Cover Page
Cover Page - shares | 3 Months Ended | |
Jun. 30, 2024 | Aug. 06, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
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 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | THR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 33,802,384 | |
Entity Central Index Key | 0001489096 | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2025 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
Current assets: | ||
Cash and cash equivalents | $ 49,083 | $ 48,631 |
Accounts receivable, net of allowances of $1,283 and $1,428 as of June 30, 2024 and March 31, 2024, respectively | 98,680 | 107,318 |
Inventories, net | 89,920 | 86,321 |
Contract assets | 14,735 | 16,690 |
Prepaid expenses and other current assets | 11,384 | 14,010 |
Income tax receivable | 2,543 | 1,630 |
Total current assets | 266,345 | 274,600 |
Property, plant and equipment, net of depreciation and amortization of $74,530 and $73,422 as of June 30, 2024 and March 31, 2024, respectively | 69,307 | 68,335 |
Goodwill | 269,415 | 270,786 |
Intangible assets, net | 123,161 | 127,092 |
Operating lease right-of-use assets | 13,531 | 13,613 |
Deferred income taxes | 1,359 | 1,074 |
Other non-current assets | 13,826 | 12,240 |
Total assets | 756,944 | 767,740 |
Current liabilities: | ||
Accounts payable | 30,582 | 31,396 |
Accrued liabilities | 29,191 | 31,624 |
Current portion of long-term debt | 15,750 | 14,625 |
Borrowings under revolving credit facility | 5,000 | 5,000 |
Contract liabilities | 15,278 | 20,531 |
Lease liabilities | 3,273 | 3,273 |
Income taxes payable | 3,153 | 2,820 |
Total current liabilities | 102,227 | 109,269 |
Long-term debt, net | 147,569 | 151,957 |
Deferred income taxes | 8,950 | 9,439 |
Non-current lease liabilities | 12,462 | 12,635 |
Other non-current liabilities | 9,756 | 9,553 |
Total liabilities | 280,964 | 292,853 |
Commitments and contingencies (Note 10) | ||
Equity | ||
Common stock: $0.001 par value; 150,000,000 shares authorized; 33,881,880 issued and 33,824,521 outstanding, and 33,730,243 issued and 33,722,225 outstanding at June 30, 2024 and March 31, 2024, respectively | 34 | 34 |
Preferred stock: $0.001 par value; 10,000,000 authorized; no shares issued and outstanding | 0 | 0 |
Additional paid in capital | 241,626 | 243,555 |
Treasury Stock | (1,829) | (250) |
Accumulated other comprehensive loss | (61,145) | (57,235) |
Retained earnings | 297,294 | 288,783 |
Total equity | 475,980 | 474,887 |
Total liabilities and equity | $ 756,944 | $ 767,740 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,283 | $ 1,428 |
Depreciation and amortization | $ 74,530 | $ 73,422 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 33,881,880 | 33,730,243 |
Common stock, shares outstanding (in shares) | 33,824,521 | 33,722,225 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||
Sales | $ 115,126 | $ 106,889 |
Cost of sales | 64,694 | 59,580 |
Gross profit | 50,432 | 47,309 |
Operating expenses: | ||
Selling, general and administrative expenses | 31,088 | 28,654 |
Deferred compensation plan expense/(income) | 103 | 273 |
Amortization of intangible assets | 3,397 | 2,387 |
Restructuring and other charges/(income) | 2,109 | 581 |
Income from operations | 13,735 | 15,414 |
Other income/(expenses): | ||
Interest expense, net | (2,847) | (1,584) |
Other income/(expense) | 143 | 341 |
Income before provision for income taxes | 11,031 | 14,171 |
Income tax expense | 2,520 | 3,233 |
Net income | 8,511 | 10,938 |
Comprehensive income: | ||
Net income | 8,511 | 10,938 |
Foreign currency translation adjustment | (3,879) | 4,457 |
Other miscellaneous income | (31) | 13 |
Comprehensive income | $ 4,601 | $ 15,408 |
Net income per common share: | ||
Basic (in dollars per share) | $ 0.25 | $ 0.33 |
Diluted (in dollars per share) | $ 0.25 | $ 0.32 |
Weighted-average shares used in computing net income per common share: | ||
Basic (in shares) | 33,756,172 | 33,566,732 |
Diluted (in shares) | 34,075,020 | 33,862,939 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Employees Common Stock | Executive Officer Common Stock | Director Common Stock |
Balance, beginning of period (in shares) at Mar. 31, 2023 | 33,508,076 | ||||||||
Balance, beginning of period at Mar. 31, 2023 | $ 418,988 | $ 33 | $ 239,860 | $ 237,195 | $ (58,100) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of restricted stock as deferred compensation to employees, executive officers and directors (in shares) | 73,345 | 93,826 | 5,718 | ||||||
Stock compensation expense | 1,238 | 1,238 | |||||||
Repurchase of employee stock units on vesting | (1,685) | (1,685) | |||||||
Net income | 10,938 | 10,938 | |||||||
Foreign currency translation adjustment | 4,457 | 4,457 | |||||||
Other | 13 | 13 | |||||||
Balance, end of period (in shares) at Jun. 30, 2023 | 33,680,965 | ||||||||
Balance, end of period at Jun. 30, 2023 | $ 433,949 | $ 33 | 239,413 | 248,133 | (53,630) | ||||
Balance, beginning of period (in shares) at Mar. 31, 2024 | 33,722,225 | 33,722,225 | |||||||
Balance, beginning of period at Mar. 31, 2024 | $ 474,887 | $ 34 | 243,555 | $ (250) | 288,783 | (57,235) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of restricted stock as deferred compensation to employees, executive officers and directors (in shares) | 56,614 | 87,782 | 7,241 | ||||||
Stock compensation expense | 1,065 | 1,065 | |||||||
Repurchase of employee stock units on vesting | (2,995) | (2,995) | |||||||
Repurchase of shares under authorized program (in shares) | (49,341) | ||||||||
Repurchase of shares under authorized program | (1,579) | (1,579) | |||||||
Net income | 8,511 | 8,511 | |||||||
Foreign currency translation adjustment | (3,879) | (3,879) | |||||||
Other | $ (30) | 1 | (31) | ||||||
Balance, end of period (in shares) at Jun. 30, 2024 | 33,824,521 | 33,824,521 | |||||||
Balance, end of period at Jun. 30, 2024 | $ 475,980 | $ 34 | $ 241,626 | $ (1,829) | $ 297,294 | $ (61,145) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Operating activities | ||
Net income | $ 8,511 | $ 10,938 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 5,563 | 4,439 |
Amortization of deferred debt issuance costs | 131 | 86 |
Impairment of property, plant, and equipment | 0 | (22) |
Stock compensation expense | 1,065 | 1,238 |
Deferred income taxes | (721) | (753) |
Remeasurement (gain)/loss on intercompany balances | 299 | (389) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 7,404 | 7,043 |
Inventories | (3,954) | (10,652) |
Contract assets and liabilities | (3,606) | (5,596) |
Other current and non-current assets | 650 | (1,256) |
Accounts payable | (201) | 1,000 |
Accrued liabilities and non-current liabilities | (1,959) | (6,546) |
Income taxes payable and receivable | (523) | 1,338 |
Net cash provided by operating activities | 12,659 | 868 |
Investing activities | ||
Purchases of property, plant and equipment | (3,923) | (2,801) |
Sale of rental equipment | 19 | 12 |
Net cash used in investing activities | (3,904) | (2,789) |
Financing activities | ||
Proceeds from revolving credit facility | 0 | 8,000 |
Payments on long-term debt | (3,375) | (7,765) |
Repurchase of employee stock units on vesting | (2,995) | (1,685) |
Repurchase of shares under authorized program | (1,579) | 0 |
Payments on finance leases | (53) | (403) |
Net cash used in financing activities | (8,002) | (1,853) |
Less: Net change in cash balances classified as assets held-for-sale | 0 | 1,012 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (543) | 271 |
Change in cash, cash equivalents and restricted cash | 210 | (2,491) |
Cash, cash equivalents and restricted cash at beginning of period | 50,431 | 38,520 |
