Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2019 | Jan. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2019 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
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 $0.01 per share | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity File Number | 001-37689 | |
Entity Tax Identification Number | 13-4082185 | |
Entity Address, Address Line One | 244 Madison Avenue | |
Entity Address, Address Line Two | PMB #358 | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10016 | |
City Area Code | 888 | |
Local Phone Number | 486-7775 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 42,172,791 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 2,554 | $ 4,529 |
Accounts receivable, net of allowance for doubtful accounts of $126 at December 31, 2019 and September 30, 2019 | 50,106 | 41,707 |
Inventories, net | 6,864 | 6,777 |
Prepaid expenses and other current assets | 10,356 | 5,515 |
Income tax receivable | 897 | |
Total current assets | 69,880 | 59,425 |
Property and equipment, net | 66,176 | 69,870 |
Goodwill | 59,047 | 59,047 |
Intangible assets, net | 39,803 | 41,148 |
Collateral deposits | 695 | 695 |
Other assets | 1,281 | 992 |
Total assets | 236,882 | 231,177 |
Current liabilities: | ||
Accounts payable | 15,578 | 15,070 |
Accrued expenses | 15,563 | 16,092 |
Income taxes payable | 619 | 367 |
Deferred revenue and customer deposits | 5,505 | 1,965 |
Current portion of term loans, net of deferred loan costs | 9,106 | 9,119 |
Current portion of capital lease obligations | 2,173 | 2,535 |
Current portion of workers’ compensation reserve | 1,026 | 1,043 |
Other current liabilities | 78 | 72 |
Total current liabilities | 49,648 | 46,263 |
Line of credit, net of deferred loan costs | 19,662 | 9,372 |
Term loans, less current portion, net of deferred loan costs | 70,527 | 73,614 |
Deferred revenue, less current portion | 281 | 349 |
Workers’ compensation reserve, less current portion | 1,312 | 1,312 |
Capital lease obligations, less current portion | 2,184 | 2,623 |
Deferred tax liabilities, net | 1,748 | 2,795 |
Other non-current liabilities | 11,482 | 11,733 |
Total liabilities | 156,844 | 148,061 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value; authorized – 100,000 shares; 42,173 shares issued and outstanding at December 31, 2019 and September 30, 2019 | 422 | 422 |
Additional paid-in capital | 287,779 | 287,101 |
Accumulated deficit | (208,163) | (204,407) |
Total stockholders’ equity | 80,038 | 83,116 |
Total liabilities and stockholders’ equity | $ 236,882 | $ 231,177 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2019 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 126 | $ 126 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 42,173,000 | 42,173,000 |
Common stock, shares outstanding | 42,173,000 | 42,173,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Income Statement [Abstract] | |||
Net revenue | $ 90,465 | $ 93,784 | $ 354,997 |
Costs and expenses: | |||
Cost of revenue | 75,726 | 74,646 | 283,876 |
Selling, general, and administrative expense | 16,610 | 15,647 | 65,953 |
Loss (gain) on disposal of assets and other gain, net | 2 | (223) | (216) |
Total operating expenses | 92,338 | 90,070 | 350,359 |
Operating (loss) income | (1,873) | 3,714 | 4,638 |
Other (expense) income: | |||
Interest expense, net | (2,564) | (2,715) | (10,611) |
Interest from legal settlement | 200 | ||
Total other expense, net | (2,364) | (2,715) | (10,611) |
(Loss) income before income taxes | (4,237) | 999 | (5,973) |
Provision for income taxes | (40) | (288) | (10,006) |
Net (loss) income | $ (4,277) | $ 711 | $ (15,979) |
Basic (loss) earnings per share of common stock | $ (0.10) | $ 0.02 | |
Diluted (loss) earnings per share of common stock | $ (0.10) | $ 0.02 | |
Weighted average shares of common stock outstanding: | |||
Basic | 42,173 | 38,047 | |
Diluted | 42,173 | 38,097 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | ||
Net (loss) income | $ (4,277) | $ 711 |
Adjustments to reconcile net (loss) income to cash used for operating activities: | ||
Depreciation and amortization | 5,242 | 4,446 |
Stock-based compensation expense | 112 | 185 |
Fair value of warrants issued in connection with debt modification | 594 | |
Provision for bad debts and obsolete inventory | 104 | 68 |
Deferred income taxes | (1,047) | 49 |
Loss (gain) on disposal of assets and other gain, net | 2 | (223) |
Interest expense accreted to term loan | 6 | |
Amortization of deferred loan costs | 173 | 238 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (8,096) | (7,918) |
Inventories, net | (389) | 21 |
Prepaid expenses, collateral deposits, and other current assets | (4,217) | (1,221) |
Income tax receivable | 897 | |
Other assets | (289) | 283 |
Accounts payable | 508 | 1,230 |
Accrued expenses | (365) | 1,493 |
Income tax payable | 252 | (28) |
Deferred revenue and customer deposits | 3,300 | (1,054) |
Other current liabilities | (11) | (109) |
Other liabilities | (251) | (340) |
Cash used for operating activities | (7,752) | (2,169) |
Investing activities | ||
Acquisitions, net of cash acquired | (1,000) | |
Proceeds from sales of assets | 1 | 308 |
Capital expenditures | (675) | (4,883) |
Cash used for investing activities | (674) | (5,575) |
Financing activities | ||
Net proceeds from line of credit | 10,490 | 6,868 |
Payments on term loans | (3,215) | (2,743) |
Proceeds from term loan | 5,000 | |
Deferred loan costs | (264) | (402) |
Payments on capital leases | (560) | (811) |
Cash provided by financing activities | 6,451 | 7,912 |
Change in cash and cash equivalents | (1,975) | 168 |
Cash and cash equivalents at beginning of period | 4,529 | 2,000 |
Cash and cash equivalents at end of period | 2,554 | 2,168 |
Cash paid during the period for: | ||
Taxes | 517 | 372 |
Interest | 2,344 | 2,359 |
Non-cash investing and financing activities: | ||
Capital equipment purchases financed with capital leases | $ 110 | |
Capital equipment purchases financed with term loan | 4,060 | |
Construction in process funded by landlord tenant improvement allowance | 3,500 | |
Construction in process not yet paid for | $ 2,700 |
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, 2018 | $ 381 | $ 279,575 | $ (188,428) | |
Stock-based compensation expense - options | 84 | |||
Common stock retired | (1) | (147) | ||
Net (loss) income | $ 711 | 711 | ||
Ending balance at Dec. 31, 2018 | 92,175 | 380 | 279,512 | (187,717) |
Beginning balance at Sep. 30, 2019 | 83,116 | 422 | 287,101 | (204,407) |
Stock-based compensation expense - options | 84 | |||
Fair value of warrants issued in connection with debt modification | 594 | 594 | ||
Net (loss) income | (4,277) | (4,277) | ||
Cumulative impact of adopting ASC 606 on October 1, 2019 | 521 | |||
Ending balance at Dec. 31, 2019 | $ 80,038 | $ 422 | $ 287,779 | $ (208,163) |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Basis of Presentation | ALJ REGIONAL HOLDINGS, INC. AND SUBSIDIARIES Organization ALJ Regional Holdings, Inc. (including subsidiaries, referred to collectively herein as “ALJ” or “Company”) is a holding company. As of December 31, 2019, ALJ consisted of the following wholly owned subsidiaries: • Faneuil, Inc. (including its subsidiaries, “Faneuil”). • Floors-N-More, LLC, d/b/a, Carpets N’ More (“Carpets”) • Phoenix Color Corp. (including its subsidiaries, “Phoenix”). ALJ has organized its business and corporate structure along the following business segments: Faneuil, Carpets, and Phoenix. Basis of Presentation The interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Condensed Consolidated Financial Statements and footnotes thereto are unaudited. In the opinion of the Company’s management, the Condensed Consolidated Financial Statements reflect all adjustments, which are of a normal recurring nature, that are necessary for a fair presentation of the Company’s interim financial results. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the assets, liabilities, revenue and expenses that are reported in the Condensed Consolidated Financial Statements and footnotes thereto. Actual results may differ from those estimates. 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 the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019, filed with the SEC on December 23, 2019. Revision of Previously Reported Financial Information The Company has historically classified expenses incurred by the Faneuil reportable segment as either cost of revenue or selling, general, and administrative expense based on whether such expenses represented salaries and wages or an expense other than salary and wages. Faneuil is a labor intensive business with labor representing the majority of the cost of revenue. Management determined that certain costs classified as cost of revenue should be classified as selling, general, and administrative expense, while other costs classified as selling, general, and administrative expense should be classified as cost of revenue. Accordingly, the accompanying Condensed Consolidated Statement of Operations for the three months ended December 31, 2018 has been revised to correct the amounts previously reported as cost of revenue and selling, general, and administrative expense as applicable. In accordance with Accounting Standards Codification ASC 250 (Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin 99, Assessing Materiality The following tables presents the impact of Faneuil’s reclassification on the Condensed Consolidated Statement of Operations for the three months ended December 31, 2018 and the year ended September 30, 2019: Three Months Ended December 31, 2018 ( in thousands, except per share amounts As Previously Reported Revisions As Revised Net revenue $ 93,784 $ — $ 93,784 Costs and expenses: Cost of revenue 72,827 1,819 74,646 Selling, general, and administrative expense 17,466 (1,819 ) 15,647 (Gain) loss on disposal of assets and other gain, net (223 ) — (223 ) Total operating expenses 90,070 — 90,070 Operating income 3,714 — 3,714 Other (expense) income: Interest expense, net (2,715 ) — (2,715 ) Total other expense (2,715 ) — (2,715 ) Income before income taxes 999 999 Provision for income taxes (288 ) — (288 ) Net income $ 711 $ — $ 711 Basic earnings per share of common stock $ 0.02 $ — $ 0.02 Diluted earnings per share of common stock $ 0.02 $ — $ 0.02 Basic 38,047 — 38,047 Diluted 38,097 — 38,097 Year Ended September 30, 2019 ( in thousands, except per share amounts As Previously Reported Revisions As Revised Net revenue $ 354,997 $ — $ 354,997 Costs and expenses: Cost of revenue 277,454 6,422 283,876 Selling, general, and administrative expense 72,375 (6,422 ) 65,953 Impairment of intangible assets 746 — 746 (Gain) loss on disposal of assets and other gain, net (216 ) — (216 ) Total operating expenses 350,359 — 350,359 Operating income 4,638 — 4,638 Other (expense) income: Interest expense, net (10,611 ) — (10,611 ) Total other expense, net (10,611 ) — (10,611 ) Loss before income taxes (5,973 ) — (5,973 ) Provision for income taxes (10,006 ) — (10,006 ) Net loss $ (15,979 ) $ — $ (15,979 ) Loss per share of common stock–basic and diluted $ (0.41 ) $ — $ (0.41 ) Weighted-average shares of common stock outstanding– basic and diluted 38,710 — 38,710 The correction of these previously reported amounts had no impact on the Company’s consolidated income (loss) before income taxes, net income (loss), financial position, or cash flows. In addition, corresponding revisions had no impact to Reportable Segments or Geographic disclosures. |
Recent Accounting Standards
Recent Accounting Standards | 3 Months Ended |
Dec. 31, 2019 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Standards | 2. RECENT ACCOUNTING STANDARDS Accounting Standards Adopted Stock Compensation In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting This amendment expands the scope of the FASB’s Topic 718, Compensation—Stock Compensation (which currently includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. ASU 2018-07 did not significantly impact ALJ’s consolidated financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers On October 1, 2019 ALJ adopted ASC 606 using the modified retrospective transition method. The Company applied the new revenue standard to contracts not completed as of the date of initial application. As part of the adoption of ASC 606, the Company assessed all aspects of ASC 606 and the potential impact on each entity. The adoption impacted each entity as follows: Faneuil. The performance obligations in contracts vary depending on the nature of the contract. Contracts generally include the provision of call center services and in certain contracts the provision of various implementation services. The costs incurred as part of implementation relate to either a partially satisfied performance obligation, fulfillment costs, or administrative costs. Under current guidance, Faneuil capitalizes these costs and amortizes them over the stated contractual term on a straight-line basis. Under ASC 606, the only costs that are capitalizable are fulfillment costs. Certain contracts require that a customer make nonrefundable payments to Faneuil prior to the commencement of call center services. The timing of fixed payments may be based on the achievement of specified implementation milestones. Additionally, customers may be required to make certain nonrefundable variable payments (e.g., training of personnel) prior to the commencement of operations. Under ASC 606, when upfront fees do not relate directly to the satisfaction or partial satisfaction of a performance obligation, the payments are deemed to be advance payments for future services. In such, instances, the fees are allocated to performance obligations and recognized when or as the performance obligations are satisfied over the contract term. As a result of termination provisions, the contract term under ASC 606 may be shorter than the contractually stated contract term, resulting in the upfront nonrefundable fees being fully recognized prior to the expiration of the stated term of the contract. Under previous guidance, depending on the nature of the upfront fees, the fees may be recognized as implementation services are provided or, in cases where implementation services are not provided, deferred and amortized over the stated contractual term on a straight-line basis. Faneuil concluded that, in most cases, pass through and reimbursed costs are accounted for on a gross basis as Faneuil incurs these costs as part of performing the call center services. Additionally, in certain arrangements, Faneuil utilizes third-party service providers in performing the obligations in the contract. Faneuil has concluded that it acts as the principal for all arrangements in which a third-party is utilized as part of the implementation or operation of a call center. This accounting is consistent with the accounting under previous guidance. Upon adoption of ASC 606, Faneuil eliminated deferred costs incurred during the implementation phase relating to partially satisfied performance obligations and reduced deferred revenue as a result of contracts with termination provisions that accelerated the period over which deferred revenue was recognized. Carpets. Although Carpets determined that the timing and amount of total revenue recognized over the life of a construction project is not materially impacted, the revenue recognized on a quarterly basis during the construction period may change. Carpets determined that ASC 606 is more impactful to certain of its lump sum projects as a result of the following required changes from its current practices: • Performance obligations • Variable consideration Upon adoption of ASC 606, Carpets adjusted the following: • Revenue associated with open contracts to the amount determined by applying the input method of recognizing revenue to the transaction price for each separate performance obligation within a contract; and • Estimated losses when estimated contract costs exceeded the transaction price. Phoenix. Phoenix determined that ASC 606 impacts the timing of revenue recognition under the following circumstances: • Completed production held in inventory • Safety stock. Lastly, the contracts that Phoenix has with its customers often include prospective and retrospective volume rebates, credits, discounts, and other similar items that generally decrease the amount a customer pays Phoenix. These variable amounts generally are credited to the customer, based on achieving certain levels of sales activity, when contracts are signed, or making payments within payment specific terms. Under ASC 606, with the exception of prospective volume rebates, these adjustments are classified as variable consideration, which is estimated at contract inception, and included as part of the transaction price, subject to constraints. Under ASC 606, prospective volume rebates are not part of the transaction price, but are instead accounted for as a material right and separate performance obligation. Upon adoption of ASC 606, Phoenix recognized revenue associated with certain completed inventory and safety stock held in inventory as discussed above, adjusted revenue for prospective volume rebates treated as material rights and adjusted the timing of revenue recognition relating to variable consideration. Based upon the balances that existed as of September 30, 2019, the Company recorded adjustments to the following accounts as of October 1, 2019: Adjustments for the Adoption of ASC 606 ( in thousands As Reported September 30, 2019 Faneuil Carpets Phoenix Total Adjustment Adjusted October 1, 2019 Assets Prepaid expenses and other current assets $ 5,515 $ 777 $ (61 ) $ 161 $ 877 $ 6,392 Inventories, net 6,777 — 19 (217 ) (198 ) 6,579 Liabilities Accrued expenses 16,092 — (12 ) (2 ) (14 ) 16,078 Deferred revenue and customer deposits 1,965 172 — — 172 2,137 Stockholders’ equity Accumulated deficit (204,407 ) 605 (30 ) (54 ) 521 (203,886 ) As a result of the above adjustments, total assets increased by $0.7 million, total liabilities increased by $0.2 million, and