Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Entity Listings [Line Items] | ||
Entity Registrant Name | Thermon Group Holdings, Inc. | |
Entity Central Index Key | 1,489,096 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 32,257,939 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 72,558 | $ 84,570 |
Accounts receivable, net of allowance for doubtful accounts of $609 and $656 as of June 30, 2016 and March 31, 2016, respectively | 57,151 | 58,493 |
Inventories, net | 41,100 | 40,645 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 9,274 | 7,605 |
Prepaid expenses and other current assets | 11,111 | 8,231 |
Income Tax Receivable | 209 | 209 |
Total current assets | 191,403 | 199,753 |
Property, plant and equipment, net | 41,983 | 41,617 |
Goodwill | 124,613 | 121,510 |
Intangible assets, net | 96,052 | 103,998 |
Long term deferred income taxes | 2,600 | 1,476 |
Other long term assets | 320 | 323 |
Total assets | 456,971 | 468,677 |
Current liabilities: | ||
Accounts payable | 14,824 | 19,458 |
Accrued liabilities | 13,396 | 18,238 |
Current portion of long term debt | 15,188 | 13,500 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 4,352 | 3,438 |
Income taxes payable | 1,356 | 2,937 |
Total current liabilities | 49,116 | 57,571 |
Long-term debt, net of current maturities | 75,144 | 80,112 |
Deferred income taxes | 27,571 | 29,114 |
Other noncurrent liabilities | 3,257 | 3,179 |
Total liabilities | 155,088 | 169,976 |
Equity | ||
Common stock: $.001 par value; 150,000,000 authorized; 32,240,876 and 32,222,720 shares issued and outstanding at June 30, 2016 and March 31, 2016, respectively | 32 | 32 |
Preferred stock: $.001 par value; 10,000,000 authorized; no shares issued and outstanding | 0 | 0 |
Additional paid in capital | 217,552 | 216,701 |
Accumulated other comprehensive income | (44,882) | (44,569) |
Retained earnings (accumulated deficit) | 124,784 | 122,258 |
Total Thermon Group Holdings, Inc. shareholders' equity | 297,486 | 294,422 |
Non-controlling interests | 4,397 | 4,279 |
Total equity | 301,883 | 298,701 |
Total liabilities and equity | $ 456,971 | $ 468,677 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 |
Debt issuance costs, net | $ 793 | $ 888 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 32,240,876 | 32,222,720 |
Common stock, shares outstanding | 32,240,876 | 32,222,720 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury Stock, Shares | 0 | 0 |
Thermon Holding Corp. | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 609 | $ 656 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 3 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Sales | $ 63,396,000 | $ 65,223,000 |
Cost of sales | 37,282,000 | 34,486,000 |
Gross profit | 26,114,000 | 30,737,000 |
Operating expenses: | ||
Marketing, general and administrative and engineering | 19,108,000 | 19,849,000 |
Amortization of intangible assets | 2,816,000 | 2,816,000 |
Income from operations | 4,190,000 | 8,072,000 |
Other income/(expenses): | ||
Interest income | 106,000 | 107,000 |
Interest expense | (914,000) | (1,018,000) |
Other income (expense) | 277,000 | (168,000) |
Income before provision for income taxes | 3,659,000 | 6,993,000 |
Income tax expense | 1,015,000 | 2,467,000 |
Net income | 2,644,000 | 4,526,000 |
Income attributable to non-controlling interests | 118,000 | 97,000 |
Net income (loss) | 2,526,000 | 4,429,000 |
Comprehensive income: | ||
Net income (loss) | 2,526,000 | 4,429,000 |
Foreign currency translation adjustment | (182,000) | 2,396,000 |
Derivative valuation, net of tax | (131,000) | 102,000 |
Comprehensive income | $ 2,213,000 | $ 6,927,000 |
Net Income per common share: | ||
Basic (in dollars per share) | $ 0.08 | $ 0.14 |
Diluted (in dollars per share) | $ 0.08 | $ 0.14 |
Weighted-average shares used in computing net income per common share: | ||
Basic (in shares) | 32,232,340 | 32,103,274 |
Diluted (in shares) | 32,694,235 | 32,492,004 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating activities | ||
Net income | $ 2,644 | $ 4,526 |
Adjustment to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 4,230 | 4,012 |
Amortization of deferred debt issuance costs | 102 | 109 |
Stock compensation expense | 906 | 875 |
Deferred income taxes | (833) | (592) |
Other | (108) | (254) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,334 | 7,206 |
Inventories | (411) | (1,370) |
Costs and estimated earnings in excess of billings on uncompleted contracts | (766) | 993 |
Other current and noncurrent assets | (2,787) | (1,036) |
Accounts payable | (4,557) | (1,457) |
Accrued liabilities and noncurrent liabilities | (4,312) | (5,297) |
Income taxes payable and receivable | (2,476) | (3,736) |
Net cash provided by (used in) operating activities | (7,034) | 3,979 |
Investing activities | ||
Purchases of property, plant and equipment | (2,009) | (3,783) |
Sale of rental equipment at net book value | 20 | 0 |
Proceeds from sale of property, plant and equipment | 441 | 0 |
Cash paid for acquisitions (net of cash acquired) | 0 | (10,956) |
Net cash used in investing activities | (1,548) | (14,739) |
Financing activities | ||
Payments on long term debt | (3,375) | (3,375) |
Proceeds from exercise of stock options | 67 | 64 |
Repurchase of employee stock units on vesting | (122) | (708) |
Lease financing | (68) | (52) |
Net cash used in financing activities | (3,498) | (4,071) |
Effect of exchange rate changes on cash and cash equivalents | 68 | 420 |
Change in cash and cash equivalents | (12,012) | (14,411) |
Cash and cash equivalents at beginning of period | 84,570 | 93,774 |
Cash and cash equivalents at end of period | $ 72,558 | $ 79,363 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policy Information | 3 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Accounting Policy Information | Basis of Presentation and Accounting Policy Information Thermon Group Holdings, Inc. and its direct and indirect subsidiaries are referred to collectively as “we,” “our,” or the “Company” herein. We are a provider of highly engineered thermal solutions for process industries. Our thermal solutions, also referred to as heat tracing, provide an external heat source to pipes, vessels and instruments for the purposes of freeze protection, temperature and flow maintenance, environmental monitoring, and surface snow and ice melting. As a manufacturer, we provide a suite of products (heating cables, tubing bundles and control systems) and services (design optimization, engineering, installation and maintenance services) required to deliver comprehensive solutions to complex projects. In addition to our thermal solution offerings, we offer temporary power products that are designed to provide a safe and efficient means of supplying temporary electrical power distribution and lighting at energy infrastructure facilities for new construction and during maintenance and turnaround projects at operating facilities. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended March 31, 2016 . In our opinion, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring items) considered necessary to present fairly our financial position at June 30, 2016 and March 31, 2016 , and the results of our operations for the three months ended June 30, 2016 and 2015 . Use of Estimates Generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. While our management has based their assumptions and estimates on the facts and circumstances existing at June 30, 2016 , actual results could differ from those estimates and affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities and the corresponding revenues and expenses as of the date of the financial statements. The operating results for the three months ended June 30, 2016 are not necessarily indicative of the results that may be achieved for the fiscal year ending March 31, 2017 . Recent Accounting Pronouncements Revenue Recognition - In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09 “Revenue from Contracts with Customers” (Topic 606), which amends the existing revenue recognition requirements and guidance. Under the new guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company will adopt the standard on April 1, 2018. We have not selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. Stock Compensation - In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-12 "Compensation-Stock Compensation" (Topic 718), which clarified the treatment of share-based payments when a performance target could be achieved after the requisite service period. Under the new guidance, compensation cost should be recognized over the requisite service period when it becomes probable that the performance target will be achieved. The total compensation cost recognized should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. We adopted this standard effective April 1, 2015 and it did not have a material impact on our condensed consolidated financial statements. Stock Compensation - In March 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-09 "Compensation-Stock Compensation" (Topic 718), which changes the accounting for certain aspects of share-based payments to employees. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. Additionally, cash flows related to excess tax benefits will no longer be separately classified as a financing activity and will be included as an operating activity on the consolidated statements of cash flows. The guidance allows for an accounting policy election to account for forfeitures as they occur. The standard is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the requirements of the standard and have not yet determined its impact on our consolidated financial statements. Interest- In April 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-3 "Interest-Imputation of Interest" (Subtopic 835-30). The new guidance changes the presentation of debt issuance costs in financial statements and specifies that debt issuance costs related to a note shall be reported in the balance sheet as a direct deduction from the associated face amount of the note. The guidance does not change the current guidance related to the recognition and measurement of debt issuance costs. The amortization of debt issuance costs will continue to be reported as interest expense. The guidance is effective for years and interim periods within those fiscal years beginning after December 15, 2015. The new guidance shall be applied to all prior periods retrospectively. We adopted this standard as of March 31, 2016 and, effective upon such adoption, deferred debt issuance costs associated with our term loan are offset against, and reduce, our long term debt obligation. The adoption of this guidance has had no impact on the presentation of our condensed consolidated statements of operations. Interes t- In August 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-15 "Imputation of Interest" (Subtopic 835-30). The guidance clarified the treatment of the presentation of debt issuance costs associated with a revolving line of credit. Under the guidance these costs can continue to be reported as an asset. As there were no changes to the pre-existing guidance the standard is considered to be effective immediately and had no impact on our condensed consolidated financial statements. Upon the adoption of this standard, deferred debt issuance costs associated with our revolving credit facility are reported as other long term assets in the condensed consolidated balance sheets. Inventory- In July 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-11 "Simplifying the Measurement of Inventory" (Topic 330). Under the new guidance, inventory is measured at the lower of cost and net realizable value, and the new guidance eliminates the use of replacement cost and net realizable value less a normal profit margin as techniques to value inventory. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The new guidance will be applied prospectively for annual periods and interim periods within fiscal years beginning after December 15, 2016. We do not anticipate the adoption of this standard will have a material impact on our condensed consolidated financial statements. Business Combinations- In September 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-16 "Simplifying the Accounting for Measurement-Period Adjustments" (Topic 805). Under the new guidance, an acquirer must recognize adjustments to provisional amounts that are identified in the reporting period in which the adjustments amounts are determined. Companies are required to disclose the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustments to the provisional amounts had been recognized as of the acquisition date. The new guidance is to be applied prospectively for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted. We adopted this standard in September 2015. During the three months ended June 30, 2016, we adjusted our provisional estimates of goodwill and other intangible assets related to our IPI acquisition. See Note 5. Acquisitions, Goodwill and Other Intangible Assets. Income Taxes- In November 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-17 "Income Taxes" (Topic 740), which requires an entity to present all deferred income tax assets and liabilities as noncurrent. Under the previous guidance, an entity had to classify deferred income tax assets and liabilities into current and noncurrent based on the classification of the related asset or liability. The new guidance is effective for annual periods beginning after December 15, 2016 and interim periods within those years. Early adoption is permitted. In the year of adoption, the guidance can be applied either prospectively or retrospectively. We adopted this standard as of March 31, 2016. The adoption of this guidance did not have an impact on our condensed consolidated statements of operations or condensed consolidated statement of cash flows. Financial Instruments- In January 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-01 "Financial Instruments-Overall" (Subtopic 825-10), which amends the guidance on the classification and measurement of financial instruments. The amendment requires all equity investments to be measured at fair value with changes in the fair value recognized through earnings. The amendment also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the credit risk when an entity has elected the fair value option. The guidance eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Early adoption is permitted for certain provisions of the accounting standards update. Upon the adoption of the standard, an entity will be required to make a cumulative-effect adjustment to retained earnings as of the beginning of such reporting period. We are currently evaluating when to adopt this standard. Upon adoption, we do not anticipate this standard will have a material impact on our condensed consolidated financial statements. Leases - In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-02 "Leases" (Topic 842), which provides guidance on the recognition, measurement, presentation and disclosure on leases. Under the standard, substantially all leases will be reported on the balance sheet as right-of-use assets and lease liabilities. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the requirements of the standard and have not yet determined its impact on our condensed consolidated financial statements. Financial Instruments- In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13 "Financial Instruments-Credit Losses" (Topic 326), which amends the guidance on the impairment of financial instruments. The standard adds an impairment model, referred to as current expected credit loss, which is based on expected losses rather than incurred losses. The standard applies to most debt instruments, trade receivables, lease receivables, reinsurance receivables, financial guarantees and loan commitments. Under the guidance, companies are required to disclose credit quality indicators disaggregated by year of origination for a five-year period. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. We do not anticipate this will have a material impact to our condensed consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair Value . We measure fair value based on authoritative accounting guidance, which defines fair value, establishes a framework for measuring fair value and expands on required disclosures regarding fair value measurements. Inputs are referred to as assumptions that market participants would use in pricing the asset or liability. The uses of inputs in the valuation process are categorized into a three-level fair value hierarchy. • Level 1 — uses quoted prices in active markets for identical assets or liabilities we have the ability to access. • Level 2 — uses observable inputs other than quoted prices in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3 — uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Financial assets and liabilities with carrying amounts approximating fair value include cash, trade accounts receivable, accounts payable, accrued expenses and other current liabilities. The carrying amount of these financial assets and liabilities approximates fair value because of their short maturities. At June 30, 2016 and March 31, 2016 , no assets or liabilities were valued using Level 3 criteria. Information about our long-term debt that is not measured at fair value is as follows: June 30, 2016 March 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Valuation Technique Financial Liabilities Outstanding principal amount of senior secured credit facility $ 91,125 $ 91,125 $ 94,500 $ 94,500 Level 2 - Market Approach At June 30, 2016 and March 31, 2016 , the fair value of our variable rate term loan approximates its carrying value as we pay interest based on the current market rate. As the quoted price is only available for similar financial assets, the Company concluded the pricing is indirectly observable through dealers and has been classified as Level 2. Foreign Currency Forward Contracts We transact business in various foreign currencies and have established a program that primarily utilizes foreign currency forward contracts to offset the risk associated with the effects of certain foreign currency exposures. Under this program, increases or decreases in our foreign currency exposures are intended to be offset by gains or losses on the forward contracts to mitigate foreign currency transaction gains or losses. These foreign currency exposures typically arise from intercompany transactions. Our forward contracts generally have terms of 30 days. We do not use forward contracts for trading purposes or designate these forward contracts as hedging instruments pursuant to ASC 815. We adjust the carrying amount of all contracts to their fair value at the end of each reporting period and unrealized gains and losses are included in our results of operations for that period. These gains and losses are designed to offset gains and losses resulting from settlement of payments received from our foreign operations which are settled in U.S. dollars. The fair value is determined by quoted prices from active foreign currency markets (Level 2 fair value). The condensed consolidated balance sheets reflect unrealized gains within accounts receivable, net and unrealized losses within accrued liabilities. Our ultimate realized gain or loss with respect to currency fluctuations will depend on the currency exchange rates and other factors in effect as the contracts mature. As of June 30, 2016 and March 31, 2016 , the notional amounts of forward contracts were as follows: Notional amount of foreign currency forward contracts by currency June 30, 2016 March 31, 2016 Russian Ruble $ 2,049 $ 1,237 Euro 2,429 4,224 Canadian Dollar 430 534 South Korean Won 3,496 3,050 Mexican Peso 843 837 Australian Dollar 1,141 1,042 Chinese Renminbi 502 334 Brazilian Real 302 336 South African Rand 178 317 Total notional amounts $ 11,370 $ 11,911 The following table represents the fair value of our foreign currency forward contracts: June 30, 2016 March 31, 2016 Fair Value Fair Value Assets Liabilities Assets Liabilities Foreign currency forward contracts $ 54 $ 2 $ 5 $ 25 Foreign currency gains or losses related to our forward contracts in the accompanying condensed consolidated statements of operations and comprehensive income were losses of $130 and $419 for the three months ended June 30, 2016 and 2015 , respectively. Gains and losses from our forward contracts were offset by transaction gains or losses incurred with the settlement of transactions denominated in foreign currencies. For the three months ended June 30, 2016 and 2015 , our net foreign currency losses were $32 and $161 , respectively. All outstanding foreign currency forward contracts are marked to market at the end of the period with unrealized gains and losses included in other income and expense, within our condensed consolidated statements of operations. Interest Rate Swaps The Company entered into two interest rate swap contracts to reduce the exposure to interest rate fluctuations associated with its variable rate term loan. Under the swap agreements, we pay a fixed amount and receive or make payments based on a variable rate. The Company designated the interest rate swap contracts as cash flow hedges pursuant to ASC 815. The Company formally documents all relationships between the hedging instrument and hedged item, its risk management objective and strategy, as well as counterparty creditworthiness. At each reporting period our interest rate swap contracts are adjusted to fair value based on dealer quotes, which consider forward yield curves and volatility levels (Level 2 fair value). Unrealized gains, representing derivative assets, are reported within accounts receivable, net and unrealized losses, representing derivative liabilities, are reported within accrued liabilities on the accompanying condensed consolidated balance sheets. As of June 30, 2016 and March 31, 2016 , the fair values of the interest rate swap contracts were unrealized losses of $1,390 and $1,178 , respectively. The change in fair value of the derivative instruments is recorded in accumulated other comprehensive income (loss) to the extent the derivative instruments are deemed effective. Ineffectiveness is measured based on the changes in fair value of the interest rate swap contracts and the change in fair value of the hypothetical derivative and is recognized in earnings in the period in which ineffectiveness is realized. Based on the criteria established by ASC 815, the interest rate swap contracts are deemed to be highly effective. Any realized gains or losses resulting from the interest rate swap contract are recognized within interest expense. Gains and losses from our interest rate swap contract are offset by changes in the variable interest rate on our term loan. During the three months ended June 30, 2016 , our interest rate on outstanding principal amounts was fixed at approximately 3.18% . D uring the three months ended December 31, 2015, the Company entered into a second interest rate swap contract to hedge interest payments on the previously unhedged portion of principal on its variable rate secured term loan where the Company previously had interest rate exposure. As of June 30, 2016 , 100% of our interest payments on our variable rate term loan are hedged through its maturity in April 2019. The following table summarizes the aggregate unrealized loss in accumulated other comprehensive loss, and the losses reclassified into earnings for the three months ended June 30, 2016 and 2015 : Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 Before Tax Amount Tax Expense (Benefit) Other Comprehensive loss, net Before Tax Amount Tax Expense (Benefit) Other Comprehensive loss, net Unrealized loss at beginning of the period $ (1,269 ) $ (444 ) $ (825 ) $ (746 ) $ (261 ) $ (485 ) Add: loss from change in fair value of cash flow hedge (369 ) (129 ) (240 ) (106 ) (37 ) (69 ) Less: loss reclassified into earnings from effective hedge (157 ) (55 ) (102 ) (252 ) (88 ) (164 ) Less: ineffective portion of hedge transferred into earnings (11 ) (4 ) (7 ) (11 ) (4 ) (7 ) Unrealized loss at end of the period $ (1,470 ) $ (514 ) $ (956 ) $ (589 ) $ (206 ) $ (383 ) Transfers out of accumulated other comprehensive loss During the three ended June 30, 2016 and 2015 , there were no transfers out of accumulated other comprehensive loss except for realized losses from our interest rate swap contract presented in the preceding tables, which were recorded within interest expense in our statements of operations and comprehensive income. |
Earnings and Net Income (Loss)
Earnings and Net Income (Loss) per Common Share | 3 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings and Net Income (Loss) per Common Share | Net Income per Common Share Basic net income per common share is computed by dividing net income available to Thermon Group Holdings, Inc. by the weighted average number of common shares outstanding during each period. Diluted net income per common share is computed by dividing net income available to Thermon Group Holdings, Inc. by the weighted average number of common shares and common share equivalents outstanding (if dilutive) during each period. The number of common share equivalents, which includes options and both restricted and performance stock units, is computed using the treasury stock method. With regard to the performance stock units, we assumed that the target number of shares would be issued within the calculation of diluted net income per common share. The reconciliations of the denominators used to calculate basic and diluted net income per common share for the three months ended June 30, 2016 and 2015 , respectively, are as follows: Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 Basic net income per common share Net income available to Thermon Group Holdings, Inc. $ 2,526 $ 4,429 Weighted-average common shares outstanding 32,232,340 32,103,274 Basic net income per common share $ 0.08 $ 0.14 Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 Diluted net income per common share Net income available to Thermon Group Holdings, Inc. $ 2,526 $ 4,429 Weighted-average common shares outstanding 32,232,340 32,103,274 Common share equivalents: Stock options 227,134 253,895 Restricted and performance stock units 234,761 134,835 Weighted average shares outstanding – dilutive (1) 32,694,235 32,492,004 Diluted net income per common share $ 0.08 $ 0.14 (1) For the three months ended June 30, 2016 and 2015, 47,706 and 69,613 equity awards were not included in the calculation of diluted net income per common share, respectively, as they would have an anti-dilutive effect. |
Inventories
Inventories | 3 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: June 30, March 31, Raw materials $ 14,348 $ 13,322 Work in process 2,021 3,065 Finished goods 26,123 25,545 42,492 41,932 Valuation reserves (1,392 ) (1,287 ) Inventories, net $ 41,100 $ 40,645 |
Goodwill
