Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 22, 2014 | Mar. 31, 2014 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 30-Sep-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | BASI | ||
Entity Registrant Name | BIOANALYTICAL SYSTEMS INC | ||
Entity Central Index Key | 720154 | ||
Current Fiscal Year End Date | -21 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 8,075,847 | ||
Entity Public Float | $16,737,000 | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $981 | $1,304 |
Accounts receivable | ||
Trade, net of allowance of $54 and $87 at September 30, 2014 and 2013, respectively | 2,557 | 3,621 |
Unbilled revenues and other | 878 | 691 |
Inventories | 1,564 | 1,379 |
Prepaid expenses | 675 | 238 |
Total current assets | 6,655 | 7,233 |
Property and equipment, net | 15,949 | 16,913 |
Goodwill | 1,009 | 1,383 |
Debt issue costs, net | 122 | 21 |
Other assets | 39 | 47 |
Total assets | 23,774 | 25,597 |
Current liabilities: | ||
Accounts payable | 2,672 | 3,584 |
Accrued expenses | 1,842 | 1,689 |
Customer advances | 2,990 | 2,815 |
Income tax accruals | 20 | 30 |
Revolving line of credit | 202 | 1,415 |
Fair value of warrant liability | 676 | 612 |
Current portion of capital lease obligation | 279 | 268 |
Current portion of long-term debt | 786 | 613 |
Total current liabilities | 9,467 | 11,026 |
Fair value of interest rate swap | 21 | |
Capital lease obligation, less current portion | 298 | 471 |
Long-term debt, less current portion | 4,452 | 4,641 |
Total liabilities | 14,238 | 16,138 |
Stockholders' equity: | ||
Preferred shares, authorized 1,000,000 shares, no par value: 1,185 Series A shares at $1,000 stated value issued and outstanding at September 30, 2014 and 1,335 at September 30, 2013 | 1,185 | 1,335 |
Common shares, no par value: Authorized 19,000,000 shares; 8,075,335 issued and outstanding at September 30, 2014 and 7,703,891 at September 30, 2013 | 1,980 | 1,887 |
Additional paid-in capital | 21,154 | 19,925 |
Accumulated deficit | -14,790 | -13,720 |
Accumulated other comprehensive income | 7 | 32 |
Total shareholders' equity | 9,536 | 9,459 |
Total liabilities and shareholders' equity | 23,774 | 25,597 |
Series A Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred shares, authorized 1,000,000 shares, no par value: 1,185 Series A shares at $1,000 stated value issued and outstanding at September 30, 2014 and 1,335 at September 30, 2013 | $1,185 | $1,335 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Allowance for doubtful accounts | $54 | $87 |
Common stock, no par value | ||
Common stock, shares authorized | 19,000,000 | 19,000,000 |
Common stock, shares issued | 8,075,335 | 7,703,891 |
Common stock, shares outstanding | 8,075,335 | 7,703,891 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, no par value | ||
Preferred stock, shares issued | 1,185 | 1,335 |
Preferred stock, shares outstanding | 1,185 | 1,335 |
Preferred stock, stated value per share | $1,000 | $1,000 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME [Abstract] | ||
Service revenue | $19,097 | $16,473 |
Product revenue | 5,487 | 5,595 |
Total revenue | 24,584 | 22,068 |
Cost of service revenue | 13,889 | 12,416 |
Cost of product revenue | 2,733 | 2,597 |
Total cost of revenue | 16,622 | 15,013 |
Gross profit | 7,962 | 7,055 |
Operating expenses: | ||
Selling | 1,656 | 1,366 |
Research and development | 658 | 454 |
General and administrative | 4,940 | 4,405 |
Impairment of goodwill | 374 | |
Total operating expenses | 7,628 | 6,225 |
Operating income | 334 | 830 |
Interest expense | -488 | -649 |
Change in fair value of warrant liability - (increase) decrease | -918 | 601 |
Other income | 9 | 7 |
(Loss) income before income taxes | -1,063 | 789 |
Income tax (benefit) expense | 7 | 16 |
Net (loss) income | -1,070 | 773 |
Other comprehensive (loss) income : | ||
Fair value adjustment of interest rate swap | -21 | |
Foreign currency translation adjustment | -4 | 3 |
Comprehensive (loss) income | ($1,095) | $776 |
Basic net (loss) income per share: | ($0.13) | $0.10 |
Diluted net (loss) income per share: | ($0.13) | $0.09 |
Weighted common shares outstanding: | ||
Basic | 7,960 | 7,664 |
Diluted | 7,960 | 8,371 |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) | Total | Preferred Shares [Member] | Common Shares [Member] | Additional paid-in capital [Member] | Accumulated deficit [Member] | Accumulated other comprehensive income (loss) [Member] |
In Thousands, except Share data, unless otherwise specified | ||||||
Balance at Sep. 30, 2012 | $8,377 | $1,335 | $1,871 | $19,635 | ($14,493) | $29 |
Balance, shares at Sep. 30, 2012 | 1,335 | 7,638,738 | ||||
Comprehensive income (loss): | ||||||
Net (loss) income | 773 | 773 | ||||
Foreign currency translation adjustments | 3 | 3 | ||||
Fair value adjustment of interest rate swap | ||||||
Stock based compensation expense | 225 | 225 | ||||
Stock option exercise | ||||||
Stock option exercise, shares | 1,372 | |||||
Common shares issued for dividends/make-whole payment | 81 | 16 | 65 | |||
Common shares issued for dividends/make-whole payment, shares | 63,781 | |||||
Balance at Sep. 30, 2013 | 9,459 | 1,335 | 1,887 | 19,925 | -13,720 | 32 |
Balance, shares at Sep. 30, 2013 | 1,335 | 7,703,891 | ||||
Comprehensive income (loss): | ||||||
Net (loss) income | -1,070 | -1,070 | ||||
Foreign currency translation adjustments | -4 | -4 | ||||
Fair value adjustment of interest rate swap | -21 | -21 | ||||
Stock based compensation expense | 84 | 84 | ||||
Stock option exercise | 3 | 2 | 1 | |||
Stock option exercise, shares | 7,692 | |||||
Conversion of preferred shares to common shares | -150 | 19 | 131 | |||
Conversion of preferred shares to common shares, shares | -150 | 75,000 | ||||
Common shares issued for dividends/make-whole payment | 48 | 5 | 43 | |||
Common shares issued for dividends/make-whole payment, shares | 20,774 | |||||
Common shares issued for Class A Warrant exercises | 1,037 | 67 | 970 | |||
Common shares issued for Class A Warrant exercises, shares | 267,978 | |||||
Balance at Sep. 30, 2014 | $9,536 | $1,185 | $1,980 | $21,154 | ($14,790) | $7 |
Balance, shares at Sep. 30, 2014 | 1,185 | 8,075,335 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating activities: | ||
Net (loss) income | ($1,070) | $773 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,597 | 1,723 |
Employee stock compensation expense | 84 | 225 |
Change in fair value of warrant liability - increase (decrease) | 918 | -601 |
(Gain) loss on sale of property and equipment | -21 | -13 |
Provision for doubtful accounts | -33 | -36 |
Impairment of goodwill | 374 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 910 | 11 |
Inventories | -185 | 277 |
Income tax accruals | -10 | 13 |
Prepaid expenses and other assets | -345 | 66 |
Accounts payable | -863 | -269 |
Accrued expenses | 153 | -378 |
Customer advances | 175 | -197 |
Net cash provided by operating activities | 1,684 | 1,594 |
Investing activities: | ||
Capital expenditures | -490 | -8 |
Proceeds from sale of equipment | 20 | |
Net cash (used) provided by investing activities | -490 | 12 |
Financing activities: | ||
Payments of long-term debt | -5,516 | -588 |
Borrowings of long-term debt | 5,500 | |
Payments of debt issuance costs | -194 | -75 |
Proceeds from exercise of stock options | 3 | |
Proceeds from Class A warrant exercises | 183 | |
Payments on revolving line of credit | -10,542 | -21,814 |
Borrowings on revolving line of credit | 9,329 | 21,785 |
Payments on capital lease obligations | -276 | -330 |
Net cash used by financing activities | -1,513 | -1,022 |
Effect of exchange rate changes | -4 | -1 |
Net (decrease) increase in cash and cash equivalents | -323 | 583 |
Cash and cash equivalents at beginning of year | 1,304 | 721 |
Cash and cash equivalents at end of year | 981 | 1,304 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 389 | 649 |
Cash paid for income taxes | 17 | 3 |
Supplemental disclosure of non-cash financing activities | ||
Preferred stock dividends paid in common shares | -48 | -81 |
Equipment financed under capital leases | 114 | |
Conversion of preferred shares to common shares | 150 | |
Fair value of Class A Warrants exercised | $854 |
DESCRIPTION_OF_THE_BUSINESS
DESCRIPTION OF THE BUSINESS | 12 Months Ended |
Sep. 30, 2014 | |
DESCRIPTION OF THE BUSINESS [Abstract] | |
DESCRIPTION OF THE BUSINESS | 1. DESCRIPTION OF THE BUSINESS |
Bioanalytical Systems, Inc. and its subsidiaries (“We,” the “Company” or “BASi”) engage in contract laboratory research services and other services related to pharmaceutical development. We also manufacture scientific instruments for life sciences research, which we sell with related software for use in industrial, governmental and academic laboratories. Our customers are located throughout the world. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||
(a) | Principles of Consolidation | ||||||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated. | |||||||||||||||||
(b) | Revenue Recognition | ||||||||||||||||
The majority of our bioanalytical and analytical research service contracts involve the development of analytical methods and the processing of bioanalytical samples for pharmaceutical companies and generally provide for a fixed fee for each sample processed. Revenue is recognized under the specific performance method of accounting and the related direct costs are recognized when services are performed. Our preclinical research service contracts generally consist of preclinical studies, and revenue is recognized under the proportional performance method of accounting. Revisions in profit estimates, if any, are reflected on a cumulative basis in the period in which such revisions become known. The establishment of contract prices and total contract costs involves estimates we make at the inception of the contract. These estimates could change during the term of the contract and impact the revenue and costs reported in the consolidated financial statements. Revisions to estimates have generally not been material. Research service contract fees received upon acceptance are deferred until earned, and classified within customer advances. Unbilled revenues represent revenues earned under contracts in advance of billings. | |||||||||||||||||
Product revenue from sales of equipment not requiring installation, testing or training is recognized upon shipment to customers. One product includes internally developed software and requires installation, testing and training, which occur concurrently. Revenue from these sales is recognized upon completion of the installation, testing and training when the services are bundled with the equipment sale. | |||||||||||||||||
(c) | Cash Equivalents | ||||||||||||||||
We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At September 30, 2014, we did not have any cash accounts that exceeded federally insured limits. | |||||||||||||||||
(d) | Accounts Receivable | ||||||||||||||||
We perform periodic credit evaluations of our customers' financial conditions and generally do not require collateral on trade accounts receivable. We account for trade receivables based on the amounts billed to customers. Past due receivables are determined based on contractual terms. We do not accrue interest on any of our trade receivables. The allowance for doubtful accounts is determined by management based on our historical losses, specific customer circumstances, and general economic conditions. Periodically, management reviews accounts receivable and adjusts the allowance based on current circumstances and charges off uncollectible receivables when all attempts to collect have failed. Our allowance for doubtful accounts was $54 and $87 at September 30, 2014 and 2013, respectively. | |||||||||||||||||
A summary of activity in our allowance for doubtful accounts is as follows: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Opening balance | $ | 87 | $ | 123 | |||||||||||||
Charged to expense | 12 | 41 | |||||||||||||||
Accounts recovered | — | (18 | ) | ||||||||||||||
Accounts written off | (45 | ) | (59 | ) | |||||||||||||
Ending balance | $ | 54 | $ | 87 | |||||||||||||
(e) | Inventories | ||||||||||||||||
Inventories are stated at the lower of cost or market using the first-in, first-out (FIFO) cost method of accounting. We evaluate inventories on a regular basis to identify inventory on hand that may be obsolete or in excess of current and future projected market demand. For inventory deemed to be obsolete, we provide a reserve. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates the estimate of future demand. A summary of activity in our inventory obsolescence is as follows for the years ended September 30: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Opening Balance | $ | 359 | $ | 310 | |||||||||||||
Provision for Slow Moving & Obsolesence | 29 | 49 | |||||||||||||||
Write-off of Obsolete & Slow Moving Inventory | (89 | ) | - | ||||||||||||||
Closing Balance | |||||||||||||||||
$ | 299 | $ | 359 | ||||||||||||||
(f) | Property and Equipment | ||||||||||||||||
We record property and equipment at cost, including interest capitalized during the period of construction of major facilities. We compute depreciation, including amortization on capital leases, using the straight-line method over the estimated useful lives of the assets, which we estimate to be: buildings and improvements, 34 to 40 years; machinery and equipment, 5 to 10 years, and office furniture and fixtures, 10 years. Depreciation expense was $1,589 in fiscal 2014 and $1,715 in fiscal 2013. Expenditures for maintenance and repairs are expensed as incurred. | |||||||||||||||||
Property and equipment, net, as of September 30, 2014 and 2013 consisted of the following: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Land and improvements | $ | 914 | $ | 914 | |||||||||||||
Buildings and improvements | 21,374 | 21,250 | |||||||||||||||
Machinery and equipment | 18,135 | 17,571 | |||||||||||||||
Office furniture and fixtures | 690 | 690 | |||||||||||||||
Construction in progress | 13 | 92 | |||||||||||||||
41,126 | 40,517 | ||||||||||||||||
Less: accumulated depreciation | (25,177 | ) | (23,604 | ) | |||||||||||||
Net property and equipment | $ | 15,949 | $ | 16,913 | |||||||||||||
(g) | Long-Lived Assets including Goodwill | ||||||||||||||||
Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized of the amount by which the carrying amount of the asset exceeds the fair value of the asset. | |||||||||||||||||
We carry goodwill at cost. Other intangible assets with definite lives are stated at cost and are amortized on a straight-line basis over their estimated useful lives. All intangible assets acquired that are obtained through contractual or legal right, or are capable of being separately sold, transferred, licensed, rented, or exchanged, are recognized as an asset apart from goodwill. Goodwill is not amortized. | |||||||||||||||||
Goodwill is tested annually for impairment and more frequently if events and circumstances indicate that the asset might be impaired. First, we can assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. We elected to bypass the qualitative assessment aspect of this guidance. We proceeded directly to a two-step quantitative process. In the first step, we compare the fair value of each reporting unit, as computed primarily by present value cash flow calculations, to its book carrying value, including goodwill. We do not believe that market value is indicative of the true fair value of the Company mainly due to average daily trading volumes of less than 1%. If the fair value exceeds the carrying value, no further work is required and no impairment loss is recognized. If the carrying value exceeds the fair value, the goodwill of the reporting unit is potentially impaired and we would then complete step 2 in order to measure the impairment loss. In step 2, the implied fair value is compared to the carrying amount of the goodwill. If the implied fair value of goodwill is less than the carrying value of goodwill, we would recognize an impairment loss equal to the difference. The implied fair value is calculated by allocating the fair value of the reporting unit (as determined in step 1) to all of its assets and liabilities (including unrecognized intangible assets) and any excess in fair value that is not assigned to the assets and liabilities is the implied fair value of goodwill. | |||||||||||||||||
The discount rate, gross margin and sales growth rates are material assumptions utilized in our calculations of the present value cash flows used to estimate the fair value of the reporting units when performing the annual goodwill impairment test. Our reporting units with goodwill at September 30, 2014 are Vetronics, which is included in our Products segment, bioanalytical services and preclinical services, which are both included in our contract research services segment, based on the discrete financial information available which is reviewed by management. We utilize a cash flow approach in estimating the fair value of the reporting units, where the discount rate reflects a weighted average cost of capital rate. The cash flow model used to derive fair value is sensitive to the discount rate and sales growth assumptions used. | |||||||||||||||||
We performed our annual goodwill impairment test for all reporting units mentioned above at September 30, 2014. The estimated fair value of our Vetronics reporting unit was less than its related book value and we determined that its goodwill balance was impaired. This was a result of the rates of growth, earnings and cash flow expectations for future performance that were below the Company's previous projections. In late 2014 we began shifting our market focus and will no longer actively market the Vetronics product offering. However, we will continue to service the units in the field. Accordingly, step two of the goodwill impairment test was completed for the Vetronics reporting unit which resulted in an impairment charge totaling $374 in the fourth fiscal quarter of fiscal 2014. There was no indication of impairment for the Bioanalytical Services and Preclinical Services reporting units as of September 30, 2014. | |||||||||||||||||
Considerable management judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate future cash flows. Assumptions used in our impairment evaluations, such as forecasted sales growth rates and our cost of capital or discount rate, are based on the best available market information. Changes in these estimates or a continued decline in general economic conditions could change our conclusion regarding an impairment of goodwill and potentially result in a non-cash impairment loss in a future period. The assumptions used in our impairment testing could be adversely affected by certain risks. There have been no significant events since the timing of our impairment tests that would have triggered additional impairment testing. | |||||||||||||||||
