Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2020 | Feb. 12, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MSN | |
Entity Registrant Name | EMERSON RADIO CORP | |
Entity Central Index Key | 0000032621 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Non-accelerated Filer | |
Title of 12(b) Security | Common Stock, par value $.01 per share | |
Security Exchange Name | NYSEAMER | |
Entity Incorporation, State or Country Code | DE | |
Entity Current Reporting Status | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 21,042,652 | |
Entity Shell Company | false | |
Entity File Number | 001-07731 | |
Entity Tax Identification Number | 22-3285224 | |
Entity Address, Address Line One | 35 Waterview Blvd. | |
Entity Address, Address Line Two | Suite 140 | |
Entity Address, City or Town | Parsippany | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07054 | |
City Area Code | 973 | |
Local Phone Number | 428-2000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net revenues: | ||||
Net revenues | $ 2,333,000 | $ 2,094,000 | $ 5,898,000 | $ 5,142,000 |
Costs and expenses: | ||||
Cost of sales | 1,754,000 | 1,653,000 | 4,519,000 | 4,180,000 |
Selling, general and administrative expenses | 1,560,000 | 1,604,000 | 4,601,000 | 4,432,000 |
Total costs and expenses | 3,314,000 | 3,257,000 | 9,120,000 | 8,612,000 |
Operating loss | (981,000) | (1,163,000) | (3,222,000) | (3,470,000) |
Other income: | ||||
Interest income, net | 18,000 | 179,000 | 128,000 | 638,000 |
Income from governmental assistance programs | 28,000 | 83,000 | ||
Loss before income taxes | (935,000) | (984,000) | (3,011,000) | (2,832,000) |
Provision for income tax expense | 10,000 | 4,000 | 15,000 | 19,000 |
Net loss | $ (945,000) | $ (988,000) | $ (3,026,000) | $ (2,851,000) |
Basic loss per share | $ (0.04) | $ (0.05) | $ (0.14) | $ (0.14) |
Diluted loss per share | $ (0.04) | $ (0.05) | $ (0.14) | $ (0.14) |
Weighted average shares outstanding | ||||
Basic | 21,043 | 21,043 | 21,043 | 21,043 |
Diluted | 21,043 | 21,043 | 21,043 | 21,043 |
Net Product Sales | ||||
Net revenues: | ||||
Net revenues | $ 2,273,000 | $ 2,038,000 | $ 5,718,000 | $ 4,975,000 |
Licensing Revenue | ||||
Net revenues: | ||||
Net revenues | $ 60,000 | $ 56,000 | $ 180,000 | $ 167,000 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Dec. 31, 2020 | Mar. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 30,513,000 | $ 6,276,000 |
Short term investments | 0 | 28,101,000 |
Accounts receivable, net | 1,465,000 | 484,000 |
Inventory | 1,876,000 | 1,918,000 |
Prepaid purchases | 509,000 | 250,000 |
Prepaid expenses and other current assets | 384,000 | 327,000 |
Total Current Assets | 34,747,000 | 37,356,000 |
Non-Current Assets: | ||
Property and equipment, net | 2,000 | 4,000 |
Right-of-use asset-operating leases | 272,000 | 442,000 |
Right-of-use asset-finance leases | 4,000 | 5,000 |
Other assets | 94,000 | 94,000 |
Total Non-Current Assets | 372,000 | 545,000 |
Total Assets | 35,119,000 | 37,901,000 |
Current Liabilities: | ||
Accounts payable and other current liabilities | 928,000 | 592,000 |
Paycheck Protection Program loan | 204,000 | |
Due to affiliate | 1,000 | |
Short-term operating lease liability | 191,000 | 241,000 |
Short-term finance lease liability | 1,000 | 1,000 |
Income tax payable, current portion | 195,000 | 195,000 |
Deferred revenue | 260,000 | 180,000 |
Total Current Liabilities | 1,780,000 | 1,209,000 |
Non-Current Liabilities: | ||
Long-term operating lease liability | 105,000 | 234,000 |
Long-term finance lease liability | 3,000 | 4,000 |
Income tax payable | 1,836,000 | 2,033,000 |
Total Non-Current Liabilities | 1,944,000 | 2,271,000 |
Total Liabilities | 3,724,000 | 3,480,000 |
Shareholders’ Equity: | ||
Series A Preferred shares — 10,000,000 shares authorized; 3,677 shares issued and outstanding; liquidation preference of $3,677,000 | 3,310,000 | 3,310,000 |
Common shares — $0.01 par value, 75,000,000 shares authorized; 52,965,797 shares issued at December 31, 2020 and March 31, 2020, respectively; 21,042,652 shares outstanding at December 31, 2020 and March 31, 2020, respectively | 529,000 | 529,000 |
Additional paid-in capital | 79,792,000 | 79,792,000 |
Accumulated deficit | (19,035,000) | (16,009,000) |
Treasury stock, at cost (31,923,145 shares at December 31, 2020 and March 31, 2020, respectively) | (33,201,000) | (33,201,000) |
Total Shareholders’ Equity | 31,395,000 | 34,421,000 |
Total Liabilities and Shareholders’ Equity | $ 35,119,000 | $ 37,901,000 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Dec. 31, 2020 | Mar. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Preferred shares, shares authorized | 10,000,000 | 10,000,000 |
Preferred shares, shares issued | 3,677 | 3,677 |
Preferred shares, shares outstanding | 3,677 | 3,677 |
Preferred shares, liquidation preference | $ 3,677,000 | $ 3,677,000 |
Common shares, par value | $ 0.01 | $ 0.01 |
Common shares, shares authorized | 75,000,000 | 75,000,000 |
Common shares, shares issued | 52,965,797 | 52,965,797 |
Common shares, shares outstanding | 21,042,652 | 21,042,652 |
Treasury stock, shares | 31,923,145 | 31,923,145 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows from Operating Activities: | ||
Net (loss) | $ (3,026) | $ (2,851) |
Adjustments to reconcile net loss to net cash (used) by operating activities: | ||
Amortization of right-of-use assets | 171 | 36 |
Depreciation and amortization | 2 | 1 |
Deferred tax assets | 11 | |
Asset allowances and reserves | 13 | 18 |
Changes in assets and liabilities: | ||