Goodwill | 3 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Acquisitions, Goodwill and Other Intangible Assets Industrial Process Insulators ("IPI") Transaction On July 31, 2015, a wholly owned indirect subsidiary of the Company acquired 100% of the capital stock of Industrial Process Insulators ("IPI") for $21,750 , subject to a customary working capital adjustment. The results of IPI's operations have been included in the consolidated financial statements since that date. IPI is an insulation contractor serving the refining, petrochemical, power and energy, marine and pulp and paper industries in the United States, with a significant presence in the Texas and Louisiana Gulf Coast region. Prior to the acquisition, IPI was formerly a customer and subcontractor to the Company for the past 17 years and some members of IPI's senior management team are former company employees. The acquisition is expected to enhance our turn-key product offerings and strengthen our presence and relationships in the Gulf Coast region as IPI serves many of the same end-markets as those served by our core thermal solutions business. We recognized $13,422 in goodwill associated with the IPI acquisition. Consideration to or on behalf of sellers at close $ 21,750 Fair value of total consideration transferred $ 21,750 The following table summarizes the fair value of the assets and liabilities assumed: Assets acquired: Cash $ 1,526 Accounts receivable 3,723 Inventories 474 Other current assets 204 Property, plant and equipment 119 Identifiable intangible assets 8,756 Goodwill 13,422 Total assets 28,224 Liabilities assumed: Current liabilities 2,203 Uncertain tax position liability 1,119 Noncurrent deferred tax liability 3,152 Total liabilities 6,474 Total consideration $ 21,750 The fair value of accounts receivable represents IPI's gross outstanding receivables as of the acquisition date, all of which were fully collected. Our identifiable intangible assets at June 30, 2016 and March 31, 2016 that were related to the IPI transaction consisted of the following: Amortization period Gross Carrying Amount at June 30, 2016 Accumulated Amortization Net Carrying Amount at June 30, 2016 Gross Carrying Amount March 31, 2016 Accumulated Amortization Net Carrying Amount at March 31, 2016 Customer relationships 8 years $ 5,692 $ 652 $ 5,040 $ 10,720 $ 715 $ 10,005 Trademark 8 years 1,820 209 1,611 1,820 152 1,668 Non-compete agreement 3 years 807 246 561 $ 807 $ 179 $ 628 Total $ 8,319 $ 1,107 $ 7,212 $ 13,347 $ 1,046 $ 12,301 The weighted average useful life of acquired finite lived intangible assets related to the IPI transaction is 7.2 years . During the three months ended June 30, 2016, we finalized our provisional purchase accounting for the IPI transaction. The table below summarizes our provisional estimates of the fair value of assets and liabilities assumed as well as the final fair value of assets and liabilities assumed: Provisional Fair Value Final Fair Value Customer relationships $ 10,720 $ 5,692 Goodwill 10,204 13,422 Noncurrent deferred tax liability 4,962 3,152 We determined the useful lives of our customer relationships were 8 years, where we originally estimated the useful life to be 10 years. As a result of the change in the estimated fair value and useful life of our customer relationships, we recorded a cumulative reduction of amortization of intangible asset expense of $330 during the three months ended June 30, 2016. At June 30, 2016 , approximately $4,005 of the purchase price was held in escrow to secure the sellers' indemnification obligations in the event of any breaches of representations and warranties contained in the definitive agreements. Sumac Transaction On April 1, 2015, Thermon Canada, Inc. ("TCI"), a wholly owned indirect subsidiary of the Company, acquired a 75% controlling interest in the business previously operated by Sumac Fabrication Company Limited ("Sumac") for $10,956 , (based on the Canadian Dollar to U.S. Dollar exchange rate on April 1, 2015) in cash, plus a non-interest bearing note ("performance based note") with a principal amount of $5,905 (based on the Canadian Dollar to U.S. Dollar exchange rate on April 1, 2015) that matured on April 1, 2016, with the actual amount payable at maturity ranging from zero up to a maximum of $7,500 Canadian Dollars, subject to the achievement of certain performance metrics during the 12 month period ended April 1, 2016. During the three months ended June 30, 2016, we paid Sumac's principals $5,805 to satisfy all of the Company's obligations under the performance based note. Sumac is located in Fort McMurray, Alberta, Canada. Sumac's line of products and solutions are designed to provide a safe and efficient means of supplying temporary electrical power distribution and lighting at energy infrastructure facilities for new construction and during maintenance and turnaround projects at operating facilities. Sumac products include power distribution panels, master/slave sub-panels, power cords and lighting fixtures. Sumac products are sold to end-users operating in many of the same markets as our core thermal solutions, including heavy industrial settings, oil and gas refining and upgrading, power generation plants, petrochemical production facilities and mining operations. We believe we will be able to leverage our existing global sales force to further expand the reach of Sumac's product offerings. We recognized $7,992 of goodwill in connection with the Sumac acquisition that we expect will be partially deductible for Canadian taxation purposes. Consideration to or on behalf of sellers at close $ 10,956 Fair value of total consideration transferred $ 10,956 The following table summarizes the fair value of the assets and liabilities assumed: Assets acquired: Accounts receivable $ 1,693 Inventories 1,299 Other current assets 33 Property, plant and equipment 1,316 Identifiable intangible assets 3,085 Goodwill 7,992 Deferred tax asset 111 Total assets 15,529 Liabilities assumed: Current liabilities 935 Total liabilities 935 Non-controlling interests 3,638 Total consideration $ 10,956 The fair value of accounts receivable represents Sumac's gross outstanding receivables as of the acquisition date all of which were fully collected. Our identifiable intangible assets at June 30, 2016 and March 31, 2016 that were related to the Sumac transaction consisted of the following: Amortization period Gross Carrying Amount at June 30, 2016 Accumulated Amortization Net Carrying Amount at June 30, 2016 Gross Carrying Amount March 31, 2016 Accumulated Amortization Net Carrying Amount at March 31, 2016 Customer relationships 4 years 2,626 821 1,805 2,612 653 1,959 Non-compete agreement 2 years 195 121 74 194 97 97 Total $ 2,821 $ 942 $ 1,879 $ 2,806 $ 750 $ 2,056 The weighted average useful life of acquired finite lived intangible assets related to Sumac transaction is 3.6 years. At June 30, 2016 , approximately $1,103 of the purchase price was held in escrow to secure the sellers' indemnification obligations in the event of any breaches of representations and warranties contained in the definitive agreements. Our total other intangible assets consisted of the following: Gross Carrying Amount at June 30, 2016 Accumulated Amortization Net Carrying Amount at June 30, 2016 Gross Carrying Amount March 31, 2016 Accumulated Amortization Net Carrying Amount at March 31, 2016 Trademarks $ 45,160 $ 305 $ 44,855 $ 45,234 $ 237 $ 44,997 Developed technology 9,933 3,111 6,822 9,950 2,988 6,962 Customer relationships 100,634 57,341 43,293 105,720 54,913 50,807 Certification 448 — 448 449 — 449 Other 2,632 1,998 634 2,631 1,848 783 Total $ 158,807 $ 62,755 $ 96,052 $ 163,984 $ 59,986 $ 103,998 Goodwill The carrying amount of goodwill by operating segment as of June 30, 2016 is as follows: United States Canada Europe Asia Total Balance as of March 31, 2016 $ 48,971 $ 44,488 $ 19,427 $ 8,624 $ 121,510 Adjustments to purchase price allocation 3,218 — — — 3,218 Foreign currency translation impact — 241 (356 ) — (115 ) Balance as of June 30, 2016 $ 52,189 $ 44,729 $ 19,071 $ 8,624 $ 124,613 The excess purchase price over the fair value of assets acquired is recorded as goodwill. Goodwill is tested for impairment on an annual basis, and between annual tests if indicators of potential impairment exist. We perform a qualitative analysis to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. In addition to the qualitative analysis, we also perform a quantitative analysis using the income approach, based on discounted future cash flows, which are derived from internal forecasts and economic expectations, and the market approach based on market multiples of guideline public companies. The most significant inputs in the Company's goodwill impairment tests are projected financial information, the weighted average cost of capital and market multiples for similar transactions. Our annual impairment test is performed during the fourth quarter of our fiscal year. The Sumac transaction was structured as an asset purchase and we expect that the $7,836 in goodwill associated with that transaction will be partially deductible for tax purposes in Canada. All other goodwill at June 30, 2016 is not deductible for tax purposes. During the year ended March 31, 2016, revenue from our organic Canadian operations (excluding our Sumac acquisition) decreased by approximately 54% as compared to the year ended March 31, 2015. During the three months ended June 30, 2016, we experienced a further revenue decline of 19% as compared to the three months ended June 30, 2015. We consider the recent decline in our Canadian business, which management believes is attributable to lower oil prices and the reduction of capital investments in the Canadian oil sands region, to be an indicator of potential asset impairments in our Canadian reporting unit. The goodwill balance in the Canadian reporting unit at June 30, 2016 is $36,892 and the net intangible assets are $25,371 . As of June 30, 2016, we determined it was more likely than not that there is no impairment of goodwill or other intangible assets. We will continue to monitor our Canadian reporting unit's goodwill and other intangible asset valuations and test for potential impairments until the overall market conditions in such region improve. Changes in estimates and assumptions used to determine whether impairment exists or future declines in actual and forecasted operating results and/or market conditions in Canada, especially in energy markets, could indicate a need to reevaluate the fair value of our Canadian reporting unit and may ultimately result in an impairment to goodwill and/or indefinite-lived intangible assets of our Canadian reporting unit in future periods. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued current liabilities consisted of the following: June 30, March 31, Accrued employee compensation and related expenses $ 8,173 $ 6,906 Accrued employee compensation related to acquisition — 5,775 Customer prepayment 207 200 Warranty reserve 374 460 Professional fees 1,276 1,088 Sales tax payable 857 1,358 Other 2,509 2,451 Total accrued current liabilities $ 13,396 $ 18,238 |
Short-Term Revolving Lines of C
Short-Term Revolving Lines of Credit | 3 Months Ended |
Jun. 30, 2016 | |
Short-term Debt [Abstract] | |
Short-Term Revolving Credit Facilities | Short-Term Revolving Credit Facilities The Company’s subsidiary in the Netherlands has a revolving credit facility in the amount of Euro 4,000 (equivalent to $4,442 at June 30, 2016 ). The facility is collateralized by such subsidiary's receivables, inventory, equipment, furniture and real estate. No amounts were outstanding under this facility at June 30, 2016 or March 31, 2016 . The Company’s subsidiary in India has a revolving credit facility in the amount of 80,000 Rupees (equivalent to $1,183 at June 30, 2016 ). The facility is collateralized by such subsidiary's receivables, inventory, real estate, a letter of credit and cash. No amounts were outstanding under this facility at June 30, 2016 or March 31, 2016 . The Company’s subsidiary in Australia has a revolving credit facility in the amount of $325 Australian Dollars (equivalent to $242 at June 30, 2016 ). The facility is collateralized by such subsidiary's real estate. No amounts were outstanding under this facility at June 30, 2016 or March 31, 2016 . The Company’s subsidiary in Japan has a revolving credit facility in the amount of 45,000 Japanese Yen (equivalent to $438 at June 30, 2016 ). No amounts were outstanding under this facility at June 30, 2016 or March 31, 2016 . Under the Company’s senior secured revolving credit facility described below in Note 8, “Long-Term Debt,” there were no outstanding borrowings at June 30, 2016 or March 31, 2016 . |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: June 30, March 31, Variable Rate Term Loan, due April 2019, net of deferred debt issuance costs of $793 and $888 as of June 30, 2016 and March 31, 2016, respectively $ 90,332 $ 93,612 Less current portion (15,188 ) (13,500 ) Total long-term debt $ 75,144 $ 80,112 Senior Secured Credit Facility In April 2013, we entered into an amended and restated credit agreement that provided for a $135,000 variable rate term loan and $60,000 senior secured asset-based revolving credit facility, which we refer to collectively as our "credit facility." We have entered into two amendments to our credit facility, most recently in August 2015 (the "Amendment"). The maturity date of our credit facility is April 19, 2019. Under the Amendment, the fixed portion of our interest rate, which is dictated by our leverage ratio, was reduced by 0.25% and our fee on undrawn amounts on our senior secured revolving credit facility was reduced by 0.05% . The maximum