Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2016 | May. 20, 2016 | Sep. 30, 2015 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Mar. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ACAT | ||
Entity Registrant Name | ARCTIC CAT INC | ||
Entity Central Index Key | 719,866 | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 13,052,843 | ||
Entity Public Float | $ 287,993,615 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Mar. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 17,730 | $ 40,253 |
Short-term investments | 1,009 | |
Accounts receivable, less allowances | 35,760 | 25,067 |
Inventories | 140,007 | 152,443 |
Prepaid expenses | 6,456 | 5,363 |
Income taxes receivable | 11,765 | 5,151 |
Deferred income taxes | 17,229 | 13,050 |
Other current assets | 100 | 3,628 |
Total current assets | 229,047 | 245,964 |
Property and equipment | ||
Machinery, equipment and tooling | 214,372 | 194,074 |
Land, buildings and improvements | 33,259 | 30,004 |
Property, Plant and Equipment, Gross, Total | 247,631 | 224,078 |
Less accumulated depreciation | 166,144 | 161,210 |
Property, Plant and Equipment, Net, Total | 81,487 | 62,868 |
Goodwill | 3,342 | 3,342 |
Intangible assets, net | 2,855 | 3,237 |
Other assets | 1,163 | |
Assets, Total | 317,894 | 315,411 |
Current liabilities | ||
Accounts payable | 72,012 | 70,257 |
Accrued expenses: | ||
Marketing | 9,087 | 14,495 |
Compensation | 5,634 | 4,429 |
Warranties | 24,809 | 23,062 |
Insurance | 3,538 | 4,383 |
Other | 8,950 | 5,463 |
Total current liabilities | 124,030 | 122,089 |
Deferred income taxes | 13,193 | 9,716 |
Other liabilities | $ 13,280 | $ 3,234 |
Commitments and contingencies | ||
Shareholders' equity | ||
Preferred stock | ||
Common stock, par value $.01; 37,440,000 shares authorized; shares issued and outstanding: 13,038,249 at March 31, 2016 and 12,949,702 at March 31, 2015 | $ 130 | $ 130 |
Additional paid-in-capital | 6,105 | 1,940 |
Accumulated other comprehensive loss | (10,184) | (7,142) |
Retained earnings | 171,340 | 185,444 |
Total shareholders' equity | 167,391 | 180,372 |
Liabilities and Equity, Total | $ 317,894 | $ 315,411 |
Preferred Stock - Series B Junior Participating | ||
Shareholders' equity | ||
Preferred stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2016 | Mar. 31, 2015 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 2,050,000 | 2,050,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 37,440,000 | 37,440,000 |
Common stock, shares issued | 13,038,249 | 12,949,702 |
Common stock, shares outstanding | 13,038,249 | 12,949,702 |
Preferred Stock - Series B Junior Participating | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 450,000 | 450,000 |
Preferred stock, shares issued | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Net sales | |||
Net sales | $ 632,895 | $ 698,756 | $ 730,491 |
Cost of goods sold | |||
Cost of goods sold | 542,228 | 579,307 | 579,412 |
Gross profit | 90,667 | 119,449 | 151,079 |
Operating expenses | |||
Selling and marketing | 43,714 | 39,656 | 38,028 |
Research and development | 27,162 | 24,341 | 23,998 |
General and administrative | 36,005 | 48,914 | 28,557 |
Total operating expenses | 106,881 | 112,911 | 90,583 |
Operating profit (loss) | (16,214) | 6,538 | 60,496 |
Other income (expense) | |||
Interest income | 15 | 25 | 30 |
Interest expense | (848) | (353) | (122) |
Total other expense | (833) | (328) | (92) |
Earnings (loss) before income taxes | (17,047) | 6,210 | 60,404 |
Income tax expense (benefit) | (7,860) | 1,290 | 21,000 |
Net earnings (loss) | $ (9,187) | $ 4,920 | $ 39,404 |
Net earnings (loss) per share | |||
Basic | $ (0.71) | $ 0.38 | $ 2.97 |
Diluted | $ (0.71) | $ 0.38 | $ 2.90 |
Weighted average shares outstanding | |||
Basic | 12,995 | 12,926 | 13,275 |
Diluted | 12,995 | 13,089 | 13,598 |
Snowmobile and ATV/ROV units | |||
Net sales | |||
Net sales | $ 534,600 | $ 584,873 | $ 615,608 |
Cost of goods sold | |||
Cost of goods sold | 476,194 | 505,383 | 506,707 |
Gross profit | 58,406 | 79,490 | 108,901 |
Parts, garments and accessories | |||
Net sales | |||
Net sales | 98,295 | 113,883 | 114,883 |
Cost of goods sold | |||
Cost of goods sold | 66,034 | 73,924 | 72,705 |
Gross profit | $ 32,261 | $ 39,959 | $ 42,178 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings (loss) | $ (9,187) | $ 4,920 | $ 39,404 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | 1,387 | (7,311) | 2,297 |
Unrealized gain (loss) on derivative instruments, net of tax | (4,429) | 2,279 | (241) |
Comprehensive income (loss) | $ (12,229) | $ (112) | $ 41,460 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Balances at Mar. 31, 2013 | $ 174,472 | $ 132 | $ 10,945 | $ (4,166) | $ 167,561 |
Balances, Shares at Mar. 31, 2013 | 13,204 | ||||
Exercise of stock options | 9,707 | $ 6 | 9,701 | ||
Exercise of stock options, Shares | 617 | ||||
Tax benefits from stock options exercised | 7,499 | 7,499 | |||
Repurchase of common stock | (45,362) | $ (9) | (30,729) | (14,624) | |
Repurchase of common stock, Shares | (959) | ||||
Restricted stock awards and units, Shares | 21 | ||||
Stock-based compensation expense | 2,584 | 2,584 | |||
Net earnings (loss) | 39,404 | 39,404 | |||
Unrealized gain (loss) on derivative instruments, net of tax | (241) | (241) | |||
Foreign currency adjustment | 2,297 | 2,297 | |||
Dividends ($0.40 in March 31, 2014, $0.50 in March 31, 2015 and $0.38 in March 31, 2016 per share) | (5,317) | (5,317) | |||
Balances at Mar. 31, 2014 | 185,043 | $ 129 | (2,110) | 187,024 | |
Balances, shares at Mar. 31, 2014 | 12,883 | ||||
Exercise of stock options | 1,452 | $ 1 | 1,451 | ||
Exercise of stock options, Shares | 95 | ||||
Tax benefits from stock options exercised | 287 | 287 | |||
Repurchase of common stock | (3,159) | $ (1) | (3,158) | ||
Repurchase of common stock, Shares | (83) | ||||
Restricted stock awards and units | (726) | $ 1 | (727) | ||
Restricted stock awards and units, Shares | 57 | ||||
Restricted stock forfeited | (3) | ||||
Stock-based compensation expense | 4,087 | 4,087 | |||
Net earnings (loss) | 4,920 | 4,920 | |||
Unrealized gain (loss) on derivative instruments, net of tax | 2,279 | 2,279 | |||
Foreign currency adjustment | (7,311) | (7,311) | |||
Dividends ($0.40 in March 31, 2014, $0.50 in March 31, 2015 and $0.38 in March 31, 2016 per share) | (6,500) | (6,500) | |||
Balances at Mar. 31, 2015 | 180,372 | $ 130 | 1,940 | (7,142) | 185,444 |
Balances, shares at Mar. 31, 2015 | 12,949 | ||||
Exercise of stock options | $ 582 | 582 | |||
Exercise of stock options, Shares | 37,442 | 38 | |||
Tax benefits from stock options exercised | $ (221) | (221) | |||
Repurchase of common stock | (136) | (136) | |||
Repurchase of common stock, Shares | (5) | ||||
Restricted stock awards and units | (292) | (292) | |||
Restricted stock awards and units, Shares | 58 | ||||
Restricted stock forfeited | (2) | ||||
Stock-based compensation expense | 4,232 | 4,232 | |||
Net earnings (loss) | (9,187) | (9,187) | |||
Unrealized gain (loss) on derivative instruments, net of tax | (4,429) | (4,429) | |||
Foreign currency adjustment | 1,387 | 1,387 | |||
Dividends ($0.40 in March 31, 2014, $0.50 in March 31, 2015 and $0.38 in March 31, 2016 per share) | (4,917) | (4,917) | |||
Balances at Mar. 31, 2016 | $ 167,391 | $ 130 | $ 6,105 | $ (10,184) | $ 171,340 |
Balances, shares at Mar. 31, 2016 | 13,038 |
Consolidated Statements of Sha7
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Dividends per share | $ 0.38 | $ 0.50 | $ 0.40 |
Retained Earnings | |||
Dividends per share | $ 0.38 | $ 0.50 | $ 0.40 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities | |||
Net earnings (loss) | $ (9,187) | $ 4,920 | $ 39,404 |
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 19,767 | 15,509 | 14,189 |
Loss on the disposal of assets | 51 | 3 | |
Deferred income taxes | 1,613 | 1,489 | 6,076 |
Stock-based compensation expense | 4,294 | 4,087 | 2,584 |
Proceeds from new market tax credit, net of deferred costs | 4,403 | ||
Changes in operating assets and liabilities | |||
Trading securities | 1,009 | 58,999 | 17,232 |
Accounts receivable | (10,221) | 14,813 | (10,949) |
Inventories | 13,320 | (14,024) | (42,159) |
Accounts payable | 872 | (21,617) | 26,768 |
Accrued expenses | (3,385) | (188) | (1,264) |
Income taxes | (6,694) | (3,494) | (6,931) |
Prepaid expenses and other | 3,332 | (844) | (774) |
Net cash provided by operating activities | 19,123 | 59,701 | 44,179 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (37,964) | (22,187) | (24,377) |
Acquisition of business | (8,428) | ||
Other | (2) | (9) | 36 |
Net cash used in investing activities | (37,966) | (30,624) | (24,341) |
Cash flows from financing activities: | |||
Proceeds from long-term borrowings | 293,067 | 236,760 | 121,007 |
Payments on long-term borrowings | (293,067) | (236,760) | (121,007) |
Proceeds from issuance of common stock | 582 | 34 | 185 |
Payments for income taxes on net-settled option exercises | (292) | (1,897) | (7,652) |
Tax benefit from stock option exercises | 65 | 758 | 7,499 |
Dividends paid | (4,917) | (6,500) | (5,317) |
Repurchase of common stock | (136) | (1,042) | (28,190) |
Net cash used in financing activities | (4,698) | (8,647) | (33,475) |
Effect of exchange rate changes on cash and cash equivalents | 1,018 | (2,701) | 595 |
Net increase (decrease) in cash and cash equivalents | (22,523) | 17,729 | (13,042) |
Cash and cash equivalents at beginning of year | 40,253 | 22,524 | 35,566 |
Cash and cash equivalents at end of year | 17,730 | 40,253 | 22,524 |
Supplemental disclosure of cash payments for: | |||
Income taxes | 168 | 3,271 | 13,892 |
Interest | $ 848 | $ 353 | $ 122 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unless the context otherwise requires, the use of the terms “Arctic Cat,” “we,” “our,” or “us” in these Notes to Consolidated Financial Statements refers to Arctic Cat Inc. and, as applicable, its consolidated subsidiaries. Description of Business Arctic Cat designs, engineers, manufactures and markets snowmobiles, all-terrain vehicles (ATVs), recreational off-highway vehicles (“side-by-sides” or “ROVs”) and related parts, garments and accessories (PG&A) under the Arctic Cat ® ® Our business is organized into three operating segments based on our product lines: (1) snowmobile; (2) ATV/ROV and (3) PG&A. We aggregate the snowmobile and ATV/ROV segments into one operating segment, as the segments have similar economic characteristics. Accordingly, we have two reportable segments: (1) snowmobiles and ATV/ROV and (2) PG&A. See Note 11, Segment Reporting Basis of Presentation The consolidated financial statements include the accounts of Arctic Cat Inc. and its consolidated subsidiaries. We also consolidate, regardless of our ownership percentage, variable interest entity’s (“VIE’s”) for which we are deemed to have a controlling financial interest. All intercompany accounts and transactions are eliminated upon consolidation. When we obtain an economic interest in an entity, we evaluate the entity to determine if the entity is a VIE, and if we are deemed to be a primary beneficiary. As a part of our evaluation, we are required to qualitatively assess if we are the primary beneficiary of the VIE based on whether we hold the power to direct those matters that most significantly impacted the activities of the VIE and the obligation to absorb losses or the right to receive the benefits of the VIE that could potentially be significant. Refer to Note 12, New Market Tax Credit Transaction In preparing the accompanying consolidated financial statements, we evaluated the period from April 1, 2016, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified for this period. Use of Estimates The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, related revenues and expenses and disclosure about contingent assets and liabilities at the date of the financial statements. We base our estimates on historical experience and on other various assumptions believed to be reasonable under the circumstances. We believe that such estimates are established using consistent, reasonable and appropriate methods. Accordingly, actual results could differ from the estimates used by management. Reclassifications Certain prior period Consolidated Balance Sheet and Notes to Consolidated Financial Statement amounts have been reclassified to conform to the fiscal 2016 financial statement presentation. The reclassifications had no effect on previously reported operating results. Cash and Cash Equivalents We consider highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At times, certain bank deposits may be in excess of federally insured limits. As of March 31, 2016 and 2015, Arctic Cat had approximately $7.2 and $19.2 million, respectively, of cash located in foreign banks primarily in Europe and Canada. Accounts Receivable and Allowance for Uncollectible Accounts Our accounts receivable balance consists of amounts due from our dealers and finance companies. We extend credit to our dealers based on an evaluation of the dealers’ financial condition. Our collection exposure relating to accounts receivable amounts due from dealer floorplan finance institutions is limited due to the financial strength of the finance institutions and provisions of our existing agreements. Accounts receivable is presented net of an allowance for estimated uncollectible amounts due from our dealers. We estimate uncollectible amounts considering numerous factors, mainly the length of time the receivables are past due, the historical collection experience and existing economic conditions. Our allowance for uncollectible accounts was $1.8 and $1.9 million at March 31, 2016 and 2015, respectively. Account balances are charged off against the allowance when all collection efforts have been exhausted. Amounts which are considered to be uncollectible are written off and recoveries of amounts previously written off are credited to the allowance upon recovery. Accounts receivable amounts written off have been within management’s expectations. The activity in the allowance for uncollectible accounts for accounts receivable is as follows ($ in thousands): 2016 2015 Balance at beginning of period $ 1,897 $ 1,988 Provisions charged to expense 40 287 Deductions for amounts written-off (143 ) (378 ) Balance at end of period $ 1,794 $ 1,897 Inventories Inventories are valued at the lower of cost or market, with cost determined using the first-in, first-out method. Manufacturing costs include materials, labor, freight-in, and manufacturing overhead. Unallocated overhead and abnormal costs are expensed as incurred. Market represents the estimated selling price in the ordinary course of business less cost to sell and considers general market and economic conditions, reviews of current profitability of products, product warranty costs and the effect of current and expected incentive offers as of the balance sheet date. We establish a reserve for excess, slow-moving, and obsolete inventory that is equal to the difference between the cost and estimated net realizable value for that inventory. These reserves are based on a review and comparison of current inventory levels to planned production, as well as planned and historical sales of the inventory. Additionally, due to significant movements of partially-manufactured components and parts between manufacturing plants, we do not internally measure, nor do our accounting systems provide, a meaningful segregation between raw materials and work-in-process. Inventories consist of the following at March 31 ($ in thousands): 2016 2015 Raw materials and sub-assemblies $ 35,770 $ 41,045 Finished goods 64,127 77,763 Parts, garments and accessories 40,110 33,635 $ 140,007 $ 152,443 Losses resulting from the application of lower of cost or market accounting were not material for the years ended March 31, 2016, 2015 and 2014, respectively. Derivative Instruments and Hedging Activities We enter into forward exchange contracts to protect against exposure to currency fluctuations on transactions denominated in foreign currencies, namely the Canadian dollar and Japanese yen. The contracts are designated as, and meet the criteria for, cash flow hedges. We do not enter into forward contracts for the purpose of trading or speculative purposes. Derivatives are recognized on the Consolidated Balance Sheets at fair value, and the effective portion of the change in the fair value of the derivative is recorded in accumulated other comprehensive income (loss), net of tax, and subsequently reclassified into operating expense upon completing transfers of Canadian dollar or Japanese yen funds when the hedged item affects earnings. Fair Value Measurements We record certain assets and liabilities at fair value in the financial statements; some of these are measured on a recurring basis while others are measured on a non-recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when required by particular events or circumstances. A fair value hierarchy has been established, which requires classification based on observable and unobservable inputs when measuring fair value. Refer to Note 2, Fair Value Measurements Property and Equipment, Net Property and equipment is stated at cost. Major improvements that extend the useful life or add functionality are capitalized and repairs and maintenance cost that are considered not to extend the useful life of the property and equipment are expensed as incurred. