Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2016 | Nov. 02, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ACAT | |
Entity Registrant Name | ARCTIC CAT INC | |
Entity Central Index Key | 719,866 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 13,047,660 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 9,151 | $ 17,730 |
Accounts receivable, less allowances | 93,321 | 35,760 |
Inventories | 195,703 | 140,007 |
Prepaid expenses | 4,010 | 6,456 |
Income taxes receivable | 8,360 | 11,765 |
Other current assets | 284 | 100 |
Total current assets | 310,829 | 211,818 |
Property and equipment | ||
Machinery, equipment and tooling | 222,044 | 214,372 |
Land, buildings and improvements | 34,277 | 33,259 |
Property, Plant and Equipment, Gross, Total | 256,321 | 247,631 |
Less accumulated depreciation | 173,918 | 166,144 |
Property, Plant and Equipment, Net, Total | 82,403 | 81,487 |
Goodwill | 3,342 | 3,342 |
Intangible assets, net | 2,861 | 2,855 |
Deferred income taxes | 17,345 | 4,036 |
Other assets | 1,130 | 1,163 |
Assets, Total | 417,910 | 304,701 |
Current liabilities | ||
Accounts payable | 130,876 | 72,012 |
Accrued expenses: | ||
Marketing | 7,173 | 9,087 |
Compensation | 5,505 | 5,634 |
Warranties | 27,620 | 24,809 |
Insurance | 5,711 | 3,538 |
Other | 6,741 | 8,950 |
Total current liabilities | 183,626 | 124,030 |
Long-term debt | 73,857 | |
Other liabilities | 13,156 | 13,280 |
Commitments and contingencies | ||
Shareholders' equity | ||
Common stock, par value $0.01; 37,440,000 shares authorized; shares issued and outstanding: 13,047,992 at September 30, 2016 and 13,038,249 at March 31, 2016 | 130 | 130 |
Additional paid-in-capital | 8,018 | 6,105 |
Accumulated other comprehensive loss | (8,892) | (10,184) |
Retained earnings | 148,015 | 171,340 |
Total shareholders' equity | 147,271 | 167,391 |
Liabilities and Equity, Total | 417,910 | 304,701 |
Preferred Stock - General Class | ||
Shareholders' equity | ||
Preferred stock | ||
Preferred Stock - Series B Junior Participating | ||
Shareholders' equity | ||
Preferred stock |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2016 | Mar. 31, 2016 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 37,440,000 | 37,440,000 |
Common stock, shares issued | 13,047,992 | 13,038,249 |
Common stock, shares outstanding | 13,047,992 | 13,038,249 |
Preferred Stock - General Class | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 2,050,000 | 2,050,000 |
Preferred stock, shares issued | 0 | 0 |
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 (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net sales | ||||
Net sales | $ 164,610 | $ 211,157 | $ 269,482 | $ 345,538 |
Cost of goods sold | ||||
Cost of goods sold | 151,067 | 167,239 | 244,182 | 279,058 |
Gross profit | 13,543 | 43,918 | 25,300 | 66,480 |
Operating expenses | ||||
Selling and marketing | 11,188 | 11,842 | 20,380 | 20,797 |
Research and development | 8,421 | 6,222 | 16,279 | 12,225 |
General and administrative | 13,035 | 7,202 | 25,050 | 16,353 |
Total operating expenses | 32,644 | 25,266 | 61,709 | 49,375 |
Operating profit (loss) | (19,101) | 18,652 | (36,409) | 17,105 |
Other income (expense) | ||||
Interest income | 23 | 12 | 25 | 12 |
Interest expense | (457) | (394) | (669) | (508) |
Total other expense | (434) | (382) | (644) | (496) |
Earnings (loss) before income taxes | (19,535) | 18,270 | (37,053) | 16,609 |
Income tax expense (benefit) | (6,762) | 7,099 | (13,728) | 6,494 |
Net earnings (loss) | $ (12,773) | $ 11,171 | $ (23,325) | $ 10,115 |
Net earnings (loss) per share | ||||
Basic | $ (0.98) | $ 0.86 | $ (1.79) | $ 0.78 |
Diluted | $ (0.98) | $ 0.85 | $ (1.79) | $ 0.77 |
Weighted average shares outstanding | ||||
Basic | 13,048 | 12,985 | 13,047 | 12,972 |
Diluted | 13,048 | 13,145 | 13,047 | 13,149 |
Snowmobile and ATV/ROV units | ||||
Net sales | ||||
Net sales | $ 139,702 | $ 180,676 | $ 223,979 | $ 291,781 |
Cost of goods sold | ||||
Cost of goods sold | 133,269 | 147,739 | 213,947 | 244,696 |
Gross profit | 6,433 | 32,937 | 10,032 | 47,085 |
Parts, garments and accessories | ||||
Net sales | ||||
Net sales | 24,908 | 30,481 | 45,503 | 53,757 |
Cost of goods sold | ||||
Cost of goods sold | 17,798 | 19,500 | 30,235 | 34,362 |
Gross profit | $ 7,110 | $ 10,981 | $ 15,268 | $ 19,395 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings (loss) | $ (12,773) | $ 11,171 | $ (23,325) | $ 10,115 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 227 | (64) | (423) | 1,043 |
Unrealized gain (loss) on derivative instruments, net of tax | 1,072 | 669 | 1,715 | (213) |
Comprehensive income (loss) | $ (11,474) | $ 11,776 | $ (22,033) | $ 10,945 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net earnings (loss) | $ (23,325) | $ 10,115 |
Adjustments to reconcile net earnings (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 9,837 | 9,385 |
Deferred income taxes | (14,402) | 534 |
Stock-based compensation expense | 2,277 | 2,037 |
Changes in operating assets and liabilities | ||
Trading securities | 1,009 | |
Accounts receivable | (57,918) | (42,797) |
Inventories | (55,993) | (18,263) |
Accounts payable | 58,884 | 9,210 |
Accrued expenses | 3,508 | (5,253) |
Income taxes | 3,420 | 5,913 |
Prepaid expenses and other | 2,124 | 477 |
Net cash used in operating activities | (71,588) | (27,633) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (10,806) | (19,269) |
Net cash used in investing activities | (10,806) | (19,269) |
Cash flows from financing activities: | ||
Proceeds from long-term borrowings | 160,690 | 148,323 |
Payments on long-term borrowings | (86,833) | (132,529) |
Checks written in excess of bank balances | 3,361 | |
Proceeds from issuance of common stock | 497 | |
Payments for income taxes on net-settled option exercises | (32) | (50) |
Tax benefit from stock option exercises | 45 | |
Dividends paid | (3,275) | |
Repurchase of common stock | (120) | |
Net cash provided by financing activities | 73,825 | 16,252 |
Effect of exchange rate changes on cash and cash equivalents | (10) | 1,110 |
Net decrease in cash and cash equivalents | (8,579) | (29,540) |
Cash and cash equivalents at beginning of period | 17,730 | 40,253 |
Cash and cash equivalents at end of period | 9,151 | 10,713 |
Supplemental disclosure of cash payments for: | ||
Income taxes | 64 | 123 |
Interest | $ 669 | $ 508 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include the accounts of Arctic Cat Inc., its wholly-owned subsidiaries and certain variable interest entities (“VIEs”). Unless the context otherwise requires, the use of the terms “Arctic Cat,” “we,” “our,” or “us” in these unaudited Notes to Consolidated Financial Statements refers to Arctic Cat Inc. and, as applicable, its consolidated subsidiaries. All intercompany accounts and transactions are eliminated upon consolidation. The unaudited consolidated financial statements of Arctic Cat Inc. have been prepared in accordance with Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to make the information presented not misleading. Accordingly, such statements should be read in conjunction with our Annual Report on In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary for the fair presentation of our financial position, results of operations and cash flows for the periods presented. Results of operations for the interim periods are not necessarily indicative of results for the full year due to the seasonality of snowmobiles, all-terrain vehicles (“ATVs”) and recreational off-highway vehicles (“ROVs”) and related parts, garments and accessories (“PG&A”). The consolidated balance sheet as of March 31, 2016 is derived from the audited balance sheet as of that date. Preparation of our consolidated financial statements requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and related revenues and expenses. Accordingly, actual results could differ from those estimates. For the six months ended September 30, 2016, we realized a loss before income taxes and have recognized a deferred tax asset, significantly as a result of that loss. We performed an analysis to estimate the extent to which the deferred tax assets will be realized and determined that there was no material change to the valuation allowance during the six months ended September 30, 2016. However, due to the sensitivity in the analysis, changes to the assumptions in subsequent periods could have a material effect on the valuation allowance. Certain fiscal 2016 amounts have been reclassified to conform to the fiscal 2017 financial statement presentation. The reclassifications had no effect on previously reported operating results. In preparing the accompanying consolidated financial statements, we have evaluated the period from October 1, 2016, through the date the financial statements were issued, for material subsequent events requiring recognition or disclosure. Other than as disclosed in Note 5, Financing Recently Adopted Accounting Standards In April 2016, we retrospectively adopted Accounting Standard Update (“ASU”) 2015-17, Income Taxes Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Lease Accounting 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 | 6 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 2. FAIR VALUE MEASUREMENTS 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. 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 – Level 2 – Level 3 – Recurring Fair Value Measurements The following tables present, by level within the fair value hierarchy, our financial assets and liabilities that were accounted for at fair value on a recurring basis at September 30, 2016 and March 31, 2016, according to the valuation technique utilized to determine their fair values ($ in thousands): Fair Value Measurements Using Fair Value at Level 1 Level 2 Level 3 Assets: Foreign currency contracts(1) $ 284 $ — $ 284 $ — Liabilities: Foreign currency contracts(1) $ 1,398 $ — $ 1,398 $ — (1) We utilize the income approach to measure fair value of foreign currency contracts, which is based on significant other observable inputs. Fair Value Measurements Using Fair Value at Level 1 Level 2 Level 3 Assets: Foreign currency contracts(1) $ 100 $ — $ 100 $ — Liabilities: Foreign currency contracts(1) $ 3,937 $ — $ 3,937 $ — (1) We utilize the income approach to measure fair value of foreign currency contracts, which is based on significant other observable inputs. 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 other 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 the six months ended September 30, 2016 and 2015. Other Fair Value Disclosures Our financial instruments that approximate fair value due to their short-term nature and are not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable and accounts payable. At September 30, 2016, the carrying value of our revolving credit agreement approximates fair value and would be considered a Level 2 measurement. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 6 Months Ended |
Sep. 30, 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 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 tables summarize the notional amounts and carrying values of our derivative instruments as of September 30, 2016 and March 31, 2016 ($ in thousands): Derivative Instruments as of Notional Asset Fair (1) Liability Fair (1) Foreign currency contracts: Canadian dollar $ 59,892 $ 284 $ 1,267 Japanese yen 26,737 — 131 Total foreign currency contracts $ 86,629 $ 284 $ 1,398 (1) Assets are included in other current assets and liabilities are included in other accrued expenses in the accompanying Consolidated Balance Sheets. Derivative Instruments as of Notional Asset Fair (1) Liability Fair (1) Foreign currency contracts: Canadian dollar $ 87,875 $ 100 $ 3,937 Total foreign currency contracts $ 87,875 $ 100 $ 3,937 (1) Assets are included in other current assets and liabilities are included in other accrued expenses in the accompanying Consolidated Balance Sheets. The following table presents the effects of derivative instruments on other comprehensive income (“OCI”) and on our Consolidated Statements of Operations for the six months ended September 30, 2016 and 2015 ($ in thousands): September 30, 2016 September 30, 2015 Pre-Tax Pre-Tax Gain Pre-Tax Pre-Tax Gain Canadian dollar (1) $ 544 $ (2,634 ) $ 4,901 $ 5,673 Japanese yen (1) (131 ) — (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 six months ended September 30, 2016 and 2015. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 4. GOODWILL AND INTANGIBLE ASSETS There were no changes in the carrying values of goodwill and indefinite-lived intangible assets during the six months ended September 30, 2016. The following table provides the gross carrying amount of goodwill and indefinite-lived intangible assets as of September 30, 2016 and March 31, 2016 ($ in thousands): September 30, 2016 March 31, 2016 Gross Carrying Gross Carrying Goodwill (1) $ 3,342 $ 3,342 Indefinite-lived intangible assets $ 436 $ 436 (1) The entirety of our goodwill balance as of September 30, 2016 and March 31, 2016 resides in our PG&A operating segment. Refer to Note 10, Segment Reporting There was no cumulative impairment related to goodwill or indefinite-lived intangibles assets at September 30, 2016 or March 31, 2016. For definite-lived intangible assets, the changes in the net carrying amount for the six months ended September 30, 2016 and 2015 are as follows ($ in thousands): 2016 2015 Gross Carrying Accumulated Gross Carrying Accumulated Definite-lived intangible assets, beginning $ 4,315 $ (1,896 ) $ 4,312 $ (1,511 ) Amortization expense — (190 ) — (193 ) Adjustments (1) 169 31 — — Currency translation effect on foreign balances (15 ) 11 — — Definite-lived intangible assets, ending $ 4,469 $ (2,044 ) $ 4,312 $ (1,704 ) (1) Adjustment to correct gross carrying amount and accumulated amortization for certain intangible assets related to our previous acquisition of our European business. Amortization expense is expected to be approximately $0.2 million for the remainder of fiscal 2017, $0.4 million for each of fiscal 2018, 2019 and 2020 and $0.2 million for fiscal 2021 and thereafter. The preceding expected amortization expense is an estimate and actual amounts could differ due to additional intangible asset acquisitions, changes in foreign currency rates or impairment of intangible assets. |
FINANCING
FINANCING | 6 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
FINANCING | 5. FINANCING We have a line of credit pursuant to a senior secured revolving credit agreement, which is scheduled to expire in March 2021. Under the agreement, we may borrow up to $130.0 million during May through November and up to $75.0 million during all other months of the fiscal year. The amount of permissible borrowings under the credit facility is 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. As of September 30, 2016, we have $73.9 million of outstanding borrowings under the line of credit. No borrowings from the line of credit were outstanding at March 31, 2016. The outstanding letters of credit balances were $0.2 million and $3.5 million at September 30, 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 September 30, 2016. Outstanding letters of credit will be repaid over the following six months in accordance with the credit agreement and any such renewal. In November 2016, subsequent to the end of the second quarter of fiscal 2017, we signed a commitment letter to amend our senior secured revolving credit agreement. The amendment would extend the term of the agreement to November 2021 and permit borrowings up to $130.0 million year round. We currently expect the amendment to be finalized prior to December 1, 2016. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | 6. 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. 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. We record stock-based compensation expense related to cash-settled stock appreciation rights (“SARs”) over the requisite service period based on the fair value of the awards at the end of each reporting period. For the three months ended September 30, 2016 and 2015, we recorded stock-based compensation expense of $0.9 million and $0.9 million, respectively, and for the six months ended September 30, 2016 and 2015, we recorded stock-based compensation expense of $2.2 million and $2.0 million, respectively, which has been included in general and administrative expenses in the accompanying Consolidated Statements of Operations. At September 30, 2016, we had $9.5 million of unrecognized compensation costs related to non-vested stock options, restricted stock awards and cash-settled SARs that are expected to be recognized over a weighted average period of approximately two years. Stock Options The following table summarizes the stock option transactions under the Plans for the six months ended September 30, 2016: Shares Weighted Weighted Aggregate (1) Options outstanding at March 31, 2016 678,209 $ 30.08 Granted 344,169 16.62 Cancelled (42,980 ) 26.26 Expired (13,939 ) 43.44 Options outstanding at September 30, 2016 965,459 $ 25.26 7.80 years $ 310 Exercisable at September 30, 2016 396,549 $ 28.01 6.03 years $ 290 (1) The aggregate intrinsic value is based on the difference between the exercise price and our September 30, 2016 common share market value for in-the-money options. Restricted Stock The following tables summarize restricted stock and restricted stock unit award activity under the Plans for the six months ended September 30, 2016: Restricted Shares Shares Weighted Non-vested shares at March 31, 2016 39,863 $ 22.98 Granted 1,179 16.74 Forfeited (2,200 ) 27.30 Non-vested shares at September 30, 2016 38,842 $ 22.50 Restricted Stock Units Shares Weighted Non-vested shares at March 31, 2016 186,258 $ 24.79 Granted 59,993 16.56 Vested (12,749 ) 39.60 Forfeited (39,140 ) 19.20 Non-vested shares at September 30, 2016 194,362 $ 22.29 Cash-Settled Stock Appreciation Rights Cash-settled SARs are valued using the Black-Scholes option-pricing model on the date of grant and are subsequently remeasured at each reporting period based on a revised Black-Scholes value until they are exercised. There were no cash-settled SARs granted or forfeited during the six months ended September 30, 2016. We recognized $0.1 million and $0.2 million of stock-based compensation expense related to previously granted cash-settled SARs during the three and six months ended September 30, 2016, respectively. Accrued expense for these awards was $0.2 million at September 30, 2016, which was recorded within other liabilities in the accompanying Consolidated Balance Sheets. 