Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Jun. 08, 2020 | Sep. 30, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | MOTORCAR PARTS AMERICA INC | ||
Entity Central Index Key | 0000918251 | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 313,529,239 | ||
Entity Common Stock, Shares Outstanding | 18,972,380 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Mar. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Address, State or Province | CA |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 49,616,000 | $ 9,911,000 |
Short-term investments | 850,000 | 3,273,000 |
Accounts receivable - net | 91,748,000 | 56,015,000 |
Inventory - net | 225,659,000 | 233,726,000 |
Inventory unreturned | 9,021,000 | 8,469,000 |
Contract assets | 20,332,000 | 22,183,000 |
Income tax receivable | 3,282,000 | 10,009,000 |
Prepaid expenses and other current assets | 8,608,000 | 9,296,000 |
Total current assets | 409,116,000 | 352,882,000 |
Plant and equipment - net | 44,957,000 | 35,151,000 |
Operating lease assets | 53,029,000 | 0 |
Long-term deferred income taxes | 18,950,000 | 9,746,000 |
Long-term contract assets | 239,540,000 | 221,876,000 |
Goodwill | 3,205,000 | 3,205,000 |
Intangible assets - net | 6,393,000 | 8,431,000 |
Other assets | 1,839,000 | 1,071,000 |
TOTAL ASSETS | 777,029,000 | 632,362,000 |
Current liabilities: | ||
Accounts payable | 78,664,000 | 92,461,000 |
Accrued liabilities | 16,419,000 | 14,604,000 |
Customer finished goods returns accrual | 25,326,000 | 22,615,000 |
Contract liabilities | 27,911,000 | 30,599,000 |
Revolving loan | 152,000,000 | 110,400,000 |
Other current liabilities | 9,390,000 | 4,990,000 |
Operating lease liabilities | 5,104,000 | 0 |
Current portion of term loan | 3,678,000 | 3,685,000 |
Total current liabilities | 318,492,000 | 279,354,000 |
Term loan, less current portion | 20,462,000 | 24,187,000 |
Long-term contract liabilities | 92,101,000 | 40,889,000 |
Long-term deferred income taxes | 79,000 | 257,000 |
Long-term operating lease liabilities | 61,425,000 | 0 |
Other liabilities | 8,950,000 | 7,920,000 |
Total liabilities | 501,509,000 | 352,607,000 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock | 0 | 0 |
Common stock; par value $.01 per share, 50,000,000 shares authorized; 18,969,380 and 18,817,400 shares issued and outstanding at March 31, 2020 and 2019, respectively | 190,000 | 188,000 |
Additional paid-in capital | 218,581,000 | 215,047,000 |
Retained earnings | 64,117,000 | 71,407,000 |
Accumulated other comprehensive loss | (7,368,000) | (6,887,000) |
Total shareholders' equity | 275,520,000 | 279,755,000 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 777,029,000 | 632,362,000 |
Series A Junior Participating Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Mar. 31, 2019 |
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, issued (in shares) | 18,969,380 | 18,817,400 |
Common stock, outstanding (in shares) | 18,969,380 | 18,817,400 |
Series A Junior Participating Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 20,000 | 20,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Consolidated Statements of Operations [Abstract] | |||||||||||
Net sales | $ 150,735,000 | $ 125,574,000 | $ 150,374,000 | $ 109,148,000 | $ 129,077,000 | $ 124,113,000 | $ 127,939,000 | $ 91,668,000 | $ 535,831,000 | $ 472,797,000 | $ 427,548,000 |
Cost of goods sold | 114,152,000 | 97,913,000 | 113,801,000 | 91,565,000 | 103,127,000 | 102,952,000 | 102,228,000 | 75,316,000 | 417,431,000 | 383,623,000 | 320,515,000 |
Gross profit | 36,583,000 | 27,661,000 | 36,573,000 | 17,583,000 | 25,950,000 | 21,161,000 | 25,711,000 | 16,352,000 | 118,400,000 | 89,174,000 | 107,033,000 |
Operating expenses: | |||||||||||
General and administrative | 34,522,000 | 10,618,000 | 14,285,000 | 12,000,000 | 12,553,000 | 12,331,000 | 8,997,000 | 12,091,000 | 71,425,000 | 45,972,000 | 35,477,000 |
Sales and marketing | 5,047,000 | 5,623,000 | 5,448,000 | 4,919,000 | 5,464,000 | 5,149,000 | 4,537,000 | 4,392,000 | 21,037,000 | 19,542,000 | 15,030,000 |
Research and development | 2,506,000 | 2,174,000 | 2,148,000 | 2,372,000 | 2,440,000 | 2,054,000 | 1,784,000 | 1,736,000 | 9,200,000 | 8,014,000 | 5,692,000 |
Total operating expenses | 42,075,000 | 18,415,000 | 21,881,000 | 19,291,000 | 20,457,000 | 19,534,000 | 15,318,000 | 18,219,000 | 101,662,000 | 73,528,000 | 56,199,000 |
Operating income | (5,492,000) | 9,246,000 | 14,692,000 | (1,708,000) | 5,493,000 | 1,627,000 | 10,393,000 | (1,867,000) | 16,738,000 | 15,646,000 | 50,834,000 |
Interest expense, net | 5,464,000 | 6,879,000 | 6,523,000 | 6,173,000 | 6,689,000 | 5,764,000 | 5,699,000 | 5,075,000 | 25,039,000 | 23,227,000 | 15,445,000 |
(Loss) income before income tax (benefit) expense | (10,956,000) | 2,367,000 | 8,169,000 | (7,881,000) | (1,196,000) | (4,137,000) | 4,694,000 | (6,942,000) | (8,301,000) | (7,581,000) | 35,389,000 |
Income tax (benefit) expense | (2,763,000) | 1,502,000 | 1,980,000 | (1,730,000) | 1,569,000 | (1,035,000) | 1,181,000 | (1,447,000) | (1,011,000) | 268,000 | 16,125,000 |
Net (loss) income | $ (8,193,000) | $ 865,000 | $ 6,189,000 | $ (6,151,000) | $ (2,765,000) | $ (3,102,000) | $ 3,513,000 | $ (5,495,000) | $ (7,290,000) | $ (7,849,000) | $ 19,264,000 |
Basic net (loss) income per share (in dollars per share) | $ (0.43) | $ 0.05 | $ 0.33 | $ (0.33) | $ (0.15) | $ (0.16) | $ 0.19 | $ (0.29) | $ (0.39) | $ (0.42) | $ 1.02 |
Diluted net (loss) income per share (in dollars per share) | $ (0.43) | $ 0.04 | $ 0.32 | $ (0.33) | $ (0.15) | $ (0.16) | $ 0.18 | $ (0.29) | $ (0.39) | $ (0.42) | $ 0.99 |
Weighted average number of shares outstanding: | |||||||||||
Basic (in shares) | 18,913,788 | 18,849,909 | 18,854,993 | ||||||||
Diluted (in shares) | 18,913,788 | 18,849,909 | 19,514,775 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Consolidated Statements of Comprehensive (Loss) Income [Abstract] | |||
Net (loss) income | $ (7,290,000) | $ (7,849,000) | $ 19,264,000 |
Other comprehensive (loss) income, net of tax: | |||
Unrealized gain on short-term investments (net of tax of $0, $0 and $118,000, respectively) | 0 | 0 | 218,000 |
Foreign currency translation (loss) gain | (481,000) | (713,000) | 1,795,000 |
Total other comprehensive (loss) income, net of tax | (481,000) | (713,000) | 2,013,000 |
Comprehensive (loss) income | $ (7,771,000) | $ (8,562,000) | $ 21,277,000 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Other comprehensive (loss) income, net of tax: | |||
Unrealized gain on short-term investments, tax | $ 0 | $ 0 | $ 118,000 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital Common Stock [Member] | Retained Earnings [Member] | Other Comprehensive (Loss) Income [Member] | Total |
Beginning balance at Mar. 31, 2017 | $ 186,000 | $ 205,646,000 | $ 59,246,000 | $ (7,441,000) | $ 257,637,000 |
Beginning balance (in shares) at Mar. 31, 2017 | 18,648,854 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Compensation recognized under employee stock plans | $ 0 | 3,766,000 | 0 | 0 | 3,766,000 |
Exercise of stock options | $ 1,000 | 480,000 | 0 | 0 | 481,000 |
Exercise of stock options (in shares) | 55,351 | ||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | $ 1,000 | (597,000) | 0 | 0 | (596,000) |
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes (in shares) | 47,508 | ||||
Repurchase and cancellation of treasury stock, including fees | $ (4,000) | (9,247,000) | 0 | 0 | (9,251,000) |
Repurchase and cancellation of treasury stock, including fees (in shares) | (374,740) | ||||
Exercise of warrant for shares of common stock | $ 5,000 | 13,561,000 | 0 | 0 | 13,566,000 |
Exercise of warrant for shares of common stock (in shares) | 516,129 | ||||
Unrealized gain on investments, net of tax | $ 0 | 0 | 0 | 218,000 | 218,000 |
Foreign currency translation | 0 | 0 | 0 | 1,795,000 | 1,795,000 |
Net (loss) income | 0 | 0 | 19,264,000 | 0 | 19,264,000 |
Ending balance at Mar. 31, 2018 | $ 189,000 | 213,609,000 | 78,510,000 | (5,428,000) | 286,880,000 |
Ending balance (in shares) at Mar. 31, 2018 | 18,893,102 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative-effect adjustment | ASU 2016-01 [Member] | $ 0 | 0 | 746,000 | (746,000) | 0 |
Adjusted beginning balance at Mar. 31, 2018 | 189,000 | 213,609,000 | 79,256,000 | (6,174,000) | 286,880,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Compensation recognized under employee stock plans | 0 | 5,564,000 | 0 | 0 | 5,564,000 |
Exercise of stock options | $ 1,000 | 256,000 | 0 | 0 | 257,000 |
Exercise of stock options (in shares) | 42,032 | ||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | $ 0 | (322,000) | 0 | 0 | (322,000) |
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes (in shares) | 46,081 | ||||
Repurchase and cancellation of treasury stock, including fees | $ (2,000) | (4,060,000) | 0 | 0 | (4,062,000) |
Repurchase and cancellation of treasury stock, including fees (in shares) | (163,815) | ||||
Unrealized gain on investments, net of tax | 0 | ||||
Foreign currency translation | $ 0 | 0 | 0 | (713,000) | (713,000) |
Net (loss) income | 0 | 0 | (7,849,000) | 0 | (7,849,000) |
Ending balance at Mar. 31, 2019 | $ 188,000 | 215,047,000 | 71,407,000 | (6,887,000) | $ 279,755,000 |
Ending balance (in shares) at Mar. 31, 2019 | 18,817,400 | 18,817,400 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative-effect adjustment | ASU 2016-01 [Member] | 0 | ||||
Adjusted beginning balance at Mar. 31, 2019 | (6,887,000) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Compensation recognized under employee stock plans | $ 0 | 4,141,000 | 0 | 0 | $ 4,141,000 |
Exercise of stock options | $ 1,000 | 456,000 | 0 | 0 | 457,000 |
Exercise of stock options (in shares) | 59,600 | ||||
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes | $ 1,000 | (1,063,000) | 0 | 0 | (1,062,000) |
Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes (in shares) | 92,380 | ||||
Unrealized gain on investments, net of tax | 0 | ||||
Foreign currency translation | $ 0 | 0 | 0 | (481,000) | (481,000) |
Net (loss) income | 0 | 0 | (7,290,000) | 0 | (7,290,000) |
Ending balance at Mar. 31, 2020 | $ 190,000 | $ 218,581,000 | $ 64,117,000 | $ (7,368,000) | $ 275,520,000 |
Ending balance (in shares) at Mar. 31, 2020 | 18,969,380 | 18,969,380 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (7,290,000) | $ (7,849,000) | $ 19,264,000 |
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 7,791,000 | 6,135,000 | 3,798,000 |
Amortization of intangible assets | 1,770,000 | 1,194,000 | 710,000 |
Amortization and write -off of debt issuance costs | 819,000 | 951,000 | 1,060,000 |
Amortization of interest on contract liabilities, net | 713,000 | 909,000 | 670,000 |
Amortization of core premiums paid to customers | 4,501,000 | 4,127,000 | 3,588,000 |
Non-cash lease expense | 5,808,000 | 0 | 0 |
Loss due to the remeasurement of lease liabilities | 11,710,000 | 0 | 0 |
Foreign currency remeasurement loss | 818,000 | 0 | 0 |
(Gain) loss due to the change in the fair value of the contingent consideration | (98,000) | 324,000 | 0 |
Gain on short-term investments | (96,000) | (89,000) | 0 |
Gain due to the change in the fair value of the warrant liability | 0 | 0 | (2,313,000) |
Net provision for inventory reserves | 13,372,000 | 11,153,000 | 8,491,000 |
Net provision for customer payment discrepancies | 1,626,000 | 731,000 | 998,000 |
Net provision for doubtful accounts | 610,000 | 224,000 | 21,000 |
Deferred income taxes | (10,337,000) | (3,063,000) | 1,548,000 |
Share-based compensation expense | 4,141,000 | 5,564,000 | 3,766,000 |
Loss on disposal of plant and equipment | 15,000 | 41,000 | 161,000 |
Change in operating assets and liabilities, net of effects of acquisitions: | |||
Accounts receivable | (38,078,000) | 10,214,000 | (3,298,000) |
Inventory | (6,112,000) | (76,213,000) | (33,655,000) |
Inventory unreturned | (552,000) | (961,000) | 73,000 |
Income tax receivable | 6,753,000 | (2,039,000) | (6,312,000) |
Prepaid expenses and other current assets | (416,000) | 234,000 | (965,000) |
Other assets | (1,109,000) | (299,000) | (120,000) |
Accounts payable and accrued liabilities | (11,253,000) | 16,572,000 | (11,671,000) |
Customer finished goods returns accrual | 2,725,000 | 4,588,000 | 138,000 |
Contract assets, net | (15,835,000) | (2,096,000) | (25,028,000) |
Contract liabilities, net | 43,372,000 | (11,894,000) | 23,871,000 |
Operating lease liabilities | (4,726,000) | 0 | 0 |
Other liabilities | 8,153,000 | 1,214,000 | 1,261,000 |
Net cash provided by (used in) operating activities | 18,795,000 | (40,328,000) | (13,944,000) |
Cash flows from investing activities: | |||
Purchase of plant and equipment | (14,156,000) | (11,149,000) | (9,933,000) |
Purchase of business, net of cash acquired | 0 | (11,106,000) | (4,993,000) |
Proceeds from sale of plant and equipment | 43,000 | 0 | 0 |
Redemptions of (payments for) short term investments | 2,519,000 | (355,000) | (352,000) |
Net cash used in investing activities | (11,594,000) | (22,610,000) | (15,278,000) |
Cash flows from financing activities: | |||
Borrowings under revolving loan | 75,000,000 | 102,900,000 | 84,000,000 |
Repayments of revolving loan | (33,400,000) | (46,500,000) | (41,000,000) |
Borrowings under term loan | 0 | 13,594,000 | 0 |
Repayments of term loan | (3,750,000) | (2,656,000) | (3,125,000) |
Payments for debt issuance costs | (973,000) | (1,815,000) | (462,000) |
Payments on finance lease obligations | (2,164,000) | (1,460,000) | (905,000) |
Payment of contingent consideration | (1,955,000) | 0 | 0 |
Exercise of stock options | 457,000 | 257,000 | 481,000 |
Cash used to net share settle equity awards | (1,062,000) | (322,000) | (596,000) |
Repurchase of common stock, including fees | 0 | (4,062,000) | (9,251,000) |
Exercise of warrant | 0 | 0 | 4,000,000 |
Net cash provided by financing activities | 32,153,000 | 59,936,000 | 33,142,000 |
Effect of exchange rate changes on cash and cash equivalents | 351,000 | (136,000) | 100,000 |
Net increase (decrease) in cash and cash equivalents | 39,705,000 | (3,138,000) | 4,020,000 |
Cash and cash equivalents - Beginning of period | 9,911,000 | 13,049,000 | 9,029,000 |
Cash and cash equivalents - End of period | 49,616,000 | 9,911,000 | 13,049,000 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest, net | 23,558,000 | 21,148,000 | 13,623,000 |
Cash paid for income taxes, net of refunds | 1,500,000 | 3,588,000 | 19,657,000 |
Cash paid for operating leases | 8,212,000 | 0 | 0 |
Cash paid for finance leases | 2,445,000 | 0 | 0 |
Plant and equipment acquired under finance leases | 3,144,000 | 902,000 | 3,478,000 |
Assets acquired under operating leases | 18,528,000 | 0 | 0 |
Contingent consideration | 0 | 4,400,000 | 0 |
Non-cash capital expenditures | $ 2,211,000 | $ 0 | $ 0 |
Company Background and Organiza
Company Background and Organization | 12 Months Ended |
Mar. 31, 2020 | |
Company Background and Organization [Abstract] | |
Company Background and Organization | 1. Company Background and Organization Motorcar Parts of America, Inc. and its subsidiaries (the “Company”, or “MPA”) is a leading supplier of automotive aftermarket non-discretionary replacement parts and diagnostic equipment. These replacement parts are primarily sold to automotive retail chain stores and warehouse distributors throughout North America and to major automobile manufacturers for both their aftermarket programs and warranty replacement programs (“OES”). The Company’s diagnostic equipment primarily serves the global automotive component and powertrain testing market. The Company’s products include (i) rotating electrical products such as alternators and starters, (ii) wheel hub assemblies and bearings, (iii) brake-related products, which include brake calipers, brake boosters, and brake master cylinders, and (iv) diagnostics and other products, which include diagnostics systems, advanced power emulators used for the development of electric vehicles and aerospace applications, and custom power electronic products for quality control in the development and production of electric vehicles and turbochargers. The Company primarily ships its products from its facilities and various third-party warehouse distribution centers in North America, including the Company’s 410,000 square foot distribution center in Tijuana, Mexico. The recent outbreak of the COVID-19 pandemic has led to adverse impacts on the U.S. and global economies and created uncertainty regarding potential impacts to the Company’s employees, supply chain, operations, and customer demand. The COVID-19 pandemic could impact the Company’s operations and the operations of its customers, suppliers and vendors as a result of quarantines, facility closures, and travel and logistics restrictions. The extent to which the COVID-19 pandemic impacts the Company’s business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on its customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by local, state and federal governments, and to what extent normal economic and operating conditions can resume. Even after the COVID-19 pandemic has subsided, the Company may continue to experience adverse impacts to its business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Company cannot reasonably estimate the impact at this time. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies New Accounting Pronouncements Recently Adopted Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance that requires balance sheet recognition of a lease asset and lease liability by lessees for all leases, other than leases with a term of 12 months or less if the short-term lease exclusion expedient is elected. The new guidance also required new disclosures providing additional qualitative and quantitative information about the amounts recorded in the financial statements. The new guidance requires a modified retrospective approach with optional practical expedients. The FASB provided entities with an additional transition method, which allows an entity to apply this guidance as of the beginning of the period of adoption instead of the beginning of the earliest comparative period presented in the entity’s financial statements. The Company adopted this guidance on April 1, 2019 using the modified retrospective approach and the optional transition method permitted by the FASB. The Company also elected certain practical expedients permitted under the transition guidance, including the package of practical expedients, which allowed it not to reassess lease classification for leases that commenced prior to the adoption date. In addition, the Company elected to exempt leases with an initial term of 12 months or less from balance sheet recognition and, for all classes of assets, combining non-lease components with lease components. Upon adoption, the Company recorded operating lease liabilities of $53,043,000 and corresponding operating lease assets of $50,773,000. The difference between the operating lease assets and liabilities recognized on the Company’s consolidated balance sheets primarily related to accrued rent on existing leases that were offset against the operating lease asset upon adoption. There was an immaterial reclassification of non-lease components to finance lease assets and finance lease liabilities upon adoption due to the Company’s election to combine non-lease components with lease components. The adoption of the new guidance did not have any impact on the Company’s rent expense and consolidated statement of cash flows. However, the Company has material nonfunctional currency leases that could have a material impact on the Company’s consolidated statements of operations. As required for other monetary liabilities, lessees shall remeasure a foreign currency-denominated lease liability using the exchange rate at each reporting date, but the lease assets are nonmonetary assets measured at historical rates, which are not affected by subsequent changes in the exchange rates. The Company recorded a loss of $11,710,000 in general and administrative expenses in connection with the remeasurement of foreign currency-denominated lease liabilities during year ended March 31, 2020. See Note 11 for additional discussion of the adoption of ASC 842 and the impact on the Company’s financial statements. New Accounting Pronouncements Not Yet Adopted Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued an accounting pronouncement related to the measurement of credit losses on financial instruments. This pronouncement, along with a subsequent Accounting Standards Updates (“ASU”) issued to clarify certain provisions of the new guidance, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. The Company will adopt this guidance on April 1, 2020 and the adoption is not expected to have a significant impact on its consolidated financial statements and related disclosures. In addition, the adoption is not expected to have any significant impact on the Company’s business processes, systems and internal controls. Fair Value Measurements In August 2018, the FASB issued guidance , Income Taxes In December 2019, the FASB issued guidance that simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes Reference Rate Reform In March 2020, the FASB issued guidance that, for a limited time, eases the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating its contracts and the optional expedients provided by this guidance and the impact the new standard will have on its consolidated financial statements and related disclosures. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Motorcar Parts of America, Inc. and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated. Segment Reporting Pursuant to the guidance provided under the Financial Accounting Statement Board (“FASB”) Accounting Standards Codification (“ASC”) for segment reporting, the Company has identified its chief operating decision maker (“CODM”), reviewed the documents used by the CODM, and understands how such documents are used by the CODM to make financial and operating decisions. The Company has determined through this review process that its business comprises three separate operating segments. Two of the operating segments meet all of the aggregation criteria, and are aggregated. The remaining operating segment does not meet the quantitative thresholds for individual disclosure and the Company has combined its operating segments into one reportable segment. Cash and Cash Equivalents Cash primarily consists of cash on hand and bank deposits. Cash equivalents consist of money market funds. The Company considers all highly liquid investments purchased with an original or remaining maturity of less than three months at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with various financial institutions. Accounts Receivable The allowance for doubtful accounts is developed based upon several factors including customer credit quality, historical write-off experience and any known specific issues or disputes which exist as of the balance sheet date. Accounts receivable are written off only when all collection attempts have failed. The Company does not require collateral for accounts receivable. The Company has receivable discount programs that have been established with certain major customers and their respective banks. Under these programs, the Company has the option to sell those customers’ receivables to those banks at a discount to be agreed upon at the time the receivables are sold. Once the customer chooses which outstanding invoices are going to be made available for discounting, the Company can accept or decline the bundle of invoices provided. The receivable discount programs are non-recourse, and funds cannot be reclaimed by the customer or its bank after the related invoices have been discounted. Inventory Inventory is comprised of: (i) Used Core and component raw materials, (ii) work-in-process, (iii) remanufactured finished goods and purchased finished goods. Used Core, component raw materials, and purchased finished goods are stated at the lower of average cost or net realizable value. Work-in-process is in various stages of production and is valued at the average cost of Used Cores and component raw materials issued to work orders still open, including allocations of labor and overhead costs. Historically, work- in-process inventory has not been material compared to the total inventory balance. Remanufactured finished goods include: (i) the Used Core cost and (ii) the cost of component raw materials, and allocations of labor and variable and fixed overhead costs (the “Unit Value”). The allocations of labor and variable and fixed overhead costs are based on the actual use of the production facilities over the prior 12 months which approximates normal capacity. This method prevents the distortion in allocated labor and overhead costs that would occur during short periods of abnormally low or high production. In addition, the Company excludes certain unallocated overhead such as severance costs, duplicative facility overhead costs, start-up costs, training, and spoilage from the calculation and expenses these unallocated overhead as period costs. Purchased finished goods also include an allocation of fixed overhead costs. The estimate of net realizable value is subjective and based on management’s judgment and knowledge of current industry demand and management’s projections of industry demand. The estimates may, therefore, be revised if there are changes in the overall market for the Company’s products or market changes that in management’s judgment, impact its ability to sell or liquidate potentially excess or obsolete inventory. Net realizable value is determined at least quarterly as follows: • Net realizable value for finished goods by customer by product line are determined based on the agreed upon selling price with the customer for a product in the trailing 12 months. The Company compares the average selling price, including any discounts and allowances, to the finished goods cost of on-hand inventory less any reserve for excess and obsolete inventory. Any reduction of value is recorded as cost of goods sold in the period in which the revaluation is identified. • Net realizable value for Used Cores are determined based on current core purchase prices from core brokers to the extent that core purchases in the trailing 12 months are significant. Remanufacturing consumes, on average, more than one Used Core for each remanufactured unit produced since not all Used Cores are resuable. The yield rates depend upon both the product and consumer specifications. The Company purchases Used Cores from core brokers to supplement its yield rates and Used Cores not returned under the core exchange program. The Company also considers the net selling price its customers have agreed to pay for Used Cores that are not returned under its core exchange program to assess whether Used Core cost exceeds Used Core net realizable value on a by customer by product line basis. Any reduction of core cost is recorded as cost of goods sold in the period in which the revaluation is identified. • The Company records an allowance for potentially excess and obsolete inventory based upon recent sales history, the quantity of inventory on-hand, and a forecast of potential use of the inventory. The Company periodically reviews inventory to identify excess quantities and part numbers that are experiencing a reduction in demand. Any part numbers with quantities identified during this process are reserved for at rates based upon management’s judgment, historical rates, and consideration of possible scrap and liquidation values which may be as high as 100% of cost if no liquidation market exists for the part. As a result of this process, the Company recorded reserves for excess and obsolete inventory of $13,208,000 and $11,899,000 at March 31, 2020 and 2019, respectively. The increase in the reserve for excess and obsolete inventory was primarily driven by the Company’s January 2019 acquisition of Dixie Electric, Ltd. (see Note 3 below). The Company records vendor discounts as a reduction of inventories and are recognized as a reduction to cost of sales as the inventories are sold. Inventory Unreturned Inventory unreturned represents the Company’s estimate, based on historical data and prospective information provided directly by the customer, of finished goods shipped to customers that the Company expects to be returned under its general right of return policy, after the balance sheet date. Inventory unreturned includes only the Unit Value of a finished good. The return rate is calculated based on expected returns within the normal operating cycle, which is generally one year. As such, the related