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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Dec. 31, 2016	Feb. 07, 2017
Document and Entity Information
Entity Registrant Name	LIQUIDITY SERVICES INC
Entity Central Index Key	0001235468
Document Type	10-Q
Document Period End Date	Dec. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		31,390,549
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1

Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Current assets:
Cash and cash equivalents	$ 126,914	$ 134,513
Accounts receivable, net of allowance for doubtful accounts of $802 and $718 at December 31, 2016 and September 30, 2016, respectively	10,711	10,355
Inventory	26,744	27,610
Tax refund receivable	1,217	1,205
Prepaid and deferred taxes	2,507	2,166
Prepaid expenses and other current assets ($2.6 million and $2.2 million measured at fair value as of December 31, 2016 and September 30, 2016, respectively)	9,045	9,063
Total current assets	177,138	184,912
Property and equipment, net	15,591	14,376
Intangible assets, net	2,324	2,650
Goodwill	44,786	45,134
Deferred long-term tax assets	1,021	1,021
Other assets	11,847	12,016
Total assets	252,707	260,109
Current liabilities:
Accounts payable	9,180	9,732
Accrued expenses and other current liabilities	43,054	45,133
Distributions payable	4,689	1,722
Customer payables	28,890	28,901
Total current liabilities	85,813	85,488
Deferred taxes and other long-term liabilities	11,119	12,010
Total liabilities	96,932	97,498
Stockholders’ equity:
Commitments and contingencies (Note 12)	0	0
Common stock, $0.001 par value; 120,000,000 shares authorized; 31,291,341 shares issued and outstanding at December 31, 2016; 30,742,662 shares issued and outstanding at September 30, 2016	29	29
Additional paid-in capital	222,392	220,192
Accumulated other comprehensive loss	(9,210)	(8,571)
Retained earnings (accumulated deficit)	(57,436)	(49,039)
Total stockholders’ equity	155,775	162,611
Total liabilities and stockholders’ equity	$ 252,707	$ 260,109

Unaudited Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 802	$ 718
Prepaid expenses and other current assets, fair value (in dollars)	$ 2,600	$ 2,200
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	120,000,000	120,000,000
Common stock, shares issued	31,291,341	30,742,662
Common stock, shares outstanding	31,291,341	30,742,662

Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
Revenue	$ 47,980	$ 50,138
Fee revenue	22,816	15,737
Total revenue	70,796	65,875
Costs and expenses:
Cost of goods sold (excluding amortization)	32,271	26,883
Client distributions	4,548	2,357
Technology and operations	21,892	22,807
Sales and marketing	9,987	9,460
General and administrative	9,857	10,068
Depreciation and amortization	1,429	1,672
Acquisition costs	0	39
Total costs and expenses	79,984	73,286
Other operating income	928	0
Loss from operations	(8,260)	(7,411)
Interest expense (income) and other expense, net	34	(60)
Loss before provision (benefit) for income taxes	(8,294)	(7,351)
Provision (benefit) for income taxes	103	(2,154)
Net loss	$ (8,397)	$ (5,197)
Basic and diluted loss per common share (USD per share)	$ (0.27)	$ (0.17)
Basic and diluted weighted average shares outstanding (in shares)	31,261,603	30,490,670

Unaudited Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
Net loss	$ (8,397)	$ (5,197)
Other comprehensive (loss) income:
Foreign currency translation	(639)	(757)
Other comprehensive loss, net of taxes	(639)	(757)
Comprehensive loss	$ (9,036)	$ (5,954)

Unaudited Consolidated Statement of Changes in Stockholders' Equity - 3 months ended Dec. 31, 2016 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Retained Earnings
Balance at Sep. 30, 2016	$ 162,611	$ 29	$ 220,192	$ (8,571)	$ (49,039)
Balance (in shares) at Sep. 30, 2016		30,742,662
Increase (Decrease) in Stockholders' Equity
Vesting of restricted stock (in shares)		548,679
Vesting of restricted stock and exercise of stock options	32		32
Compensation expense and incremental tax loss from grants of common stock options and restricted stock	2,168		2,168
Net loss	(8,397)
Foreign currency translation	(639)			(639)
Balance at Dec. 31, 2016	$ 155,775	$ 29	$ 222,392	$ (9,210)	$ (57,436)
Balance (in shares) at Dec. 31, 2016		31,291,341

Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Operating activities
Net loss	$ (8,397)	$ (5,197)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,429	1,672
Stock compensation expense	2,500	2,420
Provision for inventory allowance	715	1,208
Provision for doubtful accounts	84	78
Incremental tax loss from exercise of common stock options	0	48
Change in fair value of financial instruments	(928)	0
Changes in operating assets and liabilities:
Accounts receivable	(440)	77
Inventory	151	(3,152)
Prepaid and deferred taxes	(9)	(2,424)
Prepaid expenses and other assets	773	(969)
Accounts payable	(552)	594
Accrued expenses and other current liabilities	(2,922)	(2,070)
Distributions payable	2,967	(1,169)
Customer payables	(11)	583
Other liabilities	(381)	3
Net cash used in operating activities	(5,021)	(8,298)
Investing activities
Increase in intangibles	(7)	(29)
Purchases of property and equipment, including capitalized software	(2,321)	(1,428)
Net cash used in investing activities	(2,328)	(1,457)
Financing activities
Proceeds from exercise of common stock options (net of tax)	32	0
Incremental tax loss from exercise of common stock options	0	(48)
Net cash provided (used) by financing activities	32	(48)
Effect of exchange rate differences on cash and cash equivalents	(282)	(210)
Net decrease in cash and cash equivalents	(7,599)	(10,013)
Cash and cash equivalents at beginning of period	134,513	95,465
Cash and cash equivalents at end of period	126,914	85,452
Supplemental disclosure of cash flow information
Cash paid for income taxes, net	$ (209)	$ (237)

Organization	3 Months Ended
Organization	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Liquidity Services (the “Company”) operates a network of leading e-commerce marketplaces that enable buyers and sellers to transact in an efficient, automated environment offering over 500 product categories. The Company’s marketplaces provide professional buyers access to a global, organized supply of new, surplus, and scrap assets presented with digital images and other relevant product information. Additionally, the Company enables its corporate and government sellers to enhance their financial return on offered assets by providing a liquid marketplace and value-added services that encompass the consultative management, valuation, and sale of surplus assets. The Company's broad range of services include program management, valuation, asset management, reconciliation, RTV and RMA ("Return to Vendor" and "Returns Management Authorization"), refurbishment and recycling, fulfillment, marketing and sales, warehousing and transportation, buyer customer support, and compliance and risk mitigation. The Company organizes the products on its marketplaces into categories across major industry verticals such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, energy equipment, industrial capital assets, fleet and transportation equipment and specialty equipment. The Company’s marketplaces are www.liquidation.com, www.govliquidation.com, www.govdeals.com, www.networkintl.com, www.truckcenter.com, www.secondipity.com, www.unclesamsretailoutlet.com, www.go-dove.com, and www.irondirect.com. The Company has over 9,000 clients, including Fortune 1000 and Global 500 organizations as well as government agencies. The Company has one reportable segment consisting of an aggregation of five operating segments that manage e-commerce marketplaces for sellers and buyers of new, surplus, and scrap assets. The Company's operations are subject to certain risks and uncertainties, many of which are associated with technology-oriented companies, including, but not limited to, the Company's dependence on use of the Internet, the effect of general business and economic trends, the Company's susceptibility to rapid technological change, actual and potential competition by entities with greater financial and other resources, and the potential for the U.S. Government agencies from which the Company derives a significant portion of its inventory to change the way they conduct their surplus disposition or to otherwise not renew their contracts with the Company. The Company has evaluated subsequent events through the date that these financial statements were issued and filed with the Securities and Exchange Commission.

