Sevcon 10-Q 16 Feb 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Jan. 02, 2016	Feb. 16, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	SEVCON, INC.
Entity Central Index Key	825,411
Current Fiscal Year End Date	--09-30
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		4,236,112
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 2, 2016

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jan. 02, 2016	Sep. 30, 2015
Current assets:
Cash and cash equivalents	$ 6,787	$ 8,048
Trade receivables net of allowances for doubtful accounts of $36 at January 2, 2016 and $37 at September 30, 2015	7,881	8,995
Other receivables	819	467
Inventories	8,198	6,790
Deferred taxes	594	1,244
Prepaid expenses and other current assets	1,932	2,337
Total current assets	26,211	27,881
Property, plant and equipment, at cost:
Land and improvements	21	21
Buildings and improvements	676	693
Equipment	11,540	11,485
Property, plant and equipment, at cost	12,237	12,199
Less: accumulated depreciation	(9,522)	(9,574)
Net property, plant and equipment	2,715	2,625
Long-term deferred tax assets	3,765	3,232
Goodwill	1,435	1,435
Other long-term assets	451	443
Total assets	34,577	35,616
Current liabilities:
Bank overdraft	172	0
Accounts payable	4,991	6,184
Current portion of long term-debt	1,000	0
Accrued expenses	1,772	1,973
Dividends payable	0	200
Total current liabilities	7,935	8,357
Liability for pension benefits	10,647	10,963
Long-term debt	0	500
Total liabilities	$ 18,582	$ 19,820
Commitments and contingencies (Note 14)
Stockholders' equity:
Preferred stock, par value $.10 per share - authorized - 1,000,000 shares; Outstanding - 452,124 shares at January 2, 2016 and September 30, 2015	$ 45	$ 45
Common stock, par value $.10 per share - authorized - 20,000,000 shares; Outstanding 3,706,412 shares at January 2, 2016 and 3,694,872 shares at September 30, 2015	371	369
Premium paid in on common stock	6,786	6,637
Premium paid in on preferred stock	9,058	9,058
Retained earnings	10,712	10,607
Accumulated other comprehensive loss	(11,023)	(11,004)
Total Sevcon, Inc. and subsidiaries stockholders' equity	15,949	15,712
Non-controlling interests	46	84
Total stockholders' equity	15,995	15,796
Total liabilities and stockholders' equity	$ 34,577	$ 35,616

CONSOLIDATED BALANCE SHEETS (U3

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jan. 02, 2016	Sep. 30, 2015
Current assets:
Trade receivables, allowances for doubtful accounts	$ 36	$ 37
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.10	$ 0.10
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares outstanding (in shares)	452,124	452,124
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares outstanding (in shares)	3,706,412	3,694,872

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Jan. 02, 2016	Jan. 03, 2015
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) [Abstract]
Net sales	$ 9,115	$ 9,933
Cost of sales	(4,999)	(6,375)
Gross profit	4,116	3,558
Selling, general and administrative expenses	(2,760)	(2,493)
Research and development expenses	(860)	(783)
Acquisition costs	(316)	0
Operating income	180	282
Interest expense	(22)	(26)
Interest income	8	5
Foreign currency (loss) gain	(71)	44
Income before income tax	95	305
Income tax provision	(11)	(40)
Net income	84	265
Net loss attributable to non-controlling interests	38	17
Net income attributable to Sevcon, Inc. and subsidiaries	122	282
Preferred share dividends	(111)	(111)
Net income attributable to common stockholders	$ 11	$ 171
Basic income per share (in dollars per share)	$ 0	$ 0.05
Fully diluted income per share (in dollars per share)	$ 0	$ 0.05
Weighted average shares used in computation of earnings per share:
Basic (in shares)	3,429	3,427
Diluted (in shares)	3,576	3,513

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jan. 02, 2016	Jan. 03, 2015
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract]
Net income attributable to Sevcon, Inc. and subsidiaries	$ 122	$ 282
Other comprehensive income
Foreign currency translation adjustment	(78)	(144)
Defined benefit pension plans:
Actuarial loss net of $18 tax benefit (2015:Actuarial loss net of $14 tax benefit)	59	50
Comprehensive income	$ 103	$ 188

CONSOLIDATED STATEMENTS OF COM6

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Jan. 02, 2016	Jan. 03, 2015
Defined benefit pension plans:
Actuarial loss tax benefit	$ 18	$ 14

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jan. 02, 2016	Jan. 03, 2015
Cash flow from operating activities:
Net income	$ 84	$ 265
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation	169	157
Stock-based compensation	152	113
Pension contributions less than (greater than) pension expense	8	(52)
Deferred tax provision	11	39
Increase (decrease) in cash resulting from changes in operating assets and liabilities:
Trade receivables	890	(498)
Other receivables	(279)	(82)
Inventories	(1,539)	(242)
Prepaid expenses and other current assets	370	(49)
Accounts payable	(1,090)	(680)
Accrued expenses	(166)	85
Accrued and deferred taxes on income	(31)	(50)
Bank overdraft	172	0
Net cash used by operating activities	(1,249)	(994)
Cash flow used by investing activities:
Acquisition of property, plant and equipment	(323)	(293)
Net cash used by investing activities	(323)	(293)
Cash flow generated from (used by) financing activities:
Net borrowings/(repayment) of long term debt	500	(1,713)
Dividends paid	(217)	(42)
Net cash generated from (used by) financing activities	283	(1,755)
Effect of exchange rate changes on cash	28	(85)
Net decrease in cash	(1,261)	(3,127)
Beginning balance - cash and cash equivalents	8,048	11,238
Ending balance - cash and cash equivalents	6,787	8,111
Supplemental disclosure of cash flow information:
Cash paid for income taxes	31	50
Cash paid for interest	$ 21	$ 26

Basis of presentation

Basis of presentation	3 Months Ended
	Jan. 02, 2016
Basis of presentation [Abstract]
Basis of presentation	(1) Basis of presentation Sevcon, Inc. (or the “Company”) is a Delaware corporation organized on December 22, 1987 to carry on the electronic controls business previously performed by Tech/Ops, Inc. (Tech/Ops). Through wholly-owned subsidiaries located in the United States, England, France, South Korea and Japan and a 50% owned joint venture located in China, and through an international dealer network, the Company designs and sells, under the Sevcon name, motor controllers for zero emission electric and hybrid vehicles (EVs). The controls are used to vary the speed and movement of vehicles, to integrate specialized functions and to optimize the energy consumption of the vehicle's power source. Through a wholly-owned subsidiary in Italy acquired in January 2016, the Company also designs, manufactures and sells battery chargers for electric vehicles and power management and uninterrupted power source systems for industrial, medical and telecom applications, as well as electronic instrumentation for battery laboratories. Sevcon's customers are manufacturers of on and off-road vehicles, including cars, trucks, buses, motorcycles, fork lift trucks, aerial lifts, mining vehicles, airport tractors, sweepers and other electrically powered vehicles. Through another subsidiary located in the United Kingdom, Sevcon, Inc. manufactures special metalized film capacitors that are used as components in the power electronics, signaling and audio equipment markets. Accounting for wholly-owned subsidiaries The accompanying consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries; Sevcon USA, Inc., Sevcon Ltd, Industrial Capacitors (Wrexham) Ltd., Sevcon Asia Limited, Sevcon Japan KK and Sevcon Security Corp., in accordance with the provisions required by the Consolidation Topic 810 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). All material intercompany transactions have been eliminated. Accounting for joint-venture subsidiary For the Company's less than wholly (50%) owned joint venture subsidiary, Sevcon New Energy Technology (Hubei) Company Limited, the Company first analyzes whether this joint venture is a variable interest entity (a “VIE”) in accordance with ASC 810 and if so, whether the Company is the primary beneficiary requiring consolidation. A VIE is an entity that has (i) insufficient equity to permit it to finance its activities without additional subordinated financial support or (ii) equity holders that lack the characteristics of a controlling financial interest. VIEs are consolidated by the primary beneficiary, which is the entity that has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that potentially could be significant to the entity. Variable interests in a VIE are contractual, ownership, or other financial interests in a VIE that change with changes in the fair value of the VIE’s net assets. The Company continuously re-assesses (i) whether the joint venture is a VIE, and (ii) if the Company is the primary beneficiary of the VIE. If it is determined that the joint venture qualifies as a VIE and the Company is the primary beneficiary, it is consolidated. Based on the Company's analysis for this joint venture, the Company has determined that it is a VIE and that the Company is the primary beneficiary. While the Company owns 50% of the equity interest in the joint venture, the other 50% is owned by a local unrelated third party, and the joint venture agreement with that third party provides the Company with greater voting rights. Accordingly, the Company consolidates its joint venture under the VIE rules and reflects the third party’s 50% interest in the consolidated financial statements as a non-controlling interest. The Company records this non-controlling interest at its initial fair value, adjusting the basis prospectively for the third party’s share of the respective consolidated investments’ net income or loss or equity contributions and distributions. This non-controlling interest is not redeemable by the equity holders and is presented as part of permanent equity. Income and losses are allocated to the non-controlling interest holder based on its economic ownership percentage. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normally recurring accruals) necessary to present fairly the financial position of Sevcon, Inc. as of January 2, 2016 and the results of operations and cash flows for the three months ended January 2, 2016. These unaudited interim financial statements should be read in conjunction with the 2015 annual consolidated financial statements and related notes included in the 2015 Sevcon, Inc. Annual Report filed on Form 10-K (the “2015 10-K”). Unless otherwise indicated, each reference to a year means the Company’s fiscal year, which ends on September 30. The results of operations for the three month period ended January 2, 2016 are not necessarily indicative of the results to be expected for the full year.