Cash, cash equivalents and restricted cash at end of period | $ 50,641 | $ 36,029 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Thermon Group Holdings, Inc. and its 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, electrode and gas-fired boilers, heating cables, industrial heating blankets and related products, 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, 2024 ("fiscal 2024"). In our opinion, the accompanying condensed consolidated financial statements reflect all adjustments considered necessary to present fairly our financial position at June 30, 2024 and March 31, 2024, and the results of our operations for the three months ended June 30, 2024 and 2023. Certain reclassifications have been made to these condensed consolidated financial statements and accompanying footnotes to conform to the presentation to the current fiscal year. Summary of Significant Accounting Policies Please refer to Note 1, "Summary of Significant Accounting Policies” in our consolidated financial statements from our fiscal 2024 Form 10-K, as filed with the SEC on May 29, 2024, for the discussion on our significant accounting policies. 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 its assumptions and estimates on the facts and circumstances existing at June 30, 2024, actual results could differ from those estimates and affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities and the corresponding revenues and expenses as of the date of the financial statements. The operating results for the three months ended June 30, 2024, are not necessarily indicative of the results that may be achieved for the fiscal year ended March 31, 2025 ("fiscal 2025"). 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 reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statements of cash flows. June 30, 2024 March 31, 2024 Cash and cash equivalents $ 49,083 $ 48,631 Restricted cash included in prepaid expenses and other current assets 1,558 1,800 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 50,641 $ 50,431 Amounts shown in restricted cash included in prepaid expenses and other current assets represent those required to be set aside by a contractual agreement, which generally contain cash deposits pledged as collateral on performance bonds and letters of credit. Recent Accounting Pronouncements Please refer to Note 1, "Summary of Significant Accounting Policies” of our Consolidated Financial Statements, from our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, filed with the SEC on May 29, 2024, for the discussion on accounting pronouncements that have been issued but not yet effective for the interim periods presented that are not expected to have a material impact on our financial position or results of operations. |
Acquisition
Acquisition | 3 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Acquisition | Acquisition Vapor Power On January 2, 2024, we announced our acquisition (the "Vapor Power Acquisition") of 100% of the issued and outstanding equity interests of Vapor Power International, LLC and its affiliates, (“Vapor Power”), a leading provider of high-quality industrial process heating solutions, including electric, electrode and gas fired boilers. The acquisition was consummated on December 29, 2023 (the "Vapor Power Acquisition Date") and the seller was Stone Pointe, LLC. We have integrated Vapor Power into our United States and Latin America ("US-LAM") reportable segment. The total purchase price for Vapor Power was $107,523, with cash acquired of $7,051, for a net closing purchase price of $100,472. The total purchase price is based on customary adjustments for cash acquired, preliminary working capital adjustments, outstanding indebtedness, and transaction expenses. The Vapor Power acquisition was funded with cash on hand, the existing revolving credit facility, and an expanded term loan amended on December 29, 2023 in connection with the transaction. Acquisition Costs In accordance with GAAP, costs to complete an acquisition are expensed as incurred. Total acquisition costs recognized in the Vapor Power acquisition were approximately $1,527, recognized in fiscal 2024. These fees represent legal, advisory, and other professional fees paid by the Company to complete the acquisition. Preliminary Purchase Price Allocation We have accounted for the Vapor Power acquisition according to the business combinations guidance found in ASC 805, Business Combinations , henceforth referred to as acquisition accounting. Acquisition accounting requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. We used primarily Level 2 and 3 inputs to allocate the purchase price to the major categories of assets and liabilities shown below. For valuing the customer-related intangible assets, we used a common income-based approach called the multi-period excess earnings method; for the marketing-related and developed technology intangible assets, we used a relief-from-royalty method. The carrying values of inventories and property, plant, and equipment, and leases were adjusted to fair value, while the carrying value of any other asset or liability acquired approximated the respective fair value at time of closing. The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill, is based upon preliminary information and is subject to change within the measurement period (up to one year from the Vapor Power Acquisition Date) as additional information concerning final asset and liability valuations is obtained. The fair value of the acquired intangible assets at December 31, 2023, of $44,521, was provisional pending receipt of the final valuation report for those assets from a third-party valuation expert. Additionally, we are still evaluating Vapor Power's customer contracts and related revenue recognition policies, and as such, the value of contract assets and/or contract liabilities is subject to change. During the measurement period, if new information is obtained about facts and circumstances that existed as of the Vapor Power Acquisition Date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date, we will revise the preliminary purchase price allocation. The effect of any measurement period adjustments to the estimated fair values will be reflected in future updates to our purchase price allocation. Goodwill will be deductible for tax purposes and generally represents expected synergies from the combination of efforts of the acquired business and the Company. Preliminary Purchase Price Allocation - Vapor Power Amortization Period (years) Fair Value Cash $ 7,051 Accounts receivable 8,683 Inventories 8,254 Other current assets 1,693 Property, plant and equipment 2,576 Operating lease right-of-use assets 2,700 Intangibles: Customer relationships (1) 2 - 15 22,953 Trademarks 10 7,879 Developed technology 15 13,689 Goodwill 51,750 Total fair value of assets acquired $ 127,228 Current liabilities (17,156) Operating lease liability (2,549) Total fair value of liabilities acquired $ (19,705) Total purchase price $ 107,523 (1) Included in the customer relationships intangible assets is $4,407 related to customer backlog with an estimated useful life of 2 years. Unaudited Pro Forma Financial Information The following unaudited pro forma results of operations assume that the Vapor Power acquisition occurred at the beginning of the periods presented. These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations would have been if the Vapor Power Acquisition had occurred at the beginning of the periods presented, nor are they indicative of future results of operations. The pro forma results presented below are adjusted for the removal of Vapor Power Acquisition and other related costs of $250 and $217, in the three months ended June 30, 2024 and 2023, respectively. Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Sales $ 115,126 $ 115,859 Net income 8,631 11,347 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and March 31, 2024, no assets or liabilities were valued using Level 3 criteria, except for those acquired in our acquisition of Vapor Power, as discussed in Note 2, "Acquisition." Information about our financial assets and liabilities is as follows: June 30, 2024 March 31, 2024 Carrying Fair Value Carrying Fair Value Valuation Technique Financial Assets: Deferred compensation plan assets $ 8,553 $ 8,553 $ 8,384 $ 8,384 Level 1 - Active Markets Foreign currency contract forwards assets — — 7 7 Level 2 - Market Approach Financial Liabilities: Outstanding borrowings from revolving line of credit $ 5,000 $ 5,000 $ 5,000 $ 5,000 Level 2 - Market Approach Outstanding principal amount of senior secured credit facility 164,125 163,304 167,500 167,081 Level 2 - Market Approach Deferred compensation plan liabilities 7,754 7,754 7,574 7,574 Level 1 - Active Markets Foreign currency contract forwards liabilities 2 2 23 23 Level 2 - Market Approach At June 30, 2024 and March 31, 2024, 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. Additionally, we acquired certain assets and liabilities as disclosed in Note 2, "Acquisition" at fair value according to acquisition accounting. 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 non-current assets” in the condensed consolidated balance sheets at June 30, 2024 and March 31, 2024 were $8,553 and $8,384, 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 $7,754 and $7,574 included in “Other non-current liabilities” in the condensed consolidated balance sheets at June 30, 2024 and March 31, 2024, respectively. Deferred compensation plan expense/(income) is included as such in the condensed consolidated statements of operations and comprehensive income, and therefore is excluded from "Selling, general and administrative expenses." Deferred compensation plan expense/(income) was $103 and $273 for the three months ended June 30, 2024 and 2023, 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/expense" on our condensed consolidated statements of operations and comprehensive income. Our unrealized (gains) on investments were $(93) and $(283), for the three months ended June 30, 2024 and 2023, 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/(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 June 30, 2024 and March 31, 2024, the notional amounts of forward contracts were as follows: Notional amount of foreign currency forward contracts by currency June 30, 2024 March 31, 2024 Canadian Dollar $ 1,000 $ 2,500 Mexican Peso — 3,000 Australian Dollar — 500 British Pound Sterling 700 1,000 Total notional amounts $ 1,700 $ 7,000 |
