Fair Value Measurements

6 Months Ended

Sep. 30, 2017

13. Fair Value Measurements

The following summarizes the Company’s financial assets and liabilities measured at fair value, by level within the fair value hierarchy:

	September 30, 2017								March 31, 2017
			Fair Value Measurements Using Inputs Considered as								Fair Value Measurements Using Inputs Considered as
	Fair Value		Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3
Assets
Short-term investments
Mutual funds	$	2,568,000	$	2,568,000		-		-	$	2,140,000	$	2,140,000		-		-
Prepaid expenses and other current assets
Forward foreign currency exchange contracts		1,149,000		-	$	1,149,000		-		427,000		-	$	427,000		-

Liabilities
Other current liabilities
Deferred compensation		2,568,000		2,568,000		-		-		2,140,000		2,140,000		-		-
Other liabilities
Warrant liability		-		-		-		-		11,879,000		-		-	$	11,879,000

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 three months ended September 30, 2017 and 2016, a loss of $330,000 and $507,000, respectively, was recorded in general and administrative expenses due to the change in the value of the forward foreign currency exchange contracts. During the six months ended September 30, 2017 and 2016, a gain of $722,000 and a loss of $1,186,000, respectively, were recorded in general and administrative expenses due to the change in the value of the forward foreign currency exchange contracts.

Level 3 Fair Value Measurements

The following summarizes the activity for Level 3 fair value measurements:

	Three Months Ended September 30,										Six Months Ended September 30,
	2017					2016					2017					2016
	Supplier Warrant			Contingent Consideration		Supplier Warrant		Contingent Consideration			Supplier Warrant			Contingent Consideration		Supplier Warrant			Contingent Consideration
Beginning balance	$	10,586,000		$	-	$	10,054,000	$	314,000		$	11,879,000		$	-	$	15,643,000		$	330,000
Newly issued		-			-		-		-			-			-		-			-
Total (gain) loss included in net income (loss)		(1,020,000	)		-		824,000		-			(2,313,000	)		-		(4,765,000	)		(16,000	)
Exercises/settlements (1)		(9,566,000	)		-		-		(314,000	)		(9,566,000	)		-		-			(314,000	)
Net transfers in (out) of Level 3		-			-		-		-			-			-		-			-
Ending balance	$	-		$	-	$	10,878,000	$	-		$	-		$	-	$	10,878,000		$	-

(1)	Represents the fair value of the Supplier Warrant as of the exercise date (see Note 8).

During the three and six months ended September 30, 2017, 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.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details