Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2017 | Jan. 31, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ALJJ | |
Entity Registrant Name | ALJ REGIONAL HOLDINGS INC | |
Entity Central Index Key | 1,438,731 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 37,921,116 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 2,027 | $ 5,630 |
Accounts receivable, net of allowance for doubtful accounts of $987 ($830 at September 30, 2017) | 55,540 | 49,457 |
Inventories, net | 9,903 | 9,376 |
Prepaid expenses and other current assets | 8,045 | 5,783 |
Total current assets | 75,515 | 70,246 |
Property and equipment, net | 56,735 | 54,335 |
Goodwill | 56,372 | 54,964 |
Intangible assets, net | 46,498 | 43,179 |
Collateral deposits, less current portion | 694 | 879 |
Other assets | 3,810 | 4,474 |
Deferred tax asset, net | 7,800 | 11,052 |
Total assets | 247,424 | 239,129 |
Current liabilities: | ||
Accounts payable | 15,667 | 15,597 |
Accrued expenses | 13,636 | 12,661 |
Income taxes payable | 195 | |
Deferred revenue and customer deposits | 4,312 | 5,755 |
Current portion of term loan, net of deferred loan costs | 8,196 | 11,848 |
Current portion of capital lease obligations | 3,575 | 2,571 |
Current portion of workers’ compensation reserve | 989 | 1,015 |
Other current liabilities | 1,591 | 64 |
Total current liabilities | 47,966 | 49,706 |
Line of credit, net of deferred loan costs | 13,536 | 5,330 |
Term loan payable, less current portion, net of deferred loan costs | 81,475 | 76,753 |
Deferred revenue, less current portion | 2,675 | 3,111 |
Workers’ compensation reserve, less current portion | 1,719 | 1,748 |
Capital lease obligations, less current portion | 5,730 | 4,679 |
Other non-current liabilities | 1,923 | 2,049 |
Total liabilities | 155,024 | 143,376 |
Commitments and contingencies (Note 8) | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value; total authorized – 5,000,000 shares; 1,000,000 shares authorized for Series A; 550,000 shares authorized for Series B; none issued and outstanding as of December 31, 2017 and September 30, 2017 | ||
Common stock, $0.01 par value; authorized – 100,000,000 shares; 37,621,116 and 37,041,308 shares issued and outstanding at December 31, 2017 and September 30, 2017, respectively | 376 | 371 |
Additional paid-in capital | 278,438 | 276,478 |
Accumulated deficit | (186,414) | (181,096) |
Total stockholders’ equity | 92,400 | 95,753 |
Total liabilities and stockholders’ equity | $ 247,424 | $ 239,129 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Accounts receivable, allowance for doubtful accounts | $ 987 | $ 830 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 37,621,116 | 37,041,308 |
Common stock, shares outstanding | 37,621,116 | 37,041,308 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Series B Preferred Stock [Member] | ||
Preferred stock, shares authorized | 550,000 | 550,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||
Net revenue | $ 94,954 | $ 77,617 |
Costs and expenses: | ||
Cost of revenue | 74,910 | 60,181 |
Selling, general, and administrative expense | 19,538 | 14,383 |
(Gain) loss on disposal of assets, net | (207) | 8 |
Total operating expenses | 94,241 | 74,572 |
Operating income | 713 | 3,045 |
Other expense: | ||
Interest expense, net | (2,660) | (2,434) |
Total other expense | (2,660) | (2,434) |
(Loss) income before income taxes | (1,947) | 611 |
Provision for income taxes | (3,371) | (60) |
Net (loss) income | $ (5,318) | $ 551 |
Basic (loss) earnings per share of common stock | $ (0.14) | $ 0.02 |
Diluted (loss) earnings per share of common stock | $ (0.14) | $ 0.02 |
Weighted average shares of common stock outstanding: | ||
Basic | 37,577 | 34,575 |
Diluted | 37,577 | 35,712 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | ||
Net (loss) income | $ (5,318) | $ 551 |
Adjustments to reconcile net (loss) income to cash (used for) provided by operating activities: | ||
Depreciation and amortization - cost of revenue | 1,399 | 1,282 |
Depreciation and amortization - selling, general and administrative expense | 3,434 | 2,679 |
Stock-based compensation expense | 293 | 183 |
Provision for bad debts | 156 | |
Deferred income taxes | 3,252 | (226) |
(Gain) loss on disposal of assets, net | (207) | 8 |
Amortization of deferred loan costs | 307 | 251 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (6,240) | (3,662) |
Inventories, net | 979 | 1,320 |
Collateral deposits | 184 | 1,300 |
Prepaid expenses and other current assets | (2,000) | 77 |
Other assets | 664 | (2,244) |
Accounts payable | 69 | 3,759 |
Accrued expenses | 1,064 | 1,858 |
Income tax payable | (195) | 184 |
Deferred revenue and customer deposits | (1,880) | (166) |
Other current liabilities | 501 | (587) |
Other liabilities | (154) | 1,742 |
Cash (used for) provided by operating activities | (3,692) | 8,309 |
Investing activities | ||
Acquisitions, net of cash acquired | (9,000) | |
Proceeds from sales of assets | 343 | 97 |
Capital expenditures | (980) | (4,042) |
Cash used for investing activities | (9,637) | (3,945) |
Financing activities | ||
Net proceeds on line of credit | 8,162 | |
Payments on term loan | (6,427) | (4,482) |
Proceeds from term loan | 7,500 | |
Proceeds from issuance of common stock | 1,500 | |
Debt and common stock issuance costs | (332) | |
Payments on financed insurance premiums | (290) | |
Payments on capital leases | (677) | (436) |
Cash provided by (used for) financing activities | 9,726 | (5,208) |
Change in cash and cash equivalents | (3,603) | (844) |
Cash and cash equivalents at beginning of period | 5,630 | 5,279 |
Cash and cash equivalents at end of period | 2,027 | 4,435 |
Cash paid during the period for: | ||
Taxes | 599 | 104 |
Interest | 2,205 | 2,149 |
Non-cash investing and financing activities: | ||
Capital equipment purchases financed with capital leases | $ 2,734 | |
Financed insurance premiums | $ 866 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. ORGANIZATION AND BASIS OF PRESENTATION Organization ALJ Regional Holdings, Inc. (including subsidiaries, referred to collectively in this Report as “ALJ,” the “Company” or “we”) is a holding company. ALJ’s primary assets as of December 31, 2017, were all of the outstanding capital stock of the following companies: • Faneuil, Inc. (including its subsidiaries, “Faneuil”). • Floors-N-More, LLC, dba, Carpets N’ More (“Carpets”) • Phoenix Color Corp. (including its subsidiaries, “Phoenix”). ALJ has organized its business and corporate structure along the following business segments: Faneuil, Carpets, and Phoenix. ALJ is reported as corporate overhead. Basis of Presentation The interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, for interim financial information and with the instructions to the Securities and Exchange Commission, or SEC, Form 10-Q and Article 10 of SEC Regulation S-X. They do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with ALJ’s audited financial statements and notes thereto for the years ended September 30, 2017 and 2016, filed with the Securities and Exchange Commission on December 19, 2017. The Company has made estimates and judgments affecting the amounts reported in its condensed consolidated financial statements and the accompanying notes. Significant estimates and assumptions by management are used for, but are not limited to, determining the fair value of assets and liabilities, including intangible assets acquired and allocation of acquisition purchase prices, estimated useful lives, recoverability of long-lived and intangible assets, the recoverability of goodwill, the realizability of deferred tax assets, stock-based compensation, the likelihood of material loss as a result of loss contingencies, customer lives, the allowance for doubtful accounts and inventory reserves, and calculation of insurance reserves. Actual results may differ materially from estimates. The interim financial information is unaudited but reflects all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly ALJ’s results of operations and financial position for the interim period. The results of operations for the three months ended December 31, 2017, are not necessarily indicative of the results expected for future quarters or the full year. For a complete summary of ALJ’s significant accounting policies, please refer to Note 2, “Summary of Significant Accounting Policies,” included with ALJ’s audited financial statements and notes thereto for the years ended September 30, 2017 and 2016, filed with the Securities and Exchange Commission on December 19, 2017. There were no material changes to significant accounting policies during the three months ended December 31, 2017. |
Recent Accounting Standards
Recent Accounting Standards | 3 Months Ended |
Dec. 31, 2017 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Standards | 2. RECENT ACCOUNTING STANDARDS Accounting Standards Adopted In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11, “ Simplifying the Measurement of Inventory (Topic 330): Simplifying the Measurement of Inventory .” The amendments in ASU 2015-11 require an entity to measure inventory at the lower of cost or net realizable value. The amendments do not apply to inventory that is measured using last-in, first out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. ASU 2015-11 should be applied prospectively. ALJ adopted ASU 2015-11 The standard did not have a significant impact on ALJ’s consolidated financial statements. Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers Principal versus Agent Considerations (Reporting Revenue Gross versus Net), Identifying Performance Obligations and Licensing, Narrow-Scope Improvements and Practical Expedients,” 2017-10, Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services. ASU 2014-09 will be effective for ALJ on October 1, 2019 as ALJ has determined that it will not adopt ASU 2014-09 early. ASU 2014-09 allows for two methods of adoption: (a) “full retrospective” adoption, meaning the standard is applied to all periods presented, or (b) “modified retrospective” adoption, meaning the cumulative effect of applying ASU 2014-09 is recognized as an adjustment to the opening retained earnings balance in the year of adoption. ALJ has not yet determined which method it will adopt. As the new standard will supersede substantially all existing revenue guidance, it could impact the timing of ALJ’s revenue and cost of revenue recognition across all business segments. ALJ has formed a project team and has engaged an outside revenue recognition consultant who has completed a revenue recognition adoption roadmap that includes three phases. Phase I is the identification, documentation, and preliminary analysis of how ALJ currently accounts for revenue transactions compared to the revenue accounting required under the new standard. Phase I is expected to be completed in early 2018. Phase II includes a more detailed analysis, including the development of revenue recognition models, data analysis, analyzing implementation options, and finalizing a transition method. Phase II is expected to be completed in mid-2018. Phase III includes identification of system requirements, changes to internal controls and business processes, and final implementation. Phase III is expected to be completed in mid-2019. Because of the nature of the work that remains, at this time we are unable to reasonably estimate the impact of adoption on our consolidated financial statements. ALJ’s evaluation of the financial impact and related disclosure of the new standard will likely extend over several future reporting periods. In February 2016, the FASB issued ASU 2016-02, “ Leases ASU 2016-02 requires lessees to recognize a right-of-use asset and corresponding lease liability for all leases with terms of more than 12 months. Recognition, measurement, and presentation of expenses will depend on classification as either a finance or operating lease. ASU 2016-02 also requires certain quantitative and qualitative disclosures. The provisions of ASU 2016-02 should be applied on a modified retrospective basis. ASU 2016-02 will be effective for ALJ on October 1, 2020 as ALJ has determined that it will not adopt ASU 2016-02 early. The adoption of ASU 2016-02 will result in a material increase to the Company’s consolidated balance sheets for lease liabilities and right-of-use assets. The Company is currently evaluating the other effects the adoption of ASU 2016-02 will have on its consolidated financial statements and related disclosures. |
