Cover Page
Cover Page - shares | 9 Months Ended | |
Jun. 30, 2021 | Aug. 12, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-10799 | |
Entity Registrant Name | ADDvantage Technologies Group, Inc. | |
Entity Incorporation, State or Country Code | OK | |
Entity Tax Identification Number | 73-1351610 | |
Entity Address, Address Line One | 1430 Bradley Lane, Suite 196 | |
Entity Address, City or Town | Carrollton | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75007 | |
City Area Code | (918) | |
Local Phone Number | 251-9121 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,511,372 | |
Entity Central Index Key | 0000874292 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2021 | Sep. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 3,598 | $ 8,265 |
Restricted cash | 136 | 108 |
Accounts receivable, net of allowances of $250, respectively | 8,347 | 3,968 |
Unbilled revenue | 863 | 590 |
Promissory note – current | 0 | 1,400 |
Income tax receivable | 0 | 1,283 |
Inventories, net of allowances of $3,168 and $3,054, respectively | 5,611 | 5,576 |
Prepaid expenses and other assets | 1,163 | 884 |
Total current assets | 19,718 | 22,074 |
Machinery and equipment | 4,417 | 3,500 |
Leasehold improvements | 795 | 720 |
Property and equipment, at cost | 5,212 | 4,220 |
Less: Accumulated depreciation | (2,242) | (1,586) |
Net property and equipment | 2,970 | 2,634 |
Right-of-use lease assets | 2,991 | 3,758 |
Promissory note – non current | 1,865 | 2,375 |
Intangibles, net of accumulated amortization | 1,186 | 1,425 |
Goodwill | 58 | 58 |
Deferred income taxes | 28 | 0 |
Other assets | 182 | 179 |
Total assets | 28,998 | 32,503 |
Current liabilities: | ||
Accounts payable | 6,484 | 3,472 |
Accrued expenses | 1,809 | 1,319 |
Deferred revenue | 144 | 113 |
Bank line of credit | 2,800 | 2,800 |
Note payable, current | 1,927 | 1,709 |
Right-of-use lease obligations – current | 1,220 | 1,275 |
Financing lease obligations – current | 440 | 285 |
Other current liabilities | 15 | 41 |
Total current liabilities | 14,839 | 11,014 |
Financing lease obligations - long-term | 988 | 791 |
Right-of-use lease obligations - long-term | 2,436 | 3,310 |
Note payable, less current portion | 1,108 | 2,440 |
Other liabilities | 7 | 15 |
Total liabilities | 19,378 | 17,570 |
Shareholders’ equity: | ||
Common stock, $0.01 par value; 30,000,000 shares authorized; 12,511,372 shares issued and outstanding, and 11,822,009 shares issued and outstanding, respectively | 125 | 118 |
Paid in capital | (745) | (2,567) |
Retained earnings | 10,240 | 17,382 |
Total shareholders’ equity | 9,620 | 14,933 |
Total liabilities and shareholders’ equity | $ 28,998 | $ 32,503 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ (250) | $ (250) |
Allowance for excess and obsolete inventory | $ 3,168 | $ 3,054 |
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) | 12,511,372 | 11,822,009 |
Common stock, shares outstanding (in shares) | 12,511,372 | 11,822,009 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Sales | $ 17,017 | $ 12,022 | $ 42,433 | $ 37,943 |
Cost of sales | 12,748 | 7,851 | 31,354 | 30,619 |
Gross profit | 4,269 | 4,171 | 11,079 | 7,324 |
Operating expenses | 2,508 | 1,998 | 6,733 | 6,276 |
Selling, general and administrative expenses | 3,561 | 2,421 | 10,532 | 8,097 |
Impairment of right of use asset | 0 | 660 | 0 | 660 |
Impairment of intangibles including goodwill | 0 | 0 | 0 | 8,714 |
Depreciation and amortization expense | 314 | 242 | 899 | 1,197 |
Gain on disposal of assets | (13) | (8) | (23) | (36) |
Loss from operations | (2,101) | (1,142) | (7,062) | (17,584) |
Other income (expense): | ||||
Interest income | 34 | 83 | 115 | 259 |
Income from equity method investment | 0 | 0 | 0 | 41 |
Other expense, net | (34) | (37) | (61) | (123) |
Interest expense | (46) | (101) | (156) | (184) |
Total other income (expense), net | (46) | (55) | (102) | (7) |
Loss before income taxes | (2,147) | (1,197) | (7,164) | (17,591) |
Benefit for income taxes | (23) | (1,220) | (23) | $ (1,236) |
Net income (loss) | $ (2,124) | $ 23 | $ (7,141) | |
Income (loss) per share: | ||||
Basic (in dollars per share) | $ (0.17) | $ 0 | $ (0.58) | $ (1.49) |
Diluted (in dollars per share) | $ (0.17) | $ 0 | $ (0.58) | $ (1.49) |
Shares used in per share calculation: | ||||
Basic (in shares) | 12,495,438 | 11,079,580 | 12,352,960 | 10,955,235 |
Diluted (in shares) | 12,495,438 | 11,216,688 | 12,352,960 | 10,955,235 |
Product, Sales | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Paid-in Capital | Retained Earnings | Treasury Stock |
Beginning Balance (in shares) at Sep. 30, 2019 | 10,861,950 | ||||
Beginning Balance at Sep. 30, 2019 | $ 29,447 | $ 109 | $ (4,377) | $ 34,715 | $ (1,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (1,718) | (1,718) | |||
Stock based compensation expense | 14 | 14 | |||
Ending Balance (in shares) at Dec. 31, 2019 | 10,861,950 | ||||
Ending Balance at Dec. 31, 2019 | 27,743 | $ 109 | (4,363) | 32,997 | (1,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (14,661) | (14,661) | |||
Restricted stock issuance | 377 | 377 | |||
Stock option exercise (in shares) | 110,000 | ||||
Stock option exercise | 173 | $ 1 | 172 | ||
Stock based compensation expense | 92 | 92 | |||
Ending Balance (in shares) at Mar. 31, 2020 | 10,971,950 | ||||
Ending Balance at Mar. 31, 2020 | 13,724 | $ 109 | (3,722) | 18,336 | (1,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 23 | 23 | |||
Utilization of treasury shares (in shares) | (500,658) | ||||
Utilization of treasury shares | 0 | $ (5) | (995) | (1,000) | |
Issuance of common shares (in shares) | 573,199 | ||||
Issuance of common shares | 2,109 | $ 6 | 2,103 | ||
Restricted stock issuance (in shares) | 237,014 | ||||
Restricted stock issuance | 15 | $ 2 | 13 | ||
Stock option exercise (in shares) | 13,334 | ||||
Stock option exercise | 24 | 24 | |||
Stock based compensation expense | (15) | (15) | |||
Ending Balance (in shares) at Jun. 30, 2020 | 11,294,839 | ||||
Ending Balance at Jun. 30, 2020 | 15,881 | $ 113 | (2,592) | 18,360 | 0 |
Beginning Balance (in shares) at Sep. 30, 2020 | 11,822,009 | ||||
Beginning Balance at Sep. 30, 2020 | 14,933 | $ 118 | (2,567) | 17,382 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (1,953) | (1,953) | |||
Issuance of common shares (in shares) | 238,194 | ||||
Issuance of common shares | 879 | $ 3 | 876 | ||
Restricted stock issuance (in shares) | 306,390 | ||||
Restricted stock issuance | 0 | $ 3 | (3) | ||
Stock based compensation expense | 315 | 315 | |||
Ending Balance (in shares) at Dec. 31, 2020 | 12,366,593 | ||||
Ending Balance at Dec. 31, 2020 | 14,174 | $ 124 | (1,379) | 15,429 | 0 |
Beginning Balance (in shares) at Sep. 30, 2020 | 11,822,009 | ||||
Beginning Balance at Sep. 30, 2020 | 14,933 | $ 118 | (2,567) | 17,382 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | $ (7,141) | ||||
