Income (loss) from discontinued operations, after income taxes

13,478

9,433

4,493

3,230

(2,845)

(2,742)

$ 16,708

$ 6,588

$ 1,751

$ 0.52

$ 0.38

$ 0.18

0.13

(0.12)

(0.11)

^[1]

0.65

0.27

0.07

0.51

0.37

0.17

0.12

(0.11)

Statement of Comprehensive Income [Abstract]

^[1]

$ 0.64

$ 0.26

$ 0.07

Weighted average common shares:

Basic (shares)

25,760

24,645

25,345

Diluted (shares)

26,311

25,227

25,730

[1]	Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts.

Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands

12 Months Ended

Sep. 30, 2016

Sep. 30, 2015

Sep. 30, 2014

Other comprehensive loss, net of tax:

$ 16,708

$ 6,588

$ 1,751

Foreign currency translation adjustment

(2,107)

(4,323)

(2,713)

Change in net unrealized gain (loss) on investments

(21)

Less income tax (provision) benefit

(20)

(17)

Reclassification of realized (gain) loss on investments included in net income (1)

^[1]

(7)

Less income tax benefit (2)

^[2]

Other comprehensive loss, net of tax

(2,078)

(4,336)

(2,687)

Comprehensive income (loss)

$ 14,630

$ 2,252

$ (936)

[1]	Recorded in Other (expense) income, net in our Consolidated Statements of Operations.
[2]	Recorded in Income tax provision in our Consolidated Statements of Operations.

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015
Current assets:
Cash and cash equivalents	$ 75,727	$ 45,018
Marketable securities	58,382	47,191
Accounts receivable, net	28,685	27,788
Inventories	26,276	31,877
Deferred tax assets	0	3,252
Receivable from sale of business	2,997	0
Other	3,578	3,435
Current assets of discontinued operations	0	1,624
Total current assets	195,645	160,185
Marketable securities, long-term	3,541	13,626
Property, equipment and improvements, net	14,041	14,339
Identifiable intangible assets, net	4,041	2,648
Goodwill	109,448	100,183
Deferred tax assets	7,295	6,255
Receivable from sale of business	1,959	0
Other	196	250
Non-current assets of discontinued operations	0	2,874
Total assets	336,166	300,360
Current liabilities:
Accounts payable	8,569	6,673
Income taxes payable	167	828
Accrued compensation	10,787	10,156
Accrued warranty	1,033	1,014
Contingent consideration on acquired business	513	0
Other	2,739	3,037
Current liabilities of discontinued operations	0	1,481
Total current liabilities	23,808	23,189
Income taxes payable	1,490	1,546
Deferred tax liabilities	616	135
Contingent consideration on acquired business	9,447	0
Other non-current liabilities	776	457
Non-current liabilities of discontinued operations	0	95
Total liabilities	36,137	25,422
Commitments and Contingencies (see Notes 16 & 17)
Stockholders’ equity:
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued and outstanding	0	0
Common stock, $.01 par value; 60,000,000 shares authorized; 32,471,175 and 31,534,198 shares issued	325	315
Additional paid-in capital	237,492	227,367
Retained earnings	141,112	124,404
Accumulated other comprehensive loss	(24,691)	(22,613)
Treasury stock, at cost, 6,430,797 and 6,487,248 shares	(54,209)	(54,535)
Total stockholders’ equity	300,029	274,938
Total liabilities and stockholders’ equity	$ 336,166	$ 300,360

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2016	Sep. 30, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value (USD per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (USD per share)	$ 0.01	$ 0.01
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	32,471,175	31,534,198
Treasury stock, shares	6,430,797	6,487,248

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Operating activities:
Net income	$ 16,708	$ 6,588	$ 1,751
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, equipment and improvements	2,742	2,949	3,557
Amortization of identifiable intangible assets	1,872	2,910	3,589
Stock-based compensation	3,654	4,301	4,330
Excess tax benefits from stock-based compensation	(212)	0	(44)
Deferred income tax provision (benefit)	1,115	(769)	(2,783)
Gain on insurance settlement related to property and equipment	0	(1,375)	0
Gain on sale of business	(2,870)	0	0
Change in fair value of contingent consideration	(441)	0	0
Bad debt/product return provision	168	357	98
Inventory obsolescence	1,734	1,284	860
Restructuring charges, net	747	509	81
Other	66	87	3
Changes in operating assets and liabilities (net of acquisition):
Accounts receivable	(1,188)	(1,794)	(2,730)
Inventories	3,993	(1,913)	(5,966)
Other assets	597	241	210
Income taxes	(1,589)	387	(1,408)
Accounts payable	1,612	(3,769)	970
Accrued expenses	(1,619)	4,081	(709)
Net cash provided by operating activities	27,089	14,074	1,809
Investing activities:
Purchase of marketable securities	(74,759)	(54,427)	(27,420)
Proceeds from maturities of marketable securities	73,706	38,028	47,420
Proceeds from sale of business	2,849	0	0
Acquisition of businesses, net of cash acquired	(2,860)	0	0
Proceeds from insurance settlement related to property and equipment	0	1,400	0
Proceeds from sale of property and equipment	0	45	0
Proceeds from sale of investment	13	0	0
Purchase of property, equipment, improvements and certain other intangible assets	(2,729)	(4,500)	(3,421)
Net cash (used in) provided by in investing activities	(3,780)	(19,454)	16,579
Financing activities:
Excess tax benefits from stock-based compensation	212	0	44
Proceeds from stock option plan transactions	7,191	6,559	3,689
Proceeds from employee stock purchase plan transactions	896	925	1,009
Purchase of common stock	(550)	(2,339)	(15,702)
Net cash provided by (used in) financing activities	7,749	5,145	(10,960)
Effect of exchange rate changes on cash and cash equivalents	(349)	(2,237)	(1,258)
Net increase (decrease) in cash and cash equivalents	30,709	(2,472)	6,170
Cash and cash equivalents, beginning of period	45,018	47,490	41,320
Cash and cash equivalents, end of period	75,727	45,018	47,490
Supplemental disclosures of cash flow information:
Interest paid	9	4	5
Income taxes paid, net	3,029	1,296	3,197
Supplemental schedule of non-cash investing and financing activities:
Accrual for capitalized intangible asset	(183)	(17)	0
Receivable related to sale of business	4,956	0	0
Liability related to acquisition of business	(10,550)	0	0
Accrual for purchase of common stock	$ 0	$ 0	$ (100)

Consolidated Statements of Stockholders' Equity - USD ($)
shares in Thousands, $ in Thousands

Total

Common Stock

Treasury Stock

Additional Paid-in Capital

Retained Earnings

Accumulated Other Comprehensive Loss

Beginning balance at Sep. 30, 2013

$ 274,243

$ 303

$ (38,517)

$ 211,982

$ 116,065

$ (15,590)

Beginning balance (in shares) at Sep. 30, 2013

30,264

4,709

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Employee stock purchase issuances (in shares)

1,751

Other comprehensive loss

(2,687)

(129)

Employee stock purchase issuances

1,009

$ 1,082

(73)

Repurchase of common stock (in shares)

1,734

Repurchase of common stock

(15,802)

$ (15,802)

Issuance of stock upon exercise of stock options (in shares)

440

Issuance of stock upon exercise of stock options

3,689

$ 4

3,685

Tax impact from equity awards

(1,235)

Stock-based compensation expense

4,330

Ending balance (in shares) at Sep. 30, 2014

30,704

6,314

Ending balance at Sep. 30, 2014

265,298

$ 307

$ (53,237)

218,689

117,816

(18,277)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Employee stock purchase issuances (in shares)

6,588

Other comprehensive loss

(4,336)

(124)

Employee stock purchase issuances

925

$ 1,041

(116)

Repurchase of common stock (in shares)

297

Repurchase of common stock

(2,339)

$ (2,339)

Issuance of stock under stock award plans (in shares)

830

Issuance of stock under stock award plans

6,559

$ 8

6,551

Tax impact from equity awards

(2,058)

Stock-based compensation expense

4,301

Ending balance (in shares) at Sep. 30, 2015

31,534

6,487

Ending balance at Sep. 30, 2015

274,938

$ 315

$ (54,535)

227,367

124,404

(22,613)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Employee stock purchase issuances (in shares)

16,708

Other comprehensive loss

(2,078)

(104)

Employee stock purchase issuances

896

$ 876

Repurchase of common stock (in shares)

Repurchase of common stock

(550)

$ (550)

Issuance of stock under stock award plans (in shares)

937

Issuance of stock under stock award plans

7,191

$ 10

7,181

Tax impact from equity awards

(914)

Accelerated vesting of Etherios stock award plans

184

Stock-based compensation expense

3,654

Ending balance (in shares) at Sep. 30, 2016

32,471

6,431

Ending balance at Sep. 30, 2016

300,029

$ 325

$ (54,209)

237,492

141,112

(24,691)

Beginning balance at Jun. 30, 2016

294,900

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Ending balance (in shares) at Sep. 30, 2016

^[1],[2]

3,844

32,471

6,431

Ending balance at Sep. 30, 2016

$ 300,029

$ 325

$ (54,209)

$ 237,492

$ 141,112

$ (24,691)

[1]

During fiscal 2016 and 2015, we recorded net tax benefits of $1.5 million and $0.8 million, respectively. We recorded a benefit of $0.7 million in the first quarter of fiscal 2016 resulting from the reinstatement of the research and development tax credit for calendar year 2015, reversal of income tax reserves due to the expiration of the statute of limitations from various U.S. and foreign tax jurisdictions and reversal of tax reserves due to the resolution of tax audits. In the third quarter of fiscal 2016, we recorded a tax benefit of $0.5 million primarily due to the filing of an amended income tax return resulting in a domestic refund related to qualified manufacturing activities. In the fourth quarter of fiscal 2016, we recorded a net tax benefit of $0.2 million, primarily due to the filing of an additional amended income tax return resulting in an additional domestic refund related to qualified manufacturing activities, partially offset by an adjustment of the state rate on net deferred tax assets. We recorded net tax benefits of $0.5 million in the first quarter of fiscal 2015 resulting from the reinstatement of the research and development tax credit for calendar year 2014, reversal of income tax reserves due to the expiration of the statute of limitations from various U.S. and foreign tax jurisdictions and reversal of tax reserves due to the resolution of tax audits. In the third quarter of fiscal 2015, we recorded a tax benefit of $0.4 million primarily due to the reversal of reserves for state research and development tax credits and transfer pricing, partially offset by an adjustment of the state rate on net deferred tax assets.

[2]

For continuing operations, we recorded business restructuring charges of $0.7 million ($0.4 million after tax) in the first quarter of fiscal 2016, $0.1 million ($0.1 million after tax) in the second quarter of fiscal 2016 and $0.4 million ($0.3 million after tax) in the second quarter of fiscal 2015.

Summary of Significant Accounting Policies

12 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Description

We are a leading provider of Internet of Things (IoT) networking hardware products and solutions. We provide Machine-to-Machine (M2M) and IoT connections to solve business and mission-critical machine communication challenges for our customers that are reliable, secure, scalable and managed. We create secure, easy to implement embedded solutions and services to help customers build IoT connectivity. In addition, we deploy ready to use, complete box solutions to connect remote machinery. We also manage cloud services, offer professional services and complete IoT solutions. Our solutions are deployed by a wide range of businesses and institutions. Any business that utilizes a significant number of devices, whose operations could benefit from remote monitoring or control, may realize benefits from IoT networking.

Discontinued Operations

On October 23, 2015, we sold all of the outstanding stock of our wholly owned subsidiary, Etherios Inc. (“Etherios”) to West Monroe Partners, LLC. Because the sale of Etherios represented a strategic shift that will have a major effect on our operations and financial results, we have classified our Etherios business as discontinued operations, which requires retrospective application to financial information for all periods presented. Since the cost of segregating the consolidated statement of cash flows outweighed the benefits, we elected not to segregate our consolidated statement of cash flows as the material items in the operating and investing sections are disclosed in Note 3 to our Consolidated Financial Statements.

Principles of Consolidation

The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Cash Equivalents

Cash equivalents consist of money market accounts and other highly liquid investments purchased with an original maturity of three months or less. The carrying amounts approximate fair value due to the short maturities of these investments.

Marketable Securities

Marketable securities consist of certificates of deposit, commercial paper, corporate bonds and government municipal bonds. All marketable securities are accounted for as available-for-sale and are carried at fair value on our consolidated balance sheets with unrealized gains and losses recorded in accumulated other comprehensive loss within stockholders’ equity. In order to estimate the fair value for each security in our investment portfolio, we obtain quoted market prices and trading activity for each security where available. We obtain relevant information from our investment advisor and, if warranted, also may review the financial solvency of certain security issuers.

We regularly monitor and evaluate the value of our marketable securities. When assessing marketable securities for other-than-temporary declines in value, we consider several factors. These factors include: how significant the decline in value is as a percentage of the original cost, how long the market value of the investment has been less than its original cost, the underlying factors contributing to a decline in the prices of securities in a single asset class, the performance of the issuer’s stock price in relation to the stock price of its competitors within the industry, expected market volatility, analyst recommendations, the views of external investment managers, any news or financial information that has been released specific to the investee and the outlook for the overall industry in which the issuer operates. If events and circumstances indicate that a decline in the value of a security has occurred and is other-than-temporary, we would record a charge to other (expense) income.

Accounts Receivable

Accounts receivable are stated at the amount we expect to collect, which is net of an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The following factors are considered when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, and changes in customer payment terms or practices. In addition, overall historical collection experience, current economic industry trends, and a review of the current status of trade accounts receivable are considered when determining the required allowance for doubtful accounts. Based on our assessment, we provide for estimated uncollectible amounts through a charge to earnings and a credit to our allowance for doubtful accounts. Balances that remain outstanding after we have used

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to accounts receivable.

Inventories

Inventories are stated at the lower of cost or fair market value, with cost determined using the first-in, first-out method. Appropriate consideration is given to deterioration, obsolescence and other factors in evaluating fair market value.

Property, Equipment and Improvements, Net

Property, equipment and improvements are carried at cost, net of accumulated depreciation. Depreciation is provided by charges to operations using the straight-line method over the estimated asset useful lives. Furniture and fixtures and other equipment are depreciated over a period of three to five years. Building improvements and buildings are depreciated over ten and thirty-nine years, respectively.

Expenditures for maintenance and repairs are charged to operations as incurred, while major renewals and betterments are capitalized. The assets and related accumulated depreciation accounts are adjusted for asset retirements and disposals with the resulting gain or loss included in operations.

Identifiable Intangible Assets

Purchased proven technology, license agreements, covenants not to compete and other identifiable intangible assets are recorded at fair value when acquired in a business acquisition, or at cost when not purchased in a business acquisition. All other identifiable intangible assets are amortized on either a straight-line basis over their estimated useful lives of three to thirteen years or based on the pattern in which the asset is consumed. Useful lives for identifiable intangible assets are estimated at the time of acquisition based on the periods of time from which we expect to derive benefits from the identifiable intangible assets. Amortization of purchased and core technology is included in cost of sales in the Consolidated Statements of Operations. Amortization of all other acquired identifiable intangible assets is charged to operating expenses as a component of general and administrative expense.

Identifiable intangible assets are reviewed for impairment annually or whenever events or circumstances indicate that undiscounted expected future cash flows are not sufficient to recover the carrying value amount. We measure impairment loss by utilizing an undiscounted cash flow valuation technique using fair values indicated by the income approach. Impairment losses, if any, would be recorded in the period the impairment is identified. There were no material impairments identified in fiscal 2016, 2015 or 2014.

Goodwill

Goodwill represents the excess of cost over the fair value of identifiable assets acquired. Goodwill is tested for impairment on an annual basis as of June 30, or more frequently if events or circumstances occur which could indicate impairment. The calculation of goodwill impairment requires us to make assumptions about the fair value of our one reporting unit, which historically has been approximated by using our market capitalization plus a control premium. Control premium assumptions require judgment and actual results may differ from assumed or estimated amounts.

Our test for potential goodwill impairment is a two-step approach. We estimate the fair value for our one reporting unit by comparing its fair value (market capitalization plus control premium) to our carrying value. If the carrying value of the reporting unit exceeds its estimated fair value, the second step of the goodwill impairment analysis requires us to measure the amount of the impairment loss. An impairment loss is calculated by comparing the implied fair value of the goodwill to its carrying amount. To calculate the implied fair value of goodwill, the fair value of the reporting unit's assets and liabilities, excluding goodwill, is estimated. The excess of the fair value of the reporting unit over the amount assigned to its assets and liabilities, excluding goodwill, is the implied fair value of the reporting unit's goodwill.

In June 2014, we performed a control premium study to determine the appropriate control premium to include in the calculation of fair value. We used a third party valuation firm to assist us in performing the control premium analysis. In order to estimate the range of control premiums appropriate for us, the following three methodologies were used: (1) analysis of individual transactions within our industry; (2) analysis of industry-wide data, and (3) analysis of global transaction data. Individual

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

transactions in the Communication Equipment or Technology Hardware, Storage and Peripherals industries were used to find transactions of target companies that operated in similar markets and shared similar operating characteristics with us.

Transaction screening criteria included selection of transactions with the following characteristics:


•	At least 50 percent of a target company’s equity sought by an acquirer,


•	Target company considered operating (not in bankruptcy),


•	Target company had publicly traded stock outstanding at the transaction date, and


•	Transactions announced between June 30, 2009 and the valuation date.

In analyzing industry-wide data, transactions in the following three industries were identified that encompassed the products offered by us: Office Equipment and Computer Hardware, Communications, and Computer, Supplies and Services. Finally, control premiums were considered for both domestic and international transactions. The control premium analysis resulted in a range of control premium of 30% to 40%. We reviewed the data and concluded that a 35% control premium best represented the amount an investor would likely pay, over and above market capitalization, in order to obtain a controlling interest given the economic conditions at that time.

During the third quarter of fiscal 2016, we reviewed recent control premium data for transactions that occurred during fiscal 2016 in the industries previously described. The data indicated that our 35% control premium continued to be indicative of the amount that an investor would pay to obtain a controlling interest based on current macroeconomic and industry data.

At June 30, 2016, our market capitalization was $278.6 million compared to our carrying value of $294.9 million. Our market capitalization plus our estimated control premium of 35% resulted in a fair value in excess of our carrying value by a margin of 27%. We concluded that no impairment was indicated and we were not required to complete the second step of the goodwill impairment analysis. No goodwill impairment charges were recorded. During the fourth quarter of fiscal 2016, we assessed various qualitative factors to determine whether or not an additional goodwill impairment assessment was required as of September 30, 2016, and we concluded that no additional impairment assessment was required.

We continue to monitor our stock price on a daily basis. If the stock price remained below certain thresholds for a significant period of time, we would complete an interim impairment assessment. We also monitor other events or circumstances that could have a significant impact on our operations. If one of these events or circumstances were to occur, we would evaluate whether an interim goodwill impairment assessment should be completed.

If our stock price or control premium declines, the first step of our goodwill impairment analysis may fail. We have identified factors that could result in additional interim goodwill impairment testing. For example, we would perform the second step of the impairment testing if our stock price fell below certain thresholds for a significant period of time, or if our control premium significantly decreased. Events or circumstances may occur that could negatively impact our stock price, including changes in our anticipated revenues and profits and our ability to execute on our strategies. In addition, our control premium could decline due to changes in economic conditions in the technology industry or more generally in the financial markets. An impairment could have a material effect on our consolidated balance sheet and results of operations. We have had no goodwill impairment losses since the adoption of Accounting Standards Codification (ASC) 350, Intangibles-Goodwill and Others, in fiscal 2003.

Contingent Consideration

We measure our contingent consideration liabilities recognized in connection with business combinations at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy as defined in ASC 320 “Investments - Debt and Equity Securities”. We used a probability-weighted discounted cash flow approach as a valuation technique to determine the fair value of the contingent consideration on the acquisition date. At each subsequent reporting period, the fair value is remeasured with the change in fair value recognized in general and administrative expense and interest expense in our Condensed Consolidated Statements of Operations. Amounts, if any, paid to the seller in excess of the amount recorded on the acquisition date will be classified as cash flows used in operating activities. Payments to the seller not exceeding the acquisition-date fair value of the contingent consideration will be classified as cash flows used in financing activities.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Warranties

In general, we warrant our hardware products to be free from defects in material and workmanship under normal use and service. The warranty periods generally range from one to five years. We typically have the option to either repair or replace hardware products we deem defective with regard to material or workmanship. Estimated warranty costs are accrued in the period that the related revenue is recognized based upon an estimated average per unit repair or replacement cost applied to the estimated number of units under warranty. These estimates are based upon historical warranty incidents and are evaluated on an ongoing basis to ensure the adequacy of the warranty accrual.

Revenue Recognition

We recognize revenue in accordance with authoritative guidance issued by FASB related to revenue recognition.

Hardware product revenue as a percentage of total revenue was 96.6%, 95.9% and 94.4% in fiscal 2016, 2015 and 2014, respectively. We recognize hardware product revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, collectability is reasonably assured and there are no post-delivery obligations, other than warranty. Under these criteria, product revenue generally is recognized upon shipment of product to customers.

