Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2022 | Aug. 01, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ALJJ | |
Entity Registrant Name | ALJ REGIONAL HOLDINGS, INC | |
Entity Central Index Key | 0001438731 | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity File Number | 001-37689 | |
Entity Tax Identification Number | 13-4082185 | |
Entity Address, Address Line One | 244 Madison Avenue | |
Entity Address, Address Line Two | PMB #358 | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10016 | |
City Area Code | 888 | |
Local Phone Number | 486-7775 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 38,660,330 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 27,944,000 | $ 2,276,000 |
Short-term investments | 99,679,000 | 0 |
Accounts receivable, net of allowance for doubtful accounts of $1,300 and $- on March 31, 2022 and September 30, 2021 | 37,679,000 | 57,660,000 |
Prepaid expenses and other current assets | 4,861,000 | 8,852,000 |
Current assets of discontinued operations | 20,608,000 | |
Total current assets | 170,163,000 | 89,396,000 |
Property and equipment, net | 10,756,000 | 22,864,000 |
Operating lease right-of-use assets | 17,647,000 | 29,048,000 |
Intangible assets, net | 9,980,000 | 11,906,000 |
Collateral deposits | 4,123,000 | 487,000 |
Other assets | 5,636,000 | 792,000 |
Long-term assets of discontinued operations | 60,160,000 | |
Total assets | 218,305,000 | 214,653,000 |
Current liabilities: | ||
Accounts payable | 5,990,000 | 11,255,000 |
Accrued expenses | 17,437,000 | 20,815,000 |
Income taxes payable | 3,846,000 | 38,000 |
Deferred revenue and customer deposits | 4,053,000 | |
Term loans, net of deferred loan costs - current installments | 2,692,000 | |
Finance lease obligations - current installments | 528,000 | 765,000 |
Operating lease obligations - current installments | 3,200,000 | 4,722,000 |
Current portion of workers' compensation reserve | 900,000 | 710,000 |
Other current liabilities | 3,679,000 | 3,686,000 |
Current liabilities of discontinued operations | 10,192,000 | |
Total current liabilities | 35,580,000 | 58,928,000 |
Line of credit, net of deferred loan costs | 5,490,000 | |
Term loans, less current portion, net of deferred loan costs | 6,026,000 | 93,484,000 |
Deferred revenue, less current portion | 369,000 | |
Workers' compensation reserve, less current portion | 1,902,000 | 1,749,000 |
Finance lease obligations, less current installments | 332,000 | |
Operating lease obligations, less current installments | 20,167,000 | 32,767,000 |
Deferred tax liabilities, net | 17,000 | 852,000 |
Other non-current liabilities | 440,000 | 6,265,000 |
Long-term liabilities of discontinued operations | 1,841,000 | |
Total liabilities | 64,132,000 | 202,077,000 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value; authorized – 100,000 shares; 42,409 and 42,406 issued and outstanding on March 31, 2022 and September 30, 2021, respectively | 424,000 | 424,000 |
Additional paid-in capital | 288,430,000 | 288,355,000 |
Accumulated deficit | (134,681,000) | (276,203,000) |
Total stockholders’ equity | 154,173,000 | 12,576,000 |
Total liabilities and stockholders’ equity | $ 218,305,000 | $ 214,653,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,300 | |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 42,409,000 | 42,406,000 |
Common stock, shares outstanding | 42,409,000 | 42,406,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Revenues [Abstract] | |||||
Revenue | $ 25,110 | $ 72,754 | $ 168,403 | $ 243,147 | |
Other revenue | 32,511 | 32,511 | |||
Total revenue and other revenue | 57,621 | 72,754 | 200,914 | 243,147 | |
Costs, expenses, and other: | |||||
Cost of revenue | 52,352 | 59,209 | 178,071 | 203,247 | |
Selling, general, and administrative expense | 7,443 | 15,764 | 38,042 | 43,487 | |
Lease impairment | 2,158 | ||||
Gain on sale of assets and other | (118,014) | (117,988) | |||
Total operating costs, expenses, and other, net | (58,219) | 74,973 | 100,283 | 246,734 | |
Operating income (loss) | 115,840 | (2,219) | 100,631 | (3,587) | |
Other (expense) income, net: | |||||
Interest income | 127 | 127 | |||
Interest expense | (151) | (2,623) | (5,449) | (7,656) | |
Loss on debt extinguishment | (3,884) | (1,914) | (3,884) | (1,914) | |
Total other expense, net | (3,908) | (4,537) | (9,206) | (9,570) | |
Income (loss) from continuing operations before income taxes | 111,932 | (6,756) | 91,425 | (13,157) | |
Provision for income taxes | (6,065) | (70) | (6,010) | (244) | |
Net income (loss) from continuing operations | 105,867 | (6,826) | 85,415 | (13,401) | |
Net income from discontinued operations, net of income taxes | 47,963 | 3,322 | 56,107 | 7,695 | |
Net income (loss) | $ 153,830 | $ (3,504) | $ 141,522 | $ (5,706) | |
Income (loss) per share of common stock-basic: | |||||
Continuing operations | $ 2.50 | $ (0.16) | $ 2.01 | $ (0.32) | |
Discontinued operations | 1.13 | 0.08 | 1.32 | 0.18 | |
Net income (loss) per share | [1] | 3.63 | (0.08) | 3.34 | (0.13) |
Income (loss) per share of common stock-diluted: | |||||
Continuing operations | 1.93 | (0.16) | 1.56 | (0.32) | |
Discontinued operations | 0.87 | 0.06 | 1.03 | 0.14 | |
Net income (loss) per share | [2] | $ 2.81 | $ (0.08) | $ 2.59 | $ (0.13) |
Weighted average shares of common stock outstanding: | |||||
Basic | 42,409,000 | 42,321,000 | 42,408,000 | 42,320,000 | |
Diluted | 54,818,000 | 54,503,000 | 54,735,000 | 54,416,000 | |
[1] Amounts may not add due to rounding. Amounts may not add due to rounding. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating activities | ||
Net income (loss) | $ 141,522 | $ (5,706) |
Adjustments to reconcile net income (loss) to cash (used for) provided by operating activities: | ||
Depreciation and amortization expense | 8,630 | 9,455 |
Loss on debt extinguishment | 3,884 | 1,914 |
Lease impairment | 2,158 | |
Amortization of discount of short-term investments | (83) | |
Interest expense and other bank fees accreted to term loans | 1,691 | |
Change in fair value of contingent consideration | 300 | 1,100 |
Amortization of deferred loan costs | 627 | 527 |
Stock-based compensation expense | 154 | 126 |
Provision (reversal) for bad debts | 1,300 | (17) |
Gain on sale of assets and other, excluding cash transaction costs paid | (124,301) | |
(Gain) loss on sale of subsidiaries, excluding cash transaction costs paid | (66,221) | 761 |
Deferred income taxes | (835) | 38 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 18,681 | 1,298 |
Prepaid expenses, collateral deposits, and other current assets | 3,991 | (392) |
ROU assets/ROU liabilities | (1,160) | (494) |
Other assets | (3,480) | 960 |
Accounts payable | (5,227) | (3,157) |
Accrued expenses | (4,393) | 2,797 |
Income tax payable | 3,808 | 5 |
Deferred revenue | (4,422) | (4,820) |
Other current liabilities and other non-current liabilities | (5,489) | 2,914 |
Discontinued operations, net | 1,331 | 11,662 |
Cash (used for) provided by operating activities | (29,225) | 20,662 |
Investing activities | ||
Capital expenditures | (820) | (3,001) |
Proceeds from the sale of subsidiaries | 135,928 | 438 |
Proceeds from the sale of assets | 127,442 | |
Purchase of investments | (104,596) | |
Discontinued operations, net | (2,303) | (3,329) |
Cash provided by (used for) investing activities | 155,651 | (5,892) |
Financing activities | ||
Proceeds from term loans | 95,000 | |
Payments on term loans | (94,050) | (76,398) |
Payments on line of credit, net | (5,490) | (14,417) |
Deferred loan costs | (283) | (4,164) |
Payments on finance leases | (607) | (2,350) |
Payment of debt extinguishment penalties and other | (328) | (743) |
Discontinued operations, net | (9,333) | |
Cash used for financing activities | (100,758) | (12,405) |
Change in cash and cash equivalents | 25,668 | 2,365 |
Cash and cash equivalents at beginning of the year | 2,276 | 6,050 |
Cash and cash equivalents at end of the year | 27,944 | 8,415 |
Cash paid during the period for: | ||
Interest | 4,933 | 6,878 |
Taxes | $ 16,251 | 89 |
Non-cash investing and financing activities: | ||
Capital equipment purchases financed with term loans | $ 4,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Beginning balance at Sep. 30, 2020 | $ 423 | $ 288,193 | $ (271,560) | |
Stock-based compensation expense - options | 47 | |||
Net income (loss) | $ (5,706) | (5,706) | ||
Ending balance at Jun. 30, 2021 | 11,397 | 423 | 288,240 | (277,266) |
Beginning balance at Mar. 31, 2021 | 423 | 288,225 | (273,762) | |
Stock-based compensation expense - options | 15 | |||
Net income (loss) | (3,504) | (3,504) | ||
Ending balance at Jun. 30, 2021 | 11,397 | 423 | 288,240 | (277,266) |
Beginning balance at Sep. 30, 2021 | 12,576 | 424 | 288,355 | (276,203) |
Stock-based compensation expense - options | 75 | |||
Net income (loss) | 141,522 | 141,522 | ||
Ending balance at Jun. 30, 2022 | 154,173 | 424 | 288,430 | (134,681) |
Beginning balance at Mar. 31, 2022 | 424 | 288,415 | (288,511) | |
Stock-based compensation expense - options | 15 | |||
Net income (loss) | 153,830 | 153,830 | ||
Ending balance at Jun. 30, 2022 | $ 154,173 | $ 424 | $ 288,430 | $ (134,681) |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. ORGANIZATION AND BASIS OF PRESENTATION Organization ALJ Regional Holdings, Inc. (including subsidiaries, referred to collectively herein as “ALJ” or “Company”) is a holding company. During the three and nine months ended June 30, 2022, ALJ consisted of the following wholly-owned subsidiaries: • Faneuil, Inc. (including its subsidiaries, “Faneuil”) . Faneuil is a leading provider of call center services, back-office operations, staffing services, and toll collection services to government and regulated commercial clients across the United States, focusing on the healthcare, utility, transportation, and toll revenue collection industries. Faneuil is headquartered in Hampton, Virginia. ALJ acquired Faneuil in October 2013. On April 1, 2022, ALJ completed the sale of Faneuil’s tolling and transportation and health benefit exchange vertical. See Basis of Presentation below. • Phoenix Color Corp. (including its subsidiaries, “Phoenix”) . Phoenix is a leading manufacturer of book components, educational materials and related products producing value-added components, heavily illustrated books and commercial specialty products using a broad spectrum of materials and decorative technologies. Phoenix is headquartered in Hagerstown, Maryland. ALJ acquired Phoenix in August 2015. On April 13, 2022, ALJ completed its sale of Phoenix. See Basis of Presentation below. ALJ owned a third segment, Floors-N-More, LLC, d/b/a, Carpets N’ More (“Carpets”). Carpets was a floor covering retailer in Las Vegas, Nevada, and a provider of multiple products for the commercial, retail and home builder markets including all types of flooring, countertops, cabinets, window coverings and garage/closet organizers. ALJ acquired and disposed of Carpets in April 2014 and February 2021, respectively. See Basis of Presentation below. As a result of the Phoenix Sale, ALJ had one operating segment for all periods presented. Basis of Presentation Overall The accompanying condensed consolidated financial statements include the accounts of ALJ and its subsidiaries and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. All intercompany transactions and balances have been eliminated in consolidation. The financial information included herein is unaudited, and reflects all adjustments which are, in the opinion of management, of a normal recurring nature and necessary for a fair statement of the results for the periods presented. Interim financial results are not necessarily indicative of financial results for a full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with ALJ’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021, filed with the SEC on December 20, 2021. Discontinued Operations – Carpets In February 2021, ALJ completed the sale of Carpets (the “Carpets Sale”). The Company determined that the Carpets Sale qualified as discontinued operations as defined by Accounting Standards Codification (“ASC”) 205-20-45, Presentation of Financial Statements — Discontinued Operations — Other Presentation Matters (“ASC 205”) because the Carpets Sale represented a strategic shift with a major effect on the Company's operations and financial results. Pursuant to ASC 205, Carpets results of operations and cash flows were classified as discontinued operations for the nine months ended June 30, 2021. See Note 4 for additional financial information about Carpets’ discontinued operations. Discontinued Operations – Phoenix In February 2022, ALJ entered into a stock purchase agreement (the “Stock Purchase Agreement”) to sell all of the outstanding shares of common stock of Phoenix (the “Phoenix Sale”) for cash consideration, including post-closing working capital adjustments, totaling approximately $ 135.9 million. The Phoenix Sale closed on April 13, 2022. The Company recorded a gain on sale of discontinued operations, net of related income taxes, of $ 46.8 million during the three months ended June 30, 2022. The Company determined that the Phoenix Sale qualified as discontinued operations as defined by ASC 205 because the Phoenix Sale represented a strategic shift with a major effect on the Company's operations and financial results. Pursuant to ASC 205, Phoenix assets, liabilities, results of operations, and cash flows were classified as discontinued operations for all periods presented. See Note 4 for additional financial information about Phoenix’s discontinued operations. Asset Sale - Faneuil In December 2021, ALJ entered into an agreement to sell certain net assets of Faneuil’s tolling and transportation vertical and health benefit exchange vertical (the “Faneuil Asset Sale”). The Faneuil Asset Sale closed on April 1, 2022, for cash consideration of $ 142.3 million less an indemnification escrow amount of approximately $ 15.0 million. Faneuil is also eligible to receive additional earn-out payments based upon the performance of certain customer agreements in an aggregate amount of up to $ 25.0 million. The Company recorded a gain on sale of assets, net of related income taxes, of $ 112.0 million during the three and nine months ended June 30, 2022. See Note 4 for additional financial information about Faneuil's gain on sale of assets. In connection with the Faneuil Asset Sale, Faneuil entered into a Transition Services Agreement ("TSA"), which is designed to ensure and facilitate an orderly transfer of the tolling and transportation vertical and health benefit exchange vertical. The services provided under the TSA will terminate at various times between 30 days and 365 days from the closing date of the Faneuil Asset Sale and can be renewed, in whole or in part, in 30-day increments, for a maximum of 180 days. Revenue earned from the TSA was disclosed as other revenue on the consolidated statements of operations during the three and nine months ended June 30, 2022. TSA-related expenses were recorded in their natural expense classification. The Company determined that the Faneuil Asset Sale did not qualify as discontinued operations as defined by ASC 205 because the Faneuil Asset Sale does not represent a strategic shift with a major effect on the Company's operations and financial results. As such, Faneuil assets, liabilities, results of operations, and cash flows were included with continuing operations for all periods presented. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Although actual results could differ materially from those estimates, such estimates are based on the best information available to management and management’s best judgments at the time. Significant estimates and assumptions by management are used for, but are not limited to, determining the fair value of assets and liabilities, including intangible assets acquired and allocation of acquisition purchase prices, estimated useful lives of certain assets, recoverability of long-lived and intangible assets, the recoverability of goodwill, the realizability of deferred tax assets, stock-based compensation, the likelihood of material loss as a result of loss contingencies, customer lives used for revenue recognition, the allowance for doubtful accounts and inventory reserves, and calculation of insurance reserves. The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID-19 pandemic. Actual results may differ materially from estimates. As the impact of the COVID-19 pandemic continues to develop, many of these estimates could require increased judgment and carry a higher degree of variability and volatility, and may change materially in future periods. |