At September 30, 2014 and 2013, remaining recorded goodwill was $1,009 and $1,383, respectively. The changes in the carrying amount of goodwill for the year ended September 30, 2014, are as follows: | |||||||||||||||||
Vetronics | Bioanalytical | Preclinical | Total | ||||||||||||||
Services | Services | ||||||||||||||||
Balance as of October 1, 2013 | $ | 374 | $ | 971 | $ | 38 | $ | 1,383 | |||||||||
Impairment loss | (374 | ) | - | - | (374 | ) | |||||||||||
Balance as of September 30, 2014 | $ | - | $ | 971 | $ | 38 | $ | 1,009 | |||||||||
We amortize costs of patents and licenses. For the fiscal years ended September 30, 2014 and 2013, the amortization expense associated with these was $8 and $8, respectively. | |||||||||||||||||
(h) | Advertising Expense | ||||||||||||||||
We expense advertising costs as incurred. Advertising expense was $41 and $40 for the years ended September 30, 2014 and 2013, respectively. | |||||||||||||||||
(i) | Stock-Based Compensation | ||||||||||||||||
We have a stock-based employee compensation plan and a stock-based employee and outside director compensation plan, which are described more fully in Note 9. All options granted under these plans have an exercise price equal to the market value of the underlying common shares on the date of grant. We expense the estimated fair value of stock options over the vesting periods of the grants. Our policy is to recognize expense for awards subject to graded vesting using the straight-line attribution method, reduced for estimated forfeitures. | |||||||||||||||||
We use a binomial option-pricing model as our method of valuation for share-based awards, requiring us to make certain assumptions about the future, which are more fully described in Note 9. | |||||||||||||||||
(j) | Income Taxes | ||||||||||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We record valuation allowances based on a determination of the expected realization of tax assets. | |||||||||||||||||
We may recognize the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount of the accrual for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that we believe is more likely than not to be realized upon settlement of the position. | |||||||||||||||||
We record interest and penalties accrued in relation to uncertain income tax positions as a component of income tax expense. Any changes in the liability for uncertain tax positions would impact our effective tax rate. We do not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months. | |||||||||||||||||
(k) | Fair Value of Financial Instruments | ||||||||||||||||
The provisions of the Fair Value Measurements and Disclosure Topic defines fair value, establishes a consistent framework for measuring fair value and provides the disclosure requirements about fair value measurements. This Topic also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's judgment about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: | |||||||||||||||||
• | Level 1 – Valuations based on quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. | ||||||||||||||||
• | Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. | ||||||||||||||||
• | Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. | ||||||||||||||||
In May 2011, we issued Class A and B Warrants that are measured at fair value on a recurring basis. We recorded these warrants as a liability determining the fair value at inception on May 11, 2011. Subsequent quarterly fair value measurements, using the Black Scholes model which is considered a level 2 measurement, are calculated with fair value changes charged to the statement of operations and comprehensive income (loss). Class B Warrants expired in May 2012 and the liability was reduced to zero. The assumptions used to compute the fair value of the warrants at September 30, 2014 and 2013 were as follows: | |||||||||||||||||
30-Sep-14 | 30-Sep-13 | ||||||||||||||||
Warrant A | Warrant A | ||||||||||||||||
Risk-free interest rate | 0.41 | % | 0.51 | % | |||||||||||||
Dividend yield | 0 | % | 0 | % | |||||||||||||
Volatility of the Company's common stock | 63.58 | % | 71.15 | % | |||||||||||||
Expected life of the options (years) | 1.6 | 2.6 | |||||||||||||||
Fair value per unit | $ | 0.846 | $ | 0.444 | |||||||||||||
The carrying amounts for cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other assets, accounts payable and other accruals approximate their fair values because of their nature and respective duration. The carrying value of the note payable entered into this fiscal year approximates fair value due to the variable nature of the interest rates. | |||||||||||||||||
We use an interest rate swap, designated as a hedge, to fix 60% of the debt from our new Huntington credit facility. We did not enter into this derivative transaction to speculate on interest rates, but to hedge interest rate risk. The swap is recognized on the balance sheet at its fair value. The fair value is determined utilizing a cash flow model that takes into consideration interest rates and other inputs observable in the market from similar types of instruments, and is therefore considered a level 2 measurement. Using a level 3 measurement, the fair value of the goodwill of the Vectronics reporting unit was $0 with a carrying value of $374, leading to the goodwill impairment expense in fiscal 2014 of $374. | |||||||||||||||||
The following table summarizes fair value measurements by level as of September 30, 2014, for the Company's financial liabilities measured at fair value on a recurring basis: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Interest rate swap agreement | $ | - | $ | 21 | $ | - | |||||||||||
Class A warrant liability | $ | - | $ | 676 | $ | - | |||||||||||
The following table summarizes fair value measurements by level as of September 30, 2013, for the Company's financial liabilities measured at fair value on a recurring basis: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Interest rate swap agreement | $ | - | $ | - | $ | - | |||||||||||
Class A warrant liability | $ | - | $ | 612 | $ | - | |||||||||||
(l) | Use of Estimates | ||||||||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates as part of the issuance of these consolidated financial statements include but are not limited to the determination of fair values, allowance for doubtful accounts, inventory obsolescence, deferred tax valuations, depreciation, impairment charges and stock compensation. Our actual results could differ from those estimates. | |||||||||||||||||
(m) | Research and Development | ||||||||||||||||
In fiscal 2014 and 2013, we incurred $658 and $454, respectively, on research and development. Separate from our contract research services business, we maintain applications research and development to enhance our products business. We expense research and development costs as incurred. | |||||||||||||||||
(n) | Comprehensive Income (Loss) | ||||||||||||||||
We report comprehensive income (loss) on our Consolidated Statements of Operations. Other comprehensive income (loss) represents changes in shareholders' equity and is comprised of foreign currency translation adjustments as well as changes in the fair value of our interest rate swap. | |||||||||||||||||
(o) | Foreign Currency | ||||||||||||||||
For our subsidiary outside of the United States that operates in a local currency environment, income and expense items are translated to United States dollars at the monthly average rates of exchange prevailing during the year, assets and liabilities are translated at year-end exchange rates and equity accounts are translated at historical exchange rates. Translation adjustments are accumulated in a separate component of shareholders' equity in the consolidated balance sheets and are included in the determination of Accumulated Other Comprehensive Income (AOCI) in the consolidated statements of shareholders' equity. Transaction gains and losses are included in the determination of net income (loss) in the consolidated statements of operations and comprehensive income (loss). The balance in AOCI at September 30, 2014 and 2013 was $28 and $32, respectively. | |||||||||||||||||
(p) | Interest Rate Swap | ||||||||||||||||
The Company uses an interest rate swap designated as a cash flow hedge to fix 60% of the Huntington debt due to mitigate changes in interest rates. The changes in the fair value of the interest rate swap are recorded in Accumulated Other Comprehensive Income (AOCI) to the extent effective. We assess on an ongoing basis whether the derivative that is used in the hedging transaction is highly effective in offsetting changes in cash flows of the hedged debt. The terms of the interest rate swaps match the terms of the underlying debt resulting in no ineffectiveness. When we determine that a derivative is not highly effective as a hedge, hedge accounting is discontinued and we reclassify gains or losses that were accumulated in AOCI to other income (expense), net on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The balance in AOCI at September 30, 2014 and 2013 was ($21) and $0, respectively. | |||||||||||||||||
(q) Reclassifications | |||||||||||||||||
Certain amounts in the fiscal 2013 consolidated financial statements have been reclassified to conform to the fiscal 2014 presentation without affecting previously reported net income or stockholders' equity. | |||||||||||||||||
(r) Debt issuance costs | |||||||||||||||||
The Company capitalizes costs associated with the issuance of debt and amortizes them as additional interest expense over the lives of the debt on a straight-line basis. Upon prepayment of the related debt, the Company accelerates the recognition of an appropriate amount of the costs as refinancing or extinguishment of debt. Additional expense arising from such prepayments during fiscal 2014 was $48. | |||||||||||||||||
On May 14, 2014, the Company entered into a Credit Agreement (“Agreement”) with Huntington Bank. The Agreement includes a term loan maturing in May 2019. The term loan proceeds were used to pay off the Regions replacement note payable. In connection with the credit facility, the Company recorded fees of $134 which were deferred and will be amortized over the life of the credit facility. In addition, the Company accelerated the recognition of the deferred issuance costs from the previous Regions replacement note payable extension. | |||||||||||||||||
(s) New Accounting Pronouncements | |||||||||||||||||
Effective October 1, 2017, the Company will be required to adopt the new guidance of ASC Topic 606, Revenue from Contracts with Customers (Topic 606), which will supersede the revenue recognition requirements in ASC Topic 605, Revenue Recognition. Topic 606 requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance requires the Company to apply the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation. The Company will be required to adopt Topic 606 either on a full retrospective basis to each prior reporting period presented or on a modified retrospective basis with the cumulative effect of initially applying the new guidance recognized at the date of initial application. If the Company elects the modified retrospective approach, it will be required to provide additional disclosures of the amount by which each financial statement line item is affected in the current reporting period, as compared to the guidance that was in effect before the change, and an explanation of the reasons for significant changes. The Company has not yet assessed the impact of the new guidance on its consolidated financial statements. | |||||||||||||||||
In July 2013, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that requires that an entity net its liability for unrecognized tax positions against a net operating loss carry forward, a similar tax loss or a tax credit carry-forward when settlement in this manner is available under the tax law. The Company will adopt this guidance effective at the beginning of its 2015 fiscal year. The adoption of this updated authoritative guidance is not expected to have a significant impact on the Company's Consolidated Financial Statements. | |||||||||||||||||
In February 2013, the FASB issued authoritative guidance that amends the presentation of accumulated other comprehensive income and clarifies how to report the effect of significant reclassifications out of accumulated other comprehensive income. The guidance, which became effective for the Company on a prospective basis at the beginning of its 2014 fiscal year, requires footnote disclosures regarding the changes in accumulated other comprehensive income by component and the line items affected in the statements of operations. | |||||||||||||||||
SALE_OF_PREFERRED_SHARES_AND_W
SALE OF PREFERRED SHARES AND WARRANTS | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
SALE OF PREFERRED SHARES AND WARRANTS [Abstract] | |||||||||||||
SALE OF PREFERRED SHARES AND WARRANTS | 3. SALE OF PREFERRED SHARES AND WARRANTS (not in thousands) | ||||||||||||
On May 11, 2011, we completed a registered public offering of 5,506 units at a price of $1,000 per unit. Each unit consisted of one 6% Series A convertible preferred share which is convertible into 500 common shares, one Class A Warrant to purchase 250 common shares at an exercise price of $2.00 per share, and one Class B Warrant to purchase 250 common shares at an exercise price of $2.00 per share. | |||||||||||||
The designation, rights, preferences and other terms and provisions of the Series A preferred shares are set forth in the Certificate of Designation. Until May 11, 2014, the Series A preferred shares had a stated dividend rate of 6% per annum, payable quarterly in cash or, subject to certain conditions, in common shares or a combination of cash and common shares, at our election. After May 11, 2014, the Series A preferred shares participate in any dividends payable upon our common shares on an "as converted" basis. If the preferred shares had converted prior to May 11, 2014, we would have also been required to pay to the converting holder in cash, or subject to certain conditions, in common shares or a combination of cash and common shares, a “make-whole” payment of $180 per $1,000 of the stated value of the preferred shares less any dividends paid prior to conversion. The Class A Warrants are exercisable currently and expire in May 2016. The Class B Warrants expired in May 2012. The net proceeds from the sale of the units, after deducting the fees and expenses of the placement agent and other expenses were $4.6 million. We used the proceeds for the purchase of laboratory equipment and for working capital and general corporate purposes. | |||||||||||||
The holders of the preferred shares are not entitled to vote together with common shareholders unless converted to common shares. The Series A preferred shares are considered to be an equity instrument. The warrants have been accounted for as a liability and valued using the Black Scholes pricing model. The total fair value of the Class A Warrants at issuance was $1.973 million and the total fair value of the Class B Warrants at issuance was $1.072 million for a total liability of $3.045 million. The assumptions used to compute the fair value of the warrants at the time of issuance were as follows: | |||||||||||||
Warrant A | Warrant B | ||||||||||||
Risk-free interest rate | 1.87 | % | 0.18 | % | |||||||||
Dividend yield | 0 | % | 0 | % | |||||||||
Volatility of the Company's common stock | 106.91 | % | 116.01 | % | |||||||||
Expected life of the options (years) | 5 | 1 | |||||||||||
Fair value per unit | $ | 1.433 | $ | 0.779 | |||||||||
The Series A preferred shares were valued using the common shares available upon conversion of all preferred shares of 2,753,000 and the closing market price of our stock on May 11, 2011 of $1.86. Adding in the total possible dividend for the preferred shares of 18% over three years, or $991,080, the total calculated fair value of the preferred shares was $6.112 million. We then allocated the gross proceeds of the offering of $5.506 million to the preferred shares after deducting the fair value of the warrants described above. | |||||||||||||
We have also recognized a beneficial conversion feature related to the Series A preferred shares, to the extent that the conversion feature, based on the proceeds allocated to the Series A preferred shares, was in-the-money at the time they were issued. Such beneficial conversion feature amounted to approximately $2.461 million on May 11, 2011. Because the Series A preferred shares do not have a stated redemption date and may be converted by the holder at any time, the discount recognized by the allocation of proceeds to the beneficial conversion feature has been immediately charged through accumulated deficit as a deemed dividend to the holders of the Series A preferred shares in the amount of $5.506 million. This will be the only deemed distribution recorded for the Series A preferred shares included in this offering. Further, because the preferred dividends or make-whole payments are payable any time after the closing on May 11, 2011 at the option of the holder, we recognized the full value, $991,080, as a liability included in accounts payable and charged immediately through accumulated deficit. There will be no other dividends recorded for the Series A preferred shares included in this offering. | |||||||||||||
As of September 30, 2014, 4,321 preferred shares have been converted into 2,564,108 common shares and 217,366 common shares have been issued for quarterly preferred dividends for remaining outstanding, unconverted preferred shares. As of September 30, 2014, 577,897 warrants have been exercised. At September 30, 2014, 1,185 preferred shares and 798,603 warrants remained outstanding. Also at September 30, 2014, $0 of the $991,080 in preferred dividends remains accrued in accounts payable for future preferred dividends. All dividends have been paid according to the agreement. The assumptions used to compute the fair value of the warrants at September 30, 2014 and 2013 were as follows: | |||||||||||||
30-Sep-14 | 30-Sep-13 | ||||||||||||
Warrant A | Warrant A | ||||||||||||
Risk-free interest rate | 0.41 | % | 0.51 | % | |||||||||
