x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 36-3154957 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification Number) | |
750 North Commons Drive, Aurora, IL | 60504 | |
(Address of principal executive offices) | (Zip Code) |
Large Accelerated Filer | ¨ | Accelerated Filer | ¨ | |||
Non-Accelerated Filer | ¨ | Smaller Reporting Company | x | |||
Emerging Growth Company | ¨ |
Page No. | ||
Item 1. | Financial Statements | |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
(unaudited) | |||||||
June 30, 2018 | March 31, 2018 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 24,497 | $ | 24,963 | |||
Short-term investments | 1,346 | 2,779 | |||||
Accounts receivable (net of allowance of $165 and $95 at June 30, 2018 and March 31, 2018, respectively) | 10,571 | 8,872 | |||||
Inventories | 9,727 | 9,222 | |||||
Prepaid expenses and other current assets | 1,283 | 816 | |||||
Total current assets | 47,424 | 46,652 | |||||
Land, property and equipment, gross | 8,239 | 8,381 | |||||
Less accumulated depreciation and amortization | (6,741 | ) | (6,780 | ) | |||
Land, property and equipment, net | 1,498 | 1,601 | |||||
Intangible assets, net | 10,445 | 11,435 | |||||
Tax receivable, non-current | 697 | 697 | |||||
Other non-current assets | 74 | 74 | |||||
Total assets | $ | 60,138 | $ | 60,459 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,256 | $ | 1,903 | |||
Accrued expenses | 3,053 | 3,328 | |||||
Accrued restructuring | 14 | 63 | |||||
Deferred revenue | 1,516 | 1,790 | |||||
Total current liabilities | 6,839 | 7,084 | |||||
Deferred revenue non-current | 599 | 846 | |||||
Other non-current liabilities | 229 | 234 | |||||
Total liabilities | 7,667 | 8,164 | |||||
Commitments and contingencies (Note 10) | |||||||
Stockholders’ equity: | |||||||
Class A common stock, par $0.01, Authorized – 109,000,000 shares Outstanding – 12,164,858 and 12,145,743 shares at June 30, 2018, and March 31, 2018, respectively | 122 | 121 | |||||
Class B common stock, par $0.01, Authorized – 25,000,000 shares Issued and outstanding – 3,484,287 shares at June 30, 2018, and March 31, 2018 | 35 | 35 | |||||
Preferred stock, par $0.01, Authorized – 1,000,000 shares Issued and outstanding – none | — | — | |||||
Additional paid-in capital | 417,980 | 417,691 | |||||
Treasury stock at cost – 4,767,428 and 4,633,871 shares at June 30, 2018, and March 31, 2018, respectively | (36,311 | ) | (35,907 | ) | |||
Accumulated deficit | (329,355 | ) | (329,645 | ) | |||
Total stockholders’ equity | 52,471 | 52,295 | |||||
Total liabilities and stockholders’ equity | $ | 60,138 | $ | 60,459 |
Three months ended June 30, | ||||||||
2018 | 2017 | |||||||
Revenue | 13,037 | 16,574 | ||||||
Cost of revenue | 7,102 | 9,807 | ||||||
Gross profit | 5,935 | 6,767 | ||||||
Operating expenses | ||||||||
Research and development | 1,432 | 2,276 | ||||||
Sales and marketing | 2,137 | 2,336 | ||||||
General and administrative | 1,534 | 1,711 | ||||||
Intangible amortization | 990 | 1,047 | ||||||
Total operating expenses | 6,093 | 7,370 | ||||||
Operating profit (loss) | (158 | ) | (603 | ) | ||||
Other income, net | 119 | 43 | ||||||
Income (loss) before income taxes | (39 | ) | (560 | ) | ||||
Income tax benefit (expense) | — | (12 | ) | |||||
Net income (loss) | $ | (39 | ) | $ | (572 | ) | ||
Net income (loss) per share: | ||||||||
Basic | $ | — | $ | (0.04 | ) | |||
Diluted | $ | — | $ | (0.04 | ) | |||
Weighted-average number of common shares outstanding: | ||||||||
Basic | 15,632 | 15,481 | ||||||
Effect of dilutive securities: restricted stock, restricted stock units, performance stock units and stock options (1) | — | — | ||||||
Diluted | 15,632 | 15,481 |
Three months ended June 30, | |||||||
2018 | 2017 | ||||||
Net income (loss) | $ | (39 | ) | $ | (572 | ) | |
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustment | — | — | |||||
Total comprehensive income (loss) | $ | (39 | ) | $ | (572 | ) |
Common Stock Class A | Common Stock Class B | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||
Balance, March 31, 2018 | $ | 121 | $ | 35 | $ | 417,691 | $ | (35,907 | ) | $ | (329,645 | ) | $ | 52,295 | |||||||||
Cumulative effect adjustment ASC 606 adoption | — | — | — | — | 329 | 329 | |||||||||||||||||
Net income (loss) | — | — | — | — | (39 | ) | (39 | ) | |||||||||||||||
Common stock issued | 2 | — | (2 | ) | — | — | — | ||||||||||||||||
Purchase of treasury stock | (1 | ) | — | — | (404 | ) | — | (405 | ) | ||||||||||||||
Stock-based compensation | — | — | 291 | — | — | 291 | |||||||||||||||||
Balance, June 30, 2018 | $ | 122 | $ | 35 | $ | 417,980 | $ | (36,311 | ) | $ | (329,355 | ) | $ | 52,471 |
Three months ended June 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (39 | ) | $ | (572 | ) | |
Reconciliation of net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 1,142 | 1,277 | |||||
Stock-based compensation | 291 | 330 | |||||
Deferred taxes | — | 7 | |||||
Exchange rate loss (gain) | 10 | (4 | ) | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (1,705 | ) | 1,748 | ||||
Inventories | (505 | ) | 321 | ||||
Prepaid expenses and other current assets | (467 | ) | 228 | ||||
Other assets | — | 7 | |||||
Deferred revenue | (192 | ) | (1) | (677 | ) | ||
Accounts payable and accrued expenses | 24 | (220 | ) | ||||
Net cash provided by (used in) operating activities | (1,441 | ) | 2,445 | ||||
Cash flows from investing activities: | |||||||
Maturities of other short-term investments | 1,433 | — | |||||
Purchases of property and equipment | (50 | ) | (155 | ) | |||
Net cash provided by (used in) investing activities | 1,383 | (155 | ) | ||||
Cash flows from financing activities: | |||||||
Purchases of treasury stock | (405 | ) | (374 | ) | |||
Net cash provided by (used in) financing activities | (405 | ) | (374 | ) | |||
Gain (loss) of exchange rate changes on cash | (3 | ) | (6 | ) | |||
Net increase (decrease) in cash and cash equivalents | (466 | ) | 1,910 | ||||
Cash and cash equivalents, beginning of period | 24,963 | 21,778 | |||||
Cash and cash equivalents, end of period | $ | 24,497 | $ | 23,688 |
(in thousands) | As reported March 31, 2018 | Adjustments due to ASC 606 | Adjusted as of April 1, 2018 | |||||
Assets: | ||||||||
Prepaid expenses and other current assets | 816 | 72 | 888 | |||||
Liabilities: | ||||||||
Accrued expenses | 3,328 | 72 | 3,400 | |||||
Deferred revenue | 1,790 | (110 | ) | 1,680 | ||||
Deferred revenue non-current | 846 | (219 | ) | 627 | ||||
Stockholders' Equity: | ||||||||
Accumulated deficit | (329,645 | ) | 329 | (329,316 | ) |
(in thousands) | As of June 30, 2018 | |||||||
As reported under ASC 606 | Effect of Change Increase/ (Decrease) | Proforma under ASC 605 | ||||||
Assets: | ||||||||
Prepaid expenses and other current assets | 1,283 | (73 | ) | 1,210 | ||||
Liabilities: | ||||||||
Accrued expenses | 3,053 | (73 | ) | 2,980 | ||||
Deferred revenue | 1,516 | 110 | 1,626 | |||||
Deferred revenue non-current | 599 | 192 | 791 | |||||
Stockholders' Equity: | ||||||||
Accumulated deficit | (329,355 | ) | (302 | ) | (329,657 | ) |
(in thousands) | For the three months ended June 30, 2018 | ||||||||
As reported under ASC 606 | Effect of Change Increase/ (Decrease) | Proforma under ASC 605 | |||||||
Revenue | $ | 13,037 | 27 | 13,064 | |||||
Gross Profit | 5,935 | 27 | 5,962 | ||||||
Net income (loss) | $ | (39 | ) | 27 | (12 | ) |
(In thousands) | Three months ended June 30, | ||||||
2018 (under ASC 606) | 2017 (under ASC 605) | ||||||
Revenue: | |||||||
Products | $ | 11,789 | $ | 14,784 | |||
Software | 416 | 761 | |||||
Services | 832 | 1,029 | |||||
Total revenue | $ | 13,037 | $ | 16,574 |
< 1 year | 1-2 years | > 2 years | ||||||
Deferred Revenue | 1,516 | 304 | 295 |
Three months ended June 30, 2018 | |||||||||||
(in thousands) | Employee-related | Other costs | Total | ||||||||
Liability at beginning of period | $ | — | $ | 63 | $ | 63 | |||||
Charged | — | — | — | ||||||||
Paid | — | (49 | ) | (49 | ) | ||||||
Liability at end of period | $ | — | $ | 14 | $ | 14 |
Three months ended June 30, 2018 | ||||||||||||||||
(in thousands) | IBW | ISM | CNS | Total | ||||||||||||
Revenue | $ | 3,557 | $ | 5,744 | $ | 3,736 | $ | 13,037 | ||||||||
Cost of revenue | 1,895 | 2,796 | 2,411 | 7,102 | ||||||||||||
Gross profit | 1,662 | 2,948 | 1,325 | 5,935 | ||||||||||||
Gross margin | 46.7 | % | 51.3 | % | 35.5 | % | 45.5 | % | ||||||||
Research and development | 522 | 569 | 341 | 1,432 | ||||||||||||
Segment profit | $ | 1,140 | $ | 2,379 | $ | 984 | 4,503 | |||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 2,137 | |||||||||||||||
General and administrative | 1,534 | |||||||||||||||
Intangible amortization | 990 | |||||||||||||||
Operating profit (loss) | (158 | ) | ||||||||||||||
Other income, net | 119 | |||||||||||||||
Income tax benefit (expense) | — | |||||||||||||||
Net income (loss) | $ | (39 | ) | |||||||||||||
Three months ended June 30, 2017 | ||||||||||||||||
(in thousands) | IBW | ISM | CNS | Total | ||||||||||||
Revenue | $ | 6,956 | $ | 4,130 | $ | 5,488 | $ | 16,574 | ||||||||
Cost of revenue | 3,942 | 2,004 | 3,861 | 9,807 | ||||||||||||
Gross profit | 3,014 | 2,126 | 1,627 | 6,767 | ||||||||||||
Gross margin | 43.3 | % | 51.5 | % | 29.6 | % | 40.8 | % | ||||||||
Research and development | 1,463 | 565 | 248 | 2,276 | ||||||||||||
Segment profit (loss) | $ | 1,551 | $ | 1,561 | $ | 1,379 | 4,491 | |||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 2,336 | |||||||||||||||
General and administrative | 1,711 | |||||||||||||||
Intangible amortization | 1,047 | |||||||||||||||
Operating profit (loss) | (603 | ) | ||||||||||||||
Other income, net | 43 | |||||||||||||||
Income tax benefit (expense) | (12 | ) | ||||||||||||||
Net income (loss) | $ | (572 | ) |
(in thousands) | June 30, 2018 | March 31, 2018 | |||||
Raw materials | $ | 3,264 | $ | 2,969 | |||
Finished goods | 6,463 | 6,253 | |||||
Total inventories | $ | 9,727 | $ | 9,222 |
Three months ended June 30, | |||||||
(in thousands) | 2018 | 2017 | |||||
Stock-based compensation expense | $ | 291 | $ | 330 | |||
Income tax benefit | — | — | |||||
Total stock-based compensation expense, after taxes | $ | 291 | $ | 330 |
Shares | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (1) (in thousands) | |||||||||
Outstanding on March 31, 2018 | 197,936 | $ | 4.87 | 4.4 | $ | 56 | ||||||
Granted | 100,000 | 3.14 | ||||||||||
Exercised | — | — | ||||||||||
Forfeited | (1,251 | ) | 4.66 | |||||||||
Expired | (499 | ) | 4.82 | |||||||||
Outstanding on June 30, 2018 | 296,186 | $ | 4.29 | 5.1 | $ | 31 |
(1) | The intrinsic value for the stock options is calculated based on the difference between the exercise price of the underlying awards and the Westell Technologies’ closing stock price as of the respective reporting date. |
Shares | Weighted-Average Grant Date Fair Value | |||||
Non-vested as of March 31, 2018 | 62,761 | $ | 3.35 | |||
Granted | — | — | ||||
Vested | (1,875 | ) | 15.30 | |||
Forfeited | — | — | ||||