Recent Accounting Standards
Recent Accounting Standards | 9 Months Ended |
Jun. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Standards | 2. RECENT ACCOUNTING STANDARDS Recent Accounting Pronouncements Adopted Internal-Use Software In August 2018, the Financial Accounting Standards Boards (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, to provide guidance on implementation costs incurred in a cloud computing arrangement (“CCA”) that is a service contract. ASU 2018-15 aligns the accounting for such costs with the guidance on capitalizing costs associated with developing or obtaining internal-use software. Specifically, ASU 2018-15 amends ASC 350, Intangibles–Goodwill and Other , to include in its scope implementation costs of a CCA that is a service contract and clarifies that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized in such a CCA. ALJ adopted ASU 2018-15 on October 1, 2021. The impact of ASU 2018-15 on ALJ’s consolidated financial statements and related disclosures was not material. Debt with Conversion and Other Options In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ALJ adopted ASU 2020-06 on October 1, 2021 using the full retrospective basis. The impact of ASU 2020-06 on ALJ’s consolidated financial statements and related disclosures was not material. Accounting Standards Not Yet Adopted Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) , which addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. ASU 2021-04 will be effective for ALJ on October 1, 2022. ALJ does not anticipate the adoption of ASU 2021-04 to significantly impact its consolidated financial statements and related disclosures. Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The new guidance requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , as if it had originated the contracts. This approach differs from the current requirement to measure contract assets and contract liabilities acquired in a business combination at fair value. ASU 2021-08 will be effective for ALJ on October 1, 2023. The adoption impact of the new standard will depend on the magnitude of future acquisitions. The standard will not impact acquired contract assets or liabilities from business combinations occurring prior to the adoption date. |
Revenue recognition
Revenue recognition | 9 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 3. REVENUE RECOGNITION Disaggregation of Revenue As a result of the Phoenix Sale described in Note 1, all revenue reported was attributable to Faneuil for all periods presented. Revenue by contract type was as follows for the three and nine months ended June 30, 2022 and 2021: Three Months Ended June 30, Nine Months Ended June 30, ( in thousands ) 2022 2021 2022 2021 Faneuil: Utility $ 14,295 $ 13,709 $ 40,854 $ 40,529 Healthcare 9,147 31,318 70,141 108,020 Other 1,327 965 2,791 3,576 Government 341 4,148 2,633 26,698 Transportation — 22,614 51,984 64,324 Total revenue 25,110 72,754 168,403 243,147 Other revenue 32,511 — 32,511 — Total revenue and other revenue $ 57,621 $ 72,754 $ 200,914 $ 243,147 Substantially all of Faneuil revenue is recognized over time. Other Revenue As discussed in Note 1, other revenue was attributable to Faneuil's TSA. The TSA has a single performance obligation, as the promises to provide the identified services are not distinct within the context of the TSA. The single performance obligation constitutes a series of distinct services as the customer benefits as services are provided. Service revenue is recognized over time using the input method. The input method provides a faithful depiction of the performance toward complete satisfaction of the performance obligation and can be tied to the direct cost incurred. Contract Assets and Liabilities The following table provides information about consolidated contract assets and contract liabilities at the end of each reporting period: June 30, September 30, ( in thousands ) 2022 2021 Contract assets: Unbilled revenue (1) $ — $ 69 Total contract assets $ — $ 69 Contract liabilities: Deferred revenue $ — $ 4,422 Total contract liabilities $ — $ 4,422 (1) Included in prepaid expenses and other current assets on the consolidated balance sheets. Unbilled revenue represents rights to consideration for services provided when the right is conditioned on something other than passage of time (for example, meeting a milestone for the right to bill under the cost-to-cost measure of progress). Unbilled revenue is transferred to accounts receivable when the rights become unconditional. The following table provides changes in consolidated contract assets and contract liabilities from September 30, 2021 to June 30, 2022: ( in thousands ) Contract Contract Balance, September 30, 2021 $ 69 $ 4,422 Additions to contract assets 26 — Revenue recognized — ( 8,403 ) Cash received from customer and other ( 95 ) 3,981 Balance, June 30, 2022 $ — $ — Deferred Revenue and Remaining Performance Obligations Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from call center services, including non-refundable payments made prior to operations. Deferred revenue is recognized as revenue when transfer of control to customers has occurred. Customers are typically invoiced for these agreements in regular installments and revenue is recognized ratably over the contractual service period. The deferred revenue balance is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing, size and new business linearity within the quarter. Deferred revenue does not represent the total contract value of annual or multi-year non-cancellable agreements. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing products and services, not to receive financing from customers. Any potential financing fees are considered de minimis. Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue. Transaction price allocated to the remaining performance obligation is influenced by several factors, including the timing of renewals and average contract terms. The Company applied practical expedients to exclude amounts related to performance obligations that are billed and recognized as they are delivered, optional purchases that do not represent material rights, and any estimated amounts of variable consideration that are subject to constraint. The Company has elected to apply the optional exemption for the disclosure of remaining performance obligations for contracts that have an original expected duration of one year or less, are billed and recognized as services are delivered and/or variable consideration allocated entirely to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. This primarily consists of call center services that are billed monthly based on the services performed each month . Costs to Obtain a Contract The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The costs to obtain a contract capitalized are primarily sales commissions paid to our sales force personnel. Capitalized costs may also include portions of fringe benefits and payroll taxes associated with compensation for incremental costs to acquire customer contracts and incentive payments to partners. These costs are amortized over the term of the contract or the estimated life of the customer relationship if renewals are expected and the renewal commission is not commensurate with the initial commission. The Company expenses sales commissions when incurred if the amortization period of the sales commission is one year or less. The accounting for incremental costs of obtaining a contract with a customer is consistent with the accounting under previous guidance. The following table provides changes in costs to obtain a contract for the three and nine months ended June 30, 2022 and 2021: Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Balance, beginning of period $ 143 $ 412 $ 239 $ 593 Additions 285 — 363 99 Amortization, included in selling, general, and administrative expense ( 113 ) ( 111 ) ( 287 ) ( 391 ) Balance, end of period $ 315 $ 301 $ 315 $ 301 Reported as of end of period Current - prepaid expenses and other current assets 283 213 Noncurrent - other assets 32 88 Total $ 315 $ 301 Costs to Fulfill a Contract The Company also capitalizes costs incurred to fulfill its contracts that (i) relate directly to the contract, (ii) are expected to generate resources that will be used to satisfy the Company’s performance obligation under the contract, and (iii) are expected to be recovered through revenue generated under the contract. Contract fulfillment costs are expensed to cost of revenue as the Company satisfies its performance obligations by transferring the service to the customer. These costs are amortized on a systematic basis over the expected period of benefit. The following table provides changes in costs to fulfill a contract for the three and nine months ended June 30, 2022 and 2021: Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Balance, beginning of period $ 678 $ 4,363 $ 2,884 $ 5,118 Additions — 55 2,756 6,047 Amortization, included in selling, general, and administrative expense ( 127 ) ( 877 ) ( 5,089 ) ( 7,624 ) Balance, end of period $ 551 $ 3,541 $ 551 $ 3,541 Reported as of end of period Current - prepaid expenses and other current assets 252 2,946 Noncurrent - other assets 299 595 Total $ 551 $ 3,541 Capitalized costs to obtain and fulfill a contract are periodically reviewed for impairment. ALJ did no t incur any impairment losses during the three and nine months ended June 30, 2022 or 2021. |
Divestitures and Discontinued O
Divestitures and Discontinued Operations | 9 Months Ended |
Jun. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures and Discontinued Operations | 4. DIVESTITURES AND DISCONTINUED OPERATIONS Carpets Sale As previously discussed in Note 1, ALJ sold Carpets during February 2021. As a result, ALJ recognized a loss on sale of $ 0.8 million during the nine months ended June 30, 2021 calculated as follows: ( in thousands ) Amount Cash proceeds $ 500 Net assets sold ( 1,199 ) Transaction costs ( 62 ) Impact of income taxes — Total loss on sale $ ( 761 ) The carrying values of the net assets sold, at the time of closing, were as follows: ( in thousands ) Amount Current assets $ 4,615 Intangible assets, net 318 Other long-term assets 740 Current liabilities ( 4,099 ) Long-term liabilities ( 375 ) Net assets sold $ 1,199 The following table presents information regarding certain components of loss from discontinued operations, net of income taxes, attributable to Carpets, for the nine months ended June 30, 2021: Nine Months Ended ( in thousands ) June 30, 2021 Revenue $ 13,799 Operating loss ( 302 ) Loss on sale ( 761 ) Loss before income taxes ( 1,063 ) Income tax expense — Loss from discontinued operations, net of income taxes ( 1,063 ) The following table presents significant components of cash flows of discontinued operations, attributable to Carpets, for the nine months ended June 30, 2021: Nine Months Ended ( in thousands ) June 30, 2021 Operating activities Depreciation and amortization expense $ 199 Provision for bad debts and obsolete inventory 27 Changes in operating assets and liabilities: Accounts receivable, net 399 Inventories, net ( 12 ) Prepaid expenses, collateral deposits, and other current assets 24 Other assets and liabilities, net 26 Investing activities Capital expenditures ( 7 ) Faneuil Asset Sale As previously discussed in Note 1, ALJ sold certain net assets of Faneuil on April 1, 2022. As a result, the Company recorded a gain on sale of assets, net of related income taxes, of $ 112.0 million during the three and nine months ended June 30, 2022 calculated as follows: ( in thousands ) Amount Cash proceeds $ 127,442 Net assets sold ( 3,114 ) Transaction costs ( 6,314 ) Gain on sale of assets before income taxes $ 118,014 Impact of income taxes (1) ( 5,992 ) Total gain on sale, net of income taxes $ 112,022 (1) Included in the provision for income taxes on the consolidated statement of operations. The carrying values of the net assets sold, at the time of closing, were as follows: ( in thousands ) Amount Current assets $ 215 Property and equipment, net 6,198 Operating lease right-of-use assets 7,572 Current liabilities ( 1,376 ) Long-term liabilities ( 9,495 ) Net assets sold $ 3,114 Phoenix Sale As previously discussed in Note 1, ALJ sold Phoenix on April 13, 2022. As a result, ALJ recognized a gain on sale, net of income taxes, of $ 46.8 million during the three months ended June 30, 2022, calculated as follows: ( in thousands ) Amount Cash proceeds $ 135,928 Net assets sold ( 69,707 ) Transaction costs ( 6,441 ) Impact of income taxes ( 12,950 ) Total gain on sale $ 46,830 The carrying values of the net assets sold, at the time of closing, were as follows: ( in thousands ) Amount Current assets $ 22,270 Property and equipment, net 40,329 Other long-term assets 18,171 Current liabilities ( 10,705 ) Long-term liabilities ( 358 ) Net assets sold $ 69,707 The following table presents the carrying amount of major classes of assets and liabilities, attributable to Phoenix, classified as held for sale included in discontinued operations on September 30, 2021: September 30, ( in thousands ) 2021 Assets: Accounts receivable $ 10,912 Inventories, net 7,654 Prepaid expenses and other current assets 2,042 Property and equipment, net 41,066 Operating lease right-of-use assets — Intangible assets, net 18,705 Other long-term assets 389 Total assets of discontinued operations $ 80,768 Liabilities: Accounts payable $ 3,986 Accrued expenses 5,396 Other current liabilities 810 Total long-term liabilities 1,841 Total liabilities of discontinued operations $ 12,033 The following table presents certain components of results of operations reported as discontinued operations, attributable to Phoenix, for the three and nine months ended June 30, 2022 and 2021: Three Months Ended June 30, Nine Months Ended June 30, ( in thousands ) 2022 2021 2022 2021 Revenue $ 4,275 $ 30,706 $ 65,040 $ 86,038 Operating income 1,133 3,793 9,277 9,391 Gain on sale, net of income taxes 46,830 — 46,830 — Net income from discontinued operations, net of income taxes 47,963 3,322 56,107 8,758 The following table presents certain components of cash flows reported as discontinued operations, attributable to Phoenix, for the nine months ended June 30, 2022 and 2021: Nine Months Ended June 30, ( in thousands ) 2022 2021 Operating activities Depreciation and amortization expense $ 4,092 $ 5,457 Provision for bad debts and obsolete inventory and other ( 11 ) ( 72 ) Changes in operating assets and liabilities: Accounts receivable, net ( 549 ) 2,629 Inventories, net ( 487 ) ( 353 ) Prepaid expenses, collateral deposits, and other current assets 1,026 1,033 Other assets and liabilities, net ( 2,740 ) 2,305 Investing activities Capital expenditures ( 2,309 ) ( 3,631 ) Proceeds from sales of assets 6 309 Financing activities Payments on finance leases — ( 7,538 ) Payments on term loans — ( 1,637 ) Payment of debt extinguishment penalties and other — ( 158 ) |