Accounts receivable | (994) | (276) |
Inventory | 42 | 933 |
Prepaid purchases | (259) | 328 |
Prepaid expenses and other current assets | (57) | 8 |
Other assets | 60 | |
Accounts payable and other current liabilities | 336 | 266 |
Short term lease liabilities | (50) | |
Long term lease liabilities | (130) | |
Due to affiliate | 1 | |
Income taxes payable | (197) | (195) |
Deferred revenue | 80 | (165) |
Net cash (used) by operating activities | (4,068) | (1,826) |
Cash Flows From Investing Activities: | ||
Proceeds from sale of short-term investments | 28,101 | 1,850 |
Purchases of short-term investments | (1,443) | |
Net cash provided by investing activities | 28,101 | 407 |
Cash Flows from Financing Activities: | ||
Proceeds from Paycheck Protection Program loan | 204 | |
Net cash provided by financing activities | 204 | |
Net increase (decrease) in cash and cash equivalents | 24,237 | (1,419) |
Cash and cash equivalents at beginning of the year | 6,276 | 7,917 |
Cash and cash equivalents at end of the year | 30,513 | 6,498 |
Cash paid for: | ||
Interest | 6 | |
Income taxes | $ 197 | $ 199 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock |
Balance at Mar. 31, 2019 | $ 38,728 | $ 3,310 | $ 529 | $ 79,792 | $ (11,702) | $ (33,201) |
Balance (in shares) at Mar. 31, 2019 | 52,965,797 | |||||
Net loss | (2,851) | (2,851) | ||||
Balance at Dec. 31, 2019 | 35,877 | 3,310 | $ 529 | 79,792 | (14,553) | (33,201) |
Balance (in shares) at Dec. 31, 2019 | 52,965,797 | |||||
Balance at Mar. 31, 2020 | $ 34,421 | 3,310 | $ 529 | 79,792 | (16,009) | (33,201) |
Balance (in shares) at Mar. 31, 2020 | 52,965,797 | 52,965,797 | ||||
Net loss | $ (3,026) | (3,026) | ||||
Balance at Dec. 31, 2020 | $ 31,395 | $ 3,310 | $ 529 | $ 79,792 | $ (19,035) | $ (33,201) |
Balance (in shares) at Dec. 31, 2020 | 52,965,797 | 52,965,797 |
Background and Basis of Present
Background and Basis of Presentation | 9 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Background and Basis of Presentation | NOTE 1 — BACKGROUND AND BASIS OF PRESENTATION The consolidated financial statements include the accounts of Emerson Radio Corp. and its subsidiaries (“Emerson” or the “Company”). The Company designs, sources, imports and markets certain houseware and consumer electronic products, and licenses the Company’s trademarks for a variety of products. The unaudited interim consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the Company’s consolidated financial position as of December 31, 2020 and the results of operations for the three and nine month periods ended December 31, 2020 and December 31, 2019. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the financial statements not misleading have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. The preparation of the unaudited interim consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes; actual results could materially differ from those estimates. The unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and accordingly do not include all of the disclosures normally made in the Company’s annual consolidated financial statements. Accordingly, these unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended March 31, 2020 (“fiscal 2020”), included in the Company’s annual report on Form 10-K, as amended, for fiscal 2020. The results of operations for the three and nine month periods ended December 31, 2020 are not necessarily indicative of the results of operations that may be expected for any other interim periods or for the full year ending March 31, 2021 (“fiscal 2021”). Whenever necessary, reclassifications are made to conform the prior year’s consolidated financial statements to the current year’s presentation. Revised Financial Statements Cost of sales includes actual product cost, quality control costs, change in inventory reserves, duty, buying costs, the cost of transportation to the Company’s third party logistics providers’ warehouse from its manufacturers and warehousing costs. The Company is no longer including an allocation of those selling, general and administrative expenses that are directly related to these activities in Cost of Sales. The Company reclassified approximately $452,000 for the quarter ended December 31, 2019 and $1,224,000 for the nine months ended December 31, 2019 on its Consolidated Statements of Operations, from Cost of Sales to Selling, General and Administrative expenses to conform to its current presentation. The reclassifications were made to more accurately present the relationship between the Company’s net product sales and its cost of sales. The reclassification had no impact on the Company’s previously reported operating losses or net losses, for either the quarter ended or nine months ended December 31, 2019. Recently Issued Accounting Pronouncements The following Accounting Standards Updates (“ASUs”) were issued by the Financial Accounting Standards Board (“FASB”) which relate to or could relate to the Company as concerns the Company’s normal ongoing operations or the industry in which the Company operates. Accounting Standards Update 2019-12 “Income Taxes (Topic 740) In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. This standard is required to take effect in the Company’s first quarter (June 2021) of the Company’s fiscal year ending March 31, 2022. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements and related disclosures. Accounting Standards Update 2016-13 “Financial Instruments – Credit Losses” (Issued June 2016) In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses” to introduce new guidance for the accounting for credit losses on instruments within its scope. ASU 2016-13 requires among other things, the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for fiscal years and interim periods beginning after December 15, 2022. Early adoption is permitted. The Company does not expect these amendments to have a material impact on its financial statements. Revenue recognition : Sales to customers and related cost of sales are primarily recognized at the point in time when control of goods transfers to the customer. Under the Direct Import Program, title passes in the country of origin. Under the Domestic Program, title passes primarily at the time of shipment. Estimates for future expected returns are based upon historical return rates and netted against revenues. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. Revenue is recorded net of customer discounts, promotional allowances, volume rebates and similar charges. When the Company offers the right to return product, historical experience is utilized to establish a liability for the estimate of expected returns. Sales and other tax amounts collected from customers for remittance to governmental authorities are excluded from revenue. Management must make estimates of potential future product returns related to current period product revenue. Management analyzes historical returns, current economic trends and changes in customer demand for the Company’s products when evaluating the adequacy of the reserve for sales returns. Management judgments and estimates must be made and used in connection with establishing the sales return reserves in any accounting period. Additional reserves may be required if actual sales returns increase above the historical return rates. Conversely, the sales return reserve could be decreased if the actual return rates are less than the historical return rates, which were used to establish the reserve. If additional marketing support programs, promotions and other volume-based incentives are required to promote the Company’s products subsequent to the initial sale, then additional reserves may be required and are accrued for when such support is offered. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 2 — EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts). Weighted average shares includes the impact of shares held in treasury. Three Months Ended December 31, Nine Months Ended December 31, 2020 2019 2020 2019 Numerator: Net loss $ (945 ) $ (988 ) $ (3,026 ) $ (2,851 ) Denominator: Denominator for basic and diluted loss per share — weighted average shares 21,043 21,043 21,043 21,043 Net loss per share: Basic and diluted loss per share $ (0.04 ) $ (0.05 ) $ (0.14 ) $ (0.14 ) |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | NOTE 3 — SHAREHOLDERS’ EQUITY Outstanding capital stock at December 31, 2020 consisted of common stock and Series A preferred stock. The Series A preferred stock is non-voting, has no dividend preferences and has not been convertible since March 31, 2002; however, it retains a liquidation preference. At December 31, 2020, the Company had no options, warrants or other potentially dilutive securities outstanding. |
Inventory
Inventory | 9 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | NOTE 4 — INVENTORY Inventories, which consist primarily of finished goods, are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. As of December 31, 2020 and March 31, 2020, inventories consisted of the following (in thousands): December March Finished goods $ 1,876 $ 1,918 |
Income Taxes
Income Taxes | 9 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 5 — INCOME TAXES At December 31, 2020, the Company had $10.6 million of U.S. federal net operating loss (“NOL”) carry forwards. These losses do not expire but are limited to utilization of 80% of taxable income in any one year. At December 31, 2020, the Company had approximately $18.5 million of U.S. state NOL carry forwards. The tax benefits related to these state NOL carry forwards and future deductible temporary differences are recorded to the extent management believes it is more likely than not that such benefits will be realized. The income of foreign subsidiaries before taxes was $103,000 for the nine months ended December 31, 2020 as compared to income before taxes of $393,000 for the nine months ended December 31, 2019. The Company analyzed the future reasonability of recognizing its deferred tax assets at December 31, 2020. As a result, the Company concluded that a 100% valuation allowance of approximately $3,700,000 would be recorded against the assets During the three months ended December 31, 2020, the Company recorded income tax expense of approximately $10,000. During the three months ended December 31, 2019, the Company recorded income tax expense of approximately $4,000, primarily resulting from state income taxes. During the nine months ended December 31, 2020, the Company recorded income tax expense of $15,000 and for the nine months ended December 31, 2019, the Company recorded income tax expense of $19,000. The Company is subject to examination and assessment by tax authorities in numerous jurisdictions. As of December 31, 2020, the Company’s open tax years for examination for U.S. federal tax are 2016-2019, and for U.S. states’ tax are 2015-2019. Based on the outcome of tax examinations or due to the expiration of statutes of limitations, it is reasonably possible that the unrecognized tax benefits related to