Stock option exercise (in shares) | 49,000 | ||||
Ending Balance (in shares) at Jun. 30, 2021 | 12,511,372 | ||||
Ending Balance at Jun. 30, 2021 | $ 9,620 | $ 125 | (745) | 10,240 | 0 |
Beginning Balance (in shares) at Dec. 31, 2020 | 12,366,593 | ||||
Beginning Balance at Dec. 31, 2020 | 14,174 | $ 124 | (1,379) | 15,429 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (3,064) | (3,064) | |||
Issuance of common shares (in shares) | 7,779 | ||||
Issuance of common shares | 21 | 21 | |||
Restricted stock issuance (in shares) | (10,000) | ||||
Restricted stock issuance | (1) | $ (1) | |||
Stock option exercise (in shares) | 49,000 | ||||
Stock option exercise | 89 | 89 | |||
Stock based compensation expense | 246 | 246 | |||
Ending Balance (in shares) at Mar. 31, 2021 | 12,413,372 | ||||
Ending Balance at Mar. 31, 2021 | 11,466 | $ 124 | (1,023) | 12,364 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (2,124) | (2,124) | |||
Restricted stock issuance | (1) | ||||
Restricted stock, net (in shares) | 98,000 | ||||
Restricted stock issuance | 0 | $ 1 | |||
Stock based compensation expense | 279 | 279 | |||
Ending Balance (in shares) at Jun. 30, 2021 | 12,511,372 | ||||
Ending Balance at Jun. 30, 2021 | $ 9,620 | $ 125 | $ (745) | $ 10,240 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating Activities: | ||
Net income (loss) | $ (7,141) | |
Adjustments to reconcile net loss from operations to net cash used in operating activities: | ||
Depreciation | 661 | $ 590 |
Amortization | 239 | 607 |
Change in right-of-use assets and liabilities, net | (161) | 0 |
Impairment of right of use asset | 0 | 660 |
Impairment of intangibles including goodwill | 0 | 8,714 |
Provision for excess and obsolete inventories | 115 | 2,125 |
Stock based compensation expense | 840 | 167 |
Gain from disposal of property and equipment | (23) | |
Gain from equity method investment | 0 | (41) |
Changes in assets and liabilities: | ||
Accounts receivable | (4,379) | 1,662 |
Unbilled revenue | (274) | 2,014 |
Income tax receivable\payable | 1,255 | (14) |
Inventories | (150) | (464) |
Prepaid expenses and other assets | (269) | 97 |
Accounts payable | 3,012 | 56 |
Accrued expenses and other liabilities | 456 | (135) |
Deferred revenue | 31 | 144 |
Net cash used in operating activities | (5,788) | (1,429) |
Investing Activities: | ||
Proceeds from promissory note receivable | 1,910 | 2,025 |
Loan repayment from equity method investee | 0 | 40 |
Purchases of property and equipment | (185) | (471) |
Disposals of property and equipment | 43 | 78 |
Net cash provided by investing activities | 1,768 | 1,672 |
Financing Activities: | ||
Change in bank line of credit | 0 | 2,800 |
Proceeds from note payable | 0 | 6,374 |
Guaranteed payments for acquisition of business | 0 | (667) |
Payments on financing lease obligations | (359) | (277) |
Payments on notes payable | (1,249) | (1,622) |
Proceeds from sale of common stock | 900 | 1,829 |
Proceeds from stock options exercised | 89 | 197 |
Net cash provided by (used in) financing activities | (619) | 8,634 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (4,639) | 8,877 |
Cash, cash equivalents and restricted cash at beginning of period | 8,373 | 1,594 |
Cash, cash equivalents and restricted cash at end of period | $ 3,734 | $ 10,471 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 9 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Accounting Policies | Basis of Presentation and Accounting Policies 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 Wireless Infrastructure Services (“Wireless”) and Telecommunications (“Telco”). The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. However, the information furnished reflects all adjustments, which are, in the opinion of management, necessary in order to make the unaudited consolidated financial statements not misleading. The Company’s business is subject to seasonal variations due to weather in the geographic areas where services are performed, as well as calendar events and national holidays. Therefore, the results of operations for the nine months ended June 30, 2021 and 2020, are not necessarily indicative of the results to be expected for the full fiscal year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020. Reclassification Certain prior period amounts have been reclassified to conform to current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings. Recently Issued Accounting Standards In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13: “Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments.” This ASU requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. Upon adoption, entities will use forward-looking information to better form their credit loss estimates. This ASU also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. On November 15, 2019, the FASB delayed the effective date of the standard for companies that qualify under smaller reporting company reporting rules. As amended, the effective date of ASC Topic 326 was delayed until fiscal years beginning after December 15, 2022 for SEC filers that are eligible to be smaller reporting companies under the Securities and Exchange Commission definition. We are currently in the process of evaluating this new standard update, however we do not anticipate the adoption will have a material impact on our results. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company’s principal sales are from Wireless services, sales of Telco equipment and Telco recycled equipment, primarily in the United States. Sales to international customers totaled approximately $1.6 million and $0.7 million for the three months ended June 30, 2021 and 2020, respectively and $2.9 million and $1.5 million for the nine month period ended June 30, 2021 and 2020, respectively. The Company’s customers include wireless carriers, wireless equipment providers, multiple system operators, resellers and direct sales to end-user customers. Sales to three customers which individually accounted for 10% or greater of the Company's revenue totaled 39% and sales to two customers comprised approximately 24% of consolidated revenues for the nine months ended June 30, 2021 and 2020, respectively. Our sales by type were as follows, in thousands: Three Months Ended June 30, Nine Months Ended June 30, 2021 2020 2021 2020 Wireless services sales $ 4,136 $ 5,123 $ 13,716 $ 16,593 Equipment sales: Telco 12,826 6,148 28,289 19,912 Intersegment — (23) — (23) Telco repair sales 1 33 14 49 Telco recycle sales 55 741 414 1,412 Total sales $ 17,017 $ 12,022 $ 42,433 $ 37,943 Contract assets and contract liabilities are included in unbilled revenue and deferred revenue, respectively, in the consolidated balance sheets. At June 30, 2021 and September 30, 2020, contract assets were $0.9 million and $0.6 million, respectively, and contract liabilities were $0.1 million and $0.1 million, respectively. The Company recognized $0.1 million of contract revenue during the nine months ended June 30, 2021 related to contract liabilities recorded in deferred revenue at September 30, 2020. |
