Cover Page
Cover Page - shares | 9 Months Ended | |
Dec. 31, 2021 | Feb. 02, 2022 | |
Cover [Abstract] | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-35159 | |
Entity Registrant Name | THERMON GROUP HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-2228185 | |
Entity Address, Address Line One | 7171 Southwest Parkway | |
Entity Address, Address Line Two | Building 300 | |
Entity Address, Address Line Three | Suite 200 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78735 | |
City Area Code | 512 | |
Local Phone Number | 690-0600 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 33,350,311 | |
Entity Central Index Key | 0001489096 | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Trading Symbol | THR | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Mar. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 32,566 | $ 40,124 |
Accounts receivable, net of allowances of $2,689 and $2,074 as of December 31, 2021 and March 31, 2021, respectively | 89,422 | 74,501 |
Inventories, net | 69,634 | 63,790 |
Contract assets | 21,248 | 11,379 |
Prepaid expenses and other current assets | 12,007 | 8,784 |
Income tax receivable | 7,936 | 8,231 |
Total current assets | 232,813 | 206,809 |
Property, plant and equipment, net | 66,299 | 72,630 |
Goodwill | 211,389 | 213,038 |
Intangible assets, net | 96,398 | 103,784 |
Operating lease right-of-use assets | 10,935 | 12,619 |
Deferred income taxes | 1,083 | 2,586 |
Other long-term assets | 7,553 | 6,412 |
Total assets | 626,470 | 617,878 |
Current liabilities: | ||
Accounts payable | 34,799 | 19,722 |
Accrued liabilities | 22,731 | 23,888 |
Current portion of long term debt | 7,004 | 2,500 |
Contract liabilities | 6,568 | 2,959 |
Lease liabilities | 3,335 | 3,511 |
Income taxes payable | 417 | 218 |
Total current liabilities | 74,854 | 52,798 |
Long-term debt, net | 125,092 | 143,017 |
Deferred income taxes | 18,532 | 21,006 |
Non-current lease liabilities | 10,312 | 12,373 |
Other noncurrent liabilities | 9,120 | 9,812 |
Total liabilities | 237,910 | 239,006 |
Commitments and contingencies (Note 9) | ||
Equity | ||
Common stock: $0.001 par value; 150,000,000 authorized; 33,341,899 and 33,225,808 shares issued and outstanding at December 31, 2021 and March 31, 2021, respectively | 33 | 33 |
Preferred stock: $0.001 par value; 10,000,000 authorized; no shares issued and outstanding | 0 | 0 |
Additional paid in capital | 233,555 | 231,322 |
Accumulated other comprehensive loss | (39,871) | (35,919) |
Retained earnings | 194,843 | 183,436 |
Total equity | 388,560 | 378,872 |
Total liabilities and equity | $ 626,470 | $ 617,878 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Mar. 31, 2021 |
Depreciation and amortization | $ 15,349 | $ 20,721 |
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 | 33,341,899 | 33,225,808 |
Common stock, shares outstanding | 33,341,899 | 33,225,808 |
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 |
Thermon Holding Corp. | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 2,689 | $ 2,074 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||||
Sales | $ 100,613 | $ 79,604 | $ 253,090 | $ 202,858 |
Cost of sales | 59,866 | 42,644 | 154,084 | 112,848 |
Gross profit | 40,747 | 36,960 | 99,006 | 90,010 |
Operating expenses: | ||||
Selling, general and administrative expenses | 22,099 | 20,283 | 66,820 | 66,222 |
Deferred compensation plan expense/(income) | 292 | 599 | 610 | 1,380 |
Amortization of intangible assets | 2,187 | 2,135 | 6,613 | 7,265 |
Restructuring and other charges/(income) | 0 | 3,783 | (414) | 8,692 |
Income/(loss) from operations | 16,169 | 10,160 | 25,377 | 6,451 |
Other income/(expenses): | ||||
Interest expense, net | (842) | (2,433) | (5,029) | (7,404) |
Other income/(expense) | (627) | 874 | (3,517) | 2,188 |
Income/(loss) before provision for income taxes | 14,700 | 8,601 | 16,831 | 1,235 |
Income tax expense/(benefit) | 3,430 | 2,426 | 5,424 | (693) |
Net income/(loss) | 11,270 | 6,175 | 11,407 | 1,928 |
Net income/(loss) | 11,270 | 6,175 | 11,407 | 1,928 |
Comprehensive income/(loss): | ||||
Net income/(loss) | 11,270 | 6,175 | 11,407 | 1,928 |
Foreign currency translation adjustment | (413) | 14,516 | (3,843) | 29,245 |
Other miscellaneous income/(loss) | (96) | (152) | (109) | (731) |
Comprehensive income/(loss) | $ 10,761 | $ 20,539 | $ 7,455 | $ 30,442 |
Net income/(loss) per common share: | ||||
Basic (in dollars per share) | $ 0.34 | $ 0.19 | $ 0.34 | $ 0.06 |
Diluted (in dollars per share) | $ 0.33 | $ 0.18 | $ 0.34 | $ 0.06 |
Weighted-average shares used in computing net income/(loss) per common share: | ||||
Basic (in shares) | 33,340,000 | 33,180,562 | 33,292,614 | 33,110,877 |
Diluted (in shares) | 33,658,104 | 33,419,573 | 33,481,964 | 33,234,357 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings/ (Loss) | Accumulated Other Comprehensive Income/(Loss) | EmployeesCommon Stock | Executive OfficerCommon Stock | DirectorCommon Stock |
Beginning balance (in shares) at Mar. 31, 2020 | 32,916,818 | |||||||
Beginning balance at Mar. 31, 2020 | $ 346,439 | $ 33 | $ 227,741 | $ 182,559 | $ (63,894) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in exercise of stock options (in shares) | 81,995 | |||||||
Issuance of common stock in exercise of stock options | 437 | $ 0 | 437 | |||||
Issuance of common stock (in shares) | 39,458 | 63,477 | 13,520 | |||||
Stock compensation expense | 1,133 | 1,133 | ||||||
Repurchase of employee stock units on vesting | (557) | (557) | ||||||
Net income/(loss) | (6,085) | (6,085) | ||||||
Foreign currency translation adjustment | 9,475 | 9,475 | ||||||
Other | (380) | (380) | ||||||
Ending balance (in shares) at Jun. 30, 2020 | 33,115,268 | |||||||
Ending balance at Jun. 30, 2020 | 350,462 | $ 33 | 228,754 | 176,474 | (54,799) | |||
Beginning balance (in shares) at Mar. 31, 2020 | 32,916,818 | |||||||
Beginning balance at Mar. 31, 2020 | 346,439 | $ 33 | 227,741 | 182,559 | (63,894) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income/(loss) | 1,928 | |||||||
Ending balance (in shares) at Dec. 31, 2020 | 33,186,218 | |||||||
Ending balance at Dec. 31, 2020 | 379,582 | $ 33 | 230,450 | 184,487 | (35,388) | |||
Beginning balance (in shares) at Jun. 30, 2020 | 33,115,268 | |||||||
Beginning balance at Jun. 30, 2020 | 350,462 | $ 33 | 228,754 | 176,474 | (54,799) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in exercise of stock options (in shares) | 1,344 | |||||||
Issuance of common stock in exercise of stock options | 15 | 15 | ||||||
Issuance of common stock (in shares) | 33,789 | 6,005 | 13,392 | |||||
Stock compensation expense | 1,358 | 1,358 | ||||||
Repurchase of employee stock units on vesting | (129) | (129) | ||||||
Net income/(loss) | 1,838 | 1,838 | ||||||
Foreign currency translation adjustment | 5,254 | 5,254 | ||||||
Other | (199) | (199) | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 33,169,798 | |||||||
Ending balance at Sep. 30, 2020 | 358,599 | $ 33 | 229,998 | 178,312 | (49,744) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in exercise of stock options (in shares) | 0 | |||||||
Issuance of common stock in exercise of stock options | 16 | 16 | ||||||
Issuance of common stock (in shares) | 1,867 | 14,553 | ||||||
Stock compensation expense | 430 | 430 | ||||||
Repurchase of employee stock units on vesting | (2) | (2) | ||||||
Net income/(loss) | 6,175 | 6,175 | ||||||
Foreign currency translation adjustment | 14,516 | 14,516 | ||||||
Other | (152) | 8 | (160) | |||||
Ending balance (in shares) at Dec. 31, 2020 | 33,186,218 | |||||||
Ending balance at Dec. 31, 2020 | $ 379,582 | $ 33 | 230,450 | 184,487 | (35,388) | |||
Beginning balance (in shares) at Mar. 31, 2021 | 33,225,808 | 33,225,808 | ||||||
Beginning balance at Mar. 31, 2021 | $ 378,872 | $ 33 | 231,322 | 183,436 | (35,919) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in exercise of stock options (in shares) | 8,100 | |||||||
Issuance of common stock in exercise of stock options | 97 | 97 | ||||||
Issuance of common stock (in shares) | 23,858 | 42,326 | 7,368 | |||||
Stock compensation expense | 1,178 | 1,178 | ||||||
Repurchase of employee stock units on vesting | (548) | (548) | ||||||
Net income/(loss) | (340) | (340) | ||||||
Foreign currency translation adjustment | 4,195 | 0 | 4,195 | |||||
Other | (64) | 0 | (64) | |||||
Ending balance (in shares) at Jun. 30, 2021 | 33,307,460 | |||||||
Ending balance at Jun. 30, 2021 | $ 383,390 | $ 33 | 232,049 | 183,096 | (31,788) | |||
Beginning balance (in shares) at Mar. 31, 2021 | 33,225,808 | 33,225,808 | ||||||
Beginning balance at Mar. 31, 2021 | $ 378,872 | $ 33 | 231,322 | 183,436 | (35,919) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income/(loss) | $ 11,407 | |||||||
Ending balance (in shares) at Dec. 31, 2021 | 33,341,899 | 33,341,899 | ||||||
Ending balance at Dec. 31, 2021 | $ 388,560 | $ 33 | 233,555 | 194,843 | (39,871) | |||
Beginning balance (in shares) at Jun. 30, 2021 | 33,307,460 | |||||||
Beginning balance at Jun. 30, 2021 | 383,390 | $ 33 | 232,049 | 183,096 | (31,788) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock (in shares) | 10,687 | 7,344 | 8,352 | |||||
Stock compensation expense | 1,246 | 1,246 | ||||||
Repurchase of employee stock units on vesting | (14) | (14) | ||||||
Net income/(loss) | 477 | 477 | ||||||
Foreign currency translation adjustment | (7,625) | (7,625) | ||||||
Other | 51 | (1) | 1 | 51 | ||||
Ending balance (in shares) at Sep. 30, 2021 | 33,333,843 | |||||||
Ending balance at Sep. 30, 2021 | 377,525 | $ 33 | 233,280 | 183,574 | (39,362) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock (in shares) | 52 | 8,004 | ||||||
Stock compensation expense | 275 | 275 | ||||||
Net income/(loss) | 11,270 | 11,270 | ||||||
Foreign currency translation adjustment | (413) | (413) | ||||||
Other | $ (97) | (1) | (96) | |||||
Ending balance (in shares) at Dec. 31, 2021 | 33,341,899 | 33,341,899 | ||||||
Ending balance at Dec. 31, 2021 | $ 388,560 | $ 33 | $ 233,555 | $ 194,843 | $ (39,871) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities | ||
Net income/(loss) | $ 11,407 | $ 1,928 |
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | ||
Depreciation and amortization | 15,349 | 15,617 |
Amortization of deferred debt issuance costs | 495 | 773 |
Loss on extinguishment of debt | 2,569 | 0 |
Stock compensation expense | 2,699 | 2,921 |
Deferred income taxes | (878) | (2,698) |
Reserve for uncertain tax positions, net | 58 | 0 |
(Gain)/Loss on long-term cross currency swap | (1,391) | 5,068 |
Remeasurement (gain)/loss on intercompany balances | (556) | (6,996) |
Loss on sale of business, net of cash surrendered | 310 | 2,045 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (15,471) | 21,028 |
Inventories | (6,137) | (10,618) |
Contract assets | (6,287) | (2,148) |
Other current and non-current assets | (3,293) | (2,833) |
Accounts payable | 15,221 | (2,263) |
Accrued liabilities and non-current liabilities | (824) | (991) |
Income taxes payable and receivable | 475 | (5,354) |
Net cash provided by/(used in) operating activities | 13,746 | 15,479 |
Investing activities | ||
Purchases of property, plant and equipment | (2,920) | (4,708) |
Sale of rental equipment | 235 | 65 |
Net cash provided by/(used in) in investing activities | (2,685) | (4,643) |
Financing activities | ||
Proceeds from Term Loan A | 140,425 | 0 |
Proceeds from revolving credit facility | 15,959 | 37,189 |
Payments on long-term debt and revolving credit facility | (171,862) | (44,339) |
Issuance costs associated with revolving line of credit and long term debt | (1,248) | 0 |
Proceeds from exercise of stock options | 97 | 468 |
Repurchase of employee stock units on vesting | (562) | (688) |
Payments on finance leases | (96) | (218) |
Net cash provided by/(used in) financing activities | (17,287) | (7,588) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (821) | 3,057 |
Cash, cash equivalents and restricted cash at beginning of period | 42,450 | 46,006 |
Cash, cash equivalents and restricted cash at end of period | 35,403 | 52,311 |