Concentration Risks
Concentration Risks | 9 Months Ended |
Jun. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentration Risks | 5. CONCENTRATION RISKS Cash The Company maintains its cash balances in accounts, which, at times, may exceed federally insured limits. The Company has not experienced any loss in such accounts and believes there is little exposure to any significant credit risk. Major Customers and Accounts Receivable As a result of the Phoenix Sale described in Note 1, all revenue reported was attributable to Faneuil for all periods presented. The percentages of ALJ consolidated revenue derived from its significant customers were as follows: Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Customer A 56.4 % ** 16.2 % ** Customer B 10.1 ** ** ** Customer C ** ** ** 11.8 % Customer D ** 11.7 % 12.8 ** ** Less than 10 % of consolidated revenue. Accounts receivable from significant customers during either the three or nine months ended June 30, 2022, totaled $ 27.4 million on June 30, 2022. As of June 30, 2022, all Faneuil accounts receivable were unsecured. The risk with respect to accounts receivable is mitigated by credit evaluations performed on customers and the short duration of payment terms extended to customers. |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 9 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Composition of Certain Financial Statement Captions | 6. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS Short-Term Investments The following table summarizes the Company’s short-term and non-current investments recorded in the consolidated balance sheets on June 30, 2022. The Company did no t have any short-term or non-current investments on September 30, 2021. June 30, 2022 (in thousands) Short-Term Non-Current Total Held-to-Maturity: Treasury bills (1) $ 99,679 $ — $ 99,679 Other investments (2) — 5,000 5,000 Total investments $ 99,679 $ 5,000 $ 104,679 (1) The carrying value of the investments approximates fair value due to the short-term nature of the instruments . (2) Included in other assets on the consolidated balance sheets. As the investment was purchased on June 28, 2022, the carrying value of the investments approximates fair value due to short time from the purchase date to June 30, 2022. Accounts Receivable, Net The following table summarizes accounts receivable at the end of each reporting period: June 30, September 30, (in thousands) 2022 2021 Accounts receivable $ 38,979 $ 57,455 Unbilled receivables — 205 Accounts receivable 38,979 57,660 Less: allowance for doubtful accounts ( 1,300 ) — Accounts receivable, net $ 37,679 $ 57,660 Property and Equipment The following table summarizes property and equipment at the end of each reporting period: June 30, September 30, (in thousands) 2022 2021 Leasehold improvements $ 16,461 $ 30,849 Computer and office equipment 12,414 22,387 Software 9,902 16,532 Furniture and fixtures 3,086 7,600 Machinery and equipment 631 1,190 Vehicles 154 155 Property and equipment 42,648 78,713 Less: accumulated depreciation and amortization ( 31,892 ) ( 55,849 ) Property and equipment, net $ 10,756 $ 22,864 Property and equipment depreciation and amortization expense, including amounts related to finance leased assets, was $ 1.8 million and $ 2.3 million for the three months ended June 30, 2022 and 2021, respectively, and $ 6.7 million and $ 7.1 million for the nine months ended June 30, 2022 and 2021, respectively. Intangible Assets The following tables summarize identified intangible assets at the end of each reporting period: June 30, 2022 (in thousands) Weighted Weighted Gross Accumulated Net Customer relationships 12.0 4.1 $ 16,550 $ ( 10,948 ) $ 5,602 Trade names 15.0 6.3 1,500 ( 870 ) 630 Supply agreements 7.0 1.9 2,910 ( 2,113 ) 797 Technology 8.0 5.1 3,400 ( 1,240 ) 2,160 Non-compete agreements 6.6 3.4 1,550 ( 759 ) 791 Totals $ 25,910 $ ( 15,930 ) $ 9,980 September 30, 2021 (in thousands) Weighted Weighted Gross Accumulated Net Customer relationships 12.0 4.8 $ 16,550 $ ( 9,908 ) $ 6,642 Trade names 15.0 7.0 1,500 ( 795 ) 705 Supply agreements 7.0 2.7 2,910 ( 1,802 ) 1,108 Technology 8.0 5.8 3,400 ( 921 ) 2,479 Non-compete agreements 6.6 4.1 1,550 ( 578 ) 972 Totals $ 25,910 $ ( 14,004 ) $ 11,906 Intangible asset amortization expense was $ 0.6 million and $ 0.8 million for the three months ended June 30, 2022 and 2021, respectively, and $ 1.9 million and $ 2.3 million for the nine months ended June 30, 2022 and 2021, respectively. The following table presents expected future amortization expense as of June 30, 2022: (in thousands) Estimated Fiscal 2022 (remaining) $ 642 Fiscal 2023 2,567 Fiscal 2024 2,429 Fiscal 2025 2,116 Fiscal 2026 1,447 Thereafter 779 Total $ 9,980 Accrued Expenses The following table summarizes accrued expenses at the end of each reporting period: June 30, September 30, (in thousands) 2022 2021 Accrued compensation and related taxes $ 9,878 $ 12,320 Acquisition contingent consideration 2,500 2,500 Legal 2,000 2,000 Medical and benefit-related payables 1,321 1,172 Other 1,212 1,216 Accrued board of director fees 526 131 Bank overdraft — 1,366 Interest payable — 110 Total accrued expenses $ 17,437 $ 20,815 Workers’ Compensation Reserve The Company is self-insured for certain workers’ compensation claims as discussed below. The current portion of workers’ compensation reserve is disclosed with accrued expenses. The non-current portion of workers’ compensation reserve is disclosed with other non-current liabilities. Faneuil . Faneuil is self-insured for workers’ compensation claims up to $ 500,000 per incident. Reserves have been provided for workers’ compensation based upon insurance coverages, third-party actuarial analysis, and management’s judgment. |
Income (Loss) Per Share
Income (Loss) Per Share | 9 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | 7. INCOME(LOSS) PER SHARE The following table summarizes basic and diluted income (loss) per share of common stock for each period presented: Three Months Ended June 30, Nine Months Ended June 30, ( in thousands, except per share amounts ) 2022 2021 2022 2021 Net income (loss) from continuing operations $ 105,867 $ ( 6,826 ) $ 85,415 $ ( 13,401 ) Net income from discontinued operations, 47,963 3,322 56,107 7,695 Net income (loss) $ 153,830 $ ( 3,504 ) $ 141,522 $ ( 5,706 ) Income (loss) per share of common stock–basic: Continuing operations $ 2.50 $ ( 0.16 ) $ 2.01 $ ( 0.32 ) Discontinued operations $ 1.13 $ 0.08 $ 1.32 $ 0.18 Net income (loss) per share (1) $ 3.63 $ ( 0.08 ) $ 3.34 $ ( 0.13 ) Income (loss) per share of common stock–diluted: Continuing operations $ 1.93 $ ( 0.16 ) $ 1.56 $ ( 0.32 ) Discontinued operations $ 0.87 $ 0.06 $ 1.03 $ 0.14 Net income (loss) per share (1) $ 2.81 $ ( 0.08 ) $ 2.59 $ ( 0.13 ) Weighted average shares of common stock outstanding: Basic 42,409 42,321 42,408 42,320 Convertible debt 11,158 11,158 11,158 11,158 Warrants 1,207 1,006 1,135 923 Employee stock option grants 44 18 34 15 Diluted 54,818 54,503 54,735 54,416 Anti-dilutive shares excluded from diluted net income (loss) Employee stock option grants 1,250 1,310 1,250 1,310 Warrants - 1,297 - 1,297 Total 1,250 2,607 1,250 2,607 (1) Amounts may not add due to rounding. |
Debt
Debt | 9 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 8. DEBT ALJ’s components of debt and the respective interest rate at the end of each reporting period were as follows: June 30, 2022 September 30, 2021 (in thousands) Interest Balance Interest Balance Line of credit: PNC Revolver $ — 5.25 % $ 5,490 PNC Revolver LIBOR — 4.00 — Line of credit, net of deferred loan costs $ — $ 5,490 Current portion of term loans: Current portion of Blue Torch Term Loan $ — 8.50 $ 3,800 Less: deferred loan costs — ( 1,108 ) Current portion of term loans, net of deferred loan costs $ — $ 2,692 Term loans, less current portion: Blue Torch Term Loan, less current portion $ — 8.50 $ 90,250 Convertible Promissory Notes 8.25 6,026 8.25 6,026 Less: deferred loan costs — ( 2,792 ) Term loans, less current portion, net of deferred loan costs $ 6,026 $ 93,484 Total line of credit and term loans $ 6,026 $ 101,666 Debt Transactions Executed During the Three Months Ended June 30, 2021 New Term Loan In June 2021, ALJ replaced its existing term loans by entering into a new term loan (“Blue Torch Term Loan”) with Blue Torch Business Finance, LLC ("Blue Torch") for an aggregate principal amount of $ 95.0 million. The Blue Torch Term Loan had an original maturity date of June 29, 2025 , required annual principal payments of $ 3.8 million paid quarterly, included a prepayment penalty in certain instances, and was secured by substantially all the Company's assets. Amendment and Restatement of Existing Line of Credit Revolver In connection with the Blue Torch Term Loan, ALJ amended and restated in its entirety its existing line of credit financing agreement (as amended and restated, the “Amended PNC Revolver”). The Amended PNC Revolver provided for a total of $ 32.5 million, which included (i) revolving borrowings, and (ii) the issuance of letters of credit. The letters of credit had a sublimit of $ 15.0 million. The Amended PNC Revolver had an original maturity date of June 29, 2025 , and was secured by substantially of the Company's assets. Debt Transactions Executed During the Three Months Ended June 30, 2022 Termination of Blue Torch Term Loan On April 1, 2022, in connection with the Faneuil Asset Sale (see Note 1), the Company paid off the Blue Torch Tern Loan. ALJ’s payment to Blue Torch was $ 92.2 million, which satisfied all of the Company’s debt obligations under the Blue Torch Term Loan (“Blue Torch Payoff”). The Company was not required to pay any prepayment premiums as a result of the repayment of indebtedness under the Blue Torch Term Loan, which provided that the mandatory prepayment made in connection with the proceeds from the Faneuil Asset Sale were exempt from such pre-payment premiums. In connection with the repayment of outstanding indebtedness by the Company, the lenders automatically and permanently released all security interests, mortgages, liens and encumbrances under the Blue Torch Term Loan. Termination of Amended PNC Revolver In connection with the Phoenix Sale on April 13, 2022, the Company repaid in full all outstanding indebtedness and terminated all commitments and obligations under the Amended PNC Revolver. The Company was required to pay a pre-payment premium of $ 0.3 million as a result of the repayment of indebtedness under the Amended PNC Revolver. In connection with the repayment of outstanding indebtedness by the Company, the lenders automatically and permanently released all security interests, mortgages, liens and encumbrances under the Amended PNC Revolver. Loss on Debt Extinguishment The following table summarizes elements of ALJ's loss on debt extinguishment for each period presented: Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 (in thousands) Deferred loan costs written off $ 3,556 $ 1,171 $ 3,556 $ 1,171 Prepayment penalties 328 743 328 743 Total loss on debt extinguishment $ 3,884 $ 1,914 $ 3,884 $ 1,914 Convertible Promissory Notes In June 2021, ALJ issued convertible promissory notes in an aggregate principal amount of $ 6.0 million (the “Convertible Promissory Notes”) to two investors, including ALJ’s Chief Executive Officer and Chairman of the Board, Jess Ravich. The Convertible Promissory Notes accrue interest at the rate of 8.25 % per year, compounded monthly with interest payable in cash quarterly in arrears on the last day of each calendar quarter on the outstanding principal balance until such principal amount is paid in full or until conversion. The principal and accrued interest owed under the Convertible Promissory Notes are convertible, at the option of the holders, into shares of the Company’s common stock, at any time prior to November 28, 2023 , at a conversion price equal to the quotient of all amounts due under each Convertible Promissory Note divided by the conversion rate of $ 0.54 per common share. The Convertible Promissory Notes (i) were subordinate to the Blue Torch Term Loan and the Amended PNC Revolver prior to the Blue Torch Payoff and the termination of the Amended PNC Revolver, (ii) are unsecured, and (iii) mature on November 28, 2023, subject to extension under certain circumstances. Financial Covenant Compliance As a result of the Blue Torch Payoff and Amended PNC Revolver termination, ALJ is no longer subject to financial covenant requirements. Estimated Future Minimum Principal Payments Estimated future minimum principal payments, subsequent to the Blue Torch Payoff and termination of the Amended PNC Revolver, are as follows ( in thousands ): Year Ending June 30, Convertible 2023 $ — 2024 6,026 Total $ 6,026 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. COMMITMENTS AND CONTINGENCIES Employment Agreements ALJ maintains employment agreements with certain key executive officers that provide for a base salary and an annual bonus, with annual bonus amounts to be determined by the Board of Directors, or committee thereof, or the Chief Executive Officer. The agreements also provide for involuntary termination payments, which include base salary, performance bonus, medical premiums, stock options, non-competition provisions, and other terms and conditions of employment. On June 30, 2022, contingent termination payments related to base salary and medical premiums totaled $ 2.1 million. Surety Bonds Historically, as part of Faneuil’s normal course of operations, certain customers required surety bonds guaranteeing the performance of a contract. During the three months ended June 30, 2022, all the surety bonds were cancelled as the underlying contract was either sold as part of the Faneuil Asset Sale or ended. As such, there were no surety bonds outstanding on June 30, 2022. Letters of Credit The Company had letters of credit totaling $ 3.5 million outstanding on June 30, 2022, which were collateralized with cash deposits totaling $ 3.6 million, or 103 % of the total letters of credit. Litigation, Claims, and Assessments Marshall v. Faneuil On July 31, 2017, plaintiff Donna Marshall (“Marshall”) filed a proposed class action lawsuit in the Superior Court of the State of California for the County of Sacramento against Faneuil and ALJ. Marshall, a previously terminated Faneuil employee, alleges various California state law employment-related claims against Faneuil. Faneuil has answered the complaint and removed the matter to the United States District Court for the Eastern District of California; however, Marshall filed a motion to remand the case back to state court, which has been granted. In connection with the above, an amended complaint was filed by certain plaintiffs to add a claim for penalties under the California Private Attorneys General Act (the “PAGA Claim”). Faneuil demurred to the PAGA Claim and it was eventually dismissed by the trial court. A mediation was held on March 11, 2021, following which the parties negotiated a settlement agreement that has been provisionally approved by the court. Harris v. Faneuil Lois Harris, an employee of Faneuil in Georgia, filed a collective action complaint on April 18, 2021 in the United States District Court for the Northern District of Georgia. Harris alleges, on behalf of herself and other current and former non-exempt Call Center Agent employees who received nondiscretionary bonuses for periods in which they worked overtime hours, that Faneuil violated the Fair Labor Standards Act by failing to include nondiscretionary bonuses in the regular rate of pay when calculating the overtime rate for Harris and other similarly-situated persons. Faneuil has engaged counsel to defend it in this action. The parties are negotiating a settlement. Jesse James Pagan et. al. v. Faneuil On April 26, 2022 , a putative class action complaint was filed against Faneuil in the United States District Court for the Eastern District of Virginia. The complaint asserts claims against Faneuil for negligence, breach of an implied contract, and unjust enrichment in connection with an alleged data breach. The proposed class includes certain former employees of Faneuil who contend their personal identifiable information was compromised in the data breach. The complaint seeks damages in excess of $ 5.0 million on behalf of the putative class. Faneuil has engaged counsel to defend it in this action. The parties are negotiating a settlement. Other Litigation The Company has been named in, and from time to time may become named in, various other lawsuits or threatened actions that are incidental to its ordinary business. Litigation is inherently unpredictable. Any claims against the Company, whether meritorious or not, could be time-consuming, cause the Company to incur costs and expenses, require significant amounts of management time and result in the diversion of significant operational resources. The results of these lawsuits and actions cannot be predicted with certainty. The Company concluded as of June 30, 2022, that the ultimate resolution of these matters (including the matters described above) will not have a material adverse effect on the Company’s business, consolidated financial position, results of operations or cash flows. |