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, using the straight-line method for all property, equipment and tooling. Tooling is depreciated over the life of the product, generally 3-5 years. Estimated service lives range from 15-39 years for buildings and improvements and 5-15 years for machinery and equipment. Accelerated and straight-line methods are used for income tax reporting. Upon disposal of property and equipment, the cost and accumulated depreciation are removed from the Consolidated Balance Sheets and the resulting gain or loss is reflected in earnings. Impairment of Long-Lived Assets Long-lived assets include property and equipment and definite-life intangible assets. We evaluate the carrying value of long-lived assets for impairment when events or changes in business circumstances indicate that the carrying amount of an asset, or asset group, may not be fully recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets, the carrying value is reduced to the estimated fair value as measured by quoted market prices or other valuation techniques (e.g., discounted cash flow analysis) and an accompanying impairment loss is recognized within earnings. Fair value is primarily determined using discounted cash flow analyses; however, other methods may be used to determine the fair value, including third party valuations when necessary. We recognized no impairment of long-lived assets in fiscal years 2016, 2015 and 2014. Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. We test goodwill for impairment annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. An impairment charge for goodwill is recognized only when the estimated fair value of a reporting unit, including goodwill, is less than its carrying amount. Our impairment testing for goodwill is performed separately from our impairment testing of indefinite-lived intangible assets, but the income approach is utilized for both in determining fair value. We test goodwill and indefinite-lived intangible assets for impairment at the reporting unit level and individual indefinite-lived intangible asset level, respectively. Under the income approach, we calculate the fair value of our four reporting units and indefinite-lived intangible assets using the present value of future cash flows. Individual indefinite-lived intangible assets are tested by comparing the book values of each asset to the estimated fair value. Our estimate of fair value for indefinite-lived intangible assets uses projected revenues from our forecasting process, assumed royalty rates, and a discount rate. Assumptions in our impairment evaluations, such as forecasted growth rates and cost of capital, are consistent with internal projections and operating plans. Materially different assumptions regarding future performance of our businesses or a different weighted-average cost of capital could result in impairment losses or additional amortization expense. We perform a two-step quantitative test for goodwill impairment. First, we compare the carrying value of a reporting unit, including goodwill, to its fair value. The fair value of each reporting unit is estimated using a discounted cash flow model. Where available, and as appropriate, comparable market multiples and our company’s market capitalization are also utilized to corroborate the results of the discounted cash flow models. If the first step indicates the carrying value exceeds the fair value of the reporting unit, then a second step must be completed in order to determine the amount of goodwill impairment that should be recorded. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill. The implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge is recorded for the difference. Identifiable intangible assets are amortized over their useful lives on a straight-line basis, unless the useful life is determined to be indefinite. The useful life of an identifiable definite-lived intangible asset is based on an analysis of several factors, including contractual, regulatory or legal obligations, demand, competition, and industry trends. Refer to Note 4, Goodwill and Intangible Assets Product Warranties We generally provide a limited warranty on snowmobiles for 12 months from the date of consumer registration and for six months from the date of consumer registration on ATVs and ROVs. We may provide longer warranties in certain geographical markets as determined by local regulations and market conditions, as well as related to certain promotional programs. We provide for estimated warranty costs at the time of sale based on historical rates and trends. Subsequent adjustments are made to the warranty reserve as actual claims become known or the amounts are determinable, including costs associated with safety recalls, which may occur after the standard warranty period. The following represents changes in our accrued warranty liability for the fiscal years 2016, 2015 and 2014 ($ in thousands): 2016 2015 2014 Balance at beginning of period $ 23,062 $ 19,357 $ 18,709 Warranty provision 13,864 21,499 16,770 Warranty claim payments (12,117 ) (17,794 ) (16,122 ) Balance at end of period $ 24,809 $ 23,062 $ 19,357 Insurance We are self-insured for certain losses relating to employee medical, workers’ compensation, and certain product liability claims. Specific stop loss coverages are provided for catastrophic claims in order to mitigate our exposure. Under these plans, liabilities are recognized for claims incurred, including those incurred but not reported. Losses and claims are charged to operations when it is probable a loss has been incurred and the amount can be reasonably estimated. Revenue Recognition We recognize revenue and provide for estimated marketing and sales incentive costs when persuasive evidence of an arrangement exists; delivery has occurred and ownership has transferred to the customer; the price to the customer is fixed or determinable; and collectability is reasonably assured. These criteria are generally met when title passes at the time product is shipped to dealers in accordance with shipping terms, which are primarily freight-on-board shipping point. Most sales are made to dealers financing their purchases under flooring arrangements with financial institutions. At the time of revenue recognition, shipping and handling costs are recorded as a component of costs of goods sold and shipping charges to the dealers are recorded as revenue. Return allowances for parts, garments and accessories are recorded as a reduction of revenue when the revenue is recognized based on our return allowance program and historical experience. Sales tax collected from customers is remitted to the appropriate taxing jurisdictions and is excluded from sales revenue as we consider ourselves a pass-through conduit for collecting and remitting sales taxes. Marketing and Sales Incentive Costs We provide for various marketing and sales incentive costs that are offered to our dealers and consumers at the later of when the revenue is recognized or when the marketing and sales incentive program is approved and communicated for products previously shipped. Examples of these costs, which are recognized as a reduction of revenue when the products are sold, include dealer and consumer rebates, dealer floorplan financing assistance and other incentive and promotional programs. Sales incentives that involve a free product or service delivered to the consumer, such as extended warranties, are recorded as a component of cost of goods sold. We estimate the costs of these various marketing and sales incentive programs based on expected usage considering current program parameters, historical experience, dealer inventory levels, the terms of arrangements with dealers and expectations for changes in relevant trends in the future. Actual results may differ from these estimates if market conditions dictate the need to enhance or reduce sales promotion and incentive programs or if the current market trends vary from historical trends. To the extent current experience differs with previous estimates, the accrued liability for marketing and sales incentives is adjusted accordingly. Historically, marketing and sales incentive accruals have been within our expectations and differences have not been material. Dealer Holdback We provide for a dealer holdback program on product sales to our dealer network. The dealer holdback represents a portion of the invoiced sales price that is held by us and is expected to be subsequently returned to the dealer or distributor as a sales incentive upon the ultimate retail sale of the product to the end customer. Holdback amounts reduce the definitive net price of the products purchased by the dealers or distributors and ultimately reduce the amount of sales we recognize at the time of shipment. At the time product revenue is recognized, the portion of the invoiced sales price estimated as the holdback is accrued for as dealer holdback liability within accounts payable on our balance sheet. If the products subject to the holdback program are sold within the program’s term, we refund the holdback to the dealer. Any remaining holdback balances at the expiration of the program’s term are refunded to the dealer or distributor. Our dealer holdback program liability, included within accounts payable, was $17.2 million and $19.8 million as of March 31, 2016 and 2015, respectively. Research and Development Research and development costs and are expensed as incurred. Research and development expense was $27.2 million, $24.3 million and $24.0 million during fiscal 2016, 2015 and 2014, respectively. Advertising We expense advertising costs as incurred, except for cooperative advertising obligations arising related to the sale of our products to our dealers. The estimated cost of cooperative advertising, which the dealer is required to support, is recorded as marketing expense at the time the product is sold. Cooperative advertising was $3.0 million, $3.6 million and $3.4 million in fiscal 2016, 2015 and 2014, respectively. Total advertising expense, including cooperative advertising, was $19.5 million, $18.6 million and $17.6 million in fiscal 2016, 2015 and 2014, respectively. Stock-Based Compensation Our stock-based compensation awards are generally granted to executive officers, other employees, and non-employee members of the Board of Directors of Arctic Cat (the “Board”), and may include performance share awards that are contingent upon the achievement of performance goals of Arctic Cat. Compensation expense equal to the grant date fair value is recognized for these awards on a straight-line basis over the vesting period and is recorded within general and administrative expense. Refer to Note 7, Shareholders’ Equity Foreign Currency Our activities with Canadian dealers are denominated in Canadian dollars and our activities with European on-road ATV/ROV dealers and distributors are denominated in the Euro. In addition, we have certain supply contracts that are denominated in Japanese yen. Assets and liabilities denominated in foreign currency are translated using the exchange rates in effect at the balance sheet date. Revenues and expenses are translated at the weighted-average foreign exchange rates in effect for the period. Translation gains and losses relating to the Canadian dollar and Japanese yen are reflected in the results of operations and Euro currency are reflected as a component of other comprehensive income. Income Taxes Deferred income tax assets and liabilities are recognized for the expected future income tax consequences of events attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Under this method, deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years that those temporary differences are expected to be recovered or settled. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. Fluctuations in the ultimate outcome of these tax consequences could materially impact our financial position or results of operations. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period in which the enactment takes place. Valuation allowances are provided when, in management’s judgment, it is more likely than not that some portion or all of the benefit of the deferred tax asset will not be recognized. We recognize the effect of uncertain income tax positions only if the weight of available evidence of those positions indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. It is inherently difficult and subjective to estimate such amounts, as we have to determine the probability of various possible outcomes. We reevaluate these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, voluntary settlements and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision. We also record interest and penalties related to unrecognized tax benefits in income tax expense. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Lease Accounting In November 2015, the FASB issued ASU 2015-17, Income Taxes In July 2015, the FASB issued ASU 2015-11, Inventory In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 2. FAIR VALUE MEASUREMENTS We record certain assets and liabilities at fair value in the financial statements; some of these are measured on a recurring basis while others are measured on a non-recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when required by particular events or circumstances. A fair value hierarchy has been established, which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2— Level 3— In determining the fair value of assets and liabilities, we utilize various valuation techniques. The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment. In making fair value measurements, observable market data must be used when available. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Financial instruments are transferred in and/or out of Level 1, 2 or 3 at the beginning of the accounting period in which there is a change in the valuation inputs. Recurring Fair Value Measurements We utilize the income approach to measure the fair value of our foreign currency contracts, which is based on significant other observable inputs. As such, our foreign currency contracts are considered a Level 2 measurement. As of March 31, 2016, our Canadian dollar foreign currency contracts fair value represented a foreign exchange asset of $0.1 million and a foreign exchange liability of $3.9 million. As of March 31, 2015, our Canadian dollar foreign currency contracts fair value represented a foreign exchange asset totaling $3.6 million, and our Japanese yen foreign currency contract fair value was a foreign exchange liability totaling $0.4 million. Nonrecurring Fair Value Measurements Our assets and liabilities that are measured at fair value on a nonrecurring basis primarily relate to tangible fixed assets, goodwill and intangible assets, which are generally recorded at fair value as a result of an impairment charge. We did not record any significant charges to assets measured at fair value on a nonrecurring basis during fiscal 2016 and 2015. Other Fair Value Disclosures Our financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable and accounts payable and approximate fair value due to their short-term nature. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We use foreign currency derivative instruments to manage our exposure to currency fluctuations on transactions denominated in foreign currencies – primarily the Canadian dollar and Japanese yen. Our foreign currency management objective is to reduce earnings volatility related to movements in foreign exchange rates and limit the risk of loss in value of certain of our foreign currency-denominated cash flows. We do not enter into forward contracts for trading or speculative purposes. We have no derivatives that have credit risk-related contingent features and we mitigate our risk by engaging with major financial institutions as counterparties. We record all foreign currency forward contracts at fair value in our Consolidated Balance Sheets. The forward contracts are designated as, and meet the criteria for, cash flow hedges. We evaluate hedge effectiveness prospectively and retrospectively, and we formally document all hedging relationships at inception, as well as the risk management objectives for undertaking the hedge transaction. Our Canadian dollar and Japanese yen forward contracts generally have terms of up to 12 months. Gains and losses on forward contracts are recorded in accumulated other comprehensive income (loss), net of tax, and subsequently reclassified into cost of goods sold or operating expenses during the same period in which the hedged transaction affects the Consolidated Statements of Operations. Gains and losses on the derivative representing hedge ineffectiveness, if any, are recognized in the Consolidated Statements of Operations. The following table presents the notional amounts and gross carrying values of derivative instruments as of March 31, 2016 and March 31, 2015 ($ in thousands): March 31, 2016 March 31, 2015 Notional Amount Fair Value Notional Amount Fair Value Canadian Dollar (1) $ 87,875 $ (3,837 ) $ 76,328 $ 3,628 Japanese Yen (1) — — 19,046 (434 ) (1) Assets are included in other current assets and liabilities are included in accrued expenses in the accompanying Consolidated Balance Sheets. (2) Refer to Note 2, Fair Value Measurements The following table presents the effects of derivative instruments on other comprehensive income (OCI) and on our Consolidated Statements of Operations for the years ended March 31, 2016, 2015 and 2014 ($ in thousands): March 31, 2016 March 31, 2015 Pre-Tax Pre-Tax Gain Pre-Tax Pre-Tax Gain Canadian Dollar (1) $ (111 ) $ 7,354 $ 6,047 $ 1,996 Japanese Yen (1) (374 ) (808 ) — — (1) Canadian Dollar contracts are included in general and administrative expenses and Japanese Yen contracts are included in cost of goods sold in the accompanying Consolidated Statements of Operations. The ineffective portion of foreign currency contracts was not material for the years ended March 31, 2016 and 2015. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 4. GOODWILL AND INTANGIBLE ASSETS We do not amortize goodwill or intangible assets with indefinite useful lives, but instead we review these assets for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable through future cash flows. An impairment charge for goodwill is recognized only when the estimated fair value of a reporting unit, including goodwill, is less than its carrying amount. We conducted our annual assessment for goodwill impairment during the fourth quarter of fiscal 2016 and concluded that goodwill was not impaired. The changes in the carrying amount of goodwill for the years ended March 31, 2016 and 2015 are as follows ($ in thousands): 2016 2015 Gross Carrying Gross Carrying Balance as of beginning of year $ 3,342 $ — Goodwill acquired during the period — 3,342 Balance as of end of year $ 3,342 $ 3,342 The carrying amount of indefinite-lived intangible assets as of March 31, 2016 and 2015 are as follows ($ in thousands): 2016 2015 Gross Carrying Gross Carrying Indefinite-lived intangible asset balance as of end of year $ 436 $ 436 For definite-lived intangible assets, the changes in the net carrying amount for the years ended March 31, 2016 and 2015 are as follows ($ in thousands): 2016 2015 Gross Accumulated Gross Accumulated Balance as of beginning of year $ 4,312 $ (1,511 ) $ 2,058 $ (1,428 ) Intangible assets acquired during the period — — 2,255 — Amortization expense — (385 ) — (83 ) Currency translation effect on foreign balances 3 — (1 ) — Balance as of end of year $ 4,315 $ (1,896 ) $ 4,312 $ (1,511 ) Definite-lived intangible assets include trademarks/tradenames, dealer network, customer relationships, non-compete |
FINANCING
FINANCING | 12 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
FINANCING | 5. FINANCING We rely on a senior secured revolving credit facility for documentary and stand-by letters of credit, working capital needs and general corporate purposes. On March 10, 2016, we amended our credit facility to extend the maturity date from November 10, 2017 to March 10, 2021 and increase our maximum permissible borrowings from $100.0 million to $130.0 million during May through November and from $50.0 million to $75.0 million during all other months of the fiscal year. The amount of permissible borrowings under the credit facility are dependent upon adequate levels of underlying collateral. Borrowings under the credit facility bear interest at either the base rate plus the applicable margin or the LIBOR rate plus the applicable margin, depending on the type of loan. The applicable margin is calculated based on Arctic Cat’s leverage ratio and amount available for borrowing under the credit facility and ranges from 0.0% to 0.5% for base rate loans and from 1.0% to 1.5% for LIBOR loans. Arctic Cat’s leverage ratio is its ratio of debt to EBITDA, calculated quarterly. All borrowings are collateralized by substantially all of our assets including all real estate, accounts receivable and inventory. No borrowings from the line of credit were outstanding at March 31, 2016 and 2015. The outstanding letters of credit balances were $3.5 million and $7.9 million at March 31, 2016 and 2015, respectively, and borrowings under the line are subject to certain covenants and restrictions on indebtedness, financial guarantees, business combinations and other related items. We were in compliance with the terms of the credit agreement as of March 31, 2016. |
LEASES
LEASES | 12 Months Ended |
Mar. 31, 2016 | |
Leases [Abstract] | |
LEASES | 6. LEASES We lease buildings and equipment under non-cancelable operating leases. Certain of our lease agreements contain provisions for escalating rent payments over the initial terms of the lease. We account for these leases by recognizing rent expense on a straight-line basis and adjusting the deferred rent expense liability for the difference between the straight-line rent expense and the amount of rent paid. Total rent expense under our lease agreements was $1.4 million, $1.9 million and $1.4 million for fiscal 2016, 2015 and 2014, respectively. Future minimum lease payments, exclusive of other costs required under non-cancelable operating leases are as follows ($ in thousands): Fiscal year 2017 $ 1,490 2018 1,383 2019 1,248 2020 1,234 2021 1,182 Thereafter 9,042 Total future minimum payments $ 15,579 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | 7. SHAREHOLDERS’ EQUITY Stock Compensation Plans We have outstanding equity awards under a 2013 Omnibus Stock and Incentive Plan (the “2013 Plan”) and a 2007 Omnibus Stock and Incentive Plan (the “2007 Plan,” and along with the 2013 Plan, the “Plans”), previously approved by our shareholders. The Plans provide for incentive and non-qualified stock options, restricted stock and restricted stock unit awards and other incentive awards to be granted to directors, officers, other key employees and consultants. The stock options granted generally vest over a period of one to three years, have an exercise price equal to the fair market value of the stock on the date of grant and expire after a five to ten year life. The stock options are generally subject to accelerated vesting if there is a change in control, as defined in the plans. The restricted stock awards generally vest over a period of two to three years and do not require cash payments from restricted stock award recipients. Stock appreciation rights (“SARs”) generally vest over a period of three years. At March 31, 2016, we had 620,703 shares of common stock available for grant under the plans. We record stock-based compensation expense related to stock options, restricted stock and restricted stock units over the requisite service period based on the fair value of the awards on the grant date. The fair value of restricted stock awards is based on the closing price of our common shares on the grant date. We record stock-based risk-free For the fiscal years ended March 31, 2016, 2015 and 2014, we recorded stock-based compensation expense for stock options, restricted stock and SAR awards of $4.3 million, $4.1 million and $2.6 million, respectively, which have been included in general and administrative expenses. At March 31, 2016, we had $9.3 million of unrecognized compensation costs related to non-vested stock options, restricted stock and SARs awards that are expected to be recognized over a weighted average period of approximately two years. Stock Options The following tables summarize the stock option transactions under the Plans during fiscal 2016: Number of Weighted Outstanding at March 31, 2015 604,218 $ 29.39 Granted 121,819 29.57 Cancelled (10,356 ) 36.39 Expired (30 ) 13.59 Exercised (37,442 ) 15.52 Outstanding at March 31, 2016 678,209 $ 30.08 Options exercisable at March 31, 2016 262,734 $ 17.83 Options expected to vest at March 31, 2016 266,806 $ 20.30 Stock options outstanding had an aggregate intrinsic value of $0.5 million, $5.3 million and $10.9 million and a weighted-average contractual life of 7.48 years, 8.03 years and 5.09 years at March 31, 2016, 2015 and 2014, respectively. Exercisable stock options had an aggregate intrinsic value of $0.4 million at March 31, 2016 and a weighted-average contractual life of 6.32 years. The aggregate intrinsic value is based on the difference between the exercise price and our March 31, 2016 common share market value for in-the-money options. The following tables summarize information concerning currently outstanding and exercisable stock options at March 31, 2016: Range of Exercise Prices Number Weighted Weighted Number Weighted $6.26 - 9.57 3,827 3.34 years $ 6.28 3,827 $ 6.28 10.79 - 145,762 5.09 years 13.97 132,180 13.71 17.78 - 63,051 7.40 years 21.29 48,029 21.72 28.81 - 43.79 432,035 8.32 years 35.65 160,645 38.21 47.52 - 47.52 33,534 7.63 years 47.52 12,228 47.52 678,209 7.48 years $ 30.08 356,909 $ 26.90 The fair value of each stock option award was estimated on the date of grant using the Black-Scholes The weighted average fair value of options granted and the assumptions used to estimate the fair value of options for fiscal 2016, 2015 and 2014 are summarized as follows: 2016 2015 2014 Fair value of options granted $ 13.35 $ 15.24 $ 16.91 Assumptions: Dividend yield 1.2 % 1.0 % 1.0 % Average term 6 years 6 years 5 years Volatility 51.0 % 49.0 % 49.0 % Risk-free rate of return 1.7 % 0.8 % 0.8 % Restricted Stock The shares of restricted common stock awarded have voting rights and participate equally in all dividends and other distributions duly declared by the Board. The following tables summarize restricted stock and restricted stock unit award activity under the Plans for fiscal 2016 and 2015: 2016 2015 Restricted Shares Shares Weighted- Grant Date Shares Weighted- Grant Date Non-vested shares at March 31, 22,500 $ 40.12 16,200 $ 43.45 Awarded 29,063 18.53 20,200 33.67 Vested (9,800 ) 48.75 (10,900 ) 33.81 Forfeited (1,900 ) 24.84 (3,000 ) 37.60 Non-vested shares at March 31, 39,863 $ 22.98 22,500 $ 40.12 2016 2015 Restricted Stock Units Shares Weighted- Grant Date Shares Weighted- Grant Date Non-vested shares at March 31, 116,439 $ 35.67 40,103 $ 35.35 Granted 124,558 18.09 135,564 34.81 Vested (44,722 ) 36.15 (57,295 ) 33.14 Forfeited (10,017 ) 16.59 (1,933 ) 43.81 Non-vested shares at March 31, 186,258 $ 24.79 116,439 $ 35.67 Cash-Settled Stock Appreciation Rights In February 2016, we granted 175,000 cash-settled SARs with an exercise price equal to the closing price of Arctic Cat common stock on the date of grant. The cash-settled SARs vest in three equal annual installments beginning on the first anniversary of the grant date and have a five-year term. Upon exercise, the holder is entitled to receive cash proceeds in an amount equal to the difference between (i) the lower of $33.00 and the then-current market value of Arctic Cat common stock and (ii) the fair market value of Arctic Cat common stock on the grant date of February 5, 2016, multiplied by the number of SARs exercised on such date. The cash-settled SARs are included in other liabilities in our Consolidated Balance Sheets and are recorded at fair value at the reporting date. The following table summarizes the activity during fiscal 2016 for SARs awarded pursuant to the Plans: Number of Weighted Weighted Outstanding at March 31, 2015 — $ — Granted 175,000 14.16 Forfeited — — Exercised — — Outstanding at March 31, 2016 175,000 $ 14.16 4.9 years SARs exercisable at March 31, 2016 — $ — — SARs expected to vest at March 31, 2016 144,468 $ 14.16 4.9 years The fair value of the SAR grant was estimated using the Black-Scholes option pricing model and assumptions analogous to our stock option awards, as set forth in the table below: 2016 Fair value of SARs granted $ 6.40 Assumptions: Dividend yield 0.0 % Average term 5 years Volatility 51.0 % Risk-free rate of return 1.4 % Preferred Stock Our Board is authorized to issue 2,500,000 shares of $1.00 par value preferred stock in one or more series, 450,000 shares of which were designated Series B Junior Participating preferred stock in connection with the previous Shareholder Rights Plan. The Board can determine voting, conversion, dividend and redemption rights and other preferences of each series. No shares have been issued. Share Repurchase Authorization On August 7, 2014, the Board authorized the repurchase of an additional $25.0 million in shares of common stock, which supplemented the $1.1 million remaining under the program previously approved in May 2013. We paid $0.1 million, $1.0 million and $28.2 million during fiscal 2016, 2015, and 2014, respectively, to repurchase and cancel 5,162, 27,925 and 633,816 shares of common stock, respectively, pursuant to the Board authorizations. At March 31, 2016, we have remaining authorization to repurchase $25.9 million in shares of common stock. Net Earnings (Loss) Per Share Our basic net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted average number of outstanding common shares. Our diluted weighted average shares outstanding include common shares and common share equivalents relating to stock options and restricted stock units, when dilutive. Options to purchase 449,432 and 156,432 shares of common stock with weighted average exercise prices of $35.50 and $44.14 were outstanding during fiscal 2016 and 2015, respectively, but were excluded from the computation of common share equivalents because they were anti-dilutive. No options outstanding were excluded from the computation of common share equivalents during fiscal 2014. Weighted average shares outstanding consist of the following for the fiscal 2016, 2015 and 2014 (in thousands): 2016 2015 2014 Weighted average number of common shares outstanding 12,995 12,926 13,275 Dilutive effect of option plan — 163 323 Common and potential shares outstanding—diluted 12,995 13,089 13,598 Accumulated Other Comprehensive Loss The components of the changes in accumulated other comprehensive loss during fiscal 2016, 2015 and 2014 were as follows ($ in thousands): 2016 2015 2014 Balance at beginning of period $ (7,142 ) $ (2,110 ) $ (4,166 ) Unrealized gain (loss) on derivative instruments, net of tax (4,429 ) 2,279 (241 ) Foreign currency translation adjustment 1,387 (7,311 ) 2,297 Balance at end of period $ (10,184 ) $ (7,142 ) $ (2,110 ) The unrealized gains on derivatives instruments in fiscal 2016, 2015 and 2014 were net of tax expense of $2.6 million, $1.3 million and $0.1 million, respectively. There is no tax impact on foreign currency translation adjustments, as the earnings are considered permanently reinvested. |
RETIREMENT SAVINGS PLAN
RETIREMENT SAVINGS PLAN | 12 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT SAVINGS PLAN | 8. RETIREMENT SAVINGS PLAN We sponsor a 401(k) defined contribution plan that covers substantially all full-time employees who are at least 18 years of age and who have completed at least three months of service. Plan participants may make before tax elective contributions up to 50% of their compensation with Arctic Cat matching 50% of the employee contributions, up to a maximum of 5% of the employee’s cash compensation capped at $255,000. Matching contributions of $1.3 million, $1.2 million, and $1.0 million were made in fiscal 2016, 2015 and 2014, respectively. We can elect to make additional contributions at our discretion. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 9. INCOME TAXES Our income (loss) before income taxes was generated from our United States and foreign operations as follows ($ in thousands): For the years ended March 31, 2016 2015 2014 United States $ (17,156 ) $ 5,532 $ 58,655 Foreign 109 678 1,749 Income (loss) before income taxes $ (17,047 ) $ 6,210 $ 60,404 Income tax expense (benefit) consists of the following for the fiscal years ended March 31 ($ in thousands): 2016 2015 2014 Current Federal $ (5,935 ) $ 2,610 $ 13,345 State (339 ) 149 900 Foreign 27 168 436 Deferred (1,613 ) (1,637 ) 6,319 Total income tax expense (benefit) $ (7,860 ) $ 1,290 $ 21,000 The following is a reconciliation of the federal statutory income tax rate to the effective tax rate for the fiscal years ended March 31: 2016 2015 2014 Statutory income tax rate 35.0 % 35.0 % 35.0 % State taxes 1.8 1.9 1.7 Research and other tax credit 5.6 (16.5 ) (1.0 ) Domestic manufacturers deduction (0.1 ) (0.9 ) (1.4 ) Uncertain tax positions 6.0 (2.3 ) (0.1 ) US subpart F adjustments 0.7 11.1 0.4 Foreign tax rate difference (1.4 ) (9.1 ) (0.2 ) Stock options (0.5 ) 1.3 (0.1 ) Other (1.1 ) 0.3 0.5 46.0 % 20.8 % 34.8 % We utilize the liability method of accounting for income taxes whereby deferred taxes are determined based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the provisions of enacted tax laws. The cumulative temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes under the liability method are as follows at March 31 ($ in thousands): 2016 2015 Current deferred income tax assets Accrued expenses $ 3,788 $ 3,934 Accrued warranty 8,855 8,045 Inventory related items 4,269 4,152 Net operating loss carryforwards 1,628 — Other 1,560 313 Less: valuation allowance (351 ) (235 ) Current deferred income tax asset 19,749 16,209 Current deferred income tax liabilities Prepaid expenses 2,043 1,463 Other 477 1,696 Current deferred income tax liability 2,520 3,159 Net current deferred tax asset $ 17,229 $ 13,050 Non-current deferred income tax assets Compensation payable in common stock $ 1,927 $ 1,200 State research and development credits 1,393 1,043 Less: valuation allowance (1,042 ) (808 ) Non-current deferred income tax asset 2,278 1,435 Non-current deferred income tax liability Property and equipment 15,471 11,151 Non-current deferred tax liability 15,471 11,151 Net non-current deferred tax liability $ 13,193 $ 9,716 Arctic Cat recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. We recognize potential interest and penalties related to income tax positions as a component of the provision for income taxes on the consolidated statements of operations. We had liabilities recorded related to unrecognized tax benefits totaling $1.1 and $2.2 million at March 31, 2016 and 2015, including reserves related to potential interest and penalties of $0.1 and $0.4 million, respectively. The amount of the liability, net of federal benefits for uncertain state tax positions, at March 31, 2016, if recognized, would affect our effective tax rate. Arctic Cat currently anticipates approximately $0.3 million of unrecognized tax benefits will be recognized during the next twelve months. We have state research and development credit carryforwards of $1.4 and $1.0 million offset by valuation allowances as of March 31, 2016 and 2015, respectively, with expiration dates to March 2031. With few exceptions, we are no longer subject to federal, state, or foreign income tax examinations for years prior to March 31, 2012. A reconciliation of the amount of unrecognized tax benefits excluding interest and penalties is as follows ($ in thousands): 2016 2015 Balance at beginning of period $ 1,828 $ 1,707 Increases related to prior year tax positions 50 72 Decreases related to prior year tax positions (1,033 ) (143 ) Increases related to current year tax positions 200 192 Settlements — — Balance at end of period $ 1,045 $ 1,828 Arctic Cat is subject to income taxes in the U.S. federal jurisdiction, and various state jurisdictions, as well as various European jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the relevant tax laws and regulations and require significant judgment to apply. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES Product Liability and Litigation We are subject to product liability and intellectual property legal proceedings and claims, as well as other litigation, arising in the normal course of business. Such matters are generally subject to uncertainties and to outcomes that are not predictable and that may not be known for extended periods of time. Litigation occasionally involves claims for punitive, as well as compensatory, damages arising out of the use of our products. Although we are self-insured to some extent, we maintain insurance against certain product liability losses. We are also typically involved in patent litigation cases in which we are asserting, or defending, against patent infringement claims. To prevent possible future infringement of our patents by competitors, we periodically review competitor’s products. To avoid potential liability with respect to competitors’ patents, we regularly review certain patents issued by the United States Patent and Trademark Office and foreign patent offices. Management believes these activities help minimize our risk of being a defendant in patent infringement litigation. We are currently involved in patent litigation cases, including cases by or against competitors, where we are asserting and defending against claims of patent infringement. Such cases are at varying stages in the litigation process. We record a reserve in accrued expenses in the Consolidated Balance Sheets based on our estimated range of potential exposures related to claims, including future legal expenditures, settlement and judgments, for which we are aware of, have assessed that a loss is probable and an amount can be reasonably estimated. We utilize historical trends and other analysis to assist in determining the appropriate loss reserve estimate. Should any settlement occur that exceeds our estimate or a new claim arise, we may need to adjust our overall reserve and, depending on the amount, such adjustment could be material. We are not involved in any legal proceedings which we believe will have a materially adverse impact on our business or financial condition, results of operations or cash flows. Dealer Financing Finance companies provide our North American dealers with floorplan financing. We have agreements with these finance companies to repurchase certain repossessed products sold to our dealers. At March 31, 2016, we are contingently liable under these agreements for a maximum repurchase amount of approximately $68.5 million. Our financial exposure under these agreements is limited to the difference between the amount paid to the finance companies for repurchases and the amount received upon the resale of the repossessed product. Losses incurred under these agreements during the periods presented have not been material. The financing agreements also have loss sharing provisions should any dealer default, whereby we share certain losses with the finance companies. The maximum liability to us under these provisions is approximately $2.2 million at March 31, 2016. Purchase Obligations We enter into non-cancelable purchase commitments with certain of our suppliers for materials and supplies as part of the normal course of business. As of March 31, 2016, our purchase obligation under the non-cancelable purchase commitments was $45.1 million. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 11. SEGMENT REPORTING The presentation of segment information represents our method of internal reporting for making operating decisions and assessing performance, which generally segregates the operating segments by product line. The internal reporting of these operating segments is based, in part, on the management process utilized by our President and Chief Executive Officer, who is our chief operating decision maker. Based on this management process, we have two operating segments: (1) Snowmobile and ATV/ROV and (2) PG&A, which also represent our two reportable segments. We aggregate our snowmobile and ATV/ROV operating segments into one operating segment, as the segments have similar economic characteristics. Given the crossover of customers, manufacturing and asset management, we do not maintain separate balance sheets for each segment. Accordingly, the segment information presented below is limited to sales and gross profit data ($ in thousands). Years ended March 31, 2016 2015 2014 Net sales Snowmobile and ATV/ROV units $ 534,600 $ 584,873 $ 615,608 PG&A 98,295 113,883 114,883 Total net sales 632,895 698,756 730,491 Cost of goods sold Snowmobile and ATV/ROV units 476,194 505,383 506,707 PG&A 66,034 73,924 72,705 Total cost of goods sold 542,228 579,307 579,412 Gross profit Snowmobile and ATV/ROV units 58,406 79,490 108,901 PG&A 32,261 39,959 42,178 Total gross profit $ 90,667 $ 119,449 $ 151,079 Years ended March 31, 2016 2015 2014 Net sales by product line Snowmobile units $ 258,788 $ 300,731 $ 282,442 ATV/ROV units 275,812 284,142 333,166 PG&A 98,295 113,883 114,883 Total net sales $ 632,895 $ 698,756 $ 730,491 Years ended March 31, 2016 2015 2014 Net sales by geography, based on location of the customer United States $ 395,684 $ 420,687 $ 404,347 Canada 174,658 192,524 215,631 Europe and other 62,553 85,545 110,513 Total net sales $ 632,895 $ 698,756 $ 730,491 During fiscal 2016, no individual customer accounted for greater than 10% of our net sales. Sales to Yamaha and its subsidiaries in the aggregate accounted for 10.4% of net sales in fiscal year 2015. No sales to an individual customer accounted for more than 10% of fiscal year 2014 net sales. Property and equipment, net, by geography are presented in the table below ($ in thousands): Years ended March 31, 2016 2015 Long-lived assets by geography United States $ 88,623 $ 69,113 Canada and Europe 223 336 Total long-lived assets $ 88,846 $ 69,449 |
NEW MARKET TAX CREDIT TRANSACTI
NEW MARKET TAX CREDIT TRANSACTION | 12 Months Ended |
Mar. 31, 2016 | |
Text Block [Abstract] | |
NEW MARKET TAX CREDIT TRANSACTION | 12. NEW MARKET TAX CREDIT TRANSACTION In February 2016, we entered into a transaction with Wells Fargo Community Development Enterprises, Inc. (“Wells Fargo” or “investors”), related to an investment in equipment at our manufacturing facility in Thief River Falls, Minnesota (the “project”). As part of the transaction, Wells Fargo made a contribution to and Arctic Cat Sales Inc. made a loan to, WF Paint & Assembly Investment Fund, LLC (the “Investment Fund”) under the New Market Tax Credit (“NMTC”) program. The NMTC program was provided for in the Community Renewal Tax Relief Act of 2000 (the “Act”) and is intended to induce investment in low-income communities. The Act permits taxpayers, whether companies or individuals, to claim credits against their federal income taxes for up to 39% of qualified investments in the equity of community development entities (“CDEs”). CDEs are privately managed investment institutions that are certified to make qualified low-income community investments. In connection with the transaction, Arctic Cat Sales Inc. loaned $10.8 million to the Investment Fund at an interest rate of 3.75% per year and with a maturity of June 30, 2032. The Investment Fund then contributed the loan to certain CDEs, which, in turn, loaned the funds to Arctic Cat Production Support LLC, our direct, wholly-owned subsidiary at an interest rate of 3.106%. The proceeds of the loans from the CDEs (including loans representing the capital contribution made by the investors, net of syndication fees) will be used to fund the equipment investments. In exchange for its $5.3 million contribution to the Investment Fund, Wells Fargo is entitled to substantially all of the tax benefits derived from the NMTC transaction, while we effectively received net proceeds equal to Wells Fargo’s contributions to the Investment Fund less direct and incremental transaction costs. This transaction includes a put/call provision whereby we may be obligated or entitled to repurchase Wells Fargo’s interest in the Investment Fund. We believe that the investor will exercise the put option in February 2023 at the end of the recapture period. If the investor does not exercise the put option, we have a call option to purchase the Investment Fund at fair value. The value attributed to the put/call is de minimis. The NMTC is subject to 100% recapture for a period of seven years as provided in the Internal Revenue Code. We are required to be in compliance with various regulations and contractual provisions that apply to the NMTC arrangement. Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, could require us to indemnify Wells Fargo for any loss or recapture of NMTC’s until such time as our obligation to deliver tax benefits is relieved. We do not anticipate any tax credit recaptures will be required in connection with this arrangement. We have determined that the Investment Fund is a VIE, of which we are the primary beneficiary and, as such, we have consolidated the Investment Fund. The ongoing activities of the Investment Fund—collecting and remitting interest and fees and NMTC compliance—were all considered in the initial design and are not expected to significantly affect economic performance throughout the life of the Investment Fund. We also considered the contractual arrangements that obligate us to deliver tax benefits and provide various other guarantees to the structure; Wells Fargo’s lack of a material interest in the underlying economics of the project; and the fact that we are obligated to absorb losses of the Investment Fund in determining we are the primary beneficiary. Based on the contractual arrangements that obligate us to deliver tax benefits to Wells Fargo, we have included Wells Fargo’s contribution within other liabilities in our Consolidated Balance Sheets. The benefit of this net $5.3 million contribution will be recognized as earnings at the end of the seven year recapture period, when our performance obligation is relieved. Direct and incremental costs incurred in structuring the financing arrangement of $0.9 million have been deferred within other assets in the Consolidated Balance Sheets and will be recognized in proportion to the recognition of the related profits. Incremental costs to maintain the structure during the compliance period will be recognized as incurred. |
QUARTERLY FINANCIAL DATA (Unaud
QUARTERLY FINANCIAL DATA (Unaudited) | 12 Months Ended |
Mar. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (Unaudited) | 13. QUARTERLY FINANCIAL DATA (Unaudited) ($ in thousands, except per share Total Year First Quarter Second Quarter Third Quarter Fourth Quarter Net Sales 2016 $ 632,895 $ 134,381 $ 211,157 $ 166,000 $ 121,357 2015 698,756 143,639 262,479 193,735 98,903 2014 730,491 120,768 238,525 225,790 145,408 Gross Profit (Loss) 2016 $ 90,667 $ 22,562 $ 43,918 $ 24,250 $ (63 ) 2015 119,449 30,801 55,081 34,913 (1,346 ) 2014 151,079 29,160 61,674 40,213 20,032 Net Earnings (Loss) 2016 $ (9,187 ) $ (1,056 ) $ 11,171 $ (2,397 ) $ (16,905 ) 2015 4,920 3,569 15,389 7,487 (21,525 ) 2014 39,404 5,468 23,365 12,120 (1,549 ) Net Earnings (Loss) Per Share 2016 Basic $ (0.71 ) $ (0.08 ) $ 0.86 $ (0.18 ) $ (1.30 ) Diluted (0.71 ) (0.08 ) 0.85 (0.18 ) (1.30 ) 2015 Basic 0.38 0.28 1.19 0.58 (1.66 ) Diluted 0.38 0.27 1.18 0.57 (1.66 ) 2014 Basic 2.97 0.41 1.75 0.90 (0.12 ) Diluted 2.90 0.40 1.70 0.89 (0.12 ) |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Arctic Cat designs, engineers, manufactures and markets snowmobiles, all-terrain vehicles (ATVs), recreational off-highway vehicles (“side-by-sides” or “ROVs”) and related parts, garments and accessories (PG&A) under the Arctic Cat ® ® Our business is organized into three operating segments based on our product lines: (1) snowmobile; (2) ATV/ROV and (3) PG&A. We aggregate the snowmobile and ATV/ROV segments into one operating segment, as the segments have similar economic characteristics. Accordingly, we have two reportable segments: (1) snowmobiles and ATV/ROV and (2) PG&A. See Note 11, Segment Reporting |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Arctic Cat Inc. and its consolidated subsidiaries. We also consolidate, regardless of our ownership percentage, variable interest entity’s (“VIE’s”) for which we are deemed to have a controlling financial interest. All intercompany accounts and transactions are eliminated upon consolidation. When we obtain an economic interest in an entity, we evaluate the entity to determine if the entity is a VIE, and if we are deemed to be a primary beneficiary. As a part of our evaluation, we are required to qualitatively assess if we are the primary beneficiary of the VIE based on whether we hold the power to direct those matters that most significantly impacted the activities of the VIE and the obligation to absorb losses or the right to receive the benefits of the VIE that could potentially be significant. Refer to Note 12, New Market Tax Credit Transaction In preparing the accompanying consolidated financial statements, we evaluated the period from April 1, 2016, through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified for this period. |
