XML 35 R12.htm IDEA: XBRL DOCUMENT
v3.20.1

Trade Accounts Receivable and Financing Receivables | 6 Months Ended
--- | ---
Mar. 31, 2020
Receivables [Abstract] |
Trade Accounts Receivable and Financing Receivables | 5. Trade Accounts Receivable and Financing Receivables Trade accounts receivable, net are reflected in the following table (in thousands):
|  | March 31, 2020 |  |  | September 30, 2019 |
Trade accounts receivable |  | $ | 25,669 |  |  | $ | 25,144 |
Allowance for doubtful accounts |  |  | (8,904 | ) |  |  | (951 | )
Total |  | $ | 16,765 |  |  | $ | 24,193 |
The allowance for doubtful accounts represents the Company’s best estimate of probable credit losses. The Company determines the allowance based upon historical experience and a current review of its accounts receivable balances. Accounts receivable balances are charged off against the allowance whenever it is probable that the receivable balance will not be recoverable. The following table summarizes changes in the Company’s allowance for doubtful accounts for the six months ended March 31, 2020:
Balance at October 1, 2019 | $ | 951 |
Bad debt expense, net of recoveries |  | 8,151 |
Deductions |  | (198 | )
Balance at March 31, 2020 | $ | 8,904 |
Trade accounts receivable at March 31, 2020 and September 30, 2019 includes $8.0 million and $8.5 million, respectively, due from an international seismic marine customer that, as of March 31, 2020, rented a significant amount of marine nodal equipment from the Company. The Company has experienced cash collection difficulties with this customer throughout fiscal year 2019 and through the second quarter of fiscal year 2020 due to the customer’s inability to generate sufficient cash flows to pay its obligations in a timely manner. As a result of the customer’s failure to adhere to an agreed-upon payment plan, in late November 2019, the Company ceased recognizing revenue from this customer and expects to continue to do so until the customer demonstrates its ability to routinely service its debts owed to the Company in the ordinary course of business. At March 31, 2020, the total debt contractually owed by the customer to the Company is $14.0 million; however, the customer’s trade accounts receivable balance of $8.0 million on the Company’s balance sheet at March 31, 2020 excludes $6.0 million of unrecognized rental revenue and late payment penalties invoiced by the Company during the six months ended March 31, 2020. Prior to the customer missing the first scheduled payment in late November, the Company recognized $2.5 million of revenue from this customer in its first quarter ended December 31, 2019. The Company has received cash payments in excess of $20 million from this customer beginning in fiscal year 2018. The Company is currently evaluating an offer by the customer to exchange the customer’s debts owed to the Company for a financial instrument issued by the customer and secured by certain of its assets. The final terms and conditions of the debt instrument, the exchange and other matters have not yet been determined, and the Company has no obligation to enter into such an exchange. The current negotiations may not lead to a definitive agreement being entered into, the fair market value of the debt instrument may not equal or exceed the balance of accounts receivable owed by the customer, or the customer may not meet the debt instrument’s payment obligations. The Company has significant concerns about the customer’s ability to ultimately settle the debts owed to the Company because of (i) its distressed financial condition, (ii) the customer’s inability to generate sufficient cash flows to fund its past operations, (iii) the customer’s continued failure since November 2019 to make payments in accordance with its promises, (iv) the belief that the distressed state of the oil and gas exploration industry caused by the recent oversupply of crude oil on the world market will further compound the difficulties facing the customer and (v) the failure by the customer to present a plausible plan to overcome the difficulties it currently faces. In this regard, the Company recorded a bad debt expense of $8.0 million in its second quarter ended March 31, 2020 to reduce the carrying value of the receivable owed by the customer to zero. Notwithstanding the bad debt reverse provided for on the receivable, the Company intends to vigorously pursue the collection of all amounts owed by the customer by all means available. Financing receivables are reflected in the following table (in thousands):
|  | March 31, 2020 |  |  | September 30, 2019 |
Promissory notes |  | $ | 432 |  |  | $ | 780 |
Sales-type lease |  |  | 1,272 |  |  |  | 2,692 |
Total financing receivables |  |  | 1,704 |  |  |  | 3,472 |
Unearned income: |  |  |  |  |  |  |  |
Sales-type lease |  |  | (18 | ) |  |  | (55 | )
Total unearned income |  |  | (18 | ) |  |  | (55 | )
Total financing receivables, net of unearned income |  |  | 1,686 |  |  |  | 3,417 |
Less current portion |  |  | (1,639 | ) |  |  | (3,233 | )
Non-current financing receivables |  | $ | 47 |  |  | $ | 184 |
Promissory notes receivable are generally collateralized by the products sold, and bear interest at rates ranging up to 7% per year. The promissory notes receivable mature at various times through January 2023. The Company has, on occasion, extended or renewed notes receivable as they mature, but there is no obligation to do so. During the second quarter of fiscal year, 2020, the Company partially financed a $12.5 million product sale by entering into a $10.0 million secured promissory note with a customer. The note is for a three-year term and bears interest at 7% per year. Principal and interest payments of $0.3 million are due monthly until maturity. Due to the financial condition of the customer, the note receivable is not reflected on the Company’s consolidated balance sheet due to collectability concerns. See Note 2 for more information on this sale. The Company entered into a sales-type lease in September 2017 resulting from the sale of rental equipment. The sales-type lease has a term of three years. Future minimum lease payments required under the lease at March 31, 2020 were $1.4 million, including $18,000 of unearned income. The future minimum lease payments are due in fiscal year 2020. Interest income earned on the lease for the three months ended March 31, 2020 and 2019 was $ 23,000 and $0.1 million, respectively. Interest income earned on the lease for the six months ended March 31, 2020 and 2019 was $0.1 million and $0.1 million, respectively. The ownership of the equipment will transfer to the lessee at the end of the lease term.

X
- Definition The entire disclosure for financing receivable. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2196816 + Details
Name: | us-gaap_FinancingReceivablesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_ReceivablesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration