Loading...
Docoh

Alj Regional (ALJJ)

Document and Entity Information

Document and Entity Information - shares6 Months Ended
Mar. 31, 2020Apr. 30, 2020
Cover [Abstract]
Document Type10-Q
Amendment Flagfalse
Document Period End DateMar. 31,
2020
Document Fiscal Year Focus2020
Document Fiscal Period FocusQ2
Trading SymbolALJJ
Entity Registrant NameALJ REGIONAL HOLDINGS INC
Entity Central Index Key0001438731
Current Fiscal Year End Date--09-30
Entity Current Reporting StatusYes
Entity Filer CategoryNon-accelerated Filer
Entity Shell Companyfalse
Title of 12(b) SecurityCommon Stock, par value $0.01 per share
Security Exchange NameNASDAQ
Entity Incorporation, State or Country CodeDE
Entity Interactive Data CurrentYes
Entity Small Businesstrue
Entity Emerging Growth Companytrue
Entity Ex Transition Periodfalse
Entity File Number001-37689
Entity Tax Identification Number13-4082185
Entity Address, Address Line One244 Madison Avenue
Entity Address, Address Line TwoPMB #358
Entity Address, City or TownNew York
Entity Address, State or ProvinceNY
Entity Address, Postal Zip Code10016
City Area Code888
Local Phone Number486-7775
Document Quarterly Reporttrue
Document Transition Reportfalse
Entity Common Stock, Shares Outstanding42,172,791

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in ThousandsMar. 31, 2020Sep. 30, 2019
Current assets:
Cash and cash equivalents $ 3,099 $ 4,529
Accounts receivable, net of allowance for doubtful accounts of $456 at March 31, 2020 and $126 September 30, 201950,657 41,707
Inventories, net7,259 6,777
Prepaid expenses and other current assets15,221 5,515
Income tax receivable897 897
Total current assets77,133 59,425
Property and equipment, net66,144 69,870
Goodwill59,047
Intangible assets, net38,502 41,148
Collateral deposits424 695
Other assets1,706 992
Total assets183,909 231,177
Current liabilities:
Accounts payable19,181 15,070
Accrued expenses17,621 16,092
Income taxes payable2 367
Deferred revenue and customer deposits7,007 1,965
Current portion of term loans, net of deferred loan costs5,039 9,119
Current portion of capital lease obligations3,154 2,535
Current portion of workers’ compensation reserve1,063 1,043
Other current liabilities68 72
Total current liabilities53,135 46,263
Line of credit, net of deferred loan costs18,932 9,372
Term loans, less current portion, net of deferred loan costs74,426 73,614
Deferred revenue, less current portion349
Workers’ compensation reserve, less current portion1,781 1,312
Capital lease obligations, less current portion3,829 2,623
Deferred tax liabilities, net2,244 2,795
Other non-current liabilities11,116 11,733
Total liabilities165,463 148,061
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.01 par value; authorized – 100,000 shares; 42,173 shares issued and outstanding at March 31, 2020 and September 30, 2019422 422
Additional paid-in capital287,985 287,101
Accumulated deficit(269,961)(204,407)
Total stockholders’ equity18,446 83,116
Total liabilities and stockholders’ equity $ 183,909 $ 231,177

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in ThousandsMar. 31, 2020Sep. 30, 2019
Statement Of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts $ 456 $ 126
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized100,000,000 100,000,000
Common stock, shares issued42,173,000 42,173,000
Common stock, shares outstanding42,173,000 42,173,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands3 Months Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2019Mar. 31, 2020Mar. 31, 2019
Income Statement [Abstract]
Net revenue $ 96,026 $ 87,996 $ 186,491 $ 181,780
Costs and expenses:
Cost of revenue78,763 68,657 154,489 143,303
Selling, general, and administrative expense18,467 16,089 35,077 31,736
Impairment of goodwill59,047 59,047
Loss (gain) on disposal of assets and other gain, net2 (223)
Total operating expenses156,277 84,746 248,615 174,816
Operating (loss) income(60,251)3,250 (62,124)6,964
Other (expense) income:
Interest expense, net(2,844)(2,625)(5,408)(5,340)
Interest from legal settlement200
Total other expense, net(2,844)(2,625)(5,208)(5,340)
(Loss) income before income taxes(63,095)625 (67,332)1,624
Benefit from (provision for) income taxes1,297 (202)1,257 (490)
Net (loss) income $ (61,798) $ 423 $ (66,075) $ 1,134
Basic (loss) earnings per share of common stock $ (1.47) $ 0.01 $ (1.57) $ 0.03
Diluted (loss) earnings per share of common stock $ (1.47) $ 0.01 $ (1.57) $ 0.03
Weighted average shares of common stock outstanding:
Basic42,173 38,026 42,173 38,037
Diluted42,173 38,076 42,173 38,087

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands6 Months Ended
Mar. 31, 2020Mar. 31, 2019
Operating activities
Net (loss) income $ (66,075) $ 1,134
Adjustments to reconcile net (loss) income to cash (used for) provided by operating activities:
Impairment of goodwill59,047
Depreciation and amortization expense10,160 9,283
Fair value of warrants issued in connection with loan amendments716
Amortization of deferred loan costs603 398
Provision for bad debts and obsolete inventory499 77
Stock-based compensation expense223 371
Interest expense accreted to term loan53
Loss (gain) on disposal of assets and other gain, net2 (223)
Deferred income taxes(1,448)(4)
Changes in operating assets and liabilities:
Accounts receivable, net(9,285)7,998
Inventories, net(844)188
Prepaid expenses, collateral deposits, and other current assets(7,016)(44)
Income tax receivable897
Other assets(443)607
Accounts payable4,111 (1,841)
Accrued expenses1,761 722
Income tax payable(365)(132)
Deferred revenue and customer deposits4,521 (1,601)
Other current liabilities and other liabilities(132)(853)
Cash (used for) provided by operating activities(3,015)16,080
Investing activities
Capital expenditures(2,883)(9,515)
Proceeds from sales of assets1 308
Acquisitions, net of cash acquired(1,000)
Cash used for investing activities(2,882)(10,207)
Financing activities
Net proceeds from line of credit9,713 1,761
Proceeds from term loan5,000
Deferred loan costs(542)(402)
Payments on capital leases(1,169)(1,583)
Payments on term loans(3,535)(5,108)
Cash provided by (used for) financing activities4,467 (332)
Change in cash and cash equivalents(1,430)5,541
Cash and cash equivalents at beginning of period4,529 2,000
Cash and cash equivalents at end of period3,099 7,541
Cash paid during the period for:
Interest4,724 4,877
Taxes680 634
Non-cash investing and financing activities:
Capital equipment purchases financed with capital leases to be billed to customers1,763
Capital equipment purchases financed with capital leases $ 1,582
Construction in process funded by landlord tenant improvement allowance4,146
Capital equipment purchases financed with term loan4,060
Construction in process not yet paid for $ 1,311

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in ThousandsTotalCommon 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 - options168
Common stock retired(1)(147)
Net (loss) income $ 1,134 1,134
Ending balance at Mar. 31, 201992,682 380 279,596 (187,294)
Beginning balance at Dec. 31, 2018380 279,512 (187,717)
Stock-based compensation expense - options84
Net (loss) income423 423
Ending balance at Mar. 31, 201992,682 380 279,596 (187,294)
Beginning balance at Sep. 30, 201983,116 422 287,101 (204,407)
Stock-based compensation expense - options168
Fair value of warrants issued in connection with loan amendments716 716
Net (loss) income(66,075)(66,075)
Cumulative impact of adopting ASC 606 on October 1, 2019521
Ending balance at Mar. 31, 202018,446 422 287,985 (269,961)
Beginning balance at Dec. 31, 2019422 287,779 (208,163)
Stock-based compensation expense - options84
Fair value of warrants issued in connection with loan amendments122 122
Net (loss) income(61,798)(61,798)
Ending balance at Mar. 31, 2020 $ 18,446 $ 422 $ 287,985 $ (269,961)

Organization and Basis of Prese

Organization and Basis of Presentation6 Months Ended
Mar. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Organization and Basis of PresentationALJ 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 March 31, 2020, 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 Statements of Operations for the three and six months ended March 31, 2019 have 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 table presents the impact of Faneuil’s reclassification on the Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2019:
Three Months Ended March 31, 2019
Six Months Ended March 31, 2019
( in thousands, except per share amounts
As Previously Reported
Revisions
As Revised
As Previously Reported
Revisions
As Revised
Net revenue
$
87,996
$

$
87,996
$
181,780
$

$
181,780
Costs and expenses:
Cost of revenue
67,739
918
68,657
140,566
2,737
143,303
Selling, general, and administrative expense
17,007
(918
)
16,089
34,473
(2,737
)
31,736
(Gain) loss on disposal of assets and other gain, net



(223
)

(223
)
Total operating expenses
84,746

84,746
174,816

174,816
Operating income
3,250

3,250
6,964

6,964
Other (expense) income:
Interest expense, net
(2,625
)

(2,625
)
(5,340
)

(5,340
)
Total other expense
(2,625
)

(2,625
)
(5,340
)

(5,340
)
Income before income taxes
625
625
1,624
1,624
Provision for income taxes
(202
)

(202
)
(490
)

(490
)
Net income
$
423
$

$
423
$
1,134
$

$
1,134
Basic earnings per share of common stock
$
0.01
$

$
0.01
$
0.03
$

$
0.03
Diluted earnings per share of common stock
$
0.01
$

$
0.01
$
0.03
$

$
0.03
Basic
38,026

38,026
38,037

38,037
Diluted
38,076

38,076
38,087

38,087
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. Impact of Coronavirus Pandemic In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to spread throughout the U.S. COVID-19 is having an unprecedented impact on the U.S. economy as federal, state, and local governments react to this public health crisis. Currently, all of ALJ’s subsidiaries have been deemed “Essential Services” and have continued to operate with limited disruption, albeit with lower sales volume. As such, COVID-19 did not materially impact ALJ’s financial position, or results of operations and cash flows as of and for the three months ended March 31, 2020. However, the Company took immediate actions to enable working-from-home where possible and put in place increased safety precautions, including social distancing, at other locations where essential services on site are required. The duration of these measures is unknown, may be extended and additional measures may be imposed. Management expects that ALJ could be impacted in the near term by lower volumes in several parts of ALJ’s business, resulting in lower revenue and profit. While the impact of COVID-19 on the Company’s future financial position, results of operations and cash flows cannot be estimated with certainty, such impact could be significant if the global pandemic continues to adversely impact the U.S. economy for an extended period of time. The extent to which COVID-19 impacts ALJ’s operations will depend on future developments, which are highly uncertain, including, among others, the duration of the outbreak, if portions of the Company’s business segments are recharacterized as non-essential for which closure of some or all of the Company’s operations could be required, As of March 31, 2020, ALJ’s total available liquidity was $10.3 million, which included $7.2 million of unused borrowing capacity under the Company’s revolving credit facility. While the impact that COVID-19 may have on the Company’s financial position, results of operations, and cash flows in the future cannot be estimated with certainty, b As a result of the decline in ALJ’s actual and forecasted results of operations, including the estimated effects of COVID-19, ALJ sought an easement of certain financial covenants, as defined by the Financing Agreement, in order to maintain compliance, and the elimination of certain quarterly principal payment obligations. Accordingly, the Company obtained an easement by executing the Ninth Amendment to the Financing Agreement on May 12, 2020. See Ninth Amendment to the Financing Agreement” While the Company currently anticipates it will be able to maintain compliance with the terms and conditions of the Ninth Amendment to the Financing Agreement for at least the next 12 months, the ultimate magnitude and duration of the global pandemic is highly uncertain and, as such, will require ALJ to continually assess its current estimates of compliance for the foreseeable future. Accordingly, the Company’s anticipated compliance with its financial covenants may adversely change if the magnitude and duration of the global pandemic has a materially adverse effect on the Company in the future.

Recent Accounting Standards

Recent Accounting Standards6 Months Ended
Mar. 31, 2020
Accounting Changes And Error Corrections [Abstract]
Recent Accounting Standards2. 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 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. Costs incurred as part of contract implementation either represent costs incurred towards the partial satisfaction of a performance obligation, fulfillment costs, or administrative costs. Under ASC 606, fulfillment costs are capitalizable and are amortized over the contract term, consistent with the definition of a contract term under ASC 606. As a result of termination provisions, the contract term under ASC 606 may be shorter than the contractually stated contract term. Under the previous guidance, all costs incurred as part of contract implementation were capitalized and amortized over the stated contractual term, disregarding any termination provisions, on a straight-line basis. Certain contracts require that a customer make nonrefundable payments to Faneuil prior to the commencement of call center services. The timing of receipt 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, typically call center services, are satisfied over the contract term, as defined under ASC 606. If a contract contains termination provisions, and such termination provisions are not substantive, the upfront nonrefundable fees will be 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 were recognized as implementation services were provided or, in cases where implementation services were not provided, deferred and amortized over the stated contractual term on a straight-line basis . 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 exceed 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. 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 summarizes the pre-tax impacts of adopting the new revenue accounting guidance on ALJ’s Consolidated Balance Sheet as of March 31, 2020:
As of March 31, 2020
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
$
15,221
$
(1,446
)
$
104
$
(306
)
$
(1,648
)
$
13,573
Inventories, net
7,259

(45
)
248
203
7,462
Liabilities
Accrued expenses
17,621

21

21
17,642
Deferred revenue and customer deposits
7,007
37


37
7,044
Stockholders’ equity
Accumulated deficit
(269,961
)
(1,483
)
38
(58
)
(1,503
)
(271,464
) The following tables summarize the pre-tax impacts of adopting the new revenue accounting guidance on ALJ’s Statements of Operation for the three and six months ended March 31, 2020:
Three Months Ended March 31, 2020
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
$
96,026
$
(293
)
$
112
$
469
$
288
$
96,314
Cost of revenue
78,763
534
65
280
879
79,642
Net loss
(61,798
)
(827
)
47
189
(591
)
(62,389
)
Loss per share of common stock–basic and diluted
(1.47
)
(0.02
)
0.00
0.00
(0.01
)
(1.48
)
Six Months Ended March 31, 2020
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
$
186,491
$
(647
)
$
165
$
(365
)
$
(847
)
$
185,644
Cost of revenue
154,489
1,441
97
(465
)
1,073
155,562
Net loss
(66,075
)
(2,088
)
68
100
(1,920
)
(67,995
)
Loss per share of common stock–basic and diluted
(1.57
)
(0.05
)
0.00
0.00
(0.05
)
(1.61
) The consolidated statement of cash flows for the six months ended March 31, 2020 takes into consideration the effect of adopting ASC 606. The adoption of ASC 606 had no impact to net cash provided by (used for) operating, financing or investing activities on the Company’s condensed consolidated statement of cash flows for the six months ended March 31, 2020. 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 Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes on its consolidated financial statements and related disclosures.

