Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2021 | May 01, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ALJJ | |
Entity Registrant Name | ALJ REGIONAL HOLDINGS INC | |
Entity Central Index Key | 0001438731 | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity File Number | 001-37689 | |
Entity Tax Identification Number | 13-4082185 | |
Entity Address, Address Line One | 244 Madison Avenue | |
Entity Address, Address Line Two | PMB #358 | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10016 | |
City Area Code | 888 | |
Local Phone Number | 486-7775 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 42,321,048 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 4,566 | $ 6,050 |
Accounts receivable, net of allowance for doubtful accounts of $654 and $1,033 at March 31, 2021 and September 30, 2020, respectively | 54,764 | 56,487 |
Inventories, net | 6,140 | 6,232 |
Prepaid expenses and other current assets | 7,408 | 9,015 |
Current assets of discontinued operations | 4,615 | 4,828 |
Total current assets | 72,878 | 82,612 |
Property and equipment, net | 66,374 | 67,785 |
Operating lease right-of-use assets | 31,731 | |
Intangible assets, net | 32,995 | 35,552 |
Collateral deposits | 487 | 424 |
Other assets | 3,888 | 2,887 |
Long-term assets of discontinued operations | 984 | |
Total assets | 208,353 | 190,244 |
Current liabilities: | ||
Accounts payable | 13,298 | 16,224 |
Accrued expenses | 20,339 | 19,140 |
Income taxes payable | 14 | 9 |
Deferred revenue and customer deposits | 4,304 | 8,583 |
Term loans, net of deferred loan costs - current installments | 11,162 | 9,827 |
Finance lease obligations - current installments | 1,931 | 2,437 |
Operating lease obligations - current installments | 5,025 | |
Current portion of workers' compensation reserve | 710 | 960 |
Other current liabilities | 4,239 | 60 |
Current liabilities of discontinued operations | 4,099 | 3,351 |
Total current liabilities | 61,022 | 60,591 |
Line of credit, net of deferred loan costs | 11,597 | 13,753 |
Term loans, less current portion, net of deferred loan costs | 70,161 | 73,482 |
Deferred revenue, less current portion | 3,813 | 2,358 |
Workers' compensation reserve, less current portion | 1,887 | 1,842 |
Finance lease obligations, less current installments | 1,981 | 2,900 |
Operating lease obligations, less current installments | 35,633 | |
Deferred tax liabilities, net | 1,008 | 987 |
Other non-current liabilities | 6,365 | 16,669 |
Long-term liabilities of discontinued operations | 375 | 606 |
Total liabilities | 193,467 | 173,188 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value; authorized – 100,000 shares; 42,321 and 42,298 issued and outstanding at March 31, 2021 and September 30, 2020, respectively | 423 | 423 |
Additional paid-in capital | 288,225 | 288,193 |
Accumulated deficit | (273,762) | (271,560) |
Total stockholders’ equity | 14,886 | 17,056 |
Total liabilities and stockholders’ equity | $ 208,353 | $ 190,244 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 654 | $ 1,033 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 42,321,000 | 42,298,000 |
Common stock, shares outstanding | 42,321,000 | 42,298,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||||
Net revenue | $ 114,588 | $ 85,478 | $ 225,725 | $ 166,169 |
Costs and expenses: | ||||
Cost of revenue | 93,484 | 70,300 | 186,643 | 138,235 |
Selling, general, and administrative expense | 17,800 | 16,296 | 34,854 | 30,701 |
Impairment of goodwill | 56,492 | 56,492 | ||
Loss (gain) on disposal of assets, net | 64 | (2) | 2 | |
Total operating expenses | 111,348 | 143,088 | 221,495 | 225,430 |
Operating income (loss) | 3,240 | (57,610) | 4,230 | (59,261) |
Other (expense) income: | ||||
Interest expense, net | (2,451) | (2,844) | (5,033) | (5,408) |
Interest from legal settlement | 200 | 200 | ||
Total other expense, net | (2,451) | (2,844) | (5,033) | (5,208) |
Income (loss) from continuing operations before income taxes | 789 | (60,454) | (803) | (64,469) |
(Provision for) benefit from income taxes | (44) | 1,297 | (336) | 1,257 |
Net income (loss) from continuing operations | 745 | (59,157) | (1,139) | (63,212) |
Net loss from discontinued operations, net of income taxes | (860) | (2,641) | (1,063) | (2,863) |
Net loss | $ (115) | $ (61,798) | $ (2,202) | $ (66,075) |
Income (loss) per share of common stock–basic and diluted: | ||||
Continuing operations | $ 0.02 | $ (1.40) | $ (0.03) | $ (1.50) |
Discontinued operations | $ (0.02) | (0.06) | (0.03) | (0.07) |
Net loss per share | $ (1.47) | $ (0.05) | $ (1.57) | |
Weighted average shares of common stock outstanding: | ||||
Basic | 42,321,000 | 42,173,000 | 42,319,000 | 42,173,000 |
Diluted | 54,458,000 | 42,173,000 | 42,319,000 | 42,173,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities | ||
Net loss | $ (2,202) | $ (66,075) |
Adjustments to reconcile net loss to cash provided by (used for) operating activities: | ||
Impairment of goodwill | 56,492 | |
Depreciation and amortization expense | 9,968 | 9,876 |
(Reversal) provision for bad debts and obsolete inventory | (218) | 469 |
Interest expense and other bank fees accreted to term loans | 1,121 | 53 |
Amortization of deferred loan costs | 364 | 603 |
Stock-based compensation expense | 85 | 223 |
Fair value of warrants issued in connection with debt modification | 716 | |
(Gain) loss on disposal of assets, net | (2) | 2 |
Loss on sale of Carpets | 761 | |
Deferred income taxes | 21 | (1,448) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 1,926 | (9,133) |
Inventories, net | 107 | (849) |
Prepaid expenses, collateral deposits, and other current assets | 1,594 | (6,712) |
Income tax receivable | 897 | |
ROU assets/ROU liabilities | (298) | |
Other assets | (1,064) | (444) |
Accounts payable | (2,926) | 3,810 |
Accrued expenses | 335 | 1,909 |
Income tax payable | 5 | (363) |
Deferred revenue and customer deposits | (2,824) | 4,529 |
Other current liabilities and other non-current liabilities | 3,706 | (114) |
Discontinued operations, net | 663 | 2,544 |
Cash provided by (used for) operating activities | 11,122 | (3,015) |
Investing activities | ||
Capital expenditures | (4,163) | (2,867) |
Proceeds from sales of assets | 28 | 1 |
Discontinued operations, net | (7) | (16) |
Cash used for investing activities | (3,704) | (2,882) |
Financing activities | ||
(Payments) proceeds from line of credit, net | (2,320) | 9,713 |
Deferred loan costs | (542) | |
Payments on finance leases | (1,425) | (1,169) |
Payments on term loans | (5,157) | (3,535) |
Cash (used for) provided by financing activities | (8,902) | 4,467 |
Change in cash and cash equivalents | (1,484) | (1,430) |
Cash and cash equivalents at beginning of the year | 6,050 | 4,529 |
Cash and cash equivalents at end of the year | 4,566 | 3,099 |
Cash paid during the period for: | ||
Interest | 4,153 | 4,724 |
Taxes | 35 | 680 |
Non-cash investing and financing activities: | ||
Capital equipment purchased with finance leases to be billed to customers | 1,763 | |
Capital equipment purchased with finance leases | $ 1,582 | |
Capital equipment purchases financed with term loans | 1,850 | |
Carpets [Member] | ||
Adjustments to reconcile net loss to cash provided by (used for) operating activities: | ||
Loss on sale of Carpets | 761 | |
Investing activities | ||
Proceeds from sale of Carpets, net of transaction costs | $ 438 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Deficit [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] |
Beginning balance at Sep. 30, 2019 | $ 422 | $ 287,101 | $ (204,407) | $ 521 | |
Stock-based compensation expense - options | 168 | ||||
Fair value of warrants issued in connection with term loan modification | $ 716 | 716 | |||
Net loss | (66,075) | (66,075) | |||
Ending balance at Mar. 31, 2020 | 18,446 | 422 | 287,985 | (269,961) | |
Beginning balance at Dec. 31, 2019 | 422 | 287,779 | (208,163) | ||
Stock-based compensation expense - options | 84 | ||||
Fair value of warrants issued in connection with term loan modification | 122 | 122 | |||
Net loss | (61,798) | (61,798) | |||
Ending balance at Mar. 31, 2020 | 18,446 | 422 | 287,985 | (269,961) | |
Beginning balance at Sep. 30, 2020 | 17,056 | 423 | 288,193 | (271,560) | |
Stock-based compensation expense - options | 32 | ||||
Net loss | (2,202) | (2,202) | |||
Ending balance at Mar. 31, 2021 | 14,886 | 423 | 288,225 | (273,762) | |
Beginning balance at Dec. 31, 2020 | 423 | 288,210 | (273,647) | ||
Stock-based compensation expense - options | 15 | ||||
Net loss | (115) | (115) | |||
Ending balance at Mar. 31, 2021 | $ 14,886 | $ 423 | $ 288,225 | $ (273,762) |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Mar. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Basis of Presentation | ALJ REGIONAL HOLDINGS, INC. AND SUBSIDIARIES Organization ALJ Regional Holdings, Inc. (including subsidiaries, referred to collectively herein as “ALJ” or “Company”) is a holding company. During the three and six months ended March 31, 2021 and 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”) Basis of Presentation • Phoenix Color Corp. (including its subsidiaries, “Phoenix”) As a result of selling one of its segments during the three months ended March 31, 2021, discussed below, ALJ has organized its business and corporate structure into two business segments: Faneuil and Phoenix. Basis of Presentation In January 2021, ALJ entered into a Purchase and Sale Agreement (“PSA”), by and among the Company, Superior Interior Finishes, LLC, a Nevada limited liability company (“Purchaser” or “Superior”) and Carpets, pursuant to which the Company agreed to sell 100% of the membership interests of Carpets to the Purchaser for an aggregate purchase price of $0.5 million (the “Purchase Price”) in cash (the “Transaction”). At the time of the PSA, Superior was 100% owned by Steve Chesin, the Chief Executive Officer of Carpets. The Company entered into the PSA because its Carpets business segment had been deemed a non-core holding and had underperformed over the past several years. The Transaction, which was approved by a committee of the Board comprised solely of certain independent directors of the Company, closed in February 2021. As such, the results of operations, assets, liabilities, and cash flows of Carpets were classified as discontinued operations in ALJ’s financial statements for all periods presented. 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, 2020, filed with the SEC on December 18, 2020. 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. To date, COVID-19 has not materially impacted ALJ’s financial position, results of operations or cash flows. The Company took immediate actions in March 2020 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 continue to be impacted in the near term by lower sales 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. These include among others, the duration of the outbreak, vaccination rate, emergence of new variants, 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, 2021, ALJ’s total available liquidity was $21.7 million, which included $4.6 million of cash and cash equivalents and $17.1 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 potential effects of COVID-19, ALJ (i) sought an easement of certain financial covenants, under the Financing Agreement (as defined below), in order to maintain compliance therewith, and (ii) the elimination of certain quarterly principal payment obligations. Accordingly, the Company executed 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 Financing Agreement (as amended to date) 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 Standards | 6 Months Ended |
Mar. 31, 2021 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Standards | 2. RECENT ACCOUNTING STANDARDS Accounting Standards Adopted Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU 2016-02, Leases and subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (referred to collectively as “ASC 842”)). ASC 842 requires lessees to recognize a right-of-use (“ROU”) asset and corresponding lease liability for all leases with terms of more than 12 months and provides enhanced disclosure of lease activity. Recognition, measurement, and presentation of expenses depend on classification as either a finance or operating lease. ALJ adopted ASC 842 as of October 1, 2020, the effective and initial application date, using the modified retrospective approach. Comparative periods presented in the consolidated financial statements prior to October 1, 2020 continue to be presented under Accounting Standards Codification (“ASC”) 840. ALJ elected the package of practical expedients, which allowed the Company to not reassess, as of the adoption date, whether arrangements contain leases, the classification of existing leases, and the capitalization of initial direct costs of the existing leases. The Company also made a policy election to exclude leases with an initial term of 12 months or less from the Consolidated Balance Sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company’s October 1, 2020 adoption of ASC 842 resulted in the recognition of operating lease obligations totaling $42.6 million, based upon the present value of the remaining minimum rental payments using discount rates as of the adoption date, of which $5.2 million was in operating lease obligations - current installments, and $37.4 million was in operating lease liabilities, less current installments. In addition, ALJ recorded corresponding operating lease right-of-use assets totaling $33.4 million. The new standard did not have a material impact on the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows. See Note 10 for further discussion of the Company’s leasing arrangements and required ASC 842 disclosures. Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes on ALJ’s consolidated financial statements and related disclosures was not material. Accounting Standards Not Yet Adopted Internal-Use Software In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, Intangibles–Goodwill and Other |
Revenue recognition
Revenue recognition | 6 Months Ended |
