Cover Page
Cover Page - shares | 9 Months Ended | |
Dec. 31, 2022 | Feb. 03, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2022 | |
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 Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,832,464 | |
Entity Central Index Key | 0001078207 | |
Current Fiscal Year End Date | --03-31 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 15,532 | $ 12,872 |
Restricted cash | 947 | 1,339 |
Trade receivables, net of allowances of $603 and $598 | 42,670 | 61,454 |
Inventories | 77,315 | 111,190 |
Prepaids and other current assets | 12,987 | 14,546 |
Other current assets - restricted, current | 3,887 | 3,887 |
Income taxes receivable | 1,710 | 1,998 |
Total current assets | 155,048 | 207,286 |
Property, plant and equipment, net | 34,144 | 32,129 |
Operating lease right-of-use assets | 20,033 | 23,620 |
Goodwill | 0 | 24,510 |
Other intangible assets, net | 6,802 | 9,304 |
Deferred income tax assets, non-current | 768 | 8,760 |
Income taxes receivable, non-current | 5,673 | 5,673 |
Other assets | 2,625 | 2,763 |
Total assets | 225,093 | 314,045 |
Liabilities and Shareholders' Equity | ||
Trade payables | 34,966 | 53,165 |
Accrued liabilities | 17,396 | 29,386 |
Operating lease liabilities, current portion | 4,148 | 4,494 |
Finance lease obligations, current portion | 121 | 119 |
Warranty obligations, current portion | 3,280 | 4,968 |
Income taxes payable, current portion | 86 | 839 |
Debt payable, current portion, net of unamortized debt issuance costs of $476 and $57 | 1,556 | 2,243 |
Total current liabilities | 61,553 | 95,214 |
Operating lease liabilities, non-current | 17,504 | 20,926 |
Finance lease obligations, non-current | 311 | 395 |
Warranty obligations, non-current | 512 | 1,248 |
Income taxes payable, non-current | 2,411 | 4,029 |
Deferred income tax liabilities, non-current | 321 | 0 |
Other non-current liabilities | 1,374 | 1,071 |
Debt payable, non-current, net of unamortized debt issuance costs of $1,349 and $204 | 58,114 | 27,113 |
Total liabilities | 142,100 | 149,996 |
Commitments and contingencies (Note 17) | ||
Shareholders' equity: | ||
Common stock - no par value, 75,000 shares authorized, 31,832 and 31,268 shares issued and outstanding | 11,046 | 6,483 |
Retained earnings | 73,631 | 158,093 |
Accumulated other comprehensive loss | (1,684) | (527) |
Total shareholders' equity | 82,993 | 164,049 |
Total liabilities and shareholders' equity | $ 225,093 | $ 314,045 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful trade receivables | $ 603 | $ 598 |
Debt Issuance Costs, Current, Net | 476 | 57 |
Debt Issuance Costs, Noncurrent, Net | $ 1,349 | $ 204 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 75,000 | 75,000 |
Common stock, shares issued | 31,832 | 31,268 |
Common stock, shares outstanding | 31,832 | 31,268 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||||
Net sales | $ 98,079 | $ 147,258 | $ 218,354 | $ 469,810 |
Cost of sales | 75,219 | 117,342 | 177,078 | 342,336 |
Gross profit | 22,860 | 29,916 | 41,276 | 127,474 |
Operating expenses: | ||||
Selling and marketing | 17,203 | 32,395 | 39,493 | 75,634 |
General and administrative | 10,859 | 11,456 | 34,317 | 39,355 |
Research and development | 5,086 | 5,379 | 16,315 | 15,882 |
Goodwill and intangible impairment charge | 0 | 0 | 26,965 | 0 |
Total operating expenses | 33,148 | 49,230 | 117,090 | 130,871 |
Operating loss | (10,288) | (19,314) | (75,814) | (3,397) |
Other expense: | ||||
Interest income | 1 | 1 | 6 | 34 |
Interest expense | (1,187) | (354) | (2,158) | (1,149) |
Other, net | 715 | (789) | (23) | (815) |
Total other expense, net | (471) | (1,142) | (2,175) | (1,930) |
Loss from continuing operations before income taxes | (10,759) | (20,456) | (77,989) | (5,327) |
Income tax expense (benefit) | 322 | (7,001) | 8,573 | (1,321) |
Loss from continuing operations | (11,081) | (13,455) | (86,562) | (4,006) |
Discontinued operations: | ||||
Loss from discontinued operations before income taxes | (2) | (118) | (34) | (195) |
Income tax (benefit) expense of discontinued operations | (1) | (74) | (2,135) | 16 |
(Loss) income from discontinued operations | (1) | (44) | 2,101 | (211) |
Net loss | $ (11,082) | $ (13,499) | $ (84,461) | $ (4,217) |
Earnings Per Share, Basic [Abstract] | ||||
Basic income (loss) per share from continuing operations (in dollars per share) | $ (0.35) | $ (0.43) | $ (2.75) | $ (0.13) |
Basic loss per share from discontinued operation (in dollars per share) | 0 | 0 | 0.07 | (0.01) |
Basic net income (loss) per share (in dollars per share) | (0.35) | (0.43) | (2.68) | (0.14) |
Earnings Per Share, Diluted [Abstract] | ||||
Diluted income (loss) per share from continuing operations (in dollars per share) | (0.35) | (0.43) | (2.75) | (0.13) |
Diluted loss per share from discontinued operation (in dollars per share) | 0 | 0 | 0.07 | (0.01) |
Diluted net income (loss) per share (in dollars per share) | $ (0.35) | $ (0.43) | $ (2.68) | $ (0.14) |
Shares used in per share calculations: | ||||
Basic (in shares) | 31,514 | 31,199 | 31,502 | 30,955 |
Diluted (in shares) | 31,514 | 31,199 | 31,502 | 30,955 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (11,082) | $ (13,499) | $ (84,461) | $ (4,217) |
Other comprehensive loss: | ||||
Unrealized loss on available-for-sale securities, net of income tax expense of $—, $7, $— and $— | 0 | 0 | 0 | (4) |
Foreign currency translation, net of income tax (expense) benefit of $29, $(2), $(56) and $(10) | 923 | (148) | (1,157) | (342) |
Net other comprehensive income (loss) during period | 923 | (148) | (1,157) | (346) |
Comprehensive loss | $ (10,159) | $ (13,647) | $ (85,618) | $ (4,563) |
Condensed Condensed Consolidate
Condensed Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||||||
Unrealized gain (loss) on marketable securities, tax (benefit) expense | $ 0 | $ 7 | $ 7 | $ 0 | $ 0 | |||
Foreign currency translation tax expense (benefit) | $ 29 | $ (56) | $ (29) | $ (2) | $ (21) | $ 13 | $ (56) | $ (10) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
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 loss | 13,884 | 13,884 | ||
Foreign currency translation adjustment, including income tax expense (benefit) | 217 | 217 | ||
Stock-based compensation expense | 1,225 | $ 1,225 | ||
Common stock issued under equity compensation plan, net of shares withheld for tax payments (in shares) | 201 | |||
Common stock issued under equity compensation plan, net of shares withheld for tax payments | (1,259) | $ (1,259) | ||
Common stock issued under employee stock purchase plan, shares | 17 | |||
Common stock issued under employee stock purchase plan | 269 | $ 269 | ||
Balance, shares at Jun. 30, 2021 | 30,794 | |||
Ending balance at Jun. 30, 2021 | 196,881 | $ 2,411 | 194,408 | 62 |
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 loss | (4,217) | |||
Unrealized loss on marketable securities, net of income tax expense of $7 | (4) | |||
Foreign currency translation adjustment, including income tax expense (benefit) | (342) | |||
Balance, shares at Dec. 31, 2021 | 31,245 | |||
Ending balance at Dec. 31, 2021 | 180,685 | $ 4,879 | 176,307 | (501) |
Beginning balance at Jun. 30, 2021 | 196,881 | $ 2,411 | 194,408 | 62 |
Balance, shares at Jun. 30, 2021 | 30,794 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (4,602) | (4,602) | ||
Unrealized loss on marketable securities, net of income tax expense of $7 | (4) | (4) | ||
Foreign currency translation adjustment, including income tax expense (benefit) | (411) | (411) | ||
Stock-based compensation expense | 1,540 | $ 1,540 | ||
Common stock issued under equity compensation plan, net of shares withheld for tax payments (in shares) | 365 | |||
Common stock issued under equity compensation plan, net of shares withheld for tax payments | (893) | $ (893) | ||
Balance, shares at Sep. 30, 2021 | 31,159 | |||
Ending balance at Sep. 30, 2021 | 192,511 | $ 3,058 | 189,806 | (353) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (13,499) | (13,499) | ||
Unrealized loss on marketable securities, net of income tax expense of $7 | 0 | |||
Foreign currency translation adjustment, including income tax expense (benefit) | (148) | (148) | ||
Stock-based compensation expense | 1,846 | $ 1,846 | ||
Common stock issued under equity compensation plan, net of shares withheld for tax payments (in shares) | 57 | |||
Common stock issued under equity compensation plan, net of shares withheld for tax payments | (242) | $ (242) | ||
Common stock issued under employee stock purchase plan, shares | 29 | |||
Common stock issued under employee stock purchase plan | 217 | $ 217 | ||
Balance, shares at Dec. 31, 2021 | 31,245 | |||
Ending balance at Dec. 31, 2021 | 180,685 | $ 4,879 | 176,307 | (501) |