Leases
Leases | 9 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Leases | 10. LEASES General ALJ has operating leases for facilities, equipment, and vehicles, and finance leases for equipment. Over 95 % of operating leases are for facilities. Many of the Company’s facilities leases contain renewal options and rent escalation clauses. The Company subleases excess facility space. Sublease payments received were immaterial for all periods presented. The Company determines if an arrangement is a lease at inception and recognizes a finance or operating lease liability and right-of-use asset in the Company’s Consolidated Balance Sheet. Right-of-use assets and lease liabilities for both operating and finance leases are recognized based on present value of lease payments over the lease term at commencement date. In instances where the lease does not provide an implicit rate, the Company estimates an incremental borrowing rate (“IBR”) based on the information available at commencement date to determine the present value of lease payments. ALJ does not have a published credit rating because it has no publicly traded debt. However, the Company does have several privately held debt instruments that were taken into consideration. The Company generates its IBR, using a synthetic credit rating model that estimates the likelihood (probability) of a borrower receiving a given credit rating based on relevant credit factors or predictor variables. It is based on a regression analysis using selected financial ratios of publicly traded industry comparable companies and the companies’ credit ratings. The estimated IBR is then adjusted for (i) the length of the lease term, and (ii) the effect of designating specific collateral with a value equal to the unpaid lease payments. Finally, ALJ applies the estimated IBR on a lease-by-lease basis as each lease has different start and end dates and has different assumptions regarding purchase or renewal options. For facilities leases, ALJ accounts for non-lease components such as maintenance, taxes, and insurance, separately. For equipment leases, ALJ accounts for lease and non-lease components as a single lease component. The difference between the operating lease right-of-use assets and operating lease liabilities primarily relates to adjustments for deferred rent and tenant improvement allowances. Lease Impairment The Company tests right-of-use (“ROU”) assets when impairment indicators are present. During March 2022, the Company entered into an agreement to sublease excess office space, which triggered impairment testing for the underlying ROU asset. The Company performed a discounted cash flow analysis on the ROU asset and determined that the net carrying value exceeded the estimated discounted future cash flows. As a result, ALJ recorded a $ 2.2 million lease impairment, which was reflected on the statement of operations for the nine months ended June 30, 2022. ROU Assets and ROU Liabilities The following table presents the location of the ROU assets and liabilities in the Consolidated Balance Sheet and ALJ’s weighted-average lease term and discount rate: (dollars in thousands) June 30, 2022 September 30, 2021 Finance Leases: Property and equipment, at cost $ 1,575 $ 1,575 Less accumulated amortization ( 1,277 ) ( 977 ) Property and equipment, net $ 298 $ 598 Finance lease obligations, current portion $ 528 $ 765 Finance lease obligations, less current portion — 332 Total finance lease liabilities $ 528 $ 1,097 Operating Leases: Operating lease right-of-use assets $ 17,647 $ 29,048 Operating lease obligations - current installments $ 3,200 $ 4,722 Operating lease obligations, less current installments 20,167 32,767 Total operating lease obligations $ 23,367 $ 37,489 Weighted average remaining lease term (years): Finance 0.7 1.4 Operating 6.6 6.8 Weighted average discount rate: Finance 6.0 % 6.0 % Operating 10.6 % 10.6 % Components of Lease Costs, Net The following table presents the components of lease cost and the location of such cost in ALJ’s Consolidated Statements of Operations: Three Months Ended June 30, Nine Months Ended June 30, (in thousands) Statement of Operations Location 2022 2021 2022 2021 Finance Leases: Amortization of finance lease assets Selling, general, and administrative expense $ 39 $ 189 $ 300 $ 696 Interest on finance lease liabilities Interest expense 10 52 38 104 Total finance lease cost 49 241 338 800 Operating Leases: Operating lease cost Selling, general, and administrative expense 841 1,724 4,018 5,207 Operating lease cost Cost of revenue — 319 510 957 Variable lease cost Selling, general, and administrative expense 127 220 507 719 Short-term lease cost Selling, general, and administrative expense — 10 — 28 Total operating lease cost 968 2,273 5,035 6,911 Lease impairment Lease impairment — — 2,158 — Total lease cost, net $ 1,017 $ 2,514 $ 7,531 $ 7,711 Supplemental Cash Flow Information The following table presents supplemental cash flow information related to leases: (In thousands) Nine Months Ended June 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for finance leases $ 38 $ 104 Operating cash flows used for operating leases - continuing operations 3,187 3,750 Financing cash flows used for finance leases 607 2,350 Right-of-use assets obtained in exchange for lease obligations: Operating leases 1,379 576 Lease Maturities Maturities of lease liabilities on June 30, 2022 were as follows ( in thousands ): Finance Operating Sublease 2023 $ 540 $ 5,292 $ ( 771 ) 2024 — 5,133 ( 771 ) 2025 — 5,102 ( 771 ) 2026 — 5,091 ( 771 ) 2027 — 4,161 ( 257 ) Thereafter — 6,502 — Total lease payments 540 31,281 ( 3,341 ) Less: imputed interest ( 12 ) ( 7,914 ) 682 Total present value of lease payments $ 528 $ 23,367 $ ( 2,659 ) Reported as of June 30, 2022 Current $ 528 $ 3,200 Non-current — 20,167 Total $ 528 $ 23,367 |
Equity
Equity | 9 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Equity | 11. EQUITY Common Stock ALJ issued less than 0.1 million shares of common stock upon the cashless exercise of stock options during both the nine months ended June 30, 2022 and 2021. Preferred Stock In August 2018, ALJ shareholders approved the amendment and restatement of ALJ’s Restated Certificate of Incorporation to eliminate the preferred stock and authorize the issuance of 5.0 million shares of blank check preferred stock. ALJ had no preferred stock outstanding on June 30, 2022 or September 30, 2021. Equity Incentive Plans In July 2016, ALJ shareholders approved ALJ’s Omnibus Equity Incentive Plan (“2016 Plan”), which allows ALJ and its subsidiaries to grant securities of ALJ to officers, employees, directors, or consultants. ALJ believes that equity-based compensation is fundamental to attracting, motivating, and retaining highly qualified dedicated employees who have the skills and experience required to achieve business goals. Further, ALJ believes the 2016 Plan aligns the compensation of directors, officers, and employees with shareholder interest. The 2016 Plan is administered by ALJ’s Compensation, Nominating and Corporate Governance Committee (“Committee”) of the Board. The maximum aggregate number of common stock shares that may be granted under the 2016 Plan is 2.0 million. The 2016 Plan generally provides for the grant of qualified or nonqualified stock options, restricted stock and restricted stock units, unrestricted stock, stock appreciation rights, performance awards and other awards. The Committee has full discretion to set the vesting criteria. The exercise price of a stock option may not be less than 100 % of the fair market value of ALJ’s common stock on the date of grant. The 2016 Plan prohibits the repricing of outstanding stock options without prior shareholder approval. The term of stock options granted under the 2016 Plan may not exceed ten years . Awards are subject to accelerated vesting upon a change in control in the event the acquiring company does not assume the awards. The Board may amend, alter, or discontinue the 2016 Plan, but shall obtain shareholder approval of any amendment as required by applicable law or stock exchange listing requirements. As of June 30, 2022, there were 1.4 million options available for future grant under the 2016 Plan. Stock-Based Compensation. The following table sets forth the total stock-based compensation expense included in selling, general, and administrative expense on the Statements of Operations: Three Months Ended June 30, Nine Months Ended June 30, (in thousands) 2022 2021 2022 2021 Stock options $ 15 $ 15 $ 75 $ 47 Common stock awards 26 26 79 79 Total stock-based compensation expense $ 41 $ 41 $ 154 $ 126 On June 30, 2022, ALJ had $ 0.1 million of total unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted-average period of approximately 2.2 years. Stock Option Awards. ALJ issued 200,000 options during the nine months ended June 30, 2022. The fair value of the options was $ 0.1 million using the following assumptions: expected option life of 6.2 years, volatility of 56.46 %, dividend yield of 0.00 %, and annual risk-free interest rate of 1.18 %. ALJ had no option grants during the nine months ended June 30, 2021. Common Stock Awards . Members of ALJ’s Board of Directors receive a director compensation package that includes an annual common stock award. In connection with such awards, ALJ recorded stock-based compensation expense of less than $ 0.1 million for both the three months ended June 30, 2022 and 2021, and $ 0.1 million for both the nine months ended June 30, 2022 and 2021. Common Stock Options and Warrants Outstanding on June 30, 2022 On June 30, 2022, ALJ had 1.4 million stock options with a weighted average exercise price of $ 3.50 outstanding and warrants exercisable to purchase 1.6 million shares of common stock with a weighted average exercise price of $ 0.56 outstanding. The “intrinsic value” of options is the excess of the value of ALJ stock over the exercise price of such options. The total intrinsic value of options outstanding (of which all are vested or expected to vest) and the total intrinsic value of options exercisable was $ 0.1 million on June 30, 2022. |
Income Tax
Income Tax | 9 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 12. INCOME TAX ALJ recorded a provision for income taxes from continuing operations of $ 6.0 million and $ 0.2 million for the nine months ended June 30, 2022 and 2021, respectively. ALJ’s effective tax rate from continuing operations for the nine months ended June 30, 2022 was ( 0.1 %), which was due primarily to changes to the valuation allowance recorded against net deferred tax assets. ALJ’s effective tax rate for the nine months ended June 30, 2021was ( 0.7 %), which was also due primarily to changes to the valuation allowance recorded against net deferred tax assets. ALJ recorded a discrete tax provision in continuing operations of $ 6.0 million for the nine months ended June 30, 2022 related to the Faneuil Asset Sale. ALJ recorded no discrete tax provision in continuing operations for the nine months ended June 30, 2021. ALJ recorded a provision for income taxes from discontinued operations of $ 13.2 million, of which $ 13.0 million was for the one-time Phoenix Sale and $ 0.2 million was for Phoenix operations, and $ 0.5 million for the nine months ended June 30, 2022 and 2021, respectively. The increase in the provision for income taxes from discontinued operations is due to the Phoenix Sale. |
Ransomware Incident
Ransomware Incident | 9 Months Ended |
Jun. 30, 2022 | |
Disclosure Text Block [Abstract] | |
Ransomware Incident | 13. RANSOMWARE INCIDENT On August 18, 2021, Faneuil detected a ransomware attack (“Security Event”) that accessed and encrypted certain files on certain servers utilized by Faneuil in the provision of its call center services. Promptly upon detection of the Security Event, Faneuil launched an investigation, engaged legal counsel and other incident response professionals, and notified law enforcement. Faneuil immediately implemented a series of containment and remediation measures to address this situation and reinforce the security of its information technology systems. Faneuil worked with industry-leading cybersecurity professionals to immediately respond to the threat, defend its information technology systems, and conduct remediation. Although Faneuil quickly and actively managed the Security Event, such event caused disruption to parts of Faneuil’s business, including certain aspects of its provision of call center services. Faneuil carries insurance, including cyber insurance, commensurate with the size and the nature of its operations. Although Faneuil actively communicated with customers and worked to minimize disruption, Faneuil cannot guarantee that customer relationships were not harmed as a result of the Security Event. Faneuil incurred less than $ 0.1 million an d $ 0.2 m illion of Security Event related expenses, recorded in selling, general, and administrative expense during the three and nine months ended June 30, 2022, respectively. As of June 30, 2022, Faneuil’s insurance recovery receivable was approximately $ 0.8 million, included with other current assets on the Consolidated Balance Sheet, for amounts that are considered probable for recovery. The insurance proceeds are expected to be received before September 30, 2022. Should Faneuil expect to receive additional insurance recoveries, above the $ 0.8 million insurance recovery receivable on June 30, 2022, they will be recorded when considered probable for recovery. |
Reportable Segments and Geograp