Restructuring and Other Charges
Restructuring and Other Charges/(Income) | 3 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges/(Income) | Restructuring and Other Charges/(Income) Fiscal 2025 charges/(income) On April 8, 2024, we enacted certain cost-cutting measures, including a reduction-in-force plan, as well as a facility consolidation, that together affected 68 employees across our US-LAM and Canada reportable segments. Pursuant to the foregoing, we are moving certain operations and equipment associated with our rail & transit business from our Denver, Colorado location to San Marcos, Texas, where we have an existing manufacturing and back-office presence. These efforts, in part, will allow us to streamline certain operations, reduce our manufacturing footprint, and position us for more profitable growth. As a result of this actions, we recorded $2,109 in Restructuring and other charges. Fiscal 2024 charges/(income) As a result of the continued impact of the Russo-Ukrainian war, including the sanctions related thereto, the Company commenced a strategic assessment of its operations in its Russian subsidiary. On January 31, 2023, our board of directors authorized the Company to withdraw from its operations in the Russian Federation (the “Russia Exit”), through a planned disposition of its Russian subsidiary. In fiscal 2023, we moved the assets related to our Russian subsidiary into a separate asset group deemed as "assets held-for-sale," and wrote down the related net assets to a nominal value. In fiscal 2024, we recognized total charges related to the Russia Exit of $581 recorded to "Restructuring and other charges/(income)" on our condensed consolidated statements of operations and comprehensive income. Restructuring and other charges by reportable segment is as follows: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 United States and Latin America $ 715 $ — Canada 1,394 — Europe, Middle East and Africa — 581 Asia-Pacific — — $ 2,109 $ 581 |
Net Income per Common Share
Net Income per Common Share | 3 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Net Income per Common Share | Net Income per Common Share The reconciliations of the denominators used to calculate basic and diluted net income per common share for the three months ended June 30, 2024 and 2023, respectively, are as follows: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Basic net income per common share Net income $ 8,511 $ 10,938 Weighted-average common shares outstanding 33,756,172 33,566,732 Basic net income per common share $ 0.25 $ 0.33 Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Diluted net income per common share Net income $ 8,511 $ 10,938 Weighted-average common shares outstanding 33,756,172 33,566,732 Common share equivalents: Stock options 36,453 21,664 Restricted and performance stock units 282,395 274,543 Weighted average shares outstanding – dilutive (1) 34,075,020 33,862,939 Diluted net income per common share $ 0.25 $ 0.32 (1) For the three months ended June 30, 2024 and 2023, 45,679 and zero, respectively, were not included in the calculation of diluted net income per common share, as they would have had an anti-dilutive effect. 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 per common share until such time that it is probable that actual performance will be above or below target. |
Inventories
Inventories | 3 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: June 30, 2024 March 31, 2024 Raw materials $ 62,008 $ 58,197 Work in process 5,871 5,339 Finished goods 26,135 26,552 94,014 90,088 Valuation reserves (4,094) (3,767) Inventories, net $ 89,920 $ 86,321 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024, is as follows: United States and Latin America Canada Europe, Middle East and Africa Asia-Pacific Total Balance as of March 31, 2024 $ 133,095 $ 112,846 $ 18,532 $ 6,313 $ 270,786 Foreign currency translation impact — (1,112) (132) (127) (1,371) Balance as of June 30, 2024 $ 133,095 $ 111,734 $ 18,400 $ 6,186 $ 269,415 (1) Refer to Note 2, "Acquisition," for more information on the goodwill acquired through our recent acquisition of Vapor Power. 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. To date, there have been no indicators of impairment. Our total intangible assets consisted of the following: Gross Carrying Amount at June 30, 2024 Accumulated Amortization Net Carrying Amount at June 30, 2024 Gross Carrying Amount at March 31, 2023 Accumulated Amortization Net Carrying Amount at March 31, 2023 Products $ 60,899 $ (40,599) $ 20,300 $ 61,505 $ (39,466) $ 22,039 Trademarks 53,922 (2,934) 50,988 54,158 (2,650) 51,508 Developed technology 28,234 (7,760) 20,474 28,288 (7,372) 20,916 Customer relationships 135,628 (105,402) 30,226 136,088 (104,699) 31,389 Certifications 426 — 426 429 — 429 Other 1,280 (533) 747 1,280 (469) 811 Total $ 280,389 $ (157,228) $ 123,161 $ 281,748 $ (154,656) $ 127,092 |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued current liabilities consisted of the following: June 30, 2024 March 31, 2024 Accrued employee compensation and related expenses $ 14,335 $ 17,319 Accrued interest 908 494 Warranty reserves 2,779 978 Professional fees 2,934 2,912 Sales taxes payable 3,079 3,564 Accrued litigation payable (1) 971 1,356 Other (2) 4,185 5,001 Total accrued current liabilities $ 29,191 $ 31,624 (1) - The Company has insurance receivables recorded to Prepaid expenses and other current assets on our condensed consolidated balance sheets relating to and materially offsetting the accrued litigation payable noted above. (2) - Included in Other are accrued warranty-related costs of $1,996 and $1,996, respectively, associated with the operational execution of a US-LAM project that was completed previously. |
Debt
Debt | 3 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consisted of the following: June 30, 2024 March 31, 2024 U.S. Term Loan Facility due September 2026, net of deferred debt issuance costs of $200 and $226 as of June 30, 2024, and March 31, 2024, respectively $ 65,800 $ 67,274 Incremental Term Loan A due September 2026, net of deferred debt issuance costs of $606 and $692 of June 30, 2024, and March 31, 2024, respectively 97,519 99,308 Less current portion (15,750) (14,625) Total long-term debt $ 147,569 $ 151,957 Senior Secured Credit Facilities On September 29, 2021, Thermon Group Holdings, Inc. as a credit party and a guarantor, Thermon Holding Corp. (the “US Borrower”) and Thermon Canada Inc. (the “Canadian Borrower” and together with the US Borrower, the “Borrowers”), entered into an Amended and Restated Credit Agreement with several banks and other financial institutions or entities from time to time and JPMorgan Chase Bank, N.A., as Administrative Agent, ("the Agent") which was further amended on November 19, 2021, and March 7, 2023. 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-year secured revolving credit facility made available to the U.S. Borrower. The Revolving Credit Facility includes sub-limits for letters of credit and swing-line loans (the “Revolving Credit Facility”). • U.S. Term Loan Facility: A USD $80,000 five-year secured term loan A (the “U.S. Term Loan”) made available to the U.S. Borrower (the “U.S. Term Loan Facility”); and • Canadian Term Loan Facility: A CAD $76,182 five-year term loan A (the “Canadian Term Loan” and, together with the U.S. Term Loan, the “Term Loans”) made available to the Canadian Borrower (the “Canadian Term Loan Facility,” and together with the U.S. Term Loan Facility, the “Term Loan Facilities”). 