Dividend yield | 0 | % | 0 | % | |||||||||
Volatility of the Company's common stock | 63.58 | % | 71.15 | % | |||||||||
Expected life of the options (years) | 1.6 | 2.6 | |||||||||||
Fair value per unit | $ | 0.846 | $ | 0.444 | |||||||||
The following table summarizes the change in the estimated fair value of the Company's Class A warrants as of September 30: | |||||||||||||
2014 | 2013 | ||||||||||||
Balance at beginning of year | $ | 612 | $ | 1,213 | |||||||||
Fair value of Class A warrants exercised | (854 | ) | — | ||||||||||
Increase (decrease) in fair value of Class A warrants | 918 | (601 | ) | ||||||||||
Balance at end of year | $ | 676 | $ | 612 | |||||||||
For the years ended September 30, 2014 and 2013, the Company recognized (expense) income of ($918) and $601, respectively, due to the change in the estimated fair value of the Company's warrants. This expense (income) was recorded as Change in fair value of warrant liability on the Company's consolidated statements of operations and comprehensive (loss) income for the respective periods. |
INCOME_LOSS_PER_SHARE
INCOME (LOSS) PER SHARE | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
INCOME (LOSS) PER SHARE [Abstract] | |||||||||
INCOME (LOSS) PER SHARE | 4. INCOME (LOSS) PER SHARE | ||||||||
We compute basic income (loss) per share using the weighted average number of common shares outstanding. The Company has three categories of dilutive potential common shares: the Series A preferred shares issued in May 2011 in connection with the registered direct offering, the Warrants issued in connection with the same offering in May 2011, and shares issuable upon exercise of options. We compute diluted earnings per share using the if-converted method for preferred stock and warrants and the treasury stock method for stock options. Shares issuable upon exercise of options were not considered in computing diluted income (loss) per share for the year ended September 30, 2014, because they were anti-dilutive. Warrants for 799 common shares and 592 common shares issuable upon conversion of preferred shares were not considered in computing diluted income (loss) per share for the year ended September 30, 2014, because they were also anti-dilutive. | |||||||||
The following table reconciles our computation of basic net income (loss) per share to diluted net income (loss) per share: | |||||||||
Years Ended | |||||||||
September 30, | |||||||||
2014 | 2013 | ||||||||
Basic net income (loss) per share: | |||||||||
Net income (loss) | $ | (1,070 | ) | $ | 773 | ||||
Weighted average common shares outstanding | 7,960 | 7,664 | |||||||
Basic net income (loss) per share | $ | (0.13 | ) | $ | 0.1 | ||||
Diluted net income (loss) per share: | |||||||||
Net income (loss) applicable to common shareholders | $ | (1,070 | ) | $ | 773 | ||||
Weighted average common shares outstanding | 7,960 | 7,664 | |||||||
Plus: Incremental shares from assumed conversions: | |||||||||
Series A preferred shares | — | 705 | |||||||
Dilutive stock options/shares | — | 2 | |||||||
Diluted weighted average common shares outstanding | 7,960 | 8,371 | |||||||
Diluted net income (loss) per share | $ | (0.13 | ) | $ | 0.09 |
INVENTORIES
INVENTORIES | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
INVENTORIES [Abstract] | |||||||||||||
INVENTORIES | 5. INVENTORIES | ||||||||||||
Inventories at September 30 consisted of the following: | |||||||||||||
2014 | 2013 | ||||||||||||
Raw materials | $ | 1,228 | $ | 1,157 | |||||||||
Work in progress | 295 | 322 | |||||||||||
Finished goods | 340 | 259 | |||||||||||
$ | 1,863 | $ | 1,738 | ||||||||||
Obsolescence reserve | (299 | ) | (359 | ) | |||||||||
$ | 1,564 | $ | 1,379 |
LEASE_ARRANGEMENTS
LEASE ARRANGEMENTS | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
LEASE ARRANGEMENTS [Abstract] | |||||||||||||
LEASE ARRANGEMENTS | 6. LEASE ARRANGEMENTS | ||||||||||||
The total amount of equipment capitalized under capital lease obligations as of September 30, 2014 and 2013 was $5,892 and $5,778, respectively. Accumulated amortization on capital leases at September 30, 2014 and 2013 was $5,358 and $5,083, respectively. Amortization of assets acquired through capital leases is included in depreciation expense. | |||||||||||||
In fiscal 2014, we had one new capital lease addition of $114 for laboratory equipment at our Evansville facility. Due to restructuring activities outlined in Note 12, we terminated a capital lease for laboratory equipment in the UK. The activity resulted in a liability reduction of $322. Future minimum lease payments on capital leases at September 30, 2014 for the next five years are as follows: | |||||||||||||
Principal | Interest | Total | |||||||||||
2014 | $ | 279 | $ | 29 | $ | 308 | |||||||
2015 | 230 | 12 | 242 | ||||||||||
2016 | 27 | 4 | 31 | ||||||||||
2017 | 25 | 2 | 27 | ||||||||||
2018 | 16 | - | 16 | ||||||||||
$ | 577 | $ | 47 | $ | 624 | ||||||||
We lease office space and equipment under non-cancelable operating leases that terminate at various dates through 2016. The UK building lease expires in 2023 but includes an opt out provision after 7 years, or in fiscal 2015. Certain of these leases contain renewal options. Total rental expense under these leases was $87 and $66 in fiscal 2014 and 2013, respectively. | |||||||||||||
Future minimum lease payments for the following fiscal years under operating leases at September 30, 2014 are as follows: | |||||||||||||
2015 | $ | 856 | |||||||||||
2016 | 16 | ||||||||||||
2017 | 1 | ||||||||||||
2018 | - | ||||||||||||
2019 | - | ||||||||||||
$ | 873 |
DEBT_ARRANGEMENTS
DEBT ARRANGEMENTS | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
DEBT ARRANGEMENTS [Abstract] | |||||||||||||||||||||||||
DEBT ARRANGEMENTS | 7. DEBT ARRANGEMENTS | ||||||||||||||||||||||||
Long-term debt consisted of the following at September 30: | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Term loan payable to a bank, payable in monthly principal installments of $65. Interest is variable at LIBOR plus 325 basis points which was 3.4% at September 30, 2014. Collateralized by underlying property. Due May, 2019. | $ | 5,238 | $ | - | |||||||||||||||||||||
Replacement note payable to a bank, payable in monthly principal installments of $47 plus interest. The interest rate is 6%. Collateralized by West Lafayette and Evansville properties. Due October, 2014. | - | 5,254 | |||||||||||||||||||||||
$ | 5,238 | $ | 5,254 | ||||||||||||||||||||||
Less: Current portion | 786 | 613 | |||||||||||||||||||||||
$ | 4,452 | $ | 4,641 | ||||||||||||||||||||||
Cash interest payments of $389 and $649 were made in 2014 and 2013, respectively. The following table summarizes the annual principal payments under our term loan through maturity in May 2019: | |||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Total | ||||||||||||||||||||
Term loan | $ | 786 | $ | 786 | $ | 786 | $ | 785 | $ | 2,095 | $ | 5,238 | |||||||||||||
Note payable | |||||||||||||||||||||||||
Prior to obtaining the new credit facility described below, we had a term loan from Regions Bank (“Regions”), which was secured by mortgages on our facilities in West Lafayette and Evansville, Indiana. Prior to termination in January 2014, we had a $3,000 line of credit with EGC. The EGC line of credit was subject to availability limitations. | |||||||||||||||||||||||||
On November 9, 2012, we executed a sixth amendment with Regions which we further modified on December 21, 2012. In the sixth amendment, Regions agreed to extend the term loan and mortgage loan maturity dates to October 31, 2013. The unpaid principal on the notes was incorporated into a replacement note payable for $5,786 bearing interest at LIBOR plus 400 basis points (minimum of 6.0%) with monthly principal payments of approximately $47 plus interest. The replacement note payable was secured by real estate at our West Lafayette and Evansville, Indiana locations. The replacement note payable had a balance of $5,254 at September 30, 2013. | |||||||||||||||||||||||||
On October 31, 2013, we executed a seventh amendment with Regions to extend the note payable maturity date to October 31, 2014. | |||||||||||||||||||||||||
Regions required us to maintain a fixed charge coverage ratio of not less than 1.25 to 1.00 and a total liabilities to tangible net worth ratio of not greater than 2.10 to 1.00. Failure to comply with those covenants would have been a default under the Regions loans, requiring us to negotiate with Regions regarding loan modifications or waivers. If we were unable to obtain such modifications or waivers, Regions could have accelerated the maturity of the loans and caused a cross default with our other lender. The Regions loan agreements contained cross-default provisions with each other and formerly with the revolving line of credit with EGC described below that was terminated in January 2014. | |||||||||||||||||||||||||
Revolving Line of Credit | |||||||||||||||||||||||||
On January 31, 2014, we paid off the remaining balance on our $3,000 revolving line of credit agreement (“Credit Agreement”) with EGC. Pursuant to the terms of the Credit Agreement, the line of credit would have automatically renewed on January 31, 2014 unless either party gave a 60-day notice of intent to terminate or withdraw. On October 30, 2013, we informed EGC of our intent not to renew the line of credit on January 31, 2014 and the line of credit terminated on that date. | |||||||||||||||||||||||||
During the first four months of fiscal 2014, borrowings under the Credit Agreement bore interest at an annual rate equal to Citibank's Prime Rate plus five percent (5%) with minimum monthly interest of $15. Interest was paid monthly. The line of credit also carried an annual facilities fee of 2% and a 0.2% collateral monitoring fee. Borrowings under the Credit Agreement were secured by a blanket lien on our personal property, including certain eligible accounts receivable, inventory, and intellectual property assets, a second mortgage on our West Lafayette and Evansville real estate and all common stock of our U.S. subsidiaries and 65% of the common stock of our non-United States subsidiary. Borrowings were calculated based on 75% of eligible accounts receivable. Under the Credit Agreement, as amended, the Company had agreed to restrict advances to subsidiaries, limit additional indebtedness and capital expenditures and maintain a minimum tangible net worth of at least $8,000. The Credit Agreement also contained cross-default provisions with the Regions loan and any future EGC loans. At September 30, 2013, we had $1,415 outstanding on this line. | |||||||||||||||||||||||||
New Credit Facility | |||||||||||||||||||||||||
On May 14, 2014, we entered into a Credit Agreement (“Agreement”) with Huntington Bank. The Agreement includes both a term loan and a revolving loan and is secured by mortgages on our facilities in West Lafayette and Evansville, Indiana and liens on our personal property. | |||||||||||||||||||||||||
The term loan for $5,500 bears interest at LIBOR plus 325 basis points with monthly principal payments of approximately $65 plus interest. The term loan matures in May 2019. On May 15, 2014, we used the proceeds from the term loan to pay off the Regions replacement note payable. The balance on the term loan at September 30, 2014 was $5,238. | |||||||||||||||||||||||||
The revolving loan for $2,000 matures in May 2016 and bears interest at LIBOR plus 300 basis points with interest paid monthly. The revolving loan also carries a facility fee of .25%, paid quarterly, for the unused portion of the revolving loan. The revolving loan includes an annual clean-up provision that requires the Company to maintain a balance of not more than 20% of the maximum loan of $2,000 for a period of 30 days in any 12 month period while the revolving loan is outstanding. The revolving loan balance was $202 at September 30, 2014. | |||||||||||||||||||||||||
The Agreement requires us to maintain a fixed charge coverage ratio of not less than 1.10 to 1.00 and a maximum total leverage ratio of not greater than 3.00 to 1.00 from the date of the Agreement through September 30, 2015 and 2.50 to 1.00 commencing after October 1, 2015 until maturity. The Agreement also contains various other covenants, including restrictions on the incurrence of certain indebtedness, liens, investments, acquisitions, asset sales and cash dividends. | |||||||||||||||||||||||||
We entered into an interest rate swap agreement with respect to the above loans to fix the interest rate with respect to 60% of the value of the term loan at approximately 5.0%. We entered into this derivative transaction to hedge interest rate risk of the related debt obligation and not to speculate on interest rates. The changes in the fair value of the interest rate swap are recorded in Accumulated Other Comprehensive Income (AOCI) to the extent effective. We assess on an ongoing basis whether the derivative that is used in the hedging transaction is highly effective in offsetting changes in cash flows of the hedged debt. The terms of the interest rate swaps match the terms of the underlying debt resulting in no ineffectiveness. | |||||||||||||||||||||||||
We incurred $134 of costs in connection with the issuance of the credit facility. These costs were capitalized and are being amortized to interest expense on a straight-line basis over five years based on the contractual term of the credit facility. As of September 30, 2014, the unamortized portion of debt issuance costs related to the credit facility was $122, and was included in Debt issue costs, net on the consolidated balance sheets. We incurred $60 of costs in connection with the seventh amendment with Regions. These costs and $21 of unamortized costs at September 30, 2013 were expensed during the year ended September 30, 2014. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
INCOME TAXES [Abstract] | |||||||||||||
INCOME TAXES | 8. INCOME TAXES | ||||||||||||
Significant components of our deferred tax assets and liabilities as of September 30 are as follows: | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets - Current: | |||||||||||||
Inventory | $ | 187 | $ | 208 | |||||||||
Accrued compensation and vacation | 246 | 192 | |||||||||||
Accrued expenses and other | 178 | 185 | |||||||||||
Total current deferred tax assets | 611 | 585 | |||||||||||
Deferred tax liabilities – Current: | |||||||||||||
Prepaid expenses | (72 | ) | (49 | ) | |||||||||
Total net current deferred tax assets | 539 | 536 | |||||||||||
Deferred tax assets - Noncurrent: | |||||||||||||
Domestic net operating loss carryforwards | 4,828 | 5,737 | |||||||||||
Stock compensation expense | 54 | 45 | |||||||||||
Foreign tax credit carryover | - | 119 | |||||||||||
AMT credit carryover | 58 | 54 | |||||||||||
Total noncurrent deferred tax assets | 4,940 | 5,955 | |||||||||||
Deferred tax liabilities - Noncurrent: | |||||||||||||
Unrealized gain/loss - warrant liability | (180 | ) | (530 | ) | |||||||||
Investment in subsidiary | (3,173 | ) | (3,214 | ) | |||||||||
Basis difference for fixed assets | (408 | ) | (461 | ) | |||||||||
(3,761 | ) | (4,205 | ) | ||||||||||
Total net noncurrent deferred tax assets | 1,179 | 1,750 | |||||||||||
Valuation allowance for net deferred tax assets | (1,718 | ) | (2,286 | ) | |||||||||
Net deferred tax asset (liability) | $ | - | $ | - | |||||||||
Significant components of the provision (benefit) for income taxes are as follows as of the year ended September 30: | |||||||||||||
2014 | 2013 | ||||||||||||
Current: | |||||||||||||
Federal | $ | 5 | $ | 13 | |||||||||
State and local | 2 | 3 | |||||||||||
Foreign | - | - | |||||||||||
Deferred: | |||||||||||||
Federal | - | - | |||||||||||
State and local | - | - | |||||||||||
Foreign | - | - | |||||||||||
Income tax (benefit) expense | $ | 7 | $ | 16 | |||||||||
The effective income tax rate on continuing operations varied from the statutory federal income tax rate as follows: | |||||||||||||
2014 | 2013 | ||||||||||||
Federal statutory income tax rate | 34 | % | 34 | % | |||||||||
Increases (decreases): | |||||||||||||
State and local income taxes, net of Federal tax benefit, if applicable | (0.1 | ) | 0.3 | ||||||||||
Nondeductible expenses | (15.2 | ) | 7.2 | ||||||||||
Nontaxable foreign (gains) losses | - | - | |||||||||||
Uncertain tax positions | - | - | |||||||||||
Valuation allowance changes | (19.3 | ) | (39.4 | ) | |||||||||
Other | - | - | |||||||||||
Effective income tax rate | (0.6 | )% | 2.1 | % | |||||||||
An impairment of goodwill in the amount of $374 was recorded that was not deductible for tax purposes. Therefore, no tax benefit was recorded. | |||||||||||||
In the prior year, we had foreign net operating loss carry forwards of $8,626 under current UK tax law that will never be recognized due to the closure of the UK facility. Consequently, the deferred tax asset and the valuation allowance related to the foreign net operating losses have been removed. | |||||||||||||
Realization of deferred tax assets associated with the net operating loss carry forward and credit carry forward is dependent upon generating sufficient taxable income prior to their expiration. The valuation allowance in fiscal 2014 and 2013 was $1,718 and $2,286, respectively for our domestic operations. Payments made in fiscal 2014 and 2013 for income taxes amounted to $17 and $3, respectively. | |||||||||||||
At September 30, 2014, we had domestic net operating loss carry forwards of approximately $11,959 for federal and $15,744 for state, which expire from September 30, 2015 through 2032. Further, we have an alternative minimum tax credit carry forward of approximately $58 available to offset future federal income taxes. This credit has an unlimited carry forward period. | |||||||||||||
We may recognize the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon regulatory examination based on the technical merits of the position. The amount of the benefit for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that we believe is more likely than not to be realized upon ultimate settlement of the position. At September 30, 2014, a $16 liability remained for other uncertain income tax positions. | |||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||||||
Change in unrecognized tax benefits: | |||||||||||||
2014 | 2013 | ||||||||||||
Balance at beginning of the year | $ | 16 | $ | 16 | |||||||||
Additions based on tax positions related to the current year | - | - | |||||||||||
Additions for tax positions of prior years | - | - | |||||||||||
Reductions for tax positions of prior years | - | - | |||||||||||