Sales to authorized domestic and foreign distributors and Direct / OEMs are made with certain rights of return and price adjustment provisions. Estimated reserves for future returns and pricing adjustments are established by us based on an analysis of historical patterns of returns and price adjustments as well as an analysis of authorized returns compared to received returns and distribution sales for the current period. Estimated reserves for future returns and price adjustments are charged against revenue in the same period as the corresponding revenue is recorded.

Service revenue as a percentage of total revenue represented 3.4%, 4.1% and 5.6% in fiscal 2016, 2015 and 2014, respectively. Our service revenue is derived primarily from our wireless design services and our Digi Cold Chain Solutions. We also have some service revenue that is derived from our Digi Device Cloud™, which is a platform-as-a-service (PaaS) offering in which customers pay for services consumed in terms of devices being managed and monitored, or as a monthly service fee for access to information. In addition, we have small amounts of revenue from our support services. We recognize service revenue from our wireless design services, Digi Cold Chain Solutions and Device Cloud based upon performance, including final product delivery and customer acceptance. In addition, we recognize small amounts of revenue from our support services which is recognized over the life of the contract, and training as the services are performed.

Research and Development

Research and development costs are expensed when incurred. Research and development costs include compensation, allocation of corporate costs, depreciation, utilities, professional services and prototypes. Software development costs are expensed as incurred until the point that technological feasibility and proven marketability of the product are established. To date, the time period between the establishment of technological feasibility and completion of software development has been short, and no significant development costs have been incurred during that period. Accordingly, we have not capitalized any software development costs to date.

Income Taxes

Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Income tax expense is equal to the tax payable for the period and the change during the period in deferred tax assets and liabilities and also changes in income tax reserves.

Stock-Based Compensation

Stock-based compensation expense represents the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. This cost must be recognized over the period during which an employee is required to provide the service (usually the vesting period).

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Foreign Currency Translation

Financial position and results of operations of our international subsidiaries are measured using local currencies as the functional currency, except for our Singapore location which uses the U.S. Dollar as its functional currency. Assets and liabilities of these operations are translated at the exchange rates in effect at the end of each reporting period. For our larger international subsidiaries, statements of operations accounts are translated at the daily rate. For all other international subsidiaries, our statements of operations accounts are translated at the weighted average rates of exchange prevailing during each reporting period. Translation adjustments arising from the use of differing currency exchange rates from period to period are included in accumulated other comprehensive loss in stockholders’ equity. Gains and losses on foreign currency exchange transactions, as well as translation gains or losses on transactions denominated in currencies other than an entity’s functional currency, are reflected in the statement of operations. During fiscal 2016, 2015 and 2014, there were net transaction (losses) gains of $(0.7) million, $0.6 million and $0.5 million, respectively, that were recorded in other (expense) income, net. We manage our net asset or net liability position for U.S. dollar accounts in our foreign locations to reduce our foreign currency risk. We have not implemented a formal hedging strategy.

Net Income Per Common Share

Basic net income per common share is calculated based on the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares of our stock result from dilutive common stock options and restricted stock units. We use the treasury stock method to calculate the weighted-average shares used in the diluted earnings per share computation. Under the treasury stock method, the proceeds from exercise of an option, the amount of compensation cost, if any, for future service that we have not yet recognized, and the amount of estimated tax benefits that would be recorded in paid-in capital, if any, when the option is exercised are assumed to be used to repurchase shares in the current period.

The following table is a reconciliation of the numerators and denominators in the net income per common share calculations (in thousands, except per common share data):



	Fiscal years ended September 30,
	2016		2015			2014
Numerator:
Income from continuing operations	$	13,478	$	9,433		$	4,493
Income (loss) from discontinued operations, after income taxes	$	3,230	$	(2,845	)	$	(2,742	)
Net income	$	16,708	$	6,588		$	1,751
Denominator:
Denominator for basic net income per common share — weighted average shares outstanding	25,760		24,645			25,345
Effect of dilutive securities:
Stock options and restricted stock units	551		582			385
Denominator for diluted net income per common share — adjusted weighted average shares	26,311		25,227			25,730

Basic net income (loss) per common share:
Continuing operations	$	0.52	$	0.38		$	0.18
Discontinued operations	$	0.13	$	(0.12	)	$	(0.11	)
Net income (1)	$	0.65	$	0.27		$	0.07
Diluted net income (loss) per common share:
Continuing operations	$	0.51	$	0.37		$	0.17
Discontinued operations	$	0.12	$	(0.11	)	$	(0.11	)
Net income (1)	$	0.64	$	0.26		$	0.07

(1) Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Because their effect would be anti-dilutive at period end, certain potentially dilutive shares related to stock options to purchase common shares were excluded in the above computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of our common shares. At September 30, 2016, 2015 and 2014, such excluded stock options were 1,519,691, 3,016,911 and 3,284,993, respectively.

Use of Estimates and Risks and Uncertainties

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates that could significantly affect our results of operations or financial condition involve the assignment of fair values upon acquisition of goodwill and other intangible assets and testing for impairment; the determination of our allowance for doubtful accounts and reserve for future returns and pricing adjustments; the estimation of our inventory obsolescence, warranty reserve, income tax reserves and other contingencies.

Comprehensive Income (Loss)

Our comprehensive income (loss) is comprised of net income, foreign currency translation adjustments and unrealized gains and losses on available-for-sale marketable securities, which are charged or credited to the accumulated other comprehensive loss account in stockholders’ equity.

Recent Accounting Developments

Adopted

In November 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” ASU 2015-17 simplified the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be classified as non-current in the balance sheet. The amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods and may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. Early adoption is permitted. We elected to early adopt ASU 2015-17 beginning in the fiscal quarter ending December 31, 2015. Other than the revised balance sheet presentation of deferred tax assets and liabilities from current to non-current, the adoption of this standard did not have a material impact to our consolidated financial statements.

In September 2015, FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments.” To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the amendments in this update eliminate the requirement to retrospectively account for those adjustments. The amendments in this update are effective for fiscal years beginning after December 15, 2015, including interim periods within those years, which for us will be the first fiscal quarter ending December 31, 2016. Earlier application is permitted for financial statements that have not been issued. We elected to early adopt ASU 2015-16 beginning the fiscal quarter ending December 31, 2015. The adoption of this standard did not have a material impact to our consolidated financial statements.

Not Yet Adopted

In August 2016, FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments.” The amendments in this update provided guidance on eight specific cash flow issues. This update is to provide specific guidance on each of the eight issues, thereby reducing the diversity in practice in how certain transaction are classified in the statement of cash flows. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2017, which for us is the first quarter ended December 31, 2018. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2016-15 on our consolidated financial statements.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2019, which for us is

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

the first quarter ended December 31, 2020. Entities may early adopt beginning after December 15, 2018. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

In March 2016, FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” This update includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016, which for us is the first fiscal quarter ending December 31, 2017. Early adoption is permitted. We will adopt ASU 2016-09 beginning October 1, 2017. We are currently evaluating the impact of the adoption of ASU 2016-09 on our consolidated financial statements. Prospectively, beginning October 1, 2017, excess tax benefits and tax deficiencies will be reflected as income tax benefit or expense in our Consolidated Statement of Operations and could result in a material impact. The extent of the excess tax benefits or tax deficiencies are subject to variation in our stock price and the timing of RSU vestings and employee stock option exercises.

In February, 2016, FASB issued ASU 2016-02, “Leases (Topic 842)”, which amends the existing guidance to require lessees to recognize lease assets and lease liabilities from operating leases on the balance sheet. This ASU is effective using the modified retrospective approach for annual periods and interim periods within those annual periods beginning after December 15, 2018, which for us is the first fiscal quarter ending December 31, 2019. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements.

In January 2016, FASB issued ASU 2016-01, “Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 will require equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income. The amendments in this update will also simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, eliminate the requirement for public business entities to disclose the method and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet and require these entities to use the exit price notion when measuring fair value of financial instruments for disclosure purposes. This ASU would also change the presentation and disclosure requirements for financial instruments. In addition, this ASU clarifies the guidance related to valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, which for us is the first fiscal quarter ending December 31, 2018. Early adoption is permitted for financial statements of fiscal years and interim periods that have not been issued. We are currently evaluating the impact of the adoption of ASU 2016-01.

In July 2015, FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory.” This provision would require inventory that was previously recorded using first-in, first-out (“FIFO”) to be recorded at lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those years, which for us will be the first fiscal quarter ending December 31, 2017. The amendments in this guidance should be applied prospectively with earlier application permitted as of the beginning of an interim or annual period. We are currently evaluating the impact of the adoption of ASU 2015-11 and whether it would have a material impact on our consolidated financial statements.

In April 2015, FASB issued ASU 2015-05, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” The new standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If the arrangement does include a software license, the software license element of the arrangement should be accounted for in the same manner as the acquisition of other software licenses. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. We expect to adopt this guidance beginning with our fiscal quarter ending December 31, 2016. We do not expect this guidance to have a material impact on our consolidated financial statements.

In August 2014, FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern.” This guidance requires management to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. These amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter, which for us, will be our annual period ended September 30, 2017. Early adoption is permitted. While we are evaluating the impact of the adoption of ASU 2014-15, we do not expect it to have an impact on our consolidated financial statements.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In May 2014, FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This guidance provides a five-step analysis in determining when and how revenue is recognized so that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods and services. It also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” which approved a one-year deferral of the effective date of ASU 2014-09. As a result of this deferral, ASU 2014-09 is effective for our fiscal 2019, including interim periods within that reporting period. The FASB also agreed to allow us to choose to adopt the standard effective for our fiscal 2018. In addition, the FASB issued ASU 2016-08, ASU 2016-10 and ASU 2016-12 in March 2016, April 2016 and May 2016, respectively, to provide interpretive clarifications on the new guidance in ASC Topic 606. We are currently working through an adoption plan and have identified our revenue streams and completed a preliminary analysis of how we currently account for revenue transactions compared to the revenue accounting required under the new standard. We intend to complete our adoption plan in fiscal 2017. This plan includes a review of transactions supporting each revenue stream to determine the impact of accounting treatment under ASC 606, evaluation of the method of adoption, and completing a rollout plan for implementation of the new standard with affected functions in our organization. Because of the nature of the work that remains, at this time we are unable to reasonably estimate the impact of adoption on our consolidated financial statements. We plan to adopt the new guidance beginning October 1, 2018.

Acquisition

12 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

ACQUISITION

Acquisition of Bluenica Corporation

On October 5, 2015 we purchased all of the outstanding stock of Bluenica Corporation (“Bluenica”), a company focused on temperature monitoring of perishable goods in the food industry by using wireless sensors which are installed in grocery and convenience stores, restaurants, and in products during shipment and storage to ensure that quality, freshness and public health requirements are met. This acquisition forms the basis for our Digi Cold Chain Solutions.

The terms of the acquisition included an upfront cash payment together with earn-out payments. Cash of $2.9 million was paid at time of closing. The earn-out payments are scheduled to be paid in installments over a four-year period based on revenue achievement of the acquired business. Each of the earn-out payments will be calculated based on the revenue performance of Digi Cold Chain Solutions for each respective earn-out period. The cumulative amount of these earn-out payments will not exceed $11.6 million. An additional payment, not to exceed $3.5 million, may also be due depending on revenue performance. The fair value of this contingent consideration was $10.4 million at the date of acquisition (see Note 8 to the Consolidated Financial Statements). We have determined that the earn-out will be considered as part of the purchase price consideration as there are no continuing employment requirements associated with the earn-out. Costs directly related to the acquisition, including legal, accounting and valuation fees, of approximately $0.1 million have been charged directly to operations and are included in general and administrative expense in our Condensed Consolidated Statements of Operations in fiscal 2016.

The purchase price was allocated to the estimated fair value of assets acquired and liabilities assumed. The purchase price allocation resulted in the recognition of $11.0 million of goodwill. We believe that the acquisition resulted in the recognition of goodwill because this is a complementary acquisition for us and will provide a source of recurring revenue in a new vertical market.

Operating results for Bluenica, now known as Digi Cold Chain Solutions, are included in our Consolidated Statements of Operations from October 6, 2015. The Consolidated Balance Sheet as of September 30, 2016 reflects the final allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition.

The Bluenica acquisition has been accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed pursuant to the stock purchase agreement be recognized at fair value as of the acquisition date. During the third quarter of fiscal 2016, we finalized the purchase price allocation by recording adjustments to our deferred tax liabilities account as a result of the completion and filing of the last annual tax return for Bluenica.

2. ACQUISITION (CONTINUED)

The following table summarizes the values of Bluenica assets acquired and liabilities assumed as of the acquisition date (in thousands):



Cash	$	2,888
Purchase price payable upon completion of diligence matters	115
Fair value of contingent consideration on acquired business	10,400
Total purchase price consideration	$	13,403

Fair value of net tangible assets acquired	$	129
Fair value of identifiable intangible assets acquired:
Purchased and core technology	2,000
Customer relationships	900
Goodwill	10,985
Deferred tax liabilities, net	(611		)
Total	$	13,403

The weighted average useful life for all the identifiable intangibles listed above is 5.6 years. For purposes of determining fair value, the purchased and core technology identified above is assumed to have a useful life of five years and the customer relationships are assumed to have useful lives of seven years. Useful lives for identifiable intangible assets are estimated at the time of acquisition based on the periods of time from which we expect to derive benefits from the identifiable intangible assets.

The following unaudited pro forma condensed consolidated results of operations for fiscal 2015 have been prepared as if the acquisition of Bluenica had occurred at the beginning of fiscal 2015. Pro forma adjustments include amortization of identifiable intangible assets.



	Year ended
(in thousands, except per share data)	September 30, 2015
Total revenues	$	203,972
Income from continuing operations	$	8,505
Loss from discontinued operations, after income taxes	$	(2,845	)
Net income	$	5,660
Basic net income (loss) per common share:
Continuing operations	$	0.35
Discontinued operations	$	(0.12	)
Net income	$	0.23
Diluted net income (loss) per common share:
Continuing operations	$	0.34
Discontinued operations	$	(0.11	)
Net income (1)	$	0.22

(1) Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts.

Since the acquisition of Bluenica occurred close to the beginning of our fiscal 2016, we believe that the proforma amounts would be not be materially different from actual amounts. Revenue for fiscal 2016 related to the Bluenica acquisition was $0.7 million. As our operating costs related to the Bluenica acquisition are now integrated, operating income and related earnings per share for Bluenica are not determinable for fiscal 2016.

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

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Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations Discontinued Operations

12 Months Ended

Sep. 30, 2016

Discontinued Operations

DISCONTINUED OPERATIONS

On October 23, 2015, we sold all the outstanding stock of our wholly owned subsidiary, Etherios to West Monroe Partners, LLC. We sold Etherios as part of a strategy to focus on providing highly reliable machine connectivity solutions for business and mission-critical application environments. Etherios was included in our single operating segment.

3. DISCONTINUED OPERATIONS (CONTINUED)

Below is a summary of the gain on sale (in thousands):



Gross proceeds	$	4,096
Less:
Employee related liabilities	(1,134		)
Working capital adjustment	(113		)
Net cash proceeds	2,849
Present value of receivable due on October 23, 2016	2,941
Present value of receivable due on October 23, 2017	1,922
Total fair value of consideration received	7,712
Less:
Net assets of Etherios	(3,383		)
Facility abandonment costs	(725		)
Transaction costs, primarily professional fees	(734		)
Gain on sale of discontinued operations, before income taxes	$	2,870

The terms of the sale agreement provide that West Monroe Partners LLC will pay us $3.0 million on October 23, 2016 and $2.0 million on October 23, 2017. The present value of these amounts is included within the total fair value of consideration received. These receivable amounts are unsecured and non-interest bearing. The carrying value of these receivables presented on our Consolidated Balance Sheet at September 30, 2016 approximated their fair values, which were determined using level 3 cash flow fair value measurement techniques. We received the first payment of $3.0 million on October 21, 2016.

Goodwill has been included in the net assets of Etherios based on the relative fair value of Etherios compared to the fair value of the Company, as the Company consists of a single reporting unit for goodwill impairment testing purposes.

As a condition to the sale agreement, we retained the operating leases in the Dallas and Chicago locations. Digi is no longer using these facilities and has sublet the Dallas location to West Monroe Partners, LLC through December 31, 2017. Also in connection with the sale, we assigned our San Francisco lease to West Monroe Partners, LLC. A remaining potential obligation exists in the event of a default under the assigned lease. However, we believe the likelihood of a liability related to this lease is remote. As of September 30, 2016, the future minimum lease payments for the San Francisco lease are approximately $0.1 million.

Income (loss) from discontinued operations, after income taxes, as presented in the Consolidated Statements of Operations for the twelve months ended September 30, 2016, 2015 and 2014 is as follows (in thousands):



	Twelve months ended September 30,
	2016			2015			2014
Service revenue	$	891		$	9,011		$	9,528
Cost of service	713			8,101			9,421
Gross profit	178			910			107
Operating expenses:
Sales and marketing	148			1,970			1,825
Research and development	103			2,098			877
General and administrative	43			1,208			1,669
Restructuring	—			106			—
Total operating expenses	294			5,382			4,371
Loss from discontinued operations, before income taxes	(116		)	(4,472		)	(4,264		)
Gain on sale of discontinued operations, before income taxes	2,870			—			—
Income (loss) from discontinued operations, before income taxes	2,754			(4,472		)	(4,264		)
Income tax benefit on discontinued operations	(476		)	(1,627		)	(1,522		)
Income (loss) from discontinued operations, after income taxes	$	3,230		$	(2,845	)	$	(2,742	)

3. DISCONTINUED OPERATIONS (CONTINUED)

Income tax benefit on discontinued operations for the twelve months ended September 30, 2016 was $0.5 million and primarily represented income tax benefits for deductible transaction costs, partially offset by a tax expense for equity awards for which we will not receive a tax deduction. For tax purposes, this transaction resulted in a capital loss of $13.7 million, as the tax basis of the Etherios stock was higher than the book basis of the assets that were sold. Since we do not expect to be able to utilize this capital loss in the five year carryforward period, a deferred tax asset offset by a full valuation allowance of $5.1 million was recorded in the third quarter of fiscal 2016 upon completion of the capital loss calculation.

At September 30, 2015, the carrying amounts of major classes of assets and liabilities of discontinued operations included in the Consolidated Balance Sheet was as follows (in thousands):



	September 30, 2015
Current assets:
Accounts receivable, net	$	1,417
Deferred tax assets	127
Other current assets	80
Total current assets	1,624
Property, equipment and improvements, net	18
Identifiable intangible assets, net	1,531
Goodwill	1,914
Deferred tax assets (1)	(589		)
Total assets of discontinued operations	$	4,498

Current liabilities:
Accounts payable	$	50
Accrued compensation	1,346
Other current liabilities	85
Total current liabilities	1,481
Other non-current liabilities	95
Total liabilities of discontinued operations	$	1,576

(1) As of September 30, 2015, we had a consolidated net deferred income tax asset related to the United States federal jurisdiction. That net deferred income tax asset position included a deferred income tax liability of $589 thousand related to Etherios which was entirely in the United States federal tax jurisdiction.

The following table presents amortization, depreciation and purchases of property, equipment, improvements and certain other intangible assets of the discontinued operations related to Etherios (in thousands):



	Twelve months ended September 30,
	2016		2015			2014
Amortization of identifiable intangible assets	$	30	$	483		$	513
Depreciation of property, equipment and improvements	$	—	$	29		$	21
Purchases of property, equipment, improvements and certain other intangible assets	$	—	$	(11	)	$	(144	)

The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and other Identifiable Intangible Assets

12 Months Ended

Sep. 30, 2016

GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS, NET

Identifiable Intangible Assets, Net

Amortizable identifiable intangible assets, net as of September 30, 2016 and 2015 were comprised of the following (in thousands):



	September 30, 2016							September 30, 2015
	Gross carrying amount		Accum. amort.			Net		Gross carrying amount		Accum. amort.			Net
Purchased and core technology	$	46,594	$	(44,999	)	$	1,595	$	45,449	$	(45,424	)	$	25
License agreements	18		(10		)	8		18		(4		)	14
Patents and trademarks	11,619		(10,871		)	748		11,377		(10,385		)	992
Customer relationships	17,463		(15,773		)	1,690		17,090		(15,473		)	1,617
Total	$	75,694	$	(71,653	)	$	4,041	$	73,934	$	(71,286	)	$	2,648

Amortization expense for fiscal years 2016, 2015 and 2014 was as follows (in thousands):



Fiscal year	Total
2016	$	1,842
2015	$	2,427
2014	$	3,076

Estimated amortization expense for the next five years is as follows (in thousands):



Fiscal year	Total
2017	$	1,350
2018	$	950
2019	$	723
2020	$	665
2021	$	129

Goodwill

The changes in the carrying amount of goodwill were (in thousands):



	Fiscal years ended September 30,
	2016			2015
Beginning balance, October 1	$	100,183		$	101,484
Acquisition of Bluenica Corporation	10,985			—
Foreign currency translation adjustment	(1,720		)	(1,301		)
Ending balance, September 30	$	109,448		$	100,183

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

SEGMENT INFORMATION AND MAJOR CUSTOMERS

Segment Information and Major Customers

12 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

We operate under a single operating and reporting segment. Our revenue consists of hardware product revenue and service revenue. In an effort to provide further transparency of our financial information, beginning the first quarter of fiscal 2016, we transitioned away from reporting revenue in terms of growth and mature hardware products and now report four product categories: Cellular routers and gateways, Radio Frequency (RF), Embedded and Network. We believe this is a more meaningful presentation and reflects how we are monitoring our revenue.

