing Term Loan Credit Agreement, dated as of November 30, 2022 (the “ Existing Term Loan Credit Agreement ” and, as amended by the Term Loan Amendment, the “ Term Loan Credit Agreement ”), by and among the Company, certain of its subsidiaries, SLR and the lenders party thereto. Capitalized terms used but not defined in this section of this report have the meanings ascribed to such terms in the Term Loan Credit Agreement. The Term Loan Amendment will permit the Company to enter into certain asset disposition transactions (the “ Specified Transactions ”) and a license amendment transaction (the “ License Amendment Transaction ”), subject to satisfaction of the terms and conditions set forth therein. In connection therewith, the minimum excess Availability covenant will step-down from the greater of: $10.0 million and 12.5% of the Combined Line Cap, to the greater of: (a) $9.0 million and 12.5% of the Combined Line Cap after the consummation of the first Specified Transaction and (b) $7.0 million and 12.5% of the Combined Line Cap after the consummation of each subsequent Specified Transaction. The Company will prepay $11.7 million for certain Obligations under the Term Loan Credit Agreement with the Net Cash Proceeds received from the consummation of the Specified Transactions and the License Amendment Transaction. Other than as specifically provided in the Term Loan Amendment, the Term Loan Amendment had no effect on any schedules, exhibits or attachments to the Term Loan Credit Agreement and the Guaranty and Security Agreements related to the Term Loan Credit Agreement remain in effect. Amendment to Existing ABL Credit Agreement On April 25, 2023, the Company entered into an amendment (the “ ABL Amendment ”) by and among the Company, Wells Fargo Bank, National Association, a national association, as agent (“ Wells Fargo ”) and the lenders party thereto, which amended the Company’s existing Credit Agreement, dated as of January 31, 2020 (the “ Existing ABL Credit Agreement ” and, as amended by the ABL Amendment, the “ ABL Credit Agreement ”), by and among the Company, Wells Fargo and the lenders party thereto. Capitalized terms used but not defined in this section of this report have the meanings ascribed to such terms in the ABL Credit Agreement. The ABL Amendment will permit the Company to enter into the Specified Transactions and the License Amendment Transaction, subject to satisfaction of the terms and conditions set forth therein. In connection therewith, the minimum excess Availability covenant will step-down from the greater of: $10.0 million and 12.5% of the Combined Line Cap, to the greater of: (a) $9.0 million and 12.5% of the Combined Line Cap after the consummation of the first Specified Transaction and (b) $7.0 million and 12.5% of the Combined Line Cap after the consummation of each subsequent Specified Transaction. In addition, the ABL Amendment will reduce the maximum revolving loan commitment amount from $100 million to $60 million. Other than as specifically provided in the ABL Amendment, the ABL Amendment had no effect on any schedules, exhibits or attachments to the ABL Credit Agreement and the Guaranty and Security Agreement related to the ABL Credit Agreement remains in effect. Sale of Intangible Assets On May 1, 2023, the Company completed the sale of intellectual property for $10.5 million as part of its ongoing comprehensive strategic review. The sale of these assets, which included the Nautilus brand trademark assets and related licenses, will continue to streamline the Company’s brand focus and enhance its financial flexibility. The carrying value of the intangible assets sold was $3.7 million and the resulting gain, net of transaction costs, will be recorded in Other Income for the quarter ended June 30, 2023. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and relate to the Company and its subsidiaries, all of which are wholly-owned, directly or indirectly. Intercompany transactions and balances have been eliminated in consolidation. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Unless indicated otherwise, all information regarding our operating results pertain to our continuing operations. |
Discontinued Operation | Discontinued Operations Results from discontinued operations relate to the disposal of our former Nautilus ® Commercial business, which was completed in April 2011. We reached substantial completion of asset liquidation at December 31, 2012. Although there was no revenue related to our former Commercial business from January 1, 2020 through March 31, 2023, we continued to have product liability and other legal expenses associated with product previously sold into the Commercial channel. Results of operations related to the Commercial business have been presented in the consolidated financial statements as discontinued operations for all periods presented. |
Critical Accounting Estimates | Use of Management's Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities in the financial statements. Our critical accounting estimates relate to goodwill and other long-term assets. Actual results could differ from our estimates. |
Concentrations | Concentrations Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents held in bank accounts in excess of federally-insured limits and trade receivables. Trade receivables are generally unsecured and therefore collection is affected by the economic conditions in each of our principal markets. We rely on third-party contract manufacturers in Asia for substantially all of our products and for certain product engineering support. Business operations could be disrupted by natural disasters, difficulties in transporting products from non-U.S. suppliers, as well as political, social or economic instability in the countries where contract |
Derivative Securities | Derivative Securities We enter into foreign exchange forward contracts to offset the earnings impacts of exchange rate fluctuations on certain monetary assets and liabilities. A hypothetical 10% increase in interest rates, or a 10% movement in the currencies underlying our foreign currency derivative positions, would have material impacts on our results of operations, financial position or cash flows. Gains and losses on foreign currency forward contracts are recognized in the Other, net line of our consolidated statements of operations. We do not enter into derivative instruments for any purpose other than to manage our interest rate or foreign currency exposure. That is, we do not engage in interest rate or currency exchange rate speculation using derivative instruments. For additional information, refer to Note 7, Derivatives . |
Trade Receivables | Trade ReceivablesAccounts receivable primarily consists of trade receivables due from our Retail segment customers. We determine an allowance for doubtful accounts based on historical customer experience and other currently available evidence. When a specific account is deemed uncollectible, the account is written off against the allowance. |
Inventories | Inventories Inventories are stated at the lower of cost and net realizable value ("NRV"), with cost determined based on the first-in, first-out method. We establish inventory allowances for excess, slow-moving and obsolete inventory based on inventory levels, expected product life and forecasted sales. Inventories are written down to NRV based on historical demand, competitive factors, changes in technology and product lifecycles. |
Property, plant and equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost, net of accumulated depreciation. Improvements or betterments which add new functionality or significantly extend the life of an asset are capitalized. Software costs related to an asset developed for internal use are capitalized after the preliminary project stage, management has committed to the completion of the project and it is probable the project will be complete and used as intended. Expenditures for maintenance and repairs are expensed as incurred. The cost of assets retired, or otherwise disposed of, and the related accumulated depreciation, are removed from the accounts at the time of disposal. Gains and losses resulting from asset sales and dispositions are recognized in the period in which assets are disposed. Depreciation is recognized, using the straight-line method, over the lesser of the estimated useful lives of the assets or, in the two four five |
Goodwill | Goodwill Goodwill consisted of the excess of acquisition consideration over the fair values of net assets acquired in business combinations. It was not amortized, but rather is tested at the reporting unit level at least annually for impairment or more frequently if triggering events or changes in circumstances indicate impairment. Initially, qualitative factors are considered to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, entity-specific events, a sustained decrease in share price, and consideration of the difference between the fair value and carrying amount of a reporting unit as determined in the most recent quantitative assessment. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit's fair value is less than its carrying amount, a quantitative impairment analysis is performed. A quantitative impairment analysis involves estimating the fair value of a reporting unit using widely-accepted valuation methodologies including the income and market approaches, which requires the use of estimates and assumptions. We make significant assumptions and estimates about the extent and timing of future cash flows, discount rates, growth rates and terminal value. The cash flows are estimated over a significant future period of time, which makes those estimates and assumptions subject to an even higher degree of uncertainty. We also use market valuation models and other financial ratios, which require us to make certain assumptions and estimates regarding the applicability of those models to our assets and businesses. These estimates and assumptions include revenue growth rates, discounts rates, and determination of appropriate market comparables. If the fair value of the reporting unit is less than its carrying amount, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the goodwill. In accordance ASC 350 — Intangibles — Goodwill and Other |
Other intangible assets | Other Intangible Assets Indefinite-lived intangible assets consist of acquired trademarks, specifically trade names. Indefinite-lived intangible assets are stated at cost and are not amortized; instead, they are tested for impairment at least annually. We assess the value of indefinite-lived assets under either a qualitative or quantitative approach. Under a qualitative approach, we consider various market factors, including applicable key assumptions also used in the quantitative assessment listed below. If we determine that it is more likely than not that an indefinite-lived intangible assets is impaired, the quantitative approach is used to assess the asset fair value and the amount of the impairment. We review our indefinite-lived trademarks for impairment in the fourth quarter of each year or when events or changes in circumstances indicate that the assets may be impaired. The fair value of trademarks is estimated using the relief- from-royalty method to estimate the value of the cost savings and a discounted cash flows method to estimate the value of future income. The sum of these two values for each trademark is the fair value of the trademark. If the carrying amount of trademarks exceeds the estimated fair value, we calculate impairment as the excess of carrying amount over the estimate of fair value. We tested our indefinite-lived trademarks for impairment in the fourth quarter of fiscal 2023 and fiscal 2022 and no impairment was indicated. Definite-lived intangible assets, primarily acquired trade names, customer relationships, patents and patent rights, are stated at cost, net of accumulated amortization, and are evaluated for impairment as discussed below under Impairment of Long-Lived Assets . We recognize amortization expense for our definite-lived intangible assets on a straight-line basis over the estimated useful lives. For further information regarding other intangible assets, see Note 13, Other Intangible Assets . |
Impairment of long-lived assets | Impairment of Long-Lived Assets Long-lived assets, including property, plant and equipment and definite-lived intangible assets, are evaluated for impairment when events or circumstances indicate the carrying value may be impaired. When such an event or condition occurs, we estimate the future undiscounted cash flows to be derived from the use and eventual disposition of the asset to determine whether a potential impairment exists. If the carrying value exceeds estimated future undiscounted cash flows, we record impairment expense to reduce the carrying value of the asset to its estimated fair value. |
Equity Investments | Equity Investments |
Revenue Recognition and Adoption of Topic 606 | Revenue Recognition Our Direct and Retail revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For our Direct channel, control is transferred when products are shipped to customers as the entity has fulfilled the promise to transfer the goods. For Retail, control is transferred when contractual shipping terms are performed for the customer, generally upon our delivery to the carrier, in accordance with the terms of a sales contract. Our product sales and shipping revenues are reported net of promotional discounts, returns allowances, contractual rebates, and consideration payable to our customers. We estimate the revenue impact of retail sales incentive programs based on the planned duration of the program and historical experience. If the amount of sales incentives is reasonably estimable, the impact of such incentives is recorded at the later of the time the customer is notified of the sales incentive or the time of the sale. We estimate our liability for product returns based on historical experience, and record the expected customer refund liability as a reduction of revenue, and the expected inventory right of recovery, net of estimated scrap, as a reduction of cost of sales. If actual return costs differ from previous estimates, the amount of the liability and corresponding revenue are adjusted in the period in which such costs occur. We provide standard assurance-type warranties on our products which cover defective materials or nonconforming products, and is included with each product at no additional charge. In addition, we offer service-type/extended warranties for an additional fee to our Direct channel customers and Retail specialty and commercial customers. These warranty contracts provide coverage on labor and parts beyond the standard assurance warranty period. For our product sales, services, and freight and delivery fees, we are the principal in the contract and recognize revenue at a point in time. For our Direct channel extended warranty contracts, we are the agent and recognize revenue on a net basis because our performance obligation is to facilitate the arrangement between our customers and the third-party performance obligor. Sales of our subscriptions are deemed to be one performance obligation and we recognize revenue from these arrangements ratably over the subscription term as the performance obligation is satisfied. Revenue generated from subscriptions is recorded in our Direct segment. We offer free trials of subscriptions, bundled with product offerings (e.g., subscription for premium content). For these types of transactions that involve multiple performance obligations, the transaction price require allocations to the distinct performance obligation, as the free trial provides a material right. The transaction price is then allocated to each performance obligation based on relative standalone selling price. We determine stand-alone selling price based on prices charged to customers. Breakage is factored into the determination of the stand-alone selling price of a free trial. Breakage or activation rate, is defined as a percentage of those that never activate a free-trial offering. Some of our contracts with customers contain multiple performance obligations. For customer contracts that include multiple performance obligations, we account for individual performance obligations if they are distinct. We allocate the transaction price to each performance obligation based on its relative standalone selling price. We generally determine standalone selling price based on prices charged to customers on standalone sales or using expected cost plus margin. Significant judgement, such as breakage or activation rate, is factored into the determination of the stand-alone selling price of a subscription. Breakage or activation rate, is defined as a percentage of those that never activate a free-trial offering. Payment terms for our retail partners depend on the country of sale or agreement with the customer and payment is generally required within 90 days or less of shipment to or receipt by the retail partner. Payment is due at the time of sale for our e-commerce transactions. Deferred net revenue occurs because sales transactions include future update rights and performance obligations, which are subject to a recognition period. This balance increases from period to period by revenue that is deferred from current sales with these types of service obligations and is reduced by the recognition of revenue from prior sales that were deferred. Generally, revenue is recognized as the services are provided. Many Direct business customers finance their purchases through a third-party credit provider, for which we pay a commission or financing fee to the credit provider. Revenue for such transactions is recognized based on the sales price charged to the customer, net of promotional discounts, and the related commission or financing fee is included in selling and marketing expense. Exemptions and Elections We apply the practical expedient as per ASC 606-10-50-14 and do not disclose information related to remaining performance obligations due to their original expected durations are one year or less. We expense sales commissions when incurred because the amortization period would have been less than one year. These costs are recorded in selling and marketing expense. Shipping and Handling Fees Shipping and handling fees billed to customers are recorded net of discounts and included in both net sales and cost of sales. We generally account for our shipping and handling activities as a fulfillment activity, consistent with the timing of revenue recognition; that is, when our customer takes control of the transferred goods. |
Sales Discounts and Returns Allowance | Sales Discounts and Returns Allowance Product sales and shipping revenues are reported net of promotional discounts and return allowances. We estimate the revenue impact of retail sales incentive programs based on the planned duration of the program and historical experience. If the amount of sales incentives is reasonably estimable, the impact of such incentives is recorded at the later of the time the customer is notified of the sales incentive or the time of the sale. We estimate our liability for product returns based on historical experience, and record the expected customer refund liability as a reduction of revenue, and the expected inventory right of recovery, net of estimated scrap, as a reduction of cost of sales. If actual return costs differ from previous estimates, the amount of the liability and corresponding revenue are adjusted in the period in which such costs occur. |
Taxes collected from customers and remitted to governmental authorities | Taxes Collected from Customers and Remitted to Governmental AuthoritiesTaxes collected from customers and remitted to governmental authorities are recorded on a net basis and excluded from net sales. |
Cost of sales | Cost of Sales Cost of sales primarily consists of: inventory costs; royalties paid to third parties; employment and occupancy costs of warehouse and distribution facilities, including depreciation of improvements and equipment; transportation expenses; product warranty expenses; distribution information systems expenses; and allocated expenses for shared administrative functions. |
Product warranty obligations | Product Warranty Obligations Our products carry defined warranties for defects in materials or workmanship which, according to their terms, generally obligate us to pay the costs of supplying and shipping replacement parts to customers and, in certain instances, pay for labor and other costs to service products. Outstanding product warranty periods range from thirty days to, in limited circumstances, the lifetime of certain product components. We record a liability at the time of sale for the estimated costs of fulfilling future warranty claims. If necessary, we adjust the liability for specific warranty-related matters when they become known and are reasonably estimable. Estimated warranty expense is included in cost of sales, based on historical warranty claim experience and available product quality data. Warranty expense is affected by the performance of new products, significant manufacturing or design defects not discovered until after the product is delivered to the customer, product failure rates, and higher or lower than expected repair costs. If warranty expense differs from previous estimates, or if circumstances change such that the assumptions inherent in previous estimates are no longer valid, the amount of product warranty obligations is adjusted accordingly. |
Litigation and loss contingencies | Litigation and Loss Contingencies From time to time, we may be involved in various claims, lawsuits and other proceedings. These legal proceedings involve uncertainty as to the eventual outcomes and losses which may be realized when one or more future events occur or fail to occur. We record expenses for litigation and loss contingencies as a component of general and administrative expense when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. When a loss contingency is not both probable and estimable, we do not establish an accrued liability. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then we disclose an estimate of the possible loss or range of loss, if such estimate can be made, or disclose that an estimate cannot be made. For additional information, see Note 24, Commitments and Contingencies. |
Advertising and promotion | Advertising and PromotionWe expense our advertising and promotion costs as incurred. Production costs of television advertising commercials are recorded in prepaids and other current assets until the initial broadcast, at which time such costs are expensed. |
Research and development | Research and Development Internal research and development costs, which primarily consist of salaries and wages, employee benefits, expenditures for materials, and fees to use licensed technologies, are expensed as incurred. Third-party research and development costs for products under development or being researched, if any, are expensed as the contracted work is performed. Improvements or betterments which add new functionality or significantly extend the life of an asset are capitalized. Software costs related to an asset developed for internal use are capitalized after the preliminary project stage, management has committed to the completion of the project and it is probable the project will be complete and used as intended. |
Income taxes | Income Taxes We account for income taxes based on the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be in effect when the temporary differences are expected to be included, as income or expense, in the applicable tax return. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the enactment. Valuation allowances are provided against deferred income tax assets if we determine it is more likely than not that such assets will not be realized. Unrecognized Tax Benefits |
Foreign currency translation | Foreign Currency Translation We translate the accounts of our non-U.S. subsidiaries into U.S. dollars as follows: revenues, expenses, gains and losses are translated at weighted-average exchange rates during the year; and assets and liabilities are translated at the exchange rate on the balance sheet date. Translation gains and losses are reported in our Consolidated Balance Sheets as a component of accumulated other comprehensive loss. Gains and losses arising from foreign currency transactions, including transactions between us and our non-U.S. subsidiaries, are recorded as a component of other income (expense) in our Consolidated Statements of Operations. |
Fair value of financial instruments | Fair Value of Financial InstrumentsThe carrying values of cash, restricted cash, trade receivables, prepaids and other current assets, trade payables and accrued liabilities approximate fair value due to their short |
Share-Based Compensation | Stock-Based Compensation We recognize stock-based compensation expense on a straight-line basis over the applicable requisite service period, based on the grant-date fair value of the award. To the extent a stock-based award is subject to performance conditions, the amount of expense recorded in a given period, if any, reflects our assessment of the probability of achieving the performance targets. Fair value of stock options and shares subject to our employee stock purchase plan are estimated using the Black-Scholes valuation model; fair value of performance share unit ("PSU") awards, restricted stock unit ("RSU") awards and restricted stock awards ("RSA") is based on the closing market price on the day preceding the grant. Our accounting treatment of forfeiture expenses reversals is at the forfeiture date and do not estimate future forfeitures prior to their actual occurrence. Shares to be issued upon the exercise of stock options or the requisite service period of stock awards will come from newly issued shares. |
Income Per Share Amounts | Income (Loss) Per Share Amounts Basic income per share amounts were computed using the weighted average number of common shares outstanding. Diluted income per share amounts were calculated using the number of basic weighted average shares outstanding increased by dilutive potential common shares related to stock-based awards, as determined by the treasury stock method. If there is a loss from continuing operations, diluted earnings per share is the same as basic earnings per share. |
New Accounting Pronouncements | Recent Accounting Pronouncements Newly-Adopted Pronouncements ASU 2020-01 In January 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815).” The amendments in ASU 2020-01 clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. ASU 2020-01 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of ASU 2020-01 in the first quarter of fiscal 2023 did not have any effect on our financial position, results of operations or cash flows. Recently Issued Pronouncements Not Yet Adopted ASU 2016-13 In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In May 2019, the FASB issued ASU 2019-05, which provides entities to have certain instruments with an option to irrevocably elect the fair value option. In November 2019, the FASB issued ASU 2019-11, which provides clarification and addresses specific issues about certain aspects of ASU 2016-13. In March 2020, the FASB issued ASC 2020-03, which provides an update to clarify or address specific issues. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those years. We do not expect the adoption of this guidance would have a material impact on our financial position, results of operations or cash flows. |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair values of the net assets acquired and liabilities assumed and measurement period adjustments since September 17, 2021, the acquisition date (in thousands): Preliminary valuation at September 17, 2021 Measurement period adjustments Adjusted valuation at March 31, 2022 Cash $ 230 $ 637 $ 867 Accounts receivable 9 — 9 Prepaid expenses 15 (2) 13 Deferred tax assets 58 1 59 Developed technology (included in property, plant and equipment) 3,000 — 3,000 Identifiable assets acquired 3,312 636 3,948 Accrued liabilities 187 722 909 Unearned revenue 53 3 56 Deferred tax liabilities, non-current 591 — 591 Total liabilities assumed 831 725 1,556 Net identifiable assets acquired 2,481 (89) 2,392 Goodwill 24,508 2 24,510 Total assets acquired $ 26,989 $ (87) $ 26,902 |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Sales Discounts and Returns Allowance | Activity in our sales discounts and returns allowance was as follows (in thousands): Year Ended March 31, 2023 2022 Balance at beginning of period $ 12,179 $ 6,348 Charges to reserve 29,871 49,983 Reductions for sales discounts and returns (33,355) (44,152) Balance at end of period $ 8,695 $ 12,179 |
Restructuring and Exit Charges
Restructuring and Exit Charges (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The following table summarizes restructuring reserve activity (in thousands): Employee Severance and Benefits Third Party Costs Total Accrued liability as of March 31, 2022 $ — $ — $ — Charges / Accruals 1,657 892 2,549 (Payments) (547) (769) (1,316) Accrued liability as of March 31, 2023 $ 1,110 $ 123 $ 1,233 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Our revenues from contracts with customers disaggregated by revenue source, excluding sales-based taxes, were as follows (in thousands): Year Ended March 31, 2023 2022 Product sales $ 264,077 $ 567,914 Extended warranties and services 4,896 7,053 Royalty income 3,371 3,739 Other (1) 14,429 10,828 Net sales $ 286,773 $ 589,534 (1) Other revenue is primarily subscription revenue and freight and delivery. Our revenues disaggregated by geographic region, based on ship-to address, were as follows (in thousands): Year Ended March 31, 2023 2022 United States $ 232,139 $ 460,237 Canada 37,820 74,883 Europe, the Middle East and Africa 4,371 41,026 All other 12,443 13,388 Net sales $ 286,773 $ 589,534 |
Contract with Customer, Asset and Liability | The following table provides information about our liabilities from contracts with customers, primarily customer deposits and deferred revenue for which advance consideration is received prior to the transfer of control or the performance obligation is not satisfied. Revenue is recognized when transfer of control occurs. All customer deposits and deferred revenue received are short-term in nature, recognized over the next twelve months. Significant changes in contract liabilities balances, including revenue recognized in the reporting period that was included in opening contract liabilities, are shown below (in thousands): Year Ended March 31, 2023 2022 Balance at beginning of period $ 6,285 $ 5,551 Cash additions 1,258 4,537 Deferred revenue 7,228 6,875 Revenue recognition (9,696) (10,678) Balance at end of period $ 5,075 $ 6,285 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | We did not have any assets measured at fair value on a recurring basis as of March 31, 2023 or 2022. Liabilities measured at fair value on a recurring basis were as follows (in thousands): March 31, 2023 Level 1 Level 2 Level 3 Total Liabilities: Derivatives Foreign currency forward contracts $ — $ 141 $ — $ 141 Total liabilities at fair value $ — $ 141 $ — $ 141 March 31, 2022 Level 1 Level 2 Level 3 Total Liabilities: Derivatives Foreign currency forward contracts $ — $ 128 $ — $ 128 Total liabilities at fair value $ — $ 128 $ — $ 128 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | The fair value of our derivative instruments was included in our Consolidated Balance Sheets as follows (in thousands): Balance Sheet Classification As of March 31, 2023 2022 Derivative instruments not designated as cash flow hedges: Foreign currency forward contracts Accrued liabilities $ 141 $ 128 |
