Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Apr. 02, 2016 | May. 23, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SEVCON, INC. | |
Entity Central Index Key | 825,411 | |
Current Fiscal Year End Date | --09-30 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 4,218,339 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 2, 2016 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Apr. 02, 2016 | Sep. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 6,726 | $ 8,048 |
Trade receivables, net of allowances for doubtful accounts of $149 at April 2, 2016 and $37 at September 30, 2015 | 9,926 | 8,995 |
Other receivables | 1,062 | 467 |
Inventories | 13,256 | 6,790 |
Deferred taxes | 282 | 1,244 |
Prepaid expenses and other current assets | 3,391 | 2,337 |
Total current assets | 34,643 | 27,881 |
Property, plant and equipment, at cost: | ||
Land and improvements | 20 | 21 |
Buildings and improvements | 662 | 693 |
Equipment | 13,292 | 11,485 |
Property, plant and equipment, at cost | 13,974 | 12,199 |
Less: accumulated depreciation | (10,167) | (9,574) |
Net property, plant and equipment | 3,807 | 2,625 |
Long-term deferred tax assets | 4,189 | 3,232 |
Intangible assets, net | 10,505 | 0 |
Goodwill | 8,835 | 1,435 |
Other long-term assets | 483 | 443 |
Total assets | 62,462 | 35,616 |
Current liabilities: | ||
Current portion of long term debt | 0 | 0 |
Accounts payable | 7,843 | 6,184 |
Accrued expenses | 3,756 | 1,973 |
Accrued and deferred taxes on income | 137 | 0 |
Dividends payable | 217 | 200 |
Total current liabilities | 11,953 | 8,357 |
Liability for pension benefits | 11,428 | 10,963 |
Long-term deferred tax liabilities | 1,851 | 500 |
Debt to related parties | 2,545 | 0 |
Long-term bank debt, net | 15,698 | 0 |
Total liabilities | $ 43,475 | $ 19,820 |
Commitments and Contingencies (Note 15) | ||
Stockholders' equity: | ||
Preferred stock, par value $.10 per share - authorized - 1,000,000 shares; Outstanding, 451,699 shares at April 2, 2016 and 452,124 at September 30, 2015 | $ 45 | $ 45 |
Common stock, par value $.10 per share - authorized 20,000,000; outstanding, 4,210,275 shares at April 2, 2016 and 3,694,872 at September 30, 2015 | 421 | 369 |
Premium paid in on common stock | 11,490 | 6,637 |
Premium paid in on preferred stock | 9,049 | 9,058 |
Retained earnings | 8,924 | 10,607 |
Accumulated other comprehensive loss | (10,979) | (11,004) |
Total Sevcon, Inc. and subsidiaries stockholders' equity | 18,950 | 15,712 |
Non-controlling interests | 37 | 84 |
Total stockholders' equity | 18,987 | 15,796 |
Total liabilities and stockholders' equity | $ 62,462 | $ 35,616 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Apr. 02, 2016 | Sep. 30, 2015 |
Current assets: | ||
Trade receivables, allowances for doubtful accounts | $ 149 | $ 37 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding (in shares) | 451,699 | 452,124 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares outstanding (in shares) | 4,210,275 | 3,694,872 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2016 | Apr. 04, 2015 | Apr. 02, 2016 | Apr. 04, 2015 | |
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) [Abstract] | ||||
Net sales | $ 13,181 | $ 10,340 | $ 22,296 | $ 20,273 |
Cost of sales | (9,059) | (5,779) | (14,058) | (12,487) |
Gross profit | 4,122 | 4,561 | 8,238 | 7,786 |
Selling, general and administrative expenses | (3,345) | (2,586) | (6,105) | (4,295) |
Research and development expenses | (1,347) | (1,301) | (2,207) | (2,535) |
Acquisition costs | (1,101) | 0 | (1,417) | 0 |
Operating income (loss) | (1,671) | 674 | (1,491) | 956 |
Interest expense | (109) | (14) | (131) | (40) |
Interest income | 4 | 11 | 12 | 16 |
Foreign currency gain | 106 | 235 | 35 | 279 |
Change in fair value of foreign exchange contracts | 0 | (200) | 0 | (200) |
Income (loss) before income tax | (1,670) | 706 | (1,575) | 1,011 |
Income tax (provision) benefit | 90 | (65) | 79 | (105) |
Net income (loss) | (1,580) | 641 | (1,496) | 906 |
Net loss attributable to non-controlling interests | 9 | 12 | 47 | 29 |
Net income (loss) attributable to Sevcon, Inc. and subsidiaries | (1,571) | 653 | (1,449) | 935 |
Preferred share dividends | (123) | (114) | (234) | (225) |
Net income (loss) attributable to common stockholders | $ (1,694) | $ 539 | $ (1,683) | $ 710 |
Basic income (loss) per share (in dollars per share) | $ (0.43) | $ 0.16 | $ (0.45) | $ 0.21 |
Fully diluted income (loss) per share (in dollars per share) | $ (0.43) | $ 0.14 | $ (0.45) | $ 0.19 |
Weighted average shares used in computation of earnings per share: | ||||
Basic (in shares) | 3,911 | 3,466 | 3,709 | 3,446 |
Diluted (in shares) | 3,911 | 4,912 | 3,709 | 4,903 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2016 | Apr. 04, 2015 | Apr. 02, 2016 | Apr. 04, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract] | ||||
Net income (loss) attributable to Sevcon, Inc. and subsidiaries | $ (1,571) | $ 653 | $ (1,449) | $ 935 |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustment | (11) | (292) | (89) | (436) |
Defined benefit pension plans: | ||||
Pension benefit plans adjustments during the period | 72 | 68 | 149 | 132 |
Tax expense | (17) | (17) | (35) | (31) |
Comprehensive income (loss) | $ (1,527) | $ 412 | $ (1,424) | $ 600 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Cash flow from operating activities: | ||
Net (loss) income | $ (1,496) | $ 906 |
Adjustments to reconcile net (loss) income to net cash (used by) generated from operating activities: | ||
Depreciation | 447 | 311 |
Amortization of intangible assets | 203 | 0 |
Unrealized loss on change in value of foreign exchange contracts | 0 | 200 |
Stock-based compensation | 358 | 259 |
Pension contributions greater than pension expense | (120) | (206) |
Deferred tax provision | (79) | 105 |
Increase (decrease) in cash resulting from changes in operating assets and liabilities: | ||
Trade receivables | 1,699 | (815) |
Other receivables | 86 | (42) |
Inventories | (2,330) | (553) |
Prepaid expenses and other current assets | (248) | (180) |
Accounts payable | (1,789) | 250 |
Accrued expenses | (1,719) | (75) |
Accrued and deferred taxes on income | (202) | (86) |
Net cash (used by) generated from operating activities | (5,190) | 74 |
Cash flow used by investing activities: | ||
Acquisition of property, plant and equipment | (784) | (592) |
Acquisition of subsidiary, net of cash acquired | (9,255) | 0 |
Net cash used by investing activities | (10,039) | (592) |
Cash flow used by financing activities: | ||
Net borrowings/(repayment) of long term debt | 15,198 | (1,723) |
Dividends paid | (217) | (42) |
Purchase and retirement of common stock | (222) | (98) |
Net cash generated from (used by) financing activities | 14,759 | (1,863) |
Effect of exchange rate changes on cash | (852) | (212) |
Net decrease in cash | (1,322) | (2,593) |
Beginning balance - cash and cash equivalents | 8,048 | 11,238 |
Ending balance - cash and cash equivalents | 6,726 | 8,645 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 204 | 86 |
Cash paid for interest | 131 | 40 |
Investment in subsidiary, net of cash acquired: | ||
Cash consideration | 10,832 | 0 |
Cash acquired | (1,577) | 0 |
Net cash investment in subsidiary | 9,255 | 0 |
Issuance of common stock on acquisition of subsidiary | $ 4,760 | $ 0 |
Basis of presentation
Basis of presentation | 6 Months Ended |
Apr. 02, 2016 | |
Basis of presentation [Abstract] | |
Basis of presentation | (1) Basis of presentation Sevcon, Inc. (or the “Company”) is a Delaware corporation organized on December 22, 1987 to carry on the electronic controls business previously performed by Tech/Ops, Inc. (Tech/Ops). Through wholly-owned subsidiaries located in the United States, England, France, South Korea and Japan and a 50% owned joint venture located in China, and through an international dealer network, the Company designs and sells, under the Sevcon name, motor controllers for zero emission electric and hybrid vehicles (EVs). The controls are used to vary the speed and movement of vehicles, to integrate specialized functions and to optimize the energy consumption of the vehicle's power source. Through a wholly-owned subsidiary in Italy acquired in January 2016, the Company also designs, manufactures and sells battery chargers for electric vehicles and power management and uninterrupted power source systems for industrial, medical and telecom applications, as well as electronic instrumentation for battery laboratories. Sevcon's customers are manufacturers of on and off-road vehicles, including cars, trucks, buses, motorcycles, fork lift trucks, aerial lifts, mining vehicles, airport tractors, sweepers and other electrically powered vehicles. Through another subsidiary located in the United Kingdom, Sevcon, Inc. manufactures special metalized film capacitors that are used as components in the power electronics, signaling and audio equipment markets. Accounting for wholly-owned subsidiaries The accompanying consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries; Sevcon USA, Inc., Sevcon Ltd, Industrial Capacitors (Wrexham) Ltd., Sevcon Asia Limited, Sevcon Japan KK, Sevcon Security Corp., Sevcon S.r.l. and Bassi S.r.l., in accordance with the provisions required by the Consolidation Topic 810 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). All material intercompany transactions have been eliminated. Accounting for joint-venture subsidiary For the Company's less than wholly (50%) owned joint venture subsidiary, Sevcon New Energy Technology (Hubei) Company Limited, the Company first analyzes whether this joint venture is a variable interest entity (a “VIE”) in accordance with ASC 810 and if so, whether the Company is the primary beneficiary requiring consolidation. A VIE is an entity that has (i) insufficient equity to permit it to finance its activities without additional subordinated financial support or (ii) equity holders that lack the characteristics of a controlling financial interest. VIEs are consolidated by the primary beneficiary, which is the entity that has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that potentially could be significant to the entity. Variable interests in a VIE are contractual, ownership, or other financial interests in a VIE that change with changes in the fair value of the VIE’s net assets. The Company continuously re-assesses (i) whether the joint venture is a VIE, and (ii) if the Company is the primary beneficiary of the VIE. If it is determined that the joint venture qualifies as a VIE and the Company is the primary beneficiary, it is consolidated. Based on the Company's analysis for this joint venture, the Company has determined that it is a VIE and that the Company is the primary beneficiary. While the Company owns 50% of the equity interest in the joint venture, the other 50% is owned by a local unrelated third party, and the joint venture agreement with that third party provides the Company with greater voting rights. Accordingly, the Company consolidates its joint venture under the VIE rules and reflects the third party’s 50% interest in the consolidated financial statements as a non-controlling interest. The Company records this non-controlling interest at its initial fair value, adjusting the basis prospectively for the third party’s share of the respective consolidated investments’ net income or loss or equity contributions and distributions. This non-controlling interest is not redeemable by the equity holders and is presented as part of permanent equity. Income and losses are allocated to the non-controlling interest holder based on its economic ownership percentage. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normally recurring accruals) necessary to present fairly the financial position of Sevcon, Inc. as of April 2, 2016 and the results of operations and cash flows for the three and six month periods ended April 2, 2016. These unaudited interim financial statements should be read in conjunction with the 2015 annual consolidated financial statements and related notes included in the 2015 Sevcon, Inc. Annual Report filed on Form 10-K (the “2015 consolidated financial statements and related notes included in the 2015 Sevcon, Inc. Annual Report filed on Form 10-K (the “2015 10-K”). Unless otherwise indicated, each reference to a year means the Company’s fiscal year, which ends on September 30. The results of operations for the three and six month periods ended April 2, 2016 are not necessarily indicative of the results to be expected for the full year. |