Summary of significant accounti

Summary of significant accounting policies	3 Months Ended
	Jan. 02, 2016
Summary of significant accounting policies [Abstract]
Summary of significant accounting policies	(2) Summary of significant accounting policies There have been no changes since the end of 2015 to the significant accounting policies followed by Sevcon, Inc.

Stock-based compensation plans

Stock-based compensation plans	3 Months Ended
	Jan. 02, 2016
Stock-based compensation plans [Abstract]
Stock-based compensation plans	(3) Stock-based compensation plans Under the Company’s 1996 Equity Incentive Plan (the “Plan”) there were 89,578 shares reserved and available for grant at January 2, 2016. There were 157,557 shares reserved and available for grant at January 3, 2015. The plan, which is shareholder-approved, permits the grant of Restricted Stock, Restricted Stock Units, Options and Stock Appreciation Rights (“SARs”). SARs may be awarded either separately, or in relation to options granted, and for the grant of bonus shares. The Company believes that such awards better align the interests of the employees with those of its shareholders. Options granted are exercisable at a price not less than fair market value on the date of grant. Recipients of grants of options must execute a standard form of non-competition agreement. Share options The Company estimated the fair values of its stock options using the Black-Scholes-Merton option-pricing model, which was developed for use in estimating the fair values of stock options. Option valuation models, including the Black-Scholes-Merton option-pricing model, require the input of assumptions, including stock price volatility. Changes in the input assumptions can materially affect the fair value estimates and ultimately how much the Company recognizes as stock-based compensation expense. The fair values of the Company’s stock options were estimated at the grant dates. The weighted average input assumptions used and resulting fair values of stock options were as follows for fiscal 2016: Expected life (in years) 4.02 Risk-free interest rate 1.55 % Volatility 61.43 % Dividend yield 0.00 % Weighted-average fair value per share $ 4.82 Risk-free Interest Rate The Company bases the risk-free interest rate assumption on zero-coupon U.S. treasury instruments appropriate for the expected term of the stock option grants. Expected Dividend Yield The Company bases the expected dividend yield assumption on the fact that there is no present intention to pay cash dividends. Therefore an expected dividend yield of zero has been used. Expected Volatility The expected stock price volatility for the Company’s common stock is estimated based on the historic volatility of the Company’s common stock for a period equivalent to the expected term of the stock option grants. Expected Term The expected term represents the period of time that options are expected to be outstanding. As the Company does not have sufficient historical evidence for determining the expected term of the stock option awards granted, the expected life assumption has been determined using the simplified method, which is an average of the contractual term of the option and its ordinary vesting period. Performance based awards Stock options: In December 2015, the Compensation Committee awarded performance-based equity compensation to nine executives and managers, including the principal executive officer and principal financial officer, consisting of 38,460 shares in the form of stock options. The performance options have an exercise price of $9.944 per share, representing the average of the highest intraday bid and ask quotes for the Company’s common stock on the date of grant, December 16, 2015, and the preceding four trading days. The performance options will vest subject to the Company’s meeting an earnings per share target applicable to fiscal year 2018 so long as the employee is then employed by the Company set by the Compensation Committee. The estimated fair value of the stock on the date of the grant was $185,000 based on the fair market value of stock on the date of issue. The unvested compensation is being charged to income over three years. The charge to income for this employee stock option grant will be approximately $15,000 on a quarterly basis. Restricted stock: In December 2015, the Company granted 11,540 shares of restricted stock to four employees which will vest subject to the Company’s meeting the same earnings per share target applicable to fiscal year 2018, so long as the employee is then employed by the Company. The estimated fair value of the stock on the date of the grant was $116,000 based on the fair market value of stock on the date of issue. The unvested compensation is being charged to income over three years. The charge to income for this employee stock option grant will be approximately $10,000 on a quarterly basis. Management has assessed the performance criteria relating to these grants and concluded that are likely to be met. Accordingly the relevant portion of the charge has been taken to income in the quarter ended January 2, 2016. There were 38,460 options granted during the quarter ended January 2, 2016. The weighted average grant date fair value of these options was $4.82. No options were granted in the quarter ended January 3, 2015. A summary of option activity under the employee share option plan as of January 2, 2016, and changes during the quarter then ended is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of September 30, 2015 - $ - - - Granted 38,460 $ 10.06 5.00 $ 11,153 Exercised - - - - Forfeited or Expired - - - - Outstanding at January 2, 2016 38,460 $ 10.06 4.96 $ 11,153 Exercisable - - - - Vested and expected to vest 35,088 $ 10.06 4.96 $ 10,176 Time-based awards The Company awarded no time-based options in the quarter ended January 2, 2016. Restricted stock: In December 2014, the Company granted 42,000 shares of restricted stock to eight employees, which will vest in two equal annual installments so long as the employee is then employed by the Company or as determined by the Compensation Committee. The estimated fair value of the stock on the date of grant was $330,000 based on the fair market value of stock on the date of issue. The unvested compensation is being charged to income on a straight line basis over two years. The charge to income for this employee restricted stock grant will be approximately $41,000 on a quarterly basis. In December 2014, the Company granted 20,000 shares of restricted stock to three employees, which will vest in five equal annual installments so long as the employee is then employed by the Company or as determined by the Compensation Committee. The estimated fair value of the stock on the date of grant was $139,000 based on the fair market value of stock on the date of issue. The unvested compensation is being charged to income on a straight line basis over five years. The charge to income for this employee restricted stock grant will be approximately $7,000 on a quarterly basis. In February 2015, the Company granted 30,600 shares of restricted stock to nine non-employee directors, which will vest on the day before the 2016 annual meeting providing that the grantee remains a director of the Company, or as otherwise determined by the Compensation Committee. The aggregate fair value of the stock measured on the date of grant was $225,000, based on the closing sale price of the stock on the date of grant. Compensation expense is being charged to income on a straight line basis over the twelve month requisite service period during which the forfeiture conditions lapse. The charge to income for these restricted stock grants in 2015 was $131,000 and the subsequent charge will be approximately $56,000 on a quarterly basis. For the purposes of calculating average issued shares for basic earnings per share these shares are only considered to be outstanding when the forfeiture conditions lapse and the shares vest. A summary of restricted stock activity for the three months ended January 2, 2016 is as follows: Number of shares of Restricted Stock Weighted Average Grant-Date Fair Value Non-vested balance as of September 30, 2014 196,600 $ 5.97 Granted 11,540 $ 7.85 Vested (61,000 ) $ 6.41 Non-vested balance as of September 30, 2015 196,600 $ 5.97 Granted 11,540 $ 7.85 Vested (61,000 ) $ 6.41 Non-vested balance as of January 2, 2016 147,140 $ 5.94 Number of shares of Stock Options Weighted Average Grant-Date Fair Value Non-vested balance as of September 30, 2015 - $ - Granted 38,460 $ 7.85 Vested - $ - Non-vested balance as of January 2, 2016 38,460 $ 7.85 Stock-based compensation expense was $152,000 and $113,000 for the three month periods ended January 2, 2016 and January 3, 2015, respectively. At January 2, 2016, there was $925,000 of unrecognized compensation expense related to restricted stock and stock options granted under the Plan. The Company expects to recognize that cost over a weighted average period of 2.3 years.