total stockholders’ equity increased by $0.5 million. The following table summarize the impacts of adopting the new revenue accounting guidance on ALJ’s Consolidated Balance Sheet as of December 31, 2019: As of December 31, 2019 Adjustments for the Adoption of ASC 606 ( in thousands As Reported Faneuil Carpets Phoenix Total Adjustment As if Previous Standard was in Effect Assets Prepaid expenses and other current assets $ 10,356 $ (1,207 ) $ (8 ) $ (669 ) $ (1,884 ) $ 8,472 Inventories, net 6,864 — 6 528 534 7,398 Liabilities Accrued expenses 15,563 (10 ) 7 2 (1 ) 15,562 Deferred revenue and customer deposits 5,505 (541 ) — — (541 ) 4,964 Stockholders’ equity Accumulated deficit (208,163 ) (656 ) (9 ) (143 ) (808 ) (208,971 ) The difference between the reported balances and the amounts that would have been recorded had the previous guidance been in effect • Inventory in the amounts that would have been recorded had the previous guidance been in effect • Receivables and other assets in the amounts that would have been recorded had the previous guidance been in effect • Deferred revenue in the amounts that would have been recorded had the previous guidance been in effect The following table summarize the impacts of adopting the new revenue accounting guidance on ALJ’s Statement of Operation for the three months ended December 31, 2019: Three Months Ended December 31, 2019 Adjustments for the Adoption of ASC 606 ( in thousands, except per share amounts As Reported Faneuil Carpets Phoenix Total Adjustment As if Previous Standard was in Effect Net revenue $ 90,465 $ (354 ) $ 53 $ (834 ) $ (1,135 ) $ 89,330 Cost of revenue 75,726 907 32 (745 ) 194 75,920 Net loss (4,277 ) (1,261 ) 21 (89 ) (1,329 ) (5,606 ) Loss per share of common stock–basic and diluted (0.10 ) (0.03 ) 0.00 (0.00 ) (0.03 ) (0.13 ) The differences between the reported balances and the amounts that would have been recorded had the previous guidance been in effect are due to the following impacts: • Reduction in the revenue and cost of revenue in the amounts that would have been recorded had the previous guidance been in effect • Reduction in revenue and cost of revenue in the amounts that would have been recorded had the previous guidance been in effect • Increase in revenue and cost of revenue in the amounts that would have been recorded had the previous guidance been in effect The consolidated statement of cash flows for the three months ended December 31, 2019 takes into consideration the effect of adopting ASC 606. Adoption of the new accounting guidance had no impact to net cash provided by (used for) operating, financing or investing activities on our condensed consolidated statement of cash flows for the three months ended December 31, 2019. Accounting Standards Not Yet Adopted Leases In February 2016, the FASB issued ASU 2016-02, Leases ASU 2016-02 requires lessees to recognize a right-of-use asset and corresponding lease liability for all leases with terms of more than 12 months. Recognition, measurement, and presentation of expenses will depend on classification as either a finance or operating lease. ASU 2016-02 also requires certain quantitative and qualitative disclosures. The provisions of ASU 2016-02 should be applied on a modified retrospective basis. ASU 2016-02 will be effective for ALJ on October 1, 2020. The adoption of ASU 2016-02 will result in a material increase to the Company’s consolidated balance sheets for lease liabilities and right-of-use assets. The Company is currently evaluating the other effects the adoption of ASU 2016-02 will have on its consolidated financial statements and related disclosures. Internal-Use Software In August 2018, the FASB issued 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, Intangibles–Goodwill and Other |
Revenue recognition
Revenue recognition | 3 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 3. REVENUE RECOGNITION Accounting Policy Update As a result of adopting ASC 606, ALJ updated its revenue recognition accounting policy effective October 1, 2019. The Company recognized r evenue Faneuil . Faneuil contracts with its customers are typically in the form of a written contract executed between the Faneuil its customers that may include a Statement of Work, Request for Proposal, Responses to the Request for Proposal, and other correspondence. The contracts often provide the customer with renewal and/or termination options that impact the contract term under ASC 606. Faneuil contracts often include promises to transfer multiple products and services to its customers. Determining whether products and services are considered distinct performance obligations that should be accounted for separately, versus together, requires significant judgment. Typically, Faneuil contracts include performance obligation(s) to stand-ready on a daily or monthly basis to provide services to its customers. Under a stand-ready obligation, the evaluation of the nature of the performance obligation is focused on each time increment rather than the underlying activities. Accordingly, the promise to stand-ready is accounted for as a single-series performance obligation. Faneuil provides implementation activities prior to commencing services under the stand-ready obligation. The determination of whether the implementation activities are classified as fulfillment activities or promised goods and services and the determination of whether the implementation promised goods and services are distinct performance requirements requires significant judgment. Once Faneuil determines the performance obligations, Faneuil estimates the amount of variable consideration to be included in determining the transaction price. Typical forms of variable consideration include variable pricing based on the number of transactions processed or usage-based pricing arrangements. Variable consideration is also present in the form of tiered and declining pricing, penalties for service level agreements, performance bonuses, and credits. In circumstances where Faneuil meets certain requirements to allocate variable consideration to a distinct service within a series of related services, Faneuil allocates variable consideration to each distinct period of service within the series. If Faneuil does not meet those requirements, Faneuil includes an estimate of variable consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty is resolved. For contracts with multiple performance obligations, the transaction price is allocated to the separate performance obligations on a relative stand-alone selling price basis. Faneuil generally determines stand-alone selling prices based on the prices charged to customers or by using expected cost plus a margin. Faneuil typically satisfies its performance obligations over time as the services are provided. A time-elapsed output method is used to measure progress because the nature of Faneuil’s promise is a stand-ready service and efforts are expended evenly throughout the period. Faneuil uses a cost-to-cost based input method to measure progress on its implementation services. Faneuil has determined that the above methods provide a faithful depiction of the transfer of services to the customer. Revenue expected to be recognized in future periods exclude unexercised customer options to purchase additional services that do not represent material rights to the customer. Customer options that do not represent a material right are only accounted for when the customer exercises its option to purchase additional goods or services. When more than one party is involved in providing services to a customer, Faneuil evaluates whether it is the principal, and reports revenue on a gross basis, or as an agent, and reports revenue on a net basis. In this assessment, Faneuil considers the following: if it obtains control of the specified services before they are transferred to the customer; if it is primarily responsible for fulfillment; and whether it has discretion in establishing price. Based on its evaluation, in most circumstances, Faneuil determined that it acts as the principal. Faneuil's payment terms vary by type of services offered. Generally, the time between provision of services during the operational phase, invoicing, and when payment is due is not significant. However, Faneuil sometimes receives advances or deposits from its customers before revenue is recognized, resulting in deferred revenue, which is recorded as a contract liability. The timing of when Faneuil bills its customers during the implementation phase is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when services are provided. Sometimes, billing occurs subsequent to revenue recognition, resulting in unbilled revenue, which is recorded as a contract asset. From time to time, Faneuil contracts are modified to account for additions or changes to existing performance obligations. Each modification is evaluated under the guidance of ASC 606 and accounted for based on the specific modifications. When a contract modification relates to a stand-ready performance obligation, the impact of the modification is generally accounted for prospectively. Carpets. The majority of Carpets revenue is from the installation of flooring, cabinets, and countertops for new homes. The contracts for these products are with homebuilders in the form of a purchase order issued in connection with a Master Service Agreement (“MSA”) and Work Agreement. Carpets also enters into contracts with retail customers to install these same products in the form of a purchase order. The majority of the work performed under each purchase order is completed in less than two-weeks. Carpets also enters into construction contracts with its commercial customers. The work performed under a construction contract ranges from a couple of weeks up to a year. Carpets contracts are fixed-price contracts. Carpets evaluates whether two or more contracts should be combined and accounted for as one single performance obligation and whether a single contract should be accounted for as more than one performance obligation. The majority of Carpets contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contract and, therefore, is not distinct. However, occasionally Carpets may have contracts with multiple performance obligations. For contracts with multiple performance obligations, Carpets allocates the contracts transaction price to each performance obligation using the observable stand-alone selling price, if available, or alternatively Carpets best estimate of the stand-alone selling price of each distinct performance obligation in the contract. The primary method used to estimate stand-alone selling price is the expected cost plus a margin approach for each performance obligation. The nature of Carpets contracts give rise to several types of variable consideration, including contract modifications (change orders and claims), liquidated damages, and other terms that can either increase or decrease the transaction price. Carpets estimates variable consideration as the most likely amount to which Carpets expects to be entitled. Carpets includes estimated amounts in the transaction price to the extent Carpets believes it has an enforceable right and it is probable that a significant reversal of cumulative revenue recognized will not occur. Carpets estimates variable consideration and the determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available at this time. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. This evaluation may require significant judgment and the decision to combine a group of contracts or separate a contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. Revenue is recognized over time as work is completed because of the continuous transfer of control to the customer (typically using an input measure such as costs incurred to date relative to total estimated costs at completion to measure progress). Carpets uses a cost-to-cost based input method using labor costs to measure progress on its services. Carpets has determined that using labor cost As a significant change in one or more of these estimates could affect the profitability of Carpets contracts, Carpets reviews and updates its contract-related estimates regularly. Carpets recognizes adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the cumulative impact of the profit adjustment is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. Such adjustments have not been material due to the shorter term of the majority of Carpets contracts. If at any time the estimate of contract profitability indicates an anticipated loss on a contract, the projected loss is recognized in full, including any previously recognized profit, in the period it is identified and recognized as an accrued contract losses (contract liability). For contract revenue recognized over time, the accrued contract losses is adjusted so that the gross profit for the contract remains zero in future periods. Contract modifications result from changes in contract specifications or requirements. Carpets considers unapproved change orders to be contract modifications for which customers have not agreed to both scope and price. Carpets considers claims to be contract modifications for which Carpets seeks, or will seek, to collect from customers, or others, for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs on which there is no agreement with customers. Claims can also be caused by non-customer-caused changes, such as rain or other weather delays. Costs associated with contract modifications are included in the estimated costs to complete the contracts and are treated as project costs when incurred. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract. The effect of a contract modification on the transaction price, and Carpets’ measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue on a cumulative catch-up basis. In some cases, settlement of contract modifications may not occur until after completion of work under the contract. The timing of when Carpets bills its customers is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when services are provided. Sometimes, billing occurs subsequent to revenue recognition, resulting in unbilled revenue, which is a contract asset. However, Carpets sometimes receive advances or deposits from its customers before revenue is recognized, resulting in deferred revenue, which is a contract liability. Carpets estimates the collectability of contract amounts at the same time that Carpets estimates project costs. If Carpets anticipates that there may be issues associated with the collectability of the full amount calculated as the transaction price, Carpets may reduce the amount recognized as revenue to reflect the uncertainty associated with realization of the eventual cash collection. Carpets provides a warranty relating to the products installed and the installation of the products. Since the warranty covers instances when products installed are defective and/or are not installed properly, the warranty is classified as an assurance warranty. Carpets accrues for expected warranty work as revenue is recognized. Phoenix. Phoenix contracts with its customers are typically in the form of a purchase order issued to the Company by its customers and, in the form of a purchase order issued in connection with a formal MSA executed with a customer. The majority of Phoenix revenue is derived from purchases under which Phoenix provides a specific product or service and, as a result, each product or service is one performance obligation. Additionally, Phoenix concluded that prospective volume rebates provided to certain customers are material rights, which is a separate performance obligation. Revenue is measured as the amount of consideration Phoenix expects to receive in exchange for transferring goods or providing services, which is based on transaction prices set forth in contracts with customers and an estimate of variable consideration, as applicable. Variable consideration resulting from volume rebates, fixed rebates, and sales discounts that are offered within contracts between Phoenix and its customers is recognized in the period the related revenue is recognized. Estimates of variable consideration are based on stated contract terms and an analysis of historical experience. The amount of variable consideration is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For contracts with multiple performance obligations, such as when a contract contains a material right, the transaction price allocated to each performance obligation is based on the price stated in the customer contract, which represents Phoenix’s best estimate of the stand-alone selling price of each distinct good or service in the contract and the expected value of a prospective volume rebate. Phoenix recognizes revenue at a point in time for substantially all products. The point in time when revenue is recognized is when the performance obligation has been completed and the customer obtains control of the products, which is generally upon shipment to the customer (dependent upon specific shipping terms). Under agreements with certain customers, custom products may be stored by the Company for future delivery. Based upon contractual terms, Phoenix is typically able to recognize revenue once the performance obligation is satisfied and the customer obtains control of the completed product, usually when it completes production (depending on the specific facts and circumstances). In these situations, Phoenix may also receive a logistics or warehouse management fee for the services it provides, which Phoenix recognizes over time as the services are provided. • With certain customer contracts, Phoenix is permitted to complete a pre-defined quantity of custom products and holds such inventory until the customer requests shipment (which generally is required to be delivered in the same year as production). For these items, Phoenix has the contractual right to receive payment once the production is completed, regardless of the ultimate delivery date. Based upon contractual terms, Phoenix recognizes