þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 41-1532464 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
11001 Bren Road East | ||
Minnetonka, Minnesota | 55343 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Common Stock, par value $.01 per share | The NASDAQ Global Select Market |
Large accelerated filer | o | Accelerated filer | þ | |||
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | o | |||
Emerging growth company | o |
Page | |
• | We sold our Etherios CRM consulting business in 2015. This business initially was acquired with the expectation it would drive engagements with companies that utilize the salesforce.com platform and were looking to deploy solutions within their businesses. We were not, however, rewarded in the marketplace as we had expected. As a result, we disposed of a consulting business that was losing money and not fully tied to our core hardware expertise. |
• | We significantly reduced the number of hardware product stock keeping units (SKUs) we produce in order to simplify our operations, improve our ability to manage inventory effectively, improve channel stocking strategies and control costs. At present, SKUs have been reduced from close to 5,000 at the beginning of fiscal 2016 to approximately 1,400. |
• | We consolidated and relocated office locations to improve efficiencies and provide costs savings. In the first quarter of fiscal 2016, we moved our Digi Wireless Design Services team from an office in downtown Minneapolis to our World Headquarters in suburban Minnetonka. In the third quarter of fiscal 2016, we closed our office in Dortmund, Germany and moved the corresponding positions to our existing office in Munich, Germany. In the third quarter of fiscal 2017, we announced the closure of our Paris, France office to further consolidate European operations in |
• | In October 2017, we have added new leadership to our M2M team in the areas of product management and research and development to drive greater alignment around the products we bring to market to meet the needs and desires of potential customers in key markets in a timely manner. We believe this increased alignment can greater lever our technical capabilities to drive more consistent growth. |
• | Console servers - Our console servers provide a secure remote graphical access to computer systems and network equipment that can communicate with virtually any server or device. |
• | Serial servers - Our serial servers (also known as device servers and terminal servers) provide secure, reliable and flexible serial-to-Ethernet integration of most devices into wired Ethernet networks. They are used for a variety of applications such as automation, robotics control, centralized device monitoring and management, data acquisition and point-of-sale applications. |
• | USB - Our Universal Serial Bus (USB) solutions include USB-to-serial converters that offer instant Input/Output (I/O) expansion for peripheral device connectivity. We also offer USB over Internet Protocol (IP) products that connect USB and serial devices on a wired or wireless Local Area Network (LAN), while eliminating the need for locally-attached host PCs. In addition, we also offer multiport USB hubs that offer a simple solution for adding switched USB ports to a PC, server or thin client. |
• | tighter focus on an individual product or product category; |
• | greater financial, technical and marketing resources; |
• | barriers to transition to our products; |
• | higher brand recognition across larger geographic regions; |
• | more comprehensive functionality; |
• | longer-standing cooperative relationships with OEM and end-user customers; |
• | superior customer service capacity and quality; |
• | longer operating history; and |
• | larger customer base. |
• | our ability to put in place the infrastructure to deploy and evolve our solutions effectively and continuously; |
• | the features and functionality of our offerings relative to competing offerings as well as our ability to market effectively; |
• | our ability to engage in successful strategic relationships with third parties such as telecommunications carriers, component makers and systems integrators; |
• | competing effectively for market share; and |
• | deploying complete end-to-end solutions that meet the needs of the marketplace generally as well as the particular requirements of our customers more effectively and efficiently than competitive solutions. |
• | problems combining the purchased operations, technologies, or products; |
• | unanticipated costs; |
• | diversion of management’s attention from our core business; |
• | difficulties integrating businesses in different countries and cultures; |
• | adverse effects on existing business relationships with suppliers and customers; |
• | risks associated with entering markets in which we have no or limited prior experience; and |
• | potential loss of key employees, particularly those of the purchased organization. |
• | We have not traditionally sold products or services to restaurants, pharmacies, hospitals and other similar businesses, which are a focus for Digi Smart Solutions™. |
• | Digi Smart Solutions™ offerings are deployed in part to help assure perishable goods are safely preserved. This presents a risk of loss in the event of a malfunction or failure of our offerings. |
• | Although we have retained several key employees with extensive experience in operating companies we have acquired to date, Digi Smart Solutions™ represents a new line of business in a marketplace that is nascent in its development and has numerous competitors. We cannot provide assurances we will be successful in operating and growing this business. |
• | Our ability to succeed with the Digi Smart Solutions™ offerings will depend in large part on our ability to provide customers with hardware and software products that are easy to deploy and offer features and functionality that address the needs of particular businesses. We may face challenges and delays in the development of this business as the marketplace for products and services evolves to meet the needs and desires of customers. |
Location of Property | Use of Facility | Approximate Square Footage | Ownership or Lease Expiration Date | |||
Minnetonka, MN (Corporate headquarters) | Research & development, sales, sales support, marketing and administration | 130,000 | Owned | |||
Eden Prairie, MN | Manufacturing and warehousing | 58,000 | Owned | |||
Mishawaka, IN | Sales, technical support and administration | 12,412 | April, 2023 | |||
Waltham, MA | Research & development, sales and sales support | 4,249 | October 2020 | |||
Rochester, MN | Engineering services | 3,090 | September 2018 | |||
Lindon, UT | Sales, technical support, research & development and administration | 11,986 | December 2020 | |||
St. Catharines, Ontario, Canada | Sales and technical support | 1,179 | June 2019 | |||
Hong Kong, China | Sales, marketing and administration | 1,656 | April 2019 | |||
Beijing, China | Sales, marketing and administration | 1,617 | October 2019 | |||
Shanghai, China | Sales, marketing and administration | 1,991 | May 2019 | |||
Ismaning, Germany | Sales, sales support and administration | 6,878 | September 2019 | |||
Logrono, Spain | Sales, research & development and administration | 3,229 | January 2020 | |||
Tokyo, Japan | Sales | 1,371 | Perpetual | |||
Singapore | Sales, marketing and administration | 3,498 | April 2019 |
2017 | First | Second | Third | Fourth | ||||||||||||
High | $ | 14.15 | $ | 14.00 | $ | 12.53 | $ | 11.05 | ||||||||
Low | $ | 9.00 | $ | 11.60 | $ | 9.00 | $ | 8.50 | ||||||||
2016 | First | Second | Third | Fourth | ||||||||||||
High | $ | 13.53 | $ | 12.23 | $ | 11.69 | $ | 12.49 | ||||||||
Low | $ | 11.14 | $ | 7.70 | $ | 8.37 | $ | 9.79 |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of a Publicly Announced Program | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program | |||||||
July 1, 2017 - July 31, 2017 | 292 | $9.90 | — | $19,725,797.42 | |||||||
August 1, 2017 - August 31, 2017 | 1,316 | $9.95 | — | $19,725,797.42 | |||||||
September 1, 2017 - September 30, 2017 | — | — | — | $19,725,797.42 | |||||||
Total | 1,608 | $9.94 | — | $19,725,797.42 |
(1) | All shares reported were forfeited by employees in connection with the satisfaction of tax withholding obligations related to the vesting of restricted stock units. |
FY12 | FY13 | FY14 | FY15 | FY16 | FY17 | |||||||||||||||||||
Digi International Inc. | $ | 100.00 | $ | 98.33 | $ | 73.82 | $ | 116.04 | $ | 112.20 | $ | 104.33 | ||||||||||||
NASDAQ U.S. Benchmark TR Index | $ | 100.00 | $ | 121.50 | $ | 143.19 | $ | 142.18 | $ | 163.83 | $ | 194.50 | ||||||||||||
NASDAQ Telecommunications Index | $ | 100.00 | $ | 101.70 | $ | 115.28 | $ | 107.06 | $ | 134.94 | $ | 136.52 |
For Fiscal Years Ended September 30, | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||
Revenue | $ | 181,634 | $ | 203,005 | $ | 203,847 | $ | 183,173 | $ | 184,420 | |||||||||
Gross profit | $ | 87,174 | $ | 99,680 | $ | 97,121 | $ | 90,377 | $ | 95,325 | |||||||||
Sales and marketing | 33,955 | 33,847 | 37,574 | 38,751 | 39,229 | ||||||||||||||
Research and development | 28,566 | 30,955 | 29,949 | 28,912 | 29,082 | ||||||||||||||
General and administrative (1) | 13,331 | 17,026 | 18,306 | 18,244 | 19,417 | ||||||||||||||
Restructuring charges, net | 2,515 | 747 | 403 | 81 | 313 | ||||||||||||||
Operating income | 8,807 | 17,105 | 10,889 | 4,389 | 7,284 | ||||||||||||||
Total other income (expense), net (2) | 684 | (415 | ) | 2,228 | 672 | 695 | |||||||||||||
Income before income taxes | 9,491 | 16,690 | 13,117 | 5,061 | 7,979 | ||||||||||||||
Income tax provision (3) | 125 | 3,212 | 3,684 | 568 | 2,330 | ||||||||||||||
Income from continuing operations | 9,366 | 13,478 | 9,433 | 4,493 | 5,649 | ||||||||||||||
Income (loss) from discontinued operations, after income taxes | — | 3,230 | (2,845 | ) | (2,742 | ) | 156 | ||||||||||||
Net income | $ | 9,366 | $ | 16,708 | $ | 6,588 | $ | 1,751 | $ | 5,805 | |||||||||
Basic net income (loss) per common share: | |||||||||||||||||||
Continuing operations | $ | 0.35 | $ | 0.52 | $ | 0.38 | $ | 0.18 | $ | 0.22 | |||||||||
Discontinued operations | $ | — | $ | 0.13 | $ | (0.12 | ) | $ | (0.11 | ) | $ | 0.01 | |||||||
Net income (4) | $ | 0.35 | $ | 0.65 | $ | 0.27 | $ | 0.07 | $ | 0.22 | |||||||||
Diluted net income (loss) per common share: | |||||||||||||||||||
Continuing operations | $ | 0.35 | $ | 0.51 | $ | 0.37 | $ | 0.17 | $ | 0.22 | |||||||||
Discontinued operations | $ | — | $ | 0.12 | $ | (0.11 | ) | $ | (0.11 | ) | $ | 0.01 | |||||||
Net income (4) | $ | 0.35 | $ | 0.64 | $ | 0.26 | $ | 0.07 | $ | 0.22 | |||||||||
Balance sheet data as of September 30, | |||||||||||||||||||
Working capital (current assets less current liabilities) | $ | 156,380 | $ | 171,837 | $ | 136,996 | $ | 125,927 | $ | 127,672 | |||||||||
Total assets | $ | 345,189 | $ | 336,166 | $ | 300,360 | $ | 290,459 | $ | 299,930 | |||||||||
Stockholders' equity | $ | 319,144 | $ | 300,029 | $ | 274,938 | $ | 265,298 | $ | 274,243 | |||||||||
Book value per common share (stockholders' equity divided by outstanding shares) | $ | 12.01 | $ | 11.52 | $ | 10.98 | $ | 10.88 | $ | 10.73 | |||||||||
Number of employees as of September 30 | 514 | 515 | 515 | 571 | 621 |
(1) | Included in general and administrative expense in fiscal 2013 is $1.5 million ($1.0 million after tax) related to the patent infringement lawsuit settlement with U.S. Ethernet Innovations. |
(2) | Included in total other income (expense), net for fiscal 2015 is a $1.4 million gain from the settlement of a property and casualty insurance claim related to the replacement of our capital equipment destroyed in the fire at our subcontract manufacturer's location in Thailand. |
(3) | In fiscal 2017, 2016 and 2015, we recorded net tax benefits of $1.0 million, $1.5 million and $0.8 million, respectively (see Note 11 to our Consolidated Financial Statements). In fiscal 2014 we recorded $1.5 million related to the re-measurement and reversal of certain income tax reserves as a result of a federal income tax audit of fiscal 2012, the reassessment of state research and development tax credits and the release of income tax reserves due to the expiration of statute of limitations from U.S. and foreign tax jurisdictions. In fiscal 2013 we recorded net tax benefits of $0.8 related to the January 2, 2013 enactment of the American Taxpayers Relief Act of 2012 extending the research and development tax credit for the last three quarters of fiscal 2012 and the release of income tax reserves due to the expiration of the statute of limitations from various U.S. and foreign tax jurisdictions. |
(4) | Earnings per share are calculated by line item and may not add due to the use of rounded amounts. |
• | M2M segment; and |
• | Solutions segment. |
• | Revenue was $181.6 Million. Our revenue decreased by $21.4 million, or 10.5%, compared to fiscal 2016. This decrease was due to a decrease in product revenue of $29.6 million, offset by an increase in services and solutions revenue of $8.2 million. |
• | Gross Margin was 48.0%. Our gross margin decreased as a percentage of revenue to 48.0% in fiscal 2017 from 49.1% in fiscal 2016. Hardware product gross margin, excluding amortization, was 48.7% in fiscal 2017, compared to 50.1% in the prior fiscal year. Service gross margin, excluding amortization, for fiscal 2017 was 49.5% compared to 32.5% in the prior fiscal year. |
• | Income from Continuing Operations was $9.4 Million and Earnings Per Diluted Share from Continuing Operations were $0.35. Our income from continuing operations decreased by $4.1 million, or 30.5%, compared to fiscal 2016. Earnings per diluted share from continuing operations were $0.35 in fiscal 2017, compared to $0.51 in fiscal 2016. The decline in income from continuing operations due primarily to a decline in gross profit of $12.5 million driven by a decline in the network product category, which includes traditionally higher margin products compared to our other products, partially offset by an increase in services and solutions gross profit. This was partially offset by a decrease in operating expenses of $4.2 million, primarily due to lower incentive-based compensation expense, and benefits due to adjustments to our contingent consideration liability accruals, offset by incremental expenses related to the SMART |
• | Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) from Continuing Operations was $14.4 Million. Our EBITDA from continuing operations was $14.4 million, or 7.9% of revenue, in fiscal 2017, compared to $21.0 million, or 10.4% of revenue, in fiscal 2016. Below is a table reconciling income from continuing operations to EBITDA from continuing operations (in thousands): |
Year ended September 30, | ||||||||||||||
2017 | 2016 | |||||||||||||
% of total revenue | % of total revenue | |||||||||||||
Total revenue | $ | 181,634 | 100.0 | % | $ | 203,005 | 100.0 | % | ||||||
Income from continuing operations | $ | 9,366 | 5.1 | % | $ | 13,478 | 6.6 | % | ||||||
Interest income, net | (608 | ) | (0.3 | ) | (254 | ) | (0.1 | ) | ||||||
Income tax provision | 125 | 0.1 | 3,212 | 1.6 | ||||||||||
Depreciation and amortization | 5,497 | 3.0 | 4,584 | 2.3 | ||||||||||
Earnings from continuing operations before interest, taxes, depreciation and amortization | $ | 14,380 | 7.9 | % | $ | 21,020 | 10.4 | % |
• | Our Balance Sheet Position Improved. Our current ratio was 9.7 to 1 at September 30, 2017, compared to 8.2 to 1 at September 30, 2016. |
• | Our service and solutions revenue increased 119.5% during fiscal 2017 compared to fiscal 2016. The increase was primarily driven by the growth of our Digi Smart Solutions™ business. Services and solutions revenue includes $6.1 million of incremental revenue from the acquisition of SMART Temps and FreshTemp in fiscal 2017. We also had increases to our Digi Wireless Design Services, Digi Remote Manager® platform and support services. |
• | Our total cash and cash equivalents and marketable securities including long-term marketable securities, amounted to $115.0 million at September 30, 2017, a decrease of $22.7 million from September 30, 2016. We completed two acquisitions in fiscal 2017, for a total cash expenditure of $30.1 million (net of cash acquired of $0.5 million). |
• | During fiscal 2017, we have continued to reduce the number of product stock keeping units (SKUs) we produce, which we believe will have significant implications on our ability to manage inventory effectively, improve channel stocking strategies and control costs. |
• | We continued to simplify and scale our business. We reduced the number of office locations by consolidating our France operations into our EMEA Headquarters in Munich, Germany office and closed our France office location. |
• | In October 2017, subsequent to the end of our fiscal year, we acquired TempAlert, LLC, a Boston-based provider of automated, real-time temperature monitoring and task management solutions. TempAlert will join Digi Smart Solutions™. |
• | Our network products decreased by 26.0% in fiscal 2017 compared to fiscal 2016, which is a more rapid decline than expected. Demand for these products has been declining for several years and we expect revenues for these products will continue to decline in the future at a rate of approximately 10% to 15% annually. |
• | Our embedded products and RF products revenue declined of 15.0% and 14.6%, respectively, in fiscal 2017 as compared to fiscal 2016. The decline in both product categories is primarily due to significant sales to large customers in the prior fiscal year, which were not repeated. |
• | Revenue for new product introductions in fiscal 2017 were not met. |
• | Revenue expectations for Digi Smart Solutions™ were not met. Although we found the sales cycles to be longer than expected, the segment still has a growing pipeline. |
Year ended September 30, | % Increase (decrease) | ||||||||||||||||||||||||||
($ in thousands) | 2017 | 2016 | 2015 | 2017 compared to 2016 | 2016 compared to 2015 | ||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||
Hardware product | $ | 166,480 | 91.7 | % | $ | 196,101 | 96.6 | % | $ | 195,497 | 95.9 | % | (15.1 | )% | 0.3 | % | |||||||||||
Services and solutions | 15,154 | 8.3 | 6,904 | 3.4 | 8,350 | 4.1 | 119.5 | (17.3 | ) | ||||||||||||||||||
Total revenue | 181,634 | 100.0 | 203,005 | 100.0 | 203,847 | 100.0 | (10.5 | ) | (0.4 | ) | |||||||||||||||||
Cost of sales: | |||||||||||||||||||||||||||
Cost of hardware product | 85,369 | 47.0 | 97,776 | 48.2 | 99,842 | 49.0 | (12.7 | ) | (2.1 | ) | |||||||||||||||||
Cost of services and solutions | 7,647 | 4.2 | 4,662 | 2.3 | 5,571 | 2.7 | 64.0 | (16.3 | ) | ||||||||||||||||||
Amortization | 1,444 | 0.8 | 887 | 0.4 | 1,313 | 0.7 | 62.8 | (32.4 | ) | ||||||||||||||||||
Total cost of sales | 94,460 | 52.0 | 103,325 | 50.9 | 106,726 | 52.4 | (8.6 | ) | (3.2 | ) | |||||||||||||||||
Gross profit | 87,174 | 48.0 | 99,680 | 49.1 | 97,121 | 47.6 | (12.5 | ) | 2.6 | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||
Sales and marketing | 33,955 | 18.7 | 33,847 | 16.7 | 37,574 | 18.4 | 0.3 | (9.9 | ) | ||||||||||||||||||
Research and development | 28,566 | 15.7 | 30,955 | 15.2 | 29,949 | 14.7 | (7.7 | ) | 3.4 | ||||||||||||||||||
General and administrative | 13,331 | 7.4 | 17,026 | 8.4 | 18,306 | 9.0 | (21.7 | ) | (7.0 | ) | |||||||||||||||||
Restructuring charges, net | 2,515 | 1.4 | 747 | 0.4 | 403 | 0.2 | 236.7 | 85.4 | |||||||||||||||||||
Total operating expenses | 78,367 | 43.2 | 82,575 | 40.7 | 86,232 | 42.3 | (5.1 | ) | (4.2 | ) | |||||||||||||||||
Operating income | 8,807 | 4.8 | 17,105 | 8.4 | 10,889 | 5.3 | (48.5 | ) | 57.1 | ||||||||||||||||||
Other income (expense), net | 684 | 0.4 | (415 | ) | (0.2 | ) | 2,228 | 1.1 | (264.8 | ) | (118.6 | ) | |||||||||||||||
Income from continuing operations, before income taxes | 9,491 | 5.2 | 16,690 | 8.2 | 13,117 | 6.4 | (43.1 | ) | 27.2 | ||||||||||||||||||
Income tax provision | 125 | — | 3,212 | 1.6 | 3,684 | 1.8 | (96.1 | ) | (12.8 | ) | |||||||||||||||||
Income from continuing operations | 9,366 | 5.2 | 13,478 | 6.6 | 9,433 | 4.6 | (30.5 | ) | 42.9 | ||||||||||||||||||
Income (loss) from discontinued operations, after income taxes | — | — | 3,230 | 1.6 | (2,845 | ) | (1.4 | ) | 100.0 | 213.5 | |||||||||||||||||
Net income | $ | 9,366 | 5.2 | % | $ | 16,708 | 8.2 | % | $ | 6,588 | 3.2 | % | (43.9 | )% | 153.6 | % |
Product Revenue | % of Product Revenue | ||||||||||||||||||||
($ in millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||||
Cellular routers and gateways | $ | 47.1 | $ | 48.4 | $ | 58.7 | 28.3 | % | 24.7 | % | 30.0 | % | |||||||||
RF | 29.0 | 33.9 | 34.4 | 17.4 | % | 17.3 | % | 17.6 | % | ||||||||||||
Embedded | 48.0 | 56.5 | 51.0 | 28.8 | % | 28.8 | % | 26.1 | % | ||||||||||||
Network | 42.4 | 57.3 | 51.4 | 25.5 | % | 29.2 | % | 26.3 | % | ||||||||||||
Total product revenue | $ | 166.5 | $ | 196.1 | $ | 195.5 | 100.0 | % | 100.0 | % | 100.0 | % |
Revenue | % of Revenue | ||||||||||||||||||||
($ in millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||||
North America, primarily United States | $ | 117.7 | $ | 131.5 | $ | 127.6 | 64.8 | % | 64.8 | % | 62.6 | % | |||||||||
Europe, Middle East & Africa | 39.4 | 44.9 | 47.5 | 21.7 | % | 22.1 | % | 23.3 | % | ||||||||||||
Asia | 19.9 | 20.4 | 22.9 | 11.0 | % | 10.0 | % | 11.2 | % | ||||||||||||
Latin America | 4.6 | 6.2 | 5.8 | 2.5 | % | 3.1 | % | 2.9 | % | ||||||||||||
Total revenue | $ | 181.6 | $ | 203.0 | $ | 203.8 | 100.0 | % | 100.0 | % | 100.0 | % |
Revenue | % of Revenue | ||||||||||||||||||||
($ in millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||||
Direct/OEM channel | $ | 70.0 | $ | 68.8 | $ | 77.9 | 38.5 | % | 33.9 | % | 38.2 | % | |||||||||
Distributors channel | 111.6 | 134.2 | 125.9 | 61.5 | % | 66.1 | % | 61.8 | % | ||||||||||||
Total revenue | $ | 181.6 | $ | 203.0 | $ | 203.8 | 100.0 | % | 100.0 | % | 100.0 | % |
Year ended September 30, | % Increase (decrease) | ||||||||||||||||||||||||
($ in thousands) | 2017 | 2016 | 2015 | 2017 compared to 2016 | 2016 compared to 2015 | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Hardware product | $ | 166,480 | 95.5 | % | $ | 196,101 | 96.9 | % | $ | 195,497 | 95.9 | % | (15.1 | ) | 0.3 | ||||||||||
Services | 7,757 | 4.5 | 6,193 | 3.1 | 8,350 | 4.1 | 25.3 | (25.8 | ) | ||||||||||||||||
Total revenue | 174,237 | 100.0 | 202,294 | 100.0 | 203,847 | 100.0 | (13.9 | ) | (0.8 | ) | |||||||||||||||
Cost of sales: | |||||||||||||||||||||||||
Cost of hardware product | 85,369 | 49.0 | 97,776 | 48.3 | 99,842 | 49.0 | (12.7 | ) | (2.1 | ) | |||||||||||||||
Cost of services | 4,693 | 2.7 | 4,216 | 2.1 | 5,571 | 2.7 | 11.3 | (24.3 | ) | ||||||||||||||||
Amortization of intangibles | 370 | 0.2 | 489 | 0.3 | 1,313 | 0.7 | (24.3 | ) | (62.8 | ) | |||||||||||||||
Total cost of sales | 90,432 | 51.9 | 102,481 | 50.7 | 106,726 | 52.4 | (11.8 | ) | (4.0 | ) | |||||||||||||||
Gross profit | 83,805 | 48.1 | 99,813 | 49.3 | 97,121 | 47.6 | (16.0 | ) | 2.8 | ||||||||||||||||
Total operating expenses | 71,001 | 40.8 | 80,991 | 40.0 | 86,232 | 42.3 | (12.3 | ) | (6.1 | ) | |||||||||||||||
Operating income | $ | 12,804 | 7.3 | % | $ | 18,822 | 9.3 | % | $ | 10,889 | 5.3 | % | (32.0 | ) | 72.9 |
Year ended September 30, | % Increase (decrease) | |||||||||||||
($ in thousands) | 2017 | 2016 | 2017 compared to 2016 | |||||||||||
Solutions revenue | $ | 7,397 | 100.0 | % | $ | 711 | 100.0 | % | 940.4 | |||||
Cost of sales: | ||||||||||||||
Cost of solutions | 2,954 | 40.0 | 446 | 62.7 | 562.3 | |||||||||
Amortization of intangibles | 1,074 | 14.5 | 398 | 56.0 | 169.8 | |||||||||
Total cost of sales | 4,028 | 54.5 | 844 | 118.7 | 377.3 | |||||||||
Gross profit | 3,369 | 45.5 | (133 | ) | (18.7 | ) | 2,633.1 | |||||||
Total operating expenses | 7,366 | 99.5 | 1,584 | 222.8 | 365.0 | |||||||||
Operating loss | $ | (3,997 | ) | (54.0 | )% | $ | (1,717 | ) | (241.5 | )% | 132.8 |
Year ended September 30, | ||||||||||||
($ in thousands) | 2017 | 2016 | 2015 | |||||||||
Operating activities | $ | 2,475 | $ | 27,089 | $ | 14,074 | ||||||
Investing activities | (3,743 | ) | (3,780 | ) | (19,454 | ) | ||||||
Financing activities | 3,057 | 7,749 | 5,145 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 706 | (349 | ) | (2,237 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | $ | 2,495 | $ | 30,709 | $ | (2,472 | ) |
Payments due by fiscal period | ||||||||||||||||||||
($ in thousands) | Total | Less than 1 year | 1-3 years | 3-5 years | Thereafter | |||||||||||||||
Operating leases | $ | 3,761 | $ | 1,398 | $ | 1,757 | $ | 485 | $ | 121 |
Fiscal year ended September 30, | % increase | |||||||
2017 | 2016 | (decrease) | ||||||
Euro | 1.1047 | 1.1112 | (0.6 | )% | ||||
British Pound | 1.2673 | 1.4261 | (11.1 | )% | ||||
Japanese Yen | 0.0090 | 0.0090 | — | % | ||||
Canadian Dollar | 0.7615 | 0.7552 | 0.8 | % |
Fiscal years ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands, except per common share data) | |||||||||||
Revenue: | |||||||||||
Hardware product | $ | 166,480 | $ | 196,101 | $ | 195,497 | |||||
Services and solutions | 15,154 | 6,904 | 8,350 | ||||||||
Total revenue | 181,634 | 203,005 | 203,847 | ||||||||
Cost of sales: | |||||||||||
Cost of hardware product | 85,369 | 97,776 | 99,842 | ||||||||
Cost of services and solutions | 7,647 | 4,662 | 5,571 | ||||||||
Amortization | 1,444 | 887 | 1,313 | ||||||||
Total cost of sales | 94,460 | 103,325 | 106,726 | ||||||||
Gross profit | 87,174 | 99,680 | 97,121 | ||||||||
Operating expenses: | |||||||||||
Sales and marketing | 33,955 | 33,847 | 37,574 | ||||||||
Research and development | 28,566 | 30,955 | 29,949 | ||||||||
General and administrative | 13,331 | 17,026 | 18,306 | ||||||||
Restructuring charges, net | 2,515 | 747 | 403 | ||||||||
Total operating expenses | 78,367 | 82,575 | 86,232 | ||||||||
Operating income | 8,807 | 17,105 | 10,889 | ||||||||
Other income (expense), net: | |||||||||||
Interest income | 656 | 545 | 218 | ||||||||
Interest expense | (48 | ) | (291 | ) | (4 | ) | |||||
Other income (expense), net | 76 | (669 | ) | 2,014 | |||||||
Total other income (expense), net | 684 | (415 | ) | 2,228 | |||||||
Income from continuing operations, before income taxes | 9,491 | 16,690 | 13,117 | ||||||||
Income tax provision | 125 | 3,212 | 3,684 | ||||||||
Income from continuing operations | 9,366 | 13,478 | 9,433 | ||||||||
Income (loss) from discontinued operations, after income taxes | — | 3,230 | (2,845 | ) | |||||||
Net income | $ | 9,366 | $ | 16,708 | $ | 6,588 | |||||
Basic net income (loss) per common share: | |||||||||||
Continuing operations | $ | 0.35 | $ | 0.52 | $ | 0.38 | |||||
Discontinued operations | $ | — | $ | 0.13 | $ | (0.12 | ) | ||||
Net income (1) | $ | 0.35 | $ | 0.65 | $ | 0.27 | |||||
Diluted net income (loss) per common share: | |||||||||||
Continuing operations | $ | 0.35 | $ | 0.51 | $ | 0.37 | |||||
Discontinued operations | $ | — | $ | 0.12 | $ | (0.11 | ) | ||||
Net income (1) | $ | 0.35 | $ | 0.64 | $ | 0.26 | |||||
Weighted average common shares: | |||||||||||
Basic | 26,432 | 25,760 | 24,645 | ||||||||
Diluted | 27,099 | 26,311 | 25,227 |
Fiscal years ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Net income | $ | 9,366 | $ | 16,708 | $ | 6,588 | |||||
Other comprehensive income (loss), net of tax: | |||||||||||
Foreign currency translation adjustment | 2,041 | (2,107 | ) | (4,323 | ) | ||||||
Change in net unrealized (loss) gain on investments | (14 | ) | 53 | (21 | ) | ||||||
Less income tax benefit (provision) | 5 | (20 | ) | 7 | |||||||
Reclassification of realized (gain) loss on investments included in net income (1) | — | (7 | ) | 1 | |||||||
Less income tax benefit (2) | — | 3 | — | ||||||||
Other comprehensive income (loss), net of tax | 2,032 | (2,078 | ) | (4,336 | ) | ||||||
Comprehensive income | $ | 11,398 | $ | 14,630 | $ | 2,252 |
(1) | Recorded in Other income (expense), net in our Consolidated Statements of Operations. |
(2) | Recorded in Income tax provision in our Consolidated Statements of Operations. |
As of September 30, | |||||||
2017 | 2016 | ||||||
(in thousands, except share data) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 78,222 | $ | 75,727 | |||
Marketable securities | 32,015 | 58,382 | |||||
Accounts receivable, net | 28,855 | 28,685 | |||||
Inventories | 30,238 | 26,276 | |||||
Receivable from sale of business | 1,998 | 2,997 | |||||
Other | 3,032 | 3,578 | |||||
Total current assets | 174,360 | 195,645 | |||||
Marketable securities, long-term | 4,753 | 3,541 | |||||
Property, equipment and improvements, net | 12,801 | 14,041 | |||||
Identifiable intangible assets, net | 11,800 | 4,041 | |||||
Goodwill | 131,995 | 109,448 | |||||
Deferred tax assets | 9,211 | 7,295 | |||||
Receivable from sale of business | — | 1,959 | |||||
Other | 269 | 196 | |||||
Total assets | $ | 345,189 | $ | 336,166 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 6,240 | $ | 8,569 | |||
Accrued compensation | 4,325 | 10,787 | |||||
Accrued warranty | 987 | 1,033 | |||||
Accrued professional fees | 928 | 753 | |||||
Unearned revenue | 1,343 | 361 | |||||
Accrued restructuring | 1,656 | — | |||||
Other | 2,501 | 2,305 | |||||
Total current liabilities | 17,980 | 23,808 | |||||
Income taxes payable | 877 | 1,490 | |||||
Deferred tax liabilities | 534 | 616 | |||||
Contingent consideration on acquired business | 6,000 | 9,447 | |||||
Other non-current liabilities | 654 | 776 | |||||
Total liabilities | 26,045 | 36,137 | |||||
Commitments and Contingencies (see Notes 16 & 17) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued and outstanding | — | — | |||||
Common stock, $.01 par value; 60,000,000 shares authorized; 33,007,993 and 32,471,175 shares issued | 330 | 325 | |||||
Additional paid-in capital | 245,528 | 237,492 | |||||
Retained earnings | 150,478 | 141,112 | |||||
Accumulated other comprehensive loss | (22,659 | ) | (24,691 | ) | |||
Treasury stock, at cost, 6,436,578 and 6,430,797 shares | (54,533 | ) | (54,209 | ) | |||
Total stockholders’ equity | 319,144 | 300,029 | |||||
Total liabilities and stockholders’ equity | $ | 345,189 | $ | 336,166 |
Fiscal years ended September 30, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Operating activities: | (in thousands) | |||||||||||
Net income | $ | 9,366 | $ | 16,708 | $ | 6,588 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation of property, equipment and improvements | 2,900 | 2,742 | 2,949 | |||||||||
Amortization of identifiable intangible assets | 2,597 | 1,872 | 2,910 | |||||||||
Stock-based compensation | 4,659 | 3,654 | 4,301 | |||||||||
Excess tax benefits from stock-based compensation | (326 | ) | (212 | ) | — | |||||||
Deferred income tax (benefit) provision | (2,108 | ) | 1,115 | (769 | ) | |||||||
Gain on insurance settlement related to property and equipment | — | — | (1,375 | ) | ||||||||
Gain on sale of business | — | (2,870 | ) | — | ||||||||
Change in fair value of contingent consideration | (4,364 | ) | (441 | ) | — | |||||||
Bad debt/product return provision | 361 | 168 | 357 | |||||||||
Inventory obsolescence | 1,850 | 1,734 | 1,284 | |||||||||
Restructuring charges, net | 2,515 | 747 | 509 | |||||||||
Other | (9 | ) | 66 | 87 | ||||||||
Changes in operating assets and liabilities (net of acquisition): | ||||||||||||
Accounts receivable | 833 | (1,188 | ) | (1,794 | ) | |||||||
Inventories | (4,484 | ) | 3,993 | (1,913 | ) | |||||||
Other assets | 562 | 597 | 241 | |||||||||
Income taxes | (3 | ) | (1,589 | ) | 387 | |||||||
Accounts payable | (3,536 | ) | 1,612 | (3,769 | ) | |||||||
Accrued expenses | (8,338 | ) | (1,619 | ) | 4,081 | |||||||
Net cash provided by operating activities | 2,475 | 27,089 | 14,074 | |||||||||
Investing activities: | ||||||||||||
Purchase of marketable securities | (61,964 | ) | (74,759 | ) | (54,427 | ) | ||||||
Proceeds from maturities of marketable securities | 87,105 | 73,706 | 38,028 | |||||||||
Proceeds from sale of business | 3,000 | 2,849 | — | |||||||||
Acquisition of businesses, net of cash acquired | (30,111 | ) | (2,860 | ) | — | |||||||
Proceeds from insurance settlement related to property and equipment | — | — | 1,400 | |||||||||
Proceeds from sale of property and equipment | — | — | 45 | |||||||||
Proceeds from sale of investment | — | 13 | — | |||||||||
Purchase of property, equipment, improvements and certain other intangible assets | (1,773 | ) | (2,729 | ) | (4,500 | ) | ||||||
Net cash used in investing activities | (3,743 | ) | (3,780 | ) | (19,454 | ) | ||||||
Financing activities: | ||||||||||||
Acquisition earn-out payments | (518 | ) | — | — | ||||||||
Excess tax benefits from stock-based compensation | 326 | 212 | — | |||||||||
Proceeds from stock option plan transactions | 3,502 | 7,191 | 6,559 | |||||||||
Proceeds from employee stock purchase plan transactions | 685 | 896 | 925 | |||||||||
Purchase of common stock | (938 | ) | (550 | ) | (2,339 | ) | ||||||
Net cash provided by financing activities | 3,057 | 7,749 | 5,145 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 706 | (349 | ) | (2,237 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 2,495 | 30,709 | (2,472 | ) | ||||||||
Cash and cash equivalents, beginning of period | 75,727 | 45,018 | 47,490 | |||||||||
Cash and cash equivalents, end of period | $ | 78,222 | $ | 75,727 | $ | 45,018 | ||||||
Supplemental disclosures of cash flow information: | ||||||||||||
Interest paid | $ | 1 | $ | 9 | $ | 4 | ||||||
Income taxes paid, net | $ | 2,129 | $ | 3,029 | $ | 1,296 | ||||||
Supplemental schedule of non-cash investing and financing activities: | ||||||||||||
Accrual for capitalized intangible asset | $ | (36 | ) | $ | (183 | ) | $ | (17 | ) | |||