Our cellular product category includes cellular routers and all gateways, and the RF product category includes XBee^® modules as well as other RF solutions. The embedded product category includes Digi Connect^® and Rabbit^® embedded systems on

5. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED)

module and single board computers. The network product category, which has the highest concentration of mature products, includes console and serial servers and USB connected devices.

Our service offerings include Cold Chain Solutions, wireless product design and development services, our PaaS recurring revenue generated from Device Cloud platform, and technical support services.

The following table presents our revenue for each product category (in thousands):



	Fiscal years ended September 30,
	2016		2015		2014
Cellular routers and gateways	$	48,373	$	58,666	$	39,215
RF	33,924		34,373		29,094
Embedded	56,489		51,063		49,681
Network	57,315		51,395		54,856
Total product revenue	196,101		195,497		172,846
Service	6,904		8,350		10,327
Total revenue	$	203,005	$	203,847	$	183,173

The information in the following table provides revenue by the geographic location of the customer (in thousands):



	Fiscal years ended September 30,
	2016		2015		2014
North America, primarily United States	$	131,457	$	127,592	$	106,893
Europe, Middle East & Africa	44,932		47,523		47,729
Asia	20,390		22,907		22,762
Latin America	6,226		5,825		5,789
Total revenue	$	203,005	$	203,847	$	183,173

Net property, equipment and improvements by geographic location were as follows (in thousands):



	Fiscal years ended September 30,
	2016		2015		2014
United States	$	13,861	$	14,085	$	12,691
International, primarily Europe	180		254		418
Total net property, equipment and improvements	$	14,041	$	14,339	$	13,109

Our U.S. export sales represented 38.7%, 39.4% and 40.6% of revenue for the fiscal years ended September 30, 2016, 2015 and 2014. No single customer exceeded 10% of revenue for any of the periods presented. No single customer exceeded 10% of total accounts receivable at September 30, 2016. At September 30, 2015, we had two customers, whose accounts receivable balance represented 10.7% and 11.6% of total accounts receivable. No single customer exceeded 10% of total accounts receivable at September 30, 2014.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Selected Balance Sheet Data [Abstract]

Selected Balance Sheet Data

12 Months Ended

Sep. 30, 2016

SELECTED BALANCE SHEET DATA

(in thousands)



	As of September 30,
	2016		2015
Accounts receivable, net:
Accounts receivable	$	30,885	$	29,890
Less allowance for doubtful accounts	209		285
Less reserve for future returns and pricing adjustments	1,991		1,817
Total accounts receivable, net	$	28,685	$	27,788

Inventories:
Raw materials	$	21,116	$	26,037
Work in process	802		598
Finished goods	4,358		5,242
Total inventories	$	26,276	$	31,877

Property, equipment and improvements, net:
Land	$	1,800	$	1,800
Buildings	10,522		10,522
Improvements	3,239		3,328
Equipment	15,778		15,691
Purchased software	3,377		3,458
Furniture and fixtures	2,803		2,720
Total property, equipment and improvements, gross	37,519		37,519
Less accumulated depreciation and amortization	23,478		23,180
Total property, equipment and improvements, net	$	14,041	$	14,339

Marketable Securities

12 Months Ended

Sep. 30, 2016

Marketable Securities [Abstract]

MARKETABLE SECURITIES

Our marketable securities consist of certificates of deposit, commercial paper, corporate bonds and government municipal bonds. We analyze our available-for-sale marketable securities for impairment on an ongoing basis. When we perform this analysis, we consider factors such as the length of time and extent to which the securities have been in an unrealized loss position and the trend of any unrealized losses. We also consider whether an unrealized loss is a temporary loss or an other-than-temporary loss such as: (a) whether we have the intent to sell the security, or (b) whether it is more likely than not that we will be required to sell the security before its anticipated recovery, or (c) permanent impairment due to bankruptcy or insolvency.

In order to estimate the fair value for each security in our investment portfolio, we obtain quoted market prices and trading activity for each security where available. We obtain relevant information from our investment advisor and, if warranted, also may review the financial solvency of certain security issuers. As of September 30, 2016, 18 of our 48 securities that we held were trading below our amortized cost basis. We determined each decline in value to be temporary based upon the above described factors. We expect to realize the fair value of these securities, plus accrued interest, either at the time of maturity or when the security is sold. All of our current holdings are classified as available-for-sale marketable securities and are recorded at fair value on our consolidated balance sheet with the unrealized gains and losses recorded in accumulated other comprehensive loss. All of our current marketable securities are scheduled to mature in less than one year and our non-current marketable securities are scheduled to mature in less than two years. We received proceeds from the sale of our available-for-sale marketable securities of $73.7 million, $38.0 million and $47.4 million for fiscal 2016, 2015 and 2014, respectively.

7. MARKETABLE SECURITIES (CONTINUED)

At September 30, 2016 our marketable securities consisted of (in thousands):



	Amortized Cost (1)		Unrealized Gains		Unrealized Losses			Fair Value (1)
Current marketable securities:
Corporate bonds	$	28,801	$	—	$	(34	)	$	28,767
Commercial paper	23,963		—		(20		)	23,943
Certificates of deposit	3,755		13		—			3,768
Government municipal bonds	1,904		—		—			1,904
Current marketable securities	58,423		13		(54		)	58,382
Non-current marketable securities:
Certificates of deposit	3,505		36		—			3,541
Total marketable securities	$	61,928	$	49	$	(54	)	$	61,923


(1)	Included in amortized cost and fair value is purchased and accrued interest of $271.

At September 30, 2015 our marketable securities consisted of (in thousands):



	Amortized Cost (1)		Unrealized Gains		Unrealized Losses			Fair Value (1)
Current marketable securities:
Corporate bonds	$	31,753	$	—	$	(39	)	$	31,714
Commercial paper	7,986		—		(1		)	7,985
Certificates of deposit	6,253		8		—			6,261
Government municipal bonds	1,232		—		(1		)	1,231
Current marketable securities	47,224		8		(41		)	47,191
Non-current marketable securities:
Corporate bonds	4,138		—		(12		)	4,126
Certificates of deposit	7,511		2		(6		)	7,507
Government municipal bonds	1,996		—		(3		)	1,993
Non-current marketable securities	13,645		2		(21		)	13,626
Total marketable securities	$	60,869	$	10	$	(62	)	$	60,817


(1)	Included in amortized cost and fair value is purchased and accrued interest of $252.

The following tables show the fair values and gross unrealized losses of our available-for-sale securities that have been in a continuous unrealized loss position deemed to be temporary, aggregated by investment category (in thousands):



	September 30, 2016
	Less than 12 Months					More than 12 Months
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate bonds	$	24,454	$	(33	)	$	4,102	$	(1	)
Commercial paper	23,943		(20		)	—		—
Total	$	48,397	$	(53	)	$	4,102	$	(1	)

7. MARKETABLE SECURITIES (CONTINUED)



	September 30, 2015
	Less than 12 Months					More than 12 Months
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate bonds	$	33,664	$	(52	)	$	—	$	—
Commercial paper	5,987		(1		)	—		—
Certificates of deposit	4,244		(6		)	499		(1		)
Government municipal bonds	3,159		(3		)	—		—
Total	$	47,054	$	(62	)	$	499	$	(1	)

The entire disclosure for investments in certain debt and equity securities.

Fair Value Measurements

12 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. This standard also establishes a hierarchy for inputs used in measuring fair value. This standard maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability based upon the best information available in the circumstances.

The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable for the asset or liability and their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 may also include certain investment securities for which there is limited market activity or a decrease in the observability of market pricing for the investments, such that the determination of fair value requires significant judgment or estimation.

Fair value is applied to financial assets such as our marketable securities, which are classified and accounted for as available-for-sale and to financial liabilities for contingent consideration. These items are stated at fair value at each reporting period using the above guidance. The following tables provide information by level for financial assets and liabilities that are measured at fair value on a recurring basis (in thousands):



			Fair Value Measurements at September 30, 2016 using:
	Total carrying value at September 30, 2016		Quoted price in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Money market	$	44,319	$	44,319	$	—	$	—
Corporate bonds	28,767		—		28,767		—
Commercial paper	23,943		—		23,943		—
Certificates of deposit	7,309		—		7,309		—
Government municipal bonds	1,904		—		1,904		—
Total assets measured at fair value	$	106,242	$	44,319	$	61,923	$	—
Liabilities:
Contingent consideration on acquired business	9,960		—		—		9,960
Total liabilities measured at fair value	$	9,960	$	—	$	—	$	9,960

8. FAIR VALUE MEASUREMENTS (CONTINUED)



			Fair Value Measurements at September 30, 2015 using:
	Total carrying value at September 30, 2015		Quoted price in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Money market	$	14,436	$	14,436	$	—	$	—
Corporate bonds	35,840		—		35,840		—
Commercial paper	7,985		—		7,985		—
Certificates of deposit	13,768		—		13,768		—
Government municipal bonds	3,224		—		3,224		—
Total assets measured at fair value	$	75,253	$	14,436	$	60,817	$	—

Our money market funds, which have been determined to be cash equivalents, are measured at fair value using quoted market prices in active markets for identical assets and are therefore classified as Level 1 assets. We value our Level 2 assets using inputs that are based on market indices of similar assets within an active market. There were no transfers into or out of our Level 2 financial assets during the twelve months ended September 30, 2016.

The use of different assumptions, applying different judgment to matters that are inherently subjective and changes in future market conditions could result in different estimates of fair value of our securities or contingent consideration, currently and in the future. If market conditions deteriorate, we may incur impairment charges for securities in our investment portfolio. We may also incur changes to our contingent consideration liability as discussed below.

In connection with the Bluenica acquisition discussed in Note 2, we are required to make contingent payments over a period of up to four years, subject to Digi Cold Chain Solutions achieving specified revenue thresholds. The fair value of the liability for contingent payments recognized upon acquisition was $10.4 million, and was estimated by discounting to present value the probability-weighted contingent payments expected to be made. Assumptions used in this calculation included the discount rate and various probability factors. This liability is considered to be a Level 3 financial liability that is re-measured each reporting period.

The following table presents a reconciliation of the liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the twelve months ended September 30, 2016 (in thousands):



	Twelve months ended September 30, 2016
Fair value at beginning of period	$	—
Purchase price contingent consideration	10,400
Change in fair value of contingent consideration	(440		)
Fair value at end of period	$	9,960

The change in fair value of contingent consideration for the acquisition of Bluenica is included in general and administrative and interest expense on our Condensed Consolidated Statements of Operations and reflects our estimate of the probability of achieving the relevant targets and is discounted based on our estimated discount rate. We have estimated the fair value of the contingent consideration based on the probability of achieving the specified revenue thresholds at 75.8% to 98.0%. A significant increase (decrease) in our estimates of achieving the relevant targets could materially increase (decrease) the fair value of the contingent consideration liability.

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.

Product Warranties Disclosures [Abstract]

Product Warranty Obligation

12 Months Ended

Sep. 30, 2016

PRODUCT WARRANTY OBLIGATION

The following table summarizes the activity associated with the product warranty accrual (in thousands) and is listed on our Consolidated Balance Sheets under Current Liabilities:



	Balance at		Warranties		Settlements			Balance at
Fiscal year	October 1		issued		made			September 30
2016	$	1,014	$	771	$	(752	)	$	1,033
2015	$	862	$	967	$	(815	)	$	1,014
2014	$	1,063	$	627	$	(828	)	$	862

We are not responsible for, and do not warrant that, custom software versions, created by original equipment manufacturer (OEM) customers based upon our software source code, will function in a particular way, will conform to any specifications or are fit for any particular purpose. Further, we do not indemnify these customers from any third-party liability as it relates to or arises from any customization or modifications made by the OEM customer.

Restructuring

12 Months Ended

Sep. 30, 2016

Restructuring and Related Activities [Abstract]

RESTRUCTURING

Below is a summary of the restructuring charges and other activity within the restructuring accrual (in thousands):



	2016 Restructuring						2015 Restructuring			2014 Restructuring			2013 Restructuring
	Employee Termination Costs			Other			Employee Termination Costs			Employee Termination Costs			Employee Termination Costs			Total
Balance at September 30, 2013	$	—		$	—		$	—		$	—		$	350		$	350
Restructuring charge	—			—			—			152			—			152
Payments	—			—			—			(152		)	(279		)	(431		)
Reversals	—			—			—			—			(71		)	(71		)
Balance at September 30, 2014	—			—			—			—			—			—
Restructuring charge	—			—			412			—			—			412
Payments	—			—			(403		)	—			—			(403		)
Reversals	—			—			(9		)	—			—			(9		)
Balance at September 30, 2015	—			—			—			—			—			—
Restructuring charge	558			195			—			—			—			753
Payments	(559		)	(195		)	—			—			—			(754		)
Reversals	(6		)	—			—			—			—			(6		)
Foreign currency fluctuation	7			—			—			—			—			7
Balance at September 30, 2016	$	—		$	—		$	—		$	—		$	—		$	—

2016 Restructuring

On January 19, 2016, we approved a restructuring plan for our wireless design services group. This plan resulted in an elimination of 5 positions. We recorded a restructuring charge of $0.1 million related to severance during the second quarter of fiscal 2016 and paid the majority of the severance during that same quarter.

On November 19, 2015, we approved a restructuring plan impacting our corporate staff. The plan closed our Dortmund, Germany office and relocated certain employees to our Munich office. We also recorded a contract termination charge as we relocated employees in our Minneapolis, Minnesota office to our World Headquarters in Minnetonka, Minnesota in December 2015. We recorded a restructuring charge of $0.7 million that included $0.5 million of severance and $0.2 million of contract termination costs during the first quarter of fiscal 2016. This restructuring resulted in an elimination of 10 positions. The payments associated with these charges were completed in the third quarter of fiscal 2016.

10. RESTRUCTURING (CONTINUED)

2015 Restructuring

On January 22, 2015, we announced the closure of our India location. The March closure resulted in the elimination of approximately 38 employees from engineering, sales and administration. We recorded a restructuring charge of $0.4 million related to severance during the second quarter of fiscal 2015. The payments associated with this charge were completed during the third quarter of fiscal 2015.

2014 Restructuring

On October 31, 2013, we announced our intention to restructure certain of our operations in India. The restructuring was primarily associated with cost reduction initiatives resulting in the elimination of approximately 40 engineering and sales positions in our work force. We recorded a restructuring charge of $0.2 million related to severance during the first quarter of fiscal 2014. The payments associated with these charges and all the actions associated with the restructuring were completed during the third quarter of fiscal 2014.

2013 Restructuring

On September 27, 2013, we announced our intention to restructure certain of our operations in the U.S. The restructuring was primarily associated with cost reduction initiatives and resulted in the elimination of 15 positions in our work force. We recorded a restructuring charge of $0.4 million for severance during the fourth quarter of fiscal 2013. The payments associated with these charges and all the actions associated with the restructuring along with a reversal of $0.1 million were completed during the first quarter of fiscal 2014.

Income Taxes

12 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

The components of income from continuing operations, before income taxes are as follows (in thousands):



	Fiscal years ended September 30,
	2016		2015		2014
United States	$	9,841	$	6,934	$	(833	)
International	6,849		6,183		5,894
Income from continuing operations, before income taxes	$	16,690	$	13,117	$	5,061

The components of the income tax provision are as follows (in thousands):



	Fiscal years ended September 30,
	2016			2015			2014
Current:
Federal	$	(141	)	$	1,452		$	1,007
State	139			453			(58		)
Foreign	2,099			2,279			2,196
Deferred:
U.S.	1,260			(297		)	(2,417		)
Foreign	(145		)	(203		)	(160		)
Income tax provision	$	3,212		$	3,684		$	568

11. INCOME TAXES (CONTINUED)

The net deferred tax asset consists of the following (in thousands):



	As of September 30,
	2016			2015
Current deferred tax asset	$	—		$	3,252
Non-current deferred tax asset	7,295			6,255
Current deferred tax liability	—			(36		)
Non-current deferred tax liability	(616		)	(135		)
Net deferred tax asset	$	6,679		$	9,336

Uncollectible accounts and other reserves	$	915		$	966
Depreciation and amortization	421			206
Inventories	683			999
Compensation costs	4,925			7,130
Tax carryforwards	6,263			1,185
Valuation allowance	(5,970		)	(862		)
Identifiable intangible assets	(558		)	(288		)
Net deferred tax asset	$	6,679		$	9,336

As of September 30, 2016, we have estimated carryforwards for tax purposes as follows: We have $0.9 million of carryforwards mostly related to state research and development tax credits and carryforwards consisting of a U.S. capital loss of $5.1 million and non-U.S. net operating losses of $0.3 million. The majority of the state research and development tax credits and non-U.S. net operating losses have an unlimited carryforward period. Our non-U.S. tax credit carryforwards will expire in 2028. Our U.S. capital loss carryforward will expire in 2020.

Our valuation allowance for certain U.S. and foreign locations increased to $6.0 million at September 30, 2016 from $0.9 million at September 30, 2015, primarily due to the capital loss realized on the sale of Etherios. We are not expecting to generate sufficient capital gains within the carryforward period to fully utilize the capital loss. The amount of the deferred tax assets realized could vary if there are differences in the timing or amount of future reversals of existing deferred tax liabilities or changes in the amounts of future taxable income. If our future taxable income projections are not realized, an additional valuation allowance may be required, and would be reflected as income tax expense at the time that any such change in future taxable income is determined.

The reconciliation of the statutory federal income tax amount to our income tax provision is as follows (in thousands):



	Fiscal years ended September 30,
	2016			2015			2014
Statutory income tax amount	$	5,548		$	4,491		$	1,721
Increase (decrease) resulting from:
State taxes, net of federal benefits	204			(190		)	(251		)
Utilization of tax credits	(1,116		)	(250		)	(76		)
Manufacturing deduction	(450		)	(285		)	(92		)
Discrete tax benefits	(1,461		)	(818		)	(1,475		)
Foreign operations	276			181			316
Valuation reserve	(43		)	297			11
Adjustment of tax contingency reserves	202			71			168
Meals and entertainment	55			64			93
Employee stock purchase plan	83			76			85
Contingent consideration	(154		)	—			—
Other, net	68			47			68
Income tax provision	$	3,212		$	3,684		$	568

11. INCOME TAXES (CONTINUED)

During fiscal 2016, we recorded net tax benefits of $1.5 million, primarily from the reinstatement of the federal research and development tax credit for calendar year 2015 and the reversal of tax reserves due to the expiration of statutes of limitation from U.S. and foreign tax jurisdictions. In addition, we filed amended income tax returns resulting in an additional domestic refund related to qualified manufacturing activities. These benefits are included within the discrete tax benefits in the above table.

During fiscal 2015, we recorded net tax benefits of $0.8 million, resulting from the reinstatement of the research and development tax credit for calendar year 2014, reversal of tax reserves due to the expiration of statute of limitations from U.S. and foreign tax jurisdictions and reversal of tax reserves due to the resolution of tax audits. These benefits are included within the discrete tax benefits in the above table.

During fiscal 2014, we recorded net tax benefits of $1.5 million related to the re-measurement and reversal of certain income tax reserves as a result of a federal income tax audit of fiscal 2012, the reassessment of state research and development tax credits and the release of income tax reserves due to the expiration of statute of limitations from U.S. and foreign tax jurisdictions. These benefits are included within the discrete tax benefits in the above table.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is (in thousands):



	Fiscal years ended September 30,
	2016			2015			2014
Unrecognized tax benefits at beginning of fiscal year	$	1,618		$	2,301		$	3,332
Increases related to:
Prior year income tax positions	107			110			181
Current year income tax positions	240			144			148
Decreases related to:
Prior year income tax positions	(71		)	(255		)	(1,105		)
Settlements	(30		)	(74		)	(95		)
Expiration of statute of limitations	(156		)	(608		)	(160		)
Unrecognized tax benefits at end of fiscal year	$	1,708		$	1,618		$	2,301

The total amount of unrecognized tax benefits at September 30, 2016 that, if recognized, would affect our effective tax rate is $1.6 million. We expect that it is reasonably possible that the total amounts of unrecognized tax benefits will decrease approximately $0.7 million over the next 12 months due to the expiration of various statutes of limitations.

Of the $1.7 million of unrecognized tax benefits, $1.3 million is included in non-current income taxes payable and $0.4 million is included with non-current deferred tax assets on the consolidated balance sheet at September 30, 2016.