revenue once the performance obligation has been satisfied and the customer obtains control of the completed products, usually when production is completed. • In limited situations, Phoenix is permitted to produce and hold in inventory a pre-defined quantity of custom products as safety stock. Similar to completed production held in inventory, for these items, Phoenix has the contractual right to receive payment for the pre-defined quantity once the production is completed, regardless of the ultimate delivery date. Based upon Phoenix’s evaluation of the contractual terms, Phoenix recognizes revenue once the performance obligation has been satisfied and the customer obtains control of the completed product, usually when production is completed. Billings for shipping and handling costs are recorded in revenue on a gross basis. Phoenix made an accounting policy election under ASC 606 to account for shipping and handling after the customer obtains control of the good as fulfillment activities rather than as a separate service to the customer. As a result, when Phoenix is responsible for shipment, Phoenix accrues the costs of the shipping and handling if revenue is recognized for the related good before the fulfillment activities occur. Many of Phoenix’s operations process materials, primarily paper, that may be supplied directly by customers or may be purchased by Phoenix and sold to customers as part of the end product. No revenue is recognized for customer-supplied paper, but revenue for Phoenix-supplied paper is recognized on a gross basis. In limited circumstances, Phoenix collects taxes from its customers. When taxes are collected, Phoenix records the taxes collected from customers and remitted to governmental authorities on a net basis. Contracts do not contain a significant financing component as payment terms on invoiced amounts are typically between 30 to 120 days, based on a credit assessment of individual customers, as well as industry expectations. The timing of revenue recognition, billings, and cash collections results in accounts receivable and unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. Revenue recognition generally coincides with Phoenix’s contractual right to consideration and the issuance of invoices to customers. Depending on the nature of the performance obligation and arrangements with customers, the timing of the issuance of invoices may result in contract assets or contract liabilities. Contract assets related to unbilled receivables are recognized for satisfied performance obligations for which Phoenix cannot yet issue an invoice. Contract liabilities result from advances or deposits from customers on performance obligations not yet satisfied. Phoenix provides a warranty that the products conform to the customer specifications and are free of defects. The warranty is classified as an assurance warranty. Phoenix generally obtains customer approval prior to commencing production to minimize warranty issues. As a result, warranty claims are generally not significant. However, Phoenix accrues for the estimated warranty work when revenue is recognized, if material. Because the majority of Phoenix products are customized, product returns are not significant. However, Phoenix accrues for the estimated amount of customer returns at the time of sale, if deemed material. Contract Assets and Liabilities The following table provides information about consolidated contract assets and contract liabilities at December 31, 2019 and October 1, 2019: ( in thousands December 31, 2019 October 1, 2019 Contract assets: Unbilled revenue (1) $ 2,255 $ 825 Total contract assets $ 2,255 $ 825 Contract liabilities Deferred revenue $ 5,238 $ 1,838 Accrued rebates and material rights (2) 3,281 2,612 Accrued contract losses (3) 12 15 Total contract liabilities $ 8,531 $ 4,465 (1) Included in prepaid expenses and other current assets on the Consolidated Balance Sheet. Unbilled revenue represent 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. (2) Of the total balance, $0.4 million is included in other non-current liabilities and $2.9 million is included in accrued expenses on the Consolidated Balance Sheet. (3) Included in accrued expenses on the Consolidated Balance Sheet. The following table provides changes in consolidated contract assets and contract liabilities during the three months ended December 31, 2019: ( in thousands Contract Assets Contract Liabilities Balance, beginning of period (October 1, 2019) $ 825 $ 4,465 Additions to unbilled revenue, net 1,430 — Revenue recognized — (1,956 ) Change in loss accrual — (3 ) Accrued rebates — 669 Cash received from customer — 5,356 Balance, end of period $ 2,255 $ 8,531 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 in accordance with the new revenue standard. Estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially satisfied at December 31, 2019, was de minimis. This balance does not include revenue related to performance obligations that are part of a contract whose original expected duration is one year or less, including contracts with a penalty-free termination for convenience clause. In addition, this disclosure does not include (i) expected consideration related to performance obligations for which the Company elects to recognize revenue in the amount it has a right to invoice (e.g., usage-based pricing terms), and (ii) any variable consideration which is allocated entirely to future performance obligations including variable transaction fees or fees tied directly to costs incurred. Disaggregation of Revenue Revenue by contract type was as follows for the three months ended December 31, 2019: ( in thousands Three Months Ended December 31, 2019 Faneuil: Transportation $ 17,128 Utility 13,927 Healthcare 25,367 Government 1,049 Other 1,096 Total Faneuil $ 58,567 Carpets Builder $ 6,959 Commercial 1,628 Retail 1,187 Total Carpets $ 9,774 Phoenix: Publisher MSA $ 12,430 Non-MSA 6,560 Commercial MSA 805 Non-MSA 2,329 Total Phoenix $ 22,124 Total consolidated revenue, net $ 90,465 Substantially all of Faneuil and Carpets revenue is recognized over time and substantially all of Phoenix revenue is recognized at a point in time. 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 under the new revenue standard 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. During the three months ended December 31, 2019, the Company recognized $0.1 million of amortization of these costs, which is included in selling, general, and administrative expense in our Consolidated Statement of Operations. The net book value of these costs was $0.6 million as of December 31, 2019, of which $0.3 million was in prepaid expenses and other current assets, and $0.3 million was in other assets. 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 amortization of costs incurred to fulfill contracts, which comprise set-up/transition activities, for the three months ended December 31, 2019 was approximately $1.5 million. The net book value of the costs as of December 31, 2019, was $2.1 million as of December 31, 2019, of which $1.7 million was in prepaid expenses and other current assets, and $0.4 million was in other assets. Capitalized costs to obtain and fulfill a contract are periodically reviewed for impairment. We did not incur any impairment losses during the three months ended December 31, 2019. |
Acquisitions
Acquisitions | 3 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | 4. ACQUISITIONS RDI Acquisition On July 31, 2019 (“RDI Purchase Date”), Faneuil acquired Realtime Digital Innovations, LLC (“RDI” and such acquisition, the “RDI Acquisition”), a provider of workflow automation and business intelligence services. The RDI Acquisition is expected to provide Faneuil with a sustainable competitive advantage in the business process outsourcing space by allowing it to, among other things, (i) automate process workflows and business intelligence, (ii) generate labor efficiencies for existing programs, (iii) expand potential new client target entry points, (iv) improve overall customer experience, and (v) increase margin profiles through shorter sales cycles and software license sales. The aggregate cash consideration for the RDI Acquisition paid at closing was $2.5 million, with earn-outs up to $7.5 million to be paid upon the achievement of certain financial metrics over a three-year period, subject to a guaranteed payout of $2.5 million. The following schedule reflects the estimated fair value of assets acquired and liabilities assumed on the RDI Purchase Date ( in thousands Purchase Price Balance Sheet Caption Allocation Total current assets $ 53 Fixed assets 11 Identified intangible assets: Technology 3,400 Non-compete agreements 1,300 Goodwill 2,675 Total assets 7,439 Accrued expenses (39 ) Fair value of deferred and contingent consideration – current (1) (2,100 ) Fair value of deferred and contingent consideration – non-current (2) (2,800 ) Cash paid at closing $ 2,500 (1) Included in accrued expenses on the Consolidated Balance Sheet at December 31, 2019. There was no change in the fair value from the RDI Purchase Date to December 31, 2019. (2) Included in other non-current liabilities on the Consolidated Balance Sheet at December 31, 2019. There was no change in the fair value from the RDI Purchase Date to December 31, 2019. The Company accounted for the RDI Acquisition using the purchase method of accounting. Accordingly, the assets and liabilities were recorded at their fair values at the RDI Purchase Date. The excess of the purchase price over the fair value of the tangible and intangible assets acquired, liabilities assumed, and deferred and contingent consideration, was recorded as goodwill. During the three months ended December 31, 2019, the Company incurred less than $0.1 million of acquisition-related expenses in connection with the RDI acquisition, which were expensed to selling, general, and administrative expense. |
Concentration Risks
Concentration Risks | 3 Months Ended |
Dec. 31, 2019 | |
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 During the three months ended December 31, 2019, ALJ generated 10.2% of consolidated net revenue from one customer. During the three months ended December 31, 2018, ALJ did not have any customers with net revenue in excess of 10% of consolidated net revenue. Each of ALJ’s segments had customers that represent more than 10% of their respective net revenue, as described below. Faneuil Three Months Ended December 31, 2019 2018 Customer A 15.7 % 16.2 % Customer B 11.6 13.0 Accounts receivables from these customers totaled $8.2 million on December 31, 2019. As of December 31, 2019, 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. Carpets Three Months Ended December 31, 2019 2018 Customer A 26.8 % 29.3 % Customer B 23.6 27.4 Customer C 16.0 19.4 Accounts receivables from these customers totaled $1.5 million on December 31, 2019. As of December 31, 2019, all Carpets 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. Phoenix Three Months Ended December 31, 2019 2018 Customer A 24.9 % 19.0 % Customer B 16.6 17.8 Customer C 12.1 12.3 Customer D ** 12.2 ** Less than 10% of Phoenix net revenue. Accounts receivables from these customers totaled $6.1 million on December 31, 2019. As of December 31, 2019, all Phoenix 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 most customers. Supplier Risk Two of ALJ’s segments had suppliers that represented more than 10% of their respective inventory purchases, as described below. Carpets Three Months Ended December 31, 2019 2018 Supplier A 19.7 % 13.8 % Supplier B 17.0 24.3 Supplier C ** 11.4 Supplier D ** 10.7 ** Less than 10% of Carpets inventory purchases. If these suppliers were unable to provide materials on a timely basis, Carpets management believes alternative suppliers could provide the required materials with minimal disruption to the business. Phoenix Three Months Ended December 31, 2019 2018 Supplier A (1) 17.5 % ** Supplier B (2) 16.5 26.2 % Supplier C 10.9 10.9 ** Less than 10% of Phoenix inventory purchases. (1) (2) If these suppliers were unable to provide materials on a timely basis, Phoenix management believes alternative suppliers could provide the required supplies with minimal disruption to the business. |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 3 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Composition of Certain Financial Statement Captions | 6. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS Accounts Receivable, Net The following table summarizes accounts receivable at the end of each reporting period: December 31, September 30, (in thousands) 2019 2019 Accounts receivable $ 49,711 $ 41,251 Unbilled receivables 521 582 Accounts receivable 50,232 41,833 Less: allowance for doubtful accounts (126 ) (126 ) Accounts receivable, net $ 50,106 $ 41,707 Inventories, Net The following table summarizes inventories at the end of each reporting period: December 31, September 30, (in thousands) 2019 2019 Raw materials $ 3,956 $ 3,837 Semi-finished goods/work in process 1,641 2,111 Finished goods 1,771 1,230 Inventories 7,368 7,178 Less: allowance for obsolete inventory (504 ) (401 ) Inventories, net $ 6,864 $ 6,777 Property and Equipment The following table summarizes property and equipment at the end of each reporting period: December 31, September 30, (in thousands) 2019 2019 Leasehold improvements $ 31,478 $ 31,370 Machinery and equipment 30,915 30,805 Building and improvements 17,403 17,403 Software 15,094 16,139 Computer and office equipment 13,629 13,273 Land 9,267 9,267 Furniture and fixtures 7,822 7,796 Vehicles 386 386 Construction and equipment in process 128 206 Property and equipment 126,122 126,645 Less: accumulated depreciation and amortization (59,946 ) (56,775 ) Property and equipment, net $ 66,176 $ 69,870 Property and equipment depreciation and amortization expense, including amounts related to capitalized leased assets, Intangible Assets The following table summarizes identified intangible assets at the end of each reporting period: December 31, 2019 September 30, 2019 (in thousands) Gross Accumulated Amortization Net Gross Accumulated Amortization Net Customer relationships $ 33,660 $ (13,761 ) $ 19,899 $ 33,660 $ (13,039 ) $ 20,621 Trade names 10,760 (2,111 ) 8,649 10,760 (2,004 ) 8,756 Supply agreements 9,930 (3,330 ) 6,600 9,930 (3,002 ) 6,928 Technology 3,400 (177 ) 3,223 3,400 (71 ) 3,329 Non-compete agreements 1,820 (388 ) 1,432 1,820 (311 ) 1,509 Internal-use software 580 (580 ) — 580 (575 ) 5 Totals $ 60,150 $ (20,347 ) $ 39,803 $ 60,150 $ (19,002 ) $ 41,148 Intangible asset amortization expense was $1.3 million for both the three months ended December 31, 2019 and 2018. The following table presents expected future amortization expense for the remainder of fiscal 2020 and yearly thereafter: (in thousands) Estimated Future Amortization Remainder of Fiscal 2020 $ 3,916 Fiscal 2021 4,982 Fiscal 2022 4,635 Fiscal 2023 4,635 Fiscal 2024 4,496 Thereafter 17,139 Total $ 39,803 Accrued Expenses The following table summarizes accrued expenses at the end of each reporting period: December 31, September 30, (in thousands) 2019 2019 Accrued compensation and related taxes $ 6,479 $ 8,041 Rebates payable 2,840 2,157 Acquisition contingent consideration 2,100 2,100 Deferred lease incentives 1,159 1,159 Medical and benefit-related payables 959 964 Interest payable 764 723 Other 760 342 Accrued board of director fees 218 109 Deferred rent 100 112 Call center buildouts 96 274 Sales tax payable 88 111 Total accrued expenses $ 15,563 $ 16,092 Workers’ Compensation Reserve The Company is self-insured for certain workers’ compensation claims as discussed below. Faneuil Carpets Phoenix. |
(Loss) Earnings Per Share
(Loss) Earnings Per Share | 3 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings Per Share | 7. (LOSS) EARNINGS PER SHARE The following table summarizes basic and diluted (loss) earnings per share of common stock for each period presented: Three Months Ended December 31, ( in thousands, except per share amounts 2019 2018 Net (loss) income $ (4,277 ) $ 711 Weighted average shares of common stock outstanding – basic 42,173 38,047 Potentially dilutive effect of options to purchase common stock — 50 Weighted average shares of common stock outstanding – diluted 42,173 38,097 Basic (loss) earnings per share of common stock $ (0.10 ) $ 0.02 Diluted (loss) earnings per share of common stock $ (0.10 ) $ 0.02 ALJ computed basic (loss) earnings per share of common stock using net (loss) income divided by the weighted average number of shares of common stock outstanding during the period. ALJ computed diluted (loss) earnings per share of common stock using net (loss) income divided by the weighted average number of shares of common stock outstanding plus potentially dilutive shares of common stock outstanding during the period. Potentially dilutive shares issuable upon exercise of options to purchase common stock were determined by applying the treasury stock method to the assumed exercise of outstanding stock options. Stock options and warrants to purchase 4.2 million and 1.5 million shares of common stock were not considered in calculating ALJ’s diluted loss per common share for the three months ended December 31, 2019 and 2018, respectively, as their effect would be anti-dilutive. |
Debt