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. On December 29, 2023, the Company and the Borrowers entered into an Amendment No. 3 to Credit Agreement, Amendment No. 2 to the Guarantee and Collateral Agreement and Amendment No. 2 to the Canadian Guarantee and Collateral Agreement (collectively, the “Amendment”) with the Lenders and the Agent. The Amendment provides for, among other things, changes to the Credit Agreement to (a) provide the US Borrower with a new incremental term loan facility as further described below (the “2023 Incremental U.S. Term Loan Facility”), (b) reset the accordion feature in the Credit Agreement for the incurrence of additional incremental term loans and incremental revolving commitments to an amount not to exceed USD $100,000, (c) permit the Canadian Borrower to borrow under the existing Revolver Facility (as defined in the Credit Agreement) in Canadian dollars, (d) permit Letters of Credit (as defined in the Credit Agreement) to be issued for the account of the Canadian Borrower, (e) replace the Canadian Dollar Offered Rate with the Canadian Overnight Repo Rate Average as the benchmark rate applicable to Term Benchmark Loans (each as defined in the Credit Agreement) denominated in Canadian dollars and implementing corresponding technical changes, and (f) expand the definitions of “Specified Cash Management Agreement” and “Specified Swap Agreement” (each as defined in the Credit Agreement) to provide for the inclusion of obligations arising under Swap Agreements (as defined in the Credit Agreement) and cash management agreements between any subsidiary of the US Borrower to be included in the Obligations (as defined in the Credit Agreement) that are secured and guaranteed under the Loan Documents (as defined in the Credit Agreement). Certain principal terms of the 2023 Incremental U.S. Term Loan Facility are as follows: • A USD $100,000 secured term loan A made available to the US Borrower on substantially the same terms as the existing U.S. Term A Loans (as defined in the Credit Agreement), but with a pricing increase across the grid of 0.375% above the pricing applicable to the existing U.S. Term A Loans. • Loans made to the US Borrower under the 2023 Incremental U.S. Term Loan Facility (the “2023 Incremental U.S. Term Loans”) shall rank pari passu in right of payment and security with the existing U.S. Term A Loans and shall be secured and guaranteed under the Loan Documents on a pro rata basis with the existing U.S. Term A Loans. • The 2023 Incremental U.S. Term Loans shall mature on September 29, 2026 (same as the existing U.S. Term A Loans) and shall amortize with installment payments due on the first day of each fiscal quarter (commencing with the fiscal quarter commencing on April 1, 2024) with the same percentage of principal being due on each payment date as the percentage of principal of the existing U.S. Term A Loans due on such date. • Proceeds of the 2023 Incremental U.S. Term Loans were used at the closing of the transactions contemplated by the Amendment to (a) finance the Vapor Acquisition (as defined in the Amendment), (b) refinance certain indebtedness of the Target (as defined in the Amendment), and (c) pay fees and expenses incurred by the US Borrower in connection with the foregoing. The Amendment also provides for certain conforming changes relating to the expanded definitions of Specified Cash Management Agreement and Specified Swap Agreement in the Credit Agreement to (x) the Guarantee and Collateral Agreement, dated as of October 30, 2017, by and among the Company, the US Borrower and the Agent (the “US Security Agreement”) and (y) the Canadian Guarantee and Collateral Agreement, dated as of October 30, 2017, by and between the Canadian Borrower and the Agent (the “Canadian Security Agreement”, and together with the US Security Agreement, the “Security Agreements”), and also provides for changes in each Security Agreement to the waterfall for application of proceeds of collateral set forth therein so that Obligations (as defined in such Security Agreement) arising under Specified Cash Management Agreements and Specified Swap Agreements (other than indemnities, fees and similar obligations and liabilities) are paid pro rata with principal Obligations arising under Loans, Reimbursement Obligations and the cash collateralization of Letters of Credit (each as defined in such Security Agreement). The foregoing summary of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 10-Q and incorporated herein by reference. Maturity and Repayment Each of the Facilities terminates on September 29, 2026. 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, 2023 through October 1, 2024 1.88 % January 1, 2025 through July 1, 2026 2.50 % Guarantees The U.S. Term Loan and 2023 Incremental U.S. Term Loan Facility 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 2023 Incremental U.S. Term Loan Facility 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. 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 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 June 30, 2024, we were in compliance with all financial covenants of the Credit Agreement. 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 June 30, 2024, we had $5,000 in outstanding borrowings under the Revolving Credit Facility. We had $92,740 of available borrowing capacity thereunder after taking into account the borrowing base and $2,260 of outstanding letters of credit and the outstanding borrowings under the Revolving Credit Facility as of June 30, 2024. The Term Loans bear interest at the Secured Overnight Financing Rate ("SOFR") plus an applicable margin dictated by our leverage ratio (as described above). The interest rates on the Term Loan Facilities on June 30, 2024 were 6.68% for the U.S. Term Loan Facility, 7.05% for the 2023 Incremental U.S. Term Loan Facility, and 6.69% for the U.S. Revolving Credit 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 | 3 Months Ended |
Jun. 30, 2024 | |
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. As of June 30, 2024, we have established an estimated liability associated with the aforementioned disputes. Expenses related to litigation reduce operating income. We do not believe that the outcome of any of these proceedings or disputes would have a material 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 reporting period. Refer to Note 8, "Accrued Liabilities" for more information regarding our accruals related to these proceedings. Letters of Credit and Bank Guarantees |
Revenue
Revenue | 3 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue We disaggregate our revenue from contracts with customers by geographic location as well as revenue recognized at a point-in-time and revenues recognized over time, as we believe these best depict the nature of our sales and the regions in which those sales are earned and managed. Revenue recognized at a point-in-time occurs based on when control transitions to the customer and is generally related to our product sales. Moreover, 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 months ended June 30, 2024 and 2023 are as follows: Three months ended June 30, 2024 Three months ended June 30, 2023 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 $ 44,408 $ 15,576 $ 59,984 $ 29,891 $ 23,606 $ 53,497 Canada 21,608 16,737 38,345 24,522 10,801 35,323 Europe, Middle East and Africa 4,613 3,229 7,842 5,393 4,288 9,681 Asia-Pacific 6,137 2,818 8,955 5,339 3,049 8,388 Total revenues $ 76,766 $ 38,360 $ 115,126 $ 65,145 $ 41,744 $ 106,889 Performance Obligations We have elected the practical expedient to disclose only the value of remaining performance obligations for contracts with an original expected length of one year or more, which was $8,363 as of June 30, 2024. We expect to recognize the remaining revenues associated with unsatisfied or partially satisfied performance obligations within the next 12 months. Contract Assets and Liabilities As of June 30, 2024 and March 31, 2024, contract assets were $14,735 and $16,690, respectively. As of June 30, 2024 and March 31, 2024, contract liabilities were $15,278 and $20,531, respectively. We typically recognize revenue associated with our contract liabilities within 12 months. |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective income tax rate was 22.8% and 22.8% for the three months ended June 30, 2024 and 2023, respectively. Our effective tax rate varies from period to period due to factors including changes in total pre-tax income or loss, the jurisdictions in which our income is earned, the tax laws in those jurisdictions and in our operating structure. During the year, we estimate income taxes based on the laws and rates in effect in the countries in which operations are conducted. Our income tax provisions are primarily driven by income in certain jurisdictions and withholding taxes on intercompany and third-party transactions that do not directly correlate to ordinary income or loss. During interim periods, certain charges or benefits may be recognized as discrete tax expense or benefit when previous estimates or knowledge were unavailable. As of June 30, 2024, we anticipate that it is reasonably possible that our uncertain tax positions of $1,069 including interest and penalties maybe released in the next twelve months due to expiration of statutes of limitations, settlements and/or conclusions of tax examinations. As of June 30, 2024, the tax years for the fiscal years ended March 31, 2019 through March 31, 2024, remain open to examination by the major taxing jurisdictions. |