Accounts Receivable Agreements
Accounts Receivable Agreements | 9 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Accounts Receivable Agreements | Accounts Receivable Agreements The Company’s Wireless segment has entered into various agreements, including one agreement with recourse, to sell certain receivables to unrelated third-party financial institutions. For the agreement with recourse, the Company is responsible for collecting payments on the sold receivables from its customers. Under this agreement, the third-party financial institution advances the Company 90% of the sold receivables and establishes a reserve of 10% of the sold receivables until the Company collects the sold receivables. As the Company collects the sold receivables, the third-party financial institution will remit the remaining 10% to the Company. At June 30, 2021, the third-party financial institution has a reserve of $0.1 million, which is reflected as restricted cash, against the sold receivables of $0.9 million. For the receivables sold under the agreement with recourse, the agreement addresses events and conditions which may obligate the Company to immediately repay the institution the outstanding purchase price of the receivables sold. The total amount of receivables uncollected by the institution was $0.9 million at June 30, 2021 for which there is a limit of $4.0 million. Although the sale of receivables is with recourse, the Company did not record a recourse obligation at June 30, 2021 as the Company concluded that the sold receivables are collectible. The other agreements without recourse are under programs offered by certain customers in the Wireless segment. For the nine months ended June 30, 2021 and 2020, the Company received proceeds from the sold receivables under all of the various agreements of $12.9 million and $15.9 million, respectively, and included the proceeds in net cash used in operating activities in the Consolidated Statements of Cash Flows. The fees associated with selling these receivables ranged from 0.7% to 2.4% of the gross receivables sold for the nine months ended June 30, 2021 and 2020. The Company recorded costs of $0.1 million and $0.2 million for the three and nine months ended June 30, 2021, respectively, and $0.1 million and $0.3 million for the three and nine months ended June 30, 2020, respectively, in other expense in the consolidated statements of operations. |
Promissory Note Receivable
Promissory Note Receivable | 9 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Promissory Note Receivable | Promissory Note Receivable During 2019, the Company completed a sale of its former Cable TV reporting segment to Leveling 8, an entity owned by a member of our board and significant shareholder, David Chymiak. Part of the consideration for the sale was a promissory note bearing interest of 6% received from Mr. Chymiak. Mr. Chymiak personally guaranteed the promissory note due to the Company and pledged certain assets to secure the payment of the promissory note, including substantially all of Mr. Chymiak’s Company common stock. During the nine months ended June 30, 2021, the Company received principal payments totaling $1.9 million, of which approximately $1.4 million was a prepayment. At June 30, 2021, there was $1.9 million outstanding on the promissory note. The remaining promissory note is due in a final payment on June 29, 2024. On March 10, 2020, the Company entered into a loan agreement with its primary financial lender for $3.5 million to monetize a portion of this promissory note receivable. See Note 7 - Debt for disclosures related to the Company's promissory note payable. |
Inventories
Inventories | 9 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories, which are all within the Telco segment, at June 30, 2021 and September 30, 2020 are as follows, in thousands: June 30, 2021 September 30, 2020 New equipment $ 1,261 $ 1,311 Refurbished and used equipment 7,518 7,319 Allowance for excess and obsolete inventory (3,168) (3,054) Total inventories, net $ 5,611 $ 5,576 New equipment includes products purchased from manufacturers plus “surplus-new,” which are unused products purchased from other distributors or multiple system operators. Refurbished and used equipment include factory refurbished, Company refurbished and used products. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company groups assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted future cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. Intangible assets with their associated accumulated amortization and impairment at June 30, 2021 and September 30, 2020 are as follows, in thousands: June 30, 2021 Intangible assets: Gross Accumulated Amortization Impairment Net Customer relationships – 10 years $ 8,396 $ (4,141) $ (3,894) $ 361 Trade name – 10 years 2,122 (1,297) — 825 Total intangible assets $ 10,518 $ (5,438) $ (3,894) $ 1,186 September 30, 2020 Intangible assets: Gross Accumulated Impairment Net Customer relationships – 10 years $ 8,396 $ (4,021) $ (3,894) $ 481 Trade name – 10 years 2,122 (1,178) — 944 Non-compete agreements – 3 years 374 (374) — — Total intangible assets $ 10,892 $ (5,573) $ (3,894) $ 1,425 |
Debt
Debt | 9 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Loan Agreement On March 10, 2020, the Company entered into a loan agreement with its primary financial lender for $3.5 million, bearing interest at 6% per annum. The loan was payable in seven semi-annual installments of principal and interest with the first payment occurring June 30, 2020. In connection with the $1.5 million payment received in the first fiscal quarter of 2021 from the promissory note receivable, the Company fully repaid the remaining $1.2 million of principal outstanding under this loan. Credit Agreement The Company has a $4.0 million revolving line of credit agreement with its primary financial lender, which matures on December 17, 2021. The line of credit requires quarterly interest payments based on the prevailing Wall Street Journal Prime Rate, floating (3.25% at June 30, 2021), with the addition of a 4% floor rate and a fixed charge coverage ratio of 1.25 to be tested quarterly beginning June 30, 2021. At June 30, 2021, there was $2.8 million outstanding under the line of credit. Future borrowings under the line of credit are limited to the lesser of $4.0 million or the sum of 80% of eligible accounts receivable and 60% of eligible Telco segment inventory. Under these limitations, the Company’s total line of credit borrowing capacity was $4.0 million at June 30, 2021. Loan Covenant with Primary Financial Lender The credit agreement provides that the