Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Nov. 30, 2014 | Mar. 31, 2014 | |
Entity Registrant Name | 'ADDVANTAGE TECHNOLOGIES GROUP INC | ' | ' |
Entity Central Index Key | '0000874292 | ' | ' |
Current Fiscal Year End Date | '--09-30 | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Common Stock, Shares Outstanding (in shares) | ' | 10,041,206 | ' |
Entity Public Float | ' | ' | $17,110,819 |
Document Type | '10-K | ' | ' |
Document Period End Date | 30-Sep-14 | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Amendment Flag | 'false | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $5,286,097 | $8,476,725 |
Accounts receivable, net of allowance for doubtful accounts of $200,000 and $300,000, respectively | 6,393,580 | 2,390,979 |
Income tax refund receivable | 220,104 | 258,790 |
Inventories, net of allowance for excess and obsolete inventory of $2,156,628 and $1,600,000, respectively | 22,780,523 | 18,011,706 |
Prepaid expenses | 174,873 | 106,509 |
Deferred income taxes | 1,416,000 | 1,066,000 |
Current assets of discontinued operations held for sale | ' | 3,267,917 |
Total current assets | 36,271,177 | 33,578,626 |
Land and buildings | 7,208,679 | 7,208,679 |
Machinery and equipment | 3,244,153 | 2,991,412 |
Leasehold improvements | 206,393 | 9,633 |
Total property and equipment, at cost | 10,659,225 | 10,209,724 |
Less accumulated depreciation | -4,191,516 | -3,831,238 |
Net property and equipment | 6,467,709 | 6,378,486 |
Intangibles, net of accumulated amortization | 6,625,278 | ' |
Goodwill | 3,910,089 | 1,150,060 |
Other assets | 131,428 | 11,428 |
Assets of discontinued operations held for sale | ' | 1,997,520 |
Total assets | 53,405,681 | 43,116,120 |
Current liabilities: | ' | ' |
Accounts payable | 2,880,761 | 1,138,494 |
Accrued expenses | 1,809,878 | 878,474 |
Notes payable – current portion | 845,845 | 184,008 |
Other current liabilities | 983,269 | ' |
Current liabilities of discontinued operations held for sale | ' | 226,757 |
Total current liabilities | 6,519,753 | 2,427,733 |
Notes payable, less current portion | 5,240,066 | 1,318,604 |
Deferred income taxes | 267,000 | 193,000 |
Other liabilities | 1,942,889 | ' |
Shareholders’ equity: | ' | ' |
Common stock, $.01 par value; 30,000,000 shares authorized; 10,541,864 and 10,499,138 shares issued, respectively; 10,041,206 and 9,998,480 shares outstanding, respectively | 105,419 | 104,991 |
Paid in capital | -5,312,881 | -5,578,500 |
Retained earnings | 45,643,449 | 45,650,306 |
Total shareholders’ equity before treasury stock | 40,435,987 | 40,176,797 |
Less: Treasury stock, 500,658 shares, at cost | -1,000,014 | -1,000,014 |
Total shareholders’ equity | 39,435,973 | 39,176,783 |
Total liabilities and shareholders’ equity | $53,405,681 | $43,116,120 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Accounts receivable, allowance | $200,000 | $300,000 |
Allowance for excess and obsolete inventory | $2,156,628 | $1,600,000 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 10,541,864 | 10,499,138 |
Common stock, shares outstanding (in shares) | 10,041,206 | 9,998,480 |
Treasury stock, shares (in shares) | 500,658 | 500,658 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Sales | $35,888,692 | $28,677,351 | $29,677,178 |
Cost of sales | 24,283,236 | 19,968,034 | 21,119,250 |
Gross profit | 11,605,456 | 8,709,317 | 8,557,928 |
Operating, selling, general and administrative expenses | 10,508,357 | 5,813,063 | 5,938,794 |
Income from operations | 1,097,099 | 2,896,254 | 2,619,134 |
Interest expense | 217,910 | 25,980 | 1,113,854 |
Income before income taxes | 879,189 | 2,870,274 | 1,505,280 |
Provision for income taxes | 220,000 | 1,098,351 | 566,000 |
Income from continuing operations | 659,189 | 1,771,923 | 939,280 |
Discontinued operations: | ' | ' | ' |
Income (loss) from discontinued operations, net of tax | -36,211 | -102,207 | 311,212 |
Loss on sale of discontinued operations, net of tax | -629,835 | ' | ' |
Discontinued operations, net of tax | -666,046 | -102,207 | 311,212 |
Net income (loss) attributable to common shareholders | -6,857 | 1,669,716 | 1,250,492 |
Unrealized gain on interest rate swap, net of $0, $0 and $370,000 tax provision, respectively | ' | ' | 587,258 |
Comprehensive income (loss) | ($6,857) | $1,669,716 | $1,837,750 |
Basic | ' | ' | ' |
Continuing operations (in dollars per share) | $0.07 | $0.18 | $0.09 |
Discontinued operations (in dollars per share) | ($0.07) | ($0.01) | $0.03 |
Net income (loss) (in dollars per share) | $0 | $0.17 | $0.12 |
Diluted | ' | ' | ' |
Continuing operations (in dollars per share) | $0.07 | $0.18 | $0.09 |
Discontinued operations (in dollars per share) | ($0.07) | ($0.01) | $0.03 |
Net income (loss) (in dollars per share) | $0 | $0.17 | $0.12 |
Shares used in per share calculation: | ' | ' | ' |
Basic (in shares) | 10,021,431 | 10,052,359 | 10,196,241 |
Diluted (in shares) | 10,049,440 | 10,052,359 | 10,197,496 |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations and Comprehensive Income (Loss) (Parentheticals) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Unrealized loss on interest rate swap, tax benefit | $0 | $0 | $370,000 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes In Shareholders' Equity (USD $) | Total | Accumulated Other Comprehensive Income (Loss) [Member] | Additional Paid-in Capital [Member] | Common Stock [Member] | Retained Earnings [Member] | Treasury Stock [Member] |
Balance, September 30, 2011 at Sep. 30, 2011 | $35,956,354 | ($587,258) | ($5,884,521) | $104,314 | $42,730,098 | ($406,279) |
Balance, September 30, 2011 (in shares) at Sep. 30, 2011 | ' | ' | ' | 10,431,354 | ' | ' |
Net income (loss) | 1,250,492 | ' | ' | ' | 1,250,492 | ' |
Restricted stock issuance (in shares) | ' | ' | ' | 31,969 | ' | ' |
Restricted stock issuance | 70,000 | ' | 69,680 | 320 | ' | ' |
Stock options exercised (in shares) | ' | ' | ' | 2,000 | ' | ' |
Stock options exercised | 1,620 | ' | 1,600 | 20 | ' | ' |
Net unrealized gain on interest swap | 587,258 | 587,258 | ' | ' | ' | ' |
Share based compensation expense | 64,738 | ' | 64,738 | ' | ' | ' |
Purchase of common stock | -113,821 | ' | ' | ' | ' | -113,821 |
Net income (loss) | 1,250,492 | ' | ' | ' | 1,250,492 | ' |
Restricted stock issuance | 70,000 | ' | 69,680 | 320 | ' | ' |
Stock options exercised | 1,620 | ' | 1,600 | 20 | ' | ' |
Purchase of common stock | -113,821 | ' | ' | ' | ' | -113,821 |
Balance, September 30, 2012 at Sep. 30, 2012 | 37,816,640 | ' | -5,748,503 | 104,653 | 43,980,590 | -520,100 |
Balance, September 30, 2012 (in shares) at Sep. 30, 2012 | ' | ' | ' | 10,465,323 | ' | ' |
Net income (loss) | 1,669,716 | ' | ' | ' | 1,669,716 | ' |
Restricted stock issuance (in shares) | ' | ' | ' | 31,815 | ' | ' |
Restricted stock issuance | 70,000 | ' | 69,682 | 318 | ' | ' |
Stock options exercised (in shares) | ' | ' | ' | 2,000 | ' | ' |
Stock options exercised | 3,300 | ' | 3,280 | 20 | ' | ' |
Share based compensation expense | 97,041 | ' | 97,041 | ' | ' | ' |
Purchase of common stock | -479,914 | ' | ' | ' | ' | -479,914 |
Net income (loss) | 1,669,716 | ' | ' | ' | 1,669,716 | ' |
Restricted stock issuance | 70,000 | ' | 69,682 | 318 | ' | ' |
Stock options exercised | 3,300 | ' | 3,280 | 20 | ' | ' |
Purchase of common stock | -479,914 | ' | ' | ' | ' | -479,914 |
Balance, September 30, 2012 at Sep. 30, 2013 | 39,176,783 | ' | -5,578,500 | 104,991 | 45,650,306 | -1,000,014 |
Balance, September 30, 2012 (in shares) at Sep. 30, 2013 | ' | ' | ' | 10,499,138 | ' | ' |
Net income (loss) | -6,857 | ' | ' | ' | -6,857 | ' |
Restricted stock issuance (in shares) | ' | ' | ' | 42,726 | ' | ' |
Restricted stock issuance | 136,000 | ' | 135,572 | 428 | ' | ' |
Share based compensation expense | 130,047 | ' | 130,047 | ' | ' | ' |
Net income (loss) | -6,857 | ' | ' | ' | -6,857 | ' |
Restricted stock issuance | 136,000 | ' | 135,572 | 428 | ' | ' |
Balance, September 30, 2012 at Sep. 30, 2014 | $39,435,973 | ' | ($5,312,881) | $105,419 | $45,643,449 | ($1,000,014) |
Balance, September 30, 2012 (in shares) at Sep. 30, 2014 | ' | ' | ' | 10,541,864 | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Operating Activities | ' | ' | ' |
Net income (loss) | ($6,857) | $1,669,716 | $1,250,492 |
Discontinued operations, net of tax | -666,046 | -102,207 | 311,212 |
Income from continuing operations | 659,189 | 1,771,923 | 939,280 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' | ' |
Depreciation | 360,279 | 276,356 | 300,961 |
Amortization | 481,722 | ' | ' |
Inventory Write-down | 601,351 | 600,000 | 580,587 |
(Gain) loss on disposal of property and equipment | ' | -5,950 | 114,071 |
Deferred income tax provision (benefit) | -276,000 | -15,000 | 234,000 |
Share based compensation expense | 212,436 | 167,041 | 201,404 |
Cash provided (used) by changes in operating assets and liabilities: | ' | ' | ' |
Accounts receivable | -2,351,459 | 195,733 | 1,199,368 |
Income tax refund receivable | 38,686 | 137,547 | -46,592 |
Inventories | -2,188,205 | 1,066,800 | 3,280,568 |
Prepaid expenses | -14,753 | 2,045 | -76,300 |
Other assets | ' | 2,350 | 123 |
Accounts payable | -78,670 | 8,844 | -815,732 |
Accrued expenses | 838,479 | -84,847 | -218,649 |
Net cash provided by (used in) operating activities - continuing operations | -1,716,945 | 4,122,842 | 5,693,089 |
Net cash provided by (used in) operating activities - discontinued operations | 280,462 | -16,365 | -709,949 |
Net cash provided by (used in) operating activities | -1,436,483 | 4,106,477 | 4,983,140 |
Investing Activities | ' | ' | ' |
Acquisition of net operating assets, net of cash acquired | -9,630,647 | ' | ' |
Purchases of property and equipment | -43,977 | -211,223 | -10,069 |
Proceeds from disposal of property and equipment | ' | 12,350 | ' |
Net cash used in investing activities – continuing operations | -9,674,624 | -198,873 | -10,069 |
Net cash provided by (used in) investing activities - discontinued operations | 3,413,001 | ' | -197,858 |
Net cash used in investing activities | -6,261,623 | -198,873 | -207,927 |
Financing Activities | ' | ' | ' |
Proceeds on notes payable | 5,000,000 | ' | ' |
Payments on notes payable | -492,522 | -184,008 | -10,371,508 |
Purchase of treasury stock | ' | -479,914 | -113,821 |
Proceeds from stock options exercised | ' | 3,300 | 1,620 |
Net cash provided by (used in) financing activities | 4,507,478 | -660,622 | -10,483,709 |
Net increase (decrease) in cash and cash equivalents | -3,190,628 | 3,246,982 | -5,708,496 |
Cash and cash equivalents at beginning of year | 8,476,725 | 5,229,743 | 10,938,239 |
Cash and cash equivalents at end of year | 5,286,097 | 8,476,725 | 5,229,743 |
Supplemental cash flow information: | ' | ' | ' |
Cash paid for interest | 126,659 | 26,137 | 1,164,522 |
Cash paid for income taxes | 62,000 | 971,000 | 622,210 |
Supplemental noncash investing activities: | ' | ' | ' |
Deferred guaranteed payments (a) | ($2,744,338) | ' | ' |
Note_1_Summary_of_Significant_
Note 1 - Summary of Significant Accounting Policies | 12 Months Ended | ||
Sep. 30, 2014 | |||
Notes to Financial Statements | ' | ||
Significant Accounting Policies [Text Block] | ' | ||
Note 1 – | |||
Summary of Significant Accounting Policies | |||
Organization | |||
and | |||
basis of presentation | |||
The consolidated financial statements include the accounts of ADDvantage Technologies Group, Inc. and its subsidiaries, all of which are wholly owned (collectively, the “Company”). Intercompany balances and transactions have been eliminated in consolidation. The Company’s reportable segments are Cable Television (“Cable TV”) and Telecommunications (“Telco”). | |||
Cash and cash equivalents | |||
Cash and cash equivalents includes demand and time deposits, money market funds and other marketable securities with maturities of three months or less when acquired. | |||
Accounts receivable | |||
Trade receivables are carried at original invoice amount less an estimate made for doubtful accounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. Trade receivables are written off against the allowance when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. The Company generally does not charge interest on past due accounts. | |||
Inventories | |||
Inventories consist of new and used electronic components for the Cable Television segment and used telecommunications networking equipment for the Telco segment. Inventory is stated at the lower of cost or market with market defined principally as net realizable value. Cost is determined using the weighted-average method. For the Cable Television segment, the Company records an inventory reserve provision to reflect inventory at its estimated realizable value based on a review of inventory quantities on hand, historical sales volumes and technology changes. These reserves are to provide for items that are potentially slow-moving, excess or obsolete. For the Telco segment, the Company does not maintain an inventory reserve as this segment will recycle any surplus and obsolete equipment on hand through its recycling program when it is identified. | |||
Property and equipment | |||
Property and equipment consists of software, office equipment, warehouse and service equipment and buildings with estimated useful lives generally of 3 years, 5 years, 10 years and 40 years, respectively. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the remainder of the lease agreement. Gains or losses from the ordinary sale or retirement of property and equipment are recorded in other income (expense). Repairs and maintenance costs are generally expensed as incurred, whereas major improvements are capitalized. Depreciation expense was $0.4 million, $0.3 million and $0.3 million for the years ended September 30, 2014, 2013 and 2012, respectively. | |||
Goodwill | |||
Goodwill represents the excess of the purchase price of acquisitions over the acquisition date fair value of the net identifiable tangible and intangible assets acquired. In accordance with current accounting guidance, goodwill is not amortized and is tested at least annually for impairment at the reporting unit level. The Company performs this annual analysis in the fourth quarter of each fiscal year and in any other period in which indicators of impairment warrant additional analysis. | |||
The goodwill analysis is a two-step process. Goodwill is first evaluated for impairment by comparing management’s estimate of the fair value of the reporting unit with the reporting unit’s carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, a computation of the implied fair value of goodwill would then be compared to its related carrying value. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of goodwill, an impairment loss would be recognized in the amount of the excess. Management utilizes a discounted cash flow analysis, referred to as an income approach, to determine the estimated fair value of its reporting units. Judgments and assumptions are inherent in our estimate of future cash flows used to determine the estimate of the reporting unit’s fair value. The use of alternate judgments and/or assumptions could result in the recognition of different levels of impairment charges in the consolidated financial statements. At September 30, 2014 and 2013, the fair value of our reporting unit exceeded its carrying value, so goodwill was not impaired. | |||
