Liquidity Services (LQDT) 10-Q 6 May 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2016	May. 05, 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	Mar. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		30,726,554
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

Unaudited Consolidated Balance

Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Current assets:
Cash and cash equivalents	$ 117,528	$ 95,465
Accounts receivable, net of allowance for doubtful accounts of $557 and $471 at March 31, 2016 and September 30, 2015, respectively	7,193	6,194
Inventory	32,186	25,510
Tax refund receivable	1,358	33,491
Prepaid and deferred taxes	11,642	19,903
Prepaid expenses and other current assets	6,819	7,826
Total current assets	176,726	188,389
Property and equipment, net	13,495	13,356
Intangible assets, net	3,319	4,051
Goodwill	64,421	64,073
Deferred long-term tax assets	13,830	5,871
Other assets	15,264	12,748
Total assets	287,055	288,488
Current liabilities:
Accounts payable	8,782	9,500
Accrued expenses and other current liabilities	30,209	27,350
Profit-sharing distributions payable	1,503	2,512
Customer payables	27,762	29,802
Total current liabilities	68,256	69,164
Long-term liabilities	3,221	3,322
Total liabilities	71,477	72,486
Stockholders' equity:
Common stock, $0.001 par value; 120,000,000 shares authorized; 30,606,566 shares issued and outstanding at March 31, 2016; 30,026,223 shares issued and outstanding at September 30, 2015	29	29
Additional paid-in capital	215,672	210,712
Accumulated other comprehensive loss	(4,963)	(5,626)
Retained earnings	4,840	10,887
Total stockholders' equity	215,578	216,002
Total liabilities and stockholders' equity	$ 287,055	$ 288,488

Unaudited Consolidated Balance3

Unaudited Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Unaudited Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 557	$ 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	30,606,566	30,026,223
Common stock, shares outstanding	30,606,566	30,026,223

Unaudited Consolidated Statemen

Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Unaudited Consolidated Statements of Operations
Revenue	$ 66,423	$ 83,286	$ 116,608	$ 181,449
Fee revenue	20,455	19,657	36,145	46,637
Total revenue	86,878	102,943	152,753	228,086
Costs and expenses:
Cost of goods sold	39,927	42,661	66,810	96,976
Profit-sharing distributions	2,506	7,558	4,863	17,150
Technology and operations	24,678	24,747	47,486	51,625
Sales and marketing	9,148	10,798	18,608	21,183
General and administrative	10,466	11,374	20,534	20,902
Amortization of contract intangibles				1,211
Depreciation and amortization	1,660	1,994	3,332	3,986
Acquisition costs and related fair value adjustments and impairment of goodwill and long-lived assets			39	96,238
Total costs and expenses	88,385	99,132	161,672	309,271
(Loss) income from operations	(1,507)	3,811	(8,919)	(81,185)
Interest and other income (expense), net	390	(39)	451	(77)
(Loss) income before provision for income taxes	(1,117)	3,772	(8,468)	(81,262)
Benefit (provision) for income taxes	267	(2,391)	2,421	18,527
Net (loss) income	$ (850)	$ 1,381	$ (6,047)	$ (62,735)
Basic (loss) earnings per common share	$ (0.03)	$ 0.05	$ (0.20)	$ (2.09)
Diluted (loss) earnings per common share	$ (0.03)	$ 0.05	$ (0.20)	$ (2.09)
Basic weighted average shares outstanding (in shares)	30,594,940	29,988,324	30,542,520	29,957,298
Diluted weighted average shares outstanding (in shares)	30,594,940	29,988,324	30,542,520	29,957,298

Unaudited Consolidated Stateme5

Unaudited Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Unaudited Consolidated Statements of Comprehensive Income
Net (loss) income	$ (850)	$ 1,381	$ (6,047)	$ (62,735)
Other comprehensive income (loss):
Foreign currency translation	1,421	(1,157)	663	(3,113)
Other comprehensive income (loss), net of taxes	1,421	(1,157)	663	(3,113)
Comprehensive income (loss)	$ 571	$ 224	$ (5,384)	$ (65,848)