Non-vested as of June 30, 2018 | 60,886 | $ | 2.98 |
Shares | Weighted-Average Grant Date Fair Value | |||||
Non-vested as of March 31, 2018 | 518,450 | $ | 3.03 | |||
Granted | 331,500 | 3.20 | ||||
Vested | (152,672 | ) | 3.30 | |||
Forfeited | (32,085 | ) | 2.81 | |||
Non-vested as of June 30, 2018 | 665,193 | $ | 3.07 |
Shares | Weighted-Average Grant Date Fair Value | |||||
Non-vested as of March 31, 2018 (at target) | — | $ | — | |||
Granted, at target | 50,000 | 3.14 | ||||
Vested | — | — | ||||
Forfeited | (5,000 | ) | 3.14 | |||
Non-vested as of June 30, 2018 (at target) | 45,000 | $ | 3.14 |
Three months ended June 30, | |||||||
(in thousands) | 2018 | 2017 | |||||
Total product warranty reserve at the beginning of the period | $ | 300 | $ | 395 | |||
Warranty expense to cost of revenue | 20 | 13 | |||||
Utilization | (30 | ) | (23 | ) | |||
Total product warranty reserve at the end of the period | $ | 290 | $ | 385 |
• | Level 1 – Quoted prices in active markets for identical assets and liabilities. |
• | Level 2 – Quoted prices in active markets for similar assets and liabilities, 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 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
(in thousands) | Total Fair Value of Asset or Liability | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance Sheet Classification | ||||||||||
Assets: | |||||||||||||||
Money market funds | $ | 20,779 | $ | 20,779 | — | — | Cash and cash equivalents |
(in thousands) | Total Fair Value of Asset or Liability | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance Sheet Classification | ||||||||||
Assets: | |||||||||||||||
Money market funds | $ | 19,237 | $ | 19,237 | — | — | Cash and cash equivalents |
(in thousands) | June 30, 2018 | March 31, 2018 | |||||
Accrued compensation | $ | 597 | $ | 772 | |||
Accrued contractual obligation | 1,445 | 1,445 | |||||
Other accrued expenses | 1,011 | 1,111 | |||||
Total accrued expenses | $ | 3,053 | $ | 3,328 |
(in thousands) | June 30, 2018 | March 31, 2018 | |||||
Land | $ | 672 | $ | 672 | |||
Machinery and equipment | 1,296 | 1,296 | |||||
Office, computer and research equipment | 5,224 | 5,175 | |||||
Leasehold improvements | 1,047 | 1,238 | |||||
Land, property and equipment, gross | 8,239 | 8,381 | |||||
Less accumulated depreciation and amortization | (6,741 | ) | (6,780 | ) | |||
Land, property and equipment, net | $ | 1,498 | $ | 1,601 |
Three months ended June 30, | |||||||||||
(in thousands) | 2018 | 2017 | Change | ||||||||
IBW | $ | 3,557 | $ | 6,956 | $ | (3,399 | ) | ||||
ISM | 5,744 | 4,130 | 1,614 | ||||||||
CNS | 3,736 | 5,488 | (1,752 | ) | |||||||
Consolidated revenue | $ | 13,037 | $ | 16,574 | $ | (3,537 | ) |
Three months ended June 30, | ||||||||
2018 | 2017 | Change | ||||||
IBW | 46.7 | % | 43.3 | % | 3.4 | % | ||
ISM | 51.3 | % | 51.5 | % | (0.2 | )% | ||
CNS | 35.5 | % | 29.6 | % | 5.9 | % | ||
Consolidated gross margin | 45.5 | % | 40.8 | % | 4.7 | % |
Three months ended June 30, | |||||||||||
(in thousands) | 2018 | 2017 | Change | ||||||||
IBW | $ | 522 | $ | 1,463 | $ | (941 | ) | ||||
ISM | 569 | 565 | 4 | ||||||||
CNS | 341 | 248 | 93 | ||||||||
Consolidated research and development expense | $ | 1,432 | $ | 2,276 | $ | (844 | ) |
Three months ended June 30, | |||||||||||
(in thousands) | 2018 | 2017 | Change | ||||||||
Consolidated sales and marketing expense | $ | 2,137 | $ | 2,336 | $ | (199 | ) |
Three months ended June 30, | |||||||||||
(in thousands) | 2018 | 2017 | Change | ||||||||
Consolidated general and administrative expense | $ | 1,534 | $ | 1,711 | $ | (177 | ) |
Three months ended June 30, | |||||||||||
(in thousands) | 2018 | 2017 | Change | ||||||||
Consolidated intangible amortization | $ | 990 | $ | 1,047 | $ | (57 | ) |
Three months ended June 30, | |||||||||||
(in thousands) | 2018 | 2017 | Change | ||||||||
Consolidated other income (expense) | $ | 119 | $ | 43 | $ | 76 |
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs (b) | Maximum Number (or Approximate Dollar Value) that May Yet Be Purchased Under the Programs (b) | ||||||||||
April 2018 | 46,752 | $ | 3.3500 | — | $ | 1,715,121 | ||||||||
May 2018 | 10,553 | 2.9313 | 7,817 | 1,692,532 | ||||||||||
June 2018 | 76,252 | 2.8491 | 74,530 | 1,480,102 | ||||||||||
Total | 133,557 | $ | 3.0309 | 82,347 | $ | 1,480,102 |
(a) | In the three months ended June 30, 2018, the Company repurchased 51,210 shares from employees that were surrendered to satisfy the minimum statutory tax withholding obligations on the vesting of restricted stock, restricted stock units and performance-based restricted stock units. These repurchases were not included in the authorized share repurchase program and had a weighted-average purchase price of $3.32 per share. |
(b) | In May 2017, the Board of Directors authorized a share repurchase program whereby the Company may repurchase up to an aggregate of $2.0 million of its outstanding Class A Common Stock in addition to the $0.1 million remaining from the August 2011 authorization. The August 2011 authorization was exhausted during the first quarter of fiscal year 2018 and there was approximately $1.5 million remaining under the May 2017 authorization as of June 30, 2018. |
Exhibit Number | Description | ||
Exhibit 31.1 | |||
Exhibit 31.2 | |||
Exhibit 32.1 | |||
Exhibit 101 | The following financial information from the Quarterly Report on Form 10-Q for the period ended June 30, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss); (iv) the Condensed Consolidated Statements of Stockholders' Equity (v) the Condensed Consolidated Statements of Cash Flows; and (vi) the Notes to the Condensed Consolidated Financial Statements. |
WESTELL TECHNOLOGIES, INC. | ||||
(Registrant) | ||||
DATE: | August 3, 2018 | By: | /s/ Alfred S. John | |
Alfred S. John | ||||
Chief Executive Officer | ||||
By: | /s/ Thomas P. Minichiello | |||
Thomas P. Minichiello | ||||
Chief Financial Officer |
/s/ Alfred S. John |
Alfred S. John |
Chief Executive Officer |
/s/ Thomas P. Minichiello |
Thomas P. Minichiello |
Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of and for the periods covered in the Report. |
/s/ Alfred S. John |
Alfred S. John |
Chief Executive Officer |
August 3, 2018 |
/s/ Thomas P. Minichiello |
Thomas P. Minichiello |
Chief Financial Officer |
August 3, 2018 |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 27, 2018 |
|
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | WESTELL TECHNOLOGIES INC | |
Entity Central Index Key | 0001002135 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Smaller Reporting Company | |
Class A Common Stock | ||
Entity Common Stock, Shares Outstanding | 12,132,053 | |
Class B Common Stock | ||
Entity Common Stock, Shares Outstanding | 3,484,287 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Mar. 31, 2018 |
---|---|---|
Accounts receivable, allowance | $ 165 | $ 95 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock, shares | 4,767,428 | 4,633,871 |
Class A Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 109,000,000 | 109,000,000 |
Common stock, shares outstanding | 12,164,858 | 12,145,743 |
Class B Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 3,484,287 | 3,484,287 |
Common stock, shares outstanding | 3,484,287 | 3,484,287 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|||
Revenue | $ 13,037 | $ 16,574 | ||
Cost of revenue | 7,102 | 9,807 | ||
Gross profit | 5,935 | 6,767 | ||
Operating expenses | ||||
Research and development | 1,432 | 2,276 | ||
Sales and marketing | 2,137 | 2,336 | ||
General and administrative | 1,534 | 1,711 | ||
Intangible amortization | 990 | 1,047 | ||
Total operating expenses | 6,093 | 7,370 | ||
Operating profit (loss) | (158) | (603) | ||
Other income, net | 119 | 43 | ||
Income (loss) before income taxes | (39) | (560) | ||
Income tax benefit (expense) | 0 | (12) | ||
Net income (loss) | $ (39) | $ (572) | ||
Net income (loss) per share: | ||||
Basic | $ 0.00 | $ (0.04) | ||
Diluted | $ 0.00 | $ (0.04) | ||
Weighted-average number of common shares outstanding: | ||||
Basic (shares) | 15,632 | 15,481 | ||
Effect of dilutive securities: restricted stock, restricted stock units, performance stock units and stock options (1) | [1] | 0 | 0 | |
Diluted (shares) | 15,632 | 15,481 | ||
Product [Member] | ||||
Revenue | $ 11,789 | $ 14,784 | ||
Service [Member] | ||||
Revenue | $ 832 | $ 1,029 | ||
|
Condensed Consolidated Statements of Operations (Unaudited) Condensed Consolidated Statements of Operations Parenthetical (Unaudited) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Statement [Abstract] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1.0 | 1.1 |
Condensed Statements of Comprehensive Income ( Loss) (Unaudited) Statement - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Net income (loss) | $ (39) | $ (572) |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, before Tax | 0 | 0 |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | $ (39) | $ (572) |
Condensed Statements of Stockholders' Equity (Unaudited) Statement - 3 months ended Jun. 30, 2018 - USD ($) $ in Thousands |
Total |
Common Stock [Member]
Common Class A [Member]
|
Common Stock [Member]
Common Class B [Member]
|
Additional Paid-in Capital [Member] |
Treasury Stock [Member] |
Retained Earnings [Member] |
---|---|---|---|---|---|---|
Stockholders' Equity Attributable to Parent at Mar. 31, 2018 | $ 52,295 | $ 121 | $ 35 | $ 417,691 | $ (35,907) | $ (329,645) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (39) | (39) | ||||
Stock Issued During Period, Value, Share-based Compensation, Gross | 0 | 2 | (2) | |||
Treasury Stock, Value, Acquired, Cost Method | (405) | (1) | (404) | |||
Stock-based compensation | 291 | 291 | ||||
Stockholders' Equity Attributable to Parent at Jun. 30, 2018 | $ 52,471 | $ 122 | $ 35 | $ 417,980 | $ (36,311) | $ (329,355) |
