Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2012 | Dec. 28, 2012 | Mar. 31, 2012 | ||
Document And Entity Information [Abstract] | |||||
Document Type | 10-K | ||||
Amendment Flag | TRUE | ||||
Document Period End Date | 30-Sep-12 | ||||
Document Fiscal Year Focus | 2012 | ||||
Document Fiscal Period Focus | FY | ||||
Trading Symbol | BASI | ||||
Entity Registrant Name | BIOANALYTICAL SYSTEMS INC | ||||
Entity Central Index Key | 720154 | ||||
Current Fiscal Year End Date | -21 | ||||
Entity Filer Category | Smaller Reporting Company | ||||
Entity Common Stock, Shares Outstanding | 7,638,738 | ||||
Entity Public Float | $7,402 | ||||
Entity Voluntary Filers | No | ||||
Entity Well-known Seasoned Issuer | No | ||||
Entity Current Reporting Status | Yes | ||||
Amendment Description | Explanatory Note | ||||
Bioanalytical Systems Inc. ("we", "us", "our", or the "Company") is filing this Amendment on Form 10-K/A (this "Amendment") to amend our Annual Report on Form 10-K for the fiscal year ended September 30, 2012, originally filed with the Securities and Exchange Commission (the "SEC") on December 31, 2012 (the "Original Filing"). The Amendment restates our consolidated financial statements and related dosclosures for the fiscal years ended September 30, 2012 and 2011. This Amendment also amends certain other Items in the Original Filing, as listed in "Items Amended in this Amendment" below, as a result of the restatements. Details of the impact of these restatements are discussed below and in Note 3 to the accompanying consolidated financial statements and in Management's Discussion and Analysis of Financial Condition and Results of Operations. | |||||
Restatement Background | |||||
In August 2013, we announced a delay in filing our Form 10-Q for the three and nine months ended June 30, 2013 until management resolved a complex accounting issue related to the accounting treatment for our outstanding warrants. In the same month, we announced that investors should no longer rely upon our previously issued consolidated financial statements and the related independent auditors' reports for the fiscal years ended September 30, 2012 and 2011, or the quarterly financial statements for the first two quarters of fiscal 2013, or any earnings releases relating to these periods, because of errors in such financial statements. | |||||
As a result of the identification of such errors, we have undertaken a comprehensive review of our previously filed consolidated financial statements. We concluded that the warrants issued in connection with our public offering in May 2011 were incorrectly accounted for as equity and the fair value of those warrants should have been recorded as a liability. As a result, we have restated our previously reported consolidated financial statements for the years ended September 30, 2012 and 2011, as well as the condensed consolidated financial statements for the three and six months ended December 31, 2012 and March 31, 2013. | |||||
Internal Control Consideration | |||||
Our management has determined that there was a control deficiency in our internal control over financial reporting that constitutes a material weakness, as discussed in Part II - Item 9A of this Amendment. A material weakness is a control deficiency, or combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim condensed consolidated financial statements will not be prevented or detected on a timely basis. For a discussion of management's consideration of our disclosure controls and procedures, internal control over financial reporting and the material weakness identified, see Part II - Item 9A included in this Amendment. | |||||
Items Amended in This Amendment | |||||
For the convenience of the reader, this Amendment sets forth the Original Filing, in its entirety, as modified and superseded where necessary to reflect the restatement. The following items in the Original Filing have been amended as a result of, and to reflect, the restatement: | |||||
· | Part I - Item 1A. Risk Factors; | ||||
· | Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations; | ||||
· | Part II - Item 8. Financial Statements and Supplementary Data; and | ||||
· | Part II - Item 9A. Controls and Procedures. | ||||
In accordance with applicable SEC rules, this Amendment includes new certifications required by Rule 13a-14 under the Securities and Exchange Act of 1934, as amended ("Exchange Act"), dated as of the filing date of this Amendment. | |||||
We have not updated items in this Amendment to reflect events occurring after the Original Filing date, other than those associated with the restatement of our consolidated financial statements. |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2012 | Sep. 30, 2011 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $721 | $2,963 |
Accounts receivable | ||
Trade | 3,366 | 4,073 |
Unbilled revenues and other | 921 | 1,116 |
Inventories | 1,656 | 1,636 |
Prepaid expenses | 228 | 585 |
Total current assets | 6,892 | 10,373 |
Property and equipment, net | 18,628 | 20,399 |
Goodwill | 1,383 | 1,383 |
Intangible assets, net | 54 | |
Debt issue costs, net | 18 | 75 |
Other assets | 54 | 62 |
Total assets | 26,975 | 32,346 |
Current liabilities: | ||
Accounts payable | 3,934 | 1,764 |
Accrued expenses | 2,067 | 1,762 |
Customer advances | 3,012 | 3,571 |
Income tax accruals | 17 | 56 |
Revolving line of credit | 1,444 | 1,346 |
Fair value of warrant liability | 1,213 | 1,286 |
Current portion of capital lease obligation | 330 | 613 |
Current portion of long-term debt | 583 | 735 |
Total current liabilities | 12,600 | 11,133 |
Capital lease obligation, less current portion | 739 | 1,071 |
Long-term debt, less current portion | 5,259 | 5,842 |
Stockholders' equity: | ||
Preferred shares, authorized 1,000,000 shares, no par value: 1,335 Series A shares at $1,000 stated value issued and outstanding at September 30, 2012 and 2,135 at September 30, 2011 | 1,335 | 2,135 |
Common shares, no par value: Authorized 19,000,000 shares; 7,638,738 issued and outstanding at September 30, 2012 and 6,945,631 at September 30, 2011 | 1,871 | 1,698 |
Additional paid-in capital | 19,635 | 18,592 |
Accumulated deficit | -14,493 | -8,176 |
Accumulated other comprehensive income | 29 | 51 |
Total shareholders' equity | 8,377 | 14,300 |
Total liabilities and shareholders' equity | 26,975 | 32,346 |
Series A Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred shares, authorized 1,000,000 shares, no par value: 1,335 Series A shares at $1,000 stated value issued and outstanding at September 30, 2012 and 2,135 at September 30, 2011 | $1,335 | $2,135 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2012 | Sep. 30, 2011 |
Common stock, no par value | ||
Common stock, shares authorized | 19,000,000 | 19,000,000 |
Common stock, shares issued | 7,638,738 | 6,945,631 |
Common stock, shares outstanding | 7,638,738 | 6,945,631 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, no par value | ||
Preferred stock, shares issued | 1,335 | 2,135 |
Preferred stock, shares outstanding | 1,335 | 2,135 |
Preferred stock, stated value per share | $1,000 | $1,000 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) [Abstract] | ||
Service revenue | $21,312 | $25,613 |
Product revenue | 6,896 | 7,531 |
Total revenue | 28,208 | 33,144 |
Cost of service revenue | 18,472 | 19,679 |
Cost of product revenue | 2,898 | 2,959 |
Total cost of revenue | 21,370 | 22,638 |
Gross profit | 6,838 | 10,506 |
Operating expenses: | ||
Selling | 3,263 | 3,121 |
Research and development | 542 | 534 |
General and administrative | 5,524 | 5,564 |
Total operating expenses | 9,329 | 9,219 |
Restructuring charges | 3,195 | |
Operating income (loss) | -5,686 | 1,287 |
Interest expense | -714 | -706 |
Change in fair value of warrant liability - decrease | 73 | 1,759 |
Other income | 12 | 12 |
Income (loss) before income taxes | -6,315 | 2,352 |
Income tax expense | 2 | 50 |
Net income (loss) | -6,317 | 2,302 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | -22 | -49 |
Comprehensive income (loss) | ($6,339) | $2,253 |
Basic net loss per share | ($0.88) | ($0.74) |
Diluted net loss per share | ($0.88) | ($0.74) |
Weighted common shares outstanding: | ||
Basic | 7,158 | 5,667 |
Diluted | 7,158 | 5,667 |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) | Total | Preferred Shares [Member] | Common Shares [Member] | Additional paid-in capital [Member] | Accumulated deficit [Member] | Accumulated other comprehensive income (loss) [Member] |
In Thousands, except Share data, unless otherwise specified | ||||||
Balance at Sep. 30, 2010 | $10,667 | $1,191 | $13,357 | ($3,981) | $100 | |
Balance, shares at Sep. 30, 2010 | 4,915,318 | |||||
Comprehensive Income (loss): | ||||||
Net income (loss) | 2,302 | 2,302 | ||||
Foreign currency translation adjustments | -49 | -49 | ||||
Stock based compensation expense | 153 | 153 | ||||
Issuance of preferred shares, net of issuance costs of $900,281 | 4,606 | 5,506 | -900 | |||
Issuance of preferred shares, net of issuance costs of $900,281, shares | 5,506 | |||||
Fair value attributable to warrants | -3,045 | -3,045 | ||||
Preferred stock - beneficial conversion feature | -2,461 | 2,461 | ||||
Preferred stock - deemed dividend | 5,506 | -5,506 | ||||
Preferred stock - recognition of full dividend/make-whole | -991 | -991 | ||||
Conversion of preferred shares to common shares | -3,371 | 421 | 2,950 | |||
Conversion of preferred shares to common shares, shares | -3,371 | 1,685,500 | ||||
Common shares issued for dividends/make whole payment | 657 | 86 | 571 | |||
Common stock issued for dividends/make-whole payment, shares | 344,813 | |||||
Balance at Sep. 30, 2011 | 14,300 | 2,135 | 1,698 | 18,592 | -8,176 | 51 |
Balance, shares at Sep. 30, 2011 | 2,135 | 6,945,631 | ||||
Comprehensive Income (loss): | ||||||
Net income (loss) | -6,317 | -6,317 | ||||
Foreign currency translation adjustments | -22 | -22 | ||||
Stock based compensation expense | 83 | 83 | ||||
Conversion of preferred shares to common shares | -800 | 100 | 700 | |||
Conversion of preferred shares to common shares, shares | -800 | 400,000 | ||||
Common shares issued for dividends/make whole payment | 205 | 48 | 157 | |||
Common stock issued for dividends/make-whole payment, shares | 191,607 | |||||
Direct common share purchase from Directors | 128 | 25 | 103 | |||
Direct common share purchase from Directors, shares | 101,500 | |||||
Balance at Sep. 30, 2012 | $8,377 | $1,335 | $1,871 | $19,635 | ($14,493) | $29 |
Balance, shares at Sep. 30, 2012 | 1,335 | 7,638,738 |
CONSOLIDATED_STATEMENTS_OF_SHA1
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended |
Sep. 30, 2011 | |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME [Abstract] | |
Issuance of preferred shares, issuance costs | $900,281 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
Operating activities: | ||
Net income (loss) | ($6,317) | $2,302 |
Adjustments to reconcile net income (loss) to net cash (used) provided by operating activities: | ||
Depreciation and amortization | 2,278 | 2,134 |
Employee stock compensation expense | 83 | 153 |
Change in fair value of warrant liability - decrease | -73 | -1,759 |
Provision for doubtful accounts | -15 | 16 |
Gain on interest rate swaps | -31 | |
(Gain) loss on sale of property and equipment | 451 | -9 |
Deferred income taxes | -14 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 917 | -236 |
Inventories | -20 | 37 |
Refundable income taxes | -39 | 56 |
Prepaid expenses and other assets | 414 | 17 |
Accounts payable | 2,375 | -482 |
Accrued expenses | 305 | -86 |
Customer advances | -559 | -1,010 |
Net cash (used) provided by operating activities | -200 | 1,088 |
Investing activities: | ||
Capital expenditures | -1,090 | -1,174 |
Proceeds from sale of equipment | 230 | |
Net cash used in investing activities | -860 | -1,174 |
Financing activities: | ||
Net proceeds from registered direct offering | 4,606 | |
Direct common shares purchased by interim CEO and Board of Directors | 128 | |
Payments of long-term debt | -735 | -1,756 |
Payments on revolving line of credit | -27,695 | -30,917 |
Borrowings on revolving line of credit | 27,793 | 31,068 |
Payments on capital lease obligations | -655 | -1,341 |
Net cash (used) provided by financing activities | -1,164 | 1,660 |
Effect of exchange rate changes | -18 | -33 |
Net (decrease) increase in cash and cash equivalents | -2,242 | 1,541 |
Cash and cash equivalents at beginning of year | 2,963 | 1,422 |
Cash and cash equivalents at end of year | 721 | 2,963 |
Supplemental disclosure of non-cash financing activities | ||
Preferreed stock dividends accrued, but not paid | 991 | |
Preferred stock dividends pain in common shares | -106 | -657 |
Equipment financed under capital leases | 356 | 1,888 |
Termination of capital lease obligation | $322 |
DESCRIPTION_OF_THE_BUSINESS
DESCRIPTION OF THE BUSINESS | 12 Months Ended |
Sep. 30, 2012 | |
DESCRIPTION OF THE BUSINESS [Abstract] | |
DESCRIPTION OF THE BUSINESS | 1. DESCRIPTION OF THE BUSINESS |
Bioanalytical Systems, Inc. and its subsidiaries (the "Company" or "BASi" or "we") engage in research services and other services related to pharmaceutical development. We also manufacture scientific instruments for medical research, which we sell with related software for use in industrial, governmental and academic laboratories. We conduct our businesses through our research and manufacturing facilities in Indiana. Our customers are located throughout the world. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||
Sep. 30, 2012 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
(a) | Principles of Consolidation | ||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated. | |||||||||||||
(b) | Revenue Recognition | ||||||||||||
The majority of our Bioanalytical and analytical research service contracts involve the development of analytical methods and the processing of bioanalytical samples for pharmaceutical companies and generally provide for a fixed fee for each sample processed. Revenue is recognized under the specific performance method of accounting and the related direct costs are recognized when services are performed. Our preclinical research service contracts generally consist of preclinical studies, and revenue is recognized under the proportional performance method of accounting. Revisions in profit estimates, if any, are reflected on a cumulative basis in the period in which such revisions become known. The establishment of contract prices and total contract costs involves estimates we make at the inception of the contract. These estimates could change during the term of the contract and impact the revenue and costs reported in the consolidated financial statements. Revisions to estimates have generally not been material. Research service contract fees received upon acceptance are deferred until earned, and classified within customer advances. Unbilled revenues represent revenues earned under contracts in advance of billings. | |||||||||||||
Product revenue from sales of equipment not requiring installation, testing or training is recognized upon shipment to customers. One product includes internally developed software and requires installation, testing and training, which occur concurrently. Revenue from these sales is recognized upon completion of the installation, testing and training when the services are bundled with the equipment sale. | |||||||||||||
(c) | Cash Equivalents | ||||||||||||
We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. | |||||||||||||
One or more of the financial institutions holding the Company's cash accounts are participating in the FDIC's Transaction Account Guarantee Program. Under that program, through December 31, 2010, all noninterest-bearing transaction accounts are fully guaranteed by the FDIC for the entire amount in the account. Pursuant to legislation enacted in 2010, the FDIC will fully insure all noninterest-bearing transaction accounts beginning December 31, 2010 through December 31, 2012, at all FDIC-insured institutions. | |||||||||||||
For financial institutions opting out of the FDIC's Transaction Account Guarantee Program or interest-bearing cash accounts, the FDIC's insurance limits were permanently increased to $250,000, effective July 21, 2010. At September 30, 2012, the Company did not have any cash accounts that exceeded federally insured limits. | |||||||||||||
(d) | Accounts Receivable | ||||||||||||
We perform periodic credit evaluations of our customers' financial conditions and generally do not require collateral on trade accounts receivable. We account for trade receivables based on the amounts billed to customers. Past due receivables are determined based on contractual terms. We do not accrue interest on any of our trade receivables. The allowance for doubtful accounts is determined by management based on our historical losses, specific customer circumstances, and general economic conditions. Periodically, management reviews accounts receivable and adjusts the allowance based on current circumstances and charges off uncollectible receivables when all attempts to collect have failed. Our allowance for doubtful accounts was $123 and $108 at September 30, 2012 and 2011, respectively. | |||||||||||||
A summary of activity in our allowance for doubtful accounts is as follows: | |||||||||||||
2012 | 2011 | ||||||||||||
Opening balance | $ | 108 | $ | 165 | |||||||||
Charged to expense | 84 | 13 | |||||||||||
Accounts recovered | 15 | (61 | ) | ||||||||||
Accounts written off | (84 | ) | (9 | ) | |||||||||
Ending balance | $ | 123 | $ | 108 | |||||||||
(e) | Inventories | ||||||||||||
Inventories are stated at the lower of cost or market using the first-in, first-out (FIFO) cost method of accounting. We evaluate inventories on a regular basis to identify inventory on hand that may be obsolete or in excess of current and future projected market demand. For inventory deemed to be obsolete, we provide a reserve for this inventory. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates the estimate of future demand. | |||||||||||||
(f) | Property and Equipment | ||||||||||||
We record property and equipment at cost, including interest capitalized during the period of construction of major facilities. We compute depreciation, including amortization on capital leases, using the straight-line method over the estimated useful lives of the assets, which we estimate to be: buildings and improvements, 34 to 40 years; machinery and equipment, 5 to 10 years, and office furniture and fixtures, 10 years. In our European operations, we depreciate leasehold improvements, using the straight-line method, over 7 years, corresponding to the terms of the operating lease for the European facility. Depreciation expense was $2,217 in fiscal 2012 and $2,085 in fiscal 2011. Expenditures for maintenance and repairs are expensed as incurred. | |||||||||||||
Property and equipment, net, as of September 30, 2012 and 2011 consisted of the following: | |||||||||||||
2012 | 2011 | ||||||||||||
Land and improvements | $ | 914 | $ | 527 | |||||||||
Buildings and improvements | 21,278 | 21,433 | |||||||||||
Machinery and equipment | 19,496 | 22,361 | |||||||||||
Office furniture and fixtures | 701 | 949 | |||||||||||
Construction in progress | 35 | 493 | |||||||||||
42,424 | 45,763 | ||||||||||||
Less: accumulated depreciation | (23,796 | ) | (25,364 | ) | |||||||||
Net property and equipment | $ | 18,628 | $ | 20,399 | |||||||||
(g) | Long-Lived Assets including Goodwill | ||||||||||||
Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized of the amount by which the carrying amount of the asset exceeds the fair value of the asset. | |||||||||||||
We carry goodwill at cost. Other intangible assets with definite lives are stated at cost and are amortized on a straight-line basis over their estimated useful lives. All intangible assets acquired that are obtained through contractual or legal right, or are capable of being separately sold, transferred, licensed, rented, or exchanged, are recognized as an asset apart from goodwill. Goodwill is not amortized. | |||||||||||||
Goodwill is tested annually for impairment, and more frequently if events and circumstances indicate that the asset might be impaired. First, we can assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. We elected to bypass the qualitative assessment aspect of this guidance due to the restructuring circumstances. Then, we followed a two-step quantitative process. In the first step, we compare the fair value of each reporting unit, as computed primarily by present value cash flow calculations, to its book carrying value, including goodwill. We do not believe that market value is indicative of the true fair value of the Company mainly due to average daily trading volumes of less than 1%. If the fair value exceeds the carrying value, no further work is required and no impairment loss is recognized. If the carrying value exceeds the fair value, the goodwill of the reporting unit is potentially impaired and we would then complete step 2 in order to measure the impairment loss. In step 2, the implied fair value is compared to the carrying amount of the goodwill. If the implied fair value of goodwill is less than the carrying value of goodwill, we would recognize an impairment loss equal to the difference. The implied fair value is calculated by allocating the fair value of the reporting unit (as determined in step 1) to all of its assets and liabilities (including unrecognized intangible assets) and any excess in fair value that is not assigned to the assets and liabilities is the implied fair value of goodwill. | |||||||||||||
The discount rate, gross margin and sales growth rates are material assumptions utilized in our calculations of the present value cash flows used to estimate the fair value of the reporting units when performing the annual goodwill impairment test. Our reporting units with goodwill at September 30, 2012 are Vetronics, which is included in our Products segment, bioanalytical services and preclinical services, which are both included in our Services segment, based on the discrete financial information available which is reviewed by management. We utilize a cash flow approach in estimating the fair value of the reporting units, where the discount rate reflects a weighted average cost of capital rate. The cash flow model used to derive fair value is sensitive to the discount rate and sales growth assumptions used. | |||||||||||||
Due to the closure of the McMinnville, Oregon site, we tested for impairment of the bioanalytical business at the end of our third fiscal quarter using the cash flow approach as explained above. This test resulted in no impairment to the goodwill valuation as currently recorded on the books. | |||||||||||||
We also performed our annual impairment test for all reporting units mentioned above at September 30, 2012. Using a discount rate of 14% and a revenue growth rate of 5% for the Bioanalytical services and 0% for both the preclinical services and Vetronics units, the fair values of the reporting units described above are greater than the carrying values by approximately $3.7 million. | |||||||||||||
Considerable management judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate future cash flows. Assumptions used in our impairment evaluations, such as forecasted sales growth rates and our cost of capital or discount rate, are based on the best available market information. Changes in these estimates or a continued decline in general economic conditions could change our conclusion regarding an impairment of goodwill and potentially result in a non-cash impairment loss in a future period. The assumptions used in our impairment testing could be adversely affected by certain risks. There have been no significant events since the timing of our impairment tests that would have triggered additional impairment testing. | |||||||||||||
At September 30, 2012 and 2011, remaining recorded goodwill was $1,383, and the net balance of other intangible assets was $0 and $54, respectively. The components of intangible assets subject to amortization are as follows: | |||||||||||||
30-Sep-12 | |||||||||||||
Weighted | Gross Carrying | Accumulated | |||||||||||
average life | Amount | Amortization | |||||||||||
(years) | |||||||||||||
FDA compliant facility | 10 | $ | 302 | $ | 302 | ||||||||
30-Sep-11 | |||||||||||||
Weighted | Gross Carrying | Accumulated | |||||||||||
average life | Amount | Amortization | |||||||||||
(years) | |||||||||||||
FDA compliant facility | 10 | $ | 302 | $ | 248 | ||||||||
Amortization expense for intangible assets for fiscal years ended September 30, 2012 and 2011 was $54 and $30, respectively. As of September 30, 2012, all intangible assets have been fully amortized. | |||||||||||||
(h) | Advertising Expense | ||||||||||||
We expense advertising costs as incurred. Advertising expense was $203 and $229 for the years ended September 30, 2012 and 2011, respectively. | |||||||||||||
(i) | Stock-Based Compensation | ||||||||||||
We have a stock-based employee compensation plan and a stock-based employee and outside director compensation plan, which are described more fully in Note 10. All options granted under these plans have an exercise price equal to the market value of the underlying common shares on the date of grant. We expense the estimated fair value of stock options over the vesting periods of the grants. Our policy is to recognize expense for awards subject to graded vesting using the straight-line attribution method, reduced for estimated forfeitures. Forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates and an adjustment is recognized at that time. | |||||||||||||
We use a binomial option-pricing model as our method of valuation for share-based awards, requiring us to make certain assumptions about the future, which are more fully described in Note 10. Stock-based compensation expense for employee stock options for the years ended September 30, 2012 and 2011 was $83 and $153, respectively. | |||||||||||||
(j) | Income Taxes | ||||||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We record valuation allowances based on a determination of the expected realization of tax assets. | |||||||||||||
We may recognize the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount of the accrual for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that we believe is more likely than not to be realized upon settlement of the position. | |||||||||||||
We record interest and penalties accrued in relation to uncertain income tax positions as a component of income tax expense. Any changes in the liability for uncertain tax positions would impact our effective tax rate. We do not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months. | |||||||||||||
(k) | New Accounting Pronouncements | ||||||||||||
In May 2011, the FASB issued updated fair value measurement and disclosure guidance that clarifies how to measure fair value and requires additional disclosures regarding Level 3 fair value measurements, as well as any transfers between Level 1 and Level 2 fair value measurements. The updated accounting guidance is effective for fiscal years and interim periods beginning on or after December 15, 2011 on a prospective basis. The Company adopted this guidance in the second fiscal quarter with no material impact on the consolidated financial statements. | |||||||||||||
In June 2011, the FASB amended the manner in which an entity presents the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single, continuous statement of comprehensive income or in two separate but consecutive statements. The amendment eliminates the option to present the components of other comprehensive income as part of the statement of equity. The amendment is effective for fiscal years and interim periods beginning on or after December 15, 2011 on a retrospective basis. The adoption of this guidance will not change the previously reported amounts of comprehensive income. The Company has presented other comprehensive income on the face of the condensed consolidated statements of operations for all periods presented. | |||||||||||||
In September 2011, the FASB issued an accounting standards update that amends the two-step goodwill impairment test by permitting an entity to first assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step goodwill impairment test is unnecessary. The amendment is effective for fiscal years and interim periods beginning on or after December 15, 2011 on a prospective basis, early adoption is permitted. The Company elected to bypass the qualitative assessment aspect of this guidance due to the restructuring circumstances and performed a quantitative analysis in the third and fourth fiscal quarters of 2012. The quantitative analysis resulted in no impairment to the goodwill valuation as currently recorded on the books. | |||||||||||||
(l) | Fair Value | ||||||||||||
The provisions of the Fair Value Measurements and Disclosure Topic defines fair value, establishes a consistent framework for measuring fair value and provides the disclosure requirements about fair value measurements. This Topic also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's judgment about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: | |||||||||||||
• | Level 1 - Valuations based on quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. | ||||||||||||
• | Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. | ||||||||||||
• | Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. | ||||||||||||
We have Class A and B Warrants from the May 2011 offering that are measured at fair value on a recurring basis. We recorded these warrants as a liability determining the fair value at inception on May 11, 2011. Subsequent quarterly fair value measurements, using the Black Scholes model which is considered a level 2 measurement, are calculated with fair value changes charged to the statement of operations and comprehensive income (loss). Class B Warrants expired in May 2012 and the liability was reduced to zero. The assumptions used to compute the fair value of the warrants at September 30, 2012 and 2011 were as follows: | |||||||||||||
30-Sep-12 | 30-Sep-11 | ||||||||||||
Warrant A | Warrant A | Warrant B | |||||||||||
Risk-free interest rate | 0.41 | % | 0.86 | % | 0.08 | % | |||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||||
Volatility of the Company's common stock | 117.3 | % | 111.44 | % | 74.43 | % | |||||||
Expected life of the options (years) | 3.6 | 4.6 | 0.6 | ||||||||||
Fair value per unit | $ | 0.881 | $ | 0.844 | $ | 0.091 | |||||||
The carrying amounts for cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other assets, accounts payable and other accruals approximate their fair values because of their nature and respective duration. The fair value of the revolving credit facility and certain long-term debt is equal to their carrying values due to the variable nature of their interest rates. Our long-term fixed rate debt was initiated in February 2011 and renewed on November 1, 2012. Our interest rate swap expired under its terms in fiscal 2011. | |||||||||||||
(m) | Use of Estimates | ||||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates as part of the issuance of these consolidated financial statements include but are not limited to the determination of fair values, allowance for doubtful accounts, inventory obsolescence, deferred tax valuations, depreciation, impairment charges and stock compensation. Our actual results could differ from those estimates. | |||||||||||||
(n) | Research and Development | ||||||||||||
In fiscal 2012 and 2011, we spent $542 and $534, respectively, on research and development. Separate from our contract research services business, we maintain applications research and development to enhance our products business. | |||||||||||||
(o) | Comprehensive Income (Loss) | ||||||||||||
We report comprehensive income (loss) on our Consolidated Statements of Operations. Other comprehensive income (loss) represents changes in shareholders' equity and is comprised of foreign currency translation adjustments. | |||||||||||||
(p) | Foreign Currency | ||||||||||||
For our subsidiary outside of the United States that operates in a local currency environment, income and expense items are translated to United States dollars at the monthly average rates of exchange prevailing during the year, assets and liabilities are translated at year-end exchange rates and equity accounts are translated at historical exchange rates. Translation adjustments are accumulated in a separate component of shareholders' equity in the consolidated balance sheets and are included in the determination of comprehensive income (loss) in the consolidated statements of shareholders' equity. Transaction gains and losses are included in the determination of net income (loss) in the consolidated statements of operations and comprehensive income (loss). |
RESTATEMENT_OF_PREVIOUSLY_ISSU
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2012 | |||||||||||||||||||||||||
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS [Abstract] | |||||||||||||||||||||||||
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | 3. RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||||||||||||
In August 2013, we announced a delay in filing our Form 10-Q for the three and nine months ended June 30, 2013 until management resolved a complex accounting issue related to the accounting treatment for our outstanding warrants. In the same month, we announced that investors should no longer rely on our previously issued consolidated financial statements and the related independent auditors' reports for the fiscal years ended September 30, 2012 and 2011, or the quarterly financial statements for the first two quarters of fiscal 2013, or any earnings releases relating to these periods, because of errors in such financial statements. | |||||||||||||||||||||||||
As a result of the identification of such errors, we have undertaken a comprehensive review of our previously filed consolidated financial statements. We concluded that the warrants issued in connection with our public offering in May 2011 were incorrectly accounted for as equity and the fair value of the warrants should have been recorded as a liability. As a result, we have restated our previously reported consolidated financial statements for the years ended September 30, 2012 and 2011. The restatement adjustments resulted in a cumulative net decrease to Total shareholders' equity of $1,213 and $1,286 as of September 30, 2012 and 2011, respectively, a decrease to our previously reported net loss for the fiscal year ended September 30, 2012 of $73 and an increase in previously reported net income of $1,759 for the fiscal year ended September 30, 2011. The decrease in our net loss and increase in net income was a result of the changes in the fair value of the warrant liability that is now correctly recorded in other income (expense) as the change in fair value of warrant liability- (increase) decrease. Except as otherwise specified, all information presented in the accompanying consolidated financial statements and the related notes are presented after inclusion of all such adjustments. There was no net effect on the consolidated statements of cash flows for fiscal years 2012 and 2011 as the change in the fair value of the warrant liability is a non-cash item. | |||||||||||||||||||||||||
The following table summarizes the effects of the restatement adjustments, previously discussed, on the consolidated statements of operations and comprehensive income (loss) items for the years ended September 30: | |||||||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||||||
As Reported | Adjustment | Restated | As Reported | Adjustment | Restated | ||||||||||||||||||||
Total revenue | $ | 28,208 | $ | - | $ | 28,208 | $ | 33,144 | $ | 33,144 | |||||||||||||||
Total cost of revenue | 21,370 | - | 21,370 | 22,638 | 22,638 | ||||||||||||||||||||
Gross profit | 6,838 | - | 6,838 | 10,506 | - | 10,506 | |||||||||||||||||||
Total operating expenses | 9,329 | - | 9,329 | 9,219 | 9,219 | ||||||||||||||||||||
Restructuring charges | 3,195 | - | 3,195 | - | - | ||||||||||||||||||||
Operating income (loss) | (5,686 | ) | - | (5,686 | ) | 1,287 | - | 1,287 | |||||||||||||||||
Interest expense | (714 | ) | - | (714 | ) | (706 | ) | (706 | ) | ||||||||||||||||
Change in fair value of warrant liability - decrease | - | 73 | 73 | - | 1,759 | 1,759 | |||||||||||||||||||
Other income | 12 | - | 12 | 12 | - | 12 | |||||||||||||||||||
Income (loss) before income taxes | (6,388 | ) | 73 | (6,315 | ) | 593 | 1,759 | 2,352 | |||||||||||||||||
Income tax expense | 2 | - | 2 | 50 | 50 | ||||||||||||||||||||
Net income (loss) | (6,390 | ) | 73 | (6,317 | ) | 543 | 1,759 | 2,302 | |||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||||
Foreign currency translation adjustment | (22 | ) | - | (22 | ) | (49 | ) | - | (49 | ) | |||||||||||||||
Comprehensive income (loss) | $ | (6,412 | ) | $ | 73 | $ | (6,339 | ) | $ | 494 | $ | 1,759 | $ | 2,253 | |||||||||||
Basic EPS | $ | (0.89 | ) | $ | 0.01 | $ | (0.88 | ) | $ | (0.66 | ) | $ | (0.08 | ) | $ | (0.74 | ) | ||||||||
Diluted EPS | $ | (0.89 | ) | $ | 0.01 | $ | (0.88 | ) | $ | (0.66 | ) | $ | (0.08 | ) | $ | (0.74 | ) | ||||||||
The following table summarizes the effects of the restatement adjustments, previously discussed, on the consolidated balance sheet items as of September 30: | |||||||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||||||
As Reported | Adjustment | Restated | As Reported | Adjustment | Restated | ||||||||||||||||||||
Total assets | $ | 26,975 | $ | - | $ | 26,975 | $ | 32,346 | $ | 32,346 | |||||||||||||||
Total other current liabilities | 11,387 | - | 11,387 | 9,847 | 9,847 | ||||||||||||||||||||
Fair value of warrant liability | - | 1,213 | 1,213 | - | 1,286 | 1,286 | |||||||||||||||||||
Total current liabilities | 11,387 | 1,213 | 12,600 | 9,847 | 1,286 | 11,133 | |||||||||||||||||||
Other long-term debt | 5,998 | - | 5,998 | 6,913 | 6,913 | ||||||||||||||||||||
Total liabilities | 17,385 | 1,213 | 18,598 | 16,760 | 1,286 | 18,046 | |||||||||||||||||||
Shareholders' equity: | |||||||||||||||||||||||||
Preferred Shares | 1,335 | - | 1,335 | 2,135 | - | 2,135 | |||||||||||||||||||
Common Shares | 1,871 | - | 1,871 | 1,698 | - | 1,698 | |||||||||||||||||||
Additional paid-in capital | 20,451 | (816 | ) | 19,635 | 19,408 | (816 | ) | 18,592 | |||||||||||||||||
Accumulated deficit | (14,096 | ) | (397 | ) | (14,493 | ) | (7,706 | ) | (470 | ) | (8,176 | ) | |||||||||||||
Accumulated other comprehensive income | 29 | - | 29 | 51 | 51 | ||||||||||||||||||||
Total shareholders' equity | 9,590 | (1,213 | ) | 8,377 | 15,586 | (1,286 | ) | 14,300 | |||||||||||||||||
Total liabilities and shareholders' equity | $ | 26,975 | $ | - | $ | 26,975 | $ | 32,346 | $ | - | $ | 32,346 |
SALE_OF_PREFERRED_SHARES_AND_W