Unaudited Consolidated Stateme6

Unaudited Consolidated Statements of Changes in Stockholders' Equity - 6 months ended Mar. 31, 2016 - 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
Vesting of restricted stock (in shares)	580,343
Compensation expense and incremental tax benefit from grants of common stock options and restricted stock		4,960			4,960
Net loss				(6,047)	(6,047)
Foreign currency translation			663		663
Balance at Mar. 31, 2016	$ 29	$ 215,672	$ (4,963)	$ 4,840	$ 215,578
Balance (in shares) at Mar. 31, 2016	30,606,566

Unaudited Consolidated Stateme7

Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities
Net loss	$ (6,047)	$ (62,735)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,332	5,197
Stock compensation expense	5,144	5,412
Provision (benefit) for inventory allowance	1,399	(2,463)
Provision for doubtful accounts	86	1,205
Deferred tax benefit	(2,421)	(22,145)
Impairment of goodwill and long-lived assets		96,238
Incremental tax benefit from exercise of common stock options	213	(65)
Changes in operating assets and liabilities:
Accounts receivable	(1,085)	5,957
Inventory	(8,075)	29,246
Prepaid and deferred taxes	34,641	1,164
Prepaid expenses and other assets	(1,509)	182
Accounts payable	(718)	(308)
Accrued expenses and other	2,866	(16,390)
Profit-sharing distributions payable	(1,008)	285
Customer payables	(2,040)	(10,849)
Other liabilities	(79)	(987)
Net cash provided by operating activities	24,699	28,944
Investing activities
Increase in intangibles	(35)	(9)
Purchases of property and equipment	(2,723)	(5,095)
Net cash used in investing activities	(2,758)	(5,104)
Financing activities
Proceeds from exercise of common stock options (net of tax)		107
Incremental tax benefit from exercise of common stock options	(213)	65
Net cash (used) provided by financing activities	(213)	172
Effect of exchange rate differences on cash and cash equivalents	335	(379)
Net increase in cash and cash equivalents	22,063	23,633
Cash and cash equivalents at beginning of period	95,465	62,598
Cash and cash equivalents at end of period	117,528	86,231
Supplemental disclosure of cash flow information
Cash (received) paid for income taxes, net	$ (34,652)	$ 2,453