Reportable Segments and Geographic Information | 9 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Reportable Segments and Geographic Information | 14. REPORTABLE SEGMENTS AND GEOGRAPHIC INFORMATION Reportable Segments As a result of the Phoenix Sale discussed in Note 1, ALJ had one operating segment for all periods presented. Geographic Information Substantially all of the Company’s assets were located in the United States. Substantially all of the Company’s revenue was earned in the United States. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | 5. SUBSEQUENT EVENT Stock Repurchase and Retirement On July 11, 2022, the Board of Directors of ALJ unanimously authorized the repurchase and retirement of 3.7 million shares of common stock for $ 2.00 per share for an aggregate consideration of $ 7.5 million (the "Repurchase Transactions"). The shareholders from whom the shares were repurchased included a 5 % shareholder of the Company as well as two charitable associations associated with Jess Ravich, ALJ’s Chief Executive Officer. The Repurchase Transactions and the subsequent retirement of repurchased shares were all completed on or before July 19, 2022. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization ALJ Regional Holdings, Inc. (including subsidiaries, referred to collectively herein as “ALJ” or “Company”) is a holding company. During the three and nine months ended June 30, 2022, ALJ consisted of the following wholly-owned subsidiaries: • Faneuil, Inc. (including its subsidiaries, “Faneuil”) . Faneuil is a leading provider of call center services, back-office operations, staffing services, and toll collection services to government and regulated commercial clients across the United States, focusing on the healthcare, utility, transportation, and toll revenue collection industries. Faneuil is headquartered in Hampton, Virginia. ALJ acquired Faneuil in October 2013. On April 1, 2022, ALJ completed the sale of Faneuil’s tolling and transportation and health benefit exchange vertical. See Basis of Presentation below. • Phoenix Color Corp. (including its subsidiaries, “Phoenix”) . Phoenix is a leading manufacturer of book components, educational materials and related products producing value-added components, heavily illustrated books and commercial specialty products using a broad spectrum of materials and decorative technologies. Phoenix is headquartered in Hagerstown, Maryland. ALJ acquired Phoenix in August 2015. On April 13, 2022, ALJ completed its sale of Phoenix. See Basis of Presentation below. ALJ owned a third segment, Floors-N-More, LLC, d/b/a, Carpets N’ More (“Carpets”). Carpets was a floor covering retailer in Las Vegas, Nevada, and a provider of multiple products for the commercial, retail and home builder markets including all types of flooring, countertops, cabinets, window coverings and garage/closet organizers. ALJ acquired and disposed of Carpets in April 2014 and February 2021, respectively. See Basis of Presentation below. As a result of the Phoenix Sale, ALJ had one operating segment for all periods presented. |
Basis of Presentation | Basis of Presentation Overall The accompanying condensed consolidated financial statements include the accounts of ALJ and its subsidiaries and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. All intercompany transactions and balances have been eliminated in consolidation. The financial information included herein is unaudited, and reflects all adjustments which are, in the opinion of management, of a normal recurring nature and necessary for a fair statement of the results for the periods presented. Interim financial results are not necessarily indicative of financial results for a full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with ALJ’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021, filed with the SEC on December 20, 2021. Discontinued Operations – Carpets In February 2021, ALJ completed the sale of Carpets (the “Carpets Sale”). The Company determined that the Carpets Sale qualified as discontinued operations as defined by Accounting Standards Codification (“ASC”) 205-20-45, Presentation of Financial Statements — Discontinued Operations — Other Presentation Matters (“ASC 205”) because the Carpets Sale represented a strategic shift with a major effect on the Company's operations and financial results. Pursuant to ASC 205, Carpets results of operations and cash flows were classified as discontinued operations for the nine months ended June 30, 2021. See Note 4 for additional financial information about Carpets’ discontinued operations. Discontinued Operations – Phoenix In February 2022, ALJ entered into a stock purchase agreement (the “Stock Purchase Agreement”) to sell all of the outstanding shares of common stock of Phoenix (the “Phoenix Sale”) for cash consideration, including post-closing working capital adjustments, totaling approximately $ 135.9 million. The Phoenix Sale closed on April 13, 2022. The Company recorded a gain on sale of discontinued operations, net of related income taxes, of $ 46.8 million during the three months ended June 30, 2022. The Company determined that the Phoenix Sale qualified as discontinued operations as defined by ASC 205 because the Phoenix Sale represented a strategic shift with a major effect on the Company's operations and financial results. Pursuant to ASC 205, Phoenix assets, liabilities, results of operations, and cash flows were classified as discontinued operations for all periods presented. See Note 4 for additional financial information about Phoenix’s discontinued operations. Asset Sale - Faneuil In December 2021, ALJ entered into an agreement to sell certain net assets of Faneuil’s tolling and transportation vertical and health benefit exchange vertical (the “Faneuil Asset Sale”). The Faneuil Asset Sale closed on April 1, 2022, for cash consideration of $ 142.3 million less an indemnification escrow amount of approximately $ 15.0 million. Faneuil is also eligible to receive additional earn-out payments based upon the performance of certain customer agreements in an aggregate amount of up to $ 25.0 million. The Company recorded a gain on sale of assets, net of related income taxes, of $ 112.0 million during the three and nine months ended June 30, 2022. See Note 4 for additional financial information about Faneuil's gain on sale of assets. In connection with the Faneuil Asset Sale, Faneuil entered into a Transition Services Agreement ("TSA"), which is designed to ensure and facilitate an orderly transfer of the tolling and transportation vertical and health benefit exchange vertical. The services provided under the TSA will terminate at various times between 30 days and 365 days from the closing date of the Faneuil Asset Sale and can be renewed, in whole or in part, in 30-day increments, for a maximum of 180 days. Revenue earned from the TSA was disclosed as other revenue on the consolidated statements of operations during the three and nine months ended June 30, 2022. TSA-related expenses were recorded in their natural expense classification. The Company determined that the Faneuil Asset Sale did not qualify as discontinued operations as defined by ASC 205 because the Faneuil Asset Sale does not represent a strategic shift with a major effect on the Company's operations and financial results. As such, Faneuil assets, liabilities, results of operations, and cash flows were included with continuing operations for all periods presented. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Although actual results could differ materially from those estimates, such estimates are based on the best information available to management and management’s best judgments at the time. Significant estimates and assumptions by management are used for, but are not limited to, determining the fair value of assets and liabilities, including intangible assets acquired and allocation of acquisition purchase prices, estimated useful lives of certain assets, recoverability of long-lived and intangible assets, the recoverability of goodwill, the realizability of deferred tax assets, stock-based compensation, the likelihood of material loss as a result of loss contingencies, customer lives used for revenue recognition, the allowance for doubtful accounts and inventory reserves, and calculation of insurance reserves. The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID-19 pandemic. Actual results may differ materially from estimates. As the impact of the COVID-19 pandemic continues to develop, many of these estimates could require increased judgment and carry a higher degree of variability and volatility, and may change materially in future periods. |
Recent Accounting Standards (Po
Recent Accounting Standards (Policies) | 9 Months Ended |
Jun. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted Internal-Use Software In August 2018, the Financial Accounting Standards Boards (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, to provide guidance on implementation costs incurred in a cloud computing arrangement (“CCA”) that is a service contract. ASU 2018-15 aligns the accounting for such costs with the guidance on capitalizing costs associated with developing or obtaining internal-use software. Specifically, ASU 2018-15 amends ASC 350, Intangibles–Goodwill and Other , to include in its scope implementation costs of a CCA that is a service contract and clarifies that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized in such a CCA. ALJ adopted ASU 2018-15 on October 1, 2021. The impact of ASU 2018-15 on ALJ’s consolidated financial statements and related disclosures was not material. Debt with Conversion and Other Options In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ALJ adopted ASU 2020-06 on October 1, 2021 using the full retrospective basis. The impact of ASU 2020-06 on ALJ’s consolidated financial statements and related disclosures was not material. Accounting Standards Not Yet Adopted Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) , which addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. ASU 2021-04 will be effective for ALJ on October 1, 2022. ALJ does not anticipate the adoption of ASU 2021-04 to significantly impact its consolidated financial statements and related disclosures. Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The new guidance requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , as if it had originated the contracts. This approach differs from the current requirement to measure contract assets and contract liabilities acquired in a business combination at fair value. ASU 2021-08 will be effective for ALJ on October 1, 2023. The adoption impact of the new standard will depend on the magnitude of future acquisitions. The standard will not impact acquired contract assets or liabilities from business combinations occurring prior to the adoption date. |
Revenue recognition (Tables)
Revenue recognition (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition [Abstract] | |
Disaggregation of Revenue | Revenue by contract type was as follows for the three and nine months ended June 30, 2022 and 2021: Three Months Ended June 30, Nine Months Ended June 30, ( in thousands ) 2022 2021 2022 2021 Faneuil: Utility $ 14,295 $ 13,709 $ 40,854 $ 40,529 Healthcare 9,147 31,318 70,141 108,020 Other 1,327 965 2,791 3,576 Government 341 4,148 2,633 26,698 Transportation — 22,614 51,984 64,324 Total revenue 25,110 72,754 168,403 243,147 Other revenue 32,511 — 32,511 — Total revenue and other revenue $ 57,621 $ 72,754 $ 200,914 $ 243,147 |
Contract with Customer Asset and Liabilities | The following table provides information about consolidated contract assets and contract liabilities at the end of each reporting period: June 30, September 30, ( in thousands ) 2022 2021 Contract assets: Unbilled revenue (1) $ — $ 69 Total contract assets $ — $ 69 Contract liabilities: Deferred revenue $ — $ 4,422 Total contract liabilities $ — $ 4,422 (1) Included in prepaid expenses and other current assets on the consolidated balance sheets. Unbilled revenue represents rights to consideration for services provided when the right is conditioned on something other than passage of time (for example, meeting a milestone for the right to bill under the cost-to-cost measure of progress). Unbilled revenue is transferred to accounts receivable when the rights become unconditional. The following table provides changes in consolidated contract assets and contract liabilities from September 30, 2021 to June 30, 2022: ( in thousands ) Contract Contract Balance, September 30, 2021 $ 69 $ 4,422 Additions to contract assets 26 — Revenue recognized — ( 8,403 ) Cash received from customer and other ( 95 ) 3,981 Balance, June 30, 2022 $ — $ — |
Summary of Changes in Costs to Obtain and Fulfill a Contract | The following table provides changes in costs to obtain a contract for the three and nine months ended June 30, 2022 and 2021: Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Balance, beginning of period $ 143 $ 412 $ 239 $ 593 Additions 285 — 363 99 Amortization, included in selling, general, and administrative expense ( 113 ) ( 111 ) ( 287 ) ( 391 ) Balance, end of period $ 315 $ 301 $ 315 $ 301 Reported as of end of period Current - prepaid expenses and other current assets 283 213 Noncurrent - other assets 32 88 Total $ 315 $ 301 The following table provides changes in costs to fulfill a contract for the three and nine months ended June 30, 2022 and 2021: Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Balance, beginning of period $ 678 $ 4,363 $ 2,884 $ 5,118 Additions — 55 2,756 6,047 Amortization, included in selling, general, and administrative expense ( 127 ) ( 877 ) ( 5,089 ) ( 7,624 ) Balance, end of period $ 551 $ 3,541 $ 551 $ 3,541 Reported as of end of period Current - prepaid expenses and other current assets 252 2,946 Noncurrent - other assets 299 595 Total $ 551 $ 3,541 |
Divestitures and Discontinued_2
Divestitures and Discontinued Operations (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Carpets Sale [Member] | |
Summary of Discontinued Operations | As previously discussed in Note 1, ALJ sold Carpets during February 2021. As a result, ALJ recognized a loss on sale of $ 0.8 million during the nine months ended June 30, 2021 calculated as follows: ( in thousands ) Amount Cash proceeds $ 500 Net assets sold ( 1,199 ) Transaction costs ( 62 ) Impact of income taxes — Total loss on sale $ ( 761 ) The carrying values of the net assets sold, at the time of closing, were as follows: ( in thousands ) Amount Current assets $ 4,615 Intangible assets, net 318 Other long-term assets 740 Current liabilities ( 4,099 ) Long-term liabilities ( 375 ) Net assets sold $ 1,199 The following table presents information regarding certain components of loss from discontinued operations, net of income taxes, attributable to Carpets, for the nine months ended June 30, 2021: Nine Months Ended ( in thousands ) June 30, 2021 Revenue $ 13,799 Operating loss ( 302 ) Loss on sale ( 761 ) Loss before income taxes ( 1,063 ) Income tax expense — Loss from discontinued operations, net of income taxes ( 1,063 ) The following table presents significant components of cash flows of discontinued operations, attributable to Carpets, for the nine months ended June 30, 2021: Nine Months Ended ( in thousands ) June 30, 2021 Operating activities Depreciation and amortization expense $ 199 Provision for bad debts and obsolete inventory 27 Changes in operating assets and liabilities: Accounts receivable, net 399 Inventories, net ( 12 ) Prepaid expenses, collateral deposits, and other current assets 24 Other assets and liabilities, net 26 Investing activities Capital expenditures ( 7 ) |
Faneuil Asset Sale [Member] | |
