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 | ☐ | 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 | |||||||||||
December 31, 2023 | March 31, 2023 | ||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Trade receivables, net of allowances of $ | |||||||||||
Inventories | |||||||||||
Prepaids and other current assets | |||||||||||
Income taxes receivable | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
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 21) | |||||||||||
Shareholders' equity: | |||||||||||
Common stock - | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total shareholders' equity | |||||||||||
Total liabilities and shareholders' equity | $ | $ |
Three-Months Ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling and marketing | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Restructuring and exit charges | |||||||||||||||||||||||
Goodwill and asset impairment charge | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating loss | ( | ( | ( | ( | |||||||||||||||||||
Other (expense) income | |||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Other, net | ( | ( | |||||||||||||||||||||
Total other (expense) income, net | ( | ( | ( | ||||||||||||||||||||
Loss from continuing operations before income taxes | ( | ( | ( | ( | |||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Loss from continuing operations | ( | ( | ( | ( | |||||||||||||||||||
Discontinued operations: | |||||||||||||||||||||||
Loss from discontinued operations before income taxes | ( | ( | |||||||||||||||||||||
Income tax benefit of discontinued operations | ( | ( | |||||||||||||||||||||
Loss (gain) from discontinued operations | ( | ||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Basic loss per share from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Basic income per share from discontinued operations | |||||||||||||||||||||||
Basic net loss per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted loss per share from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted income per share from discontinued operations | |||||||||||||||||||||||
Diluted net loss per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Shares used in per share calculations: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Three-Months Ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Foreign currency translation, net of income tax benefit (expense) of $ | ( | ||||||||||||||||||||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
Common Stock | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||
Shares | Amount | APIC | |||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of income tax benefit of $ | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock and pre-funded warrants, net | — | — | |||||||||||||||||||||||||||||||||
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, 2023 | ( | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of income tax expense of $ | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Issuance of common stock upon exercise of pre-funded warrants | ( | ||||||||||||||||||||||||||||||||||
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, September 30, 2023 | — | ( | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
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, December 31, 2023 | $ | $ | — | $ | $ | ( | $ |
Common Stock | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | 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 | ( | ||||||||||||||||||||||||||||
Net loss | — | — | ( | — | ( | ||||||||||||||||||||||||
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, December 31, 2022 | $ | $ | $ | ( | $ |
Nine-Months Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Loss from continuing operations | $ | ( | $ | ( | |||||||
Gain from discontinued operations | |||||||||||
Net loss | ( | ( | |||||||||
Adjustments to reconcile net loss to cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Provision for allowance for doubtful accounts | |||||||||||
Inventory lower-of-cost-or net realizable value adjustments | |||||||||||
Stock-based compensation expense | |||||||||||
Gain on asset dispositions | ( | ( | |||||||||
Loss on debt extinguishment | |||||||||||
Deferred income taxes, net of valuation allowances | |||||||||||
Goodwill and asset impairment charge | |||||||||||
Other | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Trade receivables | ( | ||||||||||
Inventories | ( | ||||||||||
Prepaids and other assets | |||||||||||
Income taxes receivable | |||||||||||
Trade payables | ( | ||||||||||
Liability classified stock-based compensation expense | |||||||||||
Accrued liabilities and other liabilities, including warranty obligations | ( | ( | |||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from investing activities: | |||||||||||
Proceeds from sale of equity investment | |||||||||||
Proceeds from sale of intellectual property | |||||||||||
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 of debt issuance costs | ( | ( | |||||||||
Early termination of debt | ( | ||||||||||
Payments on finance lease liabilities | ( | ( | |||||||||
Proceeds from public offering net of transaction costs | |||||||||||
Proceeds from employee stock purchases | |||||||||||
Tax payments related to stock award issuances | ( | ( | |||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
Effect of exchange rate changes | ( | ||||||||||
Net (decrease) increase 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 paid (received) 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: | |||||||||||
December 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Other current assets - restricted, current | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ | |||||||||
Employee Severance and Benefits | Third-Party Costs | Total | |||||||||||||||
Accrued liability as of March 31, 2023 | $ | $ | $ | ||||||||||||||
Charges / Accruals | |||||||||||||||||
Payments | ( | ( | ( | ||||||||||||||
Accrued Liability as of December 31, 2023 | $ | $ | $ |
Three-Months Ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Product sales | $ | $ | $ | $ | |||||||||||||||||||
Extended warranties and services | |||||||||||||||||||||||
Royalty income | |||||||||||||||||||||||
Other(1) | |||||||||||||||||||||||
Net sales | $ | $ | $ | $ |
Three-Months Ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
Canada | |||||||||||||||||||||||
Europe, the Middle East and Africa | |||||||||||||||||||||||
All other | |||||||||||||||||||||||
Net sales | $ | $ | $ | $ |
Three-Months Ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Cash changes | |||||||||||||||||||||||
Deferred Revenue | |||||||||||||||||||||||
Revenue recognition | ( | ( | ( | ( | |||||||||||||||||||
Balance, end of period | $ | $ | $ | $ |
December 31, 2023 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Common Warrants | $ | $ | $ | $ | ||||||||||||||||||||||
Total liabilities measured at fair value | $ | $ | $ | $ |
March 31, 2023 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||
Foreign currency forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Total liabilities measured at fair value | $ | $ | $ | $ | ||||||||||||||||||||||
Total | ||||||||
Liability balance as of March 31, 2023 | $ | |||||||
Additions of common warrant liability | ||||||||
Liability balance as of June 30, 2023 | ||||||||
Change in fair value of common warrant liability | ( | |||||||
Liability balance as of September 30, 2023 | ||||||||
Change in fair value of common warrant liability | ( | |||||||
Liability balance as of December 31, 2023 | $ |
Nine-Months Ended December 31, 2023 | |||||
Stock Price | $ | ||||
Exercise Price | $ | ||||
Expected Life (years) | |||||
Expected Volatility |
Expected Dividend Yield | |||||
Risk Free Rate |
Balance Sheet Classification | As of | |||||||||||||||||||