Derivative Instruments, Gain (Loss) | The effect of derivative instruments on our Consolidated Statements of Operations was as follows (in thousands): Statement of Operations Classification Year Ended March 31, 2023 2022 Derivative instruments not designated as cash flow hedges: Loss recognized in earnings Other, net $ (24) $ (30) Income tax expense (benefit) Income tax expense (benefit) 6 (7) For additional information related to our derivatives, see Notes 6 and 19 . |
Trade Receivables (Tables)
Trade Receivables (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Allowance for doubtful accounts | Trade receivables, net, consisted of the following (in thousands): As of March 31, 2023 2022 Trade receivables $ 22,107 $ 62,052 Allowance for doubtful accounts (618) (598) Trade receivables, net of allowance $ 21,489 $ 61,454 |
Schedule Of Changes In Allowance For Doubtful Accounts | Changes in our allowance for doubtful trade receivables were as follows (in thousands): Year Ended March 31, 2023 2022 Beginning balance $ 598 $ 1,177 Charges to bad debt expense 761 414 Write-offs, net (741) (993) Ending balance $ 618 $ 598 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net of Valuation Allowances | Our inventories consisted of the following (in thousands): As of March 31, 2023 2022 Finished goods $ 42,463 $ 104,988 Parts and components 4,136 6,202 Total inventories $ 46,599 $ 111,190 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following (in thousands): Estimated As of March 31, 2023 2022 Automobiles 5 $ 23 $ 23 Leasehold improvements 4 to 20 3,426 3,150 Computer software and equipment 2 to 7 57,223 44,852 Machinery and equipment 3 to 5 14,953 16,447 Furniture and fixtures 5 to 20 2,034 2,634 Work in progress (1) N/A 4,061 6,678 Total cost 81,720 73,784 Accumulated depreciation (48,931) (41,655) Total property, plant and equipment, net $ 32,789 $ 32,129 (1) Work in progress includes information technology assets and production tooling. |
Schedule Of Depreciation Expense | Depreciation expense was as follows (in thousands): Year Ended March 31, 2023 2022 Depreciation expense $ 11,042 $ 8,554 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Lease, Cost | The components of lease cost were as follows (in thousands): Year Ended March 31, 2023 2022 Operating lease expense $ 5,807 $ 5,822 Amortization of right of use assets of finance leases assets 114 57 Interest expense of finance lease liabilities 10 6 Total lease expense $ 5,931 $ 5,885 |
Lessee, Supplemental Cash Flows Information | Other information related to leases was as follows (dollars in thousands): As of March 31, 2023 2022 Supplemental cash flow information related to leases was as follows: Operating leases: Operating lease right-of-use assets $ 19,078 $ 23,620 Operating lease liabilities, non-current $ 16,380 $ 20,926 Operating lease liabilities, current 4,427 4,494 Total operating lease liabilities $ 20,807 $ 25,420 Finance leases: Property, plant and equipment, at cost $ 569 $ 569 Accumulated depreciation (171) (57) Property, plant and equipment, net $ 398 $ 512 Finance lease liabilities, non-current $ 282 $ 395 Finance lease liabilities, current 122 119 Total finance lease liabilities $ 404 $ 514 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flow from operating leases $ 6,226 $ 6,485 Finance cash flows from finance leases 119 60 Additional operating lease information: ROU assets obtained in exchange for operating lease obligations $ 100 $ 10,323 ROU assets obtained in exchange for finance lease obligations — 569 Reductions to ROU assets resulting from reductions to operating lease obligations 1,175 1,358 Increases to ROU assets resulting from remeasurement of lease obligations — — Weighted Average Remaining Lease Term: Operating leases 5.0 years 3.1 years Finance leases 3.5 years 4.5 years Weighted Average Discount Rate: Operating leases 5.05 % 4.65 % Finance leases 2.08 % 2.14 % |
Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities under non-cancelable leases were as follows (in thousands): As of March 31, 2023 Operating leases Finance leases Year ending: 2024 $ 5,382 $ 120 2025 5,648 120 2026 4,520 120 2027 2,361 59 Thereafter 5,796 — Total undiscounted lease payments 23,707 419 Less imputed interest (2,900) (15) Total lease liabilities $ 20,807 $ 404 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The rollforward of goodwill was as follows (in thousands): Direct Total Balance, March 31, 2021 $ — $ — Business acquisition (Note 2) 24,510 24,510 Balance, March 31, 2022 24,510 24,510 Goodwill impairment (24,510) (24,510) Balance, March 31, 2023 $ — $ — In accordance with ASC 350 — Intangibles — Goodwill and Other, we perform our goodwill and indefinite-lived trade names impairment valuations annually, on March 31, or sooner if triggering events are identified. While the fair value of our reporting units exceeded their respective carrying values as of March 31, 2022, we observed continued market volatility including significant declines in our market capitalization during the three month period ended June 30, 2022, identified as a triggering event. Our trailing 30-day average market capitalization was approximately $137 million at March 31, 2022 compared to $66 million, the trailing 30-day average, as of June 30, 2022. We performed an interim evaluation and a market capitalization reconciliation during the first quarter of fiscal 2023, which resulted in a non-cash goodwill impairment charge of $24.5 million. We assigned assets and liabilities to each reporting unit based on either specific identification or by using judgment for the remaining assets and liabilities that are not specific to a reporting unit. We determined the fair value of our reporting units our ASC 350 analysis using the market approach. In addition, we determined the fair value by adding a control premium observed from recent transactions of comparable companies to determine the reasonableness of that assumption and the fair values of the reporting units estimated in our ASC 350 analysis. Significant unobservable inputs and assumptions inherent in the valuation methodologies from Level 3 inputs were employed and include, but were not limited to, prospective financial information, growth rates, terminal value, royalty rates, discount rates, and comparable multiples from publicly traded companies in our industry. We compared the carrying amount of each reporting unit to its respective fair value. We reconciled the aggregate fair values of the reporting units determined in our ASC 350 analysis (as described above) to the enterprise market capitalization plus a reasonable control premium. This total value was compared to a trailing 30-day average market capitalization of approximately $66 million as of June 30, 2022. The market capitalization was allocated to the reporting units using the respective percentages of annual revenue. As a result, the market capitalization reconciliation analysis identified that the Direct reporting unit's fair value was significantly lower than its carrying value, resulting in a non-cash goodwill impairment charge of $24.5 million. |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Other intangible assets consisted of the following (in thousands): Estimated As of March 31, 2023 2022 Indefinite-lived trademarks (1) N/A $ 6,597 $ 9,052 Patents 7 to 24 1,043 1,043 7,640 10,095 Accumulated amortization - definite-lived intangible assets (853) (791) $ 6,787 $ 9,304 (1) During the first quarter of fiscal 2023, we identified impairment indicators with our indefinite-lived trademarks resulting in a $2.5 million non-cash intangible impairment charge. |
Amortization expense | Amortization expense was as follows (in thousands): Year Ended March 31, 2023 2022 Amortization expense $ 61 $ 61 |
Other Intangible Assets | OTHER INTANGIBLE ASSETS Other intangible assets consisted of the following (in thousands): Estimated As of March 31, 2023 2022 Indefinite-lived trademarks (1) N/A $ 6,597 $ 9,052 Patents 7 to 24 1,043 1,043 7,640 10,095 Accumulated amortization - definite-lived intangible assets (853) (791) $ 6,787 $ 9,304 (1) During the first quarter of fiscal 2023, we identified impairment indicators with our indefinite-lived trademarks resulting in a $2.5 million non-cash intangible impairment charge. Amortization expense was as follows (in thousands): Year Ended March 31, 2023 2022 Amortization expense $ 61 $ 61 Future amortization of definite-lived intangible assets is as follows (in thousands): 2024 $ 61 2025 61 2026 47 2027 3 2028 3 Thereafter 15 $ 190 |
Future amortization expense | Future amortization of definite-lived intangible assets is as follows (in thousands): 2024 $ 61 2025 61 2026 47 2027 3 2028 3 Thereafter 15 $ 190 |
Equity Investments (Tables)
Equity Investments (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Equity Securities without Readily Determinable Fair Value | The carrying value of our equity securities was included in the following line item in our consolidated balance sheets (in thousands): Measurement Alternative - No Readily Determinable Fair Value As of March 31, 2023 2022 Other assets $ 292 $ 1,000 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): As of March 31, 2023 2022 Payroll and related liabilities $ 5,220 $ 10,405 Deferred revenue 5,075 6,285 Reserves (1) 1,200 4,433 Accrued Tariffs 1,167 — Legal settlement (2) 5 4,250 Other 2,908 4,013 Total accrued liabilities $ 15,575 $ 29,386 (1) Reserves primarily consists of inventory, sales return, sales tax and product liability reserves. (2) Legal settlement is a loss contingency accrual related to a legal settlement involving a class action lawsuit related to advertisement of our treadmills. For further information, see Note 24, Commitments and Contingencies. |
Product Warranties (Tables)
Product Warranties (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | Changes in our product warranty obligations were as follows (in thousands): Year Ended March 31, 2023 2022 Balance at beginning of period $ 6,216 $ 8,651 Accruals 4,569 5,924 Payments (7,518) (8,359) Balance at end of period $ 3,267 $ 6,216 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity | Payments due by period Total Less than 1 year 1-3 years 3-5 years More than 5 years Debt obligations, including interest $ 42,108 $ 6,087 $ 11,268 $ 24,753 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Income (loss) from continuing operations before income taxes was as follows (in thousands): Year Ended March 31, 2023 2022 U.S. $ (101,458) $ (32,904) Non-U.S. 3,329 4,674 (Loss) income from continuing operations before income taxes $ (98,129) $ (28,230) |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) from continuing operations was as follows (in thousands): Year Ended March 31, 2023 2022 Current: U.S. federal $ (232) $ 362 U.S. state 124 (5) Non-U.S. 509 1,444 Total current 401 1,801 Deferred: U.S. federal 7,047 (6,881) U.S. state 1,959 (940) Non-U.S. (48) (6) Total deferred 8,958 (7,827) Income tax expense (benefit) $ 9,359 $ (6,026) |
Schedule of Effective Income Tax Rate Reconciliation | Following is a reconciliation of the U.S. statutory federal income tax rate with our effective income tax rate for continuing operations: Year Ended March 31, 2023 2022 U.S. statutory income tax rate 21.0 % 21.0 % State tax, net of U.S. federal tax benefit 3.7 3.6 Non-U.S. income taxes — (0.8) Nondeductible operating expenses (1.5) (0.5) Foreign-derived intangible income deduction — — Section 162(m) limitation (0.1) (5.4) Non-deductible foreign employee stock compensation (0.1) (1.2) Non-deductible acquisition related expenses — (1.8) Research and development credit 0.2 2.3 Change in deferred tax measurement rate — 0.2 Change in uncertain tax positions (0.1) (1.0) Excess tax benefit or detriment from stock plans (0.5) 5.4 Change in valuation allowance (25.9) (0.4) Impairment of intangibles (6.2) — Capital losses — — Other — (0.1) Effective income tax rate (9.5) % 21.3 % |
Schedule of Deferred Tax Assets and Liabilities | Individually significant components of deferred income tax assets and liabilities were as follows (in thousands): As of March 31, 2023 2022 Deferred income tax assets: Accrued liabilities $ 2,773 $ 5,828 Allowance for doubtful accounts 59 89 Inventory valuation 347 222 Capitalized indirect inventory costs 366 1,044 Stock-based compensation expense 715 895 Deferred rent 4,919 6,065 Deferred revenue 1,003 960 Interest expense 1,247 383 Net operating loss carryforward 13,979 2,194 Basis difference on long-lived assets 1,300 1,189 Section 174 capitalization 6,028 — Credit carryforward 667 1,048 Capital losses 25,791 25,744 Other 301 290 Gross deferred income tax assets 59,495 45,951 Valuation allowance (51,902) (26,510) Deferred income tax assets, net of valuation allowance 7,593 19,441 Deferred income tax liabilities: Prepaid advertising (29) (273) Other prepaids (191) (135) Basis difference of long-lived assets (2,631) (4,740) Deferred rent (4,440) (5,532) Other (1) (1) Deferred income tax liabilities (7,292) (10,681) Net deferred income tax assets $ 301 $ 8,760 Our deferred income tax assets and liabilities were recorded on our Consolidated Balance Sheets as follows (in thousands): As of March 31, 2023 2022 Deferred income tax assets, non-current $ 554 $ 8,760 Deferred income tax liabilities, non-current (253) — Net deferred income tax assets (liabilities) $ 301 $ 8,760 |
Summary of Income Tax Carryforwards | As of March 31, 2023, we had the following income tax carryforwards (in millions): Amount Expires in Net operating loss carryforwards U.S. federal $ 50.6 Indefinite U.S. state $ 47.7 2028 - 2043 U.S. state $ 11.5 Indefinite Capital loss carryforwards U.S federal and state $ 101.3 2025 Income tax credit carryforwards U.S. federal $ 0.4 2043 U.S. state $ 0.4 Indefinite |
Schedule of Reconciliatin of Gross Unrecognized Tax Benefits From Uncertain Tax Positions Roll Forward | Following is a reconciliation of gross unrecognized tax benefits from uncertain tax positions, excluding the impact of penalties and interest (in thousands): Year Ended March 31, 2023 2022 Balance at beginning of period $ 1,782 $ 2,374 Additions for tax positions taken in prior years — 133 Reductions for tax positions taken in prior years (26) — Additions for tax positions related to the current year 59 103 Lapses of statutes of limitations — — Other (108) (828) Balance at end of period $ 1,707 $ 1,782 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table sets forth the changes in accumulated other comprehensive income (loss), net of tax (in thousands) for the periods presented: Foreign Currency Translation Adjustments Accumulated Other Comprehensive (Loss) Income Balance, March 31, 2021 (155) (155) Current period other comprehensive loss before reclassifications (372) (372) Balance, March 31, 2022 (527) (527) Current period other comprehensive loss before reclassifications (951) (951) Balance, March 31, 2023 $ (1,478) $ (1,478) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stock option activity | Stock option activity was as follows (shares in thousands): Options Outstanding Weighted- Outstanding at March 31, 2022 471 $ 1.82 Granted 1,400 1.61 Forfeited, canceled or expired (66) 2.43 Outstanding at March 31, 2023 1,805 1.63 |