Organization

Organization	6 Months Ended
	Mar. 31, 2016
Organization
Organization	1. Organization Liquidity Services, Inc. and its subsidiaries (the “Company”) operate leading auction marketplaces for surplus and salvage assets. The Company 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, the Company 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. The Company organizes the products on its marketplaces 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 . The Company 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	6 Months Ended
	Mar. 31, 2016
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 GAAP 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 and six months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending September 30, 2016 or for 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 Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers , which supersedes most existing revenue recognition guidance under GAAP. The new standard 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 Company’s consolidated financial statements and related disclosures. In April 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-05, “ Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . ASU 2015-05 provides guidance regarding whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the software license element of the arrangement must be accounted for in a manner consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement must be accounted for as a service contract. ASU 2015-05 does not change the accounting for service contracts. ASU 2015-05 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. 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 Company’s consolidated financial statements and related disclosures. In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases . ASU 2016-02 will change the way the Company recognizes its leased assets. ASU 2016-02 will require organizations that lease assets—referred to as “lessees”—to recognize on the balance sheet the assets and liabilities representing the rights and obligations created by those leases. ASU 2016-02 will also require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The standard will be effective for the Company beginning on October 1, 2019. 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 Company’s consolidated financial statements and related disclosures. In March, 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, Compensation-Stock Compensation (Topic 718) . The new standard will change certain aspects of accounting for share-based payments to employees. Under the new standard, the Company will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital (“APIC”). Instead, the Company will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement when the awards vest or are settled. The APIC pools will be eliminated. For interim reporting purposes, the Company will account for excess tax benefits and tax deficiencies as discrete items in the period in which they occur. The new standard will also allow the Company to repurchase more of an employee’s shares than it can today for income tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. The new guidance will require the Company to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. The standard will be effective for the Company beginning on October 1, 2017. 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, as well as for inventory written down to expected market price, are included in cost of goods sold in the period in which they have been determined to occur. As of March 31, 2016 and September 30, 2015, the Company’s inventory reserve was approximately $2.2 million and $0.8 million, respectively. Earnings per Share The Company calculates net income (loss) per share in accordance with FASB Accounting Standards Codification (“ASC”) Topic 260 Earnings Per Share (“ASC 260”). Under ASC 260, basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. The weighted average number of shares of common stock outstanding includes vested restricted stock awards. Diluted net income (loss) per share (“EPS”) reflects the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options and unvested restricted stock awards. The dilutive effect of unexercised stock options and unvested restricted stock awards was determined using the treasury stock method. Under the treasury stock method, the proceeds received from the exercise of stock options, the amount of compensation cost for future service not yet recognized by the Company and the amount of tax benefits that would be recorded in additional paid-in capital when stock options become deductible for income tax purposes are all assumed to be used to repurchase shares of the Company’s common stock. Stock options and restricted stock awards are not included in the computation of diluted net income (loss) per share when they are antidilutive. For the three and six months ended March 31, 2016, the basic and diluted weighted average common shares were the same because the inclusion of dilutive securities would have been anti-dilutive. 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. See Note 8 for outstanding stock options and unvested restricted stock, all of which are anti-dilutive. The following summarizes the basic and diluted income per share: Three Months Ended March 31, Six Months Ended March 31, 2016 2015 2016 2015 (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) income $ ) $ $ ) $ ) Basic (loss) income per common share $ ) $ $ ) $ ) Diluted (loss) income 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 vesting 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 options and 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 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	6 Months Ended
	Mar. 31, 2016
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 under which the Company is the remarketer of all Department of Defense (DoD) non-rolling stock surplus turned into the DLA available for sale within the United States, Puerto Rico, and Guam. The Surplus Contract requires the Company to purchase all usable surplus property offered to the Company by the Department of Defense (DoD) at a fixed percentage of the DoD’s original acquisition value (OAV). This fixed percentage is 4.35%; prior to the date the current Surplus Contract became effective, this fixed percentage was 1.8%. 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 $7,531,000 and $2,026,000 for inventory as of March 31, 2016 and September 30, 2015, respectively. The Surplus Contract contains a provision providing for a mutual termination of the contract for convenience. The initial two-year base period ends in December 2016. There are three one-year options to extend, exercisable by DLA Disposition Services. The Company has a Scrap Contract with the DLA under which the Company is the remarketer of all DoD scrap turned into the DLA available for sale within the United States, Puerto Rico, and Guam. DLA Disposition Services initiated an Invitation to Bid for the next Scrap Contract, which will be a three year contract with two one-year options. DLA Disposition Services solicited bids in February 2016, and awarded the contract to the Company in April 2016. See Note 15, Subsequent Event.

Goodwill

Goodwill	6 Months Ended
	Mar. 31, 2016
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 March 31, 2016 $ 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 six months ended March 31, 2015. During the six months ended March 31, 2016, the Company did not identify any additional indicators of impairment.

Intangible Assets

Intangible Assets	6 Months Ended
	Mar. 31, 2016
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 the seller’s Master Merchandise Salvage Contract with Wal-Mart Stores, Inc. (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 six months ended March 31, 2015. This impairment charge is recorded in the Acquisition costs and the related fair value adjustments and impairment of goodwill and long-lived assets line item in the statements of operations. Intangible assets at March 31, 2016 and September 30, 2015 consisted of the following: March 31, 2016 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 March 31, 2016 is as follows: Future Amortization Years ending September 30, (in thousands) 2016 (remaining six months) $ 2017 2018 2019 2020 and after Total $ Intangible assets amortization expense was approximately $0.4 million and $0.5 million for the three months ended March 31, 2016 and 2015, respectively. Intangible assets amortization expense was approximately $0.8 million and $2.2 million for the six months ended March 31, 2016 and 2015, respectively.

Debt

Debt	6 Months Ended
	Mar. 31, 2016
Debt
Debt	6. Debt Senior Credit Facility Effective March 25, 2016, the Company terminated its $75 million senior credit facility. Borrowings under the Agreement bore interest at an annual rate equal to the 30 day LIBOR rate plus 1.25% (1.608% at December 31, 2015) due monthly. The Company’s borrowing availability under the Facility as of September 30, 2015 and December 31, 2015 was $37.5 million. There were no outstanding borrowings under the Facility at the time of its termination.