Revenue recognition

Revenue recognition6 Months Ended
Mar. 31, 2020
Revenue Recognition [Abstract]
Revenue Recognition3. 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 recognizes r evenue Faneuil . Faneuil contracts with its customers are typically in the form of a written contract executed between Faneuil and 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 transfer of control of goods or services, 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 transaction price per the contract 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 gives 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. 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 loss (contract liability). For contract revenue recognized over time, the accrued contract loss 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 transfer of control of goods or services, resulting in unbilled revenue, which is recorded as a contract asset. However, Carpets sometimes receives advances or deposits from its customers before revenue is recognized, resulting in deferred revenue, which is recorded as 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. 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 storage 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. Sometimes, billing occurs subsequent to transfer of control of goods or services, resulting in unbilled revenue, which is recorded as a contract asset. 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. 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 March 31, 2020 and October 1, 2019:
( in thousands
March 31, 2020
October 1, 2019
Contract assets:
Unbilled revenue (1)
$
1,483
$
825
Total contract assets
$
1,483
$
825
Contract liabilities
Deferred revenue
$
6,374
$
1,838
Accrued rebates and material rights (2)
2,191
2,612
Accrued contract losses (3)
9
15
Total contract liabilities
$
8,574
$
4,465
(1)
Included in prepaid expenses and other current assets. Unbilled revenue represents rights to consideration for services provided when the right is conditioned on something other than passage of time (for example, meeting a milestone for the right to bill under the cost-to-cost measure of progress). Unbilled revenue is transferred to accounts receivable when the rights become unconditional.
(2)
At March 31, 2020, the balance is included in accrued expenses. At October 1, 2019, of the total balance, $0.5 million is included in other non-current liabilities and $2.1 million is included in accrued expenses.
(3)
Included in accrued expenses. The following table provides changes in consolidated contract assets and contract liabilities during the six months ended March 31, 2020:
( in thousands
Contract Assets
Contract Liabilities
Balance, beginning of period (October 1, 2019)
$
825
$
4,465
Additions to contract assets
2,775

Transfer from contract assets to accounts receivable
(2,117
)

Revenue recognized

(4,819
)
Change in loss accrual

(6
)
Accrued rebates

1,403
Payment of rebates

(1,825
)
Cash received from customer

9,356
Balance, end of period
$
1,483
$
8,574
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 March 31, 2020, 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 and six months ended March 31, 2020:
( in thousands
Three Months Ended March 31, 2020
Six Months Ended March 31, 2020
Faneuil:
Healthcare
$
23,988
$
49,355
Transportation
18,368
35,496
Utility
13,490
27,417
Other
2,398
3,494
Government
581
1,630
Total Faneuil
$
58,825
$
117,392
Carpets
Builder
$
7,682
$
14,641
Commercial
1,777
3,405
Retail
1,089
2,276
Total Carpets
$
10,548
$
20,322
Phoenix:
Publisher
MSA
$
19,569
$
31,999
Non-MSA
4,222
10,782
Commercial
MSA
380
1,185
Non-MSA
2,482
4,811
Total Phoenix
$
26,653
$
48,777
Total consolidated revenue, net
$
96,026
$
186,491
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 and six months ended March 31, 2020, the Company capitalized $0.3 million and $0.6 million, respectively, of costs to obtain a contract. During the three and six months ended March 31, 2020, the Company recognized $0.2 million and $0.3 million of amortization of these costs, respectively, which is included in selling, general, and administrative expense. The net book value of costs to obtain a contract was $0.7 million as of March 31, 2020, of which $0.5 million was in prepaid expenses and other current assets, and $0.2 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. During the three and six months ended March 31, 2020, the Company capitalized $5.0 million and $7.0 million, respectively, of costs to fulfill a contract. The amortization of costs to fulfill contracts, which comprise set-up/transition activities, for the three and six months ended March 31, 2020 was approximately $0.5 million and $2.0 million, respectively. The net book value of the costs to fulfill a contract as of March 31, 2020, was $6.8 million of which $6.0 million was in prepaid expenses and other current assets, and $0.8 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 six months ended March 31, 2020.

Acquisitions

Acquisitions6 Months Ended
Mar. 31, 2020
Business Combinations [Abstract]
Acquisitions4. 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 (1)
2,675
Total assets
7,439
Accrued expenses
(39
)
Fair value of deferred and contingent consideration – current (2)
(2,100
)
Fair value of deferred and contingent consideration – non-current (3)
(2,800
)
Cash paid at closing
$
2,500
(1)
Goodwill was tested for impairment as of March 31, 2020. As a result of the interim test, ALJ recognized a non-cash impairment of goodwill, which included $2.7 million related to the RDI Acquisition. See Footnote 6.
(2)
Included in accrued expenses on the Consolidated Balance Sheet at March 31, 2020. There was no change in the fair value from the RDI Purchase Date to March 31, 2020.
(3)
Included in other non-current liabilities on the Consolidated Balance Sheet at March 31, 2020. There was no change in the fair value from the RDI Purchase Date to March 31, 2020. 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. See Footnote 6. During the six months ended March 31, 2020, 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 Risks6 Months Ended
Mar. 31, 2020
Risks And Uncertainties [Abstract]
Concentration Risks5. 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 ALJ did not generate net revenue from any one customer in excess of 10% of consolidated net revenue during any period presented. However, each of ALJ’s segments had customers that represent more than 10% of their respective net revenue, as described below. Faneuil
Three Months Ended March 31,
Six Months Ended March 31,
2020
2019
2020
2019
Customer A
10.9
%
14.6
%
11.3
%
13.7
%
Customer B
10.1
10.8
12.9
13.8
Customer C
**
11.0
**
10.3
**
Less than 10% of Faneuil net revenue. Accounts receivable from these customers totaled $5.3 million on March 31, 2020. As of March 31, 2020, 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 March 31,
Six Months Ended March 31,
2020
2019
2020
2019
Customer A
27.1
%
31.5
%
27.0
%
30.4
%
Customer B
21.8
25.5
22.7
26.5
Customer C
19.7
22.9
17.9
21.1
Customer D
10.2
**
**
**
**
Less than 10% of Carpets net revenue. Accounts receivable from these customers totaled $2.5 million on March 31, 2020. As of March 31, 2020, 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 March 31,
Six Months Ended March 31,
2020
2019
2020
2019
Customer A
28.2
%
23.0
%
26.7
%
21.1
%
Customer B
16.6
20.5
16.6
19.2
Customer C
11.7
10.9
11.9
11.6
Customer D
**
**
**
10.5
**
Less than 10% of Phoenix net revenue. Accounts receivable from these customers totaled $4.1 million on March 31, 2020. As of March 31, 2020, 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 ALJ had one supplier that represented 13.2% and 12.2% of consolidated purchases during the three and six months ended March 31, 2020, respectively, and 16.8% and 17.2% of consolidated purchases during the three and six months ended March 31, 2019, respectively. Additionally, two of ALJ’s segments had suppliers that represented more than 10% of their respective inventory purchases, as described below. Carpets
Three Months Ended March 31,
Six Months Ended March 31,
2020
2019
2020
2019
Supplier A
20.8
%
17.2
%
20.2
%
15.6
%
Supplier B
18.4
21.6
17.7
22.9
Supplier C
**
15.6
**
16.0
Supplier D
**
**
**
10.5
**
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 March 31,
Six Months Ended March 31,
2020
2019
2020
2019
Supplier A
18.8
%
25.6
%
17.8
%
25.9
%
Supplier B
11.7
**
14.4
%
**
**
Less than 10% of Phoenix inventory purchases. 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 Captions6 Months Ended
Mar. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Composition of Certain Financial Statement Captions6. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS Accounts Receivable, Net The following table summarizes accounts receivable at the end of each reporting period:
March 31,
September 30,
(in thousands)
2020
2019
Accounts receivable
$
50,329
$
41,251
Unbilled receivables
784
582
Accounts receivable
51,113
41,833
Less: allowance for doubtful accounts
(456
)
(126
)
Accounts receivable, net
$
50,657
$
41,707
Inventories, Net The following table summarizes inventories at the end of each reporting period:
March 31,
September 30,
(in thousands)
2020
2019
Raw materials
$
4,081
$
3,837
Semi-finished goods/work in process
2,111
2,111
Finished goods
1,632
1,230
Inventories
7,824
7,178
Less: allowance for obsolete inventory
(565
)
(401
)
Inventories, net
$
7,259
$
6,777
Property and Equipment The following table summarizes property and equipment at the end of each reporting period:
March 31,
September 30,
(in thousands)
2020
2019
Leasehold improvements
$
31,829
$
31,370
Machinery and equipment
31,027
30,805
Building and improvements
17,403
17,403
Software
15,695
16,139
Computer and office equipment
14,979
13,273
Land
9,267
9,267
Furniture and fixtures
7,849
7,796
Construction and equipment in process
1,201
206
Vehicles
409
386
Property and equipment
129,659
126,645
Less: accumulated depreciation and amortization
(63,515
)
(56,775
)
Property and equipment, net
$
66,144
$
69,870
Property and equipment depreciation and amortization expense, including amounts related to capitalized leased assets, Goodwill Changes in the carrying value of goodwill by reportable segment were as follows:
(in thousands)
Faneuil
Carpets
Phoenix
Total
Balance, September 30, 2019
$
23,950
$
2,555
$
32,542
$
59,047
Impairment of goodwill
(23,950
)
(2,555
)
(32,542
)
(59,047
)
Balance, March 31, 2020
$

$

$

$

In accordance with the accounting guidance on goodwill and other intangible assets, the Company performs an annual impairment test of goodwill at the reporting unit level on the last day of our fiscal year, September 30, or more frequently if indicators of potential impairment exist. The impairment test includes evaluating qualitative and quantitative factors to assess the likelihood of an impairment of goodwill. Each of the Company’s three reporting units has goodwill assigned, which is assessed independently. As a result of the decline in ALJ’s market capitalization, downward economic pressure, declines in actual and forecasted results of operations including the estimated effects of COVID-19, management As a result of the interim test, ALJ recognized a non-cash impairment of goodwill totaling $59.0 million during the three months ended March 31, 2020. Intangible Assets The following tables summarizes identified intangible assets at the end of each reporting period:
March 31, 2020
(in thousands)
Weighted Average Original Life (Years)
Weighted Average Remaining Life (Years)
Gross
Accumulated Amortization
Net
Customer relationships
11.7
7.3
$
33,660
$
(14,444
)
$
19,216
Trade names
27.0
22.9
10,760
(2,219
)
8,541
Supply agreements
10.1
9.1
9,930
(3,657
)
6,273
Technology
8.0
7.3
3,400
(283
)
3,117
Non-compete agreements
11.8
6.0
1,820
(465
)
1,355
Totals
$
59,570
$
(21,068
)
$
38,502
September 30, 2019
(in thousands)
Weighted Average Original Life (Years)
Weighted Average Remaining Life (Years)
Gross
Accumulated Amortization
Net
Customer relationships
11.7
7.8
$
33,660
$
(13,039
)
$
20,621
Trade names
27.0
23.4
10,760
(2,004
)
8,756
Supply agreements
10.1
9.6
9,930
(3,002
)
6,928
Technology
8.0
7.8
3,400
(71
)
3,329
Non-compete agreements
11.8
6.5
1,820
(311
)
1,509
Internal-use software
6.0
0.1
580
(575
)
5
Totals
$
60,150
$
(19,002
)
$
41,148
Intangible asset amortization expense was $1.3 million for both the three months ended March 31, 2020 and 2019, and $2.6 million for both the six months ended March 31, 2020 and 2019. In connection with the aforementioned goodwill interim impairment testing, the Company conducted an impairment test for intangible asset and other long-lived assets for all three reporting units as of March 31, 2020. Upon completion of the test, it was determined that each reporting unit’s intangible assets and other long-lived assets’ estimated fair values were equal to or exceeded the carrying value and accordingly, no impairment was warranted. 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
$
2,615
Fiscal 2021
4,982
Fiscal 2022
4,635
Fiscal 2023
4,635
Fiscal 2024
4,496
Thereafter
17,139
Total
$
38,502
Accrued Expenses The following table summarizes accrued expenses at the end of each reporting period:
March 31,
September 30,
(in thousands)
2020
2019
Accrued compensation and related taxes
$
8,708
$
8,041
Rebates payable
2,191
2,157
Acquisition contingent consideration
2,100
2,100
Deferred lease incentives
1,307
1,159
Medical and benefit-related payables
1,092
964
Other
938
342
Interest payable
751
723
Accrued board of director fees
327
109
Sales tax payable
112
111
Deferred rent
95
112
Call center buildouts

274
Total accrued expenses
$
17,621
$
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 Share6 Months Ended
Mar. 31, 2020
Earnings Per Share [Abstract]
(Loss) Earnings Per Share7. (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 March 31,
Six Months Ended March 31,
( in thousands, except per share amounts
2020
2019
2020
2019
Net (loss) income
$
(61,798
)
$
423
$
(66,075
)
$
1,134
Weighted average shares of common stock outstanding - basic
42,173
38,026
42,173
38,037
Potentially dilutive effect of options to purchase common stock

50

50
Weighted average shares of common stock outstanding – diluted
42,173
38,076
42,173
38,087
Basic (loss) earnings per share of common stock
$
(1.47
)
$
0.01
$
(1.57
)
$
0.03
Diluted (loss) earnings per share of common stock
$
(1.47
)
$
0.01
$
(1.57
)
$
0.03
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. Options and warrants to purchase 4.6 million shares of common stock were not considered in calculating ALJ’s diluted loss per share of common stock for the three and six months ended March 31, 2020 as their effect would be anti-dilutive. Options to purchase 1.5 million shares of common stock were not considered in calculating ALJ’s diluted earnings per share of common stock for the three and six months ended March 31, 2019 as their effect would be anti-dilutive.

Debt

Debt6 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]
Debt8. DEBT Debt The following table summarizes ALJ’s line of credit, term loan, and equipment financing at the end of each reporting period:
March 31,
September 30,
(in thousands)
2020
2019
Line of credit:
Line of credit
$
19,536
$
9,823
Less: deferred loan costs
(604
)
(451
)
Line of credit, net of deferred loan costs
$
18,932
$
9,372
Current portion of term loans:
Current portion of term loan
$
4,100
$
8,200
Current portion of equipment financing
1,333
1,336
Less: deferred loan costs
(394
)
(417
)
Current portion of term loans, net of deferred loan costs
$
5,039
$
9,119
Term loans, less current portion:
Term loan, less current portion
$
69,935
$
72,882
Term B Loan and in kind interest payable
4,153
$

Equipment financing, less current portion
1,180
1,765
Less: deferred loan costs
(842
)
(1,033
)
Term loans, less current portion, net of deferred loan costs
$
74,426
$
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, “Cerberus Debt”). ALJ has subsequently entered into nine amendments to the Financing Agreement, of which three were entered into during the six months ended March 31, 2020 and are described below. The Cerberus Debt matures on November 28, 2023 (“Maturity Date”). Sixth Amendment to the Financing Agreement On December 17, 2019, ALJ entered into the Sixth Amendment (“Sixth Amendment”) to the Financing Agreement. The Sixth Amendment amended 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 ended December 31, 2019, (ii) 4.50:1.00 for the fiscal quarter ended 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 the fixed charge coverage ratio threshold from (a) 1.05:1.00 to (i) 0.85:1.00 for the fiscal quarters ended 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 for Prime rate loans from 3.25% to 4.75% per annum. Additionally, the Sixth Amendment added a deleveraging fee (“Deleveraging Fee”), of which the first payment was made on March 31, 2020, and the second payment will become due on June 30, 2020 unless one or more persons purchases a $2.5 million participating interest in the Cerberus Term Loan prior to June 30, 2020. The first payment made on March 31, 2020 was expensed to selling, general, and administrative expense during the three months ended March 31, 2020. Seventh Amendment to the Financing Agreement On February 13, 2020, ALJ entered into the Seventh Amendment (“Seventh Amendment”) to the Financing Agreement to temporarily increase the Cerberus/PNC Revolver borrowing capacity as follows:

Extended the seasonal increase period, originally through February 14, 2020, to March 15, 2020, during which the available amount under the Cerberus/PNC Revolver was $32.5 million; and

Increased the available borrowing limit under the Cerberus/PNC Revolver from $25.0 million to $30.0 million for the period from March 16, 2020 to March 31, 2020. Eighth Amendment to the Financing Agreement On March 26, 2020, ALJ entered into the Eighth Amendment (“Eighth Amendment”) to the Financing Agreement to amend certain terms and covenants, which included:

Removed the seasonal decreases in the Company’s revolving credit facility such that the amount available to borrow thereunder remains $32.5 million through the Maturity Date;

Adjusted quarterly principal payment obligations as follows: (i) March 31, 2020 – reduced the payment from $2.1 million to zero, (ii) June 30, 2020 – maintained the payment at $2.1 million, and (iii) September 30, 2020 and December 31, 2020 – increased the payments from $2.1 million to $3.1 million;

Adjusted payment terms on the interest payable on the Term B Loan, from a mixture of cash and payable in kind to 100% payable in kind, until Term A Loan is paid in full; and

