Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Mar. 31, 2015 | 11-May-15 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 | |
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 | 8,076,378 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $536 | $981 |
Accounts receivable | ||
Trade, net of allowance $52 at March 31, 2015 and $54 at September 30, 2014, respectively | 3,029 | 2,557 |
Unbilled revenues and other | 722 | 878 |
Inventories | 1,672 | 1,564 |
Prepaid expenses | 445 | 675 |
Total current assets | 6,404 | 6,655 |
Property and equipment, net | 15,451 | 15,949 |
Goodwill | 1,009 | 1,009 |
Debt issue costs | 108 | 122 |
Other assets | 36 | 39 |
Total assets | 23,008 | 23,774 |
Current liabilities: | ||
Accounts payable | 2,550 | 2,672 |
Accrued expenses | 1,300 | 1,842 |
Customer advances | 3,482 | 2,990 |
Income tax accruals | 18 | 20 |
Revolving line of credit | 202 | |
Fair value of warrant liability | 357 | 676 |
Current portion of capital lease obligation | 259 | 279 |
Current portion of long-term debt | 786 | 786 |
Total current liabilities | 8,752 | 9,467 |
Fair value of interest rate swap | 46 | 21 |
Capital lease obligation, less current portion | 167 | 298 |
Long-term debt, less current portion | 4,059 | 4,452 |
Total liabilities | 13,024 | 14,238 |
Stockholders' equity: | ||
Preferred shares, authorized 1,000,000 shares, no par value: 1,185 Series A shares at $1,000 stated value issued and outstanding at March 31, 2015 and September 30, 2014, respectively | 1,185 | 1,185 |
Common shares, no par value: Authorized 19,000,000 shares; 8,076,106 shares and 8,075,335 issued and outstanding at March 31, 2015 and September 30, 2014, respectively | 1,981 | 1,980 |
Additional paid-in capital | 21,202 | 21,154 |
Accumulated deficit | -14,458 | -14,790 |
Accumulated other comprehensive income | 74 | 7 |
Total shareholders' equity | 9,984 | 9,536 |
Total liabilities and shareholders' equity | 23,008 | 23,774 |
Series A Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred shares, authorized 1,000,000 shares, no par value: 1,185 Series A shares at $1,000 stated value issued and outstanding at March 31, 2015 and September 30, 2014, respectively | $1,185 | $1,185 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Sep. 30, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Allowance for doubtful accounts | $52 | $54 |
Common stock, no par value | ||
Common stock, shares authorized | 19,000,000 | 19,000,000 |
Common stock, shares issued | 8,076,106 | 8,075,335 |
Common stock, shares outstanding | 8,076,106 | 8,075,335 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, no par value | ||
Preferred stock, shares issued | 1,185 | 1,185 |
Preferred stock, shares outstanding | 1,185 | 1,185 |
Preferred stock, stated value per share | $1,000 | $1,000 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) [Abstract] | ||||
Service revenue | $4,530 | $4,526 | $8,928 | $9,442 |
Product revenue | 1,196 | 1,386 | 2,643 | 2,690 |
Total revenue | 5,726 | 5,912 | 11,571 | 12,132 |
Cost of service revenue | 3,242 | 3,330 | 6,498 | 6,653 |
Cost of product revenue | 682 | 570 | 1,367 | 1,322 |
Total cost of revenue | 3,924 | 3,900 | 7,865 | 7,975 |
Gross profit | 1,802 | 2,012 | 3,706 | 4,157 |
Operating expenses: | ||||
Selling | 426 | 479 | 762 | 916 |
Research and development | 138 | 170 | 329 | 313 |
General and administrative | 1,210 | 1,258 | 2,445 | 2,361 |
Total operating expenses | 1,774 | 1,907 | 3,536 | 3,590 |
Operating income | 28 | 105 | 170 | 567 |
Interest expense | -75 | -121 | -156 | -285 |
Change in fair value of warrant liability - decrease (increase) | 199 | -200 | 319 | -1,161 |
Other income (expense) | -1 | 4 | 1 | 5 |
Net income (loss) before income taxes | 151 | -212 | 334 | -874 |
Income taxes | 1 | 7 | 2 | 7 |
Net income (loss) | 150 | -219 | 332 | -881 |
Other comprehensive income (loss): | ||||
Fair value adjustment of interest rate swap | -15 | -25 | ||
Foreign currency translation adjustment | 51 | -8 | 93 | -34 |
Comprehensive income (loss) | $186 | ($227) | $400 | ($915) |
Basic net income (loss) per share | $0.02 | ($0.03) | $0.04 | ($0.11) |
Diluted net income (loss) per share | ($0.01) | ($0.03) | $0 | ($0.11) |
Weighted common shares outstanding: | ||||
Basic | 8,076 | 7,964 | 8,076 | 7,848 |
Diluted | 8,105 | 7,964 | 8,863 | 7,848 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating activities: | ||
Net income (loss) | $332 | ($881) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 730 | 799 |
Change in fair value of warrant liability - (decrease) increase | -319 | 1,161 |
Employee stock compensation expense | 48 | 45 |
Provision for doubtful accounts | -2 | 2 |
Loss on sale of property and equipment | 2 | 1 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -314 | 442 |
Inventories | -108 | -128 |
Income tax accruals | -8 | |
Prepaid expenses and other assets | 243 | -488 |
Accounts payable | -122 | -180 |
Accrued expenses | -542 | -32 |
Customer advances | 492 | 272 |
Net cash provided by operating activities | 440 | 1,005 |
Investing activities: | ||
Capital expenditures | -231 | -150 |
Net cash used by investing activities | -231 | -150 |
Financing activities: | ||
Payments of long-term debt | -393 | -301 |
Payments of debt issuance costs | -60 | |
Payments on revolving line of credit | -3,532 | -9,543 |
Borrowings on revolving line of credit | 3,330 | 8,128 |
Proceeds from Class A warrant exercises | 161 | |
Payments on capital lease obligations | -151 | -131 |
Net cash used by financing activities | -746 | -1,746 |
Effect of exchange rate changes | 92 | -34 |
Net decrease in cash and cash equivalents | -445 | -925 |
Cash and cash equivalents at beginning of period | 981 | 1,304 |
Cash and cash equivalents at end of period | 536 | 379 |
Supplemental disclosure of non-cash financing activities: | ||
Preferred stock dividends paid in common shares | -36 | |
Fair value of warrants exercised | $839 |
DESCRIPTION_OF_THE_BUSINESS_AN
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | 6 Months Ended | ||
Mar. 31, 2015 | |||