Settlements | - | - | |||||||||||
Balance at end of the year | $ | 16 | $ | 16 | |||||||||
As noted in the table above, there has been no change in our gross uncertain tax positions during fiscal 2014 based on a state tax position. | |||||||||||||
We are no longer subject to U.S. federal tax examinations for years before 2010 or state and local for years before 2009, with limited exceptions. For federal purposes, the tax attributes carried forward could be adjusted through the examination process and are subject to examination 3 years from the date of utilization. Furthermore, we are no longer subject to income tax examinations in the United Kingdom for years prior to 2009. | |||||||||||||
We have assessed the application of Internal Revenue Code Section 382 regarding certain limitations on the future usage of net operating losses. No limitation applies as of September 30, 2014, and we will continue to monitor activities in the future. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATON | 9. STOCK-BASED COMPENSATION | ||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Plans and Activity | |||||||||||||||||||||||||||||||||||||||||||||||||
In March 2008, our shareholders approved the 2008 Stock Option Plan (the “Plan”) to replace the 1997 Outside Director Stock Option Plan and the 1997 Employee Stock Option Plan. Future common shares will be granted from the 2008 Stock Option Plan. The purpose of the Plan is to promote our long-term interests by providing a means of attracting and retaining officers, directors and key employees. The Compensation Committee shall administer the Plan and approve the particular officers, directors or employees eligible for grants. Under the Plan, employees are granted the option to purchase our common shares at fair market value on the date of the grant. Generally, options granted vest and become exercisable in four equal installments commencing one year from date of grant and expire upon the earlier of the employee's termination of employment with us, or ten years from the date of grant. This plan terminates in fiscal 2018. The maximum number of common shares that may be granted under the Plan is 500 shares. At September 30, 2014, 234 shares remain available for grants under the Plan. | |||||||||||||||||||||||||||||||||||||||||||||||||
The Compensation Committee has also issued non-qualified stock option grants with vesting periods different from the Plan. As of September 30, 2014 and 2013, total non-qualified stock options outstanding were 155. | |||||||||||||||||||||||||||||||||||||||||||||||||
The weighted-average assumptions used to compute the fair value of options granted for the fiscal years ended September 30 were as follows: | |||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Risk-free interest rate | 2.36 | % | 1.42 | % | |||||||||||||||||||||||||||||||||||||||||||||
Dividend yield | 0 | % | 0 | % | |||||||||||||||||||||||||||||||||||||||||||||
Volatility of the expected market price of the Company's common stock | 94.50%-94.70 | % | 93.60%-93.70 | % | |||||||||||||||||||||||||||||||||||||||||||||
Expected life of the options (years) | 8 | 8 | |||||||||||||||||||||||||||||||||||||||||||||||
A summary of our stock option activity for all options and related information for the years ended September 30, 2014 and 2013, respectively, is as follows (in thousands except for share prices): | |||||||||||||||||||||||||||||||||||||||||||||||||
Options | Weighted- | Weighted- | Weighted-Average | Aggregate | |||||||||||||||||||||||||||||||||||||||||||||
(shares) | Average | Average Grant | Remaining | Intrinsic | |||||||||||||||||||||||||||||||||||||||||||||
Exercise Price | Date Fair Value | Contractual Life | Value | ||||||||||||||||||||||||||||||||||||||||||||||
(Years) | |||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding - October 1, 2012 | 354 | $ | 1.99 | ||||||||||||||||||||||||||||||||||||||||||||||
Exercised | (7 | ) | $ | 1.35 | $ | 1.14 | |||||||||||||||||||||||||||||||||||||||||||
Granted | 178 | $ | 1.46 | $ | 1.2 | ||||||||||||||||||||||||||||||||||||||||||||
Terminated | (46 | ) | $ | 2.35 | |||||||||||||||||||||||||||||||||||||||||||||
Outstanding - September 30, 2013 | 479 | $ | 1.77 | $ | 1.35 | 7.9 | $ | 43 | |||||||||||||||||||||||||||||||||||||||||
Outstanding - October 1, 2013 | 479 | $ | 1.77 | ||||||||||||||||||||||||||||||||||||||||||||||
Exercised | (11 | ) | $ | 1.14 | $ | 0.95 | |||||||||||||||||||||||||||||||||||||||||||
Granted | 40 | $ | 2.69 | $ | 2.25 | ||||||||||||||||||||||||||||||||||||||||||||
Terminated | (82 | ) | $ | 2 | |||||||||||||||||||||||||||||||||||||||||||||
Outstanding - September 30, 2014 | 426 | $ | 1.83 | $ | 1.41 | 7.2 | $ | 348 | |||||||||||||||||||||||||||||||||||||||||
Exercisable at September 30, 2014 | 317 | $ | 1.83 | $ | 1.38 | 6.7 | $ | 279 | |||||||||||||||||||||||||||||||||||||||||
The aggregate intrinsic value is the product of the total options outstanding and the net positive difference of our common share price on September 30, 2014 and the options' exercise price. A summary of non-vested options for the year ended September 30, 2014 is as follows: | |||||||||||||||||||||||||||||||||||||||||||||||||
Number | Weighted- | ||||||||||||||||||||||||||||||||||||||||||||||||
of Shares | Average Grant | ||||||||||||||||||||||||||||||||||||||||||||||||
Date Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-vested options at October 1, 2013 | 261 | $ | 1.11 | ||||||||||||||||||||||||||||||||||||||||||||||
Granted | 40 | $ | 2.25 | ||||||||||||||||||||||||||||||||||||||||||||||
Vested | (131 | ) | $ | 1.08 | |||||||||||||||||||||||||||||||||||||||||||||
Forfeited | (61 | ) | $ | 1.2 | |||||||||||||||||||||||||||||||||||||||||||||
Non-vested options at September 30, 2014 | 109 | $ | 1.51 | ||||||||||||||||||||||||||||||||||||||||||||||
Eight options with an intrinsic value of $13 were exercised using a cashless exercise and 3 options with an intrinsic value of $4 were exercised using cash in fiscal 2014, which resulted in the issuance of 7 common shares, In fiscal 2013, 7 options with an intrinsic value of $1 were exercised using a cashless exercise, resulting in the issuance of 1 common share. As of September 30, 2014, our total unrecognized compensation cost related to non-vested stock options was $116 and is expected to be recognized over a weighted-average service period of 1.06 years. As of September 30, 2014, there are 155 shares outstanding that were granted outside of the Plan. Stock-based compensation expense for employee stock options for the years ended September 30, 2014 and 2013 was $84 and $225, respectively. | |||||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes outstanding and exercisable options as of September 30, 2014 (in thousands except per share amounts): | |||||||||||||||||||||||||||||||||||||||||||||||||
Range of Exercise Prices | Shares | Weighted- | Weighted- | Shares | Weighted- | ||||||||||||||||||||||||||||||||||||||||||||
Outstanding | Average | Average | Exercisable | Average | |||||||||||||||||||||||||||||||||||||||||||||
Remaining | Exercise Price | Exercise Price | |||||||||||||||||||||||||||||||||||||||||||||||
Contractual | |||||||||||||||||||||||||||||||||||||||||||||||||
Life (Years) | |||||||||||||||||||||||||||||||||||||||||||||||||
$ | 0.79-1.01 | 86 | 6.54 | $ | 0.96 | 62 | $ | 0.96 | |||||||||||||||||||||||||||||||||||||||||
$ | 1.02-4.59 | 296 | 8.12 | $ | 1.58 | 211 | $ | 1.38 | |||||||||||||||||||||||||||||||||||||||||
$ | 4.60-8.79 | 44 | 2.13 | $ | 5.18 | 44 | $ | 5.18 |
RETIREMENT_PLAN
RETIREMENT PLAN | 12 Months Ended |
Sep. 30, 2014 | |
RETIREMENT PLAN [Abstract] | |
RETIREMENT PLAN | 10. RETIREMENT PLAN |
We have a 401(k) Retirement Plan (the “Plan”) covering all employees over twenty-one years of age with at least one year of service. Under the terms of the Plan, we contribute 1% of each participant's total wages to the Plan and match 22% of the first 10% of the employee contribution. The Plan also includes provisions for various contributions which may be instituted at the discretion of the Board of Directors. The contribution made by the participant may not exceed 30% of the participant's annual wages. We made no discretionary contributions under the plan in 2014 and 2013. Similar to fiscal 2013, we suspended our match of the employee contribution as part of our cost reduction efforts. Contribution expense was $1 and $1 in fiscal 2014 and 2013, respectively. The amounts recorded in fiscal 2013 relate to statutory contributions for our European location. |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
SEGMENT INFORMATION [Abstract] | |||||||||||||
SEGMENT INFORMATION | 11. SEGMENT INFORMATION | ||||||||||||
We operate in two principal segments – contract research services and research products. Our contract research services segment provides research and development support on a contract basis directly to pharmaceutical companies. Our products segment provides liquid chromatography, electrochemical and physiological monitoring products to pharmaceutical companies, universities, government research centers, and medical research institutions. We evaluate performance and allocate resources based on these segments. Certain of our assets are not directly attributable to the Services or Products segments. These assets are grouped into the Corporate segment and include cash and cash equivalents, deferred income taxes, refundable income taxes, debt issue costs and certain other assets. We do not allocate such items to the principal segments because they are not used to evaluate their financial position. The accounting policies of these segments are the same as those described in the summary of significant accounting policies. | |||||||||||||
(a) | Operating Segments | ||||||||||||
Years Ended September 30, | |||||||||||||
2014 | 2013 | ||||||||||||
Revenue: | |||||||||||||
Service | $ | 19,097 | $ | 16,473 | |||||||||
Product | 5,487 | 5,595 | |||||||||||
$ | 24,584 | $ | 22,068 | ||||||||||
Operating income (loss) : | |||||||||||||
Service | $ | 469 | $ | 77 | |||||||||
Product | (135 | ) | 753 | ||||||||||
$ | 334 | $ | 830 | ||||||||||
Interest Expense | (488 | ) | (649 | ) | |||||||||
Change in fair value of warrant liability- (increase) decrease | (918 | ) | 601 | ||||||||||
Other income | 9 | 7 | |||||||||||
(Loss) income before income taxes | $ | (1,063 | ) | $ | 789 | ||||||||
Years Ended | |||||||||||||
September 30, | |||||||||||||
2014 | 2013 | ||||||||||||
Identifiable assets: | |||||||||||||
Service | $ | 14,132 | $ | 15,149 | |||||||||
Product | 5,837 | 6,399 | |||||||||||
Corporate | 3,805 | 4,049 | |||||||||||
$ | 23,774 | $ | 25,597 | ||||||||||
Goodwill, net: | |||||||||||||
Service | $ | 1,009 | $ | 1,009 | |||||||||
Product | — | 374 | |||||||||||
$ | 1,009 | $ | 1,383 | ||||||||||
Depreciation and amortization: | |||||||||||||
Service | $ | 1,421 | $ | 1,519 | |||||||||
Product | 176 | 204 | |||||||||||
$ | 1,597 | $ | 1,723 | ||||||||||
Capital Expenditures: | |||||||||||||
Service | $ | 426 | $ | (1 | ) | ||||||||
Product | 64 | 9 | |||||||||||
$ | 490 | $ | 8 | ||||||||||
(b) | Geographic Information | ||||||||||||
Years Ended | |||||||||||||
September 30, | |||||||||||||
2014 | 2013 | ||||||||||||
Sales to External Customers: | |||||||||||||
North America | $ | 22,184 | $ | 19,635 | |||||||||
Pacific Rim | 740 | 1,019 | |||||||||||
Europe | 1,086 | 1,111 | |||||||||||
Other | 574 | 303 | |||||||||||
$ | 24,584 | $ | 22,068 | ||||||||||
Long-lived Assets: | |||||||||||||
North America | $ | 17,119 | $ | 18,364 | |||||||||
$ | 17,119 | $ | 18,364 | ||||||||||
(c) | Major Customers | ||||||||||||
In fiscal 2014 our preclinical services group significantly expanded its presence at two important existing customers. In fiscal 2014, Arrowhead accounted for approximately 12.1% of total sales and 18.5% of total trade accounts receivable at September 30, 2014. In fiscal 2013, Arrowhead accounted for approximately 0.4% of total sales and 4.6% of total trade accounts receivable at September 30, 2013. In fiscal 2014, Principia Biopharma accounted for approximately 8.7% of total sales and 8.4% of total trade accounts receivable at September 30, 2014. In fiscal 2013, Principia Biopharma accounted for approximately 0.4% of total sales and7.1% of total trade accounts receivable at September 30, 2013. Both Arrowhead and Principia Biopharma are included in our contract research services segment. | |||||||||||||
In fiscal 2014, Boehringer Ingelheim remained an important customer, accounting for approximately 5.9% of total sales and 2.5% of total trade accounts receivable at September 30, 2014. In fiscal 2013, Boehringer Ingelheim accounted for approximately 6.0% of total sales and 2.6% of total trade accounts receivable at September 30, 2013. Pfizer, Inc. also remains an important large client, accounting for approximately 1.7% and 4.9% of our total revenues in fiscal 2014 and 2013, respectively. Pfizer, Inc. accounted for 1.5% and 3.3% of total trade accounts receivable at September 30, 2014 and 2013, respectively. Both Boehringer Ingelheim and Pfizer are included in our contract research services segment. |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
RESTRUCTURING [Abstract] | |||||||||||||||||||||
RESTRUCTURING | 12. RESTRUCTURING | ||||||||||||||||||||
In March 2012, we announced a plan to restructure our bioanalytical laboratory operations. We consolidated our laboratory in McMinnville, Oregon into our 120,000 square foot headquarters facility in West Lafayette, Indiana. This plan was implemented to reduce operating costs and strengthen our ability to meet clients' needs by improving laboratory utilization. In the fourth fiscal quarter of 2012, we decided to initiate closure of our facility and bioanalytical laboratory in Warwickshire, United Kingdom after careful evaluation of its financial performance and analysis of our strategic alternatives. We continue to sell our products globally while further consolidating delivery of our CRO services into our Indiana locations. As part of the overall evaluation of our business, personnel reductions in the Selling, R&D and General and Administrative functions were also implemented at both of our Indiana locations during the second half of fiscal 2012. In total, 74 employees were terminated as part of the restructuring activities. | |||||||||||||||||||||
We reserved for lease payments at the cease use date and have considered free rent, sublease rentals and the number of days it would take to restore the space to its original condition prior to our improvements. In the first quarter of fiscal 2013, we began amortizing into general and administrative expense, equally through the cease use date, the estimated rent income of $200 when the reserve was originally established. We have been unsuccessful at subleasing the facility. Based on these, we have $961 reserved for UK lease related costs. | |||||||||||||||||||||
The following table sets forth the rollforward of the restructuring activity for the year ended September 30, 2014. | |||||||||||||||||||||
Balance, | Total | Cash | Other | Balance, | |||||||||||||||||
September 30, | Charges | Payments | September 30, | ||||||||||||||||||
2013 | 2014 | ||||||||||||||||||||
Lease related costs | $ | 877 | $ | 84 | $ | - | $ | - | $ | 961 | |||||||||||
Receivable from sale of equipment | (16 | ) | - | - | 16 | - | |||||||||||||||
Other costs | 117 | - | - | - | 117 | ||||||||||||||||
Total | $ | 978 | $ | 84 | $ | - | $ | 16 | $ | 1,078 | |||||||||||
Other costs include legal and professional fees and other costs incurred in connection with transitioning services from sites being closed as well as costs incurred to remove improvements previously made to the UK facility. Other activity in the reserve rollforward primarily reflects a receivable for settlement of the capital lease in the UK. |
SELFINSURANCE
SELF-INSURANCE | 12 Months Ended |
Sep. 30, 2014 | |
SELF-INSURANCE [Abstract] | |
SELF-INSURANCE | 13. SELF-INSURANCE |
The Company is self-insured for certain costs related to its employee health plan. Costs resulting from noninsured losses are charged to income when incurred. The Company has purchased insurance which limits its exposure for individual claims to approximately $75 and has an aggregating specific deductible of $85 at September 30, 2014. The Company's expense related to the plan was $1,055 and $1,035 for the years ended September 30, 2014 and 2013. |
MANAGEMENTS_PLAN
MANAGEMENT'S PLAN | 12 Months Ended |
Sep. 30, 2014 | |
MANAGEMENT'S PLAN [Abstract] | |
MANAGEMENT'S PLAN | 14. MANAGEMENT'S PLAN |
Our long-term strategic objective is to maximize the Company's intrinsic value per share. While we remain focused on reducing our costs through productivity and better processes and a continued emphasis on generating free cash flow, we are dedicated to the strategies that drive our top-line growth. We are intensifying our efforts to improve our processes, embrace change and wisely employ our stronger liquidity position. | |
Revenues for the year ended September 30, 2014 increased 11.4% to $24,584 compared to $22,068 for the year ended September 30, 2013. In fiscal 2014, we experienced increased demand in our Contract Research services segment. Most notably significant revenue gains were reported by the Preclinical Services which supports our clients' Phase II & III clinical trials. In our Product segment, revenue was down slightly compared to same period one year ago due in part from lower sales of certain analytical instruments. Cost of revenue for the year ended September 30, 2014 was $16,622 or 67.6% of revenue compared to $15,013 or 68.0% of revenue for the prior fiscal year. The main reason for the decrease was our ability to leverage the higher revenue in fiscal year 2014 over our fixed cost base as well as strict spend monitoring during the fiscal year. | |
As of September 30, 2014, we had $981 of cash and cash equivalents as compared to $1,304 of cash and cash equivalents at the end of fiscal 2013. In fiscal 2014, we generated $1,684 in cash from operations primarily from the net income and working capital management as compared to $1,594 in fiscal 2013. Total capital expenditures increased in fiscal 2014 to a level of $490 reflecting our improved liquidity position. | |
On May 14, 2014, we entered into a Credit Agreement (“Agreement”) with Huntington Bank. The Agreement includes both a term loan and a revolving loan and is secured by mortgages on our facilities and personal property in West Lafayette and Evansville, Indiana. We used the proceeds from the term loan to pay off the Regions Bank replacement note payable. | |
