Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2015 | Feb. 02, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | LIQUIDITY SERVICES INC | |
Entity Central Index Key | 1,235,468 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 30,606,566 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Sep. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 85,452 | $ 95,465 |
Accounts receivable, net of allowance for doubtful accounts of $549 and $471 at December 31, 2015 and September 30, 2015, respectively | 6,039 | 6,194 |
Inventory | 27,454 | 25,510 |
Tax refund receivable | 33,491 | 33,491 |
Prepaid and deferred taxes | 20,124 | 19,903 |
Prepaid expenses and other current assets | 7,044 | 7,826 |
Total current assets | 179,604 | 188,389 |
Property and equipment, net | 13,485 | 13,356 |
Intangible assets, net | 3,704 | 4,051 |
Goodwill | 63,529 | 64,073 |
Deferred long-term tax assets | 8,025 | 5,871 |
Other assets | 14,499 | 12,748 |
Total assets | 282,846 | 288,488 |
Current liabilities: | ||
Accounts payable | 10,094 | 9,500 |
Accrued expenses and other current liabilities | 25,267 | 27,350 |
Profit-sharing distributions payable | 1,343 | 2,512 |
Customer payables | 30,385 | 29,802 |
Total current liabilities | 67,089 | 69,164 |
Other long-term liabilities | 3,334 | 3,322 |
Total liabilities | 70,423 | 72,486 |
Stockholders' equity: | ||
Common stock, $0.001 par value; 120,000,000 shares authorized; 30,552,286 shares issued and outstanding at December 31, 2015; 30,026,223 shares issued and outstanding at September 30, 2015 | 29 | 29 |
Additional paid-in capital | 213,087 | 210,712 |
Accumulated other comprehensive loss | (6,383) | (5,626) |
Retained earnings | 5,690 | 10,887 |
Total stockholders' equity | 212,423 | 216,002 |
Total liabilities and stockholders' equity | $ 282,846 | $ 288,488 |
Unaudited Consolidated Balance3
Unaudited Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Sep. 30, 2015 |
Unaudited Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 549 | $ 471 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 30,552,286 | 30,026,223 |
Common stock, shares outstanding | 30,552,286 | 30,026,223 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Unaudited Consolidated Statements of Operations | ||
Revenue | $ 50,138 | $ 98,163 |
Fee revenue | 15,737 | 26,980 |
Total revenue | 65,875 | 125,143 |
Costs and expenses | ||
Cost of goods sold (excluding amortization) | 26,883 | 54,315 |
Profit-sharing distributions | 2,357 | 9,592 |
Technology and operations | 22,807 | 26,878 |
Sales and marketing | 9,460 | 10,385 |
General and administrative | 10,068 | 9,528 |
Amortization of contract intangibles | 1,211 | |
Depreciation and amortization | 1,672 | 1,992 |
Acquisition costs and related fair value adjustments and impairment of goodwill and long-lived assets | 39 | 96,238 |
Total costs and expenses | 73,286 | 210,139 |
Loss from operations | (7,411) | (84,996) |
Interest (income) expense and other expense, net | (60) | 38 |
Loss before benefit from income taxes | (7,351) | (85,034) |
Benefit from income taxes | (2,154) | (20,918) |
Net loss | $ (5,197) | $ (64,116) |
Basic loss per common share (in dollars per share) | $ (0.17) | $ (2.14) |
Diluted loss per common share (in dollars per share) | $ (0.17) | $ (2.14) |
Basic weighted average shares outstanding (in shares) | 30,490,670 | 29,926,273 |
Diluted weighted average shares outstanding (in shares) | 30,490,670 | 29,926,273 |
Unaudited Consolidated Stateme5
Unaudited Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Unaudited Consolidated Statements of Comprehensive Income | ||
Net loss | $ (5,197) | $ (64,116) |
Other comprehensive loss: | ||
Foreign currency translation | (757) | (1,956) |
Other comprehensive loss, net of taxes | (757) | (1,956) |
Comprehensive loss | $ (5,954) | $ (66,072) |
Unaudited Consolidated Stateme6
Unaudited Consolidated Statements of Changes in Stockholders' Equity - 3 months ended Dec. 31, 2015 - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total |
Balance at Sep. 30, 2015 | $ 29 | $ 210,712 | $ (5,626) | $ 10,887 | $ 216,002 |
Balance (in shares) at Sep. 30, 2015 | 30,026,223 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Exercise of common stock options and vesting of restricted stock (in shares) | 526,063 | ||||
Compensation expense and incremental tax benefit from grant of common stock options and restricted stock | 2,375 | 2,375 | |||
Net loss | (5,197) | (5,197) | |||
Foreign currency translation | (757) | (757) | |||
Balance at Dec. 31, 2015 | $ 29 | $ 213,087 | $ (6,383) | $ 5,690 | $ 212,423 |
Balance (in shares) at Dec. 31, 2015 | 30,552,286 |
Unaudited Consolidated Stateme7
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities | ||
Net loss | $ (5,197) | $ (64,116) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,672 | 3,203 |
Stock compensation expense | 2,420 | 2,602 |
Provision (benefit) for inventory allowance | 1,208 | (48) |
Provision for doubtful accounts | 78 | 121 |
Deferred tax benefit | (22,145) | |
Impairment of goodwill and long-lived assets | 96,238 | |
Incremental tax benefit from exercise of common stock options | 48 | (163) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 77 | 1,347 |
Inventory | (3,152) | 8,138 |
Prepaid and deferred taxes | (2,424) | 290 |
Prepaid expenses and other assets | (969) | 658 |
Accounts payable | 594 | (859) |
Accrued expenses and other | (2,070) | (7,534) |
Profit-sharing distributions payable | (1,169) | (392) |
Customer payables | 583 | (3,815) |
Other liabilities | 3 | (461) |
Net cash (used in) provided by operating activities | (8,298) | 13,064 |
Investing activities | ||
Increase in intangibles | (29) | (3) |
Purchases of property and equipment | (1,428) | (1,612) |
Net cash used in investing activities | (1,457) | (1,615) |
Financing activities | ||
Proceeds from exercise of common stock options (net of tax) | 71 | |
Incremental tax benefit from exercise of common stock options | (48) | 163 |
Net cash (used in) provided by financing activities | (48) | 234 |
Effect of exchange rate differences on cash and cash equivalents | (210) | (59) |
Net (decrease) increase in cash and cash equivalents | (10,013) | 11,624 |
Cash and cash equivalents at beginning of period | 95,465 | 62,598 |
Cash and cash equivalents at end of period | 85,452 | 74,222 |
Supplemental disclosure of cash flow information | ||
Cash paid for income taxes | $ 237 | $ 589 |
Organization
Organization | 3 Months Ended |
Dec. 31, 2015 | |
Organization | |
Organization | 1. Organization Liquidity Services, Inc. and subsidiaries (LS or the Company) operates leading auction marketplaces for surplus and salvage assets. LS enables buyers and sellers to transact in an efficient, automated online auction environment offering over 500 product categories. The Company’s marketplaces provide professional buyers access to a global, organized supply of surplus and salvage assets presented with digital images and other relevant product information. Additionally, LS enables its corporate and government sellers to enhance their financial return on excess assets by providing a liquid marketplace and value-added services that integrate sales and marketing, logistics and transaction settlement into a single offering. LS organizes its products into categories across major industry verticals such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, energy equipment, industrial capital assets, fleet and transportation equipment and specialty equipment. The Company’s marketplaces are www.liquidation.com , www.govliquidation.com, www.govdeals.com, www.networkintl.com, www.truckcenter.com, www.secondipity.com, and www.go-dove.com . LS has one reportable segment consisting of operating auction marketplaces for sellers and buyers of surplus, salvage and scrap assets. