Key Technology (KTEC) 10-Q 5 Feb 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2015	Jan. 31, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	KEY TECHNOLOGY INC
Entity Central Index Key	906,193
Current Fiscal Year End Date	--09-30
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		6,249,315

UNAUDITED CONDENSED CONSOLIDATE

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2015	Sep. 30, 2015
Current assets:
Cash and cash equivalents	$ 6,374	$ 7,726
Trade accounts receivable, net of allowance for doubtful accounts of $252 and $261, respectively	14,324	14,836
Inventories:
Raw materials	13,879	14,291
Work-in-process and sub-assemblies	11,473	9,769
Finished goods	7,192	7,237
Total inventories	32,544	31,297
Deferred income taxes	3,844	3,972
Prepaid expenses and other assets	4,116	4,108
Total current assets	61,202	61,939
Property, plant and equipment, net	14,060	14,799
Deferred income taxes	3,769	2,917
Goodwill	9,972	10,223
Investment in Proditec	1,127	1,127
Intangibles and other assets, net	5,996	6,541
Total	96,126	97,546
Current liabilities:
Accounts payable	8,859	10,800
Accrued payroll liabilities and commissions	5,425	5,452
Customers' deposits	7,828	4,712
Accrued customer support and warranty costs	2,459	2,618
Customer purchase plans	1,605	1,506
Income taxes payable	0	2
Current portion of long-term debt	679	705
Other accrued liabilities	1,258	1,313
Total current liabilities	28,113	27,108
Long-term debt	4,978	5,149
Deferred income taxes	1,958	2,144
Other long-term liabilities	357	408
Shareholders' equity:
Common stock	32,753	32,676
Warrants	665	665
Retained earnings and other shareholders' equity	27,302	29,396
Total shareholders' equity	60,720	62,737
Total	$ 96,126	$ 97,546

UNAUDITED CONDENSED CONSOLIDAT3

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2015	Sep. 30, 2015
Current assets
Trade accounts receivable, allowance for doubtful accounts	$ 252	$ 261

UNAUDITED CONDENSED CONSOLIDAT4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Income Statement [Abstract]
Net sales	$ 24,803	$ 20,091
Cost of sales	17,823	14,615
Gross profit	6,980	5,476
Operating expenses:
Sales and marketing	4,070	4,073
Research and development	2,279	2,125
General and administrative	2,685	2,102
Amortization of intangibles	349	402
Total operating expenses	9,383	8,702
Gain on disposition of assets	8	4
Loss from operations	(2,395)	(3,222)
Other income (expense)	(339)	(10)
Loss before income taxes	(2,734)	(3,232)
Income tax benefit	(1,035)	(1,404)
Net loss	$ (1,699)	$ (1,828)
Net loss per share
- basic (in dollars per share)	$ (0.27)	$ (0.29)
- diluted (in dollars per share)	$ (0.27)	$ (0.29)
Shares used in per share calculations - basic (in shares)	6,261	6,285
Shares used in per share calculations - diluted (in shares)	6,261	6,285

UNAUDITED CONSOLIDATED STATEMEN

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Statement of Comprehensive Income [Abstract]
Net earnings (loss)	$ (1,699)	$ (1,828)
Other comprehensive income (loss):
Foreign currency translation adjustment	(605)	(900)
Unrealized changes in fair value of derivatives	0	(34)
Reclassification adjustment for foreign currency translation included in net earnings (loss)	6	0
Income tax (expense) benefit related to items of comprehensive income (loss)	204	319
Total comprehensive loss	$ (2,094)	$ (2,443)