Mar. 31, 2021 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 3. REVENUE RECOGNITION Disaggregation of Revenue Revenue by contract type was as follows for the three and six months ended March 31, 2021 and 2020: Three Months Ended March 31, Six Months Ended March 31, ( in thousands 2021 2020 2021 2020 Faneuil: Healthcare $ 37,859 $ 23,988 $ 76,702 $ 49,355 Transportation 21,615 18,368 41,710 35,496 Utility 13,756 13,490 26,820 27,417 Government 10,021 581 22,550 1,630 Other 1,173 2,398 2,611 3,494 Total Faneuil $ 84,424 $ 58,825 $ 170,393 $ 117,392 Phoenix: Publisher MSA $ 23,853 $ 19,569 $ 42,967 $ 31,999 Non-MSA 3,677 4,222 7,870 10,782 Commercial MSA 3 380 93 1,185 Non-MSA 2,631 2,482 4,402 4,811 Total Phoenix $ 30,164 $ 26,653 $ 55,332 $ 48,777 Total consolidated revenue, net $ 114,588 $ 85,478 $ 225,725 $ 166,169 Substantially all of Faneuil revenue is recognized over time and substantially all of Phoenix revenue is recognized at a point in time. Contract Assets and Liabilities The following table provides information about consolidated contract assets and contract liabilities at March 31, 2021 and September 30, 2020: ( in thousands March 31, 2021 September 30, 2020 Contract assets: Unbilled revenue (1) $ 681 $ 527 Total contract assets $ 681 $ 527 Contract liabilities: Deferred revenue $ 8,056 $ 10,875 Accrued rebates and material rights (2) 2,715 3,097 Total contract liabilities $ 10,771 $ 13,972 (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) Included in accrued expenses. The following table provides changes in consolidated contract assets and contract liabilities during the six months ended March 31, 2021: ( in thousands Contract Assets Contract Liabilities Balance, September 30, 2020 $ 527 $ 13,972 Additions to contract assets 957 — Transfer from contract assets to accounts receivable (803 ) — Revenue recognized — (11,771 ) Accrued rebates — 2,348 Payment of rebates — (2,730 ) Cash received from customer — 8,952 Balance, March 31, 2021 $ 681 $ 10,771 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. The Company has elected to apply the optional exemption for the disclosure of remaining performance obligations for contracts that have an original expected duration of one year or less, are billed and recognized as services are delivered and/or variable consideration allocated entirely to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. This primarily consists of call center services that are billed monthly based on the services performed each month . Costs to Obtain a Contract The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The costs to obtain a contract capitalized 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 six months ended March 31, 2021, the Company capitalized $0.1 million of costs to obtain a contract. During the six months ended March 31, 2021, the Company amortized $0.3 million of these costs, which is included in selling, general, and administrative expense. The net book value of costs to obtain a contract was $0.4 million as of March 31, 2021, of which $0.3 million was in prepaid expenses and other current assets, and $0.1 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 six months ended March 31, 2021, the Company capitalized $6.0 million of costs to fulfill a contract. The amortization of costs to fulfill contracts, which comprise set-up/transition activities, for the six months ended March 31, 2021 was approximately $6.7 million. The net book value of the costs to fulfill a contract as of March 31, 2021, was $4.4 million of which $1.6 million was in prepaid expenses and other current assets, and $2.8 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, 2021 or March 31, 2020. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 6 Months Ended |
Mar. 31, 2021 | |
Acquisitions And Divestitures [Abstract] | |
Acquisitions and Divestitures | 4. ACQUISITIONS AND DIVESTITURES 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 others, (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. In March 2021, Faneuil made the first earn-out payment of $2.5 million. The RDI Acquisition was not material to the Company's results of operations, financial position, or cash flows and, therefore, the pro forma impact is not presented. The following schedule reflects the final 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 (2) (4,900 ) Cash paid at closing $ 2,500 (1) Goodwill was fully impaired and written off in March 2020. (2) At March 31, 2021, the remaining maximum payment was $5.0 million. At March 31, 2021, the fair value was $3.5 million of which $2.1 million was included in accrued expenses and $1.4 million was included in other non-current liabilities on the Consolidated Balance Sheet. The original maximum payment was $7.5 million. Fair Value Adjustment of Deferred and Contingent Consideration Liabilities The fair value of the deferred and contingent consideration liabilities is remeasured to fair value at each reporting period using Level 3 inputs such as cash flow forecast, discount rate, and equity risk premium. The change in fair value, including accretion for the passage of time, is recognized in earnings until the deferred and contingent considerations are resolved. ALJ did not recognize any change in fair value during the three and six months ended March 31, 2021 and 2020. Acquisition-Related Expenses 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. There were no acquisition-related expenses incurred during any other periods presented. Carpets Divestiture As previously disclosed in Note 1, ALJ sold Carpets in February 2021. As a result, ALJ recognized a loss on sale of $0.8 million during the three months ended March 31, 2021 calculated as follows: ( in thousands Cash proceeds $ 500 Net assets sold (1,199 ) Transaction costs (62 ) Impact of income taxes — Total loss on sale $ (761 ) The carrying value of the net assets sold, at the time of closing, were as follows: ( in thousands Current assets $ 4,615 Intangible assets, net 318 Other long-term assets 740 Current liabilities (4,099 ) Long-term liabilities (375 ) Net assets sold $ 1,199 The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations at September 30, 2020: September 30, 2020 Assets: Accounts receivable $ 2,874 Inventories, net 1,221 Prepaid expenses and other current assets 733 Property and equipment, net 598 Intangible assets, net 335 Other long-term assets 51 Total assets of discontinued operations $ 5,812 Liabilities: Accounts payable $ 1,946 Accrued expenses 1,172 Other current liabilities 233 Total long-term liabilities 606 Total liabilities of discontinued operations $ 3,957 The following table presents information regarding certain components of loss from discontinued operations for the three and six months ended March 31, 2021 and 2020: Three Months Ended March 31, Six Months Ended March 31, ( in thousands 2021 2020 2021 2020 Net revenue $ 5,106 $ 10,548 $ 13,799 $ 20,322 Operating income (loss) (99 ) (2,641 ) (302 ) (2,863 ) Loss on sale (761 ) — (761 ) — Loss before income taxes (860 ) (2,641 ) (1,063 ) (2,863 ) Income tax expense — — — — Loss from discontinued operations (860 ) (2,641 ) (1,063 ) (2,863 ) The following table presents significant components of cash flows of discontinued operations for the six months ended March 31, 2021 and 2020: Six Months Ended March 31, ( in thousands 2021 2020 Operating activities Impairment of goodwill $ — $ 2,555 Depreciation and amortization expense 199 284 Provision for bad debts and obsolete inventory 27 30 Changes in operating assets and liabilities: Accounts receivable, net 399 (152 ) Inventories, net (12 ) 5 Prepaid expenses, collateral deposits, and other current assets 24 (304 ) Other assets and liabilities, net 26 126 Investing activities Capital expenditures (7 ) (16 ) |
Concentration Risks
Concentration Risks | 6 Months Ended |
Mar. 31, 2021 | |
Risks And Uncertainties [Abstract] | |
Concentration Risks | 5. CONCENTRATION RISKS Cash The Company maintains its cash balances in accounts, which, at times, may exceed federally insured limits. The Company has not experienced any loss in such accounts and believes there is little exposure to any significant credit risk. Major Customers and Accounts Receivable ALJ did not generate net revenue from any one customer in excess of 10% of consolidated net revenue. Each of ALJ’s segments had customers that represent more than 10% of their respective net revenue, as described below. Faneuil Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Customer A 13.1 % 10.1 % 13.1 % 12.9 % Customer B ** 10.9 ** 11.3 ** Less than 10% of Faneuil net revenue. Accounts receivable from significant customers during the three or six months ended March 31, 2021 totaled $5.0 million on March 31, 2021. As of March 31, 2021, 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. Phoenix Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Customer A 23.9 % 16.6 % 21.9 % 16.6 % Customer B 20.5 28.2 22.0 26.7 Customer C 10.3 11.7 12.3 11.9 Accounts receivable from significant customers during the three or six months ended March 31, 2021 totaled $4.0 million on March 31, 2021. As of March 31, 2021, 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 has only one segment, Phoenix, that purchases inventory. Phoenix had suppliers that represented more than 10% of both Phoenix inventory purchases and consolidated ALJ inventory purchases as follows: Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Supplier A 21.4 % 11.7 % 21.3 % 14.4 % Supplier B 13.0 18.8 12.3 17.8 If these suppliers were unable to provide materials on a timely basis, Phoenix management believes alternative suppliers could provide the required supplies with minimal disruption to the business. |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 6 Months Ended |
Mar. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Composition of Certain Financial Statement Captions | 6. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS Accounts Receivable, Net The following table summarizes accounts receivable at the end of each reporting period: March 31, September 30, (in thousands) 2021 2020 Accounts receivable $ 54,646 $ 57,478 Unbilled receivables 772 42 Accounts receivable 55,418 57,520 Less: allowance for doubtful accounts (654 ) (1,033 ) Accounts receivable, net $ 54,764 $ 56,487 Inventories, Net The following table summarizes inventories at the end of each reporting period: March 31, September 30, (in thousands) 2021 2020 Raw materials $ 4,726 $ 4,260 Semi-finished goods/work in process 1,379 1,923 Finished goods 67 96 Inventories 6,172 6,279 Less: allowance for obsolete inventory (32 ) (47 ) Inventories, net $ 6,140 $ 6,232 Property and Equipment The following table summarizes property and equipment at the end of each reporting period: March 31, September 30, (in thousands) 2021 2020 Machinery and equipment $ 33,765 $ 33,783 Leasehold improvements 30,842 30,843 Computer and office equipment 22,286 19,630 Building and improvements 16,874 16,896 Software 16,484 16,483 Land 9,267 9,267 Furniture and fixtures 7,749 7,749 Construction and equipment in process 3,117 — Vehicles 360 356 Property and equipment 140,744 135,007 Less: accumulated depreciation and amortization (74,370 ) (67,222 ) Property and equipment, net $ 66,374 $ 67,785 Property and equipment depreciation and amortization expense, including amounts related to finance leased assets, was $3.7 million and $3.5 million for the three months ended March 31, 2021 and 2020, respectively, and $7.4 million and $7.2 million for the six months ended March 31, 2021 and 2020, respectively. Intangible Assets The following tables summarize identified intangible assets at the end of each reporting period: March 31, 2021 (in thousands) Weighted Average Original Life (Years) Weighted Average Remaining Life (Years) Gross Accumulated Amortization Net Customer relationships 7.0 4.5 $ 33,590 $ (17,220 ) $ 16,370 Trade names 27.6 23.0 10,240 (2,406 ) 7,834 Supply agreements 10.2 9.1 9,690 (4,684 ) 5,006 Technology 8.0 6.8 3,400 (708 ) 2,692 Non-compete agreements 6.6 5.1 1,550 (457 ) 1,093 Totals $ 58,470 $ (25,475 ) $ 32,995 September 30, 2020 (in thousands) Weighted Average Original Life (Years) Weighted Average Remaining Life (Years) Gross Accumulated Amortization Net Customer relationships 7.0 4.5 $ 33,590 $ (15,818 ) $ 17,772 Trade names 27.6 23.0 10,240 (2,209 ) 8,031 Supply agreements 10.2 9.1 9,690 (4,059 ) 5,631 Technology 8.0 6.8 3,400 (496 ) 2,904 Non-compete agreements 6.6 5.1 1,550 (336 ) 1,214 Totals $ 58,470 $ (22,918 ) $ 35,552 Intangible asset amortization expense was $1.3 million for both the three months ended March 31, 2021 and 2020, and $2.6 million for both the six months ended March 31, 2021 and 2020. The following table presents expected future amortization expense for the remainder of Fiscal 2021 and yearly thereafter: (in thousands) Estimated Future Amortization Fiscal 2021 (remaining) $ 2,384 Fiscal 2022 4,596 Fiscal 2023 4,596 Fiscal 2024 4,457 Fiscal 2025 4,144 Thereafter 12,818 Total $ 32,995 Accrued Expenses The following table summarizes accrued expenses at the end of each reporting period: March 31, September 30, (in thousands) 2021 2020 Accrued compensation and related taxes $ 10,553 $ 9,660 Rebates payable 2,715 3,097 Acquisition contingent consideration 2,100 2,500 Other 1,616 352 Medical and benefit-related payables 1,295 1,438 Legal 1,000 — Interest payable 669 674 Accrued board of director fees 391 130 Deferred lease incentives — 1,289 Total accrued expenses $ 20,339 $ 19,140 Workers’ Compensation Reserve The Company is self-insured for certain workers’ compensation claims as discussed below. The current portion of workers’ compensation reserve is disclosed with accrued expenses. The non-current portion of workers’ compensation reserve is disclosed with other non-current liabilities. Faneuil Phoenix. |
Income (Loss) Per Share
Income (Loss) Per Share | 6 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | 7. INCOME (LOSS) PER SHARE The following table summarizes basic and diluted income (loss) per share of common stock for each period presented: Three Months Ended March 31, Six Months Ended March 31, ( in thousands, except per share amounts 2021 2020 2021 2020 Net income (loss) from continuing operations $ 745 $ (59,157 ) $ (1,139 ) $ (63,212 ) Interest on convertible debt 111 — — — Income (loss) from continuing operations attributable to common stock $ 856 $ (59,157 ) $ (1,139 ) $ (63,212 ) Income from discontinued operations, net of income taxes, attributable to common stock (860 ) (2,641 ) (1,063 ) (2,863 ) Net loss attributable to common stock $ (4 ) $ (61,798 ) $ (2,202 ) $ (66,075 ) Income (loss) per share of common stock–basic: Continuing operations $ 0.02 $ (1.40 ) $ (0.03 ) $ (1.50 ) Discontinued operations $ (0.02 ) $ (0.06 ) $ (0.03 ) $ (0.07 ) Net loss per share (1) $ — $ (1.47 ) $ (0.05 ) $ (1.57 ) Income (loss) per share of common stock–diluted: Continuing operations $ 0.02 $ (1.40 ) $ (0.03 ) $ (1.50 ) Discontinued operations $ (0.02 ) $ (0.06 ) $ (0.03 ) $ (0.07 ) Net loss per share (1) $ — $ (1.47 ) $ (0.05 ) $ (1.57 ) Weighted average shares of common stock outstanding: Basic 42,321 42,173 42,319 42,173 Convertible debt 11,158 — — — Warrants 962 — — — Employee stock option grants 17 — — — Diluted 54,458 42,173 42,319 42,173 Anti-dilutive shares excluded from diluted net income (loss) per share calculation: Convertible debt — — 11,158 — Employee stock option grants 1,420 1,654 1,465 1,654 Warrants 1,297 2,908 2,908 2,908 Total 2,717 4,562 15,531 4,562 __________________________________________________ (1) ALJ computed basic loss per share of common stock using net loss 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 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. |