Acquisitions
Acquisitions | 3 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | 3. ACQUISITIONS Printing Components Business On October 2, 2017 (the “Purchase Date”), Phoenix acquired certain assets and assumed certain liabilities from LSC Communications, Inc. (“LSC”) and Moore-Langen Printing Company, Inc. related to its printing and manufacturing services division in Terre Haute, Indiana. Such assets and liabilities are referred to hereinafter as the “Printing Components Business.” Total purchase price was $10.0 million in cash, subject to customary net working capital adjustments. Phoenix withheld $1.0 million from the consideration paid at closing, which will be paid on October 2, 2018. The Printing Components Business leverages Phoenix’s existing capabilities and core competencies, strengthens its position in the education markets, and expands revenue into new markets. As part of the Printing Components Business acquisition, Phoenix and LSC entered into a supply agreement (the “Supply Agreement”). Pursuant to the Supply Agreement, LSC agreed to purchase from Phoenix its print requirements to continue servicing certain of its customers, buy minimum amounts of certain components from Phoenix, and provide Phoenix with a right of last refusal to supply certain non-component work. Phoenix and ALJ financed the acquisition by borrowing $7.5 million under a term loan with Cerberus, selling an aggregate of $1.5 million of ALJ common stock in a private offering to two investors who are unaffiliated with ALJ, and using $1.0 million cash from the exercise of stock options by Jess Ravich, Executive Chairman of ALJ. ALJ amended its financing agreement with Cerberus to facilitate the term loan (Note 7). The following schedule reflects the estimated fair value of assets acquired and liabilities assumed on the Purchase Date and the purchase price details ( in thousands Purchase Price Balance Sheet Caption Allocation Total current assets $ 1,767 Fixed assets 2,273 Identified intangible asset - supply agreement 4,700 Goodwill 1,408 Total assets 10,148 Total current liabilities (148 ) Purchase price $ 10,000 Break Out of Components of Purchase Price Consideration Term loan $ 7,500 Common stock issued 1,500 Cash received from exercise of stock option 1,000 Purchase price $ 10,000 The Company accounted for the Printing Components Business acquisition using the purchase method of accounting. Accordingly, the assets and liabilities were recorded at their fair values at the date of acquisition. The excess of the purchase price over the fair value of the tangible and intangible assets acquired and the liabilities assumed was recorded as goodwill. During the measurement period, if new information is obtained about facts and circumstances that existed as of the acquisition date, cumulative changes in the estimated fair values of the net assets recorded may change the amount of the purchase price allocable to goodwill. During the measurement period, which expires one year from the acquisition date, changes to any purchase price allocations that are material to the Company's consolidated financial results will be adjusted in the reporting period in which the adjustment amount is determined. During the three months ended December 31, 2017, the Printing Components Business recorded $4.5 million of net revenue. Because the Printing Components Business was closely aligned with Phoenix’s existing business, including the overlap of customers, its operations were immediately integrated into Phoenix’s operations, and financial metrics other than net revenue were not separately tracked. During the three months ended December 31, 2017, the Company incurred approximately $123,000 of acquisition-related costs in connection with the Printing Components Business acquisition, which were expensed to selling, general and administrative expense. Customer Management Outsourcing Business On May 26, 2017 (the “CMO Business Purchase Date”), Faneuil acquired certain assets and assumed certain liabilities associated with the customer management outsourcing business (“CMO Business”) of Vertex Business Services LLC. The CMO Business, which was purchased to expand Faneuil’s presence into the utilities market, provides direct customer care call center operations, back-office processes, including billing, collections and business analytics, and installation and cloud-based customer care support exclusively for the utilities industry. The following schedule reflects the final fair value of assets acquired and liabilities assumed on the CMO Business Purchase Date and the purchase price details ( in thousands Purchase Price Balance Sheet Caption Allocation Total current assets $ 3,947 Fixed assets 553 Identified intangible assets: Customer relationships 3,790 Supply agreements/contract backlog 5,418 Non-compete agreements 250 Goodwill 1,547 Total assets 15,505 Total current liabilities (2,760 ) Purchase price $ 12,745 Break Out of Components of Purchase Price Consideration Line of credit $ 5,500 Common stock issued 4,708 Cash 2,537 Purchase price $ 12,745 The following is a summary of CMO Business revenue and earnings included in the Company’s consolidated statement of operations for the three months ended December 31, 2017 ( in thousands Income Statement Caption Amount Revenue $ 8,526 Operating loss (221 ) |
Concentration Risks
Concentration Risks | 3 Months Ended |
Dec. 31, 2017 | |
Risks And Uncertainties [Abstract] | |
Concentration Risks | 4. CONCENTRATION RISKS Cash The Company maintains its cash balances in accounts, which, at times, may exceed federally insured limits. The Company has not experienced any loss in such accounts and believes there is little exposure to any significant credit risk. Major Customers and Accounts Receivable ALJ did not have any customer with net revenue in excess of 10% of consolidated net revenue. Each of ALJ’s segments had customers that represent more than 10% of their respective net revenue, as described below. Faneuil Three Months Ended December 31, 2017 2016 Customer A 14.1 % 18.3 % Customer B 14.1 15.9 Customer C ** 11.3 ** Less than 10% of Faneuil net revenue. Trade receivables from these customers totaled $8.2 million on December 31, 2017. As of December 31, 2017, all Faneuil accounts receivable were unsecured. The risk with respect to accounts receivable is mitigated by credit evaluations performed on customers and the short duration of payment terms extended to customers. Carpets Three Months Ended December 31, 2017 2016 Customer A 26.8 % 29.4 % Customer B 25.1 29.0 Customer C 24.9 16.6 Trade receivables from these customers totaled $3.1 million on December 31, 2017. As of December 31, 2017, all Carpets accounts receivable were unsecured. The risk with respect to accounts receivable is mitigated by credit evaluations performed on customers and the short duration of payment terms extended to customers. Phoenix Three Months Ended December 31, 2017 2016 Customer A 18.9 % ** Customer B 16.1 21.1 % Customer C 10.5 ** Customer D ** 14.5 ** Less than 10% of Phoenix net revenue. Trade receivables from these customers totaled $6.1 million on December 31, 2017. As of December 31, 2017, all Phoenix accounts receivable were unsecured. The risk with respect to accounts receivable is mitigated by credit evaluations performed on customers and the short duration of payment terms extended to customers. Supplier Risk ALJ did not have any suppliers that represented more than 10% of consolidated inventory purchases. However, two of ALJ’s segments had suppliers that represented more than 10% of their respective inventory purchases, as described below. Carpets Three Months Ended December 31, 2017 2016 Supplier A 23.5 % 13.0 % Supplier B 13.9 ** Supplier C 12.6 ** ** Less than 10% of Carpets inventory purchases. If these suppliers were unable to provide materials on a timely basis, Carpets management believes alternative suppliers could provide the required materials with minimal disruption to the business. Phoenix Three Months Ended December 31, 2017 2016 Supplier A 29.4 % 21.9 % Supplier B 12.9 11.2 If these suppliers were unable to provide materials on a timely basis, Phoenix management believes alternative suppliers could provide the required supplies with minimal disruption to the business. |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 3 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Composition of Certain Financial Statement Captions | 5. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS Accounts Receivable, Net The following table summarizes accounts receivable at the end of each reporting period ( in thousands December 31, September 30, 2017 2017 Accounts receivable $ 52,804 $ 47,216 Unbilled receivables 3,723 3,071 Accounts receivable 56,527 50,287 Less: Allowance for doubtful accounts (987 ) (830 ) Accounts receivable, net $ 55,540 $ 49,457 Inventories, Net The following table summarizes inventories at the end of each reporting period ( in thousands December 31, September 30, 2017 2017 Raw materials $ 3,781 $ 3,127 Semi-finished goods/work in process 3,905 4,064 Finished goods 2,510 2,378 Inventories 10,196 9,569 Less: Allowance for obsolete inventory (293 ) (193 ) Inventories, net $ 9,903 $ 9,376 Property and Equipment The following table summarizes property and equipment at the end of each reporting period ( in thousands December 31, September 30, 2017 2017 Machinery and equipment $ 24,023 $ 22,753 Building and improvements 16,323 15,593 Software 15,034 12,276 Computer and office equipment 10,511 10,344 Land 9,267 9,167 Leasehold improvements 9,175 8,997 Furniture and fixtures 3,599 3,595 Vehicles 235 229 Construction in process 553 136 Property and equipment 88,720 83,090 Less: Accumulated depreciation and amortization (31,985 ) (28,755 ) Property and equipment, net $ 56,735 $ 54,335 Property and equipment depreciation and amortization expense, including amounts related to capitalized leased assets, Goodwill The following table summarizes goodwill by reportable segment at the end of each reporting period ( in thousands December 31, September 30, 2017 2017 Faneuil $ 21,276 $ 21,276 Carpets 2,555 2,555 Phoenix 32,541 31,133 Goodwill $ 56,372 $ 54,964 Intangible Assets The following table summarizes identified intangible assets at the end of each reporting period ( in thousands December 31, 2017 September 30, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Customer relationships $ 34,400 $ (8,167 ) $ 26,233 $ 34,400 $ (7,446 ) $ 26,954 Trade names 10,760 (1,250 ) 9,510 10,760 (1,143 ) 9,617 Supply agreements/Contract Backlog 10,358 (777 ) 9,581 5,658 (420 ) 5,238 Non-compete agreements 3,030 (2,030 ) 1,000 3,030 (1,858 ) 1,172 Internal software 580 (406 ) 174 580 (382 ) 198 Totals $ 59,128 $ (12,630 ) $ 46,498 $ 54,428 $ (11,249 ) $ 43,179 Intangible asset amortization expense was $1,381,000 and $1,008,000 for the three months ended December 31, 2017 and 2016, respectively. The following table presents expected future amortization expense for the remainder in thousands Estimated Future Amortization 2018 $ 4,101 2019 5,099 2020 4,800 2021 4,485 2022 4,067 Thereafter 23,946 $ 46,498 Debt The following table summarizes ALJ’s line of credit, and current and noncurrent term loan payables at the end of each reporting period ( in thousands December 31, September 30, 2017 2017 Line of credit: Line of credit $ 13,662 $ 5,500 Less: deferred loan costs (126 ) (170 ) Line of credit, net of deferred loan costs 13,536 5,330 Current portion of term loan: Current portion of term loan $ 9,188 $ 12,764 Less: deferred loan costs (992 ) (916 ) Current portion of term loan, net of deferred loan costs 8,196 11,848 Term loan payable, less current portion: Term loan payable, less current portion 82,903 78,254 Less: deferred loan costs (1,428 ) (1,501 ) Term loan payable, less current portion, net of deferred loan costs $ 81,475 $ 76,753 Accrued Expenses The following table summarizes accrued expenses at the end of each reporting period ( in thousands December 31, September 30, 2017 2017 Accrued compensation and related taxes $ 8,524 $ 7,370 Rebates payable 2,042 2,014 Legal and other 1,092 1,466 Interest payable 799 651 Medical and benefit-related payables 501 431 Accrued board of director fees 260 370 Sales tax payable 217 151 Deferred rent 201 208 Total accrued expenses $ 13,636 $ 12,661 Workers’ Compensation Reserve Faneuil Carpets Phoenix. |
(Loss) Earnings Per Share
(Loss) Earnings Per Share | 3 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings Per Share | 6. (LOSS) EARNINGS PER SHARE ALJ computed basic and diluted (loss) earnings per common share for each period as follows ( in thousands, except per share amounts Three Months Ended December 31, 2017 2016 Net (loss) income $ (5,318 ) $ 551 Weighted average shares of common stock outstanding - basic 37,577 34,575 Potentially dilutive effect of options to purchase common stock — 1,137 Weighted average shares of common stock outstanding – diluted 37,577 35,712 Basic (loss) earnings per share of common stock $ (0.14 ) $ 0.02 Diluted (loss) earnings per share of common stock $ (0.14 ) $ 0.02 ALJ computed basic earnings per share of common stock using net (loss) income divided by the weighted average number of shares of common stock outstanding during the period. ALJ computed diluted earnings per share of common stock using net (loss) income divided by the weighted average number of shares of common stock outstanding plus potentially dilutive shares of common stock outstanding during the period. Potentially dilutive shares issuable upon exercise of options to purchase common stock were determined by applying the treasury stock method to the assumed exercise of outstanding stock options. Stock options to purchase 1,914,000 shares of common stock were not considered in calculating ALJ’s diluted earnings per common share for the three months ended December 31, 2017 as their effect would be anti-dilutive. |
Debt
Debt | 3 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 7. DEBT Term Loan and Line of Credit In August 2015, ALJ entered into a financing agreement (“Financing Agreement”) with Cerberus Business Finance, LLC (“Cerberus”), to borrow $105.0 million in a term loan (“Cerberus Term Loan”) and have available up to $30.0 million in a revolving loan (“Cerberus/PNC Revolver,” and together with the Cerberus Term Loan, the “Cerberus Debt”). ALJ has subsequently entered into three amendments to the Financing Agreement. The Financing Agreement and three amendments are summarized below ( in thousands Description Use of Proceeds Origination Date Interest Rate * Quarterly Payments Balance at December 31, 2017 Term Loan: Financing Agreement Phoenix acquisition August 2015 7.99% to 8.30% $ 1,969 $ 76,766 First Amendment Color Optics acquisition July 2016 7.99% to 8.30% 187 8,280 Third Amendment Printing Components Business acquisition October 2017 7.99% to 8.30% 141 7,045 Totals $ 2,297 $ 92,091 Line of Credit: Cerberus/PNC Revolver Working Capital August 2015 10.00% to 10.25% $ — $ 8,162 Second Amendment CMO Business acquisition May 2017 7.99% to 8.30% — 5,500 Totals $ — $ 13,662 * Range of annual interest rates accrued during the three months ended December 31, 2017. Interest payments are due in arrears on the first day of each month. Quarterly principal payments are due on the last day of each fiscal quarter. Annual principal payments equal to 75% of ALJ’s excess cash flow (“ECF”), as defined in the Financing Agreement, are due upon delivery of the audited financial statements. During the three months ended December 31, 2017, ALJ made an ECF payment of $4.1 million. A final balloon payment is due at maturity, August 14, 2020. There is a prepayment penalty equal to 1% if the Cerberus Term Loan is repaid prior to August 2018. ALJ may make payments of up to $7.0 million against the loan with no penalty. The Cerberus Debt is secured by substantially all the Company’s assets and imposes certain limitations on the Company, including its ability to incur debt, grant liens, initiate certain investments, declare dividends and dispose of assets. The Cerberus Debt also requires ALJ to comply with certain debt covenants. As of December 31, 2017, ALJ was in compliance with all debt covenants and had unused borrowing capacity of $10.8 million. Deferred Loan Costs During the three months ended December 31, 2017, in connection with the Third Amendment, ALJ paid legal and other fees totaling $0.3 million, which were deferred and are being amortized to interest expense over the life of the debt. Contingent Loan Costs As part of the Second Amendment, ALJ paid Cerberus an amendment fee. Additionally, as part of the Second Amendment, ALJ is required to pay a fee in each of three consecutive annual periods commencing May 27, 2018 and ending on the termination date, if at any time during each annual period there are any amounts outstanding on the Cerberus/PNC Revolver (“Contingent Payments”). Such Contingent Payments become due and payable on the first day within each annual period there is an outstanding balance on the Cerberus/PNC Revolver. Cerberus Debt Estimated Future Minimum Payments Estimated future minimum payments are as follows ( in thousands Year Ending December 31, Future Minimum Payments 2018 $ 9,188 2019 9,188 2020* 87,377 Total $ 105,753 * The majority of this amount is the final balloon payment due at maturity, August 14, 2020. Capital Lease Obligations Faneuil and Phoenix lease equipment under non-cancelable capital leases. As of December 31, 2017, future minimum payments under non-cancelable capital leases with initial or remaining terms of one year or more are as follows ( in thousands Year Ending December 31, Estimated Future Payments 2018 $ 3,850 2019 2,766 2020 1,716 2021 535 2022 535 Thereafter 569 Total minimum required payments 9,971 Less: current portion of capital lease obligations (3,575 ) Less: imputed interest (666 ) Capital lease obligations, less current portion $ 5,730 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases real estate, equipment, and vehicles under noncancellable operating leases. As of December 31, 2017, future minimum rental commitments under noncancellable leases were as follows ( in thousands Year Ending December 31, Future Minimum Lease Payments 2018 $ 4,722 2019 4,098 2020 2,786 2021 1,861 2022 1,015 Thereafter 6,130 Total $ 20,612 Employment Agreements ALJ maintains employment agreements with certain key executive officers that provide for a base salary and annual bonus to be determined by the Board of Directors. The agreements also provide for termination payments, which includes base salary and performance bonus, stock options, non-competition provisions, and other terms and conditions of employment. As of December 31, 2017, termination payments related to base salary totaled $1.3 million. Surety Bonds As part of Faneuil’s normal course of operations, certain customers require surety bonds guaranteeing the performance of a contract. As of December 31, 2017, the face value of such surety bonds, which represents the maximum cash payments that Faneuil’s surety would be obligated to pay under certain circumstances of non-performance, was $29.1 million. To date, Faneuil’s surety has not made any non-performance payments. Litigation, Claims, and Assessments Faneuil, Inc. v. 3M Company Faneuil filed a complaint against 3M Company on September 22, 2016, in the Circuit Court for the City of Richmond, Virginia. The dispute arises out of a subcontract entered into between 3M and Faneuil in relation to a toll road project in Portsmouth, Virginia. Under the terms of the subcontract, Faneuil provides certain services to 3M as part of 3M’s agreement to provide services to Elizabeth River Crossing (“ERC”). After multiple attempts to resolve a dispute over unpaid invoices failed, Faneuil determined to file suit against 3M to collect on its outstanding receivables. In its complaint, Faneuil seeks recovery of $5.1 million based on three causes of action: breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. On October 14, 2016, 3M filed its answer and counterclaim against Faneuil. In its counterclaim, 3M seeks recovery in excess of $10.0 million based on three claims: breach of contract/indemnification, breach of the implied covenant of good faith and fair dealing and unjust enrichment. 