UNAUDITED CONDENSED CONSOLIDAT6

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss)	$ (1,699)	$ (1,828)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Gain on disposition of assets	(8)	(4)
Foreign currency exchange (gain) loss	188	(18)
Depreciation and amortization	1,331	1,315
Share based payments	326	356
Reclassification from other comprehensive income	6	0
Excess tax benefits from share based payments	(5)	(4)
Deferred income taxes	(648)	(1,405)
Deferred rent	2	4
Bad debt expense	5	(22)
Changes in assets and liabilities:
Trade accounts receivable	298	957
Inventories	(1,683)	(1,853)
Prepaid expenses and other current assets	299	1,140
Income taxes receivable	(378)	(10)
Intangibles and other long term assets	(33)	0
Accounts payable	(1,834)	20
Accrued payroll liabilities and commissions	28	(865)
Customers’ deposits	3,169	(902)
Accrued customer support and warranty costs	(125)	(490)
Income taxes payable	(15)	0
Other accrued liabilities	76	(242)
Other	3	(5)
Cash used in operating activities	(697)	(3,856)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property	12	3
Purchases of property, plant and equipment	(253)	(624)
Cash used in investing activities	(241)	(621)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt	(177)	(181)
Excess tax benefits from share based payments	5	4
Proceeds from issuance of common stock	13	15
Exchange of shares for statutory withholding	(254)	(245)
Cash used in financing activities	(413)	(407)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(1)	(79)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(1,352)	(4,963)
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD	7,726	9,741
CASH AND CASH EQUIVALENTS, END OF THE PERIOD	6,374	4,778
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
Cash paid during the period for interest	110	62
Cash paid during the period for income taxes	$ 5	$ 5

Unaudited condensed consolidat7

Unaudited condensed consolidated financial statements	3 Months Ended
	Dec. 31, 2015
Unaudited Condensed consolidated financial statements [Abstract]
Unaudited condensed consolidated financial statements	Unaudited condensed consolidated financial statements Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted from these unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2015 . The results of operations for the three month period ended December 31, 2015 are not necessarily indicative of the operating results for the full year. The preparation of financial statements in conformity with GAAP 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. In the opinion of management, all adjustments, consisting only of normal recurring accruals, have been made to present fairly the Company's financial position at December 31, 2015 and the results of its operations and its cash flows for the three-month periods ended December 31, 2015 and 2014 . Recent Accounting Pronouncements Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 supersedes nearly all existing revenue recognition guidance under GAAP. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company is evaluating its existing revenue recognition policies to determine whether any contracts in the scope of the guidance will be affected by the new requirements. ASU 2014-09, as amended by ASU 2015-14, is effective for annual reporting periods beginning after December 15, 2017, including interim periods therein. In July 2015, FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory" ("ASU 2015-11"). The previous standard required entities to measure inventory at the lower of cost or market, with market defined as net realizable value or replacement cost. ASU 2015-11 requires entities to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for annual reporting periods beginning after December 15, 2016, including interim periods therein. The Company is evaluating the impact of this update, but does not anticipate that it will have a material effect on its financial statements. In November 2015, FASB issued ASU 2015-17, "Balance Sheet Classification of Deferred Taxes," which eliminates the current requirement to present deferred tax liabilities and assets as current and non-current in a classified balance sheet. Instead, entities will be required to classify all deferred tax assets and liabilities as non-current. This ASU will be effective for the Company beginning in its first quarter of fiscal year 2018 and may be adopted prospectively or retrospectively. Early adoption is permitted. The Company is evaluating the timing of its adoption of this ASU. The Company does not expect its adoption to have a material effect on its financial statements.

Share-based compensation

Share-based compensation	3 Months Ended
	Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-based compensation	Share-based compensation Share-based compensation expense included in the Company's results was as follows (in thousands): Three Months Ended 2015 2014 Cost of goods sold $ 39 $ 50 Operating expenses 287 306 Total share-based compensation expense $ 326 $ 356 Share-based compensation expense remaining capitalized in inventory at December 31, 2015 and 2014 was $22,000 and $25,000 , respectively.