Debt
Debt | 6 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 8. DEBT Debt The following table summarizes ALJ’s line of credit, term loan, and equipment financing at the end of each reporting period: March 31, September 30, (in thousands) 2021 2020 Line of credit: Line of credit $ 12,097 $ 14,417 Less: deferred loan costs (500 ) (664 ) Line of credit, net of deferred loan costs $ 11,597 $ 13,753 Current portion of term loans: Current portion of term loan $ 8,200 $ 8,200 Current portion of equipment financing 3,323 1,999 Less: deferred loan costs (361 ) (372 ) Current portion of term loans, net of deferred loan costs $ 11,162 $ 9,827 Term loans, less current portion: Term loan, less current portion $ 58,834 $ 62,336 Term B loan 4,693 4,415 Term C loan 6,026 5,782 Equipment financing, less current portion 1,081 1,611 Less: deferred loan costs (473 ) (662 ) Term loans, less current portion, net of deferred loan costs $ 70,161 $ 73,482 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 four were entered into since October 1, 2019 and are described below. The Cerberus Debt matures on November 28, 2023 (“Maturity Date”). Sixth Amendment to the Financing Agreement In December 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: • Converted $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; • Adjusted 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 ended June 30, 2020, (iv) 3.50:1:00 for each fiscal quarter beginning with the fiscal quarter ended September 30, 2020 through the fiscal quarter ended December 31, 2020, and (v) 3.25:1:00 for each fiscal quarter beginning with the fiscal quarter ended 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; • Decreased 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 ended June 30, 2020 and (iii) 1.00:1.00 for the fiscal quarter ended September 30, 2020 and (b) from 1.10:1.00 to 1.05:1.00 for each fiscal quarter beginning with the fiscal quarter ended December 31, 2020 and for each fiscal quarter thereafter; and • Increased 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 was due on June 30, 2020 unless one or more persons purchased 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. As a result of the Ninth Amendment (see Ninth Amendment to the Financing Agreement Seventh Amendment to the Financing Agreement In February 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 borrowing limit 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 In March 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 available borrowing limit under the Cerberus/PNC Revolver 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 the 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 potential effects of COVID-19, ALJ sought an easement of certain debt covenants and the elimination of certain quarterly principal payment obligations under the Financing Agreement. In May 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 for December 31, 2020 from $3.1 million to $2.1 million; • 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 In December 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 30-day trailing average closing price of the Company’s common stock on June 17, 2020 was $0.54. 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 in June 2020. Amendment to Junior Participation Agreement – Term B Loan and Warrants Issued In March 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% paid in kind, at a rate equal to the Cerberus Term Loan plus 4.00%, until Cerberus Term Loan is paid in full, instead of paid in 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 In May 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 (as may be amended and/or restated from time to time), the Term C Loan Junior Participants acquired junior participation interests in the Term C Loan in an aggregate amount of $5.6 million on May 12, 2020 (“Term C Loan”) and Mr. Ravich agreed to acquire additional junior participation interests in the Term B Loan in an aggregate amount of (i) $2.5 million on June 30, 2021 and (ii) $2.5 million on September 30, 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 of $0.54 per share. 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 March 31, 2021, 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, 2021 Term Loans: Financing Agreement Phoenix acquisition August 2015 8.25% $ 1,610 $ 52,342 First Amendment Color Optics acquisition July 2016 8.25% 175 5,702 Third Amendment Printing Components Business acquisition October 2017 8.25% 151 4,893 Fourth Amendment Working capital November 2018 8.25% 114 3,718 Sixth Amendment (Term B loan) N/A December 2019 12.25% — 4,693 Eighth Amendment (Accreted fees) N/A March 2020 13.25% — 379 Ninth Amendment (Term C loan) Working capital May 2020 8.25% — 6,026 Totals $ 2,050 $ 77,753 Line of Credit: Cerberus/PNC Revolver (includes Second, Fifth, Seventh, Eighth, and Ninth Amendments) Working capital August 2015 13.25% $ — $ 12,097 * Range of annual interest rates accrued during the six months ended March 31, 2021. 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 years ended September 30, 2020 and 2019, did not require ALJ to make an annual ECF payment in December 2020 or 2019. In certain instances, ALJ is required to make mandatory term loan payments if ALJ receives cash outside the normal course of business. No mandatory payments were required during the six months ended March 31, 2021. ALJ made a mandatory payment of $0.9 million during the six months ended March 31, 2020. As of March 31, 2021, ALJ will be assessed a prepayment penalty equal to 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, 2021. 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, 2021, ALJ was in compliance with all debt covenants and had unused borrowing capacity of $17.1 million. Loan Amendment Fees ALJ has accounted for all 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. Equipment Financing In June 2020, Phoenix purchased a Heidelberg Press for $2.6 million by securing $1.8 million equipment financing (“June 2020 Equipment Financing”), paying $0.5 million in cash, and receiving a $0.3 million trade-in allowance. The June 2020 Equipment Financing term is 36 months, requires monthly principal and interest payments, accrues interest at 2.66% per year, and is secured by the Heidelberg Press. In October 2020, the board of directors approved the purchase of a second Heidelberg Press for $4.5 million. During the three months ended March 31, 2021, Phoenix paid the vendor $0.9 million, received a trade-in allowance of $0.1 million, and secured equipment financing of $3.5 million (“March 2021 Equipment Financing” and together with the June 2020 Equipment Financing, the “Equipment Financings”). Of the $3.5 million, $1.4 million was paid to the vendor in March 2021. The balance is expected to be paid to the vendor by June 2021. The second Heidelberg Press is projected to be operational in June 2021. The March 2021 Equipment Financing term is 60 months, requires monthly principal and interest payments, accrues interest at 4.5% 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 Financings are as follows ( in thousands Year Ending March 31, Equipment Financings Term Loan Debt (with quarterly principal payments) Term Loan Debt (with no quarterly principal payments) Total 2022 $ 3,323 $ 8,200 $ — $ 11,523 2023 821 8,200 — 9,021 2024* 260 62,731 10,719 73,710 Total $ 4,404 $ 79,131 $ 10,719 $ 94,254 * The majority of this amount is the final balloon payment due on the Maturity Date. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Mar. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. COMMITMENTS AND CONTINGENCIES Employment Agreements ALJ maintains employment agreements with certain key executive officers that provide for a base salary and an annual bonus, with annual bonus amounts to be determined by the Board of Directors or 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. On March 31, 2021, contingent termination payments related to base salary and medical premiums totaled $1.1 million. Surety Bonds As part of Faneuil’s normal course of operations, certain customers require surety bonds guaranteeing the performance of a contract. On March 31, 2021, 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 $41.5 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 $3.3 million outstanding on March 31, 2021. 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 mediation was held on March 11, 2021 and discussions are ongoing. Faneuil believes this action is without merit and intends to defend this case vigorously. Harris v. Faneuil Lois Harris, an employee of Faneuil in Georgia, filed a collective action complaint on April 18, 2021 in the United States District Court for the Northern District of Georgia. Harris alleges, on behalf of herself and other current and former non-exempt Call Center Agent employees who received nondiscretionary bonuses for periods in which they worked overtime hours, that Faneuil violated the Fair Labor Standards Act by failing to include nondiscretionary bonuses in the regular rate of pay when calculating the overtime rate for Harris and other similarly-situated persons. Faneuil has engaged counsel to defend it in this action. The financial impact of this case is not reasonably estimable. 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. |
Leases
Leases | 6 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | 10. LEASES ALJ has operating leases for facilities, equipment, and vehicles, and finance leases for equipment. Over 95% of operating leases are for facilities. Many of the Company’s facilities leases contain renewal options and rent escalation clauses. The Company determines if an arrangement is a lease at inception and recognizes a finance or operating lease liability and right-of-use asset in the Company’s Consolidated Balance Sheet. Right-of-use assets and lease liabilities for both operating and finance leases are recognized based on present value of lease payments over the lease term at commencement date. In instances where the lease does not provide an implicit rate, the Company estimates an incremental borrowing rate (“IBR”) based on the information available at commencement date to determine the present value of lease payments. ALJ does not have a published credit rating because it has no publicly traded debt. However, the Company does have several privately held debt instruments that were taken into consideration. The Company generates its IBR, using a synthetic credit rating model that estimates the likelihood (probability) of a borrower receiving a given credit rating based on relevant credit factors or predictor variables. It is based on a regression analysis using selected financial ratios of publicly traded industry comparable companies and the companies’ credit ratings. The estimated IBR is then adjusted for (i) the length of the lease term, and (ii) the effect of designating specific collateral with a value equal to the unpaid lease payments. Finally, ALJ applies the estimated IBR on a lease-by-lease basis as each lease has different start and end dates and has different assumptions regarding purchase or renewal options. For facilities leases, ALJ accounts for non-lease components such as maintenance, taxes, and insurance, separately. For equipment leases, ALJ accounts for lease and non-lease components as a single lease component. The difference between the operating lease right-of-use assets and operating lease liabilities primarily relates to adjustments for deferred rent and tenant improvement allowances. The following table presents the location of the ROU assets and liabilities in the Consolidated Balance Sheet and ALJ’s weighted-average lease term and discount rate: (dollars in thousands) As of March 31, 2021 Finance Leases: Property and equipment, at cost $ 16,524 Less accumulated amortization (12,803 ) Property and equipment, net $ 3,721 Finance lease obligations, current portion $ 1,931 Finance lease obligations, less current portion 1,981 Total finance lease liabilities $ 3,912 Operating Leases: Operating lease right-of-use assets $ 31,731 Operating lease obligations - current installments $ 5,025 Operating lease obligations, less current installments 35,633 Total operating lease obligations $ 40,658 Weighted average remaining lease term (years): Finance 2.1 Operating 7.1 Weighted average discount rate: Finance 3.4 % Operating 10.6 % The following table presents the components of lease cost and the location of such cost in ALJ’s Consolidated Statement of Operations: (in thousands) Statement of Operations Location Three Months Ended March 31, 2021 Six Months Ended March 31, 2021 Finance Leases: Amortization of finance lease assets Selling, general, and administrative expense $ 195 $ 507 Amortization of finance lease assets Cost of revenue 114 228 Interest on finance lease liabilities Interest expense 36 88 Total finance lease cost 345 823 Operating Leases: Operating lease cost Selling, general, and administrative expense 1,726 3,483 Operating lease cost Cost of revenue 319 638 Variable lease cost Selling, general, and administrative expense 277 499 Short-term lease cost Selling, general, and administrative expense 9 18 Total operating lease cost 2,331 4,638 Total lease cost $ 2,676 $ 5,461 The following table presents supplemental cash flow information related to leases: (In thousands) Six Months Ended March 31, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for finance leases $ 88 Operating cash flows used for operating leases - continuing operations 2,543 Financing cash flows used for finance leases 1,425 Right-of-use assets obtained in exchange for lease obligations: Finance leases 560 Operating leases — Maturities of lease liabilities as of March 31, 2021 are as follows ( in thousands Year Ending March 31, Finance Leases Operating Leases 2022 $ 2,031 $ 8,976 2023 1,597 8,295 2024 435 7,592 2025 — 7,058 2026 — 7,031 Thereafter — 19,983 Total lease payments 4,063 58,935 Less: imputed interest (151 ) (18,277 ) Total present value of lease payments $ 3,912 $ 40,658 Reported as of March 31, 2021: Current $ 1,931 $ 5,025 Non-current 1,981 35,633 Total $ 3,912 $ 40,658 |
Equity
