Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2016 | Oct. 28, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ORION ENERGY SYSTEMS, INC. | |
Entity Central Index Key | 1,409,375 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 28,252,123 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 18,734 | $ 15,542 |
Accounts receivable, net | 12,236 | 10,889 |
Inventories, net | 17,007 | 17,024 |
Deferred contract costs | 392 | 37 |
Prepaid expenses and other current assets | 1,187 | 5,038 |
Total current assets | 49,556 | 48,530 |
Property and equipment, net | 14,049 | 17,004 |
Other intangible assets, net | 4,779 | 5,048 |
Long-term accounts receivable | 13 | 108 |
Other long-term assets | 168 | 185 |
Total assets | 68,565 | 70,875 |
Liabilities and Shareholders’ Equity | ||
Accounts payable | 12,383 | 11,716 |
Accrued expenses and other | 5,741 | 6,586 |
Deferred revenue, current | 601 | 243 |
Current maturities of long-term debt and capital leases | 242 | 746 |
Total current liabilities | 18,967 | 19,291 |
Revolving credit facility | 4,860 | 3,719 |
Long-term debt and capital leases, less current maturities | 237 | 302 |
Deferred revenue, long-term | 983 | 1,022 |
Other long-term liabilities | 443 | 558 |
Total liabilities | 25,490 | 24,892 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Preferred stock, $0.01 par value: Shares authorized: 30,000,000 at September 30, 2016 and March 31, 2016; no shares issued and outstanding at September 30, 2016 and March 31, 2016 | 0 | 0 |
Common stock, no par value: Shares authorized: 200,000,000 at September 30, 2016 and March 31, 2016; shares issued: 37,641,409 at September 30, 2016 and 37,192,559 at March 31, 2016; shares outstanding: 28,214,852 at September 30, 2016 and 27,767,138 at March 31, 2016 | 0 | 0 |
Additional paid-in capital | 153,142 | 152,140 |
Treasury stock, common shares: 9,426,557 at September 30, 2016 and 9,425,421 at March 31, 2016 | (36,075) | (36,075) |
Shareholder notes receivable | (4) | (4) |
Retained deficit | (73,988) | (70,078) |
Total shareholders’ equity | 43,075 | 45,983 |
Total liabilities and shareholders’ equity | $ 68,565 | $ 70,875 |
Unaudited Condensed Consolidat3
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2016 | Mar. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 30,000,000 | 30,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0 | $ 0 |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (shares) | 37,641,409 | 37,192,559 |
Common stock, shares outstanding (shares) | 28,214,852 | 27,767,138 |
Treasury stock, shares (shares) | 9,426,557 | 9,425,421 |
Unaudited Condensed Consolidat4
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Product revenue | $ 17,675 | $ 14,982 | $ 33,027 | $ 30,778 |
Service revenue | 995 | 746 | 1,277 | 1,538 |
Total revenue | 18,670 | 15,728 | 34,304 | 32,316 |
Cost of product revenue | 11,752 | 12,301 | 23,171 | 24,414 |
Cost of service revenue | 674 | 515 | 863 | 1,232 |
Total cost of revenue | 12,426 | 12,816 | 24,034 | 25,646 |
Gross profit | 6,244 | 2,912 | 10,270 | 6,670 |
Operating expenses: | ||||
General and administrative | 3,598 | 3,403 | 7,499 | 7,274 |
Sales and marketing | 3,125 | 2,634 | 6,020 | 5,703 |
Research and development | 517 | 441 | 998 | 863 |
Total operating expenses | 7,240 | 6,478 | 14,517 | 13,840 |
Loss from operations | (996) | (3,566) | (4,247) | (7,170) |
Other income (expense): | ||||
Other income | 90 | 0 | 190 | 0 |
Interest expense | (68) | (60) | (138) | (151) |
Interest income | 14 | 32 | 24 | 80 |
Total other income (expense) | 36 | (28) | 76 | (71) |
Loss before income tax | (960) | (3,594) | (4,171) | (7,241) |
Income tax expense (benefit) | 10 | 6 | (261) | 11 |
Net loss and comprehensive loss | $ (970) | $ (3,600) | $ (3,910) | $ (7,252) |
Basic net loss per share attributable to common shareholders (in dollars per share) | $ (0.03) | $ (0.13) | $ (0.14) | $ (0.26) |
Weighted-average common shares outstanding (in shares) | 28,171,899 | 27,598,492 | 28,029,526 | 27,540,378 |
Diluted net loss per share (in dollars per share) | $ (0.03) | $ (0.13) | $ (0.14) | $ (0.26) |
Weighted-average common shares and share equivalents outstanding (in shares) | 28,171,899 | 27,598,492 | 28,029,526 | 27,540,378 |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating activities | ||
Net loss | $ (3,910) | $ (7,252) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 755 | 1,561 |
Amortization | 482 | 704 |
Stock-based compensation | 868 | 738 |
Loss on sale of property and equipment | 0 | 18 |
Changes in inventory reserves | 443 | 12 |
Provision for bad debts | 67 | 227 |
Other | 112 | 38 |
Changes in operating assets and liabilities: | ||
Accounts receivable, current and long-term | (1,320) | 2,383 |
Inventories | (426) | (1,627) |
Deferred contract costs | (356) | (60) |
Prepaid expenses and other assets | 3,813 | 1,262 |
Accounts payable | 667 | (2,309) |
Accrued expenses and other | (880) | (877) |
Deferred revenue, current and long-term | 319 | (138) |
Net cash provided by (used in) operating activities | 634 | (5,320) |
Investing activities | ||
Purchase of property and equipment | (226) | (179) |
Additions to patents and licenses | (213) | (11) |
Proceeds from sales of property, plant and equipment | 2,600 | 0 |
Net cash provided by (used in) investing activities | 2,161 | (190) |
Financing activities | ||
Payment of long-term debt and capital leases | (743) | (1,000) |
Proceeds from revolving credit facility | 41,211 | 27,088 |
Payment of revolving credit facility | (40,071) | (27,125) |
Payment of common stock issuance costs | 0 | (1) |
Payments to settle employee tax withholdings on stock-based compensation | (4) | (20) |
Net proceeds from employee equity exercises | 4 | 12 |
Net cash provided by (used in) financing activities | 397 | (1,046) |
Net increase (decrease) in cash and cash equivalents | 3,192 | (6,556) |
Cash and cash equivalents at beginning of period | 15,542 | 20,002 |
Cash and cash equivalents at end of period | $ 18,734 | $ 13,446 |
Description of Business
Description of Business | 6 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Organization Orion includes Orion Energy Systems, Inc., a Wisconsin corporation, and all consolidated subsidiaries. Orion is a developer, manufacturer and seller of lighting and energy management systems to commercial and industrial businesses, predominantly in North America. Orion’s corporate offices and leased primary manufacturing operations are located in Manitowoc, Wisconsin. Orion leases office space in Jacksonville, Florida; Chicago, Illinois; and Houston, Texas. Orion also leases warehouse space in Manitowoc, Wisconsin and Augusta, Georgia. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The condensed consolidated financial statements include the accounts of Orion Energy Systems, Inc. and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Reclassifications Where appropriate, certain reclassifications have been made to prior years’ financial statements to conform to the current year presentation. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Orion have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results that may be expected for the year ending March 31, 2017 or other interim periods. The condensed consolidated balance sheet at March 31, 2016 has been derived from the audited and adjusted consolidated financial statements at that date but does not include all of the information required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in Orion’s Annual Report on Form 10-K for the fiscal year ended March 31, 2016 filed with the Securities and Exchange Commission on June 23, 2016 . Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during that reporting period. Areas that require the use of significant management estimates include revenue recognition, inventory obsolescence and allowance for doubtful accounts, accruals for warranty and loss contingencies, income taxes and certain equity transactions. Accordingly, actual results could differ from those estimates. Cash and Cash Equivalents Orion considers all highly liquid, short-term investments with original maturities of three months or less to be cash equivalents. Fair Value of Financial Instruments Orion’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other, revolving credit facility and long-term debt. The carrying amounts of Orion’s financial instruments approximate their respective fair values due to the relatively short-term nature of these instruments, or in the case of long-term debt and revolving credit facility, because of the interest rates currently available to Orion for similar obligations. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. GAAP describes a fair value hierarchy based on the following three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: Level 1 — Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 — Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly. Level 3 — Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management's best estimate of what market participants would use in valuing the asset or liability at the measurement date. Accounts Receivable Orion’s accounts receivable are due from companies in the commercial, industrial and agricultural industries, as well as wholesalers. Credit is extended based on an evaluation of a customer’s financial condition. Generally, collateral is not required for end users; however, the payment of certain trade accounts receivable from wholesalers is secured by irrevocable standby letters of credit and/or guarantees. Accounts receivable are generally due within 30 - 60 days. Accounts receivable are stated at the amount Orion expects to collect from outstanding balances. Orion provides for probable uncollectible amounts through a charge to earnings and a credit to an allowance for doubtful accounts based on its assessment of the current status of individual accounts. Balances that are still outstanding after Orion has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to accounts receivable. Orion's accounts receivable and allowance for doubtful accounts balances were as follows (dollars in thousands): September 30, 2016 March 31, 2016 Accounts receivable, gross $ 12,400 $ 11,394 Allowance for doubtful accounts (164 ) (505 ) Accounts receivable, net $ 12,236 $ 10,889 Financing Receivables Orion considers its lease balances included in consolidated current and long-term accounts receivable from its Orion Throughput Agreement, or OTA, sales-type leases to be financing receivables. Additional disclosures on the credit quality of Orion’s financing receivables are as follows: Aging Analysis as of September 30, 2016 (dollars in thousands): Not Past Due 1-90 days Greater than 90 Total past due Total sales-type Lease balances included in consolidated accounts receivable—current $ 119 $ 1 $ 3 $ 4 $ 123 Lease balances included in consolidated accounts receivable—long-term 13 — — — 13 Total gross sales-type leases 132 1 3 4 136 Allowance — — — — — Total net sales-type leases $ 132 $ 1 $ 3 $ 4 $ 136 Aging Analysis as of March 31, 2016 (dollars in thousands): Not Past Due 1-90 days Greater than 90 Total past due Total sales-type Lease balances included in consolidated accounts receivable—current $ 294 $ 4 $ 10 $ 14 $ 308 Lease balances included in consolidated accounts receivable—long-term 101 — — — 101 Total gross sales-type leases 395 4 10 14 409 Allowance — — (9 ) (9 ) (9 ) Total net sales-type leases $ 395 $ 4 $ 1 $ 5 $ 400 Inventories Inventories consist of raw materials and components, such as drivers, metal sheet and coil stock and molded parts; work in process inventories, such as frames and reflectors; and finished goods, including completed fixtures and systems, and accessories. All inventories are stated at the lower of cost or market value with cost determined using the first-in, first-out (FIFO) method. Orion reduces the carrying value of its inventories for differences between the cost and estimated net realizable value, taking into consideration usage in the preceding 9 to 24 months, expected demand, and other information indicating obsolescence. Orion records, as a charge to cost of product revenue, the amount required to reduce the carrying value of inventory to net realizable value. Orion's inventory balances were as follows (dollars in thousands): Cost Obsolescence Reserve Net As of September 30, 2016 Raw materials and components $ 9,356 $ (1,279 ) $ 8,077 Work in process 1,280 (136 ) 1,144 Finished goods 8,941 (1,155 ) 7,786 Total $ 19,577 $ (2,570 ) $ 17,007 As of March 31, 2016 Raw materials and components $ 10,556 $ (1,052 ) $ 9,504 Work in process 2,045 (119 ) 1,926 Finished goods 6,550 (956 ) 5,594 Total $ 19,151 $ (2,127 ) $ 17,024 Costs associated with the procurement and warehousing of inventories, such as inbound freight charges and purchasing and receiving costs, are also included in cost of product revenue. Deferred Contract Costs Deferred contract costs consist primarily of the costs of products delivered, and services performed, that are subject to additional performance obligations or customer acceptance. These deferred contract costs are expensed at the time the related revenue is recognized. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of prepaid insurance premiums, prepaid license fees, purchase deposits, advance payments to contractors, unbilled revenue, prepaid taxes and miscellaneous receivables. Prepaid expenses and other current assets include the following (dollars in thousands): September 30, 2016 March 31, 2016 Unbilled accounts receivable $ 524 $ 4,307 Other prepaid expenses 663 731 Total $ 1,187 $ 5,038 Property and Equipment Property and equipment are stated at cost. Expenditures for additions and improvements are capitalized, while replacements, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed as incurred. Properties sold, or otherwise disposed of, are removed from the property accounts, with gains or losses on disposal credited or charged to income from operations. Orion periodically reviews the carrying values of property and equipment for impairment in accordance with ASC 360, Property, Plant and Equipment , if events or changes in circumstances indicate that the assets may be impaired. The estimated future undiscounted cash flows expected to result from the use of the assets and their eventual disposition are compared to the assets' carrying amount to determine if a write down to market value is required. On June 30, 2016, Orion completed the sale of its Manitowoc manufacturing and distribution facility to Tramontina U.S. Cookware, Inc. ("Tramontina") for gross cash proceeds of $2,600,000 , which approximated the assets' net carrying values. In conjunction with the sale, Orion entered into an agreement with Tramontina to leaseback approximately 197,000 square feet of the building for not less than three years , subject to mutual options to reduce the amount of leased space. Property and equipment were comprised of the following (dollars in thousands): September 30, 2016 March 31, 2016 Land and land improvements $ 425 $ 421 Buildings and building improvements 9,245 11,849 Furniture, fixtures and office equipment 6,997 7,233 Leasehold improvements 162 148 Equipment leased to customers 4,997 4,997 Plant equipment 11,322 10,805 Construction in progress 152 128 33,300 35,581 Less: accumulated depreciation and amortization (19,251 ) (18,577 ) Property and equipment, net $ 14,049 $ 17,004 Equipment included above under capital leases was as follows (in thousands): September 30, 2016 March 31, 2016 Equipment $ 581 $ 408 Less: accumulated depreciation and amortization (131 ) (65 ) Net Equipment $ 450 $ 343 Depreciation is provided over the estimated useful lives of the respective assets, using the straight-line method. Orion recorded depreciation expense of $366,000 and $755,000 for the three and six months ended September 30, 2016, respectively, and $766,000 and $1,561,000 for the three and six months ended September 30, 2015, respectively. Depreciable lives by asset category are as follows: Land improvements 10-15 years Buildings and building improvements 3-39 years Furniture, fixtures and office equipment 2-10 years Leasehold improvements Shorter of asset life or life of lease Equipment leased to customers under Power Purchase Agreements 20 years Plant equipment 3-10 years Other Intangible Assets The costs of specifically identifiable intangible assets that do not have an indefinite life are amortized over their estimated useful lives. Intangible assets with indefinite lives are not amortized and are reviewed for impairment annually, as of January 1, or more frequently if impairment indicators arise. Amortizable intangible assets are amortized over their estimated economic useful life to reflect the pattern of economic benefits consumed based upon the following lives and methods: Patents 10-17 years Straight-line Licenses 7-13 years Straight-line Customer relationships 5-8 years Accelerated based upon the pattern of economic benefits consumed Developed technology 8 years Accelerated based upon the pattern of economic benefits consumed Non-competition agreements 5 years Straight-line Indefinite lived intangible assets are evaluated for potential impairment whenever events or circumstances indicate that the carrying value may not be recoverable based primarily upon whether expected future undiscounted cash flows are sufficient to support the asset recovery. If the actual useful life of the asset is shorter than the estimated life estimated by us, the asset may be deemed to be impaired and accordingly a write-down of the value of the asset determined by a discounted cash flow analysis or shorter amortization period may be required. The components of, and changes in, the carrying amount of other intangible assets were as follows (dollars in thousands): September 30, 2016 March 31, 2016 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Patents $ 2,581 $ (1,135 ) $ 1,446 $ 2,377 $ (1,053 ) $ 1,324 Licenses 58 (58 ) — 58 (58 ) — Trade name and trademarks 1,965 — 1,965 1,956 — 1,956 Customer relationships 3,600 (2,821 ) 779 3,600 (2,512 ) 1,088 Developed technology 900 (346 ) 554 900 (265 ) 635 Non-competition agreements 100 (65 ) 35 100 (55 ) 45 Total $ 9,204 $ (4,425 ) $ 4,779 $ 8,991 $ (3,943 ) $ 5,048 Amortization expense on intangible assets was $239,000 and $353,000 for the three months ended September 30, 2016 and 2015, respectively. Amortization expense on intangible assets was $482,000 and $704,000 for the six months ended September 30, 2016 and 2015, respectively. As of September 30, 2016 , the weighted average useful life of intangible assets was 6.18 years. The estimated amortization expense for each of the next five years is shown below (dollars in thousands): Fiscal 2017 $ 415 Fiscal 2018 616 Fiscal 2019 440 Fiscal 2020 354 Fiscal 2021 280 Fiscal 2022 162 Thereafter 547 Total $ 2,814 Other Long-Term Assets Other long-term assets include the following (dollars in thousands): September 30, 2016 March 31, 2016 Deferred financing costs $ 37 $ 92 Security deposits 116 87 Other 15 6 Total $ 168 $ 185 Deferred financing costs relate to Orion’s revolving credit agreement and are recognized to interest expense straight-line over the remaining term of the credit agreement. Accrued Expenses and Other Accrued expenses and other include the following (dollars in thousands): September 30, 2016 March 31, 2016 Compensation and benefits $ 1,741 $ 1,794 Sales tax 240 913 Contract costs 485 586 Legal and professional fees (1) 2,086 2,348 Warranty 804 554 Other accruals 385 391 Total $ 5,741 $ 6,586 (1) Includes a $1,400 loss contingency recorded in fiscal 2016. Orion generally offers a limited warranty of one to ten years on its lighting products in addition to those standard warranties offered by major original equipment component manufacturers. The manufacturers’ warranties cover lamps and ballasts, which are significant components in Orion's lighting products. Changes in the Orion’s warranty accrual (both current and long-term) were as follows (dollars in thousands): Three Months Ended September 30, Six Months Ended September 30, 2016 2015 2016 2015 Beginning of period (1) $ 1,038 $ 1,062 $ 864 $ 1,015 Provision to product cost of revenue 77 60 251 89 Charges (1 ) (79 ) (1 ) (61 ) End of period (1) $ 1,114 $ 1,043 $ 1,114 $ 1,043 (1) Includes a $310 reserve related to solar operating system warranties. Revenue Recognition Revenue is recognized on the sales of Orion's lighting and related energy-efficiency systems and products when the following four criteria are met: 1. persuasive evidence of an arrangement exists; 2. delivery has occurred and title has passed to the customer; 3. the sales price is fixed and determinable and no further obligation exists; and 4. collectability is reasonably assured. These four criteria are met for Orion’s product-only revenue upon delivery of the product and title passing to the customer. At that time, Orion provides for estimated costs that may be incurred for product warranties and sales returns. Revenues are presented net of sales tax and other sales related taxes. For sales of Orion’s lighting and energy management technologies under multiple element arrangements, consisting of a combination of product sales and services, Orion determines revenue by allocating the total contract revenue to each element based on their relative selling prices in accordance with ASC 605-25, Revenue Recognition - Multiple Element Arrangements . In such circumstances, Orion uses a hierarchy to determine the selling price to be used for allocating revenue to deliverables: (1) vendor-specific objective evidence (VSOE) of fair value, if available, (2) third-party evidence (TPE) of selling price if VSOE is not available, and (3) best estimate of the selling price if neither VSOE nor TPE is available (a description as to how Orion determines estimated selling price is provided below). The nature of Orion’s multiple element arrangements for the sale of its lighting and energy management technologies is similar to a construction project, with materials being delivered and contracting and project management activities occurring according to an installation schedule. The significant deliverables include the shipment of products and related transfer of title and the installation. To determine the selling price in multiple-element arrangements, Orion establishes the selling price for its energy management system products using management's best estimate of the selling price, as VSOE or TPE does not exist. Product revenue is recognized when products are shipped. For product revenue, management's best estimate of selling price is determined using a cost plus gross profit margin method. In addition, Orion records in service revenue the selling price for its installation and recycling services using management’s best estimate of selling price, as VSOE or TPE does not exist. Service revenue is recognized when services are completed and customer acceptance has been received. Recycling services provided in connection with installation entail the disposal of the customer’s legacy lighting fixtures. Orion’s service revenues, other than for installation and recycling that are completed prior to delivery of the product, are included in product revenue using management’s best estimate of selling price, as VSOE or TPE does not exist. These services include comprehensive site assessment, site field verification, utility incentive and government subsidy management, engineering design, and project management. For these services, along with Orion's installation and recycling services, under a multiple-element arrangement, management’s best estimate of selling price is determined by considering economic conditions and trends, customer demand, pricing practices, margin objectives, competition, geographies in which Orion offers its products and services and internal costs. The determination of an estimated selling price is made through consultation with and approval by management, taking into account the preceding factors. Orion offers a financing program, called an Orion Throughput Agreement, or OTA, for a customer’s lease of Orion’s energy management systems. The OTA is structured as a sales-type lease and upon successful installation of the system and customer acknowledgment that the system is operating as specified, revenue is recognized at Orion’s net investment in the lease, which typically is the net present value of the future cash flows. Orion offers a financing program, called a power purchase agreement, or PPA, for Orion’s renewable energy product offerings. A PPA is a supply side agreement for the generation of electricity and subsequent sale to the end user. Upon the customer’s acknowledgment that the system is operating as specified, product revenue is recognized on a monthly basis over the life of the PPA contract, which is typically in excess of 10 years. Deferred revenue relates to advance customer billings, investment tax grants received related to PPAs and a separate obligation to provide maintenance on OTAs and is classified as a liability on the Condensed Consolidated Balance Sheet. The fair value of the maintenance is readily determinable based upon pricing from third-party vendors. Deferred revenue related to maintenance services is recognized when the services are delivered, which occurs in excess of a year after the original OTA contract is executed. Net Loss per Common Share Basic net loss per common share is computed by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding for the period and does not consider common stock equivalents. For the three and six months ended September 30, 2016 and 2015, Orion was in a net loss position; therefore, the basic and diluted weighted average shares outstanding are equal because any increase to the basic shares would be anti-dilutive. The effect of net loss per common share is calculated based upon the following: Three Months Ended September 30, Six Months Ended September 30, 2016 2015 2016 2015 Numerator: Net loss (in thousands) $ (970 ) $ (3,600 ) $ (3,910 ) $ (7,252 ) Denominator: Weighted-average common shares outstanding 28,171,899 27,598,492 28,029,526 27,540,378 Weighted-average common shares and common share equivalents outstanding 28,171,899 27,598,492 28,029,526 27,540,378 Net loss per common share: Basic $ (0.03 ) $ (0.13 ) $ (0.14 ) $ (0.26 ) Diluted $ (0.03 ) $ (0.13 ) $ (0.14 ) $ (0.26 ) The following table indicates the number of potentially dilutive securities excluded from the calculation of dilution because their inclusion would have been anit-dilutive. Amounts are as of the end of each period: September 30, 2016 September 30, 2015 Common stock options 1,942,446 2,283,836 Restricted shares 1,723,920 1,053,865 Total 3,666,366 3,337,701 Concentration of Credit Risk and Other Risks and Uncertainties Orion's cash is deposited with two financial institutions. At times, deposits in these institutions exceed the amount of insurance provided on such deposits. Orion has not experienced any losses in such accounts and believes that it is not exposed to any significant risk on these balances. Orion purchases components necessary for its lighting products, including ballasts, lamps and LED components, from multiple suppliers. For the three and six months ended September 30, 2016 and 2015, no supplier accounted for more than 10% of total cost of revenue. For the three and six months ended September 30, 2016 and 2015, no customer accounted for more than 10% of revenue. As of September 30, 2016 , one customer accounted for more than 10% of accounts receivable. As of March 31, 2016, one customer accounted for more than 10% of accounts receivable. Recent Accounting Pronouncements Issued: Not Yet Adopted