amounts are classified in current assets. Inventory unreturned is valued in the same manner as the Company’s finished goods inventory. Contract Assets Contract assets consists of: (i) the core portion of the finished goods shipped to the Company’s customers, (ii) upfront payments to customers in connection with customer contracts, (iii) core premiums paid to customers, and (iv) long-term core inventory deposits. Remanufactured Cores held at customers’ locations as a part of the finished goods sold to the customer are classified as long-term contract assets. These assets are valued at the lower of cost or net realizable value of Used Cores on hand (See Inventory above). For these Remanufactured Cores, the Company expects the finished good containing the Remanufactured Core to be returned under the Company’s general right of return policy or a similar Used Core to be returned to the Company by the customer, under the Company’s core exchange program in each case, for credit. The Remanufactured Cores and Used Cores returned by consumers to the Company’s customers but not yet returned to the Company are classified as “Cores expected to be returned by customers”, which are included in short-term contract assets until the Company physically receives them during its normal operating cycle, which is generally one year. Upfront payments to customers represent the marketing allowances, such as sign-on bonuses, slotting fees, and promotional allowances provided by the Company to its customers. These allowances are recognized as an asset and amortized over the appropriate period of time as a reduction of revenue if the Company expects to generate future revenues associated with the upfront payment. If the Company does not expect to generate additional revenue, then the upfront payment is recognized in the consolidated statements of operations when payment occurs as a reduction of revenue. Upfront payments expected to be amortized during the Company’s normal operating cycle, which is generally one year, are classified as short-term contract assets. Core premiums paid to customers represent the difference between the Remanufactured Core acquisition price paid to customers generally in connection with new business, and the related Used Core cost, which is treated as an asset and recognized as a reduction of revenue through the later of the date at which related revenue is recognized or the date at which the sales incentive is offered. The Company considers, among other things, the length of its largest ongoing customer relationships, duration of customer contracts, and the average life of vehicles on the road in determining the appropriate period of time over which to amortize these premiums. These core premiums are amortized over a period typically ranging from six to eight years, adjusted for specific circumstances associated with the arrangement. Core premiums are recorded as long-term contract assets. Core premiums expected to be amortized within the Company’s normal operating cycle, which is generally one year, are classified as short-term contract assets. Long-term core inventory deposits represent the cost of Remanufactured Cores the Company has purchased from customers, which are held by the customers and remain on the customers’ premises. The costs of these Remanufactured Cores were established at the time of the transaction based on the then current cost. The selling value of these Remanufactured Cores was established based on agreed upon amounts with these customers. The Company expects to realize the selling value and the related cost of these Remanufactured Cores should its relationship with a customer end, a possibility that the Company considers remote based on existing long-term customer agreements and historical experience. Customer Finished Goods Returns Accrual The customer finished goods returns accrual represents the Company’s estimate of its exposure to customer returns, including warranty returns, under its general right of return policy to allow customers to return items that their end user customers have returned to them and from time to time, stock adjustment returns when the customers’ inventory of certain product lines exceeds the anticipated sales to end-user customers. The customer finished goods returns accrual represents the Unit Value of the estimated returns and is classified as a current liability due to the expectation that these returns will occur within the normal operating cycle of one year. Income Taxes The Company accounts for income taxes using the liability method, which measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The resulting asset or liability is adjusted to reflect changes in the tax laws as they occur. A valuation allowance is provided to reduce deferred tax assets when it is more likely than not that a portion of the deferred tax asset will not be realized. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act: (i) removes certain net operating loss deduction and carry-back limitations originally imposed by the Tax Cuts and Jobs Act of 2017, (ii) increases IRC §163(j) business interest expense limitations, and (iii) technical correction on recovery period for qualified improvement property (QIP), allowing QIP to be eligible for bonus depreciation. Specifically, the Company may now carry back net operating losses originating in the year ended March 31, 2019 to the year ended March 31, 2017, resulting in an increase to its income tax receivable of $1,002,000 as of March 31, 2020. The primary components of income tax (benefit) expense were: (i) federal income taxes, (ii) the impact of net operating loss carry-backs in connection with the CARES Act, (iii) foreign income taxed at rates that are different from the federal statutory rate, (iv) change in realizable deferred tax items, (v) impact of the non-deductible executive compensation under Internal Revenue Code Section 162(m), (vi) income taxes associated with uncertain tax positions, (vii) the change in the blended state rate, and (viii) the excess tax benefit relating to share-based compensation. Realization of deferred tax assets is dependent upon the Company’s ability to generate sufficient future taxable income. Significant judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against the Company’s net deferred tax assets. The Company makes these estimates and judgments about its future taxable income that are based on assumptions that are consistent with the Company’s future plans. A valuation allowance is established when the Company believes it is not more likely than not all or some of a deferred tax assets will be realized. In evaluating the Company’s ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence. Deferred tax assets arising primarily as a result of net operating loss carry-forwards and research and development credits in connection with the Company’s recent acquisitions have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Should the actual amount differ from the Company’s estimates, the amount of the valuation allowance could be impacted. The Company has made an accounting policy election to recognize the U.S. tax effects of global intangible low- taxed income as a component of income tax expense in the period the tax arises. Plant and Equipment Plant and equipment are stated at cost, less accumulated depreciation. The cost of additions and improvements are capitalized, while maintenance and repairs are charged to expense when incurred. Depreciation is provided on a straight-line basis in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives. Machinery and equipment are depreciated over a range from five to ten years. Office equipment and fixtures are depreciated over a range from three to ten years. Leasehold improvements are depreciated over the lives of the respective leases or the service lives of the leasehold improvements, whichever is shorter. Depreciation of assets recorded under finance leases is included in depreciation expense. The Company evaluates plant and equipment, including leasehold improvements, equipment and construction in progress, and right-of-use assets for impairment whenever events or circumstances indicate that the carrying value of an asset or asset group may not be recoverable. The Company groups assets at the lowest level for which cash flows are separately identified in order to measure an impairment. Events or circumstances that would result in an impairment review include a significant change in the use of an asset, the planned sale or disposal of an asset, or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset group. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to future undiscounted cash flows expected to be generated by the asset group. If it is determined to be impaired, the impairment recognized is measured by the amount by which the carrying value of the asset exceeds its fair value. As a result of the effect of the COVID-19 pandemic on macroeconomic conditions and its potential impact to the Company’s sales and operating income for future periods, it was determined that certain impairment testing triggers had occurred for the Company’s long-lived assets. Assumptions and estimates used to determine cash flows in the evaluation of impairment are subject to a degree of judgment and complexity. Any future changes to the assumptions and estimates resulting from changes in actual results or market conditions from those anticipated may affect the carrying value of long-lived assets and could result in impairment charges. Future events that may result in impairment charges include extended unfavorable economic impacts of COVID-19, or other factors which could decrease revenues and profitability of existing locations and changes in the cost structure of existing facilities. Based on the undiscounted cash flow analysis performed, the Company determined that estimated undiscounted future cash flows exceeded the net carrying values of its long-lived assets, and, therefore, as of March 31, 2020, the Company’s long-lived assets were not impaired. Assumptions and estimates about future values and remaining useful lives of the Company’s long-lived assets are subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in the Company’s business strategy and its internal forecasts. Goodwill The Company evaluates goodwill for impairment at least annually during the fourth quarter of each fiscal year or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The goodwill impairment test is performed at the reporting unit level, which represents the Company’s operating segments. In testing for goodwill impairment, the Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company’s qualitative assessment indicates that goodwill impairment is more likely than not, it will proceed with performing the quantitative assessment. If the fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired. If the carrying value of the reporting unit exceeds its fair value an impairment loss will be recognized for the amount by which the carrying value exceeds the reporting unit’s fair value. The Company performed a qualitative assessment of goodwill impairment indicators, considering macroeconomic conditions related to the COVID-19 pandemic and its potential impact to sales and operating income for future periods. The Company expects that the duration of the COVID-19 pandemic and the continued impact of global travel restrictions, government shutdowns of non-essential businesses and disruptions to its supply chain and distribution channels to result in lower revenue and operating income for future periods. As a result, the Company determined that there were indicators of impairment, and it proceeded with a quantitative assessment of goodwill for all reporting units at March 31, 2020. To estimate the fair value of its reporting units, the Company uses a combination of the market approach and the income approach. Under the market approach, the Company estimates fair value by comparing the business to similar businesses, or guideline companies whose securities are actively traded in public markets. Under the income approach, the Company uses a discounted cash flow (“DCF”) model in which cash flows anticipated over several periods, plus a terminal value at the end of that time horizon, are discounted to their present value using an appropriate rate that is commensurate with the risk inherent within the reporting unit. In addition, the Company compares the aggregate of the reporting units’ fair values to its market capitalization as further corroboration of the fair values. Estimates of fair value result from judgments about future events and uncertainties and rely on estimates and assumptions at a point in time. Judgments made in determining an estimate of fair value may materially impact the Company’s results of operations. The valuations are based on information available as of the impairment testing date and are based on expectations and assumptions that have been deemed reasonable by management. Any material changes in key assumptions, including failure to meet business plans, deterioration in the U.S. and global financial markets, an increase in interest rates or an increase in the cost of equity financing by market participants within the industry or other unanticipated events and circumstances, may decrease the projected cash flows or increase the discount rates and could potentially result in an impairment charge. Under the market approach, significant estimates and assumptions also include the selection of appropriate guideline companies and the determination of appropriate valuation multiples to apply to the reporting unit. Under the income approach, significant estimates and assumptions also includes the determination of discount rates. The discount rates represent the weighted average cost of capital measuring the reporting unit’s cost of debt and equity financing, which are weighted by the percentage of debt and percentage of equity in a company’s target capital structure. Included in the estimate of the weighted average cost of capital is the assumption of a risk premium to address incremental uncertainty related to the reporting units’ future cash flow projections. An increase in the risk premium increases the discount rate. The Company completed the required annual testing of goodwill impairment for each of the reporting units during the fourth quarter of the year ended March 31, 2020, and determined through the quantitative assessment that its goodwill of $3,205,000 was not impaired. Intangible Assets The Company’s intangible assets other than goodwill are finite–lived and amortized on a straight-line basis over their respective useful lives. The Company analyzes its finite-lived intangible assets for impairment when and if indicators of impairment exist. As discussed under the caption “Goodwill” above, as a result of the COVID-19 pandemic, the Company determined that there were indicators of impairment present at March 31, 2020. Accordingly, the Company analyzed undiscounted cash flows for finite lived intangible assets as of March 31, 2020. Based on that undiscounted cash flow analysis, the Company determined that estimated undiscounted future cash flows exceeded their net carrying values, and, therefore, as of March 31, 2020, the Company’s net intangible assets were not impaired. Assumptions and estimates about future values and remaining useful lives of the Company’s intangible assets are subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in the Company’s business strategy and its internal forecasts. Debt Issuance Costs Debt issuance costs include fees and costs incurred to obtain financing. Debt issuance costs related to the Company’s term loans are presented in the balance sheet as a direct deduction from the carrying amount of the term loans. Debt issuance costs related to the Company’s revolving loan are presented in prepaid expenses and other current assets in the accompanying consolidated balance sheets, regardless of whether or not there are any outstanding borrowings under the revolving loan. These fees and costs are amortized using the straight-line method, which approximates the effective interest rate method, over the terms of the related loans and are included in interest expense in the Company’s consolidated statements of operations. Foreign Currency Translation For financial reporting purposes, the functional currency of the foreign subsidiaries is the local currency. The assets and liabilities of foreign operations for which the local currency is the functional currency are translated into the U.S. dollar at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average exchange rates during the year. The accumulated foreign currency translation adjustment is presented as a component of comprehensive income or loss in the consolidated statements of shareholders’ equity. During the year ended March 31, 2020, aggregate foreign currency transaction losses of $789,000 were recorded in general and administrative expenses. Revenue Recognition Revenue is recognized when performance obligations under the terms of a contract with its customers are satisfied; generally, this occurs with the transfer of control of its manufactured, remanufactured, or distributed products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Revenue is recognized net of all anticipated returns, including Used Core returns under the core exchange program, marketing allowances, volume discounts, and other forms of variable consideration. Revenue is recognized either when products are shipped or when delivered, depending on the applicable contract terms. Bill and hold shipments are shipped out to the customer as ex-works; in which the customer makes arrangements and is responsible for their shipping cost. No freight or shipping costs are accrued for revenue under the terms of shipments made as ex-works. The price of a finished remanufactured product sold to customers is generally comprised of separately invoiced amounts for the Remanufactured Core included in the product (“Remanufactured Core value”) and the Unit Value. The Unit Value is recorded as revenue based on the Company’s then current price list, net of applicable discounts and allowances. The Remanufactured Core value is recorded as a net revenue based upon the estimate of Used Cores that will not be returned by the customer for credit. These estimates are subjective and based on management’s judgment and knowledge of historical, current, and projected return rates. As re |
Acquisitions
Acquisitions | 12 Months Ended |
Mar. 31, 2020 | |
Acquisitions [Abstract] | |
Acquisitions | 3. Acquisitions Mechanical Power Conversion, LLC In December 2018, the Company completed the acquisition of certain assets and assumption of certain liabilities from Mechanical Power Conversion, LLC (“E&M”), a privately held company operating as E&M Power and engaged in the design and manufacture of advanced power emulators (AC and DC) and custom power electronic products, based in Binghamton, New York. Future activity of this business will be recorded via D&V Electronics USA, operating as the Company’s registered DBA (Doing Business As) entity. The addition of new products from E&M increased the Company’s revenue potential and product portfolio. The acquisition was consummated pursuant to an asset purchase agreement for an initial cash purchase price of $4,417,000, plus an additional working capital adjustment of $42,000 paid to the former owners of E&M. In addition, the Company is contingently obligated to make additional payments to the former owners of E&M up to an aggregate of $5,200,000 over the next 2-3 years. The initial fair value of the contingent consideration as of the acquisition date was $3,560,000 determined using a probability weighted method and a Monte Carlo Simulation model. Identified intangible assets acquired have the following useful lives: (i) five years for developed technology, (ii) eight years for customer relationships, and (iii) six months for order backlog. The goodwill recorded in connection with the acquisition of E&M is deductible for income tax purposes. The Company incurred $355,000 in acquisition costs during the year ended March 31, 2019, which were recorded in general and administrative expenses. The assets and results of operations of E&M were not significant to the Company’s consolidated financial position or results of operations, and thus pro forma information is not presented. Dixie Electric, Ltd. In January 2019, the Company completed the acquisition of all the equity interests of Dixie Electric, Ltd (“Dixie”), a privately held manufacturer and remanufacturer of alternators and starters for automotive aftermarket non- discretionary replacement parts for heavy-duty truck, industrial, marine and agricultural applications, based in Ontario, Canada. The addition of Dixie is expected to expand the Company’s heavy duty product portfolio. The initial cash purchase price of $8,049,000, which was reduced by a working capital adjustment of $71,000, was paid to the former owners of Dixie. In addition, the Company is contingently obligated to make additional payments to the former owners of Dixie up to $1,130,000 over the next two years. The preliminary fair value of the contingent consideration as of the acquisition date was $840,000 determined using a Monte Carlo Simulation model. Trademarks acquired will have useful life of three years. The Company incurred $576,000 in acquisition costs during the year ended March 31, 2019, which were recorded in general and administrative expenses. The assets and results of operations of Dixie, and in the aggregate with the E&M acquisition, were not significant to the Company’s consolidated financial position or results of operations, and thus pro forma information is not presented. During the year ended March 31, 2020, the Company finalized the purchase price allocation of Dixie with no material adjustments. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets Goodwill The following summarizes the change in the Company’s goodwill: Years Ended March 31, 2020 2019 Balance at beginning of period $ 3,205,000 $ 2,551,000 Goodwill acquired - 654,000 Balance at end of period $ 3,205,000 $ 3,205,000 Intangible Assets The following is a summary of acquired intangible assets subject to amortization: March 31, 2020 March 31, 2019 Weighted Average Amortization Period Gross Carrying Value Accumulated Amortization Gross Carrying Value Accumulated Amortization Intangible assets subject to amortization Trademarks 9 years $ 827,000 $ 435,000 $ 1,007,000 $ 464,000 Customer relationships 11 years 8,453,000 4,376,000 8,610,000 3,547,000 Order backlog 6 months - - 325,000 180,000 Developed technology 5 years 2,817,000 893,000 2,991,000 311,000 Total 9 years $ 12,097,000 $ 5,704,000 $ 12,933,000 $ 4,502,000 During the year ended March 31, 2020, the Company retired $470,000 of fully amortized intangible assets. Amortization expense for acquired intangible assets is as follows: Years Ended March 31, 2020 2019 2018 Amortization expense $ 1,770,000 $ 1,194,000 $ 710,000 The estimated future amortization expense for acquired intangible assets subject to amortization is as follows: Year Ending March 31, 2021 $ 1,479,000 2022 1,438,000 2023 1,408,000 2024 1,040,000 2025 471,000 Thereafter 557,000 Total $ 6,393,000 |
Accounts Receivable - Net
Accounts Receivable - Net | 12 Months Ended |
Mar. 31, 2020 | |
Accounts Receivable - Net [Abstract] | |
Accounts Receivable - Net | 5. Accounts Receivable Net Accounts receivable — net includes offset accounts related to customer payment discrepancies, returned goods authorizations (“RGA”) issued for in-transit unit returns, and potential bad debts. Accounts receivable — net is comprised of the following: March 31, 2020 March 31, 2019 Accounts receivable — trade $ 109,164,000 $ 75,847,000 Allowance for bad debts (4,252,000 ) (4,100,000 ) Customer payment discrepancies (1,040,000 ) (854,000 ) Customer returns RGA issued (12,124,000 ) (14,878,000 ) Less: total accounts receivable offset accounts (17,416,000 ) (19,832,000 ) Total accounts receivable — net $ 91,748,000 $ 56,015,000 |
Inventory
Inventory | 12 Months Ended |
Mar. 31, 2020 | |
Inventory [Abstract] | |
Inventory | 6. Inventory Inventory is comprised of the following: March 31, 2020 March 31, 2019 Raw materials $ 99,360,000 $ 95,757,000 Work in process 3,906,000 3,502,000 Finished goods 135,601,000 146,366,000 238,867,000 245,625,000 Less allowance for excess and obsolete inventory (13,208,000 ) (11,899,000 ) Total $ 225,659,000 $ 233,726,000 Inventory unreturned $ 9,021,000 $ 8,469,000 |
Contract Assets
Contract Assets | 12 Months Ended |
Mar. 31, 2020 | |
Contract Assets [Abstract] | |
Contract Assets | 7. Contract Assets Contract assets are comprised of the following: March 31, 2020 March 31, 2019 Short-term contract assets Cores expected to be returned by customers $ 12,579,000 $ 14,671,000 Upfront payments to customers 2,865,000 3,101,000 Core premiums paid to customers 4,888,000 4,411,000 Total short-term contract assets $ 20,332,000 $ 22,183,000 Long-term contract assets Remanufactured cores held at customers’ locations $ 217,616,000 $ 196,914,000 Upfront payments to customers 589,000 2,775,000 Core premiums paid to customers 15,766,000 16,618,000 Long-term core inventory deposits 5,569,000 5,569,000 Total long-term contract assets $ 239,540,000 $ 221,876,000 |
Plant and Equipment
Plant and Equipment | 12 Months Ended |
Mar. 31, 2020 | |
Plant and Equipment [Abstract] | |
Plant and Equipment | 8. Plant and Equipment Plant and equipment if comprised of the following: March 31, 2020 March 31, 2019 Machinery and equipment $ 48,424,000 $ 39,953,000 Office equipment and fixtures 25,541,000 20,070,000 Leasehold improvements 10,519,000 9,451,000 84,484,000 69,474,000 Less accumulated depreciation (39,527,000 ) (34,323,000 ) Total $ 44,957,000 $ 35,151,000 Plant and equipment located in the foreign countries where the Company has facilities, net of accumulated depreciation, totaled $35,410,000 and $25,608,000, of which $31,845,000 and $21,822,000 is located in Mexico, at March 31, 2020 and 2019, respectively. These assets constitute substantially all the long-lived assets of the Company located outside of the United States. |
Debt
Debt | 12 Months Ended |
Mar. 31, 2020 | |
Debt [Abstract] | |
Debt | 9. Debt The Company is party to a $230,000,000 senior secured financing, (as amended from time to time, the “Credit Facility”) with a syndicate of lenders, and PNC Bank, National Association, as administrative agent, consisting of (i) a $200,000,000 revolving loan facility, subject to borrowing base restrictions, a $20,000,000 sublimit for borrowings by Canadian borrowers, and a $15,000,000 sublimit for letters of credit (the “Revolving Facility”) and (ii) a $30,000,000 term loan facility (the “Term Loans”). The loans under the Credit Facility mature on June 5, 2023. The Credit Facility permits the payment of up to $20,000,000 of dividends and share repurchases per fiscal year, subject to a minimum availability threshold and pro forma compliance with financial covenants. In connection with the Credit Facility, the lenders have a security interest in substantially all of the assets of the Company. In June 2019, the Company entered into a second amendment to the Credit Facility (the “Second Amendment”). The Second Amendment, among other things, (i) increased the total size of the Revolving Facility to $238,620,000, (ii) modified the fixed charge coverage ratio financial covenant, (iii) modified the definition of “Consolidated EBITDA”, (iv) modified the borrowing base definition to, among other things, include brake-related products as eligible inventory, (v) increased the letter of credit sublimit to $20,000,000, (vi) increased the Canadian revolving sublimit and swing line sublimit to $24,000,000, (vii) increased the swing line sublimit to $23,862,000, (viii) permitted up to $5,000,000 of sale and lease back transactions per fiscal year, (ix) increased the permitted amount of certain capital expenditures, (x) increased the permitted amount of operating lease obligations per fiscal year, and (xi) increased certain other covenant-related baskets. The Company capitalized $973,000 of new debt issuance costs in connection with the Second Amendment, which is included in prepaid and other current assets in the consolidated balance sheet at March 31, 2020. The Term Loans require quarterly principal payments of $937,500. The Credit Facility bears interest at rates equal to either LIBOR plus a margin of 2.25%, 2.50% or 2.75% or a reference rate plus a margin of 1.25%, 1.50% or 1.75%, in each case depending on the senior leverage ratio as of the applicable measurement date. There is also a facility fee of 0.375% to 0.50%, depending on the senior leverage ratio as of the applicable measurement date. The interest rate on the Company’s Term Loans and Revolving Facility was 4.34% and 3.64%, at March 31, 2020, respectively, and 5.24% at March 31, 2019. The Credit Facility, among other things, requires the Company to maintain certain financial covenants including a maximum senior leverage ratio and a minimum fixed charge coverage ratio. The Company was in compliance with all financial covenants at March 31, 2020. In light of COVID-19, the Company elected not to pay down its Revolving Facility and accumulated cash of $49,616,000 as of March 31, 2020. The Credit Facility only allows up to $6,000,000 of credit for cash when computing the senior leverage ratio. In addition to other covenants, the Credit Facility places limits on the Company’s ability to incur liens, incur additional indebtedness, make loans and investments, engage in mergers and acquisitions, engage in asset sales, redeem or repurchase capital stock, alter the business conducted by the Company and its subsidiaries, transact with affiliates, prepay, redeem or purchase subordinated debt, and amend or otherwise alter debt agreements. The Company’s term loans are comprised of the following: March 31, 2020 March 31, 2019 Principal amount of term loan $ 24,375,000 $ 28,125,000 Unamortized financing fees (235,000 ) (253,000 ) Net carrying amount of term loan 24,140,000 27,872,000 Less current portion of term loan (3,678,000 ) (3,685,000 ) Long-term portion of term loan $ 20,462,000 $ 24,187,000 Future repayments of the Company’s Term Loans are as follows: Year Ending March 31, 2021 3,750,000 2022 3,750,000 2023 3,750,000 2024 13,125,000 Total payments $ 24,375,000 The Company had $152,000,000 and $110,400,000 outstanding under the Revolving Facility at March 31, 2020 and 2019, respectively. In addition, $3,579,000 was reserved for letters of credit at March 31, 2020. At March 31, 2020, after certain adjustments, $58,461,000 was available under the Revolving Facility. |