Equity | 6 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Equity | 11. EQUITY Common Stock Activity during the Six Months Ended March 31, 2021 ALJ issued 23,256 shares of common stock upon the cashless exercise of stock options. 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. 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) 2021 2020 2021 2020 Stock options $ 15 $ 84 $ 32 $ 168 Common stock awards 22 27 53 55 Total stock-based compensation expense $ 37 $ 111 $ 85 $ 223 On March 31, 2021, ALJ had less than $0.1 million of total unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted-average period of approximately 1.2 years. Stock Option Awards ALJ had no option grants during the six months ended March 31, 2021 or March 31, 2020. ALJ had forfeitures of 250,000 options during the six months ended March 31, 2021 and no option forfeitures during the six months ended March 31, 2020. The “intrinsic value” of options is the excess of the value of ALJ stock over the exercise price of such options. The total intrinsic value of options outstanding (of which all are vested or expected to vest) was less than $0.1 million on March 31, 2021. 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 for both the three months ended March 31, 2021 and 2020, and $0.1 million for both the six months ended March 31, 2021 and 2020. Common Stock Options and Warrants Outstanding on March 31, 2021 On March 31, 2021, ALJ had 1.5 million stock options with a weighted average exercise price of $3.54 outstanding and warrants exercisable to purchase 2.9 million shares of common stock with a weighted average exercise price of $1.11 outstanding. |
Income Tax
Income Tax | 6 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 12. INCOME TAX ALJ recorded a provision for income taxes from continuing operations of $0.3 million and a benefit for income taxes from continuing operations of $1.3 million for the six months ended March 31, 2021 and 2020, respectively. ALJ’s effective tax rate for the six months ended March 31, 2021 was (42.0%), as a result of generating state taxable income, offset by changes to the valuation allowance recorded against net deferred tax assets. ALJ’s effective tax rate for the six months ended March 31, 2020 was 2.0%, which was also due to generating state taxable income, offset by changes to the valuation allowance recorded against net deferred tax assets. The decrease in ALJ’s effective tax rate was attributable to a decrease in forecasted pre-tax losses, as well as changes to the valuation allowance recorded against net deferred tax assets. ALJ did not record a provision for or benefit from income taxes for discontinued operations during any period presented. |
Reportable Segments and Geograp
Reportable Segments and Geographic Information | 6 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Reportable Segments and Geographic Information | 13. REPORTABLE SEGMENTS AND GEOGRAPHIC INFORMATION Reportable Segments As discussed in Note 1, ALJ has organized its business along two reportable segments (Faneuil 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, 2021 and 2020: Three Months Ended March 31, 2021 (in thousands) Faneuil Phoenix ALJ Consolidated Net revenue $ 84,424 $ 30,164 $ — $ 114,588 Segment adjusted EBITDA - continuing operations $ 5,004 $ 5,252 $ (1,378 ) $ 8,878 Depreciation and amortization (4,936 ) Interest expense, net (2,451 ) Bank fees accreted to term loans (300 ) Restructuring and cost reduction initiatives (212 ) Loan amendment expenses (89 ) Loss on disposal of assets, net (64 ) Stock-based compensation (37 ) Provision for income taxes (44 ) Net income from continuing operations 745 Net loss from discontinued operations, net of income taxes (860 ) Net loss $ (115 ) Six Months Ended March 31, 2021 (in thousands) Faneuil Phoenix ALJ Consolidated Net revenue $ 170,393 $ 55,332 $ — $ 225,725 Segment adjusted EBITDA - continuing operations $ 8,641 $ 9,298 $ (2,620 ) $ 15,319 Depreciation and amortization (9,968 ) Interest expense, net (5,033 ) Bank fees accreted to term loans (600 ) Provision for income taxes (336 ) Restructuring and cost reduction initiatives (261 ) Loan amendment expenses (177 ) Stock-based compensation (85 ) Gain on disposal of assets, net 2 Net loss from continuing operations (1,139 ) Net loss from discontinued operations, net of income taxes (1,063 ) Net loss $ (2,202 ) Three Months Ended March 31, 2020 (in thousands) Faneuil Phoenix ALJ Consolidated Net revenue $ 58,825 $ 26,653 $ — $ 85,478 Segment adjusted EBITDA - continuing operations $ 1,372 $ 4,178 $ (894 ) $ 4,656 Impairment of goodwill (56,492 ) Depreciation and amortization (4,777 ) Interest expense, net (2,844 ) Restructuring and cost reduction initiatives (475 ) Loan amendment expenses (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 from continuing operations (59,157 ) Net loss from discontinued operations, net of income taxes (2,641 ) Net loss $ (61,798 ) Six Months Ended March 31, 2020 (in thousands) Faneuil Phoenix ALJ Consolidated Net revenue $ 117,392 $ 48,777 $ — $ 166,169 Segment adjusted EBITDA - continuing operations $ 3,025 $ 7,018 $ (1,949 ) $ 8,094 Impairment of goodwill (56,492 ) Depreciation and amortization (9,876 ) Interest expense, net (5,408 ) Restructuring and cost reduction initiatives (789 ) Fair value of warrants issued in connection with loan amendments (716 ) Loan amendment expenses (414 ) Stock-based compensation (223 ) Acquisition-related expenses (99 ) Loss on disposal of assets, net (2 ) Interest from legal settlement 200 Recovery of litigation loss 1,256 Benefit from income taxes 1,257 Net loss from continuing operations (63,212 ) Net loss from discontinued operations, net of income taxes (2,863 ) Net loss $ (66,075 ) 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. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 6 Months Ended |
Mar. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | Organization ALJ Regional Holdings, Inc. (including subsidiaries, referred to collectively herein as “ALJ” or “Company”) is a holding company. During the three and six months ended March 31, 2021 and 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”) Basis of Presentation • Phoenix Color Corp. (including its subsidiaries, “Phoenix”) As a result of selling one of its segments during the three months ended March 31, 2021, discussed below, ALJ has organized its business and corporate structure into two business segments: Faneuil and Phoenix. |
Basis of Presentation | Basis of Presentation In January 2021, ALJ entered into a Purchase and Sale Agreement (“PSA”), by and among the Company, Superior Interior Finishes, LLC, a Nevada limited liability company (“Purchaser” or “Superior”) and Carpets, pursuant to which the Company agreed to sell 100% of the membership interests of Carpets to the Purchaser for an aggregate purchase price of $0.5 million (the “Purchase Price”) in cash (the “Transaction”). At the time of the PSA, Superior was 100% owned by Steve Chesin, the Chief Executive Officer of Carpets. The Company entered into the PSA because its Carpets business segment had been deemed a non-core holding and had underperformed over the past several years. The Transaction, which was approved by a committee of the Board comprised solely of certain independent directors of the Company, closed in February 2021. As such, the results of operations, assets, liabilities, and cash flows of Carpets were classified as discontinued operations in ALJ’s financial statements for all periods presented. 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, 2020, filed with the SEC on December 18, 2020. |
Impact of Coronavirus Pandemic | 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. To date, COVID-19 has not materially impacted ALJ’s financial position, results of operations or cash flows. The Company took immediate actions in March 2020 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 continue to be impacted in the near term by lower sales 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. These include among others, the duration of the outbreak, vaccination rate, emergence of new variants, 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, 2021, ALJ’s total available liquidity was $21.7 million, which included $4.6 million of cash and cash equivalents and $17.1 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 potential effects of COVID-19, ALJ (i) sought an easement of certain financial covenants, under the Financing Agreement (as defined below), in order to maintain compliance therewith, and (ii) the elimination of certain quarterly principal payment obligations. Accordingly, the Company executed 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 Financing Agreement (as amended to date) 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. |
Revenue recognition (Tables)
Revenue recognition (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Revenue Recognition [Abstract] | |
Disaggregation of Revenue | Revenue by contract type was as follows for the three and six months ended March 31, 2021 and 2020: Three Months Ended March 31, Six Months Ended March 31, ( in thousands 2021 2020 2021 2020 Faneuil: Healthcare $ 37,859 $ 23,988 $ 76,702 $ 49,355 Transportation 21,615 18,368 41,710 35,496 Utility 13,756 13,490 26,820 27,417 Government 10,021 581 22,550 1,630 Other 1,173 2,398 2,611 3,494 Total Faneuil $ 84,424 $ 58,825 $ 170,393 $ 117,392 Phoenix: Publisher MSA $ 23,853 $ 19,569 $ 42,967 $ 31,999 Non-MSA 3,677 4,222 7,870 10,782 Commercial MSA 3 380 93 1,185 Non-MSA 2,631 2,482 4,402 4,811 Total Phoenix $ 30,164 $ 26,653 $ 55,332 $ 48,777 Total consolidated revenue, net $ 114,588 $ 85,478 $ 225,725 $ 166,169 |
Contract with Customer Asset and Liabilities | The following table provides information about consolidated contract assets and contract liabilities at March 31, 2021 and September 30, 2020: ( in thousands March 31, 2021 September 30, 2020 Contract assets: Unbilled revenue (1) $ 681 $ 527 Total contract assets $ 681 $ 527 Contract liabilities: Deferred revenue $ 8,056 $ 10,875 Accrued rebates and material rights (2) 2,715 3,097 Total contract liabilities $ 10,771 $ 13,972 (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) Included in accrued expenses. The following table provides changes in consolidated contract assets and contract liabilities during the six months ended March 31, 2021: ( in thousands Contract Assets Contract Liabilities Balance, September 30, 2020 $ 527 $ 13,972 Additions to contract assets 957 — Transfer from contract assets to accounts receivable (803 ) — Revenue recognized — (11,771 ) Accrued rebates — 2,348 Payment of rebates — (2,730 ) Cash received from customer — 8,952 Balance, March 31, 2021 $ 681 $ 10,771 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Acquisitions And Divestitures [Abstract] | |
Summary of Final Fair Values of Assets Acquired and Liabilities Assumed on Business Purchase Date and Purchase Price Details | The following schedule reflects the final 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 (2) (4,900 ) Cash paid at closing $ 2,500 (1) Goodwill was fully impaired and written off in March 2020. (2) At March 31, 2021, the remaining maximum payment was $5.0 million. At March 31, 2021, the fair value was $3.5 million of which $2.1 million was included in accrued expenses and $1.4 million was included in other non-current liabilities on the Consolidated Balance Sheet. The original maximum payment was $7.5 million. |
Summary of Discontinued Operations | As previously disclosed in Note 1, ALJ sold Carpets in February 2021. As a result, ALJ recognized a loss on sale of $0.8 million during the three months ended March 31, 2021 calculated as follows: ( in thousands Cash proceeds $ 500 Net assets sold (1,199 ) Transaction costs (62 ) Impact of income taxes — Total loss on sale $ (761 ) The carrying value of the net assets sold, at the time of closing, were as follows: ( in thousands Current assets $ 4,615 Intangible assets, net 318 Other long-term assets 740 Current liabilities (4,099 ) Long-term liabilities (375 ) Net assets sold $ 1,199 The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations at September 30, 2020: September 30, 2020 Assets: Accounts receivable $ 2,874 Inventories, net 1,221 Prepaid expenses and other current assets 733 Property and equipment, net 598 Intangible assets, net 335 Other long-term assets 51 Total assets of discontinued operations $ 5,812 Liabilities: Accounts payable $ 1,946 Accrued expenses 1,172 Other current liabilities 233 Total long-term liabilities 606 Total liabilities of discontinued operations $ 3,957 The following table presents information regarding certain components of loss from discontinued operations for the three and six months ended March 31, 2021 and 2020: Three Months Ended March 31, Six Months Ended March 31, ( in thousands 2021 2020 2021 2020 Net revenue $ 5,106 $ 10,548 $ 13,799 $ 20,322 Operating income (loss) (99 ) (2,641 ) (302 ) (2,863 ) Loss on sale (761 ) — (761 ) — Loss before income taxes (860 ) (2,641 ) (1,063 ) (2,863 ) Income tax expense — — — — Loss from discontinued operations (860 ) (2,641 ) (1,063 ) (2,863 ) The following table presents significant components of cash flows of discontinued operations for the six months ended March 31, 2021 and 2020: Six Months Ended March 31, ( in thousands 2021 2020 Operating activities Impairment of goodwill $ — $ 2,555 Depreciation and amortization expense 199 284 Provision for bad debts and obsolete inventory 27 30 Changes in operating assets and liabilities: Accounts receivable, net 399 (152 ) Inventories, net (12 ) 5 Prepaid expenses, collateral deposits, and other current assets 24 (304 ) Other assets and liabilities, net 26 126 Investing activities Capital expenditures (7 ) (16 ) |
Concentration Risks (Tables)
Concentration Risks (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Sales Revenue, Segment [Member] | Faneuil [Member] | |
Schedule of Concentration Percentage of Different Customers | Faneuil Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Customer A 13.1 % 10.1 % 13.1 % 12.9 % Customer B ** 10.9 ** 11.3 ** Less than 10% of Faneuil net revenue. |
Sales Revenue, Segment [Member] | Phoenix [Member] | |
Schedule of Concentration Percentage of Different Customers | Phoenix Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Customer A 23.9 % 16.6 % 21.9 % 16.6 % Customer B 20.5 28.2 22.0 26.7 Customer C 10.3 11.7 12.3 11.9 |
Inventory Purchases [Member] | Phoenix [Member] | |
Schedule of Concentration Percentage of Different Customers | ALJ has only one segment, Phoenix, that purchases inventory. Phoenix had suppliers that represented more than 10% of both Phoenix inventory purchases and consolidated ALJ inventory purchases as follows: Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Supplier A 21.4 % 11.7 % 21.3 % 14.4 % Supplier B 13.0 18.8 12.3 17.8 |
Composition of Certain Financ_2
Composition of Certain Financial Statement Captions (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Accounts Receivable | The following table summarizes accounts receivable at the end of each reporting period: March 31, September 30, (in thousands) 2021 2020 Accounts receivable $ 54,646 $ 57,478 Unbilled receivables 772 42 Accounts receivable 55,418 57,520 Less: allowance for doubtful accounts (654 ) (1,033 ) Accounts receivable, net $ 54,764 $ 56,487 |
Summary of Inventories | The following table summarizes inventories at the end of each reporting period: March 31, September 30, (in thousands) 2021 2020 Raw materials $ 4,726 $ 4,260 Semi-finished goods/work in process 1,379 1,923 Finished goods 67 96 Inventories 6,172 6,279 Less: allowance for obsolete inventory (32 ) (47 ) Inventories, net $ 6,140 $ 6,232 |