Cash dividends

Cash dividends	3 Months Ended
	Jan. 02, 2016
Cash dividends [Abstract]
Cash dividends	(4) Cash dividends Common stock dividends: The Company is not paying a dividend at the present time and the Board of Directors will consider whether to pay a common stock dividend in the future. Preferred Stock dividends: At January 2, 2016 there were 452,124 shares of Series A Convertible Preferred Stock issued and outstanding. The preferred stock, which has a stated value of $24 per share, pays a 4% cumulative annual dividend semi-annually on October 15 and April 15 each year. A semi-annual dividend of $217,000 was paid on October 15, 2015 and the next semi-annual dividend will be paid on April 15, 2016.

Calculation of earnings per sha

Calculation of earnings per share and weighted average shares outstanding	3 Months Ended
	Jan. 02, 2016
Calculation of earnings per share and weighted average shares outstanding [Abstract]
Calculation of earnings per share and weighted average shares outstanding	(5) Calculation of earnings per share and weighted average shares outstanding Basic earnings per share is computed by dividing the net income or loss for the period by the weighted average number of shares of common stock outstanding during the period. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that the denominator is increased for the assumed exercise of dilutive options and other potentially dilutive securities, including convertible preferred stock, using the treasury stock method unless the effect is anti-dilutive. Basic and diluted net income per common share for the three month periods ended January 2, 2016 and January 3, 2015 were calculated as follows: (in thousands except per share data) Three Months ended January 2, 2016 January 3, 2015 Numerator: Net income attributable to common stockholders for computing net income per ordinary share – basic $ 11 $ 171 Dividend eliminated upon assumed conversion of convertible preferred stock - - Net income attributable to common stockholders for computing net income per ordinary share – diluted $ 11 $ 171 Denominator: Weighted average shares used in calculating net income per ordinary share – basic 3,429 3,427 Adjustment for assumed conversion of convertible preferred stock - - Adjustment for shares issuable upon vesting of restricted stock 147 86 Weighted average shares used in calculating net income per ordinary share – diluted 3,576 3,513 Net income per ordinary share - basic $ 0.00 $ 0.05 Net income per ordinary share - diluted $ 0.00 $ 0.05 No. of shares of convertible preferred stock that are anti-dilutive excluded from calculation of common stock equivalents 1,356 1,382

Segment information

Segment information	3 Months Ended
	Jan. 02, 2016
Segment information [Abstract]
Segment information	(6) Segment information The Company has two reportable segments: electronic controls and capacitors. The electronic controls segment produces microprocessor based control systems for zero emission and hybrid electric vehicles. The capacitor segment produces special-metalized film capacitors for sale to electronic equipment manufacturers. Each segment has its own management team, manufacturing facility and sales force. The significant accounting policies of the segments are the same as those described above and in Note 1 to the Notes to Consolidated Financial Statements in the 2015 10-K. Inter-segment sales are accounted for at current market prices. The Company evaluates the performance of each segment principally based on operating income. The Company does not allocate income taxes, interest income and expense or foreign currency translation gains and losses to segments. Information concerning operations of these businesses is as follows: (in thousands of dollars) Three months ended January 2, 2016 Controls Capacitors Corporate Total Sales to external customers 8,707 408 - 9,115 Inter segment revenues - - - - Operating income (loss) 484 (43 ) (261 ) 180 Identifiable assets 32,099 889 154 33,142 Three months ended January 3, 2015 Controls Capacitors Corporate Total Sales to external customers 9,419 514 - 9,933 Inter-segment revenues - 2 - 2 Operating income 348 36 (102 ) 282 Identifiable assets 21,376 1,142 7,117 29,635 In the electronic controls business segment, revenues were derived from the following products and services: (in thousands of dollars) Three Months ended January 2, 2016 January 3, 2015 Electronic controls for zero emission and hybrid electric vehicles $ 6,450 $ 6,064 Accessory and aftermarket products and services 2,257 3,355 Total controls segment revenues $ 8,707 $ 9,419

Research and development

Research and development	3 Months Ended
	Jan. 02, 2016
Research and development [Abstract]
Research and development	(7) Research and development The cost of research and development programs is charged against income in each period. In recent years the Company has received several awards of research and development grants by the Technology Strategy Board, a public body established by the U.K. government to stimulate technology-enabled innovation. In 2011, the Company was awarded a research and development grant by the Technology Strategy Board to lead a collaborative project with Cummins Generator Technologies and Newcastle University in the U.K. to develop an innovative electric drive system for electric vehicles using advanced switched reluctance motor technology. The Company recorded grant income from this Technology Strategy Board project of $0 in the first quarter of 2016 associated with research and development expense of $6,807. The Company recorded grant income of $8,000 associated with research and development expense of $23,000 in respect of this Technology Strategy Board grant in the first quarter of 2015. On completion of this project in the second quarter of 2016 the balance of grant income of approximately $37,000 will be recorded. In 2013, the Company was awarded a research and development grant by the Technology Strategy Board as one of a consortium of organizations in the U.K to research and design ultra-efficient systems for electric and hybrid vehicles. The Company recorded grant income from this Technology Strategy Board project of $225 in the first quarter of 2016 associated with research and development expense of $956. The Company recorded grant income from this Technology Strategy Board project of $289 in the first quarter of 2015 associated with research and development expense of $1,228. In 2015 the Company was awarded a grant of approximately $625,000 by the U.K. Regional Growth Fund, a U.K. government body. The grant is to develop an innovative range of low voltage motor controls which are designed to serve the emerging needs for on-road, automotive electrification. The grant includes a commitment to create or safeguard a total of twenty jobs at the Company’s U.K. facility over the period of the project. The Company recorded grant income from this project of $30,000 in the first quarter of 2016 associated with research and development expense of $165,000. The grant income in the first quarter of 2016 and 2015 was recorded as a reduction of research and development expense.