Summary of Significant Accounting Policies

3 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Unaudited Interim Financial Information

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation have been included. The information disclosed in the notes to the consolidated financial statements for these periods is unaudited. Operating results for the three months ended December 31, 2016 are not necessarily indicative of the results that may be expected for the year ending September 30, 2017 or for any future period. Fee revenue is revenue earned under the consignment model, as well as other fee revenue, and is presented separately as it accounts for more than 10% of total revenue.

New Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (FASB) issued Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (ASU 2015-05). The Company has adopted this guidance prospectively during the first quarter ended December 31, 2016. As a result of the adoption there was no impact to the Company's financial statements.

In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which supersedes most existing revenue recognition guidance under GAAP. The new standard will change the way the Company recognizes revenue and significantly expand the disclosure requirements for revenue arrangements. In July 2015, the FASB delayed the effective date of the new standard such that the new standard will be effective for the Company beginning on October 1, 2018, and may be adopted either retrospectively or on a modified retrospective basis whereby the new standard would be applied to new and existing arrangements with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to retained earnings at the effective date for existing arrangements with remaining performance obligations. The Company is currently evaluating the methods of adoption allowed by the new standard and the effect that adoption of the standard is expected to have on the Company's consolidated financial statements and related disclosures.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern, which requires management to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern and to provide disclosures in certain circumstances. The new guidance was issued to reduce diversity in the timing and content of footnote disclosures. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2016. The Company does not expect the adoption of this standard to have a material effect upon its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 will change the way the Company recognizes its leased assets. ASU 2016-02 will require organizations that lease assets—referred to as “lessees”—to recognize on the balance sheet the assets and liabilities representing the rights and obligations created by those leases. ASU 2016-02 will also require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The standard will be effective for the Company beginning on October 1, 2019. The Company is currently evaluating the methods of adoption allowed by the new standard and the effect that adoption of the standard is expected to have on the Company’s consolidated financial statements and related disclosures.

In March, 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718). The new standard will change certain aspects of accounting for share-based payments to employees. Under the new standard, the Company will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital (“APIC”). Instead, the Company will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement when the awards vest or are settled. The APIC pools will be eliminated. For interim reporting purposes, the Company will account for excess tax benefits and tax deficiencies as discrete items in the period in which they occur. The new standard will also allow the Company to repurchase more of an employee’s shares than it can today for income tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. The new guidance will require the Company to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. The standard will be effective for the Company beginning on October 1, 2017. The Company does not expect the adoption of this standard to have a material effect upon its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 clarifies how entities should classify certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of contingent consideration arising from a business combination, insurance settlement proceeds, and distributions from certain equity method investees, and amends certain disclosure requirements of Accounting Standards Codification ("ASC") 230. The guidance will generally be applied retrospectively and is effective for the Company for fiscal years beginning after December 15, 2017, and interim periods therein. The Company is currently evaluating the methods of adoption allowed by the new standard and the effect that adoption of the standard is expected to have on the Company’s consolidated financial statements and related disclosures.

Business Combinations

The Company recognizes all of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair value on the acquisition date. Acquisition-related costs are recognized separately from the acquisition and expensed as incurred. Restructuring costs incurred in periods subsequent to the acquisition date are expensed when incurred. Subsequent changes to the purchase price (i.e., working capital adjustments) or other fair value adjustments determined during the measurement period are recorded as an adjustment to goodwill, with the exception of contingent consideration, which is recognized in the statement of operations in the period it is modified. All subsequent changes to a valuation allowance or uncertain tax position that relate to the acquired company and existed at the acquisition date that occur both within the measurement period and as a result of facts and circumstances that existed at the acquisition date are recognized as an adjustment to goodwill. All other changes in valuation allowances are recognized as a reduction or increase to income tax expense.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and are non-interest bearing. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables. Allowances are based on management’s judgment, which considers historical experience and specific knowledge of accounts where collectability may not be probable. The Company makes provisions based on historical bad debt experience, a specific review of all significant outstanding invoices and an assessment of general economic conditions.

Inventory

Inventory consists of property obtained for resale, generally through the online auction process, and is stated at the lower of cost or market. Cost is determined using the specific identification method. Charges for unsellable inventory, as well as for inventory written down to expected market price, are included in Cost of goods sold in the period in which they have been determined to occur. As of December 31, 2016 and September 30, 2016, the Company’s inventory reserve was approximately $4.2 million and $3.4 million, respectively.

Prepaid expenses and other current assets

Prepaid expenses and other current assets includes prepaid income tax, financial assets, the short-term portion of a promissory note, as well as other miscellaneous prepaid expenses. Financial assets are related to participation agreements for principal transactions in the Company's commercial business. Changes in the fair value of the Company's financial assets are recorded in Other operating income.

Other Assets

On September 30, 2015, the Company sold certain assets related to its Jacobs Trading business to Tanager Acquisitions, LLC (the ‘‘Buyer’’). In connection with the disposition, the Buyer assumed certain liabilities related to the Jacobs Trading business. The Buyer issued a $12.3 million five-year interest bearing promissory note to the Company. Of the $12.3 million, $1 million has been repaid. Of the remaining $11.3 million, $9.8 million was recorded in Other assets, and $1.5 million in Prepaid expenses and other current assets as of December 31, 2016.

Earnings per Share

The Company calculates net income (loss) per share in accordance with FASB Topic 260 Earnings Per Share (“ASC 260”). Under ASC 260, basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. The weighted average number of shares of common stock outstanding includes vested restricted stock units. Diluted net income (loss) per share (“EPS”) reflects the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options and unvested restricted stock units. The dilutive effect of unexercised stock options and unvested restricted stock units was determined using the treasury stock method. Under the treasury stock method, the proceeds received from the exercise of stock options, the amount of compensation cost for future service not yet recognized by the Company and the amount of tax benefits that would be recorded in additional paid-in capital when stock options become deductible for income tax purposes are all assumed to be used to repurchase shares of the Company’s common stock. Stock options and restricted stock units are not included in the computation of diluted net income (loss) per share when they are antidilutive.

For the three months ended December 31, 2016 and 2015, the basic and diluted weighted average common shares were the same because the inclusion of dilutive securities in the computation of diluted net income would have been anti-dilutive. See Note 8 for outstanding stock options and unvested restricted stock, all of which are anti-dilutive for the three months ended December 31, 2016 and 2015.

The following summarizes the basic and diluted loss per share:



	Three Months Ended December 31,
	2016			2015
	(Unaudited) (dollars in thousands, except per share amounts)
Weighted average shares calculation:
Basic weighted average shares outstanding	31,261,603			30,490,670
Treasury stock effect of options and restricted stock	—			—

Diluted weighted average common shares outstanding	31,261,603			30,490,670

Net loss	$	(8,397	)	$	(5,197	)
Basic and diluted loss per common share	$	(0.27	)	$	(0.17	)

Stock-Based Compensation

The Company estimates the fair value of share-based awards on the date of grant. The fair value of stock options and stock appreciation rights is determined using the Black-Scholes option-pricing model. The fair value of restricted stock units is based on the closing price of the Company’s common stock on the date of grant. The determination of the fair value of the Company’s stock option units and stock appreciation rights is based on a variety of factors including, but not limited to, the Company’s common stock price, expected stock price volatility over the expected life of units, and actual and projected exercise behavior. Additionally, the Company has estimated forfeitures for share-based awards at the dates of grant based on historical experience, adjusted for future expectation. The forfeiture estimate is revised as necessary if actual forfeitures differ from these estimates.