Change in cash, cash equivalents and restricted cash | $ (7,047) | $ 6,305 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policy Information | 9 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Accounting Policy Information | Basis of Presentation Thermon Group Holdings, Inc. and its direct and indirect subsidiaries are referred to collectively as “we,” “our,” or the “Company” herein. We are one of the largest providers of highly engineered industrial process heating solutions for process industries. We offer a full suite of products (heating units, heating cables, temporary power solutions and tubing bundles), services (engineering, installation and maintenance services) and software (design optimization and wireless and network control systems) required to deliver comprehensive solutions to some of the world's largest and most complex projects. Our condensed consolidated financial statements are prepared in conformity with generally accepted accounting principles in the United States ("GAAP") and the requirements of the United States Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, the accompanying condensed consolidated financial statements do not include all disclosures required for full annual financial statements and should be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2021 ("fiscal 2021"). In our opinion, the accompanying condensed consolidated financial statements reflect all adjustments considered necessary to present fairly our financial position at December 31, 2021 and March 31, 2021, and the results of our operations for the three and nine months ended December 31, 2021 and 2020. Certain prior year amounts have been reclassified to conform with the current year's presentation. Impact of the COVID-19 Pandemic The COVID-19 pandemic and the measures being taken to address and limit the spread of the virus have adversely affected the economies and financial markets of many countries, resulting in an economic downturn that negatively impacted, and may continue to negatively impact, global demand for our products and services. Although we believe the general economic environment in which we operate has improved since the onset of the COVID-19 pandemic, we may experience a decline in the demand of our products and services or disruptions in raw materials or labor required for manufacturing that could materially and negatively impact our business, financial condition, results of operation and overall financial performance in future periods. We have experienced increased costs across our global supply chain as we focus on meeting growing demand from our customers. In certain circumstances, we have had issues with a lack of availability of certain raw materials as well as increases in costs of our raw materials due to: use of alternate suppliers, higher freight costs, increased lead times, and expedited shipping. Also, we have seen labor inefficiencies and increased overtime in certain of our facilities due to temporary shortages in raw materials required for production. These increased costs have contributed to lower-than-anticipated margins in the three and nine months ended December 31, 2021. On April 11, 2020, the Canadian government officially enacted the Canadian Emergency Wage Subsidy (the “CEWS”) for the purposes of assisting employers in financial hardship due to the COVID-19 pandemic and of reducing potential layoffs of employees. The CEWS, which was made retroactive to March 15, 2020, generally provides “eligible entities” with a wage subsidy of up to 75% of “eligible remuneration” paid to an eligible employee per week, limited to a certain weekly maximum. On September 23, 2020, the Canadian government announced that the CEWS program would be extended through the summer of 2021 and announced certain modifications to the subsidy calculation. Our Canadian operations have benefited from such wage subsidies and have received related distributions from the Canadian government. We recorded $199 and $1,448 to "Cost of sales" in our condensed consolidated statement of operations for the three and nine months ended December 31, 2021, respectively. We recorded $4 and $504 to "Selling, general and administrative expenses" in our condensed consolidated statement of operations for the three and nine months ended December 31, 2021, respectively. We recorded $1,399 and $3,552 to "Cost of sales" in our condensed consolidated statement of operations for the three and nine months ended December 31, 2020, respectively. We recorded $301 an $1,953 to "Selling, general and administrative expenses" in our condensed consolidated statement of operations for the three and nine months ended December 31, 2020, respectively. Additionally, we capitalized $2 and $430 in "Inventories, net" at December 31, 2021 and March 31, 2021. We anticipate our benefit from the CEWS program to decline in fiscal 2022 as we become less qualified for the subsidy and as the program ended in October 2021. Use of Estimates Generally accepted accounting principles 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 management has based their assumptions and estimates on the facts and circumstances existing at December 31, 2021, 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 and nine months ended December 31, 2021 are not necessarily indicative of the results that may be achieved for the fiscal year ending March 31, 2022 ("fiscal 2022"). We increased our allowance for doubtful accounts at December 31, 2021 to $2,689 from $2,074 at March 31, 2021. The increase in the period is primarily attributable to an accrual for bad debts related to potentially uncollectible receivables, mainly in our EMEA reportable segment. We typically record compensation cost related to performance stock units that are initially deemed probable to meet our performance target 100% of the award fair value. However, during the three months ended December 31, 2021, we adjusted our compensation cost to reflect the likelihood of certain performance stock units granted in fiscal 2020 vesting based on the Company's financial performance. We determined that these awards were not probable to meet the related performance condition; therefore we have recorded income from a reversal of compensation cost of $1,073. We also recognized incremental compensation cost in the three months ended December 31, 2021 of $107 on certain fiscal 2021 and 2022 performance stock units based on the expected financial performance of the Company. Restricted Cash and Cash Equivalents The Company maintains restricted cash related to certain letter of credit guarantees and performance bonds securing performance obligations. The following table provides a reconciliation of cash, cash equivalents, and restricted cash included in prepaid expenses and other current assets and restricted cash included in other long-term assets reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statements of cash flows. December 31, 2021 2020 Cash and cash equivalents $ 32,566 $ 49,617 Restricted cash included in prepaid expenses and other current assets 2,496 2,314 Restricted cash included in other long-term assets 341 380 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 35,403 $ 52,311 Amounts shown in restricted cash included in prepaid expenses and other current assets and other long-term assets represent those required to be set aside by a contractual agreement, which contain cash deposits pledged as collateral on performance bonds and letters of credit. Amounts shown in restricted cash in other long-term assets represent such agreements that require a commitment term longer than one year. Correction of an Error During the second quarter of fiscal 2022, we identified an error in our previously issued unaudited condensed consolidated financial statements as of and for the three months ended June 30, 2021, as well as our consolidated financial statements as of and for the three months ended March 31, 2021. The error was due to underreported warranty costs associated with the operational execution of a large project in our US-LAM segment that completed in a prior year for which we are supplying engineering services, installation services, and equipment. Management evaluated the materiality of the error from a qualitative and quantitative perspective and concluded that the error was not material to any one quarterly period. Accordingly, we corrected the error in the consolidated balance sheets at March 31, 2021 and consolidated statements of operations and comprehensive income for the three and twelve months ended March 31, 2021. We also corrected the error in the unaudited condensed consolidated balance sheets at June 30, 2021, and unaudited condensed consolidated statements of operations and comprehensive income for the three months ended June 30, 2021 is as follows: Consolidated Balance Sheets March 31, 2021 March 31, 2021 as reported Adjustments as corrected Accrued liabilities $ 23,517 $ 371 $ 23,888 Deferred income taxes 21,088 (82) 21,006 Retained earnings $ 183,725 (289) 183,436 Consolidated Statement of Operations and Comprehensive Income Three Months Ended March 31, 2021 Three Months Ended March 31, 2021 as reported Adjustments as corrected Sales $ 73,323 $ — $ 73,323 Cost of sales 46,090 371 46,461 Gross profit 27,233 (371) 26,862 Net income/(loss) $ (763) $ (288) $ (1,051) Net income/(loss) per common share: Basic $ (0.02) $ (0.01) $ (0.03) Diluted $ (0.02) $ (0.01) $ (0.03) Consolidated Statement of Operations and Comprehensive Income Twelve Months Ended March 31, 2021 Twelve Months Ended March 31, 2021 as reported Adjustments as corrected Sales $ 276,181 $ — $ 276,181 Cost of sales 158,938 371 159,309 Gross profit 117,243 (371) 116,872 Net income/(loss) $ 1,165 $ (288) $ 877 Net income/(loss) per common share: Basic $ 0.04 $ (0.01) $ 0.03 Diluted $ 0.03 $ 0.00 $ 0.03 Consolidated Balance Sheets June 30, 2021 June 30, 2021 as reported Adjustments as corrected Accrued liabilities $ 20,046 $ 2,002 $ 22,048 Income taxes payable 678 (424) 254 Deferred income taxes 21,880 (82) 21,798 Retained earnings $ 184,591 (1,496) 183,095 Three Months Ended June 30, 2021 Three Months Ended June 30, 2021 as reported Adjustments as corrected Sales $ 71,155 $ — $ 71,155 Cost of sales 42,986 1,631 44,617 Gross profit 28,169 (1,631) 26,538 Net income/(loss) $ 867 $ (1,207) $ (340) Net income/(loss) per common share: Basic $ 0.03 $ (0.04) $ (0.01) Diluted $ 0.03 $ (0.04) $ (0.01) Recent Accounting Pronouncements Business Combinations - In October 2021, the FASB issued Accounting Standards Update, ("ASU") 2021-08 - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASC 805). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. Under this "Topic 606 approach," the acquirer applies the revenue model as if it had originated the contracts. This is a departure from the current requirement to measure contract assets and contract liabilities at fair value. The ASU is effective for all public business entities in annual and interim periods starting after December 15, 2022 and early adoption is permitted. We intend to evaluate the option to early adopt should we execute a business combination before mandatory adoption. Adopting this standard could have a material impact on revenue associated with an acquired business. Government Assistance - In November 2021, the FASB issued Accounting Standards Update 2021-10 - Government Assistance , which creates new Codification Topic 832 (government assistance). This new topic addresses the requirement for disclosures when an entity receives government assistance. The requirements state the entity should disclose the nature of the transactions and the related accounting policies used, the line items on the balance sheet and income statement that are affected and the amounts applicable to each financial statement line item, and significant terms and conditions of the transactions. Topic 832 is effective for all public business entities in annual periods in fiscal years beginning after December 15, 2021. Early application is permitted. We have early adopted this standard effective October 1, 2021, and it did not have a material impact on our financial statements. Reference Rate Reform - In March 2020, the FASB issued Accounting Standards Update 2020-04 - Reference Rate Reform (ASC 848). The update is intended to provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This ASU became effective in March of 2020. As of December 31, 2021, we have not yet elected any optional expedients provided in the standard. We will apply the accounting relief, if necessary, as relevant contract and hedge accounting relationship modifications are made during the reference rate reform transition period. Income Taxes - In December 2019, the FASB issued Accounting Standards Update 2019-12 - Income Taxes (ASC 740) : Simplifying the Accounting for Income Taxes. This ASU amends ASC 740 to simplify certain requirements related to income taxes, specifically as it relates to interim period accounting for changes in tax law and year-to-date loss limitation in interim period accounting. The new standard is effective for fiscal years beginning after December 15, 2020. We adopted this standard effective April 1, 2021, and such adoption did not have a material impact on our consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Dec. 31, 2021 | |
