Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Jun. 30, 2014 | Aug. 01, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'INNOVATIVE SOLUTIONS & SUPPORT INC | ' |
Entity Central Index Key | '0000836690 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 16,955,308 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
Current Assets | ' | ' |
Cash and cash equivalents | $14,393,328 | $16,386,207 |
Accounts receivable | 4,554,178 | 4,489,434 |
Unbilled receivables | 11,340,583 | 6,539,442 |
Inventories | 5,872,887 | 4,377,513 |
Deferred income taxes | 1,975,191 | 2,002,679 |
Prepaid expenses and other current assets | 719,030 | 642,210 |
Total current assets | 38,855,197 | 34,437,485 |
Property and equipment, net | 7,530,490 | 7,320,495 |
Non-current deferred income taxes | 66,177 | 650,998 |
Other assets | 115,647 | 221,533 |
Total Assets | 46,567,511 | 42,630,511 |
Current Liabilities | ' | ' |
Accounts payable | 3,289,969 | 2,372,137 |
Accrued expenses | 3,419,146 | 3,672,909 |
Deferred revenue | 678,712 | 447,525 |
Total current liabilities | 7,387,827 | 6,492,571 |
Non-current deferred income taxes | 132,800 | 132,202 |
Other liabilities | 11,753 | 11,491 |
Total Liabilities | 7,532,380 | 6,636,264 |
Commitments and contingencies (See Note 6) | ' | ' |
Shareholders' Equity | ' | ' |
Preferred Stock, 10,000,000 shares authorized, $.001 par value, of which 200,000 shares are authorized as Class A Convertible stock. No shares issued and outstanding at June 30, 2014 and September 30, 2013 | ' | ' |
Common stock, $.001 par value: 75,000,000 shares authorized, 18,712,115 and 18,632,328 issued at June 30, 2014 and September 30, 2013, respectively | 18,712 | 18,632 |
Additional paid-in capital | 50,631,533 | 49,880,571 |
Retained earnings | 8,774,476 | 6,484,634 |
Treasury stock, at cost, 1,756,807 shares at June 30, 2014 and September 30, 2013 | -20,389,590 | -20,389,590 |
Total Shareholders' Equity | 39,035,131 | 35,994,247 |
Total Liabilities and Shareholders' Equity | $46,567,511 | $42,630,511 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 18,712,115 | 18,632,328 |
Treasury stock, shares | 1,756,807 | 1,756,807 |
Series A Preferred Stock [Member] | ' | ' |
Preferred Stock, shares authorized | 200,000 | 200,000 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Net sales: | ' | ' | ' | ' |
Product | $7,589,212 | $6,408,931 | $23,388,043 | $17,994,508 |
Engineering development contracts | 2,986,764 | 2,369,323 | 10,788,759 | 5,535,455 |
Total net sales | 10,575,976 | 8,778,254 | 34,176,802 | 23,529,963 |
Cost of sales: | ' | ' | ' | ' |
Product | 3,924,222 | 2,848,306 | 11,603,748 | 7,611,303 |
Engineering development contracts | 3,489,627 | 2,484,492 | 11,845,367 | 5,481,559 |
Total cost of sales | 7,413,849 | 5,332,798 | 23,449,115 | 13,092,862 |
Gross profit | 3,162,127 | 3,445,456 | 10,727,687 | 10,437,101 |
Operating expenses: | ' | ' | ' | ' |
Research and development | 647,894 | 559,297 | 1,935,692 | 2,215,276 |
Selling, general and administrative | 1,854,332 | 2,600,659 | 5,633,832 | 6,340,900 |
Total operating expenses | 2,502,226 | 3,159,956 | 7,569,524 | 8,556,176 |
Operating income | 659,901 | 285,500 | 3,158,163 | 1,880,925 |
Interest income | 5,280 | 8,529 | 16,246 | 32,282 |
Other income | 7,939 | 4,924 | 27,307 | 29,730 |
Income before income taxes | 673,120 | 298,953 | 3,201,716 | 1,942,937 |
Income tax expense (benefit) | 176,090 | -8,520 | 911,874 | 210,751 |
Net income | $497,030 | $307,473 | $2,289,842 | $1,732,186 |
Net income per common share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.03 | $0.02 | $0.14 | $0.10 |
Diluted (in dollars per share) | $0.03 | $0.02 | $0.13 | $0.10 |
Cash dividends per share (in dollars per share): | ' | ' | ' | $1.50 |
Weighted average shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 16,951,360 | 16,790,484 | 16,918,423 | 16,725,305 |
Diluted (in shares) | 17,177,572 | 16,981,285 | 17,141,532 | 16,790,518 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $2,289,842 | $1,732,186 |
Adjustments to reconcile net income to net cash (used in) operating activities: | ' | ' |
Depreciation and amortization | 413,613 | 365,919 |
Share-based compensation expense: | ' | ' |
Stock options | 510,493 | 528,571 |
Nonvested stock awards | 150,055 | 150,019 |
Tax adjustment from share-based compensation | -160,192 | -16,521 |
Loss on disposal of property and equipment | 78 | 627 |
Excess and obsolete inventory cost | 41,218 | 48,450 |
Deferred income taxes | 612,907 | -311,453 |
(Increase) decrease in: | ' | ' |
Accounts receivable | -64,744 | -1,118,440 |
Unbilled receivables | -4,801,141 | -3,592,659 |
Inventories | -1,536,592 | -285,781 |
Prepaid expenses and other current assets | -76,820 | 63,584 |
Other non-current assets | 105,886 | ' |
Increase (decrease) in: | ' | ' |
Accounts payable | 917,832 | 877,887 |
Accrued expenses | -62,530 | 690,780 |
Income taxes payable | -190,971 | 308,660 |
Deferred revenue | 231,187 | -1,027,476 |
Net cash used in operating activities | -1,619,879 | -1,585,647 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of property and equipment | -624,284 | -555,694 |
Proceeds from the sale of property and equipment | 599 | 4,500 |
Net cash used in investing activities | -623,685 | -551,194 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Purchase of treasury stock | ' | -696 |
Dividend paid | ' | -25,007,519 |
Proceeds from exercise of stock options | 250,685 | 775,405 |
Net cash provided by (used in) financing activities | 250,685 | -24,232,810 |
Net decrease in cash and cash equivalents | -1,992,879 | -26,369,651 |
Cash and cash equivalents, beginning of period | 16,386,207 | 42,977,501 |
Cash and cash equivalents, end of period | 14,393,328 | 16,607,850 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ' | ' |
Cash paid for income taxes | $650,000 | $230,000 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies: | 9 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Summary of Significant Accounting Policies: | ' | ||||||||||
Summary of Significant Accounting Policies: | ' | ||||||||||
1. Summary of Significant Accounting Policies | |||||||||||
Description of the Company | |||||||||||
Innovative Solutions and Support, Inc. (the “Company” or “IS&S”) was incorporated in Pennsylvania on February 12, 1988. The Company operates in one business segment as a systems integrator that designs, manufactures, sells, and services air data equipment, engine display systems, standby equipment, primary flight guidance, and cockpit display systems for retrofit applications and original equipment manufacturers (“OEMs”). The Company supplies integrated Flight Management Systems (“FMS”) and advanced Global Positioning System (“GPS”) receivers that enable reduced carbon footprint navigation. The Company continues to position itself as a system integrator, which provides the Company with the potential to generate more substantive orders over a broader product base. The strategy, as both a manufacturer and integrator, is designed to leverage the latest technologies developed for the computer and telecommunications industries into advanced and cost-effective solutions for the general aviation, commercial air transport, United States Department of Defense (“DoD”)/governmental, and foreign military markets. This approach, combined with the Company’s industry experience, is designed to enable IS&S to develop high-quality products and systems, to reduce product time to market, and to achieve cost advantages over products offered by its competitors. Customers include commercial air transport carriers and corporate/general aviation companies, the DoD and its commercial contractors, aircraft operators, aircraft modification centers, foreign militaries, and various OEMs. | |||||||||||
Basis of Presentation | |||||||||||
The accompanying unaudited condensed consolidated financial statements are presented pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) in accordance with the disclosure requirements for the quarterly report on Form 10-Q and, therefore, do not include all of the information and footnotes required by generally accepted accounting principles in the United States (“GAAP”) for complete annual financial statements. In the opinion of Company management, the unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary to state fairly the results for the interim periods presented. The condensed consolidated balance sheet as of September 30, 2013 is derived from the audited financial statements of the Company. Operating results for the three and nine months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2014. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes of the Company included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013. | |||||||||||
The Company’s condensed consolidated financial statements include the accounts of its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |||||||||||
Use of Estimates | |||||||||||
Preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, as of the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Estimates are used in accounting for, among other items, long term contracts, allowance for doubtful accounts, inventory obsolescence, product warranty cost liability, income taxes, engineering and material costs on Engineering Development Contracts (“EDC”) programs, percentage-of-completion on EDC, recoverability of long-lived assets, stock-based compensation expense, and contingencies. Actual results could differ materially from those estimates. | |||||||||||
Cash and Cash Equivalents | |||||||||||
Highly liquid investments, purchased with an original maturity of three months or less, are classified as cash equivalents. Cash equivalents at June 30, 2014 and September 30, 2013 consist of funds invested in money market funds with financial institutions. | |||||||||||
Property and Equipment | |||||||||||
Property and equipment are stated at cost. Depreciation is provided using an accelerated method over the estimated useful lives of the assets (the lesser of three to seven years or over the related lease term), except for the manufacturing facility and the corporate airplane. The building is being depreciated on a straight line basis over 39 years. Major additions and improvements are capitalized. Maintenance and repairs that do not improve or extend the life of assets are charged to expense as incurred. The airplane was depreciated on a straight-line basis over its estimated useful life of ten years; however, because the airplane had been depreciated previously to its estimated salvage value, no depreciation expense was recorded during the nine months ended June 30, 2014 or 2013. | |||||||||||
Long-Lived Assets | |||||||||||
The Company assesses the impairment of long-lived assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360-10, “Property, Plant and Equipment” (“ASC Topic 360-10”). This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. In addition, long-lived assets to be disposed of must be reported at the lower of the carrying amount or fair value less cost to sell. The Company considers historical performance and future estimated results in its evaluation of potential impairment and compares the carrying amount of the asset to estimated future cash flows expected from use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of the impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is measured by discounting expected future cash flows. No impairment charges were recorded during the nine months ended June 30, 2014 or 2013. | |||||||||||
Revenue Recognition | |||||||||||
The Company enters into sales arrangements with customers that, in general, provide for the Company to design, develop, manufacture, and deliver air data equipment, engine display systems, large flat-panel display systems, and advanced monitoring systems that measure and display critical flight information, including data relative to aircraft separation, airspeed, altitude, and engine and fuel data measurements. The Company’s sales arrangements may include multiple deliverables as defined in FASB ASC Topic 605-25 “Multiple-Element Arrangements” (“ASC Topic 605-25”), which include typically design and engineering services, and the production and delivery of the flat panel display and related components. The Company includes any design and engineering services elements in EDC sales and any functional upgrade and product elements in product sales in the accompanying consolidated statement of income. | |||||||||||
