Container Store (TCSGQ) 10-Q 1 Nov 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Sep. 29, 2018	Oct. 26, 2018
Document and Entity Information
Entity Registrant Name	Container Store Group, Inc.
Entity Central Index Key	1,411,688
Document Type	10-Q
Document Period End Date	Sep. 29, 2018
Amendment Flag	false
Current Fiscal Year End Date	--03-30
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Common Stock Outstanding		48,913,277
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2

Consolidated balance sheets

Consolidated balance sheets - USD ($) $ in Thousands	Sep. 29, 2018	Mar. 31, 2018	Sep. 30, 2017
Current assets:
Cash	$ 7,212	$ 8,399	$ 10,145
Accounts receivable, net	25,400	25,528	26,083
Inventory	110,801	97,362	109,277
Prepaid expenses	11,021	11,281	11,519
Income taxes receivable	3,394	15	1,456
Other current assets	10,562	11,609	13,021
Total current assets	168,390	154,194	171,501
Noncurrent assets:
Property and equipment, net	149,259	158,389	162,884
Goodwill	202,815	202,815	202,815
Trade names	226,939	229,401	230,482
Deferred financing costs, net	276	312	335
Noncurrent deferred tax assets, net	1,979	2,404	2,240
Other assets	1,796	1,854	1,696
Total noncurrent assets	583,064	595,175	600,452
Total assets	751,454	749,369	771,953
Current liabilities:
Accounts payable	62,313	43,692	61,224
Accrued liabilities	63,497	70,494	64,144
Revolving lines of credit	1,128
Current portion of long-term debt	7,052	7,771	9,345
Income taxes payable	1,851	4,580	960
Other current liabilities	702
Total current liabilities	136,543	126,537	135,673
Noncurrent liabilities:
Long-term debt	282,289	277,394	301,296
Noncurrent deferred tax liabilities, net	50,630	54,839	79,091
Deferred rent and other long-term liabilities	41,020	41,892	33,012
Total noncurrent liabilities	373,939	374,125	413,399
Total liabilities	510,482	500,662	549,072
Commitments and contingencies (Note 6)
Shareholders' equity:
Common stock, $0.01 par value, 250,000,000 shares authorized; 48,138,907 shares issued at September 29, 2018; 48,072,187 shares issued at March 31, 2018; 48,063,222 shares issued at September 30, 2017	481	481	481
Additional paid-in capital	862,495	861,263	860,196
Accumulated other comprehensive loss	(23,167)	(17,316)	(14,095)
Retained deficit	(598,837)	(595,721)	(623,701)
Total shareholders' equity	240,972	248,707	222,881
Total liabilities and shareholders' equity	$ 751,454	$ 749,369	$ 771,953

Consolidated balance sheets (Pa

Consolidated balance sheets (Parenthetical) - $ / shares	Sep. 29, 2018	Mar. 31, 2018	Sep. 30, 2017
Consolidated balance sheets
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	250,000,000	250,000,000	250,000,000
Common stock, shares issued	48,138,907	48,072,187	48,063,222

Consolidated statements of oper

Consolidated statements of operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 29, 2018	Sep. 30, 2017	Sep. 29, 2018	Sep. 30, 2017
Consolidated statements of operations
Net sales	$ 224,453	$ 218,410	$ 420,276	$ 401,478
Cost of sales (excluding depreciation and amortization)	93,878	92,036	174,930	171,494
Gross profit	130,575	126,374	245,346	229,984
Selling, general, and administrative expenses (excluding depreciation and amortization)	105,656	106,332	212,261	202,972
Stock-based compensation	769	510	1,355	1,004
Pre-opening costs	881	1,418	1,227	2,804
Depreciation and amortization	9,128	9,505	18,465	19,047
Other expenses	24	623	217	4,157
Loss on disposal of assets		102	40	153
Income (loss) from operations	14,117	7,884	11,781	(153)
Interest expense, net	7,377	5,873	15,285	10,098
Loss on extinguishment of debt	2,082	2,369	2,082	2,369
Income (loss) before taxes	4,658	(358)	(5,586)	(12,620)
Provision (benefit) for income taxes	1,417	517	(2,063)	(4,068)
Net income (loss)	$ 3,241	$ (875)	$ (3,523)	$ (8,552)
Net income (loss) per common share—basic and diluted	$ 0.07	$ (0.02)	$ (0.07)	$ (0.18)
Weighted-average common shares - basic (in shares)	48,138,907	48,058,231	48,138,907	48,053,084
Weighted-average common shares - diluted (in shares)	48,519,166	48,058,231	48,138,907	48,053,084

Consolidated statements of comp

Consolidated statements of comprehensive income (loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 29, 2018	Sep. 30, 2017	Sep. 29, 2018	Sep. 30, 2017
Consolidated statements of comprehensive income (loss)
Net income (loss)	$ 3,241	$ (875)	$ (3,523)	$ (8,552)
Unrealized gain (loss) on financial instruments, net of tax provision (benefit) of $154, $652, ($412) and $1,546	438	1,010	(1,347)	2,400
Pension liability adjustment	(18)	(70)	135	(180)
Foreign currency translation adjustment	652	2,366	(4,639)	6,328
Comprehensive income (loss)	$ 4,313	$ 2,431	$ (9,374)	$ (4)

Consolidated statements of co_2

Consolidated statements of comprehensive income (loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 29, 2018	Sep. 30, 2017	Sep. 29, 2018	Sep. 30, 2017
Consolidated statements of comprehensive income (loss)
Unrealized gain (loss) on financial instruments, tax provision (benefit)	$ 154	$ 652	$ (412)	$ 1,546

Consolidated statements of cash

Consolidated statements of cash flows - USD ($) $ in Thousands	6 Months Ended
	Sep. 29, 2018	Sep. 30, 2017
Operating activities
Net loss	$ (3,523)	$ (8,552)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	18,465	19,047
Stock-based compensation	1,355	1,004
Loss on disposal of assets	40	153
Loss on extinguishment of debt	2,082	2,369
Deferred tax benefit	(2,927)	(4,338)
Non-cash interest	1,418	1,146
Other		283
Changes in operating assets and liabilities:
Accounts receivable	(373)	2,599
Inventory	(17,066)	(2,259)
Prepaid expenses and other assets	1,875	(1,312)
Accounts payable and accrued liabilities	13,304	17,808
Income taxes	(6,083)	(3,261)
Other noncurrent liabilities	(431)	(1,731)
Net cash provided by operating activities	8,136	22,956
Investing activities
Additions to property and equipment	(10,669)	(13,129)
Proceeds from sale of property and equipment	7	18
Net cash used in investing activities	(10,662)	(13,111)
Financing activities
Borrowings on revolving lines of credit	45,404	19,694
Payments on revolving lines of credit	(19,267)	(19,694)
Borrowings on long-term debt	272,500	330,000
Payments on long-term debt and capital leases	(294,497)	(329,551)
Payment of debt issuance costs	(2,244)	(11,234)
Payment of taxes with shares withheld upon restricted stock vesting	(122)	(39)
Net cash provided by (used in) financing activities	1,774	(10,824)
Effect of exchange rate changes on cash	(435)	388
Net decrease in cash	(1,187)	(591)
Cash at beginning of fiscal period	8,399	10,736
Cash at end of fiscal period	7,212	10,145
Supplemental information for non-cash investing and financing activities:
Purchases of property and equipment (included in accounts payable)	1,192	945
Capital lease obligation incurred	$ 132	$ 91