Company maintain a fixed charge coverage ratio (net cash flow to total fixed charge) of not less than 1.25 to 1.0 to be tested quarterly beginning June 30, 2021. The Company was not in compliance with this covenant at June 30, 2021. The Company notified its primary financial lender of the covenant violation, and on August 4, 2021, the primary financial lender granted a waiver of the covenant violation under the credit agreement. Although the covenant violation was waived at June 30, 2021, the Company believes it may again be out of compliance with this covenant at September 30, 2021. If the Company is not in compliance with the covenant at September 30, 2021, it would result in an event of default, which if not cured or waived, could result in the lender accelerating the maturity of the Company’s indebtedness or preventing access to additional funds under the line of credit agreement, or requiring prepayment of outstanding indebtedness under the loan agreement or the line of credit agreement. Paycheck Protection Program Loan On April 14, 2020, the Company entered into an unsecured loan in the amount of $2.9 million ("PPP Loan") with its primary lender pursuant to the Paycheck Protection Program ("PPP") which is sponsored by the Small Business Administration (“SBA”), and is part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), as amended by the Paycheck Protection Program Flexibility Act of 2020 (“Flexibility Act”). The PPP provides for loans to qualifying businesses, the proceeds of which may be used for payroll costs, rent, utilities, mortgage interest, and interest on other pre-existing indebtedness (the “Permissible Expenses”). The PPP Loan, and accrued interest, may be forgiven partially or in full, if certain conditions are met, which includes if funds were expended for Permissible Expenses. The PPP Loan matures on April 14, 2022, bears interest at 1% per annum, with monthly payments of principal and interest in the amount of $164,045 commencing on the date on which the amount of loan forgiveness is determined by the SBA. On August 28, 2020, we submitted our application to our lender, requesting PPP Loan forgiveness of $2.9 million. Our lender reviewed our application for forgiveness and forwarded to the SBA on September 27, 2020 for approval. In the absence of an approval or denial of our application for forgiveness from the SBA, per the Flexibility Act, the date for commencement of loan payments has not yet occurred, and we have made no loan payments. While we believe we have met the eligibility requirements for the PPP Loan, and believe we have used the loan proceeds for Permissible Expenses, we can provide no assurances that we will receive full or partial forgiveness of the PPP Loan. Accordingly, we have recorded the full amount of the PPP Loan as debt, which is included in current and long-term debt, on our consolidated balance sheet at June 30, 2021. Fair Value of Debt The carrying value of the Company’s variable-rate line of credit approximates its fair value since the interest rate fluctuates periodically based on a floating interest rate. The carrying value of the Company’s term debt approximates fair value. |
Equity Distribution Agreement a
Equity Distribution Agreement and Sale of Common Stock | 9 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Equity Distribution Agreement and Sale of Common Stock | Equity Distribution Agreement and Sale of Common Stock On April 24, 2020, the Company entered into an Equity Distribution Agreement with Northland Securities, Inc., as agent (“Northland”), pursuant to which the Company may offer and sell, from time to time, through Northland, shares of the Company’s common stock, par value 0.01 per share, having an aggregate offering price of up to $13,850,000 ("Shares"). The offer and sale of the Shares will be made pursuant to a shelf registration statement on Form S-3 and the related prospectus filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 3, 2020, as amended on March 23, 2020, and declared effective by the SEC on April 1, 2020. Pursuant to the Sales Agreement, Northland may sell the Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933 (the “Securities Act”), including sales made by means of ordinary brokers’ transactions, including on The Nasdaq Global Market, at market prices or as otherwise agreed with Northland. Northland will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the Shares from time to time, based upon instructions from the Company, including any price or size limits or other customary parameters or conditions the Company may impose. The Sales Agreement may be terminated without prior notice at any time prior to the fulfillment if additional sales are deemed not warranted. The Company will pay Northland a commission rate equal to an aggregate of 3.0% of the aggregate gross proceeds from each sale of Shares and have agreed to provide Northland with customary indemnification and contribution rights. The Company will also reimburse Northland for certain specified expenses in connection with entering into the Sales Agreement. The Sales Agreement contains customary representations and warranties and conditions to the placements of the Shares pursuant thereto. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share are based on the sum of the average number of common shares outstanding and issuable, restricted and deferred shares. Diluted earnings per share include any dilutive effect of stock options and restricted stock. In computing the diluted weighted average shares, the average share price for the period is used in determining the number of shares assumed to be reacquired under the treasury stock method from the exercise of options. Basic and diluted earnings per share for the three and nine months ended June 30, 2021 and 2020 are (in thousands, except per share amounts): Three Months Ended June 30, Nine Months Ended June 30, 2021 2020 2021 2020 Net income (loss) attributable to common shareholders $ (2,124) $ 23 (7,141) (16,355) Basic weighted average shares 12,495,438 11,079,580 12,352,960 10,955,235 Effect of dilutive securities: — — — — Stock options — 137,108 — — Diluted weighted average shares 12,495,438 11,216,688 12,352,960 10,955,235 Income (loss) per common share: Basic $ (0.17) $ — $ (0.58) $ (1.49) Diluted $ (0.17) $ — $ (0.58) $ (1.49) The table below includes information related to stock options that were outstanding at the end of each respective three and nine month period ended June 30, but have been excluded from the computation of weighted-average stock options for dilutive securities because their effect would be anti-dilutive. The stock options were anti-dilutive either due to the Company incurring a net loss for the periods presented or the exercise price exceeded the average market price per share of our common stock for the three and nine months ended June 30, 2021 and 2020. Three Months Ended June 30, Nine Months Ended June 30, 2021 2020 2021 2020 Stock options excluded 50,000 150,000 50,000 480,000 Weighted average exercise price of stock options $ 1.28 $ 2.96 $ 1.28 $ 1.89 Average market price of common stock $ 2.35 $ 2.41 $ 2.61 $ 2.48 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Jun. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information (in thousands) Nine Months Ended June 30, 2021 2020 Supplemental cash flow information: Cash paid for interest $ 106 $ 144 Supplemental noncash investing and financing activities: Assets acquired under financing leases $ 832 $ 454 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Plan Information The 2015 Incentive Stock Plan (the “Plan”) provides for awards of stock options and restricted stock to officers, directors, key employees and consultants. At June 30, 2021, 2,100,415 shares of common stock were reserved for stock award grants under the Plan. Of these reserved shares, 396,246 shares were available for future grants. Stock Options A summary of the status of the Company's stock options at June 30, 2021 and changes during the nine months ended June 30, 2021 is presented below: Wtd. Avg. Shares Aggregate Intrinsic Value (in thousands) Outstanding at September 30, 2020 $ 1.55 100,000 $ 37 Exercised 1.81 (49,000) 49 Forfeited 1.81 (1,000) — Outstanding at June 30, 2021 $ 1.28 50,000 $ 69 Exercisable at June 30, 2021 $ 1.28 34,334 $ 44 Restricted stock awards A summary of the Company's non-vested restricted share awards (RSA) at June 30, 2021 and changes during the nine months ended June 30, 2021 is presented in the following table (in thousands, except shares): Shares Fair Value Non-vested at September 30, 2020 475,024 $ 1,058 Granted 444,390 965 Vested (228,358) (455) Forfeited (50,000) (125) Non-vested at June 30, 2021 641,056 $ 1,443 During the three month period ended June 30, 2021 and 2020, expenses (income) related to share-based arrangements including restricted stock and stock option awards, were $0.3 million and $(15) thousand, respectively. During the nine month period ended June 30, 2021 and 2020, compensation expenses related to share-based arrangements including restricted stock and stock option awards, were $0.8 million and $0.1 million respectively. The Company did not recognize a tax benefit for compensation expense recognized during the three and nine month period ended June 30, 2021 and 2020. |
Leases
Leases | 9 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Leases | Leases Our Wireless segment has an operating lease for a building in Fridley, Minnesota for Fulton Technologies, Inc. As a result of closing down and vacating Fulton Technologies, Inc.’s Minnesota office in May 2019, a third-party telecom company began subleasing this building in June 2019. Our Telco segment has an operating lease for a building in Jessup, Maryland for Nave Communications. As a result of moving Nave’s operations to Palco Telecom, a third-party logistics provider in Huntsville, Alabama, in fiscal year 2020, Nave completely vacated the building in May 2020 and has subleased part of the building during certain periods of fiscal year 2021. Rental payments received related to these subleases were recorded as a reduction to rent expense in our consolidated statements of operations for the three and six month periods ending June 30, 2021 and 2020. Rental payments received from subleased right-of-use assets is as follows: (in thousands) Three Months Ended June 30, Nine Months Ended June 30, 2021 2020 2021 2020 Subleased rental receipts: Wireless $ 46 $ 46 $ 137 $ 136 Telco — 100 115 301 Total subleased rental receipts $ 46 $ 146 $ 252 $ 437 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company is reporting its financial performance based on its external reporting segments: Wireless Infrastructure Services and Telecommunications. These reportable segments are described below. Wireless Infrastructure Services (“Wireless”) The Wireless segment provides turn-key wireless infrastructure services for the four major U.S. wireless carriers, communication tower companies, national integrators, and original equipment manufacturers that support these wireless carriers. These services primarily consist of the installation and upgrade of technology on cell sites and the construction of new small cells for 5G. Telecommunications (“Telco”) The Company’s Telco segment sells new and refurbished telecommunications networking equipment, including both central office and customer premise equipment, to its customer base of telecommunications providers, enterprise customers and resellers located primarily in North America. This segment also offers its customers repair and testing services for telecommunications networking equipment. In addition, this segment offers its customers decommissioning services for surplus and obsolete equipment, which it in turn processes through its recycling program. 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, inventories, property and equipment, goodwill and intangible assets. The Company changed the allocation of corporate general and administrative expenses between our reportable business segments. At September 30, 2020, the Company did not allocate the corporate general and administrative expenses to the reportable segments and listed those expenses separate from the operating results of those reportable segments. During fiscal 2021, the Company reviewed its reportable segments and its corporate general and administrative expenses and allocation methodology, which resulted in the Company allocating its corporate general and administrative expenses to the reportable segments. The prior period allocations have been adjusted to reflect the Company's current allocation methodology. Three Months Ended Nine Months Ended (in thousands) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Sales Wireless $ 4,136 $ 5,123 $ 13,716 $ 16,593 Telco 12,881 6,899 28,717 21,350 Total sales $ 17,017 $ 12,022 $ 42,433 $ 37,943 Gross profit Wireless $ 1,233 $ 2,251 $ 4,370 $ 4,299 Telco 3,036 1,920 6,710 3,025 Total gross profit (loss) $ 4,269 $ 4,171 $ 11,079 $ 7,324 Wireless 30 % 44 % 32 % 26 % Telco 24 % 28 % 23 % 14 % Total gross profit margin (loss) 25 % 35 % 26 % 19 % Gain (loss) from operations Wireless $ (2,117) $ (75) $ (4,759) $ (3,310) Telco 16 (1,067) (2,303) (14,274) Total gain (loss) from operations $ (2,101) $ (1,142) $ (7,062) $ (17,584) (in thousands) June 30, 2021 September 30, 2020 Segment assets Wireless $ 5,645 $ 5,324 Telco 16,689 12,298 Non-allocated 6,664 14,881 Total assets $ 28,998 $ 32,503 |
Basis of Presentation and Acc_2