Debt | 3 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 8. DEBT Debt The following table summarizes ALJ’s line of credit, term loan, and equipment financing at the end of each reporting period: December 31, September 30, (in thousands) 2019 2019 Line of credit: Line of credit $ 20,313 $ 9,823 Less: deferred loan costs (651 ) (451 ) Line of credit, net of deferred loan costs $ 19,662 $ 9,372 Current portion of term loans: Current portion of term loan $ 8,200 $ 8,200 Current portion of equipment financing 1,311 1,336 Less: deferred loan costs (405 ) (417 ) Current portion of term loans, net of deferred loan costs $ 9,106 $ 9,119 Term loans, less current portion: Term loan, less current portion $ 65,836 $ 72,882 Term B loan and related payment in kind interest 4,106 $ — Equipment financing, less current portion 1,521 1,765 Less: deferred loan costs (936 ) (1,033 ) Term loans, less current portion, net of deferred loan costs $ 70,527 $ 73,614 Term Loan and Line of Credit In August 2015, ALJ entered into a financing agreement (“Financing Agreement”) with Cerberus Business Finance, LLC (“Cerberus”), to borrow $105.0 million in a term loan (“Cerberus Term Loan”) and have available up to $32.5 million in a revolving loan (“Cerberus/PNC Revolver,” and together with the Cerberus Term Loan, the “Cerberus Debt”). ALJ has subsequently entered into six amendments to the Financing Agreement. The most recent amendment is described below. The Cerberus Debt matures on November 28, 2023 (“Maturity Date”). Sixth Amendment to Financing Agreement On December 17, 2019, ALJ entered into the Sixth Amendment (“Sixth Amendment”) to the Financing Agreement. The Sixth Amendment amends certain terms and covenants in order to support the continued growth of the Company, as summarized below: • a conversion of $4.1 million in aggregate principal amount from the Cerberus Term Loan to a new term loan (referred to hereafter as “Term B” loan) as discussed in more detail below; • an adjustment to the leverage ratio threshold to (i) 5.25:1.00 for the fiscal quarter ending December 31, 2019, (ii) 4.50:1.00 for the fiscal quarter ending March 31, 2020, (iii) 3.75:1.00 for the fiscal quarter ending June 30, 2020, (iv) 3.50:1:00 for each fiscal quarter beginning with the fiscal quarter ending September 30, 2020 through the fiscal quarter ending December 31, 2020, and (v) 3.25:1:00 for each fiscal quarter beginning with the fiscal quarter ending March 31, 2021 through the fiscal quarter ending June 30, 2021, (vi) 3.00:1.00 for the fiscal quarter ending September 30, 2021, (vii) 3.25:1.00 for the fiscal quarter ending December 31, 2021, and (viii) 3.00:1.00 for each fiscal quarter beginning with the fiscal quarter ending March 31, 2022 and for each fiscal quarter thereafter; • a decrease in fixed charge coverage ratio threshold from (a) 1.05:1.00 to (i) 0.85:1.00 for the fiscal quarters ending December 31, 2019 and March 31, 2020, (ii) 0.95:1.00 for the fiscal quarter ending June 30, 2020 and (iii) 1.00:1.00 for the fiscal quarter ending in September 30, 2020 and (b) from 1.10:1.00 to 1.05:1.00 for each fiscal quarter beginning with the fiscal quarter ending December 31, 2020 and for each fiscal quarter thereafter; and • an increase of the interest rate floor for LIBOR rate loans from 1.0% to 1.50% per annum and an increase of the interest rate floor for Prime rate loans from 3.25% to 4.75% per annum. Junior Participation Agreement – Term B Loan In connection with the Sixth Amendment, certain trusts and other entities formed for the benefit of, or otherwise affiliated with, Jess Ravich, the Company’s Chief Executive Officer and Chairman of the Board (the “Ravich Entities”), entered into a Junior Participation Agreement with Cerberus (the “Junior Participation Agreement”), pursuant to which the Ravich Entities agreed to purchase $4.1 million in junior participation interests in the Term B loan under the Financing Agreement (the “Junior Participation” and such interests, the “Junior Participation Interests”). The Junior Participation Interests are junior and subordinate to the Cerberus Term Loan in all respects, have no quarterly payments, and accrue interest under the financing agreement (i) in cash, accrued at the same rate per annum as the Cerberus Term Loan and paid monthly, and (ii) in kind, accrued at 4.00% per annum, payable on the Maturity Date. In addition, on December 17, 2019 (the “Issuance Date”), in consideration of the Ravich Entities agreeing to enter into the Junior Participation, the Company agreed to issue the Ravich Entities fully vested warrants to purchase 1.23 million shares of the Company’s common stock (the “Warrants”), with a five-year term and an exercise price equal to the lesser of the 30 day trailing average closing price of the Company’s common stock as traded on the NASDAQ Stock Market on (i) the Issuance Date, or (ii) the six month anniversary of the Issuance Date. The 30 day trailing average closing price of the Company’s common stock on the Issuance Date was $1.20. The fair value of the warrants was calculated using the Black Scholes Model with the following assumptions: contractual life of five years, volatility of 42.3%, dividend yield of 0.00%, and annual risk-free interest rate of 1.7%. The total fair value of the warrants, $0.6 million, was expensed to selling, general, and administrative expense during the three months ended December 31, 2019. The Financing Agreement and amendments thereto are summarized below ( in thousands Description Use of Proceeds Origination Date Interest Rate * Quarterly Payments Balance at December 31, 2019 Term Loan: Financing Agreement Phoenix acquisition August 2015 8.46% to 8.80% $ 1,610 $ 58,139 First Amendment Color Optics acquisition July 2016 8.46% to 8.80% 175 6,333 Third Amendment Printing Components Business acquisition October 2017 8.46% to 8.80% 151 5,434 Fourth Amendment Working capital November 2018 8.46% to 8.80% 114 4,130 Sixth Amendment (Term B loan) N/A December 2019 12.46% to 12.80% — 4,106 Totals $ 2,050 $ 78,142 Line of Credit: Cerberus/PNC Revolver (includes Second and Fifth Amendments) Working capital August 2015 10.50% to 10.75% $ — $ 20,313 * Range of annual interest rates accrued during the three months ended December 31, 2019. Interest payments are due in arrears on the first day of each month. Quarterly principal payments are due on the last day of each fiscal quarter. Annual principal payments equal to 75% of ALJ’s excess cash flow (“ECF”), as defined in the Financing Agreement, are due annually each December, upon delivery of the annual audited financial statements. The annual ECF calculation, based on results of operations for the year ended September 30, 2019, did not require ALJ to make an annual ECF payment in December 2019. During December 2018, ALJ made an ECF payment of $0.3 million. In certain instances, ALJ is required to make mandatory term loan payments if ALJ receives cash outside the normal course of business. As a result, during the three months ended December 31, 2019 and 2018, ALJ made mandatory payments of $0.9 million and $0.4 million, respectively. As of December 31, 2019, ALJ will be assessed a prepayment penalty equal to 2% and 1% of the outstanding Cerberus Debt plus any unused available credit on the PNC Revolver if the Cerberus Term Loan is repaid before November 28, 2020 and November 28, 2021, respectively. ALJ may make payments of up to $7.0 million against the loan with no penalty. A final balloon payment is due on the Maturity Date. The Cerberus Debt is secured by substantially all the Company’s assets and imposes certain limitations on the Company, including its ability to incur debt, grant liens, initiate certain investments, declare dividends and dispose of assets. The Cerberus Debt also requires ALJ to comply with certain debt covenants. As of December 31, 2019, ALJ was in compliance with all debt covenants and had unused borrowing capacity of $8.9 million. Backstop Letter Agreement In November 2018, in connection with the Fourth Amendment to the Financing Agreement (“Fourth Amendment”), the Company entered into a Backstop Letter Agreement with Jess Ravich. Pursuant to the Backstop Letter Agreement, Mr. Ravich agreed to provide a “backstop” that enabled the Company to satisfy an alternative financing requirement as required by the Fourth Amendment. Mr. Ravich agreed that, if the Company is unable to locate alternative financing on terms, conditions and timing reasonably acceptable to it, and if required by Cerberus, he would satisfy the alternative financing requirement. In consideration of Mr. Ravich entering into such backstop arrangement, the Company’s Audit Committee and independent directors reviewed, approved and agreed to a backstop fee package, pursuant to which the Company would (i) pay to Mr. Ravich’s trust a one-time backstop fee of $0.1 million, and (ii) if the purchase of such subordinated debt is required by Cerberus and the Company has failed to secure a financing alternative more advantageous to the Company, issue to Mr. Ravich’s trust a five-year warrant (the “Warrant”) to purchase 1.5 million shares of ALJ common stock at an exercise price equal to the average closing price of the Company’s common stock as reported on The Nasdaq Stock Market for the 30 trading days preceding the warrant issuance date. As of December 31, 2019, Cerberus had not required ALJ to satisfy the alternative financing requirement. Loan Amendment Fees ALJ has accounted for all amendments as debt modifications pursuant to ASC 470, Debt During the three months ended December 31, 2018, ALJ paid legal and other fees totaling $0.6 million, of which $0.4 million were added to deferred loan costs and are being amortized to interest expense through the maturity date. The remaining $0.2 million were expensed to selling, general, and administrative expense. Contingent Loan Costs Pursuant to the Financing Agreement, ALJ is required to pay a fee (a “Contingent Payment”) in each of three consecutive annual periods which began on May 27, 2018, if at any time during each annual period there are any amounts outstanding on the Cerberus/PNC Revolver. Such Contingent Payments become due and payable on the first day within each annual period there is an outstanding balance on the Cerberus/PNC Revolver. ALJ made the first Contingent Payment during May 2018. ALJ made the second Contingent Payment during May 2019. Both Contingent Payments were added to deferred loan costs and amortized to interest expense for one year following the respective Contingent Payment. As of December 31, 2019, one Contingent Payment remained outstanding. In February 2020, ALJ entered into the seventh amendment to the Financing Agreement. See Note 14. Equipment Financing In December 2018, Phoenix purchased a Heidelberg Press for $4.1 million pursuant to an equipment financing agreement (the “Equipment Financing”). The Equipment Financing term is 36 months, requires monthly principal and interest payments, accrues interest at 4.94% per year, and is secured by the Heidelberg Press. Estimated Future Minimum Principal Payments Estimated future minimum principal payments for the Cerberus Debt and Equipment Financing are as follows ( in thousands Year Ending December 31, Equipment Financing Cerberus Debt Total 2020 $ 1,311 $ 8,200 $ 9,511 2021 1,400 8,200 9,600 2022 121 8,200 8,321 2023 — 8,200 8,200 2024* — 65,649 65,649 Total $ 2,832 $ 98,449 $ 101,281 * The majority of this amount is the final balloon payment due on the maturity date, December 1, 2023. Capital Lease Obligations Faneuil and Phoenix lease equipment under non-cancelable capital leases. As of December 31, 2019, future minimum payments under non-cancelable capital leases with initial or remaining terms of one year or more are as follows ( in thousands Year Ending December 31, Estimated Future Payments 2020 $ 2,337 2021 1,058 2022 703 2023 498 2024 71 Total minimum required payments 4,667 Less: current portion of capital lease obligations (2,173 ) Less: imputed interest (310 ) Capital lease obligations, less current portion $ 2,184 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases real estate, equipment, and vehicles under non-cancellable operating leases. As of December 31, 2019, future minimum rental commitments, net of sublease income, under non-cancellable leases were as follows ( in thousands Year Ending December 31, Future Minimum Lease Payments 2020 $ 8,245 2021 7,230 2022 6,426 2023 6,399 2024 6,699 Thereafter 27,582 Total $ 62,581 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 the Chief Executive Officer. The agreements also provide for involuntary termination payments, which includes base salary, performance bonus, medical premiums, stock options, non-competition provisions, and other terms and conditions of employment. As of December 31, 2019, contingent termination payments related to base salary and medical premiums totaled $1.3 million. Surety Bonds As part of Faneuil’s normal course of operations, certain customers require surety bonds guaranteeing the performance of a contract. As of December 31, 2019, the face value of such surety bonds, which represents the maximum cash payments that Faneuil’s surety would be obligated to pay under certain circumstances of non-performance, was $30.0 million. To date, Faneuil has not made any non-performance payments to any of its sureties. Letters of Credit The Company had letters of credit totaling $2.7 million outstanding as of December 31, 2019. Litigation, Claims, and Assessments Faneuil, Inc. v. 3M Company On September 22, 2016, Faneuil filed a complaint against 3M Company (“3M”) in the Circuit Court for the City of Richmond, Virginia (the “Richmond Circuit Court”). The dispute arose out of a subcontract entered into between 3M and Faneuil in relation to a toll road project in Portsmouth, Virginia. In its complaint, Faneuil sought recovery of $5.1 million based on three causes of action: breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. On October 14, 2016, 3M filed its answer and counterclaim against Faneuil. In its counterclaim, 3M sought recovery in excess of $10.0 million based on three claims: breach of contract/indemnification, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. 3M’s counterclaim alleged it incurred approximately $3.2 million in damages as a result of Faneuil’s conduct and sought indemnification of an additional $10.0 million in damages incurred as a result of continued performance. The matter was tried in a bench trial from April 30, 2018 through May 2, 2018. On May 15, 2018, the Richmond Circuit Court issued its opinion, which dismissed both Faneuil’s complaint and 3M’s counterclaim with prejudice. No monetary damages were awarded to either Faneuil or 3M. As a result of the Richmond Circuit Court’s opinion, ALJ recorded a non-cash litigation loss of $2.9 million (the outstanding unreserved receivable from 3M), which was included in selling, general, and administrative expense during the year ended September 30, 2018. The matter was appealed to the Supreme Court of Virginia where Faneuil was awarded approximately $1.2 million, plus pre- and post-judgment interest. The matter was remanded to the trial court for calculation of interest and entry of final judgment. Faneuil and 3M settled on the amount of interest to be paid. The final judgment plus interest, which totaled $1.5 million, was received and recorded by Faneuil in December 2019. Of the total $1.5 million, $1.3 million was booked as a reduction to selling, general, and administrative expense, and $0.2 million was booked to interest from legal settlement on the statement of operations during the three months ended December 31, 2019. Marshall v. Faneuil, Inc. 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. The parties are currently engaged in limited discovery. A court-ordered mediation is scheduled between the parties for May 2020. Faneuil believes this action is without merit and intends to defend this case vigorously. The Company has not accrued any amounts related to the Marshall claim as of December 31, 2019. Other Litigation The Company has including the matters described above) usiness, consolidated financial position, results of operations or cash flows. Environmental Matters The operations of Phoenix are subject to various laws and related regulations governing environmental matters. Under such laws, an owner or lessee of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances located on or in, or emanating from, such property, as well as investigation of property damage. Phoenix incurs ongoing expenses associated with the performance of appropriate monitoring and remediation at certain of its locations. |
Equity
Equity | 3 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Equity | 10. EQUITY Common Stock Activity during the Three Months ended December 31, 2019 ALJ did not have any common stock activity during the three months ended December 31, 2019. Common Stock Activity during the Three Months ended December 31, 2018 During the three months ended December 31, 2018, ALJ retired 84,000 shares of common stock, which were received by ALJ as part of a settlement agreement related to Faneuil’s acquisition of certain customer management outsourcing business assets and liabilities (the “CMO Business”) in May 2017. In connection with the settlement, ALJ recognized a $0.1 million gain during the three months ended December 31, 2018, which was included with loss (gain) on disposal of assets and other gain, net on the statement of operations. Equity Incentive Plans ALJ’s equity incentive plans are broad-based, long-term programs intended to attract and retain talented employees and align stockholder and employee interests. Stock-Based Compensation. The following table sets forth the total stock-based compensation expense included in selling, general, and administrative expense on the statement of operations: Three Months Ended December 31, (in thousands) 2019 2018 Stock options $ 84 $ 84 Common stock awards 28 101 Total stock-based compensation expense $ 112 $ 185 At December 31, 2019, ALJ had approximately $0.2 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 one year. Stock Option Awards 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) was less than $0.1 million at December 31, 2019. Common Stock Awards 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 and Common Stock Options and Warrants Outstanding at December 31, 2019 As of December 31, 2019, ALJ had 1.7 million stock options with a weighted average exercise price of $3.39 outstanding, and warrants exercisable to purchase 2.5 million shares of common stock with a weighted average exercise price of $1.51 outstanding. |
Income Tax