Summary of Property and Equipment | The following table summarizes property and equipment at the end of each reporting period: March 31, September 30, (in thousands) 2021 2020 Machinery and equipment $ 33,765 $ 33,783 Leasehold improvements 30,842 30,843 Computer and office equipment 22,286 19,630 Building and improvements 16,874 16,896 Software 16,484 16,483 Land 9,267 9,267 Furniture and fixtures 7,749 7,749 Construction and equipment in process 3,117 — Vehicles 360 356 Property and equipment 140,744 135,007 Less: accumulated depreciation and amortization (74,370 ) (67,222 ) Property and equipment, net $ 66,374 $ 67,785 |
Summary of Intangible Assets | The following tables summarize identified intangible assets at the end of each reporting period: March 31, 2021 (in thousands) Weighted Average Original Life (Years) Weighted Average Remaining Life (Years) Gross Accumulated Amortization Net Customer relationships 7.0 4.5 $ 33,590 $ (17,220 ) $ 16,370 Trade names 27.6 23.0 10,240 (2,406 ) 7,834 Supply agreements 10.2 9.1 9,690 (4,684 ) 5,006 Technology 8.0 6.8 3,400 (708 ) 2,692 Non-compete agreements 6.6 5.1 1,550 (457 ) 1,093 Totals $ 58,470 $ (25,475 ) $ 32,995 September 30, 2020 (in thousands) Weighted Average Original Life (Years) Weighted Average Remaining Life (Years) Gross Accumulated Amortization Net Customer relationships 7.0 4.5 $ 33,590 $ (15,818 ) $ 17,772 Trade names 27.6 23.0 10,240 (2,209 ) 8,031 Supply agreements 10.2 9.1 9,690 (4,059 ) 5,631 Technology 8.0 6.8 3,400 (496 ) 2,904 Non-compete agreements 6.6 5.1 1,550 (336 ) 1,214 Totals $ 58,470 $ (22,918 ) $ 35,552 |
Summary of Expected Future Amortization Expense | The following table presents expected future amortization expense for the remainder of Fiscal 2021 and yearly thereafter: (in thousands) Estimated Future Amortization Fiscal 2021 (remaining) $ 2,384 Fiscal 2022 4,596 Fiscal 2023 4,596 Fiscal 2024 4,457 Fiscal 2025 4,144 Thereafter 12,818 Total $ 32,995 |
Summary of Accrued Expenses | The following table summarizes accrued expenses at the end of each reporting period: March 31, September 30, (in thousands) 2021 2020 Accrued compensation and related taxes $ 10,553 $ 9,660 Rebates payable 2,715 3,097 Acquisition contingent consideration 2,100 2,500 Other 1,616 352 Medical and benefit-related payables 1,295 1,438 Legal 1,000 — Interest payable 669 674 Accrued board of director fees 391 130 Deferred lease incentives — 1,289 Total accrued expenses $ 20,339 $ 19,140 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Income (Loss) Per Share of Common Stock | The following table summarizes basic and diluted income (loss) per share of common stock for each period presented: Three Months Ended March 31, Six Months Ended March 31, ( in thousands, except per share amounts 2021 2020 2021 2020 Net income (loss) from continuing operations $ 745 $ (59,157 ) $ (1,139 ) $ (63,212 ) Interest on convertible debt 111 — — — Income (loss) from continuing operations attributable to common stock $ 856 $ (59,157 ) $ (1,139 ) $ (63,212 ) Income from discontinued operations, net of income taxes, attributable to common stock (860 ) (2,641 ) (1,063 ) (2,863 ) Net loss attributable to common stock $ (4 ) $ (61,798 ) $ (2,202 ) $ (66,075 ) Income (loss) per share of common stock–basic: Continuing operations $ 0.02 $ (1.40 ) $ (0.03 ) $ (1.50 ) Discontinued operations $ (0.02 ) $ (0.06 ) $ (0.03 ) $ (0.07 ) Net loss per share (1) $ — $ (1.47 ) $ (0.05 ) $ (1.57 ) Income (loss) per share of common stock–diluted: Continuing operations $ 0.02 $ (1.40 ) $ (0.03 ) $ (1.50 ) Discontinued operations $ (0.02 ) $ (0.06 ) $ (0.03 ) $ (0.07 ) Net loss per share (1) $ — $ (1.47 ) $ (0.05 ) $ (1.57 ) Weighted average shares of common stock outstanding: Basic 42,321 42,173 42,319 42,173 Convertible debt 11,158 — — — Warrants 962 — — — Employee stock option grants 17 — — — Diluted 54,458 42,173 42,319 42,173 Anti-dilutive shares excluded from diluted net income (loss) per share calculation: Convertible debt — — 11,158 — Employee stock option grants 1,420 1,654 1,465 1,654 Warrants 1,297 2,908 2,908 2,908 Total 2,717 4,562 15,531 4,562 __________________________________________________ (1) |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Line of Credit, Term Loan and Equipment Financing | The following table summarizes ALJ’s line of credit, term loan, and equipment financing at the end of each reporting period: March 31, September 30, (in thousands) 2021 2020 Line of credit: Line of credit $ 12,097 $ 14,417 Less: deferred loan costs (500 ) (664 ) Line of credit, net of deferred loan costs $ 11,597 $ 13,753 Current portion of term loans: Current portion of term loan $ 8,200 $ 8,200 Current portion of equipment financing 3,323 1,999 Less: deferred loan costs (361 ) (372 ) Current portion of term loans, net of deferred loan costs $ 11,162 $ 9,827 Term loans, less current portion: Term loan, less current portion $ 58,834 $ 62,336 Term B loan 4,693 4,415 Term C loan 6,026 5,782 Equipment financing, less current portion 1,081 1,611 Less: deferred loan costs (473 ) (662 ) Term loans, less current portion, net of deferred loan costs $ 70,161 $ 73,482 |
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 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, 2021 Term Loans: Financing Agreement Phoenix acquisition August 2015 8.25% $ 1,610 $ 52,342 First Amendment Color Optics acquisition July 2016 8.25% 175 5,702 Third Amendment Printing Components Business acquisition October 2017 8.25% 151 4,893 Fourth Amendment Working capital November 2018 8.25% 114 3,718 Sixth Amendment (Term B loan) N/A December 2019 12.25% — 4,693 Eighth Amendment (Accreted fees) N/A March 2020 13.25% — 379 Ninth Amendment (Term C loan) Working capital May 2020 8.25% — 6,026 Totals $ 2,050 $ 77,753 Line of Credit: Cerberus/PNC Revolver (includes Second, Fifth, Seventh, Eighth, and Ninth Amendments) Working capital August 2015 13.25% $ — $ 12,097 * Range of annual interest rates accrued during the six months ended March 31, 2021. |
Schedule of Estimated Future Minimum Payments under Debt | Estimated Future Minimum Principal Payments Estimated future minimum principal payments for the Cerberus Debt and Equipment Financings are as follows ( in thousands Year Ending March 31, Equipment Financings Term Loan Debt (with quarterly principal payments) Term Loan Debt (with no quarterly principal payments) Total 2022 $ 3,323 $ 8,200 $ — $ 11,523 2023 821 8,200 — 9,021 2024* 260 62,731 10,719 73,710 Total $ 4,404 $ 79,131 $ 10,719 $ 94,254 * The majority of this amount is the final balloon payment due on the Maturity Date. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Summary of Location of ROU Assets and Liabilities in Consolidated Balance Sheet and Weighted Average Lease Term and Discount Rate | The following table presents the location of the ROU assets and liabilities in the Consolidated Balance Sheet and ALJ’s weighted-average lease term and discount rate: (dollars in thousands) As of March 31, 2021 Finance Leases: Property and equipment, at cost $ 16,524 Less accumulated amortization (12,803 ) Property and equipment, net $ 3,721 Finance lease obligations, current portion $ 1,931 Finance lease obligations, less current portion 1,981 Total finance lease liabilities $ 3,912 Operating Leases: Operating lease right-of-use assets $ 31,731 Operating lease obligations - current installments $ 5,025 Operating lease obligations, less current installments 35,633 Total operating lease obligations $ 40,658 Weighted average remaining lease term (years): Finance 2.1 Operating 7.1 Weighted average discount rate: Finance 3.4 % Operating 10.6 % |
Summary of Components of Lease Cost | The following table presents the components of lease cost and the location of such cost in ALJ’s Consolidated Statement of Operations: (in thousands) Statement of Operations Location Three Months Ended March 31, 2021 Six Months Ended March 31, 2021 Finance Leases: Amortization of finance lease assets Selling, general, and administrative expense $ 195 $ 507 Amortization of finance lease assets Cost of revenue 114 228 Interest on finance lease liabilities Interest expense 36 88 Total finance lease cost 345 823 Operating Leases: Operating lease cost Selling, general, and administrative expense 1,726 3,483 Operating lease cost Cost of revenue 319 638 Variable lease cost Selling, general, and administrative expense 277 499 Short-term lease cost Selling, general, and administrative expense 9 18 Total operating lease cost 2,331 4,638 Total lease cost $ 2,676 $ 5,461 |
Supplemental Cash Flow Information Related to Leases | The following table presents supplemental cash flow information related to leases: (In thousands) Six Months Ended March 31, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for finance leases $ 88 Operating cash flows used for operating leases - continuing operations 2,543 Financing cash flows used for finance leases 1,425 Right-of-use assets obtained in exchange for lease obligations: Finance leases 560 Operating leases — |
Schedule of Maturity of Lease Liabilities | Maturities of lease liabilities as of March 31, 2021 are as follows ( in thousands Year Ending March 31, Finance Leases Operating Leases 2022 $ 2,031 $ 8,976 2023 1,597 8,295 2024 435 7,592 2025 — 7,058 2026 — 7,031 Thereafter — 19,983 Total lease payments 4,063 58,935 Less: imputed interest (151 ) (18,277 ) Total present value of lease payments $ 3,912 $ 40,658 Reported as of March 31, 2021: Current $ 1,931 $ 5,025 Non-current 1,981 35,633 Total $ 3,912 $ 40,658 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Summary of Total Stock-Based Compensation Expense Included in Selling General and Administrative Expense on Statements of Operations | The following table sets forth the total stock-based compensation expense included in selling, general, and administrative expense on the Statement of Operations: Three Months Ended March 31, Six Months Ended March 31, (in thousands) 2021 2020 2021 2020 Stock options $ 15 $ 84 $ 32 $ 168 Common stock awards 22 27 53 55 Total stock-based compensation expense $ 37 $ 111 $ 85 $ 223 |
Reportable Segments and Geogr_2
Reportable Segments and Geographic Information (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The following tables present ALJ’s segment information for the three and six months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 (in thousands) Faneuil Phoenix ALJ Consolidated Net revenue $ 84,424 $ 30,164 $ — $ 114,588 Segment adjusted EBITDA - continuing operations $ 5,004 $ 5,252 $ (1,378 ) $ 8,878 Depreciation and amortization (4,936 ) Interest expense, net (2,451 ) Bank fees accreted to term loans (300 ) Restructuring and cost reduction initiatives (212 ) Loan amendment expenses (89 ) Loss on disposal of assets, net (64 ) Stock-based compensation (37 ) Provision for income taxes (44 ) Net income from continuing operations 745 Net loss from discontinued operations, net of income taxes (860 ) Net loss $ (115 ) Six Months Ended March 31, 2021 (in thousands) Faneuil Phoenix ALJ Consolidated Net revenue $ 170,393 $ 55,332 $ — $ 225,725 Segment adjusted EBITDA - continuing operations $ 8,641 $ 9,298 $ (2,620 ) $ 15,319 Depreciation and amortization (9,968 ) Interest expense, net (5,033 ) Bank fees accreted to term loans (600 ) Provision for income taxes (336 ) Restructuring and cost reduction initiatives (261 ) Loan amendment expenses (177 ) Stock-based compensation (85 ) Gain on disposal of assets, net 2 Net loss from continuing operations (1,139 ) Net loss from discontinued operations, net of income taxes (1,063 ) Net loss $ (2,202 ) Three Months Ended March 31, 2020 (in thousands) Faneuil Phoenix ALJ Consolidated Net revenue $ 58,825 $ 26,653 $ — $ 85,478 Segment adjusted EBITDA - continuing operations $ 1,372 $ 4,178 $ (894 ) $ 4,656 Impairment of goodwill (56,492 ) Depreciation and amortization (4,777 ) Interest expense, net (2,844 ) Restructuring and cost reduction initiatives (475 ) Loan amendment expenses (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 from continuing operations (59,157 ) Net loss from discontinued operations, net of income taxes (2,641 ) Net loss $ (61,798 ) Six Months Ended March 31, 2020 (in thousands) Faneuil Phoenix ALJ Consolidated Net revenue $ 117,392 $ 48,777 $ — $ 166,169 Segment adjusted EBITDA - continuing operations $ 3,025 $ 7,018 $ (1,949 ) $ 8,094 Impairment of goodwill (56,492 ) Depreciation and amortization (9,876 ) Interest expense, net (5,408 ) Restructuring and cost reduction initiatives (789 ) Fair value of warrants issued in connection with loan amendments (716 ) Loan amendment expenses (414 ) Stock-based compensation (223 ) Acquisition-related expenses (99 ) Loss on disposal of assets, net (2 ) Interest from legal settlement 200 Recovery of litigation loss 1,256 Benefit from income taxes 1,257 Net loss from continuing operations (63,212 ) Net loss from discontinued operations, net of income taxes (2,863 ) Net loss $ (66,075 ) |
Organization and Basis of Pre_3
Organization and Basis of Presentation - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Jan. 31, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | |
Line Of Credit Facility [Line Items] | |||||
Proceeds from sale of Carpets, net of transaction costs | $ 500 | ||||
Total available liquidity | 21,700 | ||||
Cash and cash equivalents | 4,566 | $ 6,050 | $ 3,099 | $ 4,529 | |
Revolving Credit Facility [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Unused borrowing capacity | $ 17,100 | ||||
Carpets [Member] | Purchase And Sale Agreement [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Equity Method Investment Ownership Percentage | 100.00% | ||||
Proceeds from sale of Carpets, net of transaction costs | $ 500 | ||||
Carpets [Member] | Purchase And Sale Agreement [Member] | Chief Executive Officer One [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Percentage Of Membership Interests Sold | 100.00% |
Recent Accounting Standards - A
Recent Accounting Standards - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Oct. 01, 2020 |
Operating lease right-of-use assets | $ 31,731 | |
Operating lease liabilities | $ 40,658 | |
ASC 842 [Member] | ||
Operating lease right-of-use assets | $ 33,400 | |
Operating lease liabilities | 37,400 | |
Current installments | 5,200 | |
Operating lease obligations | $ 42,600 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation Of Revenue [Line Items] | ||||
Net revenue | $ 114,588 | $ 85,478 | $ 225,725 | $ 166,169 |
Publisher in Phoenix [Member] | Master Service Agreement [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Healthcare | 23,853 | 19,569 | 42,967 | 31,999 |
Publisher in Phoenix [Member] | Non-MSA [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Healthcare | 3,677 | 4,222 | 7,870 | 10,782 |
Commercial in Phoenix [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Healthcare | 30,164 | 26,653 | 55,332 | 48,777 |
