Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2019 | Jan. 31, 2020 | |
Document and Entity Information [Line Items] | ||
Entity Registrant Name | ORION ENERGY SYSTEMS, INC. | |
Entity Central Index Key | 0001409375 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 30,255,062 | |
Entity File Number | 001-33887 | |
Entity Tax Identification Number | 39-1847269 | |
Entity Address, Address Line One | 2210 Woodland Drive | |
Entity Address, City or Town | Manitowoc | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 54220 | |
City Area Code | 920 | |
Local Phone Number | 892-9340 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | WI | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Common stock, no par value | ||
Document and Entity Information [Line Items] | ||
Title of 12(b) Security | Common stock, no par value | |
Trading Symbol | OESX | |
Security Exchange Name | NASDAQ | |
Common stock purchase rights | ||
Document and Entity Information [Line Items] | ||
Title of 12(b) Security | Common stock purchase rights | |
Security Exchange Name | NASDAQ | |
No Trading Symbol Flag | true |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 13,762 | $ 8,729 |
Accounts receivable, net | 15,224 | 14,804 |
Revenue earned but not billed | 789 | 3,746 |
Inventories, net | 12,235 | 13,403 |
Prepaid expenses and other current assets | 714 | 695 |
Total current assets | 42,724 | 41,377 |
Property and equipment, net | 11,920 | 12,010 |
Other intangible assets, net | 2,257 | 2,469 |
Other long-term assets | 139 | 165 |
Total assets | 57,040 | 56,021 |
Liabilities and Shareholders’ Equity | ||
Accounts payable | 16,950 | 19,706 |
Accrued expenses and other | 6,241 | 7,410 |
Deferred revenue, current | 85 | 123 |
Current maturities of long-term debt | 56 | 96 |
Total current liabilities | 23,332 | 27,335 |
Revolving credit facility | 829 | 9,202 |
Long-term debt, less current maturities | 53 | 81 |
Deferred revenue, long-term | 734 | 791 |
Other long-term liabilities | 671 | 642 |
Total liabilities | 25,619 | 38,051 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Preferred stock, $0.01 par value: Shares authorized: 30,000,000 at December 31, 2019 and March 31, 2019; no shares issued and outstanding at December 31, 2019 and March 31, 2019 | 0 | 0 |
Common stock, no par value: Shares authorized: 200,000,000 at December 31, 2019 and March 31, 2019; shares issued: 39,717,207 at December 31, 2019 and 39,037,969 at March 31, 2019; shares outstanding: 30,253,062 at December 31, 2019 and 29,600,158 at March 31, 2019 | 0 | 0 |
Additional paid-in capital | 156,359 | 155,828 |
Treasury stock, common shares: 9,464,145 at December 31, 2019 and 9,437,811 at March 31, 2019 | (36,164) | (36,091) |
Retained deficit | (88,774) | (101,767) |
Total shareholders’ equity | 31,421 | 17,970 |
Total liabilities and shareholders’ equity | $ 57,040 | $ 56,021 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Mar. 31, 2019 |
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) | 39,717,207 | 39,037,969 |
Common stock, shares outstanding (in shares) | 30,253,062 | 29,600,158 |
Treasury stock (in shares) | 9,464,145 | 9,437,811 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | $ 34,249 | $ 16,291 | $ 124,949 | $ 43,311 |
Cost of revenue | 25,975 | 12,121 | 93,601 | 33,143 |
Gross profit | 8,274 | 4,170 | 31,348 | 10,168 |
Operating expenses: | ||||
General and administrative | 2,662 | 2,269 | 8,274 | 7,681 |
Sales and marketing | 2,735 | 2,190 | 8,359 | 6,903 |
Research and development | 439 | 298 | 1,240 | 1,057 |
Total operating expenses | 5,836 | 4,757 | 17,873 | 15,641 |
Income (loss) from operations | 2,438 | (587) | 13,475 | (5,473) |
Other income (expense): | ||||
Other income | 2 | 31 | 22 | 65 |
Interest expense | (38) | (77) | (261) | (335) |
Amortization of debt issue costs | (61) | (31) | (182) | (31) |
Interest income | 2 | 2 | 5 | 8 |
Total other expense | (95) | (75) | (416) | (293) |
Income (loss) before income tax | 2,343 | (662) | 13,059 | (5,766) |
Income tax expense | 39 | 0 | 66 | 26 |
Net income (loss) | $ 2,304 | $ (662) | $ 12,993 | $ (5,792) |
Basic net income (loss) per share attributable to common shareholders | $ 0.08 | $ (0.02) | $ 0.43 | $ (0.20) |
Weighted-average common shares outstanding | 30,243,865 | 29,568,986 | 30,053,330 | 29,376,959 |
Diluted net income (loss) per share | $ 0.07 | $ (0.02) | $ 0.42 | $ (0.20) |
Weighted-average common shares and share equivalents outstanding | 30,824,078 | 29,568,986 | 30,862,088 | 29,376,959 |
Product revenue | ||||
Revenues | $ 25,867 | $ 13,952 | $ 93,778 | $ 38,350 |
Cost of revenue | 19,075 | 10,508 | 68,778 | 29,599 |
Service revenue | ||||
Revenues | 8,382 | 2,339 | 31,171 | 4,961 |
Cost of revenue | $ 6,900 | $ 1,613 | $ 24,823 | $ 3,544 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock, Shares | Common Stock, Additional Paid-in Capital | Treasury Stock | Retained Earnings (Deficit) |
Shareholders' equity, beginning of period at Mar. 31, 2018 | $ 23,424 | $ 155,003 | $ (36,085) | $ (95,494) | |
Shareholders' equity, beginning of period (Shares) at Mar. 31, 2018 | 28,953,183 | ||||
Shares issued under Employee Stock Purchase Plan | 1 | 1 | |||
Shares issued under Employee Stock Purchase Plan (shares) | 415 | ||||
Stock-based compensation | 228 | 228 | |||
Stock-based compensation (shares) | 453,754 | ||||
Employee tax withholdings on stock-based compensation | (3) | (3) | |||
Employee tax withholdings on stock-based compensation (shares) | (3,867) | ||||
Cumulative effect of accounting change | ASC 606 | 401 | 401 | |||
Net income (loss) | (2,692) | (2,692) | |||
Shareholders' equity, end of period at Jun. 30, 2018 | 21,359 | 155,231 | (36,087) | (97,785) | |
Shareholders' equity, at end of period (shares) at Jun. 30, 2018 | 29,403,485 | ||||
Shareholders' equity, beginning of period at Mar. 31, 2018 | 23,424 | 155,003 | (36,085) | (95,494) | |
Shareholders' equity, beginning of period (Shares) at Mar. 31, 2018 | 28,953,183 | ||||
Net income (loss) | (5,792) | ||||
Shareholders' equity, end of period at Dec. 31, 2018 | 18,665 | 155,642 | (36,092) | (100,885) | |
Shareholders' equity, at end of period (shares) at Dec. 31, 2018 | 29,571,944 | ||||
Shareholders' equity, beginning of period at Jun. 30, 2018 | 21,359 | 155,231 | (36,087) | (97,785) | |
Shareholders' equity, beginning of period (Shares) at Jun. 30, 2018 | 29,403,485 | ||||
Shares issued under Employee Stock Purchase Plan | 1 | 1 | |||
Shares issued under Employee Stock Purchase Plan (shares) | 938 | ||||
Stock-based compensation | 211 | 211 | |||
Stock-based compensation (shares) | 137,905 | ||||
Employee tax withholdings on stock-based compensation | (4) | (4) | |||
Employee tax withholdings on stock-based compensation (shares) | (4,854) | ||||
Net income (loss) | (2,438) | (2,438) | |||
Shareholders' equity, end of period at Sep. 30, 2018 | 19,129 | 155,442 | (36,090) | (100,223) | |
Shareholders' equity, at end of period (shares) at Sep. 30, 2018 | 29,537,474 | ||||
Shares issued under Employee Stock Purchase Plan | 1 | 1 | |||
Shares issued under Employee Stock Purchase Plan (shares) | 1,708 | ||||
Stock-based compensation | 200 | 200 | |||
Stock-based compensation (shares) | 34,785 | ||||
Employee tax withholdings on stock-based compensation | (3) | (3) | |||
Employee tax withholdings on stock-based compensation (shares) | (2,023) | ||||
Net income (loss) | (662) | (662) | |||
Shareholders' equity, end of period at Dec. 31, 2018 | 18,665 | 155,642 | (36,092) | (100,885) | |
Shareholders' equity, at end of period (shares) at Dec. 31, 2018 | 29,571,944 | ||||
Shareholders' equity, beginning of period at Mar. 31, 2019 | 17,970 | 155,828 | (36,091) | (101,767) | |
Shareholders' equity, beginning of period (Shares) at Mar. 31, 2019 | 29,600,158 | ||||
Exercise of stock options for cash | 16 | 16 | |||
Exercise of stock options for cash (shares) | 10,000 | ||||
Shares issued under Employee Stock Purchase Plan | $ 2 | 2 | |||
Shares issued under Employee Stock Purchase Plan (shares) | 613 | 613 | |||
Stock-based compensation | $ 171 | 171 | |||
Stock-based compensation (shares) | 535,344 | ||||
Employee tax withholdings on stock-based compensation | (64) | (64) | |||
Employee tax withholdings on stock-based compensation (shares) | (24,628) | ||||
Net income (loss) | 3,968 | 3,968 | |||
Shareholders' equity, end of period at Jun. 30, 2019 | 22,063 | 156,015 | (36,153) | (97,799) | |
Shareholders' equity, at end of period (shares) at Jun. 30, 2019 | 30,121,487 | ||||
Shareholders' equity, beginning of period at Mar. 31, 2019 | $ 17,970 | 155,828 | (36,091) | (101,767) | |
Shareholders' equity, beginning of period (Shares) at Mar. 31, 2019 | 29,600,158 | ||||
Shares issued under Employee Stock Purchase Plan (shares) | 1,849 | ||||
Net income (loss) | $ 12,993 | ||||
Shareholders' equity, end of period at Dec. 31, 2019 | 31,421 | 156,359 | (36,164) | (88,774) | |
Shareholders' equity, at end of period (shares) at Dec. 31, 2019 | 30,253,062 | ||||
Shareholders' equity, beginning of period at Jun. 30, 2019 | 22,063 | 156,015 | (36,153) | (97,799) | |
Shareholders' equity, beginning of period (Shares) at Jun. 30, 2019 | 30,121,487 | ||||
Shares issued under Employee Stock Purchase Plan | $ 2 | 2 | |||
Shares issued under Employee Stock Purchase Plan (shares) | 570 | 570 | |||
Stock-based compensation | $ 159 | 159 | |||
Stock-based compensation (shares) | 111,848 | ||||
Employee tax withholdings on stock-based compensation | (13) | (13) | |||
Employee tax withholdings on stock-based compensation (shares) | (2,828) | ||||
Net income (loss) | 6,721 | 6,721 | |||
Shareholders' equity, end of period at Sep. 30, 2019 | 28,932 | 156,174 | (36,164) | (91,078) | |
Shareholders' equity, at end of period (shares) at Sep. 30, 2019 | 30,231,077 | ||||
Shares issued under Employee Stock Purchase Plan | $ 2 | 2 | |||
Shares issued under Employee Stock Purchase Plan (shares) | 666 | 605 | |||
Stock-based compensation | $ 185 | 185 | |||
Stock-based compensation (shares) | 22,046 | ||||
Employee tax withholdings on stock-based compensation | (2) | (2) | |||
Employee tax withholdings on stock-based compensation (shares) | (666) | ||||
Net income (loss) | 2,304 | 2,304 | |||
Shareholders' equity, end of period at Dec. 31, 2019 | $ 31,421 | $ 156,359 | $ (36,164) | $ (88,774) | |
Shareholders' equity, at end of period (shares) at Dec. 31, 2019 | 30,253,062 |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | ||
Net income (loss) | $ 12,993 | $ (5,792) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation | 910 | 1,006 |
Amortization of intangible assets | 282 | 343 |
Stock-based compensation | 515 | 639 |
Amortization of debt issue costs | 182 | 31 |
Impairment of intangible assets | 3 | 0 |
Provision for inventory reserves | 192 | (144) |
Provision for bad debts | 66 | |
Other | 28 | 8 |
Changes in operating assets and liabilities: | ||
Accounts receivable, current and long-term | (420) | 2,857 |
Revenue earned but not billed | 2,957 | (770) |
Inventories | 970 | (367) |
Prepaid expenses and other assets | 44 | 123 |
Accounts payable | (2,990) | 555 |
Accrued expenses and other | (1,296) | (136) |
Deferred revenue, current and long-term | (95) | (29) |
Net cash provided by (used in) operating activities | 14,275 | (1,610) |
Investing activities | ||
Purchases of property and equipment | (582) | (167) |
Additions to patents and licenses | (73) | (29) |
Net cash used in investing activities | (655) | (196) |
Financing activities | ||
Payment of long-term debt | (68) | (58) |
Proceeds from revolving credit facility | 63,200 | 42,498 |
Payments of revolving credit facility | (71,572) | (43,078) |
Payments to settle employee tax withholdings on stock-based compensation | (76) | (10) |
Debt issue costs | (91) | (377) |
Net proceeds from employee equity exercises | 20 | 3 |
Net cash used in financing activities | (8,587) | (1,022) |
Net increase (decrease) in cash and cash equivalents | 5,033 | (2,828) |
Cash and cash equivalents at beginning of period | 8,729 | 9,424 |
