Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2017 | Jul. 28, 2017 | |
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 | Jun. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 28,763,663 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 8,485 | $ 17,307 |
Accounts receivable, net | 7,040 | 9,171 |
Inventories, net | 12,266 | 13,593 |
Deferred contract costs | 1,704 | 935 |
Prepaid expenses and other current assets | 3,093 | 2,877 |
Total current assets | 32,588 | 43,883 |
Property and equipment, net | 13,638 | 13,786 |
Other intangible assets, net | 4,065 | 4,207 |
Other long-term assets | 118 | 175 |
Total assets | 50,409 | 62,051 |
Liabilities and Shareholders’ Equity | ||
Accounts payable | 9,608 | 11,635 |
Accrued expenses and other | 5,128 | 5,988 |
Deferred revenue, current | 823 | 621 |
Current maturities of long-term debt | 110 | 152 |
Total current liabilities | 15,669 | 18,396 |
Revolving credit facility | 3,853 | 6,629 |
Long-term debt, less current maturities | 164 | 190 |
Deferred revenue, long-term | 945 | 944 |
Other long-term liabilities | 560 | 442 |
Total liabilities | 21,191 | 26,601 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Preferred stock, $0.01 par value: Shares authorized: 30,000,000 at June 30, 2017 and March 31, 2017; no shares issued and outstanding at June 30, 2017 and March 31, 2017 | 0 | 0 |
Common stock, no par value: Shares authorized: 200,000,000 at June 30, 2017 and March 31, 2017; shares issued: 38,161,796 at June 30, 2017 and 37,747,227 at March 31, 2017; shares outstanding: 28,732,979 at June 30, 2017 and 28,317,490 at March 31, 2017 | 0 | 0 |
Additional paid-in capital | 154,230 | 153,901 |
Treasury stock, common shares: 9,428,817 at June 30, 2017 and 9,429,737 at March 31, 2017 | (36,082) | (36,081) |
Shareholder notes receivable | 0 | (4) |
Retained deficit | (88,930) | (82,366) |
Total shareholders’ equity | 29,218 | 35,450 |
Total liabilities and shareholders’ equity | $ 50,409 | $ 62,051 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2017 | Mar. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 38,161,796 | 37,747,227 |
Common stock, shares outstanding (in shares) | 28,732,979 | 28,317,490 |
Treasury stock (in shares) | 9,428,817 | 9,429,737 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||
Product revenue | $ 11,781 | $ 15,352 |
Service revenue | 777 | 282 |
Total revenue | 12,558 | 15,634 |
Cost of product revenue | 8,813 | 11,419 |
Cost of service revenue | 1,034 | 189 |
Total cost of revenue | 9,847 | 11,608 |
Gross profit | 2,711 | 4,026 |
Operating expenses: | ||
General and administrative | 5,335 | 3,901 |
Sales and marketing | 3,354 | 2,895 |
Research and development | 524 | 481 |
Total operating expenses | 9,213 | 7,277 |
Loss from operations | (6,502) | (3,251) |
Other income (expense): | ||
Other income | 0 | 100 |
Interest expense | (67) | (70) |
Interest income | 5 | 10 |
Total other (expense) income | (62) | 40 |
Loss before income tax | (6,564) | (3,211) |
Income tax benefit | 0 | (271) |
Net loss | $ (6,564) | $ (2,940) |
Basic net loss per share attributable to common shareholders (in dollars per share) | $ (0.23) | $ (0.11) |
Weighted-average common shares outstanding (in shares) | 28,455,434 | 27,885,588 |
Diluted net loss per share (in dollars per share) | $ (0.23) | $ (0.11) |
Weighted-average common shares and share equivalents outstanding (in shares) | 28,455,434 | 27,885,588 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating activities | ||
Net loss | $ (6,564) | $ (2,940) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 353 | 389 |
Amortization | 162 | 243 |
Stock-based compensation | 320 | 329 |
Provision for inventory reserves | 130 | 254 |
Provision for bad debts | 33 | (375) |
Other | 12 | 56 |
Changes in operating assets and liabilities: | ||
Accounts receivable, current and long-term | 2,103 | (1,805) |
Inventories | 1,196 | 1,280 |
Deferred contract costs | (770) | (200) |
Prepaid expenses and other assets | (163) | 2,203 |
Accounts payable | (2,028) | (1,516) |
Accrued expenses and other | (743) | (285) |
Deferred revenue, current and long-term | 204 | 52 |
Net cash used in operating activities | (5,755) | (2,315) |
Investing activities | ||
Purchase of property and equipment | (204) | (53) |
Additions to patents and licenses | (20) | 0 |
Proceeds from sales of property, plant and equipment | 0 | 2,600 |
Net cash (used in) provided by investing activities | (224) | 2,547 |
Financing activities | ||
Payment of long-term debt and capital leases | (67) | (381) |
Proceeds from revolving credit facility | 16,307 | 16,658 |
Payment of revolving credit facility | (19,083) | (17,889) |
Payments to settle employee tax withholdings on stock-based compensation | (4) | |
Net proceeds from employee equity exercises | 0 | 2 |
Net cash used in financing activities | (2,843) | (1,614) |
Net decrease in cash and cash equivalents | (8,822) | (1,382) |
Cash and cash equivalents at beginning of period | 17,307 | 15,542 |
Cash and cash equivalents at end of period | $ 8,485 | $ 14,160 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 3 Months Ended |
Jun. 30, 2017 | |
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, and federal and local governments, 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 | 3 Months Ended |
Jun. 30, 2017 | |
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, 2018 or other interim periods. The condensed consolidated balance sheet at March 31, 2017 has been derived from the audited 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, 2017 filed with the Securities and Exchange Commission on June 13, 2017 . 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, allowance for doubtful accounts, accruals for warranty and loss contingencies, income taxes and certain equity transactions. Accordingly, actual results could differ from those estimates. 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 financial institution viability risk on these balances. Orion purchases components necessary for its lighting products, including ballasts, lamps and LED components, from multiple suppliers. For the three months ended June 30, 2017 and 2016, no supplier accounted for more than 10% of total cost of revenue. For the three months ended June 30, 2017, one customer accounted for 16.2% of total revenue. For the three months ended June 30, 2016, no customer accounted for more than 10% of revenue. As of June 30, 2017 , no customer accounted for more than 10% of accounts receivable. As of March 31, 2017, one customer accounted for 11.6% of accounts receivable. Recent Accounting Pronouncements Issued: Not Yet Adopted In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards 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. The ASU provides guidance, as to the classification of 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 February 2016, the FASB issued ASU 2016-02, “Leases (Subtopic 842)." This ASU requires that lessees recognize right-of-use 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. Under this ASU, leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as sales-type, finance or operating leases, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards as well as substantive control have been transferred through the lease contract. This ASU also provides guidance on 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. Early adoption of the standard is permitted and a modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company has not yet completed its review of the full provisions of this standard against its outstanding lease arrangements and is in the process of quantifying the lease liability and related right of use asset which will be recorded to its consolidated balance sheets upon adoption of the standard. In addition, management continues to assess the impact of adoption of this standard on its consolidated statements of operations, cash flows, and the related footnote disclosures. 