FORM | |||||
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 |
(Exact name of Registrant as specified in its charter) | ||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
|
Large accelerated filer | ☐ | ☒ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company | |||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ] |
Item 1. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
Item 1. | |||||||||||
Item 1A. | |||||||||||
Item 6. | |||||||||||
As of | |||||||||||
September 30, 2022 | March 31, 2022 | ||||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Trade receivables, net of allowances of $ | |||||||||||
Inventories | |||||||||||
Prepaids and other current assets | |||||||||||
Other current assets - restricted, current | |||||||||||
Income taxes receivable | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Deferred income tax assets, non-current | |||||||||||
Income taxes receivable, non-current | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Shareholders' Equity | |||||||||||
Trade payables | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Operating lease liabilities, current portion | |||||||||||
Financing lease liabilities, current portion | |||||||||||
Warranty obligations, current portion | |||||||||||
Income taxes payable, current portion | |||||||||||
Debt payable, current portion, net of unamortized debt issuance costs of $ | |||||||||||
Total current liabilities | |||||||||||
Operating lease liabilities, non-current | |||||||||||
Financing lease liabilities, non-current | |||||||||||
Warranty obligations, non-current | |||||||||||
Income taxes payable, non-current | |||||||||||
Deferred income tax liabilities, non-current | |||||||||||
Other non-current liabilities | |||||||||||
Debt payable, non-current, net of unamortized debt issuance costs of $ | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 17) | |||||||||||
Shareholders' equity: | |||||||||||
Common stock - | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total shareholders' equity | |||||||||||
Total liabilities and shareholders' equity | $ | $ |
Three-Months Ended September 30, | Six-Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling and marketing | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Goodwill and intangible impairment charge | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating (loss) income | ( | ( | ( | ||||||||||||||||||||
Other expense: | |||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Other, net | ( | ( | ( | ||||||||||||||||||||
Total other expense, net | ( | ( | ( | ( | |||||||||||||||||||
(Loss) income from continuing operations before income taxes | ( | ( | ( | ||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
(Loss) income from continuing operations | ( | ( | ( | ||||||||||||||||||||
Discontinued operations: | |||||||||||||||||||||||
(Loss) gain from discontinued operations before income taxes | ( | ( | ( | ||||||||||||||||||||
Income tax (benefit) expense benefit of discontinued operations | ( | ( | |||||||||||||||||||||
Income (loss) from discontinued operations | ( | ( | |||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
Basic (loss) income per share from continuing operations | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
Basic income (loss) per share from discontinued operations | ( | ||||||||||||||||||||||
Basic net (loss) income per share | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
Diluted (loss) income per share from continuing operations | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
Diluted income per share from discontinued operations | |||||||||||||||||||||||
Diluted net (loss) income per share | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
Shares used in per share calculations: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Three-Months Ended September 30, | Six-Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net (loss) income | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Unrealized loss on available-for-sale securities, net of income tax expense of $ | ( | ( | |||||||||||||||||||||
Foreign currency translation, net of income tax (expense) benefit of $( | ( | ( | ( | ( | |||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive (loss) income | $ | ( | $ | ( | $ | ( | $ |
Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Net loss | — | — | ( | — | ( | ||||||||||||||||||||||||
Foreign currency translation adjustment, net of income tax expense of $ | — | — | — | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | |||||||||||||||||||||||||||
Common stock issued under equity compensation plan, net of shares withheld for tax payments | ( | — | — | ( | |||||||||||||||||||||||||
Common stock issued under employee stock purchase plan | — | — | |||||||||||||||||||||||||||
Balance, June 30, 2022 | ( | ||||||||||||||||||||||||||||
Net loss | — | — | ( | — | ( | ||||||||||||||||||||||||
Foreign currency translation adjustment, net of income tax expense of $ | — | — | — | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | |||||||||||||||||||||||||||
Common stock issued under equity compensation plan, net of shares withheld for tax payments | ( | — | — | ( | |||||||||||||||||||||||||
Balance, September 30, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Common Stock | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total Shareholders' Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance, March 31, 2021 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Foreign currency translation adjustment, net of income tax benefit of $ | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Common stock issued under equity compensation plan, net of shares withheld for tax payments | ( | — | — | ( | |||||||||||||||||||||||||
Common stock issued under employee stock purchase plan | — | — | |||||||||||||||||||||||||||
Balance, June 30, 2021 | |||||||||||||||||||||||||||||
Net loss | — | — | ( | — | ( | ||||||||||||||||||||||||
Unrealized loss on marketable securities, net of income tax expense of $ | — | — | — | ( | ( | ||||||||||||||||||||||||
Foreign currency translation adjustment, net of income tax expense of $ | — | — | — | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Common stock issued under equity compensation plan, net of shares withheld for tax payments | ( | — | — | ( | |||||||||||||||||||||||||
Balance, September 30, 2021 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Six-Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
(Loss) income from continuing operations | $ | ( | $ | ||||||||
Gain (loss) from discontinued operations | ( | ||||||||||
Net (loss) income | ( | ||||||||||
Adjustments to reconcile net loss to cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Recovery (provision) for allowance for doubtful accounts | ( | ||||||||||
Inventory lower of cost or net realizable value | |||||||||||
Stock-based compensation expense | |||||||||||
Deferred income taxes, net of valuation allowances | ( | ||||||||||
Goodwill and intangible impairment change | |||||||||||
Other | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Trade receivables | |||||||||||
Inventories | ( | ||||||||||
Prepaids and other assets | |||||||||||
Income taxes receivable | ( | ||||||||||
Trade payables | ( | ||||||||||
Accrued liabilities and other liabilities, including warranty obligations | ( | ||||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from investing activities: | |||||||||||
Proceeds from sales and maturities of available-for-sale securities | |||||||||||
Acquisition of business, net of cash acquired | ( | ||||||||||
Purchases of property, plant and equipment | ( | ( | |||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from long-term debt | |||||||||||
Payments on long-term debt | ( | ( | |||||||||
Payments on finance lease liabilities | ( | ||||||||||
Proceeds from employee stock purchases | |||||||||||
Proceeds from exercise of stock options | |||||||||||
Tax payments related to stock award issuances | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes | ( | ( | |||||||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash (received from) paid for income taxes, net | ( | ||||||||||
Supplemental disclosure of non-cash investing activities: | |||||||||||
Capital expenditures incurred but not yet paid | $ | $ | |||||||||
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the total of the same amounts shown above: | |||||||||||
Six-Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Other current assets - restricted, current | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ | |||||||||
Three-Months Ended September 30, | Six-Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Product sales | $ | $ | $ | $ | |||||||||||||||||||
Extended warranties and services | |||||||||||||||||||||||