Cash and cash equivalents at end of period | $ 13,762 | $ 6,596 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 — DESCRIPTION OF BUSINESS Organization Orion includes Orion Energy Systems, Inc., a Wisconsin corporation, and all consolidated subsidiaries. Orion designs, manufactures, markets and manages the installation of LED solid-state lighting 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — 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. 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 ("SEC"). 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 fiscal year ending March 31, 2020 or other interim periods. The Condensed Consolidated Balance Sheet at March 31, 2019 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, 2019 filed with the SEC on June 5, 2019. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain 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, income taxes, impairment analyses, 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 drivers, chips, ballasts, lamps and other LED components, from multiple suppliers. For the three months ended December 31, 2019, one supplier accounted for 24.0% of total cost of revenue. For the nine months ended December 31, 2019, one supplier accounted for 12.5% of total cost of revenue. For the three months ended December 31, 2018, one supplier accounted for 11.7% of total cost of revenue. For the nine months ended December 31, 2018, no supplier accounted for more than 10.0% of total cost of revenue. For the three months ended December 31, 2019, one customer accounted for 72.3% of total revenue. For the nine months ended December 31, 2019, one customer accounted for 77.3% of total revenue. For the three months ended December 31, 2018, one customer accounted for 11.6% of total revenue. For the nine months ended December 31, 2018, no customer accounted for more than 10.0% of total revenue. As of December 31, 2019, one customer accounted for 63.5% of Accounts receivable. As of March 31, 2019, one customer accounted for 56.2% of Accounts receivable. Recent Accounting Pronouncements Recently Adopted Standards On April 1, 2019, Orion adopted Accounting Standards Update 2016-02, and subsequent amendments, which is included in the Accounting Standards Codification (“ASC”) as Topic 842, Leases (“ASC 842”), retrospectively through a cumulative-effect adjustment. Orion elected the package of practical expedients provided for in ASU 842, which among other things, allows companies to carry forward their historical lease classification. Previously, Orion followed the guidance set forth in ASC 840, Leases. For Orion, the most significant difference between ASC 840 and ASC 842 is the requirement that lessees recognize right-of-use assets and liabilities on the balance sheet for the rights and obligations created by long-term operating leases. Previously, the financial impact associated with operating leases was recorded only in Orion’s statement of operations. Determining whether a contract includes a lease, and assessing whether the lease should be accounted for as a finance lease or an operating lease, is a matter of judgment based on whether the risks and rewards, as well as substantive control of the associated assets specified in the contract, have been transferred from the lessor to the lessee. Adoption of ASC 842 resulted in the recording of additional lease assets and lease liabilities of approximately $0.2 million as of April 1, 2019. There was no impact to retained earnings. The adoption of ASC 842 did not materially impact Orion’s consolidated results of operations and had no impact on Orion’s cash flows. Orion has updated its processes and controls necessary for implementing ASC 842, including the increased footnote disclosure requirements. |
REVENUE
REVENUE | 9 Months Ended |
Dec. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
REVENUE | Changes in Accounting Policies Orion adopted ASC 606 and ASC 340-40 (the “new standards”) as of April 1, 2018 for contracts with customers that were not fully complete as of April 1, 2018 using the modified retrospective transition method. The cumulative effect of initially applying the new standards was recorded as an immaterial adjustment to the opening balance of retained deficit within Orion’s Condensed Consolidated Statement of Shareholders’ Equity. General Information Orion generates revenues primarily by selling commercial LED lighting fixtures and components, including controls and integrated IoT capabilities, and by installing these fixtures in its customer’s facilities on a turnkey basis via a dedicated installation and support team. Orion recognizes revenue in accordance with the guidance in ASC 606 when control of the goods or services being provided (which Orion refers to as a performance obligation) is transferred to a customer at an amount that reflects the consideration that management expects to receive in exchange for those goods or services. Prices are generally fixed at the time of order confirmation. The amount of expected consideration includes estimated deductions and early payment discounts calculated based on historical experience, customer rebates based on agreed upon terms applied to actual and projected sales levels over the rebate period, and any amounts paid to customers in conjunction with fulfilling a performance obligation. If there are multiple performance obligations in a contract, the contract’s total sales price is allocated to each individual performance obligation based on their relative standalone selling price. A performance obligation’s standalone selling price is the price at which Orion would sell such promised good or service separately to a customer. Orion uses an observable price to determine the stand-alone selling price for separate performance obligations or a cost-plus margin approach when one is not available. The cost-plus margin approach is used to determine the stand-alone selling price for the installation performance obligation and is based on average historical installation margin. Revenue derived from customer contracts which include only performance obligation(s) for the sale of lighting fixtures and components is classified as Product revenue in the Condensed Consolidated Statements of Operations. The revenue for these transactions is recorded at the point in time when management believes that the customer obtains control of the products, generally either upon shipment or upon delivery to the customer’s facility. This point in time is determined separately for each contract and requires judgment by management of the contract terms and the specific facts and circumstances concerning the transaction. Revenue from a customer contract which includes both the sale of fixtures and the installation of such fixtures (which Orion refers to as a turnkey project) is allocated between each lighting fixture and the installation performance obligation based on relative standalone selling prices. Revenue from turnkey projects that is allocated to the sale of the lighting fixtures is recorded at the point in time when management believes the customer obtains control of the product(s) and is reflected in Product revenue. This point in time is determined separately for each customer contract based upon the terms of the contract and the nature and extent of Orion’s control of the light fixtures during the installation. Product revenue associated with turnkey projects can be recorded (a) upon shipment or delivery, (b) subsequent to shipment or delivery and upon customer payments for the light fixtures, (c) when an individual light fixture is installed and working correctly, or (d) when the customer acknowledges that the entire installation project is substantially complete. Determining the point in time when a customer obtains control of the lighting fixtures in a turnkey project can be a complex judgment and is applied separately for each individual light fixture included in a contract. In making this judgment, management considers the timing of various factors, including, but not limited to, those detailed below: • when there is a legal transfer of ownership; • when the customer obtains physical possession of the products; • when the customer starts to receive the benefit of the products; • the amount and duration of physical control that Orion maintains on the products after they are shipped to, and received at, the customer’s facility; • whether Orion is required to maintain insurance on the lighting fixtures when they are in transit and after they are delivered to the customer’s facility; • when each light fixture is physically installed and working correctly; • when the customer formally accepts the product; and • when Orion receives payment from the customer for the light fixtures. Revenue from turnkey projects that is allocated to the single installation performance obligation is reflected in Service revenue. Service revenue is recorded over-time as Orion fulfills its obligation to install the light fixtures. Orion measures its performance toward fulfilling its performance obligations for installations using an output method that calculates the number of light fixtures removed and installed as of the measurement date in comparison to the total number of light fixtures to be removed or installed under the contract. Most products are manufactured in accordance with Orion’s standard specifications. However, some products are manufactured to a customer’s specific requirements with no alternative use to Orion. In such cases, and when Orion has an enforceable right to payment, Product revenue is recorded on an over-time basis measured using an input methodology that calculates the costs incurred to date as compared to total expected costs. There was no over-time revenue related to custom products recognized in the three and nine months ended December 31, 2019 or December 31, 2018. Orion also records revenue in conjunction with several limited power purchase agreements (“PPAs”) still outstanding. Those PPAs are supply-side agreements for the generation of electricity. Orion’s last PPA expires in 2031. Revenue associated with the sale of energy generated by the solar facilities under these PPAs is within the scope of ASC 606. Revenues are recognized over-time and are equal to the amount billed to the customer, which is calculated by applying the fixed rate designated in the PPAs to the variable amount of electricity generated each month. This approach is in accordance with the “right to invoice” practical expedient provided for in ASC 606. Orion also recognizes revenue upon the sale to third parties of tax credits received from operating the solar facilities and from amortizing a grant received from the federal government during the period starting when the power generating facilities were constructed until the expiration of the PPAs; these revenues are not derived from contracts with customers and therefore not under the scope of ASC 606. When shipping and handling activities are performed after a customer obtains control of the product, Orion has elected to treat shipping and handling costs as an activity necessary to fulfill the performance obligation to transfer product to the customer and not as a separate performance obligation. Any shipping and handling costs charged to customers are recorded in Product revenue. Shipping and handling costs are accrued and included in Cost of product revenue. See Note 10, Accrued Expenses and Other for a discussion of Orion’s accounting for the warranty it provides to customers for its products and services. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenues) basis. Contract Fulfillment Costs Costs associated with product sales are accumulated in inventory as the fixtures are manufactured and are transferred to Cost of product revenue at the time revenue is recorded. See Note 5, Inventories, Net. Costs associated with installation sales are expensed as incurred. Disaggregation of Revenue Orion’s Product revenue includes revenue from contracts with customers accounted for under the scope of ASC 606 and revenue which is accounted for under other guidance. For the three and nine months ended December 31, 2019, Product revenue included $0.2 million and $1.2 million, respectively, derived from sales-type leases for light fixtures, $ 0.1 and $19 thousand and $0.1 million, respectively, derived from the of federal grants in 2010 and 2011 as reimbursement for a portion of the costs to construct the legacy solar facilities which are not under the scope of ASC 606. For the three and nine months ended December 31, 2018, Product revenue included $1.0 million and $2.1 million, respectively, derived from sales-type leases for light fixtures, $26 thousand and $0.2 million, respectively, derived from the sale of tax credits generated from Orion’s legacy operation for distributing solar energy, and $19 thousand and $0.1 million, respectively, derived from the amortization of federal grants received in 2010 and 2011 as reimbursement for a portion of the costs to construct the legacy solar facilities which are not under the scope of ASC 606. All remaining Product revenue, and all Service revenue, are derived from contracts with customers as defined in ASC 606. The primary end-users of Orion’s lighting products and services are (a) commercial or industrial companies, and (b) the federal government. Commercial or industrial end-users obtain Orion products and services through turnkey project sales or by purchasing products either direct from Orion or through distributors or energy service companies ("ESCOs"). Revenues associated with commercial and industrial end-users are included within each of Orion’s segments, dependent on the sales channel. The federal government obtains Orion products and services primarily through turnkey project sales that Orion makes to a select group of contractors who focus on the