December 31, 2023 | March 31, 2023 | |||||||||||||||||||
Derivative instruments not designated as cash flow hedges: | ||||||||||||||||||||
Foreign currency forward contracts | Accrued liabilities | $ | $ | |||||||||||||||||
Statement of Operations Classification | Three-Months ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||
Derivative instruments not designated as cash flow hedges: | ||||||||||||||||||||||||||||||||
Income recognized in earnings | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Income tax benefit | Income tax benefit |
As of | |||||||||||
December 31, 2023 | March 31, 2023 | ||||||||||
Finished goods | $ | $ | |||||||||
Parts and components | |||||||||||
Total inventories | $ | $ |
Estimated Useful Life (in years) | As of | ||||||||||||||||||||||
December 31, 2023 | March 31, 2023 | ||||||||||||||||||||||
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 December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Depreciation expense | $ | $ | $ | $ |
Estimated Useful Life (in years) | As of | ||||||||||||||||||||||
December 31, 2023 | March 31, 2023 | ||||||||||||||||||||||
Indefinite-lived trademarks | N/A | $ | $ | ||||||||||||||||||||
Patents | to | ||||||||||||||||||||||
Accumulated amortization - definite-lived intangible assets | ( | ( | |||||||||||||||||||||
Other intangible assets, net | $ | $ |
Three-Months Ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Amortization expense | $ | $ | $ | $ |
Remainder of fiscal 2024 | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
$ |
Three-Months Ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Operating lease expense | $ | $ | $ | $ | |||||||||||||||||||
Amortization of finance lease assets | |||||||||||||||||||||||
Total lease expense | $ | $ | $ | $ | |||||||||||||||||||
As of | |||||||||||||||||
December 31, 2023 | March 31, 2023 | ||||||||||||||||
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 | $ | $ | |||||||||||||||
Reductions to ROU assets resulting from reductions to operating lease obligations | |||||||||||||||||
Reductions to ROU assets resulting from impairment of operating leases | |||||||||||||||||
Weighted Average Remaining Lease Term: | |||||||||||||||||
Operating leases | |||||||||||||||||
Finance leases | |||||||||||||||||
Weighted Average Discount Rate: | |||||||||||||||||
Operating leases | |||||||||||||||||
Finance leases |
As of December 31, 2023 | |||||||||||
Operating leases | Finance leases | ||||||||||
Remainder of fiscal 2024 | $ | $ | |||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
Thereafter | |||||||||||
Total undiscounted lease payments | |||||||||||
Less imputed interest | ( | ( | |||||||||
Total lease liabilities | $ | $ |
As of | |||||||||||
December 31, 2023 | March 31, 2023 | ||||||||||
Payroll and related liabilities | $ | $ | |||||||||
Deferred revenue | |||||||||||
Reserves (1) | |||||||||||
Accrued Tariffs | |||||||||||
Legal settlement | |||||||||||
Other | |||||||||||
Total accrued liabilities | $ | $ |
Nine-Months Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Balance, beginning of period | $ | $ | ||||||||||||
Accruals | ||||||||||||||
Payments | ( | ( | ||||||||||||
Balance, end of period | $ | $ | ||||||||||||
Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||
Balance, March 31, 2023 | $ | ( | $ | ( | |||||||
Current period other comprehensive income before reclassifications | |||||||||||
Balance, December 31, 2023 | $ | ( | $ | ( |
Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||
Balance, September 30, 2023 | $ | ( | $ | ( | |||||||
Current period other comprehensive loss before reclassifications | |||||||||||
Balance, December 31, 2023 | $ | ( | $ | ( |
Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||
Balance, March 31, 2022 | $ | ( | $ | ( | |||||||
Current period other comprehensive loss before reclassifications | ( | ( | |||||||||
Balance, December 31, 2022 | $ | ( | $ | ( | |||||||
Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||
Balance, September 30, 2022 | $ | ( | $ | ( | |||||||
Current period other comprehensive loss before reclassifications | |||||||||||
Balance, December 31, 2022 | $ | ( | $ | ( |
Three-Months Ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
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 December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Performance stock units | |||||||||||||||||||||||
Restricted stock units | |||||||||||||||||||||||
Stock options | |||||||||||||||||||||||
Total potentially dilutive shares excluded due to net loss |
Three-Months Ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Stock options | |||||||||||||||||||||||
RSUs | |||||||||||||||||||||||
Total anti-dilutive shares excluded |
Three-Months Ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
Direct | $ | $ | $ | $ | |||||||||||||||||||
Retail | |||||||||||||||||||||||
Royalty | |||||||||||||||||||||||
Consolidated net sales | $ | $ | $ | $ | |||||||||||||||||||
Contribution: | |||||||||||||||||||||||
Direct | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Retail | ( | ||||||||||||||||||||||
Royalty | |||||||||||||||||||||||
Consolidated contribution | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Reconciliation of consolidated contribution to loss from continuing operations: | |||||||||||||||||||||||
Consolidated contribution | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Amounts not directly related to segments: | |||||||||||||||||||||||
Operating expenses(1)(2) | ( | ( | ( | ( | |||||||||||||||||||
Other (expense) income, net | ( | ( | ( | ||||||||||||||||||||
Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
Loss from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(1) Included in unallocated Operating expenses for the three and nine months ended December 31, 2023 is an asset impairment charge of $ | |||||||||||||||||||||||
(2) Included in unallocated Operating expenses for the nine months ended December 31, 2022 is $ | |||||||||||||||||||||||
As of | |||||||||||
December 31, 2023 | March 31, 2023 | ||||||||||
Assets: | |||||||||||
Direct | $ | $ | |||||||||
Retail | |||||||||||
Unallocated corporate | |||||||||||
Total assets | $ | $ |
Three-Months Ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Amazon.com | |||||||||||||||||||||||
Costco | * | * | * | ||||||||||||||||||||
*Less than 10% of total net sales. |
Three-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Net sales | $ | 67,566 | $ | 98,079 | $ | (30,513) | (31.1) | % | |||||||||||||||
Cost of sales | 50,177 | 75,219 | (25,042) | (33.3) | % | ||||||||||||||||||
Gross profit | 17,389 | 22,860 | (5,471) | (23.9) | % | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling and marketing | 15,129 | 17,203 | (2,074) | (12.1) | % | ||||||||||||||||||
General and administrative | 9,382 | 10,859 | (1,477) | (13.6) | % | ||||||||||||||||||
Research and development | 4,049 | 5,086 | (1,037) | (20.4) | % | ||||||||||||||||||
Restructuring and exit charges | 765 | — | 765 | NM | |||||||||||||||||||
Goodwill and asset impairment charge | 20,881 | — | 20,881 | NM | |||||||||||||||||||
Total operating expenses | 50,206 | 33,148 | 17,058 | 51.5 | % | ||||||||||||||||||
Operating loss | (32,817) | (10,288) | (22,529) | (219.0) | % | ||||||||||||||||||
Other expense: | |||||||||||||||||||||||
Interest income | 4 | 1 | 3 | ||||||||||||||||||||
Interest expense | (1,075) | (1,187) | 112 | ||||||||||||||||||||
Other, net | (334) | 715 | (1,049) | ||||||||||||||||||||
Total other expense, net | (1,405) | (471) | (934) | ||||||||||||||||||||
Loss from continuing operations before income taxes | (34,222) | (10,759) | (23,463) | ||||||||||||||||||||
Income tax expense | 117 | 322 | (205) | ||||||||||||||||||||
Loss from continuing operations | (34,339) | (11,081) | (23,258) | ||||||||||||||||||||