Basis of Presentation and Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | 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 Wireless Infrastructure Services (“Wireless”) and Telecommunications (“Telco”). The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. However, the information furnished reflects all adjustments, which are, in the opinion of management, necessary in order to make the unaudited consolidated financial statements not misleading. The Company’s business is subject to seasonal variations due to weather in the geographic areas where services are performed, as well as calendar events and national holidays. Therefore, the results of operations for the nine months ended June 30, 2021 and 2020, are not necessarily indicative of the results to be expected for the full fiscal year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020. |
Reclassification | ReclassificationCertain prior period amounts have been reclassified to conform to current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings. |
Recently issued accounting standards | Recently Issued Accounting Standards In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13: “Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments.” This ASU requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. Upon adoption, entities will use forward-looking information to better form their credit loss estimates. This ASU also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. On November 15, 2019, the FASB delayed the effective date of the standard for companies that qualify under smaller reporting company reporting rules. As amended, the effective date of ASC Topic 326 was delayed until fiscal years beginning after December 15, 2022 for SEC filers that are eligible to be smaller reporting companies under the Securities and Exchange Commission definition. We are currently in the process of evaluating this new standard update, however we do not anticipate the adoption will have a material impact on our results. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Our sales by type were as follows, in thousands: Three Months Ended June 30, Nine Months Ended June 30, 2021 2020 2021 2020 Wireless services sales $ 4,136 $ 5,123 $ 13,716 $ 16,593 Equipment sales: Telco 12,826 6,148 28,289 19,912 Intersegment — (23) — (23) Telco repair sales 1 33 14 49 Telco recycle sales 55 741 414 1,412 Total sales $ 17,017 $ 12,022 $ 42,433 $ 37,943 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories, which are all within the Telco segment, at June 30, 2021 and September 30, 2020 are as follows, in thousands: June 30, 2021 September 30, 2020 New equipment $ 1,261 $ 1,311 Refurbished and used equipment 7,518 7,319 Allowance for excess and obsolete inventory (3,168) (3,054) Total inventories, net $ 5,611 $ 5,576 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Intangible assets with their associated accumulated amortization and impairment at June 30, 2021 and September 30, 2020 are as follows, in thousands: June 30, 2021 Intangible assets: Gross Accumulated Amortization Impairment Net Customer relationships – 10 years $ 8,396 $ (4,141) $ (3,894) $ 361 Trade name – 10 years 2,122 (1,297) — 825 Total intangible assets $ 10,518 $ (5,438) $ (3,894) $ 1,186 September 30, 2020 Intangible assets: Gross Accumulated Impairment Net Customer relationships – 10 years $ 8,396 $ (4,021) $ (3,894) $ 481 Trade name – 10 years 2,122 (1,178) — 944 Non-compete agreements – 3 years 374 (374) — — Total intangible assets $ 10,892 $ (5,573) $ (3,894) $ 1,425 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Basic and diluted earnings per share for the three and nine months ended June 30, 2021 and 2020 are (in thousands, except per share amounts): Three Months Ended June 30, Nine Months Ended June 30, 2021 2020 2021 2020 Net income (loss) attributable to common shareholders $ (2,124) $ 23 (7,141) (16,355) Basic weighted average shares 12,495,438 11,079,580 12,352,960 10,955,235 Effect of dilutive securities: — — — — Stock options — 137,108 — — Diluted weighted average shares 12,495,438 11,216,688 12,352,960 10,955,235 Income (loss) per common share: Basic $ (0.17) $ — $ (0.58) $ (1.49) Diluted $ (0.17) $ — $ (0.58) $ (1.49) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The stock options were anti-dilutive either due to the Company incurring a net loss for the periods presented or the exercise price exceeded the average market price per share of our common stock for the three and nine months ended June 30, 2021 and 2020. Three Months Ended June 30, Nine Months Ended June 30, 2021 2020 2021 2020 Stock options excluded 50,000 150,000 50,000 480,000 Weighted average exercise price of stock options $ 1.28 $ 2.96 $ 1.28 $ 1.89 Average market price of common stock $ 2.35 $ 2.41 $ 2.61 $ 2.48 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | (in thousands) Nine Months Ended June 30, 2021 2020 Supplemental cash flow information: Cash paid for interest $ 106 $ 144 Supplemental noncash investing and financing activities: Assets acquired under financing leases $ 832 $ 454 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Option, Activity | A summary of the status of the Company's stock options at June 30, 2021 and changes during the nine months ended June 30, 2021 is presented below: Wtd. Avg. Shares Aggregate Intrinsic Value (in thousands) Outstanding at September 30, 2020 $ 1.55 100,000 $ 37 Exercised 1.81 (49,000) 49 Forfeited 1.81 (1,000) — Outstanding at June 30, 2021 $ 1.28 50,000 $ 69 Exercisable at June 30, 2021 $ 1.28 34,334 $ 44 |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | A summary of the Company's non-vested restricted share awards (RSA) at June 30, 2021 and changes during the nine months ended June 30, 2021 is presented in the following table (in thousands, except shares): Shares Fair Value Non-vested at September 30, 2020 475,024 $ 1,058 Granted 444,390 965 Vested (228,358) (455) Forfeited (50,000) (125) Non-vested at June 30, 2021 641,056 $ 1,443 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Lease, Cost | Rental payments received from subleased right-of-use assets is as follows: (in thousands) Three Months Ended June 30, Nine Months Ended June 30, 2021 2020 2021 2020 Subleased rental receipts: Wireless $ 46 $ 46 $ 137 $ 136 Telco — 100 115 301 Total subleased rental receipts $ 46 $ 146 $ 252 $ 437 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The Company changed the allocation of corporate general and administrative expenses between our reportable business segments. At September 30, 2020, the Company did not allocate the corporate general and administrative expenses to the reportable segments and listed those expenses separate from the operating results of those reportable segments. During fiscal 2021, the Company reviewed its reportable segments and its corporate general and administrative expenses and allocation methodology, which resulted in the Company allocating its corporate general and administrative expenses to the reportable segments. The prior period allocations have been adjusted to reflect the Company's current allocation methodology. Three Months Ended Nine Months Ended (in thousands) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Sales Wireless $ 4,136 $ 5,123 $ 13,716 $ 16,593 Telco 12,881 6,899 28,717 21,350 Total sales $ 17,017 $ 12,022 $ 42,433 $ 37,943 Gross profit Wireless $ 1,233 $ 2,251 $ 4,370 $ 4,299 Telco 3,036 1,920 6,710 3,025 Total gross profit (loss) $ 4,269 $ 4,171 $ 11,079 $ 7,324 Wireless 30 % 44 % 32 % 26 % Telco 24 % 28 % 23 % 14 % Total gross profit margin (loss) 25 % 35 % 26 % 19 % Gain (loss) from operations Wireless $ (2,117) $ (75) $ (4,759) $ (3,310) Telco 16 (1,067) (2,303) (14,274) Total gain (loss) from operations $ (2,101) $ (1,142) $ (7,062) $ (17,584) (in thousands) June 30, 2021 September 30, 2020 Segment assets Wireless $ 5,645 $ 5,324 Telco 16,689 12,298 Non-allocated 6,664 14,881 Total assets $ 28,998 $ 32,503 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | |||||||