To the extent that an arrangement contains software elements that are essential to the functionality of tangible products sold in the arrangement, the Company recognizes revenue for the deliverables in accordance with the guidance included in FASB Accounting Standards Update 2009-14, “Revenue Arrangements That Include Software Elements” (“ASU 2009-14”), FASB Accounting Standards Update 2009-13, “Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force” (“ASU 2009-13”), and FASB ASC Topic 605, “Revenue Recognition” (“ASC Topic 605”). | |||||||||||
To the extent that an arrangement contains software components, which may include functional upgrades, that are sold on a standalone basis and which the Company has deemed outside the scope of the exception defined by ASU 2009-14, the Company recognizes software revenue in accordance with ASC Topic 985, “Software” (“ASC Topic 985”). | |||||||||||
Multiple Element Arrangements - | |||||||||||
The Company identifies all goods and/or services that are to be delivered separately under such a sales arrangement and allocates sales to each deliverable (if more than one) based on that deliverable’s selling price. The Company considers the appropriate recognition method for each deliverable. The Company’s multiple element arrangements can include defined design and development activities, functional upgrades, and product sales. | |||||||||||
The Company utilizes the selling price hierarchy that has been established by ASU 2009-13, which requires that the selling price for each deliverable be based on vendor-specific objective evidence if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific objective evidence nor third-party evidence is available. To the extent that an arrangement includes a deliverable for which estimated selling price is used, the Company determines the best estimate of selling price by applying the same pricing policies and methodologies that would be used to determine the price to sell the deliverable on a standalone basis. | |||||||||||
To the extent that an arrangement contains defined design and EDC activities as identified deliverables and products (resulting in a multiple element arrangement), the Company recognizes as EDC sales amounts earned during the design and development phase of the contract following the guidance included in FASB ASC Topic 605-35, “Construction-Type and Production-Type Contracts” (“ASC Topic 605-35”). To the extent that multiple element arrangements include product sales, sales are generally recognized once revenue recognition criteria for the product deliverables have been met based on the provisions of ASC Topic 605. The Company includes any design and engineering services elements in EDC sales, and any functional upgrade and product elements in “product” sales on the accompanying consolidated statement of income. | |||||||||||
Single Element Arrangements — | |||||||||||
Products - | |||||||||||
To the extent that a single element arrangement provides for product sales and repairs, the Company recognizes sales when revenue recognition criteria for the product deliverables have been met based on the provisions of ASC Topic 605. In addition, the Company receives orders for equipment and parts. Generally, revenue from the sale of such products is recognized upon shipment to the customer. | |||||||||||
The Company offers its customers extended warranties for additional fees. These warranty sales are recorded as deferred revenue and recognized as sales on a straight-line basis over the warranty period. | |||||||||||
Engineering Development Contracts | |||||||||||
The Company may enter into contracts to perform specified design and EDC services related to its products. The Company recognizes revenue from these arrangements as EDC sales, following the guidance included in ASC Topic 605-35, and considers the nature of these contracts (including term, size of contract, and level of effort) when determining the appropriate accounting treatment for a particular contract. Certain of these contracts are accounted for under the percentage-of-completion method of accounting when the Company determines that progress toward completion is reasonable and reliably estimable, and the contract is long-term in nature. The Company uses the completed contract method for all others contracts. Sales and profit margins under the percentage-of-completion method are recorded based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract under the cost-to-cost method (for development effort). | |||||||||||
The percentage-of-completion method of accounting requires the Company to estimate the profit margin for each individual contract, and to apply that profit margin on a uniform basis as sales are recorded under the contract. The estimation of profit margin requires the Company to make projections of the total sales to be generated and the total costs that will be incurred under each contract. The projections require the Company to make numerous assumptions and estimates relating to items, such as the complexity of design and related development costs, performance of subcontractors, availability and cost of materials, engineering productivity and cost, overhead, and capital costs. Contracts sometimes include purchase options for additional quantities and customer change orders for additional or revised product functionality. Sales and costs related to profitable purchase options are included in the Company’s estimates only when the options are exercised, while sales and costs related to unprofitable purchase options are included in the Company’s estimates when exercise is determined to be probable. Sales related to change orders are included in profit estimates only if they can be reliably estimated and collectability is reasonably assured. Purchase options and change orders are accounted for, either as an integral part of the original contract or separately, depending upon the nature and value of the item. Anticipated losses on contracts are recognized in full in the period in which losses become probable and estimable. | |||||||||||
For contracts for which uncertainty regarding the performance against certain contract terms remains and in which no loss is expected, the Company uses the zero profit margin approach to applying the percentage of completion method following the guidance included in FASB ASC Topic 605-35. | |||||||||||
The Company reviews estimates of profit margins for contracts on a quarterly basis. If the initial estimates of sales and costs under a contract are accurate, the percentage-of-completion method results in the profit margin being recorded evenly as revenue is recognized under the contract. Changes in these underlying estimates because of revisions in sales and cost estimates or to the exercise of contract options may result in profit margins being recognized unevenly over a contract because such changes are accounted for on a cumulative basis in the period estimates are revised. Significant changes in estimates related to accounting for long-term contracts may have a material effect on the Company’s results of operations in the period in which the revised estimate is made. Cumulative catch-up adjustments resulting from changes in estimates are disclosed in the notes to the consolidated financial statements of the Company. | |||||||||||
Income Taxes | |||||||||||
Income taxes are recorded in accordance with FASB ASC Topic 740, “Income Taxes” (“ASC Topic 740”), which utilizes a balance sheet approach to provide for income taxes. Under this method, the Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company’s assets, liabilities, and expected benefits of utilizing net operating losses (“NOL”) and tax credit carry-forwards. The impact on deferred taxes of changes in tax rates and laws, if any, are applied to the years during which temporary differences are expected to be settled and are reflected in the consolidated financial statements in the period of enactment. At the end of each interim reporting period, the Company prepares an estimate of the annual effective income tax rate and applies that annual effective income tax rate to ordinary year-to-date pre-tax income for the interim period. Specific tax items discrete to a particular quarter are recorded in income tax expense for that quarter. The estimated annual effective tax rate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods. | |||||||||||
Deferred tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. Significant weight is given to evidence that can be objectively verified, and significant management judgment is required in determining any valuation allowances recorded against net deferred tax assets. The Company evaluates deferred income taxes on a quarterly basis to determine if valuation allowances are required by considering available evidence. Deferred tax assets are recognized when expected future taxable income is sufficient to allow the related tax benefits to reduce taxes that would otherwise be payable. The sources of taxable income that may be available to realize the benefit of deferred tax assets are future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and credit carry-forwards, taxable income in carry-back years, and tax planning strategies which are both prudent and feasible. The current balance of the deferred tax valuation allowance relates principally to NOL of certain state taxing jurisdictions. The Company believes that its estimate of future taxable income is inherently uncertain, and if its current or future operations generate losses, further adjustments to the valuation allowance are possible. There is currently no assurance of such future income before income taxes. | |||||||||||
The accounting for uncertainty in income taxes requires a more likely than not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company records a liability for the difference between the (i) benefit recognized and measured for financial statement purposes and (ii) the tax position taken or expected to be taken on the Company’s tax return. To the extent that the Company’s assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The Company has elected to record any interest or penalties associated with uncertain tax positions as income tax expense. | |||||||||||
The Company files a consolidated United States federal income tax return. The Company prepares and files tax returns based on the interpretation of tax laws and regulations, and records estimates based on these judgments and interpretations. In the normal course of business, the tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities, and the Company records a liability when it is probable that there will be an assessment. The Company adjusts the estimates periodically as the result of ongoing examinations by and settlements with the various taxing authorities and changes in tax laws, regulations and precedent. The consolidated tax provision of any given year includes adjustments to prior years’ income tax accruals that are considered appropriate and any related estimated interest. Management believes that adequate accruals have been made for income taxes. Differences between estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the Company’s consolidated financial position but could possibly be material to its consolidated results of operations or cash flow of any one period. | |||||||||||
Engineering Development | |||||||||||
The Company invests a large percentage of its sales in engineering development, both research and development (“R&D”) and EDC. At June 30, 2014, approximately 38% of the Company’s employees were engaged in various engineering development projects. Total engineering development expense is comprised of both design and EDC related to specific customer contracts and R&D. EDC expense consists primarily of payroll-related expenses of employees engaged in EDC projects, engineering related product materials and equipment, and subcontracting costs. R&D charges incurred for product design, product enhancements and future product development are expensed as incurred. EDC and design charges related to specific customer arrangements are charged to cost of sales-EDC based on the method of contract accounting (either percentage-of-completion or completed-contract) applicable to such contracts. | |||||||||||