Contract Liabilities
Contract Liabilities | 12 Months Ended |
Mar. 31, 2020 | |
Contract Liabilities [Abstract] | |
Contract Liabilities | 10. Contract Liabilities Contract liabilities are comprised of the following: March 31, 2020 March 31, 2019 Short-term contract liabilities Customer core returns accruals $ 4,126,000 $ 3,933,000 Customer allowances earned 13,844,000 12,755,000 Customer deposits 1,365,000 2,674,000 Core bank liability 528,000 - Accrued core payment, net 8,048,000 11,237,000 Total short-term contract liabilities $ 27,911,000 $ 30,599,000 Long-term contract liabilities Customer core returns accruals $ 77,927,000 $ 25,722,000 Customer allowances earned 542,000 - Core bank liability 7,556,000 - Accrued core payment, net 6,076,000 15,167,000 Total long-term contract liabilities $ 92,101,000 $ 40,889,000 |
Leases
Leases | 12 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | 11. Leases The Company leases various facilities in North America and Asia under operating leases expiring through August 2033. During the year ended March 31, 2020, the lease of the Company’s 199,000 square foot remanufacturing facility in Mexico commenced, resulting in an increase in the operating lease liability of $16,245,000. The Company has one non-cancellable lease agreement for a building in Mexico, which was executed, but had not commenced as of March 31, 2020, and accordingly was not included in the operating lease assets and operating lease liabilities as of March 31, 2020. Total commitments for this agreement, which expires in December 2032, are $12,538,000. In addition, the Company has a non-cancellable lease agreement for the renewal of a building lease in Canada, which was executed, but had not yet commenced as of March 31, 2020, and accordingly was not included in the operating lease assets and operating lease liabilities as of March 31, 2020. Total commitments for this agreement, which expires in May 2023, are $4,299,000. Both of these operating leases are expected to commence early in the Company’s fiscal year ending March 31, 2021. The Company also has finance leases for certain office and manufacturing equipment, which generally range from three to five years. The Company determines if an arrangement contains a lease at inception. Lease assets and lease liabilities are recorded based on the present value of lease payments over the lease term, which includes the minimum unconditional term of the lease. Certain of the Company’s leases include options to extend the leases for up to five years. When the Company has the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that it will exercise the option, the option is considered in determining the classification and measurement of the lease. The lease assets are recorded net of any lease incentives received. Lease assets are tested for impairment in the same manner as long-lived assets used in operations. As the rate implicit for each of its leases is not readily determinable, the Company uses its incremental borrowing rate, based on the information available at the lease commencement date, for each of its leases in determining the present value of its expected lease payments. The Company’s incremental borrowing rate is determined by analyzing and combining an applicable risk-free rate, a financial spread adjustment and any lease specific adjustment. Certain leases contain provisions for property-related costs that are variable in nature for which the Company is responsible, including common area maintenance and other property operating services, which are expensed as incurred and not included in the determination of lease assets and lease liabilities. These costs are calculated based on a variety of factors including property values, tax and utility rates, property services fees, and other factors. The Company records rent expense for operating leases, some of which have escalating rent payments, on a straight-line basis over the lease term. The Company has material nonfunctional currency leases that could have a material impact on the Company’s consolidated statements of operations. As required for other monetary liabilities, lessees shall remeasure a foreign currency-denominated lease liability using the exchange rate at each reporting date, but the lease assets are nonmonetary assets measured at historical rates, which are not affected by subsequent changes in the exchange rates. The Company recorded a loss of $11,710,000 in general and administrative expenses in connection with the remeasurement of foreign currency-denominated lease liabilities during year ended March 31, 2020. Balance sheet information for leases is comprised of the following: March 31, 2020 Leases Classification Assets: Operating Operating lease assets $ 53,029,000 Finance (1) Plant and equipment 6,922,000 Total leased assets $ 59,951,000 Liabilities: Current Operating Operating lease liabilities $ 5,104,000 Finance Other current liabilities 2,059,000 Long-term Operating Long-term operating lease liabilities 61,425,000 Finance Other liabilities 3,905,000 Total lease liabilities $ 72,493,000 (1) The Company had $5,403,000 in capital lease assets included in plant and equipment at March 31, 2019. Lease cost recognized in the consolidated statement of operations is comprised of the following: Year Ended March 31, 2020 Lease cost Operating lease cost (1) $ 8,733,000 Short-term lease cost 1,263,000 Variable lease cost 600,000 Finance lease cost: Amortization of finance lease assets 1,616,000 Interest on finance lease liabilities 281,000 Total lease cost $ 12,493,000 (1) During the years ended March 31, 2019 and 2018, the Company incurred total operating lease expenses of $6,188,000 and $4,362,000, respectively. Maturities of lease commitments at March 31, 2020 were as follows: Maturity of lease liabilities Operating Leases Finance Leases Total 2021 $ 9,536,000 $ 2,292,000 $ 11,828,000 2022 8,755,000 1,955,000 10,710,000 2023 7,503,000 1,325,000 8,828,000 2024 7,261,000 610,000 7,871,000 2025 7,368,000 243,000 7,611,000 Thereafter 59,837,000 - 59,837,000 Total lease payments 100,260,000 6,425,000 106,685,000 Less amount representing interest (33,731,000 ) (461,000 ) (34,192,000 ) Present value of lease liabilities $ 66,529,000 $ 5,964,000 $ 72,493,000 Maturities of lease commitments at March 31, 2019 were as follows: Maturity of lease liabilities Operating Leases Capital Leases Total 2020 $ 7,405,000 $ 1,755,000 $ 9,160,000 2021 8,206,000 1,311,000 9,517,000 2022 7,862,000 1,040,000 8,902,000 2023 6,726,000 719,000 7,445,000 2024 6,696,000 89,000 6,785,000 Thereafter 65,321,000 - 65,321,000 Total lease payments $ 102,216,000 4,914,000 107,130,000 Less amount representing interest (406,000 ) (406,000 ) Present value of lease liabilities $ 4,508,000 $ 106,724,000 Other information about leases is as follows: Year Ended March 31, 2020 Lease term and discount rate Weighted-average remaining lease term (years): Finance leases 3.2 Operating leases 12.0 Weighted-average discount rate: Finance leases 4.7 % Operating leases 5.6 % |
Accounts Receivable Discount Pr
Accounts Receivable Discount Programs | 12 Months Ended |
Mar. 31, 2020 | |
Accounts Receivable Discount Programs [Abstract] | |
Accounts Receivable Discount Programs | 12. Accounts Receivable Discount Programs The Company uses receivable discount programs with certain customers and their respective banks. Under these programs, the Company may sell those customers’ receivables to those banks at a discount to be agreed upon at the time the receivables are sold. These discount arrangements allow the Company to accelerate receipt of payment on customers’ receivables. The following is a summary of the Company’s accounts receivable discount programs: Years Ended March 31, 2020 2019 Receivables discounted $ 461,484,000 $ 396,650,000 Weighted average days 346 341 Weighted average discount rate 3.3 % 4.2 % Amount of discount as interest expense $ 14,780,000 $ 15,867,000 |
Financial Risk Management and D
Financial Risk Management and Derivatives | 12 Months Ended |
Mar. 31, 2020 | |
Financial Risk Management and Derivatives [Abstract] | |
Financial Risk Management and Derivatives | 13. Financial Risk Management and Derivatives Purchases and expenses denominated in currencies other than the U.S. dollar, which are primarily related to the Company’s facilities overseas, expose the Company to market risk from material movements in foreign exchange rates between the U.S. dollar and the foreign currencies. The Company’s primary risk exposure is from fluctuations in the value of the Mexican peso and to a lesser extent the Chinese yuan. To mitigate these risks, the Company enters into forward foreign currency exchange contracts to exchange U.S. dollars for these foreign currencies. The extent to which forward foreign currency exchange contracts are used is modified periodically in response to the Company’s estimate of market conditions and the terms and length of anticipated requirements. The Company enters into forward foreign currency exchange contracts in order to reduce the impact of foreign currency fluctuations and not to engage in currency speculation. The use of derivative financial instruments allows the Company to reduce its exposure to the risk that the eventual cash outflow resulting from funding the expenses of the foreign operations will be materially affected by changes in exchange rates between the U.S. dollar and the foreign currencies. The Company does not hold or issue financial instruments for trading purposes. The forward foreign currency exchange contracts are designated for forecasted expenditure requirements to fund foreign operations. The Company had forward foreign currency exchange contracts with a U.S. dollar equivalent notional value of $42,052,000 and $32,524,000 at March 31, 2020 and 2019, respectively. These contracts generally have a term of one year or less, at rates agreed at the inception of the contracts. The counterparty to this derivative transaction is a major financial institution with investment grade credit rating; however, the Company is exposed to credit risk with this institution. The credit risk is limited to the potential unrealized gains (which offset currency fluctuations adverse to the Company) in any such contract should this counterparty fail to perform as contracted. Any changes in the fair values of forward foreign currency exchange contracts are reflected in current period earnings and accounted for as an increase or offset to general and administrative expenses. The following shows the effect of the Company’s derivative instruments on its consolidated statements of operations: Gain (Loss) Recognized within General and Administrative Expenses Derivatives Not Designated as Years Ended March 31, Hedging Instruments 2020 2019 2018 Forward foreign currency exchange contracts $ (6,491,000 ) $ (972,000 ) $ 752,000 The fair value of the forward foreign currency exchange contracts of $6,284,000 is included other current liabilities in the accompanying consolidated balance sheet at March 31, 2020. The fair value of the forward foreign currency exchange contracts of $207,000 is included in prepaid and other current assets in the accompanying consolidated balance sheet at March 31, 2019. The changes in the fair values of forward foreign currency exchange contracts are included in other liabilities in the consolidated statements of cash flows for the years ended March 31, 2020, 2019, and 2018. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 14. Fair Value Measurements The Company defines fair value as the price that would be received to sell 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. The Company uses a three-tier valuation hierarchy based upon observable and unobservable inputs: • Level 1 — Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 — Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3 — Valuation is based upon unobservable inputs that are significant to the fair value measurement. The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. The following sets forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis according to the valuation techniques the Company used to determine their fair values at: March 31, 2020 March 31, 2019 Fair Value Measurements Fair Value Measurements Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Assets Short-term investments Mutual funds $ 850,000 $ 850,000 $ - $ - $ 3,273,000 $ 3,273,000 $ - $ - Prepaid expenses and other current assets Forward foreign currency exchange contracts - - - - 207,000 - 207,000 - Liabilities Accrued liabilities Short-term contingent consideration 2,190,000 - - 2,190,000 2,816,000 - - 2,816,000 Other current liabilities Deferred compensation 850,000 850,000 - - 3,273,000 3,273,000 - - Forward foreign currency exchange contracts 6,284,000 - 6,284,000 - - - - - Other liabilities Long-term contingent consideration 463,000 - - 463,000 1,905,000 - - 1,905,000 Short-term Investments and Deferred Compensation The Company’s short-term investments, which fund its deferred compensation liabilities, consist of investments in mutual funds. These investments are classified as Level 1 as the shares of these mutual funds trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis. Forward Foreign Currency Exchange Contracts The forward foreign currency exchange contracts are primarily measured based on the foreign currency spot and forward rates quoted by the banks or foreign currency dealers. During the years ended March 31, 2020 and 2019, losses of $6,491,000 and $972,000, respectively, were recorded in general and administrative expenses due to the change in the value of the forward foreign currency exchange contracts. Contingent Consideration In December 2018, the Company completed the acquisition of certain assets and assumption of certain liabilities from E&M. In connection with this acquisition, the Company is contingently obligated to make additional payments to the former owners of E&M up to an aggregate of $5,200,000 over the next three years. In January 2019, the Company completed the acquisition of all the equity interests of Dixie. In connection with this acquisition, the Company is contingently obligated to make additional payments to the former owners of Dixie up to $1,130,000 over the next two years. The Company’s contingent consideration is recorded in accrued expenses and other liabilities in its consolidated balance sheets at March 31, 2020 and 2019, and is a Level 3 liability measured at fair value. E&M Research and Development (“R&D”) Event Milestone The fair value of the two-year R&D event milestone based on technology development and transfer was $1,130,000 and $2,190,000 at March 31, 2020 and 2019, respectively, determined using a probability weighted method with commensurate with the term of the contingent consideration. The assumptions used to determine the fair value is as follows: March 31, 2020 Risk free interest rate 0.16 % Counter party rate 12.16 % Probability 100.00 % The assumptions used to determine fair value of the two-year R&D event milestone at March 31, 2019 is as follows: (i) a risk-free interest rate ranging from 2.30% to 2.41%, (ii) counter party risk discount rate ranging from 6.30% to 6.41%, and (iii) total probability of 90% to 100%. Any subsequent changes in the fair value of the contingent consideration liability will be recorded in current period earnings as a general and administrative expense. E&M Gross Profit Earn-out Consideration The fair value of the three-year gross profit earn-out consideration was $1,230,000 and $1,660,000 at March 31, 2020 and 2019, respectively, determined using a Monte Carlo Simulation Model. The assumptions used to determine the fair value is as follows: March 31, 2020 March 31, 2019 Risk free interest rate 0.22 % 2.23 % Counter party rate 12.22 % 6.23 % Expected volatility 31.00 % 29.00 % Weighted average cost of capital 13.75 % 16.00 % Any subsequent changes in the fair value of the contingent consideration liability will be recorded in current period earnings as a general and administrative expense. Dixie Revenue Earn-out Consideration The fair value of the two-year revenue earn-out consideration was $293,000 and $871,000 at March 31, 2020 and 2019, respectively, determined using a Monte Carlo Simulation Model. The assumptions used to determine the fair value is as follows: March 31, 2020 March 31, 2019 Risk free interest rate 0.16 % 2.58 % Counter party rate 15.16 % 5.03 % Revenue discount rate 2.50 % 6.50 % Expected volatility 33.50 % 29.00 % Revenue volatility 6.50 % 8.50 % Any subsequent changes in the fair value of the contingent consideration liability will be recorded in current period earnings as a general and administrative expense. The following table summarizes the activity for financial assets and liabilities utilizing Level 3 fair value measurements: Years Ended March 31, 2020 2019 Contingent Contingent Beginning balance $ 4,721,000 $ - Newly issued - 4,400,000 Changes in revaluation of contingent consideration included in earnings (113,000 ) 321,000 Exercises/settlements (1) (1,955,000 ) - Ending balance $ 2,653,000 $ 4,721,000 During the years ended March 31, 2020 and 2019, the Company had no significant measurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the short-term nature of these instruments. The carrying amounts of the revolving loan, term loan and other long-term liabilities approximate their fair value based on the variable nature of interest rates and current rates for instruments with similar characteristics. Goodwill Fair value assessments of the reporting unit and the reporting unit’s net assets, which are performed for goodwill impairment tests, are considered Level 3 measurements due to the significance of unobservable inputs developed using company specific information. The Company considered a market approach as well as an income approach (a DCF model) to determine the fair value of the reporting unit. Refer to Financial Note 2, “Significant Accounting Policies for more information regarding goodwill impairment assumptions. Long-lived Assets and Intangible Assets The Company utilizes multiple approaches including the DCF model and market approaches for estimating the fair value of long-lived assets and intangible assets. The future cash flows used in the analysis are based on internal cash flow projections from its long-range plans and include significant assumptions by management. Accordingly, the fair value assessment of the long-lived assets and intangible assets are considered Level 3 fair value measurements. The Company measures certain long-lived and intangible assets at fair value on a nonrecurring basis when events occur that indicate an asset group may not be recoverable. If the carrying amount of an asset group is not recoverable, an impairment charge is recorded to reduce the carrying amount by the excess over its fair value. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies Warranty Returns The Company allows its customers to return goods that their consumers have returned to them, whether or not the returned item is defective (“warranty returns”). The Company accrues an estimate of its exposure to warranty returns based on a historical analysis of the level of this type of return as a percentage of total unit sales. Amounts charged to expense for these warranty returns are considered in arriving at the Company’s net sales. The following summarizes the changes in the warranty return accrual: Years Ended March 31, 2020 2019 2018 Balance at beginning of year $ 19,475,000 $ 16,646,000 $ 14,286,000 Acquisition (1) - 221,000 - Charged to expense 112,590,000 111,321,000 105,156,000 Amounts processed (113,765,000 ) (108,713,000 ) (102,796,000 ) Balance at end of year $ 18,300,000 $ 19,475,000 $ 16,646,000 (1) Warranty reserve established in the opening balance sheet in connection with the Company’s Dixie acquisition. Commitments to Provide Marketing Allowances under Long-Term Customer Contracts The Company has or is renegotiating long-term agreements with many of its major customers. Under these agreements, which in most cases have initial terms of at least four years, the Company is designated as the exclusive or primary supplier for specified categories of the Company’s products. Because of the very competitive nature of the market and the limited number of customers for these products, the Company’s customers have sought and obtained price concessions, significant marketing allowances, and more favorable delivery and payment terms in consideration for the Company’s designation as a customer’s exclusive or primary supplier. These incentives differ from contract to contract and can include (i) the issuance of a specified amount of credits against receivables in accordance with a schedule set forth in the relevant contract, (ii) support for a particular customer’s research or marketing efforts provided on a scheduled basis, (iii) discounts granted in connection with each individual shipment of product, and (iv) other marketing, research, store expansion or product development support. These contracts typically require that the Company meet ongoing performance standards. The Company’s contracts with its customers expire at various dates through December 2024. While these longer-term agreements strengthen the Company’s customer relationships, the increased demand for the Company’s products often requires that the Company increase its inventories and personnel. Customer demands that the Company purchase their Remanufactured Core inventory also require the use of the Company’s working capital. The marketing and other allowances the Company typically grants its customers in connection with its new or expanded customer relationships adversely impact the near-term revenues, profitability, and associated cash flows from these arrangements. Such allowances include sales incentives and concessions and typically consist of: (i) allowances which may only be applied against future purchases and are recorded as a reduction to revenues in accordance with a schedule set forth in the long-term contract, (ii) allowances related to a single exchange of product that are recorded as a reduction of revenues at the time the related revenues are recorded or when such incentives are offered, and (iii) amortization of core premiums paid to customers generally in connection with new business. The following summarizes the breakout of allowances discussed above, recorded as a reduction to revenues: Years Ended March 31, 2020 2019 2018 Allowances incurred under long-term customer contracts $ 26,733,000 $ 29,612,000 $ 24,829,000 Allowances related to a single exchange of product 97,408,000 92,588,000 79,851,000 Amortization of core premiums paid to customers 4,501,000 4,127,000 3,588,000 Total customer allowances recorded as a reduction of revenues $ 128,642,000 $ 126,327,000 $ 108,268,000 The following presents the Company’s commitments to incur allowances, excluding allowances related to a single exchange of product, which will be recognized as a reduction to revenue when the related revenue is recognized: Year Ending March 31, 2021 $ 25,896,000 2022 5,838,000 2023 4,701,000 2024 2,859,000 2025 2,052,000 Thereafter 2,667,000 Total marketing allowances $ 44,013,000 Contingencies The Company is subject to various lawsuits and claims. In addition, government agencies and self-regulatory organizations have the ability to conduct periodic examinations of and administrative proceedings regarding the Company’s business. Following an audit in fiscal 2019, the U.S. Customs and Border Protection stated that it believed that the Company owed additional duties of approximately $17 million from 2011 through mid-2018 relating to products that it imported from Mexico. The Company does not believe that this amount is correct and believes that it has numerous defenses and intends to dispute this amount vigorously. The Company cannot assure that the U.S. Customs and Border Protection will agree or that it will not need to accrue or pay additional amounts in the future. |
Significant Customer and Other
Significant Customer and Other Information | 12 Months Ended |
Mar. 31, 2020 | |
Significant Customer and Other Information [Abstract] | |
Significant Customer and Other Information | 16. Significant Customer and Other Information Significant Customer Concentrations The Company’s largest customers accounted for the following total percentage of net sales: Years Ended March 31, 2020 2019 2018 Customer A 38 % 38 % 41 % Customer B 20 % 22 % 25 % Customer C 26 % 23 % 19 % The Company’s largest customers accounted for the following total percentage of accounts receivable — trade: March 31, 2020 March 31, 2019 Customer A 28 % 34 % Customer B 14 % 18 % Customer C 33 % 16 % Geographic and Product Information The Company’s products are predominantly sold in the U.S. and accounted for the following total percentage of net sales: Years Ended March 31, 2020 2019 2018 Rotating electrical products 73 % 79 % 78 % Wheel hub products 15 % 15 % 17 % Brake-related products 9 % 3 % 3 % Other products 3 % 3 % 2 % 100 % 100 % 100 % Significant Supplier Concentrations No suppliers accounted for more than 10% of the Company’s inventory purchases for the years ended March 31, 2020, 2019, and 2018. |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 31, 2020 | |
Income Taxes [Abstract] | |