Description of business and bas

Description of business and basis of presentation	6 Months Ended
	Sep. 29, 2018
Nature of business and summary of significant accounting policies
Description of business and basis of presentation	The Container Store Group, Inc. Notes to consolidated financial statements (unaudited) (In thousands, except share amounts and unless otherwise stated) September 29, 2018 1. Description of business and basis of presentation These financial statements should be read in conjunction with the financial statement disclosures in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018, filed with the Securities and Exchange Commission on May 31, 2018. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). We use the same accounting policies in preparing quarterly and annual financial statements. All adjustments necessary for a fair presentation of quarterly operating results are reflected herein and are of a normal, recurring nature. Certain items in these consolidated financial statements have been reclassified to conform to the current period presentation. Description of business The Container Store, Inc. was founded in 1978 in Dallas, Texas, as a retailer with a mission to provide customers with storage and organization solutions through an assortment of innovative products and unparalleled customer service. In 2007, The Container Store, Inc. was sold to The Container Store Group, Inc. (the “Company”), a holding company, of which a majority stake was purchased by Leonard Green and Partners, L.P. (“LGP”), with the remainder held by certain employees of The Container Store, Inc. On November 6, 2013, the Company completed its initial public offering (the “IPO”). As the majority shareholder, LGP retains a controlling interest in the Company. As of September 29, 2018, The Container Store, Inc. (“TCS”) operates 92 stores with an average size of approximately 25,000 square feet (19,000 selling square feet) in 33 states and the District of Columbia. The Container Store, Inc. also offers all of its products directly to its customers, including business-to-business customers, through its website and call center. The Container Store, Inc.’s wholly-owned Swedish subsidiary, Elfa International AB (“Elfa”), designs and manufactures component-based shelving and drawer systems and made-to-measure sliding doors. elfa ® branded products are sold exclusively in the United States in The Container Store retail stores, website and call center, and Elfa sells to various retailers on a wholesale basis in approximately 30 countries around the world, with a concentration in the Nordic region of Europe. Seasonality The Company’s business is moderately seasonal in nature and, therefore, the results of operations for the twenty-six weeks ended September 29, 2018 are not necessarily indicative of the operating results for the full year. The Company has historically realized a higher portion of net sales, operating income, and cash flows from operations in the fourth fiscal quarter, attributable primarily to the timing and impact of Our Annual elfa ® Sale, which traditionally starts in late December and runs into February. Revenue recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers , an updated standard on revenue recognition. The Company adopted this standard in the first quarter of fiscal 2018 and elected to use the modified-retrospective approach for implementation of the standard. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the Company expects to be entitled in exchange for those goods or services. The Company has identified certain impacts to our accounting for gift cards given away for promotional or marketing purposes. Under previous GAAP, the value of promotional gift cards was recorded as selling, general, and administrative (“SG&A”) expense. The new standard requires these types of gift cards to be accounted for as a reduction of revenue (i.e. a discount). Additionally, ASU 2014-09 disallows the capitalization of direct-response advertising costs which will impact the timing of recognition of certain advertising production and distribution costs. Upon transition on April 1, 2018, the Company recorded a cumulative adjustment to increase retained earnings/(deficit) and to decrease accrued liabilities by approximately $400. The Company also reclassified the asset balance for the estimate of future returned merchandise, which was approximately $900 as of March 31, 2018, from the “Inventory” line to the “Other current assets” line on the balance sheet. Overall, the adoption of ASU 2014-09 did not result in a material impact to the Company’s financial statements. Note 10 provides the related disaggregated revenue disclosures. We recognize revenues and the related cost of goods sold for our TCS segment when merchandise is received by our customers. We recognize revenues and the related cost of goods sold for our Elfa segment upon shipment. We recognize shipping and handling fees as revenue when the merchandise is shipped to the customer. Costs of shipping and handling are included in cost of goods sold. We recognize fees for installation and other services as revenue upon completion of the service to the customer. Costs of installation and other services are included in cost of goods sold. Sales tax collected is not recognized as revenue as it is ultimately remitted to governmental authorities. We reserve for projected merchandise returns based on historical experience and various other assumptions that we believe to be reasonable. The reserve reduces sales and cost of sales, accordingly. Merchandise exchanges of similar product and price are not considered merchandise returns and, therefore, are excluded when calculating the sales returns reserve. Contract Balances Contract balances as a result of transactions with customers primarily consist of trade receivables included in Accounts receivable, net, unearned revenue included in Accrued liabilities, and gift cards and store credits outstanding included in Accrued liabilities in the Company's Consolidated Balance Sheets. Note 2 provides the Company's trade receivables, unearned revenue, and gift cards and store credits outstanding with customers as of September 29, 2018, March 31, 2018, and September 30, 2017. Below is a rollforward of contract liability balances from March 31, 2018 to September 29, 2018, which illustrates the amount of contract liability as of March 31, 2018 which was subsequently recognized into revenue in the twenty-six weeks ended September 29, 2018: Contract liability Revenue recognized Contract liabilities Contract liability balance at from beginning added during balance at March 31, 2018 (1) liability period (2) September 29, 2018 Unearned revenue $ 11,080 $ (10,571) $ 9,555 $ 10,064 Gift cards and store credits outstanding $ 8,470 $ (2,000) $ 1,936 $ 8,406 (1) Gift cards and store credits outstanding balance is net of revenue recognition transition adjustment (2) Net of estimated breakage Recent accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , to revise lease accounting guidance. The update requires most leases to be recorded on the balance sheet as a lease liability, with a corresponding right-of-use asset, whereas these leases currently have an off-balance sheet classification. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Company currently intends to adopt this standard in the first quarter of fiscal 2019 and expects to elect certain practical expedients permitted under the transition guidance. Additionally, the Company will elect the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and will not restate prior periods. The Company is still evaluating the impact of implementation of this standard on its financial statements, but expects that adoption will have a material impact to the Company’s total assets and liabilities given the Company has a significant number of operating leases not currently recognized on its balance sheet. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory , which requires entities to recognize the income tax effects of intercompany sales and transfers of assets, other than inventory, in the period in which the transfer occurs. This is a change from current GAAP, which requires entities to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized (i.e. depreciated, amortized, impaired). The income tax effects of intercompany sales and transfers of inventory will continue to be deferred until the inventory is sold to an outside party. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company adopted ASU 2016-16 in the first quarter of fiscal 2018. The adoption of this standard did not result in a material impact to the Company’s financial statements. In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which provides guidance that requires an employer to present the service cost component separate from the other components of net periodic benefit cost. The update requires that employers present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered by participating employees during the period. The other components of the net periodic benefit cost are required to be presented separately from the line item that includes service cost and outside of the subtotal of income from operations. If a separate line item is not used, the line item used in the income statement must be disclosed. In addition, only the service cost component is eligible for capitalization in assets. The Company adopted ASU 2017-07 in the first quarter of fiscal 2018 on a retrospective basis. The adoption of this standard did not result in a material impact to the Company’s financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting , which clarifies when modification accounting should be applied for changes to terms or conditions of a share-based payment award. The Company adopted ASU 2017-09 in the first quarter of fiscal 2018 on a prospective basis. The adoption of this standard did not result in a material impact to the Company’s financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which is intended to improve and simplify hedge accounting and improve the disclosures of hedging arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting the new standard on its financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under this ASU, the guidance on share-based payments to nonemployees would be aligned with the requirements for share-based payments granted to employees, with certain exceptions. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of adopting the new standard on its financial statements, but does not expect it to have a material impact to the financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in Accounting Standards Codification (“ASC”) 350-40 to determine which implementation costs to capitalize as assets. A customer’s accounting for the costs of the hosting component of the arrangement are not affected by the new guidance. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting the new standard on its financial statements.

Detail of certain balance sheet

Detail of certain balance sheet accounts	6 Months Ended
	Sep. 29, 2018
Detail of certain balance sheet accounts
Detail of certain balance sheet accounts	2. Detail of certain balance sheet accounts September 29, March 31, September 30, 2018 2018 2017 Accounts receivable, net: Trade receivables, net $ 15,789 $ 15,968 $ 15,821 Credit card receivables 7,472 6,939 7,649 Tenant allowances 445 998 1,264 Other receivables 1,694 1,623 1,349 $ 25,400 $ 25,528 $ 26,083 Inventory: Finished goods $ 105,355 $ 91,970 $ 104,482 Raw materials 4,904 4,840 4,372 Work in progress 542 552 423 $ 110,801 $ 97,362 $ 109,277 Accrued liabilities: Accrued payroll, benefits and bonuses $ 19,810 $ 23,833 $ 20,748 Unearned revenue 10,064 11,080 8,819 Accrued transaction and property tax 10,805 12,846 11,888 Gift cards and store credits outstanding 8,406 8,891 8,561 Accrued lease liabilities 4,573 5,105 6,072 Accrued interest 966 292 246 Other accrued liabilities 8,873 8,447 7,810 $ 63,497 $ 70,494 $ 64,144

Long-term debt and revolving li

Long-term debt and revolving lines of credit	6 Months Ended
	Sep. 29, 2018
Long-term debt and revolving lines of credit
Long-term debt and revolving lines of credit	3 . Long-term debt and revolving lines of credit On September 14, 2018 (the “Effective Date”), the Company entered into a fifth amendment (the “Fifth Amendment”) to the Credit Agreement dated as of April 6, 2012 (“Senior Secured Term Loan Facility”). The Fifth Amendment amended the Senior Secured Term Loan Facility to, among other things, (i) extend the maturity date of the loans under the Senior Secured Term Loan Facility to September 14, 2023, (ii) decrease the applicable interest rate margin to 5.00% for LIBOR loans and 4.00% for base rate loans and, beginning from the date that a compliance certificate is delivered to the administrative agent for the fiscal year ending March 30, 2019, allow the applicable interest rate margin to step down to 4.75% for LIBOR loans and 3.75% for base rate loans upon achievement of a consolidated leverage ratio equal to or less than 2.75:1.00, and (iii) impose a 1.00% premium if a voluntary prepayment is made from the proceeds of a repricing transaction within 12 months after the Effective Date. In connection with the Fifth Amendment, the Company repaid $20,000 of the outstanding loans under the Senior Secured Term Loan Facility, which reduced the aggregate principal amount of the Senior Secured Term Loan Facility to $272,500. The Company drew down a net amount of approximately $10,000 on its $100,000 asset-based revolving credit agreement (the “Revolving Credit Facility”) in connection with the closing of the Fifth Amendment. In addition, the Company recorded a loss on extinguishment of debt of $2,082 in the thirteen weeks ended September 29, 2018 associated with the Fifth Amendment. The Company capitalizes certain costs associated with issuance of various debt instruments. These deferred financing costs are amortized to interest expense on a straight-line method, which is materially consistent with the effective interest method, over the terms of the related debt agreements. In the thirteen weeks ended September 29, 2018, the Company capitalized $2,217 of fees associated with the Fifth Amendment which will be amortized through September 14, 2023. Long-term debt and revolving lines of credit consist of the following: September 29, March 31, September 30, 2018 2018 2017 Senior secured term loan facility $ 272,500 $ 294,375 $ 298,125 2014 Elfa term loan facility — — 2,943 2014 Elfa revolving credit facility 1,128 — — Obligations under capital leases 509 662 869 Other loans — 16 75 Revolving credit facility 25,000 — 20,000 Total debt 299,137 295,053 322,012 Less current portion (8,180) (7,771) (9,345) Less deferred financing costs (1) (8,668) (9,888) (11,371) Total long-term debt $ 282,289 $ 277,394 $ 301,296 (1) Represents deferred financing costs related to our Senior Secured Term Loan Facility, which are presented net of long-term debt in the consolidated balance sheet.

Net income (loss) per common sh

Net income (loss) per common share	6 Months Ended
	Sep. 29, 2018
Net income (loss) per common share
Net income (loss) per common share	4. Net income (loss) per common share Basic net income (loss) per common share is computed as net income (loss) divided by the weighted-average number of common shares for the period. Diluted net income (loss) per share is computed as net income (loss) divided by the weighted-average number of common shares for the period plus common stock equivalents consisting of shares subject to stock-based awards with exercise prices less than or equal to the average market price of the Company’s common stock for the period, to the extent their inclusion would be dilutive. Potentially dilutive securities are excluded from the computation of diluted net income (loss) per share if their effect is anti-dilutive. The following is a reconciliation of net income (loss) and the number of shares used in the basic and diluted net income (loss) per share calculations: Thirteen Weeks Ended Twenty-Six Weeks Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Numerator: Net income (loss) $ 3,241 $ (875) $ (3,523) $ (8,552) Denominator: Weighted-average common shares—basic 48,138,907 48,058,231 48,138,907 48,053,084 Options and other dilutive securities 380,259 — — — Weighted-average common shares—diluted 48,519,166 48,058,231 48,138,907 48,053,084 Net income (loss) per common share—basic and diluted $ 0.07 $ (0.02) $ (0.07) $ (0.18) Antidilutive securities not included: Stock options outstanding 2,350,339 2,958,961 2,637,068 2,945,881 Nonvested restricted stock awards 14,492 107,614 120,709 95,455

Income taxes

Income taxes	6 Months Ended
	Sep. 29, 2018
Income taxes
Income taxes	5. Income taxes The provision for income taxes in the thirteen weeks ended September 29, 2018 was $1,417 as compared to $517 in the thirteen weeks ended September 30, 2017. The effective tax rate for the thirteen weeks ended September 29, 2018 was 30.4%, as compared to -144.4% in the thirteen weeks ended September 30, 2017. During the thirteen weeks ended September 29, 2018, the effective tax rate rose above the U.S statutory rate primarily due to the impact of the global intangible low-taxed income (“GILTI”) provision and the officer compensation limitation provision from the Tax Cuts and Jobs Act (the “Tax Act”) enacted in fiscal 2017, and U.S state income taxes. During the thirteen weeks ended September 30, 2017, the effective tax rate fell below the U.S. statutory rate due to earnings mix between domestic and foreign jurisdictions, the expiration of certain stock-based compensation awards, state tax rate changes and the effect of near breakeven pre-tax loss when in an income tax provision position. The Company’s effective income tax rate for the twenty-six weeks ended September 29, 2018 was 36.9% compared to 32.2% for the twenty-six weeks ended September 30, 2017. During the first half of fiscal 2018, the effective tax rate rose above the statutory rate due to the recognition of a $604 tax benefit for the remeasurement of deferred tax balances as a result of a change in the Swedish tax rate combined with a year-to-date pre-tax loss, as well as the impact of the GILTI provision and the officer compensation limitation provision from the Tax Act enacted in fiscal 2017, and U.S. state income taxes. During the first half of fiscal 2017, the effective tax rate fell below the statutory rate due to earnings mix between domestic and foreign jurisdictions coupled with the worldwide net loss position at that time. Tax Cuts and Jobs Act The Company recorded a net provisional tax benefit in fiscal 2017 related to the Tax Act of $15,689, which includes a provisional benefit of $24,210 related to the remeasurement of the Company’s deferred tax balances, partially offset by a provisional expense of $8,521 related to the one-time transition tax on foreign earnings. Pursuant to Staff Accounting Bulletin (“SAB”) No. 118 (“SAB 118”), the Company’s measurement period for implementing the accounting changes required by the Tax Act will close before December 22, 2018 and the Company anticipates completing the accounting under ASC Topic 740, Income Taxes (“ASC 740”) in the third quarter of fiscal 2018. The Company believes the remeasurement of its deferred tax balances is complete, except for changes in estimates that may result from finalizing the filing of its 2017 U.S. income tax return and changes that may be a direct impact of changes to other provisional amounts due to the enactment of the Tax Act. In addition, the estimate may be impacted as the Company further analyzes state tax conformity to the federal tax changes and guidance issued by regulatory bodies that provide interpretive guidance of the Tax Act. Any adjustments to the provisional amounts will be recognized as a component of the provision for income taxes in the period in which such adjustments are determined within the measurement period. Additionally, the Company is continuing to gather additional information to be able to more precisely compute the final amount of the one-time transition tax on foreign earnings. The Tax Act creates a new requirement that certain GILTI earned by controlled foreign corporations ( “ CFC ” ) must be included currently in the taxable income of the CFC’s U.S. shareholder. The Company became subject to the GILTI provisions beginning in fiscal 2018. Because of the complexity of the new GILTI tax rules, the Company is continuing to evaluate this provision of the Tax Act and the application of ASC 740. The Company has not yet elected an accounting policy to determine whether it will recognize GILTI as a period cost when incurred or to recognize deferred taxes for basis differences expected to reverse. For purposes of calculating the estimated annual effective tax rate at quarter end, the Company has used the period cost method. The Company will continue to assess the appropriateness of this method during the measurement period allowed for under SAB 118.