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. In addition, the ASU requires enhanced and expanded financial statement disclosures. 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. The ASU allows companies to elect either a full retrospective or modified retrospective approach to adoption. Orion will adopt ASU 2014-09 and the related updates with their effective date on April 1, 2018. Orion has begun the process of implementing this standard, including performing a review of its revenue streams to identify any differences in the timing, measurement, or presentation of revenue recognition. The Company continues to review the provisions of these standards against its customer contracts, including evaluating and identifying distinct performance obligations and variable consideration in the form of customer rebates. The Company has selected a representative sample of customer contracts from each of its major revenue streams and is in the process of evaluating these contracts against the standards to determine any impact on the timing and presentation of revenue. In addition, the Company has identified necessary changes in its ongoing process for the review of new customer contracts and the identification of key terms impacting revenue recognition. The Company is also evaluating the necessary changes to its systems, revenue related processes and controls as a result of the new standard, including the related footnote disclosures. Under ASU 2014-09 incremental contract costs, including sales commissions, may be required to be capitalized and expensed over the period these costs are recovered. Although Orion incurs commission costs, its contracts are typically completed within one year. As such, the Company will elect to apply the practical expedient for contract costs recovered within one year and will continue to recognize commissions as cost of sales immediately rather than capitalizing and expensing these costs over the contract period. Orion currently plans to elect the modified retrospective adoption method but continues to evaluate both of the available transition methods. In May 2017, the FASB issued ASU 2017-09, “Compensation-Stock Compensation: Scope of Modification Accounting” which provides guidance about which changes to the terms or conditions of a share-based payment award would require an entity to apply modification accounting. The provisions of this standard are effective for Orion beginning on April 1, 2018. The adoption of this standard is not expected to have a material impact on Orion’s consolidated condensed financial statements. Recently Adopted Standards 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, as of April 1, 2017. The adoption of this standard had no impact on Orion’s condensed 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. Orion adopted this standard as of April 1, 2017. The adoption of this standard had no impact on its condensed consolidated financial statements as the previous measurement and validation of the carrying value of its inventory incorporated market values consistent with the net realizable value measurements of the standard. 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. Orion adopted this ASU as of April 1, 2017. As a result of adopting the income tax accounting provisions of this standard, Orion realized an increase in both its deferred tax assets related to stock-based compensation awards and the related valuation allowance. As the Company carries a full valuation allowance against its deferred tax assets, there was no net impact to its condensed consolidated balance sheets or statements of operations. In accordance with the provisions of this standard, the Company elected to prospectively adopt an accounting policy to recognize forfeitures as they occur in lieu of estimating forfeitures. The cashflow presentation provisions of the standard had no impact on Orion’s condensed consolidated financial statements. Finally, due to the Company’s net loss, the modifications to the calculation of diluted earnings per share as a result of adopting this standard did not impact its diluted earnings per share. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 3 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Orion's accounts receivable and allowance for doubtful accounts balances were as follows (dollars in thousands): June 30, 2017 March 31, 2017 Accounts receivable, gross $ 7,216 $ 9,315 Allowance for doubtful accounts (176 ) (144 ) Accounts receivable, net $ 7,040 $ 9,171 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES As of June 30, 2017 and March 31, 2017 , Orion's inventory balances were as follows (dollars in thousands): Cost Reserve Net As of June 30, 2017 Raw materials and components $ 8,008 $ (1,677 ) $ 6,331 Work in process 1,693 (348 ) 1,345 Finished goods 5,981 (1,391 ) 4,590 Total $ 15,682 $ (3,416 ) $ 12,266 As of March 31, 2017 Raw materials and components $ 8,104 $ (1,807 ) $ 6,297 Work in process 1,918 (329 ) 1,589 Finished goods 7,044 (1,337 ) 5,707 Total $ 17,066 $ (3,473 ) $ 13,593 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3 Months Ended |
Jun. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets include the following (dollars in thousands): June 30, 2017 March 31, 2017 Unbilled accounts receivable $ 2,467 $ 2,226 Other prepaid expenses 626 651 Total $ 3,093 $ 2,877 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment were comprised of the following (dollars in thousands): June 30, 2017 March 31, 2017 Land and land improvements $ 424 $ 424 Buildings and building improvements 9,245 9,245 Furniture, fixtures and office equipment 7,050 7,056 Leasehold improvements 324 324 Equipment leased to customers 4,997 4,997 Plant equipment 11,633 11,627 Construction in progress 224 61 33,897 33,734 Less: accumulated depreciation and amortization (20,259 ) (19,948 ) Property and equipment, net $ 13,638 $ 13,786 During the three months ended June 30, 2017, the Company began pursuing the potential sale and leaseback of its Tech Center building located in Manitowoc, Wisconsin. The Tech Center building houses Orion's corporate offices. Due to the expected leaseback of more than a minor portion of the facility, it does not meet the criteria to be classified as held for sale as of June 30, 2017. As a result of this action, Orion assessed the facility for impairment as of June 30, 2017 by performing a probability weighted cashflow analysis (a Level 3 fair value measure). As a result of this analysis, and based on the assumptions used, including management’s best estimate of the potential sales price, future rent expense, sublease income, and the probability of various scenarios under consideration, the Company concluded that the asset is not impaired as of June 30, 2017. Equipment included above under capital leases was as follows (dollars in thousands): June 30, 2017 March 31, 2017 Equipment $ 581 $ 581 Less: accumulated depreciation and amortization (237 ) (202 ) Equipment, net $ 344 $ 379 Orion recorded depreciation expense of $0.4 million for the three months ended June 30, 2017 and 2016. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANIGBLE ASSETS | INTANGIBLE ASSETS The components of, and changes in, the carrying amount of other intangible assets were as follows (dollars in thousands): June 30, 2017 March 31, 2017 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Patents $ 2,678 $ (1,251 ) $ 1,427 $ 2,658 $ (1,211 ) $ 1,447 Licenses 58 (58 ) — 58 (58 ) — Trade name and trademarks 1,715 — 1,715 1,715 — 1,715 Customer relationships 3,600 (3,131 ) 469 3,600 (3,054 ) 546 Developed technology 900 (466 ) 434 900 (426 ) 474 Non-competition agreements 100 (80 ) 20 100 (75 ) 25 Total $ 9,051 $ (4,986 ) $ 4,065 $ 9,031 $ (4,824 ) $ 4,207 Amortization expense on intangible assets was $0.2 million for the three months ended June 30, 2017 and 2016. As of June 30, 2017 , the weighted average useful life of intangible assets was 5.90 years. The estimated amortization expense for the next five years and beyond is shown below (dollars in thousands): Fiscal 2018 $ 461 Fiscal 2019 447 Fiscal 2020 361 Fiscal 2021 287 Fiscal 2022 190 Fiscal 2023 166 Thereafter 438 Total $ 2,350 |