Comprehensive Income | |||||||||||
Pursuant to FASB ASC Topic 220, “Comprehensive Income” (“ASC Topic 220”), the Company is required to classify items of other comprehensive income by their nature in the balance sheet and to display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of its condensed consolidated balance sheets. For the three and nine months ending June 30, 2014 and 2013, respectively, comprehensive income consisted of net income only. There were no items of other comprehensive income or accumulated other comprehensive income balances in the equity accounts for any of the periods presented. | |||||||||||
Fair Value of Financial Instruments | |||||||||||
The net carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate their fair value because of the short-term nature of these instruments. For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value as follows: | |||||||||||
Level 1 — Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. | |||||||||||
Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: | |||||||||||
· Quoted prices for similar assets or liabilities in active markets; | |||||||||||
· Quoted prices for identical or similar assets in non-active markets; | |||||||||||
· Inputs other than quoted prices that are observable for the asset or liability; and | |||||||||||
· Inputs that are derived principally from or corroborated by other observable market data. | |||||||||||
Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. | |||||||||||
The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2014 and September 30, 2013, according to the valuation techniques the Company used to determine their fair values. | |||||||||||
Fair Value Measurement on June 30, 2014 | |||||||||||
Quoted Price in | Significant Other | Significant | |||||||||
Active Markets for | Observable | Unobservable | |||||||||
Identical Assets | Inputs | Inputs | |||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||
Assets | |||||||||||
Cash and cash equivalents: | |||||||||||
Money market funds | $ | 13,392,082 | $ | — | $ | — | |||||
Fair Value Measurement on September 30, 2013 | |||||||||||
Quoted Price in | Significant Other | Significant | |||||||||
Active Markets for | Observable | Unobservable | |||||||||
Identical Assets | Inputs | Inputs | |||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||
Assets | |||||||||||
Cash and cash equivalents: | |||||||||||
Money market funds | $ | 14,396,014 | $ | — | $ | — | |||||
Stock-Based Compensation | |||||||||||
The Company accounts for stock-based compensation under FASB ASC Topic 505-50, “Equity-Based Payments to Non-Employees” (“ASC Topic 505-50”), and FASB ASC Topic 718, “Stock Compensation” (“ASC Topic 718”), which require the Company to measure the cost of employee or non-employee director services received in exchange for an award of equity instruments based on the grant-date fair value of the award using an option pricing model. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. | |||||||||||
Warranty | |||||||||||
The Company offers warranties of various lengths. At the time of shipment, the Company establishes a reserve for estimated costs of warranties based on its best estimate of the amounts necessary to settle future and existing claims using historical data on products sold as of the balance sheet date. The length of the warranty period, the product’s failure rates, and the customer’s usage affect warranty cost. If actual warranty costs differ from the Company’s estimated amounts, future results of operations could be affected adversely. Warranty cost is recorded as cost of sales, and the reserve balance is recorded as an accrued expense. Although the Company maintains product quality programs and processes, its warranty obligations are affected by product failure rates and the related corrective costs. If actual product failure rates and/or corrective costs differ from the estimates, the Company revises the estimated warranty liability accordingly. | |||||||||||
Concentrations | |||||||||||
Major Customers and Products | |||||||||||
For the three months ended June 30, 2014, three customers, Eclipse Aerospace, Inc. (“Eclipse”), FedEx Corp. (“FedEx”), and Pilatus Aircraft Limited (“Pilatus”), accounted for 22%, 17% and 13% of net sales, respectively. During the nine months ended June 30, 2014, four customers, Pilatus, Eclipse, FedEx, and the DoD, accounted for 15%, 14%, 13% and 11% of net sales, respectively. | |||||||||||
For the three months ended June 30, 2013, three customers, Eclipse, L-3 Communications Corporation, and FedEx accounted for 29%, 10%, and 10% of net sales, respectively. During the nine months ended June 30, 2013, two customers, Eclipse and American Airlines, Inc. (“American”), accounted for 27%, and 14% of net sales, respectively. | |||||||||||
Major Suppliers | |||||||||||
The Company buys several components from sole source suppliers. Although there are a limited number of manufacturers of particular components, the Company believes other suppliers could provide similar components on comparable terms. | |||||||||||
For the three months ended June 30, 2014 the Company had one supplier that was individually responsible for greater than 10% of the Company’s total inventory related purchases. For the nine months ended June 30, 2014 the Company had two suppliers that were individually responsible for greater than 10% of the Company’s total inventory related purchases. | |||||||||||
For the three months ended June 30, 2013, the Company had three suppliers that were individually responsible for greater than 10% of the Company’s total inventory purchases. For the nine months ended June 30, 2013 the Company had one supplier that was individually responsible for greater than 10% of the Company’s total inventory purchases. | |||||||||||
Concentration of Credit Risk | |||||||||||
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash balances and accounts receivable. The Company invests its excess cash where preservation of principal is the primary consideration. Cash balances are maintained with two major banks. Balances on deposit with certain money market accounts and operating accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) limits. The Company’s customer base consists principally of companies within the aviation industry. The Company requests advance payments and/or letters of credit from customers that it considers to be credit risks. | |||||||||||
The Company has no allowance for doubtful accounts as of June 30, 2014 and September 30, 2013 as a result of a favorable history of collections and an ongoing assessment of customer accounts. | |||||||||||
Recent Accounting Pronouncements | |||||||||||
In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 provides that a liability related to an unrecognized tax benefit should be offset against a deferred tax asset for a NOL carryforward, a similar tax loss or a tax credit carryforward if such liability is to be settled by reducing an available tax carryforward in the event the uncertain tax position is disallowed. ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013 for public entities, with early adoption permitted. The adoption of ASU 2013-11 did not have a material impact on the Company’s consolidated financial statements as of June 30, 2014. | |||||||||||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires an entity to disclose sufficient qualitative and quantitative information surrounding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance is effective for the Company in fiscal year 2018, and could significantly impact the reporting of the Company’s financial position, results of operations or cash flows upon implementation. Early adoption is not permitted. This ASU supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition” and permits the use of either a full retrospective method or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. Given the significance of this change, the Company is currently in the process of reviewing the new standard and its potential impact on the Company’s future financial reporting and disclosures. | |||||||||||
Supplemental_Balance_Sheet_Dis
Supplemental Balance Sheet Disclosures | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Supplemental Balance Sheet Disclosures | ' | |||||||
Supplemental Balance Sheet Disclosures | ' | |||||||
2. Supplemental Balance Sheet Disclosures | ||||||||
Unbilled Receivables | ||||||||
Unbilled receivables represent primarily sales recorded under the percentage-of-completion method of accounting that, in accordance with applicable contract terms, have not been billed to customers. Unbilled receivables, net of customer payments, were $11.3 million and $6.5 million at June 30, 2014 and September 30, 2013, respectively. | ||||||||
The percentage-of-completion method of accounting for EDC sales requires estimates of profit margins for contracts be reviewed by the Company on a quarterly basis. If the initial estimates of sales and costs under a contract are accurate, the percentage-of-completion method results in the profit margin being recorded evenly as revenue is recognized under the contract. Changes in these underlying estimates because of revisions in sales and cost estimates or the exercise of contract options may result in profit margins being recognized unevenly over the life of a contract because such changes are accounted for on a cumulative basis in the period in which the estimates are revised. Significant changes in estimates related to accounting for long-term contracts may have a material effect on the Company’s results of operations in the period in which the revised estimates are made. Cumulative catch-up adjustments resulting from changes in estimates reduced operating income by $559,000 and $1,172,000, respectively, for the three and nine months ended June 30, 2014. Cumulative catch-up adjustments resulting from changes in estimates reduced operating income by $161,000 and $364,000, respectively, for the three and nine months ended June 30, 2013. | ||||||||
Inventories | ||||||||
Inventories are stated at the lower of cost (first-in, first-out) or market, net of reserve for excess and obsolete inventory, and consist of the following: | ||||||||
June 30, | September 30, | |||||||
2014 | 2013 | |||||||
Raw materials | $ | 4,609,075 | $ | 3,126,592 | ||||
Work-in-process | 1,111,548 | 857,602 | ||||||
Finished goods | 152,264 | 393,319 | ||||||
$ | 5,872,887 | $ | 4,377,513 | |||||
Prepaid expenses and other current assets | ||||||||
Prepaid expenses and other current assets consist of the following: | ||||||||
June 30, | September 30, | |||||||
2014 | 2013 | |||||||
Prepaid insurance | $ | 394,398 | $ | 350,913 | ||||
Other | 324,632 | 291,297 | ||||||
$ | 719,030 | $ | 642,210 | |||||
Property and equipment | ||||||||
Property and equipment, net consists of the following: | ||||||||
June 30, | September 30, | |||||||
2014 | 2013 | |||||||
Land | $ | 1,021,245 | $ | 1,021,245 | ||||
Computer equipment | 2,254,829 | 2,173,266 | ||||||
Corporate airplane | 3,128,504 | 3,128,504 | ||||||
Furniture and office equipment | 1,063,254 | 1,062,296 | ||||||
Manufacturing facility | 5,719,805 | 5,631,001 | ||||||
Equipment | 5,024,272 | 4,678,678 | ||||||
18,211,909 | 17,694,990 | |||||||
Less: Accumulated depreciation and amortization | (10,681,419 | ) | (10,374,495 | ) | ||||
$ | 7,530,490 | $ | 7,320,495 | |||||
Depreciation and amortization related to property and equipment was approximately $140,000 and $113,000 for the three months ended June 30, 2014 and 2013, respectively. The corporate airplane is utilized primarily in support of product development and has been depreciated to its estimated salvage value. | ||||||||
Depreciation and amortization related to property and equipment was approximately $414,000 and $330,000 for the nine months ended June 30, 2014 and 2013, respectively. | ||||||||
Other assets | ||||||||
Other assets consist of the following: | ||||||||
June 30, | September 30, | |||||||
2014 | 2013 | |||||||
Intangible assets, net of accumulated amortization of $495,037 at June 30, 2014 and September 30, 2013 | $ | 105,200 | $ | 105,200 | ||||