Loss from discontinued operations | — | (1) | 1 | ||||||||||||||||||||
Net loss | $ | (34,339) | $ | (11,082) | $ | (23,257) | |||||||||||||||||
NM = Not meaningful | |||||||||||||||||||||||
Nine-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Net sales | $ | 157,975 | $ | 218,354 | $ | (60,379) | (27.7) | % | |||||||||||||||
Cost of sales | 121,982 | 177,078 | (55,096) | (31.1) | % | ||||||||||||||||||
Gross profit | 35,993 | 41,276 | (5,283) | (12.8) | % | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling and marketing | 28,153 | 39,493 | (11,340) | (28.7) | % | ||||||||||||||||||
General and administrative | 27,256 | 34,317 | (7,061) | (20.6) | % | ||||||||||||||||||
Research and development | 11,734 | 16,315 | (4,581) | (28.1) | % | ||||||||||||||||||
Restructuring and exit charges | 2,527 | — | 2,527 | NM | |||||||||||||||||||
Goodwill and intangible impairment charge | 20,881 | 26,965 | (6,084) | (22.6) | % | ||||||||||||||||||
Total operating expenses | 90,551 | 117,090 | (26,539) | (22.7) | % | ||||||||||||||||||
Operating loss | (54,558) | (75,814) | 21,256 | 28.0 | % | ||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 21 | 6 | 15 | ||||||||||||||||||||
Interest expense | (4,679) | (2,158) | (2,521) | ||||||||||||||||||||
Other, net | 8,484 | (23) | 8,507 | ||||||||||||||||||||
Total other income (expense), net | 3,826 | (2,175) | 6,001 | ||||||||||||||||||||
Loss from continuing operations before income taxes | (50,732) | (77,989) | 27,257 | ||||||||||||||||||||
Income tax expense | 1,074 | 8,573 | (7,499) | ||||||||||||||||||||
Loss from continuing operations | (51,806) | (86,562) | 34,756 | ||||||||||||||||||||
Income from discontinued operations, net of taxes | — | 2,101 | (2,101) | ||||||||||||||||||||
Net loss | $ | (51,806) | $ | (84,461) | $ | 32,655 | |||||||||||||||||
NM = Not meaningful | |||||||||||||||||||||||
Three-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
Direct net sales: | |||||||||||||||||||||||
Cardio products(1) | $ | 23,120 | $ | 32,403 | $ | (9,283) | (28.6) | % | |||||||||||||||
Strength products(2) | 15,488 | 14,326 | 1,162 | 8.1 | % | ||||||||||||||||||
Direct | 38,608 | 46,729 | (8,121) | (17.4) | % | ||||||||||||||||||
Retail net sales: | |||||||||||||||||||||||
Cardio products(1) | $ | 15,762 | $ | 20,949 | $ | (5,187) | (24.8) | % | |||||||||||||||
Strength products(2) | 12,960 | 29,652 | (16,692) | (56.3) | % | ||||||||||||||||||
Retail | 28,722 | 50,601 | (21,879) | (43.2) | % | ||||||||||||||||||
Royalty | 236 | 749 | (513) | (68.5) | % | ||||||||||||||||||
$ | 67,566 | $ | 98,079 | $ | (30,513) | (31.1) | % | ||||||||||||||||
Cost of sales: | |||||||||||||||||||||||
Direct | $ | 27,894 | $ | 34,458 | $ | (6,564) | (19.0) | % | |||||||||||||||
Retail | 22,283 | 40,761 | (18,478) | (45.3) | % | ||||||||||||||||||
$ | 50,177 | $ | 75,219 | $ | (25,042) | (33.3) | % | ||||||||||||||||
Gross profit: | |||||||||||||||||||||||
Direct | $ | 10,714 | $ | 12,271 | $ | (1,557) | (12.7) | % | |||||||||||||||
Retail | 6,439 | 9,840 | (3,401) | (34.6) | % | ||||||||||||||||||
Royalty | 236 | 749 | (513) | (68.5) | % | ||||||||||||||||||
$ | 17,389 | $ | 22,860 | $ | (5,471) | (23.9) | % | ||||||||||||||||
Gross profit margin: | |||||||||||||||||||||||
Direct | 27.8 | % | 26.3 | % | 150 | basis points | |||||||||||||||||
Retail | 22.4 | % | 19.4 | % | 300 | basis points | |||||||||||||||||
Contribution: | |||||||||||||||||||||||
Direct | $ | (7,654) | $ | (6,463) | $ | (1,191) | 18.4 | % | |||||||||||||||
Retail | 1,992 | 3,447 | (1,455) | (42.2) | % | ||||||||||||||||||
Contribution rate: | |||||||||||||||||||||||
Direct | (19.8) | % | (13.8) | % | (600) | basis points | |||||||||||||||||
Retail | 6.9 | % | 6.8 | % | 10 | basis points |
(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 (applicable to Direct only). | |||||||||||||||||||||||
(2) Strength products include: Bowflex® Home Gyms, BowFlex® SelectTech® dumbbells, kettlebell and barbell weights, and accessories. |
Nine-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
Direct net sales: | |||||||||||||||||||||||
Cardio products(1) | $ | 47,199 | $ | 66,029 | $ | (18,830) | (28.5) | % | |||||||||||||||
Strength products(2) | 33,991 | 31,657 | 2,334 | 7.4 | % | ||||||||||||||||||
Direct | 81,190 | 97,686 | (16,496) | (16.9) | % | ||||||||||||||||||
Retail net sales: | |||||||||||||||||||||||
Cardio products(1) | $ | 36,085 | $ | 47,345 | $ | (11,260) | (23.8) | % | |||||||||||||||
Strength products(2) | 39,894 | 70,604 | (30,710) | (43.5) | % | ||||||||||||||||||
Retail | 75,979 | 117,949 | (41,970) | (35.6) | % | ||||||||||||||||||
Royalty | 806 | 2,719 | (1,913) | (70.4) | % | ||||||||||||||||||
$ | 157,975 | $ | 218,354 | $ | (60,379) | (27.7) | % | ||||||||||||||||
Cost of sales: | |||||||||||||||||||||||
Direct | $ | 64,161 | $ | 77,751 | $ | (13,590) | (17.5) | % | |||||||||||||||
Retail | 57,821 | 99,327 | (41,506) | (41.8) | % | ||||||||||||||||||
$ | 121,982 | $ | 177,078 | $ | (55,096) | (31.1) | % | ||||||||||||||||
Gross profit: | |||||||||||||||||||||||
Direct | $ | 17,029 | $ | 19,935 | $ | (2,906) | (14.6) | % | |||||||||||||||
Retail | 18,158 | 18,622 | (464) | (2.5) | % | ||||||||||||||||||
Royalty | 806 | 2,719 | (1,913) | (70.4) | % | ||||||||||||||||||
$ | 35,993 | $ | 41,276 | $ | (5,283) | (12.8) | % | ||||||||||||||||
Gross profit margin: | |||||||||||||||||||||||
Direct | 21.0 | % | 20.4 | % | 60 | basis points | |||||||||||||||||
Retail | 23.9 | % | 15.8 | % | 810 | basis points | |||||||||||||||||
Contribution: | |||||||||||||||||||||||
Direct | $ | (20,030) | $ | (24,244) | $ | 4,214 | 17.4 | % | |||||||||||||||
Retail | 6,037 | (994) | 7,031 | 707.3 | % | ||||||||||||||||||
Contribution rate: | |||||||||||||||||||||||
Direct | (24.7) | % | (24.8) | % | 10 | basis points | |||||||||||||||||
Retail | 7.9 | % | (0.8) | % | 870 | basis points | |||||||||||||||||
(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 December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Selling and marketing | $ | 15,129 | $ | 17,203 | $ | (2,074) | (12.1)% | ||||||||||||||||
As % of net sales | 22.4 | % | 17.5 | % |
Nine-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Selling and marketing | $ | 28,153 | $ | 39,493 | $ | (11,340) | (28.7)% | ||||||||||||||||
As % of net sales | 17.8 | % | 18.1 | % |
Three-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Total advertising | $ | 7,992 | $ | 9,515 | $ | (1,523) | (16.0)% |
Nine-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Total advertising | $ | 11,403 | $ | 18,330 | $ | (6,927) | (37.8)% |
Three-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
General and administrative | $ | 9,382 | $ | 10,859 | $ | (1,477) | (13.6)% | ||||||||||||||||
As % of net sales | 13.9 | % | 11.1 | % |
Nine-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
General and administrative | $ | 27,256 | $ | 34,317 | $ | (7,061) | (20.6)% | ||||||||||||||||
As % of net sales | 17.3 | % | 15.7 | % |
Three-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Research and development | $ | 4,049 | $ | 5,086 | $ | (1,037) | (20.4)% | ||||||||||||||||
As % of net sales | 6.0 | % | 5.2 | % |
Nine-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Research and development | $ | 11,734 | $ | 16,315 | $ | (4,581) | (28.1)% | ||||||||||||||||
As % of net sales | 7.4 | % | 7.5 | % | |||||||||||||||||||
Three-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Other, net | $ | (334) | $ | 715 | $ | (1,049) | (146.7)% | ||||||||||||||||
Nine-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Other, net | $ | 8,484 | $ | (23) | $ | 8,507 | NM | ||||||||||||||||
NM = Not meaningful |
Three-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Income tax expense | $ | 117 | $ | 322 | $ | (205) | 63.5 | % | |||||||||||||||
