Stockholders' Equity

12 Months Ended

Sep. 30, 2014

Stockholders' Equity [Abstract]

Stockholders' Equity

11. STOCKHOLDERS’ EQUITY

Common Stock Rights Offering

On August 7, 2014, we completed a $20,000rights offering (the “Rights Offering”). In the Rights Offering, the Company distributed, at no charge, to the holders of shares of its common stock on July 7, 2014, one non-transferable subscription right for each share of common stock owned. Each right entitled the holder thereof to purchase from the Company 0.214578135 shares of common stock at a subscription price of $5.20 per share, which represented a discount to the market price of the common stock at the closing of the offering. In addition, holders who purchased all of the shares of common stock available to them were entitled to subscribe, at the same subscription price of $5.20 per share, for a portion of any shares of common stock that other holders did not purchase, subject to certain limitations (the “Over-Subscription Privilege”). The Rights Offering was fully subscribed, after giving effect to the exercise of Over-Subscription Privileges, and we received net proceeds of approximately $19,649, after deducting estimated offering expenses, for the issuance of 3,846,150 shares of common stock.

Immediately after giving effect to the Rights Offering, we had 21,768,642 shares of common stock issued and outstanding. Tontine beneficially owned approximately 60% of the shares of common stock outstanding immediately prior to launch of the Rights Offering, and immediately after giving effect to the Rights Offering, Tontine beneficially owned approximately 61% of the Company’s outstanding shares.

Equity Incentive Plan

The 2006 Equity Incentive Plan became effective on May 12, 2006 (as amended, the “2006 Equity Incentive Plan”). The 2006 Equity Incentive Plan provides for grants of stock options as well as grants of stock, including restricted stock. This plan provided for approximately 2.0 million shares of common stock authorized for issuance under the 2006 Equity Incentive Plan, of which approximately 648,029 shares are available for issuance at September 30, 2014.

Treasury Stock

During the year ended September 30, 2014, we repurchased 36,272 common shares from our employees to satisfy minimum tax withholding requirements upon the vesting of restricted stock issued under the 2006 Equity Incentive Plan.We issued 13,500 shares out of treasury stock under our share-based compensation programs for restricted shares granted.

Restricted Stock

Restricted Stock Awards:
Fiscal Year	Shares Granted	Weighted Average Fair Value at Date of Grant	Shares Vested	Shares Outstanding	Expense recognized through September 30, 2014
2012	107,500	2.07	71,667	35,833	216
2013	12,500	5.00	4,167	8,333	40
2014	13,500	5.42	-	13,500	15

During the years ended September 30, 2014, 2013 and 2012, we recognized $201, $374, and $536, respectively, in compensation expense related to these restricted stock awards. At September 30, 2014, the unamortized compensation cost related to outstanding unvested restricted stock was $88. We expect to recognize $52 and $26 of this unamortized compensation expense during the years ended September 30, 2015 and 2016, respectively and $10 thereafter. A summary of restricted stock awards for the years ended September 30, 2014, 2013 and 2012 is provided in the table below:

		Years Ended September 30,
			2014	2013	2012
Unvested at beginning of year			159,246	257,826	376,200
	Granted		13,500	12,500	107,500
	Vested		(115,080)	(111,080)	(192,973)
	Forfeited		-	-	(32,901)
Unvested at end of year			57,666	159,246	257,826

The fair value of shares vesting during the years ended September 30, 2014, 2013 and 2012 was $571, $528 and $661, respectively. Fair value was calculated as the number of shares vested times the market price of shares on the date of vesting. The weighted average grant date fair value of unvested restricted stock at September 30, 2014 was $3.28.

All the restricted shares granted under the 2006 Equity Incentive Plan (vested or unvested) participate in dividends issued to common shareholders, if any.

Phantom Stock Units

Phantom stock units (“PSUs”) are primarily granted to the members of the Board of Directors as part of their overall compensation. These PSUs are paid via unrestricted stock grants to each director upon their departure from the Board of Directors. We record compensation expense for the full value of the grant on the date of grant. For the years ended September 30, 2014, 2013 and 2012, we recognized $243, $295, and $159 in compensation expense related to these grants.

From time to time, PSUs are granted to employees. These PSUs are paid via unrestricted stock grants to each employee upon the satisfaction of the grant terms. We record compensation expense for the PSUs granted to employees over the grant vesting period. For the years ended September 30, 2014, 2013 and 2012, we recognized zero, $651, and $129 in compensation expense related to these grants.

Stock Options

We utilized a binomial option pricing model to measure the fair value of stock options granted.Our determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, the risk-free rate of return, and actual and projected employee stock option exercise behaviors. The expected life of stock options is not considered under the binomial option pricing model that we utilize. We did not issue stock options during the years ended September 30, 2014 and 2012. The assumptions used in the fair value method calculation for the year ended September 30, 2013 are disclosed in the following table:

		Year Ended
		September 30,
		2013
Weighted average value per option granted during the period		$	3.43
Dividends (1)		$	-
Stock price volatility (2)			66.6%
Risk-free rate of return			0.9%
Option term			10.0 years
Expected life			6.0 years
Forfeiture rate (3)			10.0%
	(1) We do not currently pay dividends on our common stock.
	(2) Based upon the Company's historical volatility.
	(3) Based upon the Company's historical data.

Stock-based compensation expense recognized during the period is based on the value of the portion of the share-based payment awards that is ultimately expected to vest during the period. Stock-based compensation expense recognized in the Consolidated Statements of Comprehensive Income is based on awards ultimately expected to vest. We estimate our forfeitures at the time of grant and revise, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The following table summarizes activity under our stock option plans.

		Weighted Average
	Shares	Exercise Price
Outstanding, September 30, 2011	20,000	$	3.24
Options granted	-		-
Exercised	-		-
Forfeited and Cancelled	-		-
Outstanding, September 30, 2012	20,000	$	3.24
Options granted	150,000		5.76
Exercised	-		-
Forfeited and Cancelled	-		-
Outstanding, September 30, 2013	170,000	$	5.46
Options granted	-		-
Exercised	-		-
Forfeited and Cancelled	-		-
Outstanding, September 30, 2014	170,000	$	5.46

The following table summarizes options outstanding and exercisable at September 30, 2014:

Exercise Prices	Outstanding as of September 30, 2014	Remaining Contractual Life in Years		Weighted-Average Exercise Price	Exercisable as of September 30, 2014		Weighted-Average Exercise Price
$3.24	20,000	6.80	$	3.24	20,000	$	3.24
$5.76	150,000	8.58	$	5.76	-	$	-
	170,000		$	5.46	20,000	$	3.24

Our 2011 options vested over a three year period at a rate of one-third per year upon the annual anniversary date of the grant. Our 2013 options cliff vest at the end of a two year period ending at the anniversary date of the grant. All options expire ten years from the grant date if they are not exercised. Upon exercise of stock options, it is our policy to first issue shares from treasury stock, then to issue new shares. Unexercised stock options expire July 2021 and May 2023.

During the years ended September 30, 2014, 2013 and 2012, we recognized $267, $110 and $14, respectively, in compensation expense related to our stock option awards. At September 30, 2014, the unamortized compensation cost related to outstanding unvested stock options was $145. We expect to recognize all $145of this unamortized compensation expense during the year ended September 30, 2015.

The intrinsic value of stock options outstanding and exercisable was $57 and $36 at September 30, 2014 and 2013, respectively. The intrinsic value is calculated as the difference between the fair value as of the end of the period and the exercise price of the stock options.