DESCRIPTION OF THE BUSINESS [Abstract] | |||
DESCRIPTION OF THE BUSINESS | 1 | DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | |
Bioanalytical Systems, Inc. and its subsidiaries (“We,” the “Company” or “BASi”) engage in contract laboratory research services and other services related to pharmaceutical development. We also manufacture scientific instruments for life sciences research, which we sell with related software for use in industrial, governmental and academic laboratories. Our customers are located throughout the world. | |||
We have prepared the accompanying unaudited interim condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”), and therefore should be read in conjunction with our audited consolidated financial statements, and the notes thereto, included in the Company's annual report on Form 10-K for the year ended September 30, 2014. In the opinion of management, the condensed consolidated financial statements for the three and six months ended March 31, 2015 and 2014 include all adjustments which are necessary for a fair presentation of the results of the interim periods and of our financial position at March 31, 2015. The results of operations for the three and six months ended March 31, 2015 are not necessarily indicative of the results for the year ending September 30, 2015. | |||
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
STOCK-BASED COMPENSATION [Abstract] | |||||||||||||
STOCK-BASED COMPENSATON | 2 | STOCK-BASED COMPENSATION | |||||||||||
The 2008 Stock Option Plan (“the Plan”) is used to promote our long-term interests by providing a means of attracting and retaining officers, directors and key employees and aligning their interests with those of our shareholders. The Plan is described more fully in Note 9 in the Notes to the Consolidated Financial Statements in our Form 10-K for the year ended September 30, 2014. All options granted under the Plan had 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. We 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. The Compensation Committee may also issue non-qualified stock option grants with vesting periods different from the Plan. As of March 31, 2015, there are 155 shares underlying options outstanding that were granted outside of the Plan. The assumptions used are detailed in Note 9 to the Consolidated Financial Statements in our Form 10-K for the year ended September 30, 2014. Stock based compensation expense for the three and six months ended March 31, 2014 was $0 and $45, respectively. Stock based compensation expense for the three and six months ended March 31, 2015 was $19 and $48, respectively. | |||||||||||||
A summary of our stock option activity for the six months ended March 31, 2015 is as follows (in thousands except for share prices): | |||||||||||||
Options | Weighted- | Weighted- | |||||||||||
(shares) | Average | Average | |||||||||||
Exercise Price | Grant Date | ||||||||||||
Fair Value | |||||||||||||
Outstanding - October 1, 2014 | 426 | $ | 1.83 | $ | 1.41 | ||||||||
Exercised | (2 | ) | 1.4 | 1.15 | |||||||||
Granted | 35 | 2.38 | 1.98 | ||||||||||
Foreitures | (24 | ) | 4.39 | 3.02 | |||||||||
Outstanding - March 31, 2015 | 435 | $ | 1.73 | $ | 1.37 | ||||||||
During the six months ended March 31, 2015, 2 options were exercised cashlessly and we granted options for 35 common shares under the Plan. The fair value of the option grant is estimated on the date of the grant. The weighted-average assumptions used to compute the fair value of these options were as follows: | |||||||||||||
Risk-free interest rate | 1.93% - 2.13 | % | |||||||||||
Dividend yield | 0 | % | |||||||||||
Expected volatility | 88.00% - 100.06 | % | |||||||||||
Expected life of the options (years) | 8 | ||||||||||||
Forfeitures | 3 | % | |||||||||||
INCOME_LOSS_PER_SHARE
INCOME (LOSS) PER SHARE | 6 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
INCOME (LOSS) PER SHARE [Abstract] | |||||||||||||||||||||||||
INCOME (LOSS) PER SHARE | 3 | INCOME (LOSS) PER SHARE | |||||||||||||||||||||||
We compute basic income (loss) per share using the weighted average number of common shares outstanding. | |||||||||||||||||||||||||
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 and 592 common shares issuable upon conversion of preferred shares were not considered in computing diluted earnings per share for the three months ended March 31, 2015 because they were anti-dilutive. Shares issuable upon exercise of options, warrants for 810 common shares and 595 common shares issuable upon conversion of preferred shares also were not considered in computing diluted earnings per share for the three and six months ended March 31, 2014, respectively, because they were also anti-dilutive. | |||||||||||||||||||||||||
The following table reconciles our computation of basic net income (loss) per share to diluted net loss per share: | |||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
Basic net income (loss) per share: | |||||||||||||||||||||||||
Net income (loss) applicable to common shareholders | $ | 150 | $ | (219 | ) | $ | 332 | $ | (881 | ) | |||||||||||||||
Weighted average common shares outstanding | 8,076 | 7,964 | 8,076 | 7,848 | |||||||||||||||||||||
Basic net income (loss) per share | $ | 0.02 | $ | (0.03 | ) | $ | 0.04 | $ | (0.11 | ) | |||||||||||||||
Diluted net loss per share: | |||||||||||||||||||||||||
Net Income (loss) applicable to common shareholders | $ | 150 | $ | (219 | ) | $ | 332 | $ | (881 | ) | |||||||||||||||
Change in Fair Value of Warrant Liability | (199 | ) | - | (319 | ) | - | |||||||||||||||||||
Diluted net income (loss) applicable to common shareholders | $ | (49 | ) | $ | (219 | ) | $ | 13 | $ | (881 | ) | ||||||||||||||
Weighted average common shares outstanding | 8,076 | 7,964 | 8,076 | 7,848 | |||||||||||||||||||||
Plus: Incremental shares from assumed conversions: | |||||||||||||||||||||||||
Series A preferred shares | - | - | 592 | - | |||||||||||||||||||||
Class A warrants | 29 | - | 64 | - | |||||||||||||||||||||
Stock options/shares | - | - | 131 | - | |||||||||||||||||||||