Other(1) | |||||||||||||||||||||||
Net sales | $ | $ | $ | $ |
Three-Months Ended September 30, | Six-Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
Canada | |||||||||||||||||||||||
Europe, the Middle East and Africa | |||||||||||||||||||||||
All other | |||||||||||||||||||||||
Net sales | $ | $ | $ | $ |
Three-Months Ended September 30, | Six-Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
Cash additions | ||||||||||||||||||||||||||
Revenue recognition | ( | ( | ( | ( | ||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ |
September 30, 2022 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||
Foreign currency forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Total assets measured at fair value | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||
Foreign currency forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Total liabilities measured at fair value | $ | $ | $ | $ |
March 31, 2022 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||
Foreign currency forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Total liabilities measured at fair value | $ | $ | $ | $ | ||||||||||||||||||||||
Balance Sheet Classification | As of | |||||||||||||||||||
September 30, 2022 | March 31, 2022 | |||||||||||||||||||
Derivative instruments not designated as cash flow hedges: | ||||||||||||||||||||
Foreign currency forward contracts | Prepaids and other current assets | $ | $ | |||||||||||||||||
Foreign currency forward contracts | Accrued liabilities | |||||||||||||||||||
Statement of Operations Classification | Three-Months Ended September 30, | Six-Months Ended September 30, | |||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||
Derivative instruments not designated as cash flow hedges: | |||||||||||||||||||||||||||||
Loss recognized in earnings | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
Income tax expense (benefit) | Income tax expense (benefit) | ( | ( |
As of | |||||||||||
September 30, 2022 | March 31, 2022 | ||||||||||
Finished goods | $ | $ | |||||||||
Parts and components | |||||||||||
Total inventories | $ | $ |
Estimated Useful Life (in years) | As of | ||||||||||||||||||||||
September 30, 2022 | March 31, 2022 | ||||||||||||||||||||||
Automobiles | $ | $ | |||||||||||||||||||||
Leasehold improvements | to | ||||||||||||||||||||||
Computer software and equipment | to | ||||||||||||||||||||||
Machinery and equipment | to | ||||||||||||||||||||||
Furniture and fixtures | to | ||||||||||||||||||||||
Work in progress(1) | N/A | ||||||||||||||||||||||
Total cost | |||||||||||||||||||||||
Accumulated depreciation | ( | ( | |||||||||||||||||||||
Total property, plant and equipment, net | $ | $ |
Three-Months Ended September 30, | Six-Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Depreciation expense | $ | $ | $ | $ |
Total | |||||
Balance, March 31, 2022 | $ | ||||
Goodwill impairment | ( | ||||
Balance, September 30, 2022 | $ | ||||
Estimated Useful Life (in years) | As of | ||||||||||||||||||||||
September 30, 2022 | March 31, 2022 | ||||||||||||||||||||||
Indefinite-lived trademarks (1) | N/A | $ | $ | ||||||||||||||||||||
Patents | to | ||||||||||||||||||||||
Accumulated amortization - definite-lived intangible assets | ( | ( | |||||||||||||||||||||
Other intangible assets, net | $ | $ |
Three-Months Ended September 30, | Six-Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Amortization expense | $ | $ | $ | $ |
Remainder of fiscal 2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
$ |
Three-Months Ended September 30, | Six-Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Operating lease expense | $ | $ | $ | $ | |||||||||||||||||||
Amortization of finance lease assets | |||||||||||||||||||||||
Total lease expense | $ | $ | $ | $ | |||||||||||||||||||
As of | |||||||||||||||||
September 30, 2022 | March 31, 2022 | ||||||||||||||||
Supplemental cash flow information related to leases was as follows: | |||||||||||||||||
Operating leases: | |||||||||||||||||
Operating lease right-of-use-assets | $ | $ | |||||||||||||||
Operating lease liabilities, non-current | $ | $ | |||||||||||||||
Operating lease liabilities, current portion | |||||||||||||||||
Total operating lease liabilities | $ | $ | |||||||||||||||
Finance leases: | |||||||||||||||||
Property, plant and equipment, at cost | $ | $ | |||||||||||||||
Accumulated depreciation | ( | ( | |||||||||||||||
Property, plant and equipment, net | $ | $ | |||||||||||||||
Finance lease obligations, non-current | $ | $ | |||||||||||||||
Finance lease obligations, current portion | |||||||||||||||||
Total finance lease liabilities | $ | $ | |||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
Operating cash flow from operating leases | $ | $ | |||||||||||||||
Finance cash flows from finance leases | |||||||||||||||||
Additional lease information: | |||||||||||||||||
ROU assets obtained in exchange for operating lease obligations | $ | $ | |||||||||||||||
ROU assets obtained in exchange for finance lease obligations | |||||||||||||||||
Reductions to ROU assets resulting from reductions to operating lease obligations | |||||||||||||||||
Weighted Average Remaining Lease Term: | |||||||||||||||||
Operating leases | |||||||||||||||||
Finance leases | |||||||||||||||||
Weighted Average Discount Rate: | |||||||||||||||||
Operating leases | |||||||||||||||||
Finance leases |
As of September 30, 2022 | |||||||||||
Operating leases | Finance leases | ||||||||||
Remainder of fiscal 2023 | $ | $ | |||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
Thereafter | |||||||||||
Total undiscounted lease payments | |||||||||||
Less imputed interest | ( | ( | |||||||||
Total lease liabilities | $ | $ |
As of | |||||||||||
September 30, 2022 | March 31, 2022 | ||||||||||
Payroll and related liabilities | $ | $ | |||||||||
Deferred revenue | |||||||||||
Legal settlement (2) | |||||||||||
Other | |||||||||||
Reserves (1) | |||||||||||
Total accrued liabilities | $ | $ |
Six-Months Ended September 30, | ||||||||||||||
2022 | 2021 | |||||||||||||
Balance, beginning of period | $ | $ | ||||||||||||
Accruals (1) | ( | |||||||||||||
Payments | ( | ( | ||||||||||||
Balance, end of period | $ | $ | ||||||||||||
(1) Accruals were negative for the six-months ended September 30, 2021 due to a reversal of a special warranty reserve related to indoor cycling bikes. |
Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||
Balance, March 31, 2022 | $ | ( | $ | ( | |||||||
Current period other comprehensive loss before reclassifications | ( | ( | |||||||||
Net other comprehensive loss during period | ( | ( | |||||||||
Balance, September 30, 2022 | $ | ( | $ | ( |
Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||
Balance, June 30, 2022 | $ | ( | $ | ( | |||||||
Current period other comprehensive loss before reclassifications | ( | ( | |||||||||
Net other comprehensive loss during period | ( | ( | |||||||||
Balance, September 30, 2022 | $ | ( | $ | ( |
Unrealized Loss on Available-for-Sale Securities | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive (Loss) Income | |||||||||||||||
Balance, March 31, 2021 | $ | ( | $ | ( | $ | ( | |||||||||||
Current period other comprehensive income before reclassifications | ( | ( | ( | ||||||||||||||
Net other comprehensive income during period | ( | ( | ( | ||||||||||||||
Balance, September 30, 2021 | $ | ( | $ | ( | $ | ( | |||||||||||
Unrealized Loss on Available-for-Sale Securities | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive (Loss) Income | |||||||||||||||
Balance, June 30, 2021 | $ | ( | $ | $ | |||||||||||||
Current period other comprehensive income before reclassifications | ( | ( | ( | ||||||||||||||
Net other comprehensive income during period | ( | ( | ( | ||||||||||||||
Balance, September 30, 2021 | $ | ( | $ | ( | $ | ( | |||||||||||
Three-Months Ended September 30, | Six-Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Shares used to calculate basic income per share | |||||||||||||||||||||||
Dilutive effect of outstanding stock options, performance stock units and restricted stock units | |||||||||||||||||||||||
Shares used to calculate diluted income per share |
Three-Months Ended September 30, | Six-Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Restricted stock units | |||||||||||||||||||||||
Stock options | |||||||||||||||||||||||
Total potential dilutive shares excluded due to net loss |
Three-Months Ended September 30, | Six-Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Stock options | |||||||||||||||||||||||
RSUs | |||||||||||||||||||||||
Total anti-dilutive shares excluded |
Three-Months Ended September 30, | Six-Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
Direct | $ | $ | $ | $ | |||||||||||||||||||
Retail | |||||||||||||||||||||||