Other non-current assets | $ | 10,447 | 116,333 | |||||
$ | 115,647 | $ | 221,533 | |||||
Intangible assets consist of licensing and certification rights which are amortized over a defined number of units. No impairment charges were recorded in the nine months ended June 30, 2014 and 2013. | ||||||||
Total amortization expense was approximately $0 and $7,000 for the three months ended June 30, 2014 and 2013, respectively. Total amortization expense for the nine months ended June 30, 2014 and 2013 was $0 and $36,000, respectively. The timing of future amortization expense is not determinable because the intangible assets are being amortized over a defined number of units. | ||||||||
Accrued expenses | ||||||||
Accrued expenses consist of the following: | ||||||||
June 30, | September 30, | |||||||
2014 | 2013 | |||||||
Warranty | $ | 846,060 | $ | 701,456 | ||||
Salary, benefits and payroll taxes | 517,381 | 679,325 | ||||||
Professional fees | 339,592 | 393,570 | ||||||
Income taxes payable | 146,760 | 337,993 | ||||||
EDC program costs | 1,295,155 | 560,428 | ||||||
Litigation claims | — | 656,865 | ||||||
Other | 274,198 | 343,272 | ||||||
$ | 3,419,146 | $ | 3,672,909 | |||||
Other accrued expenses consist primarily of accruals for inventory-in-transit, royalties and operating expenses as of June 30, 2014 and for payments to sub-contractors and consultants for services completed as of September 30, 2013. | ||||||||
Warranty cost and accrual information for the three and nine months ended June 30, 2014 is highlighted below: | ||||||||
Three Months Ending | Nine Months Ending | |||||||
June 30, 2014 | June 30, 2014 | |||||||
Warranty accrual, beginning of period | $ | 743,482 | $ | 701,456 | ||||
Accrued expense for the three and nine months ended June 30, 2014 | 150,915 | 307,908 | ||||||
Warranty cost for the three and nine months ended June 30, 2014 | (48,337 | ) | (163,304 | ) | ||||
Warranty accrual, end of period | $ | 846,060 | $ | 846,060 | ||||
Income_Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
3. Income Taxes | |
At the end of each interim reporting period, the Company prepares an estimate of the annual effective income tax rate, which is applied to year-to-date income to compute income tax expense exclusive of discrete items. Tax items discrete to a specific quarter are included in computing the income tax expense for that quarter. The estimated annual effective tax rate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods. The income tax expense for the three and nine months ended June 30, 2014 was $176,000 and $912,000, respectively, compared to a tax (benefit) expense of ($9,000) and $211,000, respectively, for the three and nine months ended June 30, 2013. | |
The effective tax rate for the three months ended June 30, 2014 was 26%. The effective tax rate for the three months ended June 30, 2014 differs from the statutory rate primarily because of the Federal Research and Development Tax Credit (“R&D Tax Credit”) and the Domestic Production Activities Deduction (“DPAD”). The current year estimated annual effective income tax rate reflects the benefit from the R&D Tax Credit for only the three months ended December 31, 2013 as permitted by ASC Topic 740, because the R&D Tax Credit expired as of December 31, 2013. | |
The effective tax rate for the three months ended June 30, 2013 was a benefit of 3%. The effective tax benefit rate for the three months ended June 30, 2013 differs from the statutory rate primarily because of the favorable impact of the R&D Tax Credit, and the impact of the cumulative adjustment resulting from a revised forecast of the annual effective tax rate. | |
The effective tax rate for the nine months ended June 30, 2014 was 28%. The effective tax rate differs from the statutory rate for the nine months ended June 30, 2014 primarily because of the DPAD and the R&D Tax Credit. | |
The effective tax rate for the nine months ended June 30, 2013 was 11%. The effective tax rate differs from the statutory rate for the nine months ended June 30, 2013 primarily because of the favorable impact of the extension of the R&D Tax Credit. On January 2, 2013, the American Taxpayer Relief Act of 2012 (the “Tax Relief Act”) was enacted, which reinstated retroactively and extended the R&D Tax Credit from January 1, 2012 to December 31, 2013. The 2013 fiscal year estimated annual effective income tax rate reflected a full year benefit from the R&D Tax Credit. The retroactive benefit for the previously expired period from January 1, 2012 to September 30, 2012 was reflected as a discrete item which further reduced the Company’s income tax expense for the nine months ended June 30, 2013. | |
At June 30, 2014, the balance of the deferred tax valuation allowance relates principally to NOL of certain state taxing jurisdictions. The Company will continue to maintain the balance of the valuation allowance until the Company generates a sufficient level of profitability in certain jurisdictions to warrant a conclusion that it no longer is more likely than not that these net state deferred tax assets will not be realized in future periods. There is currently no assurance of such future income before taxes. The Company believes that its estimate of future taxable income is inherently uncertain, and, therefore, further adjustments to the valuation allowance are possible. | |
Shareholders_Equity_and_Shareb
Shareholders' Equity and Share-based Payments | 9 Months Ended |
Jun. 30, 2014 | |
Shareholders' Equity and Share-based Payments | ' |
Shareholders' Equity and Share-based Payments | ' |
4. Shareholders’ Equity and Share-based Payments | |
At June 30, 2014, the Company’s Amended and Restated Articles of Incorporation provides the Company authority to issue 75,000,000 shares of common stock and 10,000,000 shares of preferred stock. | |
Share-based compensation | |
The Company accounts for share-based compensation under the provisions of ASC Topic 505-50 and ASC Topic 718 by using the fair value method for expensing stock options and non-vested stock awards. | |
Total share-based compensation expense was approximately $221,000 and $235,000 for the three months ended June 30, 2014 and 2013, respectively. The income tax effect recognized as a charge to additional paid-in capital related to share-based compensation arrangements was $1,000 and $4,000 for the three months ended June 30, 2014 and 2013, respectively. | |
Total share-based compensation expense was approximately $660,000 and $679,000 for the nine months ended June 30, 2014 and 2013, respectively. The income tax effect recognized as a charge to additional paid-in capital related to share-based compensation arrangements was $160,000 and $17,000 for the nine months ended June 30, 2014 and 2013, respectively. Compensation expense related to share-based awards is recorded as a component of general and administrative expense. | |
By unanimous consent of the Company’s Board of Directors on January 25, 2013, the applicable option exercise price of each outstanding option to purchase common stock was reduced by $1.50 per share pursuant to the terms of the 1998 Plan and the 2009 Plan (each as defined below), as applicable, to offset the dilutive impact of the special cash dividend paid by the Company on December 27, 2012 to common shareholders of record on December 17, 2012. As required by ASC Topic 718, the Company recorded an expense of $22,000 related to the vested outstanding options as a result of this one time reduction to the option exercise price in the quarter ended March 31, 2013. For non-vested options (granted under the 2009 Plan), the Company added the additional compensation cost of $59,000 to the remaining unrecognized compensation cost for the original share options and will expense the total amount ratably over the remaining vesting period of the options in accordance with the guidance of ASC Topic 718. | |
The Company maintains three share-based compensation plans, the 1998 Stock Option Plan (the “1998 Plan”), the 2003 Restricted Stock Plan (the “Restricted Plan”), and the 2009 Stock-Based Incentive Compensation Plan (the “2009 Plan”). The Company’s shareholders approved each of these plans. The 1998 Plan expired on November 13, 2008, and the Company has awarded all available shares of common stock under the Restricted Plan. | |
1998 Stock Option Plan | |
The 1998 Plan authorized the grant of incentive and nonqualified stock options to employees, officers, directors, and independent contractors and consultants. No stock options were granted to independent contractors or consultants under this Plan. There was no compensation expense associated with awards under the 1998 Plan for the three months ended June 30, 2014 and 2013, respectively. Total compensation expense associated with awards under the 1998 Plan was approximately $0 and $31,000 for the nine months ended June 30, 2014 and 2013, respectively. | |
Incentive stock options granted under the 1998 Plan have exercise prices that must be at least equal to the fair value of the common stock on the grant date. Nonqualified stock options granted under the 1998 Plan have exercise prices that may be less than, equal to, or greater than the fair value of the common stock on the date of grant. The Company reserved 3,389,000 shares of common stock for awards under the 1998 Plan. On November 13, 2008, the 1998 Plan expired, and no additional shares were granted under the Plan after that date. | |
2003 Restricted Stock Plan | |
The Restricted Plan for non-employee directors was approved by shareholders at the Company’s February 26, 2004 Annual Meeting of Shareholders. It provided for an annual award of non-vested shares of common stock having a fair market value of $40,000 at close of business on October 1 of each year for each eligible non-employee director. The shares of common stock were awarded in four quarterly installments during the fiscal year if the director was still serving on the board on the quarterly issue date. The last awards under the Restricted Plan were made in 2010, and the Company has awarded all available shares under the Restricted Plan. However, the Company has continued to make an annual grant of shares to eligible non-employee directors under the 2009 Plan. | |
There was no compensation expense under the Restricted Plan for the three and nine months ended June 30, 2014 and 2013. | |
2009 Stock-Based Incentive Compensation Plan | |
The 2009 Plan authorizes the grant of Stock Appreciation Rights (“SARs”), Restricted Stock, Options, and other equity-based awards (collectively referred to as “Awards”). Options granted under the 2009 Plan may be either “Incentive Stock Options” as defined in section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or “Nonqualified Stock Options” as determined by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”). | |
Subject to an adjustment required because of a stock dividend, recapitalization, forward split or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase or share exchange, extraordinary or unusual cash distribution, or other similar corporate transaction or event, the maximum number of shares of common stock available for Awards under the 2009 Plan is 1,200,000, all of which may be issued pursuant to Awards of Incentive Stock Options. In addition, the 2009 Plan provides that no more than 300,000 shares of common stock per year may be awarded to any employee as a performance-based Award under Section 162(m) of the Code. At June 30, 2014, there were 343,830 shares of common stock available for Awards under the 2009 Plan. | |