Diluted weighted average common shares outstanding | 8,105 | 7,964 | 8,863 | 7,848 | |||||||||||||||||||||
Diluted net loss per share: | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0 | $ | (0.11 | ) | ||||||||||||||
INVENTORIES
INVENTORIES | 6 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
INVENTORIES [Abstract] | |||||||||
INVENTORIES | 4 | INVENTORIES | |||||||
Inventories consisted of the following: | |||||||||
March 31, | September 30, | ||||||||
2015 | 2014 | ||||||||
Raw materials | $ | 1,280 | $ | 1,228 | |||||
Work in progress | 329 | 295 | |||||||
Finished goods | 388 | 340 | |||||||
$ | 1,997 | $ | 1,863 | ||||||
Obsolescence reserve | (325 | ) | (299 | ) | |||||
$ | 1,672 | $ | 1,564 | ||||||
SEGMENT_INFORMATION
SEGMENT INFORMATION | 6 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
SEGMENT INFORMATION [Abstract] | |||||||||||||||||||||||||
SEGMENT INFORMATION | 5 | SEGMENT INFORMATION | |||||||||||||||||||||||
We operate in two principal segments - 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. Our accounting policies in these segments are the same as those described in the summary of significant accounting policies found in Note 2 to the Consolidated Financial Statements in our annual report on Form 10-K for the year ended September 30, 2014. | |||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Service | $ | 4,530 | $ | 4,526 | $ | 8,928 | $ | 9,442 | |||||||||||||||||
Product | 1,196 | 1,386 | 2,643 | 2,690 | |||||||||||||||||||||
$ | 5,726 | $ | 5,912 | $ | 11,571 | $ | 12,132 | ||||||||||||||||||
Operating income (loss): | |||||||||||||||||||||||||
Service | $ | 60 | $ | (38 | ) | $ | 81 | $ | 377 | ||||||||||||||||
Product | (32 | ) | 143 | 89 | 190 | ||||||||||||||||||||
$ | 28 | $ | 105 | $ | 170 | $ | 567 | ||||||||||||||||||
Interest expense | (75 | ) | (121 | ) | (156 | ) | (285 | ) | |||||||||||||||||
Change in fair value of warrant liability – decrease (increase) | 199 | (200 | ) | 319 | (1,161 | ) | |||||||||||||||||||
Other income (expense) | (1 | ) | 4 | 1 | 5 | ||||||||||||||||||||
Net income (loss) before income taxes | $ | 151 | $ | (212 | ) | $ | 334 | $ | (874 | ) | |||||||||||||||
INCOME_TAXES
INCOME TAXES | 6 Months Ended | |
Mar. 31, 2015 | ||
INCOME TAXES [Abstract] | ||
INCOME TAXES | 6 | INCOME TAXES |
We use the asset and liability method of accounting for income taxes. We recognize deferred tax assets and liabilities 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 carry forwards. We measure deferred tax assets and liabilities 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. We recognize the effect on deferred tax assets and liabilities of a change in tax rates 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 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. We measure the amount of the accrual for which an exposure exists 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 March 31, 2015 and September 30, 2014, we had a $16 liability for uncertain income tax positions. The difference between the federal statutory rate of 34% and our effective rate of 0.5% is due to changes in our valuation allowance on our net deferred tax assets. | ||
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. | ||
We file income tax returns in the U.S and several U.S. states. We remain subject to examination by taxing authorities in the jurisdictions in which we have filed returns for years after 2009. | ||
DEBT
DEBT | 6 Months Ended | |
Mar. 31, 2015 | ||
DEBT [Abstract] | ||
DEBT | 7 | DEBT |
Note payable | ||
Prior to obtaining the new credit facility described below, we had a term loan from Regions Bank (“Regions”), which was secured by mortgages on our facilities in West Lafayette and Evansville, Indiana. | ||
On October 31, 2013, we executed a seventh amendment with Regions to extend the note payable maturity date to October 31, 2014. The unpaid principal on the note was incorporated into a replacement note payable for $5,205 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 was secured by real estate at our West Lafayette and Evansville, Indiana locations. | ||
Regions required us to maintain a fixed charge coverage ratio of not less than 1.25 to 1.00 and a total liabilities to tangible net worth ratio of not greater than 2.10 to 1.00. Failure to comply with those covenants would have been a default under the Regions loan, requiring us to negotiate with Regions regarding loan modifications or waivers. If we were unable to obtain such modifications or waivers, Regions could have accelerated the maturity of the loan and caused a cross default with our other lender. The Regions loan agreements contained cross-default provisions with each other and formerly with the revolving line of credit with EGC described below that was terminated in January 2014. | ||
Revolving Line of Credit | ||
On January 31, 2014, we paid off the remaining balance on our $3,000 revolving line of credit agreement (“Credit Agreement”) with EGC. Pursuant to the terms of the Credit Agreement, the line of credit would have automatically renewed on January 31, 2014 unless either party gave a 60-day notice of intent to terminate or withdraw. On October 30, 2013, we informed EGC of our intent not to renew the line of credit on January 31, 2014 and the line of credit terminated on that date. | ||
During the first four months of fiscal 2014, borrowings under the Credit Agreement bore interest at an annual rate equal to Citibank's Prime Rate plus five percent (5%) with minimum monthly interest of $15. Interest was paid monthly. The line of credit also carried an annual facilities fee of 2% and a 0.2% collateral monitoring fee. Borrowings under the Credit Agreement were 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 were calculated based on 75% of eligible accounts receivable. Under the Credit Agreement, as amended, the Company had agreed to restrict advances to subsidiaries, limit additional indebtedness and capital expenditures and maintain a minimum tangible net worth of at least $8,000. The Credit Agreement also contained cross-default provisions with the Regions loan and any future EGC loans. | ||