federal government. Revenues associated with government end-users are primarily included in the Orion Engineered Systems Division segment. See Note 17, Segments, for additional discussion concerning Orion’s reportable segments. The following table provides detail of Orion’s total revenues for the three and nine months ended December 31, 2019 (dollars in thousands): Three Months Ended December 31, 2019 Nine Months Ended December 31, 2019 Product Services Total Product Services Total Revenue from contracts with customers: Lighting revenues, by end user Federal government $ 78 $ 68 $ 146 $ 902 $ 366 $ 1,268 Commercial and industrial 25,467 8,314 33,781 91,411 30,805 122,216 Total lighting 25,545 8,382 33,927 92,313 31,171 123,484 Solar energy related revenues 10 — 10 50 — 50 Total revenues from contracts with customers 25,555 8,382 33,937 92,363 31,171 123,534 Revenue accounted for under other guidance 312 — 312 1,415 — 1,415 Total revenue $ 25,867 $ 8,382 $ 34,249 $ 93,778 $ 31,171 $ 124,949 Three Months Ended December 31, 2018 Nine Months Ended December 31, 2018 Product Services Total Product Services Total Revenue from contracts with customers: Lighting revenues, by end user Federal government $ 894 $ 396 $ 1,290 $ 1,009 $ 396 $ 1,405 Commercial and industrial 11,976 1,943 13,919 34,987 4,565 39,552 Total lighting 12,870 2,339 15,209 35,996 4,961 40,957 Solar energy related revenues 8 — 8 46 — 46 Total revenues from contracts with customers 12,878 2,339 15,217 36,042 4,961 41,003 Revenue accounted for under other guidance 1,074 — 1,074 2,308 — 2,308 Total revenue $ 13,952 $ 2,339 $ 16,291 $ 38,350 $ 4,961 $ 43,311 Cash Flow Considerations Customer payments for material-only orders are due shortly after shipment. Turnkey projects where the end-user is a commercial or industrial company typically span between one week to three months. Customer payment requirements for these projects vary by contract. Some contracts provide for customer payments for products and services as they are delivered, other contracts specify that the customer will pay for the project in its entirety upon completion of the installation. Turnkey projects where the end-user is the federal government typically span a three to six-month period. The contracts for these sales often provide for monthly progress payments equal to ninety percent (90%) of the value provided by Orion during the month. Orion provides long-term financing to one customer who frequently engages Orion in large turnkey projects that span between three and nine months. The customer executes an agreement providing for monthly payments of the contract price, plus interest, over a five-year period. The total transaction price in these contracts is allocated between product and services in the same manner as all other turnkey projects. The portion of the transaction associated with the installation is accounted for consistently with all other installation related performance obligations. The portion of the transaction associated with the sale of the multiple individual light fixtures is accounted for as sales-type leases in accordance with the guidance for leases. Revenues associated with the sales-type leases are included in Product revenue and recorded for each fixture separately based on the customer’s monthly acknowledgment that specified fixtures have been installed and are operating as specified. The payments associated with these transactions that are due during the twelve months subsequent to December 31, 2019 are included in Accounts receivable, net in Orion’s Condensed Consolidated Balance Sheets. The remaining amounts due that are associated with these transactions are included in Other long-term assets in Orion’s Condensed Consolidated Balance Sheets. The customer’s monthly payment obligation commences after completion of the turnkey project. Orion generally sells the receivable from the customer to an independent financial institution either during, or shortly after completion of, the installation period. Upon execution of the receivables purchase / sales agreement, all amounts due from the customer are included in Revenues earned but not billed on Orion’s Condensed Consolidated Balance Sheets until cash is received from the financial institution. The financial institution releases funds to Orion based on the customer’s monthly acknowledgment of the progress Orion has achieved in fulfilling its installation obligation. Orion provides the progress certifications to the financial institution one month in arrears. The total amount received from the sales of these receivables during the three and nine months ended December 31, 2019, was $0.7 million and $4.4 million, respectively. Orion’s losses on these sales were $39 thousand and $0.1 million for the three and nine months ended December 31, 2019, respectively and are included in Interest expense in the Condensed Consolidated Statements of Operations. The total amount received from the sales of these receivables during the three and nine months ended December 31, 2018 was $1.5 million and $4.4 million, respectively. Orion’s losses on these sales were $29 thousand and $0.2 million for the three and nine months ended December 31, 2018, respectively and are included in Interest expense in the Condensed Consolidated Statement of Operations. Practical Expedients and Exemptions Orion expenses sales commissions when incurred because the amortization period is one year or less. These costs are recorded within Sales and marketing expense. There are no other capitalizable costs associated with obtaining contracts with customers. Orion’s performance obligations related to lighting fixtures typically do not exceed nine months in duration. As a result, Orion has elected the practical expedient that provides an exemption to the disclosure requirements regarding information about value assigned to remaining performance obligations on contracts that have original expected durations of one year or less. Orion has also adopted the practical expedient that provides an exemption to the disclosure requirement of the value assigned to performance obligations associated with contracts that were not complete as of April 1, 2018. Orion also elected the practical expedient that permits companies to not disclose quantitative information about the future revenue when revenue is recognized as invoices are issued to customers for services performed. Other than the turnkey projects which result in sales-type leases discussed above, Orion generally receives full payment for satisfied performance obligations in less than one year. Accordingly, Orion does not adjust revenues for the impact of any potential significant financing component as permitted by the practical expedients provided in ASC 606. Contract Balances A receivable is recognized when Orion has an enforceable right to payment in accordance with contract terms and an invoice has been issued to the customer. Payment terms on invoiced amounts are typically 30 days from the invoice date. Revenue earned but not billed represents revenue that has been recognized in advance of billing the customer, which is a common practice in Orion turnkey contracts. Once Orion has an unconditional right to consideration under a turnkey contract, Orion typically bills the customer accordingly and reclassifies the amount to Accounts receivable, net. Revenue earned but not billed as of December 31, 2019 and March 31, 2019 includes $0.1 million and $0.7 million, respectively, which was not derived from contracts with customers and therefore not classified as a contract asset as defined by the new standards. Deferred revenue, current as of December 31, 2019 and March 31, 2019 includes $9 thousand and $48 thousand, respectively, of contract liabilities which represented consideration received from customers prior to the point that Orion has fulfilled the promises included in a performance obligation and recorded revenue. Deferred revenue, long-term consists of the unamortized portion of the funds received from the federal government in 2010 and 2011 as reimbursement for the costs to build the two facilities related to the PPAs. As the transaction is not considered a contract with a customer, this value is not a contract liability as defined by the new standards. The following chart shows the balance of Orion’s receivables arising from contracts with customers, contract assets and contract liabilities as of December 31, 2019 and March 31, 2019 (dollars in thousands): December 31, 2019 March 31, 2019 Accounts receivable, net $ 15,224 $ 14,804 Contract assets $ 693 $ 3,005 Contract liabilities $ 9 $ 48 There were no significant changes in the contract assets outside of standard reclassifications to Accounts receivable, net upon billing. There were no significant changes to contract liabilities. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 9 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE, NET | As of December 31, 2019, and March 31, 2019, Orion's Accounts receivable and Allowance for doubtful accounts balances were as follows (dollars in thousands): December 31, 2019 March 31, 2019 Accounts receivable, gross $ 15,252 $ 15,011 Allowance for doubtful accounts (28 ) (207 ) Accounts receivable, net $ 15,224 $ 14,804 |
INVENTORIES, NET
INVENTORIES, NET | 9 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | As of December 31, 2019, and March 31, 2019, Orion's Inventory balances were as follows (dollars in thousands): Cost Excess and Obsolescence Reserve Net As of December 31, 2019 Raw materials and components $ 8,570 $ (1,104 ) $ 7,466 Work in process 765 (624 ) 141 Finished goods 5,780 (1,152 ) 4,628 Total $ 15,115 $ (2,880 ) $ 12,235 As of March 31, 2019 Raw materials and components $ 9,161 $ (1,393 ) $ 7,768 Work in process 1,010 (269 ) 741 Finished goods 6,056 (1,162 ) 4,894 Total $ 16,227 $ (2,824 ) $ 13,403 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Dec. 31, 2019 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 6 — PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist primarily of debt issue costs, prepaid subscription fees, prepaid insurance premiums, and sales tax receivable. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | As of December 31, 2019, and March 31, 2019, Property and equipment, net, included the following (dollars in thousands): December 31, 2019 March 31, 2019 Land and land improvements $ 433 $ 433 Buildings and building improvements 9,467 9,245 Furniture, fixtures and office equipment 7,297 7,238 Leasehold improvements 324 324 Equipment leased to customers 4,997 4,997 Plant equipment 12,757 12,211 Construction in Progress 29 43 Gross property and equipment 35,304 34,491 Less: accumulated depreciation (23,384 ) (22,481 ) Total property and equipment, net $ 11,920 $ 12,010 Orion recorded depreciation expense of $0.3 and $0.9 million for the three and nine months ended December 31, 2019 and $0.3 and $1.0 million for the three and nine months ended December 31, 2018, respectively. Orion evaluates its long-lived assets for impairment whenever events or circumstances indicate that the carrying value of the assets recognized in its financial statements may not be recoverable. Orion has long-lived assets associated with its legacy solar business and recognizes revenue from the sale to third parties of tax credits received from operating these solar assets. There is currently legislation pending which may decrease the future cash flows associated with the sale of these tax credits. Depending on the result of this pending legislation change, Orion may record a non-cash impairment charge in a future period . |
LEASES