Receivable related to sale of business | $ | — | $ | 4,956 | $ | — | ||||||
Liability related to acquisition of business | $ | (1,310 | ) | $ | (10,550 | ) | $ | — |
For fiscal years ended September 30, 2017, 2016 and 2015 | ||||||||||||||||||||||||||||||
(in thousands) | Accumulated | |||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Paid-In | Retained | Comprehensive | Stockholders’ | |||||||||||||||||||||||||
Shares | Par Value | Shares | Value | Capital | Earnings | Loss | Equity | |||||||||||||||||||||||
Balances, September 30, 2014 | 30,704 | $ | 307 | 6,314 | $ | (53,237 | ) | $ | 218,689 | $ | 117,816 | $ | (18,277 | ) | $ | 265,298 | ||||||||||||||
Net income | 6,588 | 6,588 | ||||||||||||||||||||||||||||
Other comprehensive loss | (4,336 | ) | (4,336 | ) | ||||||||||||||||||||||||||
Employee stock purchase issuances | (124 | ) | 1,041 | (116 | ) | 925 | ||||||||||||||||||||||||
Repurchase of common stock | 297 | (2,339 | ) | (2,339 | ) | |||||||||||||||||||||||||
Issuance of stock under stock award plans | 830 | 8 | 6,551 | 6,559 | ||||||||||||||||||||||||||
Tax impact from equity awards | (2,058 | ) | (2,058 | ) | ||||||||||||||||||||||||||
Stock-based compensation expense | 4,301 | 4,301 | ||||||||||||||||||||||||||||
Balances, September 30, 2015 | 31,534 | $ | 315 | 6,487 | $ | (54,535 | ) | $ | 227,367 | $ | 124,404 | $ | (22,613 | ) | $ | 274,938 | ||||||||||||||
Net income | 16,708 | 16,708 | ||||||||||||||||||||||||||||
Other comprehensive loss | (2,078 | ) | (2,078 | ) | ||||||||||||||||||||||||||
Employee stock purchase issuances | (104 | ) | 876 | 20 | 896 | |||||||||||||||||||||||||
Repurchase of common stock | 48 | (550 | ) | (550 | ) | |||||||||||||||||||||||||
Issuance of stock under stock award plans | 937 | 10 | 7,181 | 7,191 | ||||||||||||||||||||||||||
Tax impact from equity awards | (914 | ) | (914 | ) | ||||||||||||||||||||||||||
Accelerated vesting of Etherios stock award plans | 184 | 184 | ||||||||||||||||||||||||||||
Stock-based compensation expense | 3,654 | 3,654 | ||||||||||||||||||||||||||||
Balances, September 30, 2016 | 32,471 | $ | 325 | 6,431 | $ | (54,209 | ) | $ | 237,492 | $ | 141,112 | $ | (24,691 | ) | $ | 300,029 | ||||||||||||||
Net income | 9,366 | 9,366 | ||||||||||||||||||||||||||||
Other comprehensive income | 2,032 | 2,032 | ||||||||||||||||||||||||||||
Employee stock purchase issuances | (72 | ) | 614 | 71 | 685 | |||||||||||||||||||||||||
Repurchase of common stock | 78 | (938 | ) | (938 | ) | |||||||||||||||||||||||||
Issuance of stock under stock award plans | 537 | 5 | 3,497 | 3,502 | ||||||||||||||||||||||||||
Tax impact from equity awards | (191 | ) | (191 | ) | ||||||||||||||||||||||||||
Stock-based compensation expense | 4,659 | 4,659 | ||||||||||||||||||||||||||||
Balances, September 30, 2017 | 33,008 | $ | 330 | 6,437 | $ | (54,533 | ) | $ | 245,528 | $ | 150,478 | $ | (22,659 | ) | $ | 319,144 |
Fiscal years ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Numerator: | |||||||||||
Income from continuing operations | $ | 9,366 | $ | 13,478 | $ | 9,433 | |||||
Income (loss) from discontinued operations, after income taxes | $ | — | $ | 3,230 | $ | (2,845 | ) | ||||
Net income | $ | 9,366 | $ | 16,708 | $ | 6,588 | |||||
Denominator: | |||||||||||
Denominator for basic net income per common share — weighted average shares outstanding | 26,432 | 25,760 | 24,645 | ||||||||
Effect of dilutive securities: | |||||||||||
Stock options and restricted stock units | 667 | 551 | 582 | ||||||||
Denominator for diluted net income per common share — adjusted weighted average shares | 27,099 | 26,311 | 25,227 | ||||||||
Basic net income (loss) per common share: | |||||||||||
Continuing operations | $ | 0.35 | $ | 0.52 | $ | 0.38 | |||||
Discontinued operations | $ | — | $ | 0.13 | $ | (0.12 | ) | ||||
Net income (1) | $ | 0.35 | $ | 0.65 | $ | 0.27 | |||||
Diluted net income (loss) per common share: | |||||||||||
Continuing operations | $ | 0.35 | $ | 0.51 | $ | 0.37 | |||||
Discontinued operations | $ | — | $ | 0.12 | $ | (0.11 | ) | ||||
Net income (1) | $ | 0.35 | $ | 0.64 | $ | 0.26 |
Cash | $ | 28,754 | |
Fair value of contingent consideration on acquired business | 10 | ||
Working capital adjustment | 124 | ||
Total purchase price consideration | $ | 28,888 | |
Fair value of net tangible assets acquired | $ | 761 | |
Fair value of identifiable intangible assets acquired: | |||
Purchased and core technology | 4,000 | ||
Customer relationships | 4,000 | ||
Trade name and trademarks | 711 | ||
Non-compete agreements | 600 | ||
Goodwill | 18,816 | ||
Total | $ | 28,888 |
Fiscal year ended September 30, | ||||||||
2017 | 2016 | |||||||
Revenue | $ | 182,568 | $ | 207,494 | ||||
Income from continuing operations | $ | 8,675 | $ | 11,370 | ||||
Net income | $ | 8,675 | $ | 14,600 |
Cash | $ | 1,697 | |
Purchase price payable upon completion of diligence matters | 303 | ||
Fair value of contingent consideration on acquired business | 1,300 | ||
Working capital adjustment | (37 | ) | |
Total purchase price consideration | $ | 3,263 | |
Fair value of net tangible assets acquired | $ | (37 | ) |
Fair value of identifiable intangible assets acquired: | |||
Purchased and core technology | 400 | ||
Customer relationships | 250 | ||
Goodwill | 2,650 | ||
Total | $ | 3,263 |
Fiscal year ended September 30, | |||||||
2016 | 2015 | ||||||
Service revenue | $ | 891 | $ | 9,011 | |||
Cost of service | 713 | 8,101 | |||||
Gross profit | 178 | 910 | |||||
Operating expenses: | |||||||
Sales and marketing | 148 | 1,970 | |||||
Research and development | 103 | 2,098 | |||||
General and administrative | 43 | 1,208 | |||||
Restructuring | — | 106 | |||||
Total operating expenses | 294 | 5,382 | |||||
Loss from discontinued operations, before income taxes | (116 | ) | (4,472 | ) | |||
Gain on sale of discontinued operations, before income taxes | 2,870 | — | |||||
Income (loss) from discontinued operations, before income taxes | 2,754 | (4,472 | ) | ||||
Income tax benefit on discontinued operations | (476 | ) | (1,627 | ) | |||
Income (loss) from discontinued operations, after income taxes | $ | 3,230 | $ | (2,845 | ) |
Fiscal year ended September 30, | ||||||||
2016 | 2015 | |||||||
Amortization of identifiable intangible assets | $ | 30 | $ | 483 | ||||
Depreciation of property, equipment and improvements | $ | — | $ | 29 | ||||
Purchases of property, equipment, improvements and certain other intangible assets | $ | — | $ | (11 | ) |
September 30, 2017 | September 30, 2016 | ||||||||||||||||||||||
Gross carrying amount | Accum. amort. | Net | Gross carrying amount | Accum. amort. | Net | ||||||||||||||||||
Purchased and core technology | $ | 51,292 | $ | (46,304 | ) | $ | 4,988 | $ | 46,594 | $ | (44,999 | ) | $ | 1,595 | |||||||||
License agreements | 18 | (17 | ) | 1 | 18 | (10 | ) | 8 | |||||||||||||||
Patents and trademarks | 12,484 | (11,280 | ) | 1,204 | 11,619 | (10,871 | ) | 748 | |||||||||||||||
Customer relationships | 21,914 | (16,817 | ) | 5,097 | 17,463 | (15,773 | ) | 1,690 | |||||||||||||||
Non-compete agreements | 600 | (90 | ) | 510 | — | — | — | ||||||||||||||||
Total | $ | 86,308 | $ | (74,508 | ) | $ | 11,800 | $ | 75,694 | $ | (71,653 | ) | $ | 4,041 |
Fiscal year | Total | ||
2017 | $ | 2,597 | |
2016 | $ | 1,842 | |
2015 | $ | 2,427 |
Fiscal year | Total | ||
2018 | $ | 2,708 | |
2019 | $ | 2,341 | |
2020 | $ | 1,841 | |
2021 | $ | 1,484 | |
2022 | $ | 1,215 |
Fiscal years ended September 30, | |||||||
2017 | 2016 | ||||||
Beginning balance, October 1 | $ | 109,448 | $ | 100,183 | |||
Acquisitions | 21,465 | 10,985 | |||||
Foreign currency translation adjustment | 1,082 | (1,720 | ) | ||||
Ending balance, September 30 | $ | 131,995 | $ | 109,448 |
• | Cellular routers and gateways; |
• | Radio frequency (RF) which include our XBee® modules as well as other RF solutions; |
• | Embedded products include Digi Connect® and Rabbit® embedded systems on module and single board computers; |
• | Network products, which has the highest concentration of mature products, including console and serial servers and USB connected products; |
• | Digi Wireless Design Services; |
• | Digi Remote Manager®; and |
• | Support services which offers various levels of technical services for development assistance, consulting and training. |
Fiscal year ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenue | |||||||||||
M2M | $ | 174,237 | $ | 202,294 | $ | 203,847 | |||||
Solutions | 7,397 | 711 | — | ||||||||
Total revenue | $ | 181,634 | $ | 203,005 | $ | 203,847 | |||||
Operating income (loss) | |||||||||||
M2M | $ | 12,804 | $ | 18,822 | $ | 10,889 | |||||
Solutions | (3,997 | ) | (1,717 | ) | — | ||||||
Total operating income | $ | 8,807 | $ | 17,105 | $ | 10,889 | |||||
Depreciation and amortization | |||||||||||
M2M | $ | 3,575 | $ | 4,040 | $ | 5,347 | |||||
Solutions | 1,922 | 544 | — | ||||||||
Total depreciation and amortization | $ | 5,497 | $ | 4,584 | $ | 5,347 |
Fiscal year ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
M2M | $ | 1,738 | $ | 2,641 | $ | 4,500 | |||||
Solutions | 35 | 88 | — | ||||||||
Total expended for property, plant and equipment | $ | 1,773 | $ | 2,729 | $ | 4,500 |
As of September 30, | ||||||||
2017 | 2016 | |||||||
M2M | $ | 182,555 | $ | 184,917 | ||||
Solutions | 47,644 | 13,599 | ||||||
Unallocated* | 114,990 | 137,650 | ||||||
Total assets | $ | 345,189 | $ | 336,166 |
As of September 30, | ||||||||
2017 | 2016 | |||||||
M2M | $ | 98,981 | $ | 98,496 | ||||
Solutions | 33,014 | 10,952 | ||||||
Total goodwill | $ | 131,995 | $ | 109,448 |
As of September 30, | |||||||
2017 | 2016 | ||||||
United States | $ | 12,648 | $ | 13,861 | |||
International, primarily Europe | 153 | 180 | |||||
Total net property, equipment and improvements | $ | 12,801 | $ | 14,041 |
Fiscal years ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
North America, primarily United States | $ | 117,749 | $ | 131,457 | $ | 127,592 | |||||
Europe, Middle East & Africa | 39,403 | 44,932 | 47,523 | ||||||||
Asia | 19,892 | 20,390 | 22,907 | ||||||||
Latin America | 4,590 | 6,226 | 5,825 | ||||||||
Total revenue | $ | 181,634 | $ | 203,005 | $ | 203,847 |
As of September 30, | |||||||
2017 | 2016 | ||||||
Accounts receivable, net: | |||||||
Accounts receivable | $ | 31,365 | $ | 30,885 | |||
Less allowance for doubtful accounts | 341 | 209 | |||||
Less reserve for future returns and pricing adjustments | 2,169 | 1,991 | |||||
Total accounts receivable, net | $ | 28,855 | $ | 28,685 | |||
Inventories: | |||||||
Raw materials | $ | 24,050 | $ | 21,116 | |||
Work in process | 484 | 802 | |||||
Finished goods | 5,704 | 4,358 | |||||
Total inventories | $ | 30,238 | $ | 26,276 | |||
Property, equipment and improvements, net: | |||||||
Land | $ | 1,800 | $ | 1,800 | |||
Buildings | 10,522 | 10,522 | |||||
Improvements | 3,445 | 3,239 | |||||
Equipment | 17,133 | 15,778 | |||||
Purchased software | 3,571 | 3,377 | |||||
Furniture and fixtures | 3,473 | 2,803 | |||||
Total property, equipment and improvements, gross | 39,944 | 37,519 | |||||
Less accumulated depreciation and amortization | 27,143 | 23,478 | |||||
Total property, equipment and improvements, net | $ | 12,801 | $ | 14,041 |
Amortized Cost (1) | Unrealized Gains | Unrealized Losses | Fair Value (1) | ||||||||||||
Current marketable securities: | |||||||||||||||
Corporate bonds | $ | 28,275 | $ | — | $ | (20 | ) | $ | 28,255 | ||||||
Certificates of deposit | 3,756 | 4 | — | 3,760 | |||||||||||
Current marketable securities | 32,031 | 4 | (20 | ) | 32,015 | ||||||||||
Non-current marketable securities: | |||||||||||||||
Certificates of deposit | 4,757 | — | (4 | ) | 4,753 | ||||||||||
Total marketable securities | $ | 36,788 | $ | 4 | $ | (24 | ) | $ | 36,768 |
(1) | Included in amortized cost and fair value is purchased and accrued interest of $211. |
Amortized Cost (1) | Unrealized Gains | Unrealized Losses | Fair Value (1) | ||||||||||||
Current marketable securities: | |||||||||||||||
Corporate bonds | $ | 28,801 | $ | — | $ | (34 | ) | $ | 28,767 | ||||||
Commercial paper | 23,963 | — | (20 | ) | 23,943 | ||||||||||
Certificates of deposit | 3,755 | 13 | — | 3,768 | |||||||||||
Government municipal bonds | 1,904 | — | — | 1,904 | |||||||||||
Current marketable securities | 58,423 | 13 | (54 | ) | 58,382 | ||||||||||
Non-current marketable securities: | |||||||||||||||
Certificates of deposit | 3,505 | 36 | — | 3,541 | |||||||||||
Total marketable securities | $ | 61,928 | $ | 49 | $ | (54 | ) | $ | 61,923 |
(1) | Included in amortized cost and fair value is purchased and accrued interest of $271. |
September 30, 2017 | |||||||||||||||
Less than 12 Months | More than 12 Months | ||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||
Corporate bonds | $ | 26,196 | $ | (20 | ) | $ | — | $ | — | ||||||
Certificates of deposit | 3,751 | (4 | ) | — | — | ||||||||||
Total | $ | 29,947 | $ | (24 | ) | $ | — | $ | — |
September 30, 2016 | |||||||||||||||
Less than 12 Months | More than 12 Months | ||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||
Corporate bonds | $ | 24,454 | $ | (33 | ) | $ | 4,102 | $ | (1 | ) | |||||
Commercial paper | 23,943 | (20 | ) | — | — | ||||||||||
Total | $ | 48,397 | $ | (53 | ) | $ | 4,102 | $ | (1 | ) |
Fair Value Measurements at September 30, 2017 using: | |||||||||||||||
Total carrying value at September 30, 2017 | Quoted price in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||
Assets: | |||||||||||||||
Money market | $ | 39,524 | $ | 39,524 | $ | — | $ | — | |||||||
Corporate bonds | 28,255 | — | 28,255 | — | |||||||||||
Certificates of deposit | 8,513 | — | 8,513 | — | |||||||||||
Total assets measured at fair value | $ | 76,292 | $ | 39,524 | $ | 36,768 | $ | — | |||||||
Liabilities: | |||||||||||||||
Contingent consideration on acquired business | $ | 6,388 | $ | — | $ | — | $ | 6,388 | |||||||
Total liabilities measured at fair value | $ | 6,388 | $ | — | $ | — | $ | 6,388 |
Fair Value Measurements at September 30, 2016 using: | |||||||||||||||
Total carrying value at September 30, 2016 | Quoted price in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||
Assets: | |||||||||||||||
Money market | $ | 44,319 | $ | 44,319 | $ | — | $ | — | |||||||
Corporate bonds | 28,767 | — | 28,767 | — | |||||||||||
Commercial paper | 23,943 | — | 23,943 | — | |||||||||||
Certificates of deposit | 7,309 | — | 7,309 | — | |||||||||||
Government municipal bonds | 1,904 | — | 1,904 | — | |||||||||||
Total assets measured at fair value | $ | 106,242 | $ | 44,319 | $ | 61,923 | $ | — | |||||||
Liabilities: | |||||||||||||||
Contingent consideration on acquired business | $ | 9,960 | $ | — | $ | — | $ | 9,960 | |||||||
Total liabilities measured at fair value | $ | 9,960 | $ | — | $ | — | $ | 9,960 |
Fiscal years ended September 30, | ||||||||
2017 | 2016 | |||||||
Fair value at beginning of period | $ | 9,960 | $ | — | ||||
Purchase price contingent consideration | 1,310 | 10,400 | ||||||
Contingent consideration payments | (518 | ) | — | |||||
Change in fair value of contingent consideration | (4,364 | ) | (440 | ) | ||||
Fair value at end of period | $ | 6,388 | $ | 9,960 |
Balance at | Warranties | Settlements | Balance at | ||||||||||||
Fiscal year | October 1 | issued | made | September 30 | |||||||||||
2017 | $ | 1,033 | $ | 679 | $ | (725 | ) | $ | 987 | ||||||
2016 | $ | 1,014 | $ | 771 | $ | (752 | ) | $ | 1,033 | ||||||
2015 | $ | 862 | $ | 967 | $ | (815 | ) | $ | 1,014 |
2017 Restructuring | 2016 Restructuring | 2015 Restructuring | |||||||||||||||||||||
Employee Termination Costs | Other | Employee Termination Costs | Other | Employee Termination Costs | Total | ||||||||||||||||||
Balance at September 30, 2014 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Restructuring charge | — | — | — | — | 412 | 412 | |||||||||||||||||
Payments | — | — | — | — | (403 | ) | (403 | ) | |||||||||||||||
Reversals | — | — | — | — | (9 | ) | (9 | ) | |||||||||||||||
Balance at September 30, 2015 | — | — | — | — | — | — | |||||||||||||||||
Restructuring charge | — | — | 558 | 195 | — | 753 | |||||||||||||||||
Payments | — | — | (559 | ) | (195 | ) | — | (754 | ) | ||||||||||||||
Reversals | — | — | (6 | ) | — | — | (6 | ) | |||||||||||||||
Foreign currency fluctuation | — | — | 7 | — | — | 7 | |||||||||||||||||
Balance at September 30, 2016 | — | — | — | — | — | — | |||||||||||||||||
Restructuring charge | 2,258 | 257 | — | — | — | 2,515 | |||||||||||||||||
Payments | (845 | ) | (141 | ) | — | — | — | (986 | ) | ||||||||||||||
Foreign currency fluctuation | 115 | 12 | — | — | — | 127 | |||||||||||||||||
Balance at September 30, 2017 | $ | 1,528 | $ | 128 | $ | — | $ | — | $ | — | $ | 1,656 |
Fiscal years ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
United States | $ | 5,170 | $ | 9,841 | $ | 6,934 | |||||
International | 4,321 | 6,849 | 6,183 | ||||||||
Income from continuing operations, before income taxes | $ | 9,491 | $ | 16,690 | $ | 13,117 |
Fiscal years ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Current: | |||||||||||
Federal | $ | 312 | $ | (141 | ) | $ | 1,452 | ||||
State | 165 | 139 | 453 | ||||||||
Foreign | 1,756 | 2,099 | 2,279 | ||||||||
Deferred: | |||||||||||
U.S. | (1,454 | ) | 1,260 | (297 | ) | ||||||
Foreign | (654 | ) | (145 | ) | (203 | ) | |||||
Income tax provision | $ | 125 | $ | 3,212 | $ | 3,684 |
As of September 30, | |||||||
2017 | 2016 | ||||||
Current deferred tax asset | $ | — | $ | — | |||
Non-current deferred tax asset | 9,211 | 7,295 | |||||
Current deferred tax liability | — | — | |||||
Non-current deferred tax liability | (534 | ) | (616 | ) | |||
Net deferred tax asset | $ | 8,677 | $ | 6,679 | |||
Uncollectible accounts and other reserves | $ | 1,063 | $ | 915 | |||
Depreciation and amortization | (673 | ) | 421 | ||||
Inventories | 824 | 683 | |||||
Compensation costs | 5,863 | 4,925 | |||||
Tax carryforwards | 7,514 | 6,263 | |||||
Valuation allowance | (5,952 | ) | (5,970 | ) | |||
Identifiable intangible assets | (581 | ) | (558 | ) | |||
Other | 619 | — | |||||
Net deferred tax asset | $ | 8,677 | $ | 6,679 |
Fiscal years ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Statutory income tax amount | $ | 2,917 | $ | 5,548 | $ | 4,491 | |||||
Increase (decrease) resulting from: | |||||||||||
State taxes, net of federal benefits | (125 | ) | 204 | (190 | ) | ||||||
Utilization of tax credits | (1,168 | ) | (1,116 | ) | (250 | ) | |||||
Manufacturing deduction | (150 | ) | (450 | ) | (285 | ) | |||||
Discrete tax benefits | (954 | ) | (1,461 | ) | (818 | ) | |||||
Foreign operations | 218 | 276 | 181 | ||||||||
Valuation reserve | 159 | (43 | ) | 297 | |||||||
Adjustment of tax contingency reserves | 257 | 202 | 71 | ||||||||
Meals and entertainment | 63 | 55 | 64 | ||||||||
Employee stock purchase plan | 79 | 83 | 76 | ||||||||
Contingent consideration | (1,172 | ) | (154 | ) | — | ||||||
Other, net | 1 | 68 | 47 | ||||||||
Income tax provision | $ | 125 | $ | 3,212 | $ | 3,684 |
Fiscal years ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Unrecognized tax benefits at beginning of fiscal year | $ | 1,708 | $ | 1,618 | $ | 2,301 | |||||
Increases related to: | |||||||||||
Prior year income tax positions | 21 | 107 | 110 | ||||||||
Current year income tax positions | 257 | 240 | 144 | ||||||||
Decreases related to: | |||||||||||
Prior year income tax positions | — | (71 | ) | (255 | ) | ||||||
Settlements | — | (30 | ) | (74 | ) | ||||||
Expiration of statute of limitations | (651 | ) | (156 | ) | (608 | ) | |||||
Unrecognized tax benefits at end of fiscal year | $ | 1,335 | $ | 1,708 | $ | 1,618 |
Fiscal years ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cost of sales | $ | 213 | $ | 215 | $ | 221 | |||||
Sales and marketing | 1,348 | 921 | 1,158 | ||||||||
Research and development | 656 | 590 | 561 | ||||||||
General and administrative | 2,442 | 1,923 | 1,941 | ||||||||
Stock-based compensation before income taxes | 4,659 | 3,649 | 3,881 | ||||||||
Income tax benefit | (1,536 | ) | (1,185 | ) | (1,343 | ) | |||||
Stock-based compensation after income taxes | $ | 3,123 | $ | 2,464 | $ | 2,538 |
Options Outstanding | Weighted Average Exercised Price | Weighted Average Contractual Term (in years) | Aggregate Intrinsic Value (1) | ||||||||
Balance at September 30, 2016 | 3,963 | $10.36 | |||||||||
Granted | 601 | 12.86 | |||||||||
Exercised | (335 | ) | 10.45 | ||||||||
Forfeited / Canceled | (327 | ) | 12.68 | ||||||||
Balance at September 30, 2017 | 3,902 | $10.54 | 4.2 | $ | 3,593 | ||||||
Exercisable at September 30, 2017 | 2,746 | $10.18 | 3.5 | $ | 2,769 |
Fiscal years ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Weighted average per option grant date fair value | $ | 4.63 | $ | 3.90 | $ | 2.98 | |||||
Assumptions used for option grants: | |||||||||||
Risk free interest rate | 1.46% - 1.96% | 1.22% - 1.85% | 1.57% - 1.85% | ||||||||
Expected term | 6.00 years | 6.00 years | 6.00 years | ||||||||
Expected volatility | 33% - 34% | 32% - 33% | 32% - 36% | ||||||||
Weighted average volatility | 34% | 32% | 35% | ||||||||
Expected dividend yield | 0% | 0% | 0% |
Options Outstanding | Options Exercisable | |||||||||||||||
Range of Exercise Prices | Options Outstanding | Weighted Average Remaining Contractual Life (In Years) | Weighted Average Exercise Price | Number of Shares Vested | Weighted Average Exercise Price | |||||||||||
$7.40 - $8.30 | 858 | 4.01 | $ | 7.95 | 623 | $ | 7.92 | |||||||||
$8.31 - $9.59 | 623 | 3.98 | $ | 9.14 | 551 | $ | 9.16 | |||||||||
$9.60 - $10.52 | 554 | 4.02 | $ | 9.86 | 405 | $ | 9.84 | |||||||||
$10.53 - $10.81 | 567 | 3.91 | $ | 10.73 | 556 | $ | 10.72 | |||||||||
$10.82 - $12.63 | 604 | 4.82 | $ | 12.11 | 394 | $ | 11.96 | |||||||||
$12.64 - $14.75 | 490 | 6.09 | $ | 13.53 | 11 | $ | 14.75 | |||||||||
$14.76 - $15.23 | 206 | 0.16 | $ | 15.23 | 206 | $ | 15.23 | |||||||||
$7.40 - $15.23 | 3,902 | 4.18 | $ | 10.54 | 2,746 | $ | 10.18 |
Number of Awards | Weighted Average Grant Date Fair Value | |||||
Nonvested at September 30, 2016 | 505 | $ | 9.67 | |||
Granted | 285 | $ | 12.77 | |||
Vested | (202 | ) | $ | 9.42 | ||
Canceled | (22 | ) | $ | 10.59 | ||
Nonvested at September 30, 2017 | 566 | $ | 11.28 |
Fiscal year | Amount | |||
2018 | $ | 1,398 | ||
2019 | 1,148 | |||
2020 | 609 | |||
2021 | 277 | |||
2022 | 208 | |||
Thereafter | 121 | |||
Total minimum payments required | $ | 3,761 |
Fiscal years ended September 30, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Rentals | $ | 1,342 | $ | 1,613 | $ | 2,076 | |||||
Less: sublease rentals | — | (46 | ) | (56 | ) | ||||||
Total rental expense | $ | 1,342 | $ | 1,567 | $ | 2,020 |
Quarter ended | |||||||||||||||
Dec. 31 | March 31 | June 30 | Sept. 30 | ||||||||||||
Fiscal 2017 | |||||||||||||||
Revenue | $ | 45,175 | $ | 45,615 | $ | 45,739 | $ | 45,105 | |||||||
Gross profit | 21,453 | 21,902 | 22,485 | 21,334 | |||||||||||
Income from continuing operations (1)(2) | 2,357 | 1,331 | 1,335 | 4,343 | |||||||||||
Income (loss) from discontinued operations, after income taxes | — | — | — | — | |||||||||||
Net income (1)(2) | 2,357 | 1,331 | 1,335 | 4,343 | |||||||||||
Basic net income per common share: | |||||||||||||||
Continuing operations | 0.09 | 0.05 | 0.05 | 0.16 | |||||||||||
Discontinued operations | — | — | — | — | |||||||||||
Net income | 0.09 | 0.05 | 0.05 | 0.16 | |||||||||||
Diluted net income per common share: | |||||||||||||||
Continuing operations | 0.09 | 0.05 | 0.05 | 0.16 | |||||||||||
Discontinued operations | — | — | — | — | |||||||||||
Net income | 0.09 | 0.05 | 0.05 | 0.16 | |||||||||||
Fiscal 2016 | |||||||||||||||
Revenue | $ | 50,259 | $ | 50,162 | $ | 52,130 | $ | 50,454 | |||||||
Gross profit | 24,357 | 24,742 | 25,977 | 24,604 | |||||||||||
Income from continuing operations (1)(2) | 3,131 | 2,226 | 4,277 | 3,844 | |||||||||||
Income (loss) from discontinued operations, after income taxes | 3,319 | (89 | ) | — | — | ||||||||||
Net income (1)(2) | 6,450 | 2,137 | 4,277 | 3,844 | |||||||||||
Basic net income per common share: | |||||||||||||||
Continuing operations | 0.12 | 0.09 | 0.17 | 0.15 | |||||||||||
Discontinued operations | 0.13 | — | — | — | |||||||||||
Net income | 0.25 | 0.08 | 0.17 | 0.15 | |||||||||||
Diluted net income per common share: | |||||||||||||||
Continuing operations | 0.12 | 0.09 | 0.16 | 0.14 | |||||||||||
Discontinued operations | 0.13 | — | — | — | |||||||||||
Net income | 0.25 | 0.08 | 0.16 | 0.14 |
(1) | During fiscal 2017 and 2016, we recorded net tax benefits of $1.0 million and $1.5 million, respectively. We recorded a benefit of $0.1 million in the first quarter of fiscal 2017 resulting from the reversal of income tax reserves due to the |
(2) | For continuing operations, we recorded business restructuring charges of $2.5 million ($1.6 million after tax) in the third quarter of fiscal 2017, $0.7 million ($0.4 million after tax) in the first quarter of fiscal 2016 and $0.1 million ($0.1 million after tax) in the second quarter of fiscal 2016. |
Name | Age | Position | ||
Ronald E. Konezny | 49 | President and Chief Executive Officer | ||
Michael C. Goergen | 50 | Senior Vice President, Chief Financial Officer and Treasurer | ||
Jon A. Nyland | 54 | Vice President Manufacturing Operations | ||
Kevin C. Riley | 56 | Chief Operating Officer | ||
Tracy L. Roberts | 55 | Vice President of Technology Services | ||
David H. Sampsell | 49 | Vice President of Corporate Development, General Counsel and Corporate Secretary |
(a) Consolidated Financial Statement and Schedules of the Company (filed as part of this Annual Report on Form 10-K) | |
1. | Consolidated Statements of Operations for fiscal years ended September 30, 2017, 2016 and 2015 |
Consolidated Statements of Comprehensive Income for fiscal years ended September 30, 2017, 2016 and 2015 | |
Consolidated Balance Sheets as of September 30, 2017 and 2016 | |
Consolidated Statements of Cash Flows for fiscal years ended September 30, 2017, 2016 and 2015 | |
Consolidated Statements of Stockholders’ Equity for fiscal years ended September 30, 2017, 2016 and 2015 | |
Notes to Consolidated Financial Statements | |
2. | Schedule of Valuation and Qualifying Accounts |
3. | Report of Independent Registered Certified Public Accounting Firm |
(b) Exhibits | ||||||
Unless otherwise indicated, all documents incorporated into this Annual Report on Form 10-K by reference to a document filed with the SEC are located under SEC file number 1-34033. | ||||||
Exhibit Number | Description | Method of Filing | ||||
2 | (a) | Incorporated by Reference | ||||
2 | (b) | Incorporated by Reference | ||||
3 | (a) | Restated Certificate of Incorporation of the Company, as amended* (3) | Incorporated by Reference | |||
3 | (b) | Incorporated by Reference | ||||
4 | (a) | Incorporated by Reference | ||||
4 | (b) | Incorporated by Reference | ||||
10 | (a) | Incorporated by Reference | ||||
10 | (b) | Incorporated by Reference | ||||
10 | (b)(i) | Form of Notice of Grant of Stock Options and Option Agreement (for grants under Digi International Inc. 2000 Omnibus Stock Plan before January 26, 2010)** (9) | Incorporated by Reference | |||
10 | (b)(ii) | Form of Notice of Grant of Stock Options and Option Agreement (amended form for grants under Digi International Inc. 2000 Omnibus Stock Plan on or after January 26, 2010 provided Addendum 1A applies only to certain grants made on and after November 22, 2011)** (10) | Incorporated by Reference | |||
10 | (c) | Incorporated by Reference | ||||
10 | (c)(i) | Form of Notice of Grant of Stock Options and Option Agreement including Addenda to Option Agreement that may apply to certain grants (for grants under Digi International Inc. 2013 Omnibus Incentive Plan)** (12) | Incorporated by Reference | |||
10 | (c)(ii) | Form of (Director) Restricted Stock Unit Award Agreement (for awards under Digi International Inc. 2013 Omnibus Incentive Plan)** (13) | Incorporated by Reference | |||
Exhibit Number | Description | Method of Filing | ||||
10 | (d) | Incorporated by Reference | ||||
10 | (d)(i) | Form of Notice of Grant of Stock Options and Option Agreement including Addenda to Option Agreement that may apply to certain grants (for grants under Digi International Inc. 2014 Omnibus Incentive Plan)** (15) | Incorporated by Reference | |||
10 | (d)(ii) | Form of (Director) Restricted Stock Unit Award Agreement (for awards under Digi International Inc. 2014 Omnibus Incentive Plan)** (16) | Incorporated by Reference | |||
10 | (d)(iii) | Form of (Executive) Restricted Stock Unit Award Agreement (for awards under Digi International Inc. 2014 Omnibus Incentive Plan)** (17) | Incorporated by Reference | |||
10 | (e) | Incorporated by Reference | ||||
10 | (e)(i) | Form of (Director) Restricted Stock Unit Award Agreement (for awards under Digi International Inc. 2016 Omnibus Incentive Plan)* (19) | Incorporated by Reference | |||
10 | (e)(ii) | Form of (Executive) Restricted Stock Unit Award Agreement (for awards under Digi International Inc. 2016 Omnibus Incentive Plan)* (20) | Incorporated by Reference | |||
10 | (e)(iii) | Form of (Employee) Restricted Stock Unit Award Agreement (for awards under Digi International Inc. 2016 Omnibus Incentive Plan)* (21) | Incorporated by Reference | |||
10 | (e)(iv) | Form of Notice of Grant of Stock Options and Option Agreement (for grants under Digi International Inc. 2016 Omnibus Incentive Plan)* (22) | Incorporated by Reference | |||
10 | (f) | Incorporated by Reference | ||||
10 | (f)(i) | Form of (Director) Restricted Stock Unit Award Agreement (for awards under Digi International Inc. 2017 Omnibus Incentive Plan)* (24) | Incorporated by Reference | |||
10 | (f)(ii) | Form of (Executive) Restricted Stock Unit Award Agreement (for awards under Digi International Inc. 2017 Omnibus Incentive Plan)* (25) | Incorporated by Reference | |||
10 | (f)(iii) | Form of (Employee) Restricted Stock Unit Award Agreement (for awards under Digi International Inc 2017 Omnibus Incentive Plan)* (26) | Incorporated by Reference | |||
10 | (f)(iv) | Form of Notice of Grant of Stock Options and Option Agreement (for grants under Digi International Inc. 2017 Omnibus Incentive Plan)* (27) | Incorporated by Reference | |||
10 | (g) | Incorporated by Reference | ||||
10 | (h) | Incorporated by Reference | ||||
10 | (i) | Incorporated by Reference | ||||
10 | (j) | Incorporated by Reference | ||||
10 | (k) | Incorporated by Reference | ||||
10 | (l) | Incorporated by Reference | ||||
10 | (m) | Incorporated by Reference | ||||
21 | Filed Electronically | |||||
Exhibit Number | Description | Method of Filing | ||||
23 | (a) | Filed Electronically | ||||
23 | (b) | Filed Electronically | ||||
24 | Filed Electronically | |||||
31 | (a) | Filed Electronically | ||||
31 | (b) | Filed Electronically | ||||
32 | Filed Electronically | |||||
101.INS | XBRL Instance Document | Filed Electronically | ||||
101.SCH | XBRL Taxonomy Extension Schema Document | Filed Electronically | ||||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | Filed Electronically | ||||
101.DEF | XBRL Taxonomy Definition Linkbase Document | Filed Electronically | ||||
101.LAB | XBRL Taxonomy Label Linkbase Document | Filed Electronically | ||||
101.PRE | XBRL Taxonomy Presentation Linkbase Document | Filed Electronically | ||||
* | Certain schedules and exhibits have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request. |
** | Management compensatory contract or arrangement required to be included as an exhibit to this Annual Report on Form 10-K. |
(1) | Incorporated by reference to Exhibit 2.1 to the Company's Form 8-K filed October 29, 2015. |
(2) | Incorporated by reference to Exhibit 2.1 to the Company's Form 8-K filed on October 25, 2017. |
(3) | Incorporated by reference to Exhibit 3(a) to the Company’s Form 10‑K for the year ended September 30, 1993 (File no. 0‑17972). |
(4) | Incorporated by reference to Exhibit 3(b) to the Company's Form 8-K dated August 28, 2017. |
(5) | Incorporated by reference to Exhibit 4(a) to the Company’s Registration Statement on Form 8-A filed on April 25, 2008. |
(6) | Incorporated by reference to Exhibit 4(b) to the Company’s Registration Statement on Form 8-A filed on April 25, 2008. |
(7) | Incorporated by reference to Exhibit 99 to the Company's Registration Statement on Form S-8 filed on March 12, 2014 (File no. 333‑194522). |
(8) | Incorporated by reference to Exhibit 10(a) to the Company's Form 8-K filed on January 29, 2010. |
(9) | Incorporated by reference to Exhibit 10(o) to the Company's Form 10-K for the year ended September 30, 2008. |
(10) | Incorporated by reference to Exhibit 10(e)(ii) to the Company's Form 10-K for the year ended September 30, 2011. |
(11) | Incorporated by reference to Exhibit 99 to the Company’s Registration Statement on Form S-8 filed on April 16, 2013 (File no. 333-187949). |
(12) | Incorporated by reference to Exhibit 10(a)(i) to the Company’s Form 10-Q for the quarter ended March 31, 2013. |
(13) | Incorporated by reference to Exhibit 10(a)(ii) to the Company’s Form 10-Q for the quarter ended March 31, 2013. |
(14) | Incorporated by reference to Exhibit 99 to the Company’s Registration Statement on Form S-8 filed on March 12, 2014 (File no. 333‑194518). |
(15) | Incorporated by reference to Exhibit 10(b)(i) to the Company’s Form 10-Q for the quarter ended March 31, 2014. |
(16) | Incorporated by reference to Exhibit 10(b)(ii) to the Company’s Form 10-Q for the quarter ended March 31, 2014. |
(17) | Incorporated by reference to Exhibit 10(a) to the Company’s Form 10-Q for the quarter ended June 30, 2014. |
(18) | Incorporated by reference to Appendix A to the Company’s definitive proxy statement on Schedule 14A filed December 11, 2015. |
