Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2016 | Nov. 15, 2016 | Mar. 31, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | NUTRACEUTICAL INTERNATIONAL CORP | ||
Entity Central Index Key | 1,050,007 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 198.7 | ||
Entity Common Stock, Shares Outstanding | 9,204,266 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Current assets: | ||
Cash | $ 6,803 | $ 4,615 |
Accounts receivable, net | 17,680 | 16,798 |
Inventories | 63,923 | 59,440 |
Prepaid expenses and other current assets | 4,217 | 4,195 |
Deferred income taxes | 1,243 | 1,167 |
Total current assets | 93,866 | 86,215 |
Property, plant and equipment, net | 83,048 | 77,645 |
Goodwill | 30,925 | 24,384 |
Intangible assets, net | 22,277 | 17,605 |
Deferred income taxes | 4,310 | 4,932 |
Other non-current assets | 1,429 | 1,668 |
Total assets | 235,855 | 212,449 |
Current liabilities: | ||
Accounts payable | 12,696 | 14,023 |
Accrued expenses | 7,469 | 6,505 |
Total current liabilities | 20,165 | 20,528 |
Long-term debt | 43,500 | 31,500 |
Other non-current liabilities | 200 | 174 |
Total liabilities | 63,865 | 52,202 |
Commitments and contingencies (Notes 10, 14 and 16) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 5,000,000 shares authorized; issued and outstanding—none | 0 | 0 |
Common stock, $0.01 par value, 50,000,000 shares authorized; 9,203,790 shares issued and outstanding at September 30, 2016: 9,489,874 shares issued and 9,487,874 shares outstanding at September 30, 2015 | 92 | 95 |
Additional paid-in capital | 52 | 6,961 |
Retained earnings | 172,276 | 153,618 |
Accumulated other comprehensive income | (430) | (379) |
Treasury stock | 0 | (48) |
Total stockholders' equity | 171,990 | 160,247 |
Total liabilities and stockholders' equity | $ 235,855 | $ 212,449 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2016 | Sep. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 9,203,790 | 9,489,874 |
Common stock, shares outstanding | 9,203,790 | 9,487,874 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | |||
Net sales | $ 232,988 | $ 216,479 | $ 214,474 |
Cost of sales | 114,939 | 110,255 | 108,169 |
Gross profit | 118,049 | 106,224 | 106,305 |
Operating expenses: | |||
Selling, general and administrative | 84,945 | 77,256 | 76,874 |
Amortization of intangible assets | 3,927 | 2,869 | 2,667 |
Impairment of intangible assets | 0 | 1,810 | 267 |
Total operating expenses | 88,872 | 81,935 | 79,808 |
Income from operations | 29,177 | 24,289 | 26,497 |
Interest and other expense, net | 1,252 | 1,051 | 1,421 |
Income before provision for income taxes | 27,925 | 23,238 | 25,076 |
Provision for income taxes | 9,267 | 7,967 | 9,187 |
Net income | 18,658 | 15,271 | 15,889 |
Other comprehensive loss: | |||
Foreign currency translation adjustment, net of tax | (51) | (458) | (122) |
Comprehensive income | $ 18,607 | $ 14,813 | $ 15,767 |
Net income per common share: | |||
Basic (in dollars per share) | $ 2 | $ 1.59 | $ 1.62 |
Diluted (in dollars per share) | $ 2 | $ 1.59 | $ 1.62 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 9,345,754 | 9,588,838 | 9,792,276 |
Dilutive effect of stock options (in shares) | 0 | 3,896 | 8,804 |
Diluted (in shares) | 9,345,754 | 9,592,734 | 9,801,080 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 18,658 | $ 15,271 | $ 15,889 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 14,208 | 12,765 | 11,468 |
Amortization of deferred financing fees | 125 | 130 | 184 |
Impairment of intangible assets | 0 | 1,810 | 267 |
Losses on disposals of property, plant and equipment | 9 | 13 | 3 |
Tax benefit from stock option exercises | 0 | (84) | (51) |
Deferred income taxes | 546 | 17 | 112 |
Changes in assets and liabilities, net of effects of acquisitions: | |||
Accounts receivable, net | 458 | (1,648) | (758) |
Inventories | (1,661) | (1,462) | (6,691) |
Prepaid expenses and other current assets | 392 | (816) | (704) |
Other non-current assets | (15) | (101) | (90) |
Accounts payable | (1,422) | (604) | 9 |
Accrued expenses | 1,453 | (267) | 386 |
Other non-current liabilities | 26 | 22 | 14 |
Net cash provided by operating activities | 32,777 | 25,046 | 20,038 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (8,950) | (8,557) | (11,298) |
Acquisitions of businesses | (26,235) | (1,266) | (16,377) |
Net cash used in investing activities | (35,185) | (9,823) | (27,675) |
Cash flows from financing activities: | |||
Proceeds from debt | 27,000 | 4,500 | 23,500 |
Payments on debt | (15,000) | (16,000) | (13,000) |
Payments of deferred financing fees | 0 | (420) | 0 |
Proceeds from issuances of common stock | 81 | 552 | 211 |
Purchases of common stock for treasury | (7,501) | (5,319) | (5,067) |
Tax benefit from stock option exercises | 0 | 84 | 51 |
Net cash provided by (used in) financing activities | 4,580 | (16,603) | 5,695 |
Effect of exchange rate changes on cash | 16 | (237) | (61) |
Net increase (decrease) in cash | 2,188 | (1,617) | (2,003) |
Cash at beginning of year | 4,615 | 6,232 | 8,235 |
Cash at end of year | $ 6,803 | $ 4,615 | $ 6,232 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury Stock |
Balance (in shares) at Sep. 30, 2013 | 9,842,602 | |||||
Balance at Sep. 30, 2013 | $ 137,876 | $ 98 | $ 15,126 | $ 122,458 | $ 201 | $ (7) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 15,889 | 15,889 | ||||
Other comprehensive loss | (122) | (122) | ||||
Issuances of common stock (in shares) | 13,770 | |||||
Issuances of common stock | 211 | $ 0 | 211 | |||
Tax benefit from stock option exercises (in shares) | 0 | |||||
Tax benefit from stock option exercises | $ 51 | $ 0 | 51 | |||
Equity compensation payments (in shares) | 31,788 | 31,788 | ||||
Equity compensation payments | $ 775 | $ 1 | 774 | |||
Purchases of common stock for treasury | (5,067) | (5,067) | ||||
Retirement of common stock in treasury (in shares) | (210,141) | |||||
Retirement of common stock in treasury | $ (2) | (5,050) | 5,052 | |||
Balance (in shares) at Sep. 30, 2014 | 9,678,019 | |||||
Balance at Sep. 30, 2014 | 149,613 | $ 97 | 11,112 | 138,347 | 79 | (22) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 15,271 | 15,271 | ||||
Other comprehensive loss | (458) | (458) | ||||
Issuances of common stock (in shares) | 36,791 | |||||
Issuances of common stock | 552 | 552 | ||||
Tax benefit from stock option exercises | $ 84 | 84 | ||||
Equity compensation payments (in shares) | 24,827 | 24,827 | ||||
Equity compensation payments | $ 504 | $ 0 | 504 | |||
Purchases of common stock for treasury | (5,319) | (5,319) | ||||
Retirement of common stock in treasury (in shares) | (249,763) | |||||
Retirement of common stock in treasury | $ (2) | (5,291) | 5,293 | |||
Balance (in shares) at Sep. 30, 2015 | 9,489,874 | |||||
Balance at Sep. 30, 2015 | 160,247 | $ 95 | 6,961 | 153,618 | (379) | (48) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 18,658 | 18,658 | ||||
Other comprehensive loss | (51) | (51) | ||||
Issuances of common stock (in shares) | 3,343 | |||||
Issuances of common stock | $ 81 | 81 | ||||
Equity compensation payments (in shares) | 22,664 | 22,664 | ||||
Equity compensation payments | $ 556 | 556 | ||||
Purchases of common stock for treasury | (7,501) | (7,501) | ||||
Retirement of common stock in treasury (in shares) | (312,091) | |||||
Retirement of common stock in treasury | $ (3) | (7,546) | 7,549 | |||
Balance (in shares) at Sep. 30, 2016 | 9,203,790 | |||||
Balance at Sep. 30, 2016 | $ 171,990 | $ 92 | $ 52 | $ 172,276 | $ (430) | $ 0 |
Description of Business
Description of Business | 12 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Nutraceutical International Corporation and its subsidiaries (the "Company") is an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores. Internationally, the Company markets and distributes branded nutritional supplements and other natural products to and through health and natural product distributors and retailers. The Company's core business strategy is to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements. The Company believes that the consolidation and integration of these acquired businesses provides ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships. The Company manufactures and sells nutritional supplements and other natural products under numerous brands, including Solaray ®, KAL ®, Dynamic Health ®, Nature's Life ®, LifeTime ®, Natural Balance ® , NaturalCare ®, Health from the Sun ®, Pioneer ®, Nutra BioGenesis ®, Life-flo ®, Organix South ®, Heritage Store ® and Monarch Nutraceuticals ®. The Company owns neighborhood natural food markets, which operate under the trade names The Real Food Company™ , Thom's Natural Foods™ , Cornucopia Community Market™ and Granola's™. The Company also owns health food stores, which operate under various trade names, including Fresh Vitamins™ and Peachtree Natural Foods ®. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation —The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances were eliminated. Use of Estimates —The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America required management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Significant estimates included values and lives assigned to acquired intangible assets, reserves for customer returns and allowances, uncollectible accounts receivable, valuation adjustments for slow-moving, obsolete and/or damaged inventory and valuation and recoverability of long-lived assets. Actual results may differ from these estimates. Fair Value of Financial Instruments —The Company believes that the fair values of financial instruments, including cash, accounts receivable, accounts payable and debt, approximated their respective book values at September 30, 2016 and 2015 . The book values of cash, accounts receivable and accounts payable approximated their fair values based on their short-term nature. Estimated fair values for debt have been determined based on borrowing rates currently available to the Company for bank loans with similar terms and maturities and are classified as Level 2 (significant observable inputs other than quoted prices) in the Financial Accounting Standards Board's ("FASB") fair value hierarchy. Cash —The majority of the Company's cash was held by one bank at September 30, 2016 . As a result of this concentration, the Company's cash balances frequently exceed federally insured limits. The Company does not believe it is subject to any other unusual risks as a result of this concentration other than those normally associated with commercial banking relationships. Accounts Receivable —Provision is made for estimated bad debts based on a periodic analysis of individual customer balances, including an evaluation of days sales outstanding, payment history, recent payment trends and perceived creditworthiness. Inventories —Branded inventories included freight-in, materials, labor and overhead costs and were stated at the lower of cost or market, cost being determined by a moving weighted average. Neighborhood natural food markets and health