Effective tax rate | (0.3) | % | (3.0) | % | |||||||||||||||||||
Nine-Months Ended December 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
Income tax expense | $ | 1,074 | $ | 8,573 | $ | (7,499) | (87.5)% | ||||||||||||||||
Effective tax rate | (2.1) | % | (11.0) | % |
Three-Months Ended December 31, | Nine-Months Ended December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net cash used in operating activities | $ | (2,857) | $ | (2,184) | $ | (10,788) | $ | (11,780) | |||||||||||||||
Purchase of property, plant and equipment | (761) | (3,186) | (2,663) | (10,697) | |||||||||||||||||||
Free cash flow | $ | (3,618) | $ | (5,370) | $ | (13,451) | $ | (22,477) | |||||||||||||||
Net loss | $ | (34,339) | $ | (11,082) | $ | (51,806) | $ | (84,461) | |||||||||||||||
Free cash flow as percentage of net loss | 10.5 | % | 48.5 | % | 26.0 | % | 26.6 | % |
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. |
BOWFLEX INC. | |||||||||||
(Registrant) | |||||||||||
February 20, 2024 | By: | /S/ James Barr IV | |||||||||
Date | James Barr IV | ||||||||||
Chief Executive Officer |
BOWFLEX INC. | |||||||||||
(Registrant) | |||||||||||
February 20, 2024 | By: | /S/ Aina E. Konold | |||||||||
Date | Aina E. Konold | ||||||||||
Chief Financial Officer |
February 20, 2024 | By: | /s/ James Barr IV | |||||||||
Date | James Barr IV | ||||||||||
Chief Executive Officer |
February 20, 2024 | By: | /s/ Aina E. Konold | |||||||||
Date | Aina E. Konold | ||||||||||
Chief Financial Officer |
February 20, 2024 | By: | /s/ James Barr IV | |||||||||
Date | James Barr IV | ||||||||||
Chief Executive Officer |
February 20, 2024 | By: | /s/ Aina E. Konold | |||||||||
Date | Aina E. Konold | ||||||||||
Chief Financial Officer |
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) shares in Thousands, $ in Thousands |
Dec. 31, 2023 |
Mar. 31, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful trade receivables | $ 385 | $ 618 |
Debt Issuance Costs, Current, Net | 454 | 586 |
Debt Issuance Costs, Noncurrent, Net | $ 833 | $ 1,513 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 75,000 | 75,000 |
Common stock, shares issued | 36,405 | 31,845 |
Common stock, shares outstanding | 36,405 | 31,845 |
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (34,339) | $ (11,082) | $ (51,806) | $ (84,461) |
Other comprehensive loss: | ||||
Foreign currency translation, net of income tax benefit (expense) of $14, $29, $7, and $(56) | 599 | 923 | 361 | (1,157) |
Comprehensive loss | $ (33,740) | $ (10,159) | $ (51,445) | $ (85,618) |
Condensed Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 |
Sep. 30, 2023 |
Jun. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||||||
Foreign currency translation tax expense (benefit) | $ (14) | $ 15 | $ (8) | $ (29) | $ 56 | $ 29 | $ (7) | $ 56 |
Condensed Consolidated Statements of Stockholders' Equity - Parenthetical (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 |
Sep. 30, 2023 |
Jun. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Statement of Stockholders' Equity [Abstract] | ||||||||
Foreign currency translation tax expense (benefit) | $ (14) | $ 15 | $ (8) | $ (29) | $ 56 | $ 29 | $ (7) | $ 56 |
General Information |
9 Months Ended |
---|---|
Dec. 31, 2023 | |
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 BowFlex 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, 2023 (the “2023 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. Further information regarding significant estimates can be found in our 2023 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 December 31, 2023 and March 31, 2023, and our results of operations, comprehensive loss and shareholders' equity for the three and nine-month periods ended December 31, 2023 and 2022 and our cash flows for the three and nine-month periods ended December 31, 2023 and 2022. 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. Going Concern As a result of the continued challenging retail operating environment, deteriorating macroeconomic conditions, and decline in customer demand, we experienced a significant year over year decline in our revenue for the three and nine months ended December 31, 2023. Additionally, we now believe that conditions will not improve in the next several quarters, which is negatively affecting our liquidity projections. We have been actively pursuing alternatives to access liquidity or sell the Company or its assets, which may include making a voluntary filing under federal bankruptcy laws. If we are not able to promptly consummate a transaction or access additional sources of liquidity, we will not be able to maintain compliance with debt covenants in our credit facilities and may not be able to continue to operate our business. Management has determined that under these circumstances, there is substantial doubt about our ability to continue as a going concern for twelve months from the issuance date of this report. Our assessment of going concern was completed in accordance with FASB ASC Topic 205-40, “Basis of Presentation—Going Concern.” For the three and nine months ended December 31, 2023, we incurred a net loss of $34.3 million and $51.8 million, respectively, and for the three and nine months ended December 31, 2022, we incurred a net loss of $11.1 million and $84.5 million, respectively. As of December 31, 2023, we had $15.9 million of cash, working capital of $31.9 million and $24.4 million available for future borrowings under our ABL Credit Facility. The consolidated financial statements have been prepared on a “going concern” basis, which means that the continuation of the Company is presumed even though events and conditions exist that, when considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern. This also means that the condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. For example, these consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from this uncertainty. Such adjustments could be material. Recent Accounting Pronouncements Recently Adopted Pronouncements ASU 2016-13 In June 2016, the FASB issued Accounting Standards Update ("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 adopted ASU 2016-13 on April 1, 2023 and it had no material impact on our financial position, results of operations or cash flows. ASU 2020-06 In August 2020, the FASB issued ASU No. 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20)" and "Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity," which address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. ASU No. 2020-06 will become effective for us on January 1, 2024. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. FASB specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. We early adopted ASU No. 2020-06 on April 1, 2023 and it had no material impact on our financial position, results of operations or cash flows. Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, "Improvements to Reportable Segment Disclosures." The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. This ASU requires additional disclosures and, accordingly, we do not expect the adoption of ASU 2023-07 to have a material effect on our financial position, results of operations or cash flows. In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures." This ASU requires enhanced jurisdictional and other disaggregated disclosures for the effective tax rate reconciliation and income taxes paid and is effective for fiscal years beginning after December 15, 2024. This ASU requires additional disclosures and, accordingly, we do not expect the adoption of ASU 2023-09 to have a material effect on our financial position, results of operations or cash flows.
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NYSE Delisting Notification |
9 Months Ended |