Beginning balance at Mar. 31, 2022 | 164,049 | $ 6,483 | 158,093 | (527) |
Balance, shares at Mar. 31, 2022 | 31,268 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (60,177) | |||
Foreign currency translation adjustment, including income tax expense (benefit) | (859) | (859) | ||
Stock-based compensation expense | 1,979 | $ 1,979 | ||
Shares Issued, Value, Share-based Payment Arrangement, Forfeited | $ (270) | |||
Common stock issued under equity compensation plan, net of shares withheld for tax payments (in shares) | 205 | |||
Common stock issued under equity compensation plan, net of shares withheld for tax payments | (270) | |||
Common stock issued under employee stock purchase plan | 125 | $ 125 | ||
Balance, shares at Jun. 30, 2022 | 31,473 | |||
Ending balance at Jun. 30, 2022 | 104,847 | $ 8,317 | 97,916 | (1,386) |
Beginning balance at Mar. 31, 2022 | 164,049 | $ 6,483 | 158,093 | (527) |
Balance, shares at Mar. 31, 2022 | 31,268 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (84,461) | |||
Unrealized loss on marketable securities, net of income tax expense of $7 | 0 | |||
Foreign currency translation adjustment, including income tax expense (benefit) | (1,157) | |||
Balance, shares at Dec. 31, 2022 | 31,832 | |||
Ending balance at Dec. 31, 2022 | 82,993 | $ 11,046 | 73,631 | (1,684) |
Beginning balance at Jun. 30, 2022 | 104,847 | $ 8,317 | 97,916 | (1,386) |
Balance, shares at Jun. 30, 2022 | 31,473 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (13,203) | (13,203) | ||
Foreign currency translation adjustment, including income tax expense (benefit) | (1,221) | (1,221) | ||
Stock-based compensation expense | 1,367 | $ 1,367 | ||
Common stock issued under equity compensation plan, shares | 241 | |||
Common stock issued under equity compensation plan, net of shares withheld for tax payments | $ (171) | |||
Balance, shares at Sep. 30, 2022 | 31,714 | |||
Ending balance at Sep. 30, 2022 | 91,619 | $ 9,513 | 84,713 | (2,607) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (11,082) | (11,082) | ||
Unrealized loss on marketable securities, net of income tax expense of $7 | 0 | |||
Foreign currency translation adjustment, including income tax expense (benefit) | 923 | 923 | ||
Stock-based compensation expense | 1,495 | $ 1,495 | ||
Common stock issued under equity compensation plan, shares | 118 | |||
Common stock issued under equity compensation plan, net of shares withheld for tax payments | $ (50) | |||
Common stock issued under employee stock purchase plan | 88 | $ 88 | ||
Balance, shares at Dec. 31, 2022 | 31,832 | |||
Ending balance at Dec. 31, 2022 | $ 82,993 | $ 11,046 | $ 73,631 | $ (1,684) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - Parenthetical (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||||||
Unrealized gain (loss) on marketable securities, tax (benefit) expense | $ 0 | $ 7 | $ 7 | $ 0 | $ 0 | |||
Foreign currency translation tax expense (benefit) | $ (29) | $ 56 | $ 29 | $ 2 | $ 21 | $ (13) | $ 56 | $ 10 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | |
Cash flows from operating activities: | |||||||
Loss from continuing operations | $ (11,081) | $ (13,455) | $ (86,562) | $ (4,006) | |||
Gain (loss) from discontinued operations | (1) | (44) | 2,101 | (211) | |||
Net loss | (11,082) | $ (60,177) | (13,499) | $ 13,884 | (84,461) | (4,217) | |
Adjustments to reconcile net loss to cash used in operating activities: | |||||||
Depreciation and amortization | 7,956 | 5,987 | |||||
Recovery (provision) for allowance for doubtful accounts | 549 | (468) | |||||
Inventory lower of cost or net realizable value | 1,196 | 291 | |||||
Stock-based compensation expense | 4,830 | 4,611 | |||||
Liability classified stock-based compensation expense | 42 | 0 | |||||
Gain on asset dispositions | (2) | 0 | |||||
Loss on extinguishment | 228 | 0 | |||||
Deferred income taxes, net of valuation allowances | 8,200 | (2,938) | |||||
Goodwill and intangible impairment charge | 0 | 0 | 26,965 | 0 | |||
Other | (122) | 610 | |||||
Changes in operating assets and liabilities: | |||||||
Trade receivables | 18,537 | (4,298) | |||||
Inventories | 34,118 | (59,258) | |||||
Prepaids and other assets | 5,569 | 10,059 | |||||
Income taxes receivable | 300 | (13,774) | |||||
Trade payables | (16,499) | (36,366) | |||||
Accrued liabilities and other liabilities, including warranty obligations | (19,186) | 8,178 | |||||
Net cash used in operating activities | (11,780) | (91,583) | |||||
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 | (26,012) | |||||
Purchases of property, plant and equipment | (10,697) | (9,136) | |||||
Net cash provided by (used in) investing activities | (10,697) | 38,300 | |||||
Cash flows from financing activities: | |||||||
Proceeds from long-term debt | 88,107 | 63,652 | |||||
Payments on long-term debt | (58,064) | (22,477) | |||||
Payment of debt issuance costs | (2,094) | (577) | |||||
Payments on finance lease liabilities | (90) | (30) | $ (60) | ||||
Proceeds from employee stock purchases | 213 | 486 | |||||
Proceeds from exercise of stock options | 0 | 472 | |||||
Tax payments related to stock award issuances | (480) | (2,866) | |||||
Net cash provided by financing activities | 27,592 | 38,660 | |||||
Effect of exchange rate changes | (2,847) | (1,529) | |||||
Net decrease in cash, cash equivalents and restricted cash | 2,268 | (16,152) | |||||
Cash, cash equivalents and restricted cash: | |||||||
Cash, cash equivalents and restricted cash at beginning of period | $ 18,098 | $ 39,780 | 18,098 | 39,780 | 39,780 | ||
Cash, cash equivalents and restricted cash at end of period | 20,366 | 23,628 | 20,366 | 23,628 | 18,098 | ||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for interest | 954 | 639 | |||||
Cash paid for income taxes, net | 277 | 19,857 | |||||
Supplemental disclosure of non-cash investing activities: | |||||||
Capital expenditures incurred but not yet paid | 368 | 333 | |||||
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the total of the same amounts shown above: | |||||||
Cash and cash equivalents | 15,532 | 18,402 | 15,532 | 18,402 | 12,872 | ||
Restricted cash | 947 | 1,339 | 947 | 1,339 | 1,339 | ||
Other current assets - restricted, current | 3,887 | 3,887 | 3,887 | 3,887 | 3,887 | ||
Total cash, cash equivalents and restricted cash | $ 20,366 | $ 23,628 | $ 20,366 | $ 23,628 | $ 18,098 |
General Information
General Information | 9 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General Information | GENERAL INFORMATION Basis of Consolidation and Presentation The accompanying condensed consolidated financial statements present the financial position, results of operations and cash flows of Nautilus, Inc. and its subsidiaries, all of which are wholly owned. Intercompany transactions and balances have been eliminated in consolidation. The accompanying condensed consolidated financial statements have not been audited. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management believes the disclosures contained herein are adequate to make the information presented not misleading. However, these condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (the “2022 Form 10-K”). 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. Uncertainties regarding such estimates and assumptions are inherent in the preparation of financial statements and actual results could differ from those estimates. These uncertainties will be heightened by the COVID-19 pandemic, as we may be unable to accurately predict the impact of COVID-19 going forward and as a result our estimates may change in the near term. Further information regarding significant estimates can be found in our 2022 Form 10-K. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of December 31, 2022 and March 31, 2022, and our results of operations, comprehensive loss and shareholders' equity for the three and nine-month periods ended December 31, 2022 and 2021 and our cash flows for the three and nine-month periods ended December 31, 2022 and 2021. Interim results are not necessarily indicative of results for a full year. Our revenues typically vary seasonally, and this seasonality can have a significant effect on operating results, inventory levels and working capital needs. Unless indicated otherwise, all information regarding our operating results pertain to our continuing operations. Recent Accounting Pronouncements Recently 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 the fiscal year ending March 31, 2023 ("fiscal 2023") did not have any effect on our financial position, results of operations or cash flows. ASU 2020-04 and ASU 2021-01 In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848),” which provides optional guidance related to reference rate reform and provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for our borrowing instruments, which use London Inter-bank Offered Rate (“LIBOR”) as a reference rate, which is effective beginning on March 12, 2020, and we may elect to apply the amendments prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848),” which permits entities to apply optional expedients in Topic 848 to derivative instruments modified because of discounting transition resulting from reference rate reform. The adoption of this guidance had no material impact 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 and cash flows. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | DISCONTINUED OPERATIONS Results from discontinued operations relate to the disposal of our former Nautilus Commercial business, which was completed in April 2011. Although we reached substantial completion of asset liquidation at December 31, 2012, we continued to accrue interest associated with an uncertain tax position on discontinued international operations, and incurred an immaterial amount of product liability expenses associated with products previously sold into the Commercial channel. In the second quarter of fiscal 2023, we completed the 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 during the quarter ended September 30, 2022. There were no further significant activities or changes to our discontinued operations during the third quarter of fiscal 2023. |
Revenues
Revenues | 9 Months Ended |
Dec. 31, 2022 | |
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): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Product sales $ 92,304 $ 141,885 $ 202,007 $ 454,822 Extended warranties and services 1,453 1,841 3,433 4,985 Other (1) 4,322 3,532 12,914 10,003 Net sales $ 98,079 $ 147,258 $ 218,354 $ 469,810 (1) Other revenue is primarily subscription revenue, freight and delivery and royalty income. Subscriptions 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 also offer free trials of subscriptions that are bundled with product offerings (e.g., subscription for premium content). For these types of transactions that involve multiple performance obligations, the transaction price requires allocations to the distinct performance obligation because the free trial provides a material right. The transaction price is then allocated to each performance obligation based on stand-alone 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 subscription. Breakage or activation rate, is defined as a percentage of those purchasers that never activate a free-trial offering. Our revenues disaggregated by geographic region, based on ship-to address, were as follows (in thousands): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 United States $ 75,627 $ 110,870 $ 175,148 $ 360,540 Canada 17,657 22,912 31,852 60,126 Europe, the Middle East and Africa 3,859 9,874 8,038 37,456 All other 936 3,602 3,316 11,688 Net sales $ 98,079 $ 147,258 $ 218,354 $ 469,810 As of December 31, 2022, estimated revenue expected to be recognized in the future totaled $18.9 million, primarily related to customer order backlog, which includes firm orders for future shipment and unfulfilled orders to our Retail customers, as well as unfulfilled consumer orders within the Direct channel. Retail orders were $16.8 million and Direct orders were $2.1 million as of December 31, 2022 compared to Retail orders of $44.2 million and Direct orders of $8.8 million as of December 31, 2021. The estimated future revenues are net of contractual rebates and consideration payable for applicable Retail customers, and net of current promotional programs and sales discounts for our Direct customers. 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): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Balance, beginning of period $ 4,194 $ 3,453 $ 6,285 $ 5,551 Cash additions 3,315 4,203 6,112 8,749 Revenue recognition (2,361) (1,378) (7,249) (8,022) Balance, end of period $ 5,148 $ 6,278 $ 5,148 $ 6,278 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Dec. 31, 2022 | |
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. Assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Derivatives Foreign currency forward contracts $ — $ 239 $ — $ 239 Total assets measured at fair value $ — $ 239 $ — $ 239 March 31, 2022 Level 1 Level 2 Level 3 Total Liabilities: Derivatives Foreign currency forward contracts $ — $ 128 $ — $ 128 Total liabilities measured at fair value $ — $ 128 $ — $ 128 For our assets measured at fair value on a recurring basis, we recognize transfers between levels at the actual date of the event or change in circumstance that caused the transfer. There were no transfers between levels during the nine-month period ended December 31, 2022, nor for the fiscal year ended March 31, 2022 ("fiscal 2022"). Additionally, we did not have any changes to our valuation techniques during either of these periods. The fair values of our foreign currency forward contracts are 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. During the nine-month period ended December 31, 2022, we evaluated the fair value of our goodwill and intangible assets because triggering events were identified. See Note 8 for additional information. |
Derivatives
Derivatives | 9 Months Ended |
Dec. 31, 2022 | |
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 December 31, 2022, total outstanding contract notional amounts were $13.8 million and had maturities of 76 days or less. The fair value of our derivative instruments was included in our condensed consolidated balance sheets as follows (in thousands): Balance Sheet Classification As of December 31, 2022 March 31, 2022 Derivative instruments not designated as cash flow hedges: Foreign currency forward contracts Prepaids and other current assets $ 239 $ — Foreign currency forward contracts Accrued liabilities — 128 The effect of derivative instruments on our condensed consolidated statements of operations was as follows (in thousands): Statement of Operations Classification Three-months ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Derivative instruments not designated as cash flow hedges: Income (loss) recognized in earnings Other, net $ 993 $ 797 $ 404 $ (163) Income tax expense (benefit) Income tax expense (benefit) 249 (194) 101 40 |
Inventories
Inventories | 9 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories are stated at the lower of cost and net realizable value, with cost determined based on the first-in, first-out method. Our inventories consisted of the following (in thousands): As of December 31, 2022 March 31, 2022 Finished goods $ 72,421 $ 104,988 Parts and components 4,894 6,202 Total inventories $ 77,315 $ 111,190 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Dec. 31, 2022 | |
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 December 31, 2022 March 31, 2022 Automobiles 5 $ 23 $ 23 Leasehold improvements 4 to 20 3,597 3,150 Computer software and equipment 2 to 7 46,752 44,852 Machinery and equipment 3 to 5 15,037 16,447 Furniture and fixtures 5 to 20 2,047 2,634 Work in progress (1) N/A 13,009 6,678 Total cost 80,465 73,784 Accumulated depreciation (46,321) (41,655) Total property, plant and equipment, net $ 34,144 $ 32,129 (1) Work in progress includes information technology assets and production tooling. Depreciation expense was as follows (in thousands): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Depreciation expense $ 3,155 $ 1,993 $ 7,910 $ 5,941 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The roll forward of goodwill was as follows (in thousands): Total Balance, March 31, 2022 $ 24,510 Goodwill impairment (24,510) Balance, December 31, 2022 $ — 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 in Step 1 of the 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 Step 1. 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 Step 1 (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. 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 consisted of the following (in thousands): Estimated As of December 31, 2022 March 31, 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 (838) (791) Other intangible assets, net $ 6,802 $ 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): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Amortization expense $ 15 $ 15 $ 46 $ 46 Future amortization of definite-lived intangible assets is as follows (in thousands): Remainder of fiscal 2023 $ 15 2024 61 2025 61 2026 47 2027 3 Thereafter 18 $ 205 |
Leases