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Unaudited Interim Financial Information The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation have been included. The information disclosed in the notes to the consolidated financial statements for these periods is unaudited. Operating results for the three months ended December 31, 2015 are not necessarily indicative of the results that may be expected for the year ending September 30, 2016 or any future period. Fee revenue is revenue earned under the consignment model, as well as other fee revenue, and is presented separately as it accounts for more than 10% of total revenue. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard that will change the way the Company recognizes revenue and significantly expand the disclosure requirements for revenue arrangements. In July 2015, the FASB delayed the effective date of the new standard such that the new standard will be effective for the Company beginning on October 1, 2018, and may be adopted either retrospectively or on a modified retrospective basis whereby the new standard would be applied to new and existing arrangements with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to retained earnings at the effective date for existing arrangements with remaining performance obligations. The Company is currently evaluating the methods of adoption allowed by the new standard and the effect that adoption of the standard is expected to have on the consolidated financial statements and related disclosures. As a result, the Company’s evaluation of the effect of the new standard will likely extend over several future periods. Business Combinations The Company recognizes all of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair value on the acquisition date. Acquisition-related costs are recognized separately from the acquisition and expensed as incurred. Restructuring costs incurred in periods subsequent to the acquisition date are expensed when incurred. Subsequent changes to the purchase price (i.e., working capital adjustments) or other fair value adjustments determined during the measurement period are recorded as an adjustment to goodwill, with the exception of contingent consideration, which is recognized in the statement of operations in the period it is modified. All subsequent changes to a valuation allowance or uncertain tax position that relate to the acquired company and existed at the acquisition date that occur both within the measurement period and as a result of facts and circumstances that existed at the acquisition date are recognized as an adjustment to goodwill. All other changes in valuation allowances are recognized as a reduction or increase to income tax expense. Accounts Receivable Accounts receivable are recorded at the invoiced amount and are non-interest bearing. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables. Allowances are based on management’s judgment, which considers historical experience and specific knowledge of accounts where collectability may not be probable. The Company makes provisions based on historical bad debt experience, a specific review of all significant outstanding invoices and an assessment of general economic conditions. Inventory Inventory consists of property obtained for resale, generally through the online auction process, and is stated at the lower of cost or market. Cost is determined using the specific identification method. Charges for unsellable inventory are included in cost of goods sold in the period in which they have been determined to occur. As of the three months ended September 30, 2015 and December 31, 2015, the Company’s inventory reserve was approximately $0.8 million and $2.0 million, respectively. Earnings per Share Basic net income attributable to common stockholders per share is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income attributable to common stockholders per share includes the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The Company had 2,286,685 unvested restricted shares outstanding at December 31, 2015, which were issued at prices ranging from $6.63 to $52.55, of which 2,286,685 and 1,672,394 shares have been excluded from the calculation of income per share for the three months ended December 31, 2015 and 2014, respectively, due to the net losses incurred for the three months ended December 31, 2015 and December 31, 2014. The Company has also excluded the following stock options from its calculation of diluted income per share because the option exercise prices were greater than the average market prices for the applicable period: (a) for the three months ended December 31, 2015, 1,427,944 options; and (b) for the three months ended December 31, 2014, 1,424,035 options. The following summarizes the potential outstanding common stock of the Company as of the dates set forth below: Three Months Ended December 31, 2015 2014 (unaudited) (dollars in thousands except per share amounts) Weighted average shares calculation: Basic weighted average shares outstanding Treasury stock effect of options and restricted stock — — Diluted weighted average common shares outstanding Net loss $ ) $ ) Basic loss per common share $ ) $ ) Diluted loss per common share $ ) $ ) Stock-Based Compensation The Company estimates the fair value of share-based awards on the date of grant. The fair value of stock options and stock appreciation rights is determined using the Black-Scholes option-pricing model. The fair value of restricted stock awards is based on the closing price of the Company’s common stock on the date of grant. The determination of the fair value of the Company’s stock option awards and stock appreciation rights is based on a variety of factors including, but not limited to, the Company’s common stock price, expected stock price volatility over the expected life of awards, and actual and projected exercise behavior. Additionally, the Company has estimated forfeitures for share-based awards at the dates of grant based on historical experience, adjusted for future expectation. The forfeiture estimate is revised as necessary if actual forfeitures differ from these estimates. The Company issues restricted stock awards where restrictions lapse upon either the passage of time (service vesting), achieving performance targets, or some combination of these restrictions. For those restricted stock awards with only service conditions, the Company recognizes compensation cost on a straight-line basis over the explicit service period. For awards with both performance and service conditions, the Company starts recognizing compensation cost over the remaining service period, when it is probable the performance condition will be met. For stock awards that contain performance vesting conditions, the Company excludes these awards from diluted earnings per share computations until the contingency is met as of the end of that reporting period. For awards to non-employees (who are not directors), the Company records compensation cost when the performance condition is met. The Company presents the cash flows resulting from the tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) as a financing activity with a corresponding operating cash outflow in the Consolidated Statements of Cash Flows. |
Defense Logistics Agency (DLA)
Defense Logistics Agency (DLA) Disposition Services Contracts | 3 Months Ended |
Dec. 31, 2015 | |
Significant Contracts | |