Earnings (loss) per share

Earnings (loss) per share	3 Months Ended
	Dec. 31, 2015
Earnings Per Share [Abstract]
Earnings (loss) per share	Earnings (loss) per share The calculation of the basic and diluted earnings (loss) per share (“EPS”) is as follows (in thousands, except per-share data): Three Months Ended Three Months Ended Loss Shares Per-Share Loss Shares Per-Share Basic EPS: Net loss $ (1,699 ) 6,261 $ (0.27 ) $ (1,828 ) 6,285 $ (0.29 ) Effect of dilutive securities: Common stock options — — — — Warrants — — — — Diluted EPS: Net loss plus assumed conversions $ (1,699 ) 6,261 $ (0.27 ) $ (1,828 ) 6,285 $ (0.29 ) The weighted-average number of diluted shares does not include the potential issuance of common shares which are anti-dilutive. Common stock equivalent shares for the assumed exercise of warrants are calculated using the treasury stock method. The following potentially issuable common shares at December 31, 2015 and 2014 were not included in the calculation of diluted EPS as they were anti-dilutive: Three Months Ended 2015 2014 Common shares from: Assumed exercise of stock options — 10,000 Warrants 250,000 250,000 The warrants expire in March 2016.

Income taxes

Income taxes	3 Months Ended
	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Income taxes	Income taxes The provision (benefit) for income taxes is based on the estimated effective income tax rate for the year. Changes in the estimated effective income tax rate are accounted for in the period the change in estimate occurs. During the first quarter of fiscal 2016, the research and development tax credit was permanently renewed retroactive to January 1, 2015. In the first quarter of fiscal 2016, income tax expense was reduced by approximately $106,000 for additional research and development tax credits related to expenditures incurred during fiscal 2015 due to the renewal of this tax credit. During the first quarter of fiscal 2015, the research and development tax credit was renewed for a one-year period retroactive to January 1, 2014. In the first quarter of fiscal 2015, income tax expense was reduced by approximately $305,000 for additional research and development tax credits related to expenditures incurred during fiscal 2014 due to the changes in tax law that were enacted during the quarter to retroactively renew these tax credits.

Derivative instruments

Derivative instruments	3 Months Ended
	Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative instruments	Derivative instruments The Company uses derivative instruments as risk management tools but does not use derivative instruments for trading or speculative purposes. Derivatives used for interest rate swap hedging purposes are designated and effective as a cash flow hedge of the identified risk exposure related to the Company's variable rate mortgage at the inception of the contract. A hedge is deemed effective if changes in the fair value of the derivative contract are highly correlated with changes in the underlying hedged item at inception of the hedge and over the life of the hedge contract. To the extent the interest rate swap is effective, changes in fair value will be recognized in Other Comprehensive Income over the term of the derivative contract. To the extent the interest rate swap is not effective, changes in fair value will be recognized in earnings. At December 31, 2015 , the Company had an interest rate swap with a notional amount of $5.2 million that effectively fixes the interest rate on its LIBOR-based variable rate mortgage at 6.20% . At December 31, 2015 , the fair value of the swap agreement recorded as a liability in Other long-term liabilities on the Unaudited Condensed Consolidated Balance Sheet was $194,000 . There were gains of $55,000 recognized as part of net earnings in the Unaudited Condensed Consolidated Statements of Operations related to the swap agreement during the three months ended December 31, 2015 , because the interest rate swap was not designated as a hedge due to its ineffectiveness. During the three month period ended December 31, 2015 , the Company recorded $37,000 as interest expense related to the interest rate swap reflecting actual interest payments and settlements on the interest rate swap. The interest rate swap matures in July 2018. The fair value of a previous interest rate swap is being amortized into earnings from Other Comprehensive Income over the original forecasted settlement period of the swap as it is no longer designated as a hedge. As a result, in the first quarter of fiscal 2016, the Company amortized $6,000 of losses from Other Comprehensive Income into net earnings. At December 31, 2015 , the Company had a one-month undesignated forward exchange contract for €4.3 million ( $4.7 million ). Forward exchange contracts are used to manage the Company's foreign currency exchange risk related to its ongoing operations. Net foreign currency gains of $99,000 were recorded for forward exchange contracts in the three month period ended December 31, 2015 as a component of foreign currency gains or losses in Other income (expense) on the Company's Unaudited Condensed Consolidated Statements of Operations. The gains or losses on the Company's foreign exchange contracts are generally offset by gains or losses recorded on the underlying assets or liabilities held in foreign currencies. At December 31, 2015 , the Company had no assets or liabilities for settlements under these forward contracts on the Company's Unaudited Condensed Consolidated Balance Sheet.