Leases | 9 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | LEASES We have several non-cancellable 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. Lease expense was as follows (in thousands): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Operating lease expense $ 1,406 $ 1,465 $ 4,466 $ 4,397 Amortization of finance lease assets 28 29 85 29 Total lease expense $ 1,434 $ 1,494 $ 4,551 $ 4,426 Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance sheet and are recognized on a straight-line basis over the lease term. Other information related to leases was as follows (dollars in thousands): As of December 31, 2022 March 31, 2022 Supplemental cash flow information related to leases was as follows: Operating leases: Operating lease right-of-use-assets $ 20,033 $ 23,620 Operating lease liabilities, non-current $ 17,504 $ 20,926 Operating lease liabilities, current portion 4,148 4,494 Total operating lease liabilities $ 21,652 $ 25,420 Finance leases: Property, plant and equipment, at cost $ 512 $ 569 Accumulated depreciation (86) (57) Property, plant and equipment, net $ 426 $ 512 Finance lease obligations, non-current $ 311 $ 395 Finance lease obligations, current portion 121 119 Total finance lease liabilities $ 432 $ 514 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow from operating leases $ 4,996 $ 6,485 Finance cash flows from finance leases 90 60 Additional lease information: ROU assets obtained in exchange for operating lease obligations $ — $ 10,323 ROU assets obtained in exchange for finance lease obligations — 569 Reductions to ROU assets resulting from reductions to operating lease obligations 901 1,358 Weighted Average Remaining Lease Term: Operating leases 2.4 years 3.1 years Finance leases 3.8 years 4.5 years Weighted Average Discount Rate: Operating leases 4.65% 4.65% Finance leases 2.14% 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-cancellable leases were as follows (in thousands): As of December 31, 2022 Operating leases Finance leases Remainder of fiscal 2023 $ 1,011 $ 29 2024 5,532 120 2025 5,599 120 2026 4,517 120 2027 2,359 60 Thereafter 5,796 — Total undiscounted lease payments 24,814 449 Less imputed interest (3,162) (17) Total lease liabilities $ 21,652 $ 432 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consisted of the following (in thousands): As of December 31, 2022 March 31, 2022 Payroll and related liabilities $ 7,570 $ 10,405 Deferred revenue 5,148 6,285 Legal settlement (2) 33 4,250 Other 2,930 4,013 Reserves (1) 1,715 4,433 Total accrued liabilities $ 17,396 $ 29,386 (1) Reserves primarily consists of inventory, sales return, sales tax and product liability reserves. |
Product Warranties
Product Warranties | 9 Months Ended |
Dec. 31, 2022 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | PRODUCT WARRANTIESOur 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. Changes in our product warranty obligations were as follows (in thousands): Nine-Months Ended December 31, 2022 2021 Balance, beginning of period $ 4,351 $ 8,651 Accruals 1,030 4,416 Payments (1,589) (5,942) Balance, end of period $ 3,792 $ 7,125 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables set forth the changes in accumulated other comprehensive loss, net of tax (in thousands): Foreign Currency Translation Adjustments Accumulated Other Comprehensive Loss Balance, March 31, 2022 $ (527) $ (527) Current period other comprehensive loss before reclassifications (1,157) (1,157) Net other comprehensive loss during period (1,157) (1,157) Balance, December 31, 2022 $ (1,684) $ (1,684) Foreign Currency Translation Adjustments Accumulated Other Comprehensive (Loss) Income Balance, September 30, 2022 $ (2,607) $ (2,607) Current period other comprehensive loss before reclassifications 923 923 Net other comprehensive loss during period 923 923 Balance, December 31, 2022 $ (1,684) $ (1,684) Unrealized Loss on Available-for-Sale Securities Foreign Currency Translation Adjustments Accumulated Other Comprehensive Loss Balance, March 31, 2021 $ (8) $ (147) $ (155) Current period other comprehensive income before reclassifications (4) (342) (346) Net other comprehensive income during period (4) (342) (346) Balance, December 31, 2021 $ (12) $ (489) $ (501) |
Loss Per Share
Loss Per Share | 9 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | LOSS PER SHARE Basic per share amounts were computed using the weighted average number of common shares outstanding. Diluted 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. 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. The weighted average numbers of shares outstanding used to compute (loss) income per share were as follows (in thousands): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Shares used to calculate basic income per share 31,514 31,199 31,502 30,955 Dilutive effect of outstanding stock options, performance stock units and restricted stock units — — — — Shares used to calculate diluted income per share 31,514 31,199 31,502 30,955 Dilutive Shares The weighted average numbers of shares outstanding listed in the table below were dilutive and are excluded from the computation of diluted per share due 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) per share. These shares may be dilutive potential common shares in the future (in thousands): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Restricted stock units 102 673 201 1,024 Stock options 44 357 104 504 Total potential dilutive shares excluded due to net loss 146 1,030 305 1,528 Anti-dilutive Shares 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 restricted stock units, 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): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Stock options 1,849 1,168 1,391 333 RSUs 855 2 193 2 Total anti-dilutive shares excluded 2,704 1,170 1,584 335 |
Segment and Enterprise-wide Inf
Segment and Enterprise-wide Information | 9 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment and Enterprise-wide Information | SEGMENT AND ENTERPRISE-WIDE INFORMATION We have two operating segments, Direct and Retail. There were no changes in our operating segments during the nine-months ended December 31, 2022. We evaluate performance of the operating segments 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, cash equivalents and restricted cash, 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): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Net sales: Direct $ 46,729 $ 60,705 $ 97,686 $ 161,954 Retail 50,601 85,701 117,949 305,338 Royalty 749 852 2,719 2,518 Consolidated net sales $ 98,079 $ 147,258 $ 218,354 $ 469,810 Contribution: Direct $ (6,463) $ (8,980) $ (24,244) $ (4,056) Retail 3,447 3,270 (994) 44,101 Royalty 749 852 2,719 2,518 Consolidated contribution $ (2,267) $ (4,858) $ (22,519) $ 42,563 Reconciliation of consolidated contribution to (loss) income from continuing operations: Consolidated contribution $ (2,267) $ (4,858) $ (22,519) $ 42,563 Amounts not directly related to segments: Operating expenses (1) (8,021) (14,456) (53,295) (45,960) Other expense, net (471) (1,142) (2,175) (1,930) Income tax expense (322) 7,001 (8,573) 1,321 Loss from continuing operations $ (11,081) $ (13,455) $ (86,562) $ (4,006) (1) Included in unallocated Operating expenses is 25.4 million of Goodwill and intangible impairment charge related to the Direct segment and 1.6 million of intangible impairment charge related to the Retail segment that is not included in the contribution performance measured by the chief operating decision maker. As of December 31, 2022 March 31, 2022 Assets: Direct $ 62,953 $ 93,554 Retail 97,385 144,683 Unallocated corporate 64,755 75,808 Total assets $ 225,093 $ 314,045 The following customers accounted for 10% or more of total net sales as follows: Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Amazon.com 10.0% * 22.0% 14.4% Best Buy * 14.0% * 16.6% Costco 11.0% * * * *Less than 10% of total net sales. |
Borrowings
Borrowings | 9 Months Ended |
Dec. 31, 2022 | |
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 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 1.00:1.00 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). This description of the SLR Credit Agreement is a summary only and qualified in its entirety by reference to the text of the SLR Credit Agreement, which is included in the exhibit index of this Form 10-Q for the period ending December 31, 2022. Amendment to Existing WF ABL Revolving Facility On November 30, 2022, the Company also entered into an Amendment (the “Amendment”) by and among the Company, as borrower, Wells Fargo Bank, National Assocation as Agent, and the lenders from time to time party thereto (the "WF Lenders"), which amended the Company’s existing asset-based revolving loan facility (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, among the Company, the lenders from time to time party thereto and Wells Fargo, as Agent (the “Existing Credit Agreement” and, as amended by the Amendment, the “Wells Fargo Credit Agreement”). Capitalized terms used but not defined in this report have the meanings ascribed to such terms in the Wells Fargo Credit Agreement. 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 transaction contemplated by 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% in the Existing Credit Agreement (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% in the Existing Credit Agreement (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. Other than as specifically provided in the Amendment, the Amendment had no effect on any schedules, exhibits or attachments to the Existing Credit Agreement. Other than as specifically provided in the Amendment, the Guaranty and Security Agreement related to the Wells Fargo Credit Agreement remains in effect. This description of the Amendment is a summary only and qualified in its entirety by reference to the text of the Amendment and the Wells Fargo Credit Agreement, which are included in the exhibit index of this Form 10-Q for the period ending December 31, 2022. 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 Condensed Consolidated Statements of Operations. As of December 31, 2022, outstanding principal and accrued and unpaid interest totaled $61.5 million, with $30.3 million and $31.2 million under our SLR Term Loan Facility and WF Revolver, respectively. As of December 31, 2022, we were in compliance with the financial covenants of both the SLR Credit Agreement and WF Credit Agreement, and $26.9 million was available for borrowing under WF ABL Revolving Facility. Interest on the WF Revolver loan facility accrues at the Secured Overnight Financing Rate ("SOFR") plus a margin of 5.00% to 5.50% (based on average quarterly availability) and interest on the SLR Term Loan Facility accrues at SOFR plus a margin of 7.75% to 8.25% (based on fixed charge coverage ratio). As of December 31, 2022, our interest rate was 9.40% for the WF Revolver and 12.92% for the SLR Term Loan Facility. 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 | 9 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES 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. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Dec. 31, 2022 | |
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, se e Note 9 Leases . Guarantees, Commitments and Off-Balance Sheet Arrangements As of December 31, 2022, 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 December 31, 2022, we had approximately $9.3 million, compared to $39.8 million as of March 31, 2022, in non-cancellable market-based purchase obligations, primarily to secure additional factory capacity for inventory purchases in the next twelve months. The decrease in purchase obligations was primarily due to having received much of the inventory we have ordered for the season. Purchase obligations can vary from quarter-to-quarter and versus the same period in prior years due to a number of factors, including the amount of products that are shipped directly to Retail customer warehouses versus through Nautilus warehouses. 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 December 31, 2022. 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 and tax 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 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, the 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. Further, while we face contingencies that are reasonably possible to occur, other than as discussed below, we are unable to estimate the possible loss or range of loss at this time. 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 included damages, a one-year free membership to JRNY ® |
Subsequent Events
Subsequent Events | 9 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Cost Reduction Initiatives In February 2023, we executed a reduction in our workforce by approximately 15%. In addition, we have reduced our contracted labor, leveraging the flexibility of our variable operating model. |
General Information (Policies)
General Information (Policies) | 9 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | Recent Accounting Pronouncements Recently 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 the fiscal year ending March 31, 2023 ("fiscal 2023") did not have any effect on our financial position, results of operations or cash flows. ASU 2020-04 and ASU 2021-01 In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848),” which provides optional guidance related to reference rate reform and provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for our borrowing instruments, which use London Inter-bank Offered Rate (“LIBOR”) as a reference rate, which is effective beginning on March 12, 2020, and we may elect to apply the amendments prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848),” which permits entities to apply optional expedients in Topic 848 to derivative instruments modified because of discounting transition resulting from reference rate reform. The adoption of this guidance had no material impact 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 and cash flows. |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
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): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Product sales $ 92,304 $ 141,885 $ 202,007 $ 454,822 Extended warranties and services 1,453 1,841 3,433 4,985 Other (1) 4,322 3,532 12,914 10,003 Net sales $ 98,079 $ 147,258 $ 218,354 $ 469,810 (1) Other revenue is primarily subscription revenue, freight and delivery and royalty income. Subscriptions 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 also offer free trials of subscriptions that are bundled with product offerings (e.g., subscription for premium content). For these types of transactions that involve multiple performance obligations, the transaction price requires allocations to the distinct performance obligation because the free trial provides a material right. The transaction price is then allocated to each performance obligation based on stand-alone 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 subscription. Breakage or activation rate, is defined as a percentage of those purchasers that never activate a free-trial offering. Our revenues disaggregated by geographic region, based on ship-to address, were as follows (in thousands): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 United States $ 75,627 $ 110,870 $ 175,148 $ 360,540 Canada 17,657 22,912 31,852 60,126 Europe, the Middle East and Africa 3,859 9,874 8,038 37,456 All other 936 3,602 3,316 11,688 Net sales $ 98,079 $ 147,258 $ 218,354 $ 469,810 |
Contract with Customer, Asset and Liability | 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): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Balance, beginning of period $ 4,194 $ 3,453 $ 6,285 $ 5,551 Cash additions 3,315 4,203 6,112 8,749 Revenue recognition (2,361) (1,378) (7,249) (8,022) Balance, end of period $ 5,148 $ 6,278 $ 5,148 $ 6,278 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Assets Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Derivatives Foreign currency forward contracts $ — $ 239 $ — $ 239 Total assets measured at fair value $ — $ 239 $ — $ 239 March 31, 2022 Level 1 Level 2 Level 3 Total Liabilities: Derivatives Foreign currency forward contracts $ — $ 128 $ — $ 128 Total liabilities measured at fair value $ — $ 128 $ — $ 128 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value of our derivative instruments was included in our condensed consolidated balance sheets as follows (in thousands): Balance Sheet Classification As of December 31, 2022 March 31, 2022 Derivative instruments not designated as cash flow hedges: Foreign currency forward contracts Prepaids and other current assets $ 239 $ — Foreign currency forward contracts Accrued liabilities — 128 |
Derivative Instruments, Gain (Loss) | The effect of derivative instruments on our condensed consolidated statements of operations was as follows (in thousands): Statement of Operations Classification Three-months ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Derivative instruments not designated as cash flow hedges: Income (loss) recognized in earnings Other, net $ 993 $ 797 $ 404 $ (163) Income tax expense (benefit) Income tax expense (benefit) 249 (194) 101 40 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net of Valuation Allowances | Our inventories consisted of the following (in thousands): As of December 31, 2022 March 31, 2022 Finished goods $ 72,421 $ 104,988 Parts and components 4,894 6,202 Total inventories $ 77,315 $ 111,190 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following (in thousands): Estimated As of December 31, 2022 March 31, 2022 Automobiles 5 $ 23 $ 23 Leasehold improvements 4 to 20 3,597 3,150 Computer software and equipment 2 to 7 46,752 44,852 Machinery and equipment 3 to 5 15,037 16,447 Furniture and fixtures 5 to 20 2,047 2,634 Work in progress (1) N/A 13,009 6,678 Total cost 80,465 73,784 Accumulated depreciation (46,321) (41,655) Total property, plant and equipment, net $ 34,144 $ 32,129 (1) Work in progress includes information technology assets and production tooling. |