(19) | Incorporated by reference to Exhibit 10(a)(i) to the Company’s Form 10-Q for the quarter ended March 31, 2016. |
(20) | Incorporated by reference to Exhibit 10(a)(ii) to the Company’s Form 10-Q for the quarter ended March 31, 2016. |
(21) | Incorporated by reference to Exhibit 10(a)(iii) to the Company’s Form 10-Q for the quarter ended March 31, 2016. |
(22) | Incorporated by reference to Exhibit 10(a)(iv) to the Company’s Form 10-Q for the quarter ended March 31, 2016. |
(23) | Incorporated by reference to Appendix A to the Company's definitive proxy statement on Schedule 14A filed December 16, 2016. |
(24) | Incorporated by reference to Exhibit 10(b)(i) to the Company's Form 10-Q for the quarter ended March 31, 2017. |
(25) | Incorporated by reference to Exhibit 10(b)(ii) to the Company's Form 10-Q for the quarter ended March 31, 2017. |
(26) | Incorporated by reference to Exhibit 10(b)(iii) to the Company's Form 10-Q for the quarter ended March 31, 2017. |
(27) | Incorporated by reference to Exhibit 10(b)(iv) to the Company's Form 10-Q for the quarter ended March 31, 2017. |
(28) | Incorporated by reference to Exhibit 10 to the Company’s Form 10‑Q for the quarter ended June 30, 2010. |
(29) | Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K dated December 3, 2014. |
(30) | Incorporated by reference to Exhibit 10(o) to the Company's Form 10-Q for the quarter ended June 30, 2007 (File no. 0-17972). |
(31) | Incorporated by reference to Exhibit 10(l) to the Company's Form 10-K for the year ended September 30, 2013. |
(32) | Incorporated by reference to Exhibit 10(m) to the Company's Form 10-K for the year ended September 30, 2013. |
(33) | Incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed March 26, 2015. |
(34) | Incorporated by reference to Exhibit 10(a) to the Company's Form 10-Q for the quarter ended March 31, 2017. |
DIGI INTERNATIONAL INC. | |
By: /s/ Ronald E. Konezny Ronald E. Konezny President, Chief Executive Officer and Director |
By: /s/ Ronald E. Konezny Ronald E. Konezny President, Chief Executive Officer and Director (Principal Executive Officer) |
By: /s/ Michael C. Goergen Michael C. Goergen Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) |
By:* William N. Priesmeyer Director |
By:* Satbir Khanuja Director |
By:* Ahmed Nawaz Director |
By:* Girish Rishi Director |
By:* Spiro Lazarakis Director |
* | Ronald E. Konezny, by signing his name hereto, does hereby sign this document on behalf of each of the above named directors of the Registrant pursuant to Powers of Attorney duly executed by such persons. |
By: /s/ Ronald E. Konezny Ronald E. Konezny Attorney-in-fact |
Additions | ||||||||||||||||||||||
Description | Balance at beginning of period | Charged to costs and expenses | Charged to Other Accounts | Deductions | Balance at end of period | |||||||||||||||||
Valuation allowance - deferred tax assets | ||||||||||||||||||||||
September 30, 2017 | $ | 5,914 | $ | 136 | $ | — | $ | 98 | $ | 5,952 | ||||||||||||
September 30, 2016 | $ | 862 | $ | 5,260 | $ | — | $ | 208 | $ | 5,914 | ||||||||||||
September 30, 2015 | $ | 572 | $ | 316 | $ | — | $ | 26 | $ | 862 | ||||||||||||
Valuation account - doubtful accounts | ||||||||||||||||||||||
September 30, 2017 | $ | 209 | $ | 127 | $ | 20 | (1) | $ | 15 | (2) | $ | 341 | ||||||||||
September 30, 2016 | $ | 285 | $ | 10 | $ | — | $ | 86 | (2) | $ | 209 | |||||||||||
September 30, 2015 | $ | 367 | $ | 4 | $ | — | $ | 86 | (2) | $ | 285 | |||||||||||
Reserve for future returns and pricing adjustments | ||||||||||||||||||||||
September 30, 2017 | $ | 1,991 | $ | 10,447 | $ | — | $ | 10,269 | $ | 2,169 | ||||||||||||
September 30, 2016 | $ | 1,817 | $ | 9,946 | $ | — | $ | 9,772 | $ | 1,991 | ||||||||||||
September 30, 2015 | $ | 1,662 | $ | 7,002 | $ | — | $ | 6,847 | $ | 1,817 |
(1) | Established through purchase accounting relating to the acquisition of SMART Temps |
(2) | Uncollectible accounts charged against allowance, net of recoveries |
Name | Jurisdiction | |
Digi International Canada Inc. | Ontario, Canada | |
Digi International GmbH | Germany | |
Digi International (HK) Ltd. | Hong Kong | |
Digi International Kabushikikaisha | Japan | |
Digi International Limited | United Kingdom | |
Digi International SARL | France | |
Digi International Spain S.A. | Spain | |
Digi International Wireless Design Services Inc. | Minnesota, United States | |
Digi m2m Solutions India Pvt. Ltd. | India | |
Digi Wireless Singapore Pte. Ltd. | Singapore | |
FreshTemp, LLC | Pennsylvania, United States | |
ITK International Inc. | Delaware, United States | |
SMART Temps, L.L.C. | Indiana, United States | |
TempAlert, LLC | Delaware, United States |
/s/ Satbir Khanuja | ||
Satbir Khanuja |
/s/ Ronald E. Konezny | ||
Ronald E. Konezny |
/s/ Spiro C. Lazarakis | ||
Spiro C. Lazarakis |
/s/ Ahmed Nawaz | ||
Ahmed Nawaz |
/s/ William N. Priesmeyer | ||
William N. Priesmeyer |
/s/ Girish Rishi | ||
Girish Rishi |
November 22, 2017 | /s/ Ronald E. Konezny | |||
Ronald E. Konezny | ||||
President, Chief Executive Officer and Director |
November 22, 2017 | /s/ Michael C. Goergen | |||
Michael C. Goergen | ||||
Senior Vice President, Chief Financial Officer and Treasurer |
November 22, 2017 | ||||
/s/ Ronald E. Konezny | ||||
Ronald E. Konezny | ||||
President, Chief Executive Officer and Director | ||||
November 22, 2017 | ||||
/s/ Michael C. Goergen | ||||
Michael C. Goergen | ||||
Senior Vice President, Chief Financial Officer and Treasurer |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Nov. 17, 2017 |
Mar. 31, 2017 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | DIGI INTERNATIONAL INC. | ||
Entity Central Index Key | 0000854775 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 26,664,418 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 310,320,069 |
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|||||
Revenue: | |||||||
Hardware product | $ 166,480 | $ 196,101 | $ 195,497 | ||||
Services and solutions | 15,154 | 6,904 | 8,350 | ||||
Total revenue | 181,634 | 203,005 | 203,847 | ||||
Cost of sales: | |||||||
Cost of hardware product | 85,369 | 97,776 | 99,842 | ||||
Cost of services and solutions | 7,647 | 4,662 | 5,571 | ||||
Amortization | 1,444 | 887 | 1,313 | ||||
Total cost of sales | 94,460 | 103,325 | 106,726 | ||||
Gross profit | 87,174 | 99,680 | 97,121 | ||||
Operating expenses: | |||||||
Sales and marketing | 33,955 | 33,847 | 37,574 | ||||
Research and development | 28,566 | 30,955 | 29,949 | ||||
General and administrative | 13,331 | 17,026 | 18,306 | ||||
Restructuring charges, net | 2,515 | 747 | 403 | ||||
Total operating expenses | 78,367 | 82,575 | 86,232 | ||||
Operating income | 8,807 | 17,105 | 10,889 | ||||
Other income (expense), net: | |||||||
Interest income | 656 | 545 | 218 | ||||
Interest expense | (48) | (291) | (4) | ||||
Other income (expense), net | 76 | (669) | 2,014 | ||||
Total other income (expense), net | 684 | (415) | 2,228 | ||||
Income from continuing operations, before income taxes | 9,491 | 16,690 | 13,117 | ||||
Income tax provision | 125 | 3,212 | 3,684 | ||||
Income from continuing operations | 9,366 | 13,478 | 9,433 | ||||
Income (loss) from discontinued operations, after income taxes | 0 | 3,230 | (2,845) | ||||
Net income | $ 9,366 | $ 16,708 | $ 6,588 | ||||
Basic net income (loss) per common share: | |||||||
Continuing operations | $ 0.35 | $ 0.52 | $ 0.38 | ||||
Discontinued operations | 0.00 | 0.13 | (0.12) | ||||
Net income (1) | 0.35 | 0.65 | 0.27 | [1] | |||
Diluted net income (loss) per common share: | |||||||
Continuing operations | 0.35 | 0.51 | 0.37 | ||||
Discontinued operations | 0.00 | 0.12 | (0.11) | ||||
Net income (1) | $ 0.35 | $ 0.64 | [1] | $ 0.26 | |||
Weighted average common shares: | |||||||
Basic (shares) | 26,432 | 25,760 | 24,645 | ||||
Diluted (shares) | 27,099 | 26,311 | 25,227 | ||||
|
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||||
Statement of Comprehensive Income [Abstract] | ||||||||
Net income | $ 9,366 | $ 16,708 | $ 6,588 | |||||
Other comprehensive income (loss), net of tax: | ||||||||
Foreign currency translation adjustment | 2,041 | (2,107) | (4,323) | |||||
Change in net unrealized (loss) gain on investments | (14) | 53 | (21) | |||||
Less income tax benefit (provision) | 5 | (20) | 7 | |||||
Reclassification of realized (gain) loss on investments included in net income (1) | [1] | 0 | (7) | 1 | ||||
Less income tax benefit (2) | [2] | 0 | 3 | 0 | ||||
Other comprehensive income (loss), net of tax | 2,032 | (2,078) | (4,336) | |||||
Comprehensive income | $ 11,398 | $ 14,630 | $ 2,252 | |||||
|
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2017 |
Sep. 30, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 33,007,993 | 32,471,175 |
Treasury stock, shares | 6,436,578 | 6,430,797 |
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Description We are a leading global provider of business and mission-critical and Internet of Things (IoT) connectivity products and services. We help our customers create next-generation connected products and deploy and manage critical communications infrastructures in demanding environments with high levels of security and reliability. As of the fiscal quarter ended June 30, 2017, we determined that we have two reportable operating segments for purposes of ASC 280-10-50 "Segments Reporting": (i) machine-to-machine (M2M), and (ii) Solutions. Our M2M segment consists primarily of distinct communications products and communication product development services. Among other things, these products and services help our customers create next generation connected products and deploy and manage critical communications infrastructures in demanding environments with high levels of security and reliability. We create secure, easy to implement embedded solutions and services to help customers build IoT connectivity. We also deploy ready to use, complete box solutions to connect remote equipment. We also offer dedicated professional services for the design of specialized wireless communications products for customers. Finally, through this segment we offer managed cloud services that enable customers to capture and manage data from devices they connect to networks. The products and services of this segment are used by a wide range of businesses and institutions. Our Solutions segment offers wireless temperature and other environmental condition monitoring services as well as employee task management services. These products and services are provided to food service, transportation, education, healthcare and pharma, and industrial markets which are marketed as Digi Smart Solutions™. Discontinued Operations On October 23, 2015, we sold all of the outstanding stock of our wholly owned subsidiary, Etherios Inc. (Etherios) to West Monroe Partners, LLC. Because the sale of Etherios represented a strategic shift that will have a major effect on our operations and financial results, we have classified our Etherios business as discontinued operations, which requires retrospective application to financial information for all periods presented. Since the cost of segregating the consolidated statement of cash flows outweighed the benefits, we elected not to segregate our consolidated statement of cash flows as the material items in the operating and investing sections are disclosed in Note 3 to our Consolidated Financial Statements. Principles of Consolidation The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Reclassifications Certain prior year amounts have been reclassified to conform to our fiscal 2017 presentation. On the Consolidated Balance Sheet for the period ended September 30, 2016, unearned revenue has been reclassified from other current liabilities to its own respective line item. We have reclassified current income taxes payable to other current liabilities. Beginning in the third fiscal quarter of 2017, we renamed our service revenue and cost of sales to be more descriptive to services and solutions revenue and services and solutions cost of sales. Beginning with this annual report on Form 10-K, we will also report the amortization within cost of sales on its own respective line item. On the Consolidated Statement of Operations for the year ended September 30, 2016 and 2015, we have reclassified the cost of sales sections to conform to this presentation. Total revenue and cost of sales remain unchanged. These reclassifications had no impact on our consolidated net sales or our consolidated net income. Cash Equivalents Cash equivalents consist of money market accounts and other highly liquid investments purchased with an original maturity of three months or less. The carrying amounts approximate fair value due to the short maturities of these investments. We maintain our cash and cash equivalents in bank accounts which, at times, may exceed federally insured limits. We have not experience any losses in such accounts. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Marketable Securities Marketable securities consist of certificates of deposit, commercial paper, corporate bonds and government municipal bonds. All marketable securities are accounted for as available-for-sale and are carried at fair value on our consolidated balance sheets with unrealized gains and losses recorded in accumulated other comprehensive loss within stockholders’ equity. In order to estimate the fair value for each security in our investment portfolio, we obtain quoted market prices and trading activity for each security where available. We obtain relevant information from our investment advisor and, if warranted, also may review the financial solvency of certain security issuers. We regularly monitor and evaluate the value of our marketable securities. When assessing marketable securities for other-than-temporary declines in value, we consider several factors. These factors include: how significant the decline in value is as a percentage of the original cost, how long the market value of the investment has been less than its original cost, the underlying factors contributing to a decline in the prices of securities in a single asset class, the performance of the issuer’s stock price in relation to the stock price of its competitors within the industry, expected market volatility, analyst recommendations, the views of external investment managers, any news or financial information that has been released specific to the investee and the outlook for the overall industry in which the issuer operates. If events and circumstances indicate that a decline in the value of a security has occurred and is other-than-temporary, we would record a charge to other (expense) income. Accounts Receivable Accounts receivable are stated at the amount we expect to collect, which is net of an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The following factors are considered when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, and changes in customer payment terms or practices. In addition, overall historical collection experience, current economic industry trends, and a review of the current status of trade accounts receivable are considered when determining the required allowance for doubtful accounts. Based on our assessment, we provide for estimated uncollectible amounts through a charge to earnings and a credit to our allowance for doubtful accounts. Balances that remain outstanding after we have used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to accounts receivable. Inventories Inventories are stated at the lower of cost or fair market value, with cost determined using the first-in, first-out method. Appropriate consideration is given to deterioration, obsolescence and other factors in evaluating fair market value. Property, Equipment and Improvements, Net Property, equipment and improvements are carried at cost, net of accumulated depreciation. Depreciation is provided by charges to operations using the straight-line method over the estimated asset useful lives. Furniture and fixtures, purchased software and other equipment are depreciated over a period of three to seven years. Building improvements and buildings are depreciated over ten and thirty-nine years, respectively. Expenditures for maintenance and repairs are charged to operations as incurred, while major renewals and betterments are capitalized. The assets and related accumulated depreciation accounts are adjusted for asset retirements and disposals with the resulting gain or loss included in operations. Identifiable Intangible Assets Purchased proven technology, license agreements, covenants not to compete and other identifiable intangible assets are recorded at fair value when acquired in a business acquisition, or at cost when not purchased in a business acquisition. All other identifiable intangible assets are amortized on either a straight-line basis over their estimated useful lives of three to thirteen years or based on the pattern in which the asset is consumed. Useful lives for identifiable intangible assets are estimated at the time of acquisition based on the periods of time from which we expect to derive benefits from the identifiable intangible assets. Amortization of purchased and core technology is included in cost of sales in the Consolidated Statements of Operations. Amortization of all other acquired identifiable intangible assets is charged to operating expenses as a component of general and administrative expense. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Identifiable intangible assets are reviewed for impairment annually or whenever events or circumstances indicate that undiscounted expected future cash flows are not sufficient to recover the carrying value amount. We measure impairment loss by utilizing an undiscounted cash flow valuation technique using fair values indicated by the income approach. Impairment losses, if any, would be recorded in the period the impairment is identified. There were no material impairments identified in fiscal 2017, 2016 or 2015. Goodwill Goodwill represents the excess of cost over the fair value of identifiable assets acquired. Goodwill is tested for impairment on an annual basis as of June 30, or more frequently if events or circumstances occur which could indicate impairment. The calculation of goodwill impairment requires us to make assumptions about the fair value of our reporting unit(s), which historically has been approximated by using our market capitalization plus a control premium for our reporting unit(s). Control premium assumptions require judgment and actual results may differ from assumed or estimated amounts. As of the third quarter of fiscal 2017, we determined that we have two reportable operating segments, our Solutions segment and our M2M segment (see Note 5 to the Condensed Consolidated Financial Statements). As a result, we concluded that the Solutions segment and the M2M segment constitute separate reporting units for purposes of the ASC 350-20-35 "Goodwill Measurement of Impairment" assessment and both units were tested individually for impairment. Our test for potential goodwill impairment is a two-step approach. First, we estimate the fair values for each reporting unit by comparing the fair value to the carrying value. If the carrying value of the reporting unit exceeds its estimated fair value, then we conduct the second step, which requires us to measure the amount of the impairment loss. The impairment loss, if any, is calculated by comparing the implied fair value of the goodwill to its carrying amount. To calculate the implied fair value of goodwill, the fair value of the reporting unit’s assets and liabilities, excluding goodwill, is estimated. The excess of the fair value of the reporting unit over the amount assigned to its assets and liabilities, excluding goodwill, is the implied fair value of the reporting unit’s goodwill. At June 30, 2017, we had a total of $98.6 million of goodwill on our Condensed Consolidated Balance Sheet for the M2M reporting unit and the implied fair value of this reporting unit exceeded its carrying value by approximately 7%. At June 30, 2017, we had a total of $32.5 million of goodwill on our Condensed Consolidated Balance Sheet for the Solutions reporting unit and the implied fair value of this reporting unit exceeded its carrying value by approximately 8%. Based on that data, we concluded that no impairment was indicated for either reporting unit and we were not required to complete the second step of the goodwill impairment analysis. No goodwill impairment charges were recorded. During the fourth quarter of fiscal 2017, we assessed various qualitative factors to determine whether or not an additional goodwill impairment assessment was required as of September 20, 2017, and we concluded that no additional impairment assessment was required. Implied fair values, for both reporting units were each calculated on a standalone basis using a weighted combination of the income approach and market approach. The income approach indicates the fair value of a business based on the value of the cash flows the business or asset can be expected to generate in the future. A commonly used variation of the income approach used to value a business is the discounted cash flow (DCF) method. The DCF method is a valuation technique in which the value of a business is estimated on the earnings capacity, or available cash flow, of that business. Earnings capacity represents the earnings available for distribution to capital holders after consideration of the reinvestment required for future growth. Significant judgment is required to estimate the amount and timing of future cash flows for each reporting unit and the relative risk of achieving those cash flows. The market approach indicates the fair value of a business or asset based on a comparison of the business or asset to comparable publicly traded companies or assets and transactions in its industry as well as prior company or asset transactions. This approach can be estimated through the guideline company method. This method indicates fair value of a business by comparing it to publicly traded companies in similar lines of business. After identifying and selecting the guideline companies, we make judgments about the comparability of the companies based on size, growth rates, profitability, risk, and return on investment in order to estimate market multiples. These multiples are then applied to the reporting units to estimate a fair value. In addition, the implied fair values of each reporting unit were added together to get an indicated value of total equity to which a range of indicated value of total equity was derived. This range was compared to the total market capitalization of 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) $269.4 million as of June 30, 2017, which implied a range of control premiums of 16.6% to 24.4%. This range of control premiums falls below the control premiums observed in the last five years in the communications equipment industry. As a result, the market capitalization reconciliation analysis proved support for the reasonableness of the fair values estimated for each individual reporting unit. Should the facts and circumstances surrounding our assumptions change, the first step of our goodwill impairment analysis may fail. Assumptions and estimates to determine fair values are complex and often subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts. For example, if our future operating results do not meet current forecasts or if we experience a sustained decline in our market capitalization that is determined to be indicated of a reduction in fair value of one or more of our reporting units, we may be required to record future impairment charges for goodwill. An impairment could have a material effect on our consolidated balance sheet and results of operations. We have had no goodwill impairment losses since the adoption of Accounting Standards Codification (ASC) 350, Intangibles-Goodwill and Others, in fiscal 2003. Contingent Consideration We measure our contingent consideration liabilities recognized in connection with business combinations at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy as defined in ASC 820 "Fair Value Measurement". We used a probability-weighted discounted cash flow approach as a valuation technique to determine the fair value of the contingent consideration on the acquisition date. At each subsequent reporting period, the fair value is re-measured with the change in fair value recognized in general and administrative expense and interest expense in our Condensed Consolidated Statements of Operations. Amounts, if any, paid to the seller in excess of the amount recorded on the acquisition date will be classified as cash flows used in operating activities. Payments to the seller not exceeding the acquisition-date fair value of the contingent consideration will be classified as cash flows used in financing activities. Warranties In general, we warrant our hardware products to be free from defects in material and workmanship under normal use and service. The warranty periods generally range from one to five years. We typically have the option to either repair or replace hardware products we deem defective with regard to material or workmanship. Estimated warranty costs are accrued in the period that the related revenue is recognized based upon an estimated average per unit repair or replacement cost applied to the estimated number of units under warranty. These estimates are based upon historical warranty incidents and are evaluated on an ongoing basis to ensure the adequacy of the warranty accrual. Treasury Stock We record treasury stock at cost. Treasury stock includes shares purchased from employees for tax withholding purposes related to vesting of restricted stock awards. Revenue Recognition We recognize revenue in accordance with authoritative guidance issued by Financial Accounting Standards Board (FASB) related to revenue recognition. Hardware product revenue as a percentage of total revenue was 91.7%, 96.6% and 95.9% in fiscal 2017, 2016 and 2015, respectively. We recognize hardware product revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, collectability is reasonably assured and there are no post-delivery obligations, other than warranty. Under these criteria, product revenue generally is recognized upon shipment of product to customers. Sales to authorized domestic and foreign distributors and Direct / OEMs are made with certain rights of return and price adjustment provisions. Estimated reserves for future returns and pricing adjustments are established by us based on an analysis of historical patterns of returns and price adjustments as well as an analysis of authorized returns compared to received returns and distribution sales for the current period. Estimated reserves for future returns and price adjustments are charged against revenue in the same period as the corresponding revenue is recorded. Service revenue as a percentage of total revenue represented 8.3%, 3.4% and 4.1% in fiscal 2017, 2016 and 2015, respectively. Our service revenue is derived primarily from our Digi Wireless Design Services and our Digi Smart Solutions™. Our Digi Smart Solutions™ revenue includes subscription revenue, support and equipment. Our equipment and implementation fees are 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) recorded as a sale up–front due to these items having stand–alone value to the customer because the customer can utilize our equipment with other monitoring services or use our monitoring services with hardware purchased from other vendors. Our installation charges are recorded when the product is installed. Our subscription revenue is recorded on a monthly basis. These subscriptions are generally for one year, but can be as long as three years, and may contain an evergreen renewal provision. Generally, our subscription renewal charges per month are the same as the original contract term. We also have some service revenue that is derived from our Digi Remote Manager®, which is a platform-as-a-service (PaaS) offering in which customers pay for services consumed in terms of devices being managed and monitored, or as a monthly service fee for access to information. In addition, we recognize small amounts of revenue from our support services which is recognized over the life of the contract, and training as the services are performed. We recognize service revenue from our Digi Wireless Design Services, Digi Smart Solutions™ and Digi Remote Manager® based upon performance, including final product delivery and customer acceptance. Research and Development Research and development costs are expensed when incurred. Research and development costs include compensation, allocation of corporate costs, depreciation, utilities, professional services and prototypes. Software development costs are expensed as incurred until the point that technological feasibility and proven marketability of the product are established. To date, the time period between the establishment of technological feasibility and completion of software development has been short, and no significant development costs have been incurred during that period. Accordingly, we have not capitalized any software development costs to date. Income Taxes Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Income tax expense is equal to the tax payable for the period and the change during the period in deferred tax assets and liabilities and also changes in income tax reserves. Stock-Based Compensation Stock-based compensation expense represents the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. This cost must be recognized over the period during which an employee is required to provide the service (usually the vesting period). Foreign Currency Translation Financial position and results of operations of our international subsidiaries are measured using local currencies as the functional currency, except for our Singapore location which uses the U.S. Dollar as its functional currency. Assets and liabilities of these operations are translated at the exchange rates in effect at the end of each reporting period. For our larger international subsidiaries, statements of operations accounts are translated at the daily rate. For all other international subsidiaries, our statements of operations accounts are translated at the weighted average rates of exchange prevailing during each reporting period. Translation adjustments arising from the use of differing currency exchange rates from period to period are included in accumulated other comprehensive loss in stockholders’ equity. Gains and losses on foreign currency exchange transactions, as well as translation gains or losses on transactions denominated in currencies other than an entity’s functional currency, are reflected in the statement of operations. During fiscal 2017, 2016 and 2015, there were net transaction gains (losses) of $0.1 million, $(0.7) million and $0.6 million, respectively, that were recorded in other income (expense), net. We manage our net asset or net liability position for U.S. dollar accounts in our foreign locations to reduce our foreign currency risk. We have not implemented a formal hedging strategy. Use of Estimates and Risks and Uncertainties The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates that could significantly affect our results of operations or financial condition involve the assignment of fair values upon acquisition of goodwill and other intangible assets and testing for impairment; the determination of our allowance for doubtful accounts and reserve for future 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) returns and pricing adjustments; the estimation of our inventory obsolescence, warranty reserve, income tax reserves, contingent consideration and other contingencies. Comprehensive Income Our comprehensive income is comprised of net income, foreign currency translation adjustments and unrealized gains and losses on available-for-sale marketable securities, which are charged or credited to the accumulated other comprehensive loss account in stockholders’ equity. Net Income Per Common Share Basic net income per common share is calculated based on the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares of our stock result from dilutive common stock options and restricted stock units. We use the treasury stock method to calculate the weighted-average shares used in the diluted earnings per share computation. Under the treasury stock method, the proceeds from exercise of an option, the amount of compensation cost, if any, for future service that we have not yet recognized, and the amount of estimated tax benefits that would be recorded in paid-in capital, if any, when the option is exercised are assumed to be used to repurchase shares in the current period. The following table is a reconciliation of the numerators and denominators in the net income per common share calculations (in thousands, except per common share data):