Defense Logistics Agency (DLA) Disposition Services Contracts | 3. Defense Logistics Agency (DLA) Disposition Services Contracts The Company has a Surplus Contract with the DLA Disposition Services. The base term of the initial contract has been extended through November 2015. On November 13, 2015, the DLA Disposition Services notified the Company that they were amending the current (second) Surplus Contract to extend the wind-down period by an additional ten months to allow for the continued processing of usable non-rolling stock surplus property. All other terms, including pricing, remain consistent with the second Surplus Contract. Under the second Surplus Contract, the Company is required to purchase all usable surplus property offered to the Company by the Department of Defense at a fixed percentage equal to 1.8% of the DoD’s original acquisition value (OAV). The Company retains 100% of the profits from the resale of the property and bears all of the costs for the merchandising and sale of the property. Included in Accrued expenses and other current liabilities in the Consolidated Balance Sheet is a liability to the DoD of approximately $5,529,000 and $2,026,000 for inventory as of December 31, 2015 and September 30, 2015, respectively. The Surplus Contract contains a provision providing for a mutual termination of the contract for convenience. The DoD, in accordance with the award of the current (third) Surplus Contract, split the contract into a rolling stock and a non-rolling stock contract. On April 1, 2014, the Company was the high bidder for the non-rolling stock surplus contract with a bid equal to 4.35% of the DoD’s OAV. The non-rolling stock surplus contract has a base term of two years with four one-year renewal options. The price the Company pays for inventory under the current (third) Surplus Contract increased from 1.8% to 4.35% of OAV, resulting in significantly higher Cost of Goods Sold (COGS) in fiscal year 2016 and beyond. This Surplus Contract became effective November 14, 2015. As a result of the Surplus Contract, the Company is the sole remarketer of all DoD non-rolling stock surplus turned into the DLA Disposition Services available for sale within the United States, Puerto Rico, and Guam. The Company has a Scrap Contract with the DLA Disposition Services which was amended effective June 9, 2015. Modifications were made to the principal terms of the Scrap Contract including that (i) contract pricing was adjusted to reflect a 65% profit sharing distribution to the DLA Disposition Services; (ii) DLA Disposition Services may elect to terminate portions of the Scrap Contract by location with a 90-day notification required; and (iii) DLA Disposition Services may elect to terminate portions of the Scrap Contract by certain commodity categories with a 60-day notification required. DLA Disposition Services has initiated an Invitation to Bid for the next Scrap Contract, which will be a three year contract with two one-year options. The Company anticipates that DLA Disposition Services may solicit bids as early as March 2016. As a result of the Scrap Contract, the Company is the sole remarketer of all U.S. Department of Defense scrap turned into the DLA Disposition Services available for sale within the United States, Puerto Rico, and Guam. |
Goodwill
Goodwill | 3 Months Ended |
Dec. 31, 2015 | |
Goodwill. | |
Goodwill | 4. Goodwill The goodwill of acquired companies is primarily related to the acquisition of an experienced and knowledgeable workforce. The following summarizes goodwill activity for the periods indicated: Goodwill (in thousands) Balance at September 30, 2015 $ Translation adjustments ) Balance at December 31, 2015 $ Impairment of Goodwill The Company performs its annual goodwill impairment assessment as of the end of the fiscal year. The last impairment assessment was performed as of September 30, 2015 and the Company identified indicators of impairment, including a decline in the Company’s market capitalization. Goodwill impairment losses as of September 30, 2015, were $136.2 million, including $85.1 million recognized in the quarter ended December 31, 2014. During the three months ended December 31, 2015, no indicators of impairment were identified. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Dec. 31, 2015 | |
Intangible Assets | |
Intangible Assets | 5. Intangible Assets As a result of the acquisition of Jacobs Trading Company on October 1, 2011, the Company assumed the rights and obligations of Jacobs Trading Company under Seller’s Master Merchandise Salvage Contract (the “Wal-Mart Agreement”) dated May 13, 2011. On December 1, 2014, Wal-Mart provided the Company with written notice terminating the Wal-Mart Agreement effective December 8, 2014. As a result of the termination of the Wal-Mart Agreement, the Company concluded that the intangible asset related to the Wal-Mart Agreement was impaired and reduced the remaining unamortized contract intangible asset of $10.3 million to zero during the three months ended December 31, 2014. This impairment charge is recorded in Acquisition costs and related fair value adjustments and impairment of goodwill and long-lived assets in the statements of operations. Intangible assets at December 31, 2015 and September 30, 2015 consisted of the following: December 31, 2015 September 30, 2015 Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (dollars in thousands) Contract intangibles $ $ ) $ $ $ — $ Brand and technology 3 - 5 ) ) Covenants not to compete 3 - 5 ) ) Patent and trademarks 3 - 10 ) ) Total intangible assets, net $ $ ) $ $ $ ) $ Future expected amortization of intangible assets at December 31, 2015 was as follows: Future Amortization Years ending September 30, (in thousands) 2016 (remaining nine months) $ 2017 2018 2019 2020 and after Total $ Intangible assets amortization expense was approximately $0.4 million and $1.1 million for the three months ended December 31, 2015 and 2014, respectively. |
Debt
Debt | 3 Months Ended |
Dec. 31, 2015 | |
Debt | |
Debt | 6. Debt Senior Credit Facility In 2010, the Company entered into a senior credit facility (the Agreement) with a bank, which provides for borrowings up to $75.0 million, as amended. On May 1, 2015, the Company amended this credit facility extending the term to May 31, 2018. Borrowings under the Agreement bear interest at an annual rate equal to the 30 day LIBOR rate plus 1.25% (1.608% at December 31, 2015) due monthly. As of September 30, 2015 and December 31, 2015, the Company had no outstanding borrowings under the Agreement, and the Company’s borrowing availability was $37.5 million, of which the Company has used $8.4 and $5.9 million, respectively, for issued letters of credit. Borrowings under the Agreement are secured by substantially all of the assets of the Company. The Agreement contains certain financial and non-financial restrictive covenants including, among others, the requirements to maintain a minimum level of earnings before interest, income taxes, depreciation and amortization (EBITDA) and a minimum debt coverage ratio. As of December 31, 2015, the Company was in compliance with these covenants. |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | 7. Income Taxes The Company’s interim effective income tax rate is based on management’s best current estimate of the expected annual effective income tax rate. The Company reflected a pre-tax loss in its first quarter of fiscal year 2016 and its corresponding effective tax rate is approximately 29.3%. The Company applies the guidance related to uncertainty in income taxes. The Company has concluded that there were no uncertain tax positions identified during its analysis. The Company’s policy is to recognize interest and penalties in the period in which they occur in the income tax provision. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various state and local jurisdictions and in foreign jurisdictions, primarily Canada and the U.K. Currently, the Company is subject to income tax examinations for fiscal 2012 through 2014. The Company anticipates no material tax liability to arise from these examinations. The statute of limitations for U.S. federal income tax returns for years prior to fiscal 2012 is now closed. However, certain tax attribute carryforwards that were generated prior to fiscal 2012 may be adjusted upon examination by tax authorities if they are utilized. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity | |
Stockholders' Equity | 8. Stockholders’ Equity Share Repurchase Program Since 2008, the Company’s Board of Directors has approved the repurchase of up to $101.9 million in shares under a share repurchase program. Under the program, the Company is authorized to repurchase the issued and outstanding shares of common stock. Share repurchases may be made through open market purchases, privately negotiated transactions or otherwise, at times and in such amounts as management deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other market conditions. The repurchase program may be discontinued or suspended at any time, and will be funded using the Company’s available cash. The Company’s Board of Directors reviews the share repurchase program periodically, the last such review having occurred in February 2014. The Company did not repurchase any shares during the three months ended December 31, 2015 or 2014. As of December 31, 2015, there was approximately $5.1 million that may yet be expended to repurchase shares under the program. 2006 Omnibus Long-Term Incentive Plan (the 2006 Plan) Under the 2006 Plan, as amended, 10,000,000 shares of common stock were available for issuance. At September 30, 2014, there were 772,227 shares remaining reserved for issuance in connection with awards under the 2006 Plan. In February 2015, at the Company’s annual meeting of stockholders, the stockholders approved an amendment to the Plan which provided for an increase of 3,000,000 shares of the Company’s common stock to the shares available for issuance under the 2006 Plan and established a fungible share pool so that grants of awards other than options or stock appreciation rights after January 9, 2016, would be counted as 1.5 shares from the reserve. During fiscal year 2015, the Company granted options to purchase 310,177 shares to employees and directors with exercise prices between $9.35 and $10.41, and options to purchase 288,572 shares were forfeited. During fiscal year 2015, the Company granted 1,298,604 restricted shares to employees and directors at prices ranging from $9.35 to $12.57, and 486,040 restricted shares were forfeited. At September 30, 2015, there were 2,364,472 shares remaining reserved for issuance in connection with awards under the 2006 Plan. During the three months ended December 31, 2015, the Company granted options to purchase 236,952 shares to employees and directors with exercise prices between $6.63 and $8.17, and options to purchase 3,419 shares were forfeited. During the three months ended December 31, 2015, the Company issued 480,503 restricted shares to employees and directors at prices ranging from $6.63 to $8.17, and 34,942 restricted shares were forfeited. At December 31, 2015, there were 1,450,410 shares remaining reserved for issuance in connection with awards under the 2006 Plan. During fiscal year 2015, the Company issued 737,972 cash-settled stock appreciation rights at the price of $9.35, and 59,156 cash-settled stock appreciation rights were forfeited. During the three months ended December 31, 2015, no stock appreciation rights were issued and 21,270 cash-settled stock appreciation rights were forfeited. Stock appreciation rights are recorded as liability awards. The maximum number of shares subject to options or stock appreciation rights that can be awarded under the 2006 Plan to any person is 1,000,000 per year. The maximum number of shares that can be awarded under the 2006 Plan to any person, other than pursuant to an option or stock appreciation right, is 700,000 per year. These shares and options generally vest over a period of one to four years conditioned on continued employment for the incentive period. Stock Option Activity A summary of the Company’s stock option activity for the year ended September 30, 2015 and the three months ended December 31, 2015 is as follows: Options Weighted- Average Exercise Price Options outstanding at September 30, 2014 $ Options granted Options exercised ) Options canceled ) Options outstanding at September 30, 2015 Options granted Options exercised — — Options canceled ) Options outstanding at December 31, 2015 Options exercisable at December 31, 2015 The intrinsic value and weighted average remaining contractual life in years of outstanding and exercisable options at December 31, 2015 is approximately $1,000 and 6.26 and $1,000 and 4.31, respectively, based on a stock price of $6.50 on December 31, 2015. Over the last three years, volatility rates have ranged from 50.90% - 77.92%, the dividend rate has been 0%, risk free interest rates have ranged from 0.12% - 1.51% and expected forfeiture rates have ranged from 19.70% - 23.54%. Restricted Share Activity A summary of the Company’s restricted share activity for the year ended September 30, 2015 and the three months ended December 31, 2015 is as follows: Restricted Shares Weighted- Average Fair Value Unvested restricted shares at September 30, 2014 $ Restricted shares granted Restricted shares vested ) Restricted shares canceled ) Unvested restricted shares at September 30, 2015 Restricted shares granted Restricted shares vested ) Restricted shares canceled ) Unvested restricted shares at December 31, 2015 The intrinsic value and weighted average remaining contractual life in years of unvested restricted shares at December 31, 2015 is approximately $14.9 million and 8.82, respectively, based on a stock price of $6.50 on December 31, 2015. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurement | |
Fair Value Measurement | 9. Fair Value Measurement The Company measures and records in the accompanying consolidated financial statements certain liabilities at fair value on a recurring basis. Authoritative guidance issued by the FASB establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three levels: Level 1 Quoted market prices in active markets for identical assets or liabilities; Level 2 Inputs other than Level 1 inputs that are either directly or indirectly observable; and Level 3 Unobservable inputs developed using estimates and assumptions developed by the Company, which reflect those that a market participant would use. As of December 31, 2015 and September 30, 2015, the Company had no Level 1, Level 2, or Level 3 assets or liabilities that were recorded at fair value on a recurring basis. The Company’s financial assets not measured at fair value are cash and cash equivalents (which includes cash and commercial paper with original maturities of less than 90 days). The Company believes the carrying value approximates fair value due to the short term maturity of these instruments. |
Defined Benefit Pension Plan
Defined Benefit Pension Plan | 3 Months Ended |
Dec. 31, 2015 | |
Defined Benefit Pension Plan | |
Defined Benefit Pension Plan | 10. Defined Benefit Pension Plan Certain employees of GoIndustry, which the Company acquired in July 2012, are covered by the Henry Butcher Pension Fund and Life Assurance Scheme, a qualified defined benefit pension plan. The net periodic benefit cost recognized for the three months ended December 31, 2015 and 2014 included the following components: Qualified Defined Benefit Pension Plan Three months ended December 31, (in thousands) 2015 2014 Service cost — — Interest cost $ $ Expected return on plan assets ) ) Amortization of prior service cost — — Amortization of actuarial (gain)/loss — — Amortization of transitional obligation/(asset) — — Total net periodic benefit cost $ ) $ ) |
Guarantees
Guarantees | 3 Months Ended |
Dec. 31, 2015 | |
Guarantees | |
Guarantees | 11. Guarantees During the second quarter of 2015, the Company issued a guarantee to GoIndustry (UK) Limited (the “Subsidiary”) and the Trustees (the “Trustees”) of the Henry Butcher Pension Fund and Life Assurance Scheme (the “Scheme”). Under the arrangement, the Company irrevocably and unconditionally (a) guarantees to the Trustees punctual performance by the Subsidiary of all its Guaranteed Obligations, defined as all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally in any capacity whatsoever) of the Company to make payments to the Scheme up to a maximum of 10 million British pounds, (b) undertakes with the Trustees that, whenever the Subsidiary does not pay any amount when due in respect of its Guaranteed Obligations, it must immediately on demand by the Trustees pay that amount as if it were the principal obligor; and (c) indemnifies the Trustees as an independent and primary obligation immediately on demand against any cost, charge, expense, loss or liability suffered or incurred by the Trustees if any payment obligation guaranteed by it is or becomes unenforceable, invalid or illegal; the amount of the cost, charge, expense, loss or liability under this indemnity will be equal to the amount the Trustees would otherwise have been entitled to recover on the basis of a guarantee. The guarantee is a continuing guarantee that will extend to the ultimate balance of all sums payable by the Company in respect of its Guaranteed Obligations. The funded status of the Scheme as of September 30, 2015, was disclosed in our Annual Report on Form 10-K in Note 14, Defined Benefit Pension Plan. |
Business Realignment Expenses
Business Realignment Expenses | 3 Months Ended |
Dec. 31, 2015 | |
Business Realignment Expenses | |
Business Realignment Expenses | 12. Business Realignment Expenses On October 1, 2014, the Company announced that it had realigned its workforce in response to the new terms and scope of the current (third) Surplus Contract with the DoD for non-rolling stock and to adjust for the efficiencies realized in its commercial business through ongoing integration efforts to support the future vision and growth of the Company. The business realignment included employee reductions across the organization. Business realignment expenses during the fiscal year ended September 30, 2014, included costs of $1.8 million in employee severance and benefit costs. In September 2015, the Company evaluated its business realignment effort which resulted in a net increase of $0.3 million in accrued expense primarily due to timing changes in commencement of the current (third) DoD Surplus Contract and the delay in the wind-down of the NESA business. The table below sets forth the significant components and activity in the business realignment initiatives during the three months ended December 31, 2015. Liability Balance at September 30, 2015 Business Realignment Expenses Cash Payments Liability Balance at December 31, 2015 Employee severance and benefit costs for fiscal 2014 accrual $ $ $ ) $ Employee severance and benefit costs for fiscal 2015 accrual ) ) Total $ $ ) $ ) $ The business realignment expenses are recorded in costs and expenses from operations in the statement of operations, and in accrued expenses and other current liabilities on the balance sheet as of September 30, 2015 and December 31, 2015. |
Legal Proceedings
Legal Proceedings | 3 Months Ended |
Dec. 31, 2015 | |
Legal Proceedings | |
Legal Proceedings | 13. Legal Proceedings On July 14, 2014, Leonard Howard filed a putative class action complaint in the United States District Court for the District of Columbia against the Company and its chief executive officer, chief financial officer, and chief accounting officer, on behalf of stockholders who purchased the Company’s common stock between February 1, 2012, and May 7, 2014. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by, among other things, misrepresenting the Company’s growth initiative, growth potential, and financial and operating conditions, thereby artificially inflating its share price, and seeks unspecified compensatory damages and costs and expenses, including attorneys’ and experts’ fees. On October 14, 2014, the Court appointed Caisse de Dépôt et Placement du Québec and the Newport News Employees’ Retirement Fund as co-lead plaintiffs. The Plaintiffs filed an amended complaint on December 15, 2014, which alleges substantially similar claims but which does not name the chief accounting officer as a defendant. The Company believes the allegations are without merit and on March 2, 2015, moved to dismiss the amended complaint for failure to state a claim or plead fraud with the requisite particularity. That motion was fully submitted as of June 1, 2015, and the Company is awaiting a decision by the Court. The Company cannot estimate a range of potential liability, if any, at this time. |
Termination of the Wal-Mart Agr
Termination of the Wal-Mart Agreement | 3 Months Ended |
Dec. 31, 2015 | |
Termination of the Wal-Mart Agreement | |
Termination of the Wal-Mart Agreement | 14. Termination of the Wal-Mart Agreement As a result of the acquisition of Jacobs Trading Company on October 1, 2011, the Company assumed the rights and obligations of Jacobs Trading Company under Seller’s Master Merchandise Salvage Contract (the “Wal-Mart Agreement”) dated May 13, 2011. On December 1, 2014, Wal-Mart provided the Company written notice (the “Termination Notice”) terminating the Wal-Mart Agreement effective December 8, 2014. The Termination Notice alleged that the Company failed to comply with certain provisions under the Wal-Mart Agreement with respect to service level requirements and restrictions on the disposition of merchandise. The Company disputed these allegations and contested the termination of the Wal-Mart Agreement with Wal-Mart. As a result of negotiations with Wal-Mart, on January 22, 2015, a settlement was finalized whereby, in exchange for both parties waiving all respective claims against the other, Wal-Mart agreed to pay $7.5 million in damages. The payment was received from Wal-Mart in February 2015. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation have been included. The information disclosed in the notes to the consolidated financial statements for these periods is unaudited. Operating results for the three months ended December 31, 2015 are not necessarily indicative of the results that may be expected for the year ending September 30, 2016 or any future period. Fee revenue is revenue earned under the consignment model, as well as other fee revenue, and is presented separately as it accounts for more than 10% of total revenue. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard that will change the way the Company recognizes revenue and significantly expand the disclosure requirements for revenue arrangements. In July 2015, the FASB delayed the effective date of the new standard such that the new standard will be effective for the Company beginning on October 1, 2018, and may be adopted either retrospectively or on a modified retrospective basis whereby the new standard would be applied to new and existing arrangements with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to retained earnings at the effective date for existing arrangements with remaining performance obligations. The Company is currently evaluating the methods of adoption allowed by the new standard and the effect that adoption of the standard is expected to have on the consolidated financial statements and related disclosures. As a result, the Company’s evaluation of the effect of the new standard will likely extend over several future periods. |