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 use 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 and cash equivalents, 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 December 31, 2021 and March 31, 2021, 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: December 31, 2021 March 31, 2021 Carrying Fair Value Carrying Fair Value Valuation Technique Financial Liabilities Outstanding principal amount of senior secured credit facility $ 132,780 $ 132,116 $ 148,500 $ 148,871 Level 2 - Market Approach At December 31, 2021 and March 31, 2021, the fair value of our long-term debt is based on market quotes available for issuance of debt with similar terms. 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. Cross Currency Swap On September 29, 2021, we terminated a long-term cross currency swap we previously entered into through transactions related to the amendment to our term loan and revolving credit facility. The previous intercompany receivable, for which we had the swap, was settled with us by our wholly-owned Canadian subsidiary, Thermon Canada Inc. Refer to Note 8,"Long-Term Debt" for more information regarding our debt transactions. There were no transactions related to the long-term cross currency swap in the three months ended December 31, 2021, and there was not a balance associated with the swap in our condensed consolidated balance sheets as of December 31, 2021. Deferred Compensation Plan The Company provides a non-qualified deferred compensation plan for certain highly compensated employees where payroll contributions are made by the employees on a pre-tax basis. Included in “Other long-term assets” in the condensed consolidated balance sheets at December 31, 2021 and March 31, 2021 were $5,710 and $5,047, respectively, of deferred compensation plan assets held by the Company. Deferred compensation plan assets (mutual funds) are measured at fair value on a recurring basis based on quoted market prices in active markets (Level 1). The Company has a corresponding liability to participants of $5,258 and $4,608 included in “Other long-term liabilities” in the condensed consolidated balance sheets at December 31, 2021 and March 31, 2021, respectively. In fiscal 2022, deferred compensation plan expense/(income) is included as such in the condensed consolidated statement of operations, and therefore is excluded from "Selling, general and administrative expenses." Deferred compensation expense/(income) was $292 and $599 for the three months ended December 31, 2021 and 2020, respectively, and $610 and $1,380 for the nine months ended December 31, 2021 and 2020, respectively. Expenses and income from our deferred compensation plan were offset by unrealized gains and losses for the deferred compensation plan included in "Other income and expense" on our condensed consolidated statements of operations and comprehensive income. Our unrealized gains on investments were $314 and $651, respectively, for the three months ended December 31, 2021 and 2020, respectively, and $620 and $1,419 for the nine months ended December 31, 2021 and 2020, respectively. Trade Related Foreign Currency Forward Contracts We transact business in various foreign currencies and have established a program that primarily utilizes foreign currency forward contracts to address the risk associated with the effects of certain foreign currency exposures. Under this program, increases or decreases in our foreign currency exposures are offset by gains or losses on the forward contracts to mitigate foreign currency transaction gains or losses. These foreign currency exposures arise from intercompany transactions as well as third party accounts receivable or payable that are denominated in foreign currencies. 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 "Other income and expense" on our condensed consolidated statements of operations and comprehensive income. These gains and losses are designed to offset gains and losses resulting from settlement of receivables or payables by our foreign operations which are settled in currency other than the local transactional currency. The fair value is determined by quoted prices from active foreign currency markets (Level 2). Fair value amounts for such forward contracts on our condensed consolidated balance sheets are either classified as accounts receivable, net or accrued liabilities depending on whether the forward contract is in a gain (accounts receivable, net) or loss (accrued liabilities) position. 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 December 31, 2021 and March 31, 2021, the notional amounts of forward contracts were as follows: Notional amount of foreign currency forward contracts by currency December 31, 2021 March 31, 2021 Russian Ruble $ 1,701 $ 3,000 Canadian Dollar 3,500 5,500 South Korean Won 1,850 5,000 Mexican Peso 1,850 1,500 Australian Dollar 1,300 900 Great Britain Pound — 500 Total notional amounts $ 10,201 $ 16,400 The following table represents the fair value of our foreign currency forward contracts: December 31, 2021 March 31, 2021 Fair Value Fair Value Assets Liabilities Assets Liabilities Foreign currency forward contracts $ 63 $ 64 $ 61 $ 32 Foreign currency gains or losses related to our forward contracts in the accompanying condensed consolidated statements of operations and comprehensive income were losses of $(637) and of $(388) in the three months ended December 31, 2021 and 2020, respectively, and losses of $(861) and $(437) for the nine months ended December 31, 2021 and 2020, 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 December 31, 2021 and 2020, our net foreign currency transactions resulted in losses of $(949) and gains of $109, respectively, and losses of |
Restructuring and other charges
Restructuring and other charges (income) | 9 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and other charges (income) | Restructuring and Other Charges/(Income) In fiscal 2021, we enacted certain restructuring initiatives to align our cost structure with the decline in demand for our products and services at that time primarily due to COVID-19 and supply/demand fluctuations in commodity prices. We are substantially complete with these initiatives. We recorded the following charges/(income) as it relates to restructuring. Fiscal 2022 charges/(income) No activity was recorded for the three months ended December 31, 2021. For the nine months ended December 31, 2021, we recorded $(103) for severance-related activity in our Canadian segment which was recorded to "Restructuring and other charges/(income)" in our condensed consolidated statements of operations and comprehensive income. Additionally, we recorded $(311) in cash receipts related to receivables existing prior to the sale of our South Africa business, which was completed in fiscal 2021. Fiscal 2021 charges/(income) The Company eliminated approximately 66 and 262 hourly and salaried positions and incurred $997 and $5,858 in one-time severance costs during the three and nine months ended December 31, 2020, respectively, which was recorded to "Restructuring and other charges/(income)" in our condensed consolidated statements of operations and comprehensive income. In addition, we incurred $429 in lease impairment costs primarily related to one of our Canadian facilities that was substantially vacated by December 31, 2020, as the Company executed efforts to optimize its global manufacturing footprint. We also exercised the early termination option for one of our existing leases in Canada, which resulted in the remeasurement of the related right-of-use asset and lease liability and accelerated the lease amortization and expense to align with the cease use date of the facility. We substantially vacated the facility by December 31, 2020. As a result, we recorded an incremental $144 and $191 in lease abandonment charges during the three and nine months ended December 31, 2020, respectively. Both of these lease-related costs were recorded to restructuring and other charges/(income) in our condensed consolidated statements of operations and comprehensive income. Disposal of South Africa Business On December 15, 2020, a Sale of Shares Agreement was entered into between one of our consolidated subsidiaries and an investor consortium (the "TSAPL Purchasers"). As a result of this agreement, 100% of the outstanding common shares of our consolidated subsidiary, Thermon South Africa Proprietary Limited (the "South Africa Business"), were sold to the TSAPL Purchasers, with aggregate proceeds of 2,500 South African Rand (ZAR), or $167, as partial satisfaction of an existing note receivable. In addition, the TSAPL Purchasers committed to settle operational receivables attributable to other Thermon Group Holdings, Inc. subsidiaries that were existing at the time of sale. After evaluating our presence in the region served by the South Africa Business, the Company decided to centralize and consolidate our business structure and streamline our organization. A member of the TSAPL Purchasers was the current general manager of the operations at the time of sale. This sale is accompanied by a distribution agreement whereby the new owners will distribute our products, thus continuing the Company's presence in the region. We believes this is an opportunity to optimize the business while pivoting to a new relationship that will better enable us to serve our customers. As a result of the sale and in accordance with ASC 360-10, we recognized a loss on the sale of a business of $2,214, which included the impact of a currency translation adjustment of $828. This loss was recognized within restructuring and other charges/(income) on the condensed consolidated statements of operations and comprehensive income. The reported loss on sale of stock is not deductible for tax. Prior to the disposal, the South Africa Business's results were reported within the "Europe, Middle East and Africa" segment. Restructuring and other charges/(income) by reportable segment were as follows: Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Nine Months Ended December 31, 2021 Nine Months Ended December 31, 2020 United States and Latin America $ — $ 959 $ (46) $ 3,373 Canada — 573 (186) 2,702 Europe, Middle East and Africa — 2,251 (182) 2,607 Asia-Pacific — — — 10 $ — $ 3,783 $ (414) $ 8,692 Restructuring activity related to severance activity described above recorded in "Accrued liabilities" on the condensed consolidated balance sheets is summarized as follows for the nine months ended December 31, 2021 and December 31, 2020: Nine Months Ended Nine Months Ended December 31, 2020 Beginning balance $ 657 $ — Costs/(income) (103) 5,858 Less cash payments (452) (4,153) Ending balance $ 102 $ 1,705 |
Net Income_(Loss) per Common Sh
Net Income/(Loss) per Common Share | 9 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income/(Loss) per Common Share | Net Income/(Loss) per Common Share Basic net income/(loss) per common share is computed by dividing net income/(loss) by the weighted average number of common shares outstanding during each period. Diluted net income/(loss) per common share is computed by dividing net income/(loss) 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 assume that the associated performance targets will be met at the target level of performance for purposes of calculating diluted net income/(loss) per common share until such time that it is probable that the performance target will not be met. The reconciliations of the denominators used to calculate basic and diluted net income/(loss) per common share for the three and nine months ended December 31, 2021 and 2020, respectively, are as follows: Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Nine Months Ended December 31, 2021 Nine Months Ended December 31, 2020 Basic net income/(loss) per common share Net income/(loss) $ 11,270 $ 6,175 $ 11,407 $ 1,928 Weighted-average common shares outstanding 33,340,000 33,180,562 33,292,614 33,110,877 Basic net income/(loss) per common share $ 0.34 $ 0.19 $ 0.34 $ 0.06 Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Nine Months Ended December 31, 2021 Nine Months Ended December 31, 2020 Diluted net income/(loss) per common share Net income/(loss) $ 11,270 $ 6,175 $ 11,407 $ 1,928 Weighted-average common shares outstanding 33,340,000 33,180,562 33,292,614 33,110,877 Common share equivalents: Stock options 271 2,733 1,660 21,155 Restricted and performance stock units 317,833 236,278 187,690 102,325 Weighted average shares outstanding – dilutive (1) 33,658,104 33,419,573 33,481,964 33,234,357 Diluted net income/(loss) per common share $ 0.33 $ 0.18 $ 0.34 $ 0.06 |