If any Award is forfeited, or if any Option terminates, expires, or lapses without being exercised, the shares of common stock subject to such Award will again be available for future grant. Any shares tendered by a participant in payment of the exercise price of an Option or the tax liability with respect to an Award (including, in any case, shares withheld from any such Award) will not be available for future grant under the 2009 Plan. If there is any change in the Company’s corporate capitalization, the Compensation Committee must adjust proportionately and equitably the number and kind of shares of common stock which may be issued in connection with future Awards, the number and type of shares of common stock covered by Awards then outstanding under the 2009 Plan, the number and type of shares of common stock available under the 2009 Plan, the exercise or grant price of any Award, or, if deemed appropriate, make provision for a cash payment with respect to any outstanding Award, provided that no adjustment may be made that would affect adversely the status of any Award that is intended to be a performance-based Award under Section 162(m) of the Code, unless otherwise determined by the Compensation Committee. In addition, the Compensation Committee may make adjustments in the terms and conditions of any Awards, including any performance goals, in recognition of unusual or nonrecurring events affecting the Company or any subsidiary, or in response to changes in applicable laws, regulations or accounting principles, provided that no adjustment may be made that would affect adversely the status of any Award that is intended to be a performance-based Award under Section 162(m) of the Code, unless otherwise determined by the Compensation Committee. | |
On April 17, 2014, the Board of Directors resolved to revise the annual award of non-vested shares of common stock to each eligible non-employee director, effective January 1, 2015. Each award will have a fair market value of $40,000 at the close of business on the first business day after January 1 of each calendar year and will be issued to each non-employee director serving as a director on December 31 of that year. If any non-employee director resigns from the Board of Directors prior to December 31 of such calendar year, the Company will issue to such non-employee director a pro-rata number of shares through the date of resignation. | |
Total compensation expense related to Options issued to employees under the 2009 Plan was approximately $171,000 and $185,000 for the three months ended June 30, 2014 and 2013, respectively; and $510,000 and $498,000 for the nine months ended June 30, 2014 and 2013, respectively. The expense under the 2009 Plan related to shares issued to non-employee members of the Company’s Board of Directors on a quarterly basis as compensation was $50,000 for each of the three-month periods ended June 30, 2014 and 2013, and $150,000 for each of the nine month periods ended June 30, 2014 and 2013. Total compensation expense associated with the 2009 Plan was $221,000 and $235,000 for the three months ended June 30, 2014 and 2013, respectively; and $660,000 and $648,000 for the nine months ended June 30, 2014 and 2013, respectively. | |
Stock repurchase program | |
On April 17, 2014, the Company’s Board of Directors approved the extension the current share repurchase program (originally approved on April 29, 2013), which allows the Company to acquire up to 250,000 shares of its outstanding common stock until May 1, 2015. Under the share repurchase program, the Company may purchase shares of its common stock through open market transactions, in privately negotiated block purchases, or in other private transactions (either solicited or unsolicited). The timing and amount of repurchase transactions under this program will depend on market conditions, and corporate and regulatory considerations. The program may be discontinued or suspended at any time. The Company anticipates funding for this program to come from available corporate funds, including cash on hand and future cash flow. During the three and nine months ended June 30, 2014, the Company did not make any purchases of shares of the Company’s common stock under the current share repurchase plan. During the three and nine months ended June 30, 2013 the Company purchased 0 and 175 shares of common stock, respectively, under the former stock repurchase program. The cost of the shares purchased in the nine months ended June 30, 2013 was $696 at a cost per share of $3.96. As of June 30, 2014, the number of shares that may yet be purchased under the current share repurchase program was 250,000 shares. | |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Earnings Per Share | ' | |||||||||||||
Earnings Per Share: | ' | |||||||||||||
5. Earnings Per Share | ||||||||||||||
Three months ended June 30, | Nine Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Numerator: | ||||||||||||||
Net income | $ | 497,030 | $ | 307,473 | $ | 2,289,842 | $ | 1,732,186 | ||||||
Denominator: | ||||||||||||||
Basic weighted average shares | 16,951,360 | 16,790,484 | 16,918,423 | 16,725,305 | ||||||||||
Dilutive effect of share-based awards | 226,212 | 190,801 | 223,109 | 65,213 | ||||||||||
Diluted weighted average shares | 17,177,572 | 16,981,285 | 17,141,532 | 16,790,518 | ||||||||||
Earnings per common share: | ||||||||||||||
Basic EPS | $ | 0.03 | $ | 0.02 | $ | 0.14 | $ | 0.10 | ||||||
Diluted EPS | $ | 0.03 | $ | 0.02 | $ | 0.13 | $ | 0.10 | ||||||
Earnings per share (“EPS”) is calculated pursuant to FASB ASC Topic 260, Earnings Per Share (“ASC Topic 260”). Basic EPS excludes potentially dilutive securities and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed assuming the conversion or exercise of all dilutive securities such as employee stock options. | ||||||||||||||
The number of incremental shares from the assumed exercise of stock options is calculated by using the treasury stock method. As of June 30, 2014 and 2013, there were 715,002 and 898,000 options to purchase common stock outstanding, respectively. The average outstanding diluted shares calculation excludes options with an exercise price that exceeds the average market price of shares during the period. | ||||||||||||||
For the three months ended June 30, 2014 and 2013, respectively, 57,500 and 91,720 diluted weighted average shares outstanding were excluded from the computation of diluted EPS because the effect would be anti-dilutive. | ||||||||||||||
Quarterly and full year-to-date EPS are calculated independently based on the weighted average number of shares outstanding during each quarter. As a result, the sum of each quarter’s per share amount may not equal the total per share amount for the year-to-date. | ||||||||||||||
Contingencies
Contingencies | 9 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies: | ' |
Commitments and Contingencies: | ' |
6. Contingencies | |
On January 17, 2007 the Company filed suit in the Court of Common Pleas for Delaware County, Pennsylvania against Strathman Associates, a former software consultant for IS&S, alleging that Strathman had improperly used IS&S trade secrets and proprietary information in assisting J2 and Kollsman in developing the J2/Kollsman Air Data Computer. The case has not been resolved as of the date hereof. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Summary of Significant Accounting Policies: | ' | ||||||||||
Basis of Presentation | ' | ||||||||||
Basis of Presentation | |||||||||||
The accompanying unaudited condensed consolidated financial statements are presented pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) in accordance with the disclosure requirements for the quarterly report on Form 10-Q and, therefore, do not include all of the information and footnotes required by generally accepted accounting principles in the United States (“GAAP”) for complete annual financial statements. In the opinion of Company management, the unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary to state fairly the results for the interim periods presented. The condensed consolidated balance sheet as of September 30, 2013 is derived from the audited financial statements of the Company. Operating results for the three and nine months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2014. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes of the Company included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013. | |||||||||||
The Company’s condensed consolidated financial statements include the accounts of its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |||||||||||
Use of Estimates | ' | ||||||||||
Use of Estimates | |||||||||||
Preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, as of the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Estimates are used in accounting for, among other items, long term contracts, allowance for doubtful accounts, inventory obsolescence, product warranty cost liability, income taxes, engineering and material costs on Engineering Development Contracts (“EDC”) programs, percentage-of-completion on EDC, recoverability of long-lived assets, stock-based compensation expense, and contingencies. Actual results could differ materially from those estimates. | |||||||||||
Cash and Cash Equivalents | ' | ||||||||||
Cash and Cash Equivalents | |||||||||||
Highly liquid investments, purchased with an original maturity of three months or less, are classified as cash equivalents. Cash equivalents at June 30, 2014 and September 30, 2013 consist of funds invested in money market funds with financial institutions. | |||||||||||
Property and Equipment | ' | ||||||||||
Property and Equipment | |||||||||||
Property and equipment are stated at cost. Depreciation is provided using an accelerated method over the estimated useful lives of the assets (the lesser of three to seven years or over the related lease term), except for the manufacturing facility and the corporate airplane. The building is being depreciated on a straight line basis over 39 years. Major additions and improvements are capitalized. Maintenance and repairs that do not improve or extend the life of assets are charged to expense as incurred. The airplane was depreciated on a straight-line basis over its estimated useful life of ten years; however, because the airplane had been depreciated previously to its estimated salvage value, no depreciation expense was recorded during the nine months ended June 30, 2014 or 2013. | |||||||||||
Long-Lived Assets | ' | ||||||||||
Long-Lived Assets | |||||||||||
The Company assesses the impairment of long-lived assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360-10, “Property, Plant and Equipment” (“ASC Topic 360-10”). This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. In addition, long-lived assets to be disposed of must be reported at the lower of the carrying amount or fair value less cost to sell. The Company considers historical performance and future estimated results in its evaluation of potential impairment and compares the carrying amount of the asset to estimated future cash flows expected from use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of the impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is measured by discounting expected future cash flows. No impairment charges were recorded during the nine months ended June 30, 2014 or 2013. | |||||||||||
Revenue Recognition | ' | ||||||||||
Revenue Recognition | |||||||||||
The Company enters into sales arrangements with customers that, in general, provide for the Company to design, develop, manufacture, and deliver air data equipment, engine display systems, large flat-panel display systems, and advanced monitoring systems that measure and display critical flight information, including data relative to aircraft separation, airspeed, altitude, and engine and fuel data measurements. The Company’s sales arrangements may include multiple deliverables as defined in FASB ASC Topic 605-25 “Multiple-Element Arrangements” (“ASC Topic 605-25”), which include typically design and engineering services, and the production and delivery of the flat panel display and related components. The Company includes any design and engineering services elements in EDC sales and any functional upgrade and product elements in product sales in the accompanying consolidated statement of income. | |||||||||||
To the extent that an arrangement contains software elements that are essential to the functionality of tangible products sold in the arrangement, the Company recognizes revenue for the deliverables in accordance with the guidance included in FASB Accounting Standards Update 2009-14, “Revenue Arrangements That Include Software Elements” (“ASU 2009-14”), FASB Accounting Standards Update 2009-13, “Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force” (“ASU 2009-13”), and FASB ASC Topic 605, “Revenue Recognition” (“ASC Topic 605”). | |||||||||||