Total sales | $ 17,017 | $ 12,022 | $ 42,433 | $ 37,943 | |||
Contract assets | 863 | 863 | $ 590 | ||||
Contract liabilities | 144 | 144 | $ 113 | ||||
Contract liabilities, revenue recognized | $ 100 | ||||||
Customer Concentration Risk | Revenue Benchmark | Customer One | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total gross profit margin (loss) | 24.00% | ||||||
Customer Concentration Risk | Revenue Benchmark | Customer Two | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total gross profit margin (loss) | 24.00% | ||||||
Customer Concentration Risk | Revenue Benchmark | Largest Customer | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total gross profit margin (loss) | 39.00% | ||||||
Non-US | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Total sales | $ 1,600 | $ 700 | $ 2,900 | $ 1,500 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 17,017 | $ 12,022 | $ 42,433 | $ 37,943 |
Telco | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 12,881 | 6,899 | 28,717 | 21,350 |
Wireless services sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 4,136 | 5,123 | 13,716 | 16,593 |
Equipment sales: | Intersegment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 0 | (23) | 0 | (23) |
Equipment sales: | Telco | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 12,826 | 6,148 | 28,289 | 19,912 |
Telco repair sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 1 | 33 | 14 | 49 |
Telco recycle sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 55 | $ 741 | $ 414 | $ 1,412 |
Accounts Receivable Agreements
Accounts Receivable Agreements (Details) - USD ($) | Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Restricted cash | $ 136,000 | $ 136,000 | $ 136,000 | $ 108,000 | ||
Certain Receivables to Unrelated Third-parties | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Accounts receivable agreement, percent of sold receivables advanced | 90.00% | 90.00% | 90.00% | |||
Accounts receivable agreement, reserve of sold receivables, percent | 10.00% | 10.00% | 10.00% | |||
Restricted cash | $ 100,000 | $ 100,000 | $ 100,000 | |||
Accounts receivable, sale | (900,000) | |||||
Maximum limit of receivables uncollected | 4,000,000 | 4,000,000 | 4,000,000 | |||
Proceeds from collection of finance receivables | 12,900,000 | $ 15,900,000 | ||||
Certain Receivables to Unrelated Third-parties | Other Nonoperating Income (Expense) | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Cost of selling receivables | 100,000 | $ 100,000 | $ 200,000 | $ 300,000 | ||
Certain Receivables to Unrelated Third-parties | Minimum | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Receivables, cost of sales, percent | 0.70% | |||||
Certain Receivables to Unrelated Third-parties | Maximum | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Receivables, cost of sales, percent | 2.40% | |||||
Uncollectible Receivables | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Thirty party financial institution reserve | $ (900,000) | $ (900,000) | $ (900,000) |
Promissory Note Receivable (Det
Promissory Note Receivable (Details) - USD ($) | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Mar. 10, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Proceeds from promissory note receivable | $ 1,910,000 | $ 2,025,000 | |
Proceeds from promissory note receivable prepayment | 1,400,000 | ||
Promissory note, amount outstanding | $ 1,900,000 | ||
Loan Agreement with Primary Financial Leader | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Debt instrument, face amount | $ 3,500,000 | ||
Promissory Note | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable, interest rate | 6.00% |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Sep. 30, 2020 |
Inventory [Line Items] | ||
Allowance for excess and obsolete inventory | $ (3,168) | $ (3,054) |
Total inventories, net | 5,611 | 5,576 |
New equipment | ||
Inventory [Line Items] | ||
Inventory, gross | 1,261 | 1,311 |
Refurbished and used equipment | ||
Inventory [Line Items] | ||
Inventory, gross | $ 7,518 | $ 7,319 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Sep. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 10,518 | $ 10,892 |
Accumulated Amortization | (5,438) | (5,573) |
Impairment | (3,894) | (3,894) |
Net | 1,186 | 1,425 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 8,396 | 8,396 |
Accumulated Amortization | (4,141) | (4,021) |
Impairment | (3,894) | (3,894) |
Net | $ 361 | $ 481 |
Useful life | 10 years | 10 years |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 2,122 | $ 2,122 |
Accumulated Amortization | (1,297) | (1,178) |
Impairment | 0 | 0 |
Net | $ 825 | $ 944 |
Useful life | 10 years | 10 years |
Noncompete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 374 | |
Accumulated Amortization | (374) | |
Impairment | 0 | |
Net | $ 0 | |
Useful life | 3 years |
Debt (Details)
Debt (Details) | Aug. 28, 2020USD ($) | Apr. 14, 2020USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Dec. 17, 2021USD ($) | Mar. 10, 2020USD ($)installment |
Debt Instrument [Line Items] | |||||||
Proceeds from promissory note receivable | $ 1,910,000 | $ 2,025,000 | |||||
Repayments of notes payable | 1,249,000 | 1,622,000 | |||||
Proceeds from note payable | $ 0 | $ 6,374,000 | |||||
Leveling 8 | Promissory Note | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from promissory note receivable | $ 1,500,000 | ||||||
Loan Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 3,500,000 | ||||||
Debt instrument, interest rate | 6.00% | ||||||
Loan Agreement | Leveling 8 | |||||||
Debt Instrument [Line Items] | |||||||
Repayments of notes payable | $ 1,200,000 | ||||||
Credit and Term Loan Agreement | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, number of installments | installment | 7 | ||||||
New Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Fixed charge coverage ratio, minimum Requirement | 1.25 | ||||||