In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-15, "Classification of Certain Cash Receipts and Cash Payments," which provides clarification and additional guidance as to the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. Under this guidance, an entity will no longer have discretion to choose the classification for a number of transactions including contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. The new standard will be effective for Orion in the first quarter of fiscal 2019 and will be applied through retrospective adjustment to all periods presented. Orion does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting," which changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as the classification of related matters in the statement of cash flows. The ASU is effective for Orion in the first quarter of Orion's fiscal 2018. Management is currently assessing the impact of adoption on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Subtopic 842)." This ASU requires that lessees recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and disclose additional quantitative and qualitative information about leasing arrangements. This ASU also provides clarifications surrounding the presentation of the effects of leases in the income statement and statement of cash flows. This guidance will be effective for Orion on April 1, 2019. Management is currently assessing the impact of adoption on its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” to simplify the presentation of deferred taxes. The amendments in this update require that deferred tax assets and liabilities be classified as non-current on the balance sheet. This ASU is effective for Orion's annual reporting period, and interim periods therein, beginning on April 1, 2017 with earlier adoption permitted. The guidance may be adopted either prospectively or retrospectively. Orion does not expect adoption of this standard will have a significant impact on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which changes the measurement principle for inventory from the lower of cost or market to the lower of cost or net realizable value for entities that measure inventory using first-in, first-out (FIFO) or average cost. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective for Orion on April 1, 2017. Orion is currently assessing the impact of this standard on its consolidated financial statements. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, "Presentation of Financial Statements - Going Concern" ("ASU 2014-15"). ASU 2014-15 requires an entity's management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern and if those conditions exist, the required disclosures. The standard is effective for annual periods ending after December 15, 2016, and interim periods therein. Orion does not expect adoption of this standard will have a significant impact on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. Since the issuance of this ASU the FASB has issued further ASU’s to provide additional guidance and clarification as to the application of ASU 2014-09 and delaying its original effective date. These ASU’s are effective for Orion beginning on April 1, 2018 (as amended by ASU 2015-14) and early adoption is not permitted. Companies may use either a full retrospective or modified retrospective approach to adopt this ASU. Orion is currently evaluating the impact and method of adoption of ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-11 and ASU 2016-12. Recently Adopted Standards As of April 1, 2016. Orion adopted the provisions of ASU 2015-03 “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” and the related ASU 2015-15 “Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements- Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update).” This guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a reduction of the carrying amount of that debt liability, consistent with debt discounts, with the exception of debt issuance costs associated with line of credit agreements which may remain classified as an asset and amortized ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. As Orion’s only deferred debt issuance costs relate to its revolving line of credit, upon adoption of these standards a reclassification of the deferred financing costs was not required and there was no impact on Orion’s condensed consolidated financial statements. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS During the three months ended September 30, 2016 and 2015 , Orion purchased goods and services in the amount of approximately $25,000 and $0 , respectively, from an entity for which a director of Orion is a minority owner and serves as president and chairman of the board of directors and from an immediate family member of a named executive officer. During the six months ended September 30, 2016 and 2015 , Orion purchased goods and services in the amount of approximately $32,000 and $6,000 , respectively, from an entity for which a director of Orion is a minority owner and serves as president and chairman of the board of directors and from an immediate family member of a named executive officer. . |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following (in thousands): September 30, 2016 March 31, 2016 Revolving credit facility $ 4,860 $ 3,719 Harris seller's note — 546 Equipment lease obligations 425 345 Customer equipment finance notes payable 13 90 Other long-term debt 41 67 Total long-term debt 5,339 4,767 Less current maturities (242 ) (746 ) Long-term debt, less current maturities $ 5,097 $ 4,021 Revolving Credit Agreement On February 6, 2015, Orion entered into a credit and security agreement (Credit Agreement) with Wells Fargo Bank, National Association. The Credit Agreement provides for a revolving credit facility (Credit Facility) that matures on February 6, 2018. Borrowings under the Credit Facility are initially limited to $15,000,000 subject to a borrowing base requirement based on eligible receivables and inventory. Such limit may increase to $20,000,000 , subject to the borrowing base requirement, after July 31, 2016, if the Company satisfies certain conditions. The Credit Facility includes a $2,000,000 sublimit for the issuance of letters of credit. From and after any increase in the Credit Facility limit from $15,000,000 to $20,000,000 , the Credit Agreement will require Orion to maintain, as of the end of each month, a minimum ratio for the trailing twelve-month period of (i) earnings before interest, taxes, depreciation and amortization, subject to certain adjustments, to (ii) the sum of cash interest expense, certain principal payments on indebtedness and certain dividends, distributions and stock redemptions, equal to at least 1.10 to 1.00. The Credit Agreement also contains other customary covenants, including certain restrictions on Orion’s ability to incur additional indebtedness, consolidate or merge, enter into acquisitions, guarantee obligations of third parties, make loans or advances, declare or pay any dividend or distribution on Orion’s stock, redeem or repurchase shares of Orion’s stock, or pledge or dispose of assets. As of July 31, 2016, Orion has not satisfied the conditions necessary to increase the borrowing limit to $20,000,000 . Each subsidiary of Orion is a joint and several co-borrower or guarantor under the Credit Agreement, and the Credit Agreement is secured by a security interest in substantially all of Orion’s and each subsidiary’s personal property (excluding various assets relating to customer OTAs) and a mortgage on certain real property. Borrowings under the Credit Agreement bear interest at the daily three-month LIBOR plus 3.0% per annum, with a minimum interest charge for each year or portion of a year during the term of the Credit Agreement of $130,000 , regardless of usage. As of September 30, 2016, the interest rate was 3.85% . Orion must pay an unused line fee of 0.25% per annum of the daily average unused amount of the Credit Facility and a letter of credit fee at the rate of 3.0% per annum on the undrawn amount of letters of credit outstanding from time to time under the Credit Facility. As of September 30, 2016, Orion had no outstanding letters of credit. Borrowings outstanding as of September 30, 2016, amounted to approximately $4,860,000 and are included in non-current liabilities in the accompanying Condensed Consolidated Balance Sheet. Orion estimates that as of September 30, 2016, it was eligible to borrow an additional $533,000 under the Credit Facility based upon current levels of eligible inventory and accounts receivable. Orion was in compliance with its covenants in the Credit Agreement as of September 30, 2016. Harris Seller's Note On July 1, 2013, Orion issued an unsecured and subordinated promissory note in the principal amount of $3,124,000 to partially fund the acquisition of Harris. The note is included in the table above as Harris seller's note. The note's interest rate was 4% per annum. Principal and interest were payable quarterly. The note matured in July 2016 and was paid in full upon maturity. Equipment Lease Obligation In March 2016 and June 2015, Orion entered into two lease agreements with a financing company in the principal amount of $19,000 and $377,000 , respectively, to fund certain equipment. The leases are secured by the related equipment. The leases bear interest at a rate of 5.94% and 3.6% , respectively, and mature in February 2018 and June 2020. Both leases contain a one dollar buyout option. Customer Equipment Finance Notes Payable In December 2014, Orion entered into a secured borrowing agreement with a financing company in the principal amount of $446,000 to fund completed customer contracts under its OTA finance program that were previously funded under the OTA credit agreement with a major bank, which was terminated in November 2014. This note is included in the table above as customer equipment finance notes payable. The loan amount is secured by the OTA-related equipment and the expected future monthly payments under the supporting 25 individual OTA customer contracts. The borrowing agreement bears interest at a rate of 8.36% and matures in December 2016. In June 2011, Orion entered into a note agreement with a financial institution that provided Orion with $2,831,000 to fund completed customer contracts under Orion’s OTA finance program. This note is included in the table above as customer equipment finance notes payable in the prior year. The note bore interest at 7.85% . The note matured in April 2016 and was paid in full upon maturity. Other Long-Term Debt In September 2010, Orion entered into a note agreement with the Wisconsin Department of Commerce that provided Orion with $260,000 to fund Orion’s rooftop solar project at its Manitowoc facility. This note is included in the table above as other long-term debt. The note is collateralized by the related solar equipment. The note allowed for two years without interest accruing or principal payments due. Beginning in July 2012, the note bears interest at 2% and requires monthly payments of $4,600 . The note matures in June 2017. The note agreement requires Orion to maintain a certain number of jobs at its Manitowoc facilities during the note’s duration. Orion was in compliance with all covenants in the note agreement as of September 30, 2016. |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax provision for the three months ended September 30, 2016 was determined by applying an estimated annual effective tax rate of (1.0)% to loss before taxes. The estimated effective tax rate for the three month period ended September 30, 2015 was (0.1)% . The estimated effective income tax rate was determined by applying statutory tax rates to pretax loss adjusted for certain permanent book to tax differences and tax credits. The income tax provision for the six months ended September 30, 2016 was determined by applying an estimated annual effective tax rate of (0.5)% to loss before taxes. Orion had discrete tax items in the first quarter of fiscal 2017 that increased the rate by 6.8% which resulted in a net rate for the quarter of 6.3% . The discrete tax items related to federal tax refunds and the release of a valuation reserve. The estimated effective tax rate for the six month period ended September 30, 2015 was (0.1)% . Orion is eligible for tax benefits associated with the excess of the tax deduction available for exercises of non-qualified stock options (NQSOs) over the amount recorded at grant. The amount of the benefit is based upon the ultimate deduction reflected in the applicable income tax return. As of September 30, 2016 , Orion has federal net operating loss carryforwards of approximately $58,747,000 , of which $3,247,000 are associated with the exercise of NQSOs that have not yet been recognized by Orion in its financial statements. Orion also has state net operating loss carryforwards of approximately $46,330,000 , of which $3,727,000 are associated with the exercise of NQSOs. Orion also has federal tax credit carryforwards of approximately $1,403,000 and state tax credits of $724,000 . Orion's net operating loss and tax credit carryforwards will begin to expire in varying amounts between 2020 and 2036. As of September 30, 2016 , Orion has recorded a valuation allowance of $26,960,000 equaling the net deferred tax asset due to the uncertainty of its realization value in the future. Orion considers future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance. In the event that Orion determines that the deferred tax assets are able to be realized, an adjustment to the deferred tax asset would increase income in the period such determination is made. Uncertain Tax Positions As of September 30, 2016 , the balance of gross unrecognized tax benefits was approximately $113,000 , all of which would reduce Orion’s effective tax rate if recognized. Orion has classified the amounts recorded for uncertain tax benefits in the balance sheet as other liabilities (non-current) to the extent that payment is not anticipated within one year. Orion recognizes penalties and interest related to uncertain tax liabilities in income tax expense. Penalties and interest are immaterial and are included in the unrecognized tax benefits. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases Orion leases office space and equipment under operating leases expiring at various dates through 2020. Rent expense under operating leases was $220,000 and $135,000 for the three months ended September 30, 2016 and 2015 , respectively, and $322,000 and $246,000 for the six months ended September 30, 2016 and 2015 , respectively. On March 1, 2016, Orion entered into a lease agreement as a lessor for excess office space at its corporate headquarters in Manitowoc, WI. The initial term of the lease is 24 months and the tenant has the option to extend the term for up to three additional twelve -month periods. The monthly rental payment Orion receives is $21,000 and is included in general and administrative expenses. On March 31, 2016, Orion entered into a purchase and sale agreement ("Agreement") with Tramontina to sell and leaseback its manufacturing and distribution facility for a gross cash purchase price of approximately $2,600,000 . The transaction closed on June 30, 2016. Pursuant to the Agreement, a lease was entered into on June 30, 2016, in which Orion is leasing approximately 197,000 square feet of the building for not less than three years , with rent at $2.00 per square foot per annum. Orion's monthly payment under this lease is approximately $40,000 . The lease contains options by either party to reduce the amount of leased space after March 1, 2017. Litigation Orion is subject to various claims and legal proceedings arising in the ordinary course of business. As of the date of this report, Orion is unable to currently assess whether the final resolution of any of such claims or legal proceedings may have a material adverse effect on Orion. In addition to ordinary-course litigation, Orion is a party to the proceedings described below. On March 27, 2014, Orion was named as a defendant in a civil lawsuit filed by Neal R. Verfuerth, Orion's former chief executive officer who was terminated for cause in November 2012, in the United States District Court for the Eastern District of Wisconsin (Green Bay Division). The plaintiff alleges, among other things, that Orion breached certain agreements entered into with the plaintiff, including the plaintiff’s employment agreement, and violated certain laws. The complaint seeks, among other relief, unspecified pecuniary and compensatory damages, fees and such other relief as the court may deem just and proper. On November 4, 2014, the court granted Orion's motion to dismiss six of the plaintiff's claims. On January 9, 2015, the plaintiff filed an amended complaint re-alleging claims that were dismissed by the court, including, among other things, a retaliation claim and certain claims with respect to prior management agreements and certain intellectual property rights. On January 22, 2015, Orion filed a motion to dismiss and a motion to strike certain of the claims made in the amended complaint. On May 18, 2015, the court dismissed the intellectual property claims re-alleged in the January 9, 2015 amended complaint. At the court's direction, the parties attempted to mediate the matter in May 2016, but were unsuccessful in resolving the matter. On August 25, 2016, the Chief Judge of the United States District Court for the Eastern District of Wisconsin (Green Bay Division) dismissed all claims against Orion brought by the plaintiff, including his claims that Orion had allegedly breached the plaintiff’s employment agreement and had allegedly violated the plaintiff's whistleblower rights. On September 22, 2016, the plaintiff filed an appeal to the United States Court of Appeals challenging the judgment rendered on August 25, 2016. Orion intends to continue to defend against the claims vigorously. Orion believes that it has substantial legal and factual defenses to the claims and allegations remaining in the case and that Orion will prevail in this proceeding. Based upon the current status of the lawsuit, Orion does not believe that it is reasonably possible that the lawsuit will have a material adverse impact on its future continuing results of operations. State Tax Assessment Orion negotiated a settlement with the Wisconsin Department of Revenue with respect to an assessment regarding the proper classification of its products for tax purposes under Wisconsin law. Orion resolved this matter with the Wisconsin Department of Revenue in June 2016 for $460,000 . |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY Employee Stock Purchase Plan In August 2010, Orion’s board of directors approved a non-compensatory employee stock purchase plan, or ESPP. Orion had the following shares issued from treasury during the six months ended September 30, 2016: Shares Issued Under ESPP Closing Market Shares Issued Under Loan Dollar Value of Repayment of Quarter Ended June 30, 2016 1,771 $1.16 — — — Quarter Ended September 30, 2016 1,511 $1.33 — — — Total issued for FY17 3,282 $1.16 - 1.33 — $ — $ — In prior years, Orion issued loans to non-executive employees to purchase shares of its stock. As of September 30, 2016 and March 31, 2016, $4,000 of such loans remained outstanding and are reflected on Orion’s balance sheet as a contra-equity account. |
Stock Options and Restricted Sh
Stock Options and Restricted Shares | 6 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK OPTIONS AND RESTRICTED SHARES | STOCK OPTIONS AND RESTRICTED SHARES At Orion's 2016 Annual Meeting of Shareholders held on August 3, 2016, Orion's shareholders approved the Orion Energy Systems, Inc. 2016 Omnibus Incentive Plan (the "Plan"). The Plan authorizes grants of equity-based and incentive cash awards to eligible participants designated by the Plan's administrator. Awards under the Plan may consist of stock options, stock appreciation rights, performance shares, performance units, shares of Orion's common stock ("Common Stock"), restricted stock, restricted stock units, incentive awards or dividend equivalent units. An aggregate of 1,750,000 shares of Common Stock are reserved for issuance under the Plan. Prior to shareholder approval of the Plan, the Company maintained the 2004 Stock and Incentive Awards Plan, as amended, which authorized the grant of cash and equity awards to employees (the “Existing Plan”). The Existing Plan terminated on August 3, 2016 as a result of shareholder approval of the Plan, ending the authority to grant new awards under the Existing Equity Plan. However, all awards granted under the Existing Plan that were outstanding as of August 3, 2016 will continue to be governed by the Existing Plan. Certain non-employee directors have elected to receive stock awards in lieu of cash compensation pursuant to elections made under Orion’s non-employee director compensation program. The plans also provide to certain employees accelerated vesting in the event of certain changes of control of Orion as well as under other special circumstances. Orion has historically granted stock options and restricted stock under its 2003 Stock Option and 2004 Stock and Incentive Awards Plans. Orion has not issued stock options since fiscal 2014 and instead has issued restricted stock. Orion accounts for stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation. Under the fair value recognition provisions of ASC 718, stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense ratably over the requisite service period, net of estimated forfeitures. Orion did not issue any stock options during the three and six months ended September 30, 2016 or during fiscal 2016 or 2015. For the three months ended September 30, 2016 , an aggregate of 332,955 restricted shares were granted valued at a price per share of between $1.35 and $1.42 , which was the closing market price as of each grant date. For the three months ended September 30, 2015, an aggregate of 84,000 restricted shares were granted valued at a price per share of between $2.15 and $2.51 , which was the closing market price as of each grant date. For the six months ended September 30, 2016 an aggregate of 1,047,142 restricted shares were granted valued at a price per share of between $1.35 and $1.50 , which was the closing market price as of each grant date. For the six months ended September 30, 2015, an aggregate of 569,534 restricted shares were granted valued at a price per share of between $2.15 and $2.62 , which was the closing market price as of each grant date. On June 7, 2016, Orion issued and sold 57,065 shares of its common stock to an executive. On August 5, 2016, Orion sold an aggregate of 63,381 shares of its common stock, in equal amounts, to three recently retired members of Orion's board of directors. In each case, the purchase price for the shares was calculated based on the closing price of Orion's common stock on the NASDAQ Capital Market of the date of the issuance. The shares of common stock were offered and sold pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended. The following amounts of stock-based compensation were recorded (in thousands): Three Months Ended September 30, Six Months Ended September 30, 2016 2015 2016 2015 Cost of product revenue $ 9 $ 10 $ 23 $ 20 General and administrative 485 294 752 576 Sales and marketing 21 57 52 136 Research and development 24 (8 ) 41 6 Total $ 539 $ 353 $ 868 $ 738 The following table summarizes information with respect to the Plans: Outstanding Awards Shares Number Weighted Weighted Aggregate Balance at March 31, 2016 787,686 2,017,046 $ 3.32 4.54 Shares reserved under new plan 1,750,000 — Granted stock options — — — Granted shares (39,293 ) — — Restricted shares (1,047,142 ) — — Forfeited restricted shares 87,500 — — Forfeited stock options 74,600 (74,600 ) 4.85 Exercised — — — Balance at September 30, 2016 1,613,351 1,942,446 $ 3.26 3.49 $ 0.00 Exercisable at September 30, 2016 1,782,846 $ 3.34 3.43 $ 0.00 The aggregate intrinsic value represents the total pre-tax intrinsic value, which is calculated as the difference between the exercise price of the underlying stock options and the fair value of Orion’s closing common stock price of $1.33 as of September 30, 2016 . A summary of the status of Orion’s outstanding non-vested stock options as of September 30, 2016 was as follows: Non-vested at March 31, 2016 205,900 Granted — Vested (44,300 ) Forfeited (2,000 ) Non-vested at September 30, 2016 159,600 As of September 30, 2016 , compensation cost related to non-vested common stock-based compensation, excluding restricted share awards, amounted to $200,000 over a remaining weighted average expected term of 1.06 years. During the first half of fiscal 2017 , Orion granted restricted shares as follows (which are included in the above stock plan activity tables): Balance at March 31, 2016 1,053,389 Shares issued 1,047,142 Shares vested (289,111 ) Shares forfeited (87,500 ) Shares outstanding at September 30, 2016 1,723,920 Per share price on grant date $1.34 - $6.80 As of September 30, 2016 , the weighted average grant-date fair value of restricted shares granted was $1.39 . As of September 30, 2016 , the amount of deferred stock-based compensation expense related to grants of restricted shares, to be recognized over a remaining period of 2.37 years, was approximately $2,500,000 . |
Segments
Segments | 6 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTS Orion has the following business segments: Orion U.S. Markets Division ("USM"), Orion Engineered Services Division ("OES") and Orion Distribution Services Division ("ODS"). The accounting policies are the same for each business segment as they are on a consolidated basis. The descriptions of Orion’s segments and their summary financial information are presented below. Orion U.S. Markets Division ("USM") The USM segment sells commercial lighting systems and energy management systems to the wholesale contractor markets. USM customers include domestic energy service companies, or ESCOs, and electrical contractors. During fiscal 2017, sales from this division are in the process of being redirected to ODS. Orion Engineered Systems Division ("OES") The OES segment develops and sells lighting products and provides construction and engineering services for Orion's commercial LED and High Intensity Fluorescent ("HIF") lighting and energy management systems. OES provides turnkey solutions for large national accounts, governments, municipalities and schools. Orion Distribution Services Division ("ODS") The ODS segment focuses on selling lighting products through manufacturer representative agencies and a network of broadline North American distributors. Corporate and Other Corporate and Other is comprised of operating expenses not directly allocated to Orion’s segments and adjustments to reconcile to consolidated results, which primarily include intercompany eliminations. Revenues Operating Income (Loss) For the Three Months Ended September 30, For the Three Months Ended September 30, 2016 2015 2016 2015 (dollars in thousands) Segments: Orion U.S. Markets $ 5,192 $ 9,872 $ 263 $ (866 ) Orion Engineered Systems 6,975 5,774 (116 ) (1,152 ) Orion Distribution Services 6,503 82 441 (94 ) Corporate and Other — — (1,584 ) (1,454 ) $ 18,670 $ 15,728 $ (996 ) $ (3,566 ) Revenues Operating Income (Loss) For the Six Months Ended September 30, For the Six Months Ended September 30, 2016 2015 2016 2015 (dollars in thousands) Segments: U.S. Markets $ 11,094 $ 21,506 $ 191 $ (828 ) Engineered Systems 13,774 10,604 (796 ) (2,818 ) Distribution Services 9,436 206 (361 ) (159 ) Corporate and Other — — (3,281 ) (3,365 ) $ 34,304 $ 32,316 $ (4,247 ) $ (7,170 ) |