food stores inventories were accounted for using the retail method. Valuation adjustments are made for slow-moving, obsolete and/or damaged inventory based on a periodic analysis of individual inventory items, including an evaluation of historical usage and/or movement, age, expiration date and general condition. Property, Plant and Equipment —Property, plant and equipment were stated at cost, less accumulated depreciation and amortization. Depreciation and amortization were provided using the straight-line method over the estimated useful lives of the respective assets. Expenditures for renewals and betterments were capitalized, while maintenance and repairs were charged to operations in the periods incurred. Upon sale or disposal of an asset, the historical cost and related accumulated depreciation or amortization of such asset were removed from their respective accounts and any gain or loss was recorded in the Consolidated Statements of Comprehensive Income. The Company evaluates the recoverability of property, plant and equipment whenever events or circumstances indicate that the carrying amount of an asset group may not be recoverable. The Company measures recoverability of an asset group by comparison of its carrying amount to the future undiscounted cash flows the asset group is expected to generate. If an asset group is considered to be impaired, the difference between the carrying amount and the fair value of the impaired asset group is recognized as an impairment charge. Goodwill and Intangible Assets —The excess of purchase price over fair value of assets acquired in business combinations was classified as goodwill. Intangible assets with finite useful lives are amortized and are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is tested annually for impairment and when events or changes in circumstances indicate the carrying value may not be recoverable. The Company performs its annual impairment testing as of September 30 each year, which is the last day of the Company's fiscal year. A two-step process is used to test for goodwill impairment. The first step is to determine if there is an indication of impairment by comparing the estimated fair value of each reporting unit to its carrying value, including existing goodwill. Reporting unit fair values are estimated using market data as well as other factors. Goodwill is considered impaired if the carrying value of a reporting unit exceeds the estimated fair value. Upon an indication of impairment, a second step is performed to measure the amount of the impairment by comparing the implied fair value of the reporting unit's goodwill with its carrying value. Amortizable intangible assets are reviewed for recoverability by comparing an asset group's carrying amount to the future undiscounted cash flows the asset group is expected to generate. If an asset group is considered to be impaired, the difference between the carrying amount and the fair value of the impaired asset group is recorded as an impairment charge. Deferred Financing Fees —The Company deferred certain debt issuance costs, including bank, legal and other fees, related to the establishment and subsequent amendment of its credit agreement (Note 9). These costs are being amortized using the straight-line method. Foreign Currency Translation —The functional currency of each of the Company's foreign subsidiaries and branches is the local currency. All assets and liabilities of foreign subsidiaries and branches were translated into U.S. Dollars at fiscal year-end exchange rates. Income and expense items were translated at exchange rates prevailing during the year. The resulting translation adjustments, net of income taxes, were recorded in accumulated other comprehensive income, which is a component of stockholders' equity. Revenue Recognition —Revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the product has been shipped and the customer takes ownership and assumes the risk of loss; (3) the selling price is fixed or determinable; and (4) collection of the resulting receivable is reasonably assured. The Company believes that these criteria are satisfied upon shipment from its facilities or, in the case of the Company's neighborhood natural food markets and health food stores, at the point of sale within these stores. Revenue is reduced by provisions for estimated customer returns and allowances, which are based on historical averages that have not varied significantly for the periods presented, as well as specific known claims, if any. Shipping and Handling Costs —The Company incurred shipping and handling costs related to third party freight charges, as well as internal warehousing and order fulfillment costs. These costs were classified as selling, general and administrative expenses and totaled $15,567 , $14,863 and $15,073 for the years ended September 30, 2016 , 2015 and 2014 , respectively. Research and Development —The Company expensed research and development costs as incurred. For the years ended September 30, 2016 , 2015 and 2014 , the Company incurred $3,715 , $3,624 and $3,806 , respectively, in research and development expenditures primarily related to product development. Advertising —The Company expensed advertising costs as incurred. These costs were included in selling, general and administrative expenses. Income Taxes —The Company accounted for income taxes using the asset and liability method which required the Company to record deferred tax assets and liabilities for the differences between the financial statement and tax bases of assets and liabilities using the expected applicable future tax rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be ultimately realized. The Company evaluated its uncertain tax positions taken or expected to be taken in a tax return including the related financial statement recognition, measurement, reporting and disclosure (Note 11). Concentrations of Credit Risk —In the normal course of business, the Company provided credit terms to its customers; however, collateral was not required. Accordingly, the Company performed credit evaluations of its customers and maintained allowances for possible losses which, when realized, were within the range of management's expectations. From time to time, a higher concentration of credit risk existed on outstanding accounts receivable for a select number of customers due to individual buying patterns. New Accounting Standards —In February 2016, the FASB issued authoritative guidance, which is included in Accounting Standards Codification ("ASC") 842, " Leases ." This guidance requires lessees to recognize most leases on the balance sheet by recording a right-of-use asset and a lease liability. This guidance is effective for the Company as of October 1, 2019. The Company is currently evaluating the impact this standard will have on its consolidated financial statements. In November 2015, the FASB issued authoritative guidance, which is included in ASC 740, " Income Taxes ." This guidance simplifies the presentation of deferred income taxes and requires that deferred tax assets and liabilities be classified as noncurrent in the classified statement of financial position. This guidance is effective for the Company as of October 1, 2017 and is not expected to have a material impact on the consolidated financial statements as the guidance only changes the classification of deferred income taxes. In September 2015 the FASB issued authoritative guidance, which is included in ASC 805, " Business Combinations. " This guidance simplifies the accounting for measurement-period adjustments and is effective for the Company as of October 1, 2016. This guidance is not expected to have a material impact on the consolidated financial statements. In July 2015, the FASB issued authoritative guidance, which is included in ASC 330, " Inventory. " This guidance simplifies the accounting for measuring inventory at the lower of cost and net realizable value and is effective for the Company as of October 1, 2017. This guidance is not expected to have a material impact on the consolidated financial statements. In May 2014, the FASB issued authoritative guidance, which is included in ASC 606, " Revenue from Contracts with Customers ." This guidance provides a single, comprehensive revenue recognition model for all contracts with customers and requires that a company recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In July 2015, the FASB delayed the effective date of this guidance by one year. As a result, this guidance is effective for the Company as of October 1, 2018 and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact this standard may have on its consolidated financial statements. The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its consolidated financial statements. |
Acquisitions
Acquisitions | 12 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions During the year ended September 30, 2016, the Company made two acquisitions of businesses. On October 6, 2015, the Company acquired certain operating assets of Dynamic Health Laboratories, Inc. ("Dynamic Health"). On February 18, 2016, the Company acquired certain operating assets of Aubrey Organics, Inc. ("Aubrey Organics"). The aggregate purchase price of these acquisitions was $26,235 in cash. During the year ended September 30, 2015, the Company made two acquisitions of businesses. On November 18, 2014, the Company acquired certain operating assets of Agape Health Products. On June 4, 2015, the Company acquired certain operating assets of ProClay, LLC. The aggregate purchase price of these acquisitions was $1,266 in cash. During the year ended September 30, 2014, the Company made seven acquisitions of businesses. On October 16, 2013, the Company acquired certain operating assets of TCCD International, Inc. On November 25, 2013, the Company acquired certain operating assets of Green Luxury Brands, Inc. On December 19, 2013, the Company acquired certain operating assets of Twinlab Corporation. On January 15, 2014, the Company acquired certain operating assets of Peachtree Natural Foods, Inc. On April 11, 2014, the Company acquired certain operating assets of Northwest Health Foods, Inc. On April 17, 2014, the Company acquired certain operating assets of Bio-Genesis Nutraceuticals, Inc. On August 26, 2014, the Company acquired certain operating assets of Cooper Nutrition, Inc. The aggregate purchase price of these acquisitions was $16,377 in cash. These acquisitions are in keeping with the Company's business strategy of consolidating the fragmented industry where it competes. These acquisitions were accounted for using the acquisition method of accounting. Accordingly, the aggregate purchase price was assigned to the assets acquired based on their fair values at the respective dates of acquisition. The excess of aggregate purchase price over the fair values of the assets acquired was classified as goodwill (Note 7). The goodwill relates to expected synergies from these acquisitions. The Consolidated Statements of Comprehensive Income