Summary of significant accounti
Summary of significant accounting policies | 6 Months Ended |
Apr. 02, 2016 | |
Summary of significant accounting policies [Abstract] | |
Summary of significant accounting policies | (2) Summary of significant accounting policies There have been no changes since the end of 2015 to the significant accounting policies followed by Sevcon, Inc. |
Acquisitions
Acquisitions | 6 Months Ended |
Apr. 02, 2016 | |
Acquisitions [Abstract] | |
Acquisitions | (3) Acquisitions Bassi Unipersonale S.r.l (“Bassi”) On January 26, 2016, the Company, and its wholly-owned indirect subsidiary, Sevcon S.r.l., (“Sevcon Italy”) entered into a Quota Sale and Purchase Agreement with Bassi Holding S.r.l., (“Bassi Holding”) an Italian limited liability company, and the quota owners of Bassi Holding, to acquire all the outstanding quotas of Bassi, a limited liability company located in Lugo, Italy. Bassi designs, manufactures and sells battery chargers for electric vehicles and power management and uninterrupted power source systems for industrial, medical and telecom applications, as well as electronic instrumentation for battery laboratories. The principal reasons for the acquisition were to enable the Company to expand its addressable share of the high-growth electrification market and enhance earnings by adding an immediately accretive business. In order to fund the cash element of the acquisition price, on January 27, 2016, the Company also entered into a Term Loan Agreement providing for a credit facility with Banca Monte dei Paschi di Siena S.p.A. The acquisition was closed on January 29, 2016. Purchase Price The total purchase price was approximately $19.1 million and included (1) cash consideration of €10.0 million ($10.8 million) and (2) 500,000 shares of the Company’s common stock ($4.8 million at the Company’s Closing Date stock price of $9.52) and (3) the fair value of assumed dividends payable to the former owner of Bassi, Bassi Holding of $3.5 million. Sevcon Italy is required to distribute to the former owner of Bassi, Bassi Holding, outstanding dividends at fair value aggregating €3.23 million (approximately $3.5 million) in increments over a three-year period, post-closing. During the six months ended April 2, 2016, the Company incurred $1.4 million in costs and expenses related to the Company’s acquisition of Bassi that are included in the consolidated statement of operations. The Company accounted for the transaction using the acquisition method and, accordingly, the consideration has been allocated to the tangible and intangible assets acquired and liabilities assumed on the basis of their respective estimated fair values on the acquisition date. Goodwill resulting from this acquisition is largely attributable to the experienced workforce of Bassi and synergies expected to arise after the integration of Bassi’s products and operations into those of the Company. Goodwill resulting from this acquisition is not deductible for tax purposes. Identifiable intangible assets acquired as part of the acquisition included definite-lived intangible assets for developed technologies, customer relationships, order backlog and trade names, which are being amortized using the straight-line method over their estimated useful lives, as well as indefinite-lived intangible assets. The fair value of the total consideration has been allocated based on the estimated fair values of assets acquired and liabilities assumed as follows (in thousands) (in thousands of dollars) January 29, 2016 Consideration Cash $ 10,832 Common stock (500,000 shares of Sevcon, Inc.) 4,760 Fair value of pre-acquisition dividends payable to Bassi Holding 3,503 Fair value of total consideration $ 19,095 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash $ 1,577 Accounts receivable 3,318 Inventory 4,183 Property and equipment 923 Other assets 715 Accounts payable (3,513 ) Accrued and other current liabilities (2,020 ) Other long-term liabilities $ (3,307 ) $ 1,876 Estimated fair value of identifiable intangible assets acquired: Developed technologies 325 Customer relationships 8,774 Trade name 758 Order backlog 325 10,182 Fair value of total consideration, excluding goodwill 12,058 Goodwill 7,037 Fair value of total consideration $ 19,095 The above fair value allocation is considered preliminary and is subject to revision during the measurement period. Management is in the process of completing its evaluation of acquired intangible assets. Additionally, the Company is in the process of validating the fair values of working capital including inventory and property and equipment. The preliminary fair value of the assets acquired includes accounts receivable of $3,318,000. The gross amount due under contracts is $3,428,000 of which $110,000 is expected to be uncollectible. Valuation of Intangible Assets Acquired The following table sets forth the components of intangible assets acquired in connection with the Bassi acquisition (dollars in thousands): Amount Assigned Amortization Period (in years) Definite-lived intangible assets: Developed technologies $ 325 10.0 Customer relationships 8,774 15.0 Trade name 758 10.0 Order backlog 325 1.0 Total intangible assets acquired $ 10,182 Actual Results of Bassi Acquisition Bassi’s net revenues and operating income following the acquisition are included in the Company’s operating results for the period ended April 2, 2016 and were $4.0 million and $0.3 million, respectively. Pro Forma Summary The unaudited consolidated pro forma results for the six month periods ended April 2, 2016 and April 4, 2015 are set out in the table below. The pro forma consolidated results combine the results of operations of the Company and Bassi as though Bassi had been acquired on October 1, 2014 and include amortization charges for the acquired intangibles and interest expense related to the Company’s borrowings to finance the acquisition. The 2016 pro forma results were adjusted to exclude $1,417,000 of acquisition costs related to Bassi and $97,000 of non-recurring expense relating to the fair value adjustments to acquisition date inventory and property and equipment. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place on October 1, 2014. (in thousands of dollars) Six months ended April 2, 2016 Six months ended April 4, 2015 Revenue $ 27,975 $ 28,647 Net income (loss) $ (123 ) $ 636 |
Stock-based compensation plans
Stock-based compensation plans | 6 Months Ended |
Apr. 02, 2016 | |
Stock-based compensation plans [Abstract] | |
Stock-based compensation plans | (4) Stock-based compensation plans Under the Company’s 1996 Equity Incentive Plan (the “Plan”) there were 336,990 shares reserved and available for grant at April 2, 2016. There were 139,578 shares reserved and available for grant at September 30, 2015. The Plan, which is shareholder-approved, permits the grant of Restricted Stock, Restricted Stock Units, Options and Stock Appreciation Rights (“SARs”). SARs may be awarded either separately, or in relation to options granted, and for the grant of bonus shares. The Company believes that such awards better align the interests of the employees with those of its shareholders. Options granted are exercisable at a price not less than fair market value on the date of grant. Recipients of grants of options must execute a standard form of non-competition agreement. Share options The Company estimated the fair values of its stock options using the Black-Scholes-Merton option-pricing model, which was developed for use in estimating the fair values of stock options. Option valuation models, including the Black-Scholes-Merton option-pricing model, require the input of assumptions, including stock price volatility. Changes in the input assumptions can materially affect the fair value estimates and ultimately how much the Company recognizes as stock-based compensation expense. The fair values of the Company’s stock options were estimated at the grant dates. The weighted average input assumptions used and resulting fair values of stock options were as follows for fiscal 2016: Expected life (in years) 4.0 Risk-free interest rate 1.55% Volatility 61.43% Dividend yield 0.00% Weighted-average fair value per share $4.81 Expected Life The expected term represents the period of time that options are expected to be outstanding. As the Company does not have sufficient historical evidence for determining the expected term of the stock option awards granted, the expected life assumption has been determined using the simplified method, which is an average of the contractual term of the option and its ordinary vesting period. Risk-free Interest Rate The Company bases the risk-free interest rate assumption on zero-coupon U.S. treasury instruments appropriate for the expected term of the stock option grants. Expected Volatility The expected stock price volatility for the Company’s common stock is estimated based on the historic volatility of the Company’s common stock for a period equivalent to the expected term of the stock option grants. Expected Dividend Yield The Company bases the expected dividend yield assumption on the fact that there is no present intention to pay cash dividends. Therefore an expected dividend yield of zero has been used. Performance based awards Stock options: In December 2015, the Compensation Committee awarded performance-based equity compensation to nine executives and managers, including the principal executive officer and principal financial officer, consisting of 38,460 shares in the form of stock options. The performance options have an exercise price of $9.94 per share, representing the average of the highest intraday bid and ask quotes for the Company’s common stock on the date of grant, December 16, 2015, and the preceding four trading days. The performance options will vest subject to the Company meeting an earnings per share target applicable to fiscal year 2018 set by the Compensation Committee so long as the employee is then employed by the Company. The estimated fair value of the stock on the date of the grant was $185,000 based on the fair market value of stock on the date of issue. The unvested compensation is being charged to income over three years. The charge to income for this employee stock option grant will be approximately $15,000 on a quarterly basis. A summary of option activity under