Commitments and contingencies

Commitments and contingencies	6 Months Ended
	Sep. 29, 2018
Commitments and contingencies
Commitments and contingencies	6. Commitments and contingencies In connection with insurance policies and other contracts, the Company has outstanding standby letters of credit totaling $3,852 as of September 29, 2018. The Company is subject to ordinary litigation and routine reviews by regulatory bodies that are incidental to its business, none of which is expected to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows on an individual basis or in the aggregate.

Accumulated other comprehensive

Accumulated other comprehensive income	6 Months Ended
	Sep. 29, 2018
Accumulated other comprehensive income
Accumulated other comprehensive income	7. Accumulated other comprehensive loss Accumulated other comprehensive loss (“AOCL”) consists of changes in our foreign currency forward contracts, pension liability adjustment, and foreign currency translation. The components of AOCL, net of tax, are shown below for the twenty-six weeks ended September 29, 2018: Foreign currency Pension Foreign hedge liability currency instruments adjustment translation Total Balance at March 31, 2018 $ (102) $ (1,793) $ (15,421) $ (17,316) Other comprehensive (loss) income before reclassifications, net of tax (1,214) 135 (4,639) (5,718) Amounts reclassified to earnings, net of tax (133) — — (133) Net current period other comprehensive (loss) income (1,347) 135 (4,639) (5,851) Balance at September 29, 2018 $ (1,449) $ (1,658) $ (20,060) $ (23,167) Amounts reclassified from AOCL to earnings for the foreign currency forward contracts category are generally included in cost of sales in the Company’s consolidated statements of operations. For a description of the Company’s use of foreign currency forward contracts, refer to Note 8.

Foreign currency forward contra

Foreign currency forward contracts	6 Months Ended
	Sep. 29, 2018
Foreign currency forward contracts.
Foreign currency forward contracts	8. Foreign currency forward contracts The Company’s international operations and purchases of inventory products from foreign suppliers are subject to certain opportunities and risks, including foreign currency fluctuations. In the TCS segment, we utilize foreign currency forward contracts in Swedish krona to stabilize our retail gross margins and to protect our domestic operations from downward currency exposure by hedging purchases of inventory from our wholly-owned subsidiary, Elfa. Forward contracts in the TCS segment are designated as cash flow hedges, as defined by ASC 815. In the Elfa segment, we utilize foreign currency forward contracts to hedge purchases, primarily of raw materials, that are transacted in currencies other than Swedish krona, which is the functional currency of Elfa. Forward contracts in the Elfa segment are economic hedges and are not designated as cash flow hedges as defined by ASC 815. During the twenty-six weeks ended September 29, 2018 and September 30, 2017, the TCS segment used forward contracts for 94% and 100% of inventory purchases in Swedish krona, respectively. During the twenty-six weeks ended September 29, 2018 and September 30, 2017, the Elfa segment used forward contracts to purchase U.S. dollars in the amount of $0 and $1,648, which represented 0% and 54% of the Elfa segment’s U.S. dollar purchases, respectively. Generally, the Company’s foreign currency forward contracts have terms from 1 to 12 months and require the Company to exchange currencies at agreed-upon rates at settlement. The counterparties to the contracts consist of a limited number of major domestic and international financial institutions. The Company does not hold or enter into financial instruments for trading or speculative purposes. The Company records its foreign currency forward contracts on a gross basis and generally does not require collateral from these counterparties because it does not expect any losses from credit exposure. The Company records all foreign currency forward contracts on its consolidated balance sheet at fair value. The Company accounts for its foreign currency hedging instruments in the TCS segment as cash flow hedges, as defined. Changes in the fair value of the foreign currency hedging instruments that are considered to be effective, as defined, are recorded in other comprehensive income (loss) until the hedged item (inventory) is sold to the customer, at which time the deferred gain or loss is recognized through cost of sales. Any portion of a change in the foreign currency hedge instrument’s fair value that is considered to be ineffective, as defined, or that the Company has elected to exclude from its measurement of effectiveness, is immediately recorded in earnings as cost of sales. The Company assessed the effectiveness of the foreign currency hedge instruments and determined the foreign currency hedge instruments were highly effective during the twenty-six weeks ended September 29, 2018 and September 30, 2017. Forward contracts not designated as hedges in the Elfa segment are adjusted to fair value as SG&A expenses on the consolidated statements of operations; however, during the twenty-six weeks ended September 29, 2018, the Company did not recognize any amount associated with the change in fair value of forward contracts not designated as hedging instruments, as the Company had none of these instruments outstanding. The Company had a $1,449 loss in accumulated other comprehensive loss related to foreign currency hedge instruments at September 29, 2018, of which $930 represents an unrealized loss for settled foreign currency hedge instruments related to inventory on hand as of September 29, 2018. The Company expects the unrealized loss of $930, net of taxes, to be reclassified into earnings over the next 12 months as the underlying inventory is sold to the end customer. The change in fair value of the Company’s foreign currency hedge instruments that qualify as cash flow hedges and are included in accumulated other comprehensive loss, net of taxes, are presented in Note 7 of these financial statements.

Fair value measurements

Fair value measurements	6 Months Ended
	Sep. 29, 2018
Fair value measurements
Fair value measurements	9. Fair value measurements Under GAAP, the Company is required to a) measure certain assets and liabilities at fair value or b) disclose the fair values of certain assets and liabilities recorded at cost. Accounting standards define fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. Fair value is calculated assuming the transaction occurs in the principal or most advantageous market for the asset or liability and includes consideration of non-performance risk and credit risk of both parties. Accounting standards pertaining to fair value establish a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value. These tiers include: · Level 1—Valuation inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. · Level 2—Valuation inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3—Valuation inputs are unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques. As of September 29, 2018, March 31, 2018 and September 30, 2017, the Company held certain items that are required to be measured at fair value on a recurring basis. These included the nonqualified retirement plan and foreign currency forward contracts. The nonqualified retirement plan consists of investments purchased by employee contributions to retirement savings accounts. The Company’s foreign currency hedging instruments consist of over-the-counter (OTC) contracts, which are not traded on a public exchange. See Note 8 for further information on the Company’s hedging activities. The fair values of the nonqualified retirement plan and foreign currency forward contracts are determined based on the market approach which utilizes inputs that are readily available in public markets or can be derived from information available in publicly quoted markets for comparable assets. Therefore, the Company has categorized these items as Level 2. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of contracts it holds. The following items are measured at fair value on a recurring basis, subject to the disclosure requirements of ASC 820, Fair Value Measurements : September 29, March 31, September 30, Description Balance Sheet Location 2018 2018 2017 Assets Nonqualified retirement plan (1) N/A Other current assets $ 6,011 $ 5,848 $ 5,445 Foreign currency forward contracts Level 2 Other current assets — — 2,067 Total assets $ 6,011 $ 5,848 $ 7,512 (1) The fair value amount of the nonqualified retirement plan is measured at fair value using the net asset value per share practical expedient, and therefore, is not classified in the fair value hierarchy. The fair value of long-term debt was estimated using quoted prices as well as recent transactions for similar types of borrowing arrangements (Level 2 valuations). As of September 29, 2018, March 31, 2018 and September 30, 2017, the estimated fair value of the Company’s long-term debt, including current maturities, was $299,137, $295,605, and $311,578, respectively.