OTHER LONG-TERM ASSETS
OTHER LONG-TERM ASSETS | 3 Months Ended |
Jun. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER LONG-TERM ASSETS | OTHER LONG-TERM ASSETS Other long-term assets include the following (dollars in thousands): June 30, 2017 March 31, 2017 Security deposits $ 66 $ 117 Other 52 58 Total $ 118 $ 175 |
ACCRUED EXPENSES AND OTHER LONG
ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES | 3 Months Ended |
Jun. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES | ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES Accrued expenses and other include the following (dollars in thousands): June 30, 2017 March 31, 2017 Compensation and benefits $ 1,802 $ 2,431 Sales tax 94 213 Contract costs 248 223 Legal and professional fees 2,116 2,262 Warranty 471 449 Other accruals 397 410 Total $ 5,128 $ 5,988 Other long term liabilities includes the following (dollars in thousands): June 30, 2017 March 31, 2017 Warranty $ 310 $ 310 Medical benefits 137 — Unrecognized tax benefits 113 113 Other — 19 Total $ 560 $ 442 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 Orion’s warranty accrual (both current and long-term) were as follows (dollars in thousands): Three Months Ended June 30, 2017 2016 Beginning of period $ 759 $ 864 Provision to product cost of revenue 24 175 Charges (2 ) (1 ) End of period $ 781 $ 1,038 |
NET LOSS PER COMMON SHARE
NET LOSS PER COMMON SHARE | 3 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
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. For the three months ended June 30, 2017 and 2016, 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. Net loss per common share is calculated based upon the following: Three Months Ended June 30, 2017 2016 Numerator: Net loss (in thousands) $ (6,564 ) $ (2,940 ) Denominator: Weighted-average common shares outstanding 28,455,434 27,885,588 Weighted-average common shares and common share equivalents outstanding 28,455,434 27,885,588 Net loss per common share: Basic $ (0.23 ) $ (0.11 ) Diluted $ (0.23 ) $ (0.11 ) The following table indicates the number of potentially dilutive securities excluded from the calculation of diluted net loss per common share because their inclusion would have been anti-dilutive. The number of shares are as of the end of each period: June 30, 2017 June 30, 2016 Common stock options 1,442,153 1,949,846 Restricted shares 1,706,445 1,482,208 Total 3,148,598 3,432,054 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS During the three months ended June 30, 2017 , Orion did not have any related party transactions. During the three months ended June 30, 2016 , Orion purchased goods and services from an entity in the amount of approximately two thousand dollars, at which time a director of Orion served as a minority owner and as the president and chairman of the board of directors. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following (dollars in thousands): June 30, 2017 March 31, 2017 Revolving credit facility $ 3,853 $ 6,629 Equipment lease obligations 268 321 Customer equipment finance notes payable 6 7 Other long-term debt — 14 Total long-term debt 4,127 6,971 Less current maturities (110 ) (152 ) Long-term debt, less current maturities $ 4,017 $ 6,819 Revolving Credit Agreement Orion has an amended credit agreement ("Credit Agreement") that provides for a revolving credit facility ("Credit Facility") subject to a borrowing base requirement based on eligible receivables and inventory. As of June 30, 2017 Orion's borrowing base was approximately $4.1 million. The Credit Facility has a maturity date of February 6, 2019 and includes a $2.0 million sublimit for the issuance of letters of credit. As of June 30, 2017 , Orion had no outstanding letters of credit. Borrowings outstanding as of June 30, 2017, amounted to approximately $3.9 million and are included in non-current liabilities in the accompanying condensed consolidated balance sheet. Orion estimates that as of June 30, 2017, it was eligible to borrow an additional $0.2 million under the Credit Facility based upon current levels of eligible inventory and accounts receivable. Subject in each case to Orion's applicable borrowing base limitations, the Credit Agreement otherwise provides for a $15.0 million Credit Facility. This limit may increase to $20.0 million based on a borrowing base requirement, if Orion satisfies certain conditions. Orion did not meet the requirements to increase the borrowing limit to $20.0 million as of July 31, 2017, the most recent measurement date. From and after any increase in the Credit Facility limit from $15.0 million to $20.0 million, the Credit Agreement requires that Orion 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 contains additional 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. Orion was in compliance with its covenants in the Credit Agreement as of June 30, 2017 . 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 $0.1 million, regardless of usage. As of June 30, 2017, the interest rate was 4.30% . 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. Harris Seller's Note On July 1, 2013, Orion issued an unsecured and subordinated promissory note in the principal amount of $3.1 million to partially fund the acquisition of Harris Manufacturing, Inc. and Harris LED, LLC (collectively, "Harris"). 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 lease agreements with a financing company in the principal amount of nineteen thousand dollars and $0.4 million, respectively, to fund certain equipment. The leases are secured by the related equipment. The leases bear interest at a rate of 5.9% 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 $0.4 million to fund completed customer contracts under its OTA finance program that were previously funded under a different OTA credit agreement. 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 April 2018. In June 2011, Orion entered into a note agreement with a financial institution that provided Orion with $2.8 million to fund completed customer contracts under Orion’s OTA finance program. 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 $0.3 million 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 four thousand six hundred . The note matured in June 2017 and was paid in full upon maturity. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax provision for the three months ended June 30, 2017 was determined by applying an estimated annual effective tax rate of 0.0% to loss before income tax. The estimated effective tax rate for the three month period ended June 30, 2016 was (0.3)% . 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. 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 June 30, 2017 , Orion had federal net operating loss carryforwards of approximately $75.7 million. Orion also has state net operating loss carryforwards of approximately $65.2 million. Orion also had federal tax credit carryforwards of approximately $1.4 million and state tax credits of $0.7 million. Orion's net operating loss and tax credit carryforwards will begin to expire in varying amounts between 2020 and 2036. As of June 30, 2017 , Orion had recorded a valuation allowance of $34.0 million 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 June 30, 2017 , the balance of gross unrecognized tax benefits was approximately $0.1 million, 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 | 3 Months Ended |
Jun. 30, 2017 | |