Employee benefit plans

Employee benefit plans	3 Months Ended
	Jan. 02, 2016
Employee benefit plans [Abstract]
Employee benefit plans	(8) Employee benefit plans Sevcon, Inc. has defined contribution plans covering the majority of its U.S. and U.K. employees in the controls business. There is also a small defined contribution plan covering senior managers in the capacitor business. The Company’s French subsidiary, Sevcon S.A.S., has a liability to pay its employees a service and salary based award when they reach retirement age and leave the Company’s employment. This liability, which is unfunded, is recognized in accrued expenses and was $158,000 and $165,000 at January 2, 2016 and January 3, 2015, respectively. The obligation to pay this award is a French legal requirement and is only payable if the employee is employed by the Company when they retire; if they leave the Company prior to that time the award is no longer payable. The Company has frozen the U.K. and U.S. defined benefit plans for which no future benefits are being earned by employees. The Company uses a September 30 measurement date for its defined benefit pension plans. The following table sets forth the components of the net pension cost for the three month periods ended January 2, 2016 and January 3, 2015, respectively: (in thousands of dollars) Three Months ended January 2, 2016 January 3, 2015 Interest cost $ 296 $ 316 Expected return on plan assets (289 ) (313 ) Amortization of net loss 77 64 Net periodic benefit cost 84 67 Net cost of defined contribution plans $ 155 $ 147 Net cost of all employee benefit plans $ 239 $ 214 The following table sets forth the movement in the liability for pension benefits in the three month periods ended January 2, 2016 and January 3, 2015: (in thousands of dollars) Three Months ended January 2, 2016 January 3, 2015 Liability for pension benefits at beginning of period $ 10,963 $ 9,529 Interest cost 296 316 Expected return on plan assets (289 ) (313 ) Plan contributions (76 ) (119 ) Effect of exchange rate changes (247 ) (484 ) Balance at end of period $ 10,647 $ 8,929 Amounts recognized in the balance sheet consist of: (in thousands of dollars) January 2, 2016 January 3, 2015 Non-current liabilities $ 10,647 $ 8,929 Amounts recognized in accumulated other comprehensive loss consist of: (in thousands of dollars) January 2, 2016 January 3, 2015 Actuarial loss, net of $18,000 tax benefit (2015: net of $14,000 tax benefit) $ 59 $ 50 Sevcon, Inc. did not contribute to its U.S. defined benefit plan in the three months ended January 2, 2016; it presently anticipates contributing $200,000 to fund its U.S. plan in the remainder of fiscal 2016. In addition, employer contributions to the U.K. defined benefit plan were $76,000 in the first three months and are estimated to total $445,000 in 2016. The tables below present information about the Company’s pension plan assets measured and recorded at fair value as of January 2, 2016 and September 30, 2015, and indicates the fair value hierarchy of the inputs utilized by the Company to determine the fair values. (in thousands of dollars) J anuary 2, 2016 Level 1* (Quoted prices in active markets) Level 2** (Significant observable inputs) Level 3*** (Unobservable inputs) Adept Strategy 9 Fund (a sub-fund of Adept Investment Management plc) - 12,356 - Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds (funds managed by Schroder Investment Management Limited) - 4,428 - U.S. Mutual Funds and Fixed Income Funds 2,589 - - U.S. Equity Funds 368 - - Per ‘Mutual Funds’ Other Types of Investments Cash 265 - - Total 3,222 16,784 - (in thousands of dollars) September 30, 2015 Level 1* (Quoted prices in active markets) Level 2** (Significant observable inputs) Level 3*** (Unobservable inputs) Adept Strategy 9 Fund (a sub-fund of Adept Investment Management plc) - 13,044 - Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds (funds managed by Schroder Investment Management Limited) - 3,845 - U.S. Mutual Funds and Fixed Income Funds 2,557 - - U.S. Equity Funds 350 - - Other Types of Investments Cash 331 - - Total 3,238 16,889 - * Level 1 investments represent mutual funds for which a quoted market price is available on an active market. These investments primarily hold stocks or bonds, or a combination of stocks and bonds. ** Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The Company’s pension plan financial assets held in the Adept Strategy 9 Fund and the Schroder investments are Level 2 assets. The Company uses the Net Asset Value to determine the fair value of underlying investments which (a) do not have readily determinable fair value; and (b) prepare their financial statements consistent with the measurement principles of an investment company. The Funds are not exchange traded. The Funds are not subject to any redemption notice periods or restrictions and can be redeemed on a daily basis. No gates or holdbacks or dealing suspensions are being applied to the Funds. The Funds are of perpetual duration. *** The Company currently does not have any Level 3 pension plan financial assets. The following estimated benefit payments, which reflect future service, as appropriate, have been or are expected to be paid: (in thousands of dollars) 2016 $ 445 2017 $ 514 2018 $ 532 2019 $ 540 2020 $ 550 2021 – 2025 $ 2,958

Inventories

Inventories	3 Months Ended
	Jan. 02, 2016
Inventories [Abstract]
Inventories	(9) Inventories Inventories, net of reserve, were comprised of: (in thousands of dollars) January 2, 2016 September 30, 2015 Raw materials $ 2,790 $ 2,453 Work-in-process 86 90 Finished goods 5,322 4,247 $ 8,198 $ 6,790

Fair value of financial instrum

Fair value of financial instruments	3 Months Ended
	Jan. 02, 2016
Fair value of financial instruments [Abstract]
Fair value of financial instruments	(10) Fair value of financial instruments The Company's financial instruments consist mainly of cash and cash equivalents, short-term investments, accounts receivable and accounts payable. The carrying amount of these financial instruments as of January 2, 2016 approximates fair value due to the short-term nature of these instruments. The fair value of the Company’s long term debt at January 2, 2016 approximated $1,000,000 (the carrying value on the consolidated balance sheet at January 2, 2016) based on recent financial market pricing. The long term debt represented a level 2 liability in accordance with the fair value hierarchy described in Note 8.

Accrued expenses

Accrued expenses	3 Months Ended
	Jan. 02, 2016
Accrued expenses [Abstract]
Accrued expenses	(11) Accrued expenses Set out below is an analysis of other accrued expenses at January 2, 2016 and September 30, 2015, which shows separately any items in excess of 5% of total current liabilities: (in thousands of dollars) January 2, 2016 September 30, 2015 Accrued compensation and related costs $ 840 $ 827 Other accrued expenses 932 1,146 $ 1,772 $ 1,973

Warranty reserves

Warranty reserves	3 Months Ended
	Jan. 02, 2016
Warranty reserves [Abstract]
Warranty reserves	(12) Warranty reserves The movement in warranty reserves was as follows: (in thousands of dollars) Three Months ended January 2, 2016 January 3, 2015 Warranty reserves at beginning of period $ 278 $ 153 Decrease in beginning balance for warranty obligations settled during the period (67 ) - Foreign currency translation adjustment (3 ) (5 ) Net increase in warranty reserves for products sold during the period $ 5 $ 3 Warranty reserves at end of period $ 213 $ 151

Debt

Debt	3 Months Ended
	Jan. 02, 2016
Debt [Abstract]
Debt	(13) Debt At January 2, 2016, the Company’s wholly owned subsidiary, Sevcon USA, Inc., had a $3,500,000 secured revolving credit facility with Citizens Bank, National Association, for working capital and general corporate purposes. The total amount outstanding under this credit facility at January 2, 2016 was $1,000,000 and at January 3, 2015 was $0. On January 25, 2016 the Company’s subsidiary, Sevcon USA, Inc., paid off $1,000,000 outstanding under, and terminated, its loan and Security Agreement with Citizens Bank, National Association.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Jan. 02, 2016
Commitments and Contingencies [Abstract]
Commitments and Contingencies	(14) Commitments and Contingencies Sevcon, Inc. is involved in various legal proceedings in the ordinary course of business but believes that it is remote that the outcome will be material to operations. The Company maintains a directors' retirement plan which provides for certain retirement benefits to non-employee directors. Effective January 1997 the plan was frozen and no further benefits are being accrued. While the cost of the plan has been fully charged to expense, the plan is not separately funded. The estimated maximum liability which has been recorded based on the cost of buying deferred annuities at January 2, 2016 and September 30, 2015 was $150,000 and $153,000 respectively. Minimum rental commitments under all non-cancelable leases are as follows for the years ended September 30, 2016 - $227,000; 2017 - $211,000; 2018 - $200,000; 2019 - $188,000; 2020 - $173,000 and $2,544,000 thereafter. The U.K. subsidiaries of the Company have given to a bank a security interest in certain leasehold and freehold property assets as security for overdraft facilities of $1,350,000. At January 2, 2016 there was $172,000 outstanding on these overdraft facilities. There were no amounts outstanding on the overdraft facilities at September 30, 2015. The obligations under a secured revolving credit facility entered into in 2011 by the U.S. subsidiary of the Company, were guaranteed by the Company and were secured by all of the assets and a pledge of all of the capital stock, of Sevcon USA, Inc. The total amount outstanding under this revolving credit facility was $1,000,000 at January 2, 2016 and $500,000 at September 30, 2015. On January 25, 2016 the Company’s subsidiary, Sevcon USA, Inc., paid off $1,000,000 outstanding under, and terminated, its loan and Security Agreement with Citizens Bank, National Association. In order to fund the cash portion of the acquisition price of Bassi S.r.l. Unipersonale, on January 27, 2016 (see Note 16), the Company entered into a Term Loan Agreement providing for a credit facility with Banca Monte dei Paschi di Siena S.p.A (the “Bank”). The amount drawn down under this facility on that date was €14,000,000 (equivalent to approximately $15,200,000). The credit facility will mature on the fifth anniversary of the funding date, and may be repaid by the Company at any time after six months without penalty .