Use of Estimates | Use of Estimates The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, related revenues and expenses and disclosure about contingent assets and liabilities at the date of the financial statements. We base our estimates on historical experience and on other various assumptions believed to be reasonable under the circumstances. We believe that such estimates are established using consistent, reasonable and appropriate methods. Accordingly, actual results could differ from the estimates used by management. |
Reclassifications | Reclassifications Certain prior period Consolidated Balance Sheet and Notes to Consolidated Financial Statement amounts have been reclassified to conform to the fiscal 2016 financial statement presentation. The reclassifications had no effect on previously reported operating results. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At times, certain bank deposits may be in excess of federally insured limits. As of March 31, 2016 and 2015, Arctic Cat had approximately $7.2 and $19.2 million, respectively, of cash located in foreign banks primarily in Europe and Canada. |
Accounts Receivable and Allowance for Uncollectible Accounts | Accounts Receivable and Allowance for Uncollectible Accounts Our accounts receivable balance consists of amounts due from our dealers and finance companies. We extend credit to our dealers based on an evaluation of the dealers’ financial condition. Our collection exposure relating to accounts receivable amounts due from dealer floorplan finance institutions is limited due to the financial strength of the finance institutions and provisions of our existing agreements. Accounts receivable is presented net of an allowance for estimated uncollectible amounts due from our dealers. We estimate uncollectible amounts considering numerous factors, mainly the length of time the receivables are past due, the historical collection experience and existing economic conditions. Our allowance for uncollectible accounts was $1.8 and $1.9 million at March 31, 2016 and 2015, respectively. Account balances are charged off against the allowance when all collection efforts have been exhausted. Amounts which are considered to be uncollectible are written off and recoveries of amounts previously written off are credited to the allowance upon recovery. Accounts receivable amounts written off have been within management’s expectations. The activity in the allowance for uncollectible accounts for accounts receivable is as follows ($ in thousands): 2016 2015 Balance at beginning of period $ 1,897 $ 1,988 Provisions charged to expense 40 287 Deductions for amounts written-off (143 ) (378 ) Balance at end of period $ 1,794 $ 1,897 |
Inventories | Inventories Inventories are valued at the lower of cost or market, with cost determined using the first-in, first-out method. Manufacturing costs include materials, labor, freight-in, and manufacturing overhead. Unallocated overhead and abnormal costs are expensed as incurred. Market represents the estimated selling price in the ordinary course of business less cost to sell and considers general market and economic conditions, reviews of current profitability of products, product warranty costs and the effect of current and expected incentive offers as of the balance sheet date. We establish a reserve for excess, slow-moving, and obsolete inventory that is equal to the difference between the cost and estimated net realizable value for that inventory. These reserves are based on a review and comparison of current inventory levels to planned production, as well as planned and historical sales of the inventory. Additionally, due to significant movements of partially-manufactured components and parts between manufacturing plants, we do not internally measure, nor do our accounting systems provide, a meaningful segregation between raw materials and work-in-process. Inventories consist of the following at March 31 ($ in thousands): 2016 2015 Raw materials and sub-assemblies $ 35,770 $ 41,045 Finished goods 64,127 77,763 Parts, garments and accessories 40,110 33,635 $ 140,007 $ 152,443 Losses resulting from the application of lower of cost or market accounting were not material for the years ended March 31, 2016, 2015 and 2014, respectively. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities We enter into forward exchange contracts to protect against exposure to currency fluctuations on transactions denominated in foreign currencies, namely the Canadian dollar and Japanese yen. The contracts are designated as, and meet the criteria for, cash flow hedges. We do not enter into forward contracts for the purpose of trading or speculative purposes. Derivatives are recognized on the Consolidated Balance Sheets at fair value, and the effective portion of the change in the fair value of the derivative is recorded in accumulated other comprehensive income (loss), net of tax, and subsequently reclassified into operating expense upon completing transfers of Canadian dollar or Japanese yen funds when the hedged item affects earnings. |
Fair Value Measurements | Fair Value Measurements We record certain assets and liabilities at fair value in the financial statements; some of these are measured on a recurring basis while others are measured on a non-recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when required by particular events or circumstances. A fair value hierarchy has been established, which requires classification based on observable and unobservable inputs when measuring fair value. Refer to Note 2, Fair Value Measurements |
Property and Equipment, Net | Property and Equipment, Net Property and equipment is stated at cost. Major improvements that extend the useful life or add functionality are capitalized and repairs and maintenance cost that are considered not to extend the useful life of the property and equipment are expensed as incurred. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, using the straight-line method for all property, equipment and tooling. Tooling is depreciated over the life of the product, generally 3-5 years. Estimated service lives range from 15-39 years for buildings and improvements and 5-15 years for machinery and equipment. Accelerated and straight-line methods are used for income tax reporting. Upon disposal of property and equipment, the cost and accumulated depreciation are removed from the Consolidated Balance Sheets and the resulting gain or loss is reflected in earnings. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets include property and equipment and definite-life intangible assets. We evaluate the carrying value of long-lived assets for impairment when events or changes in business circumstances indicate that the carrying amount of an asset, or asset group, may not be fully recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets, the carrying value is reduced to the estimated fair value as measured by quoted market prices or other valuation techniques (e.g., discounted cash flow analysis) and an accompanying impairment loss is recognized within earnings. Fair value is primarily determined using discounted cash flow analyses; however, other methods may be used to determine the fair value, including third party valuations when necessary. We recognized no impairment of long-lived assets in fiscal years 2016, 2015 and 2014. |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. We test goodwill for impairment annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. An impairment charge for goodwill is recognized only when the estimated fair value of a reporting unit, including goodwill, is less than its carrying amount. Our impairment testing for goodwill is performed separately from our impairment testing of indefinite-lived intangible assets, but the income approach is utilized for both in determining fair value. We test goodwill and indefinite-lived intangible assets for impairment at the reporting unit level and individual indefinite-lived intangible asset level, respectively. Under the income approach, we calculate the fair value of our four reporting units and indefinite-lived intangible assets using the present value of future cash flows. Individual indefinite-lived intangible assets are tested by comparing the book values of each asset to the estimated fair value. Our estimate of fair value for indefinite-lived intangible assets uses projected revenues from our forecasting process, assumed royalty rates, and a discount rate. Assumptions in our impairment evaluations, such as forecasted growth rates and cost of capital, are consistent with internal projections and operating plans. Materially different assumptions regarding future performance of our businesses or a different weighted-average cost of capital could result in impairment losses or additional amortization expense. We perform a two-step quantitative test for goodwill impairment. First, we compare the carrying value of a reporting unit, including goodwill, to its fair value. The fair value of each reporting unit is estimated using a discounted cash flow model. Where available, and as appropriate, comparable market multiples and our company’s market capitalization are also utilized to corroborate the results of the discounted cash flow models. If the first step indicates the carrying value exceeds the fair value of the reporting unit, then a second step must be completed in order to determine the amount of goodwill impairment that should be recorded. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill. The implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge is recorded for the difference. Identifiable intangible assets are amortized over their useful lives on a straight-line basis, unless the useful life is determined to be indefinite. The useful life of an identifiable definite-lived intangible asset is based on an analysis of several factors, including contractual, regulatory or legal obligations, demand, competition, and industry trends. Refer to Note 4, Goodwill and Intangible Assets |
Product Warranties | Product Warranties We generally provide a limited warranty on snowmobiles for 12 months from the date of consumer registration and for six months from the date of consumer registration on ATVs and ROVs. We may provide longer warranties in certain geographical markets as determined by local regulations and market conditions, as well as related to certain promotional programs. We provide for estimated warranty costs at the time of sale based on historical rates and trends. Subsequent adjustments are made to the warranty reserve as actual claims become known or the amounts are determinable, including costs associated with safety recalls, which may occur after the standard warranty period. The following represents changes in our accrued warranty liability for the fiscal years 2016, 2015 and 2014 ($ in thousands): 2016 2015 2014 Balance at beginning of period $ 23,062 $ 19,357 $ 18,709 Warranty provision 13,864 21,499 16,770 Warranty claim payments (12,117 ) (17,794 ) (16,122 ) Balance at end of period $ 24,809 $ 23,062 $ 19,357 |
Insurance | Insurance We are self-insured for certain losses relating to employee medical, workers’ compensation, and certain product liability claims. Specific stop loss coverages are provided for catastrophic claims in order to mitigate our exposure. Under these plans, liabilities are recognized for claims incurred, including those incurred but not reported. Losses and claims are charged to operations when it is probable a loss has been incurred and the amount can be reasonably estimated. |
Revenue Recognition | Revenue Recognition We recognize revenue and provide for estimated marketing and sales incentive costs when persuasive evidence of an arrangement exists; delivery has occurred and ownership has transferred to the customer; the price to the customer is fixed or determinable; and collectability is reasonably assured. These criteria are generally met when title passes at the time product is shipped to dealers in accordance with shipping terms, which are primarily freight-on-board shipping point. Most sales are made to dealers financing their purchases under flooring arrangements with financial institutions. At the time of revenue recognition, shipping and handling costs are recorded as a component of costs of goods sold and shipping charges to the dealers are recorded as revenue. Return allowances for parts, garments and accessories are recorded as a reduction of revenue when the revenue is recognized based on our return allowance program and historical experience. Sales tax collected from customers is remitted to the appropriate taxing jurisdictions and is excluded from sales revenue as we consider ourselves a pass-through conduit for collecting and remitting sales taxes. |
Marketing and Sales Incentive Costs | Marketing and Sales Incentive Costs We provide for various marketing and sales incentive costs that are offered to our dealers and consumers at the later of when the revenue is recognized or when the marketing and sales incentive program is approved and communicated for products previously shipped. Examples of these costs, which are recognized as a reduction of revenue when the products are sold, include dealer and consumer rebates, dealer floorplan financing assistance and other incentive and promotional programs. Sales incentives that involve a free product or service delivered to the consumer, such as extended warranties, are recorded as a component of cost of goods sold. We estimate the costs of these various marketing and sales incentive programs based on expected usage considering current program parameters, historical experience, dealer inventory levels, the terms of arrangements with dealers and expectations for changes in relevant trends in the future. Actual results may differ from these estimates if market conditions dictate the need to enhance or reduce sales promotion and incentive programs or if the current market trends vary from historical trends. To the extent current experience differs with previous estimates, the accrued liability for marketing and sales incentives is adjusted accordingly. Historically, marketing and sales incentive accruals have been within our expectations and differences have not been material. |
Dealer Holdback | Dealer Holdback We provide for a dealer holdback program on product sales to our dealer network. The dealer holdback represents a portion of the invoiced sales price that is held by us and is expected to be subsequently returned to the dealer or distributor as a sales incentive upon the ultimate retail sale of the product to the end customer. Holdback amounts reduce the definitive net price of the products purchased by the dealers or distributors and ultimately reduce the amount of sales we recognize at the time of shipment. At the time product revenue is recognized, the portion of the invoiced sales price estimated as the holdback is accrued for as dealer holdback liability within accounts payable on our balance sheet. If the products subject to the holdback program are sold within the program’s term, we refund the holdback to the dealer. Any remaining holdback balances at the expiration of the program’s term are refunded to the dealer or distributor. Our dealer holdback program liability, included within accounts payable, was $17.2 million and $19.8 million as of March 31, 2016 and 2015, respectively. |