Schedule Of Depreciation Expense | Depreciation expense was as follows (in thousands): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Depreciation expense $ 3,155 $ 1,993 $ 7,910 $ 5,941 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The roll forward of goodwill was as follows (in thousands): Total Balance, March 31, 2022 $ 24,510 Goodwill impairment (24,510) Balance, December 31, 2022 $ — |
Schedule of Finite-Lived Intangible Assets | Other intangible assets consisted of the following (in thousands): Estimated As of December 31, 2022 March 31, 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 (838) (791) Other intangible assets, net $ 6,802 $ 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. |
Schedule of Indefinite-Lived Intangible Assets | Other intangible assets consisted of the following (in thousands): Estimated As of December 31, 2022 March 31, 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 (838) (791) Other intangible assets, net $ 6,802 $ 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): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Amortization expense $ 15 $ 15 $ 46 $ 46 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future amortization of definite-lived intangible assets is as follows (in thousands): Remainder of fiscal 2023 $ 15 2024 61 2025 61 2026 47 2027 3 Thereafter 18 $ 205 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease, Cost | Lease expense was as follows (in thousands): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Operating lease expense $ 1,406 $ 1,465 $ 4,466 $ 4,397 Amortization of finance lease assets 28 29 85 29 Total lease expense $ 1,434 $ 1,494 $ 4,551 $ 4,426 |
Lessee, Supplemental Cash Flows Information | Other information related to leases was as follows (dollars in thousands): As of December 31, 2022 March 31, 2022 Supplemental cash flow information related to leases was as follows: Operating leases: Operating lease right-of-use-assets $ 20,033 $ 23,620 Operating lease liabilities, non-current $ 17,504 $ 20,926 Operating lease liabilities, current portion 4,148 4,494 Total operating lease liabilities $ 21,652 $ 25,420 Finance leases: Property, plant and equipment, at cost $ 512 $ 569 Accumulated depreciation (86) (57) Property, plant and equipment, net $ 426 $ 512 Finance lease obligations, non-current $ 311 $ 395 Finance lease obligations, current portion 121 119 Total finance lease liabilities $ 432 $ 514 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow from operating leases $ 4,996 $ 6,485 Finance cash flows from finance leases 90 60 Additional lease information: ROU assets obtained in exchange for operating lease obligations $ — $ 10,323 ROU assets obtained in exchange for finance lease obligations — 569 Reductions to ROU assets resulting from reductions to operating lease obligations 901 1,358 Weighted Average Remaining Lease Term: Operating leases 2.4 years 3.1 years Finance leases 3.8 years 4.5 years Weighted Average Discount Rate: Operating leases 4.65% 4.65% Finance leases 2.14% 2.14% |
Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities under non-cancellable leases were as follows (in thousands): As of December 31, 2022 Operating leases Finance leases Remainder of fiscal 2023 $ 1,011 $ 29 2024 5,532 120 2025 5,599 120 2026 4,517 120 2027 2,359 60 Thereafter 5,796 — Total undiscounted lease payments 24,814 449 Less imputed interest (3,162) (17) Total lease liabilities $ 21,652 $ 432 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): As of December 31, 2022 March 31, 2022 Payroll and related liabilities $ 7,570 $ 10,405 Deferred revenue 5,148 6,285 Legal settlement (2) 33 4,250 Other 2,930 4,013 Reserves (1) 1,715 4,433 Total accrued liabilities $ 17,396 $ 29,386 (1) Reserves primarily consists of inventory, sales return, sales tax and product liability reserves. |
Product Warranties (Tables)
Product Warranties (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | Changes in our product warranty obligations were as follows (in thousands): Nine-Months Ended December 31, 2022 2021 Balance, beginning of period $ 4,351 $ 8,651 Accruals 1,030 4,416 Payments (1,589) (5,942) Balance, end of period $ 3,792 $ 7,125 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following tables set forth the changes in accumulated other comprehensive loss, net of tax (in thousands): Foreign Currency Translation Adjustments Accumulated Other Comprehensive Loss Balance, March 31, 2022 $ (527) $ (527) Current period other comprehensive loss before reclassifications (1,157) (1,157) Net other comprehensive loss during period (1,157) (1,157) Balance, December 31, 2022 $ (1,684) $ (1,684) Foreign Currency Translation Adjustments Accumulated Other Comprehensive (Loss) Income Balance, September 30, 2022 $ (2,607) $ (2,607) Current period other comprehensive loss before reclassifications 923 923 Net other comprehensive loss during period 923 923 Balance, December 31, 2022 $ (1,684) $ (1,684) Unrealized Loss on Available-for-Sale Securities Foreign Currency Translation Adjustments Accumulated Other Comprehensive Loss Balance, March 31, 2021 $ (8) $ (147) $ (155) Current period other comprehensive income before reclassifications (4) (342) (346) Net other comprehensive income during period (4) (342) (346) Balance, December 31, 2021 $ (12) $ (489) $ (501) |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The weighted average numbers of shares outstanding used to compute (loss) income per share were as follows (in thousands): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Shares used to calculate basic income per share 31,514 31,199 31,502 30,955 Dilutive effect of outstanding stock options, performance stock units and restricted stock units — — — — Shares used to calculate diluted income per share 31,514 31,199 31,502 30,955 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | These shares may be dilutive potential common shares in the future (in thousands): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Restricted stock units 102 673 201 1,024 Stock options 44 357 104 504 Total potential dilutive shares excluded due to net loss 146 1,030 305 1,528 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 restricted stock units, 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): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Stock options 1,849 1,168 1,391 333 RSUs 855 2 193 2 Total anti-dilutive shares excluded 2,704 1,170 1,584 335 |
Segment and Enterprise-wide I_2
Segment and Enterprise-wide Information (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Summary Information by Reportable Segments | Following is summary information by reportable segment (in thousands): Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Net sales: Direct $ 46,729 $ 60,705 $ 97,686 $ 161,954 Retail 50,601 85,701 117,949 305,338 Royalty 749 852 2,719 2,518 Consolidated net sales $ 98,079 $ 147,258 $ 218,354 $ 469,810 Contribution: Direct $ (6,463) $ (8,980) $ (24,244) $ (4,056) Retail 3,447 3,270 (994) 44,101 Royalty 749 852 2,719 2,518 Consolidated contribution $ (2,267) $ (4,858) $ (22,519) $ 42,563 Reconciliation of consolidated contribution to (loss) income from continuing operations: Consolidated contribution $ (2,267) $ (4,858) $ (22,519) $ 42,563 Amounts not directly related to segments: Operating expenses (1) (8,021) (14,456) (53,295) (45,960) Other expense, net (471) (1,142) (2,175) (1,930) Income tax expense (322) 7,001 (8,573) 1,321 Loss from continuing operations $ (11,081) $ (13,455) $ (86,562) $ (4,006) (1) Included in unallocated Operating expenses is 25.4 million of Goodwill and intangible impairment charge related to the Direct segment and 1.6 million of intangible impairment charge related to the Retail segment that is not included in the contribution performance measured by the chief operating decision maker. As of December 31, 2022 March 31, 2022 Assets: Direct $ 62,953 $ 93,554 Retail 97,385 144,683 Unallocated corporate 64,755 75,808 Total assets $ 225,093 $ 314,045 |
Schedules of Concentration of Risk, by Risk Factor | The following customers accounted for 10% or more of total net sales as follows: Three-Months Ended December 31, Nine-Months Ended December 31, 2022 2021 2022 2021 Amazon.com 10.0% * 22.0% 14.4% Best Buy * 14.0% * 16.6% Costco 11.0% * * * *Less than 10% of total net sales. |
General Information (Details)
General Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Restricted cash | $ 947 | $ 1,339 | $ 1,339 |
Discontinued Operations (Detail