Royalty | |||||||||||||||||||||||
Consolidated net sales | $ | $ | $ | $ | |||||||||||||||||||
Contribution: | |||||||||||||||||||||||
Direct | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
Retail | ( | ||||||||||||||||||||||
Royalty | |||||||||||||||||||||||
Consolidated contribution | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Reconciliation of consolidated contribution to (loss) income from continuing operations: | |||||||||||||||||||||||
Consolidated contribution | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Amounts not directly related to segments: | |||||||||||||||||||||||
Operating expenses(1) | ( | ( | ( | ( | |||||||||||||||||||
Other expense, net | ( | ( | ( | ( | |||||||||||||||||||
Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
(Loss) income from continuing operations | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
(1) Included in unallocated Operating expenses is $ | |||||||||||||||||||||||
As of | |||||||||||
September 30, 2022 | March 31, 2022 | ||||||||||
Assets: | |||||||||||
Direct | $ | $ | |||||||||
Retail | |||||||||||
Unallocated corporate | |||||||||||
Total assets | $ | $ |
Three-Months Ended September 30, | Six-Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Amazon.com | |||||||||||||||||||||||
Best Buy | * | * | |||||||||||||||||||||
*Less than 10% of total net sales. |
Three-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
Net sales | $ | 65,458 | $ | 137,959 | $ | (72,501) | (52.6) | % | |||||||||||||||
Cost of sales | 54,000 | 95,906 | (41,906) | (43.7) | % | ||||||||||||||||||
Gross profit | 11,458 | 42,053 | (30,595) | (72.8) | % | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling and marketing | 9,400 | 21,939 | (12,539) | (57.2) | % | ||||||||||||||||||
General and administrative | 10,995 | 16,376 | (5,381) | (32.9) | % | ||||||||||||||||||
Research and development | 5,405 | 5,688 | (283) | (5.0) | % | ||||||||||||||||||
Total operating expenses | 25,800 | 44,003 | (18,203) | (41.4) | % | ||||||||||||||||||
Operating loss | (14,342) | (1,950) | (12,392) | 635.5 | % | ||||||||||||||||||
Other expense: | |||||||||||||||||||||||
Interest income | 4 | 12 | (8) | ||||||||||||||||||||
Interest expense | (595) | (481) | (114) | ||||||||||||||||||||
Other, net | (224) | 94 | (318) | ||||||||||||||||||||
Total other expense, net | (815) | (375) | (440) | ||||||||||||||||||||
Loss from continuing operations before income taxes | (15,157) | (2,325) | (12,832) | ||||||||||||||||||||
Income tax expense | 156 | 2,242 | (2,086) | ||||||||||||||||||||
Loss from continuing operations | (15,313) | (4,567) | (10,746) | ||||||||||||||||||||
Income (loss) from discontinued operations, net of taxes | 2,110 | (35) | 2,145 | ||||||||||||||||||||
Net loss | $ | (13,203) | $ | (4,602) | $ | (8,601) | |||||||||||||||||
Six-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
Net sales | $ | 120,275 | $ | 322,552 | $ | (202,277) | (62.7) | % | |||||||||||||||
Cost of sales | 101,859 | 224,994 | (123,135) | (54.7) | % | ||||||||||||||||||
Gross profit | 18,416 | 97,558 | (79,142) | (81.1) | % | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling and marketing | 22,290 | 43,239 | (20,949) | (48.4) | % | ||||||||||||||||||
General and administrative | 23,458 | 27,899 | (4,441) | (15.9) | % | ||||||||||||||||||
Research and development | 11,229 | 10,503 | 726 | 6.9 | % | ||||||||||||||||||
Goodwill and intangible impairment charge | 26,965 | — | 26,965 | NM | |||||||||||||||||||
Total operating expenses | 83,942 | 81,641 | 2,301 | 2.8 | % | ||||||||||||||||||
Operating (loss) income | (65,526) | 15,917 | (81,443) | (511.7) | % | ||||||||||||||||||
Other expense: | |||||||||||||||||||||||
Interest income | 5 | 33 | (28) | ||||||||||||||||||||
Interest expense | (971) | (795) | (176) | ||||||||||||||||||||
Other, net | (739) | (26) | (713) | ||||||||||||||||||||
Total other expense, net | (1,705) | (788) | (917) | ||||||||||||||||||||
(Loss) income from continuing operations before income taxes | (67,231) | 15,129 | (82,360) | ||||||||||||||||||||
Income tax expense | 8,251 | 5,680 | 2,571 | ||||||||||||||||||||
(Loss) income from continuing operations | (75,482) | 9,449 | (84,931) | ||||||||||||||||||||
Income (loss) from discontinued operations, net of taxes | 2,102 | (167) | 2,269 | ||||||||||||||||||||
Net (loss) income | $ | (73,380) | $ | 9,282 | $ | (82,662) | |||||||||||||||||
NM = Not meaningful | |||||||||||||||||||||||
Three-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
Direct net sales: | |||||||||||||||||||||||
Cardio products(1) | $ | 16,493 | $ | 22,406 | $ | (5,913) | (26.4) | % | |||||||||||||||
Strength products(2) | 7,987 | 15,447 | (7,460) | (48.3) | % | ||||||||||||||||||
Direct | 24,480 | 37,853 | (13,373) | (35.3) | % | ||||||||||||||||||
Retail net sales: | |||||||||||||||||||||||
Cardio products(1) | $ | 14,554 | $ | 58,848 | $ | (44,294) | (75.3) | % | |||||||||||||||
Strength products(2) | 25,351 | 40,305 | (14,954) | (37.1) | % | ||||||||||||||||||
Retail | 39,905 | 99,153 | (59,248) | (59.8) | % | ||||||||||||||||||
Royalty | 1,073 | 953 | 120 | 12.6 | % | ||||||||||||||||||
$ | 65,458 | $ | 137,959 | $ | (72,501) | (52.6) | % | ||||||||||||||||
Cost of sales: | |||||||||||||||||||||||
Direct | $ | 21,379 | $ | 23,877 | $ | (2,498) | (10.5) | % | |||||||||||||||
Retail | 32,621 | 72,029 | (39,408) | (54.7) | % | ||||||||||||||||||
$ | 54,000 | $ | 95,906 | $ | (41,906) | (43.7) | % | ||||||||||||||||
Gross profit: | |||||||||||||||||||||||
Direct | $ | 3,101 | $ | 13,976 | $ | (10,875) | (77.8) | % | |||||||||||||||
Retail | 7,284 | 27,124 | (19,840) | (73.1) | % | ||||||||||||||||||
Royalty | 1,073 | 953 | 120 | 12.6 | % | ||||||||||||||||||
$ | 11,458 | $ | 42,053 | $ | (30,595) | (72.8) | % | ||||||||||||||||
Gross profit margin: | |||||||||||||||||||||||
Direct | 12.7 | % | 36.9 | % | (24) | ppts | |||||||||||||||||
Retail | 18.3 | % | 27.4 | % | (9) | ppts | |||||||||||||||||
Contribution: | |||||||||||||||||||||||
Direct | $ | (7,887) | $ | (1,835) | $ | (6,052) | 329.8 | % | |||||||||||||||
Retail | 966 | 18,741 | (17,775) | (94.8) | % | ||||||||||||||||||
Contribution rate: | |||||||||||||||||||||||
Direct | (32.2) | % | (4.8) | % | (27) | ppts | |||||||||||||||||
Retail | 2.4 | % | 18.9 | % | (17) | ppts |
(1) Cardio products include: connected-fitness bikes, the Bowflex® C6, VeloCore®, Schwinn® IC4, Max Trainer®, connected-fitness treadmills, other exercise bikes, ellipticals and subscription services. | |||||||||||||||||||||||
(2) Strength products include: Bowflex® Home Gyms, Bowflex® SelectTech® dumbbells, kettlebell and barbell weights, and accessories. |
Six-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
Direct net sales: | |||||||||||||||||||||||
Cardio products(1) | $ | 33,626 | $ | 53,836 | $ | (20,210) | (37.5) | % | |||||||||||||||
Strength products(2) | 17,331 | 47,413 | (30,082) | (63.4) | % | ||||||||||||||||||
Direct | 50,957 | 101,249 | (50,292) | (49.7) | % | ||||||||||||||||||
Retail net sales: | |||||||||||||||||||||||
Cardio products(1) | $ | 26,397 | $ | 148,772 | $ | (122,375) | (82.3) | % | |||||||||||||||
Strength products(2) | 40,951 | 70,865 | (29,914) | (42.2) | % | ||||||||||||||||||
Retail | 67,348 | 219,637 | (152,289) | (69.3) | % | ||||||||||||||||||
Royalty | 1,970 | 1,666 | 304 | 18.2 | % | ||||||||||||||||||
$ | 120,275 | $ | 322,552 | $ | (202,277) | (62.7) | % | ||||||||||||||||
Cost of sales: | |||||||||||||||||||||||
Direct | $ | 43,293 | $ | 62,759 | $ | (19,466) | (31.0) | % | |||||||||||||||
Retail | 58,566 | 162,235 | (103,669) | (63.9) | % | ||||||||||||||||||
$ | 101,859 | $ | 224,994 | $ | (123,135) | (54.7) | % | ||||||||||||||||
Gross profit: | |||||||||||||||||||||||
Direct | $ | 7,665 | $ | 38,490 | $ | (30,825) | (80.1) | % | |||||||||||||||
Retail | 8,781 | 57,402 | (48,621) | (84.7) | % | ||||||||||||||||||
Royalty | 1,970 | 1,666 | 304 | 18.2 | % | ||||||||||||||||||
$ | 18,416 | $ | 97,558 | $ | (79,142) | (81.1) | % | ||||||||||||||||
Gross profit margin: | |||||||||||||||||||||||
Direct | 15.0 | % | 38.0 | % | (23) | ppts | |||||||||||||||||
Retail | 13.0 | % | 26.1 | % | (13) | ppts | |||||||||||||||||
Contribution: | |||||||||||||||||||||||
Direct | $ | (17,780) | $ | 4,924 | $ | (22,704) | (461.1) | % | |||||||||||||||
Retail | (4,442) | 40,831 | (45,273) | (110.9) | % | ||||||||||||||||||
Contribution rate: | |||||||||||||||||||||||
Direct | (34.9) | % | 4.9 | % | (40) | ppts | |||||||||||||||||
Retail | (6.6) | % | 18.6 | % | (25) | ppts |
(1) Cardio products include: connected-fitness bikes, the Bowflex® C6, VeloCore®, Schwinn® IC4, Max Trainer®, connected-fitness treadmills, other exercise bikes, ellipticals and subscription services. | |||||||||||||||||||||||