Segment Information
Segment Information | 3 Months Ended |
Jun. 30, 2024 | |
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, energy transition/decarbonization and general industries and other, which we refer to as our "key end markets." We offer a full suite of products (heating units, electrode and gas-fired boilers, heating cables, industrial heating blankets and related products, 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. 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 including interest and penalties maybe released in the next twelve months due to expiration of statutes of limitations, settlements and/or conclusions of tax examinations 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, and income from operations for each of our four reportable segments are as follows: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Sales to external customers: United States and Latin America $ 59,984 $ 53,497 Canada 38,345 35,323 Europe, Middle East and Africa 7,842 9,681 Asia-Pacific 8,955 8,388 $ 115,126 $ 106,889 Inter-Segment sales: United States and Latin America $ 11,108 $ 8,381 Canada 3,548 4,732 Europe, Middle East and Africa 417 389 Asia-Pacific 431 1,111 $ 15,504 $ 14,613 Depreciation expense: United States and Latin America $ 1,236 $ 1,056 Canada 833 911 Europe, Middle East and Africa 49 47 Asia-Pacific 48 38 $ 2,166 $ 2,052 Amortization expense: United States and Latin America $ 1,653 $ 611 Canada 1,711 1,743 Europe, Middle East and Africa 22 22 Asia-Pacific 11 11 $ 3,397 $ 2,387 Income from operations: United States and Latin America $ 6,463 $ 5,599 Canada 7,268 9,119 Europe, Middle East and Africa 343 605 Asia-Pacific 1,214 1,737 Unallocated: Stock compensation (1,065) (1,238) Public company costs (488) (408) $ 13,735 $ 15,414 The following table presents a reconciliation of Income from operations to Income before provision for income taxes: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Income from operations $ 13,735 $ 15,414 Other income/(expenses): Interest expense, net (2,847) (1,584) Other income/(expense) 143 341 Income before provision for income taxes $ 11,031 $ 14,171 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||
Net income | $ 8,511 | $ 10,938 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | 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, 2024 ("fiscal 2024"). In our opinion, the accompanying condensed consolidated financial statements reflect all adjustments considered necessary to present fairly our financial position at June 30, 2024 and March 31, 2024, and the results of our operations for the three months ended June 30, 2024 and 2023. Certain reclassifications have been made to these condensed consolidated financial statements and accompanying footnotes to conform to the presentation to the current fiscal year. |
Use of Estimates | Use of Estimates |
Restricted Cash and Cash Equivalents | Amounts shown in restricted cash included in prepaid expenses and other current assets represent those required to be set aside by a contractual agreement, which generally contain cash deposits pledged as collateral on performance bonds and letters of credit. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Please refer to Note 1, "Summary of Significant Accounting Policies” of our Consolidated Financial Statements, from our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, filed with the SEC on May 29, 2024, for the discussion on accounting pronouncements that have been issued but not yet effective for the interim periods presented that are not expected to have a material impact on our financial position or results of operations. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Restricted 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 reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statements of cash flows. June 30, 2024 March 31, 2024 Cash and cash equivalents $ 49,083 $ 48,631 Restricted cash included in prepaid expenses and other current assets 1,558 1,800 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 50,641 $ 50,431 |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Schedule of Purchase Price Allocation | Preliminary Purchase Price Allocation - Vapor Power Amortization Period (years) Fair Value Cash $ 7,051 Accounts receivable 8,683 Inventories 8,254 Other current assets 1,693 Property, plant and equipment 2,576 Operating lease right-of-use assets 2,700 Intangibles: Customer relationships (1) 2 - 15 22,953 Trademarks 10 7,879 Developed technology 15 13,689 Goodwill 51,750 Total fair value of assets acquired $ 127,228 Current liabilities (17,156) Operating lease liability (2,549) Total fair value of liabilities acquired $ (19,705) Total purchase price $ 107,523 (1) Included in the customer relationships intangible assets is $4,407 related to customer backlog with an estimated useful life of 2 years. |
Schedule of Unaudited Pro Forma Information | Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Sales $ 115,126 $ 115,859 Net income 8,631 11,347 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Long-term Debt That Is Not Measured At Fair Value | Information about our financial assets and liabilities is as follows: June 30, 2024 March 31, 2024 Carrying Fair Value Carrying Fair Value Valuation Technique Financial Assets: Deferred compensation plan assets $ 8,553 $ 8,553 $ 8,384 $ 8,384 Level 1 - Active Markets Foreign currency contract forwards assets — — 7 7 Level 2 - Market Approach Financial Liabilities: Outstanding borrowings from revolving line of credit $ 5,000 $ 5,000 $ 5,000 $ 5,000 Level 2 - Market Approach Outstanding principal amount of senior secured credit facility 164,125 163,304 167,500 167,081 Level 2 - Market Approach Deferred compensation plan liabilities 7,754 7,754 7,574 7,574 Level 1 - Active Markets Foreign currency contract forwards liabilities 2 2 23 23 Level 2 - Market Approach |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | As of June 30, 2024 and March 31, 2024, the notional amounts of forward contracts were as follows: Notional amount of foreign currency forward contracts by currency June 30, 2024 March 31, 2024 Canadian Dollar $ 1,000 $ 2,500 Mexican Peso — 3,000 Australian Dollar — 500 British Pound Sterling 700 1,000 Total notional amounts $ 1,700 $ 7,000 |
Restructuring and Other Charg_2
Restructuring and Other Charges/(Income) (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Restructuring and other charges by reportable segment is as follows: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 United States and Latin America $ 715 $ — Canada 1,394 — Europe, Middle East and Africa — 581 Asia-Pacific — — $ 2,109 $ 581 |
Net Income per Common Share (Ta