(1) Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts. Because their effect would be anti-dilutive at period end, certain potentially dilutive shares related to stock options to purchase common shares were excluded in the above computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of our common shares. At September 30, 2017, 2016 and 2015, such excluded stock options were 1,142,322, 1,519,691 and 3,016,911, respectively. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Recent Accounting Developments Adopted In April 2015, FASB issued Accounting Standards Update (ASU) 2015-05, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement." The new standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If the arrangement does include a software license, the software license element of the arrangement should be accounted for in the same manner as the acquisition of other software licenses. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. We adopted this guidance prospectively beginning with our fiscal quarter ended December 31, 2016. The adoption of this standard did not have a material impact on our consolidated financial statements. In August 2014, FASB issued ASU 2014-15, "Presentation of Financial Statements - Going Concern." This guidance requires management to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. These amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. We adopted this guidance for our fiscal year ended September 30, 2017. The adoption of this standard did not have a material impact on our consolidated financial statements. Not Yet Adopted In May 2017, the Financial Accounting Standards Board (FASB) issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting." ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017, which for us is the first quarter ending December 31, 2018. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact to our consolidated financial statements. In March 2017, FASB issued ASU 2017-08, "Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities." The amendments in this update shorten the amortization period for certain callable debt securities that are held at a premium. The amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount, which would be amortized to maturity. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018, which for us is the first quarter ending December 31, 2019. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In January 2017, FASB issued ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." ASU 2017-04 eliminates the second step in the goodwill impairment test which requires an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The standard, which should be applied prospectively, is effective for fiscal years beginning after December 15, 2019, which for us is our fiscal year ending September 30, 2021. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2017-04 on our consolidated financial statements. In August 2016, FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments." The amendments in this update provide guidance on eight specific cash flow issues, thereby reducing the diversity in practice in how certain transaction are classified in the statement of cash flows. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2017, which for us is the first quarter ending December 31, 2018. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2016-15 on our consolidated financial statements. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments." The amendments in this update replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2019, which for us is the first quarter ending December 31, 2020. Entities may early adopt beginning after December 15, 2018. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements. In March 2016, FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting." This update includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016, which for us is the first fiscal quarter ending December 31, 2017. Early adoption is permitted. We adopted ASU 2016-09 on October 1, 2017. Upon adoption, there was no material impact on our consolidated financial statements. Prospectively, beginning October 1, 2017, excess tax benefits and tax deficiencies will be reflected as income tax benefit or expense in our Consolidated Statement of Operations and could result in a material impact. The extent of the excess tax benefits or tax deficiencies are subject to variation in our stock price and the timing of restricted stock unit (RSU) vestings and employee stock option exercises. In February, 2016, FASB issued ASU 2016-02, "Leases (Topic 842)", which amends the existing guidance to require lessees to recognize lease assets and lease liabilities from operating leases on the balance sheet. This ASU is effective using the modified retrospective approach for annual periods and interim periods within those annual periods beginning after December 15, 2018, which for us is the first fiscal quarter ending December 31, 2019. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements. In January 2016, FASB issued ASU 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 will require equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income. The amendments in this update will also simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, eliminate the requirement for public business entities to disclose the method and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet and require these entities to use the exit price notion when measuring fair value of financial instruments for disclosure purposes. This ASU would also change the presentation and disclosure requirements for financial instruments. In addition, this ASU clarifies the guidance related to valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, which for us is the first fiscal quarter ending December 31, 2018. Early adoption is permitted for financial statements of fiscal years and interim periods that have not been issued. We are currently evaluating the impact of the adoption of ASU 2016-01. In July 2015, FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory." This provision would require inventory that was previously recorded using first-in, first-out (FIFO) to be recorded at lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those years. We adopted this guidance beginning with our fiscal quarter ending December 31, 2017. The amendments in this guidance should be applied prospectively with earlier application permitted as of the beginning of an interim or annual period. We do not expect the adoption of ASU 2015-11 to have a material impact on our consolidated financial statements. In May 2014, FASB issued ASU 2014-09, "Revenue from Contracts with Customers." This guidance provides a five-step analysis in determining when and how revenue is recognized so that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods and services. It also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14 "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date" which approved a one-year deferral of the effective date of ASU 2014-09. As a result of this deferral, ASU 2014-09 is effective for our fiscal year ending September 30, 2019, including interim periods within that reporting period. In addition, the FASB issued ASU 2016-08, ASU 2016-10 and ASU 2016-12 in March 2016, April 2016 and May 2016, respectively, to provide interpretive clarifications on the new guidance in ASC Topic 606. We are currently working through an adoption plan and have identified our revenue streams and completed 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) a preliminary analysis of how we currently account for revenue transactions compared to the revenue accounting required under the new standard. We intend to complete our adoption plan by December 31, 2017. This plan includes a review of transactions supporting each revenue stream to determine the impact of accounting treatment under ASC 606, evaluation of the method of adoption, and completing a rollout plan for implementation of the new standard with affected functions in our organization. Because of the nature of the work that remains, at this time we are unable to reasonably estimate the impact of adoption on our consolidated financial statements. We plan to adopt the new guidance beginning with our fiscal quarter ending December 31, 2018. |
Acquisition |
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ACQUISITION | ACQUISITIONS On May 4, 2017, we announced the rebranding of our Digi Cold Chain Solutions to Digi Smart Solutions™. Acquisition of SMART Temps, LLC On January 9, 2017, we purchased all of the outstanding interests of SMART Temps, LLC (SMART Temps), an Indiana-based provider of real-time temperature management for pharmacies, education, and hospital settings as well as real-time temperature management for blood bank, laboratory environments, restaurants, and grocery. We believe this is a complementary acquisition for us as the acquired technology will continue to be supported to further enhance our portfolio of products for the Solutions segment (see Note 5 to our Consolidated Financial Statements). The terms of the acquisition included an upfront cash payment together with future earn-out payments. Cash of $28.8 million (excluding cash acquired of $0.5 million) was paid at time of closing. The earn-out payments are scheduled to be paid after December 31, 2017 which is the end of the earn-out period. The cumulative amount of these earn-out payments will not exceed $7.2 million. We determined that the earn-out would be considered as part of the purchase price consideration because there was no continuing employment requirements associated with the earn-out. The fair value of this contingent consideration was $10,000 at the date of acquisition and zero at September 30, 2017 (see Note 8 to the Consolidated Financial Statements). The purchase price was allocated to the estimated fair value of assets acquired and liabilities assumed. The final purchase price allocation resulted in the recognition of $18.8 million of goodwill. For tax purposes, this acquisition is treated as an asset acquisition, therefore the goodwill is deductible. We believe that the acquisition resulted in the recognition of goodwill because this is a complementary acquisition for us and will provide a source of recurring revenue in a new vertically focused Solutions segment. The SMART Temps acquisition has been accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed pursuant to the purchase agreement be recognized at fair value as of the acquisition date. The following table summarizes the final values of SMART Temps assets acquired and liabilities assumed as of the acquisition date (in thousands):
2. ACQUISITIONS (CONTINUED) Operating results for SMART Temps from January 9, 2017 forward are included in our Consolidated Statements of Operations. The Consolidated Balance Sheet as of September 30, 2017 reflects the final allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. As of the date of acquisition, the weighted average useful life for all the identifiable intangibles listed above was 5.9 years. For purposes of determining fair value, the purchased and core technology identified above is assumed to have a useful life of five years, the customer relationships are assumed to have useful lives of seven years, the trade name and trademarks are assumed to have useful lives of five years and the non-compete agreements are assumed to have useful lives of five years. Useful lives for identifiable intangible assets are estimated at the time of acquisition based on the periods of time from which we expect to derive benefits from the identifiable intangible assets. The amounts of revenue and net loss included in the Consolidated Statements of Operations from the acquisition date of January 9, 2017 were $5.5 million and $(1.2) million, respectively. Costs directly related to the acquisition, including legal, accounting and valuation fees of approximately $0.8 million have been charged directly to operations and are included in general and administrative expense in our Consolidated Statements of Operations. The following consolidated pro forma information is as if the acquisition had occurred on October 1, 2015 (in thousands):
Pro forma income from continuing operations and net income were both adjusted to exclude interest expense related to debt that was paid off prior to acquisition, adjust amortization to the fair value of the intangibles acquired and remove any costs that SMART Temps incurred associated with the sale transaction. Acquisition of FreshTemp, LLC On November 1, 2016, we purchased all of the outstanding interests of FreshTemp, LLC (FreshTemp), a Pittsburgh-based provider of temperature monitoring and automated task management solutions for the food industry. We believe this is a complementary acquisition for us as the acquired technology will continue to be supported to create an advanced portfolio of products for the Solutions segment. The terms of the acquisition included an upfront cash payment together with future earn-out payments and a holdback amount. Cash of $1.7 million was paid at time of closing. The earn-out payments are based on revenue related to certain customer contracts entered into by June 30, 2017. The fair value of this contingent consideration was $1.3 million at the date of acquisition and $0.4 million at September 30, 2017 (see Note 8 to the Consolidated Financial Statements). The final calculation date will be on June 30, 2018. The cumulative amount of these earn-out payments will not exceed $2.3 million. We determined that the earn-out would be considered as part of the purchase price consideration as there was no continuing employment requirements associated with the earn-out. Costs directly related to the acquisition, including legal, accounting and valuation fees, of approximately $60,000 have been charged directly to operations and are included in general and administrative expense in our Condensed Consolidated Statements of Operations. The purchase price was allocated to the estimated fair value of assets acquired and liabilities assumed. The purchase price allocation resulted in the recognition of $2.7 million of goodwill. For tax purposes, this acquisition is treated as an asset acquisition, therefore the goodwill is deductible. We believe that the acquisition resulted in the recognition of goodwill because this is a complementary acquisition for us and will provide a source of recurring revenue in a new vertically focused solutions business. The FreshTemp acquisition has been accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed pursuant to the purchase agreement be recognized at fair value as of the acquisition date. 2. ACQUISITIONS (CONTINUED) The following table summarizes the final values of FreshTemp assets acquired and liabilities assumed as of the acquisition date (in thousands):
Operating results for FreshTemp from November 2, 2016 forward are included in our Consolidated Statements of Operations. The Consolidated Balance Sheet as of September 30, 2017 reflects the final allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The identifiable intangibles values and net working capital values were finalized in the second fiscal quarter of 2017. The weighted average useful life for all the identifiable intangibles listed above is 5.8 years. For purposes of determining fair value, the purchased and core technology identified above is assumed to have a useful life of five years and the customer relationships are assumed to have useful lives of seven years. Useful lives for identifiable intangible assets are estimated at the time of acquisition based on the periods of time from which we expect to derive benefits from the identifiable intangible assets. Since the FreshTemp acquisition occurred close to the beginning of our fiscal 2017, the pro forma amounts were not materially different from actual amounts. Revenue for the year ended September 30, 2017 related to the FreshTemp acquisition was $0.5 million. As our operating costs related to the FreshTemp acquisition are integrated into the Company’s operating income and related earnings per share, the separate FreshTemp amounts are not determinable for fiscal 2017. Pro forma information for fiscal 2016 was not materially different from actual amounts. Acquisition of Bluenica Corporation On October 5, 2015, we purchased all of the outstanding stock of Bluenica Corporation (Bluenica), a company focused on temperature monitoring of perishable goods in the food industry by using wireless sensors, which are installed in grocery and convenience stores, restaurants, and in products during shipment and storage to ensure that quality, freshness and public health requirements are met. This acquisition formed the basis for our Solutions segment. The terms of the acquisition included an upfront cash payment together with earn-out payments. Cash of $2.9 million was paid at time of closing. The earn-out payments are scheduled to be paid in installments over a four-year period based on revenue achievement of the acquired business. Each of the earn-out payments will be calculated based on the revenue performance of the Solutions segment for each respective earn-out period. The cumulative amount of these earn-out payments will not exceed $11.6 million. An additional payment, not to exceed $3.5 million, may also be due depending on revenue performance. The fair value of this contingent consideration was $10.4 million at the date of acquisition and $6.0 million at September 30, 2017 (see Note 8 to the Consolidated Financial Statements). We determined that the earn-out would be considered as part of the purchase price consideration as there was no continuing employment requirements associated with the earn-out. The purchase price was allocated to the estimated fair value of assets acquired and liabilities assumed. The purchase price allocation resulted in the recognition of $11.0 million of goodwill. We believe that the acquisition resulted in the recognition of goodwill because this is a complementary acquisition for us and will provide a source of recurring revenue in a new vertically focused solutions business. Operating results for Bluenica are included in our Consolidated Statements of Operations from October 6, 2015. |
Discontinued Operations Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS On October 23, 2015, we sold all the outstanding stock of our wholly owned subsidiary, Etherios to West Monroe Partners, LLC. We sold Etherios as part of a strategy to focus on providing highly reliable machine connectivity solutions for business and mission-critical application environments. Etherios was included in our single operating segment prior to fiscal 2017. The terms of the sale agreement provide that West Monroe Partners LLC will pay us $3.0 million on October 23, 2016 and $2.0 million on October 23, 2017. The present value of these amounts was included within the total fair value of consideration received. These receivable amounts are unsecured and non-interest bearing. We received $3.0 million in October 2016. The carrying value of the remaining receivable of $2.0 million presented on our Condensed Consolidated Balance Sheet at September 30, 2017 approximates its fair value, which was determined using Level 3 cash flow fair value measurement techniques. We received the second installment of $2.0 million in October 2017. Goodwill was included in the net assets of Etherios based on the relative fair value of Etherios compared to the fair value of the Company, as the Company consisted of a single reporting unit for goodwill impairment testing purposes at the time of disposal. As a condition to the sale agreement, we retained the operating leases in the Dallas and Chicago locations. Digi ceased using these facilities in October 2015 and has sublet the Dallas location to West Monroe Partners, LLC through December 31, 2018. In January 2017, we signed an early-termination agreement along with an immaterial payment to exit our Chicago lease. Also in connection with the sale, we assigned our San Francisco lease to West Monroe Partners, LLC. Income (loss) from discontinued operations, after income taxes, as presented in the Consolidated Statements of Operations for the twelve months ended September 30, 2016 and 2015 is as follows (in thousands):
Income tax benefit on discontinued operations for the twelve months ended September 30, 2016 was $0.5 million, which primarily represented income tax benefits for deductible transaction costs, partially offset by a tax expense for equity awards for which we will not receive a tax deduction. For tax purposes, this transaction resulted in a capital loss, as the tax basis of the Etherios stock was higher than the book basis of the assets that were sold. Since we do not expect to be able to utilize this capital loss in the five year carryforward period, a deferred tax asset offset by a full valuation allowance was recorded in the third quarter of fiscal 2016 upon completion of the capital loss calculation. The following table presents amortization, depreciation and purchases of property, equipment, improvements and certain other intangible assets of the discontinued operations related to Etherios (in thousands):
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Goodwill and other Identifiable Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS, NET | GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS, NET Identifiable Intangible Assets, Net Amortizable identifiable intangible assets, net as of September 30, 2017 and 2016 were comprised of the following (in thousands):
Amortization expense is include in our consolidated statement of operations in cost of sales and general and administrative expense. Amortization expense in cost of sales includes amortization for purchased and core technology and certain patents and trademarks. Amortization expense for fiscal years 2017, 2016 and 2015 was as follows (in thousands):
Estimated amortization expense for the next five years is as follows (in thousands):
Goodwill The changes in the carrying amount of goodwill were (in thousands):
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Segment Information and Major Customers |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION AND MAJOR CUSTOMERS | SEGMENT INFORMATION AND MAJOR CUSTOMERS As of the fiscal quarter ended June 30, 2017, we determined that we now have two reportable operating segments for purposes of ASC 280-10-50 "Segment Reporting": (1) M2M, and (2) Solutions. This determination was made by considering both qualitative and quantitative information. The qualitative information considered during the quarter ended June 30, 2017 included, but was not limited to, the following: the nature of the products 5. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED) and services and customers differ between the two segments, the Chief Operating Decision Maker (CODM) started reviewing both segments’ operating results separately and now makes decisions about the allocation of resources, and discrete financial information is available through operating income (loss) for both segments. During the third quarter of fiscal 2017, the recently acquired Solutions entities financial systems were integrated allowing for the review of discrete financial information for the Solutions segment. In addition, based on current expectations, we now expect the Solutions segment to meet the quantitative thresholds for a separate reporting segment. The financial results of the Solutions entities were previously considered not to meet the quantitative thresholds for a separate reporting segment. Our segments are described below: M2M Our M2M segment is composed of the following communications products and development services:
Solutions We have formed the Solutions segment primarily through four acquisitions: the October 2015 acquisition of Bluenica, the November 2016 acquisition of FreshTemp, the January 2017 acquisition of SMART Temps and the October 2017 acquisition of TempAlert, LLC (TempAlert). Because the acquisition of TempAlert was subsequent to September 30, 2017, it's results are not included in our Consolidated Financial Statements (see Note 19 to our Consolidated Financial Statements). Our Solutions segment offers wireless temperature and other environmental condition monitoring services as well as employee task management services. These products and services are provided to food service, transportation, education, healthcare and pharma, and industrial markets and are marketed as Digi Smart Solutions™. We measure our segment results primarily by reference to revenue and operating income (loss). Solutions revenue includes both product and service revenue. Certain costs incurred at the corporate level are allocated to our segments. These costs include information technology, employee benefits and shared facility services. The information technology and shared facility costs are allocated based on headcount and the employee benefits costs are allocated based on compensation costs. Summary operating results for each of our segments were as follows (in thousands):
5. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED) Total expended for property, plant and equipment was as follows (in thousand):
Total assets for each of our segments were as follows (in thousands):
*Unallocated consists of cash and cash equivalents, current marketable securities and long-term marketable securities. Total goodwill for each of our segments were as follows (in thousands):
Net property, equipment and improvements by geographic location were as follows (in thousands):
The information in the following table provides total consolidated revenue by the geographic location of the customer (in thousands):
Our U.S. export sales represented 37.1%, 38.7% and 39.4% of revenue for the fiscal years ended September 30, 2017, 2016 and 2015. No single customer exceeded 10% of revenue for any of the periods presented. No single customer exceeded 10% of total accounts receivable at September 30, 2017 and 2016. At September 30, 2015, we had two customers, whose accounts receivable balance represented 11.6% and 10.7% of total accounts receivable. |
Selected Balance Sheet Data |
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SELECTED BALANCE SHEET DATA | SELECTED BALANCE SHEET DATA (in thousands)
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Marketable Securities |
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Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MARKETABLE SECURITIES | MARKETABLE SECURITIES Our marketable securities consist of certificates of deposit, commercial paper, corporate bonds and government municipal bonds. We analyze our available-for-sale marketable securities for impairment on an ongoing basis. When we perform this analysis, we consider factors such as the length of time and extent to which the securities have been in an unrealized loss position and the trend of any unrealized losses. We also consider whether an unrealized loss is a temporary loss or an other-than-temporary loss such as: (a) whether we have the intent to sell the security, or (b) whether it is more likely than not that we will be required to sell the security before its anticipated recovery, or (c) permanent impairment due to bankruptcy or insolvency. In order to estimate the fair value for each security in our investment portfolio, we obtain quoted market prices and trading activity for each security where available. We obtain relevant information from our investment advisor and, if warranted, also may review the financial solvency of certain security issuers. As of September 30, 2017, 25 of our 44 securities that we held were trading below our amortized cost basis. We determined each decline in value to be temporary based upon the above described factors. We expect to realize the fair value of these securities, plus accrued interest, either at the time of maturity or when the security is sold. All of our current holdings are classified as available-for-sale marketable securities and are recorded at fair value on our consolidated balance sheet with the unrealized gains and losses recorded in accumulated other comprehensive loss. All of our current marketable securities are scheduled to mature in less than one year and our non-current marketable securities are scheduled to mature in less than two years. We received proceeds from the sale of our available-for-sale marketable securities of $87.1 million, $73.7 million and $38.0 million for fiscal 2017, 2016 and 2015, respectively. At September 30, 2017 our marketable securities consisted of (in thousands):
At September 30, 2016 our marketable securities consisted of (in thousands):
7. MARKETABLE SECURITIES (CONTINUED) The following tables show the fair values and gross unrealized losses of our available-for-sale securities that have been in a continuous unrealized loss position deemed to be temporary, aggregated by investment category (in thousands):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. This standard also establishes a hierarchy for inputs used in measuring fair value. This standard maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability based upon the best information available in the circumstances. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable for the asset or liability and their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 may also include certain investment securities for which there is limited market activity or a decrease in the observability of market pricing for the investments, such that the determination of fair value requires significant judgment or estimation. Fair value is applied to financial assets such as our marketable securities, which are classified and accounted for as available-for-sale and to financial liabilities for contingent consideration. These items are stated at fair value at each reporting period using the above guidance. 8. FAIR VALUE MEASUREMENTS (CONTINUED) The following tables provide information by level for financial assets and liabilities that are measured at fair value on a recurring basis (in thousands):
Our money market funds, which have been determined to be cash equivalents, are measured at fair value using quoted market prices in active markets for identical assets and are therefore classified as Level 1 assets. We value our Level 2 assets using inputs that are based on market indices of similar assets within an active market. There were no transfers into or out of our Level 2 financial assets during the twelve months ended September 30, 2017. The use of different assumptions, applying different judgment to matters that are inherently subjective and changes in future market conditions could result in different estimates of fair value of our securities or contingent consideration, currently and in the future. If market conditions deteriorate, we may incur impairment charges for securities in our investment portfolio. We may also incur changes to our contingent consideration liability as discussed below. As discussed in Note 2, we are required to make contingent payments for our acquisitions. In connection with the Bluenica acquisition, we are required to make contingent payments over a period of up to four years, subject to the Solutions segment achieving specified revenue thresholds. The fair value of the liability for contingent payments recognized upon acquisition was $10.4 million. In connection with the FreshTemp acquisition, we are required to make a contingent payment after June 30, 2018, for revenue related to specific customer contracts signed by June 30, 2017. The fair value of the liability recognized upon acquisition was $1.3 million. For the SMART Temps acquisition, we are required to make a contingent payment after December 31, 2017 based on achieving specified revenue thresholds. The fair value of the liability for contingent payments recognized upon acquisition was $10,000. The fair values of these contingent payments was estimated by discounting to 8. FAIR VALUE MEASUREMENTS (CONTINUED) present value the probability-weighted contingent payments expected to be made. Assumptions used in these calculations include the discount rate and various probability factors. This liability is considered to be a Level 3 financial liability that is re-measured each reporting period as a charge or credit to general and administrative expense within the Consolidated Statements of Operations. The following table presents a reconciliation of the contingent consideration liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):
The change in fair value of contingent consideration relates to the acquisitions of Bluenica, FreshTemp and SMART Temps and is included in general and administrative expense. The change in fair value of contingent consideration reflects our estimate of the probability of achieving the relevant targets and is discounted based on our estimated discount rate. We have estimated the fair value of the contingent consideration based on the probability of achieving the specified revenue thresholds at 93.5% to 98.5% for Bluenica, between 25% and 100% for FreshTemp and 0% for SMART Temp. A significant increase (decrease) in our estimates of achieving the relevant targets could materially increase (decrease) the fair value of the contingent consideration liability. |
Product Warranty Obligation |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRODUCT WARRANTY OBLIGATION | PRODUCT WARRANTY OBLIGATION The following table summarizes the activity associated with the product warranty accrual (in thousands) and is listed on our Consolidated Balance Sheets under Current Liabilities:
We are not responsible for, and do not warrant that, custom software versions, created by original equipment manufacturer (OEM) customers based upon our software source code, will function in a particular way, will conform to any specifications or are fit for any particular purpose. Further, we do not indemnify these customers from any third-party liability as it relates to or arises from any customization or modifications made by the OEM customer. |
Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING | RESTRUCTURING Below is a summary of the restructuring charges and other activity within the restructuring accrual all of which is included in our M2M segment (in thousands):