(2) Strength products include: Bowflex® Home Gyms, Bowflex® SelectTech® dumbbells, kettlebell and barbell weights, and accessories. |
Three-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
Selling and marketing | $ | 9,400 | $ | 21,939 | $ | (12,539) | (57.2)% | ||||||||||||||||
As % of net sales | 14.4 | % | 15.9 | % |
Six-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
Selling and marketing | $ | 22,290 | $ | 43,239 | $ | (20,949) | (48.4)% | ||||||||||||||||
As % of net sales | 18.5 | % | 13.4 | % |
Three-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
Total advertising | $ | 3,103 | $ | 12,439 | $ | (9,336) | (75.1)% |
Six-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
Total advertising | $ | 8,815 | $ | 24,041 | $ | (15,226) | (63.3)% |
Three-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
General and administrative | $ | 10,995 | $ | 16,376 | $ | (5,381) | (32.9)% | ||||||||||||||||
As % of net sales | 16.8 | % | 11.9 | % |
Six-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
General and administrative | $ | 23,458 | $ | 27,899 | $ | (4,441) | (15.9)% | ||||||||||||||||
As % of net sales | 19.5 | % | 8.6 | % |
Three-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
Research and development | $ | 5,405 | $ | 5,688 | $ | (283) | (5.0)% | ||||||||||||||||
As % of net sales | 8.3 | % | 4.1 | % |
Six-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
Research and development | $ | 11,229 | $ | 10,503 | $ | 726 | 6.9% | ||||||||||||||||
As % of net sales | 9.3 | % | 3.3 | % |
Three-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
Income tax expense | $ | 156 | $ | 2,242 | $ | (2,086) | (93.0)% | ||||||||||||||||
Effective tax rate | (1.0) | % | (96.4) | % | |||||||||||||||||||
Six-Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | $ | % | ||||||||||||||||||||
Income tax expense | $ | 8,251 | $ | 5,680 | $ | 2,571 | 45.3% | ||||||||||||||||
Effective tax rate | (12.3) | % | 37.5 | % |
Exhibit No. | Description | |||||||
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. | ||||||||
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. | ||||||||
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities and Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
* Indicates management contract, compensatory agreement or arrangement, in which our directors or executive officers may participate. |
NAUTILUS, INC. | |||||||||||
(Registrant) | |||||||||||
November 9, 2022 | By: | /S/ James Barr IV | |||||||||
Date | James Barr IV | ||||||||||
Chief Executive Officer |
NAUTILUS, INC. | |||||||||||
(Registrant) | |||||||||||
November 9, 2022 | By: | /S/ Aina E. Konold | |||||||||
Date | Aina E. Konold | ||||||||||
Chief Financial Officer |
November 9, 2022 | By: | /s/ James Barr IV | |||||||||
Date | James Barr IV | ||||||||||
Chief Executive Officer |
November 9, 2022 | By: | /s/ Aina E. Konold | |||||||||
Date | Aina E. Konold | ||||||||||
Chief Financial Officer |
November 9, 2022 | By: | /s/ James Barr IV | |||||||||
Date | James Barr IV | ||||||||||
Chief Executive Officer |
November 9, 2022 | By: | /s/ Aina E. Konold | |||||||||
Date | Aina E. Konold | ||||||||||
Chief Financial Officer |
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful trade receivables | $ 728 | $ 598 |
Debt Issuance Costs, Current, Net | 57 | 57 |
Debt Issuance Costs, Noncurrent, Net | $ 175 | $ 204 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 31,714,000 | 31,268,000 |
Common stock, shares outstanding | 31,714,000 | 31,268,000 |
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (13,203) | $ (4,602) | $ (73,380) | $ 9,282 |
Other comprehensive loss: | ||||
Unrealized loss on available-for-sale securities, net of income tax expense of $—, $7, $— and $— | 0 | (4) | 0 | (4) |
Foreign currency translation, net of income tax (expense) benefit of $(56), $(21), $(85) and $(8) | (1,221) | (411) | (2,080) | (194) |
Net other comprehensive income (loss) during period | (1,221) | (415) | (2,080) | (198) |
Comprehensive (loss) income | $ (14,424) | $ (5,017) | $ (75,460) | $ 9,084 |
Condensed Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2022 |
Jun. 30, 2022 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||||||
Unrealized gain (loss) on marketable securities, tax (benefit) expense | $ 0 | $ 7 | $ 0 | $ 0 | ||
Foreign currency translation tax expense (benefit) | $ (56) | $ (29) | $ (21) | $ 13 | $ (85) | $ (8) |
Condensed Consolidated Statements of Stockholders' Equity - Parenthetical (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2022 |
Jun. 30, 2022 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Statement of Stockholders' Equity [Abstract] | ||||||
Unrealized gain (loss) on marketable securities, tax (benefit) expense | $ 0 | $ 7 | $ 0 | $ 0 | ||
Foreign currency translation tax expense (benefit) | $ 56 | $ 29 | $ 21 | $ (13) | $ 85 | $ 8 |
General Information |
6 Months Ended |
---|---|
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General Information | GENERAL INFORMATION Basis of Consolidation and Presentation The accompanying condensed consolidated financial statements present the financial position, results of operations and cash flows of Nautilus, Inc. and its subsidiaries, all of which are wholly owned. Intercompany transactions and balances have been eliminated in consolidation. The accompanying condensed consolidated financial statements have not been audited. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management believes the disclosures contained herein are adequate to make the information presented not misleading. However, these condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (the “2022 Form 10-K”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Uncertainties regarding such estimates and assumptions are inherent in the preparation of financial statements and actual results could differ from those estimates. These uncertainties will be heightened by the COVID-19 pandemic, as we may be unable to accurately predict the impact of COVID-19 going forward and as a result our estimates may change in the near term. Further information regarding significant estimates can be found in our 2022 Form 10-K. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of September 30, 2022 and March 31, 2022, and our results of operations, comprehensive (loss) income and shareholders' equity for the three and six-month periods ended September 30, 2022 and 2021 and our cash flows for the six-month periods ended September 30, 2022 and 2021. Interim results are not necessarily indicative of results for a full year. Our revenues typically vary seasonally, and this seasonality can have a significant effect on operating results, inventory levels and working capital needs. Unless indicated otherwise, all information regarding our operating results pertain to our continuing operations. Recent Accounting Pronouncements Recently Adopted Pronouncements ASU 2020-01 In January 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815).” The amendments in ASU 2020-01 clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. ASU 2020-01 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of ASU 2020-01 in the first quarter of the fiscal year ending March 31, 2023 ("fiscal 2023") did not have any effect on our financial position, results of operations or cash flows. ASU 2020-04 and ASU 2021-01 In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848),” which provides optional guidance related to reference rate reform and provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for our borrowing instruments, which use London Inter-bank Offered Rate (“LIBOR”) as a reference rate, which is effective beginning on March 12, 2020, and we may elect to apply the amendments prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848),” which permits entities to apply optional expedients in Topic 848 to derivative instruments modified because of discounting transition resulting from reference rate reform. The adoption of this guidance had no material impact on our financial position, results of operations or cash flows. Recently Issued Pronouncements Not Yet Adopted ASU 2016-13 In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In May 2019, the FASB issued ASU 2019-05, which provides entities to have certain instruments with an option to irrevocably elect the fair value option. In November 2019, the FASB issued ASU 2019-11, which provides clarification and addresses specific issues about certain aspects of ASU 2016-13. In March 2020, the FASB issued ASC 2020-03, which provides an update to clarify or address specific issues. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those years. We do not expect the adoption of this guidance would have a material impact on our financial position, results of operations and cash flows.