the employee share option plan as of April 2, 2016, and changes during the quarter then ended is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of September 30, 2015 - $ - - $ - Granted 38,460 $ 9.94 5.00 $ 11,153 Exercised - - - - Forfeited or Expired - - - - Outstanding at April 2, 2016 38,460 $ 9.94 4.71 $ 8,077 Exercisable - - - - Vested and expected to vest 34,385 $ 9.94 4.71 $ 7,221 Restricted stock: In December 2015, the Company granted 11,540 shares of restricted stock to four employees which will vest subject to the Company meeting the same earnings per share target applicable to fiscal year 2018, so long as the employee is then employed by the Company. The estimated fair value of the stock on the date of the grant was $116,000 based on the fair market value of stock on the date of issue. The unvested compensation is being charged to income over three years. The charge to income for this employee stock option grant will be approximately $10,000 on a quarterly basis. Management has assessed the performance criteria relating to these grants and concluded that are likely to be met. Accordingly the relevant portion of the charge has been taken to income in the three months and six months ended April 2, 2016. There were 38,460 options granted during the six months ended April 2, 2016. The weighted average grant date fair value of these options was $4.81. No options were granted in the six months ended April 4, 2015. Time-based awards Restricted stock: In February 2016, the Company granted 29,700 shares of restricted stock to nine non-employee directors, which will vest on the day before the 2017 annual general meeting providing that the grantee remains a director of the Company, or as otherwise determined by the Compensation Committee. The aggregate fair value of the stock measured on the date of the grant was $292,000 based on the closing sale price of the stock on the date of grant. Subsequent to this, 3,300 of these granted shares of restricted stock were cancelled and returned to the Plan following the resignation of a director. Compensation expense is being charged to income on a straight line basis over the twelve month period during which the forfeiture conditions lapse. The charge to income for these restricted stock grants in the first six months of fiscal 2016 was $22,000 and the subsequent charge will be approximately $65,000 on a quarterly basis. In February 2015, the Company granted 30,600 shares of restricted stock to nine non-employee directors, which vested on the day before the 2016 annual meeting. The aggregate fair value of the stock measured on the date of grant was $225,000, based on the closing sale price of the stock on the date of grant. Compensation expense was charged to income on a straight line basis over the twelve month requisite service period during which the forfeiture conditions lapsed. The charge to income for these restricted stock grants in 2015 was $131,000 and the charge in the six months to April 2 2016 was $94,000. For the purposes of calculating average issued shares for basic earnings per share these shares are only considered to be outstanding when the forfeiture conditions lapse and the shares vest. A summary of restricted stock and stock option activity, including both performance based awards and time-based awards, for the six months ended April 2, 2016 is as follows: Number of shares of Restricted Stock Weighted Average Grant-Date Fair Value Non-vested balance as of September 30, 2014 168,600 $ 5.27 Granted 92,600 $ 7.49 Vested (64,600 ) $ 6.32 Non-vested balance as of September 30, 2015 196,600 $ 5.97 Granted 41,240 $ 9.89 Cancelled (3,300 ) $ 9.82 Vested (91,600 ) $ 6.72 Non-vested balance as of April 2, 2016 142,940 $ 6.53 Number of shares of Stock Options Weighted Average Grant-Date Fair Value Non-vested balance as of September 30, 2015 - $ - Granted 38,460 $ 4.81 Vested - $ - Non-vested balance as of April 2, 2016 38,460 $ 4.81 Stock-based compensation expense was $206,000 and $358,000 for the three and six month periods ended April 2, 2016 and $146,000 and $259,000 for the three and six months ended April 4, 2015 respectively. At April 2, 2016, there was $843,000 of unrecognized compensation expense related to restricted stock and stock options granted under the Plan. The Company expects to recognize that cost over a weighted average period of 1.9 years. |
Cash dividends
Cash dividends | 6 Months Ended |
Apr. 02, 2016 | |
Cash dividends [Abstract] | |
Cash dividends | (5) Cash dividends Common stock dividends The Company is not paying a dividend at the present time and the Board of Directors will consider whether to pay a common stock dividend in the future. Preferred Stock dividends At April 2, 2016 there were 451,699 shares of Series A Convertible Preferred Stock issued and outstanding. The preferred stock, which has a stated value of $24 per share, pays a 4% cumulative annual dividend semi-annually on October 15 and April 15 each year. A semi-annual dividend of $216,816 was paid on April 15, 2016. The next semi-annual dividend will be paid on October 15, 2016. |
Calculation of earnings per sha
Calculation of earnings per share and weighted average shares outstanding | 6 Months Ended |
Apr. 02, 2016 | |
Calculation of earnings per share and weighted average shares outstanding [Abstract] | |
Calculation of earnings per share and weighted average shares outstanding | (6) Calculation of earnings per share and weighted average shares outstanding Basic earnings per share is computed by dividing the net income or loss for the period by the weighted average number of shares of common stock outstanding during the period. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that the denominator is increased for the assumed exercise of dilutive options and other potentially dilutive securities, including convertible preferred stock, using the treasury stock method, unless the effect is anti-dilutive. Basic and diluted net income per common share for the three and six month periods ended April 2, 2016 and April 4, 2015 were calculated as follows: (in thousands of dollars except per share data) Three months ended Six months ended April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Numerator: Net income (loss) attributable to common stockholders for computing net income (loss) per ordinary share - basic $ (1,694 ) $ 539 $ (1,683 ) $ 710 Dividend eliminated upon assumed conversion of convertible preferred stock - 114 - 225 Net income (loss) attributable to common stockholders for computing net income (loss) per ordinary share - diluted $ (1,694 ) $ 653 $ (1,683 ) $ 935 Denominator: Weighted average shares used in calculating net income (loss) per ordinary share - basic 3,911 3,466 3,709 3,446 Adjustment for assumed conversion of convertible preferred stock - 1,382 - 1,382 Adjustment for shares issuable upon vesting of restricted stock - 64 - 75 Weighted average shares used in calculating net income (loss) per ordinary share - diluted 3,911 4,912 3,709 4,903 Net income (loss) per ordinary share - basic $ (0.43 ) $ 0.16 $ (0.45 ) $ 0.21 Net income (loss) per ordinary share - diluted $ (0.43 ) $ 0.14 $ (0.45 ) $ 0.19 No. of shares of convertible preferred stock that are anti-dilutive excluded from calculation of common stock equivalents 1,418 - 1,438 - |
Segment information
Segment information | 6 Months Ended |
Apr. 02, 2016 | |
Segment information [Abstract] | |
Segment information | (7) Segment information The Company has three reportable segments: electronic controls, capacitors and battery chargers. The electronic controls segment produces microprocessor based control systems for zero emission and hybrid electric vehicles. The capacitor segment produces special-metalized film capacitors for sale to electronic equipment manufacturers. The battery chargers segment designs and manufactures battery chargers for electric vehicles. Each segment has its own management team and sales force and the capacitor and battery charger segments have their own manufacturing facilities. The significant accounting policies of the segments are the same as those described above and in Note 1 to the Notes to Consolidated Financial Statements in the 2015 10-K. Inter-segment revenues are accounted for at current market prices. The Company evaluates the performance of each segment principally based on operating income. The Company does not allocate income taxes, interest income and expense or foreign currency translation gains and losses to segments. Information concerning operations of these businesses is as follows: (in thousands of dollars) Three months ended April 2, 2016 Controls Capacitors Chargers Corporate Total Sales to external customers 8,799 402 3,980 - 13,181 Inter segment revenues - - - - - Operating income (loss) (612 ) (13 ) 266 (1,312 ) (1,671 ) Identifiable assets, excluding goodwill 39,407 891 9,264 4,065 53,627 Goodwill 1,435 - 7,400 - 8,835 Three months ended April 4, 2015 Controls Capacitors Chargers Corporate Total Sales to external customers 9,761 579 - - 10,340 Inter-segment revenues - 1 - - 1 Operating income 374 80 - 220 674 Identifiable assets, excluding goodwill 21,977 1,148 - 7,178 30,303 Goodwill 1,435 - - - 1,435 Six months ended April 2, 2016 Controls Capacitors Chargers Corporate Total Sales to external customers 17,506 810 3,980 - 22,296 Inter-segment revenues - - - - - Operating income (loss) 63 (56 ) 266 (1,764 ) (1,491 ) Identifiable assets, excluding goodwill 39,407 891 9,264 4,065 53,627 Goodwill 1,435 - 7,400 - 8,835 Six months ended April 4, 2015 Controls Capacitors Chargers Corporate Total Sales to external customers 19,180 1,093 - - 20,273 Inter-segment revenues - 3 - - 3 Operating income 722 116 - 118 956 Identifiable assets, excluding goodwill 21,977 1,148 - 7,178 30,303 Goodwill 1,435 - - - 1,435 In the electronic controls segment, revenues derive from the following products and services: (in thousands of dollars) Three Months ended Six Months ended April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Electronic controls for zero emission and hybrid electric vehicles $ 5,789 $ 6,237 $ 12,239 $ 12,301 Accessory and aftermarket products and services 3,010 3,524 5,267 6,879 Total controls segment revenues $ 8,799 $ 9,761 $ 17,506 $ 19,180 |
Research and development
Research and development | 6 Months Ended |
Apr. 02, 2016 | |
Research and development [Abstract] | |
Research and development | (8) Research and development The cost of research and development programs is charged against income as incurred and was as follows: In recent years the Company has received several awards of research and development grants by public bodies established by the U.K. government to stimulate technology-enabled innovation. In 2011, the Company was awarded a research and development grant by the Technology Strategy Board to lead a collaborative project with Cummins Generator Technologies and Newcastle University in the U.K. to develop an innovative electric drive system for electric vehicles using advanced switched reluctance motor technology. The Company recorded grant income from this Technology Strategy Board project of $Nil in the six month period ended April 2, 2016, associated with research and development expense of $6,638, in the period. The Company recorded grant income of $49,000 in the six month period ended April 4, 2015, associated with research and development expense of $144,000, in the same period. In 2015 the Company was awarded a grant of approximately $625,000 by the U.K. Regional Growth Fund, a U.K. government body. The grant is to develop an innovative range of low voltage motor controls which are designed to serve the emerging needs for on-road, automotive electrification. The grant includes a commitment to create or safeguard a total of twenty jobs at the Company’s U.K. facility over the period of the project. The Company recorded grant income from this project of $94,000 in the six month period ended April 2, 2016 associated with research and development expense of $302,000, in the period. The Company did not record any expense or grant income in respect of this project in the six month period ended April 4, 2015. The grant income in the first six months of 2016 and 2015 was recorded as a reduction of research and development expense. |