Income Taxes

Income Taxes	6 Months Ended
	Mar. 31, 2016
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 recorded a pre-tax loss in the first six months of fiscal year 2016 and its corresponding effective tax rate is approximately 28.6%. The Company applies the authoritative 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 2015. 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	6 Months Ended
	Mar. 31, 2016
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 the Company’s 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 did not repurchase any shares during the six months ended March 31, 2016 or 2015. As of March 31, 2016, there was approximately $5.1 million that may yet be expended to repurchase shares under the program. In addition, the Company’s Board of Directors has approved the repurchase of an additional $5.0 million in shares raising the current amount approved for repurchase, that may yet be expended up to $10.1 million. 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 increased the shares available for issuance under the 2006 Plan by 3,000,000 shares and established a fungible share pool so that awards other than options or stock appreciation rights granted after January 9, 2015, would be counted as 1.5 shares from the shares reserved for issuance under the 2006 Plan. During the three and six months ended March 31, 2016, the Company canceled 92,499 options and 214,014 restricted shares with performance conditions because the Compensation Committee, which administers the 2006 Plan, determined the performance goals had become unachievable. At March 31, 2016, there were 202,905 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 six months ended March 31, 2016, the Company issued 1,062,668 cash-settled stock appreciation rights at a price of $4.57 and 57,322 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. The Company issues stock appreciation rights where restrictions lapse upon either the passage of time (service vesting), achieving performance targets, or some combination of these restrictions. For those stock appreciation rights 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. The stock appreciation rights that include only service conditions 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 six months ended March 31, 2016 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 March 31, 2016 Options exercisable at March 31, 2016 The intrinsic value and weighted average remaining contractual life in years of outstanding and exercisable options at March 31, 2016 is approximately $0 and 6.86 and $0 and 4.78, respectively, based on a stock price of $5.18 on March 31, 2016. 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 six months ended March 31, 2016 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 March 31, 2016 The intrinsic value and weighted average remaining contractual life in years of unvested restricted shares at March 31, 2016 is approximately $14.8 million and 8.99, respectively, based on a stock price of $5.18 on March 31, 2016.

Fair Value Measurement

Fair Value Measurement	6 Months Ended
	Mar. 31, 2016
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 March 31, 2016 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 of these instruments approximates fair value due to the short term maturities.

Defined Benefit Pension Plan

Defined Benefit Pension Plan	6 Months Ended
	Mar. 31, 2016
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 and six months ended March 31, 2016 and 2015 included the following components: Three Months Ended March 31, Six Months Ended March 31, Qualified Defined Benefit Pension Plan 2016 2015 2016 2015 (dollars in thousands) 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	6 Months Ended
	Mar. 31, 2016
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 Note 14, Defined Benefit Pension Plan, to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2015.

Business Realignment Expenses

Business Realignment Expenses	6 Months Ended
	Mar. 31, 2016
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 Surplus Contract 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 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 six months ended March 31, 2016. Liability Balance at September 30, 2015 Business Realignment Expenses Cash Payments Liability Balance at March 31, 2016 (dollars in thousands) 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 March 31, 2016 and September 30, 2015.

Legal Proceedings

Legal Proceedings	6 Months Ended
	Mar. 31, 2016
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, former chief financial officer, and former 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. On March 2, 2015, the Company moved to dismiss the amended complaint for failure to state a claim or plead fraud with the requisite particularity. On March 31, 2016, the Court granted that motion in part and denied it in part. The Company has until May 16, 2016, to answer the amended complaint. The Company believes the allegations in the amended complaint are without merit and cannot estimate a range of potential liability, if any, at this time.

Termination of the Wal-Mart Agr

Termination of the Wal-Mart Agreement	6 Months Ended
	Mar. 31, 2016
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 the seller’s Master Merchandise Salvage Contract with Wal-Mart Stores, Inc. (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.