Stock options outstanding | Certain information regarding options outstanding at March 31, 2023 was as follows: Options Outstanding Options Exercisable Options Vested and Expected to Vest Number (in thousands) 1,805 470 1,805 Weighted-average exercise price $ 1.63 $ 1.78 $ 1.63 Aggregate intrinsic value (in thousands) $ — $ — $ — Weighted average remaining contractual term (in years) 8.2 4.4 8.2 |
RSU activity | Compensation expense for RSAs is recognized over the estimated requisite service period. Following is a summary of RSA activity (shares in thousands): RSAs Outstanding Weighted- Outstanding at March 31, 2022 55 $ 15.88 Granted 98 2.10 Vested (26) 16.27 Outstanding at March 31, 2023 127 5.23 RSU Activity Compensation expense for RSUs is recognized over the estimated requisite service period. Following is a summary of RSU activity (shares in thousands): RSUs Outstanding Weighted- Outstanding at March 31, 2022 1,351 $ 8.39 Granted 515 2.10 Forfeited, canceled or expired (284) 7.46 Vested (713) 6.16 Outstanding at March 31, 2023 869 6.80 |
PSU activity | Following is a summary of PSU activity (shares in thousands): PSUs Outstanding Weighted- Outstanding at March 31, 2022 982 $ 8.87 Granted and additional goal shares awarded 463 2.10 Forfeited, canceled or expired (276) 6.04 Outstanding at March 31, 2023 1,169 7.02 |
Stock-based compensation | Stock-based compensation expense, primarily included in general and administrative expense, was as follows (in thousands): Year Ended March 31, 2023 2022 Stock options $ 190 $ 177 RSAs 213 393 RSUs 3,598 4,053 PSUs (238) 1,432 ESPP 122 207 $ 3,885 $ 6,262 |
Other information regarding stock-based compensation | Certain other information regarding our stock-based compensation was as follows (in thousands): Year Ended March 31, 2023 2022 Total intrinsic value of stock options exercised $ — $ 2,273 Fair value of RSUs vested 1,549 8,288 |
ESPP Activity | ESPP activity was as follows (shares in thousands): Shares Available for Issuance Weighted- Weighted-Average Discount per Share Balance at March 31, 2022 153 Employee shares purchased (119) $ 11.65 $ 1.28 Balance at March 31, 2023 34 |
Assumptions | Assumptions used in calculating the fair value of stock option grants and employee stock purchases were as follows: Year Ended March 31, 2023 2022 ESPP ESPP Dividend yield —% —% Risk-free interest rate 3.1% —% Expected life (years) N/A N/A Expected volatility 73% 67% |
Income Per Share (Tables)
Income Per Share (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares Outstanding Used to Compute Income Per Share | The weighted average numbers of shares outstanding used to compute (loss) income per share amounts were as follows (in thousands): Year Ended March 31, 2023 2022 Shares used for basic per share calculations 31,585 31,029 Dilutive effect of outstanding options, RSUs, and PSUs — — Shares used for diluted per share calculations 31,585 31,029 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | These shares may be dilutive potential common shares in the future (in thousands): Year Ended March 31, 2023 2022 Stock options 38 463 RSUs 161 885 PSUs 4 — Total potential dilutive shares excluded due to net loss 203 1,348 The weighted average numbers of shares outstanding listed in the table below were anti-dilutive and excluded from the computation of diluted income (loss) per share. In the case of RSUs, this is because unrecognized compensation expense exceeds the current value of the awards (i.e., grant date market value was higher than current average market price). In the case of stock options, this is because the average market price did not exceed the exercise price. These shares may be anti-dilutive potential common shares in the future (in thousands): Year Ended March 31, 2023 2022 Stock options 579 2 RSUs 987 336 Total anti-dilutive shares excluded 1,566 338 |
401(k) Savings Plan (Tables)
401(k) Savings Plan (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan, Schedule Of Matching Contributions | Our matching contributions for the savings plan were as follows (in thousands): Year Ended March 31, 2023 2022 401(k) matching contributions $ 1,152 $ 1,062 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Summary Information by Reportable Segments | Following is summary information by reportable segment (in thousands): Year Ended March 31, 2023 2022 Net Sales: Direct $ 139,289 $ 221,726 Retail 144,113 364,069 Unallocated royalty 3,371 3,739 Consolidated net sales $ 286,773 $ 589,534 Contribution: Direct $ (29,626) $ (15,711) Retail (5,720) 44,831 Unallocated royalty 3,371 3,739 Consolidated contribution $ (31,975) $ 32,859 Reconciliation of consolidated contribution to (loss) income from continuing operations: Consolidated contribution $ (31,975) $ 32,859 Amounts not directly related to segments: Operating expenses (61,386) (58,175) Other expense, net (4,768) (2,914) Income tax (benefit) expense 9,359 (6,026) (Loss) income from continuing operations $ (107,488) $ (22,204) Depreciation and amortization expense: Direct $ 4,691 $ 2,513 Retail 3,994 4,381 Unallocated corporate 2,418 1,721 Total depreciation and amortization expense $ 11,103 $ 8,615 As of March 31, Assets: 2023 2022 Direct $ 50,493 $ 93,554 Retail 58,214 144,683 Unallocated corporate 54,825 75,808 Total assets $ 163,532 $ 314,045 |
Net Sales by Geographic Regions | During the periods presented, the following customers accounted for 10% or more of total net sales as follows: Year Ended March 31, 2023 2022 Amazon.com 19.3% 16.8% Best Buy * 13.6% *Less than 10% of total net sales. |
Business Acquisition (Details)
Business Acquisition (Details) $ in Thousands | 12 Months Ended | ||||
Sep. 17, 2021 USD ($) | Mar. 31, 2023 USD ($) business | Mar. 31, 2022 USD ($) | Mar. 31, 2021 USD ($) | Dec. 06, 2018 USD ($) | |
Business Acquisition [Line Items] | |||||
Number of Businesses Acquired | business | 0 | ||||
Goodwill | $ 0 | $ 24,510 | $ 0 | ||
VAY AG | |||||
Business Acquisition [Line Items] | |||||
Purchase price | $ 26,900 | ||||
Goodwill | 24,508 | 24,510 | $ 24,500 | ||
Acquisition costs | $ 1,000 | ||||
Business Combination, Contingent Consideration, Liability | $ 3,900 |
Business Acquisition - Assets A
Business Acquisition - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2023 | Sep. 17, 2021 | Mar. 31, 2021 | Dec. 06, 2018 | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 24,510 | $ 0 | $ 0 | ||
VAY AG | |||||
Business Acquisition [Line Items] | |||||
Cash | 867 | $ 230 | |||
Measurement period adjustments, cash | 637 | ||||
Accounts receivable | 9 | 9 | |||
Measurement period adjustments, accounts receivable | 0 | ||||
Prepaid expenses | 13 | 15 | |||
Measurement period adjustments, prepaid expenses | (2) | ||||
Deferred tax assets | 59 | 58 | |||
Measurement period adjustments, deferred tax assets | 1 | ||||
Developed technology (included in property, plant and equipment) | 3,000 | 3,000 | |||
Measurement period adjustments, developed technology (included in property, plant and equipment | 0 | ||||
Identifiable assets acquired | 3,948 | 3,312 | |||
Measurement period adjustments, identifiable assets acquired | 636 | ||||
Accrued liabilities | 909 | 187 | |||
Measurement period adjustments, accrued liabilities | 722 | ||||
Unearned revenue | 56 | 53 | |||
Measurement period adjustments, unearned revenue | 3 | ||||
Deferred tax liabilities, non-current | 591 | 591 | |||
Measurement period adjustments, deferred tax liabilities, non-current | 0 | ||||
Total liabilities assumed | 1,556 | 831 | |||
Measurement period adjustments, total liabilities assumed | 725 | ||||
Net identifiable assets acquired | 2,392 | 2,481 | |||
Measurement period adjustments, net identifiable assets acquired | (89) | ||||
Goodwill | 24,510 | 24,508 | $ 24,500 | ||
Measurement period adjustments, goodwill | 2 | ||||
Total assets acquired | 26,902 | $ 26,989 | |||
Measurement period adjustments, total assets acquired | $ (87) |
Significant Accounting Polici_4
Significant Accounting Policies (Details) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 USD ($) distributionChannel | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2023 USD ($) distributionChannel | Mar. 31, 2022 USD ($) | |
Significant Accounting Policies [Line Items] | |||||
Number of distribution channels | distributionChannel | 2 | 2 | |||
Goodwill impairment loss | $ 24,500,000 | $ 24,500,000 | $ 24,510,000 | $ 0 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||||
Marketing and advertising expense | $ 61,500,000 | 23,200,000 | |||
Prepaid advertising | 200,000 | 1,600,000 | 200,000 | 1,600,000 | |
Market Capitalization, Average Value | 66,000,000 | 66,000,000 | 137,000,000 | $ 66,000,000 | $ 137,000,000 |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Organization and Business Nautilus, Inc. and subsidiaries (collectively, "Nautilus," the "Company," "we" or "us") was founded in 1986 and incorporated in the State of Washington in 1993. Our headquarters are located in Vancouver, Washington. We empower healthier living through individualized connected fitness experiences to build a healthier world, one person at a time. Our principal business activities include designing, developing, sourcing and marketing high-quality cardio and strength fitness products and related accessories for consumer use, primarily in the U.S., Canada, and Europe. Our products are sold under some of the most-recognized brand names in the fitness industry: Bowflex ® , Schwinn ® , JRNY ® and Nautilus ® . We market our products through two distinct distribution channels, Direct and Retail, which we consider to be separate business segments. Our Direct business offers products directly to consumers through television advertising, catalogs and our websites. Our Retail business offers our products through a network of independent retail companies and specialty retailers with stores and websites located in the U.S. and internationally. We also derive a portion of our revenue from the licensing of our brands and intellectual property. Basis of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and relate to the Company and its subsidiaries, all of which are wholly-owned, directly or indirectly. Intercompany transactions and balances have been eliminated in consolidation. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Unless indicated otherwise, all information regarding our operating results pertain to our continuing operations. Discontinued Operations Results from discontinued operations relate to the disposal of our former Nautilus ® Commercial business, which was completed in April 2011. We reached substantial completion of asset liquidation at December 31, 2012. Although there was no revenue related to our former Commercial business from January 1, 2020 through March 31, 2023, we continued to have product liability and other legal expenses associated with product previously sold into the Commercial channel. Results of operations related to the Commercial business have been presented in the consolidated financial statements as discontinued operations for all periods presented. Use of Management's Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities in the financial statements. Our critical accounting estimates relate to goodwill and other long-term assets. Actual results could differ from our estimates. Concentrations Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents held in bank accounts in excess of federally-insured limits and trade receivables. Trade receivables are generally unsecured and therefore collection is affected by the economic conditions in each of our principal markets. We rely on third-party contract manufacturers in Asia for substantially all of our products and for certain product engineering support. Business operations could be disrupted by natural disasters, difficulties in transporting products from non-U.S. suppliers, as well as political, social or economic instability in the countries where contract manufacturers or their vendors or customers conduct business. While any such contract manufacturing arrangement could be replaced over time, the temporary loss of the services of any primary contract manufacturer could delay product shipments and cause a significant disruption in our operations. In the fiscal year ended March 31 2023 ("fiscal 2023") we had one vendor that accounted for 37% of our trade payables. In the fiscal year ended March 31 2022 ("fiscal 2022") we had three vendors that each individually accounted for more than 11%, but less than 23% of our trade payables. We derive a significant portion of our net sales from a small number of our Retail customers. A loss of business from one or more of these large customers, if not replaced with new business, would negatively affect our operating results and cash flows. In fiscal 2023, we had one customer that accounted for 19% of our net sales. In fiscal 2022, we had two customers that one customer each individually accounted for more than 10%, but less than 18%, of our net sales. In fiscal 2023 and fiscal 2022, we had three customers that each individually accounted for more than 10%, but less than 39%, of our trade receivables. Restricted Cash We are required by our banking partner to maintain a restricted bank account to cover for exposures on corporate credit cards and letters of credits. The use of these funds are restricted until the exposure with the banking partner is closed. Other Current Assets - Restricted Other current assets - restricted represents an escrow account for contingent consideration that was paid to the former owners of VAY AG upon achievement of continued employment over an 18 month period that ended on March 17, 2023. For additional information, refer to Note 2, Business Acquisition . Derivative Securities We enter into foreign exchange forward contracts to offset the earnings impacts of exchange rate fluctuations on certain monetary assets and liabilities. A hypothetical 10% increase in interest rates, or a 10% movement in the currencies underlying our foreign currency derivative positions, would have material impacts on our results of operations, financial position or cash flows. Gains and losses on foreign currency forward contracts are recognized in the Other, net line of our consolidated statements of operations. We do not enter into derivative instruments for any purpose other than to manage our interest rate or foreign currency exposure. That is, we do not engage in interest rate or currency exchange rate speculation using derivative instruments. For additional information, refer to Note 7, Derivatives . Trade Receivables Accounts receivable primarily consists of trade receivables due from our Retail segment customers. We determine an allowance for doubtful accounts based on historical customer experience and other currently available evidence. When a specific account is deemed uncollectible, the account is written off against the allowance. For additional information, refer to Note 8, Trade Receivables . Inventories Inventories are stated at the lower of cost and net realizable value ("NRV"), with cost determined based on the first-in, first-out method. We establish inventory allowances for excess, slow-moving and obsolete inventory based on inventory levels, expected product life and forecasted sales. Inventories are written down to NRV based on historical demand, competitive factors, changes in technology and product lifecycles. For additional information, refer to Note 9, Inventories . Property, Plant and Equipment Property, plant and equipment is stated at cost, net of accumulated depreciation. Improvements or betterments which add new functionality or significantly extend the life of an asset are capitalized. Software costs related to an asset developed for internal use are capitalized after the preliminary project stage, management has committed to the completion of the project and it is probable the project will be complete and used as intended. Expenditures for maintenance and repairs are expensed as incurred. The cost of assets retired, or otherwise disposed of, and the related accumulated depreciation, are removed from the accounts at the time of disposal. Gains and losses resulting from asset sales and dispositions are recognized in the period in which assets are disposed. Depreciation is recognized, using the straight-line method, over the lesser of the estimated useful lives of the assets or, in the case of leasehold improvements, the lease term, including renewal periods if we expect to exercise our renewal options. Depreciation on automobiles, computer software and equipment, machinery and equipment is determined based on estimated useful lives, which generally range from two four five Property, Plant and Equipment . Business Combinations We allocate the purchase price of a business acquisition to the assets acquired and liabilities assumed based upon their estimated fair values at the business combination date. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of identifiable assets, particularly intangibles, and liabilities acquired also requires us to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. Unanticipated events or circumstances may occur that could affect the accuracy of our fair value estimates, and under different assumptions, the resulting valuations could be materially different, which could impact the operating results we report. Goodwill Goodwill consisted of the excess of acquisition consideration over the fair values of net assets acquired in business combinations. It was not amortized, but rather is tested at the reporting unit level at least annually for impairment or more frequently if triggering events or changes in circumstances indicate impairment. Initially, qualitative factors are considered to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, entity-specific events, a sustained decrease in share price, and consideration of the difference between the fair value and carrying amount of a reporting unit as determined in the most recent quantitative assessment. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit's fair value is less than its carrying amount, a quantitative impairment analysis is performed. A quantitative impairment analysis involves estimating the fair value of a reporting unit using widely-accepted valuation methodologies including the income and market approaches, which requires the use of estimates and assumptions. We make significant assumptions and estimates about the extent and timing of future cash flows, discount rates, growth rates and terminal value. The cash flows are estimated over a significant future period of time, which makes those estimates and assumptions subject to an even higher degree of uncertainty. We also use market valuation models and other financial ratios, which require us to make certain assumptions and estimates regarding the applicability of those models to our assets and businesses. These estimates and assumptions include revenue growth rates, discounts rates, and determination of appropriate market comparables. If the fair value of the reporting unit is less than its carrying amount, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the goodwill. In accordance ASC 350 — Intangibles — Goodwill and Other , we performed our goodwill and indefinite-lived trade names impairment valuations annually, on March 31, or sooner if triggering events are identified. While the fair value of our reporting units exceeded their respective carrying values as of March 31, 2022, we observed continued market volatility, including significant declines in our market capitalization during the three month period ended June 30, 2022, which was identified as a triggering event. Our trailing 30-day average market capitalization was approximately $137 million at March 31, 2022 compared to $66 million, the trailing 30-day average, as of June 30, 2022. We performed an interim evaluation and a market capitalization reconciliation during the first quarter of fiscal 2023, which resulted in a non-cash goodwill impairment charge of $24.5 million. In fiscal 2022, our testing resulted in no impairment being recognized. Other Intangible Assets Indefinite-lived intangible assets consist of acquired trademarks, specifically trade names. Indefinite-lived intangible assets are stated at cost and are not amortized; instead, they are tested for impairment at least annually. We assess the value of indefinite-lived assets under either a qualitative or quantitative approach. Under a qualitative approach, we consider various market factors, including applicable key assumptions also used in the quantitative assessment listed below. If we determine that it is more likely than not that an indefinite-lived intangible assets is impaired, the quantitative approach is used to assess the asset fair value and the amount of the impairment. We review our indefinite-lived trademarks for impairment in the fourth quarter of each year or when events or changes in circumstances indicate that the assets may be impaired. The fair value of trademarks is estimated using the relief- from-royalty method to estimate the value of the cost savings and a discounted cash flows method to estimate the value of future income. The sum of these two values for each trademark is the fair value of the trademark. If the carrying amount of trademarks exceeds the estimated fair value, we calculate impairment as the excess of carrying amount over the estimate of fair value. We tested our indefinite-lived trademarks for impairment in the fourth quarter of fiscal 2023 and fiscal 2022 and no impairment was indicated. Definite-lived intangible assets, primarily acquired trade names, customer relationships, patents and patent rights, are stated at cost, net of accumulated amortization, and are evaluated for impairment as discussed below under Impairment of Long-Lived Assets . We recognize amortization expense for our definite-lived intangible assets on a straight-line basis over the estimated useful lives. For further information regarding other intangible assets, see Note 13, Other Intangible Assets . Impairment of Long-Lived Assets Long-lived assets, including property, plant and equipment and definite-lived intangible assets, are evaluated for impairment when events or circumstances indicate the carrying value may be impaired. When such an event or condition occurs, we estimate the future undiscounted cash flows to be derived from the use and eventual disposition of the asset to determine whether a potential impairment exists. If the carrying value exceeds estimated future undiscounted cash flows, we record impairment expense to reduce the carrying value of the asset to its estimated fair value. Based on our evaluation, we determined that our long-lived assets were recoverable, and an impairment charge was not required in fiscal 2023 or fiscal 2022. Equity Investments ASU 2016-01 Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, requires us to measure all equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in earnings. We do not hold any equity investments where we use quoted market prices to determine the fair values. For equity securities without readily determinable fair values, we have elected the measurement alternative under which we measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Revenue Recognition Our Direct and Retail revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For our Direct channel, control is transferred when products are shipped to customers as the entity has fulfilled the promise to transfer the goods. For Retail, control is transferred when contractual shipping terms are performed for the customer, generally upon our delivery to the carrier, in accordance with the terms of a sales contract. Our product sales and shipping revenues are reported net of promotional discounts, returns allowances, contractual rebates, and consideration payable to our customers. We estimate the revenue impact of retail sales incentive programs based on the planned duration of the program and historical experience. If the amount of sales incentives is reasonably estimable, the impact of such incentives is recorded at the later of the time the customer is notified of the sales incentive or the time of the sale. We estimate our liability for product returns based on historical experience, and record the expected customer refund liability as a reduction of revenue, and the expected inventory right of recovery, net of estimated scrap, as a reduction of cost of sales. If actual return costs differ from previous estimates, the amount of the liability and corresponding revenue are adjusted in the period in which such costs occur. We provide standard assurance-type warranties on our products which cover defective materials or nonconforming products, and is included with each product at no additional charge. In addition, we offer service-type/extended warranties for an additional fee to our Direct channel customers and Retail specialty and commercial customers. These warranty contracts provide coverage on labor and parts beyond the standard assurance warranty period. For our product sales, services, and freight and delivery fees, we are the principal in the contract and recognize revenue at a point in time. For our Direct channel extended warranty contracts, we are the agent and recognize revenue on a net basis because our performance obligation is to facilitate the arrangement between our customers and the third-party performance obligor. Sales of our subscriptions are deemed to be one performance obligation and we recognize revenue from these arrangements ratably over the subscription term as the performance obligation is satisfied. Revenue generated from subscriptions is recorded in our Direct segment. We offer free trials of subscriptions, bundled with product offerings (e.g., subscription for premium content). For these types of transactions that involve multiple performance obligations, the transaction price require allocations to the distinct performance obligation, as the free trial provides a material right. The transaction price is then allocated to each performance obligation based on relative standalone selling price. We determine stand-alone selling price based on prices charged to customers. Breakage is factored into the determination of the stand-alone selling price of a free trial. Breakage or activation rate, is defined as a percentage of those that never activate a free-trial offering. Some of our contracts with customers contain multiple performance obligations. For customer contracts that include multiple performance obligations, we account for individual performance obligations if they are distinct. We allocate the transaction price to each performance obligation based on its relative standalone selling price. We generally determine standalone selling price based on prices charged to customers on standalone sales or using expected cost plus margin. Significant judgement, such as breakage or activation rate, is factored into the determination of the stand-alone selling price of a subscription. Breakage or activation rate, is defined as a percentage of those that never activate a free-trial offering. Payment terms for our retail partners depend on the country of sale or agreement with the customer and payment is generally required within 90 days or less of shipment to or receipt by the retail partner. Payment is due at the time of sale for our e-commerce transactions. Deferred net revenue occurs because sales transactions include future update rights and performance obligations, which are subject to a recognition period. This balance increases from period to period by revenue that is deferred from current sales with these types of service obligations and is reduced by the recognition of revenue from prior sales that were deferred. Generally, revenue is recognized as the services are provided. Many Direct business customers finance their purchases through a third-party credit provider, for which we pay a commission or financing fee to the credit provider. Revenue for such transactions is recognized based on the sales price charged to the customer, net of promotional discounts, and the related commission or financing fee is included in selling and marketing expense. Exemptions and Elections We apply the practical expedient as per ASC 606-10-50-14 and do not disclose information related to remaining performance obligations due to their original expected durations are one year or less. We expense sales commissions when incurred because the amortization period would have been less than one year. These costs are recorded in selling and marketing expense. We generally account for our shipping and handling activities as a fulfillment activity, consistent with the timing of revenue recognition; that is, when our customer takes control of the transferred goods. In the event that a customer were to take control of a product prior to shipment, we make an accounting policy election to treat such shipping and handling activities as a fulfillment cost. For additional information, see Note 5, Revenues . Sales Discounts and Returns Allowance Product sales and shipping revenues are reported net of promotional discounts and return allowances. We estimate the revenue impact of retail sales incentive programs based on the planned duration of the program and historical experience. If the amount of sales incentives is reasonably estimable, the impact of such incentives is recorded at the later of the time the customer is notified of the sales incentive or the time of the sale. We estimate our liability for product returns based on historical experience, and record the expected customer refund liability as a reduction of revenue, and the expected inventory right of recovery, net of estimated scrap, as a reduction of cost of sales. If actual return costs differ from previous estimates, the amount of the liability and corresponding revenue are adjusted in the period in which such costs occur. Activity in our sales discounts and returns allowance was as follows (in thousands): Year Ended March 31, 2023 2022 Balance at beginning of period $ 12,179 $ 6,348 Charges to reserve 29,871 49,983 Reductions for sales discounts and returns (33,355) (44,152) Balance at end of period $ 8,695 $ 12,179 Taxes Collected from Customers and Remitted to Governmental Authorities Taxes collected from customers and remitted to governmental authorities are recorded on a net