LEASES | 9 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASES | NOTE 8 — LEASES From time to time, Orion leases assets from third parties. Orion also leases certain assets to third parties. Effective April 1, 2019, leases are accounted for, and reported upon, following the requirements of ASC 842, Leases. Previously, leases were accounted for, and reported upon, following the requirements of ASC 840, Leases. For Orion, the most significant difference between ASC 840 and ASC 842 is the requirement that it recognize right-of-use (“ROU”) assets and lease liabilities on the balance sheet whenever it leases assets from a third party. Previously, under ASC 840, only assets leased from third parties that meet certain requirements, referred to as finance leases, were recorded on Orion’s balance sheet. Previously, the financial impact of all other leases, referred to as operating leases, was limited to Orion’s results of operations. Whether it is the lessee or the lessor, Orion’s determination of whether a contract includes a lease, and assessing how the lease should be accounted for, is a matter of judgment based on whether the risks and rewards, as well as substantive control of the assets specified in the contract, have been transferred from the lessor to the lessee. The judgement considers matters such as whether the assets are transferred from the lessor to the lessee at the end of the contract, the term of the agreement in relation to the asset’s remaining economic useful life, and whether the assets are of such a specialized nature that the lessor will not have an alternative use for such assets at the termination of the agreement. Other matters requiring judgement are the lease term when the agreement includes renewal or termination options and the interest rate used when initially determining the ROU asset and lease liability. ROU assets represent Orion’s right to use an underlying asset for the lease term and lease liabilities represent Orion’s obligation to make lease payments arising from the lease. Under ASC 842, both finance and operating lease ROU assets and lease liabilities for leases with initial terms in excess of 12 months are recognized at the commencement date based on the present value of lease payments over the lease term. When available, Orion uses the implicit interest rate in the lease when completing this calculation. However, as most of Orion’s operating lease agreements generating ROU assets do not provide the implicit rate, Orion’s incremental borrowing rate under its line of credit, adjusted for differences in duration and the relative collateral value in relation to the payment obligation, at the commencement of the lease is generally used in this calculation. The lease term includes options to extend or renew the agreement, or for early termination of the agreement, when it is reasonably certain that Orion will exercise such option. ROU assets are depreciated using the straight-line method over the lease term. Orion recognizes lease expense for leases with an initial term of 12 months or less, referred to as short term leases, on a straight-line basis over the lease term. One of Orion’s frequent customers purchases products and installation services under agreements that provide for monthly payments, at a fixed monthly amount, of the contract price, plus interest, typically over a five-year period. While Orion retains ownership of the light fixtures during the financing period, the transaction terms and the underlying economics associated with used lighting fixtures results in Orion essentially ceding ownership of the lighting fixtures to the customer after completion of the agreement. The portions of the transaction associated with the sale of the light fixtures is accounted for as a sales-type lease. The total transaction price in these contracts is allocated between the lease and non-lease components in the same manner as the total transaction price of other turnkey projects containing lighting fixtures and installation services. Orion leases portions of its corporate headquarters to third parties; all such agreements have been, and continue to be, classified as operating leases under the applicable authoritative accounting guidance. The assets being leased continue to be included in Property and equipment, net. Lease payments earned are recorded as a reduction in administrative expenses. Assets Orion Leases from Other Parties On March 31, 2016, Orion entered into a purchase and sale agreement with a third party to sell and leaseback Orion's primary manufacturing and distribution facility in Manitowoc, WI for gross cash proceeds of $2.6 million. The transaction closed on June 30, 2016. Pursuant to the Lease Agreement, Orion is leasing approximately 196,000 square feet. Orion's monthly payment under this lease is approximately $38 thousand. Orion is responsible for the costs of insurance and utilities for its portion of the facility. These costs are considered variable lease costs in the quantitative disclosures below. On March 22, 2018, both parties agreed to extend the lease until December 31, 2020 with no change in payment terms. The lease agreement provided the lessor the right to terminate the lease agreement at any time with twelve months’ notice to Orion. As a result, the agreement was classified as a short-term lease. On January 31, 2020, the existing lease was terminated and replaced with a new ten-year lease, with an option for Orion to terminate after six years. Orion is in the process of performing its assessment and analysis of the new lease agreement, and believes that the new lease will result in a material right-of-use-asset and lease liability. In February 2014, Orion entered into a multi-year lease agreement for use of approximately 10,500 square feet of office space in a multi-use office building in Jacksonville Florida. The lease has since been extended and presently terminates on June 30, 2020. The agreement was classified as an operating lease and represents the single largest operating asset established upon the adoption of ASC 842. Orion has leased other assets from third parties, principally office and production equipment. The terms of our other leases vary from contract to contract and expire at various dates through 2020. A summary of Orion’s assets leased from third parties follows (dollars in thousands): Balance sheet classification December 31, 2019 Assets Operating lease assets Other long-term assets $ 79 Liabilities Current liabilities Operating lease liabilities Accrued expenses and other 65 Non-current liabilities Operating lease liabilities Other long-term liabilities 4 Total lease liabilities $ 69 Orion had operating lease costs of $0.1 million and $0.4 million for the three and nine months ended December 31, 2019. Assets Orion Leases to Other Parties Orion provides long-term financing to one customer who frequently engages Orion in large turnkey projects that span between three and nine months. The customer executes an agreement providing for monthly payments, at a fixed monthly amount, of the contract price, plus interest, over typically a five-year period. The total transaction price in these contracts is allocated between product and services in the same manner as all other turnkey projects. The portion of the transaction associated with the installation is accounted for consistently with all other installation related performance obligations under ASC 606. While Orion retains ownership of the light fixtures during the financing period, the transaction terms and the underlying economics associated with used lighting fixtures results in Orion essentially ceding ownership of the lighting fixtures to the customer after completion of the agreement. Therefore, the portions of the transaction associated with the sale of the multiple individual light fixtures is accounted for as a sales-type lease under ASC 842. Revenues, and production and acquisition costs, associated with sales-type leases are included in Product revenue and Costs of product revenues in the Condensed Consolidated Statement of Operations. These amounts are recorded for each fixture separately based on the customer’s monthly acknowledgment that specified fixtures have been installed and are operating as specified. The execution of the acknowledgement is considered the commencement date as defined in ASC 842. The following chart shows the amount of revenue and cost of sales arising from sales-type leases during the three and nine months ended December 31, 2019 (dollars in thousands): Three Months Ended Nine Months Ended December 31, 2019 December 31, 2019 Product revenue $ 162,909 $ 1,164,547 Cost of product revenue $ 142,452 $ 1,043,874 The Condensed Consolidated Balance Sheets as of December 31, 2019 includes an immaterial amount related to the net investment in sales-type leases. The Condensed Balance Sheet as of and March 31, 2019 does not include a net investment in sales-type leases as all amounts due from the customer associated with lighting fixtures that were acknowledged to be installed and working correctly prior to period end were transferred to the financing institution prior to the respective balance sheet dates. Other Agreements where Orion is the Lessor Orion has leased unused portions of its corporate headquarters to third parties. The length and payment terms of the leases vary from contract to contract and, in some cases, include options for the tenants to extend the lease terms. Annual lease payments are recorded as a reduction in administrative operating expenses and not material in the nine months ended December 31, 2019. Orion accounts for these transactions as operating leases. |
OTHER INTANGIBLE ASSETS, NET
OTHER INTANGIBLE ASSETS, NET | 9 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
OTHER INTANGIBLE ASSETS, NET | As of December 31, 2019, and March 31, 2019, the components of, and changes in, the carrying amount of Other intangible assets, net, were as follows (dollars in thousands): December 31, 2019 March 31, 2019 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Patents $ 2,736 $ (1,657 ) $ 1,079 $ 2,667 $ (1,529 ) $ 1,138 Licenses 58 (58 ) — 58 (58 ) — Trade name and trademarks 1,008 — 1,008 1,007 — 1,007 Customer relationships 3,600 (3,529 ) 71 3,600 (3,459 ) 141 Developed technology 900 (801 ) 99 900 (717 ) 183 Total $ 8,302 $ (6,045 ) $ 2,257 $ 8,232 $ (5,763 ) $ 2,469 Amortization expense on intangible assets was $0.1 million for the three months ended December 31, 2019 and 2018. Amortization expense on intangible assets was $0.3 million for the nine months ended December 31, 2019 and 2018. As of December 31, 2019, the weighted average remaining useful life of intangible assets was 4.6 years. The estimated amortization expense for the remainder of fiscal 2020, the next five fiscal years and beyond is shown below (dollars in thousands): Fiscal 2020 (period remaining) $ 79 Fiscal 2021 293 Fiscal 2022 196 Fiscal 2023 104 Fiscal 2024 101 Fiscal 2025 92 Thereafter 384 Total $ 1,249 |
ACCRUED EXPENSES AND OTHER
ACCRUED EXPENSES AND OTHER | 9 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
ACCRUED EXPENSES AND OTHER | As of December 31, 2019, and March 31, 2019, Accrued expenses and other included the following (dollars in thousands): December 31, 2019 March 31, 2019 Compensation and benefits $ 2,042 $ 1,212 Sales tax 557 713 Accrued project costs 1,677 3,293 Legal and professional fees 47 356 Warranty 502 282 Sales returns reserve 145 141 Credits due to customers 929 987 Other accruals 342 426 Total $ 6,241 $ 7,410 Orion generally offers a limited warranty of one to ten years on its lighting products, including the pass through of standard warranties offered by major original equipment component manufacturers. The manufacturers’ warranties cover lamps, ballasts, LED modules, chips and drivers, control devices, and other fixture related items, 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): For the Three Months Ended December 31, For the Nine Months Ended December 31, 2019 2018 2019 2018 Beginning of period $ 803 $ 721 $ 657 $ 673 Reclassification on adoption of ASC 606 — — — 73 Accruals 157 129 503 177 Warranty claims (net of vendor reimbursements) (51 ) (67 ) (251 ) (140 ) End of period $ 909 $ 783 $ 909 $ 783 |
NET INCOME (LOSS) PER COMMON SH
NET INCOME (LOSS) PER COMMON SHARE | 9 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER COMMON SHARE | NOTE 11 — NET INCOME (LOSS) PER COMMON SHARE For the three and nine months ended December 31, 2018, 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. Basic and Diluted net income (loss) per common share was calculated based upon the following: For the Three Months Ended December 31, For the Nine Months Ended December 31, 2019 2018 2019 2018 Numerator: Net income (loss) (in thousands) $ 2,304 $ (662 ) $ 12,993 $ (5,792 ) Denominator: Weighted-average common shares outstanding 30,243,865 29,568,986 30,053,330 29,376,959 Weighted-average common shares and common share equivalents outstanding 30,824,078 29,568,986 30,862,088 29,376,959 Net income (loss) per common share: Basic $ 0.08 $ (0.02 ) $ 0.43 $ (0.20 ) Diluted $ 0.07 $ (0.02 ) $ 0.42 $ (0.20 ) Orion uses the treasury stock method to calculate the effect of outstanding dilutive equity incentive instruments, which requires Orion to compute total proceeds as the sum of the amount the employee must pay upon exercise of the award and the amount of unearned stock-based compensation costs attributable to future services. Equity incentive instruments for which the total employee proceeds from exercise exceed the average fair value of the same equity incentive instrument over the period have an anti-dilutive effect on net income per common share during periods with net income, and accordingly, Orion excludes them from the calculation. Anti-dilutive equity instruments of approximately 203,734 and 220,534 common shares were excluded from the computation of diluted net income per common share for the three months and nine months ended December 31, 2019 respectively. Due to the net loss incurred during the three and nine months ended December 31, 2018, the assumed exercise of all equity incentive instruments was anti-dilutive and, therefore, was not included in the diluted loss per common share calculation for those periods. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 12 — LONG-TERM DEBT Long-term debt consisted of the following (dollars in thousands): December 31, 2019 March 31, 2019 Revolving credit facility $ 829 $ 9,202 Equipment debt obligations 109 177 Total long-term debt 938 9,379 Less current maturities (56 ) (96 ) Long-term debt, less current maturities $ 882 $ 9,283 Revolving Credit Agreement On October 26, 2018, Orion and its subsidiaries entered into a new secured revolving Business Financing Agreement with Western Alliance Bank, as lender (the “Credit Agreement”). On June 3, 2019, Orion and certain of its subsidiaries entered into an amendment (the “First Amendment”) to the Credit Agreement, which increased the maximum borrowing base credit available for certain of the customer receivables included in Orion’s borrowing base and provided for a borrowing base credit of up to $3.0 million based on inventory, in each case, subject to certain conditions. On August 2, 2019, Orion and certain of its subsidiaries entered into a second amendment (the “Second Amendment”) to the Credit Agreement, which established a rent reserve in an amount equal to three months’ rent payable at any leased location where Orion maintains inventory included in its borrowing base and provided for a reduction of the borrowing base credit that Orion may receive for inventory if Orion defaults under the lease for any such location. As of December 31, 2019, this rent reserve equaled $0.1 million. On November 21, 2019, Orion and certain of its subsidiaries entered into a third amendment (the “Third Amendment”) to the Credit Agreement, which extended the maturity date from October 26, 2020 to October 26, 2021; increased the sublimit under the Credit Agreement for advances under business credit cards from $1.5 million to $3 million; created a new $2 million sublimit permitting entry into foreign currency forward contracts with the lender; expanded the Company’s ability to make capital expenditures and incur other debt from time to time; and permitted the lender to amend the financial covenant included in the Credit Agreement (which requires the maintenance of a certain amount of unrestricted cash on deposit with the lender at the end of each month) upon receipt of the Company’s annual projections. The Credit Agreement, as amended provides for a revolving credit facility (the “Credit Facility”) that matures on October 26, 2021. Borrowings under the Credit Facility are currently limited to $20.15 million, subject to a borrowing base requirement based on eligible receivables and inventory. The Credit Agreement includes a $2.0 million sublimit for the issuance of letters of credit. As of December 31, 2019, Orion’s borrowing base was $14.7 million, and Orion had $0.8 million in borrowings outstanding which were included in non-current liabilities in the accompanying Condensed Consolidated Balance Sheets. Orion had no outstanding letters of credit leaving total borrowing availability of $13.9 million. The Credit Agreement is secured by a security interest in substantially all of Orion's and its subsidiaries’ personal property. Borrowings under the Credit Agreement generally bear interest at floating rates based upon the prime rate (but not less than 5.00% per year) plus an applicable margin determined by reference to Orion’s quick ratio (defined as the aggregate amount of unrestricted cash, unrestricted marketable securities and, with certain adjustments, receivables convertible into cash divided by total current liabilities, including the obligations under the Credit Agreement). As of December 31, 2019, the applicable interest rate was 5.25%. Among other fees, Orion is required to pay an annual facility fee equal to 0.45% of the credit limit under the Credit Agreement, which was paid at commencement (October 26, 2018) and is due on each anniversary thereof. The Credit Agreement requires Orion to maintain nine months’ of “RML” as of the end of each month. For purposes of the Credit Agreement, RML is defined as, as of the applicable determination date, unrestricted cash on deposit with the lender plus availability under the Credit Agreement divided by an amount equal to, for the applicable trailing three-month period, consolidated net profit before tax, plus depreciation expense, amortization expense and stock-based compensation, minus capital lease principal payments, tested as of the end of each month. As of December 31, 2019, Orion was in compliance with this RML requirement. The Credit Agreement also contains customary events of default and other covenants, including certain restrictions on Orion’s ability to incur additional indebtedness, consolidate or merge, enter into acquisitions, pay any dividend or distribution on Orion’s stock, redeem, retire or purchase shares of Orion’s stock, make investments or pledge or transfer assets. If an event of default under the Credit Agreement occurs and is continuing, then the lender may cease making advances under the Credit Agreement and declare any outstanding obligations under the Credit Agreement to be immediately due and payable. In addition, if Orion becomes the subject of voluntary or involuntary proceedings under any bankruptcy or similar law, then any outstanding obligations under the Credit Agreement will automatically become immediately due and payable. Equipment Debt Obligations In June 2015, Orion entered into an agreement with a financing company in the principal amount of $0.4 million to fund the purchase of certain equipment. The debt is secured by the related equipment. The debt bears interest at a rate of 5.94% and matures in June 2020. In February 2019, Orion entered into additional debt agreements with a financing company in the principal amount of $44 thousand and $30 thousand to fund the purchase of certain equipment. The debts are secured by the related equipment. The debts bear interest at a rate of 6.43% and 8.77%, respectively, and both debts mature in January 2024. 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 Orion Throughput Agreement (“OTA”) finance program that were previously funded under a different OTA credit agreement. The loan amount was secured by the OTA-related equipment and the expected future monthly payments under the supporting 25 individual OTA customer contracts. The borrowing agreement bore an interest rate of 8.36% and matured in April 2018. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13 — INCOME TAXES Orion’s income tax provision was determined by applying an estimated annual effective tax rate based upon the facts and circumstances known to book income (loss) before income tax, adjusting for discrete items. Orion’s actual effective tax rate is adjusted each interim period, as appropriate, for changes in facts and circumstances. For the three-month period ended December 31, 2019 and 2018, Orion recorded income tax expense of $39 thousand and $0, respectively, using this methodology. For the nine-month period ended December 31, 2019 and 2018, Orion recorded income tax expense of $66 thousand and $26 thousand, respectively, using this methodology. As of December 31, 2019 and March 31, 2019 Orion had a full valuation allowance recorded against its deferred tax assets. 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 valuation allowance would increase income in the period such determination is made. Uncertain Tax Positions As of December 31, 2019, Orion’s 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 long-term liabilities 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 included in the unrecognized tax benefits. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 — COMMITMENTS AND CONTINGENCIES Litigation Orion is subject to various claims and legal proceedings arising in the ordinary course of business. Orion does not believe the final resolution of any of such claims or legal proceedings will have a material adverse effect on Orion’s future results of operations or financial condition. State Tax Assessment During fiscal 2018, Orion was notified of a pending sales and use tax audit by the Wisconsin Department of Revenue for the period covering April 1, 2013 through March 31, 2017. Although the final resolution of Orion's sales and use tax audit is uncertain, the ultimate disposition of this matter is not expected to have a material adverse effect on Orion's Condensed Consolidated Balance Sheets, statements of operations, or liquidity. During fiscal 2019, Orion was notified of a pending sales and use tax audit by the California Department of Tax and Fee Administration for the period covering April 1, 2015 through March 31, 2018. During the previous quarter, the sales and use tax audit was finalized. The ultimate disposition of this matter did not have a material adverse effect on the Orion's Condensed Consolidated Balance Sheets, statements of operations, or liquidity. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Dec. 31, 2019 | |
Stockholders Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 15 — SHAREHOLDERS’ EQUITY Shareholder Rights Plan On January 3, 2019, Orion entered into Amendment No. 1 to the Rights Agreement, which amended the Rights Agreement dated as of January 7, 2009 and extended its terms by three years to January 7, 2022. Under the amendment, each common share purchase right (a “Right”), if exercisable, will initially represent the right to purchase from Orion, one share of Orion’s common stock, no par value per share, for a purchase price of $7.00 per share. The Rights will not be exercisable (and will be transferable only with Orion’s common stock) until a “Distribution Date” occurs (or the Rights are earlier redeemed or expire). A Distribution Date generally will occur on the earlier of a public announcement that a person or group of affiliated or associated persons (“Acquiring Person”) has acquired beneficial ownership of 20% or more of Orion’s outstanding common stock (“Shares Acquisition Date”) or 10 business days after the commencement of, or the announcement of an intention to make, a tender offer or exchange offer that would result in any such person or group of persons acquiring such beneficial ownership. If a person becomes an Acquiring Person, holders of Rights (except as otherwise provided in the Rights Agreement) will have the right to receive upon exercise that number of shares of Orion’s common stock having a market value of two times the then-current purchase price, and all Rights beneficially owned by an Acquiring Person, or by certain related parties or transferees, will be null and void. If, after a Shares Acquisition Date, Orion is acquired in a merger or other business combination transaction or 50% or more of its consolidated assets or earning power are sold, proper provision will be made so that each holder of a Right (except as otherwise provided in the Rights Agreement) will thereafter have the right to receive upon exercise that number of shares of the acquiring company’s common stock which at the time of such transaction will have a market value of two times the then-current purchase price. Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of Orion. At any time prior to a person becoming an Acquiring Person, the Board of Directors of Orion may redeem the Rights in whole, but not in part, at a price of $0.001 per Right. Unless they are extended or earlier redeemed or exchanged, the Rights will expire on January 7, 2022. Employee Stock Purchase Plan In August 2010, Orion’s Board of Directors approved a non-compensatory employee stock purchase plan, or ESPP. In the three months ended December 31, 2019, Orion issued 666 shares under the ESPP plan at a closing market price of $3.35. Shares Issued Under ESPP Plan Closing Market Price Quarter Ended June 30, 2019 613 2.97 Quarter Ended September 30, 2019 570 2.85 Quarter Ended December 31, 2019 666 3.35 Total issued in fiscal 2020 1,849 $ 2.85 - 3.35 |
STOCK OPTIONS AND RESTRICTED SH
STOCK OPTIONS AND RESTRICTED SHARES | 9 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