Income Taxes | 17. Income Taxes In response to the COVID-19 pandemic, the CARES Act was signed into law on March 27, 2020. The CARES Act: (i) removes certain net operating loss deduction and carry-back limitations originally imposed by the Tax Cuts and Jobs Act of 2017, (ii) increases IRC §163(j) business interest expense limitations, and (iii) technical correction on recovery period for qualified improvement property (QIP), allowing QIP to be eligible for bonus depreciation. Specifically, the Company may now carry back net operating losses originating in the year ended March 31, 2019 to the year ended March 31, 2017, resulting in an increase to its income tax receivable of $1,002,000 as of March 31, 2020. On December 22, 2017, comprehensive tax reform legislation known as the Act was signed into law. The Act amended the Internal Revenue Code to reduce U.S. tax rates and modify policies, credits and deductions for individuals and businesses. The income tax expense is as follows: Years Ended March 31, 2020 2019 2018 Current tax expense Federal $ 5,313,000 $ 680,000 $ 12,187,000 State 1,454,000 647,000 1,425,000 Foreign 1,566,000 1,723,000 1,194,000 Total current tax expense 8,333,000 3,050,000 14,806,000 Deferred tax (benefit) expense Federal (4,516,000 ) (2,087,000 ) 949,000 State (1,567,000 ) (295,000 ) 393,000 Foreign (3,261,000 ) (400,000 ) (23,000 ) Total deferred tax (benefit) expense (9,344,000 ) (2,782,000 ) 1,319,000 Total income tax (benefit) expense $ (1,011,000 ) $ 268,000 $ 16,125,000 Deferred income taxes consist of the following: March 31, 2020 March 31, 2019 Assets Allowance for bad debts $ 1,037,000 $ 1,005,000 Customer allowances earned 3,549,000 3,177,000 Allowance for stock adjustment returns 1,743,000 2,073,000 Inventory adjustments 5,567,000 3,701,000 Stock options 2,427,000 2,221,000 Operating lease liabilities (1) 19,396,000 - Estimate for returns 10,839,000 2,107,000 Accrued compensation 1,964,000 1,578,000 Net operating losses 4,091,000 2,088,000 Tax credits 1,343,000 1,495,000 Other 1,620,000 5,776,000 Total deferred tax assets $ 53,576,000 $ 25,221,000 Liabilities Plant and equipment, net (5,175,000 ) (3,316,000 ) Intangibles, net (4,700,000 ) (5,390,000 ) Operating lease (1) (15,371,000 ) - Other (3,966,000 ) (3,278,000 ) Total deferred tax liabilities $ (29,212,000 ) $ (11,984,000 ) Less valuation allowance $ (5,493,000 ) $ (3,748,000 ) Total $ 18,871,000 $ 9,489,000 (1) Adoption of the new lease standard as of April 1, 2019 (see Note 2) resulted in the recognition of a deferred tax asset for operating lease liabilities and a deferred tax liability for operating lease assets. These temporary differences will reverse over the estimated term of the relevant operating leases. As of March 31, 2019, the deferred tax assets associated with operating leases were reported as other deferred tax assets under legacy US GAAP. As of March 31, 2020, the Company had state net operating loss carryforwards of $1,689,000 and foreign net operating loss carryforwards of $14,953,000. The state net operating loss carryforwards expire beginning fiscal year 2034, and the foreign net operating loss carryforwards expire beginning fiscal year 2038. As of March 31, 2020, the Company also had investment tax credits carryforward of $1,343,000, which will expire beginning fiscal year 2032. A full valuation allowance was established on the foreign net operating loss and tax credits carryforward as the Company believes it is more likely than not these tax attributes would not be realizable in the future. Realization of deferred tax assets is dependent upon the Company’s ability to generate sufficient future taxable income. Significant judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against the Company’s net deferred tax assets. The Company makes these estimates and judgments about its future taxable income that are based on assumptions that are consistent with the Company’s future plans. A valuation allowance is established when the Company believes it is not more likely than not all or some of a deferred tax assets will be realized. In evaluating the Company’s ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence. Deferred tax assets arising primarily as a result of non-US net operating loss carry-forwards and non-US research and development credits in connection with the Company’s acquisitions have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Should the actual amount differ from the Company’s estimates, the amount of the valuation allowance could be impacted. For the years ended March 31, 2020, 2019, and 2018, the primary components of the Company’s income tax expense were: (i) federal income taxes, (ii) the impact of net operating loss carry-backs in connection with the CARES Act, (iii) foreign income taxed at rates that are different from the federal statutory rate, (iv) change in realizable deferred tax items, (v) impact of the non-deductible executive compensation under Internal Revenue Code Section 162(m), (vi) income taxes associated with uncertain tax positions, (vii) the change in the blended state rate, and (viii) the excess tax benefit relating to share-based compensation. The difference between the income tax expense at the federal statutory rate and the Company’s effective tax rate is as follows: Years Ended March 31, 2020 2019 2018 Statutory federal income tax rate 21.0 % 21.0 % 31.5 % State income tax rate, net of federal benefit (3.7 )% (3.7 )% 3.6 % Excess tax benefit from stock compensation (1.3 )% 0.7 % (0.7 )% Foreign income taxed at different rates 13.8 % - % (2.6 )% Return to provision adjustments (1.5 )% - % - % Warrants - % - % (2.1 )% Non-deductible executive compensation (4.0 )% (7.3 )% 1.0 % Change in valuation allowance (18.7 )% (15.3 )% 4.8 % Net operating loss carryback 4.8 % - % - % Effects of mandatory redeemed repatriation - % - % 1.5 % Effects of U.S. tax rate changes - % 0.3 % 8.0 % Uncertain tax positions 2.1 % 1.8 % 0.6 % Research and development credit 1.1 % 1.3 % (0.2 )% Non-deductible transaction costs - % (2.1 )% - % Other income tax (1.4 )% (0.2 )% 0.2 % 12.2 % (3.5 )% 45.6 % The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions with varying statutes of limitations. At March 31, 2020, the Company is not under examination in any jurisdiction and the years ended March 31, 2019, 2018, 2017, and 2016 remain subject to examination. The Company believes no significant changes in the unrecognized tax benefits will occur within the next 12 months. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Years Ended March 31, 2020 2019 2018 Balance at beginning of period $ 1,083,000 $ 1,219,000 $ 1,092,000 Additions based on tax positions related to the current year 362,000 91,000 234,000 Reductions for tax positions of prior year (434,000 ) (227,000 ) (107,000 ) Balance at end of period $ 1,011,000 $ 1,083,000 $ 1,219,000 At March 31, 2020, 2019 and 2018, there are $823,000, $938,000 and $1,054,000 of unrecognized tax benefits that if recognized would affect the annual effective tax rate. The Company recognizes interest and penalties accrued related to unrecognized tax benefits as part of income tax expense. During the years ended March 31, 2020, 2019, and 2018, the Company recognized approximately $(50,000), $(23,000), and $5,000 in interest and penalties, respectively. The Company had approximately $74,000 and $124,000 for the payment of interest and penalties accrued at March 31, 2020 and 2019, respectively. |
Defined Contribution Plans
Defined Contribution Plans | 12 Months Ended |
Mar. 31, 2020 | |
Defined Contribution Plans [Abstract] | |
Defined Contribution Plans | 18. Defined Contribution Plans The Company has a 401(k) plan covering all employees who are 21 years of age with at least six months of service. The plan permits eligible employees to make contributions up to certain limitations, with the Company matching 50% of each participating employee’s contribution up to the first 6% of employee compensation. Employees are immediately vested in their voluntary employee contributions and vest in the Company’s matching contributions ratably over five years. The Company’s matching contribution to the 401(k) plan was $496,000, $445,000, and $389,000 for the years ended March 31, 2020, 2019, and 2018, respectively. |
Share-based Payments
Share-based Payments | 12 Months Ended |
Mar. 31, 2020 | |
Share-based Payments [Abstract] | |
Share-based Payments | 19. Share-based Payments At March 31, 2020, there were 342,000 shares of the Company’s common stock reserved for grants to the Company’s non-employee directors under the 2014 Non-Employee Director Incentive Award Plan (the “2014 Plan”). Under the 2014 Plan, (i) 53,784 and 40,238 of restricted stock units were issued and (ii) 143,909 and 201,084 shares of common stock were available for grant under this plan at March 31, 2020 and 2019, respectively. At March 31, 2020, there were 3,950,000 shares of common stock reserved for grant to all employees of the Company under the 2010 Incentive Award Plan (the “2010 Plan”). Under the 2010 Plan, (i) 148,199 and 127,896 shares of restricted stock units were outstanding, (ii) options to purchase 1,485,123 and 1,274,165 shares of common stock were outstanding, (iii) none and 75,000 restricted shares were outstanding, and (iv) 629,823 and 1,040,728 shares of common stock were available for grant at March 31, 2020 and 2019, respectively. In addition, at March 31, 2020 and 2019, options to purchase 51,000 and 63,000 shares of common stock, respectively, were outstanding under the 2004 Non-Employee Director Stock Option Plan. No options remain available for grant under this plan. The shares of common stock issued upon exercise of a previously granted stock option are considered new issuances from shares reserved for issuance upon adoption of the various plans. Stock Options The following is a summary of stock option transactions: Number of Shares Weighted Average Exercise Price Outstanding at March 31, 2019 1,337,165 $ 17.58 Granted 302,539 $ 19.72 Exercised (59,600 ) $ 7.65 Forfeited (43,981 ) $ 24.98 Outstanding at March 31, 2020 1,536,123 $ 18.18 At March 31, 2020, options to purchase 513,198 shares of common stock were unvested at the weighted average exercise price of $20.32. Based on the market value of the Company’s common stock at March 31, 2020, 2019, and 2018, the pre-tax intrinsic value of options exercised was $508,000, $788,000, and $913,000, respectively. The total fair value of stock options vested during the years ended March 31, 2020, 2019, and 2018 was $2,189,000, $1,973,000, and $1,572,000, respectively. The following summarizes information about the options outstanding at March 31, 2020: Options Outstanding Options Exercisable Range of Exercise price Shares Weighted Average Exercise Price Weighted Average Remaining Life In Years Aggregate Intrinsic Value Shares Weighted Average Exercise Price Weighted Average Remaining Life In Years Aggregate Intrinsic Value $ 5.20 to $6.47 311,634 $ 6.46 2.75 311,634 $ 6.46 2.75 $ 6.48 to $18.20 223,600 10.19 3.61 204,300 9.58 3.06 $ 18.21 to $22.83 524,251 19.56 8.77 83,183 19.17 8.23 $ 22.84 to $28.04 216,499 26.19 6.44 163,669 25.82 6.18 $ 28.05 to $34.17 260,139 29.61 5.94 260,139 29.61 5.94 1,536,123 $ 18.18 5.99 $ 2,567,000 1,022,925 $ 17.10 4.62 $ 2,567,000 The aggregate intrinsic values in the above table represent the pre-tax value of all in-the-money options if all such options had been exercised on March 31, 2020 based on the Company’s closing stock price of $12.58 as of that date. At March 31, 2020, there was $2,883,000 of total unrecognized compensation expense from stock-based compensation granted under the plans, which is related to non-vested shares. The compensation expense is expected to be recognized over a weighted average vesting period of 1.8 years. Restricted Stock Units and Restricted Stock (collectively “RSUs”) During the years ended March 31, 2020 and 2019 the Company granted 113,483 and 179,725 shares of RSUs, respectively, with an estimated grant date fair value of $2,112,000 and $3,490,000, respectively, which was based on the closing market price on the date of grant. The fair value related to these awards is recognized as compensation expense over the vesting period. These awards generally vest in three equal installments beginning each anniversary from the grant date, subject to continued employment. Upon vesting, these awards may be net share settled to cover the required withholding tax with the remaining amount converted into an equivalent number of shares of common stock. Total shares withheld during the years ended March 31, 2020 and 2019 were 58,802 and 14,959, respectively, based on the value of these awards as determined by the Company’s closing stock price on the vesting date. The following is a summary of non-vested RSUs: Number of Shares Weighted Average Grant Date Fair Value Non-vested at March 31, 2019 243,134 $ 21.75 Granted 113,483 $ 18.61 Vested (151,182 ) $ 21.66 Forfeited (3,452 ) $ 21.10 Non-vested at March 31, 2020 201,983 $ 20.06 As of March 31, 2020, there was $2,643,000 of unrecognized compensation expense related to these awards, which will be recognized over the remaining vesting period of approximately 1.9 years. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Mar. 31, 2020 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Accumulated Other Comprehensive Loss | 20. Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive loss are as follows: March 31, 2020 March 31, 2019 Foreign Currency Translation Total Unrealized Gain on Short-Term Investments Foreign Currency Translation Total Balance at March 31, 2019 and 2018 $ (6,887,000 ) $ (6,887,000 ) $ 746,000 $ (6,174,000 ) $ (5,428,000 ) Cumulative-effect adjustment - - (746,000 ) - (746,000 ) Balance at April 1, 2019 and 2018 $ (6,887,000 ) $ (6,887,000 ) $ - $ (6,174,000 ) $ (6,174,000 ) Other comprehensive loss, net of tax (481,000 ) (481,000 ) - (713,000 ) (713,000 ) Balance at March 31, 2020 and 2019 $ (7,368,000 ) $ (7,368,000 ) $ - $ (6,887,000 ) $ (6,887,000 ) |
Subsequent Event
Subsequent Event | 12 Months Ended |
Mar. 31, 2020 | |
Subsequent Event [Abstract] | |
Subsequent Event | 21. Subsequent Event In light of the COVID-19 pandemic, the Company has taken proactive steps to manage its costs and bolster its liquidity, including increasing the level of receivables collected under its receivable discount programs. During April 2020, the Company collected $59,730,000 of receivables under these programs, with $1,552,000 in interest expense associated with these accounts receivable sales, which was higher than its average monthly utilization of these programs. Additionally, as part of the cost reduction measures implemented by the Company in response to the impact of the COVID-19 pandemic on its business, executive committee members have all agreed to at least a 25% reduction in base salary, until the Company believes it is fiscally responsible to reinstate the original base salaries. The Company’s Board of Directors agreed to defer all board and committee fees and retainers, as well as waive any fees related to weekly board check in meetings, as long as the executive committee continues with a base salary reduction. The Company continues to analyze its cost structure and may implement additional cost reduction measures as may be necessary due to the on-going economic challenges resulting from the COVID-19 pandemic. |
Unaudited Quarterly Financial D
Unaudited Quarterly Financial Data | 12 Months Ended |
Mar. 31, 2020 | |
Unaudited Quarterly Financial Data [Abstract] | |
Unaudited Quarterly Financial Data | 22. Unaudited Quarterly Financial Data The following summarizes selected quarterly financial data for the year ended March 31, 2020. First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 109,148,000 $ 150,374,000 $ 125,574,000 $ 150,735,000 Cost of goods sold 91,565,000 113,801,000 97,913,000 114,152,000 Gross profit 17,583,000 36,573,000 27,661,000 36,583,000 Operating expenses: General and administrative 12,000,000 14,285,000 10,618,000 34,522,000 Sales and marketing 4,919,000 5,448,000 5,623,000 5,047,000 Research and development 2,372,000 2,148,000 2,174,000 2,506,000 Total operating expenses 19,291,000 21,881,000 18,415,000 42,075,000 Operating (loss) income (1,708,000 ) 14,692,000 9,246,000 (5,492,000 ) Other expense: Interest expense, net 6,173,000 6,523,000 6,879,000 5,464,000 (Loss) income before income tax (benefit) expense (7,881,000 ) 8,169,000 2,367,000 (10,956,000 ) Income tax (benefit) expense (1,730,000 ) 1,980,000 1,502,000 (2,763,000 ) Net (loss) income $ (6,151,000 ) $ 6,189,000 $ 865,000 $ (8,193,000 ) Basic net (loss) income per share $ (0.33 ) $ 0.33 $ 0.05 $ (0.43 ) Diluted net (loss) income per share $ (0.33 ) $ 0.32 $ 0.04 $ (0.43 ) The following summarizes selected quarterly financial data for the year ended March 31, 2019: First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 91,668,000 $ 127,939,000 $ 124,113,000 $ 129,077,000 Cost of goods sold 75,316,000 102,228,000 102,952,000 103,127,000 Gross profit 16,352,000 25,711,000 21,161,000 25,950,000 Operating expenses: General and administrative 12,091,000 8,997,000 12,331,000 12,553,000 Sales and marketing 4,392,000 4,537,000 5,149,000 5,464,000 Research and development 1,736,000 1,784,000 2,054,000 2,440,000 Total operating expenses 18,219,000 15,318,000 19,534,000 20,457,000 Operating (loss) income (1,867,000 ) 10,393,000 1,627,000 5,493,000 Other expense: Interest expense, net 5,075,000 5,699,000 5,764,000 6,689,000 (Loss) income before income tax (benefit) expense (6,942,000 ) 4,694,000 (4,137,000 ) (1,196,000 ) Income tax (benefit) expense (1,447,000 ) 1,181,000 (1,035,000 ) 1,569,000 Net (loss) income $ (5,495,000 ) $ 3,513,000 $ (3,102,000 ) $ (2,765,000 ) Basic net (loss) income per share $ (0.29 ) $ 0.19 $ (0.16 ) $ (0.15 ) Diluted net (loss) income per share $ (0.29 ) $ 0.18 $ (0.16 ) $ (0.15 ) Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not agree with per share amounts for the year shown elsewhere in the Annual Report on Form 10-K. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Mar. 31, 2020 | |
Schedule II Valuation and Qualifying Accounts [Abstract] | |
Schedule II Valuation and Qualifying Accounts | Schedule II Valuation and Qualifying Accounts Accounts Receivable Allowance for doubtful accounts Years Ended March 31, Description Balance at beginning of year Charge to bad debts expense Acquisition Amounts written off Balance at end of year 2020 Allowance for doubtful accounts $ 4,100,000 $ 610,000 $ - $ 458,000 $ 4,252,000 2019 Allowance for doubtful accounts $ 4,142,000 $ 224,000 $ 63,000 (1) $ 329,000 $ 4,100,000 2018 Allowance for doubtful accounts $ 4,140,000 $ 21,000 $ - $ 19,000 $ 4,142,000 (1) Allowance for doubtful accounts established in the opening balance sheet in connection with the Company’s January 2019 acquisition. Accounts Receivable Allowance for customer-payment discrepancies Years Ended March 31, Description Balance at beginning of year Charge to discrepancies expense Acquisition Amounts Processed Balance at end of year 2020 Allowance for customer-payment discrepancies $ 854,000 $ 1,626,000 $ - $ 1,440,000 $ 1,040,000 2019 Allowance for customer-payment discrepancies $ 1,110,000 $ 731,000 $ - $ 987,000 $ 854,000 2018 Allowance for customer-payment discrepancies $ 751,000 $ 998,000 $ - $ 639,000 $ 1,110,000 Inventory Allowance for excess and obsolete inventory Years Ended March 31, Description Balance at beginning of year Provision for excess and obsolete inventory Acquisition Amounts written off Balance at end of year 2020 Allowance for excess and obsolete inventory $ 11,899,000 $ 13,372,000 $ - $ 12,063,000 $ 13,208,000 2019 Allowance for excess and obsolete inventory $ 6,682,000 $ 11,153,000 $ - $ 5,936,000 $ 11,899,000 2018 Allowance for excess and obsolete inventory $ 4,125,000 $ 8,491,000 $ 77,000 (2) $ 6,011,000 $ 6,682,000 (2) Allowance for excess and obsolete inventory established in the opening balance sheet in connection with the Company’s July 2017 acquisition. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
New Accounting Pronouncements Recently Adopted | New Accounting Pronouncements Recently Adopted Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance that requires balance sheet recognition of a lease asset and lease liability by lessees for all leases, other than leases with a term of 12 months or less if the short-term lease exclusion expedient is elected. The new guidance also required new disclosures providing additional qualitative and quantitative information about the amounts recorded in the financial statements. The new guidance requires a modified retrospective approach with optional practical expedients. The FASB provided entities with an additional transition method, which allows an entity to apply this guidance as of the beginning of the period of adoption instead of the beginning of the earliest comparative period presented in the entity’s financial statements. The Company adopted this guidance on April 1, 2019 using the modified retrospective approach and the optional transition method permitted by the FASB. The Company also elected certain practical expedients permitted under the transition guidance, including the package of practical expedients, which allowed it not to reassess lease classification for leases that commenced prior to the adoption date. In addition, the Company elected to exempt leases with an initial term of 12 months or less from balance sheet recognition and, for all classes of assets, combining non-lease components with lease components. Upon adoption, the Company recorded operating lease liabilities of $53,043,000 and corresponding operating lease assets of $50,773,000. The difference between the operating lease assets and liabilities recognized on the Company’s consolidated balance sheets primarily related to accrued rent on existing leases that were offset against the operating lease asset upon adoption. There was an immaterial reclassification of non-lease components to finance lease assets and finance lease liabilities upon adoption due to the Company’s election to combine non-lease components with lease components. The adoption of the new guidance did not have any impact on the Company’s rent expense and consolidated statement of cash flows. However, the Company has material nonfunctional currency leases that could have a material impact on the Company’s consolidated statements of operations. As required for other monetary liabilities, lessees shall remeasure a foreign currency-denominated lease liability using the exchange rate at each reporting date, but the lease assets are nonmonetary assets measured at historical rates, which are not affected by subsequent changes in the exchange rates. The Company recorded a loss of $11,710,000 in general and administrative expenses in connection with the remeasurement of foreign currency-denominated lease liabilities during year ended March 31, 2020. See Note 11 for additional discussion of the adoption of ASC 842 and the impact on the Company’s financial statements. |
New Accounting Pronouncements Not Yet Adopted | New Accounting Pronouncements Not Yet Adopted Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued an accounting pronouncement related to the measurement of credit losses on financial instruments. This pronouncement, along with a subsequent Accounting Standards Updates (“ASU”) issued to clarify certain provisions of the new guidance, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. The Company will adopt this guidance on April 1, 2020 and the adoption is not expected to have a significant impact on its consolidated financial statements and related disclosures. In addition, the adoption is not expected to have any significant impact on the Company’s business processes, systems and internal controls. Fair Value Measurements In August 2018, the FASB issued guidance , Income Taxes In December 2019, the FASB issued guidance that simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes Reference Rate Reform In March 2020, the FASB issued guidance that, for a limited time, eases the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating its contracts and the optional expedients provided by this guidance and the impact the new standard will have on its consolidated financial statements and related disclosures. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Motorcar Parts of America, Inc. and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated. |
Segment Reporting | Segment Reporting Pursuant to the guidance provided under the Financial Accounting Statement Board (“FASB”) Accounting Standards Codification (“ASC”) for segment reporting, the Company has identified its chief operating decision maker (“CODM”), reviewed the documents used by the CODM, and understands how such documents are used by the CODM to make financial and operating decisions. The Company has determined through this review process that its business comprises three separate operating segments. Two of the operating segments meet all of the aggregation criteria, and are aggregated. The remaining operating segment does not meet the quantitative thresholds for individual disclosure and the Company has combined its operating segments into one reportable segment. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash primarily consists of cash on hand and bank deposits. Cash equivalents consist of money market funds. The Company considers all highly liquid investments purchased with an original or remaining maturity of less than three months at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with various financial institutions. |
Accounts Receivable | Accounts Receivable The allowance for doubtful accounts is developed based upon several factors including customer credit quality, historical write-off experience and any known specific issues or disputes which exist as of the balance sheet date. Accounts receivable are written off only when all collection attempts have failed. The Company does not require collateral for accounts receivable. The Company has receivable discount programs that have been established with certain major customers and their respective banks. Under these programs, the Company has the option to sell those customers’ receivables to those banks at a discount to be agreed upon at the time the receivables are sold. Once the customer chooses which outstanding invoices are going to be made available for discounting, the Company can accept or decline the bundle of invoices provided. The receivable discount programs are non-recourse, and funds cannot be reclaimed by the customer or its bank after the related invoices have been discounted. |
Inventory | Inventory Inventory is comprised of: (i) Used Core and component raw materials, (ii) work-in-process, (iii) remanufactured finished goods and purchased finished goods. Used Core, component raw materials, and purchased finished goods are stated at the lower of average cost or net realizable value. Work-in-process is in various stages of production and is valued at the average cost of Used Cores and component raw materials issued to work orders still open, including allocations of labor and overhead costs. Historically, work- in-process inventory has not been material compared to the total inventory balance. Remanufactured finished goods include: (i) the Used Core cost and (ii) the cost of component raw materials, and allocations of labor and variable and fixed overhead costs (the “Unit Value”). The allocations of labor and variable and fixed overhead costs are based on the actual use of the production facilities over the prior 12 months which approximates normal capacity. This method prevents the distortion in allocated labor and overhead costs that would occur during short periods of abnormally low or high production. In addition, the Company excludes certain unallocated overhead such as severance costs, duplicative facility overhead costs, start-up costs, training, and spoilage from the calculation and expenses these unallocated overhead as period costs. Purchased finished goods also include an allocation of fixed overhead costs. The estimate of net realizable value is subjective and based on management’s judgment and knowledge of current industry demand and management’s projections of industry demand. The estimates may, therefore, be revised if there are changes in the overall market for the Company’s products or market changes that in management’s judgment, impact its ability to sell or liquidate potentially excess or obsolete inventory. Net realizable value is determined at least quarterly as follows: • Net realizable value for finished goods by customer by product line are determined based on the agreed upon selling price with the customer for a product in the trailing 12 months. The Company compares the average selling price, including any discounts and allowances, to the finished goods cost of on-hand inventory less any reserve for excess and obsolete inventory. Any reduction of value is recorded as cost of goods sold in the period in which the revaluation is identified. • Net realizable value for Used Cores are determined based on current core purchase prices from core brokers to the extent that core purchases in the trailing 12 months are significant. Remanufacturing consumes, on average, more than one Used Core for each remanufactured unit produced since not all Used Cores are resuable. The yield rates depend upon both the product and consumer specifications. The Company purchases Used Cores from core brokers to supplement its yield rates and Used Cores not returned under the core exchange program. The Company also considers the net selling price its customers have agreed to pay for Used Cores that are not returned under its core exchange program to assess whether Used Core cost exceeds Used Core net realizable value on a by customer by product line basis. Any reduction of core cost is recorded as cost of goods sold in the period in which the revaluation is identified. • The Company records an allowance for potentially excess and obsolete inventory based upon recent sales history, the quantity of inventory on-hand, and a forecast of potential use of the inventory. The Company periodically reviews inventory to identify excess quantities and part numbers that are experiencing a reduction in demand. Any part numbers with quantities identified during this process are reserved for at rates based upon management’s judgment, historical rates, and consideration of possible scrap and liquidation values which may be as high as 100% of cost if no liquidation market exists for the part. As a result of this process, the Company recorded reserves for excess and obsolete inventory of $13,208,000 and $11,899,000 at March 31, 2020 and 2019, respectively. The increase in the reserve for excess and obsolete inventory was primarily driven by the Company’s January 2019 acquisition of Dixie Electric, Ltd. (see Note 3 below). The Company records vendor discounts as a reduction of inventories and are recognized as a reduction to cost of sales as the inventories are sold. |