Subsequent Event

Subsequent Event	6 Months Ended
	Mar. 31, 2016
Subsequent Event
Subsequent Event	15. Subsequent Event On April 8, 2016, the DLA awarded the next scrap contract to the Company. Under the new Scrap Contract, the Company will acquire scrap property from the DLA and pay the DLA a revenue-sharing payment equal to 64.5% of the gross resale proceeds. The Company will bear all of the costs for the sorting, merchandising and sale of the property. The new Scrap Contract has a 36-month base term, commencing in the fourth quarter of fiscal year 2016 or the first quarter of fiscal year 2017, with two 12-month extension options exercisable by the DLA. As disclosed in the Company’s Current Report on Form 8-K filed on May 5, 2016, the Company’s Board of Directors has approved the repurchase of an additional $5.0 million in shares raising the current amount approved for repurchase, that may yet be expended up to $10.1 million.

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Mar. 31, 2016
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 GAAP 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 and six months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending September 30, 2016 or for 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 Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers , which supersedes most existing revenue recognition guidance under GAAP. The new standard 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 Company’s consolidated financial statements and related disclosures. In April 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-05, “ Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . ASU 2015-05 provides guidance regarding whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the software license element of the arrangement must be accounted for in a manner consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement must be accounted for as a service contract. ASU 2015-05 does not change the accounting for service contracts. ASU 2015-05 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. 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 Company’s consolidated financial statements and related disclosures. In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases . ASU 2016-02 will change the way the Company recognizes its leased assets. ASU 2016-02 will require organizations that lease assets—referred to as “lessees”—to recognize on the balance sheet the assets and liabilities representing the rights and obligations created by those leases. ASU 2016-02 will also require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The standard will be effective for the Company beginning on October 1, 2019. 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 Company’s consolidated financial statements and related disclosures. In March, 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, Compensation-Stock Compensation (Topic 718) . The new standard will change certain aspects of accounting for share-based payments to employees. Under the new standard, the Company will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital (“APIC”). Instead, the Company will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement when the awards vest or are settled. The APIC pools will be eliminated. For interim reporting purposes, the Company will account for excess tax benefits and tax deficiencies as discrete items in the period in which they occur. The new standard will also allow the Company to repurchase more of an employee’s shares than it can today for income tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. The new guidance will require the Company to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. The standard will be effective for the Company beginning on October 1, 2017.
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, as well as for inventory written down to expected market price, are included in cost of goods sold in the period in which they have been determined to occur. As of March 31, 2016 and September 30, 2015, the Company’s inventory reserve was approximately $2.2 million and $0.8 million, respectively.
Earnings per Share	Earnings per Share The Company calculates net income (loss) per share in accordance with FASB Accounting Standards Codification (“ASC”) Topic 260 Earnings Per Share (“ASC 260”). Under ASC 260, basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. The weighted average number of shares of common stock outstanding includes vested restricted stock awards. Diluted net income (loss) per share (“EPS”) reflects the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options and unvested restricted stock awards. The dilutive effect of unexercised stock options and unvested restricted stock awards was determined using the treasury stock method. Under the treasury stock method, the proceeds received from the exercise of stock options, the amount of compensation cost for future service not yet recognized by the Company and the amount of tax benefits that would be recorded in additional paid-in capital when stock options become deductible for income tax purposes are all assumed to be used to repurchase shares of the Company’s common stock. Stock options and restricted stock awards are not included in the computation of diluted net income (loss) per share when they are antidilutive. For the three and six months ended March 31, 2016, the basic and diluted weighted average common shares were the same because the inclusion of dilutive securities would have been anti-dilutive. 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. See Note 8 for outstanding stock options and unvested restricted stock, all of which are anti-dilutive. The following summarizes the basic and diluted income per share: Three Months Ended March 31, Six Months Ended March 31, 2016 2015 2016 2015 (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) income $ ) $ $ ) $ ) Basic (loss) income per common share $ ) $ $ ) $ ) Diluted (loss) income 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 vesting 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 options and 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 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 Accoun24

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Mar. 31, 2016
Summary of Significant Accounting Policies
Summary of the basic and diluted income per share	Three Months Ended March 31, Six Months Ended March 31, 2016 2015 2016 2015 (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) income $ ) $ $ ) $ ) Basic (loss) income per common share $ ) $ $ ) $ ) Diluted (loss) income per common share $ ) $ $ ) $ )