The Company issues restricted stock units where restrictions lapse upon either the passage of time (service vesting conditions), achievement of performance targets (performance vesting conditions), or some combination thereof. For those restricted stock units with only service vesting conditions, the Company recognizes compensation cost on a straight-line basis over the explicit service period. For units with both performance and service vesting conditions, the Company starts recognizing compensation cost over the remaining service period, when it is probable the performance condition will be met.

For stock options and stock units that contain performance vesting conditions, the Company excludes these units from diluted earnings per share computations until the contingency is met as of the end of that reporting period.

The Company presents the cash flows from the tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) as a financing activity with a corresponding operating cash outflow in the Consolidated Statements of Cash Flows.

Significant Contracts	3 Months Ended
Significant Contracts	Dec. 31, 2016
Contractors [Abstract]
Significant Contracts	Significant Contracts The Company has a Surplus Contract with the Defense Logistics Agency Disposition Services (DLA). Under this contract the Company is the remarketer of substantially all Department of Defense (DoD) non-rolling stock surplus turned into the DLA, and available for sale within the United States, Puerto Rico, and Guam. The Surplus Contract requires the Company to purchase substantially all usable surplus property offered to the Company by the DoD at a fixed percentage of the DoD's original acquisition value (OAV). This fixed percentage is 4.35%; prior to the date the current Surplus Contract became effective, this fixed percentage was 1.8%. The Company retains 100% of the profits from the resale of the property and bears all of the costs for the merchandising and sale of the property. Included in Accrued expenses and other current liabilities in the Consolidated Balance Sheet is a liability to the DoD of $15.2 million and $16.1 million for inventory as of December 31, 2016 and September 30, 2016, respectively. The Surplus Contract permits either party to terminate the contract for convenience. The initial two-year base period ended in December 2016. On December 6, 2016, the DLA notified the Company that it was exercising the first 1-year extension option. The Surplus contract now extends through December 14, 2017. There are three one-year options to extend, exercisable by the DLA. Revenue from the Surplus Contract accounted for 29.9% and 31.0% of the Company's consolidated revenue for the quarters ended December 31, 2016 and 2015, respectively. The Company has a Scrap Contract with the DLA under which the Company is the remarketer of substantially all DoD non-electronic scrap turned into the DLA available for sale within the United States, Puerto Rico, and Guam. The DLA initiated an Invitation to Bid for the next Scrap Contract. Bids were solicited in February 2016, and the contract was awarded to the Company in April 2016. The contract is a three-year contract with 2 one-year options. The Company will pay a revenue-sharing payment to the DLA under this contract equal to 64.5% of the gross resale proceeds of the scrap property, and the Company will bear all of the costs for the sorting, merchandising and sale of the property. The contract contains a provision permitting the DLA to terminate the contract for convenience upon written notice to the Company from the DLA. The Company commenced operations under this contract in the quarter ended December 31, 2016. The original Scrap Contract was structured as a profit-sharing arrangement, whereby the profit sharing percentage to the DLA was 65.0%. As a result of moving from a profit-sharing arrangement to a revenue-sharing arrangement, the Company re-named the balance sheet line item from Profit-sharing distributions payable to Distributions payable as of December 31, 2016. Revenue from the Scrap Contract accounted for approximately 10.0% and 13.0% of the Company's consolidated revenue for the quarters ended December 31, 2016 and 2015, respectively. Additionally, the Company has a contract with a commercial client under which it acquires and sells commercial merchandise. Revenue generated from the arrangement represented approximately 12.9% and 9.2% of revenue during the quarter ended December 31, 2016 and 2015, respectively.

Goodwill

3 Months Ended

Dec. 31, 2016

Goodwill.

Goodwill

The goodwill of acquired companies is primarily related to the acquisition of an experienced and knowledgeable workforce. The following table presents goodwill balances and foreign currency translation adjustments to those balances during the three months ended December 31, 2016:



	Goodwill (in thousands)
Balance at September 30, 2016	$	45,134
Translation adjustments	(348		)
Balance at December 31, 2016	$	44,786

During fiscal year 2016, the Company made a voluntary change in the method of applying an accounting principle to change the date of the annual goodwill impairment assessment. The date was changed from September 30 to July 1. As a result, the last impairment assessment was performed as of July 1, 2016 and the Company identified indicators of impairment, and as a result performed step one of the goodwill impairment test. The Company performed the step one test using a discounted cash flow method. The Company concluded that the carrying value exceeded fair value for one of the Company's five reporting units that had goodwill. Accordingly, the Company performed the step two test to derive the fair value of the goodwill, and as a result recorded a $19.0 million impairment charge during the fourth quarter of fiscal 2016. The goodwill impairment was due to updated assumptions used in the fair value calculation.

During the three months ended December 31, 2016, the Company did not identify any indicators of impairment.

Intangible Assets

3 Months Ended

Dec. 31, 2016

Finite-Lived Intangible Assets, Net [Abstract]

Intangible Assets

The components of identifiable intangible assets as of December 31, 2016 and September 30, 2016 are as follows:



		December 31, 2016							September 30, 2016
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(dollars in thousands)
Contract intangibles	10	$	1,500	$	(188	)	$	1,312	$	1,500	$	(150	)	$	1,350
Brand and technology	3 - 5	5,749		(5,261		)	488		5,749		(5,018		)	731
Covenants not to compete	3 - 5	700		(558		)	142		700		(533		)	167
Patent and trademarks	3 - 10	820		(438		)	382		820		(418		)	402
Total intangible assets		$	8,769	$	(6,445	)	$	2,324	$	8,769	$	(6,119	)	$	2,650

Future expected amortization of intangible assets at December 31, 2016 is as follows:



	Future Amortization
Years ending September 30,	(in thousands)
2017 Remaining nine months	$	742
2018	281
2019	208
2020	957
2021 and thereafter	136
Total	$	2,324

Intangible assets amortization expense was approximately $0.3 million and $0.4 million for the three months ended December 31, 2016 and 2015, respectively. In prior years the Company presented amortization of contract intangibles on a separate line item within the consolidated statements of operations. During the third fiscal quarter of 2016, the Company reclassified amortization of contract intangibles to the depreciation and amortization line item.

Debt	3 Months Ended
Debt	Dec. 31, 2016
Debt Disclosure [Abstract]
Debt	Debt Senior Credit Facility Effective March 25, 2016, the Company terminated its $75 million senior credit facility. Borrowings under the Agreement bore interest at an annual rate equal to the 30 day LIBOR rate plus 1.25% (1.608% at December 31, 2015) and interest payments were due monthly. The Company’s borrowing availability under the Facility as of the date of termination was $37.5 million. There were no outstanding borrowings under the Facility at the time of its termination.

Income Taxes	3 Months Ended
Income Taxes	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s interim effective income tax rate is based on management’s best current estimate of the expected annual effective income tax rate. The Company recorded a pre-tax loss in the first quarter of fiscal year 2017 and its corresponding effective tax rate is approximately -1.3%. The Company applies the authoritative guidance related to uncertainty in income taxes. ASC 740 states that a benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of technical merits. The Company records unrecognized tax benefits as a reduction to its deferred tax asset for its net operating loss carryforward. During fiscal year 2016, the Company reduced its net operating loss carryforward by $0.7 million for unrecognized tax benefits related to federal and state tax exposures. During the three months ended December 31, 2016, the Company reduced its net operating loss carryforward by $0.2 million for unrecognized tax benefits related to federal and state tax exposures. The Company’s policy is to recognize interest and penalties in the period in which they occur in the income tax provision. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various state and local jurisdictions and in foreign jurisdictions, primarily Canada and the U.K. Currently, the Company has open federal and state income tax examinations for fiscals 2012 through 2015. The Company anticipates no material tax liability will arise from these examinations. The statute of limitations for U.S. federal income tax returns for years prior to fiscal 2013 is now closed. However, certain tax attribute carryforwards that were generated prior to fiscal 2013 may be adjusted upon examination by tax authorities if they are utilized.