Discontinued Operations (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Discontinued Operations and Disposal Groups [Abstract] | |
Unrecognized tax benefit and associated accrued interest and penalty | $ 2.1 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 98,079 | $ 147,258 | $ 218,354 | $ 469,810 |
Remaining performance obligation | 18,900 | 18,900 | ||
Change In Contract With Customer Liability [Roll Forward] | ||||
Balance, beginning of period | 4,194 | 3,453 | 6,285 | 5,551 |
Cash additions | 3,315 | 4,203 | 6,112 | 8,749 |
Revenue recognition | (2,361) | (1,378) | (7,249) | (8,022) |
Balance, end of period | 5,148 | 6,278 | 5,148 | 6,278 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 75,627 | 110,870 | 175,148 | 360,540 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 17,657 | 22,912 | 31,852 | 60,126 |
Europe, the Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 3,859 | 9,874 | 8,038 | 37,456 |
All other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 936 | 3,602 | 3,316 | 11,688 |
Product sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 92,304 | 141,885 | 202,007 | 454,822 |
Extended warranties and services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,453 | 1,841 | 3,433 | 4,985 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 4,322 | 3,532 | 12,914 | 10,003 |
Retail Orders | ||||
Disaggregation of Revenue [Line Items] | ||||
Remaining performance obligation | 16,800 | 44,200 | 16,800 | 44,200 |
Direct Orders | ||||
Disaggregation of Revenue [Line Items] | ||||
Remaining performance obligation | $ 2,100 | $ 8,800 | $ 2,100 | $ 8,800 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | $ 239 | |
Total liabilities measured at fair value | $ 128 | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | |
Total liabilities measured at fair value | 0 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 239 | |
Total liabilities measured at fair value | 128 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | |
Total liabilities measured at fair value | 0 | |
Foreign currency forward contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward contracts | 239 | |
Foreign currency forward contracts | 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 | |
Foreign currency forward contracts | 0 | |
Foreign currency forward contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward contracts | 239 | |
Foreign currency forward contracts | 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 | |
Foreign currency forward contracts | $ 0 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - Foreign currency forward contracts $ in Millions | 9 Months Ended |
Dec. 31, 2022 USD ($) | |
Derivative [Line Items] | |
Derivative, notional amount | $ 13.8 |
Derivative, term of contract | 76 days |
Derivatives - Fair value of der
Derivatives - Fair value of derivative instruments (Details) - Foreign currency forward contracts - Derivative instruments not designated as cash flow hedges: - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Prepaids and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency forward contracts | $ 239 | $ 0 |
Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of liability derivatives | $ 0 | $ 128 |
Derivatives - Effect On Condens
Derivatives - Effect On Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other, net | Other, net | Other, net | Other, net |
Not Designated as Hedging Instruments | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Income (loss) recognized in earnings | $ 993 | $ 797 | $ 404 | $ (163) |
Not Designated as Hedging Instruments | Income tax expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Income tax benefit | $ 249 | $ (194) | $ 101 | $ 40 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 72,421 | $ 104,988 |
Parts and components | 4,894 | 6,202 |
Total inventories | $ 77,315 | $ 111,190 |
Property, Plant and Equipment (
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2022 | Mar. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 80,465 | $ 73,784 |
Accumulated depreciation | (46,321) | (41,655) |
Total property, plant and equipment, net | 34,144 | 32,129 |
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 | $ 3,597 | 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 | $ 46,752 | 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 | $ 15,037 | 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 | $ 2,047 | 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 | $ 13,009 | $ 6,678 |
Property, Plant and Equipment -
Property, Plant and Equipment - Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 3,155 | $ 1,993 | $ 7,910 | $ 5,941 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill impairment | $ (24,510) |
Goodwill, ending balance | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2022 | Mar. 31, 2022 | |
Goodwill [Line Items] | |||
Market capitalization, average value | $ 66,000 | $ 66,000 | $ 137,000 |
Goodwill, impairment charge | 24,510 | ||
Indefinite-lived trademarks | 6,597 | 6,597 | 9,052 |
Total other intangible assets, gross | 7,640 | 7,640 | 10,095 |
Accumulated amortization - definite-lived intangible assets | (838) | (838) | (791) |
Other intangible assets, net | 6,802 | 6,802 | 9,304 |
Impairment of intangible assets, indefinite-lived (excluding goodwill) | 2,500 | ||
Patents | |||
Goodwill [Line Items] | |||
Finite-lived intangible assets, gross | $ 1,043 | $ 1,043 | $ 1,043 |
Patents | Minimum | |||
Goodwill [Line Items] | |||
Estimated Useful Life (in years) | 7 years | ||
Patents | Maximum | |||
Goodwill [Line Items] | |||
Estimated Useful Life (in years) | 24 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Patent amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 15 | $ 15 | $ 46 | $ 46 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Future intangible amortization (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of fiscal 2023 | $ 15 |
2024 | 61 |
2025 | 61 |
2026 | 47 |
2027 | 3 |
Thereafter | 18 |
Finite-Lived Intangible Assets, Net | $ 205 |
Leases - Additional information
Leases - Additional information (Details) | Dec. 31, 2022 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 | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||||
Operating lease expense | $ 1,406 | $ 1,465 | $ 4,466 | $ 4,397 |
Amortization of finance lease assets | 28 | 29 | 85 | 29 |
Total lease expense | $ 1,434 | $ 1,494 | $ 4,551 | $ 4,426 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | |
Leases [Abstract] | |||
Operating lease right-of-use-assets | $ 20,033 | $ 23,620 | |
Operating lease liabilities, non-current | 17,504 | 20,926 | |
Operating lease liabilities, current portion | 4,148 | 4,494 | |
Total lease liabilities | 21,652 | 25,420 | |
Property, plant and equipment, at cost | 512 | 569 | |
Accumulated depreciation | (86) | (57) | |
Property, plant and equipment, net | 426 | 512 | |
Finance lease obligations, non-current | 311 | 395 | |
Finance lease obligations, current portion | 121 | 119 | |
Total finance lease liabilities | 432 | 514 | |
Operating cash flow from operating leases | 4,996 | 6,485 | |
Finance cash flows from finance leases | 90 | $ 30 | 60 |
ROU assets obtained in exchange for operating lease obligations | 0 | 10,323 | |
ROU assets obtained in exchange for finance lease obligations | 0 | 569 | |
Reductions to ROU assets resulting from reductions to operating lease obligations | $ 901 | $ 1,358 | |
Operating leases, Weighted Average Remaining Lease Term | 2 years 4 months 24 days | 3 years 1 month 6 days | |
Finance leases, Weighted Average Remaining Lease Term | 3 years 9 months 18 days | 4 years 6 months | |
Operating leases, Weighted Average Discount Rate, Percent | 4.65% | 4.65% | |
Finance leases, Weighted Average Discount Rate, Percent | 2.14% | 2.14% |
Leases - Maturity (Details)
Leases - Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Operating leases | ||
2023 | $ 1,011 | |
2024 | 5,532 | |
2025 | 5,599 | |
2026 | 4,517 | |
2027 | 2,359 | |
Thereafter | 5,796 | |
Total undiscounted lease payments | 24,814 | |
Less imputed interest | (3,162) | |
Total lease liabilities | 21,652 | $ 25,420 |
Finance leases | ||
2023 | 29 | |
2024 | 120 | |
2025 | 120 | |
2026 | 120 | |
2027 | 60 | |
Thereafter | 0 | |
Total undiscounted lease payments | 449 | |
Less imputed interest | (17) | |
Total finance lease liabilities | $ 432 | $ 514 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Payables and Accruals [Abstract] | ||
Payroll and related liabilities | $ 7,570 | $ 10,405 |
Deferred revenue | 5,148 | 6,285 |
Legal settlement | 33 | 4,250 |
Other | 2,930 | 4,013 |
Reserves | 1,715 | 4,433 |
Total accrued liabilities | $ 17,396 | $ 29,386 |
Product Warranties (Details)
Product Warranties (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Movement in Product Warranty Liability [Roll Forward] | ||