and Consolidated Statements of Cash Flows presented herein include the activities of these acquired businesses from their respective dates of acquisition. The following reflects the final allocation of the aggregate purchase prices for the fiscal 2016 , 2015 and 2014 acquisitions to the aggregate assets acquired: Fiscal 2016 Fiscal 2016 Fiscal 2015 Fiscal 2014 Aggregate assets acquired: Current assets $ 3,821 $ 755 $ 111 $ 2,773 Property, plant and equipment 644 6,004 — — Goodwill 6,541 — 762 7,801 Intangible assets 8,020 450 393 5,803 $ 19,026 $ 7,209 $ 1,266 $ 16,377 The fiscal 2016 , 2015 and 2014 acquired intangible assets totaling $8,470 , $393 and $ 5,803 , respectively, related to trademarks, tradenames and customer relationships, and are being amortized over periods of two to fifteen years for financial statement purposes. The fiscal 2016 , 2015 and 2014 acquired intangible assets are expected to be deductible for tax purposes over fifteen years. Goodwill, which is not subject to amortization for financial statement purposes, of $ 6,541 for fiscal 2016 , $ 762 for fiscal 2015 and $ 7,801 for fiscal 2014 , is expected to be deductible for tax purposes over fifteen years. Since the date of acquisition (October 6, 2015), net sales of $17,393 and gross profit of $6,802 for Dynamic Health were included in the Consolidated Statements of Comprehensive Income for the year ended September 30, 2016 . The Company tracks selling, general and administrative expenses on a consolidated basis, not on a brand-by-brand basis. As a result, the disclosure of any results after gross profit is impracticable. The following table provides unaudited pro forma information for the year ended September 30, 2015 as if the acquisition of Dynamic Health had been completed on October 1, 2014. Pro forma information was not provided for the year ended September 30, 2016 since the acquisition was completed near the beginning of the year and the pro forma results are not materially different than actual results. The information has been provided for illustrative purposes only and is not necessarily indicative of the actual results that would have been achieved by the Company for the period presented or that will be achieved in the future. The pro forma information has been adjusted to give effect to items directly attributable to the Dynamic Health acquisition. These adjustments include acquisition costs, amortization expense associated with acquired intangible assets, interest expense associated with borrowings on the Company's revolving credit facility to fund the acquisition, application of the Company's depreciable lives policy for property, plant and equipment, elimination of intercompany transactions and any consequential tax effects. For the Year Ended Net sales $ 233,440 Net income $ 15,117 This information has not been adjusted to reflect any changes in the operations of the business subsequent to acquisition. Changes in the operations of the acquired business may include, but are not limited to, discontinuation of certain customers and/or products, application of the Company's pricing and credit policies, integration of systems and personnel, changes in manufacturing processes, relocation of facilities, potential cost synergies and changes in marketing and sales programs. Due to these changes, future results could be materially different than the pro forma information provided. The actual and pro forma net sales and earnings related to the Aubrey Organics acquisition were not material. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable, net of allowances for sales returns and doubtful accounts, consisted of the following: September 30, 2016 2015 Accounts receivable $ 18,732 $ 17,882 Less allowances (1,052 ) (1,084 ) $ 17,680 $ 16,798 |
Inventories
Inventories | 12 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories were comprised of the following: September 30, 2016 2015 Raw materials $ 25,792 $ 23,106 Work-in-process 11,711 9,755 Finished goods 26,420 26,579 $ 63,923 $ 59,440 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, net of accumulated depreciation and amortization, were comprised of the following: Estimated Useful Life in Years September 30, 2016 2015 Land - $ 10,080 $ 8,987 Buildings 30 81,004 74,214 Leasehold improvements 1 - 5 3,507 3,326 Furniture, fixtures and equipment 2 - 7 69,134 64,831 163,725 151,358 Less accumulated depreciation and amortization (80,677 ) (73,713 ) $ 83,048 $ 77,645 At September 30, 2016 and 2015 , the Company had no equipment under capital leases. Substantially all property, plant and equipment of the Company collateralized its debt obligations (Note 9). Depreciation and amortization of property, plant and equipment totaled $10,281 , $9,896 and $8,801 for the years ended September 30, 2016 , 2015 and 2014 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the years ended September 30, 2015 and 2016 were as follows: Goodwill Accumulated Impairment Net Balance as of October 1, 2014 $ 64,016 $ (40,394 ) $ 23,622 Goodwill attributable to fiscal 2015 acquisitions 762 — 762 Balance as of September 30, 2015 64,778 (40,394 ) 24,384 Goodwill attributable to fiscal 2016 acquisitions 6,541 — 6,541 Balance as of September 30, 2016 $ 71,319 $ (40,394 ) $ 30,925 The carrying amounts of intangible assets at September 30, 2016 and 2015 were as follows: September 30, 2016 September 30, 2015 Weighted- Gross Carrying Amount(1) Accumulated Amortization(1) Net Carrying Amount Gross Carrying Amount(1) Accumulated Amortization(1) Net Carrying Amount Intangible assets subject to amortization: Trademarks/trade names/licenses $ 13,904 $ (3,137 ) $ 10,767 $ 12,470 $ (1,966 ) $ 10,504 11 Customer relationships/non-compete agreements 23,867 (12,357 ) 11,510 16,836 (9,773 ) 7,063 7 Developed software and technology 772 (772 ) — 772 (772 ) — 5 38,543 (16,266 ) 22,277 30,078 (12,511 ) 17,567 Intangible assets not subject to amortization: Licenses — — — 38 — 38 $ 38,543 $ (16,266 ) $ 22,277 $ 30,116 $ (12,511 ) $ 17,605 ______________________________ (1) Amounts include the impact of foreign currency translation adjustments. Aggregate amortization expense related to intangible assets subject to amortization totaled $3,927 , $2,869 and $2,667 for the years ended September 30, 2016 , 2015 and 2014 , respectively. Estimated amortization expense related to intangible assets subject to amortization is as follows: Year Ending September 30, Estimated Amortization Expense 2017 $ 3,598 2018 3,406 2019 2,979 2020 2,890 2021 2,472 Thereafter 6,932 $ 22,277 In September 2015, the Company made a decision to expand its brand consolidation plan in an effort to simplify its brand offerings and facilitate the customer ordering process. Based on this decision, the Company no longer expects that the economic benefit of any of its indefinite-lived tradenames extends beyond the foreseeable future. As a result, as of September 30, 2015 , the Company determined these tradenames with an aggregate carrying value of $8,727 should be assigned finite useful lives. In accordance with ASC 350, " Intangibles—Goodwill and Other, " these tradenames were first tested for impairment as indefinite-lived intangible assets resulting in non-cash intangible asset impairment charges of $1,810 ( $1,112 after tax, or $0.12 per diluted share). The remaining $6,917 was reclassified to amortizable intangible assets as of September 30, 2015 with a weighted-average amortization period of 10 years. In performing its annual impairment testing as of September 30, 2014 , the Company determined that there had been an increase in the probability that certain of its indefinite-lived tradenames could be consolidated with other existing tradenames in the future. As a result, the Company determined these tradenames with an aggregate carrying value of $1,093 should be assigned finite useful lives. In accordance with ASC 350, these tradenames were first tested for impairment as indefinite-lived intangible assets resulting in a non-cash intangible asset impairment charge of $267 ( $168 after tax, or $0.02 per diluted share). The remaining $826 was reclassified to amortizable intangible assets as of September 30, 2014 with a weighted-average amortization period of 15 years. General and economic conditions may impact retail and consumer demand, as well as the market price of the Company's common stock, and could negatively impact the Company's future operating performance, cash flow and/or stock price and could result in additional goodwill and/or intangible asset impairment charges being recorded in future periods. Also, the Company periodically reviews its brands to achieve marketing, sales and operational synergies. These reviews could result in additional brands being consolidated or discontinued and could result in additional intangible asset impairment charges being recorded in future periods. Additional goodwill and/or intangible asset impairment charges could materially impact the Company's consolidated financial statements. The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty and complexity. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Sep. 30, 2016 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses were comprised of the following: September 30, 2016 2015 Employee payroll, taxes, benefits and performance incentives $ 6,298 $ 5,270 Other accrued expenses 1,171 1,235 $ 7,469 $ 6,505 |
Debt
Debt | 12 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt was comprised of the following: September 30, 2016 2015 Long-term debt—revolving credit facility $ 43,500 $ 31,500 On November 4, 2014, the Company amended its revolving credit facility (the "Credit Agreement"). The Credit Agreement extends the term of the credit facility to November 2019, increases the available credit borrowings to $100,000 with no automatic reductions and provides an accordion feature that can increase the available credit borrowings to $130,000 subject to approval by the lenders and compliance with certain covenants and conditions. The lenders under the Credit Agreement continue to be Rabobank International and Wells Fargo. To date, the Company has not experienced any difficulties in accessing the available funds under the Credit Agreement. Deferred financing fees of $420 related to the Credit Agreement are being amortized over the term of the Credit Agreement. At September 30, 2016 , the Company had outstanding revolving credit borrowings of $43,500 under the Credit Agreement. Borrowings under the Credit Agreement are collateralized by substantially all assets of the Company. At the Company's election, borrowings bear interest at the applicable Eurodollar Rate plus a variable margin or at a Base Rate plus a variable margin. Base Rate is the higher of: (i) the Prime Lending Rate , (ii) the Federal Funds Rate plus 0.5% or (iii) the one-month Eurodollar Rate multiplied by the Statutory Reserve Rate plus 1.0% (capitalized terms are defined in the Credit Agreement, a copy of which was filed with the Securities and Exchange Commission on November 5, 2014). At September 30, 2016 , the applicable weighted-average interest rate for outstanding borrowings was 2.24% . The Company is also required to pay a variable quarterly fee on the unused balance under the Credit Agreement. At September 30, 2016 , the applicable rate was 0.25% . Accrued interest on Eurodollar Rate borrowings is payable based on elected intervals of one , two or three months. Accrued interest on Base Rate borrowings is payable quarterly. The Credit Agreement matures on November 4, 2019, and the Company is required to repay all principal and interest outstanding under the Credit Agreement on such date. The Credit Agreement contains restrictive covenants, including restrictions on incurring other indebtedness and requirements that the Company maintain certain financial ratios. As of September 30, 2016 , the Company was in compliance with the restrictive covenants. Upon the occurrence of a default, the lender has various remedies or rights, which may include proceeding against the collateral or requiring the Company to repay all amounts outstanding under the Credit Agreement. |