Business Combinations | Business Combinations The Company recognizes all of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair value on the acquisition date. Acquisition-related costs are recognized separately from the acquisition and expensed as incurred. Restructuring costs incurred in periods subsequent to the acquisition date are expensed when incurred. Subsequent changes to the purchase price (i.e., working capital adjustments) or other fair value adjustments determined during the measurement period are recorded as an adjustment to goodwill, with the exception of contingent consideration, which is recognized in the statement of operations in the period it is modified. All subsequent changes to a valuation allowance or uncertain tax position that relate to the acquired company and existed at the acquisition date that occur both within the measurement period and as a result of facts and circumstances that existed at the acquisition date are recognized as an adjustment to goodwill. All other changes in valuation allowances are recognized as a reduction or increase to income tax expense. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the invoiced amount and are non-interest bearing. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables. Allowances are based on management’s judgment, which considers historical experience and specific knowledge of accounts where collectability may not be probable. The Company makes provisions based on historical bad debt experience, a specific review of all significant outstanding invoices and an assessment of general economic conditions. |
Inventory | Inventory Inventory consists of property obtained for resale, generally through the online auction process, and is stated at the lower of cost or market. Cost is determined using the specific identification method. Charges for unsellable inventory are included in cost of goods sold in the period in which they have been determined to occur. As of the three months ended September 30, 2015 and December 31, 2015, the Company’s inventory reserve was approximately $0.8 million and $2.0 million, respectively. |
Earnings per Share | Earnings per Share Basic net income attributable to common stockholders per share is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income attributable to common stockholders per share includes the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The Company had 2,286,685 unvested restricted shares outstanding at December 31, 2015, which were issued at prices ranging from $6.63 to $52.55, of which 2,286,685 and 1,672,394 shares have been excluded from the calculation of income per share for the three months ended December 31, 2015 and 2014, respectively, due to the net losses incurred for the three months ended December 31, 2015 and December 31, 2014. The Company has also excluded the following stock options from its calculation of diluted income per share because the option exercise prices were greater than the average market prices for the applicable period: (a) for the three months ended December 31, 2015, 1,427,944 options; and (b) for the three months ended December 31, 2014, 1,424,035 options. The following summarizes the potential outstanding common stock of the Company as of the dates set forth below: Three Months Ended December 31, 2015 2014 (unaudited) (dollars in thousands except per share amounts) Weighted average shares calculation: Basic weighted average shares outstanding Treasury stock effect of options and restricted stock — — Diluted weighted average common shares outstanding Net loss $ ) $ ) Basic loss per common share $ ) $ ) Diluted loss per common share $ ) $ ) |
Stock-Based Compensation | Stock-Based Compensation The Company estimates the fair value of share-based awards on the date of grant. The fair value of stock options and stock appreciation rights is determined using the Black-Scholes option-pricing model. The fair value of restricted stock awards is based on the closing price of the Company’s common stock on the date of grant. The determination of the fair value of the Company’s stock option awards and stock appreciation rights is based on a variety of factors including, but not limited to, the Company’s common stock price, expected stock price volatility over the expected life of awards, and actual and projected exercise behavior. Additionally, the Company has estimated forfeitures for share-based awards at the dates of grant based on historical experience, adjusted for future expectation. The forfeiture estimate is revised as necessary if actual forfeitures differ from these estimates. The Company issues restricted stock awards where restrictions lapse upon either the passage of time (service vesting), achieving performance targets, or some combination of these restrictions. For those restricted stock awards with only service conditions, the Company recognizes compensation cost on a straight-line basis over the explicit service period. For awards with both performance and service conditions, the Company starts recognizing compensation cost over the remaining service period, when it is probable the performance condition will be met. For stock awards that contain performance vesting conditions, the Company excludes these awards from diluted earnings per share computations until the contingency is met as of the end of that reporting period. For awards to non-employees (who are not directors), the Company records compensation cost when the performance condition is met. The Company presents the cash flows resulting from the tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) as a financing activity with a corresponding operating cash outflow in the Consolidated Statements of Cash Flows. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of potential outstanding common stock | Three Months Ended December 31, 2015 2014 (unaudited) (dollars in thousands except per share amounts) Weighted average shares calculation: Basic weighted average shares outstanding Treasury stock effect of options and restricted stock — — Diluted weighted average common shares outstanding Net loss $ ) $ ) Basic loss per common share $ ) $ ) Diluted loss per common share $ ) $ ) |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
Goodwill. | |
Summary of goodwill activity | Goodwill (in thousands) Balance at September 30, 2015 $ Translation adjustments ) Balance at December 31, 2015 $ |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
Intangible Assets | |
Schedule of intangible assets | December 31, 2015 September 30, 2015 Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (dollars in thousands) Contract intangibles $ $ ) $ $ $ — $ Brand and technology 3 - 5 ) ) Covenants not to compete 3 - 5 ) ) Patent and trademarks 3 - 10 ) ) Total intangible assets, net $ $ ) $ $ $ ) $ |
Schedule of future expected amortization of intangible assets | Future Amortization Years ending September 30, (in thousands) 2016 (remaining nine months) $ 2017 2018 2019 2020 and after Total $ |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity | |
Summary of stock option activity | Options Weighted- Average Exercise Price Options outstanding at September 30, 2014 $ Options granted Options exercised ) Options canceled ) Options outstanding at September 30, 2015 Options granted Options exercised — — Options canceled ) Options outstanding at December 31, 2015 Options exercisable at December 31, 2015 |
Summary of restricted share activity | Restricted Shares Weighted- Average Fair Value Unvested restricted shares at September 30, 2014 $ Restricted shares granted Restricted shares vested ) Restricted shares canceled ) Unvested restricted shares at September 30, 2015 Restricted shares granted Restricted shares vested ) Restricted shares canceled ) Unvested restricted shares at December 31, 2015 |
Defined Benefit Pension Plan (T