Changes in Other Comprehensive

Changes in Other Comprehensive Loss	3 Months Ended
	Jan. 02, 2016
Changes in Other Comprehensive Loss [Abstract]
Changes in Other Comprehensive Loss	(15) Changes in Other Comprehensive Loss The following table illustrates changes in the balances of each component of accumulated other comprehensive loss in 2016 and 2015: (in thousands of dollars) Foreign Currency Items Defined Benefit Pension Plans Accumulated Other Comprehensive Loss Balance September 30, 2014 (956 ) (7,873 ) (8,829 ) Other comprehensive loss for the period (318 ) (1,857 ) (2,175 ) Balance September 30, 2015 (1,274 ) (9,730 ) (11,004 ) Other comprehensive loss for the period (78 ) 59 (19 ) Balance January 2, 2016 (1,352 ) (9,671 ) (11,023 )

Subsequent events

Subsequent events	3 Months Ended
	Jan. 02, 2016
Subsequent events [Abstract]
Subsequent events	(16) Subsequent events On January 29, 2016 the Company acquired all the shares of Bassi S.r.l. Unipersonale, a company that designs and manufactures battery chargers for electric vehicles. The acquisition was funded with approximately $11,000,000 cash, 500,000 shares of Sevcon common stock, and the payment of an assumed liability to the former owner of Bassi S.r.l. Unipersonale of approximately $3,700,000 over a three-year period. Funding for the cash portion of the transaction was obtained under a five-year term loan facility provided by the New York City branch of the Italian bank Monte dei Paschi di Siena. The final determination of fair value for assets and liabilities will be completed as soon as the information necessary to complete the analysis is obtained. On January 25, 2016 the Company’s subsidiary, Sevcon USA, Inc., paid off $1,000,000 outstanding under, and terminated, its loan and Security Agreement with Citizens Bank, National Association.

Stock-based compensation plans

Stock-based compensation plans (Tables)	3 Months Ended
	Jan. 02, 2016
Stock-based compensation plans [Abstract]
Schedule of weighted average fair value assumptions of stock options	The weighted average input assumptions used and resulting fair values of stock options were as follows for fiscal 2016: Expected life (in years) 4.02 Risk-free interest rate 1.55 % Volatility 61.43 % Dividend yield 0.00 % Weighted-average fair value per share $ 4.82
Summary of option activity under employee share option plan	A summary of option activity under the employee share option plan as of January 2, 2016, and changes during the quarter then ended is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of September 30, 2015 - $ - - - Granted 38,460 $ 10.06 5.00 $ 11,153 Exercised - - - - Forfeited or Expired - - - - Outstanding at January 2, 2016 38,460 $ 10.06 4.96 $ 11,153 Exercisable - - - - Vested and expected to vest 35,088 $ 10.06 4.96 $ 10,176
Summary of restricted stock activity	A summary of restricted stock activity for the three months ended January 2, 2016 is as follows: Number of shares of Restricted Stock Weighted Average Grant-Date Fair Value Non-vested balance as of September 30, 2014 196,600 $ 5.97 Granted 11,540 $ 7.85 Vested (61,000 ) $ 6.41 Non-vested balance as of September 30, 2015 196,600 $ 5.97 Granted 11,540 $ 7.85 Vested (61,000 ) $ 6.41 Non-vested balance as of January 2, 2016 147,140 $ 5.94 Number of shares of Stock Options Weighted Average Grant-Date Fair Value Non-vested balance as of September 30, 2015 - $ - Granted 38,460 $ 7.85 Vested - $ - Non-vested balance as of January 2, 2016 38,460 $ 7.85

Calculation of earnings per s25

Calculation of earnings per share and weighted average shares outstanding (Tables)	3 Months Ended
	Jan. 02, 2016
Calculation of earnings per share and weighted average shares outstanding [Abstract]
Basic and fully diluted earnings per share	Basic and diluted net income per common share for the three month periods ended January 2, 2016 and January 3, 2015 were calculated as follows: (in thousands except per share data) Three Months ended January 2, 2016 January 3, 2015 Numerator: Net income attributable to common stockholders for computing net income per ordinary share – basic $ 11 $ 171 Dividend eliminated upon assumed conversion of convertible preferred stock - - Net income attributable to common stockholders for computing net income per ordinary share – diluted $ 11 $ 171 Denominator: Weighted average shares used in calculating net income per ordinary share – basic 3,429 3,427 Adjustment for assumed conversion of convertible preferred stock - - Adjustment for shares issuable upon vesting of restricted stock 147 86 Weighted average shares used in calculating net income per ordinary share – diluted 3,576 3,513 Net income per ordinary share - basic $ 0.00 $ 0.05 Net income per ordinary share - diluted $ 0.00 $ 0.05 No. of shares of convertible preferred stock that are anti-dilutive excluded from calculation of common stock equivalents 1,356 1,382

Segment information (Tables)

Segment information (Tables)	3 Months Ended
	Jan. 02, 2016
Segment information [Abstract]
Information concerning operations of business segments	Information concerning operations of these businesses is as follows: (in thousands of dollars) Three months ended January 2, 2016 Controls Capacitors Corporate Total Sales to external customers 8,707 408 - 9,115 Inter segment revenues - - - - Operating income (loss) 484 (43 ) (261 ) 180 Identifiable assets 32,099 889 154 33,142 Three months ended January 3, 2015 Controls Capacitors Corporate Total Sales to external customers 9,419 514 - 9,933 Inter-segment revenues - 2 - 2 Operating income 348 36 (102 ) 282 Identifiable assets 21,376 1,142 7,117 29,635
Revenues of electronic controls segment by products and services	In the electronic controls business segment, revenues were derived from the following products and services: (in thousands of dollars) Three Months ended January 2, 2016 January 3, 2015 Electronic controls for zero emission and hybrid electric vehicles $ 6,450 $ 6,064 Accessory and aftermarket products and services 2,257 3,355 Total controls segment revenues $ 8,707 $ 9,419

Employee benefit plans (Tables)

Employee benefit plans (Tables)	3 Months Ended
	Jan. 02, 2016
Employee benefit plans [Abstract]
Components of the net pension cost	The following table sets forth the components of the net pension cost for the three month periods ended January 2, 2016 and January 3, 2015, respectively: (in thousands of dollars) Three Months ended January 2, 2016 January 3, 2015 Interest cost $ 296 $ 316 Expected return on plan assets (289 ) (313 ) Amortization of net loss 77 64 Net periodic benefit cost 84 67 Net cost of defined contribution plans $ 155 $ 147 Net cost of all employee benefit plans $ 239 $ 214
Movement in liability for pension benefits	The following table sets forth the movement in the liability for pension benefits in the three month periods ended January 2, 2016 and January 3, 2015: (in thousands of dollars) Three Months ended January 2, 2016 January 3, 2015 Liability for pension benefits at beginning of period $ 10,963 $ 9,529 Interest cost 296 316 Expected return on plan assets (289 ) (313 ) Plan contributions (76 ) (119 ) Effect of exchange rate changes (247 ) (484 ) Balance at end of period $ 10,647 $ 8,929
Amounts recognized in balance sheet	Amounts recognized in the balance sheet consist of: (in thousands of dollars) January 2, 2016 January 3, 2015 Non-current liabilities $ 10,647 $ 8,929
Amounts recognized in accumulated other comprehensive income	Amounts recognized in accumulated other comprehensive loss consist of: (in thousands of dollars) January 2, 2016 January 3, 2015 Actuarial loss, net of $18,000 tax benefit (2015: net of $14,000 tax benefit) $ 59 $ 50
Pension plan assets measured and recorded at fair value	The tables below present information about the Company’s pension plan assets measured and recorded at fair value as of January 2, 2016 and September 30, 2015, and indicates the fair value hierarchy of the inputs utilized by the Company to determine the fair values. (in thousands of dollars) J anuary 2, 2016 Level 1* (Quoted prices in active markets) Level 2** (Significant observable inputs) Level 3*** (Unobservable inputs) Adept Strategy 9 Fund (a sub-fund of Adept Investment Management plc) - 12,356 - Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds (funds managed by Schroder Investment Management Limited) - 4,428 - U.S. Mutual Funds and Fixed Income Funds 2,589 - - U.S. Equity Funds 368 - - Per ‘Mutual Funds’ Other Types of Investments Cash 265 - - Total 3,222 16,784 - (in thousands of dollars) September 30, 2015 Level 1* (Quoted prices in active markets) Level 2** (Significant observable inputs) Level 3*** (Unobservable inputs) Adept Strategy 9 Fund (a sub-fund of Adept Investment Management plc) - 13,044 - Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds (funds managed by Schroder Investment Management Limited) - 3,845 - U.S. Mutual Funds and Fixed Income Funds 2,557 - - U.S. Equity Funds 350 - - Other Types of Investments Cash 331 - - Total 3,238 16,889 - * Level 1 investments represent mutual funds for which a quoted market price is available on an active market. These investments primarily hold stocks or bonds, or a combination of stocks and bonds. ** Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The Company’s pension plan financial assets held in the Adept Strategy 9 Fund and the Schroder investments are Level 2 assets. The Company uses the Net Asset Value to determine the fair value of underlying investments which (a) do not have readily determinable fair value; and (b) prepare their financial statements consistent with the measurement principles of an investment company. The Funds are not exchange traded. The Funds are not subject to any redemption notice periods or restrictions and can be redeemed on a daily basis. No gates or holdbacks or dealing suspensions are being applied to the Funds. The Funds are of perpetual duration. *** The Company currently does not have any Level 3 pension plan financial assets.
Estimated future benefit payments	The following estimated benefit payments, which reflect future service, as appropriate, have been or are expected to be paid: (in thousands of dollars) 2016 $ 445 2017 $ 514 2018 $ 532 2019 $ 540 2020 $ 550 2021 – 2025 $ 2,958