Summary of Discontinued Operations | As previously discussed in Note 1, ALJ sold certain net assets of Faneuil on April 1, 2022. As a result, the Company recorded a gain on sale of assets, net of related income taxes, of $ 112.0 million during the three and nine months ended June 30, 2022 calculated as follows: ( in thousands ) Amount Cash proceeds $ 127,442 Net assets sold ( 3,114 ) Transaction costs ( 6,314 ) Gain on sale of assets before income taxes $ 118,014 Impact of income taxes (1) ( 5,992 ) Total gain on sale, net of income taxes $ 112,022 (1) Included in the provision for income taxes on the consolidated statement of operations. The carrying values of the net assets sold, at the time of closing, were as follows: ( in thousands ) Amount Current assets $ 215 Property and equipment, net 6,198 Operating lease right-of-use assets 7,572 Current liabilities ( 1,376 ) Long-term liabilities ( 9,495 ) Net assets sold $ 3,114 |
Phoenix Sale [Member] | |
Summary of Discontinued Operations | As previously discussed in Note 1, ALJ sold Phoenix on April 13, 2022. As a result, ALJ recognized a gain on sale, net of income taxes, of $ 46.8 million during the three months ended June 30, 2022, calculated as follows: ( in thousands ) Amount Cash proceeds $ 135,928 Net assets sold ( 69,707 ) Transaction costs ( 6,441 ) Impact of income taxes ( 12,950 ) Total gain on sale $ 46,830 The carrying values of the net assets sold, at the time of closing, were as follows: ( in thousands ) Amount Current assets $ 22,270 Property and equipment, net 40,329 Other long-term assets 18,171 Current liabilities ( 10,705 ) Long-term liabilities ( 358 ) Net assets sold $ 69,707 The following table presents the carrying amount of major classes of assets and liabilities, attributable to Phoenix, classified as held for sale included in discontinued operations on September 30, 2021: September 30, ( in thousands ) 2021 Assets: Accounts receivable $ 10,912 Inventories, net 7,654 Prepaid expenses and other current assets 2,042 Property and equipment, net 41,066 Operating lease right-of-use assets — Intangible assets, net 18,705 Other long-term assets 389 Total assets of discontinued operations $ 80,768 Liabilities: Accounts payable $ 3,986 Accrued expenses 5,396 Other current liabilities 810 Total long-term liabilities 1,841 Total liabilities of discontinued operations $ 12,033 The following table presents certain components of results of operations reported as discontinued operations, attributable to Phoenix, for the three and nine months ended June 30, 2022 and 2021: Three Months Ended June 30, Nine Months Ended June 30, ( in thousands ) 2022 2021 2022 2021 Revenue $ 4,275 $ 30,706 $ 65,040 $ 86,038 Operating income 1,133 3,793 9,277 9,391 Gain on sale, net of income taxes 46,830 — 46,830 — Net income from discontinued operations, net of income taxes 47,963 3,322 56,107 8,758 The following table presents certain components of cash flows reported as discontinued operations, attributable to Phoenix, for the nine months ended June 30, 2022 and 2021: Nine Months Ended June 30, ( in thousands ) 2022 2021 Operating activities Depreciation and amortization expense $ 4,092 $ 5,457 Provision for bad debts and obsolete inventory and other ( 11 ) ( 72 ) Changes in operating assets and liabilities: Accounts receivable, net ( 549 ) 2,629 Inventories, net ( 487 ) ( 353 ) Prepaid expenses, collateral deposits, and other current assets 1,026 1,033 Other assets and liabilities, net ( 2,740 ) 2,305 Investing activities Capital expenditures ( 2,309 ) ( 3,631 ) Proceeds from sales of assets 6 309 Financing activities Payments on finance leases — ( 7,538 ) Payments on term loans — ( 1,637 ) Payment of debt extinguishment penalties and other — ( 158 ) |
Concentration Risks (Tables)
Concentration Risks (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Revenue, Segment Benchmark | Faneuil [Member] | |
Schedule of Concentration Percentage of Different Customers | As a result of the Phoenix Sale described in Note 1, all revenue reported was attributable to Faneuil for all periods presented. The percentages of ALJ consolidated revenue derived from its significant customers were as follows: Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Customer A 56.4 % ** 16.2 % ** Customer B 10.1 ** ** ** Customer C ** ** ** 11.8 % Customer D ** 11.7 % 12.8 ** ** Less than 10 % of consolidated revenue. |
Composition of Certain Financ_2
Composition of Certain Financial Statement Captions (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Short-term or Non-current Investments | The following table summarizes the Company’s short-term and non-current investments recorded in the consolidated balance sheets on June 30, 2022. The Company did no t have any short-term or non-current investments on September 30, 2021. June 30, 2022 (in thousands) Short-Term Non-Current Total Held-to-Maturity: Treasury bills (1) $ 99,679 $ — $ 99,679 Other investments (2) — 5,000 5,000 Total investments $ 99,679 $ 5,000 $ 104,679 (1) The carrying value of the investments approximates fair value due to the short-term nature of the instruments . (2) Included in other assets on the consolidated balance sheets. As the investment was purchased on June 28, 2022, the carrying value of the investments approximates fair value due to short time from the purchase date to June 30, 2022. |
Summary of Accounts Receivable | The following table summarizes accounts receivable at the end of each reporting period: June 30, September 30, (in thousands) 2022 2021 Accounts receivable $ 38,979 $ 57,455 Unbilled receivables — 205 Accounts receivable 38,979 57,660 Less: allowance for doubtful accounts ( 1,300 ) — Accounts receivable, net $ 37,679 $ 57,660 |
Summary of Property and Equipment | The following table summarizes property and equipment at the end of each reporting period: June 30, September 30, (in thousands) 2022 2021 Leasehold improvements $ 16,461 $ 30,849 Computer and office equipment 12,414 22,387 Software 9,902 16,532 Furniture and fixtures 3,086 7,600 Machinery and equipment 631 1,190 Vehicles 154 155 Property and equipment 42,648 78,713 Less: accumulated depreciation and amortization ( 31,892 ) ( 55,849 ) Property and equipment, net $ 10,756 $ 22,864 |
Summary of Intangible Assets | The following tables summarize identified intangible assets at the end of each reporting period: June 30, 2022 (in thousands) Weighted Weighted Gross Accumulated Net Customer relationships 12.0 4.1 $ 16,550 $ ( 10,948 ) $ 5,602 Trade names 15.0 6.3 1,500 ( 870 ) 630 Supply agreements 7.0 1.9 2,910 ( 2,113 ) 797 Technology 8.0 5.1 3,400 ( 1,240 ) 2,160 Non-compete agreements 6.6 3.4 1,550 ( 759 ) 791 Totals $ 25,910 $ ( 15,930 ) $ 9,980 September 30, 2021 (in thousands) Weighted Weighted Gross Accumulated Net Customer relationships 12.0 4.8 $ 16,550 $ ( 9,908 ) $ 6,642 Trade names 15.0 7.0 1,500 ( 795 ) 705 Supply agreements 7.0 2.7 2,910 ( 1,802 ) 1,108 Technology 8.0 5.8 3,400 ( 921 ) 2,479 Non-compete agreements 6.6 4.1 1,550 ( 578 ) 972 Totals $ 25,910 $ ( 14,004 ) $ 11,906 |
Summary of Expected Future Amortization Expense | The following table presents expected future amortization expense as of June 30, 2022: (in thousands) Estimated Fiscal 2022 (remaining) $ 642 Fiscal 2023 2,567 Fiscal 2024 2,429 Fiscal 2025 2,116 Fiscal 2026 1,447 Thereafter 779 Total $ 9,980 |
Summary of Accrued Expenses | The following table summarizes accrued expenses at the end of each reporting period: June 30, September 30, (in thousands) 2022 2021 Accrued compensation and related taxes $ 9,878 $ 12,320 Acquisition contingent consideration 2,500 2,500 Legal 2,000 2,000 Medical and benefit-related payables 1,321 1,172 Other 1,212 1,216 Accrued board of director fees 526 131 Bank overdraft — 1,366 Interest payable — 110 Total accrued expenses $ 17,437 $ 20,815 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Income (Loss) Per Share of Common Stock | The following table summarizes basic and diluted income (loss) per share of common stock for each period presented: Three Months Ended June 30, Nine Months Ended June 30, ( in thousands, except per share amounts ) 2022 2021 2022 2021 Net income (loss) from continuing operations $ 105,867 $ ( 6,826 ) $ 85,415 $ ( 13,401 ) Net income from discontinued operations, 47,963 3,322 56,107 7,695 Net income (loss) $ 153,830 $ ( 3,504 ) $ 141,522 $ ( 5,706 ) Income (loss) per share of common stock–basic: Continuing operations $ 2.50 $ ( 0.16 ) $ 2.01 $ ( 0.32 ) Discontinued operations $ 1.13 $ 0.08 $ 1.32 $ 0.18 Net income (loss) per share (1) $ 3.63 $ ( 0.08 ) $ 3.34 $ ( 0.13 ) Income (loss) per share of common stock–diluted: Continuing operations $ 1.93 $ ( 0.16 ) $ 1.56 $ ( 0.32 ) Discontinued operations $ 0.87 $ 0.06 $ 1.03 $ 0.14 Net income (loss) per share (1) $ 2.81 $ ( 0.08 ) $ 2.59 $ ( 0.13 ) Weighted average shares of common stock outstanding: Basic 42,409 42,321 42,408 42,320 Convertible debt 11,158 11,158 11,158 11,158 Warrants 1,207 1,006 1,135 923 Employee stock option grants 44 18 34 15 Diluted 54,818 54,503 54,735 54,416 Anti-dilutive shares excluded from diluted net income (loss) Employee stock option grants 1,250 1,310 1,250 1,310 Warrants - 1,297 - 1,297 Total 1,250 2,607 1,250 2,607 (1) Amounts may not add due to rounding. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Loss on Debt Extinguishment | The following table summarizes elements of ALJ's loss on debt extinguishment for each period presented: Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 (in thousands) Deferred loan costs written off $ 3,556 $ 1,171 $ 3,556 $ 1,171 Prepayment penalties 328 743 328 743 Total loss on debt extinguishment $ 3,884 $ 1,914 $ 3,884 $ 1,914 |
Schedule of Estimated Future Minimum Payments under Debt | Estimated future minimum principal payments, subsequent to the Blue Torch Payoff and termination of the Amended PNC Revolver, are as follows ( in thousands ): Year Ending June 30, Convertible 2023 $ — 2024 6,026 Total $ 6,026 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Summary of Location of ROU Assets and Liabilities in Consolidated Balance Sheet and Weighted Average Lease Term and Discount Rate | The following table presents the location of the ROU assets and liabilities in the Consolidated Balance Sheet and ALJ’s weighted-average lease term and discount rate: (dollars in thousands) June 30, 2022 September 30, 2021 Finance Leases: Property and equipment, at cost $ 1,575 $ 1,575 Less accumulated amortization ( 1,277 ) ( 977 ) Property and equipment, net $ 298 $ 598 Finance lease obligations, current portion $ 528 $ 765 Finance lease obligations, less current portion — 332 Total finance lease liabilities $ 528 $ 1,097 Operating Leases: Operating lease right-of-use assets $ 17,647 $ 29,048 Operating lease obligations - current installments $ 3,200 $ 4,722 Operating lease obligations, less current installments 20,167 32,767 Total operating lease obligations $ 23,367 $ 37,489 Weighted average remaining lease term (years): Finance 0.7 1.4 Operating 6.6 6.8 Weighted average discount rate: Finance 6.0 % 6.0 % Operating 10.6 % 10.6 % |
Summary of Components of Lease Cost | The following table presents the components of lease cost and the location of such cost in ALJ’s Consolidated Statements of Operations: Three Months Ended June 30, Nine Months Ended June 30, (in thousands) Statement of Operations Location 2022 2021 2022 2021 Finance Leases: Amortization of finance lease assets Selling, general, and administrative expense $ 39 $ 189 $ 300 $ 696 Interest on finance lease liabilities Interest expense 10 52 38 104 Total finance lease cost 49 241 338 800 Operating Leases: Operating lease cost Selling, general, and administrative expense 841 1,724 4,018 5,207 Operating lease cost Cost of revenue — 319 510 957 Variable lease cost Selling, general, and administrative expense 127 220 507 719 Short-term lease cost Selling, general, and administrative expense — 10 — 28 Total operating lease cost 968 2,273 5,035 6,911 Lease impairment Lease impairment — — 2,158 — Total lease cost, net $ 1,017 $ 2,514 $ 7,531 $ 7,711 |
Supplemental Cash Flow Information Related to Leases | The following table presents supplemental cash flow information related to leases: (In thousands) Nine Months Ended June 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for finance leases $ 38 $ 104 Operating cash flows used for operating leases - continuing operations 3,187 3,750 Financing cash flows used for finance leases 607 2,350 Right-of-use assets obtained in exchange for lease obligations: Operating leases 1,379 576 |
Schedule of Maturity of Lease Liabilities | Maturities of lease liabilities on June 30, 2022 were as follows ( in thousands ): Finance Operating Sublease 2023 $ 540 $ 5,292 $ ( 771 ) 2024 — 5,133 ( 771 ) 2025 — 5,102 ( 771 ) 2026 — 5,091 ( 771 ) 2027 — 4,161 ( 257 ) Thereafter — 6,502 — Total lease payments 540 31,281 ( 3,341 ) Less: imputed interest ( 12 ) ( 7,914 ) 682 Total present value of lease payments $ 528 $ 23,367 $ ( 2,659 ) Reported as of June 30, 2022 Current $ 528 $ 3,200 Non-current — 20,167 Total $ 528 $ 23,367 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Summary of Total Stock-Based Compensation Expense Included in Selling General and Administrative Expense on Statements of Operations | The following table sets forth the total stock-based compensation expense included in selling, general, and administrative expense on the Statements of Operations: Three Months Ended June 30, Nine Months Ended June 30, (in thousands) 2022 2021 2022 2021 Stock options $ 15 $ 15 $ 75 $ 47 Common stock awards 26 26 79 79 Total stock-based compensation expense $ 41 $ 41 $ 154 $ 126 |
Organization and Basis of Pre_3
Organization and Basis of Presentation - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) Segment | Jun. 30, 2021 USD ($) | |
Line Of Credit Facility [Line Items] | |||||
Number of reportable segments | Segment | 1 | ||||
Proceeds from the sale of subsidiaries | $ 135,928,000 | $ 438,000 | |||
Gain on sale of assets, before income taxes | $ 118,014,000 | 117,988,000 | |||
Asset Sale [Member] | Faneuil [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Proceeds from the sale of subsidiaries | $ 142,300,000 | ||||
Gain on sale of assets, before income taxes | 112,000,000 | $ 112,000,000 | |||
Indemnification escrow amount | 15,000,000 | ||||
Additional earn-out payments, maximum | $ 25,000,000 | ||||
Phoenix [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Gain on sale of assets, before income taxes | 46,800,000 | ||||
Stock Purchase Agreement [Member] | Phoenix [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Proceeds from the sale of subsidiaries | $ 135,900,000 | ||||
Gain on sale of assets, before income taxes | $ 46,800,000 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 25,110 | $ 72,754 | $ 168,403 | $ 243,147 |
Total revenue and other revenue | 57,621 | 72,754 | 200,914 | 243,147 |
Other Revenue [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 32,511 | 32,511 | ||
Faneuil [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 25,110 | 72,754 | 168,403 | 243,147 |
Faneuil [Member] | Utility [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 14,295 | 13,709 | 40,854 | 40,529 |
Faneuil [Member] | Health Care [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 9,147 | 31,318 | 70,141 | 108,020 |
Faneuil [Member] | Other [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 1,327 | 965 | 2,791 | 3,576 |
Faneuil [Member] | Government [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 341 | 4,148 | 2,633 | 26,698 |
Faneuil [Member] | Transportion [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 22,614 | $ 51,984 | $ 64,324 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Contract Assets and Contract Liabilities (Details) $ in Thousands | Sep. 30, 2021 USD ($) | |
Contract assets: | ||