Subsequent Events
Subsequent Events | 6 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transaction that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Nonrecognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. Management has reviewed events occurring through the date the financial statements were issued and noted no subsequent event requiring accrual or disclosure. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Orion Energy Systems, Inc. and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. |
Reclassifications | Reclassifications Where appropriate, certain reclassifications have been made to prior years’ financial statements to conform to the current year presentation. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Orion have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results that may be expected for the year ending March 31, 2017 or other interim periods. The condensed consolidated balance sheet at March 31, 2016 has been derived from the audited and adjusted consolidated financial statements at that date but does not include all of the information required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in Orion’s Annual Report on Form 10-K for the fiscal year ended March 31, 2016 filed with the Securities and Exchange Commission on June 23, 2016 . |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during that reporting period. Areas that require the use of significant management estimates include revenue recognition, inventory obsolescence and allowance for doubtful accounts, accruals for warranty and loss contingencies, income taxes and certain equity transactions. Accordingly, actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Orion considers all highly liquid, short-term investments with original maturities of three months or less to be cash equivalents. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Orion’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other, revolving credit facility and long-term debt. The carrying amounts of Orion’s financial instruments approximate their respective fair values due to the relatively short-term nature of these instruments, or in the case of long-term debt and revolving credit facility, because of the interest rates currently available to Orion for similar obligations. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. GAAP describes a fair value hierarchy based on the following three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: Level 1 — Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 — Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly. Level 3 — Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management's best estimate of what market participants would use in valuing the asset or liability at the measurement date. |
Accounts Receivable | Accounts Receivable Orion’s accounts receivable are due from companies in the commercial, industrial and agricultural industries, as well as wholesalers. Credit is extended based on an evaluation of a customer’s financial condition. Generally, collateral is not required for end users; however, the payment of certain trade accounts receivable from wholesalers is secured by irrevocable standby letters of credit and/or guarantees. Accounts receivable are generally due within 30 - 60 days. Accounts receivable are stated at the amount Orion expects to collect from outstanding balances. Orion provides for probable uncollectible amounts through a charge to earnings and a credit to an allowance for doubtful accounts based on its assessment of the current status of individual accounts. Balances that are still outstanding after Orion has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to accounts receivable. |
Financing Receivables | Financing Receivables Orion considers its lease balances included in consolidated current and long-term accounts receivable from its Orion Throughput Agreement, or OTA, sales-type leases to be financing receivables. |
Inventories | Inventories Inventories consist of raw materials and components, such as drivers, metal sheet and coil stock and molded parts; work in process inventories, such as frames and reflectors; and finished goods, including completed fixtures and systems, and accessories. All inventories are stated at the lower of cost or market value with cost determined using the first-in, first-out (FIFO) method. Orion reduces the carrying value of its inventories for differences between the cost and estimated net realizable value, taking into consideration usage in the preceding 9 to 24 months, expected demand, and other information indicating obsolescence. Orion records, as a charge to cost of product revenue, the amount required to reduce the carrying value of inventory to net realizable value. |
Deferred Contract Costs | Deferred Contract Costs Deferred contract costs consist primarily of the costs of products delivered, and services performed, that are subject to additional performance obligations or customer acceptance. These deferred contract costs are expensed at the time the related revenue is recognized. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of prepaid insurance premiums, prepaid license fees, purchase deposits, advance payments to contractors, unbilled revenue, prepaid taxes and miscellaneous receivables. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Expenditures for additions and improvements are capitalized, while replacements, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed as incurred. Properties sold, or otherwise disposed of, are removed from the property accounts, with gains or losses on disposal credited or charged to income from operations. Orion periodically reviews the carrying values of property and equipment for impairment in accordance with ASC 360, Property, Plant and Equipment , if events or changes in circumstances indicate that the assets may be impaired. The estimated future undiscounted cash flows expected to result from the use of the assets and their eventual disposition are compared to the assets' carrying amount to determine if a write down to market value is required. |
Other Intangible Assets | Other Intangible Assets The costs of specifically identifiable intangible assets that do not have an indefinite life are amortized over their estimated useful lives. Intangible assets with indefinite lives are not amortized and are reviewed for impairment annually, as of January 1, or more frequently if impairment indicators arise. Amortizable intangible assets are amortized over their estimated economic useful life to reflect the pattern of economic benefits consumed based upon the following lives and methods: Patents 10-17 years Straight-line Licenses 7-13 years Straight-line Customer relationships 5-8 years Accelerated based upon the pattern of economic benefits consumed Developed technology 8 years Accelerated based upon the pattern of economic benefits consumed Non-competition agreements 5 years Straight-line Indefinite lived intangible assets are evaluated for potential impairment whenever events or circumstances indicate that the carrying value may not be recoverable based primarily upon whether expected future undiscounted cash flows are sufficient to support the asset recovery. If the actual useful life of the asset is shorter than the estimated life estimated by us, the asset may be deemed to be impaired and accordingly a write-down of the value of the asset determined by a discounted cash flow analysis or shorter amortization period may be required. |
Other Long-Term Assets | Deferred financing costs relate to Orion’s revolving credit agreement and are recognized to interest expense straight-line over the remaining term of the credit agreement. |
Accrued Expenses and Other | Orion generally offers a limited warranty of one to ten years on its lighting products in addition to those standard warranties offered by major original equipment component manufacturers. The manufacturers’ warranties cover lamps and ballasts, which are significant components in Orion's lighting products. |
Revenue Recognition | Revenue Recognition Revenue is recognized on the sales of Orion's lighting and related energy-efficiency systems and products when the following four criteria are met: 1. persuasive evidence of an arrangement exists; 2. delivery has occurred and title has passed to the customer; 3. the sales price is fixed and determinable and no further obligation exists; and 4. collectability is reasonably assured. These four criteria are met for Orion’s product-only revenue upon delivery of the product and title passing to the customer. At that time, Orion provides for estimated costs that may be incurred for product warranties and sales returns. Revenues are presented net of sales tax and other sales related taxes. For sales of Orion’s lighting and energy management technologies under multiple element arrangements, consisting of a combination of product sales and services, Orion determines revenue by allocating the total contract revenue to each element based on their relative selling prices in accordance with ASC 605-25, Revenue Recognition - Multiple Element Arrangements . In such circumstances, Orion uses a hierarchy to determine the selling price to be used for allocating revenue to deliverables: (1) vendor-specific objective evidence (VSOE) of fair value, if available, (2) third-party evidence (TPE) of selling price if VSOE is not available, and (3) best estimate of the selling price if neither VSOE nor TPE is available (a description as to how Orion determines estimated selling price is provided below). The nature of Orion’s multiple element arrangements for the sale of its lighting and energy management technologies is similar to a construction project, with materials being delivered and contracting and project management activities occurring according to an installation schedule. The significant deliverables include the shipment of products and related transfer of title and the installation. To determine the selling price in multiple-element arrangements, Orion establishes the selling price for its energy management system products using management's best estimate of the selling price, as VSOE or TPE does not exist. Product revenue is recognized when products are shipped. For product revenue, management's best estimate of selling price is determined using a cost plus gross profit margin method. In addition, Orion records in service revenue the selling price for its installation and recycling services using management’s best estimate of selling price, as VSOE or TPE does not exist. Service revenue is recognized when services are completed and customer acceptance has been received. Recycling services provided in connection with installation entail the disposal of the customer’s legacy lighting fixtures. Orion’s service revenues, other than for installation and recycling that are completed prior to delivery of the product, are included in product revenue using management’s best estimate of selling price, as VSOE or TPE does not exist. These services include comprehensive site assessment, site field verification, utility incentive and government subsidy management, engineering design, and project management. For these services, along with Orion's installation and recycling services, under a multiple-element arrangement, management’s best estimate of selling price is determined by considering economic conditions and trends, customer demand, pricing practices, margin objectives, competition, geographies in which Orion offers its products and services and internal costs. The determination of an estimated selling price is made through consultation with and approval by management, taking into account the preceding factors. Orion offers a financing program, called an Orion Throughput Agreement, or OTA, for a customer’s lease of Orion’s energy management systems. The OTA is structured as a sales-type lease and upon successful installation of the system and customer acknowledgment that the system is operating as specified, revenue is recognized at Orion’s net investment in the lease, which typically is the net present value of the future cash flows. Orion offers a financing program, called a power purchase agreement, or PPA, for Orion’s renewable energy product offerings. A PPA is a supply side agreement for the generation of electricity and subsequent sale to the end user. Upon the customer’s acknowledgment that the system is operating as specified, product revenue is recognized on a monthly basis over the life of the PPA contract, which is typically in excess of 10 years. Deferred revenue relates to advance customer billings, investment tax grants received related to PPAs and a separate obligation to provide maintenance on OTAs and is classified as a liability on the Condensed Consolidated Balance Sheet. The fair value of the maintenance is readily determinable based upon pricing from third-party vendors. Deferred revenue related to maintenance services is recognized when the services are delivered, which occurs in excess of a year after the original OTA contract is executed. |
Net Loss per Common Share | Net Loss per Common Share Basic net loss per common share is computed by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding for the period and does not consider common stock equivalents. |