Over the past two years, we have focused on targeted initiatives that were designed to stabilize our business, improve our liquidity and lower our break-even point. While we remain dedicated to increasing our productivity and internal processes with the intent to continue to grow free cash flow, we are actively pursuing strategies to drive top-line growth. In fiscal 2015, we plan to focus on sales execution, operational excellence and building strategic partnerships with pharmaceutical and biotechnology companies, to differentiate our company and create value for our clients and shareholders. By improving revenue growth and managing our costs effectively, combined with the availability of a new credit facility with substantially more favorable terms than the long-term debt and line of credit it replaces, we enhance our ability to implement our growth plan. We have taken several steps to strengthen our management team in roles that will be vital to helping drive our top line performance. We are expanding our marketing efforts by building on the Company's inherent strengths in specialty assay and drug discovery, regulatory excellence, and our Culex® automated sampling system. We recognize that our growth depends upon our ability to continually improve and create new client relationships. In addition, strengthening the overall leadership team represents an important step forward in the Company's continuing program to build a management team with the depth, experience and dedication in order to position the Company to deliver profitable growth over the long-term. We are determined to follow through on the initiatives that support of our strategy to strengthen the Company for fiscal 2015 and beyond. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||
Principles of Consolidation | (a) | Principles of Consolidation | |||||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated. | |||||||||||||||||
Revenue Recognition | (b) | Revenue Recognition | |||||||||||||||
The majority of our bioanalytical and analytical research service contracts involve the development of analytical methods and the processing of bioanalytical samples for pharmaceutical companies and generally provide for a fixed fee for each sample processed. Revenue is recognized under the specific performance method of accounting and the related direct costs are recognized when services are performed. Our preclinical research service contracts generally consist of preclinical studies, and revenue is recognized under the proportional performance method of accounting. Revisions in profit estimates, if any, are reflected on a cumulative basis in the period in which such revisions become known. The establishment of contract prices and total contract costs involves estimates we make at the inception of the contract. These estimates could change during the term of the contract and impact the revenue and costs reported in the consolidated financial statements. Revisions to estimates have generally not been material. Research service contract fees received upon acceptance are deferred until earned, and classified within customer advances. Unbilled revenues represent revenues earned under contracts in advance of billings. | |||||||||||||||||
Product revenue from sales of equipment not requiring installation, testing or training is recognized upon shipment to customers. One product includes internally developed software and requires installation, testing and training, which occur concurrently. Revenue from these sales is recognized upon completion of the installation, testing and training when the services are bundled with the equipment sale. | |||||||||||||||||
Cash Equivalents | (c) | Cash Equivalents | |||||||||||||||
We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At September 30, 2014, we did not have any cash accounts that exceeded federally insured limits. | |||||||||||||||||
Accounts Receivable | (d) | Accounts Receivable | |||||||||||||||
We perform periodic credit evaluations of our customers' financial conditions and generally do not require collateral on trade accounts receivable. We account for trade receivables based on the amounts billed to customers. Past due receivables are determined based on contractual terms. We do not accrue interest on any of our trade receivables. The allowance for doubtful accounts is determined by management based on our historical losses, specific customer circumstances, and general economic conditions. Periodically, management reviews accounts receivable and adjusts the allowance based on current circumstances and charges off uncollectible receivables when all attempts to collect have failed. Our allowance for doubtful accounts was $54 and $87 at September 30, 2014 and 2013, respectively. | |||||||||||||||||
A summary of activity in our allowance for doubtful accounts is as follows: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Opening balance | $ | 87 | $ | 123 | |||||||||||||
Charged to expense | 12 | 41 | |||||||||||||||
Accounts recovered | — | (18 | ) | ||||||||||||||
Accounts written off | (45 | ) | (59 | ) | |||||||||||||
Ending balance | $ | 54 | $ | 87 | |||||||||||||
Inventories | (e) | Inventories | |||||||||||||||
Inventories are stated at the lower of cost or market using the first-in, first-out (FIFO) cost method of accounting. We evaluate inventories on a regular basis to identify inventory on hand that may be obsolete or in excess of current and future projected market demand. For inventory deemed to be obsolete, we provide a reserve. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates the estimate of future demand. A summary of activity in our inventory obsolescence is as follows for the years ended September 30: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Opening Balance | $ | 359 | $ | 310 | |||||||||||||
Provision for Slow Moving & Obsolesence | 29 | 49 | |||||||||||||||
Write-off of Obsolete & Slow Moving Inventory | (89 | ) | - | ||||||||||||||
Closing Balance | |||||||||||||||||
$ | 299 | $ | 359 | ||||||||||||||
Property and Equipment | (f) | Property and Equipment | |||||||||||||||
We record property and equipment at cost, including interest capitalized during the period of construction of major facilities. We compute depreciation, including amortization on capital leases, using the straight-line method over the estimated useful lives of the assets, which we estimate to be: buildings and improvements, 34 to 40 years; machinery and equipment, 5 to 10 years, and office furniture and fixtures, 10 years. Depreciation expense was $1,589 in fiscal 2014 and $1,715 in fiscal 2013. Expenditures for maintenance and repairs are expensed as incurred. | |||||||||||||||||
Property and equipment, net, as of September 30, 2014 and 2013 consisted of the following: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Land and improvements | $ | 914 | $ | 914 | |||||||||||||
Buildings and improvements | 21,374 | 21,250 | |||||||||||||||
Machinery and equipment | 18,135 | 17,571 | |||||||||||||||
Office furniture and fixtures | 690 | 690 | |||||||||||||||
Construction in progress | 13 | 92 | |||||||||||||||
41,126 | 40,517 | ||||||||||||||||
Less: accumulated depreciation | (25,177 | ) | (23,604 | ) | |||||||||||||
Net property and equipment | $ | 15,949 | $ | 16,913 | |||||||||||||
Long-Lived Assets including Goodwill | (g) | Long-Lived Assets including Goodwill | |||||||||||||||
Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized of the amount by which the carrying amount of the asset exceeds the fair value of the asset. | |||||||||||||||||
We carry goodwill at cost. Other intangible assets with definite lives are stated at cost and are amortized on a straight-line basis over their estimated useful lives. All intangible assets acquired that are obtained through contractual or legal right, or are capable of being separately sold, transferred, licensed, rented, or exchanged, are recognized as an asset apart from goodwill. Goodwill is not amortized. | |||||||||||||||||
Goodwill is tested annually for impairment and more frequently if events and circumstances indicate that the asset might be impaired. First, we can assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. We elected to bypass the qualitative assessment aspect of this guidance. We proceeded directly to a two-step quantitative process. In the first step, we compare the fair value of each reporting unit, as computed primarily by present value cash flow calculations, to its book carrying value, including goodwill. We do not believe that market value is indicative of the true fair value of the Company mainly due to average daily trading volumes of less than 1%. If the fair value exceeds the carrying value, no further work is required and no impairment loss is recognized. If the carrying value exceeds the fair value, the goodwill of the reporting unit is potentially impaired and we would then complete step 2 in order to measure the impairment loss. In step 2, the implied fair value is compared to the carrying amount of the goodwill. If the implied fair value of goodwill is less than the carrying value of goodwill, we would recognize an impairment loss equal to the difference. The implied fair value is calculated by allocating the fair value of the reporting unit (as determined in step 1) to all of its assets and liabilities (including unrecognized intangible assets) and any excess in fair value that is not assigned to the assets and liabilities is the implied fair value of goodwill. | |||||||||||||||||
The discount rate, gross margin and sales growth rates are material assumptions utilized in our calculations of the present value cash flows used to estimate the fair value of the reporting units when performing the annual goodwill impairment test. Our reporting units with goodwill at September 30, 2014 are Vetronics, which is included in our Products segment, bioanalytical services and preclinical services, which are both included in our contract research services segment, based on the discrete financial information available which is reviewed by management. We utilize a cash flow approach in estimating the fair value of the reporting units, where the discount rate reflects a weighted average cost of capital rate. The cash flow model used to derive fair value is sensitive to the discount rate and sales growth assumptions used. | |||||||||||||||||
We performed our annual goodwill impairment test for all reporting units mentioned above at September 30, 2014. The estimated fair value of our Vetronics reporting unit was less than its related book value and we determined that its goodwill balance was impaired. This was a result of the rates of growth, earnings and cash flow expectations for future performance that were below the Company's previous projections. In late 2014 we began shifting our market focus and will no longer actively market the Vetronics product offering. However, we will continue to service the units in the field. Accordingly, step two of the goodwill impairment test was completed for the Vetronics reporting unit which resulted in an impairment charge totaling $374 in the fourth fiscal quarter of fiscal 2014. There was no indication of impairment for the Bioanalytical Services and Preclinical Services reporting units as of September 30, 2014. | |||||||||||||||||
Considerable management judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate future cash flows. Assumptions used in our impairment evaluations, such as forecasted sales growth rates and our cost of capital or discount rate, are based on the best available market information. Changes in these estimates or a continued decline in general economic conditions could change our conclusion regarding an impairment of goodwill and potentially result in a non-cash impairment loss in a future period. The assumptions used in our impairment testing could be adversely affected by certain risks. There have been no significant events since the timing of our impairment tests that would have triggered additional impairment testing. | |||||||||||||||||
At September 30, 2014 and 2013, remaining recorded goodwill was $1,009 and $1,383, respectively. The changes in the carrying amount of goodwill for the year ended September 30, 2014, are as follows: | |||||||||||||||||
Vetronics | Bioanalytical | Preclinical | Total | ||||||||||||||
Services | Services | ||||||||||||||||
Balance as of October 1, 2013 | $ | 374 | $ | 971 | $ | 38 | $ | 1,383 | |||||||||
Impairment loss | (374 | ) | - | - | (374 | ) | |||||||||||
Balance as of September 30, 2014 | $ | - | $ | 971 | $ | 38 | $ | 1,009 | |||||||||
We amortize costs of patents and licenses. For the fiscal years ended September 30, 2014 and 2013, the amortization expense associated with these was $8 and $8, respectively. | |||||||||||||||||
Advertising Expense | (h) | Advertising Expense | |||||||||||||||
We expense advertising costs as incurred. Advertising expense was $41 and $40 for the years ended September 30, 2014 and 2013, respectively. | |||||||||||||||||
Stock-Based Compensation | (i) | Stock-Based Compensation | |||||||||||||||
We have a stock-based employee compensation plan and a stock-based employee and outside director compensation plan, which are described more fully in Note 9. All options granted under these plans have an exercise price equal to the market value of the underlying common shares on the date of grant. We expense the estimated fair value of stock options over the vesting periods of the grants. Our policy is to recognize expense for awards subject to graded vesting using the straight-line attribution method, reduced for estimated forfeitures. | |||||||||||||||||
We use a binomial option-pricing model as our method of valuation for share-based awards, requiring us to make certain assumptions about the future, which are more fully described in Note 9. | |||||||||||||||||
Income Taxes | (j) | Income Taxes | |||||||||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We record valuation allowances based on a determination of the expected realization of tax assets. | |||||||||||||||||
We may recognize the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount of the accrual for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that we believe is more likely than not to be realized upon settlement of the position. | |||||||||||||||||
We record interest and penalties accrued in relation to uncertain income tax positions as a component of income tax expense. Any changes in the liability for uncertain tax positions would impact our effective tax rate. We do not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months. | |||||||||||||||||
Fair Value of Financial Instruments | (k) | Fair Value of Financial Instruments | |||||||||||||||
The provisions of the Fair Value Measurements and Disclosure Topic defines fair value, establishes a consistent framework for measuring fair value and provides the disclosure requirements about fair value measurements. This Topic also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's judgment about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: | |||||||||||||||||
• | Level 1 – Valuations based on quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. | ||||||||||||||||
• | Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. | ||||||||||||||||
• | Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. | ||||||||||||||||
In May 2011, we issued Class A and B Warrants that are measured at fair value on a recurring basis. We recorded these warrants as a liability determining the fair value at inception on May 11, 2011. Subsequent quarterly fair value measurements, using the Black Scholes model which is considered a level 2 measurement, are calculated with fair value changes charged to the statement of operations and comprehensive income (loss). Class B Warrants expired in May 2012 and the liability was reduced to zero. The assumptions used to compute the fair value of the warrants at September 30, 2014 and 2013 were as follows: | |||||||||||||||||
30-Sep-14 | 30-Sep-13 | ||||||||||||||||
Warrant A | Warrant A | ||||||||||||||||
Risk-free interest rate | 0.41 | % | 0.51 | % | |||||||||||||
Dividend yield | 0 | % | 0 | % | |||||||||||||
Volatility of the Company's common stock | 63.58 | % | 71.15 | % | |||||||||||||
Expected life of the options (years) | 1.6 | 2.6 | |||||||||||||||
Fair value per unit | $ | 0.846 | $ | 0.444 | |||||||||||||
The carrying amounts for cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other assets, accounts payable and other accruals approximate their fair values because of their nature and respective duration. The carrying value of the note payable entered into this fiscal year approximates fair value due to the variable nature of the interest rates. | |||||||||||||||||
We use an interest rate swap, designated as a hedge, to fix 60% of the debt from our new Huntington credit facility. We did not enter into this derivative transaction to speculate on interest rates, but to hedge interest rate risk. The swap is recognized on the balance sheet at its fair value. The fair value is determined utilizing a cash flow model that takes into consideration interest rates and other inputs observable in the market from similar types of instruments, and is therefore considered a level 2 measurement. Using a level 3 measurement, the fair value of the goodwill of the Vectronics reporting unit was $0 with a carrying value of $374, leading to the goodwill impairment expense in fiscal 2014 of $374. | |||||||||||||||||
The following table summarizes fair value measurements by level as of September 30, 2014, for the Company's financial liabilities measured at fair value on a recurring basis: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Interest rate swap agreement | $ | - | $ | 21 | $ | - | |||||||||||
Class A warrant liability | $ | - | $ | 676 | $ | - | |||||||||||
The following table summarizes fair value measurements by level as of September 30, 2013, for the Company's financial liabilities measured at fair value on a recurring basis: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Interest rate swap agreement | $ | - | $ | - | $ | - | |||||||||||
Class A warrant liability | $ | - | $ | 612 | $ | - | |||||||||||
Use of Estimates | (l) | Use of Estimates | |||||||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates as part of the issuance of these consolidated financial statements include but are not limited to the determination of fair values, allowance for doubtful accounts, inventory obsolescence, deferred tax valuations, depreciation, impairment charges and stock compensation. Our actual results could differ from those estimates. | |||||||||||||||||