uncertain tax positions taken in previously filed returns may be different from the liabilities that have been recorded for these unrecognized tax benefits. As a result, the Company may be subject to additional tax expense. As of December 31, 2020 the Company had a federal tax liability of approximately $2,031,000 related to the repatriation of the Company’s undistributed earnings of its foreign subsidiaries . As of December 31, 2020, the short term portion was approximately $195,000 and the long term portion was approximately $1,836,000. As of March 31, 2020, the short term portion was approximately $195,000 and the long term portion was approximately $2,033,000.The liability is payable over 8 years. The first five installments are each 8% |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 6 — RELATED PARTY TRANSACTIONS From time to time, Emerson engages in business transactions with its controlling shareholder, Nimble Holdings Company Limited (“Nimble”), formerly known as The Grande Holdings Limited (“Grande”), and one or more of Nimble’s direct and indirect subsidiaries, or with entities related to the Company’s Chairman of the Board. Controlling Shareholder S&T International Distribution Limited (“S&T”), which is a wholly owned subsidiary of Grande N.A.K.S. Ltd., which is a wholly owned subsidiary of Nimble, collectively have, based on a Schedule 13D/A filed with the SEC on February 15, 2019, the shared power to vote and direct the disposition of 15,243,283 shares, or approximately 72.4%, of the Company’s outstanding common stock as of December 31, 2020. Accordingly, the Company is a “controlled company” as defined in Section 801(a) of the NYSE American Company Guide. Charges of rental and utility fees on office space in Hong Kong During the three and nine months ended December 31, 2020, the Company was billed approximately $43,000 and $129,000, respectively, for rental and utility fees from Vigers Appraisal and Consulting Ltd (“VACL”), which is a company related to the Company’s Chairman of the Board. During the three and nine months ended December 31, 2020, the Company was billed approximately $1,400 and $4,000, respectively, for purchases of personal protection equipment from Lafe Strategic Services Ltd (“LSSL”), which is a company related to the Company’s Chairman of the Board. As of December 31, 2020 the Company owed $1,400 to LSSL related to these charges. |
Short Term Investments
Short Term Investments | 9 Months Ended |
Dec. 31, 2020 | |
Short Term Investments [Abstract] | |
Short Term Investments | NOTE 7 — SHORT TERM INVESTMENTS At December 31, 2020 and March 31, 2020, the Company held short term investments totaling nil and $28.1 million, respectively. The Company held short term investments at the beginning of the quarter totaling $25 million which matured on December 9, 2020. Upon maturity, the proceeds were re-invested in deposits with terms of 90 days or less which are classified as cash and cash equivalents on the Company’s consolidated balance sheet. |
Concentration Risk
Concentration Risk | 9 Months Ended |
Dec. 31, 2020 | |
Risks And Uncertainties [Abstract] | |
Concentration Risk | NOTE 8 — CONCENTRATION RISK Customer Concentration For the three months ended December 31, 2020, the Company’s three largest customers accounted for approximately 88% of the Company’s net revenues, of which Walmart accounted for 42%, Amazon accounted for 39% and Fred Meyer accounted for 7%. For the nine months ended December 31, 2020, the Company’s three largest customers accounted for approximately 81% of the Company’s net revenues, of which Walmart accounted for 39%, Amazon accounted for 29% and Fred Meyer accounted for 13%. For the three months ended December 31, 2019, the Company’s three largest customers accounted for approximately 88% of the Company’s net revenues, of which Walmart accounted for 45%, Amazon accounted for 30% and Fred Meyer accounted for 13%. For the nine months ended December 31, 2019, the Company’s three largest customers accounted for approximately 80% of the Company’s net revenues, of which Walmart accounted for 44%, Amazon accounted for 24% and Fred Meyer accounted for 12%. A significant decline in net sales to any of the Company’s key customers would have a material adverse effect on the Company’s business, financial condition and results of operation. Product Concentration For the three and nine months ended December 31, 2020, the Company’s gross product sales were comprised of two product types within two categories — housewares products and audio products, of which microwave ovens generated approximately 25% and 36%, respectively, of the Company’s gross product sales. Audio products generated approximately 73% and 62%, respectively, of the Company’s gross product sales. For the three and nine months ended December 31, 2019, the Company’s gross product sales were comprised of the same two product types within two categories — housewares products and audio products, of which microwave ovens generated approximately 28% and 36%, respectively, of the Company’s gross product sales. Audio products generated approximately 64% and 59%, respectively, of the Company’s gross product sales. Concentrations of Credit Risk As a percent of the Company’s total trade accounts receivable, net of specific reserves, the Company’s top two customers accounted for 51% and 36% as of December 31, 2020, respectively. As a percent of the Company’s total trade accounts receivable, net of specific reserves, the Company’s top two customers accounted for 45% and 