Stockholders' Equity

3 Months Ended

Dec. 31, 2016

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Share Repurchase Program

The Company is authorized to repurchase issued and outstanding shares of its common stock under a share repurchase program approved by the Company's Board of Directors. Share repurchases may be made through open market purchases, privately negotiated transactions or otherwise, at times and in such amounts as management deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other market conditions. The repurchase program may be discontinued or suspended at any time, and will be funded using available cash. The Company's Board of Directors reviews the share repurchase program periodically, the last such review having occurred in May 2016. The Company did not repurchase shares under this program during the three months ended December 31, 2016 or 2015. As of December 31, 2016, the Company may repurchase an additional $10.1 million in shares under this program.

2006 Omnibus Long-Term Incentive Plan (the 2006 Plan)

Under the 2006 Omnibus LongTerm Incentive Plan, or the 2006 Plan, as amended, 10,000,000 shares of common stock were available for issuance. In February 2015, at the Company’s annual meeting of stockholders, the stockholders approved an amendment to the 2006 Plan which increased the shares available for issuance under the 2006 Plan by 3,000,000 shares and established a fungible share pool so that awards other than options or stock appreciation rights granted after January 9, 2015, would be counted as 1.5 shares from the shares reserved for issuance under the 2006 Plan. During the three months ended December 31, 2016, the Company canceled 40,718 options and 112,380 restricted shares with performance vesting conditions because the Compensation Committee, which administers the 2006 Plan, determined the performance goals had become unachievable. At December 31, 2016, there were 146,474 shares remaining reserved for issuance in connection with awards under the 2006 Plan.

During fiscal year 2016, the Company issued 1,062,668 cash-settled stock appreciation rights at the price of $4.57, and 153,338 cash-settled stock appreciation rights were forfeited. During the three months ended December 31, 2016, no stock appreciation rights were issued and 82,052 cash-settled stock appreciation rights were forfeited. Stock appreciation rights are recorded as liability awards. The maximum number of shares subject to options or stock appreciation rights that can be awarded under the 2006 Plan to any person is 1,000,000 per year. The maximum number of shares that can be awarded under the 2006 Plan to any person, other than pursuant to an option or stock appreciation right, is 700,000 per year. The Company issues stock appreciation rights where conditions lapse upon either the passage of time (service vesting), achievement of performance targets, or some combination of these conditions. For those stock appreciation rights with only service vesting conditions, the Company recognizes compensation cost on a straight-line basis over the explicit service period. For awards with both performance and service vesting conditions, the Company starts recognizing compensation cost over the remaining service period, when it is probable the performance vesting condition will be met. The stock appreciation rights that include only service vesting conditions generally vest over a period of one to four years conditioned on continued employment for the incentive period.

Stock Option Activity

A summary of the Company’s stock option activity for the three months ended December 31, 2016 and year ended September 30, 2016 is as follows:



	Options		Weighted- Average Exercise Price
Options outstanding at September 30, 2015	1,472,643		$	17.46
Options granted	583,228		6.68
Options exercised	(1,251	)	7.48
Options canceled	(346,133	)	16.99
Options outstanding at September 30, 2016	1,708,487		13.91
Options granted	—		—
Options exercised	(4,705	)	6.75
Options canceled	(72,375	)	11.15
Options outstanding at December 31, 2016	1,631,407		14.05
Options exercisable at December 31, 2016	1,050,256		17.14

The intrinsic value and weighted average remaining contractual life in years of outstanding and exercisable options at December 31, 2016 is approximately $1,853,745 and 6.27 and $390,643 and 4.88 respectively, based on a stock price of $9.75 on December 31, 2016. Over the last three years, volatility rates have ranged from 50.90% to 77.92%, the dividend rate has been 0%, risk free interest rates have ranged from 0.12% to 1.51% and expected forfeiture rates have ranged from 22.20% to 23.54%.

Restricted Share Activity

A summary of the Company’s restricted share activity for the three months ended December 31, 2016 and year ended September 30, 2016 is as follows:



	Restricted Shares		Weighted- Average Fair Value
Unvested restricted shares at September 30, 2015	2,367,187		$	16.08
Restricted shares granted	1,504,655		5.54
Restricted shares vested	(715,188	)	16.09
Restricted shares canceled	(495,409	)	20.25
Unvested restricted shares at September 30, 2016	2,661,245		9.34
Restricted shares granted	26,000		9.46
Restricted shares vested	(543,974	)	11.22
Restricted shares canceled	(223,207	)	10.11
Unvested restricted shares at December 31, 2016	1,920,064		8.73

The intrinsic value and weighted average remaining contractual life in years of unvested restricted shares at December 31, 2016 is approximately $18.72 million and 8.5 respectively, based on a stock price of $9.75 on December 31, 2016.

Fair Value Measurement

3 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurement

The Company measures and records in the accompanying consolidated financial statements certain assets and liabilities at fair value on a recurring basis. Authoritative guidance issued by the FASB establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three levels:


Level 1	Quoted market prices in active markets for identical assets or liabilities;


Level 2	Inputs other than Level 1 inputs that are either directly or indirectly observable; and


Level 3	Unobservable inputs developed using estimates and assumptions developed by the Company, which reflect those that a market participant would use.

As of September 30, 2016 and December 31, 2016, the Company had no Level 1 or Level 2 assets or liabilities measured at fair value. As of September 30, 2016 and December 31, 2016, the Company had financial assets that are measured at fair value and are classified as Level 3 assets within the fair value hierarchy. The Company has elected to record the financial assets using the fair value option under ASC 825, Financial Instruments. These financial assets represent the value of rights the Company holds from its participation in certain principal transactions in the Company's commercial business, where a third party partner owns the underlying assets to be sold, and the Company has contributed funds to the partner towards purchasing those underlying assets. These assets are included in Prepaid expenses and other current assets in the Consolidated Balance Sheets. The changes in financial assets measured at fair value for which the Company has used Level 3 inputs to determine fair value for the quarter ended December 31, 2016 are as follows ($ in thousands):



	Level 3 Assets

Balance at September 30, 2016	$	2,200
Acquisition of financial assets	2,662
Settlements	(3,162		)
Change in fair value of financial assets	928
Balance at December 31, 2016	$	2,628

When valuing its Level 3 assets, the Company gives consideration to asset condition, economic and/or market events, and other pertinent information that would impact its estimate of the expected generated proceeds. The valuation procedures are primarily based on management's projection of the value of the assets securing the financial investment. Management’s estimation of the fair value of these assets is based on the best information available in the circumstances and may incorporate management's own assumptions around market demand for these assets which could involve a level of judgment, taking into consideration a combination of internal and external factors. Changes in fair value of the Company's Level 3 assets are recorded in Other operating income in the Consolidated Statements of Operations.