Basis of Presentation (Notes) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Description of Business Westell Technologies, Inc. (the Company) is a holding company. Its wholly owned subsidiary, Westell, Inc., designs and distributes telecommunications products, which are sold primarily to major telephone companies. During the fiscal year 2018 second quarter ended September 30, 2017, the Company dissolved Noran Tel, Inc. (NoranTel) a wholly owned subsidiary of Westell, Inc. NoranTel's operations have been fully incorporated into Westell, Inc. Basis of Presentation and Reporting The accompanying Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. The Condensed Consolidated Financial Statements have been prepared using generally accepted accounting principles (GAAP) in the United States for interim financial reporting, and consistent with the instructions of Form 10-Q and Article 10 of Regulation S-X and, accordingly, they do not include all of the information and footnotes required in the annual consolidated financial statements and accompanying footnotes. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2018. All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the unaudited interim financial statements included herein reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s condensed consolidated financial position and the results of operations, comprehensive income (loss) and cash flows at June 30, 2018, and for all periods presented. The results of operations for the periods presented are not necessarily indicative of the results that may be expected for fiscal year 2019. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and that affect revenue and expenses during the periods reported. Estimates are used when accounting for the allowance for uncollectible accounts receivable, net realizable value of inventory, product warranty accrued, relative selling prices, stock-based compensation, intangible assets fair value, depreciation, income taxes, and contingencies, among other things. Actual results could differ from those estimates. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606). ASC 606 is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. The Company adopted ASC 606 on April 1, 2018 using the modified retrospective approach to all non-completed contracts as of the date of adoption. The reported results for fiscal year 2019 reflect the application of ASC 606 guidance. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. As a result of the adoption, the Company recognized a cumulative effect of initially applying ASC 606 as a credit of $0.3 million to the beginning balance of retained earnings. This adjustment to retained earnings was a result of accelerated revenue recognition for right-to-use licenses previously accounted for under the software revenue recognition guidance and for which vendor specific objective evidence (VSOE) had not been established. See Note 2 for additional information related to the adoption of ASC 606, including a significant accounting policy update. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). ASU 2016-01 requires investments in equity securities, except those accounted for under the equity method and those that result in consolidation, to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 also simplifies the impairment assessment for those equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. For public entities, the ASU 2016-01 was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted ASU 2016-01 on April 1, 2018. The adoption of ASU 2016-01 had no impact on the Company’s Condensed Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flow (Topic 230) (ASU 2016-15). This update is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The update provides new guidance regarding the classification of debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, distributions received from equity method investments, beneficial interests in securitized transactions, and separately identifiable cash flows and application of the predominance principle. The Company adopted ASU 2016-15 on April 1, 2018. The adoption of ASU 2016-15 had no impact on the Company's Condensed Consolidated Financial Statements and prior periods were not restated. In October 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16). ASU 2016-16 requires the recognition of current and deferred income taxes for intra-entity asset transfers when the transaction occurs. The Company adopted the accounting guidance as of April 1, 2018. The adoption of ASU 2016-16 had no impact on the Company’s Condensed Consolidated Financial Statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting (ASU 2017-09). ASU 2017-09 applies to all entities that change the terms or conditions of a share-based payment award. The amendments provide clarity and reduce diversity in practice as well as cost and complexity when applying the guidance in Topic 718, to the modification of the terms and conditions of a share-based payment award. The amendments in ASU 2017-09 include guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. The Company adopted the accounting guidance as of April 1, 2018. The adoption of ASU 2017-09 had no impact on the Company’s Condensed Consolidated Financial Statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-based Payments (ASU 2018-07). ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The Company early adopted ASU 2018-07 on April 1, 2018. As the Company did not have any unsettled liability-classified awards as of April 1, 2018, the adoption of ASU 2018-07 had no impact on the Company's Condensed Consolidated Financial Statements. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (ASU 2016-02). In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) (ASU 2017-13), which provides additional implementation guidance on the previously issued ASU 2016-02. ASU 2016-02 requires lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than one year. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842 (Leases) (ASU 2018-10), which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. These lease standards are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. While early adoption is permitted, the Company will adopt ASU 2016-02 on April 1, 2019. The new standard requires a modified retrospective transition for capital or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements, but it does not require transition accounting for leases that expire prior to the date of initial application. The Company is currently evaluating the impact that ASU 2016-02 may have on the Company's Condensed Consolidated Financial Statements and related disclosures. In July 2018, the FASB issued ASU 2018-09, Codification Improvements (ASU 2018-09). ASU 2018-09 does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt as part of the next fiscal year beginning after December 15, 2018. The Company is currently evaluating this guidance to determine the impact it may have on its Condensed Consolidated Financial Statements. |
Revenue Recognition (Notes) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | Revenue Recognition and Deferred Revenue Significant Accounting Policy Update The Company records revenue based on a five-step model in accordance with ASC 606. The Company's revenue is derived from the sale of products, software, and services identified in contracts. A contract exists when both parties have an approved agreement that creates enforceable rights and obligations, identifies performance obligations and payment terms and has commercial substance. The Company records revenue from these contracts when control of the products or services transfer to the customer. The amount of revenue to be recognized is based upon the consideration, including the impacts of any variable consideration, that the Company expects to be entitled to receive in exchange for these products and services. The majority of the Company’s revenue is recorded at a point in time from the sale of tangible products. Revenue is recorded when control of the products passes to the customer, dependent upon the terms of the underlying contract. For right-to-use software, revenue is recognized at the point in time the customer has the right to use and can substantially benefit from use of the software. Products regularly include warranties that include bug fixes, and minor updates so that the product continues to function as promised in a dynamic environment, and phone support. These standard warranties are assurance type warranties which do not offer any services beyond the assurance that the product will continue working as specified. Therefore, warranties are not considered separate performance obligations. Instead, the Company accrues the expected cost of warranty. Extended warranties are sold separately with a post contract support (PCS) agreement. PCS revenue is recognized over time during the support period. Revenue from installation services is recognized when the services have been completed or transferred as this is when the customer has obtained control. The Company has contracts with multiple performance obligations. When the sales agreement involves multiple performance obligations, each obligation is separately identified and the transaction price is allocated based on the amount of consideration the Company expects to be entitled to in exchange for transferring the promised good or service to the customer. In most cases, the Company allocates the consideration to each performance obligation based on the relative standalone selling price (RSP) of the distinct performance obligation. In circumstances where RSP is not observable, the Company allocates the consideration for the performance obligations by utilizing the residual approach. For performance obligations that the Company satisfies over time, revenue is recognized by consistently applying a method of measuring progress toward complete satisfaction of that performance obligation. The Company utilizes the method that most accurately depicts the progress toward completion of the performance obligation. If the measure of remaining rights exceeds the measure of the remaining performance obligations the Company records a contract asset. Conversely, if the measure of the remaining performance obligations exceeds the measure of the remaining rights, the Company records a contract liability. Contract assets and liabilities related to product returns will be recorded as contract assets and liabilities and presented on the Condensed Consolidated Balance Sheets in Prepaid expenses and other current assets and Deferred revenue, respectively. Customer billings for services not yet rendered are deferred and recognized as revenue as the services are rendered. The associated deferred revenue is included in Deferred revenue or Deferred revenue non-current, as appropriate, in the Condensed Consolidated Balance Sheets. The Company allows certain customers to return unused product under specified terms and conditions. The Company estimates product returns based on historical sales and return trends and records a corresponding refund liability. The refund liability is included within accrued expenses on the accompanying condensed consolidated balance sheets. Additionally, the Company records an asset based on historical experience for the amount of product we expect to return to inventory as a result of the return, which is recorded in prepaid and other current assets in the Condensed Consolidated Balance Sheets. Under previous guidance, the Company netted the asset against the refund liability and presented the net refund liability within accrued expenses. The gross product return asset was $0.1 million and $0.1 million at April 1, 2018 and June 30, 2018, respectivley. Financial Statement Impact of Adopting ASC 606 The following table summarizes the changes made to the Company's unaudited Condensed Consolidated Balance Sheets of March 31, 2018 for the adoption of ASC 606:
The following table summarizes the impacts of adopting ASC 606 on the Company’s unaudited Condensed Consolidated Balance Sheets as of June 30, 2018:
The following table summarizes the impacts of adopting ASC 606 on the Company’s unaudited Condensed Consolidated Statement of Operations for the three months ended June 30, 2018:
Practical Expedients and Exemptions The Company has adopted certain practical expedients available under ASC 606. Contract Costs The Company adopted the practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in sales and marketing and general and administrative expenses. If the incremental direct costs of obtaining a contract, which consist of sales commissions, relate to a service recognized over a period longer than one year, costs are deferred and amortized in line with the related services over the period of benefit. As of June 30, 2018, there were no deferred contract costs. Financing The Company adopted the practical expedient that permits the Company to forego adjusting contract consideration for the effects of any financing component if payments for goods and services are expected to be received one year or less from when control of the goods or services has transferred to the customer. Payment terms vary by customer. Generally, the time between invoicing and when payment is due is not significant. Occasionally, the Company requires customers to make a payment before delivery of the products or services to the customer. Sales Taxes The Company made the accounting policy election to record revenue net of sales taxes. This is consistent with the Company's practice under the previous guidance. Shipping and Handling Shipping and handling billed to customers is recorded as revenue. The Company classifies shipping and handling costs associated with both inbound freight and the distribution of finished product to our customers as cost of revenue. This is consistent with the Company's practice under the previous guidance. Disaggregation of revenue The following table disaggregated our revenue by major source:
The following is the expected future revenue recognition timing of deferred revenue:
During the three months ended June 30, 2018, the Company recognized $0.5 million of revenue that was deferred as of the beginning of the period. |
Restructuring Charge (Notes) |
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Restructuring Charge | Restructuring Charges The Company did not record any restructuring expense in the three months ended June 30, 2018 and June 30, 2017. Total liability for restructuring charges and their utilization for the three months ended June 30, 2018 are summarized as follows:
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Interim Segment Information (Notes) |
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Interim Segment Information | Interim Segment Information Segment information is presented in accordance with a “management approach", which designates the internal reporting used by the chief operating decision-maker (CODM) for making decisions and assessing performance as the source of the Company's reportable segments. Westell’s Chief Executive Officer is the CODM. The CODM continues to define segment profit as gross profit less research and development expenses. The accounting policies of the segments are the same as those for Westell Technologies, Inc. described in the summary of significant accounting policies included in the Company's Annual Report on Form 10-K for year ended March 31, 2018 and as updated in this filing. The Company’s three reportable segments are as follows: In-Building Wireless (IBW) Segment The IBW segment solutions enable cellular coverage in stadiums, arenas, malls, buildings, and other indoor areas not served well or at all by the existing "macro" outdoor cellular network. For commercial service, the IBW segment solutions include distributed antenna systems (DAS) conditioners and digital repeaters. For the public safety market, the IBW segment solutions include half-watt and two-watt repeaters and a battery backup unit. The Company’s IBW segment also offers ancillary products that consist of passive system components and antennas for both the commercial and public safety markets. Intelligent Site Management (ISM) Segment (formerly Intelligent Site Management and Services or "ISMS") The ISM segment solutions include a suite of remote units, which are network devices used for on-site processing. Remotes provide on-site machine-to-machine (M2M) communications that enable operators to remotely monitor, manage, and control site infrastructure and support systems. Remotes can be and often are combined with the Company’s Optima management software system. The Company also offers support services (i.e., maintenance agreements) and deployment services (i.e., installation). Communications Network Solutions (CNS) Segment The CNS segment solutions include a broad range of outdoor network infrastructure offerings consisting of integrated cabinets, power distribution products, copper and fiber connectivity panels, T1 network interface units (NIUs), and tower mounted amplifiers (TMAs). Segment information for the three months ended June 30, 2018, and 2017, is set forth below:
Segment asset information is not reported to or used by the CODM. |
Inventories (Notes) |
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Inventories | Inventories Inventories are stated at the lower of first-in, first-out cost or market value. The components of inventories are as follows:
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Stock-Based Compensation (Notes) |
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Share-based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Westell Technologies, Inc. 2015 Omnibus Incentive Compensation Plan (the 2015 Plan) was approved at the annual meeting of stockholders on September 16, 2015. The 2015 Plan replaced the Westell Technologies, Inc. 2004 Stock Incentive Plan (the 2004 Plan). If any award granted under the 2015 Plan or the 2004 Plan is canceled, terminates, expires, or lapses for any reason, any Shares subject to such award shall again be available for the grant of an award under the 2015 Plan. Shares subject to an award shall not again be made available for issuance under the Plan if such Shares are: (a) shares delivered to or withheld by the Company to pay the grant or purchase price of an award, or (b) shares delivered to or withheld by the Company to pay the withholding taxes related to an award. The stock options, restricted stock awards, and restricted stock units (RSUs) awarded under the 2015 Plan generally vest in equal annual installments over 3 years for employees and 1 year for independent directors. The stock options, restricted stock awards, and RSUs awarded under the 2004 Plan vest in equal annual installments over 4 years. Performance stock units (PSUs) earned vest over the performance period. Certain awards provide for accelerated vesting if there is a change in control (as defined in the 2015 Plan), or when provided within individual employment contracts. The Company accounts for forfeitures as they occur. The Company issues new shares for stock awards under the 2015 Plan. The following table is a summary of total stock-based compensation expense resulting from stock options, restricted stock, RSUs and PSUs, during the three months ended June 30, 2018, and 2017:
Stock Options Stock option activity for the three months ended June 30, 2018, is as follows:
Restricted Stock The following table sets forth restricted stock activity for the three months ended June 30, 2018:
RSUs The following table sets forth the RSU activity for the three months ended June 30, 2018:
PSUs PSUs will be earned based upon achievement of performance goals tied to growing revenue and non-GAAP profitability targets for the first, second, third, and fourth quarters of fiscal year 2019 and towards the annual fiscal year 2019 objective. Upon vesting, the PSUs convert into shares of Class A Common Stock of the Company on a one-for-one basis. The following table sets forth the PSU activity for the three months ended June 30, 2018:
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Product Warranties (Notes) |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties | Product Warranties The Company’s products carry a limited warranty ranging from one to five years for the products within the IBW segment, typically one year for products within the ISM segment (formerly ISMS), and one to seven years for products within the CNS segment. The specific terms and conditions of those warranties vary depending upon the customer and the products sold. Factors that affect the estimate of the Company’s warranty reserve include: the number of units shipped, anticipated rates of warranty claims, and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the reserve as necessary. The current portions of the warranty reserve are $121,000 and $125,000 as of June 30, 2018, and March 31, 2018, respectively, and are presented on the Condensed Consolidated Balance Sheets in Accrued expenses. The non-current portions of the warranty reserves are $169,000 and $175,000 as of June 30, 2018, and March 31, 2018, respectively, and are presented on the Condensed Consolidated Balance Sheets in Other non-current liabilities. The following table presents the changes in the Company’s product warranty reserve:
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Variable Interest Entity and Guarantee (Notes) |
3 Months Ended |
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Jun. 30, 2018 | |
Guarantees [Abstract] | |
Equity Method Investment [Text Block] | Variable Interest Entity and Guarantee The Company has a 50% equity ownership in AccessTel Kentrox Australia PTY LTD (AKA). AKA distributes network management solutions provided by the Company and the other 50% owner to one customer. The Company holds equal voting control with the other owner. All actions of AKA are decided at the board level by majority vote. The Company evaluated ASC 810, Consolidations, and concluded that AKA is a variable interest entity (VIE) and the Company has a variable interest in the VIE. The Company has concluded that it is not the primary beneficiary of AKA and, therefore, consolidation is not required. The carrying amount of the Company's investment in AKA was approximately $56,000 as of June 30, 2018 and March 31, 2018, which is presented on the Condensed Consolidated Balance Sheets within Other non-current assets. The Company's revenue from sales to AKA for the three months ended June 30, 2018, and 2017, was $0.6 million and $0.8 million, respectively. Accounts receivable from AKA was $0.5 million and $0.4 million as of June 30, 2018, and March 31, 2018, respectively. Deferred revenue, which primarily relates to AKA maintenance contracts, was $1.0 million and $1.4 million as of June 30, 2018, and March 31, 2018, respectively. The Company also has provided an unlimited guarantee for the performance of the other 50% owner in AKA, which primarily provides support and engineering services to the customer. This guarantee was put in place at the request of the AKA customer. The guarantee, which is estimated to have a maximum potential future payment of $0.7 million, will stay in place as long as the contract between AKA and the customer is in place. The Company would have recourse against the other 50% owner in AKA in the event the guarantee is triggered. The Company determined that it could perform on the obligation it guaranteed at a positive rate of return and, therefore, did not assign value to the guarantee. The Company's exposure to loss as a result of its involvement with AKA, exclusive of lost profits, is limited to the items noted above. |