SALE OF PREFERRED SHARES AND WARRANTS | 12 Months Ended | ||||||||
Sep. 30, 2012 | |||||||||
SALE OF PREFERRED SHARES AND WARRANTS [Abstract] | |||||||||
SALE OF PREFERRED SHARES AND WARRANTS | 4. SALE OF PREFERRED SHARES AND WARRANTS (not in thousands) | ||||||||
On May 11, 2011, we completed a registered public offering of 5,506 units at a price of $1,000 per unit. Each unit consisted of one 6% Series A convertible preferred share which is convertible into 500 common shares, one Class A Warrant to purchase 250 common shares at an exercise price of $2.00 per share, and one Class B Warrant to purchase 250 common shares at an exercise price of $2.00 per share. | |||||||||
The designation, rights, preferences and other terms and provisions of the Series A preferred shares are set forth in the Certificate of Designation. Until May 11, 2014, the Series A preferred shares have a stated dividend rate of 6% per annum, payable quarterly in cash or, subject to certain conditions, in common shares or a combination of cash and common shares, at our election. After May 11, 2014, the Series A preferred shares will participate in any dividends payable upon our common shares on an "as converted" basis. If the preferred shares are converted prior to May 11, 2014, we must also pay to the converting holder in cash, or subject to certain conditions, in common shares or a combination of cash and common shares, a "make-whole" payment of $180 per $1,000 of the stated value of the preferred shares less any dividends paid prior to conversion. Class A Warrants are exercisable immediately and expire in May 2016. Class B Warrants expired in May 2012. The net proceeds from the sale of the units, after deducting the fees and expenses of the placement agent and other expenses were $4.6 million. We used the proceeds for the purchase of laboratory equipment and for working capital and general corporate purposes. | |||||||||
The holders of the preferred shares are not entitled to vote together with common shareholders unless converted to common shares. The Series A preferred shares are considered to be an equity instrument. The warrants have been accounted for as a liability and valued using the Black Scholes pricing model. The total fair value of the Class A Warrants at issuance was $1.973 million and the total fair value of the Class B Warrants at issuance was $1.072 million for a total liability of $3.045 million. The assumptions used to compute the fair value of the warrants at the time of issuance were as follows: | |||||||||
Warrant A | Warrant B | ||||||||
Risk-free interest rate | 1.87 | % | 0.18 | % | |||||
Dividend yield | 0 | % | 0 | % | |||||
Volatility of the Company's common stock | 106.91 | % | 116.01 | % | |||||
Expected life of the options (years) | 5 | 1 | |||||||
Fair value per unit | $ | 1.433 | $ | 0.779 | |||||
The Series A preferred shares were valued using the common shares available upon conversion of all preferred shares of 2,753,000 and the closing market price of our stock on May 11, 2011 of $1.86. Adding in the total possible dividend for the preferred shares of 18% over three years, or $991,080, the total calculated fair value of the preferred shares was $6.112 million. We then allocated the gross proceeds of the offering of $5.506 million to the preferred shares after deducting the fair value of the warrants described above. | |||||||||
We have also recognized a beneficial conversion feature related to the Series A preferred shares, to the extent that the conversion feature, based on the proceeds allocated to the Series A preferred shares, was in-the-money at the time they were issued. Such beneficial conversion feature amounted to approximately $2.461 million. Because the Series A preferred shares do not have a stated redemption date and may be converted by the holder at any time, the discount recognized by the allocation of proceeds to the beneficial conversion feature has been immediately charged through accumulated deficit as a deemed dividend to the holders of the Series A preferred shares in the amount of $5.506 million. This will be the only deemed distribution recorded for the Series A preferred shares included in this offering. Further, because the preferred dividends or make-whole payments are payable any time after the closing on May 11, 2011 at the option of the holder, we recognized the full value, $991,080, as a liability included in accounts payable and charged immediately through accumulated deficit. There will be no other dividends recorded for the Series A preferred shares included in this offering. | |||||||||
As of September 30, 2012, 4,171 preferred shares have been converted into 2,486,127 common shares and 135,793 common shares have been issued for quarterly preferred dividends for remaining outstanding, unconverted preferred shares. No warrants have been exercised as of September 30, 2012. At September 30, 2012, 1,335 preferred shares and 1,376,500 warrants remained outstanding. Also at September 30, 2012, $227,977 of the $991,080 in preferred dividends remains accrued in accounts payable for future preferred dividends. |
LOSS_PER_SHARE
LOSS PER SHARE | 12 Months Ended | ||||||||
Sep. 30, 2012 | |||||||||
LOSS PER SHARE [Abstract] | |||||||||
LOSS PER SHARE | 5. LOSS PER SHARE | ||||||||
We compute basic loss per share using the weighted average number of common shares outstanding. The net loss applicable to common shareholders for fiscal 2011 is the net of the net income for the year less the deemed dividend for the Series A preferred shares from the May 2011 registered direct offering described in Note 4 and less the dividends earned on the outstanding Series A preferred shares. | |||||||||
The Company has three categories of dilutive potential common shares: the Series A preferred shares issued in May 2011 in connection with the registered direct offering, the Warrants issued in connection with the same offering in May 2011, and shares issuable upon exercise of options. We compute diluted earnings per share using the if-converted method for preferred stock and the treasury stock method for stock options and warrants. Shares issuable upon exercise of options were not considered in computing diluted earnings per share for the fiscal years ended September 30, 2012 and 2011 because they were anti-dilutive. Warrants for 1,376,500 and 2,753,000 common shares and 936,000 and 2,753,000 common shares issuable upon conversion of preferred shares were not considered in computing diluted earnings per share for fiscal 2012 and 2011, respectively, because they were also anti-dilutive. | |||||||||
The following table reconciles our computation of basic net loss per share to diluted net loss per share: | |||||||||
Years Ended | |||||||||
September 30, | |||||||||
2012 | 2011 | ||||||||
(Restated) | (Restated) | ||||||||
Basic net loss per share: | |||||||||
Net income (loss) | $ | (6,317 | ) | $ | 2,302 | ||||
Less: Deemed dividend for Series A Preferred Shares | - | (5,506 | ) | ||||||
Less: Preferred dividend | - | (991 | ) | ||||||
Net loss applicable to common shareholders | $ | (6,317 | ) | $ | (4,195 | ) | |||
Weighted average common shares outstanding | 7,158 | 5,667 | |||||||
Basic net loss per share | $ | (0.88 | ) | $ | (0.74 | ) | |||
Diluted net loss per share: | |||||||||
Net loss applicable to common shareholders | $ | (6,317 | ) | $ | (4,195 | ) | |||
Weighted average common shares outstanding | 7,158 | 5,667 | |||||||
Diluted net loss per share | $ | (0.88 | ) | $ | (0.74 | ) |
INVENTORIES
INVENTORIES | 12 Months Ended | ||||||||
Sep. 30, 2012 | |||||||||
INVENTORIES [Abstract] | |||||||||
INVENTORIES | 6. INVENTORIES | ||||||||
Inventories at September 30 consisted of the following: | |||||||||
2012 | 2011 | ||||||||
Raw materials | $ | 1,407 | $ | 1,352 | |||||
Work in progress | 283 | 379 | |||||||
Finished goods | 276 | 309 | |||||||
$ | 1,966 | $ | 2,040 | ||||||
Obsolescence reserve | (310 | ) | (404 | ) | |||||
$ | 1,656 | $ | 1,636 |
LEASE_ARRANGEMENTS
LEASE ARRANGEMENTS | 12 Months Ended | ||||||||||||
Sep. 30, 2012 | |||||||||||||
LEASE ARRANGEMENTS [Abstract] | |||||||||||||
LEASE ARRANGEMENTS | 7. LEASE ARRANGEMENTS | ||||||||||||
The total amount of equipment capitalized under capital lease obligations as of September 30, 2012 and 2011 was $5,778 and $6,222, respectively. Accumulated amortization on capital leases at September 30, 2012 and 2011 was $4,775 and $4,086, respectively. Amortization of assets acquired through capital leases is included in depreciation expense. | |||||||||||||
During fiscal 2012, we added $356 in computer equipment through new capital lease arrangements. In fiscal 2011, we added $1,888 in equipment to our U.S. and U.K. bioanalytical laboratories through new capital lease arrangements. Due to restructuring activities outlined in Note 14, we terminated a capital lease for laboratory equipment in the UK. The activity resulted in a liability reduction of $322. Future minimum lease payments on capital leases at September 30, 2012 for the next five years are as follows: | |||||||||||||
Principal | Interest | Total | |||||||||||
2013 | $ | 330 | $ | 58 | $ | 388 | |||||||
2014 | 268 | 39 | 307 | ||||||||||
2015 | 259 | 22 | 281 | ||||||||||
2016 | 208 | 6 | 214 | ||||||||||
2017 | 4 | - | 4 | ||||||||||
$ | 1,069 | $ | 125 | $ | 1,194 | ||||||||
We lease office space and equipment under noncancelable operating leases that terminate at various dates through 2016. The UK building lease expires in 2023 but includes an opt out provision after 7 years, or in fiscal 2015. Certain of these leases contain renewal options. Total rental expense under these leases was $1,284 and $441 in fiscal 2012 and 2011, respectively. The increase in fiscal 2012 is due to the accrual in restructuring for the UK building lease through the opt out date. | |||||||||||||
Future minimum lease payments for the following fiscal years under operating leases at September 30, 2012 are as follows: | |||||||||||||
2013 | $ | 371 | |||||||||||
2014 | 370 | ||||||||||||
2015 | 223 | ||||||||||||
2016 | 13 | ||||||||||||
$ | 977 |
DEBT_ARRANGEMENTS
DEBT ARRANGEMENTS | 12 Months Ended | ||||||||
Sep. 30, 2012 | |||||||||
DEBT ARRANGEMENTS [Abstract] | |||||||||
DEBT ARRANGEMENTS | 8. DEBT ARRANGEMENTS | ||||||||
Long-term debt consisted of the following at September 30: | |||||||||
2012 | 2011 | ||||||||
Mortgage note payable to a bank, payable in monthly principal and interest installments of $40. Interest is fixed at 4.1%. Collateralized by underlying property. Due October, 2013. (b) | $ | 3,236 | $ | 3,573 | |||||
Mortgage note payable to a bank, payable in monthly principal and interest installments of $17. Interest is fixed at 4.1%. Collateralized by underlying property. Due October, 2013. (b) | 1,532 | 1,674 | |||||||
Replacement note payable to a bank, payable in monthly principal installments of $14 plus interest. The interest rate is 4.5%. Collateralized by West Lafayette and Evansville properties. Due October, 2013. (a) (b) | 1,074 | 1,245 | |||||||
Note payable to Algo Holdings, payable in monthly installments of $10. There is no interest on this note if paid within terms. Termed May 1, 2012. See Note 13. | - | 85 | |||||||
$ | 5,842 | $ | 6,577 | ||||||
Less current portion | 583 | 735 | |||||||
$ | 5,259 | $ | 5,842 | ||||||
Our principal payment obligation for the year ending September 30, 2013 is $583. Cash interest payments of $715 and $647 were made in 2012 and 2011, respectively. | |||||||||
Mortgages and note payable | |||||||||
We have notes payable to Regions Bank ("Regions") aggregating approximately $5,800. | |||||||||
Regions notes payable currently include two outstanding mortgages on our facilities in West Lafayette and Evansville, Indiana, which total $4,768. The mortgages originally mature in November 2012 with an interest rate fixed at 4.1% and monthly principal payments of approximately $38 plus interest. | |||||||||
(a) On November 29, 2010, we executed amendments on two loans with Regions. Regions agreed to accept a $500 principal payment on the note payable maturing on December 18, 2010 and a $500 principal payment on one mortgage maturing on February 11, 2011. The principal payments were made on December 17, 2010 and February 11, 2011, respectively. Upon receipt of these two payments, Regions incorporated the two loans into a replacement note payable for $1,341 maturing on November 1, 2012. The replacement note payable bears interest at a per annum rate equal to the 30-day LIBOR plus 300 basis points (minimum of 4.5%) with monthly principal payments of approximately $14 plus interest. The replacement note payable is secured by real estate at our West Lafayette and Evansville, Indiana locations. At September 30, 2012, the replacement note payable had a balance of $1,074. | |||||||||
As part of the amendment, Regions also agreed to amend the loan covenants for the related debt to be more favorable to us. Regions requires us to maintain certain ratios including a fixed charge coverage ratio and total liabilities to tangible net worth ratio. The fixed charge coverage ratio calculation currently requires a ratio of not less than 1.25 to 1.00. We are also required to maintain a ratio of our total liabilities to tangible net worth ratio of not greater than 2.10 to 1.00. If we fail to comply with these covenants, the loan agreement restricts our ability to purchase fixed assets. | |||||||||
(b) On November 9, 2012, we executed a sixth amendment with Regions. On December 21, 2012, we executed an amended and restated sixth amendment with Regions. Regions agreed to extend the term loan and mortgage loan maturity dates to October 31, 2013. The unpaid principal on the notes was incorporated into a replacement note payable for $5,786 bearing interest at LIBOR plus 400 basis points (minimum of 6.0%) with monthly principal payments of approximately $47 plus interest. The replacement note payable is secured by real estate at our West Lafayette and Evansville, Indiana locations. | |||||||||
At September 30, 2012, we were not in compliance with the fixed charge coverage and the total liabilities to tangible net worth ratios in the Regions agreements, mainly due to the net losses in the first nine months of fiscal 2012, restructuring charges incurred in current fiscal year and the treatment of our warrants as a liability instead of as equity. On November 6, 2012, Regions waived compliance with the fixed charge coverage ratio. On December 21, 2012, Regions waived compliance with the total liabilities to tangible net worth ratio. Based on projections for fiscal 2013, we expect to be in compliance with the fixed charge coverage covenants for fiscal 2013 and in breach of the total liabilities to tangible net worth ratio covenant for the first two fiscal quarters of 2013, primarily due to the treatment of our warrants as a liability. On September 10, 2013, Regions waived our expected breach. Failure to comply with those covenants in future quarters would be a default under the Regions loans, requiring us to negotiate with Regions regarding loan modifications or waivers. If we are unable to obtain such modifications or waivers, Regions could accelerate the maturity of the loans and cause a cross default with our other lender. | |||||||||
The Regions loans contain both cross-default provisions with each other and with the revolving line of credit with Entrepreneur Growth Capital described below. | |||||||||
The mortgages and replacement note payable with Regions mature in the first quarter of fiscal 2014. We intend to refinance the amounts in lieu of making balloon payments for the remaining principal balances or sell the building in West Lafayette, Indiana. On July 12, 2012, we listed for sale our 7.25 acres and 120,000 square foot facility at 2701 Kent Avenue, West Lafayette, Indiana with the intent to leaseback 80% of that square footage in which to continue our laboratory and manufacturing operations. The asking price was $12,500. We performed an impairment analysis on the building when we listed it for sale, but noted no impairment necessary. As of September 30, 2012 the net book value of the facility and land was $9,585. | |||||||||
We may be unsuccessful in renegotiating the terms of the debt or those terms may be unfavorable to us. For these reasons, if we are unsuccessful at refinancing our long-term debt, our operating results and financial condition could be adversely affected. | |||||||||
Revolving Line of Credit | |||||||||
On January 13, 2010, we entered into a new $3,000 revolving line of credit agreement ("Credit Agreement") with EGC. The term of the Credit Agreement expires on January 31, 2014. If we terminate prior to the expiration of the term, then we are subject to an early termination fee equal to the minimum interest charges of $15 for each of the months remaining until expiration. | |||||||||
Borrowings under the Credit Agreement bear interest at an annual rate equal to Citibank's Prime Rate plus five percent (5%), or 8.25% as of September 30, 2012, with minimum monthly interest of $15. Interest is paid monthly. The line of credit also carries an annual facilities fee of 2% and a 0.2% collateral monitoring fee. Borrowings under the Credit Agreement are secured by a blanket lien on our personal property, including certain eligible accounts receivable, inventory, and intellectual property assets, a second mortgage on our West Lafayette and Evansville real estate and all common stock of our U.S. subsidiaries and 65% of the common stock of our non-United States subsidiary. Borrowings are calculated based on 75% of eligible accounts receivable. Under the Credit Agreement, the Company has agreed to restrict advances to subsidiaries, limit additional indebtedness and capital expenditures and maintain a minimum tangible net worth of at least $8,500. Pursuant to the terms of the Credit Agreement, the line of credit will automatically renew on January 31, 2014 unless either party gives a 60-day notice of intent to terminate or withdraw. | |||||||||
On December 21, 2012, we negotiated an amendment to this Credit Agreement. The amendment reduced the minimum tangible net worth covenant requirement from $8,500 to $8,000, effective on January 1, 2013, and waived all non-compliances with this covenant through December 31, 2012. | |||||||||
The Credit Agreement also contains cross-default provisions with the Regions loans and any future EGC loans. At September 30, 2012, we were not in compliance with the minimum tangible net worth covenant requirement. On December 21, 2012, EGC waived compliance with this covenant as part of the amendment. Based on projections for fiscal 2013, we expect to be in breach of the tangible net worth covenant for our first three quarters of fiscal 2013, but in compliance in our fourth fiscal quarter. EGC waived our projected breach for our first fiscal quarter of 2013 in the amendment to the Credit Agreement on December 21, 2012. EGC waived our expected breach for our second and third fiscal quarters of 2013 on October 9, 2013. At September 30, 2012, we had available borrowing capacity of $1,927 on this line, of which $1,444 was outstanding. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Sep. 30, 2012 | |||||||||
INCOME TAXES [Abstract] | |||||||||
INCOME TAXES | 9. INCOME TAXES | ||||||||
Significant components of our deferred tax assets and liabilities as of September 30 are as follows: | |||||||||
2012 | 2011 | ||||||||
(Restated) | (Restated) | ||||||||
Deferred tax assets - Current: | |||||||||
Inventory | $ | 202 | $ | 236 | |||||