Lease Commitments and Obligatio
Lease Commitments and Obligations | 12 Months Ended |
Sep. 30, 2016 | |
Leases [Abstract] | |
Lease Commitments and Obligations | Lease Commitments and Obligations The Company leases retail, office, storage and warehouse space under non-cancelable operating leases, the last of which expires during fiscal 2022; however, the Company has negotiated extension options in many cases. These operating leases require the Company to pay all taxes, insurance and maintenance. The following summarizes future minimum lease payments required under the Company's significant non-cancelable operating leases: Year Ending September 30, Minimum Lease Payments 2017 $ 3,864 2018 1,455 2019 779 2020 318 2021 135 Thereafter 10 $ 6,561 Total rent expense incurred by the Company under significant non-cancelable operating leases was $3,813 , $3,141 and $2,905 for the years ended September 30, 2016 , 2015 and 2014 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes was comprised of the following: Years Ended September 30, 2016 2015 2014 Current: Federal $ 7,790 $ 6,516 $ 7,797 State 843 973 1,084 Foreign 88 210 213 Total current 8,721 7,699 9,094 Deferred: Federal 446 220 69 State 100 48 24 Total deferred 546 268 93 $ 9,267 $ 7,967 $ 9,187 The differences between income taxes at the statutory federal income tax rate and income taxes reported in the Consolidated Statements of Comprehensive Income were as follows: Years Ended September 30, 2016 2015 2014 Federal tax at statutory rate $ 9,774 $ 8,133 $ 8,777 State taxes, net of federal benefit 613 664 721 Non-deductible expenses 269 192 195 Manufacturing benefit (847 ) (613 ) (586 ) Credit for increasing research activities (439 ) (103 ) (30 ) Change in valuation allowance — (334 ) 163 Other (103 ) 28 (53 ) $ 9,267 $ 7,967 $ 9,187 A summary of the composition of deferred income tax assets and liabilities was as follows: September 30, 2016 2015 Current Deferred Income Tax Assets and Liabilities Accounts receivable reserves $ 409 $ 370 Inventory valuation adjustments 874 816 Accrued liabilities (40 ) (19 ) $ 1,243 $ 1,167 Non-Current Deferred Income Tax Assets Goodwill and other intangible assets $ 2,264 $ 3,376 Property, plant and equipment 1,725 1,372 Foreign net operating loss carryforwards 2,103 1,881 Foreign tax credit carryforwards 321 184 6,413 6,813 Less valuation allowance (2,103 ) (1,881 ) $ 4,310 $ 4,932 As of September 30, 2016 and 2015 , the Company had foreign net operating loss carryforwards of $8,988 and $8,038 , respectively. If not used, loss carryforwards of $3,653 will expire between 2017 and 2026 while $5,335 do not expire. As of September 30, 2016 and 2015 , full valuation allowances were recorded of $2,103 and $1,881 , respectively, as the Company believed it was not likely it would be able to utilize the loss carryforwards. As of September 30, 2014 , the Company recorded a valuation allowance of $334 against its non-current deferred tax asset resulting from foreign tax credit carryforwards. As of September 30, 2015 , the Company released this valuation allowance as the Company believed it would be able to utilize the credit carryforwards. As of September 30, 2016 and 2015 , the Company had no uncertain tax positions that required recognition or disclosure in its Consolidated Statements of Comprehensive Income. The Company files income tax returns in the United States federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. The Company is no longer subject to U.S. federal tax examinations for fiscal years before 2013. The Company is no longer subject to examination in any U.S. state jurisdiction or foreign jurisdiction for fiscal years prior to 2011. |
Capital Stock
Capital Stock | 12 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Capital Stock | Capital Stock Description of Capital Stock —At September 30, 2016 and 2015 , the Company had two authorized classes of stock: Common stock and preferred stock, each with a par value of $0.01 per share. Stock Option Plans —During the year ended September 30, 1998, the Company's Board of Directors adopted the 1998 Stock Incentive Plan. This plan provided for granting options to purchase common stock to executives, employees and consultants of the Company and its subsidiaries. Grants under this plan vested over a period of two to four years and expire no later than the tenth anniversary of the date of grant. In aggregate, 1,050,000 shares of common stock were reserved for issuance under this plan. As of September 30, 2016 , no options to purchase shares of common stock were issued, outstanding or exercisable under this plan. During the year ended September 30, 1998, the Company's Board of Directors adopted the 1998 Non-Employee Director Stock Option Plan. This plan provided for granting options to purchase common stock to non-employee directors of the Company. Grants under this plan vested over a period of three years and expire no later than the tenth anniversary of the date of grant. In aggregate, 150,000 shares of common stock were reserved for issuance under this plan. As of September 30, 2016 , no options to purchase shares of common stock were issued, outstanding or exercisable under this plan. On September 30, 2005, the Company terminated the 1998 Stock Incentive Plan and the 1998 Non-Employee Director Stock Option Plan. After September 30, 2005, no new awards of any kind were granted under any of these plans. However, the termination of these plans did not have any effect on outstanding options. As of September 30, 2016 , there were no outstanding, vested options under either of these plans. On January 28, 2013, stockholders approved the Nutraceutical International Corporation 2013 Long-Term Equity Incentive Plan (the "2013 Plan") and the reservation of 800,000 shares of the Company's common stock for issuance under the 2013 Plan. Equity awards available under the 2013 Plan include stock options, stock appreciation rights and restricted stock awards. The 2013 Plan provides a means through which the Company may attract and retain key personnel, including non-executive directors, and provides a means for directors, officers, employees, consultants and advisors to acquire and maintain an equity interest in the Company. The 2013 Plan will be administered by the Compensation Committee of the Board of Directors of the Company, which has the authority to determine the terms of the awards, determine the number of shares of the Company's common stock to be covered by the awards and make such other determinations as necessary in administering the 2013 Plan. The 2013 Plan will terminate on the tenth anniversary of its effective date. In conjunction with the Company's fiscal 2015, fiscal 2014 and fiscal 2013 incentive compensation (bonus) payments, 22,664 , 24,827 and 31,788 shares of the Company's common stock were issued, respectively. These non-cash stock awards were granted on December 11, 2015, December 11, 2014 and December 11, 2013 at a fair value of $556 , $504 and $775 , respectively, with fair value being determined by the closing price of the Company's common stock on the grant date. These stock awards were registered, unrestricted and fully vested on the grant date. As of September 30, 2016, 720,721 shares of the Company's common stock were available for issuance under the 2013 Plan. As of September 30, 2016 , no options to purchase shares of common stock were issued, outstanding or exercisable. The following table sets forth option activity under the 1998 Stock Incentive Plan and the 1998 Non-Employee Director Stock Option Plan for the years ended September 30, 2014 and 2015 . Number of Options Average Price Per Share Aggregate Option Price Outstanding at October 1, 2013 42,500 $ 13.59 $ 577 Exercised (10,000 ) 11.53 (115 ) Outstanding at September 30, 2014 32,500 14.22 462 Exercised (32,500 ) 14.22 (462 ) Outstanding at September 30, 2015 — $ — Options granted were issued at exercise prices that represented the quoted market price of common stock at the respective grant dates. During the years ended September 30, 2015 and 2014 , the Company received proceeds of $462 and $115 , respectively, related to the exercise of stock options. During these same periods, the Company recorded tax benefits of $84 and $51 , respectively, and optionees realized aggregate pre-tax gains of $219 and $133 , respectively, from these stock option exercises. Share Purchase Program —Prior to fiscal 2016, the Company's Board of Directors approved a share purchase program authorizing the Company to buy up to 4,500,000 shares of common stock of the Company. On July 26, 2016, the Company's Board of Directors approved the addition of 1,000,000 shares to the Company's previously approved share purchase program. During fiscal 2016, the Company purchased 310,091 shares at an aggregate price of $7,501 . During fiscal 2015, the Company purchased 250,763 shares at an aggregate price of $5,319 . During fiscal 2014, the Company purchased 210,841 shares at an aggregate price of $5,067 . All shares of common stock held in treasury were retired prior to September 30 in the respective fiscal year of purchase except at September 30, 2015 and 2014 the Company held 2,000 and 1,000 shares of common stock in treasury, respectively. As of September 30, 2016, the Company was permitted to purchase up to 1,171,170 additional shares under its approved share purchase program. The shares available for repurchase at September 30, 2016 have no expiration date. The Company accounts for treasury shares using the cost method. Direct Stock Purchase Plan —In October 2007, the Company registered a direct stock purchase plan with the Securities and Exchange Commission. The purpose of this direct stock purchase plan is to provide a convenient way for existing stockholders, as well as new investors, to purchase shares of the Company's common stock. A total of 1,500,000 shares of the Company's common stock were registered under the plan with 3,343 and 4,291 shares purchased for the years ended September 30, 2016 and 2015, respectively. As of September 30, 2016, there were 1,374,101 shares of common stock available for purchase under this plan. |