STOCK OPTIONS AND RESTRICTED SHARES | NOTE 16 — STOCK OPTIONS AND RESTRICTED SHARES At Orion’s 2019 annual meeting of shareholders held on August 7, 2019, Orion’s shareholders approved the Orion Energy Systems, Inc. 2016 Omnibus Incentive Plan, as amended and restated (the “Amended 2016 Plan”). Approval of the Amended 2016 Plan increased the number of shares of Orion’s common stock available for issuance under the Amended 2016 Plan from 1,750,000 shares to 3,500,000 shares (an increase of 1,750,000 shares); added a minimum vesting period for all awards granted under the Amended 2016 Plan (with limited exceptions); and added a specific prohibition on the payment of dividends and dividend equivalents on unvested awards. The Amended 2016 Plan authorizes grants of equity-based and incentive cash awards to eligible participants designated by the Plan's administrator. Awards under the Amended 2016 Plan may consist of stock options, stock appreciation rights, performance shares, performance units, common stock, restricted stock, restricted stock units, incentive awards or dividend equivalent units. Prior to the 2016 Omnibus Incentive 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 “2004 Plan”). No new awards are being granted under the 2004 Plan; however, all awards granted under the 2004 Plan that are outstanding will continue to be governed by the 2004 Plan. Forfeited awards originally issued under the 2004 Plan are canceled and are not available for subsequent issuance under the 2004 Plan or under the Amended 2016 Plan. The Amended 2016 Plan and the 2004 Plan also permit accelerated vesting in the event of certain changes of control of Orion as well as under other special circumstances. Certain non-employee directors have from time to time elected to receive stock awards in lieu of cash compensation pursuant to elections made under Orion’s non-employee director compensation program. The following amounts of stock-based compensation were recorded (dollars in thousands): For the Three Months Ended December 31, For the Nine Months Ended December 31, 2019 2018 2019 2018 Cost of product revenue $ 1 $ 1 $ 2 $ 3 Cost of service revenue — 1 (1 ) 2 General and administrative 172 185 482 592 Sales and marketing 1 13 1 41 Research and development 11 — 31 1 Total $ 185 $ 200 $ 515 $ 639 During the first nine months of fiscal 2020, Orion had the following activity related to its stock-based compensation: Restricted Shares Stock Options Awards outstanding at March 31, 2019 1,312,593 467,836 Awards granted 279,468 — Awards vested or exercised (669,238 ) (10,000 ) Awards forfeited (17,150 ) (19,874 ) Awards outstanding at December 31, 2019 905,673 437,962 Per share price on grant date $ 3.02 — As of December 31, 2019, the amount of deferred stock-based compensation expense to be recognized, over a remaining period of 1.6 years, was approximately $1.1 million. |
SEGMENTS
SEGMENTS | 9 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENTS | NOTE 17 — SEGMENTS Orion has the following business segments: Orion Engineered Services Division ("OES"), Orion Distribution Services Division ("ODS"), and Orion U.S. Markets Division ("USM"). The accounting policies are the same for each business segment as they are on a consolidated basis. Orion Engineered Systems Division 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 engineering, design, lighting products and in many cases turnkey solutions for large national accounts, governments, municipalities, schools and other customers. Orion Distribution Services Division The ODS segment focuses on selling lighting products through manufacturer representative agencies and a network of North American broadline electrical distributors and contractors. Orion U.S. Markets Division The USM segment sells commercial lighting systems and energy management systems to the wholesale contractor markets. USM customers include ESCOs and contractors. 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 December 31, For the Three Months Ended December 31, 2019 2018 2019 2018 Segments: Orion Engineered Systems $ 27,275 $ 6,802 $ 3,174 $ 33 Orion Distribution Services 3,634 6,102 (206 ) (236 ) Orion U.S. Markets 3,340 3,387 578 569 Corporate and Other — — (1,108 ) (953 ) $ 34,249 $ 16,291 $ 2,438 $ (587 ) Revenues Operating Income (Loss) For the Nine Months Ended December 31, For the Nine Months Ended December 31, 2019 2018 2019 2018 Segments: Orion Engineered Systems $ 104,369 $ 15,168 $ 15,861 $ (1,944 ) Orion Distribution Services 11,191 20,202 (691 ) (1,082 ) Orion U.S. Markets 9,389 7,941 1,750 793 Corporate and Other — — (3,445 ) (3,240 ) $ 124,949 $ 43,311 $ 13,475 $ (5,473 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 18 — 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. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Dec. 31, 2019 | |
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. |
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 ("SEC"). 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 fiscal year ending March 31, 2020 or other interim periods. The Condensed Consolidated Balance Sheet at March 31, 2019 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, 2019 filed with the SEC on June 5, 2019. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain 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, income taxes, impairment analyses, 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 drivers, chips, ballasts, lamps and other LED components, from multiple suppliers. For the three months ended December 31, 2019, one supplier accounted for 24.0% of total cost of revenue. For the nine months ended December 31, 2019, one supplier accounted for 12.5% of total cost of revenue. For the three months ended December 31, 2018, one supplier accounted for 11.7% of total cost of revenue. For the nine months ended December 31, 2018, no supplier accounted for more than 10.0% of total cost of revenue. For the three months ended December 31, 2019, one customer accounted for 72.3% of total revenue. For the nine months ended December 31, 2019, one customer accounted for 77.3% of total revenue. For the three months ended December 31, 2018, one customer accounted for 11.6% of total revenue. For the nine months ended December 31, 2018, no customer accounted for more than 10.0% of total revenue. As of December 31, 2019, one customer accounted for 63.5% of Accounts receivable. As of March 31, 2019, one customer accounted for 56.2% of Accounts receivable. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Standards On April 1, 2019, Orion adopted Accounting Standards Update 2016-02, and subsequent amendments, which is included in the Accounting Standards Codification (“ASC”) as Topic 842, Leases (“ASC 842”), retrospectively through a cumulative-effect adjustment. Orion elected the package of practical expedients provided for in ASU 842, which among other things, allows companies to carry forward their historical lease classification. Previously, Orion followed the guidance set forth in ASC 840, Leases. For Orion, the most significant difference between ASC 840 and ASC 842 is the requirement that lessees recognize right-of-use assets and liabilities on the balance sheet for the rights and obligations created by long-term operating leases. Previously, the financial impact associated with operating leases was recorded only in Orion’s statement of operations. Determining whether a contract includes a lease, and assessing whether the lease should be accounted for as a finance lease or an operating lease, is a matter of judgment based on whether the risks and rewards, as well as substantive control of the associated assets specified in the contract, have been transferred from the lessor to the lessee. Adoption of ASC 842 resulted in the recording of additional lease assets and lease liabilities of approximately $0.2 million as of April 1, 2019. There was no impact to retained earnings. The adoption of ASC 842 did not materially impact Orion’s consolidated results of operations and had no impact on Orion’s cash flows. Orion has updated its processes and controls necessary for implementing ASC 842, including the increased footnote disclosure requirements. |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Disaggregation of Revenue | The following table provides detail of Orion’s total revenues for the three and nine months ended December 31, 2019 (dollars in thousands): Three Months Ended December 31, 2019 Nine Months Ended December 31, 2019 Product Services Total Product Services Total Revenue from contracts with customers: Lighting revenues, by end user Federal government $ 78 $ 68 $ 146 $ 902 $ 366 $ 1,268 Commercial and industrial 25,467 8,314 33,781 91,411 30,805 122,216 Total lighting 25,545 8,382 33,927 92,313 31,171 123,484 Solar energy related revenues 10 — 10 50 — 50 Total revenues from contracts with customers 25,555 8,382 33,937 92,363 31,171 123,534 Revenue accounted for under other guidance 312 — 312 1,415 — 1,415 Total revenue $ 25,867 $ 8,382 $ 34,249 $ 93,778 $ 31,171 $ 124,949 Three Months Ended December 31, 2018 Nine Months Ended December 31, 2018 Product Services Total Product Services Total Revenue from contracts with customers: Lighting revenues, by end user Federal government $ 894 $ 396 $ 1,290 $ 1,009 $ 396 $ 1,405 Commercial and industrial 11,976 1,943 13,919 34,987 4,565 39,552 Total lighting 12,870 2,339 15,209 35,996 4,961 40,957 Solar energy related revenues 8 — 8 46 — 46 Total revenues from contracts with customers 12,878 2,339 15,217 36,042 4,961 41,003 Revenue accounted for under other guidance 1,074 — 1,074 2,308 — 2,308 Total revenue $ 13,952 $ 2,339 $ 16,291 $ 38,350 $ 4,961 $ 43,311 |
Summary of Contract Assets and Liabilities | The following chart shows the balance of Orion’s receivables arising from contracts with customers, contract assets and contract liabilities as of December 31, 2019 and March 31, 2019 (dollars in thousands): December 31, 2019 March 31, 2019 Accounts receivable, net $ 15,224 $ 14,804 Contract assets $ 693 $ 3,005 Contract liabilities $ 9 $ 48 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accounts Receivable and Allowance for Doubtful Accounts Balances | As of December 31, 2019, and March 31, 2019, Orion's Accounts receivable and Allowance for doubtful accounts balances were as follows (dollars in thousands): December 31, 2019 March 31, 2019 Accounts receivable, gross $ 15,252 $ 15,011 Allowance for doubtful accounts (28 ) (207 ) Accounts receivable, net $ 15,224 $ 14,804 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | As of December 31, 2019, and March 31, 2019, Orion's Inventory balances were as follows (dollars in thousands): Cost Excess and Obsolescence Reserve Net As of December 31, 2019 Raw materials and components $ 8,570 $ (1,104 ) $ 7,466 Work in process 765 (624 ) 141 Finished goods 5,780 (1,152 ) 4,628 Total $ 15,115 $ (2,880 ) $ 12,235 As of March 31, 2019 Raw materials and components $ 9,161 $ (1,393 ) $ 7,768 Work in process 1,010 (269 ) 741 Finished goods 6,056 (1,162 ) 4,894 Total $ 16,227 $ (2,824 ) $ 13,403 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | As of December 31, 2019, and March 31, 2019, Property and equipment, net, included the following (dollars in thousands): December 31, 2019 March 31, 2019 Land and land improvements $ 433 $ 433 Buildings and building improvements 9,467 9,245 Furniture, fixtures and office equipment 7,297 7,238 Leasehold improvements 324 324 Equipment leased to customers 4,997 4,997 Plant equipment 12,757 12,211 Construction in Progress 29 43 Gross property and equipment 35,304 34,491 Less: accumulated depreciation (23,384 ) (22,481 ) Total property and equipment, net $ 11,920 $ 12,010 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Summary of Assets Leased from Third Parties | A summary of Orion’s assets leased from third parties follows (dollars in thousands): Balance sheet classification December 31, 2019 Assets Operating lease assets Other long-term assets $ 79 Liabilities Current liabilities Operating lease liabilities Accrued expenses and other 65 Non-current liabilities Operating lease liabilities Other long-term liabilities 4 Total lease liabilities $ 69 |
Schedule of Revenue and Cost of Sales Arising from Sales-Type Leases | The following chart shows the amount of revenue and cost of sales arising from sales-type leases during the three and nine months ended December 31, 2019 (dollars in thousands): Three Months Ended Nine Months Ended December 31, 2019 December 31, 2019 Product revenue $ 162,909 $ 1,164,547 Cost of product revenue $ 142,452 $ 1,043,874 |
OTHER INTANGIBLE ASSETS, NET (T
OTHER INTANGIBLE ASSETS, NET (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Components and Changes in Other Intangible Assets | As of December 31, 2019, and March 31, 2019, the components of, and changes in, the carrying amount of Other intangible assets, net, were as follows (dollars in thousands): December 31, 2019 March 31, 2019 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Patents $ 2,736 $ (1,657 ) $ 1,079 $ 2,667 $ (1,529 ) $ 1,138 Licenses 58 (58 ) — 58 (58 ) — Trade name and trademarks 1,008 — 1,008 1,007 — 1,007 Customer relationships 3,600 (3,529 ) 71 3,600 (3,459 ) 141 Developed technology 900 (801 ) 99 900 (717 ) 183 Total $ 8,302 $ (6,045 ) $ 2,257 $ 8,232 $ (5,763 ) $ 2,469 |
Summary of Estimated Amortization Expense | The estimated amortization expense for the remainder of fiscal 2020, the next five fiscal years and beyond is shown below (dollars in thousands): Fiscal 2020 (period remaining) $ 79 Fiscal 2021 293 Fiscal 2022 196 Fiscal 2023 104 Fiscal 2024 101 Fiscal 2025 92 Thereafter 384 Total $ 1,249 |
ACCRUED EXPENSES AND OTHER (Tab