Accrued compensation and vacation | 255 | 271 | |||||||
Accrued expenses and other | 252 | 118 | |||||||
Total current deferred tax assets | 709 | 625 | |||||||
Deferred tax liabilities - Current: | |||||||||
Prepaid expenses | (74 | ) | (116 | ) | |||||
Total net current deferred tax assets | 635 | 509 | |||||||
Deferred tax assets - Noncurrent: | |||||||||
Domestic net operating loss carryforwards | 2,483 | 1,585 | |||||||
Stock compensation expense | 14 | 29 | |||||||
Foreign net operating loss | 2,334 | 1,326 | |||||||
Foreign tax credit carryover | 119 | 119 | |||||||
AMT credit carryover | 42 | 45 | |||||||
Total noncurrent deferred tax assets | 4,992 | 3,104 | |||||||
Deferred tax liabilities - Noncurrent: | |||||||||
Unrealized gain/loss - warrant liability | (296 | ) | (685 | ) | |||||
Basis difference for fixed assets | (459 | ) | (562 | ) | |||||
Basis difference for intangibles | - | (21 | ) | ||||||
(755 | ) | (1,268 | ) | ||||||
Total net noncurrent deferred tax assets | 4,237 | 1,836 | |||||||
Valuation allowance for net deferred tax assets | (4,872 | ) | (2,345 | ) | |||||
Net deferred tax asset (liability) | $ | - | $ | - | |||||
Significant components of the provision (benefit) for income taxes are as follows as of the year ended September 30: | |||||||||
2012 | 2011 | ||||||||
Current: | |||||||||
Federal | $ | (3 | ) | $ | 37 | ||||
State and local | 5 | 13 | |||||||
Foreign | - | - | |||||||
Deferred: | |||||||||
Federal | - | - | |||||||
State and local | - | - | |||||||
Foreign | - | - | |||||||
Income tax expense | $ | 2 | $ | 50 | |||||
The effective income tax rate on continuing operations varied from the statutory federal income tax rate as follows: | |||||||||
2012 | 2011 | ||||||||
Statutory federal income tax rate | 34 | % | 34 | % | |||||
Increases (decreases): | |||||||||
State and local income taxes, net of Federal tax benefit, if applicable | (0.1 | ) | 0.4 | ||||||
Nondeductible expenses | (0.5 | ) | 2.9 | ||||||
Valuation allowance changes | (33.5 | ) | (35.4 | ) | |||||
Other | --- | 0.2 | |||||||
Effective income tax rate | (0.1 | )% | 2.1 | % | |||||
In fiscal 2012 and 2011, our foreign operations generated losses before income taxes of $3,636 and $745, respectively. We have foreign net operating loss carryforwards of $8,854 that have an indefinite life under current UK tax law. We have a valuation allowance for the deferred tax asset related to the foreign net operating losses. | |||||||||
Realization of deferred tax assets associated with the net operating loss carryforward and credit carryforward is dependent upon generating sufficient taxable income prior to their expiration. The valuation allowance in fiscal 2012 and 2011 was $2,538 and $1,021, respectively for our domestic operations. Payments made in fiscal 2012 and 2011 for income taxes amounted to $12 and $8, respectively. | |||||||||
At September 30, 2012, we had domestic net operating loss carryforwards of approximately $4,935 for federal and $9,469 for state, which expire from September 30, 2014 through 2029. Also, we have a foreign tax credit carryforward of approximately $119, which expires September 30, 2016. Further, we have an alternative minimum tax credit carryforward of approximately $42 available to offset future federal income taxes. This credit has an unlimited carryforward period. | |||||||||
We may recognize the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon regulatory examination based on the technical merits of the position. The amount of the benefit for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that we believe is more likely than not to be realized upon ultimate settlement of the position. At September 30, 2012, a $16 liability remained for other uncertain income tax positions. | |||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||
Change in unrecognized tax benefits: | |||||||||
2012 | 2011 | ||||||||
Balance at beginning of the year | $ | 16 | $ | 30 | |||||
Additions based on tax positions related to the current year | - | - | |||||||
Additions for tax positions of prior years | - | - | |||||||
Reductions for tax positions of prior years | - | (14 | ) | ||||||
Settlements | - | - | |||||||
Balance at end of the year | $ | 16 | $ | 16 | |||||
As noted in the table above, there has been no change in our gross uncertain tax positions during fiscal 2012 based on a state tax position. For fiscal 2011, we had a reduction of $14 in our gross uncertain tax positions during fiscal 2011 based on correspondence with a state taxing authority. | |||||||||
We are no longer subject to U.S. federal tax examinations for years before 2008 or state and local for years before 2007, with limited exceptions. For federal purposes, the tax attributes carried forward could be adjusted through the examination process and are subject to examination 3 years from the date of utilization. Furthermore, we are no longer subject to income tax examinations in the United Kingdom for years prior to 2007. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2012 | |||||||||||||||||||||
STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||||||
STOCK-BASED COMPENSATON | 10. STOCK-BASED COMPENSATION | ||||||||||||||||||||
Summary of Stock Option Plans and Activity | |||||||||||||||||||||
In March 2008, our shareholders approved the 2008 Stock Option Plan (the "Plan") to replace the 1997 Outside Director Stock Option Plan and the 1997 Employee Stock Option Plan. Future common shares will be granted from the 2008 Stock Option Plan. The purpose of the Plan is to promote our long-term interests by providing a means of attracting and retaining officers, directors and key employees. The Compensation Committee shall administer the Plan and approve the particular officers, directors or employees eligible for grants. Under the Plan, employees are granted the option to purchase our common shares at fair market value on the date of the grant. Generally, options granted vest and become exercisable in four equal installments commencing one year from date of grant and expire upon the earlier of the employee's termination of employment with us, or ten years from the date of grant. This plan terminates in fiscal 2018. The Compensation Committee may also issue non-qualified stock option grants with vesting periods different from the 2008 Plan. | |||||||||||||||||||||
The maximum number of common shares that may be granted under the Plan is 500 shares. At September 30, 2012, 339 shares remain available for grants under the Plan. | |||||||||||||||||||||
The weighted-average assumptions used to compute the fair value of options granted for the fiscal years ended September 30 were as follows: | |||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||
Risk-free interest rate | 1.39% | 3.08% | |||||||||||||||||||
Dividend yield | 0.00% | 0.00% | |||||||||||||||||||
Volatility of the expected market price of the Company's common stock | 93.00%- 97.00% | 90.00%-91.00% | |||||||||||||||||||
Expected life of the options (years) | 7.0 - 8.0 | 8 | |||||||||||||||||||
A summary of our stock option activity for all options and related information for the years ended September 30, 2012 and 2011, respectively, is as follows (in thousands except for share prices): | |||||||||||||||||||||
Options | Weighted- | Weighted- | Weighted-Average | Aggregate | |||||||||||||||||
(shares) | Average | Average Grant | Remaining | Intrinsic | |||||||||||||||||
Exercise Price | Date Fair Value | Contractual Life | Value | ||||||||||||||||||
(Years) | |||||||||||||||||||||
Outstanding - October 1, 2010 | 705 | $ | 2.66 | ||||||||||||||||||
Exercised | - | $ | - | ||||||||||||||||||
Granted | 27 | $ | 2.24 | $ | 1.84 | ||||||||||||||||
Terminated | (59 | ) | $ | 2.54 | |||||||||||||||||
Outstanding - September 30, 2011 | 673 | $ | 2.65 | $ | 1.83 | 7.2 | $ | 69 | |||||||||||||
Outstanding - October 1, 2011 | 673 | $ | 2.65 | ||||||||||||||||||
Exercised | - | $ | - | ||||||||||||||||||
Granted | 200 | $ | 1.3 | $ | 1.05 | ||||||||||||||||
Terminated | (519 | ) | $ | 2.58 | |||||||||||||||||
Outstanding - September 30, 2012 | 354 | $ | 1.99 | $ | 1.46 | 8 | $ | 42 | |||||||||||||
Exercisable at September 30, 2012 | 94 | $ | 3.83 | $ | 2.59 | 5.3 | $ | 7 | |||||||||||||
A summary of non-vested options for the year ended September 30, 2012 is as follows: | |||||||||||||||||||||
Number of | Weighted- | ||||||||||||||||||||
Shares | Average Grant | ||||||||||||||||||||
Date Fair Value | |||||||||||||||||||||
Non-vested options at October 1, 2011 | 385 | $ | 1.14 | ||||||||||||||||||
Granted | 200 | $ | 1.05 | ||||||||||||||||||
Vested | (128 | ) | $ | 1.25 | |||||||||||||||||
Forfeited | (197 | ) | $ | 1.09 | |||||||||||||||||
Non-vested options at September 30, 2012 | 260 | $ | 1.06 | ||||||||||||||||||
No options were exercised in fiscal years 2012 and 2011. As of September 30, 2012, our total unrecognized compensation cost related to non-vested stock options was $217 and is expected to be recognized over a weighted-average service period of 1.24 years. As of September 30, 2012, there are 125 shares outstanding that were granted outside of the Plan. | |||||||||||||||||||||
The following table summarizes outstanding and exercisable options as of September 30, 2012 (in thousands except per share amounts): | |||||||||||||||||||||
Range of Exercise Prices | Shares | Weighted- | Weighted- | Shares | Weighted- | ||||||||||||||||
Outstanding | Average | Average | Exercisable | Average | |||||||||||||||||
Remaining | Exercise Price | Exercise Price | |||||||||||||||||||
Contractual | |||||||||||||||||||||
Life (Years) | |||||||||||||||||||||
$0.79 - 1.01 | 128 | 8.32 | $ | 0.97 | 24 | $ | 1.01 | ||||||||||||||
$1.02 - 4.59 | 155 | 9.4 | $ | 1.38 | 7 | $ | 1.35 | ||||||||||||||
$4.60 - 8.79 | 71 | 4.24 | $ | 5.19 | 62 | $ | 5.21 |
RETIREMENT_PLAN
RETIREMENT PLAN | 12 Months Ended |
Sep. 30, 2012 | |
RETIREMENT PLAN [Abstract] | |
RETIREMENT PLAN | 11. RETIREMENT PLAN |
We have a 401(k) Retirement Plan (the "Plan") covering all employees over twenty-one years of age with at least one year of service. Under the terms of the Plan, we contribute 1% of each participant's total wages to the Plan and match 22% of the first 10% of the employee contribution. The Plan also includes provisions for various contributions which may be instituted at the discretion of the Board of Directors. The contribution made by the participant may not exceed 30% of the participant's annual wages. We made no discretionary contributions under the plan in 2012 and 2011. Similar to fiscal 2011, we suspended our match of the employee contribution as part of our cost reduction efforts. Contribution expense was $17 and $15 in fiscal 2012 and 2011, respectively. The amounts recorded in fiscal 2012 and 2011 relate to statutory contributions for our European location. |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||
Sep. 30, 2012 | |||||||||
SEGMENT INFORMATION [Abstract] | |||||||||
SEGMENT INFORMATION | 12. SEGMENT INFORMATION | ||||||||
We operate in two principal segments - contract research services and research products. Our Services segment provides research and development support on a contract basis directly to pharmaceutical companies. Our Products segment provides liquid chromatography, electrochemical and physiological monitoring products to pharmaceutical companies, universities, government research centers, and medical research institutions. We evaluate performance and allocate resources based on these segments. Certain of our assets are not directly attributable to the Services or Products segments. These assets are grouped into the Corporate segment and include cash and cash equivalents, deferred income taxes, refundable income taxes, debt issue costs and certain other assets. We do not allocate such items to the principal segments because they are not used to evaluate their financial position. The accounting policies of these segments are the same as those described in the summary of significant accounting policies. | |||||||||
(a) | Operating Segments | ||||||||
Years Ended | |||||||||
September 30, | |||||||||
2012 | 2011 | ||||||||
(Restated) | (Restated) | ||||||||
Revenue: | |||||||||
Service | $ | 21,312 | $ | 25,613 | |||||
Product | 6,896 | 7,531 | |||||||
$ | 28,208 | $ | 33,144 | ||||||
Operating income (loss): | |||||||||
Service | $ | (3,863 | ) | $ | 745 | ||||
Product | 12 | 542 | |||||||
Corporate | (1,835 | ) | - | ||||||
$ | (5,686 | ) | $ | 1,287 | |||||
Interest Expense | (714 | ) | (706 | ) | |||||
Change in fair value of warrant liability- decrease | 73 | 1,759 | |||||||
Other income | 12 | 12 | |||||||
Income (loss) before income taxes | $ | (6,315 | ) | $ | 2,352 | ||||
Restructuring costs of $1,360 and $1,835 are included in the operating losses for fiscal 2012 for the Service and Corporate segments, respectively. | |||||||||
Years Ended | |||||||||
September 30, | |||||||||
2012 | 2011 | ||||||||
Identifiable assets: | |||||||||
Service | $ | 15,864 | $ | 18,121 | |||||
Product | 7,262 | 7,674 | |||||||
Corporate | 3,849 | 6,551 | |||||||
$ | 26,975 | $ | 32,346 | ||||||
Goodwill, net: | |||||||||
Service | $ | 1,009 | $ | 1,009 | |||||
Product | 374 | 374 | |||||||
$ | 1,383 | $ | 1,383 | ||||||
Intangible assets, net: | |||||||||
Service | $ | - | $ | 54 | |||||
Product | - | - | |||||||
$ | - | $ | 54 | ||||||
Depreciation and amortization: | |||||||||
Service | $ | 2,036 | $ | 1,899 | |||||
Product | 242 | 235 | |||||||
$ | 2,278 | $ | 2,134 | ||||||
Capital Expenditures: | |||||||||
Service | $ | 864 | $ | 1,098 | |||||
Product | 226 | 76 | |||||||
$ | 1,090 | $ | 1,174 | ||||||
(b) | Geographic Information | ||||||||
Years Ended | |||||||||
September 30, | |||||||||
2012 | 2011 | ||||||||
Sales to External Customers: | |||||||||
North America | $ | 25,042 | $ | 29,451 | |||||
Pacific Rim | 961 | 912 | |||||||
Europe | 1,858 | 2,542 | |||||||
Other | 347 | 239 | |||||||
$ | 28,208 | $ | 33,144 | ||||||
Long-lived Assets: | |||||||||
North America | $ | 20,083 | $ | 20,872 | |||||
Europe | - | 1,101 | |||||||
$ | 20,083 | $ | 21,973 | ||||||
(c) | Major Customers | ||||||||
The Preferred Provider Agreement ("PPA") with Pharmasset, Inc., signed in the first quarter of fiscal 2011, expired under its own terms, though they remain a large client of the Company. Pharmasset, Inc., now known as Gilead Sciences, Inc. ('Gilead') via acquisition, accounted for approximately 7.3% and 14.5% of our total revenues in fiscal 2012 and 2011, respectively, and 7.4% and 6.3% of total trade accounts receivable at September 30, 2012 and 2011, respectively. Pfizer, Inc. remains a large client, accounting for approximately 3.4% and 5.2% of our total revenues in fiscal 2012 and 2011, respectively. Pfizer, Inc. accounted for 8.4% and 4.2% of total trade accounts receivable at September 30, 2012 and 2011, respectively. |
SETTLEMENT_OF_CONTINGENT_LIABI
SETTLEMENT OF CONTINGENT LIABILITY | 12 Months Ended |
Sep. 30, 2012 | |
SETTLEMENT OF CONTINGENT LIABILITY [Abstract] | |
SETTLEMENT OF CONTINGENT LIABILITY | 13. SETTLEMENT OF CONTINGENT LIABILITY |
In June of 2008 as part of selling our Baltimore Clinical Pharmacology Research Unit, we subleased the building space it occupied to the purchaser of the assets. We remained contingently liable for the rent payments of $800 per year through 2015 in the event the sublessor did not perform. In 2009, the purchaser ceased operations in Baltimore and sought to renegotiate the terms of its sublease. In March of 2010, a settlement was reached with the landlord of the building which canceled the sublessor's and our obligations under the lease in exchange for a cash payment from the sublessor. We agreed to contribute $250 to the settlement, payable in twenty-five monthly installments of $10 without interest. We recorded the discounted liability of $216 in March 2010 and recognized the related expense in general and administrative expenses. In May 2012, we made the final payment and extinguished the liability. |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2012 | |||||||||||||||||||||
RESTRUCTURING [Abstract] | |||||||||||||||||||||
RESTRUCTURING | 14. RESTRUCTURING | ||||||||||||||||||||
In March 2012, we announced a plan to restructure our bioanalytical laboratory operations. We consolidated our laboratory in McMinnville, Oregon into our 120,000 square foot headquarters facility in West Lafayette, Indiana. This plan was implemented to reduce operating costs and strengthen our ability to meet clients' needs by improving laboratory utilization. In the fourth fiscal quarter of 2012, we decided to initiate closure of our facility and bioanalytical laboratory in Warwickshire, United Kingdom after careful evaluation of its financial performance and analysis of our strategic alternatives. We will continue to sell our products globally while further consolidating delivery of our CRO services into our Indiana locations. As part of the overall evaluation of our business, personnel reductions in the Selling, R&D and General and Administrative functions were also implemented at both of our Indiana locations during the second half of fiscal 2012. In total, 74 employees were terminated as part of the restructuring activities this fiscal year. | |||||||||||||||||||||
The following table sets forth the costs incurred in connection with these restructuring activities during the year ended September 30, 2012. | |||||||||||||||||||||
Description | 2012 | ||||||||||||||||||||
One-time termination benefits | $ | 1,454 | |||||||||||||||||||
Lease related costs | 861 | ||||||||||||||||||||
Equipment moving costs and method transfers | 153 | ||||||||||||||||||||
Travel and relocation costs | 47 | ||||||||||||||||||||
Loss on sale of equipment | 446 | ||||||||||||||||||||
Other costs | 234 | ||||||||||||||||||||
Total | $ | 3,195 | |||||||||||||||||||
We have reserved for lease payments at the cease use date and have considered free rent, sublease rentals and the number of days it would take to restore the space to its original condition prior to our improvements. Based on this, we have reserved $861 for lease related costs. | |||||||||||||||||||||
Restructuring related costs incurred during fiscal 2012 totaled $1,360 in our Services segment, $0 in our Products segment and $1,835 in corporate expenses. | |||||||||||||||||||||
The following table sets forth the rollforward of the restructuring activity for the year ended September 30, 2012. | |||||||||||||||||||||
Balance, | Total | Cash | Other | Balance, | |||||||||||||||||
September 30, | Charges | Payments | September 30, | ||||||||||||||||||
2011 | 2012 | ||||||||||||||||||||
One-time termination benefits | $ | - | $ | 1,454 | $ | (1,006 | ) | $ | - | $ | 448 | ||||||||||
Lease related costs | - | 861 | (61 | ) | - | 800 | |||||||||||||||
Equipment moving costs and method transfers | - | 153 | (104 | ) | - | 49 | |||||||||||||||
Travel and relocation costs | - | 47 | (43 | ) | - | 4 | |||||||||||||||
Loss on sale of equipment | - | 446 | - | (539 | ) | (93 | ) | ||||||||||||||
Other costs | - | 234 | (37 | ) | - | 197 | |||||||||||||||
Total | $ | - | $ | 3,195 | $ | (1,251 | ) | $ | (539 | ) | $ | 1,405 | |||||||||
Other costs include legal and professional fees and other costs incurred in connection with transitioning services from sites being closed as well as costs incurred to remove improvements previously made to the UK facility. Other activity in the reserve rollforward primarily reflects a receivable for settlement of the capital lease in the UK. |