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Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NYSE DELISTING NOTIFICATION | NYSE DELISTING NOTIFICATION On September 21, 2023, we received notice from the New York Stock Exchange (the “NYSE”) that we were not in compliance with the continued listing standard set forth in Section 802.01C of the NYSE’s Listed Company Manual because the average closing price of our common stock was less than $1.00 per share over a consecutive 30 trading-day period. On November 27, 2023, we received written notice from the NYSE that we were not in compliance with the continued listing standard set forth in Section 802.01B of the NYSE Listed Company Manual because our average global market capitalization over a consecutive 30 trading-day period was less than $50.0 million and, at the same time, our last reported stockholders’ equity was less than $50.0 million. We submitted our compliance plan (the "Plan") to the NYSE, and if that Plan is accepted by NYSE, we would have up to 18 months to cure the global market capitalization deficiency and to return to compliance with Sections 802.01B and 802.01C of the NYSE continued listing standards.
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Discontinued Operations |
9 Months Ended |
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Dec. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | DISCONTINUED OPERATIONS Results from discontinued operations relate to the disposal of our former Commercial business, which was completed in April 2011. Although we reached substantial completion of asset liquidation at December 31, 2012, we continued to accrue interest associated with an uncertain tax position on discontinued international operations, and incurred an immaterial amount of product liability expenses associated with products previously sold into the Commercial channel through fiscal 2023. Expenses related to discontinued operations were immaterial for the first nine months of fiscal 2024.
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Restructuring and Exit Charges |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Exit Charges | RESTRUCTURING AND EXIT CHARGES In February 2023, we announced and began implementing a restructuring plan that included a reduction in workforce and other exit costs. The following table summarizes restructuring reserve activity (in thousands):
The charges incurred due to the restructuring plan are included within Restructuring and exit charges in the Condensed Consolidated Statements of Operations and the accrued restructuring charges as of December 31, 2023 are included in Accrued Liabilities on our Condensed Consolidated Balance Sheets.
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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 and freight and delivery. 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):
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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Asset Impairment Charge |
9 Months Ended |
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Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Asset Impairment Charge | ASSET IMPAIRMENT CHARGE Fixed assets and other long-lived assets are evaluated for impairment periodically whenever events or changes in circumstances indicate that related carrying amounts may not be recoverable from undiscounted cash flows in accordance with the FASB guidance. These events include, but are not limited to, significant declines in our market capitalization, history of losses and adverse market conditions. During the quarter ended December 31, 2023, we determined that a triggering event occurred and performed an impairment asset test, which resulted in a $20.9 million impairment charge allocated pro-rata to the asset group impacted, including $12.0 million allocated to property plant and equipment, $0.1 million to definite lived intangible assets, and $8.8 million to Right of Use Assets related to operating leases. In determining this allocation, we considered fair value, if determinable without undue cost or effort, for each long-lived asset category to be equal to book value.
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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. We did not have any assets measured at fair value on a recurring basis as of December 31, 2023, or March 31, 2023. Liabilities measured at fair value on a recurring basis were as follows (in thousands):
We did not have any changes to our valuation techniques during any periods presented. The fair value of our foreign currency forward contracts is 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. We determined the fair value of the Common Warrants liability using the Black Scholes Option Pricing methodology with Level 3 inputs. The following table presents the change in the fair value of Common Warrants for the periods indicated below (in thousands):
Inherent in a Black Scholes valuation model are assumptions related to expected stock price, exercise price, stock-price volatility derived using our historical volatility, expected term, risk-free interest rate and dividend yield. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected term of the Common Warrants. The dividend yield percentage is zero based on our current expectations related to the payment of dividends during the expected term of the Common Warrants. The key inputs into the Black Scholes pricing model were as follows:
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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 December 31, 2023, we did not any have outstanding contract notional amounts. 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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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. See Note 6 - Asset Impairment Charge for a discussion of an impairment charge recognized during the quarter ended December 31, 2023. 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 | OTHER INTANGIBLE ASSETS Other Intangible Assets Other intangible assets consisted of the following (in thousands):
During the quarter ended June 30, 2023, we completed the sale of indefinite-lived intellectual property for $10.5 million as part of our ongoing comprehensive strategic review. The sale of these assets, which included the Nautilus® brand trademark assets and related licenses, will continue to streamline our brand focus and enhance our financial flexibility. The carrying value of the intangible assets sold was $3.7 million and the resulting gain, net of transaction costs, was recorded the Consolidated Statement of Operations as Other, net. See Note 6 - Asset Impairment Charge for a discussion of an impairment charge recognized during the quarter ended December 31, 2023. Amortization expense was as follows (in thousands):
Future amortization of definite-lived intangible assets is as follows (in thousands):
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The Sale of Shares In Equity Investments |
9 Months Ended |
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Dec. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
The Sale of Shares In Equity Investments | SALE OF SHARES IN EQUITY INVESTMENTS On May 1, 2023, we completed the sale of Vi Labs for $2.3 million as part of our ongoing comprehensive strategic review. The sale of this equity investment will continue to streamline our brand focus and enhance our financial flexibility. The was no carrying value related to the assets sold and transaction costs of the sale were $0.1 million. The resulting gain of $2.2 million was recorded in the Condensed Consolidated Statements of Operations as Other, net and in the Condensed Consolidated Statements of Cash Flows as Proceeds from sale of equity investment for the quarter ended June 30, 2023.