Current Credit Facility | ||
On May 14, 2014, we entered into a Credit Agreement (“Agreement”) with Huntington Bank. The Agreement includes both a term loan and a revolving loan and is secured by mortgages on our facilities in West Lafayette and Evansville, Indiana and liens on our personal property. | ||
The term loan for $5,500 bears interest at LIBOR plus 325 basis points with monthly principal payments of approximately $65, plus interest. The term loan matures in May 2019. On May 15, 2014, we used the proceeds from the term loan to pay off the Regions replacement note payable. The balance on the term loan at March 31, 2015 and September 30, 2014 was $4,845 and $5,238, respectively. | ||
The revolving loan for $2,000 matures in May 2016 and bears interest at LIBOR plus 300 basis points with interest paid monthly. The revolving loan also carries a facility fee of .25%, paid quarterly, for the unused portion of the revolving loan. The revolving loan includes an annual clean-up provision that requires the Company to maintain a balance of not more than 20% of the maximum loan of $2,000 for a period of 30 days in any 12 month period while the revolving loan is outstanding. The revolving loan balance was $0 and $202 at March 31, 2015 and September 30, 2014, respectively. | ||
As of March 31, 2015, the Agreement required us to maintain a fixed charge coverage ratio of not less than 1.10 to 1.00. The Agreement also requires us to maintain a maximum total leverage ratio of not greater than 3.00 to 1.00 from the date of the Agreement through September 30, 2015 and 2.50 to 1.00 commencing after October 1, 2015 until maturity. The Agreement also contains various other covenants, including restrictions on the incurrence of certain indebtedness, liens, investments, acquisitions, asset sales and cash dividends. As of December 31, 2014 and March 31, 2015, we were not incompliance with the fixed charge coverage ratio due to depressed operating income in the first half of the current fiscal year. We were in compliance with all other covenants, including the maximum total leverage ratio, as of December 31, 2014 and March 31, 2015. | ||
On May 14, 2015, we executed a first amendment to the Agreement with Huntington Bank. As part of the amendment, Huntington Bank waived our noncompliance with the fixed charge coverage ratio for the periods ended December 31, 2014 and March 31, 2015, respectively. Also, the fixed charge coverage ratio was amended to not less than 1.05 to 1.00 for the fiscal quarters ending June 30, 2015, September 30, 2015 and December 31, 2015, respectively. The ratio returns to not less than 1.10 to 1.00 for the period ending March 31, 2016 until maturity. The fixed charge coverage ratio calculation was also amended to exclude up to $1,000 in capital expenditures related to the building renovation costs associated with the lease agreement with Cook Biotech, Inc. executed in January 2015. | ||
We entered into an interest rate swap agreement with respect to the above loans to fix the interest rate with respect to 60% of the value of the term loan at approximately 5.0%. We entered into this derivative transaction to hedge interest rate risk of the related debt obligation and not to speculate on interest rates. The changes in the fair value of the interest rate swap are recorded in Accumulated Other Comprehensive Income (AOCI) to the extent effective. We assess on an ongoing basis whether the derivative that is used in the hedging transaction is highly effective in offsetting changes in cash flows of the hedged debt. The terms of the interest rate swap match the terms of the underlying debt resulting in no ineffectiveness. | ||
We incurred $134 of costs in connection with the issuance of the credit facility. These costs were capitalized and are being amortized to interest expense over five years based on the contractual term of the credit facility. As of March 31, 2015 and September 30, 2014, the unamortized portion of debt issuance costs related to the credit facility was $108 and $122, respectively, and was included in debt issue costs, net on the consolidated balance sheets. | ||
RESTRUCTURING
RESTRUCTURING | 6 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
RESTRUCTURING [Abstract] | |||||||||||||||||||||
RESTRUCTURING | 8 | 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 and closed our facility and bioanalytical laboratory in Warwickshire, United Kingdom. We continue to sell our products globally while further consolidating delivery of our CRO services into our Indiana locations. | |||||||||||||||||||||
We reserved for lease payments at the cease use date for our UK facility 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. In the first quarter of fiscal 2013, we began amortizing into general and administrative expense, equally through the cease use date, the estimated rent income of $200 when the reserve was originally established. We have been unsuccessful at subleasing the facility. Based on these matters, we have $1,000 reserved for UK lease related costs at March 31, 2015. | |||||||||||||||||||||
The following table sets forth the roll forward of the restructuring activity for the six months ended March 31, 2015. | |||||||||||||||||||||
Balance, | Total | Cash | Other | Balance, | |||||||||||||||||
September 30, | Charges | Payments | March 31, | ||||||||||||||||||
2014 | 2015 | ||||||||||||||||||||
Lease related costs | $ | 961 | $ | 39 | $ | - | $ | - | $ | 1,000 | |||||||||||
Other costs | 117 | - | - | - | 117 | ||||||||||||||||
Total | $ | 1,078 | $ | 39 | $ | - | $ | - | $ | 1,117 | |||||||||||
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. |
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 | FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||
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. | ||||||||||||