The Company’s financial assets not measured at fair value are cash and cash equivalents (which includes cash and commercial paper with original maturities of less than 90 days). The Company believes the carrying value of these instruments approximates fair value due to their short-term maturities.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Defined Benefit Pension Plan

3 Months Ended

Dec. 31, 2016

Defined Benefit Pension Plan

Defined Benefit Pension Plan

Certain employees of Liquidity Services UK Limited (“GoIndustry”), which the Company acquired in July 2012, are covered by the Henry Butcher Pension Fund and Life Assurance Scheme (the “Scheme”), a qualified defined benefit pension plan.

The net periodic benefit recognized for the three months ended December 31, 2016 and 2015 included the following components:



	Three Months Ended December 31,
Qualified Defined Benefit Pension Plan	2016			2015
	(dollars in thousands)
Service cost	$	—		$	—
Interest cost	144			$	222
Expected return on plan assets	(204		)	(283		)
Amortization of prior service cost	—			—
Amortization of actuarial (gain)/loss	—			—
Amortization of transitional obligation/(asset)	—			—
Total net periodic benefit	$	(60	)	$	(61	)

Guarantees	3 Months Ended
Guarantees	Dec. 31, 2016
Guarantees [Abstract]
Guarantees	Guarantees During the second quarter of 2015, the Company issued a guarantee to GoIndustry and the Trustees (the “Trustees”) of the Scheme. Under the arrangement, the Company irrevocably and unconditionally (a) guarantees to the Trustees punctual performance by GoIndustry of all its Guaranteed Obligations, defined as all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally in any capacity whatsoever) of the Company to make payments to the Scheme up to a maximum of 10 million British pounds, (b) undertakes with the Trustees that, whenever GoIndustry does not pay any amount when due in respect of its Guaranteed Obligations, it must immediately on demand by the Trustees pay that amount as if it were the principal obligor; and (c) indemnifies the Trustees as an independent and primary obligation immediately on demand against any cost, charge, expense, loss or liability suffered or incurred by the Trustees if any payment obligation guaranteed by it is or becomes unenforceable, invalid or illegal; the amount of the cost, charge, expense, loss or liability under this indemnity will be equal to the amount the Trustees would otherwise have been entitled to recover on the basis of a guarantee. The guarantee is a continuing guarantee that will extend to the ultimate balance of all sums payable by the Company in respect of its Guaranteed Obligations. The funded status of the Scheme as of September 30, 2016, was disclosed in Note 14, Defined Benefit Pension Plan, to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2016.

Legal Proceedings	3 Months Ended
Legal Proceedings	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Legal Proceedings	Legal Proceedings Howard v. Liquidity Services, Inc., et al., Civ. No. 14-1183 (D. D. C. 2014). On July 14, 2014, Leonard Howard filed a putative class action complaint in the United States District Court for the District of Columbia (the ‘‘District Court’’) against the Company and its chief executive officer, chief financial officer, and chief accounting officer, on behalf of stockholders who purchased the Company’s common stock between February 1, 2012, and May 7, 2014. The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by, among other things, misrepresenting the Company’s growth initiative, growth potential, and financial and operating conditions, thereby artificially inflating its stock price, and seeks unspecified compensatory damages and costs and expenses, including attorneys’ and experts’ fees. On October 14, 2014, the Court appointed Caisse de Depot et Placement du Quebec and the Newport News Employees’ Retirement Fund as co-lead plaintiffs. The plaintiffs filed an amended complaint on December 15, 2014, which alleges substantially similar claims but which does not name the chief accounting officer as a defendant. On March 2, 2015, the Company moved to dismiss the amended complaint for failure to state a claim or plead fraud with the requisite particularity. On March 31, 2016, the Court granted that motion in part and denied it in part. Only the claims related to the Company’s retail division were not dismissed. On May 16, 2016, the Company answered the amended complaint. The scheduling order in this action requires that: document production be substantially complete by January 13, 2017; plaintiffs’ class certification motion be fully briefed by May 2, 2017; fact discovery be completed by August 31, 2017; and expert discovery be completed by February 23, 2018. The Company believes the allegations in the amended complaint are without merit and cannot estimate a range of potential liability, if any, at this time. Billard v. Angrick, et al., Civ. No. 16-1612-BAH (D. D. C. 2016) and Slingerland v. Angrick, et al., Civ. No. 16-1725-BAH (D. D. C. 2016) Two of the Company’s stockholders filed putative derivative actions against certain individuals who served on the Company’s Board of Directors or as members of its management between 2012 and 2014 (the “Defendants”). These actions sought recovery from those individuals, and not from the Company. Plaintiffs purportedly brought these actions on the Company’s behalf. Specifically, on August 8, 2016, Thomas Billard filed a putative derivative complaint in the District Court, which challenged conduct similar to that challenged in the Slingerland complaint filed in the Superior Court, and which asserted claims against the Defendants. The Billard complaint asserted derivative claims for breach of fiduciary, waste, unjust enrichment, and insider trading. On August 25, 2016, the Slingerland plaintiff filed a putative derivative complaint in the District Court that alleges substantially the same claims as the Billard complaint. On December 15, 2016, the Court in the Billard action dismissed the complaint without prejudice on forum non conveniens grounds based on a Delaware forum selection clause contained in the Company’s bylaws. Shortly thereafter, the Slingerland plaintiff voluntarily dismissed his complaint in light of the dismissal of the Billard action. Giradi v. Angrick, et. al., no assigned C.A. No., and Slingerland v. Angrick, et. al., no assigned C.A. No. On February 2, 2017, plaintiff David Giradi filed a copycat derivative complaint in the Court of Chancery of the State of Delaware that largely tracks the Slingerland and Billard complaints. On February 7, 2017, plaintiff Slingerland refiled his previous copycat derivative complaint in the Court of Chancery of the State of Delaware that largely tracks his prior complaint. The next step in the case will be to consolidate these two cases and then enter into a schedule for briefing a motion to dismiss. The Company believes the allegations in all of the above noted complaints are without merit, and the Company cannot estimate a range of potential liability, if any, at this time.

Subsequent Event	3 Months Ended
Subsequent Event	Dec. 31, 2016
Subsequent Events [Abstract]
Subsequent Events	Subsequent Event On January 30, 2017, the Company decided to exit its TruckCenter land based, live auction and retail business in order to focus its time and resources on its online marketplace strategy. Total expenses are estimated at $700 thousand to $1.1 million. The Company expects to recognize most of these pre-tax restructuring charges in the quarter ended March 31, 2017 and the quarter ended June 30, 2017.