SELFINSURANCE
SELF-INSURANCE | 12 Months Ended |
Sep. 30, 2012 | |
SELF-INSURANCE [Abstract] | |
SELF-INSURANCE | 15. SELF-INSURANCE |
The Company is self-insured for certain costs related its employee health plan. Costs resulting from noninsured losses are charged to income when incurred. The Company has purchased insurance which limits its exposure for individual claims to approximately $60 and has a minimum annual aggregate attachment point of $2,072 at September 30, 2012. The Company's expense related to the plan was $1,231 and $1,089 for the years ended September 30, 2012 and 2011. |
MANAGEMENTS_PLAN
MANAGEMENT'S PLAN | 12 Months Ended |
Sep. 30, 2012 | |
MANAGEMENT'S PLAN [Abstract] | |
MANAGEMENT'S PLAN | 16. MANAGEMENT'S PLAN |
Our long-term strategic objective is to maximize the Company's intrinsic value per share. However, in response to our financial performance through the second quarter of fiscal 2012, we began to operate the business in a manner designed to place more emphasis on cash flow generation. Thus, our short-term tactical objective is to maximize free cash flow from operating activities. | |
Revenues declined approximately 14.9% and gross margin declined 34.9% from fiscal 2011. In fiscal 2012, we consolidated our bioanalytical laboratories into our headquarters in West Lafayette, Indiana, closing facilities in McMinnville, Oregon and the UK to reduce operating costs and strengthen our ability to meet clients' needs by improving laboratory utilization. We also implemented personnel reductions and other cost cutting measures in Selling, R&D and General and Administrative functions. These restructuring activities totaled $3,195 in the current year. As a result, we reported a net loss of $6,317 in fiscal 2012 as compared to net income of $2,302 in fiscal 2011. | |
The majority of the restructuring activities, though, occurred in the second half of the fiscal year. Due to these activities, gross margin improved 60.5% in the second half of fiscal 2012. Operating expenses declined 32.5% in the same time period. As a result, we had operating income of $452 before restructuring charges in the second half of fiscal 2012 compared to an operating loss of $2,943 in the first half. The % and $ amounts in the preceding sentences in this paragraph are unaudited. We will continue initiatives to control costs and improve productivity to achieve our financial objectives. Total capital expenditures declined 7.2% in fiscal 2012, particularly in the second half, as we limited spending to only necessary expenditures. | |
We negotiated an amendment on our loans with Regions Bank, extending the maturity date to October 2013. Our line of credit with Entrepreneur Growth Capital LLC was renewed for another year. Further, we listed for sale our headquarters facility in West Lafayette, Indiana with the intent to leaseback 80% of that square footage in which to continue our laboratory and manufacturing operations. | |
In fiscal 2013, we will continue to assess the need for additional cost controls such as freezing non-essential capital expenditures, reducing non-essential expenses, and monitoring our operations for efficiencies to further reduce our break-even point. For fiscal 2013, we expect to see slow but continued improvement in the volume of new bookings with little improvement in pricing. We also expect improved gross profit margins due to cost controls implemented and restructuring activities. We have debt and lease obligations of approximately $1.3 million in fiscal 2013. Based on our expected revenue, the availability on our line of credit, the impact of the cost reductions implemented and restructuring activities during fiscal 2012, we project that we will have the liquidity required to meet our fiscal 2013 operations and debt obligations. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||
Sep. 30, 2012 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||
Principles of Consolidation | (a) | Principles of Consolidation | |||||||||||
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated. | |||||||||||||
Revenue Recognition | (b) | Revenue Recognition | |||||||||||
The majority of our Bioanalytical and analytical research service contracts involve the development of analytical methods and the processing of bioanalytical samples for pharmaceutical companies and generally provide for a fixed fee for each sample processed. Revenue is recognized under the specific performance method of accounting and the related direct costs are recognized when services are performed. Our preclinical research service contracts generally consist of preclinical studies, and revenue is recognized under the proportional performance method of accounting. Revisions in profit estimates, if any, are reflected on a cumulative basis in the period in which such revisions become known. The establishment of contract prices and total contract costs involves estimates we make at the inception of the contract. These estimates could change during the term of the contract and impact the revenue and costs reported in the consolidated financial statements. Revisions to estimates have generally not been material. Research service contract fees received upon acceptance are deferred until earned, and classified within customer advances. Unbilled revenues represent revenues earned under contracts in advance of billings. | |||||||||||||
Product revenue from sales of equipment not requiring installation, testing or training is recognized upon shipment to customers. One product includes internally developed software and requires installation, testing and training, which occur concurrently. Revenue from these sales is recognized upon completion of the installation, testing and training when the services are bundled with the equipment sale. | |||||||||||||
Cash Equivalents | (c) | Cash Equivalents | |||||||||||
We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. | |||||||||||||
One or more of the financial institutions holding the Company's cash accounts are participating in the FDIC's Transaction Account Guarantee Program. Under that program, through December 31, 2010, all noninterest-bearing transaction accounts are fully guaranteed by the FDIC for the entire amount in the account. Pursuant to legislation enacted in 2010, the FDIC will fully insure all noninterest-bearing transaction accounts beginning December 31, 2010 through December 31, 2012, at all FDIC-insured institutions. | |||||||||||||
For financial institutions opting out of the FDIC's Transaction Account Guarantee Program or interest-bearing cash accounts, the FDIC's insurance limits were permanently increased to $250,000, effective July 21, 2010. At September 30, 2012, the Company did not have any cash accounts that exceeded federally insured limits. | |||||||||||||
Accounts Receivable | (d) | Accounts Receivable | |||||||||||
We perform periodic credit evaluations of our customers' financial conditions and generally do not require collateral on trade accounts receivable. We account for trade receivables based on the amounts billed to customers. Past due receivables are determined based on contractual terms. We do not accrue interest on any of our trade receivables. The allowance for doubtful accounts is determined by management based on our historical losses, specific customer circumstances, and general economic conditions. Periodically, management reviews accounts receivable and adjusts the allowance based on current circumstances and charges off uncollectible receivables when all attempts to collect have failed. Our allowance for doubtful accounts was $123 and $108 at September 30, 2012 and 2011, respectively. | |||||||||||||
A summary of activity in our allowance for doubtful accounts is as follows: | |||||||||||||
2012 | 2011 | ||||||||||||
Opening balance | $ | 108 | $ | 165 | |||||||||
Charged to expense | 84 | 13 | |||||||||||
Accounts recovered | 15 | (61 | ) | ||||||||||
Accounts written off | (84 | ) | (9 | ) | |||||||||
Ending balance | $ | 123 | $ | 108 | |||||||||
Inventories | (e) | Inventories | |||||||||||
Inventories are stated at the lower of cost or market using the first-in, first-out (FIFO) cost method of accounting. We evaluate inventories on a regular basis to identify inventory on hand that may be obsolete or in excess of current and future projected market demand. For inventory deemed to be obsolete, we provide a reserve for this inventory. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates the estimate of future demand. | |||||||||||||
Property and Equipment | (f) | Property and Equipment | |||||||||||
We record property and equipment at cost, including interest capitalized during the period of construction of major facilities. We compute depreciation, including amortization on capital leases, using the straight-line method over the estimated useful lives of the assets, which we estimate to be: buildings and improvements, 34 to 40 years; machinery and equipment, 5 to 10 years, and office furniture and fixtures, 10 years. In our European operations, we depreciate leasehold improvements, using the straight-line method, over 7 years, corresponding to the terms of the operating lease for the European facility. Depreciation expense was $2,217 in fiscal 2012 and $2,085 in fiscal 2011. Expenditures for maintenance and repairs are expensed as incurred. | |||||||||||||
Property and equipment, net, as of September 30, 2012 and 2011 consisted of the following: | |||||||||||||
2012 | 2011 | ||||||||||||
Land and improvements | $ | 914 | $ | 527 | |||||||||
Buildings and improvements | 21,278 | 21,433 | |||||||||||
Machinery and equipment | 19,496 | 22,361 | |||||||||||
Office furniture and fixtures | 701 | 949 | |||||||||||
Construction in progress | 35 | 493 | |||||||||||
42,424 | 45,763 | ||||||||||||
Less: accumulated depreciation | (23,796 | ) | (25,364 | ) | |||||||||
Net property and equipment | $ | 18,628 | $ | 20,399 | |||||||||
Long-Lived Assets including Goodwill | (g) | Long-Lived Assets including Goodwill | |||||||||||
Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized of the amount by which the carrying amount of the asset exceeds the fair value of the asset. | |||||||||||||
We carry goodwill at cost. Other intangible assets with definite lives are stated at cost and are amortized on a straight-line basis over their estimated useful lives. All intangible assets acquired that are obtained through contractual or legal right, or are capable of being separately sold, transferred, licensed, rented, or exchanged, are recognized as an asset apart from goodwill. Goodwill is not amortized. | |||||||||||||
Goodwill is tested annually for impairment, and more frequently if events and circumstances indicate that the asset might be impaired. First, we can assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. We elected to bypass the qualitative assessment aspect of this guidance due to the restructuring circumstances. Then, we followed a two-step quantitative process. In the first step, we compare the fair value of each reporting unit, as computed primarily by present value cash flow calculations, to its book carrying value, including goodwill. We do not believe that market value is indicative of the true fair value of the Company mainly due to average daily trading volumes of less than 1%. If the fair value exceeds the carrying value, no further work is required and no impairment loss is recognized. If the carrying value exceeds the fair value, the goodwill of the reporting unit is potentially impaired and we would then complete step 2 in order to measure the impairment loss. In step 2, the implied fair value is compared to the carrying amount of the goodwill. If the implied fair value of goodwill is less than the carrying value of goodwill, we would recognize an impairment loss equal to the difference. The implied fair value is calculated by allocating the fair value of the reporting unit (as determined in step 1) to all of its assets and liabilities (including unrecognized intangible assets) and any excess in fair value that is not assigned to the assets and liabilities is the implied fair value of goodwill. | |||||||||||||
The discount rate, gross margin and sales growth rates are material assumptions utilized in our calculations of the present value cash flows used to estimate the fair value of the reporting units when performing the annual goodwill impairment test. Our reporting units with goodwill at September 30, 2012 are Vetronics, which is included in our Products segment, bioanalytical services and preclinical services, which are both included in our Services segment, based on the discrete financial information available which is reviewed by management. We utilize a cash flow approach in estimating the fair value of the reporting units, where the discount rate reflects a weighted average cost of capital rate. The cash flow model used to derive fair value is sensitive to the discount rate and sales growth assumptions used. | |||||||||||||
Due to the closure of the McMinnville, Oregon site, we tested for impairment of the bioanalytical business at the end of our third fiscal quarter using the cash flow approach as explained above. This test resulted in no impairment to the goodwill valuation as currently recorded on the books. | |||||||||||||
We also performed our annual impairment test for all reporting units mentioned above at September 30, 2012. Using a discount rate of 14% and a revenue growth rate of 5% for the Bioanalytical services and 0% for both the preclinical services and Vetronics units, the fair values of the reporting units described above are greater than the carrying values by approximately $3.7 million. | |||||||||||||
Considerable management judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate future cash flows. Assumptions used in our impairment evaluations, such as forecasted sales growth rates and our cost of capital or discount rate, are based on the best available market information. Changes in these estimates or a continued decline in general economic conditions could change our conclusion regarding an impairment of goodwill and potentially result in a non-cash impairment loss in a future period. The assumptions used in our impairment testing could be adversely affected by certain risks. There have been no significant events since the timing of our impairment tests that would have triggered additional impairment testing. | |||||||||||||
At September 30, 2012 and 2011, remaining recorded goodwill was $1,383, and the net balance of other intangible assets was $0 and $54, respectively. The components of intangible assets subject to amortization are as follows: | |||||||||||||
30-Sep-12 | |||||||||||||
Weighted | Gross Carrying | Accumulated | |||||||||||
average life | Amount | Amortization | |||||||||||
(years) | |||||||||||||
FDA compliant facility | 10 | $ | 302 | $ | 302 | ||||||||
30-Sep-11 | |||||||||||||
Weighted | Gross Carrying | Accumulated | |||||||||||
average life | Amount | Amortization | |||||||||||
(years) | |||||||||||||
FDA compliant facility | 10 | $ | 302 | $ | 248 | ||||||||
Amortization expense for intangible assets for fiscal years ended September 30, 2012 and 2011 was $54 and $30, respectively. As of September 30, 2012, all intangible assets have been fully amortized. | |||||||||||||
Advertising Expense | (h) | Advertising Expense | |||||||||||
We expense advertising costs as incurred. Advertising expense was $203 and $229 for the years ended September 30, 2012 and 2011, respectively. | |||||||||||||
Stock-Based Compensation | (i) | Stock-Based Compensation | |||||||||||
We have a stock-based employee compensation plan and a stock-based employee and outside director compensation plan, which are described more fully in Note 10. All options granted under these plans have an exercise price equal to the market value of the underlying common shares on the date of grant. We expense the estimated fair value of stock options over the vesting periods of the grants. Our policy is to recognize expense for awards subject to graded vesting using the straight-line attribution method, reduced for estimated forfeitures. Forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates and an adjustment is recognized at that time. | |||||||||||||
We use a binomial option-pricing model as our method of valuation for share-based awards, requiring us to make certain assumptions about the future, which are more fully described in Note 10. Stock-based compensation expense for employee stock options for the years ended September 30, 2012 and 2011 was $83 and $153, respectively. | |||||||||||||
Income Taxes | (j) | Income Taxes | |||||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We record valuation allowances based on a determination of the expected realization of tax assets. | |||||||||||||
We may recognize the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount of the accrual for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that we believe is more likely than not to be realized upon settlement of the position. | |||||||||||||
We record interest and penalties accrued in relation to uncertain income tax positions as a component of income tax expense. Any changes in the liability for uncertain tax positions would impact our effective tax rate. We do not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months. | |||||||||||||
New Accounting Pronouncements | (k) | New Accounting Pronouncements | |||||||||||
In May 2011, the FASB issued updated fair value measurement and disclosure guidance that clarifies how to measure fair value and requires additional disclosures regarding Level 3 fair value measurements, as well as any transfers between Level 1 and Level 2 fair value measurements. The updated accounting guidance is effective for fiscal years and interim periods beginning on or after December 15, 2011 on a prospective basis. The Company adopted this guidance in the second fiscal quarter with no material impact on the consolidated financial statements. | |||||||||||||
In June 2011, the FASB amended the manner in which an entity presents the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single, continuous statement of comprehensive income or in two separate but consecutive statements. The amendment eliminates the option to present the components of other comprehensive income as part of the statement of equity. The amendment is effective for fiscal years and interim periods beginning on or after December 15, 2011 on a retrospective basis. The adoption of this guidance will not change the previously reported amounts of comprehensive income. The Company has presented other comprehensive income on the face of the condensed consolidated statements of operations for all periods presented. | |||||||||||||
In September 2011, the FASB issued an accounting standards update that amends the two-step goodwill impairment test by permitting an entity to first assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step goodwill impairment test is unnecessary. The amendment is effective for fiscal years and interim periods beginning on or after December 15, 2011 on a prospective basis, early adoption is permitted. The Company elected to bypass the qualitative assessment aspect of this guidance due to the restructuring circumstances and performed a quantitative analysis in the third and fourth fiscal quarters of 2012. The quantitative analysis resulted in no impairment to the goodwill valuation as currently recorded on the books. | |||||||||||||