Added a monthly fee of $0.1 million, from the period April 1, 2020 through the Maturity Date, which amounts are added to the Cerberus Term Loan, accrue interest at the Cerberus Term Loan rate, and are payable on the Maturity Date. Ninth Amendment to the Financing Agreement As a result of the decline in ALJ’s actual and forecasted results of operations, including the estimated effects of COVID-19, ALJ sought an easement of certain debt covenants, as defined by the Financing Agreement, and the elimination of certain quarterly principal payment obligations. On May 12, 2020, ALJ entered into the Ninth Amendment (“Ninth Amendment”) to the Financing Agreement. The Ninth Amendment amended certain terms and covenants as summarized below:

Increased the interest rate from LIBOR plus 6.75% per annum to LIBOR plus 9.50% per annum on the LIBOR portion of the Cerberus/PNC Revolver, an increase of 2.75% per annum;

Increased the interest rate from Prime plus 5.75% per annum to Prime plus 8.50% per annum on the Prime portion of the Cerberus/PNC Revolver, an increase of 2.75% per annum;

Eliminated the $2.1 million and $3.1 million quarterly principal payment obligations for June 30, 2020 and September 30, 2020, respectively;

Reduced the quarterly principal payment obligation of $3.1 million to $2.1 million for December 31, 2020;

Excluded amounts outstanding under the Term B Loan and Term C Loan (see “ Amendment to the Junior Participation Agreements – Term C Loan”

Adjusted the leverage ratio threshold and the fixed charge coverage ratio as follows:
Three Months Ending,
Adjusted Leverage Ratio
Adjusted Fixed Charge Ratio
March 31, 2020
7.25:1.00
0.65:1.00
June 30, 2020
7.45:1.00
0.63:1.00
September 30, 2020
6.85:1.00
0.61:1.00
December 31, 2020
5.75:1.00
0.70:1.00
March 31, 2021
5.00:1.00
0.75:1.00
June 30, 2021
4.00:1.00
0.82:1.00
September 30, 2021
3.75:1.00
0.81:1.00
December 31, 2021 through Maturity Date
3.50:1.00
1.00:1.00 Junior Participation Agreement – Term B Loan and Warrants Issued On December 17, 2019, 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 (“Ravich Entities”), entered into a Junior Participation Agreement with Cerberus (“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 (“Junior Participation” and such interests, “Junior Participation Interests”). The Junior Participation Interests are junior and subordinate to the Cerberus Term Loan in all respects and have no quarterly payments. Through March 26, 2020, interest accrued under the Junior Participation (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. See “ Amendment to Junior Participation Agreement -Term B Loan and Warrants Issued In connection with the Junior Participation, the Company issued fully vested warrants to purchase 1.23 million shares of the Company’s common stock (“Junior Participation Agreement Warrants”) to the Ravich Entities, 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) December 17, 2019 or (ii) six months from December 17, 2019. The 30-day trailing average closing price of the Company’s common stock on December 17, 2019 was $1.20. The fair value of the Junior Participation Agreement 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 fair value of the Junior Participation Agreement Warrants of $0.6 million was expensed to selling, general, and administrative expense during the six months ended March 31, 2020. Amendment to Junior Participation Agreement – Term B Loan and Warrants Issued On March 26, 2020, in connection with the Eighth Amendment to the Financing Agreement, the Ravich Entities entered into the First Amendment to the Junior Participation Agreement (“First Amendment to Junior Participation Agreement”). The amended terms under the First Amendment to Junior Participation Agreement include:

Interest earned on Term B Loan to be 100% in kind, at a rate equal to the Cerberus Term Loan plus 4.00%, until Cerberus Term Loan is paid in full instead of a mixture of cash and in kind; and

Interest earned on the Backstop Letter Agreement (see “ Backstop Letter Agreement In connection with the First Amendment to Junior Participation Agreement, the Company issued fully vested warrants to purchase 0.4 million shares of the Company’s common stock (“ First Amendment to Junior Participation Agreement The fair value of the First Amendment to Junior Participation Agreement First Amendment to Amendment to the Junior Participation Agreements – Term C Loan On May 12, 2020, in connection with, and as a condition to, the Ninth Amendment, certain stockholders of the Company (“Term C Loan Junior Participants”), including Mr. Ravich, entered into or amended certain Junior Participation Agreements (collectively, “Term C Loan Junior Participation Agreements”) with Cerberus. Pursuant to the Term C Loan Junior Participation Agreements, the Term C Loan Junior Participants acquired junior participation interests in Term C Loan in an aggregate amount of $5.6 million on May 13, 2020 (“Term C Loan”). Additionally, Mr. Ravich agreed to acquire additional junior participation interests in the Term B Loan in an aggregate amount of (i) $2.5 million on December 31, 2020 and (ii) $2.5 million on March 31, 2021. The $5.6 million Term C Loan is convertible, at the option of the Term C Loan Junior Participants, into shares of the Company’s common stock, at a conversion price equal to 120% of the trailing ten business day closing price of the Company’s common stock prior to the transaction date or the six-month anniversary thereof, whichever is lower. The $5.6 million Term C Loan and the $5.0 million additional Term B Loan are junior and subordinate to the Cerberus Debt in all respects and have no quarterly payments. Beginning May 12, 2020, the $5.6 million Term C Loan accrues interest in kind at the same rate per annum as the Cerberus Term Loan, payable on the Maturity Date. Beginning December 31, 2020, the $5.0 million additional Term B Loan will accrue interest in kind at the same rate per annum as the Cerberus Term Loan plus 4.00% per annum, payable on the Maturity Date. Summary of the 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 March 31, 2020
Term Loan:
Financing Agreement
Phoenix acquisition
August 2015
8.25% to 8.80%
$
1,610
$
58,138
First Amendment
Color Optics acquisition
July 2016
8.25% to 8.80%
175
6,333
Third Amendment
Printing Components Business acquisition
October 2017
8.25% to 8.80%
151
5,434
Fourth Amendment
Working capital
November 2018
8.25% to 8.80%
114
4,130
Sixth Amendment (Term B loan)
N/A
December 2019
12.25% to 12.80%

4,153
Totals
$
2,050
$
78,188
Line of Credit:
Cerberus/PNC Revolver (includes Second, Fifth, Seventh, and Eighth Amendments)
Working capital
August 2015
10.50% to 10.75%
$

$
19,536
*
Range of annual interest rates accrued during the six months ended March 31, 2020.
* *
See “ Ninth Amendment to the Financing Agreement ” above for discussion of the elimination of the quarterly principal payment obligations for June 30, 2020 and September 30, 2020. 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 six months ended March 31, 2020 and 2019, ALJ made mandatory payments of $0.9 million and $0.4 million, respectively. As of March 31, 2020 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 March 31, 2020, ALJ was in compliance with all debt covenants and had unused borrowing capacity of $7.2 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 connection with the Backstop Letter Agreement, the Company’s Audit Committee and independent directors reviewed, approved and agreed to a backstop fee package, pursuant to which the Company paid a one-time backstop fee of $0.1 million to Mr. Ravich’s trust. Additionally, 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, the Company will issue a five-year warrant (“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 to Mr. Ravich’s trust. The Term C Loan Junior Participation Agreements discussed above satisfied the alternative financing requirement. Loan Amendment Fees ALJ has accounted for all loan amendments as debt modifications pursuant to ASC 470, Debt During the three and six months ended March 31, 2020, ALJ paid $0.3 million and $0.7 million, respectively, of legal and other fees of which $0.2 million and $0.5 million, respectively, were added to deferred loan costs and are being amortized to interest expense through the Maturity Date. The remaining fees of $0.1 million and $0.2 million were expensed to selling, general, and administrative expense during the three and six months ended March 31, 2020, respectively. During the six months ended March 31, 2019, 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 fees of $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 and 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 March 31, 2020, one Contingent Payment remained outstanding. Equipment Financing In December 2018, Phoenix purchased a Heidelberg Press for $4.1 million pursuant to an equipment financing agreement (“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 March 31,
Equipment Financing
Cerberus Debt
Total
2021
$
1,333
$
4,100
$
5,433
2022
1,180
2,050
3,230
2023

2,050
2,050
2023

2,050
2,050
2024*

87,474
87,474
Total
$
2,513
$
97,724
$
100,237
*
The majority of this amount is the final balloon payment due on the Maturity Date. Capital Lease Obligations Faneuil and Phoenix lease equipment under non-cancelable capital leases. As of March 31, 2020, 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 March 31,
Estimated Future Payments
2021
$
3,337
2022
1,973
2023
1,571
2024
435
Total minimum required payments
7,316
Less: current portion of capital lease obligations
(3,154
)
Less: imputed interest
(333
)
Capital lease obligations, less current portion
$
3,829

Commitments and Contingencies

Commitments and Contingencies6 Months Ended
Mar. 31, 2020
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies9. COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases real estate, equipment, and vehicles under non-cancellable operating leases. As of March 31, 2020, future minimum rental commitments, net of sublease income, under non-cancellable leases were as follows ( in thousands
Year Ending March 31,
Future Minimum Lease Payments
2021
$
7,953
2022
7,242
2023
6,615
2024
6,412
2025
6,858
Thereafter
26,577
Total
$
61,657
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 March 31, 2020, 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 March 31, 2020, 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 $2.9 million outstanding as of March 31, 2020. Vendor Commitment In March 2020, Faneuil entered into a Master Services Agreement (“Faneuil MSA”) with a vendor whereby the vendor agreed to provide call center representatives for certain contracts. The Faneuil MSA has a $9.7 million, 12-month minimum commitment (“Minimum Commitment”), which must be reached before March 23, 2021. As of March 31, 2020, the entire Minimum Commitment was outstanding. 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 six months ended March 31, 2020. 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 November 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 March 31, 2020. 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

Equity6 Months Ended
Mar. 31, 2020
Equity [Abstract]
Equity10. EQUITY Common Stock Activity during the Six Months ended March 31, 2020 ALJ did not have any common stock activity during the six months ended March 31, 2020. Common Stock Activity during the Six Months ended March 31, 2019 During the six months ended March 31, 2019, 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 six months ended March 31, 2019, 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 March 31,
Six Months Ended March 31,
(in thousands)
2020
2019
2020
2019
Stock options
$
84
$
84
$
168
$
168
Common stock awards
27
102
55
203
Total stock-based compensation expense
$
111
$
186
$
223
$
371
At March 31, 2020, 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 March 31, 2020. 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 March 31, 2020 As of March 31, 2020, ALJ had 1.7 million stock options with a weighted average exercise price of $3.39 outstanding, and warrants exercisable to purchase 2.9 million shares of common stock with a weighted average exercise price of $1.40 outstanding. Nasdaq Notifications On April 9, 2020, the Company received a letter from the Listing Qualifications Department of the Nasdaq indicating that, based upon the closing bid price of ALJ’s common stock for the last 30 consecutive business days, the Company did not meet the minimum bid price of $1.00 per share required for continued listing on The Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1). Pursuant to the initial Nasdaq notice and Rule 5810(c)(3)(A) of the Nasdaq Listing Rules, the Company has 180 calendar days from the date of the notice, or until October 6, 2020, to regain compliance with the minimum bid price requirement in Rule 5550(a)(2) by achieving a closing bid price for ALJ’s common stock of at least $1.00 per share over a minimum of 10 consecutive business days. However, on April 17, 2020, the Company received a second letter from the Nasdaq indicating that, given the extraordinary market conditions, effective as of April 16, 2020, the Nasdaq has determined to toll the compliance periods for the minimum bid price requirement through June 30, 2020. As a result, since ALJ had 173 calendar days remaining in its bid price compliance period as of April 16, 2020, the Company will, upon reinstatement of minimum bid price requirement, still have 173 calendar days from July 1, 2020, or until December 21, 2020, to regain compliance. However, the Company can provide no assurance that it will be able to regain compliance with the minimum bid price requirement prior to December 21, 2020 or will otherwise remain in compliance with other Nasdaq listing requirements. If ALJ anticipates it will be unable to regain compliance with the minimum bid price requirement, the Company may, among other things, execute a reverse stock split of its common stock on or prior to December 21, 2020, in order to regain compliance. However, if the Company is unable to regain compliance with the minimum bid price requirement or remain in compliance with any of the other continued listing requirements, the Nasdaq may take steps to delist our common stock, which could have adverse results, including, but not limited to, a decrease in the liquidity and market price of our common stock, loss of confidence by our employees and investors, loss of business opportunities, and limitations in potential financing options.

Income Tax

Income Tax6 Months Ended
Mar. 31, 2020
Income Tax Disclosure [Abstract]
Income Tax11. INCOME TAX Before consideration of discrete tax adjustments, ALJ’s effective forecasted annual tax rate for the six months ended March 31, 2020 was 6.0% as a result of generating state taxable income, offset by changes to the valuation allowance recorded against net deferred tax assets. In addition, ALJ recorded discrete tax benefit of $0.7 million related to impairment of goodwill of $59.0 million. See Note 6. ALJ’s effective tax rate for the six months ended March 31, 2019 was 30.0% as a result of generating state income tax. The decrease in the effective tax rate was attributable to a decrease in forecasted taxable income, as well as changes to the valuation allowance recorded against net deferred tax assets. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side payroll tax, net operating loss carryback periods, alternative minimum tax credit refunds, and modifications to the net interest deduction limitations. For the three and six months ended March 31, 2020, the CARES Act did not have a material impact on ALJ's results of operations, cashflows, or financial position. On December 22, 2017, the President of the United States signed and enacted into law H.R. 1 (the “Tax Reform Law”). As a result of the Tax Reform Law, ALJ qualified for a $1.8 million alternative minimum tax (“AMT”) refund, of which $0.9 million was recorded as an income tax receivable and $0.9 million was recorded as a deferred tax asset at September 30, 2019. ALJ received $0.9 million in November 2019. As of September 30, 2019, ALJ anticipated receiving the remaining $0.9 million AMT refund ratably over the next several years. The CARES Act allowed ALJ to apply for quicker receipt of the remaining $0.9 million AMT refund. As a result, ALJ reclassed $0.9 million from a deferred tax asset to an income tax receivable at March 31, 2020.

Related-Party Transactions

Related-Party Transactions6 Months Ended
Mar. 31, 2020
Related Party Transactions [Abstract]
Related-Party Transactions12. 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 both the three and six months ended March 31, 2019. The associated cost of revenue was $0.1 million for the three and six months ended March 31, 2019. 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 March 31, 2020 or September 30, 2019.