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Dec. 31, 2016
Accounting Policies [Abstract]
Unaudited Interim Financial Information	Unaudited Interim Financial Information The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation have been included. The information disclosed in the notes to the consolidated financial statements for these periods is unaudited. Operating results for the three months ended December 31, 2016 are not necessarily indicative of the results that may be expected for the year ending September 30, 2017 or for any future period. Fee revenue is revenue earned under the consignment model, as well as other fee revenue, and is presented separately as it accounts for more than 10% of total revenue.
New Accounting Pronouncements	New Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (FASB) issued Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (ASU 2015-05). The Company has adopted this guidance prospectively during the first quarter ended December 31, 2016. As a result of the adoption there was no impact to the Company's financial statements. In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which supersedes most existing revenue recognition guidance under GAAP. The new standard will change the way the Company recognizes revenue and significantly expand the disclosure requirements for revenue arrangements. In July 2015, the FASB delayed the effective date of the new standard such that the new standard will be effective for the Company beginning on October 1, 2018, and may be adopted either retrospectively or on a modified retrospective basis whereby the new standard would be applied to new and existing arrangements with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to retained earnings at the effective date for existing arrangements with remaining performance obligations. The Company is currently evaluating the methods of adoption allowed by the new standard and the effect that adoption of the standard is expected to have on the Company's consolidated financial statements and related disclosures. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern, which requires management to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern and to provide disclosures in certain circumstances. The new guidance was issued to reduce diversity in the timing and content of footnote disclosures. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2016. The Company does not expect the adoption of this standard to have a material effect upon its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 will change the way the Company recognizes its leased assets. ASU 2016-02 will require organizations that lease assets—referred to as “lessees”—to recognize on the balance sheet the assets and liabilities representing the rights and obligations created by those leases. ASU 2016-02 will also require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The standard will be effective for the Company beginning on October 1, 2019. The Company is currently evaluating the methods of adoption allowed by the new standard and the effect that adoption of the standard is expected to have on the Company’s consolidated financial statements and related disclosures. In March, 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718). The new standard will change certain aspects of accounting for share-based payments to employees. Under the new standard, the Company will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital (“APIC”). Instead, the Company will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement when the awards vest or are settled. The APIC pools will be eliminated. For interim reporting purposes, the Company will account for excess tax benefits and tax deficiencies as discrete items in the period in which they occur. The new standard will also allow the Company to repurchase more of an employee’s shares than it can today for income tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. The new guidance will require the Company to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. The standard will be effective for the Company beginning on October 1, 2017. The Company does not expect the adoption of this standard to have a material effect upon its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 clarifies how entities should classify certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of contingent consideration arising from a business combination, insurance settlement proceeds, and distributions from certain equity method investees, and amends certain disclosure requirements of Accounting Standards Codification ("ASC") 230. The guidance will generally be applied retrospectively and is effective for the Company for fiscal years beginning after December 15, 2017, and interim periods therein. The Company is currently evaluating the methods of adoption allowed by the new standard and the effect that adoption of the standard is expected to have on the Company’s consolidated financial statements and related disclosures.
Business Combinations	Business Combinations The Company recognizes all of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair value on the acquisition date. Acquisition-related costs are recognized separately from the acquisition and expensed as incurred. Restructuring costs incurred in periods subsequent to the acquisition date are expensed when incurred. Subsequent changes to the purchase price (i.e., working capital adjustments) or other fair value adjustments determined during the measurement period are recorded as an adjustment to goodwill, with the exception of contingent consideration, which is recognized in the statement of operations in the period it is modified. All subsequent changes to a valuation allowance or uncertain tax position that relate to the acquired company and existed at the acquisition date that occur both within the measurement period and as a result of facts and circumstances that existed at the acquisition date are recognized as an adjustment to goodwill. All other changes in valuation allowances are recognized as a reduction or increase to income tax expense.
Accounts Receivable	Accounts Receivable Accounts receivable are recorded at the invoiced amount and are non-interest bearing. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables. Allowances are based on management’s judgment, which considers historical experience and specific knowledge of accounts where collectability may not be probable. The Company makes provisions based on historical bad debt experience, a specific review of all significant outstanding invoices and an assessment of general economic conditions.
Inventory	Inventory Inventory consists of property obtained for resale, generally through the online auction process, and is stated at the lower of cost or market. Cost is determined using the specific identification method. Charges for unsellable inventory, as well as for inventory written down to expected market price, are included in Cost of goods sold in the period in which they have been determined to occur. As of December 31, 2016 and September 30, 2016, the Company’s inventory reserve was approximately $4.2 million and $3.4 million, respectively.
Prepaid expenses and other current assets	Prepaid expenses and other current assets Prepaid expenses and other current assets includes prepaid income tax, financial assets, the short-term portion of a promissory note, as well as other miscellaneous prepaid expenses. Financial assets are related to participation agreements for principal transactions in the Company's commercial business. Changes in the fair value of the Company's financial assets are recorded in Other operating income.
Other Assets	Other Assets On September 30, 2015, the Company sold certain assets related to its Jacobs Trading business to Tanager Acquisitions, LLC (the ‘‘Buyer’’). In connection with the disposition, the Buyer assumed certain liabilities related to the Jacobs Trading business. The Buyer issued a $12.3 million five-year interest bearing promissory note to the Company. Of the $12.3 million, $1 million has been repaid. Of the remaining $11.3 million, $9.8 million was recorded in Other assets, and $1.5 million in Prepaid expenses and other current assets as of December 31, 2016.
Earnings per Share	Earnings per Share The Company calculates net income (loss) per share in accordance with FASB Topic 260 Earnings Per Share (“ASC 260”). Under ASC 260, basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. The weighted average number of shares of common stock outstanding includes vested restricted stock units. Diluted net income (loss) per share (“EPS”) reflects the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options and unvested restricted stock units. The dilutive effect of unexercised stock options and unvested restricted stock units was determined using the treasury stock method. Under the treasury stock method, the proceeds received from the exercise of stock options, the amount of compensation cost for future service not yet recognized by the Company and the amount of tax benefits that would be recorded in additional paid-in capital when stock options become deductible for income tax purposes are all assumed to be used to repurchase shares of the Company’s common stock. Stock options and restricted stock units are not included in the computation of diluted net income (loss) per share when they are antidilutive. For the three months ended December 31, 2016 and 2015, the basic and diluted weighted average common shares were the same because the inclusion of dilutive securities in the computation of diluted net income would have been anti-dilutive.
Stock-Based Compensation	Stock-Based Compensation The Company estimates the fair value of share-based awards on the date of grant. The fair value of stock options and stock appreciation rights is determined using the Black-Scholes option-pricing model. The fair value of restricted stock units is based on the closing price of the Company’s common stock on the date of grant. The determination of the fair value of the Company’s stock option units and stock appreciation rights is based on a variety of factors including, but not limited to, the Company’s common stock price, expected stock price volatility over the expected life of units, and actual and projected exercise behavior. Additionally, the Company has estimated forfeitures for share-based awards at the dates of grant based on historical experience, adjusted for future expectation. The forfeiture estimate is revised as necessary if actual forfeitures differ from these estimates. The Company issues restricted stock units where restrictions lapse upon either the passage of time (service vesting conditions), achievement of performance targets (performance vesting conditions), or some combination thereof. For those restricted stock units with only service vesting conditions, the Company recognizes compensation cost on a straight-line basis over the explicit service period. For units with both performance and service vesting conditions, the Company starts recognizing compensation cost over the remaining service period, when it is probable the performance condition will be met. For stock options and stock units that contain performance vesting conditions, the Company excludes these units from diluted earnings per share computations until the contingency is met as of the end of that reporting period. The Company presents the cash flows from the tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) as a financing activity with a corresponding operating cash outflow in the Consolidated Statements of Cash Flows.

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Summary of the basic and diluted income per share

The following summarizes the basic and diluted loss per share:



	Three Months Ended December 31,
	2016			2015
	(Unaudited) (dollars in thousands, except per share amounts)
Weighted average shares calculation:
Basic weighted average shares outstanding	31,261,603			30,490,670
Treasury stock effect of options and restricted stock	—			—

Diluted weighted average common shares outstanding	31,261,603			30,490,670

Net loss	$	(8,397	)	$	(5,197	)
Basic and diluted loss per common share	$	(0.27	)	$	(0.17	)

Goodwill (Tables)

3 Months Ended

Dec. 31, 2016

Goodwill.

