Commitments and Contingencies

12 Months Ended

Mar. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Lease Commitments

The Company leases its offices and other equipment under non-cancelable operating leases that expire through fiscal year 2019. Rent expense for the years ended March 31, 2014, 2013 and 2012 was $0.7 million, $0.5 million and $0.5 million, respectively.

Future minimum lease payments under the non-cancelable operating leases as of March 31, 2014 are as follows (in thousands):

	Lease Payments
Fiscal Year Ending March 31:
2015	$	682
2016	680
2017	676
2018	663
2019	586
Total future minimum lease payments	$	3,287

Purchase Commitments

In November 2011, the Company entered into an agreement with one of its contract manufacturers for the purchase of product formulas for a purchase price of $2.0 million. The agreement requires annual payments of at least $0.2 million in each of the first six years of the agreement with the unpaid balance due at the end of the seven-year term in November 2018. As of March 31, 2014, the Company’s remaining obligation for product formulas was $1.7 million.

Indemnifications

In the normal course of business, the Company enters into contracts that contain a variety of representations and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. The Company has not paid any significant claims or been required to defend any action related to its indemnification obligations, and, accordingly, the Company believes that the estimated fair value of these indemnification obligations is minimal and has not accrued any amounts for these obligations.

Legal Matters

On December 6, 2013, a private organization called the Center for Environmental Health (“CEH”) sued the Company and its subsidiary, Annie’s Homegrown, Inc., in Superior Court of the State of California in the County of Alameda under California Health & Safety Code §§ 25249.5 et seq. (commonly referred to as “Proposition 65”). CEH claims that warnings are required in California under Proposition 65 for alleged exposures to lead and lead compounds from cookies that contain ginger or molasses, including Annie’s Gluten-Free Ginger Snap Bunny Cookies. CEH is seeking injunctive relief, civil penalties of $2,500 per violation per day and its attorneys’ fees and costs. The lawsuit, entitled Mondelez International, Inc., et al., Alameda County Superior Court Case No. RG13-677800, names twenty-one other companies that are either suppliers or retailers of ginger- or molasses-containing cookies. As of March 31, 2014, the Company accrued an amount equal to the current estimate of its exposure in this matter. Given the inherent uncertainty associated with legal matters, the actual cost of resolving this litigation may be higher or lower than the estimated accrual.

Additionally, from time to time, the Company is subject to claims, assessments or other legal proceedings in the ordinary course of business, including product liability claims, employee claims, and other general liability claims. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that none of these legal proceedings, individually or in the aggregate, will have a material adverse effect on its financial position or results of operations and cash flows.