Reportable Segments and Geograp

Reportable Segments and Geographic Information6 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]
Reportable Segments and Geographic Information13. 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 expense, interest expense, litigation loss, recovery of litigation loss, restructuring and cost reduction initiatives, loan amendment expenses, fair value of warrants issued in connection with loan amendments, 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 and six months ended March 31, 2020 and 2019:
Three Months Ended March 31, 2020
( in thousands
Faneuil
Carpets
Phoenix
ALJ
Total
Net revenue
$
58,825
$
10,548
$
26,653
$

$
96,026
Segment adjusted EBITDA
$
1,372
$
55
$
4,178
$
(894
)
$
4,711
Impairment of goodwill
(59,047
)
Depreciation and amortization expense
(4,918
)
Interest expense
(2,844
)
Restructuring and cost reduction initiatives
(475
)
Loan amendment fees
(239
)
Fair value of warrants issued in connection with loan amendments
(122
)
Stock-based compensation
(111
)
Acquisition-related expenses
(50
)
Benefit from income taxes
1,297
Net loss
$
(61,798
)
Six Months Ended March 31, 2020
(in thousands)
Faneuil
Carpets
Phoenix
ALJ
Total
Net revenue
$
117,392
$
20,322
$
48,777
$

$
186,491
Segment adjusted EBITDA
$
3,025
$
(23
)
$
7,018
$
(1,949
)
$
8,071
Impairment of goodwill
(59,047
)
Depreciation and amortization expense
(10,160
)
Interest expense
(5,408
)
Restructuring and cost reduction initiatives
(790
)
Fair value of warrants issued in connection with loan amendments
(716
)
Loan amendment expenses
(414
)
Stock-based compensation
(223
)
Acquisition-related expenses
(99
)
Loss (gain) on disposal of assets and other gain, net
(2
)
Interest from legal settlement
200
Recovery of litigation loss
1,256
Benefit from income taxes
1,257
Net loss
$
(66,075
)
Three Months Ended March 31, 2019
( in thousands
Faneuil
Carpets
Phoenix
ALJ
Total
Net revenue
$
46,590
$
12,088
$
29,318
$

$
87,996
Segment adjusted EBITDA
$
2,793
$
272
$
6,335
$
(659
)
$
8,741
Depreciation and amortization expense
(4,837
)
Interest expense
(2,625
)
Restructuring and cost reduction initiatives
(332
)
Provision for income taxes
(202
)
Stock-based compensation
(186
)
Loan amendment fees
(136
)
Net income
$
423
Six Months Ended March 31, 2019
( in thousands
Faneuil
Carpets
Phoenix
ALJ
Total
Net revenue
$
101,792
$
24,450
$
55,538
$

$
181,780
Segment adjusted EBITDA
$
7,739
$
432
$
10,556
$
(1,380
)
$
17,347
Depreciation and amortization expense
(9,283
)
Interest expense
(5,340
)
Restructuring and cost reduction initiatives
(603
)
Provision for income taxes
(490
)
Stock-based compensation
(371
)
Loan amendment fees
(337
)
Acquisition-related expenses
(12
)
Loss (gain) on disposal of assets and other gain, net
223
Net income
$
1,134
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 Events6 Months Ended
Mar. 31, 2020
Subsequent Events [Abstract]
Subsequent Events14. SUBSEQUENT EVENTS Other than the Ninth Amendment as disclosed in Note 8 (see Ninth Amendment to the Financing Agreement) ,

Organization and Basis of Pre_2

Organization and Basis of Presentation (Policies)6 Months Ended
Mar. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
OrganizationOrganization ALJ Regional Holdings, Inc. (including subsidiaries, referred to collectively herein as “ALJ” or “Company”) is a holding company. As of March 31, 2020, 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 PresentationBasis 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 Statements of Operations for the three and six months ended March 31, 2019 have 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 table presents the impact of Faneuil’s reclassification on the Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2019:
Three Months Ended March 31, 2019
Six Months Ended March 31, 2019
( in thousands, except per share amounts
As Previously Reported
Revisions
As Revised
As Previously Reported
Revisions
As Revised
Net revenue
$
87,996
$

$
87,996
$
181,780
$

$
181,780
Costs and expenses:
Cost of revenue
67,739
918
68,657
140,566
2,737
143,303
Selling, general, and administrative expense
17,007
(918
)
16,089
34,473
(2,737
)
31,736
(Gain) loss on disposal of assets and other gain, net



(223
)

(223
)
Total operating expenses
84,746

84,746
174,816

174,816
Operating income
3,250

3,250
6,964

6,964
Other (expense) income:
Interest expense, net
(2,625
)

(2,625
)
(5,340
)

(5,340
)
Total other expense
(2,625
)

(2,625
)
(5,340
)

(5,340
)
Income before income taxes
625
625
1,624
1,624
Provision for income taxes
(202
)

(202
)
(490
)

(490
)
Net income
$
423
$

$
423
$
1,134
$

$
1,134
Basic earnings per share of common stock
$
0.01
$

$
0.01
$
0.03
$

$
0.03
Diluted earnings per share of common stock
$
0.01
$

$
0.01
$
0.03
$

$
0.03
Basic
38,026

38,026
38,037

38,037
Diluted
38,076

38,076
38,087

38,087
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.
Impact of Coronavirus PandemicImpact of Coronavirus Pandemic In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to spread throughout the U.S. COVID-19 is having an unprecedented impact on the U.S. economy as federal, state, and local governments react to this public health crisis. Currently, all of ALJ’s subsidiaries have been deemed “Essential Services” and have continued to operate with limited disruption, albeit with lower sales volume. As such, COVID-19 did not materially impact ALJ’s financial position, or results of operations and cash flows as of and for the three months ended March 31, 2020. However, the Company took immediate actions to enable working-from-home where possible and put in place increased safety precautions, including social distancing, at other locations where essential services on site are required. The duration of these measures is unknown, may be extended and additional measures may be imposed. Management expects that ALJ could be impacted in the near term by lower volumes in several parts of ALJ’s business, resulting in lower revenue and profit. While the impact of COVID-19 on the Company’s future financial position, results of operations and cash flows cannot be estimated with certainty, such impact could be significant if the global pandemic continues to adversely impact the U.S. economy for an extended period of time. The extent to which COVID-19 impacts ALJ’s operations will depend on future developments, which are highly uncertain, including, among others, the duration of the outbreak, if portions of the Company’s business segments are recharacterized as non-essential for which closure of some or all of the Company’s operations could be required, As of March 31, 2020, ALJ’s total available liquidity was $10.3 million, which included $7.2 million of unused borrowing capacity under the Company’s revolving credit facility. While the impact that COVID-19 may have on the Company’s financial position, results of operations, and cash flows in the future cannot be estimated with certainty, b As a result of the decline in ALJ’s actual and forecasted results of operations, including the estimated effects of COVID-19, ALJ sought an easement of certain financial covenants, as defined by the Financing Agreement, in order to maintain compliance, and the elimination of certain quarterly principal payment obligations. Accordingly, the Company obtained an easement by executing the Ninth Amendment to the Financing Agreement on May 12, 2020. See Ninth Amendment to the Financing Agreement” While the Company currently anticipates it will be able to maintain compliance with the terms and conditions of the Ninth Amendment to the Financing Agreement for at least the next 12 months, the ultimate magnitude and duration of the global pandemic is highly uncertain and, as such, will require ALJ to continually assess its current estimates of compliance for the foreseeable future. Accordingly, the Company’s anticipated compliance with its financial covenants may adversely change if the magnitude and duration of the global pandemic has a materially adverse effect on the Company in the future.

Organization and Basis of Pre_3

Organization and Basis of Presentation (Tables)6 Months Ended
Mar. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Impact of Faneuil's Reclassification on the Condensed Consolidated Statement of OperationsThe following table presents the impact of Faneuil’s reclassification on the Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2019:
Three Months Ended March 31, 2019
Six Months Ended March 31, 2019
( in thousands, except per share amounts
As Previously Reported
Revisions
As Revised
As Previously Reported
Revisions
As Revised
Net revenue
$
87,996
$

$
87,996
$
181,780
$

$
181,780
Costs and expenses:
Cost of revenue
67,739
918
68,657
140,566
2,737
143,303
Selling, general, and administrative expense
17,007
(918
)
16,089
34,473
(2,737
)
31,736
(Gain) loss on disposal of assets and other gain, net



(223
)

(223
)
Total operating expenses
84,746

84,746
174,816

174,816
Operating income
3,250

3,250
6,964

6,964
Other (expense) income:
Interest expense, net
(2,625
)

(2,625
)
(5,340
)

(5,340
)
Total other expense
(2,625
)

(2,625
)
(5,340
)

(5,340
)
Income before income taxes
625
625
1,624
1,624
Provision for income taxes
(202
)

(202
)
(490
)

(490
)
Net income
$
423
$

$
423
$
1,134
$

$
1,134
Basic earnings per share of common stock
$
0.01
$

$
0.01
$
0.03
$

$
0.03
Diluted earnings per share of common stock
$
0.01
$

$
0.01
$
0.03
$

$
0.03
Basic
38,026

38,026
38,037

38,037
Diluted
38,076

38,076
38,087

38,087

Recent Accounting Standards (Ta

Recent Accounting Standards (Tables)6 Months Ended
Mar. 31, 2020
Accounting Changes And Error Corrections [Abstract]
Effect of Changes due to Accounting PronouncementBased 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 StatementsThe following table summarizes the pre-tax impacts of adopting the new revenue accounting guidance on ALJ’s Consolidated Balance Sheet as of March 31, 2020:
As of March 31, 2020
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
$
15,221
$
(1,446
)
$
104
$
(306
)
$
(1,648
)
$
13,573
Inventories, net
7,259

(45
)
248
203
7,462
Liabilities
Accrued expenses
17,621

21

21
17,642
Deferred revenue and customer deposits
7,007
37


37
7,044
Stockholders’ equity
Accumulated deficit
(269,961
)
(1,483
)
38
(58
)
(1,503
)
(271,464
) The following tables summarize the pre-tax impacts of adopting the new revenue accounting guidance on ALJ’s Statements of Operation for the three and six months ended March 31, 2020:
Three Months Ended March 31, 2020
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
$
96,026
$
(293
)
$
112
$
469
$
288
$
96,314
Cost of revenue
78,763
534
65
280
879
79,642
Net loss
(61,798
)
(827
)
47
189
(591
)
(62,389
)
Loss per share of common stock–basic and diluted
(1.47
)
(0.02
)
0.00
0.00
(0.01
)
(1.48
)
Six Months Ended March 31, 2020
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
$
186,491
$
(647
)
$
165
$
(365
)
$
(847
)
$
185,644
Cost of revenue
154,489
1,441
97
(465
)
1,073
155,562
Net loss
(66,075
)
(2,088
)
68
100
(1,920
)
(67,995
)
Loss per share of common stock–basic and diluted
(1.57
)
(0.05
)
0.00
0.00
(0.05
)
(1.61
)

Revenue recognition (Tables)

Revenue recognition (Tables)6 Months Ended
Mar. 31, 2020
Revenue Recognition [Abstract]
Contract with Customer Asset and LiabilitiesThe following table provides information about consolidated contract assets and contract liabilities at March 31, 2020 and October 1, 2019:
( in thousands
March 31, 2020
October 1, 2019
Contract assets:
Unbilled revenue (1)
$
1,483
$
825
Total contract assets
$
1,483
$
825
Contract liabilities
Deferred revenue
$
6,374
$
1,838
Accrued rebates and material rights (2)
2,191
2,612
Accrued contract losses (3)
9
15
Total contract liabilities
$
8,574
$
4,465
(1)
Included in prepaid expenses and other current assets. Unbilled revenue represents rights to consideration for services provided when the right is conditioned on something other than passage of time (for example, meeting a milestone for the right to bill under the cost-to-cost measure of progress). Unbilled revenue is transferred to accounts receivable when the rights become unconditional.
(2)
At March 31, 2020, the balance is included in accrued expenses. At October 1, 2019, of the total balance, $0.5 million is included in other non-current liabilities and $2.1 million is included in accrued expenses.
(3)
Included in accrued expenses. The following table provides changes in consolidated contract assets and contract liabilities during the six months ended March 31, 2020:
( in thousands
Contract Assets
Contract Liabilities
Balance, beginning of period (October 1, 2019)
$
825
$
4,465
Additions to contract assets
2,775

Transfer from contract assets to accounts receivable
(2,117
)

Revenue recognized

(4,819
)
Change in loss accrual

(6
)
Accrued rebates

1,403
Payment of rebates

(1,825
)
Cash received from customer

9,356
Balance, end of period
$
1,483
$
8,574
Disaggregation of RevenueRevenue by contract type was as follows for the three and six months ended March 31, 2020:
( in thousands
Three Months Ended March 31, 2020
Six Months Ended March 31, 2020
Faneuil:
Healthcare
$
23,988
$
49,355
Transportation
18,368
35,496
Utility
13,490
27,417
Other
2,398
3,494
Government
581
1,630
Total Faneuil
$
58,825
$
117,392
Carpets
Builder
$
7,682
$
14,641
Commercial
1,777
3,405
Retail
1,089
2,276
Total Carpets
$
10,548
$
20,322
Phoenix:
Publisher
MSA
$
19,569
$
31,999
Non-MSA
4,222
10,782
Commercial
MSA
380
1,185
Non-MSA
2,482
4,811
Total Phoenix
$
26,653
$
48,777
Total consolidated revenue, net
$
96,026
$
186,491

Acquisitions (Tables)

Acquisitions (Tables)6 Months Ended
Mar. 31, 2020
Business Combinations [Abstract]
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed on Business Purchase Date and Purchase Price DetailsThe 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 (1)
2,675
Total assets
7,439
Accrued expenses
(39
)
Fair value of deferred and contingent consideration – current (2)
(2,100
)
Fair value of deferred and contingent consideration – non-current (3)
(2,800
)
Cash paid at closing
$
2,500
(1)
Goodwill was tested for impairment as of March 31, 2020. As a result of the interim test, ALJ recognized a non-cash impairment of goodwill, which included $2.7 million related to the RDI Acquisition. See Footnote 6.
(2)
Included in accrued expenses on the Consolidated Balance Sheet at March 31, 2020. There was no change in the fair value from the RDI Purchase Date to March 31, 2020.
(3)
Included in other non-current liabilities on the Consolidated Balance Sheet at March 31, 2020. There was no change in the fair value from the RDI Purchase Date to March 31, 2020.

Concentration Risks (Tables)

Concentration Risks (Tables)6 Months Ended
Mar. 31, 2020
Sales Revenue, Segment [Member] | Faneuil [Member]
Schedule of Concentration Percentage of Different CustomersFaneuil
Three Months Ended March 31,
Six Months Ended March 31,
2020
2019
2020
2019
Customer A
10.9
%
14.6
%
11.3
%
13.7
%
Customer B
10.1
10.8
12.9
13.8
Customer C
**
11.0
**
10.3
**
Less than 10% of Faneuil net revenue.
Sales Revenue, Segment [Member] | Carpets [Member]
Schedule of Concentration Percentage of Different CustomersCarpets
Three Months Ended March 31,
Six Months Ended March 31,
2020
2019
2020
2019
Customer A
27.1
%
31.5
%
27.0
%
30.4
%
Customer B
21.8
25.5
22.7
26.5
Customer C
19.7
22.9
17.9
21.1
Customer D
10.2
**
**
**
Sales Revenue, Segment [Member] | Phoenix [Member]
Schedule of Concentration Percentage of Different CustomersPhoenix
Three Months Ended March 31,
Six Months Ended March 31,
2020
2019
2020
2019
Customer A
28.2
%
23.0
%
26.7
%
21.1
%
Customer B
16.6
20.5
16.6
19.2
Customer C
11.7
10.9
11.9
11.6
Customer D
**
**
**
10.5
**
Less than 10% of Phoenix net revenue.
Inventory Purchases [Member] | Carpets [Member]
Schedule of Concentration Percentage of Different CustomersCarpets
Three Months Ended March 31,
Six Months Ended March 31,
2020
2019
2020
2019
Supplier A
20.8
%
17.2
%
20.2
%
15.6
%
Supplier B
18.4
21.6
17.7
22.9
Supplier C
**
15.6
**
16.0
Supplier D
**
**
**
10.5
**
Less than 10% of Carpets inventory purchases.
Inventory Purchases [Member] | Phoenix [Member]
Schedule of Concentration Percentage of Different CustomersPhoenix
Three Months Ended March 31,
Six Months Ended March 31,
2020
2019
2020
2019
Supplier A
18.8
%
25.6
%
17.8
%
25.9
%
Supplier B
11.7
**
14.4
%
**
**
Less than 10% of Phoenix inventory purchases.