leverage ratio permitted for each fiscal quarter remained at 2.75 to 1.0 . Under our credit facility, in no case shall availability exceed commitments thereunder. Any credit facility borrowings will bear interest, at our option, at a rate equal to either (i) a base rate determined by reference to the greatest of (a) JPMorgan Chase Bank's prime rate in New York City, (b) the federal funds effective rate in effect on such day plus ½ of 1% and (c) the adjusted LIBOR rate for a one month interest period on such day plus 1%, in each case plus an applicable margin dictated by our leverage ratio, or (ii) the LIBOR rate, plus an applicable margin dictated by our leverage ratio. Borrowings denominated in Canadian Dollars under the Canadian sub-facility bear interest at our option, at a rate equal to either (i) a base rate determined by reference to the greater of (a) JPMorgan Chase Bank, Toronto branch's prime rate and (b) the sum of (x) the yearly interest rate to which the one-month Canadian deposit offered rate is equivalent plus (y) 1.0%, in each case plus an applicable margin dictated by our leverage ratio, or (ii) a Canadian deposit offered rate determined by the sum of (a) the annual rate of interest determined with reference to the arithmetic average of the discount rate quotations of all institutions listed in respect of the relevant period for Canadian dollar-denominated bankers' acceptances plus (b) 0.10% per annum, plus an applicable margin dictated by our leverage ratio. In addition to paying interest on outstanding borrowings under our credit facility, we are currently required to pay a 0.30% per annum commitment fee to the lenders in respect of the unutilized commitments thereunder, which commitment fee could change based on our leverage ratio, and letter of credit fees equal to the LIBOR margin or the Canadian deposit offered rate, as applicable, on the undrawn amount of all outstanding letters of credit, in addition to a 0.125% annual fronting fee. At June 30, 2016 , we had no outstanding borrowings under our senior secured revolving credit facility. The interest rate on outstanding borrowings as of June 30, 2016 was 2.50% . As of June 30, 2016 , we had $59,022 of capacity available under our senior secured revolving credit facility after taking into account the borrowing base, outstanding loan advances, borrowings and letters of credit. The variable rate secured term loan bears interest at the LIBOR rate plus an applicable margin dictated by our leverage ratio. As of June 30, 2016 , our interest rate was 2.50% . The term loan includes monthly principal payments of $1,125 through March 31, 2017, increasing to $1,688 through the maturity date. The remaining $40,500 is due in April 2019. Interest rate swaps. The Company entered into two interest rate swap contracts to reduce the exposure to interest rate fluctuations associated with its variable rate secured term loan interest payments. Under the interest rate swap agreements, we pay a fixed amount and receive payments based on a variable interest rate. Under the terms of the Amendment and our interest rate swaps, our interest rate on outstanding principal amounts was fixed at approximately 3.18% during the three months ended June 30, 2016 . As of June 30, 2016 , 100% of our interest payments on our variable rate secured term loan are hedged through its maturity in April 2019. Guarantees; security. The obligations under our credit facility are guaranteed on a senior secured basis by each of our existing and future domestic restricted subsidiaries, including Thermon Industries, Inc., the U.S. borrower under our credit facility. The obligations under our credit facility are secured by a first priority perfected security interest in substantially all of our assets, subject to certain exceptions, permitted liens and encumbrances reasonably acceptable to the administrative agent under our credit facility. Restrictive covenants. The credit facility contains various restrictive covenants that, among other things, restrict or limit our ability to (subject to certain negotiated exceptions): incur additional indebtedness or issue disqualified capital stock unless certain financial tests are satisfied; pay dividends, redeem subordinated debt or make other restricted payments; make certain investments or acquisitions; issue stock of subsidiaries; grant or permit certain liens on our assets; enter into certain transactions with affiliates; merge, consolidate or transfer substantially all of our assets; incur dividend or other payment restrictions affecting certain of our subsidiaries; transfer or sell assets, including capital stock of our subsidiaries; and change the business we conduct. As of June 30, 2016 , we were in compliance with all financial covenants of the credit facility. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions In connection with the Sumac transaction, one of the former principals retained 25% of the ownership of the Sumac business unit. He is also serving as the general manager of the Sumac business unit as an employee of Thermon. During the three months ended June 30, 2016, he, along with the two other former principals of Sumac, was paid $5,805 in the aggregate related to the $5,905 non-interest bearing performance-based note issued in connection with the Sumac transaction. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies At June 30, 2016 , the Company had in place letter of credit guarantees and performance bonds securing performance obligations of the Company. These arrangements totaled approximately $9,641 . Of this amount, $1,434 is secured by cash deposits at the Company’s financial institutions and an additional $978 represents a reduction of the available amount of the Company's short and long term revolving lines of credit. Included in prepaid expenses and other current assets at June 30, 2016 and March 31, 2016 was approximately $1,434 and $1,408 , respectively, of cash deposits pledged as collateral on performance bonds and letters of credit. Our Indian subsidiary also has $5,369 in customs bonds outstanding to secure the Company's customs and duties obligations in India. We are involved in various legal and administrative proceedings that arise from time to time in the ordinary course of doing business. Some of these proceedings may result in fines, penalties or judgments being assessed against us, which may adversely affect our financial results. In addition, from time to time, we are involved in various disputes, which may or may not be settled prior to legal proceedings being instituted and which may result in losses in excess of accrued liabilities, if any, relating to such unresolved disputes. As of June 30, 2016 , management believes that adequate reserves have been established for any probable and reasonably estimable losses. Expenses related to litigation reduce operating income. We do not believe that the outcome of any of these proceedings or disputes would have a significant adverse effect on our financial position, long-term results of operations, or cash flows. It is possible, however, that charges related to these matters could be significant to our results of operations or cash flows in any one accounting period. The Company has no outstanding legal matters outside of matters arising in the ordinary course of business. We can give no assurances we will prevail in any of these matters. |
Stock-Based Compensation Expens
Stock-Based Compensation Expense | 3 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense | Stock-Based Compensation Expense Our board of directors has adopted and the shareholders have approved two stock option award plans. The 2010 Thermon Group Holdings, Inc. Restricted Stock and Stock Option Plan (“2010 Plan”) was approved on July 28, 2010. The 2010 Plan authorized the issuance of 2,767,171 stock options or restricted shares (on a post-stock split basis). On April 8, 2011, the board of directors approved the Thermon Group Holdings, Inc. 2011 Long-Term Incentive Plan (“2011 LTIP”). The 2011 LTIP made available 2,893,341 shares of the Company’s common stock that may be awarded to employees, directors or non-employee contractors as compensation in the form of stock options, restricted stock awards or restricted stock units. At June 30, 2016 , there were 418,806 options outstanding. For the three months ended June 30, 2016 and 2015 , stock compensation expense was $906 and $875 , respectively. During the three months ended June 30, 2016 , 121,520 restricted stock units were issued to our employees. The aggregate grant date fair value as determined by the closing price of our stock on the respective grant dates was $2,255 for the three months ended June 30, 2016 . The awards will be expensed on a straight-line basis over the three-year service period. At each anniversary of the restricted stock unit's grant date, a proportionate number of stock units will become vested for the employees and the shares will become issued and outstanding. We maintain a plan to issue our directors awards of fully vested common stock every three months for a total award over a twelve-month period of approximately $385 . During the three months ended June 30, 2016 , 5,460 of fully vested common shares were issued to our directors. The aggregate grant date fair value as determined by the closing price of our common stock on the grant date was $96 for the three months ended June 30, 2016 . The fair value of the awards will be expensed on each grant date. During the three months ended June 30, 2016 , a target amount of 15,141 performance stock units were issued to certain members of our senior management that had a total grant date fair value of $300 . The performance indicator for these performance stock units is based on the market performance of our stock price, from the date of grant through March 31, 2019, relative to the market price performance of a pre-determined peer group of companies. Since the performance indicator is market-based, we used a Monte-Carlo valuation model to calculate the probable outcome of the performance measure to arrive at the fair value. The requisite service period required to earn the awards is through March 31, 2019. We will expense the fair value of the performance stock units over the service period on a straight-line basis whether or not the stock price performance condition is met. At the end of the performance period, the performance stock units will be evaluated with the requisite number of shares being issued. The possible number of shares that could be issued ranges from zero to 30,282 in the aggregate. Shares that are not awarded at the measurement date will be forfeited. In addition to the market-based performance stock units issued to certain members of senior management, we also granted these individuals, during the three months ended June 30, 2016, a target amount of 32,345 performance stock units based on the Company's Adjusted EBITDA performance over a three -year period ending March 31, 2019. The total grant date fair value, as determined by the closing price of our common stock on the date of the grant was $600 . At each reporting period, we will estimate how many awards senior management may achieve and adjust our stock compensation expense accordingly. At the end of the performance period, the performance stock units will be evaluated with the requisite number of shares issued. The possible number of shares that could be issued under such performance stock units ranges from zero to 64,690 , in the aggregate. Shares that are not awarded after the end of the measurement period will be forfeited. |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three month periods ended June 30, 2016 and 2015 , the Company recorded tax expense of $1,015 on pre-tax income of $3,659 and tax expense of $2,467 on pre-tax income of $6,993 , respectively. During the three months ended June 30, 2015, the Company accrued an additional deferred tax liability of $455 due to an increase in the provincial tax rate in Alberta, Canada. Our anticipated annual effective tax rate before discrete events is approximately 27.6% and has been applied to our consolidated pre-tax income for the three months ended June 30, 2016 . For the three months ended June 30, 2015 , our tax provision reflected an annual effective tax rate before discrete events of 28.5% . We have adopted a permanent reinvestment position whereby we expect to reinvest our foreign earnings for most of our foreign subsidiaries and do not expect to repatriate future earnings. As a result of the adoption of a permanent reinvestment position, we do not accrue a tax liability in anticipation of future dividends from most of our foreign subsidiaries. The estimated annual effective tax rate for the fiscal year ending March 31, 2017 reflects the estimated taxable earnings of our various foreign subsidiaries and the applicable local tax rates, after accounting for certain permanent differences, such as nondeductible compensation expenses. As of June 30, 2016 , we have established a long-term liability for uncertain tax positions in the amount of $674 , all of which is related to the IPI acquisition. During the three months ended June 30, 2016 , the Company recognized related accrued interest and penalties of $14 as income tax expense related to our current uncertain tax positions. As of June 30, 2016 , the tax years for fiscal 2012 through fiscal 2016 remain open to examination by the major taxing jurisdictions to which we are subject. |
Segment Information