Fair Value | (l) | Fair Value | |||||||||||
The provisions of the Fair Value Measurements and Disclosure Topic defines fair value, establishes a consistent framework for measuring fair value and provides the disclosure requirements about fair value measurements. This Topic also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's judgment about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: | |||||||||||||
• | Level 1 - Valuations based on quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. | ||||||||||||
• | Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. | ||||||||||||
• | Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. | ||||||||||||
We have Class A and B Warrants from the May 2011 offering that are measured at fair value on a recurring basis. We recorded these warrants as a liability determining the fair value at inception on May 11, 2011. Subsequent quarterly fair value measurements, using the Black Scholes model which is considered a level 2 measurement, are calculated with fair value changes charged to the statement of operations and comprehensive income (loss). Class B Warrants expired in May 2012 and the liability was reduced to zero. The assumptions used to compute the fair value of the warrants at September 30, 2012 and 2011 were as follows: | |||||||||||||
30-Sep-12 | 30-Sep-11 | ||||||||||||
Warrant A | Warrant A | Warrant B | |||||||||||
Risk-free interest rate | 0.41 | % | 0.86 | % | 0.08 | % | |||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||||
Volatility of the Company's common stock | 117.3 | % | 111.44 | % | 74.43 | % | |||||||
Expected life of the options (years) | 3.6 | 4.6 | 0.6 | ||||||||||
Fair value per unit | $ | 0.881 | $ | 0.844 | $ | 0.091 | |||||||
The carrying amounts for cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other assets, accounts payable and other accruals approximate their fair values because of their nature and respective duration. The fair value of the revolving credit facility and certain long-term debt is equal to their carrying values due to the variable nature of their interest rates. Our long-term fixed rate debt was initiated in February 2011 and renewed on November 1, 2012. Our interest rate swap expired under its terms in fiscal 2011. | |||||||||||||
Use of Estimates | (m) | Use of Estimates | |||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates as part of the issuance of these consolidated financial statements include but are not limited to the determination of fair values, allowance for doubtful accounts, inventory obsolescence, deferred tax valuations, depreciation, impairment charges and stock compensation. Our actual results could differ from those estimates. | |||||||||||||
Research and Development | (n) | Research and Development | |||||||||||
In fiscal 2012 and 2011, we spent $542 and $534, respectively, on research and development. Separate from our contract research services business, we maintain applications research and development to enhance our products business. | |||||||||||||
Comprehensive Income (Loss) | (o) | Comprehensive Income (Loss) | |||||||||||
We report comprehensive income (loss) on our Consolidated Statements of Operations. Other comprehensive income (loss) represents changes in shareholders' equity and is comprised of foreign currency translation adjustments. | |||||||||||||
Foreign Currency | (p) | Foreign Currency | |||||||||||
For our subsidiary outside of the United States that operates in a local currency environment, income and expense items are translated to United States dollars at the monthly average rates of exchange prevailing during the year, assets and liabilities are translated at year-end exchange rates and equity accounts are translated at historical exchange rates. Translation adjustments are accumulated in a separate component of shareholders' equity in the consolidated balance sheets and are included in the determination of comprehensive income (loss) in the consolidated statements of shareholders' equity. Transaction gains and losses are included in the determination of net income (loss) in the consolidated statements of operations and comprehensive income (loss). |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2012 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||
Summary of Activity in Allowance for Doubtful Accounts | A summary of activity in our allowance for doubtful accounts is as follows: | ||||||||||||
2012 | 2011 | ||||||||||||
Opening balance | $ | 108 | $ | 165 | |||||||||
Charged to expense | 84 | 13 | |||||||||||
Accounts recovered | 15 | (61 | ) | ||||||||||
Accounts written off | (84 | ) | (9 | ) | |||||||||
Ending balance | $ | 123 | $ | 108 | |||||||||
Schedule of Property and Equipment | Property and equipment, net, as of September 30, 2012 and 2011 consisted of the following: | ||||||||||||
2012 | 2011 | ||||||||||||
Land and improvements | $ | 914 | $ | 527 | |||||||||
Buildings and improvements | 21,278 | 21,433 | |||||||||||
Machinery and equipment | 19,496 | 22,361 | |||||||||||
Office furniture and fixtures | 701 | 949 | |||||||||||
Construction in progress | 35 | 493 | |||||||||||
42,424 | 45,763 | ||||||||||||
Less: accumulated depreciation | (23,796 | ) | (25,364 | ) | |||||||||
Net property and equipment | $ | 18,628 | $ | 20,399 | |||||||||
Components of Amortizable Intangible Assets | At September 30, 2012 and 2011, remaining recorded goodwill was $1,383, and the net balance of other intangible assets was $0 and $54, respectively. The components of intangible assets subject to amortization are as follows: | ||||||||||||
30-Sep-12 | |||||||||||||
Weighted | Gross Carrying | Accumulated | |||||||||||
average life | Amount | Amortization | |||||||||||
(years) | |||||||||||||
FDA compliant facility | 10 | $ | 302 | $ | 302 | ||||||||
30-Sep-11 | |||||||||||||
Weighted | Gross Carrying | Accumulated | |||||||||||
average life | Amount | Amortization | |||||||||||
(years) | |||||||||||||
FDA compliant facility | 10 | $ | 302 | $ | 248 | ||||||||
Summary of Assumptions Used to Compute Fair Value of Warrants | The assumptions used to compute the fair value of the warrants at September 30, 2012 and 2011 were as follows: | ||||||||||||
30-Sep-12 | 30-Sep-11 | ||||||||||||
Warrant A | Warrant A | Warrant B | |||||||||||
Risk-free interest rate | 0.41 | % | 0.86 | % | 0.08 | % | |||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||||
Volatility of the Company's common stock | 117.3 | % | 111.44 | % | 74.43 | % | |||||||
Expected life of the options (years) | 3.6 | 4.6 | 0.6 | ||||||||||
Fair value per unit | $ | 0.881 | $ | 0.844 | $ | 0.091 |
RESTATEMENT_OF_PREVIOUSLY_ISSU1
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2012 | |||||||||||||||||||||||||
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS [Abstract] | |||||||||||||||||||||||||
Schedule of Effects of Restatement Adjustments | The following table summarizes the effects of the restatement adjustments, previously discussed, on the consolidated statements of operations and comprehensive income (loss) items for the years ended September 30: | ||||||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||||||
As Reported | Adjustment | Restated | As Reported | Adjustment | Restated | ||||||||||||||||||||
Total revenue | $ | 28,208 | $ | - | $ | 28,208 | $ | 33,144 | $ | 33,144 | |||||||||||||||
Total cost of revenue | 21,370 | - | 21,370 | 22,638 | 22,638 | ||||||||||||||||||||
Gross profit | 6,838 | - | 6,838 | 10,506 | - | 10,506 | |||||||||||||||||||
Total operating expenses | 9,329 | - | 9,329 | 9,219 | 9,219 | ||||||||||||||||||||
Restructuring charges | 3,195 | - | 3,195 | - | - | ||||||||||||||||||||
Operating income (loss) | (5,686 | ) | - | (5,686 | ) | 1,287 | - | 1,287 | |||||||||||||||||
Interest expense | (714 | ) | - | (714 | ) | (706 | ) | (706 | ) | ||||||||||||||||
Change in fair value of warrant liability - decrease | - | 73 | 73 | - | 1,759 | 1,759 | |||||||||||||||||||
Other income | 12 | - | 12 | 12 | - | 12 | |||||||||||||||||||
Income (loss) before income taxes | (6,388 | ) | 73 | (6,315 | ) | 593 | 1,759 | 2,352 | |||||||||||||||||
Income tax expense | 2 | - | 2 | 50 | 50 | ||||||||||||||||||||
Net income (loss) | (6,390 | ) | 73 | (6,317 | ) | 543 | 1,759 | 2,302 | |||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||||
Foreign currency translation adjustment | (22 | ) | - | (22 | ) | (49 | ) | - | (49 | ) | |||||||||||||||
Comprehensive income (loss) | $ | (6,412 | ) | $ | 73 | $ | (6,339 | ) | $ | 494 | $ | 1,759 | $ | 2,253 | |||||||||||
Basic EPS | $ | (0.89 | ) | $ | 0.01 | $ | (0.88 | ) | $ | (0.66 | ) | $ | (0.08 | ) | $ | (0.74 | ) | ||||||||
Diluted EPS | $ | (0.89 | ) | $ | 0.01 | $ | (0.88 | ) | $ | (0.66 | ) | $ | (0.08 | ) | $ | (0.74 | ) | ||||||||
The following table summarizes the effects of the restatement adjustments, previously discussed, on the consolidated balance sheet items as of September 30: | |||||||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||||||
As Reported | Adjustment | Restated | As Reported | Adjustment | Restated | ||||||||||||||||||||
Total assets | $ | 26,975 | $ | - | $ | 26,975 | $ | 32,346 | $ | 32,346 | |||||||||||||||
Total other current liabilities | 11,387 | - | 11,387 | 9,847 | 9,847 | ||||||||||||||||||||
Fair value of warrant liability | - | 1,213 | 1,213 | - | 1,286 | 1,286 | |||||||||||||||||||
Total current liabilities | 11,387 | 1,213 | 12,600 | 9,847 | 1,286 | 11,133 | |||||||||||||||||||
Other long-term debt | 5,998 | - | 5,998 | 6,913 | 6,913 | ||||||||||||||||||||
Total liabilities | 17,385 | 1,213 | 18,598 | 16,760 | 1,286 | 18,046 | |||||||||||||||||||
Shareholders' equity: | |||||||||||||||||||||||||
Preferred Shares | 1,335 | - | 1,335 | 2,135 | - | 2,135 | |||||||||||||||||||
Common Shares | 1,871 | - | 1,871 | 1,698 | - | 1,698 | |||||||||||||||||||
Additional paid-in capital | 20,451 | (816 | ) | 19,635 | 19,408 | (816 | ) | 18,592 | |||||||||||||||||
Accumulated deficit | (14,096 | ) | (397 | ) | (14,493 | ) | (7,706 | ) | (470 | ) | (8,176 | ) | |||||||||||||
Accumulated other comprehensive income | 29 | - | 29 | 51 | 51 | ||||||||||||||||||||
Total shareholders' equity | 9,590 | (1,213 | ) | 8,377 | 15,586 | (1,286 | ) | 14,300 | |||||||||||||||||
Total liabilities and shareholders' equity | $ | 26,975 | $ | - | $ | 26,975 | $ | 32,346 | $ | - | $ | 32,346 |
SALE_OF_PREFERRED_SHARES_AND_W1
SALE OF PREFERRED SHARES AND WARRANTS (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2012 | |||||||||
SALE OF PREFERRED SHARES AND WARRANTS [Abstract] | |||||||||
Schedule of Fair Value Assumptions Used for Warrants | The assumptions used to compute the fair value of the warrants at the time of issuance were as follows: | ||||||||
Warrant A | Warrant B | ||||||||
Risk-free interest rate | 1.87 | % | 0.18 | % | |||||
Dividend yield | 0 | % | 0 | % | |||||
Volatility of the Company's common stock | 106.91 | % | 116.01 | % | |||||
Expected life of the options (years) | 5 | 1 | |||||||
Fair value per unit | $ | 1.433 | $ | 0.779 |
LOSS_PER_SHARE_Tables
LOSS PER SHARE (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2012 | |||||||||
LOSS PER SHARE [Abstract] | |||||||||
Reconciliation of Computation of Basic Loss Per Share to Diluted Net Loss Per Share | The following table reconciles our computation of basic net loss per share to diluted net loss per share: | ||||||||
Years Ended | |||||||||
September 30, | |||||||||
2012 | 2011 | ||||||||
(Restated) | (Restated) | ||||||||
Basic net loss per share: | |||||||||
Net income (loss) | $ | (6,317 | ) | $ | 2,302 | ||||
Less: Deemed dividend for Series A Preferred Shares | - | (5,506 | ) | ||||||
Less: Preferred dividend | - | (991 | ) | ||||||
Net loss applicable to common shareholders | $ | (6,317 | ) | $ | (4,195 | ) | |||
Weighted average common shares outstanding | 7,158 | 5,667 | |||||||
Basic net loss per share | $ | (0.88 | ) | $ | (0.74 | ) | |||
Diluted net loss per share: | |||||||||
Net loss applicable to common shareholders | $ | (6,317 | ) | $ | (4,195 | ) | |||
Weighted average common shares outstanding | 7,158 | 5,667 | |||||||
Diluted net loss per share | $ | (0.88 | ) | $ | (0.74 | ) |
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2012 | |||||||||
INVENTORIES [Abstract] | |||||||||
Summary of Inventories | Inventories at September 30 consisted of the following: | ||||||||
2012 | 2011 | ||||||||
Raw materials | $ | 1,407 | $ | 1,352 | |||||
Work in progress | 283 | 379 | |||||||
Finished goods | 276 | 309 | |||||||
$ | 1,966 | $ | 2,040 | ||||||
Obsolescence reserve | (310 | ) | (404 | ) | |||||
$ | 1,656 | $ | 1,636 |
LEASE_ARRANGEMENTS_Tables
LEASE ARRANGEMENTS (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2012 | |||||||||||||
LEASE ARRANGEMENTS [Abstract] | |||||||||||||
Schedule of Future Minimum Lease Payments for Capital Leases | Future minimum lease payments on capital leases at September 30, 2012 for the next five years are as follows: | ||||||||||||
Principal | Interest | Total | |||||||||||
2013 | $ | 330 | $ | 58 | $ | 388 | |||||||
2014 | 268 | 39 | 307 | ||||||||||
2015 | 259 | 22 | 281 | ||||||||||
2016 | 208 | 6 | 214 | ||||||||||
2017 | 4 | - | 4 | ||||||||||
$ | 1,069 | $ | 125 | $ | 1,194 | ||||||||
Schedule of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments for the following fiscal years under operating leases at September 30, 2012 are as follows: | ||||||||||||
2013 | $ | 371 | |||||||||||
2014 | 370 | ||||||||||||
2015 | 223 | ||||||||||||
2016 | 13 | ||||||||||||
$ | 977 |
DEBT_ARRANGEMENTS_Tables
DEBT ARRANGEMENTS (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2012 | |||||||||
DEBT ARRANGEMENTS [Abstract] | |||||||||
Schedule of Long-Term Debt | Long-term debt consisted of the following at September 30: | ||||||||
2012 | 2011 | ||||||||
Mortgage note payable to a bank, payable in monthly principal and interest installments of $40. Interest is fixed at 4.1%. Collateralized by underlying property. Due October, 2013. (b) | $ | 3,236 | $ | 3,573 | |||||
Mortgage note payable to a bank, payable in monthly principal and interest installments of $17. Interest is fixed at 4.1%. Collateralized by underlying property. Due October, 2013. (b) | 1,532 | 1,674 | |||||||
Replacement note payable to a bank, payable in monthly principal installments of $14 plus interest. The interest rate is 4.5%. Collateralized by West Lafayette and Evansville properties. Due October, 2013. (a) (b) | 1,074 | 1,245 | |||||||
Note payable to Algo Holdings, payable in monthly installments of $10. There is no interest on this note if paid within terms. Termed May 1, 2012. See Note 13. | - | 85 | |||||||
$ | 5,842 | $ | 6,577 | ||||||
Less current portion | 583 | 735 | |||||||
$ | 5,259 | $ | 5,842 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2012 | |||||||||
INCOME TAXES [Abstract] | |||||||||
Schedule of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities as of September 30 are as follows: | ||||||||
2012 | 2011 | ||||||||
(Restated) | (Restated) | ||||||||
Deferred tax assets - Current: | |||||||||
Inventory | $ | 202 | $ | 236 | |||||
Accrued compensation and vacation | 255 | 271 | |||||||
Accrued expenses and other | 252 | 118 | |||||||
Total current deferred tax assets | 709 | 625 | |||||||
Deferred tax liabilities - Current: | |||||||||
Prepaid expenses | (74 | ) | (116 | ) | |||||
Total net current deferred tax assets | 635 | 509 | |||||||
Deferred tax assets - Noncurrent: | |||||||||
Domestic net operating loss carryforwards | 2,483 | 1,585 | |||||||
Stock compensation expense | 14 | 29 | |||||||
Foreign net operating loss | 2,334 | 1,326 | |||||||
Foreign tax credit carryover | 119 | 119 | |||||||
AMT credit carryover | 42 | 45 | |||||||
Total noncurrent deferred tax assets | 4,992 | 3,104 | |||||||
Deferred tax liabilities - Noncurrent: | |||||||||
Unrealized gain/loss - warrant liability | (296 | ) | (685 | ) | |||||
Basis difference for fixed assets | (459 | ) | (562 | ) | |||||
Basis difference for intangibles | - | (21 | ) | ||||||
(755 | ) | (1,268 | ) | ||||||
Total net noncurrent deferred tax assets | 4,237 | 1,836 | |||||||
Valuation allowance for net deferred tax assets | (4,872 | ) | (2,345 | ) | |||||
Net deferred tax asset (liability) | $ | - | $ | - | |||||
Schedule of the Provision (Benefit) for Income Taxes | Significant components of the provision (benefit) for income taxes are as follows as of the year ended September 30: | ||||||||
2012 | 2011 | ||||||||
Current: | |||||||||
Federal | $ | (3 | ) | $ | 37 | ||||
State and local | 5 | 13 | |||||||
Foreign | - | - | |||||||
Deferred: | |||||||||
Federal | - | - | |||||||
State and local | - | - | |||||||
Foreign | - | - | |||||||
Income tax expense | $ | 2 | $ | 50 | |||||
Reconciliation of Effective Income Tax Rate | The effective income tax rate on continuing operations varied from the statutory federal income tax rate as follows: | ||||||||
2012 | 2011 | ||||||||
Statutory federal income tax rate | 34 | % | 34 | % | |||||
Increases (decreases): | |||||||||
State and local income taxes, net of Federal tax benefit, if applicable | (0.1 | ) | 0.4 | ||||||
Nondeductible expenses | (0.5 | ) | 2.9 | ||||||
Valuation allowance changes | (33.5 | ) | (35.4 | ) | |||||
Other | --- | 0.2 | |||||||
Effective income tax rate | (0.1 | )% | 2.1 | % | |||||
Reconciliation of Unrecognized Tax Benefits | Change in unrecognized tax benefits: | ||||||||
2012 | 2011 | ||||||||
Balance at beginning of the year | $ | 16 | $ | 30 | |||||
Additions based on tax positions related to the current year | - | - | |||||||
Additions for tax positions of prior years | - | - | |||||||
Reductions for tax positions of prior years | - | (14 | ) | ||||||
Settlements | - | - | |||||||
Balance at end of the year | $ | 16 | $ | 16 |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2012 | |||||||||||||||||||||
STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||||||
Fair Value Assumptions | The weighted-average assumptions used to compute the fair value of options granted for the fiscal years ended September 30 were as follows: | ||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||
Risk-free interest rate | 1.39% | 3.08% | |||||||||||||||||||
Dividend yield | 0.00% | 0.00% | |||||||||||||||||||
Volatility of the expected market price of the Company's common stock | 93.00%- 97.00% | 90.00%-91.00% | |||||||||||||||||||
Expected life of the options (years) | 7.0 - 8.0 | 8 | |||||||||||||||||||
Summary of Stock Option Activity | A summary of our stock option activity for all options and related information for the years ended September 30, 2012 and 2011, respectively, is as follows (in thousands except for share prices): | ||||||||||||||||||||
Options | Weighted- | Weighted- | Weighted-Average | Aggregate | |||||||||||||||||
(shares) | Average | Average Grant | Remaining | Intrinsic | |||||||||||||||||
Exercise Price | Date Fair Value | Contractual Life | Value | ||||||||||||||||||
(Years) | |||||||||||||||||||||
Outstanding - October 1, 2010 | 705 | $ | 2.66 | ||||||||||||||||||
Exercised | - | $ | - | ||||||||||||||||||
Granted | 27 | $ | 2.24 | $ | 1.84 | ||||||||||||||||
Terminated | (59 | ) | $ | 2.54 | |||||||||||||||||
Outstanding - September 30, 2011 | 673 | $ | 2.65 | $ | 1.83 | 7.2 | $ | 69 | |||||||||||||
Outstanding - October 1, 2011 | 673 | $ | 2.65 | ||||||||||||||||||
Exercised | - | $ | - | ||||||||||||||||||
Granted | 200 | $ | 1.3 | $ | 1.05 | ||||||||||||||||
Terminated | (519 | ) | $ | 2.58 | |||||||||||||||||
Outstanding - September 30, 2012 | 354 | $ | 1.99 | $ | 1.46 | 8 | $ | 42 | |||||||||||||