45% as of March 31, 2020, respectively. The Company periodically performs credit evaluations of its customers but generally does not require collateral, and the Company provides for any anticipated credit losses in the financial statements based upon management’s estimates and ongoing reviews of recorded allowances. Due to the high concentration of the Company’s net trade accounts receivables among just two customers, any significant failure by one of these customers to pay the Company the amounts owing against these receivables would result in a material adverse effect on the Company’s business, financial condition and results of operations. Supplier Concentration During the three and nine months ended December 31, 2020, the Company procured 95% and 98% of its products for resale from its two largest factory suppliers, of which 57% and 58%, respectively, was supplied by its largest supplier. During the three and nine months ended December 31, 2019, the Company procured approximately 90% and 86% of its products for resale from its two largest factory suppliers, of which 48% and 52%, respectively, was supplied by its largest supplier. |
Leases
Leases | 9 Months Ended |
Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Leases | NOTE 9 — LEASES The Company leases office space in the U.S. and in Hong Kong as well as a copier in the U.S. These leases have remaining non-cancellable lease terms of three to five years. The Company has elected not to separate lease and non-lease components for all leased assets. The Company did not identify any events or conditions during the quarter ended December 31, 2020 to indicate that a reassessment or re-measurement of the Company’s existing leases was required. There were also no impairment indicators identified during the quarter ended December 31, 2020 that required an impairment test for the Company’s right-of-use assets or other long-lived assets in accordance with ASC 360-10. As of December 31, 2020, the Company’s current operating and finance lease liabilities were $191,000 and $1,000, respectively and its non-current operating and finance lease liabilities were $105,000 and $3,000, respectively. The Company’s operating and finance lease right-of-use asset balances are presented in non-current assets. The net balance of the Company’s operating and finance lease right-of-use assets as of December 31, 2020 was $272,000 and $4,000, respectively. The components of lease costs, which were included in operating expenses in the Company’s condensed consolidated statements of operations, were as follows: Three Months Ended December 31, Nine Months Ended December 31, 2020 2019 2020 2019 (in thousands) (in thousands) Lease cost Operating lease cost $ 64 $ 63 $ 191 $ 190 Finance lease cost — — — — Amortization of right-of-use assets — — — — Interest on lease liabilities — — — — Variable lease costs — — — — Total lease cost 64 63 191 190 The supplemental cash flow information related to leases are as follows: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 67 66 200 197 Operating cash flows from finance leases — — — — Financing cash flows from finance leases — — — 1 Right-of-use assets obtained in exchange for lease obligations: Operating leases — — — 650 Finance leases — — — 5 Information relating to the lease term and discount rate are as follows: Weighted average remaining lease term (in months) As of December 31, 2020 As of December 31, 2019 Operating leases 19.0 28.6 Finance leases 41.2 53.2 Weighted average discount rate Operating leases 7.50 % 7.50 % Finance leases 7.50 % 7.50 % As of December 31, 2020 the maturities of lease liabilities were as follows: (in thousands) Operating Leases Finance Leases 2021 $ 67 $ 1 2022 162 1 2023 84 1 2024 — 1 2025 — — Thereafter — — Total lease payments $ 313 $ 4 Less: Imputed interest (17 ) — Total $ 296 $ 4 |
Paycheck Protection Program and
Paycheck Protection Program and Employment Support Scheme | 9 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Paycheck Protection Program and Employment Support Scheme | NOTE 10 — PAYCHECK PROTECTION PROGRAM AND EMPLOYMENT SUPPORT SCHEME In April and May of 2020, the Company applied for and received aggregate loan proceeds in the amount of approximately $204,000 under the Paycheck Protection Program (”PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. Under the CARES Act, loan forgiveness is available as long as the Company used the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintained its payroll levels during the eight-week period beginning on the date of the PPP loan approval. The Company used all of the PPP loan proceeds for qualifying expenses in accordance with terms of the CARES Act and intends to apply for forgiveness of the loan to the extent applicable, although there can be no assurance that such forgiveness will occur. Any unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the first six months. As of December 31, 2020, the Company’s PPP loan has accrued approximately $1,350 in unpaid interest. The Hong Kong government implemented a similar program called the Employment Support Scheme (“ESS”). It provided grants to companies who retained their employees during the COVID-19 outbreak. The Company’s Hong Kong subsidiary applied for and was granted approximately $28,000 during the quarter ended December 31, 2020 and $83,000 for the nine months ended December 31, 2020. The ESS subsidy is presented as other income in the consolidated statements of operations. |
Background and Basis of Prese_2