Intangible Assets | |||
Intangible assets that have finite useful lives are amortized on a straight-line basis over their estimated useful lives ranging from 3 years to 10 years. | |||
Income taxes | |||
The Company provides for income taxes in accordance with the liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax carryforward amounts. Management provides a valuation allowance against deferred tax assets for amounts which are not considered “more likely than not” to be realized. | |||
Revenue recognition | |||
The Company recognizes revenue for product sales when title transfers, the risks and rewards of ownership have been transferred to the customer, the fee is fixed and determinable and the collection of the related receivable is probable, which is generally at the time of shipment. The stated shipping terms are generally FOB shipping point per the Company's sales agreements with its customers. Accruals are established for expected returns based on historical activity. Revenue for repair services is recognized when the repair is completed and the product is shipped back to the customer. Revenue for recycle services is recognized when title transfers, the risks and rewards of ownership have been transferred to the customer, the fee is fixed and determinable and the collection of the related receivable is probable, which is generally upon acceptance of the shipment at the recycler’s location. | |||
Freight | |||
Amounts billed to customers for shipping and handling represent revenues earned and are included in sales income in the accompanying consolidated statements of operations and comprehensive income (loss). Actual costs for shipping and handling of these sales are included in cost of sales. | |||
Advertising costs | |||
Advertising costs are expensed as incurred. Advertising expense was $0.1 million for the year ended September 30, 2014 and $0.2 million for each of the years ended September 30, 2013 and 2012. | |||
Management estimates | |||
The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |||
Any significant, unanticipated changes in product demand, technological developments or continued economic trends affecting the cable or telecommunications industries could have a significant impact on the value of the Company's inventory and operating results. | |||
Concentrations of credit risk | |||
The Company holds cash with one major financial institution, which at times exceeds FDIC insured limits. Historically, the Company has not experienced any losses due to such concentration of credit risk. | |||
Other financial instruments that potentially subject the Company to concentration of credit risk consist principally of trade receivables. Concentrations of credit risk with respect to trade receivables are limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. The Company controls credit risk through credit approvals, credit limits and monitoring procedures. The Company performs in-depth credit evaluations for all new customers but does not require collateral to support customer receivables. The Company had no customer in 2014, 2013 or 2012 that contributed in excess of 10% of the total net sales. The Company’s sales to foreign (non-U.S. based customers) were approximately $3.6 million, $1.1 million and $1.4 million for the years ended September 30, 2014, 2013 and 2012, respectively. In 2014, the Cable TV segment purchased approximately 14% of its inventory either directly from Cisco or indirectly through their primary stocking distributor and approximately 32% of its inventory from Arris Solutions, Inc. The concentration of suppliers of the Company’s inventory subjects the Company to risk. The Telco segment purchased approximately 13% of its total inventory purchases from Windstream. | |||
Employee stock-based awards | |||
Share-based payments to employees, including grants of employee stock options, are recognized in the consolidated financial statements based on their grant date fair value over the requisite service period. The Company determines the fair value of the options issued, using the Black-Scholes valuation model, and amortizes the calculated value over the vesting term of the stock options. Compensation expense for stock-based awards is included in the operating, selling, general and administrative expense section of the consolidated statements of operations and comprehensive income (loss). | |||
Earnings per share | |||
Basic earnings per share is computed by dividing the earnings available to common shareholders by the weighted average number of common shares outstanding for the year. Dilutive earnings per share include any dilutive effect of stock options and restricted stock. | |||
Fair value of financial instruments | |||
The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short maturities. | |||
FASB ASC 820, | |||
Fair Value Measurements and Disclosures, | |||
defines fair value, establishes a consistent framework for measuring fair value and establishes a fair value hierarchy based on the observability of inputs used to measure fair value. The three levels of the fair value hierarchy are as follows: | |||
● | Level 1 – Quoted prices for identical assets in active markets or liabilities that we have the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. | ||
● | Level 2 – Inputs are other than quoted prices in active markets included in Level 1 that are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured. | ||
● | Level 3 – Inputs that are not observable for which there is little, if any, market activity for the asset or liability being measured. These inputs reflect management’s best estimate of the assumptions market participants would use in determining fair value. | ||
Recent | |||
ly Issued Accounting Standards | |||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08: “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)”. This new guidance defines a discontinued operation as a disposal of a component or a group of components of an entity that represents a strategic shift in operations that has a major effect on the Company’s operations and financial results. This guidance will require additional disclosures for discontinued operations as well as new disclosures for individually significant disposal transactions that do not qualify for discontinued operations reporting. The guidance is effective for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014. Management does not anticipate that the adoption of ASU No. 2014-08 to have a significant impact on the Company’s consolidated financial statements. | |||
In May 2014, the FASB issued ASU No. 2014-09: “Revenue from Contracts with Customers (Topic 606)”. This guidance was issued to clarify the principles for recognizing revenue and develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards (“IFRS”). The guidance is effective for the fiscal years and interim periods within those years beginning after December 15, 2016. Management is evaluating the impact that ASU No. 2014-09 will have on the Company’s consolidated financial statements. |
Note_2_Acquisition
Note 2 - Acquisition | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | ' | ||||||||
Note 2 – Acquisition | |||||||||
As part of the Company’s growth strategy, the Company is pursuing an acquisition strategy to expand into the broader telecommunications industry. On February 28, 2014, the Company acquired all of the outstanding common stock of Nave Communications, a telecommunications distributor of used telecommunication networking equipment and a recycler of surplus and obsolete telecommunications equipment. This acquisition, along with its retained management team, will diversify the Company’s business outside of the cable television industry and will also allow the Company to capitalize on growth opportunities in both the cable television and telecommunication industries. | |||||||||
The purchase price for Nave Communications includes the following: | |||||||||
Cash payments, net of cash received | $ | 9,630,647 | |||||||
Deferred guaranteed payments (a) | 2,744,338 | ||||||||
Net purchase price | $ | 12,374,985 | |||||||
(a) | This amount represents the present value of $3.0 million in deferred payments, which will be paid in equal annual installments over the next three years. Over the three year period, the Company will ratably record interest expense with the offset being the deferred payment liability. As of September 30, 2014, the deferred guaranteed payments balance is $1.0 million in other current liabilities and $1.8 million in other long-term liabilities. | ||||||||
Under the acquisition method of accounting, the total purchase price is allocated to Nave Communications’ net tangible and intangible assets acquired and liabilities assumed based on their fair values as of February 28, 2014, the effective date of the acquisition. Any remaining amount is recorded as goodwill. | |||||||||
The following summarizes the final purchase price allocation of the fair value of the assets acquired and the liabilities assumed at February 28, 2014: | |||||||||
(in thousands) | |||||||||
Assets acquired: | |||||||||
Cash and cash equivalents | $ | 113 | |||||||
Accounts receivable | 1,651 | ||||||||
Inventories | 2,503 | ||||||||
Property and equipment | 406 | ||||||||
Other non-current assets | 120 | ||||||||
Intangible assets | 7,107 | ||||||||
Goodwill | 2,760 | ||||||||
Total assets acquired | 14,660 | ||||||||
Liabilities assumed: | |||||||||
Accounts payable | 1,821 | ||||||||
Accrued expenses | 275 | ||||||||
Capital lease obligation – current portion | 21 | ||||||||
Capital lease obligation | 55 | ||||||||
Total liabilities assumed | 2,172 | ||||||||
Net assets acquired | 12,488 | ||||||||
Less cash acquired | 113 | ||||||||
Net purchase price | $ | 12,375 | |||||||
The acquired intangible assets of approximately $7.1 million consist primarily of customer relationships, technology, trade name, and non-compete agreements with the former owners. | |||||||||
The Company will also make payments over the next three years equal to 70% of Nave Communications’ annual EBITDA in excess of $2.0 million per year (“Nave Earn-out”). The Company will recognize the expense ratably over the three year period as compensation expense. | |||||||||
The unaudited financial information in the table below summarizes the combined results of operations of ADDvantage Technologies Group and Nave Communications for the year ended September 30, 2014 and September 30, 2013, on a pro forma basis, as though the companies had been combined as of October 1, 2012. The pro forma earnings for the year ended September 30, 2014 and September 30, 2013 were adjusted to include intangible amortization expense of $0.8 million. Incremental interest expense of $0.2 million was included in the year ended September 30, 2014 and September 30, 2013, as if the $5.0 million term loan used to help fund the acquisition had been entered into on October 1, 2012. The $0.6 million of acquisition-related expenses were excluded from the year ended September 30, 2014 and included in the year ended September 30, 2013 as if the acquisition occurred at October 1, 2012. The unaudited pro forma financial information is provided for informational purposes only and does not purport to be indicative of the Company’s combined results of operations which would actually have been obtained had the acquisition taken place on October 1, 2012 nor should it be taken as indicative of our future consolidated results of operations. | |||||||||
Years Ended September 30, | |||||||||
2014 | 2013 | ||||||||
(in thousands, except | |||||||||
per share amounts) | |||||||||
Sales | $ | 41,983 | $ | 41,701 | |||||
Income from continuing operations | $ | 1,275 | $ | 1,881 | |||||
Net income | $ | 609 | $ | 1,779 | |||||
Earnings per share: | |||||||||
Basic: | |||||||||
Continuing operations | $ | 0.13 | $ | 0.19 | |||||
Net income | $ | 0.06 | $ | 0.18 | |||||
Diluted: | |||||||||
Continuing operations | $ | 0.13 | $ | 0.19 | |||||
Net income | $ | 0.06 | $ | 0.18 |
Note_3_Discontinued_Operations
Note 3 - Discontinued Operations and Assets Held for Sale | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | ' | ||||||||||||
Note 3 – Dis | |||||||||||||
continued Operations and A | |||||||||||||
ssets | |||||||||||||
H | |||||||||||||
eld for | |||||||||||||
S | |||||||||||||
ale | |||||||||||||
On January 31, 2014, the Company entered into an agreement to sell the majority of the net assets and operations of Adams Global Communications, LLC (“AGC”) to Adams Cable Equipment, a supplier of customer premise equipment (“CPE”) and other products for the cable television industry, for $2 million in cash, which yielded an after tax loss of $0.6 million. As part of the sales agreement, ADDvantage retained their existing relationship with Arris Solutions, as well as non-CPE inventory consisting primarily of headend and access and transport equipment. In addition, ADDvantage retained the AGC facility. As part of the agreement, the Company also agreed to not compete in the used CPE market for three years. The Company elected to pursue this opportunity to sell AGC as management determined that AGC did not fit within the Company’s primary cable television equipment distribution business of selling new and used headend and access and transport equipment, and AGC was not performing to the Company’s expectations. | |||||||||||||
The calculation of the pretax loss on the sale of AGC is as follows: | |||||||||||||
Cash proceeds | $ | 2,000,000 | |||||||||||
Assets sold: | |||||||||||||
Accounts receivable | 454,269 | ||||||||||||
Inventories | 2,044,135 | ||||||||||||
Prepaid expenses | 12,054 | ||||||||||||
Property and equipment | 60,586 | ||||||||||||
Goodwill | 410,123 | ||||||||||||
Other | 10,805 | ||||||||||||
2,991,972 | |||||||||||||
Liabilities transferred: | |||||||||||||
Accounts payable | 77,675 | ||||||||||||
Accrued expenses | 6,075 | ||||||||||||
83,750 | |||||||||||||
Net assets sold | 2,908,222 | ||||||||||||
Pretax loss on the sale of AGC | $ | 908,222 | |||||||||||
Assets and liabilities included within discontinued operations held for sale in the Company’s Consolidated Balance Sheet at September 30, 2013, are as follows: | |||||||||||||
September 30, | |||||||||||||
2013 | |||||||||||||
Assets: | |||||||||||||
Cash and cash equivalents | $ | (110,068 | ) | ||||||||||
Accounts receivable, net | 629,874 | ||||||||||||
Income tax receivable | 13,590 | ||||||||||||
Inventories | 2,718,747 | ||||||||||||
Prepaid expenses | 15,774 | ||||||||||||
Current assets of discontinued operations held for sale | $ | 3,267,917 | |||||||||||
Property and equipment, at cost: | |||||||||||||
Land and building | $ | 1,585,594 | |||||||||||
Machinery and equipment | 134,010 | ||||||||||||
Less accumulated depreciation | (132,207 | ) | |||||||||||
Net property and equipment | 1,587,397 | ||||||||||||
Goodwill | 410,123 | ||||||||||||
Non-current assets of discontinued operations held for | $ | 1,997,520 | |||||||||||
sale | |||||||||||||
Liabilities: | |||||||||||||
Accounts payable | $ | 170,375 | |||||||||||
Accrued expenses | 56,382 | ||||||||||||
Current liabilities of discontinued operations held for sale | $ | 226,757 | |||||||||||