Inventories
Inventories | 9 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: December 31, 2021 March 31, 2021 Raw materials $ 41,227 $ 33,485 Work in process 4,394 4,071 Finished goods 25,990 28,008 71,611 65,564 Valuation reserves (1,977) (1,774) Inventories, net $ 69,634 $ 63,790 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The carrying amount of goodwill by operating segment as of December 31, 2021 is as follows: United States and Latin America Canada Europe, Middle East and Africa Asia-Pacific Total Balance as of March 31, 2021 $ 62,725 $ 121,550 $ 20,139 $ 8,624 $ 213,038 Foreign currency translation impact — (988) (661) — (1,649) Balance as of December 31, 2021 $ 62,725 $ 120,562 $ 19,478 $ 8,624 $ 211,389 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. If required, 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, which is based on market multiples of guideline public companies. The most significant inputs in the Company's quantitative 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. In the fourth quarter of fiscal 2021, we identified the prolonged economic effects of the COVID-19 pandemic to be an indicator of potential asset impairments in our reporting units. We performed our annual goodwill, intangible and tangible impairment assessments including our indefinite life trademarks. We analyzed our reporting units utilizing 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 impairment test for indefinite life trademarks utilized a relief from royalty analysis based on the cash flow streams attributable to the Thermon trademark. Based on the goodwill impairment assessment, the estimated fair value of our reporting units exceeded the carrying value. As such, there was no impairment of goodwill, intangible or tangible assets or our indefinite life trademarks as of the respective reporting periods. The most significant inputs in the Company's impairment test are the projected financial information, the weighted average cost of capital and market multiples for similar transactions. If overall economic conditions, our key end markets, or factors specific to the Company deteriorate significantly, it could negatively impact the Company's future impairment tests. We will continue to monitor our reporting units' goodwill and asset valuations and test for potential impairments. No triggering events were identified during the three month period ended December 31, 2021 which would indicate that the fair value of any of our reporting units was less than its carrying amount. Our total intangible assets consisted of the following: Gross Carrying Amount at December 31, 2021 Accumulated Amortization Net Carrying Amount at December 31, 2021 Gross Carrying Amount at March 31, 2021 Accumulated Amortization Net Carrying Amount at March 31, 2021 Products $ 65,712 $ (27,380) $ 38,332 $ 66,250 $ (22,635) $ 43,615 Trademarks 45,195 (1,460) 43,735 45,581 (1,289) 44,292 Developed technology 9,940 (5,806) 4,134 10,028 (5,486) 4,542 Customer relationships 113,049 (103,305) 9,744 113,789 (102,911) 10,878 Certifications 453 — 453 457 — 457 Total $ 234,349 $ (137,951) $ 96,398 $ 236,105 $ (132,321) $ 103,784 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued current liabilities consisted of the following: December 31, 2021 March 31, 2021 Accrued employee compensation and related expenses $ 13,001 $ 11,765 Accrued interest 133 648 Customer prepayments 643 283 Warranty reserves 532 250 Professional fees 2,390 2,361 Sales taxes payable 2,224 2,404 Other (1) 3,808 6,177 Total accrued current liabilities $ 22,731 $ 23,888 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term DebtLong-term debt consisted of the following: December 31, 2021 March 31, 2021 Variable Rate Term Loan B due October 2024 net of deferred debt issuance costs and debt discounts of $2,983 as of March 31, 2021 $ — $ 145,517 Variable Rate Term Loan A due September 2026 net of deferred debt issuance costs of $684 as of December 31, 2021 132,096 — Less current portion (7,004) (2,500) Total long-term debt $ 125,092 $ 143,017 Senior Secured Credit Facilities On September 29, 2021, Thermon Group Holdings, Inc., as a credit party and a guarantor, Thermon Holding Corp. (“THC” or the “U.S. Borrower”) and Thermon Canada Inc. (the “Canadian Borrower” and together with THC, the “Borrowers”), as borrowers, entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with several banks and other financial institutions or entities from time to time (the “Lenders”) and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Agent”), which was further amended on November 19, 2021. The Credit Agreement is an amendment and restatement of that certain Credit Agreement dated October 30, 2017 by and among Borrowers, the lenders party thereto and JPMorgan Chase Bank, N.A. as administrative agent (the “Prior Credit Agreement”), and provides for the following credit facilities described below (collectively, the “Facilities”). • Revolving Credit Facility: A USD $100,000 five • U.S. Term Loan Facility: A USD $80,000 five • Canadian Term Loan Facility: A CAD $76,182 five Proceeds of the Facilities were used at closing to repay and refinance the Borrowers’ existing indebtedness under the Prior Credit Agreement and pay all interest, fees and expenses related thereto, and thereafter are expected to be used for working capital and general corporate purposes. The Credit Agreement allows for incremental term loans and incremental revolving commitments in an amount not to exceed USD $100,000. Maturity and Repayment Each of the Facilities terminates on September 29, 2026. Commencing January 1, 2022, each of the Term Loans will amortize as set forth in the table below, with payments on the first day of each January, April, July and October, with the balance of each Term Loan Facility due at maturity. Installment Dates Original Principal Amount January 1, 2022 through October 1, 2022 1.25 % January 1, 2023 through October 1, 2024 1.88 % January 1, 2025 through July 1, 2026 2.50 % Guarantees The U.S. Term Loan and the obligations of the U.S. Borrower under the Revolving Credit Facility are guaranteed by the Company and all of the U.S. Borrower’s current and future wholly owned domestic material subsidiaries (the “U.S. Subsidiary Guarantors”), subject to certain exceptions. The Canadian Term Loan is guaranteed by the Company, the U.S. Borrower, the U.S. Subsidiary Guarantors and each of the wholly owned Canadian material subsidiaries of the Canadian Borrower, subject to certain exceptions. Security The U.S. Term Loan and the obligations of the U.S. Borrower under the Revolving Credit Facility are secured by a first lien on all of the assets of the Company, the U.S. Borrower and the U.S. Subsidiary Guarantors, including 100% of the capital stock of the U.S. Subsidiary Guarantors and 65% of the capital stock of the first tier material foreign subsidiaries of the Company, the U.S. Borrower and the U.S. Subsidiary Guarantors, subject to certain exceptions. The Canadian Term Loan is secured by a first lien on all of the assets of the Company, the U.S. Borrower, the U.S. Subsidiary Guarantors, the Canadian Borrower and the material Canadian subsidiaries of the Canadian Borrower, including 100% of the capital stock of the Canadian Borrower’s material Canadian subsidiaries. Interest Rates and Fees The U.S. Borrower will have the option to pay interest on the U.S. Term Loan and borrowings under the Revolving Credit Facility at a base rate, plus an applicable margin, or at a rate based on LIBOR plus an applicable margin. The Canadian Borrower will have the option to pay interest on the Canadian Term Loan at a prime rate, plus an applicable margin, or at a rate based on the Canadian Dollar Offered Rate, or "CDOR," plus an applicable margin. Under the applicable Facilities, the margin for base rate loans and Canadian prime rate loans is 62.5 basis points and the applicable margin for LIBOR loans and CDOR loans is 162.5 basis points; provided that, following the completion of one full fiscal quarter after the closing date, the applicable margins will be determined based on a leverage-based performance grid. In addition to paying interest on outstanding principal under the Revolving Credit Facility, the U.S. Borrower is required to pay a commitment fee in respect of unutilized revolving commitments of 0.25% per annum, provided that, following the completion of one full fiscal quarter after the closing date, the commitment fee will be determined based on a leverage-based performance grid. Voluntary Prepayment The Borrowers will be able to voluntarily prepay the principal of the loans outstanding under each of the Facilities without penalty or premium (subject to breakage fees) at any time in whole or in part. Mandatory Prepayment Each Borrower is required to repay its respective Term Loan with certain asset sale and insurance proceeds and certain debt proceeds. Debt Issuance Costs We incurred fees to third parties in connection with our entry into the Credit Agreement described above. The debt issuance costs of $1,248 were capitalized and will be amortized over the life of the Credit Agreement. Additionally, we recognized a loss on debt extinguishment of $2,569, which was recorded to Other income/(expense) on our condensed consolidated statements of operations and comprehensive income. Financial Covenants In connection with the Credit Agreement, the Company is required, on a consolidated basis, to maintain certain financial covenant ratios. On the last day of any period of four fiscal quarters ending during a period set forth below, the Company must maintain a consolidated leverage ratio that does not exceed the ratios for such period set forth below (each of which ratios may be increased by 0.50:1.00 for each of the four fiscal quarters following certain acquisitions at the election of the U.S. Borrower): Fiscal Quarter Ending Consolidated Leverage Ratio September 30, 2021 through September 30, 2022 3.75:1.00 December 31, 2022 and each fiscal quarter thereafter 3.50:1.00 In addition, on the last day of any period of four fiscal quarters ending on or after September 30, 2021, the Company must maintain a consolidated fixed charge coverage ratio of not less than 1.25:1.00. As of December 31, 2021, we were in compliance with all financial covenants of the Credit Agreement and there is no material uncertainty about our ongoing ability to comply with our covenants. Other Covenants The Credit Agreement contains restrictive covenants (in each case, subject to certain exclusions) that limit, among other things, the ability of the Company and its subsidiaries (including the Borrowers) to: • incur additional indebtedness; • grant liens; • make fundamental changes; • sell assets; • make restricted payments; • enter into sales and leasebacks; • make investments; • prepay certain indebtedness; • enter into transactions with affiliates; and • enter into restrictive agreements. The covenants are subject to various baskets and materiality thresholds, with certain of the baskets to the restrictions on the repayment of subordinated or unsecured indebtedness, restricted payments and investments being available only when the Company’s pro forma leverage ratios are less than a certain level. The Credit Agreement contains certain customary representations and warranties, affirmative covenants and events of default, including, among other things, payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy, certain events under ERISA, judgment defaults, actual or asserted failure of any guaranty or security documents to be in full force and effect and change of control. If such an event of default occurs, the Agent will be entitled to take various actions, including the termination of the commitment for the Revolving Credit Facility, the acceleration of amounts due under the Credit Agreement and certain other actions that a secured creditor is customarily permitted to take following a default. At December 31, 2021, we had no outstanding borrowings under the Revolving Credit Facility. We drew down on the Revolving Credit Facility in the ordinary course of business in the amount of $8,000 and paid that amount back in full during the three months ended December 31, 2021. We had $96,978 of available borrowing capacity thereunder after taking into account the borrowing base and $3,022 o f outstanding letters of credit. The Term Loans bear interest at the LIBOR rate or CDOR rate, as applicable, in each case plus an applicable margin dictated by our leverage ratio (as described above). The interest rates on the Term Loan Facilities on December 31, 2021 were 2.16% for the Canadian Term Loan Facility, and 1.73% for the U.S. Term Loan Facility. Interest expense has been presented net of interest income on our condensed consolidated statements of operations and comprehensive income. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings and Other Contingencies 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. Expenses related to litigation and other such proceedings or disputes reduce operating income as period expenses when incurred. As of December 31, 2021, management believes that adequate reserves have been established for any probable and reasonably estimable losses. Specifically, we have accrued $691 to "Accrued Liabilities" in the condensed consolidated balance sheets related to various claims. Also, because we have insurance policies in place for certain covered instances, we have recorded a corresponding receivable to "Prepaid expenses and other current assets" on the condensed consolidated balance sheets in the amount of $412. We expect that the contingency related to these amounts will be resolved in the next twelve months. 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. In addition to the legal proceedings described above, in January 2020, the Company received service of process in a class action application in the Superior Court of Quebec, Montreal, Canada related to certain heating elements previously manufactured by THS and incorporated into certain portable construction heaters sold by certain manufacturers. The Company believes this claim is without merit and intends to vigorously defend itself against the claim. While the Company continues to dispute the allegations, in March 2021, it reached an agreement in principle with the plaintiff and other defendants to resolve this matter without admitting to any liability; such agreement remains subject to the agreement of the parties on the terms of a definitive settlement agreement. Settlement of this matter on the agreed terms will require the Company to contribute an amount that would not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. The settlement is subject to, among other things, approval by the Superior Court. As of December 31, 2021, the Company has accrued $2,677 as estimated additional cost related to the operational execution of a project in our US-LAM segment that was completed in a prior year. Refer to Note 7, "Accrued Liabilities" in the notes herein for more information. Letters of Credit and Bank Guarantees |
Revenue
Revenue | 9 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue We disaggregate our revenue from contracts with customers by geographic location, revenues recognized at point in time and revenues recognized over time, as we believe these best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Revenue recognized at a point-in-time based on when control goes over to the customer is generally related to our product sales. Point-in-time revenue does not typically require engineering or installation services. Revenue recognized over time occurs on our projects where engineering or installation services, or a combination of the two, are required. We recognize revenue related to such projects in a systematic way that reflects the transfer of service to the customer. Disaggregation of revenues from contracts with customers for the three and nine months ended December 31, 2021 and 2020 is as follows: Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Revenues recognized at point in time Revenues recognized over time Total Revenues recognized at point in time Revenues recognized over time Total United States and Latin America $ 19,695 $ 30,132 $ 49,827 $ 14,743 $ 14,971 $ 29,714 Canada 25,358 5,696 31,054 18,509 6,483 24,992 Europe, Middle East and Africa 7,896 5,041 12,937 7,932 9,212 17,144 Asia-Pacific 4,654 2,141 6,795 4,933 2,821 7,754 Total revenues $ 57,603 $ 43,010 $ 100,613 $ 46,117 $ 33,487 $ 79,604 Nine Months Ended December 31, 2021 Nine Months Ended December 31, 2020 Revenues recognized at point in time Revenues recognized over time Total Revenues recognized at point in time Revenues recognized over time Total United States and Latin America $ 50,565 $ 52,360 $ 102,925 $ 34,728 $ 37,505 $ 72,233 Canada 64,490 16,938 81,428 45,932 17,589 63,521 Europe, Middle East and Africa 21,218 23,148 44,366 21,449 17,492 38,941 Asia-Pacific 15,810 8,561 24,371 12,838 15,325 28,163 Total revenues $ 152,083 $ 101,007 $ 253,090 $ 114,947 $ 87,911 $ 202,858 Performance Obligations At December 31, 2021, revenues associated with our open performance obligations totaled $145,715, representing our backlog. Within this amount, approximately $46,313 will be earned as revenue in excess of one year. We expect to recognize the remaining revenues associated with unsatisfied or partially satisfied performance obligations within 12 months. Contract Assets and Liabilities |
Income Taxes
Income Taxes | 9 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective income tax rate, after discrete tax events, was a 32.2% provision against income before taxes for the nine months ended December 31, 2021 and a benefit of 56.1% against income before taxes for the nine months ended December 31, 2020. During the nine months ended December 31, 2021, the Company recorded a discrete tax expense of $301 related to withholding taxes on an intercompany dividend from Canada to the United States in relation to the Amended and Restated Debt Agreement. Refer to Note 8, "Long-Term Debt." Also, during the nine months ended December 31, 2021, the Company recorded a discrete tax expense of $430 related to a change in withholding tax rates in its Russian subsidiary. Excluding the impact of withholding taxes in Canada and Russia and other discrete items, the Company estimates that the effective tax rate will be 26.1% for fiscal year 2022. The estimated effective income tax rate represents the weighted average of the estimated tax expense over our global income before tax. During the nine months ended December 31, 2020, we had a discrete tax benefit totaling $1,854 million related to updated Internal Revenue Service rules regarding the United States Global Intangible low-taxed income or ("GILTI tax") and related tax planning elections. As of December 31, 2021, we have established a long-term liability for uncertain tax positions in the amount of $865. As of December 31, 2021, the tax years for the fiscal years ended March 31, 2016 through March 31, 2021 remain open to examination by the major taxing jurisdictions to which we are subject. |
Segment Information
Segment Information | 9 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We maintain four reportable segments based on four geographic countries or regions in which we operate: (i) United States and Latin America ("US-LAM"), (ii) Canada, (iii) Europe, Middle East and Africa ("EMEA") and (iv) Asia-Pacific ("APAC"). Within our four reportable segments, our core products and services are focused on the following markets: chemical and petrochemical, oil, gas, power generation, commercial, rail and transit, and other, which we refer to as our "key end markets." We offer a full suite of products (heating units, heating cables, temporary power solutions and tubing bundles), services (engineering, installation and maintenance services) and software (design optimization and wireless and network control systems) required to deliver comprehensive solutions to some of the world's largest and most complex projects. We report the results of our THS product line in all four reportable segments, and the results of our TPS product line in the US-LAM and Canada reportable segments. Each of our reportable segments serves a similar class of customers, including engineering, procurement and construction 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. 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, property, plant and equipment, net and total assets for each of our four reportable segments are as follows: Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Nine Months Ended December 31, 2021 Nine Months Ended December 31, 2020 Sales to External Customers: United States and Latin America $ 49,827 $ 29,714 $ 102,925 $ 72,233 Canada 31,054 24,992 81,428 63,521 Europe, Middle East and Africa 12,937 17,144 44,366 38,941 Asia-Pacific 6,795 7,754 24,371 28,163 $ 100,613 $ 79,604 $ 253,090 $ 202,858 Inter-Segment Sales: United States and Latin America $ 8,588 $ 10,751 $ 29,424 $ 31,849 Canada 2,616 2,523 7,555 5,378 Europe, Middle East and Africa 295 542 1,137 1,615 Asia-Pacific 313 343 930 861 $ 11,812 $ 14,159 $ 39,046 $ 39,703 Depreciation Expense: United States and Latin America $ 1,396 $ 1,647 $ 4,331 $ 4,727 Canada 1,245 1,144 3,967 3,255 Europe, Middle East and Africa 101 8 305 235 Asia-Pacific 43 40 133 135 $ 2,785 $ 2,839 $ 8,736 $ 8,352 Amortization Expense: United States and Latin America $ 295 $ 295 $ 885 $ 1,169 Canada 1,858 1,797 5,624 5,452 Europe, Middle East and Africa 23 32 71 429 Asia-Pacific 11 11 33 215 $ 2,187 $ 2,135 $ 6,613 $ 7,265 Income/(Loss) from Operations: United States and Latin America $ 6,728 $ 3,647 $ 4,832 $ (4,185) Canada 7,312 4,993 15,136 9,171 Europe, Middle East and Africa 2,026 802 6,464 2,278 Asia-Pacific 683 1,425 3,107 3,259 Unallocated: Stock compensation (275) (430) (2,698) (2,921) Public company costs (305) (277) (1,464) (1,151) $ 16,169 $ 10,160 $ 25,377 $ 6,451 December 31, 2021 March 31, 2021 Property, Plant and Equipment, Net: United States and Latin America $ 32,600 $ 36,155 Canada 30,074 32,583 Europe, Middle East and Africa 2,969 3,141 Asia-Pacific 656 751 $ 66,299 $ 72,630 Total Assets: United States and Latin America $ 228,932 $ 218,699 Canada 293,209 287,907 Europe, Middle East and Africa 71,085 77,798 Asia-Pacific 33,244 33,474 $ 626,470 $ 617,878 Capital expenditures for our reportable segments were as follows: Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Nine Months Ended Nine Months Ended Capital Expenditures: United States and Latin America $ 171 $ 89 $ 811 $ 3,245 Canada 566 473 1,833 1,340 Europe, Middle East and Africa 92 10 223 59 Asia-Pacific 36 4 53 64 $ 865 $ 576 $ 2,920 $ 4,708 |
Basis of Presentation and Acc_2