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties Orion's cash is deposited with two financial institutions. At times, deposits in these institutions exceed the amount of insurance provided on such deposits. Orion has not experienced any losses in such accounts and believes that it is not exposed to any significant risk on these balances. Orion purchases components necessary for its lighting products, including ballasts, lamps and LED components, from multiple suppliers. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Issued: Not Yet Adopted In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-15, "Classification of Certain Cash Receipts and Cash Payments," which provides clarification and additional guidance as to the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. Under this guidance, an entity will no longer have discretion to choose the classification for a number of transactions including contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. The new standard will be effective for Orion in the first quarter of fiscal 2019 and will be applied through retrospective adjustment to all periods presented. Orion does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting," which changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as the classification of related matters in the statement of cash flows. The ASU is effective for Orion in the first quarter of Orion's fiscal 2018. Management is currently assessing the impact of adoption on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Subtopic 842)." This ASU requires that lessees recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and disclose additional quantitative and qualitative information about leasing arrangements. This ASU also provides clarifications surrounding the presentation of the effects of leases in the income statement and statement of cash flows. This guidance will be effective for Orion on April 1, 2019. Management is currently assessing the impact of adoption on its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” to simplify the presentation of deferred taxes. The amendments in this update require that deferred tax assets and liabilities be classified as non-current on the balance sheet. This ASU is effective for Orion's annual reporting period, and interim periods therein, beginning on April 1, 2017 with earlier adoption permitted. The guidance may be adopted either prospectively or retrospectively. Orion does not expect adoption of this standard will have a significant impact on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which changes the measurement principle for inventory from the lower of cost or market to the lower of cost or net realizable value for entities that measure inventory using first-in, first-out (FIFO) or average cost. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective for Orion on April 1, 2017. Orion is currently assessing the impact of this standard on its consolidated financial statements. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, "Presentation of Financial Statements - Going Concern" ("ASU 2014-15"). ASU 2014-15 requires an entity's management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern and if those conditions exist, the required disclosures. The standard is effective for annual periods ending after December 15, 2016, and interim periods therein. Orion does not expect adoption of this standard will have a significant impact on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. Since the issuance of this ASU the FASB has issued further ASU’s to provide additional guidance and clarification as to the application of ASU 2014-09 and delaying its original effective date. These ASU’s are effective for Orion beginning on April 1, 2018 (as amended by ASU 2015-14) and early adoption is not permitted. Companies may use either a full retrospective or modified retrospective approach to adopt this ASU. Orion is currently evaluating the impact and method of adoption of ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-11 and ASU 2016-12. Recently Adopted Standards As of April 1, 2016. Orion adopted the provisions of ASU 2015-03 “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” and the related ASU 2015-15 “Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements- Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update).” This guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a reduction of the carrying amount of that debt liability, consistent with debt discounts, with the exception of debt issuance costs associated with line of credit agreements which may remain classified as an asset and amortized ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. As Orion’s only deferred debt issuance costs relate to its revolving line of credit, upon adoption of these standards a reclassification of the deferred financing costs was not required and there was no impact on Orion’s condensed consolidated financial statements. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of accounts receivable | Orion's accounts receivable and allowance for doubtful accounts balances were as follows (dollars in thousands): September 30, 2016 March 31, 2016 Accounts receivable, gross $ 12,400 $ 11,394 Allowance for doubtful accounts (164 ) (505 ) Accounts receivable, net $ 12,236 $ 10,889 |
Schedule of financing receivables | Additional disclosures on the credit quality of Orion’s financing receivables are as follows: Aging Analysis as of September 30, 2016 (dollars in thousands): Not Past Due 1-90 days Greater than 90 Total past due Total sales-type Lease balances included in consolidated accounts receivable—current $ 119 $ 1 $ 3 $ 4 $ 123 Lease balances included in consolidated accounts receivable—long-term 13 — — — 13 Total gross sales-type leases 132 1 3 4 136 Allowance — — — — — Total net sales-type leases $ 132 $ 1 $ 3 $ 4 $ 136 Aging Analysis as of March 31, 2016 (dollars in thousands): Not Past Due 1-90 days Greater than 90 Total past due Total sales-type Lease balances included in consolidated accounts receivable—current $ 294 $ 4 $ 10 $ 14 $ 308 Lease balances included in consolidated accounts receivable—long-term 101 — — — 101 Total gross sales-type leases 395 4 10 14 409 Allowance — — (9 ) (9 ) (9 ) Total net sales-type leases $ 395 $ 4 $ 1 $ 5 $ 400 |
Inventories | Orion's inventory balances were as follows (dollars in thousands): Cost Obsolescence Reserve Net As of September 30, 2016 Raw materials and components $ 9,356 $ (1,279 ) $ 8,077 Work in process 1,280 (136 ) 1,144 Finished goods 8,941 (1,155 ) 7,786 Total $ 19,577 $ (2,570 ) $ 17,007 As of March 31, 2016 Raw materials and components $ 10,556 $ (1,052 ) $ 9,504 Work in process 2,045 (119 ) 1,926 Finished goods 6,550 (956 ) 5,594 Total $ 19,151 $ (2,127 ) $ 17,024 |
Prepaid expenses and other current assets | Prepaid expenses and other current assets include the following (dollars in thousands): September 30, 2016 March 31, 2016 Unbilled accounts receivable $ 524 $ 4,307 Other prepaid expenses 663 731 Total $ 1,187 $ 5,038 |
Property and equipment | Property and equipment were comprised of the following (dollars in thousands): September 30, 2016 March 31, 2016 Land and land improvements $ 425 $ 421 Buildings and building improvements 9,245 11,849 Furniture, fixtures and office equipment 6,997 7,233 Leasehold improvements 162 148 Equipment leased to customers 4,997 4,997 Plant equipment 11,322 10,805 Construction in progress 152 128 33,300 35,581 Less: accumulated depreciation and amortization (19,251 ) (18,577 ) Property and equipment, net $ 14,049 $ 17,004 Depreciable lives by asset category are as follows: Land improvements 10-15 years Buildings and building improvements 3-39 years Furniture, fixtures and office equipment 2-10 years Leasehold improvements Shorter of asset life or life of lease Equipment leased to customers under Power Purchase Agreements 20 years Plant equipment 3-10 years |
Schedule of equipment under capital leases | Equipment included above under capital leases was as follows (in thousands): September 30, 2016 March 31, 2016 Equipment $ 581 $ 408 Less: accumulated depreciation and amortization (131 ) (65 ) Net Equipment $ 450 $ 343 |
Schedule of intangible assets | The components of, and changes in, the carrying amount of other intangible assets were as follows (dollars in thousands): September 30, 2016 March 31, 2016 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Patents $ 2,581 $ (1,135 ) $ 1,446 $ 2,377 $ (1,053 ) $ 1,324 Licenses 58 (58 ) — 58 (58 ) — Trade name and trademarks 1,965 — 1,965 1,956 — 1,956 Customer relationships 3,600 (2,821 ) 779 3,600 (2,512 ) 1,088 Developed technology 900 (346 ) 554 900 (265 ) 635 Non-competition agreements 100 (65 ) 35 100 (55 ) 45 Total $ 9,204 $ (4,425 ) $ 4,779 $ 8,991 $ (3,943 ) $ 5,048 The estimated amortization expense for each of the next five years is shown below (dollars in thousands): Fiscal 2017 $ 415 Fiscal 2018 616 Fiscal 2019 440 Fiscal 2020 354 Fiscal 2021 280 Fiscal 2022 162 Thereafter 547 Total $ 2,814 Amortizable intangible assets are amortized over their estimated economic useful life to reflect the pattern of economic benefits consumed based upon the following lives and methods: Patents 10-17 years Straight-line Licenses 7-13 years Straight-line Customer relationships 5-8 years Accelerated based upon the pattern of economic benefits consumed Developed technology 8 years Accelerated based upon the pattern of economic benefits consumed Non-competition agreements 5 years Straight-line |
Schedule of other long-term assets | Other long-term assets include the following (dollars in thousands): September 30, 2016 March 31, 2016 Deferred financing costs $ 37 $ 92 Security deposits 116 87 Other 15 6 Total $ 168 $ 185 |
Schedule of accrued expenses and other | Accrued expenses and other include the following (dollars in thousands): September 30, 2016 March 31, 2016 Compensation and benefits $ 1,741 $ 1,794 Sales tax 240 913 Contract costs 485 586 Legal and professional fees (1) 2,086 2,348 Warranty 804 554 Other accruals 385 391 Total $ 5,741 $ 6,586 (1) Includes a $1,400 loss contingency recorded in fiscal 2016. |
Changes in warranty accrual | Changes in the Orion’s warranty accrual (both current and long-term) were as follows (dollars in thousands): Three Months Ended September 30, Six Months Ended September 30, 2016 2015 2016 2015 Beginning of period (1) $ 1,038 $ 1,062 $ 864 $ 1,015 Provision to product cost of revenue 77 60 251 89 Charges (1 ) (79 ) (1 ) (61 ) End of period (1) $ 1,114 $ 1,043 $ 1,114 $ 1,043 (1) Includes a $310 reserve related to solar operating system warranties. |
Summary of the effect of net income per common share | The effect of net loss per common share is calculated based upon the following: Three Months Ended September 30, Six Months Ended September 30, 2016 2015 2016 2015 Numerator: Net loss (in thousands) $ (970 ) $ (3,600 ) $ (3,910 ) $ (7,252 ) Denominator: Weighted-average common shares outstanding 28,171,899 27,598,492 28,029,526 27,540,378 Weighted-average common shares and common share equivalents outstanding 28,171,899 27,598,492 28,029,526 27,540,378 Net loss per common share: Basic $ (0.03 ) $ (0.13 ) $ (0.14 ) $ (0.26 ) Diluted $ (0.03 ) $ (0.13 ) $ (0.14 ) $ (0.26 ) |
Number of potentially dilutive securities | The following table indicates the number of potentially dilutive securities excluded from the calculation of dilution because their inclusion would have been anit-dilutive. Amounts are as of the end of each period: September 30, 2016 September 30, 2015 Common stock options 1,942,446 2,283,836 Restricted shares 1,723,920 1,053,865 Total 3,666,366 3,337,701 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt consisted of the following (in thousands): September 30, 2016 March 31, 2016 Revolving credit facility $ 4,860 $ 3,719 Harris seller's note — 546 Equipment lease obligations 425 345 Customer equipment finance notes payable 13 90 Other long-term debt 41 67 Total long-term debt 5,339 4,767 Less current maturities (242 ) (746 ) Long-term debt, less current maturities $ 5,097 $ 4,021 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Employee stock purchase plan activity | In August 2010, Orion’s board of directors approved a non-compensatory employee stock purchase plan, or ESPP. Orion had the following shares issued from treasury during the six months ended September 30, 2016: Shares Issued Under ESPP Closing Market Shares Issued Under Loan Dollar Value of Repayment of Quarter Ended June 30, 2016 1,771 $1.16 — — — Quarter Ended September 30, 2016 1,511 $1.33 — — — Total issued for FY17 3,282 $1.16 - 1.33 — $ — $ — |
Stock Options and Restricted 20
Stock Options and Restricted Shares (Tables) | 6 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation | The following amounts of stock-based compensation were recorded (in thousands): Three Months Ended September 30, Six Months Ended September 30, 2016 2015 2016 2015 Cost of product revenue $ 9 $ 10 $ 23 $ 20 General and administrative 485 294 752 576 Sales and marketing 21 57 52 136 Research and development 24 (8 ) 41 6 Total $ 539 $ 353 $ 868 $ 738 |
Summary of share based payment awards | The following table summarizes information with respect to the Plans: Outstanding Awards Shares Number Weighted Weighted Aggregate Balance at March 31, 2016 787,686 2,017,046 $ 3.32 4.54 Shares reserved under new plan 1,750,000 — Granted stock options — — — Granted shares (39,293 ) — — Restricted shares (1,047,142 ) — — Forfeited restricted shares 87,500 — — Forfeited stock options 74,600 (74,600 ) 4.85 Exercised — — — Balance at September 30, 2016 1,613,351 1,942,446 $ 3.26 3.49 $ 0.00 Exercisable at September 30, 2016 1,782,846 $ 3.34 3.43 $ 0.00 |
Summary of outstanding non-vested stock options | A summary of the status of Orion’s outstanding non-vested stock options as of September 30, 2016 was as follows: Non-vested at March 31, 2016 205,900 Granted — Vested (44,300 ) Forfeited (2,000 ) Non-vested at September 30, 2016 159,600 |