To the extent that an arrangement contains software components, which may include functional upgrades, that are sold on a standalone basis and which the Company has deemed outside the scope of the exception defined by ASU 2009-14, the Company recognizes software revenue in accordance with ASC Topic 985, “Software” (“ASC Topic 985”). | |||||||||||
Multiple Element Arrangements - | |||||||||||
The Company identifies all goods and/or services that are to be delivered separately under such a sales arrangement and allocates sales to each deliverable (if more than one) based on that deliverable’s selling price. The Company considers the appropriate recognition method for each deliverable. The Company’s multiple element arrangements can include defined design and development activities, functional upgrades, and product sales. | |||||||||||
The Company utilizes the selling price hierarchy that has been established by ASU 2009-13, which requires that the selling price for each deliverable be based on vendor-specific objective evidence if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific objective evidence nor third-party evidence is available. To the extent that an arrangement includes a deliverable for which estimated selling price is used, the Company determines the best estimate of selling price by applying the same pricing policies and methodologies that would be used to determine the price to sell the deliverable on a standalone basis. | |||||||||||
To the extent that an arrangement contains defined design and EDC activities as identified deliverables and products (resulting in a multiple element arrangement), the Company recognizes as EDC sales amounts earned during the design and development phase of the contract following the guidance included in FASB ASC Topic 605-35, “Construction-Type and Production-Type Contracts” (“ASC Topic 605-35”). To the extent that multiple element arrangements include product sales, sales are generally recognized once revenue recognition criteria for the product deliverables have been met based on the provisions of ASC Topic 605. The Company includes any design and engineering services elements in EDC sales, and any functional upgrade and product elements in “product” sales on the accompanying consolidated statement of income. | |||||||||||
Single Element Arrangements — | |||||||||||
Products - | |||||||||||
To the extent that a single element arrangement provides for product sales and repairs, the Company recognizes sales when revenue recognition criteria for the product deliverables have been met based on the provisions of ASC Topic 605. In addition, the Company receives orders for equipment and parts. Generally, revenue from the sale of such products is recognized upon shipment to the customer. | |||||||||||
The Company offers its customers extended warranties for additional fees. These warranty sales are recorded as deferred revenue and recognized as sales on a straight-line basis over the warranty period. | |||||||||||
Engineering Development Contracts | |||||||||||
The Company may enter into contracts to perform specified design and EDC services related to its products. The Company recognizes revenue from these arrangements as EDC sales, following the guidance included in ASC Topic 605-35, and considers the nature of these contracts (including term, size of contract, and level of effort) when determining the appropriate accounting treatment for a particular contract. Certain of these contracts are accounted for under the percentage-of-completion method of accounting when the Company determines that progress toward completion is reasonable and reliably estimable, and the contract is long-term in nature. The Company uses the completed contract method for all others contracts. Sales and profit margins under the percentage-of-completion method are recorded based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract under the cost-to-cost method (for development effort). | |||||||||||
The percentage-of-completion method of accounting requires the Company to estimate the profit margin for each individual contract, and to apply that profit margin on a uniform basis as sales are recorded under the contract. The estimation of profit margin requires the Company to make projections of the total sales to be generated and the total costs that will be incurred under each contract. The projections require the Company to make numerous assumptions and estimates relating to items, such as the complexity of design and related development costs, performance of subcontractors, availability and cost of materials, engineering productivity and cost, overhead, and capital costs. Contracts sometimes include purchase options for additional quantities and customer change orders for additional or revised product functionality. Sales and costs related to profitable purchase options are included in the Company’s estimates only when the options are exercised, while sales and costs related to unprofitable purchase options are included in the Company’s estimates when exercise is determined to be probable. Sales related to change orders are included in profit estimates only if they can be reliably estimated and collectability is reasonably assured. Purchase options and change orders are accounted for, either as an integral part of the original contract or separately, depending upon the nature and value of the item. Anticipated losses on contracts are recognized in full in the period in which losses become probable and estimable. | |||||||||||
For contracts for which uncertainty regarding the performance against certain contract terms remains and in which no loss is expected, the Company uses the zero profit margin approach to applying the percentage of completion method following the guidance included in FASB ASC Topic 605-35. | |||||||||||
The Company reviews estimates of profit margins for contracts on a quarterly basis. If the initial estimates of sales and costs under a contract are accurate, the percentage-of-completion method results in the profit margin being recorded evenly as revenue is recognized under the contract. Changes in these underlying estimates because of revisions in sales and cost estimates or to the exercise of contract options may result in profit margins being recognized unevenly over a contract because such changes are accounted for on a cumulative basis in the period estimates are revised. Significant changes in estimates related to accounting for long-term contracts may have a material effect on the Company’s results of operations in the period in which the revised estimate is made. Cumulative catch-up adjustments resulting from changes in estimates are disclosed in the notes to the consolidated financial statements of the Company. | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | |||||||||||
Income taxes are recorded in accordance with FASB ASC Topic 740, “Income Taxes” (“ASC Topic 740”), which utilizes a balance sheet approach to provide for income taxes. Under this method, the Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company’s assets, liabilities, and expected benefits of utilizing net operating losses (“NOL”) and tax credit carry-forwards. The impact on deferred taxes of changes in tax rates and laws, if any, are applied to the years during which temporary differences are expected to be settled and are reflected in the consolidated financial statements in the period of enactment. At the end of each interim reporting period, the Company prepares an estimate of the annual effective income tax rate and applies that annual effective income tax rate to ordinary year-to-date pre-tax income for the interim period. Specific tax items discrete to a particular quarter are recorded in income tax expense for that quarter. The estimated annual effective tax rate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods. | |||||||||||
Deferred tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. Significant weight is given to evidence that can be objectively verified, and significant management judgment is required in determining any valuation allowances recorded against net deferred tax assets. The Company evaluates deferred income taxes on a quarterly basis to determine if valuation allowances are required by considering available evidence. Deferred tax assets are recognized when expected future taxable income is sufficient to allow the related tax benefits to reduce taxes that would otherwise be payable. The sources of taxable income that may be available to realize the benefit of deferred tax assets are future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and credit carry-forwards, taxable income in carry-back years, and tax planning strategies which are both prudent and feasible. The current balance of the deferred tax valuation allowance relates principally to NOL of certain state taxing jurisdictions. The Company believes that its estimate of future taxable income is inherently uncertain, and if its current or future operations generate losses, further adjustments to the valuation allowance are possible. There is currently no assurance of such future income before income taxes. | |||||||||||
The accounting for uncertainty in income taxes requires a more likely than not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company records a liability for the difference between the (i) benefit recognized and measured for financial statement purposes and (ii) the tax position taken or expected to be taken on the Company’s tax return. To the extent that the Company’s assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The Company has elected to record any interest or penalties associated with uncertain tax positions as income tax expense. | |||||||||||
The Company files a consolidated United States federal income tax return. The Company prepares and files tax returns based on the interpretation of tax laws and regulations, and records estimates based on these judgments and interpretations. In the normal course of business, the tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities, and the Company records a liability when it is probable that there will be an assessment. The Company adjusts the estimates periodically as the result of ongoing examinations by and settlements with the various taxing authorities and changes in tax laws, regulations and precedent. The consolidated tax provision of any given year includes adjustments to prior years’ income tax accruals that are considered appropriate and any related estimated interest. Management believes that adequate accruals have been made for income taxes. Differences between estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the Company’s consolidated financial position but could possibly be material to its consolidated results of operations or cash flow of any one period. | |||||||||||
Engineering Development | ' | ||||||||||
Engineering Development | |||||||||||
The Company invests a large percentage of its sales in engineering development, both research and development (“R&D”) and EDC. At June 30, 2014, approximately 38% of the Company’s employees were engaged in various engineering development projects. Total engineering development expense is comprised of both design and EDC related to specific customer contracts and R&D. EDC expense consists primarily of payroll-related expenses of employees engaged in EDC projects, engineering related product materials and equipment, and subcontracting costs. R&D charges incurred for product design, product enhancements and future product development are expensed as incurred. EDC and design charges related to specific customer arrangements are charged to cost of sales-EDC based on the method of contract accounting (either percentage-of-completion or completed-contract) applicable to such contracts. | |||||||||||
Comprehensive Income | ' | ||||||||||
Comprehensive Income | |||||||||||
Pursuant to FASB ASC Topic 220, “Comprehensive Income” (“ASC Topic 220”), the Company is required to classify items of other comprehensive income by their nature in the balance sheet and to display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of its condensed consolidated balance sheets. For the three and nine months ending June 30, 2014 and 2013, respectively, comprehensive income consisted of net income only. There were no items of other comprehensive income or accumulated other comprehensive income balances in the equity accounts for any of the periods presented. | |||||||||||