Exercisable at September 30, 2012 | 94 | $ | 3.83 | $ | 2.59 | 5.3 | $ | 7 | |||||||||||||
Summary of Non-Vested Options | A summary of non-vested options for the year ended September 30, 2012 is as follows: | ||||||||||||||||||||
Number of | Weighted- | ||||||||||||||||||||
Shares | Average Grant | ||||||||||||||||||||
Date Fair Value | |||||||||||||||||||||
Non-vested options at October 1, 2011 | 385 | $ | 1.14 | ||||||||||||||||||
Granted | 200 | $ | 1.05 | ||||||||||||||||||
Vested | (128 | ) | $ | 1.25 | |||||||||||||||||
Forfeited | (197 | ) | $ | 1.09 | |||||||||||||||||
Non-vested options at September 30, 2012 | 260 | $ | 1.06 | ||||||||||||||||||
Schedule of Outstanding and Exercisable Options | The following table summarizes outstanding and exercisable options as of September 30, 2012 (in thousands except per share amounts): | ||||||||||||||||||||
Range of Exercise Prices | Shares | Weighted- | Weighted- | Shares | Weighted- | ||||||||||||||||
Outstanding | Average | Average | Exercisable | Average | |||||||||||||||||
Remaining | Exercise Price | Exercise Price | |||||||||||||||||||
Contractual | |||||||||||||||||||||
Life (Years) | |||||||||||||||||||||
$0.79 - 1.01 | 128 | 8.32 | $ | 0.97 | 24 | $ | 1.01 | ||||||||||||||
$1.02 - 4.59 | 155 | 9.4 | $ | 1.38 | 7 | $ | 1.35 | ||||||||||||||
$4.60 - 8.79 | 71 | 4.24 | $ | 5.19 | 62 | $ | 5.21 |
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2012 | |||||||||
SEGMENT INFORMATION [Abstract] | |||||||||
Operating Segments | (a) | Operating Segments | |||||||
Years Ended | |||||||||
September 30, | |||||||||
2012 | 2011 | ||||||||
(Restated) | (Restated) | ||||||||
Revenue: | |||||||||
Service | $ | 21,312 | $ | 25,613 | |||||
Product | 6,896 | 7,531 | |||||||
$ | 28,208 | $ | 33,144 | ||||||
Operating income (loss): | |||||||||
Service | $ | (3,863 | ) | $ | 745 | ||||
Product | 12 | 542 | |||||||
Corporate | (1,835 | ) | - | ||||||
$ | (5,686 | ) | $ | 1,287 | |||||
Interest Expense | (714 | ) | (706 | ) | |||||
Change in fair value of warrant liability- decrease | 73 | 1,759 | |||||||
Other income | 12 | 12 | |||||||
Income (loss) before income taxes | $ | (6,315 | ) | $ | 2,352 | ||||
Restructuring costs of $1,360 and $1,835 are included in the operating losses for fiscal 2012 for the Service and Corporate segments, respectively. | |||||||||
Years Ended | |||||||||
September 30, | |||||||||
2012 | 2011 | ||||||||
Identifiable assets: | |||||||||
Service | $ | 15,864 | $ | 18,121 | |||||
Product | 7,262 | 7,674 | |||||||
Corporate | 3,849 | 6,551 | |||||||
$ | 26,975 | $ | 32,346 | ||||||
Goodwill, net: | |||||||||
Service | $ | 1,009 | $ | 1,009 | |||||
Product | 374 | 374 | |||||||
$ | 1,383 | $ | 1,383 | ||||||
Intangible assets, net: | |||||||||
Service | $ | - | $ | 54 | |||||
Product | - | - | |||||||
$ | - | $ | 54 | ||||||
Depreciation and amortization: | |||||||||
Service | $ | 2,036 | $ | 1,899 | |||||
Product | 242 | 235 | |||||||
$ | 2,278 | $ | 2,134 | ||||||
Capital Expenditures: | |||||||||
Service | $ | 864 | $ | 1,098 | |||||
Product | 226 | 76 | |||||||
$ | 1,090 | $ | 1,174 | ||||||
Geographical Information | (b) | Geographic Information | |||||||
Years Ended | |||||||||
September 30, | |||||||||
2012 | 2011 | ||||||||
Sales to External Customers: | |||||||||
North America | $ | 25,042 | $ | 29,451 | |||||
Pacific Rim | 961 | 912 | |||||||
Europe | 1,858 | 2,542 | |||||||
Other | 347 | 239 | |||||||
$ | 28,208 | $ | 33,144 | ||||||
Long-lived Assets: | |||||||||
North America | $ | 20,083 | $ | 20,872 | |||||
Europe | - | 1,101 | |||||||
$ | 20,083 | $ | 21,973 |
RESTRUCTURING_Tables
RESTRUCTURING (Tables) | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2012 | |||||||||||||||||||||
RESTRUCTURING [Abstract] | |||||||||||||||||||||
Summary of Restructuring Costs | The following table sets forth the costs incurred in connection with these restructuring activities during the year ended September 30, 2012. | ||||||||||||||||||||
Description | 2012 | ||||||||||||||||||||
One-time termination benefits | $ | 1,454 | |||||||||||||||||||
Lease related costs | 861 | ||||||||||||||||||||
Equipment moving costs and method transfers | 153 | ||||||||||||||||||||
Travel and relocation costs | 47 | ||||||||||||||||||||
Loss on sale of equipment | 446 | ||||||||||||||||||||
Other costs | 234 | ||||||||||||||||||||
Total | $ | 3,195 | |||||||||||||||||||
Summary of Restructuring Activity | The following table sets forth the rollforward of the restructuring activity for the year ended September 30, 2012. | ||||||||||||||||||||
Balance, | Total | Cash | Other | Balance, | |||||||||||||||||
September 30, | Charges | Payments | September 30, | ||||||||||||||||||
2011 | 2012 | ||||||||||||||||||||
One-time termination benefits | $ | - | $ | 1,454 | $ | (1,006 | ) | $ | - | $ | 448 | ||||||||||
Lease related costs | - | 861 | (61 | ) | - | 800 | |||||||||||||||
Equipment moving costs and method transfers | - | 153 | (104 | ) | - | 49 | |||||||||||||||
Travel and relocation costs | - | 47 | (43 | ) | - | 4 | |||||||||||||||
Loss on sale of equipment | - | 446 | - | (539 | ) | (93 | ) | ||||||||||||||
Other costs | - | 234 | (37 | ) | - | 197 | |||||||||||||||
Total | $ | - | $ | 3,195 | $ | (1,251 | ) | $ | (539 | ) | $ | 1,405 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
Accounting Policies [Line Items] | ||
FDIC Insured limits | $250 | |
Allowance for doubtful accounts | 123 | 108 |
Depreciation expense | 2,217 | 2,085 |
Discount rate | 14.00% | |
Difference between the fair value and carrying value of goodwill | 3,700 | |
Goodwill | 1,383 | 1,383 |
Intangible assets, net | 54 | |
Amortization expense for intangible assets | 54 | 30 |
Advertising expense | 203 | 229 |
Stock based compensation expense | 83 | 153 |
Research and development | $542 | $534 |
Bioanalytical Services [Member] | ||
Accounting Policies [Line Items] | ||
Revenue growth rate | 5.00% | |
Preclinical Services [Member] | ||
Accounting Policies [Line Items] | ||
Revenue growth rate | 0.00% | |
Vetronics Units [Member] | ||
Accounting Policies [Line Items] | ||
Revenue growth rate | 0.00% | |
Buildings and Improvements [Member] | Minimum [Member] | ||
Accounting Policies [Line Items] | ||
Property and equipment, estimated useful life | 34 years | |
Buildings and Improvements [Member] | Maximum [Member] | ||
Accounting Policies [Line Items] | ||
Property and equipment, estimated useful life | 40 years | |
Machinery and Equipment [Member] | Minimum [Member] | ||
Accounting Policies [Line Items] | ||
Property and equipment, estimated useful life | 5 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Accounting Policies [Line Items] | ||
Property and equipment, estimated useful life | 10 years | |
Office Furniture and Fixtures [Member] | ||
Accounting Policies [Line Items] | ||
Property and equipment, estimated useful life | 10 years | |
Leasehold Improvements [Member] | ||
Accounting Policies [Line Items] | ||
Property and equipment, estimated useful life | 7 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Summary of Activity in Allowance for Doubtful Accounts) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Opening balance | $108 | $165 |
Charged to expense | 84 | 13 |
Accounts written off | 15 | -61 |
Accounts recovered | -84 | -9 |
Ending balance | $123 | $108 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Property and Equipment) (Details) (USD $) | Sep. 30, 2012 | Sep. 30, 2011 |
In Thousands, unless otherwise specified | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Land and improvements | $914 | $527 |
Buildings and improvements | 21,278 | 21,433 |
Machinery and equipment | 19,496 | 22,361 |
Office furniture and fixtures | 701 | 949 |
Construction in progress | 35 | 493 |
Property and equipment, gross | 42,424 | 45,763 |
Less: accumulated depreciation | -23,796 | -25,364 |
Net property and equipment | $18,628 | $20,399 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Components of Amortizable Intangible Assets) (Details) (FDA compliant facility, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
FDA compliant facility | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average life | 10 years | 10 years |
Gross Carrying Amount | $302 | $302 |
Accumulated Amortization | $302 | $248 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Assumptions Used to Compute Fair Value of Warrants) (Details) (USD $) | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2012 | Sep. 30, 2012 | 31-May-12 | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2011 |
In Thousands, except Per Share data, unless otherwise specified | Class A Warrant [Member] | Class B Warrant [Member] | Class B Warrant [Member] | Derivative Financial Instruments, Liabilities [Member] | Derivative Financial Instruments, Liabilities [Member] | Derivative Financial Instruments, Liabilities [Member] | ||
Class A Warrant [Member] | Class A Warrant [Member] | Class B Warrant [Member] | ||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Risk-free interest rate | 1.87% | 0.18% | 0.41% | 0.86% | 0.08% | |||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |||
Volatility of the Company's common stock | 106.91% | 116.01% | 117.30% | 111.44% | 74.43% | |||
Expected life of the options | 5 years | 1 year | 3 years 7 months 6 days | 4 years 7 months 6 days | 7 months 6 days | |||
Fair value per unit | $0.88 | $0.84 | $0.09 | |||||
Fair value of warrant liability | $1,213 | $1,286 | $0 |
RESTATEMENT_OF_PREVIOUSLY_ISSU2
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS (Statements of Operations) (Details) (USD $) | 6 Months Ended | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2011 |
Total revenue | $28,208 | $33,144 | ||
Total cost of revenue | 21,370 | 22,638 | ||
Gross profit | 6,838 | 10,506 | ||
Total operating expenses | 9,329 | 9,219 | ||
Restructuring charges | 3,195 | |||
Operating income (loss) | 452 | -2,943 | -5,686 | 1,287 |
Interest expense | -714 | -706 | ||
Change in fair value of warrant liability - decrease | 73 | 1,759 | ||
Other income | 12 | 12 | ||
Income (loss) before income taxes | -6,315 | 2,352 | ||
Income tax expense | 2 | 50 | ||
Net income (loss) | -6,317 | 2,302 | ||
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | -22 | -49 | ||
Comprehensive income (loss) | -6,339 | 2,253 | ||
Basic EPS | ($0.88) | ($0.74) | ||
Diluted EPS | ($0.88) | ($0.74) | ||
As Reported [Member] | ||||
Total revenue | 28,208 | 33,144 | ||
Total cost of revenue | 21,370 | 22,638 | ||
Gross profit | 6,838 | 10,506 | ||
Total operating expenses | 9,329 | 9,219 | ||
Restructuring charges | 3,195 | |||
Operating income (loss) | -5,686 | 1,287 | ||
Interest expense | -714 | -706 | ||
Change in fair value of warrant liability - decrease | ||||
Other income | 12 | 12 | ||
Income (loss) before income taxes | -6,388 | 593 | ||
Income tax expense | 2 | 50 | ||
Net income (loss) | -6,390 | 543 | ||
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | -22 | -49 | ||
Comprehensive income (loss) | -6,412 | 494 | ||
Basic EPS | ($0.89) | ($0.66) | ||
Diluted EPS | ($0.89) | ($0.66) | ||
Adjustment [Member] | ||||
Total revenue | ||||
Total cost of revenue | ||||
Gross profit | ||||
Total operating expenses | ||||
Restructuring charges | ||||
Operating income (loss) | ||||
Interest expense | ||||
Change in fair value of warrant liability - decrease | 73 | 1,759 | ||
Other income | ||||
Income (loss) before income taxes | 73 | 1,759 | ||
Income tax expense | ||||
Net income (loss) | 73 | 1,759 | ||
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | ||||
Comprehensive income (loss) | $73 | $1,759 | ||
Basic EPS | $0.01 | ($0.08) | ||
Diluted EPS | $0.01 | ($0.08) |
RESTATEMENT_OF_PREVIOUSLY_ISSU3
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS (Balance Sheet) (Details) (USD $) | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2010 |
In Thousands, unless otherwise specified | |||
Total assets | $26,975 | $32,346 | |
Total other current liabilities | 11,387 | 9,847 | |
Fair value of warrant liability | 1,213 | 1,286 | |
Total current liabilities | 12,600 | 11,133 | |
Other long-term debt | 5,998 | 6,913 | |
Total liabilities | 18,598 | 18,046 | |
Stockholders' equity: | |||
Preferred Shares | 1,335 | 2,135 | |
Common Shares | 1,871 | 1,698 | |
Additional paid-in capital | 19,635 | 18,592 | |
Accumulated deficit | -14,493 | -8,176 | |
Accumulated other comprehensive income | 29 | 51 | |
Total shareholders' equity | 8,377 | 14,300 | 10,667 |
Total liabilities and shareholders' equity | 26,975 | 32,346 | |
As Reported [Member] | |||
Total assets | 26,975 | 32,346 | |
Total other current liabilities | 11,387 | 9,847 | |
Fair value of warrant liability | |||
Total current liabilities | 11,387 | 9,847 | |
Other long-term debt | 5,998 | 6,913 | |
Total liabilities | 17,385 | 16,760 | |
Stockholders' equity: | |||
Preferred Shares | 1,335 | 2,135 | |
Common Shares | 1,871 | 1,698 | |
Additional paid-in capital | 20,451 | 19,408 | |
Accumulated deficit | -14,096 | -7,706 | |
Accumulated other comprehensive income | 29 | 51 | |
Total shareholders' equity | 9,590 | 15,586 | |
Total liabilities and shareholders' equity | 26,975 | 32,346 | |
Adjustment [Member] | |||
Total assets | |||
Total other current liabilities | |||
Fair value of warrant liability | 1,213 | 1,286 | |
Total current liabilities | 1,213 | 1,286 | |
Other long-term debt | |||
Total liabilities | 1,213 | 1,286 | |
Stockholders' equity: | |||
Preferred Shares | |||
Common Shares | |||
Additional paid-in capital | -816 | -816 | |
Accumulated deficit | -397 | -470 | |
Accumulated other comprehensive income | |||
Total shareholders' equity | -1,213 | -1,286 | |
Total liabilities and shareholders' equity |
SALE_OF_PREFERRED_SHARES_AND_W2
SALE OF PREFERRED SHARES AND WARRANTS (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 | 11-May-11 | 11-May-11 | Sep. 30, 2012 | Sep. 30, 2012 | 11-May-11 | Sep. 30, 2012 | 11-May-11 | 11-May-11 | Sep. 30, 2012 | Sep. 30, 2011 |
Unit [Member] | Unit [Member] | Class A Warrant [Member] | Class A Warrant [Member] | Class B Warrant [Member] | Class B Warrant [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | ||||
Schedule Of Stock And Warrants By Class [Line Items] | ||||||||||||
Issuance of common stock for stock dividends and stock purchase plan, shares | 5,506 | |||||||||||
Equity issuance, price per share | $1,000 | |||||||||||
Dividend rate | 6.00% | |||||||||||
Shares issued upon conversion of securities | 500 | |||||||||||
Number of shares of common stock called by warrants | 250 | 250 | ||||||||||
Exercise price of warrant | 2 | 2 | ||||||||||
"Make-whole" payment | $180 | |||||||||||
Preferred stock, stated value per share | $1,000 | $1,000 | ||||||||||
Warrant expiration date | 31-May-16 | 31-May-12 | ||||||||||
Proceeds from equity issuance | 4,606 | 4,600 | ||||||||||
Fair value of warrants | 1,072 | 3,045 | ||||||||||
Preferred stock, shares outstanding | 2,753,000 | 1,335 | 2,135 | |||||||||
Total possible dividend percentage over three years | 18.00% | |||||||||||
Common stock, price per share | $1.86 | |||||||||||
Preferred stock - recognition of full dividend/make-whole | -991 | 991,080 | ||||||||||
Fair value of outstanding preferred stock | 6,112 | |||||||||||
Gross proceeds from equity issuance | 5,506 | |||||||||||
Beneficial conversion feature | 2,461 | |||||||||||
Deemed dividend | 5,506 | |||||||||||
Shares converted | 4,171 | |||||||||||
Common stock, shares issued in conversion | 2,486,127 | |||||||||||
Common stock, shares issued for dividends | 135,793 | |||||||||||
Warrants outstanding | 1,376,500 | |||||||||||
Accrued dividends payable | $227,977 |
SALE_OF_PREFERRED_SHARES_AND_W3
SALE OF PREFERRED SHARES AND WARRANTS (Fair Value Assumptions) (Details) (USD $) | 12 Months Ended |
Sep. 30, 2012 | |
Warrant A [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Risk-free interest rate | 1.87% |
Dividend yield | 0.00% |
Volatility of the Company's common stock | 106.91% |
Expected life of the options | 5 years |
Fair value per unit | $1.43 |
Warrant B [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Risk-free interest rate | 0.18% |
Dividend yield | 0.00% |
Volatility of the Company's common stock | 116.01% |
Expected life of the options | 1 year |
Fair value per unit | $0.78 |
LOSS_PER_SHARE_Narrative_Detai
LOSS PER SHARE (Narrative) (Details) | 12 Months Ended | |
Sep. 30, 2012 | Sep. 30, 2011 | |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares not considered in computing diluted earnings per share | 1,376,500 | 2,753,000 |
Series A Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares not considered in computing diluted earnings per share | 936,000 | 2,753,000 |
LOSS_PER_SHARE_Reconciliation_
LOSS PER SHARE (Reconciliation of Computation of Basic Income or Loss Per Share to Diluted Income or Loss Per Share) (Details) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
Basic net loss per share: | ||
Net income (loss) | ($6,317) | $2,302 |
Less: Deemed dividend for Series A Preferred Shares | -5,506 | |
Less: Preferred dividend | -991 | |
Net loss applicable to common shareholders | -6,317 | -4,195 |
Weighted average common shares outstanding | 7,158 | 5,667 |
Basic net loss per share | ($0.88) | ($0.74) |
Diluted net loss per share: | ||
Net loss applicable to common shareholders | ($6,317) | ($4,195) |
Weighted average common shares outstanding | 7,158 | 5,667 |
Diluted net loss per share | ($0.88) | ($0.74) |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Sep. 30, 2012 | Sep. 30, 2011 |
In Thousands, unless otherwise specified | ||
INVENTORIES [Abstract] | ||
Raw materials | $1,407 | $1,352 |
Work in process | 283 | 379 |
Finished goods | 276 | 309 |
Gross inventories | 1,966 | 2,040 |
Obsolescence reserve | -310 | -404 |
Inventories | $1,656 | $1,636 |
LEASE_ARRANGEMENTS_Narrative_D
LEASE ARRANGEMENTS (Narrative) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
Schedule Of Capital And Operating Leased Assets [Line Items] | ||
Equipment financed under capital leases | $356 | $1,888 |
Termination of capital lease obligation | 322 | |
Equipment [Member] | ||
Schedule Of Capital And Operating Leased Assets [Line Items] | ||
Capital leased assets | 5,778 | 6,222 |
Capital lease, accumulated amortization | 4,775 | 4,086 |
Equipment financed under capital leases | 356 | 1,888 |
Building [Member] | ||
Schedule Of Capital And Operating Leased Assets [Line Items] | ||
Lease expiration | 31-Dec-23 | |
Number of years before "opt out" provision in force | 7 years | |
Rent expense | $1,284 | $441 |
LEASE_ARRANGEMENTS_Schedule_of
LEASE ARRANGEMENTS (Schedule of Future Minimum Lease Payments for Capital Leases) (Details) (USD $) | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |
Capital Leased Assets [Line Items] | |
2013 | $388 |
2014 | 307 |
2015 | 281 |
2016 | 214 |
2017 | 4 |
Total minimum lease payments due | 1,194 |
Principal [Member] | |
Capital Leased Assets [Line Items] | |
2013 | 330 |
2014 | 268 |
2015 | 259 |
2016 | 208 |
2017 | 4 |
Total minimum lease payments due | 1,069 |
Interest [Member] | |
Capital Leased Assets [Line Items] | |
2013 | 58 |
2014 | 39 |
2015 | 22 |
2016 | 6 |
2017 | |
Total minimum lease payments due | $125 |
LEASE_ARRANGEMENTS_Schedule_of1
LEASE ARRANGEMENTS (Schedule of Future Minimum Lease Payments for Operating Leases) (Details) (USD $) | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |
LEASE ARRANGEMENTS [Abstract] | |
2013 | $371 |
2014 | 370 |
2015 | 223 |
2016 | 13 |
Total minimum lease payments due | $977 |