Summary of restricted shares granted | During the first half of fiscal 2017 , Orion granted restricted shares as follows (which are included in the above stock plan activity tables): Balance at March 31, 2016 1,053,389 Shares issued 1,047,142 Shares vested (289,111 ) Shares forfeited (87,500 ) Shares outstanding at September 30, 2016 1,723,920 Per share price on grant date $1.34 - $6.80 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment reporting information | Revenues Operating Income (Loss) For the Three Months Ended September 30, For the Three Months Ended September 30, 2016 2015 2016 2015 (dollars in thousands) Segments: Orion U.S. Markets $ 5,192 $ 9,872 $ 263 $ (866 ) Orion Engineered Systems 6,975 5,774 (116 ) (1,152 ) Orion Distribution Services 6,503 82 441 (94 ) Corporate and Other — — (1,584 ) (1,454 ) $ 18,670 $ 15,728 $ (996 ) $ (3,566 ) Revenues Operating Income (Loss) For the Six Months Ended September 30, For the Six Months Ended September 30, 2016 2015 2016 2015 (dollars in thousands) Segments: U.S. Markets $ 11,094 $ 21,506 $ 191 $ (828 ) Engineered Systems 13,774 10,604 (796 ) (2,818 ) Distribution Services 9,436 206 (361 ) (159 ) Corporate and Other — — (3,281 ) (3,365 ) $ 34,304 $ 32,316 $ (4,247 ) $ (7,170 ) |
Summary of Significant Accoun22
Summary of Significant Accounting Policies - Narrative (Details) ft² in Thousands, $ in Thousands | Jun. 30, 2016USD ($)ft² | Mar. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) |
Segment Reporting Information [Line Items] | ||||||
Accounts receivable are due, minimum period (days) | 30 days | |||||
Accounts receivable are due, maximum period (days) | 60 days | |||||
Depreciation | $ 366 | $ 766 | $ 755 | $ 1,561 | ||
Amortization | $ 239 | $ 353 | $ 482 | $ 704 | ||
Intangible assets, estimated economic useful life (years) | 6 years 2 months 5 days | |||||
Power purchase agreement product revenue is recognized term (years) | 10 years | |||||
Minimum | ||||||
Segment Reporting Information [Line Items] | ||||||
Length of time of inventory usage considered for inventory reserve (months) | 9 months | |||||
Minimum | High Intensity Fluorescent Lighting Products | ||||||
Segment Reporting Information [Line Items] | ||||||
Limited warranty term (years) | 1 year | |||||
Maximum | ||||||
Segment Reporting Information [Line Items] | ||||||
Length of time of inventory usage considered for inventory reserve (months) | 24 months | |||||
Maximum | High Intensity Fluorescent Lighting Products | ||||||
Segment Reporting Information [Line Items] | ||||||
Limited warranty term (years) | 10 years | |||||
Agreement with Tramontina U.S. Cookware, Inc. | ||||||
Segment Reporting Information [Line Items] | ||||||
Cash purchase price of sale leaseback | $ 2,600 | $ 2,600 | ||||
Area of leased building (sqft) | ft² | 197 | |||||
Building lease term | 3 years |
Summary of Significant Accoun23
Summary of Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Accounting Policies [Abstract] | ||
Accounts receivable, gross | $ 12,400 | $ 11,394 |
Allowance for doubtful accounts | (164) | (505) |
Total net sales-type leases | $ 12,236 | $ 10,889 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Financing Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Credit quality of the Company's financing receivables using Aging Analysis | ||
Total gross sales-type leases | $ 12,400 | $ 11,394 |
Allowance | (164) | (505) |
Total net sales-type leases | 12,236 | 10,889 |
Not Past Due | ||
Credit quality of the Company's financing receivables using Aging Analysis | ||
Lease balances included in consolidated accounts receivable—current | 119 | 294 |
Lease balances included in consolidated accounts receivable—long-term | 13 | 101 |
Total gross sales-type leases | 132 | 395 |
Allowance | 0 | 0 |
Total net sales-type leases | 132 | 395 |
1-90 days past due | ||
Credit quality of the Company's financing receivables using Aging Analysis | ||
Lease balances included in consolidated accounts receivable—current | 1 | 4 |
Lease balances included in consolidated accounts receivable—long-term | 0 | 0 |
Total gross sales-type leases | 1 | 4 |
Allowance | 0 | 0 |
Total net sales-type leases | 1 | 4 |
Greater than 90 days past due | ||
Credit quality of the Company's financing receivables using Aging Analysis | ||
Lease balances included in consolidated accounts receivable—current | 3 | 10 |
Lease balances included in consolidated accounts receivable—long-term | 0 | 0 |
Total gross sales-type leases | 3 | 10 |
Allowance | 0 | (9) |
Total net sales-type leases | 3 | 1 |
Total past due | ||
Credit quality of the Company's financing receivables using Aging Analysis | ||
Lease balances included in consolidated accounts receivable—current | 4 | 14 |
Lease balances included in consolidated accounts receivable—long-term | 0 | 0 |
Total gross sales-type leases | 4 | 14 |
Allowance | 0 | (9) |
Total net sales-type leases | 4 | 5 |
Total sales-type leases | ||
Credit quality of the Company's financing receivables using Aging Analysis | ||
Lease balances included in consolidated accounts receivable—current | 123 | 308 |
Lease balances included in consolidated accounts receivable—long-term | 13 | 101 |
Total gross sales-type leases | 136 | 409 |
Allowance | 0 | (9) |
Total net sales-type leases | $ 136 | $ 400 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Inventories | ||
Raw material and components, cost | $ 9,356 | $ 10,556 |
Raw material and components, obsolescence reserve | (1,279) | (1,052) |
Raw material and components, net | 8,077 | 9,504 |
Work in process, cost | 1,280 | 2,045 |
Work in process, obsolescence reserve | (136) | (119) |
Work in process, net | 1,144 | 1,926 |
Finished goods, cost | 8,941 | 6,550 |
Finished goods, obsolescence reserve | (1,155) | (956) |
Finished goods, net | 7,786 | 5,594 |
Cost | 19,577 | 19,151 |
Obsolescence reserve | (2,570) | (2,127) |
Net | $ 17,007 | $ 17,024 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Accounting Policies [Abstract] | ||
Unbilled accounts receivable | $ 524 | $ 4,307 |
Other prepaid expenses | 663 | 731 |
Total | $ 1,187 | $ 5,038 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Prop Plant and Equip (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Property and equipment | ||
Equipment | $ 33,300 | $ 35,581 |
Less: accumulated depreciation and amortization | (19,251) | (18,577) |
Property and equipment, net | 14,049 | 17,004 |
Land and land improvements | ||
Property and equipment | ||
Equipment | 425 | 421 |
Buildings and building improvements | ||
Property and equipment | ||
Equipment | 9,245 | 11,849 |
Furniture, fixtures and office equipment | ||
Property and equipment | ||
Equipment | 6,997 | 7,233 |
Leasehold improvements | ||
Property and equipment | ||
Equipment | 162 | 148 |
Equipment leased to customers | ||
Property and equipment | ||
Equipment | 4,997 | 4,997 |
Plant equipment | ||
Property and equipment | ||
Equipment | 11,322 | 10,805 |
Construction in progress | ||
Property and equipment | ||
Equipment | $ 152 | $ 128 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Equipment Under Capital Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Equipment | $ 33,300 | $ 35,581 |
Less: accumulated depreciation and amortization | (19,251) | (18,577) |
Property and equipment, net | 14,049 | 17,004 |
Assets Held under Capital Leases | ||
Property, Plant and Equipment [Line Items] | ||
Equipment | 581 | 408 |
Less: accumulated depreciation and amortization | (131) | (65) |
Property and equipment, net | $ 450 | $ 343 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - PPE Useful Lives (Details) | 6 Months Ended |
Sep. 30, 2016 | |
Land and land improvements | Minimum | |
Depreciation using the straight-line method | |
Property, plant and equipment, useful life (years) | 10 years |
Land and land improvements | Maximum | |
Depreciation using the straight-line method | |
Property, plant and equipment, useful life (years) | 15 years |
Buildings and building improvements | Minimum | |
Depreciation using the straight-line method | |
Property, plant and equipment, useful life (years) | 3 years |
Buildings and building improvements | Maximum | |
Depreciation using the straight-line method | |
Property, plant and equipment, useful life (years) | 39 years |
Furniture, fixtures and office equipment | Minimum | |
Depreciation using the straight-line method | |
Property, plant and equipment, useful life (years) | 2 years |
Furniture, fixtures and office equipment | Maximum | |
Depreciation using the straight-line method | |
Property, plant and equipment, useful life (years) | 10 years |
Leasehold improvements | |
Depreciation using the straight-line method | |
Property, plant and equipment estimated useful life | Shorter of asset life or life of lease |
Equipment leased to customers under Power Purchase Agreements | |
Depreciation using the straight-line method | |
Property, plant and equipment, useful life (years) | 20 years |
Plant equipment | Minimum | |
Depreciation using the straight-line method | |
Property, plant and equipment, useful life (years) | 3 years |
Plant equipment | Maximum | |
Depreciation using the straight-line method | |
Property, plant and equipment, useful life (years) | 10 years |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Other Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2016 | Mar. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated economic useful life (years) | 6 years 2 months 5 days | |
Gross Carrying Amount | $ 9,204 | $ 8,991 |
Accumulated Amortization | (4,425) | (3,943) |
Net | 4,779 | 5,048 |
Finite-Lived Intangible Assets, Estimated Amortization Expense | ||
Fiscal 2,017 | 415 | |
Fiscal 2,018 | 616 | |
Fiscal 2,019 | 440 | |
Fiscal 2,020 | 354 | |
Fiscal 2,021 | 280 | |
Fiscal 2,022 | 162 | |
Thereafter | 547 | |
Total | 2,814 | |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,581 | 2,377 |
Accumulated Amortization | (1,135) | (1,053) |
Net | 1,446 | 1,324 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 58 | 58 |
Accumulated Amortization | (58) | (58) |
Net | 0 | 0 |
Trade name and trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,965 | 1,956 |
Accumulated Amortization | 0 | 0 |
Net | 1,965 | 1,956 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,600 | 3,600 |
Accumulated Amortization | (2,821) | (2,512) |
Net | $ 779 | 1,088 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated economic useful life (years) | 8 years | |
Gross Carrying Amount | $ 900 | 900 |
Accumulated Amortization | (346) | (265) |
Net | $ 554 | 635 |
Non-competition agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated economic useful life (years) | 5 years | |
Gross Carrying Amount | $ 100 | 100 |
Accumulated Amortization | (65) | (55) |
Net | $ 35 | $ 45 |
Minimum | Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated economic useful life (years) | 10 years | |
Minimum | Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated economic useful life (years) | 7 years | |
Minimum | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated economic useful life (years) | 5 years | |
Maximum | Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated economic useful life (years) | 17 years | |
Maximum | Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated economic useful life (years) | 13 years | |
Maximum | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated economic useful life (years) | 8 years |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Other Long Term Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Accounting Policies [Abstract] | ||
Deferred financing costs | $ 37 | $ 92 |
Security deposits | 116 | 87 |
Other | 15 | 6 |
Total | $ 168 | $ 185 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Accrued Expenses and Other (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Accounting Policies [Abstract] | ||
Compensation and benefits | $ 1,741 | $ 1,794 |
Sales tax | 240 | 913 |
Contract costs | 485 | 586 |
Legal and professional fees | 2,086 | 2,348 |
Warranty | 804 | 554 |
Other accruals | 385 | 391 |
Total | $ 5,741 | 6,586 |
Loss contingency | $ 1,400 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Warranty Accrual (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning of period | $ 1,038 | $ 1,062 | $ 864 | $ 1,015 |
Provision to product cost of revenue | 77 | 60 | 251 | 89 |
Charges | (1) | (79) | (1) | (61) |
End of period | 1,114 | 1,043 | 1,114 | 1,043 |
Product warranty accrual | 1,038 | 1,062 | 864 | 1,015 |
Orion Engineered Systems | ||||
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
End of period | 310 | 310 | 310 | 310 |
Product warranty accrual | $ 310 | $ 310 | $ 310 | $ 310 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator: | ||||
Net loss | $ (970) | $ (3,600) | $ (3,910) | $ (7,252) |
Denominator: | ||||
Weighted-average common shares outstanding (in shares) | 28,171,899 | 27,598,492 | 28,029,526 | 27,540,378 |
Weighted-average common shares and common share equivalents outstanding (in shares) | 28,171,899 | 27,598,492 | 28,029,526 | 27,540,378 |
Net income (loss) per common share: | ||||
Basic net loss per common share (in dollars per share) | $ (0.03) | $ (0.13) | $ (0.14) | $ (0.26) |
Diluted net loss per common share (in dollars per share) | $ (0.03) | $ (0.13) | $ (0.14) | $ (0.26) |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Dilutive Securities (Details) - shares | 6 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Number of potentially dilutive securities | ||
Potentially dilutive securities outstanding (shares) | 3,666,366 | 3,337,701 |
Common stock options | ||
Number of potentially dilutive securities | ||
Potentially dilutive securities outstanding (shares) | 1,942,446 | 2,283,836 |
Restricted shares | ||
Number of potentially dilutive securities | ||
Potentially dilutive securities outstanding (shares) | 1,723,920 | 1,053,865 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Concentration Risk (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2016customersupplier | Sep. 30, 2015customersupplier | Sep. 30, 2016customersupplierfinancial_instituion | Sep. 30, 2015customersupplier | Mar. 31, 2016customer | |
Concentration Risk [Line Items] | |||||
Number of financial institutions (financial institution) | financial_instituion | 2 | ||||