3M’s counterclaim alleges it incurred approximately $3.2 million in damages payable to ERC as a result of Faneuil’s conduct and seeks indemnification of an additional $10.0 million in damages incurred as a result of continued performance under its contract with ERC. A five-day bench trial is set for April 2018. A pretrial scheduling order has been entered and the parties are engaged in substantive discovery at this time. Subsequent to filing suit against 3M, Faneuil entered into an agreement with ERC whereby ERC would become responsible for paying Faneuil directly for all services rendered from April 1, 2016, through December 31, 2016. That agreement resulted in a payment from ERC to Faneuil on December 8, 2016, which resolved a portion of the $5.1 million claim against 3M. During June 2017, ERC transitioned the services that were provided by Faneuil to an internal customer service operation. As a result of this transition, Faneuil no longer provides services to 3M or ERC. ERC continues to reimburse Faneuil for immaterial transition costs incurred by Faneuil. Faneuil believes the facts support its claims that the disputed services should be paid and that 3M’s counterclaims are without merit. Faneuil intends to vigorously prosecute its claims against 3M and to defend against 3M’s counterclaims. Although litigation is inherently unpredictable, Faneuil remains confident in its ability to collect all of its outstanding receivables from 3M. McNeil, et al. v. Faneuil, Inc. Tammy McNeil, a former Faneuil call center employee, filed a Fair Labor Standards Act collective action case against Faneuil in federal court in Newport News, Virginia in 2015. The class action asserted various timekeeping and overtime violations, which Faneuil denied. On June 6, 2017, the case was settled by the parties as part of a court-ordered mediation, for $0.3 million in damages, plus plaintiff’s attorney fees. Because the parties could not agree on the dollar amount of plaintiff’s attorney fees, both parties agreed to allow the court to determine the amount. On November 8, 2017, Faneuil received the court’s recommendation, which awarded a total of $0.7 million for plaintiff’s attorney fees and court fees. Faneuil has objected to a portion of the recommendation and has requested that the district court judge further reduce the award. Marshall v. Faneuil, Inc. On July 31, 2017, plaintiff Donna Marshall (“Marshall”), filed a proposed class action lawsuit in the Superior Court of the State of California for the County of Sacramento against Faneuil and ALJ. Marshall, a previously terminated Faneuil employee, alleges various California state law employment-related claims against Faneuil. Faneuil has answered the complaint and removed the matter to the United States District Court for the Eastern District of California; however, Marshall has recently filed a motion to remand the case back to state court. The case is in an early stage and the parties have not begun substantive discovery at this time. Faneuil believes this action is without merit and intends to defend it vigorously. Thornton v. ALJ Regional Holdings, Inc., et al. On September 21, 2016, Plaintiffs Clifford Thornton and Tracey Thornton filed a complaint in the Nevada District Court for Clark County against ALJ, Carpets, Steve Chesin, and Jess Ravich. The complaint includes claims for (1) fraud, (2) bad faith, (3) civil conspiracy, (4) unjust enrichment, (5) wrongful termination, (6) intentional infliction of emotional distress, (7) negligent infliction of emotional distress, and (8) loss of marital consortium. In connection with its pending litigation matters (including the matters described above), management has estimated the range of possible loss, including fees and expenses, to be between $1.6 million and $2.4 million; however, as management has determined that no one estimate within the range is better than another, it has accrued $1.6 million as of December 31, 2017. Other Litigation We and our subsidiaries have been named in, and from time to time may become named in, various other lawsuits or threatened actions that are incidental to our ordinary business. Litigation is inherently unpredictable. Any claims against us, whether meritorious or not, could be time-consuming, cause us to incur costs and expenses, require significant amounts of management time and result in the diversion of significant operational resources. The results of these lawsuits and actions cannot be predicted with certainty. We concluded as of December 31, 2017 that the ultimate resolution of these matters will not have a material adverse effect on our business, consolidated financial position, results of operations or cash flows. |
Equity
Equity | 3 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Equity | 9. EQUITY Common Stock Activity during the Three Months Ended December 31, 2017 ALJ’s common stock activity for the three months ended December 31, 2017 consisted of the following: • Sold 477,706 shares of common stock, at $3.14 per share, to two unaffiliated shareholders in connection with financing the Moore-Langen acquisition (Note 3); and • Issued 102,102 shares of common stock to members of ALJ’s Board of Directors as compensation for the period from July 1, 2016 to June 30, 2017. See “ Common Stock Awards Common Stock Activity during the Three Months Ended December 31, 2016 ALJ did not have any common stock activity during the three months ended December 31, 2016. Equity Incentive Plans ALJ’s equity incentive plans are broad-based, long-term programs intended to attract and retain talented employees and align stockholder and employee interests. Stock-Based Compensation. The following table sets forth the total stock-based compensation expense included in ALJ’s Statements of Operations ( in thousands Three Months Ended December 31, 2017 2016 Stock options $ 191 $ 98 Common stock awards 102 85 Total stock-based compensation expense $ 293 $ 183 At December 31, 2017, ALJ had approximately $1.0 million of total unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted-average period of approximately 2.1 years. Stock Option Awards The “intrinsic value” of options is the excess of the value of ALJ stock over the exercise price of such options. The total intrinsic value of options outstanding (of which all are vested or expected to vest) was approximately $1.0 million at December 31, 2017. Common Stock Awards Members of ALJ’s Board of Directors receive a director compensation package that includes an annual common stock award. In connection with such awards, ALJ recorded stock-based compensation expense of |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. INCOME TAX United States Tax Reform On December 22, 2017, the President of the United States signed and enacted into law H.R. 1 (the “Tax Reform Law”). The Tax Reform Law, effective for tax years beginning on or after January 1, 2018, except for certain provisions, resulted in significant changes to existing United States tax law, including various provisions that will impact ALJ. Below is a summary of the provisions of the Tax Reform Law that management believes will be most impactful to ALJ. Federal Corporate Tax Rate Reduction. Interest Expense Limitation. Bonus Depreciation Pursuant to Accounting Standards Codification (“ASC”) Topic 740-10, “ Income Taxes |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 11. RELATED-PARTY TRANSACTIONS Harland Clarke Holdings Corp. (“Harland Clarke”), a stockholder who owns ALJ shares in excess of five percent, is a counterparty to Faneuil in two contracts. One contract provides call center services to support Harland Clarke’s banking-related products and renews annual every April. The other contract provides dispatch services for managed print operations and concluded September 30, 2017. Faneuil recognized revenue from Harland Clarke totaling $94,000 and $327,000 for the three months ended December 31, 2017 and 2016, respectively. The associated cost of revenue was $94,000 and $308,000 for the three months ended December 31, 2017 and 2016, respectively. All revenue from Harland Clarke contained similar terms and conditions as those found in other transactions of this nature entered into by ALJ and its subsidiaries. Total accounts receivable from Harland Clarke was $94,000 and $106,000 at December 31, 2017 and September 30, 2017, respectively. |
Reportable Segments and Geograp
Reportable Segments and Geographic Information | 3 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Reportable Segments and Geographic Information | 12. REPORTABLE SEGMENTS AND GEOGRAPHIC INFORMATION Reportable Segments As discussed in Note 1, ALJ has organized its business along three reportable segments (Faneuil, Carpets, and Phoenix), together with a corporate group for certain support services. ALJ’s operating segments are aligned on the basis of products, services, and industry. The Chief Operating Decision Maker (“CODM”) is ALJ’s Executive Chairman. The CODM manages the business, allocates resources to, and assesses the performance of each operating segment using information about its net revenue and segment adjusted EBITDA. ALJ defines segment adjusted EBITDA as segment net income (loss) before interest expense, provision for income taxes, depreciation and amortization expense, stock-based compensation expense, restructuring expense, acquisition-related expense, loss (gain) on sales of assets, and other non-recurring items. Such amounts are detailed in our segment reconciliation below. The accounting policies for segment reporting are the same as for ALJ as a whole. The following tables present ALJ’s segment information for the three months ended December 31, 2017 and 2016 ( in thousands Three Months Ended December 31, 2017 Faneuil Carpets Phoenix ALJ Total Net revenue $ 51,474 $ 16,650 $ 26,830 $ — $ 94,954 Segment adjusted EBITDA $ 3,711 $ (726 ) $ 4,160 $ (555 ) $ 6,590 Interest expense (2,660 ) Provision for income taxes (3,371 ) Depreciation and amortization (4,833 ) Stock-based compensation (293 ) Restructuring expenses (835 ) Acquisition-related expenses (123 ) Gain on sales of assets 207 Net loss $ (5,318 ) Three Months Ended December 31, 2016 Faneuil Carpets Phoenix ALJ Total Net revenue $ 38,051 $ 15,544 $ 24,022 $ — $ 77,617 Segment adjusted EBITDA $ 3,761 $ (47 ) $ 4,348 $ (834 ) $ 7,228 Interest expense (2,434 ) Provision for income taxes (60 ) Depreciation and amortization (3,961 ) Stock-based compensation (183 ) Restructuring expenses (31 ) Loss on sales of assets (8 ) Net income $ 551 Geographic Information Substantially all of the Company’s assets were located in the United States. Substantially all of the Company’s revenue was earned in the United States. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | 13. SUBSEQUENT EVENT ALJ issued 300,000 shares of common stock upon exercise of employee stock options at a weighted-average exercise price of $0.93 per share. |
Organization and Basis of Pre19