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 includes common shares and common share equivalents relating to stock options and restricted stock units, when dilutive. Options to purchase 883,987 and 475,925 shares of common stock with weighted average exercise prices of $26.71 and $36.53 were outstanding during the three month periods ended September 30, 2016 and 2015, respectively, and options to purchase 865,927 and 335,807 shares of common stock with weighted average exercise prices of $27.04 and $38.16 were outstanding during the six months periods ended September 30, 2016 and 2015, respectively, but were excluded from the computation of common share equivalents because they were anti-dilutive. Weighted average shares outstanding consists of the following for the three and six months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Weighted average number of common shares outstanding 13,048 12,985 13,047 12,972 Dilutive effect of option plan — 160 — 177 Common and potential shares outstanding – diluted 13,048 13,145 13,047 13,149 Accumulated Other Comprehensive Loss The components of the changes in accumulated other comprehensive loss during the following periods were as follows ($ in thousands): Six Months Ended 2016 2015 Accumulated other comprehensive loss, beginning $ (10,184 ) $ (7,142 ) Foreign currency translation adjustments (423 ) 1,043 Unrealized gain (loss) on derivative instruments, net of tax 1,715 (213 ) Accumulated other comprehensive loss, ending $ (8,892 ) $ (6,312 ) The unrealized gain (loss) on derivative instruments for the six months ended September 30, 2016 and 2015 were net of tax expense of $1.0 million and tax benefit of $0.1 million, respectively. There is no tax impact on foreign currency translation adjustments, as the earnings are considered permanently reinvested. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 7. 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. We are self-insured to some extent, though we maintain insurance against certain classes and levels of product liability losses. We are regularly involved in patent litigation cases with, for example, competitors and non-practicing entities in which we are asserting, or defending against, patent infringement claims. Such cases are at varying stages in the litigation process. We take appropriate steps to help minimize our risk of being a defendant in patent infringement litigation. We record a reserve within accrued expenses in the Consolidated Balance Sheets based on our estimated range of potential exposures related to claims, including future legal expenditures, settlements and judgments of which we are aware, where we 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 that we believe will have a materially adverse impact on our business or financial condition, results of operations or cash flows. In October 2014, we filed a lawsuit captioned Arctic Cat Inc. v. Bombardier Recreational Products, Inc., and BRP U.S. Inc. 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 should such repossessions occur. At September 30, 2016, we are contingently liable under dealer financing agreements for a maximum repurchase amount of up to approximately $78.3 million. Our ultimate 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 subsequently anticipated 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 $4.2 million at September 30, 2016. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 8. INVENTORIES Inventories are valued at the lower of cost or market, with cost determined using the first-in, first-out method. Manufacturing costs include materials, labor, freight-in and manufacturing overhead. As of September 30, 2016 and March 31, 2016, inventories consist of the following ($ in thousands): September 30, 2016 March 31, 2016 Raw materials and sub-assemblies $ 59,674 $ 35,770 Finished goods 90,820 64,127 Parts, garments and accessories 45,209 40,110 $ 195,703 $ 140,007 |
PRODUCT WARRANTIES
PRODUCT WARRANTIES | 6 Months Ended |
Sep. 30, 2016 | |
Guarantees [Abstract] | |
PRODUCT WARRANTIES | 9. PRODUCT WARRANTIES We generally provide a limited warranty for 12 months from the date of consumer registration on snowmobiles 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 table represents changes in our accrued warranty liability for the six month periods ended September 30, 2016 and 2015 ($ in thousands): Six Months Ended 2016 2015 Accrued warranty, beginning $ 24,809 $ 23,062 Warranty provision 7,448 6,659 Warranty claim payments (4,637 ) (5,049 ) Accrued warranty, ending $ 27,620 $ 24,672 In the fourth quarter of fiscal 2016, we switched from offering a third-party extended warranty program as a promotional incentive to consumers to offering an in-house extended factory warranty promotional program. As a result, our accrued warranty balance and related provision and claim payments include the impact of these extended warranty programs in the consolidated financial statements. As of September 30, 2016 and March 31, 2016, we had accrued $3.3 million and $1.7 million, respectively, within accrued warranty for our in-house extended warranty program. For the six months ended September 30, 2016, our warranty provision included $1.6 million for our in-house extended warranty program, compared to $1.7 million of third-party extended warranty recorded as incentive expense in the six months ended September 30, 2015. The warranty claim payments for in-house extended warranty programs were immaterial for the six months ended September 30, 2016. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 10. SEGMENT REPORTING The presentation of segment information represents our method of internal reporting for making operating decisions and assessing performance, which generally segregates the operating segments by product line. The internal reporting of these operating segments is based, in part, on the management process utilized by our President and Chief Executive Officer, who is our chief operating decision maker. Based on this management process, we have two operating segments: (1) Snowmobile and ATV/ROV and (2) PG&A, which also represent our two reportable segments. We aggregate our snowmobile and ATV/ROV operating segments into one operating segment, as the segments have similar economic characteristics. Given the crossover of customers, manufacturing and asset management, we do not maintain separate balance sheets for each segment. Accordingly, the segment information presented below is limited to sales and gross profit data ($ in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Net sales Snowmobile and ATV/ROV units $ 139,702 $ 180,676 $ 223,979 $ 291,781 Parts, garments and accessories 24,908 30,481 45,503 53,757 Total net sales 164,610 211,157 269,482 345,538 Gross profit Snowmobile and ATV/ROV units 6,433 32,937 10,032 47,085 Parts, garments and accessories 7,110 10,981 15,268 19,395 Total gross profit $ 13,543 $ 43,918 $ 25,300 $ 66,480 |
NEW MARKET TAX CREDIT TRANSACTI
NEW MARKET TAX CREDIT TRANSACTION | 6 Months Ended |
Sep. 30, 2016 | |
Text Block [Abstract] | |
NEW MARKET TAX CREDIT TRANSACTION | 11. NEW MARKET TAX CREDIT TRANSACTION As more fully described within our Annual Report on Form 10-K for the fiscal year ended March 31, 2016, during February 2016, we received approximately $5.3 million in net proceeds from a financing arrangement related to an investment in equipment at our manufacturing facility in Thief River Falls, Minnesota. This financing arrangement was structured with Wells Fargo Community Development Enterprises, Inc. (“Wells Fargo”), WF Paint & Assembly Investment Fund, LLC (the “Investment Fund”), and Arctic Cat Production Support LLC, our direct, wholly-owned subsidiary, in connection with our participation in transactions qualified under the federal New Market Tax Credit (“NMTC”) program, pursuant to the Community Renewal Tax Relief Act of 2000. In exchange for its contribution to the Investment Fund, Wells Fargo is entitled to substantially all of the tax benefits derived from the NMTC arrangement, while we effectively received net proceeds equal to Wells Fargo’s contributions to the Investment Fund less direct and incremental transaction costs. The NMTC arrangement 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. As of September 30, 2016 and March 31, 2016, Wells Fargo’s net $5.3 million contribution is recorded within other liabilities on our Consolidated Balance Sheets. The benefit of this net contribution will be recognized as earnings at the end of the seven year recapture period, when our performance obligation of regulatory and contractual compliance is relieved. As of September 30, 2016 and March 31, 2016, the direct costs incurred in structuring the arrangement of $0.9 million have been deferred within other assets on the Consolidated Balance Sheets and will be recognized in proportion to the recognition of the related profits. Incremental costs to maintain the structure during the compliance period are recognized as incurred and were immaterial for the six months ended September 30, 2016. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In April 2016, we retrospectively adopted Accounting Standard Update (“ASU”) 2015-17, Income Taxes |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Lease Accounting In July 2015, the FASB issued ASU 2015-11, Inventory In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Accounted at Fair Value on Recurring Basis | The following tables present, by level within the fair value hierarchy, our financial assets and liabilities that were accounted for at fair value on a recurring basis at September 30, 2016 and March 31, 2016, according to the valuation technique utilized to determine their fair values ($ in thousands): Fair Value Measurements Using Fair Value at Level 1 Level 2 Level 3 Assets: Foreign currency contracts(1) $ 284 $ — $ 284 $ — Liabilities: Foreign currency contracts(1) $ 1,398 $ — $ 1,398 $ — (1) We utilize the income approach to measure fair value of foreign currency contracts, which is based on significant other observable inputs. Fair Value Measurements Using Fair Value at Level 1 Level 2 Level 3 Assets: Foreign currency contracts(1) $ 100 $ — $ 100 $ — Liabilities: Foreign currency contracts(1) $ 3,937 $ — $ 3,937 $ — (1) We utilize the income approach to measure fair value of foreign currency contracts, which is based on significant other observable inputs. |
DERIVATIVE INSTRUMENTS AND HE20
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 6 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts and Carrying Values of Derivative Instruments | The following tables summarize the notional amounts and carrying values of our derivative instruments as of September 30, 2016 and March 31, 2016 ($ in thousands): Derivative Instruments as of Notional Asset Fair (1) Liability Fair (1) Foreign currency contracts: Canadian dollar $ 59,892 $ 284 $ 1,267 Japanese yen 26,737 — 131 Total foreign currency contracts $ 86,629 $ 284 $ 1,398 (1) Assets are included in other current assets and liabilities are included in other accrued expenses in the accompanying Consolidated Balance Sheets. Derivative Instruments as of Notional Asset Fair (1) Liability Fair (1) Foreign currency contracts: Canadian dollar $ 87,875 $ 100 $ 3,937 Total foreign currency contracts $ 87,875 $ 100 $ 3,937 (1) Assets are included in other current assets and liabilities are included in other accrued expenses in the accompanying Consolidated Balance Sheets. |