Unbilled revenue | $ 69 | [1] |
Total contract assets | 69 | |
Contract liabilities: | ||
Deferred revenue | 4,422 | |
Total contract liabilities | $ 4,422 | |
[1] Included in prepaid expenses and other current assets on the consolidated balance sheets. Unbilled revenue represents rights to consideration for services provided when the right is conditioned on something other than passage of time (for example, meeting a milestone for the right to bill under the cost-to-cost measure of progress). Unbilled revenue is transferred to accounts receivable when the rights become unconditional. |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Change in Contract Assets and Contract Liabilities (Details) $ in Thousands | 9 Months Ended |
Jun. 30, 2022 USD ($) | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Beginning balance | $ 69 |
Additions to contract assets | 26 |
Cash received from customer and other, Contract Assets | (95) |
Ending balance | 0 |
Beginning balance | 4,422 |
Revenue recognized | (8,403) |
Cash received from customer and other, Contract Liabilities | 3,981 |
Ending balance | $ 0 |
Revenue Recognition - Summary_3
Revenue Recognition - Summary of Changes in Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Capitalized Contract Cost [Line Items] | ||||
Balance, beginning of period | $ 143 | $ 412 | $ 239 | $ 593 |
Additions | 285 | 363 | 99 | |
Amortization, included in selling, general, and administrative expense | (113) | (111) | (287) | (391) |
Balance, end of period | 315 | 301 | 315 | 301 |
Balance, beginning of period | 678 | 4,363 | 2,884 | 5,118 |
Additions | 55 | 2,756 | 6,047 | |
Amortization, included in selling, general, and administrative expense | (127) | (877) | (5,089) | (7,624) |
Balance, end of period | 551 | 3,541 | 551 | 3,541 |
Current - Prepaid Expenses and Other Current Assets [Member] | ||||
Capitalized Contract Cost [Line Items] | ||||
Current - prepaid expenses and other current assets | 283 | 213 | 283 | 213 |
Current - prepaid expenses and other current assets | 252 | 2,946 | 252 | 2,946 |
Noncurrent - Other Assets [Member] | ||||
Capitalized Contract Cost [Line Items] | ||||
Noncurrent - other assets | 32 | 88 | 32 | 88 |
Noncurrent - other assets | $ 299 | $ 595 | $ 299 | $ 595 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Jun. 30, 2021 |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Impairment Loss | $ 0 | $ 0 |
Divestitures and Discontinued_3
Divestitures and Discontinued Operations - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
(Gain) loss on sale of subsidiaries | $ (66,221) | $ 761 | |
Gain on disposal of assets, net | $ 118,014 | 117,988 | |
Phoenix [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Gain on disposal of assets, net | 46,800 | ||
Asset Sale [Member] | Faneuil [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Gain on disposal of assets, net | $ 112,000 | $ 112,000 | |
Furniture and Fixtures [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
(Gain) loss on sale of subsidiaries | $ 800 |
Divestitures and Discontinued_4
Divestitures and Discontinued Operations - Summary of Recognized Loss on Sale of Subsidiaries (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Apr. 13, 2022 | Apr. 01, 2022 | Feb. 28, 2021 | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Cash proceeds | $ 135,928 | $ 438 | ||||
Total gain (loss) on sale, net of income taxes | 66,221 | (761) | ||||
Carpets Sale [Member] | ||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Cash proceeds | 500 | |||||
Net assets sold | (1,199) | $ (1,199) | ||||
Transaction costs | (62) | |||||
Total gain (loss) on sale, net of income taxes | $ (761) | |||||
Faneuil Asset Sale [Member] | ||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Cash proceeds | 127,442 | |||||
Net assets sold | $ (3,114) | (3,114) | $ (3,114) | |||
Transaction costs | (6,314) | |||||
Gain on sale of assets before income taxes | 118,014 | |||||
Impact of income taxes | (5,992) | |||||
Total gain (loss) on sale, net of income taxes | 112,022 | |||||
Phoenix Sale [Member] | ||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Cash proceeds | 135,928 | |||||
Net assets sold | (69,707) | $ (69,707) | $ (69,707) | |||
Transaction costs | (6,441) | |||||
Impact of income taxes | (12,950) | |||||
Total gain (loss) on sale, net of income taxes | $ 46,830 |
Divestitures and Discontinued_5
Divestitures and Discontinued Operations - Summary of Carrying Values of Net Assets Sold (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Apr. 13, 2022 | Apr. 01, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Feb. 28, 2021 |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Current assets | $ 20,608 | |||||
Current liabilities | (10,192) | |||||
Long-term liabilities | (1,841) | |||||
Carpets Sale [Member] | ||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Current assets | $ 4,615 | |||||
Intangible assets, net | 318 | |||||
Other long-term assets | 740 | |||||
Current liabilities | (4,099) | |||||
Long-term liabilities | (375) | |||||
Net assets sold | $ 1,199 | $ 1,199 | ||||
Faneuil Asset Sale [Member] | ||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Current assets | $ 215 | |||||
Property and equipment, net | 6,198 | |||||
Other long-term assets | 7,572 | |||||
Current liabilities | (1,376) | |||||
Long-term liabilities | (9,495) | |||||
Net assets sold | $ 3,114 | $ 3,114 | ||||
Phoenix Sale [Member] | ||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Current assets | $ 22,270 | |||||
Property and equipment, net | 40,329 | |||||
Other long-term assets | 18,171 | 389 | ||||
Current liabilities | (10,705) | |||||
Long-term liabilities | (358) | $ (1,841) | ||||
Net assets sold | $ 69,707 | $ 69,707 |
Divestitures and Discontinued_6
Divestitures and Discontinued Operations - Summary of Components of Loss from Discontinued Operations, Net of Income Taxes (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Loss on sale | $ 66,221 | $ (761) |
Carpets Sale [Member] | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Net revenue | 13,799 | |
Operating loss | (302) | |
Loss on sale | (761) | |
Loss before income taxes | (1,063) | |
Loss from discontinued operations, net of income taxes | $ (1,063) |
Divestitures and Discontinued_7
Divestitures and Discontinued Operations - Summary of Components of Cash Flows of Discontinued Operations (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating activities | ||
Depreciation and amortization expense | $ 4,092 | $ 5,457 |
Provision for bad debts and obsolete inventory and other | (11) | (72) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (549) | 2,629 |
Inventories, net | (487) | (353) |
Prepaid expenses, collateral deposits, and other current assets | 1,026 | 1,033 |
Other assets and liabilities, net | (2,740) | 2,305 |
Capital expenditures | (2,309) | (3,631) |
Proceeds from sales of assets | 6 | 309 |
Payments on finance leases | $ (607) | (2,350) |
Payments on term loans | 1,637 | |
Payment of debt extinguishment penalties and other | (158) | |
Carpets Sale [Member] | ||
Operating activities | ||
Depreciation and amortization expense | 199 | |
Provision for bad debts and obsolete inventory | 27 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 399 | |
Inventories, net | (12) | |
Prepaid expenses, collateral deposits, and other current assets | 24 | |
Other assets and liabilities, net | 26 | |
Capital expenditures | (7) | |
Phoenix Sale [Member] | ||
Changes in operating assets and liabilities: | ||
Payments on finance leases | $ (7,538) |
Divestitures and Discontinued_8
Divestitures and Discontinued Operations - Summary of Carrying Amount of Major Classes of Assets and Liabilities (Detail) - USD ($) $ in Thousands | Apr. 13, 2022 | Apr. 01, 2022 | Sep. 30, 2021 |
Liabilities: | |||
Total long-term liabilities | $ 1,841 | ||
Faneuil Asset Sale [Member] | |||
Assets: | |||
Other long-term assets | $ 7,572 | ||
Liabilities: | |||
Total long-term liabilities | $ 9,495 | ||
Phoenix Sale [Member] | |||
Assets: | |||
Accounts receivable | 10,912 | ||
Inventories, net | 7,654 | ||
Prepaid expenses and other current assets | 2,042 | ||
Property and equipment, net | 41,066 | ||
Intangible assets, net | 18,705 | ||
Other long-term assets | $ 18,171 | 389 | |
Assets held for sale | 80,768 | ||
Liabilities: | |||
Accounts payable | 3,986 | ||
Accrued expenses | 5,396 | ||
Other current liabilities | 810 | ||
Total long-term liabilities | $ 358 | 1,841 | |
Liabilities related to assets held for sale | $ 12,033 |
Divestitures and Discontinued_9
Divestitures and Discontinued Operations - Summary of Operations Reported as Discontinued Operations (Detail) - Phoenix Sale [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Net revenue | $ 4,275 | $ 30,706 | $ 65,040 | $ 86,038 |
Gain on sale, net of income taxes | 46,830 | 46,830 | ||
Operating income | 1,133 | 3,793 | 9,277 | 9,391 |
Net income from discontinued operations, net of income taxes | $ 47,963 | $ 3,322 | $ 56,107 | $ 8,758 |
Concentration Risks - Major Cus
Concentration Risks - Major Customers and Accounts Receivable - Schedule of Concentration Percentage of Different Customers (Detail) - Revenue, Segment Benchmark - Customer Concentration Risk [Member] - Faneuil [Member] | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Customer A [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 56.40% | 16.20% | ||
Customer B [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 10.10% | |||
Customer C [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 11.80% | |||
Customer D [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 11.70% | 12.80% |
Concentration Risks - Major C_2
Concentration Risks - Major Customers and Accounts Receivable - Schedule of Concentration Percentage of Different Customers (Parenthetical) (Detail) | 9 Months Ended |
Jun. 30, 2022 | |
Maximum [Member] | Revenue, Segment Benchmark | Customer Concentration Risk [Member] | Faneuil [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10% |
Concentration Risks - Additiona
Concentration Risks - Additional Information (Detail) $ in Millions | Jun. 30, 2022 USD ($) |
Faneuil [Member] | |
Concentration Risk [Line Items] | |
Accounts receivable | $ 27.4 |
Composition of Certain Financ_3
Composition of Certain Financial Statement Captions - Summary of Short-term and Non-current Investments (Details) - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 | |
Short-Term | $ 99,679,000 | $ 0 | |
Non-Current | 5,000,000 | $ 0 | |
Total | 104,679,000 | ||
Treasury Bills [Member] | |||
Short-Term | [1] | 99,679,000 | |
Total | [1] | 99,679,000 | |
Other Investments [Member] | |||
Non-Current | [2] | 5,000,000 | |
Total | [2] | $ 5,000,000 | |
[1] The carrying value of the investments approximates fair value due to the short-term nature of the instruments Included in other assets on the consolidated balance sheets. As the investment was purchased on June 28, 2022, the carrying value of the investments approximates fair value due to short time from the purchase date to June 30, 2022. |
Composition of Certain Financ_4
Composition of Certain Financial Statement Captions - Summary of Accounts Receivable (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract] | ||
Accounts receivable | $ 38,979 | $ 57,455 |
Unbilled receivables | 205 | |
Accounts receivable | 38,979 | 57,660 |
Less: allowance for doubtful accounts | (1,300) | |
Accounts receivable, net | $ 37,679 | $ 57,660 |
Composition of Certain Financ_5
Composition of Certain Financial Statement Captions - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 42,648 | $ 78,713 |
Less: accumulated depreciation and amortization | (31,892) | (55,849) |
Property and equipment, net | 10,756 | 22,864 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 16,461 | 30,849 |
Computer and Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 12,414 | 22,387 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,902 | 16,532 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,086 | 7,600 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 631 | 1,190 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 154 | $ 155 |
Composition of Certain Financ_6
Composition of Certain Financial Statement Captions - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Condensed Financial Statements, Captions [Line Items] | |||||
Depreciation and amortization expense including capital leased assets | $ 1,800,000 | $ 2,300,000 | $ 6,700,000 | $ 7,100,000 | |
Short-term investments | 99,679,000 | 99,679,000 | $ 0 | ||
Non-current investments | 5,000,000 | 5,000,000 | $ 0 | ||
Faneuil [Member] | Workers Compensation Claim [Member] | Maximum [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Self-insured amount | 500,000 | 500,000 | |||
Intangible Assets (Member) | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Intangible asset amortization expense | $ 600,000 | $ 800,000 | $ 1,900,000 | $ 2,300,000 |
Composition of Certain Financ_7
Composition of Certain Financial Statement Captions - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 25,910 | $ 25,910 |
Accumulated Amortization | (15,930) | (14,004) |
Net | $ 9,980 | $ 11,906 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Original Life (Years) | 12 years | 12 years |
Weighted Average Remaining Life (Years) | 4 years 1 month 6 days | 4 years 9 months 18 days |
Gross | $ 16,550 | $ 16,550 |
Accumulated Amortization | (10,948) | (9,908) |
Net | $ 5,602 | $ 6,642 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Original Life (Years) | 15 years | 15 years |
Weighted Average Remaining Life (Years) | 6 years 3 months 18 days | 7 years |
Gross | $ 1,500 | $ 1,500 |
Accumulated Amortization | (870) | (795) |
Net | $ 630 | $ 705 |
Supply Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Original Life (Years) | 7 years | 7 years |
Weighted Average Remaining Life (Years) | 1 year 10 months 24 days | 2 years 8 months 12 days |
Gross | $ 2,910 | $ 2,910 |
Accumulated Amortization | (2,113) | (1,802) |
Net | $ 797 | $ 1,108 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Original Life (Years) | 8 years | 8 years |
Weighted Average Remaining Life (Years) | 5 years 1 month 6 days | 5 years 9 months 18 days |
Gross | $ 3,400 | $ 3,400 |
Accumulated Amortization | (1,240) | (921) |
Net | $ 2,160 | $ 2,479 |
Non-compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Original Life (Years) | 6 years 7 months 6 days | 6 years 7 months 6 days |
Weighted Average Remaining Life (Years) | 3 years 4 months 24 days | 4 years 1 month 6 days |
Gross | $ 1,550 | $ 1,550 |
Accumulated Amortization | (759) | (578) |
Net | $ 791 | $ 972 |
Composition of Certain Financ_8
Composition of Certain Financial Statement Captions - Summary of Expected Future Amortization Expense (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Fiscal 2022 (remaining) | $ 642 | |
Fiscal 2023 | 2,567 | |
Fiscal 2024 | 2,429 | |
Fiscal 2025 | 2,116 | |
Fiscal 2026 | 1,447 | |
Thereafter | 779 | |
Net | $ 9,980 | $ 11,906 |
Composition of Certain Financ_9
Composition of Certain Financial Statement Captions - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Accrued Liabilities, Current [Abstract] | ||
Accrued compensation and related taxes | $ 9,878 | $ 12,320 |
Acquisition contingent consideration | 2,500 | 2,500 |
Legal | 2,000 | 2,000 |
Medical and benefit-related payables | 1,321 | 1,172 |
Other | 1,212 | 1,216 |
Accrued board of director fees | 526 | 131 |
Bank overdraft | 1,366 | |
Interest payable | 110 | |
Total accrued expenses | $ 17,437 | $ 20,815 |
Loss Per Share - Summary of Bas
Loss Per Share - Summary of Basic and Diluted Income (Loss) Earnings Per Share of Common Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Earnings Per Share Diluted [Line Items] | |||||