New Credit Agreement | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing capacity | $ 4,000,000 | ||||||
Debt instrument, effective interest rate | 3.25% | ||||||
Debt instrument, floor rate | 4.00% | ||||||
Line of credit, amount outstanding | $ 2,800,000 | ||||||
Percentage of qualified accounts receivable used in determination of maximum borrowing capacity of line of credit | 0.80 | ||||||
Percentage of qualified inventory used in determination of maximum borrowing capacity of line of credit | 0.60 | ||||||
Line of credit, current borrowing capacity | $ 4,000,000 | ||||||
New Credit Agreement | Revolving Credit Facility | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing capacity | $ 4,000,000 | ||||||
Loan Agreement with Primary Financial Leader | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 3,500,000 | ||||||
Fixed charge coverage ratio, minimum Requirement | 1.25 | ||||||
Paycheck Protection Program CARES Act | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate | 1.00% | ||||||
Proceeds from note payable | $ 2,900,000 | $ 2,900,000 | |||||
Debt instrument, periodic payment, total | $ 164,045 |
Equity Distribution Agreement_2
Equity Distribution Agreement and Sale of Common Stock (Details) - USD ($) | 9 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2020 | Apr. 24, 2020 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Proceeds from sale of common stock, gross | $ 900,000 | $ 1,829,000 | ||
Sales Agreement With Northland | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | |||
Maximum aggregate offering price | $ 13,850,000 | |||
Commission rate | 3.00% | |||
Issuance of common shares (in shares) | 245,973 | |||
Proceeds from sale of common stock, gross | $ 900,000 | |||
Proceeds from sale of common stock, net | $ 900,000 |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to common shareholders | $ (2,124) | $ 23 | $ (7,141) | $ (16,355) |
Net income (loss) attributable to common shareholders | $ (2,124) | $ 23 | $ (7,141) | $ (16,355) |
Basic weighted average shares (in shares) | 12,495,438 | 11,079,580 | 12,352,960 | 10,955,235 |
Stock options (in shares) | 0 | 137,108 | 0 | 0 |
Diluted weighted average shares (in shares) | 12,495,438 | 11,216,688 | 12,352,960 | 10,955,235 |
Income (loss) per common share: | ||||
Basic (in dollars per share) | $ (0.17) | $ 0 | $ (0.58) | $ (1.49) |
Diluted (in dollars per share) | $ (0.17) | $ 0 | $ (0.58) | $ (1.49) |
Earnings Per Share - Anti-dilut
Earnings Per Share - Anti-dilutive Securities (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Stock options excluded (in shares) | 50,000 | 150,000 | 50,000 | 480,000 |
Weighted average exercise price of stock options (in dollars per share) | $ 1.28 | $ 2.96 | $ 1.28 | $ 1.89 |
Average market price of common stock (in dollars per share) | $ 2.35 | $ 2.41 | $ 2.61 | $ 2.48 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Supplemental cash flow information: | ||
Cash paid for interest | $ 106 | $ 144 |
Supplemental noncash investing and financing activities: | ||
Assets acquired under financing leases | $ 832 | $ 454 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 300 | $ (15) | $ 800 | $ 100 |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | 300 | $ (15) | 800 | $ 100 |
Compensation cost, not yet recognized | $ 800 | $ 800 | ||
Recognized over a period | 2 years 10 months 24 days | |||
The 2015 Incentive Stock Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, capital shares reserved for future issuance (in shares) | 2,100,415 | 2,100,415 | ||
Number of shares available for grant (in shares) | 396,246 | 396,246 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share-based Payment Arrangement, Option, Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
Wtd. Avg. Ex. Price | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 1.55 |
Exercised (in dollars per share) | $ / shares | 1.81 |
Forfeited (in dollars per share) | $ / shares | 1.81 |
Outstanding, ending balance (in dollars per share) | $ / shares | 1.28 |
Exercisable (in dollars per share) | $ / shares | $ 1.28 |
Shares | |
Outstanding, beginning balance (in shares) | shares | 100,000 |
Exercised (in shares) | shares | (49,000) |
Forfeited (in shares) | shares | (1,000) |
Outstanding, ending balance (in shares) | shares | 50,000 |
Exercisable (in shares) | shares | 34,334 |
Aggregate Intrinsic Value | |
Outstanding beginning balance | $ | $ 37 |
Exercised | $ | 49 |
Outstanding ending balance | $ | 69 |
Exercisable | $ | $ 44 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Non-vested Restricted Share Awards (Details) $ in Thousands | 9 Months Ended |
Jun. 30, 2021USD ($)shares | |
Shares | |
Non-vested, beginning balance (in shares) | shares | 475,024 |
Granted (in shares) | shares | 444,390 |
Vested (in shares) | shares | (228,358) |
Forfeited (in shares) | shares | (50,000) |
Non-vested, ending balance (in shares) | shares | 641,056 |
Fair Value | |
Non-vested, beginning balance | $ | $ 1,058 |
Granted | $ | 965 |
Vested | $ | (455) |
Forfeited | $ | (125) |
Non-vested, ending balance | $ | $ 1,443 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Lessee, Lease, Description [Line Items] | ||||
Total subleased rental receipts | $ 46 | $ 146 | $ 252 | $ 437 |
Wireless | ||||
Lessee, Lease, Description [Line Items] | ||||
Total subleased rental receipts | 46 | 46 | 137 | 136 |
Telco | ||||
Lessee, Lease, Description [Line Items] | ||||
Total subleased rental receipts | $ 0 | $ 100 | $ 115 | $ 301 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | |||||
Total sales | $ 17,017 | $ 12,022 | $ 42,433 | $ 37,943 | |
Total gross profit (loss) | 4,269 | 4,171 | 11,079 | 7,324 | |
Total gain (loss) from operations | (2,101) | (1,142) | (7,062) | $ (17,584) | |
Total assets | 28,998 | $ 28,998 | $ 32,503 | ||
Operating segments | |||||
Segment Reporting Information [Line Items] | |||||
Total gross profit (loss) | $ 4,269 | $ 4,171 | |||
Total gross profit margin (loss) | 25.00% | 35.00% | 26.00% | 19.00% | |
Non-allocated | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | $ 6,664 | $ 6,664 | 14,881 | ||
Wireless | Operating segments | |||||
Segment Reporting Information [Line Items] | |||||
Total sales | 4,136 | $ 5,123 | 13,716 | $ 16,593 | |
Total gross profit (loss) | $ 1,233 | $ 2,251 | $ 4,370 | $ 4,299 | |
Total gross profit margin (loss) | 30.00% | 44.00% | 32.00% | 26.00% | |
Total gain (loss) from operations | $ (2,117) | $ (75) | $ (4,759) | $ (3,310) | |
Total assets | 5,645 | 5,645 | 5,324 | ||
Telco | Operating segments | |||||
Segment Reporting Information [Line Items] | |||||
Total sales | 12,881 | 6,899 | 28,717 | 21,350 | |
Total gross profit (loss) | $ 3,036 | $ 1,920 | $ 6,710 | $ 3,025 | |
Total gross profit margin (loss) | 24.00% | 28.00% | 23.00% | 14.00% | |
Total gain (loss) from operations | $ 16 | $ (1,067) | $ (2,303) | $ (14,274) | |
Total assets | $ 16,689 | $ 16,689 | $ 12,298 |