We recognize interest and penalties related to income tax matters in income tax expense. During fiscal 2016 and 2015, there were insignificant amounts of interest and penalties related to income tax matters in income tax expense. We had accrued interest and penalties related to unrecognized tax benefits of $0.2 million at September 30, 2016 and $0.3 million at September 30, 2015. These accrued interest and penalties are included in our non-current income taxes payable on our consolidated balance sheets.

We operate in multiple tax jurisdictions both in the U.S. and outside of the U.S and face audits from various tax authorities regarding transfer pricing, tax credits, and other matters. Accordingly, we must determine the appropriate allocation of income to each of these jurisdictions. This determination requires us to make several estimates and assumptions. Tax audits associated with the allocation of this income, and other complex issues, may require an extended period of time to resolve and may result in adjustments to our income tax balances in those years that are material to our consolidated balance sheet and results of operations. With a few exceptions, we are no longer subject to income tax examination for tax years prior to fiscal 2013. For state tax authorities, most notably in California and Texas, generally we are no longer subject to income tax examination for tax years before fiscal 2012, and for Minnesota for tax years prior to fiscal 2014. We do not anticipate significant changes to our unrecognized tax benefits as a result of these examinations.

11. INCOME TAXES (CONTINUED)

At September 30, 2016, we had approximately $31.5 million of accumulated undistributed foreign earnings, for which we have not accrued additional U.S. tax. Our policy is to reinvest earnings of our foreign subsidiaries indefinitely to fund current operations and provide for future international expansion opportunities, and only repatriate earnings to the extent that U.S. taxes have already been recorded. Although we have no current need or intention to repatriate historical earnings in the form of cash to the United States, if we change our assertion from indefinitely reinvesting undistributed foreign earnings, we would have to accrue applicable taxes. The amount of any taxes and the application of any tax credits would be determined based on the income tax laws at the time of such repatriation. Under current tax laws, we estimate the unrecognized deferred tax liability to be up to $0.6 million.

Stock-Based Compensation

12 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

During fiscal 2016, stock-based awards were granted under our 2016 Omnibus Incentive Plan (the “2016 Plan”), as well as our 2014 Omnibus Incentive Plan (the “2014 Plan”). Grants under the 2014 Plan ceased upon stockholder approval of the 2016 Plan during the second quarter of fiscal 2016. The authority to grant options under the 2016 Plan and set other terms and conditions rests with the Compensation Committee of the Board of Directors. We also have awards outstanding under our 2013 Omnibus Incentive Plan (the “2013 Plan”), 2000 Omnibus Stock Plan, as amended and restated as of December 4, 2009 (the “2000 Plan”), and the Stock Option Plan, as amended and restated as of November 27, 2006 (the “Stock Option Plan”) and our Non-Officer Stock Option Plan as amended and restated as of November 27, 2006 (the “Non-Officer Plan”).

The 2016 Plan initially authorized the issuance of up to 1,500,000 common shares in connection with awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based full value awards or other stock-based awards. Eligible participants include our employees, our affiliates, non-employee directors of our Company and any consultant or advisor who is a natural person and provides services to us or our affiliates. Options that have been granted under the 2016 Plan typically vest over a four-year period and will expire if unexercised after seven years from the date of grant. Restricted stock unit awards (“RSUs”) that have been granted to directors typically vest in one year. RSUs that have been granted to executives and employees typically vest in November over a four-year period. Awards may be granted under the 2016 Plan until January 31, 2026. Options under the 2016 Plan can be granted as either incentive stock options (“ISOs”) or non-statutory stock options (“NSOs”). The exercise price of options and the grant date price of restricted stock is determined by our Compensation Committee but may not be less than the fair market value of our common stock based on the closing price on the date of grant. Upon exercise, we issue new shares of stock. As of September 30, 2016, there were approximately 1,450,982 shares available for future grants under the 2016 Plan.

The 2014 Plan initially authorized the issuance of up to 2,250,000 common shares in connection with awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based full value awards or other stock-based awards. Eligible participants included our employees, our affiliates, non-employee directors of our Company and any consultant or advisor who is a natural person and provides services to us or our affiliates. Options granted under this plan generally vested over a four year service period and expired if unexercised after eight years from the date of grant. Restricted stock awards (RSU's) that were granted to Directors typically vested in one year. RSU's that were granted to executives and employees typically vested in November over a four-year period. Options under the 2014 Plan were granted as either incentive stock options (ISOs) or non-statutory stock options (NSOs). Awards may no longer be granted under the 2014 Plan as the plan was terminated effective February 1, 2016 at the Annual Meeting of Stockholders. The exercise price of options and the grant date price of restricted stock was determined by our Compensation Committee but could not be less than the fair market value of our common stock based on the closing price on the date of grant.

The 2013 Plan initially authorized the issuance of up to 1,750,000 common shares in connection with awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based full value awards or stock awards. Eligible participants included our employees, non-employee directors, consultants and advisors. Options granted under this plan generally vested over a four year service period and expired if unexercised after eight years from the date of grant. RSU's that were granted to Directors typically vested in one year. Awards may no longer be granted under the Incentive Plan as the plan was terminated effective January 27, 2014 at the Annual Meeting of Stockholders. Options under the 2013 Plan were granted as either ISOs or NSOs. The exercise price was determined by our Compensation Committee but could not be less than the fair market value of our common stock based on the closing price on the date of grant.

The 2000 Plan initially authorized the issuance of up to 5,750,000 common shares in connection with awards of stock options, stock appreciation rights, restricted stock, performance units or stock awards. Eligible participants included our employees, non-employee directors, consultants and advisors. An authorization to issue an additional 2,500,000 common shares was ratified on January 25, 2010 at the Annual Meeting of Stockholders. Awards may no longer be granted under the 2000 Plan as

12. STOCK-BASED COMPENSATION (CONTINUED)

the plan was terminated as to future awards on January 28, 2013 at the Annual Meeting of Stockholders. Options under the 2000 Plan were granted as either ISOs or non-statutory stock options NSOs. The exercise price was determined by our Compensation Committee but could not be less than the fair market value of our common stock based on the closing price on the date of grant.

Awards outstanding under the Stock Option Plan and the Non-Officer Plan included NSOs. In addition, the Stock Option Plan also included ISOs to employees and others who provided services to us, including consultants, advisers and directors. Options granted under these plans generally vested over a four year service period and will expire if unexercised after ten years from the date of grant. The exercise price for ISOs and non-employee director options granted under the Stock Option Plan was set at the fair market value of our common stock based on the closing price on the date of grant. The exercise price for NSOs granted under the Stock Option Plan or the Non-Officer Plan was set by the Compensation Committee of the Board of Directors and was set to the exercise price based on the closing price on the date of grant.

Our equity plans and corresponding forms of award agreements generally have provisions allowing employees to elect to satisfy tax withholding obligations through the delivery of shares, having us retain a portion of shares issuable under the award or paying cash to us for the withholding. During fiscal 2016 and 2015, our employees forfeited 47,464 shares and 9,371 shares, respectively in order to satisfy $0.6 million and $0.1 million, respectively, of withholding tax obligations related to stock-based compensation, pursuant to terms of awards under our board and shareholder-approved compensation plans. No shares were forfeited to satisfy withholding obligations during fiscal 2014.

We recorded cash received from the exercise of stock options of $7.2 million, $6.6 million and $3.7 million during fiscal years 2016, 2015 and 2014, respectively. During fiscal 2016, there were $0.2 million of excess tax benefits from stock-based compensation. The were no excess tax benefits from stock-based compensation during fiscal 2015 and excess tax benefits were minimal during fiscal year 2014.

We sponsor an Employee Stock Purchase Plan, as amended and restated as of October 29, 2013, December 4, 2009 and November 27, 2006 (the “Purchase Plan”), covering all domestic employees with at least 90 days of continuous service and who are customarily employed at least 20 hours per week. The Purchase Plan allows eligible participants the right to purchase common stock on a quarterly basis at the lower of 85% of the market price at the beginning or end of each three-month offering period. The most recent amendments to the Purchase Plan, ratified by our stockholders on January 27, 2014, increased the total number of shares to 2,800,000 that may be purchased under the plan. Employee contributions to the Purchase Plan were $0.9 million in both fiscal 2016 and 2015, and $1.0 million in fiscal 2014. Pursuant to the Purchase Plan, 103,915, 123,847, and 129,449 shares of common stock were issued to employees during fiscal 2016, 2015 and 2014, respectively. Shares are issued under the Purchase Plan from treasury stock. As of September 30, 2016, 513,616 shares of common stock were available for future issuances under the Purchase Plan.

Stock-based compensation cost capitalized as part of inventory was immaterial as of September 30, 2016, 2015 and 2014.

Stock-based compensation expense is included in the consolidated results of operations as follows (in thousands):



	Fiscal years ended September 30,
	2016			2015			2014
Cost of sales	$	215		$	221		$	207
Sales and marketing	921			1,158			1,171
Research and development	590			561			636
General and administrative	1,923			1,941			1,933
Stock-based compensation before income taxes	3,649			3,881			3,947
Income tax benefit	(1,185		)	(1,343		)	(1,361		)
Stock-based compensation after income taxes	$	2,464		$	2,538		$	2,586

12. STOCK-BASED COMPENSATION (CONTINUED)

The following table summarizes our stock option activity (in thousands, except per common share amounts):



	Options Outstanding		Weighted Average Exercised Price	Weighted Average Contractual Term (in years)	Aggregate Intrinsic Value (1)
Balance at September 30, 2015	4,800		$10.21
Granted	553		11.46
Exercised	(772	)	9.65
Forfeited / Canceled	(618	)	11.06
Balance at September 30, 2016	3,963		$10.36	4.5	$	6,078

Exercisable at September 30, 2016	2,857		$10.49	3.7	$	4,158

(1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $11.40 as of September 30, 2016, which would have been received by the option holders had all option holders exercised their options as of that date.

The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. The total intrinsic value of all options exercised during each of the twelve months ended September 30, 2016, 2015 and 2014 was $1.9 million, $0.9 million and $0.5 million, respectively.

The table below shows the weighted average fair value, which was determined based upon the fair value of each option on the grant date utilizing the Black-Scholes option-pricing model and the related assumptions:



	Fiscal years ended September 30,
	2016		2015		2014
Weighted average per option grant date fair value	$	3.90	$	2.98	$	4.35
Assumptions used for option grants:
Risk free interest rate	1.22% - 1.85%		1.57% - 1.85%		1.76% - 2.02%
Expected term	6.00 years		6.00 years		6.00 years
Expected volatility	32% - 33%		32% - 36%		38% - 40%
Weighted average volatility	32%		35%		40%
Expected dividend yield	0		0		0

The fair value of each option award granted during the periods presented was estimated using the Black-Scholes option valuation model that uses the assumptions noted in the table above. Expected volatilities are based on the historical volatility of our stock. We use historical data to estimate option exercise and employee termination information within the valuation model. The expected term of options granted is derived from the vesting period and historical information and represents the period of time that options granted are expected to be outstanding. The risk-free rate used is the zero-coupon U.S. Treasury bond rate in effect at the time of the grant whose maturity equals the expected term of the option.

We use historical data to estimate pre-vesting forfeiture rates. The pre-vesting forfeiture rate used in fiscal 2016 was 10.0%. As of September 30, 2016, the total unrecognized compensation cost related to non-vested stock-based compensation arrangements, net of expected forfeitures, was $2.9 million and the related weighted average period over which it is expected to be recognized was approximately 3.0 years.

12. STOCK-BASED COMPENSATION (CONTINUED)

At September 30, 2016, the weighted average exercise price and remaining life of the stock options are as follows (in thousands, except remaining life and exercise price):



Options Outstanding					Options Exercisable
Range of Exercise Prices	Options Outstanding	Weighted Average Remaining Contractual Life (In Years)	Weighted Average Exercise Price		Number of Shares Vested	Weighted Average Exercise Price
$7.40 - $8.03	611	4.35	$	7.74	460	$	7.85
$8.04 - $9.03	627	5.49	$	8.52	234	$	8.42
$9.04 - $9.68	685	5.00	$	9.53	662	$	9.53
$9.69 - $10.81	830	5.24	$	10.57	664	$	10.58
$10.82 - $12.63	724	5.13	$	12.10	351	$	11.73
$12.64 - $14.75	268	0.39	$	13.47	268	$	13.47
$14.76 - $15.23	218	1.16	$	15.23	218	$	15.23
$7.40 - $15.23	3,963	4.53	$	10.36	2,857	$	10.49

The total grant date fair value of shares vested was $2.9 million in both fiscal 2016 and 2015 and $0.8 million in fiscal 2014.

A summary of our non-vested restricted stock units as of September 30, 2016 and changes during the twelve months then ended is presented below (in thousands, except per common share amounts):



	Number of Awards		Weighted Average Grant Date Fair Value
Nonvested at September 30, 2015	543		$	8.41
Granted	251		$	10.92
Vested	(185	)	$	8.55
Canceled	(104	)	$	8.13
Nonvested at September 30, 2016	505		$	9.67

As of September 30, 2016, the total unrecognized compensation cost related to non-vested restricted stock units was $3.0 million and the related weighted average period over which it is expected to be recognized was approximately 1.3 years.

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

Common Stock Repurchase	12 Months Ended
Common Stock Repurchase	Sep. 30, 2016
Common Stock Repurchase [Abstract]
COMMON STOCK REPURCHASE	COMMON STOCK REPURCHASE Common Stock Repurchase Program On October 29, 2013, our Board of Directors authorized a program to repurchase up to $20.0 million of our common stock, primarily to support our employee stock purchase program and to return capital to shareholders. During the first quarter of fiscal 2015, we repurchased 287,787 shares for $2.2 million under this plan which expired on October 31, 2014. On October 28, 2014, our Board of Directors authorized a program to repurchase up to $15.0 million of our common stock primarily to return capital to shareholders and to support our employee stock purchase program. This authorization began on November 1, 2014 and expired on October 31, 2015. There were no shares repurchased under this program. On April 26, 2016, our Board of Directors authorized a program to repurchase up to $15.0 million of our common stock primarily to return capital to shareholders. This authorization expires on May 1, 2017. Shares repurchased under this program may be made through open market and privately negotiated transactions from time to time and in amounts that management deems appropriate. The amount and timing of share repurchases, if any, depends upon market conditions and other corporate considerations. There were no shares repurchased under this program as of September 30, 2016.

Share Rights Plan	12 Months Ended
Share Rights Plan	Sep. 30, 2016
Warrants and Rights Note Disclosure [Abstract]
SHARE RIGHTS PLAN	SHARE RIGHTS PLAN Under our share rights plan, each right entitles its holder to buy one one-hundredth of a share of a Series A Junior Participating Preferred Stock at an exercise price of $60, subject to adjustment. The rights are not exercisable until a specified distribution date as defined in the Share Rights Agreement. The Rights will expire on June 30, 2018, unless extended or earlier redeemed or exchanged by us as defined in the Share Rights Agreement.

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

Quarterly Financial Information Disclosure [Abstract]

Employee Benefit Plans	12 Months Ended
Employee Benefit Plans	Sep. 30, 2016
Compensation and Retirement Disclosure [Abstract]
EMPLOYEE BENEFIT PLANS	EMPLOYEE BENEFIT PLANS We currently have a savings and profit sharing plan pursuant to Section 401(k) of the Internal Revenue Code (the Code), whereby eligible employees may contribute up to 25% of their pre-tax earnings, not to exceed amounts allowed under the Code. We provide a match of 100% on the first 3% of each employee’s bi-weekly contribution and a 50% match on the next 2% of each employee’s bi-weekly contribution. In addition, we may make contributions to the plan at the discretion of the Board of Directors. We provided matching contributions of $1.4 million for fiscal 2016, $1.7 million for fiscal 2015 and $1.6 million for fiscal 2014.

Commitments

12 Months Ended

Sep. 30, 2016

Leases, Operating [Abstract]

COMMITMENTS

We have entered into various operating lease agreements for office facilities and equipment, the last of which expires in fiscal 2020. The office facility leases generally require us to pay a pro-rata share of the lessor’s operating expenses. Certain operating leases contain escalation clauses and are being amortized on a straight-line basis over the term of the lease.

The following schedule reflects future minimum rental commitments under noncancelable operating leases (in thousands):



Fiscal year	Amount
2017	$	1,706
2018	958
2019	800
2020	388
2021	70
Thereafter	—
Total minimum payments required	$	3,922

The following schedule shows the composition of total rental expense for all operating leases for the years ended September 30 (in thousands):



	Fiscal years ended September 30,
	2016			2015			2014
Rentals	$	1,613		$	2,076		$	2,606
Less: sublease rentals	(46		)	(56		)	(24		)
Total rental expense	$	1,567		$	2,020		$	2,582

Contingencies	12 Months Ended
Contingencies	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES	CONTINGENCIES Patent Infringement Lawsuits In the normal course of business we are subject to various claims and litigation, which may include, but are not limited to, patent infringement and intellectual property claims. While we are unable to predict the outcome of any potential claims or litigation due to the inherent unpredictability of these matters, we believe that it is possible that we could, in the future, incur judgments or enter into settlements of claims that could have a material adverse effect on our operations in any particular period.

Quarterly Financial Data

12 Months Ended

Sep. 30, 2016

Quarterly Financial Data

QUARTERLY FINANCIAL DATA (UNAUDITED)

(in thousands, except per common share data)



	Quarter ended
	Dec. 31			March 31			June 30			Sept. 30
Fiscal 2016
Revenue	$	50,259		$	50,162		$	52,130		$	50,454
Gross profit	24,357			24,742			25,977			24,604
Income from continuing operations (1)(2)	3,131			2,226			4,277			3,844
Income (loss) from discontinued operations, after income taxes	3,319			(89		)	—			—
Net income (1)(2)	6,450			2,137			4,277			3,844
Basic net income per common share:
Continuing operations	0.12			0.09			0.17			0.15
Discontinued operations	0.13			—			—			—
Net income (4)	0.25			0.08			0.17			0.15
Diluted net income per common share:
Continuing operations	0.12			0.09			0.16			0.14
Discontinued operations	0.13			—			—			—
Net income (4)	0.25			0.08			0.16			0.14

Fiscal 2015
Revenue	$	47,218		$	50,401		$	52,055		$	54,173
Gross profit	22,557			23,235			25,024			26,305
Income from continuing operations (1)(2)(3)	1,018			1,662			3,085			3,668
Loss from discontinued operations, after income taxes	(1,357		)	(216		)	(589		)	(683		)
Net (loss) income (1)(2)(3)	(339		)	1,446			2,496			2,985
Basic net income (loss) per common share:
Continuing operations	0.04			0.07			0.12			0.15
Discontinued operations	(0.06		)	(0.01		)	(0.02		)	(0.03		)
Net (loss) income (4)	(0.01		)	0.06			0.10			0.12
Diluted net income (loss) per common share:
Continuing operations	0.04			0.07			0.12			0.14
Discontinued operations	(0.06		)	(0.01		)	(0.02		)	(0.03		)
Net (loss) income (4)	(0.01		)	0.06			0.10			0.12

(1)

18. QUARTERLY FINANCIAL DATA (UNAUDITED)(CONTINUED)


(2)	For continuing operations, we recorded business restructuring charges of $0.7 million ($0.4 million after tax) in the first quarter of fiscal 2016, $0.1 million ($0.1 million after tax) in the second quarter of fiscal 2016 and $0.4 million ($0.3 million after tax) in the second quarter of fiscal 2015.

(3)

During fiscal 2015, we recorded a gain of $1.4 million from the settlement of a property and casualty insurance claim related to the replacement of our capital equipment destroyed in the fire at our subcontract manufacturer's location. We recorded $1.0 million ($0.6 million after tax) during the second quarter of fiscal 2015 and $0.4 million ($0.3 million after tax) during the third quarter of fiscal 2015.


(4)	Earnings per share are calculated by line item and may not add due to the use of rounded amounts.

Subsequent Event	12 Months Ended
Subsequent Event	Sep. 30, 2016
Subsequent Events [Abstract]
SUBSEQUENT EVENT	SUBSEQUENT EVENT Acquisition of FreshTemp, LLC On November 1, 2016, we purchased all of the outstanding stock of FreshTemp, LLC, a Pittsburgh-based provider of temperature monitoring and task management solutions for the food industry. We believe this is a complementary acquisition for us as the acquired technology will continue to be supported to create an advanced portfolio of products for the Digi Cold Chain Solution's market. The terms of the acquisition included an upfront cash payment together with future earn-out payments and a holdback amount. Cash of $1.7 million was paid at time of closing. The earn-out payments are scheduled to be paid after June 30, 2017 which is the end of the earn-out period. The cumulative amount of these earn-out payments will not exceed $2.3 million. A preliminary purchase price allocation, estimated acquisition costs and proforma financial information are not available due to the timing of the acquisition.

Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Sep. 30, 2016

Valuation and Qualifying Accounts [Abstract]

Schedule II- Valuation and Qualifying Accounts

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

DIGI INTERNATIONAL INC.