Basis of Presentation and Accounting Policy Information (Policies) | 9 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates Generally accepted accounting principles 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 management has based their assumptions and estimates on the facts and circumstances existing at December 31, 2021, 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 and nine months ended December 31, 2021 are not necessarily indicative of the results that may be achieved for the fiscal year ending March 31, 2022 ("fiscal 2022"). We increased our allowance for doubtful accounts at December 31, 2021 to $2,689 from $2,074 at March 31, 2021. The increase in the period is primarily attributable to an accrual for bad debts related to potentially uncollectible receivables, mainly in our EMEA reportable segment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Business Combinations - In October 2021, the FASB issued Accounting Standards Update, ("ASU") 2021-08 - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASC 805). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. Under this "Topic 606 approach," the acquirer applies the revenue model as if it had originated the contracts. This is a departure from the current requirement to measure contract assets and contract liabilities at fair value. The ASU is effective for all public business entities in annual and interim periods starting after December 15, 2022 and early adoption is permitted. We intend to evaluate the option to early adopt should we execute a business combination before mandatory adoption. Adopting this standard could have a material impact on revenue associated with an acquired business. Government Assistance - In November 2021, the FASB issued Accounting Standards Update 2021-10 - Government Assistance , which creates new Codification Topic 832 (government assistance). This new topic addresses the requirement for disclosures when an entity receives government assistance. The requirements state the entity should disclose the nature of the transactions and the related accounting policies used, the line items on the balance sheet and income statement that are affected and the amounts applicable to each financial statement line item, and significant terms and conditions of the transactions. Topic 832 is effective for all public business entities in annual periods in fiscal years beginning after December 15, 2021. Early application is permitted. We have early adopted this standard effective October 1, 2021, and it did not have a material impact on our financial statements. Reference Rate Reform - In March 2020, the FASB issued Accounting Standards Update 2020-04 - Reference Rate Reform (ASC 848). The update is intended to provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This ASU became effective in March of 2020. As of December 31, 2021, we have not yet elected any optional expedients provided in the standard. We will apply the accounting relief, if necessary, as relevant contract and hedge accounting relationship modifications are made during the reference rate reform transition period. Income Taxes - In December 2019, the FASB issued Accounting Standards Update 2019-12 - Income Taxes (ASC 740) : Simplifying the Accounting for Income Taxes. This ASU amends ASC 740 to simplify certain requirements related to income taxes, specifically as it relates to interim period accounting for changes in tax law and year-to-date loss limitation in interim period accounting. The new standard is effective for fiscal years beginning after December 15, 2020. We adopted this standard effective April 1, 2021, and such adoption did not have a material impact on our consolidated financial statements. |
Basis of Presentation and Acc_3
Basis of Presentation and Accounting Policy Information Table (Tables) | 9 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash included in prepaid expenses and other current assets and restricted cash included in other long-term assets reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statements of cash flows. December 31, 2021 2020 Cash and cash equivalents $ 32,566 $ 49,617 Restricted cash included in prepaid expenses and other current assets 2,496 2,314 Restricted cash included in other long-term assets 341 380 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 35,403 $ 52,311 | |
Schedule of Error Corrections and Prior Period Adjustments | During the second quarter of fiscal 2022, we identified an error in our previously issued unaudited condensed consolidated financial statements as of and for the three months ended June 30, 2021, as well as our consolidated financial statements as of and for the three months ended March 31, 2021. The error was due to underreported warranty costs associated with the operational execution of a large project in our US-LAM segment that completed in a prior year for which we are supplying engineering services, installation services, and equipment. Management evaluated the materiality of the error from a qualitative and quantitative perspective and concluded that the error was not material to any one quarterly period. Accordingly, we corrected the error in the consolidated balance sheets at March 31, 2021 and consolidated statements of operations and comprehensive income for the three and twelve months ended March 31, 2021. We also corrected the error in the unaudited condensed consolidated balance sheets at June 30, 2021, and unaudited condensed consolidated statements of operations and comprehensive income for the three months ended June 30, 2021 is as follows: Consolidated Balance Sheets March 31, 2021 March 31, 2021 as reported Adjustments as corrected Accrued liabilities $ 23,517 $ 371 $ 23,888 Deferred income taxes 21,088 (82) 21,006 Retained earnings $ 183,725 (289) 183,436 Consolidated Statement of Operations and Comprehensive Income Three Months Ended March 31, 2021 Three Months Ended March 31, 2021 as reported Adjustments as corrected Sales $ 73,323 $ — $ 73,323 Cost of sales 46,090 371 46,461 Gross profit 27,233 (371) 26,862 Net income/(loss) $ (763) $ (288) $ (1,051) Net income/(loss) per common share: Basic $ (0.02) $ (0.01) $ (0.03) Diluted $ (0.02) $ (0.01) $ (0.03) Consolidated Statement of Operations and Comprehensive Income Twelve Months Ended March 31, 2021 Twelve Months Ended March 31, 2021 as reported Adjustments as corrected Sales $ 276,181 $ — $ 276,181 Cost of sales 158,938 371 159,309 Gross profit 117,243 (371) 116,872 Net income/(loss) $ 1,165 $ (288) $ 877 Net income/(loss) per common share: Basic $ 0.04 $ (0.01) $ 0.03 Diluted $ 0.03 $ 0.00 $ 0.03 Consolidated Balance Sheets June 30, 2021 June 30, 2021 as reported Adjustments as corrected Accrued liabilities $ 20,046 $ 2,002 $ 22,048 Income taxes payable 678 (424) 254 Deferred income taxes 21,880 (82) 21,798 Retained earnings $ 184,591 (1,496) 183,095 Three Months Ended June 30, 2021 Three Months Ended June 30, 2021 as reported Adjustments as corrected Sales $ 71,155 $ — $ 71,155 Cost of sales 42,986 1,631 44,617 Gross profit 28,169 (1,631) 26,538 Net income/(loss) $ 867 $ (1,207) $ (340) Net income/(loss) per common share: Basic $ 0.03 $ (0.04) $ (0.01) Diluted $ 0.03 $ (0.04) $ (0.01) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
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: December 31, 2021 March 31, 2021 Carrying Fair Value Carrying Fair Value Valuation Technique Financial Liabilities Outstanding principal amount of senior secured credit facility $ 132,780 $ 132,116 $ 148,500 $ 148,871 Level 2 - Market Approach |
Schedule of notional amounts of forward contracts held in foreign currencies | As of December 31, 2021 and March 31, 2021, the notional amounts of forward contracts were as follows: Notional amount of foreign currency forward contracts by currency December 31, 2021 March 31, 2021 Russian Ruble $ 1,701 $ 3,000 Canadian Dollar 3,500 5,500 South Korean Won 1,850 5,000 Mexican Peso 1,850 1,500 Australian Dollar 1,300 900 Great Britain Pound — 500 Total notional amounts $ 10,201 $ 16,400 |
Schedule of fair value of foreign currency forward contracts | The following table represents the fair value of our foreign currency forward contracts: December 31, 2021 March 31, 2021 Fair Value Fair Value Assets Liabilities Assets Liabilities Foreign currency forward contracts $ 63 $ 64 $ 61 $ 32 |
Restructuring and other charg_2
Restructuring and other charges (income) (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Restructuring and other charges/(income) by reportable segment were as follows: Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Nine Months Ended December 31, 2021 Nine Months Ended December 31, 2020 United States and Latin America $ — $ 959 $ (46) $ 3,373 Canada — 573 (186) 2,702 Europe, Middle East and Africa — 2,251 (182) 2,607 Asia-Pacific — — — 10 $ — $ 3,783 $ (414) $ 8,692 Restructuring activity related to severance activity described above recorded in "Accrued liabilities" on the condensed consolidated balance sheets is summarized as follows for the nine months ended December 31, 2021 and December 31, 2020: Nine Months Ended Nine Months Ended December 31, 2020 Beginning balance $ 657 $ — Costs/(income) (103) 5,858 Less cash payments (452) (4,153) Ending balance $ 102 $ 1,705 |
Net Income_(Loss) per Common _2
Net Income/(Loss) per Common Share (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
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/(loss) per common share for the three and nine months ended December 31, 2021 and 2020, respectively, are as follows: Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Nine Months Ended December 31, 2021 Nine Months Ended December 31, 2020 Basic net income/(loss) per common share Net income/(loss) $ 11,270 $ 6,175 $ 11,407 $ 1,928 Weighted-average common shares outstanding 33,340,000 33,180,562 33,292,614 33,110,877 Basic net income/(loss) per common share $ 0.34 $ 0.19 $ 0.34 $ 0.06 Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Nine Months Ended December 31, 2021 Nine Months Ended December 31, 2020 Diluted net income/(loss) per common share Net income/(loss) $ 11,270 $ 6,175 $ 11,407 $ 1,928 Weighted-average common shares outstanding 33,340,000 33,180,562 33,292,614 33,110,877 Common share equivalents: Stock options 271 2,733 1,660 21,155 Restricted and performance stock units 317,833 236,278 187,690 102,325 Weighted average shares outstanding – dilutive (1) 33,658,104 33,419,573 33,481,964 33,234,357 Diluted net income/(loss) per common share $ 0.33 $ 0.18 $ 0.34 $ 0.06 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consisted of the following: December 31, 2021 March 31, 2021 Raw materials $ 41,227 $ 33,485 Work in process 4,394 4,071 Finished goods 25,990 28,008 71,611 65,564 Valuation reserves (1,977) (1,774) Inventories, net $ 69,634 $ 63,790 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill | The carrying amount of goodwill by operating segment as of December 31, 2021 is as follows: United States and Latin America Canada Europe, Middle East and Africa Asia-Pacific Total Balance as of March 31, 2021 $ 62,725 $ 121,550 $ 20,139 $ 8,624 $ 213,038 Foreign currency translation impact — (988) (661) — (1,649) Balance as of December 31, 2021 $ 62,725 $ 120,562 $ 19,478 $ 8,624 $ 211,389 |
Schedule of intangible assets | Our total intangible assets consisted of the following: Gross Carrying Amount at December 31, 2021 Accumulated Amortization Net Carrying Amount at December 31, 2021 Gross Carrying Amount at March 31, 2021 Accumulated Amortization Net Carrying Amount at March 31, 2021 Products $ 65,712 $ (27,380) $ 38,332 $ 66,250 $ (22,635) $ 43,615 Trademarks 45,195 (1,460) 43,735 45,581 (1,289) 44,292 Developed technology 9,940 (5,806) 4,134 10,028 (5,486) 4,542 Customer relationships 113,049 (103,305) 9,744 113,789 (102,911) 10,878 Certifications 453 — 453 457 — 457 Total $ 234,349 $ (137,951) $ 96,398 $ 236,105 $ (132,321) $ 103,784 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accrued current liabilities | Accrued current liabilities consisted of the following: December 31, 2021 March 31, 2021 Accrued employee compensation and related expenses $ 13,001 $ 11,765 Accrued interest 133 648 Customer prepayments 643 283 Warranty reserves 532 250 Professional fees 2,390 2,361 Sales taxes payable 2,224 2,404 Other (1) 3,808 6,177 Total accrued current liabilities $ 22,731 $ 23,888 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following: December 31, 2021 March 31, 2021 Variable Rate Term Loan B due October 2024 net of deferred debt issuance costs and debt discounts of $2,983 as of March 31, 2021 $ — $ 145,517 Variable Rate Term Loan A due September 2026 net of deferred debt issuance costs of $684 as of December 31, 2021 132,096 — Less current portion (7,004) (2,500) Total long-term debt $ 125,092 $ 143,017 |