Employee benefit plans
Employee benefit plans | 6 Months Ended |
Apr. 02, 2016 | |
Employee benefit plans [Abstract] | |
Employee benefit plans | (9) Employee benefit plans Sevcon, Inc. has defined contribution plans covering the majority of its U.S. and U.K. employees in the controls business. There is also a small defined contribution plan covering senior managers in the capacitor business. The Company’s French subsidiary, Sevcon S.A.S., has a liability to pay its employees a service and salary based award when they reach retirement age and leave the Company’s employment. This liability, which is unfunded, is recognized in accrued expenses and was $166,000 and $148,000 at April 2, 2016 and April 4, 2015, respectively. The obligation to pay this award is a French legal requirement and is only payable if the employee is employed by the Company when they retire; if they leave the Company prior to that time the award is no longer payable. The Company’s Italian subsidiary, Bassi S.r.l., has a liability to pay its employees a severance indemnity, ‘Trattamento di fine Rapporto’ (“TFR”) when they leave the Company’s employment. TFR, which is mandatory for Italian companies, is deferred compensation and is based on the employees’ years of service and the compensation earned by the employee during the service period. TFR is considered a “Defined Benefit Plan” and the related liability is recognized in the consolidated balance sheet within “Liability for pension benefits”. This liability, which is unfunded, was $1,262,000 at April 2, 2016. The Company has frozen the U.K. and U.S. defined benefit plans for which no future benefits are being earned by employees. The Company uses a September 30 measurement date for its defined benefit pension plans. (in thousands of dollars) Three Months ended Six Months ended April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Interest cost $ 285 $ 304 $ 581 $ 620 Service cost 33 - 33 - Expected return on plan assets (276 ) (313 ) (565 ) (626 ) Amortization of net loss 73 68 150 132 Net periodic benefit cost 115 59 199 126 Net cost of defined contribution plans $ 128 $ 125 $ 283 $ 272 Net cost of all employee benefit plans $ 243 $ 184 $ 482 $ 398 The following table sets forth the movement in the liability for pension benefits in the six month periods ended April 2, 2016 and April 4, 2015, respectively: (in thousands of dollars) Six Months ended April 2, 2016 April 4, 2015 Liability for pension benefits at beginning of period 10,963 9,529 Liability assumed on acquisition of subsidiary 1,167 - Interest cost 581 620 Service cost 33 - Expected return on plan assets (565 ) (626 ) Plan contributions (319 ) (332 ) Effect of exchange rate changes (432 ) (785 ) Balance at end of period 11,428 8,406 Amounts recognized in the balance sheet consist of: (in thousands of dollars) April 2, 2016 April 4, 2015 Non-current liabilities $ 11,428 $ 8,406 Amounts recognized in accumulated other comprehensive loss consist of: (in thousands of dollars) Three Months ended Six Months ended April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Actuarial loss, net of $17 and $35 tax benefit for the three and six month periods, respectively, (2015: net of $17 and $31 tax benefit for the three and six month periods, respectively) $ 55 $ 51 $ 114 $ 101 Sevcon, Inc. contributed $100,000 to its frozen U.S. defined benefit plan in the six months ended April 2, 2016; it presently anticipates contributing a further $100,000 to fund its U.S. plan in the remainder of fiscal 2016. In addition, employer contributions to the frozen U.K. defined benefit plan were $219,000 in the first six months and are estimated to total $435,000 in 2016. The table below presents information about the Company’s pension plan assets measured and recorded at fair value as of April 2, 2016 and indicates the fair value hierarchy of the inputs utilized by the Company to determine the fair values. (in thousands of dollars) April 2, 2016 Level 1* (Quoted prices in active markets) Level 2** (Significant observable inputs) Level 3*** (Unobservable inputs) Adept Strategy 9 Fund (a sub-fund of Adept Investment Management plc) - 12,845 - Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds (funds managed by Schroder Investment Management Limited) - 4,993 - U.S. Mutual Funds and Fixed Income Funds 2,706 - - U.S. Equity Funds 380 - - Other Types of Investments Cash 778 - - Total 3,864 17,838 - (in thousands of dollars) September 30, 2015 Level 1* (Quoted prices in active markets) Level 2** (Significant observable inputs) Level 3*** (Unobservable inputs) Adept Strategy 9 Fund (a sub-fund of Adept Investment Management plc) - 13,044 - Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds (funds managed by Schroder Investment Management Limited) - 3,845 - U.S. Mutual Funds and Fixed Income Funds 2,557 - - U.S. Equity Funds 350 - - Other Types of Investments Cash 331 - - Total 3,238 16,889 - * Level 1 investments represent mutual funds for which a quoted market price is available on an active market. These investments primarily hold stocks or bonds, or a combination of stocks and bonds. ** Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The Company’s pension plan financial assets held in the Adept Strategy 9 Fund and the Schroder investments are Level 2 assets. The Company uses the Net Asset Value to determine the fair value of underlying investments which (a) do not have readily determinable fair value; and (b) prepare their financial statements consistent with the measurement principles of an investment company. The Funds are not exchange traded. The Funds are not subject to any redemption notice periods or restrictions and can be redeemed on a daily basis. No gates or holdbacks or dealing suspensions are being applied to the Funds. The Funds are of perpetual duration. *** The Company currently does not have any Level 3 pension plan financial assets. The following estimated benefit payments have been, or are expected, to be paid: (in thousands of dollars) 2016 $ 435 2017 514 2018 532 2019 540 2020 550 2021 – 2025 $ 2,958 |
Inventories
Inventories | 6 Months Ended |
Apr. 02, 2016 | |
Inventories [Abstract] | |
Inventories | (10) Inventories Inventories, net of reserve, were comprised of: (in thousands of dollars) April 2, 2016 September 30, 2015 Raw materials $ 6,436 $ 2,453 Work-in-process 288 90 Finished goods 6,532 4,247 $ 13,256 $ 6,790 |
Fair value of financial instrum
Fair value of financial instruments | 6 Months Ended |
Apr. 02, 2016 | |
Fair value of financial instruments [Abstract] | |
Fair value of financial instruments | (11) Fair value of financial instruments The Company's financial instruments consist mainly of cash and cash equivalents, short-term investments, accounts receivable and accounts payable. The carrying amount of these financial instruments as of April 2, 2016 approximates fair value due to the short-term nature of these instruments. The fair value of the Company’s long-term bank debt at April 2, 2016 approximated $15,947,000 (the gross carrying value on the consolidated balance sheet at April 2, 2016) based on recent financial market pricing. The current portion of long-term debt represented a Level 2 liability in accordance with the fair value hierarchy described in Note 9. |
Accrued expenses
Accrued expenses | 6 Months Ended |
Apr. 02, 2016 | |
Accrued expenses [Abstract] | |
Accrued expenses | (12) Accrued expenses Set out below is an analysis of other accrued expenses at April 2, 2016 and September 30, 2015, which shows separately any items in excess of 5% of total current liabilities: (in thousands of dollars) April 2, 2016 September 30, 2015 Accrued compensation and related costs $ 1,841 $ 827 Other accrued expenses 1,915 1,146 $ 3,756 $ 1,973 |
Warranty reserves
Warranty reserves | 6 Months Ended |
Apr. 02, 2016 | |
Warranty reserves [Abstract] | |
Warranty reserves | (13) Warranty reserves The movement in warranty reserves was as follows: (in thousands of dollars) Three Months ended Six Months ended April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Warranty reserves at beginning of period $ 213 $ 151 $ 278 $ 153 Liability assumed on acquisition of subsidiary 34 - 34 - Decrease in beginning balance for warranty obligations settled during the period (5 ) - (72 ) - Foreign currency translation adjustment 7 (7 ) 4 (12 ) Net increase in warranty reserves for products sold during the period - 5 3 Warranty reserves at end of period $ 249 $ 144 $ 249 $ 144 |
Debt
Debt | 6 Months Ended |
Apr. 02, 2016 | |
Debt [Abstract] | |
Debt | (14) Debt In July 2015, the Company’s U.K. bank renewed the overdraft facilities of the Company’s U.K. controls and capacitor subsidiaries. The Company’s U.K. controls and capacitor subsidiaries each have multi-currency overdraft facilities which together total $1,295,000 and which are secured against real estate owned by those companies. The renewal of the facilities is for a twelve month period although they can be withdrawn on demand by the bank. The facilities were unused at April 2, 2016 and at September 30, 2015. The Company entered into a €14,000,000 ($15,947,000 at April 2, 2016) credit facility with Banca Monte dei Paschi di Siena S.p.A. (“MPS Bank”) on January 27, 2016. The loan and security agreement will expire on January 27, 2021 when all outstanding principal and unpaid interest will be due and payable in full. The facility may be paid before maturity in whole or in part at the option of the Company, on or after the six-month anniversary of the funding date, without penalty or premium. Interest on the loan is payable quarterly at a margin of 3% over EuroLIBOR, with a minimum EuroLIBOR rate of 0.0%. Under the facility, the Company must maintain, on an annual basis, a net debt to EBITDA ratio of no more than 3.5:1 for fiscal years 2016 and 2017 and a net debt to EBITDA ratio of no more than 3.0:1 thereafter. Upon entering into the credit facility, the Company drew down €14,000,000 ($15,947,000), which was the total amount outstanding at April 2, 2016. This amount is shown in the accompanying consolidated balance sheet under long-term debt. The carrying value of the debt approximated to fair value based on current interest rates. Annual principal payments on long term bank debt, net of debt issuance costs, and converted to U.S. dollars at the April 2, 2016 exchange rate of $0.878 Euros per U.S. dollar, are as follows (in thousands of dollars): 2018 $ 1,196 2019 1,595 2020 1,595 2021 11,561 15,947 Less: Debt issuance costs (249 ) Total $ 15,698 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Apr. 02, 2016 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | (15) Commitments and Contingencies Sevcon, Inc. is involved in various legal proceedings in the ordinary course of business but believes that it is remote that the outcome will be material to operations. The Company maintains a directors' retirement plan which provides for certain retirement benefits to non-employee directors. Effective January 1997 the plan was frozen and no further benefits are being accrued. While the cost of the plan has been fully charged to expense, the plan is not separately funded. The estimated maximum liability which has been recorded based on the cost of buying deferred annuities at April 2, 2016 and September 30, 2015 was $147,000 and $153,000, respectively. Minimum rental commitments under all non-cancelable leases are as follows for the years ended September 30, 2016 - $621,000; 2017 - $597,000; 2018 - $551,000; 2019 - $506,000; 2020 - $506,000 and $2,406,000 thereafter. The U.K. subsidiaries of the Company have given to a bank a security interest in certain leasehold and freehold property assets as security for overdraft facilities of $1,295,000. There were no amounts outstanding on the overdraft facilities at April 2, 2016 and at September 30, 2015. |