Segment Information | 3 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | We operate in four reportable segments based on four geographic countries or regions in which we operate: the United States, Canada, Europe and Asia. Within our four reportable segments, our primary products and services are focused on thermal solutions primarily related to the electrical heat tracing industry. Each of our reportable segments serves a similar class of customers, including engineering, procurement and construction ("EPC") companies, international and regional oil and gas companies, commercial sub-contractors, electrical component distributors and direct sales to existing plant or industrial applications. Profitability within our segments is measured by operating income. Profitability can vary in each of our reportable segments based on the competitive environment within the region, the level of corporate overhead, such as the salaries of our senior executives, and the level of research and development and marketing activities in the region, as well as the mix of products and services. Over the last 17 months, we acquired Unitemp, IPI and Sumac. Both Unitemp and IPI offer thermal solutions and have been included in our Europe and United States reportable segments, respectively. Sumac provides temporary power products that differ from our core thermal solutions business. As our operating results from Sumac comprise less than 10% of our total sales and operating income, Sumac has been aggregated in our Canada segment. For purposes of this note, revenue is attributed to individual countries or regions on the basis of the physical location and jurisdiction of organization of the subsidiary that invoices the material and services. Total sales to external customers, inter-segment sales, depreciation expense, amortization expense, income from operations and total assets classified by major geographic area in which the Company operates are as follows: Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 Sales to External Customers: United States $ 30,154 $ 28,498 Canada 10,109 13,070 Europe 13,763 16,351 Asia 9,370 7,304 $ 63,396 $ 65,223 Inter-Segment Sales: United States $ 10,639 $ 11,555 Canada 589 796 Europe 601 369 Asia 128 100 $ 11,957 $ 12,820 Depreciation Expense: United States $ 861 $ 674 Canada 452 342 Europe 69 58 Asia 32 42 $ 1,414 $ 1,116 Amortization Expense: United States $ 1,314 $ 1,258 Canada 901 1,009 Europe 335 363 Asia 266 266 $ 2,816 $ 2,896 Income from operations: United States $ 39 $ 4,222 Canada (a) 1,733 1,330 Europe 1,651 2,385 Asia 2,044 1,324 Unallocated: Stock compensation (906 ) (875 ) Public company costs (371 ) (314 ) $ 4,190 $ 8,072 June 30, 2016 March 31, 2016 Property, plant and equipment, net: United States $ 34,439 $ 34,528 Canada 4,299 3,754 Europe 2,698 2,769 Asia 547 566 $ 41,983 $ 41,617 Total Assets: United States $ 195,389 $ 196,400 Canada 138,062 145,301 Europe 72,516 76,754 Asia 51,004 50,222 $ 456,971 $ 468,677 (a) During the three months ended June 30, 2015, the Canadian segment's operating income was negatively impacted by $1,376 due to acquisition related contingent consideration accounted for as compensation. As part of the Sumac transaction, we issued the sellers a $5,905 non-interest bearing note that matured on April 1, 2016. The terms of the performance-based note assume the continued employment of Sumac's principals, and as a result, the performance note payment is accounted for as compensation expense. The performance note was settled during the three months ended June 30, 2016. |
Basis of Presentation and Acc19
Basis of Presentation and Accounting Policy Information (Policies) | 3 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates Generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. While our management has based their assumptions and estimates on the facts and circumstances existing at June 30, 2016 , actual results could differ from those estimates and affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities and the corresponding revenues and expenses as of the date of the financial statements. The operating results for the three months ended June 30, 2016 are not necessarily indicative of the results that may be achieved for the fiscal year ending March 31, 2017 . |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue Recognition - In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09 “Revenue from Contracts with Customers” (Topic 606), which amends the existing revenue recognition requirements and guidance. Under the new guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company will adopt the standard on April 1, 2018. We have not selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. Stock Compensation - In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-12 "Compensation-Stock Compensation" (Topic 718), which clarified the treatment of share-based payments when a performance target could be achieved after the requisite service period. Under the new guidance, compensation cost should be recognized over the requisite service period when it becomes probable that the performance target will be achieved. The total compensation cost recognized should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. We adopted this standard effective April 1, 2015 and it did not have a material impact on our condensed consolidated financial statements. Stock Compensation - In March 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-09 "Compensation-Stock Compensation" (Topic 718), which changes the accounting for certain aspects of share-based payments to employees. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. Additionally, cash flows related to excess tax benefits will no longer be separately classified as a financing activity and will be included as an operating activity on the consolidated statements of cash flows. The guidance allows for an accounting policy election to account for forfeitures as they occur. The standard is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the requirements of the standard and have not yet determined its impact on our consolidated financial statements. Interest- In April 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-3 "Interest-Imputation of Interest" (Subtopic 835-30). The new guidance changes the presentation of debt issuance costs in financial statements and specifies that debt issuance costs related to a note shall be reported in the balance sheet as a direct deduction from the associated face amount of the note. The guidance does not change the current guidance related to the recognition and measurement of debt issuance costs. The amortization of debt issuance costs will continue to be reported as interest expense. The guidance is effective for years and interim periods within those fiscal years beginning after December 15, 2015. The new guidance shall be applied to all prior periods retrospectively. We adopted this standard as of March 31, 2016 and, effective upon such adoption, deferred debt issuance costs associated with our term loan are offset against, and reduce, our long term debt obligation. The adoption of this guidance has had no impact on the presentation of our condensed consolidated statements of operations. Interes t- In August 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-15 "Imputation of Interest" (Subtopic 835-30). The guidance clarified the treatment of the presentation of debt issuance costs associated with a revolving line of credit. Under the guidance these costs can continue to be reported as an asset. As there were no changes to the pre-existing guidance the standard is considered to be effective immediately and had no impact on our condensed consolidated financial statements. Upon the adoption of this standard, deferred debt issuance costs associated with our revolving credit facility are reported as other long term assets in the condensed consolidated balance sheets. Inventory- In July 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-11 "Simplifying the Measurement of Inventory" (Topic 330). Under the new guidance, inventory is measured at the lower of cost and net realizable value, and the new guidance eliminates the use of replacement cost and net realizable value less a normal profit margin as techniques to value inventory. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The new guidance will be applied prospectively for annual periods and interim periods within fiscal years beginning after December 15, 2016. We do not anticipate the adoption of this standard will have a material impact on our condensed consolidated financial statements. Business Combinations- In September 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-16 "Simplifying the Accounting for Measurement-Period Adjustments" (Topic 805). Under the new guidance, an acquirer must recognize adjustments to provisional amounts that are identified in the reporting period in which the adjustments amounts are determined. Companies are required to disclose the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustments to the provisional amounts had been recognized as of the acquisition date. The new guidance is to be applied prospectively for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted. We adopted this standard in September 2015. During the three months ended June 30, 2016, we adjusted our provisional estimates of goodwill and other intangible assets related to our IPI acquisition. See Note 5. Acquisitions, Goodwill and Other Intangible Assets. Income Taxes- In November 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-17 "Income Taxes" (Topic 740), which requires an entity to present all deferred income tax assets and liabilities as noncurrent. Under the previous guidance, an entity had to classify deferred income tax assets and liabilities into current and noncurrent based on the classification of the related asset or liability. The new guidance is effective for annual periods beginning after December 15, 2016 and interim periods within those years. Early adoption is permitted. In the year of adoption, the guidance can be applied either prospectively or retrospectively. We adopted this standard as of March 31, 2016. The adoption of this guidance did not have an impact on our condensed consolidated statements of operations or condensed consolidated statement of cash flows. Financial Instruments- In January 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-01 "Financial Instruments-Overall" (Subtopic 825-10), which amends the guidance on the classification and measurement of financial instruments. The amendment requires all equity investments to be measured at fair value with changes in the fair value recognized through earnings. The amendment also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the credit risk when an entity has elected the fair value option. The guidance eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Early adoption is permitted for certain provisions of the accounting standards update. Upon the adoption of the standard, an entity will be required to make a cumulative-effect adjustment to retained earnings as of the beginning of such reporting period. We are currently evaluating when to adopt this standard. Upon adoption, we do not anticipate this standard will have a material impact on our condensed consolidated financial statements. Leases - In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-02 "Leases" (Topic 842), which provides guidance on the recognition, measurement, presentation and disclosure on leases. Under the standard, substantially all leases will be reported on the balance sheet as right-of-use assets and lease liabilities. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the requirements of the standard and have not yet determined its impact on our condensed consolidated financial statements. Financial Instruments- In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13 "Financial Instruments-Credit Losses" (Topic 326), which amends the guidance on the impairment of financial instruments. The standard adds an impairment model, referred to as current expected credit loss, which is based on expected losses rather than incurred losses. The standard applies to most debt instruments, trade receivables, lease receivables, reinsurance receivables, financial guarantees and loan commitments. Under the guidance, companies are required to disclose credit quality indicators disaggregated by year of origination for a five-year period. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. We do not anticipate this will have a material impact to our condensed consolidated financial statements. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of long-term debt that is not measured at fair value | Information about our long-term debt that is not measured at fair value is as follows: June 30, 2016 March 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Valuation Technique Financial Liabilities Outstanding principal amount of senior secured credit facility $ 91,125 $ 91,125 $ 94,500 $ 94,500 Level 2 - Market Approach |
Schedule of notional amounts of forward contracts held in foreign currencies | As of June 30, 2016 and March 31, 2016 , the notional amounts of forward contracts were as follows: Notional amount of foreign currency forward contracts by currency June 30, 2016 March 31, 2016 Russian Ruble $ 2,049 $ 1,237 Euro 2,429 4,224 Canadian Dollar 430 534 South Korean Won 3,496 3,050 Mexican Peso 843 837 Australian Dollar 1,141 1,042 Chinese Renminbi 502 334 Brazilian Real 302 336 South African Rand 178 317 Total notional amounts $ 11,370 $ 11,911 |
