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Revenue Recognition (Tables) | 3 Months Ended
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Jun. 30, 2018
Revenue Recognition [Abstract] |
Impact of New Revenue Recognition Standard on Previously Reported Financial Statements | The adoption of the new revenue recognition standard impacted the previously reported consolidated statement of operations for the three months ended June 30, 2017 as follows:
|  | Three Months Ended June 30, 2017 |
|  | As Previously Reported |  |  | Adoption of ASU 2014-09 |  |  | As Adjusted |
Net sales |  | $ | 95,063,000 |  |  | $ | 456,000 |  |  | $ | 95,519,000 |
Cost of goods sold |  |  | 69,224,000 |  |  |  | (381,000 | ) |  |  | 68,843,000 |
Gross profit |  |  | 25,839,000 |  |  |  | 837,000 |  |  |  | 26,676,000 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |
General and administrative |  |  | 6,187,000 |  |  |  | - |  |  |  | 6,187,000 |
Sales and marketing |  |  | 3,394,000 |  |  |  | - |  |  |  | 3,394,000 |
Research and development |  |  | 1,002,000 |  |  |  | - |  |  |  | 1,002,000 |
Total operating expenses |  |  | 10,583,000 |  |  |  | - |  |  |  | 10,583,000 |
Operating income |  |  | 15,256,000 |  |  |  | 837,000 |  |  |  | 16,093,000 |
Interest expense, net |  |  | 3,314,000 |  |  |  | - |  |  |  | 3,314,000 |
Income before income tax expense |  |  | 11,942,000 |  |  |  | 837,000 |  |  |  | 12,779,000 |
Income tax expense |  |  | 4,316,000 |  |  |  | 312,000 |  |  |  | 4,628,000 |
Net income |  | $ | 7,626,000 |  |  | $ | 525,000 |  |  | $ | 8,151,000 |
Basic net income per share |  | $ | 0.41 |  |  | $ | 0.03 |  |  | $ | 0.44 |
Diluted net income per share |  | $ | 0.39 |  |  | $ | 0.03 |  |  | $ | 0.42 |
The adoption of the new revenue recognition standard impacted the previously reported consolidated balance sheet at March 31, 2018 as follows:
|  | March 31, 2018 |
|  | As Previously Reported |  |  | Adoption of ASU 2014-09 |  |  | As Adjusted |
ASSETS |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 13,049,000 |  |  | $ | - |  |  | $ | 13,049,000 |
Short-term investments |  |  | 2,828,000 |  |  |  | - |  |  |  | 2,828,000 |
Accounts receivable — net |  |  | 15,738,000 |  |  |  | 47,436,000 |  |  |  | 63,174,000 |
Inventory— net |  |  | 76,275,000 |  |  |  | 84,935,000 |  |  |  | 161,210,000 |
Inventory unreturned |  |  | 7,508,000 |  |  |  | - |  |  |  | 7,508,000 |
Contract assets |  |  | - |  |  |  | 15,614,000 |  |  |  | 15,614,000 |
Income tax receivable |  |  | 7,796,000 |  |  |  | - |  |  |  | 7,796,000 |
Prepaid expenses and other current assets |  |  | 11,491,000 |  |  |  | - |  |  |  | 11,491,000 |
Total current assets |  |  | 134,685,000 |  |  |  | 147,985,000 |  |  |  | 282,670,000 |
Plant and equipment — net |  |  | 28,322,000 |  |  |  | - |  |  |  | 28,322,000 |
Long-term core inventory — net |  |  | 301,656,000 |  |  |  | (301,656,000 | ) |  |  | - |
Long-term core inventory deposits |  |  | 5,569,000 |  |  |  | (5,569,000 | ) |  |  | - |
Long-term deferred income taxes |  |  | 10,556,000 |  |  |  | (239,000 | ) |  |  | 10,317,000 |
Long-term contract assets |  |  | - |  |  |  | 205,998,000 |  |  |  | 205,998,000 |
Goodwill |  |  | 2,551,000 |  |  |  | - |  |  |  | 2,551,000 |
Intangible assets — net |  |  | 3,766,000 |  |  |  | - |  |  |  | 3,766,000 |
Other assets |  |  | 7,392,000 |  |  |  | - |  |  |  | 7,392,000 |