DEBT_ARRANGEMENTS_Schedule_of_
DEBT ARRANGEMENTS (Schedule of Long-Term Debt) (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2012 | Sep. 30, 2011 | Jun. 30, 2010 | Sep. 30, 2012 | Sep. 30, 2011 | Jun. 30, 2010 | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2012 | Sep. 30, 2011 |
Mortgage Note Payable One [Member] | Mortgage Note Payable One [Member] | Mortgage Note Payable One [Member] | Mortgage Note Payable Two [Member] | Mortgage Note Payable Two [Member] | Mortgage Note Payable Two [Member] | Replacement Note Payable [Member] | Replacement Note Payable [Member] | Note Payable To Algo Holdings [Member] | Note Payable To Algo Holdings [Member] | |||
Debt Instrument [Line Items] | ||||||||||||
Long-tem debt | $5,842 | $6,577 | $3,236 | $3,573 | $1,532 | $1,674 | $1,074 | $1,245 | $85 | |||
Less current portion | 583 | 735 | ||||||||||
Long-term debt, noncurrent portion | 5,259 | 5,842 | ||||||||||
Long-term debt, parenthetical information | ||||||||||||
Debt instrument, frequency of periodic payments | monthly | monthly | monthly | monthly | ||||||||
Debt instrument, principal and interest payment | 40 | 17 | 14 | 10 | ||||||||
Debt instrument, interest rate | 4.10% | 7.10% | 4.10% | 7.10% | 7.50% | |||||||
Debt instrument, maturity date | 31-Oct-13 | 31-Oct-13 | 31-Oct-13 | 1-May-12 | ||||||||
Principal payment obligation | 583 | |||||||||||
Cash paid during the period for interest | $715 | $647 |
DEBT_ARRANGEMENTS_Narrative_De
DEBT ARRANGEMENTS (Narrative) (Details) (USD $) | Sep. 30, 2012 | Jul. 12, 2012 | Sep. 30, 2011 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2011 | Dec. 17, 2010 | Feb. 11, 2011 |
In Thousands, unless otherwise specified | sqft | acre | Revolving Line of Credit [Member] | Revolving Line of Credit [Member] | Amended Revolving Line of Credit [Member] | Notes Payable to Regions Bank [Member] | Mortgage Notes Payable, Maturing May 4, 2013 [Member] | Mortgage Notes Payable One and Two [Member] | Replacement Note Payable [Member] | Replacement Note Payable [Member] | Note Payable, Maturing December 18, 2010 [Member] | Mortgage Payable, Maturing February 11, 2011 | |
Minimum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Long-term debt | $5,842 | $6,577 | $5,800 | $5,786 | $4,768 | $1,074 | $1,245 | ||||||
Debt instrument, maturity date | 31-Jan-11 | 31-Jan-13 | 31-Oct-13 | 31-May-13 | 31-Oct-13 | ||||||||
Debt instrument, interest rate | 4.10% | 7.50% | |||||||||||
Debt instrument, frequency of periodic payments | monthly | monthly | monthly | ||||||||||
Debt instrument, principal payment | 47 | 38 | 14 | ||||||||||
Debt instrument, one-time principal payment | 500 | 500 | |||||||||||
Debt instrument, face amount | 1,341 | ||||||||||||
Debt instrument, variable interest reference rate | Citibanks' Prime Rate | LIBOR | 30-day LIBOR | ||||||||||
Debt instrument, basis spread on variable rate | 5.00% | 4.00% | 3.00% | ||||||||||
Debt instrument, minimum interest rate | 6.00% | 4.50% | |||||||||||
Fixed charge coverage ratio | 1.25 | ||||||||||||
Total liabilities to tangible net worth ratio | 2.1 | ||||||||||||
Debt instrument, effective interest rate | 8.25% | ||||||||||||
Line of credit, maximum borrowing capacity | 3,000 | ||||||||||||
Line of credit, frequency of periodic payments | monthly | ||||||||||||
Line of credit, periodic interest payments | 15 | ||||||||||||
Line of credit, frequency of facilities fee payments | annually | ||||||||||||
Line of credit, facilities fee, percentage | 2.00% | ||||||||||||
Line of credit, collateral monitoring fee, percentage | 0.20% | ||||||||||||
Line of credit, collateral | Borrowings under the Credit Agreement are secured by a blanket lien on our personal property, including certain eligible accounts receivable, inventory, and intellectual property assets, and a second mortgage on our West Lafayette and Evansville real estate and all common stock of our U.S. subsidiaries and 65% of the common stock of our non-United States subsidiary. | ||||||||||||
Line of credit, borrowings, based on eligible accounts receivable, percentage | 75.00% | ||||||||||||
Minimum net worth convenant requirement | 8,500 | 8,000 | |||||||||||
Line of credit, current borrowing capacity | 1,927 | ||||||||||||
Line of credit, amount outstanding | 1,444 | ||||||||||||
Acres of land | 120,000 | 7.25 | |||||||||||
Square foot of facility | 120,000 | ||||||||||||
Net book value of facility and land | 9,585 | ||||||||||||
Asking price | $12,500 |
INCOME_TAXES_Schedule_of_Defer
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) (USD $) | Sep. 30, 2012 | Sep. 30, 2011 |
In Thousands, unless otherwise specified | ||
Deferred tax assets - Current: | ||
Inventory | $202 | $236 |
Accrued compensation and vacation | 255 | 271 |
Accrued expenses and other | 252 | 118 |
Total current deferred tax assets | 709 | 625 |
Deferred tax liabilities - Current: | ||
Prepaid expenses | -74 | -116 |
Total net current deferred tax assets | 635 | 509 |
Deferred tax assets - Noncurrent: | ||
Domestic net operating loss carryforwards | 2,483 | 1,585 |
Stock compensation expense | 14 | 29 |
Foreign net operating loss | 2,334 | 1,326 |
Foreign tax credit carryover | 119 | 119 |
AMT credit carryover | 42 | 45 |
Total noncurrent deferred tax assets | 4,992 | 3,104 |
Deferred tax liabilities - Noncurrent: | ||
Unrealized gain/loss - warrant liability | -296 | -685 |
Basis difference for fixed assets | -459 | -562 |
Basis difference for intangibles | -21 | |
Total noncurrent deferred tax liabilities | -755 | -1,268 |
Total net noncurrent deferred tax assets | 4,237 | 1,836 |
Valuation allowance for net deferred tax assets | -4,872 | -2,345 |
Net deferred tax asset (liability) |
INCOME_TAXES_Schedule_of_the_P
INCOME TAXES (Schedule of the Provision (Benefit) for Income Taxes) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
Current: | ||
Federal | ($3) | $37 |
State and local | 5 | 13 |
Foreign | ||
Deferred: | ||
Federal | ||
State and local | ||
Foreign | ||
Income tax expense | $2 | $50 |
INCOME_TAXES_Reconciliation_of
INCOME TAXES (Reconciliation of Effective Income Tax Rate) (Details) | 12 Months Ended | |
Sep. 30, 2012 | Sep. 30, 2011 | |
INCOME TAXES [Abstract] | ||
Statutory federal income tax rate: | 34.00% | 34.00% |
Increases (decreases): | ||
State and local income taxes, net of Federal tax benefit, if applicable | -0.10% | 0.40% |
Nondeductable expenses | -0.50% | 2.90% |
Valuation allowance changes | -33.50% | -35.40% |
Other | 0.20% | |
Effective income tax rate | -0.10% | 2.10% |
INCOME_TAXES_Narrative_Details
INCOME TAXES (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2010 |
Income Taxes [Line Items] | |||
Restructuring charges | $3,195 | ||
Payments for income taxes | 12 | 8 | |
Liability for other uncertain income tax positions | 16 | 16 | 30 |
Reduction in gross uncertain tax positions | 14 | ||
Alternative Minimum Tax Credit Carryforward [Member] | |||
Income Taxes [Line Items] | |||
Tax credit carryforwards | 42 | ||
Foreign Tax Credit Carryforward [Member] | |||
Income Taxes [Line Items] | |||
Tax credit carryforwards | 119 | ||
Foreign Tax Authority [Member] | |||
Income Taxes [Line Items] | |||
Losses before income taxes from foreign operations | 3,636 | 745 | |
Net operating loss carry forwards | 8,854 | ||
Domestic Tax Authority [Member] | |||
Income Taxes [Line Items] | |||
Net operating loss carry forwards | 4,935 | ||
Expirations of operating loss carry forwards | September 30, 2014 through 2029 | ||
Valuation allowance | 2,538 | 1,021 | |
State [Member] | |||
Income Taxes [Line Items] | |||
Net operating loss carry forwards | 9,469 | ||
Expirations of operating loss carry forwards | September 30, 2014 through 2029 | ||
Reduction in gross uncertain tax positions | $14 |
INCOME_TAXES_Reconciliation_of1
INCOME TAXES (Reconciliation of Unrecognized Tax Benefits) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
INCOME TAXES [Abstract] | ||
Balance at beginning of the year | $16 | $30 |
Additions based on tax positions related to the current year | ||
Additions fror tax positions of prior years | ||
Reductions for tax positions of prior years | -14 | |
Settlements | ||
Balance at end of the year | $16 | $16 |
STOCKBASED_COMPENSATION_Narrat
STOCK-BASED COMPENSATION (Narrative) (Details) (USD $) | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2012 |
STOCK-BASED COMPENSATION [Abstract] | |
Common stock authorized to issuance under employee compensation plan | 500,000 |
Common stock available for issuance under employee compensation plan | 339,000 |
Unrecognized compensation cost related to non-vested stock options | $217 |
Unrecognized compensation cost, recognition period | 1 year 2 months 27 days |
Options outstanding that were granted outside of the plan | 125,000 |
STOCKBASED_COMPENSATION_Fair_V
STOCK-BASED COMPENSATION (Fair Value Assumptions) (Details) (Stock Options [Member]) | 12 Months Ended | |
Sep. 30, 2012 | Sep. 30, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.39% | 3.08% |
Dividend yield | 0.00% | 0.00% |
Volatility of the expected market price of the Company's common stock, minimum | 93.00% | 90.00% |
Volatility of the expected market price of the Company's common stock, maximum | 97.00% | 91.00% |
Expected life of the options (years) | 8 years | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life of the options (years) | 7 years | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life of the options (years) | 8 years |
STOCKBASED_COMPENSATION_Summar
STOCK-BASED COMPENSATION (Summary of Stock Option Activity) (Details) (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
Options (shares) | ||
Outstanding - October 1, | 673 | 705 |
Exercised | ||
Granted | 200 | 27 |
Terminated | -519 | -59 |
Outstanding - September 30, | 354 | 673 |
Exercisable - September 30, | 94 | |
Weighted-Average Exercise Price | ||
Outstanding - October 1, | $2.65 | $2.66 |
Exercised | ||
Granted | $1.30 | $2.24 |
Terminated | $2.58 | $2.54 |
Outstanding - September 30, | $1.99 | $2.65 |
Exercisable - September 30, | $3.83 | |
Weighted-Average Grant Date Fair Value | ||
Granted | $1.05 | $1.84 |
Outstanding - September 30, | $1.46 | $1.83 |
Exercisable - September 30, | $2.59 | |
Weighted-Average Remaining Contractual Life | ||
Outstanding - September 30, | 8 years | 7 years 2 months 12 days |
Exercisable - September 30, | 5 years 3 months 18 days | |
Aggregate Intrinsic Value | ||
Outstanding - September 30, | $42 | $69 |
Exercisable - September 30, | $7 |
STOCKBASED_COMPENSATION_Summar1
STOCK-BASED COMPENSATION (Summary of Non-Vested Options) (Details) (USD $) | 12 Months Ended |
Sep. 30, 2012 | |
Number of Shares | |
Non-vested options at October 1, 2011 | 385 |
Granted | 200 |
Vested | -128 |
Forfeited | -197 |
Non-vested options at September 30, 2012 | 260 |
Weighted-Average Grant Date Fair Value | |
Non-vested options at October 1, 2011 | 1.14 |
Granted | $1.05 |
Vested | $1.25 |
Forfeited | $1.09 |
Non-vested options at September 30, 2012 | 1.06 |
STOCKBASED_COMPENSATION_Summar2
STOCK-BASED COMPENSATION (Summary of Outstanding and Exercisable Options) (Details) (USD $) | 12 Months Ended |
Sep. 30, 2012 | |
$0.79 - 1.01 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum | $0.79 |
Range of Exercise Prices, maximum | $1.01 |
Shares Outstanding | 128,000 |
Weighted-Average Remaining Contractual Life | 8 years 3 months 26 days |
Weighted-Average Exercise Price | $0.97 |
Shares Exercisable | 24,000 |
Weighted-Average Exercise Price, Exercisable | $1.01 |
$1.02 - 4.59 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum | $1.02 |
Range of Exercise Prices, maximum | $4.59 |
Shares Outstanding | 155,000 |
Weighted-Average Remaining Contractual Life | 9 years 4 months 24 days |
Weighted-Average Exercise Price | $1.38 |
Shares Exercisable | 7,000 |
Weighted-Average Exercise Price, Exercisable | $1.35 |
$4.60 - 8.79 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum | $4.60 |
Range of Exercise Prices, maximum | $8.79 |
Shares Outstanding | 71,000 |
Weighted-Average Remaining Contractual Life | 4 years 2 months 27 days |
Weighted-Average Exercise Price | $5.19 |
Shares Exercisable | 62,000 |
Weighted-Average Exercise Price, Exercisable | $5.21 |
RETIREMENT_PLAN_Details
RETIREMENT PLAN (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
RETIREMENT PLAN [Abstract] | ||
Company's contribution to plan, as a percent of participant's total wages | 1.00% | |
Employer's match percentage | 22.00% | |
Maximum percentage of participant's contribution eligible for employer matching contribution | 10.00% | |
Maximum annual contribution, percent of participant's annual wages | 30.00% | |
Contribution expense | $17 | $15 |
SEGMENT_INFORMATION_Operating_
SEGMENT INFORMATION (Operating Segments) (Details) (USD $) | 6 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2011 |
Segment Reporting Information [Line Items] | ||||
Revenue: | $28,208 | $33,144 | ||
Operating income (loss): | 452 | -2,943 | -5,686 | 1,287 |
Interest Expense | 702 | 694 | ||
Change in fair value of warrant liability - decrease | 73 | 1,759 | ||
Other income | 12 | 12 | ||
Income (loss) before income taxes | -6,315 | 2,352 | ||
Identifiable assets: | 26,975 | 26,975 | 32,346 | |
Goodwill, net: | 1,383 | 1,383 | 1,383 | |
Intangible assets, net: | 54 | |||
Depreciation and amortization: | 2,278 | 2,134 | ||
Capital Expenditures: | 1,090 | 1,174 | ||
Service [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue: | 21,312 | 25,613 | ||
Operating income (loss): | -3,863 | 745 | ||
Identifiable assets: | 15,864 | 15,864 | 18,121 | |
Goodwill, net: | 1,009 | 1,009 | 1,009 | |
Intangible assets, net: | 54 | |||
Depreciation and amortization: | 2,036 | 1,899 | ||
Capital Expenditures: | 864 | 1,098 | ||
Product [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue: | 6,896 | 7,531 | ||
Operating income (loss): | 12 | 542 | ||
Identifiable assets: | 7,262 | 7,262 | 7,674 | |
Goodwill, net: | 374 | 374 | 374 | |
Intangible assets, net: | ||||
Depreciation and amortization: | 242 | 235 | ||
Capital Expenditures: | 226 | 76 | ||
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss): | -1,835 | |||
Identifiable assets: | $3,849 | $3,849 | $6,551 |
SEGMENT_INFORMATION_Geographic
SEGMENT INFORMATION (Geographical Information) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales to External Customers: | $28,208 | $33,144 |
Long-lived assets | 20,083 | 21,973 |
North America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales to External Customers: | 25,042 | 29,451 |
Long-lived assets | 20,083 | 20,872 |
Pacific Rim [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales to External Customers: | 961 | 912 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales to External Customers: | 1,858 | 2,542 |
Long-lived assets | 1,101 | |
Other [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales to External Customers: | $347 | $239 |
SEGMENT_INFORMATION_Narrative_
SEGMENT INFORMATION (Narrative) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
Revenue, Major Customer [Line Items] | ||
Restructuring charges | $3,195 | |
Services Segment [Member] | ||
Revenue, Major Customer [Line Items] | ||
Restructuring charges | 1,360 | |
Corporate [Member] | ||
Revenue, Major Customer [Line Items] | ||
Restructuring charges | $1,835 | |
Gilead Sciences, Inc. [Member] | ||
Revenue, Major Customer [Line Items] | ||
Percentage of total revenues | 7.30% | 14.50% |
Percentage of trade accounts receivable | 7.40% | 6.30% |
Pfizer, Inc. [Member] | ||
Revenue, Major Customer [Line Items] | ||
Percentage of total revenues | 3.40% | 5.20% |
Percentage of trade accounts receivable | 8.40% | 4.20% |
SETTLEMENT_OF_CONTINGENT_LIABI1
SETTLEMENT OF CONTINGENT LIABILITY (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2012 |
SETTLEMENT OF CONTINGENT LIABILITY [Abstract] | |
Contingent liability, annual rent payments | $800 |
Settlement agreement for cancellation of obligations under lease, agreed contribution amount | 250 |
Settlement consideration, monthly installments | 10 |
Discounted liability | $216 |
RESTRUCTURING_Narrative_Detail
RESTRUCTURING (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 | Jul. 12, 2012 |
sqft | acre | ||
Restructuring Cost and Reserve [Line Items] | |||
Acres of headquarters facility | 120,000 | 7.25 | |
Restructuring charges | $3,195 | ||
Lease Related Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 861 | ||
Services Segment [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 1,360 | ||
Restructuring costs | 1,360 | ||
Products Segment [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 0 | ||
Corporate Expenses [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 1,835 | ||
Restructuring costs | $1,835 |
RESTRUCTURING_Summary_of_Restr
RESTRUCTURING (Summary of Restructuring Costs) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $3,195 | |
One-time Termination Benefits [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 1,454 | |
Lease Related Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 861 | |
Equipment Moving Costs And Method Transfers [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 153 | |
Travel and Relocation Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 47 | |
Loss on Sale of Equipment [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 446 | |
Other Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $234 |
RESTRUCTURING_Summary_of_Restr1
RESTRUCTURING (Summary of Restructuring Activity) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
Restructuring Cost and Reserve [Line Items] | ||
Balance | ||
Total Charges | 3,195 | |
Cash Payments | -1,251 | |
Other | -539 | |
Balance | 1,405 | |
One-time Termination Benefits [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Balance | ||
Total Charges | 1,454 | |
Cash Payments | -1,006 | |
Other | ||
Balance | 448 | |
Lease Related Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Balance | ||
Total Charges | 861 | |
Cash Payments | -61 | |
Other | ||
Balance | 800 | |
Equipment Moving Costs And Method Transfers [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Balance | ||
Total Charges | 153 | |
Cash Payments | -104 | |
Other | ||
Balance | 49 | |
Travel and Relocation Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Balance | ||
Total Charges | 47 | |
Cash Payments | -43 | |
Other | ||
Balance | 4 | |
Loss on Sale of Equipment [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Balance | ||
Total Charges | 446 | |
Cash Payments | ||
Other | -539 | |
Balance | -93 | |
Other Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Balance | ||
Total Charges | 234 | |
Cash Payments | -37 | |
Other | ||
Balance | $197 |
SELFINSURANCE_Details
SELF-INSURANCE (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2011 |
SELF-INSURANCE [Abstract] | ||
Self insurance exposure for individual claims | $60 | |
Minimum annual aggregate attachment point | 2,072 | |
Self-insured employee health plan expenses | $1,231 | $1,089 |
MANAGEMENTS_PLAN_Details
MANAGEMENT'S PLAN (Details) (USD $) | 6 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2011 |
MANAGEMENT'S PLAN [Abstract] | ||||
Revenue growth (decline), percent | -14.90% | |||
Gross margin growth (decline), percent | 60.50% | -34.90% | ||
Restructuring charges | $3,195 | |||
Net income (loss) | -6,317 | 2,302 | ||
Operating expenses growth (decline), percent | -32.50% | |||
Operating income (loss) | 452 | -2,943 | -5,686 | 1,287 |
Capital expenditures growth (decline), percent | -7.20% | |||
Debt and lease obligations, current | $1,300 | $1,300 |