Schedule of fair value of foreign currency forward contracts | The following table represents the fair value of our foreign currency forward contracts: June 30, 2016 March 31, 2016 Fair Value Fair Value Assets Liabilities Assets Liabilities Foreign currency forward contracts $ 54 $ 2 $ 5 $ 25 |
Schedule of unrealized gain (loss) in accumulated other comprehensive loss | The following table summarizes the aggregate unrealized loss in accumulated other comprehensive loss, and the losses reclassified into earnings for the three months ended June 30, 2016 and 2015 : Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 Before Tax Amount Tax Expense (Benefit) Other Comprehensive loss, net Before Tax Amount Tax Expense (Benefit) Other Comprehensive loss, net Unrealized loss at beginning of the period $ (1,269 ) $ (444 ) $ (825 ) $ (746 ) $ (261 ) $ (485 ) Add: loss from change in fair value of cash flow hedge (369 ) (129 ) (240 ) (106 ) (37 ) (69 ) Less: loss reclassified into earnings from effective hedge (157 ) (55 ) (102 ) (252 ) (88 ) (164 ) Less: ineffective portion of hedge transferred into earnings (11 ) (4 ) (7 ) (11 ) (4 ) (7 ) Unrealized loss at end of the period $ (1,470 ) $ (514 ) $ (956 ) $ (589 ) $ (206 ) $ (383 ) |
Earnings and Net Income (Loss21
Earnings and Net Income (Loss) per Common Share (Tables) | 3 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the denominators used to calculate basic EPS and diluted EPS | The reconciliations of the denominators used to calculate basic and diluted net income per common share for the three months ended June 30, 2016 and 2015 , respectively, are as follows: Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 Basic net income per common share Net income available to Thermon Group Holdings, Inc. $ 2,526 $ 4,429 Weighted-average common shares outstanding 32,232,340 32,103,274 Basic net income per common share $ 0.08 $ 0.14 Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 Diluted net income per common share Net income available to Thermon Group Holdings, Inc. $ 2,526 $ 4,429 Weighted-average common shares outstanding 32,232,340 32,103,274 Common share equivalents: Stock options 227,134 253,895 Restricted and performance stock units 234,761 134,835 Weighted average shares outstanding – dilutive (1) 32,694,235 32,492,004 Diluted net income per common share $ 0.08 $ 0.14 (1) For the three months ended June 30, 2016 and 2015, 47,706 and 69,613 equity awards were not included in the calculation of diluted net income per common share, respectively, as they would have an anti-dilutive effect. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | June 30, March 31, Raw materials $ 14,348 $ 13,322 Work in process 2,021 3,065 Finished goods 26,123 25,545 42,492 41,932 Valuation reserves (1,392 ) (1,287 ) Inventories, net $ 41,100 $ 40,645 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Jun. 30, 2016 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | Consideration to or on behalf of sellers at close $ 10,956 Fair value of total consideration transferred $ 10,956 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of the assets and liabilities assumed: Assets acquired: Accounts receivable $ 1,693 Inventories 1,299 Other current assets 33 Property, plant and equipment 1,316 Identifiable intangible assets 3,085 Goodwill 7,992 Deferred tax asset 111 Total assets 15,529 Liabilities assumed: Current liabilities 935 Total liabilities 935 Non-controlling interests 3,638 Total consideration $ 10,956 |
Schedule of Intangible Assets | other intangible assets consisted of the following: Gross Carrying Amount at June 30, 2016 Accumulated Amortization Net Carrying Amount at June 30, 2016 Gross Carrying Amount March 31, 2016 Accumulated Amortization Net Carrying Amount at March 31, 2016 Trademarks $ 45,160 $ 305 $ 44,855 $ 45,234 $ 237 $ 44,997 Developed technology 9,933 3,111 6,822 9,950 2,988 6,962 Customer relationships 100,634 57,341 43,293 105,720 54,913 50,807 Certification 448 — 448 449 — 449 Other 2,632 1,998 634 2,631 1,848 783 Total $ 158,807 $ 62,755 $ 96,052 $ 163,984 $ 59,986 $ 103,998 |
Schedule of carrying amount of goodwill | The carrying amount of goodwill by operating segment as of June 30, 2016 is as follows: United States Canada Europe Asia Total Balance as of March 31, 2016 $ 48,971 $ 44,488 $ 19,427 $ 8,624 $ 121,510 Adjustments to purchase price allocation 3,218 — — — 3,218 Foreign currency translation impact — 241 (356 ) — (115 ) Balance as of June 30, 2016 $ 52,189 $ 44,729 $ 19,071 $ 8,624 $ 124,613 |
Industrial Process Insulators, Inc. | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | During the three months ended June 30, 2016, we finalized our provisional purchase accounting for the IPI transaction. The table below summarizes our provisional estimates of the fair value of assets and liabilities assumed as well as the final fair value of assets and liabilities assumed: Provisional Fair Value Final Fair Value Customer relationships $ 10,720 $ 5,692 Goodwill 10,204 13,422 Noncurrent deferred tax liability 4,962 3,152 Consideration to or on behalf of sellers at close $ 21,750 Fair value of total consideration transferred $ 21,750 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of the assets and liabilities assumed: Assets acquired: Cash $ 1,526 Accounts receivable 3,723 Inventories 474 Other current assets 204 Property, plant and equipment 119 Identifiable intangible assets 8,756 Goodwill 13,422 Total assets 28,224 Liabilities assumed: Current liabilities 2,203 Uncertain tax position liability 1,119 Noncurrent deferred tax liability 3,152 Total liabilities 6,474 Total consideration $ 21,750 |
Schedule of Intangible Assets | Our identifiable intangible assets at June 30, 2016 and March 31, 2016 that were related to the IPI transaction consisted of the following: Amortization period Gross Carrying Amount at June 30, 2016 Accumulated Amortization Net Carrying Amount at June 30, 2016 Gross Carrying Amount March 31, 2016 Accumulated Amortization Net Carrying Amount at March 31, 2016 Customer relationships 8 years $ 5,692 $ 652 $ 5,040 $ 10,720 $ 715 $ 10,005 Trademark 8 years 1,820 209 1,611 1,820 152 1,668 Non-compete agreement 3 years 807 246 561 $ 807 $ 179 $ 628 Total $ 8,319 $ 1,107 $ 7,212 $ 13,347 $ 1,046 $ 12,301 |
Sumac Fabrication Company Limited | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Schedule of Intangible Assets | Our identifiable intangible assets at June 30, 2016 and March 31, 2016 that were related to the Sumac transaction consisted of the following: Amortization period Gross Carrying Amount at June 30, 2016 Accumulated Amortization Net Carrying Amount at June 30, 2016 Gross Carrying Amount March 31, 2016 Accumulated Amortization Net Carrying Amount at March 31, 2016 Customer relationships 4 years 2,626 821 1,805 2,612 653 1,959 Non-compete agreement 2 years 195 121 74 194 97 97 Total $ 2,821 $ 942 $ 1,879 $ 2,806 $ 750 $ 2,056 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of accrued current liabilities | June 30, March 31, Accrued employee compensation and related expenses $ 8,173 $ 6,906 Accrued employee compensation related to acquisition — 5,775 Customer prepayment 207 200 Warranty reserve 374 460 Professional fees 1,276 1,088 Sales tax payable 857 1,358 Other 2,509 2,451 Total accrued current liabilities $ 13,396 $ 18,238 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following: June 30, March 31, Variable Rate Term Loan, due April 2019, net of deferred debt issuance costs of $793 and $888 as of June 30, 2016 and March 31, 2016, respectively $ 90,332 $ 93,612 Less current portion (15,188 ) (13,500 ) Total long-term debt $ 75,144 $ 80,112 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Total sales and operating income classified by major geographic area in which the company operates | We operate in four reportable segments based on four geographic countries or regions in which we operate: the United States, Canada, Europe and Asia. Within our four reportable segments, our primary products and services are focused on thermal solutions primarily related to the electrical heat tracing industry. Each of our reportable segments serves a similar class of customers, including engineering, procurement and construction ("EPC") companies, international and regional oil and gas companies, commercial sub-contractors, electrical component distributors and direct sales to existing plant or industrial applications. Profitability within our segments is measured by operating income. Profitability can vary in each of our reportable segments based on the competitive environment within the region, the level of corporate overhead, such as the salaries of our senior executives, and the level of research and development and marketing activities in the region, as well as the mix of products and services. Over the last 17 months, we acquired Unitemp, IPI and Sumac. Both Unitemp and IPI offer thermal solutions and have been included in our Europe and United States reportable segments, respectively. Sumac provides temporary power products that differ from our core thermal solutions business. As our operating results from Sumac comprise less than 10% of our total sales and operating income, Sumac has been aggregated in our Canada segment. For purposes of this note, revenue is attributed to individual countries or regions on the basis of the physical location and jurisdiction of organization of the subsidiary that invoices the material and services. Total sales to external customers, inter-segment sales, depreciation expense, amortization expense, income from operations and total assets classified by major geographic area in which the Company operates are as follows: Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 Sales to External Customers: United States $ 30,154 $ 28,498 Canada 10,109 13,070 Europe 13,763 16,351 Asia 9,370 7,304 $ 63,396 $ 65,223 Inter-Segment Sales: United States $ 10,639 $ 11,555 Canada 589 796 Europe 601 369 Asia 128 100 $ 11,957 $ 12,820 Depreciation Expense: United States $ 861 $ 674 Canada 452 342 Europe 69 58 Asia 32 42 $ 1,414 $ 1,116 Amortization Expense: United States $ 1,314 $ 1,258 Canada 901 1,009 Europe 335 363 Asia 266 266 $ 2,816 $ 2,896 Income from operations: United States $ 39 $ 4,222 Canada (a) 1,733 1,330 Europe 1,651 2,385 Asia 2,044 1,324 Unallocated: Stock compensation (906 ) (875 ) Public company costs (371 ) (314 ) $ 4,190 $ 8,072 June 30, 2016 March 31, 2016 Property, plant and equipment, net: United States $ 34,439 $ 34,528 Canada 4,299 3,754 Europe 2,698 2,769 Asia 547 566 $ 41,983 $ 41,617 Total Assets: United States $ 195,389 $ 196,400 Canada 138,062 145,301 Europe 72,516 76,754 Asia 51,004 50,222 $ 456,971 $ 468,677 (a) During the three months ended June 30, 2015, the Canadian segment's operating income was negatively impacted by $1,376 due to acquisition related contingent consideration accounted for as compensation. As part of the Sumac transaction, we issued the sellers a $5,905 non-interest bearing note that matured on April 1, 2016. The terms of the performance-based note assume the continued employment of Sumac's principals, and as a result, the performance note payment is accounted for as compensation expense. The performance note was settled during the three months ended June 30, 2016. |
Basis of Presentation and Acc27
Basis of Presentation and Accounting Policy Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Business Acquisition [Line Items] | ||
Marketing, general and administrative and engineering | $ 19,108 | $ 19,849 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Loans Payable - Level 2 - Market Approach - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 |
Financial Liabilities, Long-term debt | ||
Long-term debt, Carrying Value | $ 91,125 | $ 94,500 |
Long-term debt, Fair Value | $ 91,125 | $ 94,500 |
Fair Value Measurements - Forei
Fair Value Measurements - Foreign Exchange Contracts by Currency (Details) - Foreign Exchange Forward Contracts - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 |
Derivatives [Line Items] | ||
Notional amount | $ 11,370 | $ 11,911 |
South Africa, Rand | ||
Derivatives [Line Items] | ||
Notional amount | 178 | 317 |
Russian Ruble | ||
Derivatives [Line Items] | ||
Notional amount | 2,049 | 1,237 |
Euro | ||
Derivatives [Line Items] | ||
Notional amount | 2,429 | 4,224 |
Canadian Dollar | ||
Derivatives [Line Items] | ||
Notional amount | 430 | 534 |
South Korean Won | ||
Derivatives [Line Items] | ||
Notional amount | 3,496 | 3,050 |
Mexican Peso | ||
Derivatives [Line Items] | ||
Notional amount | 843 | 837 |
Australian Dollar | ||
Derivatives [Line Items] | ||
Notional amount | 1,141 | 1,042 |
China, Yuan Renminbi | ||
Derivatives [Line Items] | ||
Notional amount | 502 | 334 |
Brazil, Brazil Real | ||
Derivatives [Line Items] | ||
Notional amount | $ 302 | $ 336 |
Fair Value Measurements - For30
Fair Value Measurements - Foreign Exchange Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Maximum term of forward contracts | 30 days | ||
Net Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ (32) | $ (161) | |
Foreign Exchange Forward Contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign exchange contract forwards, assets | 54 | $ 5 | |
Foreign exchange contract forwards, liabilities | 2 | $ 25 | |
Gain (Loss) on Foreign Currency Derivatives Recorded in Earnings, Net | $ (130) | $ (419) |
Fair Value Measurements - Swap
Fair Value Measurements - Swap (Details) - Interest Rate Swap - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Flow Hedges Derivative Instruments at Fair Value, Net | $ (1,390) | $ (1,178) |
Revolving credit facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative, fixed interest rate | 3.18% | |