Net Income per Common Share (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliations of the Denominators Used to Calculate Basic and Diluted Net Income Per Common Share | The reconciliations of the denominators used to calculate basic and diluted net income per common share for the three months ended June 30, 2024 and 2023, respectively, are as follows: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Basic net income per common share Net income $ 8,511 $ 10,938 Weighted-average common shares outstanding 33,756,172 33,566,732 Basic net income per common share $ 0.25 $ 0.33 Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Diluted net income per common share Net income $ 8,511 $ 10,938 Weighted-average common shares outstanding 33,756,172 33,566,732 Common share equivalents: Stock options 36,453 21,664 Restricted and performance stock units 282,395 274,543 Weighted average shares outstanding – dilutive (1) 34,075,020 33,862,939 Diluted net income per common share $ 0.25 $ 0.32 (1) For the three months ended June 30, 2024 and 2023, 45,679 and zero, respectively, were not included in the calculation of diluted net income per common share, as they would have had an anti-dilutive effect. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consisted of the following: June 30, 2024 March 31, 2024 Raw materials $ 62,008 $ 58,197 Work in process 5,871 5,339 Finished goods 26,135 26,552 94,014 90,088 Valuation reserves (4,094) (3,767) Inventories, net $ 89,920 $ 86,321 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Amount of Goodwill | The carrying amount of goodwill by operating segment as of June 30, 2024, is as follows: United States and Latin America Canada Europe, Middle East and Africa Asia-Pacific Total Balance as of March 31, 2024 $ 133,095 $ 112,846 $ 18,532 $ 6,313 $ 270,786 Foreign currency translation impact — (1,112) (132) (127) (1,371) Balance as of June 30, 2024 $ 133,095 $ 111,734 $ 18,400 $ 6,186 $ 269,415 (1) Refer to Note 2, "Acquisition," for more information on the goodwill acquired through our recent acquisition of Vapor Power. |
Schedule of Intangible Assets | Our total intangible assets consisted of the following: Gross Carrying Amount at June 30, 2024 Accumulated Amortization Net Carrying Amount at June 30, 2024 Gross Carrying Amount at March 31, 2023 Accumulated Amortization Net Carrying Amount at March 31, 2023 Products $ 60,899 $ (40,599) $ 20,300 $ 61,505 $ (39,466) $ 22,039 Trademarks 53,922 (2,934) 50,988 54,158 (2,650) 51,508 Developed technology 28,234 (7,760) 20,474 28,288 (7,372) 20,916 Customer relationships 135,628 (105,402) 30,226 136,088 (104,699) 31,389 Certifications 426 — 426 429 — 429 Other 1,280 (533) 747 1,280 (469) 811 Total $ 280,389 $ (157,228) $ 123,161 $ 281,748 $ (154,656) $ 127,092 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Current Liabilities | Accrued current liabilities consisted of the following: June 30, 2024 March 31, 2024 Accrued employee compensation and related expenses $ 14,335 $ 17,319 Accrued interest 908 494 Warranty reserves 2,779 978 Professional fees 2,934 2,912 Sales taxes payable 3,079 3,564 Accrued litigation payable (1) 971 1,356 Other (2) 4,185 5,001 Total accrued current liabilities $ 29,191 $ 31,624 (1) - The Company has insurance receivables recorded to Prepaid expenses and other current assets on our condensed consolidated balance sheets relating to and materially offsetting the accrued litigation payable noted above. (2) - Included in Other are accrued warranty-related costs of $1,996 and $1,996, respectively, associated with the operational execution of a US-LAM project that was completed previously. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following: June 30, 2024 March 31, 2024 U.S. Term Loan Facility due September 2026, net of deferred debt issuance costs of $200 and $226 as of June 30, 2024, and March 31, 2024, respectively $ 65,800 $ 67,274 Incremental Term Loan A due September 2026, net of deferred debt issuance costs of $606 and $692 of June 30, 2024, and March 31, 2024, respectively 97,519 99,308 Less current portion (15,750) (14,625) Total long-term debt $ 147,569 $ 151,957 Each of the Facilities terminates on September 29, 2026. 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, 2023 through October 1, 2024 1.88 % January 1, 2025 through July 1, 2026 2.50 % Fiscal Quarter Ending Consolidated Leverage Ratio December 31, 2022, and each fiscal quarter thereafter 3.50:1.00 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenues | Disaggregation of revenues from contracts with customers for the three months ended June 30, 2024 and 2023 are as follows: Three months ended June 30, 2024 Three months ended June 30, 2023 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 $ 44,408 $ 15,576 $ 59,984 $ 29,891 $ 23,606 $ 53,497 Canada 21,608 16,737 38,345 24,522 10,801 35,323 Europe, Middle East and Africa 4,613 3,229 7,842 5,393 4,288 9,681 Asia-Pacific 6,137 2,818 8,955 5,339 3,049 8,388 Total revenues $ 76,766 $ 38,360 $ 115,126 $ 65,145 $ 41,744 $ 106,889 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Total Sales and Operating Income Classified by Major Geographic Area | Total sales to external customers, inter-segment sales, depreciation expense, amortization expense, and income from operations for each of our four reportable segments are as follows: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Sales to external customers: United States and Latin America $ 59,984 $ 53,497 Canada 38,345 35,323 Europe, Middle East and Africa 7,842 9,681 Asia-Pacific 8,955 8,388 $ 115,126 $ 106,889 Inter-Segment sales: United States and Latin America $ 11,108 $ 8,381 Canada 3,548 4,732 Europe, Middle East and Africa 417 389 Asia-Pacific 431 1,111 $ 15,504 $ 14,613 Depreciation expense: United States and Latin America $ 1,236 $ 1,056 Canada 833 911 Europe, Middle East and Africa 49 47 Asia-Pacific 48 38 $ 2,166 $ 2,052 Amortization expense: United States and Latin America $ 1,653 $ 611 Canada 1,711 1,743 Europe, Middle East and Africa 22 22 Asia-Pacific 11 11 $ 3,397 $ 2,387 Income from operations: United States and Latin America $ 6,463 $ 5,599 Canada 7,268 9,119 Europe, Middle East and Africa 343 605 Asia-Pacific 1,214 1,737 Unallocated: Stock compensation (1,065) (1,238) Public company costs (488) (408) $ 13,735 $ 15,414 |
Schedule of Reconciliation of Income from Operations | The following table presents a reconciliation of Income from operations to Income before provision for income taxes: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Income from operations $ 13,735 $ 15,414 Other income/(expenses): Interest expense, net (2,847) (1,584) Other income/(expense) 143 341 Income before provision for income taxes $ 11,031 $ 14,171 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | $ 50,641 | $ 50,431 | $ 36,029 | $ 38,520 |
Cash and cash equivalents | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | 49,083 | 48,631 | ||
Restricted cash included in 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 statements of cash flows | $ 1,558 | $ 1,800 |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) - Vapor Power - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jan. 02, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | |||||
Equity interests acquired | 100% | ||||
Initial purchase price | $ 107,523 | ||||
Cash acquired from acquisition | 7,051 | ||||
Cash paid for acquisition, net of cash acquired | $ 100,472 | ||||
Acquisition costs | $ 1,527 | ||||
Intangible assets | $ 44,521 | ||||
Acquisition and other related costs | $ 250 | $ 217 |
Acquisition - Purchase Price (D
Acquisition - Purchase Price (Details) - USD ($) $ in Thousands | Jan. 02, 2024 | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 269,415 | $ 270,786 | ||
Vapor Power | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 7,051 | |||
Accounts receivable | 8,683 | |||
Inventories | 8,254 | |||
Other current assets | 1,693 | |||
Property, plant and equipment | 2,576 | |||
Operating lease right-of-use assets | 2,700 | |||
Intangible assets | $ 44,521 | |||
Goodwill | 51,750 | |||
Total fair value of assets acquired | 127,228 | |||
Current liabilities | (17,156) | |||
Operating lease liability | (2,549) | |||
Total fair value of liabilities acquired | (19,705) | |||
Total purchase price | 107,523 | |||
Vapor Power | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 22,953 | |||
Vapor Power | Customer relationships | Minimum | ||||
Business Acquisition [Line Items] | ||||
Amortization period | 2 years | |||
Vapor Power | Customer relationships | Maximum | ||||
Business Acquisition [Line Items] | ||||
Amortization period | 15 years | |||
Vapor Power | Backlog | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 4,407 | |||
Amortization period | 2 years | |||
Vapor Power | Trademarks | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 7,879 | |||
Amortization period | 10 years | |||
Vapor Power | Developed technology | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 13,689 | |||
Amortization period | 15 years |
Acquisition - Pro Forma Informa