In May 2011, we issued Class A and B Warrants. The Class B Warrants expired in May 2012 and the liability was reduced to zero. The Class A Warrants expire in May 2016 and are (and the Class B Warrants were) measured at fair value on a recurring basis. We recorded the 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). The assumptions used to compute the fair value of the Class A warrants at March 31, 2015 and September 30, 2014 are as follows: | |||||||||||||
31-Mar-15 | 30-Sep-14 | ||||||||||||
Risk-free interest rate | 0.3 | % | 0.41 | % | |||||||||
Dividend yield | 0 | % | 0 | % | |||||||||
Volatility of the Company's common stock | 51.28 | % | 63.58 | % | |||||||||
Expected life of the options (years) | 1.1 | 1.6 | |||||||||||
Fair value per unit | $ | 0.447 | $ | 0.846 | |||||||||
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 carrying value of the note payable approximates fair value due to the variable nature of the interest rates. | |||||||||||||
We use an interest rate swap, designated as a hedge, to fix 60% of the term loan debt from our credit facility with Huntington Bank. We did not enter into this derivative transaction to speculate on interest rates, but to hedge interest rate risk. The swap is recognized as a liability on the balance sheet at its fair value. The fair value is determined utilizing a cash flow model that takes into consideration interest rates and other inputs observable in the market from similar types of instruments, and is therefore considered a level 2 measurement. | |||||||||||||
The following table summarizes fair value measurements by level as of March 31, 2015, for the Company's financial liabilities measured at fair value on a recurring basis: | |||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||
Interest rate swap agreement | $ | - | $ | 46 | $ | - | |||||||
Class A warrant liability | $ | - | $ | 357 | $ | - | |||||||
The following table summarizes fair value measurements by level as of September 30, 2014, for the Company's financial liabilities measured at fair value on a recurring basis: | |||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||
Interest rate swap agreement | $ | - | $ | 21 | $ | - | |||||||
Class A warrant liability | $ | - | $ | 676 | $ | - | |||||||
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract] | |||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 10 | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||||||
The changes in accumulated other comprehensive income (loss) by component were as follows: | |||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
31-Mar-15 | 31-Mar-15 | ||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
Foreign currency translation | |||||||||||||||||||||||||
Balance, beginning of period | $ | 69 | $ | 6 | $ | 27 | $ | 32 | |||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||||
Foreign currency translation adjustments | 51 | (8 | ) | 93 | (34 | ) | |||||||||||||||||||
Balance, end of period | $ | 120 | $ | (2 | ) | $ | 120 | $ | (2 | ) | |||||||||||||||
Interest rate swap | |||||||||||||||||||||||||
Balance, beginning of period | $ | (31 | ) | $ | - | $ | (21 | ) | $ | - | |||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||||
Fair value adjustment | (15 | ) | - | (25 | ) | - | |||||||||||||||||||
Balance, end of period | $ | (46 | ) | $ | - | $ | (46 | ) | $ | - | |||||||||||||||
Total accumulated other comprehensive income (loss) | $ | 74 | $ | (2 | ) | $ | 74 | $ | (2 | ) | |||||||||||||||
No amounts have been reclassified from accumulated other comprehensive income (loss) into the condensed consolidated statement of operations. | |||||||||||||||||||||||||
MANAGEMENTS_PLAN
MANAGEMENT'S PLAN | 6 Months Ended | ||
Mar. 31, 2015 | |||
MANAGEMENT'S PLAN [Abstract] | |||
MANAGEMENT'S PLAN | 11 | MANAGEMENT'S PLAN | |
Our long-term strategic objective is to maximize the Company's intrinsic value per share. While we remain focused on reducing our costs through productivity and better processes and a continued emphasis on generating free cash flow, we are dedicated to the strategies that drive our top-line growth. We are intensifying our efforts to improve our processes, embrace change and wisely employ our stronger liquidity position. | |||
Over the past several periods, we have focused on targeted initiatives that were designed to stabilize our business, improve our liquidity and lower our break-even point. While we remain dedicated to increasing our productivity and internal processes with the intent to continue to grow free cash flow, we are actively pursuing strategies to drive top-line growth. In the remainder of fiscal 2015, we plan to continue focus on sales execution, operational excellence and building strategic partnerships with pharmaceutical and biotechnology companies, to differentiate our company and create value for our clients and shareholders. By improving revenue growth and managing our costs effectively, combined with the availability of our credit facility with Huntington Bank with substantially more favorable terms than the long-term debt and line of credit it replaces, we enhance our ability to implement our growth plan. We have taken several steps to strengthen our management team in roles that will be vital to helping drive our top line performance. We are expanding our marketing efforts by building on the Company's inherent strengths in specialty assay and drug discovery, regulatory excellence, and our Culex® automated sampling system. We recognize that our growth depends upon our ability to continually improve and create new client relationships. In addition, strengthening the overall leadership team represents an important step forward in the Company's continuing program to build a management team with the depth, experience and dedication to position the Company to deliver profitable growth over the long-term. In January 2015, we entered into a lease agreement with an initial term of approximately nine years and 11 months for approximately 51,000 square feet of office, manufacturing and warehouse space located at the Company's headquarters to monetize underutilized space. The lease agreement will provide the Company with additional cash of approximately $50 per month during the first year of the initial term to approximately $57 per month during the final year of the initial term. This long term source of cash will help to fund our growth programs. Certain capital improvements up to approximately $800 will be required to relocate manufacturing and update our office and meeting space. The relocation and associated improvements will also help to create a more lean manufacturing process. We are determined to follow through on the initiatives that support our strategy to strengthen the Company for fiscal 2015 and beyond. |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