Fair value measurements

Fair value measurements	3 Months Ended
	Dec. 31, 2015
Fair Value Disclosures [Abstract]
Fair value measurements	Fair value measurements Fair value measurements are classified under the following hierarchy: • Level 1 – Quoted prices for identical instruments in active markets. • Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets. • Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable. When available, the Company uses quoted market prices to determine fair value and classify such measurements within Level 1. In some cases where market prices are not available, the Company makes use of observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market processes are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters such as interest rates, yield curves and currency rates. These measurements are classified within Level 3. Derivative financial instruments Interest rate swap agreements are measured on a recurring basis based on quoted prices for similar financial instruments and other observable inputs which approximate fair value. The fair value of foreign currency forward contracts is based on the differential between contract price and the market-based forward rate. The following table presents the Company's assets and liabilities that are measured and recorded at fair value on a recurring basis consistent with the fair value hierarchy provisions: Fair Value Measurements at December 31, 2015 (in thousands) Description Level 1 Level 2 Level 3 Total Assets/ Derivatives: Interest rate swap — $ (194 ) — $ (194 ) Forward exchange contracts — — — — At December 31, 2015 , the Company also had long-term debt of approximately $5.7 million . The Company's long-term debt is recorded at historical cost and the Company has not elected to value such financial instruments at fair value. The fair value of the debt approximated its carrying value based on the borrowing rates currently available to the Company for loans with similar terms and maturities. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Forward exchange contracts had a fair value of zero at the reporting date, as these contracts were entered into as of that date. Changes in assumptions could significantly affect these estimates. At December 31, 2015 , the Company's non-controlling interest in Proditec SAS had a carrying value of approximately $1.1 million . This investment is being accounted for under the cost method. The fair value of the Company's investment in Proditec was not estimated as there were no events or changes in circumstances that may have had a significant adverse effect on the fair value of the investment, and our management determined that it was not practicable to estimate the fair value of the investment. Further, there are no quoted market prices for the Company's investment, and sufficient information is not readily available for the Company to utilize a valuation model to determine its fair value without incurring excessive costs relative to the materiality of the investment. The Company's cost method investment is evaluated for potential other-than-temporary impairment on at least a quarterly basis or when an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment.