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Jan. 02, 2016
Inventories [Abstract]
Inventories	Inventories, net of reserve, were comprised of: (in thousands of dollars) January 2, 2016 September 30, 2015 Raw materials $ 2,790 $ 2,453 Work-in-process 86 90 Finished goods 5,322 4,247 $ 8,198 $ 6,790

Accrued expenses (Tables)

Accrued expenses (Tables)	3 Months Ended
	Jan. 02, 2016
Accrued expenses [Abstract]
Analysis of other accrued expenses	Set out below is an analysis of other accrued expenses at January 2, 2016 and September 30, 2015, which shows separately any items in excess of 5% of total current liabilities: (in thousands of dollars) January 2, 2016 September 30, 2015 Accrued compensation and related costs $ 840 $ 827 Other accrued expenses 932 1,146 $ 1,772 $ 1,973

Warranty reserves (Tables)

Warranty reserves (Tables)	3 Months Ended
	Jan. 02, 2016
Warranty reserves [Abstract]
Movement in warranty reserves	The movement in warranty reserves was as follows: (in thousands of dollars) Three Months ended January 2, 2016 January 3, 2015 Warranty reserves at beginning of period $ 278 $ 153 Decrease in beginning balance for warranty obligations settled during the period (67 ) - Foreign currency translation adjustment (3 ) (5 ) Net increase in warranty reserves for products sold during the period $ 5 $ 3 Warranty reserves at end of period $ 213 $ 151

Changes in Other Comprehensiv31

Changes in Other Comprehensive Loss (Tables)	3 Months Ended
	Jan. 02, 2016
Changes in Other Comprehensive Loss [Abstract]
Comprehensive Income (Loss)	The following table illustrates changes in the balances of each component of accumulated other comprehensive loss in 2016 and 2015: (in thousands of dollars) Foreign Currency Items Defined Benefit Pension Plans Accumulated Other Comprehensive Loss Balance September 30, 2014 (956 ) (7,873 ) (8,829 ) Other comprehensive loss for the period (318 ) (1,857 ) (2,175 ) Balance September 30, 2015 (1,274 ) (9,730 ) (11,004 ) Other comprehensive loss for the period (78 ) 59 (19 ) Balance January 2, 2016 (1,352 ) (9,671 ) (11,023 )

Basis of presentation (Details)

Basis of presentation (Details)	3 Months Ended
	Jan. 02, 2016
Basis of presentation [Abstract]
Equity interest ownership	50.00%
Joint venture ownership	50.00%
Third party's equity interest ownership	50.00%

Stock-based compensation plan33

Stock-based compensation plans (Details)	1 Months Ended		3 Months Ended		12 Months Ended
	Dec. 31, 2015USD ($)Employee$ / sharesshares	Dec. 31, 2014USD ($)Employeeshares	Jan. 02, 2016USD ($)Employee$ / sharesshares	Jan. 03, 2015USD ($)$ / sharesshares	Sep. 30, 2015USD ($)$ / sharesshares
Fair Value of Stock Options using Black-Scholes-Merton Option-Pricing Model [Abstract]
Expected life			4 years 7 days
Risk-free interest rate			1.55%
Volatility			61.43%
Dividend yield			0.00%
Weighted-average fair value per share (in dollars per share) | $ / shares			$ 4.82
Outstanding Shares [Abstract]
Outstanding shares, beginning balance (in shares) | shares			0
Outstanding shares, granted (in shares) | shares			38,460
Outstanding shares, exercised (in shares) | shares			0
Outstanding shares, forfeited or expired (in shares) | shares			0
Outstanding shares, ending balance (in shares) | shares			38,460		0
Outstanding shares, exercisable (in shares) | shares			0
Outstanding shares, vested and expected to vest (in shares) | shares			35,088
Weighted Average Exercise Price [Abstract]
Weighted average exercise price, beginning balance (in dollars per share) | $ / shares			$ 0
Weighted average exercise price, granted (in dollars per share) | $ / shares			10.06
Weighted average exercise price, exercised (in dollars per share) | $ / shares			0
Weighted average exercise price, forfeited or expired (in dollars per share) | $ / shares			0
Weighted average exercise price, ending balance (in dollars per share) | $ / shares			10.06		$ 0
Weighted average exercise price, exercisable (in dollars per share) | $ / shares			0
Weighted average exercise price, vested and expected to vest (in dollars per share) | $ / shares			$ 10.06
Weighted Average Remaining Contractual Term [Abstract]
Weighted average remaining contractual term			4 years 11 months 16 days		0 years
Weighted average remaining contractual term, granted			5 years
Weighted average remaining contractual term, exercised			0 years
Weighted average remaining contractual term, forfeited or expired			0 years
Weighted average remaining contractual term, exercisable			0 years
Weighted average remaining contractual term, vested and expected to vest			4 years 11 months 16 days
Aggregate Intrinsic Value [Abstract]
Aggregate intrinsic value, beginning balance | $			$ 0
Aggregate intrinsic value, granted | $			11,153
Aggregate intrinsic value, exercised | $			0
Aggregate intrinsic value, forfeited or expired | $			0
Aggregate intrinsic value, ending balance | $			11,153		$ 0
Aggregate intrinsic value, exercisable | $			0
Aggregate intrinsic value, vested and expected to vest | $			$ 10,176
Number of shares of Stock Options [Abstract]
Granted (in shares) | shares			38,460
Weighted Average Grant-Date Fair Value [Abstract]
Stock based compensation expense | $			$ 152,000	$ 113,000
Unrecognized compensation expense | $			$ 925,000
Weighted average period for unrecognized compensation expense to be recognized			2 years 3 months 18 days
Stock Options [Member]
Outstanding Shares [Abstract]
Outstanding shares, granted (in shares) | shares			38,460
Number of shares of Stock Options [Abstract]
Non-vested balance, beginning of period (in shares) | shares			0
Granted (in shares) | shares			38,460
Vested (in shares) | shares			0
Non-vested balance, end of period (in shares) | shares			38,460		0
Weighted Average Grant-Date Fair Value [Abstract]
Non-vested balance, beginning of period (in dollars per share) | $ / shares			$ 0
Granted (in dollars per share) | $ / shares			7.85
Vested (in dollars per share) | $ / shares			0
Non-vested balance, ending of period (in dollars per share) | $ / shares			$ 7.85		$ 0
Restricted Stock [Member]
Number of shares of Restricted Stock [Roll Forward]
Non-vested balance, beginning of period (in shares) | shares			196,600	196,600	196,600
Granted (in shares) | shares			11,540		11,540
Vested (in shares) | shares			(61,000)		(61,000)
Non-vested balance, end of period (in shares) | shares			147,140		196,600
Weighted Average Grant-Date Fair Value [Roll Forward]
Non-vested balance, beginning of period (in dollars per share) | $ / shares			$ 5.97	$ 5.97	$ 5.97
Granted (in dollars per share) | $ / shares			7.85		7.85
Vested (in dollars per share) | $ / shares			6.41		6.41
Non-vested balance, ending of period (in dollars per share) | $ / shares			$ 5.94		$ 5.97
Restricted Stock [Member] | Eight Employees [Member]
Number of shares of Restricted Stock [Roll Forward]
Granted (in shares) | shares		42,000
Weighted Average Grant-Date Fair Value [Abstract]
Number of employees directors with restricted stock grant | Employee		8
Estimated fair value of stock at date of grant | $		$ 330,000
Period for recognition of unearned compensation		2 years
Charge to income for restricted stock | $		$ 82,000
Quarterly charge to income for restricted stock | $		$ 41,000
Restricted Stock [Member] | Three Employees [Member]
Number of shares of Restricted Stock [Roll Forward]
Granted (in shares) | shares		20,000
Weighted Average Grant-Date Fair Value [Abstract]
Number of employees directors with restricted stock grant | Employee		3
Estimated fair value of stock at date of grant | $		$ 139,000
Period for recognition of unearned compensation		5 years
Charge to income for restricted stock | $		$ 14,000
Quarterly charge to income for restricted stock | $		$ 7,000
Restricted Stock [Member] | Nine Non-Employees [Member]
Number of shares of Restricted Stock [Roll Forward]
Granted (in shares) | shares			30,600
Weighted Average Grant-Date Fair Value [Abstract]
Number of employees directors with restricted stock grant | Employee			9
Estimated fair value of stock at date of grant | $			$ 225,000
Period for recognition of unearned compensation			12 months
Charge to income for restricted stock | $			$ 131,000
Quarterly charge to income for restricted stock | $			$ 56,000
Restricted Stock [Member] | Four Employees [Member]
Number of shares of Restricted Stock [Roll Forward]
Granted (in shares) | shares	11,540
Weighted Average Grant-Date Fair Value [Abstract]
Number of employees directors with restricted stock grant | Employee	4
Estimated fair value of stock at date of grant | $	$ 116,000,000
Period for recognition of unearned compensation	3 years
Quarterly charge to income for restricted stock | $	$ 10,000
Performance Shares [Member] | Nine Non-Employees [Member]
Weighted Average Grant-Date Fair Value [Abstract]
Number of employees directors with restricted stock grant | Employee	9
Estimated fair value of stock at date of grant | $	$ 185,000
Period for recognition of unearned compensation	3 years
Quarterly charge to income for restricted stock | $	$ 15,000
Exercise price (Per share) | $ / shares	$ 9.944
1996 Equity Incentive Plan [Member]
Weighted Average Grant-Date Fair Value [Abstract]
Shares reserved and available for grant (in shares) | shares			89,578	157,557