Long-term debt, stated percentage of facilities | Each of the Facilities terminates on September 29, 2026. Commencing January 1, 2022, each of the Term Loans will amortize as set forth in the table below, with payments on the first day of each January, April, July and October, with the balance of each Term Loan Facility due at maturity. Installment Dates Original Principal Amount January 1, 2022 through October 1, 2022 1.25 % January 1, 2023 through October 1, 2024 1.88 % January 1, 2025 through July 1, 2026 2.50 % |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenues | Disaggregation of revenues from contracts with customers for the three and nine months ended December 31, 2021 and 2020 is as follows: Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Revenues recognized at point in time Revenues recognized over time Total Revenues recognized at point in time Revenues recognized over time Total United States and Latin America $ 19,695 $ 30,132 $ 49,827 $ 14,743 $ 14,971 $ 29,714 Canada 25,358 5,696 31,054 18,509 6,483 24,992 Europe, Middle East and Africa 7,896 5,041 12,937 7,932 9,212 17,144 Asia-Pacific 4,654 2,141 6,795 4,933 2,821 7,754 Total revenues $ 57,603 $ 43,010 $ 100,613 $ 46,117 $ 33,487 $ 79,604 Nine Months Ended December 31, 2021 Nine Months Ended December 31, 2020 Revenues recognized at point in time Revenues recognized over time Total Revenues recognized at point in time Revenues recognized over time Total United States and Latin America $ 50,565 $ 52,360 $ 102,925 $ 34,728 $ 37,505 $ 72,233 Canada 64,490 16,938 81,428 45,932 17,589 63,521 Europe, Middle East and Africa 21,218 23,148 44,366 21,449 17,492 38,941 Asia-Pacific 15,810 8,561 24,371 12,838 15,325 28,163 Total revenues $ 152,083 $ 101,007 $ 253,090 $ 114,947 $ 87,911 $ 202,858 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Total sales and operating income classified by major geographic area in which the company operates | Total sales to external customers, inter-segment sales, depreciation expense, amortization expense, income from operations, property, plant and equipment, net and total assets for each of our four reportable segments are as follows: Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Nine Months Ended December 31, 2021 Nine Months Ended December 31, 2020 Sales to External Customers: United States and Latin America $ 49,827 $ 29,714 $ 102,925 $ 72,233 Canada 31,054 24,992 81,428 63,521 Europe, Middle East and Africa 12,937 17,144 44,366 38,941 Asia-Pacific 6,795 7,754 24,371 28,163 $ 100,613 $ 79,604 $ 253,090 $ 202,858 Inter-Segment Sales: United States and Latin America $ 8,588 $ 10,751 $ 29,424 $ 31,849 Canada 2,616 2,523 7,555 5,378 Europe, Middle East and Africa 295 542 1,137 1,615 Asia-Pacific 313 343 930 861 $ 11,812 $ 14,159 $ 39,046 $ 39,703 Depreciation Expense: United States and Latin America $ 1,396 $ 1,647 $ 4,331 $ 4,727 Canada 1,245 1,144 3,967 3,255 Europe, Middle East and Africa 101 8 305 235 Asia-Pacific 43 40 133 135 $ 2,785 $ 2,839 $ 8,736 $ 8,352 Amortization Expense: United States and Latin America $ 295 $ 295 $ 885 $ 1,169 Canada 1,858 1,797 5,624 5,452 Europe, Middle East and Africa 23 32 71 429 Asia-Pacific 11 11 33 215 $ 2,187 $ 2,135 $ 6,613 $ 7,265 Income/(Loss) from Operations: United States and Latin America $ 6,728 $ 3,647 $ 4,832 $ (4,185) Canada 7,312 4,993 15,136 9,171 Europe, Middle East and Africa 2,026 802 6,464 2,278 Asia-Pacific 683 1,425 3,107 3,259 Unallocated: Stock compensation (275) (430) (2,698) (2,921) Public company costs (305) (277) (1,464) (1,151) $ 16,169 $ 10,160 $ 25,377 $ 6,451 December 31, 2021 March 31, 2021 Property, Plant and Equipment, Net: United States and Latin America $ 32,600 $ 36,155 Canada 30,074 32,583 Europe, Middle East and Africa 2,969 3,141 Asia-Pacific 656 751 $ 66,299 $ 72,630 Total Assets: United States and Latin America $ 228,932 $ 218,699 Canada 293,209 287,907 Europe, Middle East and Africa 71,085 77,798 Asia-Pacific 33,244 33,474 $ 626,470 $ 617,878 |
Capital expenditures by geographic area | Capital expenditures for our reportable segments were as follows: Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Nine Months Ended Nine Months Ended Capital Expenditures: United States and Latin America $ 171 $ 89 $ 811 $ 3,245 Canada 566 473 1,833 1,340 Europe, Middle East and Africa 92 10 223 59 Asia-Pacific 36 4 53 64 $ 865 $ 576 $ 2,920 $ 4,708 |
Basis of Presentation and Acc_4
Basis of Presentation and Accounting Policy Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Inventories, net | $ 69,634 | $ 69,634 | $ 63,790 | |||
Compensation cost | 1,073 | |||||
Increase in compensation cost | 107 | |||||
Cash and cash equivalents | 32,566 | $ 49,617 | 32,566 | $ 49,617 | 40,124 | |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | 35,403 | 52,311 | 35,403 | 52,311 | 42,450 | $ 46,006 |
Prepaid Expenses and Other Current Assets | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | 2,496 | 2,314 | 2,496 | 2,314 | ||
Other Assets | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | 341 | 380 | 341 | 380 | ||
Thermon Holding Corp. | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Accounts receivable, allowance for doubtful accounts (in dollars) | 2,689 | 2,689 | $ 2,074 | |||
COVID-19 | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Inventories, net | 2 | 430 | 2 | 430 | ||
COVID-19 | Marketing, general and administrative and engineering | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Adjustments to Income Statement | 4 | 301 | 504 | 1,953 | ||
COVID-19 | Cost of Sales | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Adjustments to Income Statement | $ 199 | $ 1,399 | $ 1,448 | $ 3,552 |
Basis of Presentation and Acc_5
Basis of Presentation and Accounting Policy Information - Correction of an Error (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Accrued liabilities | $ 22,731 | $ 22,048 | $ 23,888 | $ 22,731 | $ 23,888 | ||
Income taxes payable | 254 | ||||||
Deferred income taxes | 18,532 | 21,798 | 21,006 | 18,532 | 21,006 | ||
Retained earnings | 194,843 | 183,095 | 183,436 | 194,843 | 183,436 | ||
Sales | 71,155 | 73,323 | 276,181 | ||||
Cost of sales | 59,866 | 44,617 | 46,461 | $ 42,644 | 154,084 | $ 112,848 | 159,309 |
Gross profit | $ 40,747 | 26,538 | 26,862 | $ 36,960 | $ 99,006 | $ 90,010 | 116,872 |
Net income/(loss) | $ (340) | $ (1,051) | $ 877 | ||||
Basic (in dollars per share) | $ 0.34 | $ (10) | $ (30) | $ 0.19 | $ 0.34 | $ 0.06 | $ 30 |
Diluted (in dollars per share) | $ 0.33 | $ (10) | $ (30) | $ 0.18 | $ 0.34 | $ 0.06 | $ 30 |
as reported | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Accrued liabilities | $ 20,046 | $ 23,517 | $ 23,517 | ||||
Income taxes payable | 678 | ||||||
Deferred income taxes | 21,880 | 21,088 | 21,088 | ||||
Retained earnings | 184,591 | 183,725 | 183,725 | ||||
Sales | 71,155 | 73,323 | 276,181 | ||||
Cost of sales | 42,986 | 46,090 | 158,938 | ||||
Gross profit | 28,169 | 27,233 | 117,243 | ||||
Net income/(loss) | $ 867 | $ (763) | $ 1,165 | ||||
Basic (in dollars per share) | $ 30 | $ (20) | $ 40 | ||||
Diluted (in dollars per share) | $ 30 | $ (20) | $ 30 | ||||
Adjustments | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Accrued liabilities | $ 2,002 | $ 371 | $ 371 | ||||
Income taxes payable | (424) | ||||||
Deferred income taxes | (82) | (82) | (82) | ||||
Retained earnings | (1,496) | (289) | (289) | ||||
Sales | 0 | 0 | 0 | ||||
Cost of sales | 1,631 | 371 | 371 | ||||
Gross profit | (1,631) | (371) | (371) | ||||
Net income/(loss) | $ (1,207) | $ (288) | $ (288) | ||||
Basic (in dollars per share) | $ (40) | $ (10) | $ (10) | ||||
Diluted (in dollars per share) | $ (40) | $ (10) | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Loans Payable - Level 2 - Market Approach - USD ($) $ in Thousands | Dec. 31, 2021 | Mar. 31, 2021 |
Financial Liabilities, Long-term debt | ||
Long-term debt, Carrying Value | $ 132,780 | $ 148,500 |
Long-term debt, Fair Value | $ 132,116 | $ 148,871 |
Fair Value Measurements (Deferr
Fair Value Measurements (Deferred compensation plan) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |||||
Plan assets | $ 5,710 | $ 5,710 | $ 5,047 | ||
Deferred compensation liability | 5,258 | 5,258 | $ 4,608 | ||
Deferred compensation plan expense/(income) | 292 | $ 599 | 610 | $ 1,380 | |
Unrealized gain (loss) on investments | $ 314 | $ 651 | $ 620 | $ 1,419 |
Fair Value Measurements - Forei
Fair Value Measurements - Foreign Exchange Contracts by Currency (Details) - Foreign Exchange Forward Contracts - USD ($) $ in Thousands | Dec. 31, 2021 | Mar. 31, 2021 |
Derivative [Line Items] | ||
Notional amount | $ 10,201 | $ 16,400 |
Russian Ruble | ||
Derivative [Line Items] | ||
Notional amount | 1,701 | 3,000 |
Canadian Dollar | ||
Derivative [Line Items] | ||
Notional amount | 3,500 | 5,500 |
South Korean Won | ||
Derivative [Line Items] | ||
Notional amount | 1,850 | 5,000 |
Mexican Peso | ||
Derivative [Line Items] | ||
Notional amount | 1,850 | 1,500 |
Australian Dollar | ||
Derivative [Line Items] | ||
Notional amount | 1,300 | 900 |
Great Britain Pound | ||
Derivative [Line Items] | ||
Notional amount | $ 0 | $ 500 |
Fair Value Measurements - For_2
Fair Value Measurements - Foreign Exchange Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Maximum term of forward contracts | 30 days | ||||
Transaction gains (losses) denominated in foreign currencies | $ 949 | $ 109 | $ 1,634 | $ 85 | |
Foreign Exchange Forward Contracts | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Foreign exchange contract forwards, assets | 63 | 63 | $ 61 | ||
Foreign exchange contract forwards, liabilities | 64 | 64 | $ 32 | ||
Foreign currency gain (loss) | $ 637 | $ 388 | $ 861 | $ 437 |
Restructuring and other charg_3
Restructuring and other charges (income) - Narrative (Details) | Dec. 15, 2020USD ($) | Dec. 15, 2020ZAR (R) | Dec. 31, 2021USD ($)positions | Dec. 31, 2020USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2021USD ($)positions | Dec. 31, 2020USD ($) | Mar. 31, 2021USD ($) |
Restructuring Cost and Reserve [Line Items] | ||||||||
Number of positions eliminated | positions | 66 | 262 | ||||||
Severance costs | $ 997,000 | $ 5,858,000 | ||||||
Lease impairment costs | $ 429,000 | |||||||
Abandonment expense | $ 144,000 | $ 191,000 | ||||||
Sale of stock, consideration received on transaction | $ 167,000 | R 2,500 | ||||||
Loss on disposition of business | (310,000) | $ (2,045,000) | ||||||
Accumulated other comprehensive loss | $ (39,871,000) | $ (39,871,000) | $ (35,919,000) | |||||
Thermon South Africa Proprieary Limited | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Cash receipts | $ 311,000 | |||||||
Sale of stock, percentage of ownership before transaction | 100.00% | 100.00% | ||||||
Loss on disposition of business | $ 2,214,000 | |||||||
Accumulated other comprehensive loss | $ 828,000 |
Restructuring and other charg_4
Restructuring and other charges (income) - Restructuring Costs by Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 0 | $ 3,783 | $ (414) | $ 8,692 |
United States and Latin America | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | 959 | (46) | 3,373 |
Canada | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | 573 | (186) | 2,702 |
Europe, Middle East and Africa | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | 2,251 | (182) | 2,607 |
Asia-Pacific | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 0 | $ 0 | $ 0 | $ 10 |
Restructuring and other charg_5
Restructuring and other charges (income) - Restructuring Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||||
Costs/(income) | $ 0 | $ 3,783 | $ (414) | $ 8,692 |
Employee Severance | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 657 | 0 | ||
Costs/(income) | (103) | 5,858 | ||
Less cash payments | (452) | (4,153) | ||
Ending balance | $ 102 | $ 1,705 | $ 102 | $ 1,705 |
Net Income_(Loss) per Common _3
Net Income/(Loss) per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | |
Basic net income (loss) per common share | ||||||||||
Net income/(loss) | $ 11,270 | $ 477 | $ (340) | $ 6,175 | $ 1,838 | $ (6,085) | $ 11,407 | $ 1,928 | ||
Weighted-average common shares outstanding (in shares) | 33,340,000 | 33,180,562 | 33,292,614 | 33,110,877 | ||||||
Basic net income (loss) per common share (in dollars per share) | $ 0.34 | $ (10) | $ (30) | $ 0.19 | $ 0.34 | $ 0.06 | $ 30 | |||
Diluted net income (loss) per common share | ||||||||||
Net income/(loss) | $ 11,270 | $ 477 | $ (340) | $ 6,175 | $ 1,838 | $ (6,085) | $ 11,407 | $ 1,928 | ||
Weighted-average common shares outstanding (in shares) | 33,340,000 | 33,180,562 | 33,292,614 | 33,110,877 | ||||||
Diluted (in shares) | 33,658,104 | 33,419,573 | 33,481,964 | 33,234,357 | ||||||
Diluted net income (loss) per common share (in dollars per share) | $ 0.33 | $ (10) | $ (30) | $ 0.18 | $ 0.34 | $ 0.06 | $ 30 | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 45,099 | 250,668 | 139,843 | 246,005 | ||||||
Equity Option | ||||||||||
Diluted net income (loss) per common share | ||||||||||
Weighted average number of diluted shares outstanding adjustment (in shares) | 271 | 2,733 | 1,660 | 21,155 | ||||||
Restricted Stock Units | ||||||||||
Diluted net income (loss) per common share | ||||||||||
Weighted average number of diluted shares outstanding adjustment (in shares) | 317,833 | 236,278 | 187,690 | 102,325 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Mar. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 41,227 | $ 33,485 |
Work in process | 4,394 | 4,071 |
Finished goods | 25,990 | 28,008 |
Inventories, gross | 71,611 | 65,564 |
Valuation reserves | (1,977) | (1,774) |
Inventories, net | $ 69,634 | $ 63,790 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2021USD ($) | |
Goodwill | |
Balance at the beginning of the period | $ 213,038 |
Balance at the end of the period | 211,389 |
Operating Segments | |
Goodwill | |
Balance at the beginning of the period | 213,038 |
Foreign currency translation impact | (1,649) |
Balance at the end of the period | 211,389 |