Research and Development | (m) | Research and Development | |||||||||||||||
In fiscal 2014 and 2013, we incurred $658 and $454, respectively, on research and development. Separate from our contract research services business, we maintain applications research and development to enhance our products business. We expense research and development costs as incurred. | |||||||||||||||||
Comprehensive Income (Loss) | (n) | Comprehensive Income (Loss) | |||||||||||||||
We report comprehensive income (loss) on our Consolidated Statements of Operations. Other comprehensive income (loss) represents changes in shareholders' equity and is comprised of foreign currency translation adjustments as well as changes in the fair value of our interest rate swap. | |||||||||||||||||
Foreign Currency | (o) | Foreign Currency | |||||||||||||||
For our subsidiary outside of the United States that operates in a local currency environment, income and expense items are translated to United States dollars at the monthly average rates of exchange prevailing during the year, assets and liabilities are translated at year-end exchange rates and equity accounts are translated at historical exchange rates. Translation adjustments are accumulated in a separate component of shareholders' equity in the consolidated balance sheets and are included in the determination of Accumulated Other Comprehensive Income (AOCI) in the consolidated statements of shareholders' equity. Transaction gains and losses are included in the determination of net income (loss) in the consolidated statements of operations and comprehensive income (loss). The balance in AOCI at September 30, 2014 and 2013 was $28 and $32, respectively. | |||||||||||||||||
Interest Rate Swap | (p) | Interest Rate Swap | |||||||||||||||
The Company uses an interest rate swap designated as a cash flow hedge to fix 60% of the Huntington debt due to mitigate changes in interest rates. The changes in the fair value of the interest rate swap are recorded in Accumulated Other Comprehensive Income (AOCI) to the extent effective. We assess on an ongoing basis whether the derivative that is used in the hedging transaction is highly effective in offsetting changes in cash flows of the hedged debt. The terms of the interest rate swaps match the terms of the underlying debt resulting in no ineffectiveness. When we determine that a derivative is not highly effective as a hedge, hedge accounting is discontinued and we reclassify gains or losses that were accumulated in AOCI to other income (expense), net on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The balance in AOCI at September 30, 2014 and 2013 was ($21) and $0, respectively. | |||||||||||||||||
Reclassifications | (q) Reclassifications | ||||||||||||||||
Certain amounts in the fiscal 2013 consolidated financial statements have been reclassified to conform to the fiscal 2014 presentation without affecting previously reported net income or stockholders' equity. | |||||||||||||||||
Debt issuance costs | (r) Debt issuance costs | ||||||||||||||||
The Company capitalizes costs associated with the issuance of debt and amortizes them as additional interest expense over the lives of the debt on a straight-line basis. Upon prepayment of the related debt, the Company accelerates the recognition of an appropriate amount of the costs as refinancing or extinguishment of debt. Additional expense arising from such prepayments during fiscal 2014 was $48. | |||||||||||||||||
On May 14, 2014, the Company entered into a Credit Agreement (“Agreement”) with Huntington Bank. The Agreement includes a term loan maturing in May 2019. The term loan proceeds were used to pay off the Regions replacement note payable. In connection with the credit facility, the Company recorded fees of $134 which were deferred and will be amortized over the life of the credit facility. In addition, the Company accelerated the recognition of the deferred issuance costs from the previous Regions replacement note payable extension. | |||||||||||||||||
New Accounting Pronouncements | (s) New Accounting Pronouncements | ||||||||||||||||
Effective October 1, 2017, the Company will be required to adopt the new guidance of ASC Topic 606, Revenue from Contracts with Customers (Topic 606), which will supersede the revenue recognition requirements in ASC Topic 605, Revenue Recognition. Topic 606 requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance requires the Company to apply the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation. The Company will be required to adopt Topic 606 either on a full retrospective basis to each prior reporting period presented or on a modified retrospective basis with the cumulative effect of initially applying the new guidance recognized at the date of initial application. If the Company elects the modified retrospective approach, it will be required to provide additional disclosures of the amount by which each financial statement line item is affected in the current reporting period, as compared to the guidance that was in effect before the change, and an explanation of the reasons for significant changes. The Company has not yet assessed the impact of the new guidance on its consolidated financial statements. | |||||||||||||||||
In July 2013, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that requires that an entity net its liability for unrecognized tax positions against a net operating loss carry forward, a similar tax loss or a tax credit carry-forward when settlement in this manner is available under the tax law. The Company will adopt this guidance effective at the beginning of its 2015 fiscal year. The adoption of this updated authoritative guidance is not expected to have a significant impact on the Company's Consolidated Financial Statements. | |||||||||||||||||
In February 2013, the FASB issued authoritative guidance that amends the presentation of accumulated other comprehensive income and clarifies how to report the effect of significant reclassifications out of accumulated other comprehensive income. The guidance, which became effective for the Company on a prospective basis at the beginning of its 2014 fiscal year, requires footnote disclosures regarding the changes in accumulated other comprehensive income by component and the line items affected in the statements of operations. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||
Summary of Activity in Allowance for Doubtful Accounts | 2014 | 2013 | |||||||||||||||
Opening balance | $ | 87 | $ | 123 | |||||||||||||
Charged to expense | 12 | 41 | |||||||||||||||
Accounts recovered | — | (18 | ) | ||||||||||||||
Accounts written off | (45 | ) | (59 | ) | |||||||||||||
Ending balance | $ | 54 | $ | 87 | |||||||||||||
Schedule of Activity in Inventory Obsolescence | 2014 | 2013 | |||||||||||||||
Opening Balance | $ | 359 | $ | 310 | |||||||||||||
Provision for Slow Moving & Obsolesence | 29 | 49 | |||||||||||||||
Write-off of Obsolete & Slow Moving Inventory | (89 | ) | - | ||||||||||||||
Closing Balance | |||||||||||||||||
$ | 299 | $ | 359 | ||||||||||||||
Schedule of Property and Equipment | 2014 | 2013 | |||||||||||||||
Land and improvements | $ | 914 | $ | 914 | |||||||||||||
Buildings and improvements | 21,374 | 21,250 | |||||||||||||||
Machinery and equipment | 18,135 | 17,571 | |||||||||||||||
Office furniture and fixtures | 690 | 690 | |||||||||||||||
Construction in progress | 13 | 92 | |||||||||||||||
41,126 | 40,517 | ||||||||||||||||
Less: accumulated depreciation | (25,177 | ) | (23,604 | ) | |||||||||||||
Net property and equipment | $ | 15,949 | $ | 16,913 | |||||||||||||
Schedule of Goodwill | Vetronics | Bioanalytical | Preclinical | Total | |||||||||||||
Services | Services | ||||||||||||||||
Balance as of October 1, 2013 | $ | 374 | $ | 971 | $ | 38 | $ | 1,383 | |||||||||
Impairment loss | (374 | ) | - | - | (374 | ) | |||||||||||
Balance as of September 30, 2014 | $ | - | $ | 971 | $ | 38 | $ | 1,009 | |||||||||
Summary of Assumptions Used to Compute Fair Value of Warrants | |||||||||||||||||
30-Sep-14 | 30-Sep-13 | ||||||||||||||||
Warrant A | Warrant A | ||||||||||||||||
Risk-free interest rate | 0.41 | % | 0.51 | % | |||||||||||||
Dividend yield | 0 | % | 0 | % | |||||||||||||
Volatility of the Company's common stock | 63.58 | % | 71.15 | % | |||||||||||||
Expected life of the options (years) | 1.6 | 2.6 | |||||||||||||||
Fair value per unit | $ | 0.846 | $ | 0.444 | |||||||||||||
Warrant A | Warrant B | ||||||||||||||||
Risk-free interest rate | 1.87 | % | 0.18 | % | |||||||||||||
Dividend yield | 0 | % | 0 | % | |||||||||||||
Volatility of the Company's common stock | 106.91 | % | 116.01 | % | |||||||||||||
Expected life of the options (years) | 5 | 1 | |||||||||||||||
Fair value per unit | $ | 1.433 | $ | 0.779 | |||||||||||||
Schedule of Financial Liabilities Measured at Fair Value | The following table summarizes fair value measurements by level as of September 30, 2014, for the Company's financial liabilities measured at fair value on a recurring basis: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Interest rate swap agreement | $ | - | $ | 21 | $ | - | |||||||||||
Class A warrant liability | $ | - | $ | 676 | $ | - | |||||||||||
The following table summarizes fair value measurements by level as of September 30, 2013, for the Company's financial liabilities measured at fair value on a recurring basis: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Interest rate swap agreement | $ | - | $ | - | $ | - | |||||||||||
Class A warrant liability | $ | - | $ | 612 | $ | - |
SALE_OF_PREFERRED_SHARES_AND_W1
SALE OF PREFERRED SHARES AND WARRANTS (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
SALE OF PREFERRED SHARES AND WARRANTS [Abstract] | |||||||||||||
Summary of Assumptions Used to Compute Fair Value of Warrants | |||||||||||||
30-Sep-14 | 30-Sep-13 | ||||||||||||
Warrant A | Warrant A | ||||||||||||
Risk-free interest rate | 0.41 | % | 0.51 | % | |||||||||
Dividend yield | 0 | % | 0 | % | |||||||||
Volatility of the Company's common stock | 63.58 | % | 71.15 | % | |||||||||
Expected life of the options (years) | 1.6 | 2.6 | |||||||||||
Fair value per unit | $ | 0.846 | $ | 0.444 | |||||||||
Warrant A | Warrant B | ||||||||||||
Risk-free interest rate | 1.87 | % | 0.18 | % | |||||||||
Dividend yield | 0 | % | 0 | % | |||||||||
Volatility of the Company's common stock | 106.91 | % | 116.01 | % | |||||||||
Expected life of the options (years) | 5 | 1 | |||||||||||
Fair value per unit | $ | 1.433 | $ | 0.779 | |||||||||
Schedule of Change in Estimated Fair Value of Warrants | 2014 | 2013 | |||||||||||
Balance at beginning of year | $ | 612 | $ | 1,213 | |||||||||
Fair value of Class A warrants exercised | (854 | ) | — | ||||||||||
Increase (decrease) in fair value of Class A warrants | 918 | (601 | ) | ||||||||||
Balance at end of year | $ | 676 | $ | 612 |
INCOME_LOSS_PER_SHARE_Tables
INCOME (LOSS) PER SHARE (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
INCOME (LOSS) PER SHARE [Abstract] | |||||||||
Reconciliation of Computation of Basic Loss Per Share to Diluted Net Loss Per Share | Years Ended | ||||||||
September 30, | |||||||||
2014 | 2013 | ||||||||
Basic net income (loss) per share: | |||||||||
Net income (loss) | $ | (1,070 | ) | $ | 773 | ||||
Weighted average common shares outstanding | 7,960 | 7,664 | |||||||
Basic net income (loss) per share | $ | (0.13 | ) | $ | 0.1 | ||||
Diluted net income (loss) per share: | |||||||||
Net income (loss) applicable to common shareholders | $ | (1,070 | ) | $ | 773 | ||||
Weighted average common shares outstanding | 7,960 | 7,664 | |||||||
Plus: Incremental shares from assumed conversions: | |||||||||
Series A preferred shares | — | 705 | |||||||
Dilutive stock options/shares | — | 2 | |||||||
Diluted weighted average common shares outstanding | 7,960 | 8,371 | |||||||
Diluted net income (loss) per share | $ | (0.13 | ) | $ | 0.09 |
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
INVENTORIES [Abstract] | |||||||||||||
Summary of Inventories | Inventories at September 30 consisted of the following: | ||||||||||||
2014 | 2013 | ||||||||||||
Raw materials | $ | 1,228 | $ | 1,157 | |||||||||
Work in progress | 295 | 322 | |||||||||||
Finished goods | 340 | 259 | |||||||||||
$ | 1,863 | $ | 1,738 | ||||||||||
Obsolescence reserve | (299 | ) | (359 | ) | |||||||||
$ | 1,564 | $ | 1,379 |
LEASE_ARRANGEMENTS_Tables
LEASE ARRANGEMENTS (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
LEASE ARRANGEMENTS [Abstract] | |||||||||||||
Schedule of Future Minimum Lease Payments for Capital Leases | |||||||||||||
Principal | Interest | Total | |||||||||||
2014 | $ | 279 | $ | 29 | $ | 308 | |||||||
2015 | 230 | 12 | 242 | ||||||||||
2016 | 27 | 4 | 31 | ||||||||||
2017 | 25 | 2 | 27 | ||||||||||
2018 | 16 | - | 16 | ||||||||||
$ | 577 | $ | 47 | $ | 624 | ||||||||
Schedule of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments for the following fiscal years under operating leases at September 30, 2014 are as follows: | ||||||||||||
2015 | $ | 856 | |||||||||||
2016 | 16 | ||||||||||||
2017 | 1 | ||||||||||||
2018 | - | ||||||||||||
2019 | - | ||||||||||||
$ | 873 |
DEBT_ARRANGEMENTS_Tables
DEBT ARRANGEMENTS (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
DEBT ARRANGEMENTS [Abstract] | |||||||||||||||||||||||||
Schedule of Long-Term Debt | 2014 | 2013 | |||||||||||||||||||||||
Term loan payable to a bank, payable in monthly principal installments of $65. Interest is variable at LIBOR plus 325 basis points which was 3.4% at September 30, 2014. Collateralized by underlying property. Due May, 2019. | $ | 5,238 | $ | - | |||||||||||||||||||||
Replacement note payable to a bank, payable in monthly principal installments of $47 plus interest. The interest rate is 6%. Collateralized by West Lafayette and Evansville properties. Due October, 2014. | - | 5,254 | |||||||||||||||||||||||
$ | 5,238 | $ | 5,254 | ||||||||||||||||||||||
Less: Current portion | 786 | 613 | |||||||||||||||||||||||
$ | 4,452 | $ | 4,641 | ||||||||||||||||||||||
Schedule of Principal Payment Obligations | 2015 | 2016 | 2017 | 2018 | 2019 | Total | |||||||||||||||||||
Term loan | $ | 786 | $ | 786 | $ | 786 | $ | 785 | $ | 2,095 | $ | 5,238 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
INCOME TAXES [Abstract] | |||||||||||||
Schedule of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities as of September 30 are as follows: | ||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets - Current: | |||||||||||||
Inventory | $ | 187 | $ | 208 | |||||||||
Accrued compensation and vacation | 246 | 192 | |||||||||||
Accrued expenses and other | 178 | 185 | |||||||||||
Total current deferred tax assets | 611 | 585 | |||||||||||
Deferred tax liabilities – Current: | |||||||||||||
Prepaid expenses | (72 | ) | (49 | ) | |||||||||
Total net current deferred tax assets | 539 | 536 | |||||||||||
Deferred tax assets - Noncurrent: | |||||||||||||
Domestic net operating loss carryforwards | 4,828 | 5,737 | |||||||||||
Stock compensation expense | 54 | 45 | |||||||||||
Foreign tax credit carryover | - | 119 | |||||||||||
AMT credit carryover | 58 | 54 | |||||||||||
Total noncurrent deferred tax assets | 4,940 | 5,955 | |||||||||||
Deferred tax liabilities - Noncurrent: | |||||||||||||
Unrealized gain/loss - warrant liability | (180 | ) | (530 | ) | |||||||||
Investment in subsidiary | (3,173 | ) | (3,214 | ) | |||||||||
Basis difference for fixed assets | (408 | ) | (461 | ) | |||||||||
(3,761 | ) | (4,205 | ) | ||||||||||
Total net noncurrent deferred tax assets | 1,179 | 1,750 | |||||||||||
Valuation allowance for net deferred tax assets | (1,718 | ) | (2,286 | ) | |||||||||
Net deferred tax asset (liability) | $ | - | $ | - | |||||||||
Schedule of the Provision (Benefit) for Income Taxes | Significant components of the provision (benefit) for income taxes are as follows as of the year ended September 30: | ||||||||||||
2014 | 2013 | ||||||||||||
Current: | |||||||||||||
Federal | $ | 5 | $ | 13 | |||||||||
State and local | 2 | 3 | |||||||||||
Foreign | - | - | |||||||||||
Deferred: | |||||||||||||
Federal | - | - | |||||||||||
State and local | - | - | |||||||||||
Foreign | - | - | |||||||||||
Income tax (benefit) expense | $ | 7 | $ | 16 | |||||||||
Reconciliation of Effective Income Tax Rate | The effective income tax rate on continuing operations varied from the statutory federal income tax rate as follows: | ||||||||||||
2014 | 2013 | ||||||||||||
Federal statutory income tax rate | 34 | % | 34 | % | |||||||||
Increases (decreases): | |||||||||||||
State and local income taxes, net of Federal tax benefit, if applicable | (0.1 | ) | 0.3 | ||||||||||
Nondeductible expenses | (15.2 | ) | 7.2 | ||||||||||
Nontaxable foreign (gains) losses | - | - | |||||||||||
Uncertain tax positions | - | - | |||||||||||
Valuation allowance changes | (19.3 | ) | (39.4 | ) | |||||||||
Other | - | - | |||||||||||
Effective income tax rate | (0.6 | )% | 2.1 | % | |||||||||
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | ||||||||||||
Change in unrecognized tax benefits: | |||||||||||||
2014 | 2013 | ||||||||||||
Balance at beginning of the year | $ | 16 | $ | 16 | |||||||||
Additions based on tax positions related to the current year | - | - | |||||||||||
Additions for tax positions of prior years | - | - | |||||||||||
Reductions for tax positions of prior years | - | - | |||||||||||
Settlements | - | - | |||||||||||
Balance at end of the year | $ | 16 | $ | 16 |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Assumptions | The weighted-average assumptions used to compute the fair value of options granted for the fiscal years ended September 30 were as follows: | ||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Risk-free interest rate | 2.36 | % | 1.42 | % | |||||||||||||||||||||||||||||||||||||||||||||
Dividend yield | 0 | % | 0 | % | |||||||||||||||||||||||||||||||||||||||||||||
Volatility of the expected market price of the Company's common stock | 94.50%-94.70 | % | 93.60%-93.70 | % | |||||||||||||||||||||||||||||||||||||||||||||
Expected life of the options (years) | 8 | 8 | |||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | A summary of our stock option activity for all options and related information for the years ended September 30, 2014 and 2013, respectively, is as follows (in thousands except for share prices): | ||||||||||||||||||||||||||||||||||||||||||||||||