Financing arrangements

Financing arrangements	3 Months Ended
	Dec. 31, 2015
Debt Disclosure [Abstract]
Financing arrangements	Financing arrangements The Company's domestic credit facility provides for a maximum of $20.3 million consisting of a three-year term loan of $5.3 million and revolving loans up to the lesser of $15.0 million or a borrowing base calculated based on the outstanding amount of the Company's eligible accounts receivable and eligible inventory. The credit facility also provides for a credit sub-facility of up to $4.0 million for standby letters of credit. The credit facility matures on July 19, 2018 . The revolving credit facility bears interest, at the Company's option, at either the lender's base lending rate or LIBOR using a tiered structure depending on the Company's achievement of a specified financial ratio. The Company's base lending rate option is the lender's base lending rate plus 0.75% , 1.00% or 1.25% per annum. The Company's LIBOR option is LIBOR plus 2.25% , 2.50% or 2.75% . The term loan bears interest, at the Company's option, at either the lender's base lending rate plus 1.75% or the one-, two-, or three-month LIBOR rate plus 3.25% . The Company also simultaneously entered into an interest rate swap agreement with the lender to fix the term loan interest rate at 6.20% . The lending facility is secured by the Company's receivables, equipment and fixtures, inventory, general intangibles, subsidiary stock, securities, investment property, financial assets, real property, and certain other assets. The credit facility contains covenants related to minimum liquidity levels and certain financial covenants that will be applicable only if the Company does not exceed certain calculated total unrestricted cash and credit availability or an event of default occurs. The credit facility permits capital expenditures to a certain level and contains customary default and acceleration provisions. The credit facility also restricts, above certain levels, acquisitions, incurrence of additional indebtedness, payment of dividends and lease expenditures. At December 31, 2015 , the Company had no outstanding borrowings under the revolving line of credit and $1.4 million of outstanding standby letters of credit. The Company's Belgian subsidiary has a credit accommodation with a commercial bank in Belgium. This credit accommodation totals €2.7 million ( $2.9 million ) and includes an operating line of €800,000 ( $0.9 million ), a bank guarantee facility of €500,000 ( $0.5 million ), and loan agreement provisions of €1.4 million ( $1.5 million ). The operating line and bank guarantee facility are secured by all of the subsidiary's current assets. The Belgian operating line bears interest at the bank's prime rate, plus 1.25% . At December 31, 2015 , the interest rate was 9.75% and the subsidiary had no borrowings under the operating line. At December 31, 2015 , the subsidiary had various loans outstanding under the loan agreement provision totaling €440,000 ( $477,000 ). The fixed interest rates on these loans ranged from 2.91% to 3.98% . The loans mature between November 2016 and November 2017 . At December 31, 2015 , the subsidiary had no bank guarantees outstanding under the bank guarantee facility. Additionally, the subsidiary had a subordinated loan with another European lender of €26,000 ( $28,000 ). The loan has a fixed interest rate of 4.99% and matures in March 2016.

Contractual guarantees and inde

Contractual guarantees and indemnities	3 Months Ended
	Dec. 31, 2015
Guarantees [Abstract]
Contractual guarantees and indemnities	Contractual guarantees and indemnities Product warranties The Company provides warranties on its products ranging from ninety days to five years following the date of shipment, the majority of which are for periods of one year or less. Management establishes allowances for warranty costs based upon the types of products shipped and product warranty experience. The provision for warranty costs is charged to cost of sales at the time of sale, and it is periodically assessed for adequacy based on changes in these factors. A reconciliation of the changes in the Company’s allowances for warranties for the three months ended December 31, 2015 and 2014 is as follows (in thousands): Three Months Ended December 31, 2015 2014 Beginning balance $ 2,255 $ 2,151 Warranty costs incurred (739 ) (595 ) Warranty expense accrued 624 217 Translation adjustments (27 ) (29 ) Ending balance $ 2,113 $ 1,744 Intellectual property and general contractual indemnities The Company, in the normal course of business, provides specific, limited indemnification to its customers for liability and damages related to intellectual property rights. In addition, the Company may enter into contracts with customers where it agrees to indemnify the customer for personal injury or property damage caused by the Company's products and services. Indemnification is typically limited to replacement of the items or the actual price of the products and services. The Company maintains product liability insurance as well as errors and omissions insurance, which may provide a source of recovery in the event of an indemnification claim, but does not maintain insurance coverage for claims related to intellectual property rights. Historically, any amounts payable under these indemnifications have not had a material effect on the Company's business, financial condition, results of operations, or cash flows. The Company has not recorded any provision for future obligations under these indemnifications. If the Company determines it is probable that a loss has occurred under these indemnifications, then any such reasonably estimable loss would be recognized. Director and officer indemnities The Company has entered into indemnification agreements with its directors and certain executive officers that require the Company to indemnify such individuals against certain expenses, judgments and fines in third-party and derivative proceedings. The Company may recover, under certain circumstances, some of the expenses and liabilities that arise in connection with such indemnifications under the terms of its directors’ and officers’ insurance policies. The Company has not recorded any provision for future obligations under these indemnification agreements. Bank guarantees and letters of credit At December 31, 2015 , the Company had standby letters of credit totaling $1.5 million , which includes secured bank guarantees under the Company's domestic and European credit facilities. If the Company fails to meet its contractual obligations, these bank guarantees and letters of credit may become liabilities of the Company. This amount consists of approximately $1.4 million of outstanding performance guarantees secured by bank guarantees under the Company's domestic credit facility, $0.1 million of outstanding performance guarantees under the Company's previous domestic credit facility and no outstanding performance guarantees secured by bank guarantees under the Company's Belgian subsidiary's credit facility. Bank guarantees arise when the Company collects customer deposits prior to order fulfillment. The customer deposits received are recorded as current liabilities on the Company's balance sheet. The bank guarantees repayment of the customer deposit in the event an order is not completed. The bank guarantee is canceled upon shipment and transfer of title. These bank guarantees arise in the normal course of the Company's business and are not deemed to expose the Company to any significant risks since they are satisfied as part of the design and manufacturing process.

