Property and Equipment

12 Months Ended

Mar. 31, 2017

Property, Plant and Equipment [Abstract]

Property and equipment are stated at cost. Expenditures for additions and improvements are capitalized, while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed as incurred. Properties sold, or otherwise disposed of, are removed from the property accounts, with gains or losses on disposal credited or charged to income from operations.

Orion periodically reviews the carrying values of property and equipment for impairment in accordance with ASC 360, Property, Plant and Equipment, if events or changes in circumstances indicate that the assets may be impaired. The estimated future undiscounted cash flows expected to result from the use of the assets and their eventual disposition are compared to the assets' carrying amount to determine if a write down to market value is required.

In fiscal 2017, no fixed asset impairment charges were required.

On June 30, 2016, Orion completed the sale of its Manitowoc manufacturing and distribution facility for gross cash proceeds of $2,600,000, which approximated the assets' net carrying values. In conjunction with the sale, Orion entered into an agreement with the buyer to leaseback approximately 197,000 square feet of the building for not less than three years, subject to mutual options to reduce the amount of leased space.

In conjunction with the anticipated sale of this facility, in fiscal 2016, the Company reviewed the carrying value of the manufacturing and distribution facility assets for impairment performing a probability weighted analysis of expected future cash flows. Based on that analysis, the Company concluded that the assets' carrying values were no longer supported. As such, Orion recorded an impairment charge of $1,614,000 in fiscal 2016 to write the assets down to their fair value, which approximates the expected selling price. The impairment charge was recorded to all three of Orion’s reportable segments as follows: Orion U.S. Markets $689,000, Orion Engineered Systems $804,000, and Orion Distribution Services $121,000.

In fiscal 2015, an impairment charge of $1,030,000 was recorded in connection with the assessment of carrying costs related to the wireless controls product offering.

Property and equipment were comprised of the following (dollars in thousands):



	March 31, 2017			March 31, 2016
Land and land improvements	$	424		$	421
Buildings and building improvements	9,245			11,849
Furniture, fixtures and office equipment	7,056			7,233
Leasehold improvements	324			148
Equipment leased to customers under Power Purchase Agreements	4,997			4,997
Plant equipment	11,627			10,805
Construction in progress	61			128
	33,734			35,581
Less: accumulated depreciation and amortization	(19,948		)	(18,577		)
Net property and equipment	$	13,786		$	17,004

Equipment included above under capital leases was as follows (dollars in thousands):



	March 31, 2017			March 31, 2016
Equipment	$	581		408
Less: accumulated depreciation and amortization	(202		)	(65		)
Net equipment	$	379		$	343

Depreciation is recognized over the estimated useful lives of the respective assets, using the straight-line method. Orion recorded depreciation expense of $1,451,000, $2,950,000 and $2,853,000 for the years ended March 31, 2017, 2016 and 2015, respectively.

Depreciable lives by asset category are as follows:



Land improvements	10-15 years
Buildings and building improvements	10-39 years
Furniture, fixtures and office equipment	2-10 years
Leasehold improvements	Shorter of asset life or life of lease
Equipment leased to customers under Power Purchase Agreements	20 years
Plant equipment	3-10 years

No interest was capitalized for construction in progress during fiscal 2017 or fiscal 2016.