Background and Basis of Presentation (Policies) | 9 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Preparation of Financial Statements | The unaudited interim consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the Company’s consolidated financial position as of December 31, 2020 and the results of operations for the three and nine month periods ended December 31, 2020 and December 31, 2019. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the financial statements not misleading have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. The preparation of the unaudited interim consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes; actual results could materially differ from those estimates. The unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and accordingly do not include all of the disclosures normally made in the Company’s annual consolidated financial statements. Accordingly, these unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended March 31, 2020 (“fiscal 2020”), included in the Company’s annual report on Form 10-K, as amended, for fiscal 2020. |
Revised Financial Statements | Revised Financial Statements Cost of sales includes actual product cost, quality control costs, change in inventory reserves, duty, buying costs, the cost of transportation to the Company’s third party logistics providers’ warehouse from its manufacturers and warehousing costs. The Company is no longer including an allocation of those selling, general and administrative expenses that are directly related to these activities in Cost of Sales. The Company reclassified approximately $452,000 for the quarter ended December 31, 2019 and $1,224,000 for the nine months ended December 31, 2019 on its Consolidated Statements of Operations, from Cost of Sales to Selling, General and Administrative expenses to conform to its current presentation. The reclassifications were made to more accurately present the relationship between the Company’s net product sales and its cost of sales. The reclassification had no impact on the Company’s previously reported operating losses or net losses, for either the quarter ended or nine months ended December 31, 2019. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The following Accounting Standards Updates (“ASUs”) were issued by the Financial Accounting Standards Board (“FASB”) which relate to or could relate to the Company as concerns the Company’s normal ongoing operations or the industry in which the Company operates. Accounting Standards Update 2019-12 “Income Taxes (Topic 740) In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. This standard is required to take effect in the Company’s first quarter (June 2021) of the Company’s fiscal year ending March 31, 2022. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements and related disclosures. Accounting Standards Update 2016-13 “Financial Instruments – Credit Losses” (Issued June 2016) In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses” to introduce new guidance for the accounting for credit losses on instruments within its scope. ASU 2016-13 requires among other things, the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for fiscal years and interim periods beginning after December 15, 2022. Early adoption is permitted. The Company does not expect these amendments to have a material impact on its financial statements. |
Revenue Recognition | Revenue recognition : Sales to customers and related cost of sales are primarily recognized at the point in time when control of goods transfers to the customer. Under the Direct Import Program, title passes in the country of origin. Under the Domestic Program, title passes primarily at the time of shipment. Estimates for future expected returns are based upon historical return rates and netted against revenues. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. Revenue is recorded net of customer discounts, promotional allowances, volume rebates and similar charges. When the Company offers the right to return product, historical experience is utilized to establish a liability for the estimate of expected returns. Sales and other tax amounts collected from customers for remittance to governmental authorities are excluded from revenue. Management must make estimates of potential future product returns related to current period product revenue. Management analyzes historical returns, current economic trends and changes in customer demand for the Company’s products when evaluating the adequacy of the reserve for sales returns. Management judgments and estimates must be made and used in connection with establishing the sales return reserves in any accounting period. Additional reserves may be required if actual sales returns increase above the historical return rates. Conversely, the sales return reserve could be decreased if the actual return rates are less than the historical return rates, which were used to establish the reserve. If additional marketing support programs, promotions and other volume-based incentives are required to promote the Company’s products subsequent to the initial sale, then additional reserves may be required and are accrued for when such support is offered. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings per Share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts). Weighted average shares includes the impact of shares held in treasury. Three Months Ended December 31, Nine Months Ended December 31, 2020 2019 2020 2019 Numerator: Net loss $ (945 ) $ (988 ) $ (3,026 ) $ (2,851 ) Denominator: Denominator for basic and diluted loss per share — weighted average shares 21,043 21,043 21,043 21,043 Net loss per share: Basic and diluted loss per share $ (0.04 ) $ (0.05 ) $ (0.14 ) $ (0.14 ) |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | As of December 31, 2020 and March 31, 2020, inventories consisted of the following (in thousands): December March Finished goods $ 1,876 $ 1,918 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Summary of Components of Lease Costs | The components of lease costs, which were included in operating expenses in the Company’s condensed consolidated statements of operations, were as follows: Three Months Ended December 31, Nine Months Ended December 31, 2020 2019 2020 2019 (in thousands) (in thousands) Lease cost Operating lease cost $ 64 $ 63 $ 191 $ 190 Finance lease cost — — — — Amortization of right-of-use assets — — — — Interest on lease liabilities — — — — Variable lease costs — — — — Total lease cost 64 63 191 190 The supplemental cash flow information related to leases are as follows: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 67 66 200 197 Operating cash flows from finance leases — — — — Financing cash flows from finance leases — — — 1 Right-of-use assets obtained in exchange for lease obligations: Operating leases — — — 650 Finance leases — — — 5 |
Summary Of Information Relating To Lease Term And Discount Rate Table Text Block | Information relating to the lease term and discount rate are as follows: Weighted average remaining lease term (in months) As of December 31, 2020 As of December 31, 2019 Operating leases 19.0 28.6 Finance leases 41.2 53.2 Weighted average discount rate Operating leases 7.50 % 7.50 % Finance leases 7.50 % 7.50 % |
Summary of Maturities of Lease Liabilities | As of December 31, 2020 the maturities of lease liabilities were as follows: (in thousands) Operating Leases Finance Leases 2021 $ 67 $ 1 2022 162 1 2023 84 1 2024 — 1 2025 — — Thereafter — — Total lease payments $ 313 $ 4 Less: Imputed interest (17 ) — Total $ 296 $ 4 |
Background and Basis of Prese_3
Background and Basis of Presentation - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Reclassified cost and expenses amount | $ 452,000 | $ 1,224,000 |
Computation of Basic and Dilute
Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | ||||
Net loss | $ (945) | $ (988) | $ (3,026) | $ (2,851) |
Denominator: | ||||
Denominator for basic and diluted loss per share — weighted average shares | 21,043 | 21,043 | 21,043 | 21,043 |
Net loss per share: | ||||
Basic and diluted loss per share | $ (0.04) | $ (0.05) | $ (0.14) | $ (0.14) |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) | Dec. 31, 2020shares |
Stockholders Equity Note [Abstract] | |
Options outstanding | 0 |
Warrants outstanding | 0 |
Other potentially dilutive securities outstanding | 0 |
Inventory (Detail)
Inventory (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 1,876 | $ 1,918 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)installment | Dec. 31, 2019USD ($) | Mar. 31, 2020USD ($) | |
Schedule Of Income Taxes [Line Items] | ||||||
Income (loss) of foreign subsidiaries before taxes | $ 103,000 | $ 393,000 | ||||
Deferred tax valuation allowance against assets, Percent | 100.00% | |||||
Deferred tax valuation allowance against assets | $ 3,700,000 | $ 3,700,000 | ||||
Provision for income tax expense | 10,000 | $ 4,000 | 15,000 | $ 19,000 | ||
Federal tax liability | 2,031,000 | $ 2,031,000 | ||||
Federal tax liability payable period | 8 years | |||||
Federal tax liability, Current portion | 195,000,000 | $ 195,000,000 | $ 195,000,000 | |||
Federal tax liability, Non-current portion | 1,836,000,000 | $ 1,836,000,000 | $ 2,033,000,000 | |||
Percentage of federal tax liability payable in first five installments | 8.00% | |||||
Percentage of federal tax liability payable in sixth installment | 15.00% | |||||
Percentage of federal tax liability payable in seventh installment | 20.00% | |||||
Percentage of federal tax liability payable in final installment | 25.00% | |||||
Number of installments for federal tax liability payable | installment | 8 | |||||
Number of installments of federal tax liability paid | installment | 3 | |||||
U.S. federal | ||||||
Schedule Of Income Taxes [Line Items] | ||||||
Net operating loss carry forwards, amount | 10,600,000 | $ 10,600,000 | ||||
Operating loss carryovers, limitations on use | At December 31, 2020, the Company had $10.6 million of U.S. federal net operating loss (“NOL”) carry forwards. These losses do not expire but are limited to utilization of 80% of taxable income in any one year. | |||||
Percentage of NOLs utilization limit against taxable income | 80.00% | |||||
U.S. federal | Earliest Tax Year | ||||||
Schedule Of Income Taxes [Line Items] | ||||||
Open tax years | 2016 | |||||
U.S. federal | Latest Tax Year | ||||||
Schedule Of Income Taxes [Line Items] | ||||||
Open tax years | 2019 | |||||
States | ||||||
Schedule Of Income Taxes [Line Items] | ||||||
Net operating loss carry forwards, amount | $ 18,500,000 | $ 18,500,000 | ||||
States | Earliest Tax Year | ||||||
Schedule Of Income Taxes [Line Items] | ||||||
Open tax years | 2015 | |||||
States | Latest Tax Year | ||||||
Schedule Of Income Taxes [Line Items] | ||||||
Open tax years | 2019 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2020USD ($)shares | Dec. 31, 2020USD ($)shares | |
Nimble Holding Company Limited | ||
Related Party Transaction [Line Items] | ||
Nimble's Ownership Interest in Emerson number of shares | shares | 15,243,283 | 15,243,283 |