Summary of goodwill activity

The following table presents goodwill balances and foreign currency translation adjustments to those balances during the three months ended December 31, 2016:



	Goodwill (in thousands)
Balance at September 30, 2016	$	45,134
Translation adjustments	(348		)
Balance at December 31, 2016	$	44,786

Intangible Assets (Tables)

3 Months Ended

Dec. 31, 2016

Finite-Lived Intangible Assets, Net [Abstract]

Schedule of intangible assets

The components of identifiable intangible assets as of December 31, 2016 and September 30, 2016 are as follows:



		December 31, 2016							September 30, 2016
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(dollars in thousands)
Contract intangibles	10	$	1,500	$	(188	)	$	1,312	$	1,500	$	(150	)	$	1,350
Brand and technology	3 - 5	5,749		(5,261		)	488		5,749		(5,018		)	731
Covenants not to compete	3 - 5	700		(558		)	142		700		(533		)	167
Patent and trademarks	3 - 10	820		(438		)	382		820		(418		)	402
Total intangible assets		$	8,769	$	(6,445	)	$	2,324	$	8,769	$	(6,119	)	$	2,650

Schedule of future expected amortization of intangible assets

Future expected amortization of intangible assets at December 31, 2016 is as follows:



	Future Amortization
Years ending September 30,	(in thousands)
2017 Remaining nine months	$	742
2018	281
2019	208
2020	957
2021 and thereafter	136
Total	$	2,324

Stockholders' Equity (Tables)

3 Months Ended

Dec. 31, 2016

Stockholders' Equity Note [Abstract]

Summary of stock option activity

A summary of the Company’s stock option activity for the three months ended December 31, 2016 and year ended September 30, 2016 is as follows:



	Options		Weighted- Average Exercise Price
Options outstanding at September 30, 2015	1,472,643		$	17.46
Options granted	583,228		6.68
Options exercised	(1,251	)	7.48
Options canceled	(346,133	)	16.99
Options outstanding at September 30, 2016	1,708,487		13.91
Options granted	—		—
Options exercised	(4,705	)	6.75
Options canceled	(72,375	)	11.15
Options outstanding at December 31, 2016	1,631,407		14.05
Options exercisable at December 31, 2016	1,050,256		17.14

Summary of restricted share activity

A summary of the Company’s restricted share activity for the three months ended December 31, 2016 and year ended September 30, 2016 is as follows:



	Restricted Shares		Weighted- Average Fair Value
Unvested restricted shares at September 30, 2015	2,367,187		$	16.08
Restricted shares granted	1,504,655		5.54
Restricted shares vested	(715,188	)	16.09
Restricted shares canceled	(495,409	)	20.25
Unvested restricted shares at September 30, 2016	2,661,245		9.34
Restricted shares granted	26,000		9.46
Restricted shares vested	(543,974	)	11.22
Restricted shares canceled	(223,207	)	10.11
Unvested restricted shares at December 31, 2016	1,920,064		8.73

Fair Value Measurement (Tables)

3 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Changes in financial assets fair value

The changes in financial assets measured at fair value for which the Company has used Level 3 inputs to determine fair value for the quarter ended December 31, 2016 are as follows ($ in thousands):



	Level 3 Assets

Balance at September 30, 2016	$	2,200
Acquisition of financial assets	2,662
Settlements	(3,162		)
Change in fair value of financial assets	928
Balance at December 31, 2016	$	2,628

Defined Benefit Pension Plan (Tables)

3 Months Ended

Dec. 31, 2016

Defined Benefit Pension Plan

Schedule of net periodic benefit cost recognized

The net periodic benefit recognized for the three months ended December 31, 2016 and 2015 included the following components:



	Three Months Ended December 31,
Qualified Defined Benefit Pension Plan	2016			2015
	(dollars in thousands)
Service cost	$	—		$	—
Interest cost	144			$	222
Expected return on plan assets	(204		)	(283		)
Amortization of prior service cost	—			—
Amortization of actuarial (gain)/loss	—			—
Amortization of transitional obligation/(asset)	—			—
Total net periodic benefit	$	(60	)	$	(61	)

Organization (Details) client in Thousands	3 Months Ended
Organization (Details) client in Thousands	Dec. 31, 2016 category client segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Minimum number of product categories offered (in categories) \| category	500
Number of clients \| client	9
Reportable segments (in segments) \| segment	1

Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Weighted average shares calculation:
Basic weighted average shares outstanding	31,261,603	30,490,670
Diluted weighted average common shares outstanding	31,261,603	30,490,670
Net loss	$ (8,397)	$ (5,197)
Basic and diluted loss per common share (USD per share)	$ (0.27)	$ (0.17)

Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions		3 Months Ended
	Sep. 30, 2015	Dec. 31, 2016	Sep. 30, 2016
Business Combination [Line Items]
Inventory reserve		$ 4.2	$ 3.4
Tanager Acquisitions Promissory Note
Business Combination [Line Items]
Receivable with imputed interest, term	5 years
Receivable with imputed interest, face amount	$ 12.3
Proceeds from collection of notes receivable		1.0
Receivable with imputed interest, net amount		11.3
Tanager Acquisitions Promissory Note \| Other Assets
Business Combination [Line Items]
Receivable with imputed interest, net amount		9.8
Tanager Acquisitions Promissory Note \| Prepaid Expenses and Other Current Assets
Business Combination [Line Items]
Receivable with imputed interest, net amount		$ 1.5

Significant Contracts (Details) $ in Thousands		1 Months Ended	3 Months Ended
Significant Contracts (Details) $ in Thousands	Dec. 06, 2016	Apr. 30, 2016 renewal_option	Dec. 31, 2016 USD ($) renewal_option	Dec. 31, 2015	Sep. 30, 2016 USD ($)
Significant Contracts
Liability for inventory included in accrued expenses and other current liabilities \| $			$ 43,054		$ 45,133
Non-rolling stock
Significant Contracts
Usable surplus property to be purchased as a fixed percentage of DoD's original acquisition value			1.80%
Surplus Contract
Significant Contracts
Liability for inventory included in accrued expenses and other current liabilities \| $			$ 15,200		$ 16,100
Base period			2 years
Term of each renewal options extended	1 year		1 year
Number of renewal options \| renewal_option			3
Surplus Contract \| Non-rolling stock
Significant Contracts
Usable surplus property to be purchased as a fixed percentage of DoD's original acquisition value			4.35%
Profits from resale of the property retained (as a percent)			100.00%
Scrap Contract
Significant Contracts
Term of each renewal options extended		1 year
Number of renewal options \| renewal_option		2
Term of contract		3 years
Adjusted percentage of profit sharing distribution		65.00%	64.50%
Sales Revenue, Net \| Surplus Contract \| U.S. Department of Defense
Significant Contracts
Percentage of revenue			29.90%	31.00%
Sales Revenue, Net \| Scrap Contract \| U.S. Department of Defense
Significant Contracts
Percentage of revenue			10.00%	13.00%
Sales Revenue, Net \| Commercial Client \| Customer Concentration Risk
Significant Contracts
Percentage of revenue			12.90%	9.20%

Goodwill (Details) $ in Thousands	3 Months Ended
Goodwill (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Goodwill
Balance at the beginning of the period	$ 45,134
Translation adjustments	(348)
Balance at the end of the period	$ 44,786

Goodwill Narrative (Details) $ in Millions	3 Months Ended
Goodwill Narrative (Details) $ in Millions	Sep. 30, 2016 USD ($)
Goodwill.
Impairment of goodwill	$ 19.0