|
Revenues |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | REVENUES Our revenues from contracts with customers disaggregated by revenue source, excluding sales-based taxes, were as follows (in thousands):
(1) Other revenue is primarily subscription revenue, freight and delivery and royalty income. Subscriptions Sales of our subscriptions are deemed to be one performance obligation and we recognize revenue from these arrangements ratably over the subscription term as the performance obligation is satisfied. Revenue generated from subscriptions is recorded in our Direct segment. We also offer free trials of subscriptions that are bundled with product offerings (e.g., subscription for premium content). For these types of transactions that involve multiple performance obligations, the transaction price requires allocations to the distinct performance obligation because the free trial provides a material right. The transaction price is then allocated to each performance obligation based on stand-alone selling price. We determine stand-alone selling price based on prices charged to customers. Breakage is factored into the determination of the stand-alone selling price of a subscription. Breakage or activation rate, is defined as a percentage of those purchasers that never activate a free-trial offering. Our revenues disaggregated by geographic region, based on ship-to address, were as follows (in thousands):
As of September 30, 2022, estimated revenue expected to be recognized in the future totaled $32.9 million, primarily related to customer order backlog, which includes firm orders for future shipment and unfulfilled orders to our Retail customers, as well as unfulfilled consumer orders within the Direct channel. Retail orders were $32.6 million and Direct orders were $0.3 million as of September 30, 2022 compared to Retail orders of $82.9 million and Direct orders of $1.1 million as of September 30, 2021. The estimated future revenues are net of contractual rebates and consideration payable for applicable Retail customers, and net of current promotional programs and sales discounts for our Direct customers. The following table provides information about our liabilities from contracts with customers, primarily customer deposits and deferred revenue for which advance consideration is received prior to the transfer of control or the performance obligation is not satisfied. Revenue is recognized when transfer of control occurs. All customer deposits and deferred revenue received are short-term in nature, recognized over the next twelve months. Significant changes in contract liabilities balances, including revenue recognized in the reporting period that was included in opening contract liabilities, are shown below (in thousands):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS Factors used in determining the fair value of financial assets and liabilities are summarized into three broad categories: •Level 1 - observable inputs such as quoted prices (unadjusted) in active liquid markets for identical securities as of the reporting date; •Level 2 - other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds and credit risk, or observable market prices in markets with insufficient volume and/or infrequent transactions; and •Level 3 - significant inputs that are generally unobservable inputs for which there is little or no market data available, including our own assumptions in determining fair value. Assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):
For our assets measured at fair value on a recurring basis, we recognize transfers between levels at the actual date of the event or change in circumstance that caused the transfer. There were no transfers between levels during the six-month period ended September 30, 2022, nor for the fiscal year ended March 31, 2022 ("fiscal 2022"). Additionally, we did not have any changes to our valuation techniques during either of these periods. The fair values of our foreign currency forward contracts are calculated as the present value of estimated future cash flows using discount factors derived from relevant Level 2 market inputs, including forward curves and volatility levels. The carrying value of our debt approximates its fair value and falls under Level 2 of the fair value hierarchy, as the interest rate is variable and based on current market rates. During the six-month period ended September 30, 2022, we evaluated the fair value of our goodwill and intangible assets because triggering events were identified. See Note 8 for additional information.
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Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | DERIVATIVES From time to time, we enter into interest rate swaps to fix a portion of our interest expense, and foreign exchange forward contracts to offset the earnings impacts of exchange rate fluctuations on certain monetary assets and liabilities. We do not enter into derivative instruments for any purpose other than to manage interest rate or foreign currency exposure. That is, we do not engage in interest rate or currency exchange rate speculation using derivative instruments. We may hedge our net recognized foreign currency assets and liabilities with forward foreign exchange contracts to reduce the risk that our earnings and cash flows will be adversely affected by changes in foreign currency exchange rates. These derivative instruments hedge assets and liabilities that are denominated in foreign currencies and are carried at fair value with changes in the fair value recorded as other income. These derivative instruments do not subject us to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the assets and liabilities being hedged. As of September 30, 2022, total outstanding contract notional amounts were $20.0 million and had maturities of 112 days or less. The fair value of our derivative instruments was included in our condensed consolidated balance sheets as follows (in thousands):
The effect of derivative instruments on our condensed consolidated statements of operations was as follows (in thousands):
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Inventories |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | INVENTORIES Inventories are stated at the lower of cost and net realizable value, with cost determined based on the first-in, first-out method. Our inventories consisted of the following (in thousands):
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Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following (in thousands):
(1) Work in progress includes information technology assets and production tooling. Depreciation expense was as follows (in thousands):
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The roll forward of goodwill was as follows (in thousands):
In accordance with ASC 350 — Intangibles — Goodwill and Other, we perform our goodwill and indefinite-lived trade names impairment valuations annually, on March 31, or sooner if triggering events are identified. While the fair value of our reporting units exceeded their respective carrying values as of March 31, 2022, we observed continued market volatility including significant declines in our market capitalization during the three-month period ended June 30, 2022, identified as a triggering event. Our trailing 30-day average market capitalization was approximately $137 million at March 31, 2022 compared to $66 million, the trailing 30-day average, as of June 30, 2022. We performed an interim evaluation and a market capitalization reconciliation during the first quarter of fiscal 2023, which resulted in a non-cash goodwill impairment charge of $24.5 million. During the three-month period ended September 30, 2022, we observed continued market volatility including declines in our market capitalization subsequent to September 30, 2022, which in part could increase the possibility of a future impairment charge. Based on our analysis, including our market capitalization during the period, we determined there were no triggering events during the quarter ended September 30, 2022. We assigned assets and liabilities to each reporting unit based on either specific identification or by using judgment for the remaining assets and liabilities that are not specific to a reporting unit. We determined the fair value of our reporting units in Step 1 of the ASC 350 analysis using the market approach. In addition, we determined the fair value by adding a control premium observed from recent transactions of comparable companies to determine the reasonableness of that assumption and the fair values of the reporting units estimated in Step 1. Significant unobservable inputs and assumptions inherent in the valuation methodologies from Level 3 inputs were employed and include, but were not limited to, prospective financial information, growth rates, terminal value, royalty rates, discount rates, and comparable multiples from publicly traded companies in our industry. We compared the carrying amount of each reporting unit to its respective fair value. We reconciled the aggregate fair values of the reporting units determined in Step 1 (as described above) to the enterprise market capitalization plus a reasonable control premium. This total value was compared to a trailing 30-day average market capitalization of approximately $66 million as of June 30, 2022. As a result, the market capitalization reconciliation analysis identified that the Direct reporting unit's fair value was significantly lower than its carrying value, resulting in a non-cash goodwill impairment charge of $24.5 million. Other Intangible Assets Other intangible assets consisted of the following (in thousands):