(in thousands)



Description	Balance at beginning of period		Increase to costs and expenses		Deductions			Balance at end of period
Valuation allowance - deferred tax assets
September 30, 2016	$	862	$	5,260	$	208		$	5,914
September 30, 2015	$	572	$	316	$	26		$	862
September 30, 2014	$	807	$	174	$	409		$	572

Valuation account - doubtful accounts
September 30, 2016	$	285	$	10	$	86	(1)	$	209
September 30, 2015	$	367	$	4	$	86	(1)	$	285
September 30, 2014	$	313	$	209	$	155	(1)	$	367

Reserve for future returns and pricing adjustments
September 30, 2016	$	1,817	$	9,946	$	9,772		$	1,991
September 30, 2015	$	1,662	$	7,002	$	6,847		$	1,817
September 30, 2014	$	1,770	$	6,526	$	6,634		$	1,662


(1)	Uncollectible accounts charged against allowance, net of recoveries

Summary of Significant Accounting Policies (Policies)	12 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2016
Accounting Policies [Abstract]
Discontinued Operations	Discontinued Operations On October 23, 2015, we sold all of the outstanding stock of our wholly owned subsidiary, Etherios Inc. (“Etherios”) to West Monroe Partners, LLC. Because the sale of Etherios represented a strategic shift that will have a major effect on our operations and financial results, we have classified our Etherios business as discontinued operations, which requires retrospective application to financial information for all periods presented. Since the cost of segregating the consolidated statement of cash flows outweighed the benefits, we elected not to segregate our consolidated statement of cash flows as the material items in the operating and investing sections are disclosed in Note 3 to our Consolidated Financial Statements.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Cash Equivalents	Cash Equivalents Cash equivalents consist of money market accounts and other highly liquid investments purchased with an original maturity of three months or less. The carrying amounts approximate fair value due to the short maturities of these investments.
Marketable Securities	Marketable Securities Marketable securities consist of certificates of deposit, commercial paper, corporate bonds and government municipal bonds. All marketable securities are accounted for as available-for-sale and are carried at fair value on our consolidated balance sheets with unrealized gains and losses recorded in accumulated other comprehensive loss within stockholders’ equity. In order to estimate the fair value for each security in our investment portfolio, we obtain quoted market prices and trading activity for each security where available. We obtain relevant information from our investment advisor and, if warranted, also may review the financial solvency of certain security issuers. We regularly monitor and evaluate the value of our marketable securities. When assessing marketable securities for other-than-temporary declines in value, we consider several factors. These factors include: how significant the decline in value is as a percentage of the original cost, how long the market value of the investment has been less than its original cost, the underlying factors contributing to a decline in the prices of securities in a single asset class, the performance of the issuer’s stock price in relation to the stock price of its competitors within the industry, expected market volatility, analyst recommendations, the views of external investment managers, any news or financial information that has been released specific to the investee and the outlook for the overall industry in which the issuer operates. If events and circumstances indicate that a decline in the value of a security has occurred and is other-than-temporary, we would record a charge to other (expense) income.
Accounts Receivable	Accounts Receivable Accounts receivable are stated at the amount we expect to collect, which is net of an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The following factors are considered when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, and changes in customer payment terms or practices. In addition, overall historical collection experience, current economic industry trends, and a review of the current status of trade accounts receivable are considered when determining the required allowance for doubtful accounts. Based on our assessment, we provide for estimated uncollectible amounts through a charge to earnings and a credit to our allowance for doubtful accounts. Balances that remain outstanding after we have used 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to accounts receivable.
Inventories	Inventories Inventories are stated at the lower of cost or fair market value, with cost determined using the first-in, first-out method. Appropriate consideration is given to deterioration, obsolescence and other factors in evaluating fair market value.
Property, Equipment and Improvements, Net	Property, Equipment and Improvements, Net Property, equipment and improvements are carried at cost, net of accumulated depreciation. Depreciation is provided by charges to operations using the straight-line method over the estimated asset useful lives. Furniture and fixtures and other equipment are depreciated over a period of three to five years. Building improvements and buildings are depreciated over ten and thirty-nine years, respectively. Expenditures for maintenance and repairs are charged to operations as incurred, while major renewals and betterments are capitalized. The assets and related accumulated depreciation accounts are adjusted for asset retirements and disposals with the resulting gain or loss included in operations.
Identifiable Intangible Assets	Identifiable Intangible Assets Purchased proven technology, license agreements, covenants not to compete and other identifiable intangible assets are recorded at fair value when acquired in a business acquisition, or at cost when not purchased in a business acquisition. All other identifiable intangible assets are amortized on either a straight-line basis over their estimated useful lives of three to thirteen years or based on the pattern in which the asset is consumed. Useful lives for identifiable intangible assets are estimated at the time of acquisition based on the periods of time from which we expect to derive benefits from the identifiable intangible assets. Amortization of purchased and core technology is included in cost of sales in the Consolidated Statements of Operations. Amortization of all other acquired identifiable intangible assets is charged to operating expenses as a component of general and administrative expense. Identifiable intangible assets are reviewed for impairment annually or whenever events or circumstances indicate that undiscounted expected future cash flows are not sufficient to recover the carrying value amount. We measure impairment loss by utilizing an undiscounted cash flow valuation technique using fair values indicated by the income approach. Impairment losses, if any, would be recorded in the period the impairment is identified.
Goodwill	Goodwill Goodwill represents the excess of cost over the fair value of identifiable assets acquired. Goodwill is tested for impairment on an annual basis as of June 30, or more frequently if events or circumstances occur which could indicate impairment. The calculation of goodwill impairment requires us to make assumptions about the fair value of our one reporting unit, which historically has been approximated by using our market capitalization plus a control premium. Control premium assumptions require judgment and actual results may differ from assumed or estimated amounts.
Contingent Consideration	Contingent Consideration We measure our contingent consideration liabilities recognized in connection with business combinations at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy as defined in ASC 320 “Investments - Debt and Equity Securities”. We used a probability-weighted discounted cash flow approach as a valuation technique to determine the fair value of the contingent consideration on the acquisition date. At each subsequent reporting period, the fair value is remeasured with the change in fair value recognized in general and administrative expense and interest expense in our Condensed Consolidated Statements of Operations. Amounts, if any, paid to the seller in excess of the amount recorded on the acquisition date will be classified as cash flows used in operating activities. Payments to the seller not exceeding the acquisition-date fair value of the contingent consideration will be classified as cash flows used in financing activities.
Warranties	Warranties In general, we warrant our hardware products to be free from defects in material and workmanship under normal use and service. The warranty periods generally range from one to five years. We typically have the option to either repair or replace hardware products we deem defective with regard to material or workmanship. Estimated warranty costs are accrued in the period that the related revenue is recognized based upon an estimated average per unit repair or replacement cost applied to the estimated number of units under warranty. These estimates are based upon historical warranty incidents and are evaluated on an ongoing basis to ensure the adequacy of the warranty accrual.
Revenue Recognition	Revenue Recognition We recognize revenue in accordance with authoritative guidance issued by FASB related to revenue recognition. Hardware product revenue as a percentage of total revenue was 96.6%, 95.9% and 94.4% in fiscal 2016, 2015 and 2014, respectively. We recognize hardware product revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, collectability is reasonably assured and there are no post-delivery obligations, other than warranty. Under these criteria, product revenue generally is recognized upon shipment of product to customers. Sales to authorized domestic and foreign distributors and Direct / OEMs are made with certain rights of return and price adjustment provisions. Estimated reserves for future returns and pricing adjustments are established by us based on an analysis of historical patterns of returns and price adjustments as well as an analysis of authorized returns compared to received returns and distribution sales for the current period. Estimated reserves for future returns and price adjustments are charged against revenue in the same period as the corresponding revenue is recorded. Service revenue as a percentage of total revenue represented 3.4%, 4.1% and 5.6% in fiscal 2016, 2015 and 2014, respectively. Our service revenue is derived primarily from our wireless design services and our Digi Cold Chain Solutions. We also have some service revenue that is derived from our Digi Device Cloud™, which is a platform-as-a-service (PaaS) offering in which customers pay for services consumed in terms of devices being managed and monitored, or as a monthly service fee for access to information. In addition, we have small amounts of revenue from our support services. We recognize service revenue from our wireless design services, Digi Cold Chain Solutions and Device Cloud based upon performance, including final product delivery and customer acceptance. In addition, we recognize small amounts of revenue from our support services which is recognized over the life of the contract, and training as the services are performed.
Research and Development	Research and Development Research and development costs are expensed when incurred. Research and development costs include compensation, allocation of corporate costs, depreciation, utilities, professional services and prototypes. Software development costs are expensed as incurred until the point that technological feasibility and proven marketability of the product are established. To date, the time period between the establishment of technological feasibility and completion of software development has been short, and no significant development costs have been incurred during that period. Accordingly, we have not capitalized any software development costs to date.
Income Taxes	Income Taxes Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Income tax expense is equal to the tax payable for the period and the change during the period in deferred tax assets and liabilities and also changes in income tax reserves.
Stock-Based Compensation	Stock-Based Compensation Stock-based compensation expense represents the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. This cost must be recognized over the period during which an employee is required to provide the service (usually the vesting period).
Foreign Currency Translation	Foreign Currency Translation Financial position and results of operations of our international subsidiaries are measured using local currencies as the functional currency, except for our Singapore location which uses the U.S. Dollar as its functional currency. Assets and liabilities of these operations are translated at the exchange rates in effect at the end of each reporting period. For our larger international subsidiaries, statements of operations accounts are translated at the daily rate. For all other international subsidiaries, our statements of operations accounts are translated at the weighted average rates of exchange prevailing during each reporting period. Translation adjustments arising from the use of differing currency exchange rates from period to period are included in accumulated other comprehensive loss in stockholders’ equity. Gains and losses on foreign currency exchange transactions, as well as translation gains or losses on transactions denominated in currencies other than an entity’s functional currency, are reflected in the statement of operations. During fiscal 2016, 2015 and 2014, there were net transaction (losses) gains of $(0.7) million, $0.6 million and $0.5 million, respectively, that were recorded in other (expense) income, net. We manage our net asset or net liability position for U.S. dollar accounts in our foreign locations to reduce our foreign currency risk. We have not implemented a formal hedging strategy.
Net Income Per Common Share	Net Income Per Common Share Basic net income per common share is calculated based on the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares of our stock result from dilutive common stock options and restricted stock units. We use the treasury stock method to calculate the weighted-average shares used in the diluted earnings per share computation. Under the treasury stock method, the proceeds from exercise of an option, the amount of compensation cost, if any, for future service that we have not yet recognized, and the amount of estimated tax benefits that would be recorded in paid-in capital, if any, when the option is exercised are assumed to be used to repurchase shares in the current period.
Use of Estimates and Risks and Uncertainties	Use of Estimates and Risks and Uncertainties The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates that could significantly affect our results of operations or financial condition involve the assignment of fair values upon acquisition of goodwill and other intangible assets and testing for impairment; the determination of our allowance for doubtful accounts and reserve for future returns and pricing adjustments; the estimation of our inventory obsolescence, warranty reserve, income tax reserves and other contingencies.
Comprehensive Income (Loss)	Comprehensive Income (Loss) Our comprehensive income (loss) is comprised of net income, foreign currency translation adjustments and unrealized gains and losses on available-for-sale marketable securities, which are charged or credited to the accumulated other comprehensive loss account in stockholders’ equity.
Recent Accounting Developments	Recent Accounting Developments Adopted In November 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” ASU 2015-17 simplified the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be classified as non-current in the balance sheet. The amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods and may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. Early adoption is permitted. We elected to early adopt ASU 2015-17 beginning in the fiscal quarter ending December 31, 2015. Other than the revised balance sheet presentation of deferred tax assets and liabilities from current to non-current, the adoption of this standard did not have a material impact to our consolidated financial statements. In September 2015, FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments.” To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the amendments in this update eliminate the requirement to retrospectively account for those adjustments. The amendments in this update are effective for fiscal years beginning after December 15, 2015, including interim periods within those years, which for us will be the first fiscal quarter ending December 31, 2016. Earlier application is permitted for financial statements that have not been issued. We elected to early adopt ASU 2015-16 beginning the fiscal quarter ending December 31, 2015. The adoption of this standard did not have a material impact to our consolidated financial statements. Not Yet Adopted In August 2016, FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments.” The amendments in this update provided guidance on eight specific cash flow issues. This update is to provide specific guidance on each of the eight issues, thereby reducing the diversity in practice in how certain transaction are classified in the statement of cash flows. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2017, which for us is the first quarter ended December 31, 2018. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2016-15 on our consolidated financial statements. In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2019, which for us is 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) the first quarter ended December 31, 2020. Entities may early adopt beginning after December 15, 2018. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements. In March 2016, FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” This update includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016, which for us is the first fiscal quarter ending December 31, 2017. Early adoption is permitted. We will adopt ASU 2016-09 beginning October 1, 2017. We are currently evaluating the impact of the adoption of ASU 2016-09 on our consolidated financial statements. Prospectively, beginning October 1, 2017, excess tax benefits and tax deficiencies will be reflected as income tax benefit or expense in our Consolidated Statement of Operations and could result in a material impact. The extent of the excess tax benefits or tax deficiencies are subject to variation in our stock price and the timing of RSU vestings and employee stock option exercises. In February, 2016, FASB issued ASU 2016-02, “Leases (Topic 842)”, which amends the existing guidance to require lessees to recognize lease assets and lease liabilities from operating leases on the balance sheet. This ASU is effective using the modified retrospective approach for annual periods and interim periods within those annual periods beginning after December 15, 2018, which for us is the first fiscal quarter ending December 31, 2019. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements. In January 2016, FASB issued ASU 2016-01, “Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 will require equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income. The amendments in this update will also simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, eliminate the requirement for public business entities to disclose the method and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet and require these entities to use the exit price notion when measuring fair value of financial instruments for disclosure purposes. This ASU would also change the presentation and disclosure requirements for financial instruments. In addition, this ASU clarifies the guidance related to valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, which for us is the first fiscal quarter ending December 31, 2018. Early adoption is permitted for financial statements of fiscal years and interim periods that have not been issued. We are currently evaluating the impact of the adoption of ASU 2016-01. In July 2015, FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory.” This provision would require inventory that was previously recorded using first-in, first-out (“FIFO”) to be recorded at lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those years, which for us will be the first fiscal quarter ending December 31, 2017. The amendments in this guidance should be applied prospectively with earlier application permitted as of the beginning of an interim or annual period. We are currently evaluating the impact of the adoption of ASU 2015-11 and whether it would have a material impact on our consolidated financial statements. In April 2015, FASB issued ASU 2015-05, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” The new standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If the arrangement does include a software license, the software license element of the arrangement should be accounted for in the same manner as the acquisition of other software licenses. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. We expect to adopt this guidance beginning with our fiscal quarter ending December 31, 2016. We do not expect this guidance to have a material impact on our consolidated financial statements. In August 2014, FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern.” This guidance requires management to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. These amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter, which for us, will be our annual period ended September 30, 2017. Early adoption is permitted. While we are evaluating the impact of the adoption of ASU 2014-15, we do not expect it to have an impact on our consolidated financial statements. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In May 2014, FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This guidance provides a five-step analysis in determining when and how revenue is recognized so that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods and services. It also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” which approved a one-year deferral of the effective date of ASU 2014-09. As a result of this deferral, ASU 2014-09 is effective for our fiscal 2019, including interim periods within that reporting period. The FASB also agreed to allow us to choose to adopt the standard effective for our fiscal 2018. In addition, the FASB issued ASU 2016-08, ASU 2016-10 and ASU 2016-12 in March 2016, April 2016 and May 2016, respectively, to provide interpretive clarifications on the new guidance in ASC Topic 606. We are currently working through an adoption plan and have identified our revenue streams and completed a preliminary analysis of how we currently account for revenue transactions compared to the revenue accounting required under the new standard. We intend to complete our adoption plan in fiscal 2017. This plan includes a review of transactions supporting each revenue stream to determine the impact of accounting treatment under ASC 606, evaluation of the method of adoption, and completing a rollout plan for implementation of the new standard with affected functions in our organization. Because of the nature of the work that remains, at this time we are unable to reasonably estimate the impact of adoption on our consolidated financial statements. We plan to adopt the new guidance beginning October 1, 2018.

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Schedule of Calculation of Numerator and Denominator in Earnings Per Share

The following table is a reconciliation of the numerators and denominators in the net income per common share calculations (in thousands, except per common share data):



	Fiscal years ended September 30,
	2016		2015			2014
Numerator:
Income from continuing operations	$	13,478	$	9,433		$	4,493
Income (loss) from discontinued operations, after income taxes	$	3,230	$	(2,845	)	$	(2,742	)
Net income	$	16,708	$	6,588		$	1,751
Denominator:
Denominator for basic net income per common share — weighted average shares outstanding	25,760		24,645			25,345
Effect of dilutive securities:
Stock options and restricted stock units	551		582			385
Denominator for diluted net income per common share — adjusted weighted average shares	26,311		25,227			25,730

Basic net income (loss) per common share:
Continuing operations	$	0.52	$	0.38		$	0.18
Discontinued operations	$	0.13	$	(0.12	)	$	(0.11	)
Net income (1)	$	0.65	$	0.27		$	0.07
Diluted net income (loss) per common share:
Continuing operations	$	0.51	$	0.37		$	0.17
Discontinued operations	$	0.12	$	(0.11	)	$	(0.11	)
Net income (1)	$	0.64	$	0.26		$	0.07

(1) Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts.

Acquisition (Tables)

12 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The following table summarizes the values of Bluenica assets acquired and liabilities assumed as of the acquisition date (in thousands):



Cash	$	2,888
Purchase price payable upon completion of diligence matters	115
Fair value of contingent consideration on acquired business	10,400
Total purchase price consideration	$	13,403

Fair value of net tangible assets acquired	$	129
Fair value of identifiable intangible assets acquired:
Purchased and core technology	2,000
Customer relationships	900
Goodwill	10,985
Deferred tax liabilities, net	(611		)
Total	$	13,403

Business Acquisition, Pro Forma Information [Table Text Block]



	Year ended
(in thousands, except per share data)	September 30, 2015
Total revenues	$	203,972
Income from continuing operations	$	8,505
Loss from discontinued operations, after income taxes	$	(2,845	)
Net income	$	5,660
Basic net income (loss) per common share:
Continuing operations	$	0.35
Discontinued operations	$	(0.12	)
Net income	$	0.23
Diluted net income (loss) per common share:
Continuing operations	$	0.34
Discontinued operations	$	(0.11	)
Net income (1)	$	0.22

(1) Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts.