Composition of Certain Financ_2

Composition of Certain Financial Statement Captions (Tables)6 Months Ended
Mar. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Summary of Accounts ReceivableThe following table summarizes accounts receivable at the end of each reporting period:
March 31,
September 30,
(in thousands)
2020
2019
Accounts receivable
$
50,329
$
41,251
Unbilled receivables
784
582
Accounts receivable
51,113
41,833
Less: allowance for doubtful accounts
(456
)
(126
)
Accounts receivable, net
$
50,657
$
41,707
Summary of InventoriesThe following table summarizes inventories at the end of each reporting period:
March 31,
September 30,
(in thousands)
2020
2019
Raw materials
$
4,081
$
3,837
Semi-finished goods/work in process
2,111
2,111
Finished goods
1,632
1,230
Inventories
7,824
7,178
Less: allowance for obsolete inventory
(565
)
(401
)
Inventories, net
$
7,259
$
6,777
Summary of Property and EquipmentThe following table summarizes property and equipment at the end of each reporting period:
March 31,
September 30,
(in thousands)
2020
2019
Leasehold improvements
$
31,829
$
31,370
Machinery and equipment
31,027
30,805
Building and improvements
17,403
17,403
Software
15,695
16,139
Computer and office equipment
14,979
13,273
Land
9,267
9,267
Furniture and fixtures
7,849
7,796
Construction and equipment in process
1,201
206
Vehicles
409
386
Property and equipment
129,659
126,645
Less: accumulated depreciation and amortization
(63,515
)
(56,775
)
Property and equipment, net
$
66,144
$
69,870
Schedule of Changes in Carrying Values of GoodwillChanges in the carrying value of goodwill by reportable segment were as follows:
(in thousands)
Faneuil
Carpets
Phoenix
Total
Balance, September 30, 2019
$
23,950
$
2,555
$
32,542
$
59,047
Impairment of goodwill
(23,950
)
(2,555
)
(32,542
)
(59,047
)
Balance, March 31, 2020
$

$

$

$
Summary of Intangible AssetsThe following tables summarizes identified intangible assets at the end of each reporting period:
March 31, 2020
(in thousands)
Weighted Average Original Life (Years)
Weighted Average Remaining Life (Years)
Gross
Accumulated Amortization
Net
Customer relationships
11.7
7.3
$
33,660
$
(14,444
)
$
19,216
Trade names
27.0
22.9
10,760
(2,219
)
8,541
Supply agreements
10.1
9.1
9,930
(3,657
)
6,273
Technology
8.0
7.3
3,400
(283
)
3,117
Non-compete agreements
11.8
6.0
1,820
(465
)
1,355
Totals
$
59,570
$
(21,068
)
$
38,502
September 30, 2019
(in thousands)
Weighted Average Original Life (Years)
Weighted Average Remaining Life (Years)
Gross
Accumulated Amortization
Net
Customer relationships
11.7
7.8
$
33,660
$
(13,039
)
$
20,621
Trade names
27.0
23.4
10,760
(2,004
)
8,756
Supply agreements
10.1
9.6
9,930
(3,002
)
6,928
Technology
8.0
7.8
3,400
(71
)
3,329
Non-compete agreements
11.8
6.5
1,820
(311
)
1,509
Internal-use software
6.0
0.1
580
(575
)
5
Totals
$
60,150
$
(19,002
)
$
41,148
Summary of Expected Future Amortization ExpenseThe 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
$
2,615
Fiscal 2021
4,982
Fiscal 2022
4,635
Fiscal 2023
4,635
Fiscal 2024
4,496
Thereafter
17,139
Total
$
38,502
Summary of Accrued ExpensesThe following table summarizes accrued expenses at the end of each reporting period:
March 31,
September 30,
(in thousands)
2020
2019
Accrued compensation and related taxes
$
8,708
$
8,041
Rebates payable
2,191
2,157
Acquisition contingent consideration
2,100
2,100
Deferred lease incentives
1,307
1,159
Medical and benefit-related payables
1,092
964
Other
938
342
Interest payable
751
723
Accrued board of director fees
327
109
Sales tax payable
112
111
Deferred rent
95
112
Call center buildouts

274
Total accrued expenses
$
17,621
$
16,092

(Loss) Earnings Per Share (Tabl

(Loss) Earnings Per Share (Tables)6 Months Ended
Mar. 31, 2020
Earnings Per Share [Abstract]
Summary of Basic and Diluted Loss Per Share of Common StockThe following table summarizes basic and diluted (loss) earnings per share of common stock for each period presented:
Three Months Ended March 31,
Six Months Ended March 31,
( in thousands, except per share amounts
2020
2019
2020
2019
Net (loss) income
$
(61,798
)
$
423
$
(66,075
)
$
1,134
Weighted average shares of common stock outstanding - basic
42,173
38,026
42,173
38,037
Potentially dilutive effect of options to purchase common stock

50

50
Weighted average shares of common stock outstanding – diluted
42,173
38,076
42,173
38,087
Basic (loss) earnings per share of common stock
$
(1.47
)
$
0.01
$
(1.57
)
$
0.03
Diluted (loss) earnings per share of common stock
$
(1.47
)
$
0.01
$
(1.57
)
$
0.03

Debt (Tables)

Debt (Tables)6 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]
Summary of Line of Credit, Term Loan and Equipment FinancingThe following table summarizes ALJ’s line of credit, term loan, and equipment financing at the end of each reporting period:
March 31,
September 30,
(in thousands)
2020
2019
Line of credit:
Line of credit
$
19,536
$
9,823
Less: deferred loan costs
(604
)
(451
)
Line of credit, net of deferred loan costs
$
18,932
$
9,372
Current portion of term loans:
Current portion of term loan
$
4,100
$
8,200
Current portion of equipment financing
1,333
1,336
Less: deferred loan costs
(394
)
(417
)
Current portion of term loans, net of deferred loan costs
$
5,039
$
9,119
Term loans, less current portion:
Term loan, less current portion
$
69,935
$
72,882
Term B Loan and in kind interest payable
4,153
$

Equipment financing, less current portion
1,180
1,765
Less: deferred loan costs
(842
)
(1,033
)
Term loans, less current portion, net of deferred loan costs
$
74,426
$
73,614
Summary of Leverage Ratio Threshold and The Fixed Charge Coverage Ratio
Adjusted the leverage ratio threshold and the fixed charge coverage ratio as follows:
Three Months Ending,
Adjusted Leverage Ratio
Adjusted Fixed Charge Ratio
March 31, 2020
7.25:1.00
0.65:1.00
June 30, 2020
7.45:1.00
0.63:1.00
September 30, 2020
6.85:1.00
0.61:1.00
December 31, 2020
5.75:1.00
0.70:1.00
March 31, 2021
5.00:1.00
0.75:1.00
June 30, 2021
4.00:1.00
0.82:1.00
September 30, 2021
3.75:1.00
0.81:1.00
December 31, 2021 through Maturity Date
3.50:1.00
1.00:1.00
Summary of Financing Agreement and AmendmentsThe Financing Agreement and amendments thereto are summarized below ( in thousands
Description
Use of Proceeds
Origination Date
Interest Rate *
Quarterly Payments**
Balance at March 31, 2020
Term Loan:
Financing Agreement
Phoenix acquisition
August 2015
8.25% to 8.80%
$
1,610
$
58,138
First Amendment
Color Optics acquisition
July 2016
8.25% to 8.80%
175
6,333
Third Amendment
Printing Components Business acquisition
October 2017
8.25% to 8.80%
151
5,434
Fourth Amendment
Working capital
November 2018
8.25% to 8.80%
114
4,130
Sixth Amendment (Term B loan)
N/A
December 2019
12.25% to 12.80%

4,153
Totals
$
2,050
$
78,188
Line of Credit:
Cerberus/PNC Revolver (includes Second, Fifth, Seventh, and Eighth Amendments)
Working capital
August 2015
10.50% to 10.75%
$

$
19,536
*
Range of annual interest rates accrued during the six months ended March 31, 2020.
* *
See “ Ninth Amendment to the Financing Agreement ” above for discussion of the elimination of the quarterly principal payment obligations for June 30, 2020 and September 30, 2020.
Schedule of Estimated Future Minimum Payments under DebtEstimated Future Minimum Principal Payments Estimated future minimum principal payments for the Cerberus Debt and Equipment Financing are as follows ( in thousands
Year Ending March 31,
Equipment Financing
Cerberus Debt
Total
2021
$
1,333
$
4,100
$
5,433
2022
1,180
2,050
3,230
2023

2,050
2,050
2023

2,050
2,050
2024*

87,474
87,474
Total
$
2,513
$
97,724
$
100,237
*
The majority of this amount is the final balloon payment due on the Maturity Date.
Schedule of Future Minimum Lease Payments under Non-Cancelable Capital LeasesAs of March 31, 2020, 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 March 31,
Estimated Future Payments
2021
$
3,337
2022
1,973
2023
1,571
2024
435
Total minimum required payments
7,316
Less: current portion of capital lease obligations
(3,154
)
Less: imputed interest
(333
)
Capital lease obligations, less current portion
$
3,829

Commitments and Contingencies (

Commitments and Contingencies (Tables)6 Months Ended
Mar. 31, 2020
Commitments And Contingencies Disclosure [Abstract]
Schedule of Future Minimum Rental Commitments under Noncancellable LeasesAs of March 31, 2020, future minimum rental commitments, net of sublease income, under non-cancellable leases were as follows ( in thousands
Year Ending March 31,
Future Minimum Lease Payments
2021
$
7,953
2022
7,242
2023
6,615
2024
6,412
2025
6,858
Thereafter
26,577
Total
$
61,657

Equity (Tables)

Equity (Tables)6 Months Ended
Mar. 31, 2020
Equity [Abstract]
Summary of Total Stock-Based Compensation Expense Included in Selling General and Administrative Expense on Statements of OperationsThe 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 March 31,
Six Months Ended March 31,
(in thousands)
2020
2019
2020
2019
Stock options
$
84
$
84
$
168
$
168
Common stock awards
27
102
55
203
Total stock-based compensation expense
$
111
$
186
$
223
$
371

Reportable Segments and Geogr_2

Reportable Segments and Geographic Information (Tables)6 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]
Summary of Segment InformationThe following tables present ALJ’s segment information for the three and six months ended March 31, 2020 and 2019:
Three Months Ended March 31, 2020
( in thousands
Faneuil
Carpets
Phoenix
ALJ
Total
Net revenue
$
58,825
$
10,548
$
26,653
$

$
96,026
Segment adjusted EBITDA
$
1,372
$
55
$
4,178
$
(894
)
$
4,711
Impairment of goodwill
(59,047
)
Depreciation and amortization expense
(4,918
)
Interest expense
(2,844
)
Restructuring and cost reduction initiatives
(475
)
Loan amendment fees
(239
)
Fair value of warrants issued in connection with loan amendments
(122
)
Stock-based compensation
(111
)
Acquisition-related expenses
(50
)
Benefit from income taxes
1,297
Net loss
$
(61,798
)
Six Months Ended March 31, 2020
(in thousands)
Faneuil
Carpets
Phoenix
ALJ
Total
Net revenue
$
117,392
$
20,322
$
48,777
$

$
186,491
Segment adjusted EBITDA
$
3,025
$
(23
)
$
7,018
$
(1,949
)
$
8,071
Impairment of goodwill
(59,047
)
Depreciation and amortization expense
(10,160
)
Interest expense
(5,408
)
Restructuring and cost reduction initiatives
(790
)
Fair value of warrants issued in connection with loan amendments
(716
)
Loan amendment expenses
(414
)
Stock-based compensation
(223
)
Acquisition-related expenses
(99
)
Loss (gain) on disposal of assets and other gain, net
(2
)
Interest from legal settlement
200
Recovery of litigation loss
1,256
Benefit from income taxes
1,257
Net loss
$
(66,075
)
Three Months Ended March 31, 2019
( in thousands
Faneuil
Carpets
Phoenix
ALJ
Total
Net revenue
$
46,590
$
12,088
$
29,318
$

$
87,996
Segment adjusted EBITDA
$
2,793
$
272
$
6,335
$
(659
)
$
8,741
Depreciation and amortization expense
(4,837
)
Interest expense
(2,625
)
Restructuring and cost reduction initiatives
(332
)
Provision for income taxes
(202
)
Stock-based compensation
(186
)
Loan amendment fees
(136
)
Net income
$
423
Six Months Ended March 31, 2019
( in thousands
Faneuil
Carpets
Phoenix
ALJ
Total
Net revenue
$
101,792
$
24,450
$
55,538
$

$
181,780
Segment adjusted EBITDA
$
7,739
$
432
$
10,556
$
(1,380
)
$
17,347
Depreciation and amortization expense
(9,283
)
Interest expense
(5,340
)
Restructuring and cost reduction initiatives
(603
)
Provision for income taxes
(490
)
Stock-based compensation
(371
)
Loan amendment fees
(337
)
Acquisition-related expenses
(12
)
Loss (gain) on disposal of assets and other gain, net
223
Net income
$
1,134

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 Thousands3 Months Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2019Mar. 31, 2020Mar. 31, 2019
Net revenue $ 96,026 $ 87,996 $ 186,491 $ 181,780
Costs and expenses:
Cost of revenue78,763 68,657 154,489 143,303
Selling, general, and administrative expense18,467 16,089 35,077 31,736
Loss (gain) on disposal of assets and other gain, net2 (223)
Total operating expenses156,277 84,746 248,615 174,816
Operating (loss) income(60,251)3,250 (62,124)6,964
Other (expense) income:
Interest expense, net(2,844)(2,625)(5,408)(5,340)
Total other expense, net(2,844)(2,625)(5,208)(5,340)
(Loss) income before income taxes(63,095)625 (67,332)1,624
Benefit from (provision for) income taxes1,297 (202)1,257 (490)
Net (loss) income $ (61,798) $ 423 $ (66,075) $ 1,134
Basic (loss) earnings per share of common stock $ (1.47) $ 0.01 $ (1.57) $ 0.03
Diluted (loss) earnings per share of common stock $ (1.47) $ 0.01 $ (1.57) $ 0.03
Basic42,173 38,026 42,173 38,037
Diluted42,173 38,076 42,173 38,087
As Previously Reported [Member]
Net revenue $ 87,996 $ 181,780
Costs and expenses:
Cost of revenue67,739 140,566
Selling, general, and administrative expense17,007 34,473
Loss (gain) on disposal of assets and other gain, net(223)
Total operating expenses84,746 174,816
Operating (loss) income3,250 6,964
Other (expense) income:
Interest expense, net(2,625)(5,340)
Total other expense, net(2,625)(5,340)
(Loss) income before income taxes625 1,624
Benefit from (provision for) income taxes(202)(490)
Net (loss) income $ 423 $ 1,134
Basic (loss) earnings per share of common stock $ 0.01 $ 0.03
Diluted (loss) earnings per share of common stock $ 0.01 $ 0.03
Basic38,026 38,037
Diluted38,076 38,087
Revisions [Member]
Costs and expenses:
Cost of revenue $ 918 $ 2,737
Selling, general, and administrative expense $ (918) $ (2,737)

Organization and Basis of Pre_5

Organization and Basis of Presentation - Additional Information (Details) $ in MillionsMar. 31, 2020USD ($)
Line Of Credit Facility [Line Items]
Total available liquidity $ 10.3
Revolving Credit Facility [Member]
Line Of Credit Facility [Line Items]
Unused borrowing capacity $ 7.2

Recent Accounting Standards - E

Recent Accounting Standards - Effect of Changes due to Accounting Pronouncement (Detail) - USD ($) $ in ThousandsMar. 31, 2020Oct. 01, 2019Sep. 30, 2019
ASSETS
Prepaid expenses and other current assets $ 15,221 $ 6,392 $ 5,515
Inventories, net7,259 6,579 6,777
Current liabilities:
Accrued expenses17,621 16,078 16,092
Deferred revenue and customer deposits7,007 2,137 1,965
Stockholders’ equity:
Accumulated deficit(269,961)(203,886)(204,407)
As Previously Reported [Member]
ASSETS
Prepaid expenses and other current assets5,515
Inventories, net6,777
Current liabilities:
Accrued expenses16,092
Deferred revenue and customer deposits1,965
Stockholders’ equity:
Accumulated deficit $ (204,407)
ASC 606 [Member] | Revisions [Member]
ASSETS
Prepaid expenses and other current assets(1,648)877
Inventories, net203 (198)
Current liabilities:
Accrued expenses21 (14)
Deferred revenue and customer deposits37 172
Stockholders’ equity:
Accumulated deficit(1,503)521
ASC 606 [Member] | Revisions [Member] | Faneuil Inc. [Member]
ASSETS
Prepaid expenses and other current assets(1,446)777
Current liabilities:
Deferred revenue and customer deposits37 172
Stockholders’ equity:
Accumulated deficit(1,483)605
ASC 606 [Member] | Revisions [Member] | Carpets Inc [Member]
ASSETS
Prepaid expenses and other current assets104 (61)
Inventories, net(45)19
Current liabilities:
Accrued expenses21 (12)
Stockholders’ equity:
Accumulated deficit38 (30)
ASC 606 [Member] | Revisions [Member] | Phoenix Inc [Member]
ASSETS
Prepaid expenses and other current assets(306)161
Inventories, net248 (217)
Current liabilities:
Accrued expenses(2)
Stockholders’ equity:
Accumulated deficit $ (58) $ (54)