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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 six 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 leases”) 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. See Note 6 - Asset Impairment Charge for a discussion of an impairment charge recognized during the quarter ended December 31, 2023. Maturities of lease liabilities under non-cancellable leases were as follows (in thousands):
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Leases | LEASES We have several non-cancellable operating leases, primarily for office space, that expire at various dates over the next six 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 leases”) 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. See Note 6 - Asset Impairment Charge for a discussion of an impairment charge recognized during the quarter ended December 31, 2023. Maturities of lease liabilities under non-cancellable leases were as follows (in thousands):
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Capital Stock |
9 Months Ended |
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Dec. 31, 2023 | |
Equity [Abstract] | |
Capital Stock | CAPITAL STOCK Issuance of Common Stock On June 15, 2023, we entered into a securities purchase agreement (“Securities Purchase Agreement”) with an institutional investor (“Purchaser”). Pursuant to the Securities Purchase Agreement, we sold in a registered direct offering (“Registered Direct Offering”) 3,525,000 shares ("Shares") of our common stock, no par value ("Common Stock") at $1.22 per share and purchase contracts issued as pre-funded warrants ("Pre-Funded Warrants" and together with the Shares, the "Securities") to purchase up to 573,362 shares of Common Stock for $1.2199 per share. The Pre-Funded Warrants were to be issued to the extent that the Purchaser determined, in its sole discretion, that such Purchaser would beneficially own in excess of 4.99% (or at the Purchaser’s election, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the Securities. The Pre-Funded Warrants had an exercise price of $0.0001 per share, were immediately exercisable and could be exercised at any time after their original issuance date until such Pre-Funded Warrants were exercised in full. On July 28, 2023, all 573,362 Pre-Funded Warrants were exercised, resulting in the issuance of 573,362 shares of Common Stock. Pursuant to the Securities Purchase Agreement, in a concurrent private placement (together with the Registered Direct Offering, the "Offerings"), we also issued to the Purchaser unregistered warrants (“Common Warrants”) to purchase up to 4,098,362 shares of Common Stock. Each Common Warrant has an exercise price of $1.35 per share, is exercisable at any time beginning six months following their original issuance date of June 15, 2023 and will expire five and a half years from the original issuance date. As of December 31, 2023, the Common Warrants had not been exercised. In the event of any Fundamental Transaction (as such term is defined in the Securities Purchase Agreement), including any merger or consolidation, sale of substantially all of our assets, tender or exchange offer for 50% or more of our outstanding common stock, reclassification, reorganization or recapitalization of our shares of common stock, or purchase of 50% or more of our outstanding shares of common stock, then upon any subsequent exercise of a Common Warrant, the holder thereof will have the right to receive as alternative consideration, for each share of common stock that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the number of shares of common stock of the successor or acquiring corporation of our company, if it is the surviving corporation, and any additional consideration receivable upon or as a result of such transaction by a holder of the number of shares of common stock for which the Common Warrant is exercisable immediately prior to such event. Notwithstanding the foregoing, in the event of a Fundamental Transaction, the holders of the Common Warrants have the right to require us or a successor entity to redeem the Common Warrants for cash in the amount of the Black Scholes Value (as such term is defined in the Securities Purchase Agreement) of the unexercised portion of the Common Warrants concurrently with or within 30 days following the consummation of such Fundamental Transaction. We account for our Common Warrants in accordance with the guidance contained in ASC 815-40, Derivatives and Hedging - Contracts on an Entity’s Own Equity, and determined that the Common Warrants do not meet the criteria for equity treatment thereunder. As such, each Common Warrant must be recorded as a liability and is subject to re- measurement at each balance sheet date. Refer to Note 7 - Fair Value Measurements for further details. Changes in fair value are recognized in Other, net in our Condensed Consolidated Statements of Operations. Roth Capital Partners, LLC (the “Placement Agent”) acted as the exclusive placement agent for the Offerings, pursuant to a Placement Agency Agreement, dated June 15, 2023 (the “Placement Agreement”). Pursuant to the Placement Agreement, we paid the Placement Agent a cash placement fee equal to 7.0% of the aggregate gross proceeds raised in the Offerings from sales arranged for by the Placement Agent. Subject to certain conditions, we also agreed to reimburse all reasonable travel and other out-of-pocket expenses of the Placement Agent in connection with the Offerings, including but not limited to legal fees, up to a maximum of $75,000. The Placement Agreement contains customary representations, warranties and agreements by us and customary conditions to closing. We agreed to indemnify the Placement Agent against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”), and liabilities arising from breaches of representations and warranties contained in the Placement Agreement, or to contribute to payments that the Placement Agent may be required to make in respect of those liabilities. We received net proceeds of $4.6 million from the Offerings, net of offering expenses paid to the Placement Agent totaling $0.4 million, which proceeds will be used for general corporate purposes. The closing of the Offerings took place on June 20, 2023. The Securities were offered and sold pursuant to our shelf registration statement on Form S-3 (File No. 333-249979) initially filed with the Securities and Exchange Commission (the “Commission”) on November 9, 2020 and declared effective on October 28, 2021. A prospectus supplement relating to the Registered Direct Offering was filed with the Commission on June 15, 2023. None of the Common Warrants or the shares of Common Stock issuable upon the exercise of the Common Warrants are registered under the Securities Act. The Common Warrants and the shares of Common Stock issuable upon exercise thereof will be issued in reliance on the exemptions from registration provided by Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder for transactions not involving a public offering.
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Accrued Liabilities |
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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.