Intangible Assets - Carrying Amount (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 8,769	$ 8,769
Accumulated Amortization	(6,445)	(6,119)
Total	$ 2,324	2,650	$ 2,324
Contract intangibles
Finite-Lived Intangible Assets [Line Items]
Useful Life (in years)	10 years
Gross Carrying Amount	$ 1,500	1,500
Accumulated Amortization	(188)	(150)
Total	1,312	1,350
Brand and technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	5,749	5,749
Accumulated Amortization	(5,261)	(5,018)
Total	$ 488	731
Brand and technology \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life (in years)	3 years
Brand and technology \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life (in years)	5 years
Covenants not to compete
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 700	700
Accumulated Amortization	(558)	(533)
Total	$ 142	167
Covenants not to compete \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life (in years)	3 years
Covenants not to compete \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life (in years)	5 years
Patent and trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 820	820
Accumulated Amortization	(438)	(418)
Total	$ 382	$ 402
Patent and trademarks \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life (in years)	3 years
Patent and trademarks \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life (in years)	10 years

Intangible Assets - Amortization (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016
Future expected amortization of intangible assets
2017 (remaining three months)			$ 742
2018			281
2019			208
2020			957
2021 and thereafter			136
Total	$ 2,324	$ 2,650	$ 2,324

Intangible Assets - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets, Net [Abstract]
Amortization of intangible assets	$ 0.3	$ 0.4

Debt (Details) - Senior Credit Facility - USD ($)	Mar. 25, 2016	Dec. 31, 2015
Debt
Credit facility terminated	$ 75,000,000
Available borrowing capacity	37,500,000
Amount outstanding	$ 0
LIBOR
Debt
Percentage added to reference rate	1.25%
Interest rate at period end (percentage)		1.608%

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Dec. 31, 2016	Sep. 30, 2016
Income Tax Disclosure [Abstract]
Expected effective tax rate (as a percent)	(1.30%)
Decrease in unrecognized tax benefits	$ 0.2	$ 0.7

Stockholders' Equity - 2006 Plan Activity (Details) - Employee and director options - $ / shares	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016
Stock option activity
Options outstanding at the beginning of the period (in shares)	1,708,487	1,472,643
Options granted (in shares)	0	583,228
Options exercised (in shares)	(4,705)	(1,251)
Options cancelled (in shares)	(72,375)	(346,133)
Options outstanding at the end of the period (in shares)	1,631,407	1,708,487
Options exercisable at the end of the period (in shares)	1,050,256
Weighted-Average Exercise Price
Options outstanding at the beginning of the period (in dollars per share)	$ 13.91	$ 17.46
Options granted (in dollars per share)	0.00	6.68
Options exercised (in dollars per share)	6.75	7.48
Options cancelled (in dollars per share)	11.15	16.99
Options outstanding at the end of the period (in dollars per share)	14.05	$ 13.91
Options exercisable at the end of the period (in dollars per share)	$ 17.14

Stockholders' Equity - Restricted Share Activity (Details) - $ / shares	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016
Restricted share activity
Restricted shares cancelled	(112,380)
Restricted shares
Restricted share activity
Unvested restricted shares at the beginning of the period	2,661,245	2,367,187
Restricted shares granted	26,000	1,504,655
Restricted shares vested	(543,974)	(715,188)
Restricted shares cancelled	(223,207)	(495,409)
Unvested restricted shares at the end of the period	1,920,064	2,661,245
Weighted-Average Fair Value
Unvested restricted shares at the beginning of the period (in dollars per share)	$ 9.34	$ 16.08
Granted (in dollars per share)	9.46	5.54
Restricted shares vested (in dollars per share)	11.22	16.09
Restricted shares cancelled (in dollars per share)	10.11	20.25
Unvested restricted shares at the end of the period (in dollars per share)	$ 8.73	$ 9.34

Stockholders' Equity - Narrative (Details) - USD ($)	1 Months Ended	3 Months Ended	12 Months Ended	36 Months Ended
Stockholders' Equity - Narrative (Details) - USD ($)	Feb. 28, 2015	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2016	Jan. 09, 2015
Stockholders' Equity
Amount yet to be expended under the program		$ 10,100,000		$ 10,100,000
Shares available for issuance		10,000,000		10,000,000
Increase in shares available for issuance	3,000,000
Reserve shares counted per share granted from fungible share pool (in shares)					1.5
Options canceled (in shares)		40,718
Forfeited (in shares)		112,380
Remaining shares reserved for issuance		146,474		146,474
Cash-settled stock appreciation rights
Stockholders' Equity
Forfeited (in shares)		82,052	153,338
Granted (in shares)		0	1,062,668
Granted (in dollars per share)			$ 4.57
Options or stock appreciation rights \| Maximum
Stockholders' Equity
Number of shares awarded per person per year		1,000,000
Other than options or stock appreciation rights \| Maximum
Stockholders' Equity
Number of shares awarded per person per year		700,000
Employee and director options
Stockholders' Equity
Intrinsic value of outstanding shares		$ 1,853,745		$ 1,853,745
Weighted average remaining contractual life of outstanding options		6 years 3 months 8 days
Intrinsic value of exercisable options		$ 390,643		$ 390,643
Weighted average remaining contractual life of exercisable options		4 years 10 months 17 days
Stock price (in dollars per share)		$ 9.75		$ 9.75
Expected volatility, minimum (as a percent)				50.90%
Expected volatility, maximum (as a percent)				77.92%
Dividend yield (as a percent)				0.00%
Risk free interest rate, minimum (as a percent)				0.12%
Risk free interest rate, maximum (as a percent)				1.51%
Employee and director options \| Minimum
Stockholders' Equity
Shares and options vesting period		1 year
Expected forfeiture rate (as a percent)				22.20%
Employee and director options \| Maximum
Stockholders' Equity
Shares and options vesting period		4 years
Expected forfeiture rate (as a percent)				23.54%
Restricted shares
Stockholders' Equity
Forfeited (in shares)		223,207	495,409
Granted (in shares)		26,000	1,504,655
Granted (in dollars per share)		$ 9.46	$ 5.54
Stock price (in dollars per share)		$ 9.75		$ 9.75
Intrinsic value of unvested restricted shares		$ 18,720,000		$ 18,720,000
Weighted average remaining contractual life of unvested restricted shares		8 years 6 months

Fair Value Measurement - Change in Level 3 Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Change in fair value of financial instruments	$ 928	$ 0
Recurring basis \| Level 3
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at September 30, 2016	2,200
Acquisition of financial assets	2,662
Settlements	(3,162)
Change in fair value of financial instruments	928
Balance at December 31, 2016	$ 2,628

Fair Value Measurement - Narrative (Details) - Recurring basis - USD ($)	Dec. 31, 2016	Sep. 30, 2016
Level 1
Fair value measurement
Assets, fair value	$ 0	$ 0
Liabilities, fair value	0	0
Level 2
Fair value measurement
Assets, fair value	0	0
Liabilities, fair value	0	0
Level 3
Fair value measurement
Assets, fair value	0	0
Liabilities, fair value	$ 0	$ 0

Defined Benefit Pension Plan (Details) - Defined benefit pension plan - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Net periodic benefit cost recognized
Interest cost	$ 144	$ 222
Expected return on plan assets	(204)	(283)
Total net periodic benefit	$ (60)	$ (61)

Guarantees (Details) £ in Millions	Mar. 31, 2015 GBP (£)
Guarantees [Abstract]
Guarantee Obligation Value, maximum	£ 10

Legal Proceedings (Details)	36 Months Ended
Legal Proceedings (Details)	Dec. 31, 2014 stockholder
Billard and Slingerland Putative Complaints
Loss Contingencies [Line Items]
Number of plaintiffs	2

Subsequent Event (Details) - Subsequent Event $ in Thousands	Jan. 30, 2017 USD ($)
Minimum
Subsequent Event [Line Items]
Estimated restructuring expenses	$ 700
Maximum
Subsequent Event [Line Items]
Estimated restructuring expenses	$ 1,100