STOCK-BASED COMPENSATION [Abstract] | |||||||||||||
Summary of Stock Option Activity | Options | Weighted- | Weighted- | ||||||||||
(shares) | Average | Average | |||||||||||
Exercise Price | Grant Date | ||||||||||||
Fair Value | |||||||||||||
Outstanding - October 1, 2014 | 426 | $ | 1.83 | $ | 1.41 | ||||||||
Exercised | (2 | ) | 1.4 | 1.15 | |||||||||
Granted | 35 | 2.38 | 1.98 | ||||||||||
Foreitures | (24 | ) | 4.39 | 3.02 | |||||||||
Outstanding - March 31, 2015 | 435 | $ | 1.73 | $ | 1.37 | ||||||||
Schedule of Fair Value Assumptions | Risk-free interest rate | 1.93% - 2.13 | % | ||||||||||
Dividend yield | 0 | % | |||||||||||
Expected volatility | 88.00% - 100.06 | % | |||||||||||
Expected life of the options (years) | 8 | ||||||||||||
Forfeitures | 3 | % |
INCOME_LOSS_PER_SHARE_Tables
INCOME (LOSS) PER SHARE (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
INCOME (LOSS) PER SHARE [Abstract] | |||||||||||||||||||||||||
Reconciliation of Computation of Basic Loss Per Share to Diluted Net Loss Per Share | Three Months Ended | Six Months Ended | |||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
Basic net income (loss) per share: | |||||||||||||||||||||||||
Net income (loss) applicable to common shareholders | $ | 150 | $ | (219 | ) | $ | 332 | $ | (881 | ) | |||||||||||||||
Weighted average common shares outstanding | 8,076 | 7,964 | 8,076 | 7,848 | |||||||||||||||||||||
Basic net income (loss) per share | $ | 0.02 | $ | (0.03 | ) | $ | 0.04 | $ | (0.11 | ) | |||||||||||||||
Diluted net loss per share: | |||||||||||||||||||||||||
Net Income (loss) applicable to common shareholders | $ | 150 | $ | (219 | ) | $ | 332 | $ | (881 | ) | |||||||||||||||
Change in Fair Value of Warrant Liability | (199 | ) | - | (319 | ) | - | |||||||||||||||||||
Diluted net income (loss) applicable to common shareholders | $ | (49 | ) | $ | (219 | ) | $ | 13 | $ | (881 | ) | ||||||||||||||
Weighted average common shares outstanding | 8,076 | 7,964 | 8,076 | 7,848 | |||||||||||||||||||||
Plus: Incremental shares from assumed conversions: | |||||||||||||||||||||||||
Series A preferred shares | - | - | 592 | - | |||||||||||||||||||||
Class A warrants | 29 | - | 64 | - | |||||||||||||||||||||
Stock options/shares | - | - | 131 | - | |||||||||||||||||||||
Diluted weighted average common shares outstanding | 8,105 | 7,964 | 8,863 | 7,848 | |||||||||||||||||||||
Diluted net loss per share: | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0 | $ | (0.11 | ) |
INVENTORIES_Tables
INVENTORIES (Tables) | 6 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
INVENTORIES [Abstract] | |||||||||
Summary of Inventories | |||||||||
March 31, | September 30, | ||||||||
2015 | 2014 | ||||||||
Raw materials | $ | 1,280 | $ | 1,228 | |||||
Work in progress | 329 | 295 | |||||||
Finished goods | 388 | 340 | |||||||
$ | 1,997 | $ | 1,863 | ||||||
Obsolescence reserve | (325 | ) | (299 | ) | |||||
$ | 1,672 | $ | 1,564 | ||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
SEGMENT INFORMATION [Abstract] | |||||||||||||||||||||||||
Schedule of Operating Segments | Three Months Ended | Six Months Ended | |||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Service | $ | 4,530 | $ | 4,526 | $ | 8,928 | $ | 9,442 | |||||||||||||||||
Product | 1,196 | 1,386 | 2,643 | 2,690 | |||||||||||||||||||||
$ | 5,726 | $ | 5,912 | $ | 11,571 | $ | 12,132 | ||||||||||||||||||
Operating income (loss): | |||||||||||||||||||||||||
Service | $ | 60 | $ | (38 | ) | $ | 81 | $ | 377 | ||||||||||||||||
Product | (32 | ) | 143 | 89 | 190 | ||||||||||||||||||||
$ | 28 | $ | 105 | $ | 170 | $ | 567 | ||||||||||||||||||
Interest expense | (75 | ) | (121 | ) | (156 | ) | (285 | ) | |||||||||||||||||
Change in fair value of warrant liability – decrease (increase) | 199 | (200 | ) | 319 | (1,161 | ) | |||||||||||||||||||
Other income (expense) | (1 | ) | 4 | 1 | 5 | ||||||||||||||||||||
Net income (loss) before income taxes | $ | 151 | $ | (212 | ) | $ | 334 | $ | (874 | ) |
RESTRUCTURING_Tables
RESTRUCTURING (Tables) | 6 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
RESTRUCTURING [Abstract] | |||||||||||||||||||||
Summary of Restructuring Activity | |||||||||||||||||||||
Balance, | Total | Cash | Other | Balance, | |||||||||||||||||
September 30, | Charges | Payments | March 31, | ||||||||||||||||||
2014 | 2015 | ||||||||||||||||||||
Lease related costs | $ | 961 | $ | 39 | $ | - | $ | - | $ | 1,000 | |||||||||||
Other costs | 117 | - | - | - | 117 | ||||||||||||||||
Total | $ | 1,078 | $ | 39 | $ | - | $ | - | $ | 1,117 |
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |||||||||||||
Summary of Assumptions Used to Compute Fair Value of Warrants | 31-Mar-15 | 30-Sep-14 | |||||||||||
Risk-free interest rate | 0.3 | % | 0.41 | % | |||||||||
Dividend yield | 0 | % | 0 | % | |||||||||
Volatility of the Company's common stock | 51.28 | % | 63.58 | % | |||||||||
Expected life of the options (years) | 1.1 | 1.6 | |||||||||||
Fair value per unit | $ | 0.447 | $ | 0.846 | |||||||||
Schedule of Financial Liabilities Measured at Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||
Interest rate swap agreement | $ | - | $ | 46 | $ | - | |||||||
Class A warrant liability | $ | - | $ | 357 | $ | - | |||||||
Level 1 | Level 2 | Level 3 | |||||||||||
Interest rate swap agreement | $ | - | $ | 21 | $ | - | |||||||
Class A warrant liability | $ | - | $ | 676 | $ | - |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract] | |||||||||||||||||||||||||
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | Three Months Ended | Six Months Ended | |||||||||||||||||||||||