Discontinued Operations (Tables)

12 Months Ended

Sep. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations

Below is a summary of the gain on sale (in thousands):



Gross proceeds	$	4,096
Less:
Employee related liabilities	(1,134		)
Working capital adjustment	(113		)
Net cash proceeds	2,849
Present value of receivable due on October 23, 2016	2,941
Present value of receivable due on October 23, 2017	1,922
Total fair value of consideration received	7,712
Less:
Net assets of Etherios	(3,383		)
Facility abandonment costs	(725		)
Transaction costs, primarily professional fees	(734		)
Gain on sale of discontinued operations, before income taxes	$	2,870



	Twelve months ended September 30,
	2016			2015			2014
Service revenue	$	891		$	9,011		$	9,528
Cost of service	713			8,101			9,421
Gross profit	178			910			107
Operating expenses:
Sales and marketing	148			1,970			1,825
Research and development	103			2,098			877
General and administrative	43			1,208			1,669
Restructuring	—			106			—
Total operating expenses	294			5,382			4,371
Loss from discontinued operations, before income taxes	(116		)	(4,472		)	(4,264		)
Gain on sale of discontinued operations, before income taxes	2,870			—			—
Income (loss) from discontinued operations, before income taxes	2,754			(4,472		)	(4,264		)
Income tax benefit on discontinued operations	(476		)	(1,627		)	(1,522		)
Income (loss) from discontinued operations, after income taxes	$	3,230		$	(2,845	)	$	(2,742	)



	Twelve months ended September 30,
	2016		2015			2014
Amortization of identifiable intangible assets	$	30	$	483		$	513
Depreciation of property, equipment and improvements	$	—	$	29		$	21
Purchases of property, equipment, improvements and certain other intangible assets	$	—	$	(11	)	$	(144	)

At September 30, 2015, the carrying amounts of major classes of assets and liabilities of discontinued operations included in the Consolidated Balance Sheet was as follows (in thousands):



	September 30, 2015
Current assets:
Accounts receivable, net	$	1,417
Deferred tax assets	127
Other current assets	80
Total current assets	1,624
Property, equipment and improvements, net	18
Identifiable intangible assets, net	1,531
Goodwill	1,914
Deferred tax assets (1)	(589		)
Total assets of discontinued operations	$	4,498

Current liabilities:
Accounts payable	$	50
Accrued compensation	1,346
Other current liabilities	85
Total current liabilities	1,481
Other non-current liabilities	95
Total liabilities of discontinued operations	$	1,576

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=65878427&loc=SL51721533-107759

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721665-107760

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
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Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and other Identifiable Intangible Assets (Tables)

12 Months Ended

Sep. 30, 2016

Schedule of Amortizable Identifiable Intangible Assets

Amortizable identifiable intangible assets, net as of September 30, 2016 and 2015 were comprised of the following (in thousands):



	September 30, 2016							September 30, 2015
	Gross carrying amount		Accum. amort.			Net		Gross carrying amount		Accum. amort.			Net
Purchased and core technology	$	46,594	$	(44,999	)	$	1,595	$	45,449	$	(45,424	)	$	25
License agreements	18		(10		)	8		18		(4		)	14
Patents and trademarks	11,619		(10,871		)	748		11,377		(10,385		)	992
Customer relationships	17,463		(15,773		)	1,690		17,090		(15,473		)	1,617
Total	$	75,694	$	(71,653	)	$	4,041	$	73,934	$	(71,286	)	$	2,648

Schedule of Amortization Expense

Amortization expense for fiscal years 2016, 2015 and 2014 was as follows (in thousands):



Fiscal year	Total
2016	$	1,842
2015	$	2,427
2014	$	3,076

Schedule of Estimated Future Amortization Expense Related to Identifiable Intangible Assets

Estimated amortization expense for the next five years is as follows (in thousands):



Fiscal year	Total
2017	$	1,350
2018	$	950
2019	$	723
2020	$	665
2021	$	129

Schedule of Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill were (in thousands):



	Fiscal years ended September 30,
	2016			2015
Beginning balance, October 1	$	100,183		$	101,484
Acquisition of Bluenica Corporation	10,985			—
Foreign currency translation adjustment	(1,720		)	(1,301		)
Ending balance, September 30	$	109,448		$	100,183

Segment Information and Major Customers (Tables)

12 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Schedule of Revenue by Product Categories

The following table presents our revenue for each product category (in thousands):



	Fiscal years ended September 30,
	2016		2015		2014
Cellular routers and gateways	$	48,373	$	58,666	$	39,215
RF	33,924		34,373		29,094
Embedded	56,489		51,063		49,681
Network	57,315		51,395		54,856
Total product revenue	196,101		195,497		172,846
Service	6,904		8,350		10,327
Total revenue	$	203,005	$	203,847	$	183,173

Schedule of Revenue by Geographic Location

The information in the following table provides revenue by the geographic location of the customer (in thousands):



	Fiscal years ended September 30,
	2016		2015		2014
North America, primarily United States	$	131,457	$	127,592	$	106,893
Europe, Middle East & Africa	44,932		47,523		47,729
Asia	20,390		22,907		22,762
Latin America	6,226		5,825		5,789
Total revenue	$	203,005	$	203,847	$	183,173

Schedule of Net Property, Equipment and Improvements by Geographical Location

Net property, equipment and improvements by geographic location were as follows (in thousands):



	Fiscal years ended September 30,
	2016		2015		2014
United States	$	13,861	$	14,085	$	12,691
International, primarily Europe	180		254		418
Total net property, equipment and improvements	$	14,041	$	14,339	$	13,109

Marketable Securities (Tables)

12 Months Ended

Sep. 30, 2016

Marketable Securities [Abstract]

Schedule of Marketable Securities

At September 30, 2016 our marketable securities consisted of (in thousands):



	Amortized Cost (1)		Unrealized Gains		Unrealized Losses			Fair Value (1)
Current marketable securities:
Corporate bonds	$	28,801	$	—	$	(34	)	$	28,767
Commercial paper	23,963		—		(20		)	23,943
Certificates of deposit	3,755		13		—			3,768
Government municipal bonds	1,904		—		—			1,904
Current marketable securities	58,423		13		(54		)	58,382
Non-current marketable securities:
Certificates of deposit	3,505		36		—			3,541
Total marketable securities	$	61,928	$	49	$	(54	)	$	61,923


(1)	Included in amortized cost and fair value is purchased and accrued interest of $271.

At September 30, 2015 our marketable securities consisted of (in thousands):



	Amortized Cost (1)		Unrealized Gains		Unrealized Losses			Fair Value (1)
Current marketable securities:
Corporate bonds	$	31,753	$	—	$	(39	)	$	31,714
Commercial paper	7,986		—		(1		)	7,985
Certificates of deposit	6,253		8		—			6,261
Government municipal bonds	1,232		—		(1		)	1,231
Current marketable securities	47,224		8		(41		)	47,191
Non-current marketable securities:
Corporate bonds	4,138		—		(12		)	4,126
Certificates of deposit	7,511		2		(6		)	7,507
Government municipal bonds	1,996		—		(3		)	1,993
Non-current marketable securities	13,645		2		(21		)	13,626
Total marketable securities	$	60,869	$	10	$	(62	)	$	60,817


(1)	Included in amortized cost and fair value is purchased and accrued interest of $252.

Schedule of Unrealized Losses on Available-for-Sale Securities



	September 30, 2016
	Less than 12 Months					More than 12 Months
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate bonds	$	24,454	$	(33	)	$	4,102	$	(1	)
Commercial paper	23,943		(20		)	—		—
Total	$	48,397	$	(53	)	$	4,102	$	(1	)

7. MARKETABLE SECURITIES (CONTINUED)



	September 30, 2015
	Less than 12 Months					More than 12 Months
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate bonds	$	33,664	$	(52	)	$	—	$	—
Commercial paper	5,987		(1		)	—		—
Certificates of deposit	4,244		(6		)	499		(1		)
Government municipal bonds	3,159		(3		)	—		—
Total	$	47,054	$	(62	)	$	499	$	(1	)

Fair Value Measurements (Tables)

12 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value of Assets Measured on Recurring Basis

The following tables provide information by level for financial assets and liabilities that are measured at fair value on a recurring basis (in thousands):



			Fair Value Measurements at September 30, 2016 using:
	Total carrying value at September 30, 2016		Quoted price in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Money market	$	44,319	$	44,319	$	—	$	—
Corporate bonds	28,767		—		28,767		—
Commercial paper	23,943		—		23,943		—
Certificates of deposit	7,309		—		7,309		—
Government municipal bonds	1,904		—		1,904		—
Total assets measured at fair value	$	106,242	$	44,319	$	61,923	$	—
Liabilities:
Contingent consideration on acquired business	9,960		—		—		9,960
Total liabilities measured at fair value	$	9,960	$	—	$	—	$	9,960

8. FAIR VALUE MEASUREMENTS (CONTINUED)



			Fair Value Measurements at September 30, 2015 using:
	Total carrying value at September 30, 2015		Quoted price in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Money market	$	14,436	$	14,436	$	—	$	—
Corporate bonds	35,840		—		35,840		—
Commercial paper	7,985		—		7,985		—
Certificates of deposit	13,768		—		13,768		—
Government municipal bonds	3,224		—		3,224		—
Total assets measured at fair value	$	75,253	$	14,436	$	60,817	$	—

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation



	Twelve months ended September 30, 2016
Fair value at beginning of period	$	—
Purchase price contingent consideration	10,400
Change in fair value of contingent consideration	(440		)
Fair value at end of period	$	9,960

Product Warranty Obligation (Tables)

12 Months Ended

Sep. 30, 2016

Product Warranties Disclosures [Abstract]

Schedule of Product Warranty Accrual

The following table summarizes the activity associated with the product warranty accrual (in thousands) and is listed on our Consolidated Balance Sheets under Current Liabilities:



	Balance at		Warranties		Settlements			Balance at
Fiscal year	October 1		issued		made			September 30
2016	$	1,014	$	771	$	(752	)	$	1,033
2015	$	862	$	967	$	(815	)	$	1,014
2014	$	1,063	$	627	$	(828	)	$	862

Restructuring (Tables)

12 Months Ended

Sep. 30, 2016

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve

Below is a summary of the restructuring charges and other activity within the restructuring accrual (in thousands):



	2016 Restructuring						2015 Restructuring			2014 Restructuring			2013 Restructuring
	Employee Termination Costs			Other			Employee Termination Costs			Employee Termination Costs			Employee Termination Costs			Total
Balance at September 30, 2013	$	—		$	—		$	—		$	—		$	350		$	350
Restructuring charge	—			—			—			152			—			152
Payments	—			—			—			(152		)	(279		)	(431		)
Reversals	—			—			—			—			(71		)	(71		)
Balance at September 30, 2014	—			—			—			—			—			—
Restructuring charge	—			—			412			—			—			412
Payments	—			—			(403		)	—			—			(403		)
Reversals	—			—			(9		)	—			—			(9		)
Balance at September 30, 2015	—			—			—			—			—			—
Restructuring charge	558			195			—			—			—			753
Payments	(559		)	(195		)	—			—			—			(754		)
Reversals	(6		)	—			—			—			—			(6		)
Foreign currency fluctuation	7			—			—			—			—			7
Balance at September 30, 2016	$	—		$	—		$	—		$	—		$	—		$	—

Income Taxes (Tables)

12 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Schedule of Components of Income Taxes

The components of income from continuing operations, before income taxes are as follows (in thousands):



	Fiscal years ended September 30,
	2016		2015		2014
United States	$	9,841	$	6,934	$	(833	)
International	6,849		6,183		5,894
Income from continuing operations, before income taxes	$	16,690	$	13,117	$	5,061

Schedule of Components of Income Tax Provision

The components of the income tax provision are as follows (in thousands):



	Fiscal years ended September 30,
	2016			2015			2014
Current:
Federal	$	(141	)	$	1,452		$	1,007
State	139			453			(58		)
Foreign	2,099			2,279			2,196
Deferred:
U.S.	1,260			(297		)	(2,417		)
Foreign	(145		)	(203		)	(160		)
Income tax provision	$	3,212		$	3,684		$	568

Schedule of Net Deferred Tax Asset

The net deferred tax asset consists of the following (in thousands):



	As of September 30,
	2016			2015
Current deferred tax asset	$	—		$	3,252
Non-current deferred tax asset	7,295			6,255
Current deferred tax liability	—			(36		)
Non-current deferred tax liability	(616		)	(135		)
Net deferred tax asset	$	6,679		$	9,336

Uncollectible accounts and other reserves	$	915		$	966
Depreciation and amortization	421			206
Inventories	683			999
Compensation costs	4,925			7,130
Tax carryforwards	6,263			1,185
Valuation allowance	(5,970		)	(862		)
Identifiable intangible assets	(558		)	(288		)
Net deferred tax asset	$	6,679		$	9,336

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of the statutory federal income tax amount to our income tax provision is as follows (in thousands):



	Fiscal years ended September 30,
	2016			2015			2014
Statutory income tax amount	$	5,548		$	4,491		$	1,721
Increase (decrease) resulting from:
State taxes, net of federal benefits	204			(190		)	(251		)
Utilization of tax credits	(1,116		)	(250		)	(76		)
Manufacturing deduction	(450		)	(285		)	(92		)
Discrete tax benefits	(1,461		)	(818		)	(1,475		)
Foreign operations	276			181			316
Valuation reserve	(43		)	297			11
Adjustment of tax contingency reserves	202			71			168
Meals and entertainment	55			64			93
Employee stock purchase plan	83			76			85
Contingent consideration	(154		)	—			—
Other, net	68			47			68
Income tax provision	$	3,212		$	3,684		$	568

Schedule of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is (in thousands):



	Fiscal years ended September 30,
	2016			2015			2014
Unrecognized tax benefits at beginning of fiscal year	$	1,618		$	2,301		$	3,332
Increases related to:
Prior year income tax positions	107			110			181
Current year income tax positions	240			144			148
Decreases related to:
Prior year income tax positions	(71		)	(255		)	(1,105		)
Settlements	(30		)	(74		)	(95		)
Expiration of statute of limitations	(156		)	(608		)	(160		)
Unrecognized tax benefits at end of fiscal year	$	1,708		$	1,618		$	2,301

Stock-Based Compensation (Tables)

12 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Stock-Based Compensation Expense

Stock-based compensation expense is included in the consolidated results of operations as follows (in thousands):



	Fiscal years ended September 30,
	2016			2015			2014
Cost of sales	$	215		$	221		$	207
Sales and marketing	921			1,158			1,171
Research and development	590			561			636
General and administrative	1,923			1,941			1,933
Stock-based compensation before income taxes	3,649			3,881			3,947
Income tax benefit	(1,185		)	(1,343		)	(1,361		)
Stock-based compensation after income taxes	$	2,464		$	2,538		$	2,586

Schedule of Stock Option Activity

The following table summarizes our stock option activity (in thousands, except per common share amounts):



	Options Outstanding		Weighted Average Exercised Price	Weighted Average Contractual Term (in years)	Aggregate Intrinsic Value (1)
Balance at September 30, 2015	4,800		$10.21
Granted	553		11.46
Exercised	(772	)	9.65
Forfeited / Canceled	(618	)	11.06
Balance at September 30, 2016	3,963		$10.36	4.5	$	6,078

Exercisable at September 30, 2016	2,857		$10.49	3.7	$	4,158

Schedule of Valuation Assumptions



	Fiscal years ended September 30,
	2016		2015		2014
Weighted average per option grant date fair value	$	3.90	$	2.98	$	4.35
Assumptions used for option grants:
Risk free interest rate	1.22% - 1.85%		1.57% - 1.85%		1.76% - 2.02%
Expected term	6.00 years		6.00 years		6.00 years
Expected volatility	32% - 33%		32% - 36%		38% - 40%
Weighted average volatility	32%		35%		40%
Expected dividend yield	0		0		0

Schedule of Weighted Average Exercise Price Range and Remaining Contractual Life

At September 30, 2016, the weighted average exercise price and remaining life of the stock options are as follows (in thousands, except remaining life and exercise price):



Options Outstanding					Options Exercisable
Range of Exercise Prices	Options Outstanding	Weighted Average Remaining Contractual Life (In Years)	Weighted Average Exercise Price		Number of Shares Vested	Weighted Average Exercise Price
$7.40 - $8.03	611	4.35	$	7.74	460	$	7.85
$8.04 - $9.03	627	5.49	$	8.52	234	$	8.42
$9.04 - $9.68	685	5.00	$	9.53	662	$	9.53
$9.69 - $10.81	830	5.24	$	10.57	664	$	10.58
$10.82 - $12.63	724	5.13	$	12.10	351	$	11.73
$12.64 - $14.75	268	0.39	$	13.47	268	$	13.47
$14.76 - $15.23	218	1.16	$	15.23	218	$	15.23
$7.40 - $15.23	3,963	4.53	$	10.36	2,857	$	10.49

Schedule of Nonvested Restricted Stock Units

A summary of our non-vested restricted stock units as of September 30, 2016 and changes during the twelve months then ended is presented below (in thousands, except per common share amounts):



	Number of Awards		Weighted Average Grant Date Fair Value
Nonvested at September 30, 2015	543		$	8.41
Granted	251		$	10.92
Vested	(185	)	$	8.55
Canceled	(104	)	$	8.13
Nonvested at September 30, 2016	505		$	9.67

Commitments (Tables)

12 Months Ended

Sep. 30, 2016

Leases, Operating [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

The following schedule reflects future minimum rental commitments under noncancelable operating leases (in thousands):



Fiscal year	Amount
2017	$	1,706
2018	958
2019	800
2020	388
2021	70
Thereafter	—
Total minimum payments required	$	3,922

Schedule of Rent Expense

The following schedule shows the composition of total rental expense for all operating leases for the years ended September 30 (in thousands):



	Fiscal years ended September 30,
	2016			2015			2014
Rentals	$	1,613		$	2,076		$	2,606
Less: sublease rentals	(46		)	(56		)	(24		)
Total rental expense	$	1,567		$	2,020		$	2,582

Quarterly Financial Data (Tables)

12 Months Ended

Sep. 30, 2016

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Data (Unaudited)

(in thousands, except per common share data)



	Quarter ended
	Dec. 31			March 31			June 30			Sept. 30
Fiscal 2016
Revenue	$	50,259		$	50,162		$	52,130		$	50,454
Gross profit	24,357			24,742			25,977			24,604
Income from continuing operations (1)(2)	3,131			2,226			4,277			3,844
Income (loss) from discontinued operations, after income taxes	3,319			(89		)	—			—
Net income (1)(2)	6,450			2,137			4,277			3,844
Basic net income per common share:
Continuing operations	0.12			0.09			0.17			0.15
Discontinued operations	0.13			—			—			—
Net income (4)	0.25			0.08			0.17			0.15
Diluted net income per common share:
Continuing operations	0.12			0.09			0.16			0.14
Discontinued operations	0.13			—			—			—
Net income (4)	0.25			0.08			0.16			0.14

Fiscal 2015
Revenue	$	47,218		$	50,401		$	52,055		$	54,173
Gross profit	22,557			23,235			25,024			26,305
Income from continuing operations (1)(2)(3)	1,018			1,662			3,085			3,668
Loss from discontinued operations, after income taxes	(1,357		)	(216		)	(589		)	(683		)
Net (loss) income (1)(2)(3)	(339		)	1,446			2,496			2,985
Basic net income (loss) per common share:
Continuing operations	0.04			0.07			0.12			0.15
Discontinued operations	(0.06		)	(0.01		)	(0.02		)	(0.03		)
Net (loss) income (4)	(0.01		)	0.06			0.10			0.12
Diluted net income (loss) per common share:
Continuing operations	0.04			0.07			0.12			0.14
Discontinued operations	(0.06		)	(0.01		)	(0.02		)	(0.03		)
Net (loss) income (4)	(0.01		)	0.06			0.10			0.12

(1)

18. QUARTERLY FINANCIAL DATA (UNAUDITED)(CONTINUED)


(2)	For continuing operations, we recorded business restructuring charges of $0.7 million ($0.4 million after tax) in the first quarter of fiscal 2016, $0.1 million ($0.1 million after tax) in the second quarter of fiscal 2016 and $0.4 million ($0.3 million after tax) in the second quarter of fiscal 2015.

(3)


(4)	Earnings per share are calculated by line item and may not add due to the use of rounded amounts.