Termination Costs

Termination Costs	3 Months Ended
	Dec. 31, 2015
Restructuring and Related Activities [Abstract]
Termination Costs	Termination Costs On December 31, 2015 , the Company incurred approximately $680,000 in costs related to restructuring charges, the majority of which relate to one-time termination benefits. These costs were expensed as operating expenses in the first quarter of fiscal 2016 . At December 31, 2015 , $680,000 remained accrued as liabilities for amounts expensed in the first quarter of fiscal 2016 that were not paid as of December 31, 2015 . The Company expects that the majority of these amounts will be paid in the second quarter of fiscal 2016 .

Share-based compensation (Table

Share-based compensation (Tables)	3 Months Ended
	Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-based compensation expense included in the Company's results	Share-based compensation expense included in the Company's results was as follows (in thousands): Three Months Ended 2015 2014 Cost of goods sold $ 39 $ 50 Operating expenses 287 306 Total share-based compensation expense $ 326 $ 356

Earnings (loss) per share (Tabl

Earnings (loss) per share (Tables)	3 Months Ended
	Dec. 31, 2015
Earnings Per Share [Abstract]
Schedule of earnings per share, basic and diluted	The calculation of the basic and diluted earnings (loss) per share (“EPS”) is as follows (in thousands, except per-share data): Three Months Ended Three Months Ended Loss Shares Per-Share Loss Shares Per-Share Basic EPS: Net loss $ (1,699 ) 6,261 $ (0.27 ) $ (1,828 ) 6,285 $ (0.29 ) Effect of dilutive securities: Common stock options — — — — Warrants — — — — Diluted EPS: Net loss plus assumed conversions $ (1,699 ) 6,261 $ (0.27 ) $ (1,828 ) 6,285 $ (0.29 )
Antidilutive securities excluded from computation of earnings per share	The following potentially issuable common shares at December 31, 2015 and 2014 were not included in the calculation of diluted EPS as they were anti-dilutive: Three Months Ended 2015 2014 Common shares from: Assumed exercise of stock options — 10,000 Warrants 250,000 250,000

Fair value measurements (Tables

Fair value measurements (Tables)	3 Months Ended
	Dec. 31, 2015
Fair Value Disclosures [Abstract]
Company's assets and liabilities measured and recorded at fair value on a recurring basis	The following table presents the Company's assets and liabilities that are measured and recorded at fair value on a recurring basis consistent with the fair value hierarchy provisions: Fair Value Measurements at December 31, 2015 (in thousands) Description Level 1 Level 2 Level 3 Total Assets/ Derivatives: Interest rate swap — $ (194 ) — $ (194 ) Forward exchange contracts — — — —

Contractual guarantees and in19

Contractual guarantees and indemnities (Tables)	3 Months Ended
	Dec. 31, 2015
Guarantees [Abstract]
Reconciliation of changes in Company's allowances for warranties	A reconciliation of the changes in the Company’s allowances for warranties for the three months ended December 31, 2015 and 2014 is as follows (in thousands): Three Months Ended December 31, 2015 2014 Beginning balance $ 2,255 $ 2,151 Warranty costs incurred (739 ) (595 ) Warranty expense accrued 624 217 Translation adjustments (27 ) (29 ) Ending balance $ 2,113 $ 1,744

