Disposition of Product Line

12 Months Ended

Mar. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

DISPOSITION OF PRODUCT LINE

DISPOSITION OF PRODUCT LINE

On September 5, 2012, the Company and its Paper Magic subsidiary sold the Halloween portion of Paper Magic’s business and certain Paper Magic assets relating to such business, including certain tangible and intangible assets associated with the Halloween portion of Paper Magic’s business, to Gemmy. Paper Magic’s remaining Halloween assets, including accounts receivable and inventory, were excluded from the sale. Paper Magic retained the right and obligation to fulfill all customer orders for Paper Magic Halloween products (such as Halloween masks, costumes, make-up and novelties) for the Halloween 2012 season. The sale price of $2,281,000 was paid to Paper Magic at closing. In connection with the sale, the Company recorded charges of $5,368,000 during the second quarter of fiscal 2013, consisting of severance of 49 employees of $1,282,000, facility closure costs of $1,375,000, professional fees and other costs of $1,341,000 ($523,000 were costs of the transaction) and a non-cash write-down of assets of $1,370,000. Additionally, a portion of the goodwill associated with the Paper Magic reporting unit was allocated to the business being sold. Such allocation was made on the basis of the fair value of the assets being sold relative to the overall fair value of the Paper Magic reporting unit. This resulted in the Company recording a reduction of goodwill in the amount of $2,711,000 for the Paper Magic reporting unit. There was also a non-cash charge of $1,266,000 related to the write-down of inventory to net realizable value which was recorded in cost of sales. Net sales of the Halloween business were $1,366,000, $30,914,000 and $31,156,000 for the years ended March 31, 2014, 2013 and 2012, respectively.

During fiscal 2013, the Company made payments related to the restructuring of $1,901,000 and there was a reduction in the restructuring reserve of $210,000, primarily due to sub-lease income that was greater than originally estimated. During the year ended March 31, 2014, the Company made payments related to the restructuring of $1,251,000 and reduced the restructuring reserve by $412,000 related to costs that were less than originally estimated. As of March 31, 2014, $117,000 of the remaining liability was classified in current liabilities and $107,000 was classified in long-term obligations in the accompanying condensed consolidated balance sheet and will be paid through December 2015. The Company is satisfying the liabilities through December 2015.

Selected information relating to the aforementioned restructuring follows (in thousands):

	Employee Termination Costs			Facility Costs			Professional Fees and Other Costs			Total
Initial restructuring reserve	$	1,282		$	1,375		$	1,341		$	3,998
Cash paid – fiscal 2013	(734		)	(315		)	(852		)	(1,901		)
Non-cash adjustments – fiscal 2013	41			(245		)	(6		)	(210		)
Restructuring reserve as of March 31, 2013	589			815			483			1,887
Cash paid – fiscal 2014	(516		)	(621		)	(114		)	(1,251		)
Non-cash adjustments – fiscal 2014	(73		)	(82		)	(257		)	(412		)
Restructuring reserve as of March 31, 2014	$	—		$	112		$	112		$	224