Research and Development | Research and Development Research and development costs and are expensed as incurred. Research and development expense was $27.2 million, $24.3 million and $24.0 million during fiscal 2016, 2015 and 2014, respectively. |
Advertising | Advertising We expense advertising costs as incurred, except for cooperative advertising obligations arising related to the sale of our products to our dealers. The estimated cost of cooperative advertising, which the dealer is required to support, is recorded as marketing expense at the time the product is sold. Cooperative advertising was $3.0 million, $3.6 million and $3.4 million in fiscal 2016, 2015 and 2014, respectively. Total advertising expense, including cooperative advertising, was $19.5 million, $18.6 million and $17.6 million in fiscal 2016, 2015 and 2014, respectively. |
Stock-Based Compensation | Stock-Based Compensation Our stock-based compensation awards are generally granted to executive officers, other employees, and non-employee members of the Board of Directors of Arctic Cat (the “Board”), and may include performance share awards that are contingent upon the achievement of performance goals of Arctic Cat. Compensation expense equal to the grant date fair value is recognized for these awards on a straight-line basis over the vesting period and is recorded within general and administrative expense. Refer to Note 7, Shareholders’ Equity |
Foreign Currency | Foreign Currency Our activities with Canadian dealers are denominated in Canadian dollars and our activities with European on-road ATV/ROV dealers and distributors are denominated in the Euro. In addition, we have certain supply contracts that are denominated in Japanese yen. Assets and liabilities denominated in foreign currency are translated using the exchange rates in effect at the balance sheet date. Revenues and expenses are translated at the weighted-average foreign exchange rates in effect for the period. Translation gains and losses relating to the Canadian dollar and Japanese yen are reflected in the results of operations and Euro currency are reflected as a component of other comprehensive income. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are recognized for the expected future income tax consequences of events attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Under this method, deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years that those temporary differences are expected to be recovered or settled. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. Fluctuations in the ultimate outcome of these tax consequences could materially impact our financial position or results of operations. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period in which the enactment takes place. Valuation allowances are provided when, in management’s judgment, it is more likely than not that some portion or all of the benefit of the deferred tax asset will not be recognized. We recognize the effect of uncertain income tax positions only if the weight of available evidence of those positions indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. It is inherently difficult and subjective to estimate such amounts, as we have to determine the probability of various possible outcomes. We reevaluate these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, voluntary settlements and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision. We also record interest and penalties related to unrecognized tax benefits in income tax expense. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Lease Accounting In November 2015, the FASB issued ASU 2015-17, Income Taxes In July 2015, the FASB issued ASU 2015-11, Inventory In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Allowance for Uncollectible Accounts for Accounts Receivable | The activity in the allowance for uncollectible accounts for accounts receivable is as follows ($ in thousands): 2016 2015 Balance at beginning of period $ 1,897 $ 1,988 Provisions charged to expense 40 287 Deductions for amounts written-off (143 ) (378 ) Balance at end of period $ 1,794 $ 1,897 |
Components of Inventories | Inventories consist of the following at March 31 ($ in thousands): 2016 2015 Raw materials and sub-assemblies $ 35,770 $ 41,045 Finished goods 64,127 77,763 Parts, garments and accessories 40,110 33,635 $ 140,007 $ 152,443 |
Changes in Accrued Warranty Liability | The following represents changes in our accrued warranty liability for the fiscal years 2016, 2015 and 2014 ($ in thousands): 2016 2015 2014 Balance at beginning of period $ 23,062 $ 19,357 $ 18,709 Warranty provision 13,864 21,499 16,770 Warranty claim payments (12,117 ) (17,794 ) (16,122 ) Balance at end of period $ 24,809 $ 23,062 $ 19,357 |
DERIVATIVE INSTRUMENTS AND HE24
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts and Gross Carrying Values of Derivative Instruments | The following table presents the notional amounts and gross carrying values of derivative instruments as of March 31, 2016 and March 31, 2015 ($ in thousands): March 31, 2016 March 31, 2015 Notional Amount Fair Value Notional Amount Fair Value Canadian Dollar (1) $ 87,875 $ (3,837 ) $ 76,328 $ 3,628 Japanese Yen (1) — — 19,046 (434 ) (1) Assets are included in other current assets and liabilities are included in accrued expenses in the accompanying Consolidated Balance Sheets. (2) Refer to Note 2, Fair Value Measurements |
Summary of Effects of Derivative Instruments on Other Comprehensive Income (OCI) and Consolidated Statements of Operations | The following table presents the effects of derivative instruments on other comprehensive income (OCI) and on our Consolidated Statements of Operations for the years ended March 31, 2016, 2015 and 2014 ($ in thousands): March 31, 2016 March 31, 2015 Pre-Tax Pre-Tax Gain Pre-Tax Pre-Tax Gain Canadian Dollar (1) $ (111 ) $ 7,354 $ 6,047 $ 1,996 Japanese Yen (1) (374 ) (808 ) — — (1) Canadian Dollar contracts are included in general and administrative expenses and Japanese Yen contracts are included in cost of goods sold in the accompanying Consolidated Statements of Operations. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended March 31, 2016 and 2015 are as follows ($ in thousands): 2016 2015 Gross Carrying Gross Carrying Balance as of beginning of year $ 3,342 $ — Goodwill acquired during the period — 3,342 Balance as of end of year $ 3,342 $ 3,342 |
Summary of Carrying Amount of Indefinite-Lived Intangible Assets | The carrying amount of indefinite-lived intangible assets as of March 31, 2016 and 2015 are as follows ($ in thousands): 2016 2015 Gross Carrying Gross Carrying Indefinite-lived intangible asset balance as of end of year $ 436 $ 436 |
Summary of Changes in Net Carrying Amount of Definite-Lived Intangible Assets | For definite-lived intangible assets, the changes in the net carrying amount for the years ended March 31, 2016 and 2015 are as follows ($ in thousands): 2016 2015 Gross Accumulated Gross Accumulated Balance as of beginning of year $ 4,312 $ (1,511 ) $ 2,058 $ (1,428 ) Intangible assets acquired during the period — — 2,255 — Amortization expense — (385 ) — (83 ) Currency translation effect on foreign balances 3 — (1 ) — Balance as of end of year $ 4,315 $ (1,896 ) $ 4,312 $ (1,511 ) |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Mar. 31, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments, exclusive of other costs required under non-cancelable operating leases are as follows ($ in thousands): Fiscal year 2017 $ 1,490 2018 1,383 2019 1,248 2020 1,234 2021 1,182 Thereafter 9,042 Total future minimum payments $ 15,579 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Mar. 31, 2016 | |
Stock Option Activity | The following tables summarize the stock option transactions under the Plans during fiscal 2016: Number of Weighted Outstanding at March 31, 2015 604,218 $ 29.39 Granted 121,819 29.57 Cancelled (10,356 ) 36.39 Expired (30 ) 13.59 Exercised (37,442 ) 15.52 Outstanding at March 31, 2016 678,209 $ 30.08 Options exercisable at March 31, 2016 262,734 $ 17.83 Options expected to vest at March 31, 2016 266,806 $ 20.30 |
Assumptions Used to Determine Fair Value of Stock Options/SARs Issued | The weighted average fair value of options granted and the assumptions used to estimate the fair value of options for fiscal 2016, 2015 and 2014 are summarized as follows: 2016 2015 2014 Fair value of options granted $ 13.35 $ 15.24 $ 16.91 Assumptions: Dividend yield 1.2 % 1.0 % 1.0 % Average term 6 years 6 years 5 years Volatility 51.0 % 49.0 % 49.0 % Risk-free rate of return 1.7 % 0.8 % 0.8 % |
Summary of Activity for SARs Awarded | The following table summarizes the activity during fiscal 2016 for SARs awarded pursuant to the Plans: Number of Weighted Weighted Outstanding at March 31, 2015 — $ — Granted 175,000 14.16 Forfeited — — Exercised — — Outstanding at March 31, 2016 175,000 $ 14.16 4.9 years SARs exercisable at March 31, 2016 — $ — — SARs expected to vest at March 31, 2016 144,468 $ 14.16 4.9 years |
Schedule of Weighted Average Shares Outstanding | Weighted average shares outstanding consist of the following for the fiscal 2016, 2015 and 2014 (in thousands): 2016 2015 2014 Weighted average number of common shares outstanding 12,995 12,926 13,275 Dilutive effect of option plan — 163 323 Common and potential shares outstanding—diluted 12,995 13,089 13,598 |
Components of Changes in Accumulated Other Comprehensive Loss | The components of the changes in accumulated other comprehensive loss during fiscal 2016, 2015 and 2014 were as follows ($ in thousands): 2016 2015 2014 Balance at beginning of period $ (7,142 ) $ (2,110 ) $ (4,166 ) Unrealized gain (loss) on derivative instruments, net of tax (4,429 ) 2,279 (241 ) Foreign currency translation adjustment 1,387 (7,311 ) 2,297 Balance at end of period $ (10,184 ) $ (7,142 ) $ (2,110 ) |
Options Outstanding and Exercisable | |
Stock Option Activity | The following tables summarize information concerning currently outstanding and exercisable stock options at March 31, 2016: Range of Exercise Prices Number Weighted Weighted Number Weighted $6.26 - 9.57 3,827 3.34 years $ 6.28 3,827 $ 6.28 10.79 - 145,762 5.09 years 13.97 132,180 13.71 17.78 - 63,051 7.40 years 21.29 48,029 21.72 28.81 - 43.79 432,035 8.32 years 35.65 160,645 38.21 47.52 - 47.52 33,534 7.63 years 47.52 12,228 47.52 678,209 7.48 years $ 30.08 356,909 $ 26.90 |
Stock Appreciation Rights | |
Assumptions Used to Determine Fair Value of Stock Options/SARs Issued | The fair value of the SAR grant was estimated using the Black-Scholes option pricing model and assumptions analogous to our stock option awards, as set forth in the table below: 2016 Fair value of SARs granted $ 6.40 Assumptions: Dividend yield 0.0 % Average term 5 years Volatility 51.0 % Risk-free rate of return 1.4 % |
Restricted Shares | |
Restricted Stock Activity | 2016 2015 Restricted Shares Shares Weighted- Grant Date Shares Weighted- Grant Date Non-vested shares at March 31, 22,500 $ 40.12 16,200 $ 43.45 Awarded 29,063 18.53 20,200 33.67 Vested (9,800 ) 48.75 (10,900 ) 33.81 Forfeited (1,900 ) 24.84 (3,000 ) 37.60 Non-vested shares at March 31, 39,863 $ 22.98 22,500 $ 40.12 |
Restricted Stock Units | |
Restricted Stock Activity | 2016 2015 Restricted Stock Units Shares Weighted- Grant Date Shares Weighted- Grant Date Non-vested shares at March 31, 116,439 $ 35.67 40,103 $ 35.35 Granted 124,558 18.09 135,564 34.81 Vested (44,722 ) 36.15 (57,295 ) 33.14 Forfeited (10,017 ) 16.59 (1,933 ) 43.81 Non-vested shares at March 31, 186,258 $ 24.79 116,439 $ 35.67 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income(Loss) Before Income Tax | Our income (loss) before income taxes was generated from our United States and foreign operations as follows ($ in thousands): For the years ended March 31, 2016 2015 2014 United States $ (17,156 ) $ 5,532 $ 58,655 Foreign 109 678 1,749 Income (loss) before income taxes $ (17,047 ) $ 6,210 $ 60,404 |
Schedule of Income Tax Expense (Benefit) | Income tax expense (benefit) consists of the following for the fiscal years ended March 31 ($ in thousands): 2016 2015 2014 Current Federal $ (5,935 ) $ 2,610 $ 13,345 State (339 ) 149 900 Foreign 27 168 436 Deferred (1,613 ) (1,637 ) 6,319 Total income tax expense (benefit) $ (7,860 ) $ 1,290 $ 21,000 |
Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate | The following is a reconciliation of the federal statutory income tax rate to the effective tax rate for the fiscal years ended March 31: 2016 2015 2014 Statutory income tax rate 35.0 % 35.0 % 35.0 % State taxes 1.8 1.9 1.7 Research and other tax credit 5.6 (16.5 ) (1.0 ) Domestic manufacturers deduction (0.1 ) (0.9 ) (1.4 ) Uncertain tax positions 6.0 (2.3 ) (0.1 ) US subpart F adjustments 0.7 11.1 0.4 Foreign tax rate difference (1.4 ) (9.1 ) (0.2 ) Stock options (0.5 ) 1.3 (0.1 ) Other (1.1 ) 0.3 0.5 46.0 % 20.8 % 34.8 % |
Cumulative Temporary Differences Between Tax Bases of Assets and Liabilities and their Carrying Amounts | The cumulative temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes under the liability method are as follows at March 31 ($ in thousands): 2016 2015 Current deferred income tax assets Accrued expenses $ 3,788 $ 3,934 Accrued warranty 8,855 8,045 Inventory related items 4,269 4,152 Net operating loss carryforwards 1,628 — Other 1,560 313 Less: valuation allowance (351 ) (235 ) Current deferred income tax asset 19,749 16,209 Current deferred income tax liabilities Prepaid expenses 2,043 1,463 Other 477 1,696 Current deferred income tax liability 2,520 3,159 Net current deferred tax asset $ 17,229 $ 13,050 Non-current deferred income tax assets Compensation payable in common stock $ 1,927 $ 1,200 State research and development credits 1,393 1,043 Less: valuation allowance (1,042 ) (808 ) Non-current deferred income tax asset 2,278 1,435 Non-current deferred income tax liability Property and equipment 15,471 11,151 Non-current deferred tax liability 15,471 11,151 Net non-current deferred tax liability $ 13,193 $ 9,716 |
Schedule of Unrecognized Tax Benefits | A reconciliation of the amount of unrecognized tax benefits excluding interest and penalties is as follows ($ in thousands): 2016 2015 Balance at beginning of period $ 1,828 $ 1,707 Increases related to prior year tax positions 50 72 Decreases related to prior year tax positions (1,033 ) (143 ) Increases related to current year tax positions 200 192 Settlements — — Balance at end of period $ 1,045 $ 1,828 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | We aggregate our snowmobile and ATV/ROV operating segments into one operating segment, as the segments have similar economic characteristics. Given the crossover of customers, manufacturing and asset management, we do not maintain separate balance sheets for each segment. Accordingly, the segment information presented below is limited to sales and gross profit data ($ in thousands). Years ended March 31, 2016 2015 2014 Net sales Snowmobile and ATV/ROV units $ 534,600 $ 584,873 $ 615,608 PG&A 98,295 113,883 114,883 Total net sales 632,895 698,756 730,491 Cost of goods sold Snowmobile and ATV/ROV units 476,194 505,383 506,707 PG&A 66,034 73,924 72,705 Total cost of goods sold 542,228 579,307 579,412 Gross profit Snowmobile and ATV/ROV units 58,406 79,490 108,901 PG&A 32,261 39,959 42,178 Total gross profit $ 90,667 $ 119,449 $ 151,079 Years ended March 31, 2016 2015 2014 Net sales by product line Snowmobile units $ 258,788 $ 300,731 $ 282,442 ATV/ROV units 275,812 284,142 333,166 PG&A 98,295 113,883 114,883 Total net sales $ 632,895 $ 698,756 $ 730,491 Years ended March 31, 2016 2015 2014 Net sales by geography, based on location of the customer United States $ 395,684 $ 420,687 $ 404,347 Canada 174,658 192,524 215,631 Europe and other 62,553 85,545 110,513 Total net sales $ 632,895 $ 698,756 $ 730,491 |
Schedule of Property and Equipment, Net by Geography | Property and equipment, net, by geography are presented in the table below ($ in thousands): Years ended March 31, 2016 2015 Long-lived assets by geography United States $ 88,623 $ 69,113 Canada and Europe 223 336 Total long-lived assets $ 88,846 $ 69,449 |
QUARTERLY FINANCIAL DATA (Una30
QUARTERLY FINANCIAL DATA (Unaudited) (Tables) | 12 Months Ended |