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 six months ended September 30, 2016 and 2015 ($ in thousands): September 30, 2016 September 30, 2015 Pre-Tax Pre-Tax Gain Pre-Tax Pre-Tax Gain Canadian dollar (1) $ 544 $ (2,634 ) $ 4,901 $ 5,673 Japanese yen (1) (131 ) — (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) | 6 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Gross Carrying Amount of Goodwill and Indefinite-Lived Intangible Assets | The following table provides the gross carrying amount of goodwill and indefinite-lived intangible assets as of September 30, 2016 and March 31, 2016 ($ in thousands): September 30, 2016 March 31, 2016 Gross Carrying Gross Carrying Goodwill (1) $ 3,342 $ 3,342 Indefinite-lived intangible assets $ 436 $ 436 (1) The entirety of our goodwill balance as of September 30, 2016 and March 31, 2016 resides in our PG&A operating segment. Refer to Note 10, Segment Reporting |
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 six months ended September 30, 2016 and 2015 are as follows ($ in thousands): 2016 2015 Gross Carrying Accumulated Gross Carrying Accumulated Definite-lived intangible assets, beginning $ 4,315 $ (1,896 ) $ 4,312 $ (1,511 ) Amortization expense — (190 ) — (193 ) Adjustments (1) 169 31 — — Currency translation effect on foreign balances (15 ) 11 — — Definite-lived intangible assets, ending $ 4,469 $ (2,044 ) $ 4,312 $ (1,704 ) (1) Adjustment to correct gross carrying amount and accumulated amortization for certain intangible assets related to our previous acquisition of our European business. |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 6 Months Ended |
Sep. 30, 2016 | |
Stock Option Activity | The following table summarizes the stock option transactions under the Plans for the six months ended September 30, 2016: Shares Weighted Weighted Aggregate (1) Options outstanding at March 31, 2016 678,209 $ 30.08 Granted 344,169 16.62 Cancelled (42,980 ) 26.26 Expired (13,939 ) 43.44 Options outstanding at September 30, 2016 965,459 $ 25.26 7.80 years $ 310 Exercisable at September 30, 2016 396,549 $ 28.01 6.03 years $ 290 (1) The aggregate intrinsic value is based on the difference between the exercise price and our September 30, 2016 common share market value for in-the-money options. |
Schedule of Weighted Average Shares Outstanding | Weighted average shares outstanding consists of the following for the three and six months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Weighted average number of common shares outstanding 13,048 12,985 13,047 12,972 Dilutive effect of option plan — 160 — 177 Common and potential shares outstanding – diluted 13,048 13,145 13,047 13,149 |
Components of Changes in Accumulated Other Comprehensive Loss | The components of the changes in accumulated other comprehensive loss during the following periods were as follows ($ in thousands): Six Months Ended 2016 2015 Accumulated other comprehensive loss, beginning $ (10,184 ) $ (7,142 ) Foreign currency translation adjustments (423 ) 1,043 Unrealized gain (loss) on derivative instruments, net of tax 1,715 (213 ) Accumulated other comprehensive loss, ending $ (8,892 ) $ (6,312 ) |
Restricted Shares | |
Restricted Stock Activity | Restricted Shares Shares Weighted Non-vested shares at March 31, 2016 39,863 $ 22.98 Granted 1,179 16.74 Forfeited (2,200 ) 27.30 Non-vested shares at September 30, 2016 38,842 $ 22.50 |
Restricted Stock Units | |
Restricted Stock Activity | Restricted Stock Units Shares Weighted Non-vested shares at March 31, 2016 186,258 $ 24.79 Granted 59,993 16.56 Vested (12,749 ) 39.60 Forfeited (39,140 ) 19.20 Non-vested shares at September 30, 2016 194,362 $ 22.29 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | As of September 30, 2016 and March 31, 2016, inventories consist of the following ($ in thousands): September 30, 2016 March 31, 2016 Raw materials and sub-assemblies $ 59,674 $ 35,770 Finished goods 90,820 64,127 Parts, garments and accessories 45,209 40,110 $ 195,703 $ 140,007 |
PRODUCT WARRANTIES (Tables)
PRODUCT WARRANTIES (Tables) | 6 Months Ended |
Sep. 30, 2016 | |
Guarantees [Abstract] | |
Changes in Accrued Warranty Liability | The following table represents changes in our accrued warranty liability for the six month periods ended September 30, 2016 and 2015 ($ in thousands): Six Months Ended 2016 2015 Accrued warranty, beginning $ 24,809 $ 23,062 Warranty provision 7,448 6,659 Warranty claim payments (4,637 ) (5,049 ) Accrued warranty, ending $ 27,620 $ 24,672 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Sep. 30, 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): Three Months Ended Six Months Ended 2016 2015 2016 2015 Net sales Snowmobile and ATV/ROV units $ 139,702 $ 180,676 $ 223,979 $ 291,781 Parts, garments and accessories 24,908 30,481 45,503 53,757 Total net sales 164,610 211,157 269,482 345,538 Gross profit Snowmobile and ATV/ROV units 6,433 32,937 10,032 47,085 Parts, garments and accessories 7,110 10,981 15,268 19,395 Total gross profit $ 13,543 $ 43,918 $ 25,300 $ 66,480 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Accounting Policies [Abstract] | ||
Current deferred tax assets | $ 17,200 | |
Noncurrent deferred tax liabilities | 13,200 | |
Noncurrent deferred income taxes | $ 17,345 | $ 4,036 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Accounted at Fair Value on Recurring Basis (Detail) - Fair Value Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Assets: | ||
Foreign currency contracts | $ 284 | $ 100 |
Liabilities: | ||
Foreign currency contracts | 1,398 | 3,937 |
Fair Value Measurements, Inputs, Level 2 | ||
Assets: | ||
Foreign currency contracts | 284 | 100 |
Liabilities: | ||
Foreign currency contracts | $ 1,398 | $ 3,937 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 6 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | ||