Changes in Other Comprehensive
Changes in Other Comprehensive Loss | 6 Months Ended |
Apr. 02, 2016 | |
Changes in Other Comprehensive Loss [Abstract] | |
Changes in Other Comprehensive Loss | (16) Changes in Other Comprehensive Loss The following table illustrates changes in the balances of each component of accumulated other comprehensive loss in 2016 and 2015: (in thousands of dollars) Foreign Currency Items Defined Benefit Pension Plans Accumulated Other Comprehensive Loss Balance September 30, 2014 (956 ) (7,873 ) (8,829 ) Other comprehensive loss for the period (318 ) (1,857 ) (2,175 ) Balance September 30, 2015 (1,274 ) (9,730 ) (11,004 ) Other comprehensive income (loss) for the period (89 ) 114 25 Balance April 2, 2016 (1,363 ) (9,616 ) (10,979 ) |
Related Parties
Related Parties | 6 Months Ended |
Apr. 02, 2016 | |
Related Parties [Abstract] | |
Related Parties | (17) Related Parties Bassi Holding (see Note 3) is considered a related party as a stockholder of the Company. As of April 2, 2016 there was a balance of $2,545,000 payable by the Company to Bassi Holding included in Debt to related parties. This debt relates to dividends payable to Bassi Holding as a result of the acquisition on January 29, 2016. During the three and six month periods ended April 2, 2016 the Company also paid rent to Bassi Holding in the amounts of $54,000. No rent was paid in the three and six month periods ended April 4, 2015. |
Subsequent events
Subsequent events | 6 Months Ended |
Apr. 02, 2016 | |
Subsequent events [Abstract] | |
Subsequent events | (18) Subsequent events In preparing these interim consolidated financial statements, the Company has evaluated, for potential recognition or disclosure, events or transactions subsequent to the end of the most recent quarterly period, the issuance date of these financial statements. No material subsequent events were identified that require recognition or disclosure in these financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Apr. 02, 2016 | |
Acquisitions [Abstract] | |
Summary of allocation of fair value | The fair value of the total consideration has been allocated based on the estimated fair values of assets acquired and liabilities assumed as follows (in thousands) (in thousands of dollars) January 29, 2016 Consideration Cash $ 10,832 Common stock (500,000 shares of Sevcon, Inc.) 4,760 Fair value of pre-acquisition dividends payable to Bassi Holding 3,503 Fair value of total consideration $ 19,095 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash $ 1,577 Accounts receivable 3,318 Inventory 4,183 Property and equipment 923 Other assets 715 Accounts payable (3,513 ) Accrued and other current liabilities (2,020 ) Other long-term liabilities $ (3,307 ) $ 1,876 Estimated fair value of identifiable intangible assets acquired: Developed technologies 325 Customer relationships 8,774 Trade name 758 Order backlog 325 10,182 Fair value of total consideration, excluding goodwill 12,058 Goodwill 7,037 Fair value of total consideration $ 19,095 |
Components of intangible assets acquired, net of deferred tax | The following table sets forth the components of intangible assets acquired in connection with the Bassi acquisition (dollars in thousands): Amount Assigned Amortization Period (in years) Definite-lived intangible assets: Developed technologies $ 325 10.0 Customer relationships 8,774 15.0 Trade name 758 10.0 Order backlog 325 1.0 Total intangible assets acquired $ 10,182 |
Pro forma financial information | The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place on October 1, 2014. (in thousands of dollars) Six months ended April 2, 2016 Six months ended April 4, 2015 Revenue $ 27,975 $ 28,647 Net income (loss) $ (123 ) $ 636 |
Stock-based compensation plans
Stock-based compensation plans (Tables) | 6 Months Ended |
Apr. 02, 2016 | |
Stock-based compensation plans [Abstract] | |
Schedule of weighted average fair value assumptions of stock options | The weighted average input assumptions used and resulting fair values of stock options were as follows for fiscal 2016: Expected life (in years) 4.0 Risk-free interest rate 1.55% Volatility 61.43% Dividend yield 0.00% Weighted-average fair value per share $4.81 |
Summary of option activity under employee share option plan | A summary of option activity under the employee share option plan as of April 2, 2016, and changes during the quarter then ended is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of September 30, 2015 - $ - - $ - Granted 38,460 $ 9.94 5.00 $ 11,153 Exercised - - - - Forfeited or Expired - - - - Outstanding at April 2, 2016 38,460 $ 9.94 4.71 $ 8,077 Exercisable - - - - Vested and expected to vest 34,385 $ 9.94 4.71 $ 7,221 |
Summary of restricted stock activity | A summary of restricted stock and stock option activity, including both performance based awards and time-based awards, for the six months ended April 2, 2016 is as follows: Number of shares of Restricted Stock Weighted Average Grant-Date Fair Value Non-vested balance as of September 30, 2014 168,600 $ 5.27 Granted 92,600 $ 7.49 Vested (64,600 ) $ 6.32 Non-vested balance as of September 30, 2015 196,600 $ 5.97 Granted 41,240 $ 9.89 Cancelled (3,300 ) $ 9.82 Vested (91,600 ) $ 6.72 Non-vested balance as of April 2, 2016 142,940 $ 6.53 Number of shares of Stock Options Weighted Average Grant-Date Fair Value Non-vested balance as of September 30, 2015 - $ - Granted 38,460 $ 4.81 Vested - $ - Non-vested balance as of April 2, 2016 38,460 $ 4.81 |
Calculation of earnings per s27
Calculation of earnings per share and weighted average shares outstanding (Tables) | 6 Months Ended |
Apr. 02, 2016 | |
Calculation of earnings per share and weighted average shares outstanding [Abstract] | |
Basic and fully diluted earnings per share | Basic and diluted net income per common share for the three and six month periods ended April 2, 2016 and April 4, 2015 were calculated as follows: (in thousands of dollars except per share data) Three months ended Six months ended April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Numerator: Net income (loss) attributable to common stockholders for computing net income (loss) per ordinary share - basic $ (1,694 ) $ 539 $ (1,683 ) $ 710 Dividend eliminated upon assumed conversion of convertible preferred stock - 114 - 225 Net income (loss) attributable to common stockholders for computing net income (loss) per ordinary share - diluted $ (1,694 ) $ 653 $ (1,683 ) $ 935 Denominator: Weighted average shares used in calculating net income (loss) per ordinary share - basic 3,911 3,466 3,709 3,446 Adjustment for assumed conversion of convertible preferred stock - 1,382 - 1,382 Adjustment for shares issuable upon vesting of restricted stock - 64 - 75 Weighted average shares used in calculating net income (loss) per ordinary share - diluted 3,911 4,912 3,709 4,903 Net income (loss) per ordinary share - basic $ (0.43 ) $ 0.16 $ (0.45 ) $ 0.21 Net income (loss) per ordinary share - diluted $ (0.43 ) $ 0.14 $ (0.45 ) $ 0.19 No. of shares of convertible preferred stock that are anti-dilutive excluded from calculation of common stock equivalents 1,418 - 1,438 - |
Segment information (Tables)
Segment information (Tables) | 6 Months Ended |
Apr. 02, 2016 | |
Segment information [Abstract] | |
Information concerning operations of business segments | The Company does not allocate income taxes, interest income and expense or foreign currency translation gains and losses to segments. Information concerning operations of these businesses is as follows: (in thousands of dollars) Three months ended April 2, 2016 Controls Capacitors Chargers Corporate Total Sales to external customers 8,799 402 3,980 - 13,181 Inter segment revenues - - - - - Operating income (loss) (612 ) (13 ) 266 (1,312 ) (1,671 ) Identifiable assets, excluding goodwill 39,407 891 9,264 4,065 53,627 Goodwill 1,435 - 7,400 - 8,835 Three months ended April 4, 2015 Controls Capacitors Chargers Corporate Total Sales to external customers 9,761 579 - - 10,340 Inter-segment revenues - 1 - - 1 Operating income 374 80 - 220 674 Identifiable assets, excluding goodwill 21,977 1,148 - 7,178 30,303 Goodwill 1,435 - - - 1,435 Six months ended April 2, 2016 Controls Capacitors Chargers Corporate Total Sales to external customers 17,506 810 3,980 - 22,296 Inter-segment revenues - - - - - Operating income (loss) 63 (56 ) 266 (1,764 ) (1,491 ) Identifiable assets, excluding goodwill 39,407 891 9,264 4,065 53,627 Goodwill 1,435 - 7,400 - 8,835 Six months ended April 4, 2015 Controls Capacitors Chargers Corporate Total Sales to external customers 19,180 1,093 - - 20,273 Inter-segment revenues - 3 - - 3 Operating income 722 116 - 118 956 Identifiable assets, excluding goodwill 21,977 1,148 - 7,178 30,303 Goodwill 1,435 - - - 1,435 |
Revenues of electronic controls segment by products and services | In the electronic controls segment, revenues derive from the following products and services: (in thousands of dollars) Three Months ended Six Months ended April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Electronic controls for zero emission and hybrid electric vehicles $ 5,789 $ 6,237 $ 12,239 $ 12,301 Accessory and aftermarket products and services 3,010 3,524 5,267 6,879 Total controls segment revenues $ 8,799 $ 9,761 $ 17,506 $ 19,180 |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 6 Months Ended |
Apr. 02, 2016 | |
Employee benefit plans [Abstract] | |
Components of the net pension cost | The Company uses a September 30 measurement date for its defined benefit pension plans. (in thousands of dollars) Three Months ended Six Months ended April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Interest cost $ 285 $ 304 $ 581 $ 620 Service cost 33 - 33 - Expected return on plan assets (276 ) (313 ) (565 ) (626 ) Amortization of net loss 73 68 150 132 Net periodic benefit cost 115 59 199 126 Net cost of defined contribution plans $ 128 $ 125 $ 283 $ 272 Net cost of all employee benefit plans $ 243 $ 184 $ 482 $ 398 |