Inventory Unreturned | Inventory Unreturned Inventory unreturned represents the Company’s estimate, based on historical data and prospective information provided directly by the customer, of finished goods shipped to customers that the Company expects to be returned under its general right of return policy, after the balance sheet date. Inventory unreturned includes only the Unit Value of a finished good. The return rate is calculated based on expected returns within the normal operating cycle, which is generally one year. As such, the related amounts are classified in current assets. Inventory unreturned is valued in the same manner as the Company’s finished goods inventory. |
Contract Assets | Contract Assets Contract assets consists of: (i) the core portion of the finished goods shipped to the Company’s customers, (ii) upfront payments to customers in connection with customer contracts, (iii) core premiums paid to customers, and (iv) long-term core inventory deposits. Remanufactured Cores held at customers’ locations as a part of the finished goods sold to the customer are classified as long-term contract assets. These assets are valued at the lower of cost or net realizable value of Used Cores on hand (See Inventory above). For these Remanufactured Cores, the Company expects the finished good containing the Remanufactured Core to be returned under the Company’s general right of return policy or a similar Used Core to be returned to the Company by the customer, under the Company’s core exchange program in each case, for credit. The Remanufactured Cores and Used Cores returned by consumers to the Company’s customers but not yet returned to the Company are classified as “Cores expected to be returned by customers”, which are included in short-term contract assets until the Company physically receives them during its normal operating cycle, which is generally one year. Upfront payments to customers represent the marketing allowances, such as sign-on bonuses, slotting fees, and promotional allowances provided by the Company to its customers. These allowances are recognized as an asset and amortized over the appropriate period of time as a reduction of revenue if the Company expects to generate future revenues associated with the upfront payment. If the Company does not expect to generate additional revenue, then the upfront payment is recognized in the consolidated statements of operations when payment occurs as a reduction of revenue. Upfront payments expected to be amortized during the Company’s normal operating cycle, which is generally one year, are classified as short-term contract assets. Core premiums paid to customers represent the difference between the Remanufactured Core acquisition price paid to customers generally in connection with new business, and the related Used Core cost, which is treated as an asset and recognized as a reduction of revenue through the later of the date at which related revenue is recognized or the date at which the sales incentive is offered. The Company considers, among other things, the length of its largest ongoing customer relationships, duration of customer contracts, and the average life of vehicles on the road in determining the appropriate period of time over which to amortize these premiums. These core premiums are amortized over a period typically ranging from six to eight years, adjusted for specific circumstances associated with the arrangement. Core premiums are recorded as long-term contract assets. Core premiums expected to be amortized within the Company’s normal operating cycle, which is generally one year, are classified as short-term contract assets. Long-term core inventory deposits represent the cost of Remanufactured Cores the Company has purchased from customers, which are held by the customers and remain on the customers’ premises. The costs of these Remanufactured Cores were established at the time of the transaction based on the then current cost. The selling value of these Remanufactured Cores was established based on agreed upon amounts with these customers. The Company expects to realize the selling value and the related cost of these Remanufactured Cores should its relationship with a customer end, a possibility that the Company considers remote based on existing long-term customer agreements and historical experience. |
Customer Finished Goods Returns Accrual | Customer Finished Goods Returns Accrual The customer finished goods returns accrual represents the Company’s estimate of its exposure to customer returns, including warranty returns, under its general right of return policy to allow customers to return items that their end user customers have returned to them and from time to time, stock adjustment returns when the customers’ inventory of certain product lines exceeds the anticipated sales to end-user customers. The customer finished goods returns accrual represents the Unit Value of the estimated returns and is classified as a current liability due to the expectation that these returns will occur within the normal operating cycle of one year. |
Income Taxes | Income Taxes The Company accounts for income taxes using the liability method, which measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The resulting asset or liability is adjusted to reflect changes in the tax laws as they occur. A valuation allowance is provided to reduce deferred tax assets when it is more likely than not that a portion of the deferred tax asset will not be realized. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act: (i) removes certain net operating loss deduction and carry-back limitations originally imposed by the Tax Cuts and Jobs Act of 2017, (ii) increases IRC §163(j) business interest expense limitations, and (iii) technical correction on recovery period for qualified improvement property (QIP), allowing QIP to be eligible for bonus depreciation. Specifically, the Company may now carry back net operating losses originating in the year ended March 31, 2019 to the year ended March 31, 2017, resulting in an increase to its income tax receivable of $1,002,000 as of March 31, 2020. The primary components of income tax (benefit) expense were: (i) federal income taxes, (ii) the impact of net operating loss carry-backs in connection with the CARES Act, (iii) foreign income taxed at rates that are different from the federal statutory rate, (iv) change in realizable deferred tax items, (v) impact of the non-deductible executive compensation under Internal Revenue Code Section 162(m), (vi) income taxes associated with uncertain tax positions, (vii) the change in the blended state rate, and (viii) the excess tax benefit relating to share-based compensation. Realization of deferred tax assets is dependent upon the Company’s ability to generate sufficient future taxable income. Significant judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against the Company’s net deferred tax assets. The Company makes these estimates and judgments about its future taxable income that are based on assumptions that are consistent with the Company’s future plans. A valuation allowance is established when the Company believes it is not more likely than not all or some of a deferred tax assets will be realized. In evaluating the Company’s ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence. Deferred tax assets arising primarily as a result of net operating loss carry-forwards and research and development credits in connection with the Company’s recent acquisitions have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Should the actual amount differ from the Company’s estimates, the amount of the valuation allowance could be impacted. The Company has made an accounting policy election to recognize the U.S. tax effects of global intangible low- taxed income as a component of income tax expense in the period the tax arises. |
Plant and Equipment | Plant and Equipment Plant and equipment are stated at cost, less accumulated depreciation. The cost of additions and improvements are capitalized, while maintenance and repairs are charged to expense when incurred. Depreciation is provided on a straight-line basis in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives. Machinery and equipment are depreciated over a range from five to ten years. Office equipment and fixtures are depreciated over a range from three to ten years. Leasehold improvements are depreciated over the lives of the respective leases or the service lives of the leasehold improvements, whichever is shorter. Depreciation of assets recorded under finance leases is included in depreciation expense. The Company evaluates plant and equipment, including leasehold improvements, equipment and construction in progress, and right-of-use assets for impairment whenever events or circumstances indicate that the carrying value of an asset or asset group may not be recoverable. The Company groups assets at the lowest level for which cash flows are separately identified in order to measure an impairment. Events or circumstances that would result in an impairment review include a significant change in the use of an asset, the planned sale or disposal of an asset, or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset group. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to future undiscounted cash flows expected to be generated by the asset group. If it is determined to be impaired, the impairment recognized is measured by the amount by which the carrying value of the asset exceeds its fair value. As a result of the effect of the COVID-19 pandemic on macroeconomic conditions and its potential impact to the Company’s sales and operating income for future periods, it was determined that certain impairment testing triggers had occurred for the Company’s long-lived assets. Assumptions and estimates used to determine cash flows in the evaluation of impairment are subject to a degree of judgment and complexity. Any future changes to the assumptions and estimates resulting from changes in actual results or market conditions from those anticipated may affect the carrying value of long-lived assets and could result in impairment charges. Future events that may result in impairment charges include extended unfavorable economic impacts of COVID-19, or other factors which could decrease revenues and profitability of existing locations and changes in the cost structure of existing facilities. Based on the undiscounted cash flow analysis performed, the Company determined that estimated undiscounted future cash flows exceeded the net carrying values of its long-lived assets, and, therefore, as of March 31, 2020, the Company’s long-lived assets were not impaired. Assumptions and estimates about future values and remaining useful lives of the Company’s long-lived assets are subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in the Company’s business strategy and its internal forecasts. |
Goodwill | Goodwill The Company evaluates goodwill for impairment at least annually during the fourth quarter of each fiscal year or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The goodwill impairment test is performed at the reporting unit level, which represents the Company’s operating segments. In testing for goodwill impairment, the Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company’s qualitative assessment indicates that goodwill impairment is more likely than not, it will proceed with performing the quantitative assessment. If the fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired. If the carrying value of the reporting unit exceeds its fair value an impairment loss will be recognized for the amount by which the carrying value exceeds the reporting unit’s fair value. The Company performed a qualitative assessment of goodwill impairment indicators, considering macroeconomic conditions related to the COVID-19 pandemic and its potential impact to sales and operating income for future periods. The Company expects that the duration of the COVID-19 pandemic and the continued impact of global travel restrictions, government shutdowns of non-essential businesses and disruptions to its supply chain and distribution channels to result in lower revenue and operating income for future periods. As a result, the Company determined that there were indicators of impairment, and it proceeded with a quantitative assessment of goodwill for all reporting units at March 31, 2020. To estimate the fair value of its reporting units, the Company uses a combination of the market approach and the income approach. Under the market approach, the Company estimates fair value by comparing the business to similar businesses, or guideline companies whose securities are actively traded in public markets. Under the income approach, the Company uses a discounted cash flow (“DCF”) model in which cash flows anticipated over several periods, plus a terminal value at the end of that time horizon, are discounted to their present value using an appropriate rate that is commensurate with the risk inherent within the reporting unit. In addition, the Company compares the aggregate of the reporting units’ fair values to its market capitalization as further corroboration of the fair values. Estimates of fair value result from judgments about future events and uncertainties and rely on estimates and assumptions at a point in time. Judgments made in determining an estimate of fair value may materially impact the Company’s results of operations. The valuations are based on information available as of the impairment testing date and are based on expectations and assumptions that have been deemed reasonable by management. Any material changes in key assumptions, including failure to meet business plans, deterioration in the U.S. and global financial markets, an increase in interest rates or an increase in the cost of equity financing by market participants within the industry or other unanticipated events and circumstances, may decrease the projected cash flows or increase the discount rates and could potentially result in an impairment charge. Under the market approach, significant estimates and assumptions also include the selection of appropriate guideline companies and the determination of appropriate valuation multiples to apply to the reporting unit. Under the income approach, significant estimates and assumptions also includes the determination of discount rates. The discount rates represent the weighted average cost of capital measuring the reporting unit’s cost of debt and equity financing, which are weighted by the percentage of debt and percentage of equity in a company’s target capital structure. Included in the estimate of the weighted average cost of capital is the assumption of a risk premium to address incremental uncertainty related to the reporting units’ future cash flow projections. An increase in the risk premium increases the discount rate. The Company completed the required annual testing of goodwill impairment for each of the reporting units during the fourth quarter of the year ended March 31, 2020, and determined through the quantitative assessment that its goodwill of $3,205,000 was not impaired. |
Intangible Assets | Intangible Assets The Company’s intangible assets other than goodwill are finite–lived and amortized on a straight-line basis over their respective useful lives. The Company analyzes its finite-lived intangible assets for impairment when and if indicators of impairment exist. As discussed under the caption “Goodwill” above, as a result of the COVID-19 pandemic, the Company determined that there were indicators of impairment present at March 31, 2020. Accordingly, the Company analyzed undiscounted cash flows for finite lived intangible assets as of March 31, 2020. Based on that undiscounted cash flow analysis, the Company determined that estimated undiscounted future cash flows exceeded their net carrying values, and, therefore, as of March 31, 2020, the Company’s net intangible assets were not impaired. Assumptions and estimates about future values and remaining useful lives of the Company’s intangible assets are subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in the Company’s business strategy and its internal forecasts. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs include fees and costs incurred to obtain financing. Debt issuance costs related to the Company’s term loans are presented in the balance sheet as a direct deduction from the carrying amount of the term loans. Debt issuance costs related to the Company’s revolving loan are presented in prepaid expenses and other current assets in the accompanying consolidated balance sheets, regardless of whether or not there are any outstanding borrowings under the revolving loan. These fees and costs are amortized using the straight-line method, which approximates the effective interest rate method, over the terms of the related loans and are included in interest expense in the Company’s consolidated statements of operations. |
Foreign Currency Translation | Foreign Currency Translation For financial reporting purposes, the functional currency of the foreign subsidiaries is the local currency. The assets and liabilities of foreign operations for which the local currency is the functional currency are translated into the U.S. dollar at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average exchange rates during the year. The accumulated foreign currency translation adjustment is presented as a component of comprehensive income or loss in the consolidated statements of shareholders’ equity. During the year ended March 31, 2020, aggregate foreign currency transaction losses of $789,000 were recorded in general and administrative expenses. |
Revenue Recognition | Revenue Recognition Revenue is recognized when performance obligations under the terms of a contract with its customers are satisfied; generally, this occurs with the transfer of control of its manufactured, remanufactured, or distributed products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Revenue is recognized net of all anticipated returns, including Used Core returns under the core exchange program, marketing allowances, volume discounts, and other forms of variable consideration. Revenue is recognized either when products are shipped or when delivered, depending on the applicable contract terms. Bill and hold shipments are shipped out to the customer as ex-works; in which the customer makes arrangements and is responsible for their shipping cost. No freight or shipping costs are accrued for revenue under the terms of shipments made as ex-works. The price of a finished remanufactured product sold to customers is generally comprised of separately invoiced amounts for the Remanufactured Core included in the product (“Remanufactured Core value”) and the Unit Value. The Unit Value is recorded as revenue based on the Company’s then current price list, net of applicable discounts and allowances. The Remanufactured Core value is recorded as a net revenue based upon the estimate of Used Cores that will not be returned by the customer for credit. These estimates are subjective and based on management’s judgment and knowledge of historical, current, and projected return rates. As reconciliations are completed with the customers the actual rates at which Used Cores are not being returned may differ from the current estimates. This may result in periodic adjustments of the estimated contract asset and liability amounts recorded and may impact the projected revenue recognition rates used to record the estimated future revenue. These estimates may also be revised if there are changes in contractual arrangements with customers, or changes in business practices. A significant portion of the remanufactured automotive parts sold to customers are replaced by similar Used Cores sent back for credit by customers under the core exchange program (as described in further detail below). The number of Used Cores sent back under the core exchange program is generally limited to the number of similar Remanufactured Cores previously shipped to each customer. Revenue Recognition — Core Exchange Program Full price Remanufactured Cores: When remanufactured products are shipped, certain customers are invoiced for the Remanufactured Core value of the product at the full Remanufactured Core sales price. For these Remanufactured Cores, revenue is only recognized based upon an estimate of the rate at which these customers will pay cash for Remanufactured Cores in lieu of sending back similar Used Cores for credits under the core exchange program. The remainder of the full price Remanufactured Core value invoiced to these customers is established as a long-term contract liability rather than being recognized as revenue in the period the products are shipped as the Company expects these Remanufactured Cores to be returned for credit under its core exchange program. Nominal price Remanufactured Cores: Certain other customers are invoiced for the Remanufactured Core value of the product shipped at a nominal (generally $0.01 or less) Remanufactured Core price. For these nominal Remanufactured Cores, revenue is only recognized based upon an estimate of the rate at which these customers will pay cash for Remanufactured Cores in lieu of sending back similar Used Cores for credits under the core exchange program. Revenue amounts are calculated based on contractually agreed upon pricing for these Remanufactured Cores for which the customers are not returning similar Used Cores. The remainder of the nominal price Remanufactured Core value invoiced to these customers is established as a long-term contract liability rather than being recognized as revenue in the period the products are shipped as the Company expects these Remanufactured Cores to be returned for credit under its core exchange program. Revenue Recognition; General Right of Return Customers are allowed to return goods that their end-user customers have returned to them, whether or not the returned item is defective (warranty returns). In addition, under the terms of certain agreements and industry practice, customers from time to time are allowed stock adjustments when their inventory of certain product lines exceeds the anticipated sales to end-user customers (stock adjustment returns). Customers have various contractual rights for stock adjustment returns, which are typically less than 5% of units sold. In some instances, a higher level of returns is allowed in connection with significant restocking orders. The aggregate returns are generally limited to less than 20% of unit sales. The allowance for warranty returns is established based on a historical analysis of the level of this type of return as a percentage of total unit sales. The allowance for stock adjustment returns is based on specific customer inventory levels, inventory movements, and information on the estimated timing of stock adjustment returns provided by customers. Stock adjustment returns do not occur at any specific time during the year. The return rate for stock adjustments is calculated based on expected returns within the normal operating cycle, which is generally one year. The Unit Value of the warranty and stock adjustment returns are treated as reductions of revenue based on the estimations made at the time of the sale. The Remanufactured Core value of warranty and stock adjustment returns are provided for as indicated in the paragraph “Revenue Recognition – Core Exchange Program”. As is standard in the industry, the Company only accepts returns from on-going customers. If a customer ceases doing business with the Company, it has no further obligation to accept additional product returns from that customer. Similarly, the Company accepts product returns and grants appropriate credits to new customers from the time the new customer relationship is established. |
Shipping Costs | Shipping Costs The Company includes shipping and handling charges in the gross invoice price to customers and classifies the total amount as revenue. All shipping and handling costs are expensed as cost of sales as inventory is sold. |
Contract Liability | Contract Liability Contract liability consists of: (i) customer allowances earned, (ii) accrued core payments, (iii) customer core returns accruals, (iv) core bank liability, and (v) customer deposits. Customer allowances earned includes all marketing allowances provided to customers. Such allowances include sales incentives and concessions. Voluntary marketing allowances related to a single exchange of product are recorded as a reduction of revenues at the time the related revenues are recorded or when such incentives are offered. Other marketing allowances, which may only be applied against future purchases, are recorded as a reduction to revenues in accordance with a schedule set forth in the relevant contract. Sales incentive amounts are recorded based on the value of the incentive provided. See Note 15 for a description of all marketing allowances. Customer allowances to be provided to customers within the Company’s normal operating cycle, which is generally one year, are considered short-term contract liabilities and the remainder are recorded as long-term. Accrued core payments represent the sales price of Remanufactured Cores purchased from customers, generally in connection with new business, which are held by these customers and remain on their premises. The sales price of these Remanufactured Cores will be realized when the Company’s relationship with a customer ends, a possibility that the Company considers remote based on existing long-term customer agreements and historical experience. The payments to be made to customers for purchases of Remanufactured Cores within the Company’s normal operating cycle, which is generally one year, are considered short-term contract liabilities and the remainder are recorded as long-term. Customer core returns accruals represent the full and nominally priced Remanufactured Cores shipped to the Company’s customers. When the Company ships the product, it recognizes an obligation to accept a similar Used Core sent back under the core exchange program based upon the Remanufactured Core price agreed upon by the Company and its customer. The Contract liability related to Used Cores returned by consumers to the Company’s customers but not yet returned to the Company are classified as short-term contract liabilities until the Company physically receives these Used Cores as they are expected to be returned during the Company’s normal operating cycle, which is generally one year and the remainder are recorded as long-term. The core bank liability represents the full Remanufactured Core sales price paid for cores returned under the core exchange program. The payment for these cores will be made over a contractual repayment period pursuant to the Company’s agreement with this customer. Payments to be made within the Company’s normal operating cycle, which is generally one year, are considered short-term contract liabilities and the remainder are recorded as long- term. Customer deposits represent the receipt of prepayments from customers for the obligation to transfer goods or services in the future. The Company classifies these customer deposits as short-term contract liabilities as the Company expects to satisfy these obligations within its normal operating cycle, which generally one year and the remainder are recorded as long-term. |