TOTAL ASSETS |  | $ | 494,497,000 |  |  | $ | 46,519,000 |  |  | $ | 541,016,000 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 73,273,000 |  |  | $ | - |  |  | $ | 73,273,000 |
Accrued liabilities |  |  | 11,799,000 |  |  |  | - |  |  |  | 11,799,000 |
Customer finished goods returns accrual |  |  | 17,805,000 |  |  |  | - |  |  |  | 17,805,000 |
Accrued core payment |  |  | 16,536,000 |  |  |  | (16,536,000 | ) |  |  | - |
Contract liabilities |  |  | - |  |  |  | 32,603,000 |  |  |  | 32,603,000 |
Revolving loan |  |  | 54,000,000 |  |  |  | - |  |  |  | 54,000,000 |
Other current liabilities |  |  | 4,471,000 |  |  |  | - |  |  |  | 4,471,000 |
Current portion of term loan |  |  | 3,068,000 |  |  |  | - |  |  |  | 3,068,000 |
Total current liabilities |  |  | 180,952,000 |  |  |  | 16,067,000 |  |  |  | 197,019,000 |
Term loan, less current portion |  |  | 13,913,000 |  |  |  | - |  |  |  | 13,913,000 |
Long-term accrued core payment |  |  | 18,473,000 |  |  |  | (18,473,000 | ) |  |  | - |
Long-term deferred income taxes |  |  | 226,000 |  |  |  | - |  |  |  | 226,000 |
Long-term contract liabilities |  |  | - |  |  |  | 48,183,000 |  |  |  | 48,183,000 |
Other liabilities |  |  | 5,957,000 |  |  |  | - |  |  |  | 5,957,000 |
Total liabilities |  |  | 219,521,000 |  |  |  | 45,777,000 |  |  |  | 265,298,000 |
Commitments and contingencies |  |  |  |  |  |  |  |  |  |  |  |
Shareholders’ equity: |  |  |  |  |  |  |  |  |  |  |  |
Preferred stock; par value $.01 per share, 5,000,000 shares authorized; none issued |  |  | - |  |  |  | - |  |  |  | - |
Series A junior participating preferred stock; par value $.01 per share, 20,000 shares authorized; none issued |  |  | - |  |  |  | - |  |  |  | - |
Common stock; par value $.01 per share, 50,000,000 shares authorized; 18,893,102 shares issued and outstanding at March 31, 2018 |  |  | 189,000 |  |  |  | - |  |  |  | 189,000 |
Additional paid-in capital |  |  | 213,609,000 |  |  |  | - |  |  |  | 213,609,000 |
Retained earnings |  |  | 66,606,000 |  |  |  | 742,000 |  |  |  | 67,348,000 |
Accumulated other comprehensive loss |  |  | (5,428,000 | ) |  |  | - |  |  |  | (5,428,000 | )
Total shareholders’ equity |  |  | 274,976,000 |  |  |  | 742,000 |  |  |  | 275,718,000 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |  | $ | 494,497,000 |  |  | $ | 46,519,000 |  |  | $ | 541,016,000 |
The adoption of the new revenue recognition standard impacted the previously reported statement of cash flows for the three months ended June 30, 2017 as follows:
|  | Three Months Ended June 30, 2017 |
Cash flows from operating activities: |  | As Previously Reported |  |  | Adoption of ASU 2014-09 |  |  | As Adjusted |
Net income |  | $ | 7,626,000 |  |  | $ | 525,000 |  |  | $ | 8,151,000 |
Adjustments to reconcile net income to net cash used in operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation |  |  | 894,000 |  |  |  | - |  |  |  | 894,000 |
Amortization of intangible assets |  |  | 145,000 |  |  |  | - |  |  |  | 145,000 |
Amortization and write-off of debt issuance costs |  |  | 213,000 |  |  |  | - |  |  |  | 213,000 |
Amortization of interest on accrued core payments |  |  | 143,000 |  |  |  | - |  |  |  | 143,000 |
Gain due to change in fair value of the warrant liability |  |  | (1,293,000 | ) |  |  | - |  |  |  | (1,293,000 | )