Recent Accounting Standards - A

Recent Accounting Standards - Additional Information (Detail) - ASC 606 [Member] $ in MillionsOct. 01, 2019USD ($)
Increase in total assets $ 0.7
Increase in total liabilities0.2
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 ThousandsMar. 31, 2020Oct. 01, 2019Sep. 30, 2019
ASSETS
Prepaid expenses and other current assets $ 15,221 $ 6,392 $ 5,515
Inventories, net7,259 6,579 6,777
Current liabilities:
Accrued expenses17,621 16,078 16,092
Deferred revenue and customer deposits7,007 2,137 1,965
Stockholders’ equity:
Accumulated deficit(269,961)(203,886) $ (204,407)
As if Previous Standard was in Effect [Member]
ASSETS
Prepaid expenses and other current assets13,573
Inventories, net7,462
Current liabilities:
Accrued expenses17,642
Deferred revenue and customer deposits7,044
Stockholders’ equity:
Accumulated deficit(271,464)
ASC 606 [Member] | Revisions [Member]
ASSETS
Prepaid expenses and other current assets(1,648)877
Inventories, net203 (198)
Current liabilities:
Accrued expenses21 (14)
Deferred revenue and customer deposits37 172
Stockholders’ equity:
Accumulated deficit(1,503)521
ASC 606 [Member] | Revisions [Member] | Faneuil Inc. [Member]
ASSETS
Prepaid expenses and other current assets(1,446)777
Current liabilities:
Deferred revenue and customer deposits37 172
Stockholders’ equity:
Accumulated deficit(1,483)605
ASC 606 [Member] | Revisions [Member] | Carpets Inc [Member]
ASSETS
Prepaid expenses and other current assets104 (61)
Inventories, net(45)19
Current liabilities:
Accrued expenses21 (12)
Stockholders’ equity:
Accumulated deficit38 (30)
ASC 606 [Member] | Revisions [Member] | Phoenix Inc [Member]
ASSETS
Prepaid expenses and other current assets(306)161
Inventories, net248 (217)
Current liabilities:
Accrued expenses(2)
Stockholders’ equity:
Accumulated deficit $ (58) $ (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 Thousands3 Months Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2019Mar. 31, 2020Mar. 31, 2019
Net revenue $ 96,026 $ 87,996 $ 186,491 $ 181,780
Cost of revenue78,763 68,657 154,489 143,303
Net (loss) income $ (61,798)423 $ (66,075)1,134
Loss per share of common stock–basic and diluted $ (1.47) $ (1.57)
As if Previous Standard was in Effect [Member]
Net revenue $ 96,314 $ 185,644
Cost of revenue79,642 155,562
Net (loss) income $ (62,389) $ (67,995)
Loss per share of common stock–basic and diluted $ (1.48) $ (1.61)
Revisions [Member]
Cost of revenue $ 918 $ 2,737
ASC 606 [Member]
Net revenue $ 288 $ (847)
Cost of revenue879 1,073
Net (loss) income $ (591) $ (1,920)
Loss per share of common stock–basic and diluted $ (0.01) $ (0.05)
ASC 606 [Member] | Revisions [Member] | Faneuil Inc. [Member]
Net revenue $ (293) $ (647)
Cost of revenue534 1,441
Net (loss) income $ (827) $ (2,088)
Loss per share of common stock–basic and diluted $ (0.02) $ (0.05)
ASC 606 [Member] | Revisions [Member] | Carpets Inc [Member]
Net revenue $ 112 $ 165
Cost of revenue65 97
Net (loss) income $ 47 $ 68
Loss per share of common stock–basic and diluted $ 0 $ 0
ASC 606 [Member] | Revisions [Member] | Phoenix Inc [Member]
Net revenue $ 469 $ (365)
Cost of revenue280 (465)
Net (loss) income $ 189 $ 100
Loss per share of common stock–basic and diluted $ 0 $ 0

Revenue Recognition - Summary o

Revenue Recognition - Summary of Contract Assets and Contract Liabilities (Details) - USD ($) $ in ThousandsMar. 31, 2020Oct. 01, 2019
Contract assets:
Unbilled revenue[1] $ 1,483 $ 825
Total contract assets1,483 825
Contract liabilities
Deferred revenue6,374 1,838
Accrued rebates and material rights[2]2,191 2,612
Accrued contract losses[3]9 15
Total contract liabilities $ 8,574 $ 4,465
[1]Included in prepaid expenses and other current assets. Unbilled revenue represents rights to consideration for services provided when the right is conditioned on something other than passage of time (for example, meeting a milestone for the right to bill under the cost-to-cost measure of progress). Unbilled revenue is transferred to accounts receivable when the rights become unconditional.
[2]At March 31, 2020, the balance is included in accrued expenses. At October 1, 2019, of the total balance, $0.5 million is included in other non-current liabilities and $2.1 million is included in accrued expenses
[3]Included in accrued expenses.

Revenue Recognition - Summary_2

Revenue Recognition - Summary of Contract Assets and Contract Liabilities (Parenthetical) (Details) - USD ($) $ in ThousandsMar. 31, 2020Oct. 01, 2019Sep. 30, 2019
Contract with Customer, Liability, Noncurrent $ 8,574 $ 4,465
Other Non-current Liabilities [Member]
Contract with Customer, Liability, Noncurrent $ 500
Accrued Expenses [Member]
Contract with Customer, Liability, Noncurrent $ 2,100

Revenue Recognition - Summary_3

Revenue Recognition - Summary of Change in Contract Assets and Contract Liabilities (Details) $ in Thousands6 Months Ended
Mar. 31, 2020USD ($)
Revenue Recognition And Deferred Revenue [Abstract]
Beginning balance $ 825
Additions to contract assets2,775
Transfer from contract assets to accounts receivable(2,117)
Ending balance1,483
Beginning balance4,465
Revenue recognized(4,819)
Change in loss accrual(6)
Accrued rebates1,403
Payment of rebates(1,825)
Cash received from customer9,356
Ending balance $ 8,574

Revenue Recognition - Disaggreg

Revenue Recognition - Disaggregation of revenue (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2019Mar. 31, 2020Mar. 31, 2019
Disaggregation Of Revenue [Line Items]
Net revenue $ 96,026 $ 87,996 $ 186,491 $ 181,780
Publisher in Phoenix [Member] | Master Service Agreement [Member]
Disaggregation Of Revenue [Line Items]
Healthcare19,569 31,999
Publisher in Phoenix [Member] | Non-MSA [Member]
Disaggregation Of Revenue [Line Items]
Healthcare4,222 10,782
Commercial in Phoenix [Member]
Disaggregation Of Revenue [Line Items]
Healthcare26,653 48,777
Commercial in Phoenix [Member] | Master Service Agreement [Member]
Disaggregation Of Revenue [Line Items]
Healthcare380 1,185
Commercial in Phoenix [Member] | Non-MSA [Member]
Disaggregation Of Revenue [Line Items]
Healthcare2,482 4,811
Carpets [Member]
Disaggregation Of Revenue [Line Items]
Healthcare10,548 20,322
Carpets [Member] | Builders [Member]
Disaggregation Of Revenue [Line Items]
Healthcare7,682 14,641
Carpets [Member] | Commercial [Member]
Disaggregation Of Revenue [Line Items]
Healthcare1,777 3,405
Carpets [Member] | Retail [Member]
Disaggregation Of Revenue [Line Items]
Healthcare1,089 2,276
Faneuil [Member]
Disaggregation Of Revenue [Line Items]
Healthcare58,825 117,392
Faneuil [Member] | Transportion [Member]
Disaggregation Of Revenue [Line Items]
Healthcare18,368 35,496
Faneuil [Member] | Utility [Member]
Disaggregation Of Revenue [Line Items]
Healthcare13,490 27,417
Faneuil [Member] | Health Care [Member]
Disaggregation Of Revenue [Line Items]
Healthcare23,988 49,355
Faneuil [Member] | Government [Member]
Disaggregation Of Revenue [Line Items]
Healthcare581 1,630
Faneuil [Member] | Other [Member]
Disaggregation Of Revenue [Line Items]
Healthcare $ 2,398 $ 3,494

Revenue Recognition - Additiona

Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2020Mar. 31, 2019
Capitalized costs $ 300 $ 600
Capitalized Contract Cost, Amortization200 300
Amortization of deferred loan costs603 $ 398
Capitalized costs5,000 7,000
Transitiions activities6,800
Impairment Loss0 0
Selling, General and Administrative Expense [Member]
Amortization of deferred loan costs700
Prepaid Expenses [Member]
Amortization of deferred loan costs500
Transitiions activities6,000
Other Assets [Member]
Amortization of deferred loan costs200
Transitiions activities800
Transition Activities [Member]
Transitiions activities $ 500 $ 2,000

Acquisitions - Additional Infor

Acquisitions - Additional Information (Detail) - USD ($) $ in ThousandsJul. 31, 2019Mar. 31, 2020Mar. 31, 2020Mar. 31, 2019
Business Acquisition [Line Items]
Acquisition related costs $ 50 $ 99 $ 12
RDI Acquistion [Member]
Business Acquisition [Line Items]
Cash consideration for RDI acquisition $ 2,500
Contingent earn out consideration $ 7,500
Contingent earn-out consideration payment period3 years
Contingent guaranteed payout consideration $ 2,500
Impairment of goodwill $ 2,700
RDI Acquistion [Member] | Selling, General and Administrative Expense [Member]
Business Acquisition [Line Items]
Acquisition related costs $ 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 ThousandsJul. 31, 2019Sep. 30, 2019
Identified intangible assets:
Goodwill $ 59,047
RDI Acquistion [Member]
Balance Sheet Caption
Total current assets $ 53
Fixed assets11
Identified intangible assets:
Goodwill[1]2,675
Total assets7,439
Accrued expenses(39)
Fair value of deferred and contingent consideration – current[2](2,100)
Fair value of deferred and contingent consideration – non-current[3](2,800)
Cash paid at closing2,500
RDI Acquistion [Member] | Technology [Member]
Identified intangible assets:
Technology3,400
RDI Acquistion [Member] | Non-compete Agreements [Member]
Identified intangible assets:
Technology $ 1,300
[1]Goodwill was tested for impairment as of March 31, 2020. As a result of the interim test, ALJ recognized a non-cash impairment of goodwill, which included $2.7 million related to the RDI Acquisition.
[2]Included in accrued expenses on the Consolidated Balance Sheet at March 31, 2020. There was no change in the fair value from the RDI Purchase Date to March 31, 2020.
[3]Included in other non-current liabilities on the Consolidated Balance Sheet at March 31, 2020. There was no change in the fair value from the RDI Purchase Date to March 31, 2020.

Concentration Risks - Additiona

Concentration Risks - Additional Information (Detail) $ in Millions3 Months Ended6 Months Ended
Mar. 31, 2020USD ($)CustomerSupplierMar. 31, 2019CustomerSupplierMar. 31, 2020USD ($)CustomerSegmentSupplierMar. 31, 2019CustomerSupplier
Faneuil [Member]
Concentration Risk [Line Items]
Accounts receivable $ 5.3 $ 5.3
Carpets [Member]
Concentration Risk [Line Items]
Accounts receivable2.5 2.5
Phoenix [Member]
Concentration Risk [Line Items]
Accounts receivable $ 4.1 $ 4.1
Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Concentration Risk [Line Items]
Number of customers that represent more than 10% of consolidated net revenue | Customer0 0 0 0
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Minimum [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.00%10.00%10.00%10.00%
Supplier Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage13.20%16.80%12.20%17.20%
Number of segments representing more than 10% supplier contribution | Segment2
Number of suppliers representing more than ten percent of consolidated purchases | Supplier1 1 1 1
Supplier Concentration Risk [Member] | Sales Revenue, Net [Member] | Maximum [Member] | Carpets [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.00%
Supplier Concentration Risk [Member] | Inventory Purchases [Member] | Minimum [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.00%
Supplier Concentration Risk [Member] | Inventory Purchases [Member] | Maximum [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.00%

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 Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2019Mar. 31, 2020Mar. 31, 2019
Customer A [Member] | Faneuil [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.90%14.60%11.30%13.70%
Customer A [Member] | Carpets [Member]
Concentration Risk [Line Items]
Concentration risk, percentage27.10%31.50%27.00%30.40%
Customer A [Member] | Phoenix [Member]
Concentration Risk [Line Items]
Concentration risk, percentage28.20%23.00%26.70%21.10%
Customer B [Member] | Faneuil [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.10%10.80%12.90%13.80%
Customer B [Member] | Carpets [Member]
Concentration Risk [Line Items]
Concentration risk, percentage21.80%25.50%22.70%26.50%
Customer B [Member] | Phoenix [Member]
Concentration Risk [Line Items]
Concentration risk, percentage16.60%20.50%16.60%19.20%
Customer C [Member] | Faneuil [Member]
Concentration Risk [Line Items]
Concentration risk, percentage11.00%10.30%
Customer C [Member] | Carpets [Member]
Concentration Risk [Line Items]
Concentration risk, percentage19.70%22.90%17.90%21.10%
Customer C [Member] | Phoenix [Member]
Concentration Risk [Line Items]
Concentration risk, percentage11.70%10.90%11.90%11.60%
Customer D [Member] | Carpets [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.20%
Customer D [Member] | Phoenix [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.50%

Concentration Risks - Major C_2

Concentration Risks - Major Customers and Accounts Receivable - Schedule of Concentration Percentage of Different Customers (Parenthetical) (Detail) - Maximum [Member] - Sales Revenue, Segment [Member] - Customer Concentration Risk [Member]6 Months Ended
Mar. 31, 2020
Faneuil [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.00%
Carpets [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.00%
Phoenix [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.00%

Concentration Risks - Supplier

Concentration Risks - Supplier Risk - Schedule of Concentration Percentage of Different Customers (Detail) - Supplier Concentration Risk [Member]3 Months Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2019Mar. 31, 2020Mar. 31, 2019
Concentration Risk [Line Items]
Concentration risk, percentage13.20%16.80%12.20%17.20%
Supplier A [Member] | Phoenix [Member]
Concentration Risk [Line Items]
Concentration risk, percentage18.80%25.60%17.80%25.90%
Supplier A [Member] | Inventory Purchases [Member] | Carpets [Member]
Concentration Risk [Line Items]
Concentration risk, percentage20.80%17.20%20.20%15.60%
Supplier B [Member] | Phoenix [Member]
Concentration Risk [Line Items]
Concentration risk, percentage11.70%14.40%
Supplier B [Member] | Inventory Purchases [Member] | Carpets [Member]
Concentration Risk [Line Items]
Concentration risk, percentage18.40%21.60%17.70%22.90%
Supplier C [Member] | Inventory Purchases [Member] | Carpets [Member]
Concentration Risk [Line Items]
Concentration risk, percentage15.60%16.00%
Supplier D [Member] | Inventory Purchases [Member] | Carpets [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.50%

Concentration Risks - Supplie_2

Concentration Risks - Supplier Risk - Schedule of Concentration Percentage of Different Customers (Parenthetical) (Detail) - Supplier Concentration Risk [Member]3 Months Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2019Mar. 31, 2020Mar. 31, 2019
Concentration Risk [Line Items]
Concentration risk, percentage13.20%16.80%12.20%17.20%
Maximum [Member] | Sales Revenue, Net [Member] | Carpets [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.00%
Maximum [Member] | Inventory Purchases [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.00%
Minimum [Member] | Inventory Purchases [Member]
Concentration Risk [Line Items]
Concentration risk, percentage10.00%

Composition of Certain Financ_3

Composition of Certain Financial Statement Captions - Summary of Accounts Receivable (Detail) - USD ($) $ in ThousandsMar. 31, 2020Sep. 30, 2019
Accounts Receivable Net Current [Abstract]
Accounts receivable $ 50,329 $ 41,251
Unbilled receivables784 582
Accounts receivable51,113 41,833
Less: allowance for doubtful accounts(456)(126)
Accounts receivable, net $ 50,657 $ 41,707