Advertising Costs | Advertising Costs The Company expenses all advertising costs as incurred. Advertising expenses for the years ended March 31, 2020, 2019 and 2018 were $773,000, $819,000 and $610,000, respectively. |
Net (Loss) Income Per Share | Net (Loss) Income Per Share Basic net (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares of common stock outstanding during the period. Diluted net (loss) income per share includes the effect, if any, from the potential exercise or conversion of securities, such as stock options and warrants, which would result in the issuance of incremental shares of common stock to the extent such impact is not anti-dilutive. The following presents a reconciliation of basic and diluted net (loss) income per share. Years Ended March 31, 2020 2019 2018 Net (loss) income $ (7,290,000 ) $ (7,849,000 ) $ 19,264,000 Basic shares 18,913,788 18,849,909 18,854,993 Effect of dilutive stock options and warrants - - 659,782 Diluted shares 18,913,788 18,849,909 19,514,775 Net (loss) income per share: Basic net (loss) income per share $ (0.39 ) $ (0.42 ) $ 1.02 Diluted net (loss) income per share $ (0.39 ) $ (0.42 ) $ 0.99 Potential common shares that would have the effect of increasing diluted net income per share or decreasing diluted net loss per share are considered to be anti-dilutive and as such, these shares are not included in calculating diluted net (loss) income per share. For the years ended March 31, 2020, 2019 and 2018, there were 1,738,106, 1,580,299, and 448,039, respectively, of potential common shares not included in the calculation of diluted net (loss) income per share because their effect was anti-dilutive. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. On an on-going basis, the Company evaluates its estimates, including allowances for doubtful accounts, valuation of inventory, valuation of long-lived assets, goodwill and intangible assets, depreciation and amortization of long-lived assets, litigation matters, valuation of deferred tax assets, share-based compensation, sales returns and other customer marketing allowances, and the incremental borrowing rate used in determining the present value of lease liabilities. Although the Company does not believe that there is a reasonable likelihood that there will be a material change in the future estimate or in the assumptions used in calculating the estimate, unforeseen changes in the industry, or business could materially impact the estimate and may have a material adverse effect on its business, financial condition and results of operations. |
Financial Instruments | Financial Instruments The carrying amounts of cash, short-term investments, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the short-term nature of these instruments. The carrying amounts of the revolving loan, term loan and other long-term liabilities approximate their fair value based on current rates for instruments with similar characteristics. |
Share-Based Payments | Share-Based Payments The Black-Scholes option-pricing model requires the input of subjective assumptions including the expected volatility of the underlying stock and the expected holding period of the option. These subjective assumptions are based on both historical and other information. Changes in the values assumed and used in the model can materially affect the estimate of fair value. The following summarizes the Black-Scholes option-pricing model assumptions used to derive the weighted average fair value of the stock options granted during the periods noted. Years Ended March 31, 2020 2019 2018 Weighted average risk free interest rate 1.76 % 2.83 % 1.92 % Weighted average expected holding period (years) 5.70 5.94 5.82 Weighted average expected volatility 42.50 % 43.91 % 47.28 % Weighted average expected dividend yield - - - Weighted average fair value of options granted $ 8.27 $ 8.75 $ 12.63 |
Credit Risk | Credit Risk The majority of the Company’s sales are to leading automotive aftermarket parts suppliers. Management believes the credit risk with respect to trade accounts receivable is limited due to the Company’s credit evaluation process and the nature of its customers. However, should the Company’s customers experience significant cash flow problems, the Company’s financial position and results of operations could be materially and adversely affected, and the maximum amount of loss that would be incurred would be the outstanding receivable balance, Used Cores expected to be returned by customers, and the value of the Remanufactured Cores held at customers’ locations. |
Deferred Compensation Plan | Deferred Compensation Plan The Company has a deferred compensation plan for certain members of management. The plan allows participants to defer salary and bonuses. The assets of the plan, which are held in a trust and are subject to the claims of the Company’s general creditors under federal and state laws in the event of insolvency, are recorded as short-term investments in the consolidated balance sheets. Consequently, the trust qualifies as a Rabbi trust for income tax purposes. The plan’s assets consist primarily of mutual funds and are recorded at market value with any unrealized gain or loss recorded as general and administrative expense. During the year ended March 31, 2020 and 2019, the Company redeemed $2,802,000 and $0, respectively, of its short-term investments for the payment of deferred compensation liabilities. During the year ended March 31, 2020, the Company recognized $96,000 in net gains which consists of $193,000 in realized gains on investments sold during the year partially offset by $97,000 of unrealized losses recognized on investments still held at March 31, 2020. The carrying value of plan assets was $850,000 and $3,273,000, and deferred compensation liability, which is included in other current liabilities in the accompanying consolidated balance sheets, was $850,000 and $3,273,000 at March 31, 2020 and 2019, respectively. During the years ended March 31, 2020, 2019, and 2018, an expense of $79,000, $113,000 and $118,000 respectively, was recorded for each year related to the deferred compensation plan. During the year ended March 31, 2020, one of the Company’s named executive officer who was a participant in the deferred compensation plan redeemed $1,432,000 and elected to be paid out over 24 months. At March 31, 2020, approximately $1,295,000 remained unpaid, of which $714,000 was recorded in accrued liabilities and $581,000 was recorded in other liabilities in the accompanying consolidated balance sheet. |
Comprehensive Income or Loss | Comprehensive Income or Loss Comprehensive income or loss is defined as the change in equity during a period resulting from transactions and other events and circumstances from non-owner sources. The Company’s total comprehensive income or loss consists of net unrealized income or loss from foreign currency translation adjustments. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Reconciliation of Basic and Diluted Net (Loss) Income Per Share | The following presents a reconciliation of basic and diluted net (loss) income per share. Years Ended March 31, 2020 2019 2018 Net (loss) income $ (7,290,000 ) $ (7,849,000 ) $ 19,264,000 Basic shares 18,913,788 18,849,909 18,854,993 Effect of dilutive stock options and warrants - - 659,782 Diluted shares 18,913,788 18,849,909 19,514,775 Net (loss) income per share: Basic net (loss) income per share $ (0.39 ) $ (0.42 ) $ 1.02 Diluted net (loss) income per share $ (0.39 ) $ (0.42 ) $ 0.99 |
Black-Scholes Option Pricing Model Assumptions Used to Derive Weighted Average Fair Value of Stock Options Granted | The following summarizes the Black-Scholes option-pricing model assumptions used to derive the weighted average fair value of the stock options granted during the periods noted. Years Ended March 31, 2020 2019 2018 Weighted average risk free interest rate 1.76 % 2.83 % 1.92 % Weighted average expected holding period (years) 5.70 5.94 5.82 Weighted average expected volatility 42.50 % 43.91 % 47.28 % Weighted average expected dividend yield - - - Weighted average fair value of options granted $ 8.27 $ 8.75 $ 12.63 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets [Abstract] | |
Change in Goodwill | The following summarizes the change in the Company’s goodwill: Years Ended March 31, 2020 2019 Balance at beginning of period $ 3,205,000 $ 2,551,000 Goodwill acquired - 654,000 Balance at end of period $ 3,205,000 $ 3,205,000 |
Intangible Assets Subject to Amortization | The following is a summary of acquired intangible assets subject to amortization: March 31, 2020 March 31, 2019 Weighted Average Amortization Period Gross Carrying Value Accumulated Amortization Gross Carrying Value Accumulated Amortization Intangible assets subject to amortization Trademarks 9 years $ 827,000 $ 435,000 $ 1,007,000 $ 464,000 Customer relationships 11 years 8,453,000 4,376,000 8,610,000 3,547,000 Order backlog 6 months - - 325,000 180,000 Developed technology 5 years 2,817,000 893,000 2,991,000 311,000 Total 9 years $ 12,097,000 $ 5,704,000 $ 12,933,000 $ 4,502,000 |
Amortization Expense for Acquired Intangible Assets | Amortization expense for acquired intangible assets is as follows: Years Ended March 31, 2020 2019 2018 Amortization expense $ 1,770,000 $ 1,194,000 $ 710,000 |
Estimated Future Amortization Expense for Intangible Assets | The estimated future amortization expense for acquired intangible assets subject to amortization is as follows: Year Ending March 31, 2021 $ 1,479,000 2022 1,438,000 2023 1,408,000 2024 1,040,000 2025 471,000 Thereafter 557,000 Total $ 6,393,000 |
Accounts Receivable - Net (Tabl
Accounts Receivable - Net (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Accounts Receivable - Net [Abstract] | |
Accounts Receivable | Accounts receivable — net is comprised of the following: March 31, 2020 March 31, 2019 Accounts receivable — trade $ 109,164,000 $ 75,847,000 Allowance for bad debts (4,252,000 ) (4,100,000 ) Customer payment discrepancies (1,040,000 ) (854,000 ) Customer returns RGA issued (12,124,000 ) (14,878,000 ) Less: total accounts receivable offset accounts (17,416,000 ) (19,832,000 ) Total accounts receivable — net $ 91,748,000 $ 56,015,000 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Inventory [Abstract] | |
Inventory Net | Inventory is comprised of the following: March 31, 2020 March 31, 2019 Raw materials $ 99,360,000 $ 95,757,000 Work in process 3,906,000 3,502,000 Finished goods 135,601,000 146,366,000 238,867,000 245,625,000 Less allowance for excess and obsolete inventory (13,208,000 ) (11,899,000 ) Total $ 225,659,000 $ 233,726,000 Inventory unreturned $ 9,021,000 $ 8,469,000 |
Contract Assets (Tables)
Contract Assets (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Contract Assets [Abstract] | |
Contract Assets | Contract assets are comprised of the following: March 31, 2020 March 31, 2019 Short-term contract assets Cores expected to be returned by customers $ 12,579,000 $ 14,671,000 Upfront payments to customers 2,865,000 3,101,000 Core premiums paid to customers 4,888,000 4,411,000 Total short-term contract assets $ 20,332,000 $ 22,183,000 Long-term contract assets Remanufactured cores held at customers’ locations $ 217,616,000 $ 196,914,000 Upfront payments to customers 589,000 2,775,000 Core premiums paid to customers 15,766,000 16,618,000 Long-term core inventory deposits 5,569,000 5,569,000 Total long-term contract assets $ 239,540,000 $ 221,876,000 |
Plant and Equipment (Tables)
Plant and Equipment (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Plant and Equipment [Abstract] | |
Plant and Equipment, at Cost | Plant and equipment if comprised of the following: March 31, 2020 March 31, 2019 Machinery and equipment $ 48,424,000 $ 39,953,000 Office equipment and fixtures 25,541,000 20,070,000 Leasehold improvements 10,519,000 9,451,000 84,484,000 69,474,000 Less accumulated depreciation (39,527,000 ) (34,323,000 ) Total $ 44,957,000 $ 35,151,000 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Debt [Abstract] | |
Information About the Term Loan | The Company’s term loans are comprised of the following: March 31, 2020 March 31, 2019 Principal amount of term loan $ 24,375,000 $ 28,125,000 Unamortized financing fees (235,000 ) (253,000 ) Net carrying amount of term loan 24,140,000 27,872,000 Less current portion of term loan (3,678,000 ) (3,685,000 ) Long-term portion of term loan $ 20,462,000 $ 24,187,000 |
Future Repayments of the Amended Term Loan, by Fiscal Year | Future repayments of the Company’s Term Loans are as follows: Year Ending March 31, 2021 3,750,000 2022 3,750,000 2023 3,750,000 2024 13,125,000 Total payments $ 24,375,000 |
Contract Liabilities (Tables)
Contract Liabilities (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Contract Liabilities [Abstract] | |
Contract Liabilities | Contract liabilities are comprised of the following: March 31, 2020 March 31, 2019 Short-term contract liabilities Customer core returns accruals $ 4,126,000 $ 3,933,000 Customer allowances earned 13,844,000 12,755,000 Customer deposits 1,365,000 2,674,000 Core bank liability 528,000 - Accrued core payment, net 8,048,000 11,237,000 Total short-term contract liabilities $ 27,911,000 $ 30,599,000 Long-term contract liabilities Customer core returns accruals $ 77,927,000 $ 25,722,000 Customer allowances earned 542,000 - Core bank liability 7,556,000 - Accrued core payment, net 6,076,000 15,167,000 Total long-term contract liabilities $ 92,101,000 $ 40,889,000 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Balance Sheet Information for Leases | Balance sheet information for leases is comprised of the following: March 31, 2020 Leases Classification Assets: Operating Operating lease assets $ 53,029,000 Finance (1) Plant and equipment 6,922,000 Total leased assets $ 59,951,000 Liabilities: Current Operating Operating lease liabilities $ 5,104,000 Finance Other current liabilities 2,059,000 Long-term Operating Long-term operating lease liabilities 61,425,000 Finance Other liabilities 3,905,000 Total lease liabilities $ 72,493,000 (1) The Company had $5,403,000 in capital lease assets included in plant and equipment at March 31, 2019. |
Lease Cost Recognized in Consolidated Statement of Operations | Lease cost recognized in the consolidated statement of operations is comprised of the following: Year Ended March 31, 2020 Lease cost Operating lease cost (1) $ 8,733,000 Short-term lease cost 1,263,000 Variable lease cost 600,000 Finance lease cost: Amortization of finance lease assets 1,616,000 Interest on finance lease liabilities 281,000 Total lease cost $ 12,493,000 (1) During the years ended March 31, 2019 and 2018, the Company incurred total operating lease expenses of $6,188,000 and $4,362,000, respectively. |
Maturity of Lease Commitments | Maturities of lease commitments at March 31, 2020 were as follows: Maturity of lease liabilities Operating Leases Finance Leases Total 2021 $ 9,536,000 $ 2,292,000 $ 11,828,000 2022 8,755,000 1,955,000 10,710,000 2023 7,503,000 1,325,000 8,828,000 2024 7,261,000 610,000 7,871,000 2025 7,368,000 243,000 7,611,000 Thereafter 59,837,000 - 59,837,000 Total lease payments 100,260,000 6,425,000 106,685,000 Less amount representing interest (33,731,000 ) (461,000 ) (34,192,000 ) Present value of lease liabilities $ 66,529,000 $ 5,964,000 $ 72,493,000 Maturities of lease commitments at March 31, 2019 were as follows: Maturity of lease liabilities Operating Leases Capital Leases Total 2020 $ 7,405,000 $ 1,755,000 $ 9,160,000 2021 8,206,000 1,311,000 9,517,000 2022 7,862,000 1,040,000 8,902,000 2023 6,726,000 719,000 7,445,000 2024 6,696,000 89,000 6,785,000 Thereafter 65,321,000 - 65,321,000 Total lease payments $ 102,216,000 4,914,000 107,130,000 Less amount representing interest (406,000 ) (406,000 ) Present value of lease liabilities $ 4,508,000 $ 106,724,000 |
Other Information about Leases | Other information about leases is as follows: Year Ended March 31, 2020 Lease term and discount rate Weighted-average remaining lease term (years): Finance leases 3.2 Operating leases 12.0 Weighted-average discount rate: Finance leases 4.7 % Operating leases 5.6 % |
Accounts Receivable Discount _2
Accounts Receivable Discount Programs (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Accounts Receivable Discount Programs [Abstract] | |
Accounts Receivable Discount Programs | The following is a summary of the Company’s accounts receivable discount programs: Years Ended March 31, 2020 2019 Receivables discounted $ 461,484,000 $ 396,650,000 Weighted average days 346 341 Weighted average discount rate 3.3 % 4.2 % Amount of discount as interest expense $ 14,780,000 $ 15,867,000 |
Financial Risk Management and_2
Financial Risk Management and Derivatives (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Financial Risk Management and Derivatives [Abstract] | |
Derivative Instruments on Consolidated Statements of Operations | The following shows the effect of the Company’s derivative instruments on its consolidated statements of operations: Gain (Loss) Recognized within General and Administrative Expenses Derivatives Not Designated as Years Ended March 31, Hedging Instruments 2020 2019 2018 Forward foreign currency exchange contracts $ (6,491,000 ) $ (972,000 ) $ 752,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value Recurring Basis | The following sets forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis according to the valuation techniques the Company used to determine their fair values at: March 31, 2020 March 31, 2019 Fair Value Measurements Fair Value Measurements Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Assets Short-term investments Mutual funds $ 850,000 $ 850,000 $ - $ - $ 3,273,000 $ 3,273,000 $ - $ - Prepaid expenses and other current assets Forward foreign currency exchange contracts - - - - 207,000 - 207,000 - Liabilities Accrued liabilities Short-term contingent consideration 2,190,000 - - 2,190,000 2,816,000 - - 2,816,000 Other current liabilities Deferred compensation 850,000 850,000 - - 3,273,000 3,273,000 - - Forward foreign currency exchange contracts 6,284,000 - 6,284,000 - - - - - Other liabilities Long-term contingent consideration 463,000 - - 463,000 1,905,000 - - 1,905,000 |
Assumptions Used to Determine Fair Value of Contingent Consideration | The assumptions used to determine the fair value is as follows: March 31, 2020 Risk free interest rate 0.16 % Counter party rate 12.16 % Probability 100.00 % E&M Gross Profit Earn-out Consideration The assumptions used to determine the fair value is as follows: March 31, 2020 March 31, 2019 Risk free interest rate 0.22 % 2.23 % Counter party rate 12.22 % 6.23 % Expected volatility 31.00 % 29.00 % Weighted average cost of capital 13.75 % 16.00 % Dixie Revenue Earn-out Consideration The assumptions used to determine the fair value is as follows: March 31, 2020 March 31, 2019 Risk free interest rate 0.16 % 2.58 % Counter party rate 15.16 % 5.03 % Revenue discount rate 2.50 % 6.50 % Expected volatility 33.50 % 29.00 % Revenue volatility 6.50 % 8.50 % |
Change in Warrant Liability Measured at Fair Value Recurring Basis Using Significant Unobservable Inputs (Level 3) | The following table summarizes the activity for financial assets and liabilities utilizing Level 3 fair value measurements: Years Ended March 31, 2020 2019 Contingent Contingent Beginning balance $ 4,721,000 $ - Newly issued - 4,400,000 Changes in revaluation of contingent consideration included in earnings (113,000 ) 321,000 Exercises/settlements (1) (1,955,000 ) - Ending balance $ 2,653,000 $ 4,721,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies [Abstract] | |
Changes in Warranty Return Accrual | The following summarizes the changes in the warranty return accrual: Years Ended March 31, 2020 2019 2018 Balance at beginning of year $ 19,475,000 $ 16,646,000 $ 14,286,000 Acquisition (1) - 221,000 - Charged to expense 112,590,000 111,321,000 105,156,000 Amounts processed (113,765,000 ) (108,713,000 ) (102,796,000 ) Balance at end of year $ 18,300,000 $ 19,475,000 $ 16,646,000 (1) Warranty reserve established in the opening balance sheet in connection with the Company’s Dixie acquisition. |
Breakout of Allowances | The following summarizes the breakout of allowances discussed above, recorded as a reduction to revenues: Years Ended March 31, 2020 2019 2018 Allowances incurred under long-term customer contracts $ 26,733,000 $ 29,612,000 $ 24,829,000 Allowances related to a single exchange of product 97,408,000 92,588,000 79,851,000 Amortization of core premiums paid to customers 4,501,000 4,127,000 3,588,000 Total customer allowances recorded as a reduction of revenues $ 128,642,000 $ 126,327,000 $ 108,268,000 |
Commitments to Incur Allowances, Excluding Allowances Related to Single Exchange of Product | The following presents the Company’s commitments to incur allowances, excluding allowances related to a single exchange of product, which will be recognized as a reduction to revenue when the related revenue is recognized: Year Ending March 31, 2021 $ 25,896,000 2022 5,838,000 2023 4,701,000 2024 2,859,000 2025 2,052,000 Thereafter 2,667,000 Total marketing allowances $ 44,013,000 |
Significant Customer and Othe_2
Significant Customer and Other Information (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Significant Customer and Other Information [Abstract] | |
Schedule of Concentrations of Risk | The Company’s largest customers accounted for the following total percentage of net sales: Years Ended March 31, 2020 2019 2018 Customer A 38 % 38 % 41 % Customer B 20 % 22 % 25 % Customer C 26 % 23 % 19 % The Company’s largest customers accounted for the following total percentage of accounts receivable — trade: March 31, 2020 March 31, 2019 Customer A 28 % 34 % Customer B 14 % 18 % Customer C 33 % 16 % Geographic and Product Information The Company’s products are predominantly sold in the U.S. and accounted for the following total percentage of net sales: Years Ended March 31, 2020 2019 2018 Rotating electrical products 73 % 79 % 78 % Wheel hub products 15 % 15 % 17 % Brake-related products 9 % 3 % 3 % Other products 3 % 3 % 2 % 100 % 100 % 100 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Income Taxes [Abstract] | |
Income Tax Expense | The income tax expense is as follows: Years Ended March 31, 2020 2019 2018 Current tax expense Federal $ 5,313,000 $ 680,000 $ 12,187,000 State 1,454,000 647,000 1,425,000 Foreign 1,566,000 1,723,000 1,194,000 Total current tax expense 8,333,000 3,050,000 14,806,000 Deferred tax (benefit) expense Federal (4,516,000 ) (2,087,000 ) 949,000 State (1,567,000 ) (295,000 ) 393,000 Foreign (3,261,000 ) (400,000 ) (23,000 ) Total deferred tax (benefit) expense (9,344,000 ) (2,782,000 ) 1,319,000 Total income tax (benefit) expense $ (1,011,000 ) $ 268,000 $ 16,125,000 |
Deferred Income Taxes | Deferred income taxes consist of the following: March 31, 2020 March 31, 2019 Assets Allowance for bad debts $ 1,037,000 $ 1,005,000 Customer allowances earned 3,549,000 3,177,000 Allowance for stock adjustment returns 1,743,000 2,073,000 Inventory adjustments 5,567,000 3,701,000 Stock options 2,427,000 2,221,000 Operating lease liabilities (1) 19,396,000 - Estimate for returns 10,839,000 2,107,000 Accrued compensation 1,964,000 1,578,000 Net operating losses 4,091,000 2,088,000 Tax credits 1,343,000 1,495,000 Other 1,620,000 5,776,000 Total deferred tax assets $ 53,576,000 $ 25,221,000 Liabilities Plant and equipment, net (5,175,000 ) (3,316,000 ) Intangibles, net (4,700,000 ) (5,390,000 ) Operating lease (1) (15,371,000 ) - Other (3,966,000 ) (3,278,000 ) Total deferred tax liabilities $ (29,212,000 ) $ (11,984,000 ) Less valuation allowance $ (5,493,000 ) $ (3,748,000 ) Total $ 18,871,000 $ 9,489,000 (1) Adoption of the new lease standard as of April 1, 2019 (see Note 2) resulted in the recognition of a deferred tax asset for operating lease liabilities and a deferred tax liability for operating lease assets. These temporary differences will reverse over the estimated term of the relevant operating leases. As of March 31, 2019, the deferred tax assets associated with operating leases were reported as other deferred tax assets under legacy US GAAP. |
Difference Between Income Tax Expense at the Federal Statutory Rate and Effective Tax Rate | The difference between the income tax expense at the federal statutory rate and the Company’s effective tax rate is as follows: Years Ended March 31, 2020 2019 2018 Statutory federal income tax rate 21.0 % 21.0 % 31.5 % State income tax rate, net of federal benefit (3.7 )% (3.7 )% 3.6 % Excess tax benefit from stock compensation (1.3 )% 0.7 % (0.7 )% Foreign income taxed at different rates 13.8 % - % (2.6 )% Return to provision adjustments (1.5 )% - % - % Warrants - % - % (2.1 )% Non-deductible executive compensation (4.0 )% (7.3 )% 1.0 % Change in valuation allowance (18.7 )% (15.3 )% 4.8 % Net operating loss carryback 4.8 % - % - % Effects of mandatory redeemed repatriation - % - % 1.5 % Effects of U.S. tax rate changes - % 0.3 % 8.0 % Uncertain tax positions 2.1 % 1.8 % 0.6 % Research and development credit 1.1 % 1.3 % (0.2 )% Non-deductible transaction costs - % (2.1 )% - % Other income tax (1.4 )% (0.2 )% 0.2 % 12.2 % (3.5 )% 45.6 % |
Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Years Ended March 31, 2020 2019 2018 Balance at beginning of period $ 1,083,000 $ 1,219,000 $ 1,092,000 Additions based on tax positions related to the current year 362,000 91,000 234,000 Reductions for tax positions of prior year (434,000 ) (227,000 ) (107,000 ) Balance at end of period $ 1,011,000 $ 1,083,000 $ 1,219,000 |
Share-based Payments (Tables)
Share-based Payments (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Share-based Payments [Abstract] | |
Stock Option Activity | The following is a summary of stock option transactions: Number of Shares Weighted Average Exercise Price Outstanding at March 31, 2019 1,337,165 $ 17.58 Granted 302,539 $ 19.72 Exercised (59,600 ) $ 7.65 Forfeited (43,981 ) $ 24.98 Outstanding at March 31, 2020 1,536,123 $ 18.18 |
Summary of Options Outstanding | The following summarizes information about the options outstanding at March 31, 2020: Options Outstanding Options Exercisable Range of Exercise price Shares Weighted Average Exercise Price Weighted Average Remaining Life In Years Aggregate Intrinsic Value Shares Weighted Average Exercise Price Weighted Average Remaining Life In Years Aggregate Intrinsic Value $ 5.20 to $6.47 311,634 $ 6.46 2.75 311,634 $ 6.46 2.75 $ 6.48 to $18.20 223,600 10.19 3.61 204,300 9.58 3.06 $ 18.21 to $22.83 524,251 19.56 8.77 83,183 19.17 8.23 $ 22.84 to $28.04 216,499 26.19 6.44 163,669 25.82 6.18 $ 28.05 to $34.17 260,139 29.61 5.94 260,139 29.61 5.94 1,536,123 $ 18.18 5.99 $ 2,567,000 1,022,925 $ 17.10 4.62 $ 2,567,000 |
Summary of Changes in the Status of Non-vested Restricted Stock Units | The following is a summary of non-vested RSUs: Number of Shares Weighted Average Grant Date Fair Value Non-vested at March 31, 2019 243,134 $ 21.75 Granted 113,483 $ 18.61 Vested (151,182 ) $ 21.66 Forfeited (3,452 ) $ 21.10 Non-vested at March 31, 2020 201,983 $ 20.06 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Accumulated Other Comprehensive Loss | The changes in accumulated other comprehensive loss are as follows: March 31, 2020 March 31, 2019 Foreign Currency Translation Total Unrealized Gain on Short-Term Investments Foreign Currency Translation Total Balance at March 31, 2019 and 2018 $ (6,887,000 ) $ (6,887,000 ) $ 746,000 $ (6,174,000 ) $ (5,428,000 ) Cumulative-effect adjustment - - (746,000 ) - (746,000 ) Balance at April 1, 2019 and 2018 $ (6,887,000 ) $ (6,887,000 ) $ - $ (6,174,000 ) $ (6,174,000 ) Other comprehensive loss, net of tax (481,000 ) (481,000 ) - (713,000 ) (713,000 ) Balance at March 31, 2020 and 2019 $ (7,368,000 ) $ (7,368,000 ) $ - $ (6,887,000 ) $ (6,887,000 ) |
Unaudited Quarterly Financial_2
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Unaudited Quarterly Financial Data [Abstract] | |