Commercial in Phoenix [Member] | Master Service Agreement [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Healthcare | 3 | 380 | 93 | 1,185 |
Commercial in Phoenix [Member] | Non-MSA [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Healthcare | 2,631 | 2,482 | 4,402 | 4,811 |
Faneuil [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Healthcare | 84,424 | 58,825 | 170,393 | 117,392 |
Faneuil [Member] | Transportion [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Healthcare | 21,615 | 18,368 | 41,710 | 35,496 |
Faneuil [Member] | Utility [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Healthcare | 13,756 | 13,490 | 26,820 | 27,417 |
Faneuil [Member] | Health Care [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Healthcare | 37,859 | 23,988 | 76,702 | 49,355 |
Faneuil [Member] | Government [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Healthcare | 10,021 | 581 | 22,550 | 1,630 |
Faneuil [Member] | Other [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Healthcare | $ 1,173 | $ 2,398 | $ 2,611 | $ 3,494 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 | |
Contract assets: | |||
Unbilled revenue | [1] | $ 681 | $ 527 |
Total contract assets | 681 | 527 | |
Contract liabilities: | |||
Deferred revenue | 8,056 | 10,875 | |
Accrued rebates and material rights | [2] | 2,715 | 3,097 |
Total contract liabilities | $ 10,771 | $ 13,972 | |
[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] | Included in accrued expenses. |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Change in Contract Assets and Contract Liabilities (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2021USD ($) | |
Revenue Recognition And Deferred Revenue [Abstract] | |
Beginning balance | $ 527 |
Additions to contract assets | 957 |
Transfer from contract assets to accounts receivable | (803) |
Revenue recognized | (11,771) |
Ending balance | 681 |
Beginning balance | 13,972 |
Accrued rebates | 2,348 |
Payment of rebates | (2,730) |
Cash received from customer | 8,952 |
Ending balance | $ 10,771 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Capitalized costs | $ 100 | |
Capitalized Contract Cost, Amortization | 300 | |
Amortization of deferred loan costs | 364 | $ 603 |
Capitalized costs | 6,000 | |
Transitions activities | 4,400 | |
Impairment Loss | 0 | $ 0 |
Selling, General and Administrative Expense [Member] | ||
Amortization of deferred loan costs | 400 | |
Prepaid Expenses [Member] | ||
Amortization of deferred loan costs | 300 | |
Transitions activities | 1,600 | |
Other Assets [Member] | ||
Amortization of deferred loan costs | 100 | |
Transitions activities | 2,800 | |
Transition Activities [Member] | ||
Transitions activities | $ 6,700 |
Acquisitions and Devestitures -
Acquisitions and Devestitures - Additional Information (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | |
Business Acquisition [Line Items] | |||||||
Fair value of deferred and contingent consideration | $ 2,100 | $ 2,500 | |||||
Acquisition related expenses | $ 50 | $ 99 | |||||
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 period | 3 years | ||||||
Contingent guaranteed payout consideration | $ 2,500 | ||||||
Earn out payment | 2,500 | ||||||
Fair value of deferred and contingent consideration | $ 4,900 | [1] | 3,500 | ||||
RDI Acquistion [Member] | Selling, General and Administrative Expense [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition related expenses | 100 | ||||||
RDI Acquistion [Member] | Maximum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of deferred and contingent consideration | 5,000 | $ 7,500 | |||||
RDI Acquistion [Member] | Accrued Expenses [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of deferred and contingent consideration | 2,100 | ||||||
RDI Acquistion [Member] | Other Non Current Liabilities [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of deferred and contingent consideration | $ 1,400 | ||||||
[1] | At March 31, 2021, the remaining maximum payment was $5.0 million. At March 31, 2021, the fair value was $3.5 million of which $2.1 million was included in accrued expenses and $1.4 million was included in other non-current liabilities on the Consolidated Balance Sheet. The original maximum payment was $7.5 million. |
Acquisitions and Devestitures_2
Acquisitions and Devestitures - Summary of Final Fair Values of Assets Acquired and Liabilities Assumed on Business Purchase Date and Purchase Price Details (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Mar. 31, 2021 | Sep. 30, 2020 | ||
Identified intangible assets: | |||||
Fair value of deferred and contingent consideration | $ (2,100) | $ (2,500) | |||
RDI Acquistion [Member] | |||||
Balance Sheet Caption | |||||
Total current assets | $ 53 | ||||
Fixed assets | 11 | ||||
Identified intangible assets: | |||||
Goodwill | [1] | 2,675 | |||
Total assets | 7,439 | ||||
Accrued expenses | (39) | ||||
Fair value of deferred and contingent consideration | (4,900) | [2] | $ (3,500) | ||
Cash paid at closing | 2,500 | ||||
RDI Acquistion [Member] | Technology [Member] | |||||
Identified intangible assets: | |||||
Technology | 3,400 | ||||
RDI Acquistion [Member] | Non-compete Agreements [Member] | |||||
Identified intangible assets: | |||||
Technology | $ 1,300 | ||||
[1] | Goodwill was fully impaired and written off in March 2020. | ||||
[2] | At March 31, 2021, the remaining maximum payment was $5.0 million. At March 31, 2021, the fair value was $3.5 million of which $2.1 million was included in accrued expenses and $1.4 million was included in other non-current liabilities on the Consolidated Balance Sheet. The original maximum payment was $7.5 million. |
Acquisitions and Devestitures_3
Acquisitions and Devestitures - Summary of Reconized Loss on Sale of Carpets (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended |
Mar. 31, 2021USD ($) | Mar. 31, 2021USD ($) | |
Acquisitions And Divestitures [Abstract] | ||
Proceeds from sale of Carpets, net of transaction costs | $ 500 | |
Net assets sold | (1,199) | $ (1,199) |
Transaction costs | (62) | |
Total loss on sale | $ (761) | $ (761) |
Acquisitions and Devestitures_4
Acquisitions and Devestitures - Summary of Carrying Value of Net Assets Sold (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Acquisitions And Divestitures [Abstract] | ||
Current assets of discontinued operations | $ 4,615 | $ 4,828 |
Intangible assets, net | 318 | |
Other long-term assets | 740 | 51 |
Current liabilities | (4,099) | (3,351) |
Long-term liabilities | (375) | $ (606) |
Net assets sold | $ 1,199 |
Acquisitions and Devestitures_5
Acquisitions and Devestitures - Summary of Casses of Assets and Liabilities of Discontinued Operations (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Assets: | ||
Accounts receivable | $ 2,874 | |
Inventories, net | 1,221 | |
Prepaid expenses and other current assets | 733 | |
Property and equipment, net | 598 | |
Intangible assets, net | 335 | |
Other long-term assets | $ 740 | 51 |
Total assets of discontinued operations | 5,812 | |
Liabilities: | ||
Accounts payable | 1,946 | |
Accrued expenses | 1,172 | |
Other current liabilities | 233 | |
Long-term liabilities of discontinued operations | $ 375 | 606 |
Total liabilities of discontinued operations | $ 3,957 |
Acquisitions and Devestitures_6
Acquisitions and Devestitures - Summary of Components of Loss from Discontinued Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Acquisitions And Divestitures [Abstract] | ||||
Net revenue | $ 5,106 | $ 10,548 | $ 13,799 | $ 20,322 |
Operating income (loss) | (99) | (2,641) | (302) | (2,863) |
Total loss on sale | (761) | (761) | ||
Loss before income taxes | (860) | (2,641) | (1,063) | (2,863) |
Loss from discontinued operations | $ (860) | $ (2,641) | $ (1,063) | $ (2,863) |
Acquisitions and Devestitures_7
Acquisitions and Devestitures - Summary of Components of Cash Flows of Discontinued Operations (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities | ||
Impairment of goodwill | $ 2,555 | |
Depreciation and amortization expense | $ 199 | 284 |
Provision for bad debts and obsolete inventory | 27 | 30 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 399 | (152) |
Inventories, net | (12) | 5 |
Prepaid expenses, collateral deposits, and other current assets | 24 | (304) |
Other assets and liabilities, net | 26 | 126 |
Capital expenditures | $ (7) | $ (16) |
Concentration Risks - Additiona
Concentration Risks - Additional Information (Detail) $ in Millions | 6 Months Ended |
Mar. 31, 2021USD ($)CustomerSupplier | |
Faneuil [Member] | |
Concentration Risk [Line Items] | |
Accounts receivable | $ 5 |
Phoenix [Member] | |
Concentration Risk [Line Items] | |
Accounts receivable | $ 4 |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | |
Concentration Risk [Line Items] | |
Number of customers that represent more than 10% of consolidated net revenue | Customer | 0 |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Minimum [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Supplier Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Number of suppliers representing more than 10% of consolidated inventory purchases | Supplier | 1 |
Supplier Concentration Risk [Member] | Inventory Purchases [Member] | Minimum [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Concentration Risks - Major Cus
Concentration Risks - Major Customers and Accounts Receivable - Schedule of Concentration Percentage of Different Customers (Detail) - Sales Revenue, Segment [Member] - Customer Concentration Risk [Member] | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Customer A [Member] | Faneuil [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 13.10% | 10.10% | 13.10% | 12.90% |
Customer A [Member] | Phoenix [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 23.90% | 16.60% | 21.90% | 16.60% |
Customer B [Member] | Faneuil [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 10.90% | 11.30% | ||
Customer B [Member] | Phoenix [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 20.50% | 28.20% | 22.00% | 26.70% |
Customer C [Member] | Phoenix [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 10.30% | 11.70% | 12.30% | 11.90% |
Concentration Risks - Major C_2
Concentration Risks - Major Customers and Accounts Receivable - Schedule of Concentration Percentage of Different Customers (Parenthetical) (Detail) | 6 Months Ended |
Mar. 31, 2021 | |
Maximum [Member] | Sales Revenue, Segment [Member] | Customer Concentration Risk [Member] | Faneuil [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.00% |
Concentration Risks - Supplier
Concentration Risks - Supplier Risk - Schedule of Concentration Percentage of Different Customers (Detail) - Supplier Concentration Risk [Member] - Phoenix [Member] | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Supplier A [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 21.40% | 11.70% | 21.30% | 14.40% |
Supplier B [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 13.00% | 18.80% | 12.30% | 17.80% |
Composition of Certain Financ_3
Composition of Certain Financial Statement Captions - Summary of Accounts Receivable (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Accounts Receivable Net Current [Abstract] | ||
Accounts receivable | $ 54,646 | $ 57,478 |
Unbilled receivables | 772 | 42 |
Accounts receivable | 55,418 | 57,520 |
Less: allowance for doubtful accounts | (654) | (1,033) |
Accounts receivable, net | $ 54,764 | $ 56,487 |
Composition of Certain Financ_4
Composition of Certain Financial Statement Captions - Summary of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,726 | $ 4,260 |
Semi-finished goods/work in process | 1,379 | 1,923 |
Finished goods | 67 | 96 |
Inventories | 6,172 | 6,279 |
Less: allowance for obsolete inventory | (32) | (47) |
Inventories, net | $ 6,140 | $ 6,232 |
Composition of Certain Financ_5
Composition of Certain Financial Statement Captions - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 140,744 | $ 135,007 |
Less: accumulated depreciation and amortization | (74,370) | (67,222) |
Property and equipment, net | 66,374 | 67,785 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 33,765 | 33,783 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 30,842 | 30,843 |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 16,874 | 16,896 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 16,484 | 16,483 |
Computer and Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 22,286 | 19,630 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,267 | 9,267 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,749 | 7,749 |
Construction and Equipment In Process [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,117 | |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 360 | $ 356 |
Composition of Certain Financ_6
Composition of Certain Financial Statement Captions - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Depreciation and amortization expense including capital leased assets | $ 3,700,000 | $ 3,500,000 | $ 7,400,000 | $ 7,200,000 |
Intangible asset amortization expense | 1,300,000 | $ 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 amount | $ 500,000 | $ 500,000 |
Composition of Certain Financ_7
Composition of Certain Financial Statement Captions - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Sep. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 58,470 | $ 58,470 |
Accumulated Amortization | (25,475) | (22,918) |
Net | $ 32,995 | $ 35,552 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Original Life (Years) | 7 years | 7 years |
Weighted Average Remaining Life (Years) | 4 years 6 months | 4 years 6 months |
Gross | $ 33,590 | $ 33,590 |
Accumulated Amortization | (17,220) | (15,818) |
Net | $ 16,370 | $ 17,772 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Original Life (Years) | 27 years 7 months 6 days | 27 years 7 months 6 days |
Weighted Average Remaining Life (Years) | 23 years | 23 years |
Gross | $ 10,240 | $ 10,240 |
Accumulated Amortization | (2,406) | (2,209) |
Net | $ 7,834 | $ 8,031 |
Supply Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Original Life (Years) | 10 years 2 months 12 days | 10 years 2 months 12 days |
Weighted Average Remaining Life (Years) | 9 years 1 month 6 days | 9 years 1 month 6 days |
Gross | $ 9,690 | $ 9,690 |
Accumulated Amortization | (4,684) | (4,059) |
Net | $ 5,006 | $ 5,631 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Original Life (Years) | 8 years | 8 years |
Weighted Average Remaining Life (Years) | 6 years 9 months 18 days | 6 years 9 months 18 days |
Gross | $ 3,400 | $ 3,400 |
Accumulated Amortization | (708) | (496) |
Net | $ 2,692 | $ 2,904 |
Non-compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Original Life (Years) | 6 years 7 months 6 days | 6 years 7 months 6 days |
Weighted Average Remaining Life (Years) | 5 years 1 month 6 days | 5 years 1 month 6 days |
Gross | $ 1,550 | $ 1,550 |