Movement in liability for pension benefits | The following table sets forth the movement in the liability for pension benefits in the six month periods ended April 2, 2016 and April 4, 2015, respectively: (in thousands of dollars) Six Months ended April 2, 2016 April 4, 2015 Liability for pension benefits at beginning of period 10,963 9,529 Liability assumed on acquisition of subsidiary 1,167 - Interest cost 581 620 Service cost 33 - Expected return on plan assets (565 ) (626 ) Plan contributions (319 ) (332 ) Effect of exchange rate changes (432 ) (785 ) Balance at end of period 11,428 8,406 |
Amounts recognized in balance sheet | Amounts recognized in the balance sheet consist of: (in thousands of dollars) April 2, 2016 April 4, 2015 Non-current liabilities $ 11,428 $ 8,406 |
Amounts recognized in accumulated other comprehensive income | Amounts recognized in accumulated other comprehensive loss consist of: (in thousands of dollars) Three Months ended Six Months ended April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Actuarial loss, net of $17 and $35 tax benefit for the three and six month periods, respectively, (2015: net of $17 and $31 tax benefit for the three and six month periods, respectively) $ 55 $ 51 $ 114 $ 101 |
Pension plan assets measured and recorded at fair value | The table below presents information about the Company’s pension plan assets measured and recorded at fair value as of April 2, 2016 and indicates the fair value hierarchy of the inputs utilized by the Company to determine the fair values. (in thousands of dollars) April 2, 2016 Level 1* (Quoted prices in active markets) Level 2** (Significant observable inputs) Level 3*** (Unobservable inputs) Adept Strategy 9 Fund (a sub-fund of Adept Investment Management plc) - 12,845 - Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds (funds managed by Schroder Investment Management Limited) - 4,993 - U.S. Mutual Funds and Fixed Income Funds 2,706 - - U.S. Equity Funds 380 - - Other Types of Investments Cash 778 - - Total 3,864 17,838 - (in thousands of dollars) September 30, 2015 Level 1* (Quoted prices in active markets) Level 2** (Significant observable inputs) Level 3*** (Unobservable inputs) Adept Strategy 9 Fund (a sub-fund of Adept Investment Management plc) - 13,044 - Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds (funds managed by Schroder Investment Management Limited) - 3,845 - U.S. Mutual Funds and Fixed Income Funds 2,557 - - U.S. Equity Funds 350 - - Other Types of Investments Cash 331 - - Total 3,238 16,889 - * Level 1 investments represent mutual funds for which a quoted market price is available on an active market. These investments primarily hold stocks or bonds, or a combination of stocks and bonds. ** Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The Company’s pension plan financial assets held in the Adept Strategy 9 Fund and the Schroder investments are Level 2 assets. The Company uses the Net Asset Value to determine the fair value of underlying investments which (a) do not have readily determinable fair value; and (b) prepare their financial statements consistent with the measurement principles of an investment company. The Funds are not exchange traded. The Funds are not subject to any redemption notice periods or restrictions and can be redeemed on a daily basis. No gates or holdbacks or dealing suspensions are being applied to the Funds. The Funds are of perpetual duration. *** The Company currently does not have any Level 3 pension plan financial assets. |
Estimated future benefit payments | The following estimated benefit payments have been, or are expected, to be paid: (in thousands of dollars) 2016 $ 435 2017 514 2018 532 2019 540 2020 550 2021 – 2025 $ 2,958 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Apr. 02, 2016 | |
Inventories [Abstract] | |
Inventories | Inventories, net of reserve, were comprised of: (in thousands of dollars) April 2, 2016 September 30, 2015 Raw materials $ 6,436 $ 2,453 Work-in-process 288 90 Finished goods 6,532 4,247 $ 13,256 $ 6,790 |
Accrued expenses (Tables)
Accrued expenses (Tables) | 6 Months Ended |
Apr. 02, 2016 | |
Accrued expenses [Abstract] | |
Analysis of other accrued expenses | Set out below is an analysis of other accrued expenses at April 2, 2016 and September 30, 2015, which shows separately any items in excess of 5% of total current liabilities: (in thousands of dollars) April 2, 2016 September 30, 2015 Accrued compensation and related costs $ 1,841 $ 827 Other accrued expenses 1,915 1,146 $ 3,756 $ 1,973 |
Warranty reserves (Tables)
Warranty reserves (Tables) | 6 Months Ended |
Apr. 02, 2016 | |
Warranty reserves [Abstract] | |
Movement in warranty reserves | The movement in warranty reserves was as follows: (in thousands of dollars) Three Months ended Six Months ended April 2, 2016 April 4, 2015 April 2, 2016 April 4, 2015 Warranty reserves at beginning of period $ 213 $ 151 $ 278 $ 153 Liability assumed on acquisition of subsidiary 34 - 34 - Decrease in beginning balance for warranty obligations settled during the period (5 ) - (72 ) - Foreign currency translation adjustment 7 (7 ) 4 (12 ) Net increase in warranty reserves for products sold during the period - 5 3 Warranty reserves at end of period $ 249 $ 144 $ 249 $ 144 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Apr. 02, 2016 | |
Debt [Abstract] | |
Annual principal payments on long term debt | Annual principal payments on long term bank debt, net of debt issuance costs, and converted to U.S. dollars at the April 2, 2016 exchange rate of $0.878 Euros per U.S. dollar, are as follows (in thousands of dollars): 2018 $ 1,196 2019 1,595 2020 1,595 2021 11,561 15,947 Less: Debt issuance costs (249 ) Total $ 15,698 |
Changes in Other Comprehensiv34
Changes in Other Comprehensive Loss (Tables) | 6 Months Ended |
Apr. 02, 2016 | |
Changes in Other Comprehensive Loss [Abstract] | |
Component of accumulated other comprehensive loss | The following table illustrates changes in the balances of each component of accumulated other comprehensive loss in 2016 and 2015: (in thousands of dollars) Foreign Currency Items Defined Benefit Pension Plans Accumulated Other Comprehensive Loss Balance September 30, 2014 (956 ) (7,873 ) (8,829 ) Other comprehensive loss for the period (318 ) (1,857 ) (2,175 ) Balance September 30, 2015 (1,274 ) (9,730 ) (11,004 ) Other comprehensive income (loss) for the period (89 ) 114 25 Balance April 2, 2016 (1,363 ) (9,616 ) (10,979 ) |
Basis of presentation (Details)
Basis of presentation (Details) | 6 Months Ended |
Apr. 02, 2016 | |
Basis of presentation [Abstract] | |
Equity interest ownership | 50.00% |
Joint venture ownership | 50.00% |
Third party's equity interest ownership | 50.00% |
Acquisitions (Details)
Acquisitions (Details) $ / shares in Units, € in Thousands | Jan. 29, 2016USD ($)$ / sharesshares | Jan. 29, 2016EUR (€)shares | Apr. 02, 2016USD ($) | Apr. 04, 2015USD ($) | Apr. 02, 2016USD ($) | Apr. 04, 2015USD ($) | Sep. 30, 2015USD ($) |
Summary of allocation of fair value [Abstract] | |||||||
Cash | $ 10,832,000 | $ 0 | |||||
Common stock (500,000 shares of Sevcon, Inc.) | 4,760,000 | 0 | |||||
Assets acquired and liabilities assumed Net [Abstract] | |||||||
Goodwill | $ 8,835,000 | $ 1,435,000 | 8,835,000 | 1,435,000 | $ 1,435,000 | ||
Net sales | 13,181,000 | 10,340,000 | 22,296,000 | 20,273,000 | |||
Net income | (1,580,000) | 641,000 | (1,496,000) | 906,000 | |||
Acquisition costs | $ 1,101,000 | $ 0 | 1,417,000 | 0 | |||
Bassi S.r.l. Unipersonale [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Shares issued for acquisition (in shares) | shares | 500,000 | 500,000 | |||||
Value of stock issued for acquisition | $ 4,800,000 | ||||||
Stock price (in dollars per share) | $ / shares | $ 9.52 | ||||||
Payment of assumed liability | $ 3,500,000 | € 3,230 | |||||
Term of liability for acquisition | 3 years | 3 years | |||||
Summary of allocation of fair value [Abstract] | |||||||
Cash | $ 10,832,000 | € 10,000 | |||||
Common stock (500,000 shares of Sevcon, Inc.) | 4,760,000 | ||||||
Fair value of pre-acquisition dividends payable to Bassi Holding | 3,503,000 | ||||||
Fair value of total consideration | 19,095,000 | ||||||
Assets acquired and liabilities assumed Net [Abstract] | |||||||
Cash | 1,577,000 | ||||||
Accounts receivable | 3,318,000 | ||||||
Inventory | 4,183,000 | ||||||
Property and equipment | 923,000 | ||||||
Other assets | 715,000 | ||||||
Accounts payable | (3,513,000) | ||||||
Accrued and other current liabilities | (2,020,000) | ||||||
Other long-term liabilities | (3,307,000) | ||||||
Assets acquired and liabilities assumed Net | 1,876,000 | ||||||
Intangible assets | 10,182,000 | ||||||
Fair value of total consideration, exlcuding goodwill | 12,058,000 | ||||||
Goodwill | 7,037,000 | ||||||
Fair value of total consideration | 19,095,000 | ||||||
Gross amount of contracts | 3,428,000 | ||||||
Amount expected to be uncollectible | 110,000 | ||||||
Total intangible assets acquired | 10,182,000 | ||||||
Net sales | 4,000,000 | ||||||
Net income | 300,000 | ||||||
Acquisition costs | 1,417,000 | ||||||
Non-recurring expense relating to the fair value adjustments | 97,000 | ||||||
Pro forma information [Abstract] | |||||||
Revenue | 27,975,000 | 28,647,000 | |||||
Net income (loss) | $ (123,000) | $ 636,000 | |||||
Bassi S.r.l. Unipersonale [Member] | Developed Technologies [Member] | |||||||
Assets acquired and liabilities assumed Net [Abstract] | |||||||
Intangible assets | 325,000 | ||||||
Total intangible assets acquired | $ 325,000 | ||||||
Amortization period | 10 years | 10 years | |||||
Bassi S.r.l. Unipersonale [Member] | Customer Relationships [Member] | |||||||
Assets acquired and liabilities assumed Net [Abstract] | |||||||
Intangible assets | $ 8,774,000 | ||||||
Total intangible assets acquired | $ 8,774,000 | ||||||
Amortization period | 15 years | 15 years | |||||
Bassi S.r.l. Unipersonale [Member] | Trade Names [Member] | |||||||
Assets acquired and liabilities assumed Net [Abstract] | |||||||
Intangible assets | $ 758,000 | ||||||
Total intangible assets acquired | $ 758,000 | ||||||
Amortization period | 10 years | 10 years | |||||
Bassi S.r.l. Unipersonale [Member] | Order Backlog [Member] | |||||||
Assets acquired and liabilities assumed Net [Abstract] | |||||||
Intangible assets | $ 325,000 | ||||||
Total intangible assets acquired | $ 325,000 | ||||||
Amortization period | 1 year | 1 year |
Stock-based compensation plan37
Stock-based compensation plans (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015USD ($)Employee$ / sharesshares | Apr. 02, 2016USD ($)$ / sharesshares | Apr. 04, 2015USD ($) | Apr. 02, 2016USD ($)Employee$ / sharesshares | Apr. 04, 2015USD ($)Employee$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | |
Weighted Average Grant-Date Fair Value [Abstract] | ||||||
Stock based compensation expense | $ | $ 206,000 | $ 146,000 | $ 358,000 | $ 259,000 | ||
Unrecognized compensation expense | $ | $ 843,000 | $ 843,000 | ||||
Weighted average period for unrecognized compensation expense to be recognized | 1 year 10 months 24 days | |||||
Stock Options [Member] | ||||||
Fair Value of Stock Options using Black-Scholes-Merton Option-Pricing Model [Abstract] | ||||||
Expected life | 4 years | |||||
Risk-free interest rate | 1.55% | |||||
Volatility | 61.43% | |||||
Dividend yield | 0.00% | |||||
Weighted-average fair value per share (in dollars per share) | $ / shares | $ 4.81 | |||||
Outstanding Shares [Abstract] | ||||||
Outstanding shares, beginning balance (in shares) | 0 | |||||
Outstanding shares, granted (in shares) | 38,460 | |||||
Outstanding shares, exercised (in shares) | 0 | |||||