Organization and Basis of Presentation (Policies) | 3 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | Organization ALJ Regional Holdings, Inc. (including subsidiaries, referred to collectively in this Report as “ALJ,” the “Company” or “we”) is a holding company. ALJ’s primary assets as of December 31, 2017, were all of the outstanding capital stock of the following companies: • Faneuil, Inc. (including its subsidiaries, “Faneuil”). • Floors-N-More, LLC, dba, Carpets N’ More (“Carpets”) • Phoenix Color Corp. (including its subsidiaries, “Phoenix”). ALJ has organized its business and corporate structure along the following business segments: Faneuil, Carpets, and Phoenix. ALJ is reported as corporate overhead. |
Basis of Presentation | Basis of Presentation The interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, for interim financial information and with the instructions to the Securities and Exchange Commission, or SEC, Form 10-Q and Article 10 of SEC Regulation S-X. They do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with ALJ’s audited financial statements and notes thereto for the years ended September 30, 2017 and 2016, filed with the Securities and Exchange Commission on December 19, 2017. The Company has made estimates and judgments affecting the amounts reported in its condensed consolidated financial statements and the accompanying notes. Significant estimates and assumptions by management are used for, but are not limited to, determining the fair value of assets and liabilities, including intangible assets acquired and allocation of acquisition purchase prices, estimated useful lives, recoverability of long-lived and intangible assets, the recoverability of goodwill, the realizability of deferred tax assets, stock-based compensation, the likelihood of material loss as a result of loss contingencies, customer lives, the allowance for doubtful accounts and inventory reserves, and calculation of insurance reserves. Actual results may differ materially from estimates. The interim financial information is unaudited but reflects all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly ALJ’s results of operations and financial position for the interim period. The results of operations for the three months ended December 31, 2017, are not necessarily indicative of the results expected for future quarters or the full year. For a complete summary of ALJ’s significant accounting policies, please refer to Note 2, “Summary of Significant Accounting Policies,” included with ALJ’s audited financial statements and notes thereto for the years ended September 30, 2017 and 2016, filed with the Securities and Exchange Commission on December 19, 2017. There were no material changes to significant accounting policies during the three months ended December 31, 2017. |
Recent Accounting Standards | 2. RECENT ACCOUNTING STANDARDS Accounting Standards Adopted In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11, “ Simplifying the Measurement of Inventory (Topic 330): Simplifying the Measurement of Inventory .” The amendments in ASU 2015-11 require an entity to measure inventory at the lower of cost or net realizable value. The amendments do not apply to inventory that is measured using last-in, first out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. ASU 2015-11 should be applied prospectively. ALJ adopted ASU 2015-11 The standard did not have a significant impact on ALJ’s consolidated financial statements. Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers Principal versus Agent Considerations (Reporting Revenue Gross versus Net), Identifying Performance Obligations and Licensing, Narrow-Scope Improvements and Practical Expedients,” 2017-10, Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services. ASU 2014-09 will be effective for ALJ on October 1, 2019 as ALJ has determined that it will not adopt ASU 2014-09 early. ASU 2014-09 allows for two methods of adoption: (a) “full retrospective” adoption, meaning the standard is applied to all periods presented, or (b) “modified retrospective” adoption, meaning the cumulative effect of applying ASU 2014-09 is recognized as an adjustment to the opening retained earnings balance in the year of adoption. ALJ has not yet determined which method it will adopt. As the new standard will supersede substantially all existing revenue guidance, it could impact the timing of ALJ’s revenue and cost of revenue recognition across all business segments. ALJ has formed a project team and has engaged an outside revenue recognition consultant who has completed a revenue recognition adoption roadmap that includes three phases. Phase I is the identification, documentation, and preliminary analysis of how ALJ currently accounts for revenue transactions compared to the revenue accounting required under the new standard. Phase I is expected to be completed in early 2018. Phase II includes a more detailed analysis, including the development of revenue recognition models, data analysis, analyzing implementation options, and finalizing a transition method. Phase II is expected to be completed in mid-2018. Phase III includes identification of system requirements, changes to internal controls and business processes, and final implementation. Phase III is expected to be completed in mid-2019. Because of the nature of the work that remains, at this time we are unable to reasonably estimate the impact of adoption on our consolidated financial statements. ALJ’s evaluation of the financial impact and related disclosure of the new standard will likely extend over several future reporting periods. In February 2016, the FASB issued ASU 2016-02, “ Leases ASU 2016-02 requires lessees to recognize a right-of-use asset and corresponding lease liability for all leases with terms of more than 12 months. Recognition, measurement, and presentation of expenses will depend on classification as either a finance or operating lease. ASU 2016-02 also requires certain quantitative and qualitative disclosures. The provisions of ASU 2016-02 should be applied on a modified retrospective basis. ASU 2016-02 will be effective for ALJ on October 1, 2020 as ALJ has determined that it will not adopt ASU 2016-02 early. The adoption of ASU 2016-02 will result in a material increase to the Company’s consolidated balance sheets for lease liabilities and right-of-use assets. The Company is currently evaluating the other effects the adoption of ASU 2016-02 will have on its consolidated financial statements and related disclosures. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Printing Components Business [Member] | |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed on Acquisition Date and Purchase Price Details | The following schedule reflects the estimated fair value of assets acquired and liabilities assumed on the Purchase Date and the purchase price details ( in thousands Purchase Price Balance Sheet Caption Allocation Total current assets $ 1,767 Fixed assets 2,273 Identified intangible asset - supply agreement 4,700 Goodwill 1,408 Total assets 10,148 Total current liabilities (148 ) Purchase price $ 10,000 Break Out of Components of Purchase Price Consideration Term loan $ 7,500 Common stock issued 1,500 Cash received from exercise of stock option 1,000 Purchase price $ 10,000 |
CMO Business [Member] | |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed on Acquisition Date and Purchase Price Details | The following schedule reflects the final fair value of assets acquired and liabilities assumed on the CMO Business Purchase Date and the purchase price details ( in thousands Purchase Price Balance Sheet Caption Allocation Total current assets $ 3,947 Fixed assets 553 Identified intangible assets: Customer relationships 3,790 Supply agreements/contract backlog 5,418 Non-compete agreements 250 Goodwill 1,547 Total assets 15,505 Total current liabilities (2,760 ) Purchase price $ 12,745 Break Out of Components of Purchase Price Consideration Line of credit $ 5,500 Common stock issued 4,708 Cash 2,537 Purchase price $ 12,745 |
Summary of Revenue and Earnings Included in Consolidated Statement of Income | The following is a summary of CMO Business revenue and earnings included in the Company’s consolidated statement of operations for the three months ended December 31, 2017 ( in thousands Income Statement Caption Amount Revenue $ 8,526 Operating loss (221 ) |
Concentration Risks (Tables)
Concentration Risks (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Sales Revenue, Segment [Member] | Faneuil [Member] | |
Schedule of Concentration Percentage of Different Customers | Faneuil Three Months Ended December 31, 2017 2016 Customer A 14.1 % 18.3 % Customer B 14.1 15.9 Customer C ** 11.3 ** Less than 10% of Faneuil net revenue. |
Sales Revenue, Segment [Member] | Carpets [Member] | |
Schedule of Concentration Percentage of Different Customers | Carpets Three Months Ended December 31, 2017 2016 Customer A 26.8 % 29.4 % Customer B 25.1 29.0 Customer C 24.9 16.6 |
Sales Revenue, Segment [Member] | Phoenix [Member] | |
Schedule of Concentration Percentage of Different Customers | Phoenix Three Months Ended December 31, 2017 2016 Customer A 18.9 % ** Customer B 16.1 21.1 % Customer C 10.5 ** Customer D ** 14.5 ** Less than 10% of Phoenix net revenue. |
Inventory Purchases [Member] | Carpets [Member] | |
Schedule of Concentration Percentage of Different Customers | Carpets Three Months Ended December 31, 2017 2016 Supplier A 23.5 % 13.0 % Supplier B 13.9 ** Supplier C 12.6 ** ** Less than 10% of Carpets inventory purchases. |
Inventory Purchases [Member] | Phoenix [Member] | |
Schedule of Concentration Percentage of Different Customers | Phoenix Three Months Ended December 31, 2017 2016 Supplier A 29.4 % 21.9 % Supplier B 12.9 11.2 |
Composition of Certain Financ22
Composition of Certain Financial Statement Captions (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Accounts Receivable | The following table summarizes accounts receivable at the end of each reporting period ( in thousands December 31, September 30, 2017 2017 Accounts receivable $ 52,804 $ 47,216 Unbilled receivables 3,723 3,071 Accounts receivable 56,527 50,287 Less: Allowance for doubtful accounts (987 ) (830 ) Accounts receivable, net $ 55,540 $ 49,457 |
Summary of Inventories | The following table summarizes inventories at the end of each reporting period ( in thousands December 31, September 30, 2017 2017 Raw materials $ 3,781 $ 3,127 Semi-finished goods/work in process 3,905 4,064 Finished goods 2,510 2,378 Inventories 10,196 9,569 Less: Allowance for obsolete inventory (293 ) (193 ) Inventories, net $ 9,903 $ 9,376 |
Summary of Property and Equipment | The following table summarizes property and equipment at the end of each reporting period ( in thousands December 31, September 30, 2017 2017 Machinery and equipment $ 24,023 $ 22,753 Building and improvements 16,323 15,593 Software 15,034 12,276 Computer and office equipment 10,511 10,344 Land 9,267 9,167 Leasehold improvements 9,175 8,997 Furniture and fixtures 3,599 3,595 Vehicles 235 229 Construction in process 553 136 Property and equipment 88,720 83,090 Less: Accumulated depreciation and amortization (31,985 ) (28,755 ) Property and equipment, net $ 56,735 $ 54,335 |