Cost of Sales | Supplier Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% | |
Concentration risk, number of entities involved in risk calculation | supplier | 0 | 0 | 0 | 0 | |
Sales Revenue, Services, Net | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% | |
Concentration risk, number of entities involved in risk calculation | 0 | 0 | 0 | 0 | |
Accounts Receivable | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | 10.00% | |||
Concentration risk, number of entities involved in risk calculation | 1 | 1 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Entity that Current Director Owns Minority Interest and Serves as Board of Directors Chairman | ||||
Related Party Transaction [Line Items] | ||||
Purchases from related party | $ 25 | $ 0 | $ 32 | $ 6 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Long-term debt | ||
Total long-term debt | $ 5,339 | $ 4,767 |
Less current maturities | (242) | (746) |
Long-term debt, less current maturities | 5,097 | 4,021 |
Revolving credit facility | ||
Long-term debt | ||
Total long-term debt | 4,860 | 3,719 |
Harris seller's note | ||
Long-term debt | ||
Total long-term debt | 0 | 546 |
Equipment lease obligations | ||
Long-term debt | ||
Total long-term debt | 425 | 345 |
Customer equipment finance notes payable | ||
Long-term debt | ||
Total long-term debt | 13 | 90 |
Other long-term debt | ||
Long-term debt | ||
Total long-term debt | $ 41 | $ 67 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | Feb. 06, 2015USD ($) | Jul. 31, 2012USD ($) | Sep. 30, 2010USD ($) | Sep. 30, 2016USD ($) | Mar. 31, 2016USD ($)lease_agreement | Aug. 01, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($)contract | Jul. 01, 2013USD ($) | Jun. 30, 2011USD ($) |
Line of Credit Facility [Line Items] | ||||||||||
Letters of credit outstanding | $ 0 | |||||||||
Revolving credit facility | $ 4,860,000 | $ 3,719,000 | ||||||||
Number of lease agreement (lease agreement) | lease_agreement | 2 | |||||||||
Equipment lease obligations | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Lease interest rate (percent) | 5.94% | 3.60% | ||||||||
Lease agreement, principal amount | $ 19,000 | $ 377,000 | ||||||||
Net equipment lease obligation buyout option | $ 1 | $ 1 | ||||||||
Harris seller's note | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Face amount of debt | $ 3,124,000 | |||||||||
Lease interest rate (percent) | 4.00% | |||||||||
June 2011 OTA Finance Program | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Face amount of debt | $ 2,831,000 | |||||||||
Lease interest rate (percent) | 7.85% | |||||||||
Agreement with Wisconsin Department of Commerce | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Face amount of debt | $ 260,000 | |||||||||
Lease interest rate (percent) | 2.00% | |||||||||
Period of time without interest accruing or principal payments due | 2 years | |||||||||
Periodic payment | $ 4,600 | |||||||||
Credit Agreement | Revolving credit facility | Wells Fargo Bank, National Association | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Credit facility current limit | $ 15,000,000 | |||||||||
Potential maximum borrowing | $ 20,000,000 | |||||||||
Credit facility, minimum indebtedness ratio | 1.10 | |||||||||
Interest payment | $ 130,000 | |||||||||
Interest rate (percent) | 3.85% | |||||||||
Unused commitment fee (percent) | 0.25% | |||||||||
Revolving credit facility | $ 4,860,000 | |||||||||
Credit facility, additional borrowing capacity | $ 533,000 | |||||||||
Credit Agreement | Revolving credit facility | Wells Fargo Bank, National Association | London Interbank Offered Rate (LIBOR) | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Basis spread on variable rate (percent) | 3.00% | |||||||||
Credit Agreement | Letter of Credit | Wells Fargo Bank, National Association | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Credit facility, maximum limit | $ 2,000,000 | |||||||||
Unused commitment fee (percent) | 3.00% | |||||||||
December 2014 OTA Finance Program | De Lage Landen Financial Services, Inc. | Secured Debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Lease interest rate (percent) | 8.36% | |||||||||
Principal amount of secured debt | $ 446,000 | |||||||||
Number of contracts for collateral (contract) | contract | 25 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Taxes (Textual) [Abstract] | ||||
Estimated effective income tax rate | (1.00%) | (0.10%) | (0.50%) | (0.10%) |
Increase in tax rate | 6.80% | |||
Net tax rate | 6.30% | |||
Valuation allowance | $ 26,960 | |||
Unrecognized tax benefits | $ 113 | 113 | ||
Federal | ||||
Income Taxes (Textual) [Abstract] | ||||
Operating loss carryforwards | 58,747 | 58,747 | ||
Exercise of NQSOs | 3,247 | |||
Tax credit carryforwards | 1,403 | 1,403 | ||
State | ||||
Income Taxes (Textual) [Abstract] | ||||
Operating loss carryforwards | 46,330 | 46,330 | ||
Exercise of NQSOs | 3,727 | |||
Tax credit carryforwards | $ 724 | $ 724 |
Commitments and Contingencies (
Commitments and Contingencies (Details) ft² in Thousands | Jun. 30, 2016USD ($)ft² | Mar. 31, 2016USD ($) | Mar. 01, 2016extension_option | Nov. 04, 2014claim | Jun. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) |
Long-term Purchase Commitment [Line Items] | |||||||||
Rent expense under operating leases | $ 220,000 | $ 135,000 | $ 322,000 | $ 246,000 | |||||
Term of operating lease | 24 months | ||||||||
Number of lease term extensions (extension option) | extension_option | 3 | ||||||||
Renewal term of operating lease | 12 months | ||||||||
Number of plaintiff's claims dismissed (claim) | claim | 6 | ||||||||
Amount of settlement | $ 460,000 | ||||||||
Agreement with Tramontina U.S. Cookware, Inc. | |||||||||
Long-term Purchase Commitment [Line Items] | |||||||||
Cash purchase price of sale leaseback | $ 2,600,000 | $ 2,600,000 | |||||||
Area of leased building (sqft) | ft² | 197 | ||||||||
Building lease term | 3 years | ||||||||
Rent expense per square feet | $ 2 | ||||||||
Monthly rental payment | $ 40,000 | ||||||||
General and administrative | |||||||||
Long-term Purchase Commitment [Line Items] | |||||||||
Monthly rental payments receivable | $ 21,000 |
Shareholders' Equity - Shares I
Shareholders' Equity - Shares Issued From Treasury (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2016 | Mar. 31, 2016 | |
Class of Stock [Line Items] | ||||
Shares Issued Under ESPP Plan (shares) | 1,511 | 1,771 | 3,282 | |
Closing Market Price (usd per share) | $ 1.33 | $ 1.16 | ||
Shares Issued Under Loan Program (shares) | 0 | 0 | 0 | |
Dollar Value of Loans Issued | $ 0 | $ 0 | $ 0 | |
Repayment of Loans | 0 | $ 0 | 0 | |
Loans issued to non-executive employees outstanding | $ 4,000 | $ 4,000 | $ 4,000 | |
Minimum | ||||
Class of Stock [Line Items] | ||||
Closing Market Price (usd per share) | $ 1.16 | |||
Maximum | ||||
Class of Stock [Line Items] | ||||
Closing Market Price (usd per share) | $ 1.33 |
Stock Options and Restricted 43
Stock Options and Restricted Shares - Narrative (Details) $ / shares in Units, $ in Millions | Aug. 05, 2016directorshares | Jun. 07, 2016shares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Reserved shares for issuance to key employees (shares) | shares | 1,750,000 | 1,750,000 | ||||
Closing common stock price (usd per share) | $ 1.33 | $ 1.33 | ||||
Compensation cost related to non-vested common stock-based compensation | $ | $ 0.2 | $ 0.2 | ||||
Weighted average expected term | 1 year 23 days | |||||
Common Stock | Executive | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issued and sold (shares) | shares | 57,065 | |||||
Common Stock | Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issued and sold (shares) | shares | 63,381 | |||||
Number of recently retired members of the board of directors (director) | director | 3 | |||||
Restricted shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares of stock based compensation issued during the period (shares) | shares | 332,955 | 84,000 | 1,047,142 | 569,534 | ||
Weighted-average per share price on grant date (usd per share) | $ 1.39 | |||||
Deferred stock-based compensation related to grants of restricted shares, period of recognition | 2 years 4 months 14 days | |||||
Deferred stock-based compensation related to grants of restricted shares | $ | $ 2.5 | |||||
Restricted shares | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Price per share (usd per share) | $ 1.35 | $ 2.15 | $ 1.35 | $ 2.15 | ||
Weighted-average per share price on grant date (usd per share) | 1.34 | |||||
Restricted shares | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Price per share (usd per share) | $ 1.42 | $ 2.51 | 1.50 | $ 2.62 | ||
Weighted-average per share price on grant date (usd per share) | $ 6.80 | |||||
2016 Omnibus Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Reserved shares for issuance to key employees (shares) | shares | 1,750,000 | 1,750,000 |
Stock Options and Restricted 44
Stock Options and Restricted Shares - Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock-based compensation | ||||
Total | $ 539 | $ 353 | $ 868 | $ 738 |
Cost of product revenue | ||||
Stock-based compensation | ||||
Total | 9 | 10 | 23 | 20 |
General and administrative | ||||
Stock-based compensation | ||||
Total | 485 | 294 | 752 | 576 |
Sales and marketing | ||||
Stock-based compensation | ||||
Total | 21 | 57 | 52 | 136 |
Research and development | ||||
Stock-based compensation | ||||
Total | $ 24 | $ (8) | $ 41 | $ 6 |
Stock Options and Restricted 45
Stock Options and Restricted Shares - Summary of Stock Option and Stock Incentive Award Plans (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant [Roll Forward] | ||
Shares Available for Grant, Beginning Balance (shares) | 787,686 | |
Shares Available for Grant, Shares Reserved Under New Plan (share) | 1,750,000 | |
Shares Available for Grant, Granted to Non-Employee (shares) | (39,293) | |
Shares Available for Grant, Ending Balance (shares) | 1,613,351 | 787,686 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Number of Shares, Beginning Balance (shares) | 2,017,046 | |
Number of Shares, Granted (shares) | 0 | |
Number of Shares, Exercised (shares) | 0 | |
Number of Shares, Ending Balance (shares) | 1,942,446 | 2,017,046 |
Number of Shares, Exercisable (shares) | 1,782,846 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted Average Exercise Price, Beginning Balance (in dollars per share) | $ 3.32 | |
Weighted Average Exercise Price, Exercised (in dollars per share) | 0 | |
Weighted Average Exercise Price, Ending Balance (in dollars per share) | 3.26 | $ 3.32 |
Weighted Average Exercise Price, Exercisable Ending Balance (in dollars per share) | $ 3.34 | |
Weighted Average Remaining Contractual Term (in years) | 3 years 5 months 25 days | 4 years 6 months 13 days |
Weighted Average Remaining Contractual Term, Exercisable (in years) | 3 years 5 months 6 days | |
Aggregate Intrinsic Value, Ending Balance (in dollars) | $ 0 | |
Aggregate Intrinsic Value, Exercisable (in dollars) | $ 0 | |
Common stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant [Roll Forward] | ||
Shares Available for Grant, Granted to Employee (shares) | 0 | |
Shares Available for Grant, Forfeited (shares) | 74,600 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Number of Shares, Granted (shares) | 0 | |
Number of Shares, Forfeited (shares) | (74,600) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted Average Exercise Price, Granted Stock Options (in dollars per share) | $ 0 | |
Weighted Average Exercise Price, Forfeited (in dollars per share) | $ 4.85 | |
Restricted shares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant [Roll Forward] | ||
Shares Available for Grant, Granted to Employee (shares) | (1,047,142) | |
Shares Available for Grant, Forfeited (shares) | 87,500 |
Stock Options and Restricted 46
Stock Options and Restricted Shares - Outstanding Non-vested Stock Options (Details) | 6 Months Ended |
Sep. 30, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested at March 31, 2016 (shares) | 205,900 |
Granted (shares) | 0 |
Vested (shares) | (44,300) |
Forfeited (shares) | (2,000) |
Non-vested at September 30, 2016 (shares) | 159,600 |
Stock Options and Restricted 47
Stock Options and Restricted Shares - Restricted Shares (Details) - Restricted shares | 6 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Summary of restricted shares granted to key employees | |
Balance at March 31, 2016 (shares) | 1,053,389 |
Shares issued (shares) | 1,047,142 |
Shares vested (shares) | (289,111) |
Shares forfeited (shares) | (87,500) |
Shares outstanding at September 30, 2016 (shares) | 1,723,920 |
Weighted-average per share price on grant date (usd per share) | $ / shares | $ 1.39 |
Minimum | |
Summary of restricted shares granted to key employees | |
Weighted-average per share price on grant date (usd per share) | $ / shares | 1.34 |
Maximum | |
Summary of restricted shares granted to key employees | |
Weighted-average per share price on grant date (usd per share) | $ / shares | $ 6.80 |
Segments - Revenues and Operati
Segments - Revenues and Operating Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Corporate and Other | ||||
Revenues | $ 18,670 | $ 15,728 | $ 34,304 | $ 32,316 |
Operating Income (Loss) | (996) | (3,566) | (4,247) | (7,170) |
Orion U.S. Markets | ||||
Corporate and Other | ||||
Revenues | 5,192 | 9,872 | 11,094 | 21,506 |
Operating Income (Loss) | 263 | (866) | 191 | (828) |
Orion Engineered Systems | ||||
Corporate and Other | ||||
Revenues | 6,975 | 5,774 | 13,774 | 10,604 |
Operating Income (Loss) | (116) | (1,152) | (796) | (2,818) |
Orion Distribution Services | ||||
Corporate and Other | ||||
Revenues | 6,503 | 82 | 9,436 | 206 |
Operating Income (Loss) | 441 | (94) | (361) | (159) |
Corporate and Other | ||||
Corporate and Other | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Income (Loss) | $ (1,584) | $ (1,454) | $ (3,281) | $ (3,365) |