Outstanding shares, forfeited or expired (in shares) | 0 | |||||
Outstanding shares, ending balance (in shares) | 38,460 | 38,460 | 0 | |||
Outstanding shares, exercisable (in shares) | 0 | 0 | ||||
Outstanding shares, vested and expected to vest (in shares) | 34,385 | 34,385 | ||||
Weighted Average Exercise Price [Abstract] | ||||||
Weighted average exercise price, beginning balance (in dollars per share) | $ / shares | $ 0 | |||||
Weighted average exercise price, granted (in dollars per share) | $ / shares | 9.94 | |||||
Weighted average exercise price, exercised (in dollars per share) | $ / shares | 0 | |||||
Weighted average exercise price, forfeited or expired (in dollars per share) | $ / shares | 0 | |||||
Weighted average exercise price, ending balance (in dollars per share) | $ / shares | $ 9.94 | 9.94 | $ 0 | |||
Weighted average exercise price, exercisable (in dollars per share) | $ / shares | 0 | 0 | ||||
Weighted average exercise price, vested and expected to vest (in dollars per share) | $ / shares | $ 9.94 | $ 9.94 | ||||
Weighted Average Remaining Contractual Term [Abstract] | ||||||
Weighted average remaining contractual term | 4 years 8 months 16 days | 0 years | ||||
Weighted average remaining contractual term, granted | 5 years | |||||
Weighted average remaining contractual term, exercised | 0 years | |||||
Weighted average remaining contractual term, forfeited or expired | 0 years | |||||
Weighted average remaining contractual term, exercisable | 0 years | |||||
Weighted average remaining contractual term, vested and expected to vest | 4 years 8 months 16 days | |||||
Aggregate Intrinsic Value [Abstract] | ||||||
Aggregate intrinsic value, beginning balance | $ | $ 0 | |||||
Aggregate intrinsic value, granted | $ | 11,153 | |||||
Aggregate intrinsic value, exercised | $ | 0 | |||||
Aggregate intrinsic value, forfeited or expired | $ | 0 | |||||
Aggregate intrinsic value, ending balance | $ | $ 8,077 | 8,077 | $ 0 | |||
Aggregate intrinsic value, exercisable | $ | 0 | 0 | ||||
Aggregate intrinsic value, vested and expected to vest | $ | $ 7,221 | $ 7,221 | ||||
Number of shares of Stock Options [Abstract] | ||||||
Non-vested balance, beginning of period (in shares) | 0 | |||||
Granted (in shares) | 38,460 | |||||
Vested (in shares) | 0 | |||||
Non-vested balance, end of period (in shares) | 38,460 | 38,460 | 0 | |||
Weighted Average Grant-Date Fair Value [Abstract] | ||||||
Non-vested balance, beginning of period (in dollars per share) | $ / shares | $ 0 | |||||
Granted (in dollars per share) | $ / shares | 4.81 | |||||
Vested (in dollars per share) | $ / shares | 0 | |||||
Non-vested balance, ending of period (in dollars per share) | $ / shares | $ 4.81 | $ 4.81 | $ 0 | |||
Restricted Stock [Member] | ||||||
Number of shares of Restricted Stock [Roll Forward] | ||||||
Non-vested balance, beginning of period (in shares) | 196,600 | 168,600 | 168,600 | |||
Granted (in shares) | 41,240 | 0 | 92,600 | |||
Cancelled (in shares) | (3,300) | |||||
Vested (in shares) | (91,600) | (64,600) | ||||
Non-vested balance, end of period (in shares) | 142,940 | 142,940 | 196,600 | |||
Weighted Average Grant-Date Fair Value [Roll Forward] | ||||||
Non-vested balance, beginning of period (in dollars per share) | $ / shares | $ 5.97 | $ 5.27 | $ 5.27 | |||
Granted (in dollars per share) | $ / shares | 9.89 | 7.49 | ||||
Cancelled (in dollars per share) | $ / shares | 9.82 | |||||
Vested (in dollars per share) | $ / shares | 6.72 | 6.32 | ||||
Non-vested balance, ending of period (in dollars per share) | $ / shares | $ 6.53 | $ 6.53 | $ 5.97 | |||
Restricted Stock [Member] | Nine Non-Employees [Member] | ||||||
Number of shares of Restricted Stock [Roll Forward] | ||||||
Granted (in shares) | 29,700 | 30,600 | ||||
Weighted Average Grant-Date Fair Value [Abstract] | ||||||
Number of employees directors with restricted stock grant | Employee | 9 | 9 | ||||
Estimated fair value of stock at date of grant | $ | $ 292,000 | $ 225,000 | ||||
Period for recognition of unearned compensation | 12 months | 12 months | ||||
Charge to income for restricted stock | $ | $ 94,000 | $ 131,000 | ||||
Quarterly charge to income for restricted stock | $ | $ 65,000 | |||||
Restricted Stock [Member] | Four Employees [Member] | ||||||
Number of shares of Restricted Stock [Roll Forward] | ||||||
Granted (in shares) | 11,540 | |||||
Weighted Average Grant-Date Fair Value [Abstract] | ||||||
Number of employees directors with restricted stock grant | Employee | 4 | |||||
Estimated fair value of stock at date of grant | $ | $ 116,000 | |||||
Period for recognition of unearned compensation | 3 years | |||||
Quarterly charge to income for restricted stock | $ | $ 10,000 | |||||
Performance Shares [Member] | Nine Non-Employees [Member] | ||||||
Weighted Average Grant-Date Fair Value [Abstract] | ||||||
Number of employees directors with restricted stock grant | Employee | 9 | |||||
Exercise price (in dollars per share) | $ / shares | $ 9.94 | |||||
Estimated fair value of stock at date of grant | $ | $ 185,000 | |||||
Period for recognition of unearned compensation | 3 years | |||||
Quarterly charge to income for restricted stock | $ | $ 15,000 | |||||
1996 Equity Incentive Plan [Member] | ||||||
Weighted Average Grant-Date Fair Value [Abstract] | ||||||
Shares reserved and available for grant (in shares) | 336,990 | 336,990 | 139,578 |
Cash dividends (Details)
Cash dividends (Details) - USD ($) | 6 Months Ended | ||
Apr. 02, 2016 | Apr. 15, 2016 | Sep. 30, 2015 | |
Preference share dividends [Abstract] | |||
Preferred stock, outstanding (in shares) | 451,699 | 452,124 | |
Series A Convertible Preferred Stock, stated value (in dollars per share) | $ 0.10 | $ 0.10 | |
Series A Convertible Preferred Stock [Member] | |||
Preference share dividends [Abstract] | |||
Preferred stock, issued (in shares) | 451,699 | ||
Preferred stock, outstanding (in shares) | 451,699 | ||
Series A Convertible Preferred Stock, stated value (in dollars per share) | $ 24 | ||
Percentage of cumulative annual dividend, Series A Convertible Preferred Stock | 4.00% | ||
Dividend payable | Apr. 15, 2015 | ||
Next semi-annual dividend payable | Oct. 15, 2015 | ||
Series A Convertible Preferred Stock [Member] | Subsequent Event [Member] | |||
Preference share dividends [Abstract] | |||
Semi annual dividend | $ 216,816 |
Calculation of earnings per s39
Calculation of earnings per share and weighted average shares outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2016 | Apr. 04, 2015 | Apr. 02, 2016 | Apr. 04, 2015 | |
Numerator: | ||||
Net income (loss) attributable to common stockholders for computing net income (loss) per ordinary share - basic (in shares) | $ (1,694) | $ 539 | $ (1,683) | $ 710 |
Dividend eliminated upon assumed conversion of convertible preferred stock | 0 | 114 | 0 | 225 |
Net income (loss) attributable to common stockholders for computing net income (loss) per ordinary share - diluted (in shares) | $ (1,694) | $ 653 | $ (1,683) | $ 935 |
Denominator: | ||||
Weighted average shares used in calculating net income (loss) per ordinary share - basic (in shares) | 3,911,000 | 3,466,000 | 3,709,000 | 3,446,000 |
Adjustment for assumed conversion of convertible preferred stock (in shares) | 0 | 1,382,000 | 0 | 1,382,000 |
Adjustment for shares issuable upon vesting of restricted stock (in shares) | 0 | 64,000 | 0 | 75,000 |
Weighted average shares used in calculating net income (loss) per ordinary share - diluted (in shares) | 3,911,000 | 4,912,000 | 3,709,000 | 4,903,000 |
Net income (loss) per ordinary share - basic (in dollars per share) | $ (0.43) | $ 0.16 | $ (0.45) | $ 0.21 |
Net income (loss) per ordinary share - diluted (in dollars per share) | $ (0.43) | $ 0.14 | $ (0.45) | $ 0.19 |
No. of shares of convertible preferred stock that are anti-dilutive excluded from calculation of common stock equivalents (in shares) | 1,418 | 0 | 1,438 | 0 |
Segment information (Details)
Segment information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Apr. 02, 2016USD ($) | Apr. 04, 2015USD ($) | Apr. 02, 2016USD ($)Segment | Apr. 04, 2015USD ($) | Sep. 30, 2015USD ($) | |
Segment information [Abstract] | |||||
Number of reportable segments | Segment | 3 | ||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||
Sales to external customers | $ 13,181 | $ 10,340 | $ 22,296 | $ 20,273 | |
Operating income (loss) | (1,671) | 674 | (1,491) | 956 | |
Identifiable assets, excluding goodwill | 53,627 | 30,303 | 53,627 | 30,303 | |
Goodwill | 8,835 | 1,435 | 8,835 | 1,435 | $ 1,435 |
Reportable Segments [Member] | Controls [Member] | |||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||
Sales to external customers | 8,799 | 9,761 | 17,506 | 19,180 | |
Operating income (loss) | (612) | 374 | 63 | 722 | |
Identifiable assets, excluding goodwill | 39,407 | 21,977 | 39,407 | 21,977 | |
Goodwill | 1,435 | 1,435 | 1,435 | 1,435 | |
Reportable Segments [Member] | Capacitors [Member] | |||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||
Sales to external customers | 402 | 579 | 810 | 1,093 | |
Operating income (loss) | (13) | 80 | (56) | 116 | |
Identifiable assets, excluding goodwill | 891 | 1,148 | 891 | 1,148 | |
Goodwill | 0 | 0 | 0 | 0 | |
Reportable Segments [Member] | Chargers [Member] | |||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||
Sales to external customers | 3,980 | 0 | 3,980 | 0 | |
Operating income (loss) | 266 | 0 | 266 | 0 | |
Identifiable assets, excluding goodwill | 9,264 | 0 | 9,264 | 0 | |
Goodwill | 7,400 | 0 | 7,400 | 0 | |
Intersegment Eliminations [Member] | |||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||
Sales to external customers | 0 | 1 | 0 | 3 | |
Intersegment Eliminations [Member] | Controls [Member] | |||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||
Sales to external customers | 0 | 0 | 0 | 0 | |
Intersegment Eliminations [Member] | Capacitors [Member] | |||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||
Sales to external customers | 0 | 1 | 0 | 3 | |
Intersegment Eliminations [Member] | Chargers [Member] | |||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||
Sales to external customers | 0 | 0 | 0 | 0 | |
Corporate [Member] | |||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||
Sales to external customers | 0 | 0 | 0 | 0 | |
Operating income (loss) | (1,312) | 220 | (1,764) | 118 | |
Identifiable assets, excluding goodwill | 4,065 | 7,178 | 4,065 | 7,178 | |
Goodwill | $ 0 | $ 0 | $ 0 | $ 0 |
Segment information, Revenues f
Segment information, Revenues from Electronic Controls Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2016 | Apr. 04, 2015 | Apr. 02, 2016 | Apr. 04, 2015 | |
Revenue from External Customer [Line Items] | ||||
Revenue from external customer | $ 13,181 | $ 10,340 | $ 22,296 | $ 20,273 |
Reportable Segments [Member] | Controls [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue from external customer | 8,799 | 9,761 | 17,506 | 19,180 |
Reportable Segments [Member] | Controls [Member] | Electronic Controls for Zero Emission and Hybrid Electric Vehicles [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue from external customer | 5,789 | 6,237 | 12,239 | 12,301 |
Reportable Segments [Member] | Controls [Member] | Accessory and Aftermarket Products and Services and Engineering Contracts [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue from external customer | $ 3,010 | $ 3,524 | $ 5,267 | $ 6,879 |
Research and development (Detai