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Product Warranties |
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Product Warranties Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties | PRODUCT WARRANTIES Our 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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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 Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOSS PER SHARE | LOSS 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 per share were as follows (in thousands):
Potentially Dilutive Shares The weighted average number of potentially dilutive shares outstanding listed in the table below were excluded from the computation of diluted per share amounts since we had a loss from continuing operations in both periods, as such, the exercise or conversion of any potentially dilutive shares would increase the number of shares in the denominator and result in a lower loss per diluted share. The weighted average number of potentially dilutive shares outstanding were as follows (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 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 nine-months ended December 31, 2023. 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 customer accounted for 10% or more of total net sales as follows:
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Borrowings |
9 Months Ended |
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Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS Amendment to Existing Term Loan Credit Agreement On July 28, 2023, we entered into an amendment (the “Term Loan Amendment”) to our existing SLR Term Loan with Crystal Financial LLC, d/b/a SLR Credit Solutions ("SLR") dated as of November 30, 2022 (as amended, the "SLR Term Loan"). The Term Loan Amendment provides us with an increased borrowing advance rate for certain eligible accounts owed to us by Amazon.com, Inc. and its affiliates, and allows for certain compliance reports to be delivered to SLR under the SLR Term Loan on a monthly (rather than weekly) basis as long as specified conditions are satisfied. Amendment to Existing ABL Credit Agreement On July 28, 2023, we entered into an amendment (the “ABL Amendment”) to our existing Credit Agreement with Wells Fargo Bank, National Association ("Wells Fargo") dated as of January 31, 2020 (as amended, the "ABL Credit Facility"). The ABL Amendment provides us with an increased borrowing advance rate for certain eligible accounts owed to us by Amazon.com, Inc. and its affiliates and allows for certain compliance reports to be delivered on a monthly (rather than weekly) basis as long as specified conditions are satisfied. In addition, the ABL Amendment reduced the maximum revolving loan commitment amount under the ABL Credit Facility from $60.0 million to $40.0 million. In connection with the amendment of the SLR Term Loan and ABL Credit Facility, we recorded a total loss of $0.3 million, as a component of Other, net in our Condensed Consolidated Statements of Operations. As of December 31, 2023, outstanding principal and accrued and unpaid interest totaled $26.7 million, with $16.6 million and $10.1 million under our SLR Term Loan and ABL Credit Facility, respectively. As of December 31, 2023, we were in compliance with the financial covenants contained in the agreements governing both the SLR Term Loan and ABL Credit Facility, and $24.4 million was available for borrowing under ABL Credit Facility. As of December 31, 2023, our interest rate was 10.36% for the ABL Credit Facility and 13.89% for the SLR Term Loan. Interest on the ABL Credit Facility accrues at the Secured Overnight Financing Rate ("SOFR") plus a margin of 5.00% to 5.50% (based on average quarterly availability) and interest on the SLR Term Loan accrues at SOFR plus a margin of 7.75% to 8.25% (based on fixed charge coverage ratio). The balance sheet classification of the borrowings under the loan facilities has been determined in accordance with ASC 470, Debt.
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Commitments and Contingencies |
9 Months Ended |
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Dec. 31, 2023 | |
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 13 - Leases. Guarantees, Commitments and Off-Balance Sheet Arrangements As of December 31, 2023, we had standby letters of credit of $2.1 million. We have long lead times for inventory purchases and, therefore, must secure factory capacity from our vendors in advance. As of December 31, 2023, we had approximately $2.6 million, compared to $12.1 million as of March 31, 2023, in non-cancellable market-based purchase obligations, primarily to secure additional factory capacity for inventory purchases in the next twelve months. 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 BowFlex 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 December 31, 2023. 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, we are unable to estimate the possible loss or range of loss at this time.
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General Information (Policies) |
9 Months Ended |
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Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation | Intercompany transactions and balances have been eliminated in consolidation. |
Basis of Presentation | 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, 2023 (the “2023 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. Further information regarding significant estimates can be found in our 2023 Form 10-K.
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New Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Pronouncements ASU 2016-13 In June 2016, the FASB issued Accounting Standards Update ("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 adopted ASU 2016-13 on April 1, 2023 and it had no material impact on our financial position, results of operations or cash flows. ASU 2020-06 In August 2020, the FASB issued ASU No. 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20)" and "Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity," which address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. ASU No. 2020-06 will become effective for us on January 1, 2024. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. FASB specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. We early adopted ASU No. 2020-06 on April 1, 2023 and it had no material impact on our financial position, results of operations or cash flows. Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, "Improvements to Reportable Segment Disclosures." The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. This ASU requires additional disclosures and, accordingly, we do not expect the adoption of ASU 2023-07 to have a material effect on our financial position, results of operations or cash flows. In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures." This ASU requires enhanced jurisdictional and other disaggregated disclosures for the effective tax rate reconciliation and income taxes paid and is effective for fiscal years beginning after December 15, 2024. This ASU requires additional disclosures and, accordingly, we do not expect the adoption of ASU 2023-09 to have a material effect on our financial position, results of operations or cash flows.
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Restructuring and Exit Charges (Tables) |
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Schedule of Restructuring Reserve by Type of Cost | The following table summarizes restructuring reserve activity (in thousands):
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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 and freight and delivery. 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 | 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 (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Measured at Fair Value on a Recurring Basis | Liabilities measured at fair value on a recurring basis were as follows (in thousands):
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Fair Value Measurement Inputs and Valuation Techniques | The key inputs into the Black Scholes pricing model were as follows:
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Derivatives (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. See Note 6 - Asset Impairment Charge for a discussion of an impairment charge recognized during the quarter ended December 31, 2023.
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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) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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.