Composition of Certain Financ_4

Composition of Certain Financial Statement Captions - Summary of Inventories (Detail) - USD ($) $ in ThousandsMar. 31, 2020Oct. 01, 2019Sep. 30, 2019
Inventory Disclosure [Abstract]
Raw materials $ 4,081 $ 3,837
Semi-finished goods/work in process2,111 2,111
Finished goods1,632 1,230
Inventories7,824 7,178
Less: allowance for obsolete inventory(565)(401)
Inventories, net $ 7,259 $ 6,579 $ 6,777

Composition of Certain Financ_5

Composition of Certain Financial Statement Captions - Summary of Property and Equipment (Detail) - USD ($) $ in ThousandsMar. 31, 2020Sep. 30, 2019
Property, Plant and Equipment [Line Items]
Property and equipment, gross $ 129,659 $ 126,645
Less: accumulated depreciation and amortization(63,515)(56,775)
Property and equipment, net66,144 69,870
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross31,829 31,370
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross31,027 30,805
Building and Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross17,403 17,403
Software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross15,695 16,139
Computer and Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross14,979 13,273
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross9,267 9,267
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross7,849 7,796
Construction and Equipment In Process [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross1,201 206
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross $ 409 $ 386

Composition of Certain Financ_6

Composition of Certain Financial Statement Captions - Additional Information (Detail)3 Months Ended6 Months Ended
Mar. 31, 2020USD ($)Mar. 31, 2019USD ($)Mar. 31, 2020USD ($)UnitMar. 31, 2019USD ($)
Condensed Financial Statements, Captions [Line Items]
Depreciation and amortization expense including capital leased assets $ 3,600,000 $ 3,500,000 $ 7,500,000 $ 6,600,000
Number of Reporting Units | Unit3
Impairment of goodwill59,047,000 $ 59,047,000
Intangible asset amortization expense1,300,000 $ 1,300,000 2,600,000 $ 2,600,000
Faneuil [Member] | Workers' Compensation Claims [Member] | Maximum [Member]
Condensed Financial Statements, Captions [Line Items]
Self-insured amount500,000 500,000
Carpets [Member] | Workers' Compensation Claims [Member] | Maximum [Member]
Condensed Financial Statements, Captions [Line Items]
Self-insured amount $ 200,000 $ 200,000

Composition of Certain Financ_7

Composition of Certain Financial Statement Captions - Schedule of Changes in Carrying Values of Goodwill (Detail) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2020
Goodwill [Line Items]
Beginning balance $ 59,047
Impairment of goodwill $ (59,047)(59,047)
Faneuil Inc. [Member]
Goodwill [Line Items]
Beginning balance23,950
Impairment of goodwill(23,950)
Carpets Inc [Member]
Goodwill [Line Items]
Beginning balance2,555
Impairment of goodwill(2,555)
Phoenix Inc [Member]
Goodwill [Line Items]
Beginning balance32,542
Impairment of goodwill $ (32,542)

Composition of Certain Financ_8

Composition of Certain Financial Statement Captions - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands6 Months Ended12 Months Ended
Mar. 31, 2020Sep. 30, 2019
Finite-Lived Intangible Assets [Line Items]
Gross $ 59,570 $ 60,150
Accumulated Amortization(21,068)(19,002)
Net $ 38,502 $ 41,148
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Original Life (Years)11 years 8 months 12 days11 years 8 months 12 days
Weighted Average Remaining Life (Years)7 years 3 months 18 days7 years 9 months 18 days
Gross $ 33,660 $ 33,660
Accumulated Amortization(14,444)(13,039)
Net $ 19,216 $ 20,621
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Original Life (Years)27 years27 years
Weighted Average Remaining Life (Years)22 years 10 months 24 days23 years 4 months 24 days
Gross $ 10,760 $ 10,760
Accumulated Amortization(2,219)(2,004)
Net $ 8,541 $ 8,756
Supply Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Original Life (Years)10 years 1 month 6 days10 years 1 month 6 days
Weighted Average Remaining Life (Years)9 years 1 month 6 days9 years 7 months 6 days
Gross $ 9,930 $ 9,930
Accumulated Amortization(3,657)(3,002)
Net $ 6,273 $ 6,928
Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Original Life (Years)8 years8 years
Weighted Average Remaining Life (Years)7 years 3 months 18 days7 years 9 months 18 days
Gross $ 3,400 $ 3,400
Accumulated Amortization(283)(71)
Net $ 3,117 $ 3,329
Non-compete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Original Life (Years)11 years 9 months 18 days11 years 9 months 18 days
Weighted Average Remaining Life (Years)6 years6 years 6 months
Gross $ 1,820 $ 1,820
Accumulated Amortization(465)(311)
Net $ 1,355 $ 1,509
Internal-use Software [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Original Life (Years)6 years
Weighted Average Remaining Life (Years)1 month 6 days
Gross $ 580
Accumulated Amortization(575)
Net $ 5

Composition of Certain Financ_9

Composition of Certain Financial Statement Captions - Summary of Expected Future Amortization Expense (Detail) - USD ($) $ in ThousandsMar. 31, 2020Sep. 30, 2019
Finite Lived Intangible Assets Future Amortization Expense [Abstract]
Remainder of Fiscal 2020 $ 2,615
Fiscal 20214,982
Fiscal 20224,635
Fiscal 20234,635
Fiscal 20244,496
Thereafter17,139
Net $ 38,502 $ 41,148

Composition of Certain Finan_10

Composition of Certain Financial Statement Captions - Summary of Accrued Expenses (Detail) - USD ($) $ in ThousandsMar. 31, 2020Oct. 01, 2019Sep. 30, 2019
Accrued Liabilities Current [Abstract]
Accrued compensation and related taxes $ 8,708 $ 8,041
Rebates payable2,191 2,157
Acquisition contingent consideration2,100 2,100
Deferred lease incentives1,307 1,159
Medical and benefit-related payables1,092 964
Other938 342
Interest payable751 723
Accrued board of director fees327 109
Sales tax payable112 111
Deferred rent95 112
Call center buildouts274
Total accrued expenses $ 17,621 $ 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 Thousands3 Months Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2019Mar. 31, 2020Mar. 31, 2019
Earnings Per Share [Abstract]
Net (loss) income $ (61,798) $ 423 $ (66,075) $ 1,134
Weighted average shares of common stock outstanding - basic42,173 38,026 42,173 38,037
Potentially dilutive effect of options to purchase common stock50 50
Weighted average shares of common stock outstanding – diluted42,173 38,076 42,173 38,087
Basic (loss) earnings per share of common stock $ (1.47) $ 0.01 $ (1.57) $ 0.03
Diluted (loss) earnings per share of common stock $ (1.47) $ 0.01 $ (1.57) $ 0.03

(Loss) Earnings Per Share - Add

(Loss) Earnings Per Share - Additional Information (Detail) - shares shares in Millions3 Months Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2019Mar. 31, 2020Mar. 31, 2019
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 share4.6 1.5 4.6 1.5

Debt - Summary of Line of Credi

Debt - Summary of Line of Credit, Term Loan and Equipment Financing (Detail) - USD ($) $ in ThousandsMar. 31, 2020Sep. 30, 2019
Line of credit:
Line of credit $ 19,536 $ 9,823
Less: deferred loan costs(604)(451)
Line of credit, net of deferred loan costs18,932 9,372
Current portion of term loans:
Current portion of term loan4,100 8,200
Current portion of equipment financing1,333 1,336
Less: deferred loan costs(394)(417)
Current portion of term loans, net of deferred loan costs5,039 9,119
Term loans, less current portion:
Term loan, less current portion69,935 72,882
Equipment financing, less current portion1,180 1,765
Less: deferred loan costs(842)(1,033)
Term loans, less current portion, net of deferred loan costs74,426 $ 73,614
Term Loan B [Member]
Term loans, less current portion:
Term loan, less current portion $ 4,153

Debt - Additional Information (

Debt - Additional Information (Detail)May 13, 2020USD ($)May 12, 2020Apr. 01, 2020USD ($)Mar. 26, 2020USD ($)TradingDay$ / sharessharesFeb. 13, 2020Dec. 17, 2019USD ($)TradingDay$ / sharessharesDec. 31, 2018USD ($)Nov. 30, 2018USD ($)TradingDaysharesAug. 31, 2015USD ($)Mar. 31, 2022Dec. 31, 2021Sep. 30, 2021Jun. 30, 2021Mar. 31, 2021USD ($)Dec. 31, 2020USD ($)Sep. 30, 2020USD ($)Jun. 30, 2020USD ($)Mar. 31, 2020USD ($)Cost$ / sharesDec. 31, 2019USD ($)Mar. 31, 2019USD ($)Dec. 31, 2018USD ($)Mar. 31, 2020USD ($)Cost$ / sharesMar. 31, 2019USD ($)Mar. 16, 2020USD ($)Mar. 15, 2020USD ($)
Debt Instrument [Line Items]
Selling, general, and administrative expense $ 18,467,000 $ 16,089,000 $ 35,077,000 $ 31,736,000
Debt Instrument, DescriptionPursuant 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 $ 3.39
Fair value of warrants issued in connection with debt modification $ 122,000 $ 716,000
Additional interest earned4.00%
Number of contingent payment outstanding | Cost1 1
Financing Agreement [Member] | Minimum [Member] | LIBOR Rate [Member]
Debt Instrument [Line Items]
Interest Rate1.00%
Financing Agreement [Member] | Minimum [Member] | Prime Rate [Member]
Debt Instrument [Line Items]
Interest Rate3.25%
Financing Agreement [Member] | Maximum [Member] | LIBOR Rate [Member]
Debt Instrument [Line Items]
Interest Rate1.50%
Financing Agreement [Member] | Maximum [Member] | Prime Rate [Member]
Debt Instrument [Line Items]
Interest Rate4.75%
Equipment Financing [Member] | Phoenix [Member]
Debt Instrument [Line Items]
Agreement term36 months
Frequency of periodic paymentmonthly
Interest rate fixed percentage4.94%4.94%
Equipment Financing [Member] | Phoenix [Member] | Heidelberg Press [Member]
Debt Instrument [Line Items]
Payments to acquire equipment $ 4,100,000
Term Loan [Member]
Debt Instrument [Line Items]
Quarterly Payments $ 2,050,000
Term Loan B [Member]
Debt Instrument [Line Items]
Percentage of interest payable in kind100.00%
Percentage of interest earned in kind100.00%
Cerberus Term Loan [Member]
Debt Instrument [Line Items]
Selling, general, and administrative expense $ 2,500,000
Cerberus Term Loan [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Debt instrument face amount $ 105,000,000
Debt instrument maturity dateNov. 28,
2023
Selling, general, and administrative expense100,000 200,000 200,000
Annual principal payments as percentage of excess cash flow75.00%
Excess cash flow payment $ 0 $ 300,000
Mandatory payment900,000 400,000
Maximum payments against loan with no penalty7,000,000
Payment of debt instrument legal and other fees300,000 700,000 600,000
Deferred loan costs $ 200,000 $ 500,000
Deferred loan costs $ 400,000 $ 400,000
Cerberus Term Loan [Member] | Term Loan [Member] | Term Loan Repayment First Year Anniversary [Member]
Debt Instrument [Line Items]
Prepayment penalty percentage2.00%
Term loan agreement dateNov. 28,
2020
Cerberus Term Loan [Member] | Term Loan [Member] | Term Loan Repayment Second Year Anniversary [Member]
Debt Instrument [Line Items]
Prepayment penalty percentage1.00%
Term loan agreement dateNov. 28,
2021
Cerberus/PNC Revolver [Member] | LIBOR Rate [Member]
Debt Instrument [Line Items]
Interest Rate275.00%
Cerberus/PNC Revolver [Member] | Minimum [Member] | LIBOR Rate [Member]
Debt Instrument [Line Items]
Interest Rate675.00%
Cerberus/PNC Revolver [Member] | Maximum [Member] | LIBOR Rate [Member]
Debt Instrument [Line Items]
Interest Rate950.00%
Sixth Amendment [Member] | Financing Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, covenant descriptiona 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 ended December 31, 2019, (ii) 4.50:1.00 for the fiscal quarter ended 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 the fixed charge coverage ratio threshold from (a) 1.05:1.00 to (i) 0.85:1.00 for the fiscal quarters ended 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 for Prime rate loans from 3.25% to 4.75% per annum.
Additionally, the Sixth Amendment added a deleveraging fee (“Deleveraging Fee”), of which the first payment was made on March 31, 2020, and the second payment will become due on June 30, 2020 unless one or more persons purchases a $2.5 million participating interest in the Cerberus Term Loan prior to June 30, 2020. The first payment made on March 31, 2020 was expensed to selling, general, and administrative expense during the three months ended March 31, 2020.
Leverage ratio4.505.25
Sixth Amendment [Member] | Financing Agreement [Member] | Minimum [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio0.850.85
Sixth Amendment [Member] | Financing Agreement [Member] | Maximum [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio1.051.05
Sixth Amendment [Member] | Financing Agreement [Member] | Scenario Forecast [Member]
Debt Instrument [Line Items]
Leverage ratio3.253 3.253.253.503.503.75
Debt instrument threshold leverage ratio and thereafter3
Fixed charge coverage ratio1 0.95
Sixth Amendment [Member] | Financing Agreement [Member] | Scenario Forecast [Member] | Minimum [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio1.05
Sixth Amendment [Member] | Financing Agreement [Member] | Scenario Forecast [Member] | Maximum [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio1.10
Junior Participation Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, payment termsThe $5.6 million Term C Loan and the $5.0 million additional Term B Loan are junior and subordinate to the Cerberus Debt in all respects and have no quarterly payments.
Debt instrument, interest rate termsBeginning May 12, 2020, the $5.6 million Term C Loan accrues interest in kind at the same rate per annum as the Cerberus Term Loan, payable on the Maturity Date. Beginning December 31, 2020, the $5.0 million additional Term B Loan will accrue interest in kind at the same rate per annum as the Cerberus Term Loan plus 4.00% per annum, payable on the Maturity Date.
Junior Participation Agreement [Member] | Term Loan B [Member]
Debt Instrument [Line Items]
Debt instrument face amount $ 4,100,000
Junior Participation Agreement [Member] | Term Loan B [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Debt instrument face amount $ 5,000,000
Additional interest earned4.00%
Junior Participation Agreement [Member] | Term Loan B [Member] | Scenario Forecast [Member]
Debt Instrument [Line Items]
Debt instrument face amount $ 2,500,000 $ 2,500,000
Junior Participation Agreement [Member] | Term Loan B And Warrants [Member]
Debt Instrument [Line Items]
Debt instrument face amount $ 4,100,000
Interest Rate4.00%
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 | shares1,230,000
Warrants expiration period5 years
Debt instrument, convertible threshold trading days | TradingDay30
Number of vested warrants issued, price per share | $ / shares $ 1.20
Junior Participation Agreement [Member] | Term Loan C [Member]
Debt Instrument [Line Items]
Description of convertible debt instrumentThe $5.6 million Term C Loan is convertible, at the option of the Term C Loan Junior Participants, into shares of the Company’s common stock, at a conversion price equal to 120% of the trailing ten business day closing price of the Company’s common stock prior to the transaction date or the six-month anniversary thereof, whichever is lower.
Junior Participation Agreement [Member] | Term Loan C [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Debt instrument face amount $ 5,600,000
Debt instrument, convertible, threshold percentage of stock price trigger120.00%
Debt instrument, convertible threshold Period6 months
Seventh Amendment [Member] | Financing Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, covenant descriptionExtended the seasonal increase period, originally through February 14, 2020, to March 15, 2020, during which the available amount under the Cerberus/PNC Revolver was $32.5 million; and
Increased the available borrowing limit under the Cerberus/PNC Revolver from $25.0 million to $30.0 million for the period from March 16, 2020 to March 31, 2020.
Eighth Amendment [Member] | Financing Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, covenant descriptionRemoved the seasonal decreases in the Company’s revolving credit facility such that the amount available to borrow thereunder remains $32.5 million through the Maturity Date;
Adjusted quarterly principal payment obligations as follows: (i) March 31, 2020 – reduced the payment from $2.1 million to zero, (ii) June 30, 2020 – maintained the payment at $2.1 million, and (iii) September 30, 2020 and December 31, 2020 – increased the payments from $2.1 million to $3.1 million;
Adjusted payment terms on the interest payable on the Term B Loan, from a mixture of cash and payable in kind to 100% payable in kind, until Term A Loan is paid in full; and
Quarterly Payments $ 2,100,000
Quarterly payments renewed $ 0
Eighth Amendment [Member] | Financing Agreement [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Monthly fees related to credit facility $ 100,000
Eighth Amendment [Member] | Financing Agreement [Member] | Scenario Forecast [Member]
Debt Instrument [Line Items]
Quarterly Payments2,100,000 $ 2,100,000 $ 2,100,000
Quarterly payments renewed $ 3,100,000 $ 3,100,000
Prime Rate [Member] | LIBOR Rate [Member]
Debt Instrument [Line Items]
Interest Rate275.00%
Prime Rate [Member] | Minimum [Member] | LIBOR Rate [Member]
Debt Instrument [Line Items]
Interest Rate575.00%
Prime Rate [Member] | Maximum [Member] | LIBOR Rate [Member]
Debt Instrument [Line Items]
Interest Rate850.00%
Ninth Agreement [Member] | Financing Agreement [Member]
Debt Instrument [Line Items]
Leverage ratio7.25
Fixed charge coverage ratio0.65
Ninth Agreement [Member] | Financing Agreement [Member] | Scenario Forecast [Member]
Debt Instrument [Line Items]
Leverage ratio3.754 5 5.756.857.45
Debt instrument threshold leverage ratio and thereafter3.50
Fixed charge coverage ratio0.810.820.750.700.610.63
Quarterly Payments $ 3,100,000 $ 2,100,000
Ninth Agreement [Member] | Financing Agreement [Member] | Scenario Forecast [Member] | Minimum [Member]
Debt Instrument [Line Items]
Quarterly Payments $ 2,100,000
Ninth Agreement [Member] | Financing Agreement [Member] | Scenario Forecast [Member] | Maximum [Member]
Debt Instrument [Line Items]
Quarterly Payments $ 3,100,000
First Amendment To Junior Participation Agreement [Member]
Debt Instrument [Line Items]
Expected term5 years5 years
Expected volatility rate43.80%42.30%
Dividened rate0.00%0.00%
Risk-free interest rate0.50%1.70%
Fair value of warrants issued in connection with debt modification $ 100,000 $ 600,000
First Amendment To Junior Participation Agreement [Member] | Term Loan B And Warrants [Member]
Debt Instrument [Line Items]
Number of vested warrants issued, shares | shares400,000
Warrants expiration period5 years
Debt instrument, convertible threshold trading days | TradingDay10
Number of vested warrants issued, price per share | $ / shares $ 0.72
Cerberus Debt [Member]
Debt Instrument [Line Items]
Unused borrowing capacity7,200,000 7,200,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit facility maximum borrowing capacity $ 32,500,000
Unused borrowing capacity7,200,000 7,200,000
Revolving Credit Facility [Member] | Cerberus/PNC Revolver [Member]
Debt Instrument [Line Items]
Line of credit facility maximum borrowing capacity $ 32,500,000 $ 30,000,000 $ 30,000,000 $ 25,000,000 $ 32,500,000
Backstop Letter Agreement [Member]
Debt Instrument [Line Items]
Percentage of interest payable in kind100.00%
Backstop Letter Agreement [Member] | Fourth Amendment [Member]
Debt Instrument [Line Items]
Warrants expiration period5 years
Debt instrument, convertible threshold trading days | TradingDay30
One time backstop fee $ 100,000
Warrant to purchase common stock | shares1,500,000