Research and development (Details) - USD ($) | 6 Months Ended | |
Apr. 02, 2016 | Apr. 04, 2015 | |
Cummins Generator Technologies and Newcastle University [Member] | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Grant income recorded | $ 0 | $ 49,000 |
Research and development expense on projects | 6,638 | $ 144,000 |
U.K. Regional Growth Fund [Member] | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Grant income recorded | 94,000 | |
Research and development expense on projects | 302,000 | |
Total grants awarded | $ 625,000 |
Employee benefit plans (Details
Employee benefit plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Apr. 02, 2016 | Apr. 04, 2015 | Apr. 02, 2016 | Apr. 04, 2015 | Sep. 30, 2015 | ||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Unfunded liability | $ 166 | $ 148 | $ 166 | $ 148 | ||
Components of net pension cost [Abstract] | ||||||
Interest cost | 285 | 304 | 581 | 620 | ||
Service cost | 33 | 0 | 33 | 0 | ||
Expected return on plan assets | (276) | (313) | (565) | (626) | ||
Amortization of net loss | 73 | 68 | 150 | 132 | ||
Net periodic benefit cost | 115 | 59 | 199 | 126 | ||
Net cost of defined contribution plans | 128 | 125 | 283 | 272 | ||
Net cost of all employee benefit plans | 243 | 184 | 482 | 398 | ||
Movement in liability for pension benefits [Roll forward] | ||||||
Liability for pension benefits at beginning of period | 10,963 | 9,529 | ||||
Liability assumed on acquisition of subsidiary | 1,167 | 0 | ||||
Interest cost | 285 | 304 | 581 | 620 | ||
Service cost | 33 | 0 | 33 | 0 | ||
Expected return on plan assets | (276) | (313) | (565) | (626) | ||
Plan contributions | (319) | (332) | ||||
Effect of exchange rate changes | (432) | (785) | ||||
Balance at end of period | 11,428 | 8,406 | 11,428 | 8,406 | ||
Amounts recognized in balance sheet [Abstract] | ||||||
Non-current liabilities | 11,428 | 8,406 | 11,428 | 8,406 | $ 10,963 | |
Amounts recognized in accumulated other comprehensive loss [Abstract] | ||||||
Actuarial loss, net of $17 and $35 tax benefit for the three and six month periods, respectively, (2015: net of $17 and $31 tax benefit for the three and six month periods, respectively) | 55 | 51 | 114 | 101 | ||
Actuarial loss, tax benefit | 17 | $ 17 | 35 | $ 31 | ||
Estimated future benefit payments [Abstract] | ||||||
2,016 | 435 | 435 | ||||
2,017 | 514 | 514 | ||||
2,018 | 532 | 532 | ||||
2,019 | 540 | 540 | ||||
2,020 | 550 | 550 | ||||
2021 - 2025 | 2,958 | 2,958 | ||||
Level 1 (Quoted Prices in Active Markets) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [1] | 3,864 | 3,864 | 3,238 | ||
Level 2 (Significant Observable Inputs) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [2] | 17,838 | 17,838 | 16,889 | ||
Level 3 (Unobservable Inputs) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [3] | 0 | 0 | 0 | ||
Adept Strategy 9 Fund [Member] | Level 1 (Quoted Prices in Active Markets) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [1] | 0 | 0 | 0 | ||
Adept Strategy 9 Fund [Member] | Level 2 (Significant Observable Inputs) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [2] | 12,845 | 12,845 | 13,044 | ||
Adept Strategy 9 Fund [Member] | Level 3 (Unobservable Inputs) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [3] | 0 | 0 | 0 | ||
Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds [Member] | Level 1 (Quoted Prices in Active Markets) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [1] | 0 | 0 | 0 | ||
Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds [Member] | Level 2 (Significant Observable Inputs) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [2] | 4,993 | 4,993 | 3,845 | ||
Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds [Member] | Level 3 (Unobservable Inputs) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [3] | 0 | 0 | 0 | ||
U.S. Mutual Funds and Fixed Income Funds [Member] | Level 1 (Quoted Prices in Active Markets) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [1] | 2,706 | 2,706 | 2,557 | ||
U.S. Mutual Funds and Fixed Income Funds [Member] | Level 2 (Significant Observable Inputs) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [2] | 0 | 0 | 0 | ||
U.S. Mutual Funds and Fixed Income Funds [Member] | Level 3 (Unobservable Inputs) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [3] | 0 | 0 | 0 | ||
U.S. Equity Funds [Member] | Level 1 (Quoted Prices in Active Markets) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [1] | 380 | 380 | 350 | ||
U.S. Equity Funds [Member] | Level 2 (Significant Observable Inputs) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [2] | 0 | 0 | 0 | ||
U.S. Equity Funds [Member] | Level 3 (Unobservable Inputs) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [3] | 0 | 0 | 0 | ||
Cash [Member] | Level 1 (Quoted Prices in Active Markets) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [1] | 778 | 778 | 331 | ||
Cash [Member] | Level 2 (Significant Observable Inputs) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [2] | 0 | 0 | 0 | ||
Cash [Member] | Level 3 (Unobservable Inputs) [Member] | ||||||
Fair Value of Plan Assets [Abstract] | ||||||
Fair value of plan assets | [3] | 0 | 0 | $ 0 | ||
U.S. Defined Benefit Plan [Member] | ||||||
Estimated future employer contributions [Abstract] | ||||||
Employer contributions | 100 | |||||
Estimated future employer contributions in current fiscal year | 100 | |||||
U.K. Defined Benefit Plan [Member] | ||||||
Estimated future employer contributions [Abstract] | ||||||
Employer contributions | 219 | |||||
Estimated future employer contributions in current fiscal year | 435 | |||||
Bassi S.r.l. Unipersonale [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Unfunded liability | $ 1,262 | $ 1,262 | ||||
[1] | Level 1 investments represent mutual funds for which a quoted market price is available on an active market. These investments primarily hold stocks or bonds, or a combination of stocks and bonds. | |||||
[2] | Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The Company's pension plan financial assets held in the Adept Strategy 9 Fund and the Schroder investments are Level 2 assets. The Company uses the Net Asset Value to determine the fair value of underlying investments which (a) do not have readily determinable fair value; and (b) prepare their financial statements consistent with the measurement principles of an investment company. The Funds are not exchange traded. The Funds are not subject to any redemption notice periods or restrictions and can be redeemed on a daily basis. No gates or holdbacks or dealing suspensions are being applied to the Funds. The Funds are of perpetual duration. | |||||
[3] | The Company currently does not have any Level 3 pension plan financial assets. |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Apr. 02, 2016 | Sep. 30, 2015 |
Inventories [Abstract] | ||
Raw materials | $ 6,436 | $ 2,453 |
Work-in-process | 288 | 90 |
Finished goods | 6,532 | 4,247 |
Inventories | $ 13,256 | $ 6,790 |
Fair value of financial instr45
Fair value of financial instruments (Details) | Apr. 02, 2016USD ($) |
Level 2 (Significant Observable Inputs) [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value of long term debt | $ 15,947,000 |
Accrued expenses (Details)
Accrued expenses (Details) - USD ($) $ in Thousands | Apr. 02, 2016 | Sep. 30, 2015 |
Accrued expenses [Abstract] | ||
Percentage of total current liabilities used to analyze accrued expenses | 5.00% | 5.00% |
Accrued compensation and related costs | $ 1,841 | $ 827 |
Other accrued expenses | 1,915 | 1,146 |
Accrued expenses | $ 3,756 | $ 1,973 |
Warranty reserves (Details)
Warranty reserves (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2016 | Apr. 04, 2015 | Apr. 02, 2016 | Apr. 04, 2015 | |
Movement in warranty reserves [Roll Forward] | ||||
Warranty reserves at beginning of period | $ 213 | $ 151 | $ 278 | $ 153 |
Liability assumed on acquisition of subsidiary | 34 | 0 | 34 | 0 |
Decrease in beginning balance for warranty obligations settled during the period | (5) | 0 | (72) | 0 |
Foreign currency translation adjustment | 7 | (7) | 4 | (12) |
Net increase in warranty reserves for products sold during the period | 0 | 5 | 3 | |
Warranty reserves at end of period | $ 249 | $ 144 | $ 249 | $ 144 |
Debt (Details)
Debt (Details) | 6 Months Ended | ||
Apr. 02, 2016USD ($) | Apr. 02, 2016EUR (€) | Sep. 30, 2015USD ($) | |
Debt [Abstract] | |||
Total overdraft facility | $ 1,295,000 | ||
Annual principal payments on long term debt [Abstract] | |||
Total | 15,698,000 | $ 0 | |
Banca Monte dei Paschi di Siena S.p.A. ("MPS") [Member] | Secured Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 15,947,000 | € 14,000,000 | |
Line of credit facility, expiration date | Jan. 27, 2021 | ||
Maximum ratio of net debt to EBITDA, Current fiscal year | 3.5 | ||
Maximum ratio of net debt to EBITDA, year two | 3.5 | ||
Maximum ratio of net debt to EBITDA, thereafter | 3 | ||
Line of credit facility, amount outstanding | $ 15,947,000 | € 14,000,000 | |
Euros per dollar exhange rate | 0.878 | 0.878 | |
Annual principal payments on long term debt [Abstract] | |||
2,018 | $ 1,196,000 | ||
2,019 | 1,595,000 | ||
2,020 | 1,595,000 | ||
2,021 | 11,561,000 | ||
Total | 15,947,000 | ||
Less: Debt issuance costs | (249,000) | ||
Total | $ 15,698,000 | ||
Banca Monte dei Paschi di Siena S.p.A. ("MPS") [Member] | Secured Revolving Credit Facility [Member] | EuroLIBOR [Member] | |||
Line of Credit Facility [Line Items] | |||
Margin interest rate | 3.00% | ||
Banca Monte dei Paschi di Siena S.p.A. ("MPS") [Member] | Secured Revolving Credit Facility [Member] | EuroLIBOR [Member] | Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Margin interest rate | 0.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Apr. 02, 2016 | Sep. 30, 2015 |
Commitments and Contingencies [Abstract] | ||
Maximum recorded liability of deferred annuities | $ 147,000 | $ 153,000 |
Minimum rental commitments under non-cancelable leases [Abstract] | ||
2,016 | 621,000 | |
2,017 | 597,000 | |
2,018 | 551,000 | |
2,019 | 506,000 | |
2,020 | 506,000 | |
Thereafter | 2,406,000 | |
Total overdraft facility | 1,295,000 | |
Outstanding amount on Overdraft facility | $ 0 | $ 0 |
Changes in Other Comprehensiv50
Changes in Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Apr. 02, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at the beginning of the period | $ (11,004) | $ (8,829) |
Other comprehensive income (loss) | 25 | (2,175) |
Balance at the end of the period | (10,979) | (11,004) |
Foreign Currency Items [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at the beginning of the period | (1,274) | (956) |
Other comprehensive income (loss) | (89) | (318) |
Balance at the end of the period | (1,363) | (1,274) |
Defined Benefit Pension Plans [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at the beginning of the period | (9,730) | (7,873) |
Other comprehensive income (loss) | 114 | (1,857) |
Balance at the end of the period | $ (9,616) | $ (9,730) |
Related Parties (Details)
Related Parties (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Apr. 02, 2016 | Apr. 04, 2015 | Apr. 02, 2016 | Apr. 04, 2015 | Sep. 30, 2015 | |
Related Party Transaction [Line Items] | |||||
Debt to related parties | $ 2,545,000 | $ 2,545,000 | $ 0 | ||
Bassi Holding [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt to related parties | 2,545,000 | 2,545,000 | |||
Related party transaction | $ 54,000 | $ 0 | $ 54,000 | $ 0 |