Quarterly Financial Data | The following summarizes selected quarterly financial data for the year ended March 31, 2020. First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 109,148,000 $ 150,374,000 $ 125,574,000 $ 150,735,000 Cost of goods sold 91,565,000 113,801,000 97,913,000 114,152,000 Gross profit 17,583,000 36,573,000 27,661,000 36,583,000 Operating expenses: General and administrative 12,000,000 14,285,000 10,618,000 34,522,000 Sales and marketing 4,919,000 5,448,000 5,623,000 5,047,000 Research and development 2,372,000 2,148,000 2,174,000 2,506,000 Total operating expenses 19,291,000 21,881,000 18,415,000 42,075,000 Operating (loss) income (1,708,000 ) 14,692,000 9,246,000 (5,492,000 ) Other expense: Interest expense, net 6,173,000 6,523,000 6,879,000 5,464,000 (Loss) income before income tax (benefit) expense (7,881,000 ) 8,169,000 2,367,000 (10,956,000 ) Income tax (benefit) expense (1,730,000 ) 1,980,000 1,502,000 (2,763,000 ) Net (loss) income $ (6,151,000 ) $ 6,189,000 $ 865,000 $ (8,193,000 ) Basic net (loss) income per share $ (0.33 ) $ 0.33 $ 0.05 $ (0.43 ) Diluted net (loss) income per share $ (0.33 ) $ 0.32 $ 0.04 $ (0.43 ) The following summarizes selected quarterly financial data for the year ended March 31, 2019: First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 91,668,000 $ 127,939,000 $ 124,113,000 $ 129,077,000 Cost of goods sold 75,316,000 102,228,000 102,952,000 103,127,000 Gross profit 16,352,000 25,711,000 21,161,000 25,950,000 Operating expenses: General and administrative 12,091,000 8,997,000 12,331,000 12,553,000 Sales and marketing 4,392,000 4,537,000 5,149,000 5,464,000 Research and development 1,736,000 1,784,000 2,054,000 2,440,000 Total operating expenses 18,219,000 15,318,000 19,534,000 20,457,000 Operating (loss) income (1,867,000 ) 10,393,000 1,627,000 5,493,000 Other expense: Interest expense, net 5,075,000 5,699,000 5,764,000 6,689,000 (Loss) income before income tax (benefit) expense (6,942,000 ) 4,694,000 (4,137,000 ) (1,196,000 ) Income tax (benefit) expense (1,447,000 ) 1,181,000 (1,035,000 ) 1,569,000 Net (loss) income $ (5,495,000 ) $ 3,513,000 $ (3,102,000 ) $ (2,765,000 ) Basic net (loss) income per share $ (0.29 ) $ 0.19 $ (0.16 ) $ (0.15 ) Diluted net (loss) income per share $ (0.29 ) $ 0.18 $ (0.16 ) $ (0.15 ) |
Company Background and Organi_2
Company Background and Organization (Details) | Mar. 31, 2020ft² |
Company Background and Organization [Abstract] | |
Area of distribution center in Tijuana, Mexico | 410,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, Leases (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
New Accounting Pronouncements Recently Adopted [Abstract] | |||
Operating lease liabilities | $ 66,529,000 | ||
Operating lease assets | 53,029,000 | $ 0 | |
Loss in foreign currency-denominated lease liabilities | $ (11,710,000) | 0 | $ 0 |
ASU 2016-02 [Member] | |||
New Accounting Pronouncements Recently Adopted [Abstract] | |||
Operating lease liabilities | 53,043,000 | ||
Operating lease assets | $ 50,773,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Segment Reporting (Details) | 12 Months Ended |
Mar. 31, 2020Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Number of reportable segments | 1 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies, Inventory, Inventory Unreturned and Contract Assets (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Inventory - net [Abstract] | ||
Prior period over which allocations of labor and variable and fixed overhead costs are determined based on average actual use of production facilities | 12 months | |
Reserve for excess and obsolete inventory | $ 13,208,000 | $ 11,899,000 |
Inventory Unreturned [Abstract] | ||
Period of normal operating cycle | 1 year | |
Minimum [Member] | ||
Contract Assets [Abstract] | ||
Amortization period for core premiums | 6 years | |
Maximum [Member] | ||
Inventory - net [Abstract] | ||
Percentage of inventory reserve to cost if no liquidation market exists for part | 100.00% | |
Contract Assets [Abstract] | ||
Amortization period for core premiums | 8 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies, Income Taxes (Details) | Mar. 31, 2020USD ($) |
COVID-19 [Member] | |
Income Taxes [Abstract] | |
Income tax receivable | $ 1,002,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies, Plant and Equipment (Details) | 12 Months Ended |
Mar. 31, 2020 | |
Machinery and Equipment [Member] | Minimum [Member] | |
Plant and Equipment [Abstract] | |
Estimated service life | 5 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Plant and Equipment [Abstract] | |
Estimated service life | 10 years |
Office Equipment and Fixtures [Member] | Minimum [Member] | |
Plant and Equipment [Abstract] | |
Estimated service life | 3 years |
Office Equipment and Fixtures [Member] | Maximum [Member] | |
Plant and Equipment [Abstract] | |
Estimated service life | 10 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies, Intangible Assets and Goodwill (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 |
Goodwill [Abstract] | |||
Amount of goodwill | $ 3,205,000 | $ 3,205,000 | $ 2,551,000 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies, Foreign Currency Translation (Details) | 12 Months Ended |
Mar. 31, 2020USD ($) | |
General and Administrative Expenses [Member] | |
Foreign Currency Translation [Abstract] | |
Foreign currency transaction losses | $ 789,000 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies, Revenue Recognition (Details) - Maximum [Member] | 12 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition [Abstract] | |
Remanufactured cores nominal price (in dollars per core) | 0.01 |
Percentage of stock adjustment returns | 5.00% |
Percentage of aggregate returns | 20.00% |
Summary of Significant Accou_12
Summary of Significant Accounting Policies, Advertising Costs (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Advertising Costs [Abstract] | |||
Advertising expenses | $ 773,000 | $ 819,000 | $ 610,000 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies, Net Income Per Share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Reconciliation of basic and diluted net income (loss) per share [Abstract] | |||||||||||
Net (loss) income | $ (8,193,000) | $ 865,000 | $ 6,189,000 | $ (6,151,000) | $ (2,765,000) | $ (3,102,000) | $ 3,513,000 | $ (5,495,000) | $ (7,290,000) | $ (7,849,000) | $ 19,264,000 |
Basic shares (in shares) | 18,913,788 | 18,849,909 | 18,854,993 | ||||||||
Effect of dilutive stock options and warrants (in shares) | 0 | 0 | 659,782 | ||||||||
Diluted shares (in shares) | 18,913,788 | 18,849,909 | 19,514,775 | ||||||||
Net (loss) income per share [Abstract] | |||||||||||
Basic net (loss) income per share (in dollars per share) | $ (0.43) | $ 0.05 | $ 0.33 | $ (0.33) | $ (0.15) | $ (0.16) | $ 0.19 | $ (0.29) | $ (0.39) | $ (0.42) | $ 1.02 |
Diluted net (loss) income per share (in dollars per share) | $ (0.43) | $ 0.04 | $ 0.32 | $ (0.33) | $ (0.15) | $ (0.16) | $ 0.18 | $ (0.29) | $ (0.39) | $ (0.42) | $ 0.99 |
Options [Member] | |||||||||||
Antidilutive Securities [Abstract] | |||||||||||
Antidilutive securities excluded from effect of dilutive options and warrants (in shares) | 1,738,106 | 1,580,299 | 448,039 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies, Share-Based Payments (Details) - $ / shares | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Black-Scholes option pricing model assumptions used to derive the weighted average fair value of the stock options granted [Abstract] | |||
Weighted average risk free interest rate | 1.76% | 2.83% | 1.92% |
Weighted average expected holding period | 5 years 8 months 12 days | 5 years 11 months 8 days | 5 years 9 months 25 days |
Weighted average expected volatility | 42.50% | 43.91% | 47.28% |
Weighted average expected dividend yield | 0.00% | 0.00% | 0.00% |
Weighted average fair value of options granted (in dollars per share) | $ 8.27 | $ 8.75 | $ 12.63 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies, Deferred Compensation Plan (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Deferred Compensation Plan [Abstract] | |||
Short-term investments redeemed for the payment of deferred compensation liabilities | $ 2,802,000 | $ 0 | |
Net realized and unrealized gains on investment sold and still held | 96,000 | 89,000 | $ 0 |
Realized gains recognized on investments sold | 193,000 | ||
Unrealized losses recognized on investments held | (97,000) | ||
Carrying value of plan assets | 850,000 | 3,273,000 | |
Deferred compensation obligation | 850,000 | 3,273,000 | |
Expense related to the deferred compensation plan | 79,000 | $ 113,000 | $ 118,000 |
Executive Officer [Member] | |||
Deferred Compensation Plan [Abstract] | |||
Amount redeemed under deferred compensation plan | $ 1,432,000 | ||
Pay out period of deferred compensation | 24 months | ||
Deferred compensation, remaining unpaid amount | $ 1,295,000 | ||
Executive Officer [Member] | Accrued Liabilities [Member] | |||
Deferred Compensation Plan [Abstract] | |||
Deferred compensation, remaining unpaid amount | 714,000 | ||
Executive Officer [Member] | Other Liabilities [Member] | |||
Deferred Compensation Plan [Abstract] | |||
Deferred compensation, remaining unpaid amount | $ 581,000 |
Acquisitions, Mechanical Power
Acquisitions, Mechanical Power Conversion, LLC (Details) - USD ($) | Dec. 21, 2018 | Mar. 31, 2020 | Mar. 31, 2019 |
Business Acquisition [Abstract] | |||
Estimated useful life | 9 years | ||
Developed Technology [Member] | |||
Business Acquisition [Abstract] | |||
Estimated useful life | 5 years | ||
Customer Relationships [Member] | |||
Business Acquisition [Abstract] | |||
Estimated useful life | 11 years | ||
Order Backlog [Member] | |||
Business Acquisition [Abstract] | |||
Estimated useful life | 6 months | ||
Mechanical Power Conversion, LLC [Member] | |||
Business Acquisition [Abstract] | |||
Cash purchase price | $ 4,417,000 | ||
Working capital adjustment | 42,000 | ||
Contingent consideration | 3,560,000 | ||
Acquisition costs | $ 355,000 | ||
Mechanical Power Conversion, LLC [Member] | Minimum [Member] | |||
Business Acquisition [Abstract] | |||
Contingent consideration payment period | 2 years | ||
Mechanical Power Conversion, LLC [Member] | Maximum [Member] | |||
Business Acquisition [Abstract] | |||
Aggregate contingent consideration obligation | $ 5,200,000 | ||
Contingent consideration payment period | 3 years | ||
Mechanical Power Conversion, LLC [Member] | Developed Technology [Member] | |||
Business Acquisition [Abstract] | |||
Estimated useful life | 5 years | ||
Mechanical Power Conversion, LLC [Member] | Customer Relationships [Member] | |||
Business Acquisition [Abstract] | |||
Estimated useful life | 8 years | ||
Mechanical Power Conversion, LLC [Member] | Order Backlog [Member] | |||
Business Acquisition [Abstract] | |||
Estimated useful life | 6 months |
Acquisitions, Dixie Electric, L
Acquisitions, Dixie Electric, Ltd. (Details) - USD ($) | Jan. 09, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Business Acquisition [Abstract] | |||
Estimated useful life | 9 years | ||
Trademarks [Member] | |||
Business Acquisition [Abstract] | |||
Estimated useful life | 9 years | ||
Dixie Electric, Ltd [Member] | |||
Business Acquisition [Abstract] | |||
Cash purchase price | $ 8,049,000 | ||
Working capital adjustment | 71,000 | ||
Contingent consideration payment period | 2 years | ||
Contingent consideration | 840,000 | ||
Acquisition costs | $ 576,000 | ||
Dixie Electric, Ltd [Member] | Trademarks [Member] | |||
Business Acquisition [Abstract] | |||
Estimated useful life | 3 years | ||
Dixie Electric, Ltd [Member] | Maximum [Member] | |||
Business Acquisition [Abstract] | |||
Aggregate contingent consideration obligation | $ 1,130,000 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Goodwill (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill [Roll Forward] | ||
Balance at beginning of period | $ 3,205,000 | $ 2,551,000 |
Goodwill acquired | 0 | 654,000 |
Balance at end of period | $ 3,205,000 | $ 3,205,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Intangible Assets Subject to Amortization (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Intangible assets subject to amortization [Abstract] | ||
Weighted Average Amortization Period | 9 years | |
Gross Carrying Value | $ 12,097,000 | $ 12,933,000 |
Accumulated Amortization | 5,704,000 | 4,502,000 |
Fully amortized intangible assets, retired | $ 470,000 | |
Trademarks [Member] | ||
Intangible assets subject to amortization [Abstract] | ||
Weighted Average Amortization Period | 9 years | |
Gross Carrying Value | $ 827,000 | 1,007,000 |
Accumulated Amortization | $ 435,000 | 464,000 |
Customer Relationships [Member] | ||
Intangible assets subject to amortization [Abstract] | ||
Weighted Average Amortization Period | 11 years | |
Gross Carrying Value | $ 8,453,000 | 8,610,000 |
Accumulated Amortization | $ 4,376,000 | 3,547,000 |
Order Backlog [Member] | ||
Intangible assets subject to amortization [Abstract] | ||
Weighted Average Amortization Period | 6 months | |
Gross Carrying Value | $ 0 | 325,000 |
Accumulated Amortization | $ 0 | 180,000 |
Developed Technology [Member] | ||
Intangible assets subject to amortization [Abstract] | ||
Weighted Average Amortization Period | 5 years | |
Gross Carrying Value | $ 2,817,000 | 2,991,000 |
Accumulated Amortization | $ 893,000 | $ 311,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Amortization Expense (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Amortization expense for acquired intangible assets [Abstract] | |||
Amortization expense | $ 1,770,000 | $ 1,194,000 | $ 710,000 |
Estimated future amortization expense for intangible assets subject to amortization [Abstract] | |||
2021 | 1,479,000 | ||
2022 | 1,438,000 | ||
2023 | 1,408,000 | ||
2024 | 1,040,000 | ||
2025 | 471,000 | ||
Thereafter | 557,000 | ||
Total | $ 6,393,000 |
Accounts Receivable - Net (Deta
Accounts Receivable - Net (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Accounts Receivable, Net [Abstract] | ||
Accounts receivable - trade | $ 109,164,000 | $ 75,847,000 |
Allowance for bad debts | (4,252,000) | (4,100,000) |
Customer payment discrepancies | (1,040,000) | (854,000) |
Customer returns RGA issued | (12,124,000) | (14,878,000) |
Less: total accounts receivable offset accounts | (17,416,000) | (19,832,000) |
Total accounts receivable - net | $ 91,748,000 | $ 56,015,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Inventory - net [Abstract] | ||
Raw materials | $ 99,360,000 | $ 95,757,000 |
Work in process | 3,906,000 | 3,502,000 |
Finished goods | 135,601,000 | 146,366,000 |
Inventory, gross | 238,867,000 | 245,625,000 |
Less allowance for excess and obsolete inventory | (13,208,000) | (11,899,000) |
Total | 225,659,000 | 233,726,000 |
Inventory unreturned | $ 9,021,000 | $ 8,469,000 |
Contract Assets (Details)
Contract Assets (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Short-term contract assets [Abstract] | ||
Cores expected to be returned by customers | $ 12,579,000 | $ 14,671,000 |
Upfront payments to customers | 2,865,000 | 3,101,000 |
Core premiums paid to customers | 4,888,000 | 4,411,000 |
Total short-term contract assets | 20,332,000 | 22,183,000 |
Long-term contract assets [Abstract] | ||
Remanufactured cores held at customers' locations | 217,616,000 | 196,914,000 |
Upfront payments to customers | 589,000 | 2,775,000 |
Core premiums paid to customers | 15,766,000 | 16,618,000 |
Long-term core inventory deposits | 5,569,000 | 5,569,000 |
Total long-term contract assets | $ 239,540,000 | $ 221,876,000 |
Plant and Equipment (Details)
Plant and Equipment (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 84,484,000 | $ 69,474,000 |
Less accumulated depreciation | (39,527,000) | (34,323,000) |
Total | 44,957,000 | 35,151,000 |
Foreign Countries [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 35,410,000 | 25,608,000 |
Mexico [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 31,845,000 | 21,822,000 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 48,424,000 | 39,953,000 |
Office Equipment and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 25,541,000 | 20,070,000 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 10,519,000 | $ 9,451,000 |
Debt (Details)
Debt (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Amended Credit Facility [Abstract] | |||
Debt issuance costs | $ 973,000 | $ 1,815,000 | $ 462,000 |
Cash | 49,616,000 | 9,911,000 | |
Summarized information about the term loan [Abstract] | |||
Less current portion of term loan | (3,678,000) | (3,685,000) | |
Long-term portion of term loan | 20,462,000 | $ 24,187,000 | |
COVID-19 [Member] | |||
Amended Credit Facility [Abstract] | |||
Cash | $ 49,616,000 | ||
Revolving Facility [Member] | |||
Amended Credit Facility [Abstract] | |||
Interest rate at end of period | 3.64% | 5.24% | |
Credit for cash | $ 6,000,000 | ||
Term Loans [Member] | |||
Amended Credit Facility [Abstract] | |||
Quarterly principal payments | $ 937,500 | ||
Interest rate at end of period | 4.34% | 5.24% | |
Summarized information about the term loan [Abstract] | |||
Principal amount of term loan | $ 24,375,000 | $ 28,125,000 | |
Unamortized financing fees | (235,000) | (253,000) | |
Net carrying amount of term loan | 24,140,000 | 27,872,000 | |
Less current portion of term loan | (3,678,000) | (3,685,000) | |
Long-term portion of term loan | 20,462,000 | 24,187,000 | |
Future repayments of the Amended Term Loan, by fiscal year [Abstract] | |||
2021 | 3,750,000 | ||
2022 | 3,750,000 | ||
2023 | 3,750,000 | ||
2024 | 13,125,000 | ||
Total payments | 24,375,000 | 28,125,000 | |
Second Amended Credit Facility [Member] | |||
Amended Credit Facility [Abstract] | |||
Debt issuance costs | 973,000 | ||
Second Amended Credit Facility [Member] | Maximum [Member] | |||
Amended Credit Facility [Abstract] | |||
Maximum sale and lease back transactions | 5,000,000 | ||
Second Amended Credit Facility [Member] | Revolving Facility [Member] | |||
Amended Credit Facility [Abstract] | |||
Maximum borrowing capacity | 238,620,000 | ||
Outstanding balance under revolving loan | 152,000,000 | ||
Amount available under revolving facility | 58,461,000 | ||
Second Amended Credit Facility [Member] | Revolving Facility [Member] | Canadian Borrowers [Member] | |||
Amended Credit Facility [Abstract] | |||
Maximum borrowing capacity | 24,000,000 | ||
Second Amended Credit Facility [Member] | Revolving Facility [Member] | Letters of Credit [Member] | |||
Amended Credit Facility [Abstract] | |||
Maximum borrowing capacity | 20,000,000 | ||
Outstanding balance under revolving loan | 3,579,000 | ||
Second Amended Credit Facility [Member] | Revolving Facility [Member] | Swing Line Sublimit [Member] | |||
Amended Credit Facility [Abstract] | |||
Maximum borrowing capacity | $ 23,862,000 | ||
Credit Facility [Member] | |||
Amended Credit Facility [Abstract] | |||
Maximum borrowing capacity | 230,000,000 | ||
Debt instrument, maturity date | Jun. 5, 2023 | ||
Credit Facility [Member] | Minimum [Member] | |||
Amended Credit Facility [Abstract] | |||
Facility fee on total leverage ratio | 0.375% | ||
Credit Facility [Member] | Maximum [Member] | |||
Amended Credit Facility [Abstract] | |||
Dividend payments and share repurchases, annual maximum amount permitted | $ 20,000,000 | ||
Facility fee on total leverage ratio | 0.50% | ||
Credit Facility [Member] | LIBOR [Member] | |||
Amended Credit Facility [Abstract] | |||
Reference interest rate under option 1, floor | 2.25% | ||
Interest rate over LIBOR rate under option 1 | 2.50% | ||
Interest rate above base rate under option 2 | 2.75% | ||
Credit Facility [Member] | Reference Rate [Member] | |||
Amended Credit Facility [Abstract] | |||
Reference interest rate under option 1, floor | 1.25% | ||
Interest rate over LIBOR rate under option 1 | 1.50% | ||
Interest rate above base rate under option 2 | 1.75% | ||
Credit Facility [Member] | Revolving Facility [Member] | |||
Amended Credit Facility [Abstract] | |||
Maximum borrowing capacity | 200,000,000 | ||
Outstanding balance under revolving loan | 110,400,000 | ||
Credit Facility [Member] | Revolving Facility [Member] | Canadian Borrowers [Member] | |||
Amended Credit Facility [Abstract] | |||
Maximum borrowing capacity | 20,000,000 | ||
Credit Facility [Member] | Revolving Facility [Member] | Letters of Credit [Member] | |||
Amended Credit Facility [Abstract] | |||
Maximum borrowing capacity | 15,000,000 | ||
Credit Facility [Member] | Term Loans [Member] | |||
Amended Credit Facility [Abstract] | |||
Maximum borrowing capacity | $ 30,000,000 |
Contract Liabilities (Details)
Contract Liabilities (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Short-term contract liabilities [Abstract] | ||
Customer core returns accruals | $ 4,126,000 | $ 3,933,000 |
Customer allowances earned | 13,844,000 | 12,755,000 |
Customer deposits | 1,365,000 | 2,674,000 |
Core bank liability | 528,000 | 0 |
Accrued core payment, net | 8,048,000 | 11,237,000 |
Total short-term contract liabilities | 27,911,000 | 30,599,000 |
Long-term contract liabilities [Abstract] | ||
Customer core returns accruals | 77,927,000 | 25,722,000 |
Customer allowances earned | 542,000 | 0 |
Core bank liability | 7,556,000 | 0 |
Accrued core payment, net | 6,076,000 | 15,167,000 |
Total long-term contract liabilities | $ 92,101,000 | $ 40,889,000 |
Leases, General Information (De
Leases, General Information (Details) | 12 Months Ended | ||
Mar. 31, 2020USD ($)ft²Building | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | |
Leases [Abstract] | |||
Loss in foreign currency-denominated lease liabilities | $ (11,710,000) | $ 0 | $ 0 |
Maximum [Member] | |||
Leases [Abstract] | |||
Option to extend, term | 5 years | ||
Office and Manufacturing Equipment [Member] | Minimum [Member] | |||
Leases [Abstract] | |||
Finance leases term | 3 years | ||
Office and Manufacturing Equipment [Member] | Maximum [Member] | |||
Leases [Abstract] | |||
Finance leases term | 5 years | ||
Mexico [Member] | |||
Leases [Abstract] | |||
Number of buildings under lease not yet commenced | Building | 1 | ||
Lease expiration date | Dec. 31, 2032 | ||
Lease payments, lease not yet commenced | $ 12,538,000 | ||
Mexico [Member] | Remanufacturing Facility [Member] | |||
Leases [Abstract] | |||
Area of facility | ft² | 199,000 | ||
Increase in operating lease liability | $ 16,245,000 | ||
Canada [Member] | |||
Leases [Abstract] | |||
Number of buildings under lease not yet commenced | Building | 1 | ||
Lease expiration date | May 31, 2023 | ||
Lease payments, lease not yet commenced | $ 4,299,000 |
Leases, Balance Sheet Informati
Leases, Balance Sheet Information (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | |
Assets [Abstract] | |||
Operating, Operating lease assets | $ 53,029,000 | $ 0 | |
Finance, Plant and equipment | [1] | 6,922,000 | |
Total leased assets | 59,951,000 | ||
Capital lease assets | 5,403,000 | ||
Current [Abstract] | |||
Operating, Operating lease liabilities | 5,104,000 | 0 | |
Finance, Other current liabilities | 2,059,000 | ||
Long-term [Abstract] | |||
Operating, Long-term operating lease liabilities | 61,425,000 | $ 0 | |
Finance, Other liabilities | 3,905,000 | ||
Total lease liabilities | $ 72,493,000 | ||
[1] | The Company had $5,403,000 in capital lease assets included in plant and equipment at March 31, 2019. |
Leases, Cost Recogized in Conso
Leases, Cost Recogized in Consolidated Statement of Operations (Details) - USD ($) | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | ||
Lease cost [Abstract] | ||||
Operating lease cost | $ 8,733,000 | [1] | $ 6,188,000 | $ 4,362,000 |
Short-term lease cost | 1,263,000 | |||
Variable lease cost | 600,000 | |||
Finance lease cost: [Abstract] | ||||
Amortization of finance lease assets | 1,616,000 | |||
Interest on finance lease liabilities | 281,000 | |||
Total lease cost | $ 12,493,000 | |||
[1] | During the years ended March 31, 2019 and 2018, the Company incurred total operating lease expenses of $6,188,000 and $4,362,000, respectively. |
Leases, Maturities of Lease Com
Leases, Maturities of Lease Commitments, Operating and Finance Leases (Details) | Mar. 31, 2020USD ($) |
Operating Leases [Abstract] | |
2021 | $ 9,536,000 |
2022 | 8,755,000 |
2023 | 7,503,000 |
2024 | 7,261,000 |
2025 | 7,368,000 |
Thereafter | 59,837,000 |
Total lease payments | 100,260,000 |
Less amount representing interest | (33,731,000) |
Present value of lease liabilities | 66,529,000 |
Finance Leases [Abstract] | |
2021 | 2,292,000 |
2022 | 1,955,000 |
2023 | 1,325,000 |
2024 | 610,000 |
2025 | 243,000 |
Thereafter | 0 |
Total lease payments | 6,425,000 |
Less amount representing interest | (461,000) |
Present value of lease liabilities | 5,964,000 |
Total [Abstract] | |
2021 | 11,828,000 |
2022 | 10,710,000 |
2023 | 8,828,000 |
2024 | 7,871,000 |
2025 | 7,611,000 |
Thereafter | 59,837,000 |
Total lease payments | 106,685,000 |
Less amount representing interest | (34,192,000) |
Present value of lease liabilities | $ 72,493,000 |
Leases, Maturities of Lease C_2
Leases, Maturities of Lease Commitments, Operating and Capital Leases (Details) | Mar. 31, 2019USD ($) |
Operating Leases [Abstract] | |
2020 | $ 7,405,000 |
2021 | 8,206,000 |
2022 | 7,862,000 |
2023 | 6,726,000 |
2024 | 6,696,000 |
Thereafter | 65,321,000 |
Total lease payments | 102,216,000 |
Capital Leases [Abstract] | |
2020 | 1,755,000 |
2021 | 1,311,000 |
2022 | 1,040,000 |
2023 | 719,000 |
2024 | 89,000 |
Thereafter | 0 |
Total lease payments | 4,914,000 |
Less amount representing interest | (406,000) |
Present value of lease liabilities | 4,508,000 |
Total [Abstract] | |
2020 | 9,160,000 |
2021 | 9,517,000 |
2022 | 8,902,000 |
2023 | 7,445,000 |
2024 | 6,785,000 |
Thereafter | 65,321,000 |
Total lease payments | 107,130,000 |
Less amount representing interest | (406,000) |
Present value of lease liabilities | $ 106,724,000 |
Leases, Other Information (Deta
Leases, Other Information (Details) | Mar. 31, 2020 |
Weighted-average remaining lease term (years): [Abstract] | |
Finance leases | 3 years 2 months 12 days |
Operating leases | 12 years |
Weighted-average discount rate: [Abstract] | |
Finance leases | 4.70% |
Operating leases | 5.60% |
Accounts Receivable Discount _3
Accounts Receivable Discount Programs (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounts Receivable Discount Programs [Abstract] | ||
Receivables discounted | $ 461,484,000 | $ 396,650,000 |
Weighted average days | 346 days | 341 days |
Weighted average discount rate | 3.30% | 4.20% |
Amount of discount recognized as interest expense | $ 14,780,000 | $ 15,867,000 |
Financial Risk Management and_3
Financial Risk Management and Derivatives (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Foreign Currency Exchange Contract [Abstract] | |||
Forward foreign currency exchange contracts included in included other current liabilities | $ 6,284,000 | ||
Forward foreign currency exchange contracts included in prepaid and other current assets | $ 207,000 | ||
Forward Foreign Currency Exchange Contracts [Member] | |||
Foreign Currency Exchange Contract [Abstract] | |||
Notional amount of foreign currency derivatives | 42,052,000 | 32,524,000 | |
Forward Foreign Currency Exchange Contracts [Member] | General and Administrative Expenses [Member] | |||
Foreign Currency Exchange Contract [Abstract] | |||
Forward foreign currency exchange contracts | $ (6,491,000) | $ (972,000) | $ 752,000 |
Forward Foreign Currency Exchange Contracts [Member] | Maximum [Member] | |||
Foreign Currency Exchange Contract [Abstract] | |||
Derivative, term of contract | 1 year |
Fair Value Measurements (Detail
Fair Value Measurements (Details) | 12 Months Ended | |||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Jan. 09, 2019USD ($) | Dec. 21, 2018USD ($) | |
Forward Foreign Currency Exchange Contracts [Member] | ||||
Other liabilities [Abstract] | ||||
Net gain (loss) on forward foreign currency exchange contracts | $ (6,491,000) | $ (972,000) | ||
Contingent Consideration [Member] | ||||
Change in contingent consideration measured at fair value recurring basis using significant unobservable inputs (Level 3) [Roll Forward] | ||||
Beginning balance | 4,721,000 | 0 | ||
Newly issued | 0 | 4,400,000 | ||
Changes in revaluation of contingent consideration included in earnings | (113,000) | 321,000 | ||
Exercises/settlements | (1,955,000) | 0 | ||
Ending balance | $ 2,653,000 | $ 4,721,000 | ||
Two-year R&D Milestone Event [Member] | Risk Free Interest Rate [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.0016 | |||
Two-year R&D Milestone Event [Member] | Risk Free Interest Rate [Member] | Minimum [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.0230 | |||
Two-year R&D Milestone Event [Member] | Risk Free Interest Rate [Member] | Maximum [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.0241 | |||
Two-year R&D Milestone Event [Member] | Counter Party Rate [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.1216 | |||
Two-year R&D Milestone Event [Member] | Counter Party Rate [Member] | Minimum [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.0630 | |||
Two-year R&D Milestone Event [Member] | Counter Party Rate [Member] | Maximum [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.0641 | |||