Net income (loss) from continuing operations | $ 105,867 | $ (6,826) | $ 85,415 | $ (13,401) | |
Net income from discontinued operations, net of income taxes | 47,963 | 3,322 | 56,107 | 7,695 | |
Net income (loss) | $ 153,830 | $ (3,504) | $ 141,522 | $ (5,706) | |
Income (loss) per share of common stock-basic: | |||||
Continuing operations | $ 2.50 | $ (0.16) | $ 2.01 | $ (0.32) | |
Discontinued operations | 1.13 | 0.08 | 1.32 | 0.18 | |
Net income (loss) per share | [1] | 3.63 | (0.08) | 3.34 | (0.13) |
Income (loss) per share of common stock-diluted: | |||||
Continuing operations | 1.93 | (0.16) | 1.56 | (0.32) | |
Discontinued operations | 0.87 | 0.06 | 1.03 | 0.14 | |
Net income (loss) per share | [2] | $ 2.81 | $ (0.08) | $ 2.59 | $ (0.13) |
Weighted average shares of common stock outstanding: | |||||
Basic | 42,409,000 | 42,321,000 | 42,408,000 | 42,320,000 | |
Convertible debt | 11,158,000 | 11,158,000 | 11,158,000 | 11,158,000 | |
Warrants | 1,207,000 | 1,006,000 | 1,135,000 | 923,000 | |
Diluted | 54,818,000 | 54,503,000 | 54,735,000 | 54,416,000 | |
Anti-dilutive shares excluded from diluted net income (loss) per share calculation: | |||||
Anti-dilutive shares excluded from diluted net income (loss) per share | 1,250,000 | 2,607,000 | 1,250,000 | 2,607,000 | |
Employee Stock Option [Member] | |||||
Weighted average shares of common stock outstanding: | |||||
Employee stock option grants | 44,000 | 18,000 | 34,000 | 15,000 | |
Anti-dilutive shares excluded from diluted net income (loss) per share calculation: | |||||
Anti-dilutive shares excluded from diluted net income (loss) per share | 1,250,000 | 1,310,000 | 1,250,000 | 1,310,000 | |
Warrant [Member] | |||||
Anti-dilutive shares excluded from diluted net income (loss) per share calculation: | |||||
Anti-dilutive shares excluded from diluted net income (loss) per share | 1,297,000 | 1,297,000 | |||
[1] Amounts may not add due to rounding. Amounts may not add due to rounding. |
Debt - Summary of Line of Credi
Debt - Summary of Line of Credit, Term Loan and Equipment Financing (Detail) $ in Thousands | Jun. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) |
Line of credit: | ||
Line of credit, net of deferred loan costs | $ 5,490 | |
Line of credit, net of deferred loan costs | 5,490 | |
Current portion of term loans: | ||
Less: deferred loan costs | (1,108) | |
Current portion of term loans, net of deferred loan costs | 2,692 | |
Less: deferred loan costs | 1,108 | |
Term loans, net of deferred loan costs - current installments | 2,692 | |
Term loans, less current portion: | ||
Less: deferred loan costs | (2,792) | |
Term loans, less current portion, net of deferred loan costs | 6,026 | 93,484 |
Total line of credit and term loans | 6,026 | 101,666 |
Less: deferred loan costs | 2,792 | |
Term loans, less current portion, net of deferred loan costs | 6,026 | 93,484 |
PNC Revolver [Member] | ||
Line of credit: | ||
Line of credit | $ 5,490 | |
Line of credit interest rate | 5.25% | |
PNC Revolver LIBOR [Member] | ||
Line of credit: | ||
Line of credit interest rate | 4% | |
Blue Torch Term Loan [Member] | ||
Current portion of term loans: | ||
Current portion of term loan | $ 3,800 | |
Line of credit interest rate | 8.50% | |
Term loans, less current portion: | ||
Term Loan, less current portion | $ 90,250 | |
Line of credit interest rate | 8.50 | |
Convertible Notes Payable | ||
Term loans, less current portion: | ||
Convertible Promissory Notes | $ 6,026 | $ 6,026 |
Line of credit interest rate | 8.25 | 8.25 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Apr. 13, 2022 | Apr. 01, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Debt Instrument [Line Items] | ||||||
Pre-payment off premium related to repayment of outstanding indebtedness | $ 328,000 | $ 743,000 | $ 328,000 | $ 743,000 | ||
Loss on debt extinguishment | 3,884,000 | 1,914,000 | 3,884,000 | 1,914,000 | ||
Convertible Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | 6,000,000 | 6,000,000 | ||||
Blue Torch Term Loan [Member] | Term Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | 95,000,000 | 95,000,000 | ||||
Debt instrument, annual principle payment | $ 3,800,000 | $ 3,800,000 | ||||
Debt instrument maturity date | Jun. 29, 2025 | |||||
Blue Torch Term Loan [Member] | Term Loan [Member] | Faneuil Asset Sale [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Payment of outstanding indebtedness and commitments | $ 92,200,000 | |||||
Amended PNC Revolver [Member] | Letter of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 32,500,000 | $ 32,500,000 | ||||
Debt instrument maturity date | Jun. 29, 2025 | |||||
PNC Revolver [Member] | Line of Credit [Member] | Phoenix Sale [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Pre-payment off premium related to repayment of outstanding indebtedness | $ 300,000 | |||||
Blue Torch Term Loan and Amended PNC Revolver [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument accrued interest rate | 8.25% | 8.25% | ||||
Debt instrument maturity date | Nov. 28, 2023 | |||||
Blue Torch Term Loan and Amended PNC Revolver [Member] | Common Stock [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument conversion rate | $ 0.54 | $ 0.54 | ||||
Maximum [Member] | Amended PNC Revolver [Member] | Letter of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Letters of credit, sublimit amount | $ 15 | $ 15 |
Debt - Summary of Loss on Debt
Debt - Summary of Loss on Debt Extinguishment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Gain (Loss) on Extinguishment of Debt [Abstract] | ||||
Deferred loan costs written off | $ 3,556 | $ 1,171 | $ 3,556 | $ 1,171 |
Prepayment penalties | 328 | 743 | 328 | 743 |
Total loss on debt extinguishment | $ 3,884 | $ 1,914 | $ 3,884 | $ 1,914 |
Debt - Schedule of Estimated Fu
Debt - Schedule of Estimated Future Minimum Principal Payments (Detail) - Convertible Notes Payable $ in Thousands | Jun. 30, 2022 USD ($) |
Debt Instrument [Line Items] | |
2024 | $ 6,026 |
Total estimated future minimum payments | $ 6,026 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | Apr. 26, 2022 | Jun. 30, 2022 |
Loss Contingencies [Line Items] | ||
Percentage of letters of credit outstanding collateralized with cash deposits | 103% | |
Jesse James Pagan et. al. v. Faneuil [Member] | ||
Loss Contingencies [Line Items] | ||
Complaint filing date | April 26, 2022 | |
Minimum [Member] | Jesse James Pagan et. al. v. Faneuil [Member] | ||
Loss Contingencies [Line Items] | ||
Complaint seeks damages, value | $ 5 | |
Letters of Credit [Member] | ||
Loss Contingencies [Line Items] | ||
Line of credit amount outstanding | $ 3.5 | |
Line of credit outstanding collateralized with cash deposits | 3.6 | |
Employment Agreements [Member] | ||
Loss Contingencies [Line Items] | ||
Total contingent termination payments related to base salary | $ 2.1 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Jun. 30, 2022 USD ($) | |
Leases [Abstract] | |
Percentage of operating leases for facilities | 95% |
Lease impairment | $ 2,158 |
Leases - Summary of Location of
Leases - Summary of Location of ROU Assets and Liabilities in Consolidated Balance Sheet and Weighted Average Lease Term and Discount Rate (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Finance Leases: | ||
Property and equipment, at cost | $ 1,575 | $ 1,575 |
Less accumulated amortization | (1,277) | (977) |
Property and equipment, net | 298 | 598 |
Finance lease obligations - current installments | 528 | 765 |
Finance lease obligations, less current installments | 332 | |
Total finance lease liabilities | 528 | 1,097 |
Operating Leases: | ||
Operating lease right-of-use assets | 17,647 | 29,048 |
Operating lease obligations - current installments | 3,200 | 4,722 |
Operating lease obligations, less current installments | 20,167 | 32,767 |
Total operating lease obligations | $ 23,367 | $ 37,489 |
Weighted average remaining lease term (years): | ||
Weighted average remaining lease term of finance leases | 8 months 12 days | 1 year 4 months 24 days |
Weighted average remaining lease term of operating leases | 6 years 7 months 6 days | 6 years 9 months 18 days |
Weighted average discount rate: | ||
Weighted average discount rate of finance leases | 6% | 6% |
Weighted average discount rate of operating leases | 10.60% | 10.60% |
Leases - Summary of Components
Leases - Summary of Components of Lease Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Finance Leases: | ||||
Total finance lease cost | $ 49 | $ 241 | $ 338 | $ 800 |
Operating Leases: | ||||
Operating lease cost | 968 | 2,273 | 5,035 | 6,911 |
Lease impairment | 2,158 | |||
Total lease cost, net | 1,017 | 2,514 | 7,531 | 7,711 |
Selling, General and Administrative Expense [Member] | ||||
Finance Leases: | ||||
Amortization of finance lease assets | 39 | 189 | 300 | 696 |
Operating Leases: | ||||
Operating lease cost | 841 | 1,724 | 4,018 | 5,207 |
Short-term lease cost | 10 | 28 | ||
Cost of Revenue [Member] | ||||
Operating Leases: | ||||
Operating lease cost | 319 | 510 | 957 | |
Interest Expense [Member] | ||||
Finance Leases: | ||||
Interest on finance lease liabilities | 10 | 52 | 38 | 104 |
Net Loss from Discontinued Operations [Member] | ||||
Operating Leases: | ||||
Variable lease cost | $ 127 | $ 220 | 507 | $ 719 |
Lease Impairment [Member] | ||||
Operating Leases: | ||||
Lease impairment | $ 2,158 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows used for finance leases | $ 38 | $ 104 |
Financing cash flows used for finance leases | 607 | 2,350 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 1,379 | 576 |
Continuing Operations [Member] | ||
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows used for operating leases | $ 3,187 | $ 3,750 |
Schedule of Maturity of Lease L
Schedule of Maturity of Lease Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Finance Leases: | ||
2023 | $ 540 | |
Total lease payments | 540 | |
Less: imputed interest | (12) | |
Total present value of lease payments | 528 | $ 1,097 |
Current | 528 | 765 |
Non-current | 332 | |
Total finance lease liabilities | 528 | 1,097 |
Operating Leases: | ||
2023 | 5,292 | |
2024 | 5,133 | |
2025 | 5,102 | |
2026 | 5,091 | |
2027 | 4,161 | |
Thereafter | 6,502 | |
Total lease payments | 31,281 | |
Less: imputed interest | (7,914) | |
Total present value of lease payments | 23,367 | 37,489 |
Current | 3,200 | 4,722 |
Non-current | 20,167 | 32,767 |
Total operating lease obligations | 23,367 | $ 37,489 |
Sublease Cash Receipts: | ||
2023 | 771 | |
2024 | 771 | |
2025 | 771 | |
2026 | 771 | |
2027 | 257 | |
Total lease payments | 3,341 | |
Less: imputed interest | 682 | |
Total present value of lease payments | $ 2,659 |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jul. 11, 2016 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Class Of Stock [Line Items] | ||||||
Common stock, shares issued | 42,409,000 | 42,409,000 | 42,406,000 | |||
Equity incentive plan, description | In July 2016, ALJ shareholders approved ALJ’s Omnibus Equity Incentive Plan (“2016 Plan”), which allows ALJ and its subsidiaries to grant securities of ALJ to officers, employees, directors, or consultants. ALJ believes that equity-based compensation is fundamental to attracting, motivating, and retaining highly qualified dedicated employees who have the skills and experience required to achieve business goals. | |||||
Total unrecognized compensation cost related to unvested stock options | $ 100 | $ 100 | ||||
Weighted-average recognition period of unrecognized compensation cost related to unvested stock options | 2 years 2 months 12 days | |||||
Stock option awards, granted | 200,000 | 0 | ||||
Stock option fair value | $ 100 | |||||
Expected life of the options | 6 years 2 months 12 days | |||||
Expected volatility | 56.46% | |||||
Expected dividend yield | 0% | |||||
Annual risk free interest rate | 1.18% | |||||
Stock-based compensation expense | $ 41 | $ 41 | $ 154 | $ 126 | ||
Stock options, outstanding | 1,400,000 | 1,400,000 | ||||
Number of vested warrants issued, price per share | $ 3.50 | $ 3.50 | ||||
Warrants exercisable to purchase outstanding | 1,600,000 | 1,600,000 | ||||
Weighted average exercise price, stock warrants | $ 0.56 | $ 0.56 | ||||
Total intrinsic value for exercisable options | $ 100 | $ 100 | ||||
Common Stock Awards [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Stock-based compensation expense | 26 | 26 | 79 | 79 | ||
Maximum [Member] | Common Stock Awards [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Stock-based compensation expense | $ 100 | $ 100 | $ 100 | $ 100 | ||
2016 Omnibus Equity Incentive Plan [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Options available for future grant under the Plan | 1,400,000 | 1,400,000 | ||||
2016 Omnibus Equity Incentive Plan [Member] | Maximum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Maximum number of shares that may be granted | 2,000,000 | |||||
2016 Omnibus Equity Incentive Plan [Member] | Minimum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Stock option exercise price percentage of fair market value of common stock on grant date | 100% | |||||
Share-based compensation option term | 10 years | |||||
Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, shares issued | 100,000 | 100,000 | 100,000 | 100,000 | ||
Blank Check Preferred Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | |||
Preferred stock, shares outstanding | 0 | 0 | 0 |
Equity - Summary of Total Stock
Equity - Summary of Total Stock-Based Compensation Expense Included in Selling General and Administrative Expenses on Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 41 | $ 41 | $ 154 | $ 126 |
Employee Stock Option [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 15 | 15 | 75 | 47 |
Common Stock Awards [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 26 | $ 26 | $ 79 | $ 79 |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Examination [Line Items] | ||||
Provision for (benefit from) income taxes | $ 6,065,000 | $ 70,000 | $ 6,010,000 | $ 244,000 |
Effective income tax rate | (0.10%) | (0.70%) | ||
Discrete tax provision | $ 0 | |||
Provision for income taxes | $ 13,200,000 | $ 500,000 | ||
Phoenix [Member] | ||||
Income Tax Examination [Line Items] | ||||
Provision for income taxes from sales | 13,000,000 | |||
Provision for income taxes from operations | 200,000 | |||
Faneuil Asset Sale [Member] | ||||
Income Tax Examination [Line Items] | ||||
Discrete tax provision | $ 6,000,000 |
Ransomware Incident - Additiona
Ransomware Incident - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Financing Receivable Modifications [Line Items] | ||||
Expenses | $ (58,219) | $ 74,973 | $ 100,283 | $ 246,734 |
Selling, general, and administrative expense | 7,443 | $ 15,764 | 38,042 | $ 43,487 |
Faneuil [Member] | ||||
Financing Receivable Modifications [Line Items] | ||||
Selling, general, and administrative expense | 100 | 200 | ||
Insurance recovery receivable | $ 800 | $ 800 |
Reportable Segments and Geogr_2
Reportable Segments and Geographic Information - Additional Information (Detail) | 9 Months Ended |
Jun. 30, 2022 Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Details) - Subsequent Event [Member] - Stock Repurchase and Retirement [Member] $ / shares in Units, shares in Millions, $ in Millions | Jul. 11, 2022 USD ($) $ / shares shares |
Subsequent Event [Line Items] | |
Authorized number of repurchase and retirement of shares | shares | 3.7 |
Authorized amount of repurchase and retirement of shares | $ | $ 7.5 |
Share repurchased shareholders percentage | 5% |
Per share amount of repurchase and retirement of shares | $ / shares | $ 2 |