Share-based compensation (Detai

Share-based compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 326	$ 356
Share-based compensation expense remaining capitalized in inventory	22	25
Cost of goods sold
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	39	50
Operating expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 287	$ 306

Earnings (loss) per share (Deta

Earnings (loss) per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Basic EPS:
Net earnings (loss)	$ (1,699)	$ (1,828)
Shares used in per share calculations - basic (in shares)	6,261,000	6,285,000
- basic (in dollars per share)	$ (0.27)	$ (0.29)
Effect of dilutive securities:
Loss	$ 0	$ 0
Common stock options (in shares)	0	0
Warrants and Rights Outstanding	$ 0	$ 0
Warrants and Rights Outstanding (in shares)	0	0
Diluted EPS:
Net earnings (loss)	$ (1,699)	$ (1,828)
Shares used in per share calculations - diluted (in shares)	6,261,000	6,285,000
- diluted (in dollars per share)	$ (0.27)	$ (0.29)
Assumed exercise of stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	10,000
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	250,000	250,000

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Research Tax Credit Carryforward
Tax Credit Carryforward [Line Items]
Income tax expense reduction next quarter	$ 106	$ 305

Derivative instruments (Details

Derivative instruments (Details) € in Millions	3 Months Ended
	Dec. 31, 2015USD ($)	Dec. 31, 2014USD ($)	Dec. 31, 2015EUR (€)	Dec. 31, 2015USD ($)
Derivative [Line Items]
Long-term debt				$ 5,700,000
Reclassification adjustment for foreign currency translation included in net earnings (loss)	$ (6,000)	$ 0
Interest rate swap
Derivative [Line Items]
Long-term debt				$ 5,200,000
Variable interest rate on the derivative (in hundredths)			6.20%	6.20%
Gain (Loss) on net derivative	55,000
Interest expense	37,000
Reclassification adjustment for foreign currency translation included in net earnings (loss)	6,000
Forward exchange contracts
Derivative [Line Items]
Fair value of the net derivative liability				$ 0
Gain (Loss) on net derivative	$ 99,000
Derivative amount			€ 4.3	4,700,000
Other long-term liabilities | Interest rate swap
Derivative [Line Items]
Fair value of the net derivative liability				$ 194,000

Fair value measurements (Detail

Fair value measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Sep. 30, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	$ 5,700
Carrying value of minority interest in Proditec SAS	1,127	$ 1,127
Interest rate swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives	(194)
Forward exchange contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives	0
Level 1 | Interest rate swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives	0
Level 1 | Forward exchange contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives	0
Level 2 | Interest rate swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives	(194)
Level 2 | Forward exchange contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives	0
Level 3 | Interest rate swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives	0
Level 3 | Forward exchange contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives	0
Interest rate swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	5,200
Proditec SAS
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value of minority interest in Proditec SAS	$ 1,100

