Thermon Group Holdings, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Organization and Summary of Significant Accounting Policies (Tables)

Organization and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Mar. 31, 2013

Accounting Changes and Error Corrections [Abstract]

Schedule of Error Corrections and Prior Period Adjustments

Corrections of classification errors in previously reported Consolidated Statements of Operations and Comprehensive Income (Loss)

During fiscal 2013, we identified a classification error in our consolidated statements of operations and comprehensive income (loss) for all previously reported periods. We determined that charges that were invoiced to customers had been recorded as a reduction to cost of sales instead of as additional sales. The result of this error was an understatement of sales and cost of sales of $1,808 for the year ended March 31, 2012, $2,135 for the period from May 1, 2010 to March 31, 2011, and $120 for the period from April 1, 2010 through April 30, 2010. The classification errors had no effect on the reported gross profit, income from operations or net income and also had no effect on the consolidated balance sheets, the consolidated statements of cash flows or the consolidated statement of shareholders'/members' equity.

Though the correction of the classification errors had no effect on our gross profit, it did result in a slight reduction to our previously reported gross margin as a percentage of revenue as follows below:



	Year Ended March 31, 2012			For the Period From May 1, 2010 Through March 31, 2011			For the Period From April 1, Through April 30, 2010
	(Successor)			(Successor)			(Predecessor)
As reported:
Sales	$	270,515		$	225,745		$	13,063
Cost of sales	138,400			130,260			6,447
Gross profit	132,115			95,485			6,616
Gross profit as a percentage of revenue	48.8		%	42.3		%	50.6		%



	Year Ended March 31, 2012			For the Period From May 1, 2010 Through March 31, 2011			For the Period From April 1, Through April 30, 2010
	(Successor)			(Successor)			(Predecessor)
As corrected:
Sales	$	272,323		$	227,880		$	13,183
Cost of sales	140,208			132,395			6,567
Gross profit	132,115			95,485			6,616
Gross profit as a percentage of revenue	48.5		%	41.9		%	50.2		%

The quarterly impact of our classification error was an understatement of sales and cost of sales of $80, $491 and $477 for the three months ended December 31, 2012, September 30, 2012 and June 30, 2012, respectively. In fiscal 2012, the results of the error were an understatement of sales and cost of sales of $531, $443, $376, and $458, for the three months ended March 31, 2012, December 31, 2011, September 30, 2011, and June 30, 2011, respectively. These amounts have been corrected in the quarterly results disclosed in Note 19. "Quarterly Results".



	Three Months Ended December 31, 2012			Three Months Ended September 30, 2012			Three Months Ended June 30, 2012			Three Months Ended March 31, 2012			Three Months Ended December 31, 2011			Three Months Ended September 30, 2011			Three Months Ended June 30, 2011
As reported:
Sales	$	76,750		$	67,358		$	67,213		$	69,037		$	68,837		$	68,023		$	64,618
Cost of sales	41,799			34,719			33,874			34,553			35,146			36,072			32,629
Gross profit	34,951			32,639			33,339			34,484			33,691			31,951			31,989
Gross profit as a percentage of revenue	45.5		%	48.5		%	49.6		%	50.0		%	48.9		%	47.0		%	49.5		%



	Three Months Ended December 31, 2012			Three Months Ended September 30, 2012			Three Months Ended June 30, 2012			Three Months Ended March 31, 2012			Three Months Ended December 31, 2011			Three Months Ended September 30, 2011			Three Months Ended June 30, 2011
As corrected:
Sales	$	76,830		$	67,849		$	67,690		$	69,568		$	69,280		$	68,399		$	65,076
Cost of sales	41,879			35,210			34,351			35,084			35,589			36,448			33,087
Gross profit	34,951			32,639			33,339			34,484			33,691			31,951			31,989
Gross profit as a percentage of revenue	45.5		%	48.1		%	49.3		%	49.6		%	48.6		%	46.7		%	49.2		%

Corrections of classification errors in previously reported Consolidated Statements of Cash Flows

During the second quarter of fiscal 2013, the Company identified a classification error in its cash flow statements for the year ended March 31, 2012 and for the three months ended June 30, 2012 related to the classification of excess income tax benefits associated with stock option exercises. Such benefits were improperly classified as a cash inflow from operating activities rather than a cash inflow from financing activities in the fourth quarter of fiscal 2012 and in the first quarter of fiscal 2013. The result of this error was an overstatement of cash flows from operating activities of $2,181 for the year ended March 31, 2012 and $1,243 in the first quarter of fiscal 2013. The classification errors had no effect on the reported changes in cash and cash equivalents, and also had no effect on the consolidated balance sheets, the consolidated statement of operations and comprehensive income (loss), or the consolidated statements of stockholders'/members' equity.

The reduction to cash flows from operating activities for the excess tax deduction has been properly reflected in the cash flow statement for the year ended March 31, 2013. Based on our evaluation of relevant quantitative and qualitative factors, we determined that the classification errors are immaterial to our prior period financial statements and did not warrant an amendment of our financial statements for fiscal 2012. The Company has corrected the comparative presentation of the prior period in the consolidated statements of cash flows for the year ended March 31, 2012 as follows:



	Year Ended
	March 31, 2012
Cash flows from operating activities:
As reported	$5,293
Error correction	(2,181	)
As adjusted	3,112

Cash flows from financing activities:
As reported	$(24,852)
Error correction	2,181
As adjusted	(22,671	)

Schedule of Changes in Allowance for Doubtful Accounts

The following table summarizes the annual changes in our allowance for doubtful accounts:



Predecessor:
Balance at March 31, 2010		$	1,835
	Reductions to expense	(53		)
	Write-off of uncollectible accounts	—
Balance at April 30, 2010		$	1,782
Successor:
Balance at May 1, 2010		$	1,782
	Additions charged to expense	792
	Write-off of uncollectible accounts	(1,087		)
Balance at March 31, 2011		$	1,487
	Additions charged to expense	307
	Write-off of uncollectible accounts	(360		)
Balance at March 31, 2012		$	1,434
	Reductions to expense	(21		)
	Write-off of uncollectible accounts	(272		)
Balance at March 31, 2013		$	1,141

Schedule of Property, Plant and Equipment

Depreciation is computed using the straight-line method over the following lives:



	Useful Lives in Years
Land improvements	15	-	20
Buildings and improvements	10	-	40
Machinery and equipment	3	-	25
Office furniture and equipment	3	-	10
Internally developed software	5	-	7

Property, plant and equipment consisted of the following at March 31:



	2013			2012
Land, buildings and improvements	$	19,372		$	16,391
Machinery and equipment	12,114			9,276
Office furniture and equipment	3,110			1,848
Internally developed software	1,744			816
Construction in Progress	1,042			2,687

Accumulated depreciation	(6,171		)	(3,357		)
	$	31,211		$	27,661

- Definition

Tabular disclosure of the useful life and salvage value of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software.

+ References + Details

- Definition

Tabular disclosure of prior period adjustments to previously issued financial statements including (1) the effect of the correction on each financial statement line item and any per-share amounts affected for each prior period presented (2) the cumulative effect of the change on retained earnings or other appropriate components of equity or net assets in the statement of financial position, as of the beginning of the earliest period presented, and (3) the effect of the prior period adjustments (both gross and net of applicable income tax) on the net income of each prior period presented in the entity's annual report for the year in which the adjustments are made.

+ References + Details