Income Taxes (Notes) |
3 Months Ended |
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Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At the end of each interim period, the Company makes its best estimate of the effective tax rate expected to be applicable for the full fiscal year and uses that rate to provide for income taxes on a current year-to-date basis before discrete items. If a reliable estimate cannot be made, the Company may make a reasonable estimate of the annual effective tax rate, including use of the actual effective rate for the year-to-date. The impact of discrete items is recorded in the quarter in which they occur. The Company utilizes the liability method of accounting for income taxes and deferred taxes, which are determined based on the differences between the financial statements and tax basis of assets and liabilities given the enacted tax laws. The Company evaluates the need for valuation allowances on the net deferred tax assets under the rules of ASC 740, Income Taxes. In assessing the realizability of the Company's deferred tax assets, the Company considers whether it is more likely than not that some or all of the deferred tax assets will be realized through the generation of future taxable income. In making this determination, the Company assessed all of the evidence available at the time, including recent earnings, forecasted income projections and historical performance. The Company determined that the negative evidence outweighed the objectively verifiable positive evidence and previously recorded a full valuation allowance against deferred tax assets. The Company will continue to reassess realizability going forward. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Act”). The Act significantly revises the future ongoing U.S. corporate income tax by, among other things, lowering the U.S. corporate federal income tax rate from 34% to 21% effective January 1, 2018. The final transition impacts of the Act may differ from our previous estimates, possibly materially, due to, among other things, changes in interpretations of the Act, any legislative action to address questions that arise because of the Act, any changes in accounting standards for income taxes or related interpretations in response to the Act, or any updates or changes to estimates the Company has utilized to calculate the transition impacts, including impacts from changes to current year earnings estimates. The Securities Exchange Commission has issued guidance that allows for a measurement period of up to one year after the enactment date of the Act to finalize the recording of the related tax impacts. We currently anticipate finalizing and recording any resulting adjustments in the period the Company files the fiscal year ending March 31, 2018 income tax return. As of June 30, 2018, the Company had net deferred tax assets of approximately $37.0 million before a valuation allowance of $37.0 million. As of June 30, 2018 and March 31, 2018, the Company has $697,000 tax receivable associated with a prior AMT credit carryforward. The Company expects to recover the entire amount by 2022 via a tax refund. The Company recorded $0 of income tax expense in the three months ended June 30, 2018, using an effective income tax rate of (0.64)% plus discrete items. The Company recorded $12,000 of income tax expense in the three months ended June 30, 2017, using an effective rate of (1.32)% plus discrete items. The effective rate in both periods is impacted by the intraperiod allocation as a result of income or loss from continuing operations, and states which base tax on gross margin and not pretax income. |
Commitments and Contingencies (Notes) |
3 Months Ended |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation and Contingency Reserves The Company and its subsidiaries are involved in various assertions, claims, proceedings and requests for indemnification concerning intellectual property, including patent infringement suits involving technologies that may be incorporated in the Company’s products, which are being handled and defended in the ordinary course of business. These matters are in various stages of investigation and litigation, and they are being vigorously defended. Although the Company does not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial condition or results of operations, litigation is inherently unpredictable. Therefore, judgments could be rendered, or settlements entered, that could adversely affect the Company’s operating results or cash flows in a particular period. The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and it records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable. As of June 30, 2018, and March 31, 2018, the Company has not recorded any contingent liability attributable to existing litigation. In the ordinary course of operations the Company receives claims where the Company believes an unfavorable outcome is possible and/or for which is probable and no estimate of possible losses can currently be made. A significant customer was a defendant in two patent infringement claims and is asserting possible indemnity rights under contracts with the Company. The customer has settled one matter, and won summary judgment for all claims in the other. The customer has informed the Company that the customer intends to seek to recover from the Company a share of the settlement and defense costs. For the settled case, the customer recently provided an initial unsubstantiated claim with an allocation of their settlement and defense costs in a range of up to $315,000. For the summary judgment case, the customer provided an initial allocation of their defense costs in a range of up to $160,000. At this time, the Company does not have a specific estimate within either range or a true lower limit of the ranges with any degree of certainty for either claim, and therefore, we can only disclose the recent claims. The Company is seeking additional information to fully evaluate the of the facts to calculate the lower end of the ranges, which will vary depending upon, among other things, the Company's contribution ratio. Both of these claims relate to a business which was previously sold and therefore any future expense would be presented as discontinued operations. |
Short-term Investments (Notes) |
3 Months Ended |
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Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Short Term Investments [Text Block] | Short-term Investments As of June 30, 2018 and March 31, 2018, the Company owned Certificates of Deposit amounting to $1.3 million and $2.8 million, respectively, held at cost. |
Fair Value Measurements (Notes) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is defined by ASC 820, Fair Value Measurements and Disclosures (ASC 820), as the price that would be received upon selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
The Company’s money market funds are measured using Level 1 inputs. The following table presents available-for-sale securities measured at fair value on a recurring basis as of June 30, 2018:
The following table presents available-for-sale securities measured at fair value on a recurring basis as of March 31, 2018:
The fair value of the money market funds approximates their carrying amounts due to the short-term nature of these financial assets. |
Share Repurchases (Notes) |
3 Months Ended |
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Jun. 30, 2018 | |
Payments for Repurchase of Equity [Abstract] | |
Share Repurchases | Share Repurchases In May 2017, the Board of Directors authorized a share repurchase program whereby the Company may repurchase up to an aggregate of $2.0 million of its outstanding Class A Common Stock (the 2017 authorization). The 2017 authorization is in addition to the $0.1 million that was remaining from the August 2011 $20.0 million authorization (the 2011 authorization). There were 82,347 and 105,031 shares repurchased under the 2011 and 2017 authorizations during the three months ended June 30, 2018 and June 30, 2017, at a weighted average purchase price of $2.85 and $3.00 per share, respectively. As of June 30, 2018, there was approximately $1.5 million remaining for additional share repurchases under the 2017 authorization and the 2011 authorization was exhausted. Additionally, in the three months ended June 30, 2018, and June 30, 2017, the Company repurchased 51,210 and 21,267 shares of Class A Common Stock, respectively, from certain employees that were surrendered to satisfy the minimum statutory tax withholding obligations on the vesting of restricted stock, RSUs and PSUs. These repurchases were not included in the authorized share repurchase programs and had a weighted-average purchase price of $3.32 and $2.78 per share, respectively. |
Intangibles Assets (Notes) |
3 Months Ended |
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Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | Intangible Assets Intangible assets include customer relationships, trade names, developed technology and other intangibles. Intangible assets with determinable lives are amortized over their estimated useful lives. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying amount over its fair value. Intangible asset impairment charges are presented in Intangible amortization on the Condensed Consolidated Statements of Operations. There was no intangible asset impairment during the three months ended June 30, 2018 or the three months ended June 30, 2017. |
Accrued Liabilities (Notes) |
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Schedule of Accrued Liabilities [Table Text Block] | Accrued Expenses The components of accrued expenses are as follows:
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Land Property and Equipment (Notes) |
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Property, Plant and Equipment Disclosure [Text Block] | Land, Property, and Equipment Long-lived assets consist of land, property and equipment. Long-lived assets that are held and used should be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived assets might not be recoverable. There was no long-lived asset impairment during the three months ended June 30, 2018 or June 30, 2017. The components of fixed assets are as follows:
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Basis of Presentation (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition and Deferred Revenue Significant Accounting Policy Update The Company records revenue based on a five-step model in accordance with ASC 606. The Company's revenue is derived from the sale of products, software, and services identified in contracts. A contract exists when both parties have an approved agreement that creates enforceable rights and obligations, identifies performance obligations and payment terms and has commercial substance. The Company records revenue from these contracts when control of the products or services transfer to the customer. The amount of revenue to be recognized is based upon the consideration, including the impacts of any variable consideration, that the Company expects to be entitled to receive in exchange for these products and services. The majority of the Company’s revenue is recorded at a point in time from the sale of tangible products. Revenue is recorded when control of the products passes to the customer, dependent upon the terms of the underlying contract. For right-to-use software, revenue is recognized at the point in time the customer has the right to use and can substantially benefit from use of the software. Products regularly include warranties that include bug fixes, and minor updates so that the product continues to function as promised in a dynamic environment, and phone support. These standard warranties are assurance type warranties which do not offer any services beyond the assurance that the product will continue working as specified. Therefore, warranties are not considered separate performance obligations. Instead, the Company accrues the expected cost of warranty. Extended warranties are sold separately with a post contract support (PCS) agreement. PCS revenue is recognized over time during the support period. Revenue from installation services is recognized when the services have been completed or transferred as this is when the customer has obtained control. The Company has contracts with multiple performance obligations. When the sales agreement involves multiple performance obligations, each obligation is separately identified and the transaction price is allocated based on the amount of consideration the Company expects to be entitled to in exchange for transferring the promised good or service to the customer. In most cases, the Company allocates the consideration to each performance obligation based on the relative standalone selling price (RSP) of the distinct performance obligation. In circumstances where RSP is not observable, the Company allocates the consideration for the performance obligations by utilizing the residual approach. For performance obligations that the Company satisfies over time, revenue is recognized by consistently applying a method of measuring progress toward complete satisfaction of that performance obligation. The Company utilizes the method that most accurately depicts the progress toward completion of the performance obligation. If the measure of remaining rights exceeds the measure of the remaining performance obligations the Company records a contract asset. Conversely, if the measure of the remaining performance obligations exceeds the measure of the remaining rights, the Company records a contract liability. Contract assets and liabilities related to product returns will be recorded as contract assets and liabilities and presented on the Condensed Consolidated Balance Sheets in Prepaid expenses and other current assets and Deferred revenue, respectively. Customer billings for services not yet rendered are deferred and recognized as revenue as the services are rendered. The associated deferred revenue is included in Deferred revenue or Deferred revenue non-current, as appropriate, in the Condensed Consolidated Balance Sheets. The Company allows certain customers to return unused product under specified terms and conditions. The Company estimates product returns based on historical sales and return trends and records a corresponding refund liability. The refund liability is included within accrued expenses on the accompanying condensed consolidated balance sheets. Additionally, the Company records an asset based on historical experience for the amount of product we expect to return to inventory as a result of the return, which is recorded in prepaid and other current assets in the Condensed Consolidated Balance Sheets. Under previous guidance, the Company netted the asset against the refund liability and presented the net refund liability within accrued expenses. The gross product return asset was $0.1 million and $0.1 million at April 1, 2018 and June 30, 2018, respectivley. Financial Statement Impact of Adopting ASC 606 The following table summarizes the changes made to the Company's unaudited Condensed Consolidated Balance Sheets of March 31, 2018 for the adoption of ASC 606:
The following table summarizes the impacts of adopting ASC 606 on the Company’s unaudited Condensed Consolidated Balance Sheets as of June 30, 2018:
The following table summarizes the impacts of adopting ASC 606 on the Company’s unaudited Condensed Consolidated Statement of Operations for the three months ended June 30, 2018:
Practical Expedients and Exemptions The Company has adopted certain practical expedients available under ASC 606. Contract Costs The Company adopted the practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in sales and marketing and general and administrative expenses. If the incremental direct costs of obtaining a contract, which consist of sales commissions, relate to a service recognized over a period longer than one year, costs are deferred and amortized in line with the related services over the period of benefit. As of June 30, 2018, there were no deferred contract costs. Financing The Company adopted the practical expedient that permits the Company to forego adjusting contract consideration for the effects of any financing component if payments for goods and services are expected to be received one year or less from when control of the goods or services has transferred to the customer. Payment terms vary by customer. Generally, the time between invoicing and when payment is due is not significant. Occasionally, the Company requires customers to make a payment before delivery of the products or services to the customer. Sales Taxes The Company made the accounting policy election to record revenue net of sales taxes. This is consistent with the Company's practice under the previous guidance. Shipping and Handling Shipping and handling billed to customers is recorded as revenue. The Company classifies shipping and handling costs associated with both inbound freight and the distribution of finished product to our customers as cost of revenue. This is consistent with the Company's practice under the previous guidance. |
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Condensed consolidated financial statements | The accompanying Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. The Condensed Consolidated Financial Statements have been prepared using generally accepted accounting principles (GAAP) in the United States for interim financial reporting, and consistent with the instructions of Form 10-Q and Article 10 of Regulation S-X and, accordingly, they do not include all of the information and footnotes required in the annual consolidated financial statements and accompanying footnotes. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2018. All intercompany accounts and transactions have been eliminated in consolidation. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and that affect revenue and expenses during the periods reported. Estimates are used when accounting for the allowance for uncollectible accounts receivable, net realizable value of inventory, product warranty accrued, relative selling prices, stock-based compensation, intangible assets fair value, depreciation, income taxes, and contingencies, among other things. Actual results could differ from those estimates. |
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New Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606). ASC 606 is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. The Company adopted ASC 606 on April 1, 2018 using the modified retrospective approach to all non-completed contracts as of the date of adoption. The reported results for fiscal year 2019 reflect the application of ASC 606 guidance. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. As a result of the adoption, the Company recognized a cumulative effect of initially applying ASC 606 as a credit of $0.3 million to the beginning balance of retained earnings. This adjustment to retained earnings was a result of accelerated revenue recognition for right-to-use licenses previously accounted for under the software revenue recognition guidance and for which vendor specific objective evidence (VSOE) had not been established. See Note 2 for additional information related to the adoption of ASC 606, including a significant accounting policy update. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). ASU 2016-01 requires investments in equity securities, except those accounted for under the equity method and those that result in consolidation, to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 also simplifies the impairment assessment for those equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. For public entities, the ASU 2016-01 was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted ASU 2016-01 on April 1, 2018. The adoption of ASU 2016-01 had no impact on the Company’s Condensed Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flow (Topic 230) (ASU 2016-15). This update is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The update provides new guidance regarding the classification of debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, distributions received from equity method investments, beneficial interests in securitized transactions, and separately identifiable cash flows and application of the predominance principle. The Company adopted ASU 2016-15 on April 1, 2018. The adoption of ASU 2016-15 had no impact on the Company's Condensed Consolidated Financial Statements and prior periods were not restated. In October 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16). ASU 2016-16 requires the recognition of current and deferred income taxes for intra-entity asset transfers when the transaction occurs. The Company adopted the accounting guidance as of April 1, 2018. The adoption of ASU 2016-16 had no impact on the Company’s Condensed Consolidated Financial Statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting (ASU 2017-09). ASU 2017-09 applies to all entities that change the terms or conditions of a share-based payment award. The amendments provide clarity and reduce diversity in practice as well as cost and complexity when applying the guidance in Topic 718, to the modification of the terms and conditions of a share-based payment award. The amendments in ASU 2017-09 include guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. The Company adopted the accounting guidance as of April 1, 2018. The adoption of ASU 2017-09 had no impact on the Company’s Condensed Consolidated Financial Statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-based Payments (ASU 2018-07). ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The Company early adopted ASU 2018-07 on April 1, 2018. As the Company did not have any unsettled liability-classified awards as of April 1, 2018, the adoption of ASU 2018-07 had no impact on the Company's Condensed Consolidated Financial Statements. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (ASU 2016-02). In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) (ASU 2017-13), which provides additional implementation guidance on the previously issued ASU 2016-02. ASU 2016-02 requires lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than one year. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842 (Leases) (ASU 2018-10), which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. These lease standards are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. While early adoption is permitted, the Company will adopt ASU 2016-02 on April 1, 2019. The new standard requires a modified retrospective transition for capital or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements, but it does not require transition accounting for leases that expire prior to the date of initial application. The Company is currently evaluating the impact that ASU 2016-02 may have on the Company's Condensed Consolidated Financial Statements and related disclosures. In July 2018, the FASB issued ASU 2018-09, Codification Improvements (ASU 2018-09). ASU 2018-09 does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt as part of the next fiscal year beginning after December 15, 2018. The Company is currently evaluating this guidance to determine the impact it may have on its Condensed Consolidated Financial Statements. |
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Inventory | Inventories are stated at the lower of first-in, first-out cost or market value. |
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Fair Value Measurement | Fair value is defined by ASC 820, Fair Value Measurements and Disclosures (ASC 820), as the price that would be received upon selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | Financial Statement Impact of Adopting ASC 606 The following table summarizes the changes made to the Company's unaudited Condensed Consolidated Balance Sheets of March 31, 2018 for the adoption of ASC 606:
The following table summarizes the impacts of adopting ASC 606 on the Company’s unaudited Condensed Consolidated Balance Sheets as of June 30, 2018:
The following table summarizes the impacts of adopting ASC 606 on the Company’s unaudited Condensed Consolidated Statement of Operations for the three months ended June 30, 2018:
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Disaggregation of Revenue [Table Text Block] | The following table disaggregated our revenue by major source:
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Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block] | The following is the expected future revenue recognition timing of deferred revenue:
During the three months ended June 30, 2018, the Company recognized $0.5 million of revenue that was deferred as of the beginning of the period. |
Restructuring Charge (Tables) |
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Restructuring charges | Total liability for restructuring charges and their utilization for the three months ended June 30, 2018 are summarized as follows:
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Interim Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment information | Segment information for the three months ended June 30, 2018, and 2017, is set forth below:
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Inventories (Tables) |
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Components of inventories | The components of inventories are as follows:
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Stock-Based Compensation (Tables) |
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Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | The following table is a summary of total stock-based compensation expense resulting from stock options, restricted stock, RSUs and PSUs, during the three months ended June 30, 2018, and 2017:
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Stock option activity | Stock option activity for the three months ended June 30, 2018, is as follows:
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Restricted stock activity | Restricted Stock The following table sets forth restricted stock activity for the three months ended June 30, 2018:
RSUs The following table sets forth the RSU activity for the three months ended June 30, 2018:
PSUs PSUs will be earned based upon achievement of performance goals tied to growing revenue and non-GAAP profitability targets for the first, second, third, and fourth quarters of fiscal year 2019 and towards the annual fiscal year 2019 objective. Upon vesting, the PSUs convert into shares of Class A Common Stock of the Company on a one-for-one basis. The following table sets forth the PSU activity for the three months ended June 30, 2018:
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Product Warranties (Tables) |
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Changes in Company's product warranty reserve | The following table presents the changes in the Company’s product warranty reserve:
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Fair Value Measurements (Tables) |
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Assets and liabilities measured at fair value on a recurring basis and their related valuation inputs | The following table presents available-for-sale securities measured at fair value on a recurring basis as of June 30, 2018:
The following table presents available-for-sale securities measured at fair value on a recurring basis as of March 31, 2018:
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Land Property and Equipment (Tables) |
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Property, Plant and Equipment [Table Text Block] | The components of fixed assets are as follows:
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Basis of Presentation (Details Textual) - Accounting Standards Update 2014-09 [Member] $ in Thousands |
Apr. 01, 2018
USD ($)
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect adjustment ASC 606 adoption | $ 329 |
Retained Earnings [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect adjustment ASC 606 adoption | $ 329 |
Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
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Jun. 30, 2017 |
Apr. 01, 2018 |
Mar. 31, 2018 |
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Assets: | ||||
Prepaid Expense and Other Assets, Current | $ 1,283 | $ 888 | $ 816 | |
Liabilities: | ||||
Accrued Liabilities, Current | 3,053 | 3,400 | 3,328 | |
Deferred revenue | 1,516 | 1,680 | 1,790 | |
Deferred revenue non-current | 599 | 627 | 846 | |
Equity [Abstract] | ||||
Retained Earnings (Accumulated Deficit) | (329,355) | (329,316) | $ (329,645) | |
Revenue | 13,037 | $ 16,574 | ||
Gross profit | 5,935 | 6,767 | ||
Net income (loss) | (39) | $ (572) | ||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||
Equity [Abstract] | ||||
Revenue | 27 | |||
Gross profit | 27 | |||
Net income (loss) | 27 | |||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||||
Assets: | ||||
Prepaid Expense and Other Assets, Current | 1,210 | |||
Liabilities: | ||||
Accrued Liabilities, Current | 2,980 | |||
Deferred revenue | 1,626 | |||
Deferred revenue non-current | 791 | |||
Equity [Abstract] | ||||
Retained Earnings (Accumulated Deficit) | (329,657) | |||
Revenue | 13,064 | |||
Gross profit | 5,962 | |||
Net income (loss) | (12) | |||
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||
Assets: | ||||
Prepaid Expense and Other Assets, Current | (73) | 72 | ||
Liabilities: | ||||
Accrued Liabilities, Current | (73) | 72 | ||
Deferred revenue | 110 | (110) | ||
Deferred revenue non-current | 192 | (219) | ||
Equity [Abstract] | ||||
Retained Earnings (Accumulated Deficit) | (302) | $ 329 | ||
Retained Earnings [Member] | ||||
Equity [Abstract] | ||||
Net income (loss) | $ (39) |
Revenue Recognition (Details 2) - USD ($) $ in Thousands |
3 Months Ended | |
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Jun. 30, 2018 |
Jun. 30, 2017 |
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Disaggregation of Revenue [Line Items] | ||
Revenue | $ 13,037 | $ 16,574 |
Product [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 11,789 | 14,784 |
License and Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 416 | 761 |
Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 832 | $ 1,029 |
Revenue Recognition (Details 3) $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Amount | $ 1,516 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Amount | $ 304 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years 11 months |
Revenue, Remaining Performance Obligation, Amount | $ 295 |
Revenue Recognition (Details textual) - USD ($) |
3 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Apr. 01, 2018 |
|
Revenue from Contract with Customer [Abstract] | ||
ContractWithCustomerProductReturnAsset | $ 100,000 | $ 100,000 |
Capitalized Contract Cost, Net | 0 | |
Contract with Customer, Liability, Revenue Recognized | $ 500,000 |
Restructuring Charge (Details) $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Restructuring charges | |
Liability at beginning of period | $ 63 |
Restructuring Charges | 0 |
Paid | (49) |
Liability at end of period | 14 |
Employee Severance [Member] | |
Restructuring charges | |
Liability at beginning of period | 0 |
Restructuring Charges | 0 |
Paid | 0 |
Liability at end of period | 0 |
Other Restructuring [Member] | |
Restructuring charges | |
Liability at beginning of period | 63 |
Restructuring Charges | 0 |
Paid | (49) |
Liability at end of period | $ 14 |
Restructuring Charge (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Mar. 31, 2018 |
|
Restructuring Cost and Reserve [Line Items] | ||
Restructuring | $ 0 | |
Unpaid balance of restructuring charges | 14 | $ 63 |
Employee Severance [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring | 0 | |
Unpaid balance of restructuring charges | 0 | 0 |
Other Restructuring [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring | 0 | |
Unpaid balance of restructuring charges | $ 14 | $ 63 |
Interim Segment Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Segment information | ||
Revenue | $ 13,037 | $ 16,574 |
Cost of revenue | 7,102 | 9,807 |
Gross profit | $ 5,935 | $ 6,767 |
Gross margin | 45.50% | 40.80% |