2017 Restructuring In May 2017, we approved a restructuring plan primarily impacting our France location. We also eliminated certain employee costs in the U.S. The restructuring is a result of a decision to consolidate our France operations to our Europe, Middle East and Africa (EMEA) headquarters in Munich. The total restructuring charges amounted to $2.5 million that included $2.3 million of employee costs and $0.2 million of contract termination costs during the third quarter of fiscal 2017. These actions resulted in an elimination of 10 positions in the U.S. and 8 positions in France. The payments associated with these charges are expected to be completed by the fourth quarter ending September 30, 2018. 2016 Restructuring On January 19, 2016, we approved a restructuring plan for our Digi Wireless Design Services group. This plan resulted in an elimination of 5 positions. We recorded a restructuring charge of $0.1 million related to severance during the second quarter of fiscal 2016 and paid the majority of the severance during that same quarter. On November 19, 2015, we approved a restructuring plan impacting our corporate staff. The plan closed our Dortmund, Germany office and relocated certain employees to our Munich office. We also recorded a contract termination charge as we relocated employees in our Minneapolis, Minnesota office to our World Headquarters in Minnetonka, Minnesota in December 2015. We recorded a restructuring charge of $0.7 million that included $0.5 million of severance and $0.2 million of contract termination costs during the first quarter of fiscal 2016. This restructuring resulted in an elimination of 10 positions. The payments associated with these charges were completed in the third quarter of fiscal 2016. 2015 Restructuring On January 22, 2015, we announced the closure of our India location. The March closure resulted in the elimination of approximately 38 employees from engineering, sales and administration. We recorded a restructuring charge of $0.4 million related to severance during the second quarter of fiscal 2015. The payments associated with this charge were completed during the third quarter of fiscal 2015. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The components of income from continuing operations, before income taxes are as follows (in thousands):
The components of the income tax provision are as follows (in thousands):
The net deferred tax asset consists of the following (in thousands):
As of September 30, 2017, we have estimated carryforwards for tax purposes as follows: We have $2.0 million of tax carryforwards (net of reserves) related to federal and state research and development tax credits. We also have $5.5 million of carryforwards (net, tax effected) consisting of U.S. capital loss of $5.1 million and non-U.S. net operating losses of $0.4 million. The majority of our federal research and development tax credits have a 20 year carryforward period. The state research and development tax credits have a 15 year carryforward period. The majority of our non-U.S. net operating losses have an unlimited carryforward period. Our non-U.S. tax credit carryforwards will expire in 2032. Our U.S. capital loss carryforward will expire in 2020. Our valuation allowance for certain U.S. and foreign locations remained consistent and was $6.0 million at both September 30, 2017 and September 30, 2016. The amount of the deferred tax assets realized could vary if there are differences in the timing 11. INCOME TAXES (CONTINUED) or amount of future reversals of existing deferred tax liabilities or changes in the amounts of future taxable income. If our future taxable income projections are not realized, an additional valuation allowance may be required, and would be reflected as income tax expense at the time that any such change in future taxable income is determined. The reconciliation of the statutory federal income tax amount to our income tax provision is as follows (in thousands):
During fiscal 2017, we recorded net tax benefits of $1.0 million, primarily from the reversal of tax reserves due to the expiration of statutes of limitation from U.S. and foreign tax jurisdictions. These benefits are included within the discrete tax benefits in the above table. During fiscal 2016, we recorded net tax benefits of $1.5 million, primarily from the reinstatement of the federal research and development tax credit for calendar year 2015 and the reversal of tax reserves due to the expiration of statutes of limitation from U.S. and foreign tax jurisdictions. In addition, we filed amended income tax returns resulting in an additional domestic refund related to qualified manufacturing activities. These benefits are included within the discrete tax benefits in the above table. During fiscal 2015, we recorded net tax benefits of $0.8 million, resulting from the reinstatement of the research and development tax credit for calendar year 2014, reversal of tax reserves due to the expiration of statute of limitations from U.S. and foreign tax jurisdictions and reversal of tax reserves due to the resolution of tax audits. These benefits are included within the discrete tax benefits in the above table. A reconciliation of the beginning and ending amount of unrecognized tax benefits is (in thousands):
11. INCOME TAXES (CONTINUED) The total amount of unrecognized tax benefits at September 30, 2017 that, if recognized, would affect our effective tax rate is $1.2 million. We expect that it is reasonably possible that the total amounts of unrecognized tax benefits will decrease approximately $0.1 million over the next 12 months due to the expiration of various statutes of limitations. Of the $1.3 million of unrecognized tax benefits, $0.7 million is included in non-current income taxes payable and $0.6 million is included with non-current deferred tax assets on the consolidated balance sheet at September 30, 2017. We recognize interest and penalties related to income tax matters in income tax expense. During fiscal 2017 and 2016, there were insignificant amounts of interest and penalties related to income tax matters in income tax expense. We had accrued interest and penalties related to unrecognized tax benefits of $0.1 million at September 30, 2017 and $0.2 million at September 30, 2016. These accrued interest and penalties are included in our non-current income taxes payable on our consolidated balance sheets. We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. With few exceptions, we are no longer subject to state and local or non-U.S. income tax examinations by tax authorities for years before fiscal year 2013. At September 30, 2017, we had approximately $34.6 million of un-taxed accumulated undistributed foreign earnings, for which we have not accrued additional U.S. tax. Our policy is to reinvest earnings of our foreign subsidiaries indefinitely to fund current operations and provide for future international expansion opportunities, and only repatriate earnings to the extent that U.S. taxes have already been recorded. Although we have no current need to repatriate historical earnings in the form of cash to the United States, if we change our assertion from indefinitely reinvesting undistributed foreign earnings, we would have to accrue applicable taxes. The amount of any taxes and the application of any tax credits would be determined based on the income tax laws at the time of such repatriation. Under current tax laws, we estimate the unrecognized deferred tax liability to be up to $0.6 million. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based awards were granted under the 2017 Omnibus Incentive Plan (the "2017 Plan") beginning January 30, 2017 and, prior to that, were granted under the 2016 Omnibus Incentive Plan (the "2016 Plan"). Upon stockholder approval of the 2017 Plan, we ceased granting awards under any prior plan. Shares remaining in the 2016 Plan were moved into the 2017 Plan. The authority to grant options under the 2017 Plan and to set other terms and conditions rests with the Compensation Committee of the Board of Directors. We also have awards outstanding under our 2014 Omnibus Plan (the "2014 Plan"), the 2013 Omnibus Incentive Plan (the "2013 Plan") and the 2000 Omnibus Stock Plan, as amended and restated as of December 4, 2009 (the "2000 Plan"). The 2017 Plan authorizes the issuance of up to 1,500,000 common shares in connection with awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based full value awards or other stock-based awards. Eligible participants include our employees, our affiliates, non-employee directors of our Company and any consultant or advisor who is a natural person and provides services to us or our affiliates. Options that have been granted under the 2017 Plan typically vest over a four-year period and will expire if unexercised after seven years from the date of grant. Restricted stock unit awards (RSUs) that have been granted to directors typically vest in one year. RSUs that have been granted to executives and employees typically vest in January over a four-year period. Awards may be granted under the 2017 Plan until January 29, 2027. Options under the 2017 Plan can be granted as either incentive stock options (ISOs) or non-statutory stock options (NSOs). The exercise price of options and the grant date price of restricted stock units is determined by our Compensation Committee but may not be less than the fair market value of our common stock based on the closing price on the date of grant. Upon exercise, we issue new shares of stock. As of September 30, 2017, there were approximately 1,583,578 shares available for future grants under the 2017 Plan. The 2016 Plan, under which grants ceased upon approval of the 2017 Plan, initially authorized the issuance of up to 1,500,000 common shares in connection with awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based full value awards or other stock-based awards. Eligible participants included our employees, our affiliates, non-employee directors of our Company and any consultant or advisor who is a natural person and provided services to us or our affiliates. Options that were granted under the 2016 Plan typically vested over a four-year period and expired if unexercised after seven years from the date of grant. RSUs that were granted to directors typically vested in one year. RSUs that were granted to executives and employees typically vested in November or January over a four-year period. Options under the 2016 Plan could be granted as either ISOs or NSOs. The exercise price of options and the grant date price of restricted 12. STOCK-BASED COMPENSATION (CONTINUED) stock was determined by our Compensation Committee but were not less than the fair market value of our common stock based on the closing price on the date of grant. The 2014 Plan initially authorized the issuance of up to 2,250,000 common shares in connection with awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based full value awards or other stock-based awards. Eligible participants included our employees, our affiliates, non-employee directors of our Company and any consultant or advisor who is a natural person and provides services to us or our affiliates. Options granted under this plan generally vested over a four year service period and expired if unexercised after eight years from the date of grant. RSUs that were granted to Directors typically vested in one year. RSUs that were granted to executives and employees typically vested in November over a four-year period. Options under the 2014 Plan were granted as either ISOs or NSOs. Awards may no longer be granted under the 2014 Plan as grants ceased upon approval of the 2016 Plan effective February 1, 2016 at the Annual Meeting of Stockholders. The exercise price of options and the grant date price of restricted stock was determined by our Compensation Committee but could not be less than the fair market value of our common stock based on the closing price on the date of grant. The 2013 Plan initially authorized the issuance of up to 1,750,000 common shares in connection with awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based full value awards or stock awards. Eligible participants included our employees, non-employee directors, consultants and advisors. Options granted under this plan generally vested over a four year service period and expired if unexercised after eight years from the date of grant. RSUs that were granted to Directors typically vested in one year. Awards may no longer be granted under the 2013 Plan as grants ceased upon approval of the 2014 Plan effective January 27, 2014 at the Annual Meeting of Stockholders. Options under the 2013 Plan were granted as either ISOs or NSOs. The exercise price was determined by our Compensation Committee but could not be less than the fair market value of our common stock based on the closing price on the date of grant. The 2000 Plan initially authorized the issuance of up to 5,750,000 common shares in connection with awards of stock options, stock appreciation rights, restricted stock, performance units or stock awards. Eligible participants included our employees, non-employee directors, consultants and advisors. An authorization to issue an additional 2,500,000 common shares was ratified on January 25, 2010 at the Annual Meeting of Stockholders. Awards may no longer be granted under the 2000 Plan as the plan was terminated as to future awards on January 28, 2013 at the Annual Meeting of Stockholders. Options under the 2000 Plan were granted as either ISOs or non-statutory stock options NSOs. The exercise price was determined by our Compensation Committee but could not be less than the fair market value of our common stock based on the closing price on the date of grant. Our equity plans and corresponding forms of award agreements generally have provisions allowing employees to elect to satisfy tax withholding obligations through the delivery of shares, having us retain a portion of shares issuable under the award or paying cash to us for the withholding. During fiscal 2017, 2016 and 2015 our employees forfeited 49,684, 47,464 and 9,371 shares, respectively in order to satisfy $0.7 million, $0.6 million and $0.1 million, respectively, of withholding tax obligations related to stock-based compensation, pursuant to terms of awards under our board and shareholder-approved compensation plans. We recorded cash received from the exercise of stock options of $3.5 million, $7.2 million and $6.6 million during fiscal years 2017, 2016 and 2015, respectively. During fiscal 2017 and fiscal 2016, there were $0.3 million and $0.2 million, respectively of excess tax benefits from stock-based compensation. There were no excess tax benefits during fiscal 2015. We sponsor an Employee Stock Purchase Plan, as amended and restated as of October 29, 2013, December 4, 2009 and November 27, 2006 (the "Purchase Plan"), covering all domestic employees with at least 90 days of continuous service and who are customarily employed at least 20 hours per week. The Purchase Plan allows eligible participants the right to purchase common stock on a quarterly basis at the lower of 85% of the market price at the beginning or end of each three-month offering period. The most recent amendments to the Purchase Plan, ratified by our stockholders on January 27, 2014, increased the total number of shares to 2,800,000 that may be purchased under the plan. Employee contributions to the Purchase Plan were $0.7 million in fiscal 2017, and $0.9 million in each of fiscal 2016 and 2015. Pursuant to the Purchase Plan, 72,594, 103,915, and 123,847 shares of common stock were issued to employees during fiscal 2017, 2016 and 2015, respectively. Shares are issued under the Purchase Plan from treasury stock. As of September 30, 2017, 441,022 shares of common stock were available for future issuances under the Purchase Plan. Stock-based compensation cost capitalized as part of inventory was immaterial as of September 30, 2017, 2016 and 2015. 12. STOCK-BASED COMPENSATION (CONTINUED) Stock-based compensation expense is included in the consolidated results of operations as follows (in thousands):
Stock Options The following table summarizes our stock option activity (in thousands, except per common share amounts):
(1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $10.60 as of September 30, 2017, which would have been received by the option holders had all option holders exercised their options as of that date. The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. The total intrinsic value of all options exercised during each of the twelve months ended September 30, 2017, 2016 and 2015 was $0.9 million, $1.9 million and $0.9 million, respectively. The table below shows the weighted average fair value, which was determined based upon the fair value of each option on the grant date utilizing the Black-Scholes option-pricing model and the related assumptions:
The fair value of each option award granted during the periods presented was estimated using the Black-Scholes option valuation model that uses the assumptions noted in the table above. Expected volatilities are based on the historical volatility of our stock. We use historical data to estimate option exercise and employee termination information within the valuation model. The expected term of options granted is derived from the vesting period and historical information and represents the period of time that options granted are expected to be outstanding. The risk-free rate used is the zero-coupon U.S. Treasury bond rate in effect at the time of the grant whose maturity equals the expected term of the option. 12. STOCK-BASED COMPENSATION (CONTINUED) We use historical data to estimate pre-vesting forfeiture rates. The pre-vesting forfeiture rate used in fiscal 2017 was 10.0%. As of September 30, 2017, the total unrecognized compensation cost related to non-vested stock-based compensation arrangements, net of expected forfeitures, was $3.4 million and the related weighted average period over which it is expected to be recognized was approximately 2.9 years. At September 30, 2017, the weighted average exercise price and remaining life of the stock options are as follows (in thousands, except remaining life and exercise price):
The total grant date fair value of shares vested was $2.4 million in fiscal 2017 and $2.9 million in each of fiscal 2016 and 2015. Non-vested Restricted Stock Units A summary of our non-vested restricted stock units as of September 30, 2017 and changes during the twelve months then ended is presented below (in thousands, except per common share amounts):
As of September 30, 2017, the total unrecognized compensation cost related to non-vested restricted stock units was $3.8 million and the related weighted average period over which it is expected to be recognized was approximately 1.2 years. |
Common Stock Repurchase |
12 Months Ended |
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Sep. 30, 2017 | |
Common Stock Repurchase [Abstract] | |
COMMON STOCK REPURCHASE | COMMON STOCK REPURCHASE Common Stock Repurchase Program On October 29, 2013, our Board of Directors authorized a program to repurchase up to $20.0 million of our common stock, primarily to support our employee stock purchase program and to return capital to shareholders. During the first quarter of fiscal 2015, we repurchased 287,787 shares for $2.2 million under this plan, which expired on October 31, 2014. On October 28, 2014, our Board of Directors authorized a program to repurchase up to $15.0 million of our common stock primarily to return capital to shareholders and to support our employee stock purchase program. This authorization began on November 1, 2014 and expired on October 31, 2015. There were no shares repurchased under this program. 13. COMMON STOCK REPURCHASE (CONTINUED) On April 26, 2016, our Board of Directors authorized a program to repurchase up to $15.0 million of our common stock primarily to return capital to shareholders. This authorization expired on May 1, 2017. There were no shares repurchased under this program. On May 2, 2017, our Board of Directors authorized a new program to repurchase up to $20.0 million of our common stock primarily to return capital to shareholders. This repurchase authorization expires on May 1, 2018. Shares repurchased under the new program will be made through open market and privately negotiated transactions from time to time and in amounts that management deems appropriate. The amount and timing of share repurchases depends upon market conditions and other corporate considerations. During fiscal 2017, we repurchased 28,691 shares for $0.3 million. As of September 30, 2017, $19.7 million remains available for repurchase. |
Share Rights Plan |
12 Months Ended |
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Sep. 30, 2017 | |
Warrants and Rights Note Disclosure [Abstract] | |
SHARE RIGHTS PLAN | SHARE RIGHTS PLAN Under our share rights plan, each right entitles its holder to buy one one-hundredth of a share of a Series A Junior Participating Preferred Stock at an exercise price of $60, subject to adjustment. The rights are not exercisable until a specified distribution date as defined in the Share Rights Agreement. The Rights will expire on June 30, 2018, unless extended or earlier redeemed or exchanged by us as defined in the Share Rights Agreement. |
Employee Benefit Plans |
12 Months Ended |
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Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS We currently have a savings and profit sharing plan pursuant to Section 401(k) of the Internal Revenue Code (the Code), whereby eligible employees may contribute up to 25% of their pre-tax earnings, not to exceed amounts allowed under the Code. We provide a match of 100% on the first 3% of each employee’s bi-weekly contribution and a 50% match on the next 2% of each employee’s bi-weekly contribution. In addition, we may make contributions to the plan at the discretion of the Board of Directors. We provided matching contributions of $1.4 million for fiscal 2017, $1.4 million for fiscal 2016 and $1.7 million for fiscal 2015. |
Commitments |
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Leases, Operating [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS | COMMITMENTS We have entered into various operating lease agreements for office facilities and equipment, the last of which expires in fiscal 2023. The office facility leases generally require us to pay a pro-rata share of the lessor’s operating expenses. Certain operating leases contain escalation clauses and are being amortized on a straight-line basis over the term of the lease. The following schedule reflects future minimum rental commitments under noncancelable operating leases (in thousands):
The following schedule shows the composition of total rental expense for all operating leases for the years ended September 30 (in thousands):
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Contingencies |
12 Months Ended |
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Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Patent Infringement Lawsuit On June 19, 2017, Weatherproof Wireless, LLC filed a complaint against us in federal court in the District of Delaware. The complaint includes allegations against us pertaining to the infringement of Weatherproof Wireless, LLC patents by our access gateway and wireless router pods for public safety communications structures, including the Digi Utility Communication Hub with 4G LTE. On September 26, 2017 we signed a settlement and license agreement for an immaterial amount. In addition to the matters discussed above, in the normal course of business, we are subject to various claims and litigation, which may include, but are not limited to, patent infringement and intellectual property claims. While we are unable to predict the outcome of any potential claims or litigation due to the inherent unpredictability of these matters, we believe that it is possible that we could, in the future, incur judgments or enter into settlements of claims that could have a material adverse effect on our operations in any particular period. |
Quarterly Financial Data |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data | QUARTERLY FINANCIAL DATA (UNAUDITED) (in thousands, except per common share data)
18. QUARTERLY FINANCIAL DATA (UNAUDITED)(CONTINUED) expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions. In the third quarter of fiscal 2017, we recorded a tax benefit of $0.7 million from the reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions. In the fourth quarter of fiscal 2017, we recorded a net tax benefit of $0.2 million, primarily from the reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions and state and foreign prior year true-up provision to return. We recorded a benefit of $0.7 million in the first quarter of fiscal 2016 resulting from the reinstatement of the research and development tax credit for calendar year 2015, reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions and reversal of tax reserves due to the resolution of tax audits. In the third quarter of fiscal 2016, we recorded a tax benefit of $0.5 million primarily due to the filing of an amended income tax return resulting in a domestic refund related to qualified manufacturing activities. In the fourth quarter of fiscal 2016, we recorded a net tax benefit of $0.2 million, primarily due to the filing of an additional amended income tax return resulting in an additional domestic refund related to qualified manufacturing activities, partially offset by an adjustment of the state rate on net deferred tax assets.
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Subsequent Event |
12 Months Ended |
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Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT Acquisition of TempAlert On October 20, 2017, we purchased all the outstanding interests of TempAlert, a Boston-based provider of automated, real-time temperature monitoring and task management solutions. TempAlert will join the Digi Smart Solutions™. The purchase price was $45 million in cash adjusted for certain net working capital adjustments. The terms of the acquisition included an upfront cash payment together with future earn-out payments and a holdback amount. Cash of $40.7 million was paid at the time of closing. The earn-out payments are scheduled to be paid after December 31, 2018 and December 31, 2019 which is the end of the earn-out periods. The cumulative amount of the these earn-outs for the periods ended December 31, 2018 and 2019, will not exceed $35.0 million and $45.0 million, respectively. A preliminary purchase price allocation, estimated acquisition costs and proforma financial information are not available due to the timing of the acquisition. |
Schedule II - Valuation and Qualifying Accounts |
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Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II- Valuation and Qualifying Accounts | SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS DIGI INTERNATIONAL INC. (in thousands)
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Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Discontinued Operations | Discontinued Operations On October 23, 2015, we sold all of the outstanding stock of our wholly owned subsidiary, Etherios Inc. (Etherios) to West Monroe Partners, LLC. Because the sale of Etherios represented a strategic shift that will have a major effect on our operations and financial results, we have classified our Etherios business as discontinued operations, which requires retrospective application to financial information for all periods presented. Since the cost of segregating the consolidated statement of cash flows outweighed the benefits, we elected not to segregate our consolidated statement of cash flows as the material items in the operating and investing sections are disclosed in Note 3 to our Consolidated Financial Statements. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to our fiscal 2017 presentation. On the Consolidated Balance Sheet for the period ended September 30, 2016, unearned revenue has been reclassified from other current liabilities to its own respective line item. We have reclassified current income taxes payable to other current liabilities. Beginning in the third fiscal quarter of 2017, we renamed our service revenue and cost of sales to be more descriptive to services and solutions revenue and services and solutions cost of sales. Beginning with this annual report on Form 10-K, we will also report the amortization within cost of sales on its own respective line item. On the Consolidated Statement of Operations for the year ended September 30, 2016 and 2015, we have reclassified the cost of sales sections to conform to this presentation. Total revenue and cost of sales remain unchanged. |
Cash Equivalents | Cash Equivalents Cash equivalents consist of money market accounts and other highly liquid investments purchased with an original maturity of three months or less. The carrying amounts approximate fair value due to the short maturities of these investments. We maintain our cash and cash equivalents in bank accounts which, at times, may exceed federally insured limits. We have not experience any losses in such accounts. |
Marketable Securities | Marketable Securities Marketable securities consist of certificates of deposit, commercial paper, corporate bonds and government municipal bonds. All marketable securities are accounted for as available-for-sale and are carried at fair value on our consolidated balance sheets with unrealized gains and losses recorded in accumulated other comprehensive loss within stockholders’ equity. In order to estimate the fair value for each security in our investment portfolio, we obtain quoted market prices and trading activity for each security where available. We obtain relevant information from our investment advisor and, if warranted, also may review the financial solvency of certain security issuers. We regularly monitor and evaluate the value of our marketable securities. When assessing marketable securities for other-than-temporary declines in value, we consider several factors. These factors include: how significant the decline in value is as a percentage of the original cost, how long the market value of the investment has been less than its original cost, the underlying factors contributing to a decline in the prices of securities in a single asset class, the performance of the issuer’s stock price in relation to the stock price of its competitors within the industry, expected market volatility, analyst recommendations, the views of external investment managers, any news or financial information that has been released specific to the investee and the outlook for the overall industry in which the issuer operates. If events and circumstances indicate that a decline in the value of a security has occurred and is other-than-temporary, we would record a charge to other (expense) income. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at the amount we expect to collect, which is net of an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The following factors are considered when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, and changes in customer payment terms or practices. In addition, overall historical collection experience, current economic industry trends, and a review of the current status of trade accounts receivable are considered when determining the required allowance for doubtful accounts. Based on our assessment, we provide for estimated uncollectible amounts through a charge to earnings and a credit to our allowance for doubtful accounts. Balances that remain outstanding after we have used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to accounts receivable. |
Inventories | Inventories Inventories are stated at the lower of cost or fair market value, with cost determined using the first-in, first-out method. Appropriate consideration is given to deterioration, obsolescence and other factors in evaluating fair market value. |
Property, Equipment and Improvements, Net | Property, Equipment and Improvements, Net Property, equipment and improvements are carried at cost, net of accumulated depreciation. Depreciation is provided by charges to operations using the straight-line method over the estimated asset useful lives. Furniture and fixtures, purchased software and other equipment are depreciated over a period of three to seven years. Building improvements and buildings are depreciated over ten and thirty-nine years, respectively. Expenditures for maintenance and repairs are charged to operations as incurred, while major renewals and betterments are capitalized. The assets and related accumulated depreciation accounts are adjusted for asset retirements and disposals with the resulting gain or loss included in operations. |