Fair Value of Financial Instruments | ' | ||||||||||
Fair Value of Financial Instruments | |||||||||||
The net carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate their fair value because of the short-term nature of these instruments. For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value as follows: | |||||||||||
Level 1 — Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. | |||||||||||
Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: | |||||||||||
· Quoted prices for similar assets or liabilities in active markets; | |||||||||||
· Quoted prices for identical or similar assets in non-active markets; | |||||||||||
· Inputs other than quoted prices that are observable for the asset or liability; and | |||||||||||
· Inputs that are derived principally from or corroborated by other observable market data. | |||||||||||
Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. | |||||||||||
The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2014 and September 30, 2013, according to the valuation techniques the Company used to determine their fair values. | |||||||||||
Fair Value Measurement on June 30, 2014 | |||||||||||
Quoted Price in | Significant Other | Significant | |||||||||
Active Markets for | Observable | Unobservable | |||||||||
Identical Assets | Inputs | Inputs | |||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||
Assets | |||||||||||
Cash and cash equivalents: | |||||||||||
Money market funds | $ | 13,392,082 | $ | — | $ | — | |||||
Fair Value Measurement on September 30, 2013 | |||||||||||
Quoted Price in | Significant Other | Significant | |||||||||
Active Markets for | Observable | Unobservable | |||||||||
Identical Assets | Inputs | Inputs | |||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||
Assets | |||||||||||
Cash and cash equivalents: | |||||||||||
Money market funds | $ | 14,396,014 | $ | — | $ | — | |||||
Stock-Based Compensation | ' | ||||||||||
Stock-Based Compensation | |||||||||||
The Company accounts for stock-based compensation under FASB ASC Topic 505-50, “Equity-Based Payments to Non-Employees” (“ASC Topic 505-50”), and FASB ASC Topic 718, “Stock Compensation” (“ASC Topic 718”), which require the Company to measure the cost of employee or non-employee director services received in exchange for an award of equity instruments based on the grant-date fair value of the award using an option pricing model. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. | |||||||||||
Warranty | ' | ||||||||||
Warranty | |||||||||||
The Company offers warranties of various lengths. At the time of shipment, the Company establishes a reserve for estimated costs of warranties based on its best estimate of the amounts necessary to settle future and existing claims using historical data on products sold as of the balance sheet date. The length of the warranty period, the product’s failure rates, and the customer’s usage affect warranty cost. If actual warranty costs differ from the Company’s estimated amounts, future results of operations could be affected adversely. Warranty cost is recorded as cost of sales, and the reserve balance is recorded as an accrued expense. Although the Company maintains product quality programs and processes, its warranty obligations are affected by product failure rates and the related corrective costs. If actual product failure rates and/or corrective costs differ from the estimates, the Company revises the estimated warranty liability accordingly. | |||||||||||
Concentrations | ' | ||||||||||
Concentrations | |||||||||||
Major Customers and Products | |||||||||||
For the three months ended June 30, 2014, three customers, Eclipse Aerospace, Inc. (“Eclipse”), FedEx Corp. (“FedEx”), and Pilatus Aircraft Limited (“Pilatus”), accounted for 22%, 17% and 13% of net sales, respectively. During the nine months ended June 30, 2014, four customers, Pilatus, Eclipse, FedEx, and the DoD, accounted for 15%, 14%, 13% and 11% of net sales, respectively. | |||||||||||
For the three months ended June 30, 2013, three customers, Eclipse, L-3 Communications Corporation, and FedEx accounted for 29%, 10%, and 10% of net sales, respectively. During the nine months ended June 30, 2013, two customers, Eclipse and American Airlines, Inc. (“American”), accounted for 27%, and 14% of net sales, respectively. | |||||||||||
Major Suppliers | |||||||||||
The Company buys several components from sole source suppliers. Although there are a limited number of manufacturers of particular components, the Company believes other suppliers could provide similar components on comparable terms. | |||||||||||
For the three months ended June 30, 2014 the Company had one supplier that was individually responsible for greater than 10% of the Company’s total inventory related purchases. For the nine months ended June 30, 2014 the Company had two suppliers that were individually responsible for greater than 10% of the Company’s total inventory related purchases. | |||||||||||
For the three months ended June 30, 2013, the Company had three suppliers that were individually responsible for greater than 10% of the Company’s total inventory purchases. For the nine months ended June 30, 2013 the Company had one supplier that was individually responsible for greater than 10% of the Company’s total inventory purchases. | |||||||||||
Concentration of Credit Risk | |||||||||||
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash balances and accounts receivable. The Company invests its excess cash where preservation of principal is the primary consideration. Cash balances are maintained with two major banks. Balances on deposit with certain money market accounts and operating accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) limits. The Company’s customer base consists principally of companies within the aviation industry. The Company requests advance payments and/or letters of credit from customers that it considers to be credit risks. | |||||||||||
The Company has no allowance for doubtful accounts as of June 30, 2014 and September 30, 2013 as a result of a favorable history of collections and an ongoing assessment of customer accounts. | |||||||||||
Recent Accounting Pronouncements | ' | ||||||||||
Recent Accounting Pronouncements | |||||||||||
In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 provides that a liability related to an unrecognized tax benefit should be offset against a deferred tax asset for a NOL carryforward, a similar tax loss or a tax credit carryforward if such liability is to be settled by reducing an available tax carryforward in the event the uncertain tax position is disallowed. ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013 for public entities, with early adoption permitted. The adoption of ASU 2013-11 did not have a material impact on the Company’s consolidated financial statements as of June 30, 2014. | |||||||||||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires an entity to disclose sufficient qualitative and quantitative information surrounding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance is effective for the Company in fiscal year 2018, and could significantly impact the reporting of the Company’s financial position, results of operations or cash flows upon implementation. Early adoption is not permitted. This ASU supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition” and permits the use of either a full retrospective method or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. Given the significance of this change, the Company is currently in the process of reviewing the new standard and its potential impact on the Company’s future financial reporting and disclosures. | |||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Summary of Significant Accounting Policies: | ' | ||||||||||
Schedule of financial assets and liabilities accounted for at fair value on a recurring basis | ' | ||||||||||
Fair Value Measurement on June 30, 2014 | |||||||||||
Quoted Price in | Significant Other | Significant | |||||||||
Active Markets for | Observable | Unobservable | |||||||||
Identical Assets | Inputs | Inputs | |||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||
Assets | |||||||||||
Cash and cash equivalents: | |||||||||||
Money market funds | $ | 13,392,082 | $ | — | $ | — | |||||
Fair Value Measurement on September 30, 2013 | |||||||||||
Quoted Price in | Significant Other | Significant | |||||||||
Active Markets for | Observable | Unobservable | |||||||||
Identical Assets | Inputs | Inputs | |||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||
Assets | |||||||||||
Cash and cash equivalents: | |||||||||||
Money market funds | $ | 14,396,014 | $ | — | $ | — | |||||
Supplemental_Balance_Sheet_Dis1
Supplemental Balance Sheet Disclosures (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Supplemental Balance Sheet Disclosures | ' | |||||||
Schedule of inventories | ' | |||||||
June 30, | September 30, | |||||||
2014 | 2013 | |||||||
Raw materials | $ | 4,609,075 | $ | 3,126,592 | ||||
Work-in-process | 1,111,548 | 857,602 | ||||||
Finished goods | 152,264 | 393,319 | ||||||
$ | 5,872,887 | $ | 4,377,513 | |||||
Schedule of prepaid expenses and other current assets | ' | |||||||
June 30, | September 30, | |||||||
2014 | 2013 | |||||||
Prepaid insurance | $ | 394,398 | $ | 350,913 | ||||
Other | 324,632 | 291,297 | ||||||
$ | 719,030 | $ | 642,210 | |||||
Schedule of property and equipment, net | ' | |||||||
June 30, | September 30, | |||||||
2014 | 2013 | |||||||
Land | $ | 1,021,245 | $ | 1,021,245 | ||||
Computer equipment | 2,254,829 | 2,173,266 | ||||||
Corporate airplane | 3,128,504 | 3,128,504 | ||||||
Furniture and office equipment | 1,063,254 | 1,062,296 | ||||||
Manufacturing facility | 5,719,805 | 5,631,001 | ||||||
Equipment | 5,024,272 | 4,678,678 | ||||||
18,211,909 | 17,694,990 | |||||||
Less: Accumulated depreciation and amortization | (10,681,419 | ) | (10,374,495 | ) | ||||
$ | 7,530,490 | $ | 7,320,495 | |||||
Schedule of other assets | ' | |||||||
June 30, | September 30, | |||||||
2014 | 2013 | |||||||
Intangible assets, net of accumulated amortization of $495,037 at June 30, 2014 and September 30, 2013 | $ | 105,200 | $ | 105,200 | ||||
Other non-current assets | $ | 10,447 | 116,333 | |||||
$ | 115,647 | $ | 221,533 | |||||
Schedule of accrued expenses | ' | |||||||
June 30, | September 30, | |||||||
2014 | 2013 | |||||||
Warranty | $ | 846,060 | $ | 701,456 | ||||
Salary, benefits and payroll taxes | 517,381 | 679,325 | ||||||
Professional fees | 339,592 | 393,570 | ||||||
Income taxes payable | 146,760 | 337,993 | ||||||
EDC program costs | 1,295,155 | 560,428 | ||||||
Litigation claims | — | 656,865 | ||||||
Other | 274,198 | 343,272 | ||||||
$ | 3,419,146 | $ | 3,672,909 | |||||
Schedule of warranty cost and accrual information | ' | |||||||
Three Months Ending | Nine Months Ending | |||||||
June 30, 2014 | June 30, 2014 | |||||||
Warranty accrual, beginning of period | $ | 743,482 | $ | 701,456 | ||||
Accrued expense for the three and nine months ended June 30, 2014 | 150,915 | 307,908 | ||||||
Warranty cost for the three and nine months ended June 30, 2014 | (48,337 | ) | (163,304 | ) | ||||
Warranty accrual, end of period | $ | 846,060 | $ | 846,060 | ||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Earnings Per Share | ' | |||||||||||||
Schedule of earnings per share | ' | |||||||||||||
Three months ended June 30, | Nine Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Numerator: | ||||||||||||||
Net income | $ | 497,030 | $ | 307,473 | $ | 2,289,842 | $ | 1,732,186 | ||||||
Denominator: | ||||||||||||||
Basic weighted average shares | 16,951,360 | 16,790,484 | 16,918,423 | 16,725,305 | ||||||||||
Dilutive effect of share-based awards | 226,212 | 190,801 | 223,109 | 65,213 | ||||||||||
Diluted weighted average shares | 17,177,572 | 16,981,285 | 17,141,532 | 16,790,518 | ||||||||||
Earnings per common share: | ||||||||||||||
Basic EPS | $ | 0.03 | $ | 0.02 | $ | 0.14 | $ | 0.10 | ||||||
Diluted EPS | $ | 0.03 | $ | 0.02 | $ | 0.13 | $ | 0.10 | ||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies 10-Q (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
item | ||||