The Company retained the AGC facility following the disposition and actively marketed the facility with a real estate broker. Therefore, the Company had classified this facility as “Assets held for sale” on the Consolidated Balance Sheets, net of accumulated depreciation. On June 30, 2014, the Company sold the AGC facility for $1.5 million with net settlement proceeds of $1.4 million. The sale resulted in a pretax loss of $0.1 million. | |||||||||||||
Income (loss) from discontinued operations, net of tax and the loss on sale of discontinued operations, net of tax, of AGC which are presented in total as discontinued operations, net of tax in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended September 30, 2014, 2013 and 2012 are as follows: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Sales | $ | 972,935 | $ | 4,680,241 | $ | 5,539,225 | |||||||
Income (loss) before provision (benefit) for income taxes | (57,211 | ) | (164,207 | ) | 511,212 | ||||||||
Income tax provision (benefit) | (21,000 | ) | (62,000 | ) | 200,000 | ||||||||
Income (loss) from discontinued operations, net of tax | (36,211 | ) | (102,207 | ) | 311,212 | ||||||||
Loss on sale of discontinued operations | (993,835 | ) | − | − | |||||||||
Income tax benefit | (364,000 | ) | − | − | |||||||||
Loss on sale of discontinued operations, | (629,835 | ) | − | − | |||||||||
net of tax | |||||||||||||
Discontinued operations, net of tax | $ | (666,046 | ) | $ | (102,207 | ) | $ | 311,212 |
Note_4_Inventories
Note 4 - Inventories | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Inventory Disclosure [Text Block] | ' | ||||||||
Note | |||||||||
4 | |||||||||
– Inventories | |||||||||
Inventories at September 30, 2014 and 2013 are as follows: | |||||||||
2014 | 2013 | ||||||||
New: | |||||||||
Cable TV | $ | 16,949,713 | $ | 15,679,789 | |||||
Refurbished: | |||||||||
Cable TV | 3,982,140 | 3,931,917 | |||||||
Telco | 4,005,298 | − | |||||||
Allowance for excess and obsolete inventory | (2,156,628 | ) | (1,600,000 | ) | |||||
$ | 22,780,523 | $ | 18,011,706 | ||||||
New inventory includes products purchased from the manufacturers plus “surplus-new”, which are unused products purchased from other distributors or multiple system operators. Refurbished inventory includes factory refurbished, Company refurbished and used products. Generally, the Company does not refurbish its used inventory until there is a sale of that product or to keep a certain quantity on hand. | |||||||||
The Company regularly reviews the Cable Television segment inventory quantities on hand, and an adjustment to cost is recognized when the loss of usefulness of an item or other factors, such as obsolete and excess inventories, indicate that cost will not be recovered when an item is sold. The Company recorded charges in the Cable Television segment to allow for obsolete inventory, which increased the cost of sales during the fiscal years ended September 30, 2014, 2013 and 2012, by approximately $0.6 million, respectively. For the Telco segment, any obsolete and excess telecommunications inventory is processed through its recycling program when it is identified. |
Note_5_Intangible_Assets
Note 5 - Intangible Assets | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Intangible Assets Disclosure [Text Block] | ' | ||||||||||||
Note 5 – Intangible Assets | |||||||||||||
As a result of the Nave Communications acquisition, the Company now has intangible assets with finite useful lives based on the purchase price allocation (see Note 2). The intangible assets with their associated accumulated amortization amounts at September 30, 2014 are as follows: | |||||||||||||
Gross | Accumulated | Net | |||||||||||
Amortization | |||||||||||||
Intangible assets: | |||||||||||||
Customer relationships – 10 years | $ | 4,257,000 | $ | (248,325 | ) | $ | 4,008,675 | ||||||
Technology – 7 years | 1,303,000 | (108,583 | ) | 1,194,417 | |||||||||
Trade name – 10 years | 1,293,000 | (75,425 | ) | 1,217,575 | |||||||||
Non-compete agreements – 3 years | 254,000 | (49,389 | ) | 204,611 | |||||||||
Total intangible assets | $ | 7,107,000 | $ | (481,722 | ) | $ | 6,625,278 | ||||||
The estimated aggregate amortization expense for each of the next five fiscal years is as follows: | |||||||||||||
2015 | $ | 825,810 | |||||||||||
2016 | 825,810 | ||||||||||||
2017 | 776,421 | ||||||||||||
2018 | 741,143 | ||||||||||||
2019 | 741,143 | ||||||||||||
Thereafter | 2,714,951 | ||||||||||||
Total | $ | 6,625,278 |
Note_6_Income_Taxes
Note 6 - Income Taxes | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Income Tax Disclosure [Text Block] | ' | ||||||||||||
Note 6 – Income Taxes | |||||||||||||
The provision (benefit) for income taxes for the years ended September 30, 2014, 2013 and 2012 consists of: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Continuing operations: | |||||||||||||
Current | $ | 496,000 | $ | 1,113,351 | $ | 332,000 | |||||||
Deferred | (276,000 | ) | (15,000 | ) | 234,000 | ||||||||
220,000 | 1,098,351 | 566,000 | |||||||||||
Discontinued operations – current | (385,000 | ) | (62,000 | ) | 200,000 | ||||||||
Total provision (benefit) for income taxes | $ | (165,000 | ) | $ | 1,036,351 | $ | 766,000 | ||||||
The following table summarizes the differences between the U.S. federal statutory rate and the Company’s effective tax rate for continuing operations financial statement purposes for the years ended September 30, 2014, 2013 and 2012: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Statutory tax rate | 34 | % | 34 | % | 34 | % | |||||||
State income taxes, net of U.S. federal tax benefit | 5.7 | % | 4.3 | % | 4 | % | |||||||
Net operating loss | (10.2% | ) | (3.1% | ) | (6.0% | ) | |||||||
Additional state tax deduction for federal taxes | (5.6% | ) | − | − | |||||||||
Charges without tax benefit | 3.9 | % | 1.1 | % | 1.9 | % | |||||||
Tax credits and other exclusions | (2.8% | ) | 2.00% | 3.7 | % | ||||||||
Company’s effective tax rate | 25 | % | 38.3 | % | 37.6 | % | |||||||
The tax credits and other exclusions rate for fiscal year 2014 includes, among other things, the impact of deferred taxes resulting from intangible and goodwill basis differences resulting from the acquisition of Nave Communications. | |||||||||||||
The tax effects of temporary differences related to deferred taxes at September 30, 2014 and 2013 consist of the following: | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss carryforwards | $ | 335,000 | $ | 414,000 | |||||||||
Accounts receivable | 77,000 | 116,000 | |||||||||||
Inventory | 1,066,000 | 842,000 | |||||||||||
Intangibles | 79,000 | − | |||||||||||
Employee costs accruals | 141,000 | 122,000 | |||||||||||
Stock options | 163,000 | 114,000 | |||||||||||
Other, net | 16,000 | (4,000 | ) | ||||||||||
1,877,000 | 1,604,000 | ||||||||||||
Deferred tax liabilities: | |||||||||||||
Financial basis in excess of tax basis of certain assets | 728,000 | 731,000 | |||||||||||
Net deferred tax asset | $ | 1,149,000 | $ | 873,000 | |||||||||
The above net deferred tax asset is presented in the Company’s consolidated balance sheets at September 30, 2014 and 2013 as follows: | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax asset | $ | 1,416,000 | $ | 1,066,000 | |||||||||
– current | |||||||||||||
Deferred tax liability | (267,000 | ) | (193,000 | ) | |||||||||
– noncurrent | |||||||||||||
$ | 1,149,000 | $ | 873,000 | ||||||||||
Utilization of the Company’s net operating loss carryforward, totaling approximately $0.8 million at September 30, 2014, to reduce future taxable income is limited to an annual deductible amount of approximately $0.3 million. The net operating loss carryforward expires in varying amounts in 2019 and 2020. | |||||||||||||
The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial performance. The Company has concluded, based on its historical earnings and projected future earnings, that it will be able to realize the full effect of the deferred tax assets and no valuation allowance is needed. | |||||||||||||
Based upon a review of its income tax positions, the Company believes that its positions would be sustained upon an examination by the Internal Revenue Service and does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded. Generally, the Company is no longer subject to examinations by the U.S. federal, state or local tax authorities for tax years before 2011. |
Note_7_Accrued_Expenses
Note 7 - Accrued Expenses | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | ' | ||||||||
Note 7 – Accrued Expenses | |||||||||
Accrued expenses at September 30, 2014 and 2013 are as follows: | |||||||||
2014 | 2013 | ||||||||
Employee costs | $ | 1,089,754 | $ | 715,937 | |||||
Nave Earn-out | 356,513 | − | |||||||
Taxes other than income tax | 191,316 | 154,485 | |||||||
Interest | 18,563 | 996 | |||||||
Other, net | 153,732 | 7,056 | |||||||
$ | 1,809,878 | $ | 878,474 |
Note_8_Line_of_Credit_and_Note
Note 8 - Line of Credit and Notes Payable | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
Notes to Financial Statements | ' | ||||
Debt Disclosure [Text Block] | ' | ||||
Note | |||||
8 | |||||
– Line of Credit | |||||
and | |||||
Notes Payable | |||||
Notes Payable | |||||
The Company has an Amended and Restated Revolving Credit and Term Loan Agreement (“Credit and Term Loan Agreement”). At September 30, 2014, the Company has two term loans outstanding under the Credit and Term Loan Agreement. One outstanding term loan has an outstanding balance of $1.3 million at September 30, 2014 and is due on November 20, 2021, with monthly principal payments of $15,334 plus accrued interest. The interest rate is the prevailing 30-day LIBOR rate plus 1.4% (1.56% at September 30, 2014) and is reset monthly. This term loan is collateralized by inventory, accounts receivable, equipment and fixtures and general intangibles. | |||||
The second outstanding term loan was entered into as a result of the acquisition of Nave Communications for $5.0 million. This term loan has an outstanding balance of $4.7 million at September 30, 2014 and is due March 4, 2019, with monthly principal and interest payments of $68,505, with the balance due at maturity. It is a five year term loan with a seven year amortization payment schedule with a fixed interest rate of 4.07%. This term loan is collateralized by inventory, accounts receivable, equipment and fixtures and general intangibles. | |||||
Capital Lease Obligations | |||||
The Company has two capital lease obligations related to machinery and equipment totaling $64 thousand at September 30, 2014 with monthly principal and interest payments of $2,069. The capital lease obligations are due on June 20, 2017 and September 20, 2017. | |||||
The aggregate minimum maturities of notes payable for each of the next five years are as follows: | |||||
2015 | $ | 845,845 | |||
2016 | 874,388 | ||||
2017 | 899,234 | ||||
2018 | 908,945 | ||||
2019 | 2,143,600 | ||||
Thereafter | 413,899 | ||||
Total | $ | 6,085,911 | |||
Line of Credit | |||||
The Company has a $7.0 million Revolving Line of Credit (“Line of Credit”) under the Credit and Term Loan Agreement with its primary financial lender. At September 30, 2014, the Company had no amount outstanding under the Line of Credit. The Line of Credit requires quarterly interest payments based on the prevailing 30-day LIBOR rate plus 2.75% (2.91% at September 30, 2014), and the interest rate is reset monthly. Any future borrowings under the Line of Credit are due on November 28, 2014. Future borrowings under the Line of Credit are limited to the lesser of $7.0 million or the net balance of 80% of qualified accounts receivable plus 50% of qualified inventory. Under these limitations, the Company’s total Line of Credit borrowing base was $7.0 million at September 30, 2014. Among other financial covenants, the Line of Credit agreement provides that the Company must maintain a fixed charge ratio of coverage (EBITDA to total fixed charges) of not less than 1.25 to 1.0, determined quarterly. The Line of Credit is collateralized by inventory, accounts receivable, equipment and fixtures and general intangibles. | |||||
Subsequent to September 30, 2014, the Company signed the Fifth Amendment to the Amended and Restated Revolving Credit and Term Loan Agreement with its primary financial lender dated November 28, 2014. This amendment extended the Line of Credit maturity to November 27, 2015. The Line of Credit remains at $7.0 million, and the interest rate remains at the prevailing 30-day LIBOR rate plus 2.75%. | |||||
Fair Value of Debt | |||||
The carrying value of the Company’s variable-rate term loan approximates its fair value since the interest rate fluctuates periodically based on a floating interest rate. | |||||
The Company has determined the fair value of its fixed-rate term loan utilizing the Level 2 hierarchy as the fair value can be estimated from broker quotes corroborated by other market data. These broker quotes are based on observable market interest rates at which loans with similar terms and maturities could currently be executed. The Company then estimated the fair value of the fixed-rate term loan using cash flows discounted at the current market interest rate obtained. The fair value of the Company’s second term loan was approximately $4.7 million as of September 30, 2014. |
Note_9_StockBased_Compensation
Note 9 - Stock-Based Compensation and Preferred Stock | 12 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Notes to Financial Statements | ' | |||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | |||||||||||||||
Note | ||||||||||||||||
9 | ||||||||||||||||
– Stock-Based Compensation and Preferred Stock | ||||||||||||||||
Plan Information | ||||||||||||||||
The 1998 Incentive Stock Plan, as amended, (the “Plan”) provides for awards of stock options and restricted stock to officers, directors, key employees and consultants. The Plan provides that upon any issuance of additional shares of common stock by the Company, other than pursuant to the Plan, the number of shares covered by the Plan will increase to an amount equal to 10% of the then outstanding shares of common stock. Under the Plan, option prices will be set by the Board of Directors and may be greater than, equal to, or less than fair market value on the grant date. | ||||||||||||||||
At September 30, 2014, 1,024,656 shares of common stock were reserved for the exercise of, or lapse of restrictions on, stock awards under the Plan. Of these reserved shares, 40,415 shares were available for future grants. | ||||||||||||||||
Stock Options | ||||||||||||||||
Share-based payments to employees, including grants of employee stock options, are recognized in the consolidated financial statements based on their grant date fair value over the requisite service period. Compensation expense for stock-based awards is included in the operating, selling, general and administrative expense section of the consolidated statements of operations and comprehensive income (loss). | ||||||||||||||||
Stock options are valued at the date of the award, which does not precede the approval date, and compensation cost is recognized on a straight-line basis over the vesting period. Stock options granted to employees generally become exercisable over a three, four or five-year period from the date of grant and generally expire ten years after the date of grant. Stock options granted to the Board of Directors generally become exercisable on the date of grant and generally expire ten years after the date of grant. | ||||||||||||||||