Nimble's Ownership Interest Percentage | 72.40% | 72.40% |
VACL | ||
Related Party Transaction [Line Items] | ||
Advanced payment of rental and utility fees from related parties | $ 43,000 | $ 129,000 |
Due from related parties | 0 | 0 |
LSSL | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 1,400 | 1,400 |
Air conditioning installation charges due | $ 1,400 | $ 4,000 |
Short Term Investments - Additi
Short Term Investments - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | ||
Dec. 31, 2020 | Oct. 01, 2020 | Mar. 31, 2020 | |
Schedule Of Investments [Line Items] | |||
Short term investments | $ 0 | $ 25,000 | $ 28,101 |
Short term investments, maturity date | Dec. 9, 2020 | ||
Maximum | |||
Schedule Of Investments [Line Items] | |||
Certificates of deposit re-invested term | 90 days |
Concentration Risk - Additional
Concentration Risk - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | |
Customer Concentration Risk | Net Revenues | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 88.00% | 88.00% | 81.00% | 80.00% | |
Customer Concentration Risk | Net Revenues | Walmart | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 42.00% | 45.00% | 39.00% | 44.00% | |
Customer Concentration Risk | Net Revenues | Amazon.com | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 7.00% | 30.00% | 29.00% | 24.00% | |
Customer Concentration Risk | Net Revenues | Fred Meyer | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 39.00% | 13.00% | 13.00% | 12.00% | |
Product Concentration Risk | Net Revenues | Microwave Ovens | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 25.00% | 28.00% | 36.00% | 36.00% | |
Product Concentration Risk | Net Revenues | Audio Products | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 73.00% | 64.00% | 62.00% | 59.00% | |
Credit Concentration Risk | Accounts Receivable | Customer One | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 51.00% | 45.00% | |||
Credit Concentration Risk | Accounts Receivable | Customer Two | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 36.00% | 45.00% | |||
Supplier Concentration Risk | Products for Resale | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 57.00% | 48.00% | 58.00% | 52.00% | |
Supplier Concentration Risk | Products for Resale | Two Largest Factory Suppliers | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 95.00% | 90.00% | 98.00% | 86.00% |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) | Dec. 31, 2020 | Mar. 31, 2020 |
Lessee Lease Description [Line Items] | ||
Operating lease, liabilities current | $ 191,000 | $ 241,000 |
Finance lease, liabilities current | 1,000 | 1,000 |
Operating lease, liabilities non-current | 105,000 | 234,000 |
Finance lease, liabilities, non-current | 3,000 | 4,000 |
Operating right-of-use assets | 272,000 | 442,000 |
Finance lease right-of-use assets | $ 4,000 | $ 5,000 |
Minimum [Member] | ||
Lessee Lease Description [Line Items] | ||
Non-cancellable lease terms | 3 years | |
Maximum | ||
Lessee Lease Description [Line Items] | ||
Non-cancellable lease terms | 5 years |
Leases - Summary of Components
Leases - Summary of Components of Lease Costs (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lease cost | ||||
Operating lease cost | $ 64 | $ 63 | $ 191 | $ 190 |
Finance lease cost | 0 | 0 | 0 | 0 |
Amortization of right-of-use assets | 0 | 0 | 0 | 0 |
Interest on lease liabilities | 0 | 0 | 0 | 0 |
Variable lease costs | 0 | 0 | 0 | 0 |
Total lease cost | 64 | 63 | 191 | 190 |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | 67 | 66 | 200 | 197 |
Operating cash flows from finance leases | 0 | 0 | 0 | 0 |
Financing cash flows from finance leases | 0 | 0 | 0 | 1 |
Right-of-use assets obtained in exchange for lease obligations: | ||||
Operating leases | 0 | 0 | 0 | 650 |
Finance leases | $ 0 | $ 0 | $ 0 | $ 5 |
Leases - Summary of Information
Leases - Summary of Information Relating to Lease Term and Discount Rate (Detail) | Dec. 31, 2020 | Dec. 31, 2019 |
Weighted average remaining lease term (in months) | ||
Operating leases | 19 years | 28 years 7 months 6 days |
Finance leases | 41 years 2 months 12 days | 53 years 2 months 12 days |
Weighted average discount rate | ||
Operating leases | 7.50% | 7.50% |
Finance leases | 7.50% | 7.50% |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease Liabilities (Detail) $ in Thousands | Dec. 31, 2020USD ($) |
Lessee Disclosure [Abstract] | |
Operating Leases 2021 | $ 67 |
Operating Leases 2022 | 162 |
Operating Leases 2023 | 84 |
Operating Leases Total lease payments | 313 |
Operating Leases Less: Imputed interest | (17) |
Operating Leases Total | 296 |
Finance Leases 2021 | 1 |
Finance Leases 2022 | 1 |
Finance Leases 2023 | 1 |
Finance Leases 2024 | 1 |
Finance Leases Total lease payments | 4 |
Finance Leases Total | $ 4 |
Paycheck Protection Program a_2
Paycheck Protection Program and Employment Support Scheme (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
May 31, 2020 | Apr. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||||
Income from governmental assistance programs | $ 28,000 | $ 83,000 | ||
CARES Act Of 2020 | Paycheck Protection Program | ||||
Debt Instrument [Line Items] | ||||
Loan term | 2 years | |||
Interest rate, stated percentage | 1.00% | 1.00% | ||
Loan accrued in unpaid interest | $ 1,350 | |||
Income from governmental assistance programs | $ 28,000 | $ 83,000 | ||
CARES Act Of 2020 | Paycheck Protection Program | ||||
Debt Instrument [Line Items] | ||||
Proceeds from Loans | $ 204,000 | $ 204,000 |