Identifiable Intangible Assets | Identifiable Intangible Assets Purchased proven technology, license agreements, covenants not to compete and other identifiable intangible assets are recorded at fair value when acquired in a business acquisition, or at cost when not purchased in a business acquisition. All other identifiable intangible assets are amortized on either a straight-line basis over their estimated useful lives of three to thirteen years or based on the pattern in which the asset is consumed. Useful lives for identifiable intangible assets are estimated at the time of acquisition based on the periods of time from which we expect to derive benefits from the identifiable intangible assets. Amortization of purchased and core technology is included in cost of sales in the Consolidated Statements of Operations. Amortization of all other acquired identifiable intangible assets is charged to operating expenses as a component of general and administrative expense. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Identifiable intangible assets are reviewed for impairment annually or whenever events or circumstances indicate that undiscounted expected future cash flows are not sufficient to recover the carrying value amount. We measure impairment loss by utilizing an undiscounted cash flow valuation technique using fair values indicated by the income approach. Impairment losses, if any, would be recorded in the period the impairment is identified. |
Goodwill | Goodwill Goodwill represents the excess of cost over the fair value of identifiable assets acquired. Goodwill is tested for impairment on an annual basis as of June 30, or more frequently if events or circumstances occur which could indicate impairment. The calculation of goodwill impairment requires us to make assumptions about the fair value of our reporting unit(s), which historically has been approximated by using our market capitalization plus a control premium for our reporting unit(s). Control premium assumptions require judgment and actual results may differ from assumed or estimated amounts. As of the third quarter of fiscal 2017, we determined that we have two reportable operating segments, our Solutions segment and our M2M segment (see Note 5 to the Condensed Consolidated Financial Statements). As a result, we concluded that the Solutions segment and the M2M segment constitute separate reporting units for purposes of the ASC 350-20-35 "Goodwill Measurement of Impairment" assessment and both units were tested individually for impairment. Our test for potential goodwill impairment is a two-step approach. First, we estimate the fair values for each reporting unit by comparing the fair value to the carrying value. If the carrying value of the reporting unit exceeds its estimated fair value, then we conduct the second step, which requires us to measure the amount of the impairment loss. The impairment loss, if any, is calculated by comparing the implied fair value of the goodwill to its carrying amount. To calculate the implied fair value of goodwill, the fair value of the reporting unit’s assets and liabilities, excluding goodwill, is estimated. The excess of the fair value of the reporting unit over the amount assigned to its assets and liabilities, excluding goodwill, is the implied fair value of the reporting unit’s goodwill. At June 30, 2017, we had a total of $98.6 million of goodwill on our Condensed Consolidated Balance Sheet for the M2M reporting unit and the implied fair value of this reporting unit exceeded its carrying value by approximately 7%. At June 30, 2017, we had a total of $32.5 million of goodwill on our Condensed Consolidated Balance Sheet for the Solutions reporting unit and the implied fair value of this reporting unit exceeded its carrying value by approximately 8%. Based on that data, we concluded that no impairment was indicated for either reporting unit and we were not required to complete the second step of the goodwill impairment analysis. No goodwill impairment charges were recorded. During the fourth quarter of fiscal 2017, we assessed various qualitative factors to determine whether or not an additional goodwill impairment assessment was required as of September 20, 2017, and we concluded that no additional impairment assessment was required. Implied fair values, for both reporting units were each calculated on a standalone basis using a weighted combination of the income approach and market approach. The income approach indicates the fair value of a business based on the value of the cash flows the business or asset can be expected to generate in the future. A commonly used variation of the income approach used to value a business is the discounted cash flow (DCF) method. The DCF method is a valuation technique in which the value of a business is estimated on the earnings capacity, or available cash flow, of that business. Earnings capacity represents the earnings available for distribution to capital holders after consideration of the reinvestment required for future growth. Significant judgment is required to estimate the amount and timing of future cash flows for each reporting unit and the relative risk of achieving those cash flows. The market approach indicates the fair value of a business or asset based on a comparison of the business or asset to comparable publicly traded companies or assets and transactions in its industry as well as prior company or asset transactions. This approach can be estimated through the guideline company method. This method indicates fair value of a business by comparing it to publicly traded companies in similar lines of business. After identifying and selecting the guideline companies, we make judgments about the comparability of the companies based on size, growth rates, profitability, risk, and return on investment in order to estimate market multiples. These multiples are then applied to the reporting units to estimate a fair value. In addition, the implied fair values of each reporting unit were added together to get an indicated value of total equity to which a range of indicated value of total equity was derived. This range was compared to the total market capitalization of 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) $269.4 million as of June 30, 2017, which implied a range of control premiums of 16.6% to 24.4%. This range of control premiums falls below the control premiums observed in the last five years in the communications equipment industry. As a result, the market capitalization reconciliation analysis proved support for the reasonableness of the fair values estimated for each individual reporting unit. Should the facts and circumstances surrounding our assumptions change, the first step of our goodwill impairment analysis may fail. Assumptions and estimates to determine fair values are complex and often subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts. For example, if our future operating results do not meet current forecasts or if we experience a sustained decline in our market capitalization that is determined to be indicated of a reduction in fair value of one or more of our reporting units, we may be required to record future impairment charges for goodwill. An impairment could have a material effect on our consolidated balance sheet and results of operations. We have had no goodwill impairment losses since the adoption of Accounting Standards Codification (ASC) 350, Intangibles-Goodwill and Others, in fiscal 2003. |
Contingent Consideration | Contingent Consideration We measure our contingent consideration liabilities recognized in connection with business combinations at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy as defined in ASC 820 "Fair Value Measurement". We used a probability-weighted discounted cash flow approach as a valuation technique to determine the fair value of the contingent consideration on the acquisition date. At each subsequent reporting period, the fair value is re-measured with the change in fair value recognized in general and administrative expense and interest expense in our Condensed Consolidated Statements of Operations. Amounts, if any, paid to the seller in excess of the amount recorded on the acquisition date will be classified as cash flows used in operating activities. Payments to the seller not exceeding the acquisition-date fair value of the contingent consideration will be classified as cash flows used in financing activities. |
Warranties | Warranties In general, we warrant our hardware products to be free from defects in material and workmanship under normal use and service. The warranty periods generally range from one to five years. We typically have the option to either repair or replace hardware products we deem defective with regard to material or workmanship. Estimated warranty costs are accrued in the period that the related revenue is recognized based upon an estimated average per unit repair or replacement cost applied to the estimated number of units under warranty. These estimates are based upon historical warranty incidents and are evaluated on an ongoing basis to ensure the adequacy of the warranty accrual. |
Treasury stock | Treasury Stock We record treasury stock at cost. Treasury stock includes shares purchased from employees for tax withholding purposes related to vesting of restricted stock awards. |
Revenue Recognition | Revenue Recognition We recognize revenue in accordance with authoritative guidance issued by Financial Accounting Standards Board (FASB) related to revenue recognition. Hardware product revenue as a percentage of total revenue was 91.7%, 96.6% and 95.9% in fiscal 2017, 2016 and 2015, respectively. We recognize hardware product revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, collectability is reasonably assured and there are no post-delivery obligations, other than warranty. Under these criteria, product revenue generally is recognized upon shipment of product to customers. Sales to authorized domestic and foreign distributors and Direct / OEMs are made with certain rights of return and price adjustment provisions. Estimated reserves for future returns and pricing adjustments are established by us based on an analysis of historical patterns of returns and price adjustments as well as an analysis of authorized returns compared to received returns and distribution sales for the current period. Estimated reserves for future returns and price adjustments are charged against revenue in the same period as the corresponding revenue is recorded. Service revenue as a percentage of total revenue represented 8.3%, 3.4% and 4.1% in fiscal 2017, 2016 and 2015, respectively. Our service revenue is derived primarily from our Digi Wireless Design Services and our Digi Smart Solutions™. Our Digi Smart Solutions™ revenue includes subscription revenue, support and equipment. Our equipment and implementation fees are 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) recorded as a sale up–front due to these items having stand–alone value to the customer because the customer can utilize our equipment with other monitoring services or use our monitoring services with hardware purchased from other vendors. Our installation charges are recorded when the product is installed. Our subscription revenue is recorded on a monthly basis. These subscriptions are generally for one year, but can be as long as three years, and may contain an evergreen renewal provision. Generally, our subscription renewal charges per month are the same as the original contract term. We also have some service revenue that is derived from our Digi Remote Manager®, which is a platform-as-a-service (PaaS) offering in which customers pay for services consumed in terms of devices being managed and monitored, or as a monthly service fee for access to information. In addition, we recognize small amounts of revenue from our support services which is recognized over the life of the contract, and training as the services are performed. We recognize service revenue from our Digi Wireless Design Services, Digi Smart Solutions™ and Digi Remote Manager® based upon performance, including final product delivery and customer acceptance. |
Research and Development | Research and Development Research and development costs are expensed when incurred. Research and development costs include compensation, allocation of corporate costs, depreciation, utilities, professional services and prototypes. Software development costs are expensed as incurred until the point that technological feasibility and proven marketability of the product are established. To date, the time period between the establishment of technological feasibility and completion of software development has been short, and no significant development costs have been incurred during that period. Accordingly, we have not capitalized any software development costs to date. |
Income Taxes | Income Taxes Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Income tax expense is equal to the tax payable for the period and the change during the period in deferred tax assets and liabilities and also changes in income tax reserves. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense represents the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. This cost must be recognized over the period during which an employee is required to provide the service (usually the vesting period). |
Foreign Currency Translation | Foreign Currency Translation Financial position and results of operations of our international subsidiaries are measured using local currencies as the functional currency, except for our Singapore location which uses the U.S. Dollar as its functional currency. Assets and liabilities of these operations are translated at the exchange rates in effect at the end of each reporting period. For our larger international subsidiaries, statements of operations accounts are translated at the daily rate. For all other international subsidiaries, our statements of operations accounts are translated at the weighted average rates of exchange prevailing during each reporting period. Translation adjustments arising from the use of differing currency exchange rates from period to period are included in accumulated other comprehensive loss in stockholders’ equity. Gains and losses on foreign currency exchange transactions, as well as translation gains or losses on transactions denominated in currencies other than an entity’s functional currency, are reflected in the statement of operations. During fiscal 2017, 2016 and 2015, there were net transaction gains (losses) of $0.1 million, $(0.7) million and $0.6 million, respectively, that were recorded in other income (expense), net. We manage our net asset or net liability position for U.S. dollar accounts in our foreign locations to reduce our foreign currency risk. We have not implemented a formal hedging strategy. |
Use of Estimates and Risks and Uncertainties | Use of Estimates and Risks and Uncertainties The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates that could significantly affect our results of operations or financial condition involve the assignment of fair values upon acquisition of goodwill and other intangible assets and testing for impairment; the determination of our allowance for doubtful accounts and reserve for future 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) returns and pricing adjustments; the estimation of our inventory obsolescence, warranty reserve, income tax reserves, contingent consideration and other contingencies. |
Comprehensive Income (Loss) | Comprehensive Income Our comprehensive income is comprised of net income, foreign currency translation adjustments and unrealized gains and losses on available-for-sale marketable securities, which are charged or credited to the accumulated other comprehensive loss account in stockholders’ equity. |
Net Income Per Common Share | Net Income Per Common Share Basic net income per common share is calculated based on the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares of our stock result from dilutive common stock options and restricted stock units. We use the treasury stock method to calculate the weighted-average shares used in the diluted earnings per share computation. Under the treasury stock method, the proceeds from exercise of an option, the amount of compensation cost, if any, for future service that we have not yet recognized, and the amount of estimated tax benefits that would be recorded in paid-in capital, if any, when the option is exercised are assumed to be used to repurchase shares in the current period. |
Recent Accounting Developments | Recent Accounting Developments Adopted In April 2015, FASB issued Accounting Standards Update (ASU) 2015-05, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement." The new standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If the arrangement does include a software license, the software license element of the arrangement should be accounted for in the same manner as the acquisition of other software licenses. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. We adopted this guidance prospectively beginning with our fiscal quarter ended December 31, 2016. The adoption of this standard did not have a material impact on our consolidated financial statements. In August 2014, FASB issued ASU 2014-15, "Presentation of Financial Statements - Going Concern." This guidance requires management to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. These amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. We adopted this guidance for our fiscal year ended September 30, 2017. The adoption of this standard did not have a material impact on our consolidated financial statements. Not Yet Adopted In May 2017, the Financial Accounting Standards Board (FASB) issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting." ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017, which for us is the first quarter ending December 31, 2018. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact to our consolidated financial statements. In March 2017, FASB issued ASU 2017-08, "Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities." The amendments in this update shorten the amortization period for certain callable debt securities that are held at a premium. The amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount, which would be amortized to maturity. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018, which for us is the first quarter ending December 31, 2019. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In January 2017, FASB issued ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." ASU 2017-04 eliminates the second step in the goodwill impairment test which requires an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The standard, which should be applied prospectively, is effective for fiscal years beginning after December 15, 2019, which for us is our fiscal year ending September 30, 2021. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2017-04 on our consolidated financial statements. In August 2016, FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments." The amendments in this update provide guidance on eight specific cash flow issues, thereby reducing the diversity in practice in how certain transaction are classified in the statement of cash flows. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2017, which for us is the first quarter ending December 31, 2018. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2016-15 on our consolidated financial statements. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments." The amendments in this update replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2019, which for us is the first quarter ending December 31, 2020. Entities may early adopt beginning after December 15, 2018. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements. In March 2016, FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting." This update includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016, which for us is the first fiscal quarter ending December 31, 2017. Early adoption is permitted. We adopted ASU 2016-09 on October 1, 2017. Upon adoption, there was no material impact on our consolidated financial statements. Prospectively, beginning October 1, 2017, excess tax benefits and tax deficiencies will be reflected as income tax benefit or expense in our Consolidated Statement of Operations and could result in a material impact. The extent of the excess tax benefits or tax deficiencies are subject to variation in our stock price and the timing of restricted stock unit (RSU) vestings and employee stock option exercises. In February, 2016, FASB issued ASU 2016-02, "Leases (Topic 842)", which amends the existing guidance to require lessees to recognize lease assets and lease liabilities from operating leases on the balance sheet. This ASU is effective using the modified retrospective approach for annual periods and interim periods within those annual periods beginning after December 15, 2018, which for us is the first fiscal quarter ending December 31, 2019. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements. In January 2016, FASB issued ASU 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 will require equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income. The amendments in this update will also simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, eliminate the requirement for public business entities to disclose the method and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet and require these entities to use the exit price notion when measuring fair value of financial instruments for disclosure purposes. This ASU would also change the presentation and disclosure requirements for financial instruments. In addition, this ASU clarifies the guidance related to valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, which for us is the first fiscal quarter ending December 31, 2018. Early adoption is permitted for financial statements of fiscal years and interim periods that have not been issued. We are currently evaluating the impact of the adoption of ASU 2016-01. In July 2015, FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory." This provision would require inventory that was previously recorded using first-in, first-out (FIFO) to be recorded at lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those years. We adopted this guidance beginning with our fiscal quarter ending December 31, 2017. The amendments in this guidance should be applied prospectively with earlier application permitted as of the beginning of an interim or annual period. We do not expect the adoption of ASU 2015-11 to have a material impact on our consolidated financial statements. In May 2014, FASB issued ASU 2014-09, "Revenue from Contracts with Customers." This guidance provides a five-step analysis in determining when and how revenue is recognized so that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods and services. It also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14 "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date" which approved a one-year deferral of the effective date of ASU 2014-09. As a result of this deferral, ASU 2014-09 is effective for our fiscal year ending September 30, 2019, including interim periods within that reporting period. In addition, the FASB issued ASU 2016-08, ASU 2016-10 and ASU 2016-12 in March 2016, April 2016 and May 2016, respectively, to provide interpretive clarifications on the new guidance in ASC Topic 606. We are currently working through an adoption plan and have identified our revenue streams and completed 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) a preliminary analysis of how we currently account for revenue transactions compared to the revenue accounting required under the new standard. We intend to complete our adoption plan by December 31, 2017. This plan includes a review of transactions supporting each revenue stream to determine the impact of accounting treatment under ASC 606, evaluation of the method of adoption, and completing a rollout plan for implementation of the new standard with affected functions in our organization. Because of the nature of the work that remains, at this time we are unable to reasonably estimate the impact of adoption on our consolidated financial statements. We plan to adopt the new guidance beginning with our fiscal quarter ending December 31, 2018. |
Summary of Significant Accounting Policies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | The following table is a reconciliation of the numerators and denominators in the net income per common share calculations (in thousands, except per common share data):
(1) Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts. |
Acquisition (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following table summarizes the final values of SMART Temps assets acquired and liabilities assumed as of the acquisition date (in thousands):
The following table summarizes the final values of FreshTemp assets acquired and liabilities assumed as of the acquisition date (in thousands):
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Business Acquisition, Pro Forma Information | The following consolidated pro forma information is as if the acquisition had occurred on October 1, 2015 (in thousands):
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Discontinued Operations (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | The following table presents amortization, depreciation and purchases of property, equipment, improvements and certain other intangible assets of the discontinued operations related to Etherios (in thousands):
Income (loss) from discontinued operations, after income taxes, as presented in the Consolidated Statements of Operations for the twelve months ended September 30, 2016 and 2015 is as follows (in thousands):
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Goodwill and other Identifiable Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortizable Identifiable Intangible Assets | Amortizable identifiable intangible assets, net as of September 30, 2017 and 2016 were comprised of the following (in thousands):
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Schedule of Amortization Expense | Amortization expense for fiscal years 2017, 2016 and 2015 was as follows (in thousands):
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Schedule of Estimated Future Amortization Expense Related to Identifiable Intangible Assets | Estimated amortization expense for the next five years is as follows (in thousands):
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Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill were (in thousands):
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Segment Information and Major Customers (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Summary operating results for each of our segments were as follows (in thousands):
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Payments to Acquire Property, Plant and Equipment by Segment | Total expended for property, plant and equipment was as follows (in thousand):
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Schedule of Total Assets by Segment | Total assets for each of our segments were as follows (in thousands):
*Unallocated consists of cash and cash equivalents, current marketable securities and long-term marketable securities. |
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Schedule of Goodwill by Segment | Total goodwill for each of our segments were as follows (in thousands):
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Schedule of Net Property, Equipment and Improvements by Geographical Location | Net property, equipment and improvements by geographic location were as follows (in thousands):
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Schedule of Revenue by Geographic Location | The information in the following table provides total consolidated revenue by the geographic location of the customer (in thousands):
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Selected Balance Sheet Data (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Selected Balance Sheet Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Selected Balance Sheet Data | (in thousands)
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Marketable Securities (Tables) |
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Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Marketable Securities | At September 30, 2017 our marketable securities consisted of (in thousands):
At September 30, 2016 our marketable securities consisted of (in thousands):
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Schedule of Unrealized Losses on Available-for-Sale Securities | The following tables show the fair values and gross unrealized losses of our available-for-sale securities that have been in a continuous unrealized loss position deemed to be temporary, aggregated by investment category (in thousands):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets Measured on Recurring Basis | The following tables provide information by level for financial assets and liabilities that are measured at fair value on a recurring basis (in thousands):
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents a reconciliation of the contingent consideration liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):
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Product Warranty Obligation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Accrual | The following table summarizes the activity associated with the product warranty accrual (in thousands) and is listed on our Consolidated Balance Sheets under Current Liabilities:
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Restructuring (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve | Below is a summary of the restructuring charges and other activity within the restructuring accrual all of which is included in our M2M segment (in thousands):
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Taxes | The components of income from continuing operations, before income taxes are as follows (in thousands):
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Schedule of Components of Income Tax Provision | The components of the income tax provision are as follows (in thousands):
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Schedule of Net Deferred Tax Asset | The net deferred tax asset consists of the following (in thousands):
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Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the statutory federal income tax amount to our income tax provision is as follows (in thousands):
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Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is (in thousands):
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense is included in the consolidated results of operations as follows (in thousands):
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Schedule of Stock Option Activity | The following table summarizes our stock option activity (in thousands, except per common share amounts):
(1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $10.60 as of September 30, 2017, which would have been received by the option holders had all option holders exercised their options as of that date. |
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Schedule of Valuation Assumptions | The table below shows the weighted average fair value, which was determined based upon the fair value of each option on the grant date utilizing the Black-Scholes option-pricing model and the related assumptions:
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Schedule of Weighted Average Exercise Price Range and Remaining Contractual Life | At September 30, 2017, the weighted average exercise price and remaining life of the stock options are as follows (in thousands, except remaining life and exercise price):
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Schedule of Nonvested Restricted Stock Units | A summary of our non-vested restricted stock units as of September 30, 2017 and changes during the twelve months then ended is presented below (in thousands, except per common share amounts):
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Commitments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases, Operating [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | The following schedule reflects future minimum rental commitments under noncancelable operating leases (in thousands):
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Schedule of Rent Expense | The following schedule shows the composition of total rental expense for all operating leases for the years ended September 30 (in thousands):
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Quarterly Financial Data (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Data (Unaudited) | (in thousands, except per common share data)
18. QUARTERLY FINANCIAL DATA (UNAUDITED)(CONTINUED) expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions. In the third quarter of fiscal 2017, we recorded a tax benefit of $0.7 million from the reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions. In the fourth quarter of fiscal 2017, we recorded a net tax benefit of $0.2 million, primarily from the reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions and state and foreign prior year true-up provision to return. We recorded a benefit of $0.7 million in the first quarter of fiscal 2016 resulting from the reinstatement of the research and development tax credit for calendar year 2015, reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions and reversal of tax reserves due to the resolution of tax audits. In the third quarter of fiscal 2016, we recorded a tax benefit of $0.5 million primarily due to the filing of an amended income tax return resulting in a domestic refund related to qualified manufacturing activities. In the fourth quarter of fiscal 2016, we recorded a net tax benefit of $0.2 million, primarily due to the filing of an additional amended income tax return resulting in an additional domestic refund related to qualified manufacturing activities, partially offset by an adjustment of the state rate on net deferred tax assets.