A summary of the status of the Company's stock options at September 30, 2014 and changes during the year then ended is presented below: | ||||||||||||||||
Options | Weighted | Aggregate | ||||||||||||||
Average | Intrinsic | |||||||||||||||
Exercise | Value | |||||||||||||||
Price | ||||||||||||||||
Outstanding at September 30, 2013 | 363,000 | $ | 2.83 | |||||||||||||
Granted | 200,000 | $ | 3.21 | |||||||||||||
Exercised | − | $ | – | $ | 0 | |||||||||||
Expired | (3,000 | ) | $ | 4.4 | ||||||||||||
Forfeited | − | $ | − | |||||||||||||
Outstanding at September 30, 2014 | 560,000 | $ | 2.96 | $ | 0 | |||||||||||
Exercisable at September 30, 2014 | 160,000 | $ | 3.28 | $ | 0 | |||||||||||
The total intrinsic value of options exercised was $0, $940, and $2,640 for the years ended September 30, 2014, 2013 and 2012, respectively. | ||||||||||||||||
Information about the Company’s outstanding and exercisable stock options at September 30, 2014 is as follows: | ||||||||||||||||
Exercisable | Remaining | |||||||||||||||
Stock Options | Stock Options | Contractual | ||||||||||||||
Exercise Price | Outstanding | Outstanding | Life (years) | |||||||||||||
$ | 3.21 | 200,000 | − | 9.5 | ||||||||||||
$ | 2.45 | 250,000 | 50,000 | 7.5 | ||||||||||||
$ | 3.001 | 65,000 | 65,000 | 3.9 | ||||||||||||
$ | 3.45 | 15,000 | 15,000 | 2.4 | ||||||||||||
$ | 5.78 | 15,000 | 15,000 | 1.4 | ||||||||||||
$ | 4.62 | 15,000 | 15,000 | 0.4 | ||||||||||||
560,000 | 160,000 | |||||||||||||||
The Company granted nonqualified stock options totaling 200,000 shares, 30,000 shares and 250,000 shares for fiscal years ended September 30, 2014, 2013 and 2012, respectively. The Company estimated the fair value of the options granted using the Black-Scholes option valuation model and the assumptions shown in the table below. The Company estimated the expected term of options granted based on the historical grants and exercises of the Company's options. The Company estimated the volatility of its common stock at the date of the grant based on both the historical volatility as well as the implied volatility on its common stock. The Company based the risk-free rate that was used in the Black-Scholes option valuation model on the implied yield in effect at the time of the option grant on U.S. Treasury zero-coupon issues with equivalent expected terms. The Company has never paid cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company used an expected dividend yield of zero in the Black-Scholes option valuation model. The Company amortizes the resulting fair value of the options ratably over the vesting period of the awards. The Company used historical data to estimate the pre-vesting options forfeitures and records share-based expense only for those awards that are expected to vest. | ||||||||||||||||
The estimated fair value at date of grant for stock options utilizing the Black-Scholes option valuation model and the assumptions that were used in the Black-Scholes option valuation model for the fiscal years 2014, 2013 and 2012 stock option grants are as follows: | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Estimated fair value of options at grant date | $244,400 | $29,040 | $267,925 | |||||||||||||
Black-Scholes model assumptions: | ||||||||||||||||
Average expected life (years) | 6 | 6 | 6 | |||||||||||||
Average expected volatility factor | 34% | 41% | 41% | |||||||||||||
Average risk-free interest rate | 2.79% | 2.95% | 2.99% | |||||||||||||
Average expected dividends yield | – | – | – | |||||||||||||
Compensation expense related to stock options recorded for the years ended September 30, 2014, 2013 and 2012 is as follows: | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Fiscal year 2008 grant | $ | – | $ | – | $ | 3,562 | ||||||||||
Fiscal year 2012 grant | 55,369 | 95,560 | 61,176 | |||||||||||||
Fiscal year 2013 grant | − | 1,481 | − | |||||||||||||
Fiscal year 2014 grant | 74,678 | − | – | |||||||||||||
Total compensation expense | $ | 130,047 | $ | 97,041 | $ | 64,738 | ||||||||||
The Company records compensation expense over the vesting term of the related options. At September 30, 2014, compensation costs related to these unvested stock options not yet recognized in the statements of operations and comprehensive income (loss) was $225,543. | ||||||||||||||||
Restricted stock | ||||||||||||||||
The Company granted restricted stock in March 2014, 2013 and 2012 to its Board of Directors totaling 19,050, 31,815 shares and 31,969 shares, respectively. The restricted stock grants were valued at market value on the date of grant. The restricted shares are delivered to the directors and employees at the end of the 12 month holding period. The fair value of the shares upon issuance totaled $60,000, $70,000 and $70,000 for the 2014, 2013 and 2012 fiscal year grants, respectively. The grants are amortized over the 12 month holding period as compensation expense. The Company granted restricted stock in April of 2014 to certain employees totaling 23,676 shares, which were valued at market value on the date of grant. The shares have a holding restriction, which will expire in equal annual installments of 7,892 shares over three years starting in April 2015. The fair value of these shares upon issuance totaled $76,000 and is being amortized over the respective one, two and three year holding periods as compensation expense. Compensation expense related to restricted stock recorded for the years ended September 30, 2014, 2013 and 2012 is as follows: | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Fiscal year 2011 grant | $ | – | $ | – | $ | 95,833 | ||||||||||
Fiscal year 2012 grant | − | 29,167 | 40,833 | |||||||||||||
Fiscal year 2013 grant | 29,167 | 40,833 | − | |||||||||||||
Fiscal year 2014 grant | 53,222 | – | – | |||||||||||||
$ | 82,389 | $ | 70,000 | $ | 136,666 |
Note_10_Retirement_Plan
Note 10 - Retirement Plan | 12 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | ' |
Pension and Other Postretirement Benefits Disclosure [Text Block] | ' |
Note | |
10 | |
– Retirement Plan | |
The Company sponsors a 401(k) plan that allows participation by all employees who are at least 21 years of age and have completed one year of service. The Company's contributions to the plan consist of a matching contribution as determined by the plan document. Costs recognized under the 401(k) plan were $0.2 million for each of the years ended September 30, 2014, 2013 and 2012. |
Note_11_Earnings_per_Share
Note 11 - Earnings per Share | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Earnings Per Share [Text Block] | ' | ||||||||||||
Note 11 | |||||||||||||
– Earnings per Share | |||||||||||||
Basic and diluted earnings per share for the years ended September 30 | |||||||||||||
, 2014, 2013 and 2012 are: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Income from continuing operations | $ | 659,189 | $ | 1,771,923 | $ | 939,280 | |||||||
Discontinued operations, net of tax | (666,046 | ) | (102,207 | ) | 311,212 | ||||||||
Net income (loss) attributable to common shareholders | $ | (6,857 | ) | $ | 1,669,716 | $ | 1,250,492 | ||||||
Basic weighted average shares | 10,021,431 | 10,052,359 | 10,196,241 | ||||||||||
Effect of dilutive securities: | |||||||||||||
Stock options | 28,009 | – | 1,255 | ||||||||||
Diluted weighted average shares | 10,049,440 | 10,052,359 | 10,197,496 | ||||||||||
Earnings (loss) per common share: | |||||||||||||
Basic | |||||||||||||
Continuing operations | $ | 0.07 | $ | 0.18 | $ | 0.09 | |||||||
Discontinued operations | (0.07 | ) | (0.01 | ) | 0.03 | ||||||||
Net income (loss) | $ | (0.00 | ) | $ | 0.17 | $ | 0.12 | ||||||
Diluted | |||||||||||||
Continuing operations | $ | 0.07 | $ | 0.18 | $ | 0.09 | |||||||
Discontinued operations | (0.07 | ) | (0.01 | ) | 0.03 | ||||||||
Net income (loss) | $ | (0.00 | ) | $ | 0.17 | $ | 0.12 | ||||||
The table below includes information related to stock options that were outstanding at the end of each respective year but have been excluded from the computation of weighted-average stock options for dilutive securities due to the option exercise price exceeding the average market price per share of our common stock for the fiscal year, or their effect would be anti-dilutive. | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Stock options excluded | 310,000 | 363,000 | 368,000 | ||||||||||
Weighted average exercise price of | $ | 3.37 | $ | 2.83 | $ | 2.84 | |||||||
stock options | |||||||||||||
Average market price of common stock | $ | 2.76 | $ | 2.24 | $ | 2.22 |
Note_12_Related_Parties
Note 12 - Related Parties | 12 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | ' |
Related Party Transactions Disclosure [Text Block] | ' |
Note 12 | |
– Related Parties | |
The Company leased on a month-to-month basis through September 30, 2012 one warehouse in Oklahoma from a company owned 50% by David E. Chymiak and Kenneth A. Chymiak. The total payments made on the lease to this company were $0.1 million for the year ended September 30, 2012. | |
David E. Chymiak and Kenneth A. Chymiak beneficially owned 26% and 22%, respectively, of the Company’s outstanding common stock at September 30, 2014. |
Note_13_Commitments_and_Contin
Note 13 - Commitments and Contingencies | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
Notes to Financial Statements | ' | ||||
Commitments and Contingencies Disclosure [Text Block] | ' | ||||
Note 13 | |||||
– Commitments and Contingencies | |||||
The Company leases and rents various office and warehouse properties in Georgia, Maryland, North Carolina and Pennsylvania. The terms on its operating leases vary and contain renewal options or are rented on a month-to-month basis. Rental payments associated with leased properties totaled approximately $0.4 million, $37,000 and $0.2 million for the years ended September 30, 2014, 2013 and 2012, respectively. The Company’s minimum annual future obligations under all existing operating leases for each of the next five years are as follows: | |||||
2015 | $ | 494,170 | |||
2016 | 502,250 | ||||
2017 | 514,806 | ||||
2018 | 527,676 | ||||
2019 | 540,868 | ||||
Thereafter | 2,402,023 | ||||
Total | $ | 4,981,793 |
Note_14_Segment_Reporting
Note 14 - Segment Reporting | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Segment Reporting Disclosure [Text Block] | ' | ||||||||||||
Note | |||||||||||||
14 | |||||||||||||
– Segment Reporting | |||||||||||||
During the second quarter of fiscal year 2014, the Company changed its organizational structure with the acquisition of Nave Communications. As a result of this acquisition, information that the Company’s management team regularly reviews for purposes of allocating resources and assessing performance changed. Therefore, beginning in fiscal year 2014, the Company is reporting its financial performance based on its new external reporting segments: Cable Television and Telecommunications. These reportable segments are described below. | |||||||||||||
Cable Television (“Cable TV”) | |||||||||||||
The Company’s Cable TV segment sells new, surplus and re-manufactured cable television equipment throughout North America, Central America, South America and, to a substantially lesser extent, other international regions that utilize the same technology. In addition, this segment also repairs cable television equipment for various cable companies. | |||||||||||||
Telecommunications (“Telco”) | |||||||||||||
The Company’s Telecommunications segment consists of Nave Communications. Through Nave Communications’ diverse customer base and its broad range of manufacturer systems and components, Nave Communications’ provides cost effective telecommunications and networking solutions to expand network capacity and infrastructure for its customers. Nave Communications specializes in the sale of used telecommunications networking equipment. In addition, Nave Communications offers its customers decommissioning services for surplus and obsolete equipment, which Nave Communications in turn processes through its recycling services. | |||||||||||||
The Company evaluates performance and allocates its resources based on operating income. The accounting policies of its reportable segments are the same as those described in the summary of significant accounting policies. | |||||||||||||
Segment assets consist primarily of cash and cash equivalents, accounts receivable, inventory, property, plant and equipment, goodwill and other intangible assets. | |||||||||||||
Fiscal Years Ended | |||||||||||||
September 30, | September 30, | September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||||
Sales | |||||||||||||
Cable TV | $ | 27,206,743 | $ | 28,677,351 | $ | 29,677,178 | |||||||
Telco | 8,710,267 | − | − | ||||||||||
Intersegment | (28,318 | ) | − | − | |||||||||
Total sales | $ | 35,888,692 | $ | 28,677,351 | $ | 29,677,178 | |||||||
Gross profit | |||||||||||||
Cable TV | $ | 7,770,723 | $ | 8,709,317 | $ | 8,557,928 | |||||||
Telco | 3,834,733 | − | − | ||||||||||
Total gross profit | $ | 11,605,456 | $ | 8,709,317 | $ | 8,557,928 | |||||||
Operating income (loss) | |||||||||||||
Cable TV | $ | 1,492,100 | $ | 2,896,254 | $ | 2,619,134 | |||||||
Telco | (395,001 | ) | − | − | |||||||||
Total operating income (loss) | $ | 1,097,099 | $ | 2,896,254 | $ | 2,619,134 | |||||||
Segment assets | |||||||||||||
Cable TV | $ | 29,241,335 | $ | 27,582,573 | $ | 29,625,943 | |||||||
Telco | 17,781,114 | − | − | ||||||||||
Non-allocated (A) | 6,383,232 | 15,533,547 | 12,406,983 | ||||||||||
Total assets | $ | 53,405,681 | $ | 43,116,120 | $ | 42,032,926 | |||||||
(A) | Non-allocated assets include the impact of classifying the AGC operations as discontinued operations as a result of the sale of AGC and the AGC facility in 2014. The discontinued operations asset balances as of September 30, 2014, 2013 and 2012 were $0, $5.3 million and $5.5 million, respectively. |
Note_15_Quarterly_Results_of_O
Note 15 - Quarterly Results of Operations (Unaudited) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Quarterly Financial Information [Text Block] | ' | ||||||||||||||||
Note 15 | |||||||||||||||||
– Quarterly Results of Operations (Unaudited) | |||||||||||||||||
The following is a summary of the quarterly results of operations for the years ended September 30, 2014, 2013 and 2012: | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Fiscal year ended 2014 | |||||||||||||||||
Sales | $ | 6,119,733 | $ | 8,313,815 | $ | 9,323,158 | $ | 12,131,986 | |||||||||
Gross profit | $ | 1,863,227 | $ | 2,231,167 | $ | 3,220,055 | $ | 4,291,007 | |||||||||
Income (loss) from continuing | $ | 139,369 | $ | (243,264 | ) | $ | 143,726 | $ | 619,358 | ||||||||
operations | |||||||||||||||||
Basic earnings (loss) from | $ | 0.01 | $ | (0.02 | ) | $ | 0.01 | $ | 0.06 | ||||||||
continuing operations per | |||||||||||||||||
common share | |||||||||||||||||
Diluted earnings (loss) from | $ | 0.01 | $ | (0.02 | ) | $ | 0.01 | $ | 0.06 | ||||||||
continuing operations per | |||||||||||||||||
common share | |||||||||||||||||
Fiscal year ended 2013 | |||||||||||||||||
Sales | $ | 7,899,497 | $ | 6,764,102 | $ | 6,372,108 | $ | 7,641,644 | |||||||||