(1) During the first quarter of fiscal 2023, we identified impairment indicators with our indefinite-lived trademarks resulting in a $2.5 million non-cash intangible impairment charge. Amortization expense was as follows (in thousands):
Future amortization of definite-lived intangible assets is as follows (in thousands):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES We have several non-cancellable operating leases, primarily for office space, that expire at various dates over the next eight years. These leases generally contain renewal options to extend for one lease term of five years. For leases that we are reasonably certain we will exercise the lease renewal options, the options were considered in determining the lease term, and associated potential option payments are included in the lease payments. The payments used in the renewal term were estimated using the percentage rate increase of historical rent payments for each location where the renewal will be exercised. Payments due under the lease contracts include annual fixed payments for office space. Variable payments including payments for our proportionate share of the building’s property taxes, insurance, and common area maintenance are treated as non-lease components and are recognized in the period for which the costs occur. Lease expense was as follows (in thousands):
Leases with an initial term of 12 months or less (“short-term lease”) are not recorded on the balance sheet and are recognized on a straight-line basis over the lease term. Other information related to leases was as follows (dollars in thousands):
We determined the discount rate for leases using a portfolio approach to determine an incremental borrowing rate to calculate the right-of-use assets and lease liabilities. Maturities of lease liabilities under non-cancellable leases were as follows (in thousands):
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Accrued Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consisted of the following (in thousands):
(1) Reserves primarily consists of inventory, sales return, sales tax and product liability reserves. (2) Legal settlement is a loss contingency accrual related to a legal settlement involving a class action lawsuit related to advertisement of our treadmills. For further information, see Note 17, Commitments and Contingencies
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Product Warranties |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties | PRODUCT WARRANTIESOur products carry defined warranties for defects in materials or workmanship which, according to their terms, generally obligate us to pay the costs of supplying and shipping replacement parts to customers and, in certain instances, pay for labor and other costs to service products. Outstanding product warranty periods range from thirty days to, in limited circumstances, the lifetime of certain product components. We record a liability at the time of sale for the estimated costs of fulfilling future warranty claims. If necessary, we adjust the liability for specific warranty-related matters when they become known and are reasonably estimable. Estimated warranty expense is included in cost of sales, based on historical warranty claim experience and available product quality data. Warranty expense is affected by the performance of new products, significant manufacturing or design defects not discovered until after the product is delivered to the customer, product failure rates, and higher or lower than expected repair costs. If warranty expense differs from previous estimates, or if circumstances change such that the assumptions inherent in previous estimates are no longer valid, the amount of product warranty obligations is adjusted accordingly. Changes in our product warranty obligations were as follows (in thousands):
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Accumulated Other Comprehensive Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables set forth the changes in accumulated other comprehensive loss, net of tax (in thousands):
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(Loss) Income Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Loss) Income Per Share | (LOSS) INCOME PER SHARE Basic per share amounts were computed using the weighted average number of common shares outstanding. Diluted per share amounts were calculated using the number of basic weighted average shares outstanding increased by dilutive potential common shares related to stock-based awards, as determined by the treasury stock method. Basic income per share amounts were computed using the weighted average number of common shares outstanding. Diluted income per share amounts were calculated using the number of basic weighted average shares outstanding increased by dilutive potential common shares related to stock-based awards, as determined by the treasury stock method. The weighted average numbers of shares outstanding used to compute (loss) income per share were as follows (in thousands):
Dilutive Shares The weighted average numbers of shares outstanding listed in the table below were dilutive and are excluded from the computation of diluted per share due when there is a loss from continuing operations, as such, the exercise or conversion of any potential shares would increase the number of shares in the denominator and results in a lower income (loss) per share. These shares may be dilutive potential common shares in the future (in thousands):
Anti-dilutive Shares The weighted average numbers of shares outstanding listed in the table below were anti-dilutive and excluded from the computation of diluted income (loss) per share. In the case of restricted stock units, this is because unrecognized compensation expense exceeds the current value of the awards (i.e., grant date market value was higher than current average market price). In the case of stock options, this is because the average market price did not exceed the exercise price. These shares may be anti-dilutive potential common shares in the future (in thousands):
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Segment and Enterprise-wide Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Enterprise-wide Information | SEGMENT AND ENTERPRISE-WIDE INFORMATION We have two operating segments, Direct and Retail. There were no changes in our operating segments during the six-months ended September 30, 2022. We evaluate performance of the operating segments using several factors, of which the primary financial measures are net sales and reportable segment contribution. Contribution is the measure of profit or loss, defined as net sales less product costs and directly attributable expenses. Directly attributable expenses include selling and marketing expenses, general and administrative expenses, and research and development expenses that are directly related to segment operations. Segment assets are those directly assigned to an operating segment's operations, primarily accounts receivable, inventories, goodwill and other intangible assets. Unallocated assets primarily include cash, cash equivalents and restricted cash, derivative securities, shared information technology infrastructure, distribution centers, corporate headquarters, prepaids and other current assets, deferred income tax assets and other assets. Capital expenditures directly attributable to the Direct and Retail segments were not significant in any period. Following is summary information by reportable segment (in thousands):
The following customers accounted for 10% or more of total net sales as follows:
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Borrowings |
6 Months Ended |
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Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS Wells Fargo Bank Credit Agreement On October 29, 2021, we amended our Credit Agreement dated January 31, 2020 (the "Credit Agreement"), with Wells Fargo Bank, National Association and lenders from time to time party thereto (the "Lenders”). The Lenders agreed, among other things, to make available to us an asset-based revolving loan facility, subject to a borrowing base (the “ABL Revolving Facility”), and a term loan facility (the “Term Loan Facility” and together with the ABL Revolving Facility, the “Credit Facility”). The aggregate principal amount available under the ABL Revolving Facility is $100.0 million (the “Revolver”), subject to a borrowing base. The unamortized balance on the Term Loan Facility was $11.5 million. The Credit Facility matures on October 29, 2026 and repayment of obligations under the Credit Agreement is secured by substantially all of our assets, with principal and interest amounts required to be paid as scheduled. As of September 30, 2022, outstanding borrowings totaled $47.3 million, with $9.2 million and $38.1 million under our Term Loan Facility and Revolver, respectively. As of September 30, 2022, we were in compliance with the financial covenants of the Credit Agreement and $22.2 million was available for borrowing under the ABL Revolving Facility. Interest on the Revolver will accrue at the Secured Overnight Financing Rate ("SOFR") plus a margin of 1.86% to 2.36% (based on average quarterly availability) and interest on the Term Loan Facility will accrue at SOFR plus 4.61%. As of September 30, 2022, our interest rate was 4.86% for the Revolver and 7.61% for the Term Loan Facility. The balance sheet classification of the borrowings under the revolving loan credit facility has been determined in accordance with ASC 470, Debt.