31-Mar-15 | 31-Mar-15 | ||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
Foreign currency translation | |||||||||||||||||||||||||
Balance, beginning of period | $ | 69 | $ | 6 | $ | 27 | $ | 32 | |||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||||
Foreign currency translation adjustments | 51 | (8 | ) | 93 | (34 | ) | |||||||||||||||||||
Balance, end of period | $ | 120 | $ | (2 | ) | $ | 120 | $ | (2 | ) | |||||||||||||||
Interest rate swap | |||||||||||||||||||||||||
Balance, beginning of period | $ | (31 | ) | $ | - | $ | (21 | ) | $ | - | |||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||||
Fair value adjustment | (15 | ) | - | (25 | ) | - | |||||||||||||||||||
Balance, end of period | $ | (46 | ) | $ | - | $ | (46 | ) | $ | - | |||||||||||||||
Total accumulated other comprehensive income (loss) | $ | 74 | $ | (2 | ) | $ | 74 | $ | (2 | ) |
STOCKBASED_COMPENSATION_Narrat
STOCK-BASED COMPENSATION (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options outstanding that were granted outside of the plan | 155 | 155 | ||
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $19 | $0 | $48 | $45 |
STOCKBASED_COMPENSATION_Summar
STOCK-BASED COMPENSATION (Summary of Stock Option Activity) (Details) (Employee Stock Option [Member], USD $) | 6 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 |
Employee Stock Option [Member] | |
Options (shares) | |
Outstanding - beginning of period | 426 |
Exercised | -2 |
Granted | 35 |
Forfeitures | -24 |
Outstanding - end of period | 435 |
Weighted-Average Exercise Price | |
Outstanding - beginning of period | $1.83 |
Exercised | $1.40 |
Granted | $2.38 |
Forfeitures | $4.39 |
Outstanding - end of period | $1.73 |
Weighted-Average Grant Date Fair Value | |
Outstanding - beginning of period | $1.41 |
Exercised | $1.15 |
Granted | $1.98 |
Forfeitures | $3.02 |
Outstanding - end of period | $1.37 |
STOCKBASED_COMPENSATION_Fair_V
STOCK-BASED COMPENSATION (Fair Value Assumptions) (Details) (Stock Options [Member]) | 6 Months Ended |
Mar. 31, 2015 | |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate, minimum | 1.93% |
Risk-free interest rate, maximum | 2.13% |
Dividend yield | 0.00% |
Expected volatility, minimum | 88.00% |
Expected volatility, maximum | 100.06% |
Expected life of the options (years) | 8 years |
Forfeitures | 3.00% |
INCOME_LOSS_PER_SHARE_Narrativ
INCOME (LOSS) PER SHARE (Narrative) (Details) | 3 Months Ended | 6 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2014 |
Warrant [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive shares not considered in computing diluted earnings per share | 810 | 810 | |
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 | 592 | 595 | 595 |
INCOME_LOSS_PER_SHARE_Reconcil
INCOME (LOSS) PER SHARE (Reconciliation of Computation of Basic Income or Loss Per Share to Diluted Income or Loss Per Share) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Basic net income (loss) per share: | ||||
Net income (loss) applicable to common shareholders | $150 | ($219) | $332 | ($881) |
Weighted average common shares outstanding | 8,076 | 7,964 | 8,076 | 7,848 |
Basic net income (loss) per share | $0.02 | ($0.03) | $0.04 | ($0.11) |
Diluted net loss per share: | ||||
Net Income (loss) applicable to common shareholders | 150 | -219 | 332 | -881 |
Change in Fair Value of Warrant Liability | -199 | -319 | ||
Diluted net income (loss) applicable to common shareholders | ($49) | ($219) | $13 | ($881) |
Weighted average common shares outstanding | 8,076 | 7,964 | 8,076 | 7,848 |
Plus: Incremental shares from assumed conversions | ||||
Series A preferred shares | 592 | |||
Class A warrants | 29 | 64 | ||
Stock options/shares | 131 | |||
Diluted weighted average common shares outstanding | 8,105 | 7,964 | 8,863 | 7,848 |
Diluted net loss per share | ($0.01) | ($0.03) | $0 | ($0.11) |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Mar. 31, 2015 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
INVENTORIES [Abstract] | ||
Raw materials | $1,280 | $1,228 |
Work in process | 329 | 295 |
Finished goods | 388 | 340 |
Gross inventories | 1,997 | 1,863 |
Obsolescence reserve | -325 | -299 |
Inventories | $1,672 | $1,564 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
segments | ||||
Segment Reporting Information [Line Items] | ||||
Number of segments | 2 | |||
Revenue | $5,726 | $5,912 | $11,571 | $12,132 |
Operating income (loss) | 28 | 105 | 170 | 567 |
Interest expense | -75 | -121 | -156 | -285 |
Change in fair value of warrant liability - decrease (increase) | 199 | -200 | 319 | -1,161 |
Other income (expense) | -1 | 4 | 1 | 5 |
Net income (loss) before income taxes | 151 | -212 | 334 | -874 |
Service [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 4,530 | 4,526 | 8,928 | 9,442 |
Operating income (loss) | 60 | -38 | 81 | 377 |
Product [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,196 | 1,386 | 2,643 | 2,690 |
Operating income (loss) | ($32) | $143 | $89 | $190 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Sep. 30, 2014 |
INCOME TAXES [Abstract] | ||
Liability for other uncertain income tax positions | $16 | $16 |
Statutory federal income tax rate | 34.00% | |
Effective income tax rate | 0.50% |
DEBT_Note_Payable_Details
DEBT (Note Payable) (Details) (Replacement Note Payable Two [Member], USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Oct. 31, 2013 |
Replacement Note Payable Two [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, maturity date | 31-Oct-14 | |
Debt instrument, principal payment | $47 | |
Debt instrument, face amount | $5,205 | |
Debt instrument, basis spread on variable rate | 4.00% | |
Debt instrument, minimum interest rate | 6.00% | |
Fixed charge coverage ratio | 1.25 | |
Total liabilities to tangible net worth ratio | 2.1 |
DEBT_Revolving_Line_of_Credit_
DEBT (Revolving Line of Credit) (Details) (Revolving Line of Credit [Member], EGC [Member], USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Jan. 31, 2014 |
Debt Instrument [Line Items] | ||
Line of credit, maximum borrowing capacity | $3,000 | |