basis and excluded from net sales. Shipping and Handling Fees Shipping and handling fees billed to customers are recorded net of discounts and included in both net sales and cost of sales. We generally account for our shipping and handling activities as a fulfillment activity, consistent with the timing of revenue recognition; that is, when our customer takes control of the transferred goods. Cost of Sales Cost of sales primarily consists of: inventory costs; royalties paid to third parties; employment and occupancy costs of warehouse and distribution facilities, including depreciation of improvements and equipment; transportation expenses; product warranty expenses; distribution information systems expenses; and allocated expenses for shared administrative functions. Product Warranty Obligations Our products carry defined warranties for defects in materials or workmanship which, according to their terms, generally obligate us to pay the costs of supplying and shipping replacement parts to customers and, in certain instances, pay for labor and other costs to service products. Outstanding product warranty periods range from thirty days to, in limited circumstances, the lifetime of certain product components. We record a liability at the time of sale for the estimated costs of fulfilling future warranty claims. If necessary, we adjust the liability for specific warranty-related matters when they become known and are reasonably estimable. Estimated warranty expense is included in cost of sales, based on historical warranty claim experience and available product quality data. Warranty expense is affected by the performance of new products, significant manufacturing or design defects not discovered until after the product is delivered to the customer, product failure rates, and higher or lower than expected repair costs. If warranty expense differs from previous estimates, or if circumstances change such that the assumptions inherent in previous estimates are no longer valid, the amount of product warranty obligations is adjusted accordingly. Litigation and Loss Contingencies From time to time, we may be involved in various claims, lawsuits and other proceedings. These legal proceedings involve uncertainty as to the eventual outcomes and losses which may be realized when one or more future events occur or fail to occur. We record expenses for litigation and loss contingencies as a component of general and administrative expense when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. When a loss contingency is not both probable and estimable, we do not establish an accrued liability. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then we disclose an estimate of the possible loss or range of loss, if such estimate can be made, or disclose that an estimate cannot be made. For additional information, see Note 24, Commitments and Contingencies. Advertising and Promotion We expense our advertising and promotion costs as incurred. Production costs of television advertising commercials are recorded in prepaids and other current assets until the initial broadcast, at which time such costs are expensed. Advertising and promotion costs are included in selling and marketing expenses and totaled $23.2 million and $61.5 million for fiscal 2023 and fiscal 2022, respectively. Prepaid advertising and promotion costs were $0.2 million and $1.6 million for fiscal 2023 and fiscal 2022, respectively. Research and Development Internal research and development costs, which primarily consist of salaries and wages, employee benefits, expenditures for materials, and fees to use licensed technologies, are expensed as incurred. Third-party research and development costs for products under development or being researched, if any, are expensed as the contracted work is performed. Improvements or betterments which add new functionality or significantly extend the life of an asset are capitalized. Software costs related to an asset developed for internal use are capitalized after the preliminary project stage, management has committed to the completion of the project and it is probable the project will be complete and used as intended. Income Taxes We account for income taxes based on the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be in effect when the temporary differences are expected to be included, as income or expense, in the applicable tax return. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the enactment. Valuation allowances are provided against deferred income tax assets if we determine it is more likely than not that such assets will not be realized. Unrecognized Tax Benefits We recognize a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained based on the technical merits of the position upon examination, including resolutions of any related appeals or litigation. We recognize tax-related interest and penalties as a component of income tax expense. Foreign Currency Translation We translate the accounts of our non-U.S. subsidiaries into U.S. dollars as follows: revenues, expenses, gains and losses are translated at weighted-average exchange rates during the year; and assets and liabilities are translated at the exchange rate on the balance sheet date. Translation gains and losses are reported in our Consolidated Balance Sheets as a component of accumulated other comprehensive loss. Gains and losses arising from foreign currency transactions, including transactions between us and our non-U.S. subsidiaries, are recorded as a component of other income (expense) in our Consolidated Statements of Operations. Fair Value of Financial Instruments The carrying values of cash, restricted cash, trade receivables, prepaids and other current assets, trade payables and accrued liabilities approximate fair value due to their short maturities. For additional information on financial instruments recorded at fair value on a recurring basis refer to Note 6, Fair Value Measurements . Stock-Based Compensation We recognize stock-based compensation expense on a straight-line basis over the applicable requisite service period, based on the grant-date fair value of the award. To the extent a stock-based award is subject to performance conditions, the amount of expense recorded in a given period, if any, reflects our assessment of the probability of achieving the performance targets. Fair value of stock options and shares subject to our employee stock purchase plan are estimated using the Black-Scholes valuation model; fair value of performance share unit ("PSU") awards, restricted stock unit ("RSU") awards and restricted stock awards ("RSA") is based on the closing market price on the day preceding the grant. Our accounting treatment of forfeiture expenses reversals is at the forfeiture date and do not estimate future forfeitures prior to their actual occurrence. Shares to be issued upon the exercise of stock options or the requisite service period of stock awards will come from newly issued shares. Income (Loss) Per Share Amounts Basic income per share amounts were computed using the weighted average number of common shares outstanding. Diluted income per share amounts were calculated using the number of basic weighted average shares outstanding increased by dilutive potential common shares related to stock-based awards, as determined by the treasury stock method. If there is a loss from continuing operations, diluted earnings per share is the same as basic earnings per share. Recent Accounting Pronouncements Newly-Adopted Pronouncements ASU 2020-01 In January 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815).” The amendments in ASU 2020-01 clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. ASU 2020-01 is | ||||
Minimum | |||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||||
Product warranty period | 30 days | ||||
Automobiles, Computer Software And Equipment, Machinery And Equipment | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful life (in years) | 2 years | ||||
Automobiles, Computer Software And Equipment, Machinery And Equipment | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful life (in years) | 7 years | ||||
Furniture and fixtures | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful life (in years) | 5 years | ||||
Furniture and fixtures | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful life (in years) | 20 years | ||||
Leasehold improvements | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful life (in years) | 4 years | ||||
Leasehold improvements | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful life (in years) | 20 years | ||||
Customer Concentration Risk | One Customer | Revenue from Contract with Customer Benchmark | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 19% | ||||
Customer Concentration Risk | Two Customers | Revenue from Contract with Customer Benchmark | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 10% | ||||
Customer Concentration Risk | Two Customers | Revenue from Contract with Customer Benchmark | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 18% | ||||
Customer Concentration Risk | Three Customers | Revenue from Contract with Customer Benchmark | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 10% | ||||
Customer Concentration Risk | Three Customers | Revenue from Contract with Customer Benchmark | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 39% | ||||
Supplier Concentration Risk | Accounts Payable | Supplier One | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 37% | ||||
Supplier Concentration Risk | Accounts Payable | Minimum | Three Suppliers | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 11% | ||||
Supplier Concentration Risk | Accounts Payable | Maximum | Three Suppliers | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 23% | ||||
Sales Returns and Allowances | |||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||||
Beginning Balance | $ 12,179,000 | $ 12,179,000 | $ 6,348,000 | ||
Charges to reserve | 29,871,000 | 49,983,000 | |||
Reductions for sales discounts and returns | (33,355,000) | (44,152,000) | |||
Ending Balance | $ 8,695,000 | $ 12,179,000 | $ 8,695,000 | $ 12,179,000 |
Discontinued Operation (Details
Discontinued Operation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Income tax (benefit) expense of discontinued operations | $ (2,136) | $ 29 |
Restructuring and Exit Charge_2
Restructuring and Exit Charges (Details) $ in Thousands | 12 Months Ended |
Mar. 31, 2023 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Accrued liability as of March 31, 2022 | $ 0 |
Charges / Accruals | 2,549 |
(Payments) | (1,316) |
Accrued liability as of March 31, 2023 | 1,233 |
Employee Severance and Benefits | |
Restructuring Reserve [Roll Forward] | |
Accrued liability as of March 31, 2022 | 0 |
Charges / Accruals | 1,657 |
(Payments) | (547) |
Accrued liability as of March 31, 2023 | 1,110 |
Third Party Costs | |
Restructuring Reserve [Roll Forward] | |
Accrued liability as of March 31, 2022 | 0 |
Charges / Accruals | 892 |
(Payments) | (769) |
Accrued liability as of March 31, 2023 | $ 123 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 286,773 | $ 589,534 |
Change In Contract With Customer Liability [Roll Forward] | ||
Balance, beginning of period | 6,285 | 5,551 |
Cash additions | 1,258 | 4,537 |
Deferred revenue | 7,228 | 6,875 |
Revenue recognition | (9,696) | (10,678) |
Balance, end of period | 5,075 | 6,285 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 232,139 | 460,237 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 37,820 | 74,883 |
Europe, The Middle East And Africa | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4,371 | 41,026 |
All other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 12,443 | 13,388 |
Product sales | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 264,077 | 567,914 |
Extended warranties and services | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4,896 | 7,053 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 14,429 | 10,828 |
Royalty Income | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 3,371 | $ 3,739 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities at fair value | $ 141 | $ 128 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities at fair value | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities at fair value | 141 | 128 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities at fair value | 0 | 0 |
Foreign currency forward contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward contracts | 141 | 128 |
Foreign currency forward contracts | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward contracts | 0 | 0 |
Foreign currency forward contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward contracts | 141 | 128 |
Foreign currency forward contracts | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward contracts | $ 0 | $ 0 |
Derivatives (Details)
Derivatives (Details) - Foreign currency forward contracts $ in Millions | 12 Months Ended |
Mar. 31, 2023 USD ($) | |
Derivative [Line Items] | |
Derivative, notional amount | $ 18.6 |
Derivative, Term of Contract | 63 days |
Derivatives - Fair value of der
Derivatives - Fair value of derivative instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Foreign currency forward contracts | Not Designated as Hedging Instrument | Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 141 | $ 128 |
Derivatives - Effect On Condens
Derivatives - Effect On Condensed Consolidated Statements of Operations (Details) - Not Designated as Hedging Instrument - Interest rate swap contract - Cash Flow Hedging - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss recognized in earnings | $ (24) | $ (30) |
Income tax (benefit) expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Income tax expense | $ 6 | $ (7) |
Trade Receivables (Details)
Trade Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Receivables [Abstract] | ||
Trade receivables | $ 22,107 | $ 62,052 |
Allowance for doubtful accounts | (618) | (598) |
Total trade receivable | 21,489 | 61,454 |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Beginning balance | 598 | 1,177 |
Charges to bad debt expense | 761 | 414 |
Write-offs, net | (741) | (993) |
Balance, December 31 | $ 618 | $ 598 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 42,463 | $ 104,988 |
Parts and components | 4,136 | 6,202 |
Total inventories | $ 46,599 | $ 111,190 |
Property, Plant and Equipment (
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 81,720 | $ 73,784 |
Accumulated depreciation | (48,931) | (41,655) |
Total property, plant and equipment, net | 32,789 | 32,129 |
Depreciation expense | 11,042 | 8,554 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 23 | 23 |
Automobiles | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 3,426 | 3,150 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 4 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 20 years | |
Computer software and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 57,223 | 44,852 |
Computer software and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 2 years | |
Computer software and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 7 years | |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 14,953 | 16,447 |
Machinery and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 3 years | |
Machinery and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 5 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,034 | 2,634 |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 5 years | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 20 years | |