Changes in assets measured at fair value on nonrecurring basis | $ 0 | $ 0 |
Derivative Instruments and He29
Derivative Instruments and Hedging Activities - Additional Information (Detail) - Foreign Currency Forward Contracts | 6 Months Ended |
Sep. 30, 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 He30
Derivative Instruments and Hedging Activities - Schedule of Notional Amounts and Carrying Values of Derivative Instruments (Detail) - USD ($) | Sep. 30, 2016 | Mar. 31, 2016 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional Value | $ 86,629,000 | $ 87,875,000 |
Asset Fair Value | 284,000 | 100,000 |
Liability Fair Value | 1,398,000 | 3,937,000 |
Foreign Currency Forward Contracts | Canadian Dollar | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional Value | 59,892,000 | 87,875,000 |
Asset Fair Value | 284,000 | 100,000 |
Liability Fair Value | 1,267,000 | $ 3,937,000 |
Foreign Currency Forward Contracts | Japanese Yen | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional Value | 26,737,000 | |
Liability Fair Value | $ 131,000 |
Derivative Instruments and He31
Derivative Instruments and Hedging Activities - Summary of Effects of Derivative Instruments on Other Comprehensive Income (OCI) and Consolidated Statements of Operations (Detail) - Foreign Currency Forward Contracts - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Canadian Dollar | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Pre-Tax Gain (Loss) Recognized in OCI | $ 544 | $ 4,901 |
Pre-Tax Gain (Loss) Reclassified from Accumulated OCI to Earnings (Effective Portion) | (2,634) | 5,673 |
Japanese Yen | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Pre-Tax Gain (Loss) Recognized in OCI | $ (131) | (374) |
Pre-Tax Gain (Loss) Reclassified from Accumulated OCI to Earnings (Effective Portion) | $ (808) |
Goodwill and Intangible Asset32
Goodwill and Intangible Assets - Summary of Gross Carrying Amount of Goodwill and Indefinite-Lived Intangible Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, Gross Carrying Amount | $ 3,342 | $ 3,342 |
Indefinite-lived intangible assets, Gross Carrying Amount | $ 436 | $ 436 |
Goodwill and Intangible Asset33
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Cumulative impairment of goodwill | $ 0 | $ 0 |
Cumulative impairment of indefinite-lived intangible assets | 0 | $ 0 |
Amortization expense, remainder of fiscal 2017 | 200,000 | |
Amortization expense, in fiscal 2018 | 400,000 | |
Amortization expense, in fiscal 2019 | 400,000 | |
Amortization expense, in fiscal 2020 | 400,000 | |
Amortization expense, in fiscal 2021 | $ 200,000 |
Goodwill and Intangible Asset34
Goodwill and Intangible Assets - Summary of Changes in Net Carrying Amount of Definite-Lived Intangible Assets (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Definite-lived intangible assets, beginning, Gross Carrying Amount | $ 4,315 | $ 4,312 |
Amortization expense, Gross Carrying Amount | 0 | 0 |
Adjustments, Gross Carrying Amount | 169 | |
Currency translation effect on foreign balances, Gross Carrying Amount | (15) | |
Definite-lived intangible assets, ending, Gross Carrying Amount | 4,469 | 4,312 |
Definite-lived intangible assets, beginning, Accumulated Amortization | (1,896) | (1,511) |
Amortization expense, Accumulated Amortization | (190) | (193) |
Adjustments, Accumulated Amortization | 31 | |
Currency translation effect on foreign balances, Accumulated Amortization | 11 | |
Definite-lived intangible assets, ending, Accumulated Amortization | $ (2,044) | $ (1,704) |
Financing - Additional Informat
Financing - Additional Information (Detail) - USD ($) | 1 Months Ended | 6 Months Ended | ||
Nov. 30, 2016 | Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | |
Line of Credit Facility [Line Items] | ||||
Outstanding borrowings | $ 73,857,000 | |||
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 September 30, 2016. | |||
Senior Secured Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maturity date | Mar. 31, 2021 | |||
Senior secured revolving credit agreement description | We may borrow up to $130.0 million during May through November and up to $75.0 million during all other months of the fiscal year. | |||
Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Outstanding borrowings | $ 73,857 | $ 0 | ||
Letter of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Outstanding letters of credit balances | $ 200,000 | $ 3,500,000 | ||
Minimum | Senior Secured Revolving Credit Facility | LIBOR Loans | ||||
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 | ||||
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% | |||
Amendment | Subsequent Event | Senior Secured Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility maximum borrowing capacity value | $ 130,000,000 | |||
Maturity date | Nov. 30, 2021 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 900,000 | $ 900,000 | $ 2,277,000 | $ 2,037,000 | |
Unrecognized compensation costs related to non-vested stock options, restricted stock awards and cash-settled SARs | 9,500,000 | $ 9,500,000 | |||
Compensation expense related to non-vested stock options, restricted stock and SARs awards, weighted average period of recognition | 2 years | ||||
Other accrued expense | $ 6,741,000 | $ 6,741,000 | $ 8,950,000 | ||
Unrealized gain (loss) on derivative instruments, tax expense (benefit) | 1,000,000 | $ (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 | 883,987 | 475,925 | 865,927 | 335,807 | |
Common stock option, weighted average exercise prices | $ 26.71 | $ 36.53 | $ 27.04 | $ 38.16 | |
Stock Appreciation Rights | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 100,000 | $ 200,000 | |||
Number of shares awarded | 0 | ||||
Number of shares forfeited | 0 | ||||
Other accrued expense | $ 200,000 | $ 200,000 |
Shareholders' Equity - Stock Op
Shareholders' Equity - Stock Option Transactions Under Plans (Detail) $ / shares in Units, $ in Thousands | 6 Months Ended |