Segments
Segments | 12 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segments | Segments Segment identification and selection is consistent with the management structure used by the Company's chief operating decision maker to evaluate performance and make decisions regarding resource allocation, as well as the materiality of financial results consistent with that structure. Based on the Company's management structure and method of internal reporting, the Company has one operating segment. The Company's chief operating decision maker does not review operating results on a disaggregated basis; rather, the chief operating decision maker reviews operating results on an aggregate basis. Net sales attributed to customers in the United States and foreign countries for the years ended September 30, 2016 , 2015 and 2014 were as follows: Year Ended September 30, 2016 2015 2014 United States $ 202,931 $ 189,505 $ 185,729 Foreign countries 30,057 26,974 28,745 $ 232,988 $ 216,479 $ 214,474 Certain net sales attributed to customers in the United States are sold to customers who in turn may sell such products to customers in foreign countries while certain net sales attributed to customers in foreign countries are sold to customers who in turn may sell such products to customers in the United States. The Company's net sales by product group for the years ended September 30, 2016 , 2015 and 2014 were as follows: Year Ended September 30, 2016 2015 2014 Branded nutritional supplements and other natural products $ 211,145 $ 192,832 $ 190,105 Other(1) 21,843 23,647 24,369 $ 232,988 $ 216,479 $ 214,474 __________________________________ (1) Net sales for any other product or group of similar products are less than 10% of consolidated net sales. In October 2015, the Company made a decision to classify certain net sales in the other product group that were previously included in the branded nutritional supplements and other natural products group. As a result of this decision, the other product group net sales amount for the years ended September 30, 2015 and 2014 has been increased by $3,065 and $3,732 , respectively, from the prior year's presentation. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Sep. 30, 2016 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans 401(k) Plan —The Company has a 401(k) defined contribution profit sharing plan that covers substantially all employees. Under the plan, employees may contribute up to 75% of their compensation subject to certain exceptions and limitations. In addition, employees who meet certain age requirements may contribute additional amounts permitted by law under the plan. The Company makes matching contributions to the plan up to the first 4% of employee contributions and is permitted to make discretionary contributions under the plan. The amounts contributed to the plan by the Company were $1,014 , $936 and $890 for the years ended September 30, 2016 , 2015 and 2014 , respectively. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Items | 12 Months Ended |
Sep. 30, 2016 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosure of Cash Flow Items | Supplemental Disclosure of Cash Flow Items Cash paid by the Company for interest was $1,029 , $966 and $1,163 for the years ended September 30, 2016 , 2015 and 2014 , respectively. Cash paid by the Company for income taxes was $9,764 , $7,172 and $8,966 for the years ended September 30, 2016 , 2015 and 2014 , respectively. In conjunction with the Company's fiscal 2015 , 2014 and 2013 incentive compensation (bonus) payments, non-cash stock awards of 22,664 , 24,827 and 31,788 shares of the Company's common stock were issued, respectively. These non-cash stock awards were granted on December 11, 2015, December 11, 2014 and December 11, 2013 at an aggregate fair value of $556 , $504 and $775 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The formulation, manufacturing, processing, packaging, labeling, advertising, distribution and sale of nutritional supplements (including vitamins, amino acids, minerals, herbs, other botanicals and other dietary ingredients), such as those sold by the Company, are subject to regulation by one or more federal agencies, principally the Food and Drug Administration (the "FDA") and the Federal Trade Commission and, to a lesser extent, the Consumer Product Safety Commission and the United States Department of Agriculture. These activities are also regulated by various governmental agencies for the states and localities in which the Company's products are sold, as well as by governmental agencies in certain countries in which the Company's products are sold outside the United States. Although management believes that the Company is in material compliance with the statutes, laws, rules and regulations of every jurisdiction in which it operates, from time to time one or more government agencies have asserted or may assert that some particular aspect or facility is not in compliance with a specific provision or law. No assurance can be given that the Company's compliance with applicable statutes, laws, rules and regulations will not be challenged by governing authorities or private parties or that the Company's response to any such challenge will be successful or that such challenges will not have a material adverse effect on the Company's financial position, results of operations or cash flows. The Company, like any other retailer, distributor or manufacturer of products that are designed to be ingested, also faces inherent risk of exposure to product liability claims in the event that the use of its products results in injury. With respect to product liability claims, the Company has liability insurance; however, liability policies contain deductibles and exclusions (such as those related to specific ingredients or types of claims) and there can be no assurance that such insurance will be adequate to cover all potential liabilities. In the event that the Company does not have adequate insurance (or any insurance) or contractual indemnification from parties supplying raw materials or marketing its products, product liability related to defective products could have a material adverse effect on the Company. The Company is involved in various legal matters arising in the normal course of business. In the opinion of management, the losses related to individual regulatory and legal matters in which the Company is presently involved are not probable and no estimate can be made of the range of potential gains or losses. While incapable of estimation, in the opinion of management, the individual regulatory and legal matters in which the Company is presently involved are not expected to have a material adverse effect on the Company's financial position, results of operations or cash flows. However, the aggregate liability of the Company arising from regulatory and legal proceedings related to these matters or future matters could have a material effect on the Company's financial position, results of operations or cash flows. |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Sep. 30, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS Description Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period (dollars in thousands) September 30, 2016 Deducted from related asset account: Allowance for sales returns $ 751 $ 4,475 $ — $ 4,458 $ 768 Allowance for doubtful accounts 333 60 — 109 284 Allowance for deferred tax assets 1,881 222 — — 2,103 September 30, 2015 Deducted from related asset account: Allowance for sales returns 763 4,033 — 4,045 751 Allowance for doubtful accounts 471 45 — 183 333 Allowance for deferred tax assets 1,981 (100 ) — — 1,881 September 30, 2014 Deducted from related asset account: Allowance for sales returns 788 4,151 — 4,176 763 Allowance for doubtful accounts 864 (250 ) — 143 471 Allowance for deferred tax assets 1,653 328 — — 1,981 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation —The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances were eliminated. |
Use of Estimates | Use of Estimates —The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America required management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Significant estimates included values and lives assigned to acquired intangible assets, reserves for customer returns and allowances, uncollectible accounts receivable, valuation adjustments for slow-moving, obsolete and/or damaged inventory and valuation and recoverability of long-lived assets. Actual results may differ from these estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments —The Company believes that the fair values of financial instruments, including cash, accounts receivable, accounts payable and debt, approximated their respective book values at September 30, 2016 and 2015 . The book values of cash, accounts receivable and accounts payable approximated their fair values based on their short-term nature. Estimated fair values for debt have been determined based on borrowing rates currently available to the Company for bank loans with similar terms and maturities and are classified as Level 2 (significant observable inputs other than quoted prices) in the Financial Accounting Standards Board's ("FASB") fair value hierarchy. |
Cash | Cash —The majority of the Company's cash was held by one bank at September 30, 2016 . As a result of this concentration, the Company's cash balances frequently exceed federally insured limits. The Company does not believe it is subject to any other unusual risks as a result of this concentration other than those normally associated with commercial banking relationships. |
Accounts Receivable | Accounts Receivable —Provision is made for estimated bad debts based on a periodic analysis of individual customer balances, including an evaluation of days sales outstanding, payment history, recent payment trends and perceived creditworthiness. |
Inventories | Inventories —Branded inventories included freight-in, materials, labor and overhead costs and were stated at the lower of cost or market, cost being determined by a moving weighted average. Neighborhood natural food markets and health food stores inventories were accounted for using the retail method. Valuation adjustments are made for slow-moving, obsolete and/or damaged inventory based on a periodic analysis of individual inventory items, including an evaluation of historical usage and/or movement, age, expiration date and general condition. |