Income Tax | 3 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 11. INCOME TAX ALJ’s effective tax rate for the three months ended December 31, 2019 is (1.0%), which is due to current state income tax, offset by changes to the valuation allowance recorded against net deferred tax assets. ALJ’s effective tax rate for the three months ended December 31, 2018 was 29.0%, which was due to current state income tax. The decrease in the effective tax rate was attributable to a decrease in forecasted taxable income, as well as a decrease to the valuation allowance recorded against net deferred tax assets. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 12. RELATED-PARTY TRANSACTIONS Harland Clarke Holdings Corp. (“Harland Clarke”), a stockholder who owns ALJ shares in excess of five percent, had a contract with Faneuil to provide call center services for Harland Clarke’s banking-related products. The contract completed in March 2019. Faneuil did not recognize revenue or cost of revenue subsequent to such completion date. Faneuil recognized revenue from Harland Clarke totaling $0.1 million for the three months ended December 31, 2018. The associated cost of revenue was $0.1 million for the three months ended December 31, 2018. All revenue from Harland Clarke contained similar terms and conditions as those found in other transactions of this nature entered into by Faneuil. Harland Clarke did not owe Faneuil any amounts at December 31, 2019 and owed Faneuil less than $0.1 million at December 31, 2018. |
Reportable Segments and Geograp
Reportable Segments and Geographic Information | 3 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Reportable Segments and Geographic Information | 13. REPORTABLE SEGMENTS AND GEOGRAPHIC INFORMATION Reportable Segments As discussed in Note 1, ALJ has organized its business along three reportable segments (Faneuil, Carpets, and Phoenix), together with a corporate group for certain support services. ALJ’s operating segments are aligned on the basis of products, services, and industry. The Chief Operating Decision Maker (“CODM”) is ALJ’s Chief Executive Officer. The CODM manages the business, allocates resources to, and assesses the performance of each operating segment using information about its net revenue and segment adjusted EBITDA. ALJ defines segment adjusted EBITDA as segment net income (loss) before depreciation and amortization, interest expense, litigation loss, recovery of litigation loss, restructuring and cost reduction initiatives, lease payments in anticipation of facility shutdown, loan amendment expenses, stock-based compensation, acquisition-related expenses, (loss) gain on disposal of assets and other gain, net, provision for income taxes, and other non-recurring items. Such amounts are detailed in our segment reconciliation below. The accounting policies for segment reporting are the same as for ALJ as a whole. The following tables present ALJ’s segment information for the three months ended December 31, 2019 and 2018: Three Months Ended December 31, 2019 ( in thousands Faneuil Carpets Phoenix ALJ Total Net revenue $ 58,567 $ 9,774 $ 22,124 $ — $ 90,465 Segment adjusted EBITDA $ 1,653 $ (78 ) $ 2,840 $ (1,055 ) $ 3,360 Depreciation and amortization (5,242 ) Interest expense (2,564 ) Loan amendment expenses (769 ) Restructuring and cost reduction initiatives (277 ) Stock-based compensation (112 ) Acquisition-related expenses (49 ) Provision for income taxes (40 ) Lease payments in anticipation of facility shutdown (38 ) (Loss) gain on disposal of assets and other gain, net (2 ) Interest from legal settlement 200 Recovery of litigation loss 1,256 Net loss $ (4,277 ) Three Months Ended December 31, 2018 ( in thousands Faneuil Carpets Phoenix ALJ Total Net revenue $ 55,202 $ 12,362 $ 26,220 $ — $ 93,784 Segment adjusted EBITDA $ 4,946 $ 160 $ 4,221 $ (721 ) $ 8,606 Depreciation and amortization (4,446 ) Interest expense (2,715 ) Provision for income taxes (288 ) Loan amendment expenses (201 ) Lease payments in anticipation of facility shutdown (186 ) Stock-based compensation (185 ) Restructuring and cost reduction initiatives (85 ) Acquisition-related expenses (12 ) Gain (loss) on disposal of assets and other gain, net 223 Net income $ 711 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 Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. SUBSEQUENT EVENTS Seventh Amendment to Financing Agreement On February 13, 2020, ALJ entered into the Seventh Amendment (“Seventh Amendment”) to the Financing Agreement. See Note 8. The Seventh Amendment amends certain terms and covenants in order to support the continued growth of the Company, as summarized below: • An extension of the seasonal increase period in 2020 during which the available amount under the Cerberus/PNC Revolver is $32.5 million from February 14, 2020 to March 15, 2020; and • An increase in the available amount under the Cerberus/PNC Revolver from March 16, 2020 to March 31, 2020 from $25.0 million to $30.0 million. Amendment 7 does not impact Maturity Date, quarterly payments, or interest rates. Additionally, Amendment 7 does not impact the presentation and related disclosure of the Cerberus Term Loan at December 31, 2019. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 3 Months Ended |
Dec. 31, 2019 | |
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. As of December 31, 2019, ALJ consisted of the following wholly owned subsidiaries: • Faneuil, Inc. (including its subsidiaries, “Faneuil”). • Floors-N-More, LLC, d/b/a, Carpets N’ More (“Carpets”) • Phoenix Color Corp. (including its subsidiaries, “Phoenix”). ALJ has organized its business and corporate structure along the following business segments: Faneuil, Carpets, and Phoenix. |
Basis of Presentation | Basis of Presentation The interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Condensed Consolidated Financial Statements and footnotes thereto are unaudited. In the opinion of the Company’s management, the Condensed Consolidated Financial Statements reflect all adjustments, which are of a normal recurring nature, that are necessary for a fair presentation of the Company’s interim financial results. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the assets, liabilities, revenue and expenses that are reported in the Condensed Consolidated Financial Statements and footnotes thereto. Actual results may differ from those estimates. 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 the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019, filed with the SEC on December 23, 2019. Revision of Previously Reported Financial Information The Company has historically classified expenses incurred by the Faneuil reportable segment as either cost of revenue or selling, general, and administrative expense based on whether such expenses represented salaries and wages or an expense other than salary and wages. Faneuil is a labor intensive business with labor representing the majority of the cost of revenue. Management determined that certain costs classified as cost of revenue should be classified as selling, general, and administrative expense, while other costs classified as selling, general, and administrative expense should be classified as cost of revenue. Accordingly, the accompanying Condensed Consolidated Statement of Operations for the three months ended December 31, 2018 has been revised to correct the amounts previously reported as cost of revenue and selling, general, and administrative expense as applicable. In accordance with Accounting Standards Codification ASC 250 (Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin 99, Assessing Materiality The following tables presents the impact of Faneuil’s reclassification on the Condensed Consolidated Statement of Operations for the three months ended December 31, 2018 and the year ended September 30, 2019: Three Months Ended December 31, 2018 ( in thousands, except per share amounts As Previously Reported Revisions As Revised Net revenue $ 93,784 $ — $ 93,784 Costs and expenses: Cost of revenue 72,827 1,819 74,646 Selling, general, and administrative expense 17,466 (1,819 ) 15,647 (Gain) loss on disposal of assets and other gain, net (223 ) — (223 ) Total operating expenses 90,070 — 90,070 Operating income 3,714 — 3,714 Other (expense) income: Interest expense, net (2,715 ) — (2,715 ) Total other expense (2,715 ) — (2,715 ) Income before income taxes 999 999 Provision for income taxes (288 ) — (288 ) Net income $ 711 $ — $ 711 Basic earnings per share of common stock $ 0.02 $ — $ 0.02 Diluted earnings per share of common stock $ 0.02 $ — $ 0.02 Basic 38,047 — 38,047 Diluted 38,097 — 38,097 Year Ended September 30, 2019 ( in thousands, except per share amounts As Previously Reported Revisions As Revised Net revenue $ 354,997 $ — $ 354,997 Costs and expenses: Cost of revenue 277,454 6,422 283,876 Selling, general, and administrative expense 72,375 (6,422 ) 65,953 Impairment of intangible assets 746 — 746 (Gain) loss on disposal of assets and other gain, net (216 ) — (216 ) Total operating expenses 350,359 — 350,359 Operating income 4,638 — 4,638 Other (expense) income: Interest expense, net (10,611 ) — (10,611 ) Total other expense, net (10,611 ) — (10,611 ) Loss before income taxes (5,973 ) — (5,973 ) Provision for income taxes (10,006 ) — (10,006 ) Net loss $ (15,979 ) $ — $ (15,979 ) Loss per share of common stock–basic and diluted $ (0.41 ) $ — $ (0.41 ) Weighted-average shares of common stock outstanding– basic and diluted 38,710 — 38,710 The correction of these previously reported amounts had no impact on the Company’s consolidated income (loss) before income taxes, net income (loss), financial position, or cash flows. In addition, corresponding revisions had no impact to Reportable Segments or Geographic disclosures. |
Organization and Basis of Pre_3
Organization and Basis of Presentation (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Impact of Faneuil's Reclassification on the Condensed Consolidated Statement of Operations | The following tables presents the impact of Faneuil’s reclassification on the Condensed Consolidated Statement of Operations for the three months ended December 31, 2018 and the year ended September 30, 2019: Three Months Ended December 31, 2018 ( in thousands, except per share amounts As Previously Reported Revisions As Revised Net revenue $ 93,784 $ — $ 93,784 Costs and expenses: Cost of revenue 72,827 1,819 74,646 Selling, general, and administrative expense 17,466 (1,819 ) 15,647 (Gain) loss on disposal of assets and other gain, net (223 ) — (223 ) Total operating expenses 90,070 — 90,070 Operating income 3,714 — 3,714 Other (expense) income: Interest expense, net (2,715 ) — (2,715 ) Total other expense (2,715 ) — (2,715 ) Income before income taxes 999 999 Provision for income taxes (288 ) — (288 ) Net income $ 711 $ — $ 711 Basic earnings per share of common stock $ 0.02 $ — $ 0.02 Diluted earnings per share of common stock $ 0.02 $ — $ 0.02 Basic 38,047 — 38,047 Diluted 38,097 — 38,097 Year Ended September 30, 2019 ( in thousands, except per share amounts As Previously Reported Revisions As Revised Net revenue $ 354,997 $ — $ 354,997 Costs and expenses: Cost of revenue 277,454 6,422 283,876 Selling, general, and administrative expense 72,375 (6,422 ) 65,953 Impairment of intangible assets 746 — 746 (Gain) loss on disposal of assets and other gain, net (216 ) — (216 ) Total operating expenses 350,359 — 350,359 Operating income 4,638 — 4,638 Other (expense) income: Interest expense, net (10,611 ) — (10,611 ) Total other expense, net (10,611 ) — (10,611 ) Loss before income taxes (5,973 ) — (5,973 ) Provision for income taxes (10,006 ) — (10,006 ) Net loss $ (15,979 ) $ — $ (15,979 ) Loss per share of common stock–basic and diluted $ (0.41 ) $ — $ (0.41 ) Weighted-average shares of common stock outstanding– basic and diluted 38,710 — 38,710 |
Recent Accounting Standards (Ta
Recent Accounting Standards (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Accounting Changes And Error Corrections [Abstract] | |
Effect of Changes due to Accounting Pronouncement | Based upon the balances that existed as of September 30, 2019, the Company recorded adjustments to the following accounts as of October 1, 2019: Adjustments for the Adoption of ASC 606 ( in thousands As Reported September 30, 2019 Faneuil Carpets Phoenix Total Adjustment Adjusted October 1, 2019 Assets Prepaid expenses and other current assets $ 5,515 $ 777 $ (61 ) $ 161 $ 877 $ 6,392 Inventories, net 6,777 — 19 (217 ) (198 ) 6,579 Liabilities Accrued expenses 16,092 — (12 ) (2 ) (14 ) 16,078 Deferred revenue and customer deposits 1,965 172 — — 172 2,137 Stockholders’ equity Accumulated deficit (204,407 ) 605 (30 ) (54 ) 521 (203,886 ) |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles on Financial Statements | The following table summarize the impacts of adopting the new revenue accounting guidance on ALJ’s Consolidated Balance Sheet as of December 31, 2019: As of December 31, 2019 Adjustments for the Adoption of ASC 606 ( in thousands As Reported Faneuil Carpets Phoenix Total Adjustment As if Previous Standard was in Effect Assets Prepaid expenses and other current assets $ 10,356 $ (1,207 ) $ (8 ) $ (669 ) $ (1,884 ) $ 8,472 Inventories, net 6,864 — 6 528 534 7,398 Liabilities Accrued expenses 15,563 (10 ) 7 2 (1 ) 15,562 Deferred revenue and customer deposits 5,505 (541 ) — — (541 ) 4,964 Stockholders’ equity Accumulated deficit (208,163 ) (656 ) (9 ) (143 ) (808 ) (208,971 ) The following table summarize the impacts of adopting the new revenue accounting guidance on ALJ’s Statement of Operation for the three months ended December 31, 2019: Three Months Ended December 31, 2019 Adjustments for the Adoption of ASC 606 ( in thousands, except per share amounts As Reported Faneuil Carpets Phoenix Total Adjustment As if Previous Standard was in Effect Net revenue $ 90,465 $ (354 ) $ 53 $ (834 ) $ (1,135 ) $ 89,330 Cost of revenue 75,726 907 32 (745 ) 194 75,920 Net loss (4,277 ) (1,261 ) 21 (89 ) (1,329 ) (5,606 ) Loss per share of common stock–basic and diluted (0.10 ) (0.03 ) 0.00 (0.00 ) (0.03 ) (0.13 ) |
Revenue recognition (Tables)
Revenue recognition (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition [Abstract] | |
Contract with Customer Asset and Liabilities | The following table provides information about consolidated contract assets and contract liabilities at December 31, 2019 and October 1, 2019: ( in thousands December 31, 2019 October 1, 2019 Contract assets: Unbilled revenue (1) $ 2,255 $ 825 Total contract assets $ 2,255 $ 825 Contract liabilities Deferred revenue $ 5,238 $ 1,838 Accrued rebates and material rights (2) 3,281 2,612 Accrued contract losses (3) 12 15 Total contract liabilities $ 8,531 $ 4,465 (1) Included in prepaid expenses and other current assets on the Consolidated Balance Sheet. Unbilled revenue represent 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. (2) Of the total balance, $0.4 million is included in other non-current liabilities and $2.9 million is included in accrued expenses on the Consolidated Balance Sheet. (3) Included in accrued expenses on the Consolidated Balance Sheet. The following table provides changes in consolidated contract assets and contract liabilities during the three months ended December 31, 2019: ( in thousands Contract Assets Contract Liabilities Balance, beginning of period (October 1, 2019) $ 825 $ 4,465 Additions to unbilled revenue, net 1,430 — Revenue recognized — (1,956 ) Change in loss accrual — (3 ) Accrued rebates — 669 Cash received from customer — 5,356 Balance, end of period $ 2,255 $ 8,531 |
Disaggregation of Revenue | Revenue by contract type was as follows for the three months ended December 31, 2019: ( in thousands Three Months Ended December 31, 2019 Faneuil: Transportation $ 17,128 Utility 13,927 Healthcare 25,367 Government 1,049 Other 1,096 Total Faneuil $ 58,567 Carpets Builder $ 6,959 Commercial 1,628 Retail 1,187 Total Carpets $ 9,774 Phoenix: Publisher MSA $ 12,430 Non-MSA 6,560 Commercial MSA 805 Non-MSA 2,329 Total Phoenix $ 22,124 Total consolidated revenue, net $ 90,465 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed on Business Purchase Date and Purchase Price Details | The following schedule reflects the estimated fair value of assets acquired and liabilities assumed on the RDI Purchase Date ( in thousands Purchase Price Balance Sheet Caption Allocation Total current assets $ 53 Fixed assets 11 Identified intangible assets: Technology 3,400 Non-compete agreements 1,300 Goodwill 2,675 Total assets 7,439 Accrued expenses (39 ) Fair value of deferred and contingent consideration – current (1) (2,100 ) Fair value of deferred and contingent consideration – non-current (2) (2,800 ) Cash paid at closing $ 2,500 (1) Included in accrued expenses on the Consolidated Balance Sheet at December 31, 2019. There was no change in the fair value from the RDI Purchase Date to December 31, 2019. (2) Included in other non-current liabilities on the Consolidated Balance Sheet at December 31, 2019. There was no change in the fair value from the RDI Purchase Date to December 31, 2019. |
Concentration Risks (Tables)
Concentration Risks (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Sales Revenue, Segment [Member] | Faneuil [Member] | |
Schedule of Concentration Percentage of Different Customers | Faneuil Three Months Ended December 31, 2019 2018 Customer A 15.7 % 16.2 % Customer B 11.6 13.0 |
Sales Revenue, Segment [Member] | Carpets [Member] | |
Schedule of Concentration Percentage of Different Customers | Carpets Three Months Ended December 31, 2019 2018 Customer A 26.8 % 29.3 % Customer B 23.6 27.4 Customer C 16.0 19.4 |
Sales Revenue, Segment [Member] | Phoenix [Member] | |
Schedule of Concentration Percentage of Different Customers | Phoenix Three Months Ended December 31, 2019 2018 Customer A 24.9 % 19.0 % Customer B 16.6 17.8 Customer C 12.1 12.3 Customer D ** 12.2 ** Less than 10% of Phoenix net revenue. |
Inventory Purchases [Member] | Carpets [Member] | |
Schedule of Concentration Percentage of Different Customers | Carpets Three Months Ended December 31, 2019 2018 Supplier A 19.7 % 13.8 % Supplier B 17.0 24.3 Supplier C ** 11.4 Supplier D ** 10.7 ** Less than 10% of Carpets inventory purchases. |