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Summary of Significant Accounting Policies (Property, Equipment and Improvements, Net) (Details) |
12 Months Ended |
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Sep. 30, 2017 | |
Furniture and Fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and improvements depreciation life | 3 years |
Furniture and Fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and improvements depreciation life | 7 years |
Building Improvements | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and improvements depreciation life | 10 years |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and improvements depreciation life | 39 years |
Summary of Significant Accounting Policies (Identifiable Intangible Assets) (Details) |
12 Months Ended |
---|---|
Sep. 30, 2017 | |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 3 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 13 years |
Summary of Significant Accounting Policies (Goodwill) (Details) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
segment
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
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|
Goodwill [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Goodwill | $ 131,995 | $ 109,448 | $ 100,183 | |
Market Capitalization | $ 269,400 | |||
Minimum | ||||
Goodwill [Line Items] | ||||
Control premium percent | 16.60% | |||
Maximum | ||||
Goodwill [Line Items] | ||||
Control premium percent | 24.40% | |||
M2M | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 98,600 | 98,981 | 98,496 | |
Percent fair value in excess of carrying value of goodwill | 7.00% | |||
Solutions | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 32,500 | $ 33,014 | $ 10,952 | |
Percent fair value in excess of carrying value of goodwill | 8.00% |
Summary of Significant Accounting Policies (Warranty) (Details) |
12 Months Ended |
---|---|
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Warranty period, minimum | 1 year |
Warranty period, maximum | 5 years |
Summary of Significant Accounting Policies (Revenue Recognition) (Details) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Hardware products | |||
Concentration Risk [Line Items] | |||
Percentage of revenue | 91.70% | 96.60% | 95.90% |
Service | |||
Concentration Risk [Line Items] | |||
Percentage of revenue | 8.30% | 3.40% | 4.10% |
Summary of Significant Accounting Policies (Foreign Currency Translation) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Accounting Policies [Abstract] | |||
Foreign currency net transaction gains (losses) | $ 0.1 | $ (0.7) | $ 0.6 |
Summary of Significant Accounting Policies (Net Income Per Common Share) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||
Income from continuing operations | $ 4,343 | [1],[2] | $ 1,335 | [1],[2] | $ 1,331 | [1],[2] | $ 2,357 | [1],[2] | $ 3,844 | [1],[2] | $ 4,277 | [1],[2] | $ 2,226 | [1],[2] | $ 3,131 | [1],[2] | $ 9,366 | $ 13,478 | $ 9,433 | ||||||||
Income (loss) from discontinued operations, after income taxes | 0 | 0 | 0 | 0 | 0 | 0 | (89) | 3,319 | 0 | 3,230 | (2,845) | ||||||||||||||||
Net income | $ 4,343 | [1],[2] | $ 1,335 | [1],[2] | $ 1,331 | [1],[2] | $ 2,357 | [1],[2] | $ 3,844 | [1],[2] | $ 4,277 | [1],[2] | $ 2,137 | [1],[2] | $ 6,450 | [1],[2] | $ 9,366 | $ 16,708 | $ 6,588 | ||||||||
Denominator for basic net income per common share — weighted average shares outstanding | 26,432,000 | 25,760,000 | 24,645,000 | ||||||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||||||
Stock options and restricted stock units | 667,000 | 551,000 | 582,000 | ||||||||||||||||||||||||
Denominator for diluted net income per common share — adjusted weighted average shares | 27,099,000 | 26,311,000 | 25,227,000 | ||||||||||||||||||||||||
Basic net income (loss) per common share: | |||||||||||||||||||||||||||
Continuing operations | $ 0.16 | $ 0.05 | $ 0.05 | $ 0.09 | $ 0.15 | $ 0.17 | $ 0.09 | $ 0.12 | $ 0.35 | $ 0.52 | $ 0.38 | ||||||||||||||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.13 | 0.00 | 0.13 | (0.12) | ||||||||||||||||
Net income (1) | 0.16 | 0.05 | 0.05 | 0.09 | 0.15 | 0.17 | 0.08 | 0.25 | 0.35 | 0.65 | 0.27 | [3] | |||||||||||||||
Diluted net income (loss) per common share: | |||||||||||||||||||||||||||
Continuing operations | 0.16 | 0.05 | 0.05 | 0.09 | 0.14 | 0.16 | 0.09 | 0.12 | 0.35 | 0.51 | 0.37 | ||||||||||||||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.13 | 0.00 | 0.12 | (0.11) | ||||||||||||||||
Net income (1) | $ 0.16 | $ 0.05 | $ 0.05 | $ 0.09 | $ 0.14 | $ 0.16 | $ 0.08 | $ 0.25 | $ 0.35 | $ 0.64 | [3] | $ 0.26 | |||||||||||||||
Antidilutive securities excluded from computation of earnings per share | 1,142,322 | 1,519,691 | 3,016,911 | ||||||||||||||||||||||||
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Acquisition (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 09, 2017 |
Nov. 01, 2016 |
Oct. 05, 2015 |
Sep. 30, 2017 |
Jun. 30, 2017 |
[1],[2] | Mar. 31, 2017 |
[1],[2] | Dec. 31, 2016 |
[1],[2] | Sep. 30, 2016 |
Jun. 30, 2016 |
[1],[2] | Mar. 31, 2016 |
[1],[2] | Dec. 31, 2015 |
[1],[2] | Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Goodwill | $ 131,995,000 | $ 109,448,000 | $ 131,995,000 | $ 109,448,000 | $ 100,183,000 | |||||||||||||||||||||
Revenues | 181,634,000 | 203,005,000 | 203,847,000 | |||||||||||||||||||||||
Net income (loss) | 4,343,000 | [1],[2] | $ 1,335,000 | $ 1,331,000 | $ 2,357,000 | 3,844,000 | [1],[2] | $ 4,277,000 | $ 2,137,000 | $ 6,450,000 | 9,366,000 | 16,708,000 | $ 6,588,000 | |||||||||||||
SMART Temps | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Cash paid at closing | $ 28,754,000 | |||||||||||||||||||||||||
Cash acquired | 500,000 | |||||||||||||||||||||||||
Goodwill | $ 18,816,000 | |||||||||||||||||||||||||
Weighted average useful life of acquired intangibles | 5 years 10 months 24 days | |||||||||||||||||||||||||
Revenues | 5,500,000 | |||||||||||||||||||||||||
Net income (loss) | (1,200,000) | |||||||||||||||||||||||||
Acquisition costs | 800,000 | |||||||||||||||||||||||||
FreshTemp | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Cash paid at closing | $ 1,697,000 | |||||||||||||||||||||||||
Earn-out payment maximum | 2,300,000 | |||||||||||||||||||||||||
Goodwill | $ 2,650,000 | |||||||||||||||||||||||||
Weighted average useful life of acquired intangibles | 5 years 9 months 18 days | |||||||||||||||||||||||||
Revenues | 500,000 | |||||||||||||||||||||||||
Acquisition costs | 60,000 | |||||||||||||||||||||||||
Bluenica Corporation | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Cash paid at closing | $ 2,900,000 | |||||||||||||||||||||||||
Earn-out payment maximum | $ 11,600,000 | |||||||||||||||||||||||||
Earn-out payment installment period | 4 years | |||||||||||||||||||||||||
Goodwill | $ 11,000,000 | |||||||||||||||||||||||||
Purchased and Core Technology | SMART Temps | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Estimated useful life of finite lived intangibles | 5 years | |||||||||||||||||||||||||
Purchased and Core Technology | FreshTemp | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Estimated useful life of finite lived intangibles | 5 years | |||||||||||||||||||||||||
Customer Relationships | SMART Temps | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Estimated useful life of finite lived intangibles | 7 years | |||||||||||||||||||||||||
Customer Relationships | FreshTemp | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Estimated useful life of finite lived intangibles | 7 years | |||||||||||||||||||||||||
Trademarks and Trade Names | SMART Temps | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Estimated useful life of finite lived intangibles | 5 years | |||||||||||||||||||||||||
Noncompete Agreements | SMART Temps | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Estimated useful life of finite lived intangibles | 5 years | |||||||||||||||||||||||||
Earn-out payments | SMART Temps | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Earn-out payment maximum | $ 7,200,000 | |||||||||||||||||||||||||
Additional earn-out payment | Bluenica Corporation | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Earn-out payment maximum | 3,500,000 | |||||||||||||||||||||||||
Fair Value, Measurements, Recurring | Contingent Consideration | Estimate of Fair Value Measurement | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Contingent consideration fair value | 6,388,000 | $ 9,960,000 | 6,388,000 | $ 9,960,000 | ||||||||||||||||||||||
Fair Value, Measurements, Recurring | Contingent Consideration | Estimate of Fair Value Measurement | SMART Temps | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Contingent consideration fair value | $ 10,000 | 0 | 0 | |||||||||||||||||||||||
Fair Value, Measurements, Recurring | Contingent Consideration | Estimate of Fair Value Measurement | FreshTemp | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Contingent consideration fair value | $ 1,300,000 | 400,000 | 400,000 | |||||||||||||||||||||||
Fair Value, Measurements, Recurring | Contingent Consideration | Estimate of Fair Value Measurement | Bluenica Corporation | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Contingent consideration fair value | $ 10,400,000 | $ 6,000,000 | $ 6,000,000 | |||||||||||||||||||||||
|
Acquisition Pro Forma (Details) - SMART Temps - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Business Acquisition [Line Items] | ||
Revenue | $ 182,568 | $ 207,494 |
Income from continuing operations | 8,675 | 11,370 |
Net income | $ 8,675 | $ 14,600 |
Discontinued Operations (Details) - Etherios, Inc. - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Oct. 31, 2017 |
Oct. 31, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Oct. 23, 2017 |
Sep. 30, 2017 |
Oct. 23, 2016 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Consideration receivable | $ 3,000 | ||||||
Proceeds from Divestiture of Business | $ 3,000 | ||||||
Receivable from Divestiture of Business | $ 2,000 | ||||||
Income tax benefit on discontinued operations | $ (476) | $ (1,627) | |||||
Forecast | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Consideration receivable | $ 2,000 | ||||||
Subsequent Event | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from Divestiture of Business | $ 2,000 |
Discontinued Operations (Income (loss) from Discontinued Operations, Net of Tax) (Details) - Etherios, Inc. - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Service revenue | $ 891 | $ 9,011 |
Cost of service | 713 | 8,101 |
Gross profit | 178 | 910 |
Operating expenses: | ||
Sales and marketing | 148 | 1,970 |
Research and development | 103 | 2,098 |
General and administrative | 43 | 1,208 |
Restructuring | 0 | 106 |
Total operating expenses | 294 | 5,382 |
Loss from discontinued operations, before income taxes | (116) | (4,472) |
Gain on sale of discontinued operations, before income taxes | 2,870 | 0 |
Income (loss) from discontinued operations, before income taxes | 2,754 | (4,472) |
Income tax benefit on discontinued operations | (476) | (1,627) |
Income (loss) from discontinued operations, after income taxes | $ 3,230 | $ (2,845) |
Discontinued Operations (Amortization, Depreciation, and Purchase of PPE) (Details) - Etherios, Inc. - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Amortization of identifiable intangible assets | $ 30 | $ 483 |
Depreciation of property, equipment and improvements | 0 | 29 |
Purchases of property, equipment, improvements and certain other intangible assets | $ 0 | $ (11) |
Goodwill and other Identifiable Intangible Assets (Amortization Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Finite-Lived Intangible Assets [Line Items] | |||
2018 | $ 2,708 | ||
2019 | 2,341 | ||
2020 | 1,841 | ||
2021 | 1,484 | ||
2022 | 1,215 | ||
Cost of Sales and General and Administrative Expense [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 2,597 | $ 1,842 | $ 2,427 |
Goodwill and other Identifiable Intangible Assets (Goodwill) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Goodwill [Roll Forward] | ||
Beginning balance | $ 109,448 | $ 100,183 |
Acquisitions | 21,465 | 10,985 |
Foreign currency translation adjustment | 1,082 | (1,720) |
Ending balance | $ 131,995 | $ 109,448 |
Segment Information and Major Customers Summary of Operating Results by Segment (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017
USD ($)
segment
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
|
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 2 | ||
Revenue | $ 181,634 | $ 203,005 | $ 203,847 |
Operating income (loss) | 8,807 | 17,105 | 10,889 |
Depreciation and amortization | 5,497 | 4,584 | 5,347 |
M2M | |||
Segment Reporting Information [Line Items] | |||
Revenue | 174,237 | 202,294 | 203,847 |
Operating income (loss) | 12,804 | 18,822 | 10,889 |
Depreciation and amortization | 3,575 | 4,040 | 5,347 |
Solutions | |||
Segment Reporting Information [Line Items] | |||
Revenue | 7,397 | 711 | 0 |
Operating income (loss) | (3,997) | (1,717) | 0 |
Depreciation and amortization | $ 1,922 | $ 544 | $ 0 |
Segment Information and Major Customers Expended for Property, Plant and Equipment by Segment (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Payments to Acquire Property Plant and Equipment by Segment [Line Items] | |||
Expended for property, plant and equipment | $ 1,773 | $ 2,729 | $ 4,500 |
M2M | |||
Payments to Acquire Property Plant and Equipment by Segment [Line Items] | |||
Expended for property, plant and equipment | 1,738 | 2,641 | 4,500 |
Solutions | |||
Payments to Acquire Property Plant and Equipment by Segment [Line Items] | |||
Expended for property, plant and equipment | $ 35 | $ 88 | $ 0 |
Segment Information and Major Customers Total Assets by Segment (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Sep. 30, 2016 |
||
---|---|---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total Assets | $ 345,189 | $ 336,166 | ||
M2M | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total Assets | 182,555 | 184,917 | ||
Solutions | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total Assets | 47,644 | 13,599 | ||
Unallocated | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total Assets | [1] | $ 114,990 | $ 137,650 | |
|
Segment Information and Major Customers Goodwill by Segment (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Jun. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
---|---|---|---|---|
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Goodwill | $ 131,995 | $ 109,448 | $ 100,183 | |
M2M | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Goodwill | 98,981 | $ 98,600 | 98,496 | |
Solutions | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Goodwill | $ 33,014 | $ 32,500 | $ 10,952 |
Segment Information and Major Customers Net Property, Equipment and Improvements by Segment (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Sep. 30, 2016 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net property, equipment and improvements | $ 12,801 | $ 14,041 |
North America, primarily United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net property, equipment and improvements | 12,648 | 13,861 |
International, primarily Europe | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net property, equipment and improvements | $ 153 | $ 180 |
Marketable Securities (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017
USD ($)
Security
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
|
Schedule of Available-for-sale Securities [Line Items] | |||
Number of securities below amortized cost basis | 25 | ||
Number of securities | 44 | ||
Proceeds from maturities of marketable securities | $ | $ 87,105 | $ 73,706 | $ 38,028 |
Current Assets | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, next twelve months, maximum year mature | 1 year | ||
Non-current Assets | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale Securities, year two through five, maximum year mature | 2 years |
Marketable Securities (Fair Value and Gross Unrealized Losses for AFS) (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Sep. 30, 2016 |
---|---|---|
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value of available-for-sale securities in continuous unrealized loss position for less than twelve months | $ 29,947 | $ 48,397 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (24) | (53) |
Fair value of available-for-sale securities in continuous unrealized loss position for twelve months or longer | 0 | 4,102 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | (1) |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value of available-for-sale securities in continuous unrealized loss position for less than twelve months | 26,196 | 24,454 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (20) | (33) |
Fair value of available-for-sale securities in continuous unrealized loss position for twelve months or longer | 0 | 4,102 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | (1) |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value of available-for-sale securities in continuous unrealized loss position for less than twelve months | 23,943 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (20) | |
Fair value of available-for-sale securities in continuous unrealized loss position for twelve months or longer | 0 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | |
Certificates of deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value of available-for-sale securities in continuous unrealized loss position for less than twelve months | 3,751 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (4) | |
Fair value of available-for-sale securities in continuous unrealized loss position for twelve months or longer | 0 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 |
(Financial Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||||
---|---|---|---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | $ 36,768 | [1] | $ 61,923 | [2] | |||||
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Total assets measured at fair value | 39,524 | 44,319 | |||||||
Total liabilities measured at fair value | 0 | 0 | |||||||
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Total assets measured at fair value | 36,768 | 61,923 | |||||||
Total liabilities measured at fair value | 0 | 0 | |||||||
Fair Value, Inputs, Level 3 | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Contingent consideration fair value | 6,388 | 9,960 | $ 0 | ||||||
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Total assets measured at fair value | 0 | 0 | |||||||
Total liabilities measured at fair value | 6,388 | 9,960 | |||||||
Contingent Consideration | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Contingent consideration fair value | 0 | 0 | |||||||
Contingent Consideration | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Contingent consideration fair value | 0 | 0 | |||||||
Contingent Consideration | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Contingent consideration fair value | 6,388 | 9,960 | |||||||
Money Market Funds | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Cash equivalents | 39,524 | 44,319 | |||||||
Money Market Funds | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Cash equivalents | 0 | 0 | |||||||
Money Market Funds | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Cash equivalents | 0 | 0 | |||||||
Corporate bonds | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 0 | 0 | |||||||
Corporate bonds | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 28,255 | 28,767 | |||||||
Corporate bonds | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 0 | 0 | |||||||
Commercial paper | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 0 | ||||||||
Commercial paper | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 23,943 | ||||||||
Commercial paper | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 0 | ||||||||
Certificates of deposit | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 0 | 0 | |||||||
Certificates of deposit | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 8,513 | 7,309 | |||||||
Certificates of deposit | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 0 | 0 | |||||||
Government municipal bonds | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 0 | ||||||||
Government municipal bonds | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 1,904 | ||||||||
Government municipal bonds | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 0 | ||||||||
Estimate of Fair Value Measurement | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Total assets measured at fair value | 76,292 | 106,242 | |||||||
Total liabilities measured at fair value | 6,388 | 9,960 | |||||||
Estimate of Fair Value Measurement | Contingent Consideration | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Contingent consideration fair value | 6,388 | 9,960 | |||||||
Estimate of Fair Value Measurement | Money Market Funds | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Cash equivalents | 39,524 | 44,319 | |||||||
Estimate of Fair Value Measurement | Corporate bonds | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 28,255 | 28,767 | |||||||
Estimate of Fair Value Measurement | Commercial paper | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | 23,943 | ||||||||
Estimate of Fair Value Measurement | Certificates of deposit | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | $ 8,513 | 7,309 | |||||||
Estimate of Fair Value Measurement | Government municipal bonds | Fair Value, Measurements, Recurring | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Available-for-sale marketable securities | $ 1,904 | ||||||||
|
Fair Value Measurements (Reconciliation of Liability) (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value at beginning of period | $ 9,960 | $ 0 |
Purchase price contingent consideration | 1,310 | 10,400 |
Contingent consideration payments | (518) | 0 |
Change in fair value of contingent consideration | (4,364) | (440) |
Fair value at end of period | $ 6,388 | $ 9,960 |
Fair Value Measurements (Details) - USD ($) |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Oct. 05, 2015 |
Sep. 30, 2017 |
Jan. 09, 2017 |
Nov. 01, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Fair Value, Inputs, Level 3 | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Contingent consideration fair value | $ 6,388,000 | $ 9,960,000 | $ 0 | |||
Contingent Consideration | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Contingent consideration fair value | $ 6,388,000 | 9,960,000 | ||||
Bluenica Corporation | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Earn-out payment installment period | 4 years | |||||
Bluenica Corporation | Minimum | Fair Value, Inputs, Level 3 | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Fair value inputs probability of payment | 93.50% | |||||
Bluenica Corporation | Maximum | Fair Value, Inputs, Level 3 | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Fair value inputs probability of payment | 98.50% | |||||
FreshTemp | Minimum | Fair Value, Inputs, Level 3 | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Fair value inputs probability of payment | 25.00% | |||||
FreshTemp | Maximum | Fair Value, Inputs, Level 3 | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Fair value inputs probability of payment | 100.00% | |||||
SMART Temps | Maximum | Fair Value, Inputs, Level 3 | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Fair value inputs probability of payment | 0.00% | |||||
Estimate of Fair Value Measurement | Contingent Consideration | Fair Value, Measurements, Recurring | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Contingent consideration fair value | $ 6,388,000 | $ 9,960,000 | ||||
Estimate of Fair Value Measurement | Bluenica Corporation | Contingent Consideration | Fair Value, Measurements, Recurring | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Contingent consideration fair value | $ 10,400,000 | 6,000,000 | ||||
Estimate of Fair Value Measurement | FreshTemp | Contingent Consideration | Fair Value, Measurements, Recurring | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Contingent consideration fair value | 400,000 | $ 1,300,000 | ||||
Estimate of Fair Value Measurement | SMART Temps | Contingent Consideration | Fair Value, Measurements, Recurring | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Contingent consideration fair value | $ 0 | $ 10,000 |
Product Warranty Obligation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Standard Product Warranty Accrual [Roll Forward] | |||
Beginning balance | $ 1,033 | $ 1,014 | $ 862 |
Warranties issued | 679 | 771 | 967 |
Settlements made | (725) | (752) | (815) |
Ending balance | $ 987 | $ 1,033 | $ 1,014 |
Restructuring (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Sep. 30, 2017
USD ($)
employee
|
Sep. 30, 2016
USD ($)
employee
|
Sep. 30, 2015
USD ($)
employee
|
|
Restructuring Reserve [Roll Forward] | ||||||
Restructuring reserve, beginning balance | $ 0 | $ 0 | $ 0 | $ 0 | ||
Restructuring charge | $ 2,500 | $ 100 | 700 | 2,515 | 753 | 412 |
Payments for restructuring | (986) | (754) | (403) | |||
Restructuring reversals | (6) | (9) | ||||
Restructuring foreign currency fluctuation | 127 | 7 | ||||
Restructuring reserve, ending balance | 1,656 | 0 | 0 | |||
Employee Severance | 2017 Restructuring | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring reserve, beginning balance | 0 | 0 | 0 | 0 | ||