Summary of Goodwill | The following table summarizes goodwill by reportable segment at the end of each reporting period ( in thousands December 31, September 30, 2017 2017 Faneuil $ 21,276 $ 21,276 Carpets 2,555 2,555 Phoenix 32,541 31,133 Goodwill $ 56,372 $ 54,964 |
Summary of Intangible Assets | The following table summarizes identified intangible assets at the end of each reporting period ( in thousands December 31, 2017 September 30, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Customer relationships $ 34,400 $ (8,167 ) $ 26,233 $ 34,400 $ (7,446 ) $ 26,954 Trade names 10,760 (1,250 ) 9,510 10,760 (1,143 ) 9,617 Supply agreements/Contract Backlog 10,358 (777 ) 9,581 5,658 (420 ) 5,238 Non-compete agreements 3,030 (2,030 ) 1,000 3,030 (1,858 ) 1,172 Internal software 580 (406 ) 174 580 (382 ) 198 Totals $ 59,128 $ (12,630 ) $ 46,498 $ 54,428 $ (11,249 ) $ 43,179 |
Summary of Expected Future Amortization Expense | The following table presents expected future amortization expense for the remainder in thousands Estimated Future Amortization 2018 $ 4,101 2019 5,099 2020 4,800 2021 4,485 2022 4,067 Thereafter 23,946 $ 46,498 |
Summary of Current and Noncurrent Term Loan Payables | The following table summarizes ALJ’s line of credit, and current and noncurrent term loan payables at the end of each reporting period ( in thousands December 31, September 30, 2017 2017 Line of credit: Line of credit $ 13,662 $ 5,500 Less: deferred loan costs (126 ) (170 ) Line of credit, net of deferred loan costs 13,536 5,330 Current portion of term loan: Current portion of term loan $ 9,188 $ 12,764 Less: deferred loan costs (992 ) (916 ) Current portion of term loan, net of deferred loan costs 8,196 11,848 Term loan payable, less current portion: Term loan payable, less current portion 82,903 78,254 Less: deferred loan costs (1,428 ) (1,501 ) Term loan payable, less current portion, net of deferred loan costs $ 81,475 $ 76,753 |
Summary of Accrued Expenses | The following table summarizes accrued expenses at the end of each reporting period ( in thousands December 31, September 30, 2017 2017 Accrued compensation and related taxes $ 8,524 $ 7,370 Rebates payable 2,042 2,014 Legal and other 1,092 1,466 Interest payable 799 651 Medical and benefit-related payables 501 431 Accrued board of director fees 260 370 Sales tax payable 217 151 Deferred rent 201 208 Total accrued expenses $ 13,636 $ 12,661 |
(Loss) Earnings Per Share (Tabl
(Loss) Earnings Per Share (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted (Loss) Earnings Per Common Share | ALJ computed basic and diluted (loss) earnings per common share for each period as follows ( in thousands, except per share amounts Three Months Ended December 31, 2017 2016 Net (loss) income $ (5,318 ) $ 551 Weighted average shares of common stock outstanding - basic 37,577 34,575 Potentially dilutive effect of options to purchase common stock — 1,137 Weighted average shares of common stock outstanding – diluted 37,577 35,712 Basic (loss) earnings per share of common stock $ (0.14 ) $ 0.02 Diluted (loss) earnings per share of common stock $ (0.14 ) $ 0.02 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Financing Agreement and Amendments | The Financing Agreement and three amendments are summarized below ( in thousands Description Use of Proceeds Origination Date Interest Rate * Quarterly Payments Balance at December 31, 2017 Term Loan: Financing Agreement Phoenix acquisition August 2015 7.99% to 8.30% $ 1,969 $ 76,766 First Amendment Color Optics acquisition July 2016 7.99% to 8.30% 187 8,280 Third Amendment Printing Components Business acquisition October 2017 7.99% to 8.30% 141 7,045 Totals $ 2,297 $ 92,091 Line of Credit: Cerberus/PNC Revolver Working Capital August 2015 10.00% to 10.25% $ — $ 8,162 Second Amendment CMO Business acquisition May 2017 7.99% to 8.30% — 5,500 Totals $ — $ 13,662 * Range of annual interest rates accrued during the three months ended December 31, 2017. |
Schedule of Estimated Future Minimum Payments under Debt | Cerberus Debt Estimated Future Minimum Payments Estimated future minimum payments are as follows ( in thousands Year Ending December 31, Future Minimum Payments 2018 $ 9,188 2019 9,188 2020* 87,377 Total $ 105,753 * The majority of this amount is the final balloon payment due at maturity, August 14, 2020. |
Schedule of Future Minimum Lease Payments under Non-Cancelable Capital Leases | As of December 31, 2017, future minimum payments under non-cancelable capital leases with initial or remaining terms of one year or more are as follows ( in thousands Year Ending December 31, Estimated Future Payments 2018 $ 3,850 2019 2,766 2020 1,716 2021 535 2022 535 Thereafter 569 Total minimum required payments 9,971 Less: current portion of capital lease obligations (3,575 ) Less: imputed interest (666 ) Capital lease obligations, less current portion $ 5,730 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Commitments under Noncancellable Leases | As of December 31, 2017, future minimum rental commitments under noncancellable leases were as follows ( in thousands Year Ending December 31, Future Minimum Lease Payments 2018 $ 4,722 2019 4,098 2020 2,786 2021 1,861 2022 1,015 Thereafter 6,130 Total $ 20,612 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Summary of Total Stock-Based Compensation Expense Included in Statements of Operations | The following table sets forth the total stock-based compensation expense included in ALJ’s Statements of Operations ( in thousands Three Months Ended December 31, 2017 2016 Stock options $ 191 $ 98 Common stock awards 102 85 Total stock-based compensation expense $ 293 $ 183 |
Reportable Segments and Geogr27
Reportable Segments and Geographic Information (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The following tables present ALJ’s segment information for the three months ended December 31, 2017 and 2016 ( in thousands Three Months Ended December 31, 2017 Faneuil Carpets Phoenix ALJ Total Net revenue $ 51,474 $ 16,650 $ 26,830 $ — $ 94,954 Segment adjusted EBITDA $ 3,711 $ (726 ) $ 4,160 $ (555 ) $ 6,590 Interest expense (2,660 ) Provision for income taxes (3,371 ) Depreciation and amortization (4,833 ) Stock-based compensation (293 ) Restructuring expenses (835 ) Acquisition-related expenses (123 ) Gain on sales of assets 207 Net loss $ (5,318 ) Three Months Ended December 31, 2016 Faneuil Carpets Phoenix ALJ Total Net revenue $ 38,051 $ 15,544 $ 24,022 $ — $ 77,617 Segment adjusted EBITDA $ 3,761 $ (47 ) $ 4,348 $ (834 ) $ 7,228 Interest expense (2,434 ) Provision for income taxes (60 ) Depreciation and amortization (3,961 ) Stock-based compensation (183 ) Restructuring expenses (31 ) Loss on sales of assets (8 ) Net income $ 551 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) | Oct. 02, 2017USD ($)Investor | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||
Payments to acquisition of business assets and liabilities | $ 9,000,000 | ||
Net revenue | 94,954,000 | $ 77,617,000 | |
Purchase-related legal and accounting fees | 123,000 | ||
LSC and Moore-Langen [Member] | Phoenix [Member] | |||
Business Acquisition [Line Items] | |||
Payments to acquisition of business assets and liabilities | $ 10,000,000 | ||
Printing Components Business [Member] | |||
Business Acquisition [Line Items] | |||
Maximum measurement period for estimates of assets acquired and liabilities assumed | 1 year | ||
Net revenue | 4,500,000 | ||
Printing Components Business [Member] | Selling, General and Administrative Expense [Member] | |||
Business Acquisition [Line Items] | |||
Purchase-related legal and accounting fees | $ 123,000 | ||
Printing Components Business [Member] | Executive Chairman [Member] | |||
Business Acquisition [Line Items] | |||
Proceeds from stock option exercise | $ 1,000,000 | ||
Printing Components Business [Member] | Common Stock [Member] | Private Offering [Member] | |||
Business Acquisition [Line Items] | |||
Business acquisition common stock sold, value | $ 1,500,000 | ||
Business acquisition common stock sold to number of investors | Investor | 2 | ||
Printing Components Business [Member] | Cerberus Term Loan [Member] | |||
Business Acquisition [Line Items] | |||
Proceeds from debt | $ 7,500,000 | ||
Printing Components Business [Member] | Phoenix [Member] | |||
Business Acquisition [Line Items] | |||
Business acquisition amount withheld from consideration paid | $ 1,000,000 | ||
Business acquisition withheld amount payable date | Oct. 2, 2018 | ||
CMO Business [Member] | |||
Business Acquisition [Line Items] | |||
Business acquisition, date of acquisition | May 26, 2017 |
Acquisitions - Summary of Estim
Acquisitions - Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed on CMO Business Purchase Date and Purchase Price Details (Detail) - USD ($) $ in Thousands | Oct. 02, 2017 | May 26, 2017 | Dec. 31, 2017 | Sep. 30, 2017 |
Identified intangible assets: | ||||
Goodwill | $ 56,372 | $ 54,964 | ||
Printing Components Business [Member] | ||||
Balance Sheet Caption | ||||
Total current assets | $ 1,767 | |||
Fixed assets | 2,273 | |||
Identified intangible assets: | ||||
Goodwill | 1,408 | |||
Total assets | 10,148 | |||
Total current liabilities | (148) | |||
Purchase price | 10,000 | |||
Break Out of Components of Purchase Price Consideration | ||||
Term loan | 7,500 | |||
Common stock issued | 1,500 | |||
Cash received from exercise of stock option | 1,000 | |||
Purchase price | 10,000 | |||
Line of credit | 7,500 | |||
Common stock issued | 1,500 | |||
Printing Components Business [Member] | Supply Agreements/Contract Backlog [Member] | ||||
Identified intangible assets: | ||||
Identified intangible assets | $ 4,700 | |||
CMO Business [Member] | ||||
Balance Sheet Caption | ||||
Total current assets | $ 3,947 | |||
Fixed assets | 553 | |||
Identified intangible assets: | ||||
Goodwill | 1,547 | |||
Total assets | 15,505 | |||
Total current liabilities | (2,760) | |||
Purchase price | 12,745 | |||
Break Out of Components of Purchase Price Consideration | ||||
Term loan | 5,500 | |||
Common stock issued | 4,708 | |||
Purchase price | 12,745 | |||
Line of credit | 5,500 | |||
Common stock issued | 4,708 | |||
Cash | 2,537 | |||
CMO Business [Member] | Supply Agreements/Contract Backlog [Member] | ||||
Identified intangible assets: | ||||
Identified intangible assets | 5,418 | |||
CMO Business [Member] | Customer Relationships [Member] | ||||
Identified intangible assets: | ||||
Identified intangible assets | 3,790 | |||
CMO Business [Member] | Non-compete Agreements [Member] | ||||
Identified intangible assets: | ||||
Identified intangible assets | $ 250 |
Acquisitions - Summary of Reven
Acquisitions - Summary of Revenue and Earnings Included in Consolidated Statement of Operations (Detail) - CMO Business [Member] $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 8,526 |
Operating loss | $ (221) |
Concentration Risks - Additiona
Concentration Risks - Additional Information (Detail) $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($)CustomerSegment | |