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 $0.2 million and $0.1 million for the three months ended June 30, 2017 and 2016 , respectively. On April 28, 2017, Orion renewed the lease for its Jacksonville, Florida office space for an additional three -year term with annual rent expense of approximately $ 0.1 million . On March 31, 2016, Orion entered into a purchase and sale agreement ("Agreement") with a third party to sell and leaseback Orion's manufacturing and distribution facility for a gross cash proceeds of $2.6 million. The transaction closed on June 30, 2016. 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 our future results of operations. 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, a 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 alleged, 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 sought, 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. After the court-mandated mediation was unsuccessful, the plaintiff moved forward with his appeal focusing only on the District Court's dismissal of his whistleblower claims. Orion intends to continue to defend against the claims vigorously. Orion believes 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 $0.5 million. |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 3 Months Ended |
Jun. 30, 2017 | |
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. As of June 30, 2017, Orion issued 2,150 shares under the ESPP plan at a closing market price of $1.28 . In prior years, Orion issued loans to non-executive employees to purchase shares of its stock. The loan program has been discontinued and new loans are no longer issued. As of March 31, 2017, four thousand dollars of such loans remained outstanding and were reflected on Orion’s balance sheet as a contra-equity account. During the quarter ended June 30, 2017, Orion entered into agreements with the counterparties to these loans. In exchange for the forgiveness of their outstanding loan balance, the employees returned their shares to Orion. As a result of this transaction, 1,230 shares were recorded within treasury stock and the loan balances have been eliminated. |
STOCK OPTIONS AND RESTRICTED SH
STOCK OPTIONS AND RESTRICTED SHARES | 3 Months Ended |
Jun. 30, 2017 | |
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. Prior to shareholder approval of the Plan, the Company maintained its 2004 Stock and Incentive Awards Plan, as amended, which authorized the grant of cash and equity awards to employees (the “Former Plan”). No new awards are being granted under the Former Plan, however, all awards granted under the Former Plan that were outstanding as of August 3, 2016 will continue to be governed by the Former 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 permit accelerated vesting in the event of certain changes of control of Orion as well as under other special circumstances. The following amounts of stock-based compensation were recorded (dollars in thousands): Three Months Ended June 30, 2017 2016 Cost of product revenue $ 6 $ 14 General and administrative 267 267 Sales and marketing 41 31 Research and development 6 17 Total $ 320 $ 329 During the first three months of fiscal 2018 , Orion had the following activity related to its stock based compensation: Restricted Shares Stock Options Balance at March 31, 2017 1,704,543 1,520,953 Awards granted 659,272 — Awards vested (414,569 ) — Awards forfeited (242,801 ) (78,800 ) Awards outstanding at June 30, 2017 1,706,445 1,442,153 Per share price on grant date $1.38 - $1.95 — As of June 30, 2017 , the amount of deferred stock-based compensation expense to be recognized, over a remaining period of 2.3 years, was approximately $2.2 million. |
SEGMENTS
SEGMENTS | 3 Months Ended |
Jun. 30, 2017 | |
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. 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 ESCOs and electrical contractors. A significant portion of the historic sales of this division migrated to distribution channel sales as a result of the implementation of Orion’s distribution sales strategy. The migrated sales are included in Orion's ODS Division. This migration is expected to continue during fiscal 2018. Orion Engineered Systems Division ("OES") The OES segment develops and sells lighting products and provides construction and engineering services for Orion's commercial 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. This segment expanded in fiscal 2018 as a result of the expansion of sales through distributors after the implementation of our distribution sales strategy. This expansion included the migration of customers from direct sales previously included in our USM division. 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 (dollars in thousands). Revenues Operating Income (Loss) For the Three Months Ended June 30, For the Three Months Ended June 30, 2017 2016 2017 2016 Segments: Orion U.S. Markets $ 1,390 $ 5,901 $ (1,532 ) $ (57 ) Orion Engineered Systems 5,408 6,800 (1,891 ) (769 ) Orion Distribution Services 5,760 2,933 (741 ) (728 ) Corporate and Other — — (2,338 ) (1,697 ) $ 12,558 $ 15,634 $ (6,502 ) $ (3,251 ) |
REORGANIZATION OF BUSINESS
REORGANIZATION OF BUSINESS | 3 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
REORGANIZATION OF BUSINESS | REORGANIZATION OF BUSINESS During the three months ended June 30, 2017, Orion implemented a reorganization and targeted cost savings plan. As a result, the Company entered into separation agreements with 17 employees and recognized $1.9 million of restructuring expense consisting of severance, outplacement services, and continued medical benefits for terminated employees for a limited post-employment period. The restructuring expense for the three months ended June 30, 2017 is reflected within Orion’s condensed statement of operations as follows (dollars in thousands): Three Months Ended June 30, 2017 Cost of product revenue $ 40 General and administrative 1,767 Sales and marketing 97 Total $ 1,904 Total restructuring expense by segment was recorded as follows (dollars in thousands): Three Months Ended June 30, 2017 Orion U.S. Markets $ — Orion Engineered Systems — Orion Distribution Systems 75 Corporate and Other 1,829 Total $ 1,904 The following table displays a rollforward of the reorganization of business accruals established for employee separation costs from March 31, 2017 to June 30, 2017 (dollars in thousands): March 31, 2017 Additions Amounts Used June 30, 2017 Employee separation costs $ — $ 1,763 $ (1,304 ) $ 459 Post-employment medical benefits (1) — 141 — 141 Total $ — $ 1,904 $ (1,304 ) $ 600 (1) The severance agreement with one executive included a long-term post-employment medical benefit which will be paid over a period of approximately twelve years . The Company recorded a liability for the net present value of this obligation based on the current cost of premiums for this individual’s medical coverage increased by an estimated health care cost trend of 6.8% decreasing to 5% in nine years . This benefit is reflected in Orion’s condensed consolidated balance sheet within accrued expenses and other and other long-term liabilities. The remaining accrual of $0.5 million for employee separation costs is expected to be paid within the next twelve months . |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Jun. 30, 2017 | |
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 transactions 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. Non-recognized 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 ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jun. 30, 2017 | |
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, 2018 or other interim periods. The condensed consolidated balance sheet at March 31, 2017 has been derived from the audited 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, 2017 filed with the Securities and Exchange Commission on June 13, 2017 . |
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, allowance for doubtful accounts, accruals for warranty and loss contingencies, income taxes and certain equity transactions. Accordingly, actual results could differ from those estimates. |