ACCRUED EXPENSES AND OTHER (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Accrued Expenses and Other | As of December 31, 2019, and March 31, 2019, Accrued expenses and other included the following (dollars in thousands): December 31, 2019 March 31, 2019 Compensation and benefits $ 2,042 $ 1,212 Sales tax 557 713 Accrued project costs 1,677 3,293 Legal and professional fees 47 356 Warranty 502 282 Sales returns reserve 145 141 Credits due to customers 929 987 Other accruals 342 426 Total $ 6,241 $ 7,410 |
Changes in Warranty Accrual | Changes in Orion’s warranty accrual (both current and long-term) were as follows (dollars in thousands): For the Three Months Ended December 31, For the Nine Months Ended December 31, 2019 2018 2019 2018 Beginning of period $ 803 $ 721 $ 657 $ 673 Reclassification on adoption of ASC 606 — — — 73 Accruals 157 129 503 177 Warranty claims (net of vendor reimbursements) (51 ) (67 ) (251 ) (140 ) End of period $ 909 $ 783 $ 909 $ 783 |
NET INCOME (LOSS) PER COMMON _2
NET INCOME (LOSS) PER COMMON SHARE (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Summary of the Effect of Net Income (Loss) Per Common Share | For the three and nine months ended December 31, 2018, 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. Basic and Diluted net income (loss) per common share was calculated based upon the following: For the Three Months Ended December 31, For the Nine Months Ended December 31, 2019 2018 2019 2018 Numerator: Net income (loss) (in thousands) $ 2,304 $ (662 ) $ 12,993 $ (5,792 ) Denominator: Weighted-average common shares outstanding 30,243,865 29,568,986 30,053,330 29,376,959 Weighted-average common shares and common share equivalents outstanding 30,824,078 29,568,986 30,862,088 29,376,959 Net income (loss) per common share: Basic $ 0.08 $ (0.02 ) $ 0.43 $ (0.20 ) Diluted $ 0.07 $ (0.02 ) $ 0.42 $ (0.20 ) |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt | Long-term debt consisted of the following (dollars in thousands): December 31, 2019 March 31, 2019 Revolving credit facility $ 829 $ 9,202 Equipment debt obligations 109 177 Total long-term debt 938 9,379 Less current maturities (56 ) (96 ) Long-term debt, less current maturities $ 882 $ 9,283 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Stockholders Equity Note [Abstract] | |
Schedule of ESPP Activity | Shares Issued Under ESPP Plan Closing Market Price Quarter Ended June 30, 2019 613 2.97 Quarter Ended September 30, 2019 570 2.85 Quarter Ended December 31, 2019 666 3.35 Total issued in fiscal 2020 1,849 $ 2.85 - 3.35 |
STOCK OPTIONS AND RESTRICTED _2
STOCK OPTIONS AND RESTRICTED SHARES (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | The following amounts of stock-based compensation were recorded (dollars in thousands): For the Three Months Ended December 31, For the Nine Months Ended December 31, 2019 2018 2019 2018 Cost of product revenue $ 1 $ 1 $ 2 $ 3 Cost of service revenue — 1 (1 ) 2 General and administrative 172 185 482 592 Sales and marketing 1 13 1 41 Research and development 11 — 31 1 Total $ 185 $ 200 $ 515 $ 639 |
Summary of Stock Options Activity | During the first nine months of fiscal 2020, Orion had the following activity related to its stock-based compensation: Restricted Shares Stock Options Awards outstanding at March 31, 2019 1,312,593 467,836 Awards granted 279,468 — Awards vested or exercised (669,238 ) (10,000 ) Awards forfeited (17,150 ) (19,874 ) Awards outstanding at December 31, 2019 905,673 437,962 Per share price on grant date $ 3.02 — |
Summary of Restricted Shares Granted | During the first nine months of fiscal 2020, Orion had the following activity related to its stock-based compensation: Restricted Shares Stock Options Awards outstanding at March 31, 2019 1,312,593 467,836 Awards granted 279,468 — Awards vested or exercised (669,238 ) (10,000 ) Awards forfeited (17,150 ) (19,874 ) Awards outstanding at December 31, 2019 905,673 437,962 Per share price on grant date $ 3.02 — |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | 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 December 31, For the Three Months Ended December 31, 2019 2018 2019 2018 Segments: Orion Engineered Systems $ 27,275 $ 6,802 $ 3,174 $ 33 Orion Distribution Services 3,634 6,102 (206 ) (236 ) Orion U.S. Markets 3,340 3,387 578 569 Corporate and Other — — (1,108 ) (953 ) $ 34,249 $ 16,291 $ 2,438 $ (587 ) Revenues Operating Income (Loss) For the Nine Months Ended December 31, For the Nine Months Ended December 31, 2019 2018 2019 2018 Segments: Orion Engineered Systems $ 104,369 $ 15,168 $ 15,861 $ (1,944 ) Orion Distribution Services 11,191 20,202 (691 ) (1,082 ) Orion U.S. Markets 9,389 7,941 1,750 793 Corporate and Other — — (3,445 ) (3,240 ) $ 124,949 $ 43,311 $ 13,475 $ (5,473 ) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | Apr. 02, 2019USD ($) | Dec. 31, 2019USD ($)CustomerSupplier | Dec. 31, 2018SupplierCustomer | Dec. 31, 2019USD ($)Customerfinancial_instituionSupplier | Dec. 31, 2018SupplierCustomer | Mar. 31, 2019financial_instituion | Apr. 01, 2019USD ($) |
Concentration of Credit Risk and Other Risks and Uncertainties | |||||||
Number of financial institutions | financial_instituion | 2 | ||||||
Number of supplier more than ten percent of cost of revenue | Supplier | 1 | 1 | 1 | 0 | |||
Number of customer more than ten percent of revenue | Customer | 1 | 1 | 1 | 0 | |||
Number of customer more than ten percent of accounts receivable | 1 | 1 | 1 | ||||
Operating lease assets | $ 79,000 | $ 79,000 | |||||
Operating lease liability | $ 69,000 | $ 69,000 | |||||
ASC 842 | |||||||
Concentration of Credit Risk and Other Risks and Uncertainties | |||||||
Operating lease assets | $ 200,000 | ||||||
Operating lease liability | $ 200,000 | ||||||
Retained earnings | $ 0 | ||||||
Cost of revenue | Customer Concentration Risk | Customer One | |||||||
Concentration of Credit Risk and Other Risks and Uncertainties | |||||||
Concentration risk, percentage | 24.00% | 11.70% | 12.50% | ||||
Revenue | Customer Concentration Risk | Customer One | |||||||
Concentration of Credit Risk and Other Risks and Uncertainties | |||||||
Concentration risk, percentage | 72.30% | 11.60% | 77.30% | ||||
Accounts Receivable | Credit Concentration Risk | Customer One | |||||||
Concentration of Credit Risk and Other Risks and Uncertainties | |||||||
Concentration risk, percentage | 63.50% | 56.20% |
REVENUE (Narrative) (Details)
REVENUE (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | |||||
Revenues | $ 33,937,000 | $ 15,217,000 | $ 123,534,000 | $ 41,003,000 | |
Total revenue | 34,249,000 | 16,291,000 | $ 124,949,000 | 43,311,000 | |
Percentage of contract for sale equal monthly progress payments | 90.00% | ||||
Proceeds from sale of revenue earned but not billed | 700,000 | 1,500,000 | $ 4,400,000 | 4,400,000 | |
Gain (loss) on sale of revenue earned but not billed | (39,000) | (29,000) | $ (100,000) | (200,000) | |
Revenue, Practical Expedient, Initial Application and Transition, Nondisclosure of Transaction Price Allocation to Remaining Performance Obligation [true false] | true | ||||
Revenue, Practical Expedient, Financing Component [true false] | true | ||||
Unbilled accounts receivable | 100,000 | $ 100,000 | $ 700,000 | ||
Contract liabilities | 9,000 | $ 48,000 | |||
Change in contract asset reclassified to accounts receivable | 0 | ||||
Change in contract liability | 0 | ||||
Light fixture sales-type lease | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total revenue | 200,000 | 1,000,000 | 1,200,000 | 2,100,000 | |
Sale of tax credits | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total revenue | 100,000 | 26,000 | 200,000 | 200,000 | |
Legacy solar facilities | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total revenue | 19,000 | 19,000 | 100,000 | 100,000 | |
Transferred over time | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
REVENUE (Disaggregation of Reve
REVENUE (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | $ 33,937 | $ 15,217 | $ 123,534 | $ 41,003 |
Revenue accounted for under other guidance | 312 | 1,074 | 1,415 | 2,308 |
Total revenue | 34,249 | 16,291 | 124,949 | 43,311 |
Federal government | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 146 | 1,290 | 1,268 | 1,405 |
Commercial and industrial | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 33,781 | 13,919 | 122,216 | 39,552 |
Total lighting | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 33,927 | 15,209 | 123,484 | 40,957 |
Solar energy related revenues | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 10 | 8 | 50 | 46 |
Product revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 25,555 | 12,878 | 92,363 | 36,042 |
Revenue accounted for under other guidance | 312 | 1,074 | 1,415 | 2,308 |
Total revenue | 25,867 | 13,952 | 93,778 | 38,350 |
Product revenue | Federal government | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 78 | 894 | 902 | 1,009 |
Product revenue | Commercial and industrial | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 25,467 | 11,976 | 91,411 | 34,987 |
Product revenue | Total lighting | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 25,545 | 12,870 | 92,313 | 35,996 |
Product revenue | Solar energy related revenues | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 10 | 8 | 50 | 46 |
Service revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 8,382 | 2,339 | 31,171 | 4,961 |
Revenue accounted for under other guidance | 0 | 0 | 0 | 0 |
Total revenue | 8,382 | 2,339 | 31,171 | 4,961 |
Service revenue | Federal government | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 68 | 396 | 366 | 396 |
Service revenue | Commercial and industrial | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 8,314 | 1,943 | 30,805 | 4,565 |
Service revenue | Total lighting | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | 8,382 | 2,339 | 31,171 | 4,961 |
Service revenue | Solar energy related revenues | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues from contracts with customers | $ 0 | $ 0 | $ 0 | $ 0 |
REVENUE (Summary of Contract As
REVENUE (Summary of Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Revenue From Contract With Customer [Abstract] | ||
Accounts receivable, net | $ 15,224 | $ 14,804 |
Contract assets | 693 | 3,005 |
Contract liabilities | $ 9 | $ 48 |
ACCOUNTS RECEIVABLE, NET (Accou
ACCOUNTS RECEIVABLE, NET (Accounts Receivable and Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Receivables [Abstract] | ||
Accounts receivable, gross | $ 15,252 | $ 15,011 |
Allowance for doubtful accounts | (28) | (207) |
Accounts receivable, net | $ 15,224 | $ 14,804 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Cost | ||
Raw materials and components | $ 8,570 | $ 9,161 |
Work in process | 765 | 1,010 |
Finished goods | 5,780 | 6,056 |
Total | 15,115 | 16,227 |
Reserve | ||
Raw materials and components | (1,104) | (1,393) |
Work in process | (624) | (269) |
Finished goods | (1,152) | (1,162) |
Total | (2,880) | (2,824) |
Net | ||
Raw materials and components | 7,466 | 7,768 |
Work in process | 141 | 741 |
Finished goods | 4,628 | 4,894 |
Total | $ 12,235 | $ 13,403 |
PROPERTY AND EQUIPMENT, NET (Su
PROPERTY AND EQUIPMENT, NET (Summary of Property and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Property and equipment | ||
Gross property and equipment | $ 35,304 | $ 34,491 |
Less: accumulated depreciation | (23,384) | (22,481) |
Total property and equipment, net | 11,920 | 12,010 |
Land and land improvements | ||
Property and equipment | ||
Gross property and equipment | 433 | 433 |
Buildings and building improvements | ||
Property and equipment | ||
Gross property and equipment | 9,467 | 9,245 |
Furniture, fixtures and office equipment | ||
Property and equipment | ||
Gross property and equipment | 7,297 | 7,238 |
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 | 12,757 | 12,211 |
Construction in Progress | ||
Property and equipment | ||
Gross property and equipment | $ 29 | $ 43 |
PROPERTY AND EQUIPMENT, NET (Na
PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | ||||
Depreciation | $ 300 | $ 300 | $ 910 | $ 1,006 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) $ in Thousands | Jan. 31, 2020 | Jun. 30, 2016USD ($)ft² | Mar. 31, 2016USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Feb. 28, 2014ft² |
Lessee Lease Description [Line Items] | ||||||
Lessee, operating lease, option to terminate | The lease agreement provided the lessor the right to terminate the lease agreement at any time with twelve months’ notice to Orion. As a result, the agreement was classified as a short-term lease. | |||||
Lessee, operating lease, existence of option to terminate | true | |||||
Operating lease costs | $ 100 | $ 400 | ||||
Lessor, Operating Lease, Existence of Option to Extend [true false] | true | |||||
Manitowoc, WI | ||||||
Lessee Lease Description [Line Items] | ||||||
Gross cash proceeds from sale leaseback agreement | $ 2,600 | |||||
Area of leased property | ft² | 196,000 | |||||
Monthly rental payments | $ 38 | |||||
Lease term | On March 22, 2018, both parties agreed to extend the lease until December 31, 2020 with no change in payment terms. | |||||