Debt - Summary of Leverage Rati

Debt - Summary of Leverage Ratio Threshold and The Fixed Charge Coverage Ratio (Detail) - Ninth Agreement [Member] - Financing Agreement [Member]3 Months Ended
Dec. 31, 2021Sep. 30, 2021Jun. 30, 2021Mar. 31, 2021Dec. 31, 2020Sep. 30, 2020Jun. 30, 2020Mar. 31, 2020
Debt Instrument [Line Items]
Leverage ratio7.25
Fixed charge coverage ratio0.65
Scenario Forecast [Member]
Debt Instrument [Line Items]
Leverage ratio3.754 5 5.756.857.45
Debt instrument threshold leverage ratio and thereafter3.50
Fixed charge coverage ratio0.810.820.750.700.610.63
Adjusted FixedCharge Ratio1

Debt - Summary of Financing Agr

Debt - Summary of Financing Agreement and Amendments (Detail) $ in Thousands6 Months Ended
Mar. 31, 2020USD ($)
Line of Credit [Member] | Cerberus/PNC Revolver [Member]
Debt Instrument [Line Items]
Use of ProceedsWorking capital
Origination Date2015-08
Balance $ 19,536
Minimum [Member] | Line of Credit [Member] | Cerberus/PNC Revolver [Member]
Debt Instrument [Line Items]
Interest Rate10.50%
Maximum [Member] | Line of Credit [Member] | Cerberus/PNC Revolver [Member]
Debt Instrument [Line Items]
Interest Rate10.75%
Term Loan [Member]
Debt Instrument [Line Items]
Quarterly Payments $ 2,050
Balance $ 78,188
Term Loan [Member] | Financing Agreement [Member] | Phoenix Acquisition [Member]
Debt Instrument [Line Items]
Origination Date2015-08
Quarterly Payments $ 1,610
Balance $ 58,138
Term Loan [Member] | Financing Agreement [Member] | Minimum [Member] | Phoenix Acquisition [Member]
Debt Instrument [Line Items]
Interest Rate8.25%
Term Loan [Member] | Financing Agreement [Member] | Maximum [Member] | Phoenix Acquisition [Member]
Debt Instrument [Line Items]
Interest Rate8.80%
Term Loan [Member] | First Amendment [Member] | Color Optics Acquisition [Member]
Debt Instrument [Line Items]
Origination Date2016-07
Quarterly Payments $ 175
Balance $ 6,333
Term Loan [Member] | First Amendment [Member] | Minimum [Member] | Color Optics Acquisition [Member]
Debt Instrument [Line Items]
Interest Rate8.25%
Term Loan [Member] | First Amendment [Member] | Maximum [Member] | Color Optics Acquisition [Member]
Debt Instrument [Line Items]
Interest Rate8.80%
Term Loan [Member] | Third Amendment [Member] | Printing Components Business Acquisition [Member]
Debt Instrument [Line Items]
Origination Date2017-10
Quarterly Payments $ 151
Balance $ 5,434
Term Loan [Member] | Third Amendment [Member] | Minimum [Member] | Printing Components Business Acquisition [Member]
Debt Instrument [Line Items]
Interest Rate8.25%
Term Loan [Member] | Third Amendment [Member] | Maximum [Member] | Printing Components Business Acquisition [Member]
Debt Instrument [Line Items]
Interest Rate8.80%
Term Loan [Member] | Fourth Amendment [Member]
Debt Instrument [Line Items]
Origination Date2018-11
Quarterly Payments $ 114
Balance $ 4,130
Term Loan [Member] | Fourth Amendment [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest Rate8.25%
Term Loan [Member] | Fourth Amendment [Member] | Maximum [Member]
Debt Instrument [Line Items]
Interest Rate8.80%
Term Loan [Member] | Sixth Amendment [Member]
Debt Instrument [Line Items]
Origination Date2019-12
Balance $ 4,153
Term Loan [Member] | Sixth Amendment [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest Rate12.25%
Term Loan [Member] | Sixth Amendment [Member] | Maximum [Member]
Debt Instrument [Line Items]
Interest Rate12.80%

Debt - Schedule of Estimated Fu

Debt - Schedule of Estimated Future Minimum Principal Payments for Cerberus Debt and Equipment Financing (Detail) $ in ThousandsMar. 31, 2020USD ($)
Debt Instrument [Line Items]
2021 $ 5,433
20223,230
20232,050
20232,050
2024*87,474
Total estimated future minimum payments100,237
Cerberus Debt [Member]
Debt Instrument [Line Items]
20214,100
20222,050
20232,050
20232,050
2024*87,474
Total estimated future minimum payments97,724
Equipment Financing [Member]
Debt Instrument [Line Items]
20211,333
20221,180
Total estimated future minimum payments $ 2,513

Debt - Schedule of Future Minim

Debt - Schedule of Future Minimum Lease Payments under Non-Cancelable Capital Leases (Detail) - USD ($)Mar. 31, 2020Sep. 30, 2019
Capital Leases Future Minimum Payments Due Rolling Maturity [Abstract]
2021 $ 3,337,000
20221,973,000
20231,571,000
2024435,000
Total minimum required payments7,316,000
Less: current portion of capital lease obligations(3,154,000) $ (2,535,000)
Less: imputed interest(333,000)
Capital lease obligations, less current portion $ 3,829,000 $ 2,623,000

Commitments and Contingencies -

Commitments and Contingencies - Schedule of Future Minimum Rental Commitments under Noncancellable Leases (Detail) $ in ThousandsMar. 31, 2020USD ($)
Operating Leases Future Minimum Payments Due Rolling Maturity [Abstract]
2021 $ 7,953
20227,242
20236,615
20246,412
20256,858
Thereafter26,577
Total future minimum lease payments $ 61,657

Commitments and Contingencies_2

Commitments and Contingencies - Additional Information (Detail) - USD ($)May 15, 2018Oct. 14, 2016Dec. 31, 2019Mar. 31, 2020Sep. 22, 2016
Loss Contingencies [Line Items]
Non-cash litigation loss $ 1,256,000
Interest from legal settlement200,000
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 basisbreach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment.
Litigation settlement, amount of damages awarded0 $ 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 basisbreach of contract/indemnification, breach of the implied covenant of good faith and fair dealing, and unjust enrichment.
Damages payable3,200,000
Additional damages incurred $ 10,000,000
Litigation settlement, amount of damages awarded $ 0
Faneuil MSA [Member]
Loss Contingencies [Line Items]
Minimum outstanding commitment amount $ 9,700,000
Minimum outstanding commitment maturity dateMar. 23,
2021
Letters of Credit [Member]
Loss Contingencies [Line Items]
Line of credit amount outstanding $ 2,900,000
Surety Bonds [Member]
Loss Contingencies [Line Items]
Estimated maximum guarantee cash payments30,000,000
Employment Agreements [Member]
Loss Contingencies [Line Items]
Total contingent termination payments related to base salary $ 1,300,000

Equity - Additional Information

Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in ThousandsOct. 06, 2020Apr. 09, 2020Mar. 31, 2020Mar. 31, 2019Mar. 31, 2020Mar. 31, 2019
Class Of Stock [Line Items]
Disposal of assets and other (gain) loss, net $ (2) $ 223
Total unrecognized compensation cost related to unvested stock options $ 200 $ 200
Weighted-average recognition period of unrecognized compensation cost related to unvested stock options1 year
Stock option awards, granted0 0
Stock option awards, forfeitures0 20,000
Total intrinsic value of options vested outstanding100 $ 100
Stock-based compensation expense $ 111 $ 186 $ 223 $ 371
Stock options, outstanding1,700,000 1,700,000
Number of vested warrants issued, price per share $ 3.39 $ 3.39
Warrants exercisable to purchase outstanding2,900,000 2,900,000
Weighted average exercise price, stock warrants $ 1.40 $ 1.40
Subsequent Event [Member]
Class Of Stock [Line Items]
Number of consecutive business days30 days
Minimum [Member] | Scenario Forecast [Member]
Class Of Stock [Line Items]
Number of consecutive business days10 days
Closing bid price $ 1
Minimum [Member] | Subsequent Event [Member]
Class Of Stock [Line Items]
Bid price required to meet NASDAQ initial listing $ 1
Common Stock Awards [Member]
Class Of Stock [Line Items]
Stock-based compensation expense $ 27 102 $ 55 203
Common Stock Awards [Member] | Maximum [Member]
Class Of Stock [Line Items]
Stock-based compensation expense $ 100 $ 100 $ 100 $ 200
Faneuil [Member]
Class Of Stock [Line Items]
Number of common stock retired84,000
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 Thousands3 Months Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2019Mar. 31, 2020Mar. 31, 2019
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense $ 111 $ 186 $ 223 $ 371
Stock Options [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense84 84 168 168
Common Stock Awards [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense $ 27 $ 102 $ 55 $ 203

Income Tax - Additional Informa

Income Tax - Additional Information (Detail) - USD ($) $ in Millions1 Months Ended6 Months Ended
Nov. 30, 2019Mar. 31, 2020Mar. 31, 2019Sep. 30, 2019Dec. 22, 2017
Income Taxes Disclosure [Line Items]
Effective income tax6.00%30.00%
Discrete tax benefit $ 0.7
Impairment of goodwill59
Alternate minimum tax refund, deferred tax assets, tax credits carryforwards $ 1.8
Income Tax Receivable $ 0.9
Deferred Tax Assets,0.9
Proceeds from income tax refunds $ 0.9
Refund of taxes for several years $ 0.9
The CARES Act [Member]
Income Taxes Disclosure [Line Items]
Alternate minimum tax refund, deferred tax assets, tax credits carryforwards0.9
Income Tax Receivable $ 0.9

Related-Party Transactions - Ad

Related-Party Transactions - Additional Information (Detail) - Harland Clarke Holdings Corp. ("Harland Clarke") [Member] - USD ($)3 Months Ended6 Months Ended
Mar. 31, 2019Mar. 31, 2019Mar. 31, 2020Sep. 30, 2019
Related Party Transaction [Line Items]
Revenue recognized $ 100,000 $ 100,000
Cost of revenue $ 100,000 $ 100,000
Accounts receivable $ 0 $ 0
Minimum [Member]
Related Party Transaction [Line Items]
Ownership percentage5.00%

Reportable Segments and Geogr_3

Reportable Segments and Geographic Information - Additional Information (Detail)6 Months Ended
Mar. 31, 2020Segment
Segment Reporting [Abstract]
Number of reportable segments3

Reportable Segments and Geogr_4

Reportable Segments and Geographic Information - Summary of Segment Information (Detail) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Mar. 31, 2020Mar. 31, 2019Mar. 31, 2020Mar. 31, 2019
Segment Reporting Information [Line Items]
Net revenue $ 96,026 $ 87,996 $ 186,491 $ 181,780
Segment adjusted EBITDA4,711 8,741 8,071 17,347
Impairment of goodwill(59,047)(59,047)
Depreciation and amortization expense(4,918)(4,837)(10,160)(9,283)
Interest expense(2,844)(2,625)(5,408)(5,340)
Restructuring and cost reduction initiatives(475)(332)(790)(603)
Loan amendment fees(239)(136)(414)(337)
Fair value of warrants issued in connection with loan amendments(122)(716)
Stock-based compensation(111)(186)(223)(371)
Acquisition-related expenses(50)(99)(12)
Benefit from (provision for) income taxes1,297 (202)1,257 (490)
Net income (loss)(61,798)423 (66,075)1,134
Disposal of assets and other (gain) loss, net(2)223
Interest from legal settlement200
Non-cash litigation loss1,256
Operating Segments [Member] | Faneuil [Member]
Segment Reporting Information [Line Items]
Net revenue58,825 46,590 117,392 101,792
Segment adjusted EBITDA1,372 2,793 3,025 7,739
Operating Segments [Member] | Carpets [Member]
Segment Reporting Information [Line Items]
Net revenue10,548 12,088 20,322 24,450
Segment adjusted EBITDA55 272 (23)432
Operating Segments [Member] | Phoenix [Member]
Segment Reporting Information [Line Items]
Net revenue26,653 29,318 48,777 55,538
Segment adjusted EBITDA4,178 6,335 7,018 10,556
ALJ [Member]
Segment Reporting Information [Line Items]
Segment adjusted EBITDA $ (894) $ (659) $ (1,949) $ (1,380)