Supporting Financial Information

6 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supporting Financial Information

Supporting Financial Information

Accounts receivable

		(in thousands)
		March 31,		September 30,
	Ref	2021		2020
Billed receivables		$	34,572	$	24,598
Contract assets		7,103		7,943
Total accounts receivable		41,675		32,541
Less: Allowance for doubtful accounts	(a)	—		—
Accounts receivable, net		$	41,675	$	32,541

Ref (a): Accounts receivable are non-interest bearing, unsecured and carried at net realizable value. We evaluate our receivables on a quarterly basis and determine whether an allowance is appropriate based on specific collection issues. No allowance for doubtful accounts was deemed necessary at either March 31, 2021 or September 30, 2020.

Other current assets

	(in thousands)
	March 31,		September 30,
	2021		2020
Prepaid insurance and benefits	$	255	$	665
Other receivables	1,524		1,363
Other prepaid expenses	1,690		1,471
Other current assets	$	3,469	$	3,499

Equipment and improvements, net

		(in thousands)
		March 31,		September 30,
	Ref	2021		2020
Furniture and equipment		$	958	$	958
Computer equipment		1,212		1,171
Computer software		4,353		4,341
Leasehold improvements		1,595		1,595
Total equipment and improvements		8,118		8,065
Less accumulated depreciation and amortization	(a)	(5,525)		(4,726)
Equipment and improvements, net		$	2,593	$	3,339

Ref (a): Depreciation expense was $0.4 million and $0.6 million for the three months ended March 31, 2021 and 2020, respectively and $0.8 million and $1.2 million for the six months ended March 31, 2021 and 2020, respectively.

Intangible assets

		(in thousands)
		March 31,		September 30,
	Ref	2021		2020
Intangible assets	(a)
Customer contracts and related customer relationships		$	62,281	$	45,600
Covenants not to compete		522		480
Trade name		3,051		2,109
Acquired intangibles - IBA acquisition	(b)	—		16,223
Total intangible assets		65,854		64,412
Less accumulated amortization
Customer contracts and related customer relationships		(14,264)		(11,150)
Covenants not to compete		(238)		(212)
Trade name		(590)		(438)
Total accumulated amortization		(15,092)		(11,800)
Intangible assets, net		$	50,762	$	52,612

Ref (a): Intangible assets subject to amortization. The intangibles are amortized on a straight-line basis over their estimated useful lives of 10 years. The total amount of amortization expense was $1.6 million and $1.2 million for the three months ended March 31, 2021 and 2020, respectively and $3.3 million and $2.4 million for the six months ended March 31, 2021 and 2020, respectively.

Ref (b): Intangible assets reported at September 30, 2020 from the acquisition of IBA were based on an estimate and revised in the first quarter of fiscal 2021. A third party valued the acquired intangibles to be the $17.7 million; $16.7 million was attributable to customer contracts and customer relationships, and $0.9 million to trade name, and $0.1 million to covenants not to compete,

Estimated amortization expense for future years:	(in thousands)
Remaining Fiscal 2021	$	3,293
Fiscal 2022	6,585
Fiscal 2023	6,585
Fiscal 2024	6,585
Fiscal 2025	6,585
Thereafter	21,129
Total amortization expense	$	50,762

Goodwill

The changes in the carrying amount of goodwill as of March 31, 2021 are as follows:

		(in thousands)
	Ref	Total
Balance at September 30, 2019		$	52,758
Preliminary increase from IBA acquisition		14,386
Balance at September 30, 2020		67,144
Preliminary adjustment from IBA acquisition	(a)	(1,694)
Balance at December 31, 2020		65,450
Final adjustment from IBA acquisition	(a)	193
Balance at March 31, 2021		$	65,643

Ref (a): The adjustments were determined based on third party valuation.

Accounts payable, accrued expenses, and other current liabilities

	(in thousands)
	March 31,		September 30,
	2021		2020
Accounts payable	$	15,891	$	14,645
Accrued benefits	2,882		2,833
Accrued bonus and incentive compensation	1,492		2,340
Accrued workers' compensation insurance	6,512		5,529
Other accrued expenses	4,047		3,231
Accounts payable, accrued expenses, and other current liabilities	$	30,824	$	28,578

Debt obligations

	(in thousands)
	March 31,		September 30,
	2021		2020
Bank term loan	$	62,750	$	70,000
Less unamortized deferred financing costs	(2,427)		(2,729)
Net bank debt obligations	60,323		67,271
Less current portion of bank debt obligations, net of deferred financing costs	(3,124)		(6,727)
Long-term portion of bank debt obligations, net of deferred financing costs	$	57,199	$	60,544

Interest expense

		Three Months Ended				Six Months Ended
		March 31,				March 31,
(Amounts in thousands)	Ref	2021		2020		2021		2020
Interest expense	(a)	$	(801)	$	(742)	$	(1,671)	$	(1,593)
Amortization of deferred financing costs	(b)	(203)		(164)		(413)		(374)
Other income (expense), net	(c)	—		—		—		121
Interest expense, net		$	(1,004)	$	(906)	$	(2,084)	$	(1,846)

Ref (a): Interest expense on borrowing

Ref (b): Amortization of expenses related to term loan and revolving line of credit

Ref (c): Gain on lease modification due to a lease amendment