Acquisition - Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | ||
Sales | $ 115,126 | $ 115,859 |
Net income | $ 8,631 | $ 11,347 |
Fair Value Measurements - Infor
Fair Value Measurements - Information About Our Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
Financial Assets: | ||
Deferred compensation plan assets, Carrying Value | $ 8,553 | $ 8,384 |
Financial Liabilities: | ||
Deferred compensation plan liabilities, Carrying Value | 7,754 | 7,574 |
Foreign currency contract forwards liabilities, Carrying Value | 2 | 23 |
Foreign Exchange Forward Contracts | ||
Financial Assets: | ||
Foreign currency contract forwards assets, Carrying Value | 0 | 7 |
Level 1 - Active Markets | ||
Financial Assets: | ||
Deferred compensation plan assets, Fair Value | 8,553 | 8,384 |
Financial Liabilities: | ||
Deferred compensation plan liabilities, Fair Value | 7,754 | 7,574 |
Level 2 - Market Approach | ||
Financial Liabilities: | ||
Foreign currency contract forwards liabilities, Fair Value | 2 | 23 |
Level 2 - Market Approach | Foreign Exchange Forward Contracts | ||
Financial Assets: | ||
Foreign currency contract forwards assets, Fair Value | 0 | 7 |
Loans Payable | Outstanding borrowings from revolving line of credit | ||
Financial Liabilities: | ||
Long-term debt, Carrying Value | 5,000 | 5,000 |
Loans Payable | Level 2 - Market Approach | Outstanding borrowings from revolving line of credit | ||
Financial Liabilities: | ||
Long-term debt, Fair Value | 5,000 | 5,000 |
Outstanding principal amount of senior secured credit facility | ||
Financial Liabilities: | ||
Long-term debt, Carrying Value | 164,125 | 167,500 |
Outstanding principal amount of senior secured credit facility | Level 2 - Market Approach | ||
Financial Liabilities: | ||
Long-term debt, Fair Value | $ 163,304 | $ 167,081 |
Fair Value Measurements - Defer
Fair Value Measurements - Deferred Compensation Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |||
Deferred compensation plan assets | $ 8,553 | $ 8,384 | |
Deferred compensation other noncurrent liability | 7,754 | $ 7,574 | |
Deferred compensation plan expense/(income) | 103 | $ 273 | |
Unrealized (gain) and losses on investments | $ (93) | $ (283) |
Fair Value Measurements - Forei
Fair Value Measurements - Foreign Exchange Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | ||
Maximum term of forward contracts | 30 days | |
Gain (loss) on derivatives, net | $ (88) | $ 173 |
Net foreign currency gain | $ 28 | $ 25 |
Fair Value Measurements - For_2
Fair Value Measurements - Foreign Exchange Contracts by Currency (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
Foreign Exchange Forward Contracts | ||
Derivative [Line Items] | ||
Total notional amounts | $ 1,700 | $ 7,000 |
Canadian Dollar | ||
Derivative [Line Items] | ||
Total notional amounts | 1,000 | 2,500 |
Mexican Peso | ||
Derivative [Line Items] | ||
Total notional amounts | 0 | 3,000 |
Australian Dollar | ||
Derivative [Line Items] | ||
Total notional amounts | 0 | 500 |
British Pound Sterling | ||
Derivative [Line Items] | ||
Total notional amounts | $ 700 | $ 1,000 |
Restructuring and Other Charg_3
Restructuring and Other Charges/(Income) - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2024 USD ($) | Apr. 08, 2024 USD ($) employee | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges/(income) | $ 2,109 | $ 581 | ||
Russia | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges/(income) | $ 581 | |||
Reduction-In-Force Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, number of employees affected | employee | 68 | |||
Expected cost remaining | $ 2,109 |
Restructuring and Other Charg_4
Restructuring and Other Charges/(Income) - Restructuring Costs by Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 2,109 | $ 581 |
United States and Latin America | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 715 | 0 |
Canada | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 1,394 | 0 |
Europe, Middle East and Africa | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 0 | 581 |
Asia-Pacific | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 0 | $ 0 |
Net Income per Common Share (De
Net Income per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Basic net income per common share | ||
Net income | $ 8,511 | $ 10,938 |
Weighted-average common shares outstanding (in shares) | 33,756,172 | 33,566,732 |
Basic net income per common share (in dollars per share) | $ 0.25 | $ 0.33 |
Diluted net income per common share | ||
Net income | $ 8,511 | $ 10,938 |
Weighted-average common shares outstanding (in shares) | 33,756,172 | 33,566,732 |
Weighted average shares outstanding – dilutive (in shares) | 34,075,020 | 33,862,939 |
Diluted net income per common share (in dollars per share) | $ 0.25 | $ 0.32 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 45,679 | 0 |
Stock options | ||
Diluted net income per common share | ||
Stock options, Restricted, and performance stock units issued (in shares) | 36,453 | 21,664 |
Restricted and performance stock units | ||
Diluted net income per common share | ||
Stock options, Restricted, and performance stock units issued (in shares) | 282,395 | 274,543 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 62,008 | $ 58,197 |
Work in process | 5,871 | 5,339 |
Finished goods | 26,135 | 26,552 |
Inventories, gross | 94,014 | 90,088 |
Valuation reserves | (4,094) | (3,767) |
Inventories, net | $ 89,920 | $ 86,321 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2024 USD ($) | |
Goodwill | |
Balance at the beginning of the period | $ 270,786 |
Foreign currency translation impact | (1,371) |
Balance at the end of the period | 269,415 |
United States and Latin America | |
Goodwill | |
Balance at the beginning of the period | 133,095 |
Foreign currency translation impact | 0 |
Balance at the end of the period | 133,095 |
Canada | |
Goodwill | |
Balance at the beginning of the period | 112,846 |
Foreign currency translation impact | (1,112) |
Balance at the end of the period | 111,734 |
Europe, Middle East and Africa | |
Goodwill | |
Balance at the beginning of the period | 18,532 |
Foreign currency translation impact | (132) |
Balance at the end of the period | 18,400 |
Asia-Pacific | |
Goodwill | |
Balance at the beginning of the period | 6,313 |
Foreign currency translation impact | (127) |
Balance at the end of the period | $ 6,186 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | $ (157,228) | $ (154,656) |
Indefinite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 280,389 | 281,748 |
Finite-lived intangible assets, accumulated amortization | (157,228) | (154,656) |
Total | 123,161 | 127,092 |
Certifications | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 426 | 429 |
Products | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 60,899 | 61,505 |
Finite-lived intangible assets, accumulated amortization | (40,599) | (39,466) |
Finite-lived intangible assets, net carrying amount | 20,300 | 22,039 |
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | (40,599) | (39,466) |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 53,922 | 54,158 |
Finite-lived intangible assets, accumulated amortization | (2,934) | (2,650) |
Finite-lived intangible assets, net carrying amount | 50,988 | 51,508 |
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | (2,934) | (2,650) |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 28,234 | 28,288 |
Finite-lived intangible assets, accumulated amortization | (7,760) | (7,372) |
Finite-lived intangible assets, net carrying amount | 20,474 | 20,916 |
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | (7,760) | (7,372) |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 135,628 | 136,088 |
Finite-lived intangible assets, accumulated amortization | (105,402) | (104,699) |
Finite-lived intangible assets, net carrying amount | 30,226 | 31,389 |
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | (105,402) | (104,699) |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 1,280 | 1,280 |
Finite-lived intangible assets, accumulated amortization | (533) | (469) |
Finite-lived intangible assets, net carrying amount | 747 | 811 |
Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | $ (533) | $ (469) |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
Schedule of Accrued Liabilities [Line Items] | ||
Accrued employee compensation and related expenses | $ 14,335 | $ 17,319 |
Accrued interest | 908 | 494 |
Warranty reserves | 2,779 | 978 |
Professional fees | 2,934 | 2,912 |
Sales taxes payable | 3,079 | 3,564 |