Cash dividends (Details)

Cash dividends (Details) - USD ($)	3 Months Ended
	Jan. 02, 2016	Sep. 30, 2015	Oct. 15, 2014
Preference share dividends [Abstract]
Preferred stock, outstanding (in shares)	452,124	452,124
Series A Convertible Preferred Stock, stated value (in dollars per share)	$ 0.10	$ 0.10
Series A Convertible Preferred Stock [Member]
Preference share dividends [Abstract]
Preferred stock, issued (in shares)	452,124
Preferred stock, outstanding (in shares)	452,124
Series A Convertible Preferred Stock, stated value (in dollars per share)	$ 24
Percentage of cumulative annual dividend, Series A Convertible Preferred Stock	4.00%
Semi annual dividend			$ 217,000
Dividend payable	Apr. 15, 2015
Next semi-annual dividend payable	Oct. 15, 2015

Calculation of earnings per s35

Calculation of earnings per share and weighted average shares outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Jan. 02, 2016	Jan. 03, 2015
Numerator:
Net income attributable to common stockholders for computing net income per ordinary share - basic	$ 11	$ 171
Dividend eliminated upon assumed conversion of convertible preferred stock	0	0
Net income attributable to common stockholders for computing net income per ordinary share - diluted	$ 11	$ 171
Denominator :
Weighted average shares used in calculating net income per ordinary share - basic (in shares)	3,429,000	3,427,000
Adjustment for assumed conversion of convertible preferred stock	0	0
Adjustment for shares issuable upon vesting of restricted stock (in shares)	147,000	86,000
Weighted average shares used in calculating net income per ordinary share - diluted (in shares)	3,576,000	3,513,000
Net income per ordinary share - basic (in dollars per share)	$ 0	$ 0.05
Net income per ordinary share - diluted (in dollars per share)	$ 0	$ 0.05
No. of shares of convertible preferred stock that are anti-dilutive excluded from calculation of common stock equivalents	1,356	1,382

Segment information (Details)

Segment information (Details) $ in Thousands	3 Months Ended
	Jan. 02, 2016USD ($)Segment	Jan. 03, 2015USD ($)
Segment information [Abstract]
Number of reportable segments | Segment	2
Segment Reporting Information, Revenue for Reportable Segment [Abstract]
Sales to external customers	$ 9,115	$ 9,933
Operating income (loss)	180	282
Identifiable assets	33,142	29,635
Reportable Segments [Member] | Controls [Member]
Segment Reporting Information, Revenue for Reportable Segment [Abstract]
Sales to external customers	8,707	9,419
Operating income (loss)	484	348
Identifiable assets	32,099	21,376
Reportable Segments [Member] | Capacitors [Member]
Segment Reporting Information, Revenue for Reportable Segment [Abstract]
Sales to external customers	408	514
Operating income (loss)	(43)	36
Identifiable assets	889	1,142
Intersegment Eliminations [Member]
Segment Reporting Information, Revenue for Reportable Segment [Abstract]
Sales to external customers	0	2
Intersegment Eliminations [Member] | Controls [Member]
Segment Reporting Information, Revenue for Reportable Segment [Abstract]
Sales to external customers	0	0
Intersegment Eliminations [Member] | Capacitors [Member]
Segment Reporting Information, Revenue for Reportable Segment [Abstract]
Sales to external customers	0	2
Corporate [Member]
Segment Reporting Information, Revenue for Reportable Segment [Abstract]
Sales to external customers	0	0
Operating income (loss)	(261)	(102)
Identifiable assets	$ 154	$ 7,117

Segment information, Revenues f

Segment information, Revenues from Electronic Controls Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 02, 2016	Jan. 03, 2015
Revenue from External Customer [Line Items]
Revenue from external customer	$ 9,115	$ 9,933
Reportable Segments [Member] | Controls [Member]
Revenue from External Customer [Line Items]
Revenue from external customer	8,707	9,419
Reportable Segments [Member] | Controls [Member] | Electronic controls for zero emission and hybrid electric vehicles [Member]
Revenue from External Customer [Line Items]
Revenue from external customer	6,450	6,064
Reportable Segments [Member] | Controls [Member] | Accessory and aftermarket products and services and engineering contracts [Member]
Revenue from External Customer [Line Items]
Revenue from external customer	$ 2,257	$ 3,355

Research and development (Detai

Research and development (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 02, 2016	Jan. 03, 2015
Cummins Generator Technologies and Newcastle University [Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Grant income recorded	$ 0	$ 8
Research and development expense on projects	6,807	23
Total grants awarded	37
U.K. Regional Growth Fund [Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Grant income recorded	30
Research and development expense on projects	165
Total grants awarded	625
Technology Strategy Board Project Grant in 2013 [Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Grant income recorded	289	225
Research and development expense on projects	$ 1,228	$ 956