Work in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 4,061 | $ 6,678 |
Leases - Additional information
Leases - Additional information (Details) | Mar. 31, 2023 term |
Leases [Abstract] | |
Operating lease, term of contract | 7 years |
Operating lease, number of renewal terms | 1 |
Operating lease, renewal term | 5 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Operating lease expense | $ 5,807 | $ 5,822 |
Amortization of right of use assets of finance leases assets | 114 | 57 |
Interest expense of finance lease liabilities | 10 | 6 |
Total lease expense | $ 5,931 | $ 5,885 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 19,078 | $ 23,620 |
Operating lease liabilities, non-current | 16,380 | 20,926 |
Operating lease liabilities, current portion | 4,427 | 4,494 |
Total operating lease liabilities | 20,807 | 25,420 |
Property, plant and equipment, at cost | 569 | 569 |
Accumulated depreciation | (171) | (57) |
Property, plant and equipment, net | 398 | 512 |
Financing lease liabilities, non-current | 282 | 395 |
Financing lease liabilities, current portion | 122 | 119 |
Total finance lease liabilities | 404 | 514 |
Operating cash flow from operating leases | 6,226 | 6,485 |
Finance cash flows from finance leases | 119 | 60 |
ROU assets obtained in exchange for operating lease obligations | 100 | 10,323 |
ROU assets obtained in exchange for finance lease obligations | 0 | 569 |
Reductions to ROU assets resulting from reductions to operating lease obligations | 1,175 | 1,358 |
Increases to ROU assets resulting from remeasurement of lease obligations | $ 0 | $ 0 |
Weighted average remaining lease term, operating lease | 5 years | 3 years 1 month 6 days |
Finance Lease, Weighted Average Remaining Lease Term | 3 years 6 months | 4 years 6 months |
Weighted average discount rate, operating lease | 5.05% | 4.65% |
Finance Lease, Weighted Average Discount Rate, Percent | 2.08% | 2.14% |
Leases - Maturity (Details)
Leases - Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Operating leases | ||
2024 | $ 5,382 | |
2025 | 5,648 | |
2026 | 4,520 | |
2027 | 2,361 | |
Thereafter | 5,796 | |
Total undiscounted lease payments | 23,707 | |
Less imputed interest | (2,900) | |
Total operating lease liabilities | 20,807 | $ 25,420 |
Finance leases | ||
2024 | 120 | |
2025 | 120 | |
2026 | 120 | |
2027 | 59 | |
Thereafter | 0 | |
Total undiscounted lease payments | 419 | |
Less imputed interest | (15) | |
Total finance lease liabilities | $ 404 | $ 514 |
Goodwill (Details)
Goodwill (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Goodwill [Roll Forward] | ||||
Balance | $ 24,510,000 | $ 24,510,000 | $ 0 | |
Business acquisition | 24,510,000 | |||
Balance | $ 0 | 0 | 24,510,000 | |
Goodwill impairment loss | 24,500,000 | 24,500,000 | 24,510,000 | 0 |
Market Capitalization, Average Value | 66,000,000 | 66,000,000 | 66,000,000 | 137,000,000 |
Direct | ||||
Goodwill [Roll Forward] | ||||
Balance | 24,510,000 | 24,510,000 | 0 | |
Balance | $ 0 | 0 | 24,510,000 | |
Goodwill impairment loss | 24,510,000 | |||
VAY AG | ||||
Goodwill [Roll Forward] | ||||
Balance | $ 24,510,000 | $ 24,510,000 | ||
Business acquisition | 24,510,000 | |||
Balance | $ 24,510,000 |
Other Intangible Assets (Detail
Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Indefinite life trademarks | $ 6,597 | $ 9,052 | |
Intangible Assets, Gross (Excluding Goodwill) | 7,640 | 10,095 | |
Accumulated amortization - patents | (853) | (791) | |
Total other intangible assets, net | 6,787 | 9,304 | |
Amortization expense for intangible assets | 61 | 61 | |
2024 | 61 | ||
2025 | 61 | ||
2026 | 47 | ||
2027 | 3 | ||
2028 | 3 | ||
Thereafter | 15 | ||
Finite-Lived Intangible Assets, Net | 190 | ||
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill) | $ (2,500) | ||
Impairment Of Intangible Asset Indefinite Lived Excluding Goodwill Statement Of Income Or Comprehensive Income Extensible Enumeration Not Disclosed Flag | non-cash intangible impairment charge | ||
Patents | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | $ 1,043 | $ 1,043 | |
Minimum | Patents | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 7 years | ||
Maximum | Patents | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 24 years |
Equity Investments (Details)
Equity Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||
Equity securities impairment loss | $ 700 | |
Equity securities without readily determinable fair value | $ 292 | $ 1,000 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Accrued Liabilities [Abstract] | ||
Payroll and benefits | $ 5,220 | $ 10,405 |
Contract with Customer, Liability, Current | 5,075 | 6,285 |
Accrued Liabilities, Reserves, Current | 1,200 | 4,433 |
Estimated Litigation Liability, Current | 5 | 4,250 |
Other | 2,908 | 4,013 |
Accrued liabilities | 15,575 | 29,386 |
Accrued Tariffs, Current | $ 1,167 | $ 0 |
Product Warranties (Details)
Product Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Movement in Product Warranty Liability [Roll Forward] | ||
Beginning Balance | $ 6,216 | $ 8,651 |
Accruals | 4,569 | 5,924 |
Payments | (7,518) | (8,359) |
Ending Balance | $ 3,267 | $ 6,216 |
Borrowings (Loan Agreement) (De
Borrowings (Loan Agreement) (Details) | 12 Months Ended | |||
Nov. 30, 2022 USD ($) | Nov. 29, 2022 | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | |
Line of Credit Facility [Line Items] | ||||
Extinguishment of Debt, Amount | $ 9,100,000 | |||
Loss on debt extinguishment | 228,000 | $ 0 | ||
Line of Credit | SLR Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Available for borrowing | $ 20,000,000 | |||
Debt Instrument, Covenant, Fixed Charge Coverage Ratio, Minimum | 1 | |||
Debt Instrument, Covenant, Fixed Charge Coverage Ratio, Maximum | 1 | |||
Debt Instrument, Covenant, Minimum Excess Availability | $ 10,000,000 | |||
Debt Instrument, Covenant, Percentage Of Line Cap | 12.50% | |||
Debt Instrument, Remaining Borrowing Capacity, Threshold | $ 11,000,000 | |||
Line of Credit | Minimum | Variable Rate Component One | WF Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.75% | 5% | ||
Line of Credit | Minimum | Variable Rate Component Two | WF Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 0.75% | 4% | ||
Line of Credit | Maximum | Variable Rate Component One | WF Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.25% | 5.50% | ||
Line of Credit | Maximum | Variable Rate Component Two | WF Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.25% | 4.50% | ||
Line of Credit | Secured Debt | SLR Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Face Amount | $ 30,000,000 | |||
Line of Credit | Secured Debt | Secured Overnight Financing Rate (SOFR) | Variable Rate Component One | SLR Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 8.25% | |||
Line of Credit | Secured Debt | Minimum | Secured Overnight Financing Rate (SOFR) | Variable Rate Component One | SLR Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 7.75% | |||
Line of Credit | Secured Debt | Maximum | Secured Overnight Financing Rate (SOFR) | Variable Rate Component One | SLR Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 8.25% | |||
Line of Credit | Wells Fargo Bank | Term Loan | ||||
Line of Credit Facility [Line Items] | ||||
Amount outstanding | 0 | |||
Line of Credit | Wells Fargo Bank | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Available for borrowing | $ 14,900,000 | |||
Borrowing rate under agreement, at period end | 12% | |||
Line of Credit | Crystal Financial LLC | Term Loan | ||||
Line of Credit Facility [Line Items] | ||||
Amount outstanding | $ 30,000,000 | |||
Borrowing rate under agreement, at period end | 13.42% |
Borrowings - Schedule of Contra
Borrowings - Schedule of Contractual Obligation Maturity (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
Less than 1 year | $ 6,087 |
1-3 years | 11,268 |
3-5 years | 24,753 |
More than 5 years | 0 |
Debt obligations, including interest | $ 42,108 |
Income Taxes - Income (Loss) Be
Income Taxes - Income (Loss) Before Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (101,458) | $ (32,904) |
Non-U.S. | 3,329 | 4,674 |
Loss from continuing operations before income taxes | (98,129) | (28,230) |
Income tax penalties and interest expense | $ (1,900) | $ 100 |
Income Taxes - Expense (Details
Income Taxes - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Current: | ||
U.S. federal | $ (232) | $ 362 |
U.S. state | 124 | (5) |
Non-U.S. | 509 | 1,444 |
Total current | 401 | 1,801 |
Deferred: | ||
U.S. federal | 7,047 | (6,881) |
U.S. state | 1,959 | (940) |
Non-U.S. | (48) | (6) |
Total deferred | 8,958 | (7,827) |
Total income tax expense (benefit) | $ 9,359 | $ (6,026) |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
U.S. statutory income tax rate | 21% | 21% |
State tax, net of U.S. federal tax benefit | 3.70% | 3.60% |
Non-U.S. income taxes | 0% | (0.80%) |
Nondeductible operating expenses | (1.50%) | (0.50%) |
Effective Income Tax Rate Reconciliation, Foreign Intangible Income Deduction, Percent | 0% | 0% |
Effective Income Tax Rate Reconciliation, Limitation of Use, Percent | (0.10%) | (5.40%) |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Foreign Share-based Payment Arrangement, Percent | (0.10%) | (1.20%) |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Acquisition Related Expense, Percent | 0% | (1.80%) |
Research and development credit | 0.20% | 2.30% |
Change in deferred tax measurement rate | 0% | 0.20% |
Change in uncertain tax positions | (0.10%) | (1.00%) |
Excess tax benefit or detriment from stock plans | (0.50%) | 5.40% |
Valuation allowance | (25.90%) | (0.40%) |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Impairment Losses, Percent | (6.20%) | 0% |
Effective Income Tax Rate Reconciliation, Capital Income (Loss), Percent | 0% | 0% |
Other | 0% | (0.10%) |
Effective income tax rate for continuing operations | (9.50%) | 21.30% |
Valuation allowance | $ 51,902 | $ 26,510 |
Domestic Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | 25,400 | |
Loss and Other Credit Carryforward | Foreign Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 300 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Components of Deferred Tax Assets and Liabilities [Abstract] | ||
Accrued liabilities | $ 2,773 | $ 5,828 |
Allowance for doubtful accounts | 59 | 89 |
Inventory valuation | 347 | 222 |
Capitalized indirect inventory costs | 366 | 1,044 |
Stock-based compensation expense | 715 | 895 |
Deferred rent | 4,919 | 6,065 |
Deferred Tax Assets, Deferred Income | 1,003 | 960 |
Deferred Tax Asset, Interest Carryforward | 1,247 | 383 |
Net operating loss carryforward | 13,979 | 2,194 |
Basis difference on long-lived assets | 1,300 | 1,189 |
Section 174 capitalization | 6,028 | 0 |
Credit carryforward | 667 | 1,048 |
Capital losses | 25,791 | 25,744 |
Other | 301 | 290 |
Total deferred income tax assets before valuation allowance | 59,495 | 45,951 |
Valuation allowance | (51,902) | (26,510) |
Total deferred income tax assets, net of valuation allowance | 7,593 | 19,441 |
Prepaid advertising | (29) | (273) |
Other prepaids | (191) | (135) |
Basis difference of long-lived assets | (2,631) | (4,740) |
Deferred rent | (4,440) | (5,532) |
Other | (1) | (1) |
Deferred income tax liabilities | (7,292) | (10,681) |
Net deferred income tax asset | 301 | $ 8,760 |
Domestic Tax Authority | ||
Components of Deferred Tax Assets and Liabilities [Abstract] | ||
Valuation allowance | $ (25,400) |
Income Taxes - Deferred Tax Lia
Income Taxes - Deferred Tax Liability (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Net Deferred Income Tax Liability [Abstract] | ||
Deferred income tax assets, non-current | $ 554 | $ 8,760 |
Deferred income tax liabilities, non-current | (253) | 0 |
Net deferred income tax asset | $ 301 | $ 8,760 |
Income Taxes - Carryforwards (D
Income Taxes - Carryforwards (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 51,902 | $ 26,510 |
U.S. federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 50,600 | |
Capital loss carryforwards | 101,300 | |
Income tax credit carryforwards | 400 | |
U.S. state | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 11,500 | |
Net operating loss carryforwards | 47,700 | |
Income tax credit carryforwards | 400 | |
Domestic Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | 25,400 | |
Domestic Tax Authority | Capital Loss Carryforward | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | 51,600 | |
Foreign Tax Authority | Loss and Other Credit Carryforward | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 300 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits, beginning of year | $ 1,782,000 | $ 2,374,000 |
Additions for tax positions taken in prior years | 0 | 133,000 |
Reductions for tax positions taken in prior years | (26,000) | 0 |
Additions for tax positions related to the current year | 59,000 | 103,000 |
Lapses of statutes of limitations | 0 | 0 |
Other | (108,000) | (828,000) |
Unrecognized tax benefits, end of year | 1,707,000 | 1,782,000 |
Income tax (benefit) expense of discontinued operations | 2,136,000 | (29,000) |
Unrecognized tax benefits that would impact effective tax rate, if recognized | 1,600,000 | |
Income tax penalties and interest expense | (1,900,000) | 100,000 |
Cumulative liability for interest and penalties related to uncertain tax positions | 400,000 | $ 2,300,000 |
Previously unrecognized tax benefit likely to be recognized within the next 12 months | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | $ 164,049 | $ 182,545 |
Other comprehensive (loss) income | (951) | (372) |
Ending balance | 61,300 | 164,049 |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (527) | (155) |
Current period other comprehensive loss before reclassifications | (951) | (372) |
Ending balance | (1,478) | (527) |
Accumulated Other Comprehensive (Loss) Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (527) | (155) |
Current period other comprehensive loss before reclassifications | (951) | (372) |
Ending balance | $ (1,478) | $ (527) |
Stock-Based Compensation - 2015
Stock-Based Compensation - 2015 Long-Term Incentive Plan (Detail) - shares | Apr. 28, 2015 | Mar. 31, 2023 | May 01, 2020 | Apr. 30, 2020 |
2015 Long-Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life (years) | 7 years | |||
Number of shares authorized (in shares) | 4,800,000 | 4,800,000 | ||
Reduction in number of shares available for issuance due to settlement of stock appreciation rights and stock unit or performance unit award (in shares) | 2 | |||
Reduction in number of shares available for issuance due to settlement of stock option award (in shares) | 1 | |||
Maximum aggregate shares of common stock subject to stock options, appreciation rights, restricted stock or performance stock unit awards (in shares) | 1,000,000 | |||
2005 Long Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 3,500,000 | |||
Amended 2015 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 6,800,000 | |||
Reduction in number of shares available for issuance due to settlement of stock appreciation rights and stock unit or performance unit award (in shares) | 1.5 | |||
Shares available for issuance (in shares) | 1,200,000 | 2,000,000 | ||
Common stock, shares reserved for future issuance (in shares) | 5,000,000 | |||
Stock options | 2015 Long-Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 1,300,000 | |||
Minimum | 2015 Long-Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Maximum | 2015 Long-Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock Option Activity and Outstanding Options | ||