Options | Weighted- | Weighted- | Weighted-Average | Aggregate | |||||||||||||||||||||||||||||||||||||||||||||
(shares) | Average | Average Grant | Remaining | Intrinsic | |||||||||||||||||||||||||||||||||||||||||||||
Exercise Price | Date Fair Value | Contractual Life | Value | ||||||||||||||||||||||||||||||||||||||||||||||
(Years) | |||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding - October 1, 2012 | 354 | $ | 1.99 | ||||||||||||||||||||||||||||||||||||||||||||||
Exercised | (7 | ) | $ | 1.35 | $ | 1.14 | |||||||||||||||||||||||||||||||||||||||||||
Granted | 178 | $ | 1.46 | $ | 1.2 | ||||||||||||||||||||||||||||||||||||||||||||
Terminated | (46 | ) | $ | 2.35 | |||||||||||||||||||||||||||||||||||||||||||||
Outstanding - September 30, 2013 | 479 | $ | 1.77 | $ | 1.35 | 7.9 | $ | 43 | |||||||||||||||||||||||||||||||||||||||||
Outstanding - October 1, 2013 | 479 | $ | 1.77 | ||||||||||||||||||||||||||||||||||||||||||||||
Exercised | (11 | ) | $ | 1.14 | $ | 0.95 | |||||||||||||||||||||||||||||||||||||||||||
Granted | 40 | $ | 2.69 | $ | 2.25 | ||||||||||||||||||||||||||||||||||||||||||||
Terminated | (82 | ) | $ | 2 | |||||||||||||||||||||||||||||||||||||||||||||
Outstanding - September 30, 2014 | 426 | $ | 1.83 | $ | 1.41 | 7.2 | $ | 348 | |||||||||||||||||||||||||||||||||||||||||
Exercisable at September 30, 2014 | 317 | $ | 1.83 | $ | 1.38 | 6.7 | $ | 279 | |||||||||||||||||||||||||||||||||||||||||
Summary of Non-Vested Options | The aggregate intrinsic value is the product of the total options outstanding and the net positive difference of our common share price on September 30, 2014 and the options' exercise price. A summary of non-vested options for the year ended September 30, 2014 is as follows: | ||||||||||||||||||||||||||||||||||||||||||||||||
Number | Weighted- | ||||||||||||||||||||||||||||||||||||||||||||||||
of Shares | Average Grant | ||||||||||||||||||||||||||||||||||||||||||||||||
Date Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-vested options at October 1, 2013 | 261 | $ | 1.11 | ||||||||||||||||||||||||||||||||||||||||||||||
Granted | 40 | $ | 2.25 | ||||||||||||||||||||||||||||||||||||||||||||||
Vested | (131 | ) | $ | 1.08 | |||||||||||||||||||||||||||||||||||||||||||||
Forfeited | (61 | ) | $ | 1.2 | |||||||||||||||||||||||||||||||||||||||||||||
Non-vested options at September 30, 2014 | 109 | $ | 1.51 | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding and Exercisable Options | The following table summarizes outstanding and exercisable options as of September 30, 2014 (in thousands except per share amounts): | ||||||||||||||||||||||||||||||||||||||||||||||||
Range of Exercise Prices | Shares | Weighted- | Weighted- | Shares | Weighted- | ||||||||||||||||||||||||||||||||||||||||||||
Outstanding | Average | Average | Exercisable | Average | |||||||||||||||||||||||||||||||||||||||||||||
Remaining | Exercise Price | Exercise Price | |||||||||||||||||||||||||||||||||||||||||||||||
Contractual | |||||||||||||||||||||||||||||||||||||||||||||||||
Life (Years) | |||||||||||||||||||||||||||||||||||||||||||||||||
$ | 0.79-1.01 | 86 | 6.54 | $ | 0.96 | 62 | $ | 0.96 | |||||||||||||||||||||||||||||||||||||||||
$ | 1.02-4.59 | 296 | 8.12 | $ | 1.58 | 211 | $ | 1.38 | |||||||||||||||||||||||||||||||||||||||||
$ | 4.60-8.79 | 44 | 2.13 | $ | 5.18 | 44 | $ | 5.18 |
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
SEGMENT INFORMATION [Abstract] | |||||||||||||
Schedule of Operating Segments | (a) | Operating Segments | |||||||||||
Years Ended September 30, | |||||||||||||
2014 | 2013 | ||||||||||||
Revenue: | |||||||||||||
Service | $ | 19,097 | $ | 16,473 | |||||||||
Product | 5,487 | 5,595 | |||||||||||
$ | 24,584 | $ | 22,068 | ||||||||||
Operating income (loss) : | |||||||||||||
Service | $ | 469 | $ | 77 | |||||||||
Product | (135 | ) | 753 | ||||||||||
$ | 334 | $ | 830 | ||||||||||
Interest Expense | (488 | ) | (649 | ) | |||||||||
Change in fair value of warrant liability- (increase) decrease | (918 | ) | 601 | ||||||||||
Other income | 9 | 7 | |||||||||||
(Loss) income before income taxes | $ | (1,063 | ) | $ | 789 | ||||||||
Years Ended | |||||||||||||
September 30, | |||||||||||||
2014 | 2013 | ||||||||||||
Identifiable assets: | |||||||||||||
Service | $ | 14,132 | $ | 15,149 | |||||||||
Product | 5,837 | 6,399 | |||||||||||
Corporate | 3,805 | 4,049 | |||||||||||
$ | 23,774 | $ | 25,597 | ||||||||||
Goodwill, net: | |||||||||||||
Service | $ | 1,009 | $ | 1,009 | |||||||||
Product | — | 374 | |||||||||||
$ | 1,009 | $ | 1,383 | ||||||||||
Depreciation and amortization: | |||||||||||||
Service | $ | 1,421 | $ | 1,519 | |||||||||
Product | 176 | 204 | |||||||||||
$ | 1,597 | $ | 1,723 | ||||||||||
Capital Expenditures: | |||||||||||||
Service | $ | 426 | $ | (1 | ) | ||||||||
Product | 64 | 9 | |||||||||||
$ | 490 | $ | 8 | ||||||||||
Schedule of Geographical Information | (b) | Geographic Information | |||||||||||
Years Ended | |||||||||||||
September 30, | |||||||||||||
2014 | 2013 | ||||||||||||
Sales to External Customers: | |||||||||||||
North America | $ | 22,184 | $ | 19,635 | |||||||||
Pacific Rim | 740 | 1,019 | |||||||||||
Europe | 1,086 | 1,111 | |||||||||||
Other | 574 | 303 | |||||||||||
$ | 24,584 | $ | 22,068 | ||||||||||
Long-lived Assets: | |||||||||||||
North America | $ | 17,119 | $ | 18,364 | |||||||||
$ | 17,119 | $ | 18,364 |
RESTRUCTURING_Tables
RESTRUCTURING (Tables) | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
RESTRUCTURING [Abstract] | |||||||||||||||||||||
Summary of Restructuring Activity | The following table sets forth the rollforward of the restructuring activity for the year ended September 30, 2014. | ||||||||||||||||||||
Balance, | Total | Cash | Other | Balance, | |||||||||||||||||
September 30, | Charges | Payments | September 30, | ||||||||||||||||||
2013 | 2014 | ||||||||||||||||||||
Lease related costs | $ | 877 | $ | 84 | $ | - | $ | - | $ | 961 | |||||||||||
Receivable from sale of equipment | (16 | ) | - | - | 16 | - | |||||||||||||||
Other costs | 117 | - | - | - | 117 | ||||||||||||||||
Total | $ | 978 | $ | 84 | $ | - | $ | 16 | $ | 1,078 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $) | 0 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | 14-May-14 | Sep. 30, 2014 | Sep. 30, 2013 |
Accounts Receivable | |||
Allowance for doubtful accounts | $54 | $87 | |
Property and Equipment | |||
Depreciation expense | 1,589 | 1,715 | |
Long-Lived Assets including Goodwill | |||
Goodwill | 1,009 | 1,383 | |
Advertising Expense | |||
Advertising expense | 41 | 40 | |
Research and Development | |||
Research and development | 658 | 454 | |
Foreign Currency | |||
Balance in AOCI | 28 | 32 | |
Interest Rate Swap | |||
Balance in AOCI | -21 | 0 | |
Debt issuance costs | |||
Additional expense arising from prepayments | 48 | ||
Debt issuance fees | 134 | ||
Interest Rate Swap [Member] | |||
Interest Rate Swap | |||
Percentage of debt covered by swap | 60.00% | ||
Patents and Licenses [Member] | |||
Long-Lived Assets including Goodwill | |||
Amortization expense for intangible assets | $8 | $8 | |
Buildings and Improvements [Member] | Minimum [Member] | |||
Property and Equipment | |||
Property and equipment, estimated useful life | 34 years | ||
Buildings and Improvements [Member] | Maximum [Member] | |||
Property and Equipment | |||
Property and equipment, estimated useful life | 40 years | ||
Machinery and Equipment [Member] | Minimum [Member] | |||
Property and Equipment | |||
Property and equipment, estimated useful life | 5 years | ||
Machinery and Equipment [Member] | Maximum [Member] | |||
Property and Equipment | |||
Property and equipment, estimated useful life | 10 years | ||
Office Furniture and Fixtures [Member] | |||
Property and Equipment | |||
Property and equipment, estimated useful life | 10 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Summary of Activity in Allowance for Doubtful Accounts) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Opening balance | $87 | $123 |
Charged to expense | 12 | 41 |
Accounts recovered | -18 | |
Accounts written off | -45 | -59 |
Ending balance | $54 | $87 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Activity in Inventory Obsolescence) (Details) (Inventory Valuation Reserve [Member], USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Inventory Valuation Reserve [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Opening Balance | $359 | $310 |
Provision for Slow Moving & Obsolescence | 29 | 49 |
Write-off of Obsolete & Slow Moving Inventory | -89 | |
Closing Balance | $299 | $359 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Property and Equipment) (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Land and improvements | $914 | $914 |
Buildings and improvements | 21,374 | 21,250 |
Machinery and equipment | 18,135 | 17,571 |
Office furniture and fixtures | 690 | 690 |
Construction in progress | 13 | 92 |
Property and equipment, gross | 41,126 | 40,517 |
Less: accumulated depreciation | -25,177 | -23,604 |
Net property and equipment | $15,949 | $16,913 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Goodwill) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Goodwill [Roll Forward] | ||
Beginning balance | $1,383 | |
Impairment loss | -374 | |
Ending balance | 1,009 | 1,383 |
Vetronics [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 374 | |
Impairment loss | -374 | |
Ending balance | ||
Bioanalytical Services [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 971 | |
Impairment loss | ||
Ending balance | 971 | |
Preclinical Services [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 38 | |
Impairment loss | ||
Ending balance | $38 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Assumptions Used to Compute Fair Value of Warrants) (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | 11-May-11 | Sep. 30, 2014 | Sep. 30, 2013 | 31-May-12 |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||
Fair value of warrant liability | $676 | $612 | ||
Class B Warrant [Member] | ||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||
Fair value of warrant liability | $0 | |||
Derivative Financial Instruments, Liabilities [Member] | Class A Warrant [Member] | ||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||
Risk-free interest rate | 1.87% | 0.41% | 0.51% | |
Dividend yield | 0.00% | 0.00% | 0.00% | |
Volatility of the Company's common stock | 106.91% | 63.58% | 71.15% | |
Expected life of the options | 5 years | 1 year 7 months 6 days | 2 years 7 months 6 days | |
Fair value per unit | $1.43 | $0.85 | $0.44 | |
Derivative Financial Instruments, Liabilities [Member] | Class B Warrant [Member] | ||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||
Risk-free interest rate | 0.18% | |||
Dividend yield | 0.00% | |||
Volatility of the Company's common stock | 116.01% | |||
Expected life of the options | 1 year | |||
Fair value per unit | $0.78 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Fair Value Measurements) (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Interest Rate Swap [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 21 | |
Interest Rate Swap [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Warrant [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Warrant [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 676 | 612 |
Warrant [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability |
SALE_OF_PREFERRED_SHARES_AND_W2
SALE OF PREFERRED SHARES AND WARRANTS (Narrative) (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
11-May-11 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Schedule Of Stock And Warrants By Class [Line Items] | ||||
Units issued during period, new issues, shares | 5,506 | |||
Units issued, price per unit | $1,000 | |||
Proceeds from equity issuance | $4,600,000 | |||
Fair value of warrants | 3,045,000 | |||
Common stock, price per share | $1.86 | |||
Warrants exercised | 577,897 | |||
Accrued dividends payable | 0 | |||
Class A Warrant [Member] | ||||
Schedule Of Stock And Warrants By Class [Line Items] | ||||
Number of shares called by each warrant | 250 | |||
Exercise price of warrant | $2 | |||
Fair value of warrants | 1,973,000 | 676,000 | 612,000 | 1,213,000 |
Warrants outstanding | 798,603 | |||
Class B Warrant [Member] | ||||
Schedule Of Stock And Warrants By Class [Line Items] | ||||
Number of shares called by each warrant | 250 | |||
Exercise price of warrant | $2 | |||
Fair value of warrants | 1,072,000 | |||
Series A Preferred Stock [Member] | ||||
Schedule Of Stock And Warrants By Class [Line Items] | ||||
Dividend rate | 6.00% | |||
Shares issued upon conversion of securities | 500 | |||
"Make-whole" payment | 180 | |||
Preferred stock, stated value per share | $1,000 | $1,000 | ||
Preferred stock, shares outstanding | 1,185 | 1,335 | ||
Aggregate number of shares issued upon conversion of securities | 2,753,000 | |||
Total possible dividend percentage over three years | 18.00% | |||
Preferred stock - recognition of full dividend/make-whole | 991,080 | |||
Fair value of outstanding preferred stock | 6,112,000 | |||
Gross proceeds from equity issuance | 5,506,000 | |||
Beneficial conversion feature | 2,461,000 | |||
Deemed dividend | $5,506,000 | |||
Shares converted | 4,321 | |||
Common stock, shares issued in conversion | 2,564,108 | |||
Common stock, shares issued for dividends | 217,366 |
SALE_OF_PREFERRED_SHARES_AND_W3
SALE OF PREFERRED SHARES AND WARRANTS (Fair Value Assumptions) (Details) (Derivative Financial Instruments, Liabilities [Member], USD $) | 0 Months Ended | 12 Months Ended | |
11-May-11 | Sep. 30, 2014 | Sep. 30, 2013 | |
Class A Warrant [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Risk-free interest rate | 1.87% | 0.41% | 0.51% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Volatility of the Company's common stock | 106.91% | 63.58% | 71.15% |
Expected life of the options | 5 years | 1 year 7 months 6 days | 2 years 7 months 6 days |
Fair value per unit | $1.43 | $0.85 | $0.44 |
Class B Warrant [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Risk-free interest rate | 0.18% | ||
Dividend yield | 0.00% | ||
Volatility of the Company's common stock | 116.01% | ||
Expected life of the options | 1 year | ||
Fair value per unit | $0.78 |
SALE_OF_PREFERRED_SHARES_AND_W4
SALE OF PREFERRED SHARES AND WARRANTS (Schedule of Change in Fair Value of Warrants) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | 11-May-11 |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Balance at beginning of year | $3,045 | ||
Increase (decrease) in fair value of Class A warrants | 918 | -601 | |
Balance at end of year | 3,045 | ||
Class A Warrant [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Balance at beginning of year | 612 | 1,213 | 1,973 |
Fair value of Class A warrants exercised | -854 | ||
Increase (decrease) in fair value of Class A warrants | 918 | -601 | |
Balance at end of year | $676 | $612 | $1,973 |
INCOME_LOSS_PER_SHARE_Narrativ
INCOME (LOSS) PER SHARE (Narrative) (Details) | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Warrant [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares not considered in computing diluted earnings per share | 799 |
Series A Preferred Stock [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares not considered in computing diluted earnings per share | 592 |
INCOME_LOSS_PER_SHARE_Reconcil
INCOME (LOSS) PER SHARE (Reconciliation of Computation of Basic Income or Loss Per Share to Diluted Income or Loss Per Share) (Details) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Basic net income (loss) per share: | ||
Net income (loss) | ($1,070) | $773 |
Weighted average common shares outstanding | 7,960 | 7,664 |
Basic net income (loss) per share | ($0.13) | $0.10 |
Diluted net income (loss) per share: | ||
Net income (loss) applicable to common shareholders | ($1,070) | $773 |
Weighted average common shares outstanding | 7,960 | 7,664 |
Plus: Incremental shares from assumed conversions: | ||
Series A preferred shares | 705 | |
Dilutive stock options/shares | 2 | |
Diluted weighted average common shares outstanding | 7,960 | 8,371 |
Diluted net income (loss) per share | ($0.13) | $0.09 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
INVENTORIES [Abstract] | ||
Raw materials | $1,228 | $1,157 |
Work in process | 295 | 322 |
Finished goods | 340 | 259 |
Gross inventories | 1,863 | 1,738 |
Obsolescence reserve | -299 | -359 |
Inventories | $1,564 | $1,379 |
LEASE_ARRANGEMENTS_Narrative_D
LEASE ARRANGEMENTS (Narrative) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Schedule Of Capital And Operating Leased Assets [Line Items] | ||
Capital leased assets | $5,892 | $5,778 |
Capital lease, accumulated amortization | 5,358 | 5,083 |
Equipment financed under capital leases | 114 | |
Termination of capital lease obligation | 322 | |
Rent expense | 87 | 66 |
Equipment [Member] | ||
Schedule Of Capital And Operating Leased Assets [Line Items] | ||
Equipment financed under capital leases | $114 | |
Lease expiration | 31-Dec-16 | |
Building [Member] | ||
Schedule Of Capital And Operating Leased Assets [Line Items] | ||
Lease expiration | 31-Dec-23 | |
Number of years before "opt out" provision in force | 7 years |
LEASE_ARRANGEMENTS_Schedule_of
LEASE ARRANGEMENTS (Schedule of Future Minimum Lease Payments for Capital Leases) (Details) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Capital Leased Assets [Line Items] | |
2014 | $308 |
2015 | 242 |
2016 | 31 |
2017 | 27 |
2018 | 16 |
Total minimum lease payments due | 624 |
Principal [Member] | |
Capital Leased Assets [Line Items] | |
2014 | 279 |
2015 | 230 |
2016 | 27 |
2017 | 25 |
2018 | 16 |
Total minimum lease payments due | 577 |
Interest [Member] | |
Capital Leased Assets [Line Items] | |
2014 | 29 |
2015 | 12 |
2016 | 4 |
2017 | 2 |
2018 | |
Total minimum lease payments due | $47 |
LEASE_ARRANGEMENTS_Schedule_of1
LEASE ARRANGEMENTS (Schedule of Future Minimum Lease Payments for Operating Leases) (Details) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
LEASE ARRANGEMENTS [Abstract] | |
2015 | $856 |
2016 | 16 |
2017 | 1 |
2018 | |
2019 | |
Total minimum lease payments due | $873 |
DEBT_ARRANGEMENTS_Schedule_of_
DEBT ARRANGEMENTS (Schedule of Long-Term Debt) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Debt Instrument [Line Items] | ||
Long-tem debt | $5,238 | $5,254 |
Less current portion | 786 | 613 |
Long-term debt, noncurrent portion | 4,452 | 4,641 |
Long-term debt, parenthetical information | ||
Cash paid during the period for interest | 389 | 649 |
Term Loan Payable To Bank [Member] | ||
Debt Instrument [Line Items] | ||
Long-tem debt | 5,238 | |
Long-term debt, parenthetical information | ||