Employee benefit plans (Details

Employee benefit plans (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 02, 2016		Jan. 03, 2015	Sep. 30, 2015
Components of net pension cost [Abstract]
Interest cost	$ 296		$ 316
Expected return on plan assets	(289)		(313)
Amortization of net loss	77		64
Net periodic benefit cost	84		67
Net cost of defined contribution plans	155		147
Net cost of all employee benefit plans	239		214
Movement in liability for pension benefits [Roll forward]
Liability for pension benefits at beginning of period	10,963		9,529
Interest cost	296		316
Expected return on plan assets	(289)		(313)
Plan contributions	(76)		(119)
Effect of exchange rate changes	(247)		(484)
Balance at end of period	10,647		8,929
Amounts recognized in balance sheet [Abstract]
Non-current liabilities	10,647		8,929	$ 10,963
Amounts recognized in accumulated other comprehensive loss [Abstract]
Actuarial loss, net of $16 and $47 tax benefit for the three and nine month periods, respectively, (2014: net of $13 and $39 tax benefit for the three and nine month periods, respectively)	59		50
Actuarial loss, tax benefit	18		$ 14
Estimated future benefit payments [Abstract]
2,016	445
2,017	514
2,018	532
2,019	540
2,020	550
2021 - 2024	2,958
Level 1 (Quoted prices in active markets) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	3,222	[1]		3,238
Level 2 (Significant observable inputs) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	16,784	[2]		16,889
Level 3 (Unobservable inputs) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	0	[3]		0
Adept Strategy 9 Fund [Member] | Level 1 (Quoted prices in active markets) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	0	[1]		0
Adept Strategy 9 Fund [Member] | Level 2 (Significant observable inputs) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	12,356	[2]		13,044
Adept Strategy 9 Fund [Member] | Level 3 (Unobservable inputs) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	0	[3]		0
Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds [Member] | Level 1 (Quoted prices in active markets) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	0	[1]		0
Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds [Member] | Level 2 (Significant observable inputs) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	4,428	[2]		3,845
Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds [Member] | Level 3 (Unobservable inputs) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	0	[3]		0
U.S. Equity Funds [Member] | Level 1 (Quoted prices in active markets) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	368	[1]		350
U.S. Equity Funds [Member] | Level 2 (Significant observable inputs) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	0	[2]		0
U.S. Equity Funds [Member] | Level 3 (Unobservable inputs) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	0	[3]		0
U.S. Mutual Funds and Fixed Income Funds [Member] | Level 1 (Quoted prices in active markets) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	2,589	[1]		2,557
U.S. Mutual Funds and Fixed Income Funds [Member] | Level 2 (Significant observable inputs) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	0	[2]		0
U.S. Mutual Funds and Fixed Income Funds [Member] | Level 3 (Unobservable inputs) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	0	[3]		0
Cash [Member] | Level 1 (Quoted prices in active markets) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	265	[1]		331
Cash [Member] | Level 2 (Significant observable inputs) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	0	[2]		0
Cash [Member] | Level 3 (Unobservable inputs) [Member]
Fair Value of Plan Assets [Abstract]
Fair value of plan assets	0	[3]		$ 0
U.S. Defined Benefit Plan [Member]
Estimated future employer contributions [Abstract]
Employer contributions	0
Estimated future employer contributions in current fiscal year	200
U.K. Defined Benefit Plan [Member]
Estimated future employer contributions [Abstract]
Employer contributions	76
Estimated future employer contributions in current fiscal year	$ 445
U.K. Defined Benefit Plan [Member] | Adept Strategy 9 Fund [Member]
Estimated future employer contributions [Abstract]
Defined benefit plan, actual plan asset allocations	80.00%
U.K. Defined Benefit Plan [Member] | Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds [Member]
Estimated future employer contributions [Abstract]
Defined benefit plan, actual plan asset allocations	20.00%
[1]	Level 1 inputs are quoted, unadjusted prices in active markets for identical assets or liabilities at the measurement date. The Company's pension plan financial assets in U.S. Equity Funds, Mutual Funds and Fixed Income Funds are Level 1 assets.
[2]	Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The Company's pension plan financial assets held in the Adept Strategy 9 Fund and the Schroder investments are Level 2 assets. The Company uses the Net Asset Value to determine the fair value of underlying investments which a do not have readily determinable fair value; and b prepare their financial statements consistent with the measurement principles of an investment company. The Funds are not exchange traded. The Funds are not subject to any redemption notice periods or restrictions and can be redeemed on a daily basis. No gates or holdbacks or dealing suspensions are being applied to the Funds. The Funds are of perpetual duration.
[3]	Level 3 inputs are unobservable inputs for an asset or liability. The Company currently does not have any Level 3 pension plan financial assets.

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Jan. 02, 2016	Sep. 30, 2015
Inventories [Abstract]
Raw materials	$ 2,790	$ 2,453
Work-in-process	86	90
Finished goods	5,322	4,247
Inventories	$ 8,198	$ 6,790

Fair value of financial instr41

Fair value of financial instruments (Details) $ in Millions	Jan. 02, 2016USD ($)
Level 2 (Significant observable inputs) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long term debt	$ 1

Accrued expenses (Details)

Accrued expenses (Details) - USD ($) $ in Thousands	Jan. 02, 2016	Sep. 30, 2015
Accrued expenses [Abstract]
Accrued compensation and related costs	$ 840	$ 827
Other accrued expenses	932	1,146
Accrued expenses	$ 1,772	$ 1,973
Percentage of total current liabilities used to analyze accrued expenses	5.00%	5.00%

Warranty reserves (Details)

Warranty reserves (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 02, 2016	Jan. 03, 2015
Movement in warranty reserves [Roll Forward]
Warranty reserves at beginning of period	$ 278	$ 153
Decrease in beginning balance for warranty obligations settled during the period	(67)	0
Foreign currency translation adjustment	(3)	(5)
Net increase in warranty reserves for products sold during the period and warranty expiration	5	3
Warranty reserves at end of period	$ 213	$ 151

Debt (Details)

Debt (Details) - USD ($) $ in Thousands	Jan. 25, 2016	Jan. 02, 2016	Jan. 03, 2015
Subsequent Event [Member]
Debt Instrument [Line Items]
Extinguishment of security agreement	$ 1,000
Secured Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit facility, amount outstanding		$ 1,000	$ 0
Citizens Bank [Member] | Secured Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 3,500

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Thousands	Jan. 02, 2016	Sep. 30, 2015
Commitments and Contingencies [Abstract]
Maximum recorded liability of deferred annuities	$ 150	$ 153
Minimum rental commitments under non-cancelable leases [Abstract]
2,016	227
2,017	211
2,018	200
2,019	188
2,020	173
Thereafter	2,544
Total overdraft facility	1,350
Revolving credit facility	172	0
Outstanding amount on Overdraft facitilty	$ 1,000	$ 500

Changes in Other Comprehensiv46

Changes in Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jan. 02, 2016	Sep. 30, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at the beginning of the period	$ (11,004)	$ (8,829)
Current period other comprehensive loss	(19)	(2,175)
Balance at the end of the period	(11,023)	(11,004)
Foreign Currency Items [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at the beginning of the period	(1,274)	(956)
Current period other comprehensive loss	(78)	(318)
Balance at the end of the period	(1,352)	(1,274)
Defined Benefit Pension Plans [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at the beginning of the period	(9,730)	(7,873)
Current period other comprehensive loss	59	(1,857)
Balance at the end of the period	$ (9,671)	$ (9,730)

Subsequent events (Details)

Subsequent events (Details) - Subsequent Event [Member] - USD ($) shares in Thousands, $ in Thousands	Jan. 29, 2016	Jan. 25, 2016
Subsequent Event [Line Items]
Extinguishment of security agreement		$ 1,000
Loan and Security agreement [Member]
Subsequent Event [Line Items]
Extinguishment of security agreement		$ 1,000
Bassi S.r.l. Unipersonale [Member]
Subsequent Event [Line Items]
Cash for acquisition	$ 11,000
Shares issued for acquisiton (in share)	500
Payment of assumed liability	$ 3,700
Term of liability for acquisition	3 years
Term of loan facility related to cash	5 years