Options outstanding (in shares) | 471 | |
Granted (in shares) | 1,400 | |
Forfeited, canceled or expired (in shares) | (66) | |
Options outstanding (in shares) | 1,805 | 471 |
Stock Option Activity and Weighted-Average Exercise Price | ||
Beginning of period, Weighted Average Exercise Price (in dollars per share) | $ 1.82 | |
Granted, Weighted Average Exercise Price (in dollars per share) | 1.61 | |
Forfeited, canceled or expired, Weighted Average Exercise Price (in dollars per share) | 2.43 | |
End of period, Weighted Average Exercise Price (in dollars per share) | $ 1.63 | $ 1.82 |
Options outstanding, Number (in shares) | 1,805 | 471 |
Options outstanding, Weighted Average Exercise Price (in dollars per share) | $ 1.63 | $ 1.82 |
Options outstanding, Weighted-Average Remaining Contractual Life | 8 years 2 months 12 days | |
Options exercisable, Number of Options Exercisable | 470 | |
Options exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 1.78 | |
Options exercisable, aggregate intrinsic value | $ 0 | |
Options exercisable, Weighted average remaining contractual term | 4 years 4 months 24 days | |
Vested and expected to vest (in shares) | 1,805 | |
Vested and expected to vest, Weighted Average Exercise Price (in dollars per share) | $ 1.63 | |
Vested and expected to vest, Aggregate Intrinsic Value | $ 0 | |
Vested and expected to vest, remaining contractual term (in years) | 8 years 2 months 12 days | |
General and administrative | $ 3,885 | $ 6,262 |
Weighted average period for unvested stock options | 1 year 3 months 18 days | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding | $ 0 | |
Stock options | ||
Stock Option Activity and Weighted-Average Exercise Price | ||
General and administrative | 190 | $ 177 |
Compensation expense for unvested stock options | $ 5,600 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU and RSA Activity (Details) shares in Thousands | 12 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Restricted Stock Awards | |
Restricted Stock Units Activity and Outstanding | |
Outstanding, beginning of period (in shares) | shares | 55 |
Granted (in shares) | shares | 98 |
Vested (in shares) | shares | (26) |
Outstanding, end of period (in shares) | shares | 127 |
Restricted Stock Units Activity and Weighted Average Grant Date Fair Value per Share | |
Beginning of period, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | $ 15.88 |
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 2.10 |
Vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 16.27 |
End of period, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | $ 5.23 |
Restricted Stock Units | |
Restricted Stock Units Activity and Outstanding | |
Outstanding, beginning of period (in shares) | shares | 1,351 |
Granted (in shares) | shares | 515 |
Forfeited (in shares) | shares | (284) |
Vested (in shares) | shares | (713) |
Outstanding, end of period (in shares) | shares | 869 |
Restricted Stock Units Activity and Weighted Average Grant Date Fair Value per Share | |
Beginning of period, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | $ 8.39 |
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 2.10 |
Forfeited, Weighted Average Grante Date Fair Value (in dollars per share) | $ / shares | 7.46 |
Vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 6.16 |
End of period, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | $ 6.80 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Stock Units (Details) - PSUs - $ / shares | 1 Months Ended | 12 Months Ended | ||||
Aug. 31, 2022 | Feb. 28, 2022 | May 31, 2021 | May 31, 2020 | Feb. 28, 2018 | Mar. 31, 2023 | |
Performance Stock Units Activity and Outstanding | ||||||
Outstanding, beginning of period (in shares) | 982,000 | |||||
Granted (in shares) | 463,000 | |||||
Forfeited (in shares) | (276,000) | |||||
Outstanding, end of period (in shares) | 1,169,000 | |||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Beginning of period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 8.87 | |||||
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | 2.10 | |||||
Forfeited, Weighted Average Grante Date Fair Value (in dollars per share) | 6.04 | |||||
End of period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 7.02 | |||||
Minimum | Management | ||||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Vesting percentage | 60% | |||||
Maximum | Key Executive Employees Member | ||||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Vesting percentage | 200% | |||||
Maximum | Management | ||||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Vesting percentage | 150% | |||||
February 2018 PSU Awards | Key Executive Employees Member | ||||||
Performance Stock Units Activity and Outstanding | ||||||
Granted (in shares) | 119,351 | |||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Vesting period | 3 years | |||||
May 2020 PSU Awards | Key Executive Employees Member | ||||||
Performance Stock Units Activity and Outstanding | ||||||
Granted (in shares) | 262,999 | |||||
Outstanding, end of period (in shares) | 164,133 | |||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Vesting period | 3 years | |||||
May 2020 PSU Awards | Management | ||||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Achievement percentage | 0% | |||||
May 2021 PSU Awards | Key Executive Employees Member | ||||||
Performance Stock Units Activity and Outstanding | ||||||
Granted (in shares) | 510,404 | |||||
Outstanding, end of period (in shares) | 459,311 | |||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Vesting period | 3 years | |||||
Achievement percentage | 0% | |||||
May 2021 PSU Awards | Minimum | Key Executive Employees Member | ||||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Vesting percentage | 30% | |||||
February 2022 PSU Awards | Management | ||||||
Performance Stock Units Activity and Outstanding | ||||||
Granted (in shares) | 271,938 | |||||
Outstanding, end of period (in shares) | 168,566 | |||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Achievement percentage | 0% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Vesting Requirement Share Price | $ 10 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Volume Weighted Average Price | $ 10 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Consecutive Trading Days | 60 days | |||||
February 2022 PSU Awards | Minimum | Management | ||||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Vesting percentage | 50% | |||||
February 2022 PSU Awards | Maximum | Management | ||||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Vesting percentage | 100% | |||||
August 2022 PSU Awards | Management | ||||||
Performance Stock Units Activity and Outstanding | ||||||
Granted (in shares) | 463,200 | |||||
Outstanding, end of period (in shares) | 377,654 | |||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Achievement percentage | 50% | |||||
August 2022 PSU Awards | Minimum | Management | ||||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Vesting percentage | 30% | |||||
August 2022 PSU Awards | Maximum | Management | ||||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Vesting percentage | 200% |
- Stock-based Compensation (Det
- Stock-based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
General and administrative | $ 3,885 | $ 6,262 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
General and administrative | 190 | 177 |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
General and administrative | 213 | 393 |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
General and administrative | 3,598 | 4,053 |
PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
General and administrative | (238) | 1,432 |
Employee Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
General and administrative | $ 122 | $ 207 |
Stock-Based Compensation - Othe
Stock-Based Compensation - Other (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total intrinsic value of stock options exercised | $ 0 | $ 2,273 |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of units vested | $ 1,549 | $ 8,288 |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock - $ / shares shares in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Apr. 28, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 500 | |
Discount from market price, offering date | 90% | |
Percentage of outstanding stock maximum | 5% | |
Shares available for issuance, beginning balance (in shares) | 153 | |
Employee shares purchased (shares) | (119) | |
Shares available for issuance (in shares) | 34 | |
Shares available for issuance, ending balance (in shares) | 34 | |
Weighted- Average Purchase Price (in dollars per share) | $ 11.65 | |
Weighted-Average Discount per Share (in dollars per share) | $ 1.28 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions (Details) - Employee Stock | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0% | 0% |
Risk-free interest rate | 3.10% | 0% |
Expected volatility | 73% | 67% |
Income Per Share (Details)
Income Per Share (Details) - shares shares in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Basic weighted average shares outstanding (in shares) | 31,585 | 31,029 |
Dilutive potential common shares (in shares) | 0 | 0 |
Diluted weighted average shares outstanding (in shares) | 31,585 | 31,029 |
Antidilutive securities excluded from computation of earnings per share, weighted average, amount (in shares) | 203 | 1,348 |
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 1,566 | 338 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, weighted average, amount (in shares) | 38 | 463 |
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 579 | 2 |
RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, weighted average, amount (in shares) | 161 | 885 |
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 987 | 336 |
PSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, weighted average, amount (in shares) | 4 | 0 |
401(k) Savings Plan (Details)
401(k) Savings Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 01, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Annual vesting percentage | 100% | ||
Other Pension, Postretirement and Supplemental Plans [Member] | 401K Savings Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percent of employer's match of the employee's first 1% of eligible pay | 100% | ||
Percent of employee eligible pay (first 1%) | 1% | ||
Percent of employer's match of the employee's next 5% of eligible pay | 50% | ||
Percent of employee eligible pay (next 5%) | 5% | ||
Maximum employer matching, percent | 3.50% | ||
401(k) matching contributions | $ 1,152 | $ 1,062 | |
Other Pension, Postretirement and Supplemental Plans [Member] | 401K Savings Plan | Triggering Event One | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Requisite service period | 1 year | ||
Annual vesting percentage | 0% | ||
Other Pension, Postretirement and Supplemental Plans [Member] | 401K Savings Plan | Triggering Event Two | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Annual vesting percentage | 25% | ||
Other Pension, Postretirement and Supplemental Plans [Member] | 401K Savings Plan | Triggering Event Two | Minimum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Requisite service period | 1 year | ||
Other Pension, Postretirement and Supplemental Plans [Member] | 401K Savings Plan | Triggering Event Two | Maximum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Requisite service period | 2 years | ||
Other Pension, Postretirement and Supplemental Plans [Member] | 401K Savings Plan | Triggering Event Three | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Requisite service period | 2 years | ||
Annual vesting percentage | 100% |
Segment Information - Segments
Segment Information - Segments (Details) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 2 | |
Net sales | $ 286,773 | $ 589,534 |
Consolidated contribution | (31,975) | 32,859 |
Operating Expenses | 145,315 | 173,773 |
Reconciliation of consolidated contribution to income (loss) from continuing operations: | ||
Income tax expense | (9,359) | 6,026 |
Loss from continuing operations | (107,488) | (22,204) |
Depreciation and amortization expense | 11,103 | 8,615 |
Assets | 163,532 | 314,045 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Operating Expenses | (61,386) | (58,175) |
Reconciliation of consolidated contribution to income (loss) from continuing operations: | ||
Other income (expense), net | (4,768) | (2,914) |
Income tax expense | (9,359) | 6,026 |
Direct | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 139,289 | 221,726 |
Consolidated contribution | (29,626) | (15,711) |
Reconciliation of consolidated contribution to income (loss) from continuing operations: | ||
Depreciation and amortization expense | 4,691 | 2,513 |
Assets | 50,493 | 93,554 |
Retail | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 144,113 | 364,069 |
Consolidated contribution | (5,720) | 44,831 |
Reconciliation of consolidated contribution to income (loss) from continuing operations: | ||
Depreciation and amortization expense | 3,994 | 4,381 |
Assets | 58,214 | 144,683 |
Unallocated royalty income [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 3,371 | 3,739 |
Consolidated contribution | 3,371 | 3,739 |
Unallocated corporate [Member] | ||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | ||
Depreciation and amortization expense | 2,418 | 1,721 |
Assets | 54,825 | 75,808 |
United States | ||
Segment Reporting Information [Line Items] | ||
Net sales | 232,139 | 460,237 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 37,820 | $ 74,883 |
Segment Information - Concentra
Segment Information - Concentration (Details) - Sales Revenue, Net - Customer Concentration Risk | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Amazon.com | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 19.30% | 16.80% |
Best Buy | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13.60% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Other Commitments [Line Items] | |||
Letters of credit outstanding, amount | $ 1.6 | ||
Loss contingency | $ 4.7 | ||
Inventory Purchases | |||
Other Commitments [Line Items] | |||
Non-cancelable market-based purchase obligation | $ 12.1 | $ 39.8 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 8 Months Ended | ||||
May 01, 2023 | Dec. 31, 2023 | Apr. 25, 2023 | Mar. 31, 2023 | Nov. 30, 2022 | |
Subsequent Event | Intellectual Property | |||||
Subsequent Event | |||||
Proceeds from Sale of Intangible Assets | $ 10,500,000 | ||||
Finite-Lived Intangible Assets, Net, Sold | $ 3,700,000 | ||||
SLR Credit Agreement | Line of Credit | |||||
Subsequent Event | |||||
Debt Instrument, Covenant, Minimum Excess Availability | $ 10,000,000 | ||||
Debt Instrument, Covenant, Percentage Of Line Cap | 12.50% | ||||
Maximum revolving secured credit line | $ 100,000,000 | ||||
SLR Credit Agreement | Line of Credit | Scenario, Forecast | |||||
Subsequent Event | |||||
Prepayment of Debt | $ 11,700,000 | ||||
SLR Credit Agreement | Line of Credit | Subsequent Event | |||||
Subsequent Event | |||||
Maximum revolving secured credit line | $ 60,000,000 | ||||
SLR Credit Agreement | Line of Credit | Subsequent Event | Triggering Event One | |||||
Subsequent Event | |||||
Debt Instrument, Covenant, Minimum Excess Availability | 9,000,000 | ||||
SLR Credit Agreement | Line of Credit | Subsequent Event | Triggering Event Two | |||||
Subsequent Event | |||||
Debt Instrument, Covenant, Minimum Excess Availability | $ 7,000,000 |