Goodwill (Tables)

Goodwill (Tables)	6 Months Ended
	Mar. 31, 2016
Goodwill.
Summary of goodwill activity	Goodwill (in thousands) Balance at September 30, 2015 $ Translation adjustments Balance at March 31, 2016 $

Intangible Assets (Tables)

Intangible Assets (Tables)	6 Months Ended
	Mar. 31, 2016
Intangible Assets
Schedule of intangible assets	March 31, 2016 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 six months) $ 2017 2018 2019 2020 and after Total $

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	6 Months Ended
	Mar. 31, 2016
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 March 31, 2016 Options exercisable at March 31, 2016
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 March 31, 2016

Defined Benefit Pension Plan (T

Defined Benefit Pension Plan (Tables)	6 Months Ended
	Mar. 31, 2016
Defined Benefit Pension Plan
Schedule of net periodic benefit cost recognized	Three Months Ended March 31, Six Months Ended March 31, Qualified Defined Benefit Pension Plan 2016 2015 2016 2015 (dollars in thousands) 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)	6 Months Ended
	Mar. 31, 2016
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 March 31, 2016 (dollars in thousands) Employee severance and benefit costs for fiscal 2014 accrual $ $ ) $ ) $ Employee severance and benefit costs for fiscal 2015 accrual ) ) Total $ $ ) $ ) $

Organization (Details)

Organization (Details)	6 Months Ended
	Mar. 31, 2016segmentcategory
Organization
Minimum number of product categories offered (in categories) | category	500
Reportable segments (in segments) | segment	1

Summary of Significant Accoun31

Summary of Significant Accounting Policies - Inventory and Earnings Per Share (Details) - USD ($) $ in Millions	Mar. 31, 2016	Sep. 30, 2015
Inventory
Inventory reserve	$ 2.2	$ 0.8

Summary of Significant Accoun32

Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Weighted average shares calculation:
Basic weighted average shares outstanding	30,594,940	29,988,324	30,542,520	29,957,298
Diluted weighted average common shares outstanding	30,594,940	29,988,324	30,542,520	29,957,298
Net (loss) income	$ (850)	$ 1,381	$ (6,047)	$ (62,735)
Basic (loss) income per common share (in dollars per share)	$ (0.03)	$ 0.05	$ (0.20)	$ (2.09)
Diluted (loss) income per common share (in dollars per share)	$ (0.03)	$ 0.05	$ (0.20)	$ (2.09)

Defense Logistics Agency (DLA33

Defense Logistics Agency (DLA) Disposition Services Contracts (Details)	3 Months Ended	6 Months Ended
	Mar. 31, 2016USD ($)Option	Mar. 31, 2016USD ($)Option	Sep. 30, 2015USD ($)
Significant Contracts
Liability for inventory included in accrued expenses and other current liabilities | $	$ 30,209,000	$ 30,209,000	$ 27,350,000
Non-rolling stock
Significant Contracts
Usable surplus property to be purchased as a fixed percentage of DoD's original acquisition value	1.80%
Surplus Contract
Significant Contracts
Base Period	2 years
Number of extended renewal options | Option	3
Term of each renewal options extended	1 year
Surplus Contract | U.S. Department of Defense
Significant Contracts
Liability for inventory included in accrued expenses and other current liabilities | $	$ 7,531,000	$ 7,531,000	$ 2,026,000
Surplus Contract | Non-rolling stock
Significant Contracts
Usable surplus property to be purchased as a fixed percentage of DoD's original acquisition value	4.35%
Profits from resale of the property retained (as a percent)	100.00%
Invitation to Bid
Significant Contracts
Term of contract		3 years
Number of renewal options | Option		2
Term of renewal options		1 year

Goodwill (Details)

Goodwill (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Sep. 30, 2015
Goodwill
Balance at the beginning of the period	$ 64,073
Translation adjustments	348
Balance at the end of the period	$ 64,421		$ 64,073
Impairment of goodwill		$ 85,100	$ 136,200