Mar. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | ($ in thousands, except per share Total Year First Quarter Second Quarter Third Quarter Fourth Quarter Net Sales 2016 $ 632,895 $ 134,381 $ 211,157 $ 166,000 $ 121,357 2015 698,756 143,639 262,479 193,735 98,903 2014 730,491 120,768 238,525 225,790 145,408 Gross Profit (Loss) 2016 $ 90,667 $ 22,562 $ 43,918 $ 24,250 $ (63 ) 2015 119,449 30,801 55,081 34,913 (1,346 ) 2014 151,079 29,160 61,674 40,213 20,032 Net Earnings (Loss) 2016 $ (9,187 ) $ (1,056 ) $ 11,171 $ (2,397 ) $ (16,905 ) 2015 4,920 3,569 15,389 7,487 (21,525 ) 2014 39,404 5,468 23,365 12,120 (1,549 ) Net Earnings (Loss) Per Share 2016 Basic $ (0.71 ) $ (0.08 ) $ 0.86 $ (0.18 ) $ (1.30 ) Diluted (0.71 ) (0.08 ) 0.85 (0.18 ) (1.30 ) 2015 Basic 0.38 0.28 1.19 0.58 (1.66 ) Diluted 0.38 0.27 1.18 0.57 (1.66 ) 2014 Basic 2.97 0.41 1.75 0.90 (0.12 ) Diluted 2.90 0.40 1.70 0.89 (0.12 ) |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | |||
Mar. 31, 2016USD ($)Reporting_unit | Mar. 31, 2015USD ($) | Mar. 31, 2014USD ($) | Mar. 31, 2013USD ($) | |
Significant Accounting Policies [Line Items] | ||||
Cash and cash equivalents | $ 17,730,000 | $ 40,253,000 | $ 22,524,000 | $ 35,566,000 |
Allowance for uncollectible accounts | 1,794,000 | 1,897,000 | 1,988,000 | |
Impairment charge of long-lived assets recognized | $ 0 | 0 | 0 | |
Number of reporting units | Reporting_unit | 4 | |||
Company's dealer holdback program liability | $ 17,200,000 | 19,800,000 | ||
Research and development expense | 27,162,000 | 24,341,000 | 23,998,000 | |
Cooperate advertising expense | 3,000,000 | 3,600,000 | 3,400,000 | |
Total advertising expense | $ 19,500,000 | 18,600,000 | $ 17,600,000 | |
Percentage of likelihood for realization of benefit upon ultimate settlement to recognize income tax benefit minimum | 50.00% | |||
Minimum | Buildings and Improvements | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated service lives | 15 years | |||
Minimum | Machinery and Equipment | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated service lives | 5 years | |||
Minimum | Tooling | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated service lives | 3 years | |||
Maximum | Buildings and Improvements | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated service lives | 39 years | |||
Maximum | Machinery and Equipment | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated service lives | 15 years | |||
Maximum | Tooling | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated service lives | 5 years | |||
Allowance for Uncollectible Accounts | ||||
Significant Accounting Policies [Line Items] | ||||
Allowance for uncollectible accounts | $ 1,800,000 | 1,900,000 | ||
Europe and Canada | ||||
Significant Accounting Policies [Line Items] | ||||
Cash and cash equivalents | $ 7,200,000 | $ 19,200,000 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Schedule of Allowance for Uncollectible Accounts for Accounts Receivable (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Receivables [Abstract] | ||
Balance at beginning of period | $ 1,897 | $ 1,988 |
Provisions charged to expense | 40 | 287 |
Deductions for amounts written-off | (143) | (378) |
Balance at end of period | $ 1,794 | $ 1,897 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Components of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Mar. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials and sub-assemblies | $ 35,770 | $ 41,045 |
Finished goods | 64,127 | 77,763 |
Parts, garments and accessories | 40,110 | 33,635 |
Inventory, Total | $ 140,007 | $ 152,443 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Changes in Accrued Warranty Liability (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Product Warranties Disclosures [Abstract] | |||
Product Warranty Accrual, Beginning of period | $ 23,062 | $ 19,357 | $ 18,709 |
Warranty provision | 13,864 | 21,499 | 16,770 |
Warranty claim payments | (12,117) | (17,794) | (16,122) |
Product Warranty Accrual, End of period | $ 24,809 | $ 23,062 | $ 19,357 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on nonrecurring basis | $ 0 | $ 0 |
Fair Value, Inputs, Level 2 | Canadian Dollar Foreign Currency Contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency contract fair value asset | 100,000 | 3,600,000 |
Foreign currency contract fair value liability | $ 3,900,000 | |
Fair Value, Inputs, Level 2 | Japanese Yen Foreign Currency Contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency contract fair value liability | $ 400,000 |
Derivative Instruments and He36
Derivative Instruments and Hedging Activities - Additional Information (Detail) - Forward Currency Contracts | 12 Months Ended |
Mar. 31, 2016 | |
Canadian Dollar | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Foreign currency forward contracts maximum term | 12 months |
Japanese Yen | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Foreign currency forward contracts maximum term | 12 months |
Derivative Instruments and He37
Derivative Instruments and Hedging Activities - Schedule of Notional Amounts and Gross Carrying Values of Derivative Instruments (Detail) - Forward Currency Contracts - USD ($) | Mar. 31, 2016 | Mar. 31, 2015 |
Canadian Dollar | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional Amount | $ 87,875,000 | $ 76,328,000 |
Fair Value Asset | $ 3,837,000 | 3,628,000 |
Japanese Yen | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional Amount | 19,046,000 | |
Fair Value Asset (Liability) | $ (434,000) |
Derivative Instruments and He38
Derivative Instruments and Hedging Activities - Summary of Effects of Derivative Instruments on Other Comprehensive Income (OCI) and Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Canadian Dollar | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Pre-Tax Gain (Loss) Recognized in OCI | $ (111) | $ 6,047 |
Pre-Tax Gain (Loss) Reclassified from Accumulated OCI to Earnings (Effective Portion) | 7,354 | $ 1,996 |
Japanese Yen | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Pre-Tax Gain (Loss) Recognized in OCI | (374) | |
Pre-Tax Gain (Loss) Reclassified from Accumulated OCI to Earnings (Effective Portion) | $ (808) |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets - Summary of Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance as of beginning of year | $ 3,342 | |
Goodwill acquired during the period | 0 | $ 3,342 |
Balance as of end of year | $ 3,342 | $ 3,342 |
Goodwill and Intangible Asset40
Goodwill and Intangible Assets - Summary of Carrying Amount of Indefinite-Lived Intangible Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Mar. 31, 2015 |
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Indefinite-lived intangible asset balance as of end of year | $ 436 | $ 436 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets - Summary of Changes in Net Carrying Amount of Definite-Lived Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance as of beginning of year, Gross Carrying Amount | $ 4,312 | $ 2,058 |
Intangible assets acquired during the period, Gross Carrying Amount | 2,255 | |
Amortization expense, Gross Carrying Amount | 0 | 0 |
Currency translation effect on foreign balances, Gross Carrying Amount | 3 | (1) |
Balance as of end of year, Gross Carrying Amount | 4,315 | 4,312 |
Balance as of beginning of year, Accumulated Amortization | (1,511) | (1,428) |
Intangible assets acquired during the period, Accumulated Amortization | 0 | 0 |
Amortization expense, Accumulated Amortization | (385) | (83) |
Currency translation effect on foreign balances, Accumulated Amortization | 0 | 0 |
Balance as of end of year, Accumulated Amortization | $ (1,896) | $ (1,511) |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets - Additional Information (Detail) $ in Millions | Mar. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization expense, in fiscal 2017 | $ 0.4 |
Amortization expense, in fiscal 2018 | 0.4 |
Amortization expense, in fiscal 2019 | 0.4 |
Amortization expense, in fiscal 2020 | 0.4 |
Amortization expense, in fiscal 2021 | $ 0.3 |
Financing - Additional Informat
Financing - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 10, 2016 | Mar. 31, 2015 | |
Line of Credit Facility [Line Items] | |||
Line of credit Interest rate description | Borrowings under the line are subject to certain covenants and restrictions on indebtedness, financial guarantees, business combinations and other related items. We were in compliance with the terms of the credit agreement as of March 31, 2016. | ||
Senior Secured Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Maturity date | Mar. 10, 2021 | ||
Senior secured revolving credit agreement description | We amended our credit facility to extend the maturity date from November 10, 2017 to March 10, 2021 and increase our maximum permissible borrowings from $100.0 million to $130.0 million during May through November and from $50.0 million to $75.0 million during all other months of the fiscal year. | ||
Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Outstanding letters of credit balances | $ 0 | $ 0 | |
Letter of Credit | |||
Line of Credit Facility [Line Items] | |||
Outstanding letters of credit balances | 3,500,000 | $ 7,900,000 | |
Minimum | Senior Secured Revolving Credit Facility | May through November | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility maximum borrowing capacity value | $ 100,000,000 | ||
Minimum | Senior Secured Revolving Credit Facility | All other months | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility maximum borrowing capacity value | $ 50,000,000 | ||
Minimum | Senior Secured Revolving Credit Facility | LIBOR Loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit, basis spread variable rate | 1.00% | ||
Minimum | Senior Secured Revolving Credit Facility | Base Rate Loans | |||
Line of Credit Facility [Line Items] | |||
Line of credit, basis spread variable rate | 0.00% | ||
Maximum | Senior Secured Revolving Credit Facility | May through November | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility maximum borrowing capacity value | $ 130,000,000 | ||
Maximum | Senior Secured Revolving Credit Facility | All other months | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility maximum borrowing capacity value | $ 75,000,000 | ||
Maximum | Senior Secured Revolving Credit Facility | LIBOR Loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit, basis spread variable rate | 1.50% | ||
Maximum | Senior Secured Revolving Credit Facility | Base Rate Loans | |||
Line of Credit Facility [Line Items] | |||
Line of credit, basis spread variable rate | 0.50% |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Leases, Operating [Abstract] | |||
Total rent expense under lease agreement | $ 1.4 | $ 1.9 | $ 1.4 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Detail) $ in Thousands | Mar. 31, 2016USD ($) |
Leases, Operating [Abstract] | |
Future minimum lease payments, 2017 | $ 1,490 |
Future minimum lease payments, 2018 | 1,383 |
Future minimum lease payments, 2019 | 1,248 |
Future minimum lease payments, 2020 | 1,234 |
Future minimum lease payments, 2021 | 1,182 |
Future minimum lease payments, Thereafter | 9,042 |
Total future minimum payments | $ 15,579 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Feb. 29, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | Aug. 07, 2014 | May. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for grant | 620,703 | |||||
Stock-based compensation expense | $ 4,294,000 | $ 4,087,000 | $ 2,584,000 | |||
Unrecognized compensation costs related to non-vested stock options, restricted stock awards and SARs awards | $ 9,300,000 | |||||
Compensation expense related to non-vested stock options, restricted stock and SARs awards, weighted average period of recognition | 2 years | |||||
Stock options outstanding, aggregate intrinsic value | $ 500,000 | $ 5,300,000 | $ 10,900,000 | |||
Stock options outstanding, weighted-average contractual life | 7 years 5 months 23 days | 8 years 11 days | 5 years 1 month 2 days | |||
Stock options exercisable, aggregate intrinsic value | $ 400,000 | |||||
Stock options exercisable, weighted-average contractual life | 6 years 3 months 26 days | |||||
Volatility look back period | 6 years | |||||
Stock and option grants, forfeiture rate | 10.00% | |||||
Preferred stock, authorized for issuance | 2,050,000 | 2,050,000 | ||||
Preferred stock, par value | $ 1 | $ 1 | ||||
Preferred stock, shares issued | 0 | 0 | ||||
Value of shares repurchased and canceled | $ 100,000 | $ 1,000,000 | $ 28,200,000 | |||
Number of shares repurchased and canceled | 5,162 | 27,925 | 633,816 | |||
Stock repurchase program remaining authorized repurchase value | $ 25,900,000 | $ 1,100,000 | ||||
Stock repurchase program authorized repurchase value | $ 25,000,000 | |||||
Unrealized gains on derivative instruments, tax expense | 2,600,000 | $ 1,300,000 | $ 100,000 | |||
Tax impact on foreign currency translation adjustments | $ 0 | |||||
Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options to purchase common stock excluded from computation of net earnings (loss) per share | 449,432 | 156,432 | 0 | |||
Common stock option, weighted average exercise prices | $ 35.50 | $ 44.14 | ||||
Preferred Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Preferred stock, authorized for issuance | 2,500,000 | |||||
Preferred stock, par value | $ 1 | |||||
Preferred stock, shares issued | 0 | |||||
Preferred Stock - Series B Junior Participating | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Preferred stock, authorized for issuance | 450,000 | 450,000 | ||||
Preferred stock, par value | $ 1 | $ 1 | ||||
Preferred stock, shares issued | 0 | 0 | ||||
Restricted Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares awarded | 29,063 | 20,200 | ||||
Stock Appreciation Rights | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock appreciation rights granted, vesting period | 5 years | 3 years | ||||
Stock options outstanding, weighted-average contractual life | 4 years 10 months 24 days | |||||
Number of shares awarded | 175,000 | |||||
Stock Options, Restricted Stocks And Stock Appreciation Rights | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ 4,300,000 | $ 4,100,000 | $ 2,600,000 | |||
Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock appreciation rights granted, vesting period | 1 year | |||||
Stock options awards, expiration period | 5 years | |||||
Minimum | Restricted Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock appreciation rights granted, vesting period | 2 years | |||||
Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock appreciation rights granted, vesting period | 3 years | |||||
Stock options awards, expiration period | 10 years | |||||
Current market value of common stock | $ 33 | |||||
Maximum | Restricted Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock appreciation rights granted, vesting period | 3 years |
Shareholders' Equity - Stock Op
Shareholders' Equity - Stock Option Transactions Under Plans (Detail) | 12 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Shares, Outstanding beginning balance | shares | 604,218 |
Number of Shares Under Option, Granted | shares | 121,819 |
Number of Shares Under Option, Cancelled | shares | (10,356) |
Number of Shares Under Option, Expired | shares | (30) |
Number of Shares Under Option, Exercised | shares | (37,442) |
Number of Shares Under Option, Outstanding ending balance | shares | 678,209 |
Number of Shares Under Option, Options exercisable | shares | 262,734 |
Number of Shares Under Option, Options exercisable | shares | 266,806 |
Weighted Average Exercise Price, Outstanding beginning balance | $ / shares | $ 29.39 |
Weighted Average Exercise Price, Granted | $ / shares | 29.57 |
Weighted Average Exercise Price, Cancelled | $ / shares | 36.39 |
Weighted Average Exercise Price, Expired | $ / shares | 13.59 |
Weighted Average Exercise Price, Exercised | $ / shares | 15.52 |
Weighted Average Exercise Price, Outstanding ending balance | $ / shares | 30.08 |
Weighted Average Exercise Price, Options exercisable | $ / shares | 17.83 |
Weighted Average Exercise Price, Options exercisable | $ / shares | $ 20.30 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Information Concerning Currently Outstanding and Exercisable Stock Options (Detail) - $ / shares | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number Outstanding | 678,209 | ||
Weighted Average Remaining Contractual Life | 7 years 5 months 23 days | 8 years 11 days | 5 years 1 month 2 days |