Operating Segments | United States and Latin America | |
Goodwill | |
Balance at the beginning of the period | 62,725 |
Foreign currency translation impact | 0 |
Balance at the end of the period | 62,725 |
Operating Segments | Canada | |
Goodwill | |
Balance at the beginning of the period | 121,550 |
Foreign currency translation impact | (988) |
Balance at the end of the period | 120,562 |
Operating Segments | Europe, Middle East and Africa | |
Goodwill | |
Balance at the beginning of the period | 20,139 |
Foreign currency translation impact | (661) |
Balance at the end of the period | 19,478 |
Operating Segments | Asia-Pacific | |
Goodwill | |
Balance at the beginning of the period | 8,624 |
Foreign currency translation impact | 0 |
Balance at the end of the period | $ 8,624 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Mar. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | $ (137,951) | $ (132,321) |
Intangible assets, gross | 234,349 | 236,105 |
Intangible assets, net | 96,398 | 103,784 |
Certifications | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets (excluding goodwill) | 453 | 457 |
Products | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 65,712 | 66,250 |
Finite-lived intangible assets, accumulated amortization | (27,380) | (22,635) |
Finite-lived intangible assets, net carrying amount | 38,332 | 43,615 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 45,195 | 45,581 |
Finite-lived intangible assets, accumulated amortization | (1,460) | (1,289) |
Finite-lived intangible assets, net carrying amount | 43,735 | 44,292 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 9,940 | 10,028 |
Finite-lived intangible assets, accumulated amortization | (5,806) | (5,486) |
Finite-lived intangible assets, net carrying amount | 4,134 | 4,542 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 113,049 | 113,789 |
Finite-lived intangible assets, accumulated amortization | (103,305) | (102,911) |
Finite-lived intangible assets, net carrying amount | $ 9,744 | $ 10,878 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |||
Accrued employee compensation and related expenses | $ 13,001 | $ 11,765 | |
Accrued interest | 133 | 648 | |
Customer prepayments | 643 | 283 | |
Warranty reserves | 532 | 250 | |
Professional fees | 2,390 | 2,361 | |
Sales taxes payable | 2,224 | 2,404 | |
Other | 3,808 | 6,177 | |
Total accrued current liabilities | 22,731 | $ 22,048 | $ 23,888 |
Accrual for additional cost of sales | $ 2,677 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Thousands, $ in Thousands | Sep. 29, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 29, 2021CAD ($) | Mar. 31, 2021USD ($) |
Debt Instrument [Line Items] | ||||||
Less current portion | $ (7,004) | $ (7,004) | $ (2,500) | |||
Long-term debt, net | $ 125,092 | 125,092 | 143,017 | |||
Loss on extinguishment of debt | $ (2,569) | $ 0 | ||||
Line of credit facility, fixed charge coverage ratio | 125.00% | 125.00% | ||||
Letters of credit outstanding, amount | $ 3,022 | $ 3,022 | ||||
London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.625% | |||||
CDOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.625% | |||||
September 30, 2021 through September 30, 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, consolidated leverage ratio | 375.00% | 375.00% | ||||
December 31, 2022 and each fiscal quarter thereafter | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, consolidated leverage ratio | 350.00% | 350.00% | ||||
Revolving credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 100,000 | |||||
Long-term debt, term | 5 years | 5 years | ||||
Line of credit facility, accordian feature | $ 100,000 | |||||
Line of credit facility, commitment fee percentage | 0.25% | |||||
Proceeds from issuance of long-term debt | $ 8,000 | |||||
Capacity available under credit facility | 96,978 | $ 96,978 | ||||
Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, term | 5 years | 5 years | ||||
Long-term line of credit | $ 76,182 | |||||
Line of Credit | January 1, 2022 through October 1, 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 1.25% | 1.25% | ||||
Line of Credit | January 1, 2023 through October 1, 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 1.88% | 1.88% | ||||
Line of Credit | January 1, 2025 through July 1, 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 2.50% | 2.50% | ||||
Variable Rate Term Loan due October 2024 | Loans Payable | ||||||
Debt Instrument [Line Items] | ||||||
Variable Rate Term Loans | 145,517 | |||||
Debt issuance costs, net | $ 0 | $ 0 | $ 2,983 | |||
U.S. Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, term | 5 years | 5 years | ||||
Long-term line of credit | $ 80,000 | |||||
Variable term loan, interest rate | 1.73% | 1.73% | ||||
Canadian Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Variable term loan, interest rate | 2.16% | 2.16% | ||||
Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Debt issuance costs | $ 1,248 | $ 1,248 | ||||
Loss on extinguishment of debt | 2,569 | |||||
Variable Rate Term Loan due September 2026 | Loans Payable | ||||||
Debt Instrument [Line Items] | ||||||
Variable Rate Term Loans | $ 132,096 | $ 132,096 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2021USD ($) | |
Loss Contingencies [Line Items] | |
Accrual for additional cost of sales | $ 2,677 |
Totaled arrangements under letter of credit guarantees and performance bonds securing performance obligations | 10,167 |
Guarantee obligations secured by cash deposits | 1,335 |
Guarantee obligations represented by a reduction of the available amount of the company's short term and long term revolving lines of credit | 3,022 |
Indian custom bonds outstanding | 4,877 |
Accrued Liabilities | |
Loss Contingencies [Line Items] | |
Loss contingency accrual | 691 |
Prepaid Expenses and Other Current Assets | |
Loss Contingencies [Line Items] | |
Loss contingency accrual | $ 412 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 100,613 | $ 79,604 | $ 253,090 | $ 202,858 |
Revenues recognized at point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 57,603 | 46,117 | 152,083 | 114,947 |
Revenues recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 43,010 | 33,487 | 101,007 | 87,911 |
United States and Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 49,827 | 29,714 | 102,925 | 72,233 |
United States and Latin America | Revenues recognized at point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 19,695 | 14,743 | 50,565 | 34,728 |
United States and Latin America | Revenues recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 30,132 | 14,971 | 52,360 | 37,505 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 31,054 | 24,992 | 81,428 | 63,521 |
Canada | Revenues recognized at point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 25,358 | 18,509 | 64,490 | 45,932 |
Canada | Revenues recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 5,696 | 6,483 | 16,938 | 17,589 |
Europe, Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 12,937 | 17,144 | 44,366 | 38,941 |
Europe, Middle East and Africa | Revenues recognized at point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 7,896 | 7,932 | 21,218 | 21,449 |
Europe, Middle East and Africa | Revenues recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 5,041 | 9,212 | 23,148 | 17,492 |
Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,795 | 7,754 | 24,371 | 28,163 |
Asia-Pacific | Revenues recognized at point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 4,654 | 4,933 | 15,810 | 12,838 |
Asia-Pacific | Revenues recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 2,141 | $ 2,821 | $ 8,561 | $ 15,325 |
Revenue - Performance Obligatio
Revenue - Performance Obligation (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 145,715 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 46,313 |
Remaining performance obligation, period | 1 year |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Mar. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 21,248 | $ 11,379 |
Contract liabilities | $ 6,568 | $ 2,959 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Contingency [Line Items] | |||||
Effective tax rate | 32.20% | 56.10% | |||
Discrete tax expense | $ 301 | $ 430 | $ 1,854,000 | ||
Liability for uncertain tax positions | $ 865 | $ 865 | |||
Scenario, Forecast | |||||
Income Tax Contingency [Line Items] | |||||
Effective tax rate | 26.10% |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2021USD ($)segmentGeographic_Region | Dec. 31, 2020USD ($) | Mar. 31, 2021USD ($) | |
Sales by geographic area: | |||||
Number of Reportable Segments | segment | 4 | ||||
Number of Operating Segments | Geographic_Region | 4 | ||||
Sales | $ 100,613 | $ 79,604 | $ 253,090 | $ 202,858 | |
Depreciation | 2,785 | 2,839 | 8,736 | 8,352 | |
Amortization of intangible assets | 2,187 | 2,135 | 6,613 | 7,265 | |
Operating income | |||||
Operating income (loss) | 16,169 | 10,160 | 25,377 | 6,451 | |
Property, plant and equipment, net | 66,299 | 66,299 | $ 72,630 | ||
Assets | 626,470 | 626,470 | 617,878 | ||
Operating Segments | |||||
Sales by geographic area: | |||||
Sales | 100,613 | 79,604 | 253,090 | 202,858 | |
Intersegment Eliminations | |||||
Sales by geographic area: | |||||
Sales | 11,812 | 14,159 | 39,046 | 39,703 | |
Segment Reconciling Items | |||||
Operating income | |||||
Stock compensation expense | (275) | (430) | (2,698) | (2,921) | |
Public company costs | (305) | (277) | (1,464) | (1,151) | |
United States and Latin America | |||||
Sales by geographic area: | |||||
Depreciation | 1,396 | 1,647 | 4,331 | 4,727 | |
Amortization of intangible assets | 295 | 295 | 885 | 1,169 | |
Operating income | |||||
Operating income (loss) | 6,728 | 3,647 | 4,832 | (4,185) | |
Property, plant and equipment, net | 32,600 | 32,600 | 36,155 | ||
Assets | 228,932 | 228,932 | 218,699 | ||
United States and Latin America | Operating Segments | |||||
Sales by geographic area: | |||||
Sales | 49,827 | 29,714 | 102,925 | 72,233 | |
United States and Latin America | Intersegment Eliminations | |||||
Sales by geographic area: | |||||
Sales | 8,588 | 10,751 | 29,424 | 31,849 | |
Canada | |||||
Sales by geographic area: | |||||
Depreciation | 1,245 | 1,144 | 3,967 | 3,255 | |
Amortization of intangible assets | 1,858 | 1,797 | 5,624 | 5,452 | |
Operating income | |||||
Operating income (loss) | 7,312 | 4,993 | 15,136 | 9,171 | |
Property, plant and equipment, net | 30,074 | 30,074 | 32,583 | ||
Assets | 293,209 | 293,209 | 287,907 | ||
Canada | Operating Segments | |||||
Sales by geographic area: | |||||
Sales | 31,054 | 24,992 | 81,428 | 63,521 | |
Canada | Intersegment Eliminations | |||||
Sales by geographic area: | |||||
Sales | 2,616 | 2,523 | 7,555 | 5,378 | |
Europe, Middle East and Africa | |||||
Sales by geographic area: | |||||
Depreciation | 101 | 8 | 305 | 235 | |
Amortization of intangible assets | 23 | 32 | 71 | 429 | |
Operating income | |||||
Operating income (loss) | 2,026 | 802 | 6,464 | 2,278 | |
Property, plant and equipment, net | 2,969 | 2,969 | 3,141 | ||
Assets | 71,085 | 71,085 | 77,798 | ||
Europe, Middle East and Africa | Operating Segments | |||||
Sales by geographic area: | |||||
Sales | 12,937 | 17,144 | 44,366 | 38,941 | |
Europe, Middle East and Africa | Intersegment Eliminations | |||||
Sales by geographic area: | |||||
Sales | 295 | 542 | 1,137 | 1,615 | |
Asia-Pacific | |||||
Sales by geographic area: | |||||
Depreciation | 43 | 40 | 133 | 135 | |
Amortization of intangible assets | 11 | 11 | 33 | 215 | |
Operating income | |||||
Operating income (loss) | 683 | 1,425 | 3,107 | 3,259 | |
Property, plant and equipment, net | 656 | 656 | 751 | ||
Assets | 33,244 | 33,244 | $ 33,474 | ||
Asia-Pacific | Operating Segments | |||||
Sales by geographic area: | |||||
Sales | 6,795 | 7,754 | 24,371 | 28,163 | |
Asia-Pacific | Intersegment Eliminations | |||||
Sales by geographic area: | |||||
Sales | $ 313 | $ 343 | $ 930 | $ 861 |
Segment Information - Capital E
Segment Information - Capital Expenditures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||||
Capital expenditures | $ 865 | $ 576 | $ 2,920 | $ 4,708 |
United States and Latin America | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | 171 | 89 | 811 | 3,245 |
Canada | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | 566 | 473 | 1,833 | 1,340 |
Europe, Middle East and Africa | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | 92 | 10 | 223 | 59 |
Asia-Pacific | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | $ 36 | $ 4 | $ 53 | $ 64 |