Interest payments, percent hedged | 100.00% |
Fair Value Measurements - Accum
Fair Value Measurements - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Unrealized Loss in Accumulated Other Comprehensive Loss, before Tax [Roll Forward] | ||
Unrealized loss at beginning of the period, before tax | $ (1,269) | $ (746) |
Add: loss from change in fair value of cash flow hedge, before tax | (369) | (106) |
Less: loss reclassified into earnings from effective hedge, before tax | (157) | (252) |
Less: ineffective portion of hedge transferred into earnings, before tax | (11) | (11) |
Unrealized loss at end of the period, before tax | (1,470) | (589) |
Unrealized Loss in Accumulated Other Comprehensive Loss, Tax [Roll Forward] | ||
Add: loss from change in fair value of cash flow hedge, tax | (129) | (37) |
Unrealized loss at beginning of the period, tax | (444) | (261) |
Less: loss reclassified into earnings from effective hedge, tax | (55) | (88) |
Less: ineffective portion of hedge transferred into earnings, tax | (4) | (4) |
Unrealized loss at end of the period, tax | (514) | (206) |
Unrealized Loss In Accumulated Other Comprehensive Loss, Net of Tax [Roll Forward] | ||
Unrealized net gain (loss), beginning of period | (825) | (485) |
Add: loss from change in fair value of cash flow hedge, net of tax | (240) | (69) |
Less: loss reclassified into earnings from effective hedge, net of tax | (102) | (164) |
Less: ineffective portion of hedge transferred into earnings, net of tax | (7) | (7) |
Unrealized net gain (loss), end of the period | $ (956) | $ (383) |
Earnings and Net Income (Loss33
Earnings and Net Income (Loss) per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Basic net income (loss) per common share | ||
Net income | $ 2,526 | $ 4,429 |
Weighted-average common shares outstanding | 32,232,340 | 32,103,274 |
Basic net income (loss) per common share (in dollars per share) | $ 0.08 | $ 0.14 |
Diluted net income (loss) per common share | ||
Net income | $ 2,526 | $ 4,429 |
Weighted-average common shares outstanding | 32,232,340 | 32,103,274 |
Diluted (in shares) | 32,694,235 | 32,492,004 |
Diluted net income (loss) per common share (in dollars per share) | $ 0.08 | $ 0.14 |
Equity Option | ||
Diluted net income (loss) per common share | ||
Weighted Average Number Diluted Shares Outstanding Adjustment | 227,134 | 253,895 |
Restricted Stock Units | ||
Diluted net income (loss) per common share | ||
Weighted Average Number Diluted Shares Outstanding Adjustment | 234,761 | 134,835 |
Stock Compensation Plan | ||
Diluted net income (loss) per common share | ||
Antidilutive securities excluded from computation of earnings per share, amount | 47,706 | 69,613 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 14,348 | $ 13,322 |
Work in process | 2,021 | 3,065 |
Finished goods | 26,123 | 25,545 |
Inventories, gross | 42,492 | 41,932 |
Valuation reserves | (1,392) | (1,287) |
Inventories, net | $ 41,100 | $ 40,645 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets - Acquisition Consideration (Details) - USD ($) | Jul. 31, 2015 | Apr. 01, 2015 | Jun. 30, 2016 | Mar. 31, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 124,613,000 | $ 121,510,000 | ||
Industrial Process Insulators, Inc. | ||||
Business Acquisition [Line Items] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||
Goodwill | $ 13,422,000 | $ 13,422 | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years 1 month 28 days | |||
Consideration to or on behalf of sellers at close | 21,750,000 | |||
Fair value of total consideration transferred | $ 21,750,000 | |||
Sumac Fabrication Company Limited | ||||
Business Acquisition [Line Items] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 75.00% | |||
Goodwill | $ 7,992,000 | $ 7,836,000 | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years 7 months 6 days | |||
Consideration to or on behalf of sellers at close | 10,956,000 | |||
Fair value of total consideration transferred | $ 10,956,000 |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Accumulated Amortization | $ 62,755 | $ 59,986 |
Intangible Assets, Gross (Excluding Goodwill) | 158,807 | 163,984 |
Intangible Assets, Net (Excluding Goodwill) | 96,052 | 103,998 |
Developed Technology Rights | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 9,933 | 9,950 |
Finite-Lived Intangible Assets, Accumulated Amortization | 3,111 | 2,988 |
Finite-Lived Intangible Assets, Net | 6,822 | 6,962 |
Customer Relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 100,634 | 105,720 |
Finite-Lived Intangible Assets, Accumulated Amortization | 57,341 | 54,913 |
Finite-Lived Intangible Assets, Net | 43,293 | 50,807 |
Other Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 2,632 | 2,631 |
Finite-Lived Intangible Assets, Accumulated Amortization | 1,998 | 1,848 |
Finite-Lived Intangible Assets, Net | 634 | 783 |
Trademarks | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 45,160 | 45,234 |
Finite-Lived Intangible Assets, Accumulated Amortization | 305 | 237 |
Finite-Lived Intangible Assets, Net | 44,855 | 44,997 |
Certification Marks | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 448 | $ 449 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2016USD ($) | |
Goodwill | |
Balance at the beginning of the period | $ 121,510 |
Balance at the end of the period | 124,613 |
Operating Segments | |
Goodwill | |
Balance at the beginning of the period | 121,510 |
Adjustments to purchase price allocation | 3,218 |
Foreign currency translation impact | (115) |
Balance at the end of the period | 124,613 |
Operating Segments | United States | |
Goodwill | |
Balance at the beginning of the period | 48,971 |
Adjustments to purchase price allocation | 3,218 |
Foreign currency translation impact | 0 |
Balance at the end of the period | 52,189 |
Operating Segments | Canada | |
Goodwill | |
Balance at the beginning of the period | 44,488 |
Adjustments to purchase price allocation | 0 |
Foreign currency translation impact | 241 |
Balance at the end of the period | 44,729 |
Operating Segments | Europe | |
Goodwill | |
Balance at the beginning of the period | 19,427 |
Adjustments to purchase price allocation | 0 |
Foreign currency translation impact | (356) |
Balance at the end of the period | 19,071 |
Operating Segments | Asia | |
Goodwill | |
Balance at the beginning of the period | 8,624 |
Adjustments to purchase price allocation | 0 |
Foreign currency translation impact | 0 |
Balance at the end of the period | 8,624 |
Sumac Fabrication Company Limited | |
Goodwill | |
Balance at the end of the period | $ 7,836 |
Goodwill and Other Intangible38
Goodwill and Other Intangible Assets -Acquisition Recognized Identified Assets Acquired and Liabilities (Details) - USD ($) | Jun. 30, 2016 | Mar. 31, 2016 | Jul. 31, 2015 | Apr. 01, 2015 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | ||||
Goodwill | $ 124,613,000 | $ 121,510,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | ||||
Non-controlling interests | 4,397,000 | $ 4,279,000 | ||
Industrial Process Insulators, Inc. | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | ||||
Cash | $ 1,526,000 | |||
Accounts receivable | 3,723,000 | |||
Inventories | 474,000 | |||
Other current assets | 204,000 | |||
Property, plant and equipment | 119,000 | |||
Identifiable intangible assets | 8,756,000 | |||
Goodwill | 13,422 | 13,422,000 | ||
Total assets | 28,224,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | ||||
Current liabilities | 2,203,000 | |||
Uncertain tax position liability | 1,119,000 | |||
Noncurrent deferred tax liability | 3,152 | 3,152,000 | ||
Total liabilities | 6,474,000 | |||
Total consideration | $ 21,750,000 | |||
Sumac Fabrication Company Limited | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | ||||
Accounts receivable | $ 1,693,000 | |||
Inventories | 1,299,000 | |||
Other current assets | 33,000 | |||
Property, plant and equipment | 1,316,000 | |||
Identifiable intangible assets | 3,085,000 | |||
Goodwill | 7,836,000 | 7,992,000 | ||
Deferred tax asset | 111,000 | |||
Total assets | 15,529,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | ||||
Current liabilities | 935,000 | |||
Total liabilities | 935,000 | |||
Non-controlling interests | 3,638,000 | |||
Total consideration | $ 10,956,000 | |||
Customer Relationships | Industrial Process Insulators, Inc. | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | ||||
Identifiable intangible assets | $ 5,692,000 |
Goodwill and Other Intangible39
Goodwill and Other Intangible Assets - Intangible Assets related to Acquisition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2016 | Mar. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | $ 158,807 | $ 163,984 |
Finite-Lived Intangible Assets, Accumulated Amortization | 62,755 | 59,986 |
Intangible Assets, Net (Excluding Goodwill) | 96,052 | 103,998 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 305 | 237 |
Industrial Process Insulators, Inc. | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | 8,319 | 13,347 |
Finite-Lived Intangible Assets, Accumulated Amortization | 1,107 | 1,046 |
Intangible Assets, Net (Excluding Goodwill) | 7,212 | 12,301 |
Sumac Fabrication Company Limited | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | 2,821 | 2,806 |
Finite-Lived Intangible Assets, Accumulated Amortization | 942 | 750 |
Intangible Assets, Net (Excluding Goodwill) | $ 1,879 | 2,056 |
Noncompete Agreements [Member] | Industrial Process Insulators, Inc. | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 3 years | |
Intangible Assets, Gross (Excluding Goodwill) | $ 807 | 807 |
Finite-Lived Intangible Assets, Accumulated Amortization | 246 | 179 |
Intangible Assets, Net (Excluding Goodwill) | $ 561 | 628 |
Noncompete Agreements [Member] | Sumac Fabrication Company Limited | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 2 years | |
Intangible Assets, Gross (Excluding Goodwill) | $ 195 | 194 |
Finite-Lived Intangible Assets, Accumulated Amortization | 121 | 97 |
Intangible Assets, Net (Excluding Goodwill) | 74 | 97 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Accumulated Amortization | $ 57,341 | 54,913 |
Customer Relationships | Industrial Process Insulators, Inc. | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 8 years | |
Intangible Assets, Gross (Excluding Goodwill) | $ 5,692 | 10,720 |
Finite-Lived Intangible Assets, Accumulated Amortization | 652 | 715 |
Intangible Assets, Net (Excluding Goodwill) | $ 5,040 | 10,005 |
Customer Relationships | Sumac Fabrication Company Limited | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 4 years | |
Intangible Assets, Gross (Excluding Goodwill) | $ 2,626 | 2,612 |
Finite-Lived Intangible Assets, Accumulated Amortization | 821 | 653 |
Intangible Assets, Net (Excluding Goodwill) | $ 1,805 | 1,959 |
Trademarks | Industrial Process Insulators, Inc. | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 8 years | |
Intangible Assets, Gross (Excluding Goodwill) | $ 1,820 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 209 | |
Intangible Assets, Net (Excluding Goodwill) | 1,611 | |
Developed Technology Rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 3,111 | 2,988 |
Other Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Accumulated Amortization | $ 1,998 | 1,848 |
Other Intangible Assets | Industrial Process Insulators, Inc. | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | 1,820 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 152 | |
Intangible Assets, Net (Excluding Goodwill) | $ 1,668 |
Goodwill and Other Intangible40
Goodwill and Other Intangible Assets - Provisional Estimates and Final Estimates of Fair Value of Assets and Liabilities Assumed (Details) - USD ($) | Jun. 30, 2016 | Mar. 31, 2016 | Jul. 31, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 124,613,000 | $ 121,510,000 | |
Industrial Process Insulators, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 8,756,000 | ||
Goodwill | 13,422 | 13,422,000 | |
Noncurrent deferred tax liability | 3,152 | 3,152,000 | |
Customer Relationships | Industrial Process Insulators, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 5,692,000 | ||
Previously Reported | Industrial Process Insulators, Inc. | |||
Business Acquisition [Line Items] | |||
Goodwill | 10,204,000 | ||
Noncurrent deferred tax liability | 4,962,000 | ||
Previously Reported | Customer Relationships | Industrial Process Insulators, Inc. | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 10,720,000 |
Goodwill and Other Intangible41
Goodwill and Other Intangible Assets -Narrative (Details) - USD ($) | Jul. 31, 2015 | Apr. 01, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2016 |
Goodwill [Line Items] | |||||
Amortization of intangible assets | $ 2,816,000 | $ 2,896,000 | |||
Goodwill | 124,613,000 | $ 121,510,000 | |||
Intangible Assets, Net (Excluding Goodwill) | $ 96,052,000 | 103,998,000 | |||
Industrial Process Insulators, Inc. | |||||
Goodwill [Line Items] | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years 1 month 28 days | ||||
Amortization of intangible assets | $ 330,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Held in Escrow | 4,005,000 | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||||
Goodwill | $ 13,422,000 | 13,422 | |||
Fair value of total consideration transferred | $ 21,750,000 | ||||
Intangible Assets, Net (Excluding Goodwill) | $ 7,212,000 | 12,301,000 | |||
Sumac Fabrication Company Limited | |||||
Goodwill [Line Items] | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years 7 months 6 days | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Held in Escrow | $ 1,103,000 | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 75.00% | ||||