Summary of Significant Accounting Policies (Property, Equipment and Improvements, Net) (Details)	12 Months Ended
	Sep. 30, 2016
Furniture and Fixtures \| Minimum
Property, Plant and Equipment [Line Items]
Property, equipment and improvements depreciation life	3 years
Furniture and Fixtures \| Maximum
Property, Plant and Equipment [Line Items]
Property, equipment and improvements depreciation life	5 years
Building Improvements
Property, Plant and Equipment [Line Items]
Property, equipment and improvements depreciation life	10 years
Buildings
Property, Plant and Equipment [Line Items]
Property, equipment and improvements depreciation life	39 years

Summary of Significant Accounting Policies (Goodwill) (Details) $ in Thousands	Jun. 30, 2014 industry	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2013 USD ($)
Goodwill [Line Items]
Target companies equity benchmark	50.00%
Number of industries encompasses similar products \| industry	3
Control premium percent	35.00%
Market Capitalization			$ 278,600
Carrying value		$ 300,029	$ 294,900	$ 274,938	$ 265,298	$ 274,243
Percent fair value in excess of carrying value of goodwill			27.00%
Minimum
Goodwill [Line Items]
Control premium percent	30.00%
Maximum
Goodwill [Line Items]
Control premium percent	40.00%

Summary of Significant Accounting Policies (Revenue Recognition) (Details)	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Hardware products
Concentration Risk [Line Items]
Percentage of revenue	96.60%	95.90%	94.40%
Service
Concentration Risk [Line Items]
Percentage of revenue	3.40%	4.10%	5.60%

Summary of Significant Accounting Policies (Net Income Per Common Share) (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

12 Months Ended

Sep. 30, 2016

Jun. 30, 2016

Mar. 31, 2016

Dec. 31, 2015

Sep. 30, 2015

Jun. 30, 2015

Mar. 31, 2015

Dec. 31, 2014

Sep. 30, 2016

Sep. 30, 2015

Sep. 30, 2014

Accounting Policies [Abstract]

Income (loss) from discontinued operations, after income taxes

$ 3,844

^[1],[2]

$ 4,277

^[1],[2]

$ 2,226

^[1],[2]

$ 3,131

^[1],[2]

$ 3,668

^[1],[2],[3]

$ 3,085

^[1],[2],[3]

$ 1,662

^[1],[2],[3]

$ 1,018

^[1],[2],[3]

$ 13,478

$ 9,433

$ 4,493

(89)

3,319

(683)

(589)

(216)

(1,357)

3,230

(2,845)

(2,742)

Denominator for basic net income per common share — weighted average shares outstanding

$ 3,844

^[1],[2]

$ 4,277

^[1],[2]

$ 2,137

^[1],[2]

$ 6,450

^[1],[2]

$ 2,985

^[1],[2],[3]

$ 2,496

^[1],[2],[3]

$ 1,446

^[1],[2],[3]

$ (339)

^[1],[2],[3]

$ 16,708

$ 6,588

$ 1,751

25,760,000

24,645,000

25,345,000

Effect of dilutive securities:

Stock options and restricted stock units

551,000

582,000

385,000

Denominator for diluted net income per common share — adjusted weighted average shares

26,311,000

25,227,000

25,730,000

$ 0.15

$ 0.17

$ 0.09

$ 0.12

$ 0.15

$ 0.12

$ 0.07

$ 0.04

$ 0.52

$ 0.38

$ 0.18

0.00

0.13

(0.03)

(0.02)

(0.01)

(0.06)

0.13

(0.12)

(0.11)

0.15

^[4]

0.17

^[4]

0.08

^[4]

0.25

^[4]

0.12

^[4]

0.10

^[4]

0.06

^[4]

(0.01)

^[4]

0.65

^[5]

0.27

^[5]

0.07

^[5]

0.14

0.16

0.09

0.12

0.14

0.12

0.07

0.04

0.51

0.37

0.17

0.00

0.13

(0.03)

(0.02)

(0.01)

(0.06)

0.12

(0.11)

Antidilutive securities excluded from computation of earnings per share

$ 0.14

^[4]

$ 0.16

^[4]

$ 0.08

^[4]

$ 0.25

^[4]

$ 0.12

^[4]

$ 0.10

^[4]

$ 0.06

^[4]

$ (0.01)

^[4]

$ 0.64

^[5]

$ 0.26

^[5]

$ 0.07

^[5]

1,519,691

3,016,911

3,284,993

[1]	During fiscal 2016 and 2015, we recorded net tax benefits of $1.5 million and $0.8 million, respectively. We recorded a benefit of $0.7 million in the first quarter of fiscal 2016 resulting from the reinstatement of the research and development tax credit for calendar year 2015, reversal of income tax reserves due to the expiration of the statute of limitations from various U.S. and foreign tax jurisdictions and reversal of tax reserves due to the resolution of tax audits. In the third quarter of fiscal 2016, we recorded a tax benefit of $0.5 million primarily due to the filing of an amended income tax return resulting in a domestic refund related to qualified manufacturing activities. In the fourth quarter of fiscal 2016, we recorded a net tax benefit of $0.2 million, primarily due to the filing of an additional amended income tax return resulting in an additional domestic refund related to qualified manufacturing activities, partially offset by an adjustment of the state rate on net deferred tax assets. We recorded net tax benefits of $0.5 million in the first quarter of fiscal 2015 resulting from the reinstatement of the research and development tax credit for calendar year 2014, reversal of income tax reserves due to the expiration of the statute of limitations from various U.S. and foreign tax jurisdictions and reversal of tax reserves due to the resolution of tax audits. In the third quarter of fiscal 2015, we recorded a tax benefit of $0.4 million primarily due to the reversal of reserves for state research and development tax credits and transfer pricing, partially offset by an adjustment of the state rate on net deferred tax assets.
[2]	For continuing operations, we recorded business restructuring charges of $0.7 million ($0.4 million after tax) in the first quarter of fiscal 2016, $0.1 million ($0.1 million after tax) in the second quarter of fiscal 2016 and $0.4 million ($0.3 million after tax) in the second quarter of fiscal 2015.
[3]	During fiscal 2015, we recorded a gain of $1.4 million from the settlement of a property and casualty insurance claim related to the replacement of our capital equipment destroyed in the fire at our subcontract manufacturer's location. We recorded $1.0 million ($0.6 million after tax) during the second quarter of fiscal 2015 and $0.4 million ($0.3 million after tax) during the third quarter of fiscal 2015.
[4]	Earnings per share are calculated by line item and may not add due to the use of rounded amounts.
[5]	Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts.

Acquisition (Details) - USD ($) $ in Thousands		12 Months Ended
Acquisition (Details) - USD ($) $ in Thousands	Oct. 05, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Business Acquisition [Line Items]
Goodwill		$ 109,448	$ 100,183	$ 101,484
Bluenica Corporation
Business Acquisition [Line Items]
Cash, including cash in escrow	$ 2,888
Business combination contingent liability payout period	4 years
Business Combination, Consideration Transferred, Liabilities Incurred	$ 10,400
Acquisition related costs		100
Goodwill	$ 10,985
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years 7 months 13 days
Total revenue		$ 700
Purchased and Core Technology \| Bluenica Corporation
Business Acquisition [Line Items]
Estimated useful life	5 years
Customer Relationships \| Bluenica Corporation
Business Acquisition [Line Items]
Estimated useful life	7 years
Performance 1 [Member] \| Bluenica Corporation
Business Acquisition [Line Items]
Business Combination, Contingent Consideration, Liability	$ 11,600
Performance 2 [Member] \| Bluenica Corporation
Business Acquisition [Line Items]
Business Combination, Contingent Consideration, Liability	$ 3,500

Acquisition (Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands	Oct. 05, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Business Acquisition [Line Items]
Goodwill		$ 109,448	$ 100,183	$ 101,484
Bluenica Corporation
Business Acquisition [Line Items]
Cash	$ 2,888
Purchase price payable upon completion of diligence matters	115
Fair value of contingent consideration on acquired business	10,400
Total purchase price consideration	13,403
Fair value of net tangible assets acquired	129
Goodwill	10,985
Deferred tax liabilities, net	(611)
Total assets acquired and liabilities assumed	13,403
Purchased and Core Technology \| Bluenica Corporation
Business Acquisition [Line Items]
Fair value of identifiable intangible assets acquired	2,000
Customer Relationships \| Bluenica Corporation
Business Acquisition [Line Items]
Fair value of identifiable intangible assets acquired	$ 900

Acquisition Pro Forma (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

12 Months Ended

Sep. 30, 2016

Jun. 30, 2016

Mar. 31, 2016

Dec. 31, 2015

Sep. 30, 2015

Jun. 30, 2015

Mar. 31, 2015

Dec. 31, 2014

Sep. 30, 2016

Sep. 30, 2015

Sep. 30, 2014

Loss from discontinued operations, after income taxes

$ 0

$ (89)

$ 3,319

$ (683)

$ (589)

$ (216)

$ (1,357)

$ 3,230

$ (2,845)

$ (2,742)

$ 0.00

$ 0.13

$ (0.03)

$ (0.02)

$ (0.01)

$ (0.06)

$ 0.13

$ (0.12)

$ (0.11)

$ 0.00

$ 0.13

$ (0.03)

$ (0.02)

$ (0.01)

$ (0.06)

$ 0.12

$ (0.11)

Bluenica Corporation

Total revenues

$ 203,972

Loss from discontinued operations, after income taxes

8,505

(2,845)

$ 5,660

$ 0.35

(0.12)

0.23

0.34

(0.11)

^[1]

$ 0.22

[1]	Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts.

Discontinued Operations (Details) - USD ($) $ in Thousands			12 Months Ended
Discontinued Operations (Details) - USD ($) $ in Thousands	Oct. 21, 2016	Oct. 23, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014	Oct. 23, 2017	Oct. 23, 2016
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Future minimum lease payments			$ 3,922
San Francisco
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Future minimum lease payments			100
Etherios, Inc. \| Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Payment received from sale agreement		$ 4,096
Facility abandonment costs		$ 725
Income tax benefit on discontinued operations			$ (476)	$ (1,627)	$ (1,522)
Etherios, Inc. \| Discontinued Operations, Disposed of by Sale \| United States Federal Tax Jurisdiction
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Deferred income tax liability				$ 589
Etherios, Inc. \| Discontinued Operations, Disposed of by Sale \| Forecast
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration receivable						$ 2,000	$ 3,000
Subsequent Event \| Etherios, Inc. \| Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Payment received from sale agreement	$ 3,000

Discontinued Operations (Capital Loss Carryforward) (Details) - Etherios, Inc. - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014	Oct. 23, 2015
Tax Credit Carryforward [Line Items]
Income tax benefit on discontinued operations	$ (476)	$ (1,627)	$ (1,522)
Capital Loss on Sale
Tax Credit Carryforward [Line Items]
Deferred Tax Assets, Capital Loss on Sale				$ 13,700
Tax Credit Carryforward, Valuation Allowance				$ 5,100

Amount of tax expense (benefit) related to a discontinued operation. Includes, but is not limited to, tax expense (benefit) related to income (loss) from operations during the phase-out period, tax expense (benefit) related to gain (loss) on disposal, tax expense (benefit) related to gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and tax expense (benefit) related to adjustments of a prior period gain (loss) on disposal.

Total current liabilities

Discontinued Operations (Gain on Sale Subject to Working Capital Adjustments) (Details) - USD ($) $ in Thousands		12 Months Ended
	Oct. 23, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net cash proceeds		$ 2,849	$ 0	$ 0
Etherios, Inc. \| Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gross proceeds	$ 4,096
Employee related liabilities	(1,134)
Working capital adjustment	(113)
Net cash proceeds	2,849
Present value of receivable due on October 23, 2016	2,941
Present value of receivable due on October 23, 2017	1,922
Total fair value of consideration received	7,712
Less:
Net assets of Etherios	(3,383)
Facility abandonment costs	(725)
Transaction costs, primarily professional fees	(734)
Gain on sale of discontinued operations, before income taxes	$ 2,870	$ 2,870	$ 0	$ 0

Discontinued Operations (Income (loss) from Discontinued Operations, Net of Tax) (Details) - Etherios, Inc. - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands		12 Months Ended
	Oct. 23, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Service revenue		$ 891	$ 9,011	$ 9,528
Cost of service		713	8,101	9,421
Gross profit		178	910	107
Operating expenses:
Sales and marketing		148	1,970	1,825
Research and development		103	2,098	877
General and administrative		43	1,208	1,669
Restructuring		0	106	0
Total operating expenses		294	5,382	4,371
Loss from discontinued operations, before income taxes		(116)	(4,472)	(4,264)
Gain on sale of discontinued operations, before income taxes	$ 2,870	2,870	0	0
Income (loss) from discontinued operations, before income taxes		2,754	(4,472)	(4,264)
Income tax benefit on discontinued operations		(476)	(1,627)	(1,522)
Income (loss) from discontinued operations, after income taxes		$ 3,230	$ (2,845)	$ (2,742)

Discontinued Operations (Assets and Liabilities of Discontinued Ops) (Details) - USD ($)
$ in Thousands

Sep. 30, 2016

Sep. 30, 2015

Current assets:

Total current assets

$ 0

$ 1,624

Current liabilities:

$ 0

1,481

Etherios, Inc. | Discontinued Operations, Disposed of by Sale

Current assets:

Accounts receivable, net

1,417

Deferred tax assets

127

Other current assets

Total current assets

1,624

Property, equipment and improvements, net

Identifiable intangible assets, net

1,531

Goodwill

1,914

Deferred tax assets

^[1]

(589)

Total assets of discontinued operations

4,498

Current liabilities:

Accounts payable

Accrued compensation

1,346

Other current liabilities

Total current liabilities

1,481

Other non-current liabilities

Total liabilities of discontinued operations

1,576

United States Federal Tax Jurisdiction | Etherios, Inc. | Discontinued Operations, Disposed of by Sale

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Deferred income tax liability

$ 589

[1]

As of September 30, 2015, we had a consolidated net deferred income tax asset related to the United States federal jurisdiction. That net deferred income tax asset position included a deferred income tax liability of $589 thousand related to Etherios which was entirely in the United States federal tax jurisdiction.

Discontinued Operations (Amortization, Depreciation, and Purchase of PPE) (Details) - Etherios, Inc. - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Amortization of identifiable intangible assets	$ 30	$ 483	$ 513
Depreciation of property, equipment and improvements	0	29	21
Purchases of property, equipment, improvements and certain other intangible assets	$ 0	$ (11)	$ (144)

Goodwill and other Identifiable Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 75,694	$ 73,934
Accumulated amortization	(71,653)	(71,286)
Net	4,041	2,648
Purchased and Core Technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	46,594	45,449
Accumulated amortization	(44,999)	(45,424)
Net	1,595	25
License Agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	18	18
Accumulated amortization	(10)	(4)
Net	8	14
Patents and Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	11,619	11,377
Accumulated amortization	(10,871)	(10,385)
Net	748	992
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	17,463	17,090
Accumulated amortization	(15,773)	(15,473)
Net	$ 1,690	$ 1,617

Goodwill and other Identifiable Intangible Assets (Amortization Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Finite-Lived Intangible Assets [Line Items]
2017	$ 1,350
2018	950
2019	723
2020	665
2021	129
Cost of Sales and General and Administrative Expense [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 1,842	$ 2,427	$ 3,076

Goodwill and other Identifiable Intangible Assets (Goodwill) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Goodwill [Roll Forward]
Beginning balance	$ 100,183	$ 101,484
Goodwill, Acquired During Period	10,985	0
Foreign currency translation adjustment	(1,720)	(1,301)
Ending balance	$ 109,448	$ 100,183

Segment Information and Major Customers (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2016 USD ($) customer	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($) customer	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2016 USD ($) customer segment	Sep. 30, 2015 USD ($) customer	Sep. 30, 2014 USD ($) customer
Segment Reporting Information [Line Items]
Sales Revenue, Goods, Net									$ 196,101	$ 195,497	$ 172,846
Sales Revenue, Services, Net									$ 6,904	8,350	10,327
Number of operating segments \| segment									1
Number of reportable segments \| segment									1
Total revenue	$ 50,454	$ 52,130	$ 50,162	$ 50,259	$ 54,173	$ 52,055	$ 50,401	$ 47,218	$ 203,005	203,847	183,173
Total property, equipment and improvements	$ 14,041				$ 14,339				$ 14,041	$ 14,339	$ 13,109
Number of customer representing over ten percent of revenue \| customer									0	0	0
Number of customer representing over ten percent of consolidated accounts receivable \| customer	0				2				0	2	0
North America, primarily United States
Segment Reporting Information [Line Items]
Total revenue									$ 131,457	$ 127,592	$ 106,893
United States
Segment Reporting Information [Line Items]
Total property, equipment and improvements	$ 13,861				$ 14,085				$ 13,861	$ 14,085	$ 12,691
United States \| U.S. Export Net Sales
Segment Reporting Information [Line Items]
Percentage of concentration									38.70%	39.40%	40.60%
United States \| Accounts Receivable \| Customer 1
Segment Reporting Information [Line Items]
Percentage of concentration										10.70%
United States \| Accounts Receivable \| Customer 2
Segment Reporting Information [Line Items]
Percentage of concentration										11.60%
Europe, Middle East and Africa
Segment Reporting Information [Line Items]
Total revenue									$ 44,932	$ 47,523	$ 47,729
Asia
Segment Reporting Information [Line Items]
Total revenue									20,390	22,907	22,762
Latin America
Segment Reporting Information [Line Items]
Total revenue									6,226	5,825	5,789
International, primarily Europe
Segment Reporting Information [Line Items]
Total property, equipment and improvements	$ 180				$ 254				180	254	418
Cellular routers and gateways
Segment Reporting Information [Line Items]
Sales Revenue, Goods, Net									48,373	58,666	39,215
RF
Segment Reporting Information [Line Items]
Sales Revenue, Goods, Net									33,924	34,373	29,094
Embedded
Segment Reporting Information [Line Items]
Sales Revenue, Goods, Net									56,489	51,063	49,681
Network
Segment Reporting Information [Line Items]
Sales Revenue, Goods, Net									$ 57,315	$ 51,395	$ 54,856

Selected Balance Sheet Data (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Accounts receivable, net:
Accounts receivable	$ 30,885	$ 29,890
Less allowance for doubtful accounts	209	285
Less reserve for future returns and pricing adjustments	1,991	1,817
Total accounts receivable, net	28,685	27,788
Inventories:
Raw materials	21,116	26,037
Work in process	802	598
Finished goods	4,358	5,242
Total Inventories	26,276	31,877
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	37,519	37,519
Less accumulated depreciation and amortization	23,478	23,180
Total property, equipment and improvements, net	14,041	14,339	$ 13,109
Land
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	1,800	1,800
Buildings
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	10,522	10,522
Improvements
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	3,239	3,328
Equipment
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	15,778	15,691
Purchased Software
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	3,377	3,458
Furniture and Fixtures
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	$ 2,803	$ 2,720

Marketable Securities (Details) $ in Thousands	12 Months Ended
Marketable Securities (Details) $ in Thousands	Sep. 30, 2016 USD ($) Security	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)
Schedule of Available-for-sale Securities [Line Items]
Number of securities below amortized cost basis	18
Number of securities	48
Proceeds from maturities of marketable securities \| $	$ 73,706	$ 38,028	$ 47,420
Current Assets
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, next twelve months, maximum year mature	1 year
Non-current Assets
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, year two through five, maximum year mature	2 years

Marketable Securities (Fair Value to Amortized Cost) (Details) - USD ($)
$ in Thousands

Sep. 30, 2016

Sep. 30, 2015

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale securities, amortized cost basis

$ 61,928

^[1]

$ 60,869

^[2]

Available-for-sale marketable securities, fair value

(54)

(62)

61,923

^[1]

60,817

^[2]

Purchased and accrued interest

271

252

Current Assets

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale securities, amortized cost basis

58,423

47,224

Available-for-sale marketable securities, fair value

(54)

(41)

58,382

47,191

Current Assets | Corporate bonds

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale securities, amortized cost basis

28,801

31,753

Available-for-sale marketable securities, fair value

(34)

(39)

28,767

31,714

Current Assets | Commercial paper

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale securities, amortized cost basis

23,963

7,986

Available-for-sale marketable securities, fair value

(20)

(1)

23,943

7,985

Current Assets | Certificates of deposit

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale securities, amortized cost basis

3,755

6,253

Available-for-sale marketable securities, fair value

3,768

6,261

Current Assets | Government municipal bonds

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale securities, amortized cost basis

1,904

1,232

Available-for-sale marketable securities, fair value

(1)

1,904

1,231

Non-current Assets

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale securities, amortized cost basis

13,645

Available-for-sale marketable securities, fair value

(21)

13,626

Non-current Assets | Corporate bonds

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale securities, amortized cost basis

4,138

Available-for-sale marketable securities, fair value

(12)

4,126

Non-current Assets | Certificates of deposit

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale securities, amortized cost basis

3,505

7,511

Available-for-sale marketable securities, fair value

(6)

$ 3,541

7,507

Non-current Assets | Government municipal bonds

Schedule of Available-for-sale Securities [Line Items]

Available-for-sale securities, amortized cost basis

1,996

Available-for-sale marketable securities, fair value

(3)

$ 1,993

[1]	Included in amortized cost and fair value is purchased and accrued interest of $271.
[2]	Included in amortized cost and fair value is purchased and accrued interest of $252

Marketable Securities (Fair Value and Gross Unrealized Losses for AFS) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015
Schedule of Available-for-sale Securities [Line Items]
Fair value of available-for-sale securities in continuous unrealized loss position for less than twelve months	$ 48,397	$ 47,054
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(53)	(62)
Fair value of available-for-sale securities in continuous unrealized loss position for twelve months or longer	4,102	499
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(1)	(1)
Corporate bonds
Schedule of Available-for-sale Securities [Line Items]
Fair value of available-for-sale securities in continuous unrealized loss position for less than twelve months	24,454	33,664
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(33)	(52)
Fair value of available-for-sale securities in continuous unrealized loss position for twelve months or longer	4,102	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(1)	0
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Fair value of available-for-sale securities in continuous unrealized loss position for less than twelve months	23,943	5,987
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(20)	(1)
Fair value of available-for-sale securities in continuous unrealized loss position for twelve months or longer	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ 0	0
Certificates of deposit
Schedule of Available-for-sale Securities [Line Items]
Fair value of available-for-sale securities in continuous unrealized loss position for less than twelve months		4,244
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss		(6)
Fair value of available-for-sale securities in continuous unrealized loss position for twelve months or longer		499
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss		(1)
Government municipal bonds
Schedule of Available-for-sale Securities [Line Items]
Fair value of available-for-sale securities in continuous unrealized loss position for less than twelve months		3,159
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss		(3)
Fair value of available-for-sale securities in continuous unrealized loss position for twelve months or longer		0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss		$ 0

(Financial Assets and Liabilities) (Details) - USD ($)
$ in Thousands

Sep. 30, 2016

Sep. 30, 2015

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring

$ 61,923

^[1]

$ 60,817

^[2]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

44,319

14,436

Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

61,923

60,817

Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Liability | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring

9,960

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Contingent consideration on acquired business

Liability | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Contingent consideration on acquired business

Liability | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Contingent consideration on acquired business

9,960

Money Market Funds | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Money Market Funds | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring

44,319

14,436

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Money Market Funds | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Corporate bonds | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Corporate bonds | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Corporate bonds | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring

28,767

35,840

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Commercial paper | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Commercial paper | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Commercial paper | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring

23,943

7,985

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Certificates of deposit | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Certificates of deposit | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Certificates of deposit | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring

7,309

13,768

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Government municipal bonds | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Government municipal bonds | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Government municipal bonds | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring

1,904

3,224

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Estimate of Fair Value Measurement | Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

106,242

75,253

Estimate of Fair Value Measurement | Money Market Funds | Fair Value, Measurements, Recurring

9,960

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Estimate of Fair Value Measurement | Corporate bonds | Fair Value, Measurements, Recurring

44,319

14,436

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Estimate of Fair Value Measurement | Commercial paper | Fair Value, Measurements, Recurring