Faneuil [Member] | |
Concentration Risk [Line Items] | |
Accounts receivable | $ 8.2 |
Carpets [Member] | |
Concentration Risk [Line Items] | |
Accounts receivable | 3.1 |
Phoenix [Member] | |
Concentration Risk [Line Items] | |
Accounts receivable | $ 6.1 |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | |
Concentration Risk [Line Items] | |
Number of customers that represent more than 10% of consolidated net revenue | Customer | 0 |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Minimum [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Supplier Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Number of segments representing more than 10% supplier contribution | Segment | 2 |
Supplier Concentration Risk [Member] | Sales Revenue, Net [Member] | Maximum [Member] | Carpets [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Supplier Concentration Risk [Member] | Inventory Purchases [Member] | Minimum [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Concentration Risks - Major Cus
Concentration Risks - Major Customers and Accounts Receivable - Schedule of Concentration Percentage of Different Customers (Detail) - Sales Revenue, Segment [Member] - Customer Concentration Risk [Member] | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Customer A [Member] | Faneuil [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 14.10% | 18.30% |
Customer A [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 26.80% | 29.40% |
Customer A [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 18.90% | |
Customer B [Member] | Faneuil [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 14.10% | 15.90% |
Customer B [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 25.10% | 29.00% |
Customer B [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 16.10% | 21.10% |
Customer C [Member] | Faneuil [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.30% | |
Customer C [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 24.90% | 16.60% |
Customer C [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.50% | |
Customer D [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 14.50% |
Concentration Risks - Major C33
Concentration Risks - Major Customers and Accounts Receivable - Schedule of Concentration Percentage of Different Customers (Parenthetical) (Detail) - Maximum [Member] - Sales Revenue, Segment [Member] - Customer Concentration Risk [Member] | 3 Months Ended |
Dec. 31, 2017 | |
Faneuil [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Phoenix [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Concentration Risks - Supplier
Concentration Risks - Supplier Risk - Schedule of Concentration Percentage of Different Customers (Detail) - Supplier Concentration Risk [Member] - Inventory Purchases [Member] | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Supplier A [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 23.50% | 13.00% |
Supplier A [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 29.40% | 21.90% |
Supplier B [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13.90% | |
Supplier B [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 12.90% | 11.20% |
Supplier C [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 12.60% |
Concentration Risks - Supplie35
Concentration Risks - Supplier Risk - Schedule of Concentration Percentage of Different Customers (Parenthetical) (Detail) | 3 Months Ended |
Dec. 31, 2017 | |
Maximum [Member] | Sales Revenue, Net [Member] | Supplier Concentration Risk [Member] | Carpets [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Composition of Certain Financ36
Composition of Certain Financial Statement Captions - Summary of Accounts Receivable (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Accounts Receivable Net Current [Abstract] | ||
Accounts receivable | $ 52,804 | $ 47,216 |
Unbilled receivables | 3,723 | 3,071 |
Accounts receivable | 56,527 | 50,287 |
Less: Allowance for doubtful accounts | (987) | (830) |
Accounts receivable, net | $ 55,540 | $ 49,457 |
Composition of Certain Financ37
Composition of Certain Financial Statement Captions - Summary of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 3,781 | $ 3,127 |
Semi-finished goods/work in process | 3,905 | 4,064 |
Finished goods | 2,510 | 2,378 |
Inventories | 10,196 | 9,569 |
Less: Allowance for obsolete inventory | (293) | (193) |
Inventories, net | $ 9,903 | $ 9,376 |
Composition of Certain Financ38
Composition of Certain Financial Statement Captions - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 88,720 | $ 83,090 |
Less: Accumulated depreciation and amortization | (31,985) | (28,755) |
Property and equipment, net | 56,735 | 54,335 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 24,023 | 22,753 |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 16,323 | 15,593 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,034 | 12,276 |
Computer and Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,511 | 10,344 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,267 | 9,167 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,175 | 8,997 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,599 | 3,595 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 235 | 229 |
Construction in Process [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 553 | $ 136 |
Composition of Certain Financ39
Composition of Certain Financial Statement Captions - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||
Property and equipment depreciation and amortization expense | $ 3,452,000 | $ 2,953,000 |
Intangible asset amortization expense | 1,381,000 | $ 1,008,000 |
Faneuil [Member] | Workers' Compensation Claims [Member] | Maximum [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Self-insured amount | 500,000 | |
Faneuil [Member] | Health Insurance Claims [Member] | Maximum [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Self-insured amount | 150,000 | |
Phoenix [Member] | Workers' Compensation Claims [Member] | Maximum [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Self-insured amount | $ 500,000 |
Composition of Certain Financ40
Composition of Certain Financial Statement Captions - Summary of Goodwill (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Goodwill [Line Items] | ||
Goodwill | $ 56,372 | $ 54,964 |
Faneuil [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 21,276 | 21,276 |
Carpets [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 2,555 | 2,555 |
Phoenix [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 32,541 | $ 31,133 |
Composition of Certain Financ41
Composition of Certain Financial Statement Captions - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 59,128 | $ 54,428 |
Accumulated Amortization | (12,630) | (11,249) |
Net | 46,498 | 43,179 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 34,400 | 34,400 |
Accumulated Amortization | (8,167) | (7,446) |
Net | 26,233 | 26,954 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 10,760 | 10,760 |
Accumulated Amortization | (1,250) | (1,143) |
Net | 9,510 | 9,617 |
Supply Agreements/Contract Backlog [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 10,358 | 5,658 |
Accumulated Amortization | (777) | (420) |
Net | 9,581 | 5,238 |
Non-compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 3,030 | 3,030 |
Accumulated Amortization | (2,030) | (1,858) |
Net | 1,000 | 1,172 |
Internal Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 580 | 580 |
Accumulated Amortization | (406) | (382) |
Net | $ 174 | $ 198 |
Composition of Certain Financ42
Composition of Certain Financial Statement Captions - Summary of Expected Future Amortization Expense (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | ||
2,018 | $ 4,101 | |
2,019 | 5,099 | |
2,020 | 4,800 | |
2,021 | 4,485 | |
2,022 | 4,067 | |
Thereafter | 23,946 | |
Net | $ 46,498 | $ 43,179 |
Composition of Certain Financ43
Composition of Certain Financial Statement Captions - Summary of Current and Noncurrent Term Loan Payables (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Line of credit: | ||
Line of credit | $ 13,662 | $ 5,500 |
Less: deferred loan costs | (126) | (170) |
Line of credit, net of deferred loan costs | 13,536 | 5,330 |
Current portion of term loan: | ||
Current portion of term loan | 9,188 | 12,764 |
Less: deferred loan costs | (992) | (916) |
Current portion of term loan, net of deferred loan costs | 8,196 | 11,848 |
Term loan payable, less current portion: | ||
Term loan payable, less current portion | 82,903 | 78,254 |
Less: deferred loan costs | (1,428) | (1,501) |
Term loan payable, less current portion, net of deferred loan costs | $ 81,475 | $ 76,753 |
Composition of Certain Financ44
Composition of Certain Financial Statement Captions - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Accrued Liabilities Current [Abstract] | ||
Accrued compensation and related taxes | $ 8,524 | $ 7,370 |
Rebates payable | 2,042 | 2,014 |
Legal and other | 1,092 | 1,466 |
Interest payable | 799 | 651 |
Medical and benefit-related payables | 501 | 431 |
Accrued board of director fees | 260 | 370 |
Sales tax payable | 217 | 151 |
Deferred rent | 201 | 208 |
Total accrued expenses | $ 13,636 | $ 12,661 |
(Loss) Earnings Per Share - Com
(Loss) Earnings Per Share - Computation of Basic and Diluted (Loss) Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Net (loss) income | $ (5,318) | $ 551 |
Weighted average shares of common stock outstanding - basic | 37,577 | 34,575 |
Potentially dilutive effect of options to purchase common stock | 1,137 | |
Weighted average shares of common stock outstanding - diluted | 37,577 | 35,712 |
Basic (loss) earnings per share of common stock | $ (0.14) | $ 0.02 |
Diluted (loss) earnings per share of common stock | $ (0.14) | $ 0.02 |
(Loss) Earnings Per Share - Add
(Loss) Earnings Per Share - Additional Information (Detail) | 3 Months Ended |
Dec. 31, 2017shares | |
Stock Options to Purchase Common Stock [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Stock options to purchase shares of common stock excluded from computation of diluted earnings per common share | 1,914,000 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Aug. 13, 2018 | Dec. 31, 2017 | Aug. 31, 2015 |
Debt Instrument [Line Items] | |||
Debt instrument maturity date | Aug. 14, 2020 | ||
Cerberus Debt [Member] | |||
Debt Instrument [Line Items] | |||
Unused borrowing capacity | $ 10,800,000 | ||
Term Loan [Member] | Cerberus Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 105,000,000 | ||
Annual principal payments as percentage of excess cash flow | 75.00% | ||
Excess cash flow payment | $ 4,100,000 | ||
Debt instrument maturity date | Aug. 14, 2020 | ||
Maximum payments against loan with no penalty | $ 7,000,000 | ||
Debt instrument legal and other fees | $ 300,000 | ||
Term Loan [Member] | Cerberus Term Loan [Member] | Scenario, Forecast [Member] | |||
Debt Instrument [Line Items] | |||
Prepayment penalty percentage | 1.00% | ||
Revolving Credit Facility [Member] | Cerberus/PNC Revolver [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility maximum borrowing capacity | $ 30,000,000 |