Payments to Acquire Businesses, Gross | $ 10,956,000 | ||||
Debt Instrument, face amount | 5,905,000 | ||||
Goodwill | 7,992,000 | 7,836,000 | |||
Fair value of total consideration transferred | 10,956,000 | ||||
Intangible Assets, Net (Excluding Goodwill) | 1,879,000 | $ 2,056,000 | |||
Minimum | Canadian Dollar | Sumac Fabrication Company Limited | |||||
Goodwill [Line Items] | |||||
Debt Instrument, Maturity Payment Amount | 0 | ||||
Maximum | Canadian Dollar | Sumac Fabrication Company Limited | |||||
Goodwill [Line Items] | |||||
Debt Instrument, Maturity Payment Amount | $ 7,500,000 | ||||
Canada | |||||
Goodwill [Line Items] | |||||
Amortization of intangible assets | 901,000 | $ 1,009,000 | |||
Canada | Sumac Fabrication Company Limited | |||||
Goodwill [Line Items] | |||||
Debt Instrument, face amount | 5,905,000 | ||||
Canada | CHS Transactions [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill | 36,892,000 | ||||
Intangible Assets, Net (Excluding Goodwill) | $ 25,371,000 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued employee compensation and related expenses | $ 8,173 | $ 6,906 |
Accrued employee compensation related to acquisition | 0 | 5,775 |
Customer prepayment | 207 | 200 |
Warranty reserve | 374 | 460 |
Professional fees | 1,276 | 1,088 |
Sales tax payable | 857 | 1,358 |
Other | 2,509 | 2,451 |
Total accrued current liabilities | $ 13,396 | $ 18,238 |
Short-Term Revolving Lines of43
Short-Term Revolving Lines of Credit (Details) | Jun. 30, 2016AUD | Jun. 30, 2016EUR (€) | Jun. 30, 2016USD ($) | Jun. 30, 2016JPY (¥) | Jun. 30, 2016INR (₨) | Mar. 31, 2016USD ($) |
Netherlands | ||||||
Short-Term Revolving Lines of Credit | ||||||
Outstanding borrowings | $ 0 | |||||
India | ||||||
Short-Term Revolving Lines of Credit | ||||||
Outstanding borrowings | $ 0 | 0 | ||||
Australia | ||||||
Short-Term Revolving Lines of Credit | ||||||
Outstanding borrowings | 0 | 0 | ||||
Japan | ||||||
Short-Term Revolving Lines of Credit | ||||||
Outstanding borrowings | 0 | 0 | ||||
Revolving credit facility | ||||||
Short-Term Revolving Lines of Credit | ||||||
Outstanding borrowings | 0 | $ 0 | ||||
Revolving credit facility | Netherlands | ||||||
Short-Term Revolving Lines of Credit | ||||||
Maximum borrowing capacity | 4,442,000 | |||||
Revolving credit facility | India | ||||||
Short-Term Revolving Lines of Credit | ||||||
Maximum borrowing capacity | 1,183,000 | |||||
Revolving credit facility | Australia | ||||||
Short-Term Revolving Lines of Credit | ||||||
Maximum borrowing capacity | 242,000 | |||||
Revolving credit facility | Japan | ||||||
Short-Term Revolving Lines of Credit | ||||||
Maximum borrowing capacity | $ 438,000 | |||||
Euro Member Countries, Euro | Revolving credit facility | Netherlands | ||||||
Short-Term Revolving Lines of Credit | ||||||
Maximum borrowing capacity | € | € 4,000,000 | |||||
India, Rupees | Revolving credit facility | India | ||||||
Short-Term Revolving Lines of Credit | ||||||
Maximum borrowing capacity | ₨ | ₨ 80,000,000 | |||||
Australian Dollar | Revolving credit facility | Australia | ||||||
Short-Term Revolving Lines of Credit | ||||||
Maximum borrowing capacity | AUD | AUD 325,000 | |||||
Japanese Yen | Revolving credit facility | Japan | ||||||
Short-Term Revolving Lines of Credit | ||||||
Maximum borrowing capacity | ¥ | ¥ 45,000,000 |
Long-Term Debt (Details)
Long-Term Debt (Details) | 3 Months Ended | ||
Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Apr. 30, 2013USD ($) | |
Debt Instrument [Line Items] | |||
Less current portion | $ (15,188,000) | $ (13,500,000) | |
Long-term debt, noncurrent | 75,144,000 | 80,112,000 | |
Debt issuance costs, net | $ 793,000 | 888,000 | |
Secured Debt | |||
Debt Instrument [Line Items] | |||
Debt Instrument, face amount | $ 135,000,000 | ||
Senior Notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, interest rate, stated percentage | 2.50% | ||
Loans Payable | |||
Debt Instrument [Line Items] | |||
Debt Instrument, face amount | $ 5,905,000 | ||
Variable Rate Term Loan, due April 2019, net of deferred debt issuance costs of $793 and $888 as of June 30, 2016 and March 31, 2016, respectively | $ 90,332,000 | 93,612,000 | |
Debt Instrument, interest rate, stated percentage | 2.50% | ||
Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, decrease (percentage) | 0.25% | ||
Line of credit facility, decrease in periodic payment (as a percentage) | 0.05% | ||
Annual commitment fee on unutilized commitments (as a percent) | 0.30% | ||
Line of credit facility, commitment fee percentage | 0.125% | ||
Outstanding borrowings | $ 0 | ||
Capacity available under credit facility | $ 59,022,000 | ||
Interest rate at period end (as a percent) | 2.50% | ||
London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Interest rate in addition to LIBOR rate | 1.00% | ||
Canadian Deposit Offer Rate | |||
Debt Instrument [Line Items] | |||
Interest rate in addition to LIBOR rate | 1.00% | ||
Minimum | Base Rate | |||
Debt Instrument [Line Items] | |||
Interest rate in addition to LIBOR rate | 0.50% | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Maximum leverage ratio | 2.75 | ||
Maximum | Base Rate | |||
Debt Instrument [Line Items] | |||
Interest rate in addition to LIBOR rate | 1.00% | ||
Through March 31, 2017 | Loans Payable | |||
Debt Instrument [Line Items] | |||
Repayments of Notes Payable | $ 1,125,000 | ||
Last Two Years Of Loan | Loans Payable | |||
Debt Instrument [Line Items] | |||
Repayments of Notes Payable | 1,688,000 | ||
Due in April 2019 | Loans Payable | |||
Debt Instrument [Line Items] | |||
Repayments of Notes Payable | $ 40,500,000 | ||
Interest Rate Swap | Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Derivative, fixed interest rate | 3.18% | ||
Interest payments, percent hedged | 100.00% | ||
Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 0 | $ 0 | |
Revolving credit facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Debt Instrument, face amount | $ 60,000,000 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2016 | Apr. 01, 2015 | |
SUMAC Former Principal | ||
Related Party Transaction [Line Items] | ||
Noncontrolling Interest, ownership by noncontrolling owners (percent) | 25.00% | |
Non-interest Bearing Performance Based Note | ||
Related Party Transaction [Line Items] | ||
Debt Instrument, face amount | $ 5,905,000 | |
Payments to Related Party | SUMAC Former Principal | ||
Related Party Transaction [Line Items] | ||
Related party transaction, amounts of transaction | $ 5,805,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Totaled arrangements under letter of credit guarantees and performance bonds securing performance obligations | $ 9,641 | |
Guarantee obligations secured by cash deposits | 1,434 | |
Guarantee obligations represented by a reduction of the available amount of the company's short term and long term revolving lines of credit | 978 | |
Cash deposits pledged as collateral on performance bonds and letters of credit | 1,434 | $ 1,408 |
Indian Custom Bonds Outstanding | $ 5,369 |
Stock-Based Compensation Expe47
Stock-Based Compensation Expense (Details) $ in Thousands | 3 Months Ended | 49 Months Ended | |||
Jun. 30, 2016USD ($)shares | Jun. 30, 2015USD ($) | Jun. 30, 2014plan | Apr. 08, 2011shares | Jul. 28, 2010shares | |
Stock-Based Compensation Expense | |||||
Number of stock option award plans | plan | 2 | ||||
Options outstanding (in shares) | 418,806 | ||||
Stock compensation expense | $ | $ 906 | $ 875 | |||
Restricted Stock and Stock Option Plan | |||||
Stock-Based Compensation Expense | |||||
Maximum number of shares of the company's common stock that may be awarded | 2,767,171 | ||||
2011 Long-term Incentive Plan | |||||
Stock-Based Compensation Expense | |||||
Maximum number of shares of the company's common stock that may be awarded | 2,893,341 | ||||
Performance Shares [Member] | |||||
Stock-Based Compensation Expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 15,141 | ||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ | $ 300 | ||||
Restricted Stock Units | |||||
Stock-Based Compensation Expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 121,520 | ||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ | $ 2,255 | ||||
Common Stock [Member] | |||||
Stock-Based Compensation Expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 5,460 | ||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ | $ 96 | ||||
Share-based compensation arrangement by share-based payment award, fair value of shares authorized amount | $ | $ 385 | ||||
Minimum | |||||
Stock-Based Compensation Expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Possible Number of Performance Shares to be Granted | 0 | ||||
Maximum | |||||
Stock-Based Compensation Expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Possible Number of Performance Shares to be Granted | 30,282 | ||||
Management [Member] | Performance Shares [Member] | |||||
Stock-Based Compensation Expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 32,345 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Fair Value | $ | $ 600 | ||||
Management [Member] | Minimum | |||||
Stock-Based Compensation Expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Possible Number of Performance Shares to be Granted | 0 | ||||
Management [Member] | Maximum | |||||
Stock-Based Compensation Expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Possible Number of Performance Shares to be Granted | 64,690 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Examination [Line Items] | ||
Income tax expense | $ 1,015 | $ 2,467 |
Pre-tax income (loss) | 3,659 | $ 6,993 |
Decrease of deferred tax liability | $ (455) | |
Annual effective tax rate before discrete events | 27.60% | 28.50% |
Long-term liability for uncertain tax positions | $ 674 | |
Interest and penalties accrued as income tax expense | $ 14 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended | |||
Jun. 30, 2016USD ($)segmentGeographic_Region | Jun. 30, 2015USD ($) | Mar. 31, 2016USD ($) | Apr. 01, 2015USD ($) | |
Sales by geographic area: | ||||
Number of Reportable Segments | segment | 4 | |||
Number of Operating Segments | Geographic_Region | 4 | |||
Revenues | $ 63,396,000 | $ 65,223,000 | ||
Depreciation | 1,414,000 | 1,116,000 | ||
Amortization of intangible assets | 2,816,000 | 2,896,000 | ||
Operating income | ||||
Stock compensation expense | 906,000 | 875,000 | ||
Operating income (loss) | 4,190,000 | 8,072,000 | ||
Property, plant and equipment, net | 41,983,000 | $ 41,617,000 | ||
Assets | 456,971,000 | 468,677,000 | ||
Operating Segments | ||||
Sales by geographic area: | ||||
Revenues | 63,396,000 | 65,223,000 | ||
Intersegment Eliminations | ||||
Sales by geographic area: | ||||
Revenues | 11,957,000 | 12,820,000 | ||
Segment Reconciling Items | ||||
Operating income | ||||
Stock compensation expense | (906,000) | (875,000) | ||
Public company costs | (371,000) | (314,000) | ||
United States | ||||
Sales by geographic area: | ||||
Depreciation | 861,000 | 674,000 | ||
Amortization of intangible assets | 1,314,000 | 1,258,000 | ||
Operating income | ||||
Operating income (loss) | 39,000 | 4,222,000 | ||
Property, plant and equipment, net | 34,439,000 | 34,528,000 | ||
Assets | 195,389,000 | 196,400,000 | ||
United States | Operating Segments | ||||
Sales by geographic area: | ||||
Revenues | 30,154,000 | 28,498,000 | ||
United States | Intersegment Eliminations | ||||
Sales by geographic area: | ||||
Revenues | 10,639,000 | 11,555,000 | ||
Canada | ||||
Sales by geographic area: | ||||
Depreciation | 452,000 | 342,000 | ||
Amortization of intangible assets | 901,000 | 1,009,000 | ||
Operating income | ||||
Operating income (loss) | 1,733,000 | 1,330,000 | ||
Property, plant and equipment, net | 4,299,000 | 3,754,000 | ||
Assets | 138,062,000 | 145,301,000 | ||
Canada | Operating Segments | ||||
Sales by geographic area: | ||||
Revenues | 10,109,000 | 13,070,000 | ||
Canada | Intersegment Eliminations | ||||
Sales by geographic area: | ||||
Revenues | 589,000 | 796,000 | ||
Europe | ||||
Sales by geographic area: | ||||
Depreciation | 69,000 | 58,000 | ||
Amortization of intangible assets | 335,000 | 363,000 | ||
Operating income | ||||
Operating income (loss) | 1,651,000 | 2,385,000 | ||
Property, plant and equipment, net | 2,698,000 | 2,769,000 | ||
Assets | 72,516,000 | 76,754,000 | ||
Europe | Operating Segments | ||||
Sales by geographic area: | ||||
Revenues | 13,763,000 | 16,351,000 | ||
Europe | Intersegment Eliminations | ||||
Sales by geographic area: | ||||
Revenues | 601,000 | 369,000 | ||
Asia | ||||
Sales by geographic area: | ||||
Depreciation | 32,000 | 42,000 | ||
Amortization of intangible assets | 266,000 | 266,000 | ||
Operating income | ||||
Operating income (loss) | 2,044,000 | 1,324,000 | ||
Property, plant and equipment, net | 547,000 | 566,000 | ||
Assets | 51,004,000 | $ 50,222,000 | ||
Asia | Operating Segments | ||||
Sales by geographic area: | ||||
Revenues | 9,370,000 | 7,304,000 | ||
Asia | Intersegment Eliminations | ||||
Sales by geographic area: | ||||
Revenues | $ 128,000 | 100,000 | ||
Sumac Fabrication Company Limited | ||||
Operating income | ||||
Revenue as a Percentage of Sales and Operating Income | 10.00% | |||
Sumac Fabrication Company Limited | ||||
Operating income | ||||
Debt Instrument, face amount | $ 5,905,000 | |||
Sumac Fabrication Company Limited | Canada | ||||
Operating income | ||||
Salaries, Wages and Officers' Compensation | $ 1,376,000 | |||
Debt Instrument, face amount | $ 5,905,000 |