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 financial institution viability 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 Standards 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. The ASU provides guidance, as to the classification of 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 February 2016, the FASB issued ASU 2016-02, “Leases (Subtopic 842)." This ASU requires that lessees recognize right-of-use 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. Under this ASU, leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as sales-type, finance or operating leases, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards as well as substantive control have been transferred through the lease contract. This ASU also provides guidance on 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. Early adoption of the standard is permitted and a modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company has not yet completed its review of the full provisions of this standard against its outstanding lease arrangements and is in the process of quantifying the lease liability and related right of use asset which will be recorded to its consolidated balance sheets upon adoption of the standard. In addition, management continues to assess the impact of adoption of this standard on its consolidated statements of operations, cash flows, and the related footnote disclosures. 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. In addition, the ASU requires enhanced and expanded financial statement disclosures. 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. The ASU allows companies to elect either a full retrospective or modified retrospective approach to adoption. Orion will adopt ASU 2014-09 and the related updates with their effective date on April 1, 2018. Orion has begun the process of implementing this standard, including performing a review of its revenue streams to identify any differences in the timing, measurement, or presentation of revenue recognition. The Company continues to review the provisions of these standards against its customer contracts, including evaluating and identifying distinct performance obligations and variable consideration in the form of customer rebates. The Company has selected a representative sample of customer contracts from each of its major revenue streams and is in the process of evaluating these contracts against the standards to determine any impact on the timing and presentation of revenue. In addition, the Company has identified necessary changes in its ongoing process for the review of new customer contracts and the identification of key terms impacting revenue recognition. The Company is also evaluating the necessary changes to its systems, revenue related processes and controls as a result of the new standard, including the related footnote disclosures. Under ASU 2014-09 incremental contract costs, including sales commissions, may be required to be capitalized and expensed over the period these costs are recovered. Although Orion incurs commission costs, its contracts are typically completed within one year. As such, the Company will elect to apply the practical expedient for contract costs recovered within one year and will continue to recognize commissions as cost of sales immediately rather than capitalizing and expensing these costs over the contract period. Orion currently plans to elect the modified retrospective adoption method but continues to evaluate both of the available transition methods. In May 2017, the FASB issued ASU 2017-09, “Compensation-Stock Compensation: Scope of Modification Accounting” which provides guidance about which changes to the terms or conditions of a share-based payment award would require an entity to apply modification accounting. The provisions of this standard are effective for Orion beginning on April 1, 2018. The adoption of this standard is not expected to have a material impact on Orion’s consolidated condensed financial statements. Recently Adopted Standards 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, as of April 1, 2017. The adoption of this standard had no impact on Orion’s condensed 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. Orion adopted this standard as of April 1, 2017. The adoption of this standard had no impact on its condensed consolidated financial statements as the previous measurement and validation of the carrying value of its inventory incorporated market values consistent with the net realizable value measurements of the standard. 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. Orion adopted this ASU as of April 1, 2017. As a result of adopting the income tax accounting provisions of this standard, Orion realized an increase in both its deferred tax assets related to stock-based compensation awards and the related valuation allowance. As the Company carries a full valuation allowance against its deferred tax assets, there was no net impact to its condensed consolidated balance sheets or statements of operations. In accordance with the provisions of this standard, the Company elected to prospectively adopt an accounting policy to recognize forfeitures as they occur in lieu of estimating forfeitures. The cashflow presentation provisions of the standard had no impact on Orion’s condensed consolidated financial statements. Finally, due to the Company’s net loss, the modifications to the calculation of diluted earnings per share as a result of adopting this standard did not impact its diluted earnings per share. |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Accounts receivable and allowance for doubtful accounts balances | Orion's accounts receivable and allowance for doubtful accounts balances were as follows (dollars in thousands): June 30, 2017 March 31, 2017 Accounts receivable, gross $ 7,216 $ 9,315 Allowance for doubtful accounts (176 ) (144 ) Accounts receivable, net $ 7,040 $ 9,171 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | As of June 30, 2017 and March 31, 2017 , Orion's inventory balances were as follows (dollars in thousands): Cost Reserve Net As of June 30, 2017 Raw materials and components $ 8,008 $ (1,677 ) $ 6,331 Work in process 1,693 (348 ) 1,345 Finished goods 5,981 (1,391 ) 4,590 Total $ 15,682 $ (3,416 ) $ 12,266 As of March 31, 2017 Raw materials and components $ 8,104 $ (1,807 ) $ 6,297 Work in process 1,918 (329 ) 1,589 Finished goods 7,044 (1,337 ) 5,707 Total $ 17,066 $ (3,473 ) $ 13,593 |
PREPAID EXPENSES AND OTHER CU28
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expenses and other current assets | Prepaid expenses and other current assets include the following (dollars in thousands): June 30, 2017 March 31, 2017 Unbilled accounts receivable $ 2,467 $ 2,226 Other prepaid expenses 626 651 Total $ 3,093 $ 2,877 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment were comprised of the following (dollars in thousands): June 30, 2017 March 31, 2017 Land and land improvements $ 424 $ 424 Buildings and building improvements 9,245 9,245 Furniture, fixtures and office equipment 7,050 7,056 Leasehold improvements 324 324 Equipment leased to customers 4,997 4,997 Plant equipment 11,633 11,627 Construction in progress 224 61 33,897 33,734 Less: accumulated depreciation and amortization (20,259 ) (19,948 ) Property and equipment, net $ 13,638 $ 13,786 |