Debt instrument, principal and interest payment | 65 | |
Debt instrument, interest rate | 3.40% | |
Debt instrument, maturity date | 31-May-19 | |
Replacement Note Payable Two [Member] | ||
Debt Instrument [Line Items] | ||
Long-tem debt | 5,254 | |
Long-term debt, parenthetical information | ||
Debt instrument, principal and interest payment | $47 | |
Debt instrument, interest rate | 6.00% | |
Debt instrument, maturity date | 31-Oct-14 |
DEBT_ARRANGEMENTS_Schedule_of_1
DEBT ARRANGEMENTS (Schedule of Maturities of Debt) (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
DEBT ARRANGEMENTS [Abstract] | ||
2015 | $786 | |
2016 | 786 | |
2017 | 786 | |
2018 | 785 | |
2019 | 2,095 | |
Long-tem debt | $5,238 | $5,254 |
DEBT_ARRANGEMENTS_Note_Payable
DEBT ARRANGEMENTS (Note Payable) (Details) (USD $) | 0 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | 14-May-14 | Sep. 30, 2014 | Sep. 30, 2013 |
Debt Instrument [Line Items] | |||
Long-term debt | $5,238 | $5,254 | |
Debt issuance costs | 134 | ||
Replacement Note Payable Two [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 5,254 | ||
Debt instrument, maturity date | 31-Oct-14 | ||
Debt instrument, interest rate | 6.00% | ||
Debt instrument, principal payment | 47 | ||
Debt instrument, face amount | 5,786 | ||
Debt instrument, variable interest reference rate | LIBOR | ||
Debt instrument, basis spread on variable rate | 4.00% | ||
Debt instrument, minimum interest rate | 6.00% | ||
Fixed charge coverage ratio | 1.25 | ||
Total liabilities to tangible net worth ratio | 2.1 | ||
Debt issuance costs | 60 | ||
Unamortized debt issuance costs | $21 |
DEBT_ARRANGEMENTS_Revolving_Li
DEBT ARRANGEMENTS (Revolving Line of Credit) (Details) (Revolving Line of Credit [Member], EGC [Member], USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Debt Instrument [Line Items] | ||
Line of credit, maximum borrowing capacity | $3,000 | |
Expiration date of credit agreement | 31-Jan-14 | |
Debt instrument, variable interest reference rate | Citibank's Prime Rate | |
Debt instrument, basis spread on variable rate | 5.00% | |
Line of credit, frequency of facilities fee payments | annually | |
Line of credit, facilities fee, percentage | 2.00% | |
Line of credit, collateral monitoring fee, percentage | 0.20% | |
Line of credit, collateral | Borrowings under the Credit Agreement were secured by a blanket lien on our personal property, including certain eligible accounts receivable, inventory, and intellectual property assets, a second mortgage on our West Lafayette and Evansville real estate and all common stock of our U.S. subsidiaries and 65% of the common stock of our non-United States subsidiary. Borrowings were calculated based on 75% of eligible accounts receivable. | |
Minimum net worth covenant requirement | 8,000 | |
Line of credit, amount outstanding | 1,415 | |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit, frequency of periodic payments | monthly | |
Line of credit, periodic interest payments | $15 |
DEBT_ARRANGEMENTS_New_Credit_F
DEBT ARRANGEMENTS (New Credit Facility) (Details) (USD $) | 0 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | 14-May-14 | Sep. 30, 2014 | Oct. 01, 2015 |
Debt Instrument [Line Items] | |||
Debt issuance costs | $134 | ||
Huntington Bank [Member] | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | 134 | ||
Facility term | 5 years | ||
Unamortized debt issuance costs | 122 | ||
Swap [Member] | |||
Debt Instrument [Line Items] | |||
Percentage of debt covered by swap | 60.00% | ||
Fixed interest rate | 5.00% | ||
New Credit Facility Term Loan [Member] | Huntington Bank [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | 5,500 | ||
Debt instrument, principal payment | 65 | ||
Debt instrument, carrying amount | 5,238 | ||
Debt instrument, variable interest reference rate | LIBOR | ||
Debt instrument, basis spread on variable rate | 3.25% | ||
New Credit Facility Revolving Loan [Member] | Huntington Bank [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | 2,000 | ||
Debt instrument, variable interest reference rate | LIBOR | ||
Debt instrument, basis spread on variable rate | 3.00% | ||
Line of credit, facilities fee, percentage | 0.25% | ||
Line of credit, amount outstanding | $202 | ||
Covenant terms | The revolving loan includes an annual clean-up provision that requires the Company to maintain a balance of not more than 20% of the maximum loan of $2,000 for a period of 30 days in any 12 month period while the revolving loan is outstanding. | ||
Fixed charge coverage ratio | 1.1 | ||
Leverage ratio | 3 | ||
New Credit Facility Revolving Loan [Member] | Scenario, Forecast [Member] | Huntington Bank [Member] | |||
Debt Instrument [Line Items] | |||
Leverage ratio | 2.5 |
INCOME_TAXES_Schedule_of_Defer
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets - Current: | ||
Inventory | $187 | $208 |
Accrued compensation and vacation | 246 | 192 |
Accrued expenses and other | 178 | 185 |
Total current deferred tax assets | 611 | 585 |
Deferred tax liabilities - Current: | ||
Prepaid expenses | -72 | -49 |
Total net current deferred tax assets | 539 | 536 |
Deferred tax assets - Noncurrent: | ||
Domestic net operating loss carryforwards | 4,828 | 5,737 |
Stock compensation expense | 54 | 45 |
Foreign tax credit carryover | 119 | |
AMT credit carryover | 58 | 54 |
Total noncurrent deferred tax assets | 4,940 | 5,955 |
Deferred tax liabilities - Noncurrent: | ||
Unrealized gain/loss - warrant liability | -180 | -530 |
Investment in subsidiary | -3,173 | -3,214 |
Basis difference for fixed assets | -408 | -461 |
Total noncurrent deferred tax liabilities | -3,761 | -4,205 |
Total net noncurrent deferred tax assets | 1,179 | 1,750 |
Valuation allowance for net deferred tax assets | -1,718 | -2,286 |
Net deferred tax asset (liability) |
INCOME_TAXES_Schedule_of_the_P
INCOME TAXES (Schedule of the Provision (Benefit) for Income Taxes) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Current: | ||
Federal | $5 | $13 |
State and local | 2 | 3 |
Foreign | ||
Deferred: | ||
Federal | ||
State and local | ||
Foreign | ||
Income tax (benefit) expense | $7 | $16 |
INCOME_TAXES_Reconciliation_of
INCOME TAXES (Reconciliation of Effective Income Tax Rate) (Details) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
INCOME TAXES [Abstract] | ||
Statutory federal income tax rate: | 34.00% | 34.00% |
Increases (decreases): | ||
State and local income taxes, net of Federal tax benefit, if applicable | -0.10% | 0.30% |
Nondeductible expenses | -15.20% | 7.20% |
Nontaxable foreign (gains) losses | ||
Uncertain tax positions | ||
Valuation allowance changes | -19.30% | -39.40% |
Other | ||
Effective income tax rate | -0.60% | 2.10% |
INCOME_TAXES_Narrative_Details
INCOME TAXES (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Taxes [Line Items] | |||
Cash paid for income taxes | $17 | $3 | |
Liability for other uncertain income tax positions | 16 | 16 | 16 |
Impairment of goodwill | 374 | ||
Alternative Minimum Tax Credit Carryforward [Member] | |||
Income Taxes [Line Items] | |||
Tax credit carryforwards | 58 | ||
Foreign Tax Authority [Member] | |||
Income Taxes [Line Items] | |||
Net operating loss carry forwards | 8,626 | ||
Internal Revenue Service (IRS) [Member] | |||
Income Taxes [Line Items] | |||
Net operating loss carry forwards | 11,959 | ||
Valuation allowance | 1,718 | 2,286 | |
Internal Revenue Service (IRS) [Member] | Earliest Tax Year [Member] | |||
Income Taxes [Line Items] | |||
Expirations of operating loss carry forwards | 30-Sep-15 | ||
Internal Revenue Service (IRS) [Member] | Latest Tax Year [Member] | |||
Income Taxes [Line Items] | |||
Expirations of operating loss carry forwards | 30-Sep-32 | ||
State [Member] | |||
Income Taxes [Line Items] | |||
Net operating loss carry forwards | $15,744 | ||
State [Member] | Earliest Tax Year [Member] | |||
Income Taxes [Line Items] | |||
Expirations of operating loss carry forwards | 30-Sep-15 | ||
State [Member] | Latest Tax Year [Member] | |||
Income Taxes [Line Items] | |||
Expirations of operating loss carry forwards | 30-Sep-32 |
INCOME_TAXES_Reconciliation_of1
INCOME TAXES (Reconciliation of Unrecognized Tax Benefits) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
INCOME TAXES [Abstract] | ||
Balance at beginning of the year | $16 | $16 |
Additions based on tax positions related to the current year | ||
Additions for tax positions of prior years | ||
Reductions for tax positions of prior years | ||
Settlements | ||
Balance at end of the year | $16 | $16 |
STOCKBASED_COMPENSATION_Narrat
STOCK-BASED COMPENSATION (Narrative) (Details) (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiration period | 10 years | |
Common stock authorized to issuance under employee compensation plan | 500,000 | |
Common stock available for issuance under employee compensation plan | 234,000 | |
Options outstanding that were granted outside of the plan | 155,000 | 155,000 |
Common Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock option exercise, shares | 7,692 | 1,372 |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options exercised, intrinsic value | 1 | |
Stock option exercise, shares | 11,000 | 7,000 |
Unrecognized compensation cost related to non-vested stock options | 116 | |
Unrecognized compensation cost, recognition period | 1 year 22 days | |
Stock-based compensation expense | 84 | 225 |
Employee Stock Option [Member] | Cashless Exercise [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options exercised, intrinsic value | 13 | |
Stock option exercise, shares | 8,000 | |
Employee Stock Option [Member] | Exercised with Cash [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options exercised, intrinsic value | 4 | |
Stock option exercise, shares | 3,000 |
STOCKBASED_COMPENSATION_Fair_V
STOCK-BASED COMPENSATION (Fair Value Assumptions) (Details) (Employee Stock Option [Member]) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.36% | 1.42% |
Dividend yield | 0.00% | 0.00% |
Volatility of the expected market price of the Company's common stock, minimum | 94.50% | 93.60% |
Volatility of the expected market price of the Company's common stock, maximum | 94.70% | 93.70% |
Expected life of the options (years) | 8 years | 8 years |
STOCKBASED_COMPENSATION_Summar
STOCK-BASED COMPENSATION (Summary of Stock Option Activity) (Details) (Employee Stock Option [Member], USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Employee Stock Option [Member] | ||
Options (shares) | ||
Outstanding - October 1, | 479,000 | 354,000 |
Exercised | -11,000 | -7,000 |
Granted | 40,000 | 178,000 |
Terminated | -82,000 | -46,000 |
Outstanding - September 30, | 426,000 | 479,000 |
Exercisable - September 30, | 317,000 | |
Weighted-Average Exercise Price | ||
Outstanding - October 1, | $1.77 | $1.99 |
Exercised | $1.14 | $1.35 |
Granted | $2.69 | $1.46 |
Terminated | $2 | $2.35 |
Outstanding - September 30, | $1.83 | $1.77 |
Exercisable - September 30, | $1.83 | |
Weighted-Average Grant Date Fair Value | ||
Exercised | $0.95 | $1.14 |
Granted | $2.25 | $1.20 |
Outstanding - September 30, | $1.41 | $1.35 |
Exercisable - September 30, | $1.38 | |
Weighted-Average Remaining Contractual Life | ||
Outstanding - September 30, | 7 years 2 months 12 days | 7 years 10 months 24 days |
Exercisable - September 30, | 6 years 8 months 12 days | |
Aggregate Intrinsic Value | ||
Outstanding - September 30, | $348 | $43 |
Exercisable - September 30, | $279 |
STOCKBASED_COMPENSATION_Summar1
STOCK-BASED COMPENSATION (Summary of Non-Vested Options) (Details) (Employee Stock Option [Member], USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Employee Stock Option [Member] | ||
Number of Shares | ||
Non-vested options at October 1 | 261 | |
Granted | 40 | 178 |
Vested | -131 | |
Forfeited | -61 | |
Non-vested options at September 30 | 109 | 261 |
Weighted- Average Grant Date Fair Value | ||
Non-vested options at October 1 | $1.11 | |
Granted | $2.25 | $1.20 |
Vested | $1.08 | |
Forfeited | $1.20 | |
Non-vested options at September 30 | $1.51 | $1.11 |
STOCKBASED_COMPENSATION_Summar2
STOCK-BASED COMPENSATION (Summary of Outstanding and Exercisable Options) (Details) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 |
$0.79 - 1.01 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum | $0.79 |
Range of Exercise Prices, maximum | $1.01 |
Shares Outstanding | 86 |
Weighted-Average Remaining Contractual Life | 6 years 6 months 14 days |
Weighted-Average Exercise Price | $0.96 |
Shares Exercisable | 62 |
Weighted-Average Exercise Price, Exercisable | $0.96 |
$1.02 - 4.59 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum | $1.02 |
Range of Exercise Prices, maximum | $4.59 |
Shares Outstanding | 296 |
Weighted-Average Remaining Contractual Life | 8 years 1 month 13 days |
Weighted-Average Exercise Price | $1.58 |
Shares Exercisable | 211 |
Weighted-Average Exercise Price, Exercisable | $1.38 |
$4.60 - 8.79 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum | $4.60 |
Range of Exercise Prices, maximum | $8.79 |
Shares Outstanding | 44 |
Weighted-Average Remaining Contractual Life | 2 years 1 month 17 days |
Weighted-Average Exercise Price | $5.18 |
Shares Exercisable | 44 |
Weighted-Average Exercise Price, Exercisable | $5.18 |
RETIREMENT_PLAN_Details
RETIREMENT PLAN (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
RETIREMENT PLAN [Abstract] | ||
Company's contribution to plan, as a percent of participant's total wages | 1.00% | |
Employer's match percentage | 22.00% | |
Maximum percentage of participant's contribution eligible for employer matching contribution | 10.00% | |
Maximum annual contribution, percent of participant's annual wages | 30.00% | |
Contribution expense | $1 | $1 |
SEGMENT_INFORMATION_Operating_
SEGMENT INFORMATION (Operating Segments) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
segments | ||
Segment Reporting Information [Line Items] | ||
Number of segments | 2 | |
Revenue | $24,584 | $22,068 |
Operating income (loss) | 334 | 830 |
Interest Expense | -488 | -649 |
Change in fair value of warrant liability - (increase) decrease | -918 | 601 |
Other income | 9 | 7 |
(Loss) income before income taxes | -1,063 | 789 |
Identifiable assets | 23,774 | 25,597 |
Goodwill, net | 1,009 | 1,383 |
Depreciation and amortization | 1,597 | 1,723 |
Capital Expenditures | 490 | 8 |
Service [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 19,097 | 16,473 |
Operating income (loss) | 469 | 77 |
Identifiable assets | 14,132 | 15,149 |
Goodwill, net | 1,009 | 1,009 |
Depreciation and amortization | 1,421 | 1,519 |
Capital Expenditures | 426 | -1 |
Product [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 5,487 | 5,595 |
Operating income (loss) | -135 | 753 |
Identifiable assets | 5,837 | 6,399 |
Goodwill, net | 374 | |
Depreciation and amortization | 176 | 204 |
Capital Expenditures | 64 | 9 |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | $3,805 | $4,049 |
SEGMENT_INFORMATION_Geographic
SEGMENT INFORMATION (Geographical Information) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales to External Customers: | $24,584 | $22,068 |
Long-lived assets | 17,119 | 18,364 |
North America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales to External Customers: | 22,184 | 19,635 |
Long-lived assets | 17,119 | 18,364 |
Pacific Rim [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales to External Customers: | 740 | 1,019 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales to External Customers: | 1,086 | 1,111 |
Other [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales to External Customers: | $574 | $303 |
SEGMENT_INFORMATION_Major_Cust
SEGMENT INFORMATION (Major Customers) (Details) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Arrowhead [Member] | Sales [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 12.10% | 0.40% |
Arrowhead [Member] | Accounts Receivable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 18.50% | 4.60% |
Principia Biopharma [Member] | Sales [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 8.70% | 0.40% |
Principia Biopharma [Member] | Accounts Receivable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 8.40% | 7.10% |
Boehringer Ingelheim [Member] | Sales [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 5.90% | 6.00% |
Boehringer Ingelheim [Member] | Accounts Receivable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 2.50% | 2.60% |
Pfizer, Inc. [Member] | Sales [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 1.70% | 1.50% |
Pfizer, Inc. [Member] | Accounts Receivable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 4.90% | 3.30% |
RESTRUCTURING_Narrative_Detail
RESTRUCTURING (Narrative) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2014 |
employees | ||
Restructuring Cost and Reserve [Line Items] | ||
Area of property | 120,000 | |
Number of employees terminated | 74 | |
Restructuring reserves | $978 | $1,078 |
Scenario, Forecast [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated rent income | 200 | |
Lease Related Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserves | $877 | $961 |
RESTRUCTURING_Summary_of_Restr
RESTRUCTURING (Summary of Restructuring Activity) (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Restructuring Cost and Reserve [Line Items] | |
Balance | $978 |
Total Charges | 84 |
Cash Payments | |
Other | 16 |
Balance | 1,078 |
Lease Related Costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Balance | 877 |
Total Charges | 84 |
Cash Payments | |
Other | |
Balance | 961 |
Receivable from Sale of Equipment [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Balance | -16 |
Total Charges | |
Cash Payments | |
Other | 16 |
Balance | |
Other Costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Balance | 117 |
Total Charges | |
Cash Payments | |
Other | |
Balance | $117 |
SELFINSURANCE_Details
SELF-INSURANCE (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
SELF-INSURANCE [Abstract] | ||
Self insurance exposure for individual claims | $75 | |
Minimum annual aggregate attachment point | 85 | |
Self-insured employee health plan expenses | $1,055 | $1,035 |
MANAGEMENTS_PLAN_Details
MANAGEMENT'S PLAN (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
MANAGEMENT'S PLAN [Abstract] | |||
Revenue growth (decline), percent | 11.40% | ||
Revenues | $24,584 | $22,068 | |
Cost of revenue | 16,622 | 15,013 | |
Cash and cash equivalents | 981 | 1,304 | 721 |
Cash generated from operations | 1,684 | 1,594 | |
Capital expenditures | $490 | $8 | |
Sales Revenue, Net [Member] | Cost of Goods Sold Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 67.60% | 68.00% |