Gross profit | $ | 2,618,724 | $ | 1,866,352 | $ | 1,851,855 | $ | 2,372,386 | |||||||||
Income from continuing | $ | 660,291 | $ | 292,994 | $ | 269,984 | $ | 548,654 | |||||||||
operations | |||||||||||||||||
Basic earnings from | $ | 0.07 | $ | 0.03 | $ | 0.03 | $ | 0.05 | |||||||||
continuing operations per | |||||||||||||||||
common share | |||||||||||||||||
Diluted earnings from | $ | 0.07 | $ | 0.03 | $ | 0.03 | $ | 0.05 | |||||||||
continuing operations per | |||||||||||||||||
common share | |||||||||||||||||
Fiscal year ended 2012 | |||||||||||||||||
Sales | $ | 7,727,233 | $ | 7,891,316 | $ | 6,461,710 | $ | 7,596,919 | |||||||||
Gross profit | $ | 2,283,982 | $ | 2,141,147 | $ | 2,063,219 | $ | 2,069,580 | |||||||||
Income (loss) from continuing | $ | 387,391 | $ | (127,570 | ) | $ | 348,083 | $ | 331,376 | ||||||||
operations | |||||||||||||||||
Basic earnings (loss) from | $ | 0.04 | $ | (0.01 | ) | $ | 0.03 | $ | 0.03 | ||||||||
continuing operations per | |||||||||||||||||
common share | |||||||||||||||||
Diluted earnings (loss) from | $ | 0.04 | $ | (0.01 | ) | $ | 0.03 | $ | 0.03 | ||||||||
continuing operations per | |||||||||||||||||
common share |
Note_16_Schedule_II_Valuation_
Note 16 - Schedule II - Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||||||
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | ' | ||||||||||||||||||||
Schedule II – Valuation and Qualifying Accounts | |||||||||||||||||||||
Balance at | Charged to | Balance at | |||||||||||||||||||
Beginning | Costs and | End | |||||||||||||||||||
of Year | Expenses | Write offs | Recoveries | of Year | |||||||||||||||||
Year Ended September 30, 2014 | |||||||||||||||||||||
Allowance for Doubtful Accounts | $ | 300,000 | – | (103,403 | ) | 3,403 | $ | 200,000 | |||||||||||||
Allowance for Excess and Obsolete Inventory | $ | 1,600,000 | 601,351 | (208,056 | ) | 163,333 | $ | 2,156,628 | |||||||||||||
Year Ended September 30, 2013 | |||||||||||||||||||||
Allowance for Doubtful Accounts | $ | 300,000 | – | (5,692 | ) | 5,692 | $ | 300,000 | |||||||||||||
Allowance for Excess and Obsolete Inventory | $ | 1,000,000 | 1,044,913 | (294,913 | ) | – | $ | 1,750,000 | |||||||||||||
Year Ended September 30, 2012 | |||||||||||||||||||||
Allowance for Doubtful Accounts | $ | 300,000 | – | (2,404 | ) | 2,404 | $ | 300,000 | |||||||||||||
Allowance for Excess and Obsolete Inventory | $ | 1,556,000 | 580,587 | (1,136,587 | ) | – | $ | 1,000,000 |
Significant_Accounting_Policie
Significant Accounting Policies (Policies) | 12 Months Ended | ||
Sep. 30, 2014 | |||
Accounting Policies [Abstract] | ' | ||
Consolidation, Policy [Policy Text Block] | ' | ||
Organization | |||
and | |||
basis of presentation | |||
The consolidated financial statements include the accounts of ADDvantage Technologies Group, Inc. and its subsidiaries, all of which are wholly owned (collectively, the “Company”). Intercompany balances and transactions have been eliminated in consolidation. The Company’s reportable segments are Cable Television (“Cable TV”) and Telecommunications (“Telco”). | |||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | ||
Cash and cash equivalents | |||
Cash and cash equivalents includes demand and time deposits, money market funds and other marketable securities with maturities of three months or less when acquired. | |||
Receivables, Policy [Policy Text Block] | ' | ||
Accounts receivable | |||
Trade receivables are carried at original invoice amount less an estimate made for doubtful accounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. Trade receivables are written off against the allowance when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. The Company generally does not charge interest on past due accounts. | |||
Inventory, Policy [Policy Text Block] | ' | ||
Inventories | |||
Inventories consist of new and used electronic components for the Cable Television segment and used telecommunications networking equipment for the Telco segment. Inventory is stated at the lower of cost or market with market defined principally as net realizable value. Cost is determined using the weighted-average method. For the Cable Television segment, the Company records an inventory reserve provision to reflect inventory at its estimated realizable value based on a review of inventory quantities on hand, historical sales volumes and technology changes. These reserves are to provide for items that are potentially slow-moving, excess or obsolete. For the Telco segment, the Company does not maintain an inventory reserve as this segment will recycle any surplus and obsolete equipment on hand through its recycling program when it is identified. | |||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | ||
Property and equipment | |||
Property and equipment consists of software, office equipment, warehouse and service equipment and buildings with estimated useful lives generally of 3 years, 5 years, 10 years and 40 years, respectively. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the remainder of the lease agreement. Gains or losses from the ordinary sale or retirement of property and equipment are recorded in other income (expense). Repairs and maintenance costs are generally expensed as incurred, whereas major improvements are capitalized. Depreciation expense was $0.4 million, $0.3 million and $0.3 million for the years ended September 30, 2014, 2013 and 2012, respectively. | |||
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | ' | ||
Goodwill | |||
Goodwill represents the excess of the purchase price of acquisitions over the acquisition date fair value of the net identifiable tangible and intangible assets acquired. In accordance with current accounting guidance, goodwill is not amortized and is tested at least annually for impairment at the reporting unit level. The Company performs this annual analysis in the fourth quarter of each fiscal year and in any other period in which indicators of impairment warrant additional analysis. | |||
The goodwill analysis is a two-step process. Goodwill is first evaluated for impairment by comparing management’s estimate of the fair value of the reporting unit with the reporting unit’s carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, a computation of the implied fair value of goodwill would then be compared to its related carrying value. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of goodwill, an impairment loss would be recognized in the amount of the excess. Management utilizes a discounted cash flow analysis, referred to as an income approach, to determine the estimated fair value of its reporting units. Judgments and assumptions are inherent in our estimate of future cash flows used to determine the estimate of the reporting unit’s fair value. The use of alternate judgments and/or assumptions could result in the recognition of different levels of impairment charges in the consolidated financial statements. At September 30, 2014 and 2013, the fair value of our reporting unit exceeded its carrying value, so goodwill was not impaired. | |||
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | ' | ||
Intangible Assets | |||
Intangible assets that have finite useful lives are amortized on a straight-line basis over their estimated useful lives ranging from 3 years to 10 years. | |||
Income Tax, Policy [Policy Text Block] | ' | ||
Income taxes | |||
The Company provides for income taxes in accordance with the liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax carryforward amounts. Management provides a valuation allowance against deferred tax assets for amounts which are not considered “more likely than not” to be realized. | |||
Revenue Recognition, Policy [Policy Text Block] | ' | ||
Revenue recognition | |||
The Company recognizes revenue for product sales when title transfers, the risks and rewards of ownership have been transferred to the customer, the fee is fixed and determinable and the collection of the related receivable is probable, which is generally at the time of shipment. The stated shipping terms are generally FOB shipping point per the Company's sales agreements with its customers. Accruals are established for expected returns based on historical activity. Revenue for repair services is recognized when the repair is completed and the product is shipped back to the customer. Revenue for recycle services is recognized when title transfers, the risks and rewards of ownership have been transferred to the customer, the fee is fixed and determinable and the collection of the related receivable is probable, which is generally upon acceptance of the shipment at the recycler’s location. | |||
Shipping and Handling Cost, Policy [Policy Text Block] | ' | ||
Freight | |||
Amounts billed to customers for shipping and handling represent revenues earned and are included in sales income in the accompanying consolidated statements of operations and comprehensive income (loss). Actual costs for shipping and handling of these sales are included in cost of sales. | |||
Advertising Costs, Policy [Policy Text Block] | ' | ||
Advertising costs | |||
Advertising costs are expensed as incurred. Advertising expense was $0.1 million for the year ended September 30, 2014 and $0.2 million for each of the years ended September 30, 2013 and 2012. | |||
Use of Estimates, Policy [Policy Text Block] | ' | ||
Management estimates | |||
The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |||
Any significant, unanticipated changes in product demand, technological developments or continued economic trends affecting the cable or telecommunications industries could have a significant impact on the value of the Company's inventory and operating results. | |||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' | ||
Concentrations of credit risk | |||
The Company holds cash with one major financial institution, which at times exceeds FDIC insured limits. Historically, the Company has not experienced any losses due to such concentration of credit risk. | |||
Other financial instruments that potentially subject the Company to concentration of credit risk consist principally of trade receivables. Concentrations of credit risk with respect to trade receivables are limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. The Company controls credit risk through credit approvals, credit limits and monitoring procedures. The Company performs in-depth credit evaluations for all new customers but does not require collateral to support customer receivables. The Company had no customer in 2014, 2013 or 2012 that contributed in excess of 10% of the total net sales. The Company’s sales to foreign (non-U.S. based customers) were approximately $3.6 million, $1.1 million and $1.4 million for the years ended September 30, 2014, 2013 and 2012, respectively. In 2014, the Cable TV segment purchased approximately 14% of its inventory either directly from Cisco or indirectly through their primary stocking distributor and approximately 32% of its inventory from Arris Solutions, Inc. The concentration of suppliers of the Company’s inventory subjects the Company to risk. The Telco segment purchased approximately 13% of its total inventory purchases from Windstream. | |||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | ||
Employee stock-based awards | |||
Share-based payments to employees, including grants of employee stock options, are recognized in the consolidated financial statements based on their grant date fair value over the requisite service period. The Company determines the fair value of the options issued, using the Black-Scholes valuation model, and amortizes the calculated value over the vesting term of the stock options. Compensation expense for stock-based awards is included in the operating, selling, general and administrative expense section of the consolidated statements of operations and comprehensive income (loss). | |||
Earnings Per Share, Policy [Policy Text Block] | ' | ||
Earnings per share | |||
Basic earnings per share is computed by dividing the earnings available to common shareholders by the weighted average number of common shares outstanding for the year. Dilutive earnings per share include any dilutive effect of stock options and restricted stock. | |||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | ||
Fair value of financial instruments | |||
The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short maturities. | |||
FASB ASC 820, | |||
Fair Value Measurements and Disclosures, | |||
defines fair value, establishes a consistent framework for measuring fair value and establishes a fair value hierarchy based on the observability of inputs used to measure fair value. The three levels of the fair value hierarchy are as follows: | |||
? | Level 1 – Quoted prices for identical assets in active markets or liabilities that we have the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. | ||
? | Level 2 – Inputs are other than quoted prices in active markets included in Level 1 that are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured. | ||
? | Level 3 – Inputs that are not observable for which there is little, if any, market activity for the asset or liability being measured. These inputs reflect management’s best estimate of the assumptions market participants would use in determining fair value. | ||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | ||
Recent | |||
ly Issued Accounting Standards | |||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08: “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)”. This new guidance defines a discontinued operation as a disposal of a component or a group of components of an entity that represents a strategic shift in operations that has a major effect on the Company’s operations and financial results. This guidance will require additional disclosures for discontinued operations as well as new disclosures for individually significant disposal transactions that do not qualify for discontinued operations reporting. The guidance is effective for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014. Management does not anticipate that the adoption of ASU No. 2014-08 to have a significant impact on the Company’s consolidated financial statements. | |||
In May 2014, the FASB issued ASU No. 2014-09: “Revenue from Contracts with Customers (Topic 606)”. This guidance was issued to clarify the principles for recognizing revenue and develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards (“IFRS”). The guidance is effective for the fiscal years and interim periods within those years beginning after December 15, 2016. Management is evaluating the impact that ASU No. 2014-09 will have on the Company’s consolidated financial statements. |
Note_2_Acquisition_Tables
Note 2 - Acquisition (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes Tables | ' | ||||||||
Business Combination, Separately Recognized Transactions [Table Text Block] | ' | ||||||||
Cash payments, net of cash received | $ | 9,630,647 | |||||||
Deferred guaranteed payments (a) | 2,744,338 | ||||||||
Net purchase price | $ | 12,374,985 | |||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | ' | ||||||||
(in thousands) | |||||||||
Assets acquired: | |||||||||
Cash and cash equivalents | $ | 113 | |||||||
Accounts receivable | 1,651 | ||||||||