Schedule of equipment under capital leases | Equipment included above under capital leases was as follows (dollars in thousands): June 30, 2017 March 31, 2017 Equipment $ 581 $ 581 Less: accumulated depreciation and amortization (237 ) (202 ) Equipment, net $ 344 $ 379 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of other intangible assets | The components of, and changes in, the carrying amount of other intangible assets were as follows (dollars in thousands): June 30, 2017 March 31, 2017 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Patents $ 2,678 $ (1,251 ) $ 1,427 $ 2,658 $ (1,211 ) $ 1,447 Licenses 58 (58 ) — 58 (58 ) — Trade name and trademarks 1,715 — 1,715 1,715 — 1,715 Customer relationships 3,600 (3,131 ) 469 3,600 (3,054 ) 546 Developed technology 900 (466 ) 434 900 (426 ) 474 Non-competition agreements 100 (80 ) 20 100 (75 ) 25 Total $ 9,051 $ (4,986 ) $ 4,065 $ 9,031 $ (4,824 ) $ 4,207 |
Estimated amortization expense for each of the next five years | The estimated amortization expense for the next five years and beyond is shown below (dollars in thousands): Fiscal 2018 $ 461 Fiscal 2019 447 Fiscal 2020 361 Fiscal 2021 287 Fiscal 2022 190 Fiscal 2023 166 Thereafter 438 Total $ 2,350 |
OTHER LONG-TERM ASSETS (Tables)
OTHER LONG-TERM ASSETS (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other long-term assets | Other long-term assets include the following (dollars in thousands): June 30, 2017 March 31, 2017 Security deposits $ 66 $ 117 Other 52 58 Total $ 118 $ 175 |
ACCRUED EXPENSES AND OTHER LO32
ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of accrued expenses and other | Accrued expenses and other include the following (dollars in thousands): June 30, 2017 March 31, 2017 Compensation and benefits $ 1,802 $ 2,431 Sales tax 94 213 Contract costs 248 223 Legal and professional fees 2,116 2,262 Warranty 471 449 Other accruals 397 410 Total $ 5,128 $ 5,988 |
Other long term liabilities | Other long term liabilities includes the following (dollars in thousands): June 30, 2017 March 31, 2017 Warranty $ 310 $ 310 Medical benefits 137 — Unrecognized tax benefits 113 113 Other — 19 Total $ 560 $ 442 |
Changes in warranty accrual | Changes in Orion’s warranty accrual (both current and long-term) were as follows (dollars in thousands): Three Months Ended June 30, 2017 2016 Beginning of period $ 759 $ 864 Provision to product cost of revenue 24 175 Charges (2 ) (1 ) End of period $ 781 $ 1,038 |
NET LOSS PER COMMON SHARE (Tabl
NET LOSS PER COMMON SHARE (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Summary of the effect of net income per common share | For the three months ended June 30, 2017 and 2016, 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. Net loss per common share is calculated based upon the following: Three Months Ended June 30, 2017 2016 Numerator: Net loss (in thousands) $ (6,564 ) $ (2,940 ) Denominator: Weighted-average common shares outstanding 28,455,434 27,885,588 Weighted-average common shares and common share equivalents outstanding 28,455,434 27,885,588 Net loss per common share: Basic $ (0.23 ) $ (0.11 ) Diluted $ (0.23 ) $ (0.11 ) |
Number of potentially dilutive securities | The following table indicates the number of potentially dilutive securities excluded from the calculation of diluted net loss per common share because their inclusion would have been anti-dilutive. The number of shares are as of the end of each period: June 30, 2017 June 30, 2016 Common stock options 1,442,153 1,949,846 Restricted shares 1,706,445 1,482,208 Total 3,148,598 3,432,054 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt consisted of the following (dollars in thousands): June 30, 2017 March 31, 2017 Revolving credit facility $ 3,853 $ 6,629 Equipment lease obligations 268 321 Customer equipment finance notes payable 6 7 Other long-term debt — 14 Total long-term debt 4,127 6,971 Less current maturities (110 ) (152 ) Long-term debt, less current maturities $ 4,017 $ 6,819 |
STOCK OPTIONS AND RESTRICTED 35
STOCK OPTIONS AND RESTRICTED SHARES (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation | The following amounts of stock-based compensation were recorded (dollars in thousands): Three Months Ended June 30, 2017 2016 Cost of product revenue $ 6 $ 14 General and administrative 267 267 Sales and marketing 41 31 Research and development 6 17 Total $ 320 $ 329 |
Summary of outstanding non-vested stock options | During the first three months of fiscal 2018 , Orion had the following activity related to its stock based compensation: Restricted Shares Stock Options Balance at March 31, 2017 1,704,543 1,520,953 Awards granted 659,272 — Awards vested (414,569 ) — Awards forfeited (242,801 ) (78,800 ) Awards outstanding at June 30, 2017 1,706,445 1,442,153 Per share price on grant date $1.38 - $1.95 — |
Summary of restricted shares granted | During the first three months of fiscal 2018 , Orion had the following activity related to its stock based compensation: Restricted Shares Stock Options Balance at March 31, 2017 1,704,543 1,520,953 Awards granted 659,272 — Awards vested (414,569 ) — Awards forfeited (242,801 ) (78,800 ) Awards outstanding at June 30, 2017 1,706,445 1,442,153 Per share price on grant date $1.38 - $1.95 — |
SEGMENTS (Tables)
SEGMENTS (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment reporting information | Revenues Operating Income (Loss) For the Three Months Ended June 30, For the Three Months Ended June 30, 2017 2016 2017 2016 Segments: Orion U.S. Markets $ 1,390 $ 5,901 $ (1,532 ) $ (57 ) Orion Engineered Systems 5,408 6,800 (1,891 ) (769 ) Orion Distribution Services 5,760 2,933 (741 ) (728 ) Corporate and Other — — (2,338 ) (1,697 ) $ 12,558 $ 15,634 $ (6,502 ) $ (3,251 ) |
REORGANIZATION OF BUSINESS (Tab
REORGANIZATION OF BUSINESS (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | The restructuring expense for the three months ended June 30, 2017 is reflected within Orion’s condensed statement of operations as follows (dollars in thousands): Three Months Ended June 30, 2017 Cost of product revenue $ 40 General and administrative 1,767 Sales and marketing 97 Total $ 1,904 Total restructuring expense by segment was recorded as follows (dollars in thousands): Three Months Ended June 30, 2017 Orion U.S. Markets $ — Orion Engineered Systems — Orion Distribution Systems 75 Corporate and Other 1,829 Total $ 1,904 |
Change in Restructuring Reserve | The following table displays a rollforward of the reorganization of business accruals established for employee separation costs from March 31, 2017 to June 30, 2017 (dollars in thousands): March 31, 2017 Additions Amounts Used June 30, 2017 Employee separation costs $ — $ 1,763 $ (1,304 ) $ 459 Post-employment medical benefits (1) — 141 — 141 Total $ — $ 1,904 $ (1,304 ) $ 600 (1) The severance agreement with one executive included a long-term post-employment medical benefit which will be paid over a period of approximately twelve years . The Company recorded a liability for the net present value of this obligation based on the current cost of premiums for this individual’s medical coverage increased by an estimated health care cost trend of 6.8% decreasing to 5% in nine years . This benefit is reflected in Orion’s condensed consolidated balance sheet within accrued expenses and other and other long-term liabilities. |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - financial_instituion | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Concentration of Credit Risk and Other Risks and Uncertainties | ||
Number of financial institutions | 2 | |
Revenue | Customer Concentration Risk | Customer One | ||
Concentration of Credit Risk and Other Risks and Uncertainties | ||
Concentration risk, percentage | 16.20% | |
Accounts Receivable | Customer Concentration Risk | Customer One | ||
Concentration of Credit Risk and Other Risks and Uncertainties | ||
Concentration risk, percentage | 11.60% |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Receivables [Abstract] | ||
Accounts receivable, gross | $ 7,216 | $ 9,315 |
Allowance for doubtful accounts | (176) | (144) |
Accounts receivable, net | $ 7,040 | $ 9,171 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Cost | ||
Raw materials and components | $ 8,008 | $ 8,104 |
Work in process | 1,693 | 1,918 |
Finished goods | 5,981 | 7,044 |
Total | 15,682 | 17,066 |