Inventory Purchases [Member] | Phoenix [Member] | |
Schedule of Concentration Percentage of Different Customers | Phoenix Three Months Ended December 31, 2019 2018 Supplier A (1) 17.5 % ** Supplier B (2) 16.5 26.2 % Supplier C 10.9 10.9 ** Less than 10% of Phoenix inventory purchases. (1) (2) |
Composition of Certain Financ_2
Composition of Certain Financial Statement Captions (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Accounts Receivable | The following table summarizes accounts receivable at the end of each reporting period: December 31, September 30, (in thousands) 2019 2019 Accounts receivable $ 49,711 $ 41,251 Unbilled receivables 521 582 Accounts receivable 50,232 41,833 Less: allowance for doubtful accounts (126 ) (126 ) Accounts receivable, net $ 50,106 $ 41,707 |
Summary of Inventories | The following table summarizes inventories at the end of each reporting period: December 31, September 30, (in thousands) 2019 2019 Raw materials $ 3,956 $ 3,837 Semi-finished goods/work in process 1,641 2,111 Finished goods 1,771 1,230 Inventories 7,368 7,178 Less: allowance for obsolete inventory (504 ) (401 ) Inventories, net $ 6,864 $ 6,777 |
Summary of Property and Equipment | The following table summarizes property and equipment at the end of each reporting period: December 31, September 30, (in thousands) 2019 2019 Leasehold improvements $ 31,478 $ 31,370 Machinery and equipment 30,915 30,805 Building and improvements 17,403 17,403 Software 15,094 16,139 Computer and office equipment 13,629 13,273 Land 9,267 9,267 Furniture and fixtures 7,822 7,796 Vehicles 386 386 Construction and equipment in process 128 206 Property and equipment 126,122 126,645 Less: accumulated depreciation and amortization (59,946 ) (56,775 ) Property and equipment, net $ 66,176 $ 69,870 |
Summary of Intangible Assets | The following table summarizes identified intangible assets at the end of each reporting period: December 31, 2019 September 30, 2019 (in thousands) Gross Accumulated Amortization Net Gross Accumulated Amortization Net Customer relationships $ 33,660 $ (13,761 ) $ 19,899 $ 33,660 $ (13,039 ) $ 20,621 Trade names 10,760 (2,111 ) 8,649 10,760 (2,004 ) 8,756 Supply agreements 9,930 (3,330 ) 6,600 9,930 (3,002 ) 6,928 Technology 3,400 (177 ) 3,223 3,400 (71 ) 3,329 Non-compete agreements 1,820 (388 ) 1,432 1,820 (311 ) 1,509 Internal-use software 580 (580 ) — 580 (575 ) 5 Totals $ 60,150 $ (20,347 ) $ 39,803 $ 60,150 $ (19,002 ) $ 41,148 |
Summary of Expected Future Amortization Expense | The following table presents expected future amortization expense for the remainder of fiscal 2020 and yearly thereafter: (in thousands) Estimated Future Amortization Remainder of Fiscal 2020 $ 3,916 Fiscal 2021 4,982 Fiscal 2022 4,635 Fiscal 2023 4,635 Fiscal 2024 4,496 Thereafter 17,139 Total $ 39,803 |
Summary of Accrued Expenses | The following table summarizes accrued expenses at the end of each reporting period: December 31, September 30, (in thousands) 2019 2019 Accrued compensation and related taxes $ 6,479 $ 8,041 Rebates payable 2,840 2,157 Acquisition contingent consideration 2,100 2,100 Deferred lease incentives 1,159 1,159 Medical and benefit-related payables 959 964 Interest payable 764 723 Other 760 342 Accrued board of director fees 218 109 Deferred rent 100 112 Call center buildouts 96 274 Sales tax payable 88 111 Total accrued expenses $ 15,563 $ 16,092 |
(Loss) Earnings Per Share (Tabl
(Loss) Earnings Per Share (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Loss Per Share of Common Stock | The following table summarizes basic and diluted (loss) earnings per share of common stock for each period presented: Three Months Ended December 31, ( in thousands, except per share amounts 2019 2018 Net (loss) income $ (4,277 ) $ 711 Weighted average shares of common stock outstanding – basic 42,173 38,047 Potentially dilutive effect of options to purchase common stock — 50 Weighted average shares of common stock outstanding – diluted 42,173 38,097 Basic (loss) earnings per share of common stock $ (0.10 ) $ 0.02 Diluted (loss) earnings per share of common stock $ (0.10 ) $ 0.02 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Line of Credit, Term Loan and Equipment Financing | The following table summarizes ALJ’s line of credit, term loan, and equipment financing at the end of each reporting period: December 31, September 30, (in thousands) 2019 2019 Line of credit: Line of credit $ 20,313 $ 9,823 Less: deferred loan costs (651 ) (451 ) Line of credit, net of deferred loan costs $ 19,662 $ 9,372 Current portion of term loans: Current portion of term loan $ 8,200 $ 8,200 Current portion of equipment financing 1,311 1,336 Less: deferred loan costs (405 ) (417 ) Current portion of term loans, net of deferred loan costs $ 9,106 $ 9,119 Term loans, less current portion: Term loan, less current portion $ 65,836 $ 72,882 Term B loan and related payment in kind interest 4,106 $ — Equipment financing, less current portion 1,521 1,765 Less: deferred loan costs (936 ) (1,033 ) Term loans, less current portion, net of deferred loan costs $ 70,527 $ 73,614 |
Summary of Financing Agreement and Amendments | The Financing Agreement and amendments thereto are summarized below ( in thousands Description Use of Proceeds Origination Date Interest Rate * Quarterly Payments Balance at December 31, 2019 Term Loan: Financing Agreement Phoenix acquisition August 2015 8.46% to 8.80% $ 1,610 $ 58,139 First Amendment Color Optics acquisition July 2016 8.46% to 8.80% 175 6,333 Third Amendment Printing Components Business acquisition October 2017 8.46% to 8.80% 151 5,434 Fourth Amendment Working capital November 2018 8.46% to 8.80% 114 4,130 Sixth Amendment (Term B loan) N/A December 2019 12.46% to 12.80% — 4,106 Totals $ 2,050 $ 78,142 Line of Credit: Cerberus/PNC Revolver (includes Second and Fifth Amendments) Working capital August 2015 10.50% to 10.75% $ — $ 20,313 * Range of annual interest rates accrued during the three months ended December 31, 2019. |
Schedule of Estimated Future Minimum Payments under Debt | Estimated Future Minimum Principal Payments Estimated future minimum principal payments for the Cerberus Debt and Equipment Financing are as follows ( in thousands Year Ending December 31, Equipment Financing Cerberus Debt Total 2020 $ 1,311 $ 8,200 $ 9,511 2021 1,400 8,200 9,600 2022 121 8,200 8,321 2023 — 8,200 8,200 2024* — 65,649 65,649 Total $ 2,832 $ 98,449 $ 101,281 * The majority of this amount is the final balloon payment due on the maturity date, December 1, 2023. |
Schedule of Future Minimum Lease Payments under Non-Cancelable Capital Leases | As of December 31, 2019, future minimum payments under non-cancelable capital leases with initial or remaining terms of one year or more are as follows ( in thousands Year Ending December 31, Estimated Future Payments 2020 $ 2,337 2021 1,058 2022 703 2023 498 2024 71 Total minimum required payments 4,667 Less: current portion of capital lease obligations (2,173 ) Less: imputed interest (310 ) Capital lease obligations, less current portion $ 2,184 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Commitments under Noncancellable Leases | As of December 31, 2019, future minimum rental commitments, net of sublease income, under non-cancellable leases were as follows ( in thousands Year Ending December 31, Future Minimum Lease Payments 2020 $ 8,245 2021 7,230 2022 6,426 2023 6,399 2024 6,699 Thereafter 27,582 Total $ 62,581 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
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 statement of operations: Three Months Ended December 31, (in thousands) 2019 2018 Stock options $ 84 $ 84 Common stock awards 28 101 Total stock-based compensation expense $ 112 $ 185 |
Reportable Segments and Geogr_2
Reportable Segments and Geographic Information (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The following tables present ALJ’s segment information for the three months ended December 31, 2019 and 2018: Three Months Ended December 31, 2019 ( in thousands Faneuil Carpets Phoenix ALJ Total Net revenue $ 58,567 $ 9,774 $ 22,124 $ — $ 90,465 Segment adjusted EBITDA $ 1,653 $ (78 ) $ 2,840 $ (1,055 ) $ 3,360 Depreciation and amortization (5,242 ) Interest expense (2,564 ) Loan amendment expenses (769 ) Restructuring and cost reduction initiatives (277 ) Stock-based compensation (112 ) Acquisition-related expenses (49 ) Provision for income taxes (40 ) Lease payments in anticipation of facility shutdown (38 ) (Loss) gain on disposal of assets and other gain, net (2 ) Interest from legal settlement 200 Recovery of litigation loss 1,256 Net loss $ (4,277 ) Three Months Ended December 31, 2018 ( in thousands Faneuil Carpets Phoenix ALJ Total Net revenue $ 55,202 $ 12,362 $ 26,220 $ — $ 93,784 Segment adjusted EBITDA $ 4,946 $ 160 $ 4,221 $ (721 ) $ 8,606 Depreciation and amortization (4,446 ) Interest expense (2,715 ) Provision for income taxes (288 ) Loan amendment expenses (201 ) Lease payments in anticipation of facility shutdown (186 ) Stock-based compensation (185 ) Restructuring and cost reduction initiatives (85 ) Acquisition-related expenses (12 ) Gain (loss) on disposal of assets and other gain, net 223 Net income $ 711 |
Organization and Basis of Pre_4
Organization and Basis of Presentation - Impact of Faneuil's Reclassification on the Condensed Consolidated Statement of Operations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Net revenue | $ 90,465 | $ 93,784 | $ 354,997 |
Costs and expenses: | |||
Cost of revenue | 75,726 | 74,646 | 283,876 |
Selling, general, and administrative expense | 16,610 | 15,647 | 65,953 |
Impairment of intangible assets | 746 | ||
Loss (gain) on disposal of assets and other gain, net | 2 | (223) | (216) |
Total operating expenses | 92,338 | 90,070 | 350,359 |
Operating (loss) income | (1,873) | 3,714 | 4,638 |
Other (expense) income: | |||
Interest expense, net | (2,564) | (2,715) | (10,611) |
Total other expense, net | (2,364) | (2,715) | (10,611) |
(Loss) income before income taxes | (4,237) | 999 | (5,973) |
Provision for income taxes | (40) | (288) | (10,006) |
Net (loss) income | $ (4,277) | $ 711 | $ (15,979) |
Basic (loss) earnings per share of common stock | $ (0.10) | $ 0.02 | |
Diluted (loss) earnings per share of common stock | $ (0.10) | $ 0.02 | |
Basic | 42,173 | 38,047 | |
Diluted | 42,173 | 38,097 | |
Loss per share of common stock–basic and diluted | $ (0.10) | $ (0.41) | |
Weighted-average shares of common stock outstanding– basic and diluted | 38,710 | ||
As Previously Reported [Member] | |||
Net revenue | $ 93,784 | $ 354,997 | |
Costs and expenses: | |||
Cost of revenue | 72,827 | 277,454 | |
Selling, general, and administrative expense | 17,466 | 72,375 | |
Impairment of intangible assets | 746 | ||
Loss (gain) on disposal of assets and other gain, net | (223) | (216) | |
Total operating expenses | 90,070 | 350,359 | |
Operating (loss) income | 3,714 | 4,638 | |
Other (expense) income: | |||
Interest expense, net | (2,715) | (10,611) | |
Total other expense, net | (2,715) | (10,611) | |
(Loss) income before income taxes | 999 | (5,973) | |
Provision for income taxes | (288) | (10,006) | |
Net (loss) income | $ 711 | $ (15,979) | |
Basic (loss) earnings per share of common stock | $ 0.02 | ||
Diluted (loss) earnings per share of common stock | $ 0.02 | ||
Basic | 38,047 | ||
Diluted | 38,097 | ||
Loss per share of common stock–basic and diluted | $ (0.41) | ||
Weighted-average shares of common stock outstanding– basic and diluted | 38,710 | ||
Revisions [Member] | |||
Costs and expenses: | |||
Cost of revenue | $ 1,819 | $ 6,422 | |
Selling, general, and administrative expense | $ (1,819) | $ (6,422) |
Recent Accounting Standards - E
Recent Accounting Standards - Effect of Changes due to Accounting Pronouncement (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Oct. 01, 2019 | Sep. 30, 2019 |
ASSETS | |||
Prepaid expenses and other current assets | $ 10,356 | $ 6,392 | $ 5,515 |
Inventories, net | 6,864 | 6,579 | 6,777 |
Current liabilities: | |||
Accrued expenses | 15,563 | 16,078 | 16,092 |
Deferred revenue and customer deposits | 5,505 | 2,137 | 1,965 |
Stockholders’ equity: | |||
Accumulated deficit | (208,163) | (203,886) | (204,407) |
As Previously Reported [Member] | |||
ASSETS | |||
Prepaid expenses and other current assets | 5,515 | ||
Inventories, net | 6,777 | ||
Current liabilities: | |||
Accrued expenses | 16,092 | ||
Deferred revenue and customer deposits | 1,965 | ||
Stockholders’ equity: | |||
Accumulated deficit | $ (204,407) | ||
ASC 606 [Member] | Revisions [Member] | |||
ASSETS | |||
Prepaid expenses and other current assets | (1,884) | 877 | |
Inventories, net | 534 | (198) | |
Current liabilities: | |||
Accrued expenses | (1) | (14) | |
Deferred revenue and customer deposits | (541) | 172 | |
Stockholders’ equity: | |||
Accumulated deficit | (808) | 521 | |
ASC 606 [Member] | Revisions [Member] | Faneuil Inc. [Member] | |||
ASSETS | |||
Prepaid expenses and other current assets | (1,207) | 777 | |
Current liabilities: | |||
Accrued expenses | (10) | ||
Deferred revenue and customer deposits | (541) | 172 | |
Stockholders’ equity: | |||
Accumulated deficit | (656) | 605 | |
ASC 606 [Member] | Revisions [Member] | Carpets Inc [Member] | |||
ASSETS | |||
Prepaid expenses and other current assets | (8) | (61) | |
Inventories, net | 6 | 19 | |
Current liabilities: | |||
Accrued expenses | 7 | (12) | |
Stockholders’ equity: | |||
Accumulated deficit | (9) | (30) | |
ASC 606 [Member] | Revisions [Member] | Phoenix Inc [Member] | |||
ASSETS | |||
Prepaid expenses and other current assets | (669) | 161 | |
Inventories, net | 528 | (217) | |
Current liabilities: | |||
Accrued expenses | 2 | (2) | |
Stockholders’ equity: | |||
Accumulated deficit | $ (143) | $ (54) |
Recent Accounting Standards - A
Recent Accounting Standards - Additional Information (Detail) - ASC 606 [Member] $ in Millions | Oct. 01, 2019USD ($) |
Increase in total assets | $ 0.7 |
Increase in total liabilities | 0.2 |
Increase in total stockholder's equity | $ 0.5 |
Recent Accounting Standards - S
Recent Accounting Standards - Schedule of New Accounting Pronouncements and Changes in Accounting Principles on Financial Statements - Consoldidated Balance Sheet (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Oct. 01, 2019 | Sep. 30, 2019 |
ASSETS | |||
Prepaid expenses and other current assets | $ 10,356 | $ 6,392 | $ 5,515 |
Inventories, net | 6,864 | 6,579 | 6,777 |
Current liabilities: | |||
Accrued expenses | 15,563 | 16,078 | 16,092 |
Deferred revenue and customer deposits | 5,505 | 2,137 | 1,965 |
Stockholders’ equity: | |||
Accumulated deficit | (208,163) | (203,886) | $ (204,407) |
As if Previous Standard was in Effect [Member] | |||
ASSETS | |||
Prepaid expenses and other current assets | 8,472 | ||
Inventories, net | 7,398 | ||
Current liabilities: | |||
Accrued expenses | 15,562 | ||
Deferred revenue and customer deposits | 4,964 | ||
Stockholders’ equity: | |||
Accumulated deficit | (208,971) | ||
ASC 606 [Member] | Revisions [Member] | |||
ASSETS | |||
Prepaid expenses and other current assets | (1,884) | 877 | |
Inventories, net | 534 | (198) | |
Current liabilities: | |||
Accrued expenses | (1) | (14) | |
Deferred revenue and customer deposits | (541) | 172 | |
Stockholders’ equity: | |||
Accumulated deficit | (808) | 521 | |
ASC 606 [Member] | Revisions [Member] | Faneuil Inc. [Member] | |||
ASSETS | |||
Prepaid expenses and other current assets | (1,207) | 777 | |
Current liabilities: | |||
Accrued expenses | (10) | ||
Deferred revenue and customer deposits | (541) | 172 | |
Stockholders’ equity: | |||
Accumulated deficit | (656) | 605 | |
ASC 606 [Member] | Revisions [Member] | Carpets Inc [Member] | |||
ASSETS | |||
Prepaid expenses and other current assets | (8) | (61) | |
Inventories, net | 6 | 19 | |
Current liabilities: | |||
Accrued expenses | 7 | (12) | |
Stockholders’ equity: | |||
Accumulated deficit | (9) | (30) | |
ASC 606 [Member] | Revisions [Member] | Phoenix Inc [Member] | |||
ASSETS | |||
Prepaid expenses and other current assets | (669) | 161 | |
Inventories, net | 528 | (217) | |
Current liabilities: | |||
Accrued expenses | 2 | (2) | |
Stockholders’ equity: | |||
Accumulated deficit | $ (143) | $ (54) |
Recent Accounting Standards -_2
Recent Accounting Standards - Schedule of New Accounting Pronouncements and Changes in Accounting Principles on Financial Statements - Statement of Operation (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Net revenue | $ 90,465 | $ 93,784 | $ 354,997 |
Cost of revenue | 75,726 | 74,646 | 283,876 |
Net (loss) income | $ (4,277) | 711 | $ (15,979) |
Loss per share of common stock–basic and diluted | $ (0.10) | $ (0.41) | |
As if Previous Standard was in Effect [Member] | |||
Net revenue | $ 89,330 | ||
Cost of revenue | 75,920 | ||
Net (loss) income | $ (5,606) | ||
Loss per share of common stock–basic and diluted | $ (0.13) | ||
Revisions [Member] | |||
Cost of revenue | $ 1,819 | $ 6,422 | |
ASC 606 [Member] | |||
Net revenue | $ (1,135) | ||
Cost of revenue | 194 | ||
Net (loss) income | $ (1,329) | ||
Loss per share of common stock–basic and diluted | $ (0.03) | ||
ASC 606 [Member] | Revisions [Member] | Faneuil Inc. [Member] | |||
Net revenue | $ (354) | ||
Cost of revenue | 907 | ||
Net (loss) income | $ (1,261) | ||
Loss per share of common stock–basic and diluted | $ (0.03) | ||
ASC 606 [Member] | Revisions [Member] | Carpets Inc [Member] | |||
Net revenue | $ 53 | ||
Cost of revenue | 32 | ||
Net (loss) income | $ 21 | ||
Loss per share of common stock–basic and diluted | $ 0 | ||
ASC 606 [Member] | Revisions [Member] | Phoenix Inc [Member] | |||
Net revenue | $ (834) | ||
Cost of revenue | (745) | ||
Net (loss) income | $ (89) | ||
Loss per share of common stock–basic and diluted | $ 0 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Oct. 01, 2019 | |
Contract assets: | |||
Unbilled revenue | [1] | $ 2,255 | $ 825 |
Total contract assets | 2,255 | 825 | |
Contract liabilities | |||
Deferred revenue | 5,238 | 1,838 | |