Sep. 30, 2016USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Shares, Options outstanding beginning balance | shares | 678,209 |
Shares, Granted | shares | 344,169 |
Shares, Cancelled | shares | (42,980) |
Shares, Expired | shares | (13,939) |
Shares, Options outstanding ending balance | shares | 965,459 |
Shares, Exercisable | shares | 396,549 |
Weighted Average Exercise Price, Options outstanding beginning balance | $ / shares | $ 30.08 |
Weighted Average Exercise Price, Granted | $ / shares | 16.62 |
Weighted Average Exercise Price, Cancelled | $ / shares | 26.26 |
Weighted Average Exercise Price, Expired | $ / shares | 43.44 |
Weighted Average Exercise Price, Options outstanding ending balance | $ / shares | 25.26 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 28.01 |
Weighted Average Contractual Life, Options outstanding | 7 years 9 months 18 days |
Weighted Average Contractual Life, Exercisable | 6 years 11 days |
Aggregate Intrinsic Value, Options outstanding | $ | $ 310 |
Aggregate Intrinsic Value, Exercisable | $ | $ 290 |
Shareholders' Equity - Restrict
Shareholders' Equity - Restricted Stock Activity (Detail) | 6 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Restricted Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-vested shares, Beginning balance | shares | 39,863 |
Granted | shares | 1,179 |
Forfeited | shares | (2,200) |
Non-vested shares, Ending balance | shares | 38,842 |
Non-vested shares, Weighted-Average Grant Date Fair Value Beginning | $ / shares | $ 22.98 |
Granted | $ / shares | 16.74 |
Forfeited | $ / shares | 27.30 |
Non-vested shares, Weighted-Average Grant Date Fair Value Ending | $ / shares | $ 22.50 |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-vested shares, Beginning balance | shares | 186,258 |
Granted | shares | 59,993 |
Vested | shares | (12,749) |
Forfeited | shares | (39,140) |
Non-vested shares, Ending balance | shares | 194,362 |
Non-vested shares, Weighted-Average Grant Date Fair Value Beginning | $ / shares | $ 24.79 |
Granted | $ / shares | 16.56 |
Vested | $ / shares | 39.60 |
Forfeited | $ / shares | 19.20 |
Non-vested shares, Weighted-Average Grant Date Fair Value Ending | $ / shares | $ 22.29 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Weighted Average Shares Outstanding (Detail) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||||
Weighted average number of common shares outstanding | 13,048 | 12,985 | 13,047 | 12,972 |
Dilutive effect of option plan | 160 | 177 | ||
Common and potential shares outstanding - diluted | 13,048 | 13,145 | 13,047 | 13,149 |
Shareholders' Equity - Componen
Shareholders' Equity - Components of Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive loss, beginning | $ 167,391 | |||
Foreign currency translation adjustments | $ 227 | $ (64) | (423) | $ 1,043 |
Unrealized gain (loss) on derivative instruments, net of tax | 1,072 | 669 | 1,715 | (213) |
Accumulated other comprehensive loss, ending | 147,271 | 147,271 | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive loss, beginning | (10,184) | (7,142) | ||
Accumulated other comprehensive loss, ending | $ (8,892) | $ (6,312) | $ (8,892) | $ (6,312) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Jun. 14, 2016 | Jun. 01, 2016 |
Commitments and Contingencies [Line Items] | |||
Loss contingency damages awarded value | $ 46.7 | $ 15.5 | |
Post-Trial Damages | |||
Commitments and Contingencies [Line Items] | |||
Loss contingency damages awarded value | $ 1.5 | ||
Maximum | |||
Commitments and Contingencies [Line Items] | |||
Repurchase amount repossessed products sold to dealers | 78.3 | ||
Loss Sharing Provisions | Maximum | |||
Commitments and Contingencies [Line Items] | |||
Repurchase amount repossessed products sold to dealers | $ 4.2 |
Inventories - Components of Inv
Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials and sub-assemblies | $ 59,674 | $ 35,770 |
Finished goods | 90,820 | 64,127 |
Parts, garments and accessories | 45,209 | 40,110 |
Inventory, Total | $ 195,703 | $ 140,007 |
Product Warranties - Additional
Product Warranties - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Accrued Warranty [Line Items] | ||||
Product warranty, description | We generally provide a limited warranty for 12 months from the date of consumer registration on snowmobiles 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 | |||
Accrued warranty | $ 27,620 | $ 24,672 | $ 24,809 | $ 23,062 |
Warranty provision | 7,448 | 6,659 | ||
In House Extended Warranty Program [Member] | ||||
Accrued Warranty [Line Items] | ||||
Accrued warranty | 3,300 | $ 1,700 | ||
Warranty provision | $ 1,600 | |||
Third Party Extended Warranty [Member] | ||||
Accrued Warranty [Line Items] | ||||
Warranty provision | $ 1,700 |
Product Warranties - Changes in
Product Warranties - Changes in Accrued Warranty Liability (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Product Warranties Disclosures [Abstract] | ||
Accrued warranty, beginning | $ 24,809 | $ 23,062 |
Warranty provision | 7,448 | 6,659 |
Warranty claim payments | (4,637) | (5,049) |
Accrued warranty, ending | $ 27,620 | $ 24,672 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 164,610 | $ 211,157 | $ 269,482 | $ 345,538 |
Gross profit | 13,543 | 43,918 | 25,300 | 66,480 |
Snowmobile and ATV/ROV units | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 139,702 | 180,676 | 223,979 | 291,781 |
Gross profit | 6,433 | 32,937 | 10,032 | 47,085 |
Parts, garments and accessories | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 24,908 | 30,481 | 45,503 | 53,757 |
Gross profit | $ 7,110 | $ 10,981 | $ 15,268 | $ 19,395 |
New Market Tax Credit Transac46
New Market Tax Credit Transaction - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | ||
Sep. 30, 2016 | Mar. 31, 2016 | Feb. 29, 2016 | |
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 | $ 0.9 | |
Other Liabilities [Member] | |||
Variable Interest Entity [Line Items] | |||
Contribution amount recorded in other liabilities | $ 5.3 | $ 5.3 |