Weighted Average Exercise Price | $ 30.08 | ||
Number Exercisable | 262,734 | ||
Weighted Average Exercise Price | $ 17.83 | ||
6.26 - 9.57 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Range of Exercise Prices, Minimum | 6.26 | ||
Range of Exercise Prices, Maximum | $ 9.57 | ||
Number Outstanding | 3,827 | ||
Weighted Average Remaining Contractual Life | 3 years 4 months 2 days | ||
Weighted Average Exercise Price | $ 6.28 | ||
Number Exercisable | 3,827 | ||
Weighted Average Exercise Price | $ 6.28 | ||
10.79 - 16.45 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Range of Exercise Prices, Minimum | 10.79 | ||
Range of Exercise Prices, Maximum | $ 16.45 | ||
Number Outstanding | 145,762 | ||
Weighted Average Remaining Contractual Life | 5 years 1 month 2 days | ||
Weighted Average Exercise Price | $ 13.97 | ||
Number Exercisable | 132,180 | ||
Weighted Average Exercise Price | $ 13.71 | ||
17.78 - 27.69 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Range of Exercise Prices, Minimum | 17.78 | ||
Range of Exercise Prices, Maximum | $ 27.69 | ||
Number Outstanding | 63,051 | ||
Weighted Average Remaining Contractual Life | 7 years 4 months 24 days | ||
Weighted Average Exercise Price | $ 21.29 | ||
Number Exercisable | 48,029 | ||
Weighted Average Exercise Price | $ 21.72 | ||
28.81 - 43.79 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Range of Exercise Prices, Minimum | 28.81 | ||
Range of Exercise Prices, Maximum | $ 43.79 | ||
Number Outstanding | 432,035 | ||
Weighted Average Remaining Contractual Life | 8 years 3 months 26 days | ||
Weighted Average Exercise Price | $ 35.65 | ||
Number Exercisable | 160,645 | ||
Weighted Average Exercise Price | $ 38.21 | ||
47.52 - 47.52 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Range of Exercise Prices, Minimum | 47.52 | ||
Range of Exercise Prices, Maximum | $ 47.52 | ||
Number Outstanding | 33,534 | ||
Weighted Average Remaining Contractual Life | 7 years 7 months 17 days | ||
Weighted Average Exercise Price | $ 47.52 | ||
Number Exercisable | 12,228 | ||
Weighted Average Exercise Price | $ 47.52 |
Shareholders' Equity - Assumpti
Shareholders' Equity - Assumptions Used to Determine Fair Value of Stock Options Issued (Detail) - $ / shares | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Fair value of options granted | $ 13.35 | $ 15.24 | $ 16.91 |
Dividend yield | 1.20% | 1.00% | 1.00% |
Average term | 6 years | 6 years | 5 years |
Volatility | 51.00% | 49.00% | 49.00% |
Risk-free rate of return | 1.70% | 0.80% | 0.80% |
Shareholders' Equity - Restrict
Shareholders' Equity - Restricted Stock Activity (Detail) - $ / shares | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Restricted Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non-vested shares, Beginning balance | 22,500 | 16,200 |
Awarded | 29,063 | 20,200 |
Vested | (9,800) | (10,900) |
Forfeited | (1,900) | (3,000) |
Non-vested shares, Ending balance | 39,863 | 22,500 |
Non-vested shares, Weighted-Average Grant Date Fair Value Beginning | $ 40.12 | $ 43.45 |
Awarded | 18.53 | 33.67 |
Vested | 48.75 | 33.81 |
Forfeited | 24.84 | 37.60 |
Non-vested shares, Weighted-Average Grant Date Fair Value Ending | $ 22.98 | $ 40.12 |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non-vested shares, Beginning balance | 116,439 | 40,103 |
Awarded | 124,558 | 135,564 |
Vested | (44,722) | (57,295) |
Forfeited | (10,017) | (1,933) |
Non-vested shares, Ending balance | 186,258 | 116,439 |
Non-vested shares, Weighted-Average Grant Date Fair Value Beginning | $ 35.67 | $ 35.35 |
Awarded | 18.09 | 34.81 |
Vested | 36.15 | 33.14 |
Forfeited | 16.59 | 43.81 |
Non-vested shares, Weighted-Average Grant Date Fair Value Ending | $ 24.79 | $ 35.67 |
Shareholders' Equity - Summar51
Shareholders' Equity - Summary of Activity for SARs Awarded (Detail) - $ / shares | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Shares, Outstanding beginning balance | 604,218 | ||
Number of SARs, Granted | 121,819 | ||
Number of SARs, Forfeited | (30) | ||
Number of SARs, Exercised | (37,442) | ||
Number of Shares Under Option, Outstanding ending balance | 678,209 | 604,218 | |
Number of SARs, exercisable at March 31, 2016 | 262,734 | ||
Weighted Average Exercise Price, Outstanding beginning balance | $ 30.08 | $ 29.39 | |
Weighted Average Exercise Price, Granted | 29.57 | ||
Weighted Average Exercise Price, Forfeited | 13.59 | ||
Weighted Average Exercise Price, Exercised | 15.52 | ||
Weighted Average Exercise Price, Outstanding ending balance | 30.08 | $ 29.39 | |
Weighted Average Exercise Price, exercisable at March 31, 2016 | $ 17.83 | ||
Stock options outstanding, weighted-average contractual life | 7 years 5 months 23 days | 8 years 11 days | 5 years 1 month 2 days |
Stock Appreciation Rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of SARs, Granted | 175,000 | ||
Number of SARs, Forfeited | 0 | ||
Number of SARs, Exercised | 0 | ||
Number of Shares Under Option, Outstanding ending balance | 175,000 | ||
Number of SARs, exercisable at March 31, 2016 | 0 | ||
Number of SARs, expected to vest at March 31, 2016 | 144,468 | ||
Weighted Average Exercise Price, Outstanding beginning balance | $ 14.16 | ||
Weighted Average Exercise Price, Granted | 14.16 | ||
Weighted Average Exercise Price, Forfeited | 0 | ||
Weighted Average Exercise Price, Exercised | 0 | ||
Weighted Average Exercise Price, Outstanding ending balance | 14.16 | ||
Weighted Average Exercise Price, exercisable at March 31, 2016 | 0 | ||
Weighted Average Exercise Price, expected to vest at March 31, 2016 | $ 14.16 | ||
Stock options outstanding, weighted-average contractual life | 4 years 10 months 24 days | ||
Weighted Average Contractual Term, SARs expected to vest | 4 years 10 months 24 days |
Shareholders' Equity - Assump52
Shareholders' Equity - Assumptions Used to Determine Fair Value of Stock Options/SARs Issued (Detail) - $ / shares | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of SARs granted | $ 13.35 | $ 15.24 | $ 16.91 |
Dividend yield | 1.20% | 1.00% | 1.00% |
Average term | 6 years | 6 years | 5 years |
Volatility | 51.00% | 49.00% | 49.00% |
Risk-free rate of return | 1.70% | 0.80% | 0.80% |
Stock Appreciation Rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of SARs granted | $ 6.40 | ||
Dividend yield | 0.00% | ||
Average term | 5 years | ||
Volatility | 51.00% | ||
Risk-free rate of return | 1.40% |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Weighted Average Shares Outstanding (Detail) - shares shares in Thousands | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||
Weighted average number of common shares outstanding | 12,995 | 12,926 | 13,275 |
Dilutive effect of option plan | 163 | 323 | |
Common and potential shares outstanding-diluted | 12,995 | 13,089 | 13,598 |
Shareholders' Equity - Componen
Shareholders' Equity - Components of Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Equity [Abstract] | |||
Balance at beginning of period | $ (7,142) | $ (2,110) | $ (4,166) |
Unrealized gain (loss) on derivative instruments, net of tax | (4,429) | 2,279 | (241) |
Foreign currency translation adjustment | 1,387 | (7,311) | 2,297 |
Balance at end of period | $ (10,184) | $ (7,142) | $ (2,110) |
Retirement Savings Plan - Addit
Retirement Savings Plan - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Employees contribution towards retirement plan, percentage | 50.00% | ||
Matching contribution by the employer, percentage | 50.00% | ||
Maximum percentage of employee compensation, that the employer may contribute towards the plan | 5.00% | ||
Maximum contribution by employees towards retirement plan | $ 255,000 | ||
Matching contribution by the employer | $ 1,300,000 | $ 1,200,000 | $ 1,000,000 |
Defined contribution plan coverage, description | We sponsor a 401(k) defined contribution plan that covers substantially all full-time employees who are at least 18 years of age and who have completed at least three months of service. | ||
Defined contribution plan, minimum service period | 3 months |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income (Loss) Before Income Tax (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (17,156) | $ 5,532 | $ 58,655 |
Foreign | 109 | 678 | 1,749 |
Income (loss) before income taxes | $ (17,047) | $ 6,210 | $ 60,404 |
Income Taxes - Schedule of In57
Income Taxes - Schedule of Income Tax Expense (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal | $ (5,935) | $ 2,610 | $ 13,345 |
State | (339) | 149 | 900 |
Foreign | 27 | 168 | 436 |
Deferred | (1,613) | (1,637) | 6,319 |
Total income tax expense (benefit) | $ (7,860) | $ 1,290 | $ 21,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate (Detail) | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Statutory income tax rate | 35.00% | 35.00% | 35.00% |
State taxes | 1.80% | 1.90% | 1.70% |
Research and other tax credit | 5.60% | (16.50%) | (1.00%) |
Domestic manufacturers deduction | (0.10%) | (0.90%) | (1.40%) |
Uncertain tax positions | 6.00% | (2.30%) | (0.10%) |
US subpart F adjustments | 0.70% | 11.10% | 0.40% |
Foreign tax rate difference | (1.40%) | (9.10%) | (0.20%) |
Stock options | (0.50%) | 1.30% | (0.10%) |
Other | (1.10%) | 0.30% | 0.50% |
Reconciliation of federal income tax rate, total | 46.00% | 20.80% | 34.80% |
Income Taxes - Cumulative Tempo
Income Taxes - Cumulative Temporary Differences Between Tax Bases of Assets and Liabilities and their Carrying Amounts (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Mar. 31, 2015 |
Current deferred income tax assets | ||
Accrued expenses | $ 3,788 | $ 3,934 |
Accrued warranty | 8,855 | 8,045 |
Inventory related items | 4,269 | 4,152 |
Net operating loss carryforwards | 1,628 | |
Other | 1,560 | 313 |
Less: valuation allowance | (351) | (235) |
Current deferred income tax asset | 17,229 | 13,050 |
Current deferred income tax liabilities | ||
Prepaid expenses | 2,043 | 1,463 |
Other | 477 | 1,696 |
Current deferred income tax liability | 2,520 | 3,159 |
Net current deferred tax asset | 17,229 | 13,050 |
Non-current deferred income tax assets | ||
Compensation payable in common stock | 1,927 | 1,200 |
State research and development credits | 1,393 | 1,043 |
Less: valuation allowance | (1,042) | (808) |
Non-current deferred income tax asset | 2,278 | 1,435 |
Non-current deferred income tax liability | ||
Property and equipment | 15,471 | 11,151 |
Non-current deferred tax liability | 15,471 | 11,151 |
Net non-current deferred tax liability | $ 13,193 | $ 9,716 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Line Items] | ||
Liabilities related to unrecognized tax benefits | $ 1.1 | $ 2.2 |
Unrecognized tax benefits, potential interest and penalties | 0.1 | 0.4 |
Anticipated recognized portion of unrecognized tax benefits | $ 0.3 | |
Percentage of likelihood of tax benefit realized | Greater than 50% | |
Tax credit carryforward, expiration period | March 2,031 | |
State and Local Jurisdiction [Member] | ||
Income Tax Disclosure [Line Items] | ||
State research and development credits carryforwards | $ 1.4 | $ 1 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at beginning of period | $ 1,828 | $ 1,707 |
Increases related to prior year tax positions | 50 | 72 |
Decreases related to prior year tax positions | (1,033) | (143) |
Increases related to current year tax positions | 200 | 192 |
Settlements | 0 | 0 |
Balance at end of period | $ 1,045 | $ 1,828 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Mar. 31, 2016USD ($) |
Loss Contingencies [Line Items] | |
Maximum repurchase amount repossessed products sold to dealers | $ 68,500,000 |
Purchase obligation under the non-cancelable purchase commitments | 45,100,000 |
Loss Sharing Provisions | |
Loss Contingencies [Line Items] | |
Maximum repurchase amount repossessed products sold to dealers | $ 2,200,000 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) - Segment | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Number of operating segments | 2 | |
Number of reportable segments | 2 | |
Percentage of sales to individual customer accounted for more than 10% | No sales to an individual customer accounted for more than 10% of fiscal year 2014 net sales. | |
Yamaha And Subsidiaries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Aggregate sales percentage | 10.40% |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||||||||||||
Net sales | $ 121,357 | $ 166,000 | $ 211,157 | $ 134,381 | $ 98,903 | $ 193,735 | $ 262,479 | $ 143,639 | $ 145,408 | $ 225,790 | $ 238,525 | $ 120,768 | $ 632,895 | $ 698,756 | $ 730,491 |
Cost of goods sold | 542,228 | 579,307 | 579,412 | ||||||||||||
Gross profit | $ (63) | $ 24,250 | $ 43,918 | $ 22,562 | $ (1,346) | $ 34,913 | $ 55,081 | $ 30,801 | $ 20,032 | $ 40,213 | $ 61,674 | $ 29,160 | 90,667 | 119,449 | 151,079 |
United States | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net sales | 395,684 | 420,687 | 404,347 | ||||||||||||
Canada | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net sales | 174,658 | 192,524 | 215,631 | ||||||||||||
Europe and other | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net sales | 62,553 | 85,545 | 110,513 | ||||||||||||
Snowmobile units - Product line | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net sales | 258,788 | 300,731 | 282,442 | ||||||||||||
ATV/ROV units - Product line | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net sales | 275,812 | 284,142 | 333,166 | ||||||||||||
Parts, garments & accessories - Product line | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net sales | 98,295 | 113,883 | 114,883 | ||||||||||||
Snowmobile and ATV/ROV units | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net sales | 534,600 | 584,873 | 615,608 | ||||||||||||
Cost of goods sold | 476,194 | 505,383 | 506,707 | ||||||||||||
Gross profit | 58,406 | 79,490 | 108,901 | ||||||||||||
Parts, garments and accessories | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net sales | 98,295 | 113,883 | 114,883 | ||||||||||||
Cost of goods sold | 66,034 | 73,924 | 72,705 | ||||||||||||
Gross profit | $ 32,261 | $ 39,959 | $ 42,178 |
Segment Reporting - Schedule 65
Segment Reporting - Schedule of Property and Equipment, Net by Geography (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Mar. 31, 2015 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 88,846 | $ 69,449 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 88,623 | 69,113 |
Europe and Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 223 | $ 336 |
New Market Tax Credit Transac66
New Market Tax Credit Transaction - Additional Information (Detail) $ in Millions | 1 Months Ended |
Feb. 29, 2016USD ($) | |
Variable Interest Entity [Line Items] | |
Contribution amount recorded in other liabilities | $ 5.3 |
Percentage of recapture to which the tax credits are subject | 100.00% |
Tax credit recapture period | 7 years |
Financing arrangement | $ 0.9 |
Other Liabilities [Member] | |
Variable Interest Entity [Line Items] | |
Contribution amount recorded in other liabilities | $ 5.3 |
Wells Fargo Community Development Enterprises, Inc. | |
Variable Interest Entity [Line Items] | |
Maximum percentage of a qualified investment available as credit against federal income taxes | 39.00% |
Arctic Cat Sales Inc. | |
Variable Interest Entity [Line Items] | |
Loan receivable from investment fund | $ 10.8 |
Loan receivable from investment fund, interest rate | 3.75% |
Loan maturity date | Jun. 30, 2032 |
Arctic Cat Production Support LLC | |
Variable Interest Entity [Line Items] | |
Interest rate | 3.106% |
Quarterly Financial Data (Una67
Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Net sales | $ 121,357 | $ 166,000 | $ 211,157 | $ 134,381 | $ 98,903 | $ 193,735 | $ 262,479 | $ 143,639 | $ 145,408 | $ 225,790 | $ 238,525 | $ 120,768 | $ 632,895 | $ 698,756 | $ 730,491 |
Gross Profit (Loss) | (63) | 24,250 | 43,918 | 22,562 | (1,346) | 34,913 | 55,081 | 30,801 | 20,032 | 40,213 | 61,674 | 29,160 | 90,667 | 119,449 | 151,079 |
Net earnings (loss) | $ (16,905) | $ (2,397) | $ 11,171 | $ (1,056) | $ (21,525) | $ 7,487 | $ 15,389 | $ 3,569 | $ (1,549) | $ 12,120 | $ 23,365 | $ 5,468 | $ (9,187) | $ 4,920 | $ 39,404 |
Net Earnings (Loss) Per Share, Basic | $ (1.30) | $ (0.18) | $ 0.86 | $ (0.08) | $ (1.66) | $ 0.58 | $ 1.19 | $ 0.28 | $ (0.12) | $ 0.90 | $ 1.75 | $ 0.41 | $ (0.71) | $ 0.38 | $ 2.97 |
Net Earnings (Loss) Per Share, Diluted | $ (1.30) | $ (0.18) | $ 0.85 | $ (0.08) | $ (1.66) | $ 0.57 | $ 1.18 | $ 0.27 | $ (0.12) | $ 0.89 | $ 1.70 | $ 0.40 | $ (0.71) | $ 0.38 | $ 2.90 |