Accrued rebates and material rights | [2] | 3,281 | 2,612 |
Accrued contract losses | [3] | 12 | 15 |
Total contract liabilities | $ 8,531 | $ 4,465 | |
[1] | Included in prepaid expenses and other current assets on the Consolidated Balance Sheet. Unbilled revenue represent 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. | ||
[2] | Of the total balance, $0.4 million is included in other non-current liabilities and $2.9 million is included in accrued expenses on the Consolidated Balance Sheet | ||
[3] | Included in accrued expenses on the Consolidated Balance Sheet. |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Contract Assets and Contract Liabilities (Parenthetical) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2019 |
Contract with Customer, Liability, Noncurrent | $ 8,531 | $ 4,465 |
Other Non-current Liabilities [Member] | ||
Contract with Customer, Liability, Noncurrent | 400 | |
Accrued Expenses [Member] | ||
Contract with Customer, Liability, Noncurrent | $ 2,900 |
Revenue Recognition - Summary_3
Revenue Recognition - Summary of Change in Contract Assets and Contract Liabilities (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2019USD ($) | |
Revenue Recognition And Deferred Revenue [Abstract] | |
Beginning balance | $ 825 |
Additions to unbilled revenue, net | 1,430 |
Ending balance | 2,255 |
Beginning balance | 4,465 |
Revenue recognized | (1,956) |
Change in loss accrual | (3) |
Accrued rebates | 669 |
Cash received from customer | 5,356 |
Ending balance | $ 8,531 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Disaggregation Of Revenue [Line Items] | |||
Net revenue | $ 90,465 | $ 93,784 | $ 354,997 |
Publisher in Phoenix [Member] | Master Service Agreement [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 12,430 | ||
Publisher in Phoenix [Member] | Non-MSA [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 6,560 | ||
Commercial in Phoenix [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 22,124 | ||
Commercial in Phoenix [Member] | Master Service Agreement [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 805 | ||
Commercial in Phoenix [Member] | Non-MSA [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 2,329 | ||
Carpets [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 9,774 | ||
Carpets [Member] | Builders [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 6,959 | ||
Carpets [Member] | Commercial [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 1,628 | ||
Carpets [Member] | Retail [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 1,187 | ||
Faneuil [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 58,567 | ||
Faneuil [Member] | Transportion [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 17,128 | ||
Faneuil [Member] | Utility [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 13,927 | ||
Faneuil [Member] | Health Care [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 25,367 | ||
Faneuil [Member] | Government [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | 1,049 | ||
Faneuil [Member] | Other [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Transportation | $ 1,096 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Capitalized Contract Cost, Amortization | $ 100 | |
Amortization of deferred loan costs | 173 | $ 238 |
Transition Activities | 2,100 | |
Impairment Loss | 0 | |
Selling, General and Administrative Expense [Member] | ||
Amortization of deferred loan costs | 600 | |
Prepaid Expenses [Member] | ||
Amortization of deferred loan costs | 300 | |
Other Assets [Member] | ||
Amortization of deferred loan costs | 300 | |
Transition Activities | 400 | |
Transition Activities [Member] | ||
Transition Activities | 1,500 | |
Prepaid Expenses and Other Current Assets [Member] | ||
Transition Activities | $ 1,700 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Purchase-related legal and accounting fees | $ 49 | $ 12 | |
RDI Acquistion [Member] | |||
Business Acquisition [Line Items] | |||
Cash consideration paid on acquisition | $ 2,500 | ||
Contingent earn out consideration | $ 7,500 | ||
Contingent earn-out consideration payment period | 3 years | ||
Contingent guaranteed payout consideration | $ 2,500 | ||
RDI Acquistion [Member] | Selling, General and Administrative Expense [Member] | |||
Business Acquisition [Line Items] | |||
Purchase-related legal and accounting fees | $ 100 |
Acquisitions - Summary of Estim
Acquisitions - Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed on Business Purchase Date and Purchase Price Details (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Dec. 31, 2019 | Sep. 30, 2019 |
Identified intangible assets: | |||
Goodwill | $ 59,047 | $ 59,047 | |
RDI Acquistion [Member] | |||
Balance Sheet Caption | |||
Total current assets | $ 53 | ||
Fixed assets | 11 | ||
Identified intangible assets: | |||
Goodwill | 2,675 | ||
Total assets | 7,439 | ||
Accrued expenses | (39) | ||
Fair value of deferred and contingent consideration – current | (2,100) | ||
Fair value of deferred and contingent consideration – non-current | (2,800) | ||
Cash paid at closing | 2,500 | ||
RDI Acquistion [Member] | Technology [Member] | |||
Identified intangible assets: | |||
Identified intangible assets | 3,400 | ||
RDI Acquistion [Member] | Non-compete Agreements [Member] | |||
Identified intangible assets: | |||
Identified intangible assets | $ 1,300 |
Concentration Risks - Additiona
Concentration Risks - Additional Information (Detail) $ in Millions | 3 Months Ended | |
Dec. 31, 2019USD ($)CustomerSegment | Dec. 31, 2018Customer | |
Faneuil [Member] | ||
Concentration Risk [Line Items] | ||
Accounts receivable | $ 8.2 | |
Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Accounts receivable | 1.5 | |
Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Accounts receivable | $ 6.1 | |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.20% | |
Number of customers that represent more than 10% of consolidated net revenue | Customer | 1 | 0 |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Minimum [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% | |
Supplier Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Number of segments representing more than 10% supplier contribution | Segment | 2 | |
Supplier Concentration Risk [Member] | Sales Revenue, Net [Member] | Maximum [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% | |
Supplier Concentration Risk [Member] | Inventory Purchases [Member] | Minimum [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% | |
Supplier Concentration Risk [Member] | Inventory Purchases [Member] | Maximum [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% |
Concentration Risks - Major Cus
Concentration Risks - Major Customers and Accounts Receivable - Schedule of Concentration Percentage of Different Customers (Detail) - Sales Revenue, Segment [Member] - Customer Concentration Risk [Member] | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Customer A [Member] | Faneuil [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 15.70% | 16.20% |
Customer A [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 26.80% | 29.30% |
Customer A [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 24.90% | 19.00% |
Customer B [Member] | Faneuil [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.60% | 13.00% |
Customer B [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 23.60% | 27.40% |
Customer B [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 16.60% | 17.80% |
Customer C [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 16.00% | 19.40% |
Customer C [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 12.10% | 12.30% |
Customer D [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 12.20% |
Concentration Risks - Major C_2
Concentration Risks - Major Customers and Accounts Receivable - Schedule of Concentration Percentage of Different Customers (Parenthetical) (Detail) | 3 Months Ended |
Dec. 31, 2019 | |
Maximum [Member] | Sales Revenue, Segment [Member] | Customer Concentration Risk [Member] | Phoenix [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Concentration Risks - Supplier
Concentration Risks - Supplier Risk - Schedule of Concentration Percentage of Different Customers (Detail) - Supplier Concentration Risk [Member] - Inventory Purchases [Member] | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Supplier A [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 19.70% | 13.80% |
Supplier A [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 17.50% | |
Supplier B [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 17.00% | 24.30% |
Supplier B [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 16.50% | 26.20% |
Supplier C [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.40% | |
Supplier C [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.90% | 10.90% |
Supplier D [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.70% |
Concentration Risks - Supplie_2
Concentration Risks - Supplier Risk - Schedule of Concentration Percentage of Different Customers (Parenthetical) (Detail) - Supplier Concentration Risk [Member] | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Inventory Purchases [Member] | Carpets [Member] | Supplier B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 17.00% | 24.30% |
Inventory Purchases [Member] | Carpets [Member] | Supplier C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.40% | |
Inventory Purchases [Member] | Phoenix [Member] | Supplier B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 16.50% | 26.20% |
Inventory Purchases [Member] | Phoenix [Member] | Supplier C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.90% | 10.90% |
Consolidated Inventory Purchases | Phoenix [Member] | Supplier B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.60% | |
Consolidated Inventory Purchases | Phoenix [Member] | Supplier C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.00% | 17.50% |
Maximum [Member] | Sales Revenue, Net [Member] | Carpets [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% | |
Maximum [Member] | Inventory Purchases [Member] | Phoenix [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% | |
Minimum [Member] | Inventory Purchases [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% |
Composition of Certain Financ_3
Composition of Certain Financial Statement Captions - Summary of Accounts Receivable (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2019 |
Accounts Receivable Net Current [Abstract] | ||
Accounts receivable | $ 49,711 | $ 41,251 |
Unbilled receivables | 521 | 582 |
Accounts receivable | 50,232 | 41,833 |
Less: allowance for doubtful accounts | (126) | (126) |
Accounts receivable, net | $ 50,106 | $ 41,707 |
Composition of Certain Financ_4
Composition of Certain Financial Statement Captions - Summary of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Oct. 01, 2019 | Sep. 30, 2019 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 3,956 | $ 3,837 | |
Semi-finished goods/work in process | 1,641 | 2,111 | |
Finished goods | 1,771 | 1,230 | |
Inventories | 7,368 | 7,178 | |
Less: allowance for obsolete inventory | (504) | (401) | |
Inventories, net | $ 6,864 | $ 6,579 | $ 6,777 |
Composition of Certain Financ_5
Composition of Certain Financial Statement Captions - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 126,122 | $ 126,645 |
Less: accumulated depreciation and amortization | (59,946) | (56,775) |
Property and equipment, net | 66,176 | 69,870 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 31,478 | 31,370 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 30,915 | 30,805 |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 17,403 | 17,403 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,094 | 16,139 |
Computer and Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 13,629 | 13,273 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,267 | 9,267 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,822 | 7,796 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 386 | 386 |
Construction and Equipment In Process [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 128 | $ 206 |
Composition of Certain Financ_6
Composition of Certain Financial Statement Captions - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Financial Statements, Captions [Line Items] | ||
Depreciation and amortization expense including capital leased assets | $ 3,900,000 | $ 3,100,000 |
Intangible asset amortization expense | 1,300,000 | $ 1,300,000 |
Faneuil [Member] | Workers' Compensation Claims [Member] | Maximum [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Self-insured amount | 500,000 | |
Carpets [Member] | Workers' Compensation Claims [Member] | Maximum [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Self-insured amount | $ 200,000 |
Composition of Certain Financ_7
Composition of Certain Financial Statement Captions - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 60,150 | $ 60,150 |
Accumulated Amortization | (20,347) | (19,002) |
Net | 39,803 | 41,148 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 33,660 | 33,660 |
Accumulated Amortization | (13,761) | (13,039) |
Net | 19,899 | 20,621 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 10,760 | 10,760 |
Accumulated Amortization | (2,111) | (2,004) |
Net | 8,649 | 8,756 |
Supply Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 9,930 | 9,930 |
Accumulated Amortization | (3,330) | (3,002) |
Net | 6,600 | 6,928 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 3,400 | 3,400 |
Accumulated Amortization | (177) | (71) |
Net | 3,223 | 3,329 |
Non-compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 1,820 | 1,820 |
Accumulated Amortization | (388) | (311) |
Net | 1,432 | 1,509 |
Internal-use Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 580 | 580 |
Accumulated Amortization | $ (580) | (575) |
Net | $ 5 |
Composition of Certain Financ_8
Composition of Certain Financial Statement Captions - Summary of Expected Future Amortization Expense (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2019 |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | ||
Remainder of Fiscal 2020 | $ 3,916 | |
Fiscal 2021 | 4,982 | |
Fiscal 2022 | 4,635 | |
Fiscal 2023 | 4,635 | |
Fiscal 2024 | 4,496 | |
Thereafter | 17,139 | |
Net | $ 39,803 | $ 41,148 |
Composition of Certain Financ_9
Composition of Certain Financial Statement Captions - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Oct. 01, 2019 | Sep. 30, 2019 |
Accrued Liabilities Current [Abstract] | |||
Accrued compensation and related taxes | $ 6,479 | $ 8,041 | |
Rebates payable | 2,840 | 2,157 | |
Acquisition contingent consideration | 2,100 | 2,100 | |
Deferred lease incentives | 1,159 | 1,159 | |
Medical and benefit-related payables | 959 | 964 | |
Interest payable | 764 | 723 | |
Other | 760 | 342 | |
Accrued board of director fees | 218 | 109 | |
Deferred rent | 100 | 112 | |
Call center buildouts | 96 | 274 | |
Sales tax payable | 88 | 111 | |
Total accrued expenses | $ 15,563 | $ 16,078 | $ 16,092 |
(Loss) Earnings Per Share - Sum
(Loss) Earnings Per Share - Summary of Basic and Diluted (Loss) Earnings Per Share of Common Stock (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net (loss) income | $ (4,277) | $ 711 |
Weighted average shares of common stock outstanding – basic | 42,173 | 38,047 |
Potentially dilutive effect of options to purchase common stock | 50 | |
Weighted average shares of common stock outstanding – diluted | 42,173 | 38,097 |
Basic (loss) earnings per share of common stock | $ (0.10) | $ 0.02 |
Diluted (loss) earnings per share of common stock | $ (0.10) | $ 0.02 |
(Loss) Earnings Per Share - Add
(Loss) Earnings Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Options and Warrants to Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Stock options and warrants to purchase shares of common stock excluded from computation of diluted earnings (loss) per share | 4.2 | 1.5 |
Debt - Summary of Line of Credi
Debt - Summary of Line of Credit, Term Loan and Equipment Financing (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2019 |
Line of credit: | ||
Line of credit | $ 20,313 | $ 9,823 |
Less: deferred loan costs | (651) | (451) |
Line of credit, net of deferred loan costs | 19,662 | 9,372 |
Current portion of term loans: | ||
Current portion of term loan | 8,200 | 8,200 |
Current portion of equipment financing | 1,311 | 1,336 |
Less: deferred loan costs | (405) | (417) |
Current portion of term loans, net of deferred loan costs | 9,106 | 9,119 |
Term loans, less current portion: | ||
Term loan, less current portion | 65,836 | 72,882 |
Equipment financing, less current portion | 1,521 | 1,765 |
Less: deferred loan costs | (936) | (1,033) |
Term loans, less current portion, net of deferred loan costs | 70,527 | $ 73,614 |
Term Loan B [Member] | ||
Term loans, less current portion: | ||
Term loan, less current portion | $ 4,106 |
Debt - Additional Information (
Debt - Additional Information (Detail) | Dec. 17, 2019USD ($)TradingDay$ / sharesshares | Dec. 31, 2018USD ($) | Nov. 30, 2018USD ($)TradingDayshares | Aug. 31, 2015USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($)Cost$ / shares | Dec. 31, 2018USD ($) | Sep. 30, 2019USD ($) | Mar. 16, 2020USD ($) | Mar. 15, 2020USD ($) |
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument maturity date | Dec. 1, 2023 | ||||||||||||||||
Debt Instrument, Description | Pursuant to the Financing Agreement, ALJ is required to pay a fee (a “Contingent Payment”) in each of three consecutive annual periods which began on May 27, 2018, if at any time during each annual period there are any amounts outstanding on the Cerberus/PNC Revolver. Such Contingent Payments become due and payable on the first day within each annual period there is an outstanding balance on the Cerberus/PNC Revolver. | ||||||||||||||||
Number of vested warrants issued, price per share | $ / shares | $ 3.39 | ||||||||||||||||
Expected term | 5 years | ||||||||||||||||
Expected volatility rate | 42.30% | ||||||||||||||||
Dividened rate | 0.00% | ||||||||||||||||
Risk-free interest rate | 1.70% | ||||||||||||||||
Fair value of warrants issued in connection with debt modification | $ 594,000 | ||||||||||||||||