Defined Benefit Pension Plan (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
Defined Benefit Pension Plan | |
Schedule of net periodic benefit cost recognized | Qualified Defined Benefit Pension Plan Three months ended December 31, (in thousands) 2015 2014 Service cost — — Interest cost $ $ Expected return on plan assets ) ) Amortization of prior service cost — — Amortization of actuarial (gain)/loss — — Amortization of transitional obligation/(asset) — — Total net periodic benefit cost $ ) $ ) |
Business Realignment Expenses (
Business Realignment Expenses (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
Business Realignment Expenses | |
Schedule of significant components and activity in business realignment initiatives | Liability Balance at September 30, 2015 Business Realignment Expenses Cash Payments Liability Balance at December 31, 2015 Employee severance and benefit costs for fiscal 2014 accrual $ $ $ ) $ Employee severance and benefit costs for fiscal 2015 accrual ) ) Total $ $ ) $ ) $ |
Organization (Details)
Organization (Details) | 3 Months Ended |
Dec. 31, 2015segmentitem | |
Organization | |
Minimum number of product categories offered (in categories) | item | 500 |
Reportable segments (in segments) | segment | 1 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Inventory | ||||
Inventory reserve | $ 2 | $ 0.8 | ||
Restricted shares | ||||
Earnings per Share | ||||
Unvested restricted shares | 2,286,685 | 2,367,187 | 1,897,827 | |
Issue price (in dollars per share) | $ 14.10 | $ 16.08 | $ 24.96 | |
Unvested shares excluded in calculation of diluted income per share | 2,286,685 | 1,672,394 | ||
Restricted shares | Minimum | ||||
Earnings per Share | ||||
Issue price (in dollars per share) | $ 6.63 | $ 6.63 | ||
Restricted shares | Maximum | ||||
Earnings per Share | ||||
Issue price (in dollars per share) | $ 52.55 | $ 52.55 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details 2) - shares | 3 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Employee and director options | ||
Stock options excluded from the calculation of diluted income per share | ||
Stock options excluded from the calculation of diluted income per share (in shares) | 1,427,944 | 1,424,035 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details 3) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted average shares calculation: | ||
Basic weighted average shares outstanding | 30,490,670 | 29,926,273 |
Diluted weighted average common shares outstanding | 30,490,670 | 29,926,273 |
Net loss | $ (5,197) | $ (64,116) |
Basic loss per common share (in dollars per share) | $ (0.17) | $ (2.14) |
Diluted loss per common share (in dollars per share) | $ (0.17) | $ (2.14) |
Defense Logistics Agency (DLA33
Defense Logistics Agency (DLA) Disposition Services Contracts (Details) | Nov. 13, 2015 | Jun. 09, 2015 | Apr. 01, 2014item | Dec. 31, 2015USD ($)item | Sep. 30, 2015USD ($) |
Significant Contracts | |||||
Liability for inventory included in accrued expenses and other current liabilities | $ | $ 25,267,000 | $ 27,350,000 | |||
Surplus Contract | |||||
Significant Contracts | |||||
Base term of follow-on contract extension | 10 months | ||||
Usable surplus property to be purchased as a fixed percentage of DoD's original acquisition value | 1.80% | ||||
Profits from resale of the property retained (as a percent) | 100.00% | ||||
Liability for inventory included in accrued expenses and other current liabilities | $ | $ 5,529,000 | $ 2,026,000 | |||
Non-rolling stock surplus contract | |||||
Significant Contracts | |||||
Term of renewal options | 1 year | ||||
Usable surplus property to be purchased as a fixed percentage of DoD's original acquisition value | 4.35% | ||||
Term of contract | 2 years | ||||
Number of renewal options | item | 4 | ||||
Scrap Contract | |||||
Significant Contracts | |||||
Term of renewal options | 1 year | ||||
Term of contract | 3 years | ||||
Adjusted percentage of profit sharing distribution | 65.00% | ||||
Period of notification to termination portion of contract by location | 90 days | ||||
Period of notification to termination portion of contract by commodity categories | 60 days | ||||
Number of scrap contracts on which bidding was held | item | 2 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | |
Goodwill | |||
Balance at the beginning of the period | $ 64,073 | ||
Translation adjustments | (544) | ||
Balance at the end of the period | $ 63,529 | $ 64,073 | |
Impairment of goodwill | $ 85,100 | $ 136,200 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | Dec. 08, 2014 | |
Intangible Assets | ||||
Gross Carrying Amount | $ 8,768 | $ 8,741 | ||
Accumulated Amortization | (5,064) | (4,690) | ||
Net Carrying Amount | $ 3,704 | 4,051 | ||
Contract intangibles | ||||
Intangible Assets | ||||
Estimated useful life | 10 years | |||
Gross Carrying Amount | $ 1,500 | 1,500 | ||
Accumulated Amortization | (37) | |||
Net Carrying Amount | 1,463 | 1,500 | $ 0 | |
Contract intangibles | Contract Termination | ||||
Intangible Assets | ||||
Write off of intangible asset | $ 10,300 | |||
Brand and technology | ||||
Intangible Assets | ||||
Gross Carrying Amount | 5,749 | 5,749 | ||
Accumulated Amortization | (4,214) | (3,926) | ||
Net Carrying Amount | $ 1,535 | 1,823 | ||
Brand and technology | Minimum | ||||
Intangible Assets | ||||
Estimated useful life | 3 years | |||
Brand and technology | Maximum | ||||
Intangible Assets | ||||
Estimated useful life | 5 years | |||
Covenants not to compete | ||||
Intangible Assets | ||||
Gross Carrying Amount | $ 700 | 700 | ||
Accumulated Amortization | (458) | (433) | ||
Net Carrying Amount | $ 242 | 267 | ||
Covenants not to compete | Minimum | ||||
Intangible Assets | ||||
Estimated useful life | 3 years | |||
Covenants not to compete | Maximum | ||||
Intangible Assets | ||||
Estimated useful life | 5 years | |||
Patent and trademarks | ||||
Intangible Assets | ||||
Gross Carrying Amount | $ 819 | 792 | ||
Accumulated Amortization | (355) | (331) | ||
Net Carrying Amount | $ 464 | $ 461 | ||
Patent and trademarks | Minimum | ||||
Intangible Assets | ||||
Estimated useful life | 3 years | |||
Patent and trademarks | Maximum | ||||
Intangible Assets | ||||
Estimated useful life | 10 years |
Intangible Assets (Details 2)
Intangible Assets (Details 2) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | |
Future expected amortization of intangible assets | |||
2016 (remaining nine months) | $ 1,067 | ||
2,017 | 1,073 | ||
2,018 | 281 | ||
2,019 | 207 | ||
2020 and after | 1,076 | ||
Net Carrying Amount | 3,704 | $ 4,051 | |
Amortization expense | $ 400 | $ 1,100 |
Debt (Details)
Debt (Details) - Amended Senior Credit Facility, expiring May 31, 2018 - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2015 | Sep. 30, 2015 | |
Debt | ||
Maximum borrowings | $ 75 | |
Interest rate basis | 30 day LIBOR | |
Percentage added to reference rate | 1.25% | |
Interest rate at period end (as a percent) | 1.608% | |
Amount outstanding | $ 0 | $ 0 |
Available borrowing capacity | 37.5 | 37.5 |
Issued letters of credit | ||
Debt | ||
Amount outstanding | $ 5.9 | $ 8.4 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Sep. 30, 2015 |
Income Taxes | ||
Expected effective tax rate (as a percent) | 29.30% | |
Deferred tax asset recognized after impairment | $ 8,025 | $ 5,871 |
Uncertain tax positions | $ 0 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ in Millions | Dec. 31, 2015USD ($) |
Stockholders' Equity | |
Share repurchase program approved amount | $ 101.9 |
Amount yet to be expended under the program | $ 5.1 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - $ / shares | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Feb. 28, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | Jan. 09, 2015 | Sep. 30, 2014 | |
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan) | |||||