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Income Taxes |
6 Months Ended |
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Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Valuation Allowance Under ASC Topic 740, Accounting for Income Taxes, we must periodically evaluate deferred tax assets to determine if it is more-likely-than-not that the future tax benefits will be realized. If the negative evidence outweighs the positive, a valuation allowance must be recognized to reduce the net carrying amount of the deferred tax assets to the amount more-likely-than-not to be realized. Evaluating the need for, and amount of, a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence on a jurisdiction-by-jurisdiction basis. Such judgments require us to interpret existing tax law and other published guidance as applied to our circumstances. As part of this assessment, we consider both positive and negative evidence. The weight given to the potential effect of positive and negative evidence must be commensurate with the extent to which the strength of the evidence can be objectively verified. We generally consider the following, but are not limited to, objectively verified evidence to determine the likelihood of realization of the deferred tax assets: •Our current financial position and our historical results of operations for recent years. We generally consider cumulative pre-tax losses in the three-year period ending with the current quarter or a projected three-year cumulative loss position within the next 12 months following the current quarter to be significant negative evidence. •A pattern of objectively-measured historical and current financial reporting loss trend is heavily weighted as a source of negative evidence. •Sources of taxable income of the appropriate character. Future realization of deferred tax assets is dependent on projected taxable income of the appropriate character. Future reversals of existing temporary differences are heavily weighted sources of objectively verifiable evidence. Projections of future taxable income exclusive of reversing temporary differences are a source of positive evidence only when the projections are combined with a history of recent profits and current financial trends and can be reasonably estimated. •Carry-back and carry-forward periods available. The carry-back and carry-forward periods permitted under the tax law are objectively verified evidence. •Tax planning strategies. Tax planning strategies can be, depending on their nature, heavily-weighted sources of objectively verifiable positive evidence when the strategies are available and can be reasonably executed. We consider tax planning strategies only if they are feasible and justifiable considering our current operations and our strategic plan. Tax planning strategies, if executed, may accelerate the recovery of a deferred tax asset so the tax benefit of the deferred tax asset can be carried back. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. In the first quarter of fiscal 2023, a significant new piece of objective negative evidence evaluated was the third year of cumulative losses projected within the next twelve months. Such objective evidence limits our ability to consider other subjective evidence, such as our projections for future growth. Based on this evaluation in the first quarter of fiscal 2023, Management concluded that it was no longer more likely than not that the tax benefits from the existing U.S deferred tax assets would be realized. Management sustains the same position in the current quarter hence we continue to recognize a valuation allowance to reduce its U.S deferred tax assets to an anticipated realizable value. We recognized a $3.6 million and a $17.8 million valuation allowance in the three and six months ended September 30, 2022, respectively, against our domestic uncovered net deferred tax assets. Unrecognized Tax Benefits We recognize a tax benefit from uncertain tax positions in the financial statements only when it is more likely than not the position will be sustained upon examination by relevant tax authorities. We also recognize interest and penalties related to income tax matters in Income tax expense. In September 2022, we effectively completed a tax deregistration of a foreign entity that was part of our former Commercial business. We had $0.1 million of unrecognized tax benefits from an uncertain tax position outstanding related to this foreign entity. Further we had a $2.0 million cumulative liability for interest and penalties associated with the uncertain tax position. As a result of the completion of the tax deregistration, we released this $2.1 million of corresponding liability as a component of income taxes from discontinued operations in the second quarter of fiscal 2023.
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Commitments and Contingencies |
6 Months Ended |
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Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Operating leases We lease property and equipment under non-cancellable operating leases which, in the aggregate, extend through 2029. Many of these leases contain renewal options and provide for rent escalations and payment of real estate taxes, maintenance, insurance and certain other operating expenses of the properties. For additional information related to leases, see Note 9 Leases. Guarantees, Commitments and Off-Balance Sheet Arrangements As of September 30, 2022, we had standby letters of credit of $0.9 million. We have long lead times for inventory purchases and, therefore, must secure factory capacity from our vendors in advance. As of September 30, 2022, we had approximately $25.3 million compared to $39.8 million as of March 31, 2022 in non-cancellable market-based purchase obligations, primarily to secure additional factory capacity for inventory purchases in the next twelve months. The decrease in purchase obligations was primarily due to having received much of the inventory we have ordered for the season. Purchase obligations can vary from quarter-to-quarter and versus the same period in prior years due to a number of factors, including the amount of products that are shipped directly to Retail customer warehouses versus through Nautilus warehouses. In the ordinary course of business, we enter into agreements that require us to indemnify counterparties against third-party claims. These may include: agreements with vendors and suppliers, under which we may indemnify them against claims arising from use of their products or services; agreements with customers, under which we may indemnify them against claims arising from their use or sale of our products; real estate and equipment leases, under which we may indemnify lessors against third-party claims relating to the use of their property; agreements with licensees or licensors, under which we may indemnify the licensee or licensor against claims arising from their use of our intellectual property or our use of their intellectual property; and agreements with parties to debt arrangements, under which we may indemnify them against claims relating to their participation in the transactions. The nature and terms of these indemnification obligations vary from contract to contract, and generally a maximum obligation is not stated within the agreements. We hold insurance policies that mitigate potential losses arising from certain types of indemnification obligations. Management does not deem these obligations to be significant to our financial position, results of operations or cash flows, and therefore, no related liabilities were recorded as of September 30, 2022. Legal Matters From time to time, in the ordinary course of business, we may be involved in various claims, lawsuits and other proceedings. These legal and tax proceedings involve uncertainty as to the eventual outcomes and losses which may be realized when one or more future events occur or fail to occur. We regularly monitor our estimated exposure to these contingencies and, as additional information becomes known, may change our estimates accordingly. We evaluate, on a quarterly basis, developments in legal proceedings, investigations or claims that could affect the amount of any accrual, as well as any developments that would make a loss probable or reasonably possible, and whether the amount of a probable or reasonably possible loss is estimable. Among other factors, we evaluate the advice of internal and external counsel, the outcomes from similar litigation, the current status of the lawsuits (including settlement initiatives), legislative developments and other factors. Due to the numerous variables associated with these judgments and assumptions, both the precision and reliability of the resulting estimates of the related loss contingencies are subject to substantial uncertainties. Further, while we face contingencies that are reasonably possible to occur, other than as discussed below, we are unable to estimate the possible loss or range of loss at this time. During the second quarter of fiscal 2022, we recorded a $4.7 million loss contingency related to a legal settlement involving a class action lawsuit related to advertisement of our treadmills. The settlement included damages, a one-year free membership to JRNY®, and administrative fees and was included as a component of General and administrative on our Condensed Consolidated Statements of Operations. We paid the settlement damages and related administrative fees during the second fiscal quarter of fiscal 2023.
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General Information (Policies) |
6 Months Ended |
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Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Pronouncements ASU 2020-01 In January 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815).” The amendments in ASU 2020-01 clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. ASU 2020-01 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of ASU 2020-01 in the first quarter of the fiscal year ending March 31, 2023 ("fiscal 2023") did not have any effect on our financial position, results of operations or cash flows. ASU 2020-04 and ASU 2021-01 In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848),” which provides optional guidance related to reference rate reform and provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. This guidance is applicable for our borrowing instruments, which use London Inter-bank Offered Rate (“LIBOR”) as a reference rate, which is effective beginning on March 12, 2020, and we may elect to apply the amendments prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848),” which permits entities to apply optional expedients in Topic 848 to derivative instruments modified because of discounting transition resulting from reference rate reform. The adoption of this guidance had no material impact on our financial position, results of operations or cash flows. Recently Issued Pronouncements Not Yet Adopted ASU 2016-13 In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In May 2019, the FASB issued ASU 2019-05, which provides entities to have certain instruments with an option to irrevocably elect the fair value option. In November 2019, the FASB issued ASU 2019-11, which provides clarification and addresses specific issues about certain aspects of ASU 2016-13. In March 2020, the FASB issued ASC 2020-03, which provides an update to clarify or address specific issues. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those years. We do not expect the adoption of this guidance would have a material impact on our financial position, results of operations and cash flows.
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Revenues (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Our revenues from contracts with customers disaggregated by revenue source, excluding sales-based taxes, were as follows (in thousands):
(1) Other revenue is primarily subscription revenue, freight and delivery and royalty income. Subscriptions Sales of our subscriptions are deemed to be one performance obligation and we recognize revenue from these arrangements ratably over the subscription term as the performance obligation is satisfied. Revenue generated from subscriptions is recorded in our Direct segment. We also offer free trials of subscriptions that are bundled with product offerings (e.g., subscription for premium content). For these types of transactions that involve multiple performance obligations, the transaction price requires allocations to the distinct performance obligation because the free trial provides a material right. The transaction price is then allocated to each performance obligation based on stand-alone selling price. We determine stand-alone selling price based on prices charged to customers. Breakage is factored into the determination of the stand-alone selling price of a subscription. Breakage or activation rate, is defined as a percentage of those purchasers that never activate a free-trial offering. Our revenues disaggregated by geographic region, based on ship-to address, were as follows (in thousands):
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Contract with Customer, Asset and Liability |
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):
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Derivatives (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value of our derivative instruments was included in our condensed consolidated balance sheets as follows (in thousands):
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Derivative Instruments, Gain (Loss) | The effect of derivative instruments on our condensed consolidated statements of operations was as follows (in thousands):
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories, Net of Valuation Allowances | Our inventories consisted of the following (in thousands):
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Property, Plant, and Equipment (Tables) |
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following (in thousands):
(1) Work in progress includes information technology assets and production tooling.