Inventories | 2,503 | ||||||||
Property and equipment | 406 | ||||||||
Other non-current assets | 120 | ||||||||
Intangible assets | 7,107 | ||||||||
Goodwill | 2,760 | ||||||||
Total assets acquired | 14,660 | ||||||||
Liabilities assumed: | |||||||||
Accounts payable | 1,821 | ||||||||
Accrued expenses | 275 | ||||||||
Capital lease obligation – current portion | 21 | ||||||||
Capital lease obligation | 55 | ||||||||
Total liabilities assumed | 2,172 | ||||||||
Net assets acquired | 12,488 | ||||||||
Less cash acquired | 113 | ||||||||
Net purchase price | $ | 12,375 | |||||||
Business Acquisition, Pro Forma Information [Table Text Block] | ' | ||||||||
Years Ended September 30, | |||||||||
2014 | 2013 | ||||||||
(in thousands, except | |||||||||
per share amounts) | |||||||||
Sales | $ | 41,983 | $ | 41,701 | |||||
Income from continuing operations | $ | 1,275 | $ | 1,881 | |||||
Net income | $ | 609 | $ | 1,779 | |||||
Earnings per share: | |||||||||
Basic: | |||||||||
Continuing operations | $ | 0.13 | $ | 0.19 | |||||
Net income | $ | 0.06 | $ | 0.18 | |||||
Diluted: | |||||||||
Continuing operations | $ | 0.13 | $ | 0.19 | |||||
Net income | $ | 0.06 | $ | 0.18 |
Note_3_Discontinued_Operations1
Note 3 - Discontinued Operations and Assets Held for Sale (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Notes Tables | ' | ||||||||||||
Schedule of Calculation of Loss on Disposal Group [Table Text Block] | ' | ||||||||||||
Cash proceeds | $ | 2,000,000 | |||||||||||
Assets sold: | |||||||||||||
Accounts receivable | 454,269 | ||||||||||||
Inventories | 2,044,135 | ||||||||||||
Prepaid expenses | 12,054 | ||||||||||||
Property and equipment | 60,586 | ||||||||||||
Goodwill | 410,123 | ||||||||||||
Other | 10,805 | ||||||||||||
2,991,972 | |||||||||||||
Liabilities transferred: | |||||||||||||
Accounts payable | 77,675 | ||||||||||||
Accrued expenses | 6,075 | ||||||||||||
83,750 | |||||||||||||
Net assets sold | 2,908,222 | ||||||||||||
Pretax loss on the sale of AGC | $ | 908,222 | |||||||||||
Consolidated Condensed Balance Sheets [Member] | ' | ||||||||||||
Notes Tables | ' | ||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | ' | ||||||||||||
September 30, | |||||||||||||
2013 | |||||||||||||
Assets: | |||||||||||||
Cash and cash equivalents | $ | (110,068 | ) | ||||||||||
Accounts receivable, net | 629,874 | ||||||||||||
Income tax receivable | 13,590 | ||||||||||||
Inventories | 2,718,747 | ||||||||||||
Prepaid expenses | 15,774 | ||||||||||||
Current assets of discontinued operations held for sale | $ | 3,267,917 | |||||||||||
Property and equipment, at cost: | |||||||||||||
Land and building | $ | 1,585,594 | |||||||||||
Machinery and equipment | 134,010 | ||||||||||||
Less accumulated depreciation | (132,207 | ) | |||||||||||
Net property and equipment | 1,587,397 | ||||||||||||
Goodwill | 410,123 | ||||||||||||
Non-current assets of discontinued operations held for | $ | 1,997,520 | |||||||||||
sale | |||||||||||||
Liabilities: | |||||||||||||
Accounts payable | $ | 170,375 | |||||||||||
Accrued expenses | 56,382 | ||||||||||||
Current liabilities of discontinued operations held for sale | $ | 226,757 | |||||||||||
Consolidated Condensed Statements of Income [Member] | ' | ||||||||||||
Notes Tables | ' | ||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | ' | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Sales | $ | 972,935 | $ | 4,680,241 | $ | 5,539,225 | |||||||
Income (loss) before provision (benefit) for income taxes | (57,211 | ) | (164,207 | ) | 511,212 | ||||||||
Income tax provision (benefit) | (21,000 | ) | (62,000 | ) | 200,000 | ||||||||
Income (loss) from discontinued operations, net of tax | (36,211 | ) | (102,207 | ) | 311,212 | ||||||||
Loss on sale of discontinued operations | (993,835 | ) | − | − | |||||||||
Income tax benefit | (364,000 | ) | − | − | |||||||||
Loss on sale of discontinued operations, | (629,835 | ) | − | − | |||||||||
net of tax | |||||||||||||
Discontinued operations, net of tax | $ | (666,046 | ) | $ | (102,207 | ) | $ | 311,212 |
Note_4_Inventories_Tables
Note 4 - Inventories (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes Tables | ' | ||||||||
Schedule of Inventory, Current [Table Text Block] | ' | ||||||||
2014 | 2013 | ||||||||
New: | |||||||||
Cable TV | $ | 16,949,713 | $ | 15,679,789 | |||||
Refurbished: | |||||||||
Cable TV | 3,982,140 | 3,931,917 | |||||||
Telco | 4,005,298 | − | |||||||
Allowance for excess and obsolete inventory | (2,156,628 | ) | (1,600,000 | ) | |||||
$ | 22,780,523 | $ | 18,011,706 |
Note_5_Intangible_Assets_Table
Note 5 - Intangible Assets (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Notes Tables | ' | ||||||||||||
Schedule of Intangible Assets and Goodwill [Table Text Block] | ' | ||||||||||||
Gross | Accumulated | Net | |||||||||||
Amortization | |||||||||||||
Intangible assets: | |||||||||||||
Customer relationships – 10 years | $ | 4,257,000 | $ | (248,325 | ) | $ | 4,008,675 | ||||||
Technology – 7 years | 1,303,000 | (108,583 | ) | 1,194,417 | |||||||||
Trade name – 10 years | 1,293,000 | (75,425 | ) | 1,217,575 | |||||||||
Non-compete agreements – 3 years | 254,000 | (49,389 | ) | 204,611 | |||||||||
Total intangible assets | $ | 7,107,000 | $ | (481,722 | ) | $ | 6,625,278 | ||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | ' | ||||||||||||
2015 | $ | 825,810 | |||||||||||
2016 | 825,810 | ||||||||||||
2017 | 776,421 | ||||||||||||
2018 | 741,143 | ||||||||||||
2019 | 741,143 | ||||||||||||
Thereafter | 2,714,951 | ||||||||||||
Total | $ | 6,625,278 |
Note_6_Income_Taxes_Tables
Note 6 - Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Notes Tables | ' | ||||||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | ' | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Continuing operations: | |||||||||||||
Current | $ | 496,000 | $ | 1,113,351 | $ | 332,000 | |||||||
Deferred | (276,000 | ) | (15,000 | ) | 234,000 | ||||||||
220,000 | 1,098,351 | 566,000 | |||||||||||
Discontinued operations – current | (385,000 | ) | (62,000 | ) | 200,000 | ||||||||
Total provision (benefit) for income taxes | $ | (165,000 | ) | $ | 1,036,351 | $ | 766,000 | ||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | ' | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Statutory tax rate | 34 | % | 34 | % | 34 | % | |||||||
State income taxes, net of U.S. federal tax benefit | 5.7 | % | 4.3 | % | 4 | % | |||||||
Net operating loss | (10.2% | ) | (3.1% | ) | (6.0% | ) | |||||||
Additional state tax deduction for federal taxes | (5.6% | ) | − | − | |||||||||
Charges without tax benefit | 3.9 | % | 1.1 | % | 1.9 | % | |||||||
Tax credits and other exclusions | (2.8% | ) | 2.00% | 3.7 | % | ||||||||
Company’s effective tax rate | 25 | % | 38.3 | % | 37.6 | % | |||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | ' | ||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss carryforwards | $ | 335,000 | $ | 414,000 | |||||||||
Accounts receivable | 77,000 | 116,000 | |||||||||||
Inventory | 1,066,000 | 842,000 | |||||||||||
Intangibles | 79,000 | − | |||||||||||
Employee costs accruals | 141,000 | 122,000 | |||||||||||
Stock options | 163,000 | 114,000 | |||||||||||
Other, net | 16,000 | (4,000 | ) | ||||||||||
1,877,000 | 1,604,000 | ||||||||||||
Deferred tax liabilities: | |||||||||||||
Financial basis in excess of tax basis of certain assets | 728,000 | 731,000 | |||||||||||
Net deferred tax asset | $ | 1,149,000 | $ | 873,000 | |||||||||
2014 | 2013 | ||||||||||||
Deferred tax asset | $ | 1,416,000 | $ | 1,066,000 | |||||||||
– current | |||||||||||||
Deferred tax liability | (267,000 | ) | (193,000 | ) | |||||||||
– noncurrent | |||||||||||||
$ | 1,149,000 | $ | 873,000 |
Note_7_Accrued_Expenses_Tables
Note 7 - Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes Tables | ' | ||||||||
Schedule of Accrued Liabilities [Table Text Block] | ' | ||||||||
2014 | 2013 | ||||||||
Employee costs | $ | 1,089,754 | $ | 715,937 | |||||
Nave Earn-out | 356,513 | − | |||||||
Taxes other than income tax | 191,316 | 154,485 | |||||||
Interest | 18,563 | 996 | |||||||
Other, net | 153,732 | 7,056 | |||||||
$ | 1,809,878 | $ | 878,474 |
Note_8_Line_of_Credit_and_Note1
Note 8 - Line of Credit and Notes Payable (Tables) | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
Notes Tables | ' | ||||
Schedule of Maturities of Long-term Debt [Table Text Block] | ' | ||||
2015 | $ | 845,845 | |||
2016 | 874,388 | ||||
2017 | 899,234 | ||||
2018 | 908,945 | ||||
2019 | 2,143,600 | ||||
Thereafter | 413,899 | ||||
Total | $ | 6,085,911 |
Note_9_StockBased_Compensation1
Note 9 - Stock-Based Compensation and Preferred Stock (Tables) | 12 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Notes Tables | ' | |||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | ' | |||||||||||||||
Options | Weighted | Aggregate | ||||||||||||||
Average | Intrinsic | |||||||||||||||
Exercise | Value | |||||||||||||||
Price | ||||||||||||||||
Outstanding at September 30, 2013 | 363,000 | $ | 2.83 | |||||||||||||
Granted | 200,000 | $ | 3.21 | |||||||||||||
Exercised | − | $ | – | $ | 0 | |||||||||||
Expired | (3,000 | ) | $ | 4.4 | ||||||||||||
Forfeited | − | $ | − | |||||||||||||
Outstanding at September 30, 2014 | 560,000 | $ | 2.96 | $ | 0 | |||||||||||
Exercisable at September 30, 2014 | 160,000 | $ | 3.28 | $ | 0 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] | ' | |||||||||||||||
Exercisable | Remaining | |||||||||||||||
Stock Options | Stock Options | Contractual | ||||||||||||||
Exercise Price | Outstanding | Outstanding | Life (years) | |||||||||||||
$ | 3.21 | 200,000 | − | 9.5 | ||||||||||||
$ | 2.45 | 250,000 | 50,000 | 7.5 | ||||||||||||
$ | 3.001 | 65,000 | 65,000 | 3.9 | ||||||||||||
$ | 3.45 | 15,000 | 15,000 | 2.4 | ||||||||||||
$ | 5.78 | 15,000 | 15,000 | 1.4 | ||||||||||||
$ | 4.62 | 15,000 | 15,000 | 0.4 | ||||||||||||
560,000 | 160,000 | |||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | ' | |||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Estimated fair value of options at grant date | $244,400 | $29,040 | $267,925 | |||||||||||||
Black-Scholes model assumptions: | ||||||||||||||||
Average expected life (years) | 6 | 6 | 6 | |||||||||||||
Average expected volatility factor | 34% | 41% | 41% | |||||||||||||
Average risk-free interest rate | 2.79% | 2.95% | 2.99% | |||||||||||||
Average expected dividends yield | – | – | – | |||||||||||||
Employee Stock Option [Member] | ' | |||||||||||||||
Notes Tables | ' | |||||||||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | ' | |||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Fiscal year 2008 grant | $ | – | $ | – | $ | 3,562 | ||||||||||
Fiscal year 2012 grant | 55,369 | 95,560 | 61,176 | |||||||||||||
Fiscal year 2013 grant | − | 1,481 | − | |||||||||||||
Fiscal year 2014 grant | 74,678 | − | – | |||||||||||||
Total compensation expense | $ | 130,047 | $ | 97,041 | $ | 64,738 | ||||||||||
Restricted Stock [Member] | ' | |||||||||||||||
Notes Tables | ' | |||||||||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | ' | |||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Fiscal year 2011 grant | $ | – | $ | – | $ | 95,833 | ||||||||||
Fiscal year 2012 grant | − | 29,167 | 40,833 | |||||||||||||
Fiscal year 2013 grant | 29,167 | 40,833 | − | |||||||||||||
Fiscal year 2014 grant | 53,222 | – | – | |||||||||||||
$ | 82,389 | $ | 70,000 | $ | 136,666 |
Note_11_Earnings_per_Share_Tab
Note 11 - Earnings per Share (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Notes Tables | ' | ||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Income from continuing operations | $ | 659,189 | $ | 1,771,923 | $ | 939,280 | |||||||
Discontinued operations, net of tax | (666,046 | ) | (102,207 | ) | 311,212 | ||||||||
Net income (loss) attributable to common shareholders | $ | (6,857 | ) | $ | 1,669,716 | $ | 1,250,492 | ||||||
Basic weighted average shares | 10,021,431 | 10,052,359 | 10,196,241 | ||||||||||
Effect of dilutive securities: | |||||||||||||
Stock options | 28,009 | – | 1,255 | ||||||||||
Diluted weighted average shares | 10,049,440 | 10,052,359 | 10,197,496 | ||||||||||
Earnings (loss) per common share: | |||||||||||||
Basic | |||||||||||||
Continuing operations | $ | 0.07 | $ | 0.18 | $ | 0.09 | |||||||
Discontinued operations | (0.07 | ) | (0.01 | ) | 0.03 | ||||||||
Net income (loss) | $ | (0.00 | ) | $ | 0.17 | $ | 0.12 | ||||||
Diluted | |||||||||||||
Continuing operations | $ | 0.07 | $ | 0.18 | $ | 0.09 | |||||||
Discontinued operations | (0.07 | ) | (0.01 | ) | 0.03 | ||||||||
Net income (loss) | $ | (0.00 | ) | $ | 0.17 | $ | 0.12 | ||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | ' | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Stock options excluded | 310,000 | 363,000 | 368,000 | ||||||||||
Weighted average exercise price of | $ | 3.37 | $ | 2.83 | $ | 2.84 | |||||||
stock options | |||||||||||||
Average market price of common stock | $ | 2.76 | $ | 2.24 | $ | 2.22 |
Note_13_Commitments_and_Contin1
Note 13 - Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
Notes Tables | ' | ||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | ' | ||||
2015 | $ | 494,170 | |||
2016 | 502,250 | ||||
2017 | 514,806 | ||||
2018 | 527,676 | ||||
2019 | 540,868 | ||||
Thereafter | 2,402,023 | ||||
Total | $ | 4,981,793 |
Note_14_Segment_Reporting_Tabl
Note 14 - Segment Reporting (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Notes Tables | ' | ||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | ' | ||||||||||||
Fiscal Years Ended | |||||||||||||
September 30, | September 30, | September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||||
Sales | |||||||||||||
Cable TV | $ | 27,206,743 | $ | 28,677,351 | $ | 29,677,178 | |||||||
Telco | 8,710,267 | − | − | ||||||||||
Intersegment | (28,318 | ) | − | − | |||||||||
Total sales | $ | 35,888,692 | $ | 28,677,351 | $ | 29,677,178 | |||||||
Gross profit | |||||||||||||
Cable TV | $ | 7,770,723 | $ | 8,709,317 | $ | 8,557,928 | |||||||
Telco | 3,834,733 | − | − | ||||||||||
Total gross profit | $ | 11,605,456 | $ | 8,709,317 | $ | 8,557,928 | |||||||
Operating income (loss) | |||||||||||||
Cable TV | $ | 1,492,100 | $ | 2,896,254 | $ | 2,619,134 | |||||||
Telco | (395,001 | ) | − | − | |||||||||
Total operating income (loss) | $ | 1,097,099 | $ | 2,896,254 | $ | 2,619,134 | |||||||
Segment assets | |||||||||||||
Cable TV | $ | 29,241,335 | $ | 27,582,573 | $ | 29,625,943 | |||||||
Telco | 17,781,114 | − | − | ||||||||||
Non-allocated (A) | 6,383,232 | 15,533,547 | 12,406,983 | ||||||||||
Total assets | $ | 53,405,681 | $ | 43,116,120 | $ | 42,032,926 |
Note_15_Quarterly_Results_of_O1
Note 15 - Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Notes Tables | ' | ||||||||||||||||
Schedule of Quarterly Financial Information [Table Text Block] | ' | ||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Fiscal year ended 2014 | |||||||||||||||||
Sales | $ | 6,119,733 | $ | 8,313,815 | $ | 9,323,158 | $ | 12,131,986 | |||||||||
Gross profit | $ | 1,863,227 | $ | 2,231,167 | $ | 3,220,055 | $ | 4,291,007 | |||||||||
Income (loss) from continuing | $ | 139,369 | $ | (243,264 | ) | $ | 143,726 | $ | 619,358 | ||||||||
operations | |||||||||||||||||
Basic earnings (loss) from | $ | 0.01 | $ | (0.02 | ) | $ | 0.01 | $ | 0.06 | ||||||||