Reserve | ||
Raw materials and components | (1,677) | (1,807) |
Work in process | (348) | (329) |
Finished goods | (1,391) | (1,337) |
Total | (3,416) | (3,473) |
Net | ||
Raw materials and components | 6,331 | 6,297 |
Work in process | 1,345 | 1,589 |
Finished goods | 4,590 | 5,707 |
Total | $ 12,266 | $ 13,593 |
PREPAID EXPENSES AND OTHER CU41
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Unbilled accounts receivable | $ 2,467 | $ 2,226 |
Other prepaid expenses | 626 | 651 |
Total | $ 3,093 | $ 2,877 |
PROPERTY AND EQUIPMENT (Summary
PROPERTY AND EQUIPMENT (Summary of Property and Equipment) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Property and equipment | ||
Gross property and equipment | $ 33,897 | $ 33,734 |
Less: accumulated depreciation and amortization | (20,259) | (19,948) |
Property and equipment, net | 13,638 | 13,786 |
Land and land improvements | ||
Property and equipment | ||
Gross property and equipment | 424 | 424 |
Buildings and building improvements | ||
Property and equipment | ||
Gross property and equipment | 9,245 | 9,245 |
Furniture, fixtures and office equipment | ||
Property and equipment | ||
Gross property and equipment | 7,050 | 7,056 |
Leasehold improvements | ||
Property and equipment | ||
Gross property and equipment | 324 | 324 |
Equipment leased to customers | ||
Property and equipment | ||
Gross property and equipment | 4,997 | 4,997 |
Plant equipment | ||
Property and equipment | ||
Gross property and equipment | 11,633 | 11,627 |
Construction in progress | ||
Property and equipment | ||
Gross property and equipment | $ 224 | $ 61 |
PROPERTY AND EQUIPMENT (Equipme
PROPERTY AND EQUIPMENT (Equipment under Capital Leases) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Capital Leased Assets [Line Items] | ||
Equipment | $ 33,897 | $ 33,734 |
Less: accumulated depreciation and amortization | (20,259) | (19,948) |
Property and equipment, net | 13,638 | 13,786 |
Assets Held under Capital Leases | ||
Capital Leased Assets [Line Items] | ||
Equipment | 581 | 581 |
Less: accumulated depreciation and amortization | (237) | (202) |
Property and equipment, net | $ 344 | $ 379 |
PROPERTY AND EQUIPMENT (Narrati
PROPERTY AND EQUIPMENT (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 353 | $ 389 |
INTANGIBLE ASSETS (Components a
INTANGIBLE ASSETS (Components and Changes in Other Intangible Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 9,051 | $ 9,031 |
Accumulated Amortization | (4,986) | (4,824) |
Net | 4,065 | 4,207 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,678 | 2,658 |
Accumulated Amortization | (1,251) | (1,211) |
Net | 1,427 | 1,447 |
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 | 1,715 | 1,715 |
Accumulated Amortization | 0 | 0 |
Net | 1,715 | 1,715 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,600 | 3,600 |
Accumulated Amortization | (3,131) | (3,054) |
Net | 469 | 546 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 900 | 900 |
Accumulated Amortization | (466) | (426) |
Net | 434 | 474 |
Non-competition agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 100 | 100 |
Accumulated Amortization | (80) | (75) |
Net | $ 20 | $ 25 |
INTANGIBLE ASSETS (Narrative) (
INTANGIBLE ASSETS (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 0.2 | $ 0.2 |
Weighted Average | ||
Segment Reporting Information [Line Items] | ||
Intangible assets, estimated economic useful life | 5 years 10 months 24 days |
INTANGIBLE ASSETS (Future Amort
INTANGIBLE ASSETS (Future Amortization by Fiscal Year) (Details) $ in Thousands | Jun. 30, 2017USD ($) |
Finite-Lived Intangible Assets, Estimated Amortization Expense | |
Fiscal 2,018 | $ 461 |
Fiscal 2,019 | 447 |
Fiscal 2,020 | 361 |
Fiscal 2,021 | 287 |
Fiscal 2,022 | 190 |
Fiscal 2,023 | 166 |
Thereafter | 438 |
Total | $ 2,350 |
OTHER LONG-TERM ASSETS (Summary
OTHER LONG-TERM ASSETS (Summary of Other Long-Term Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Security deposits | $ 66 | $ 117 |
Other | 52 | 58 |
Total | $ 118 | $ 175 |
ACCRUED EXPENSES AND OTHER LO49
ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES (Accrued Expenses and Other) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Compensation and benefits | $ 1,802 | $ 2,431 |
Sales tax | 94 | 213 |
Contract costs | 248 | 223 |
Legal and professional fees | 2,116 | 2,262 |
Warranty | 471 | 449 |
Other accruals | 397 | 410 |
Total | $ 5,128 | $ 5,988 |
ACCRUED EXPENSES AND OTHER LO50
ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES (Other Long Term Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Warranty | $ 310 | $ 310 |
Medical benefits | 137 | 0 |
Unrecognized tax benefits | 113 | 113 |
Other | 0 | 19 |
Total | $ 560 | $ 442 |
ACCRUED EXPENSES AND OTHER LO51
ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES (Narrative) (Details) | 3 Months Ended |
Jun. 30, 2017 | |
Minimum | |
Segment Reporting Information [Line Items] | |
Limited warranty term | 1 year |
Maximum | |
Segment Reporting Information [Line Items] | |
Limited warranty term | 10 years |
ACCRUED EXPENSES AND OTHER LO52
ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES (Warranty Accrual) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Movement in Standard Product Warranty Accrual | ||
Beginning of period | $ 759 | $ 864 |
Provision to product cost of revenue | 24 | 175 |
Charges | (2) | (1) |
End of period | $ 781 | $ 1,038 |
NET LOSS PER COMMON SHARE (Earn
NET LOSS PER COMMON SHARE (Earnings per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Numerator: | ||
Net loss | $ (6,564) | $ (2,940) |
Denominator: | ||
Weighted-average common shares outstanding (in shares) | 28,455,434 | 27,885,588 |
Weighted-average common shares and common share equivalents outstanding (in shares) | 28,455,434 | 27,885,588 |
Net loss per common share: | ||
Basic (usd per share) | $ (0.23) | $ (0.11) |
Diluted (usd per share) | $ (0.23) | $ (0.11) |
NET LOSS PER COMMON SHARE (Pote
NET LOSS PER COMMON SHARE (Potentially Dilutive Securities) (Details) - shares | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Number of potentially dilutive securities | ||
Potentially dilutive securities outstanding (in shares) | 3,148,598 | 3,432,054 |
Common stock options | ||
Number of potentially dilutive securities | ||
Potentially dilutive securities outstanding (in shares) | 1,442,153 | 1,949,846 |
Restricted shares | ||
Number of potentially dilutive securities | ||
Potentially dilutive securities outstanding (in shares) | 1,706,445 | 1,482,208 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2016USD ($) | |
Entity that Current Director Owns Minority Interest and Serves as Board of Directors Chairman | |
Related Party Transaction [Line Items] | |
Purchases from related party | $ 2 |
LONG-TERM DEBT (Summary of Long
LONG-TERM DEBT (Summary of Long-Term Debt) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 |
Long-term debt | ||
Total long-term debt | $ 4,127 | $ 6,971 |
Less current maturities | (110) | (152) |
Long-term debt, less current maturities | 4,017 | 6,819 |
Customer equipment finance notes payable | ||
Long-term debt | ||
Total long-term debt | 6 | 7 |
Other long-term debt | ||
Long-term debt | ||
Total long-term debt | 0 | 14 |
Revolving credit facility | ||
Long-term debt | ||
Total long-term debt | 3,853 | 6,629 |
Equipment lease obligations | ||
Long-term debt | ||
Total long-term debt | $ 268 | $ 321 |
LONG-TERM DEBT (Narrative) (Det
LONG-TERM DEBT (Narrative) (Details) | 1 Months Ended | 3 Months Ended | ||||||||
Jul. 31, 2012USD ($) | Sep. 30, 2010USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($)contract | Jul. 01, 2013USD ($) | Jun. 30, 2011USD ($) | |
Line of Credit Facility [Line Items] | ||||||||||
Revolving credit facility | $ 3,853,000 | $ 6,629,000 | ||||||||
Equipment lease obligations | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Lease interest rate | 5.90% | 3.60% | ||||||||