Property, Plant and Equipment | Property, Plant and Equipment —Property, plant and equipment were stated at cost, less accumulated depreciation and amortization. Depreciation and amortization were provided using the straight-line method over the estimated useful lives of the respective assets. Expenditures for renewals and betterments were capitalized, while maintenance and repairs were charged to operations in the periods incurred. Upon sale or disposal of an asset, the historical cost and related accumulated depreciation or amortization of such asset were removed from their respective accounts and any gain or loss was recorded in the Consolidated Statements of Comprehensive Income. The Company evaluates the recoverability of property, plant and equipment whenever events or circumstances indicate that the carrying amount of an asset group may not be recoverable. The Company measures recoverability of an asset group by comparison of its carrying amount to the future undiscounted cash flows the asset group is expected to generate. If an asset group is considered to be impaired, the difference between the carrying amount and the fair value of the impaired asset group is recognized as an impairment charge. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets —The excess of purchase price over fair value of assets acquired in business combinations was classified as goodwill. Intangible assets with finite useful lives are amortized and are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is tested annually for impairment and when events or changes in circumstances indicate the carrying value may not be recoverable. The Company performs its annual impairment testing as of September 30 each year, which is the last day of the Company's fiscal year. A two-step process is used to test for goodwill impairment. The first step is to determine if there is an indication of impairment by comparing the estimated fair value of each reporting unit to its carrying value, including existing goodwill. Reporting unit fair values are estimated using market data as well as other factors. Goodwill is considered impaired if the carrying value of a reporting unit exceeds the estimated fair value. Upon an indication of impairment, a second step is performed to measure the amount of the impairment by comparing the implied fair value of the reporting unit's goodwill with its carrying value. Amortizable intangible assets are reviewed for recoverability by comparing an asset group's carrying amount to the future undiscounted cash flows the asset group is expected to generate. If an asset group is considered to be impaired, the difference between the carrying amount and the fair value of the impaired asset group is recorded as an impairment charge. |
Deferred Financing Fees | Deferred Financing Fees —The Company deferred certain debt issuance costs, including bank, legal and other fees, related to the establishment and subsequent amendment of its credit agreement (Note 9). These costs are being amortized using the straight-line method. |
Foreign Currency Translation | Foreign Currency Translation —The functional currency of each of the Company's foreign subsidiaries and branches is the local currency. All assets and liabilities of foreign subsidiaries and branches were translated into U.S. Dollars at fiscal year-end exchange rates. Income and expense items were translated at exchange rates prevailing during the year. The resulting translation adjustments, net of income taxes, were recorded in accumulated other comprehensive income, which is a component of stockholders' equity. |
Revenue Recognition | Revenue Recognition —Revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the product has been shipped and the customer takes ownership and assumes the risk of loss; (3) the selling price is fixed or determinable; and (4) collection of the resulting receivable is reasonably assured. The Company believes that these criteria are satisfied upon shipment from its facilities or, in the case of the Company's neighborhood natural food markets and health food stores, at the point of sale within these stores. Revenue is reduced by provisions for estimated customer returns and allowances, which are based on historical averages that have not varied significantly for the periods presented, as well as specific known claims, if any. |
Shipping and Handling Costs | Shipping and Handling Costs —The Company incurred shipping and handling costs related to third party freight charges, as well as internal warehousing and order fulfillment costs. |
Research and Development | Research and Development —The Company expensed research and development costs as incurred. |
Advertising | Advertising —The Company expensed advertising costs as incurred. These costs were included in selling, general and administrative expenses. |
Income Taxes | Income Taxes —The Company accounted for income taxes using the asset and liability method which required the Company to record deferred tax assets and liabilities for the differences between the financial statement and tax bases of assets and liabilities using the expected applicable future tax rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be ultimately realized. The Company evaluated its uncertain tax positions taken or expected to be taken in a tax return including the related financial statement recognition, measurement, reporting and disclosure (Note 11). |
Concentrations of Credit Risk | Concentrations of Credit Risk —In the normal course of business, the Company provided credit terms to its customers; however, collateral was not required. Accordingly, the Company performed credit evaluations of its customers and maintained allowances for possible losses which, when realized, were within the range of management's expectations. From time to time, a higher concentration of credit risk existed on outstanding accounts receivable for a select number of customers due to individual buying patterns. |
New Accounting Standards | New Accounting Standards —In February 2016, the FASB issued authoritative guidance, which is included in Accounting Standards Codification ("ASC") 842, " Leases ." This guidance requires lessees to recognize most leases on the balance sheet by recording a right-of-use asset and a lease liability. This guidance is effective for the Company as of October 1, 2019. The Company is currently evaluating the impact this standard will have on its consolidated financial statements. In November 2015, the FASB issued authoritative guidance, which is included in ASC 740, " Income Taxes ." This guidance simplifies the presentation of deferred income taxes and requires that deferred tax assets and liabilities be classified as noncurrent in the classified statement of financial position. This guidance is effective for the Company as of October 1, 2017 and is not expected to have a material impact on the consolidated financial statements as the guidance only changes the classification of deferred income taxes. In September 2015 the FASB issued authoritative guidance, which is included in ASC 805, " Business Combinations. " This guidance simplifies the accounting for measurement-period adjustments and is effective for the Company as of October 1, 2016. This guidance is not expected to have a material impact on the consolidated financial statements. In July 2015, the FASB issued authoritative guidance, which is included in ASC 330, " Inventory. " This guidance simplifies the accounting for measuring inventory at the lower of cost and net realizable value and is effective for the Company as of October 1, 2017. This guidance is not expected to have a material impact on the consolidated financial statements. In May 2014, the FASB issued authoritative guidance, which is included in ASC 606, " Revenue from Contracts with Customers ." This guidance provides a single, comprehensive revenue recognition model for all contracts with customers and requires that a company recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In July 2015, the FASB delayed the effective date of this guidance by one year. As a result, this guidance is effective for the Company as of October 1, 2018 and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact this standard may have on its consolidated financial statements. The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its consolidated financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of final allocation of the aggregate purchase price for the acquisitions to the aggregate assets acquired | The following reflects the final allocation of the aggregate purchase prices for the fiscal 2016 , 2015 and 2014 acquisitions to the aggregate assets acquired: Fiscal 2016 Fiscal 2016 Fiscal 2015 Fiscal 2014 Aggregate assets acquired: Current assets $ 3,821 $ 755 $ 111 $ 2,773 Property, plant and equipment 644 6,004 — — Goodwill 6,541 — 762 7,801 Intangible assets 8,020 450 393 5,803 $ 19,026 $ 7,209 $ 1,266 $ 16,377 |
Pro Forma Information | For the Year Ended Net sales $ 233,440 Net income $ 15,117 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Schedule of accounts receivable, net of allowances for sales returns and doubtful accounts | Accounts receivable, net of allowances for sales returns and doubtful accounts, consisted of the following: September 30, 2016 2015 Accounts receivable $ 18,732 $ 17,882 Less allowances (1,052 ) (1,084 ) $ 17,680 $ 16,798 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories were comprised of the following: September 30, 2016 2015 Raw materials $ 25,792 $ 23,106 Work-in-process 11,711 9,755 Finished goods 26,420 26,579 $ 63,923 $ 59,440 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment, net of accumulated depreciation and amortization | Property, plant and equipment, net of accumulated depreciation and amortization, were comprised of the following: Estimated Useful Life in Years September 30, 2016 2015 Land - $ 10,080 $ 8,987 Buildings 30 81,004 74,214 Leasehold improvements 1 - 5 3,507 3,326 Furniture, fixtures and equipment 2 - 7 69,134 64,831 163,725 151,358 Less accumulated depreciation and amortization (80,677 ) (73,713 ) $ 83,048 $ 77,645 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill | The changes in the carrying amount of goodwill for the years ended September 30, 2015 and 2016 were as follows: Goodwill Accumulated Impairment Net Balance as of October 1, 2014 $ 64,016 $ (40,394 ) $ 23,622 Goodwill attributable to fiscal 2015 acquisitions 762 — 762 Balance as of September 30, 2015 64,778 (40,394 ) 24,384 Goodwill attributable to fiscal 2016 acquisitions 6,541 — 6,541 Balance as of September 30, 2016 $ 71,319 $ (40,394 ) $ 30,925 |
Schedule of carrying amounts of intangible assets | The carrying amounts of intangible assets at September 30, 2016 and 2015 were as follows: September 30, 2016 September 30, 2015 Weighted- Gross Carrying Amount(1) Accumulated Amortization(1) Net Carrying Amount Gross Carrying Amount(1) Accumulated Amortization(1) Net Carrying Amount Intangible assets subject to amortization: Trademarks/trade names/licenses $ 13,904 $ (3,137 ) $ 10,767 $ 12,470 $ (1,966 ) $ 10,504 11 Customer relationships/non-compete agreements 23,867 (12,357 ) 11,510 16,836 (9,773 ) 7,063 7 Developed software and technology 772 (772 ) — 772 (772 ) — 5 38,543 (16,266 ) 22,277 30,078 (12,511 ) 17,567 Intangible assets not subject to amortization: Licenses — — — 38 — 38 $ 38,543 $ (16,266 ) $ 22,277 $ 30,116 $ (12,511 ) $ 17,605 ______________________________ (1) Amounts include the impact of foreign currency translation adjustments. |
