Property, Plant, and Equipment, net

12 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

The components of property, plant, and equipment, net consisted of the following:



	As of			As of
(in thousands)	September 30, 2015			September 30, 2014
Equipment	$	24,913		$	23,185
Furniture and fixtures	1,109			1,109
Computer hardware and software	2,177			2,026
Leasehold improvements	1,480			5,576
Construction in progress	875			49
Property, plant, and equipment, gross	30,554			31,945
Accumulated depreciation	(21,629		)	(21,499		)
Property, plant, and equipment, net	$	8,925		$	10,446

During fiscal 2015, as a result of a revision in the estimated amount of cash flows for asset retirement obligations ("ARO") relating to the extension of the Alhambra facility leases and changes in the required restoration efforts, the Company reduced its ARO liability by $2.9 million with an offsetting reduction to leasehold improvements of $2.1 million, net ($4.0 million of leasehold improvements and $1.9 million of accumulated depreciation) and recorded a gain from change in estimate on ARO obligation of $0.8 million. Also see Note 14 - Commitments and Contingencies.

Depreciation expense totaled $2.1 million, $2.5 million and $2.4 million during the fiscal years ended September 30, 2015, 2014 and 2013, respectively.

Impairment Testing

The impairment tests for our long-lived assets involve comparing fair value to the carrying amount. If the carrying value of the long-lived assets (asset group) exceeds the estimated undiscounted cash flows expected to be generated by the assets, impairment may exist. We derive fair value using both a guideline public company valuation method, a market based approach, and on a lesser extent, the discounted cash flow valuation method, an income based approach. A guideline public company valuation method entails a comparison to publicly traded companies within similar industry, product lines, market, growth, margins and risk and is generally based on published data regarding the public companies' stock price, revenue, and earnings. The discounted cash flow valuation method is based on discounted cash flow models using assumptions about revenue growth rates, appropriate discount rates relative to risk, and estimates of terminal value.

As of September 30, 2014 and 2013, we performed an impairment test on long-lived assets. The impairment test was triggered by a change in long-term financial and cash flow forecasts. The impairment testing indicated that no impairment existed and that future undiscounted cash flows exceeded the carrying value.

As of September 30, 2015, we performed an impairment test on long-lived assets. The impairment test was triggered by continued losses from operations realized in fiscal year 2015. The impairment testing indicated that no impairment existed and that future undiscounted cash flows exceeded the carrying value.

The Company will assess its long-lived assets for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.