continuing operations per | |||||||||||||||||
common share | |||||||||||||||||
Diluted earnings (loss) from | $ | 0.01 | $ | (0.02 | ) | $ | 0.01 | $ | 0.06 | ||||||||
continuing operations per | |||||||||||||||||
common share | |||||||||||||||||
Fiscal year ended 2013 | |||||||||||||||||
Sales | $ | 7,899,497 | $ | 6,764,102 | $ | 6,372,108 | $ | 7,641,644 | |||||||||
Gross profit | $ | 2,618,724 | $ | 1,866,352 | $ | 1,851,855 | $ | 2,372,386 | |||||||||
Income from continuing | $ | 660,291 | $ | 292,994 | $ | 269,984 | $ | 548,654 | |||||||||
operations | |||||||||||||||||
Basic earnings from | $ | 0.07 | $ | 0.03 | $ | 0.03 | $ | 0.05 | |||||||||
continuing operations per | |||||||||||||||||
common share | |||||||||||||||||
Diluted earnings from | $ | 0.07 | $ | 0.03 | $ | 0.03 | $ | 0.05 | |||||||||
continuing operations per | |||||||||||||||||
common share | |||||||||||||||||
Fiscal year ended 2012 | |||||||||||||||||
Sales | $ | 7,727,233 | $ | 7,891,316 | $ | 6,461,710 | $ | 7,596,919 | |||||||||
Gross profit | $ | 2,283,982 | $ | 2,141,147 | $ | 2,063,219 | $ | 2,069,580 | |||||||||
Income (loss) from continuing | $ | 387,391 | $ | (127,570 | ) | $ | 348,083 | $ | 331,376 | ||||||||
operations | |||||||||||||||||
Basic earnings (loss) from | $ | 0.04 | $ | (0.01 | ) | $ | 0.03 | $ | 0.03 | ||||||||
continuing operations per | |||||||||||||||||
common share | |||||||||||||||||
Diluted earnings (loss) from | $ | 0.04 | $ | (0.01 | ) | $ | 0.03 | $ | 0.03 | ||||||||
continuing operations per | |||||||||||||||||
common share |
Note_16_Schedule_II_Valuation_1
Note 16 - Schedule II - Valuation and Qualifying Accounts (Tables) | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Notes Tables | ' | ||||||||||||||||||||
Summary of Valuation Allowance [Table Text Block] | ' | ||||||||||||||||||||
Balance at | Charged to | Balance at | |||||||||||||||||||
Beginning | Costs and | End | |||||||||||||||||||
of Year | Expenses | Write offs | Recoveries | of Year | |||||||||||||||||
Year Ended September 30, 2014 | |||||||||||||||||||||
Allowance for Doubtful Accounts | $ | 300,000 | – | (103,403 | ) | 3,403 | $ | 200,000 | |||||||||||||
Allowance for Excess and Obsolete Inventory | $ | 1,600,000 | 601,351 | (208,056 | ) | 163,333 | $ | 2,156,628 | |||||||||||||
Year Ended September 30, 2013 | |||||||||||||||||||||
Allowance for Doubtful Accounts | $ | 300,000 | – | (5,692 | ) | 5,692 | $ | 300,000 | |||||||||||||
Allowance for Excess and Obsolete Inventory | $ | 1,000,000 | 1,044,913 | (294,913 | ) | – | $ | 1,750,000 | |||||||||||||
Year Ended September 30, 2012 | |||||||||||||||||||||
Allowance for Doubtful Accounts | $ | 300,000 | – | (2,404 | ) | 2,404 | $ | 300,000 | |||||||||||||
Allowance for Excess and Obsolete Inventory | $ | 1,556,000 | 580,587 | (1,136,587 | ) | – | $ | 1,000,000 |
Note_1_Summary_of_Significant_1
Note 1 - Summary of Significant Accounting Policies (Details Textual) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Accounting Policies [Abstract] | ' | ' | ' |
Depreciation, Depletion and Amortization | $0.40 | $0.30 | $0.30 |
Advertising Expense | 0.1 | ' | ' |
Maximum [Member] | ' | ' | ' |
Accounting Policies [Abstract] | ' | ' | ' |
Finite-Lived Intangible Asset, Useful Life | '10 years | ' | ' |
Minimum [Member] | ' | ' | ' |
Accounting Policies [Abstract] | ' | ' | ' |
Finite-Lived Intangible Asset, Useful Life | '3 years | ' | ' |
Building [Member] | ' | ' | ' |
Accounting Policies [Abstract] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '40 years | ' | ' |
Office Equipment [Member] | ' | ' | ' |
Accounting Policies [Abstract] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '5 years | ' | ' |
Software and Software Development Costs [Member] | ' | ' | ' |
Accounting Policies [Abstract] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '3 years | ' | ' |
Warehouse and Service Equipment [Member] | ' | ' | ' |
Accounting Policies [Abstract] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '10 years | ' | ' |
Non-US Based Customer [Member] | ' | ' | ' |
Accounting Policies [Abstract] | ' | ' | ' |
Revenues | $3.60 | $1.10 | $1.40 |
Supplier Concentration Risk [Member] | Arris Solutions, Inc [Member] | ' | ' | ' |
Accounting Policies [Abstract] | ' | ' | ' |
Concentration Risk, Percentage | 32.00% | ' | ' |
Supplier Concentration Risk [Member] | Cisco [Member] | ' | ' | ' |
Accounting Policies [Abstract] | ' | ' | ' |
Concentration Risk, Percentage | 14.00% | ' | ' |
Supplier Concentration Risk [Member] | Windstream [Member] | ' | ' | ' |
Accounting Policies [Abstract] | ' | ' | ' |
Concentration Risk, Percentage | 13.00% | ' | ' |
Note_2_Acquisition_Details_Tex
Note 2 - Acquisition (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 31, 2014 | Oct. 02, 2012 | Feb. 28, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Feb. 28, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Term Loan 2 [Member] | Term Loan 2 [Member] | Nave Communications [Member] | Nave Communications [Member] | Nave Communications [Member] | Nave Communications [Member] | Other Current Liabilities [Member] | Other Noncurrent Liabilities [Member] | ||||
Pro Forma [Member] | Pro Forma [Member] | Pro Forma [Member] | Minimum [Member] | Nave Communications [Member] | Nave Communications [Member] | ||||||
Business Combination, Contingent Consideration, Liability | ' | ' | ' | ' | ' | $3,000,000 | ' | ' | ' | $1,000,000 | $1,800,000 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | ' | ' | ' | ' | ' | 7,107,000 | ' | ' | ' | ' | ' |
Business Combination Contingent Consideration Earnout Payments as Percentage of Acquirees Annual EBITDA in Excess of Threshold | ' | ' | ' | ' | ' | 70.00% | ' | ' | ' | ' | ' |
Earnings before Interest Taxes Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' |
Amortization of Intangible Assets | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' | ' |
Interest Expense | 217,910 | 25,980 | 1,113,854 | ' | ' | ' | 200,000 | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | ' | 5,000,000 | 5,000,000 | ' | ' | ' | ' | ' | ' |
Business Combination, Acquisition Related Costs | ' | ' | ' | ' | ' | ' | ' | $600,000 | ' | ' | ' |
Note_2_Preliminary_Estimated_P
Note 2 - Preliminary Estimated Price for Nave Communications (Details) (USD $) | 0 Months Ended | |
Feb. 28, 2014 | ||
Nave Communications [Member] | ||
Cash payments, net of cash received | $9,630,647 | |
Deferred guaranteed payments (a) | 2,744,338 | [1] |
Net purchase price | $12,374,985 | |
[1] | This amount represents the present value of $3.0 million in deferred payments, which will be paid in equal annual installments over the next three years. Over the three year period, the Company will ratably record interest expense with the offset being the deferred payment liability. As of September 30, 2014, the deferred guaranteed payments balance is $1.0 million in other current liabilities and $1.8 million in other long-term liabilities. |
Note_2_Fair_Value_of_Assets_Ac
Note 2 - Fair Value of Assets Acquired and Liabilities Assumed (Details) (USD $) | 0 Months Ended |
Feb. 28, 2014 | |
Nave Communications [Member] | |
Cash and cash equivalents | $113,000 |
Accounts receivable | 1,651,000 |
Inventories | 2,503,000 |
Property and equipment | 406,000 |
Other non-current assets | 120,000 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 7,107,000 |
Goodwill | 2,760,000 |
Total assets acquired | 14,660,000 |
Liabilities assumed: | ' |
Accounts payable | 1,821,000 |
Accrued expenses | 275,000 |
Capital lease obligation b current portion | 21,000 |
Capital lease obligation | 55,000 |
Total liabilities assumed | 2,172,000 |
Net assets acquired | 12,488,000 |
Less cash acquired | 113,000 |
Net purchase price | $12,374,985 |
Note_2_Unaudited_Pro_Forma_Fin
Note 2 - Unaudited Pro Forma Financial Information (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Sales | $41,983 | $41,701 |
Income from continuing operations | 1,275 | 1,881 |
Net income | $609 | $1,779 |
Earnings per share: | ' | ' |
Continuing operations (in dollars per share) | $0.13 | $0.19 |
Net income (in dollars per share) | $0.06 | $0.18 |
Continuing operations (in dollars per share) | $0.13 | $0.19 |
Net income (in dollars per share) | $0.06 | $0.18 |
Note_3_Discontinued_Operations2
Note 3 - Discontinued Operations and Assets Held for Sale (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | |
Sep. 30, 2013 | Jun. 30, 2014 | Jan. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Jan. 31, 2014 | |
AGC Facility [Member] | Adams Global Communications [Member] | Adams Global Communications [Member] | Adams Global Communications [Member] | Adams Cable Equipment [Member] | ||
Adams Global Communications [Member] | ||||||
Proceeds from Divestiture of Interest in Consolidated Subsidiaries | ' | ' | ' | ' | ' | $2,000,000 |
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | ' | ' | ' | ' | ' | -600,000 |
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment | ' | 1,500,000 | 60,586 | ' | 1,587,397 | ' |
Proceeds from Sale of Property, Plant, and Equipment | 12,350 | 1,400,000 | ' | ' | ' | ' |
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | ' | ($100,000) | $908,222 | ($993,835) | ' | ' |
Note_3_Calculation_of_the_Loss
Note 3 - Calculation of the Loss on Sale of AGC (Details) (Adams Global Communications [Member], USD $) | 0 Months Ended |
Jan. 31, 2014 | |
Adams Global Communications [Member] | ' |
Cash proceeds | $2,000,000 |
Accounts receivable | 454,269 |
Inventories | 2,044,135 |
Prepaid expenses | 12,054 |
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment | 60,586 |
Goodwill | 410,123 |
Other | 10,805 |
2,991,972 | |
Accounts payable | 77,675 |
Accrued expenses | 6,075 |
83,750 | |
Net assets sold | 2,908,222 |
Pretax loss on the sale of AGC | $908,222 |
Note_3_Discontinued_Operations3
Note 3 - Discontinued Operations and Assets Held for Sale - Assets and Liabilities Included in Discontinued Operations (Details) (USD $) | Sep. 30, 2013 |
Assets: | ' |
Current assets of discontinued operations held for sale | $3,267,917 |
Liabilities: | ' |
Current liabilities of discontinued operations held for sale | 226,757 |
Adams Global Communications [Member] | ' |
Assets: | ' |
Cash and cash equivalents | -110,068 |
Accounts receivable | 629,874 |
Income tax receivable | 13,590 |
Inventories | 2,718,747 |
Prepaid expenses | 15,774 |
Current assets of discontinued operations held for sale | 3,267,917 |
Property and equipment, at cost: | ' |
Less accumulated depreciation | -132,207 |
Net property and equipment | 1,587,397 |
Goodwill | 410,123 |
Non-current assets of discontinued operations held for sale | 1,997,520 |
Liabilities: | ' |
Accounts payable | 170,375 |
Accrued expenses | 56,382 |
Current liabilities of discontinued operations held for sale | 226,757 |
Adams Global Communications [Member] | Land and Building [Member] | ' |
Property and equipment, at cost: | ' |
Land and building | 1,585,594 |
Adams Global Communications [Member] | Machinery and Equipment [Member] | ' |
Property and equipment, at cost: | ' |
Land and building | $134,010 |
Note_3_Discontinued_Operations4
Note 3 - Discontinued Operations and Assets Held for Sale - Income (Loss) from Discontinued Operations and Loss on Sale of Discontinued Operations (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Loss on sale of discontinued operations, net of tax | ($629,835) | ' | ' |
Discontinued operations, net of tax | -666,046 | -102,207 | 311,212 |
Adams Global Communications [Member] | ' | ' | ' |
Sales | 972,935 | 4,680,241 | 5,539,225 |
Income (loss) before provision (benefit) for income taxes | -57,211 | -164,207 | 511,212 |
Income tax provision (benefit) | -21,000 | -62,000 | 200,000 |
Income (loss) from discontinued operations, net of tax | -36,211 | -102,207 | 311,212 |
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | -993,835 | ' | ' |
Income tax benefit | -364,000 | ' | ' |
Loss on sale of discontinued operations, net of tax | -629,835 | ' | ' |
Discontinued operations, net of tax | ($666,046) | ($102,207) | $311,212 |
Note_4_Inventories_Details_Tex
Note 4 - Inventories (Details Textual) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Inventory Write-down | $601,351 | $600,000 | $580,587 |
Note_4_Inventories_Inventories
Note 4 - Inventories - Inventories (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
New: | ' | ' |
Cable TV | $16,949,713 | $15,679,789 |
Refurbished: | ' | ' |
Cable TV | 3,982,140 | 3,931,917 |
Telco | 4,005,298 | ' |
Allowance for excess and obsolete inventory | -2,156,628 | -1,600,000 |
$22,780,523 | $18,011,706 |
Note_5_Intangible_Assets_Intan
Note 5 - Intangible Assets - Intangible Assets (Details) (USD $) | Sep. 30, 2014 |
Gross | $7,107,000 |
Accumulated amortization | -481,722 |
Net | 6,625,278 |
Customer Relationships [Member] | ' |
Gross | 4,257,000 |
Accumulated amortization | -248,325 |
Net | 4,008,675 |
Noncompete Agreements [Member] | ' |
Gross | 254,000 |
Accumulated amortization | -49,389 |
Net | 204,611 |
Technology-Based Intangible Assets [Member] | ' |
Gross | 1,303,000 |
Accumulated amortization | -108,583 |
Net | 1,194,417 |
Trade Names [Member] | ' |
Gross | 1,293,000 |
Accumulated amortization | -75,425 |
Net | $1,217,575 |
Note_5_Intangible_Assets_Intan1
Note 5 - Intangible Assets - Intangible Assets (Details) (Parentheticals) | 12 Months Ended |
Sep. 30, 2014 | |
Customer Relationships [Member] | ' |
Finite-Lived Intangible Asset, Useful Life | '10 years |
Noncompete Agreements [Member] | ' |
Finite-Lived Intangible Asset, Useful Life | '3 years |
Technology-Based Intangible Assets [Member] | ' |
Finite-Lived Intangible Asset, Useful Life | '7 years |
Trade Names [Member] | ' |
Finite-Lived Intangible Asset, Useful Life | '10 years |
Note_5_Intangible_Assets_Futur
Note 5 - Intangible Assets - Future Amortization Expense (Details) (USD $) | Sep. 30, 2014 |
2015 | $825,810 |
2016 | 825,810 |
2017 | 776,421 |
2018 | 741,143 |
2019 | 741,143 |
Thereafter | 2,714,951 |
Total | $6,625,278 |
Note_6_Income_Taxes_Details_Te
Note 6 - Income Taxes (Details Textual) (USD $) | Sep. 30, 2014 |
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration | $0.80 |
Annual Deductible Amount of Operating Loss Carryforward Limit, Amount | $0.30 |
Note_6_Income_Taxes_Provision_
Note 6 - Income Taxes - Provision (Benefit) for Income Taxes (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Continuing operations: | ' | ' | ' |
Current | $496,000 | $1,113,351 | $332,000 |
Deferred | -276,000 | -15,000 | 234,000 |
220,000 | 1,098,351 | 566,000 | |
Discontinued operations b current | -385,000 | -62,000 | 200,000 |
Total provision (benefit) for income taxes | ($165,000) | $1,036,351 | $766,000 |
Note_6_Income_Taxes_Summary_of
Note 6 - Income Taxes - Summary of Differences Between U.S. Federal Statutory Rate and Company's Effective Tax Rate (Details) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Statutory tax rate | 34.00% | 34.00% | 34.00% |
State income taxes, net of U.S. federal tax benefit | 5.70% | 4.30% | 4.00% |
Net operating loss | -10.20% | -3.10% | -6.00% |
Additional state tax deduction for federal taxes | -5.60% | ' | ' |
Charges without tax benefit | 3.90% | 1.10% | 1.90% |
Tax credits and other exclusions | -2.80% | 2.00% | 3.70% |
Companybs effective tax rate | 25.00% | 38.30% | 37.60% |
Note_6_Income_Taxes_Deferred_T