Intangible Assets - Carrying Am

Intangible Assets - Carrying Amount (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Sep. 30, 2015
Intangible Assets
Gross Carrying Amount	$ 8,757		$ 8,741
Accumulated Amortization	(5,438)		(4,690)
Total	$ 3,319		4,051
Contract intangibles
Intangible Assets
Estimated useful life	10 years
Gross Carrying Amount	$ 1,500		1,500
Accumulated Amortization	(75)
Total	1,425	$ 0	1,500
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	(4,501)		(3,926)
Total	$ 1,248		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	(483)		(433)
Total	$ 217		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	$ 808		792
Accumulated Amortization	(379)		(331)
Total	$ 429		$ 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 - Amortizatio

Intangible Assets - Amortization (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015	Sep. 30, 2015
Future expected amortization of intangible assets
2016 (remaining six months)	$ 569		$ 569
2,017	1,193		1,193
2,018	280		280
2,019	206		206
2020 and after	1,071		1,071
Total	3,319		3,319		$ 4,051
Amortization expense	$ 400	$ 500	$ 800	$ 2,200

Debt (Details)

Debt (Details) - Senior Credit Facility - USD ($) $ in Millions	6 Months Ended
	Mar. 31, 2016	Mar. 25, 2016	Dec. 31, 2015	Sep. 30, 2015
Debt
Credit facility terminated		$ 75
Available borrowing capacity			$ 37.5	$ 37.5
Amount outstanding		$ 0
LIBOR
Debt
Percentage added to reference rate	1.25%
Interest rate at period end (as a percent)			1.608%

Income Taxes (Details)

Income Taxes (Details) $ in Millions	Mar. 31, 2016USD ($)
Income Taxes
Expected effective tax rate (as a percent)	28.60%
Uncertain tax positions	$ 0

Stockholders' Equity - Repurcha

Stockholders' Equity - Repurchase Program (Details) - USD ($) $ in Millions	May. 05, 2016	Mar. 31, 2016
Share repurchase program approved amount		$ 101.9
Amount yet to be expended under the program		$ 5.1
Subsequent Event
Share repurchase program approved amount	$ 5
Amount yet to be expended under the program	$ 10.1

Stockholders' Equity - 2006 Pla

Stockholders' Equity - 2006 Plan (Details) - $ / shares	1 Months Ended	3 Months Ended	6 Months Ended	12 Months Ended
	Feb. 28, 2015	Mar. 31, 2016	Mar. 31, 2016	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	10,000,000
Remaining shares reserved for issuance		202,905	202,905			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
Options canceled (in shares)		92,499	92,499
Forfeited (in shares)		214,014	214,014
Employee and director options
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan)
Options granted (in shares)			583,228	310,177
Options granted, exercise prices (in dollars per share)			$ 6.68	$ 9.92
Options forfeited (in shares)			181,631	288,572
Employee and director options | Minimum
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan)
Shares and options vesting period			1 year
Employee and director options | Maximum
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan)
Shares and options vesting period			4 years
Restricted shares
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan)
Granted (in shares)			1,428,867	1,298,604
Granted (in dollars per share)			$ 5.45	$ 10.04
Forfeited (in shares)			352,805	486,040
Restricted shares | Minimum
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan)
Shares and options vesting period			1 year
Restricted shares | Maximum
2006 Omnibus Long-Term Incentive Plan (the 2006 Plan)
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)			1,062,668	737,972
Granted (in dollars per share)			$ 4.57	$ 9.35
Forfeited (in shares)		57,322	57,322	59,156

Stockholders' Equity - 2006 P41

Stockholders' Equity - 2006 Plan Activity (Details) - Employee and director options - $ / shares	6 Months Ended	12 Months Ended
	Mar. 31, 2016	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)	583,228	310,177
Options exercised (in shares)		(14,869)
Options cancelled (in shares)	(181,631)	(288,572)
Options outstanding at the end of the period (in shares)	1,874,240	1,472,643
Options exercisable at the end of the period (in shares)	1,044,454
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)	6.68	9.92
Options exercised (in dollars per share)		7.09
Options cancelled (in dollars per share)	19.29	20.26
Options outstanding at the end of the period (in dollars per share)	13.93	$ 17.46
Options exercisable at the end of the period (in dollars per share)	$ 17.52