Accrued litigation payable | 971 | 1,356 |
Other | 4,185 | 5,001 |
Total accrued current liabilities | 29,191 | 31,624 |
United States and Latin America | ||
Schedule of Accrued Liabilities [Line Items] | ||
Other | $ 1,996 | $ 1,996 |
Debt - Long-Term Debt (Details)
Debt - Long-Term Debt (Details) $ in Thousands | Jun. 30, 2024 USD ($) | Mar. 31, 2024 USD ($) | Sep. 29, 2021 |
Debt Instrument [Line Items] | |||
Less current portion | $ (15,750) | $ (14,625) | |
Total long-term debt | $ 147,569 | 151,957 | |
Covenant leverage ratio, maximum | 0.50 | ||
January 1, 2023 through October 1, 2024 | Line of Credit | |||
Debt Instrument [Line Items] | |||
Original principal amount | 1.88% | ||
January 1, 2025 through July 1, 2026 | Line of Credit | |||
Debt Instrument [Line Items] | |||
Original principal amount | 2.50% | ||
December 31, 2022 and each fiscal quarter thereafter | |||
Debt Instrument [Line Items] | |||
Consolidated leverage ratio | 3.50 | ||
U S Term Loan Facility due September 2026 | Outstanding principal amount of senior secured credit facility | |||
Debt Instrument [Line Items] | |||
Deferred debt issuance costs | $ 200 | 226 | |
Variable/incremental rate term loan, net of deferred debt issuance costs | 65,800 | 67,274 | |
Increamental Rate Term Loan due September 2026 | Outstanding principal amount of senior secured credit facility | |||
Debt Instrument [Line Items] | |||
Deferred debt issuance costs | 606 | 692 | |
Variable/incremental rate term loan, net of deferred debt issuance costs | $ 97,519 | $ 99,308 |
Debt - Narrative (Details)
Debt - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2024 USD ($) | Dec. 29, 2023 USD ($) | Sep. 29, 2021 USD ($) | Sep. 29, 2021 CAD ($) | |
Debt Instrument [Line Items] | ||||
Line of credit facility, fixed charge coverage ratio | 1.25 | |||
Outstanding letters of credit | $ 2,260,000 | |||
Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Long-term line of credit | 5,000,000 | |||
Capacity available under credit facility | $ 92,740,000 | |||
Variable term loan, interest rate | 6.69% | |||
2023 Incremental U.S. Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Variable term loan, interest rate | 7.05% | |||
2023 Incremental U.S. Term Loan Facility | Guarantor Subsidiaries | ||||
Debt Instrument [Line Items] | ||||
Capital stock first lien assets, percentage | 100% | |||
Capital stock first tier material foreign subsidiaries, percentage | 65% | |||
Canadian Term Loan Facility | Guarantor Subsidiaries | ||||
Debt Instrument [Line Items] | ||||
Capital stock first lien assets, percentage | 100% | |||
U.S. Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Variable term loan, interest rate | 6.68% | |||
Loans Payable | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | |||
Long-term debt, term | 5 years | 5 years | ||
Secured Debt | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, term | 5 years | 5 years | ||
Long-term line of credit | $ 76,182 | |||
Secured Debt | 2023 Incremental U.S. Term Loan Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, term | 5 years | 5 years | ||
Long-term line of credit | $ 80,000,000 | |||
Line of credit facility, accordion feature, limit increase | $ 100,000,000 | |||
Debt Instrument, face amount | $ 100,000,000 | |||
Secured term loan pricing increase | 0.375% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Totaled arrangements under letter of credit guarantees and performance bonds securing performance obligations | $ 11,033 |
Guarantee obligations secured by cash deposits | 562 |
Guarantee obligations represented by a reduction of the available amount of the company's short term and long term revolving lines of credit | 2,260 |
Indian custom bonds outstanding | $ 4,353 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 115,126 | $ 106,889 |
Revenues recognized at point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 76,766 | 65,145 |
Revenues recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 38,360 | 41,744 |
United States and Latin America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 59,984 | 53,497 |
United States and Latin America | Revenues recognized at point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 44,408 | 29,891 |
United States and Latin America | Revenues recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 15,576 | 23,606 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 38,345 | 35,323 |
Canada | Revenues recognized at point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 21,608 | 24,522 |
Canada | Revenues recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 16,737 | 10,801 |
Europe, Middle East and Africa | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 7,842 | 9,681 |
Europe, Middle East and Africa | Revenues recognized at point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 4,613 | 5,393 |
Europe, Middle East and Africa | Revenues recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,229 | 4,288 |
Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 8,955 | 8,388 |
Asia-Pacific | Revenues recognized at point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 6,137 | 5,339 |
Asia-Pacific | Revenues recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 2,818 | $ 3,049 |
Revenue - Performance Obligatio
Revenue - Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01 $ in Thousands | Jun. 30, 2024 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, period | 1 year |
Remaining performance obligation | $ 8,363 |
Revenue - Contract Assets and L
Revenue - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 14,735 | $ 16,690 |
Contract liabilities | $ 15,278 | $ 20,531 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 22.80% | 22.80% |
Liability for uncertain tax positions | $ 1,069 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Jun. 30, 2024 segment country | |
Segment Reporting [Abstract] | |
Number of reportable segments | segment | 4 |
Number of countries which entity operates | country | 4 |
Segment Information - Total Sal
Segment Information - Total Sales and Operating Income Classified by Major Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Sales by geographic area: | ||
Sales | $ 115,126 | $ 106,889 |
Depreciation | 2,166 | 2,052 |
Amortization of intangible assets | 3,397 | 2,387 |
Income from operations | 13,735 | 15,414 |
Operating Segments | ||
Sales by geographic area: | ||
Sales | 115,126 | 106,889 |
Intersegment Eliminations | ||
Sales by geographic area: | ||
Sales | 15,504 | 14,613 |
Segment Reconciling Items | ||
Sales by geographic area: | ||
Stock compensation | (1,065) | (1,238) |
Public company costs | (488) | (408) |
United States and Latin America | ||
Sales by geographic area: | ||
Depreciation | 1,236 | 1,056 |
Amortization of intangible assets | 1,653 | 611 |
Income from operations | 6,463 | 5,599 |
United States and Latin America | Operating Segments | ||
Sales by geographic area: | ||
Sales | 59,984 | 53,497 |
United States and Latin America | Intersegment Eliminations | ||
Sales by geographic area: | ||
Sales | 11,108 | 8,381 |
Canada | ||
Sales by geographic area: | ||
Depreciation | 833 | 911 |
Amortization of intangible assets | 1,711 | 1,743 |
Income from operations | 7,268 | 9,119 |
Canada | Operating Segments | ||
Sales by geographic area: | ||
Sales | 38,345 | 35,323 |
Canada | Intersegment Eliminations | ||
Sales by geographic area: | ||
Sales | 3,548 | 4,732 |
Europe, Middle East and Africa | ||
Sales by geographic area: | ||
Depreciation | 49 | 47 |
Amortization of intangible assets | 22 | 22 |
Income from operations | 343 | 605 |
Europe, Middle East and Africa | Operating Segments | ||
Sales by geographic area: | ||
Sales | 7,842 | 9,681 |
Europe, Middle East and Africa | Intersegment Eliminations | ||
Sales by geographic area: | ||
Sales | 417 | 389 |
Asia-Pacific | ||
Sales by geographic area: | ||
Depreciation | 48 | 38 |
Amortization of intangible assets | 11 | 11 |
Income from operations | 1,214 | 1,737 |
Asia-Pacific | Operating Segments | ||
Sales by geographic area: | ||
Sales | 8,955 | 8,388 |
Asia-Pacific | Intersegment Eliminations | ||
Sales by geographic area: | ||
Sales | $ 431 | $ 1,111 |
Segment Information - Schedule
Segment Information - Schedule of Reconciliation of Income from Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting [Abstract] | ||
Income from operations | $ 13,735 | $ 15,414 |
Interest expense, net | (2,847) | (1,584) |
Other income/(expense) | 143 | 341 |
Income before provision for income taxes | $ 11,031 | $ 14,171 |