28,767

35,840

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Estimate of Fair Value Measurement | Certificates of deposit | Fair Value, Measurements, Recurring

23,943

7,985

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Estimate of Fair Value Measurement | Government municipal bonds | Fair Value, Measurements, Recurring

7,309

13,768

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Quarterly Financial Information Disclosure [Abstract]

$ 1,904

$ 3,224

[1]	Included in amortized cost and fair value is purchased and accrued interest of $271.
[2]	Included in amortized cost and fair value is purchased and accrued interest of $252

Fair Value Measurements (Reconciliation of Liability) (Details) $ in Thousands	12 Months Ended
	Sep. 30, 2016 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value at beginning of period	$ 0
Purchase price contingent consideration	10,400
Change in fair value of contingent consideration	(440)
Fair value at end of period	$ 9,960

Fair Value Measurements (Details) $ in Thousands	12 Months Ended
Fair Value Measurements (Details) $ in Thousands	Sep. 30, 2016 USD ($)
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Purchase price contingent consideration	$ 10,400
Minimum \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value inputs probability of payment	75.80%
Maximum \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value inputs probability of payment	98.00%

Product Warranty Obligation (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Standard Product Warranty Accrual [Roll Forward]
Beginning balance	$ 1,014	$ 862	$ 1,063
Warranties issued	771	967	627
Settlements made	(752)	(815)	(828)
Ending balance	$ 1,033	$ 1,014	$ 862

Restructuring (Details) $ in Thousands	3 Months Ended				12 Months Ended
Restructuring (Details) $ in Thousands	Mar. 31, 2016 USD ($) employee	Dec. 31, 2015 USD ($) employee	Mar. 31, 2015 USD ($) employee	Dec. 31, 2013 USD ($) employee	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2013 USD ($) employee
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance		$ 0		$ 350	$ 0	$ 0	$ 350
Restructuring charge	$ 100	700	$ 400		753	412	152
Payments for restructuring					(754)	(403)	(431)
Restructuring reversals					(6)	(9)	(71)
Restructuring foreign currency fluctuation					7
Restructuring reserve, ending balance					0	0	0	$ 350
Employee Severance \| 2016 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance		0		0	0	0	0
Restructuring charge					558	0	0
Payments for restructuring					(559)	0	0
Restructuring reversals					(6)	0	0
Restructuring foreign currency fluctuation					7
Restructuring reserve, ending balance					0	0	0	0
Employee Severance \| 2015 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance		0		0	0	0	0
Restructuring charge					0	412	0
Payments for restructuring					0	(403)	0
Restructuring reversals					0	(9)	0
Restructuring foreign currency fluctuation					0
Restructuring reserve, ending balance					0	0	0	0
Employee Severance \| 2014 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance		0		0	0	0	0
Restructuring charge					0	0	152
Payments for restructuring					0	0	(152)
Restructuring reversals					0	0	0
Restructuring foreign currency fluctuation					0
Restructuring reserve, ending balance					0	0	0	0
Employee Severance \| 2013 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance		0		350	0	0	350
Restructuring charge					0	0	0
Payments for restructuring					0	0	(279)
Restructuring reversals				(100)	0	0	(71)
Restructuring foreign currency fluctuation					0
Restructuring reserve, ending balance					0	0	0	350
Facility Closing \| 2016 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance		$ 0		$ 0	0	0	0
Restructuring charge					195	0	0
Payments for restructuring					(195)	0	0
Restructuring reversals					0	0	0
Restructuring foreign currency fluctuation					0
Restructuring reserve, ending balance					$ 0	$ 0	$ 0	$ 0
UNITED STATES \| 2016 Restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Number of Positions Eliminated \| employee	5	10
Restructuring Reserve [Roll Forward]
Restructuring charge		$ 700
UNITED STATES \| 2013 Restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Number of Positions Eliminated \| employee								15
UNITED STATES \| Employee Severance \| 2016 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring charge	$ 100	500
UNITED STATES \| Employee Severance \| 2013 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring charge								$ 400
UNITED STATES \| Facility Closing \| 2016 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring charge		$ 200
INDIA \| 2015 Restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Number of Positions Eliminated \| employee			38
INDIA \| 2014 Restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Number of Positions Eliminated \| employee				40
INDIA \| Employee Severance \| 2015 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring charge			$ 400
INDIA \| Employee Severance \| 2014 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring charge				$ 200

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended					12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Tax Credit Carryforward [Line Items]
Valuation allowance	$ 5,970					$ 5,970	$ 862
Net tax benefits	200	$ 500	$ 700	$ 400	$ 500	1,500	800	$ 1,500
Accrued income tax penalties and interest for unrecognized tax benefits	200					200	$ 300
Accumulated undistributed foreign earnings	31,500					31,500
Maximum
Tax Credit Carryforward [Line Items]
Estimated unrecognized deferred tax liability	600					600
State and Local Jurisdiction
Tax Credit Carryforward [Line Items]
State research and development tax credits	900					900
United States Federal Tax Jurisdiction
Tax Credit Carryforward [Line Items]
U.S. capital loss carryforward	5,100					5,100
Foreign Tax Authority
Tax Credit Carryforward [Line Items]
Non-U.S. operating losses	$ 300					$ 300

Income Taxes (Income Taxes) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Income Tax Disclosure [Abstract]
United States	$ 9,841	$ 6,934	$ (833)
International	6,849	6,183	5,894
Income from continuing operations, before income taxes	$ 16,690	$ 13,117	$ 5,061

Income Taxes (Income Tax Provision) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Current:
Federal	$ (141)	$ 1,452	$ 1,007
State	139	453	(58)
Foreign	2,099	2,279	2,196
Deferred:
U.S.	1,260	(297)	(2,417)
Foreign	(145)	(203)	(160)
Income tax provision	$ 3,212	$ 3,684	$ 568

Income Taxes (Deferred Tax Assets) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Current deferred tax asset	$ 0	$ 3,252
Non-current deferred tax asset	7,295	6,255
Current deferred tax liability	0	(36)
Non-current deferred tax liability	(616)	(135)
Net deferred tax asset	6,679	9,336
Uncollectible accounts and other reserves	915	966
Depreciation and amortization	421	206
Inventories	683	999
Compensation costs	4,925	7,130
Tax carryforwards	6,263	1,185
Valuation allowance	(5,970)	(862)
Indentifiable intangible assets	(558)	(288)
Net deferred tax asset	$ 6,679	$ 9,336

Income Taxes (Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Income Tax Disclosure [Abstract]
Statutory income tax amount	$ 5,548	$ 4,491	$ 1,721
State taxes, net of federal benefits	204	(190)	(251)
Utilization of tax credits	(1,116)	(250)	(76)
Manufacturing deduction	(450)	(285)	(92)
Discrete tax benefits	(1,461)	(818)	(1,475)
Foreign operations	276	181	316
Valuation reserve	(43)	297	11
Adjustment of tax contingency reserves	202	71	168
Meals and entertainment	55	64	93
Employee stock purchase plan	83	76	85
Contingent consideration	(154)	0	0
Other, net	68	47	68
Income tax provision	$ 3,212	$ 3,684	$ 568

Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2016
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefits, beginning balance	$ 1,618	$ 2,301	$ 3,332
Increases related to prior year income tax positions	107	110	181
Increases related to current year income tax positions	240	144	148
Decreases related to prior year income tax positions	(71)	(255)	(1,105)
Decreases related to settlements	(30)	(74)	(95)
Decreases related to expiration of statute of limitations	(156)	(608)	(160)
Unrecognized tax benefits, ending balance	1,708	1,618	2,301
Income Tax Contingency [Line Items]
Unrecognized tax benefits that would impact effective tax rate				$ 1,600
Expected change in unrecognized tax benefits, minimum				700
Unrecognized tax benefits	1,618	$ 2,301	$ 3,332	1,708
Noncurrent income taxes payable
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefits, ending balance	1,300
Income Tax Contingency [Line Items]
Unrecognized tax benefits	1,300			1,300
Noncurrent deferred tax assets
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefits, ending balance	400
Income Tax Contingency [Line Items]
Unrecognized tax benefits	$ 400			$ 400

Stock-Based Compensation (Details) - USD ($) $ in Thousands		12 Months Ended
Stock-Based Compensation (Details) - USD ($) $ in Thousands	Jan. 25, 2010	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014	Feb. 01, 2016	Jan. 27, 2014	Jan. 28, 2013	Dec. 04, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from employee stock purchase plan transactions		$ 896	$ 925	$ 1,009
Shares Paid for Tax Withholding for Share Based Compensation		47,464	9,371
Adjustments Related to Tax Withholding for Share-based Compensation		$ 600	$ 100
Proceeds from stock option plan transactions		7,191	6,559	3,689
Excess tax benefits from stock-based compensation		212	0	44
Total intrinsic value of all options exercised		$ 1,900	900	500
Forfeiture rate		10.00%
Total grant date fair value of shares vested		$ 2,900	2,900	800
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost nonvested awards		$ 2,900
Weighted average period, unrecognized compensation cost, nonvested awards		3 years
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average period, unrecognized compensation cost, nonvested awards		1 year 3 months 18 days
Total unrecognized compensation cost, restricted stock units		$ 3,000
The 2016 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized					1,500,000
Number of shares available for future grants		1,450,982
The 2016 Plan \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period		7 years
Vesting period		4 years
The 2014 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized						2,250,000
The 2014 Plan \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period		8 years
Vesting period		4 years
The 2013 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized							1,750,000
The 2013 Plan \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period		8 years
Vesting period		4 years
The Omnibus Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized								5,750,000
Number of additional shares authorized	2,500,000
The Stock Option Plan and Non-Officer Plan \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period		10 years
Vesting period		4 years
The Purchase Plan \| The Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized						2,800,000
Proceeds from employee stock purchase plan transactions		$ 900	$ 900	$ 1,000
Number of continuous days of service		90 days
Number of hours per week employed		20 hours
Percent of market value		85.00%
Offering period		3 months
Common shares issued to employees		103,915	123,847	129,449
Shares available for future issuance		513,616
Director \| The 2016 Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		1 year
Director \| The 2014 Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		1 year
Director \| The 2013 Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		1 year
Executives and Employees \| The 2016 Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		4 years
Executives and Employees \| The 2014 Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		4 years

Stock-Based Compensation (Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	$ 3,649	$ 3,881	$ 3,947
Income tax benefit	(1,185)	(1,343)	(1,361)
Stock-based compensation after income taxes	2,464	2,538	2,586
Cost of Sales
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	215	221	207
Sales and Marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	921	1,158	1,171
Research and Development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	590	561	636
General and Administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	$ 1,923	$ 1,941	$ 1,933

Stock-Based Compensation (Options and Common Shares Reserved for Grant) (Details) - Stock Options $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2016 USD ($) $ / shares shares
Options Outstanding [Roll Forward]
Options Outstanding, Beginning Balance \| shares	4,800
Options Outstanding, Granted \| shares	553
Options Outstanding, Exercised \| shares	(772)
Options Outstanding, Forfeited / Cancelled \| shares	(618)
Options Outstanding, Ending Balance \| shares	3,963
Options Outstanding, Exercisable \| shares	2,857
Weighted Average Exercise Price [Roll Forward]
Weighted Average Exercise Price, Beginning Balance	$ 10.21
Weighted Average Exercise Price, Granted	11.46
Weighted Average Exercise Price, Exercised	9.65
Weighted Average Exercise Price, Forfeited / Cancelled	11.06
Weighted Average Exercise Price, Ending Balance	10.36
Weighted Average Exercise Price, Exercisable	$ 10.49
Weighted Average Remaining Contractual Term [Abstract]
Weighted Average Remaining Contractual Term, Outstanding	4 years 6 months
Weighted Average Remaining Contractual Term, Exercisable	3 years 8 months 12 days
Aggregate Intrinsic Value [Abstract]
Aggregate Intrinsic Value, Outstanding \| $	$ 6,078
Aggregate Intrinsic Value, Exercisable \| $	$ 4,158
Closing Stock Price	$ 11.40

Stock-Based Compensation (Fair Value Assumptions) (Details) - Stock Options - $ / shares	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average per option grant date fair value	$ 3.90	$ 2.98	$ 4.35
Assumptions Used For Options Grants [Abstract]
Risk free interest rate, minimum	1.22%	1.57%	1.76%
Risk free interest rate, maximum	1.85%	1.85%	2.02%
Expected term	6 years	6 years	6 years
Expected volatility rate, minimum	32.00%	32.00%	38.00%
Expected volatility rate, maximum	33.00%	36.00%	40.00%
Weighted average volatility	32.00%	35.00%	40.00%
Expected dividend yield	0.00%	0.00%	0.00%

Stock-Based Compensation (Exercise Price Range) (Details) - Stock Options shares in Thousands	12 Months Ended
	Sep. 30, 2016 $ / shares shares
$7.40 - $8.03 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	$ 7.40
Exercise Price Range, Upper Range	$ 8.03
Options Outstanding \| shares	611
Weighted Average Remaining Contractual Term	4 years 4 months 6 days
Weighted Average Exercise Price, Options Outstanding	$ 7.74
Number of Shares Vested, Options Exercisable \| shares	460
Weighted Average Exercise Price, Options Exercisable	$ 7.85
$8.04 - $9.03 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	8.04
Exercise Price Range, Upper Range	$ 9.03
Options Outstanding \| shares	627
Weighted Average Remaining Contractual Term	5 years 5 months 26 days
Weighted Average Exercise Price, Options Outstanding	$ 8.52
Number of Shares Vested, Options Exercisable \| shares	234
Weighted Average Exercise Price, Options Exercisable	$ 8.42
$9.04 - $9.68 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	9.04
Exercise Price Range, Upper Range	$ 9.68
Options Outstanding \| shares	685
Weighted Average Remaining Contractual Term	5 years
Weighted Average Exercise Price, Options Outstanding	$ 9.53
Number of Shares Vested, Options Exercisable \| shares	662
Weighted Average Exercise Price, Options Exercisable	$ 9.53
$9.69 - $10.81 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	9.69
Exercise Price Range, Upper Range	$ 10.81
Options Outstanding \| shares	830
Weighted Average Remaining Contractual Term	5 years 2 months 26 days
Weighted Average Exercise Price, Options Outstanding	$ 10.57
Number of Shares Vested, Options Exercisable \| shares	664
Weighted Average Exercise Price, Options Exercisable	$ 10.58
$10.82 - $12.63 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	10.82
Exercise Price Range, Upper Range	$ 12.63
Options Outstanding \| shares	724
Weighted Average Remaining Contractual Term	5 years 1 month 17 days
Weighted Average Exercise Price, Options Outstanding	$ 12.10
Number of Shares Vested, Options Exercisable \| shares	351
Weighted Average Exercise Price, Options Exercisable	$ 11.73
$12.64 - $14.75 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	12.64
Exercise Price Range, Upper Range	$ 14.75
Options Outstanding \| shares	268
Weighted Average Remaining Contractual Term	4 months 20 days
Weighted Average Exercise Price, Options Outstanding	$ 13.47
Number of Shares Vested, Options Exercisable \| shares	268
Weighted Average Exercise Price, Options Exercisable	$ 13.47
$14.76 - $15.23 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	14.76
Exercise Price Range, Upper Range	$ 15.23
Options Outstanding \| shares	218
Weighted Average Remaining Contractual Term	1 year 1 month 27 days
Weighted Average Exercise Price, Options Outstanding	$ 15.23
Number of Shares Vested, Options Exercisable \| shares	218
Weighted Average Exercise Price, Options Exercisable	$ 15.23
$7.40 - $15.23 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	7.40
Exercise Price Range, Upper Range	$ 15.23
Options Outstanding \| shares	3,963
Weighted Average Remaining Contractual Term	4 years 6 months 10 days
Weighted Average Exercise Price, Options Outstanding	$ 10.36
Number of Shares Vested, Options Exercisable \| shares	2,857
Weighted Average Exercise Price, Options Exercisable	$ 10.49

Stock-Based Compensation (Non-Vested Options) (Details) - Restricted Stock Units shares in Thousands	12 Months Ended
	Sep. 30, 2016 $ / shares shares
Nonvested Number of Restricted Stock Units [Roll Forward]
Number of Restricted Stock Units, Beginning Balance \| shares	543
Number of Restricted Stock Units, Granted \| shares	251
Number of Restricted Stock Units, Vested \| shares	(185)
Number of Restricted Stock Units, Canceled \| shares	(104)
Number of Restricted Stock Units, Ending Balance \| shares	505
Nonvested Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share [Roll Forward]
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Beginning Balance \| $ / shares	$ 8.41
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Granted \| $ / shares	10.92
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Vested \| $ / shares	8.55
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Canceled \| $ / shares	8.13
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Ending Balance \| $ / shares	$ 9.67

Common Stock Repurchase (Details) - USD ($)	1 Months Ended	12 Months Ended
Common Stock Repurchase (Details) - USD ($)	Oct. 31, 2014	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014	Apr. 26, 2016	Oct. 28, 2014	Oct. 29, 2013
Shares repurchased, value		$ 550,000	$ 2,339,000	$ 15,802,000
October 2013 authorized repurchase program
Stock repurchase program, authorized amount							$ 20,000,000
Shares repurchased	287,787
Shares repurchased, value	$ 2,200,000
October 2014 authorized repurchase program
Stock repurchase program, authorized amount						$ 15,000,000
Shares repurchased			0
April 2016 authorized repurchase program
Stock repurchase program, authorized amount					$ 15,000,000
Shares repurchased		0

Share Rights Plan (Details) - Series A Junior Participating Preferred Stock	Sep. 30, 2016 $ / shares shares
Class of Warrant or Right [Line Items]
Amount of shares eligible to buy \| shares	0.01
Exercise price \| $ / shares	$ 60

Employee Benefit Plans (Details) - USD ($) $ in Millions	12 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Millions	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Defined Contribution Plan Disclosure [Line Items]
Maximum annual contribution per employee percentage	25.00%
Matching contributions, amount	$ 1.4	$ 1.7	$ 1.6
Full Employer Match
Defined Contribution Plan Disclosure [Line Items]
Employers percent of matching contributions	100.00%
Percent of employees' gross pay for employer match	3.00%
Half Employer Match
Defined Contribution Plan Disclosure [Line Items]
Employers percent of matching contributions	50.00%
Percent of employees' gross pay for employer match	2.00%

Commitments (Details) $ in Thousands	Sep. 30, 2016 USD ($)
Leases, Operating [Abstract]
2017	$ 1,706
2018	958
2019	800
2020	388
2021	70
Thereafter	0
Total minimum payments required	$ 3,922

Commitments (Rent Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Leases, Operating [Abstract]
Rentals	$ 1,613	$ 2,076	$ 2,606
Less: sublease rentals	(46)	(56)	(24)
Total rental expense	$ 1,567	$ 2,020	$ 2,582

Quarterly Financial Data (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

12 Months Ended

Sep. 30, 2016

Jun. 30, 2016

Mar. 31, 2016

Dec. 31, 2015

Sep. 30, 2015

Jun. 30, 2015

Mar. 31, 2015

Dec. 31, 2014

Sep. 30, 2016

Sep. 30, 2015

Sep. 30, 2014

Total revenue

$ 50,454

$ 52,130

$ 50,162

$ 50,259

$ 54,173

$ 52,055

$ 50,401

$ 47,218

$ 203,005

$ 203,847

$ 183,173

Gross profit

24,604

25,977

24,742

24,357

26,305

25,024

23,235

22,557

99,680

97,121

90,377

Income (loss) from discontinued operations, after income taxes

3,844

^[1],[2]

4,277

^[1],[2]

2,226

^[1],[2]

3,131

^[1],[2]

3,668

^[1],[2],[3]

3,085

^[1],[2],[3]

1,662

^[1],[2],[3]

1,018

^[1],[2],[3]

13,478

9,433

4,493

(89)

3,319

(683)

(589)

(216)

(1,357)

3,230

(2,845)

(2,742)

$ 3,844

^[1],[2]

$ 4,277

^[1],[2]

$ 2,137

^[1],[2]

$ 6,450

^[1],[2]

$ 2,985

^[1],[2],[3]

$ 2,496

^[1],[2],[3]

$ 1,446

^[1],[2],[3]

$ (339)

^[1],[2],[3]

$ 16,708

$ 6,588

$ 1,751

$ 0.15

$ 0.17

$ 0.09

$ 0.12

$ 0.15

$ 0.12

$ 0.07

$ 0.04

$ 0.52

$ 0.38

$ 0.18

Net income per common share, basic (USD per share)

0.00

0.13

(0.03)

(0.02)

(0.01)

(0.06)

0.13

(0.12)

(0.11)

0.15

^[4]

0.17

^[4]

0.08

^[4]

0.25

^[4]

0.12

^[4]

0.10

^[4]

0.06

^[4]

(0.01)

^[4]

0.65

^[5]

0.27

^[5]

0.07

^[5]

0.14

0.16

0.09

0.12

0.14

0.12

0.07

0.04

0.51

0.37

0.17