Restructuring charge | 2,258 | 0 | 0 | |||
Payments for restructuring | (845) | 0 | 0 | |||
Restructuring reversals | 0 | 0 | ||||
Restructuring foreign currency fluctuation | 115 | 0 | ||||
Restructuring reserve, ending balance | 1,528 | 0 | 0 | |||
Employee Severance | 2016 Restructuring | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring reserve, beginning balance | 0 | 0 | 0 | 0 | ||
Restructuring charge | 0 | 558 | 0 | |||
Payments for restructuring | 0 | (559) | 0 | |||
Restructuring reversals | (6) | 0 | ||||
Restructuring foreign currency fluctuation | 0 | 7 | ||||
Restructuring reserve, ending balance | 0 | 0 | 0 | |||
Employee Severance | 2015 Restructuring | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring reserve, beginning balance | 0 | 0 | 0 | 0 | ||
Restructuring charge | 0 | 0 | 412 | |||
Payments for restructuring | 0 | 0 | (403) | |||
Restructuring reversals | 0 | (9) | ||||
Restructuring foreign currency fluctuation | 0 | 0 | ||||
Restructuring reserve, ending balance | 0 | 0 | 0 | |||
Facility Closing | 2017 Restructuring | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring reserve, beginning balance | 0 | 0 | 0 | 0 | ||
Restructuring charge | 257 | 0 | 0 | |||
Payments for restructuring | (141) | 0 | 0 | |||
Restructuring reversals | 0 | 0 | ||||
Restructuring foreign currency fluctuation | 12 | 0 | ||||
Restructuring reserve, ending balance | 128 | 0 | 0 | |||
Facility Closing | 2016 Restructuring | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring reserve, beginning balance | $ 0 | 0 | 0 | 0 | ||
Restructuring charge | 0 | 195 | 0 | |||
Payments for restructuring | 0 | (195) | 0 | |||
Restructuring reversals | 0 | 0 | ||||
Restructuring foreign currency fluctuation | 0 | 0 | ||||
Restructuring reserve, ending balance | $ 0 | $ 0 | $ 0 | |||
FRANCE | 2017 Restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and Related Cost, Number of Positions Eliminated | employee | 8 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | $ 2,500 | |||||
FRANCE | Employee Severance | 2017 Restructuring | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | 2,300 | |||||
FRANCE | Facility Closing | 2017 Restructuring | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | $ 200 | |||||
UNITED STATES | 2017 Restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and Related Cost, Number of Positions Eliminated | employee | 10 | |||||
UNITED STATES | 2016 Restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and Related Cost, Number of Positions Eliminated | employee | 5 | |||||
UNITED STATES | Employee Severance | 2016 Restructuring | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | $ 100 | |||||
GERMANY | 2016 Restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and Related Cost, Number of Positions Eliminated | employee | 10 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | $ 700 | |||||
GERMANY | Employee Severance | 2016 Restructuring | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | 500 | |||||
GERMANY | Facility Closing | 2016 Restructuring | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | $ 200 | |||||
INDIA | 2015 Restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and Related Cost, Number of Positions Eliminated | employee | 38 | |||||
INDIA | Employee Severance | 2015 Restructuring | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | $ 400 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Dec. 31, 2015 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Tax Credit Carryforward [Line Items] | |||||||||
U.S. capital loss carryforward | $ 5,500 | $ 5,500 | |||||||
Valuation allowance | 5,952 | $ 5,970 | 5,952 | $ 5,970 | |||||
Net tax benefits | 200 | $ 700 | $ 100 | 200 | $ 500 | $ 700 | 1,000 | 1,500 | $ 800 |
Accrued income tax penalties and interest for unrecognized tax benefits | 100 | $ 200 | 100 | $ 200 | |||||
Accumulated undistributed foreign earnings | 34,600 | 34,600 | |||||||
Maximum | |||||||||
Tax Credit Carryforward [Line Items] | |||||||||
Estimated unrecognized deferred tax liability | 600 | 600 | |||||||
United States Federal Tax Jurisdiction | |||||||||
Tax Credit Carryforward [Line Items] | |||||||||
Federal and state research and development tax credits | 2,000 | 2,000 | |||||||
U.S. capital loss carryforward | 5,100 | 5,100 | |||||||
Foreign Tax Authority | |||||||||
Tax Credit Carryforward [Line Items] | |||||||||
Non-U.S. operating losses | $ 400 | $ 400 |
Income Taxes (Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Tax Disclosure [Abstract] | |||
United States | $ 5,170 | $ 9,841 | $ 6,934 |
International | 4,321 | 6,849 | 6,183 |
Income from continuing operations, before income taxes | $ 9,491 | $ 16,690 | $ 13,117 |
Income Taxes (Income Tax Provision) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Current: | |||
Federal | $ 312 | $ (141) | $ 1,452 |
State | 165 | 139 | 453 |
Foreign | 1,756 | 2,099 | 2,279 |
Deferred: | |||
U.S. | (1,454) | 1,260 | (297) |
Foreign | (654) | (145) | (203) |
Income tax provision | $ 125 | $ 3,212 | $ 3,684 |
Income Taxes (Deferred Tax Assets) (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Sep. 30, 2016 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Current deferred tax asset | $ 0 | $ 0 |
Non-current deferred tax asset | 9,211 | 7,295 |
Current deferred tax liability | 0 | 0 |
Non-current deferred tax liability | (534) | (616) |
Net deferred tax asset | 8,677 | 6,679 |
Uncollectible accounts and other reserves | 1,063 | 915 |
Depreciation and amortization | (673) | 421 |
Inventories | 824 | 683 |
Compensation costs | 5,863 | 4,925 |
Tax carryforwards | 7,514 | 6,263 |
Valuation allowance | (5,952) | (5,970) |
Identifiable intangible assets | (581) | (558) |
Other | 619 | 0 |
Net deferred tax asset | $ 8,677 | $ 6,679 |
Income Taxes (Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Statutory income tax amount | $ 2,917 | $ 5,548 | $ 4,491 |
State taxes, net of federal benefits | (125) | 204 | (190) |
Utilization of tax credits | (1,168) | (1,116) | (250) |
Manufacturing deduction | (150) | (450) | (285) |
Discrete tax benefits | (954) | (1,461) | (818) |
Foreign operations | 218 | 276 | 181 |
Valuation reserve | 159 | (43) | 297 |
Adjustment of tax contingency reserves | 257 | 202 | 71 |
Meals and entertainment | 63 | 55 | 64 |
Employee stock purchase plan | 79 | 83 | 76 |
Contingent consideration | (1,172) | (154) | 0 |
Other, net | 1 | 68 | 47 |
Income tax provision | $ 125 | $ 3,212 | $ 3,684 |
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning balance | $ 1,708 | $ 1,618 | $ 2,301 |
Increases related to prior year income tax positions | 21 | 107 | 110 |
Increases related to current year income tax positions | 257 | 240 | 144 |
Decreases related to prior year income tax positions | 0 | (71) | (255) |
Decreases related to settlements | 0 | (30) | (74) |
Decreases related to expiration of statute of limitations | (651) | (156) | (608) |
Unrecognized tax benefits, ending balance | $ 1,335 | $ 1,708 | $ 1,618 |
Income Taxes (Unrecognized Tax Benefits, Additional Information) (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2014 |
---|---|---|---|---|
Income Tax Contingency [Line Items] | ||||
Unrecognized tax benefits that would impact effective tax rate | $ 1,200 | |||
Expected change in unrecognized tax benefits, minimum | 100 | |||
Unrecognized tax benefits | 1,335 | $ 1,708 | $ 1,618 | $ 2,301 |
Accrued income tax penalties and interest for unrecognized tax benefits | 100 | $ 200 | ||
Noncurrent income taxes payable | ||||
Income Tax Contingency [Line Items] | ||||
Unrecognized tax benefits | 700 | |||
Noncurrent deferred tax assets | ||||
Income Tax Contingency [Line Items] | ||||
Unrecognized tax benefits | $ 600 |
Stock-Based Compensation (Details) - USD ($) |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jan. 25, 2010 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Jan. 30, 2017 |
Feb. 01, 2016 |
Jan. 27, 2014 |
Jan. 28, 2013 |
Dec. 04, 2009 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Proceeds from employee stock purchase plan transactions | $ 685,000 | $ 896,000 | $ 925,000 | ||||||
Shares Paid for Tax Withholding for Share Based Compensation | 49,684 | 47,464 | 9,371 | ||||||
Adjustments Related to Tax Withholding for Share-based Compensation | $ 700,000 | $ 600,000 | $ 100,000 | ||||||
Proceeds from stock option plan transactions | 3,502,000 | 7,191,000 | 6,559,000 | ||||||
Excess tax benefits from stock-based compensation | 326,000 | 212,000 | 0 | ||||||
Total intrinsic value of all options exercised | $ 900,000 | 1,900,000 | 900,000 | ||||||
Forfeiture rate | 10.00% | ||||||||
Total grant date fair value of shares vested | $ 2,400,000 | 2,900,000 | |||||||
Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total unrecognized compensation cost nonvested awards | $ 3,400,000 | ||||||||
Weighted average period, unrecognized compensation cost, nonvested awards | 2 years 10 months 24 days | ||||||||
Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted average period, unrecognized compensation cost, nonvested awards | 1 year 2 months 12 days | ||||||||
Total unrecognized compensation cost, restricted stock units | $ 3,800,000 | ||||||||
The 2017 Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized | 1,500,000 | ||||||||
Number of shares available for future grants | 1,583,578 | ||||||||
The 2017 Plan | Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expiration period | 7 years | ||||||||
Vesting period | 4 years | ||||||||
The 2016 Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized | 1,500,000 | ||||||||
The 2016 Plan | Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expiration period | 7 years | ||||||||
Vesting period | 4 years | ||||||||
The 2014 Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized | 2,250,000 | ||||||||
The 2014 Plan | Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expiration period | 8 years | ||||||||
Vesting period | 4 years | ||||||||
The 2013 Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized | 1,750,000 | ||||||||
The 2013 Plan | Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expiration period | 8 years | ||||||||
Vesting period | 4 years | ||||||||
The Omnibus Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized | 5,750,000 | ||||||||
Number of additional shares authorized | 2,500,000 | ||||||||
The Purchase Plan | The Purchase Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized | 2,800,000 | ||||||||
Proceeds from employee stock purchase plan transactions | $ 700,000 | $ 900,000 | $ 900,000 | ||||||
Number of continuous days of service | 90 days | ||||||||
Number of hours per week employed | 20 hours | ||||||||
Percent of market value | 85.00% | ||||||||
Offering period | 3 months | ||||||||
Common shares issued to employees | 72,594 | 103,915 | 123,847 | ||||||
Shares available for future issuance | 441,022 | ||||||||
Director | The 2017 Plan | Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 1 year | ||||||||
Director | The 2016 Plan | Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 1 year | ||||||||
Director | The 2014 Plan | Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 1 year | ||||||||
Director | The 2013 Plan | Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 1 year | ||||||||
Executives and Employees | The 2017 Plan | Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 4 years | ||||||||
Executives and Employees | The 2016 Plan | Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 4 years | ||||||||
Executives and Employees | The 2014 Plan | Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 4 years |
Stock-Based Compensation (Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation before income taxes | $ 4,659 | $ 3,649 | $ 3,881 |
Income tax benefit | (1,536) | (1,185) | (1,343) |
Stock-based compensation after income taxes | 3,123 | 2,464 | 2,538 |
Cost of Sales | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation before income taxes | 213 | 215 | 221 |
Sales and Marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation before income taxes | 1,348 | 921 | 1,158 |
Research and Development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation before income taxes | 656 | 590 | 561 |
General and Administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation before income taxes | $ 2,442 | $ 1,923 | $ 1,941 |
Stock-Based Compensation (Options and Common Shares Reserved for Grant) (Details) - Stock Options $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
$ / shares
shares
| |
Options Outstanding [Roll Forward] | |
Options Outstanding, Beginning Balance | shares | 3,963 |
Options Outstanding, Granted | shares | 601 |
Options Outstanding, Exercised | shares | (335) |
Options Outstanding, Forfeited / Cancelled | shares | (327) |
Options Outstanding, Ending Balance | shares | 3,902 |
Options Outstanding, Exercisable | shares | 2,746 |
Weighted Average Exercise Price [Roll Forward] | |
Weighted Average Exercise Price, Beginning Balance | $ 10.36 |
Weighted Average Exercise Price, Granted | 12.86 |
Weighted Average Exercise Price, Exercised | 10.45 |
Weighted Average Exercise Price, Forfeited / Cancelled | 12.68 |
Weighted Average Exercise Price, Ending Balance | 10.54 |
Weighted Average Exercise Price, Exercisable | $ 10.18 |
Weighted Average Remaining Contractual Term [Abstract] | |
Weighted Average Remaining Contractual Term, Outstanding | 4 years 2 months 12 days |
Weighted Average Remaining Contractual Term, Exercisable | 3 years 6 months |
Aggregate Intrinsic Value [Abstract] | |
Aggregate Intrinsic Value, Outstanding | $ | $ 3,593 |
Aggregate Intrinsic Value, Exercisable | $ | $ 2,769 |
Closing Stock Price | $ 10.60 |
Stock-Based Compensation (Fair Value Assumptions) (Details) - Stock Options - $ / shares |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average per option grant date fair value | $ 4.63 | $ 3.90 | $ 2.98 |
Assumptions Used For Options Grants [Abstract] | |||
Risk free interest rate, minimum | 1.46% | 1.22% | 1.57% |
Risk free interest rate, maximum | 1.96% | 1.85% | 1.85% |
Expected term | 6 years | 6 years | 6 years |
Expected volatility rate, minimum | 33.00% | 32.00% | 32.00% |
Expected volatility rate, maximum | 34.00% | 33.00% | 36.00% |
Weighted average volatility | 34.00% | 32.00% | 35.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Stock-Based Compensation (Exercise Price Range) (Details) - Stock Options shares in Thousands |
12 Months Ended |
---|---|
Sep. 30, 2017
$ / shares
shares
| |
$7.40 - $8.30 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range | $ 7.40 |
Exercise Price Range, Upper Range | $ 8.30 |
Options Outstanding | shares | 858 |
Weighted Average Remaining Contractual Term | 4 years 3 days |
Weighted Average Exercise Price, Options Outstanding | $ 7.95 |
Number of Shares Vested, Options Exercisable | shares | 623 |
Weighted Average Exercise Price, Options Exercisable | $ 7.92 |
$8.31 - $9.59 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range | 8.31 |
Exercise Price Range, Upper Range | $ 9.59 |
Options Outstanding | shares | 623 |
Weighted Average Remaining Contractual Term | 3 years 11 months 23 days |
Weighted Average Exercise Price, Options Outstanding | $ 9.14 |
Number of Shares Vested, Options Exercisable | shares | 551 |
Weighted Average Exercise Price, Options Exercisable | $ 9.16 |
$9.60 - $10.52 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range | 9.60 |
Exercise Price Range, Upper Range | $ 10.52 |
Options Outstanding | shares | 554 |
Weighted Average Remaining Contractual Term | 4 years 7 days |
Weighted Average Exercise Price, Options Outstanding | $ 9.86 |
Number of Shares Vested, Options Exercisable | shares | 405 |
Weighted Average Exercise Price, Options Exercisable | $ 9.84 |
$10.53 - $10.81 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range | 10.53 |
Exercise Price Range, Upper Range | $ 10.81 |
Options Outstanding | shares | 567 |
Weighted Average Remaining Contractual Term | 3 years 10 months 27 days |
Weighted Average Exercise Price, Options Outstanding | $ 10.73 |
Number of Shares Vested, Options Exercisable | shares | 556 |
Weighted Average Exercise Price, Options Exercisable | $ 10.72 |
$10.82 - $12.63 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range | 10.82 |
Exercise Price Range, Upper Range | $ 12.63 |
Options Outstanding | shares | 604 |
Weighted Average Remaining Contractual Term | 4 years 9 months 25 days |
Weighted Average Exercise Price, Options Outstanding | $ 12.11 |
Number of Shares Vested, Options Exercisable | shares | 394 |
Weighted Average Exercise Price, Options Exercisable | $ 11.96 |
$12.64 - $14.75 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range | 12.64 |
Exercise Price Range, Upper Range | $ 14.75 |
Options Outstanding | shares | 490 |
Weighted Average Remaining Contractual Term | 6 years 1 month 2 days |
Weighted Average Exercise Price, Options Outstanding | $ 13.53 |
Number of Shares Vested, Options Exercisable | shares | 11 |
Weighted Average Exercise Price, Options Exercisable | $ 14.75 |
$14.76 - $15.23 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range | 14.76 |
Exercise Price Range, Upper Range | $ 15.23 |
Options Outstanding | shares | 206 |
Weighted Average Remaining Contractual Term | 1 month 27 days |
Weighted Average Exercise Price, Options Outstanding | $ 15.23 |
Number of Shares Vested, Options Exercisable | shares | 206 |
Weighted Average Exercise Price, Options Exercisable | $ 15.23 |
$7.40 - $15.23 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range | 7.40 |
Exercise Price Range, Upper Range | $ 15.23 |
Options Outstanding | shares | 3,902 |
Weighted Average Remaining Contractual Term | 4 years 2 months 4 days |
Weighted Average Exercise Price, Options Outstanding | $ 10.54 |
Number of Shares Vested, Options Exercisable | shares | 2,746 |
Weighted Average Exercise Price, Options Exercisable | $ 10.18 |
Stock-Based Compensation (Non-Vested Options) (Details) - Restricted Stock Units shares in Thousands |
12 Months Ended |
---|---|
Sep. 30, 2017
$ / shares
shares
| |
Nonvested Number of Restricted Stock Units [Roll Forward] | |
Number of Restricted Stock Units, Beginning Balance | shares | 505 |
Number of Restricted Stock Units, Granted | shares | 285 |
Number of Restricted Stock Units, Vested | shares | (202) |
Number of Restricted Stock Units, Canceled | shares | (22) |
Number of Restricted Stock Units, Ending Balance | shares | 566 |
Nonvested Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share [Roll Forward] | |
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Beginning Balance | $ / shares | $ 9.67 |
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Granted | $ / shares | 12.77 |
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Vested | $ / shares | 9.42 |
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Canceled | $ / shares | 10.59 |
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Ending Balance | $ / shares | $ 11.28 |
Common Stock Repurchase (Details) - USD ($) |
1 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Oct. 31, 2014 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
May 02, 2017 |
Apr. 26, 2016 |
Oct. 28, 2014 |
Oct. 29, 2013 |
|
Shares repurchased, value | $ 938,000 | $ 550,000 | $ 2,339,000 | |||||
October 2013 authorized repurchase program | ||||||||
Stock repurchase program, authorized amount | $ 20,000,000 | |||||||
Shares repurchased | 287,787 | |||||||
Shares repurchased, value | $ 2,200,000 | |||||||
October 2014 authorized repurchase program | ||||||||
Stock repurchase program, authorized amount | $ 15,000,000 | |||||||
Shares repurchased | 0 | |||||||
April 2016 authorized repurchase program | ||||||||
Stock repurchase program, authorized amount | $ 15,000,000 | |||||||
Shares repurchased | 0 | |||||||
May 2017 authorized repurchase program | ||||||||
Stock repurchase program, authorized amount | $ 20,000,000 | |||||||
Shares repurchased | 28,691 | |||||||
Shares repurchased, value | $ 300,000 | |||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 19,700,000 |
Share Rights Plan (Details) - Series A Junior Participating Preferred Stock |
Sep. 30, 2017
$ / shares
shares
|
---|---|
Class of Warrant or Right [Line Items] | |
Amount of shares eligible to buy | shares | 0.01 |
Exercise price | $ / shares | $ 60 |
Employee Benefit Plans (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Defined Contribution Plan Disclosure [Line Items] | |||
Matching contributions, amount | $ 1.4 | $ 1.4 | $ 1.7 |
Defined contribution plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum annual contribution per employee percentage | 25.00% | ||
Defined contribution plan | Full Employer Match | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employers percent of matching contributions | 100.00% | ||
Percent of employees' gross pay for employer match | 3.00% | ||
Defined contribution plan | Half Employer Match | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employers percent of matching contributions | 50.00% | ||
Percent of employees' gross pay for employer match | 2.00% |
Commitments (Details) $ in Thousands |
Sep. 30, 2017
USD ($)
|
---|---|
Leases, Operating [Abstract] | |
2018 | $ 1,398 |
2019 | 1,148 |
2020 | 609 |
2021 | 277 |
2022 | 208 |
Thereafter | 121 |
Total minimum payments required | $ 3,761 |
Commitments (Rent Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Leases, Operating [Abstract] | |||
Rentals | $ 1,342 | $ 1,613 | $ 2,076 |
Less: sublease rentals | 0 | (46) | (56) |
Total rental expense | $ 1,342 | $ 1,567 | $ 2,020 |
Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||
Total revenue | $ 45,105 | $ 45,739 | $ 45,615 | $ 45,175 | $ 50,454 | $ 52,130 | $ 50,162 | $ 50,259 | $ 181,634 | $ 203,005 | $ 203,847 | ||||||||||||||||
Gross profit | 21,334 | 22,485 | 21,902 | 21,453 | 24,604 | 25,977 | 24,742 | 24,357 | 87,174 | 99,680 | 97,121 | ||||||||||||||||
Income from continuing operations | 4,343 | [1],[2] | 1,335 | [1],[2] | 1,331 | [1],[2] | 2,357 | [1],[2] | 3,844 | [1],[2] | 4,277 | [1],[2] | 2,226 | [1],[2] | 3,131 | [1],[2] | 9,366 | 13,478 | 9,433 | ||||||||
Income (loss) from discontinued operations, after income taxes | 0 | 0 | 0 | 0 | 0 | 0 | (89) | 3,319 | 0 | 3,230 | (2,845) | ||||||||||||||||
Net income | $ 4,343 | [1],[2] | $ 1,335 | [1],[2] | $ 1,331 | [1],[2] | $ 2,357 | [1],[2] | $ 3,844 | [1],[2] | $ 4,277 | [1],[2] | $ 2,137 | [1],[2] | $ 6,450 | [1],[2] | $ 9,366 | $ 16,708 | $ 6,588 | ||||||||
Continuing operations | $ 0.16 | $ 0.05 | $ 0.05 | $ 0.09 | $ 0.15 | $ 0.17 | $ 0.09 | $ 0.12 | $ 0.35 | $ 0.52 | $ 0.38 | ||||||||||||||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.13 | 0.00 | 0.13 | (0.12) | ||||||||||||||||
Net income per common share, basic (USD per share) | 0.16 | 0.05 | 0.05 | 0.09 | 0.15 | 0.17 | 0.08 | 0.25 | 0.35 | 0.65 | 0.27 | [3] | |||||||||||||||
Continuing operations | 0.16 | 0.05 | 0.05 | 0.09 | 0.14 | 0.16 | 0.09 | 0.12 | 0.35 | 0.51 | 0.37 | ||||||||||||||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.13 | 0.00 | 0.12 | (0.11) | ||||||||||||||||
Net income per common share, diluted (USD per share) | $ 0.16 | $ 0.05 | $ 0.05 | $ 0.09 | $ 0.14 | $ 0.16 | $ 0.08 | $ 0.25 | $ 0.35 | $ 0.64 | [3] | $ 0.26 | |||||||||||||||
|
Quarterly Financial Data - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Net tax benefits | $ 200 | $ 700 | $ 100 | $ 200 | $ 500 | $ 700 | $ 1,000 | $ 1,500 | $ 800 | |
Restructuring charge | $ 2,500 | $ 100 | 700 | $ 2,515 | $ 753 | $ 412 | ||||
Restructuring accrual, net of tax | $ 1,600 | $ 100 | $ 400 |
Subsequent Event (Acquistion) (Details) - TempAlert - Subsequent Event $ in Millions |
Oct. 20, 2017
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Total purchase price consideration | $ 45.0 |
Cash paid at closing | 40.7 |
Performance 1 | |
Subsequent Event [Line Items] | |
Earn-out payment maximum | 35.0 |
Performance 2 | |
Subsequent Event [Line Items] | |
Earn-out payment maximum | $ 45.0 |
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||||
Valuation Allowance - Deferred Tax Assets | ||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||
Balance at beginning of period | $ 5,914 | $ 862 | $ 572 | |||||
Increase to costs and expenses | 136 | 5,260 | 316 | |||||
Valuation Allowances and Reserves, Additions for Charges to Other Accounts | 0 | 0 | 0 | |||||
Deductions | 98 | 208 | 26 | |||||
Balance at end of period | 5,952 | 5,914 | 862 | |||||
Valuation Account - Doubtful Accounts | ||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||
Balance at beginning of period | 209 | 285 | 367 | |||||
Increase to costs and expenses | 127 | 10 | 4 | |||||
Valuation Allowances and Reserves, Additions for Charges to Other Accounts | 20 | [1] | 0 | 0 | ||||
Deductions | [2] | 15 | 86 | 86 | ||||
Balance at end of period | 341 | 209 | 285 | |||||
Reserve for Future Returns and Pricing Adjustments | ||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||
Balance at beginning of period | 1,991 | 1,817 | 1,662 | |||||
Increase to costs and expenses | 10,447 | 9,946 | 7,002 | |||||
Valuation Allowances and Reserves, Additions for Charges to Other Accounts | 0 | 0 | 0 | |||||
Deductions | 10,269 | 9,772 | 6,847 | |||||
Balance at end of period | $ 2,169 | $ 1,991 | $ 1,817 | |||||
|
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