Segment reporting

Segment reporting	6 Months Ended
	Sep. 29, 2018
Segment reporting
Segment reporting	10. Segment reporting The Company’s reportable segments were determined on the same basis as how management evaluates performance internally by the Chief Operating Decision Maker (“CODM”). The Company has determined that the Chief Executive Officer is the CODM and the Company’s two reportable segments consist of TCS and Elfa. The TCS segment includes the Company’s retail stores, website and call center, as well as the installation and organization services business. The Elfa segment includes the manufacturing business that produces the elfa ® brand products that are sold domestically exclusively through the TCS segment, as well as on a wholesale basis in approximately 30 countries around the world with a concentration in the Nordic region of Europe. The intersegment sales in the Elfa column represent elfa ® product sales to the TCS segment. These sales and the related gross margin on merchandise recorded in TCS inventory balances at the end of the period are eliminated for consolidation purposes in the Eliminations column. The net sales to third parties in the Elfa column represent sales to customers outside of the United States. The Company has determined that adjusted earnings before interest, tax, depreciation, and amortization (“Adjusted EBITDA”) is the profit or loss measure that the CODM uses to make resource allocation decisions and evaluate segment performance. Adjusted EBITDA assists management in comparing our performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect our core operations and, therefore, are not included in measuring segment performance. Adjusted EBITDA is calculated in accordance with the Senior Secured Term Loan Facility and the Revolving Credit Facility and we define Adjusted EBITDA as net income before interest, taxes, depreciation and amortization, certain non-cash items, and other adjustments that we do not consider in our evaluation of ongoing operating performance from period to period. Fiscal thirteen weeks ended September 29, 2018 TCS Elfa Eliminations Total Net sales to third parties $ 208,915 $ 15,538 $ — $ 224,453 Intersegment sales — 14,650 (14,650) — Adjusted EBITDA 21,228 3,839 (720) 24,347 Interest expense, net 7,295 82 — 7,377 Assets (1) 650,644 104,585 (3,775) 751,454 Fiscal thirteen weeks ended September 30, 2017 TCS Elfa Eliminations Total Net sales to third parties $ 202,321 $ 16,089 $ — $ 218,410 Intersegment sales — 13,497 (13,497) — Adjusted EBITDA 23,446 3,448 (378) 26,516 Interest expense, net 5,800 73 — 5,873 Assets (1) 661,994 113,554 (3,595) 771,953 Fiscal twenty-six weeks ended September 29, 2018 TCS Elfa Eliminations Total Net sales to third parties $ 388,997 $ 31,279 $ — $ 420,276 Intersegment sales — 25,045 (25,045) — Adjusted EBITDA 31,332 5,438 (32) 36,738 Interest expense, net 15,140 145 — 15,285 Assets (1) 650,644 104,585 (3,775) 751,454 Fiscal twenty-six weeks ended September 30, 2017 TCS Elfa Eliminations Total Net sales to third parties $ 369,380 $ 32,098 $ — $ 401,478 Intersegment sales — 22,541 (22,541) — Adjusted EBITDA 29,210 4,591 (855) 32,946 Interest expense, net 9,957 141 — 10,098 Assets (1) 661,994 113,554 (3,595) 771,953 (1) Tangible assets in the Elfa column are located outside of the United States. A reconciliation of income (loss) before taxes to Adjusted EBITDA is set forth below: Thirteen Weeks Ended Twenty-Six Weeks Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Income (loss) before taxes $ 4,658 $ (358) $ (5,586) $ (12,620) Add: Depreciation and amortization 9,128 9,505 18,465 19,047 Interest expense, net 7,377 5,873 15,285 10,098 Pre-opening costs (a) 881 1,418 1,227 2,804 Non-cash rent (b) (581) (276) (1,218) (737) Stock-based compensation (c) 769 510 1,355 1,004 Loss on extinguishment of debt (d) 2,082 2,369 2,082 2,369 Foreign exchange losses (e) 9 130 47 54 Optimization Plan implementation charges (f) — 6,786 4,864 10,320 Elfa manufacturing facility closure (g) — 517 — 517 Other adjustments (h) 24 42 217 90 Adjusted EBITDA $ 24,347 $ 26,516 $ 36,738 $ 32,946 (a) Non-capital expenditures associated with opening new stores and relocating stores, including rent, marketing expenses, travel and relocation costs, and training costs. We adjust for these costs to facilitate comparisons of our performance from period to period. (b) Reflects the extent to which our annual GAAP rent expense has been above or below our cash rent payment due to lease accounting adjustments. The adjustment varies depending on the average age of our lease portfolio (weighted for size), as our GAAP rent expense on younger leases typically exceeds our cash cost, while our GAAP rent expense on older leases is typically less than our cash cost. (c) Non-cash charges related to stock-based compensation programs, which vary from period to period depending on volume and vesting timing of awards. We adjust for these charges to facilitate comparisons from period to period. (d) Loss recorded as a result of the amendments made to the Senior Secured Term Loan Facility in September 2018 and the amendments made to the Senior Secured Term Loan Facility and the Revolving Credit Facility in August 2017, which we do not consider in our evaluation of our ongoing operations. (e) Realized foreign exchange transactional gains/losses our management does not consider in our evaluation of our ongoing operations. (f) Charges incurred to implement our Optimization Plan, which include certain consulting costs recorded in SG&A expenses in the first quarter of fiscal 2018 and the first and second quarters of fiscal 2017, cash severance payments associated with the elimination of certain full-time positions at the TCS segment recorded in other expenses in the first and second quarters of fiscal 2017, and cash severance payments associated with organizational realignment at the Elfa segment recorded in other expenses in the first and second quarters of fiscal 2017, which we do not consider in our evaluation of ongoing performance. (g) Charges related to the closure of an Elfa manufacturing facility in Lahti, Finland in December 2017, recorded in other expenses, which we do not consider in our evaluation of our ongoing performance. (h) Other adjustments include amounts our management does not consider in our evaluation of our ongoing operations, including certain severance and other charges.