Schedule of estimated amortization expense related to intangible assets subject to amortization | Estimated amortization expense related to intangible assets subject to amortization is as follows: Year Ending September 30, Estimated Amortization Expense 2017 $ 3,598 2018 3,406 2019 2,979 2020 2,890 2021 2,472 Thereafter 6,932 $ 22,277 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of accrued expenses | Accrued expenses were comprised of the following: September 30, 2016 2015 Employee payroll, taxes, benefits and performance incentives $ 6,298 $ 5,270 Other accrued expenses 1,171 1,235 $ 7,469 $ 6,505 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Debt was comprised of the following: September 30, 2016 2015 Long-term debt—revolving credit facility $ 43,500 $ 31,500 |
Lease Commitments and Obligat32
Lease Commitments and Obligations (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Leases [Abstract] | |
Summary of future minimum lease payments under significant non-cancelable operating leases | The following summarizes future minimum lease payments required under the Company's significant non-cancelable operating leases: Year Ending September 30, Minimum Lease Payments 2017 $ 3,864 2018 1,455 2019 779 2020 318 2021 135 Thereafter 10 $ 6,561 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of provision for income taxes | The provision for income taxes was comprised of the following: Years Ended September 30, 2016 2015 2014 Current: Federal $ 7,790 $ 6,516 $ 7,797 State 843 973 1,084 Foreign 88 210 213 Total current 8,721 7,699 9,094 Deferred: Federal 446 220 69 State 100 48 24 Total deferred 546 268 93 $ 9,267 $ 7,967 $ 9,187 |
Schedule of differences between income taxes at the statutory federal income tax rate and income taxes reported in the Consolidated Statements of Comprehensive Income | The differences between income taxes at the statutory federal income tax rate and income taxes reported in the Consolidated Statements of Comprehensive Income were as follows: Years Ended September 30, 2016 2015 2014 Federal tax at statutory rate $ 9,774 $ 8,133 $ 8,777 State taxes, net of federal benefit 613 664 721 Non-deductible expenses 269 192 195 Manufacturing benefit (847 ) (613 ) (586 ) Credit for increasing research activities (439 ) (103 ) (30 ) Change in valuation allowance — (334 ) 163 Other (103 ) 28 (53 ) $ 9,267 $ 7,967 $ 9,187 |
Summary of composition of deferred income tax assets and liabilities | A summary of the composition of deferred income tax assets and liabilities was as follows: September 30, 2016 2015 Current Deferred Income Tax Assets and Liabilities Accounts receivable reserves $ 409 $ 370 Inventory valuation adjustments 874 816 Accrued liabilities (40 ) (19 ) $ 1,243 $ 1,167 Non-Current Deferred Income Tax Assets Goodwill and other intangible assets $ 2,264 $ 3,376 Property, plant and equipment 1,725 1,372 Foreign net operating loss carryforwards 2,103 1,881 Foreign tax credit carryforwards 321 184 6,413 6,813 Less valuation allowance (2,103 ) (1,881 ) $ 4,310 $ 4,932 |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Schedule of stock option activity | The following table sets forth option activity under the 1998 Stock Incentive Plan and the 1998 Non-Employee Director Stock Option Plan for the years ended September 30, 2014 and 2015 . Number of Options Average Price Per Share Aggregate Option Price Outstanding at October 1, 2013 42,500 $ 13.59 $ 577 Exercised (10,000 ) 11.53 (115 ) Outstanding at September 30, 2014 32,500 14.22 462 Exercised (32,500 ) 14.22 (462 ) Outstanding at September 30, 2015 — $ — |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of net sales attributed to customers in the United States and foreign countries | Net sales attributed to customers in the United States and foreign countries for the years ended September 30, 2016 , 2015 and 2014 were as follows: Year Ended September 30, 2016 2015 2014 United States $ 202,931 $ 189,505 $ 185,729 Foreign countries 30,057 26,974 28,745 $ 232,988 $ 216,479 $ 214,474 |
Schedule of net sales by product group | The Company's net sales by product group for the years ended September 30, 2016 , 2015 and 2014 were as follows: Year Ended September 30, 2016 2015 2014 Branded nutritional supplements and other natural products $ 211,145 $ 192,832 $ 190,105 Other(1) 21,843 23,647 24,369 $ 232,988 $ 216,479 $ 214,474 __________________________________ (1) Net sales for any other product or group of similar products are less than 10% of consolidated net sales. |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016USD ($)bank | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Cash | |||
Concentration risk, number of banks at which majority of cash were held | bank | 1 | ||
Shipping and Handling Costs | |||
Shipping and handling costs related to third-party freight charges, internal warehousing and order fulfillment | $ 15,567 | $ 14,863 | $ 15,073 |
Research and Development | |||
Research and development expenditures primarily related to product development | $ 3,715 | $ 3,624 | $ 3,806 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | 12 Months Ended | |||
Sep. 30, 2016USD ($)acquisition | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($)acquisition | Sep. 30, 2014USD ($)acquisition | |
ACQUISITIONS | ||||
Number of business acquisitions | acquisition | 2 | 2 | 7 | |
Aggregate purchase price in cash | $ 26,235 | $ 1,266 | $ 16,377 | |
Aggregate assets acquired: | ||||
Goodwill | $ 30,925 | $ 30,925 | 24,384 | 23,622 |
Amortization period | 15 years | |||
Net sales | $ 232,988 | 216,479 | 214,474 | |
Gross profit | 118,049 | 106,224 | 106,305 | |
Net sales | 233,440 | |||
Net income | 15,117 | |||
Dynamic Health | ||||
Aggregate assets acquired: | ||||
Current assets | 3,821 | 3,821 | ||
Property, plant and equipment | 644 | 644 | ||
Goodwill | 6,541 | 6,541 | ||
Intangible assets | 8,020 | 8,020 | ||
Aggregate purchase price | 19,026 | 19,026 | ||
Net sales | 17,393 | |||
Gross profit | 6,802 | |||
Aubrey Organics | ||||
Aggregate assets acquired: | ||||
Current assets | 755 | 755 | ||
Property, plant and equipment | 6,004 | 6,004 | ||
Goodwill | 0 | 0 | ||
Intangible assets | 450 | 450 | ||
Aggregate purchase price | $ 7,209 | 7,209 | ||
Acquisitions | ||||
Aggregate assets acquired: | ||||
Current assets | 111 | 2,773 | ||
Property, plant and equipment | 0 | 0 | ||
Goodwill | 762 | 7,801 | ||
Intangible assets | 393 | 5,803 | ||
Aggregate purchase price | 1,266 | 16,377 | ||
Goodwill | ||||
Aggregate assets acquired: | ||||
Amortization period | 15 years | |||
Trademarks, Tradenames, and Customer Relationships | Acquisitions | ||||
Aggregate assets acquired: | ||||
Intangible assets | $ 8,470 | $ 8,470 | $ 393 | $ 5,803 |
Trademarks, Tradenames, and Customer Relationships | Acquisitions | Minimum | ||||
Aggregate assets acquired: | ||||
Amortization period | 2 years | |||
Trademarks, Tradenames, and Customer Relationships | Acquisitions | Maximum | ||||
Aggregate assets acquired: | ||||
Amortization period | 15 years |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Receivables [Abstract] | ||
Accounts receivable | $ 18,732 | $ 17,882 |
Less allowances | (1,052) | (1,084) |
Accounts receivable, net | $ 17,680 | $ 16,798 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 25,792 | $ 23,106 |
Work-in-process | 11,711 | 9,755 |
Finished goods | 26,420 | 26,579 |
Inventories | $ 63,923 | $ 59,440 |
Property, Plant and Equipment40
Property, Plant and Equipment (Details) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016USD ($)equipment | Sep. 30, 2015USD ($)equipment | Sep. 30, 2014USD ($) | |
Property, plant and equipment, net | |||
Property, plant and equipment, gross | $ 163,725 | $ 151,358 | |
Less accumulated depreciation and amortization | (80,677) | (73,713) | |
Property, plant and equipment, net | $ 83,048 | $ 77,645 | |
Number of equipment under capital leases | equipment | 0 | 0 | |
Depreciation and amortization of property, plant and equipment | $ 10,281 | $ 9,896 | $ 8,801 |
Land | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | $ 10,080 | 8,987 | |
Buildings | |||
Property, plant and equipment, net | |||
Estimated Useful Life | 30 years | ||
Property, plant and equipment, gross | $ 81,004 | 74,214 | |
Leasehold improvements | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | $ 3,507 | 3,326 | |
Leasehold improvements | Minimum | |||
Property, plant and equipment, net | |||
Estimated Useful Life | 1 year | ||
Leasehold improvements | Maximum | |||
Property, plant and equipment, net | |||
Estimated Useful Life | 5 years | ||
Furniture, fixtures and equipment | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | $ 69,134 | $ 64,831 | |
Furniture, fixtures and equipment | Minimum | |||
Property, plant and equipment, net | |||
Estimated Useful Life | 2 years | ||
Furniture, fixtures and equipment | Maximum | |||
Property, plant and equipment, net | |||
Estimated Useful Life | 7 years |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
GOODWILL | |||
Goodwill. Gross | $ 64,778 | $ 64,016 | |
Goodwill attributable acquisitions | 6,541 | 762 | |
Goodwill, Gross | 71,319 | 64,778 | $ 64,016 |
Accumulated Impairment | (40,394) | (40,394) | (40,394) |
Goodwill, net | 30,925 | 24,384 | 23,622 |
Intangible assets subject to amortization: | |||
Gross Carrying Amount | 38,543 | 30,078 | |
Accumulated Amortization | (16,266) | (12,511) | |
Net Carrying Amount | 22,277 | 17,567 | |
Total intangible assets | |||
Gross Carrying Amount | 38,543 | 30,116 | |
Net Carrying Amount | 22,277 | 17,605 | |
Impairment of intangible assets | 0 | 1,810 | 267 |
Aggregate amortization expense related to intangible assets | 3,927 | 2,869 | $ 2,667 |
Estimated future amortization expense related to intangible assets | |||
2,017 | 3,598 | ||
2,018 | 3,406 | ||
2,019 | 2,979 | ||
2,020 | 2,890 | ||
2,021 | 2,472 | ||
Thereafter | 6,932 | ||
Net Carrying Amount | 22,277 | 17,567 | |
Licenses | |||
Intangible assets not subject to amortization: | |||
Carrying Amount | 0 | 38 | |
Trademarks/trade names/licenses | |||
Intangible assets subject to amortization: | |||
Gross Carrying Amount | 13,904 | 12,470 | |
Accumulated Amortization | (3,137) | (1,966) | |
Net Carrying Amount | $ 10,767 | 10,504 | |
Weighted-Average Amortization Period | 11 years | ||
Estimated future amortization expense related to intangible assets | |||
Net Carrying Amount | $ 10,767 | 10,504 | |
Customer relationships/non-compete agreements | |||
Intangible assets subject to amortization: | |||
Gross Carrying Amount | 23,867 | 16,836 | |
Accumulated Amortization | (12,357) | (9,773) | |
Net Carrying Amount | $ 11,510 | 7,063 | |
Weighted-Average Amortization Period | 7 years | ||
Estimated future amortization expense related to intangible assets | |||
Net Carrying Amount | $ 11,510 | 7,063 | |
Developed software and technology | |||
Intangible assets subject to amortization: | |||