Stockholders' Equity - Intrinsi

Stockholders' Equity - Intrinsic Value and Valuation Assumptions (Details) - Employee and director options	6 Months Ended	36 Months Ended
	Mar. 31, 2016USD ($)$ / shares	Mar. 31, 2016USD ($)$ / shares
Intrinsic value and weighted average remaining contractual life in years of outstanding and exercisable options
Intrinsic value of outstanding shares	$ 0	$ 0
Weighted average remaining contractual life of outstanding options	6 years 10 months 10 days
Intrinsic value of exercisable options	$ 0	$ 0
Weighted average remaining contractual life of exercisable options	4 years 9 months 11 days
Stock price (in dollars per share) | $ / shares	$ 5.18	$ 5.18
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 - Restrict

Stockholders' Equity - Restricted Share Activity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2016	Mar. 31, 2016	Sep. 30, 2015
Restricted share activity
Restricted shares cancelled	(214,014)	(214,014)
Restricted shares
Restricted share activity
Unvested restricted shares at the beginning of the period		2,367,187	1,897,827
Restricted shares granted		1,428,867	1,298,604
Restricted shares vested		(580,343)	(343,204)
Restricted shares cancelled		(352,805)	(486,040)
Unvested restricted shares at the end of the period	2,862,906	2,862,906	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)		5.45	10.04
Restricted shares vested (in dollars per share)		16.31	27.50
Restricted shares cancelled (in dollars per share)		24.44	26.54
Unvested restricted shares at the end of the period (in dollars per share)	$ 9.70	$ 9.70	$ 16.08
Unvested awards
Intrinsic value of unvested restricted shares	$ 14.8	$ 14.8
Weighted average remaining contractual life of unvested restricted shares		8 years 11 months 27 days
Stock price (in dollars per share)	$ 5.18	$ 5.18

Fair Value Measurement (Details

Fair Value Measurement (Details) - Recurring basis - USD ($) $ in Thousands	Mar. 31, 2016	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		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Net periodic benefit cost recognized
Interest cost	$ 207	$ 245	$ 429	$ 493
Expected return on plan assets	(269)	(299)	(552)	(598)
Total net periodic (benefit) cost	$ (62)	$ (54)	$ (123)	$ (105)

Guarantees (Details)

Guarantees (Details) £ in Millions	Mar. 31, 2016GBP (£)
Guarantees
Guarantee Obligation Value, maximum	£ 10

Business Realignment Expense (D

Business Realignment Expense (Details) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended	12 Months Ended
	Sep. 30, 2015	Mar. 31, 2016	Sep. 30, 2014
Business realignment expenses rollforward
Employee severance and benefit costs			$ 1,800
Net increase	$ 300
Liability Balance, beginning		$ 845
Business Realignment Expenses		95
Cash Payments		(680)
Liability Balance, ending	845	70
Employee severance for fiscal year 2014
Business realignment expenses rollforward
Liability Balance, beginning		356
Business Realignment Expenses		20
Cash Payments		(271)
Liability Balance, ending	356	65
Employee severance for fiscal year 2015
Business realignment expenses rollforward
Liability Balance, beginning		489
Business Realignment Expenses		75
Cash Payments		(409)
Liability Balance, ending	$ 489	$ 5

Termination of Wal Mart Agreeme

Termination of Wal Mart Agreement (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015	Feb. 28, 2015
Accounts Receivable	$ 7,193	$ 6,194
Wal-Mart
Accounts Receivable			$ 7,500

Subsequent Event (Details)

Subsequent Event (Details) $ in Millions	Apr. 08, 2016Option	May. 05, 2016USD ($)	Mar. 31, 2016USD ($)
Subsequent Event
Share repurchase program approved amount			$ 101.9
Amount yet to be expended under the program			$ 5.1
Subsequent Event
Subsequent Event
Share repurchase program approved amount		$ 5
Amount yet to be expended under the program		$ 10.1
Subsequent Event | Scrap Contract
Subsequent Event
Percentage of revenue sharing distribution	64.50%
Contract Term	36 months
Number of Renewal Options | Option	2
Renewal Options Term	12 months