Financing arrangements (Details

Financing arrangements (Details)	Jul. 20, 2015USD ($)	Dec. 31, 2015EUR (€)	Dec. 31, 2015USD ($)
Line of Credit Facility [Line Items]
Interest rate		4.99%	4.99%
Line of Credit | Loans Payable | Interest rate swap
Line of Credit Facility [Line Items]
Fixed interest rate (in hundredths)	6.20%
Notes Payable
Line of Credit Facility [Line Items]
Long-term Debt, Gross		€ 26,000	$ 28,000
Domestic Credit Facility | Line of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity			1,400,000
Domestic Credit Facility | Line of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 20,300,000
Domestic Credit Facility | Line of Credit | Revolving Credit Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	15,000,000
Domestic Credit Facility | Line of Credit | Credit sub-facility standby letters of credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity	4,000,000
Domestic Credit Facility | Line of Credit | Loans Payable
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 5,300,000
Term of loan	3 years
Commercial bank in Belgium
Line of Credit Facility [Line Items]
Maximum borrowing capacity		2,700,000	2,900,000
Commercial bank in Belgium | Line of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity		€ 800,000	$ 866,880
Interest rate (in hundredths)		9.75%	9.75%
Outstanding at the end of the period		€ 440,000	$ 477,000
Commercial bank in Belgium | Outstanding performance guarantees
Line of Credit Facility [Line Items]
Maximum borrowing capacity		500,000	541,800
Outstanding at the end of the period | €		0
Commercial bank in Belgium | Commercial Loan
Line of Credit Facility [Line Items]
Maximum borrowing capacity		€ 1,400,000	$ 1,500,000
Prime Rate | Minimum | Commercial bank in Belgium | Line of Credit
Line of Credit Facility [Line Items]
Basis spread on variable rate		1.25%
Interest rate during period		2.91%
Prime Rate | Maximum | Commercial bank in Belgium | Line of Credit
Line of Credit Facility [Line Items]
Interest rate during period		3.98%
LIBOR | Line of Credit | Loans Payable
Line of Credit Facility [Line Items]
Basis spread on variable rate	3.25%
Base Rate | Line of Credit | Loans Payable
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.75%
Tier One | LIBOR | Line of Credit | Revolving Credit Facility
Line of Credit Facility [Line Items]
Basis spread on variable rate	2.25%
Tier One | Base Rate | Line of Credit | Revolving Credit Facility
Line of Credit Facility [Line Items]
Basis spread on variable rate	0.75%
Tier Two | LIBOR | Line of Credit | Revolving Credit Facility
Line of Credit Facility [Line Items]
Basis spread on variable rate	2.50%
Tier Two | Base Rate | Line of Credit | Revolving Credit Facility
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.00%
Tier Three | LIBOR | Line of Credit | Revolving Credit Facility
Line of Credit Facility [Line Items]
Basis spread on variable rate	2.75%
Tier Three | Base Rate | Line of Credit | Revolving Credit Facility
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.25%

Financing arrangements Notes pa

Financing arrangements Notes payable (Details)	Dec. 31, 2015EUR (€)	Dec. 31, 2015USD ($)
Debt Instrument [Line Items]
Interest rate	4.99%	4.99%
Notes Payable
Debt Instrument [Line Items]
Long-term Debt, Gross	€ 26,000	$ 28,000

Contractual guarantees and in27

Contractual guarantees and indemnities (Details) - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Guarantor Obligations [Line Items]
Product warranty period, minimum	90 days
Product warranty period, maximum	5 years
Reconciliation of changes in Company's allowances for warranties [Roll Forward]
Beginning balance	$ 2,255,000	$ 2,151,000
Warranty costs incurred	(739,000)	(595,000)
Warranty expense accrued	624,000	217,000
Translation adjustments	(27,000)	(29,000)
Ending balance	2,113,000	$ 1,744,000
Financial Standby Letter of Credit
Guarantor Obligations [Line Items]
Guarantor obligations, maximum exposure, undiscounted	1,500,000
Outstanding performance guarantees | Subsidiaries-Belgium
Guarantor Obligations [Line Items]
Guarantor obligations, maximum exposure, undiscounted	0
Domestic Line of Credit
Guarantor Obligations [Line Items]
Guarantor obligations, maximum exposure, undiscounted	1,400,000
Domestic Line Of Credit, Previous
Guarantor Obligations [Line Items]
Guarantor obligations, maximum exposure, undiscounted	$ 100,000

Termination Costs (Details)

Termination Costs (Details) - Cost Reduction Initiatives - One-time Termination Benefits $ in Thousands	3 Months Ended
	Dec. 31, 2015USD ($)
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost	$ 680
Restructuring Reserve	$ 680