Commitments and Contingencies
|12 Months Ended|
Mar. 31, 2016
|Commitments and Contingencies Disclosure [Abstract]|
|Commitments and Contingencies||
Commitments and Contingencies:
The Company leases a corporate facility in Aurora, Illinois. This location houses corporate administration, sales, marketing and the CSG segment product distribution, engineering and manufacturing pursuant to a lease that originated in 1997 and runs through September 2017. The rental payments are currently $2.1 million a year. In accordance with FASB Technical Bulletin 88-1, Issues Related to Accounting of Leases, as codified in ASC topic 840, Leases (ASC 840), the Company recorded a long-term deferred lease liability of $107,000 and $286,000 presented in other long-term liabilities and a short-term deferred lease liability of $182,000 and $155,000 presented in accrued expenses on the Consolidated Balance Sheets as of March 31, 2016 and 2015, respectively, to account for the straight-line impact on the rental payments. The CSG segment leased an engineering office, located in Regina, Canada, which was terminated on March 31, 2016. The CSG segment also leases an engineering and service center in Dublin, Ohio, which runs through 2019. The IBW segment leases a manufacturing and distribution center and an office in Manchester, New Hampshire. The IBW segment leases runs through 2018. The leases require the Company to pay utilities, insurance and real estate taxes on the facilities. Total rent expense for all facilities was $1.8 million, $3.1 million and $2.8 million for fiscal years 2016, 2015 and 2014, respectively. In fiscal years 2016, 2015 and 2014, rent expense was offset by $0.1 million, $0.1 million and $0.1 million of sublease income, respectively. In fiscal year 2016, $1.1 million of lease payments reduced accrued reorganization.
Purchase obligations consist of inventory that arises in the normal course of business operations. Future obligations and commitments as of March 31, 2016 consisted of the following:
(1) A reserve for a net loss on firm purchase commitments of $388,000 and $675,000 is recorded on the balance sheet as of March 31, 2016 and March 31, 2015, respectively.
Litigation and Contingency Reserves
The Company and its subsidiaries are involved in various assertions, claims, proceedings and requests for indemnification concerning intellectual property, including patent infringement suits involving technologies that may be incorporated in the Company’s products, which are being handled and defended in the ordinary course of business. These matters are in various stages of investigation and litigation, and they are being vigorously defended. Although the Company does not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial condition or results of operations, litigation is inherently unpredictable. Therefore, judgments could be rendered, or settlements entered, that could adversely affect the Company’s operating results or cash flows in a particular period. The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and it records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable. As of March 31, 2016 and March 31, 2015, the Company has not recorded any contingent liability attributable to existing litigation.
As of March 31, 2015, the Company had total contingency reserves of $0.4 million related to the discontinued operations of ConferencePlus, which was sold in fiscal year 2012. The contingency reserve was removed in fiscal year 2016 when the indemnity period expired and resulted in a pre-tax gain of $0.4 million, which is presented in Income from discontinued operations. Contingency reserves are classified as accrued expenses on the Consolidated Balance Sheets. In fiscal year 2015, $0.2 million of a previously recorded reserve was reversed and is presented in Income from discontinued operations. See Note 1, Basis of Presentation.
Additionally, the Company has contingent cash consideration payable related to the May 15, 2012 acquisition ANTONE Wireless Corporation (ANTONE). The ANTONE contingent consideration becomes payable based upon the profitability of the acquired products for post-closing periods through June 30, 2016, and is offset by working capital adjustments and certain indemnification claims. The maximum earn-out that could be paid before offsets is $3.5 million. As of March 31, 2016 and March 31, 2015, the fair value of the contingent consideration liability, after an offset for a working capital adjustment and an indemnification claim for warranty obligations, is $0.3 million and $1.6 million, respectively. In fiscal years 2016 and 2015, the Company made contingent consideration payments of $0.8 million and $1.1 million, respectively. See Note 13.
The entire disclosure for commitments and contingencies.
Reference 1: http://www.xbrl.org/2003/role/presentationRef