Jacksonville Florida | ||||||
Lessee Lease Description [Line Items] | ||||||
Area of operating leased property | ft² | 10,500 | |||||
Termination of lease | Jun. 30, 2020 | |||||
Subsequent Event | Manitowoc, WI | ||||||
Lessee Lease Description [Line Items] | ||||||
Lease term | On January 31, 2020, the existing lease was terminated and replaced with a new ten-year lease, with an option for Orion to terminate after six years. | |||||
Lease term of agreement | 10 years | |||||
Lessee, sale leaseback, option to terminate, minimum period | 6 years |
LEASES (Summary of Assets Lease
LEASES (Summary of Assets Leased from Third Parties) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Operating lease assets | $ 79 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssetsNoncurrent |
Operating lease liabilities current | $ 65 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent |
Operating lease liabilities non-current | $ 4 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent |
Total lease liabilities | $ 69 |
LEASES (Schedule of Revenue and
LEASES (Schedule of Revenue and Cost of Sales Arising from Sales-Type Leases) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Product revenue | $ 162,909 | $ 1,164,547 |
Cost of product revenue | $ 142,452 | $ 1,043,874 |
OTHER INTANGIBLE ASSETS, NET (S
OTHER INTANGIBLE ASSETS, NET (Summary of Components and Changes in Other Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 8,302 | $ 8,232 |
Accumulated Amortization | (6,045) | (5,763) |
Intangible Assets, Net | 2,257 | 2,469 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,736 | 2,667 |
Accumulated Amortization | (1,657) | (1,529) |
Intangible Assets, Net | 1,079 | 1,138 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 58 | 58 |
Accumulated Amortization | (58) | (58) |
Intangible Assets, Net | 0 | 0 |
Trade name and trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,008 | 1,007 |
Accumulated Amortization | 0 | 0 |
Intangible Assets, Net | 1,008 | 1,007 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,600 | 3,600 |
Accumulated Amortization | (3,529) | (3,459) |
Intangible Assets, Net | 71 | 141 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 900 | 900 |
Accumulated Amortization | (801) | (717) |
Intangible Assets, Net | $ 99 | $ 183 |
OTHER INTANGIBLE ASSETS, NET (N
OTHER INTANGIBLE ASSETS, NET (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 100 | $ 100 | $ 282 | $ 343 |
Weighted average | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, useful life | 4 years 7 months 6 days |
OTHER INTANGIBLE ASSETS, NET _2
OTHER INTANGIBLE ASSETS, NET (Summary of Estimated Amortization Expense) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Finite-Lived Intangible Assets, Estimated Amortization Expense | |
Fiscal 2020 (period remaining) | $ 79 |
Fiscal 2021 | 293 |
Fiscal 2022 | 196 |
Fiscal 2023 | 104 |
Fiscal 2024 | 101 |
Fiscal 2025 | 92 |
Thereafter | 384 |
Total | $ 1,249 |
ACCRUED EXPENSES AND OTHER (Acc
ACCRUED EXPENSES AND OTHER (Accrued Expenses and Other) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Compensation and benefits | $ 2,042 | $ 1,212 |
Sales tax | 557 | 713 |
Accrued project costs | 1,677 | 3,293 |
Legal and professional fees | 47 | 356 |
Warranty | 502 | 282 |
Sales returns reserve | 145 | 141 |
Credits due to customers | 929 | 987 |
Other accruals | 342 | 426 |
Total | $ 6,241 | $ 7,410 |
ACCRUED EXPENSES AND OTHER (Nar
ACCRUED EXPENSES AND OTHER (Narrative) (Details) | 9 Months Ended |
Dec. 31, 2019 | |
Minimum | |
Product Warranty Liability [Line Items] | |
Limited warranty term | 1 year |
Maximum | |
Product Warranty Liability [Line Items] | |
Limited warranty term | 10 years |
ACCRUED EXPENSES AND OTHER (War
ACCRUED EXPENSES AND OTHER (Warranty Accrual) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Movement in Standard Product Warranty Accrual | ||||
Beginning of period | $ 803 | $ 721 | $ 657 | $ 673 |
Reclassification on adoption of ASC 606 | 73 | |||
Accruals | 157 | 129 | 503 | 177 |
Warranty claims (net of vendor reimbursements) | (51) | (67) | (251) | (140) |
End of period | $ 909 | $ 783 | $ 909 | $ 783 |
NET INCOME (LOSS) PER COMMON _3
NET INCOME (LOSS) PER COMMON SHARE (Earnings per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | ||||||||
Net income (loss) | $ 2,304 | $ 6,721 | $ 3,968 | $ (662) | $ (2,438) | $ (2,692) | $ 12,993 | $ (5,792) |
Denominator: | ||||||||
Weighted-average common shares outstanding | 30,243,865 | 29,568,986 | 30,053,330 | 29,376,959 | ||||
Weighted-average common shares and common share equivalents outstanding | 30,824,078 | 29,568,986 | 30,862,088 | 29,376,959 | ||||
Net income (loss) per common share: | ||||||||
Basic | $ 0.08 | $ (0.02) | $ 0.43 | $ (0.20) | ||||
Diluted | $ 0.07 | $ (0.02) | $ 0.42 | $ (0.20) |
NET INCOME (LOSS) PER COMMON _4
NET INCOME (LOSS) PER COMMON SHARE (Narrative) (Details) - shares | 3 Months Ended | 9 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive common shares excluded from the computation of diluted net income per common share | 203,734 | 220,534 |
LONG-TERM DEBT (Summary of Long
LONG-TERM DEBT (Summary of Long-Term Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Long-term debt | ||
Total long-term debt | $ 938 | $ 9,379 |
Less current maturities | (56) | (96) |
Long-term debt, less current maturities | 882 | 9,283 |
Revolving credit facility | ||
Long-term debt | ||
Total long-term debt | 829 | 9,202 |
Equipment debt obligations | ||
Long-term debt | ||
Total long-term debt | $ 109 | $ 177 |
LONG-TERM DEBT (Narrative) (Det
LONG-TERM DEBT (Narrative) (Details) | Nov. 21, 2019USD ($) | Nov. 20, 2019 | Oct. 26, 2018USD ($) | Dec. 31, 2014USD ($)contract | Dec. 31, 2019USD ($) | Jun. 03, 2019USD ($) | Mar. 31, 2019USD ($) | Feb. 28, 2019USD ($) | Jun. 30, 2015USD ($) |
Line Of Credit Facility [Line Items] | |||||||||
Revolving credit facility | $ 829,000 | $ 9,202,000 | |||||||
Outstanding letters of credit | $ 0 | ||||||||
Equipment debt obligations | |||||||||
Line Of Credit Facility [Line Items] | |||||||||
Principal amount of debt | $ 400,000 | ||||||||
Stated interest rate, percentage | 5.94% | ||||||||
Debt maturity month and year | 2020-06 | ||||||||
First Amendment | |||||||||
Line Of Credit Facility [Line Items] | |||||||||
Credit facility, maximum limit | $ 1,500,000 | $ 3,000,000 | |||||||
Second Amendment | |||||||||
Line Of Credit Facility [Line Items] | |||||||||
Rent reserve | $ 100,000 | ||||||||
Third Amendment | |||||||||
Line Of Credit Facility [Line Items] | |||||||||
Credit facility, maximum limit | $ 3,000,000 | ||||||||
Credit facility maturity date | Oct. 26, 2021 | Oct. 26, 2020 | |||||||
Third Amendment | Foreign Currency Forward Contracts | |||||||||
Line Of Credit Facility [Line Items] | |||||||||
Credit facility, sublimit | $ 2,000,000 | ||||||||
Credit Agreement | Western Alliance Bank | Line of Credit | Revolving credit facility | |||||||||
Line Of Credit Facility [Line Items] | |||||||||
Credit facility maturity date | Oct. 26, 2021 | ||||||||
Credit facility, current limit | $ 20,150,000 | ||||||||
Borrowing base | $ 14,700,000 | ||||||||
Revolving credit facility | 800,000 | ||||||||
Credit facility,total borrowing capacity | $ 13,900,000 | ||||||||
Annual facility fee (as a percentage) | 0.45% | ||||||||
Applicable interest rate | 5.25% | ||||||||
Credit Agreement | Western Alliance Bank | Line of Credit | Revolving credit facility | Minimum | Prime rate | |||||||||
Line Of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 5.00% | ||||||||
Credit Agreement | Western Alliance Bank | Line of Credit | Letter of credit | |||||||||
Line Of Credit Facility [Line Items] | |||||||||
Credit facility, sublimit | $ 2,000,000 | ||||||||
Debt Instrument 1 | Equipment debt obligations | |||||||||
Line Of Credit Facility [Line Items] | |||||||||
Principal amount of debt | $ 44,000 | ||||||||
Stated interest rate, percentage | 6.43% | ||||||||
Debt maturity month and year | 2024-01 | ||||||||
Debt Instrument 2 | Equipment debt obligations | |||||||||
Line Of Credit Facility [Line Items] | |||||||||
Principal amount of debt | $ 30,000 | ||||||||
Stated interest rate, percentage | 8.77% | ||||||||
Debt maturity month and year | 2024-01 | ||||||||
December 2014 OTA Finance Program | De Lage Landen Financial Services, Inc. | Secured Debt | |||||||||
Line Of Credit Facility [Line Items] | |||||||||
Stated interest rate, percentage | 8.36% | ||||||||
Debt maturity month and year | 2018-04 | ||||||||
Principal amount of secured debt | $ 400,000 | ||||||||
"Number of individual OTA customer contracts (contract) | contract | 25 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense/(benefit) | $ 39 | $ 0 | $ 66 | $ 26 |
Unrecognized tax benefits | $ 100 | $ 100 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) - $ / shares | Jan. 03, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2019 |
Stockholders Equity Note [Abstract] | |||||
Rights agreement extended term | 3 years | ||||
Common stock purchased per right | 1 | ||||
Right issue share price | $ 7 | ||||
Minimum subscription percentage | 20.00% | ||||
Number of business days to trigger a distribution date | 10 days | ||||
Share acquisition percentage | 50.00% | ||||
Prior to a person becoming an acquiring person, the board of directors of the company's redemption rate | $ 0.001 | ||||
Shares issued under ESPP plan | 666 | 570 | 613 | 1,849 | |
Closing market price | $ 3.35 | $ 2.85 | $ 2.97 |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of ESPP Activity) (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | |
Shares issued under Employee Stock Purchase Plan (shares) | 666 | 570 | 613 | 1,849 |
Closing Market Price | $ 3.35 | $ 2.85 | $ 2.97 | |
Minimum | ||||
Closing Market Price | $ 2.85 | |||
Maximum | ||||
Closing Market Price | $ 3.35 |
STOCK OPTIONS AND RESTRICTED _3
STOCK OPTIONS AND RESTRICTED SHARES (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Dec. 31, 2019 | Aug. 07, 2019 | Aug. 03, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Deferred stock-based compensation related to grants of restricted shares, period of recognition | 1 year 7 months 6 days | ||
Deferred stock-based compensation related to grants of restricted shares | $ 1.1 | ||
2016 Omnibus Incentive Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Reserved shares for issuance to eligible participants (in shares) | 3,500,000 | 1,750,000 | |
Increase in number of common stock shares available for issuance | 1,750,000 |
STOCK OPTIONS AND RESTRICTED _4
STOCK OPTIONS AND RESTRICTED SHARES (Stock-based Compensation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-based compensation | ||||
Total | $ 185 | $ 200 | $ 515 | $ 639 |
Cost of product revenue | ||||
Stock-based compensation | ||||
Total | 1 | 1 | 2 | 3 |
Cost of service revenue | ||||
Stock-based compensation | ||||
Total | 1 | (1) | 2 | |
General and administrative | ||||
Stock-based compensation | ||||
Total | 172 | 185 | 482 | 592 |
Sales and marketing | ||||
Stock-based compensation | ||||
Total | 1 | $ 13 | 1 | 41 |
Research and development | ||||
Stock-based compensation | ||||
Total | $ 11 | $ 31 | $ 1 |
STOCK OPTIONS AND RESTRICTED _5
STOCK OPTIONS AND RESTRICTED SHARES (Restricted Shares and Stock Options) (Details) | 9 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Stock Options | |
Non-vested, beginning balance (shares) | 467,836 |
Awards granted (shares) | 0 |
Awards vested or exercised (shares) | (10,000) |
Awards forfeited (shares) | (19,874) |
Non-vested, ending balance (shares) | 437,962 |
Per share price on grant date (USD per share) | $ / shares | $ 0 |
Restricted shares | |
Restricted Shares | |
Beginning balance (shares) | 1,312,593 |
Awards granted (shares) | 279,468 |
Awards vested or exercised (shares) | (669,238) |
Awards forfeited (shares) | (17,150) |
Ending balance (shares) | 905,673 |
Restricted shares | Minimum | |
Restricted Shares | |
Per share price on grant date (USD per share) | $ / shares | $ 3.02 |
SEGMENTS (Reconciliation of Seg
SEGMENTS (Reconciliation of Segment Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Corporate and Other | ||||
Revenues | $ 34,249 | $ 16,291 | $ 124,949 | $ 43,311 |
Operating Income (Loss) | 2,438 | (587) | 13,475 | (5,473) |
Operating Segments | Orion Engineered Systems | ||||
Corporate and Other | ||||
Revenues | 27,275 | 6,802 | 104,369 | 15,168 |
Operating Income (Loss) | 3,174 | 33 | 15,861 | (1,944) |
Operating Segments | Orion Distribution Services | ||||
Corporate and Other | ||||
Revenues | 3,634 | 6,102 | 11,191 | 20,202 |
Operating Income (Loss) | (206) | (236) | (691) | (1,082) |
Operating Segments | Orion U.S. Markets | ||||
Corporate and Other | ||||
Revenues | 3,340 | 3,387 | 9,389 | 7,941 |
Operating Income (Loss) | 578 | 569 | 1,750 | 793 |
Corporate and Other | ||||
Corporate and Other | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Income (Loss) | $ (1,108) | $ (953) | $ (3,445) | $ (3,240) |