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Product Warranties (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | Changes in our product warranty obligations were as follows (in thousands):
|
Accumulated Other Comprehensive Loss (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The weighted average numbers of shares outstanding used to compute loss 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 number of potentially dilutive shares outstanding were as follows (in thousands):
These shares may be anti-dilutive potential common shares in the future (in thousands):
|
Segment and Enterprise-wide Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Information by Reportable Segments | Following is summary information by reportable segment (in thousands):
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Schedules of Concentration of Risk, by Risk Factor | The following customer accounted for 10% or more of total net sales as follows:
|
General Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 |
Sep. 30, 2023 |
Jun. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2023 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Net loss | $ 34,339 | $ 12,543 | $ 4,924 | $ 11,082 | $ 13,203 | $ 60,177 | $ 51,806 | $ 84,461 | |
Cash and cash equivalents | 15,943 | $ 15,532 | 15,943 | $ 15,532 | $ 17,362 | ||||
Working capital | $ 31,900 | $ 31,900 |
Restructuring and Exit Charges (Details) $ in Thousands |
9 Months Ended |
---|---|
Dec. 31, 2023
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Accrued liability as of March 31, 2023 | $ 1,233 |
Charges / Accruals | 2,527 |
Payments | (3,603) |
45291 | 157 |
Employee Severance and Benefits | |
Restructuring Reserve [Roll Forward] | |
Accrued liability as of March 31, 2023 | 1,110 |
Charges / Accruals | 0 |
Payments | (1,045) |
45291 | 65 |
Third Party Costs | |
Restructuring Reserve [Roll Forward] | |
Accrued liability as of March 31, 2023 | 123 |
Charges / Accruals | 2,527 |
Payments | (2,558) |
45291 | $ 92 |
Asset Impairment Charge (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2023 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill and asset impairment charge | $ 20,881 | $ 0 | $ 20,881 | $ 26,965 | |
Property plant and equipment impairment loss | 12,000 | ||||
Definite lived intangible assets, impairment loss | 100 | ||||
Right of use assets impairment loss | $ 8,800 | $ 8,850 | $ 0 |
Derivatives - Fair value of derivative instruments (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Mar. 31, 2023 |
---|---|---|
Foreign currency forward contracts | Derivative instruments not designated as cash flow hedges: | Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of liability derivatives | $ 0 | $ 141 |
Derivatives - Effect On Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
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] | ||||
Income recognized in earnings | $ 178 | $ 993 | $ 336 | $ 404 |
Not Designated as Hedging Instruments | Income tax expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Income tax benefit | $ 44 | $ 249 | $ 83 | $ 101 |
Inventories (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Mar. 31, 2023 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished goods | $ 50,924 | $ 42,463 |
Parts and components | 3,403 | 4,136 |
Total inventories | $ 54,327 | $ 46,599 |
Property, Plant and Equipment - Depreciation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 3,035 | $ 3,155 | $ 9,261 | $ 7,910 |
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2023 |
|
Goodwill [Line Items] | ||||
Indefinite-lived trademarks | $ 2,900 | $ 2,900 | $ 6,597 | |
Total other intangible assets, gross | 3,863 | 3,863 | 7,640 | |
Accumulated amortization - definite-lived intangible assets | (899) | (899) | (853) | |
Other intangible assets, net | 2,964 | 2,964 | 6,787 | |
Proceeds from sale of indefinite-lived intellectual property | 10,500 | 10,500 | $ 0 | |
Carrying value of intangible assets sold | 3,700 | 3,700 | ||
Patents | ||||
Goodwill [Line Items] | ||||
Finite-lived intangible assets, gross | $ 963 | $ 963 | $ 1,043 | |
Patents | Minimum | ||||
Goodwill [Line Items] | ||||
Estimated Useful Life (in years) | 7 years | 7 years | ||
Patents | Maximum | ||||
Goodwill [Line Items] | ||||
Estimated Useful Life (in years) | 24 years | 24 years |
Goodwill and Other Intangible Assets - Patent amortization (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 15 | $ 15 | $ 46 | $ 46 |
Goodwill and Other Intangible Assets - Future intangible amortization (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of fiscal 2024 | $ 8 |
2025 | 28 |
2026 | 19 |
2027 | 1 |
2028 | 1 |
Thereafter | 7 |
Finite-Lived Intangible Assets, Net | $ 64 |
The Sale of Shares In Equity Investments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 01, 2023 |
Dec. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Equity Method Investments and Joint Ventures [Abstract] | ||||
Proceeds from Sale of Equity Method Investments | $ 2,300 | $ 2,350 | $ 0 | |
Equity Method Investments | 0 | |||
Equity Method Investment, Aggregate Cost | $ 100 | |||
Equity Method Investment, Realized Gain (Loss) on Disposal | $ 2,200 |
Leases - Additional information (Details) |
Dec. 31, 2023
term
|
---|---|
Leases [Abstract] | |
Operating lease, term of contract | 6 years |
Operating lease, number of renewal terms | 1 |
Operating lease, renewal term | 5 years |
Leases - Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Leases [Abstract] | ||||
Operating lease expense | $ 1,339 | $ 1,406 | $ 4,017 | $ 4,466 |
Amortization of finance lease assets | 29 | 28 | 85 | 85 |
Total lease expense | $ 1,368 | $ 1,434 | $ 4,102 | $ 4,551 |
Leases - Maturity (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Mar. 31, 2023 |
---|---|---|
Operating leases | ||
2024 | $ 1,195 | |
2025 | 5,668 | |
2026 | 4,542 | |
2027 | 2,378 | |
Thereafter | 5,796 | |
Total undiscounted lease payments | 19,579 | |
Less imputed interest | (2,166) | |
Total lease liabilities | 17,413 | $ 20,807 |
Finance leases | ||
2024 | 30 | |
2025 | 120 | |
2026 | 120 | |
2027 | 60 | |
Thereafter | 0 | |
Total undiscounted lease payments | 330 | |
Less imputed interest | (10) | |
Total finance lease liabilities | $ 320 | $ 404 |
Accrued Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Mar. 31, 2023 |
---|---|---|
Payables and Accruals [Abstract] | ||
Payroll and related liabilities | $ 2,785 | $ 5,220 |
Deferred revenue | 3,957 | 5,075 |
Reserves | 2,091 | 1,200 |
Accrued Tariffs | 1,031 | 1,167 |
Legal settlement | 430 | 5 |
Other | 1,688 | 2,908 |
Total accrued liabilities | $ 11,982 | $ 15,575 |
Product Warranties (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Movement in Product Warranty Liability [Roll Forward] | ||
Balance, beginning of period | $ 3,267 | $ 6,216 |
Accruals | 4,025 | 1,882 |
Payments | (3,890) | (3,748) |
Balance, end of period | $ 3,402 | $ 4,350 |
Minimum | ||
Product Liability Contingency [Line Items] | ||
Product warranty period | 30 days |
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 47,123 | $ 91,619 | $ 61,300 | $ 164,049 |
Current period other comprehensive income (loss) before reclassifications | 599 | 923 | 361 | (1,157) |
Ending balance | 14,161 | 82,993 | 14,161 | 82,993 |
Foreign Currency Translation Adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (1,716) | (2,607) | (1,478) | (527) |
Current period other comprehensive income (loss) before reclassifications | 599 | 923 | 361 | (1,157) |
Ending balance | (1,117) | (1,684) | (1,117) | (1,684) |
Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (1,716) | (2,607) | (1,478) | (527) |
Ending balance | $ (1,117) | $ (1,684) | $ (1,117) | $ (1,684) |
Loss Per Share - Schedule of Potentially Dilutive Shares (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 28 | 146 | 25 | 305 |
Performance 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) | 28 | 0 | 10 | 0 |
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) | 0 | 102 | 15 | 201 |
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) | 0 | 44 | 0 | 104 |
Loss Per Share - Anti-dilutive Common Shares (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted income per share (in shares) | 3,986 | 2,704 | 3,616 | 1,584 |
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) | 2,718 | 1,849 | 2,410 | 1,391 |
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) | 1,268 | 855 | 1,206 | 193 |
Segment and Enterprise-wide Information - Concentration (Details) - Sales Revenue, Net - Customer Concentration Risk |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Amazon.com | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 11.20% | 10.00% | 14.20% | 22.00% |
Costco | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 11.00% |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
Dec. 31, 2023 |
Mar. 31, 2023 |
---|---|---|
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||
Standby letters of credit outstanding | $ 2.1 | |
Inventories | ||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||
Non-cancelable market-based purchase obligation | $ 2.6 | $ 12.1 |
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