Debt - Summary of Financing Agr
Debt - Summary of Financing Agreement and Amendments (Detail) $ in Thousands | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Line of Credit [Member] | |
Debt Instrument [Line Items] | |
Balance | $ 13,662 |
Line of Credit [Member] | Cerberus/PNC Revolver [Member] | |
Debt Instrument [Line Items] | |
Use of Proceeds | Working Capital |
Origination Date | 2015-08 |
Balance | $ 8,162 |
Minimum [Member] | Line of Credit [Member] | Cerberus/PNC Revolver [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 10.00% |
Maximum [Member] | Line of Credit [Member] | Cerberus/PNC Revolver [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 10.25% |
Second Amendment [Member] | CMO Business [Member] | Line of Credit [Member] | |
Debt Instrument [Line Items] | |
Origination Date | 2017-05 |
Balance | $ 5,500 |
Second Amendment [Member] | Minimum [Member] | CMO Business [Member] | Line of Credit [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 7.99% |
Second Amendment [Member] | Maximum [Member] | CMO Business [Member] | Line of Credit [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 8.30% |
Term Loan [Member] | |
Debt Instrument [Line Items] | |
Quarterly Payments | $ 2,297 |
Balance | $ 92,091 |
Term Loan [Member] | Financing Agreement [Member] | Phoenix Acquisition [Member] | |
Debt Instrument [Line Items] | |
Origination Date | 2015-08 |
Quarterly Payments | $ 1,969 |
Balance | $ 76,766 |
Term Loan [Member] | Financing Agreement [Member] | Minimum [Member] | Phoenix Acquisition [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 7.99% |
Term Loan [Member] | Financing Agreement [Member] | Maximum [Member] | Phoenix Acquisition [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 8.30% |
Term Loan [Member] | First Amendment [Member] | Color Optics Acquisition [Member] | |
Debt Instrument [Line Items] | |
Origination Date | 2016-07 |
Quarterly Payments | $ 187 |
Balance | $ 8,280 |
Term Loan [Member] | First Amendment [Member] | Minimum [Member] | Color Optics Acquisition [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 7.99% |
Term Loan [Member] | First Amendment [Member] | Maximum [Member] | Color Optics Acquisition [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 8.30% |
Term Loan [Member] | Third Amendment [Member] | Printing Components Business [Member] | |
Debt Instrument [Line Items] | |
Origination Date | 2017-10 |
Quarterly Payments | $ 141 |
Balance | $ 7,045 |
Term Loan [Member] | Third Amendment [Member] | Minimum [Member] | Printing Components Business [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 7.99% |
Term Loan [Member] | Third Amendment [Member] | Maximum [Member] | Printing Components Business [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 8.30% |
Debt - Schedule of Estimated Fu
Debt - Schedule of Estimated Future Minimum Payments under Debt (Detail) - Cerberus Debt [Member] $ in Thousands | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |
2,018 | $ 9,188 |
2,019 | 9,188 |
2020* | 87,377 |
Total estimated future minimum payments | $ 105,753 |
Debt - Schedule of Estimated 50
Debt - Schedule of Estimated Future Minimum Payments under Debt (Parenthetical) (Detail) | 3 Months Ended |
Dec. 31, 2017 | |
Capital Leases Future Minimum Payments Due Rolling Maturity [Abstract] | |
Debt instrument maturity date | Aug. 14, 2020 |
Debt - Schedule of Future Minim
Debt - Schedule of Future Minimum Lease Payment under Non-Cancelable Capital Leases (Detail) - USD ($) | Dec. 31, 2017 | Sep. 30, 2017 |
Capital Leases Future Minimum Payments Due Rolling Maturity [Abstract] | ||
2,018 | $ 3,850,000 | |
2,019 | 2,766,000 | |
2,020 | 1,716,000 | |
2,021 | 535,000 | |
2,022 | 535,000 | |
Thereafter | 569,000 | |
Total minimum required payments | 9,971,000 | |
Less: current portion of capital lease obligations | (3,575,000) | $ (2,571,000) |
Less: imputed interest | (666,000) | |
Capital lease obligations, less current portion | $ 5,730,000 | $ 4,679,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental Commitments under Noncancellable Leases (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Operating Leases Future Minimum Payments Due Rolling Maturity [Abstract] | |
2,018 | $ 4,722 |
2,019 | 4,098 |
2,020 | 2,786 |
2,021 | 1,861 |
2,022 | 1,015 |
Thereafter | 6,130 |
Total future minimum lease payments | $ 20,612 |
Commitments and Contingencies53
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Nov. 08, 2017 | Jun. 06, 2017 | Oct. 14, 2016 | Dec. 31, 2017 | Sep. 22, 2016 | Sep. 21, 2016 |
Loss Contingencies [Line Items] | ||||||
Range of possible loss | $ 1,600,000 | |||||
Minimum [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Range of possible loss | $ 1,600,000 | |||||
Maximum [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Range of possible loss | $ 2,400,000 | |||||
Faneuil [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Recovery value on subcontract | $ 5,100,000 | |||||
Recovery of subcontract description basis | Breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. | |||||
Litigation settlement, amount of damages awarded | $ 300,000 | |||||
Litigation settlement, amount awarded for plaintiff's attorney fees and court fees | $ 700,000 | |||||
3M Company [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Recovery value on subcontract | $ 10,000,000 | |||||
Recovery of subcontract description basis | Breach of contract/indemnification, breach of the implied covenant of good faith and fair dealing and unjust enrichment. | |||||
Damages payable | 3,200,000 | |||||
Additional damages incurred | $ 10,000,000 | |||||
Surety Bonds [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Estimated maximum guarantee cash payments | $ 29,100,000 | |||||
Employment Agreements [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Total termination payments related to base salary | $ 1,300,000 |
Equity - Additional Information
Equity - Additional Information (Detail) | Oct. 02, 2017Stockholder$ / sharesshares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | Jun. 30, 2017shares |
Class of Stock [Line Items] | ||||
Total unrecognized compensation cost related to unvested stock options | $ 1,000,000 | |||
Weighted-average recognition period of unrecognized compensation cost related to unvested stock options | 2 years 1 month 6 days | |||
Stock option awards, granted | shares | 10,000 | 0 | ||
Total estimated fair value of stock options, granted | $ 15,000 | |||
Weighted average expected option life | 6 years | |||
Weighted average expected volatility rate | 48.40% | |||
Expected dividend yield | 0.00% | |||
Weighted average risk free interest rate | 2.10% | |||
Total intrinsic value of options vested or expected to vest outstanding | $ 1,000,000 | |||
Stock-based compensation expense | 293,000 | $ 183,000 | ||
Common Stock Awards [Member] | ||||
Class of Stock [Line Items] | ||||
Stock-based compensation expense | $ 102,000 | $ 85,000 | ||
Common Stock [Member] | Board of Directors [Member] | ||||
Class of Stock [Line Items] | ||||
Stock issued as compensation | shares | 102,102 | |||
Moore-Langen [Member] | Common Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Business acquisition common stock issued, shares | shares | 477,706 | |||
Business acquisition common stock issued, per shares | $ / shares | $ 3.14 | |||
Business acquisition common stock sold to number of shareholders | Stockholder | 2 |
Equity - Summary of Total Stock
Equity - Summary of Total Stock-Based Compensation Expense Included in Statements of Operations (Detail) - USD ($) | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 293,000 | $ 183,000 |
Stock Options [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 191,000 | 98,000 |
Common Stock Awards [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 102,000 | $ 85,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | Sep. 27, 2017 | Dec. 31, 2023 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Jun. 30, 2018 |
Income Taxes Disclosure [Line Items] | ||||||
Federal statutory income tax rate | 35.00% | |||||
Income tax rate reconciliation deductions interest expense | 30.00% | |||||
Percentage of bonus depreciation for eligible property placed in service allowed for immediate deduction | 100.00% | |||||
Property eligibility for bonus depreciation with longer production period | Jan. 1, 2023 | |||||
Change in tax rate income tax expense benefit | $ 4.1 | |||||
Scenario, Forecast [Member] | ||||||
Income Taxes Disclosure [Line Items] | ||||||
Federal statutory income tax rate | 21.00% | 21.00% | 28.10% | |||
Percentage of eligible property placed in service allowed for immediate deduction | 100.00% |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Detail) - Harland Clarke Holdings Corp. ("Harland Clarke") [Member] | 3 Months Ended | ||
Dec. 31, 2017USD ($)Contract | Dec. 31, 2016USD ($) | Sep. 30, 2017USD ($) | |
Related Party Transaction [Line Items] | |||
Number of contract | Contract | 2 | ||
Number of call center services contract | Contract | 1 | ||
Managed print services contract maturity | Sep. 30, 2017 | ||
Revenue recognized | $ 94,000 | $ 327,000 | |
Cost of revenue | 94,000 | $ 308,000 | |
Accounts receivable | $ 94,000 | $ 106,000 | |
Minimum [Member] | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 5.00% |
Reportable Segments and Geogr58
Reportable Segments and Geographic Information - Additional Information (Detail) | 3 Months Ended |
Dec. 31, 2017Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Reportable Segments and Geogr59
Reportable Segments and Geographic Information - Summary of Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Net revenue | $ 94,954 | $ 77,617 |
Segment adjusted EBITDA | 6,590 | 7,228 |
Interest expense | (2,660) | (2,434) |
Provision for income taxes | (3,371) | (60) |
Depreciation and amortization | (4,833) | (3,961) |
Stock-based compensation | (293) | (183) |
Restructuring expenses | (835) | (31) |
Acquisition-related expenses | (123) | |
Gain (loss) on sales of assets | 207 | (8) |
Net Income (loss) | (5,318) | 551 |
Operating Segments [Member] | Faneuil [Member] | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 51,474 | 38,051 |
Segment adjusted EBITDA | 3,711 | 3,761 |
Operating Segments [Member] | Carpets [Member] | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 16,650 | 15,544 |
Segment adjusted EBITDA | (726) | (47) |
Operating Segments [Member] | Phoenix [Member] | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 26,830 | 24,022 |
Segment adjusted EBITDA | 4,160 | 4,348 |
ALJ [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment adjusted EBITDA | $ (555) | $ (834) |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Details) - Common Stock [Member] | 3 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Subsequent Event [Line Items] | |
Shares issued upon exercise of employee stock options | shares | 300,000 |
Weighted-average exercise price of employee stock options | $ / shares | $ 0.93 |