Gross Carrying Amount | 772 | 772 | |
Accumulated Amortization | (772) | (772) | |
Net Carrying Amount | $ 0 | 0 | |
Weighted-Average Amortization Period | 5 years | ||
Estimated future amortization expense related to intangible assets | |||
Net Carrying Amount | $ 0 | $ 0 | |
Trade Names | |||
Intangible assets subject to amortization: | |||
Weighted-Average Amortization Period | 10 years | 15 years | |
Intangible assets not subject to amortization: | |||
Carrying Amount | $ 8,727 | $ 1,093 | |
Total intangible assets | |||
Impairment of intangible assets | 1,810 | 267 | |
Non-cash intangible asset impairment charge, after tax | $ 1,112 | $ 168 | |
Non-cash intangible asset impairment charge, per diluted share (in dollars per share) | $ 0.12 | $ 0.02 | |
Intangible assets reclassified from indefinite lives to definite lives | $ 6,917 | $ 826 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Accrued Liabilities, Current [Abstract] | ||
Employee payroll, taxes, benefits and performance incentives | $ 6,298 | $ 5,270 |
Other accrued expenses | 1,171 | 1,235 |
Accrued expenses | $ 7,469 | $ 6,505 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Nov. 04, 2014 | |
DEBT | |||
Long-term debt—revolving credit facility | $ 43,500 | $ 31,500 | |
Federal Funds Rate | |||
DEBT | |||
Reference rate | Federal Funds Rate | ||
Eurodollar Rate | |||
DEBT | |||
Interval for payment of accrued interest under option one | 1 month | ||
Interval for payment of accrued interest under option two | 2 months | ||
Interval for payment of accrued interest under option three | 3 months | ||
Prime Lending Rate | |||
DEBT | |||
Reference rate | Prime Lending Rate | ||
Statutory Reserve Rate | |||
DEBT | |||
Reference rate | one-month Eurodollar Rate | ||
Margin over reference rate (as a percent) | 1.00% | ||
Restated Credit Agreement | |||
DEBT | |||
Available credit borrowings | $ 100,000 | ||
Deferred financing cost | 420 | ||
Outstanding revolving credit borrowings | $ 43,500 | ||
Reference rate | Eurodollar Rate | ||
Weighted-average interest rate (as a percent) | 2.24% | ||
Quarterly fee on the unused balance (as a percent) | 0.25% | ||
Restated Credit Agreement | Federal Funds Rate | |||
DEBT | |||
Margin over reference rate (as a percent) | 0.50% | ||
Credit Agreement, accordion feature | |||
DEBT | |||
Available credit borrowings | $ 130,000 |
Lease Commitments and Obligat44
Lease Commitments and Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Minimum Lease Payments | |||
Year ending September 30, 2017 | $ 3,864 | ||
Year ending September 30, 2018 | 1,455 | ||
Year ending September 30, 2019 | 779 | ||
Year ending September 30, 2020 | 318 | ||
Year ending September 30, 2021 | 135 | ||
Thereafter | 10 | ||
Total minimum lease payments | 6,561 | ||
Total rent expense | $ 3,813 | $ 3,141 | $ 2,905 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Current: | |||
Federal | $ 7,790 | $ 6,516 | $ 7,797 |
State | 843 | 973 | 1,084 |
Foreign | 88 | 210 | 213 |
Total current | 8,721 | 7,699 | 9,094 |
Deferred: | |||
Federal | 446 | 220 | 69 |
State | 100 | 48 | 24 |
Total deferred | 546 | 268 | 93 |
Provision for income taxes | 9,267 | 7,967 | 9,187 |
Reconciliation of income taxes | |||
Federal tax at statutory rate | 9,774 | 8,133 | 8,777 |
State taxes, net of federal benefit | 613 | 664 | 721 |
Non-deductible expenses | 269 | 192 | 195 |
Manufacturing benefit | (847) | (613) | (586) |
Credit for increasing research activities | (439) | (103) | (30) |
Change in valuation allowance | 0 | (334) | 163 |
Other | (103) | 28 | (53) |
Provision for income taxes | 9,267 | 7,967 | $ 9,187 |
Current Deferred Income Tax Assets and Liabilities | |||
Accounts receivable reserves | 409 | 370 | |
Inventory valuation adjustments | 874 | 816 | |
Accrued liabilities | (40) | (19) | |
Current Deferred Income Tax Assets and Liabilities | 1,243 | 1,167 | |
Non-Current Deferred Income Tax Assets | |||
Goodwill and other intangible assets | 2,264 | 3,376 | |
Property, plant and equipment | 1,725 | 1,372 | |
Foreign net operating loss carryforwards | 2,103 | 1,881 | |
Foreign tax credit carryforwards | 321 | 184 | |
Non-Current Deferred Income Tax Assets | 6,413 | 6,813 | |
Less valuation allowance | (2,103) | (1,881) | |
Deferred tax assets, net | $ 4,310 | $ 4,932 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 2,103 | $ 1,881 |
Unrecognized tax benefits | 0 | 0 |
Foreign Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 8,988 | 8,038 |
Operating loss carryforwards limitations on use amount | 3,653 | |
Operating loss carryforwards no expiration | 5,335 | |
Valuation allowance | $ 2,103 | 1,881 |
Operating loss carryforwards, valuation allowance | $ 334 |
Capital Stock (Details)
Capital Stock (Details) $ / shares in Units, $ in Thousands | Dec. 11, 2015USD ($) | Dec. 11, 2014USD ($) | Dec. 11, 2013USD ($) | Sep. 30, 2016class$ / sharesshares | Sep. 30, 2015class$ / sharesshares | Sep. 30, 2014shares | Jan. 28, 2013shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of authorized classes of stock | class | 2 | 2 | |||||
Par value of preferred stock (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||
Number of common stock shares issued (in shares) | 0 | ||||||
Fair value of non-cash stock awards granted | $ | $ 556 | $ 504 | $ 775 | ||||
1998 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expiration period | 10 years | ||||||
Shares of common stock reserved for issuance (in shares) | 1,050,000 | ||||||
Number of common stock shares issued (in shares) | 0 | ||||||
Number of outstanding stock options (in shares) | 0 | ||||||
Number of exercisable stock options (in shares) | 0 | ||||||
1998 Stock Incentive Plan | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 2 years | ||||||
1998 Stock Incentive Plan | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
1998 Non-Employee Director Stock Option Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
Expiration period | 10 years | ||||||
Shares of common stock reserved for issuance (in shares) | 150,000 | ||||||
Number of common stock shares issued (in shares) | 0 | ||||||
Number of outstanding stock options (in shares) | 0 | ||||||
Number of exercisable stock options (in shares) | 0 | ||||||
2013 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares of common stock reserved for issuance (in shares) | 800,000 | ||||||
Number of common stock shares issued (in shares) | 22,664 | 24,827 | 31,788 | ||||
Number of outstanding stock options (in shares) | 0 | ||||||
Number of exercisable stock options (in shares) | 0 | ||||||
Fair value of non-cash stock awards granted | $ | $ 556 | $ 504 | $ 775 | ||||
Shares of common stock available for issuance (in shares) | 720,721 |
Capital Stock (Schedule for Sto
Capital Stock (Schedule for Stock Option Activity) (Details) - 1998 Stock Incentive Plan and the 1998 Non-Employee Director Stock Option Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Number of Options | |||
Outstanding at the beginning of the period (in shares) | 32,500 | 42,500 | |
Exercised (in shares) | (32,500) | (10,000) | |
Outstanding at the end of the period (in shares) | 0 | 32,500 | |
Weighted-Average Exercise Price | |||
Average exercise price (in dollars per share) | $ 14.22 | $ 13.59 | |
Exercised (in dollars per share) | $ 14.22 | $ 11.53 | |
Aggregate Option Price | |||
Aggregate option price | $ 0 | $ 462 | $ 577 |
Exercised | $ (462) | $ (115) |
Capital Stock (Details 2)
Capital Stock (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Equity [Abstract] | ||
Proceeds from exercise of stock options | $ 462 | $ 115 |
Tax benefit from stock option exercises | 84 | 51 |
Pre-tax gain from exercise of stock options | $ 219 | $ 133 |
Capital Stock (Details 3)
Capital Stock (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | Jul. 26, 2016 | |
Share purchases | ||||
Aggregate price at which shares of common stock purchased (in dollars) | $ 7,501 | $ 5,319 | $ 5,067 | |
Additional number of shares authorized to be repurchased (in shares) | 1,171,170 | |||
Common Stock | ||||
Share purchases | ||||
Shares of common stock authorized to be repurchased (in shares) | 1,000,000 | |||
Shares of common stock purchased (in shares) | 310,091 | 250,763 | 210,841 | |
Aggregate price at which shares of common stock purchased (in dollars) | $ 7,501 | $ 5,319 | $ 5,067 | |
Number of shares of common stock held in treasury (in shares) | 2,000 | 1,000 | ||
Common Stock | Maximum | ||||
Share purchases | ||||
Shares of common stock authorized to be repurchased (in shares) | 4,500,000 | |||
Common Stock | Direct Stock Purchase Plan | ||||
Share purchases | ||||
Shares registered (in shares) | 1,500,000 | |||
Shares purchased (in shares) | 3,343 | 4,291 | ||
Shares of common stock available for purchase (in shares) | 1,374,101 |
Segments (Details)
Segments (Details) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Segment Reporting [Abstract] | |||
Number of operating segments | segment | 1 | ||
SEGMENTS | |||
Net sales | $ 232,988 | $ 216,479 | $ 214,474 |
Branded nutritional supplements and other natural products | |||
SEGMENTS | |||
Net sales | 211,145 | 192,832 | 190,105 |
Other | |||
SEGMENTS | |||
Net sales | 21,843 | 23,647 | 24,369 |
United States | |||
SEGMENTS | |||
Net sales | 202,931 | 189,505 | 185,729 |
Foreign countries | |||
SEGMENTS | |||
Net sales | $ 30,057 | 26,974 | 28,745 |
Reclassification Of Sales | Other | |||
SEGMENTS | |||
Net sales | $ 3,065 | $ 3,732 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |||
Maximum contribution by employee (as a percent) | 75.00% | ||
Maximum matching contribution by employer (as a percent) | 4.00% | ||
Employer's contribution | $ 1,014 | $ 936 | $ 890 |
Supplemental Disclosure of Ca53
Supplemental Disclosure of Cash Flow Items (Details) - USD ($) $ in Thousands | Dec. 11, 2015 | Dec. 11, 2014 | Dec. 11, 2013 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 |
Supplemental Cash Flow Information [Abstract] | ||||||
Cash paid for interest | $ 1,029 | $ 966 | $ 1,163 | |||
Cash paid for taxes | $ 9,764 | $ 7,172 | $ 8,966 | |||
Non-cash stock awards issued (in shares) | 22,664 | 24,827 | 31,788 | |||
Fair value of non-cash stock awards granted | $ 556 | $ 504 | $ 775 |
SCHEDULE II-VALUATION AND QUA54
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Allowance for sales returns | |||
VALUATION AND QUALIFYING ACCOUNTS | |||
Balance at Beginning of Period | $ 751 | $ 763 | $ 788 |
Charged to Costs and Expenses | 4,475 | 4,033 | 4,151 |
Deductions | 4,458 | 4,045 | 4,176 |
Balance at End of Period | 768 | 751 | 763 |
Allowance for doubtful accounts | |||
VALUATION AND QUALIFYING ACCOUNTS | |||
Balance at Beginning of Period | 333 | 471 | 864 |
Charged to Costs and Expenses | 60 | 45 | (250) |
Deductions | 109 | 183 | 143 |
Balance at End of Period | 284 | 333 | 471 |
Allowance for deferred tax assets | |||
VALUATION AND QUALIFYING ACCOUNTS | |||
Balance at Beginning of Period | 1,881 | 1,981 | 1,653 |
Charged to Costs and Expenses | 222 | (100) | 328 |
Balance at End of Period | $ 2,103 | $ 1,881 | $ 1,981 |