Selling, general, and administrative expense | $ 16,610,000 | $ 15,647,000 | $ 65,953,000 | ||||||||||||||
Number of contingent payment outstanding | Cost | 1 | ||||||||||||||||
Financing Agreement [Member] | Minimum [Member] | LIBOR Rate [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest Rate | 1.00% | ||||||||||||||||
Financing Agreement [Member] | Minimum [Member] | Prime Rate [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest Rate | 3.25% | ||||||||||||||||
Financing Agreement [Member] | Maximum [Member] | LIBOR Rate [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest Rate | 1.50% | ||||||||||||||||
Financing Agreement [Member] | Maximum [Member] | Prime Rate [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest Rate | 4.75% | ||||||||||||||||
Equipment Financing [Member] | Phoenix [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Agreement term | 36 months | ||||||||||||||||
Frequency of periodic payment | monthly | ||||||||||||||||
Interest rate fixed percentage | 4.94% | 4.94% | |||||||||||||||
Equipment Financing [Member] | Phoenix [Member] | Heidelberg Press [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Payments to acquire equipment | $ 4,100,000 | ||||||||||||||||
Cerberus Term Loan [Member] | Term Loan [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument face amount | $ 105,000,000 | ||||||||||||||||
Debt instrument maturity date | Nov. 28, 2023 | ||||||||||||||||
Annual principal payments as percentage of excess cash flow | 75.00% | ||||||||||||||||
Excess cash flow payment | $ 0 | $ 300,000 | |||||||||||||||
Mandatory payment | 900,000 | 400,000 | |||||||||||||||
Maximum payments against loan with no penalty | 7,000,000 | ||||||||||||||||
Payment of debt instrument legal and other fees | 400,000 | 600,000 | |||||||||||||||
Deferred loan costs | $ 400,000 | 300,000 | 400,000 | ||||||||||||||
Selling, general, and administrative expense | $ 100,000 | $ 200,000 | |||||||||||||||
Cerberus Term Loan [Member] | Term Loan [Member] | Term Loan Repayment First Year Anniversary [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Prepayment penalty percentage | 2.00% | ||||||||||||||||
Term loan agreement date | Nov. 28, 2020 | ||||||||||||||||
Cerberus Term Loan [Member] | Term Loan [Member] | Term Loan Repayment Second Year Anniversary [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Prepayment penalty percentage | 1.00% | ||||||||||||||||
Term loan agreement date | Nov. 28, 2021 | ||||||||||||||||
Cerberus/PNC Revolver [Member] | Scenario Forecast [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Line of credit facility maximum borrowing capacity | $ 30,000,000 | $ 25,000,000 | $ 32,500,000 | ||||||||||||||
Sixth Amendment [Member] | Financing Agreement [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, covenant description | a conversion of $4.1 million in aggregate principal amount from the Cerberus Term Loan to a new term loan (referred to hereafter as “Term B” loan) as discussed in more detail below; an adjustment to the leverage ratio threshold to (i) 5.25:1.00 for the fiscal quarter ending December 31, 2019, (ii) 4.50:1.00 for the fiscal quarter ending March 31, 2020, (iii) 3.75:1.00 for the fiscal quarter ending June 30, 2020, (iv) 3.50:1:00 for each fiscal quarter beginning with the fiscal quarter ending September 30, 2020 through the fiscal quarter ending December 31, 2020, and (v) 3.25:1:00 for each fiscal quarter beginning with the fiscal quarter ending March 31, 2021 through the fiscal quarter ending June 30, 2021, (vi) 3.00:1.00 for the fiscal quarter ending September 30, 2021, (vii) 3.25:1.00 for the fiscal quarter ending December 31, 2021, and (viii) 3.00:1.00 for each fiscal quarter beginning with the fiscal quarter ending March 31, 2022 and for each fiscal quarter thereafter; a decrease in fixed charge coverage ratio threshold from (a) 1.05:1.00 to (i) 0.85:1.00 for the fiscal quarters ending December 31, 2019 and March 31, 2020, (ii) 0.95:1.00 for the fiscal quarter ending June 30, 2020 and (iii) 1.00:1.00 for the fiscal quarter ending in September 30, 2020 and (b) from 1.10:1.00 to 1.05:1.00 for each fiscal quarter beginning with the fiscal quarter ending December 31, 2020 and for each fiscal quarter thereafter; and an increase of the interest rate floor for LIBOR rate loans from 1.0% to 1.50% per annum and an increase of the interest rate floor for Prime rate loans from 3.25% to 4.75% per annum. | ||||||||||||||||
Leverage ratio | 5.25 | ||||||||||||||||
Sixth Amendment [Member] | Financing Agreement [Member] | Minimum [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Fixed charge coverage ratio | 0.85 | ||||||||||||||||
Sixth Amendment [Member] | Financing Agreement [Member] | Maximum [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Fixed charge coverage ratio | 1.05 | ||||||||||||||||
Sixth Amendment [Member] | Financing Agreement [Member] | Scenario Forecast [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Leverage ratio | 3.25 | 3 | 3.25 | 3.50 | 3.75 | 4.50 | |||||||||||
Debt instrument threshold leverage ratio and thereafter | 3 | ||||||||||||||||
Fixed charge coverage ratio | 1 | 0.95 | |||||||||||||||
Sixth Amendment [Member] | Financing Agreement [Member] | Scenario Forecast [Member] | Minimum [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Fixed charge coverage ratio | 1.05 | 0.85 | |||||||||||||||
Sixth Amendment [Member] | Financing Agreement [Member] | Scenario Forecast [Member] | Maximum [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Fixed charge coverage ratio | 1.10 | 1.05 | |||||||||||||||
Junior Participation Agreement [Member] | Term Loan B [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument face amount | $ 4,100,000 | ||||||||||||||||
Interest Rate | 4.00% | ||||||||||||||||
Debt Instrument, Description | (i) in cash, accrued at the same rate per annum as the Cerberus Term Loan and paid monthly, and (ii) in kind, accrued at 4.00% per annum, payable on the Maturity Date. | ||||||||||||||||
Number of vested warrants issued, shares | shares | 1,230,000 | ||||||||||||||||
Warrants expiration period | 5 years | ||||||||||||||||
Debt instrument, convertible threshold trading days | TradingDay | 30 | ||||||||||||||||
Number of vested warrants issued, price per share | $ / shares | $ 1.20 | ||||||||||||||||
Cerberus Debt [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Unused borrowing capacity | $ 8,900,000 | ||||||||||||||||
Revolving Credit Facility [Member] | Cerberus/PNC Revolver [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Line of credit facility maximum borrowing capacity | $ 32,500,000 | ||||||||||||||||
Backstop Letter Agreement [Member] | Fourth Amendment [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Warrants expiration period | 5 years | ||||||||||||||||
Debt instrument, convertible threshold trading days | TradingDay | 30 | ||||||||||||||||
One time backstop fee | $ 100,000 | ||||||||||||||||
Warrant to purchase common stock | shares | 1,500,000 |
Debt - Summary of Financing Agr
Debt - Summary of Financing Agreement and Amendments (Detail) $ in Thousands | 3 Months Ended |
Dec. 31, 2019USD ($) | |
Line of Credit [Member] | Cerberus/PNC Revolver [Member] | |
Debt Instrument [Line Items] | |
Use of Proceeds | Working capital |
Origination Date | 2015-08 |
Balance | $ 20,313 |
Minimum [Member] | Line of Credit [Member] | Cerberus/PNC Revolver [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 10.50% |
Maximum [Member] | Line of Credit [Member] | Cerberus/PNC Revolver [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 10.75% |
Term Loan [Member] | |
Debt Instrument [Line Items] | |
Quarterly Payments | $ 2,050 |
Balance | $ 78,142 |
Term Loan [Member] | Financing Agreement [Member] | Phoenix Acquisition [Member] | |
Debt Instrument [Line Items] | |
Origination Date | 2015-08 |
Quarterly Payments | $ 1,610 |
Balance | $ 58,139 |
Term Loan [Member] | Financing Agreement [Member] | Minimum [Member] | Phoenix Acquisition [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 8.46% |
Term Loan [Member] | Financing Agreement [Member] | Maximum [Member] | Phoenix Acquisition [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 8.80% |
Term Loan [Member] | First Amendment [Member] | Color Optics Acquisition [Member] | |
Debt Instrument [Line Items] | |
Origination Date | 2016-07 |
Quarterly Payments | $ 175 |
Balance | $ 6,333 |
Term Loan [Member] | First Amendment [Member] | Minimum [Member] | Color Optics Acquisition [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 8.46% |
Term Loan [Member] | First Amendment [Member] | Maximum [Member] | Color Optics Acquisition [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 8.80% |
Term Loan [Member] | Third Amendment [Member] | Printing Components Business Acquisition [Member] | |
Debt Instrument [Line Items] | |
Origination Date | 2017-10 |
Quarterly Payments | $ 151 |
Balance | $ 5,434 |
Term Loan [Member] | Third Amendment [Member] | Minimum [Member] | Printing Components Business Acquisition [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 8.46% |
Term Loan [Member] | Third Amendment [Member] | Maximum [Member] | Printing Components Business Acquisition [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 8.80% |
Term Loan [Member] | Fourth Amendment [Member] | |
Debt Instrument [Line Items] | |
Origination Date | 2018-11 |
Quarterly Payments | $ 114 |
Balance | $ 4,130 |
Term Loan [Member] | Fourth Amendment [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 8.46% |
Term Loan [Member] | Fourth Amendment [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 8.80% |
Term Loan [Member] | Sixth Amendment [Member] | |
Debt Instrument [Line Items] | |
Origination Date | 2019-12 |
Balance | $ 4,106 |
Term Loan [Member] | Sixth Amendment [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 12.46% |
Term Loan [Member] | Sixth Amendment [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Interest Rate | 12.80% |
Debt - Schedule of Estimated Fu
Debt - Schedule of Estimated Future Minimum Principal Payments for Cerberus Debt and Equipment Financing (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |
2020 | $ 9,511 |
2021 | 9,600 |
2022 | 8,321 |
2023 | 8,200 |
2024* | 65,649 |
Total estimated future minimum payments | 101,281 |
Cerberus Debt [Member] | |
Debt Instrument [Line Items] | |
2020 | 8,200 |
2021 | 8,200 |
2022 | 8,200 |
2023 | 8,200 |
2024* | 65,649 |
Total estimated future minimum payments | 98,449 |
Equipment Financing [Member] | |
Debt Instrument [Line Items] | |
2020 | 1,311 |
2021 | 1,400 |
2022 | 121 |
Total estimated future minimum payments | $ 2,832 |
Debt - Schedule of Estimated _2
Debt - Schedule of Estimated Future Minimum Principal Payments for Cerberus Debt and Equipment Financing (Parenthetical) (Detail) | 3 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt instrument maturity date | Dec. 1, 2023 |
Debt - Schedule of Future Minim
Debt - Schedule of Future Minimum Lease Payments under Non-Cancelable Capital Leases (Detail) - USD ($) | Dec. 31, 2019 | Sep. 30, 2019 |
Capital Leases Future Minimum Payments Due Rolling Maturity [Abstract] | ||
2020 | $ 2,337,000 | |
2021 | 1,058,000 | |
2022 | 703,000 | |
2023 | 498,000 | |
2024 | 71,000 | |
Total minimum required payments | 4,667,000 | |
Less: current portion of capital lease obligations | (2,173,000) | $ (2,535,000) |
Less: imputed interest | (310,000) | |
Capital lease obligations, less current portion | $ 2,184,000 | $ 2,623,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental Commitments under Noncancellable Leases (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Leases Future Minimum Payments Due Rolling Maturity [Abstract] | |
2020 | $ 8,245 |
2021 | 7,230 |
2022 | 6,426 |
2023 | 6,399 |
2024 | 6,699 |
Thereafter | 27,582 |
Total future minimum lease payments | $ 62,581 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Detail) - USD ($) | May 15, 2018 | Oct. 14, 2016 | Dec. 31, 2019 | Dec. 31, 2019 | Sep. 22, 2016 |
Loss Contingencies [Line Items] | |||||
Non-cash litigation loss | $ 1,256,000 | ||||
Interest from legal settlement | 200,000 | ||||
Selling, General and Administrative Expense [Member] | |||||
Loss Contingencies [Line Items] | |||||
Non-cash litigation loss | $ (2,900,000) | ||||
Reduction in selling, general, and administrative expense | $ (1,300,000) | ||||
Faneuil [Member] | |||||
Loss Contingencies [Line Items] | |||||
Recovery value on subcontract | $ 5,100,000 | ||||
Recovery of subcontract description basis | breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. | ||||
Litigation settlement, amount of damages awarded | 0 | $ 1,200,000 | |||
Litigation settlement, payment amount | $ 1,500,000 | ||||
3M Company [Member] | |||||
Loss Contingencies [Line Items] | |||||
Recovery value on subcontract | $ 10,000,000 | ||||
Recovery of subcontract description basis | breach of contract/indemnification, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. | ||||
Damages payable | 3,200,000 | ||||
Additional damages incurred | $ 10,000,000 | ||||
Litigation settlement, amount of damages awarded | $ 0 | ||||
Letters of Credit [Member] | |||||
Loss Contingencies [Line Items] | |||||
Line of credit amount outstanding | 2,700,000 | $ 2,700,000 | |||
Surety Bonds [Member] | |||||
Loss Contingencies [Line Items] | |||||
Estimated maximum guarantee cash payments | 30,000,000 | 30,000,000 | |||
Employment Agreements [Member] | |||||
Loss Contingencies [Line Items] | |||||
Total contingent termination payments related to base salary | $ 1,300,000 | $ 1,300,000 |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Class Of Stock [Line Items] | |||
Disposal of assets and other (gain) loss, net | $ (2) | $ 223 | $ 216 |
Total unrecognized compensation cost related to unvested stock options | $ 200 | ||
Weighted-average recognition period of unrecognized compensation cost related to unvested stock options | 1 year | ||
Stock option awards, granted | 0 | 0 | |
Stock option awards, forfeitures | 0 | 20,000 | |
Total intrinsic value of options vested outstanding | $ 100 | ||
Stock-based compensation expense | $ 112 | $ 185 | |
Stock options, outstanding | 1,700,000 | ||
Number of vested warrants issued, price per share | $ 3.39 | ||
Warrants exercisable to purchase outstanding | 2,500,000 | ||
Weighted average exercise price, stock warrants | $ 1.51 | ||
Common Stock Awards [Member] | |||
Class Of Stock [Line Items] | |||
Stock-based compensation expense | $ 28 | 101 | |
Common Stock Awards [Member] | Maximum [Member] | |||
Class Of Stock [Line Items] | |||
Stock-based compensation expense | $ 100 | $ 100 | |
Faneuil [Member] | |||
Class Of Stock [Line Items] | |||
Number of common stock retired | 84,000 | ||
Disposal of assets and other (gain) loss, net | $ 100 |
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 | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 112 | $ 185 |
Stock Options [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 84 | 84 |
Common Stock Awards [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 28 | $ 101 |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax | (1.00%) | 29.00% |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Detail) - Harland Clarke Holdings Corp. ("Harland Clarke") [Member] - USD ($) | 3 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | |
Related Party Transaction [Line Items] | ||||
Revenue recognized | $ 100,000 | |||
Cost of revenue | $ 100,000 | |||
Minimum [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 5.00% | |||
Maximum [Member] | ||||
Related Party Transaction [Line Items] | ||||
Accounts receivable | $ 0 | $ 100,000 |
Reportable Segments and Geogr_3
Reportable Segments and Geographic Information - Additional Information (Detail) | 3 Months Ended |
Dec. 31, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Reportable Segments and Geogr_4
Reportable Segments and Geographic Information - Summary of Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | |||
Net revenue | $ 90,465 | $ 93,784 | $ 354,997 |
Segment adjusted EBITDA | 3,360 | 8,606 | |
Depreciation and amortization | (5,242) | (4,446) | |
Interest expense | (2,564) | (2,715) | |
Loan amendment expenses | (769) | (201) | |
Restructuring and cost reduction initiatives | (277) | (85) | |
Stock-based compensation | (112) | (185) | |
Acquisition-related expenses | (49) | (12) | |
Provision for income taxes | (40) | (288) | (10,006) |
Lease payments in anticipation of facility shutdown | (38) | (186) | |
Disposal of assets and other (gain) loss, net | (2) | 223 | $ 216 |
Interest from legal settlement | 200 | ||
Recovery of litigation loss | 1,256 | ||
Net income (loss) | (4,277) | 711 | |
Operating Segments [Member] | Faneuil [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 58,567 | 55,202 | |
Segment adjusted EBITDA | 1,653 | 4,946 | |
Operating Segments [Member] | Carpets [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 9,774 | 12,362 | |
Segment adjusted EBITDA | (78) | 160 | |
Operating Segments [Member] | Phoenix [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 22,124 | 26,220 | |
Segment adjusted EBITDA | 2,840 | 4,221 | |
ALJ [Member] | |||
Segment Reporting Information [Line Items] | |||
Segment adjusted EBITDA | $ (1,055) | $ (721) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) | 3 Months Ended | |||
Dec. 31, 2019 | Mar. 31, 2020 | Mar. 16, 2020 | Mar. 15, 2020 | |
Seventh Amendment [Member] | Financing Agreement [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt instrument, covenant description | An extension of the seasonal increase period in 2020 during which the available amount under the Cerberus/PNC Revolver is $32.5 million from February 14, 2020 to March 15, 2020; and An increase in the available amount under the Cerberus/PNC Revolver from March 16, 2020 to March 31, 2020 from $25.0 million to $30.0 million. | |||
Cerberus/PNC Revolver [Member] | Scenario Forecast [Member] | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility maximum borrowing capacity | $ 30,000,000 | $ 25,000,000 | $ 32,500,000 |