Background and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Dec. 31, 2021

Basis of Presentation - The Company prepares its Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Condensed Consolidated Balance Sheet as of March 31, 2021 was derived from audited financial statements included in the Annual Report on Form 10-K for the year ended March 31, 2021 (“Fiscal 2021 Form 10-K”). The accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, of a normal recurring nature, necessary to present fairly its financial position as of December 31, 2021 and the results of operations for the three and nine months ended December 31, 2021 and cash flows for the nine months ended December 31, 2021. The interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements, including the notes thereto, filed in the Company’s Fiscal 2021 Form 10-K.

Principles of Consolidation

Principles of Consolidation - The Condensed Consolidated Financial Statements include the Company, its wholly-owned subsidiaries, its majority-owned subsidiaries and variable interest entities (“VIEs”) of which the Company is the primary beneficiary. The Company uses the equity method of accounting for equity investments where it exercises significant influence but does not hold a controlling financial interest. Such investments are recorded in Other assets in the Condensed Consolidated Balance Sheets and the related equity earnings from these investments are included in Equity in net income of unconsolidated affiliates in the Condensed Consolidated Statements of Operations. All intercompany balances and transactions have been eliminated in consolidation.

Certain prior year amounts have been reclassified to conform to the fiscal 2022 presentation.

Recent Accounting Guidance

Recently Adopted Accounting Guidance


Standard			Adoption
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes			In December 2019, the FASB issued an ASU to simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC 740, Income Taxes and improve the comparability of financial statements. The Company adopted this standard effective April 1, 2021. The Company’s adoption of the standard had no impact on the Company’s Condensed Consolidated Financial Statements.

Except for the pronouncements described above, there have been no new accounting pronouncements issued or adopted since the filing of the Fiscal 2021 Form 10-K that have significance, or potential significance, to the Condensed Consolidated Financial Statements.

Leases

Nature of the Company’s Leases - The Company has operating and finance leases for plants, yards, corporate offices, tractors, trailers and other equipment. The Company’s leases have remaining terms of less than one year to 30 years. A portion of the Company’s yard leases include an option to extend the leases for up to five years. The Company has included renewal options which are reasonably certain to be exercised in its right-of-use assets and lease liabilities.

Master Lease Agreement – In May 2021, the Company entered into a Master Lease Agreement and an Interim Funding Schedule with Fifth Third Bank, National Association, (“Fifth Third”) to finance its procurement of material handling equipment, trucks and trailers (the “Master Lease Agreement”). The Master Lease Agreement and Interim Funding Schedule have an initial capacity of $62.5 million denominated in USD and $2.5 million denominated in CAD. Financings will either bear interest at a fixed rental amount or at a rate based on the London Interbank Offered Rate plus the applicable margin. In November 2021, the Company purchased all material handling equipment, trucks and trailers previously classified as finance leases under a master lease agreement with its previous service provider. The outstanding lease obligation as of March 31, 2021 was $36.6 million. The purchase was funded with debt through the Master Lease Agreement and Interim Funding Agreement with Fifth Third. As of December 31, 2021, the Company had financings of $43.0 million outstanding under the agreements, including $36.0 million of Equipment Financing (as defined and further discussed in "Note 9. Debt").