Accumulated Amortization | (457) | (336) |
Net | $ 1,093 | $ 1,214 |
Composition of Certain Financ_8
Composition of Certain Financial Statement Captions - Summary of Expected Future Amortization Expense (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | ||
Fiscal 2021 (remaining) | $ 2,384 | |
Fiscal 2022 | 4,596 | |
Fiscal 2023 | 4,596 | |
Fiscal 2024 | 4,457 | |
Fiscal 2025 | 4,144 | |
Thereafter | 12,818 | |
Net | $ 32,995 | $ 35,552 |
Composition of Certain Financ_9
Composition of Certain Financial Statement Captions - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Accrued Liabilities Current [Abstract] | ||
Accrued compensation and related taxes | $ 10,553 | $ 9,660 |
Rebates payable | 2,715 | 3,097 |
Fair value of deferred and contingent consideration | 2,100 | 2,500 |
Other | 1,616 | 352 |
Medical and benefit-related payables | 1,295 | 1,438 |
Legal | 1,000 | |
Interest payable | 669 | 674 |
Accrued board of director fees | 391 | 130 |
Deferred lease incentives | 1,289 | |
Total accrued expenses | $ 20,339 | $ 19,140 |
Income (Loss) Per Share - Summa
Income (Loss) Per Share - Summary of Basic and Diluted Income (Loss) Earnings Per Share of Common Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share Diluted [Line Items] | ||||
Net income (loss) from continuing operations | $ 745 | $ (59,157) | $ (1,139) | $ (63,212) |
Interest on convertible debt | 111 | |||
Income (loss) from continuing operations attributable to common stock | 856 | (59,157) | (1,139) | (63,212) |
Income from discontinued operations, net of income taxes, attributable to common stock | (860) | (2,641) | (1,063) | (2,863) |
Net loss attributable to common stock | $ (4) | $ (61,798) | $ (2,202) | $ (66,075) |
Income (loss) per share of common stock–basic: | ||||
Continuing operations | $ 0.02 | $ (1.40) | $ (0.03) | $ (1.50) |
Discontinued operations | (0.02) | (0.06) | (0.03) | (0.07) |
Net loss per share (1) | (1.47) | (0.05) | (1.57) | |
Income (loss) per share of common stock–diluted: | ||||
Continuing operations | 0.02 | (1.40) | (0.03) | (1.50) |
Discontinued operations | $ (0.02) | (0.06) | (0.03) | (0.07) |
Net loss per share (1) | $ (1.47) | $ (0.05) | $ (1.57) | |
Weighted average shares of common stock outstanding: | ||||
Basic | 42,321,000 | 42,173,000 | 42,319,000 | 42,173,000 |
Convertible debt | 11,158,000 | |||
Warrants | 962,000 | |||
Diluted | 54,458,000 | 42,173,000 | 42,319,000 | 42,173,000 |
Anti-dilutive shares excluded from diluted net income (loss) per share calculation: | ||||
Anti-dilutive shares excluded from diluted net income (loss) per share | 2,717,000 | 4,562,000 | 15,531,000 | 4,562,000 |
Employee Stock Option [Member] | ||||
Weighted average shares of common stock outstanding: | ||||
Employee stock option grants | 17,000 | |||
Anti-dilutive shares excluded from diluted net income (loss) per share calculation: | ||||
Anti-dilutive shares excluded from diluted net income (loss) per share | 1,420,000 | 1,654,000 | 1,465,000 | 1,654,000 |
Convertible Debt [Member] | ||||
Anti-dilutive shares excluded from diluted net income (loss) per share calculation: | ||||
Anti-dilutive shares excluded from diluted net income (loss) per share | 11,158,000 | |||
Warrant [Member] | ||||
Anti-dilutive shares excluded from diluted net income (loss) per share calculation: | ||||
Anti-dilutive shares excluded from diluted net income (loss) per share | 1,297,000 | 2,908,000 | 2,908,000 | 2,908,000 |
Debt - Summary of Line of Credi
Debt - Summary of Line of Credit, Term Loan and Equipment Financing (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 | Dec. 31, 2019 |
Line of credit: | |||
Line of credit | $ 12,097 | $ 14,417 | |
Less: deferred loan costs | (500) | (664) | |
Line of credit, net of deferred loan costs | 11,597 | $ 13,753 | 13,753 |
Current portion of term loans: | |||
Current portion of term loan | 8,200 | 8,200 | |
Current portion of equipment financing | 3,323 | 1,999 | |
Less: deferred loan costs | (361) | (372) | |
Current portion of term loans, net of deferred loan costs | 11,162 | 9,827 | 9,827 |
Term loans, less current portion: | |||
Term loan, less current portion | 58,834 | 62,336 | |
Equipment financing, less current portion | 1,081 | 1,611 | |
Less: deferred loan costs | (473) | (662) | |
Term loans, less current portion, net of deferred loan costs | 70,161 | $ 73,482 | 73,482 |
Term loan, less current portion | 58,834 | 62,336 | |
Term Loan B [Member] | |||
Term loans, less current portion: | |||
Term loan, less current portion | 4,693 | 4,415 | |
Term loan, less current portion | 4,693 | 4,415 | |
Term Loan C [Member] | |||
Term loans, less current portion: | |||
Term loan, less current portion | 6,026 | 5,782 | |
Term loan, less current portion | $ 6,026 | $ 5,782 |
Debt - Additional Information (
Debt - Additional Information (Detail) | May 12, 2020USD ($)$ / shares | May 12, 2020USD ($)$ / shares | Apr. 01, 2020USD ($) | Mar. 26, 2020USD ($)TradingDay$ / sharesshares | Feb. 13, 2020 | Dec. 17, 2019USD ($)TradingDay$ / sharesshares | Mar. 31, 2021USD ($)$ / shares | Oct. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Aug. 31, 2015USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($)$ / shares | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2021USD ($)$ / shares | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 17, 2020$ / shares | Mar. 16, 2020USD ($) | Mar. 15, 2020USD ($) |
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Selling, general, and administrative expense | $ 17,800,000 | $ 16,296,000 | $ 34,854,000 | $ 30,701,000 | ||||||||||||||||||||||
Number of vested warrants issued, price per share | $ / shares | $ 3.54 | $ 3.54 | $ 3.54 | |||||||||||||||||||||||
Fair value of warrants issued in connection with term loan modification | 122,000 | 716,000 | ||||||||||||||||||||||||
Additional interest earned | 4.00% | |||||||||||||||||||||||||
Description of convertible debt instrument | 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 of $0.54 per share. | |||||||||||||||||||||||||
Debt instrument conversion price per share | $ / shares | $ 0.54 | $ 0.54 | ||||||||||||||||||||||||
Payments to acquire equipment | $ 4,163,000 | 2,867,000 | ||||||||||||||||||||||||
Financing Agreement [Member] | Minimum [Member] | LIBOR Rate [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Interest Rate | 1.00% | |||||||||||||||||||||||||
Financing Agreement [Member] | Minimum [Member] | Prime Rate [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Interest Rate | 3.25% | |||||||||||||||||||||||||
Financing Agreement [Member] | Maximum [Member] | LIBOR Rate [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Interest Rate | 1.50% | |||||||||||||||||||||||||
Financing Agreement [Member] | Maximum [Member] | Prime Rate [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Interest Rate | 4.75% | |||||||||||||||||||||||||
Equipment Financing [Member] | Phoenix [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Payments to acquire equipment | $ 4,500,000 | $ 2,600,000 | ||||||||||||||||||||||||
Equipment acquired through Issuance of debt security | 1,800,000 | |||||||||||||||||||||||||
Payments to acquire equipment | 500,000 | |||||||||||||||||||||||||
Trade in allowance received | $ 300,000 | |||||||||||||||||||||||||
Agreement term | 36 months | |||||||||||||||||||||||||
Frequency of periodic payment | monthly | |||||||||||||||||||||||||
Interest rate fixed percentage | 2.66% | 2.66% | 2.66% | |||||||||||||||||||||||
Project operational date | Jun. 30, 2021 | |||||||||||||||||||||||||
Equipment Financing [Member] | Phoenix [Member] | Heidelberg Press | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Equipment acquired through Issuance of debt security | $ 3,500,000 | |||||||||||||||||||||||||
Payments to acquire equipment | $ 1,400,000 | $ 900,000 | 3,500,000 | |||||||||||||||||||||||
Trade in allowance received | $ 100,000 | |||||||||||||||||||||||||
Agreement term | 60 months | |||||||||||||||||||||||||
Frequency of periodic payment | monthly | |||||||||||||||||||||||||
Interest rate fixed percentage | 4.50% | 4.50% | 4.50% | |||||||||||||||||||||||
Term Loan [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Selling, general, and administrative expense | 100,000 | 200,000 | ||||||||||||||||||||||||
Quarterly Payments | $ 2,050,000 | |||||||||||||||||||||||||
Payment of debt instrument legal and other fees | $ 0 | 300,000 | 0 | 700,000 | ||||||||||||||||||||||
Deferred loan costs | $ 200,000 | 500,000 | ||||||||||||||||||||||||
Term Loan B [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Percentage of interest payable in kind | 100.00% | |||||||||||||||||||||||||
Percentage of interest earned in kind | 100.00% | |||||||||||||||||||||||||
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 date | Nov. 28, 2023 | |||||||||||||||||||||||||
Annual principal payments as percentage of excess cash flow | 75.00% | |||||||||||||||||||||||||
Excess cash flow payment | $ 0 | 0 | ||||||||||||||||||||||||
Mandatory payment | $ 0 | $ 900,000 | ||||||||||||||||||||||||
Cerberus Term Loan [Member] | Term Loan [Member] | Term Loan Repayment First Year Anniversary [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Prepayment penalty percentage | 0.00% | |||||||||||||||||||||||||
Cerberus Term Loan [Member] | Term Loan [Member] | Term Loan Repayment Second Year Anniversary [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Prepayment penalty percentage | 1.00% | |||||||||||||||||||||||||
Term loan agreement date | Nov. 28, 2021 | |||||||||||||||||||||||||
Cerberus/PNC Revolver [Member] | LIBOR Rate [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Interest Rate | 275.00% | |||||||||||||||||||||||||
Cerberus/PNC Revolver [Member] | Minimum [Member] | LIBOR Rate [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Interest Rate | 675.00% | |||||||||||||||||||||||||
Cerberus/PNC Revolver [Member] | Maximum [Member] | LIBOR Rate [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Interest Rate | 950.00% | |||||||||||||||||||||||||
Sixth Amendment [Member] | Financing Agreement [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt instrument, covenant description | Converted $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; Adjusted 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 ended June 30, 2020, (iv) 3.50:1:00 for each fiscal quarter beginning with the fiscal quarter ended September 30, 2020 through the fiscal quarter ended December 31, 2020, and (v) 3.25:1:00 for each fiscal quarter beginning with the fiscal quarter ended 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; Decreased 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 ended June 30, 2020 and (iii) 1.00:1.00 for the fiscal quarter ended September 30, 2020 and (b) from 1.10:1.00 to 1.05:1.00 for each fiscal quarter beginning with the fiscal quarter ended December 31, 2020 and for each fiscal quarter thereafter; and Increased 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 was due on June 30, 2020 unless one or more persons purchased 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. As a result of the Ninth Amendment (see Ninth Amendment to the Financing Agreement below), the second payment was not required by Cerberus. | |||||||||||||||||||||||||
Leverage ratio | 325.00% | 350.00% | 350.00% | 375.00% | 450.00% | 525.00% | ||||||||||||||||||||
Fixed charge coverage ratio | 100.00% | 95.00% | ||||||||||||||||||||||||
Sixth Amendment [Member] | Financing Agreement [Member] | Minimum [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Fixed charge coverage ratio | 85.00% | 85.00% | ||||||||||||||||||||||||
Fixed charge coverage ratio | 105.00% | |||||||||||||||||||||||||
Sixth Amendment [Member] | Financing Agreement [Member] | Maximum [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Fixed charge coverage ratio | 105.00% | 105.00% | ||||||||||||||||||||||||
Fixed charge coverage ratio | 110.00% | |||||||||||||||||||||||||
Sixth Amendment [Member] | Financing Agreement [Member] | Scenario Forecast [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Leverage ratio | 325.00% | 300.00% | 325.00% | |||||||||||||||||||||||
Debt instrument threshold leverage ratio and thereafter | 300.00% | |||||||||||||||||||||||||
Junior Participation Agreement [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt instrument, payment terms | 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. | |||||||||||||||||||||||||
Debt instrument, interest rate terms | 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 March 31, 2021, 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 | $ 5,000,000 | $ 5,000,000 | $ 4,100,000 | |||||||||||||||||||||||
Additional interest earned | 4.00% | |||||||||||||||||||||||||
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 Rate | 4.00% | |||||||||||||||||||||||||
Debt Instrument, Description | (i) in cash, accrued at the same rate per annum as the Cerberus Term Loan and paid monthly, and (ii) in kind, accrued at 4.00% per annum, payable on the Maturity Date. | |||||||||||||||||||||||||
Number of vested warrants issued, shares | shares | 1,230,000 | |||||||||||||||||||||||||
Warrants expiration period | 5 years | |||||||||||||||||||||||||
Debt instrument, convertible threshold trading days | TradingDay | 30 | |||||||||||||||||||||||||
Number of vested warrants issued, price per share | $ / shares | $ 1.20 | $ 0.54 | ||||||||||||||||||||||||
Junior Participation Agreement [Member] | Term Loan C [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt instrument face amount | $ 5,600,000 | $ 5,600,000 | ||||||||||||||||||||||||
Seventh Amendment [Member] | Financing Agreement [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Debt instrument, covenant description | Extended the seasonal increase period, originally through February 14, 2020, to March 15, 2020, during which the available borrowing limit 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 description | Removed the seasonal decreases in the available borrowing limit under the Cerberus/PNC Revolver 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 the 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. | |||||||||||||||||||||||||
Quarterly Payments | $ 2,100,000 | $ 2,100,000 | $ 2,100,000 | $ 2,100,000 | ||||||||||||||||||||||
Quarterly payments renewed | $ 3,100,000 | $ 3,100,000 | $ 0 | |||||||||||||||||||||||
Monthly fees related to credit facility | $ 100,000 | |||||||||||||||||||||||||
Prime Rate [Member] | LIBOR Rate [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Interest Rate | 275.00% | |||||||||||||||||||||||||
Prime Rate [Member] | Minimum [Member] | LIBOR Rate [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Interest Rate | 575.00% | |||||||||||||||||||||||||
Prime Rate [Member] | Maximum [Member] | LIBOR Rate [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Interest Rate | 850.00% | |||||||||||||||||||||||||