Two-year R&D Milestone Event [Member] | Probability [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 1 | |||
Two-year R&D Milestone Event [Member] | Probability [Member] | Minimum [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.9 | |||
Two-year R&D Milestone Event [Member] | Probability [Member] | Maximum [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 1 | |||
Gross Profit Earn-out Consideration [Member] | Risk Free Interest Rate [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.0022 | 0.0223 | ||
Gross Profit Earn-out Consideration [Member] | Counter Party Rate [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.1222 | 0.0623 | ||
Gross Profit Earn-out Consideration [Member] | Expected Volatility [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.3100 | 0.2900 | ||
Gross Profit Earn-out Consideration [Member] | Weighted Average Cost of Capital [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.1375 | 0.1600 | ||
Mechanical Power Conversion, LLC [Member] | ||||
Contingent Consideration [Abstract] | ||||
Fair value of contingent consideration obligations | $ 3,560,000 | |||
Mechanical Power Conversion, LLC [Member] | Minimum [Member] | ||||
Contingent Consideration [Abstract] | ||||
Contingent consideration payment period | 2 years | |||
Mechanical Power Conversion, LLC [Member] | Maximum [Member] | ||||
Contingent Consideration [Abstract] | ||||
Aggregate contingent consideration obligation | $ 5,200,000 | |||
Contingent consideration payment period | 3 years | |||
Mechanical Power Conversion, LLC [Member] | Two-year R&D Milestone Event [Member] | ||||
Contingent Consideration [Abstract] | ||||
Fair value of contingent consideration obligations | $ 1,130,000 | $ 2,190,000 | ||
Term of R&D event milestone | 2 years | 2 years | ||
Mechanical Power Conversion, LLC [Member] | Gross Profit Earn-out Consideration [Member] | ||||
Contingent Consideration [Abstract] | ||||
Fair value of contingent consideration obligations | $ 1,230,000 | $ 1,660,000 | ||
Term of gross profit earn-out arrangement | 3 years | 3 years | ||
Dixie Electric, Ltd [Member] | ||||
Contingent Consideration [Abstract] | ||||
Fair value of contingent consideration obligations | $ 840,000 | |||
Contingent consideration payment period | 2 years | |||
Dixie Electric, Ltd [Member] | Maximum [Member] | ||||
Contingent Consideration [Abstract] | ||||
Aggregate contingent consideration obligation | $ 1,130,000 | |||
Dixie Electric, Ltd [Member] | Revenue Earn-out Consideration [Member] | ||||
Contingent Consideration [Abstract] | ||||
Fair value of contingent consideration obligations | $ 293,000 | $ 871,000 | ||
Term of revenue earn-out arrangement | 2 years | 2 years | ||
Dixie Electric, Ltd [Member] | Revenue Earn-out Consideration [Member] | Risk Free Interest Rate [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.0016 | 0.0258 | ||
Dixie Electric, Ltd [Member] | Revenue Earn-out Consideration [Member] | Counter Party Rate [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.1516 | 0.0503 | ||
Dixie Electric, Ltd [Member] | Revenue Earn-out Consideration [Member] | Revenue Discount Rate [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.0250 | 0.0650 | ||
Dixie Electric, Ltd [Member] | Revenue Earn-out Consideration [Member] | Expected Volatility [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.3350 | 0.2900 | ||
Dixie Electric, Ltd [Member] | Revenue Earn-out Consideration [Member] | Revenue Volatility [Member] | ||||
Fair Value Assumptions [Abstract] | ||||
Assumptions for fair value of contingent consideration | 0.0650 | 0.0850 | ||
Recurring [Member] | ||||
Short-Term Investments [Abstract] | ||||
Mutual funds | $ 850,000 | $ 3,273,000 | ||
Prepaid Expense and Other Current Assets [Abstract] | ||||
Forward foreign currency exchange contracts | 0 | 207,000 | ||
Accrued liabilities [Abstract] | ||||
Short-term contingent consideration | 2,190,000 | 2,816,000 | ||
Other current liabilities [Abstract] | ||||
Deferred compensation | 850,000 | 3,273,000 | ||
Forward foreign currency exchange contracts | 6,284,000 | 0 | ||
Other liabilities [Abstract] | ||||
Long-term contingent consideration | 463,000 | 1,905,000 | ||
Recurring [Member] | Level 1 [Member] | ||||
Short-Term Investments [Abstract] | ||||
Mutual funds | 850,000 | 3,273,000 | ||
Prepaid Expense and Other Current Assets [Abstract] | ||||
Forward foreign currency exchange contracts | 0 | 0 | ||
Accrued liabilities [Abstract] | ||||
Short-term contingent consideration | 0 | 0 | ||
Other current liabilities [Abstract] | ||||
Deferred compensation | 850,000 | 3,273,000 | ||
Forward foreign currency exchange contracts | 0 | 0 | ||
Other liabilities [Abstract] | ||||
Long-term contingent consideration | 0 | 0 | ||
Recurring [Member] | Level 2 [Member] | ||||
Short-Term Investments [Abstract] | ||||
Mutual funds | 0 | 0 | ||
Prepaid Expense and Other Current Assets [Abstract] | ||||
Forward foreign currency exchange contracts | 0 | 207,000 | ||
Accrued liabilities [Abstract] | ||||
Short-term contingent consideration | 0 | 0 | ||
Other current liabilities [Abstract] | ||||
Deferred compensation | 0 | 0 | ||
Forward foreign currency exchange contracts | 6,284,000 | 0 | ||
Other liabilities [Abstract] | ||||
Long-term contingent consideration | 0 | 0 | ||
Recurring [Member] | Level 3 [Member] | ||||
Short-Term Investments [Abstract] | ||||
Mutual funds | 0 | 0 | ||
Prepaid Expense and Other Current Assets [Abstract] | ||||
Forward foreign currency exchange contracts | 0 | 0 | ||
Accrued liabilities [Abstract] | ||||
Short-term contingent consideration | 2,190,000 | 2,816,000 | ||
Other current liabilities [Abstract] | ||||
Deferred compensation | 0 | 0 | ||
Forward foreign currency exchange contracts | 0 | 0 | ||
Other liabilities [Abstract] | ||||
Long-term contingent consideration | $ 463,000 | $ 1,905,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | ||
Change in warranty return accrual [Roll Forward] | ||||
Balance at beginning of period | $ 19,475,000 | $ 16,646,000 | $ 14,286,000 | |
Acquisition | [1] | 0 | 221,000 | 0 |
Charged to expense | 112,590,000 | 111,321,000 | 105,156,000 | |
Amounts processed | (113,765,000) | (108,713,000) | (102,796,000) | |
Balance at end of period | $ 18,300,000 | 19,475,000 | 16,646,000 | |
Contingencies [Abstract] | ||||
Estimated additional import duties | 17,000,000 | |||
Commitments to Provide Marketing Allowances under Long-Term Customer Contracts [Abstract] | ||||
Term of long-term agreements with major customer | 4 years | |||
Breakout of allowances recorded as reduction to revenues [Abstract] | ||||
Allowances incurred under long-term customer contracts | $ 26,733,000 | 29,612,000 | 24,829,000 | |
Allowances related to a single exchange of product | 97,408,000 | 92,588,000 | 79,851,000 | |
Amortization of core premiums paid to customers | 4,501,000 | 4,127,000 | 3,588,000 | |
Total customer allowances recorded as a reduction of revenues | 128,642,000 | $ 126,327,000 | $ 108,268,000 | |
Marketing Allowances, Fiscal Year Maturity [Abstract] | ||||
2021 | 25,896,000 | |||
2022 | 5,838,000 | |||
2023 | 4,701,000 | |||
2024 | 2,859,000 | |||
2025 | 2,052,000 | |||
Thereafter | 2,667,000 | |||
Total marketing allowances | $ 44,013,000 | |||
[1] | Warranty reserve established in the opening balance sheet in connection with the Company's Dixie acquisition. |
Significant Customer and Othe_3
Significant Customer and Other Information (Details) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Net Sales [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 100.00% | 100.00% | 100.00% |
Net Sales [Member] | Rotating Electrical Products [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 73.00% | 79.00% | 78.00% |
Net Sales [Member] | Wheel Hub Products [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 15.00% | 15.00% | 17.00% |
Net Sales [Member] | Brake-Related Products [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 9.00% | 3.00% | 3.00% |
Net Sales [Member] | Other Products [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 3.00% | 3.00% | 2.00% |
Net Sales [Member] | Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 38.00% | 38.00% | 41.00% |
Net Sales [Member] | Customer B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 20.00% | 22.00% | 25.00% |
Net Sales [Member] | Customer C [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 26.00% | 23.00% | 19.00% |
Accounts Receivable - Trade [Member] | Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 28.00% | 34.00% | |
Accounts Receivable - Trade [Member] | Customer B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 14.00% | 18.00% | |
Accounts Receivable - Trade [Member] | Customer C [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 33.00% | 16.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Current tax expense [Abstract] | |||||||||||
Federal | $ 5,313,000 | $ 680,000 | $ 12,187,000 | ||||||||
State | 1,454,000 | 647,000 | 1,425,000 | ||||||||
Foreign | 1,566,000 | 1,723,000 | 1,194,000 | ||||||||
Total current tax expense | 8,333,000 | 3,050,000 | 14,806,000 | ||||||||
Deferred tax (benefit) expense [Abstract] | |||||||||||
Federal | (4,516,000) | (2,087,000) | 949,000 | ||||||||
State | (1,567,000) | (295,000) | 393,000 | ||||||||
Foreign | (3,261,000) | (400,000) | (23,000) | ||||||||
Total deferred tax (benefit) expense | (9,344,000) | (2,782,000) | 1,319,000 | ||||||||
Total income tax (benefit) expense | $ (2,763,000) | $ 1,502,000 | $ 1,980,000 | $ (1,730,000) | $ 1,569,000 | $ (1,035,000) | $ 1,181,000 | $ (1,447,000) | (1,011,000) | $ 268,000 | $ 16,125,000 |
COVID-19 [Member] | |||||||||||
COVID [Abstract] | |||||||||||
Income tax receivable | $ 1,002,000 | $ 1,002,000 |
Income Taxes, Components of Def
Income Taxes, Components of Deferred Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Assets [Abstract] | |||
Allowance for bad debts | $ 1,037,000 | $ 1,005,000 | |
Customer allowances earned | 3,549,000 | 3,177,000 | |
Allowance for stock adjustment returns | 1,743,000 | 2,073,000 | |
Inventory adjustments | 5,567,000 | 3,701,000 | |
Stock options | 2,427,000 | 2,221,000 | |
Operating lease liabilities | 19,396,000 | [1] | 0 |
Estimate for returns | 10,839,000 | 2,107,000 | |
Accrued compensation | 1,964,000 | 1,578,000 | |
Net operating losses | 4,091,000 | 2,088,000 | |
Tax credits | 1,343,000 | 1,495,000 | |
Other | 1,620,000 | 5,776,000 | |
Total deferred tax assets | 53,576,000 | 25,221,000 | |
Liabilities [Abstract] | |||
Plant and equipment, net | (5,175,000) | (3,316,000) | |
Intangibles, net | (4,700,000) | (5,390,000) | |
Operating lease | (15,371,000) | [1] | 0 |
Other | (3,966,000) | (3,278,000) | |
Total deferred tax liabilities | (29,212,000) | (11,984,000) | |
Less valuation allowance | (5,493,000) | (3,748,000) | |
Total | 18,871,000 | $ 9,489,000 | |
Operating Loss Carryforwards and Tax Credit Carryforward [Abstract] | |||
Tax credits carryforward | $ 1,343,000 | ||
Tax credits carryforward, expiration date | Mar. 31, 2032 | ||
State [Member] | |||
Operating Loss Carryforwards and Tax Credit Carryforward [Abstract] | |||
Operating loss carryforwards | $ 1,689,000 | ||
Operating loss carryforwards, expiration date | Mar. 31, 2034 | ||
Foreign [Member] | |||
Operating Loss Carryforwards and Tax Credit Carryforward [Abstract] | |||
Operating loss carryforwards | $ 14,953,000 | ||
Operating loss carryforwards, expiration date | Mar. 31, 2038 | ||
[1] | Adoption of the new lease standard as of April 1, 2019 (see Note 2) resulted in the recognition of a deferred tax asset for operating lease liabilities and a deferred tax liability for operating lease assets. These temporary differences will reverse over the estimated term of the relevant operating leases. As of March 31, 2019, the deferred tax assets associated with operating leases were reported as other deferred tax assets under legacy US GAAP. |
Income Taxes, Statutory Rate an
Income Taxes, Statutory Rate and Effective Tax Rate Reconcilation (Details) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Difference between income tax expense at the federal statutory rate and effective tax rate [Abstract] | |||
Statutory federal income tax rate | 21.00% | 21.00% | 31.50% |
State income tax rate, net of federal benefit | (3.70%) | (3.70%) | 3.60% |
Excess tax benefit from stock compensation | (1.30%) | 0.70% | (0.70%) |
Foreign income taxed at different rates | 13.80% | 0.00% | (2.60%) |
Return to provision adjustments | (1.50%) | 0.00% | 0.00% |
Warrants | 0.00% | 0.00% | (2.10%) |
Non-deductible executive compensation | (4.00%) | (7.30%) | 1.00% |
Change in valuation allowance | (18.70%) | (15.30%) | 4.80% |
Net operating loss carryback | 4.80% | 0.00% | 0.00% |
Effects of mandatory redeemed repatriation | 0.00% | 0.00% | 1.50% |
Effects of U.S. tax rate changes | 0.00% | 0.30% | 8.00% |
Uncertain tax positions | 2.10% | 1.80% | 0.60% |
Research and development credit | 1.10% | 1.30% | (0.20%) |
Non-deductible transaction costs | 0.00% | (2.10%) | 0.00% |
Other income tax | (1.40%) | (0.20%) | 0.20% |
Effective tax rate | 12.20% | (3.50%) | 45.60% |
Income Taxes, Unrecognized Tax
Income Taxes, Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Unrecognized tax benefits [Roll Forward] | |||
Balance at beginning of period | $ 1,083,000 | $ 1,219,000 | $ 1,092,000 |
Additions based on tax positions related to the current year | 362,000 | 91,000 | 234,000 |
Reductions for tax positions of prior year | (434,000) | (227,000) | (107,000) |
Balance at end of period | 1,011,000 | 1,083,000 | 1,219,000 |
Unrecognized tax benefits that would impact effective tax rate | 823,000 | 938,000 | 1,054,000 |
Recognized interest and penalties | (50,000) | (23,000) | $ 5,000 |
Interest and penalties accrued | $ 74,000 | $ 124,000 |
Defined Contribution Plans (Det
Defined Contribution Plans (Details) - 401 (K) Plan [Member] - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Minimum age required to participate in defined contribution plan | 21 years | ||
Minimum service period required to participate in defined contribution plan | 6 months | ||
Employer's matching contribution | 50.00% | ||
Employer's maximum contribution specified as percentage of employee compensation | 6.00% | ||
Matching contributions vesting period | 5 years | ||
Matching contribution, amount | $ 496,000 | $ 445,000 | $ 389,000 |
Share-based Payments (Details)
Share-based Payments (Details) - shares | Mar. 31, 2020 | Mar. 31, 2019 |
2004 Non-Employee Director Stock Option Plan [Member] | ||
Share-based Compensation Description [Abstract] | ||
Shares of common stock available for grant (in shares) | 0 | 0 |
Option to purchase common stock, outstanding (in shares) | 51,000 | 63,000 |
2010 Incentive Award Plan [Member] | ||
Share-based Compensation Description [Abstract] | ||
Common stock shares reserved for grants (in shares) | 3,950,000 | |
Shares of common stock available for grant (in shares) | 629,823 | 1,040,728 |
Option to purchase common stock, outstanding (in shares) | 1,485,123 | 1,274,165 |
2010 Incentive Award Plan [Member] | Restricted Stock Units [Member] | ||
Share-based Compensation Description [Abstract] | ||
Number of shares issued (in shares) | 148,199 | 127,896 |
2010 Incentive Award Plan [Member] | Restricted Shares [Member] | ||
Share-based Compensation Description [Abstract] | ||
Number of shares issued (in shares) | 0 | 75,000 |
2014 Non-Employee Director Incentive Award Plan [Member] | ||
Share-based Compensation Description [Abstract] | ||
Common stock shares reserved for grants (in shares) | 342,000 | |
Shares of common stock available for grant (in shares) | 143,909 | 201,084 |
2014 Non-Employee Director Incentive Award Plan [Member] | Restricted Stock Units [Member] | ||
Share-based Compensation Description [Abstract] | ||
Number of shares issued (in shares) | 53,784 | 40,238 |
Share-based Payments, Stock Opt
Share-based Payments, Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, shares (in shares) | 1,536,123 | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 18.18 | ||
Options outstanding, weighted average remaining life | 5 years 11 months 26 days | ||
Options outstanding, aggregate intrinsic value | $ 2,567,000 | ||
Options exercisable, shares (in shares) | 1,022,925 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 17.10 | ||
Options exercisable, weighted average remaining life | 4 years 7 months 13 days | ||
Options exercisable, aggregate intrinsic value | $ 2,567,000 | ||
$5.20 to $6.47 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price of options, lower range (in dollars per share) | $ 5.20 | ||
Exercise price of options, upper range (in dollars per share) | $ 6.47 | ||
Options outstanding, shares (in shares) | 311,634 | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 6.46 | ||
Options outstanding, weighted average remaining life | 2 years 9 months | ||
Options exercisable, shares (in shares) | 311,634 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 6.46 | ||
Options exercisable, weighted average remaining life | 2 years 9 months | ||
$6.48 to $18.20 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price of options, lower range (in dollars per share) | $ 6.48 | ||
Exercise price of options, upper range (in dollars per share) | $ 18.20 | ||
Options outstanding, shares (in shares) | 223,600 | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 10.19 | ||
Options outstanding, weighted average remaining life | 3 years 7 months 10 days | ||
Options exercisable, shares (in shares) | 204,300 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 9.58 | ||
Options exercisable, weighted average remaining life | 3 years 22 days | ||
$18.21 to $22.83 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price of options, lower range (in dollars per share) | $ 18.21 | ||
Exercise price of options, upper range (in dollars per share) | $ 22.83 | ||
Options outstanding, shares (in shares) | 524,251 | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 19.56 | ||
Options outstanding, weighted average remaining life | 8 years 9 months 7 days | ||
Options exercisable, shares (in shares) | 83,183 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 19.17 | ||
Options exercisable, weighted average remaining life | 8 years 2 months 23 days | ||
$22.84 to $28.04 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price of options, lower range (in dollars per share) | $ 22.84 | ||
Exercise price of options, upper range (in dollars per share) | $ 28.04 | ||
Options outstanding, shares (in shares) | 216,499 | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 26.19 | ||
Options outstanding, weighted average remaining life | 6 years 5 months 8 days | ||
Options exercisable, shares (in shares) | 163,669 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 25.82 | ||
Options exercisable, weighted average remaining life | 6 years 2 months 5 days | ||
$28.05 to $34.17 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price of options, lower range (in dollars per share) | $ 28.05 | ||
Exercise price of options, upper range (in dollars per share) | $ 34.17 | ||
Options outstanding, shares (in shares) | 260,139 | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ 29.61 | ||
Options outstanding, weighted average remaining life | 5 years 11 months 8 days | ||
Options exercisable, shares (in shares) | 260,139 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 29.61 | ||
Options exercisable, weighted average remaining life | 5 years 11 months 8 days | ||
Stock Options [Member] | |||
Number of Shares [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 1,337,165 | ||
Granted (in shares) | 302,539 | ||
Exercised (in shares) | (59,600) | ||
Forfeited (in shares) | (43,981) | ||
Outstanding at end of period (in shares) | 1,536,123 | 1,337,165 | |
Weighted Average Exercise Price [Roll Forward] | |||
Outstanding at beginning of period (in dollars per share) | $ 17.58 | ||
Granted (in dollars per share) | 19.72 | ||
Exercised (in dollars per share) | 7.65 | ||
Forfeited (in dollars per share) | 24.98 | ||
Outstanding at end of period (in dollars per share) | $ 18.18 | $ 17.58 | |
Number of stock options unvested (in shares) | 513,198 | ||
Weighted average exercise price of stock options unvested (in dollars per share) | $ 20.32 | ||
Pre-tax intrinsic value of options exercised | $ 508,000 | $ 788,000 | $ 913,000 |
Fair value of vested stock options | $ 2,189,000 | $ 1,973,000 | $ 1,572,000 |
Closing stock price (in dollars per share) | $ 12.58 | ||
Total unrecognized compensation expense, options | $ 2,883,000 | ||
Weighted average vesting period over which compensation expense is expected to be recognized | 1 year 9 months 18 days |
Share-based Payments, Restricte
Share-based Payments, Restricted Stock Units (Details) - Restricted Stock [Member] | 12 Months Ended | |
Mar. 31, 2020USD ($)Installment$ / sharesshares | Mar. 31, 2019USD ($)$ / sharesshares | |
Number of Shares [Roll Forward] | ||
Non-vested at beginning of period (in shares) | 243,134 | |
Granted (in shares) | 113,483 | 179,725 |
Vested (in shares) | (151,182) | |
Forfeited (in shares) | (3,452) | |
Non-vested at end of period (in shares) | 201,983 | 243,134 |
Weighted Average Grant Date Fair Value [Roll Forward] | ||
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 21.75 | |
Granted (in dollars per share) | $ / shares | 18.61 | |
Vested (in dollars per share) | $ / shares | 21.66 | |
Forfeited (in dollars per share) | $ / shares | 21.10 | |
Non-vested at end of period (in dollars per share) | $ / shares | $ 20.06 | $ 21.75 |
Estimated fair value of awards granted | $ | $ 2,112,000 | $ 3,490,000 |
Number of equal annual installments in which awards vest | Installment | 3 | |
Number of shares withheld (in shares) | 58,802 | 14,959 |
Total unrecognized compensation expense, restricted stock | $ | $ 2,643,000 | |
Weighted average vesting period over which compensation expense is expected to be recognized | 1 year 10 months 24 days |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Accumulated Other Comprehensive Loss [Abstract] | |||
Beginning balance | $ 279,755,000 | $ 286,880,000 | |
Adjusted beginning balance | 286,880,000 | ||
Other comprehensive loss, net of tax | (481,000) | (713,000) | |
Ending balance | 275,520,000 | 279,755,000 | |
ASU 2016-01 [Member] | |||
Accumulated Other Comprehensive Loss [Abstract] | |||
Cumulative-effect adjustment | $ 0 | ||
Accumulated Other Comprehensive Loss [Member] | |||
Accumulated Other Comprehensive Loss [Abstract] | |||
Beginning balance | (6,887,000) | (5,428,000) | |
Adjusted beginning balance | (6,887,000) | (6,174,000) | |
Ending balance | (7,368,000) | (6,887,000) | |
Accumulated Other Comprehensive Loss [Member] | ASU 2016-01 [Member] | |||
Accumulated Other Comprehensive Loss [Abstract] | |||
Cumulative-effect adjustment | 0 | (746,000) | |
Unrealized Gain on Short-Term Investments [Member] | |||
Accumulated Other Comprehensive Loss [Abstract] | |||
Beginning balance | 0 | 746,000 | |
Adjusted beginning balance | 0 | ||
Other comprehensive loss, net of tax | 0 | ||
Ending balance | 0 | ||
Unrealized Gain on Short-Term Investments [Member] | ASU 2016-01 [Member] | |||
Accumulated Other Comprehensive Loss [Abstract] | |||
Cumulative-effect adjustment | (746,000) | ||
Foreign Currency Translation [Member] | |||
Accumulated Other Comprehensive Loss [Abstract] | |||
Beginning balance | (6,887,000) | (6,174,000) | |
Adjusted beginning balance | (6,887,000) | (6,174,000) | |
Other comprehensive loss, net of tax | (481,000) | (713,000) | |
Ending balance | $ (7,368,000) | (6,887,000) | |
Foreign Currency Translation [Member] | ASU 2016-01 [Member] | |||
Accumulated Other Comprehensive Loss [Abstract] | |||
Cumulative-effect adjustment | $ 0 | $ 0 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Apr. 30, 2020 | Jun. 15, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | |
COVID-19 [Abstract] | ||||
Receivables sales collected | $ 461,484,000 | $ 396,650,000 | ||
Interest expense associated with accounts receivable sales | $ 14,780,000 | $ 15,867,000 | ||
Subsequent Event [Member] | COVID-19 [Member] | ||||
COVID-19 [Abstract] | ||||
Receivables sales collected | $ 59,730,000 | |||
Interest expense associated with accounts receivable sales | $ 1,552,000 | |||
Subsequent Event [Member] | COVID-19 [Member] | Minimum [Member] | ||||
COVID-19 [Abstract] | ||||
Percentage reduction in base salary | 25.00% |
Unaudited Quarterly Financial_3
Unaudited Quarterly Financial Data (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Unaudited Quarterly Financial Data [Abstract] | |||||||||||
Net sales | $ 150,735,000 | $ 125,574,000 | $ 150,374,000 | $ 109,148,000 | $ 129,077,000 | $ 124,113,000 | $ 127,939,000 | $ 91,668,000 | $ 535,831,000 | $ 472,797,000 | $ 427,548,000 |
Cost of goods sold | 114,152,000 | 97,913,000 | 113,801,000 | 91,565,000 | 103,127,000 | 102,952,000 | 102,228,000 | 75,316,000 | 417,431,000 | 383,623,000 | 320,515,000 |
Gross profit | 36,583,000 | 27,661,000 | 36,573,000 | 17,583,000 | 25,950,000 | 21,161,000 | 25,711,000 | 16,352,000 | 118,400,000 | 89,174,000 | 107,033,000 |
Operating expenses [Abstract] | |||||||||||
General and administrative | 34,522,000 | 10,618,000 | 14,285,000 | 12,000,000 | 12,553,000 | 12,331,000 | 8,997,000 | 12,091,000 | 71,425,000 | 45,972,000 | 35,477,000 |
Sales and marketing | 5,047,000 | 5,623,000 | 5,448,000 | 4,919,000 | 5,464,000 | 5,149,000 | 4,537,000 | 4,392,000 | 21,037,000 | 19,542,000 | 15,030,000 |
Research and development | 2,506,000 | 2,174,000 | 2,148,000 | 2,372,000 | 2,440,000 | 2,054,000 | 1,784,000 | 1,736,000 | 9,200,000 | 8,014,000 | 5,692,000 |
Total operating expenses | 42,075,000 | 18,415,000 | 21,881,000 | 19,291,000 | 20,457,000 | 19,534,000 | 15,318,000 | 18,219,000 | 101,662,000 | 73,528,000 | 56,199,000 |
Operating income | (5,492,000) | 9,246,000 | 14,692,000 | (1,708,000) | 5,493,000 | 1,627,000 | 10,393,000 | (1,867,000) | 16,738,000 | 15,646,000 | 50,834,000 |
Other expense [Abstract] | |||||||||||
Interest expense, net | 5,464,000 | 6,879,000 | 6,523,000 | 6,173,000 | 6,689,000 | 5,764,000 | 5,699,000 | 5,075,000 | 25,039,000 | 23,227,000 | 15,445,000 |
(Loss) income before income tax (benefit) expense | (10,956,000) | 2,367,000 | 8,169,000 | (7,881,000) | (1,196,000) | (4,137,000) | 4,694,000 | (6,942,000) | (8,301,000) | (7,581,000) | 35,389,000 |
Income tax (benefit) expense | (2,763,000) | 1,502,000 | 1,980,000 | (1,730,000) | 1,569,000 | (1,035,000) | 1,181,000 | (1,447,000) | (1,011,000) | 268,000 | 16,125,000 |
Net (loss) income | $ (8,193,000) | $ 865,000 | $ 6,189,000 | $ (6,151,000) | $ (2,765,000) | $ (3,102,000) | $ 3,513,000 | $ (5,495,000) | $ (7,290,000) | $ (7,849,000) | $ 19,264,000 |
Basic net (loss) income per share (in dollars per share) | $ (0.43) | $ 0.05 | $ 0.33 | $ (0.33) | $ (0.15) | $ (0.16) | $ 0.19 | $ (0.29) | $ (0.39) | $ (0.42) | $ 1.02 |
Diluted net (loss) income per share (in dollars per share) | $ (0.43) | $ 0.04 | $ 0.32 | $ (0.33) | $ (0.15) | $ (0.16) | $ 0.18 | $ (0.29) | $ (0.39) | $ (0.42) | $ 0.99 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) | 12 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |||
Accounts Receivable - Allowance for Doubtful Accounts [Member] | |||||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||||
Balance at beginning of period | $ 4,100,000 | $ 4,142,000 | $ 4,140,000 | ||
Charged to cost and expense | 610,000 | 224,000 | 21,000 | ||
Acquisition | 0 | 63,000 | [1] | 0 | |
Amounts written off | 458,000 | 329,000 | 19,000 | ||
Balance at end of period | 4,252,000 | 4,100,000 | 4,142,000 | ||
Accounts Receivable - Allowance for Customer-Payment Discrepancies [Member] | |||||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||||
Balance at beginning of period | 854,000 | 1,110,000 | 751,000 | ||
Charged to cost and expense | 1,626,000 | 731,000 | 998,000 | ||
Acquisition | 0 | 0 | 0 | ||
Amounts written off | 1,440,000 | 987,000 | 639,000 | ||
Balance at end of period | 1,040,000 | 854,000 | 1,110,000 | ||
Inventory - Allowance for Excess and Obsolete Inventory [Member] | |||||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||||
Balance at beginning of period | 11,899,000 | 6,682,000 | 4,125,000 | ||
Charged to cost and expense | 13,372,000 | 11,153,000 | 8,491,000 | ||
Acquisition | 0 | 0 | 77,000 | [2] | |
Amounts written off | 12,063,000 | 5,936,000 | 6,011,000 | ||
Balance at end of period | $ 13,208,000 | $ 11,899,000 | $ 6,682,000 | ||
[1] | Allowance for doubtful accounts established in the opening balance sheet in connection with the Company's January 2019 acquisition. | ||||
[2] | Allowance for excess and obsolete inventory established in the opening balance sheet in connection with the Company's July 2017 acquisition. |