Description of business and b_2

Description of business and basis of presentation	6 Months Ended
	Sep. 29, 2018
Nature of business and summary of significant accounting policies
Rollforward of contract liabilities	Below is a rollforward of contract liability balances from March 31, 2018 to September 29, 2018, which illustrates the amount of contract liability as of March 31, 2018 which was subsequently recognized into revenue in the twenty-six weeks ended September 29, 2018: Contract liability Revenue recognized Contract liabilities Contract liability balance at from beginning added during balance at March 31, 2018 (1) liability period (2) September 29, 2018 Unearned revenue $ 11,080 $ (10,571) $ 9,555 $ 10,064 Gift cards and store credits outstanding $ 8,470 $ (2,000) $ 1,936 $ 8,406 (1) Gift cards and store credits outstanding balance is net of revenue recognition transition adjustment (2) Net of estimated breakage

Detail of certain balance she_2

Detail of certain balance sheet accounts (Tables)	6 Months Ended
	Sep. 29, 2018
Detail of certain balance sheet accounts
Schedule of detail of certain balance sheet accounts	September 29, March 31, September 30, 2018 2018 2017 Accounts receivable, net: Trade receivables, net $ 15,789 $ 15,968 $ 15,821 Credit card receivables 7,472 6,939 7,649 Tenant allowances 445 998 1,264 Other receivables 1,694 1,623 1,349 $ 25,400 $ 25,528 $ 26,083 Inventory: Finished goods $ 105,355 $ 91,970 $ 104,482 Raw materials 4,904 4,840 4,372 Work in progress 542 552 423 $ 110,801 $ 97,362 $ 109,277 Accrued liabilities: Accrued payroll, benefits and bonuses $ 19,810 $ 23,833 $ 20,748 Unearned revenue 10,064 11,080 8,819 Accrued transaction and property tax 10,805 12,846 11,888 Gift cards and store credits outstanding 8,406 8,891 8,561 Accrued lease liabilities 4,573 5,105 6,072 Accrued interest 966 292 246 Other accrued liabilities 8,873 8,447 7,810 $ 63,497 $ 70,494 $ 64,144

Long-term debt and revolving _2

Long-term debt and revolving lines of credit (Tables)	6 Months Ended
	Sep. 29, 2018
Long-term debt and revolving lines of credit
Schedule of long-term debt and revolving lines of credit	Long-term debt and revolving lines of credit consist of the following: September 29, March 31, September 30, 2018 2018 2017 Senior secured term loan facility $ 272,500 $ 294,375 $ 298,125 2014 Elfa term loan facility — — 2,943 2014 Elfa revolving credit facility 1,128 — — Obligations under capital leases 509 662 869 Other loans — 16 75 Revolving credit facility 25,000 — 20,000 Total debt 299,137 295,053 322,012 Less current portion (8,180) (7,771) (9,345) Less deferred financing costs (1) (8,668) (9,888) (11,371) Total long-term debt $ 282,289 $ 277,394 $ 301,296 (1) Represents deferred financing costs related to our Senior Secured Term Loan Facility, which are presented net of long-term debt in the consolidated balance sheet.

Net income (loss) per common _2

Net income (loss) per common share (Tables)	6 Months Ended
	Sep. 29, 2018
Net income (loss) per common share
Schedule of reconciliation of net income and the number of shares used in the basic and diluted net income per share calculations	Thirteen Weeks Ended Twenty-Six Weeks Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Numerator: Net income (loss) $ 3,241 $ (875) $ (3,523) $ (8,552) Denominator: Weighted-average common shares—basic 48,138,907 48,058,231 48,138,907 48,053,084 Options and other dilutive securities 380,259 — — — Weighted-average common shares—diluted 48,519,166 48,058,231 48,138,907 48,053,084 Net income (loss) per common share—basic and diluted $ 0.07 $ (0.02) $ (0.07) $ (0.18) Antidilutive securities not included: Stock options outstanding 2,350,339 2,958,961 2,637,068 2,945,881 Nonvested restricted stock awards 14,492 107,614 120,709 95,455

Accumulated other comprehensi_2

Accumulated other comprehensive income (Tables)	6 Months Ended
	Sep. 29, 2018
Accumulated other comprehensive income
Schedule of components of AOCI, net of tax	Foreign currency Pension Foreign hedge liability currency instruments adjustment translation Total Balance at March 31, 2018 $ (102) $ (1,793) $ (15,421) $ (17,316) Other comprehensive (loss) income before reclassifications, net of tax (1,214) 135 (4,639) (5,718) Amounts reclassified to earnings, net of tax (133) — — (133) Net current period other comprehensive (loss) income (1,347) 135 (4,639) (5,851) Balance at September 29, 2018 $ (1,449) $ (1,658) $ (20,060) $ (23,167)

Fair value measurements (Tables

Fair value measurements (Tables)	6 Months Ended
	Sep. 29, 2018
Fair value measurements
Schedule of items measured at fair value on a recurring basis, subject to the disclosure requirements of ASC 820	September 29, March 31, September 30, Description Balance Sheet Location 2018 2018 2017 Assets Nonqualified retirement plan (1) N/A Other current assets $ 6,011 $ 5,848 $ 5,445 Foreign currency forward contracts Level 2 Other current assets — — 2,067 Total assets $ 6,011 $ 5,848 $ 7,512 (1) The fair value amount of the nonqualified retirement plan is measured at fair value using the net asset value per share practical expedient, and therefore, is not classified in the fair value hierarchy.

Segment reporting (Tables)

Segment reporting (Tables)	6 Months Ended
	Sep. 29, 2018
Segment reporting
Schedule of segment reporting	Fiscal thirteen weeks ended September 29, 2018 TCS Elfa Eliminations Total Net sales to third parties $ 208,915 $ 15,538 $ — $ 224,453 Intersegment sales — 14,650 (14,650) — Adjusted EBITDA 21,228 3,839 (720) 24,347 Interest expense, net 7,295 82 — 7,377 Assets (1) 650,644 104,585 (3,775) 751,454 Fiscal thirteen weeks ended September 30, 2017 TCS Elfa Eliminations Total Net sales to third parties $ 202,321 $ 16,089 $ — $ 218,410 Intersegment sales — 13,497 (13,497) — Adjusted EBITDA 23,446 3,448 (378) 26,516 Interest expense, net 5,800 73 — 5,873 Assets (1) 661,994 113,554 (3,595) 771,953 Fiscal twenty-six weeks ended September 29, 2018 TCS Elfa Eliminations Total Net sales to third parties $ 388,997 $ 31,279 $ — $ 420,276 Intersegment sales — 25,045 (25,045) — Adjusted EBITDA 31,332 5,438 (32) 36,738 Interest expense, net 15,140 145 — 15,285 Assets (1) 650,644 104,585 (3,775) 751,454 Fiscal twenty-six weeks ended September 30, 2017 TCS Elfa Eliminations Total Net sales to third parties $ 369,380 $ 32,098 $ — $ 401,478 Intersegment sales — 22,541 (22,541) — Adjusted EBITDA 29,210 4,591 (855) 32,946 Interest expense, net 9,957 141 — 10,098 Assets (1) 661,994 113,554 (3,595) 771,953 (1) Tangible assets in the Elfa column are located outside of the United States.
Summary of reconciliation of Adjusted EBITDA by segment to income before taxes	A reconciliation of income (loss) before taxes to Adjusted EBITDA is set forth below: Thirteen Weeks Ended Twenty-Six Weeks Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Income (loss) before taxes $ 4,658 $ (358) $ (5,586) $ (12,620) Add: Depreciation and amortization 9,128 9,505 18,465 19,047 Interest expense, net 7,377 5,873 15,285 10,098 Pre-opening costs (a) 881 1,418 1,227 2,804 Non-cash rent (b) (581) (276) (1,218) (737) Stock-based compensation (c) 769 510 1,355 1,004 Loss on extinguishment of debt (d) 2,082 2,369 2,082 2,369 Foreign exchange losses (e) 9 130 47 54 Optimization Plan implementation charges (f) — 6,786 4,864 10,320 Elfa manufacturing facility closure (g) — 517 — 517 Other adjustments (h) 24 42 217 90 Adjusted EBITDA $ 24,347 $ 26,516 $ 36,738 $ 32,946 (a) Non-capital expenditures associated with opening new stores and relocating stores, including rent, marketing expenses, travel and relocation costs, and training costs. We adjust for these costs to facilitate comparisons of our performance from period to period. (b) Reflects the extent to which our annual GAAP rent expense has been above or below our cash rent payment due to lease accounting adjustments. The adjustment varies depending on the average age of our lease portfolio (weighted for size), as our GAAP rent expense on younger leases typically exceeds our cash cost, while our GAAP rent expense on older leases is typically less than our cash cost. (c) Non-cash charges related to stock-based compensation programs, which vary from period to period depending on volume and vesting timing of awards. We adjust for these charges to facilitate comparisons from period to period. (d) Loss recorded as a result of the amendments made to the Senior Secured Term Loan Facility in September 2018 and the amendments made to the Senior Secured Term Loan Facility and the Revolving Credit Facility in August 2017, which we do not consider in our evaluation of our ongoing operations. (e) Realized foreign exchange transactional gains/losses our management does not consider in our evaluation of our ongoing operations. (f) Charges incurred to implement our Optimization Plan, which include certain consulting costs recorded in SG&A expenses in the first quarter of fiscal 2018 and the first and second quarters of fiscal 2017, cash severance payments associated with the elimination of certain full-time positions at the TCS segment recorded in other expenses in the first and second quarters of fiscal 2017, and cash severance payments associated with organizational realignment at the Elfa segment recorded in other expenses in the first and second quarters of fiscal 2017, which we do not consider in our evaluation of ongoing performance. (g) Charges related to the closure of an Elfa manufacturing facility in Lahti, Finland in December 2017, recorded in other expenses, which we do not consider in our evaluation of our ongoing performance. (h) Other adjustments include amounts our management does not consider in our evaluation of our ongoing operations, including certain severance and other charges.