Balance, beginning of period | $ 4,351 | $ 8,651 |
Accruals | 1,030 | 4,416 |
Payments | (1,589) | (5,942) |
Balance, end of period | $ 3,792 | $ 7,125 |
Minimum | ||
Product Liability Contingency [Line Items] | ||
Product warranty period | 30 days |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 91,619 | $ 192,511 | $ 164,049 | $ 182,545 |
Current period other comprehensive income (loss) before reclassifications | 923 | (148) | (1,157) | (346) |
Net other comprehensive income (loss) during period | 923 | (148) | (1,157) | (346) |
Ending balance | 82,993 | 180,685 | 82,993 | 180,685 |
Unrealized Loss on Available-for-Sale Securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (12) | (8) | ||
Current period other comprehensive income (loss) before reclassifications | 0 | (4) | ||
Net other comprehensive income (loss) during period | 0 | (4) | ||
Ending balance | (12) | (12) | ||
Foreign Currency Translation Adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (2,607) | (341) | (527) | (147) |
Current period other comprehensive income (loss) before reclassifications | 923 | (148) | (1,157) | (342) |
Net other comprehensive income (loss) during period | 923 | (148) | (1,157) | (342) |
Ending balance | (1,684) | (489) | (1,684) | (489) |
Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (2,607) | (353) | (527) | (155) |
Ending balance | $ (1,684) | $ (501) | $ (1,684) | $ (501) |
Loss Per Share - Weighted Avera
Loss Per Share - Weighted Average Number of Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||||
Basic (in shares) | 31,514 | 31,199 | 31,502 | 30,955 |
Dilutive effect of outstanding stock options, performance stock units and restricted stock units (in shares) | 0 | 0 | 0 | 0 |
Shares used to calculate diluted income per share (in shares) | 31,514 | 31,199 | 31,502 | 30,955 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 146 | 1,030 | 305 | 1,528 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 102 | 673 | 201 | 1,024 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 44 | 357 | 104 | 504 |
Loss Per Share - Anti-dilutive
Loss Per Share - Anti-dilutive Common Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 2,704 | 1,170 | 1,584 | 335 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 855 | 2 | 193 | 2 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 1,849 | 1,168 | 1,391 | 333 |
Segment and Enterprise-wide I_3
Segment and Enterprise-wide Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Mar. 31, 2022 USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of operating segments | segment | 2 | ||||
Net sales | $ 98,079 | $ 147,258 | $ 218,354 | $ 469,810 | |
Contribution | (2,267) | (4,858) | (22,519) | 42,563 | |
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||
Operating expenses | (33,148) | (49,230) | (117,090) | (130,871) | |
Income tax expense | (322) | 7,001 | (8,573) | 1,321 | |
Loss from continuing operations | (11,081) | (13,455) | (86,562) | (4,006) | |
Assets | 225,093 | 225,093 | $ 314,045 | ||
Direct | |||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||
Asset impairment charge | 25,400 | ||||
Retail | |||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||
Asset impairment charge | 1,600 | ||||
Unallocated corporate | |||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||
Assets | 64,755 | 64,755 | 75,808 | ||
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 98,079 | 147,258 | 218,354 | 469,810 | |
Contribution | (2,267) | (4,858) | (22,519) | 42,563 | |
Operating Segments | Royalty | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 749 | 852 | 2,719 | 2,518 | |
Unallocated royalty income, net | 749 | 852 | 2,719 | 2,518 | |
Operating Segments | Direct | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 46,729 | 60,705 | 97,686 | 161,954 | |
Contribution | (6,463) | (8,980) | (24,244) | (4,056) | |
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||
Assets | 62,953 | 62,953 | 93,554 | ||
Operating Segments | Retail | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 50,601 | 85,701 | 117,949 | 305,338 | |
Contribution | 3,447 | 3,270 | (994) | 44,101 | |
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||
Assets | 97,385 | 97,385 | $ 144,683 | ||
Corporate, Non-Segment | |||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||
Operating expenses | (8,021) | (14,456) | (53,295) | (45,960) | |
Other expense, net | (471) | (1,142) | (2,175) | (1,930) | |
Income tax expense | $ (322) | $ 7,001 | $ (8,573) | $ 1,321 |
Segment and Enterprise-wide I_4
Segment and Enterprise-wide Information - Concentration (Details) - Sales Revenue, Net - Customer Concentration Risk | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Amazon.com | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 10% | 22% | 14.40% | |
Best Buy | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 14% | 16.60% | ||
Costco | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 11% |
Borrowings (Loan Agreement) (De
Borrowings (Loan Agreement) (Details) | 9 Months Ended | |||
Nov. 30, 2022 USD ($) | Nov. 29, 2022 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Line of Credit Facility [Line Items] | ||||
Extinguishment of debt, amount | $ 9,100,000 | |||
Loss on extinguishment | 228,000 | $ 0 | ||
Line of Credit | SLR Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maximum debt service coverage ratio | 1 | |||
Minimum debt service coverage ratio | 1 | |||
Minimum excess availability | $ 10,000,000 | |||
Percentage of line cap | 12.50% | |||
Borrowing capacity threshold | $ 11,000,000 | |||
Available for borrowing under line of credit | 20,000,000 | |||
Line of Credit | Secured Debt | SLR Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Aggregate principal amount | $ 30,000,000 | |||
Line of Credit | Secured Debt | Secured Overnight Financing Rate (SOFR) | SLR Credit Agreement | Variable Rate Component One | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 8.25% | |||
Line of Credit | Wells Fargo Bank | ||||
Line of Credit Facility [Line Items] | ||||
Amount outstanding | 61,500,000 | |||
Line of Credit | Wells Fargo Bank | ABL Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Amount outstanding | 31,200,000 | |||
Available for borrowing under line of credit | $ 26,900,000 | |||
Borrowing rate under agreement, at period end | 9.40% | |||
Line of Credit | Wells Fargo Bank | Term Loan | ||||
Line of Credit Facility [Line Items] | ||||
Amount outstanding | $ 30,300,000 | |||
Borrowing rate under agreement, at period end | 12.92% | |||
Minimum | Line of Credit | WF Credit Facility | Variable Rate Component One | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.75% | 5% | ||
Minimum | Line of Credit | WF Credit Facility | Variable Rate Component Two | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 0.75% | 4% | ||
Minimum | Line of Credit | Secured Debt | Secured Overnight Financing Rate (SOFR) | SLR Credit Agreement | Variable Rate Component One | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 7.75% | |||
Minimum | Line of Credit | Wells Fargo Bank | ABL Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 5% | |||
Minimum | Line of Credit | Wells Fargo Bank | Term Loan | Secured Overnight Financing Rate (SOFR) | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 7.75% | |||
Maximum | Line of Credit | WF Credit Facility | Variable Rate Component One | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.25% | 5.50% | ||
Maximum | Line of Credit | WF Credit Facility | Variable Rate Component Two | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.25% | 4.50% | ||
Maximum | Line of Credit | Secured Debt | Secured Overnight Financing Rate (SOFR) | SLR Credit Agreement | Variable Rate Component One | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 8.25% | |||
Maximum | Line of Credit | Wells Fargo Bank | ABL Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 5.50% | |||
Maximum | Line of Credit | Wells Fargo Bank | Term Loan | Secured Overnight Financing Rate (SOFR) | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 8.25% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance | $ 2,800 | $ 20,600 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2022 | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||
Standby letters of credit outstanding | $ 1.6 | |
Loss contingency | $ 4.7 | |
Inventories | ||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||
Non-cancelable market-based purchase obligation | $ 39.8 | $ 9.3 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 1 Months Ended | |
Feb. 28, 2023 | Mar. 31, 2023 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Percent of positions eliminated | 15% | |
Scenario, Forecast | ||
Subsequent Event [Line Items] | ||
Expected cost | $ 3 |