Expiration date of credit agreement | 31-Jan-14 | |
Debt instrument, variable interest reference rate | Citibank's Prime Rate | |
Debt instrument, basis spread on variable rate | 5.00% | |
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 were 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 were calculated based on 75% of eligible accounts receivable. | |
Minimum net worth covenant requirement | 8,000 | |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit, frequency of periodic payments | monthly | |
Line of credit, periodic interest payments | $15 |
DEBT_New_Credit_Facility_Detai
DEBT (New Credit Facility) (Details) (USD $) | 6 Months Ended | 12 Months Ended | 1 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Sep. 30, 2014 | 14-May-15 | Oct. 01, 2015 |
Huntington Bank [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | $134 | |||
Facility term | 5 years | |||
Unamortized debt issuance costs | 108 | 122 | ||
Swap [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage of debt covered by swap | 60.00% | |||
Fixed interest rate | 5.00% | |||
New Credit Facility Term Loan [Member] | Huntington Bank [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | 5,500 | |||
Debt instrument, principal payment | 65 | |||
Debt instrument, carrying amount | 4,845 | 5,238 | ||
Debt instrument, variable interest reference rate | LIBOR | |||
Debt instrument, basis spread on variable rate | 3.25% | |||
New Credit Facility Revolving Loan [Member] | Huntington Bank [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit, maximum borrowing capacity | 2,000 | |||
Debt instrument, variable interest reference rate | LIBOR | |||
Debt instrument, basis spread on variable rate | 3.00% | |||
Line of credit, facilities fee, percentage | 0.25% | |||
Line of credit, amount outstanding | 0 | 202 | ||
Covenant terms | The revolving loan includes an annual clean-up provision that requires the Company to maintain a balance of not more than 20% of the maximum loan of $2,000 for a period of 30 days in any 12 month period while the revolving loan is outstanding. | |||
Fixed charge coverage ratio | 1.1 | 1.05 | ||
Leverage ratio | 3 | |||
Amount of capital expenditures excluded from debt covenant | $1,000 | |||
New Credit Facility Revolving Loan [Member] | Scenario, Forecast [Member] | Huntington Bank [Member] | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio | 2.5 |
RESTRUCTURING_Narrative_Detail
RESTRUCTURING (Narrative) (Details) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Sep. 30, 2014 |
Restructuring Cost and Reserve [Line Items] | ||
Area of property | 120,000 | |
Restructuring reserves | $1,117 | $1,078 |
Scenario, Forecast [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated rent income | 200 | |
Lease Related Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserves | $1,000 | $961 |
RESTRUCTURING_Summary_of_Restr
RESTRUCTURING (Summary of Restructuring Activity) (Details) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Restructuring Cost and Reserve [Line Items] | |
Balance | $1,078 |
Total Charges | 39 |
Cash Payments | |
Other | |
Balance | 1,117 |
Lease Related Costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Balance | 961 |
Total Charges | 39 |
Cash Payments | |
Other | |
Balance | 1,000 |
Other Costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Balance | 117 |
Total Charges | |
Cash Payments | |
Other | |
Balance | $117 |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) | 6 Months Ended | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Sep. 30, 2014 | 31-May-12 |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Fair value of warrant liability | $357 | $676 | |
Interest Rate Swap [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Percentage of debt covered by swap | 60.00% | ||
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Derivative liability | |||
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Derivative liability | 46 | 21 | |
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Derivative liability | |||
Warrant [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Derivative liability | |||
Warrant [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Derivative liability | 357 | 676 | |
Warrant [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Derivative liability | |||
Swap [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Percentage of debt covered by swap | 60.00% | ||
Class B Warrant [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Fair value of warrant liability | $0 | ||
Derivative Financial Instruments, Liabilities [Member] | Class A Warrant [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Risk-free interest rate | 0.30% | 0.41% | |
Dividend yield | 0.00% | 0.00% | |
Volatility of the Company's common stock | 51.28% | 63.58% | |
Expected life of the options | 1 year 1 month 6 days | 1 year 7 months 6 days | |
Fair value per unit | $0.45 | $0.85 |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Sep. 30, 2014 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance | $9,536 | ||||
Balance | 9,984 | 9,984 | 9,536 | ||
Foreign Currency Translation [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance | 69 | 6 | 27 | 32 | |
Other comprehensive income (loss) | 51 | -8 | 93 | -34 | |
Balance | 120 | -2 | 120 | -2 | |
Interest Rate Swap [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance | -31 | -21 | |||
Other comprehensive income (loss) | -15 | -25 | |||
Balance | -46 | -46 | |||
Accumulated Other Comprehensive Income (Loss) [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance | $74 | ($2) | $74 | ($2) |
MANAGEMENTS_PLAN_Details
MANAGEMENT'S PLAN (Details) (USD $) | 1 Months Ended | |
In Thousands, unless otherwise specified | Jan. 31, 2015 | Mar. 31, 2015 |
sqft | sqft | |
Concentration Risk [Line Items] | ||
Area of property | 120,000 | |
Expected capital improvements | $800 | |
Property Subject to Operating Lease [Member] | ||
Concentration Risk [Line Items] | ||
Term of lease | 9 years 11 months | |
Area of property | 51,000 | |
Initial base rent | 50 | |
Final base rent | $57 |