Description of business and b_3

Description of business and basis of presentation (Details)	Sep. 29, 2018ft²storestatecountry
Description of business and basis of presentation
Number of stores | store	92
Average size of stores (in square feet)	25,000
Average selling square feet in stores (in square feet)	19,000
Number of states | state	33
Elfa
Description of business and basis of presentation
Number of countries in which products are sold on wholesale basis | country	30

Description of business and b_4

Description of business and basis of presentation - Recent accounting pronouncements (Details) - USD ($) $ in Thousands	Sep. 29, 2018	Apr. 01, 2018	Mar. 31, 2018	Sep. 30, 2017
Recent accounting pronouncements
Retained Earnings (Accumulated Deficit)	$ (598,837)		$ (595,721)	$ (623,701)
Accrued Liabilities, Current	63,497		70,494	64,144
Inventory, Net	110,801		97,362	109,277
Other Assets, Current	$ 10,562		11,609	$ 13,021
ASU 2014-09
Recent accounting pronouncements
Retained Earnings (Accumulated Deficit)		$ 400
Accrued Liabilities, Current		$ (400)
Inventory, Net			(900)
Other Assets, Current			$ 900

Description of business and b_5

Description of business and basis of presentation - Contract Balances (Details) $ in Thousands	6 Months Ended
	Sep. 29, 2018USD ($)
Rollforward of contract liability balances
Contract liability beginning balance	$ 11,080
Contract liability balance ending balance	10,064
Unearned revenue
Rollforward of contract liability balances
Contract liability beginning balance	11,080
Revenue recognized from beginning liability	(10,571)
Contract liabilities added during period	9,555
Contract liability balance ending balance	10,064
Gift card and store credits outstanding
Rollforward of contract liability balances
Contract liability beginning balance	8,470
Revenue recognized from beginning liability	(2,000)
Contract liabilities added during period	1,936
Contract liability balance ending balance	$ 8,406

Detail of certain balance she_3

Detail of certain balance sheet accounts (Details) - USD ($) $ in Thousands	Sep. 29, 2018	Mar. 31, 2018	Sep. 30, 2017
Accounts receivable, net:
Trade receivables, net	$ 15,789	$ 15,968	$ 15,821
Credit card receivables	7,472	6,939	7,649
Tenant allowances	445	998	1,264
Other receivables	1,694	1,623	1,349
Accounts receivable, net	25,400	25,528	26,083
Inventory:
Finished goods	105,355	91,970	104,482
Raw materials	4,904	4,840	4,372
Work in progress	542	552	423
Inventory	110,801	97,362	109,277
Accrued Liabilities:
Accrued payroll, benefits and bonuses	19,810	23,833	20,748
Unearned revenue	10,064	11,080	8,819
Accrued transaction and property tax	10,805	12,846	11,888
Gift cards and store credits outstanding	8,406	8,891	8,561
Accrued lease liabilities	4,573	5,105	6,072
Accrued interest	966	292	246
Other accrued liabilities	8,873	8,447	7,810
Accrued liabilities	$ 63,497	$ 70,494	$ 64,144

Long-term debt and revolving _3

Long-term debt and revolving lines of credit - Term Loan Amendment and Revolving Amendment (Details) $ in Thousands	Sep. 14, 2018	Sep. 29, 2018USD ($)	Sep. 30, 2017USD ($)	Sep. 29, 2018USD ($)	Sep. 30, 2017USD ($)
Long-term debt and revolving lines of credit
Loss on extinguishment of debt		$ 2,082	$ 2,369	$ 2,082	$ 2,369
Revolving credit facility
Long-term debt and revolving lines of credit
Aggregate principle amount		100,000		100,000
Line of credit, draw down				10,000
Senior secured term loan facility
Long-term debt and revolving lines of credit
Fee premium imposed on voluntary prepayments (as a percent)	1.00%
Period in which a premium is imposed on voluntary prepayments, in months	12 months
Principal repayments				20,000
Outstanding borrowings		272,500		272,500
Loss on extinguishment of debt				2,082
Deferred financing costs		$ 2,217		$ 2,217
Senior secured term loan facility | Maximum
Long-term debt and revolving lines of credit
Debt Instrument leverage ratio covenant	2.75
Senior secured term loan facility | LIBOR
Long-term debt and revolving lines of credit
Debt instrument annual step down Leverage Ratio	4.75
Interest rate margin (as a percent)	5.00%
Senior secured term loan facility | Base rate
Long-term debt and revolving lines of credit
Debt instrument annual step down Leverage Ratio	3.75
Interest rate margin (as a percent)	4.00%

Long-term debt and revolving _4

Long-term debt and revolving lines of credit - Schedule of long-term debt and revolving lines of credit (Details) - USD ($) $ in Thousands	Sep. 29, 2018	Mar. 31, 2018	Sep. 30, 2017
Long-term debt and revolving lines of credit
Total debt	$ 299,137	$ 295,053	$ 322,012
Less current portion	(8,180)	(7,771)	(9,345)
Less deferred financing costs	(8,668)	(9,888)	(11,371)
Total long-term debt	282,289	277,394	301,296
Senior secured term loan facility
Long-term debt and revolving lines of credit
Total debt	272,500	294,375	298,125
Obligations under capital leases
Long-term debt and revolving lines of credit
Total debt	509	662	869
Other loans
Long-term debt and revolving lines of credit
Total debt		$ 16	75
2014 Elfa term loan facility
Long-term debt and revolving lines of credit
Total debt			2,943
2014 Elfa revolving credit facility
Long-term debt and revolving lines of credit
Total debt	1,128
Revolving credit facility
Long-term debt and revolving lines of credit
Total debt	$ 25,000		$ 20,000