Shares available for issuance | 10,000,000 | ||||
Remaining shares reserved for issuance | 1,450,410 | 2,364,472 | 772,227 | ||
Increase in shares available for issuance | 3,000,000 | ||||
Reserve shares counted per share granted from fungible share pool (in shares) | 1.5 | ||||
Employee and director options | |||||
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan) | |||||
Options granted (in shares) | 236,952 | 310,177 | |||
Options granted, exercise prices (in dollars per share) | $ 7.02 | $ 9.92 | |||
Options forfeited (in shares) | 3,419 | 288,572 | |||
Forfeited (in shares) | 3,419 | ||||
Employee and director options | Minimum | |||||
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan) | |||||
Options granted, exercise prices (in dollars per share) | $ 6.63 | $ 9.35 | |||
Shares and options vesting period | 1 year | ||||
Employee and director options | Maximum | |||||
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan) | |||||
Options granted, exercise prices (in dollars per share) | $ 8.17 | $ 10.41 | |||
Shares and options vesting period | 4 years | ||||
Restricted shares | |||||
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan) | |||||
Options forfeited (in shares) | 34,942 | ||||
Granted (in shares) | 480,503 | 1,298,604 | |||
Granted (in dollars per share) | $ 6.86 | $ 10.04 | |||
Forfeited (in shares) | 34,942 | 486,040 | |||
Restricted shares | Minimum | |||||
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan) | |||||
Granted (in dollars per share) | $ 6.63 | $ 9.35 | |||
Shares and options vesting period | 1 year | ||||
Restricted shares | Maximum | |||||
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan) | |||||
Granted (in dollars per share) | $ 8.17 | $ 12.57 | |||
Shares and options vesting period | 4 years | ||||
Options or stock appreciation rights | Maximum | |||||
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan) | |||||
Number of shares awarded per person per year | 1,000,000 | ||||
Other than options or stock appreciation rights | Maximum | |||||
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan) | |||||
Number of shares awarded per person per year | 700,000 | ||||
Cash-settled stock appreciation rights | |||||
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan) | |||||
Granted (in shares) | 0 | 737,972 | |||
Granted (in dollars per share) | $ 9.35 | ||||
Forfeited (in shares) | 21,270 | 59,156 |
Stockholders' Equity (Details 3
Stockholders' Equity (Details 3) - Employee and director options - $ / shares | 3 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Sep. 30, 2015 | |
Stock option activity | ||
Options outstanding at the beginning of the period (in shares) | 1,472,643 | 1,465,907 |
Options granted (in shares) | 236,952 | 310,177 |
Options exercised (in shares) | (14,869) | |
Options cancelled (in shares) | (3,419) | (288,572) |
Options outstanding at the end of the period (in shares) | 1,706,176 | 1,472,643 |
Options exercisable at the end of the period (in shares) | 1,008,292 | |
Weighted-Average Exercise Price | ||
Options outstanding at the beginning of the period (in dollars per share) | $ 17.46 | $ 19.50 |
Options granted (in dollars per share) | 7.02 | 9.92 |
Options exercised (in dollars per share) | 7.09 | |
Options cancelled (in dollars per share) | 24.26 | 20.26 |
Options outstanding at the end of the period (in dollars per share) | 16 | $ 17.46 |
Options exercisable at the end of the period (in dollars per share) | $ 17.91 |
Stockholders' Equity (Details 4
Stockholders' Equity (Details 4) - Employee and director options | 3 Months Ended | 36 Months Ended |
Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | |
Intrinsic value and weighted average remaining contractual life in years of outstanding and exercisable options | ||
Intrinsic value of outstanding shares | $ 1,000 | $ 1,000 |
Weighted average remaining contractual life of outstanding options | 6 years 3 months 4 days | |
Intrinsic value of exercisable options | $ 1,000 | $ 1,000 |
Weighted average remaining contractual life of exercisable options | 4 years 3 months 22 days | |
Stock price (in dollars per share) | $ / shares | $ 6.50 | $ 6.50 |
Fair value assumptions | ||
Expected volatility, minimum (as a percent) | 50.90% | |
Expected volatility, maximum (as a percent) | 77.92% | |
Dividend yield (as a percent) | 0.00% | |
Risk free interest rate, minimum (as a percent) | 0.12% | |
Risk free interest rate, maximum (as a percent) | 1.51% | |
Minimum | ||
Fair value assumptions | ||
Expected forfeiture rate (as a percent) | 19.70% | |
Maximum | ||
Fair value assumptions | ||
Expected forfeiture rate (as a percent) | 23.54% |
Stockholders' Equity (Details 5
Stockholders' Equity (Details 5) - Restricted shares - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Sep. 30, 2015 | |
Restricted share activity | ||
Unvested restricted shares at the beginning of the period | 2,367,187 | 1,897,827 |
Restricted shares granted | 480,503 | 1,298,604 |
Restricted shares vested | (526,063) | (343,204) |
Restricted shares cancelled | (34,942) | (486,040) |
Unvested restricted shares at the end of the period | 2,286,685 | 2,367,187 |
Weighted-Average Fair Value | ||
Unvested restricted shares at the beginning of the period (in dollars per share) | $ 16.08 | $ 24.96 |
Granted (in dollars per share) | 6.86 | 10.04 |
Restricted shares vested (in dollars per share) | 16.20 | 27.50 |
Restricted shares cancelled (in dollars per share) | 17.22 | 26.54 |
Unvested restricted shares at the end of the period (in dollars per share) | $ 14.10 | $ 16.08 |
Unvested awards | ||
Intrinsic value of unvested restricted shares | $ 14.9 | |
Weighted average remaining contractual life of unvested restricted shares | 8 years 9 months 26 days | |
Stock price (in dollars per share) | $ 6.50 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2015 | Sep. 30, 2015 |
Level 1 | ||
Fair value measurement | ||
Assets, fair value | $ 0 | $ 0 |
Liabilities, fair value | 0 | 0 |
Level 2 | ||
Fair value measurement | ||
Assets, fair value | 0 | 0 |
Liabilities, fair value | 0 | 0 |
Level 3 | ||
Fair value measurement | ||
Assets, fair value | 0 | 0 |
Liabilities, fair value | $ 0 | $ 0 |
Defined Benefit Pension Plan (D
Defined Benefit Pension Plan (Details) - Defined benefit pension plan. - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Net periodic benefit cost recognized | ||
Interest cost | $ 222 | $ 248 |
Expected return on plan assets | (283) | (299) |
Total net periodic benefit cost | $ (61) | $ (51) |
Guarantees (Details)
Guarantees (Details) £ in Millions | Dec. 31, 2015GBP (£) |
Guarantees | |
Guarantee Obligation Value, maximum | £ 10 |
Business Realignment Expense (D
Business Realignment Expense (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2015 | Sep. 30, 2014 | |
Business realignment expenses rollforward | |||
Employee severance and benefit costs | $ 1,800 | ||
Net increase | $ 300 | ||
Liability Balance, beginning | $ 845 | ||
Business Realignment Expenses | 49 | ||
Cash Payments | (608) | ||
Liability Balance, ending | 845 | 188 | |
Employee severance for fiscal year 2014 | |||
Business realignment expenses rollforward | |||
Liability Balance, beginning | 356 | ||
Business Realignment Expenses | (26) | ||
Cash Payments | (239) | ||
Liability Balance, ending | 356 | 143 | |
Employee severance for fiscal year 2015 | |||
Business realignment expenses rollforward | |||
Liability Balance, beginning | 489 | ||
Business Realignment Expenses | 75 | ||
Cash Payments | (369) | ||
Liability Balance, ending | $ 489 | $ 45 |
Termination of Wal Mart Agreeme
Termination of Wal Mart Agreement (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Sep. 30, 2015 |
Accounts receivable | $ 6,039 | $ 6,194 |
Wal-Mart | ||
Accounts receivable | $ 7,500 |