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Schedule Of Depreciation Expense | Depreciation expense was as follows (in thousands):
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Goodwill and Other Intangible Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The roll forward of goodwill was as follows (in thousands):
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Schedule of Finite-Lived Intangible Assets | Other intangible assets consisted of the following (in thousands):
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Schedule of Indefinite-Lived Intangible Assets | Other intangible assets consisted of the following (in thousands):
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Amortization Expense | Amortization expense was as follows (in thousands):
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future amortization of definite-lived intangible assets is as follows (in thousands):
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | Lease expense was as follows (in thousands):
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Lessee, Supplemental Cash Flows Information | Other information related to leases was as follows (dollars in thousands):
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Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities under non-cancellable leases were as follows (in thousands):
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Accrued Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands):
(1) Reserves primarily consists of inventory, sales return, sales tax and product liability reserves. (2) Legal settlement is a loss contingency accrual related to a legal settlement involving a class action lawsuit related to advertisement of our treadmills. For further information, see Note 17, Commitments and Contingencies
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Product Warranties (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | Changes in our product warranty obligations were as follows (in thousands):
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Accumulated Other Comprehensive Loss (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following tables set forth the changes in accumulated other comprehensive loss, net of tax (in thousands):
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(Loss) Income Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The weighted average numbers of shares outstanding used to compute (loss) income per share were as follows (in thousands):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The weighted average numbers of shares outstanding listed in the table below were anti-dilutive and excluded from the computation of diluted income (loss) per share. In the case of restricted stock units, this is because unrecognized compensation expense exceeds the current value of the awards (i.e., grant date market value was higher than current average market price). In the case of stock options, this is because the average market price did not exceed the exercise price. These shares may be anti-dilutive potential common shares in the future (in thousands):
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Segment and Enterprise-wide Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Information by Reportable Segments | Following is summary information by reportable segment (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of Concentration of Risk, by Risk Factor | The following customers accounted for 10% or more of total net sales as follows:
|
General Information (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2021 |
---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Restricted cash | $ 946 | $ 1,339 | $ 1,339 |
Derivatives - Narrative (Details) - Foreign Exchange Forward [Member] $ in Millions |
6 Months Ended |
---|---|
Sep. 30, 2022
USD ($)
| |
Derivative [Line Items] | |
Derivative, notional amount | $ 20.0 |
Derivative, term of contract | 112 days |
Derivatives - Fair value of derivative instruments (Details) - Foreign currency forward contracts - Derivative instruments not designated as cash flow hedges: - USD ($) $ in Thousands |
Sep. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of liability derivatives | $ 754 | $ 128 |
Prepaids and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency forward contracts | $ 25 | $ 0 |
Derivatives - Effect On Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other, net | Other, net | Other, net | Other, net |
Not Designated as Hedging Instruments | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss recognized in earnings | $ (685) | $ (943) | $ (589) | $ (960) |
Not Designated as Hedging Instruments | Income tax expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Income tax benefit | $ (170) | $ 238 | $ (146) | $ 234 |
Inventories (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished goods | $ 94,146 | $ 104,988 |
Parts and components | 5,064 | 6,202 |
Total inventories | $ 99,210 | $ 111,190 |
Property, Plant and Equipment - Depreciation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 2,464 | $ 1,909 | $ 4,755 | $ 3,948 |
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands |
3 Months Ended |
---|---|
Sep. 30, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill impairment | $ (24,510) |
Goodwill, ending balance | $ 0 |
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2022 |
Mar. 31, 2022 |
|
Goodwill [Line Items] | |||
Market capitalization, average value | $ 66,000 | $ 66,000 | $ 137,000 |
Goodwill, impairment charge | 24,510 | ||
Indefinite-lived trademarks | 6,597 | 6,597 | 9,052 |
Total other intangible assets, gross | 7,640 | 7,640 | 10,095 |
Accumulated amortization - definite-lived intangible assets | (822) | (822) | (791) |
Other intangible assets, net | 6,818 | 6,818 | 9,304 |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 2,500 | ||
Patents | |||
Goodwill [Line Items] | |||
Finite-lived intangible assets, gross | $ 1,043 | $ 1,043 | $ 1,043 |
Patents | Minimum | |||
Goodwill [Line Items] | |||
Estimated Useful Life (in years) | 7 years | ||
Patents | Maximum | |||
Goodwill [Line Items] | |||
Estimated Useful Life (in years) | 24 years |
Goodwill and Other Intangible Assets - Patent amortization (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 16 | $ 16 | $ 31 | $ 31 |
Goodwill and Other Intangible Assets - Future intangible amortization (Details) $ in Thousands |
Sep. 30, 2022
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of fiscal 2023 | $ 31 |
2024 | 61 |
2025 | 61 |
2026 | 47 |
2027 | 3 |
Thereafter | 18 |
Finite-Lived Intangible Assets, Net | $ 221 |
Leases - Additional information (Details) |
Sep. 30, 2022
term
|
---|---|
Leases [Abstract] | |
Operating lease, term of contract | 8 years |
Operating lease, number of renewal terms | 1 |
Operating lease, renewal term | 5 years |
Leases - Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Leases [Abstract] | ||||
Operating lease expense | $ 1,527 | $ 1,466 | $ 3,060 | $ 2,932 |
Amortization of finance lease assets | 29 | 0 | 57 | 0 |
Total lease expense | $ 1,556 | $ 1,466 | $ 3,117 | $ 2,932 |
Leases - Maturity (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Operating leases | ||
2023 | $ 2,370 | |
2024 | 5,515 | |
2025 | 5,585 | |
2026 | 4,503 | |
2027 | 2,348 | |
Thereafter | 5,796 | |
Total undiscounted lease payments | 26,117 | |
Less imputed interest | (3,441) | |
Total lease liabilities | 22,676 | $ 25,420 |
Finance leases | ||
2023 | 60 | |
2024 | 120 | |
2025 | 120 | |
2026 | 120 | |
2027 | 60 | |
Thereafter | 0 | |
Total undiscounted lease payments | 480 | |
Less imputed interest | (20) | |
Total finance lease liabilities | $ 460 | $ 514 |
Accrued Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Payables and Accruals [Abstract] | ||
Deferred revenue | $ 4,194 | $ 6,285 |
Reserves | 959 | 4,433 |
Employee-related Liabilities, Current | 10,390 | 10,405 |
Legal settlement | 287 | 4,250 |
Other | 4,127 | 4,013 |
Total accrued liabilities | $ 19,957 | $ 29,386 |
Product Warranties (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Movement in Product Warranty Liability [Roll Forward] | ||
Balance, beginning of period | $ 6,216 | $ 9,782 |
Accruals (1) | 1,882 | (551) |
Payments | (3,748) | (1,865) |
Balance, end of period | $ 4,350 | $ 7,366 |
Minimum | ||
Product Liability Contingency [Line Items] | ||
Product warranty period | 30 days |
(Loss) Income Per Share - Anti-dilutive Common Shares (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 1,870 | 409 | 1,561 | 297 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 174 | 2 | 88 | 2 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 1,696 | 407 | 1,473 | 295 |
Segment and Enterprise-wide Information - Concentration (Details) - Sales Revenue, Net - Customer Concentration Risk |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Amazon.com | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 33.70% | 15.40% | 31.70% | 16.80% |
Best Buy | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 18.60% | 17.80% |
Income Taxes (Details) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2022
USD ($)
|
|
Income Tax Disclosure [Abstract] | ||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 3,600 | $ 17,800 |
Unrecognized Tax Benefits | 100 | 100 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 2,000 | $ 2,000 |
Unrecognized Tax Benefits, Period Increase (Decrease) | $ 2,100 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2022 |
Mar. 31, 2022 |
|
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Standby letters of credit outstanding | $ 0.9 | ||
Loss contingency | $ 4.7 | ||
Inventories | |||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Non-cancelable market-based purchase obligation | $ 25.3 | $ 39.8 |
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