Net provision for inventory reserves |  |  | 1,286,000 |  |  |  | - |  |  |  | 1,286,000 |
Net provision for customer payment discrepancies |  |  | 284,000 |  |  |  | - |  |  |  | 284,000 |
Net recovery of doubtful accounts |  |  | (9,000 | ) |  |  | - |  |  |  | (9,000 | )
Deferred income taxes |  |  | (103,000 | ) |  |  | 312,000 |  |  |  | 209,000 |
Share-based compensation expense |  |  | 834,000 |  |  |  | - |  |  |  | 834,000 |
Loss on disposal of plant and equipment |  |  | 6,000 |  |  |  | - |  |  |  | 6,000 |
Changes in operating assets and liabilities, net of effects of acquisitions: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | 16,038,000 |  |  |  | (6,705,000 | ) |  |  | 9,333,000 |
Inventory |  |  | (14,942,000 | ) |  |  | (3,552,000 | ) |  |  | (18,494,000 | )
Inventory unreturned |  |  | (120,000 | ) |  |  | - |  |  |  | (120,000 | )
Income tax receivable |  |  | 1,686,000 |  |  |  | - |  |  |  | 1,686,000 |
Prepaid expenses and other current assets |  |  | (1,265,000 | ) |  |  | - |  |  |  | (1,265,000 | )
Other assets |  |  | 608,000 |  |  |  | - |  |  |  | 608,000 |
Accounts payable and accrued liabilities |  |  | (5,254,000 | ) |  |  | - |  |  |  | (5,254,000 | )
Customer finished goods returns accrual |  |  | (3,790,000 | ) |  |  | - |  |  |  | (3,790,000 | )
Long-term core inventory |  |  | (2,878,000 | ) |  |  | 2,878,000 |  |  |  | - |
Contract assets, net |  |  | - |  |  |  | 293,000 |  |  |  | 293,000 |
Contract liabilities, net |  |  | - |  |  |  | 3,172,000 |  |  |  | 3,172,000 |
Accrued core payments |  |  | (3,077,000 | ) |  |  | 3,077,000 |  |  |  | - |
Other liabilities |  |  | 2,324,000 |  |  |  | - |  |  |  | 2,324,000 |
Net cash used in operating activities |  |  | (644,000 | ) |  |  | - |  |  |  | (644,000 | )
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |
Purchase of plant and equipment |  |  | (597,000 | ) |  |  | - |  |  |  | (597,000 | )
Change in short-term investments |  |  | (173,000 | ) |  |  | - |  |  |  | (173,000 | )
Net cash used in investing activities |  |  | (770,000 | ) |  |  | - |  |  |  | (770,000 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |  |  |  |  |
Borrowings under revolving loan |  |  | 17,000,000 |  |  |  | - |  |  |  | 17,000,000 |
Repayments of revolving loan |  |  | (13,000,000 | ) |  |  | - |  |  |  | (13,000,000 | )
Repayments of term loan |  |  | (782,000 | ) |  |  | - |  |  |  | (782,000 | )
Payments for debt issuance costs |  |  | (398,000 | ) |  |  | - |  |  |  | (398,000 | )
Payments on capital lease obligations |  |  | (190,000 | ) |  |  | - |  |  |  | (190,000 | )
Exercise of stock options |  |  | 295,000 |  |  |  | - |  |  |  | 295,000 |
Cash used to net share settle equity awards |  |  | (488,000 | ) |  |  | - |  |  |  | (488,000 | )
Repurchase of common stock, including fees |  |  | (1,979,000 | ) |  |  | - |  |  |  | (1,979,000 | )
Net cash provided by financing activities |  |  | 458,000 |  |  |  | - |  |  |  | 458,000 |
Effect of exchange rate changes on cash and cash equivalents |  |  | 47,000 |  |  |  | - |  |  |  | 47,000 |
Net decrease in cash and cash equivalents |  |  | (909,000 | ) |  |  | - |  |  |  | (909,000 | )
Cash and cash equivalents — Beginning of period |  |  | 9,029,000 |  |  |  | - |  |  |  | 9,029,000 |
Cash and cash equivalents — End of period |  | $ | 8,120,000 |  |  | $ | - |  |  | $ | 8,120,000 |

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