Note 6 - Income Taxes - Deferred Tax Assets (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Deferred tax assets: | ' | ' |
Net operating loss carryforwards | $335,000 | $414,000 |
Accounts receivable | 77,000 | 116,000 |
Inventory | 1,066,000 | 842,000 |
Intangibles | 79,000 | ' |
Employee costs accruals | 141,000 | 122,000 |
Stock options | 163,000 | 114,000 |
Other, net | 16,000 | -4,000 |
1,877,000 | 1,604,000 | |
Deferred tax liabilities: | ' | ' |
Financial basis in excess of tax basis of certain assets | 728,000 | 731,000 |
Net deferred tax asset | 1,149,000 | 873,000 |
Deferred tax asset b current | 1,416,000 | 1,066,000 |
Deferred tax liability b noncurrent | ($267,000) | ($193,000) |
Note_7_Accrued_Expenses_Accrue
Note 7 - Accrued Expenses - Accrued Expenses (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Employee costs | $1,089,754 | $715,937 |
Nave Earn-out | 356,513 | ' |
Taxes other than income tax | 191,316 | 154,485 |
Interest | 18,563 | 996 |
Other, net | 153,732 | 7,056 |
$1,809,878 | $878,474 |
Note_8_Line_of_Credit_and_Note2
Note 8 - Line of Credit and Notes Payable (Details Textual) (USD $) | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jan. 31, 2014 | Sep. 30, 2014 |
Line of Credit [Member] | Line of Credit [Member] | Capital Lease Obligations [Member] | Term Loan 1 [Member] | Term Loan 1 [Member] | Term Loan 2 [Member] | Term Loan 2 [Member] | ||
London Interbank Offered Rate (LIBOR) [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Loans Payable | ' | ' | ' | ' | $1,300,000 | ' | ' | $4,700,000 |
Debt Instrument, Periodic Payment | ' | ' | ' | 2,069 | 15,334 | ' | 68,505 | ' |
Debt Instrument, Basis Spread on Variable Rate | ' | ' | 2.75% | ' | ' | 1.40% | ' | ' |
Debt Instrument, Interest Rate, Effective Percentage | ' | 2.91% | ' | ' | 1.58% | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | 5,000,000 | ' |
Debt Instrument, Term | ' | ' | ' | ' | ' | ' | '5 years | ' |
Debt Instrument Amortization Term | ' | ' | ' | ' | ' | ' | '7 years | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | ' | 4.07% | ' |
Capital Lease Obligations | 64,000 | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | 7,000,000 | ' | ' | ' | ' | ' | ' |
Percentage Of Qualified Accounts Receivable Used In Determination Of Maximum Borrowing Capacity Of Line Of Credit | ' | 80.00% | ' | ' | ' | ' | ' | ' |
Percentage Of Qualified Inventory Used In Determination Of Maximum Borrowing Capacity Of Line Of Credit | ' | 50.00% | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Current Borrowing Capacity | ' | 7,000,000 | ' | ' | ' | ' | ' | ' |
Fixed Charge Coverage Ratio | ' | 1.25 | ' | ' | ' | ' | ' | ' |
Debt Instrument, Fair Value Disclosure | ' | ' | ' | ' | ' | ' | ' | $4,700,000 |
Note_8_Line_of_Credit_and_Note3
Note 8 - Line of Credit and Notes Payable - Aggregate Minimum Maturities of Notes Payable (Details) (USD $) | Sep. 30, 2014 |
2015 | $845,845 |
2016 | 874,388 |
2017 | 899,234 |
2018 | 908,945 |
2019 | 2,143,600 |
Thereafter | 413,899 |
Total | $6,085,911 |
Note_9_StockBased_Compensation2
Note 9 - Stock-Based Compensation and Preferred Stock (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2012 | Sep. 30, 2014 | Apr. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Board Of Directors [Member] | Board Of Directors [Member] | Board Of Directors [Member] | Board Of Directors [Member] | Certain Employees [Member] | Employees [Member] | Nonqualified Stock Options [Member] | Nonqualified Stock Options [Member] | Nonqualified Stock Options [Member] | ||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage Increase In Number Of Shares Of Incentive Stock Plan Upon Issuance Of Additional Shares | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 40,415 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Options Expiration Period | ' | ' | ' | ' | ' | ' | '10 years | ' | '10 years | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $0 | $940 | $2,640 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 30,000 | 250,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | 225,543 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Restricted Stock Award, Gross | ' | ' | ' | 19,050 | 31,815 | 31,969 | ' | 23,676 | ' | ' | ' | ' |
Restricted Stock Holding Period | ' | ' | ' | '1 year | ' | ' | ' | '3 years | ' | ' | ' | ' |
Fair Value Of Restricted Shares Upon Issuance | ' | ' | ' | $60,000 | $70,000 | $70,000 | ' | $76,000 | ' | ' | ' | ' |
Holding Restriction, Annual Expiration of Restricted Stock | ' | ' | ' | ' | ' | ' | ' | 7,892 | ' | ' | ' | ' |
Note_9_StockBased_Compensation3
Note 9 - Stock-Based Compensation and Preferred Stock - Summary of Status of the Company's Stock Options (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Outstanding at September 30, 2013 (in shares) | 560,000 | 363,000 |
Outstanding at September 30, 2013 (in dollars per share) | $2.96 | $2.83 |
Granted (in shares) | 200,000 | ' |
Granted (in dollars per share) | $3.21 | ' |
Exercised | $0 | $940 |
Expired (in shares) | -3,000 | ' |
Expired (in dollars per share) | $4.40 | ' |
Outstanding at September 30, 2014 | 0 | ' |
Exercisable at September 30, 2014 (in shares) | 160,000 | ' |
Exercisable at September 30, 2014 (in dollars per share) | $3.28 | ' |
Exercisable at September 30, 2014 | $0 | ' |
Note_9_StockBased_Compensation4
Note 9 - Stock-Based Compensation and Preferred Stock - Outstanding and Exercisable Stock Options (Details) (USD $) | 12 Months Ended |
Sep. 30, 2014 | |
Shares outstanding (in shares) | 560,000 |
Shares exercisable (in shares) | 160,000 |
Exercise Price Range 5 [Member] | ' |
Exercise price (in dollars per share) | $5.78 |
Shares outstanding (in shares) | 15,000 |
Remaining contractual life | '1 year 146 days |
Shares exercisable (in shares) | 15,000 |
Exercise Price Range 4 [Member] | ' |
Exercise price (in dollars per share) | $3.45 |
Shares outstanding (in shares) | 15,000 |
Remaining contractual life | '2 years 146 days |
Shares exercisable (in shares) | 15,000 |
Exercise Price Range 1 [Member] | ' |
Exercise price (in dollars per share) | $3.21 |
Shares outstanding (in shares) | 200,000 |
Remaining contractual life | '9 years 182 days |
Exercise Price Range 6 [Member] | ' |
Exercise price (in dollars per share) | $4.62 |
Shares outstanding (in shares) | 15,000 |
Remaining contractual life | '146 days |
Shares exercisable (in shares) | 15,000 |
Exercise Price Range 3 [Member] | ' |
Exercise price (in dollars per share) | $3.00 |
Shares outstanding (in shares) | 65,000 |
Remaining contractual life | '3 years 328 days |
Shares exercisable (in shares) | 65,000 |
Exercise Price Range 2 [Member] | ' |
Exercise price (in dollars per share) | $2.45 |
Shares outstanding (in shares) | 250,000 |
Remaining contractual life | '7 years 182 days |
Shares exercisable (in shares) | 50,000 |
Note_9_StockBased_Compensation5
Note 9 - Stock-Based Compensation and Preferred Stock - Black-Scholes Option Valuation Model Assumptions (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Estimated fair value of options at grant date (in dollars per share) | $244,400 | $29,040 | $267,925 |
Black-Scholes model assumptions: | ' | ' | ' |
Average expected life (years) | '6 years | '6 years | '6 years |
Average expected volatility factor | 34.00% | 41.00% | 41.00% |
Average risk-free interest rate | 2.79% | 2.95% | 2.99% |
Note_9_StockBased_Compensation6
Note 9 - Stock-Based Compensation and Preferred Stock - Compensation Expense Related to Stock Options (Details) (Employee Stock Option [Member], USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Compensation expense | $130,047 | $97,041 | $64,738 |
Fiscal Year 2008 Grant [Member] | ' | ' | ' |
Compensation expense | ' | ' | 3,562 |
Fiscal Year 2012 Grant [Member] | ' | ' | ' |
Compensation expense | 55,369 | 95,560 | 61,176 |
Fiscal Year 2013 Grant [Member] | ' | ' | ' |
Compensation expense | ' | 1,481 | ' |
Fiscal Year 2014 Grant [Member] | ' | ' | ' |
Compensation expense | $74,678 | ' | ' |
Note_9_StockBased_Compensation7
Note 9 - Stock-Based Compensation and Preferred Stock - Compensation Expense Related to Restricted Stock (Details) (Restricted Stock [Member], USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Compensation expense | $82,389 | $70,000 | $136,666 |
Fiscal Year 2011 Grant [Member] | ' | ' | ' |
Compensation expense | ' | ' | 95,833 |
Fiscal Year 2012 Grant [Member] | ' | ' | ' |
Compensation expense | ' | 29,167 | 40,833 |
Fiscal Year 2013 Grant [Member] | ' | ' | ' |
Compensation expense | 29,167 | 40,833 | ' |
Fiscal Year 2014 Grant [Member] | ' | ' | ' |
Compensation expense | $53,222 | ' | ' |
Note_10_Retirement_Plan_Detail
Note 10 - Retirement Plan (Details Textual) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Compensation and Retirement Disclosure [Abstract] | ' |
Number of Years of Employee Service Required to Be Eligible for 401k Plan | '1 year |
Defined Contribution Plan, Cost Recognized | $0.20 |
Note_11_Earnings_Per_Share_Bas
Note 11 - Earnings Per Share - Basic and Diluted Earnings Per Share (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2012 | |
Income from continuing operations | $659,189 | $939,280 |
Discontinued operations, net of tax | -666,046 | 311,212 |
Net income (loss) attributable to common shareholders | ($6,857) | $1,250,492 |
Basic weighted average shares (in shares) | 10,021,431 | 10,196,241 |
Effect of dilutive securities: | ' | ' |
Stock options (in shares) | 28,009 | 1,255 |
Diluted weighted average shares (in shares) | 10,049,440 | 10,197,496 |
Basic | ' | ' |
Continuing operations (in dollars per share) | $0.07 | $0.09 |
Discontinued operations (in dollars per share) | ($0.07) | $0.03 |
Net income (loss) (in dollars per share) | $0 | $0.12 |
Diluted | ' | ' |
Continuing operations (in dollars per share) | $0.07 | $0.09 |
Discontinued operations (in dollars per share) | ($0.07) | $0.03 |
Net income (loss) (in dollars per share) | $0 | $0.12 |
Note_11_Earnings_per_Share_Ant
Note 11 - Earnings per Share - Anti-dilutive Securities (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Stock options excluded (in shares) | 310,000 | 363,000 | 368,000 |
Weighted average exercise price of stock options (in dollars per share) | $3.37 | $2.83 | $2.84 |
Average market price of common stock (in dollars per share) | $2.76 | $2.24 | $2.22 |
Note_12_Related_Parties_Detail
Note 12 - Related Parties (Details Textual) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2014 | Sep. 30, 2014 |
David E. Chhymiak [Member] | Kenneth A. Chymiak [Member] | ||
Related Party Transactions [Abstract] | ' | ' | ' |
Related Party Transaction, Expenses from Transactions with Related Party | $0.10 | ' | ' |
Percentage of Outstanding Common Stock Owned by a Related Party | ' | 26.00% | 22.00% |
Note_13_Commitments_and_Contin2
Note 13 - Commitments and Contingencies (Details Textual) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Commitments and Contingencies Disclosure [Abstract] | ' | ' | ' |
Operating Leases, Rent Expense | $400,000 | $37,000 | $200,000 |
Note_13_Commitments_and_Contin3
Note 13 - Commitments and Contingencies - Minimum Annual Future Obligations for Operating Leases (Details) (USD $) | Sep. 30, 2014 |
2015 | $494,170 |
2016 | 502,250 |
2017 | 514,806 |
2018 | 527,676 |
2019 | 540,868 |
Thereafter | 2,402,023 |
Total | $4,981,793 |
Note_14_Segment_Reporting_Deta
Note 14 - Segment Reporting (Details Textual) (Adams Global Communications [Member], USD $) | Sep. 30, 2014 | Jan. 31, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Adams Global Communications [Member] | ' | ' | ' | ' |
Segments, Geographical Areas [Abstract] | ' | ' | ' | ' |
Disposal Group, Including Discontinued Operation, Assets | $0 | $2,991,972 | $5,300,000 | $5,500,000 |
Note_14_Segment_Reporting_Segm
Note 14 - Segment Reporting - Segment Reporting Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Sales | $12,131,986 | $7,641,644 | $7,596,919 | $35,888,692 | $28,677,351 | $29,677,178 |
Gross profit | ' | ' | ' | ' | ' | ' |
Gross profit | 4,291,007 | 2,372,386 | 2,069,580 | 11,605,456 | 8,709,317 | 8,557,928 |
Operating income (loss) | ' | ' | ' | ' | ' | ' |
Cable TV | ' | ' | ' | 1,097,099 | 2,896,254 | 2,619,134 |
Segment assets | ' | ' | ' | ' | ' | ' |
Cable TV | 53,405,681 | 43,116,120 | 42,032,926 | 53,405,681 | 43,116,120 | 42,032,926 |
Corporate, Non-Segment [Member] | ' | ' | ' | ' | ' | ' |
Segment assets | ' | ' | ' | ' | ' | ' |
Cable TV | 6,383,232 | 15,533,547 | 12,406,983 | 6,383,232 | 15,533,547 | 12,406,983 |
Intersegment Eliminations [Member] | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | -28,318 | ' | ' |
Operating Segments [Member] | Cable TV [Member] | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | 27,206,743 | 28,677,351 | 29,677,178 |
Gross profit | ' | ' | ' | ' | ' | ' |
Gross profit | ' | ' | ' | 7,770,723 | 8,709,317 | 8,557,928 |
Operating income (loss) | ' | ' | ' | ' | ' | ' |
Cable TV | ' | ' | ' | 1,492,100 | 2,896,254 | 2,619,134 |
Segment assets | ' | ' | ' | ' | ' | ' |
Cable TV | 29,241,335 | 27,582,573 | 29,625,943 | 29,241,335 | 27,582,573 | 29,625,943 |
Operating Segments [Member] | Telco [Member] | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | 8,710,267 | ' | ' |
Gross profit | ' | ' | ' | ' | ' | ' |
Gross profit | ' | ' | ' | 3,834,733 | ' | ' |
Operating income (loss) | ' | ' | ' | ' | ' | ' |
Cable TV | ' | ' | ' | -395,001 | ' | ' |
Segment assets | ' | ' | ' | ' | ' | ' |
Cable TV | $17,781,114 | ' | ' | $17,781,114 | ' | ' |
Note_15_Quarterly_Results_of_O2
Note 15 - Quarterly Results of Operations (Unaudited) - Summary of Quarterly Results of Operations (Details) (USD $) | 3 Months Ended | |||||||||||
Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | |
Sales | $12,131,986 | $9,323,158 | $8,313,815 | $6,119,733 | $7,641,644 | $6,372,108 | $6,764,102 | $7,899,497 | $7,596,919 | $6,461,710 | $7,891,316 | $7,727,233 |
Gross profit | 4,291,007 | 3,220,055 | 2,231,167 | 1,863,227 | 2,372,386 | 1,851,855 | 1,866,352 | 2,618,724 | 2,069,580 | 2,063,219 | 2,141,147 | 2,283,982 |
Income (loss) from continuing operations | $619,358 | $143,726 | ($243,264) | $139,369 | $548,654 | $269,984 | $292,994 | $660,291 | $331,376 | $348,083 | ($127,570) | $387,391 |
Continuing operations (in dollars per share) | $0.06 | $0.01 | ($0.02) | $0.01 | $0.05 | $0.03 | $0.03 | $0.07 | $0.03 | $0.03 | ($0.01) | $0.04 |
Continuing operations (in dollars per share) | $0.06 | $0.01 | ($0.02) | $0.01 | $0.05 | $0.03 | $0.03 | $0.07 | $0.03 | $0.03 | ($0.01) | $0.04 |
Note_16_Schedule_II_Summary_of
Note 16 - Schedule II - Summary of Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Allowance for Doubtful Accounts [Member] | ' | ' | ' |
Allowance for Doubtful Accounts | $300,000 | $300,000 | $300,000 |
Allowance for Doubtful Accounts | -103,403 | -5,692 | -2,404 |
Allowance for Doubtful Accounts | 3,403 | 5,692 | 2,404 |
Allowance for Doubtful Accounts | 200,000 | 300,000 | 300,000 |
Inventory Valuation Reserve [Member] | ' | ' | ' |
Allowance for Doubtful Accounts | 1,750,000 | 1,000,000 | 1,556,000 |
Allowance for Doubtful Accounts | -208,056 | -294,913 | -1,136,587 |
Allowance for Doubtful Accounts | 163,333 | ' | ' |
Allowance for Doubtful Accounts | 2,156,628 | 1,750,000 | 1,000,000 |
Allowance for Excess and Obsolete Inventory | $601,351 | $1,044,913 | $580,587 |