Research and development | $ 1,432 | $ 2,276 |
Segment Profit Loss | 4,503 | 4,491 |
Operating expenses | ||
Sales and marketing | 2,137 | 2,336 |
General and administrative | 1,534 | 1,711 |
Intangible amortization | 990 | 1,047 |
Operating profit (loss) | (158) | (603) |
Other Nonoperating Income (Expense) | 119 | 43 |
Income tax benefit (expense) | 0 | (12) |
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | (39) | (572) |
IBW [Member] | ||
Segment information | ||
Revenue | 3,557 | 6,956 |
Cost of revenue | 1,895 | 3,942 |
Gross profit | $ 1,662 | $ 3,014 |
Gross margin | 46.70% | 43.30% |
Research and development | $ 522 | $ 1,463 |
Segment Profit Loss | 1,140 | 1,551 |
ISM [Member] | ||
Segment information | ||
Revenue | 5,744 | 4,130 |
Cost of revenue | 2,796 | 2,004 |
Gross profit | $ 2,948 | $ 2,126 |
Gross margin | 51.30% | 51.50% |
Research and development | $ 569 | $ 565 |
Segment Profit Loss | 2,379 | 1,561 |
CNS [Member] | ||
Segment information | ||
Revenue | 3,736 | 5,488 |
Cost of revenue | 2,411 | 3,861 |
Gross profit | $ 1,325 | $ 1,627 |
Gross margin | 35.50% | 29.60% |
Research and development | $ 341 | $ 248 |
Segment Profit Loss | $ 984 | $ 1,379 |
Interim Segment Information (Details Textual) |
3 Months Ended |
---|---|
Jun. 30, 2018
segments
| |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 3 |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Mar. 31, 2018 |
---|---|---|
Components of inventories | ||
Raw materials | $ 3,264 | $ 2,969 |
Finished goods | 6,463 | 6,253 |
Total inventories | $ 9,727 | $ 9,222 |
Stock-Based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Stock-based compensation expense | ||
Stock-based compensation expense | $ 291 | $ 330 |
Income tax benefit | 0 | 0 |
Total stock-based compensation expense, after taxes | $ 291 | $ 330 |
Stock-Based Compensation (Details 1) - Employee Stock Option [Member] - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Mar. 31, 2017 |
||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Outstanding on March 31, 2018 | 197,936 | ||||
Granted | 100,000 | ||||
Exercised | 0 | ||||
Forfeited | (1,251) | ||||
Expired | (499) | ||||
Outstanding on June 30, 2018 | 296,186 | ||||
Weighted-Average Exercise Price Per Share, Outstanding on March 31, 2018 | $ 4.87 | ||||
Weighted-Average Exercise Price Per Share, Granted | 3.14 | ||||
Weighted-Average Exercise Price Per Share, Exercised | 0.00 | ||||
Weighted-Average Exercise Price Per Share, Forfeited | 4.66 | ||||
Weighted-Average Exercise Price Per Share, Expired | 4.82 | ||||
Weighted-Average Exercise Price Per Share, Outstanding on June 30, 2018 | $ 4.29 | ||||
Weighted-Average Remaining Contractual Term (in years), Outstanding on March 31, 2018 | 5 years 26 days | 4 years 4 months 24 days | |||
Weighted-Average Remaining Contractual Term (in years), Outstanding on June 30, 2018 | 5 years 26 days | 4 years 4 months 24 days | |||
Aggregate Intrinsic Value, Outstanding on March 31, 2018 | [1] | $ 56 | |||
Aggregate Intrinsic Value, Outstanding on June 30, 2018 | [1] | $ 31 | |||
|
Stock-Based Compensation (Details 2) |
3 Months Ended |
---|---|
Jun. 30, 2018
$ / shares
shares
| |
Restricted Stock [Member] | |
Restricted stock activity | |
Non-vested as of March 31, 2018 | shares | 62,761 |
Granted | shares | 0 |
Vested | shares | (1,875) |
Forfeited | shares | 0 |
Non-vested as of June 30, 2018 | shares | 60,886 |
Weighted-Average Grant Date Fair Value, Non-vested as of March 31, 2018 | $ / shares | $ 3.35 |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 0.00 |
Weighted-Average Grant Date Fair Value, Vested | $ / shares | 15.30 |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | 0.00 |
Weighted-Average Grant Date Fair Value, Non-vested as of June 30, 2018 | $ / shares | $ 2.98 |
Restricted Stock Units (RSUs) [Member] | |
Restricted stock activity | |
Non-vested as of March 31, 2018 | shares | 518,450 |
Granted | shares | 331,500 |
Vested | shares | (152,672) |
Forfeited | shares | (32,085) |
Non-vested as of June 30, 2018 | shares | 665,193 |
Weighted-Average Grant Date Fair Value, Non-vested as of March 31, 2018 | $ / shares | $ 3.03 |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 3.20 |
Weighted-Average Grant Date Fair Value, Vested | $ / shares | 3.30 |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | 2.81 |
Weighted-Average Grant Date Fair Value, Non-vested as of June 30, 2018 | $ / shares | $ 3.07 |
Performance Shares [Member] | |
Restricted stock activity | |
Non-vested as of March 31, 2018 | shares | 0 |
Granted | shares | 50,000 |
Vested | shares | 0 |
Forfeited | shares | (5,000) |
Non-vested as of June 30, 2018 | shares | 45,000 |
Weighted-Average Grant Date Fair Value, Non-vested as of March 31, 2018 | $ / shares | $ 0 |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 3.14 |
Weighted-Average Grant Date Fair Value, Vested | $ / shares | 0 |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | 3.14 |
Weighted-Average Grant Date Fair Value, Non-vested as of June 30, 2018 | $ / shares | $ 3.14 |
Stock-Based Compensation (Details Textual) |
3 Months Ended |
---|---|
Jun. 30, 2018 | |
2004 Stock Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting schedule of equal annual installments | 4 years |
Restricted Stock Units (RSUs) [Member] | 2015 Omnibus Incentive Compensation Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting schedule of equal annual installments | 3 years |
Restricted Stock [Member] | 2015 Omnibus Incentive Compensation Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting schedule of equal annual installments | 1 year |
Product Warranties (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Changes in Company's standard product warranty reserve [Roll Forward] | ||
Total product warranty reserve at the beginning of the period | $ 300 | $ 395 |
Warranty expense to cost of revenue | 20 | 13 |
Utilization | (30) | (23) |
Total product warranty reserve at the end of the period | $ 290 | $ 385 |
Product Warranties (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Mar. 31, 2018 |
|
Product Warranties (Textual) [Abstract] | ||
Current portions of warranty reserve | $ 121 | $ 125 |
Non-current portions of the warranty reserve | $ 169 | $ 175 |
IBW [Member] | Minimum [Member] | ||
Product Warranties (Textual) [Abstract] | ||
Standard Product Warranty Description | P1Y | |
IBW [Member] | Maximum [Member] | ||
Product Warranties (Textual) [Abstract] | ||
Standard Product Warranty Description | P5Y | |
ISM [Member] | ||
Product Warranties (Textual) [Abstract] | ||
Standard Product Warranty Description | P1Y | |
CNS [Member] | Minimum [Member] | ||
Product Warranties (Textual) [Abstract] | ||
Standard Product Warranty Description | P1Y | |
CNS [Member] | Maximum [Member] | ||
Product Warranties (Textual) [Abstract] | ||
Standard Product Warranty Description | P7Y |
Variable Interest Entity and Guarantee (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Mar. 31, 2018 |
Apr. 02, 2013 |
|
Concentration Risk [Line Items] | ||||
Revenue | $ 13,037 | $ 16,574 | ||
AKA [Member] | ||||
Concentration Risk [Line Items] | ||||
Equity Method Investments | 56 | $ 56 | ||
Revenue | 600 | $ 800 | ||
Accounts Receivable, Net, Current | 500 | 400 | ||
Deferred Revenue | 1,000 | $ 1,400 | ||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 700 | |||
AKA [Member] | ||||
Concentration Risk [Line Items] | ||||
Equity Method Investment, Ownership Percentage | 50.00% |
Income Taxes (Details Textual) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 34.00% | ||
Deferred Tax Assets, Gross | $ 37,000,000 | |||
Deferred Tax Assets, Valuation Allowance | 37,000,000 | |||
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax | 697,000 | $ 697,000 | ||
Income tax benefit (expense) | $ 0 | $ (12,000) | ||
Effective tax rate | (0.64%) | (1.32%) |
Commitments and Contingencies (Details Textual) - Maximum [Member] |
Jun. 30, 2018
USD ($)
|
---|---|
Customer indemnity right for settled case [Member] | |
Loss Contingencies [Line Items] | |
Loss Contingency, Range of Possible Loss, Portion Not Accrued | $ 315,000 |
Customer indemnity right summary judgment [Member] | |
Loss Contingencies [Line Items] | |
Loss Contingency, Range of Possible Loss, Portion Not Accrued | $ 160,000 |
Short-term Investments (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Mar. 31, 2018 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Short-term Investments | $ 1,346 | $ 2,779 |
Fair Value Measurements (Details) - Recurring [Member] - Cash and cash equivalents [Member] - USD ($) $ in Thousands |
Jun. 30, 2018 |
Mar. 31, 2018 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | $ 20,779 | $ 19,237 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | $ 20,779 | $ 19,237 |
Share Repurchases (Details Textual) - Class A Common Stock - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Mar. 31, 2018 |
May 17, 2017 |
Aug. 31, 2011 |
|
MayTwoThousandSeventeenAuthorization [Member] | |||||
Share Repurchases (Textual) [Abstract] | |||||
Stock Repurchase Program | $ 2.0 | ||||
Treasury Stock, Shares, Acquired | 82,347 | 105,031 | |||
Stock Repurchase Program Remaining Authorized Repurchases Amount | $ 1.5 | ||||
Treasury stock acquired volume weighted-average price | $ 2.85 | $ 3.00 | |||
August 2011 authorization [Member] | |||||
Share Repurchases (Textual) [Abstract] | |||||
Stock Repurchase Program | $ 20.0 | ||||
Stock Repurchase Program Remaining Authorized Repurchases Amount | $ 0.1 | ||||
Outside of Publically Announced Repurchase Program [Member] | |||||
Share Repurchases (Textual) [Abstract] | |||||
Treasury Stock, Shares, Acquired | 51,210 | 21,267 | |||
Treasury stock acquired volume weighted-average price | $ 3.32 | $ 2.78 |
Intangibles Assets (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of Intangible Assets, Finite-lived | $ 0 | $ 0 |
Accrued Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Apr. 01, 2018 |
Mar. 31, 2018 |
---|---|---|---|
Accrued Liabilities [Abstract] | |||
Employee-related Liabilities, Current | $ 597 | $ 772 | |
Liabilities of Business Transferred under Contractual Arrangement, Current | 1,445 | 1,445 | |
Other Liabilities | 1,011 | 1,111 | |
Accrued Liabilities, Current | $ 3,053 | $ 3,400 | $ 3,328 |
Land Property and Equipment (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Mar. 31, 2018 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Land | $ 672 | $ 672 |
Machinery and equipment | 1,296 | 1,296 |
Office, computer and research equipment | 5,224 | 5,175 |
Leasehold improvements | 1,047 | 1,238 |
Land, property and equipment, gross | 8,239 | 8,381 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 6,741 | 6,780 |
Land, property and equipment, net | $ 1,498 | $ 1,601 |
Land Property and Equipment Textual (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Property, Plant and Equipment [Abstract] | ||
Impairment of Long-Lived Assets to be Disposed of | $ 0 | $ 0 |
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