Net income (loss) per common _3

Net income (loss) per common share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 29, 2018	Sep. 30, 2017	Sep. 29, 2018	Sep. 30, 2017
Numerator:
Net income (loss)	$ 3,241,000	$ (875,000)	$ (3,523,000)	$ (8,552,000)
Denominator:
Weighted-average common shares - basic (in shares)	48,138,907	48,058,231	48,138,907	48,053,084
Options and other dilutive securities	$ 380,259
Weighted-average common shares - diluted (in shares)	48,519,166	48,058,231	48,138,907	48,053,084
Net income (loss) per common share—basic and diluted	$ 0.07	$ (0.02)	$ (0.07)	$ (0.18)
Stock options outstanding
Antidilutive securities not included:
Antidilutive securities	2,350,339	2,958,961	2,637,068	2,945,881
Nonvested restricted stock awards
Antidilutive securities not included:
Antidilutive securities	14,492	107,614	120,709	95,455

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 29, 2018	Sep. 30, 2017	Sep. 29, 2018	Sep. 30, 2017
Income taxes
Provision (benefit) for income taxes	$ 1,417	$ 517	$ (2,063)	$ (4,068)
Remeasurement of deferred tax balances			$ 604
Effective income tax rate (as a percent)	30.40%	(144.40%)	36.90%	32.20%

Income taxes - Tax Cuts and Job

Income taxes - Tax Cuts and Jobs Act (Details) $ in Thousands	12 Months Ended
	Mar. 31, 2018USD ($)
Income taxes
Net provisional tax benefit	$ 15,689
Provisional benefit related to the remeasurement of deferred tax balances	24,210
Provisional expense related to the one-time transition tax on foreign earnings	$ 8,521

Commitments and contingencies (

Commitments and contingencies (Details) $ in Thousands	Sep. 29, 2018USD ($)
Standby letters of credit
Commitments and contingencies
Amount outstanding	$ 3,852

Accumulated other comprehensi_3

Accumulated other comprehensive income (Details) $ in Thousands	6 Months Ended
	Sep. 29, 2018USD ($)
Rollforward of the amounts included in AOCI, net of taxes
Balance beginning of period	$ (17,316)
Other comprehensive income (loss) before reclassifications, net of tax	(5,718)
Amounts reclassified to earnings, net of tax	(133)
Net current period other comprehensive (loss) income	(5,851)
Balance end of period	(23,167)
Pension liability adjustment
Rollforward of the amounts included in AOCI, net of taxes
Balance beginning of period	(1,793)
Other comprehensive income (loss) before reclassifications, net of tax	135
Net current period other comprehensive (loss) income	135
Balance end of period	(1,658)
Foreign currency translation
Rollforward of the amounts included in AOCI, net of taxes
Balance beginning of period	(15,421)
Other comprehensive income (loss) before reclassifications, net of tax	(4,639)
Net current period other comprehensive (loss) income	(4,639)
Balance end of period	(20,060)
Foreign currency hedge instruments
Rollforward of the amounts included in AOCI, net of taxes
Balance beginning of period	(102)
Other comprehensive income (loss) before reclassifications, net of tax	(1,214)
Amounts reclassified to earnings, net of tax	(133)
Net current period other comprehensive (loss) income	(1,347)
Balance end of period	$ (1,449)

Foreign currency forward cont_2

Foreign currency forward contracts (Details) - USD ($) $ in Thousands	6 Months Ended
	Sep. 29, 2018	Sep. 30, 2017
Foreign Currency Forward Contracts
Purchase of inventory from use of forward contracts in Swedish krona (as a percent)	94.00%	100.00%
Purchase of U.S. dollars from use of forward contracts	$ 0	$ 1,648
Purchase of U.S. dollars from use of forward contracts as a percent of Elfa's U.S. Dollar purchases	0.00%	54.00%
Foreign currency forward contracts | Not Designated as Hedging Instrument
Foreign Currency Forward Contracts
Loss associated with the change in fair value of forward contracts not designated as hedging instruments	$ 0
Foreign currency hedge instruments | Designated as Hedging Instrument | Cash Flow Hedging
Foreign Currency Forward Contracts
Loss in accumulated other comprehensive loss related to foreign currency hedge instruments	(1,449)
Unrealized loss for settled foreign currency hedge instruments	(930)
Unrealized loss to be reclassified into earnings over the next 12 months	$ (930)
Minimum | Foreign currency forward contracts
Foreign Currency Forward Contracts
Term of contract	1 month
Maximum | Foreign currency forward contracts
Foreign Currency Forward Contracts
Term of contract	12 months

Fair value measurements (Detail

Fair value measurements (Details) - USD ($) $ in Thousands	Sep. 29, 2018	Mar. 31, 2018	Sep. 30, 2017
Fair value
Liabilities
Estimated fair value of long-term debt, including current maturities	$ 299,137	$ 295,605	$ 311,578
Recurring
Assets
Total assets	6,011	5,848	7,512
Recurring | Other current assets
Assets
Nonqualified retirement plan	$ 6,011	$ 5,848	5,445
Not Designated as Hedging Instrument | Recurring | Foreign currency forward contracts | Level 2 | Other current assets
Assets
Foreign currency forward contracts			$ 2,067

Segment reporting (Details)

Segment reporting (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 29, 2018USD ($)segmentcountry	Sep. 30, 2017USD ($)	Sep. 29, 2018USD ($)country	Sep. 30, 2017USD ($)	Mar. 31, 2018USD ($)
Segment reporting
Number of reportable segments | segment	2
Segment reporting
Sales	$ 224,453	$ 218,410	$ 420,276	$ 401,478
Adjusted EBITDA	24,347	26,516	36,738	32,946
Interest expense, net	7,377	5,873	15,285	10,098
Assets	$ 751,454	771,953	$ 751,454	771,953	$ 749,369
Elfa
Segment reporting
Number of countries in which products are sold on wholesale basis | country	30		30
Operating segments | TCS
Segment reporting
Sales	$ 208,915	202,321	$ 388,997	369,380
Adjusted EBITDA	21,228	23,446	31,332	29,210
Interest expense, net	7,295	5,800	15,140	9,957
Assets	650,644	661,994	650,644	661,994
Operating segments | Elfa
Segment reporting
Sales	15,538	16,089	31,279	32,098
Adjusted EBITDA	3,839	3,448	5,438	4,591
Interest expense, net	82	73	145	141
Assets	104,585	113,554	104,585	113,554
lntersegment
Segment reporting
Sales	(14,650)	(13,497)	(25,045)	(22,541)
Adjusted EBITDA	(720)	(378)	(32)	(855)
Assets	(3,775)	(3,595)	(3,775)	(3,595)
lntersegment | Elfa
Segment reporting
Sales	$ 14,650	$ 13,497	$ 25,045	$ 22,541

Segment reporting - Reconciliat

Segment reporting - Reconciliation of Adjusted EBITDA by segment to income before taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 29, 2018	Sep. 30, 2017	Sep. 29, 2018	Sep. 30, 2017
Segment reporting
Loss before taxes	$ 4,658	$ (358)	$ (5,586)	$ (12,620)
Depreciation and amortization	9,128	9,505	18,465	19,047
Interest expense, net	7,377	5,873	15,285	10,098
Pre-opening costs	(881)	(1,418)	(1,227)	(2,804)
Non-cash rent	(581)	(276)	(1,218)	(737)
Stock-based compensation	(769)	(510)	(1,355)	(1,004)
Loss on extinguishment of debt	(2,082)	(2,369)	(2,082)	(2,369)
Foreign exchange losses	(9)	(130)	(47)	(54)
Optimization Plan implementation charges		(6,786)	(4,864)	(10,320)
Elfa manufacturing facility closure		517		517
Other adjustments	24	42	217	90
Adjusted EBITDA	$ 24,347	$ 26,516	$ 36,738	$ 32,946