Lease agreement, principal amount | $ 19,000 | $ 400,000 | ||||||||
Net equipment lease obligation buyout option | $ 1 | $ 1 | ||||||||
Harris seller's note | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Face amount of debt | $ 3,100,000 | |||||||||
Lease interest rate | 4.00% | |||||||||
June 2011 OTA Finance Program | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Face amount of debt | $ 2,800,000 | |||||||||
Lease interest rate | 7.85% | |||||||||
Agreement with Wisconsin Department of Commerce | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Face amount of debt | $ 300,000 | |||||||||
Lease interest rate | 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 | 4,100,000 | |||||||||
Credit facility, maximum limit | 15,000,000 | |||||||||
Revolving credit facility | $ 3,900,000 | |||||||||
Potential maximum borrowing | $ 20,000,000 | |||||||||
Credit facility, minimum indebtedness ratio | 1.10 | |||||||||
Interest payment | $ 100,000 | |||||||||
Interest rate | 4.30% | |||||||||
Unused commitment fee | 0.25% | |||||||||
Credit facility, additional borrowing capacity | $ 200,000 | |||||||||
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 | 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 | 3.00% | |||||||||
December 2014 OTA Finance Program | De Lage Landen Financial Services, Inc. | Secured Debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Lease interest rate | 8.36% | |||||||||
Principal amount of secured debt | $ 400,000 | |||||||||
Number of contracts for collateral (contract) | contract | 25 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Income Taxes | ||
Estimated effective income tax rate | 0.00% | (0.30%) |
Valuation allowance | $ 34 | |
Unrecognized tax benefits | 0.1 | |
Federal | ||
Income Taxes | ||
Operating loss carryforwards | 75.7 | |
Tax credit carryforwards | 1.4 | |
State | ||
Income Taxes | ||
Operating loss carryforwards | 65.2 | |
Tax credit carryforwards | $ 0.7 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Apr. 28, 2017USD ($) | Jun. 30, 2016USD ($) | Nov. 04, 2014claim | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |||||
Rent expense under operating leases | $ 0.2 | $ 0.1 | |||
Term of operating lease | 3 years | ||||
Annual rent expense | $ 0.1 | ||||
Long-term Purchase Commitment [Line Items] | |||||
Number of plaintiff's claims dismissed (claim) | claim | 6 | ||||
State | Wisconsin Department of Revenue | |||||
Long-term Purchase Commitment [Line Items] | |||||
Amount of settlement | $ 0.5 | $ 0.5 | |||
Manitowoc Manufacturing and Distribution Facility | |||||
Long-term Purchase Commitment [Line Items] | |||||
Gross cash proceeds from sale leaseback agreement | $ 2.6 |
SHAREHOLDERS_ EQUITY (Details)
SHAREHOLDERS’ EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 83 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Closing Market Price (usd per share) | $ 1.28 | $ 1.28 | |
Loans issued to non-executive employees outstanding | $ 0 | $ 0 | $ 4 |
Treasury stock acquired (shares) | 1,230 | ||
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares Issued Under ESPP Plan (shares) | 2,150 |
STOCK OPTIONS AND RESTRICTED 61
STOCK OPTIONS AND RESTRICTED SHARES (Stock-based Compensation) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Stock-based compensation | ||
Total | $ 320 | $ 329 |
Cost of product revenue | ||
Stock-based compensation | ||
Total | 6 | 14 |
General and administrative | ||
Stock-based compensation | ||
Total | 267 | 267 |
Sales and marketing | ||
Stock-based compensation | ||
Total | 41 | 31 |
Research and development | ||
Stock-based compensation | ||
Total | $ 6 | $ 17 |
STOCK OPTIONS AND RESTRICTED 62
STOCK OPTIONS AND RESTRICTED SHARES (Restricted Shares and Stock Options) (Details) | 3 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Stock Options | |
Non-vested, beginning balance (shares) | 1,520,953 |
Awards granted (shares) | 0 |
Awards vested (shares) | 0 |
Awards forfeited (shares) | (78,800) |
Non-vested, ending balance (shares) | 1,442,153 |
Per share price on grant date (usd per share) | $ / shares | $ 0 |
Restricted shares | |
Restricted Shares | |
Beginning balance (shares) | 1,704,543 |
Awards granted (shares) | 659,272 |
Awards vested (shares) | (414,569) |
Awards forfeited (shares) | (242,801) |
Ending balance (shares) | 1,706,445 |
Restricted shares | Minimum | |
Restricted Shares | |
Per share price on grant date (usd per share) | $ / shares | $ 1.38 |
Restricted shares | Maximum | |
Restricted Shares | |
Per share price on grant date (usd per share) | $ / shares | $ 1.98 |
STOCK OPTIONS AND RESTRICTED 63
STOCK OPTIONS AND RESTRICTED SHARES (Narrative) (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2017USD ($) | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Deferred stock-based compensation related to grants of restricted shares, period of recognition | 2 years 3 months 18 days |
Deferred stock-based compensation related to grants of restricted shares | $ 2.2 |
SEGMENTS (Details)
SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Corporate and Other | ||
Revenues | $ 12,558 | $ 15,634 |
Operating Income (Loss) | (6,502) | (3,251) |
Operating Segments | Orion U.S. Markets | ||
Corporate and Other | ||
Revenues | 1,390 | 5,901 |
Operating Income (Loss) | (1,532) | (57) |
Operating Segments | Orion Engineered Systems | ||
Corporate and Other | ||
Revenues | 5,408 | 6,800 |
Operating Income (Loss) | (1,891) | (769) |
Operating Segments | Orion Distribution Services | ||
Corporate and Other | ||
Revenues | 5,760 | 2,933 |
Operating Income (Loss) | (741) | (728) |
Corporate and Other | ||
Corporate and Other | ||
Revenues | 0 | 0 |
Operating Income (Loss) | $ (2,338) | $ (1,697) |
REORGANIZATION OF BUSINESS (Nar
REORGANIZATION OF BUSINESS (Narrative) (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2017USD ($)position | |
Restructuring and Related Activities [Abstract] | |
Number of positions eliminated (in position) | position | 17 |
Total restructuring charges | $ 1,904 |
Remaining restructuring costs | $ 500 |
REORGANIZATION OF BUSINESS (Res
REORGANIZATION OF BUSINESS (Restructuring by Statement of Operations Location) (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring charges | $ 1,904 |
Cost of product revenue | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring charges | 40 |
General and administrative | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring charges | 1,767 |
Sales and marketing | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring charges | $ 97 |
REORGANIZATION OF BUSINESS (R67
REORGANIZATION OF BUSINESS (Restructuring by Segment) (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring charges | $ 1,904 |
Operating Segments | Orion U.S. Markets | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring charges | 0 |
Operating Segments | Orion Engineered Systems | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring charges | 0 |
Operating Segments | Orion Distribution Services | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring charges | 75 |
Corporate and Other | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring charges | $ 1,829 |
REORGANIZATION OF BUSINESS (Cha
REORGANIZATION OF BUSINESS (Change in Reserve) (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2017USD ($) | |
Restructuring Reserve | |
Beginning balance | $ 0 |
Additions | 1,904 |
Amounts Used | (1,304) |
Ending balance | 600 |
Employee separation costs | |
Restructuring Reserve | |
Beginning balance | 0 |
Additions | 1,763 |
Amounts Used | (1,304) |
Ending balance | 459 |
Post-employment medical benefits | |
Restructuring Reserve | |
Beginning balance | 0 |
Additions | 141 |
Amounts Used | 0 |
Ending balance | $ 141 |
Medical benefit period | 12 years |
Estimated health care cost trend | 6.80% |
Ultimate estimated health care cost trend | 5.00% |
Period for change in health care cost trend to reach ultimate trend rate | 9 years |