segment | ||||
Summary of Significant Accounting Policies: | ' | ' | ' | ' |
Number of business segments in which the entity operates | ' | ' | 1 | ' |
Property and Equipment | ' | ' | ' | ' |
Depreciation | $140,000 | $113,000 | $414,000 | $330,000 |
Long-Lived Assets | ' | ' | ' | ' |
Impairment charges | ' | ' | 0 | 0 |
Revenue Recognition | ' | ' | ' | ' |
Minimum number of deliverable for allocating revenue to each deliverable | ' | ' | 1 | ' |
Engineering Development | ' | ' | ' | ' |
Percentage of employees who were engineers engaged in various engineering development projects | ' | ' | 38.00% | ' |
Property Plant And Equipment Other Than Air Transportation Equipment And Manufacturing Facility [Member] | Minimum [Member] | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' |
Estimated useful lives | ' | ' | '3 years | ' |
Property Plant And Equipment Other Than Air Transportation Equipment And Manufacturing Facility [Member] | Maximum [Member] | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' |
Estimated useful lives | ' | ' | '7 years | ' |
Manufacturing Facility [Member] | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' |
Estimated useful lives | ' | ' | '39 years | ' |
Air Transportation Equipment [Member] | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' |
Estimated useful lives | ' | ' | '10 years | ' |
Depreciation | ' | ' | $0 | $0 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies 10-Q (Detail 2) (Fair Value Measurements Recurring [Member], Fair Value Inputs Level1 [Member], Money Market Funds [Member], USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
Fair Value Measurements Recurring [Member] | Fair Value Inputs Level1 [Member] | Money Market Funds [Member] | ' | ' |
Assets | ' | ' |
Cash and cash equivalents | $13,392,082 | $14,396,014 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
item | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Revenues Net [Member] | Inventory [Member] | Inventory [Member] | Inventory [Member] | Inventory [Member] | ||
Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Supplier Concentration Risk [Member] | Supplier Concentration Risk [Member] | Supplier Concentration Risk [Member] | Supplier Concentration Risk [Member] | |||
item | item | item | item | Eclipse Aerospace Inc [Member] | Eclipse Aerospace Inc [Member] | Eclipse Aerospace Inc [Member] | Eclipse Aerospace Inc [Member] | Fed Ex Corporation [Member] | Fed Ex Corporation [Member] | Fed Ex Corporation [Member] | Pilatus Aircraft Limited [Member] | Pilatus Aircraft Limited [Member] | U S Department Of Defense [Member] | L3 [Member] | American Airlines Inc [Member] | item | item | item | item | |||
Concentrations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of major customers | ' | ' | 3 | 3 | 4 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentrations risk (as a percent) | ' | ' | ' | ' | ' | ' | 22.00% | 29.00% | 14.00% | 27.00% | 17.00% | 10.00% | 13.00% | 13.00% | 15.00% | 11.00% | 10.00% | 14.00% | ' | ' | ' | ' |
Number of major suppliers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 3 | 2 | 1 |
Concentration of Credit Risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of banks for maintenance of cash balances | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reserves for doubtful accounts | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Supplemental_Balance_Sheet_Dis2
Supplemental Balance Sheet Disclosures (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 | |
Supplemental Balance Sheet Disclosures | ' | ' | ' | ' | ' |
Unbilled receivables, net of customer payments | $11,340,583 | ' | $11,340,583 | ' | $6,539,442 |
Inventories | ' | ' | ' | ' | ' |
Raw materials | 4,609,075 | ' | 4,609,075 | ' | 3,126,592 |
Work-in-process | 1,111,548 | ' | 1,111,548 | ' | 857,602 |
Finished goods | 152,264 | ' | 152,264 | ' | 393,319 |
Inventory | 5,872,887 | ' | 5,872,887 | ' | 4,377,513 |
Prepaid expenses and other current assets | ' | ' | ' | ' | ' |
Prepaid insurance | 394,398 | ' | 394,398 | ' | 350,913 |
Other | 324,632 | ' | 324,632 | ' | 291,297 |
Total | 719,030 | ' | 719,030 | ' | 642,210 |
Unbilled receivables | ' | ' | ' | ' | ' |
Change in operating income resulting from revised estimates | -659,901 | -285,500 | -3,158,163 | -1,880,925 | ' |
Contracts Accounted For Under Percentage Of Completion [Member] | ' | ' | ' | ' | ' |
Unbilled receivables | ' | ' | ' | ' | ' |
Change in operating income resulting from revised estimates | $559,000 | $161,000 | $1,172,000 | $364,000 | ' |
Supplemental_Balance_Sheet_Dis3
Supplemental Balance Sheet Disclosures (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 | |
Property and equipment | ' | ' | ' | ' | ' |
Total | $18,211,909 | ' | $18,211,909 | ' | $17,694,990 |
Less: Accumulated depreciation and amortization | -10,681,419 | ' | -10,681,419 | ' | -10,374,495 |
Property and equipment, net | 7,530,490 | ' | 7,530,490 | ' | 7,320,495 |
Depreciation | 140,000 | 113,000 | 414,000 | 330,000 | ' |
Other assets: | ' | ' | ' | ' | ' |
Intangible assets, net of accumulated amortization of $495,037 at June 30, 2014 and September 30, 2013 | 105,200 | ' | 105,200 | ' | 105,200 |
Other non-current assets | 10,447 | ' | 10,447 | ' | 116,333 |
Total other assets | 115,647 | ' | 115,647 | ' | 221,533 |
Accumulated amortization of intangible assets | 495,037 | ' | 495,037 | ' | 495,037 |
Impairment charges | ' | ' | 0 | 0 | ' |
Total amortization expense | 0 | 7,000 | 0 | 36,000 | ' |
Land [Member] | ' | ' | ' | ' | ' |
Property and equipment | ' | ' | ' | ' | ' |
Total | 1,021,245 | ' | 1,021,245 | ' | 1,021,245 |
Computer Equipment [Member] | ' | ' | ' | ' | ' |
Property and equipment | ' | ' | ' | ' | ' |
Total | 2,254,829 | ' | 2,254,829 | ' | 2,173,266 |
Air Transportation Equipment [Member] | ' | ' | ' | ' | ' |
Property and equipment | ' | ' | ' | ' | ' |
Total | 3,128,504 | ' | 3,128,504 | ' | 3,128,504 |
Depreciation | ' | ' | 0 | 0 | ' |
Furniture And Fixtures [Member] | ' | ' | ' | ' | ' |
Property and equipment | ' | ' | ' | ' | ' |
Total | 1,063,254 | ' | 1,063,254 | ' | 1,062,296 |
Manufacturing Facility [Member] | ' | ' | ' | ' | ' |
Property and equipment | ' | ' | ' | ' | ' |
Total | 5,719,805 | ' | 5,719,805 | ' | 5,631,001 |
Equipment [Member] | ' | ' | ' | ' | ' |
Property and equipment | ' | ' | ' | ' | ' |
Total | $5,024,272 | ' | $5,024,272 | ' | $4,678,678 |
Supplemental_Balance_Sheet_Dis4
Supplemental Balance Sheet Disclosures (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2013 | |
Accrued expenses | ' | ' | ' |
Warranty | $846,060 | $846,060 | ' |
Salary, benefits and payroll taxes | 517,381 | 517,381 | 679,325 |
Professional fees | 339,592 | 339,592 | 393,570 |
Income taxes payable | 146,760 | 146,760 | 337,993 |
EDC program costs | 1,295,155 | 1,295,155 | 560,428 |
Litigation claims | ' | ' | 656,865 |
Other | 274,198 | 274,198 | 343,272 |
Total | 3,419,146 | 3,419,146 | 3,672,909 |
Warranty cost and accrual information | ' | ' | ' |
Warranty Accrual, beginning of period | 743,482 | 701,456 | ' |
Accrued expense for the three and nine months ended June 30,2014 | 150,915 | 307,908 | ' |
Warranty cost for the three and nine months ended June 30, 2014 | -48,337 | -163,304 | ' |
Warranty Accrual, end of period | $846,060 | $846,060 | ' |
Income_Taxes_10Q_Details
Income Taxes 10-Q (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Components of income taxes | ' | ' | ' | ' |
Income tax expense (benefit) | $176,090 | ($8,520) | $911,874 | $210,751 |
Reconciliation of the statutory federal rate to the Company's effective income tax rate | ' | ' | ' | ' |
Effective tax rates (as a percent) | 26.00% | -3.00% | 28.00% | 11.00% |
Shareholders_Equity_and_Shareb1
Shareholders' Equity and Share-based Payments (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Apr. 17, 2014 | Sep. 30, 2013 | Jan. 25, 2013 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Apr. 17, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | |
item | Employee And Non Employee Stock Options [Member] | Employee And Non Employee Stock Options [Member] | Stock Option Plan1998 [Member] | Stock Option Plan1998 [Member] | Stock Option Plan1998 [Member] | Stock Option Plan1998 [Member] | Restricted Stock Plan2003 [Member] | Restricted Stock Plan2003 [Member] | Restricted Stock Plan2003 [Member] | Restricted Stock Plan2003 [Member] | Restricted Stock Plan2003 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | Stock Based Incentive Compensation Plan2009 [Member] | ||||||
item | Non Employee Director [Member] | Non Employee Director [Member] | Non Employee Director [Member] | Non Employee Director [Member] | Non Employee Director [Member] | Non Employee Director [Member] | Employee [Member] | Employee [Member] | Employee [Member] | Employee [Member] | Performance Shares [Member] | ||||||||||||||||||||
Employee [Member] | |||||||||||||||||||||||||||||||
Shareholders' Equity and Share-based Payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | 75,000,000 | ' | 75,000,000 | ' | ' | 75,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, shares authorized | 10,000,000 | ' | 10,000,000 | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation expense | $221,000 | $235,000 | $660,000 | $679,000 | ' | ' | ' | $22,000 | $0 | $0 | $0 | $31,000 | $0 | $0 | $0 | $0 | ' | $221,000 | $235,000 | $660,000 | $648,000 | $50,000 | $50,000 | $150,000 | $150,000 | ' | $171,000 | $185,000 | $510,000 | $498,000 | ' |
Unrecognized compensation cost, related to non-vested stock options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 59,000 | ' | 59,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax effect recognized as a charge to additional paid-in capital related to share-based compensation | 1,000 | 4,000 | 160,000 | 17,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reduction in applicable option exercise price of each outstanding option (in dollars per share) | ' | ' | ' | ' | ' | ' | $1.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of share-based compensation plans maintained by the company | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock available for awards under the plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 343,830 | ' | 343,830 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock reserved for awards | ' | ' | ' | ' | ' | ' | ' | ' | 3,389,000 | ' | 3,389,000 | ' | ' | ' | ' | ' | ' | 1,200,000 | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair market value of annual award of non-vested shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,000 | ' | ' | ' | ' | ' | ' | ' | ' | 40,000 | ' | ' | ' | ' | ' |
Number of quarterly installments of shares awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum award (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 |
Stock repurchase program | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum number of shares of outstanding common stock approved to acquire under repurchase program | ' | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock yet to be purchased under the repurchase program | 250,000 | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock purchased under the repurchase program | ' | 0 | ' | 175 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of common stock purchased under the repurchase program | ' | ' | ' | $696 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average market price of common stock purchased under the repurchase program (in dollars per share) | ' | ' | ' | $3.96 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Numerator: | ' | ' | ' | ' |
Net income | $497,030 | $307,473 | $2,289,842 | $1,732,186 |
Denominator: | ' | ' | ' | ' |
Basic weighted average shares | 16,951,360 | 16,790,484 | 16,918,423 | 16,725,305 |
Dilutive effect of share-based awards (in shares) | 226,212 | 190,801 | 223,109 | 65,213 |
Diluted weighted average shares | 17,177,572 | 16,981,285 | 17,141,532 | 16,790,518 |
Earnings per common share: | ' | ' | ' | ' |
Basic EPS (in dollars per share) | $0.03 | $0.02 | $0.14 | $0.10 |
Diluted EPS (in dollars per share) | $0.03 | $0.02 | $0.13 | $0.10 |
Options to purchase common stock outstanding (in shares) | 715,002 | 898,000 | 715,002 | 898,000 |
Weighted dilutive shares outstanding excluded from the computation of diluted earnings per share | 57,500 | 91,720 | ' | ' |