Ninth Agreement [Member] | Financing Agreement [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Leverage ratio | 5.00% | 5.75% | 6.85% | 7.45% | 7.25% | |||||||||||||||||||||
Fixed charge coverage ratio | 0.75% | 0.70% | 0.61% | 0.63% | 0.65% | |||||||||||||||||||||
Quarterly Payments | $ 3,100,000 | $ 2,100,000 | ||||||||||||||||||||||||
Ninth Agreement [Member] | Financing Agreement [Member] | Minimum [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Quarterly Payments | $ 2,100,000 | |||||||||||||||||||||||||
Ninth Agreement [Member] | Financing Agreement [Member] | Maximum [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Quarterly Payments | $ 3,100,000 | |||||||||||||||||||||||||
Ninth Agreement [Member] | Financing Agreement [Member] | Scenario Forecast [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Leverage ratio | 3.75% | 4.00% | ||||||||||||||||||||||||
Debt instrument threshold leverage ratio and thereafter | 3.50% | |||||||||||||||||||||||||
Fixed charge coverage ratio | 0.81% | 0.82% | ||||||||||||||||||||||||
Fixed charge coverage ratio | 1.00% | |||||||||||||||||||||||||
First Amendment To Junior Participation Agreement [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Expected term | 5 years | 5 years | ||||||||||||||||||||||||
Expected volatility rate | 43.80% | 42.30% | ||||||||||||||||||||||||
Dividened rate | 0.00% | 0.00% | ||||||||||||||||||||||||
Risk-free interest rate | 0.50% | 1.70% | ||||||||||||||||||||||||
Fair value of warrants issued in connection with term loan 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 | shares | 400,000 | |||||||||||||||||||||||||
Warrants expiration period | 5 years | |||||||||||||||||||||||||
Debt instrument, convertible threshold trading days | TradingDay | 10 | |||||||||||||||||||||||||
Number of vested warrants issued, price per share | $ / shares | $ 0.72 | |||||||||||||||||||||||||
Cerberus Debt [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Unused borrowing capacity | $ 17,100,000 | $ 17,100,000 | $ 17,100,000 | |||||||||||||||||||||||
Revolving Credit Facility [Member] | ||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||
Line of credit facility maximum borrowing capacity | $ 32,500,000 | |||||||||||||||||||||||||
Unused borrowing capacity | $ 17,100,000 | $ 17,100,000 | $ 17,100,000 | |||||||||||||||||||||||
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 kind | 100.00% |
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, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||||||||
Leverage ratio | 5.00% | 5.75% | 6.85% | 7.45% | 7.25% | |||
Fixed charge coverage ratio | 0.75% | 0.70% | 0.61% | 0.63% | 0.65% | |||
Scenario Forecast [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio | 3.75% | 4.00% | ||||||
Debt instrument threshold leverage ratio and thereafter | 3.50% | |||||||
Fixed charge coverage ratio | 0.81% | 0.82% | ||||||
Fixed charge coverage ratio | 1.00% |
Debt - Summary of Financing Agr
Debt - Summary of Financing Agreement and Amendments (Detail) $ in Thousands | 6 Months Ended | |
Mar. 31, 2021USD ($) | ||
Line of Credit [Member] | Cerberus/PNC Revolver [Member] | ||
Debt Instrument [Line Items] | ||
Use of Proceeds | Working capital | |
Origination Date | 2015-08 | |
Interest Rate | 13.25% | [1] |
Balance | $ 12,097 | |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Quarterly Payments | 2,050 | |
Balance | $ 77,753 | |
Term Loan [Member] | Financing Agreement [Member] | Phoenix Acquisition [Member] | ||
Debt Instrument [Line Items] | ||
Origination Date | 2015-08 | |
Interest Rate | 8.25% | [1] |
Quarterly Payments | $ 1,610 | |
Balance | $ 52,342 | |
Term Loan [Member] | First Amendment [Member] | Color Optics Acquisition [Member] | ||
Debt Instrument [Line Items] | ||
Origination Date | 2016-07 | |
Interest Rate | 8.25% | [1] |
Quarterly Payments | $ 175 | |
Balance | $ 5,702 | |
Term Loan [Member] | Third Amendment [Member] | Printing Components Business Acquisition [Member] | ||
Debt Instrument [Line Items] | ||
Origination Date | 2017-10 | |
Interest Rate | 8.25% | [1] |
Quarterly Payments | $ 151 | |
Balance | $ 4,893 | |
Term Loan [Member] | Fourth Amendment [Member] | ||
Debt Instrument [Line Items] | ||
Origination Date | 2018-11 | |
Interest Rate | 8.25% | [1] |
Quarterly Payments | $ 114 | |
Balance | $ 3,718 | |
Term Loan [Member] | Sixth Amendment [Member] | ||
Debt Instrument [Line Items] | ||
Origination Date | 2019-12 | |
Interest Rate | 12.25% | [1] |
Balance | $ 4,693 | |
Term Loan [Member] | Eighth Amendment [Member] | ||
Debt Instrument [Line Items] | ||
Origination Date | 2020-03 | |
Interest Rate | 13.25% | [1] |
Balance | $ 379 | |
Term Loan [Member] | Ninth Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Origination Date | 2020-05 | |
Interest Rate | 8.25% | [1] |
Balance | $ 6,026 | |
[1] | Range of annual interest rates accrued during the six months ended March 31, 2021. |
Debt - Schedule of Estimated Fu
Debt - Schedule of Estimated Future Minimum Principal Payments for Cerberus Debt and Equipment Financing (Detail) $ in Thousands | Mar. 31, 2021USD ($) | |
Debt Instrument [Line Items] | ||
2022 | $ 11,523 | |
2023 | 9,021 | |
2024* | 73,710 | [1] |
Total estimated future minimum payments | 94,254 | |
Term Loan Debt (with quarterly principal payments) [Member] | ||
Debt Instrument [Line Items] | ||
2022 | 8,200 | |
2023 | 8,200 | |
2024* | 62,731 | [1] |
Total estimated future minimum payments | 79,131 | |
Term Loan Debt (with no quarterly principal payments) [Member] | ||
Debt Instrument [Line Items] | ||
2024* | 10,719 | [1] |
Total estimated future minimum payments | 10,719 | |
Equipment Financing [Member] | ||
Debt Instrument [Line Items] | ||
2022 | 3,323 | |
2023 | 821 | |
2024* | 260 | [1] |
Total estimated future minimum payments | $ 4,404 | |
[1] | The majority of this amount is the final balloon payment due on the Maturity Date. |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | May 15, 2018 | Oct. 14, 2016 | Dec. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2021 | Sep. 22, 2016 |
Loss Contingencies [Line Items] | ||||||||
Non-cash litigation loss | $ (1,256,000) | |||||||
Interest from legal settlement | $ 200,000 | $ 200,000 | ||||||
Selling, General and Administrative Expense [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Non-cash litigation loss | $ (2,900,000) | |||||||
Reduction in selling, general, and administrative expense | (1,300,000) | |||||||
Faneuil [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Recovery value on subcontract | $ 5,100,000 | |||||||
Recovery of subcontract description basis | breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. | |||||||
Litigation settlement, amount of damages awarded | 0 | $ 1,200,000 | ||||||
Litigation settlement, payment amount | $ 1,500,000 | |||||||
3M Company [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Recovery value on subcontract | $ 10,000,000 | |||||||
Recovery of subcontract description basis | breach of contract/indemnification, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. | |||||||
Damages payable | 3,200,000 | |||||||
Additional damages incurred | $ 10,000,000 | |||||||
Litigation settlement, amount of damages awarded | $ 0 | |||||||
Letters of Credit [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Line of credit amount outstanding | $ 3,300,000 | |||||||
Surety Bonds [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Estimated maximum guarantee cash payments | 41,500,000 | |||||||
Employment Agreements [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Total contingent termination payments related to base salary | $ 1,100,000 |
Leases - Additional Information
Leases - Additional Information (Detail) | 6 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Percentage of operating leases for facilities | 95.00% |
Leases - Summary of Location of
Leases - Summary of Location of ROU Assets and Liabilities in Consolidated Balance Sheet and Weighted Average Lease Term and Discount Rate (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Finance Leases: | ||
Property and equipment, at cost | $ 16,524 | |
Less accumulated amortization | (12,803) | |
Property and equipment, net | 3,721 | |
Finance lease obligations - current installments | 1,931 | $ 2,437 |
Finance lease obligations, less current installments | 1,981 | $ 2,900 |
Total finance lease liabilities | 3,912 | |
Operating Leases: | ||
Operating lease right-of-use assets | 31,731 | |
Operating lease obligations - current installments | 5,025 | |
Operating lease obligations, less current installments | 35,633 | |
Total operating lease obligations | $ 40,658 | |
Weighted average remaining lease term (years): | ||
Weighted average remaining lease term of finance leases | 2 years 1 month 6 days | |
Weighted average remaining lease term of operating leases | 7 years 2 months 12 days | |
Weighted average discount rate: | ||
Weighted average discount rate of finance leases | 3.40% | |
Weighted average discount rate of operating leases | 10.60% |
Leases - Summary of Components
Leases - Summary of Components of Lease Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Mar. 31, 2021 | Mar. 31, 2021 | |
Finance Leases: | ||
Total finance lease cost | $ 345 | $ 823 |
Operating Leases: | ||
Operating lease cost | 2,331 | 4,638 |
Total lease cost | 2,676 | 5,461 |
Selling, General and Administrative Expense [Member] | ||
Finance Leases: | ||
Amortization of finance lease assets | 195 | 507 |
Operating Leases: | ||
Operating lease cost | 1,726 | 3,483 |
Variable lease cost | 277 | 499 |
Short-term lease cost | 9 | 18 |
Cost of Revenue [Member] | ||
Finance Leases: | ||
Amortization of finance lease assets | 114 | 228 |
Operating Leases: | ||
Operating lease cost | 319 | 638 |
Interest Expense [Member] | ||
Finance Leases: | ||
Interest on finance lease liabilities | $ 36 | $ 88 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows used for finance leases | $ 88 | |
Operating cash flows used for operating leases - continuing operations | 2,543 | |
Financing cash flows used for finance leases | 1,425 | $ 1,169 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Finance leases | $ 560 |
Schedule of Maturity of Lease L
Schedule of Maturity of Lease Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Finance Leases: | ||
2022 | $ 2,031 | |
2023 | 1,597 | |
2024 | 435 | |
Total lease payments | 4,063 | |
Less: imputed interest | (151) | |
Total present value of lease payments | 3,912 | |
Current | 1,931 | $ 2,437 |
Non-current | 1,981 | $ 2,900 |
Total finance lease liabilities | 3,912 | |
Operating Leases: | ||
2022 | 8,976 | |
2023 | 8,295 | |
2024 | 7,592 | |
2025 | 7,058 | |
2026 | 7,031 | |
Thereafter | 19,983 | |
Total lease payments | 58,935 | |
Less: imputed interest | (18,277) | |
Total present value of lease payments | 40,658 | |
Current | 5,025 | |
Non-current | 35,633 | |
Total operating lease obligations | $ 40,658 |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Sep. 30, 2020 | |
Class Of Stock [Line Items] | |||||
Common stock, shares issued | 42,321,000 | 42,321,000 | 42,298,000 | ||
Weighted-average recognition period of unrecognized compensation cost related to unvested stock options | 1 year 2 months 12 days | ||||
Stock option awards, granted | 0 | 0 | |||
Stock option awards, forfeitures | 250,000 | 0 | |||
Total intrinsic value of options vested outstanding | $ 100 | $ 100 | |||
Stock-based compensation expense | $ 37 | $ 111 | $ 85 | $ 223 | |
Stock options, outstanding | 1,500,000 | 1,500,000 | |||
Number of vested warrants issued, price per share | $ 3.54 | $ 3.54 | |||
Warrants exercisable to purchase outstanding | 2,900,000 | 2,900,000 | |||
Weighted average exercise price, stock warrants | $ 1.11 | $ 1.11 | |||
Common Stock Awards [Member] | |||||
Class Of Stock [Line Items] | |||||
Stock-based compensation expense | $ 22 | 27 | $ 53 | $ 55 | |
Maximum [Member] | |||||
Class Of Stock [Line Items] | |||||
Total unrecognized compensation cost related to unvested stock options | 100 | $ 100 | |||
Maximum [Member] | Common Stock Awards [Member] | |||||
Class Of Stock [Line Items] | |||||
Stock-based compensation expense | $ 100 | $ 100 | |||
Common Stock [Member] | |||||
Class Of Stock [Line Items] | |||||
Common stock, shares issued | 23,256 | 23,256 |
Equity - Summary of Total Stock
Equity - Summary of Total Stock-Based Compensation Expense Included in Selling General and Administrative Expenses on Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 37 | $ 111 | $ 85 | $ 223 |
Stock Options [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 15 | 84 | 32 | 168 |
Common Stock Awards [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 22 | $ 27 | $ 53 | $ 55 |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 300 | |||
Income Tax Expense Benefit | $ 44 | $ (1,297) | $ 336 | $ (1,257) |
Effective income tax | 42.00% | 2.00% |
Reportable Segments and Geogr_3
Reportable Segments and Geographic Information - Additional Information (Detail) | 6 Months Ended |
Mar. 31, 2021Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Reportable Segments and Geogr_4
Reportable Segments and Geographic Information - Summary of Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 114,588 | $ 85,478 | $ 225,725 | $ 166,169 |
Segment adjusted EBITDA - continuing operations | 8,878 | 4,656 | 15,319 | 8,094 |
Impairment of goodwill | (56,492) | (56,492) | ||
Depreciation and amortization | (4,936) | (4,777) | (9,968) | (9,876) |
Interest expense, net | (2,451) | (2,844) | (5,033) | (5,408) |
Bank fees accreted to term loans | (300) | (600) | ||
Restructuring and cost reduction initiatives | (212) | (475) | (261) | (789) |
Fair value of warrants issued in connection with loan amendments | (122) | (716) | ||
Loan amendment expenses | (89) | (239) | (177) | (414) |
Acquisition-related expense | (50) | (99) | ||
Gain (loss) on disposal of assets, net | (64) | 2 | (2) | |
Stock-based compensation | (37) | (111) | (85) | (223) |
Interest from legal settlement | 200 | |||
Recovery of litigation loss | 1,256 | |||
(Provision for) benefit from income taxes | (44) | 1,297 | (336) | 1,257 |
Net income (loss) from continuing operations | 745 | (59,157) | (1,139) | (63,212) |
Net income (loss) from discontinued operations, net of income taxes | (860) | (2,641) | (1,063) | (2,863) |
Net income (loss) | (115) | (61,798) | (2,202) | (66,075) |
Operating Segments [Member] | Faneuil [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 84,424 | 58,825 | 170,393 | 117,392 |
Segment adjusted EBITDA - continuing operations | 5,004 | 1,372 | 8,641 | 3,025 |
Operating Segments [Member] | Phoenix [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 30,164 | 26,653 | 55,332 | 48,777 |
Segment adjusted EBITDA - continuing operations | 5,252 | 4,178 | 9,298 | 7,018 |
ALJ [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment adjusted EBITDA - continuing operations | $ (1,378) | $ (894) | $ (2,620) | $ (1,949) |